The second thing, second adverse outcome, we became addicted to innovation as consumers.

So we spend a lot of money, unnecessarily. There is planned obsolescence, and planned obsolescence conditions us, is operant conditioning.

We salivate, when we see a new product, we salivate.

And we are ill-equipped, because we are not scientists, we are not technology experts, we are ill-equipped to judge whether the innovation is real, and so it’s a good value to buy the new version, or whether it’s nonsense, or tweaking, or public relations, or lying, simply lying.

We’re ill-equipped as consumers. There’s an asymmetry, a symmetry of power in business also.

So we buy, they innovate compulsively, we buy compulsively.

And then there are business models that became even more complicated, right?

Because if we are not talking about products and hardware, we’re just talking about software, and a number of subscriptions, and social media with advertising business models.

We’ve created, to your point before, these are also metaverses. We don’t need to be immersed in a complete virtual reality, to be in metaverse. We’re already detached from reality, and living in a digital world.

I mean, if you need to, how did we get here? Would it be possible in the 80s, let’s say, to see the signs of what we ended up becoming in 2022?

Oh yeah, the roots were earlier than the 80s.

The roots, I think, are started in the late 50s.

But the problem is this. People had discovered to the ultimate show, that you can make a lot of money, more money, actually, by manipulating symbols, than by manipulating anything else.

Land, inputs, industrial manufacturing, it is all dwarfed by the manipulation of symbols.

When I say symbols, I don’t mean just finance. The publishing industry, symbols, media industry, Netflix is symbols.

It’s manipulation of symbols. It’s all digitized now, so definitely symbols.

So people discovered there’s a lot more money in manipulating symbols.

Now, what’s wrong with that?

You have a philosopher like David Chalmers, and he says, simulation is also a reality.

What’s the problem?

I’ll tell you what the problem is, you and David Chalmers.

The problem is psychology.

Chalmers is a great philosopher, but not such a great psychologist.

The problem is psychology.

The minute you disengage from reality to any extent, disengage from reality to any extent, and immerse yourself willingly, voluntarily, in virtual space, could be digital, could be anything else.

There are two processes that start immediately.

One is known as apophenia or pareidolia. It’s finding patterns and regularities and rules and laws where there are none.

In other words, confronting random sets of data and discerning these random sets of random data, discerning patterns and rules and regularities, which are utterly wrong, fake, not true.

People do that.

You look at a cloud, you see a horse. That’s apophenia. You look at a series of numbers and you find the regularity, although these numbers were randomly generated by a computer. That’s apophenia.

That happens.

Number one. Number two, if you divorce people from reality and allow them to operate in a simulation or virtual reality or metaverse or extended reality, whatever you want to call it, allow them to operate in extended reality, augmented, mixed, what happens is there are no effective feedback loops.

Reality, what is reality?

An excellent definition of reality is a feedback loop. It’s a feedback. You walk, you walk, you walk, you bank into a wall. That’s feedback.

If you’re not totally insane, you stop.

Reality provided you with an incontrovertible feedback.

When you deal with symbols exclusively, digital symbols, even if they appear to be reality, like Second Life, the game, even if it’s a multiplayer game and it appears to be very real, even if you mind Bitcoin and it appears to be very real, the problem is sets of symbols never ever provide you with feedback.

What seems to be feedback is not feedback. It’s the integral evolution of the algorithm or the symbols. It’s not real feedback.

So people go haywire. They get totally disoriented and they do utterly crazy things, which leads to financial crisis, for example.

So it’s not true that humans react identically to a simulation into reality. It’s utterly untrue.

I don’t know where to begin. That’s 100% untrue.

And so the more we move into virtual realities and many startups are actually virtual environments by now, the more we move there, the more crazy making is going to happen because we see patterns where there are none.

So we make bad investment decisions.

And that’s, of course, technical analysis in stocks. People analyze bonds and stocks.

Technical analysis, technical analysis is a scam, one of the greatest scams ever, because it’s based on paleidolia and apophenia.

So that’s an example, a very old example.

You asked me when it started. Technical analysis is at the very least 90 years old. So we have that example.

And then you have virtual economies, for example, in Second Life and Future Metaverse. You have virtual economies and people buy and sell things online and they invest real money and convert it into linden dollars or whatever. And then they trade with this and then they have a feeling that they’re creating value.

They are deranged, clinically deranged, I’m sorry to say. It’s a form of insanity.

How do we define psychosis?

We define psychosis when you misidentify internal objects as external objects. You have a voice in your head. You think it’s coming from the corner of the room. That is psychosis.

So if you trade linden dollars and you have a strong feeling that you had created value, I’m sorry, but that’s psychotic disorder.

Okay.

How do we get people back to the farms and doing agriculture and connecting with Earth again?

Less than 2% of the population of the United States is engaged in agriculture. And not secondary, derivative agriculture, but like raising crops or cattle, cattle or whatever. Less than 2%.

And yet they produce enough food for the United States and a few hundred million people.

Same in Ukraine, although the number there is much higher, it’s still about 15%.

And Ukraine produces food, used to produce food, for 400 million people.

So what we need is not going back to the farm. What we need is to extricate, to eradicate, to remove symbols from production, to decouple, to have a process of decoupling. It’s legitimate to deal with symbols as long as you know that you’re dealing with symbols and that your actions are not going to have real life consequences. And it’s legitimate to deal with production as long as you know that your products and services could never be translated to symbols.

