In 2013, Peter Thiel and Marc Andreessen adopted two different (proxy) metrics to measure social prosperity: time and money. I don’t know about you but I would very much like to live in a world in which each person can chose whether to optimize for one or the other because each has a precise path attached to it.
After all, we are bodies with an expiration range. We cannot (yet?) manufacture the thing that bodies most desperately need (shelf-life extention tools) and it therefore beggars belief that people (who have a choice) trade that which is finite (time) in exchange for anything that can be manufactured. Even the notion of a “monetary value of time” should be inconceivable. In fact, for those that have enough money, it has always been the case (see time value of money). Before ZIRP&NIRP, it used to be inconceivable that money tomorrow would be worth equal (let alone less) than money today. Money today can be put to work and produce more money, time cannot and that’s why our priority should be to give anyone the option to optimize for time. Unfortunately, as of today, mankind never had the chance of seriously asking the time vs. money question and mostly treated it like a rhetorical gimmick.
Why so? As of today, there hasn’t been a scalable way to optimize for time. A plethora of life hacks but no path. As of today, there are just two undesirable alternatives:
a) optimize for money, hope (against all odds) to be able to achieve financial independence and use the money to buy the kind of leisured agency that we all seems to crave or
b) optimize for time and try to use it to create something good enough to achieve the same goal.
The fact that they are both undesirable doesn’t mean that they are equally undesirable: a) is in far greater demand than b), not least because it offers some structure: the odds are known to be bad but the path is there, you don’t have to blaze the trail yourself.
Troubles with Long Money/Short Time: Global Cities
The Case Against Global Cities
As of today, the places where the odds of achieving financial independence are perceived as higher are cities. Global cities. People move there to join companies and are very aware of the fact that the size and maturity of the company they join determines the kind of risk they assume.
Startups are conquest endeavors and the risk is external, while in established companies, where the conquest already took place, the risk is internal, aka bureaucratic infighting.
What far less people consider is that moving to a city is, itself, like joining a company. The richer the city, the safer the bet, the smaller the upside (the bigger the paychecks, the more expansive the city).
Within Cognitive Capitalism it’s almost impossible to amass cognitive capital while working in a low cognitive job, which means that it’s impossible to move up the ladder. And even if you move to the city and plug in the highest cognitive echolon, unless you are part of the rent-seeking intelligentsia that can cash-in on a status earned by providing intellectual cover to special interests’ preferred policies, the only way to make a decent fortune is by owning enough equity in the right startup.
Without a significant but unlikely equity jackpot (predicated on the individual assumption of significant industry risks), your cognitive capital will deplete faster that your ability to replenish it and do so at an accelerating rate.
Equity in the City
As of today, the right startups are still geographically concentrated, the amount of equity one can get is correlated with the stage at which one joins them, which is also correlated with the network of peers, usually built by leveraging physical proximity.
If you accept Yoshiharu Inaba’s view that “business is war, with rules” it follows that employees are soldiers and that there is a limited number of campaigns that you can take part of. Even if you get inside the right “campaign”, there are few certainties as to whether it will be successful. Like in ancient times, generals (today’s VCs) still have far better odds of surviving (downside protection) and greater risk-adjusted rewards in each of the campaigns in their portfolio.
Ok, enough of the metaphor, you got the point.
How hard it is, to get into the right company at the right time?
Of the 4,000 startup/year that are venture fundable, 200 will end up raising money from top tier funds. They have brand recognition and people paid to track those investments. Even if you are both smart and lucky and you manage to get hired by one of those 200 startups you will have accomplished nothing as only 15 of those will (someday) get to $100mln/yr in revenue. VCs are in portfolio building business, you are not. They are in it for the long term, you will have a very limited timeframe before kids will limit your appetite for lottery tickets (a.k.a. single stock investing). The hard targets are hard to spot, the easy targets (Y Combinator batches) are hard to get in.
