Jonathan Brun

When is enough enough?

One of the biggest challenges in life is knowing when to stop. In general, when something is going well and feeling good – we want more of it. There is this natural desire to expand the good things in life and extrapolate from where we are. I once saw a funny video on France Inter (that I cannot find) of a comedian explaining that the key element to having a good time at a party is to know when to stop drinking or consuming drugs. Far too often we start having a drink and then feel that lovely buzz, our brain – simple creature that it is – then tells our arms and mouth to have another and another and another and then it does not feel so good. The key element to make the party and the alcohol a success is to have the ability to say – stop, we are good here!

Our actions with money and work follow a similar pattern. We start making some money and buying pleasurable things and experiences. Our brain says – wow, that was great, lets work some more and spend some more. This puts us on a treadmill of earn and spend that frankly has no limit. Knowing how to tune that treadmill for the ideal pace is the crux of the challenge. We have all come across headlines of that 30 year old who retired after they saved every penny, they live in a micro house and only eat rice – but this extreme example of frugality is hardly applicable to the average person (let alone family) and abstinence of human pleasure is unlikely to inspire vast majority of us mortals. It is a bit like saying, “work out 8 hours a day and you can get to the Olympics” – not really applicable to the average Joe (not me at least). At the other extreme of this frugality are those who earn a sizable income, but then spend it all. I have seen and heard of many people who have apparently luxurious life styles – nice cars, fancy restaurants, big houses, designer clothes – but live on the precipice of bankruptcy. Like the fable of Goldilocks, the trick is to find the bowl of porridge that is not too hot and not too cold, but just right. This is much harder than it seems.

Good things have powerful effects on the body. The release of adrenaline during extreme activities or the release of endorphins during pleasurable experiences drive us to want to reproduce and augment those feelings. And, in some sense, there is a catch-22 in certain activities. To earn a lot of money, you often need to love money. When you love money you always want more. Similarly, in extreme sports – you need to love the thrill of jumping off a cliff or flying through the air to start in the first place and once you are on the bandwagon of extreme sports it can be as challenging to get off as if you were taking hard drugs. In the excellent movie, Lost World of Z, which is based on a true story, British explorer Percy Fawcett travels to South America in search of the source of a river and eventually a lost city. His first trip is a roaring success with archaeological discoveries and the safe return of his crew. With his newfound fame, sense of confidence and desire to go deeper into the jungle he leaves England with a new crew in search of a lost city. The second trip does go deeper into the jungle, but they do not find the lost city and the trip is more or less a disaster. At this point Percy Fawcett could settle into a comfortable retirement and spend time with his family. Instead, he decides to embark on another trip with his teenage son to try and find this lost city of Z. (Spoiler alert) Both Percy and his son disappear on this trip and never return. Simply put, Percy did not know when enough was enough – but maybe that was the point of the story.

Sports athletes who play past their prime, politicians who overstay their welcome and celebrities who fail to recede from the spotlight are all examples of our human foible of addiction. Power, money, fame are as powerful as any drug. The most extreme cases of these excesses are the tragic cases of suicide and mental breakdowns. It is easy to point to these famous people and say, “I am not like that” and indeed, most of us do not have substantial power, money or fame. However, we all have some level of power, money and fame and it is often more than we actually need or want. I recall an aging family man who had accumulated a beautiful house, a cottage, cars, boats and other man-toys. Despite his high income and and good health, he found himself spending most of his time making bill payments and taking care of his possessions. When he visited his university aged son in his student apartment, he marvelled at the simplicity and at the happiness his son exhibited. Of course his student’s detachment from material possessions was largely driven by his limited means, but the impact of his limited responsibilities naturally had a very liberating effect on his son. To a certain extent, movies like American Beauty hit on this theme, but I personally love The Onion article, “Executive Quits Fast Track To Spend More Time With Possessions” – it makes the obvious omission of his three children.

I suppose the the ultimate challenge here is not to know when to stop, that is very challenging, but to know what success looks like. The task at hand is to determine what you want. To live fully, we must be explicit in our desires with both ourselves and those in our lives. Creating clarity in our aims, plans and desired ultimate outcomes allows us to set boundaries. Lives and relationships that fail are often ones where people did not take the time to outline success and were afraid to discuss their limits. Sometimes that fear of discussion is due to social pressure or anxiety or insecurities that we have accumulate over time, but there is no good outcome when you keep your true desires hidden from others. If you do not create clarity of your desired life, others will impose theirs on you and your life will become theirs – if only partially. Parents do this to children all the time, families do this to their members and bosses do this to staff on a regular basis.

