Tesla is a recurring brand in the Astral Codex Ten archive, appearing 24 times across 24 issues between January 28, 2021 and July 01, 2025. The archive places it in contexts such as "Your doctor makes $200,000/year and drives a Tesla"; "Developed by Tesla's self-driving-car division"; "Point B is Tesla, making revolutionary new environmentally-friendly cars". It most often appears alongside Elon Musk, Twitter, SpaceX.
- Article page
- Tesla
- Mention count
- 24
- Issue count
- 24
- First seen
- January 28, 2021
- Last seen
- July 01, 2025
Outbound links
- http://web.archive.org/web/20221104130431/https://stevekirsch.substack.com/p/1m-bet-rules
- http://web.archive.org/web/20221129133112/https://blog.rootclaim.com/rootclaim-accepts-500000-challenge-on-covid-vaccine-safety-efficacy/
- http://web.archive.org/web/20221224061743/https://www.skirsch.com/covid/SaarWilf.pdf
- https://agifriday.substack.com/p/turkla
- https://amzn.to/3PCbQQT
- https://archive.ph/pY4gF#selection-663.103-683.190
- https://link.springer.com/article/10.1007/s11191-011-9417-5
- https://web.archive.org/web/20230104080248/https://www.rootclaim.com/
- https://www.nytimes.com/2020/12/27/business/media/heather-cox-richardson-substack-boston-college.html
Issue trail
- Ontology Of Psychiatric Conditions: Taxometrics
- List Of Fictional Cryptocurrencies Banned By The SEC
- More Antifragile, Diversity Libertarianism, And Corporate Censorship
- Your Book Review: Progress And Poverty
- Open Thread 168
- Book Review: How Asia Works
- Carbon Costs Quantified
- Links For September
- 21
- Information Markets, Decision Markets, Attention Markets, Action Markets
- 22
- Highlights From The Comments On Billionaire Replaceability
- Prediction Market FAQ
- Even More Bay Area House Party
- 2023
- Most Technologies Aren't Races
- Book Review: Elon Musk
- Highlights From The Comments On Elon Musk
- Should The Future Be Human?
- Book Review: The Origins Of Woke
- Notes From The Progress Studies Conference
- My Takeaways From AI 2027
- Sorry, I Still Think MR Is Wrong About USAID
- Links For July 2025
Related pages
Source context
Suppose you make the US median income of $36,000/year. You live in an average American town where you see people of various social strata. Your doctor makes $200,000/year and drives a Tesla. Your sister is a single mother making $20,000/year, and needs food stamps to make ends meet. You probably think you have a good sense of class distinctions.
Driverify: Developed by Tesla's self-driving-car division. Cars mine Driverify with spare computing power while idling, and spend it bidding against each other for right-of-way if they arrive at a four-way stop sign at the same time (users can preprogram how aggressively their cars bid in these auctions). Compatible Teslas would also have fenders that send electrical pulses, transmitting data into the receiver fender of another car. If two Teslas got in a fender-bender, they could use their now-connected fenders to have the at-fault car recompense the victim by transferring an appropriate amount of Driverify.
What about Distribution 2? Now Point B is Tesla, making revolutionary new environmentally-friendly cars. In fact, let's say it's some super-Tesla that's even better than the real Tesla, plus their cars are affordable even for the poorest people. Point A is Yugo (or if you know a more modern example of a terrible car company, use that). Now which distribution would you rather have?
Distribution 2, definitely! You can buy the super-Tesla and be very happy, without ever worrying about Yugo. In fact, after a few years Yugo will go out of business, super-Tesla will dominate the market, and everyone will be very happy.
Diversity libertarianism is usually in favor of companies being allowed to do a wide range of things, because it ensures everyone will be well-served. If you assume an arbitrarily large number of uncorrelated companies, then whatever the thing you want is, there's at least one existing or easy-to-start company doing it. If Ford refuses to sell cars to black people, Toyota should see a profit opportunity and step in. If both Ford and Toyota ban blacks at the same time, some upstart like Tesla should step in. If Ford, Toyota, and Tesla all do it, some guy with a wrench who's always dreamed of making cars in his garage should notice a billion-dollar business opportunity lying on the ground, get seed capital from equally greedy investors, and solve the problem.
Although 2021 seems better than 1879 in absolute material terms, George's complaint still rings true: healthcare and higher education are increasingly unaffordable, inequality is as bad as it ever was, and The Rent Is Too Damn High. And even if all of these measures had improved as well, we still have to contend with a fundamental complaint: how can human civilization have piled up an amount of wealth best described as absolutely banana pants insane, and yetstill have poverty, oppression and cyclical recessions? Yes, greed, evil, and human nature will always be with us, but isn't it weird that we haven't eliminated these economic problems the same way we've eliminated Smallpox, Scurvy, and having to write your scathing polemics about Thomas Jefferson by candlelight with a goose feather? Giving the mic back to George, he closes the chapter with this haunting quote, first written 142 years ago: If there is less deep poverty in San Fran Francisco than in New York, is it not because San Francisco is yet behind new York in all that both cities are striving for? When San Francisco reaches the point where New York now is, who can doubt that there will also be ragged and barefooted children on her streets? I'll just leave this here: Number of Homeless Children in U.S. At All-Time High; California Among Worst States. I. Wages and Capital George insists sloppy terminology leads to sloppy thinking. Naturally, he spends an entire chapter beating words to death to correct this. The Meaning of the Terms Let's start with Wealth. The common usage, both then and now, is "anything with an exchange value." George doesn't like how this mixes dissimilar things. By George, what is wealth? Wealth is produced when Nature's bounty is touched by human labor resulting in a tangible product that is the object of human desire. Labor is required, but the amount and type doesn't matter - George offers the example of simply picking a berry off a bush as an act that transforms nature's gifts into human wealth. Note particularly that human desire is an important requirement of wealth; it doesn't matter how much work someone put into something, if it doesn't gratify human needs or desires in some way, it's not wealth. Speaking of human desire, let's talk about Value. Where does a thing's value come from? The prevailing theory of the day was the Labor Theory of Value which originated with Adam Smith and David Ricardo, which says that Labor is the source of value. The early formulations were a bit ambiguous, here's Smith in Wealth of Nations for instance: The value of any commodity ... is equal to the quantity of labor which it enables him to purchase or command. Labor, therefore, is the real measure of the exchangeable value of all commodities. So... is a thing's value how much labor it takes to make the thing, or how much labor someone's willing to exchange for the thing? Nowadays Labor Theory of Value is most commonly associated with Marx. Marx picks a lane and says the value of something is tied to the amount of "socially necessary labor" required to produce it. George goes the other way: It is never the amount of labor that has been exerted in bringing a thing into being that determines its value, but always the amount of labor that will be rendered in exchange for it. - Henry George, The Science of Political Economy, p. 253 In other words, "a thing's value is whatever someone is willing to pay for it." This is in line with the so-called marginal revolution (the movement, not the blog) and modern theories of value. Labor Labor is the exertion of human beings. It's possible to labor to no avail (try punching a concrete wall), but typically humans labor towards an end, such as gaining wealth. But whether or not we accomplish anything with our efforts, George calls them labor. Labor isn't just making things, by the way – it's also moving or exchanging them. Production Production is labor applied "to the production of wealth." You know, productively. This is all human exertion that isn't punching a concrete wall and rewards you for your efforts with something that fits the definition of wealth. Said wealth is the "product of labor." Wages whatever is received as the result or reward of exertion is "wages." No distinction here is made between blue-collar work and white-collar work – whether one is called "hourly pay" and the other is called "annual salary," George calls them both "wages." It doesn't matter whether you receive them from your boss, from customers, or from nature. If you do work and get