This Year’s Best Bits: Seven 2020 Reads:

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Dear Friends-

Here is the 15th annual Year’s Best Bits. Although 2020 was a year of all-caps NEWS, I have tried to avoid more ephemeral content.

As usual, I close with some new discoveries and sources that I hope will add nutrition to your information diet.

Happy and healthy holidays,

Tom

1. Aeon: Concentrate!

Why read: Over the last few years I’ve come to believe judicious use of attention is at the root of meaningful human experience. It’s our most valuable resource, and now one of the most threatened. This is a wonderful article by a chess grandmaster about the power of concentration in life and decision-making. It’s a critical skill in an increasingly complex world.

• Unless we can learn to concentrate better, we have no chance of perceiving, thinking, talking and deciding in the ways required of us in the 21st century. There is no hope for us if we start from a vantage point that sees each problem as a discrete issue, ciphered off into an expert silo to be analysed by a distinct discipline. Albert Einstein was right when he said that we cannot solve our problems with the same thinking that caused them — but, in the world as we find it, genuinely new thinking calls for a reappraisal of concentration.

2. Media guru Matthew Ball’s most popular article of 2020: 7 Reasons Why Video Gaming Will Take Over.

Why read: The attention economy is the biggest trend in megacap tech & therefore markets. Video games are perpetually at the vanguard. As a companion read, Ball’s article on the Metaverse discusses perhaps the defining tech evolution of the next decade: The Third Platform.

• The most popular video site in the world is YouTube — and it’s most watched content is recorded video game clips.
• ‘Americans spend six to seven hours a day on “media-related” leisure after de-duplication [i.e. not double counting listening to music while drawing, playing mobile games while watching TV, etc.]. This represents 2.1B hours of US media time per day. Roughly 75% of this time is controlled by TV and half of this time comes from those 50+. Seniors alone represent 15% of the population but close to a third of TV time. This dynamic means that not only is the share of Americans who game growing, but many gamers are aging into life stages where their media diets increase overall.’
• ‘Pokémon has now generated more revenue than any other franchise, including Marvel, Star Wars and Mickey Mouse, and amassed more than 1,000 consecutive episodes of television and more than two dozen films.’ (GTA V is now the highest-grossing entertainment product ever).

3. Noema: China’s Radical New Vision Of Globalization.

Why read: This was one of internet-cheat-code The Browser’s 2020 recommendations. The article introduced me to the ‘deeply pessimistic’ Chinese strategy of dual circulation.

• ‘The idea splits the world into two systems. First comes external circulation, meaning China’s global trade, but also the way it invites foreigners into its domestic economy. This was the focus of Xi’s Davos remarks and the approach that powered his country’s decades of rapid growth, transforming China into an exporting powerhouse. The second component is then internal circulation, meaning domestic demand from Chinese consumers, but also domestic supply chains and “made in China” technologies.
• Taiwan re-emerging as a potential geopolitical risk to watch: ‘Officially, China aims to reunify with Taiwan by 2049. But Beijing has toughened its language of late, removing talk of “peaceful reunification” from government documents. Many analysts think Xi plans to force the issue sooner rather than later, in pursuit of a long-term national objective that could cement his legacy as a truly great national leader.’

4. The Markets: Central Banks Have Become Irrelevant.

Why read: Scottish market strategist Russell Napier has made an interesting point. After more than two decades of calling for deflation, he has now shifted to anticipating inflation. The reasoning is more interesting than the forecast; control of the money supply has moved from central banks to governments. Politicians can create broad money through the banking system, and they have control of the ‘magic money tree’.

• We know debt will have to go down. For a politician, inflation is the cheapest way out of this mess. They have found a way to gain control of the money supply and to create inflation. Remember, a credit guarantee is not fiscal spending, it’s not on the balance sheet of the state, as it’s only a contingent liability. So if you are an elected politician, you have found a cheap way of funding an economic recovery and then green projects. Politically, this is incredibly powerful.

5. Alex Williams: Balanced Sheets.

Why read: Great explanation of the sometimes counterintuitive link between global trade and inequality as described in Michael Pettis & Matthew Klein’s book Trade Wars Are Class Wars.

