Transcript of Episode 7 — Daniel Schmachtenberger

The following is a rough transcript which has not been revised by The Jim Rutt Show or by Daniel Schmachtenberger. Please check with us before using any quotations from this transcript. Thank you.

Jim Rutt: Howdy! This is Jim Rutt, and this is The Jim Rutt Show. Today’s guest is Daniel Schmachtenberger. Daniel is an independent thinker focusing on the future of civilization, the sensitivity and potential of our current situation, and how we may navigate the path forward. He’s also a director of R&D and co-founder of the Neurohacker Collective.

Jim Rutt: Welcome, Daniel.

Daniel Schmachtenberger: Thanks for having me, Jim. I’m looking forward to this conversation.

Jim Rutt: Yeah. I’ve followed your work for some time, and while I keep my eye on several thinkers who are thinking about the future of our society, your perspective is perhaps both the most dire and the most hopeful. Interesting that you can be both.

Daniel Schmachtenberger: Yeah. I call that a hard fork hypothesis.

Jim Rutt: I like that. It’s a good way to describe it. On the dire side, you said pretty explicitly, you believe humanity is going to end relatively soon. We don’t address some of our fundamental design issues and our social operating system.

Daniel Schmachtenberger: Yeah. I basically say that when we look at history, we see that most of the previous civilizations, obviously, they don’t still exist, and they underwent internal decay that led to how their collapse occurred. We can look at the way that Tainter studies this or the way Jared Diamond did or the way that Strauss–Howe or Baudrillard or different models of civilization collapse describe it, but they’re just like people have a life cycle, there seem to be these life cycles of civilization, and there are certain things in common that lead to their breakdown.

Daniel Schmachtenberger: The difference now is that we have a fully globalized civilization, and rather than just causing local environmental harm that can lead to a limit of growth issue, we can affect the habitability of the biosphere at large. Obviously, we didn’t use to have weapons of mass destruction, so there’s a total difference of the capacity for warfare, et cetera, right?

Daniel Schmachtenberger: So, technology, both the globalization and technology have changed the magnitude of the issues in a way where the change of magnitude actually becomes a change in kind. Yet, we haven’t figured out not civilizational collapse. So, if we forecast all of the different possible catastrophic risks or existential risks, there’s a lot of them. What I would say is that they all are the result of some underlying common generator functions.

Daniel Schmachtenberger: So, as a result, if we just try to deal with a particular AGI scenario or a particular climate change or a particular biodiversity loss or World War III scenario, we don’t buy ourselves that much time before another scenario emerges because the situation is basically overdetermined. So, we actually have to address the generator functions. We have to address that, categorically, rather than just instances. If we do that, that becomes the kernel of a new civilizational model that is radically different than any civilizations here before which is the more optimistic picture. This is like a hard fork between very different scenarios.

Jim Rutt: Yeah. I was going to say on the hopeful side, you’re basically trying at least to define a new social operating system, and at least for me, my naïve way of looking at things, it’s still a very rough sketch. I can see that if you’re able to fill this in, it may make human life vastly better and more humane than it’s ever been before.

Jim Rutt: Before we get to your specifics so, I would like for our audience, and keep in mind that our audience are smart people, I hope, but they’re not necessarily experts on the way you and I and Jordan, and some of our friends talk. So, I want to make sure that neither of us get too far afield in jargon and that we make sure that we bring substrate issues up before we dive in deeper.

Jim Rutt: Specifically, I’ve heard you talk in the past very eloquently about how human-created technology is a fundamental change in the dynamics of the world, and that technology, i.e. human, invented technology as fundamentally different than evolution and produces fundamentally different dynamics. You want to talk about that a little bit before we jump in to the more specifics of where we’re at?

Daniel Schmachtenberger: Yeah. It’s definitely a central thing for us to figure out, especially when if we don’t realize this, we try and use evolutionary biology and evolutionary theory to model human systems like redefining theory of markets based in evolutionary theory and social Darwinism at large and that actually my assessment doesn’t work.

Daniel Schmachtenberger: A lot of this insight on the fundamental difference of tech and evolution and highlighting it was something Forrest Landry helped me understand, but the model goes like this. Evolution in evolved systems, we can think of evolution as defined by three primary characteristics, which is mutation occurs, and then selection occurs, but selection is two things. Does the agent survive and does it reproduce? So, survival selection, mate selection. Then obviously, that is survival and mating within evolutionary niches.

Daniel Schmachtenberger: Now, something to understand about that is that the mutation pressures that are affecting everything in an ecosystem, there’s a kind of evenness of the distribution of mutation pressures. Whether we’re talking about gamma rays or oxidation or just copying errors or viruses, they’re affecting all of the lions pretty similarly, and the lions and the gazelles, and the plants. So, we don’t have radical mutation occurring in one place and no mutation occurring somewhere else.

Daniel Schmachtenberger: So, as you have a mutation that would make a lion faster or any predator faster, you have similar mutations that have a distribution in the fastness and slowness of the prey animals. So, then, of course, if you get a little bit faster in one, and they say the lion eats the slower gazelles, then the fastest gazelles reproduce and that leads to doubling down on those genes. So, that’s the next part is not just the evenness and the distribution of mutation, but also co-selective pressures.

Daniel Schmachtenberger: So, the advances anywhere lead to a pretty strong symmetric coupling of power across the whole system. So, this leads to a situation where you do have rivalrous dynamics in nature. You do have something like individual agents doing self-maximization. Of course, it’s not purely that. We have a lot of symbiosis. We have animals that are paying attention to their young and animals that wouldn’t survive if not for the whole group of animals, but you can model individual self-optimizing agents and get a certain successfulness if you have the symmetry of power.

Daniel Schmachtenberger: So, you have this lion and this gazelle are in rivalrous dynamic, but all lions and all gazelles are symbiotic with each other. Meaning, the lions would die without the gazelles, the gazelles would die without the lions. As either one makes an advancement, it drives the other one to make an advancement. So, this is where, when we think of social Darwinism, we think of the idea that competition drives innovation and advancement in those types of things.

Daniel Schmachtenberger: The difference when tech comes about is, so, again, these changes in the animals are happening mediated through genetic, mutations of the genes, and then survival, and then re-combinatorics of the genes. So, the genes are physically instantiated pattern replicators. When technology, technology, I don’t just mean tech, I also mean language. I also mean social tech, coordination tech, so tech in the Sanskrit sense of consciously mediated methods of doing things, basically, things that come from the capacity for abstraction and creating abstract pattern replicators.

Daniel Schmachtenberger: The abstract pattern replicators can change much faster than the instantiated ones can, and they can change with an uneven distribution. So, when we think about tool-making starting with Homo habilis and stone tools, which is very different than a chimp using a rock that it finds, but not whittling sharping or chipping a sharper rock, which is that the chimp or the bird or whatever it is that’s using something can experientially notice that this thing is better at doing what it wants in this thing is in the moment, but it can’t understand that between all three rocks why this one is better at cutting the thing is because of the abstract principle of sharpness, and then say, “Oh, I understand what mediates sharpness, and I can design something with more sharpness.

Daniel Schmachtenberger: That abstraction capacity seems to be part of how we define early humans and then it got double down in Homo sapiens, and it’s a different process than evolution of bringing new stuff into existence. It’s not occurring through random mutation, and just selective dynamics. It’s occurring through an agent that’s actually understanding something abstractly and intentionally creating it.

Daniel Schmachtenberger: So, if you think about evolution as the stuff that emerges, there wasn’t a conscious choice to have something emerge. It emerged as the result of complexity dynamics. So, it’s unconscious. It’s radically parallel. It’s radically distributed. It’s radically combinatoric. It’s slow, almost everything fails, but you get an interoperability of everything. So, what makes it through are very self-stabilizing complex systems.

Daniel Schmachtenberger: The technology is actually consciously created. It can happen in a local way, not everywhere, so it’s not radically parallel and decentralized. It happens more in a serial fashion, and it creates parts that are not necessarily in equilibrium with whole systems.

Daniel Schmachtenberger: So, it really is mathematically almost in opposite kind of creative process. The thing is if you have an evolutionary agent, like a human that has evolutionary motives, but is now able to say human operating as apex predator, can increase its predatory capacity, orders of magnitude rapidly faster than the environment can increase its resilience to that predatory capacity. Now, we have a fundamental problem. This is a lion getting a thousand times faster in a hurry without gazelles being able to make a mutation in adequate time and the lions eat all the gazelles, and then go extinct.

Daniel Schmachtenberger: So, we have a situation where technology has broken the power symmetry that is what is necessary for the metastability of evolved systems. So, you see that not only is there symmetry of power between the lion and the gazelle, there’s also symmetry of power between lions and lions, and gazelles and gazelles.

Daniel Schmachtenberger: The most badass lion is only 2x or 1.5x more in the median line, but if we look at Putin’s killing ability or Trump’s compared to yours or mine, it might be billions or trillions of times more, and the same we could say for economic capacity. If you look at sapiens at large compared to the rest of the biosphere, it’s similar.

Daniel Schmachtenberger: So, when you think about one lion just even if it went rogue and didn’t just kill to survive just started killing everything it could, it has such limited destructive capacity, and that’s not true, and especially as we get into decentralized exponential tech. One actor or a small group of actors has really radical amplification of agency.