something from it, you have received "wages." With those basics under our belt, let's circle back to Wealth: What are some examples of wealth? By George, Gold is wealth. Teddy bears are wealth. Tesla roadsters and candy canes and young adult vampire romance novels are wealth. The same goes for fish you've caught, deer you've hunted, and cool looking rocks you've picked up on your morning walk. The value of these things may differ, but as long as they're tangible, originate in nature, someone ever did a lick of work to make or acquire them, and a human being somewhere desires them for any reason, they're wealth. It gets a little clearer when we ask what isn't wealth. And by George, Money isn't wealth. Articles of gold are wealth because they're tangible things that have been dug up, crafted, and fulfill certain human desires. But paper currency, digital currencies, and other things that aren't inherently valuable but merely represent value are not wealth (outside of putting their physical articles in coin collections or making paper airplanes, and so forth). Now don't get the man wrong, these things are certainly valuable. They're just not wealth. They are certificates that represent claims on wealth. For any computer programmers in the audience, money is a pointer to wealth. Likewise Stocks and Bonds and other financial instruments are not wealth. These are also just claims on wealth. A creditor's title to Debt isn't wealth, either, it's just a claim on the debtor's (typically future) wealth. And, writing as he was not long after the Civil War, George points out that Slaves are not wealth either but, represent "merely the power of one class to appropriate the earnings of another class." Wealth, thus defined, is the terminal "ground truth" bits of the economy, and all the financial layers on top are fancy IOUs that just encode various claims on it. George offers a thought experiment to test if something is wealth: if you produce a pile of gold, fish, or Lego bricks, you've clearly increased the amount of wealth in the world. But if you produce a giant pile of IOUs that just records who owns what and who owes what to whom, it doesn't matter how many of them you pile up or how long the chains of ownership get, you still haven't increased the amount of real wealth in the world. Again, this isn't saying the IOUs aren't valuable, they are. But they're only valuable because they ultimately point to real wealth. If you magically transported everyone over to a hypothetical Earth 2, carrying over all of Earth 1's money and financial instruments but none of Earth 1's tangible wealth, the value of all those IOUs would instantly evaporate. Now what about digital goods? Leaving things like Bitcoin aside for the moment, let's consider the case of a digital image file: By George, this is wealth. Digital though it may be, it's physically encoded on a storage device somewhere, and is thus tangible (it's not a pure abstract concept flitting about in Platonic heaven) and has its origins in nature. Human exertion built the computer that encodes it, and clicking the button that saves it to disk or displays it on your screen is labor. Finally, it directly satisfies human desires (mine, at the very least). It's value may be negligible, but it's wealth. By contrast, the digital bit sitting in some database that says I own a particular eBook or mp3 is just a digital IOU – a claim on the wealth that are the physical bits on my local storage device or remote server that digitally encodes the files. The fact that digital files don't seem particularly physical, and that they can be trivially and endlessly copied, doesn't mean that Henry George, magically transported to today, wouldn't regard them as wealth. Okay, so is there anything else that's not wealth? By George, Bitcoin isn't wealth, in case you were wondering. It's just a (very fancy) financial instrument, a digital claim on wealth. And that goes for most crypto assets – a token on some blockchain that says I own a painting by Banksy is just another IOU, regardless of the technical sophistication of its distributed trustless ledger. What about intellectual property? Copyrights, patents, and trademarks are all different forms of Monopoly – the exclusive, government-granted legal right to do a particular thing (publish a certain book, manufacture a certain product, use a certain name in business, etc). The exclusive right to do or produce a thing, valuable as it may be, is not the thing itself. By George, Monopoly is not wealth. But there is something big that is wealth – the C-word. Capital. By George, Capital is "wealth devoted to procuring more wealth", and it's the next thing he insists everyone is hopelessly confused about. He quotes Adam Smith, agreeing with him thus far: That part of a man's stock which he expects to afford him revenue is called his capital. ...and also gives us a short etymology lesson on the origin of the term: The word capital, as philologists trace it, comes down to us from a time when wealth was estimated in cattle, and a man's income depended upon the number of head he could keep for their increase. ("Per capita" being the Latin for "by head") By George, all capital is wealth, but not all wealth is capital. George notes capital is often described as being "stored up labor", and endorses this view – but what it really means, is capital is stored up production. It's not literally the labor that's stored up but the wealth generated by it, set aside and then dedicated to the purpose of getting more wealth. George insists that it is the owner's intention that transforms wealth into capital. If you buy an old factory to throw parties in for your hipster friends, it's just wealth. But the minute you decide to put it to work to make something useful (or start charging your hipster friends a cover charge at the door), it becomes capital. George therefore further insists that a laborer's daily bread and the clothes on their back do not count as capital, because a person has to eat and wear clothes whether they work or not. The laborer's tools (and arguably their steel-toed work boots) can however be counted as capital, because their purpose is to assist the laborer in getting more wealth by working for wages, and the laborer wouldn't acquire, use, and maintain those things otherwise. George has more exclusions: We must exclude from the category of capital everything that may be included either as land or labor. Human exertion (labor) by itself can never be capital. The products of human labor become capital when they are stored up and set to the purpose of getting more wealth. To muddle this distinction defeats the point of having separate terms for those things at all, and prevents us from reasoning meaningfully about how they relate to one another. Labor is not capital, and neither is labor by itself wealth, it produces wealth – and if it ain't wealth, it ain't capital. And that brings us to land. Land, land, land. By George, land is not wealth. And it's definitely not capital. The unique specialness of land is George's entire schtick and the very core of his philosophy. The term land embraces, in short, all natural materials, forces, and opportunities That means that a field or a meadow is "land", as is a mountain. But so are the fish in the sea, the clouds in the sky, veins of gold in the earth's crust, and the oil deep under ground. These things aren't yet wealth – not until human beings both a) desire them and b) touch them with labor. So... land is not wealth. But... how come? I mean, look: land is tangible, it "comes from nature", humans are always productively applying their labor to it, and it certainly seems capable of gratifying human desires. George sees this reasoning as understandable, but insists it's the root mistake that leads other political economists astray – because for George, land just is nature itself. Come again? Land is the ultimate source of all wealth, but it's most useful to think of it as a generator, acompletely separate entity from the wealth that human labor and desire draws from it. Players of Magic: the Gathering and Settlers of Catan should already have a solid grasp of this distinction: In modern times, George would grant electromagnetic spectrum and orbital real estate for satellites the same status of "land" that already applies to farmland and terrestrial real estate. We don't even need to speculate about whether he'd attach this status to sunlight because he straight-up predicted solar power: Even the lack of rain which makes some parts of the globe useless to man, may, if invention ever succeeds in directly utilizing the power of the sun's rays, be found to be especially advantageous for certain parts of production. (That's from Protection or Free Trade, footnote 19) The important thing to grasp about land is that it comes before everything humans do or make, and is itself a thing no human can make. Okay, smarty-pants, what about the Netherlands? They've been making land for centuries! Well, land in the Georgist sense doesn't refer simply to "dry land", but also the sea bed, the oceans, and the skies above. The "new land" in the Netherlands counts as an improvement to land that already existed. The seabed was always there, but by filling it in so you can walk around on it, now it's more useful to us (George has a lot to say about improvements to land, which we'll get to later). Okay, what is land not? nothing that is freely supplied by nature can be properly classed as capital By George, land is not wealth. And since it's not wealth, it's not capital. Okay, we get it. Land is very special to Mr. George and we must never put it in the same category as wealth, labor, capital, wages, production, money, or anything else. Why exactly is this so damn important? Well, by George, if you treat land the same way you would a bar of pig iron, an hour of work, or a dollar bill, before you know it you'll get poverty paradoxically advancing alongside progress, inexplicable bouts of industrial depression, literal genocides and holocausts (he's dead serious about this), and The Rent Being Too Damn High. With terminology now firmly established, George moves on to the relationship between wages and capital. 