Tag: theory

Podcast Idea: The Long View

The concept

Business leaders and executives are high powered, rapid decision engines, but we know very little about why, what and how they think. I want to look underneath the jargon-filled soundbites at what myths and beliefs inspire those decisions, how they live, how they understand themselves as actors on the grand stage, where they believe the next act will play out, and paths young people can take to create a decent future.

These are the people that shape our world, and I want to step back with them and take the long view.

Target interviewees

F500 CxOs, initially non-CEOs. Likely a focus on non-tech executives who already get a disproportionate amount of focus

How to execute

Initially do 6 over Skype and if they all work, publish simultaneously and do blogger/media/B school outreach. If successful, pitch to F500 CxOs and offer to come to their HQs and do a live interview with some of their high potentials and allow for Q/A from audience.

Sample questions

  • Did you always want to be a CxO?
  • I know you (insert some brief history), but tell me about your path to where you are now. (Follow up on how influential event affects how they view X)
  • What do you think about YOU caused you to end up at the top of a global organization, rather than XX?
  • How do you structure your day/time?
  • In any way of living there are tradeoffs, executives aren’t exempted. What are the major tradeoffs you feel you make in your life?
  • What do you see as your core purpose as ROLE at ORG?
  • What big theories are inspiring your work at ORG?
  • Who do you think are the brightest lights in the business/strategy/marketing/operations world?
  • What are the last 3 books you’ve read? (find out in advance and read them)
  • What are the 3 books that underpin your view the business and the world? (find out in advance and read them)
  • How do you see American enterprise’s role in the world?
  • What are the 3 greatest forces operating in the world right now? (Dig on positive/negative)
  • What are the 3 greatest challenges facing the world as you see it? (Dig on how they interpreted–welfare, growth, environment, etc)
  • What role do you see college playing in the future?
  • Given your view on X and Y, how should people think about prioritizing their careers?
  • If you were in a top business school, and dead set on climbing to a Fortune 500 C suite, what advice would you give yourself?
  • Will X exist in 10 years? 20?
  • If you could be a young person and move anywhere, where would it be and why?
  • In lots of ways, the status of large enterprises has fallen in American society’s estimation (exempting large tech orgs), do you think this is fair-compared to the status GE had in say the 70s?
  • Large orgs are often disparaged as slow and uninnovative. This is almost treated as a law of nature. What dynamics do you think give rise to this perception? In what ways is this perception false?

The Things People Do For Meaning Now

I started this blog because I wanted to investigate what people will do for money and meaning in the near and far future. As I approached it obliquely, it may have gotten a bit muddled, but it remains my main concern. To understand where we are going, I needed to construct a model of where we are. I haven’t yet done that, but I have observations on what people like me and unlike me do for meaning today..

Travel

There are two types of meaning being derived from travel. Business travelers often complain about the demands of their job, and they likely genuinely mean it. But I witness and have succumbed to a small delight in the implied status of the fact that “I, personally, am physically needed somewhere else”. The other type of meaning is the one that certain people get from “seeing the world” or interacting with other cultures. This meaning is harder to describe and prove exists, but it’s become such a generic value that I suggest you try telling people at a social gathering that you “don’t like to travel”. You’ll like be looked at askance and interrogated. And will likely lose status in the average person’s eyes. You will have challenged a common mechanism of generating meaning.

My investigations

I flew more in 2017 than I ever have, including 3 trips to Europe and 26 flights total. I explored a fair number of European cities. It’s hard to estimate how much meaning these travels generated, but based on how frequently I talk about it (even if negatively), I would say some. I’ll now introduce a meaning scale from 1-10 of how much meaning it generated for me. This, of course, is approximate at best and will vary considerably by individual.

Meaning rating: 3

Exercise

Thinking about exercise as meaning producing activity is strange. But it’s hard to argue that Crossfitters, yogis and SoulCycle-ists don’t seem to form a part of their identity around exercise. Those specific activities are easy to pick on because they’re group activities that come with obnoxious life advice—but that’s the point, they’re exercise as meaning creation taken to its logical end—not bastardizations. Marathon training is a solitary activity, but anything you do for that many hours a week must be throwing off a lot of meaning.