The odds are bad enough that we can safely leave outside the thorny issue of employees’ equity compensation. Instead, let’s run a little thought experiment. Let’s suppose that you finished your university at 24, that you followed Marc Andreessen’s advice and managed to get hired by the best startup in the Valley (growth, culture and training). You went on spending three years there, which allowed you to establish your reputation. After that you are 27. You are experienced and you have a good network but you are not passionate about something in particular, so you join someone else’s startup. Suppose that after 12 months it will turn out to be neither a rocket ship nor a wreckage. You have 1% of a company that might get to a 100 mln valuation but not higher and, after a while, could even lose out to new entrants. What are you going to do? That’s not life changing money and you would have other three years of vesting. After those, you will be 31 and in the process you might meet someone special or the market could change and your skills might not be equally valued.
Let’s say that you walk away and try again. How many times can you do it while avoiding the mercenary stigma? After a few attempts, given the odds, you give up and go working at Google. You sleep in a car for a while (or at least in a container), you save enough money for the down payment of your house and you move with your partner to Boston, Seattle, Austin or even Phoenix, your dreams in tatters. Forget survivorship bias. This is what happen to most.
After your house is fully paid and you have established yourself in the local community, you finally find what you really want to do but now you have a little child and your partner’s support is, despite the nice words, mild. What are you going to do? Risk straining the relation? Miss your child early years?
Depending who you asks there are at least two words to explain the average age of Silicon Valley’s employees and entrepreneurs: selection and churn. People that did not win at the equity lottery, at a certain point, will leave the Valley. Their place taken by new mimetic desirers, either national or freed up indentured servants (a.k.a. H1-B visa holders).
Speaking of cognitive capitalism. According to James Flynn (of Flynn Effect’s fame) intelligence is not just nature (genes) and nurture (family, school, friends and peers) but there is also a 20% variation that is left to what he calls ”chance factors”.
Now, let’s consider two families in which each of the four parents has the same IQ. Let’s also suppose that family #1, after the birth of their first child, will leave the city and, during the next 20 years, will have (virtually) no food & housing costs while family #2 will remain in the city, paying 50% of their income in basic living expenses and struggling with work-life balance.
We know that intrinsic motivation is more effective that the extrinsic one and that self-directed work on our own project is more gratifying than a subordinate job on someone else’s. We know that self-selection work (startup recruiting, deep flaws notwithstanding, is all about that). We know that peer learning work.
Suppose also that the parents of family #1 will be working on their own projects and be surrounded by like-minded people in a tightly knit community while parents of family #2 will have regular jobs, little leisure time and will struggle to maintain a sense of agency in their lives. If that were the case, it stands to reason that family #1 would be taking full advantage of their 20% in IQ variation. Family #2? Not so much.
With that advantage “locked in” and surrounded by people with the same ideology (one that is both religion and “race” neutral), I would expect their children will receive top notch parental and social education and guidance, far better than cities’ time starved and mass educated children.
The above, to me, seems like a powerful combination of evolutionarily advantageous traits. Their relative advantage gets even bigger once you consider a main disadvantageous trait associated with city life: stress.
We know that stress is bad for both cognitive impairment and inflammation. Don’t take my word for it. Deutsche Bank’s LSE Urban Project recognizes it.
“The World Health Organization has highlighted stress as one of the major health challenges of the twenty-first century. Urban living is quickly developing as a major contributor to this”. (for more, read here)
To the extent that stress is a reaction to the structural uncertainty of the future, the higher its fixed costs, the more uncertain a future, the higher the stress it provokes.
Let’s leave those “minor” issues aside for a moment and, for the sake of the argument, let’s keep assuming that optimizing for money is more desirable. Are we really sure that global cities is the best place to do it? It used to be that ambitious people moved to cities for bonuses but bonuses are in structural decline and by now it should also be clear that the odds of achieving financial independence by getting enough equity in the right startup are negligible. What about the old fashioned idea of savings out of salaries? That would be nice but many upper middle class families are a few salaries away from bankruptcy. The only way they could save their way to prosperity would be if their expenses were to decline. Drastically. Starting from the big one: real estate. How could that happen? Let’s see how, and how likely each scenario actually is.
How to make global cities affordable
One theoretically clean way to make cities affordable is through land value tax, too bad it would requires either a breakthrough in game theory or democratic feedback’s suppression. If you believe that the two options are achievable and desirable, then, by all mean, go long global cities.
