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Straight to Hell: True Tales of Deviance, Debauchery, and Billion-Dollar Deals — John Lefevre

April 17, 2016 By in Books, Nonfiction, Reviews Tags: , , , , , , , Leave a comment

Masters of one medium, like Twitter, aren’t necessarily masters of another medium, like the 80,000-word memoir. They can be but don’t have to be. Lefevre mastered Twitter, but his long-form game is not as strong. That being said I did laugh when reading Straight To Hell; I feel like I couldn’t drink anywhere near the amount Lefevre does, or take anywhere near the amount of drugs. I don’t imagine I’d want to be friends with him. As he puts his life philosophy, “As we see it, if you’re dumb enough to get caught cheating, you probably don’t belong on Wall Street.”* That sounds like a sentence from a Bernie Sanders rally. It isn’t.

Straight_To_HellLeFevre writes, “From my experience, the rich and unscrupulous tend to make for entertaining company.” Speaking of political connections, he could be talking about Donald Trump, which is part of the reason he makes a popular, evil presidential candidates (and I don’t use the word “evil” lightly, but he is evil: the evil of pure id, untempered by knowledge or self-awareness). Straight to Hell has more political resonances than it should, and that may help explain its popularity, as it works on readers’ subconscious.

Still, LeFevre’s company is often entertaining, and the best one can say about his scruples is that he makes public what many would like to be private. The speaker of unpleasant truths has a kind of honor. The book is his unpleasant truths, though it is often about the unpleasant truths he dodged (“Now I know for sure, this deal is never going to work. But I still don’t want to be the one who gets blamed for killing it.”) Machiavelli has a vital role in history for a reason.

Even for people like me, who don’t see money as evil, LeFevre will make them want to see money as evil. (Consider how Sylvia Nasar puts it in Grand Pursuit: The Story of Economic Genius: “Historically, money had been seen as powerful, desirable, very likely evil, and mysterious, like natural calamities or epidemics.”) Money can be earned in ways that tend to benefit humanity or, in LeFevre’s world, in ways that tend to be about rent seeking and stealing pieces of the pie, rather than earning them, or expanding the size of the pie. Finance here looks like the latter part. That being said one doesn’t and maybe can’t know whether LeFevre’s book is representative, any more than a movie like Bad Teacher is representative of the teaching industry.

Straight To Hell is a memoir about signaling. The finance world presented in it has descended to an almost-pure signaling hell, in which there is no content, only surface. Hence the ceaseless references to luxury brands and luxury-brand schools. The two have become synonymous, however much humanities-department Marxists may want to deny it. There is a weird kinship between high school memoirs or novels and Straight To Hell. American high schools are painful because there is no content to shape form. Lefevre’s finance world is similar. In it, seniority beats skill (count the number of times the word “senior” appears). Many American high schools are so bad because there is no financially viable way to start an alternative high school that can siphon off smarter students and parents. Banks, in Straight To Hell, operate the same way. If contemporary investment banks operate anything like the way Lefevre depicts them operating, then “fin tech” (or “financial technology companies and products,” to use a phrase du jour) should be a ripe opportunity for startups, because the banks, and their personnel and culture, are so internally fucked up that smart startups ought to be able to eat them.

Unless, of course, regulatory and other barriers kill startups before the startups can really succeed. Still, anyone investing in financial companies should read Straight to Hell. It ought to give them courage, if it’s accurate. I can’t really judge whether it is. I’m too far from the industry. It seems unlikely, but unlikely things turn out to be true all the time. It seemed unlikely that the U.S. government would massively spy on virtually all of its citizens, but Snowden showed that it does. It seemed unlikely that an electric car startup could succeed, but Tesla showed that it can. I won’t discount Straight to Hell without trying to triangulate its portrayals. Still, if it is to be believed then many bankers are redistributing money to escorts and drug dealers. Not that I’m opposed, necessarily, to either group, but it is interesting given recent noise about financial inequality to see money flow from the rich to middle-skill service providers (though the book is not conceptualized or framed in that way; still, often the most interesting parts of a book are those that are unintended).

One could write an interesting piece comparing temperaments in Houellebecq and LeFevre. One could also write an interesting piece comparing Thiel in Zero to One and LeFevre. As Thiel notes, in a discussion about why startups (and other companies) must incentivize their employees with stock and other methods that align incentives:

Cash is attractive. It offers pure optionality: once you get your paycheck, you can do anything you want with it. [. . .] A cash bonus is slightly better than a cash salary—at least it’s contingent on a job well done. But even so-called incentive pay encourages short-term thinking and value grabbing. Any kind of cash is more about the present than the future.

zero to oneStraight to Hell can be seen as a document about “value grabbing” and about living in the hedonistic present. The value grabbing is not purely financial, either: It’s also sexual. The team lives or dies by the current roadshow. Slickness rules. One could also compare Straight to Hell and Zero to One in terms of humor versus earnestness. Zero to One has its moments of humor (think of the brief section comparing hipsters to the Unabomber, or the part about Richard Branson and the naked windsurfing model) but the preponderance of the book is about how to make serious, real improvements in the quality of life for all humans. Straight to Hell is about getting a bonus and getting your dick wet (concern over women’s pleasure is mostly absent, or I’d add something appropriate for women as well). There is nothing intrinsically wrong about either and indeed both have concerned me greatly at various points, but there is something distinctly sublunar about the relentlessness of those concerns, and the way one never looks up from the bonus or the girl or the meal.