My investigations

Over the last several years, I’ve run 3 miles a few times a week fairly consistently, but if I felt like I could get away with stopping, I would. On top of that I’m often invited/dragged to yoga, bootcamp style classes, and SoulCycle. I’ve always liked group exercise, but the group and meaning part always made me cringe.

Meaning rating: 1

Art

Strangely, the most predictable and most ancient “hobbyist” way of creating meaning—the production and consumption of art—seems to be on the wane. Or rather, new arts emerged and have taken the place of old arts. Whatever bizarre number of hours Americans watch tv/surf the internet surely count as arts consumption—and truly this is the golden age of TV and hot takes. I’m just not sure how much identity and meaning is drawn from those things compared to going to a metal show or sculpting things with your hands. It’s possible I’m just a Luddite on this topic—no doubt Youtube video hobbyists and internet bloggers would take issue with it.

My investigations

Over the past year, I’ve listened to more albums intentionally, read more fiction and way more non-fiction than any year prior. My film consumption declined. I went to some really amazing concerts. I’ve shared more book and music recommendations than in the past. Art consumption has always been a big identity driver for me, and I think that it grew this year. Art production has been mixed. I took fewer (zero) art classes this year. Conversely, I started writing, which has been ok.

Meaning rating: 6

Altruism

Doing good things for other people generates a warm glow and a sense of purpose. Donating money to earthquake victims, volunteering at a soup kitchen—these things make you feel meaningful. Unfortunately, generating meaning isn’t the same as generating utility most efficiently. Oftentimes meaning and effectiveness are at odds. People who derive a lot of meaning from altruism have been those who reject effective altruism the most in my experience. Their emotional investments are so high that they can’t accept that their work/time/money has been less meaningful than they feel it is.

My investigations

I volunteered at the Austin homeless shelter by running the computer lab. This mostly consisted of sitting around while the clients did what everyone does on the internet—read email, watched Youtube videos, scrolled through Facebook and occasionally applied for government assistance or jobs. I liked doing this, it generated meaning, it felt good to tell people about doing it. But it wasn’t very effective. I also have gotten very interested in effective altruism and have put some time into how best to implement effective giving into my life. The ideas, conversation and people around EA are very interesting and feel meaningful. Giving away 30% of my income anonymously on the internet…doesn’t feel meaningful, even if it would generate the most utility, which is why I give away dramatically less than that to GiveWell. The meaning-utility gap is likely the biggest problem EAs have to overcome.

Meaning rating: 2

Tribe

Tribe is a catchall for both a community you are in dialogue with (think a church congregation) and an identity group that you consider yourself a part of (the Democratic Party). People clearly generate a lot of meaning from both, but I would argue that communities generate a lot more. This is likely because you are a participant rather than an audience member. I see a lot of shifts from community to identity group that go unnoticed because both generate a tribal feeling that occludes your changing role in the tribe.

My investigations

I struggle with being a member of a tribe, so this was really challenging to investigate. This attitude is probably what makes it easier for everyone to join identity groups—I always vote straight ticket Democrat (unless, this being Texas, the real race is between the GOP and Libertarians), but I doubt I could be in dialogue with the party if I tried. The only big community investigation was my attendance of a Rationalist MegaMeetup in New York. It was essentially a bunch of folks interested in rationality staying in a giant house and talking about stuff. Oh, and Scott Alexander was there. I went with some friends from Austin, so that made it reasonably easy. I really enjoyed meeting a lot of smart, interesting folks doing cool work, but for the most part, I didn’t like the community aspect. I know the whole point is to create an in-group, but that was exactly what I didn’t like.

Meaning rating: 2

Work

It is perhaps unfair to split out work from tribe. At least for people, like me, who work for tribal organizations. What most people think of as meaning being generated from work is the productive use of time to make the world a better place (for some business or person). In companies, this means taking your individual skills and combining them with those of other talented individuals and doing something neither of you could do alone. This productive part of work has not started to generate more meaning than it has in the past. It has just always been a huge meaning machine.

