This week on Upstream, I spoke with Ezra Klein about why we’re polarized, what Silicon Valley gets right and wrong about politics, and how his ideas of buildism are different from those of Tyler Cowen or Marc Andreessen.
Our Moment of Zen episode is with Mike Solana, with whom we discuss SF politics, Tech & Media battles, Tik Tok policy, and the AI wars.
Thanks to Secureframe, Riverside, Mercury, and MarketerHire for sponsoring.
Previously we discussed how markets/software are eating the world and how that leads to the fragmentation of communities. Similarly, we talked about how justice/egalitarianism are eating the world and how an excess of that can disrupt economic growth.
We also discussed why communism is popular despite its track record of 100 million deaths and why economic growth is unpopular despite getting billions of people out of poverty.
To recap: since communism is how we act with our family, we expect it to be how we should act within our society. Since capitalism has no place in our innate family dynamics, we don’t expect it to work to take care of each other societally. In fewer words: our moral intuitions are off.
In this piece we’ll dive into why our moral intuitions work this way and where they lead us astray.
Communal vs. systematic mode
To start, it’s worth introducing a useful mental model created by Dave Chapman which differentiates our communal and systematic modes of being.
Communal mode (i.e. tribal living) is what we’re wired for — this is the style of living that makes us happy. In contrast, systematic mode (i.e. rationality, capitalism) is what helps us feed billions of people.
Communal mode works best on a camping trip scale: everyone does equal work, receives equal resources, and has special and unique relationships with each other. You can run a camping trip this way, but you can’t run a complex society like that.
On the other hand systemic mode was purpose-built to enable global societies. While systematic mode won’t bring you meaning or happiness directly (and may even threaten your traditional notions of it), it will increase GDP and as a result extend life spans and feed billions of people.
If you have the whole world operating on communal mode, we won’t be able to have nice things (e.g. food, shelter, and healthcare for billions of people)
But if the whole world operates on systematic mode, our sense of belonging and meaning will collapse.
What we want is for tribes to run the micro world (communities), and for systems & markets to run the macro world (the economy).
You can’t run an entire economy by prioritizing belonging because the goal of the economy is to provide material abundance to all. Running it like a Kibbutz just won't work.
The same applies in the other direction too: The goal of a community is to provide the feelings of belonging, security, and shared meaning we found in hunter gatherer bands. You can’t achieve that by running your communities and relationships like Bridgewater.
Different scopes for different folks
We benefit from the economic growth systematic mode provides our economy and the sense of belonging that communal mode grants us. We also struggle from the stagnation that tribalism brings to our economy and the meaninglessness the systemic mode brings to our relationships.
Perhaps the solution is simply that we need to keep the tribalism out of our markets and the markets out of our tribes. Both should play their role and go no further.
I used to be an absolute fan of income-share agreements, or investing in people, and, while I still think the idea should exist, after intertwining a bunch of economic partnerships with friendships and seeing both the benefits and challenges that emerge, I’m more sober on it.
At a more macro level, Nassim Taleb used an analogy to explain the optimal-policy-per-scale phenomena best: “At a fed level, I’m a libertarian; at state level, I’m a republican; At a local level, I’m a democrat; and with my family and friends, I’m a socialist.”
To be sure, egalitarianism eating the world has granted us civil rights and virtually all social progress, just like markets eating the world created the prosperity that makes egalitarianism possible. On net, good things.
But egalitarianism at its extreme becomes communism. Meanwhile markets at their extreme tend to devalue human life when it can’t be connected to making money. When tribes are run like markets, you lose kinship and connection. When markets are run like tribes, you get inefficiency & authoritarianism.
Markets eating the world is the closest we get to a meritocracy. For the most part, whoever performs, wins. Tribalism eating the world makes the world all about who you know, who you can charm (read: bribe), and who owes you favors.
One approach to counteract this is: "Socialism in the sheets, Capitalism in the streets." This means: socialism on a local relationship-community level (priceless, reciprocal, inefficient, no metric/scale, connection) and capitalism on a global coordination level (prices, comparative advantage, optimizing, scale, wealth creation).
How should egalitarianism and meritocracy coexist?
The above points at a bigger question around scoping that we’ll expand upon in future posts: how do we have a society that is both sufficiently egalitarian *and* meritocratic? What is their proper scoping?
The challenge of our time is reconciling egalitarianism and meritocracy such that we can have both of them without each threatening the other.
Agnes Callard described this tension well:
“There is a philosophical conundrum at the root of all this: morality requires we maintain a safety net at the bottom that catches everyone—the alternative is simply inhumane—but we also need an aspirational target at the top, so as to inspire us to excellence, creativity and accomplishment. In other words, we need worth to come for free, and we also need it to be acquirable. And no philosopher—not Kant, not Aristotle, not Nietzsche, not I—has yet figured out how to construct a moral theory that allows us to say both of those things.”
Too much meritocracy is not the solution. We don’t want to go back to a pre-Christian society: A society that only cares about strength is terrible for most of its people.
However, we also don't want a society that runs entirely on Christian ethics. The Soviets tried that. Didn't work.
Too much egalitarianism systematically destroys excellence — and then you don’t have sufficient resources to be egalitarian with. Even Marx wanted communism after capitalism had provided sufficient abundance.
Egalitarianism and meritocracy have both been amazing for the world, and in turn made the world more egalitarian and meritocratic. There are benefits to both — but each up to a point. Where's that point? Where's the middle ground? Who gets to decide? We’ll explore these questions in future posts.
New here. I’m glad to see more people talking about scale/scope. Erik, I recommend you read up on Elinor and Vincent Ostrom and their work on Polycentricity. I find them increasingly prescient.
What if the cost of energy approaches close to zero (in the future) and AI begins to generate and execute ideas and improvements at an non-human rate? Do you think this perspective on balance and how to achieve it would shift. Do we then need the delicate balance of pushing people for excellence (so we get progress today) while not letting down large swatches of people?