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Albert Wenger

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Monday, August 12, 2019 - 5:31pm

So far my climate crisis posts have been about declaring an actual emergency, the encouraging youth movement and joining the global climate strike on September 20th. Now I want to turn to the question of what to do.  Today’s post sets out four basic principles.

First, the “what” itself is quite simple: we have to emit dramatically fewer greenhouse gases going forward and we have to recapture a lot of our past emissions from the atmosphere. In other words, the good news is we know what we need to do. This may not strike people as all that reassuring, but compare that situation too many diseases where we don’t even have a clue as to what is causing the disease. It all rolls up neatly into clear KPIs, namely the ppm concentration of greenhouse gases in the atmosphere (measuring CO2 and methane separately).

Second, there is no one policy or technology that by itself will do the trick. There are no silver bullets here. Instead, we will have to do a lot of different things and we will have try many that people say can’t or won’t work. A lot of what we will try will in fact fail but that’s OK too. People who work with startups are familiar and comfortable with both of these ideas but bureaucrats generally are not. So if you think X can work, throw yourself at it and see what progress you can make.

Third, there are some policies that are obvious and need to be implemented quickly and that’s pricing in the externality of emissions. That can be accomplished either through a tax on carbon and methane emissions or a cap and trade scheme. There are lots of questions about details of implementation (including what to do with revenues generated), but it is hard to argue with the basic concept. Importantly, internalizing the emissions externality will not just make emissions more costly (thus reducing them via the price mechanism) it will also unleash a lot of entrepreneurial activity. Rather than try to sort out all the questions ahead of time, we should run lots of regional regulatory experiments and learn from each other.

Fourth, we need to understand that the level of global mobilization required here is akin to that during the World Wars (as well as subsequently during the Cold War). What we therefore need are administrations that are willing to tackle large scale infrastructure projects (e.g. public transportation, bicycle friendly cities, huge reflective surfaces), as well as back ambitious research projects, such as vastly expanding work on nuclear fusion. That kind of mobilization is hard because the threat still feels so diffuse (compared to the threat of another nation) but it is absolutely what we need.

Upcoming posts will dive deeper into policies and technologies. If you have a favorite that you want me to cover or comment on, now is a good time to let me know.

Friday, August 2, 2019 - 5:30pm

This is the third post in a series on the climate crisis. Post 1 declares the crisis. Post 2 is about the rising youth movement. Today’s post is about what to do next.

The first and most urgent step everyone can take is to answer the call of the young people by joining the global climate strike on September 20th.

Head over to now and register!

The purpose of the strike is threefold: first to support the youth movement, second to wake up as many adults as possible and third to put leaders all over the world on notice that humanity must take action now.

After you have registered you should make others aware as well so that they can join.

If you are a student on a college campus, find other students. Form a climate strike group for your school. Enlist others and make sure to have a big turnout. Talk to the administration and ask them what they are doing.

If you are an employee, find other employees at your company. Form a group that meets regularly. Talk to your manager and get them on board.

If you are a founder or CEO alert your employees. Tell them you will address the climate crisis at an all hands on September 20th and that you will lead a protest of all employees who want to join.

In this strike, there does not need to be something concrete to be calling for. There can be a great discussion about the many actions to be taken (expect more posts) after the strike. This strike is all about a collective awakening.

Thursday, August 1, 2019 - 12:31pm

Yesterday evening in the Democratic Debates Andrew Yang made a key observation in his closing remarks: the debates and their coverage are a reality show, which is exactly how we wound up with a reality show president last time. From the format, to the phrasing of questions to the decisions how much airtime to give to candidates that’s exactly what it happening again. Thankfully we have the internet to get out messages. So if you care about policies that are not left or right but forward into the future, support Andrew now.

PS Andrew also drew a crucial connection between universal basic income and the climate crisis, which I will pick up in a separate post.

Wednesday, July 31, 2019 - 5:31pm

This post is the second part in a series on the climate crisis (Part 1).

Earlier this year I gave a talk titled Reasons for Optimism. In it I refer to the Fridays for Future movement started by the amazing Greta Thunberg as giving me hope. It is not just hope though, but also a call to action. 

Here are our children taking us rightly to task over our failure to stop something that has been known as a problem for a long time. How long? The first research that industrial activity may result in global warming goes back to the 1800s! And, in an echo of the tobacco companies and smoking, the major energy companies had internal research ringing alarm bells as far back as the 1970s.

So now we each need to ask ourselves, what will we have done to stop this crisis? Will we have been silent bystanders, letting it happen, or will we answer the call of the young and finally act?