Conversely, as other communities have shifted into identity groups, (and perhaps as art has declined in its generic meaning rating) the relative value of productive work has risen. And organizations have responded to the generic decline in meaning by increasing the community, and thus tribal, aspects of their workplaces. I can’t say if this is good or bad.

My investigations

For the past 4 years, I’ve worked for a strange, Swedish consulting firm that helps Fortune 500 companies do something really hard. We help people change how they think and act at work. On average, I think BTS helps organizations and increases global GDP at the margin. The productive work I do is to help explain this work to clients and shape new offerings. But it’s the community aspects of the company that drive such high meaning.

Meaning rating: 6

Family

Family is difficult because almost everyone has one and almost everyone would say they derive a lot of meaning from it. So I will try to look at what people really do. A large majority of people have children, which is a very concrete action and from which most people say they derive a lot of meaning. Given the time and resource expenditures, they seem to be telling the truth. Conversely, very few people live in multigenerational households caring for aging parents or other relatives. Part of this is increase in healthy lifespan, but part of it must be that they deem it to not be worth it. Perhaps people derive more meaning from family they produce than other family.

My investigations

I did not have a child. But I am quite close to my mother and siblings—we all talk on the phone at least once a week. I didn’t change anything this year that would generate meaning.

Meaning rating: 8 (see the first sentence of family section)

Meaning and Yield Curves

I’ve begun to think about meaning as a sort of capital stock that an individual can grow or shrink via investing time in different meaning generating activities. For instance, my returns to time from art would be higher than my returns to time spent exercising, and thus my stock of meaning would go up.

A potential flaw in this logic is you seem to attribute more meaning to things as the time spent on that thing increases. It’s likely that there is a class of meaning activities that have positive yields that increase as you spend time on them, and others that hit diminishing margin returns (exercise, for me).

There are, of course, also activities that have neutral or even negative yields depending on duration.

Opportunity Flow

A Theory Of Moments That Can Change Your Trajectory

What is it?

Opportunity flow is to you and me what deal flow is to a VC firm. It is the sum of things like conversations about research breakthroughs a grad student friend had, the inside access to a job opportunity, and an old coworker pitching you to join her startup as a cofounder. (Although I’ll mostly be discussing in the context of paid work, it could be used avocationally or in personal relationships.)

Opportunity flow is the sum of moments that could alter the trajectory of your life. And like any sort of deal flow, depending on your investment hypothesis, you could consistently get opportunities to incrementally alter that trajectory or infrequently get the option to radically change. Most people land somewhere in between, but closer to the former.

Why is it an important concept?

If you can generate 1% more lifetime income or utility, then both you and the world will be richer and happier. While the concept of opportunity flow by itself likely won’t generate that, thinking in more structured ways about your future will.

Opportunity flow is an additional tool rather than a replacement for your other planning tools, as it will be high variance across both the population and at the individual level. However, even a small increase in opportunity identification and execution would increase global wealth and utility—which I believe is the most important moral consideration.

How to get started

Understand your risk profile.

Decide how much risk you are willing to take on. Are you simply looking for a new job or are you looking to invest a high percentage of your liquid net worth in a high risk venture? Most people will be in the middle. Decide if you will make many small bets or one big one.

Set aside your risk capital.

You will invest both time and money in generating opportunity flow. Initially, this will probably be writing down your ideas and previous work, reaching out to people who will mostly ignore you, going on awkward coffee meetings, and flying to events and meetings.  

The amount of time and money is clearly individual, but I would suggest setting aside more than feels comfortable. Once you have identified an opportunity you want to execute on, the time and money needed will be uncomfortable, so it’s best to start feeling that way now.

Be aware of all your skills. Not just your best or most obvious ones.

