Really excellent episode. I agree with like 95% of @balajis‘s analysis.
Agreed on the insight about longitudinal versus latitudinal coordination and about the unique situation of Australia and New Zealand.
I also agree that multi-polarity is inevitable and that in the long run, China’s rise is likely to continue (with or without the CCP). Short term, however, I think China has a whole host of domestic issues to deal with including overproduction/deflation/involution (really it’s all the same thing), real estate market collapse, local government debt, and population collapse/flight and many other issues. I think we still have some time here.
Completely agree that the US became an empire after WW2 and benefited greatly from having reserve currency status that came from hegemony. We were able to live beyond our means by partially exporting inflation to the rest of the world. However, different demographic beneficiaries of this exorbitant privilege received very uneven slices of the pie. Red America and the youth were left in the dust. The Cantillon effect benefited the investment class over the working class which fomented resentment. Moreover, there were other invisible costs at the national level like the march toward the Triffin Dilemma and the loss of national self-sufficiency.
I agree with Balaji and @curtis_yarvin on the Red Empire (DoD) vs Blue Empire (DoS + other soft power) analysis. Over the past few years, we saw the Reds and the Internet (Yellow/Orange Empire) subsume the power centers of the former Blue Empire. The Internet took over media while the Reds are systematically dismantling and coopting everything else. Surely today the Department of State is much more aligned with the Department of Defense than it has been in the recent past pre-Obama. I say pre-Obama because Hillary ran the DoS like the DoD if you know what I mean.
I thought it was a wonderful insight that the Blues are loyal to state but not nation while the Reds are loyal to nation but not state. Very true that the Blues just care about scale. They want total order/control in opposition to chaos/freedom. I also agree that the Blues and China are natural allies. And I think the Reds and the Internet are natural allies. Maybe Balaji partially disagrees with this second statement because of the influential blood and soil minority faction in the Red Tribe but I don’t think this is a big deal. Will also return to this later.
I also hesitate to say that the Internet has taken over money. I think there are many branching paths here. Some cases of the world lead us to 1933.
As a side note, I 200% agree that master-apprentice style learning is excellent and should be brought back.
This brings us to a final point of contention. Perhaps the most fundamental and only real disagreement I have with Balaji. But first I want to say that as a member of the Yellow/Orange team that is closely allied with the Reds, I have to be a bit careful on what I say, since words on the internet matter and stuff.
At the end of the day, if the blackpillers are right, then fuck it; big bro Balaji, I’m cutting and running with you 😆. We are on the same page that orange pill comes after black pill. But let me respectfully propose two reasons why, for now, we should stay and fight alongside the Reds.
Agreed on the insight about longitudinal versus latitudinal coordination and about the unique situation of Australia and New Zealand.
I also agree that multi-polarity is inevitable and that in the long run, China’s rise is likely to continue (with or without the CCP). Short term, however, I think China has a whole host of domestic issues to deal with including overproduction/deflation/involution (really it’s all the same thing), real estate market collapse, local government debt, and population collapse/flight and many other issues. I think we still have some time here.
Completely agree that the US became an empire after WW2 and benefited greatly from having reserve currency status that came from hegemony. We were able to live beyond our means by partially exporting inflation to the rest of the world. However, different demographic beneficiaries of this exorbitant privilege received very uneven slices of the pie. Red America and the youth were left in the dust. The Cantillon effect benefited the investment class over the working class which fomented resentment. Moreover, there were other invisible costs at the national level like the march toward the Triffin Dilemma and the loss of national self-sufficiency.
I agree with Balaji and @curtis_yarvin on the Red Empire (DoD) vs Blue Empire (DoS + other soft power) analysis. Over the past few years, we saw the Reds and the Internet (Yellow/Orange Empire) subsume the power centers of the former Blue Empire. The Internet took over media while the Reds are systematically dismantling and coopting everything else. Surely today the Department of State is much more aligned with the Department of Defense than it has been in the recent past pre-Obama. I say pre-Obama because Hillary ran the DoS like the DoD if you know what I mean.
I thought it was a wonderful insight that the Blues are loyal to state but not nation while the Reds are loyal to nation but not state. Very true that the Blues just care about scale. They want total order/control in opposition to chaos/freedom. I also agree that the Blues and China are natural allies. And I think the Reds and the Internet are natural allies. Maybe Balaji partially disagrees with this second statement because of the influential blood and soil minority faction in the Red Tribe but I don’t think this is a big deal. Will also return to this later.
I also hesitate to say that the Internet has taken over money. I think there are many branching paths here. Some cases of the world lead us to 1933.
