The Theology of Capital Allocation
Reflections on God as Outsider CEO
A core teaching of mysticism is that “the lowest is the highest.” If you want to understand the highest mysteries you have to look at the most concrete and banal and sometimes cringe-inducing particulars. It is with this in mind that I bring you the theology of Capital Allocation, inspired by William Thorndike’s Outsiders. Thorndike’s core point is that the best CEOs had little executive experience and were driven by unconventional attitudes about the job of a CEO. They mostly eschewed the press and the limelight and left management of the business to their trusted COOs.
Thorndike makes the argument that exceptional business CEOs regard their primary job as capital allocation. One of the greatest CEOs of all time, Henry Singleton, bought back his own stock over an 8 year period such that the company itself owned 90% of its own shares. He told Warren Buffett, who helped him finance the buybacks, that the best investment opportunity he saw for the business was itself.
So, if we assume that
a) God is CEO of the World and
b) The primary task of CEO, per Thorndike, is capital allocation
What is your mental model of how God allocates capital? If God is too triggering, replace it with your preferred noun (eg Nature, Space, Consciousness, etc.)
Is God spending, so to speak, on R + D, acquisitions. Is God issuing debt or selling stock or buying it up?
I posed this question on Astral Codex and got some fun responses:
“Machine Interface” writes:
Well if God is CEO, we have to reverse engineer what "profit" looks like from the way the universe not only looks like now but the way it's expected to look like in the future.
In which case it sure looks like God is mostly optimizing the universe primarily for vacuum, and secondarily for black holes, and everything else is just a rounding error. So I guess cosmological profit is measured in quantum foam.
Mark P Xu Neyer" writes:
My belief is that God is attempting to maximize entropy return on energy investment. Energy flows into low-entropy organisms because organisms lowering their internal entropy contributes more entropy globally.
I pressed Mark and learned that entropy is the physicist’s term for what finance folk call optionality. But these are sciency-answers. Is God really optimizing for entropy? Or is God optimizing for a world in which humanity learns to emulate divine attributes? What should theologians say? Disclaimer: This is speculative play, not investment or religious advice.
One way to think of monotheism is that God is buying back shares of the Godhead, consolidating it against dilution by polytheist sects and pagan rites, all of which dilute “ownership.” Contrarily, you could think of paganism and neo-paganism or even paganism-lite in the form of phenomena like Saint worship or the worship of specific divine attributes as a kind of divine expansion through merger and acquisition. Christianity, for example, can be thought of as an example of M + A vis a vis Roman religion, adding to the pantheon at first but then rolling it up in Holy Spirit headquarters.
How does God invest differently when the cost of capital is high? It seems like when God first makes the world it’s a high growth situation where borrowing is cheap, thus God does a lot of creating. The dirt with which God makes humanity is basically free. But later on, say, in Exodus, creation is costly, and so what’s needed is cutting costs—God takes one people to the desert and they live off mana, cutting burn until they are ready to enter the Promised Land. Egypt, which seems like a good business from the outside is abandoned because of its terrible culture, leading to poor margins. Remember, Joseph, who comes from the place of famine, has to teach the Egyptians the concept of saving for hard times. Creation is stimulated by ZIRP (zero interest rate policy) but survival, sustainability, and maintenance become more important when borrowing is no longer free. And borrowing is more costly when the future appears more uncertain (which is one effect of shocks like famine and war)
Population growth can be thought of as a form of “hiring.” Population decline can be thought of as a form of “firing.” We just hit 8 billion people worldwide, suggesting that from a human point of view, there is still a lot more work to be done. Industrialization suggests the past several hundred years have been a period of God reinvesting in the world business. By contrast, moments of deluge or near existential collapse (as in the world wars) suggest God is simply trying to strengthen the balance sheet.
There are a handful of major religions, suggesting a push to conglomerate belief. On the other hand, the secular age has led to remixing of religion and breakdown of religious institutions, especially in the West, suggesting that HQs are mostly inefficient and unsuccessful at “synergy.” Perhaps God takes a decentralized approach to the world business in our secular age, letting managers make decisions regardless of how well recognized or well liked they are. (There is less organizational politics today than in the middle ages, thus, fewer Crusades).
Humanity is the core product in the divine business, but the evolution of culture is the adaptation of the product to new needs. For example, the need for greater autonomy and creativity and recognition leads to liberalism, while the need for greater community and belonging and sense of longevity leads to conservatism. History is the A/B testing of humanity on itself. For we are product, worker, and consumer.
If Thorndike is right that the best CEOs remain flexible, this is an argument against teleology. God doesn’t have a five year plan, but simply shows up each day to work and asks what the company needs that day.
What would you add?