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The term “leadership” connotes critical experience rather than routine practice. This is suggested in the following comment by Barnard: The overvaluation of the apparatus of communication and administration is opposed to leadership and the development of leaders. It opposes leadership whose function is to promote appropriate adjustment of ends and means to new environmental conditions, because it opposes change either of status in general or of established procedures and habitual routine. This overvaluation also discourages the development of leaders by retarding the progress of the abler men and by putting an excessive premium on routine qualities.[6]  {37}

Men’s and women’s mating strategies differ profoundly. Women place a premium on commitment and all of the cues to commitment, most centrally emotional involvement and love. Men have evolved a greater desire for sexual variety, which produces tremendous conflict between the sexes, for it violates women’s desire for intimate involvement. Because youth and beauty are so strongly correlated with fertility in women, men have evolved a strong desire for women who embody these qualities. Finally, men value sexual fidelity in a partner, for any infidelity on a woman’s part puts her mate’s paternity at risk. Men’s and women’s sexual strategies provide the foundation for the psychological design of jealousy.

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On the other hand, a generous capital market is usually associated with the following: fear of missing out on profitable opportunities reduced risk aversion and skepticism (and, accordingly, reduced due diligence) too much money chasing too few deals willingness to buy securities in increased quantity willingness to buy securities of reduced quality high asset prices, low prospective returns, high risk and skimpy risk premiums It’s clear from this list of elements that excessive generosity in the capital markets stems from a shortage of prudence and thus should give investors one of the clearest red flags. The wide-open capital market arises when the news is good, asset prices are rising, optimism is riding high, and all things seem possible. But it invariably brings the issuance of unsound and overpriced securities, and the incurrence of debt levels that ultimately will result in ruin. The point about the quality of new issue securities in a wide-open capital market deserves particular attention. A decrease in risk aversion and skepticism—and increased focus on making sure opportunities aren’t missed rather than on avoiding losses—makes investors open to a greater quantity of issuance. The same factors make investors willing to buy issues of lower quality. When the credit cycle is in its expansion phase, the statistics on new issuance make clear that investors are buying new issues in greater amounts. But the acceptance of securities of lower quality is a bit more subtle. While there are credit ratings and covenants to look at, it can take effort and inference to understand the significance of these things. In feeding frenzies caused by excess availability of funds, recognizing and resisting this trend seems to be beyond the ability of the majority of market participants. This is one of the many reasons why the aftermath of an overly generous capital market includes losses, economic contraction, and a subsequent unwillingness to lend. The bottom line of all of the above is that generous credit markets usually are associated with elevated asset prices and subsequent losses, while credit crunches produce bargain-basement prices and great profit opportunities. (“Open and Shut”)

Socialism will not make us angels upon earth; it will only put a premium upon our better qualities instead of upon our baser, as is done by capitalism today. And that itself would be worth a revolution to realise, or a thousand revolutions.

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The next time you go to the supermarket, look closely at a can of peas. Think about all the work that went into it—the farmers, truckers, and supermarket employees, the miners and metalworkers who made the can—and think how miraculous it is that you can buy this can for under a dollar. At every step of the way, competition among suppliers rewarded those whose innovations shaved a penny off the cost of getting that can to you. If God is commonly thought to have created the world and then arranged it for our benefit, then the free market (and its invisible hand) is a pretty good candidate for being a god. You can begin to understand why libertarians sometimes have a quasi-religious faith in free markets. Now let’s do the devil’s work and spread chaos throughout the marketplace. Suppose that one day all prices are removed from all products in the supermarket. All labels too, beyond a simple description of the contents, so you can’t compare products from different companies. You just take whatever you want, as much as you want, and you bring it up to the register. The checkout clerk scans in your food insurance card and helps you fill out your itemized claim. You pay a flat fee of $10 and go home with your groceries. A month later you get a bill informing you that your food insurance company will pay the supermarket for most of the remaining cost, but you’ll have to send in a check for an additional $15. It might sound like a bargain to get a cartload of food for $25, but you’re really paying your grocery bill every month when you fork over $2,000 for your food insurance premium. Under such a system, there is little incentive for anyone to find innovative ways to reduce the cost of food or increase its quality. The supermarkets get paid by the insurers, and the insurers get their premiums from you. The cost of food insurance begins to rise as supermarkets stock only the foods that net them the highest insurance payments, not the foods that deliver value to you. As the cost of food insurance rises, many people can no longer afford it. Liberals (motivated by Care) push for a new government program to buy food insurance for the poor and the elderly. But once the government becomes the major purchaser of food, then success in the supermarket and food insurance industries depends primarily on maximizing yield from government payouts. Before you know it, that can of peas costs the government $30, and all of us are paying 25 percent of our paychecks in taxes just to cover the cost of buying groceries for each other at hugely inflated costs. That, says Goldhill, is what we’ve done to ourselves. As long as consumers are spared from taking price into account—that is, as long as someone else is always paying for your choices—things will get worse.

