Pessimism is the mood of 2023. “This may be the most dangerous time the world has seen in decades,” warned JPMorgan Chase CEO, Jamie Dimon, in mid-October.
Wars, inflation, political rage in all major countries, stagnant markets, you name it: Globally, sobering news abounds. Optimism feels like the indulgence of children. But as Winston Churchill said during a far worse time, “when going through hell, keep going.” He was right. This column is a plea to keep going, eyes wide open, in the path of rational optimism to a better future.
In Silicon Valley, where I live, a well-known venture capitalist decided to challenge the rotten mindset. This requires a bit of background. If today’s global economic and geopolitical trends aren’t bad enough, Silicon Valley is going through its own unique hell. Huge numbers of tech startups funded from 2015 to 2021 are running out of cash. Growth at any cost? That window closed. Down valuations limit the ability to raise more money. Layoffs are growing. There is no IPO market in sight; figure 2025 soonest.
On top of that, Silicon Valley has suffered reputational damage of its own making. Elizabeth Holmes of Theranos is now in prison. In November, Sam Bankman-Fried of FTX and Alameda Research was convicted of fraud and conspiracy and faces decades in prison. Sequoia Capital, the most storied VC firm of them all, gave $214 million to Bankman-Fried. The 31-year-old fraudster was playing a computer game, League of Legends, while he pitched for the money. “I LOVE THIS FOUNDER” texted a Sequoia partner during the presentation in a shocking display of gullibility.
Back to optimism. In mid-October, web browser inventor and venture capitalist Marc Andreessen wrote a piece on his firm’s website, calling it The Techno-Optimist Manifesto. It went viral for its perfect timing. Nearly asphyxiated in today’s heavy fog of pessimism, optimism is ready to break out.
Paraphrasing Andreessen:
Growth leads to vitality, expansion of life, increasing knowledge, higher well-being. Everything good is downstream of growth. Not growing is stagnation, which leads to zero-sum thinking, internal fighting, degradation, collapse, and ultimately death.
There are only three sources of growth: population growth, natural resource utilization, and technology. Developed societies are depopulating all over the world. Natural resource utilization has sharp limits, both real and political. And so the only perpetual source of growth is technology.
If you look around the world today, and squint through the smoke of pessimism, it’s possible to see an amazing world. Some facts that excite me around the globe:
Japan’s continual renaissance. From the ashes of World War II, through the deflation bomb of the 1990s, Japan remarkably reinvents each generation. As one example, Tokyo is now among the world’s most exciting and livable major cities, a wonder of technology and culture.
India’s infrastructure boom. As noted in a previous column, the country’s investments in rail and roads have grown roughly tenfold since 2010. India has almost 800 million Internet users.
Indonesia’s EV and battery future. Look past Indonesia’s commodity riches and you see an emerging giant in EV and battery production. No wonder many Indonesians are optimistic about the future of their country.
China’s healthcare innovation. China’s problems are well known. It’s easy to miss the quiet revolution in life sciences and healthcare underway in the country.
Africa’s emerging common market. Economies are ecosystems, and Africa is finally building a common market that will be a platform for growth and prosperity.
America’s high-tech manufacturing leap. The next trillion-dollar markets will be built at the intersection of bits and atoms—think robotics, graphene, etc. As Warren Buffet said, never bet against America. The country will rise from its current malaise.
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