3-for-1 special on Wages, Capital, and Labor I'm condensing three chapters here because they all deal with the same basic thing. The question George wants to answer is: Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living? The conventional wisdom of George's time is that wages are governed by a fixed ratio between the number of laborers and the amount of capital devoted to their employment, because "the increase in the number of laborers tends naturally to follow and overtake any increase in capital." So it doesn't matter how much capital you throw at employing workers, it'll just attract even more workers splitting it up, so although wages might temporarily wiggle a bit in the long term they'll always settle back to a "natural" minimum. (As we'll see in the next section, this argument stems from Malthusianism). George spends some time methodically poking holes in the theory (it's predictions don't line up with the facts he observes), and then sets out to prove his replacement theory (emphases mine): wages, instead of being drawn from capital, are in reality drawn from the product of the labor for which they are paid. He pulls a G.K. Chesterton to make his point: During the time [the laborer] is earning the wages he is advancing capital to his employer, but at no time, unless wages are paid before work is done, is the employer advancing capital to him. He starts by identifying the source of confusion: Because wages are generally paid in money, and in many of the operations of production are paid before the product is fully completed, or can be utilized, it is inferred that wages are drawn from pre-existing capital I mean, the old theory seems sensible: the employer has capital and uses it to pay wages. But however you slice it, capital's investment gets paid back by production when it takes its cut, so does it even make a difference to talk about where wages are "drawn" from? Value goes out, value comes in, isn't it all a wash? By George, it isn't: in the old theory, because capital "must come first", it follows that "industry is limited by capital - that capital must be accumulated before labor is employed", which leads to a reductio ad absurdum – We are told that capital is stored-up or accumulated labor – "that part of wealth which is saved to assist future production." If we substitute for the word "capital" this definition of the word, the proposition carries its own refutation, for that labor cannot be employed until the results of labor are saved becomes too absurd for discussion. George anticipates the following rejoinder – Well, when we say 'labor is paid out of capital' we don't mean it as an absolute statement for all stages of human development (or else we have a chicken-and-the-egg problem and civilization could never have begun), we just mean it applies to, say, every civilization that's left the stone age. George will have none of it and spends three entire chapters relentlessly beating to death the idea that wages are drawn from capital instead of from production. He starts with the simple case where wages are paid in the form of direct, concrete wealth, then moves on to the more complex case where people are paid in money and other instruments. Laboring for wages: Imagine a fishing village where nobody cooperates – each person digs their own bait and catches their own fish. Then they discover labor specialization and realize they can catch more fish together if one specializes in digging and the other in catching. So the digger digs, the catcher catches, and they share the fish. The digger really contributes as much to the catch as the one who physically pulls the fish off the hook even though the digger never directly "caught" a fish, and the fish he gets for his work is directly paid out of his contribution to the total production. Later, our fisherfolk invent canoes, and one stays home making and repairing canoes. This increases the haul of the digger and catcher, and the canoe-er gets paid out of her contribution to the increased production. And so it goes as society continues to advance. The work the specialist puts in causes more fish to be caught, and that person's wages is drawn from the growing pile of fish. As George puts it: "Earning is making." George gives another example: If I take a piece of leather and work it up into a pair of shoes, the shoes are my wages – the reward of my exertion. Surely they are not drawn from capital – either my capital or any one else's capital – but are brought into existence by the labor of which they become the wages; and in obtaining this pair of shoes as the wages of my labor, capital is not even momentarily lessened one iota... As my labor goes on, value is steadily added, until, when my labor results in the finished shoes, I have my capital plus the difference in value between the material and the shoes. And another: If I hire a man to gather eggs, to pick berries, or to make shoes, paying him from the eggs, the berries, or the shoes that his labor secures, there can be no question that the source of the wages is the labor for which they are paid. George goes on to say it doesn't matter if you're paid in money or directly in wealth, because the money is a direct claim on the underlying wealth. It also doesn't matter if you get paid on commission. Imagine a whaling ship where each crewman gets paid a share out of whatever the ship catches. When the ship sails back into port with a hold full of whale oil and bone, the crew gets paid in money, the owner simultaneously adds to his capital oil and bone. The crew's money directly represents their share of the concrete wealth that is the oil and bone. The owner's capital hasn't decreased, and the workers drew their wages directly from the production. So let's get to the point, Mr. George – wages aren't drawn from capital but instead from production. Great, let's grant that – so what? George hammers away at this because thinking wages are drawn from capital leads to a false conclusion, namely that "labor cannot exert its productive power unless supplied by capital with maintenance." "Maintenance?" Well, workers need food and clothing and they get paid by their employers, so you could imagine capital as a limiting factor on labor. But by George, food and clothing isn't capital, it's just wealth, as we said before. And with regard to wages, the point is that the employer always gets "paid" first, because the second the laborer produces value, the employer's capital increases: As in the exchange of labor for wages the employer always gets the capital created by the labor before he pays out capital in the wages, at what point is his capital lessened even temporarily? Okay, but what if I'm just a terrible businessman and I pay somebody $500 an hour to smash Ming vases, then sell the fragments as aggregate to a construction crew for a few pennies a pound, all at a tremendous loss? Surely then the laborer's wages must be drawn from my capital, because there's not enough productive value generated by the labor to draw them from! George says okay, sure, but only because I'm an idiot and will soon be out of business: Yet, unless the new value created by the labor is less than the wages paid, which can be only an exceptional case, the capital which he had before in money he now has in goods – it has been changed in form, but not lessened. Fair enough, Mr. George, but what if I'm building some enormously expensive multi-decade project, like a dam or a nuclear power plant or a cathedral? The kind of thing we call a "capital-intensive" project? What do you have to say to that? George points out that as laborers labor, they progressively add value to whatever they're producing. Take the case of a shipwright building