This is a one-off piece referencing current politics only in one part. One cannot skip but reference that when discussing medium-term plans.
Things are going in such a way that your priors are not best equipped to deal with them. The last 20 years were an anomaly in historical record - or were they?
I’m thinking what to do in the next 5 years, where to settle down, where to locate time, money and livelihood. I have done an overview of major underrated factors that will play out making the world more different than we were used to. I am surprised they are not talked about more.
Factors
(Open) Internet is dead
First, we have fragmentation of the internet. The portals of Gab and Parler were the first instances in the mid 2010s. Then followed Odyssey, Mastodon got bigger, Truth Social and the biggest of them - bluesky. What are the broader consequences of fragmentation of the Internet? On the surface, we have divergence of communities and more echo chambers, more self-delusional propagation. We can expect with time we will see an divergence in vocabulary too. Google also stopped sideloading on Android. The system is getting locked down in divergent fiefdoms. In Russia you have VK, in China WeChat and now the IT social divisions within the West start to raise to levels hitherto known to only between-countries comparisons.
Open internet is dead, and full of bots. BAP himself said that Twitter is ‘largely astroturfed’. I personally lost faith in Twitter/X as a source of information. 101 of propaganda is that the news manipulate through which topics they cover, moreso than with the tone they do on a given topic.
Just pure participation in this is a psychohazard, as user nonrandomstring says:
What you said about the misery of “news” resonates with me. In psyops we call it “sapping”. Propaganda designed to demoralise, dispirit and corrode resistance used to come from our enemies. The classic example was Lord Haw-Haw [0]. Today our own mainstream news channels and technology giants seem determined to keep the population in perpetual hopeless anxiety.
Furthermore there are big stories that my twitter coverage missed, first the cringe Trump video on the 18th of October was not mentioned there, also that weird January 2020 call was not covered. That touches on the political angle that you’ll see referenced later. Mutuals keep saying how twitter is getting worse too. https://x.com/xlr8harder/status/1981783142080938021
Twitter feels pretty dead to me lately. Still a great place to keep up on AI research, but the community that used to be here feels absent.
One way out is urbit, but that’s as bit niche. Furthermore we have a bipartisan consensus on stripping away internet freedoms in the UK, EU, similar laws already in work in countries like New Zealand. The issue is that without a service like bitchat any country can block at ISP level, using monopoly of force. The Internet is not an aetheral parallel world with magic mind-to-mind connection, even though it plays hard to fill that fantasy. It’s maintained by people with names and addresses that the government can easily find. Sweden taps all the data that is coming in and out of the country.
The internet will get worse, do not bet on it.
US political climate
The second trend of note is the shift in the US political climate and the downstream effects on the discourse. First, the meta shifts from critiquing the Biden administration to a more nuanced play. There are still possible targets of ridicule like Democrat politicians in specific states and cities, streamers, and so on. Still yet the crossfire on the ruling coalition was more rallying. Now the people who criticized the Biden administration play favourites within the Trump administration, cautiously supporting this or that policy or nomination. From across the pond it’s more subtle, easier to miss some context.
Interestingly enough, polling for Trump is quite low recently. The breaking of the gray-red coalition when Elon left over the debt spending was a big point. Foreign policy was certainly ‘overpromise, underdeliver’, though that is the least predictable component, domestic situation can be theoretically much more controlled. In a sense, the split of the voting block results in a widening of the Overton window - another application of the ‘divide and rule’ principle. I don’t think Trump will get more popular soon. The tarrifs and some other manouvers are explicitly long-term. Winter will witness a cooldown of any protests.
Will he be good for America? That’s to be debated and seen. For external observers, suddenly the value of being actually in the US has increased. For him America’s success is a desired result both in plus sum games and zero sum games. Europe has suffered from the tarrifs too, and that personally negatively influences me. Protectionism is fun to watch but less fun to see the other side winning.
Then we have the temperature going up domestically in the US - Luigi Mangione case, Charlie Kirk assassination, and debt going high. That last ties into the big ‘fiat currencies’ discussion that is outside of scope of this blog post. We see dollar losing status as reserve currency, where companies and countries choose to denominate some or all of obligations in Yuan. Physical dominates the monetary - that’s what we see around us. Bullets are cheap, ICE centers are easier to organize than physically build a wall.
We are witnessing a decline in anabolic state capacity that lets it build great things (Pyramids, Great Wall, Skyscrapers of the 1920s) and increase in catabolic capacity - taxing the rich (Norway exit tax), inflation (redistribution from the poor).
We are witnessing a decline in anabolic state capacity that lets it build great things and increase in catabolic capacity.
The fakeness of the detached-from-physical-reality money is getting more and more apparent, gold, BTC all beat records this year. Crude oil is doing alright though. Capex on AI seems awfully suspicious too - which leads us to the third topic here.
