Tag Archives: wealth

Wealth, Intellectualism, and Individualism, Part 7

Part 6

Nerd mannerisms and appropriations, especially in pop culture and on Instagram, where pretty women donning faux glasses post memes about social isolation, have become the ‘new normal’, and words like ‘normie’ have become pejorative.

Nowadays everyone wants to be the ‘smartest person in the room’, not the most outgoing or popular. But ironically, in being smart, you become popular, whether you seek the attention or not.

Autistic-like traits such as social awkwardness, dismissiveness, curtness and bluntness (as opposed to sugarcoating, sentimentalism, and extroversion) convey authenticity and credibility, versus being a shallow ‘normie’ or ‘people-pleaser’, leading to a boost in social status both online and offline, whereas decades ago these smart people were ignored or relegated to the lower echelons of the social hierarchy.

Fast-forward to today, from Silicon Valley to Wall St., to having the most subscribers and followers on Instagram, Twitter, Vine, and YouTube, and in terms of higher wages (for STEM jobs), surging real estate (in Silicon Valley), stratospheric Web 2.0 valuations, and a perpetually rising stock market, as well as approbation and cultural appropriation, it’s not a stretch to say nerds, or more specially, introverts, rule the world right now.

Due to STEM, his popular blog, and by being really smart, Scott Aaronson has far more status than the vast majority of ‘normies’ (except for, perhaps, some athletes and actors). Same for Tyler Cowen, an economist (which is close enough to STEM), whose Marginal Revolution blog is extremely popular, read by thousands of people every day. Yeah, Marginal Revolution is not a big as TMZ or ESPN, but 1,000-10,000 dedicated readers/fans is about 1,000-10,000 more than the typical ‘normie’, who has close to zero after excluding immediate fiends and family. Those are just a handful of examples of out many; more will be given later.

From Virtue Signaling and Status:

We all want to be perceived as smarter because smart people are among the most successful in society today as measured by wealth, wages, and social status. While famous athletes and other entertainers make a lot of money, no one seeks their counsel on anything substantive, whereas if you’re smart you are elevated to the status of an ‘oracle’, and your opinions on a wide-range of issues – be it global warming, economics, sociology, or history – are valued and sought.

Intellectuals, particularly in the most difficult of fields, have become America’s new priesthood or nobility, sought for answers and bestowed with high social status, and whether it’s the latest gizmo from Google, Amazon, or Tesla, or the latest particle discovery in the field of high-energy physics, their contributions are broadcast by the media to the world. From The Daily View [...]

Smart people are among the most important and respected people in the world. They have the most Karma on Reddit, the most points on sites like Stack Exchange, the highest reputation on forums, and most views on YouTube for technical, artsy, or philosophical subjects. They have the credentials – SAT scores and degrees – to lend their expertise in a variety of fields and are showered with accolades …

Smart people are displacing ‘old money’ on the Forbes 400 list, getting their Web 2.0 companies valued or acquired for billions of dollars, watching their stocks and real estate zoom into the stratosphere – even as real wages for most people haven’t budged. A meritocracy epitomized by Bay Area tech scene or the financial cognoscenti of Manhattan, where erudition, wealth, and the specter of all-knowing omnipotence is valued.

And from the Economist, Be nice to nerds:

“Be nice to nerds. Chances are you may end up working for them,” wrote Charles Sykes, author of the book “50 Rules Kids Won’t Learn in School”, first published in 2007. Today there are more reasons than ever to treat nerds with respect: never mind the fact that every company is clamouring to hire them, geeks are starting to shape markets for new products and services.

Behaviors that may seem repulsive and anti-social, paradoxically, draw people in as ‘nerds’ are sought for their expertise and sober objectivity in contrast to the mainstream media, which is full of hoaxes, sensationalism, inaccuracies, omissions, and biases. From Deconstructing a Viral Article:

As I show in the example of Warren Buffett, intellectualism, competence, and merit is what draws people in, not being extroverted. Every year, thousands of people flock to Omaha for Buffett’s annual shareholder meetings – not because Buffet is a people-pleaser, but because he is very competent and his insights are invaluable. Elon Musk, another example of someone who is extremely competent, had the most popular Reddit AMA ever. Richard Dawkins, who lately seems to have gotten into habit of offending the easily offended, also had an enormously popular AMA.

