Reid Hoffman’s not fully convincing book on “Blitzscaling”

Businesses can achieve global scale faster than ever in the Networked Age, argues LinkedIn-founder Reid Hoffman in his new book, but must grow fast or die slow in a brutal market where the winner takes all.

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Blitzscaling — The lightning-fast path to building massively valuable companies. Reid Hoffman, Chris Yeh, 336 pages, Penguin Random House, 2018

Reid Hoffman may be the closest Silicon Valley has to a philosopher king. Stanford- and Oxford-educated Settlers from Catan enthusiast. Original Communist, who has dedicated his formidable brain capacity to “playing monopoly” on the Internet. Member of the “PayPal Mafia”, the eccentric group of nerds — including Elon Musk and Peter Thiel — who founded the pioneering payment service before moving on to building some of the most powerful businesses in the Internet age. In Hoffman’s case, the professional network LinkedIn. Since Linkedin was acquired by Microsoft for $26,2 billion in 2016, Hoffman has served as a board member of the software giant along with his numerous other investing and philanthropic endeavours.

Precisely because of his somewhat paradoxical background, Hoffman brings illuminating perspectives on the 21st century Internet economy, in his new book — Blitzscaling: The lightning-fast path to building massively valuable companies — and explains why he believes the ability to act fast is the key to competitive advantage in the modern economy.

The title, Blitzscaling, derives from Blitzkrieg. The German concept of attacking warfare perfected by Heinz Guderian during the invasion of France in 1940. French forces were completely outmanoeuvred and overwhelmed by the surprise element of the Germans’ lightning-fast and densely concentrated combined tank and air attacks. Hoffman is fully aware of the nomenclature’s burdened history but has chosen analytical precision over political correctness — also considering that the German word (which in fact was popularised by the British tabloids and never officially used by the Wehrmacht. Guderian himself referred to the doctrine as Bewegungskrieg in his book Achtung — Panzer!) or its shortened form Blitz has become a common metaphor in sports and elsewhere. As Hoffman makes clear, Blitzscaling accurately captures the strategic essence of how technology companies such as Amazon, Google, Facebook, Apple, Uber and AirBnB have rapidly subjected huge markets to their rule.

Dawn of the Networked Age

At the end of 1996, the world’s five most valuable companies were General Electric, Royal Dutch Shell, The Coca-Cola Company, Nippon Telegraph & Telephone and ExxonMobil. The common denominator is that they all were traditional industrial or consumer goods companies. Fast forward to the end of 2017, and the the Top 5 list looks very different: Apple, Google, Microsoft, Amazon and Facebook. All technology companies, of which Google and Facebook were not even born in 1996, while Amazon was a two-year-old toddler.

What happened? The Networked Age happened — Hoffman’s preferred term for the era he dates from the stock market listing of Netscape, the pioneering web browser provider, in 1995. Today, over two billion people are connected to the internet through smartphones that have become an extended limb of the human body. At the same time, more and more industries and businesses are being run on software and delivered as online services, as Netscape founder Marc Andreessen wrote in a well-known essay in 2011, “Software is eating the world”. Binge watching on Netflix has replaced the drive to the video rental shop. Amazon has delivered mass death for physical bookstores. IBM produced its last PC in 2005, and today is essentially a software and services provider. Even industries that produce physical products (the economy of atoms), like cars or refrigerators, are becoming ever more integrated with software (the economy of bits). Such as when a Tesla’s acceleration is upgraded by an automatic software update while the car sits untouched in the garage overnight.

Goodbye Galapagos

Hoffman’s central thesis is that in this hyperconnected world it is possible to build global monopolies faster than ever in history. This has fundamentally changed the market economy. While the world economy previously consisted of geographically fragmented “Galapagos Islands”, where many businesses such as newspapers and bookstores were relatively sheltered from external competition, the networked age has tied these islands together in a hyper-competitive global market.

The Networked Ages opens up enormous opportunities for entrepreneurs with wet dreams of monopoly. The flip side is a merciless market where “thewinner takes all”. Hoffman illustrates with an analogy from the movie Glengarry Glen Ross, where Alec Baldwin’s character, Blake, tells a sales team: “As you all know, first prize is a Cadillac Eldorado. Anyone wanna see second prize? Second prize is a set of steak knives. Third prize is you’re fired. Get thepicture?” Or in the social network category: First prize to Facebook, second to MySpace, and third prize to Friendster, who hardly anyone remember.

Why did Facebook win? Mark Zuckerberg was not the market’s first mover — Both Friendster and MySpace got off the ground before Facebook. But Facebook was the first scaler. Being the first to achieve critical mass is decisive in a market with network effects. If all your friends choose Facebook, it is pointless to sign up with another social network that no one uses. This creates a positive feedback loop, eventually ending in an equilibrium where Facebook more or less monopolises the market while all the other players go the way of Friendster. De facto the consumer does not really have much of a free choice whether he wants to use Facebook or a competing social network. Like a political prisoner in a remote Siberian labour camp a Facebook user in theory is quite free to go anywhere, but in practice has nowhere else to go. The degree of customer lock -in Mark Zuckerberg has cunningly engineered would be admired by the designers of the Gulag.

The Magic of Network Effects

Hoffman prefers the layman’s definition of network effects: A product or service is subject to positive network effects when increased usage by one user increases the value of the product or service for other users. Network effects occur in several forms: Increasing numbers of passengers or guests attracts more drivers and landlords to marketplaces such as Uber and AirBnB, and vice versa, (two-sided network effects); The dominance of operating systems such as Windows, iOS or Android, encourage third-party application developers to adapt their apps to these platforms, (indirect network effects); Microsoft Word’s dominance meant that its document file format became the industry standard and swept all non-compatible competitors off the pitch, (network effects driven by compatibility and industry standards). Similarly, that Internet Explorer came pre-installed on all Windows PCs was the “pincer movement” that broke Netscape.

A feature in markets with network effects is increasing returns to scale, which often results in a monopolistic/oligopolistic equilibrium where one single or a few dominant players eat all of an industry’s profits — as demonstrated today by for instance Facebook. Facebook enjoys a gross margin of a whopping 82 percent. Yet, as Hoffman reminds, many failed to see the potential value of Facebook in the company’s early days, when Zuckerberg turned down repeated takeover offers. Perhaps the doubters were not without reason; as late as 2012 Facebook struggled with the transition from desktop to mobile.

