The Heirs Guard Against History
We need more founders, legacy institutions know its an existential threat to their relevance
A response to the Founders vs. Inheritors debate.
Everything great on this planet was built by those with founding DNA. Nations, religions, philosophies, companies, and inventions all come from those with a spirit to create. These new creations tend to be best run by those who are less revolutionary. Jordan Peterson explains the topic well but simply. To borrow his terms, liberals create companies and conservatives run them. In a free market and thriving economic ecosystem, this is all well and good. Unfortunately, this equilibrium has proven to be historically unsustainable.
The heirs of fortune inevitably seek to safeguard their own wealth, even at the expense of a society’s well being. Ask the Roman Empire and Han Dynasty about what happens when legitimacy trumps competence. Economic innovation is inherently disruptive. Throughout history, human innovation has been stymied by elites seeking to preserve the status quo. Queen Elizabeth rejected patents on the grounds that they would displace too many jobs by making old processes too efficient. So far, we have yet to find a way to break the cycle of the incompetent descendants of great people becoming the greedy rulers of society. Democracy and wealth in the middle class has made this takeover more difficult but it still happens eventually.
When a society becomes unfair, two options arise. The first is to migrate. This is how the United States came to be and later how the West Coast became a hub of innovation. Those with innovative minds leave places without opportunity for areas with greater economic and social freedoms. In today’s world, this option is becoming increasingly difficult as the world has been divided into nation states. Its not impossible but it is hard if you do not already have capital. The other option is calamity.
The best tell of a society on the brink of collapse is the Gini coefficient. Simply put, it shows how much wealth inequality there is. Most of the great disasters in history were preceded by an extremely high coefficient. Some of these include the Black Death, the fall of the Yuan Dynasty, the fall of Rome, and the French Revolution. Extreme inequality is unsustainable in the long term and eventually the leaders of inherited institutions are forced to relinquish control in some way. Many times, society starts off at a lower point than it was before but the playing field has been leveled for founders to reassert themselves.
You might be asking why I have spent so much time ranting about the rise and fall of civilizations when the question is about how to best reform our institutions in a digital age. The answer is that this problem is not as new or novel as we imagine it to be. What is groundbreaking are the tools that modern society has given us to fight back. We don’t need a Black Death to reinvigorate society, we only need the decentralization that blockchain brings us.
Currently, we live in an era where there is a mad dash to cash in on being an elite in society. College debt is soaring in the US as many believe its their only way to cement themselves as middle class. We all begin to play a game without taking a minute to ponder who set the rules. Collectively, we have forgotten to question the true underlying assumptions of the institutions that surround us. The founders built great institutions, but the heirs created a strangling framework for the rest of us. Without taking a step back, we doom ourselves to the follies of our forefathers. Eventually wealth inequality will outpace the relative wealth of the population and we will get another French Revolution or worse. This is the path the heirs always choose, a path that rewards them in the present and dooms them in the future. The tools are now available to diverge from this path.
At the risk of repeating myself, I need to say the legacy institutions maintain their importance and power by confining us within their system. Going to their subsidized colleges and reading their advertised newspapers gives them power. It is past time to flip the table on the assumptions we live by. The Network State is the perfect solution to what feels like a damning problem.
If the Network State can become a reality, it can transcend national strangleholds. Blockchain can privatize economic gains and merits will be rewarded, not last names. In a world where skills could be recognized more easily (and quantified where appropriate), connections become less important. As someone who has tried to work in DC and felt enormous frustration at having my opportunities limited purely because I didn’t have as many connections, I feel a true connection to blockchain becoming an equalizer. I saw too many incompetent people get put on a path to prominence purely because the current stakeholders knew they would protect the system that elevated them.
Pseudo-anonymity is a real solution to this problem. Online personas give us a chance to still build a reputation and escape the status we are born into. Every society ultimately creates their own caste system. It is the penultimate realization of legacy institutions cementing their power. They fully wall themselves off from the shells of innovative founders by excluding them from the system. Some societies are worse than others but the reality is inevitable. A well run Network State can permanently destroy the walls of Jericho that the heirs shield themselves with. In this configuration, we all start at the same level. Our realities on the ground may effect our abilities but our connections will be a moot point. Being judged by the reputation of our accomplishments is a massive step in the right direction over being judged by the status assigned to us at birth.
The reality is that there are not many places left in the world to have the boom we have seen in centuries past. Some places like India will see a rise but will still fall into the never-ending secular cycle Peter Turchin writes about. The ability for blockchain to create a world where our talent is what supersedes our name is truly revolutionary. It has the potential to change the course of human history and save much of the world from decay. Not only would reversing these cycles help us financially, it could also work to prevent future wars and unrest. If equity can be found through true meritocracy then the heirs will have little choice but to allow us back our freedoms. The Network State’s international existence provides it security and stability. The future is transnational and transcendent.