Artificial Intelligence Is Less Than It Seems, and Will Not Save or Destroy Us (But I Could Be Wrong)

Laurence Articles

With commentary and an afterword by Fred Mueller. Will artificial general intelligence (AGI) transform the experience of being human, opening up possibilities of knowledge, achievement, and prosperity that we can now barely conceive? Or is AGI an existential threat to humanity, something to be feared and restrictively confined? Erik J. Larson, in a fascinating book entitled The Myth of Artificial …

Alternatives for the Masses?

Laurence Articles

As a long-standing supporter of the “endowment model,” I’ve spent decades balancing my enthusiasm for active management and alternative investments against my theory- and evidence-based belief in indexing. But my advocacy of alternatives has been targeted to institutions and ultra-high net worth investors. The recent embrace of so-called liquid alternatives by ordinary Americans seeking to fund their retirement is deeply …

The Dilemma That Isn’t: Bonds versus Bond Funds

Laurence Articles

Should investors build their own portfolios of bonds, or buy shares of bond funds? Is there an economic difference or just one of appearance? Are directly held bonds safer because they mature, and you get your money back? How should one decide? Let’s ask the experts. Their differing views frame the question. Then, I’ll provide my answer. “You get your …

Alternatives for the Masses? Why liquid-alts funds are not suitable for the typical investor.

Laurence Articles

As a long-standing supporter of the endowment model, I’ve spent decades balancing my enthusiasm for active management and alternative investments against my theory- and evidence-based belief in indexing. But my advocacy of alternatives has been targeted to institutions and ultra-high-net-worth investors. The recent embrace of so-called liquid alternatives by ordinary Americans seeking to fund their retirement is deeply troubling. What …

Longer, Healthier, Happier: Why Working Longer Improves Almost Everything

Laurence Articles

Why do most people stop working for pay somewhere between age 62 and 67? Is this optimal? Would people benefit from arrangements that provide more flexibility, allowing those who want to work longer to do so more easily? We believe they would. Relative to our history as human beings, life has gotten unimaginably long. It is not uncommon to live …

Is the “Long Boom” of Technological Advancements Over?

Laurence Articles

Few would disagree that the period from 1870-2010 saw immense technological advancements that improved our quality of life. But, according to Bradford DeLong, far fewer advances lie ahead, and societies should adapt by “slouching” away from a free-market system. He’s wrong on both counts. There are two kinds of economists: those who labor in the fields trying to understand the …

Why Brad DeLong Thinks the Long Boom Is Over

Laurence Articles

There are two kinds of economists: those who labor in the fields trying to understand the economy better, and those who propose bold sweeping solutions to universally acknowledged problems. (I oversimplify, but not much.) I usually find the first kind fascinating and the latter kind annoying — except when a lively writer and polemicist like Brad DeLong tries to be …

Capitalism’s Triumph over Feudalism

Laurence Articles

Joel Kotkin, an urban geographer, demographer, and prolific futurist, argues in a new book that the United States is headed toward “neo-feudalism,” where individuals have a fixed position in the social hierarchy, mostly determined by heredity. But his evidence is unconvincing. Rather than feudalism, we are headed toward hyper-capitalism, where each person is an entrepreneur constantly selling his or her …

The Price of Time

Laurence Articles

“I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.”  –Koheleth My favorite of the many brilliant verses in the Wisdom …

Artificial Intelligence is Less Than It Seems, and Will Not Save or Destroy Us

Laurence Articles

Will artificial general intelligence (AGI) transform the experience of being human, opening up possibilities of knowledge, achievement, and prosperity that we can now barely conceive? Or is AGI an existential threat to humanity, something to be feared and restrictively confined? Erik J. Larson, in a fascinating book entitled The Myth of Artificial Intelligence, says “neither.” I agree. AGI, if it …

The Destruction Wreaked by Ultra-Low Interest Rates

Laurence Articles

“I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong,neither yet bread to the wise, nor yet riches to men of understanding,nor yet favour to men of skill; but time and chance happeneth to them all.” –Koheleth Super-bubbles in the asset markets, the rise of populism, and inequality are …

How Venture Capital Thrives by Betting on Weirdness

Laurence Articles

Who would want to be tasked with investing their own and other people’s money in companies run by weirdos and jerks? But that turns out to be one of the most important skill sets shared by successful venture capitalists. “Reasonable people,” begins Sebastian Mallaby in his excellent history of venture capital investing, “well-adjusted people…without hubris or naïveté, routinely fail in …

The Sobering Limitations of Artificial Intelligence

Laurence Articles

Will artificial general intelligence (AGI) transform the experience of being human, opening up possibilities of knowledge, achievement, and prosperity that we can now barely conceive? Or is AGI an existential threat to humanity, something to be feared and restrictively confined? Erik J. Larson, in a fascinating book entitled The Myth of Artificial Intelligence, says “neither.” I agree. AGI, if it …

Everything You Know Is Wrong

Laurence Articles

Einstein’s theory of relativity advanced Newtonian physics. That did not mean Newton was wrong — only that his theories could be improved upon. In an ambitious new book, the economist Andrew Smithers rejects core “Newtonian” principles of economics, replacing them with radical departures from conventional wisdom. But as I will explain, unlike Einstein, some of Smithers’ theories fail meet the …

Where’s Tobin? Protecting Intergenerational Equity for Endowments – A New Benchmarking Approach

Laurence Articles

with M. Barton Waring Abstract “The trustees of an endowed institution are the guardians of the future against the claims of the present.” –James Tobin, winner of the 1981 Nobel Prize in Economics. Tobin’s thoughtful admonition that endowment trustees should protect the spending power of the endowment for all time can’t be implemented in practice given today’s aggressive investment policies. …

Cloudy with a Chance of Technological Breakthrough

Laurence Articles

Will the cloud drive massive increases in productivity and wealth — as the internet did before it? That is the central question asked by Mark Mills in his stunning new book, The Cloud Revolution. Little changes sometimes morph into very big ones by stealth: you don’t see the big change coming until it has enveloped you. This is how ARPANET, …