Move Fast and Break Things

Facebook’s problem with finding the right product/market fit was nevertheless a luxury problem. Thanks to the record-breaking user growth, Facebook accumulated enormous amounts of data on billions of people — a digital gold mine. It was just a question of time to figure out the profit-maximising business model. MySpace or Friendster didn’t have this privilege. Without users, no business model. With users, one can find a business model later.

In this market landscape, speed is as vital as it was for Guderian’s Panzerkorpsin World War II. The only difference is that while Guderian had to capture land, business have to capture data. To achieve scale quickly, businesses must be willing to sacrifice efficiency for speed. Companies must grow fast or die slow. Summarised in Mark Zuckerberg’s previous motto: Move fast and breakthings. The classic approach to business strategy, carefully gathering information and making decisions with a fairly high confidence level, is dead. Blitzscaling forces businesses to make much faster decisions in the face of much higher levels of uncertainty, and they must commit to making big investments being half-blinded in the dark.

In a market where the winner takes all (or most), it becomes more important to cement market share before focusing on profitability. For Jeff Bezos in Amazon, profit has been secondary to growth for a quarter of a century — expressed by his bon mot that: “your margin is my opportunity”. Uber has subsidised both drivers and passengers when they have launched in new markets, in order to take the pole position before their competitors. Naturally, it would not have been possible without investors who have been willing to pump in nine billion dollars to fund Uber’s growth — an investment they can be far from sure to recoup. The growth imperative in the networked age also explains the popularity of Freemium business models, which companies from Spotify to Dropbox employ, luring new customers with a free version in the hope that they will upgrade to a paying premium subscription later on.

Can Software Digest the World?

It is a small paradox that technological developments are taking place so quickly, at the same time as productivity growth in the economy overall is stagnating. This must probably be seen in light of the fact that only a very small number of companies achieve lightning-fast growth and monopoly profit, while many others are lagging behind. Information technology also appear to be a contributing factor to the rising market concentration seen in many industries, raising the productivity gap between market leading and average firms.

As Peter Thiel, among others, have highlighted there is a dichotomy between the economy of bits and the economy of atoms, with rapid technological development in the former and far slower in the latter.

Thiel’s bifurcation can be illustrated by Tesla, a company at the intersection of new technology and old industry. Due to physical bottlenecks in the value chain, Tesla has not managed to increase car production in line with rising demand — hampering the company’s growth and exposing its fragile finances. One big reason why fast-growing online businesses like Dropbox have been able to navigate around such infrastructure limitations is Amazon’s cloud services offering, Amazon Web Services (AWS) — which almost by accident thus has become Amazon’s primary cash cow. However, so far nobody, not even Elon Musk, has found a way to manufacture Teslas in the cloud. Unfortunately, it must still be done in the physical world. This is the Achilles heel of Hoffman’s thesis: Companies can grow exponentially in the internet age, as long as they confine their business to the realm of bits. Confronted with the sticky realities of the world of atoms, things tend to slow down. Perhaps software is eating the world, but there are still some chunky pieces of the physical economy left that may prove tricky to chew and digest.

 

Previously published on Medium

Je suis Woke!

Titania McGrath har skrevet årets viktigste bok. Hvis du ikke leser den er du mest sannsynlig en fascist. 

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Hun er internettsensasjonen, den post-moderne feministiske inkarnasjonen av Jeanne D’Arc som holder håpet oppe for Millennials opptatt av sosial rettferdighet, etter kriseåret 2016 som med valget av Trump og Brexit kastet verden ut i en ny urfascistisk epoke. I Woke – A Guide to Social Justice, viser Titania McGrath hvordan alle ved å legge et LGBT-filter over sitt Facebook-profilbilde kan bli aktivister som bidrar til et mer inkluderende samfunn.

Internasjonalt hører McGrath til avantgarden av radikale feminister som kvinnemarsj-impresario Linda Sarsour, Emma «Hermine» Watson og de amerikanske demokratenes nye stjerneskudd: Alexandria Ocasio-Cortez. Her hjemme har McGrath meningsfeller som MDG-provokatør Eivind Trædal, Morgenblad-spaltist Mohamed Abdi, Bergens Tidende-kommentator Jens Kihl, eller avtroppende Innovasjon Norge-sjef Anita Krohn Traaseth. Den norske stemmen som ligger aller nærest McGrath er trolig den islamisk-feministiske samfunnsdebattanten Sumaya Jirde Ali, som i likhet med McGrath er en prisbelønt interseksjonell, antirasistisk poet. De formidler begge med sin dyptfølte poesi visjoner for et ikke-binært, pro-trans, kroppspositivistisk, poly-amorøst og hatfritt multikulturelt samfunn med klare føringer for en inkluderende og ikke-krenkende ytringsfrihet.

Man kan til og med ane klare likhetstrekk i de artistiske uttrykksformene til de to poetene. For eksempel, Jirde Alis tankevekkende tordentale: «Fuck Politiet! Fuck Listhaug!», som vekker paralleller til den sublime emosjonelle kraften i et av McGraths mest kjente verker, Brexit: A Haiku:

Fuck fuck fuck fuck fuck

Fuck fuck fuck fuck fuck fuck fuck

Fuck fuck fuck fuck fuck.

Som for mange progressive briter var det Brexit som var vekkelsesøyeblikket for McGrath, som studerte til en mastergrad i kjønnsstudier ved Universitetet i Oxford. McGrath, som nå er sterkt for en ny folkeavstemning, en «People’s Vote», åpner kapittelet om «Brexit and the Rise of the Fourth Reich» med et sitat fra Donald Tusk, president i Det europeiske råd: «I fear Brexit could be the beginning of the destruction of not only the EU but also Western political civilisation in its entirety».

McGrath trekker frem den kraftige økningen i knivkriminalitet, syreangrep og kjønnslemlestelse av kvinner etter britene stemte for å tre ut av EU, som eksempler på at vi har fått, som blant andre Jonas Gahr Støre har påpekt i Norge, et kaldere samfunn med hardere retorikk.

