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Basic failure in the gig economy is essentially a failure of nerve a lot of the sense of security in the paycheck world is a completely false sense of security.
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That security does not actually exist.
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It's as risky as being a gig economy independent.
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And if you refuse to take risks for year after year, quarter after quarter for like years on end, you're gonna end up with like lots of like risks.
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So, yeah, it blows up in your face.
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By the time you're done solving your perfectly rationally formulated and post problem you will find that what you've solved for is a completely meaningless life.
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What excites me now is This people being willing to make the leap.
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Meaning making begins when you first take.
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Your first courageous decision in your life and then realize just how much agency you have, Make that one thing come true. Force it to be true.
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you're bigger than the particular thing you happen to be doing right now.
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there is an infinite universe out there beyond the little scope of a little game.
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Jim O’Shaughnessy: Hi, I'm Jim O'Shaughnessy and welcome to Infinite Loops.
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Sometimes we get caught up in what feel like infinite loops when trying to figure things out.
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Markets go up and down, research is presented and then refuted, and we find ourselves right back where we started.
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The goal of this podcast is to learn how we can reset our thinking on issues that hopefully leaves us with a better understanding as to why we think the way we think and how we might be able to change that to avoid going in infinite loops of thought.
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We hope to offer our listeners a fresh perspective on a variety of issues and look at them through a multifaceted lens — including history, philosophy, art, science, linguistics, and yes, also through quantitative analysis.
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And through these discussions help you not only become a better investor, but also become a more nuanced thinker.
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With each episode we hope to bring you along with us as we learn together.
1:08
Thanks for joining us, now please enjoy this episode of Infinite Loops.
1:09
Jim O’Shaughnessy: Well, hello everyone.
1:10
It's Jim O'Shaughnessy with yet another Infinite Loops.
1:11
Today, my guest, Venkat Rao, has been somebody who has been fascinating to me over the years.
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I don't actually remember how I discovered you.
1:21
I think it might have been your piece on, you could characterize everyone as a cast member of The Office.
1:30
I'm not sure that was a great piece and I've been reading you ever since.
1:35
I'm also joined by my colleague Ed William, who is the real brains behind making me look smart in terms of devouring a guest's entire body of work.
1:49
So he'll be jumping in here as well.
1:52
Today, Venkat, we really want to focus on the collection that you've titled, there's two of them, The Gig, and you seem to have been way ahead of the curve.
2:04
We're seeing a ton of people right now, like the Pathless Path, we had Paul on.
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Lots of people are talking to me about what you have written extensively about and, I think, brilliantly about. So first off, welcome.
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Venkatesh Rao: Pleasure to be here, Jim.
2:21
Jim O’Shaughnessy: Thank you for joining us.
2:24
If you wouldn't mind, and for listeners who might not be as familiar with the work as we are, can you just give an overview of what led you to put this down between 2019, 2021 you add it later, but just a little bit of the backstory would be very helpful.
2:45
Venkatesh Rao: Yeah, it's kind of interesting actually because even though I've been an independent consultant and in the gig economy for over a decade, at this point, in my sort of main line of blogging on my blog Ribbonfarm and then my current Substack newsletter as well, I tend extremely philosophical and talk about almost everything else except practical, nitty gritty topics and 'how to' topics in particular were kind of anathema for me.
3:21
I don't really like talking about things like making money, career, success, that stuff is off to the side for me.
3:30
I occasionally would write bits and pieces about it and the response would be good, but fundamentally, I'm not a practical person, I'm a very sort of impractical person and I like it that way.
3:45
But, somewhere along the way, I guess, I figured out how to basically survive in a pretty harsh environment of practical constraints, which is outside the paycheck economy.
3:57
But the genesis of this particular two volume collection, The Art of Gig, is actually a long shot story I wrote on my main blog, Ribbonfarm, in 2015, called The Art of Gig and, of course, it references to The Art of War.
4:11
And it was basically an absurdist fantasy fiction about the world of consulting, where I pretended to be a consultant in a world with conspiracy theories, secret societies and people with weird powers.
4:27
It was an extended satire of the traditional consulting world of McKinsey, BCG, Bain and so forth.
4:35
And this was a long, I think, I don't know, 10,000 word short story, and it introduced a bunch of quasi fictional characters, including a fictional version of myself as a consultant.
