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Balaji Profile picture
@balajis
Nov 4, 2021 • 13 tweets • 4 min read • Read on X
The thesis of the Sovereign Individual holds up well. But there are three major countertrends.

The Individual Sovereign, and Xi Jinping in particular.

The Sovereign Collective, the leverage of nomadic groups.

The Autonomous Robot, as drones also change the logic of violence.
The Individual Sovereign

Technology matters - but so do founders. A sufficiently motivated founder can change the direction of technology. And Xi Jinping has refounded the Chinese state as a formidable, centralized, militaristic surveillance machine.
reuters.com/investigates/s…
The Individual Sovereign is a problem for the Sovereign Individual. A single man at the helm of a total surveillance state is just a different thing than the US establishment. The latter may well *want* to crush free speech & free markets, but lacks the state capacity to do so.
Yes, the US establishment has NSA surveillance, media corps, the dollar, all these things it has inherited.

But fortunately it lacks the leadership to put these together into a systematically effective plan for oppression. So it’s losing control over matters foreign & domestic.
It’s not yet obvious today — you need to extrapolate a few trends — but one scenario is American anarchy, Chinese control, and an International Intermediate.

In the Chinese sphere of influence, the Sovereign Individual would be harshly tamped down by the Individual Sovereign.
This brings us to the 2nd countervailing force: the Sovereign Collective.

We should strive for crypto-civilization rather than crypto-anarchy. Dysfunctional legacy states are getting unbundled, but we need to build better ones.

New states, not no states.
shows.banklesshq.com/p/-crypto-civi…
The Sovereign Collective is a more natural fit for human nature than the Sovereign Individual.

Put another way: technology has enabled us to start new companies, new communities, and new currencies. Can it allow us to start new cities, even new countries?
foresight.org/salon/balaji-s… Image
The collective exit to Miami was organic and unplanned.

But can we productize it? Build something like Nomadlist or Teleport, but for groups to crowdfund a migration together? That’s the concept of crowdchoice, a core idea behind the Sovereign Collective.
1729.com/miami
The Autonomous Robot

An important part of the Sovereign Individual thesis is the idea that encryption increases the individual’s power to resist coercion. However, drones can also increase state power to coerce in the physical world — without the same need for human conscripts.
Drones and autonomous robots in general are like firearms and encryption — something with nonobvious consequences for the monopoly of violence that underpins the state. They aren’t that easy to build, which favors states. But they are easy to operate, which favors individuals.
This also relates to Thiel’s point on how AI centralizes & crypto decentralizes. A Chinese drone armada may be a centralizing force that opposes the decentralization of crypto. Conversely, drones may make it easier for Sovereign Collectives to ward off an Individual Sovereign.
Each of these trends — Sovereign Individual, Individual Sovereign, Sovereign Collective, Autonomous Robot — are like forces applied to the status quo.

Different outcomes are possible. Many may coexist at the same time in different places. But it’s not just one force.
PS: there is at least one other force that belongs up there, which is quantum computing’s impact on encryption. A lot depends on whether the decryption process is expensive, secret, and available for a while only to a centralized state like China. brookings.edu/techstream/the…

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More from @balajis

Balaji Profile picture
Sep 8
Both America and China were invested in the illusion that China wasn't already the world's strongest economy.

Psychologically, it suited the incumbent to appear strong. So America downplayed China's numbers.

Strategically, it suited the disruptor to appear weak. So China also sandbagged its own numbers.

But the illusion is becoming harder to maintain.Image
In retrospect, all the China cope over the last decade or so was really just the stealth on the Chinese stealth bomber.

Hide your strength and bide your time was Deng's strategy. Amazingly, denying China's strength somehow also became America's strategy.

For example, all the cope on China's demographics somehow being uniquely bad...when they have 1.4B+ people that crush every international science competition with minimal drug addiction, crime, or fatherlessness...and when their demographic problems have obvious robotic solutions.

Or, for another example, how MAGA sought to mimic China's manufacturing buildout and industrial policy without deeply understanding China's strengths in this area, which is like competing with Google by setting up a website. Vague references to 1945 substituted for understanding the year 2025.

One consequence of the cope is that China knows far more about America's strengths than vice versa. Surprisingly few Americans interested in re-industrialization have ever set foot in Shenzhen. Those who have, like @Molson_Hart, understand what modern China actually is.

Anyway, what @DoggyDog1208 calls the "skull chart" is the same phenomenon @yishan and I commented on months ago. Once China truly enters a vertical, like electric cars or solar, their pace of ascent[1] is so rapid that incumbents often don't even have time to react.