Til tross for at høyrepopulistiske krefter er på fremmarsj i politikken mønstrer de progressive motkreftene på universitetscampuser og barneskoler fra California til Cambridge – som de siste ukenes skolestreiker for klimaet har vært eksempel på. Som Greta Thunberg er McGrath med rette forbannet på en foreldregenerasjon som har forurenset så mye at verden vil gå opp i et inferno av flammer om 12 års tid, om ikke en plan à la Ocasio-Cortez’ New Green Deal blir iverksatt. Som denne ukens avstemning i det amerikanske senatet viste, er det dog en god stund til det blir virkelighet. Min woke lillebror deltok på klimastreiken forrige uke for å signalisere at han er mot global oppvarming. Men når de voksne uansett ikke lytter, er det heller ingen grunn til at han skal ha dårlig samvittighet for påskeflyturene til Østerrike og Santorini.

Det er imidlertid ikke bare klimaet som blir voldtatt. Det blir også kvinner, i litterær så vel som metaforisk forstand. McGrath deler oppfatningen til de norske likestillingsguruene Isabelle Ringnes og Marie Louis Sunde, forfatterne av boken «Hvem spanderer», at vi fortsatt lever i et patriarkalsk samfunn gjennomsyret av subtil hverdagsdiskriminering. Selv om kvinner i Vesten i dag har stemmerett, kan bli karrierekvinner og har alle de samme rettighetene som menn, argumenterer McGrath patosfylt for at kvinner er mer undertrykt i dagens samfunn enn noen gang. Hvis du tviler. Bare begrepet karrierekvinne er bevis på det. Som Ringnes og Sunde har belyst, bruker vi aldri begrepet karrieremann. Det faktum at Norge ledes av et triumvirat av kvinner gir også en illusjon av kvinnelig makt. Som Margaret Thatcher er Erna Solberg, Siv Jensen, og Trine Skei Grande, særlig Jensen, kun kvinner i ren biologisk forstand.

Kvinner er langt ifra alene om å bli undertrykt i dagens samfunn. De to viktigste fanesakene for sosiale justisforkjempere i dag er trolig kampen for avkolonisering av akademia og kampen for ikke-binære kjønnspronomen. Pensumlitteraturen på vestlige universiteter er nesten utelukkende er skrevet av heterofile hvite menn og en skrikende undervekt av kvinner og transpersoner med minoritetsbakgrunn – med et mulig unntak for kjønnsstudier.

På historisk fakulteter lever myten om vestlig sivilisasjons kulturelle overlegenhet fortsatt i beste velgående, trass BBCs beundringsverdige forsøk på å omskrive historien i mer mangfoldig og inkluderende lys. Med tanke på at Vestens historie har vært en kavalkade av kvinneundertrykkelse og folkemord mot etniske minoriteter, finnes det gode argumenter for å ikke studere historie i det hele tatt og heller fokusere på fremtiden. ISIS har fått mye rettmessig kritikk, men kalifatets bulldosering av de kolonialistiske monumentene i Palmyra, var om ikke annet et forbilledlig eksempel på progressiv avkolonisering.

Behovet for avkolonisering gjelder vel så mye for de naturvitenskapelige fagene som de humanistiske. McGrath viser for eksempel til matematikkprofessoren Rochelle Gutiérrez ved Universitetet i Illinois, som har demonstrert at matematikk bidrar til å perpetuere hvitt privilegium.

Selv om statuen av Cecil Rhodes (#Rhodesmustfall) fortsatt står oppreist på McGraths alma mater, er det en viss fremgang på kjønnspronomensfronten, ofte fra uventet hold. For eksempel kompenserer globale banker som HSBC for negative overskrifter om hvitvaskingsskandaler, renterigging og velting av verdensøkonomien ved å tilby kundene flere alternative kjønnspronomen, herunder Mx, Ind, M, Misc, Mre, Msr, Myr, Pr, Sai og Ser. Facebook har også frigjort sine brukere fra ikke-binære pronomensvalg.

McGraths bok inneholder også viktige lærdommer for den politiske venstresiden. De tidligere statsbærende sosialdemokratiske partiene i mange land har hatt problemer med å demme opp for høyrebølgen. Problemet er ikke partiene, men velgerne. Kjernen i problemet er at velgergruppen den engelske venstresideavisen The Guardian beskriver som «low-information»-velgere – også kjent som arbeiderklasse – ikke har klart å holde tritt med de progressive verdiene til partiene de var ment å stemme på. Mange lumpenproletære velgere er mer opptatt av hva de selv får i lønn, enn kald retorikk i samfunnet.

Løsningen for venstresiden er derfor å løsrive seg fra den antikverte klassekampforståelsen og heller bli en bastion for identitetspolitikk. Kjønn og rase er de viktigste identitetsmarkørene i dag, ikke klasse. Dette er noe Hadia Tajik har skjønt, men ikke Trond Giske.

For å leve i et helt fritt samfunn, må det være begrensninger på ytringsfriheten. Som Guardian-kommentator Owen Jones har forklart, brukes «ytringsfrihet» i dag ofte som en eufemisme av ytre høyre for å legitimere krypto-fascisme. Det ser man tydelig i Norge også, hvor de hyppigste forsvarerne av «ytringsfriheten» er stemmer som Helge Lurås, Hans Rustad og Hege Storhaug. Derimot var Jonas Gahr Støre forut for sin tid da han stod opp for en betinget ytringsfrihet under karikaturstriden i 2006. Den nylige dommen mot den 71-årige kvinnen som kalte Sumaya Jirde Ali for en «korrupt kakkerlakk» i en Facebook-diskusjon markerer også et paradigmeskift til en ytringsfrihet med en samvittighet. Som Rune Berglund Steen, leder i Antirasistisk senter og forhenværende interseksjonell poet, som først anmeldte kvinnen, profetisk sa: «Nå kommer [hatkriminalitets-] dommene!»