4:46
This short story is not in the book, by the way.
4:49
And a few years later, as I had more and more of notes piling up on how to be good at the independent economy and it didn't feel like a fit with my mainstream blogging and writing, I just decided, "Okay, Substack is coming up.
5:05
I need an experiment to play with. Hey, why not this?"
5:08
So I took my cues from my short story and started writing, and it was a mix of the non-fiction pieces that are in this two volume collection plus continuations of the fiction pieces, which I haven't yet published.
5:20
I'm not yet sure whether I'm going to, but yeah, it was a mix of absurdist fiction and more serious non-fiction.
5:27
And it was an interesting challenge for me because it was the first time I was unironically trying to do practical 'how to' material for people in kind of a sincere way.
5:39
Usually, I'm satirical, I make fun of some stuff and explore things in a very, I don't know, elliptical way.
5:48
The piece you mentioned, The Gervais Principle about the show, The Office, that's what put me on the map.
5:54
2009, it went viral and that turned into a six part series and an ebook on its own.
5:59
That's the sort of thing I'm more associated with, where you have to work through layers of annoying jokes and meanings and references to get at what I'm saying.
6:08
And even then, chances are, you'll misunderstand what I'm saying.
6:10
So for that kind of work...
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Like The Gervais Principle, for example, I had equal numbers of people accusing me of being a communist and a capitalist. I like that.
6:21
Whereas The Art of Gig was my first experiment of, all right, let's set aside the layers of irony and jokes and satire and just try to straight up capture what I think I know from having been 10 years in the Gig Economy, and it was surprisingly well received.
6:37
And yeah, people you mentioned like Paul Millerd and Tom Critchlow and several others who were early to this conversation, I think a bunch of us started tossing a lot of ideas around, and I think the environment was going through a shift at the same time as well, with the creative economy stack, lots of tools were becoming available to make this kind of way of life much more accessible to a lot of people.
7:00
So it was like a second wave past the Tim Ferris first wave, and I think I kind of timed it right.
7:07
So the newsletter was super popular, but after two years, I was done.
7:09
I said everything I had to say, I had sort of exhausted my 10 years worth of what I had learned, so I decided to stop the newsletter and eventually put together, at least the non-fiction bits, in these books.
7:25
So that's how these books came about.
7:27
Jim O’Shaughnessy: You're wonderful at the turn of the phrase.
7:32
Paycheck People, that instantly conjures up, for me, all sorts of images that... It's like collage.
7:39
It creates a collage in my mind when I hear that term Paycheck People. And I was reminded of...
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My parents had a little villa on one of the out islands in The Bahamas and our neighbor was this lovely older lady, who's long since gone now, I was a teenager when I was listening to her.
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They offered an all-inclusive package at the resort that was nearby, to this little villa we had.
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And I was sitting with her and my parents and she simply said, they asked her about it and she goes, "Oh well, package people."
8:16
And instantly, I knew everything that she thought about that.
8:22
And so, you are really good at it and one of the phrases that really struck me as I was rereading some of this, is your idea of, basic failure in the Gig Economy is essentially a failure of nerve.
8:43
Talk a bit about both the Paycheck People and the concept and then this idea of the failure of nerve.
8:49
I often think about it in the Teddy Roosevelt entering the arena type thing.
8:55
Is that what you were getting at or am I missing the boat?
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Venkatesh Rao: It's a related idea, I would say.
9:01
And as it happens, that particular turn of phrase is not mine, it's Arthur C. Clark's. So Arthur C.
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Clark has this wonderful essay called Failures of Prophecy, I believe, and he talks about two kinds of failure in thinking about the future, failure of imagination and failure of nerve, and he makes the very interesting claim that the failure of nerve is, by far, the more important.
9:29
A lot of people are extremely imaginative, they can take in the vast amount of confusing information in the world now and come up with very imaginative sort of interpretations and sense making constructs.
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But very few people can look the confusing or mess of reality in the face and say, "This is actually the nervy, courageous thing to do," And go against their instincts.
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And it's easy to, I don't know, spend as much time as you like on the fun imaginative stuff and never do a courageous thing in your life, whereas the nervy thing is kind of the hard thing to do.
10:04
So that's where that particular phrase came from.
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The Paycheck People connection is, I guess, the industrial economy over a century, has created this gamified environment of relating to work where it is easy to get through life never making a hard decision ever.
