Dave Nadig on Capitalism, Agency, and Human Flourishing Through Markets
In this wide-ranging philosophical conversation, Jonathan Treussard sits down with Dave Nadig—one of the most thoughtful observers of asset management and market structure—to explore capitalism not as a financial system but as humanity's expression of collective action and collective cognition. Dave traces the arc from hunter-gatherer societies pooling resources to modern ETFs, arguing that the entire point of capitalism is "species-level human flourishing" through effective resource allocation.
The conversation examines how Gen X—the latchkey generation—came to distrust institutions after being promised the American Dream through stock ownership (the tech bubble), homeownership (the financial crisis), and eventually the Fed put (socializing risk). Dave introduces the concept of the "hyper agent class" in crypto and explains why Bitcoin represents a foundational bet against the institutions that got us here—a bet he understands but cannot personally make because it requires cheering for the collapse of western democratic capitalism. He offers the "white hat vs. black hat" framework for evaluating ETF providers based not on products but on trust: when something breaks, who will look after you versus who will force you to chase them down?
This episode wrestles with the loss of individual agency in modern markets, the moral implications of betting with or against the house, and why boring and forgetful remains the best investment strategy even when it feels like acknowledging defeat. For investors navigating unprecedented market complexity and institutional distrust, Dave offers both philosophical grounding and practical wisdom about what actually matters when choosing where to put your capital.
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What We Cover in This Conversation
Capitalism as humanity's superpower: collective action and collective cognition from hunter-gatherers to ETFs
The functional perspective on finance: moving value through time and achieving species-level flourishing
How Gen X became the distrust generation: tech bubble, ownership society, financial crisis, and the Fed put
The shift from defined benefit pensions to individual responsibility and loss of agency
Millennials vs. Gen X: indexing as community risk management versus individualistic distrust
Why starting a business requires regulatory stability and consistent rule of law
Agency in investing: the psychological need for small bets even when you know they're minus 100% expected return
Crypto and the hyper agent class: Bitcoin as a bet against western democratic capitalism
Why betting with crypto means cheering for dollar collapse and global recession
White hat vs. black hat ETF firms: trust, transparency, and who looks after you when things break
Dave's journey from Hollywood payroll to building the first ETFs at Wells Fargo Nikko
Target date funds and the S&P 500: imperfect compromises that beat most alternatives
Key Takeaways
Capitalism exists for species-level human flourishing, not individual wealth extraction. The point of developing money, markets, and resource-sharing structures is effective allocation for collective wellbeing. When evaluating investments, ask: can I draw a line from this capital to supporting human flourishing? If not, you're probably just entertaining yourself.
Gen X distrust of institutions is earned, not irrational. After being sold the American Dream through stock ownership (tech bubble crash), homeownership (financial crisis), and eventually the Fed put (socializing risk after repeated failures), Gen X learned nobody was coming to save them. This explains everything from entrepreneurial self-reliance to financial nihilism behaviors like day trading and crypto.
Agency in investing is psychologically necessary even when economically irrational. Putting everything in index funds and forgetting it is optimal but feels like acknowledging defeat. Creating small pockets of agency—like 1% of portfolio for buying puts or making active bets—serves a psychological function worth paying for, even with minus 100% expected return.
Bitcoin is a foundational bet against the institutions that got us here. For crypto bulls to be right, you must cheer for dollar collapse, US real estate market collapse, and global recession. Understanding this as a bet against America and western democratic capitalism makes clear why some investors can't morally make that bet, even if they think the probability is high.
Trust matters more than contracts when rule of law is collapsing. In choosing ETF providers, ask who will look after you when something breaks versus who will force you to chase them down. Look for transparency, education, reasonable fees, and interpersonal relationships—because the SEC won't step in and contracts won't matter unless you're willing to go to court for every problem.
Timestamps
00:00 - Welcome and capitalism as collective action: from hunter-gatherers to modern markets
05:00 - Evolution of asset management: from stockbrokers to mutual funds to ETFs
10:00 - How technology democratized access but created information overload
12:00 - Gen X as the distrust generation: latchkey kids, institutional failure, and self-reliance
17:00 - Tech bubble, ownership society, financial crisis: the arc of disillusionment
21:00 - Betting with the house: co-investing with oligarchs in an uncertain world
28:00 - Agency and its loss: why we need small irrational bets for psychological health
32:00 - Crypto as bet against institutions and the hyper agent class problem
39:00 - White hat vs. black hat ETFs: trust, transparency, and who's on your side
44:00 - Dave's background: from Hollywood payroll to MBA with Zvi Bodie to building first ETFs
48:00 - Target date funds and the S&P 500: imperfect compromises that beat most alternatives
51:00 - Rapid-fire questions: favorite word (profanity), babies laughing, rabbits and stillness
About Dave Nadig
Dave Nadig is one of the financial industry's most respected voices on market structure, ETFs, and the future of asset management. Dave helped build some of the first ETFs in the 1990s at Wells Fargo Nikko (now part of BlackRock) and co-founded Cerulli Associates, a leading financial services research firm. He earned his MBA from Boston University and began his career on the finance side of the television industry before transitioning to asset management. Dave's writing and analysis consistently cut through industry marketing to focus on first principles: how do financial products actually serve human flourishing, who can you trust when things break, and what does effective capital allocation really mean? His work emphasizes the philosophical and structural foundations of markets rather than short-term predictions or product hype.
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Disclaimer
The content of "Treussard Talks" is for informational and educational purposes only and should not be considered financial advice. The views expressed are those of the host and guests and do not necessarily reflect the opinions of Treussard Capital Management or its affiliates. Consult your own financial advisor before making any investment decisions. For full disclosures, visit treussard.com.