Andy Kessler

WSJ: Quit Modifying Capitalism

https://www.wsj.com/articles/quit-modifying-capitalism-1511071712 

After the calamitous century between Russia’s October Revolution and Venezuela’s debt default last week, you might think socialism would be dead and buried. You’d be wrong: It’s capitalism that is back on the rack, being tortured and refitted according to the ideologies of its detractors. But be warned, when you modify the word “capitalism,” you are by definition misallocating capital. I call this fill-in-the-blank capitalism.

Bernie Sanders offers a fine place to start. “Do I consider myself,” he asked at an October 2015 rally, “part of the casino capitalist process by which so few have so much and so many have so little?” (Emphasis mine.) Never mind that it was a progressive hero, Barney Frank, who said in 2003 that he wanted to “roll the dice a little bit more in this situation toward subsidized housing”— which helped lead to the financial crisis. Now Mr. Sanders wants to load the dice: Free college for all. Free Medicare for all. Free rations for all?

Al Gore, an ostensible environmentalist who made millions dealing with oil-rich Qatar, is no stranger to ideological modifications. On these pages in 2011, Mr. Gore co-wrote “A Manifesto for Sustainable Capitalism,” which demanded that markets integrate “environmental, social and governance (ESG) metrics throughout the decision-making process.” Yet messing with critical price signals through “ESG metrics” is exactly what would make capitalism unsustainable. See: Frank, Barney.

A 2014 Huffington Post headline declared “Let’s Make Capitalism a Dirty Word.” This was right around the time that “Capital in the Twenty-First Century,” the French economist Thomas Piketty’s now largely discredited book, was published in English. Mr. Piketty called for a tax on dynastic wealth because of “a strong comeback of private capital in the rich countries since 1970, or, to put it another way, the emergence of a new patrimonial capitalism.” Tell that to Mark Zuckerberg and Larry Page, self-made billionaires who weren’t even alive in 1970.

Nobel Prize winner Joseph Stiglitz tried to one-up Mr. Piketty, complaining in a 2014 article for Harper’s magazine about “phony capitalism.” But he offered a remedy! “A well-designed tax system can do more than just raise money—it can be used to improve economic efficiency and reduce inequality.” Messrs. Stiglitz and Piketty and all the modern-day central planners will no doubt gladly make the economic decisions needed to right the ship after they have sunk it.

WSJ: The Future Is Dodgeball

https://www.wsj.com/articles/the-future-is-dodgeball-1509907777

The past may be a Shakespearean prologue, but the future is dodgeball.

Ben Rosen, chairman of Compaq Computer Corp. and an early investor in Lotus Development, was the semiconductor analyst at Morgan Stanley eight years before me. In the late ’80s an embarrassingly lame online service named Prodigy was state-of-the-art, but I had visions of a multimedia world with text, pictures and eventually videos delivered through vast networks. Crazy, right? I asked Morgan Stanley’s uber-strategist, Barton Biggs, for advice, and he suggested we have lunch with Ben Rosen.

I was all of 30 and way out of my league, but we still trucked over to the Pan Am Building for a New York power lunch. I explained this multimedia thing. Mr. Rosen waved his hand and said in the nicest way, “I really don’t know anything about that.” I looked at Biggs, gulped, and asked Mr. Rosen for advice in general. He told me about building his venture-capital firm and running into investors on Sixth Avenue.

Then he rambled on about getting in the middle of things at events, conferences and seminars. He said that at first nothing will make sense and all these balls will be flying across the room out of your reach. But eventually you’ll find yourself in the middle of the room and balls will start hitting you. Then you’ll know you’re inside. As we walked out the door, I remember thinking, “That’s it? Gee, thanks for nothing.” Biggs agreed it was a waste of time. Turns out it was the best advice I would ever receive.

The thing about the future is that, as William Goldman wrote about screenwriting, “Nobody knows anything.” Everyone is an outsider, and it’s all up for grabs. Someone might have an opinion, but there are few facts. What you need are your own opinions about where the world is headed in any given industry: artificial intelligence, gene editing, autonomous trucks, marine salvage—whatever.

You need to go to places where the future is discussed. Every industry has these events. Make the time to go. And not only to hear keynoters billow hot air, but for the panel discussions where people disagree. The conversation spills out into the hallways between talks. There will be all sorts. The smug ponytailed guy who talks about his Phish tribute band and insists he knows everything. The woman you see at every event but only in the hallways chatting and who never makes eye contact to let you into a conversation. Barge in anyway. Remember, there are no facts, only opinions.