As a side note, I 200% agree that master-apprentice style learning is excellent and should be brought back.
This brings us to a final point of contention. Perhaps the most fundamental and only real disagreement I have with Balaji. But first I want to say that as a member of the Yellow/Orange team that is closely allied with the Reds, I have to be a bit careful on what I say, since words on the internet matter and stuff.
At the end of the day, if the blackpillers are right, then fuck it; big bro Balaji, I’m cutting and running with you 😆. We are on the same page that orange pill comes after black pill. But let me respectfully propose two reasons why, for now, we should stay and fight alongside the Reds.
First, I have never in my life seen a single man stand up to an entire system and win. Before Trump, I had already started to doubt democracy. But today, I have more hope that voice can work and exit is not our only option. But not simply voice, more specifically unrestricted political and memetic warfare. In the past, people never had the level of message distribution/broadcast that now exists because of social media and the internet. Since politics is a coordination game, there are now new ways to play it in cyberspace.
Also, if all of little tech cuts and runs, then the likelihood of an eventual left populism takeover will be higher. If we band together with the Reds, I think we can win. This is sort of like a Battle of the Sexes coordination game where Reds are the senior partner and Yellows are the junior partner. “Winning” is possible because the Reds this time around are much smarter and strategic than the ones from pre-Trump. There are two kinds of political games here being played simultaneously. 1) the game of maintaining power and 2) the game of making changes. The first class of games sometimes goes against the Yellow/Orange Tribe’s interests. Fair. But here I agree with the Reds that maintaining power is extremely important so some unfortunate compromises have to be made. The second class of games has not really hurt the Yellows interests. In fact, the Reds have been quite favorable toward the Yellows in many cases. Well you might say, what about the H1B issue? To the extent that the game is type 1, we can let it go. On the type 2 side, they want to introduce H1B selection by salary band rather than keep it a pure lottery. I think this is very sensible. Who from the Yellows doesn’t appreciate a good market mechanism? Also their policy of incentivizing housing supply is pretty light touch (not a mandate subjected to the local knowledge problem) and also introduces a nice market mechanism. Trump has been very good about balancing the interests between his constituents in this broad coalition. I would say that Bannon is 20% too extreme and Elon is 20% not extreme enough. But between 1.2x Elon and .8x Bannon, there is still a very broad constituency which not only forms a huge voting block but also exerts immense soft power. And while the libertarian faction is small in number and doesn’t count for many votes, we are particularly good at commerce and particularly good at tech (we are techno-capitalists after all). Just think of the immense wealth of the crypto tribe, let alone all of little tech, and how many seats in Congress that is worth. Yellows also dominate internet culture since cyberspace is our home turf. So I’m absolutely not worried about blood and soil nationalism concentrating all power. Moreover, just as there is a political pendulum, there is also an economic pendulum. The merchant class will gain more influence once other more pressing matters are sorted out like deportations of illegals, purging corruption, and securing power. The Reds know that the Yellows will be instrumental in economic growth. AI has already proved this. So we can grow revenues while cutting spending. And on top of that stablecoins promote dollar dominance. So even if fiat is eventually fated to fail, there is a difference between a hard crash (denial turns into revelation) and a soft landing. There’s also some paths where America retains privileged standing in a multi-polar world with or without USD. Imagine America just buys up shit tons of BTC while demonetizing all fiat, USD and others at the same time. For the US as Stackelberg leader in the monetary and fiscal policy game, it’s conceivable.