Is it a satire? Is the joke on me because I don’t get it? There is much like, “There’s no justice in this world—a valuable lesson to learn at a young age, especially if you want to end up on Wall Street.” Is it bravado, trolling, or truth? After many words I still don’t know.

* If they’ll cheat someone else, they’ll cheat you when they get a chance.

The more you do it the better you get: Why Americans might not work less

January 9, 2016 By in Culture, ideas, Philosophy Tags: , , Leave a comment

In “Why Do Americans Work So Much?“, Rebecca Rosen poses some answers to the question in the title, most notably, “American inequality means that the gains of increasing productivity are not widely shared. In other words, most Americans are too poor to work less.” I’m not convinced this is true; one problem we have involves the difficulty or illegality of building and selling relatively inexpensive housing in high-demand areas (see here and here for two discussions, and please don’t leave a comment unless you’ve read both links thoroughly). Some of what looks like financial “inequality” is actually people paying a shit ton of money for housing in New York, Seattle, L.A., and similar places, rather than living in cheaper places like Houston or Phoenix. Homeowners who vote in those areas vote to keep housing prices high by strangling supply.

Plus, I’d add that, per “The inequality that matters II: Why does dating in Seattle get left out?“, financial inequality isn’t the only kind, though for some reason it’s gotten an overwhelming amount of play in the press over the last ten years. I’ve seen people speculate that financial inequality is fun to attack because money can easily be taken from someone at the point of a gun and given to someone else, while other forms of inequality like beauty or a playful disposition can’t be taken so easily.

Still, there’s one other important factor that may be unexplored: Demanding and remunerative cognitive jobs may not be easy to partition. That is, one person doing a cognitively demanding job 40 hours per week is way more efficient than two people doing the same job for 20 hours a week. And that same person may be even more efficient working 50 or 60 hours a week.

Let me explain. With some classic manufacturing tasks—let’s imagine a very simple one, like turning an hex key—you can do x turns per hour times y hours. With many high-value jobs, and even ambiguously defined median-value jobs, that isn’t true. In my not-tremendous-but-not-zero experience in coding, having one person stuff as much of the code base—that is, the problem space—into their head as possible makes the work better. The person learns a lot about edge cases and keeps larger parts of the codebase in their mind. The cost of attempting to explain the code base to another person is much higher than keeping it all in one’s head.

Among professors, the ones who’ve read the most and written the most usually exponentially better than those who have read 75% and written 75% as much. They’re 5x as valuable, not 33% more valuable.

One sees similar patterns recur across cognitively demanding fields. Once a person has put in the 10,000 hours necessary to master that field, each additional hour is highly valuable, and, even better, the problem domain is better understood. That’s part of the reason law firms charge so much for top lawyers. Those top lawyers have skills that can only be developed through extensive, extreme practice.

I see this effect in grant writing: we don’t split proposal tasks because doing so vastly increases the communication overhead. I’m much more efficient in writing an entire proposal than two or three people could be each writing parts. We’ve rescued numerous doomed proposals from organizations that attempted this approach and failed.

Many of you have probably heard about unfinished and perhaps unfinishable projects (often initiated by government). Here’s a list of famous failed software projects. Some of those projects simply become so massive that latency and bandwidth between the workers in the project overwhelm the doing of actual work. The project becomes all management and no substance. As I mentioned in the previous paragraph, we’ve seen many grant proposals fail because of too many writers and no real captain. At least with proposals, the final work product is sufficiently simple that a single person can write an entire narrative. In software, thousands of people or more may contribute to a project (depending on where you draw the line, hundreds of thousands may contribute: does anyone who has worked on the compiler or version control system or integrated development environment (IDE) count?).

Put these trends together and you get people working more because the costs of splitting up tasks are so much higher. If you put five junior lawyers on a project, they may come up with a worse answer or set of answers than a single senior lawyer who has the problem space in his head. The same thing could conceivably be true in software as well. The costs of interconnection are real. This will increase inequality because top people are so valuable while simultaneously meaning that a person can’t earn x% of the income through x% of the work. A person must do 100% or not compete at all.

This is also consistent with changes in financial remuneration, which the original author considers. It’s also consistent with Paul Graham’s observations in “The Refragmentation.”

Finally, there may also be signaling issues. Here is one Robin Hanson post on related concerns. At some point, Hanson described working for Lockheed before he did his Ph.D., and if I recall correctly he tried to work fewer hours for commensurately lower pay, and that did not go over well. Maybe Lockheed was cognizant of the task-splitting costs I note above, or maybe they were more concerned with what Hanson was communicating about his devotion to the job, or what example he’d set to the others.

So earning may not be scalable. It may be binary. We may not be “working” less because we’re poor. We may be working less because the nature of many tasks and occupations are binary: You win big by working big hours or don’t work much at all.

EDIT: See also “You Don’t Need More Free Time,” which argues that we may not need more free time, but rather the right free time—when our friends are free. I also wonder if too much “free” time is also enervating in its own way.

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