The problem of looking at it as a systematic issue is that individual investors invest based on their own well-being. Those who do not do this end up losing against those who do this. To be more clear, it is a fundamental flaw of the competitive nature of the pure capitalist system that it leads to a small number of extremely wealthy people and a large number of poor people with a big gap in the middle.
The solution is good governance from good government. However, the capitalist system gone awry fails to compensate with good governance. This is a lesson we sort of learned in the 1920s, and then forgot and undid in the 1990s and 2000s and through today. By destroying good governance and good government, we created these situations. And in order to fix them, we need to return to good governance and good government.
In terms of the investors, they are just doing their jobs as well as they can by following the rules and seeking to optimize their returns.
These were my comments, and you deliberately misconstrued them. When I cited the moral dimension of the problem, you dismissed me as veering into sociology, rather than hard-headed capital allocation. When I cited instances where we are in fact responding rationally to certain risks, you now suggest we are ignoring human costs. We continue to invest in Israel in part because abandoning Israel (as the Boycott movement would have us do) would just would be surrender. One cannot divorce the math from the human element.
Certain edge cases, like WWIII, do not warrant modelling. What is the point? Our actions only matter if the world is still here tomorrow. We have to act on that premise.
I would give a lot to stop the mindless deportation of our service workers; meanwhile, our nursing homes will need staff. If the current political climate does not reverse, someone still has to provide the care. Investing in robotics to fill the gap is not moral evasion, it is solving a problem we wish we didn't have to. Meanwhile, in my life as a citizen I will oppose the current administration's policies. But, I forgot, that is letting sociology get in the way of rational allocation!
So which is it that you are advocating? Hard-headed, "rational" allocation, or moral and social responsibility? It is not one or the other. We are looking for the opportunities to do both. If you needed a straw man to make some sort of point, have at it. We are anything but indifferent, and I think you know better.
I appreciate you clarifying your position. I never named or targeted you personally.
My piece isn’t about individual moral conviction, but about the systemic allocator pattern: treating existential risks as “unmodelable” until it’s too late.
You’re right. We can’t separate math from the human element.
But history shows that when capital does, everyone pays.
My challenge is for allocators, myself included, to act before the market prices in catastrophe. That’s not a straw man argument. That’s the fiduciary bar.
I wasn't suggesting that attempting to be ahead of the wave is a straw man. I was referring to your rebuttal of points I wasn't making. Re modeling catastrophe, I know people that try to model things like an extinction-level pandemic. For portfolio returns, it is irrelevant. If we really are gone, no one will left to care about our returns. Graphically, that would be a blank space on the chart, as it were. Re. Israel, your original article seemed to imply that rational actors would "price in" the threats to Jews and Israel. Maybe. We will still invest in Israel, both because Israel is so dynamic, and also simply because it's the right thing to do. On that, my hope is that we are in agreement.
The problem of looking at it as a systematic issue is that individual investors invest based on their own well-being. Those who do not do this end up losing against those who do this. To be more clear, it is a fundamental flaw of the competitive nature of the pure capitalist system that it leads to a small number of extremely wealthy people and a large number of poor people with a big gap in the middle.
The solution is good governance from good government. However, the capitalist system gone awry fails to compensate with good governance. This is a lesson we sort of learned in the 1920s, and then forgot and undid in the 1990s and 2000s and through today. By destroying good governance and good government, we created these situations. And in order to fix them, we need to return to good governance and good government.
In terms of the investors, they are just doing their jobs as well as they can by following the rules and seeking to optimize their returns.
These were my comments, and you deliberately misconstrued them. When I cited the moral dimension of the problem, you dismissed me as veering into sociology, rather than hard-headed capital allocation. When I cited instances where we are in fact responding rationally to certain risks, you now suggest we are ignoring human costs. We continue to invest in Israel in part because abandoning Israel (as the Boycott movement would have us do) would just would be surrender. One cannot divorce the math from the human element.
Certain edge cases, like WWIII, do not warrant modelling. What is the point? Our actions only matter if the world is still here tomorrow. We have to act on that premise.
I would give a lot to stop the mindless deportation of our service workers; meanwhile, our nursing homes will need staff. If the current political climate does not reverse, someone still has to provide the care. Investing in robotics to fill the gap is not moral evasion, it is solving a problem we wish we didn't have to. Meanwhile, in my life as a citizen I will oppose the current administration's policies. But, I forgot, that is letting sociology get in the way of rational allocation!
So which is it that you are advocating? Hard-headed, "rational" allocation, or moral and social responsibility? It is not one or the other. We are looking for the opportunities to do both. If you needed a straw man to make some sort of point, have at it. We are anything but indifferent, and I think you know better.
I appreciate you clarifying your position. I never named or targeted you personally.
My piece isn’t about individual moral conviction, but about the systemic allocator pattern: treating existential risks as “unmodelable” until it’s too late.
You’re right. We can’t separate math from the human element.
But history shows that when capital does, everyone pays.
My challenge is for allocators, myself included, to act before the market prices in catastrophe. That’s not a straw man argument. That’s the fiduciary bar.
I wasn't suggesting that attempting to be ahead of the wave is a straw man. I was referring to your rebuttal of points I wasn't making. Re modeling catastrophe, I know people that try to model things like an extinction-level pandemic. For portfolio returns, it is irrelevant. If we really are gone, no one will left to care about our returns. Graphically, that would be a blank space on the chart, as it were. Re. Israel, your original article seemed to imply that rational actors would "price in" the threats to Jews and Israel. Maybe. We will still invest in Israel, both because Israel is so dynamic, and also simply because it's the right thing to do. On that, my hope is that we are in agreement.