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Founding vs. Inheriting

This first piece will make you think, especially after the pandemic year(s), because it highlights a few important ideas.

The key idea is that the folks who inherit institutions couldn’t have founded it. This has a lot of ramifications, many of which were laid bare as the institutions go through a crisis. Old media went through this with the rise of social media and blogging. The government is going through this now with the pandemic.

Another idea that I took away, which applies in a lot of areas of life, is that the skills required to win a job are often not the ones that help you do the job well. For example, politicians are good at winning elections but they may not be great at governing, especially during a crisis. It’s a good read.

Founding vs Inheriting [Balaji Srinivasan on 1729] – “That older, institutional ideology is now failing. Over the course of 2020, public health failed, public schools failed, fire departments failed, and police departments failed. National, state, and local governments failed. Media corporations failed and even the US military failed. Just about every Western institution run by a political heir failed, because it was presented with the unanticipated shock of COVID-19. The widgets these heirs’ factories were cranking out were no longer suited for the occasion. And their failure has caused a crisis of faith in American institutions specifically, and in the postwar order more broadly.”

This next post pairs well with the first in that in cases where you will be leaving something behind for others, you have a responsibility to make sure they are able to accept that burden. Thinking about investing for seven generations has benefits for you (which is what the post is mostly about) but it’s also important that you teach the next generation how to do the same. Hoisting wealth on the unsuspecting can have deleterious effects.

Investing for Seven Generations [JL Collins] – “It starts with me. I no longer think of this money as mine. No longer is the objective to invest just for my lifetime. I think of myself as its custodian. Certainly, I am free to benefit from it, but only to the extent of staying well within the 4% rule. My first role is to nurture it and see it grow.”

Egocentric bias is a cognitive bias in which you overestimate your contributions and underestimate the contribution of others. This quick video explains the concept as well as its impact on your success (it’s really good):