Numerous studies show that people have no increased happiness past a certain income level (though a new study casts some doubt on that). Well being and happiness are challenging topic, which this blog post certainly cannot adequately address. Regardless of the money required to feel good in life, it is clear that our society generally heaps praise and admiration on those who reach the greatest heights in wealth, fame, or sport. This culture of venerating excess is somewhat linked to the marketing industry and our consumer economy, but even before the modern era human society placed disproportionate fame on those who went to the extremes of the human condition. Religions venerated martyrs, armies promoted heroic battle, kings promoted chivalry and beauty (especially female) was always top of mind in all societies. Humans have an innate desire to always want more and that is perhaps the greatest driving force for the development of society. It has pushed us to invent, create and build and it has led us to attain levels of security and comfort that no one could have anticipated. Having attained a certain level of comfort for many, we must focus on improving comfort for those who do not have it and thinking about a broader challenge of setting the stage for the next evolution of civilization. Today, with our environmental challenges and our mental health crisis it is time for us to spend more time on helping people understand when enough is enough.

Published on August 12, 2021

On Housing – Land (Part 1 of many)

There is a story that the Talmudic sage Rabbi Hillel was confronted by a person who wished to convert to Judaism. Asked how he could go about such a religious transformation, the Rabbi responded, “”What is hateful to you, do not do to your neighbour. That is the whole Torah; the rest is the explanation of this—go and study it!”. Put another way, he said that do unto others what you would have them do unto you, the rest is commentary. In many ways, housing is a fairly similar in both its simplicity and its complexity. I think that the current housing issues can ultimately boil down to “housing prices are supply and demand, everything else is commentary”.

While the reality may indeed be that the housing market determines the housing prices, the truth is that many cities and countries are paying a steep price for exorbitant housing prices that are driven by market failures. In Canada, where this crisis is particularly bad, over 3.3. million families are contributing over 30% of their revenues to housing. Historically low interest rates have allowed many people to get into the housing market and have kept payments under control. However, it is well understood by homeowners, government and policy makers that increased borrowing costs would likely drive many families to the brink. One argument homeowners provide for spending so much money on housing is that their home is an investment. This is patently false. Any home is a physical thing and as such, it degrades. Even with regular maintenance and upkeep, a physical object will always be in worse shape than when it is originally built. Just think of cars – how many cars appreciate in value over time? So, if houses themselves are not appreciating in value – what is? Land. Land in desirable locations with the ability to have a house (physically and legally) is the element of this equation that is continuing to appreciate. Of course, housing without land is not possible so the two are tightly interlinked, but it is ultimately the land that is the constraining factor. We cannot make more land and the right to build has come under increasing regulation which reduces the ability of people, companies and organizations to build cost effectively. There are many solutions to this problem, but the real problem is the collective will power for us to change.

On the surface, it is easy to chalk up high housing prices to a failure to build new homes faster than population growth and the degradation of the housing stock. New construction shortages are well documented (Scotiabank report). These shortages are due to a number of factors – land availability, labour availability, capital availability, construction material and regulatory hurdles. On the question of land restrictions, which are substantial, it should be noted that cities like Toronto, Vancouver, New York, San Francisco, Shanghai, Paris, and others all have physical limitations (oceans for New York, Shanghai, San Francisco, and Vancouver or a big Lake for Toronto) or political limitations (intra-muros for Paris). Cities with less physical limitations – such as Montreal, Phoenix, Dallas, Austin and many others can expand in all directions – which significantly helps facilitate construction and therefore housing prices. When compounded with population growth, these physical limitations are likely a substantial portion of the cause of high housing prices.

If we put aside land restrictions, there are still many other factors that lead to high housing prices – the free-market capitalist ownership model, building costs, increasing size and obsession with homes as central to people’s identity and many other factors. This post cannot address all of these complex and intersecting issues, but suffice to say that the solution to the housing crisis is first and foremost: Build homes faster than population growth. Once we accomplish that, we can begin to talk about alternative ownership models and other factors. I will end this post with a few resources that have shaped my thinking on housing.

How Vienna offers affordable housing (see Singapore too!)

