14: Chinese Unfavored Sons, Where’s My Flying Car?, Arbeit-Lohn-Profit!, The Suffragettes' Aesthetics, Popcorn
Creativity always has a chaotic element to it in the beginning. Chaos is the initial part of creativity. - Gershon Kingsley
Investing & Business
Chinese Unfavored Sons
Reading time: ~10 minutes
Good piece by Lilian Li from Chinese Characteristics on the current tech ecosystem in China, and why it’s prime for more spin-outs!
The textbook reason for spin-outs is that this will increase shareholder value as the company is worth more as a standalone entity. This is known as the conglomerate discount. When a company spins out a division, there are clear benefits for both sides.
Check issue # where I commented on the conglomerate effect in Asia and more specifically in Korea through the example of LG.
Also, check the Spinoff Investing resources if you’re interested in understanding the whole theme!
I believe Chinese tech companies typically tend towards conglomeration because of their emphasis on 'owning the user' mentality. This encourages them to 'own the funnel' by having a more comprehensive product range. They are also more likely to incubate divisions internally given blue ocean starting conditions, aka a lack of trusty outside vendors, […] a need to create defensible moats {…] and having access to cheaper capital than start-ups […]
As a result, Chinese tech tends to have more diversified assets across different sectors. This means the various assets also tend to be undervalued by the market, and there are more candidates for spin-outs. Therefore more value can be generated by listing them as spinouts.
One significant difference between Chinese tech and its Western counterparts is that the former monetises businesses units without too many interdependencies. Unlike Google, which monetises with advertising across search, video and Gmail, companies like Bilibili and Tencent have several types of incomes which don’t require a foundational engine like Google Ads to keep generating revenue.
Thought-provoking stuff…
Where’s My Flying Car?
Reading time: ~10 minutes
Another week, another book review in the ACX contest!
In this one, the reader writes about Where’s My Flying Car? by J. Storrs Hall. I found the review pretty interesting and the book itself has several interesting insights:
What went wrong in the 1970s? Since then, growth and productivity have slowed, average wages are stagnant, visible progress in the world of "atoms" has practically stopped - the Great Stagnation. About the only thing that has gone well are computers. How is it that we went from the typewriter to the smartphone, but we're still using practically the same cars and airplanes?
Insight #1: Radiations vs. Evacuation-related deaths following the Fukushima events
Radiation killed 0 people at Fukishima; the radiophobic evacuation killed >1000 (“Some 1600 of the evacuees died from causes ranging from privation in refugee camps (notably loss of access to health care) to suicide”), and the tsunami/earthquake killed >10000.
Insight #2: Flying cars and nature revival
Climate change is all the more reason to embrace clean nuclear power and flying cars (highways use a lot of land; if flying cars replaced highways, that land could be returned to nature).
Insight #3: the case against public-funded research
Hall blames public funding for science. Not just for nanotech, but for actually hurting progress in general. (I’ve never heard anyone before say government-funded science was bad for science!) “[The] great innovations that made the major quality-of-life improvements came largely before 1960 […] and they were all developed privately.” “A survey and analysis performed by the OECD in 2005 found, to their surprise, that while private R&D had a positive 0.26 correlation with economic growth, government funded R&D had a negative 0.37 correlation!” “Centralized funding of an intellectual elite makes it easier for cadres, cliques, and the politically skilled to gain control of a field, and they by their nature are resistant to new, outside, non-Ptolemaic ideas.” This is what happened to nanotech; there was a huge amount of buzz, culminating in $500 million dollars of funding under Clinton in 1990. This huge prize kicked off an academic civil war, and the fledgling field of nanotech lost hard to the more established field of material science. Material science rebranded as “nanotech”, trashed the reputation of actual nanotech (to make sure they won the competition for the grant money), and took all the funding for themselves. Nanotech never recovered.
Arbeit-Lohn-Profit!
Watching time: ~1 hour per episode
Arbeit, Lohn, Profit/Travail, Salaire, Profits is a series on the Economics of modern Capitalism and Labor made by Arte (French/German collaboration).
Very interesting insights on the social changes caused by the advent of fordism and taylorism, and how they played a role in social unrest for instance in France with the May 1968 events. They also include relevant contemporary questions about the evolution of the workplace and of labor in a world where the required output can be generated using fewer and fewer employees thanks to improved productivity
What is work? What is labor? What is a job? Should we seek to realize ourselves in any of those? These are the main questions that the interviewees explore.
Arts & History
Suffragettes, Aesthetics and Guerilla Activism
Reading time: ~10 minutes
The 4th of June marked the anniversary of the death of Emily Davidson, suffragette activist, at the Surrey derby following a fatal accident on the track.
This video by Vox retraces the events that led to this accident while adding elements of background about the suffragettes. My favorite elements are the analysis of the color schemes that they used and how they used color contrasts as a symbol.
For instance, the fact that they dawned white outfits was not only to signal purity and virtue, but also a marketing trick to render better on sepia newspapers, when juxtaposed with policemen outfits!
Treat for the Ears
"Popcorn" (originally spelled "Pop Corn") is the fifth track of the album Music to Moog By, composed by Gershon Kingsley (born in 1922) in 1969.
Yes, this was composed by someone born in the 1920s. Futuristic as it gets!
Other Interesting Links
Until next week!
Antoine