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So long as you're smart and imaginative, you will always be valued, you'll have a job, somebody will give you interesting problems to work on.
10:33
If you have the right kind of imagination, maybe you'll come up with good answers, but your courage is not routinely tested.
10:39
And this, I think, was probably the case in most sectors in the, at least, developed industrialized world and the paycheck economy in particular, until, I would say, mid to late nineties when things started wobbling and the old certainties were really starting to unravel and it became
10:59
clear that you could not go through life only being smart and imaginative and playing the game that was laid out in front of you because at some point, you had to make courageous decisions, and the paycheck world is not really set up to allow you to make courageous decisions. In fact, in the paycheck world, I would argue, courageous decisions are, generally, decisions
11:15
In fact, in the paycheck world, I would argue, courageous decisions are, generally, decisions that kind of break the gamification model of the world itself.
11:27
You've got the cliche scene of Jerry Maguire saying...
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flouncing out of the sports management office and the whole thing, the scene falling flat.
11:38
I remember that scene, it's like he makes this big rousing speech, and apart from Renee Zellweger, nobody responds at all.
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It's like this completely cold response.
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And that, to me, is a typical paycheck workplace.
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In the brief time I was paycheck employed for several years at Xerox, I dropped a few bombs, I made few bold decisions, but what was shocking was not that a few senior executives kind of spotted me and chose to sponsor me and back my decisions and help me take, I don't know, risky decisions and risky projects, but the complete lack of reaction in the rest of the corporation, and this, I think, is generally true.
12:24
It's like it's outside their frame of reference to understand risk at all.
12:28
It's like, all right, you make this narrow band of maybe very intelligent and imaginative decisions, but within an extremely narrow band of acceptable risk.
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And beyond that, risk taking is for senior executives, weird people in the investing world, artists and creative types who live hand to month and are starving.
12:49
Risk is not within the frame of reference for how to navigate the world.
12:53
And I think that's kind of why I relate the paycheck economy to kind of a structural failure of nerve, it sort of trains you to not have nerve, it trains you to survive without it, and I think there's a cost to that over a long term.
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Jim O’Shaughnessy: Oh man.
13:08
I mean, we are so simpatico on that. It's scary.
13:12
Ed, I'm going to let you talk about the fact that we've tried to address that at the corporate level at O'Shaughnessy Ventures by allowing my colleagues, like Ed, to have nerve and try a bunch of different things.
13:29
So Ed, I'm going to toss it to you for that portion. Ed William: Yeah, sure.
13:34
So I mean, two points sort of come out of that really.
13:37
So the first one is that on my side, I was a sort of lawyer for five years until Jim offered me a role last year.
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So I'm very familiar with that sense of within the guardrails and the risks you are allowed to take and the risks you feel able to take are very limited.
14:02
And my question for you, really, on that point, was, for me, what really felt like the risk was leaping from the paycheck economy to the Gig Economy.
14:14
And I've actually found having made that initial leap, consequent risks have become a bit easier or more natural to take.
14:23
And I was curious whether that sort of process, whether that's how you see the process, whether you see that there's a lot of people who are bottled up in the paycheck economy because they're unable to take the risk, when more people do, they'll, perhaps, unlock more opportunities.
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Venkatesh Rao: I think that is definitely one pathway to learning to take risks, which is simply take one very big risk for the first time.
14:51
It's jumping off the high board into the deep end of the pool and it's like there's this feeling in the pit of your stomach that you have to learn to understand and manage, and then you do it again and it sort of softens.
15:02
And I think, back when I did it, I'm not sure when you had your experience, but I left my job at Xerox in 2011, which was just a few years into this being a relatively new thing.
15:16
The Four Hour Work Week was a relatively new faddish book going on then.
15:22
Dan Pink's writings on the Free Agent economy were 10 years old.
15:25
But basically, the free agent economy was still kind of a very nascent thing. But I would say that...
15:33
And today, of course, there's a lot more sort of social structure out there, there's forums you can go to, there's books like mine and Paul's and others out there, so that it's almost like you're not taking as much of a risk because you're leaping into a known context where there's a lot of people who've already done it before.
15:47
But even then, it's extremely scary to do the big, big leap all at once.
15:52
You're abandoning health insurance, you're abandoning a steady paycheck.
