Lifeboat Foundation

Dear Lifeboat Foundation Family & Friends,

A few months back, my Aunt Charlotte wrote, wondering why I — a relentless searcher focused upon human evolution and long-term human survival strategy, had chosen to pursue a PhD in economics (Banking & Finance). I recently replied that, as it turns out, sound economic theory and global financial stability both play central roles in the quest for long-term human survival. In the fifth and final chapter of my recent Masters thesis, On the Problem of Sustainable Economic Development: A Game-Theoretical Solution, I argued (with considerable passion) that much of the blame for the economic crisis of 2008 (which is, essentially still upon us) may be attributed the adoption of Keynesian economics and the dismissal of the powerful counter-arguments tabled by his great rival, F.A. von Hayek. Despite the fact that they remained friends all the way until the very end, their theories are diametrically opposed at nearly every point. There was, however, at least one central point they agreed upon — indeed, Hayek was fond of quoting one of Keynes’ most famous maxims: “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else” [1].

And, with this nontrivial problem and and the great Hayek vs. Keynes debate in mind, I’ll offer a preview-by-way-of-prelude with this invitation to turn a few pages of On the Problem of Modern Portfolio Theory: In Search of a Timeless & Universal Investment Perspective:

It is perhaps significant that Keynes hated to be addressed as “professor” (he never had that title). He was not primarily a scholar. He was a great amateur in many fields of knowledge and the arts; he had all the gifts of a great politician and a political pamphleteer; and he knew that “the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is generally understood. Indeed the world is ruled by little else” [1]. And as he had a mind capable of recasting, in the intervals of his other occupations, the body of current economic theory, he more than any of his compeers had come to affect current thought. Whether it was he who was right or wrong, only the future will show. There are some who fear that if Lenin’s statement is correct that the best way to destroy the capitalist system is to debauch the currency, of which Keynes himself has reminded us [1], it will be largely due to Keynes’s influence if this prescription is followed.…

Continue reading “On the Problem of Modern Portfolio Theory: In Search of a Timeless & Universal Investment Perspective” »

Perhaps the most important lesson, which I have learned from Mises, was a lesson located outside economics itself. What Mises taught us in his writings, in his lectures, in his seminars, and in perhaps everything he said, was that economics—yes, and I mean sound economics, Austrian economics—is primordially, crucially important. Economics is not an intellectual game. Economics is deadly serious. The very future of mankind —of civilization—depends, in Mises’ view, upon widespread understanding of, and respect for, the principles of economics.

This is a lesson, which is located almost entirely outside economics proper. But all Mises’ work depended ultimately upon this tenet. Almost invariably, a scientist is motivated by values not strictly part of the science itself. The lust for fame, for material rewards—even the pure love of truth—these goals may possibly be fulfilled by scientific success, but are themselves not identified by science as worthwhile goals. What drove Mises, what accounted for his passionate dedication, his ability to calmly ignore the sneers of, and the isolation imposed by academic contemporaries, was his conviction that the survival of mankind depends on the development and dissemination of Austrian economics…

Austrian economics is not simply a matter of intellectual problem solving, like a challenging crossword puzzle, but literally a matter of the life or death of the human race.

–Israel M. Kirzner, Society for the Development of Austrian Economics Lifetime Achievement Award Acceptance Speech, 2006

Continue reading “On the Problem of Sustainable Economic Development: A Game-Theoretical Solution” »

(NOTE: Selecting the “Switch to White” button on the upper right-hand corner of the screen may ease reading this text).

“Who are you?” A simple question sometimes requires a complex answer. When a Homeric hero is asked who he is.., his answer consists of more than just his name; he provides a list of his ancestors. The history of his family is an essential constituent of his identity. When the city of Aphrodisias… decided to honor a prominent citizen with a public funeral…, the decree in his honor identified him in the following manner:

Hermogenes, son of Hephaistion, the so-called Theodotos, one of the first and most illustrious citizens, a man who has as his ancestors men among the greatest and among those who built together the community and have lived in virtue, love of glory, many promises of benefactions, and the most beautiful deeds for the fatherland; a man who has been himself good and virtuous, a lover of the fatherland, a constructor, a benefactor of the polis, and a savior.
– Angelos Chaniotis, In Search of an Identity: European Discourses and Ancient Paradigms, 2010

I realize many may not have the time to read all of this post — let alone the treatise it introduces — so for those with just a few minutes to spare, consider abandoning the remainder of this introduction and spending a few moments with a brief narrative which distills the very essence of the problem at hand: On the Origin of Mass Extinctions: Darwin’s Nontrivial Error.