It’s easy to define your skillset as the graduate degree you have, or the function or industry you work in. However, in any high risk venture you will likely have to do a lot more than that anyway, so it’s best not to box yourself in from the jump. If you are a physicist, you can clearly do the statistics involved in forecasting. If you are a marketing person, but are willing to make sales calls, congratulations—you are now your venture’s salesperson.

Connect with people who have complementary skills—not people who are like you.

Many people looking to generate opportunity flow go to industry or functional events. This is fine as far as it goes if you’re looking to learn from whomever they could convince to speak. But if you’re looking for opportunity, don’t go to a place where there are a thousand people who proclaim to have the same expertise as you.

Go to where your skills are scarce. This could mean a researcher seeking out business types or someone from the developing world offering access to their market to a group of folks from the developed world. You will be rare and interesting, and opportunities will flow to you.

Come at problems from an angle.

If there is a problem that you understand, then seek out people who have no expertise in it, but have expertise in an adjacency. Look for people who deeply understand the first principles of the problem but likely have never considered your higher order problem. If you have an engineering problem, find a physicist. If you have a marketing problem, find a biologist. The flipside also works, if you have a psychology problem, find an art director from an ad agency.

If the people already working on your problem could have solved it, they already would have. And if they are going to solve it, then they likely won’t invite you into the room filled with people like you.

Privilege talent and passion, rather than a specific way of solving a problem (or even a specific problem).

This is a VC firm truism that probably doesn’t work for them. But I think it works for an individual’s opportunity flow. For VC firms, the number of people who have the talent and passion to dramatically alter the world is vanishingly small and their ability to identify them is…questionable. However, the number of people with the talent and passion to dramatically alter their own worlds is…well it isn’t vanishingly small. Fuck—it isn’t even small. Your ability to identify them is also likely much better.

If you find an opportunity with someone who is wildly smart with the passion to will their vision into existence, then I suggest you join them regardless of the problem they’re trying to solve.

A Travel Strategy For Understanding the Future

There are lots of guides to help you understand the past of a place—a fine and noble thing to do that will help you to understand the present. My approach to travel takes for granted that you can access enough a place’s history fairly easily, and can then move on to a more interesting question: how will its present shape the future?

Strategy:

Luckily, we already have a good starting skillset to predict a place’s future at least on a decade or so timeframe. When investigating a city, I find that the best mindset is to ask “would I want to live here?”, rather than aiming to understand the culture more broadly. I chose this starting point because we already try to predict the future of a place when we are deciding to live there or not. Given that most people seem reasonably happy with their choices and not continually surprised about the state of their chosen locale, this seemed a reasonable method. I suggest one minor tweak, rather than immediately asking about preferences, a better frame is “how would I live here”. Simply digging into the logistics of life now.

The questions I want answers to are:

  • How is economic value created?
  • What are the major industries?
  • What are the untapped opportunities?
  • Is there untapped human capital?
  • What are the best neighborhoods?
  • How do people spend their leisure time?
  • How does the exchange rate affect my purchasing power for products I care about the most?
  • How good are the bookstores?
  • How regulated is the average person’s life?
  • How hard is it to start a business?
  • Can you get decent coffee and beer?
  • Is late night street food diverse, cheap and delicious?
  • How optimistic about the future is the average person?

Tactics:

Note: these tactics apply primarily to the developed world.

My normal approach for visiting new cities is to stay in an Airbnb in an up and coming, hip neighborhood or the cheapest centrally located neighborhood—often they are the same. Airbnb is chosen because it provides a kind of domestic tourism—how is the home laid out, what sorts of appliances are being used, etc. I’ll try to eat at home for at least a few meals because then you get to navigate the different lay out of the grocery store and figure out its inventory, rather than simply walking around browsing, and you’ll get to use a new set of utensils and appliances.

Outside the home, I am normally forced to see the main tourist sights, which is perhaps not all bad for checking out the informal and formal tourist economy, but I would probably skip them if alone. As I’m interested in the culture and economy now, the hip neighborhoods of today provide more diversions and insights than museums to the past.