Here is a map showing how much this movement has spread over the last year 

Go find a local chapter and see how you can support them.

Monday, July 29, 2019 - 2:30pm

I no longer say “climate change” – instead I now call it what it is, the “climate crisis.”  If you don’t think it is a crisis, I recommend the following readings.

Both papers – in very different ways – make the same argument: we are on a runaway trajectory now. We are already in a crisis that renders nearly everything else a rounding error. If left unchecked, the climate crisis will rapidly destroy the underpinnings of modern civilization.

I am keeping this post intentionally short. Go read the papers instead. More later this week.

Friday, July 26, 2019 - 2:31pm

Here is a talk which I gave at the Rise of AI conference in Berlin earlier this year on the topic of Artificial Intelligence and the allocation of attention. It explicitly links what is happening online to the climate crisis.

Monday, July 22, 2019 - 12:31pm

I know several wonderful people involved with the process of creating new emoji and occasionally see them celebrating an addition. I understand the motivation for representing more people, such as the recent addition of interskintone couples. And yet, each time I cringe a bit – not about the specifics, but about emoji generally.

Written languages based on alphabets are one of the great human accomplishments. They mark an extraordinary progress over the hieroglyphs which preceded them. Alphabets are kind of magical. First, you can express different languages using the same alphabet (e.g. German, English, French, Spanish and more). Second, you can introduce new words simply by combining the existing letter of the alphabet. Both of these demonstrate that alphabets have a kind of universal quality about them. Third, and maybe most important, words assembled from an alphabet represent a high level of abstraction that allows a lot of the detail to be filled in. That is an important feature, not a bug.

For example, when I write the word “human” you can fill in what you imagine a human to look like. The word itself carries some fundamental attributes of being a human but the rest is intentionally underspecified. This allows us to use a single word that applies independent of gender, nationality, race, clothing, etc. That is the power of language based on alphabets, because the letters themselves carry no meaning. Even the meaning of a word can evolve over time. For example, the word “couple” at one point might have meant a male-female couple but is now used to describe any two people who are paired.

Contrast that with emoji. The need to add ever more representations arises exactly because images lack this universality. Emoji have color and shape and hairstyle and clothing and so on. A detailed emoji thus emphasizes the specifics over the abstract. The specifics are directly visually encoded and have meaning in and of themselves (unlike letters) and the overall meaning of the image is also permanent. This problem of specificity has gotten worse as emoji have become more detailed, which has created the understandable desire for representation. The more something is a detailed image, the more it either does or does not look like someone specific.

It is worth recalling that emoji were predated by emoticons, which is a portmanteau of emotion and icon. They played an important role in environments where short text fragments were common, such as online forums (remember dial-up bulletin boards?). There they served to provide emotional context that might otherwise get lost in a short text — something that seems highly relevant again today. But because they too were text based they had a high level of abstraction and did not suffer from the specificity problem of today’s graphically detailed emoji.

Am I just an old men yelling at clouds? Possibly. But consider the alternative for a moment that there really is a thin line between adding some emotional context to your text and regressing to the age of hieroglyphs. Wouldn’t it then be better to err on the side of not using emoji? Or maybe sticking to hearts, fire and vegetables?

Thursday, July 18, 2019 - 6:31pm

A recent series of tweets about identifying 10x software engineers set off a lot of making fun of the author for perpetuating a myth. Given the wording of the tweets too they made a particularly easy target (I can’t actually find them right now or I would link to them). All that poking fun though obscures some interesting questions about individual and team productivity in software engineering.

Before getting to software though I want to point to a related interesting phenomenon. Just three players: Federer, Nadal and Djokovic have dominated men’s tennis over the last 15 or so years. Between the three of them they have won 53 of the last 64 grand slam tournaments. Each one of them has won roughly 10x as many grand slam tournaments as players in the next best group. There is a similar story on the women’s side. Serena Williams has won 23 grand slam titles and at one point was the number #1 ranked player for 186 consecutive weeks!

There are several things worth noting here. First, 10x outperformance is clearly observed in some domains. Second, 10x outperformance in tennis can’t be attributed to any one single factor. Federer doesn’t serve 10x as fast as other players. Serena doesn’t run 10x as fast as other players. And so on. In fact along many dimensions these players have only a slight edge. But when combined with tennis’s scoring mechanism that small edge translates into huge outperformance. All the points that someone won against a top player mean nothing when the match is over.