Daniel Schmachtenberger: So, if you keep having rivalrous agency, rivalrous basis for agency but with very high power relative to the overall playing field, you end up getting a basis for fundamental instability.

Jim Rutt: Of course, it’s not only all about destruction, either. Two data points that jump out at me that we are doing things that we think of as constructive, that have to be getting well near our limits are, for instance, the fact that of the large mammals on earth, it’s now thought that the majority, the biomass is humans plus our domesticated animals. When it comes to birds, it’s even more radical. It’s thought that the domesticated birds represent 70% of the biomass of all birds on earth. So, there’s nothing destructive, specifically destructive about catching and killing, but we’ve essentially engineered a technology, which has co-opted a majority or 70% of the energetics and biomass of the biome, and it’s continuing to grow exponentially, which strikes me as a very strong signal, which is very little talked about.

Daniel Schmachtenberger: Yeah. So, this is the limits of growth thing as opposed to, say, a warfare or terrorism or intention destructive thing. So, think about this. When we think of apex predators, they evolve to fit a niche, and because their adaptive capacity is mediated through genes, through concrete pattern replicators, they don’t do very well outside of that niche. So, polar bears don’t leave the arctic, and cheetahs don’t leave the Savannah, and orcas don’t get out of the ocean, but because our apex predator capacity was mediated by tools and we could make different tools, including different coverings for ourselves in different environments, when we would overkill an environment, rather than have our population stabilized, we would just move to a new environment and become the apex predator there.

Daniel Schmachtenberger: So, we went and became apex predator everywhere overhunted and overfarmed environments everywhere, overfished, et cetera. That is really different than every other animal. Again, if we think of the examples you were just giving, there’s totally biodiversity loss and the relationship of total animal life in domestication versus wild, if you think about an apex predator like an orca or a great white shark in the ocean, and how many, say, fish it can kill in an hour, and then you think about an ocean troll with a mile-long drift net, it’s just not even … obviously, we aren’t apex predators. They can’t destroy whole ecosystems. They also can’t genetically engineer new creatures.

Daniel Schmachtenberger: So, we have to stop modeling ourselves as apex predators competing with each other to be better apex predators and take the top because the destructive capacity, even of not intending to destruct, just of intending to extract, is well beyond the replenish rates of the system.

Jim Rutt: On top of that, our first episode with Simon DeDeo, we talked a fair amount about the rate of social evolution is accelerating. The rate of invention of new technologies, new capabilities is way faster now than it was just 30 years ago. We’re already approaching the limits or probably exceeded the sustainable limits of our society, and we have social evolution that’s going exponential, and we still a have a rising world population last I saw projected the top out of 11 billion with many of those people expecting an increase in their “lifestyle” towards the American and European one. Looks like to me a train wreck common at very high speed.

Daniel Schmachtenberger: Right. So, again, this idea that we didn’t start over hunting an environment and then it became harder to eat and breathe, so then we came in to a sustainable population with the environment, we just moved to another environment. There is this rebound effect that we see with humans. We see it in all of evolution, right?

Daniel Schmachtenberger: Our friend, Bret Weinstein will say, “If there’s an evolutionary niche, it will get filled with something,” right? So, in a similar sense, though, with humans, we don’t have to wait for a genetic mutation. We can have a memetic mutation to figure out how to exploit some new niche.

Daniel Schmachtenberger: So, this is where we get rebound effects where increases in efficiency don’t lead to us being more sustainable with the environment, it would lead to us figuring out how to have profitable exploits on more area.

Daniel Schmachtenberger: So, when you look at something like the Jevons paradox or other abstractions of it, if I get a 20% increase in energy efficiency, we don’t just use 20% less energy, we find whole new markets that weren’t open based on now what’s going to be profitable. We go exploit those, and end up using more net energy as a result.

Daniel Schmachtenberger: So, when you look at trying to figure out a steady state population, steady state population doesn’t actually work. It doesn’t work the way that we like to model an evolutionary biology with the way that humans continue to advance increases in capacity and efficiency and then exploit all.

Jim Rutt: Yeah. You’ve spoken quite a bit about you’d combine exponentially increasing technology with the core rivalrous win-loss dynamics of at least our economic system, and a goodly part of our social system. Could you talk a little bit about how the coupling of those two together are spectacularly different and either by itself?

Daniel Schmachtenberger: Yeah. So, this is, I mentioned earlier that all of the catastrophic and existential risks have underlying generator functions. What I mean by that is that … Let’s say we’re looking at wanting to stop a particular environmental destruction or war or whatever it is. Well, we can look at why are those things caused, and we can find some things that seem special to specific instances, but some things that are part of a causal set that are true across all of them.

Daniel Schmachtenberger: So, obviously, we can look at something like perverse incentive. So, with the environmental destruction, if the wild birds aren’t worth very much to us in the wild, but domesticated ones and farms or the farms take over the wild areas are, if [catilla 00:16:01] were something to us when domesticated and then killed and not when they’re free, then, of course, we have an economic incentive to exploit everything.

Daniel Schmachtenberger: The same would be true if we have a for-profit military industrial complex or wars more profitable than peaces. So, the underlying idea here is that you can’t prevent a harm while there is a very strong incentive to cause it because that incentive is an evolutionary niche for a particular way of getting ahead, and it will end up getting filled. So, we try to make a law to bind that, but as we know, strong economic power ends up being able to influence law pretty heavily.

Daniel Schmachtenberger: So, the thing that is designed to bind the problems of the incentive system ends up getting corrupted by the incentive system. So, we can get into that more later, but this is an idea of something like perverse incentive that isn’t unique to one issue. It’s underneath lots of issues. So, if we want to abstract and say, “What are the generators that give rise to all of the possible existential risks in the future?” The first one is the one that you just mentioned. First one I would identify is that if humans are running rivalrous games, and by rivalrous games I mean some ingroup that is seeking to get ahead in a way that can occur at the expense of an outgroup and/or the commons.

Daniel Schmachtenberger: So, whether that’s a person or a company or a country, if it can beat someone else via a war or it can exploit an environment and get ahead or it can corner the market or whatever it is, it’s playing a game where its win is going to require or at least reserves the right to be at the cause of something else.

Daniel Schmachtenberger: If we run rivalrous games, but we’re not limited in our rivalrous capacity the way animals are because we can innovate new ways of winning at rivalry via abstraction, i.e. tech, but in the moment we deploy some new asymmetric tech, everybody sees it, reverse engineers it, makes mutations on it, and so we keep ratcheting up power, then we get an exponential power equation, but we’re using power in ways that inexorably cause some harm to the total system.

Daniel Schmachtenberger: You can’t actually run exponential harm in a finite playing field and not have more intrepid than the system can handle. So, rivalrous games multiplied by exponential tech, self-terminate. Right now, exponential tech is inexorable. We cannot put the cat back in the bag. We can’t stop it.

Daniel Schmachtenberger: So, either we figure out rigorously anti-rivalrous systems or the human experiment as we know it is finite in duration. The thing is to say rivalrous systems, that’s a big deal because separate nation states are the basis of rivalrous systems, and so our private balance sheets. So, the changes that we’re proposing are very, very fundamental ones. They’re ones at the level of the axioms of what we think of as civilization, but that’s why we have to start by saying all previous civilizations also failed.

Daniel Schmachtenberger: We actually have to change things at a deeper level. We’re not talking about just making a new civilization where this is similar to the enlightenment or the renaissance or the founding of America or the beginning of Sumeria. It’s actually different in kind in each of those changes because each of those changes have been an up-ratcheting of rivalrous capacity.

Daniel Schmachtenberger: Some new coordination capacity or technological capacity that led to more capacity to win rivalrous games against an outgroup. I’m basically saying now humanity as a whole with no outgroup has to figure out how to do not for-rivalrous games.

Jim Rutt: As you know, I’m interested in this, and have worked on some of it, and thought about it a little, but I want to play the cheerful skeptic here for a moment, if you don’t mind, and offer a possible argument that says, “Maybe we don’t have to go that far.” Again, I’m not going to say this is my actual belief, but let’s say this is a well-established argument for a less radical approach, which we might call democratic liberalism. We, in passing, talked about the fact that our legal system, our political system has been hijacked by our economic and financial systems.

Jim Rutt: We could, in theory, fix that. It might require an amendment to the constitution, and some other things, but it could be fixed. Secondly, the depletion of the commons, the democratic liberal argument is if we priced the externalities correctly, we could defend the commons. We also look at Ostrom’s theories of managing the commons, and those are assumed to take place in a world with rivalrous economics around them.

Jim Rutt: How would you respond to those and say, “Rather than changing the jet engine on the airplane while it’s in flight, we’d be better off attempting to be smart about fixing our democratic liberalism by breaking the hack between money and politics, and by rigorously and probably initially, very conservatively, meaning expensively pricing externalities?”

Daniel Schmachtenberger: I will say that that is formally impossible, and I’ll explain why, but there’s a few aspects to it. So, this will take a minute.

Jim Rutt: Take as much time as you like. This is really important.

Daniel Schmachtenberger: I would start by wanting to be clear on the fundamental difference between a market and a government and the relationship between those because what you’re talking about is a government regulating a market.

