Las Vegas casinos do a lot of stuff to mitigate risk, especially risk of theft. Just look at how many cameras they have above you next time you're walking through a casino.
People will try to cheat or steal, which causes you to lose money, so you monitor them, reducing your risk.
But the biggest losses casinos have failed to prevent tend to be anything but predictable. An example, courtesy of Nassim Nicholas Taleb in his book The Black Swan:
First, they lost around $100 million when an irreplaceable performer in their main show was maimed by a tiger (the show, Siegfried and Roy, had been a major Las Vegas attraction).
The tiger had been reared by the performer and even slept in his bedroom; until then, nobody suspected that the powerful animal would turn against its master.
In scenario analyses, the casino had even conceived of the animal jumping into the crowd, but nobody came near to the idea of insuring against what happened.
Casinos must file a special form with the Internal Revenue Service documenting a gambler’s profit if it exceeds a given amount.
The employee who was supposed to mail the forms hid them, instead, for completely unexplainable reasons, in boxes under his desk. This went on for years without anyone noticing that something was wrong.
The employee’s refraining from sending the documents was truly impossible to predict.
Tax violations (and negligence) being serious offences, the casino faced the near loss of a gambling license or the onerous financial costs of a suspension.
Clearly they ended up paying a monstrous fine (an undisclosed amount), which was the luckiest way out of the problem.
The essential idea in The Black Swan is that rare events cannot be estimated from empirical observation since they are rare.
You can't predict the unpredictable. And I'll bet in recent memory you've heard someone say this:
Who could have predicted the COVID-19 pandemic?
A pandemic? Sure, predictable. But this exact pandemic at this exact time, and the specific reactions of governments and their citizens to this new perceived threat? Not so predictable.
And yet, I can't help but wonder: Why are people so surprised to be surprised?
We cannot predict what will happen.
...and that's my intro to the following 5 things that I suspect — but of course don't know — will happen in this decade.
1. Universities will be decimated
What is the value of a university education?
No, that question is too broad. Let's divide it into three questions.
1. What is the value of attending a highly prestigious (e.g. Ivy League) university?
Connections and prestige. You're essentially paying tens of thousands of dollars per year to be part of a country club. This can pay off quite well if you utilize it as such. It's not for most prospective students, though.
2. What is the value of studying to be an accountant, doctor, lawyer, etc. at a university?
You can get a high-paying job (and a whole bunch of student loans) when you're done.
3. What is the value of attending a university but not for the two reasons mentioned above?
Well, it's a life experience. You leave your home, set off on your own, meet new people, learn new things, have fun.
Right. And is there any reason I couldn't do that by:
- Volunteering to be a free personal assistant for someone who has my dream job?
- Attending a language school in a foreign country?
- Joining an online community of people interested in the same things as me?
- Joining a mastermind, online course, etc. that provides the exact skills I want (i.e. not wasting time and money on "general education")?
- Moving to a new city, renting a room with some people my age, working my ass off at whatever job I can find, and making an effort to be social with new people?
I'm not saying that universities don't train people for other jobs. But they are going to have an increasingly difficult time being the best option for people who want to train for those jobs.
They're still managing this for some professions. But every hungry entrepreneur with a laptop and the requisite knowledge is eyeing a feast for the taking.
Just a month ago, LinkedIn released a list of the 15 jobs "experiencing the highest year-over-year growth between April and October 2020." They grouped them into these areas:
- Frontline Ecommerce Worker — Driver, Supply Chain Associate, etc.
- Loan and Mortgage Experts — Underwriter, Mortgage Loan Officer, etc.
- Health Care Supporting Staff — Pharmacy Technician, Dental Assistant, etc.
- Business Development and Sales Professionals
- Experts in Workplace Diversity
- Digital Marketing Professionals
- Education Professionals — Teaching Assistant, Elementary School Teacher, etc.