Construction Physics Substack

THE GEOGRAPHIC DETERMINANTS OF HOUSING SUPPLY – ALBERT SAIZ 2010, MIT Press

Published on August 8, 2021

Economic Model Fallacy and Risks for Basic Income Movement

Preface

This short essay is a collection of thoughts on economic models in general and their utility for the advocacy of basic income. The subject of the economic impact of a Universal Basic Income (UBI) is perhaps covered elsewhere in the literature, if so I would be most interested in learning about it. 

In 2020, UBI Works, a Canadian non-profit organization for which I am an advisor commissioned an economic modelling report on the effects of basic income on the Canadian economy. This agent based model was developed and simulated by the Canadian Centre for Economic Analysis. The report models three possibilities: continuation of the status quo, the Ontario basic income pilot and the UBI Works proposal. The UBI Works proposal is for a universal 500$ a month dividend and a $1500 a month minimum income guarantee for all Canadians 18 years and older. This essay is a collection of my thoughts on the use of this report for advocacy, lobbying and organizing.

Let me be forthright and clearly state that I am somewhat prejudiced against economic modelling or modelling of human behaviour in general. My underlying suspicion is you can get a “model” to say many different things. When political opponents argue over the economic impact of taxes we are effectively arguing over an economic model. The fact that models can be twisted to say different things undermines credibility of the model in the eyes of non-believers and on the flip side, it gives a false sense of confidence to the believers of whatever the model claims to show. In addition to the fact that the underlying assumptions of a model can potentially change there is also the significant element of the potentially vast number of items that were left out of the modelling. For example, did the model account for labour market changes, impacts of tax changes, disincentive to work due to behavioural change on specific groups within the labour market? The possibilities are endless and with a generalized model of the entire economy it is near impossible to accurately predict the impacts of major policy changes that would affect everyone. 

The main places where I have been exposed to complex models have been in Life Cycle Analysis of products and services, in climate change and in modelling the stock market. In all three cases (but especially the latter two) these are models of human behaviour on a vast scale with innumerable underlying variables and assumptions. The issues I have seen with these models is that you can change a small set of variables and have a huge impact on the outcome of the model. This large variance in consequences based on changed inputs referred to as the butterfly effect where the wing flaps of a butterfly on one side of the world leads to a hurricane on the other. The underlying science of the butterfly effect is Chaos Theory which remains both fascinating and scientifically sound. When you affect change on the scale of a full UBI it is probably impossible to predict the effects across all the facets of society.

On the one hand, basing our arguments on economic growth allows us to confront UBI challengers’ criticisms that a UBI would bankrupt the country. On the other hand, using a complex model opens up to new fronts of opposition and criticism. It will also change the discussion from one about rights and freedoms to one about GDP and government debt. Which argument do we want to have and which argument can we win in the eyes of the policy makers of Canada and the Canadian public?

Is Basic Income an economic, a social or a political challenge?

To be fair, most big issues are a combination of social (philosophical), political and economic rights. These three are more often than not intertwined in a myriad of ways. However, it is critical to determine which type of challenge we are facing and adjust our strategy and tactics in accordance. 

A social problem is one that primarily affects relationships between groups of people based on features specific to those people and who they are. One such example could be LGBTQ rights. This group was discriminated against based on their sexual orientation and it took a social movement to change this. Generally speaking they did not experience political marginalization or economic repression due to their sexual orientation. They were however prevented from fully expressing themselves and being accepted as complete members of society. This has recently changed thanks to decades of arduous work. 

An economic problem is one where the primary issue is access to capital and revenues for a group of people. It can also be a situation where certain people are subject to more difficult economic situations and require additional support to excel and fully participate in society and the economy. One such example could be single mothers who require additional financial support from their ex-partners or from the state to raise their children such that their children are healthy and can access the same services as their peers. Another example of economic challenges could be the right to strike or form unions. This has political elements, but a worker who cannot strike is a worker who is bound to a job and has his economic opportunities repressed due to a lack of capital.

A political situation is one that is primarily about power. The distribution of powers between the federal government and the provinces is a political challenge. The distribution of power between the state and the individual is ultimately about politics. Women’s right to vote was a political problem when it was finally resolved in the 20th century. The relationship between voting groups on key issues such as taxes and other items is a political problem. Unlike a social problem, in a political problem you cannot make everyone happy and compromises must be made between the different groups. This last point is why so many political changes happen incrementally and not at once. Big changes upset too many people (sometimes bigger changes are better though).

