The laser pointer state is neither traditionally totalitarian, nor calculatingly mercantilist, nor fully anarchic.
What's the closest historical analogy?
Perhaps the Wild West, except with social rather than financial rewards for action against enemies of the state.
All the theory about actors on decentralized networks doesn't work if they run the same cognitive software, think the same thoughts. And developing a "cognitive OS", a moral culture, is even harder than writing an OS.
Hence, default to the moral culture of the legacy state.
The laser spotter model has immense power today, but it has a few problems.
First, the principal agent problem. The decentralized agents in theory have a mind of their own (or could). Hence the attempt to centralize control via antitrust & censorship. But that erodes efficiency.
The second problem the laser spotter state faces is that it overcorrects up and down.
It's like cooperative binding in biochemistry. As social rewards rise, more people do something, causing more people to do it.
So you get "switch" behavior. It goes from 0% to 100% real fast.
The third problem, related to the first, is that the laser spotter state is acting to reduce its own power.
The main power the legacy state has left is its digital power, its global tech giants. But by antitrusting them they'll be less globally dominant. brinknews.com/is-us-antitrus…
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But he doesn't model the effects of tech. Yes, China is rising & US state capacity is in decline. Yet US corporations still wield phenomenal digital power, and BTC/web3 are rising, as is India. So it's more complex.
Yes, it takes 20 years to reopen a bathroom in SF
Yes, many cities are nevertheless copying SF
Yes, tech is moving away from SF
And yes, unicorns are being started outside SF
So the long term trend is against both physical & digital power with SF values. But in the medium run…
Put another way, the US is declining in the physical world, as is visible in its major cities, but it's still quite powerful in the digital world. And that digital power is increasingly wielded with a blend of DC and San Francisco values. DC points, and SF shoots. Or clicks.
Capitalism is for equals, equal partners in the deal.
The ~80% of the world that is neither American nor Chinese is more than willing to trade with anyone, collaborate on science, work in a positive-sum way.
India & Israel should go hard into BTC/web3. Promote decentralized protocols that protect sovereignty, that make money, and that allow all to align behind neutral, globally fair rules.
The new non-aligned movement is economically aligned.
- They have a critical mass of founders
- They already cooperate on counterterrorism & tech
- The combined diaspora has a presence all over the world
- Neither wants to fully rely on the US
- Neither wants to be beholden to China
All the pieces are there.
I wrote about this at length last year, and I think these points still hold up today.
Crypto gives a third paradigm outside either US or Chinese control. It's thus suitable for every country that prefers sovereignty to becoming a colony. balajis.com/tag/india/