Now you say, how can you do that? Money is a symbol. And so we end up always dealing with a symbol of some kind.

Yes, that’s true. But I’m talking about decision-making processes. Those who deal with symbols should not have a say in production processes. And those who deal with production should not have any involvement in the symbol processing part.

There should be a middle layer, which is now missing. This layer does not exist. There should be a middle layer, mediators between the two. And those people should have no interest in either production or simple manipulation, so that we can rest ashore, that everything remains in its place.

So again, if I’m an investor and I have surplus money, one day I hope, I have surplus money, and I want to invest it in a new starter who is producing a gizmo for, I don’t know, what?

That’s OK. That’s the way to go. That’s legitimate. Of course we need this.

But then what I do, I place it in a blind pool, and I walk away, and I trust the middle stratum, the mediators, to do the job of due diligence, valuation, etc. They come back with recommendations.

I can decide to withdraw my money from the pool. I can decide to leave it in the pool, whatever.

So we do have inklings of that. We have like mutual funds, we have hedge funds, we have, we began to go this way, and then somehow we didn’t get there.

I think because the whole system collapsed under its own delusional weight.

But we started to go there.

There are some angel networks that already functioned a bit like that.

And yeah, I think so.

The IC signals, and if we look at the trends at the moment, there is definitely we’re heading that direction.

But I think, to your point, there’s a lot of work to be done.

By the way, it’s two ways.

Like you have producers who interfere with symbol manipulation.

It’s not only one way. Microsoft is a producer. And Microsoft is a producer, I’m sorry, in town.

And yet they do interfere in symbol manipulation. The financial side is a producer.

They financially, for example.

So we need to decouple. Otherwise, we will end up with crash of the crash of the crash of the crash. It will be an endless cycle.

Now, capitalism is prone to clashes. That’s been known since the 18th century. Capitalism technically is about six or seven hundred years old. So it’s been prone to clashes because of over-evaluations, acid bubbles, I mean, you name it. It’s been prone to clashes.

But if we go into the roots of crashes, we discover in each and every single one case a mix, a confusion, a confusion, a conflation of something real and something symbolic. Tulip mania. Tulip mania. There were really tulips there.

But the manipulation was manipulation of symbols, expectations. Manipulation of expectations regarding the future value of tulips. There was an underlying real core, the tulips, but it got out of hand because people saw patterns. And then they started to manipulate symbols, expectations, money. There was a stock exchange for tulips.

So, for example, if you take tulip mania, there has been a strict separation between tulip production and sale and distribution and marketing and so on, on the one hand, and the ability to invest in tulips so that the investor side would have been totally isolated from the real side. I think this crash would never have happened.

It’s because people were trading symbols with each other.

They were allowed to do this crash.

And then just as a final question here, you touched earlier the topic of minorities, right? And if we think about how to bring balance into Southern Hemisphere technology, for example, you know, African tech ideas coming from India, how do we get, you know, Northern Hemisphere venture capitalists or, you know, institutional money out there to see the opportunities that exist in the end, particularly looking into technology that addresses supply chain transformation, there’s no way we can actually transform supply chains if we don’t bring the tech from Southern Hemisphere to a different level.

Do you have any recommendations there?

Ironically, the North-South divine is a perfect reification of everything I’m advocating.

Is what happens? There’s a divorce between innovation and simple manipulation and manufacturing. China stole intellectual property on a massive scale. So China became a manufacturing hub.

Initially, not now, now they’re innovating, but initially, but they became a manufacturer.

So there was a manufacturing hub, which was so far away in geographical terms and so remote, it was not under the influence of simple manipulators. And it became a major success story.

It’s a perfect example of what I’m saying.

Perfect. It’s an advocacy of what I’m saying.

When you divorce the production from the simple manipulation, you get gigantic success stories, like China. India, on the other hand, started this way, but then emulated the Western model because they were more exposed to the United Kingdom and so on. So India started the right way and overtook China at the beginning. India became a manufacturing hub, par excellence, no symbols, no finance, no nothing, just manufacturing.

But then they tried to emulate the West. And so now India is a mixture of simple manipulation and manufacturing, and it fell way behind China, way behind China. China started with financial experimentation, the Yuan, now the digital Yuan, aiming for convertibility of Yuan, reserve currency. China started to manipulate symbols.

Immediately, its economy started to contract. The growth rate of its economy is much lower now. And I see a direct connection between its emulation of the Western model and the slowdown in growth.

So the minute we divorce these two functions, there’s growth in both. There’s growth in both. When we combine them, coming back to your initial question, for example, in startups, there are enormous failure rates.

Startups is a laboratory. It’s a laboratory of the capitalist dream. We are doing something wrong. The failure rate is enormous. And yet, the failure rate has been the same since at least the 80s.

And everyone says it’s normal. It’s totally normal. No, it’s not normal.

If you look at innovation in the 18th and 19th century, the success rate was well over 70 percent, 70 percent. The hard gores weaving, the steamship, the locomotive, they were all invented in the 19th telegraph. I mean, you name it. Up until the beginning of the 20th century, most innovations were very successful. Extremely few innovations failed.

Why? Why are we trapped in a reverse cycle?

Okay, we think about that question. And there’s not a right answer for that, right? It’s very complex, but it’s been really wonderful to have this conversation with you. I’ve learned a lot today. And thank you. Thank you very much. Thank you for having me.

I’m going to end the recording now, but you can stay on and we can talk, if you wish. Stop recording, yay!.