Tyler Cowen – on Ezra Klein’s podcast – claims that he was a big skeptic of crypto. However, he has recently become convinced because he is seeing a lot of smart people getting into it.
Ezra Klein then remarks that this question is a good heuristic for evaluating new fields.
I’m not so sure… It seems to depend on how you define “smart”. I think smart needs to mean quick thinking and unconventional.
Example 1: Civil engineering in 2006
When I started engineering at University College Dublin (UCD) in 2006, most of the class decided to do civil engineering. By the time 2010 came around, Ireland had suffered a massive crash in housing prices, so there were hardly any civil engineering jobs. Still today, in 2021, there is just a tiny minority of engineering students at UCD that are doing civil engineering. In fact, there are almost as many civil engineering lecturers as students!
In hindsight, the smart move in 2006 was to do computer engineering (and probably still is?). Really though, the unconventional thing would have been to code your own software at home and maybe skip university or leave it early – like John and Patrick Collison did, who eventually started Stripe.
Example 2: Doctors in Ireland
In Ireland there is a standardised national test at age 17/18 that determines which university courses you can get to. A large percentage of those that score the highest choose to study medicine. That is not because medicine is the field with the best potential future. It’s probably a combination of a) doctors having high social regard, b) tangibly helping people, and c) good pay, which is partly tied to the number of training places being limited.
Anyway, the young people going into medicine are certainly smart when measured by school grades, but their choice to do medicine has been there for decades and doesn’t say much interesting about the future of medicine as a field.
Financial Crisis 2008/9
Lots of top students went into banking and finance in the run up to the end of the 2008/9 crisis. A lot of them were probably top of their class and probably quick thinkers.
The problem with my examples
I think my examples are bad because the categories of people I described followed paths that are selecting for being smart, but not selecting for being sufficient unconventional.
For there to be an obvious signal about a new promising field, you need to know enough people that are both quick thinkers but also doing something abnormal. You also need to know enough of them to see a pattern, but not so many that they are just following a crowd.
So, figuring out the next emerging field is still very difficult, but if you can know some smart unconventional people, that will probably help.
Where are the quick-thinking unconventional people you know going?