#239: Dutch Disease, Robert Frost's Poems, Cambrian Explosion, DISCO's Semiconductor Economy....
"Two roads diverged in a wood and I - I took the one less traveled by, and that has made all the difference." - Robert Frost
Hello! This week is a mix of videos and articles that may result in more self-guided learning outside the newsletter. Don’t worry, it’ll be short and pleasant. We start today with a look at the Dutch Disease and the economy that gave that moniker. Then there’s a short piece on Alibaba’s corporate tit-for-tat (some might call it corruption).
The premium piece of something I found fascinating looking into a semiconductor company that turned the organization into a Final Fantasy-like game. You see, they have their own internal currency employees have to use to book desks, office spaces, and for factory workers to make the equipment for the company to sell!
Substack also included a preview function for the premium essays so you can read a few paragraphs to get a spiel before deciding to try the trial. Most of you probably received the email on Sunday and I think I may try that going forward so everyone has an opportunity to check out the premium content. I do apologize in advance for the additional weekly email but it is something written with sweat (that happens when I’m typing five hours straight) and blood (not literally, just high blood pressure from not being able to find the write vocabulary).
Then we have a science piece on the Cambrian Explosion and poetry with Robert Frost. I quite liked both of Frost’s poems used to write the essay and I encourage you to make a cup of tea before reading it free of distractions.
Finally, there is the thought on gratitude and reflecting on how much of a work in progress I am. I am thinking of keeping it as a segment going forward. The key reasons are because it satisfies my narcissism in thinking my thoughts matter to others and for a bit of therapy—though it feels rather stupid to share the thoughts I convince myself it’s a necessary medicine to keep myself sane for the next few days.
Maybe it came off in my introductory writing today but it’s been a rather slow week. Not slow in the work, that seems to pile up like a mountain with no end. It was slow in how fast my brain was working. This usually results in verbose writing that comes off like a confession. I apologize for that.
As always, feel free to pick and choose from the categories below and I hope one of the things I wrote is of some value to you.
Business & Investing
Culture & Systems
Introspection & Habits
Business & Investing
The Dutch Disease
No, this isn’t about an actual disease. It wasn’t inspired by the COVID-19 backdrop either. It’s about the fragility of specialization to a nation’s economy.
The term was coined in the 70s when Netherland’s manufacturing economy saw a decline after the country found the Groningen natural gas field in the 50s. With ample natural resources—the economic lottery ticket—the country focused development on the booming resource sector.
The booming resource sector moved labour away from comparably lagging sectors (i.e. agriculture and manufacturing). This improved production of the booming sector and people got wealthier from it.
With more exports of oil, the Dutch Guilder (their currency before the Euro) increased in value. That resulted in increased consumption of imports since the Dutch could buy more with their stronger currency. But this led to weaker exports of non-service goods and compounded the decline of the already lagging sectors like agriculture and manufacturing.
The Dutch saw weaker and weaker non-oil exports while they helped the manufacturing of their neighbours. This is the paradox where the discovery of an economic resource like oil hurts the broader economy of the nation.
It’s not just natural resource booms but any windfall like foreign direct investments as well. Beware of lottery tickets that appear to pump up the nation’s economy, it can hurt all the other sectors.
The Dutch Economy
The primer behind why I started looking at the Dutch Disease was from the following video on the Dutch economy.
Though not, exhaustive, I found it fascinating to learn how massive the Dutch agricultural sector was. The port of Rotterdam also does so much trade that it’s also known as the port of Germany. With a dash of confirmation bias given the historical prowess of the Dutch East Indies Company and a pinch of hindsight from their mastery of waterways, that seems obvious now.
Alibaba’s Related Party Transactions
This essay by Aikya Investments revealed the various ties between Alibaba and the CCP. As expected, there were a lot of “scratching backs” with Alibaba acquiring worthless companies for millions of dollars to help out friends get wealthy.
Last Week’s Premium Newsletter
DISCO Corporation: Micro-Economies Where You Pay for a Desk, Meeting Rooms and Bet on Idea
“We’ve created a free economic zone, just like what exists outside the company.”
Try out a two-week trial of the premium subscription to read last week’s and dozens of other essays exploring owner-operators and cultures of public companies.
Culture & Systems
Robert Frost
"Two roads diverged in a wood, and I—I took the one less traveled by, And that has made all the difference.” - Robert Frost.
That is the last line in Robert Frost’s poem: The Road Not Taken.