Before we go into AI, the last few paragraphs are not topics I have an arbitrage edge on. That’s why I don’t poast about it often. There are others more in touch with those, Big Politics topics. You, Dear Reader probably also only have a limited insight into what is happening, what are the trends. Maybe some big intelligence or corporate consultant analysts can make more sense of it, but I doubt it - they can measure some trends and spin narratives, however some things will always be black swan fat tailed.
on capitalism and AI
I have a growing distrust of the ongoing system called ‘capitalism’. First, the currency it’s denominated with is fake since 1971. Has this led to more innovation? We have AI being built, by a handful of companies. We have a couple of meanings of ‘capitalism’, to establishment conservatives this means free enterprise, and free markets, to leftists this means domination of private ownership of means of production AND a dominance of capital in the capital-labour balance of influence. Finally for Nick Land capitalism is a self-assembling part of the AI. His account is pro-competition, but there are alternative accounts.
Was it capitalism that brought the AI? The VC bureaus of Silicon Valley resemble organizationally USSR Communist party planning structures - those are not usual businesses solving an urgent need, those are moonshot projects. US also used to do those projects in the 30s, 40s, 50s, in the UK there was a railway bubble in the 1840s. The projects are often done by monopolies or state enterprise - not the most ‘free market’ situations. To the pro-competition account of Nick Land, we have a counterpart right wing theorist — Peter Thiel, who praises monopoly culture. In ‘Zero to One”, he says that only monopolies can take on risks, as they have excess profits to spend to do this, unlike enterprises in equilibrium. How to reconcile those accounts? I will make an attempt in a future blog post, I invite speculation in the comments here.
From the arguments for capitalism we have:
it brings people from poverty
it builds AI
it provides superior services
it is adaptable
Certainly recently housing has been a problematic issue, where adaptation is hard to be found. Of course, those might not be coming from the market itself - housing has distortions - mortagages are cheaper, and NIMBYs make lobbies sidestep the market through regulations, we also have distortions of tax deduction, and various housing subsidies. Those policies create inflationary pressures on the value of houses.
We should distinguish between a rule that has brought us to a place and the best policy going forward. The thing is that capitalism runs on ape software.
At the moment my model of how the system works is that of apes having preferences, the markets operating on the value chain.
The testing and exploration, high risk high reward are only on the blazing edge of the value chain. The rest is hopelessly path-dependent, attracting the most risk-averse people. Once the line of flight finishes its life, the lifecycle turns to extraction. Every step is calculated, analysts looking to optimize costs and profits, squeeze as much as possible. The innovation edge blazes through the commons, where corporations are eager to jump on arbitrage opportunities, exploting human need for convenience.
As a solitary consumer, there is a fundamental information and effort asymmetry - for each product you buy there has been a team of analysts with access to large scale data to optimize you into buying a deal that looks better than it is in reality. You can spot this - either if the product happens to be of interest to you and you researched more, or when they get greedy. They can be greedy but still someone will be stupid enough to buy their stuff.
We can see this in the physical world as worse services, planned obsolescence, in digital as enshittification. There is always that arbitrage, unlock of truly positive sum games is rare. The internet was more open prior to smartphones. And that performs arbitrage on the whole ape body and its tendencies, exploiting each behavioral spectrum to the maximum.
Superstimuli that are biologically possible but whose values are way beyond usual evolutionary parameters are administered with precise algorythmic doses, extracting value of every second of consumer life. When we talk about elastic demand in economy, the readjustment process isn’t talked about that much. It’s always connected with disappointement, or being priced out. There is the whole libidinal economy layer, that has been kept in relative homeostasis with lindy festivals, regular calendar exuberance where the soothing effect of social leisure takes over, propagating good vibes. At the moment however, the unmet demand for housing, and other useful services benefit the corporations while the individual loses.
We can see ‘individualism’ as not purely a prescriptive statement, but also a descriptive nostalgia for the times where the individual Will and Spirit were the points of arbitrage, rather than ‘guanxi’ (access to people) or access to raw capital. Emergence of finance-for-everything is indicative that almost as much has been squeezed as is possible. How much further can the people be squeezed?
Marx said that wages trend towards subsistence, but he did not consider large scale human migrations. Subsistence on individual level is one thing, on the span of 40-ish years that a human is production, subsistence on intergenerational level is harder. Capital has the ‘reserve army of labour’ beyond the borders, and can move it in, legally or otherwise, not caring about that a next generation is born - quarterly planning does not take demographics into account.
Way more expert-hours go into squeezing money from potential parents, than helping them reproduce. Buying boomer houses by Blackrock also falls into that category. Not only humans are mobile, capital is even more so.
Centralized and digitized investment allows for more liquid markets, which has an analogous effect of shortening the time of alpha information.Peter Thiel talked about a parallel effect in the context of comparing companies under competition and monopoly, as we discussed before. From that we can expect more short term bets, and more hill-climbing as opposed to moonshot projects. Furthermore, the emerging dynamic is that of a power law, where globally small percentage of companies get most of the investment and value, which creates a single point of failure, as opposed to a more globally diversified portfolio. Global markets are more fragile, NVIDIA is a single point of failure.
Max Stiner warns against ‘ghosts in the head’ yet most market manipulations are through our desire to see the world different than it is, seduced by images of grandeour-obtained-with-little-effort. Every investment that is not-thought-through and does not ultimately create real value, creates inflationary pressure. This also applies to crypto.