An even cleaner way to improve cities affordability is to change the global financial system with a debt-to-equity swap at the money supply level. (Money is lent into existence, the Bank of England let the cat out of the bag). Not even a breakthrough in game theory would help, here, and even if a peaceful global power realigment were to be pulled off, there is no guarantee that credit based money will be supplanted by equity based money (be it physical or fiat). I think it’s fair to say that neither you nor I will have much of an impact on that outcome.
Wait a minute, you might say. How come long term demographics, which are bad almost everywhere (apart from sub-saharan Africa) are not part of the equation? These are very slow processes and the amount of squalid real estate on the market is so high that it would take forever to have any meaningful impact on price. In the meantime it will suffice not to build new housing to keep prices high. Sure, prices are set at the margin but as long as jobs will remain the only way to make a living and as long as most jobs will keep being created within cities, demand will far outstrip supply.
The third way to make cities less unaffordable is to increase residential real estate’s supply. And by that I don’t mean within the city because, again, that would require either a breakthrough in game theory or democratic feedback’s suppression. No, what I do mean is a tech-enabled arbitrage that could augment the number of people that can work in the city while avoiding the usual political quagmires around zoning laws.
Yes, I’m talking flying cars and yes, they are within reach. Just ask Larry Page. The first, very basic one was presented at CES2016. Of course it will take the same approach that Elon Musk took with Tesla, selling first to rich customers and bringing the costs down with a positive feed-back loop between demand and unit costs. If the prices wil end up being close enough to those reported in Bloomberg’s article there will be a strong economic argument behind flying cars because the combined cost of flying car and rural housing would be lower than urban housing (without considering the opportunities to reach more cities within the same distance). This would certainly be an interesting option, but still more targeted toward those that optimize for money over time. Besides: we don’t know what the adoption rate would be and not just because of safety concerns. Related issue: not unlike with self-driving cars, the insurance costs would likely have to be borne by manufacturers, which could severely limit competition, keep pricing up and limit the urban real estate’s downside, unless manufacturers were to subsidize cars’ cost by shorting REITs and/or buying “options” on rural land at flying distance from major global cities.
Another (potential) way of lowering real estate prices is to squeeze the same functionalities in less square meters (through smart furnitures). Don’t hold your breath, though. The only barrier to an even greater urban migration is the price. Any temporary improvement in affordability will likely be arbitraged away by higher demand.
So, bonus pools are shrinking, equity’s odds are negligible, savings are a drop in the ocean and real estate will not become more affordable.
Could it get any worse?
The Pansensing City
The insanity that is Bay Area’s real estate market is quite complex, well beyond nimbyism, companies buying land to expand their HQs, exacerbating the (public) housing crisis and then finding private “solutions” (instead of lobbying for more housing and public transportation).
Given Bay Area’s propensity to see problems as opportunities and given that the real estate problem is so bad, it’s not surprising that both Y Combinator and Alphabet (Google) are addressing it, more or less from the ground up (and in the process inspiring ambitious people).
In light of Corporate-Sovereign collusion, Corporate Pansensicons should give you the chills. How cyberpunk could this get? This much:”The Trump administration won’t protect diversity and inclusion. Corporate America will”. Signed: GM’s CEO. Because, of course, the only alternative is between ethno-nationalism and corporate-enforced diversity (read: divide, union bust et impera). The same magnanimous corporations that brought you the ISDS.
The latest “out-in-the-open” Corporate-Sovereign collusion?
Facebook unveiled a tool to accomodate China’s policies (which include Pre-Crime) although, much more ubiquitous (and pernicious) is Sesame Credit.
What does it tells you that the same government that support appallingly oppressive social engineering tools like Sesame Credit is also behind a massive urbanization push? How do we know that that is the case? Do we take the New York Times’ word? No need for that.
Building hundreds of (still) ghost cities is not like building hundreds of malls. It’s not just more expansive. It’s the kind of investment that your state owned banks do only if they have political assurance that those assets will not be impaired. Nobody else could take that kind of risk. You can build a mall with shadow banking’s money but you can’t build a city and leave to the wims of the consumers whether they want to move there or not. Ghost cities are the physical manifestation of what the Cathedral wants (monopoly of debt based money supply loaned into existance to mold society as it sees fit). Concentrated (shall I say corraled) population is not a new idea. The famous scholar of China, Owen Lattimore, was the first to say that the function of the Great Wall of China was not primarily that of keeping the barbarians out but of keeping the taxpayers in.