Jim Rutt: Yes. In fact, I would call that the modern democratic liberal synthesis that started in the 1920, was fully in existence by the 1930s, and was locked in its modern form in 1948.

Daniel Schmachtenberger: Right. So, what I would say is that there are certain architectures within markets that lead inexorably to certain issues, other ones within governments. I’m going to try and abstract this at the most abstract level that works, which is this will be true for any form of government, whether it’s a two-party system or a three-party system or has a parliament or doesn’t due to simply the nature of it being a top-down imposition of law via monopoly of force.

Daniel Schmachtenberger: The same is true for whether we’re talking about any different version of how one might think of a market. So, if we think of a market, you can actually think about theory of markets like pure laissez-faire theory and try and model it via evolutionary theory, and people do, and this is where social Darwinism comes, which is these three things: mutation, survival selection, and then mating, mating selection are what define the success of markets.

Daniel Schmachtenberger: So, you have an environmental niche, which here would be called demand. People need real stuff. So, then that creates an impetus to try and figure out how to fit that niche, which is supply. People make some product or service to try and do it, but they’ll make slightly different versions. That equals mutation. The one that actually meets people’s needs best of the best values, the one that will make it through, survival selection, and then if a few of them have different properties that are all really desirable, they might mate, meaning merger and acquisition or IP trade or whatever, and you get a recombinatorial dynamics, and that’s mate selection. That’s the idea, right?

Daniel Schmachtenberger: Except as we mentioned, that’s true, but you don’t get the metastability of an evolved system because of the asymmetries are going to be intrinsic to abstract replicators that aren’t there for instantiated replicators.

Daniel Schmachtenberger: So, if we think about a market as a bottom-up coordination system, and bottom-up meaning that we don’t have longterm central planning of what we’re trying to do. Everybody is not trying to agree on something. We’re just interacting with each other via supply and demand dynamics and stuff gets upregulated. Basically, the society is all emergent properties of the bottom-up interactions.

Daniel Schmachtenberger: So, that’s one kind of thing, and we can really think of it as having certain characteristics of just the bottom-up math of it. One thing I would say then, and this is a critic of libertarian ideology, free market kind of ideology at large, is that without regulation, markets are going to have multipolar traps that they cannot resolve. By multipolar trap, it’s a generalization of whether it’s a tragedy of the commons or an arms race or any kind of race to the cliff or race to the bottom. These are scenarios where somebody can do something that is bad for the whole over the longterm, but very good for them over the near term and provide so much competitive advantage that without law to bind it, people will still buy the thing. They will still be able to get employees, right? The market forces won’t stop it.

Daniel Schmachtenberger: So, then everyone else has to compete to do the same thing or they will just lose by default in the short-term. So, now, you have everybody competing to get the cheaper material that is comprehensively damaging the environment or racing to cut down the trees faster than they actually need them because if they don’t, the other guy will cut down the trees anyways or one guy makes the AI weapons, so everybody has to make the AI weapons or they’re going to lose by default.

Daniel Schmachtenberger: So, multipolar traps in the past, when we had limited power, could lead to boom and bust cycles, where we start polluting the water because, say, everybody else isn’t polluting the water. My pollution of the water doesn’t make it that much worse, but not having to deal with my pollution properly increases my margins because I externalized some of the cost, so I’m getting ahead. Then other people say, “Fuck it! That guy is getting so much more ahead.” Everybody starts doing it. Eventually, the water is so polluted that everybody is doing worse because the fish are all dead.

Daniel Schmachtenberger: So, then there’s now a new market for selling water purifiers. So, we start doing that thing until … Then there’s a new scenario for the pollution to occur. So, you get these kind of, at best, you get a race to the bottom and then some new market opportunity race to the top. With exponentially more people and exponentially more power per person, moreover, you have situations where the bottom can be so bad that it’s unrecoverable.

Jim Rutt: Let me jump in a little bit here. You’re drawing the classic 19th century Adam Smith quasi libertarian model. Suppose that we take a more modern social democratic perspective, where we assume it is the job of the legal political government side as instantiated through democracy, to put limits on the market and what I’ve called in the past parametric social democracy, where instead of a bunch of fine-grained regulations used a dozen or so very powerful settings on the gravitational attractors within the game itself.

Jim Rutt: I’ll just throw two examples, which I’ve talked about in the past in some detail. One would be a high and rapidly rising carbon tax. Let’s say $50 a ton to start rising, $10 a year for 15 years to $200 a ton, which would send a magnificently powerful signal to stop using carbon would empower alternative energy production in a very major way. A second one, much simpler, one of the hacks we know that our current system does is use psychologically informed advertising to invent demand.

Jim Rutt: Suppose we put a 200% tax at all advertising. I have 10 more I could throw out there. So, why can’t a list of powerful parameters tame the market without having to undergo the radical shift that you’re talking about?

Daniel Schmachtenberger: Forgive me. I was starting with an unregulated market because I wanted to establish something about theory of markets, which is why we can’t do just the libertarian thing and why there’s a good case for a regulated market.

Daniel Schmachtenberger: Now, I want to then do a construction on what’s wrong with governments, and then I want to do a construction on what’s wrong with them together because I have to refer to what’s wrong with each one individually before I can do the combined thing.

Jim Rutt: All right. You go right ahead.

Daniel Schmachtenberger: Okay. So, basically, anything that has bottom-up coordination only but abstraction mediated capacities like markets is going to fall to multipolar traps. Multipolar traps with exponential tech will be catastrophically bad. That’s that.

Daniel Schmachtenberger: Then is, at least, is a story of a major reason why we justify creating states, which is, okay, we don’t want everybody to cut down all of the trees just to store them as lumber because if they don’t, the other guy will, and we’re left with no trees, and yet, how do we deal with this? We have a real coordination problem. Well, we need to create some entity that has the ability to stop everybody from doing it. So, that entity needs some kind of monopoly of force to be able to actually uphold an agreement.

Daniel Schmachtenberger: So, we want something like rule of law. We want the ability to come up with good laws, and we want the ability to enforce those laws. So, we agreed to be quizzed to a government a legitimate monopoly on violence, which internal is a police force without which law doesn’t actually exist, right? The thing that we think of as law doesn’t exist, and then externally a military force, so that the freedom for us to do this thing is upheld against other groups.

Daniel Schmachtenberger: Now, we can say, “Why do we create states?” Well, one reason is to unify groups to be able to win wars and defend themselves, and the other is to solve multipolar traps, i.e. create rule of laws so that we can coordinate better. Arguably, the actual reason is to consolidate power even more, but that is not the answer that is given when justifying it.

Daniel Schmachtenberger: So, if we think about government, the government is now not a bottom-up system, it’s a top-down system, meaning that there is some centralized rather than decentralized body that can actually make choices, whether it’s a monarchy or an oligarchy or a democracy or whatever, so it’s one person or it’s a majority of people. There are some process to be able to say, “Okay. This is the law we’re going to do and here’s then how that law will be upheld via the agency of that central body and its monopoly of force.”

Daniel Schmachtenberger: Now, we can identify things that will end up going wrong with top-down systems. We’re trying to bind the problems associated with incentive. Yet, the agents who are mediating because the government isn’t actually an entity in and of itself even though it’s acting like it. It’s run by people who are all still agents within the economic system that all still have incentive themselves, so the judge and the lobbyist, and the lawyer, and the politician all still have their own fundamentally still largely rivalrous basis for wanting increased status, power, whatever it is.

Jim Rutt: Yeah, the famous economic problem of agency risk, right? Every company has that problem, right? Every employee, in theory, is out for their own good, and so they have to build structures, so that at least to a first order approximation, the company achieves some level of good for the shareholders. So, yeah, this is a common place of any social structure.

Daniel Schmachtenberger: Yeah, because a corporation is also a top-down system like a government is. So, we can see similar issues that occur. So, this public choice theory is basically the critic of the wrongness of the incentive structures of government agents associated with markets, and it’s a classic libertarian critic of the regulatory process on markets.

Daniel Schmachtenberger: So, let’s look like at these, some examples. So, unless I have a fully global government, I’m going to make a law at the level of, say, about a carbon tax or whatever, at the level of, say, a nation state. If anyone doesn’t make that, the nation states are still caught in a multipolar trap with each other. So, I can have multipolar trap at the level of individuals or corporations or countries or trading blocks.

Daniel Schmachtenberger: So, then anybody doesn’t do the thing and they economically get ahead in the short-term even if what they’re doing is totally enviable for the longterm, then people in the other group don’t want to be bound to the law that everybody is not bound to, and yet, they don’t actually have the capacity to enforce the law on everyone else.

Daniel Schmachtenberger: This would be true for things like AI arms races. This is why we try to make a UN after World War II is recognizing that national only government won’t stop World War, so we wanted some supernational force to be a monopoly of force for everyone, except when individual nation states have catastrophic level capacity, i.e. they have nukes. What we find is that there is no monopoly of force that can be exerted over them because to have the monopoly of force work, you have to be able to exert it. So, the UN can’t tell a member country that has nukes, “You have to get rid of them,” because they’re like, “We have nukes. Fuck off! What are you going to do? Invade us?”