ships for an employer – even if the boss can't sell a half-finished ship, it still holds value (for one, it costs less to finish a half-finished ship then no ship at all). And with every stroke of the laborer's work, the employer who owns the shipyard gets an incremental increase in his stock of capital. It is not the last blow, any more than the first blow, that creates the value of the finished product – the creation of value is continuous, it immediately results from the exertion of labor. A pedant would point out that the "last hit" that finishes the product which makes it ready for market adds disproportionate value, but George's point is just to establish that value is continuously created, and doesn't magically come into being allat once right at the end. George further points out that if you look at things like agriculture you'll see the market directly acknowledging his theory: As a plowed field will bring more than an unplowed field, or a field that has been sown more than one merely plowed... It is tangible in the case of orchards and vineyards which, though not yet in bearing, bring prices proportionate to their age. George freely admits that capital can be required for certain kinds of work, but he disagrees with what its purpose is. It's not a pool that wages get paid out of. He goes on for another chapter on "The Maintenance of Laborers Not Drawn From Capital" but I think we can safely skip it and move on. TL:DR – George hammers to absolute death the idea that Laborers derive their own maintenance (food/shelter/clothing/etc) from their wages, with George insisting it is drawn from production and... you guessed it, not from capital. At least some of George's ideas will not seem so radical to modern readers (especially those already critical of capitalism or neoclassical economics), but it's important to understand that at the time almost everything he was saying was considered deeply radical and shocking. Capital was the fundamental driving force of the economy and labor was utterly dependent on it, and the Malthusian theory of overpopulation was the accepted explanation for why wages were low and workers were starving. Political Cartoon literally demonizing Henry George – Puck magazine Oct. 20, 1886 The Real Functions of Capital Okay, Mr. George. You've spent three whole chapters beating me over the head with what the functions of capital aren't. So what are the functions of capital? Capital "increases the power of labor to produce wealth." How? By enabling labor to apply itself more effectively (power tools go brrrr)
Inline links: absolutely banana pants insane, Number of Homeless Children in U.S. At All-Time High; California Among Worst States, Labor Theory of Value, marginal revolution, blog, https://substackcdn.com/image/fetch/$s_!szbX!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F02e3f9db-5fe4-4a1b-bd19-5a13bac84aa1_500x500.png, https://substackcdn.com/image/fetch/$s_!cDFG!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F28ef979e-83da-4d1b-8d81-5f08fd6103a5_516x600.png, https://substackcdn.com/image/fetch/$s_!PVE6!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F68f4f7f0-2016-4fe9-9996-879a3c92db74_516x600.png, Protection or Free Trade, https://substackcdn.com/image/fetch/$s_!aeD5!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F348d4d74-8c98-42e6-b5f7-7bd79b30a816_960x611.png
For a dose of cold water, see Investing in Technological Revolutions by Ben Felix. Remember, it's not how much a sector grows that makes it a good investment so much as how much it grows relative to what you paid for it. The highest return on investment stock of all time hasn't been Google, or Apple, or Tesla, or any other tech company you can name. It's Altria (MO) the cigarette company - annual returns have averaged 20.68% for nearly 50 years. Over half a century of innovation, hype, the Space Race, hype, the IT Revolution, and hype, the best returning company was in an industry everyone knew was on its way out (tobacco) - but which was on its way out far slower than everyone expected. That meant while everyone was dumping it, you could pick up the stock for peanuts relative to how much money the company was still making, and collect decades of dividends when the money flow didn't dry up.
Imagine having to start your own car company in Zimbabwe. Your past experience is "peasant farmer". You have no idea how to make cars. The local financial system can muster up only a few million dollars in seed funding, and the local manufacturing expertise is limited to a handful of engineers who have just returned from foreign universities. Maybe if you're very lucky you can eventually succeed at making cars that run at all. But there's no way you'll be able to outcompete Ford, Toyota, and Tesla. All these companies have billions of dollars and some of the smartest people in the world working for them, plus decades of practice and lots of proprietary technology. Your cars will inevitably be worse and more expensive than theirs. Every country that's solved this problem and started a local car industry has done so by putting high tariffs on foreign cars. Locals will have to buy your cars, so even if you're not exactly making a profit after a few years, at least you're not completely useless either.
31. https://www.tesla.com/ns_videos/tesla-impact-report-2019.pdf . This seems bizarrely low, but https://www.bloomberg.com/news/articles/2019-04-17/tesla-s-first-impact-report-puts-hard-number-on-co2-emissions seems to confirm that it's much less than other companies'.
As space-based manufacturing capability is built and expanded, it is quite possible that no terrestrial presence will be required to maintain the space-based side of the ISP. Tesla has a history of releasing patents into the wild; it is not an inconceivable future in which anyone who wishes can construct a Starlink-compatible satellite terminal without approval from the local regulatory bodies. The resultant information hyperloop is uncensored, accessible to all who try, with no controls on content or expression save what the user decides to implement for themself
AFAIK, right now SpaceX is worth about $100 billion. But the median estimate for 2030 is $500 billion. An 8% rate of return over nine years is ~100%, so even in a great economy the average company will “merely” double by then, whereas SpaceX will quintuple. Seems bold to say a company is undervalued by a factor of >2. I guess this doesn’t technically violate any theorem about stock markets or prediction markets because SpaceX is a private company. Maybe $100 billion is its valuation by normal private investors, and $500 billion is what the sort of people who buy Tesla stock would give it, and Metaculus is siding with the Tesla buyers? Still, take it public!
Inline links: is worth about $100 billion
But we should expect it to be very rare! Consider: couldn’t you make a lot of money right now by shorting Tesla and then assassinating Elon Musk? Or by shorting Boeing and bombing a plane? Or by going long on train companies, and bombing a plane? Or by going long on diamonds, and then bombing a diamond mine? Or by shorting Bitcoin, and lobbying for more punitive crypto regulations?
Every investment is also an action market! In general, we control this tendency through normal criminal laws. People don’t assassinate Elon Musk because then they’d be investigated for murder. Even if they manage to avoid leaving any fingerprints or whatever, police would probably still go after the guy who put all of his money into Tesla shorts the day before.
Is this just some crazy attempt to build hype, like when Elon Musk says the next Tesla definitely will have full-self-driving ability? I don’t think so. Saudi Crown Prince Mohammed bin Salman is obsessed with Neom and very vain; I don’t think he would deliberately promise impossible things knowing that he will be embarrassed later when they don’t work out (and he says it will be done by 2030, so we’ll know the results relatively soon). Also, the government has earmarked $500 billion to $1 trillion for the project - around the GDP of Sweden - which sounds kind of like being serious. Also, they’ve already started on important Saudi construction preliminaries, like murdering the people who previously lived in the area. Also, they’ve already set up on-site camps for the construction workers (source):
Inline links: murdering the people who previously lived in the area, source
That's the part Scott and so many others miss. It isn't "lone genius has a clever idea, hires a bunch of people to Make It So under his management, and collects his billions". It's an iterative process, with each step increasing revenues, increasing costs, and increasing benefits. The no-billionaires version means SpaceX exists, but it never built anything bigger than the Falcon 5. Tesla exists, and produces a few thousand Roadsters a year. Amazon exists, and sells books. Apple exists, and sells Macintosh desktop computers.
