I met my first hedge fund manager today, which was pretty interesting. Seemed like a nice guy and we had some pretty interesting discussions, considering we just met. But it was also interesting, as while he is very much part of building a community and sees the downfall of the economic disparity and the inevitability of an extreme market crash, he also obviously doesn't mind being part of the failure. Which I get.
The reason that the economy is such a mess is because of the incentives that drive it. What many people consider a conspiracy, is actually nothing more than an alignment across the economy, whether it be within industries or through global networks. This is because the incentives for business are all the same profit at any cost mechanism.
As I explained to the guy today, if a paper factory could make more money dumping chemicals into the lake we were swimming at, they would. But of course, there are checks and balances in place to stop such behavior. However the rule still stands, meaning they will find any ways they can to improve their profits within the law, and even outside of the law f the penalty for doing so is less than the gain for breaking it.
What this means though is that all companies and governments are going to align to a monetary indicator of success, and inevitably, people are going to suffer. This happens when of course AI and automation takes jobs, but it also happens when production is moves to countries so that child labor can be utilized. It is all aligning to the simple algorithmic approach of "increase profits" and in so doing, make the investors happy - like the people who are invested into a hedge fund.
I believe that while it is human nature to take advantage of the conditions, we are also aligning ourselves to take advantage of one set of conditions, at the cost of another. For example, we have a consumer mindset that drives those profits, even though the products we buy are designed to separate us and worsen our social conditions.
I don't think it is any surprise that the products on offer are designed to make us feel like we are making real connections, but we are actually isolating ourselves further from others. It isn't because of some cabal, it is because that is what drives higher profits. Netflix sells more subscriptions when every individual needs one, rather than one for a family. And of course, more housing is needed for singles, than for couples.
But like all centralized decision making, eventually the alignment to what is best for the minority will eventually fail, because when people aren't having children, housing markets will eventually collapse and, no more subscriptions need be sold. At some point, the increasingly top-heavy economy topples over, because the base can no longer afford to sustain it.
Essentially, the current economy is strangely like a communist system, where a few centralized hands are making the decisions of what resources go where, and we are supporting through the consumption of their choices. But, like communism, it will favor one thing over another, protect one part over another, and maximize itself over the rest.
As I said to the guy today, what we know is that if we continue on this path, the outcome is inevitable. We don't need complex models and AI to predict what happens, because all centralized systems fail. The only perfect system is one that is decentralized and has no preference for anything, nature. However, we can't as a society live like nature, because it becomes barbaric to the point we lose humanity, so we have to do the best we can with what we have.
This means decentralizing, but also aligning ourselves to particular outcomes. The difference however can't be to align to making more money, because money is useless as a resource by itself. Therefore, it has to align to something that matters to us, like human health, wellbeing and opportunity to increase quality of experience.
It is unlikely that any of the current systems that could will ever pivot to do this, so it is likely that the process will keep going the way it is, falling into an incredibly deep collapse to the point society as we know it is destroyed, and then it will start again. This will mean mass war, mass death, mass destruction, but some will survive.
Unless we nuke ourselves completely into oblivion first.
Hedge your bets.
Taraz
[ Gen1: Hive ]
