https://sotonye.substack.com/p/if-einstein-had-the-internet-an-interview

Balaji is a former General Partner at Andreessen Horowitz and former CTO of Coinbase, cofounder of Earn, Counsyl, Teleport, and Coin Center, renowned angel investor, and the only thinker online who matters—with Andreessen Horowitz cofounder Ben Horowitz describing him as “Einstein if he had internet access.” He holds a BS, MS, and PhD in Electrical Engineering and an MS in Chemical Engineering from Stanford, though he thinks offline colleges are now obsolete educational technology and would advise young people to do an ISA or a startup instead. I have no idea how one person can achieve so much but I’d like to figure out how, and I’m sure everyone else would too so we’ll figure it out together. To avoid being overtaken by the future, follow him and turn his notifications on via twitter.com/balajis and subscribe to his new project at 1729.com for more.

My first question for you is one I posed recently in a conversation with Marc Andreessen, which was inspired by the common sentiment from the activist-class that non-engagement in politics is the same as working against human progress: Almost all technological advances and improvements to quality of life seen over the last half-century have found their way to the public from the private sector. While the same ineffectual debates over equal opportunities in education, employment, and healthcare have happened in congress for decades, the private sector has made university-level learning accessible and free, employs over 70% of all Americans, and inches nearer every year to making death optional. I’m uncertain whether we need politics at all with a market so apt at solving problems and would even like to think issues like race in the United States may be amenable to a market solution. Is it reasonable for me to think so broadly about what the market can do?

Well, lots to talk about here.

First, I generally agree with the thrust of your question. But I think we often discuss these things in kind of a flatland-ish way, as a projection down onto a few dimensions (politics and the market and so on), which do make sense, but that don’t always lead to conclusions about why one force is triumphing over the other today when it lost ground in the past. Why, for example, is the market (SpaceX, Blue Origin) now driving space exploration when it used to be politics (Sputnik, NASA) in the 50s and 60s? Why were political leaders both willing and able to crush market forces in the early 20th century (Stalin, Roosevelt, etc), only to U-turn completely by the late 20th century (Reagan, Gorbachev, Thatcher, Deng Xiaoping, Manmohan Singh)?

My high-level answer is that technology is the driving force of history. Technology favored centralization in the US from arguably 1754-1947 (join or die in the French and Indian War, unified national government post-Civil War, railroads, telegraph, radio, television, movies, mass media in general, and mass production) and is now favoring decentralization from roughly 1947 to the present day (transistor, personal computer, internet, remote work, smartphone, cryptocurrency).

This thesis isn’t wholly original to me, of course — you can see major pieces of it in books like the Sovereign Individual, The Singularity is Near, Snow Crash, Ready Player One, and sci-fi in general. Indeed, the entire premise of sci-fi is that a new scientific invention has changed the world, though we only seem to fully understand that in the context of a movie (where the changes are often for the worse and happen in fast-forward montages), but not in the context of the world today (where the changes are often for the better and happen one day at a time).

Put another way, science and technology aren’t the main headlines of our day, politics and crime are — even if the former is where most of our attention should be. This too may be just a 20th century hangover, a time when politico-verbal matters took center stage over techno-economic affairs. But as the driving force of history, as the throughline of history, one perspective is that regimes rise and fall, that Ozymandias types eventually fall into oblivion, but technology is (so far!) up and to the right. And that what distinguishes man from ape is technology.

Anyway, from this vantage point, many of the ideas on how to organize human society have been around forever, but technologies make them feasible and infeasible by turns. A political ideology that requires total centralized control may seem unstoppable when technology favors this...and then may become untenable when innovation turns things in the direction of decentralization.

So in this view it is technology that is the driving force of history, and it is this force, this z-axis vantage point, that we can use to look down upon both politics and the market.

A related meta-framework, before answering your question, is that there are now not one but three Leviathans in a Hobbes-like sense. Three forces that hover over fallible men that make them behave in pro-social ways: God, State, and Network.

The first Leviathan was God. In the 1800s, people didn’t steal because they actually feared God. They believed in a way that’s hard for us to understand, they thought of God as an active force in the world, firing-and-brimstoning away. They wanted god-fearing men in power, because a man who genuinely believed in God would behave well even if no one could punish him. That is, a powerful leader who actually believed that eternal damnation was the punishment for violating religious edicts could be relied upon by the public even if no human could see whether he had misbehaved. At least, this is a rational retrofitting of why being genuinely “god-fearing” was important to people, though they might not articulate it in quite that way. God was the ultimate force, the Leviathan.

By the late 1800s/early 1900s, Nietzsche wrote that “God is dead”. What he meant is that a critical mass of the intelligentsia didn’t believe in God anymore, not in the same way their forefathers did. So a new Leviathan now rose to pre-eminence, one that existed before but gained new significance: the State. And so in the 1900s, why didn’t you steal? Because even if you didn’t believe in God, the State would punish you. The full global displacement of God by the State (something already clearly underway in France since 1789) led to the giant wars of the 20th century, Democratic Capitalism vs Nazism vs Communism. These new faiths replaced g-o-d with g-o-v, faiths which centered the State over God as the most powerful force on earth.

That brings us to the present:

Now, today, as the graphs above show it is not just God that is dead. It is the State that is dying. Because here in the early innings of the 21st century, faith in the State is plummeting. Faith in God has crashed too, though there may be some inchoate revival of religious faith pending. But it is the Network that is the next Leviathan.

By the Network I mean the computer network, the social network, the internet, and now the crypto network. In the 1800s you wouldn’t steal because God would smite you, in the 1900s you didn’t steal because the State would punish you, but in the 2000s you can’t steal because the Network won’t let you. Either the social network will mob you, or the cryptocurrency network won’t let you steal because you lack the private key, or both.