It is not clear to me that "decentralization" holds the same meaning throughout your essay (e.g., when comparing energy production to education), or more generally if "decentralization" is well-defined as you use it (if, say, there is one runaway market winner in the a la carte market for education, as there usually will be given the power laws that dominate modern marketing/business success, does that entail more or less centralization than the status quo?). Even so, it's a stimulating theme.
In general, it seems to me centralization & hierarchy are at an advantage when what is needed is univocity of command and faithful, speedy execution, while decentralization will tend to predominate when what is necessary is a consideration of a wide variety of data sources & speedy execution is not at a premium. Agents jointly create the conditions for their next game -- advantages are spent as resources are exploited to the hilt, say; when there's no more map to discover, the race to the fastest ship, not the most knowledgeable navigator. One can thus see why centralization and decentralization trade off over time across different endeavors -- and, in my view, they are unlikely to do so in fields that've not reached a final equilibrium.
Wow, I was not expecting such a vast study in one article. Thank you so much for taking the time to prepare. I'm very interested in decentralization myself and will be surely returning to this piece many times in the future. Subscribing.
This is brilliant. I encourage you to write with more confidence! I see doubt all over this essay, but see overwhelming evidence of these trends in all of my studies. I’m a deep expert in AI and bioinformatics. Decentralization is happening everywhere and is currently accelerating.
I’d love you to reflect back on this post in one year and even consider doing a second draft with the same or similar outline. It could be a published research paper in a respected journal with a little more time put into it.
Thank you for existing and writing. You’re inspiring in more ways than you probably realize!
Brilliant post, Packy. Education is the most important piece, which enables all the rest to fall into place. The momentum behind decentralization is strong, but I'm surprised you never mention the "public private partnerships" aka fascism behind centralization via the WEF Great Reset (eerily similar to the CCP's Great Leap Forward https://yuribezmenov.substack.com/p/how-to-repeat-history-part-2). Does anyone in VC get held accountable for losing money to frauds like Sequoia did on FTX? https://yuribezmenov.substack.com/p/how-to-lose-214-million-in-one-year
Also… If you like the topic of this we also highly recommend reading this book. It isn’t technical and it is easy to read, but it highlights the power of leaderless organizations. However it also highlights their flaws (organization, trust, and direction). It is our favorite book of all time : The Starfish and the Spider: The Power of Leaderless Organizations: here: https://open.substack.com/pub/joshketry/p/do-you-want-to-know-how-to-stop-the?r=7oa9d&utm_medium=ios&utm_campaign=post
Yes!!! We are so happy to see people like you and others cover this topic this week! Decentralization and Transparency (and technology) are what we should all be focused on for a better world. It is the main topic we discuss at The Rationalist - Society of Problem Solvers. If anyone finds this article intriguing we ask that you please join the conversation with us. The people who control the world use think tanks on K street to game up ways to gain more control. We need to be doing the same thing. Nicely done Packy!
We have written about this dozens of times but maybe start here:
A great little book came out in 2020 that shares an actual example of the crisis, collapse and reinvention cycle taking place inside company leadership. The book is called "The Seventh Power" by Kevin Hancock. In this case the crisis happens to the author, the 5th generation CEO of a family business. His journey directly mirrors the theory of change Packy highlights: separation, liminal period, reorientation. And even more specifically mirrors the Graeber and Wengrow theory of three lost freedoms enjoyed by our ancient ancestors: freedom to leave, freedom to disobey, freedom to shape new social realities.
In this example, the protagonist author literally leaves his home to immerse himself in an indigenous society to learn more about their ancestral beliefs. He shares the reinvention of himself by reinventing his company leadership to push power away from the center to the edges. Decentralization, clearly.
The results, by all KPI measurements, are startling good (financial, productivity, safety, employee happiness, etc...). This example happened not in a tech startup or crypto, etc... where we often think all change is birthed and shaped for the rest of the world to adopt. But rather in a lumber company.
From the book we learn that culture, mission and leadership's authenticity and integrity around culture and mission are critical supporters of change. No duh. But how often we forget that culture can and often trumps strategy and structure. Just look at the state of crypto today to see a case of current culture (graft and greed) crushing the vision of a future decentralized structure and culture. There was little to no actual decentralization since all leadership was centralized.
Packy's upward sloping sine wave might be right. It looks a lot like Ray Dalio's upward sloping credit cycle sine wave. Whatever happens, people are both the independent (change agents) and the dependent (followers) variables, which creates a circular feedback loop and makes predictions inherently fraught with errors.
Interesting article - especially the part about education. The book “The end of Average” traces the origins of our educational system and concludes similarly that advances in AI could lead to personalised learning, which could make education so much more exciting and attainable for everyone than it currently is. Exciting to think what could change in the next generation, especially with higher education being less and less of a consideration for many.
