The internet changes all this. It is the ultimate variance-amplifying institution. It inverts many of the core features of the VDIs that preceded it. Above all, it is permissionless and uncapped. On the internet anyone can do anything and, in theory, can reach any scale. Unlike the hierarchical institutions we have become used to, the internet does not select for the least disruptive or the most conforming, but for the most meme-able, share-able and bandwagon-able. And the internet has spawned a legion of offspring VAIs: Reddit, Robinhood, Twitter, and many more.
This changes the elites we get and how they behave. As I’ve argued before
, startups - archetypal VAIs - are an increasingly attractive path for the most ambitious, precisely because they allow for extreme outcomes on impatient timelines. This creates a subset of elites who owe little to conformity and norm adherence. In general, the winners of internet-scale contests look and behave nothing like the winners of hierarchical contests - compare Elon Musk to Pierpont Morgan
; Donald Trump to… any pre-Trump presidential candidate. This, in turn, accelerates the feedback loop.
More importantly, VAIs allow everyone
to a shot at greatness - or, at least, a day in the Twitter trends. Just because you can’t climb an institutional hierarchy doesn’t mean you can’t “meme a president into existence
” or bankrupt Wall Street. Of course, it is truly an uncapped
game, in both directions, which means that in a VAI some days you’re u/DeepFuckingValue
and some days, tragically, you’re Alex Kearns
. It may be that r/wallstreetbets contains more college graduates than “deplorables”, but in a world of intra-elite competition
and predatory precarity
, even the upper middle class has the incentive to roll the dice.
The variance genie can’t easily be put back in the bottle, at least not without severe repression. There is no “pre-2016” world to return to. A free internet entails a world more variance and more tail risk. We must learn to live with it. We learned to live with the printing press too - an undoubted boon for the world (though not before it had helped wreak destruction
across a continent). The solution must be countervailing institutions - new VDIs that can stabilise outcomes without a kill switch
. We need the Peace of Westphalia
of the internet age. Let’s hope it doesn’t take us quite so long.