Continue reading “A (Relatively) Brief Introduction to The Principles of Economics & Evolution: A Survival Guide for the Inhabitants of Small Islands, Including the Inhabitants of the Small Island of Earth” »

Common wisdom is that great companies are built by business leaders who out-vision and out-innovate their competitors. However, the truth is that groundbreaking businesses tend to come from entrepreneurs who were smart enough to out-execute everyone else in their space – which means getting products out there and growing a loyal customer base, instead of engineering a product until it’s supposedly perfect.

Microsoft is a great example of company that has succeeded by execution. They’ve rarely been first to market with any of their products, but they’ve successfully brought them to market, figured out how to improve them, and introduce them again and again. This is the approach that puts you in the Fortune 500.

Why do entrepreneurs believe so fervently in the myth that they need to be first to market with a never-before-seen innovation? Because that’s what they’re told in business school. The problem with this piece of wisdom is that it encourages business leaders to wait until the mythical breakthrough business idea is fully formed.

This myth is fed by the public perception of groundbreaking companies as having come out of nowhere to rock the world. But companies like Facebook rarely, if ever, spring into being with no antecedents: MySpace and Friendster were in the market first, but Facebook did social networking better than anyone else had done before. Google wasn’t the first search engine ever; AltaVista probably deserves that title. But Google advanced the search experience to the point that we all believe they were the breakthrough innovator.

Continue reading “Dear Entrepreneur, Stop Dreaming and Just Launch That Business” »

How important is failure – yes, failure – to the health of a thriving, innovative business? So important that Ratan Tata, chairman of India’s largest corporation, gives an annual award to the employee who comes up with the best idea that failed. So important that Apple, the company gives us the world’s most beautifully designed music players, mobile phones, and tablets, wouldn’t be here if it hadn’t dared to fail. Remember the Apple Newton? Probably not, since it was a flop, but it was a precursor to today’s wildly successful iPad.

In a struggling economic climate, failure is what separates mediocre companies from businesses that break through and astound us with their creativity.

Yet failure has become a scenario to be avoided at all costs for most CEOs. Between fear of losing jobs to fear of rattling investors, business leaders are expected to deliver a perfect track record of product launches and expansion programs. They indirectly instill this attitude in their employees, who lack the confidence to spearhead any corporate initiative that isn’t guaranteed to work.

Call it the Tiger Mom effect: In the business world today, failure is apparently not an option.

Continue reading “Don't be a Tiger Mom CEO — Celebrate Failure” »

“Jobs for every American is doomed to failure because of modern automation and production. We ought to recognize it and create an income-maintenance system so every single American has the dignity and the wherewithal for shelter, basic food, and medical care. I’m talking about welfare for all. Without it, you’re going to have warfare for all.”

This quote from Jerry Brown in 1995 echoes earlier fears that automation would cause mass unemployment and displacement. These fears have not materialized, due to surging economic growth, the ability of the workforce to adjust, and the fact that the extent of automation is largely limited to physical, repetitive tasks. This is beginning to change.

In recent years, before the current recession, automation in already well established areas has continued to make productivity improvements. “Robotics and other computer automation have reduced the number of workers on a line. Between 2002 and 2005, the number of auto production workers decreased 8.5 percent while shipments increased 5 percent. Assembly plants now require as little as 15 to 25 labor hours per vehicle.” The result of these productivity gains has been a higher quality, less expensive product.

As machines become smarter, less repetitive “white collar” jobs will become subject to automation. Change will come so rapidly, the workforce will not be able to adjust, with real opportunities for alternative work decreasing. The earlier fears of mass unemployment will become realized. This mass displacement could lay the foundation for civil unrest and a general backlash against technology. The full extent of this change is unlikely to happen for another generation, with strong growth in China and other emerging economies. Regardless of exact timing or mechanism, the fact is that this transition to full automation has already begun, and micro economics dictate that it will continue. The choice between an inefficient, expensive, human labor force and an efficient, cheap, automated labor force is clear at the micro level, which will drive the pace of change.