If we try this plan, then looking back on it ten years from now, will we agree it was a mistake? Prediction markets give us a way to get accurate and canonical answers to questions like these, and to short circuit the usual discussions about how biased different information sources are. See below for some clever, more exotic ways we can use prediction markets. 4. What are the most common objections to prediction markets? These are various objections, some wrongheaded, some true but nonfatal. There are many of them, making this section very long - you might want to skip over any objections you’re not worried about. 4.1: Would prediction markets be ruined by insider trading? That is, suppose there is a market on whether President Biden will resign before the end of his term. President Biden has special knowledge of this, so he could bet on the true outcome and make a lot of money unfairly. He could even change his behavior (eg resign at an unexpected time) just to make more money. Isn’t this unfair? One answer is that normal markets (eg the stock market) face these same problems, but manage them by making insider trading illegal. These laws don’t always work perfectly, but they work well enough that most people are happy to buy stocks. Another answer is that, while this is bad for other investors, it’s not bad for the accuracy of prediction markets, or their use in creating unbiased social consensuses. In fact, knowing that President Biden is insider-trading on a “Will President Biden resign?” prediction market should only increase your confidence in it getting the right answer! This is slightly too rosy, because if insider trading is bad enough for other investors, they might just not trade. This would be a partial effect: investors would be willing to overcome their fear for a big enough payday, meaning that concerns about insider trading probably would increase the likelihood of persistent small mispricings while still not allowing bigger ones (with the exact size depending on how frequent the insider trading was). It’s unclear whether this negative effect would be bigger or smaller than the positive effect from insiders having more information, so in different situations the market might end up either more or less accurate. Overall, economists are split on whether insider trading makes markets more or less accurate. Commodities markets don’t really have insider trading laws right now, and seem to be about as accurate as anything else. I hope prediction markets will experiment with different insider trading rules, and the ones that best satisfy all participants and create the most accurate results will win out. If for some reason this doesn’t work, I don’t expect it to make too much difference either way. 4.2: Would prediction markets encourage harmful or illegal activities? What about the risk of insider trading by committing harmful / illegal acts? That is, could President Biden’s doctor decide to poison him, then make money when he has to resign due to ill health? I think the strongest evidence against is that this basically never happens in stock markets. Tesla stock would plummet if Elon Musk died or resigned, but nobody realistically worries that Musk’s doctor will short Tesla and poison him. Lots of corporations’ stocks would sink to zero if you burned down their offices and factories, but nobody shorts them and then commits arson. Probably this is because there are laws against doing harmful and illegal things, and people have decided that stock market gains aren’t worth breaking the law and getting punished. Since prediction markets have only a tiny fraction of the amount of money that stock markets do, probably people won’t consider it worthwhile to commit harmful actions to manipulate them either. If you were going to murder someone to profit off a market, who would you rather kill: a US politician (the PredictIt market on the presidential election has a volume of about $600,000)? Or a Fortune 500 CEO (whose companies might have market caps in the hundreds of billions)? 4.2.1: What about prediction markets in very specific harmful or illegal activities? I guess if you created a market in “Will someone burn down the 7-11 on Main Street tomorrow at 3:32 AM?”, then bet a lot of money, then did it, that would be bad. I think realistically nobody would bet against you on that. But probably prediction markets should avoid hosting markets on these very specific bad things, just to make sure. 4.3: Would prediction markets give rich people more power? That is, suppose we used prediction markets to assess socially important questions like “will the climate change by such-and-such a number of degrees by 2030?” It would be bad if rich people could manipulate our social consensus on this. But you move prediction markets by buying shares, and rich people can afford more shares than poor people. So doesn’t this mean that rich people can manipulate how concerned we are by global warming? No. See 3.2 for the general reasons why it’s very difficult or impossible to successfully manipulate a prediction market. These reasons apply to rich people too. Suppose a rich person spent $100 million to buy NO shares in “will the climate be warmer in 2030 than today?”, pushing the market’s implicit chance of global warming down to 1%. That means if there is global warming, you could multiply your money by 100x by buying YES. I would immediately invest $10,000 in this market, so that I could get $1 million back in 2030 and retire rich. My $10,000 isn’t going to be enough to fully move this market all the way back - we already said the rich person spent $100 million manipulating it. But “you can get a free $1 million quickly with no downside at an evil rich person’s expense by correcting an obvious misconception about global warming” sounds like the sort of thing that could make it to the front page of Reddit (to put it lightly). I think more than enough people would learn about this to fully correct the mispricing. Is there any amount of money that could successfully manipulate a market? I think the answer is that you need to have more money than the sum total owned by everybody else in the world who wants to make $1 million quick. And at the limit, there’s always Goldman Sachs - who watch financial markets very closely, definitely want to make $1 million quick, and have a lot of money. So I think the most honest answer to this objection is: if you are an evil rich person reading this FAQ, then it will definitely work for you. Please sink $100 million into reducing a prediction market’s chance of global warming to 1%. And make sure you tell me first, so that I can fully marvel at your evil genius. This will work great for you and nothing will possibly go wrong. 4.3.1: But wouldn’t the subtle biases of rich people (which they might genuinely believe) still affect the market more, since they have more money? No. See 3.3 for the general reasons why we should expect prediction markets to be free from subtle biases which people genuinely believe. These reasons apply to rich people too. Suppose rich people have subtle biases which make them wrong more often than poor people. And suppose rich people (wrongly) believe global warming is 75% likely, but poor people (correctly) believe it’s 99% likely. This just reduces to the Nate Silver situation earlier, with poor people playing Nate Silver. The aggregated opinion of poor people is “an expert” which is right more often than the markets. It’s easy for someone to notice this and get rich quick (in expectation) by betting on what poor people think. Since lots of people can easily notice this and want to get rich quick, eventually they will correct the mispricing. Even if rich people have so much more money than poor people that no group of poor people, however large, can ever correct a rich person mispricing, eventually some smart rich person will hit upon this strategy themselves. If no individual rich person does it, Goldman Sachs will definitely do it. 4.3.1.1: What if both rich people and poor people have biases, and neither one is consistently more right than the other? Won’t the market still reflect rich people’s biases rather than poor people’s? Not if it’s possible for anybody to notice these biases and correct for them. Treating the aggregate opinion of poor people as an expert was just one example. If the winning strategy is something like “trust rich people on financial questions, poor people on environmental questions, and the point exactly halfway between them on social questions”, then whoever discovers that strategy can get rich quick. The more often people use prediction markets, the easier it should be to detect strategies like these. 4.4: Aren’t prediction markets worse than superforecasting? “Superforecasting” refers to a variety of forecasting methods similar to those pioneered by Philip Tetlock and the Good Judgment Project. Typically, they would do something like: Ask many smart people to give probabilistic answers to a very well-specified question
Inline links: economists are split
“Shorting is barbaric. Think how nice and simple going long is. And then with shorting you have to borrow from some specific person for some specific amount of time, and deal with margin calls and short squeezes and all that garbage. We asked ourselves - how can we make shorting as simple as going long? Antistocks are the answer. A Tesla antistock is a certificate which obligates you to pay us the value of a Tesla stock dividend each year.”