There are various angles you can take to find rapidly developing areas, but the following lenses tend to work:

Food

Reading food blogs tend to get you a really early in. Craft breweries provide insight into how well capital is finding good culinary opportunities. Searching for boutique hotels tends to put you in more developed areas given the different risk profile of building a hotel, but is also not a bad tack. Once in a burgeoning area, see how innovative versus derivative the food and drink scene is.

Startups

To find the tech scene, visit a startup accelerator and talk to people. Ask about the fundraising situation and exit opportunities. A quick walk around the central business district will provide you with a limited understanding of how money is moving through the city’s economy and fueling innovative production and consumption.

Immigration

Find immigrant neighborhoods and explore the markets and restaurants. These folks’ recent arrival means they can’t have affected the past, and they will have above average business creation rates, thus creating a higher than average share of the city’s future.

Human Capital

Go walk around the leading university in the city. Typically the academic buildings are unlocked and you can see the infrastructure and what sorts of things people are studying and doing in their leisure time. Visit a café or cafeteria and try to eavesdrop—English is pretty frequently used. Find the main student drag.

Art

Visual arts tend to be pretty accessible to tourists, so a visit to a high end art gallery will be fruitful. Especially note the commercial side—ask how much a piece is and evaluate that against how much you would pay. Concerts are harder to find and often feel more exclusionary, but music is a more rapidly evolving art and can give you a look at whether globalization has led to homogenization or productive innovation. Concerts also just tend to be more fun than art galleries.

Top Reads of 2017

These are the texts that caused view quakes or inspired/haunted me to the point where I had to recommend them.

Fiction

The End of Eddy by Edouard Louis

Picked up in Paris on a recommendation as a book that took France by storm. Absolutely gut wrenching, brutal and immiserating. Sort of like a French Hillbilly Elegy, if JD Vance were gay and had no extended family to intermittently rely on. Gave me insight strangely into a lot of rural, French (and maybe Western) culture and how inescapable it is for many. And a clearer idea on the “double consciousness” that those who escape have. My favorite novel since the equally, viscerally dark A Little Life.

Forest Dark by Nicole Krauss

It’s brilliant, like all of her work. Deep and generationally intertwined, about impermanence and eternity. Whatever all of her books are about—the power of narrative to tie people together across space and time. If you’re unfamiliar with Krauss, start with The History of Love—my favorite novel and one of the book I buy every time I see it, so I always have copies to give away.

The Chalk Artist by Allegra Goodman

Allegra Goodman is back to form, writing about tech and its discontents. I’ll always be a Cookbook Collector fanboy, but her latest book is more open about its loyalty to literature and education as a…shield, respite or solution to the modern world.

Nonfiction

Reasons and Persons by Derek Parfit

One line interpretation: focus on easy ways to maximize utility regardless of time, space and personal identity up to the point right before it makes you miserable. This interpretation inspired my Ethical Laffer Curve post.

I hesitate to say that this is the most important book I’ve ever read. But I have the impulse to say it. It’s certainly the most important book I read this year. Parfit makes the case for a utilitarianism that isn’t bound by time, space or personal identity. Parfit’s work is hard to summarize, but I’ll foolishly try: he makes the case that we are wrong to think of different people at the same time as fundamentally different as the same people at different times. Essentially that our past and future selves are as different from our present selves as other people. He then makes the case that if this is true, it affects utilitarian ethics substantially. In the same way that it is wrong to harm a different person, it becomes equally wrong to harm your future self (by smoking for example). I’m going to stop trying to summarize it because it’s a 400 page book of logical proofs and thought experiments.

We Were Eight Years in Power by Ta-Nehisi Coates

TC once praised another writer as having “courage to look dead-eyed at ideology and all its limitations without lapsing into nostalgia or cynicism” something he called “ice water vision” and wished that to be the quality he cultivated most. Me too. TC is one of the few writers/intellectuals I’ve had the privilege to watch develop because he was so open throughout his career at the Atlantic. If you haven’t followed him since the beginning, this is an absolute must. His most famous work, Between The World and Me is undeniably important, but WWEYIP is a better place to start.