The structural loss of self-ownership in the Pansensicon City (and its structural, credit-mediated interdipendence) could not find a better incarnation than the gleefully anticipated cashless society. China is hiring. Some are prepping and some might soon be.
Data Overlords kowtowing to Authoritarian States is not a paranoia. It should be the default assumption.
Facebook is certainly not the only Data Overlord that is moving into the three-dimensional world (be it tangible or intangible ). Zuckerberg has a business to run and, like any businessman, he sees the world through the prism of his company’s narrow interest. Which is another way of saying that the broader a company’s interests are (the more it resembles a paradigm) the less asymmetrical the relations with government will be.
Cities are places were our personal “footprints”are going to get harvested by all sort of sensors and the anonymity that people enjoy in cities will mean that it will be impossibile to ostracize the (crowdsourced) NSA snoops propping up their frail personalities by producing “ephemeral” videos with mimetically desirable spectacles. Videos that we should assume to be as ephemeral as the thin outer layer of the skin.
Another obvious harvesting pipeline? Eternal and ubiquitous cameras (with machine-augmented resolution) and cheap face and sentiment recognition. Deep states are hell bent to improve their position relative to citizens and cities are the most efficient way to gather informations and profiles. If you add in the mix IoT, ransomware moving to leaking data (when the risk/reward is better than cash). And no, I’m not talking about more or less sophisticated “in store” tracking (that you can avoid). I’m talking about the “public” space. Today the harvesting is limited to metadata but the attackers have the advantage. Tens of thousands of CCTV cameras have been accessible for a while. In the open internet. Imagine what you will be able to find, on the darknet, when AI, neuromorphic computing, eternal cameras (or eternal batteries), homomorphic encryption and 5G will collide.
The OPM hack (on a poorly secured, high value repository) allowed China and Russia to extract actionable intelligence and, as a result, in order to minimize risk, spies have been pulled out. There are plenty of repositories. Starting with the obvious one (that could soon be made accessible).
Bottom line, Global Cities will make it possible for our data to be harvested in ways beyond anyone’s imagination.
Like the former Danish Minister For the Environment (Ida Auken) did put it.
Global Cities have better have something very compelling, on the asset side, to compensate for all these liabilities.
Global Cities’ assets
A global city is a bundle and, especially given its costs (30–50% of your best years’ waking hours) one should be acutely aware of the existence, within that bundle, of both undesirable components and desirable ones that could be surrogated in far cheaper ways.
Let’s look first at the best things a global city has to offer, it’s five assets.
- Mates
- Conversations
- Networks
- Jobs
- Sophisticated Services
Some of the five advantages are real and absolute, some are relative but we take them as absolute because we fail to imagine the network of products that could disrupt them, let alone how those realistic alternatives could emerge.
Mates: Given Global Cities’ cultural, social and economical self-selection (some would say “segregation) the advantages in mating are real.
Having said that, anyone who targets people that are in a stable relation will find out that, under the right circumstances, cities’ advantages in mating will carry little weight when the family will have to decide whether to leave or not.
Conversations: Active conversations require time, the only thing that you can be sure to be lacking in a Global City. If you are short VR then, by any means, go long some Global City based on the quality of the passive conversations you can overhear there. If you don’t feel overwhelmed by hybris while considering committing to a prediction thirty years out (that’s what a mortage is, even if most refuse to admit it), by any means, do it. Let me remind you, though, that a) when Paul Graham wrote his essay on Boston/Cambridge, we were only one year into the mobile world and VR had already gone through various winters and b) he also added that “Ideas are one step upstream from economic power, so it’s conceivable that intellectual centers like Cambridge (100k inhabitants) will one day have an edge over Silicon Valley like the one the Valley has over New York”. It remains to be seem to what extent VR-based tribes will “de-territorialize cities” and what can cities do, to retain their centrality.
If you ask Boston they are well aware of their current advantages and are moving fast to lock them in.
The fact is, though, that you no longer need Boston (or any other city) to access talent, capital or expansive equipments, but you still need a good reason, for all those inputs, to coalesce in a better way.
