Episode 67
Bill Janeway | Venture Capitalism and the Future of the Innovation Economy
Episode 67
Bill Janeway
Bill Janeway | Venture Capitalism and the Future of the Innovation Economy
summary
In this week’s episode of Hidden Forces, Demetri Kofinas speaks with Bill Janeway about capitalism in the innovation economy. Janeway is a senior advisor and managing director of Warburg Pincus, where he was responsible for building the investment firm’s information technology investment practice. Bill is also a co-founder and member of the board of governors of the Institute for New Economic Thinking.
In 1948, the same year in which Claude Shannon’s revolutionary paper on information theory was first published in the Bell Labs Technical Journal, economist Paul Samuelson released what would become, the best-selling economics textbook of all time.
Though no one can measure the creative impact of Shannon’s ideas in shaping the next 70 years of innovation and progress in the information sciences, Samuelson’s work is perhaps equally noteworthy for the destructive impact it had on three generations of capitalists, policy makers, and academics. The legacy of the neoclassical synthesis is one of economic theories built on models that borrowed recklessly from the physical sciences, canonized in the works of Samuelson’s Economics.
The failure of neoclassical economics with its dynamic stochastic equilibria and Gaussian-based models like VaR and MPT – peddling false promises of mean regression – have forced academia to rethink the entire edifice upon which our understanding of markets and the economy have been built. A new sort of political economy, driven by the disruptive forces of globalization, financialization, and the information revolution, have made ideological approaches to economic thinking obsolete. In this climate, what Bill Janeway calls “the mission-driven state,” has been rendered illegitimate as an economic actor, disrupting the process of capitalism itself, as well as the credit cycle from which paradigm-shifting innovations are born.
Still, ideas matter. The failure of modern macroeconomic models, to account for the Global Financial Crisis was a precondition for the type of creative destruction that we have seen applied to problems of markets and the economy in recent years. Developing a new framework for understanding the role of government, the power of markets, and the forces driving both is crucial if we hope to survive the changes of the 21st century.
Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
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bio
Bill Janeway is a Senior Advisor and Managing Director of Warburg Pincus. He joined Warburg Pincus in 1988 and was responsible for building the information technology investment practice. Previously, he was executive vice president and director at Eberstadt Fleming. Dr. Janeway is a director of Magnet Systems and O’Reilly Media. He is an Affiliated Member of the Faculty of Economics at Cambridge University.
Dr. Janeway is a co-founder and member of the board of governors of the Institute for New Economic Thinking. He is a member of the board of directors of the Social Science Research Council and of the Field Institute for Research in the Mathematical Sciences and of the Advisory Board of the Princeton Bendheim Center for Finance. He is a member of the management committee of the Cambridge-INET Institute, University of Cambridge and a Member of the Board of Managers of the Cambridge Endowment for Research in Finance (CERF). He is the author of Doing Capitalism in the Innovation Economy: Reconfiguring the Three-Player Game between Markets, Speculators, and the State, the substantially revised and extended new edition of the book initially published by Cambridge University Press in November 2012.
Janeway received his doctorate in economics from Cambridge University where he was a Marshall Scholar. He was valedictorian of the class of 1965 at Princeton University.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ita enim vivunt quidam, ut eorum vita refellatur oratio. Atque his de rebus et splendida est eorum et illustris oratio. Qui est in parvis malis.
Nam de isto magna dissensio est. Quarum ambarum rerum cum medicinam pollicetur, luxuriae licentiam pollicetur. Nam adhuc, meo fortasse vitio, quid ego quaeram non perspicis. Quonam, inquit, modo? Negat enim summo bono afferre incrementum diem. Duo Reges: constructio interrete. Sed id ne cogitari quidem potest quale sit, ut non repugnet ipsum sibi. Aut unde est hoc contritum vetustate proverbium: quicum in tenebris?
Roges enim Aristonem, bonane ei videantur haec: vacuitas doloris, divitiae, valitudo; Ut enim consuetudo loquitur, id solum dicitur honestum, quod est populari fama gloriosum. Nam et complectitur verbis, quod vult, et dicit plane, quod intellegam; Satis est tibi in te, satis in legibus, satis in mediocribus amicitiis praesidii. Ut nemo dubitet, eorum omnia officia quo spectare, quid sequi, quid fugere debeant? Ab hoc autem quaedam non melius quam veteres, quaedam omnino relicta. Hoc loco discipulos quaerere videtur, ut, qui asoti esse velint, philosophi ante fiant.
Neque solum ea communia, verum etiam paria esse dixerunt. Tanta vis admonitionis inest in locis; Quid enim me prohiberet Epicureum esse, si probarem, quae ille diceret? Luxuriam non reprehendit, modo sit vacua infinita cupiditate et timore.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Atque haec coniunctio confusioque virtutum tamen a philosophis ratione quadam distinguitur. Ita relinquet duas, de quibus etiam atque etiam consideret. Respondent extrema primis, media utrisque, omnia omnibus. Omnia contraria, quos etiam insanos esse vultis. Duo Reges: constructio interrete. Multoque hoc melius nos veriusque quam Stoici. Istic sum, inquit. Et ille ridens: Video, inquit, quid agas;
Aliter homines, aliter philosophos loqui putas oportere? Sin kakan malitiam dixisses, ad aliud nos unum certum vitium consuetudo Latina traduceret. In qua quid est boni praeter summam voluptatem, et eam sempiternam? Cum autem in quo sapienter dicimus, id a primo rectissime dicitur. Is ita vivebat, ut nulla tam exquisita posset inveniri voluptas, qua non abundaret. Claudii libidini, qui tum erat summo ne imperio, dederetur. Quod si ita sit, cur opera philosophiae sit danda nescio. Parvi enim primo ortu sic iacent, tamquam omnino sine animo sint.