Daniel Schmachtenberger: This is one of the big problems is that monopoly of force only works when you can exert it. That’s why it obviously doesn’t work for nuclear deproliferation. It’s why it doesn’t work for a lot of global issues, but it’s also why even at a national level with the evolution or the emergence of decentralized exponential technologies, where small groups and non-state actors, and even individuals can get catastrophic capacities through gene drives, and drones, and whatever.

Daniel Schmachtenberger: If I have a gene drive pandemic type weapon connected to a dead man’s switch, there is no rule of law that can be exerted over me, and we’re not that far from those types of things being possibilities. So, this represents an emergent breakdown in the capacity for rule of law at large unless you run a perfected surveillance state that doesn’t allow anyone to have capacities, which is the China strategy.

Jim Rutt: Again, I want to argue here the moderate ameliorative positive even though it may not actually be mine. Let’s take the example of the carbon tax that other country want to free ride and defect from, which you can easily see there are being pressures to do so. Free riders and defections are the essence of game theory. At least to my mind, your multipolar trap is a slight generalization of the concepts of predatory game theory.

Jim Rutt: So, there’s a partial fix, whether it’s enough or not, I don’t know, which would be to have an implicit carbon tariff on imports. So, let’s say the Chinese want to defect and not collect the carbon tax. We don’t really care to the degree they don’t collect the carbon tax. Well, actually, we do care, but at least partially, we can penalize them by putting a tariff equal to the implicit carbon tax that we would have charged for the equivalent amount of carbon in a product, and especially in countries like China and, increasingly, India, which are very dependent on trade. This is at least a partial way of raising costs quite significantly for those who defect or attempt to be free riders. How would you respond to that?

Daniel Schmachtenberger: Yeah. So, let’s say the US agreed to do that, but then let’s say Brazil, under its new presidency says, “Fuck that! I’ll buy the stuff from China,” and they have some capacity to and, say, Russia does, say, some other places do, China is still growing in its GDP externalizing costs and those other places are now were losing relative to them, and now you get increasing citizen pressure to revoke that law.

Daniel Schmachtenberger: So, this is, again, the essence of a coordination problem from the view of it makes sense if we all did the good thing, the prisoners dilemma. If we all coordinate, it would be good, but if we don’t have the capacity to ensure the coordination, and anyone can defect, it becomes very easy to have the strange attractor be everybody default to defection.

Jim Rutt: Yeah. The answer to the prisoner’s dilemma as we all know is you have Tony Soprano, that if you defect, I’ll kill you.

Daniel Schmachtenberger: Yeah, which is basically some kind of even worse punishment than the original thing was that’s outside of the scenario, and that ends up being how we do it, which is underneath our terra situation. We’re willing to go to war to uphold a lot of these things.

Daniel Schmachtenberger: Now, let’s come back to even within a country. So, we know that right now, someone’s ability to get elected has to do with largely their access to not just capital, but also allyship. So, that’s going to affect how other representatives support them and how much they can do campaigning and media they can get and all those kinds of things.

Daniel Schmachtenberger: We know that we don’t have an educated citizenry. So, you have a situation where people are going to get elected proportional to really the incentives of the system more than anything else, and because people can say stuff that isn’t true and people still believe it, and they can do Russell conjugations to give people the wrong sense of things and appeal to emotional triggers and ingroup defection dynamics and stuff like that.

Daniel Schmachtenberger: So, let’s say that we try to make a law, then, of course, everyone who has financial interest, it would be damaged by that law, supports the other candidate. So, then we have to do something like campaign and finance reform, but who is going to bring the campaign finance reform through? This isn’t being one of the key things is that the lobbyists are paid for by somebody. The people who are working to change the laws continuously are paid for by somebody, and whoever it is that would … The ability to get money to someone who is campaigning also is very easy to hide through offshore banking and through third-party entities and think tanks and whatever.

Daniel Schmachtenberger: So, because we don’t have something like perfected transparent accounting, if I try to bind incentive using law, everyone who has the incentive to change that law has more resources than those that are trying to bind it and they end up basically winning. The gist there is that economics is deeper than law is in the stack of power.

Daniel Schmachtenberger: So, you can use law to bind economics to a limited degree, but let’s say, again, the company, a country tries to put some law forth that’s particularly bad for a multinational company. The multinational company says, “I’ll move headquarters to another country that doesn’t do that. I’ll give them the taxes rather than you guys, and we will support whoever is campaigning against you, and we’ll put a shit ton of law be it’s on changing the law.

Daniel Schmachtenberger: This is all the critic of public choice theory is that the incentive of the agents and the system doesn’t align with the wellbeing of the whole. The government is mediated by agents in the system, and we don’t have the right coordination dynamic. So, each actor doing the utility maximization function, each actor doing what makes most sense for them in the near term rationally creates a maximally stupid whole because of the misalignment in agency of the various actors and the inability to coordinate effectively across them.

Daniel Schmachtenberger: This gets worse with the more we can corrupt accounting, the more we can actually hide that these things are occurring, and the larger the system is, the easier it is to do that because who can actually monitor all of the things that are happening in the system?

Jim Rutt: Actually, a lot of this was prefigured and talked about in a very under-appreciated book by Mancur Olson called The Logic of Collective Action. I don’t know if you’ve ever read that, but if you haven’t, I would strongly recommend it. He’s more well-known for, I think, it’s The Rise and Decline of Nations, but the deeper book is The Logic of Collective Action, where he lays out the fact that strong small groups that have a strong interest in an issue are very likely to dominate against a much broader community of small levels of skin in the game. It’s a pretty strong critic, and it’s not exactly a public choice, but it’s close. So, okay, let’s demath.

Daniel Schmachtenberger: It’s both who has the most incentive will work hardest, and smaller groups can coordinate better than larger groups. This is why if I had two groups, two countries, say, that had an equal number of people and an equal number of total dollars to begin with, and one of them tried to create a law that bound economic inequality, so the richest person couldn’t have more than 10x more than the poorest person.

Daniel Schmachtenberger: The group that didn’t bind economic and equality would win over the group that did in any form of warfare, if the group was fairly large because if you end up getting a power law distribution of wealth or three guys on almost everything, and everybody works for them, the one guy who has almost all the resource can coordinate with himself better than the million people can coordinate with each other.

Jim Rutt: At least so far, and I think there’s an interesting possibility to think about what comes next. Really, all these are coordination and signaling problems, right? We are operating on a single or ultimately low dimensional signaling and coordination system that has given rise to the system that we have today, what I often call the money-on-money return signal molds our world. So, presumably, if we’re going to get past this, we have to think about multidimensional signaling and multidimensional coordination.

Daniel Schmachtenberger: This is exactly the center of what I’m focused on is that the problem is fundamentally the inability to coordinate between agents where their basis for agency intrinsically has deltas, right? There’s a what’s best for me in the current system of a private balance sheet and money and those types of things. What’s best for me is not what’s best for you and best for the commons even though it would be over the longterm. Over the short-term, it doesn’t seem to be.

Daniel Schmachtenberger: So, everyone is doing utility maximization functions, but with, again, unlike evolution with asymmetric power relative to the environment, and supply side relative to demand side, and things like that, and this then ends up creating a situation where it gets worse. This is actually a very important point.

Daniel Schmachtenberger: If I have true information about the nature of reality, that is a source of strategic competitive information. So, I want to withhold that information. We call this a trade secret or a classified or confidential information or intellectual property. I don’t just want to withhold that, I also want to make sure to throw anyone else that would figure it out off the central. So, I want to do not just withholding of information, but disinformation.

Daniel Schmachtenberger: When we have a situation where everyone is incented to do withholding of true information and signaling of disinformation, and then we have information technology that’s exponential information technology, where I can do customized disinformation for different persona types and all the way down to individuals, we get to a world where we stop being able to parse signal from noise because there’s so much radical disinformation, and we have a situation where coordination actually becomes impossible because of these agency issues everywhere.

Daniel Schmachtenberger: It’s supposed to be that two different intelligence agencies within a country perfectly coordinate with each other to support that country because they’re all on team country, right? Team USA against the Russians and the Chinese or whatever. Really, those two different intelligence agencies are also competing against each other for a larger percentage of the budget, and then even two different departments within that organization, and even two different people competing for the same promotion will withhold information and maybe even disinform, engage in corporate politics.

Daniel Schmachtenberger: Corporate politics is where someone’s optimizing their own bonus structure and their fealty relationships at the expense of what’s actually good for a whole because they’re not actually coupled to the whole effectively.

Daniel Schmachtenberger: So, you get a situation of fractal defection, everybody defecting on everyone to some degree while signaling that they’re not doing that. This basically means the catastrophic breakdown in the sense-making necessary to make good choices while having an exponentially increased amount of choice making power.

Daniel Schmachtenberger: If we think about that, exponentially decreasing quality of sense-making relative to the overall situation with exponentially increasing choice-making power, that’s another way to think about inevitable collapse.

Jim Rutt: Yeah. Certainly, recent evolutions in our information infrastructure have raised even higher the power of bad faith discourse, and if nothing else, it’s very substantially reduced the cost bad faith discourse, right? If we talk about as we often do in our world sense-making, the idea of sense-making and then the bigger issue of choice-making in a world of predatory disinformation and bad faith discourse leaves us in a very dangerous situation.

Daniel Schmachtenberger: Yeah, exactly. That is the central thing for us to solve.

