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(I will try my best to record an audio version; I was editing down to the wire and I’m fried!)

Today’s Not Boring is brought to you by… Masterworks

You may have missed a big financial story earlier this month (Not FTX). On the same day that the Dow fell over 600 points, and Bitcoin plunged to its lowest level since 2020; the art market soared.

With the sale of Microsoft Co-founder Paul Allen's art collection, buyers purchased a record $1.6 billion worth of art in less than 24 hours. The super-wealthy see art as a safe investment amid a tumultuous and uncertain global economy, per BBC.

Three things to know about the asset class: 1) fine art can help protect purchasing power when inflation is high (Goldman), 2) fine art has a -0.34 correlation to equities (Citi), and 3) contemporary art has appreciated 13.8% annually on average for the last 26 years.

So why am I telling you this if only the .01% wealthiest people can capitalize on this asset class? Well, now you can too, with Masterworks.com, the fractional art investment platform. 

All offerings are SEC qualified (see offering circulars on the site), and their track record is solid so far…their last three offerings handed members 17.8%, 21.5%, and 33.1% annual net returns, respectively.¹

Now there are 12 paintings in the Not Boring collection. Want to see what's currently available? You can get priority access right here. 

Hi friends 👋,

Happy Monday! This is an essay I’ve been thinking about and working on for a little while – I quote myself a lot because I’ve been unintentionally writing about the theme since the beginning of Not Boring – and I’m really excited to share it with you. It’s as close to a Theory of Everything as I can come up with to understand the world in 2022. 

Once I started thinking about the world this way, I’ve seen it pop up everywhere, from politics to energy to AI. Maybe it’s Baader-Meinhof, maybe it’s real. 

And as I’ve tried to explain it to people, I’ve realized that I just need to write down as coherent a thesis with as much evidence as I can, and open it up to get feedback and pushback. If nothing else, I hope it can be an interesting conversation starter at Thanksgiving dinner on Thursday.

The idea is this: the world oscillates between centralization and decentralization, with progress sloping upward through the turns. We’re approaching an era of decentralization.

An important note on how you should set expectations going into this piece: 

• You should not read this as a bull case for crypto. While the word “decentralization” is tied to crypto, this piece is broader than that. I actually think one of the things I’ve gotten wrong about crypto is that it’s a symptom of a larger trend towards decentralization, not the cause.

• You should read it like I’m Charlie Day in that conspiracy theory meme:

I’m pinning things on the board and trying to connect them, although unlike Charlie, I will try to poke holes where the connections don’t hold. 

Let’s get to it. 

Decentralization

The first thing you need to understand is that all of our systems are imperfect. 

The second, which you need to believe as much as understand, is that they’re improving. 

Churchill’s quip, that democracy is the worst form of government except for all of the others that have been tried, can be applied to the modern best practice for each and every thing we do. 

When our descendants look back on our era from a thousand years in the future, they’ll view the way that we do everything as incredibly, laughably primitive. Our most advanced technology, best-laid plans, and most resilient forms of organization will be viewed, if they’re discussed at all, as historical artifacts of a time before we knew what the hell we were doing. 

“Wait wait wait,” they’ll think-laugh to each other, “They used to literally type things into ‘computers’? And get this: they found their partners completely randomly based on whoever lived nearby. And when they needed a thing, they found a picture of it on the ‘internet’ and then another person physically brought it to their house. No no, also, they burned dinosaur bones to get energy! Wait, just one more: thousands of them worked for the same ‘company’ for years because of efficiency or something? And then they just… died.” 

Think of any example of a Thing That Just Is, and play it back to yourself in those future kids’ voices. It all crumbles under their sneers. 

Zooming that far out provides a useful perspective. It’s a little easier to accept that the things we hold true will change on that timescale. On a thousand year timescale, it’s much harder to imagine what won’t change dramatically. And if history is a guide, it’s hard to imagine that things won’t change for the better. The inconsequential things will fade away. The important things will improve. New will replace old, as it always does. 

What the better versions of everything will look like is a complete unknown. But the process by which they’ll improve, at least in the near future, is knowable, at least if we can extrapolate from how things have changed and improved in the past. 

One way to look at the history of the world is as a sine wave oscillating between centralization and decentralization, with an upward slope on the quality axis.

To make this idea more tangible, think of what we do for work. Two centuries ago, 84% of Americans worked on (mainly) our own farms in order to feed ourselves (decentralized, inefficient). By a century ago, we worked for a boss in big factories (centralized, more efficient), and today, while many people still work inside of big companies, more and more of us are working for ourselves or in creative jobs while automation replaces evermore of what humans used to do (decentralized, even more efficient). Technological innovation enabled that progress – first, the Industrial Revolution’s steam engines, then the Internet. 

There’s this excellent 2013 Slate Star Codex post, We Wrestle Not With Flesh and Blood, But Against Powers and Principalities, in which SSC describes Puppets and Vast Formless Things (terms he borrows from Edgar Allan Poe’s Ligaea). Vast Formless Things are the drivers of change in history. Puppets are the interchangeable people or institutions that carry out the bidding of the Vast Formless Things. 

“I think,” writes SSC, “the vastest and most formless Vast Formless Thing of all is technological progress.” 

As an example, he argues that the Printing Press precipitated the Protestant Reformation, the Newspaper, the Renaissance, the Scientific Revolution, and the Rise of Nationalism. Martin Luther, Leonardo da Vinci, and Sir Isaac Newton were Puppets. The Printing Press was the Vast Formless Thing. After its invention, all of those other things were destined to happen, no matter who ended up bringing them to life. “So the biggest changes in history have been predetermined reactions to different technological conditions.” 

In this view, technological progress sets the stage, and everything else plays its scripted part. 