In the poem, Frost starts by highlighting there are two roads. One well-trodden while the other "was grassy and wanted wear”. He chose the none that wanted wear.
He knew there was no turning back.
"I kept the first for another day! Yet knowing how way leads on to way, I doubted if I should ever come back.” - Robert Frost.
Life would have no choice but to take on a new path. A divergent road, once committed to, compounds further. There is no going back and sometimes, it feels like a trap.
For that, the traveler need only have read a line another of Frost’s poem: A Servant to Servants.
“The best way out is always through.” - Robert Frost.
The hard thing is understanding the road less traveled means you can no longer catch up to those that traveled the popular one. It’s not that the roads might converge in the future. It’s that you can't know for certain.
Of course, you can’t catch up with someone who has taken a different road. It’s like trying to compare apples and oranges. We know it’s silly. But it’s a hard realization to accept, understand and one day appreciate.
Cambrian Explosion
The Cambrian Explosion happened ~540 million years ago during the Cambrian period. It was a “short” span of 13-25 million years when the Earth saw an explosion of organisms. Many recorded fossils date back to this period and it appears to be when sea lifeforms developed hard shells for the first time.
This was the time when all major animal phyla started appearing. Phyla (I think Phylum is the plural) is a level of biological classification to denote groups of organisms with similar evolutionary traits.
The takeaway is that most phylum formed during this period are alive today. This was a big shift when the Earth moved from simple-celled organisms to complex ones that evolved to form the ecosystems we have today.
It was long believed this sudden shift happened because of an increase of oxygen levels in the ocean leading to various evolutionary forms. Some believe it was a sudden increase in oxygen that led to the emergence of predators that prompted other species—the prey—to evolve and form complex body types to survive.
Either way, it’s considered that oxygenation of the oceans resulted in what is considered to be the “most significant evolutionary event” for Earth. As Geoffrey West pointed out in Scale, one of the constraints on how big some animals become is the amount of oxygen it can pump through to the organs.
Size also impacts how fast oxygen gets diffused from the lungs throughout the body. The bigger the animal, the longer it takes for lungs to diffuse oxygen and the slower the development will be and the longer the animal will live. There are exceptions but the amount of oxygen seems to be critical in the development of life forms. The amount that is amply available and the rate it can be taken in by the body.
Was the internet the same explosion of oxygen that led to the Cambrian Explosion? Is there a single vital resource that can cause such evolution in organizations or any groups of people that form an ecosystem? Conversely, if humans were to ever move away from Earth, will the limitation of oxygen in the atmosphere result in smaller people?
Octopi are so cool.
Introspection & Habits
An Ode to Gratitude
Conference calling might’ve saved companies during COVID-19 but video calling’s been saving relationships long beforehand. Thanks to Apple’s FaceTime, I’ve been able to see my parents every week in Vancouver. In turn, they’ve been able to see their parents in Seoul. How wonderful is that?
Sure, it costs an arm and a leg to buy Apple’s products. They did their job well to keep the poor people out of their brand image. I also hate them for all their port shenanigans. But, they gave my family and I connectivity and I’m thankful that. It’s true, Facebook and Google have made free options. I’m just lucky to use FaceTime.
Confessions of a Work in Progress
I would love to be a sell-out. You know, the kind when Beyonce did a Pepsi commercial and people called her a sell-out or when Joe Rogan sold his show to Spotify. It’s ridiculous all those freeloaders have the audacity to judge these creators as sell-outs. As if the $20 t-shirt or spending $100 on a concert really compensated for the decades of work Beyonce put into creating her music.
Selling-out comes as a result of all the hard work the creator put into their craft. It’s no different than the IPO after 20 years of building. It’s a mere realization of value. It doesn’t make the creator any less, just the people who judge as less human. if they paused to take a few seconds to swivel on their chairs and think about how much crap the creator went through, they would understand and applaud that moment when a singer gets to pose with a Pepsi can.
I can’t wait to sell-out. To sell out advertising for a train or something so I can buy my dad his cottage in Scotland and mom her apartment in Arizona with that sweet train advertisement money. I have no clue why I would advertise for a train company. Maybe I’ll write a book about trains and be on a commercial writing on a train. That ought to do it. Fingers crossed.
I don’t know what people do on their walks but that’s what I daydream about on my morning walks. I start by getting mad at some asshole, dick or <insert place for unloading excrement> then daydream about my deepest desires. Most times, I’m daydreaming about being on trains or renovating my apartment with Vitsoe shelves.