Kampen mot hatretorikk er dog ikke enkel. Det er begrenset hvor mange tastaturkrigere Antirasistisk senter kan saksøke. Det er heller ikke lett når statens egen TV-kanal lar Bård Tufte Johansen sitte hver fredagskveld og spre krenkende hathumor mot så vel innvandrere, fattige og kroppspressede anorektikere under dekning av Johan Goldens afro-karibiske utseende som syltynt minoritetsalibi. Derfor er det holdningsskapende arbeidet i NGO-sektoren viktig. En av vår tids viktigste tenkere, Dag Herbjørnsrud i Senter for global og komparativ idéhistorie (Global and Comparative History of Ideas), har rettet søkelyset på fenomenet «norske tilstander», nemlig det blåbrune konsensus i den norske meningskorridoren, som ikke levner rom for å debattere temaer som «no-platforming» (scenenekt), avkolonisering av akademia og kulturell appropriasjon – temaer som dekkes langt mer tolerant av den svenske pressen.

Et eksempel på det er da finansminister Siv Jensen kledde seg ut som indianerfiguren Pocahontas, (til tross for å ha enda mindre rettmessig hevd på indianertilhørighet enn Elizabeth Warren). I Norge gikk det nesten upåaktet hen. Om en svensk politiker hadde gjort det, ville hen ha fått passet behørig påskrevet for kulturell appropriasjon – det fremste symbolet på hvit makt. Da Sigrid Bonde Tusvik protesterte mot regjeringens innskrenkninger i abortloven ved å kle seg ut i kostymer fra The Handmaid’s Tale, var hun i motsetning til Jensen gjennomtenkt nok til å ikke appropriere identiteten til rollefigurer med minoritetsbakgrunn. Neste gang får Siv Jensen kle seg ut som guvernør Ratcliffe – en rolle som kler hennes «toxic masculinity» bedre.

Noen spør om Titania McGrath er en genuin person. Det er et mikroaggressivt fakta-fetisjistisk spørsmål som ikke tar innover seg den emosjonelle virkelighetsopplevelsen i en post-faktisk verden. Følelser bryr seg ikke om fakta. Som Alexandria Occasionally-Correct sier: «I think that there’s a lot of people more concerned about being precisely, factually and semantically correct than about being morally right». Om Titania McGrath er fiksjon eller faktum gjør ingen forskjell. Det som betyr noe er at hen har moralsk rett. Vi er alle woke nå. Vi er alle Titania McGrath.

 

Does the Massive Popularity of Michelle Obama’s Becoming Signal the Renaissance of the Traditional Housewife?

Michelle Obama’s Becoming has sold more than 10 million copies since its release before Christmas, and is on-track to become the most-selling memoir of all time, according to publisher Bertelsmann.

Given her global superstar profile a Michelle Obama memoir would have achieved record-sales even if it had contained blank pages only. Still, the book’s popularity is remarkable.

Does its popular appeal signal anything?

While Michelle Obama is certainly very bright and gifted and could have made a successful career in law (or other domains) in her own right, she effectively surrendered her own career to that of her husband. It was an act of self-preservation, foreseeing that his ambition would swallow hers.

From the review in VOX:

But after college, she finds herself without a clear-cut direction. She falls into law school and then a position at a major Chicago law firm because it seems like the logical next step for her, and she excels despite her lack of passion for the work.

It’s not until she meets Barack Obama and starts to get serious about dating him that she begins to consider that she ought to direct her professionalambition elsewhere — and she is clear about the fact that her decision is, in part, an act of self-preservation.

“I was deeply, delightfully in love with a guy whose forceful intellect and ambition could possibly end up swallowing mine,” she writes. “I saw it coming already, like a barreling wave with a mighty undertow.”

She decides that she’ll have to make room in her life for the ideas that truly interest her — “education, teen pregnancy, black self-esteem” — and takes a pay cut to stop practicing law and start working in city hall instead. Eventually, she lands a position as a vice president at the University of Chicago hospital.

Michelle Obama is essentially the anti-Sheryl Sandberg. Leaning out rather than leaning in. As she bluntly blurted out a book event in December — before quickly collecting herself:

“That whole, ‘So you can have it all.’ Nope, not at the same time,” she said. “That’s a lie. And it’s not always enough to lean in, because that shit doesn’t work all the time.”

As opposed to the ice-cold non-cookie baking Hillary, Michelle Obama embraced the soft power image of a non-political FLOTUS, and seems to have ended up all the more popular as a result.

From the Guardian review:

While Barack had to cope with the burden of that 40lb “nuclear football”lugged around by a military aide, Michelle astutely exercised what she calls “soft power”. Hillary Clinton antagonised housewives everywhere by refusing to stay at home and bake cookies; as First Lady, Michelle devoted herself to planting a vegetable garden in the White House grounds – an enterprise that looked harmlessly domestic, although this “miniature Eden” also provided her with an excuse for lecturing obese America about healthy eating.

So, while many modern women are obviously attracted by the Lean-in mantra, does the massive popularity of Michelle Obama’s  — whose Secret Service codename was Renaissance —  signal a renaissance for the traditional housewife? A role that may hold more appeal for many women than the feminists would have us believe?

Monday Reads

  • The Mueller Report delivers the death blow to the reputation of American MSM news media, argues Matt Taibi (who is not known as a partisan of Trumpland):
    • There was never real gray area here. Either Trump is a compromised foreign agent, or he isn’t. If he isn’t, news outlets once again swallowed a massive disinformation campaign, only this error is many orders of magnitude more stupid than any in the recent past, WMD included.

    • We’re at that next devolution: first and wrong. The Russiagate era has so degraded journalism that even once “reputable” outlets are now only about as right as politicians, which is to say barely ever, and then only by accident.

    • As a purely journalistic failure, however, WMD was a pimple compared to Russiagate. The sheer scale of the errors and exaggerations this time around dwarfs the last mess. Worse, it’s led to most journalists accepting a radical change in mission. We’ve become sides-choosers, obliterating the concept of the press as an independent institution whose primary role is sorting fact and fiction.