Writing software has some interesting parallels. You can feel like you are making a lot of progress (scoring points as it were), but eventually you run into a problem and you wind up having to rewrite a lot of what you did or discard it altogether. Worse yet, you may not be willing to admit to yourself that this is the case and double down on your flawed code, making it worse. This happens all the more when you have many people collaborating on a piece of software. Put differently, writing software is also a compounding process where small advantages at each stage can result in massive differences in total productivity.

A number of studies of open source projects have shown power law distributions in contributions. And many famous projects have been built by very few developers, with the first version often written by a single individual. I have also observed this in commercial contexts. For example, in the earliest version of the 10gen platform the database (which later became MongoDB)  and the application server were each written by a single engineer.

Now this doesn’t mean at all that you can or even should hire someone with that background to join your team. A lot depends on what stage you are and what you are building. As a first approximation having someone like this on your team works best when you are early and are building something technically complex (e.g. a database). And you better make sure you are really aligned on what you are building, ideally they are a co-founder. Or if you bring someone like this on later, they better work on the first version of a well defined sub system which they can own. 

In many other contexts, someone like this can be completely disruptive, annoying or even impossible to work with. And to come back to tennis, it has proven very difficult (impossible?) to build successful Davis Cup teams around some of these extraordinary individual players. So bottom line: individual 10x productivity can exist but can also be incredibly hard or impossible to harness for a team effort.

Wednesday, July 10, 2019 - 5:31pm

I wrote a post nearly four years ago titled Brief Q&A on Artificial General Intelligence (AGI), which has held up pretty well. Despite a lot of progress in specific domains since then there is no obvious sign that AGI is around the corner, although as the post points out, the jump to AGI could be very nonlinear. The Turing test is of course a well known proposal establishing that a machine has reached a level of general intelligence (and fans of Blade Runner may think of the fictional Voight-Kampff machine).

It strikes me though that a better test might be to see if a machine can explain why proposed cartoon captions in the weekly New Yorker cartoon caption contest are funny and then come up with its own proposal for a funny caption. Here is a particularly apropos example from some time ago:

A machine that can consistently perform well on explaining the humor in these captions, strikes me as a strong indication of artificial general intelligence and much harder to fake than sounding reasonably like a human in a conversation.

Monday, July 8, 2019 - 11:30am

First, congratulations to the US Women’s National Team on a repeat world championship, their fourth overall. Here is a clip of the beautiful goal by Rose Lavelle

Second, the team’s victory brings with it a microcosm of the large scale social conflicts playing out today. It is simultaneously a tribute to women’s progress and a stark reminder of the pervasiveness of systemic inequality. All one has to do is look at the discussion around pay for the women’s team to see this. Women are facing not just defensiveness, but massive outright hostility simply for wanting fair pay.

I encourage anyone who still wants to cling to some economic justification to read this WSJ article and this Washington Post piece (annoyingly both paywalled), which provide the numbers that show this simply isn’t the case. Even more importantly though soccer shows how much inequality today is still the result of self re-enforcing systems. Money (or reputation, or power) made at the top of a field influences what happens upstream. Why does the US have such a formidable women’s soccer team compared to other nations? Exactly because we intentionally broke this systematic feedback loop with Title IX. So yes, these issues do not somehow magically fix themselves through some imagined meritocracy.

I will readily admit that I did not have a real appreciation for the extent of these difficulties until I started backing female entrepreneurs. So if this all sounds remote to you, I encourage you to support female or minority entrepreneurs, athletes, researchers, artists, etc. and get to know what they are up against.

Thursday, July 4, 2019 - 11:31am

Happy 4th of July. It’s great to celebrate independence, but even better to remember that we are all interdependent. That’s why last year I wrote a post about climate change. And this year is no different. If anything I feel like writing the post in all caps. 

While I gave a talk early this years titled “Reasons for Optimism,” the reality is that we should be panicking as the amazing Greta Thunberg puts it so aptly

Our world is on fire. And we are not acting accordingly. Instead we are like these guys, going on with our every day lives worrying about whether we should use the #4 or #5 iron on the next shot.


I have reached more personal clarity on this topic than ever before. I too am effectively one of these guys. I write about climate change here on Continuations, but then go back to worrying about things that are trivial by comparison. I have contributed far too little time and far too few resources towards finding solutions. Expect more updates on this soon.

Monday, July 1, 2019 - 11:32am

Here is the text of a speech I gave at the 72nd Annual NYU Labor Conference, which this year was on AI and Automation.  Unfortunately there is no recording - I stuck relatively closely to this, but didn’t read it.


