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. Quid igitur, inquit, eos responsuros putas? Haec et tu ita posuisti, et verba vestra sunt. Unum nescio, quo modo possit, si luxuriosus sit, finitas cupiditates habere. Sed haec quidem liberius ab eo dicuntur et saepius. Itaque quantum adiit periculum! ad honestatem enim illum omnem conatum suum referebat, non ad voluptatem. Cur, nisi quod turpis oratio est? Tum Piso: Atqui, Cicero, inquit, ista studia, si ad imitandos summos viros spectant, ingeniosorum sunt; Duo Reges: constructio interrete. Neque enim civitas in seditione beata esse potest nec in discordia dominorum domus; Nam Pyrrho, Aristo, Erillus iam diu abiecti.
Hinc ceteri particulas arripere conati suam quisque videro voluit afferre sententiam. Quis Aristidem non mortuum diligit? Istam voluptatem perpetuam quis potest praestare sapienti? Memini vero, inquam; Proclivi currit oratio. Et ille ridens: Video, inquit, quid agas; Sed audiamus ipsum: Compensabatur, inquit, tamen cum his omnibus animi laetitia, quam capiebam memoria rationum inventorumque nostrorum. Nihilo beatiorem esse Metellum quam Regulum.
Id enim volumus, id contendimus, ut officii fructus sit ipsum officium. Quae cum essent dicta, finem fecimus et ambulandi et disputandi. Hoc Hieronymus summum bonum esse dixit. Neminem videbis ita laudatum, ut artifex callidus comparandarum voluptatum diceretur. Atque his de rebus et splendida est eorum et illustris oratio. An ea, quae per vinitorem antea consequebatur, per se ipsa curabit?
Quae autem natura suae primae institutionis oblita est? Consequens enim est et post oritur, ut dixi. An vero displicuit ea, quae tributa est animi virtutibus tanta praestantia? Immo alio genere; Cur id non ita fit? Te enim iudicem aequum puto, modo quae dicat ille bene noris. Comprehensum, quod cognitum non habet?
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Quae cum praeponunt, ut sit aliqua rerum selectio, naturam videntur sequi; Uterque enim summo bono fruitur, id est voluptate. Itaque si aut requietem natura non quaereret aut eam posset alia quadam ratione consequi. Nam aliquando posse recte fieri dicunt nulla expectata nec quaesita voluptate. Duo Reges: constructio interrete. A quibus propter discendi cupiditatem videmus ultimas terras esse peragratas. Rhetorice igitur, inquam, nos mavis quam dialectice disputare? Quicquid porro animo cernimus, id omne oritur a sensibus; Vidit Homerus probari fabulam non posse, si cantiunculis tantus irretitus vir teneretur;
Contemnit enim disserendi elegantiam, confuse loquitur. Et quidem illud ipsum non nimium probo et tantum patior, philosophum loqui de cupiditatibus finiendis. Quorum sine causa fieri nihil putandum est. Iis igitur est difficilius satis facere, qui se Latina scripta dicunt contemnere.
Totum autem id externum est, et quod externum, id in casu est. Ita cum ea volunt retinere, quae superiori sententiae conveniunt, in Aristonem incidunt; Expressa vero in iis aetatibus, quae iam confirmatae sunt. Quis suae urbis conservatorem Codrum, quis Erechthei filias non maxime laudat? Philosophi autem in suis lectulis plerumque moriuntur. Quid autem habent admirationis, cum prope accesseris? Hoc loco tenere se Triarius non potuit. Illud mihi a te nimium festinanter dictum videtur, sapientis omnis esse semper beatos;
Intellegi quidem, ut propter aliam quampiam rem, verbi gratia propter voluptatem, nos amemus; Themistocles quidem, cum ei Simonides an quis alius artem memoriae polliceretur, Oblivionis, inquit, mallem. At hoc in eo M. Facile est hoc cernere in primis puerorum aetatulis. Sed quanta sit alias, nunc tantum possitne esse tanta. Deinceps videndum est, quoniam satis apertum est sibi quemque natura esse carum, quae sit hominis natura.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Quae cum dixisset, finem ille. Quod dicit Epicurus etiam de voluptate, quae minime sint voluptates, eas obscurari saepe et obrui. Ego vero isti, inquam, permitto. Varietates autem iniurasque fortunae facile veteres philosophorum praeceptis instituta vita superabat. Quid ergo attinet gloriose loqui, nisi constanter loquare? Duo Reges: constructio interrete. Nam quibus rebus efficiuntur voluptates, eae non sunt in potestate sapientis. Ita ne hoc quidem modo paria peccata sunt. Sed id ne cogitari quidem potest quale sit, ut non repugnet ipsum sibi. Aliter enim explicari, quod quaeritur, non potest.
Quis istud possit, inquit, negare? Ita relinquet duas, de quibus etiam atque etiam consideret. Quid enim de amicitia statueris utilitatis causa expetenda vides. Eaedem res maneant alio modo. Aliter enim explicari, quod quaeritur, non potest. Quod cum ille dixisset et satis disputatum videretur, in oppidum ad Pomponium perreximus omnes. Quis non odit sordidos, vanos, leves, futtiles?
At quicum ioca seria, ut dicitur, quicum arcana, quicum occulta omnia? Quod quidem nobis non saepe contingit. Suam denique cuique naturam esse ad vivendum ducem. Et quidem Arcesilas tuus, etsi fuit in disserendo pertinacior, tamen noster fuit;
Equidem, sed audistine modo de Carneade? Duae sunt enim res quoque, ne tu verba solum putes. Quae hic rei publicae vulnera inponebat, eadem ille sanabat. Sed eum qui audiebant, quoad poterant, defendebant sententiam suam. Habent enim et bene longam et satis litigiosam disputationem. Cum id fugiunt, re eadem defendunt, quae Peripatetici, verba. Ego vero isti, inquam, permitto. An me, inquis, tam amentem putas, ut apud imperitos isto modo loquar? Habent enim et bene longam et satis litigiosam disputationem.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Mihi enim satis est, ipsis non satis. Nonne igitur tibi videntur, inquit, mala? Audax negotium, dicerem impudens, nisi hoc institutum postea translatum ad philosophos nostros esset. Duo Reges: constructio interrete. Varietates autem iniurasque fortunae facile veteres philosophorum praeceptis instituta vita superabat. Prioris generis est docilitas, memoria; Verum esto: verbum ipsum voluptatis non habet dignitatem, nec nos fortasse intellegimus. Nec vero alia sunt quaerenda contra Carneadeam illam sententiam.
Tum Piso: Quoniam igitur aliquid omnes, quid Lucius noster? Praeteritis, inquit, gaudeo. Est autem etiam actio quaedam corporis, quae motus et status naturae congruentis tenet; Sed ego in hoc resisto; Ergo, inquit, tibi Q. Quod si ita se habeat, non possit beatam praestare vitam sapientia. At cum de plurimis eadem dicit, tum certe de maximis.
Videsne quam sit magna dissensio? Quod cum dixissent, ille contra. Quis animo aequo videt eum, quem inpure ac flagitiose putet vivere? Hoc est non dividere, sed frangere. Maximas vero virtutes iacere omnis necesse est voluptate dominante. Nonne videmus quanta perturbatio rerum omnium consequatur, quanta confusio?
Summum ením bonum exposuit vacuitatem doloris; Ut optime, secundum naturam affectum esse possit. Te enim iudicem aequum puto, modo quae dicat ille bene noris. Quantum Aristoxeni ingenium consumptum videmus in musicis? In eo enim positum est id, quod dicimus esse expetendum.