  • What Donald Trump’s epic cheating on the golf course reveals about the man: “This is a man who famously drives his golf cart on greens. There is video of him doing it at Trump Bedminster. In golf, that’s the unholiest-of-unholies. Driving your cart on the green is like hanging your laundry in the Sistine Chapel.” Extract from Commander in Cheat: How Golf Explains Trump by Rick Reilly.
  • Ed Luce on the God that failed the Democrats: “Liberals, on the other hand, are like a child who has discovered Santa Claus does not exist. Enormous faith was invested in Mr Mueller’s report as a magic bullet to solve the Trump problem. By the same token, an outsized role was conferred on Vladimir Putin as the evil genius who robbed Hillary Clinton of the presidency.”
  • Yanis Varoufakis on stagnant capitalism – he may be correct that capitalism has stagnated, but his alternative sounds more vague than convincing: “But capitalism has only one natural tendency: stagnation. Like all tendencies, it is possible to overcome by means of stimuli. One is exuberant financialization, which produces tremendous medium-term growth at the expense of long-term heartache. The other is the more sustainable tonic injected and managed by a surplus-recycling political mechanism, such as during the WWII-era economy or its postwar extension, the Bretton Woods system. But at a time when politics is as broken as financialization, the world has never needed a post-capitalist vision more. Perhaps the greatest contribution of the automation that currently adds to our stagnation woes will be to inspire such a vision.”

The Name of this Blog

I first encountered Umberto Eco’s idea of the Antilibrary when reading Nassim Nicholas Taleb’s The Black Swan in high school in 2007. The idea made immediate sense to me, as I presume it would to anyone having experienced the overwhelming feeling of seeing your collection of books piling up faster than you are able to read them.

Maria Popova writes on why unread books are more important than read books here (which does in fact seem to be largely lifted from this post in Farnam Street), and quoting from The Black Swan:

The writer Umberto Eco belongs to that small class of scholars who are encyclopedic, insightful, and nondull. He is the owner of a large personal library (containing thirty thousand books), and separates visitors into two categories: those who react with “Wow! Signore professore dottore Eco, what a library you have! How many of these books have you read?” and the others — a very small minority — who get the point that a private library is not an ego-boosting appendage but a research tool. Read books are far less valuable than unread ones. The library should contain as much of what you do not know as your financial means, mortgage rates, and the currently tight real-estate market allows you to put there. You will accumulate more knowledge and more books as you grow older, and the growing number of unread books on the shelves will look at you menacingly. Indeed, the more you know, the larger the rows of unread books. Let us call this collection of unread books an antilibrary.

Seen this way the piles of unread books stop being a source of bad conscience and becomes (hopefully) a source for intellectual humility.

The narrow-minded may still ask what is the point of accumulating loads of unread books, more than you will ever have the chance to read? Well, like the arched ceilings of an awe-inspiring cathedral makes man feel small in the company of God, the piles of unread books remind you how little you know. Rather than an ego-boosting appendage the value of a library is on the contrary as a tool to check your ego and counter your hubris. To be what Taleb labels an Antischolar – a skeptical empiricist.

Or, in Donald Rumsfeld’s phraseology, a library of unread books may not add to your known knowns, but at the very least it can perhaps turn some of your unknown unknowns into known unknowns – which in itself can be enough to reduce the risk of screw-ups by orders of magnitude.

It is (often) the unknown unknowns – the black swans – that kill us. If only Rumsfeld had applied his own methodology more carefully in planning for the war in Iraq – where the known known (WMDs) turned out to be false, whereas it was the unknown unknowns (e.g. the failure to foresee the rise of anti-American sectarian violence or the creation of ISIS) that cluster****ed the mission.

So back to the name of this blog. It was not before a decade after first learning of the antilibrary that I started delving deeper into Eco’s oeuvre – my interest triggered (sadly) by his death. I read dozens of his obituaries and old interviews from the archives, and ordered several of his books and collections of essays.

I first read his most famous work, The Name of the Rose, (or should it be The Name of Rome), which plot is of course centred around a library, (wittily inspired, as always with Eco, by Jorge Luis Borges’ paradoxical Library of Babel). But despite Aristotle’s book on Comedy the library in The Name of the Rose is a dark place, where knowledge is guarded from antischolars by secretive, possessive munks precisely the opposite of an antilibrary – but not unlike modern universities where students are given a set of books containing The Truth and are not encouraged to read much else, just as in medieval monasteries.

I liked the idea of the antilibrary so much that I went for it for this blog, which was originally intended mainly for book reviews. I first registered it under the Norwegian name Antibiblioteket, and wrote the initial reviews in Norwegian. Since I have later emigrated, (my simplest way of shorting that country’s future) I have added the English domain Antilibrary, and will henceforth probably write more in English than in Norwegian. Although I intend to write here about books I will be reading, the blog will not be confined to book reviews, but will attack a wider array of issues in the spirit of an antischolar.

 

 

Morally Reprehensible / Factually Correct

Scientists should not ask questions that may have uncomfortable answers.

Peter Conradi in The Sunday Times interviewing Alessandro Strumia, the Italian professor of theoretical physics who was fired by CERN, sanctioned by (his employer) the University of Pisa and publicly shamed in a letter signed by 3.000 physicists after giving a lecture dismissing claims that female physicists face gender discrimination.

Strumia’s crime: trawling through databases showing that papers by female physicists receive citations than men, and that women write fewer papers than men as their careers progress. Strumia also argued that the underrepresentation of women physicists (making up 20% of experimental and 12% of theoretical physicists) reflects: “sound scientific evidence of gender differences in interests”. And: “It is not as if they send limousines for boys wanting to study physics and build walls to keep out women”. 

But Strumia’s slides including blasphemous titles such as “Physics was invented and built by men” was obviously too much for the scientifically open-minded audience at CERN.

Much better to bully Strumia to silence than confront the debate lurking beneath the surface: the “greater male variability hypothesis” – that claimed the head of then Harvard president Larry Summers in 2006.

Why did Strumia risk his career? Because he is disappointed in CERN’s failure to follow up the 2012 Higgs boson/God particel discovery with other breakthroughs. “If CERN had made more big discoveries in physics, I would have remained silent,,” Surely the 3.000 signatories of the shame letter to Strumia must be having their scientific priorities straight.