- Digital Content Creators
- Professional and Personal Coaches
- Specialized Engineers
- Mental Health Specialists
- User Experience (UX) Professionals
- Data Science Specialists
- Artificial Intelligence Practitioners
I'd say universities or other formal education institutions are only the top current choice for 4 of those 15 fields:
- Health Care Supporting Staff
- Education Professionals
- Mental Health Specialists
But that's less because these institutions are good at teaching and more because you just won't get hired unless you have a degree or certification from them.
For all* of the other professions, you could learn the necessary skills — and become a valuable employee — more quickly, cheaply, and effectively outside of the traditional schooling system.
*I have no idea what "Experts in Workplace Diversity" do, so I can't comment on that.
What will universities do once more effective educators start getting their own certifications and degrees recognized by employers?
Be fucked, most likely. I can't think of any way that they'll be able to compete. The world is just changing too rapidly for them to keep up.
2. A new reserve currency will emerge
People want to save money, but you literally cannot do that right now.
You have cut your expenses, worked hard at your job, and you want to save up some cash. There's a slight problem, though. Your bank pays less than 1% interest, and your government just increased the money supply by over 20% in a single year (this actually happened in the US in 2020). In other words, the value of your money is virtually guaranteed to decrease at a rate faster than 1%.
Your only option to preserve the value of excess capital that you don't want to spend is to invest.
But investing intelligently takes a lot of time and effort. You can't just throw it all in an index fund... unless you won't need it for several years. You can't withdraw it a couple months from now for a down payment on a large purchase.
Why can't I just put money in an account that I know won't lose value?! I don't need a huge return on it. I just want to hold on to it.
Unfortunately, your government wants inflation. It wants to decrease the value of its currency — in no small part because it has trillions upon trillions of debt in that currency, and inflation effectively lowers that debt.
Governments cannot control its value. No one on the planet can create more of it or destroy it. It's a deflationary currency. In other words, it is a limited supply of a store of value that cannot be manipulated.
Bitcoin's price is still volatile at the moment, as it's in its infancy. But as governments continue to erode people's savings, they will continue to protect their savings by putting it into a currency that cannot be eroded. And it's looking like that currency is Bitcoin.
What about other cryptocurrencies? Well, as of now, Bitcoin is the one that has proven that it cannot be affected by the will of any individual. Any currency that can be manipulated by an individual can be manipulated by a government, which makes it no better than any other currency as a store of value (as opposed to a means of payment, for example).
So will Bitcoin become the new reserve currency?
Maybe. But I wouldn't be surprised if governments started putting extreme limits, laws, and fees on the exchange of it in a desperate attempt to maintain control. But if a decentralized crypto wallet emerges, then how would they control that? We get into a game of governments trying to seize control, then having new technology circumvent their control. Things will get worse before they get better.
3. Great migrations will occur
COVID-19 sped up the adoption of a truth that has been obvious for a long time: For a lot of us, commuting to a workplace is a waste of precious resources.
So there I am. I'm working for a company in New York City. They say I can work from home. They don't care where I work as long as I'm available to be contacted during regular work hours — perhaps by being in the virtual office.
Rent in NYC is ridiculous. Taxes in NYC are ridiculous. The amount of effort it takes for me to let my dog out to pee is ridiculous.
Why not move to Panama and pay almost nothing in taxes? It's in the same time zone. I prefer the warm climate. I can pay less rent to live in a fancy apartment on the beach with a beautiful pool, fitness center, and workspace. I could even learn Spanish, finally. What the fuck am I doing in New York still?
Or maybe Panama sounds a bit too scary to me. I could just as well move to a smaller town outside the city, maybe in a nearby state, and just have an all-around higher quality of life.
These migrations have already started. Just look at the great exodus out of California. Why would I pay the ridiculous taxes and cost of living in California when I could hop over to Texas, pay zero state taxes, and actually afford my own house?
4. Social media will decentralize
The algorithm — think: recommendation engines — has caused everything from suicide to genocide.
