Author: VAULT45

“Nothing has served me better in my long life than continuous learning.”

Charlie Munger, speaking at USC Law School Commencement in 2007:

Wisdom acquisition is a moral duty. It’s not something you do just to advance in life. As a corollary to that proposition which is very important, it means that you are hooked for lifetime learning. And without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know. You’re going to advance in life by what you learn after you leave here.

I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.

Nothing has served me better in my long life than continuous learning.

Notes: How the World Really Works: The Science Behind How We Got Here and Where We’re Going

Notes from How the World Really Works: The Science Behind How We Got Here and Where We’re Going (2022) by Vaclav Smil:

* Since the year 2007, more than half of humanity has lived in cities (more than 80 percent in all affluent countries), and unlike in the industrializing cities of the 19th and early 20th centuries, jobs in modern urban areas are largely in services. Most modern urbanites are thus disconnected not only from the ways we produce our food but also from the ways we build our machines and devices, and the growing mechanization of all productive activity means that only a very small share of the global population now engages in delivering civilization’s energy and the materials that comprise our modern world.

* The proverbial best minds do not go into soil science and do not try their hand at making better cement; instead they are attracted to dealing with disembodied information, now just streams of electrons in myriads of microdevices. From lawyers and economists to code writers and money managers, their disproportionately high rewards are for work completely removed from the material realities of life on earth.

* The real wrench in the works: we are a fossil-fueled civilization whose technical and scientific advances, quality of life, and prosperity rest on the combustion of huge quantities of fossil carbon, and we cannot simply walk away from this critical determinant of our fortunes in a few decades, never mind years. Complete decarbonization of the global economy by 2050 is now conceivable only at the cost of unthinkable global economic retreat, or as a result of extraordinarily rapid transformations relying on near-miraculous technical advances.

* Most recently, a poor understanding of energy has the proponents of a new green world naively calling for a near-instant shift from abominable, polluting, and finite fossil fuels to superior, green and ever-renewable solar electricity.

* Even in this era of high-tech electronic miracles, it is still impossible to store electricity affordably in quantities sufficient to meet the demand of a medium-sized city (500,000 people) for only a week or two, or to supply a megacity (more than 10 million people) for just half a day.

* If the COVID-19 pandemic brought disruption, anguish, and unavoidable deaths, those effects would be minor compared to having just a few days of a severely reduced electricity supply in any densely populated region, and if prolonged for weeks nationwide it would be a catastrophic event with unprecedented consequences.

* The fundamental energy conversion producing our food has not changed: as always, we are eating, whether directly as plant foods or indirectly as animal foodstuffs, products of photosynthesis—the biosphere’s most important energy conversion, powered by solar radiation. What has changed is the intensity of our crop, and animal, production: we could not harvest such abundance, and in such a highly predictable manner, without the still-rising inputs of fossil fuels and electricity.

* Many people nowadays admiringly quote the performance gains of modern computing (“so much data”) or telecommunication (“so much cheaper”)—but what about harvests? In two centuries, the human labor to produce a kilogram of American wheat was reduced from 10 minutes to less than two seconds.

* The quest for mass-scale veganism is doomed to fail. Eating meat has been as significant a component of our evolutionary heritage as our large brains (which evolved partly because of meat eating), bipedalism, and symbolic language. All our hominin ancestors were omnivorous, as are both species of chimpanzees (Pan troglodytes and Pan paniscus), the hominins closest to us in their genetic makeup; they supplement their plant diet by hunting (and sharing) small monkeys, wild pigs, and tortoises. Full expression of human growth potential on a population basis can take place only when diets in childhood and adolescence contain sufficient quantities of animal protein, first in milk and later in other dairy products, eggs, and meat: rising post-1950 body heights in Japan, South Korea, and China, as a result of increased intake of animal products, are unmistakable testimonies to this reality.

“Inherited wealth is a real handicap to happiness.”

William K. Vanderbilt, quoted in Fortune’s Children: The Fall of the House of Vanderbilt:

My life was never destined to be quite happy. It was laid out along lines which I could not foresee, almost from earliest childhood. It has left me with nothing to hope for, with nothing definite to seek or strive for. Inherited wealth is a real handicap to happiness. It is as certain death to ambition as cocaine is to morality.

If a man makes money, no matter how much, he finds a certain happiness in its possession, for in the desire to increase his business, he has a constant use for it. But the man who inherits it has none of this. The first satisfaction, and the greatest, that of building the foundation of a fortune, is denied him. He must labor, if he does labor, simply to add to an oversufficiency.

“Public health is no longer viewed as a collective endeavor based on the principle of social solidarity and mutual obligation.”

Anita Sreedhar and Anand Gopal:

Over the past four decades, governments have slashed budgets and privatized basic services. This has two important consequences for public health. First, people are unlikely to trust institutions that do little for them. And second, public health is no longer viewed as a collective endeavor, based on the principle of social solidarity and mutual obligation. People are conditioned to believe they’re on their own and responsible only for themselves. That means an important source of vaccine hesitancy is the erosion of the idea of a common good.

Americans began thinking about health care decisions this way only recently; during the 1950s polio campaigns, for example, most people saw vaccination as a civic duty. But as the public purse shrunk in the 1980s, politicians insisted that it’s no longer the government’s job to ensure people’s well-being; instead, Americans were to be responsible only for themselves and their own bodies. Entire industries, such as self-help and health foods, have sprung up on the principle that the key to good health lies in individuals making the right choices.

