Decentralize to Exit

Exit > Voice; Decentralization > Coalescing; and why Miami is the future

Voice, Exit or: How I stopped worrying and learned to ignore elections.

The Wikipedia article for Will Smith’s 1997 track “Miami”, the classic hit song about the city which people play too often (when I visited last, I materially lowered my Uber rating by playing it non-stop. Some people just can’t handle the Big Willie Style.) has a suspiciously brief, very matter-of-fact summary of the music video:

In the music video for the song, Smith and members of his band are freezing in Philadelphia, where it is 30 degrees below zero causing a bandmate to curse Jack Frost. They hop on a plane to Miami, and are shown going around Miami in their car and various scenes morph into one another. The video ends with Will Smith and his band performing a concert. The video features samples from Gloria Estefan's hits "Conga" and "You'll Be Mine (Party Time)".

Indeed. The beginning of the video beautifully illustrates a concept: Exit > Voice. When you live in a system, be that system something as grand as a country or mundane as a Starbucks, in general, you get two ways to negotiate outcomes for yourself. You can try to assert your Voice or you can Exit. This conceptual framework (along with a third, some would say superfluous/mirror image of Exit, an option called Loyalty) was developed by Albert Hirschman, a fascinating man. It’s a good book.

Asserting your Voice is shouting “There ought to be a LAW!”. Ineffectual as this may sound, frequently, people who coalesce into organizations and shout more loudly than anyone else do in fact assert their interests. In a way, Democracy is an OK system because you’re just ‘counting up the rifles’. Rather than actually materially contest the system with Violence, you make it clear that You & Whose Army either really do or really don’t like something, so, be a pal and change the policy. Please, and Thank-you.

With Voice, it helps to coalesce. If you try to order breakfast past the burger joint’s service hours, they’ll refuse. There is always the option of Violence, where you try to to assert Voice by force, but things didn’t end very well for Michael Douglas, did they? He was just one guy. Cops are many. People throw their lives away in the US every day for things not nearly so tasty as a Whammy Burger, things like ‘turf’ or ‘respect’. It’s a bad trade. And it turns out if you coalesce you don’t need violence at all.

Through the combined power of market research with the core competency of greasy griddles and acceptable service, with sufficient clamoring voices from customers, McDonald’s corporate governance will allow a vote of operators and owners, and you’ll get All-Day Breakfast. With sufficiently many screams for something, if people incumbent in power (or people who wish to be) can figure out a way to at least profit, if not meaningfully secure (or attain themselves) power against contestors of that power (or take it from incumbents) you’ll get hashbrowns at 11:33 am. Truly, a sacred ritual.

We see this ritual of Voice play out in America frequently. Every two, six, and especially four years, we see it play out rather tremendously expensively and loudly.
It’s playing out in Georgia tonight, to be as solemnly contested as the last go-around.

But have we gotten our Egg McMuffins? It really doesn’t matter what your politics is.
Almost no one in America, rooting around in the paper bag, can find their McMuffin.

Isn’t this something? And very much depending on your politics, trying to coalesce to have a Voice can be met with great displeasure of our System. And every System. No political system has a universally tolerant ear for all possible Voices. You can’t make everyone happy, least of all those who more or less want to boot you from their system.

So what do you do? You go somewhere breakfast is all-day is what you do. But what if nowhere serves breakfast at 4 PM on a Saturday? Well, you have a kitchen, don’t you?
And if you don’t have a kitchen? Maybe a friend has one. You can have late breakfast.

For consumer choices, it’s simple. Every product, from a phone to a latte to streaming media is desperate to compete for your money and attention. Only those of us with refined tastes ever suffer, bored with pedestrian delights of the overly comfortable world, all yearning to please us at every Instagrammable moment in their consumer funnel. Outside of serious coalescing for Voice in the market, you do get myriad Exits.

For a State…this is quite a lot harder. The New York City population (pre-COVID-19) numbers eight point four million souls, give or take. As anyone who has lived in the city for the last century can tell you, trying to coalesce with other people to shout a bit louder than the din of New York City politics is a pretty useless endeavor. Especially if your opponent is Michael Bloomberg. More so if it is the current mayor, Bill De Blasio.

Mass remote work births Government as a Service (GaaS).

That is, until Corona-Chan changed the world, catalyzing pathways that would have taken decades more to for us to transit down them. The reactants were all there, make no mistake. But the terrible system (call it Republikkkan Capitalism or Demonratic Socialism, depending on your personal favorite sports team) was inert.

The energy needed to make use of every technology we had on the reactant side (chiefly, as Altucher notes, bandwith) was just not there until the pandemic forced it. Of course, people will go back to offices, maybe even most will return. But the system shows elastic hysteresis. Like a spring stretched just a bit too far, it won’t spring back.

Executive teams and fresh managers dealing with junior ICs, talent teams onboarding and offboarding, in fields and functional domains that were almost never remote have been so for almost a year now. People notice no commute. They notice family time.

We had lived in a global economy where anything that could be, was decentralized; the neoliberal’s favorite example, noting far-flung countries sourcing the ingredients in a ‘American’ breakfast are from, is not wrong. Bananas don’t grow in Maine. There’s almost no milk production in Hawaii. You can have them with cereal in both places.

