House on Fire

April 07, 2026 ·

Finance professor and hedge fund manager Patrick Boyle makes amazing YouTube videos. I only watch him here and there but he's consistently excellent. I saw him discuss the Canadian economy yesterday and the UK economy today. His analysis resonated with me and I wanted to comment on it for future reference. My main idea is that policy and planning done with the intention of controlling growth ends up stifling productivity and innovation, a theme I link to culture.

In the last few years I've been noticing more how different cultures react to new ideas and knowledge that cause growth in productivity; in one word, innovation. It's still a working theory on my end but my current guess is that some cultures seem to structurally oppose and suppress new ideas by default; what Karl Popper would describe as closed societies and what Nassim Taleb calls concavity. I couldn't help but feel that the policy failures Patrick describes in Canada and the UK are Keynesian in nature; from ideas of John Maynard Keynes; an economist vouching controlled growth and thus productivity via policy making. Sounds concave and the polar opposite of Friedrich Hayek who was more of a libertarian, though not in the modern sense of that word, more on which some other day.

Two things caught my ear in both of Patrick's videos: in both Canada and the UK buying a house has overtime become an investment vehicle; and tax policies are structured in ways that disincentivize working hard or being too productive. I felt that in my bones because it's something I have observed every time traveling outside the U.S. but had no explanation for. But I wonder whether culture drives policy or it's the other way around. This posture of rejecting new ideas and opting to build wealth via rent-seeking is observable at the individual scale, too; and why Canada and the UK make for interesting subjects on the topic. These aren't places one thinks of when thinking of communism. So what gives?

People in countries like Canada or the UK are often more well educated than their American counterparts on paper, but park their capital in assets like real estate and innovate on various ways to rent-seek or trick institutional systems to stay below punishing tax limits. In parallel, ambitious people move out to jurisdictions with better upward mobility. I can't help but imagine in the background a slow, subtle apocalyptic soundtrack that exists echoing a Francis Fukuyama style end of history type beat. Abundant higher education also means that policies causing downward economic spirals come dressed in elite sounding academic language, fancy aesthetics, and complicated explanations with deep emotional appeal; with extremely bad reasoning underneath that passes undetected; call me Keynes. It's highly seductive and thus popular which is why it takes over, but ultimately causes slow degeneration.

I find myself thinking India is also a place similar to how Patrick describes Canada and the UK. I'm hopeful for them all, but every time I visit either of the three I can't help but feel concavity lurking. New ideas bad, buying house good. Risk-taking bad, rent-seeking good. Innovation bad, intervention good. Since I grew up in India I find it easy to switch point of views and know how the rest of the world sees this American brand of innovation I am praising; short-labeled capitalism. Reckless and too money-minded. Busy all the time with no social life. Too atomic. Just as terrible in their books as Keynesian policies in mine. The main point of tension seems to be that of sharp ups and downs, aka volatility. But volatility is only bad if centrally managed at vast scales via bad policies, like in Canada, the UK, and India. On small scales it's much more manageable, doesn't cause exponential damage to one's neighbors and the uninvolved. It's even enjoyable if done right.

Anyway, Canada and the UK are on fire.

Keynesian point-of-view, innovation personified as Jeremy Irons in Margin Call:

1637, 1797, 1819, '37, '57, '84, 1901, '07, '29, 1937, 1974, 1987, '92, '97, 2000...and whatever we wanna call this. It's all just the same thing, over and over. We can't help ourselves. And you and I can't control it, or stop it, or even slow it. Or even ever so slightly alter it.

We just react.