Now - should the government step in? Would it benefit you personally? Remeber that part about decreasing anabolic state capacity? Of course, many a man can get rich and comfortable by playing zero sum games, however team-finding is there way more crucial than in plus sum games with alpha.
Another big question is - is there a ‘way out’ we (open to interpretation) can all exit winning, OR is it a selection event, bisecting society into permanent underclass and elite status? What if you narrow down that we to some group? A grand metanarrative like Communism? A national OR ethnic group? What are the optimal coordination scales for individuals generically in 2025-2030 time frame? That’s a difficult question - what if you ask what is the optimal coordination scale for you?
How shall you proceed about this?
Do you have assets AND arbitrage information?
Do you have arbitrage on specific countries AND resources to do due diligence to support various people? Then you should consider backing those people - financially, politically ( best if you know them personally), so that the value of the asset that you own goes up.
Arbitrage only makes sense if you have some asset class thay the arbitrage impacts. If you build your information arbitrage portfolio in discordance with your asset class your not making the best of it. Learning Welsh gives you arbitrage in interactions with the Welsh, but if you live in Bangkok that is of little value BUT if you inherit an estate in Wales suddenly you have an asset that you can exploit better.
This is simple game theory, homeowners play this consistently by always choosing politicians who will keep the housing prices line go up. Let’s get some examples of asset - arbitrage pairings. If you own shares in NVIDIA, working in AI makes you more aligned, creating more exposure to the upside, but you’re not hedging then.
There are many movements around the world that you can be sympathetic to but ultimately in this Kali Yuga, do you have arbitrage alpha and an asset for those movements? If not, there will be no plus sum games from alliance with a grand narrative.
The ‘Fight Club’ said ‘You are not a special snowflake’, now you should see that West as a social playing field is not special anymore. The alpha from solely being here has passed. Now proximity to the big players is crucial. In historical median case, if you didn’t have friends with real power, the system would exploit you. You may protest saying that there are distinctive physical factors between countries that make a difference. Sure, US has great geography and resources but are you individually positioned to benefit form that while Blackrock is looting your countryside?
Where you should go? Orient is really tempting at the moment, if you don’t have anchors elsewhere. If you have arbitrage personally, a fulcrum point to make a difference in the UK, Europe, or the States, do it and be excellent at it - then you stand the best chance to benefit.
What to bet on - geopolitics, beliefs
Those should not be enough for the 90% of you, they are arranged by decreasing honour and glory they provide IF you have an underlying asset. I still do not recommend them:
betting all on Elon - to stumble in implementation, can be forgiven, however unless you have assets in the US that will appreciate after his actions, then America First ideal is not beneficial - I am not American
escape into the rural life - cities have power - unless you secure a great deal on an estate and know the language and have blood relatives there / married into a local family
escape to China - the strong transcendent version of Landian eschatology has failed to become true, given that AI is ‘human, all too human’, being trained on human texts primarily
geoarbitrage - exploit the better purchasing power in some country where dollars give you an edge - just avoid low lying countries if you want to establish long term decades long residence - sea levels will increase a bit in the next 70 years.
Curtis Yarvin - a man who said all he had to say, now is in the implementation stage and the natural course of events is that he cannot change his view now, he is playing the bit as he has rhat wolrd historical role. In a Hegelian sense he must play it to completeness. There is not much alpha in listening to him anymore
libertarian approach or, agorism - trying to escape the state power without community, they will catch you anyway
escape into the wilderness - that is just giving up
laying flat, let it rot - why not? Let it slop? that is also the default
learn ancient philsophy - scarcity of evidence and inferior Epistemic standards - like the locksmiths having a big vulnerability that got exposed in 2003, those philosophies will have some important features empty due to text loss.
What are the superior options then? Let’s look generically at first. What would work at any time? In ancient Greece to seek power is to: escape if you’re a slave, or if ruled by a malevolent tyrant, into some prestigious service of another king as a warrior / merchat, or aristocrat in an oligarchy polis or into a democratic polis. Upward mobility in thay way gives you a partial share in the monopoly of violence in a given territory. if you are only escaping power, it may always find you.
What should you bet on?
parties, groups that have a monopoly of violence
phronesis - practical wisdom - and power at rhe edge, using arbitrage in the best sector at the moment
loyalty to friends - that is the optimal group size generally. If your friends are in power, all the better.
for myself and this blog
That’s what I am betting on for myself too.
I won’t attach myself to a specific party or leader at this point. Broad ‘secular right ‘ view is what I am the most sympathetic to, however I consider my work on philosophy to be best if agnostic of that application layer. It’s more pure. Maybe once I finish what I want to say I will transform into something else, a more involved in public life.
Arbitrage of the real and true is something that philosophy can be aiming for, however the ‘market can stay irrational longer than you stay solvent’, so it is not a guarantee. Truth was often dominated and stomped on by power. I will write the more abstract metaphysics and political philsophy, it’s time to build cathedrals for readers to see .
Immediate impact on the actual onging politics is not a priority. Maybe it’s a trust issues, or maybe there’s not a Zeitgeist for something thay would be right for me as deterritorialized elite human capital. I prefer to trust my friends directly.
Where do *you* place your bets?