As we’ve written again and again, optimism and HBD should be able to coexist. As Pinker, Matt Ridley, and George Gilder have shown, believing in biological determinism in one form or another doesn’t mean you have to be a doom and gloomer.
Humans evolved to be optimists because we have no choice. Humans, unlike any other animal, have the unique ability to feel regret, and if we didn’t have the ability to brush off past disappointments, the cumulative effects of previous failures would make life unbearable. There would be no civilization.
It’s the libs who are the real pessimists – pessimistic about race and HBD, pessimistic about the world becoming less violent, pessimistic about free markets, American exceptionalism, IQ, rich people, the fed, technology, etc. Historically speaking, the greatest opposition to technological progress has been from the left over fears of environmental degradation, loss of ownership of the means of production, wealth inequality, and job loss. The libs are the biggest critics of Amazon, Google, Facebook, and Apple over things like privacy, the NSA, monopoly power, collusion, and low wages.
I also believe in anti-democracy, but am an optimist about the future, mainly because technological progress and HBD is making what little democracy America ever had obsolete. Eugenics can help solve the entitlement spending problem, and the saved money can be used to give high-IQ people and other useful individuals a basic income. Rapid gains in technology and financialization is widening the wealth gap and creating a caste system ruled by the cognitive elite, and the libs are powerless to stop it.
The left says capitalism and the American dream is dead, but on an Ask Altucher podcast a few days ago, James Altucher mentioned that his roommate in college was a very early investor in Uber, and at Uber’s present valuation of $18 billion, turned his $25,000 of seed capital into a windfall of over a $100 million. It should also be noted that James and his friend both went to Cornell – an elite school, like all Ivy Leagues, that only admits the best and the brightest out of a huge (and growing) applicant pool, compared to, say, no-name U. What this shows that America, despite all the pessimism by the crisis-seeking left, is still a meritocracy where anyone with a good idea and a combination of luck, hard work, and intellect can become obscenely wealthy in a very short period of time. Such overnight success stories whether they be in Uber, Tesla, Facebook, Snapchat, Tinder, Pinterest, or Dropbox wouldn’t be possible if capitalism and the American dream were dead.
It’s comforting for the left to blame rich people, crony capitalism, and other environmental impediments for themselves and others for failing to get ahead, when the cold, discomforting reality is that people fail typically because they aren’t smart enough. True, hard work and some luck are important, but intelligence is necessary. Note how James, also a multimillionaire, and his friend went to Cornel, which agrees with the multitude of data that shows that smart people, especially those who attend elite institutions and major in a STEM field as James did, make more money than everyone else. Even if the degree isn’t used to its full potential, being smart enough to be admitted to the Ivy League and the connections it affords, augers well for success at virtually all aspects of life. So as we can see, the America dream isn’t dead – if you’re smart enough.
In the post-2008 era of hyper-capitalism and stocks always going up, high-IQ is being rewarded more than ever, both in fame and fortune. Five year from now we’ll still be reading the same headlines about record highs for stocks, 0% interest rates forever, low approval ratings for Congress, pain at the pump, college & healthcare still expensive, nosebleed valuations for web 2.0 companies, Bay Area real estate prices through the roof, record wealth inequality, Tesla’s and Apple’s latest phone and car, and so on…
In my relatively short time on The Street, I’ve seen several former blue chip stocks disappear or become disgraced to the point of no return. Companies like Woolworth’s and Sears and Eastman Kodak and Xerox and Lucent and MCI – all of which, for a long time, were considered automatics for investors seeking reasonable, reliable returns in evergreen businesses.
There are a handful of notable blue chip failures, but these are few and few between. He’s also conflating the S&P 500 with the Dow Jones. Lucent, MCI, Kodak and Sears – while well known businesses – were never really considered to be blue chips. There have been four or so notable blue chip failures in the past decade: AIG, Bank of America, Citigroup, and GM. However, the Dow Jones in it’s present form won’t have any more failures. One could conceivably have seen how a confusing, over-leveraged company like AIG or Citigroup could fail, but not a companies with simple business models like Walmart or Proctor and Gamble. The people who construct the Dow Jones Industrial Average have gotten so good at picking companies and learning from their failures, there won’t be anymore blue chip disappearances.