So you see that, in a sense, I know very little about how this story was born. That is, I don't know where the pictures came from. And I don't believe anyone knows exactly how he 'makes things up'. Making up is a very mysterious thing. When you 'have an idea' could you tell anyone exactly how you thought of it?
-C. S. Lewis, Of Other Worlds, from the chapter describing the birth of Aslan and Narnia
In other words, so far, AI is replacing tasks, not jobs.
-Noah Smith, thinking about the future of work
The society of the modern world, which I have sought to delineate and which I seek to judge, has but just come into existence. Time has not yet shaped it into perfect form; the great revolution by which it has been created is not yet over; and amid the occurrences of our time it is almost impossible to discern what will pass away with the revolution itself and what will survive its close. The world that is rising into existence is still half encumbered by the remains of the world that is waning into decay; and amid the vast perplexity of human affairs none can say how much of ancient institutions and former customs will remain or how much will completely disappear.
-Alexis de Tocqueville, Democracy in America, Book Two, Chapter VIII, 1840
The difference between a good investor and a bad one isn’t access to some hidden truth. It’s the quality of the process. How disciplined is your research? How well do you manage risk when you’re wrong? How honest are you with yourself when a thesis breaks down? Good investors aren’t right more often because they know more. They’re right more often because they’re more rigorous about how they guess, and quicker to admit when they’ve guessed wrong.
-Eric Soda, from this newsletter
......................................AI—or not.
In 1930, John Maynard Keynes wrote “Economic Possibilities for our Grandchildren,” predicting that productivity growth would be so powerful that by the early twenty-first century the workweek would fall to fifteen hours. He was directionally correct about productivity growth, but profoundly wrong about labor market implications. Rather than working dramatically less, societies consumed dramatically more. Why? Because rising productivity lowered costs and expanded the consumption frontier. Preferences shifted toward higher quality goods, new services, and previously unimaginable forms of expenditure. Leisure increased modestly, but material aspiration expanded far more. History suggests productivity gains do not automatically translate into labor withdrawal or demand collapse as they alter the composition of demand, expand real incomes and generate new industries. Keynes underestimated the elasticity of human wants.
That’s a major acceleration. 2.8% labor productivity growth is about equal to the best decades we’ve seen since World War 2. If that rate is sustained for a decade, or accelerates further, it’ll be pretty historic.
What’s driving the productivity boom? It’s tempting to conclude that AI is making white-collar workers more productive, but Ernie Tedeschi points out that the biggest swing has been in manufacturing productivity. For a long time, manufacturing productivity was basically flatlining in America; now it’s suddenly growing again.
Tedeschi argues that this is also probably AI-driven, but it’s not about people using ChatGPT and Claude Code at work — it’s about the fact that a ton of data centers are being built, and data centers are very valuable:
If you look at data centers’ contribution to growth itself, it looks pretty small, but this masks the value of the computers contained within the data centers. Together, the creation of data centers and computing equipment have been contributing about as much to GDP growth as they were during the dot-com boom:
-Noah Smith, as cut-and-pasted from here
He collected over 28,000 forecasts made by 284 political analysts, economists, foreign policy bigwigs, and all the usual loud-talking necktie people. What Tetlock found (and I’m condensing 20 years of depressing data here) is that the average talking head was terrible at predicting real-world outcomes.
Not “mildly off.” Not “in the ballpark.” I mean barely better than chance. Turns out your uncle screaming at the TV is statistically equivalent to a CNN pundit in a bowtie.-Eric Barker, from his post, 4 Secrets to Smarter Thinking
.......................for dealing with uncertainty:
9. If all else fails, simplify. Einstein supposedly said the five levels of intelligence are smart, intelligent, brilliant, genius and simple.
As the world gets more complex you have to fight harder to keep things simple.
The solution to complexity is not more complexity. It’s simplicity.
...............war is a runaway train and we just don't know where it will take us.
Our country is often accused of rank imperialism, but in truth we’d rather putter around our own backyards.
Now and then, though, we need to peek over the garden wall and see how the rest of the world is doing.
If we do so today, we’ll find our sitting president, Donald Trump, feverishly rearranging the scenery and props on the geopolitical stage.
If the play he inherited from his predecessor was “The Decline and Fall of the American Empire,” Trump’s new production is an updated remake of “It’s a Mad, Mad, Mad, Mad World.”
-Martin Gurri, from this New York Post contribution
trailer for the 1963 movie by that name is here
The pattern is remarkably consistent. We either wildly overestimate the short-term impact of new technologies (remember when blockchain was going to replace every institution within five years?) or we catastrophically underestimate their long-term consequences. Nobody building the early internet imagined it would reshape elections, create trillion-dollar companies, or leave millions of people psychologically dependent on dopamine hits from their phones.
It isn’t just that we fail to predict which technologies will emerge; we fail spectacularly at predicting the second- and third-order effects of the technologies we already have. Social media was supposed to connect the world. It did. It also polarised it. The smartphone was a communication device. It became an anxiety machine for an entire generation of teenagers. Nobody planned these outcomes. They emerged.
-Nicholas Bate, from here
Civil War historian Shelby Foote, when asked to cite anything about the American Civil War he did not understand, often replied, “I still don’t know how they did it… How does a starving man march 20 miles, then go into a 3-hour battle?”
That’s a great question. Each generation, in raising the next, has to wonder how much toughness to pass along and whether the deprivation of hardship is doing harm.
-Michael Wade, from this substack
Enlargeable photo and description may be found here. I love the confidence they project in describing what we are looking at.
History repeats itself in the large because human nature changes with geological leisureliness, and man is equipped to respond in stereotyped ways to frequently occurring situations and stimuli like hunger, danger, and sex. But in a developed and complex civilization individuals are more differentiated and unique than in a primitive society, and many situations contain novel circumstances requiring modifications of instinctive response; custom recedes, reasoning spreads; the results are less predictable. There is no certainty that the future will repeat the past. Every year is an adventure.
-Will & Ariel Durant, The Lessons of History
I have a theory about nostalgia: It happens because the best survival strategy in an uncertain world is to overworry. When you look back, you forget about all the things you worried about that never came true. So life appears better in the past because in hindsight there wasn’t as much to worry about as you were actually worrying about at the time.
-Morgan Housel, from here
Whenever the discussion turns to how good the good-old-days were, my mind turns to 1968, my junior year in high school. Antiwar protests and riots. President Lyndon Johnson stops his reelection campaign. Martin Luther King assassination, followed by riots all over the country. Bobby Kennedy assassinated. It was a brutal year. The history major in me knows that there have been many brutal years. Not sure I am buying his theory. Would be my guess is that nostalgia is more about missing old friends and relationships, but that's just a guess.
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