People get pissed when they find out that Facebook was used to cause an entire genocide of a people. They get pissed when the President of the United States catalyzes a slew of illegal activities with a few tweets. They get pissed when their daughter starts thinking the Holocaust never happened because of a YouTube video.
The executives at these social media companies then say, "Oh shit, you're right. That's not good."
So they attempt to filter, to censor. And they do a fucking terrible job. Because the problem was never the lack of a filter or a censor. The problem was the algorithm, the software that makes the outrageous more visible, that constructs echo chambers.
Their filters and censorships actually make things worse, not better. Now people are also pissed that the information they think is valid and valuable is not showing up.
The executives say, "Hey, give us a break! We never wanted to be in this position! We never wanted to be responsible for what can and cannot be said."
"Hey, you're right," says Techy McSmartGuy. And services like LBRY start showing up, a decentralized library of videos. They say:
LBRY does to publishing, what Bitcoin did to money.
Fuck yeah, says the people. Let me control the value of my savings. Let me control the information I receive. Give me technology that makes it impossible to interfere with these freedoms.
5. Governments will fight over citizens and residents
All of the points above have a central theme: Large institutions will lose a great deal of power in the 2020's, and this includes governments.
Governments don't like losing power. It's all they've got. So they're not just going to let it be taken away. That's like pulling a screwdriver out of the murderous grip of my 2-year-old son — he doesn't like it, and he holds on with all this might.
California is a great example of this. They came up with an exit tax because all the rich people are leaving.
The US does this too. It is the only democratic nation in the world that taxes citizens even if they don't live in the country. (Although others are starting to follow suit.)
So if you're a dual citizen of the US and the Netherlands, you're required to file taxes in the US even if you've never been there. And the US enacted fiscal blackmailing to force international banks to report on all US citizens holding accounts, which is why a lot of banks abroad won't accept US clients now.
"Fuck that," says US citizen who never plans to live there again. So they go to renounce. But the US has raised the cost to renounce citizenship to $2,350 — about 20 times what the second most expensive country costs. And they have a ridiculously high "exit tax" for anyone renouncing who is worth over $2 million.
Codie Sanchez over at Contrarian Thinking summed up the issue here nicely:
When people try to make it harder to leave it’s usually not a good sign. It means they think the value they will give you is less than the value you will give them. Otherwise, they’d have to build a wall to keep people out not in.
And that's why the forward-thinking nations are already working hard to attract highly valuable foreign citizens. The country of Georgia is a good example of this. I never would have even heard of it if they hadn't decided to give everyone 365-day visas on arrival and made an effort to be a highly capitalist nation.
It's why Thailand has it's Elite Visa program, where you can pay them thousands of dollars for permission to live there for decades, all while they turn a blind eye to your tax responsibilities, it would seem.
It's why Panama has its Friendly Nations Visa, which makes it possible to not only get permanent residency, but also citizenship. And they don't tax you on your foreign income. So you could work online for clients abroad and pay nothing to Panama. Don't expect the US to let you get away with that too easily if you're American, though!
It's why Puerto Rico made it possible for rich US citizens to all but eliminate their taxes. (And rich US citizens are moving away from the mainland in droves as a result.)
It's pretty clear to me that the losers will be the ones who are worried about losing valuable taxpayers, and the winners will be the ones who attract them, especially the high net-worth individuals.
In short: If you want people to come to your party, don't be an asshole.
All of the stuff described above can be very scary because all of it entails a great deal of uncertainty.
But it also entails a great deal of opportunity. People 100 years from now will talk about how it was the wild west in the first few decades of the 21st century.
Suddenly these people were hit with the Internet, then before they knew it they had smartphones, artificial intelligence, self-driving cars, and 3d printers. A lot of them complained like little bitches about all of the change and uncertainty.
But some of them put on their cowboy hats and took hold of the unprecedented opportunity all around them.