The Hard Thing About Hard Things by Ben Horowitz

This is the best business book I’ve read in a while—maybe ever. An admittedly low bar. Ben puts on display the cutting intelligence, compassion and ruthlessness that has made Andreesen Horowitz the greatest venture capital firm of all time. His intro below does better than I could.

Inadequate Equilibria by Eliezer Yudkowsky

This book is an interesting look at why certain markets or institutions fail, and how to recognize failures that YOU can see and fix or exploit (often the same thing). Unfortunately, half of the book is really inside baseball stuff about modest epistemology—but that can for the most part be safely skimmed. Suffice it to say: taking the outside view is often appropriate, but sometimes an individual can do better–the book is about recognizing those times.

Eliezer is a strange dude. He founded one of the world’s foremost AI safety research organizations, but then decided that unless humanity became more rational then his work there wouldn’t matter. So he set about to “raise the sanity water line”. What a fucking insane thing. Strangely, he seems to have succeeded somewhat—his ideas have permeated influential thinkers and think tanks, and MIRI continues to hum and help lead AI safety research.

Online Reads

Stubborn Attachments by Tyler Cowen

The polymath economist of Marginal Revolution fame turns his lens on…ethics, or something like it. He makes the case for economic growth as a moral good above almost all else—excepting certain inviolable rights. And argues for a social discount rate of 0. In the 8 months since I read it, I’ve concluded that the optimal discount rate is non-zero, but very close to zero. Based on this disagreement, but with a lot of respect for Cowen’s framework, I propose a Portfolio Theory for Effective Altruism as a way to think about efforts with different levels of certainty and time scales.

I rank this as his best work, followed by MR, and finally his Great Stagnation series–I wonder whether he would agree.

Update: I asked Tyler and he agrees with my ranking.

Definite optimism as human capital by Dan Wang

This piece theorizes about how optimism might be a driving force of innovation. As in, people literally being optimistic that things can change for the better drives productivity growth. He attacks our current productivity slowdown from multiple weird, creative angles.

Neuralink and the Brain’s Magical Future by Tim Urban

Tim Urban is the writer Elon Musk calls when he wants the world to understand him. If you haven’t read his Elon Musk series, start at the beginning and end with this one.

THE 2017 STRATECHERY YEAR IN REVIEW by Ben Thompson

I’m cheating a little bit because I’m letting him curate his top 5, but Ben Thompson is probably the smartest person writing about strategy and tech (fuck, business in any sense) today. Everything he writes is worth reading.

On an Ethical Laffer Curve

Note: I’m not concerned here with whether or not the Laffer Curve as originally intended is a useful idea or what the optimal marginal tax rate is.

I’ve always broadly believed that act utilitarianism was correct in its most demanding form. However, I rarely actually maximize utility impartially because, well, it’s really fucking demanding. Outside of being a vegetarian, Peter Singer would probably not approve of my lifestyle—I travel carbon-intensively a lot, donate way below 10% of my income to effective non-profits, and constantly waste time and money on anything that isn’t literally saving human lives.

Convinced that maximizing utility is correct, I went to one of the main sources for 20th century ethical thought, Derek Parfit, and his first work, Reasons and Persons. Having never really read analytical philosophy before, it was indeed slow going. I covered maybe only 5-15 pages of dense argumentation per day, and many days I was too intimidated to open it at all. After a month, I’m only through the first section of the book, on whether or not ethical systems are self-defeating.

BUT I have already had one view quake. My prior view was that there should be an unlimited focus on impartially maximizing utility.

  1. All people, all the time should do what would generate the best outcome.
  2. For people in the developed world, this would mean focusing 75% or more of their time and resources on altruistic endeavors, with an increasing percentage as your amount of time and resources increased.

One obvious problem with that is that even as someone who believes the above, I have never come close to that standard. The problem Parfit found with the above formulation is that if we could somehow convince (or more likely coerce) everyone to act to maximize utility, then a very large majority would be miserable and thus actually lower total utility.