I’ve written a lot about technological progress, and my belief that things are only going to get crazier from here. I’ve written about progress as an exponential but smooth thing. But it might be more stark than that; technological progress may draw a more clear boundary between eras, between the way things were and the way things are going to be.

Right now, as you read this, we’re only really less than thirty years into one of the biggest technological changes in history – the Internet – and we’re standing on the precipice of a bunch of other big potential driving shifts: AI and renewable energy are two with the potential to really shake things up, among others. If things feel unstable, that’s because they probably are. 

The Straussians would say that we’re about to enter our Fourth Turning. Historically, according to Strauss, Fourth Turnings have been marked by “bone-jarring Crises so monumental that, by their end, American society emerged in a wholly new form.” The last Fourth Turning was kicked off by the stock market crash of 1929 and ended with the end of World War II. 

If history repeats itself, we’re on the verge of a twenty year winter set off by a major crisis like a financial crash and global war. Given everything going on in the world, that possibility doesn’t seem so far-fetched. On the other side, in the next First Turning, a new order awaits. 

In a prescient 2015 blog post, A Big Sweeping Theory of Modern History, Noah Smith laid out the cycle slightly differently, but ended up in the same place: war, and then a new order. 

More softly and hopefully, we’re in a Liminal Space, “neither here nor there.” My mom recently read How to Lead When You Don’t Know Where You’re Going; Leading in a Liminal Season by Rev. Susan Beaumont, and emailed me her notes. Baader-Meinhof strikes again. According to Beaumont, there are three phases of the change process:

1. Separation: A period in which a person, group or social order is stripped of the identity and status that previously defined it.

2. Liminal Period: A disorienting period of non-structure or anti-structure that opens new possibilities no longer based on old status or power hierarchies. New identities are explored and new possibilities considered.

3. Reorientation: A reforming period in which the person, group, or social order adopts  a new identity, is granted new status and designs new structures more appropriately suited for the new identity.

Whether we’re entering a Fourth Turning, a major war, living in a Liminal Space, or all three, it’s increasingly clear that we’re heading towards something new on the other side. 

Here’s my working thesis: 

We’re heading towards an era of greater decentralization on all fronts – geopolitics, finance, education, journalism, and energy are just a few examples – driven by technologies including, but not limited to, the internet. This newly decentralized era will require new infrastructure and organizing principles that can adapt to the chaos and complexity inherent in decentralized systems. 

My argument isn’t clean or without gaping openings for counter-arguments, and I’ll try to make some of those, too. Again, think Charlie Day at that conspiracy board. But everywhere I look, I see the seedlings of a shift from centralization to decentralization:

• Energy: Fossil Fuels vs. Renewables 

• Manufacturing: Globalization vs. Reshoring

• Manufacturing: Making vs. Growing

• Science: Government Funded vs. Decentralized

• Hard Tech: Government Agencies & Incumbents vs. Startups

• AI: Closed vs. Open

• Talent: Big Tech vs. Startups

• Apps: Big vs. Small

• Media: Substack vs. Journalism

• Education: Factory vs. Personalized

• Finance: Big Banks vs. Fintech

Don’t worry, we’ll cover all of these in turn.

The push towards decentralization isn’t complete. It may just be starting. Even at maturity, there will still certainly be centralized counter-examples (and the seeds of re-centralization).

In the middle of this storm, in this Liminal Space, it feels like things are fragmenting and splintering, directionlessly and pointlessly. But I’m an optimist, and I think there’s an upward slope to all of the ups and downs. New technologies shatter old systems, but they help us piece new ones together in previously-impossible and superior ways. 

Before we get to those examples, let’s take a journey through the history of that upward sloping sine wave to set the stage for the idea that not only are a bunch of things decentralizing, but that that decentralization sets the stage for a new era defined by decentralization.

The Upward Sloping Sine Wave

In the beginning, there was nothing. Then, in an instant, total centralization. All of the energy and matter in the universe existed in one single superdense, superhot point. Then… bang. 

The Big Bang kicked off an ongoing, 13.8 billion year process of universal decentralization. The universe continues to expand at a rate of 74 kilometers per second per megaparsec. That’s really fast. From a single point to a 93-billion-light-year-wide universe filled with dark matter and planets and black holes and asteroids and stars and galaxies and supernovae, at least on our tiny little rock, living beings. 

The emergence of those living beings, including you, me, and all of the people and animals you know and love, could be viewed as a process of centralization. As Richard Dawkins writes in The Selfish Gene: 

Darwin’s theory of evolution by natural selection is satisfying because it shows us a way in which simplicity could change into complexity, how unordered atoms could group themselves into ever more complex patterns until they ended up manufacturing people.

The Big Bang sent a bunch of atoms flying, and some of those atoms found each other and teamed up, forming molecules, some of which formed genes, which mutated and replicated over billions of years to create you and me. On that level, we’re walking embodiments of centralization. On a societal level, though, each of us is an atom. 

Each of us represents one node in the larger human system, what Tim Urban calls the “Human Colossus.” 

The better we could communicate on a mass scale, the more our species began to function like a single organism, with humanity’s collective knowledge tower as its brain and each individual human brain like a nerve or a muscle fiber in its body. With the era of mass communication upon us, the collective human organism—the Human Colossus—rose into existence.

Human history can be viewed as a history of the ways that we’ve organized ourselves to meet our basic needs and attempted to progress beyond them. 

There’s a lot left to cover here! For more on decentralization, including 11 examples, the internet as a centralizing force, and how crypto fits in:

Continue Reading Online

Thanks to Dan for editing this beast — I’m sorry for making you read so many words.

That’s all for today. Hope you have a great Thanksgiving if you celebrate, and hope you enjoy all the Americans being offline for a little bit if you don’t! We’ll be back in your inbox next Monday morning.

Thanks for reading,

Packy