Universal Basic Income: An Introduction

Thank you for the opportunity to speak to this audience about Universal Basic Income. I am approaching this topic from the perspective of a venture investor who backs companies that automate tasks ranging from image recognition to medical diagnosis, as well as someone who has thought and written about automation for nearly three decades going back to my undergraduate thesis on automated trading in 1990.

For anyone unfamiliar with the term Universal Basic Income or UBI, it refers to a payment to every citizen that is unconditional, i.e. paid independent of employment status or income. A commonly used number is a monthly payment of $1,000 per adult and less per child. The idea for such a scheme in the United States is quite old and an early mention can be traced all the way back to Thomas Paine’s 1795 pamphlet on “Agrarian Justice.” Proponents over the years have come from all over the political and ideological spectrum, ranging from Milton Friedman to Martin Luther King Jr.

If I have done my math correctly, the first Annual NYU Labor Conference took place in 1947 at what we can now recognize as the beginning of the golden era of the Industrial Age. A period that lasted for 40 some years during which market based economies produced exceptional growth with the benefits shared between capital and labor. For the last twenty plus years, however, the benefits of growth have accrued primarily to the owners of capital in what has become known as the great decoupling, which is attributable to the twin effects of automation and globalization.

Given this impact of automation on labor it is not surprising that this section of the conference has the word “Mitigation” in its title. UBI is often positioned defensively: “Automation will take away your job, but here is some money.” This framing is deeply problematic. At best it makes UBI appear like another welfare policy and at worst it carries a ring of “opium for the people” – a way of keeping the working population docile while capitalists get richer.

How then should people think about UBI? In my book World After Capital, I refer to it as “Economic Freedom.” Why? Because UBI massively increases individual freedom. It provides a walk away option from a bad job, a bad spouse or relationship, even from a bad city. As such it also provides new found bargaining power in the labor market for the roughly 40% of Americans who are part of the precariat. At its most fundamental, UBI makes people free in how they allocate their time. They can choose to work and make more money or they can choose not to and instead spend their time on friends and family, or art, or science, or politics, or the environment, or any of the millions of things humans do outside of the labor market.

There is another crucial distinction between the defensive, mitigation framing and the offensive, freedom framing of UBI. The former implies that we are stuck in the Industrial Age, whereas the latter carries the possibility of a new age, which I call the “Knowledge Age” in my book. The defining characteristic of the Industrial Age isn’t “industry” – as in manufacturing – rather it is the job loop: people sell their labor and use their income to buy “stuff” (goods and services), which in turn is made by people selling their labor.

Employment in agriculture declined from 90% of all jobs in 1780 to below 3% today. This change is often taken to show that we successfully replaced agricultural jobs with other jobs and that we can and should do so again now: automate existing jobs only to replace them with new and different jobs and thus stay in the job loop of Industrial Age. But that reading shows a lack of imagination. A different interpretation is that something that once occupied the bulk of human attention, producing enough food to feed the population, has been reduced to an afterthought.

Well, what occupies the bulk of our attention today? The job loop. Paid labor. If we succeed in enabling automation to its fullest extent, if we succeed in transitioning into the Knowledge Age, then 100 years from now we will have done to paid labor what we did to agriculture. A reduction from something that occupies 80 percent or more of human attention today, to something that’s barely noticeable.

It is crucial that we free up human attention now because too many important problems are going unsolved. The market based system has been so successful that it has solved the problems it can solve, leaving us with the ones it cannot. Prices do not and cannot exist for events that are rare or extreme. There is no price for a human finding their purpose. There is no price for preventing an asteroid impact. There is no price for averting a climate catastrophe. Because we are relying on the market to allocate attention, we are paying far too little attention to these crucial issues and far too much attention to making money and spending it on stuff.

UBI then is a central pillar of a new social contract that enables a transition to the Knowledge Aga, a transition that is as profound as the one from the Agrarian Age to the Industrial Age. What replaces the job loop? In World After Capital, I suggest that the answer is the Knowledge Loop, in which we learn, create and share knowledge – broadly defined to include not just science but also art and music.

Now of course there are many objections to UBI. Most of these, such as people spending money on drugs, or an immediate collapse in the supply of labor, are easily dismissed by the evidence from UBI trials around the world going back to the famous 1970s Mincome experiment in Canada, all the way to the currently ongoing Kenya study by Give Directly. There is also indirect evidence that contradicts these objections, such as the by now well documented benefits to the Native American population from casino licenses.