Jim Rutt: All right. Let’s stipulate now that there’s no way out within the present game. What do you suggest we do next?

Daniel Schmachtenberger: Okay. So, I would say that the consideration that rivalrous games are necessarily causing harm to some other agent or to the commons, but that when they are multiplied by the leverage of technology that that harm becomes larger than the ecosystem can handle. If we take that as one generator function of x-risk, we know we have to have a situation that creates an anti-rivalrous basis for coordination. That is necessary, but not sufficient.

Daniel Schmachtenberger: There are a couple other generator functions of x-risk that we also have to address because we can show that all of the catastrophic risk, and this would take longer to do than we have, but we can show that all the environmental degradation issues, pollution issues, dead zones in ocean, ocean acidification, biodiversity law, species laws, climate change, all of those issues, all of what would cause World War III or large-scale war, and all the exponential tech-mediated issues like Grey Goo or AGI scenarios or biotech scenarios, and all of the things that would cause collapse, grid collapse, economic collapse, that all of those have a few generator functions in common. We could actually do a construction where we put forward these three generator functions and prove that that set is actually substantive, that there are no risks that are not a result of those things.

Daniel Schmachtenberger: So, then coming up with a solution to those things is solving for the class of what creates all of them rather than instances. That becomes the kernel of a civilization system, and we can say it’s both necessary and sufficient requirements for a non-self-terminating civilization.

Daniel Schmachtenberger: So, complicated systems subsuming their complex substrate increase fragility and evolve systems, not the technology systems. We talked already about evolution technology being different. Because of the nature of the metastability of evolved systems, we get anti-fragility. So, if I burn a forest, it will regenerate itself. If I cut my body, it will heal itself. If I damage my laptop, it won’t heal itself. If I burn my house down, it won’t heal itself.

Daniel Schmachtenberger: So, humans take the anti-fragility of the natural world, and turn it into fragile stuff. We turn it into simple and then complicated stuff. So, we turn a tree that’s anti-fragile and complex into a 2×4 that is simple, and then a house that is complicated, but both fragile, but we don’t stop at a certain place. We basically have complicated systems subsume the complex systems. So, we’re creating an increasingly higher fragility to anti-fragility ratio that we’re then trying to run exponentially more energy through an exponentially increasingly fragile system.

Daniel Schmachtenberger: This is a way of thinking about what Tainter said in the collapse of complex societies, which is the relationship between the complex and the complicated as we continue to grow the complicatedness of the scenario ends up breaking down. So, it’s important to know humans only know how to build complicated stuff. We don’t actually know how to build complex stuff, and we also don’t know how to limit our growth. That’s what I was saying whenever there’s an increase in efficiency, we just exploit more stuff.

Daniel Schmachtenberger: So, this is another kind of generator function is that we both have to learn how to build stuff that is either anti-fragile itself or fundamentally different kind of … Well, to some degree, we have to build stuff that’s more anti-fragile, and we have to not exploit all exploitable areas. So, this is really different than everything we have ever done. This is one way of speaking about it.

Daniel Schmachtenberger: The other thing that we can say is a generator function of x-risk is that it’s much easier to break stuff than it is to build new stuff just from a kind of entropy or thermodynamic perspective.

Jim Rutt: Second law of thermodynamics, the one law that you can’t repeal.

Daniel Schmachtenberger: Right. So, from an information theoretic perspective on the second law, one way I would say it is the problem I’m interested in solving is that the way humans solve problems tends to create worse problems. So, whether we’re talking about us coming up with a technological solution or a government solution or a social ideology solution or an economic solution, for the solution to solve the problem, that means it overtakes the problem, the solution has to be larger, faster, somehow bigger than the problem was, but the solution typically is to solve a very narrowly defined problem.

Daniel Schmachtenberger: So, we’re defining it as solving one metric or two or three metrics, and that’s going to interact with complex systems that affect lots of other metrics, where it will end up having harm externality, but they will be larger than the original things. So, the plow solved the problem of local famines, but ended up causing desertification and species extinction and all these things at large globally, right?

Daniel Schmachtenberger: The internal combustion engine solved the problem of too much horseshit in the cities, and the difficulty of horses, but climate change and oil spills and wars over oil and the destabilization of the middle east are all the unintended externalities of the internal combustion engine.

Daniel Schmachtenberger: We could see the same for the value of Facebook then compared to the unintended externalities it created or Twitter or whatever it is. So, in general because I can define a problem in a narrow way, but that’s actually not the problem, right? That’s a little part of it. This is the same with biotech, which I can say the problem is one biometric that I’m trying to address, LDL or whatever it is, and I can give something that lowers that, but it might also do a bunch of things that are negative, which are the side effects of that thing in the overall system, which is why that approach is not a really good approach to medicine.

Daniel Schmachtenberger: So, to formalize this even further, what we can say is that the information and the computation, the information processing that it takes to come up with a new piece of technology is orders of magnitude less than the information processing it takes to ensure that that tech won’t have any externality in its longterm application.

Daniel Schmachtenberger: It’s not just orders of magnitude. We can say that the safety analysis is going to end up being NP hard relative to the work that it takes to come up with the tech being expressible as a polynomial.

Jim Rutt: Yes. That’s absolutely right. One of the things I’ve learned in my 17 years of rolling around in complex system science is the truth of the matter is the ability to project the future evolution of a complex system is way less than most people think if only for the very simple reason of dependency on initial conditions. We know from the very simple Lorenzian strange attractors that the surprisingly simple systems are effectively impossible to predict because they’re highly dependent on very small differences in initial conditions and when you add into that strategic agents, the problem becomes, I would say, effectively impossible. So, what’s the answer? That basically says don’t ever do anything, yet we can’t do that.

Daniel Schmachtenberger: This is the tricky thing. So, this is why I say there’s something like a hard fork hypothesis, which is if you look at the history of humans, the recorded history that we have at least, nobody would consider us very good stewards of power. We’ve used our power to do some lovely things, and we’ve also used our power to torture and oppress and kill and destroy environments and whatever. Everybody’s done that. A few that didn’t do it got killed in war by those who didn’t do it.

Daniel Schmachtenberger: So, let’s say there’s a Gaussian distribution on the goodness or badness of our choices, the rivalry or non-rivalry of how we use our power. If we have beings that are at all like the beings we have been for a long time, and you exponentially increase the power of those choices, it self-terminates. So, you can’t get the power of gods without the love and wisdom and prudence of gods to guide it and have that be a sustainable scenario.

Daniel Schmachtenberger: So, we actually need humans to be safer vessels for power, given the amount of power that we’re coming in to, and we have no idea how to do that. What that means is we need a different basis for human choice making than we’ve ever had to have the level of choice making power that exponential tech is bringing about.

Daniel Schmachtenberger: So, then we have to really get into why is it that humans are making choices that they do, and what is it that is conditioning the rivalrous basis of those choices to basically have us suck with choices. Yeah.

Daniel Schmachtenberger: So, we can talk about what are some systems that we could suggest get there, but I would say that’s the core of the thing that we’re trying to address is how do we create a system in which any agents that are making choices are making choices that are not directly causing or indirectly causing harm to the system because that leads to the up-ratcheting of others doing that, and that leads to self-termination, and we’re too powerful to do that. So, how do we get something like omni-consideration of the agents leading to omni-positivity of choice-making.

Jim Rutt: Sounds nice, but how do we do it in a world, where the ability to project in a complex systems environment the impact of any change is impossible? I would also add another thing. I’d love to hear your thoughts on this. One of the things we know from human anthropology is in essentially every society on earth, somewhere between half of 1% and 2% of humans are sociopaths, right? I would add, in my experience as a corporate executive, that that number may go up to 10% or more in the C-level suites, and probably higher than that in the world of finance. So, we have this problem.

Jim Rutt: How do we evaluate the impact of a proposed change in a complex system which is inherently not very predictable, a little bit predictable, but we lose our ability to see quickly, and that some noticeable percent of the actors, you say, 1% of sociopaths doesn’t sound that bad. That means in the United States, there’s three million sociopaths, right? They gravitate towards power and a lot of them are pretty damn good at manipulating people. How do we get across those two traps?

Daniel Schmachtenberger: Yeah. If I look at all of the cluster B personality disorders in the current DSM, I would say they’re all pretty concerning. So, not just sociopathy, but narcissism, et cetera, but the most current stats I have seen were 3% to 5% of the general population in the developed worlds test for sociopathy and 30% of people in C-suite are Fortune 500 companies. I’m going to share a thought on this that I don’t have all the data to back up, but I don’t think would be hard to come up with.

Daniel Schmachtenberger: So, why do we get so much concentration of sociopathy in the top of Fortune 500 companies and politics, and then especially things like finance? Well, because they’re basically systems to attract, reward, incentive and condition sociopathy because to get to the top of the power game, it’s going to be people who are attracted to power and people who are good at winning a bunch of win-lose games because at each step they move up the ladder, they’re winning against somebody else, usually via involving things like disinformation and defection, and whatever it is.

Daniel Schmachtenberger: So, if you think about the nature of what a government or a corporation or any top-down power system are, it is basically a strange attractor for people who want to have power over for people who are running power dynamics. This is why … Let’s try and say that I had a benevolent dictator. Well, there’s a reason that we don’t get sustainable benevolent dictators is because let’s say I had a benevolent dictator, and we can get this in a corporation from Great Founder Theory sometimes because if the founder holds the majority of stock and whatever, but it never outlives them, and usually they end up getting kicked out.