In my opinion, basic income is primarily a political reform program. While a basic income will have a massive impact on the economy, it is first and foremost a political challenge because it is ultimately about a transfer of power from the state to the individual and from the wealthy to the poor. If you tax the wealthy and distribute the money through a basic income or if the government takes on debt (prints money) you will be reducing the political and economic influence of capital holders (this is currently happening in 2021). Both approaches to changing the economic balance have their pros and cons which must be carefully evaluated. No country can easily impose massive new taxes or print substantial amounts of money without significant internal and external political consequences. 

In general, political reform is enacted by those in power due to pressures from an organized political movement or through decisions by leadership. It is therefore critical that UBI advocates either gain the strong support from those in power for basic income, place our own advocates in power, build a wide scale political movement or a combination of these three approaches. The current Liberal government of Canada is potentially the most pro-UBI government in Canadian history. With Prime Minister Trudeau and Chrystia Freeland at the helm, there is a strong desire to help the least fortunate and neither the prime minister or the finance minister are fiscally conservative. Additionally, Jean-Yves Duclos is the president of the Treasury Board and a long time advocate of UBI. Lastly, the balance of power is currently held by the left leaning NDP who are sympathetic to UBI. The need to transition the economy through the COVID pandemic is yet another excuse to enact UBI. The current COVID crisis has conclusively shown that the government can dramatically increase debt and can act quickly when required – two key ingredients for the implementation of UBI. That being said, there remain massive political, historical and psychological hurdles to the implementation of a true UBI in Canada.

The most successful political reform is incremental in nature and not revolutionary. Very rarely do systems in established and developed countries radically change in peacetime. Attempts at major overhauls of systems inevitably come up against vested interests and inertia. One recent example is the controversial overhaul of the American Healthcare system. After numerous attempts and decades of effort by very powerful people, Obama was finally able to squeak in a program that kept insurers, companies, and many citizens happy. It also upset a lot of people and is currently being attacked by the right. In the case of Obamacare the vested interests of the healthcare industry are very powerful. These same forces are trying to overturn Obamacare and they may very well succeed. A true basic income, like the one UBI Works is proposing, is a reform of an even greater magnitude than Obamacare. Like that battle, we are facing very strong vested interests in the current non-basic income world. We would be fools to underestimate or dismiss the vested interests aligned against UBI.

Too many UBI advocates assume the locaI is clear and the evidence is overwhelming. When I ask UBI advocates why no country in the world has a true UBI, I get a variety of responses that could be summarized as “governments have just not seen the light”. Like many progressive initiatives, advocates make the fatal error of presuming that others will agree with them if only they had access to the same information. This presumption has sunk more progressive political movements than any other reason. The reason we do not have UBI anywhere in the world is not simply a question of inertia, ignorance or laziness. 

Politicians and power brokers have strong vested interests that will not be simply overcome with logical arguments and evidence. If it were that simple, we would be tackling climate change, offering free university tuition, higher minimum wages, free medical assistance and low cost housing. In Canada we are failing to do most of these things despite clear and compelling economic evidence that we should. To affect political change we need to do many things, but one critical element is to present our program in a new light that casts it as a different solution than traditional welfare solutions. We also need to demonstrate how UBI is an evolution of the current system and not a radical departure. These two seemingly opposites – novelty and continuity – are critical to obtaining establishment support and mobilizing new people.

The UBI model that allows us to achieve this balance of new and old is a basic income in the form of a dividend. A universal and unconditional return on our common assets is a new and innovative way of viewing government and citizenship without upsetting the elite. It also reflects our common understanding of the concept of shareholders in a corporation who receive dividends from the profits of an operating business. In my opinion the dividend model is the most politically viable option as it breaks the traditional welfare state program model without seeming too crazy. It is no longer about tax and spend, wealth transfers, government debt, or bureaucracy – it is about becoming a shareholder in our common future. A dividend form of UBI offers a new narrative and a new way of proposing basic income. UBI Works proposes such a model, but it does not specify that it has to be funded through common assets. This is a risky approach as the most powerful vector of attack on a UBI is its funding model. Due to the massive scale of a UBI program, you simply cannot separate the proposal from the funding model. Without a defined funding model we will be rightfully attacked as just another welfare program. Offering a “pick your own adventure” list of potential funding sources, as UBI Works has done, is appealing because it gives the impression that UBI can be supported by a wide base of people. However this path of vagueness will inevitably lead to internal conflict and battles as we approach our goal of a UBI. Instead of fighting over UBI, we will fight over funding models and that may very well sink the entire endeavour.