They (nerds, quants, wonks, experts) are providing the answers to life’s most intractable mysteries, from theories of the origin of the universe, to theories of biology, economics, and sociology – to try to explain why wealth inequality is so persistent or why some groups always underperform academically and economically despite despite billions of dollars of entitlement spending over many decades. Sugar-coated, politically correct explanations and ‘nice’ discourse has fallen short at explaining the world, and people demand answers, even if such answers aren’t wrapped in a pretty bow of political correctness.

A lengthy 1994 New Yorker profile of Bill Gates aptly applies to many smart millennials today, who disregard obsoleted social conventions and niceties for bluntness and disheveledness, in their ‘pursuit of the truth’:

“Bill just doesn’t think about clothes. And his hygiene is not good. And his glasses—how can he see out of them? But Bill’s attitude is: I’m in this pure mind state, and clothes and hygiene are last on the list.”

[...]

Gates is famously confrontational. If he strongly disagrees with what you’re saying, he is in the habit of blurting out, “That’s the stupidest fucking thing I’ve ever heard!” People tell stories of Gates spraying saliva into the face of some hapless employee as he yells, “This stuff isn’t hard! I could do this stuff in a weekend!”

Back in 1994, a less intelligent era dominated by shows like Friends, Baywatch, and 90210, social conventions were more important than they are now, making Gates’ behavior truly anomalous, but now it’s commonplace, almost expected, and (as mentioned earlier) conveys authenticity and honesty. In the 90′s the clubs were busting, but now everyone wants to stay at home, quiet, watching Netflix, being introspective, or posting pictures on Instagram. Nightclub attendance has plunged.

Or as summed-up by the brilliant Eric Winstein, creator of the online mathematics encyclopedia MathWorld:

Right now I think we’re in something of a ‘competence bubble’ of sorts, where competence is valued more than ever as measured by social prestige, wealth, and wages, with ‘social skills’ and ‘people skills’ being less important. This is also related our post-2008 results-orientated economy, whereby quantifiable results have become more important than agreeability, as part of the push by corporations towards greater productivity and efficiency. Smart people, because they tend to be more competent, are especially suited for America’s competitive economic and social environment that prizes quantifiable, individual results over ‘collectivist’ traits like social skills.

To be continued…

Wealth Creation as the New American Religion

On sites such as Hacker News, Quora, Medium, and Reddit, posts, threads, and discussions about wealth creation always go viral. Everyone is obsessed with wealth, economics, finance, and money, but why?

In the past, society was more collective, and family, civic participation, and organized religion were the bedrock of American society, but in recent decades, and especially since 2013, society has become more individualistic, as families have become smaller, church attendance and religious affiliation has declined, and culture celebrates individualism and quantifiable individual merit as embodied by the likes of Bill Gates, Warren Buffett, Steve Jobs, and Bill Gates. The celebration of wealth and individualism has become the new ‘religion’ in America. A religion, that unlike theistic ones, is objective and quantifiable (as in measured wealth, social media followers, and status), not abstract things like God, morality, virtue, and heaven. To get an idea of how pervasive this trend has become, just do a Google search for any semi-famous person and very often the two most common ‘search prompts’ are the net worth and house of said individual. Yes, apparently more people interested in Richard Dawkins’ ‘net worth’ and the size of his home than his writings on evolution.

Salvation in America’s new religion is through quantifiable exceptional individual achievement and results, not in the collectivist belief in a deity or being an unexceptional ordinary person of good moral character. We aspire to be like Mr. Money Mustache, the pseudonym of a blogger whose rugged individualism and self- determination has made him a millionaire and whose writings on personal finance and wealth creation has made him something of an internet celerity and sensation, read by millions. Or like James Harris Simons, a physicist and the billionaire founder of Renaissance Technologies, one of the most successful hedge funds ever, combining the two things most prized in post-2013 society: wealth and intellectualism. Or Jack Boggle, the inventor of the Vanguard index fund, and beloved by the millions of people who adhere to indexing with a zeal and commitment of a religion.

