Inadequate Equilibriums, Mrs. Europe, Eleven Madison Park

In which I write about the importance of Eleven Madison Park switching to an all-vegetarian menu

Hey everyone,
Greetings from Washington, D.C.!

Whenever I come back from New York City, I feel like I am a different person minute-to-minute. It’s the only place where I have friends from every phase of my life — childhood, adolescence, and early adulthood. It’s like existing at an identity triple point. It leads to some interesting reflections about the many ways you have changed and the countless more in which you have not changed at all.

Anyways, the Acela up and down the north eastern corridor of the U.S. provided plenty of time for those reflections. It also provided some time for me to think about the future of this newsletter and how I want it to evolve. More on that in the coming weeks.

In the 103rd issue of Snapshots, I would like to explore:

  • Inefficiency, Exploitability, and Inadequacy

  • The rise of Mrs. Europe

  • Eleven Madison Park’s move towards a vegetarian-only restaurant

  • Stacey Abrams’ book recommendations, experts, and

Book of the week

I came across an eccentric book last week that I enjoyed. But I am careful to bring a litany of economics concepts into this newsletter. Not just because I think they are mostly hokum, but because as Lyndon Johnson used to say, “Talking about economics is a lot like pissing your pants. You think it’s hot, but no one else does.”

In the spirit of keeping things cool, let me lay out three main concepts I learned from Inadequate Equilibria by Eliezer Yudkowsky:

  • Inefficiency: Variations from efficient equilibriums exist — or inefficiencies — but they are rare. This means that we should outsource our thinking to the majority view on most things, but not on everything. For example, it is a fool’s errand to try to find inefficiencies in the stock market:

    If I had to name the single epistemic feat at which modern human civilization is most adequate, the peak of all human power of estimation, I would unhesitatingly reply, “Short-term relative pricing of liquid financial assets, like the price of S&P 500 stocks relative to other S&P 500 stocks over the next three months.” This is something into which human civilization puts an actual effort.

    But you can find many inefficiencies in less thickly traded parts of the human experience. But that does not mean that these inefficiencies are useful.

  • Exploitability: For an inefficiency to be useful, it has to be exploitable. Basically, can you act on this inefficiency for some upside — financial or otherwise? This is not always the case.

    For example, you see a classmate of yours get a job that he or she does not qualified for. You conclude that the hiring practices of the company they have been hired at are inefficient. But there is little you can do to use this information in order to gain upside. You could short the company’s stock, but it is highly unlikely that a single (or even a few) not-optimal hiring decisions are going to lead to lower stock prices in some time frame that you can predict.

    Sometimes, markets are only exploitable in one direction. Say that you know that house prices in an area are lower than the real value of these houses. You can act on this inefficiency by buying a house in this area to lock-in future upside. But if housing prices in an area are higher than the real value, then there is little you can do. There are no shorting markets for directly shorting an area’s housing market. However, if you were already an owner of a house in this area, you could act and sell the house to exploit this inefficiency.

    Sometimes, things can be not be exploitable in dollar terms, but can be exploitable in personal experience terms. To go back to the example of the lucky classmate above who got hired for a role they are not qualified for, you can ensure that your own company does not hire them — that is exploitability at the micro-scale.

  • Inadequacy: Adequacy is a system’s tendency to be efficient.

    The United States Senate is an inadequate system because its very structure — the structure of its powerful standing committees, the marshaling of power by the Majority Leader, and rules like the filibuster — means that the system does not do what it is supposed to do which to create new laws. Maybe this inadequacy is globally optimally — there are decent arguments to be that legislation should come in meters and not miles. But the system does not do what it is supposed to do.

    The stock market is an adequate system:

    In the thickly traded parts of the stock market, where the collective power of human civilization is truly at its strongest, I doff my hat, I put aside my pride and kneel in true humility to accept the market’s beliefs as though they were my own, knowing that any impulse I feel to second-guess and every independent thought I have to argue otherwise is nothing but my own folly. If my perceptions suggest an exploitable opportunity, then my perceptions are far more likely mistaken than the markets. That is what it feels like to look upon a civilization doing something adequately.

You can the read the book here, but I hope that these give you a taste of what to expect.

Long read of the week

The rise of Mrs. Europe

An amazing bio on the President of the European Commission, Ursula von der Leyen. I hope more of these pop-up about international and female political leaders in power.

My favorite part was actually about Angela Merkel:

This was the Merkel system at work, always using outriders, pushing to win the centre ground, calculating, then dialling back, never allowing anyone to get too strong. “Kneecapping those needing to know their place,” to quote one source. Merkel is too precise a politician to ever let anyone think something by mistake. But for a few heady days in 2010 she allowed Ursula to think she would be the next president of the federal republic, to the extent that stories started appearing about Heiko as the “first man”. Instead, she chose her old boss, Christian Wulff. Crushed, thinking she and Merkel had a special relationship, Ursula emerged scarred. Mutti later explained: such is politics.