Good thoughts. What is also happening which is the substrate driving all of this, is "decentralization" of the self also known as the evolution of consciousness.
Fittingly, the "centralization" concept is emblematic of a society run by a select few people who were more self-centered. With greater levels of consciousness, comes a new breed of systems that in their decentralized way that places more weight on a unified system vs. a group of high power individuals. This is an expression closer to oneness or connectedness which more and more individuals are awakening too as part of a greater realization of Self. Since individuals drive the systems, we should expect the collective systems to more closely mirror overall change in consciousness that is occuring.
Here's how I see where things are going as it stands today:
Centralized global powers are trying to seize more power by means of provocation and intimidation. IMO this behavior of global powers are affecting the sidelines way more than it should and that could drive a much bigger revolution in the coming years. I hope not to see the world go through another nuclear strike.
Humanity would get an important reality check when the universe gives earth a nudge while we are here fighting with each other on the race towards who controls most resources. Some of us are trying what we can do to create the next world order, which is to help bring decentralized economy to masses. However human ego doesn't really help. We like shiny new things until the next shiny thing comes along. Crypto for example. Since the dollar is involved, it masks major innovations happening in decentralized world. Only a handful know, only a few aware and only a tiny portion of us understands the new world at their intricacies and only a very very few can work with and/or build new decentralized networks. quite unfortunate, but I hope the future generations growing with decentralized networks will be better equipped to thinking in global terms. it's hard. you need to go to the moon to think about how to solve problems humanity is facing, the centralized governments are no help either. all they do it block.
This brings me to my final thoughts, we are ever more becoming a super organism. capable of amazing things. but chaos must occur for that to happen...
Great as usual. One error that I think is quite instructive... or at least a valuable metaphor. You say of humans "On that level, we’re walking embodiments of centralization." At a biological level this becoming harder and harder to sustain as a belief. We look more and more like affiliated colonies with an illusion of central coordination. In terms of consciousness, there is more and more evidence that awareness, and there for attribution to a central self, comes after both thought and action. The role of constellations of subconscious systems seem to do most of the heavy lifting. Perhaps that this is a hint for us to examine our assumptions about much of what we currently identify as being a centralized 'cause' or actor. We like to see order and have a confirmation bias towards centralized actor hypotheses. Sure, central systems like consciousness have impact, but not in the ways we tend to assume.
We think one thing needs to be pointed out in the history of centralization and decentralization - in your example of individual farmers in the 1800s being decentralized and then moving towards highly centralized factories through the industrial revolution (top down)and now there is a movement away from that again towards decentralization - is correct, but missing something important.
The most powerful entities available to man are decentralized BUT highly aligned and organized groups. They take the best from both systems but the last power with control HAS to be the decentralized group. In other words there can be centralized aspects or even centralized organizations in society, but the more centralized they are the more dangerous they are. So the emergency parachute - especially when we talk about systems that govern OVER other people like government, school, science, money or medicine - must be controlled by the decentralized group in the end. When you think about it that is what the American Democratic Republic was attempting to do - organize a decentralized system. It’s just that the ways to corrupt it evolved faster than the ways to protect it.
Think of it like cells in your body. For 4 billion years on earth the cells were individually decentralized. Then one day they learned how to collaborate and work together.
The next evolution of human isn’t just decentralization but rather organized and highly aligned groups of decentralized nodes working together.
In your farmer example it would be like going from individual farmers, to massive conglomerate farms, to now a move towards a massive digital consortium of individual farmers that use the organization of a centralized entity but all the power spreading benefits of a decentralized one.
That’s the real power of the internet.
There are several ingredients needed to make decentralized but highly aligned groups work.
1) trust - which is best expressed with transparency or some kind of rating like eBay uses for sellers and buyers, or a blockchain ledger like what Bitcoin uses
2) a system to help decentralized groups organize (we are currently working on our next article about this topic - “Super Collaborators”). Nothing like this has ever existed before that could be used by all decentralized groups
Love this! Great takes and research. We subscribed. Please join our think tank as well if you are looking to be part of the solutions! It’s totally free.
Such a great piece. One thing about the decentralization of energy/fuel, though, is scary to think about. If the availability of oil has been the primary advantage for gaining world power, what happens when that advantage is taken away? The leaders of those countries lose their advantage and therefore their control. It’s scary to think of the extreme measures they may go to to maintain control when their advantage is taken away.
Really thought provoking essay Packy, thank you! In your next iteration, I'd love to get your thoughts on where the growth of China as an economic and (likely) military power fits into the thesis? Could the growth of Chinese centralised power could be the major long run change the people in 100 years reflect on for the 21st century?
Nice essay.