America’s new religion is hard. Whereas organized religion and politics are inherently collectivist and thus, by definition, have low barriers to entry and don’t highlight the individual, our new religion exalts financial independence (such as Mr. Money Mustache) as well as the accomplishment of difficult individual intellectual feats (such as physics, mathematics, and coding) that bring respect and prestige to the individual. And instead of being ‘holier than thou’, now it’s who has the most followers on social media, the most money in his or her bank account, the most academic citations, the most Vine loops, the most YouTube subscribers, or the most Twitter followers – again, all highlighting the individual and generally being difficult things to accomplish, versus going to church, supporting a political cause, or being a decent, moral person, all of which, comparatively speaking, are easy.

And instead of going to mass every Sunday or reading the Bible before bed – now everyday we check our computer to see how much our stock accounts have risen or fallen. And instead of revering saints, we turn to the Forbes 400 list for inspiration, displayed on smartphones that have become as ubiquitous and indispensable as Bibles a century ago.

Holiness and virtue were once inseparable, and people sought to become closer to God through personal sacrifice such as going to church often, charity, community service, or raising a family. But nowadays virtue is measured by wealth and achivement, and millennials are living a similar monastic, minimalist lifestyle – but not to serve God or to become closer to God, but to enrich themselves and become financially independent at an early age by saving money and investing instead frittering away money on material possessions or on family. An example of a modern, secular ‘monk’ is the popular blog Early Retirement Extreme, run by a retired 40-year-old physicist who for the past decade has been able to live on a meager $7,000 a year, and thanks to his investments and minimalist lifestyle, never has to work again.

The American obsession with wealth is not new, going as far back as the Gold Rush, and later, popular game shows such as Who Wants to Be a Millionaire, but what makes the recent obsession different is how wealth is seen as an ends in and of itself, not a means or a stepping stone to something else – be it raising a family, going on vacation, buying a car, donating to a cause, or just good ol’ fashioned hedonistic debauchery. In the case of debauchery, money is still being used to achieve an end rather then being accumulated for the sake of accumulating money – that’s the distinction. This probably has to with with economic uncertainty, and young people specially are stockpiling money for a future of fewer social safety nets as both the US population and national debt continues to swell. Trump’s proposals for defense sending, stimulus, and tax cuts will increase the national debt and make funding social security more difficult.

Karl Marx wrote that economics, not religion or culture, is what drives society – and now – whether it’s online debates about wealth inequality to the obsession with wealth creation, his words ring true. The stock market perpetually making new highs, as well as headlines about multi-billion dollar web 2.0 valuations, has made everyone acutely aware of their position in the financial and social pecking order. In the past, people had FOMO over not going to heaven. Now it’s FOMO over missing out on the housing or stock market boom, or fear over not having enough money for retirement. We fear falling behind of our peers who are richer and more successful in quantifiable terms. The poor aspire to be like the middle class, who aspire to be like the upper-middle class, who aspire to be like the wealthy, who aspire to be like the ultra-wealthy, who aspire to become immortal through life-extension technologies rather than through God. We’ve become slaves to numbers, such as the number of dollars in the bank account, the number of followers on our social media accounts, or the amount of money in our stock accounts, or as victims of wealth inequality or stratification, where people are reduced to numbers that fall somewhere on a wealth distribution. The alt-right could be seen as an secular revival or insurgency to return or restore America to a more theistic, holistic, or idealist worldview where hard-to-quantify things like ‘identity’ and ‘nationalism’ replace what is easily quantifiable. It’s not just about taking back America but also about taking back our identities.

Wealth, Intellectualism, and Individualism, Part 3

Continuing from part 2 about finance:

Trillions of dollars of wealth has been created since the market bottom of March 2009, and especially since 2013, some examples being:

The S&P 500 bottomed at 666 in March 2009. As of 8/25/2016 it’s now at 2170 for a gain of 226%, which does not include the generous dividends. Dividends included, it’s over 250%. At seven years and counting, the bull market is also the second-longest ever, and I predict it has much further to go.