Daniel Schmachtenberger: So, let’s say I have a benevolent dictator. All the people who are one step under them are doing things that they require to be able to stay as a dictator because it’s pretty easy to kill somebody or to oust them or to whatever. So, if I’m at the top of a top-down power system, I have to keep everybody under me preferring me to be above them rather than overthrow me, which means that rather than do what’s best for everybody, I have to do what’s best largely for those who are right near me. They have to do that for those who are under them and that ensures a kind of power law distribution of power.

Daniel Schmachtenberger: Again, there’s a multipolar trap on corruption. If anyone is willing to do a really fucked up thing to try and overthrow me, I have to be able to play at the game of fucked up things where I get overthrown.

Daniel Schmachtenberger: So, we can see how top-down power systems are going to both attract, condition, reward, incentivize things like sociopathy. So, then we end up having a world run by sociopaths, which is not a good thing for anybody.

Daniel Schmachtenberger: Now, let’s think about something like a tribe, and I’m not going to over-romanticize here. I’m just thinking through the dynamics in a first principle’s way. If I’ve got 40, 50, 70, up to a Dunbar number of people living in a tribe, there’s an extraordinarily high degree of transparency that is forced in that scenario. Everybody pretty much sees everything that’s going on with everybody, and everybody knows everyone. Everyone has fealty relationships with everybody in the tribe.

Daniel Schmachtenberger: So, sociopathy is not going to be advantageous. You’re not going to have an evolutionary niche in that environment for much in the way of conspiring and lying because it will get found out, and it will get punished. So, the forced transparency creates an accounting system, where you don’t get an evolutionary niche for somebody fucking the other people in the system.

Daniel Schmachtenberger: So, as soon as the system starts to get large enough that, one, there’s anonymous people. So, I can harm people who I don’t really know and care about as opposed to everybody who is in the system, somebody that I know and care about. Two, I can do stuff that people won’t be able to see. I can have a corruption of the accounting and the system.

Daniel Schmachtenberger: Now, we get an evolutionary niche for rather than participating with the system doing internal defection. I’m not externally defecting and leaving the system. I’m internally defecting and playing the system. That’s what most everyone inside of a corporation or a government is optimizing what is good for them and their direct fealty relationships rather than what’s good for the whole and nobody can tell.

Daniel Schmachtenberger: This is a particularly hard scenario, but the reason I’m saying this is because we do our social science inside of a world where these systems have become ubiquitous and then we assume that those properties, where there’s ubiquitous conditioning are intrinsic to human nature, and I think we have to be very careful about that because I think a lot of them are not intrinsic to human nature. They are a result of the ubiquitous conditioning, and we could create conditioning environments in which things like sociopathy are just not advantageous and so they don’t get upregulated.

Jim Rutt: The anthropologists seem to find sociopaths at varying ratio. They find them at least half a percent ratio pretty much every place. In fact, I’ve thrown a challenge out to some anthropologists, where they’ve not been able to reject it. One of the big questions in anthropology is, how did the human society transitioned from chieftains to early states? My conjecture has been that it’s based on the arrival of a sufficiently charismatic sociopath, and that’s the story, right? They’ve pulled their beards and, “Hmm. That’s an interesting theory. Here’s even some ways to measure it.” So, I think if we’re going to design a social operating system, we’re going to have to assume some level of sociopathy, and have some defense mechanisms for saying.

Daniel Schmachtenberger: So, let’s go ahead and do the analogy and say that sociopathy within a social body is like a cancer cell inside of an animal body, which is not cancer cells inside of a human body are doing something that is good for them and good for the other cells around it and good for the whole simultaneously, and they have an evolved coordination system to be not in rivalrous dynamic with each other.

Daniel Schmachtenberger: The heart and the lungs are not rivalrous with each other. They’re not competing to extract scarce resource and hoard it. They’re in this radically necessarily symbiotic relationship.

Daniel Schmachtenberger: Now, a cancer cell realizes that it can actually consume and reproduce faster if it defects on the agreement, and that happens all the time, but that cancer cell is only able to affect the cells immediately around it, so then they’re able to either fix the cell or kill it, and limit its effective action.

Daniel Schmachtenberger: If the cancer cell could broadcast oncogenes to all cells in the body simultaneously because it had something like technology to be able to leverage what it wanted to do, we’d be fucked. So, when we think about the world today and the capacity that exponential technology gives for anyone to have a much stronger coupling to the whole system not mediated through having to have that flow through a bunch of other agents where error correction can occur, this is one of the things that’s really problematic with the world today is that even small numbers of people that become sadistic, sociopathic, whatever, can really fuck the whole system up.

Daniel Schmachtenberger: So, you actually have to have something that creates anti-fragility for this particular thing. So, we can say to have a system that doesn’t have catastrophic collapse as eminent, it has to be able to limit this.

Daniel Schmachtenberger: One way of doing it is the China strategy, which is ubiquitous surveillance and anyone does anything that looks at all concerning, and their powers removed from them. I would argue that that system will also inexorably collapse because even though it won’t collapse because of multipolar traps, it will collapse because we notice that markets are much better at innovation. Bottom-up processes are much better at innovation than top-down processes tend to be. If you control the bottom-up processes that rigorously, you won’t end up being able to innovate enough to keep up with the changing environments and you’ll fail to Red Queen dynamics. That’s my prediction for the China strategy.

Daniel Schmachtenberger: What I would say is that a tribe is actually like a family and a tribe or a village is actually a really good method for being able to do surveillance. I mean that very healthy rather than a fucked up type of surveillance. It’s not a top-down one-to-many surveillance. It’s a many-to-many, and where the goal is not prevent someone from doing bad things, but actually caring about people.

Daniel Schmachtenberger: So, rather than the sesame credit version or the instituted religious idea where everyone shames everyone out of fear of God version, this is a have a situation where no one can actually be a shudden, right? We noticed that when somebody goes and shoots a bunch of people up with an AR-15, typically, they weren’t in interaction with a lot of other humans. They were able to, because of modern society, they were able to live for a while where afterwards in interviews, their neighbors say, “We never saw him. He was real quiet. He kept to himself. He never came out.”

Daniel Schmachtenberger: As we have increasing technological capacity to agents, we can’t have agents that can evolve in their psychopathology unchecked. We also can’t have situations where they are interacting, but they can hide the result. So, we need something like both real accounting of what’s happening and everyone having to interact with other people in local ways that ensure the health of people, and if not, actually take care of them.

Daniel Schmachtenberger: So, that’s one of the first things I can talk about is that as long as the defect on the whole is more advantageous … There’s two things. One is as long as the defect on the whole is more advantageous than participate with it, it will happen. So, you have to have the kinds of accounting that keep that from occurring.

Daniel Schmachtenberger: The other thing is as long as individuals can become psychologically damaged and have that not be noticed and still have access to power, that’s also a problem. So, there’s a process by which the psychologic health of people has to be noticed, and the process by which the social system has to be more advantageous to participate with and to defect against.

Jim Rutt: Do you have some ideas on how we might structure this, it sounds like a sell network, essentially, where people are stumbled at the Dunbar number below in an intense solid way and presumably with minimal ability to migrate as we all know that the stranger in town is much riskier character than the persons that’s been around for 30 years. Talk a little bit about how that might actually be accomplished.

Daniel Schmachtenberger: I am going to go somewhere that’s going to be really bothersome. I don’t know of any model where that’s accomplishable as long as there’s private property.

Jim Rutt: Okay. We certainly have alternatives such as syndicalism, which is quasi private property, but not in the same sense we have here, and then there’s anarchy, which is another similar model. So, I don’t think we have to keep private property on the table. So, I would entertain any proposal that you think could implement this theory.

Daniel Schmachtenberger: I think if organs believe that they could live at the expense of the other ones and that a famine might come so they needed to hoard resource because they wouldn’t be able to get it from other ones, and they were actually in competition for scarce resource, we’d be fucked, right? The body would break down very, very quickly.

Daniel Schmachtenberger: So, you don’t see the coordination dynamics of cells or organs or tissues involving something like private property. You have a situation where things are stored wherever they’re stored. The calcium is stored in the bones, fat cells are stored wherever they are for the utilization by any part of the system that needs it as it’s needed. So, you don’t have a situation where any cell or organ has a delta between what’s good for it and what’s good for the whole because it depends upon the rest of the whole.

Daniel Schmachtenberger: I do believe that we have to create a similar thing in the human systems and, specifically, my ability to increase my own private property ownership, my own balance sheet increases my quality of life not only can I decouple that from you or the commons, I can anti-couple it. I can directly fuck the commons or fuck you and get ahead in that way. That becomes the basis for misaligned agency.

Daniel Schmachtenberger: I think we assume that basis for misaligned agency kind of across the board. Of course, I’m not going to present something like Marxism, but I think if you actually study something like how the resource provisioning of something like a body works, it is obviously neither socialism or Marxism or capitalism. It’s a much more complex system with different underlying axioms.