Continue reading “Singularity Economics” »

Dear Ray;

I’ve written a book about the future of software. While writing it, I came to the conclusion that your dates are way off. I talk mostly about free software and Linux, but it has implications for things like how we can have driverless cars and other amazing things faster. I believe that we could have had all the benefits of the singularity years ago if we had done things like started Wikipedia in 1991 instead of 2001. There is no technology in 2001 that we didn’t have in 1991, it was simply a matter of starting an effort that allowed people to work together.

Proprietary software and a lack of cooperation among our software scientists has been terrible for the computer industry and the world, and its greater use has implications for every aspect of science. Free software is better for the free market than proprietary software, and there are many opportunities for programmers to make money using and writing free software. I often use the analogy that law libraries are filled with millions of freely available documents, and no one claims this has decreased the motivation to become a lawyer. In fact, lawyers would say that it would be impossible to do their job without all of these resources.

My book is a full description of the issues but I’ve also written some posts on this blog, and this is probably the one most relevant for you to read: https://lifeboat.com/blog/2010/06/h-conference-and-faster-singularity

Continue reading “Open Letter to Ray Kurzweil” »

It’s easy to think of people from the underdeveloped world as quite different from ourselves. After all, there’s little to convince us otherwise. National Geographic Specials, video clips on the Nightly News, photos in every major newspaper – all depicting a culture and lifestyle that’s hard for us to imagine let alone relate to. Yes – they seem very different; or perhaps not. Consider this story related to me by a friend.

Ray was a pioneer in software. He sold his company some time ago for a considerable amount of money. After this – during his quasi-retirement he got involved in coordinating medical relief missions to some of the most impoverished places on the planet, places such as Timbuktu in Africa.

The missions were simple – come to a place like Timbuktu and set up medical clinics, provide basic medicines and health care training and generally try and improve the health prospects of native peoples wherever he went.

Upon arriving in Timbuktu, Ray observed that their system of commerce was incredibly simple. Basically they had two items that were in commerce – goats and charcoal.

Continue reading “Cell Phones in Timbuktu” »

Introduction
At a fundamental level, real wealth is the ability to fulfill human needs and desires. These ephemeral motivators are responsible for the creation of money, bank ledgers, and financial instruments that drive the world—caveat the fact that the monetary system can’t buy us love (and a few other necessities). Technologies have always provided us with tools that enable us to fulfill more needs and desires for more people with less effort. The exponential nanomanufacturing capabilities of Productive Nanosystems will simply enable us to do it better. Much better.

Productive Nanosystems
The National Nanotechnology Initiative defines nanotechnology as technologies that control matter at dimensions between one and a hundred nanometers, where unique phenomena enable novel applications. For particles and structures, reducing dimensions to the nanoscale primarily affects surface area to volume ratios and surface energies. For active structures and devices, the significant design parameters become exciton distances, quantum effects, and photon interactions. Connecting many different nanodevices into complex systems will multiply their power, leading some experts to predict that a particular kind of nanosystem—Productive Nanosystems that produces atomically precise products—will dramatically change the world.

Productive Nanosystems are programmable mechanoelectrochemical systems that are expected to rearrange bulk quantities numbers of atoms with atomic precision under programmatical control. There are currently four approaches that are expected to lead to Productive Nanosystems: DNA Origami[1], Bis-Peptide Synthesis[2], Patterned Atomic Layer Epitaxy[3], and Diamondoid Mechanosynthesis[4]. The first two are biomimetic bottom-up approaches that struggle to achieve long-range order and to increase complexity despite using chaotic thermodynamic processes. The second two are scanning-probe-based top-down approaches that struggle to increase productivity to a few hundred atoms per hour while reducing error rate.[5]

For the bottom-up approaches, the tipping point will be reached when researchers build the first nanosystem complex enough to do error correction. For the top-down approaches that can do error correction fairly easily, the tipping point will be reached when subsequent generations of tip arrays no longer need to be redesigned for speed and size improvements while using control algorithms that scale well (i.e. they only need generational time, synthesized inputs, and expansion room). When these milestones are reached, nanosystems will grow exponentially—unnoticeably for a few weeks, but suddenly they will become overwhelmingly powerful. There are many significant applications foreseen for mature Productive Nanosystems, ranging from aerospace and transportation to medicine and manufacturing—but what may affect us the hardest may be those applications that we can’t foresee.

Continue reading “Productive Nanosystems and the 2009 Financial Meltdown” »