In 2008 and 2009, leftist pundits fondly envisaged a post-America era, where America and its economy would no longer dominate, with perhaps Russia, Germany, Turkey, or Brazil as the new ‘status quo’. Pop-psychology purveyors like Gladwell, Ariely, Taleb, and Daniel Kahneman, rose to fame, whose books promoted ‘leveling‘, in repudiation to the hubris and elitism as embodied by Wall St. and the Bush administration, which so spectacularly, to the delight of the left, imploded in 2008. Then, much to the dismay of the left, America came roaring back as Europe fell into perpetual recession and the emerging economies were broadsided by corruption, stagnation, falling commodity prices, and high inflation. Due to the flight to safety and American exceptionalism, treasury yields are at record low, the dollar is at record highs, and the S&P 500 has posted the highest real gains since 2009 of any major stock index in the world.

From The New Gilded Age; The Post-2008 Economy, Part 4:

Some on the left say America is in decline or losing its influence. Not true, we’re pulling ahead of the rest of the world. Silicon Valley is not only the center of the technology universe, but America’s intellectual institutions are the envy of foreigners and are inundated with applications from the best and the brightest from all over the world. So while the left whines about America having too much inequality and not enough jobs, rich and smart foreigners – whether they are going to Caltech or MIT, working at Google, or buying up expensive real estate – can’t get enough of America.

In 2009, Facebook was only worth $9 billion; it’s now worth over $250 billion. Tesla went from being a prototype to a dominant player in the luxury car market and has a market cap of over $30 billion. Google, Amazon, Apple, and Microsoft added a combined $1 trillion in market capitalization since the 2009 bottom – about the size of the economy of Spain. Web 2.0 was in its infancy; now Snapchat, Uber, Dropbox, and Twitter are worth combined $150-200 billion.

Home prices keep going up, and prices in the the Bay Area have almost doubled since 2011, and I predict prices will keep rising due to huge demand from wealthy foreigners, private equity, and newly-minted tech millionaires, as well as due to limited supply. Thanks to Stanford University, biotech, and web 2.0, the Bay Area is the capitalism and intellectualism capital of the world right now, overtaking Manhattan. Sand Hill Road of Menlo Park, California, is the most expensive street in the world.

Teens, millennials are making thousands of dollars month with social media on sites like Tumblr, Vine, and Instagram; others are making a fortune trading stocks.

Given all this wealth being created, and much more to go, is it any wonder millennials want a piece of it instead of being poor and bitter like a typical ‘black lives matter’ supporter, protesting imagined racism and injustice on deaf ears. Or a ‘social justice warrior’, who sees sexism and oppression everywhere, and is dependent on welfare and Patreon donations because ‘social justice’ is not a skill employers are typically looking for.

That’s why there is so much interest in wealth creation, particularly on high-IQ communities like Hacker News, Reddit, and 4chan, with posts about day trading, ‘YOLO’ (/r/WallStBets), stock market, real estate,and finance getting so many ‘up-votes’ and discussion, and why we aspire to be like Musk and Shkreli, who became wealthy through intellect, hard work, and free market capitalism, not by complaining about ‘wealth inequality being too high’ or ‘the fed being a conspiracy’. Despite the liberal media’s narrative that all millennials are broke and in debt, it’s not too uncommon on Reddit communities like /r/investing to find stories of 20 or 30-somethings, often in technology or the rental property market, who have hundreds of thousands of dollars to invest.

And while the baby boomers had it easy (an abundance of good-paying jobs for all skill levels, generous and early retirements, social security payouts, no mountains of student loan debt), for millennials times are more trying, which could explain why not only so many millennials may have a grudge against the blissful boomers, but also why millennials – possibly the most educated generation ever – are so obsessed with self-sufficiency, intellect, and self-determination – so much so that some will voluntarily choose unemployment than having to answer to a less-intelligent, uneducated superior.

(image credit: Worthless College Degree Book Trailer)

Difficult economic times also call for changing expectations of becoming an ‘adult’, with ‘initiation’ into adulthood being delayed. From QZ.com, The five different paths that people take before they feel like official adults:

A typical pathway was laid out in the early and mid-20th century: exit school, get a job, move out of the parental home, get married, and have children.

While this might be considered the “normal” pathway even today, these transitions do not occur in such a neat and predictable order for many contemporary young people. Furthermore, the time to complete them has become longer.