15:54
If you have bigger responsibilities like kids, that's an even bigger deal, a mortgage and so forth.
16:03
So I've been thinking about, how do you actually learn to take these risks even before you make the big leap and take the big risk?
16:13
And I was thinking about various ways in which the opportunities present themselves even in the paycheck world, but most people simply pass them by.
16:22
You mentioned you're a lawyer and one of my first experiences of learning to take a risk in a corporate environment was dealing with patent lawyers.
16:29
So since I've worked in the research part of Xerox, we were expected to write patents.
16:35
And also, in my case, since I was entrepreneur in residence and trying to create internal startups like negotiate contracts and so forth, and whenever legal matters came up, I would sort of refer them to our division's lawyer and I would kind of not really question what the lawyer came back with.
16:57
But at some point, a senior vice president kind of gave me a little tip, which is, lawyers don't own the risk, you do.
17:05
They can tell you what's risky and what your exposure is, but you, as the principal of a project or an idea or innovation, you kind of have to decide how much risk to take and then they can tell you what the implications are.
17:18
They can tell you if you're crossing the line of legality and that's, of course, an important one.
17:22
But beyond that, if you leave it to lawyers to decide what your risk should be, lawyers are typically going to be super conservative, which means you'll default to conservatism.
17:30
So that was one valuable lesson I learned, which was, anytime I had a dealing with a lawyer in a corporate environment, I would very consciously ask, what are the risks in this situation?
17:39
What risk am I sort of taking on personally at a career level, which nobody else cares about?
17:43
But also, what risk am I taking on, on behalf of my employer, Xerox, and is that acceptable within the parameters of the business model and how risky of a business Xerox wants to be?
17:53
And also, fractal it down to, as a scientist in the R and D division, I'm expected to take a different kind of risk and more risks than, say, maybe, people in operations responsible for very big cash flows and so forth, right?
18:06
So you really have to explicitly think about risk and own it.
18:10
And there's other things too.
18:11
Like, there's all these soft norms and guardrails about being polite in meetings, not challenging the authority of senior managers, deferring to the authority of people who've been in the industry for a really long time, and how rude are you willing to be?
18:24
How much are you willing to drop a bomb in big meetings?
18:26
How much are you willing to burn your bridges with people other people say are influential?
18:31
If there's tribes developing in an organization, are you willing to say...
18:35
All right, sometimes you have to pick a tribe and bet that it's going to be the winning tribe, and if necessary, say "Screw you!"
18:43
To people who you think are taking the business down the wrong path.
18:46
So there's lots and lots of risks you can learn to take within paycheck traditional corporate environments.
18:52
And actually, the Gervais Principle article I mentioned, one of the points it made was, there's a certain archetype within organizations which labels sociopaths who actually see this very early and start actually taking the risks that are available for them to take within corporate environments and sort of navigating the hierarchy that way.
19:11
And they typically rise much, much faster.
19:13
They skip all the middle management runs, are usually spotted early and developed for high potential leadership and are put on the executive leadership track early.
19:23
I was spotted that way and did take a few risky projects and was sort of progressing along that path when I decided to make the leap.
19:31
But yeah, the corporate environment does offer lots and lots of opportunities for you to learn the risk taking game, which leads me to think that a lot of the sense of security in the paycheck world is a completely false sense of security.
19:45
That security does not actually exist.
19:47
It's as risky as being a gig economy independent, it's just that they manifest and structure themselves differently.
19:54
And if you refuse to take risks for year after year, quarter after quarter, for years on end, you're going to end up with lots of risks.
20:04
So yeah, it blows up in your face.
20:08
Jim O’Shaughnessy: So let's go deeper on that because this has been kind of an obsession of mine.
20:12
A lot of my friends, we have this conversation continually.
20:17
And one of my good friends, who's a brilliant entrepreneur, he's a polymath, and once we were together and chatting about it, and I was always banging on about how you should be more of a probabilistic thinker as opposed to a deterministic one.
20:35
At this meeting, he was like, "Jim, stop saying that to people."
20:40
He goes, "What you want is, you want to be the probabilistic thinker, but you want to give all of the assignments to the deterministic thinkers."
20:51
Which got us into this idea of, is there some sort of advantage? Is there an archetype?
20:58
Is there a genetic structure that favors certain type of people as risk takers?
21:04
So for example, if risk were Bayesian distribution, right?