It is not clear to me that "decentralization" holds the same meaning throughout your essay (e.g., when comparing energy production to education), or more generally if "decentralization" is well-defined as you use it (if, say, there is one runaway market winner in the a la carte market for education, as there usually will be given the power laws that dominate modern marketing/business success, does that entail more or less centralization than the status quo?). Even so, it's a stimulating theme.
In general, it seems to me centralization & hierarchy are at an advantage when what is needed is univocity of command and faithful, speedy execution, while decentralization will tend to predominate when what is necessary is a consideration of a wide variety of data sources & speedy execution is not at a premium. Agents jointly create the conditions for their next game -- advantages are spent as resources are exploited to the hilt, say; when there's no more map to discover, the race to the fastest ship, not the most knowledgeable navigator. One can thus see why centralization and decentralization trade off over time across different endeavors -- and, in my view, they are unlikely to do so in fields that've not reached a final equilibrium.
Wow, I was not expecting such a vast study in one article. Thank you so much for taking the time to prepare. I'm very interested in decentralization myself and will be surely returning to this piece many times in the future. Subscribing.
This is brilliant. I encourage you to write with more confidence! I see doubt all over this essay, but see overwhelming evidence of these trends in all of my studies. I’m a deep expert in AI and bioinformatics. Decentralization is happening everywhere and is currently accelerating.
I’d love you to reflect back on this post in one year and even consider doing a second draft with the same or similar outline. It could be a published research paper in a respected journal with a little more time put into it.
Thank you for existing and writing. You’re inspiring in more ways than you probably realize!
Yeah, I dont have that attention span anymore.
Brilliant post, Packy. Education is the most important piece, which enables all the rest to fall into place. The momentum behind decentralization is strong, but I'm surprised you never mention the "public private partnerships" aka fascism behind centralization via the WEF Great Reset (eerily similar to the CCP's Great Leap Forward https://yuribezmenov.substack.com/p/how-to-repeat-history-part-2). Does anyone in VC get held accountable for losing money to frauds like Sequoia did on FTX? https://yuribezmenov.substack.com/p/how-to-lose-214-million-in-one-year
Also… If you like the topic of this we also highly recommend reading this book. It isn’t technical and it is easy to read, but it highlights the power of leaderless organizations. However it also highlights their flaws (organization, trust, and direction). It is our favorite book of all time : The Starfish and the Spider: The Power of Leaderless Organizations: here: https://open.substack.com/pub/joshketry/p/do-you-want-to-know-how-to-stop-the?r=7oa9d&utm_medium=ios&utm_campaign=post
Yes!!! We are so happy to see people like you and others cover this topic this week! Decentralization and Transparency (and technology) are what we should all be focused on for a better world. It is the main topic we discuss at The Rationalist - Society of Problem Solvers. If anyone finds this article intriguing we ask that you please join the conversation with us. The people who control the world use think tanks on K street to game up ways to gain more control. We need to be doing the same thing. Nicely done Packy!
We have written about this dozens of times but maybe start here:
https://joshketry.substack.com/?utm_medium=web
A great little book came out in 2020 that shares an actual example of the crisis, collapse and reinvention cycle taking place inside company leadership. The book is called "The Seventh Power" by Kevin Hancock. In this case the crisis happens to the author, the 5th generation CEO of a family business. His journey directly mirrors the theory of change Packy highlights: separation, liminal period, reorientation. And even more specifically mirrors the Graeber and Wengrow theory of three lost freedoms enjoyed by our ancient ancestors: freedom to leave, freedom to disobey, freedom to shape new social realities.
In this example, the protagonist author literally leaves his home to immerse himself in an indigenous society to learn more about their ancestral beliefs. He shares the reinvention of himself by reinventing his company leadership to push power away from the center to the edges. Decentralization, clearly.
The results, by all KPI measurements, are startling good (financial, productivity, safety, employee happiness, etc...). This example happened not in a tech startup or crypto, etc... where we often think all change is birthed and shaped for the rest of the world to adopt. But rather in a lumber company.
From the book we learn that culture, mission and leadership's authenticity and integrity around culture and mission are critical supporters of change. No duh. But how often we forget that culture can and often trumps strategy and structure. Just look at the state of crypto today to see a case of current culture (graft and greed) crushing the vision of a future decentralized structure and culture. There was little to no actual decentralization since all leadership was centralized.
Packy's upward sloping sine wave might be right. It looks a lot like Ray Dalio's upward sloping credit cycle sine wave. Whatever happens, people are both the independent (change agents) and the dependent (followers) variables, which creates a circular feedback loop and makes predictions inherently fraught with errors.
Interesting article - especially the part about education. The book “The end of Average” traces the origins of our educational system and concludes similarly that advances in AI could lead to personalised learning, which could make education so much more exciting and attainable for everyone than it currently is. Exciting to think what could change in the next generation, especially with higher education being less and less of a consideration for many.
