The current capital market structure, with its high fees, delays, and limited access, is a direct result of regulations from the 1930s. These laws created layers of intermediaries to enforce trust, baking in complexity and rent-seeking by design. This historical context explains why the system is ripe for disruption by more efficient technologies.

In credit markets, where transaction costs can reach 70-80 basis points for high-yield bonds, a systematic strategy's success hinges equally on its trading efficiency as on its return forecasts. A good model is useless if its alpha is consumed by trading costs.

Despite a 52-year explosion in technology and worker productivity, the average American worker's real weekly wages, adjusted for inflation, are lower today than in 1973. This highlights a fundamental failure of the economic system to distribute gains from innovation to labor.

While innovations like AI are disinflationary in a vacuum, history shows this effect is consistently overwhelmed by expansionary monetary policy. For over 200 years, central banks have created 'man-made' inflation, meaning investors shouldn't count on technology alone to keep prices stable.

While technology creates efficiencies and drives down the cost of specific goods, it cannot overcome persistent money creation by central banks. Since abandoning the gold standard, overall price levels have consistently risen despite massive technological leaps. AI will likely follow this pattern.

The friction in the current financial system—intermediary fees, settlement delays, and complex processes—acts like a tax paid by everyone. Crypto aims to eliminate this "tax" by creating more efficient, direct transaction pathways, akin to paving over potholed roads.

Despite scientific breakthroughs and better technology, the cost per approved drug has steadily increased over the last 60 years. This phenomenon, the reverse of Moore's Law, is called Eroom's Law and highlights a fundamental productivity problem in the biopharma industry, with costs approaching $1B+ per successful drug.

Vanguard's first index fund had a ~2% expense ratio (180 bps), far from today's near-zero fees. This historical fact shows that for innovative financial products, low costs are an outcome of achieving massive scale, not a viable starting point. Early fees must be high enough to build a sustainable business.

Contrary to classic theory, markets may be growing less efficient. This is driven not only by passive indexing but also by a structural shift in active management towards short-term, quantitative strategies that prioritize immediate price movements over long-term fundamental value.