• ‘The book argues that elites in all countries want to capture economic output while developing the capital stock of their economies. To do this, they invest massively, which mechanically creates savings. Rather than sharing those savings with the household sector in the form of wage increases, the elites hoard and move them offshore. This destroys local demand for the goods produced by their capital investments. At this point, they turn to the export market to make up for the missing local sales. The problem is that, to be competitive exporters, they have to produce tradeable goods at a lower unit cost than their competitors.
• Capitalists must then further suppress domestic wages to ensure those lower unit costs, and thus increase their dependency on export markets. The problem is, not every country — or bloc, in the case of the Eurozone — can be a net exporter. This spells trouble, if every country’s capitalists are dependent on the export markets to validate their investments. Absent a country willing to import everyone else’s surplus, this kind of arrangement would set the capitalists of all countries against one another before falling apart. It’s at this point, however, that the US steps in to backstop the global order as a hegemonic debtor, allowing nearly every other country to be a net exporter.’

6. Morgan Housel: 100 Little Ideas.

Why read: Honestly I could pick any of his articles. His book Psychology of Money was also one of the best reads of the year. He specialises in awareness-building non-ephemeral content. This was a great summary of 100 key concepts and ideas.

7. The Pull Request: Prophet of the Revolt (thanks to AB for the flag).

Why read: Transcript of a compelling email interview with former CIA analyst Martin Gurri. Gurri was well ahead of the mainstream in seeing the impact of the information tsunami on the fabric of society.

• The story-tellers — public officials, the media, scientists: the elites — live in an entirely different information universe from the rest of us. They behave as if we were still in the 20th century, and information is still their monopoly, which they dispense as they see fit and which we will accept on authority. They pretend that they alone have escaped Plato’s cave: they know. So their stories strike a mathematical pose, and seek to explain, from on high, how they will apply their expertise to “solve” political, social, or health “problems.”
• In fact, the public, which swims comfortably in the digital sea, knows far more than elites trapped in obsolete structures. The public knows when the elites fail to deliver their promised “solutions,” when they tell falsehoods or misspeak, when they are caught in sexual escapades, and when they indulge in astonishing levels of smugness and hypocrisy. The public is disenchanted in the elites and their institutions, much in the way science disenchanted the world of fairies and goblins. The natural reaction is cynicism. The elites aren’t seen as fallible humans doing their best but as corrupt and arrogant jerks. The public, I said, is mired in negation.
• So when you ask whether today’s protests will ever lead to anything, the answer is probably not. They have little positive content. My concern is that they might lead to nothing — to a politics of righteous annihilation and a society lobotomized of all memory. The lust for destruction, rather than fascism or some “successor ideology,” looms as the great threat to democracy today.
• In a fractured age, moving authority to the lowest possible level will be not just sensible but necessary. I wrote somewhere that the future of democracy may be Switzerland. In that country, for example, an immigrant doesn’t apply to the central government for citizenship — he must apply to the little valley in which he lives. Whatever the decision, nobody can say afterwards that it was determined by the political correctness of bureaucrats or the racism of the public. It’s direct democracy at work. The people who decide know who you are.

Fun Finds of 2020:

Colossus. I just can’t believe this is free. O’Shaughnessy Asset Management’s podcast Invest Like the Best has done something like 2 interviews a week for the last 4 years. Their guests have been some of the world’s most interesting business, tech and finance people around. They have now archived the entire catalogue with audio links and transcripts. I am going to be digging into this one for years.

Macro Ops. A wonderful collection of articles on trading greats and conceptual investing approaches. As with Colossus, I simply cannot understand how most of this content is free.

Rebel Wisdom. A defiantly non-mainstream podcast source that focuses on cultural meta-debates. Often variable in quality, but almost always provocative. We all need to broaden our information diet, and this is a stimulating way to do it.

Brain Pickings. I didn’t discover this site in 2020, but this was the year I really started to read it regularly. Maria Popova may be one of the most remarkable people alive! She has indexed all the greatest thoughts and thinkers and cross-referenced them to all the other relevant thinkers. It’s bonkers.

Slow.co. A 2020 palate cleanser. I’ve become more spiritually inclined in my middle years and this is a wonderful resource. Founder Kyle Kowalski summarises ‘big idea’ books really succinctly. He’s a great Twitter follow too.

Podcast of the year: Stuck inside without a commute I didn’t listen to as many as in previous years. But the clear standout was Hugh Jackman with Tim Ferriss. Wholesome, holistic and heartwarming. Rory Sutherland on Infinite Loops was another good one (thanks to TP for the flag). Jerry Seinfeld with Ferriss appears to be the consensus choice on Twitter, and it is indeed great.

Happy and healthy 2021 to you all!