Primum Theophrasti, Strato, physicum se voluit; Ut non sine causa ex iis memoriae ducta sit disciplina. Expectoque quid ad id, quod quaerebam, respondeas. Et ille ridens: Video, inquit, quid agas; At ille pellit, qui permulcet sensum voluptate. Cum praesertim illa perdiscere ludus esset.
Nec vero hoc oratione solum, sed multo magis vita et factis et moribus comprobavit. Quamvis enim depravatae non sint, pravae tamen esse possunt. Urgent tamen et nihil remittunt. Ad quorum et cognitionem et usum iam corroborati natura ipsa praeeunte deducimur. Quae si potest singula consolando levare, universa quo modo sustinebit? Quam ob rem tandem, inquit, non satisfacit? Plane idem, inquit, et maxima quidem, qua fieri nulla maior potest. Quamquam ab iis philosophiam et omnes ingenuas disciplinas habemus; Facit enim ille duo seiuncta ultima bonorum, quae ut essent vera, coniungi debuerunt;
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Quid enim de amicitia statueris utilitatis causa expetenda vides. Non enim, si omnia non sequebatur, idcirco non erat ortus illinc. At ille pellit, qui permulcet sensum voluptate. Ex quo, id quod omnes expetunt, beate vivendi ratio inveniri et comparari potest. Rhetorice igitur, inquam, nos mavis quam dialectice disputare? Nunc omni virtuti vitium contrario nomine opponitur. Nonne videmus quanta perturbatio rerum omnium consequatur, quanta confusio? Duo Reges: constructio interrete. Dempta enim aeternitate nihilo beatior Iuppiter quam Epicurus; Polemoni et iam ante Aristoteli ea prima visa sunt, quae paulo ante dixi.
De vacuitate doloris eadem sententia erit. Confecta res esset. Sic enim censent, oportunitatis esse beate vivere. Id et fieri posse et saepe esse factum et ad voluptates percipiendas maxime pertinere. Hoc non est positum in nostra actione. Mihi vero, inquit, placet agi subtilius et, ut ipse dixisti, pressius.
Illud mihi a te nimium festinanter dictum videtur, sapientis omnis esse semper beatos; Traditur, inquit, ab Epicuro ratio neglegendi doloris. Cave putes quicquam esse verius. Quae animi affectio suum cuique tribuens atque hanc, quam dico. Ait enim se, si uratur, Quam hoc suave! dicturum. Nunc vero a primo quidem mirabiliter occulta natura est nec perspici nec cognosci potest. Non enim iam stirpis bonum quaeret, sed animalis. Quae cum essent dicta, discessimus. Themistocles quidem, cum ei Simonides an quis alius artem memoriae polliceretur, Oblivionis, inquit, mallem. At, si voluptas esset bonum, desideraret. Eadem nunc mea adversum te oratio est.
Legimus tamen Diogenem, Antipatrum, Mnesarchum, Panaetium, multos alios in primisque familiarem nostrum Posidonium. Sit, inquam, tam facilis, quam vultis, comparatio voluptatis, quid de dolore dicemus? Scaevola tribunus plebis ferret ad plebem vellentne de ea re quaeri. Quid de Platone aut de Democrito loquar? Aliter enim explicari, quod quaeritur, non potest. Sic, et quidem diligentius saepiusque ista loquemur inter nos agemusque communiter. Familiares nostros, credo, Sironem dicis et Philodemum, cum optimos viros, tum homines doctissimos. Utinam quidem dicerent alium alio beatiorem! Iam ruinas videres.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Estne, quaeso, inquam, sitienti in bibendo voluptas? At enim, qua in vita est aliquid mali, ea beata esse non potest. Hoc dixerit potius Ennius: Nimium boni est, cui nihil est mali. Sed quid minus probandum quam esse aliquem beatum nec satis beatum? Nam, ut sint illa vendibiliora, haec uberiora certe sunt. Aperiendum est igitur, quid sit voluptas;
Restincta enim sitis stabilitatem voluptatis habet, inquit, illa autem voluptas ipsius restinctionis in motu est. Duo Reges: constructio interrete. Ita nemo beato beatior. Non quaero, quid dicat, sed quid convenienter possit rationi et sententiae suae dicere. Et quidem Arcesilas tuus, etsi fuit in disserendo pertinacior, tamen noster fuit; Quare conare, quaeso. Quid enim de amicitia statueris utilitatis causa expetenda vides.
Vitiosum est enim in dividendo partem in genere numerare. At ille pellit, qui permulcet sensum voluptate. Nunc dicam de voluptate, nihil scilicet novi, ea tamen, quae te ipsum probaturum esse confidam. Miserum hominem! Si dolor summum malum est, dici aliter non potest. At miser, si in flagitiosa et vitiosa vita afflueret voluptatibus. Immo videri fortasse. Quare hoc videndum est, possitne nobis hoc ratio philosophorum dare.
Num quid tale Democritus? Hoc Hieronymus summum bonum esse dixit. At ille non pertimuit saneque fidenter: Istis quidem ipsis verbis, inquit; Non est enim vitium in oratione solum, sed etiam in moribus. Cuius similitudine perspecta in formarum specie ac dignitate transitum est ad honestatem dictorum atque factorum. Ut in voluptate sit, qui epuletur, in dolore, qui torqueatur.