Networking for fundraising purposes is overrated. Already within the current defective paradigm it’s apparent that quality attracts capital, not viceversa. Of course quality is a team effort and living close to more smart people provides an huge advantage. We shall see how lasting, that advantage, will prove to be.
Some would say that what we know as networking is needed because we don’t have an efficient and reliable way to profile people’s personality, (real) interest graph and competences. We don’t know how to measure personality but we could quickly become much better at inferring it from individual content consumption (if properly eye traked and stored in distributed & immutable databases). Add VR hangouts, a modicum of coordination (provided by agents with more aligned incentives, read backloaded payoff) and the current value of IRL networking (and its spiky distribution that underpins cities’ advantage) could be eroded.
Regardless of whether you believe any of that, my hunch is that to the extent that new and more progressive paradigms will emerge (each with its own crowdfunding mechanism) much of the sorting will be left to self-selection. The more contrarian the paradigm, the easier the self-selection.
Jobs: Sure, Global Cities provide plenty of jobs but, remember, salaries will lead you nowhere. It’s the right amount of equity that you need and we have already determined that it’s very hard to get. So, if you are very ambitious treat cities like entertainment or guilty pleasures. Every now and then you indulge yourself. The rest of the time you focus all your energies on stuff that matters. If you are not really ambitious, have short time preference, like to consume more than to create and like to parade your consumption around then, by any mean, global cities are more than an episodic self-indulgence, they are an insuppressible second nature.
Sophisticated services: Since I’m admitting the possibility of a competition between different paradigms, one has to consider which services solve problems created by the city-paradigm and which ones would hold their value across paradigms.
Take for instance the plethora of entertainment options available in cities. The people who will be attracted to other paradigms might have more pleasure in making their own theatrical and musical performances that to attend professional ones. Even if that wasn’t the case, the power of 1000 fans (coupled with a low fixed-cost life) means, among other things, that edgy performing artists could be sustainable with very small audiences. On the other hand it is clear that libraries and exibitions will have to be left to the occasional visits to global cities.
Bottom line: Hedonism or Impact
If you don’t care about real success and impact, go live in a global city and mate with people that share your priorities. If, on the other hand, you care about success and impact you should embrace some variation of what Balaji S. Srinivasan calls the Reverse Diaspora.
Just like Big Corporations are vulnerable to fast moving startups, Big cities are vulnerable to value networks set up from scratch. Especially if they will be able to tokenize the early attention they receive (without giving in to the value extractors that always show up). Reverse Diasporas start online. They are initiated by people that have overlapping interest graphs and, especially, overlapping ideologies and life goals, possibly down to an agreement regarding which paradigm is a more worthy pursuit. For a the foreseable future, those diasporas will remain the prerogative of people with intellectual and economic agency but, if enough of those people invest their time in the right technologies, the same opportunity could soon be available to everyone. These pioneers are those who will profit the most by building from the ground up a far better paradigm that, absent their work, would likely not have existed. Thanks to Airbnb, reverse diasporas will not need be hard, definitive choices but can rely “dual dwelling” (urban+rural).
How will we know when a modicum of traction is about to emerge?
Watch out for technologies that will promise to do, for sophisticated services, what Daqri does for advanced manufacturing. Cities used to be the harderst network effects to set in motion. In a two-sided marketplace you “only” have to create supply and demand for one product/service.
A global city, to get to a satisfying amount of sophistication, needs hundreds of multi-sided marketplaces. There is an argument to be made according to which the complexity/scale ratio of global cities’ valuable sophistication could be collapsed by one or even two orders of magnitude. If that were to happen, value networks would run on a time-based currency because (within an acceptable range) everybody would be able to do virtually anything which would, effectively, give each person the license to print his own currency.
Why would anyone care about that?
Many reasons but mainly, as it shall soon be obvious, because the best opportunities will be rurally based.
Hard Tech and G-2
We are at the pre-installation phase of many new (and pretty hard) technologies.
We don’t know which one will work (or not), in which time-frame, let alone if, how (and with what kind of delay) society will re-arrenge itself as a consequence.
What we do know is that VCs invested more in Space Tech startups, last year, than in the previous 15 years combined. “A ridiculous amount of money will be lost foraging into all these areas (agriculture, robotics, AI, aerospace, etc) but the greatest opportunities are in those sectors”.