Thus the Ethical Laffer Curve:

My new formulation:

  1. All people, all the time should do what would generate the best outcome.
  2. This means focusing as much of your time and resources as you can on maximizing utility, up to the point where that focus begins to decrease personal utility at a faster rate than total utility is increasing.

Some interesting points:

  • The X axis allows for some combination of personal preference. Person 1 may focus 95% of their time on utility maximization, Person 2 may focus on 30% of their time before hitting a negative return.
  • The Y axis allows for a lot of debate over what utility really is, although the boundaries seem defined as a slow, painful death and literally being Bill Gates—infinitely wealthy and pursuing work you find meaningful. It’s not clear that we need to precisely define utility in order to pursue such a varied utilitarianism as this model proposes.
  • People who think about utility maximization often leave out economic growth as an avenue for increasing total utility, but it is likely the most important (if pretty abstract) lever. That being said, most private sector jobs don’t increase GDP all that much. Entrepreneurs, technologists, engineers, consultants scaling innovations and financiers efficiently allocating capital should likely focus their time on driving productivity growth and donating their financial resources.

Like with a Laffer Curve, the debate is where the average and marginal “ethical tax rates” should be. It seems very apparent given the level of suffering in the world that the average rate is still too low, but that we’ve been steadily raising it—mostly through economic growth and the creation of international norms against war.

As for my ethical tax rate, I’m still certain mine is above my current contributions to utility maximization, but clearly not at Singer-esque rates.

Let’s Not Count Trump As A Businessperson In Government

We Should Wait for a Fortune 500 Executive

The lack of Fortune 500 C-level executives in US government is striking. If you exclude finance and oil and gas (FOG), it’s even more bizarre given how high status legislative posts and executive branch positions are, and worrisome given their proven effectiveness in private sector roles. I’m not sure if their talents and perspectives would lead to better outcomes, except for the gut instinct that smart outsiders often contribute a lot. At the very least, we should experiment more than we do. Unfortunately, Donald Trump and his band of private sector sycophants have probably soured people on this idea for a generation.

The presence of businesspeople in government most often takes the shape of people who have run a closely held family business. This does not represent the experience in navigating complex markets, operations and supply chains–to say nothing of acting ethically in the eyes of shareholders–that VPs or above in F500s have.

The exceptions to this strange scarcity of businesspeople in government are transplants from FOG industries that are especially prone to regulatory capture, extractive businesses, who see global commerce in a pretty warped fashion AND don’t experience the same competitive pressures for talent, so their good old boys clubs are still functioning quite well. Additionally, both industries (O&G moreso) see the world as more zero-sum than most and thus executives leaving those firms are less likely to look for Pareto improvements–we can see how this thinking plays out. Note, I’d much rather have someone from Goldman or Exxon than someone that ran a family business semi-successfully, but the FOG examples we have don’t represent either the level of talent or quality of perspective you would get from a VP from–say–a multinational CPG firm.

The worldview of a CPG executive would be dramatically more data-driven and meritocratic than FOG. In both dealing with nations, firms and people, the CPG executive would recognize that short term prejudicial treatment of industry or people would long term hurt the our firms competitiveness, our economy, and by definition, the global economy.

They would understand that diverse workforces perform better because you are in fact more discriminatory, you discriminate explicitly based on talent rather than implicitly on irrelevant factors. As knowledge workers become ever more central, it’s bizarre not to do this. Compared to a privately held firm leader, public firms require internal and often external coalition building to get anything done, experience that could plausibly translate to legislative and diplomatic prowess. Experience negotiating up and down the value chain would necessarily provide insight into both firm-level decision making and how trade really functions rather than abstract macro-level understandings (or misunderstandings).

 

I’m not making a claim that the outcomes of drawing corporate talent into governing roles would be definitively positive, just that it’s strange it doesn’t happen more often and the examples of financiers and oil and gas execs aren’t reflective of non-FOG leaders’ performance. Like most theories, I think we should test this one.

Unfortunately, the test date has probably been pushed back years, if not decades.