It is commonplace today for young people to return to school after beginning work, move back in with parents (or never leave), have children prior to marriage, or work in less secure part-time jobs.

That pretty much sums it up about millennials: Overeducated, overqualified for most jobs, and lots of introspection and time spent in mindfulness. Not as much interest in family formation or marriage. I would also add: posting online on sites like Tumblr, debating crime and gun statistics, a keen interest in quantum physics and other obscure complicated stuff, and trying to ‘get into’ the stock market and finance despite being cynical about ‘corporate America’ and not having any particular use for the money (because they tend to also be minimalists).

As explained in the post Adulting, the idiosyncrasies of millennials may be a way to adapt to a culture and economy that rewards individualism, in addition to a more competitive, difficult economic environment:

Boomers had four decades of post-WW2 prosperity serendipitously dropped on their lap, which they frittered with excess consumerism, with millennials fighting for the scraps of what is left in our increasingly competitive, winner-take-all economy. Boomers never had to compete with computers for jobs, had to contend with an economy so hellbent on productivity and efficiency, with a culture and economy that rewards quantifiable results and individualism over family and community, more than ever. The post-2008 economy is like an ‘Ayn Rand world’ in overdrive. Being an ‘adult’ means trying to emulate an economic and social ideal that no longer exists, as well as being a slave to political correctness or a corporate machine, and it’s understandable why millennials have turned sour of the concept, instead embracing the ‘Randian’ ideal of individualism over obsoleted collectivist ideals of family and community, because it’s the best way to adapt.

Rather than waste precious years in a dead-end job, millennials would rather self-actualize by trading, investing, posting videos and vines online, learning to code and other high-paying skills, occasionally making huge fortunes in the process. On Reddit here is an example of someone who a couple months ago turned $18k into $135k in two weeks. Such stories are not too uncommon. And there is there the article earlier about ‘Tumblr teens’ making more money than their parents.

Related to the synthesis of wealth, intellectualism, and individualism, millennials want to be wealthy and they care a lot about stocks and personal finance, but they eschew ostentatious materialism, preferring wealth as measured by a bank statement or a trading account, not a big home or a sports car that depreciates as quickly as it accelerates. Finance has become more important than family. Millennials, in channeling, either subconsciously or intentionally, the matriarch of individualism and self-interest, Ayn Rand, aspire to be like Musk or Zuckerberg, or Warren Buffett – individuals who became wealthy through intellectualism and individualism, not swinging a stick for a ‘team’ or parroting lines to a camera. As I will explain later, intellect, especially in STEM – which includes finance, philosophy, and economics – gives you ‘social capital’ (even if you’re not wealthy) more-so than just being rich and dull. Few take the opinions of actors and athletes on important matters seriously, but they (the media) constantly defer to scientists and economists on important matters. Millennials understand this distinction.

To millennials, wealth is is not measured by how many ‘toys’ you have. Rather, it’s about wealth in a bank account, as well as ‘cognitive wealth’ and ‘social capital’.

As mentioned earlier, personal responsibility ‘the self > the collective’ is a major theme of post-2008 society, with individuals (whether through low IQ, bad choices, majoring in a low-ROI subject instead of STEM, being dumb, etc.), not the marketplace or society, to blame for failure. People who blame the the government, Wall St., bankers, and the fed, for losing money and being failures at life get no sympathy online. Blame yourself. The market is not rigged; it’s actually very efficient and rational. Instead, buy index funds. Stop being a sore loser who whines about manipulation and bubbles as others are getting wealthy, or maybe you’re not smart enough to make money. In much the same way rationalist millennials reject deities and other apparitions, they rightfully reject fed ‘conspiracies’, wishful thinking, ‘doom and gloom’ (eschatology), allegations of the stock market being a ‘fraud and a bubble’, and other delusions. They also tend to be pragmatic, consequentialist, and utilitarian, arguing that policy, even if it’s unpopular (such as bank bailouts, tax cuts for the rich, or eugenics), that creates the most wealth or ‘good’ indirectly is desirable over policy that doesn’t (excess welfare spending, disability, etc.) but otherwise ‘feels good’ (naturalistic fallacy).