“They don’t! We pay them X dollars to take it! Then when Tesla goes down, they pay someone else less than X dollars to take it from them, and keep the profit.”
“And you think people will prefer this to just shorting Tesla the normal way?”
Taking Stock Prediction market users really want stocks. “Stock” in this sense means an instrument that measures the status of a person, group, or idea. When their status goes up, the stock goes up. When their status goes down, the stock goes down. It feels like a natural way to bet on things like “I’m bearish on Elon Musk and think everyone else is overestimating him.” It’s hard to turn this vague idea into a real financial instrument. You could try tying it to their Twitter follower count, or Google search trends, or net worth, but none of these exactly track “status”. If Musk commits murder in broad daylight, his search volume will go up, his Twitter follower count will stay about the same, his net worth might not be affected, but his status will have gone way down. The current solution is to make no effort whatsoever to moor stocks to the real world and just hope they work out. This could work! It’s kind of like a Ponzi scheme or crypto token. Some big influencer endorses MoonCoin, and MoonCoin goes up, because MoonCoin has gained status, which means more people will want to buy it, because it’s even more likely that more people will want to buy it later. Crypto tokens keep a fig leaf of “and maybe in the cyberpunk future when all transactions everywhere have switched to crypto this will really pay off”, but over time that fig leaf became increasingly threadbare, and a fun low-stakes instrument like Manifold stocks might do fine without it. But the 0% to 100% prediction scale is a bad match for stocks. If Elon started at 50% in 2000, then when Tesla made it big he surely should have doubled. And that brings him up to 100% and leaves nowhere for him to go. Also, people who bet on Elon Musk in 2000 might be miffed that their prescient choice only doubled their money. Probably the solution is some kind of cardinal number. But which one, and at what scale? Again, the lesson from crypto is that maybe it doesn’t matter. Just start at 10 or something or something and see where it ends up. Manifold leadership isn’t totally resigned yet to having stocks be meaningless Ponzi schemes. If you have a better idea for how to run stocks, leave it in the comments here and they’ll probably see it. CFTC vs. PredictIt Update So far it’s not clear if this means indefinite normal operation, or if they’ll spend the extra time trying to wind existing markets down. The overall chance of them winning their lawsuit remains unchanged at around 25%. PredictIt has gotten some sympathetic news coverage, including from the Washington Post. In the process, the Post tried to get some clarity on what terms of the no-action letter PredictIt violated, apparently without success: @CFTC why they're shutting PredictIt down. They give no real answer, just as in the original withdrawal letter. Closest thing we have to an answer is that they don't want other prediction markets. But why? No sense here at all. washingtonpost.com/lifestyle/2023… ","username":"RichardHanania","name":"Richard Hanania","profile_image_url":"","date":"Tue Jan 24 18:12:59 +0000 2023","photos":[{"img_url":"https://pbs.substack.com/media/FnQbawZaYAAKRws.jpg","link_url":"https://t.co/zeKhe8sjnT","alt_text":null}],"quoted_tweet":{},"reply_count":0,"retweet_count":8,"like_count":39,"impression_count":0,"expanded_url":{},"video_url":null,"belowTheFold":true}" data-component-name="Twitter2ToDOM"> @StephenPiment I'm flat appalled the CFTC said \"you violated terms\", but won't tell anyone, @PredictIt included, which ones, and then has big enough balls to try to get the judge to dismiss PI's \"shotgun\" defense. Um, with no info what other case COULD they make?\n","username":"kmett","name":"Edward Kmett","profile_image_url":"","date":"Sun Nov 27 19:01:29 +0000 2022","photos":[],"quoted_tweet":{},"reply_count":0,"retweet_count":8,"like_count":21,"impression_count":0,"expanded_url":{"url":"https://www.bonus.com/news/cftc-predictit-hearings-coming/","image":"https://substack-post-media.s3.amazonaws.com/public/images/8d5a1d5e-49ee-4294-84cd-eb5a4259bbc3_1200x800.jpeg","title":"Hearings Coming Soon in PredictIt Lawsuit, CFTC Asks to Dismiss","description":"The CFTC is seeking to have the PredictIt lawsuit dismissed, while the plaintiffs want the case fast-tracked due to the shutdown deadline.","domain":"bonus.com"},"video_url":null,"belowTheFold":true}" data-component-name="Twitter2ToDOM"> I guess they’ll have to give some kind of explanation during the hearing, right? Related: Richard Hanania has an article on How To Legalize Prediction Markets. The actual advice isn’t very surprising, and mostly boils down to “write letters to the government officials in charge of this”, but like other people I learned something new from the details: In the United States, prediction markets are, with a few minor exceptions, against the law. If you don’t have a legal background, you might think that means that Congress at some point considered the issue, decided people shouldn’t be able to bet on real world events, and passed a law to that effect, which was then signed by the president. But this is not what happened. As with most things, Congress has never directly considered the matter. Rather, prediction markets are illegal due to the discretion of a government agency called the Commodity Futures Trading Commission (CFTC). Why does it have this right? And on what basis has it made prediction markets illegal? […] In 1936, Congress passed and FDR signed the Commodity Exchange Act. In 1974, Congress created the CFTC to enforce the original law, which has been amended on multiple occasions over the years. The CFTC has authority to regulate what are called “derivatives markets.” A derivatives contract derives its value from some kind of underlying asset or benchmark in the real world. The thing to understand about derivatives is that the baseline is that they’re legal. That’s why you can “bet” on the price of oil through a futures contract. The CFTC wasn’t created to ban derivative markets, but to regulate them, though this can involve prohibiting certain kinds of markets altogether. Current law includes the following provision on event contracts, [banning]: activity that is unlawful under any Federal or State law;
Who “won” the automobile race? Karl Benz? Henry Ford? There were many steps between the first halting prototype and widespread adoption. Benz and Ford both personally got rich, their companies remain influential today, and Mannheim and Detroit remain important auto manufacturing hubs. But other companies like Toyota and Tesla are equally important, the overall balance of power didn’t change, and today all developed countries have automobiles.
Musk creates cognitive dissonance: how can someone be so smart and so dumb at the same time? To reduce the dissonance, people have spawned a whole industry of Musk-bashing, trying to explain away each of his accomplishments: Peter Thiel gets all the credit for PayPal, Martin Eberhard gets all the credit for Tesla, NASA cash keeps SpaceX afloat, something something blood emeralds. Others try to come up with reasons he’s wholly smart - a 4D chessmaster whose apparent drunken stumbles lead inexorably to victory.
Elon Musk: Tesla, SpaceX, And The Quest For A Fantastic Future delights in its refusal to resolve the dissonance. Musk has always been exactly the same person he is now, and exactly what he looks like. He is without deception, without subtlety, without unexpected depths.
