Who Is YCombinator Trying To Fool With Their New Cities Research Project?

Two friends independently linked me to YCombinator’s “New Cities” blog post and it interested me enough that I thought to write about it in brief. The idea of a new city started “from scratch” excites me as an advocate of the private property society. I have a hard time imagining how my preferred values and ideas for peaceful, voluntary social arrangements will come to be implemented incrementally within the existing coercive institutions we call “city governments”. Starting with a bare plot of land, wholly-owned by one or more sympathetic parties and going from there seems like the only viable option for realizing this ideal and building a working model.

I was excited, then, to see that some well-known and resourceful people in the Silicon Valley VC community seem to be on to the same idea. But then I started reading their short post and I ended up with a lot of questions, the primary one being “What are they really trying to accomplish with this?”

I’m having trouble trusting their motives as sincere because of this: if they’re trying to build new cities, and they think they need to conduct “research” to figure out things like…

  • How can we make and keep housing affordable? This is critical to us; the cost of housing affects everything else in a city.
  • How can we lay out the public and private spaces (and roads) to make a great place to live? Can we figure out better zoning laws?
  • What is the right role for vehicles in a city?  Should we have human-driven cars at all?
  • How can we have affordable high-speed transit to and from other cities?
  • How can we make rules and regulations that are comprehensive while also being easily understandable? Can we fit all rules for the city in 100 pages of text?
  • What effects will the new city have on the surrounding community?

…they could prop open a free copy of Rothbard’s Man, Economy and State, Scholar’s Edition (with Power and Market) and start reading the basic economic theory underlying these questions, with special emphasis on the sections about “The Economics of Violent Intervention in the Market” which specifically deal with the problems they mention which relate to artificial scarcity of housing, zoning laws, street use permitting, mass transit policies and legislative efficiency. All the brainwork has been done for them, there is no need to reinvent the wheel and “discover” these effects independently if only they will consider what Rothbard has to say on the matter.

In fact, anyone who has read such material would immediately look at the “high-level questions” the YC Research project hopes to think through and notice the flawed premises evident in asking them. For example, asking “What should a city optimize for?” implies a city has some kind of monolithic identity and singular purpose, rather than being an unplanned, spontaneous outcome of the individual plans and values of the multitude of people who compose it. In asking the wrong questions, this project is doomed to arrive at arbitrary answers that are worse than wrong– they will be unknowledge which will set people back in believing it to be true and acting on it.

I don’t expect anyone at YCombinator or the research project to take a concern like this seriously, because I don’t believe their stated motivation is authentic. If it was, I would expect them to study the conclusions of 350+ years of economic pondering on these very unoriginal curiosities before proceeding with their experiment, which will never happen.

So my question remains. What are they really trying to accomplish with this? (And their Basic Income research project, which almost seems like expertly engineered trolling for the same reason I question the motivation of this New Cities project.)

 

Attack Of The Self-Control Snatchers!

Here is the abstract from a neuropsychology research paper entitled “A gradient of childhood self-control predicts health, wealth and public safety“:

Policy-makers are considering large-scale programs aimed at self-control to improve citizens’ health and wealth and reduce crime. Experimental and economic studies suggest such programs could reap benefits. Yet, is self-control important for the health, wealth, and public safety of the population? Following a cohort of 1,000 children from birth to the age of 32 y, we show that childhood self-control predicts physical health, substance dependence, personal finances, and criminal offending outcomes, following a gradient of self-control. Effects of children’s self-control could be disentangled from their intelligence and social class as well as from mistakes they made as adolescents. In another cohort of 500 sibling-pairs, the sibling with lower self-control had poorer outcomes, despite shared family background. Interventions addressing self-control might reduce a panoply of societal costs, save tax-payers money, and promote prosperity.

The progressives are out to improve society once more! And as per usual, it’s to “save tax-payers money”. Of course, first they’re going to SPEND a little tax-payer money, first. But all is well, these kinds of “investments” will more than pay for themselves in time. That’s why the cost of government keeps shrinking and our economy keeps growing and growing!

I guess the case for free will just gets weaker by the day? And since our actions and decisions are so deterministic and imperfect, of course it logically implies that an extra-social institution with a coercive monopoly could improve each and every one of us. The State truly is inevitable. I’m so glad we have government-funded neuropsychology researchers to help us figure this out.

Guilt-Free Research: Why I’m Not Scared To Steal People’s Ideas Anymore

I’ve thought a lot about doing my own research in the sense of sourcing ideas.

When it comes to idea-generation, there are essentially two extremes:

  • “Old school Buffett”
  • Index investing

“Old school Buffett” is the investor equivalent of a music DJ “digging in the crates”– a tireless, thorough examining of every idea possible. Sifting, examining, turning over every rock. Buffett’s claim that he started with the A’s in the Moody’s Manuals.

Index investing is the opposite. Index investing is the admission, “I have no ideas.” It is resignation. It is buying everything, instead of buying something.

Most investors’ idea-generation process lies somewhere on the continuum between the two extremes.

I do believe that, especially because I am learning a lot right now, it is best for me to “do my own research” and to come up with as many ideas as I can on my own. To hang closer to the rock-turning end of the spectrum. I also believe that you should always be able to understand and vet an idea on your own that you receive from someone else (no “Investment From Authority”).

However, I have also come to realize that:

  • The greatest investors borrow liberally from others
  • Time is scarce

The second part is probably more important than the first; the first is about soothing a guilty-conscience, the second is about embracing a meaningful constraint of reality and not hanging oneself by a determination to be completely original.

In consideration of these facts, this the value I see in reading good investment blogs– they are chock full of ideas and they’re almost all being given away for free. A lot of the hedge fund guys profiled in “More Money Than God” (review coming) were notorious for getting ideas from others (mostly brokers) and learned to pay for the best ideas and thereby cultivate a network of hard-working, reliably intelligent investors who were creating actionable ideas for them all of the time. Following investor blogs is kind of similar except you don’t pay for the ideas you get. You look for people with styles you agree with, who demonstrate competent analytical skills, then you just follow them and pick off the ideas you like best.

You could also do the same with newsletters. For example, why should I spend hours and hours picking through net-nets on my own (aside from the exercise and practice) to come up with most likely the exact same ones that Geoff Gannon is giving away in his GuruFocus newsletter? Geoff Gannon is fucking smart (and I use the expletive to connote a certain level of emphasis, enthusiasm and awe, here) and if anyone is going to pick net-nets well, it’s probably him.

For $289/yr, I can have Geoff Gannon pick net-nets for me and spend that time digging up other ideas. I also get two other newsletters (the Buffett-Munger one sounds interesting and Gannon might write that, too, the Magic Formula one I am less interested in but still could have value) and a premium stock screener. That could end up paying for itself pretty easily over time. He picks 1 NCAV a month, so it’s essentially $25 an idea. It’s like paying a few extra commissions at Scottrade on each order.

I think I will continue to do a lot of “original” research early on and overall as my life as an investor goes on. But I think there are creative, low-cost ways to get smart people to do a lot of the heavy lifting for you which can free you up to spend precious time and brainpower on other problems/opportunities. I think smart investors learn to leverage themselves that way.

Until recently, it used to really bother me that I might take an idea I got from a good blog and put money into it. It didn’t seem “right” to make money that way. I was even tempted to purposefully NOT invest in the good ideas I found there, believing them to be “tainted” merely by the fact that they weren’t my ideas and I hadn’t come up with them.

But, I feel I’ve faced that guilt and banished it from my investor conscience, now. A fellow investor at CreditBubbleStocks.com reminds me that there is no credit for originality in investing; only in being right by having the best judgment.