 

 

Saturday Reads

  • Richard Spencer reviewing the Sana’a, Yemen-based Tim Mackintosh-Smith’s Arabs — A 3,000-Year History of Peoples, Tribes and Empires in The Times (of London): “The word ‘politics’ derives from the Greek ‘polis’, a city, and represents a collective endeavour; siyasah, the standard Arabic translation, derives from a term for the training of camels and horses.”
  • “The glum philosopher star of Danish noir” — James Marriot reviewing Clare Carlisle’s new Søren Kierkegaard biography in The Times (of London).
  • The FT on Big Tech waking up to the market potential of video games and Google’s launch of its cloud gaming platform, Stadia, while Reed Hatings worries about Netflix being disrupted by Fortnite. Does the race to be the “Netflix for gaming” mean the death of the console is finally coming?
  • Solvitur ambulando — always golden nuggets to be found in the FT readers’ letters.
  • Tim Harford on the suicide of economist / happiness expert Alan Krueger. The Economist on Krueger’s research debunking the “myth” that increases in the minimum wage must necessarily lead to lower employment.
  • Wolfgang Schäuble lunching with the FT, reflecting on the assassination attempt he barely survived as Interior Minister a few days after reunification in 1990: “there’s a bang and everything changes” — implicitly drawing a chilling parallel to the 2015 decision to open Germany’s borders; “We failed to prevent [“Wir schaffen das”] being misunderstood throughout the world as a great business opportunity for human traffickers.” 
  • Semi-woke(?) science commentator Anjana Ahuja (is this a trend with the FT’s external reviewers?) not fully convinced by short new book on the Four Horsemen of New Atheism, summarising the quartet’s one and only meeting at Hitchens’ Washington apartment in 2007.
  • Jordan Peterson responding to Cambridge’s rescindment of Visiting Fellowship offer. Cambridge dropout Toby Young in The Spectator on the same.
  • Excerpt from Matt Taibi’s new book Hate Inc. on how most MSM commentators bought and promoted the Iraqi WMD narrative and has since “piled myths atop myths” to evade any responsibility for “selling the lie”.  Perhaps Taibi is a bit on the conspiratorial side, but it is certainly interesting how many of the journos who were so wrong on Iraq, from Tom Friedman and Max Boot to David Frum and Robert Kagan are still considered foreign policy Experts.
  • Buttonwood on the irrelevance of book value.

Globalism and Over-Touristification in Barcelona — the case for a steep Tourist Tax!

Tourists, street vendors and rickshaw cabs are destroying Barcelona, and it is really time for them to go home.

Screenshot 2019-03-22 11.11.09.pngLast weekend I visited Barcelona for the first time in close to a decade. While the combination of big city and beach remains irresistible (and not matched by many other places, at least not in Europe), the city is becoming seriously overcrowded by tourists and risks collapsing under the weight of its own success, (if it can be called a success).

8,9m tourists stayed in Barcelona hotels in 2018, up 7m from 1990, and that is not even counting the multitudes lodging with AirBnB — in licensed as well as unlicensed accomodation (which the city government has instituted a crackdown on). According to The Daily Telegraph 32m tourists visited the city in 2016, the discrepancy explained by the fact that 23m were day-trippers.

One can see in the news that the locals have clearly had enough, with stories of attacks on tourist buses, hotels and graffiti – such as one on the ground before the Sagrada Familia: “TOURIST GO HOME!”

On the Monday, after rebooking to an evening flight, I had a pleasant and calm promenade. But during the weekend the streets are so overcrowded one can hardly navigate the narrow paths between all the fake goods of the street vendors, without being mowed down by one of the many rickshaw cabs or electric scooters terrorising pedestrian areas.

Barcelona’s problems are caused by its popularity. But the situation has reached breaking point. The city council must surely be asking if it’s worth allowing hordes of pot-smoking hipsters, surprising numbers of Goth people and endless armies of overweight Ryanair and cruise ship tourists filling up the city’s streets and beaches like a blob of stranded walruses?

The average foreign tourist spends around €1.100 per stay in Barcelona, corresponding to approx. €185 per day according to the Spain’s statistics office INE, (NB these numbers wary wildly from different sources). Tourism is clearly an important revenue source for the city, but is all of it worth it? A significant share of the portion must go straight to the pockets of the illegal street vendors hawking fake Gucci and Louis Vuitton bags, Nike sneakers, jewellery and sunglasses. (Otherwise they wouldn’t have been there. Where most of the street vendors in Spain previously have been Senegalese, many of those in Barcelona now seem to come from countries such as India or Bangladesh). And even more of the tourists’ money must obviously go to the global monoculture McDonald’s’ and Starbucks’, Nike stores and H&Ms that have crowded out local cafeterias and lifestyle from the city centre, as in so many other charmless cities.

Barcelona could probably reduce tourist traffic drastically — perhaps by as much as half — without losing that much tourism revenue. And visiting the city would then be an altogether more pleasant experience.

The Catalan government implemented a tourist tax in 2012. But the maximum rate is only €2,25 per day. In 2015 the tax raised €23m for the city of Barcelona – a meaningful amount but less than €1 per visitor (counting in the day-trippers).

The case can easily be made for a significantly steeper tourist tax. Enjoying the cultural treasures of a city like Barcelona is not a human right, if you are not willing to pay for the privilege. One-day-visiting cruise passengers are especially parasitic and should be forced to fork out much more than the €2,25 rate they are currently paying.

How high should the tourist tax go? Based on the anecdotal evidence gathered on my recent trip it should be high. A round €100 does not necessarily sound unreasonable at first blush. Or even higher? That would be radical and to some degree undemocratic. But something must surely be done to prevent great cities like Barcelona from dying the death of over-touristified monoculture “shitholes”.

 

Why do we get the wrong politicians?

As the Brexit saga approaches its chaotic climax, a new book seeks to answer what is wrong in Westminster.

Screenshot 2019-03-21 17.58.06.png

The fact that Westminster Palace is falling apart and infested by mice, is perhaps a descriptive analogy for British politics as a whole. In the aftermath of the parliamentary expenses scandal – which revealed use of taxpayer money for private renovation projects – MPs have been too scared to allocate the necessary money to prevent bricks from falling from the ceiling and walls of Westminster, despite the fact that the palace is on the UNESCO World Heritage List as well as the very symbol of parliamentary democracy.

In her new book Why We Get the Wrong Politicians, Spectator journalist and BBC Radio 4 hostess Isabel Hardman tries to answer precisely that question. It is a timely question. With Brexit negotiations fast approaching a dramatic climax, the Tories are led by an embattled prime minister who barely survived a confidence vote in her own party and who does not really want to leave the European Union, while Labour is led by an old Communist activist who really does want Britain out of the “neo-liberal” EU. With only days left until Britain’s exit from the union will automatically be triggered by law on the 29th of March if an alternative route cannot be agreed upon, and neither the government or the opposition seem to have any clear idea of the way forward. It is safe to say British democracy ha not been experiencing its finest hour lately.