Also, if all of little tech cuts and runs, then the likelihood of an eventual left populism takeover will be higher. If we band together with the Reds, I think we can win. This is sort of like a Battle of the Sexes coordination game where Reds are the senior partner and Yellows are the junior partner. “Winning” is possible because the Reds this time around are much smarter and strategic than the ones from pre-Trump. There are two kinds of political games here being played simultaneously. 1) the game of maintaining power and 2) the game of making changes. The first class of games sometimes goes against the Yellow/Orange Tribe’s interests. Fair. But here I agree with the Reds that maintaining power is extremely important so some unfortunate compromises have to be made. The second class of games has not really hurt the Yellows interests. In fact, the Reds have been quite favorable toward the Yellows in many cases. Well you might say, what about the H1B issue? To the extent that the game is type 1, we can let it go. On the type 2 side, they want to introduce H1B selection by salary band rather than keep it a pure lottery. I think this is very sensible. Who from the Yellows doesn’t appreciate a good market mechanism? Also their policy of incentivizing housing supply is pretty light touch (not a mandate subjected to the local knowledge problem) and also introduces a nice market mechanism. Trump has been very good about balancing the interests between his constituents in this broad coalition. I would say that Bannon is 20% too extreme and Elon is 20% not extreme enough. But between 1.2x Elon and .8x Bannon, there is still a very broad constituency which not only forms a huge voting block but also exerts immense soft power. And while the libertarian faction is small in number and doesn’t count for many votes, we are particularly good at commerce and particularly good at tech (we are techno-capitalists after all). Just think of the immense wealth of the crypto tribe, let alone all of little tech, and how many seats in Congress that is worth. Yellows also dominate internet culture since cyberspace is our home turf. So I’m absolutely not worried about blood and soil nationalism concentrating all power. Moreover, just as there is a political pendulum, there is also an economic pendulum. The merchant class will gain more influence once other more pressing matters are sorted out like deportations of illegals, purging corruption, and securing power. The Reds know that the Yellows will be instrumental in economic growth. AI has already proved this. So we can grow revenues while cutting spending. And on top of that stablecoins promote dollar dominance. So even if fiat is eventually fated to fail, there is a difference between a hard crash (denial turns into revelation) and a soft landing. There’s also some paths where America retains privileged standing in a multi-polar world with or without USD. Imagine America just buys up shit tons of BTC while demonetizing all fiat, USD and others at the same time. For the US as Stackelberg leader in the monetary and fiscal policy game, it’s conceivable.
Second, if the blackpillers are right, then what happens in the aftermath in America? In the soft landing scenario, no issue. In the hard crash scenario, you would much rather the Reds be in power after the dust settles than the Blues. Power hates vacuums so one group will win the ensuing power struggle eventually and reestablish order. If the communists take power, El Salvador may not be safe for long. Singapore and Dubai would probably be fine from what happens in the US but would still be subjected to the sphere of influence they fall under as the world recalibrates from ripple effect chaos out of America. The point I’m making here is that if the communist bear is chasing you, it is as useful to run really fast as it is to slow down the bear.
Ultimately no matter where us Yellows run, we would be vassals of some sovereign since only a state and a military can, when push comes to shove, guarantee local security against foreign incursion. If an unprotected pot of gold appears on the globe, everyone will come for it. What are the Yellows but wandering pots of gold. So imo, the only options are to create security guarantees ourselves or to borrow the might of existing states by exerting soft power. In any case, power, as dirty a word as it is, matters. Singapore thrived because LKY understood both liberty and power, as did the founding fathers of America. When the Japanese came to Singapore, LKY did not cut and run (though honestly he might have wanted to here). When it came time to push out the Brits, he didn’t run either. When he faced off against the communists, again he didn’t run. Also, we should remember that he preferred to borrow the state protection of Malaysia rather than build his own but it was Malaysia who kicked Singapore out. But once the deed was done, very quickly he understood he needed a military. Every state is a family and every citizen subscribes to a protection racket.
To summarize, I think the Yellow Tribe should not shy away from power. Without power, liberty is fleeting. So I say we throw in with the Red Team. If we have to make some unseemly compromises, so be it. Power is important. Like you said, the Blue force is a totalizing force that pursues scale. It’s the Borg. We just want to be left alone but they will never leave us alone. If we fight together with the Reds, in the best case, we win. In the worst case, we slow down the bear.
Ultimately no matter where us Yellows run, we would be vassals of some sovereign since only a state and a military can, when push comes to shove, guarantee local security against foreign incursion. If an unprotected pot of gold appears on the globe, everyone will come for it. What are the Yellows but wandering pots of gold. So imo, the only options are to create security guarantees ourselves or to borrow the might of existing states by exerting soft power. In any case, power, as dirty a word as it is, matters. Singapore thrived because LKY understood both liberty and power, as did the founding fathers of America. When the Japanese came to Singapore, LKY did not cut and run (though honestly he might have wanted to here). When it came time to push out the Brits, he didn’t run either. When he faced off against the communists, again he didn’t run. Also, we should remember that he preferred to borrow the state protection of Malaysia rather than build his own but it was Malaysia who kicked Singapore out. But once the deed was done, very quickly he understood he needed a military. Every state is a family and every citizen subscribes to a protection racket.
To summarize, I think the Yellow Tribe should not shy away from power. Without power, liberty is fleeting. So I say we throw in with the Red Team. If we have to make some unseemly compromises, so be it. Power is important. Like you said, the Blue force is a totalizing force that pursues scale. It’s the Borg. We just want to be left alone but they will never leave us alone. If we fight together with the Reds, in the best case, we win. In the worst case, we slow down the bear.
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