21:09
Risk taking, sorry, was Bayesian normally distributed, right?
21:14
I don't think that there's going to be Elons, I don't that there's going to be Jeff Bezos because if it's evenly distributed and everybody wants to, "Yeah, I'll take that risk.
21:24
I'll go along that volatility."
21:25
It's going to become a very efficient market.
21:28
The way I think about it, and I'd love your thoughts, is that the distribution is quite skewed.
21:35
It's not a normal distribution at all.
21:39
In fact, the amount of...
21:41
I have loved being long volatility all of my life.
21:45
It's just like, I'm going to burn the ships, start the company and let's do it.
21:51
And I thought that was normal.
21:53
I thought that that was a regular way that people would approach the world.
21:58
As I executed against some of my strategies, I realized that that was very abnormal. What do you think?
22:07
Is there a predestined, if you will, character type, archetype that leads one to make this transition easier, or am I wrong?
22:20
Venkatesh Rao: Okay, so I think that's a very interesting and complex question, and I think there's layers to it that are truly worth unwrapping.
22:28
And since you wanted to go deep on this, let's do that.
22:32
So if you think about some of the basic criticisms of risk taking, especially from the liberal corner, it's like, yeah, the people who look like they're bold risk takers, if you look at their background, you'll often find that they come from privilege and the risk, subjectively, for them, is not actually that big.
22:50
The marginal cost of a hundred thousand dollar risk is not the same if you sort of grew up in poverty and made that first hundred thousand dollars with painstaking hustle versus if that hundred thousand is just 1% of a very large trust fund you inherited.
23:10
So that's sort of a very crude level that you can [inaudible].
23:13
Let's set that aside and adjust for that and say, "All right, taking that into account, what's left?"
23:19
And again, you find that there's another interesting layer, and this comes up in the famous two marshmallow test, for example, which has been kind of discredited, but it's interesting how it's been discredited, where the original research claim that kids who were willing to wait for the researcher to come back so they could have two marshmallows instead of having just one marshmallow right now, they did better in life and future.
23:48
And poking at that, some more recent research looked at the backgrounds of children who made the two kinds of different decisions, and it turned out that the kids who picked one marshmallow now, versus two marshmallows later, tended to come from less privileged
24:03
backgrounds where the short-term environment was relatively stable, but the medium and long-term environments were so unstable that it was actually rational for them to say, the future is so uncertain, I'd rather take the one marshmallow now than risk this. And if you poke deeper, there was this research done, I think by Phil Zimbardo, he's another
24:16
And if you poke deeper, there was this research done, I think by Phil Zimbardo, he's another person who's gotten canceled for questionable research.
24:27
But one of the interesting things he did was the study called...
24:35
One of the tests he does to study time perspectives, was asking children to tell autobiographical stories, and it's very telling.
24:46
People who grew up in deprived environments tend to tell stories that span a day.
24:51
People who grew up in more privileged environments tend to tell stories that span a lifetime.
24:55
So a poor kid who grew up in the slum might say something like, I got up in the morning and went to the market and found, I don't know, a sandwich or something. It's a day long story.
25:07
And a rich kid might tell a story about how I'm going to go to college and study law and become president and everybody will love me and I'll be famous.
25:16
That kind of story, right?
25:17
So that's, I think, the second layer of the onion.
25:19
So the first is just raw assets and privileges, starting from the effects, like what risk means to you.
25:26
The second level is simply the psychological conditioning that leads you to have different perspectives.
25:32
A third layer of the onion, I think, has to do with the subjective perception of the quality of the risk, as in...
25:46
Let's say you were bullied as a kid and developed extremely strong fighting instinct.
25:53
And in a particular situation where somebody might be very combative and another person might be very conciliatory, you take what looks to other people like a very risky decision to escalate a conflict and blow things up.
26:04
And maybe that traces back to some, I don't know, early childhood memories of fighting back against bullies or something like that.
26:11
So to you, in that situation, psychologically, it could be the case that, even though that there are lots of explicit risks, like saying something objectionable and potentially losing your job, the sort of utility of that outcome or disutility of that outcome is actually less than the disutility of challenging, say, very deeply repressed traumas and learned behaviors for dealing with those traumas.
26:38
So I think the narrative people tell themselves of what the risk they're taking actually means to them, is actually very different from what you might assume just watching a drama unfold from out there.