Nearly all debates are won or lost on the underlying assumptions that are snuck into a debate (see this excellent Youtube video). The way you frame an issue determines how people will think about it. When abortion is framed as “killing babies” you elicit a very different emotion than when it is framed as a health or women’s rights issue. If we frame UBI as an economic issue, people will rightfully question if UBI is the best way to improve the economy. 

Returning to the specific economic model commissioned by UBI works and conducted by CANCEA, we need to carefully analyze the frame that it sets up for our advocacy. Once the debate over UBI is framed in the minds of citizens and politicians, it will be very difficult to change. Once that is done and we are faced with options within that frame, it is near impossible to break free.The challenge I see with this economic model, beyond the challenges inherent in any large scale economic model, is that it is proposing a tax and spend model for basic income. The model seems to favour little to no government debt despite record low interest and the emergence of modern monetary theory (MMT). I am curious why the model comes to the conclusion that government debt is the bad way to go. Regardless of the reason, if we propose this economic model as the best economic policy option for UBI – this proposed model is in fact proposing the largest tax increase since 1940.

The model does show that the basic income program will create many new jobs and good GDP growth. While this seems like a good outcome, I would argue that there are lots of ways to spend 230 B additional dollars per year that will generate jobs and GDP growth. We could invest 230 Billion more in research and development, universities, startups, on export oriented activities, or myriad of other programs in place to distribute this type of investment. Yes, UBI will solve poverty and create economic growth. However I like to remind people that the government’s priority is not to eliminate poverty. If it were, we would have done it. Government priority will always be to create security and to increase economic productivity. Poverty is viewed as a nuisance or a cost of doing business. We do not need an economic model to show that UBI is better than nothing – we know that. We need a model to show that UBI is better than the alternatives with the same resources allocated to them. 

If an economic model is not that helpful for the UBI case due to the underlying variability in the model, the tax and spend approach or the lack of a comparison with a similar sized investment – we should carefully think if this advocacy tool will harm or help us. Can the economic model hurt our efforts for UBI? The model is likely to help convince a few people and most likely to be appreciated by people who are already firm believers in UBI. My biggest concern is that the model becomes a red herring that will distract us from the core mission of moving the voting population on the issue. 

At a broader level I do not think voters ever vote based on economic programs. Beyond taglines such as cutting government tape or improving medicare, how many people are mobilized by economic reform and GDP growth? We may think that policy makers and the government are mobilized by economic reports and to a certain extent they are. However, it is ultimately politics and votes that determine if a policy will be adopted by the government. Does UBI get the government votes or risk losing parts of the population? A government is supposed to guide the country towards prosperity. However the government must do so within the constraints and established interests of the donors and the electors and the mood of the day. They also typically do not have the time for massive overhauls of programs – if they did, we would have resolved many known problems with our welfare state by now. No one operates in a vacuum – least of all government.

When US civil rights leaders famously met with Franklin Delano Roosevelt and asked for political reform, FDR replied, “Make me.” Ultimately this is the task of the UBI movement – we must make the government put UBI in place. We should have no illusion – there are powerful forces aligned against UBI. To put it frankly, there is no way an increase in government spending of the magnitude required to fund a full UBI will appeal to fiscally conservative or wealthy people. Wealthy people (in which I include the top 10%), have one overriding interest – protect their assets. As cynical as this may seem it bears out time and time again. With the exception of inheritors, the majority of the wealthy class earned their money by being a professional. Their perception is very much that they deserve what they have. The wealthy are interested in policy changes, but only if it means little to no change to their status or way of life. If we propose UBI as a radical redistribution of wealth it will go nowhere. If we propose to take away RRSP and TFSA and other tax advantages there will be massive political push back and I doubt any serious politician would dare to propose that. If we print money at the rate we are doing now the lions of austerity will eventually rear their heads and roar with all their might. In short, it is extremely hard to take things away from people – especially powerful people.