The main answer to the paradox of “how does he succeed while making so many bad decisions?” is that he’s the most focused person in the world. When he decides to do something, he comes up with an absurdly optimistic timeline for how quickly it can happen if everything goes as well as the laws of physics allow. He - I think the book provides ample evidence for this - genuinely believes this timeline2, or at least half-believingly wills for it to be true. Then, when things go less quickly than that, it’s like red-hot knives stabbing his brain. He gets obsessed, screams at everyone involved, puts in twenty hour days for months on end trying to try to get the project “back on track”. He comes up with absurd shortcuts nobody else would ever consider, trying to win back a few days or weeks. If a specific person stands in his way, he fires that person (if they are an employee), unleashes nonstop verbal abuse on them3 (if they will listen) or sues them (if they’re anyone else). The end result never quite reaches the original goal, but still happens faster than anyone except Elon thought possible. A Tesla employee described his style as demanding a car go from LA to NYC on a single charge, which is impossible, but he puts in such a strong effort that the car makes it to New Mexico.
1: Comments From People With Personal Experience 2: ...Debating Musk's Intelligence 3: ...Debating Musk's Mental Health 4: ...About Tesla 5: ...About The Boring Company 6: ...About X/Twitter 7: ...About Musk's Mars Plan 8: ...Comparing Musk To Other Famous Figures 9: Other Comments 10: Updates
Some more thoughts after sleeping on this review. It's very strange... so being an automotive engineer for several of those "staid, evil" Big3 companies, one gets a very direct view of Tesla and how they have been over the years.
Something that probably ought to get talked about more: for large companies, we are among the first few hundred to buy the newest hotness from our competitors. I saw a Model X Founders' Edition fully disassembled on tables, with the welds drilled out and sectioned so we could see every single part. I've done side-by-sides with Teslas and various other vehicles, where we literally will put our part and the competitor part next to each other in a giant warehouse (all of them for a series of vehicles) and do side-by-sides. When you do that, abstract questions of genius kind of fade to the background, and you get to actual real world questions like "is this part good? Is it better than mine? What is it trying to do? How does it try to do them? What does this say about the engineer's constraints? What does this say about the company organization behind it? Where are the organizational seams? Where are the hard points that could not be changed? How do those reflect on my company, my program, what we're trying to do and the things we have to work around?"
Tesla CEO Elon Musk and Google cofounder Larry Page disagree so severely about the dangers of AI it apparently ended their friendship.
Therefore, every business owner needs to monitor their employees for jokes, political comments, flirtatiousness, and take action against any offenses. Hanania has several complaints here. First and most legibly, it (say it with me) gets taken too far. Volokh lists a large number of [examples of things that have been found to be] evidence of a hostile work environment: signs with the phrase “men working”; “draftsman” and “foreman” as job titles, pictures of Ayatollah Khomeini and a burning American flag in a cubicle; an ad campaign using samurai, kabuki, and sumo wrestling to refer to Japanese competition; jokes of a sexual nature not targeted at any particular person; misogynistic rap music […] even terms like “great view” and “walk-up” have been cited as potentially trying to exclude blind people and those in wheelchairs. And In a 2015 and 2016, a black father and son named Owen Diaz and Demetric Di-az2 [sic] worked at a Tesla plant. They sued the company for racial discrimination, with the father’s claims alone making it to trial….racial slurs were used in the presence of Diaz, and he saw racist graffiti on a bathroom wall. It appears that the workers allegedly responsible were mostly or all minorities themselves, and each time an allegation could be verified, the employee was punished. Tesla claimed that they had taken enough steps to address the concerns of Diaz […] a jury disagreed, and awarded the plaintiff $137 million, an amount that the judge reduced to $15 million. In response to the verdict, Tesla released a statement pointing out that witnesses confirmed that the slurs were used in a friendly manner, usually by African-American employees, and without hostile intent. (fact check: this article says the racism also included demands to “go back to Africa” people leaving drawings of caricatured black cavemen at the employee’s desk, threats, and claims that black employees were "given the most menial and physically demanding work" - and that these claims were backed up by testimony from two dozen former workers and a cellphone video showing people telling a black employee that they are going to “cut you up, n—-r”. This seems like a sufficiently different story that I’d like to know whether Hanania still stands by his version) Other parts of harassment law lead to more unfair double-binds. For example, you can’t be seen to “retaliate” against someone who accuses another worker of harassment. So suppose that a minority employee is bullying a white employee, the white employee resists, and the minority accuses them as “harassment”. Maybe there’s even a full trial, everyone agrees this is what happened, and the white employee is found totally innocent. Still, you can’t fire the bully, because that would be retaliation for a harassment complaint. And since you probably don’t want the bully and their victim in the same department, you need to move one of them. And you can’t move the bully, because that would be viewed as “retaliation” for the harassment complaint and they could sue you for millions of dollars. So you have to punish the victim. But Hanania doesn’t just say this kind of thing goes too far. He has some broader point that I have trouble interpreting - basically that corporations used to be cozy, chummy places full of banter and flirtation that everyone enjoyed, and now this has been universally replaced with the bland soul-draining bureaucratic corporate aesthetic satirized in works like Office Space. Is this true? People talk about Mad Men (I’ve never seen it) as reflecting some kind of corporate golden age where at least high-ranking men enjoyed their jobs. If so, did it change because of harassment law? Or because neoliberalism replaced the work-for-thirty-years-and-get-a-golden-watch corporation with the work-for-three-years-and-then-seek-a-better-job-elsewhere corporation? Still, Hanania really hammers in this point that we should apparently all be angry about the loss of corporate flirtation - he calls the current regime, “a sexless, androgynous, and sanitized workplace” which is “contrary to human nature [and] miserable”. Without civil rights law, we could have “organizations that combined the aspects of a church, a social club, a matchmaking service, and a traditional business.” In such a world: Some corporations start encouraging dating and forming close personal bonds among their employees. This can take many forms, from Christian matchmaking to promoting a party-like atmosphere. These pro-relationship corporations will come in conservative or liberal forms. Other firms explicitly market themselves as providing a more “professional” or “classic” work experience . . . we will see a period of wild experimentation, with some forms of corporate organization drawing a great deal of media coverage. People will criticize many of these experiments, and they will become the subject of public outrage. After civil rights law has been defanged, however, government no longer has the ability to easily shut such efforts down. Eventually, public anger subsides, and the idea of the media attacking a firm because it dislikes its internal culture will seem as intolerant as attacking a religious community for its doctrines, or homosexuals for what they do together as consenting adults. I appreciate my anti-civil-rights books doubling as interesting settings for pornographic stories, but I’m otherwise unable to fathom the level of Hanania’s enthusiasm here. …And More Richard Hanania hates all this stuff. Partly he hates it because he thinks it’s unfair and anti-business and anti-merit. But also, Vaclav Havel talks about the indignity of life under communism. You weren’t allowed to just do your job and pay your taxes and follow the laws of the communist state. You had to be actively complicit. You had to act enthusiastic about the communism, force it upon others, inform on your colleagues and punish deviation - at least if anybody was going to check later. This kind of communism didn’t just hurt your pocketbook. It damaged your soul. It molded you into a worse and uglier type of person who would eventually abandon their better impulses in order to justify their actions to themselves. This is how Hanania thinks of civil rights law. Business owners can’t just give blacks ten extra points on the screening test and call it a