Of course, there’s a lot of good that comes from viewing health care decisions as personal choices: No one wants to be subjected to procedures against their wishes. But there are problems with reducing public health to a matter of choice. It gives the impression that individuals are wholly responsible for their own health. This is despite growing evidence that health is deeply influenced by factors outside our control; public health experts now talk about the “social determinants of health,” the idea that personal health is never simply just a reflection of individual lifestyle choices, but also the class people are born into, the neighborhood they grew up in and the race they belong to.

“Studies show that we consistently overestimate how much people think about us.”

Arthur C. Brooks:

The ironic thing about feeling bad about ourselves because of what people might think of us is that others actually have much fewer opinions about us—positive or negative—than we imagine. Studies show that we consistently overestimate how much people think about us and our failings, leading us to undue inhibition and worse quality of life. Perhaps your followers or neighbors would have a lower opinion of you if they were thinking about you—but they probably aren’t. Next time you feel self-conscious, notice that you are thinking about yourself. You can safely assume that everyone around you is doing more or less the same.

“Few things are more important in life than avoiding the wrong people.”

Shane Parrish:

Few things are more important in life than avoiding the wrong people. It’s tempting to think that we’re strong enough to avoid adopting the worst of others. But that’s not how it typically works. The changes are too gradual to notice until they are too large to address.

Over a long enough timeline, bad people eventually destroy themselves. They ignore relevant data because it doesn’t agree with them, they take unwarranted risks, they end up alone, without any friends. They might achieve external success, but they lack inner calmness and clarity.

Just as you watch what you put into your body or your mind, closely look at who you spend your time with. Are they kind? Are they honest? Are they thoughtful? Are they helping you or pulling you down? Are they reliable? Are they clear thinking? In short, are they the things you want to become? If not, don’t tempt fate, cut bate.

Distance yourself from the people you don’t want to become. Cultivate people in your life that make you better. People whose default behavior is your desired behavior. If circumstances make this difficult, choose among the eminent dead.

“Crypto represents an architectural shift in how technology works and therefore how the world works.”

Marc Andreessen:

Crypto is one of those topics that calls to mind the parable of the blind men and the elephant – there are so many aspects of how it works and what it means that you can interpret it many different ways and seize on one part or another to make whatever point you want. A lot of people, for example, seize on the money part, and either glorify it as a new kind of monetary system that liberates mankind from the nation state, or crucify it as a danger to economic stability and the ability for governments to tax. All of these are interesting arguments, but I think they all miss a more fundamental point, which is that crypto represents an architectural shift in how technology works and therefore how the world works.

That architectural shift is called distributed consensus – the ability for many untrusted participants in a network to establish consistency and trust. This is something the Internet has never had, but now it does, and I think it will take 30 years to work through all of the things we can do as a result. Money is the easiest application of this idea, but think more broadly – we can now, in theory, build Internet native contracts, loans, insurance, title to real world assets, unique digital goods (known as non-fungible tokens or NFTs), online corporate structures (such as digital autonomous organizations or DAOs), and on and on.

Consider also what this means for incentives. Up until now, collaborative human effort online either took the form of a literal adoption of real-world corporate norms – a company with a web site – or an open source project like Linux that had no money directly attached. With crypto, you can now create thousands of new kinds of incentive systems for collaborative work online, since participants in a crypto project can get paid directly without a real-world company even needing to exist. As great as open source software development has been, far more people are willing to do far more things for money than for free, and all of a sudden all those things become possible and even easy to do. Again, it will take 30 years to work through the consequences of this, but I don’t think it’s crazy that this could be a civilizational shift in how people work and get paid.

“The goal of the non-professional should not be to pick winners.”

Warren Buffett, writing in his 2013 letter to Berkshire Hathaway shareholders:

Most investors, of course, have not made the study of business prospects a priority in their lives. If wise, they will conclude that they do not know enough about specific businesses to predict their future earning power.

I have good news for these non-professionals: The typical investor doesn’t need this skill. In aggregate, American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts). In the 20th Century, the Dow Jones Industrial index advanced from 66 to 11,497, paying a rising stream of dividends to boot. The 21st Century will witness further gains, almost certain to be substantial. The goal of the non-professional should not be to pick winners – neither he nor his “helpers” can do that – but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.

That’s the “what” of investing for the non-professional. The “when” is also important. The main danger is that the timid or beginning investor will enter the market at a time of extreme exuberance and then become disillusioned when paper losses occur. (Remember the late Barton Biggs’ observation: “A bull market is like sex. It feels best just before it ends.”) The antidote to that kind of mistiming is for an investor to accumulate shares over a long period and never to sell when the news is bad and stocks are well off their highs. Following those rules, the “know-nothing” investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results. Indeed, the unsophisticated investor who is realistic about his shortcomings is likely to obtain better long-term results than the knowledgeable professional who is blind to even a single weakness.

“When we give up on truth, we concede power to those with the wealth and charisma to create spectacle in its place.”

Timothy Snyder:

Post-truth is pre-fascism, and Trump has been our post-truth president. When we give up on truth, we concede power to those with the wealth and charisma to create spectacle in its place. Without agreement about some basic facts, citizens cannot form the civil society that would allow them to defend themselves. If we lose the institutions that produce facts that are pertinent to us, then we tend to wallow in attractive abstractions and fictions. Truth defends itself particularly poorly when there is not very much of it around, and the era of Trump – like the era of Vladimir Putin in Russia – is one of the decline of local news. Social media is no substitute: It supercharges the mental habits by which we seek emotional stimulation and comfort, which means losing the distinction between what feels true and what actually is true.