Politicians are NOT out of touch with ordinary people

So, who are these politicians making such an unholy mess of things? David Cameron answers Hardman that he does believe people who enter politics are reasonably normal, but that they are the sort of people who are prone to become completely absorbed in the political bubble. Hardman illustrates with a story from an event for military officers that she attended where also some MPs where present. The contrast between the two classes was striking: the bulky but polite military men who seemed comfortable in their own skins, versus the arrogant, less healthy-looking politicians who wore their uncertainty on their sleeves. Still, Hardman is relatively sympathetic to the men and women who voluntarily enter politics to “make a difference” in Parliament.

Hardman does not buy into the oft-repeated argument that politicians are out of touch with ordinary people. On the contrary, since the 1960s there has been a sharp increase in the amount of time MPs spend on work in their local constituencies, including surgeries (series of one-to-one meetings) with voters seeking help for everything between heaven and earth. In fact, constituency work takes up so much of MPs’ time (and mental bandwidth) that they have almost become glorified social workers.

Rather they have become glorified social workers

Contrary to popular belief, most MPs have far greater insights into the wide range of issues common people face in their encounters with different branches of the bureaucracy than most common people themselves, Hardman writes. By way of comparison: In Churchill’s day MPs could sit a lifetime in parliament and only make occasional guest appearances in the constituency they represented. The flip side of the medal is that all the time spent on constituency work leaves parliamentarians with less time and does not necessarily make them better equipped for the work they are originally supposed to do: namely, to legislate.

Lawmakers unable to make laws

The Tory MP James Gray created controversy in 2015 when he linked constituency work to the failure of politicians to properly do their job in parliament, and thereby giving the government of the day carte blanche to ram their agenda through parliament without being subjected to sufficiently rigorous scrutiny: “The complexity of government is certainly no less today than it has ever been. Legislation has in fact vastly increased in numbers in recent years, and vastly decreased in quality. Why? Because we are failing to scrutinise it properly in Parliament. Because we don’t have enough time to do so.” This is not a party political or ideological problem. It’s much worse than that, it is a systemic problem. Both the Tories and Labour have proved that they are no longer able to write laws that end up having their intended effect – Theresa May’s Brexit-in-name-only bill just being the latest case in point. Similarly, if a Prime Minister Jeremy Corbyn should proceed with his plans to re-nationalise the railroads, there is a fair chance Parliament would fail to write laws to bring such a policy into effect. A perhaps more likely outcome would be ending up at a hodgepodge halfway station combining the worst of private and public railroads.

One horror story is the Health and Social Care Act of 2012, considered by many as the Cameron government’s biggest blunder – at least before Brexit. The aim of the law was to decentralise the National Health Service and “make the changes needed”. Neither Cameron nor then Chancellor of the Exchequer George Osborne understood what those apparently much needed changes were, because they had given full responsibility for the design of the law to the allegedly brilliant Minister of Health, Andrew Lansley. However, Lansley’s genius turned out to be more theoretical than practical. In the end, apart from £3 billions of taxpayers’ money down the drain, Lansley’s resignation and mayhem in the NHS, the law achieved nothing and least of all its purported goal of decentralising public healthcare.

Cameron the Clown  

After the street riots in 2011, David Cameron promised to do “whatever it takes” to “turning around the lives” of 120,000 troubled families who cost taxpayers nine billion pounds a year and were considered to be the source of the societal problems that Cameron promised to speak “clearly, frankly and truthfully” about but which he obviously had no deeper understanding of. His “solution” was very much “whatever”; namely to throw £ 448 million out of the window and hoping something would improve, somehow. When the evaluation report for the program was leaked, it became clear, frank and truthful that the effect was near zero.

In the long line of parliamentary failures, The Cameron government’s military intervention in Libya deserves a prominent place, for not learning a single lesson and repeating all of the same errors from the Blair government’s war in Iraq eight years prior. In 2016 Cameron and Blair were duly reprimanded in reports from the Foreign Affairs Committee and the Chilcot Committee respectively. The Foreign Affairs Committee laid full responsibility on Cameron for failing to formulate a coherent Libya strategy, but also criticised Parliament for failing in its job as an effective counterbalance to the government. Parliament had failed to question Cameron’s analyses and strategies (to the extent that any analyses and strategies existed at all), just as they failed to in the lead-up to Iraq in 2003. Cameron – despite having launched himself as a future elder statesman in Parliament before Brexit sent him headlong out of politics – refused to testify to the committee. MP’s finally seemed to have learned a lesson when they voted down Cameron’s haphazard plans for military action in Syria in 2013.

Is Parliament too weak?

Hardman thinks one of the main problems in Westminster is that a culture of “yes-men” has evolved, allowing the executive to bomb Middle Eastern countries back to the stone age almost without any critical being asked in Parliament. Hardman argues that this is because the career incentives for MPs are biased towards getting a role in government, rather than doing their original job as lawmakers, giving rise to a culture where most MPs slavishly follow the party whips. Otherwise, their career prospects are limited to backbench irrelevance.

Hardman believes one solution would be to strengthen the select committees in Parliament. If becoming a select committee leader could be a career path with some of the same status and prestige as being a secretary of state or minister, the incentives would not be so heavily skewed in favour of the executive to the detriment of the legislature. Some steps in this direction have been taken, such as rewarding select committee leaders with £15.000 in extra remuneration on top of the MP base salary of 74.000 pounds. The Libya report is one example showing how important the work of the select committees can be for providing effective checks and balances and upholding the separation of power principle central to parliamentary democracy.

