Scott on #SSC reviews the book Zero to One

Was Amazon inevitable? Or should be be grateful to Jeff Bezos?

We are perhaps glad that there is convenient online retail, but this does not translate into appreciation of Jeff Bezos. Online retail came into being because it’s a part of Progress; Jeff Bezos is just some annoying guy who claimed credit and captured the profits.

(the obvious counterargument here seems to be that if Jeff Bezos didn’t do the admittedly hard work of creating an online retail giant, somebody else would have, perhaps a little later and a little worse; hundred billion dollar bills don’t lie on the sidewalk literally forever. I’m not sure what Thiel thinks of this; at the very least he might say our society fails to appreciate that some specific person does have to do the work for the work to happen.)

Why do we even care about money?

Think about what happens when successful entrepreneurs sell their company. What do they do with the money? In a financialized world, it unfolds like this:

– The founders don’t know what to do with it, so they give it to a large bank.
– The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of investors.
– Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks.
– Companies try to increase the share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats.

At no point does anyone in the chain know what to do with money in the real economy. But in an indefinite world, people actually prefer indefinite optionality; money is more valuable than anything you could possibly do with it. Only in a definite future is money a means to an end, not the end itself.