I will therefore focus on two objections, one practical and one philosophical, that are not so readily addressed by the available evidence.

The practical objection that looms largest is that UBI is simply not affordable. Almost every analysis that comes to this conclusion makes two mistakes. First, looking at a gross instead of net expenses. Second, examining payments from a fiscal perspective only.

The gross expenses in the United States would amount to something like $3.3 trillion or roughly the same as all Federal revenues. Net expenses, however, would be quite a bit smaller. In conjunction with introducing a UBI, it is crucial to modify the tax code so that income tax is paid starting with the first dollar earned. A large fraction of the population that is currently not paying federal income tax, Mitt Romney’s infamous 47% remark, would instantly owe some amount of income tax. And of course for people already paying taxes the net transfer is also smaller. At a 35% flat tax rate on all income, whether from labor or capital gains, as well as eliminating various deductions, the net expense required for a UBI is on the order of $1.5 trillion. And this is a completely static calculation which does not assume any GDP growth benefits of UBI, which have been estimated as high as $2 trillion dollars.

$1.5 trillion in new expenses still sounds like an impossibly large amount. But with a UBI in place it becomes possible to eliminate some programs such as food stamps and TANF entirely and modify other programs, such as Social Security, for savings on the order of $500 billion. Now to cover the remaining $1 trillion there are various proposals worth considering including a carbon tax, a financial transactions tax and a VAT – the latter being favored by 2020 Democratic presidential candidate Andrew Yang. Some combination of these could cover the entire remaining $1 trillion.

But we should also consider a fundamentally different approach to implementing a UBI. I am talking about moving from fractional to full reserve banking, something that has historically been favored by economists from the Austrian school, as well as by Milton Friedman, whom I previously mentioned as a UBI advocate. Since the 2008 financial crisis, we have created annually on the order of $500 billion in M2 money supply. This money creation in a full reserve banking system would be possible as direct payments into citizens’ UBI accounts. Instead of letting commercial banks decide where newly created money enters the economy, it would enter equally for everyone. That would make it harder for someone like myself to get a mortgage for a second or third home, but would make it possible for many people to afford a first one.

At the $500 billion annual level we are simply matching the current money supply growth, which has not been inflationary. It is, however, possible to fund more and potentially all of UBI that way instead of via taxation. Wouldn’t that result in inflation? Won’t prices simply go up to offset the new money created? If we wanted to fund more of UBI that way we would have to also institute some form of demurrage, for instance through negative interest rates. Doing so will become much more readily possible with “programmable money,” a better term for what is often referred to as crypto currencies.

All in all though the key takeaway here should be that through some combination of changes in the tax code, elimination and modification of existing welfare and social programs, and some new taxes and/or changes to the banking system, it is entirely possible to finance a UBI. The fact that this is possible shouldn’t be surprising, seeing how even at the gross expense level of $3.3 trillion, a UBI represents only 15% of GDP.

Now on to the philosophical objection. This is the claim that removing the need to work in order to earn a living robs people of their purpose. While strongly held today, this view of human purpose would strike people from other time periods such as the middle ages or antiquity as absurd. They would have answered that human purpose is to follow the commandments of religion, to be an upstanding community member or to be a philosopher.

Why is it so difficult for us today to disentangle our job from our purpose? Well we have spent the last two hundred years or so telling people from practically the day they are born that finding and succeeding at a job is their purpose. It is deeply woven into our culture as part of the protestant work ethic. And it has become the singular goal of education. The current obsession with STEM education is not because of the need to solve difficult problems, such as climate change, but rather because of a belief that people with a STEM degree will find a better job. This of course should not come as a surprise as the modern education system was designed for the Industrial Age. So education too is something we will have to change.

By now you might say that clearly I must be crazy. I want to introduce a UBI, revise the tax code substantially, even alter how money is created in the economy and change the education system to boot? Any one of these seems impossible, let alone all of them together.

We can’t change this much. And yet we have done so twice already. After living as foragers for millions of years — 250,000 of those as Homo sapiens — we changed everything when we transitioned into the Agrarian Age roughly 10,000 years ago. We went from migratory to sedentary, from flat tribes to highly hierarchical societies, from promiscuous to monogamous-ish, from animist religions to theist ones. Then again only a couple hundred years ago we changed everything when we transitioned from the Agrarian Age to the Industrial Age. We moved from the country to the city, we switched from  living in large extended families to living in nuclear families or no family at all, we went from lots of commons to private property (including private intellectual property), we even changed religion again going from great chain of being theologies to the protestant work ethic.