For obvious reasons cities have no way of competing in AgTech and Aerospace and those two (especially the latter) will most likely provide a sufficiently strong gravitational pull to suck enough scientist away from cities and to alter the balance of intellectual power. “Ideas are one step upstream from economic power”, after all, and the physical locations where you can test them have a structural advantage over those where you can’t.
The broader context of this trend is the increasingly high risk of science segregation by Deep State with no public obbligations, let alone oversight. Hard tech has reclaimed its preeminence and the closer you are to the scientific frontier, the sparser the population, the easier it is to know who is working on what, the safer, more efficient to cluster them in a controllable environment.
This is very dangerous (socially), not least because it makes it exceedingly easy, for corporations, to spot and hire the smartest people and deprive the alternative paradigms of the raw material upon which they could be built. The good news is that, just as many artists, all things being equal, prefer to have their work in public spaces (rather that in private collections), so do researchers. This is one of the reasons why Open AI was able to attract so many people.
Hierarchies vs. Individuals: Strategic depth in talent supply
Military strategist define strategic depth as the distance between the frontline and the core of a country. It’s the amount of land that you can surrender before your enemy reaches your population. It’s well know that Russia’s strategic depth saved it many times. Many countries have little to none and face a difficult trade-off between a costly readiness and a risky neglect.
If we reconceptualize the battlefield, it’s not hard to see another one, one in which mankind has different strategic objectives than Deep States’s stakeholders. In this battlefield, the equivalent of the core area to protect are the “future-building capability”. In this conceptualization, each scientist adds a bit of distance between the frontline and the core. With enough scientists, the core is sufficiently far away from the frontline to be considered secure.
Why are future-building capabilities so crucial? I don’t know. Because the present sucks? We live in a consumer culture that has failed in its own terms, has had decades of decline in social mobility and is now seeing a broad decline in life expectancy with a telling, income related, bifurcation. The trend is getting worse and, unless something very powerful counterbalance it, it will keep snowballing.
Mankind’s ability to influence its destiny rest on the right people, funded in the right way to create the right technologies, products, services. If those people are co-opted to work for the status quo, the inertia will not be reverted.
Which brings us back to the strategic depth. How do you make sure that the people that should work on new paradigms don’t join the dark side of the force? You can’t. But you can minimize the inpact of their defection. How so? By enlisting every person, by turning (to the extent possible) every person into a scientist. Does that sounds absurd? Not more, I would venture, than the idea of an infantry preeminence must have sounded to a medieval knight.
Just as hordes of peasants, lightly trained (to react as one) and armed with cheap technology outperformed expansive super warriors with fancy gears (ending, for a while, millennias of war-making as class prerogative), so will technology allow to improve the Knowledge Acquisition Bandwidth (KAB) by translating words and maths into physical experiences, thus converting every person into a scientist.
If this outcome does not motivate you in terms of human fulfillment (as it should), collective self-defense should provide an additional motivation.
The amount of energy and material prosperity are consequences of humans’ cumulative knowledge which is roughly equal to:
(avg. human potential) x (free time) x (avg. motivation) x (# of humans).
IQ could be seen as a crude proxy unit of measurement (UoM) for human potential but what are the UoMs for motivation or knowledge? We don’t have them: bits are for information(quantitative) not knowledge (qualitative). We tend to value (and optimize for) what we measure. What about what we don’t measure?
There are basically two ways of freeing people’s time up:
- Basic income: Automate manufacture & logistics at scale and share profits.
- Basic outcome: Scale down manufacturing (with an acceptable loss of performance) and set a minimum level of tax free outcome.
We don’t know where motivation/purpose come from. Some would say that it’s spiritual, others might say that it’s just like a game and winning is all there is to it. The problem is that, today, the latter isn’t working for most people and the former has been largely removed from the equation (at least in traditionally Christian countries).
The honest question is: what is the least unlikely to work? Establishing a Universal Cult of Progress or gamefying (and monetizing) knowledge acquisition (and deployment)? The former we don’t know how to do, even with unlimited resources. And even if we knew, it would probably be undesirable. The latter will be very hard to pull off but it’s much easier to break down into a laundry list of technical problems. How normal people can be turned into scientists is not the object of this essay.