My purpose is not to undermine the hard work and investment the basic income movement is making in this economic model. Hopefully some of the points above illustrate the risks of promoting the study that links 230 billion in new spending to theoretical jobs, growth and massive tax increases. Ultimately we need a clear strategy to advocate for UBI and the strategy cannot be “try to make everyone happy” because we all know that is not possible. The famous definition of strategy by Michael Porter is, “deliberately choosing a different set of activities to deliver a unique mix of value.”. How does this economic model define our strategy and establish the frame of the public debate? Will this economic model convert the unconvinced, bring in new allies or block attacks from opponents? We must carefully analyze the consequences of an economic argument for UBI – there are many – but the way we frame it will set the stage for the grand debate to come.

Tiny Reference

(NY Times)

Published on April 24, 2021

Management Principles

I began my company, Nimonik, in 2008. Since then I have learned a great deal about management, people, challenges and issues. There are already thousands of books on management and I recommend some on my Recommendations page. Whenever I think of management I think of the television show The Office (US Version). The main character in the show is a bumbling office manager with a big heart and a bit of a slow mind. Despite his gaps in competence and sometimes questionable judgment he turns out to be the best manager at the office. In one episode, he reveals that he is working on his very own management book. He has titled the book, “Somehow I Manage” and all the pages are blank. This is the best explanation of management I have ever heard.

In all seriousness, the few management principles that I have learned (the hard way) are as follows. This list is likely to change over time…

  1. Hire motivated people and do not demotivate them.
  2. You cannot manage people, you can only manage performance. Hold people to performance standards and ignore almost everything else.
  3. Different people want very different things in life. Figure out what the person wants (just ask them) and then give them that if you can.
  4. Hire people for the skill you need. Ignore all their other merits and defaults (up to a certain limit). Do not hire people for their overall skillset – hire them for JUST skill you need.
  5. Do not promote people who do not want to be promoted.
  6. Establish a pay scale that is clear and transparent for all. We have a scale with technical and management points that combine to determine your pay scale.
  7. If someone is creating negative energy in a work environment, remove that person or get them to stop creating negative energy.
  8. If you are a boss, do not try to be friends with your staff (this varies based on levels of seniority). If you are a business owner, do not try to be friends with your staff. Leave your staff space to have fun without you.
  9. Set the example.

This list will surely grow over time and these ideas and tips come from various people, experiences and books I have had the pleasure of meeting. I never took a management class in my life, except the class recommended by the great Michael Scott- the school of life!

Published on March 20, 2021

On Tesla, Electric Cars and Sustainability

The planet is in an ecological crisis. Global warming, pollution, plastic in the wild, wildlife extinction and many other environmental issues are the symptoms of a society that is living beyond its means. Generally speaking there are three main ways we can tackle this existential crisis. I would generally say that most people fit into three categories with regards to our environmental issues. The largest and most important set mostly ignores the crisis and keeps on living. Eventually something will break and civilization will no longer be able to maintain its current level of quality of life, but until then all is honkey dorey. The second and perhaps most vocal set of people are the degrowthers. This group believes that the solution is to consume less goods and services, live in smaller homes, eat organic and even have less children. This group is small as a percentage of the population but they often get the most media attention and draw the most ridicule from the first group of people. The third set are the technologists or high modernists who believe that technology can solve our problems. This set points to our transition away from whale oil, coal heating other outdated technologies to show that yes, we can make a transition to clean and efficient technology. This last group is probably the smallest, but has the most power to move society forward.

People are change averse. For a variety of biological and societal reasons most people lean towards conservative policies. I do not mean right wing policies, though the two can be conflated, but rather maintenance of the current system. The vast majority of the population looks at the way things were, the way things are and can extrapolate a bit – but they cannot see very far past a short term change. We have only to look at all the industries that have been upended in the last 20 years – digital cameras, music (iPod), retail stores (Amazon), cars (Tesla), movies (Netflix), to see that despite clear signs of potential applications of technology – most people and companies did not see these radical changes coming.

Not not only do people resist change, some people actively resist it. In the case of Tesla and electric cars it has completely blown my mind the levels of active resistance to electric vehicles. I have followed Tesla very closely since its inception in 2006. The resistance to Tesla, especially between 2006 – 2017, was ENORMOUS. I cannot stress this enough. Tesla was undercut by the media in a famous article in the NY Times as well as on the popular car television show Top Gear. These two articles (and others like it) were hit jobs on Tesla and aimed to destroy the credibility of Tesla and more generally, electric cars. I do not think they were in cahoots with the oil industry, but the authors certainly demonstrated active resistance and a desire to destroy an idea. In many ways, this hit job was reminiscent of what the media, public and government did to the first mass market electric car, the GM EV1. The death of that electric project was well documented in the film, “Who killed the electric car?“.