Now apply this at country level. China has flipped America so quickly on so many axes[2], particularly military ones like hypersonics or military-adjacent ones like power, that it can no longer be contained.

A major contributing factor was the dollar illusion. All that money printing made America think it was richer than China. And China was happy to let America persist in the illusion. But an illusion it was. Yet another way in which Keynesianism becomes the epitaph of empire.

[1]: asiatimes.com/2025/07/thucyd…
[2]: x.com/balajis/status…Image
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Well, it's not the idea, it's the execution.

China can just sit back and let the world be its Xerox PARC. And then become a speedy second mover on anything that's working.

So you need innovations China genuinely can't copy.
One of them is Bitcoin.
Read 7 tweets
Balaji Profile picture
Sep 1
The dollar is losing reserve currency status. It’s down to 42% of global reserves, and gold is rapidly rising. Image
Digital gold is becoming the reserve currency of the individual.

Gold is returning as the reserve currency of the state.

Original post below.
Recall the Fed admitted that a “small number” of countries were switching to gold.

But that small number actually included Russia, India, and China: the RIC of BRICS.
Read 6 tweets
Balaji Profile picture
Aug 18
On many graphs of the physical world, China is in first place by a wide margin.

But if you look more closely, India is a distant but real runner up. Image
Image
The same pattern holds in nuclear.
China is #1 in reactors under construction.
But India is in second place. Image
Electricity generation is similar.

China’s recent increase is unparalleled in history. But India is increasing quickly, and will flip the EU soon. Image
Read 7 tweets
Balaji Profile picture
Aug 6
There are now two kinds of AI retards.

The first kind of retard uses AI everywhere, even where it shouldn’t be used.

The second kind of retard sees AI everywhere, even where it isn’t used.
Usually, it’s obvious what threads are and aren’t AI-written.

But some people can’t tell the difference between normal writing and AI writing. And because they can’t tell the difference, they’ll either overuse AI…or accuse others of using AI!

What we actually may need are built-in statistical AI detectors for every public text field. Paste in a URL into an archive.is-like interface and get back the probability that any div on the page is AI-generated.

In general my view is that AI text shouldn’t be used raw. It’s like a search engine result, it’s lorem ipsum. Useful for research but not final results. AI code is different, but even that requires review. AI visuals are different still, and you can sometimes use them directly.

We’re still developing these conventions, as the tech itself is of course a moving target. But it is interesting that even technologists (who see the huge time-savings that AI gives for, say, data analysis or vibe coding) are annoyed by AI slop. Imagine how much the people who don’t see the positive parts of AI may hate AI.

TLDR: slop is the new spam, and we’ll need new tools and conventions to defeat it.
I agree email spammers will keep adapting.

But I don’t know if a typical poster will keep morphing their content in such a way.
Read 5 tweets
Balaji Profile picture
Jul 25
JP Morgan is updating their p(doom), but for the dollar. Image
Just the fact that JPMC is now admitting this is a big step.

"De-dollarization has increasingly become a substantive topic of discussion among investors, corporates and market participants more broadly."

As the US deglobalizes, the globe dedollarizes.
jpmorgan.com/insights/globa…Image
Yes, but no manufacturing economy can be realistically stood up in time to replace the sheer consumption that money-printing enables.

Example: to make $1T, you can (a) print or (b) sell $1000 phones to 1B people. Obviously, the former is far easier.
Image
Read 4 tweets
Balaji Profile picture
Jun 4
AI PROMPTING → AI VERIFYING

AI prompting scales, because prompting is just typing.

But AI verifying doesn’t scale, because verifying AI output involves much more than just typing.

Sometimes you can verify by eye, which is why AI is great for frontend, images, and video. But for anything subtle, you need to read the code or text deeply — and that means knowing the topic well enough to correct the AI.

Researchers are well aware of this, which is why there’s so much work on evals and hallucination.

However, the concept of verification as the bottleneck for AI users is under-discussed. Yes, you can try formal verification, or critic models where one AI checks another, or other techniques. But to even be aware of the issue as a first class problem is half the battle.

For users: AI verifying is as important as AI prompting.
I love everything @karpathy has done to popularize vibe coding.

But then after you prototype with vibe coding, you need to get to production with right coding.

And that means AI verifying, not just AI prompting. That’s easy when output is visual, much harder when it’s textual.
@karpathy The question when using AI is: how can I inexpensively verify the output of this AI model is correct?

We take for granted the human eye, which is amazing at finding errors in images, videos, and user interfaces.

But we need other kinds of verifiers for other domains.
Read 4 tweets

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