Each of these massive changes in how humanity exists were in response to a huge shift in our technological capabilities. Agriculture allowed us to create artificial food supply. Industrial technology allowed us to create artificial power. And digital technology now allows us to create artificial intelligence. Digital technology is as big a change in our capabilities as those two prior ones, it is not simply a continuation of the Industrial Age. We should expect to have to change everything rather than getting away with a few incremental patches here and there.

In conclusion: UBI is not a mitigation measure, keeping us trapped in the Industrial Age. UBI is a necessary, but not a sufficient, enabler of the Knowledge Age. We need to change pretty much everything else about how we live as well, including education, healthcare, the intellectual property regime, and much much more.

Wednesday, June 26, 2019 - 12:43pm

One of the reasons I get a fair bit of reading done is that I avoid watching lots of television. On a flight to Germany last week though, I got sucked into watching Babylon Berlin. The series is set in Berlin in the 1920s and is incredibly atmospheric with a rich historical background that is worth learning about.

The song and dance scene above is set at the Moka Efti club, which actually existed, as did many of the historical figures in the series. Of course the plot of the show itself is fictional but one can still learn a lot from it. So if you have not seen it already, I recommend watching Babylon Berlin on Netflix. Bonus: if you speak (or are learning) German, you can watch the show in the original version.

Monday, June 24, 2019 - 5:37pm

Humanity has a long and sad history of cruelty to other sentient beings including fellow humans. This is one of the darkest and saddest aspects of our selves and one we have struggled to overcome. Much progress has been made since the Middle Ages when public torture was common. And yet our progress comes from a relatively thin veneer of culture, barely restraining what remains a deep capacity for cruelty.

Among Trump’s worst influences is his embrace of cruelty as a means of politics. It is the most regressive part of his regressive Presidency, outstripping even the dismantling of science. Examples of Trump’s cruelty abound, from mocking people with disabilities to detaining immigrants in concentration camps. As always when it has been used historically, cruelty serves a dual purpose: to deny the humanity of the other and to rally and bond the supporters.

It is a mad and dangerous way of taking us back into a past filled with atrocities. Congress urgently needs to exercise any and all means of oversight or risk being further sidelined and seen as morally bankrupt. Voters need to put whatever minor objections they may have aside and vote for candidates who clearly renounce cruelty as a means of politics.

Tuesday, June 18, 2019 - 5:20pm

Today we announced that we have joined the Libra Association, the governance for a global stable coin. Nick has written a post on the USV blog explaining our decision. I have argued before that we don’t really know what path will take us to a decentralized future and therefore have to try many things. Some of these paths involve centralized corporations exposing their endusers to crypto. Nobody has more users than Facebook!

There is a historic analogy here to when Microsoft released Internet Explorer. That was a crucial step for the mass adoption of the Web. Yes, it was a reactive move and designed, infamously, to “cut off the air supply” for Netscape. And yet all the sudden millions of people had access who previously did not. That was in 1995. The following chart from Our World in Data shows what happened next:


It is useful to remember that Microsoft was not the primary beneficiary of the web. Instead, it resulted in the growth of whole host of new companies!

Now of course as Mark Twain has pointed out history doesn’t repeat but it rhymes. There are big differences here because Libra initially isn’t a completely open and decentralized system, the way the web was. So: much remains to be seen but the potential for a crossing of the chasm to mass adoption exists.

Monday, June 17, 2019 - 5:18pm

After a vacation, I am resuming work on World After Capital. I have been struck by the possibility that my book may suffer a fate similar to Keynes’s essay titled “Economic Possibilities for our Grandchildren.” Written in 1930, during the early time of the Great Depression, the essay speculated on a wildly optimistic development that would see us working only 15 hours per week by now. Similar to language that I have used in World After Capital, the essay starts by noting that

We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes, from the painfulness of readjustment between one economic period and another. 

Yes, the world still had one foot in the Agrarian Age while having the other in the Industrial Age. But what Keynes didn’t see coming was that the way the transition would be completed was through World War II (I imagine that he also didn’t anticipate how long and sever the Great Depression would be).

According to Mark Twain “History doesn’t repeat, but it rhymes.” I am not suggesting that we will have a huge recession or depression followed by a World War. But I am concerned that the optimistic vision of what is possible present in World After Capital will not come to pass without a huge crisis first, one that inflicts a great deal of destruction and human suffering.

The best candidate for this is of course climate change with all its attended problems such as rising sea levels, uninhabitable zones, disruptions to the food supply, spread of diseases and more. Political leadership in far too many parts of the world is increasingly appealing to our tribal instincts instead of tackling this as the global problem that it is.