As the smallest drop of water detached from the ocean contains all the qualities of the ocean, so man, detached in consciousness from the Infinite, contains within him its likeness; and as the drop of water must, by the law of its nature, ultimately find its way back to the ocean and lose itself in its silent depths, so must man, by the unfailing law of his nature, at last return to his source, and lose himself in the great ocean of the Infinite.

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Another industry ripe for disruption: healthcare. It’s true that healthcare can claim significant quality improvements in certain sectors—advanced procedures, drug treatments, devices. But many outcomes, like life expectancy and infant mortality, have not improved dramatically. The consumer experience has not improved for most of us. Meanwhile, costs have exploded. The average premium for family coverage has increased 22% over the last five years and 54% over the last ten years, significantly more than wages or inflation.

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When examined through the lens of Meerkat’s Law and the central framework of this book, it is obvious why the resulting networks generated by big launches are weak. You’d rather have a smaller set of atomic networks that are denser and more engaged than a large number of networks that aren’t there. When a networked product depends on having other people in order to be useful, it’s better to ignore the top-line aggregate numbers. Instead, the quality of the traction can only be seen when you zoom all the way into the perspective of an individual user within the network. Does a new person who joins the product see value based on how many other users are already on it? You might as well ignore the aggregate numbers, and in particular the spike of users that a new product might see in its first days. As Eric Ries describes in his book The Lean Startup, these are “vanity metrics.” The numbers might make you feel good, especially when they are going up, but it doesn’t matter if you have a hundred million users if they are churning out at a high rate, due to a lack of other users engaging. When networks are built bottom-up, they are more likely to be densely interconnected, and thus healthier and more engaged. There are multiple reasons for this: A new product is often incubated within a subcommunity, whether that’s a college campus, San Francisco techies, gamers, or freelancers—as recent tech successes have shown. It will grow within this group before spreading into other verticals, allowing time for its developers to tune features like inviting or sharing, while honing the core value proposition. Once a new networked product is spreading via word of mouth, then each user is likely to know at least one other user already on the network. By the time it reaches the broader consciousness, it will be seen as a phenomenon, and top-down efforts can always be added on to scale a network that’s already big and engaged. If Big Bang Launches work so poorly in general, why do they work for Apple? This type of launch works for Apple because their core offerings can stand alone as premium, high-utility products that generally don’t need to construct new networks to function. At most, they tap into existing networks like email and SMS. Famously, Apple has not succeeded with social offerings like the now-defunct Game Center and Ping. The closest new networked product they’ve launched is arguably the App Store, but even that was initially not in Steve Jobs’s vision for the phone.87 Most important, though, you aren’t Apple. So don’t try to copy them without having their kinds of products.

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The premium private label strategy is only possible when manufacturers have allowed a quality–value gap to open. This happens when manufacturers’ either price their brands too high or reduce input costs too much. Both give scope to a retailer to develop an offering of superior value: either same quality at a lower price or higher quality at the same price.

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Within categories, relative price premiums confer a belief that the higher-priced good is, indeed, of higher quality.

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