day. They have to favor blacks while insisting to everyone that they don’t do this and it’s perfectly fair and they love civil rights law. They have to twist their employment criteria into some kind of illegible monstrosity so nobody can notice all the favoritism they’re doing, then tell everybody that they believe the monstrosity is “fairer”. They have to hire a bunch of diversity coordinators - not because they’re required to hire diversity coordinators, it’s not a requirement - but because they love equality so so much (and if they don’t do this, they’ll get sued for seemingly unrelated reasons). Everyone faces a constant threat of lawsuits which can only be warded against by seeming maximally woke and maximally enthusiastic and maximally happy about all the idiotic fake laws you are being forced to comply with. Like in communism, you have to become your own mini-police state. You have to make employees snitch on each other if they tell the wrong joke. You have to turn your company into a tyranny of HR ladies. If you do any of this even a little less than other companies, you’ll get sued for seemingly unrelated reasons, with penalties running potentially into the hundreds of millions of dollars. Because there’s no legible law except “be the same as everyone else so you don’t stand out as sue-able”, every corporation homogenizes into the same bland HR-ocracy. Everyone agrees on the same hiring process, which is to prioritize college degree, resume, and interview, and definitely not any test or measure of ability. This leads inevitably to our current society, where everyone has to waste their childhood doing meaningless extracurriculars so they can get into the best college so they can take the best internships so they get the best jobs. (unless they do something stupid like let themselves get the dreaded “resume gap”). But also: During the early 1800s, government positions were given out by the “spoils system”, basically “does the party in power like you personally?” In the 1880s, after President Garfield was assassinated by a guy who didn’t get a good enough position, they switched to a formal civil service, based on test performance and merit. The US civil service became the envy of the world, attracted some of the smartest people in the country, and obviously worked better than the old system wherever it was possible to compare. Still, this gradually (and somewhat deniably) ended in the 1970s, because the merit-based hiring system seemed like disparate impact. Hanania calls the current era “the racial spoils system”, where positions in the bureaucracy are based on the same kind of illegible morass as everything else (eg the FAA’s “biographical questionnaire”). He says every branch of government has become less effective as a result. Hanania doesn’t mention this, but I’ve heard an additional argument elsewhere. It’s legally dangerous for companies to hire based on anything like merit. Still, if you have great lawyers and are willing to pay a lot to settle lawsuits, you can get away with legally dangerous things. This is only worth it if you really really want high-merit employees, ie if the best employee is much more financially valuable to you than the second-best. This is mostly true in Wall Street (where you want your trader to outsmart the other guy’s trader by half a millisecond or whatever) and Silicon Valley (where ten employees can write a program used by millions of people). So the government, the civil service, the schools, etc, all abandoned merit-based hiring, while Wall Street and Silicon Valley lawyered up. But that means that if you’re a smart non-minority college graduate, you know that joining the civil service will be a mess - you’ll have a tough time even getting in, and you’ll always be passed over for promotions for less-qualified minorities. Meantime, Wall Street and Silicon Valley would love to have you. So all the smart people got concentrated in a few industries that might not have been their most economically productive use, and the old American tradition where elite families would send some of their kids into public service died out. What To Do? Hanania stresses that most Americans hate affirmative action (and probably by extension most other civil rights law, though they’ve probably never heard of disparate impact). Affirmative action has been on the ballot nine times, and failed eight of those. Most recently, it failed in California, a deep-blue, 66% minority state where the pro-AA side outspent opponents 17-to-1. Also, Republicans have controlled all the branches of government many times in the past fifty years, and now they control the Supreme Court. Most civil rights law is based on executive orders and judicial decisions, so you wouldn’t even need a Congressional vote to overturn it. Just an executive order, from any president who felt like it. Reagan could have overturned half of this with the stroke of a pen, if he’d wanted. So how has it survived this long? His answer: because until about 2010, Republicans were too scared of getting called racist. Reagan wanted to overturn affirmative action, but other Republicans (like Bob Dole) begged him not to, because racism, and eventually he caved. But since 2010, everyone has already been calling Republicans racist all the time, to the point where probably this threat has lost its power. And the sort of moderate Republicans who reined in Reagan are gone. So why haven’t Republicans (eg Trump) acted? Hanania thinks everyone is so obsessed with “woke” culture war stuff that the low-hanging fruit of actual woke laws that presidents can change has slipped under the radar. And so, this book. I would have summarized the case as “Hey, Republicans! Do you hate wokeness? Well, too bad, it’s a vast cultural movement with bastions in a bunch of places where we have no power. But some of this civil rights law stuff seems pretty related to wokeness, and we do potentially have power there. So instead of fighting the unwinnable cultural battle, how about we fight the very winnable policy one?” But maybe this didn’t seem optimistic enough for Hanania, so he framed it as “the legal wokeness is the source of the cultural wokeness” instead. More on this later. The Origins Of . . . Inequality A progressive, reading this book, might counter: “Sure, civil rights law - like all law - is poorly written and kludgy in parts. Like all law, it sometimes gets abused or taken too far. Those are the costs. But the benefits are that it fights discrimination and inequality. That’s very important! Don’t you think those benefits are worth the cost?” Unless I missed it, Hanania doesn’t touch this obvious counterargument. He briefly says that in a free market, companies couldn’t consistently maintain discrimination, because that would be leaving money on the ground. “Cool theoretical result,” objects the hypothetical opponent. “But white households earn an average of $80K and black households an average of $50K, and so on with other minority groups. So it sure seems like something inequality-related is going on.” My tongue-in-cheek reframing of Hanania’s summary of civil rights law went: We notice your workforce is less black than the applicant pool.
Inline links: 2, this article
(although I’m suspending final judgment here based on my spot-check of the Tesla story turning up a different enough sequence of events that I’m not sure how much else was presented in a one-sided way - let me know if you find other parts that seem wrong.)
After a few disappointing years, these are finally coming into their own. The expert I talked (EDIT: I try to mostly preserve anonymity in this post, but this person has kindly allowed me to identify him as Andrew Miller of Changing Lanes) to said Tesla had made some bad decisions and was no longer in the top tier, but that companies like Waymo and [I can’t remember which other ones he named] were near the finish line. They’re already safer than humans in most situations and operating successfully in several cities. The remaining challenges to scaling up are mostly regulatory, not technical. Here the regulatory challenges are less about specific laws than general nervousness on the corporations’ part to be seen expanding too quickly. They want to build a strong record in friendly cities before venturing further.
Inline links: Changing Lanes
And we predict they get the factories. This is maybe overdetermined - did you know that right now, in 2025, OpenAI’s market cap is higher than all non-Tesla US car companies combined? If they wanted to buy out Ford, they could do it tomorrow.
But primarily it’s because applied consistently, it makes it impossible to ever criticize anything - after all, even the most tepid criticism could fuel someone sufficiently on the edge. This is impractical, so nobody ever does apply it consistently, so it inevitably ends up as an isolated demand for rigor. I think this is true for Tyler, who has called proponents of pharma price controls “supervillains” and accused them of potentially “inducing millions of premature deaths”. Although he reserves the “supervillain” term for pharma price controllers consistently, plenty of other people are “villains” - for example, Gavin Newsom for excluding Tesla from a 4% electric vehicle rebate.
40: Hard to assess how well Tesla’s robotaxis are going so far.