I am not yet willing to concede that this is the only way. And as I argued in a talk at DLD earlier this year, there are continued reasons for optimism.  The last paragraph from the introduction captures this tension:

World After Capital argues for increased freedoms, rooted in humanism, as the way to transition from the Industrial Age to the Knowledge Age. I am profoundly optimistic about the ultimate potential for human progress. I am, however, pessimistic about how we will get there. We seem intent on clinging to the Industrial Age at all cost, increasing the likelihood of violent change. My hope, then, is that in writing World After Capital I can help in some small way to move us forward peacefully.

It is also a good reminder for me to redouble my efforts.

Tuesday, June 11, 2019 - 10:58am

I just spent nearly two weeks in Israel and Jordan on a family vacation. We saw amazing sights and met fascinating people. More than with other travel, and maybe due to some recent reading, the trip crystallized three insights for me 

1. Humanity is capable of pulling off incredible projects

2. Humanity’s progress is fragile and large scale reversions happen

3. Religion is a terrible affliction for humanity

I plan to write more about each of these in the coming weeks. 

Tuesday, May 21, 2019 - 10:52am

I have been on a bit of a blogging break which is likely to go on for a few more weeks. The break has been the result of a confluence of several factors, starting with a lot of work. Historically, I would have reacted by cutting back on sleep and workouts but now I know better than to do that. I need 8 hours of sleep and when I don’t get those I can’t think well and, more importantly for the people around me, become irritable. Since I am on the topic of health, I am happy to report that my shoulder is fully restored. That’s due to having found an amazing physical therapist and a wonderful personal trainer (I feel incredibly fortunate that I can afford this level of personal attention).

I have also been on a bit of a reading bender. Some time ago I realized that I had read virtually no science fiction by women authors and so I set out to rectify this. Since then I have read great works by Ada Palmer (Terra Ignota Series), Nnedi Okorafur (Binti Series), Annalee Newitz (Autonomous), Ursula K. Le Guin (The Left Hand of Darkness) and NK Jemisin (Broken Earth Trilogy – currently halfway through first book). I highly recommend all of these.

I plan to return to blogging in a few weeks. During that time I will also look into how I can finally get off Tumblr for good. If you have any recommendations please let me know. Until then have a great break everyone!

Wednesday, May 8, 2019 - 2:03pm

Today’s Uncertainty Wednesday is about the risk of inflation. I spend much of my time thinking about company valuations, both as we make new investments and also as we try to mark valuations in existing companies. Of course valuations for private companies are influenced by available public comps and those have been trading at high multiples, including the current crop of IPOs. Now there are two countervailing views in the market. One view is that valuations will return to lower historical multiples and the other view is that current multiples are the new normal.


Why could multiples have expanded permanently? Well there are two possible explanations (which are not mutually exclusive). First, that due to pervasive network effects successful companies can grow faster and have stronger ultimate positions in their respective markets. This is to say the higher multiples are justified on fundamental grounds. Second, that there is so much money sloshing around causing low interest rates and thus driving up present value of growth companies. This is to say the higher multiples reflect a changed monetary landscape. The place to look here is the Fed’s balance sheet which expanded massively during the 2008 financial crisis and again in 2014 as can be seen on the following graph.


Now what that graph also shows is that for about a year now the Fed has had some success in bringing that money back in by shortening its balance sheet to the tune of a few hundred billion dollars. That’s a huge amount of money but still pales compared to the roughly $3.5 trillion expansion.

What does all of this have to do with inflation you may ask. Well, the multi trillion dollar question is where we go from here. Can the Fed successfully continue to shorten its balance sheet, or is the following projection from JP Morgan Asset Management correct?


This basically suggests settling in with an extra $3 trillion or so and growing from there. It reminds me of what someone said as the Fed started with quantitative easing: “The Fed’s balance sheet is like toothpaste – easy to squeeze out, impossible to put back in the tube.” (I can’t find the quote right now to attribute).

If that’s indeed the case then it is true that asset valuations may stay as high as they are (to the extent that the monetary explanation for high multiples applies), but it also means that there is the potential for an inflationary shock across all prices, including everyday consumption items. I have written a lot about inflation before where I keep making the point that technology is deflationary. But that doesn’t rule out inflation from a loss of faith in purchasing power.

