Creating Intelligence and Greatness, Preserving Wealth

your Saturday roundup

Professionally, I focus on creating social benefit startups. In my Saturday morning emails I share what I’m learning and thinking. Topics range from better living and parenting to business and philosophy.

I hope you got some rest during the break. Apparently, I used the time to make a longer newsletter. Enjoy!

1. History of Intelligence: Here’s a book right up my alley: A Brief History of Intelligence which combines two fascinating topics: the functional engineering of biology and the evolution of artificial intelligence. It reminded me of The Vital Question and On Intelligence. Biology is an existence proof that intelligence can be built. What are the engineering problems solved by evolution? It’s helpful to know, even if we aren’t going to copy the solutions. In some cases we should and have copied the solutions. For example, some of the milestones the author highlights:

   1. Steering - Early organisms developed the ability to navigate toward food, integrating multiple signals (e.g., light and chemical gradients) to decide how to act.

   2. Learning from Actions - Conditioning (for example) allowed brains to remember which actions succeeded and repeat them.

   3. Simulating Actions - Brains next evolved the ability to imagine multi-step action paths such as planning a hunt.

   4. Learn from Other Peoples Actions - Observing and imitating peers, like tool use, accelerated learning.

   5. Learn from other people’s simulations (their thoughts) - Humans uniquely learn from others’ thoughts via language, which unlocks cultural evolution and knowledge accumulation.

These evolutionary milestones not only illustrate the complexity of intelligence but also offer inspiration for artificial systems. Today’s AI systems, like large language models (LLMs), lack theory of mind and the ability to simulate reality. While they appear to “understand,” they’re limited by their reliance on manipulating symbols. As multimodal training and other capabilities expand in AI systems, we’re likely to see significant advances.

2. Creating Greatness. Can breakthroughs in science and innovation be planned, or do they emerge naturally? On an individual level, the right training, hard work, and prolific output make a difference. Societally, incentives, funding, group coordination, and the right tools create fertile ground for innovation. The Institute for Progress argues that we can create the conditions for greatness. I’m inspired by pragmatic steps we can take today to move towards important ends. The authors of Why Greatness Cannot Be Planned challenge this view, advocating for curiosity-driven wandering rather than rigid objectives. While this might sound like an academic’s plea to be left alone to their unfocused work, it highlights an important truth: curiosity can drive discoveries that unlock new possibilities. In this view, curiosity itself becomes a kind of objective function (explore vs. exploit). When we make new discoveries we create more adjacent possibilities that others can combine to create the next breakthrough. There definitely are examples from the history of innovation that support their view. Perhaps the answer lies in combining the two approaches—structured support for curiosity-driven exploration. What do you think?

3. Investment Risks. I was intrigued by this model of investment risk for institutions I heard recently.

   1. Short Fall Risk - Not having enough to cover expenses

   2. Drawdown Risk - Can you live with volatility? This is both a behavioral and practical budget question.

   3. Liquidity - Do you have variation in your spending that will require you to pull from the investment portfolio unexpectedly?

   4. Variance Risk - Are you able to survive different investment outcomes than your peers?

   I think it’s interesting to contrast with risks for the typical VC fund: not raising the next fund and not investing in the 1000+ bagger that year. Or risks for investing family wealth (ala Hughes) including:

   1. Long Term (shirt-sleeves to shirt-sleeves in 3 generations)

      1. Failure of family governance

      2. Failure to manage all forms of capital (human, etc.)

   2. Intermediate

      1. Overspending

      2. Inflation

      3. Creditors

      4. Estate & Wealth Transfer Tax

      5. Disability: Loss of Personal Labor Earning Power

      6. Health: Sickness & Non-Communicable Diseases

      7. Changes in Political and/or Monetary System

      8. War

      9. Death

      10. Divorce

      11. Malthus’ Law - the geometric increase of family members in each generation

   3. Short-Term

      1. Market Fluctuations (aka Volatility in Investment Returns)

      2. Income Tax

      3. Lack of Education

      4. Lack of Personal Drive

Until next time,

Miles

P.S. Do you know someone at a membership organization that would want to help members get jobs and/or training? I want to talk to them.