Investing Returns on the S&P500

The definition of empire is a group of states or countries ruled by a single supreme authority.

All other uses of the term are metaphorical. We can talk about the McDonald's hamburger empire.

When we talk about the American Empire, we're also using the term metaphorically, because think what you will of the US, but it doesn't rule as a supreme authority over anything but a few islands. It may have friends, allies, interests, influence, bargaining power, but it has no subjects, no subjugated peoples. It may have largely founded what is now the world's economic and security order after WWII, but those are all voluntary.

The problem is that the overlap between superpower and empire makes the term empire confusing in the American case. "Powerful like an empire" and "an empire" are very different.

When we talk or think about the "American Empire", we seek similarities and ignore differences with the Roman Empire, European colonial empires, even the Athenian Empire or Soviet Empire. It makes it sound like the US can tell other countries what to do as it pleases, that the US rules over others. That's a very important mistake, even a dangerous mistake. Allies are not subjects. When a country asks the US military to leave, it leaves. See the Philippines as a good example (and further back as an example of the bad old days, when the US was briefly interested in having a real empire).

Today's US is an empire in the sense that Microsoft is an empire -- it is an empire of the willing who can leave whenever they like.

And if you can leave whenever you'd like, it's not a real empire.

> You're saying we can't understand the world through science?

We're having a hard enough time as it is understanding the physical, inanimate world, when it comes to applying "science" to human endeavors the results are much less certain, approaching crystal-ball-reasoning. People did try in the past to do just that, i.e. to make scientific "sense" about what happened in the past with us, humans, with the hidden aim of trying to predict what will happen in the future. Karl Popper had a really good book explaining why that was a terrible idea (https://en.wikipedia.org/wiki/The_Poverty_of_Historicism):

> The book is a treatise on scientific method in the social sciences.[2] Popper defines historicism as: “an approach to the social sciences which assumes that historical prediction is their principal aim…”.[3] “The belief… that it is the task of the social sciences to lay bare the law of evolution of society in order to foretell its future… might be described as the central Historicist doctrine.”.[4]

> Popper’s criticisms of the poverty of the idea of historical prediction can broadly be split into three areas: fundamental problems with the idea itself, common inconsistencies in the arguments of historicists, and the negative practical effects of implementing Historicist ideas.

> iii) Individual human action or reaction can never be predicted with certainty, therefore neither can the future: “the human factor is the ultimately uncertain and wayward element in social life and in all social institutions. Indeed this is the element which ultimately cannot be completely controlled by institutions (as Spinoza first saw); for every attempt at controlling it completely must lead to tyranny; which means, to the omnipotence of the human factor – the whims of a few men, or even one.”.

And, to put it more generally, we do know that the Sun will probably die in the next 4-5 billion years, that is science based on induction, i.e. we saw that other stars similar to the Sun have lived that long in the past and so we expect the Sun to have the same lifespan. But this is not prediction nor forecasting the future, is really a very good guess. Science itself is a really nice and educated guess. The problem is that we're much better at guessing what will happen to the Sun, let's say, compared to what will happen to the stock exchange in the next 10 years or to who the president of Rwanda will be in 15 to 20 years.

David Hume has put down in writing the issue with induction better than a guy like me could ever do. From here (https://en.wikipedia.org/wiki/Problem_of_induction#David_Hum...):

> Only through previous observation can it be predicted, inductively, what will actually happen with the balls. In general, it is not necessary that causal relation in the future resemble causal relations in the past, as it is always conceivable otherwise

It would be great to see the long term results as compared to buying less risky assets, like treasuries. It's not a question of whether the market's returns are positive over the long run, but whether they are positive enough to justify the additional risk.