Daniel Schmachtenberger: So, let’s say that rather than you possess a good in order to have access to it, your capacity to access it is via possession, but your possession means that I no longer have access to it, and the scarcer something is, the more value we give to it, so then we also have an incentive to create artificial scarcity because abundance makes stuff not worth anything, and you also then have an incentive to possess more stuff than you need, especially when you get compounding returns on the stuff that you have.

Daniel Schmachtenberger: So, your incentive is to extract as much as possibly to drive scarcity in the system, to hoard information, to cause disinformation, all of those things associated with the private ownership type advantages. So, then anything that you own that I no longer have access to, I’m not stoked on you owning stuff, right? I actually don’t want you to own the stuff. I want to own the stuff.

Daniel Schmachtenberger: If instead you have access to something that is part of a commonwealth resource, where your access doesn’t remove my access via possession like shopping carts, the grocery store because there’s enough of them for peak time. Everybody doesn’t have to bring their own shopping cart, which would be a pain in the ass, take a lot more resources, obviously, would be more difficult.

Daniel Schmachtenberger: So, you having access doesn’t bother me at all because it doesn’t limit my access. We start to say, “How many places could this be the case?” We see that with the sharing economy, we could replace transportation comprehensively with commonwealth shared resources rather than possessed resources have just enough for peak time plus maintenance, which would be something like a 20th of the total number that are there now, have them be higher quality for everybody and, obviously, lower accidents, higher quality, much lower cost to civilization because you don’t have a bunch of grotesque duplication, and you don’t have money having to do marketing budgets, and financial services.

Daniel Schmachtenberger: It just goes to product development. You don’t have design and obsolescence. You have modular upgrade ability built right into the system. So, you can see a much higher quality of life for everyone with a much lower load on the system and you also then remove the destructive competitive dynamics in doing so.

Daniel Schmachtenberger: Now, let’s say that rather than have a central company like an Uber or whatever mediating that, which now still has a misalignment of agency, we use something like a blockchain type system to be able to make that actually a commonwealth resource where the money that would be extracted from the system doesn’t need to be extracted from the system.

Daniel Schmachtenberger: You start to see, “Oh, we could actually create things that are like commonwealth access-based dynamics, where you having access doesn’t decrease my access, but it’s actually better than that.” That would just be non-rivalrous. Rivalrous is your access mediated through possession decreases mine, so fuck you. Rivalrous is anti-coupled. Your world being in mine are actually anti-coupled. Non-rivalrous is just uncoupled, which I’ll argue is not strong enough.

Daniel Schmachtenberger: Anti-rivalrous is rigorously positively coupled, your world being in mine, go up and down together. So, in a situation where you have access to the transportation and access to other commonwealth resources, it actually increases your capacity to be creative.

Daniel Schmachtenberger: Now, you can also get to the maker’s studio and to the arts studio to make art and music, and your motive isn’t to get money by selling the art because you already have access to all the things that money would normally give you. So, getting stuff doesn’t confer advantage, and also doesn’t grant identity. Your identity is now only going to come not through what you get out of the system, but by what you create and contribute to the system.

Daniel Schmachtenberger: We don’t get the same zero-sum dynamics on contribution to a system through creativity as you do through getting stuff because it’s much harder to compare a Salvador Dali and an M.C Escher than it is dollars and dollars, right? Creativity ends up being non-fungible.

Jim Rutt: Yup, very high dimensional.

Daniel Schmachtenberger: Right. So, now, if I have a system where if you don’t get stuff, you die, and then if you don’t get stuff, you don’t breathe, and then if you don’t get stuff, you don’t self-actualize. At every level of Maslow’s hierarchy, you have to get stuff and you’re getting stuff and loves other people not having stuff. That’s the best way to condition greed, jealousy, and sociopathy in everybody, and then call it human nature.

Daniel Schmachtenberger: If I have a situation in which having access to those things is a given and it’s utterly boring, and the only way that you actually have self-actualization is through shit that you create, but as other people are more creative, the commonwealth that you live in is better, and you actually have access to stuff, then you both have a much better basis for real creativity that’s one master, not two masters, and you’re also incented to support everyone else to self-actualize because your life is directly better when they do.

Daniel Schmachtenberger: So, in a world where you have access to the transportation and the maker’s studios and the whatever, then I get to listen to better music and have access to better shit. So, this is one part of it is how we move from rivalrous through non-rivalrous to anti-rivalrous is we have to have situations where we are actually coupling our incentive and our agency rather than having it anti-coupled. So, there’s much more to say about it, but this is one example.

Jim Rutt: Now, here’s the key part, I will buy that this would be great if we could do it. In fact, Jordan Greenhall and I, and some other folks cooked up a fairly naïve political program several years ago, and we identified maximizing self-actualization as the highest goal, and we weren’t as structured as this thinking, but we had some things that were moving in this direction, which eventually became a concept called Game B, but Game B at that point at least failed because it couldn’t convince any of us, certainly a critical mass of us that there was a reasonable way to get from here to there.

Jim Rutt: The current system is pretty damn optimized for doing what it does, and how do you get people to switch from the current activities that they’re engaged in, which are relatively economically optimized to this new alternative system. That’s the hard question. I would put to you that that transition from Game A to Game B is the part that so far many of us have never seen a reasonable path.

Daniel Schmachtenberger: Yeah. So, first, I think an adequate blueprint for Game B has to become clear. So, we have to say that we have a set of architectures that meet necessary and sufficient criteria. Otherwise, we don’t know how to reverse engineer. Then, yes, there has to be an implementation path.

Daniel Schmachtenberger: First, though, I want to say that I don’t think the current system is close to economically optimized, and this is actually a very important point. Let’s say that I’m one of the richest people in the world today. I’m Bill Gates or Warren Buffett or whatever. There’s really important stuff that the world could produce that it can’t inside of capitalism that I don’t have access to. This is actually everywhere, and it’s really basic.

Daniel Schmachtenberger: The best phone that science could make involve some intellectual property owned by Apple and some owned by Google, and some owned by a few different companies, and the same strew with the best laptop and the best car, and even with billions of dollars, I can’t buy that thing. All the things that I can buy are produced by someone where not only do they have limited IP, but they also have whatever design and obsolescence and desire for proprietary stuff, so you use the rest of their ecosystem stuff, so it’s not interoperable. Have to deal with that shitty sub-optimality from the richest guy in the world.

Jim Rutt: Goddamn Apple is the perfect example, right? At one level, they have some beautiful engineering, nice integration, but on the other side, they’re fucking you, they’re fucking you, they’re fucking you all the time, right? It’s amazing.

Daniel Schmachtenberger: Fucking you, and the environment, and people, and all kinds of things, right? Then I go to things like, “Okay. Let’s take a look at,” and this might be more controversial, but I don’t think it should be, “Let’s take a look at biotech and health research.” There’s a whole bunch of shit that makes sense to research, whether there’s just no money to research it. So, we did so much work in small molecules because they were patentable, and it was really critical they were patentable because if I had to go through FDA trials, it costs a billion dollars, and I needed to make that money back. I had to be able to have the patent on the thing, so other people couldn’t undercut me just on cost of goods.

Daniel Schmachtenberger: So, we were only going to research at those patentable. The patentable stuff was only going to be synthetic stuff because we don’t want people to be able to patent intrinsic parts of humans or nature. So, that means that anything that was a part of how my body worked when I was healthy doesn’t get to be something I do research on because I won’t be able to ever make the money on that research back.

Daniel Schmachtenberger: A synthetic molecule that wasn’t part of the evolutionary environment and wasn’t part of how my body worked when it was healthy, it doesn’t even make sense that that would actually be a real cure, and that’s the only shit we’re going to research. Of course, I live in a world where war is more likely, and the environment is fucked for reasons that even from the richest person in the world I can’t control, and we’re near term catastrophic risk affects everybody including me.

Daniel Schmachtenberger: So, I think, today, even the wealthiest people, if they are willing to think about it can recognize that the world that we are discussing, if it was possible, is comprehensively better for them than the current world is.

Jim Rutt: I’m not sure. I believe that, but I try to excel that to Peter Thiel.

Daniel Schmachtenberger: Yeah. So, I won’t name names, but I have had conversations like this with many people of that class, and both in the face of the inexorability of catastrophic risk and the incapacity for this system to produce some really important stuff they would care about. A lot of people are increasingly capable of recognizing that they just don’t feel like they know how to initiate the new system either.

Jim Rutt: Oh, that’s good news, actually. Of course, I think ecoside is now becoming the forcing function. Anyone who is really thinking seriously about this stuff has to realize that we have either already overshot or about to overshot the caring capacity of the earth, and that alone ought to be a pretty strong argument to go on a different road, but as we talked about before, people are locked in to these rivalrous structures, and they’re fractal in their nature. A goodly amount of their self-definition is about where they sit in this complex multilevel pecking order. That’s a big lift to get 330 million Americans, let alone 8.5 billion people in the world to retreat from the Game A hierarchical, fractal structure, and move towards something else.

Daniel Schmachtenberger: Yeah. Everyone is stuck in a kind of multipolar trap regarding incapacity to coordinate better because let’s say I got a billionaire and they say, “Okay. Well, that makes sense, but I have no idea how to build a new system, and I have no idea how to get people to participate with a new system, and as long as other people are doing the fucked thing, then it doesn’t seem like there’s any other game for me to play.” It’s like there’s really only one game in town.