Hardman does not believe – with a glance at the United States – that the answer to Britain’s parliamentary tangle is a full separation of legislative and executive power, as some advocate. But as the House of Commons’ controversial Speaker, John Bercow, she is supportive of strengthening Parliament vis-à-vis the executive. Bercow made a controversial manoeuvre in this direction in January when he defied precedent and his own legal advisers by allowing Parliament to vote through an amendment to the government’s business motion – forcing Theresa May to come back with a Plan B within three days after her Brexit deal was defeated in the Commons. But would a stronger Parliament really solve matters? The Brexit saga has shown a Parliament no more fit to govern than the government. The Daily Mail has denounced Parliament as the “House of Fools”, an opinion roundly shared by the British public. In a piece in the FT last weekend political correspondent Henry Mance describes the state of British politics as one where: “the government is too weak to govern, parliament too timid and too disorganised to assume the role. It’s the stoppable force versus the moveable object. It’s that scene in The Italian Job, where the bus hangs on a precipice, rocking gently forwards or backwards.” Contrary to Bercow and Harding he concludes that: “What the UK needs most of all now is not a stronger parliament. It is a half-decent government.

Lords or Commoners

One anachronistic group which escapes relatively unscathed from Hardman’s book is the House of Lords, the British Parliament’s unelected upper chamber consisting of an unholy mix of ancient aristocrats and bishops along with modern experts and knighted party hacks. Labour MP Wes Streeting was elected in 2015 as a strong supporter of reforming the Lords to an upper house with elected representatives, as in the Commons. But after experiencing the workings of Westminster for a couple of years he  has defied his democratic convictions and acknowledged that: “The Lords are much better for scrutiny than the Commons”. Those who want to throw all the remains of the old class system on scrapheap of history (Corbyn for one) should therefore be careful what they wish for – even though archconservatives such as Jacob Rees-Mogg has been as critical of the Lords (and their handling of Brexit) as progressives like Streeting have been of the Commons.

Another point of appeal Hardman has against Westminster is that becoming an MP is expensive. Her survey of 532 candidates who ran for Parliament in 2015, shows that the candidates had to spend on average 11,118 pounds from their own pocket to fund the election campaign. Hardman believes this contributes greatly to the fact that Westminster politicians are not representative of the population as a whole but are heavily over-represented by middle-aged white men with private school and Oxbridge backgrounds, who have either grown up with old money or earned new money before embarking on a political career. Furthermore, the parties’ candidate selection process is strongly biased in favour of candidates who are already inside the Westminster bubble.

Hardman is convinced that British politics would be better served with more women in Parliament (the share of female MPs has indeed risen to 32 percent), along with more MPs from more resource-poor and diverse backgrounds – without fully or convincingly explaining why that would necessarily make things better. This half-baked progressivist conclusion also goes a bit against her own perception that the unelected Lords work better than the elected Commons.

How much of Hardman’s diagnosis of British democracy is transferable to other countries? To paraphrase Tolstoy: Well-functioning democracies are all alike; every dysfunctional democracy is dysfunctional in its own way. Reading Hardman’s book gives a solemn reminder that Westminster is the place where liberal democracy was born, but also where it has grown old and tired.

 

Adapted from version first published in Norwegian daily Klassekampen on January 16th.

Is Harvard Studio 54? And Can America still make Airplanes?

Peter Thiel was speaking on American Democracy and economic stagnation at Harvard the other day, building on the themes he has lambasted for years. Thiel’s perspectives are as always lucid and contrarian and worth listening to:

  • The techno-optimists are wrong, the economy is in secular stagnation. The Kurzweilian “Google propaganda” of runaway progress towards Singularity is false. Progress is much slower today than 50 or 100 years ago.
  • Secular stagnation is primarily a supply-side problem, not a demand-side problem (as other stagnationists such as Larry Summers believe).
  • And the reason for that is CULTURAL not natural. Scientific breakthroughs are still possible, scientists are just too lazy, (Thiel thinks Western culture effectively was killed around the time of Woodstock in 1969).
  • Economic stagnation is a much bigger problem than economic equality – growth of 3-4+% would solve all/most problems.
  • The Big STEM lie: Outside computer science (and perhaps petroleum engineering) there are no well-paying science jobs, for PhDs physics, chemistry etc. Because not much new is happening in the world of atoms. People could just as well study the humanities, where at least there is no expectation of getting a well-paying job after graduation.
  • Women are not starting companies even if there are no societal barriers preventing them from doing so, (not what the feminists want to hear).
  • Society has given up on complex projects.
  • Startups only focus on really easy and trivial consumer internet apps. No willingness to take real risks and solve big complex challenges.
  • Has modern aircraft become to complex (as Donald Trump hinted at the 737 MAX 8), or is America simply not able to produce airplanes any more?
  • Communism with 5-year plans is better than Communism without 5-year plans (but still bad).
  • It is not a problem getting jobs in today’s economy, with unemployment at record lows at ~3,5%, but jobs are badly paid.
  • On average Americans are fine, but Americans are not average. The average house price in America is only 250k dollars. But that is as irrelevant as knowing the river you will have to cross is on average 4 feet deep. Americans are not average types existing in cyberspace. They either live in dysfunctional high-cost mega cities, with decent-paying jobs but still struggling to survive and having to endure dysfunctional 20th century public infrastructure. Or they live in flyover country where society stopped decades ago, where housing is cheap but wages even lower.
  • The US should be more decentralised, not concentrating “all” economic activity in 3-4 metropolises. The UK and France even more screwed with only one mega city each.
  • Should the US do like Brazil or Burma and “drain the swamp” by moving the capital city from Washington D.C?
  • Silicon Valley fast approaching breaking point. Real estate too expensive and public infrastructure bottlenecked, pushing people and companies to secondary cities. Next Google, Facebook likely to come from outside Silicon Valley.
  • Universities today are as corrupt as the Catholic Church in the 16th century. Harvard is basically an exclusive Studio 54 nightclub. Popularity of the institution only upheld by severly limiting access. The value of a Harvard education is not in its intellectual content (almost all of which are freely available online, or much cheaper at non-elite schools) but in the diploma/indulgence letter promising the holder a ‘fast-track’ to heaven, while those who don’t pay up will end up in a bad place.
  • Thiel considered launching a new university but concluded that all US universities established after 1900 had been failures. On the other hand old universities seem able to retain their stature, irrespective of the quality of their academic offering.
  • Even though the audio is bad most of the [Harvard] audience questions sound to be coming at Thiel from very woke angles, with more concern for social justice than economic stagnation, making one wonder for how much longer Ivy League diplomas can retain their illusional value?