Building the KAB will take many years and massive and simultaneous advances in many fields. Many more people will need to work towards those goal than they currently are and in ways that the current R&D landscape does not allow. The first technical problem is being able to set up a sufficiently conspicuous and stable flow of funds to get enough smart people to work on it.
Poetic Justice
It gives me enormous pleasure to announce you that the vulgar trope that has long been used to belittle researchers (“if you are so smart, why are you not rich?”) will be used against those that have been brandishing it.
The best way to leverage a network of researchers is to allow them to create value for themselves in order to emancipate from a bad system with worse incentives.
On the supply side, the scaled down (decentralized and p2p) manufacturing capacity will improve traditional industries’ EBITDA. On the demand side, a stable consumer commitment (Recurring Analogue Crowdfunding or REC) will provide a steady revenue at sufficiently high gross margin to get enough smart people to work on the stated goals.
Why would consumers commit?
Because, for no extra money, they will have a voice in building the future they want to live in. A power that old school politics has long ceased to have.
The prosumerization of manufacturing will have the double effect of
- raising funds through REC to fund KAB technology
- free up time to be used to acquire and produce knowledge.
There is a self-reinforcing loop between the time freed up via the prosumerization of manufacturing tools and the knowledge that such time will enable you to acquire &/or produce. You avoid wasting time in exchange for money (most of which you have to spend anyway) and, instead, use it to acquire knowledge (for which you are paid by the State) and to produce new one, which earns you passive income (taxed by the State each time someone uses it). Result? You live a far better life while keeping, roughly, the same chances of achieving financial independence.
Cities as (meta)startups
From the Valley of Heart’s Delights to the village(s) of rice growers and fish mongers that became Shenzhen, history tells us a story that we seem hell bent to ignore: there isn’t just the Corporate “Navy”, to defect from. There is also the (established) Urban one (as opposed to the ones people build overtime).
If you are a really badass pirate (taking on significal technical risks), betting on an urban blank slate is pretty much the only way to extend your leeway.
Global geopolitics and geoeconomics carry a lot of weight in determining where R&D expenditures and startups do coalesce but there are also historical legacies and individual agency.
Silicon Valley capitalized on cold war’s arm race but had Frederick Terman been part on another university’s faculty, Silicon Valley would not have existed in its current form.
Shenzhen, on the other hand, was built on globalization’s labour arbitrage but absent Soviet miscalculations and US opportunism (and, further back, british imperialism) it would not have happened in the same way.
Shenzhen was born for industrial reasons and took advantage of its complementarity with Hong Kong’s low economic complexity and of Deng’s political framework (One Country, two Systems). Its industrial success spurred a massive real estate bubble and now cargo cult developers think that they can reproduce the same process even if the same initial conditions are not met. Country Garden’s massive urban development in Johor Bahru, Malaysia is a blatant attempt at capitalizing the proximity to Singapore which will prove very hard because (unlike Hong Kong) Singapore is both sovereign and has a very diversified economy.
The next iteration [of city startups] will likely not take a dense physical shape but a diffuse one. It will most likely be a much more diffuse version on Hanseatic League. Please remember: the Hanseatic League lost its collective shirt when territorial states began to assert themselves. Despite the recent (and future?) events we are a long way from that kind of absolute power and it’s very unlikely that we will ever come close to that. The New Hansa will live side by side with the Westphalian system performing as its de facto skunkwork. It will have the kind of political legitimacy that Corporations lack because citizen-consumers will have both financial and intellectual ownership.
The New Hansa will likely be a network of reverse diasporas that share institutions, the knowledge they allow to fund and the networks of products that such knowledge will allow to build.
The interaction between the two systems will likely happen at the scale up stage, thus ensuring the maximum synergies. The scale up is the stage at which you move from the (largely self-sufficient) non-transactional economy (the New Hansa) to the old and transactional one, thus ensuring both State revenues and stable middle class salaries. By the time the products will be ready to go from prototype to mass production most of the value will have been created. The middle class jobs will be solid and safe but with no upside whatsoever but most people, asked to chose between safety and upside will pick the latter.