Good thoughts. What is also happening which is the substrate driving all of this, is "decentralization" of the self also known as the evolution of consciousness.
Fittingly, the "centralization" concept is emblematic of a society run by a select few people who were more self-centered. With greater levels of consciousness, comes a new breed of systems that in their decentralized way that places more weight on a unified system vs. a group of high power individuals. This is an expression closer to oneness or connectedness which more and more individuals are awakening too as part of a greater realization of Self. Since individuals drive the systems, we should expect the collective systems to more closely mirror overall change in consciousness that is occuring.
Here's how I see where things are going as it stands today:
Centralized global powers are trying to seize more power by means of provocation and intimidation. IMO this behavior of global powers are affecting the sidelines way more than it should and that could drive a much bigger revolution in the coming years. I hope not to see the world go through another nuclear strike.
Humanity would get an important reality check when the universe gives earth a nudge while we are here fighting with each other on the race towards who controls most resources. Some of us are trying what we can do to create the next world order, which is to help bring decentralized economy to masses. However human ego doesn't really help. We like shiny new things until the next shiny thing comes along. Crypto for example. Since the dollar is involved, it masks major innovations happening in decentralized world. Only a handful know, only a few aware and only a tiny portion of us understands the new world at their intricacies and only a very very few can work with and/or build new decentralized networks. quite unfortunate, but I hope the future generations growing with decentralized networks will be better equipped to thinking in global terms. it's hard. you need to go to the moon to think about how to solve problems humanity is facing, the centralized governments are no help either. all they do it block.
This brings me to my final thoughts, we are ever more becoming a super organism. capable of amazing things. but chaos must occur for that to happen...
Thought-provoking as always! I’ve been wrestling with this since COVID hit. Here’s my
imaginative take (back when poking fun at Rogan was apolitical) http://radicalcentrism.org/2020/04/01/the-great-decentralization-of-2020/
Great as usual. One error that I think is quite instructive... or at least a valuable metaphor. You say of humans "On that level, we’re walking embodiments of centralization." At a biological level this becoming harder and harder to sustain as a belief. We look more and more like affiliated colonies with an illusion of central coordination. In terms of consciousness, there is more and more evidence that awareness, and there for attribution to a central self, comes after both thought and action. The role of constellations of subconscious systems seem to do most of the heavy lifting. Perhaps that this is a hint for us to examine our assumptions about much of what we currently identify as being a centralized 'cause' or actor. We like to see order and have a confirmation bias towards centralized actor hypotheses. Sure, central systems like consciousness have impact, but not in the ways we tend to assume.
We think one thing needs to be pointed out in the history of centralization and decentralization - in your example of individual farmers in the 1800s being decentralized and then moving towards highly centralized factories through the industrial revolution (top down)and now there is a movement away from that again towards decentralization - is correct, but missing something important.
The most powerful entities available to man are decentralized BUT highly aligned and organized groups. They take the best from both systems but the last power with control HAS to be the decentralized group. In other words there can be centralized aspects or even centralized organizations in society, but the more centralized they are the more dangerous they are. So the emergency parachute - especially when we talk about systems that govern OVER other people like government, school, science, money or medicine - must be controlled by the decentralized group in the end. When you think about it that is what the American Democratic Republic was attempting to do - organize a decentralized system. It’s just that the ways to corrupt it evolved faster than the ways to protect it.
Think of it like cells in your body. For 4 billion years on earth the cells were individually decentralized. Then one day they learned how to collaborate and work together.
The next evolution of human isn’t just decentralization but rather organized and highly aligned groups of decentralized nodes working together.
In your farmer example it would be like going from individual farmers, to massive conglomerate farms, to now a move towards a massive digital consortium of individual farmers that use the organization of a centralized entity but all the power spreading benefits of a decentralized one.
That’s the real power of the internet.
There are several ingredients needed to make decentralized but highly aligned groups work.
1) trust - which is best expressed with transparency or some kind of rating like eBay uses for sellers and buyers, or a blockchain ledger like what Bitcoin uses
2) a system to help decentralized groups organize (we are currently working on our next article about this topic - “Super Collaborators”). Nothing like this has ever existed before that could be used by all decentralized groups
Love this! Great takes and research. We subscribed. Please join our think tank as well if you are looking to be part of the solutions! It’s totally free.
Such a great piece. One thing about the decentralization of energy/fuel, though, is scary to think about. If the availability of oil has been the primary advantage for gaining world power, what happens when that advantage is taken away? The leaders of those countries lose their advantage and therefore their control. It’s scary to think of the extreme measures they may go to to maintain control when their advantage is taken away.
Really thought provoking essay Packy, thank you! In your next iteration, I'd love to get your thoughts on where the growth of China as an economic and (likely) military power fits into the thesis? Could the growth of Chinese centralised power could be the major long run change the people in 100 years reflect on for the 21st century?