Corporate Capital’s Rising Role
Tech and State Elites paint similar future scenarios; Corporations will be the dominant force this decade
In 2021, Balaji proclaimed that we were moving to a tri-polar world, and that “We need a decentralized center”. Just 9 months later, Ian Bremmer (a famous geopolitician) predicted three scenarios in his book “The Power of Crisis”. The three scenarios predicted by each are eerily similar. Let’s assume they came to these independently.
Anytime the establishment or elites of two dramatically different circles predict the same outcomes, I pay attention. It’s a fun framework through which to view the world and decide for yourself what you think will/should happen.
In the US, I believe that Woke/Corporate Capital will be the big “winner” this decade (2020–2030). Ultimately State and Crypto are less powerful in effecting major changes and increasingly find themselves at odds with one another.
Context from both parties:
Note that these prediction sets are not apples to apples. Balaji is saying a tri-polar world is emerging meaning all three poles are happening simultaneously. Ian Bremmer is predicting that a singular outcome amongst his three will be more heavily weighted in the reality of the future.
But again, these are overlapping guardrails/frameworks through which to view the splintering world in which we live.
Why Woke/Corporate Capital Will “Win” This Decade
In this case, “win” just means it becomes the more dominant force of the three. All three forces/scenarios will exist to some extent, but we’ll be able to look backwards in 2030 and see with some clarity which force more greatly shaped our world that the others. Note I am just talking about the US.
Tech as the main driver 💻
Corporations continue to be our innovation engine 🏗
Remember that the Government (capital G) deserves credit on nuclear, internet, gps and countless other inventions … all before the year 2000. After that, corporations have largely stepped up to the plate on their own to take command of future-moving innovation.
These are highly forward-looking-statements, but in defense, SpaceX will increasingly become key to our national strategy. In energy, startups are increasingly taking the mantle on nuclear. In healthcare, Walmart, Amazon and Mark Cuban are doing more to help the average American than most other healthcare initiatives nationally. And of course, OpenAI has become the world standard overnight. The list goes on and on.
Albeit much of this corporate innovation has come with government grants, land, tax breaks etc. As Benny the Butcher says “Whats more important, the flower or the soil that grows it?”. Leave it to you to decide.
Technological advances will eclipse Gov.’s ability to fully regulate it 🐎
AI is the strongest use case here. The government has no frameworks, little jurisdiction, and weak jurisprudence to even tackle this area. Let alone the fact that it lacks “The Department of [ ]”, the personnel and the know-how. The lag between innovation and government regulation is known thing. It will only deepen as technology runs laps around regulators.
Case in point: Wall Street’s “innovations” (yes, we can call them that even though they were destructive) of CDOs in the run-up to the ’08 crisis. In another example, I have a Pharma friend that tells me Big Pharma simply hires the brightest regulators to work for them by tripling their salary. Hence the FDA is always one step behind Big Pharma. Lastly — with all the “Big Tech” hearings Congress did, what actually changed? I’ll wait.
Good or evil, that can be debated later. The facts on the ground show innovation speeding ahead with regulators left in the dust.
Government dysfunction increases 📉
Not a big surprise here. Our government is less functional than in the past, our public is more polarized than ever, oh and our last sitting president is getting arrested.
It’s not just dysfunction internally — the world is taking notice of the whipsaw nature of the US’ external presence. One day we’re in the Paris Climate Accords, the next day we’re not. One day we support the WHO, the next day we don’t. One day we’re against NATO, the next day we’re not. Clinton whipsawed Bush’s policies, Obama W.’s, and Biden Trump’s.
How can a government this unproductive and inconsistent expect to take a true leadership role? Until America settles down politically and passes through this phase, expect more of the same.
Crypto Winter Continues 💰
Gov vs Crypto heats up
Counter to my point above, occasionally the government does act in coordinated fashion. However in this case, this coordination bolsters my point that corporations will play a larger role, as two legs of the triangle find themselves increasingly at odds.
As of this writing, “Operation Chokepoint” has become public in which multiple agencies of the US Gov are filing complaints against major crypto companies/figures (for example the SEC vs. Coinbase, CFTC vs Binance). Regulated Exchanges such as those in many ways straddle the line between TradFi and DeFi, so it’s possible that DeFi is more safe from scrutiny.
Crypto has not been able to separate from fiat rails and become truly independent 🤑
Crypto still requires on and off-ramps to fiat — I’m not deep enough to understand how that might change in the near future. But my guess is that it won’t change much especially because of the increasing government action.
In addition to strong fiat ties, the volume of people using crypto is still small. For example, even the largest DeFi exchanges in the world doing a $T in exchange still have less than 5M users. Unless AI is somehow able to be the ship that allows Crypto to sail on its own, I see the Crypto Winter largely continuing this decade. That being said, if Balaji ends up even remotely right on his $1M bet, then a flight to DeFi crypto could also prove me wrong.
The Government is Losing Cultural Relevance ⚠️
The Working Class is increasingly anti-government
This tweet sums up the sentiment best:
America has hollowed out its middle class and increasingly makes life tough for the working class. Just 20% of Americans have substantive trust the Federal Government, down from 75% in 1960! The public does not view the government as a change agent or benevolent caretaker any longer.
Our Coastal/Tech Institutions are increasingly uni-polar (re: liberal), therefore they don’t “need” government as a unifying ideology
Government functions best a a unifier — its where the buck of compromise stops and public good is the ultimate currency. However, when major institutions — e.g., Tech, Media, Universities, etc. — are all largely unified anyway, government’s purpose erodes as a decision maker. These institutions are liberal now. Certainly there’s a wide range to that! But they can all easily define what they are “not”, which unites them.
Case in point is the deplatforming of Trump by Big Tech. This is the first of many such unilateral actions we will see Corporations take to protect their viewpoints. That event showed the level of underlying ideological coordination that already exists, today.
Depending on your political viewpoint you may love or hate this. But hey, it’s reality.
Ways in which I could be wrong:
- AI becomes the bridge for Crypto to escape the fiat rails. Crypto massively increases in “everyday usefulness” for more than 50M Americans.
- A crisis — like war with another country — unifies the United States populace, and Big G Government is the only one to save us. Congressional and Presidential approval ratings skyrocket. The power pendulum swings back. Bremmer aptly calls this a “Goldilocks Crisis”. Note that Covid would’ve/could’ve been this, but look what happened.
- The Right Rises in Corporate America. Corporate America escapes the fairly “woke” ideology currently consuming it; sectors like Energy, Manufacturing and Others which are more middle-of-the-country and more Right play a larger role in US’ Rising Populism and therefore the the National Conversation. Corporate America’s ideology splinters and so does its effectiveness.
As always I welcome your feedback and comments. You can find me on twitter @RSiddhanti; DMs are open.