While the media was attacking Tesla an even greater foe tried to kill it. The finance industry took unprecedented short positions against Tesla. They sold Tesla stock without owning it in an attempt to crush it. I ask, what is more evil than crushing a sustainable future for our children using your financial power? I had numerous arguments with short sellers including friends and family who all bet and hoped that Tesla and electric cars would fail. It drove me completely insane. Who is against progress you ask? The culprits start with financial interests but extend to a more general conservative public. This aversion to change and lack of imagination is the primary force that has held up most of human progress.

To overcome these massive obstacles there were two options – government support and building a dramatically superior product with impeccable strategy. The only country that has taken an aggressive pro-EV position has been China. Many countries have offered a variety of tax credits,loans and subsidies to the electric car industry, but no country has done as much as China. Today, China has millions of EVs on its road and number is growing very fast. Their policy forces companies to produce and import EVs and local governments have strong incentives to deploy electric buses. In general, the EVs in China have not been of the quality of a Tesla, but they have produced much more – from scooters to articulated buses. That being said, companies such as Nio and BYD are fast catching up to Tesla. Tesla’s strategy was outlined very clearly in Elon’s ten year plan (original (2006), part 2 (2016)). Their plan to build high performance electric cars that were sexy and that had fast recharging stations has worked, but it is only just a start. The larger effect of Tesla is that it forced the biggest producer to commit to EV (Volkswagon) and has pushed others (GM, Ford, Hyundai) to head in that direction too. Tesla also encouraged a series of startup car companies with great promise (Rivian, Nio, and others). In short, China and Tesla are responsible for converting all transportation to electric vehicles. I believe that most new cars will be electric by 2035 and thank god/Elon/XiJiping for that.

Electric cars alone cannot save the planet (they will likely reduce greenhouse gas emissions by 14% and improve smog and respiratory issues in cities dramatically), but they are a key driver. We also need to switch energy production to clean energy (mostly solar + batteries) and improve conservation of wild spaces and wild life. We also need to make our food chain more sustainable (less meat) and convert our homes to the Passiv high energy efficiency standard. The broader point is that we need to develop technology to allow all humans to live sustainably with high quality of life.

Beyond greenhouse gas benefits, a shift to clean transport and energy would dramatically improve air quality and reduce respiratory illness. The World Health Organization estimates 7 million people die of air pollution related disease every year and millions more suffer respiratory illness – especially children. Despite the obvious benefits of switching transport and energy production to clean energy, it is has been remarkably difficult for the public to grasp this benefit. The battle to remove lead from gasoline was a agonizing fight by a small group of scientists. Lead causes brain damage in children. Despite overwhelming evidence that lead was being emitted on a massive scale by cars, the car manufacturers and oil industry and the government did not want to remove lead from gasoline. Only after a massive fight was this important environmental and human health milestone accomplished. It still boggles my mind how many obstructive cranks there are in positions of power (maybe it shouldn’t be a surprise).

The other proposed solution to our environmental problem is to reduce consumption and return to the earth. While we could do this – almost no one wants to. Civilization is cool. I personally enjoy the benefits of modern medicine, air travel, large well heated homes and all the other benefits of civilization. The hard truth is that humans want an continuously improving quality of life and any philosophy that goes against this will never take off with the general public. It is perhaps for this reason that the fight against climate change has struggled to take off – it is too often conflated with a reduction in our quality of life. Authors such as George Monbiot and Naomi Klein do not help. They highlight the problems and propose solutions such as population reduction, vegetarian diets and no air travel. That ain’t going to fly. The most poignant example of the lack of viability of such a strategy is the famous implosion of Jimmy Carter’s presidency when he implored Americans to put on a sweater during the Oil Crisis of the 1970. Instead of putting on a sweater, they massively voted him out.

The battle for human progress is long and painful. Tesla shows that is is possible to change one of the largest industries in the world – but it takes superhuman effort and a certain alignment of the stars. If Tesla did it for cars (and solar roofs and backup battery systems), then we can do it for the other areas that need to be made sustainable. To me at least, this is a deeply emotional challenge – we are genuinely talking about the future of humanity on planet Earth!

Published on March 14, 2021