We decentralized, disaggregated, spread out, trans-Continental railroaded and around-the-world-in-3-days-guaranteed-shipped everything we could, including humans. But not all humans. Astonishingly, with modern internet speeds, we insisted on people who do work on a computer, updating information stored digitally, being in offices.

The laws, data, customers, etc. they dealt with could all be global, but they weren’t.

No longer. But there’s something else that you change when you move from one city to another; besides scenery, besides COVID-19 distancing policies, besides the cost of a nice studio apartment with an elevator—tax liability. These laws, and the laws around establishing domicile, were written decades ago. They are from a world where white collars would never become nomadic, at least not at scale. They are from Yesterday.

You know what else is from Yesterday? Governments relying on you having no Exit.

There’s lots of great coverage of this moment. The best is Antonio García Martínez’s interview of Mayor Suarez. It is just over a month from Suarez’s tweet, with massive capital investments in CRE, huge VC firms and big investors, and a litany of engineers, designers, and crypto enthusiasts moving to or planning to at least explore Miami. And yet, no other Mayors or Governors are biting. This won’t last. When the pandemic hit, many smaller countries, including ones as balmy or balmier than Miami, began offering ‘remote visas’. This author is entitled to a one-year residency in Bermuda, per emailed certificate having paid a rather specific sum of $263.00 and not being a felon.

What Suarez has recognized, and what NYC’s budget is starting to realize, is that cities are just like the Starbucks. They’re just like the television show. They’re a product.

More specifically, they are a subscription service. The subscription is your rent + municipal taxes, the recurring revenue which governments rely on to provide wages. Rent depends on the service, too; new real estate developments need government. Divorced from requirements to physically be anywhere in particular, remote workers won’t actually all buy acreages, satellite internet and hunker down like frontiersmen.

While work can happen anywhere, life happens in person. The pandemic will end, youth especially won’t. Absent communicable diseases (this one at least), they’ll want to commune. They’ll want to congregate. People like bars, restaurants, and other people.

It is basically impossible for most subsets of eligible voters of New York to be happy. The government, incumbent providers of GaaS in the City and State, are somewhere between apathetic and loathesome. What’s cheaper? Campaigning to win a Mayoral election and assert Voice? Or moving to Miami? Compare NYS and FL income taxes.

Pre-pandemic, everyone knew government in America was bad; local, State, Federal. What we didn’t know was the USA is not a functional polity, while Vietnam, Slovenia, and even Liberia are, or at least learned from run-ins with prior pandemics. The USA’s response in controlling the pandemic, or responding to its outbreak has been quite disappointing. The USA’s inability to provide financial relief, despite being the most wealthy country on Earth with private commercial infrastructure ready for fulfilling basic needs, is nothing short of criminal. The currency is inflated anyway, and it takes until Georgia’ special Senate elections to let government know we want $2000.

BitCoin bears BTFO by bubble blustering being baloney.

The argument is over; in non-crank financials like Bloomberg, you can read about J.P. Morgan analysts predicting a BTC price of $146,000. The HODL crowd was right, and even if a market correction from the top 10% of bitcoin owners ‘cashing out’ happens tomorrow, the fundamentals will remain the same. Government money is not where institutional investors want to put all their wealth, and neither are bonds, gold, land, etc. They are buying bitcoin. They can’t stop buying bitcoin. You could say the ‘top’ is here because your dumb highschool acquaintance on Facebook who fell for an MLM herb supplement scam is now buying bitcoin. But MassMutual is also buying bitcoin.

Does money supply divided by the number of bitcoin determine the value of bitcoin? Probably not. But the world looks different when you flip the map upside down:

The decentralization of finance, payments, value, and currency means the rules of commerce will not be set by a small privileged few, a coterie of elites who deign to determine how the rest of us transact, earn, save and enjoy life. Is that too conspiratorial sounding? Here is a small public service called the BBC with an article wondering why people sometimes suspect malfeasance by banks and governments, and here is a piece from an obscure think tank called the Council on Foreign Relations explaining a forgettable matter usually referred to as “The Libor Scandal”.

Bitcoin, ETH; crypto and DeFi technologies in general, especially Smart Contracts, will provide a globally mobile workforce, which can pick where they will pay taxes (at least within their country) because they pick where to park their bodies to live life, a way to Exit from poor monetary and litigation execution within GaaS. Today, if you form a startup, you form a Delaware C-Corp. Why? The simple answer is because every investor, from a sophisticated VC to an accidental Angel wants to have some kind of protection from misalignment and every corporate lawyer knows the caselaw.

Governments are the entity you go to when there’s a disagreement to settle on everything from supply chain warehousing SLAs to share dilution to mortgage liens to IP ownership and usage. For now. The very technology of encryption and global audit underlying crypto’s decentralization will also make it more trustworthy than the American legal system. Or the Chinese legal system, or any other legal system. Incumbents can hire better, more expensive lawyers. They can’t break SHA-256.

So don’t be pessimistic. If you’re far to the right on the political spectrum and a nationalist, you may look at the world and see only your people’s doom. But the enemy of your enemy is blowing up his fake polities and usurious banks which harmed them. If you’re far to the left on the political spectrum, you may despair at new borders which arose and seem to be staying. But the future is international, even post- the nation-States which mismanaged the crisis In 2021, rejoice! We’ve seen nothing yet.