Here’s the monthly roundup. Please send any travel recommendations for Iceland!
An overview of the tech startup scene in Africa. The continent has tons of promising secular trends: demographics, population growth, urbanization, a rising middle class, and growing connectivity. But capital remains scarce, other than from local tech incubators and Naspers (the South African conglomerate that owns one-third of Tencent). The Lucas Paradox remains. I found it interesting that most of the large companies and exits in Africa relate to payments (like Kenya’s M-PESA). Plus, some investment ideas in public equities: “MTN and Airtel are spinning off their mobile money units to position the subsidiaries as pure play fintech, unlocking higher multiples. MTN’s Mobile Money unit is valued at an estimated $5 billion, while Airtel’s is at $2.65 billion.”
(2) The Ways of Corruption in Infrastructure: Lessons from the Odebrecht Case
The insane story of a worldwide bribery scandal that brought down multiple national governments. “The Odebrecht case leaves you speechless. This case implicated almost one-third of Brazil’s senators and almost half of all Brazil’s governors. A single company paid bribes to 415 politicians and 26 political parties in Brazil. It makes the Watergate scandal look like a bunch of kids playing in a sandbox.” The US Department of Justice [called it] “the largest foreign bribery case in history.”
(3) Where Did Marcos Hide His $10 Billion Fortune?
Lawyers have spent decades tracking down billions of dollars that Ferdinand Marcos stole while president of the Philippines and used the funds to compensate victims of his government. I found it interesting both for the weird legal angle (using the Alien Tort Claims Act to prosecute a former leader of another country), and the adventures to track down hidden assets (such as the Texas oil land held in a Matryoshka doll of shell companies in the Dutch Antilles). Given the contingency payout for the lawyers, I’m surprised that more cases like this aren’t funded by litigation financiers.
(4) Western Union: The Long Slow Short
Western Union (the original rollup!) is a good case study about the staying power of declining companies. Its telegraph services peaked in 1878, then fought the onslaught of telephones, faxes, computers, the internet, and digital payments over the past 140 years. AT&T’s telephone was a “disruptive” (the Clayton Christensen definition) invention that quickly beat out the telegraph, but Western Union generated enough cash flow to reinvest in new projects: Telex, charge cards (they could have been a payments network) data processing (they could have been a cable company), email (imagine if open source didn’t emerge), a money transfer business (which is the surviving business today) and much more.
(5) Life Advice: Become a Billionaire
This was pretty entertaining. The basic argument is that, if one is an effective altruist, becoming a billionaire is the best way to maximize utility because that person can donate most of the cash and get linear increases in utility, rather than log increases from hoarding wealth. I’m sharing this partly because I thought that some of the quotes were hilarious: “What if you’re running a company that “exploits” wealthy tech workers, and the donate proceeds to stop human trafficking? In some sense you are still guilty of capitalist exploitation, but it’s not a sense that matters.” Peter Singer would agree.
(6) How to Solve America’s Wild Deer Problem? Eat Them
The US has too many wild deer. Restrictive hunting rules and access to food in urban areas have resulted in the wild deer population exceeding its pre-colonial total of 30 million. The harms are both car accidents (1.5 million accidents and 200 deaths per year) and damage to forest habitats (trees and songbirds are harmed by a high density of deer). The solution is to lift restrictions on both the hunting season and the sale of venison to commercial shops and restaurants. Plenty of other countries allow for the sale of meat from regulated harvests (boars in Italy, kangaroos in Australia, moose in Sweden, etc.). The US is unique in not allowing restaurants to sell wild game.
(7) The Rise and Fall of the Pyramid Schemes in Albania
After the collapse of communism and the Enver Hoxha dictatorship (the dictator who built Albania’s infamous bunkers), Albania was not in a great spot. Its weak banking system meant that consumers had nowhere to keep savings. Instead, the public turned to depositing savings with shadow banks whose high yields were funded as pyramid schemes. When the schemes collapsed, they had taken in deposits equal to over half of Albania’s GDP. One-third of the population deposited capital with them, and the loss of funds led to nationwide riots that killed over 2,000 people and caused a recession.
Why did the Asian Tigers develop so much faster than other countries in the latter half of the 20th century? Three important policy choices. First, land reform to redistribute farmland from plantations to farmers (to boost crop yields). Second, industrial policy of promoting manufacturing with tariffs, domestic competition, and export discipline (to ensure a market mechanism). Third, finance with providing cheap capital through the state banks that controlled consumer savings at artificially low rates. Unfortunately, it seems like this path is hard to replicate because the required land reform sounds too “communist” to get IMF or US support, and the local landlords are often politicians.
COVID isn’t a risk for kids. It never has been. For kids, the CDC agrees the mortality risk from COVID is no worse than the flu. Only 331 kids have died from COVID in the US in the past 18 months, compared to 3000 from car accidents over the same period. The argument seems to be that strict precautions with kids is to protect the elderly, but >90% of seniors in the US are now vaccinated. When does that justification no longer matter? The basic disregard of policy for the age skew of COVID seems like a big oversight, and those saying “protect the elderly” or “long COVID” have some high costs to justify (e.g., education and depression) for the kids. “If you have spent months enraged at vaccine skeptics and their effect on national immunity, know that focusing on the need to protect children for their own sake is risk-of-harm inflation, too.”
(10) The We That Didn’t Work at WeWork
“Mr. Son, scribbling on his iPad, calculated WeWork would be worth $10 trillion in a decade, more than 10 times the price tag of Apple at the time, the world’s most valuable company. Still, Mr. Son kept urging Mr. Neumann to think bigger. WeWork’s […] real estate professionals and buildings numbered in the low hundreds. Mr. Son, though, told Mr. Neumann that each category needed to grow—to 10,000. On his iPad, he commemorated the dictate. “10k, 10k, 10k!” Mr. Son wrote in yellow, above Yoda grasping a green lightsaber. He signed: “Masa”[… he] told Mr. Neumann being crazy is how you win, and Mr. Neumann was not crazy enough.”
(0) Miscellaneous Fun
Stats on concrete production. The latest on Ant Financial. Amartya Sen on colonialism in India. The journey of the Half-Safe. Another food shortage in Cuba. Why does Joe Manchin live on a houseboat? Afghanistan is toast. Simone Biles interview. TPLF recaptured Mekelle. The origin of Eswatini. Massive goldfish in Minnesota. New book on Central Asia. A profile of Giancarlo Devasini at Bitfinex. Wild interview on Tether. China and the ETIM. Visiting Iceland. Absurd court clerk hobbies. The rise of Ron DeSantis. Why there is a sawmill shortage. Brazilian gold and the decline of Portugal.