Just as I tweeted yesterday about people in Ancient China leaving the fields to "melt and cast and blow the charcoal" of counterfeiting, the incentives in a gambling society also change for business investment. A story from 1980s Japan: "During the 1980s real estate prices in Japan increased by a factor of ten and stock prices by a factor of six or seven; in the second half of the decade Japan experienced an economic boom. The rates of return earned by real estate investors appeared to be about 30 percent a year. Business firms recognized that the profit rate on real estate investment was substantially higher than the profit rate from making steel or automobiles or TV sets and so they became large investors in real estate using money borrowed from the banks." -Manias, Panics, and Crashes (Kindleberger) This is quite similar to yesterday's quote from the Han Dynasty 185BC: "They leave their ploughshares, they melt and cast and blow the charcoal. The bad coins are daily made in larger quantities, while the five species of grain are not made to increase." We are re-writing incentives at lightning pace and they're going the wrong direction.