There is a small but nonzero chance that’s where we could wind up, especially if the collective belief suddenly shifts to concluding that we will use inflation exclusively to finance government spending. Now I should be clear that I am actually a fan of using the money supply to finance a Universal Basic Income, but that requires a shift to full reserve banking and the addition of some kind of wealth tax to rebalance the system. It could all be done, but only if we are willing to change a lot of things instead of just printing more money.

Monday, May 6, 2019 - 11:57am

NOTE: I have been posting excerpts from World After Capital on Mondays. But because I am doing a more substantial rewrite of Part Four, today’s post describes what I am planning to cover.

I want Part Four to be more practical by pointing out ways we can take responsibility today for making the transition to the Knowledge Age. Here are areas I am planning to cover. I am curious if anyone has additional suggestions. First there are direct contributions to the three freedoms.

1. Mindfulness research and applications (Psychological Freedom)

There have been recent breakthroughs in understanding the physiological and neurological underpinnings of mindfulness practices. More work here is needed including ranging from foundational (such as mathematical models of the neural networks) to practical (such as treatment with Psilocybin and other psychedelic drugs). There are also great opportunities to contribute to mindfulness through computer applications, from practice apps such as Simple Habit to more elaborate ones based on reading brainwave activity. Finally, there is a ton of work to be done around embedding mindfulness in to our every day applications such as email, social media, etc.

2. UBI advocacy and politics (Economic Freedom)

For the first time with Andrew Yang there is a candidate running on a UBI platform for 2020 presidential elections. People can volunteer for his campaign. Even if that comes to an end there are other ways to engage in moving the idea of UBI forward. There are several ongoing research projects, such as the one in Kenya run by Give Directly. There is work on policies that can provide an onramp to UBI, such as the Economic Security Projects evaluation of an expanded Earned Income Tax Credit.

3. Creating open source and Creative Commons content, advancing protocols (Informational Freedom)

While reforming is copyright is hard (still someone should work on that) it is much easier to create reduce the restrictions of copyright for content by making it available as Creative Commons. Same goes for software that is made available under an open source license. Finally there is a lot of work these days on open protocols, particularly in the blockchain area. All of these can help advance informational freedom now. Of course it would also be great to have more people advocate for better policies.

Above and beyond working on these three freedoms, there are other foundational areas that require work if we are to transition successfully into the Knowledge Age. These include

1. Fighting Climate Change

Climate change is a clear and present danger. Much of the current way of living including where on the world people are, how they are fed, where water comes from are on the brink of changing dramatically. We are not prepared for the degree of change that’s ahead and if we don’t intervene now there is a high likelihood of cataclysmic change with massive loss of human lives ahead. There is a multi prong approach that’s required. We need to aggressively work on non carbon based energy sources (not just solar and renewables but also nuclear, including further work on fusion), we must have some kind of carbon tax style regulation and because we are late we need to research ways of delaying the big change such as solar radiation management. If you are looking for a model of what to do,

2. Defending Democracy

It is sometimes argued that democracy cannot successfully make big transitions and that we should look to different models for the change we need. People point to China as an example of a technocratic government that they claim is doing a better job coping with change. And it is entirely true that many democracies are struggling today. Nonetheless I believe it is essential that we redouble our efforts to defend democracy. This is a rich field of engagement including working on the campaigns of new candidates, fighting gerrymandering at the state level, innovating on voting methods with rank choice voting and experimental techniques such as quadratic voting.

3. Advancing Humanism

This may strike some as the least important of the areas I have mentioned for engagement so far. And while it may have the least short term impact it strikes me as the most important in the long run. What does it even mean to engage here? For starters I think it is about advancing the thinking around what a revived modern humanism needs to look like. I have taken a stab at that but much remains to be done, such as a deeper exploration of the moral consequences. Then there is the need to package humanism as memes that can spread online. Of starting a movement that can grow.

There are of course many other important ways people can contribute to the Knowledge Loop today and in the future that will also help move us forward towards the Knowledge Age.

As I am reworking this, I would love to hear whether people think of these suggestions and what other areas of engagement I absolutely should cover.

Albert Wenger is a partner at Union Square Ventures (USV), a New York-based early stage VC firm focused on investing in disruptive networks. USV portfolio companies include: Twitter, Tumblr, Foursquare, Etsy, Kickstarter and Shapeways. Before joining USV, Albert was the president of through the company’s sale to Yahoo. He previously founded or co-founded five companies, including a management consulting firm (in Germany), a hosted data analytics company, a technology subsidiary for Telebanc (now E*Tradebank), an early stage investment firm, and most recently (with his wife), DailyLit, a service for reading books by email or RSS.