For almost 15 years, like a Thomas Cromwell figure, this East German-born outsider, this GDR physicist, with a portrait of Catherine the Great on her desk, has been the master of German politics. With reunification, her generation’s historical task, complete, Merkel has approached it like a scientist, not an idealist, taking pleasure in plotting a course, for Germany, for herself, between these different oscillating and colliding forces, not advancing programmatically towards a goal. 

Business move of the week

Restaurants are not an uncommon topic on this newsletter. In some ways, they reflect the complete opposite of the usual tech news of our times — these are high marginal cost with razor thin margins, with even the best teetering on the edge of financial sustainability and ruin.

But no amount of ⌘+K-powered “let me know how I can be helpful” neatness is ever going to give me the pure, unadulterated joy that I get from the first bite of a Chick'n Shack sandwich at Shake Shack.

That should not come as a surprise. Much of our daily lives is constructed. Standing desks in an open floor plan, subways that can take you from one point to another point many miles away, your freshly roasted coffee beans from the other side of the world — these are things that are not primal. But cooking something for your loved ones and enjoying it together? That’s about as primal as it gets.

That’s why I find Eleven Madison Park’s decision to switch to a vegetarian menu fascinating once it re-opens next month after shutting down its doors due to the pandemic last March.

To build some context, Eleven Madison Park in New York City is widely known as one of the best restaurants in the world. It certainly has the price tag to match it with meals starting at $335 per person. Absurd but definitely intriguing. Every person who has ever walked in to the place and sat down on one of its tables draped with the signature “this is an expensive place” crispy white linen1 asks themselves some version of the is-this-going-to-be-worth-it question.

But Eleven Madison Park is not a restaurant. It is an institution and likely the breeding ground for the best chefs of the next generation. Process knowledge like cooking and managing a restaurant is difficult to be taught over the internet and so we will need these year-long apprenticeship models for the foreseeable future. Nothing can overestimate the impact that a chef’s training ground will have on their future approach towards food.

Future generation will almost certainly look upon our current animal-production-complex as morally repugnant. The rise of Beyond Meat, Impossible Foods, and numerous counterparts across a variety of SKUs have hinted at a future away from rising animals for slaughter.

So on one hand, you have young chefs who are spending their time crafting new vegetarian dishes under little monetary constraint (remember that a meal starts at $335) and on the other hand, you have the alternative meat trend which does not look like its going to hit its plateau any time soon.

This creates some powerful conditions and results. The chief amongst them is better vegetarian dishes. Once you can innovate on novelty, you can innovate on pricing. Say that Eleven Madison Park discovers some new combination of vegetarian ingredients that tastes amazing. Overtime, that combination will be modified and recreated using cheaper ingredients for a broader audience across different restaurants. Eleven Madison Park will likely not be able to capture all this financial value.

But that’s fine because Daniel Humm — the head of Eleven Madison Park — does not care about capturing any more financial value. The social capital that comes from an industry pioneering move is worth way more and brings all sorts of intangible benefits. The translation of social capital into financial capital is always an option, likely just a book or course about its brand-new vegetarian dishes away.

Odds and lots of the week

Three articles this week:

📚️ The One Book Stacey Abrams Would Require the President to Read: Self-recommending because of this answer:

If you could require the president to read one book, what would it be? 

“Master of the Senate,” by Robert Caro — it is a seminal work on the nature of power, the limits of the presidency and the awesome demands politics make on the soul.

If you want to be well-informed in case you ever run in Stacey Abrams but don’t want to read 1040 pages, consider reading these | summaries | of the book written by yours truly.

⌛️ The experts can stay wrong longer than you can stay alive: Worth a close read on how the experts failed us over the last year:

The scary lesson in all this is that for unusual risks like pandemics, where the real-life test of expert theories occurs very rarely, we should expect many expert consensus views to be completely back-to-front wrong, because the in-group incentives will drown out any real-world test of their theories and beliefs.

🧓🏻 99 Additional Bits of Unsolicited Advice: Kevin Kelly has been putting these out at each of his birthdays over the last few years and they are always great to read.


While the equivalence to luxury is somewhat warranted, restaurants typically use white linens to hide the fact that the table underneath is usually scratched, mangled, or otherwise just not as good looking as you would like to think.

That wraps up this week’s newsletter. You can check out the previous issues here.

If you want to discuss any of the ideas mentioned above or have any books/papers/links you think would be interesting to share on a future edition of Sunday Snapshots, please reach out to me by replying to this email or sending me a direct message on Twitter at @sidharthajha.

Until next Sunday,