Daniel Schmachtenberger: So, we can even take, let’s take Elon Musk as an interesting example, where, okay, arguably, one of the highest agency people in the world currently, right? After he came across Bostrom’s stuff, he became very concerned about existential risk from AGI, created OpenAI to work on it, and then when you saw him on Joe Rogan a few months ago, he was saying, “I’ve spent years trying to get the world to understand this AGI issue and to create different safety protocols, and their own incentive to be their first move or advantage, whatever, as such that I can’t do anything about it, and I basically have given up on being able to protect against this risk. All we can do now is just hope that the risk isn’t terrible and try to mitigate it.”

Daniel Schmachtenberger: So, if even the most agentic, powerful people feel like they actually don’t have the capacity to do anything in the presence of multipolar trap type dynamics then it’s like, “All right. How do you do it?” This is the transition question.

Daniel Schmachtenberger: Well, one thing is the, what is the new thing you transition to has never been adequately specified? So, we have to be able to specify something that meets the solution to these generator functions. Again, that’s a longer conversation, but we could go further. We’re starting to lay some of the groundwork.

Daniel Schmachtenberger: As far as transition goes, I’ll share one example of a way to think about it. I’m not saying this as how it will happen. I’m saying this at least to provide a thought experiment.

Daniel Schmachtenberger: First, there is no such thing as sustained competitive advantage from a single innovation because if I have an innovation, whether it’s better extraction tech or economic tech or social tech or warfare tech, the moment I deploy that capacity, then everyone else will see it, reverse engineer it, and make their own innovations on it.

Daniel Schmachtenberger: So, sustained competitive advantage is an ongoing innovation competition, which is the up-ratcheting of rivalrous power, which is the dynamic order looking at here. So, there’s this question most people get stuck in, which is like, “Okay. Well, the current system seems to be self-terminating, so if we need to make a new system that out-competes the system, what source of asymmetric advantage over the current system is it going to have and is that not just part of the same power game because we’re used to thinking in terms of out-competes?”

Daniel Schmachtenberger: So, if you think historically that there were less violent cultures that invested less in military and more in quality of life, arts and sciences, and humanity and lived in more harmony with the environment in lower population, they just got slaughtered by the warring cultures, and then when the warring cultures intersected the most successful one subsumed the successful parts of the other one, and there was this basically distillation of successful warfare capacity.

Daniel Schmachtenberger: We’re like, “Okay. Well, we don’t want to try and beat Tibet in the presence of China again or any of those scenarios, so I can’t make some non-violent thing that will simply just get killed. Yet, whatever else I create if that isn’t the case seems like it’s still just competing at the game of power. So, fuck! What is the option?”

Daniel Schmachtenberger: So, there’s a question of, “What could provide increased capacity that can’t be weaponized?” That’s a very interesting question. We could say that every technology that increases capacity can be weaponized, meaning can be used by some agent to increase their capacity relative to other agents or the commons, except if we have a social technology that was anti-rivalrous, but it actually produced increased coordination capacity, you actually can’t weaponize it because it is the solvent for weaponization itself.

Daniel Schmachtenberger: It is actually the basis of how agents interact in a way that doesn’t incentivize weapons. So, for anyone to instantiate that thing, they are actually changing the nature of their agency.

Daniel Schmachtenberger: So, in the current system, again, private balance sheet, I’m in a big corporation, I’m going to do the thing that optimizes my bonus structure and my status in the company even if it fucks other people in the company and the company as a whole. That might include spreading disinformation, withholding information, et cetera.

Daniel Schmachtenberger: Well, let’s say I could create a situation where I couldn’t get ahead of the expense of the whole. So, I had both the right kind of transparency and accounting systems and access to commonwealth resources where only is the commonwealth does better do I do better, and things like that. Then we can have a situation where no one … Let’s just say if you could invent a situation in which no one had an actual incentive to spread disinformation or to hoard information, if they shared true information, maybe they’d be wrong, but they at least had the incentive for full earnestness and full transparency.

Daniel Schmachtenberger: If you had a situation where that was the incentive, you figured out how to do that, and I will say there is a way to do that, I believe there’s a way to do that, then you would get a situation where you had an information ecology that was actually intact at a larger scale that would lead to radically better capacity to coordinate and innovate better sense-making the current system has, and that system as a whole would be more effective at producing all of the metrics that matter relative to total resource per capita than any current system would be.

Daniel Schmachtenberger: I only need a small number of people, relatively small number of people who get that and want to instantiate it as a new full stack civilization to create a new strange attractor or new attractor basin, where anyone else looking at it says, “Wow! Quality of life is higher on every metric there, and they’re also able to out-innovate us on a bunch of things. They’re figuring out solutions to shit that we don’t have. Well, then why don’t we just kill them?”

Daniel Schmachtenberger: Well, because they aren’t trying to win the game of power against us. They aren’t building militaries or signaling or narrative warfare to try and beat us, and actually, they’re exporting solutions to us that we need to the rest of the world because if they have increased capacity to innovate and solve problem because they can actually coordinate better because they don’t have disinformation, information withholding, then they can look at what groups it would otherwise have enmity with them actually need develop those solutions, and create dependence with enmity relationships while simultaneously saying, “If you want to know how to do this shit as well, we’ve actually open sourced it. It’s a social technology. You’re welcome to use the social technology, but the social technology will fundamentally change your basis for agency if you employ it.”

Daniel Schmachtenberger: So, obviously, there’s a million things we would need to dig in to there, but just the thought experiment goes, fast adopters build a new ground up system where the new ground up system becomes a new attractive basin.

Daniel Schmachtenberger: That’s a way of thinking about that I don’t try and if I have to shift at the level of axioms, I can’t retrofit the current system. I have to build something, but if the thing that I build is fundamentally more attractive ground up, then I only need fast adopters to understand it and concept to have medium adopters understand it after seeing its implementation.

Jim Rutt: I really like that. In fact, when you were talking about the lack of sustainable competitive advantage for many single innovation, I was thinking there’s soft counter examples not good forever, but it’s what we call network effects, right? If we re-spin what you just said a little bit, suppose we were able to create a strong beneficial network effect to people who played by positive, generative rules, and did so in a way that was not directly threatening back to people who didn’t play by the rules, but because these people were better sense-makers and choice-makers, they actually could create things to trade back to people who weren’t on the network and, of course, as we know, the early adopter A types will come and join the network and once it’s proven to be more successful per unit of human effort at both wellbeing, but also, importantly, actual creation.

Jim Rutt: The next layer of people will come in if only to hang out with the As. Then you make that, as you said, I think this was the brilliant part, but I hadn’t thought of before, you make the ground rules such that anyone who becomes a member has essentially committed to a doctrine, which is subversive of the previous paradigm, but in a subtle way, not directly challenging it, just a value orientation and a set of rules for dealing with each other. This, again gets very much back to the original naïve spirit of Game B or one of the things we did was gave ourselves all the title of peer.

Jim Rutt: We always said that when you’re dealing with another Game B person, you have a moral obligation of considerable power to deal with them as a peer irrespective of any other different other dimensions of power differences. So, if this strong beneficial network effect system had as an example that anyone who’s a member of it is within the constraints of the system at least, a true peer, that would be very interesting.

Daniel Schmachtenberger: Yeah. So, I can only compete on a defined and narrow metric, right? So, if we’re competing over who has more money or who’s taller, who can run faster, then we can just have a straight up competition, but how do I compare Dali to Escher? It’s a fucked up thing, right? You actually can’t do that in a meaningful way, and any way that you try to say, “Well, here’s a metric or some set of metrics with which to assess that,” you’ve actually reduced the thing to something it isn’t.

Daniel Schmachtenberger: So, you could imagine that an Escher and a Dali could interact with each other in a way where they both acknowledge that each other are bringing something to the world that is actually enriching the world and beautiful that they aren’t bringing and that they’re stoked at each other doing it, and there’s no hierarchy intrinsic in that.

Daniel Schmachtenberger: I’m not saying there are never healthy hierarchies, but I’m saying, in general, rather than a competition on a very narrow metric, which is inherently information reduction, we are seeking self-actualization of rich creativity. That intrinsically can’t be holistically compared in the same way. So, that’s one big part of it.

Daniel Schmachtenberger: The other part of it is you and I had a conversation the other day, Jim, where you said something and you and I are just getting to know each other, and I instantly loved you because of it because you said, “Anyone who would abuse people with a below 90 IQ, I want to beat their head with a baseball bat,” or something like that, and that you wanted to see that those who have more intelligence are actually protective of rather than exploiting of those who couldn’t compete.

Daniel Schmachtenberger: So, then the question is what made you that way and how do we create social systems where to the extent that anyone has obviously increased capacity over anyone else, they’re actually oriented to steward everyone else rather than use that in an exploitive way. I think this is conditionable both at the level of social values, and at the level of the way values are codified in a value equation, i.e. the economics and the social system.

Jim Rutt: Wow! I think we should wrap it here. We could go on for three more hours, but I like to thank you for our amazingly interesting conversation.

Daniel Schmachtenberger: This was a delight.

Jim Rutt: Production services and audio editing by Stanton Media Lab, music by Tom Muller at