Daily Balajisms – Political arbitrage

Comfort the afflicted and afflict the comfortable. Buy low, hold, sell high, and repeat. e/acc vs EA.

The old adage of journalism “comfort the afflicted and afflict the comfortable” is what Balaji Srinivasan call a political arbitrage or a market for revolutionaries. It is like a financial arbitrage in a sense – you are buying low and selling high.

With political arbitrage you are investing in political upcomers and new constituencies, with the goal to maximize political capital. With financial arbitrage you are investing in startups to maximize financial returns.  

Take the old Left that was all about the working-class man as its primary subject – a hero worker like the miner Alexei Stachanov. After the Hard Hat Riots in 1970, when workers attacked the hippies during a peace protest, the working man gradually went out of favor among the progressives.

He turned from the brave Stachanov into a lazy and bigoted Archie Bunker, explains Balaji. From a hero, into a red-trucker-hat wearing villain he is today.

The new Left found a new political arbitrage and its primary subjects gradually became women, minorities and the environment. Progressives, the de facto aristocratic class that can be found at Ivy League universities, gradually swapped the old economic Left for the new cultural Left.

They also went from hero worship to victim worship, and swapped the heroic and Nietzschean subject for the oppressed Rousseauan subject of wokeism.

History is running in reverse, but with the opposite outcomes, says Balaji. The US was a center-right country in terms of economics during the Reagan era, while the USSR was the furthest to the Left country economically. Today the axis is cultural, and the US is the furthest Left country in the world, culturally, while China is the furthest right country culturally. It is ethno-masochism in the US versus ethno-nationalism in China. With the EU being center-left, and India and Israel center-right.

Balaji connects the Overton window to the V-shaped orderbook chart, available for example at crypto exchanges like Kraken. Where one can see dynamically changing buy and sell orders. A crypto whale can move a market, because it eats quickly through the orderbook. What I call an Overton whale can shift the market of ideas – someone like Balaji himself with his BitSignal tweets sounding the alarm that we are in a fiat crisis.     

These two concepts, a political arbitrage being like a financial arbitrage and Overton window being like a an orderbook chart can help us to connect the startup ecosystem with the political ecosystem. In the first we have tech startups and focus on technological innovation, and with the second we have activists, NGOs and political parties and we focus on moral innovation.

A political entrepreneur looks for a latent form of political energy in a certain overlooked demographic, and wants to trade it against another constituency that has too much political power, compared to their status, skills, and media distribution.

Effective altruists became prominent at the expense of the traditional philanthropy, because they were fresh young people, often “on a spectrum”, saying “math matters” and “economics matter” - not just philosophy and good intentions.

They were backed by prominent tech people and rose to power at various legacy institutions, like Oxford, and even startups. Like the two infamous examples of FTX or OpenAI, where they caused havoc, and revealed that they have too much positive media coverage relative to their skills and leadership abilities.

Balaji explains how a centralized AI is inherently unethical, and why we need a polytheistic AI. A centralized AI cannot include all the perspectives of 8 billion people; hence we need a decentralized AI.

The AI-alignment has turned into EA-alignment, pushing the very WASP-y values of effective altruists onto the whole planet through big tech and global harmonization of Western regulators.

Effective accelerationism and technological progressivism of the grey tribe has the latent political energy to be the next movement worthy of political investment, while the EAs are ready for some shorting, as they got wokeified.

People are feeling the brunt of the perma-crisis and the poly-crisis created by Blue America – from over-regulation, high costs of energy to insecurity in blue cities, illegal immigration, and online censorship.

Time is ripe for the tech tribe to create parallel services, parallel institutions, and parallel societies. Greys are the counter-elites and the parallel establishment in making.

We had enough of the great stagnation and doomerism, let’s accelerate.