26:52
So my point here is, the risk looks very different to the person taking it than it might to different spectators, and this is part of the other mind's problem.
27:01
Like, I'm in a meeting, somebody else is saying something very risky that might get them fired and I'm like, "I would never say that because if I put myself in their place, I would see the risks and utilities very differently." But part of that is...
27:15
There's the seen part, which is explicit incentives which affect everybody like money, losing positions, jobs, investments, but there's also the internal psychological risks.
27:25
Maybe I don't have the traumas that could be badly exposed and brutalized if I did certain things that another person does.
27:33
So I've gotten, I think, both empathetic and more empathetic and more judgmental about this stuff, which is...
27:42
The way I like to phrase this is, I like to keep my psychology complex, but my moral judgment's simple.
27:50
It's like, I can never quite put myself in your shoes and unpack the complex psychology of why you're taking the decisions you are, but I am going to draw some hard lines in the sand and say, "All right, murder is wrong."
28:03
I don't care how traumatized and messed up you were in your childhood or how murdering someone seemed to you, the less risky thing, as opposed to facing the consequences of some actions and drawing a line in the sand at murder is wrong, you're infringing another person's life.
28:20
So I think that's kind of the layers of how I think about this stuff.
28:26
So to your original question of how should we think about the distribution of risk and is there a genetic predisposition to risk taking, I think the answer is probably yes.
28:38
There are probably people who are fundamentally more, I don't know, risk positive, and more likely to just blow things up to see what happens.
28:46
So there's probably some genetic predisposition, but there's these layers of trauma management, behavioral conditioning, circumstantial assets that creates so much more context that, I would say, the genetic component, at least in modern conditions, is probably almost a rounding error.
29:07
But to the extent you can kind of do controlled trials of twins raised in different circumstances, I suspect, yeah, you would find that there are genetic differences and predisposition to take risks.
29:20
And on that spectrum, I would say I'm probably the middle of the distribution, a fairly ordinary type of risk taker.
29:28
I don't take extreme risks and I'm like somewhere in the middle.
29:32
But I probably present as somebody who takes a lot more risks than I actually do, because from my subjective perspective, the actions I take are not actually as risky as they appear.
29:42
So I think that's a big theme in a lot of my writing.
29:45
I've written about it in a few places, but the risk that I think I'm taking is not the risk you think I'm taking.
29:51
Jim O’Shaughnessy: And that brings...
29:52
I mean, we could spend the next three hours just talking about this subject, I'm absolutely fascinated by it.
29:58
But I love your last part there.
30:01
The perception of risk is very different to the person with the agency who's taking the risk and people who are either going to be affected by the risk that that person is taking, or just spectators that are like, "Whoa, I wouldn't do that."
30:19
And one of the things that you point out, which I really loved, was this idea of a fixed point futurism, and it's something that I got taught by my grandfather.
30:29
He called it something different.
30:31
He called it premeditating.
30:32
But when I was reading your stuff, I'm just like, "This is basically the same thing."
30:38
What it is, is you pick something after doing the premeditation of what can go right, what can go wrong?
30:48
If I get what I want, how will that affect me for the ill, right?
30:53
Many people don't think about that.
30:55
If I don't get what I want, how is that going to actually make me better?
31:00
So it's kind of like a big decision tree, and then you write it all out and you get your thoughts.
31:06
And then I realized when preparing for our chat today, that he was talking about fixed point futurism.
31:14
In other words, you pick something that it's a line in the sand.
31:19
I'm going to let you tell us all about it.
31:22
But that becomes a personal mission, if you will, that you commit to.
31:29
You commit your agency to making that one thing come true.
31:34
And I loved your language.
31:37
Make that one thing come true. Force it to be true.
31:40
I love that because of the aspect of the emotional nature of humans that I don't think we calibrate it correctly in commerce.
31:51
But talk a bit about that if you would, because I love that concept. Venkatesh Rao: Yeah.
31:55
Let me think about what's the best way to sort of enter into this particular topic, because yeah, there's so many pathways into it.
32:03
But yeah, so I think my own way of getting at this idea starts from the philosophical notion that rationality is actually an extremely nihilistic mode of cognition.
32:18
So an extremely rational approach to say scientific discovery and experimentation, science is a fundamentally nihilistic process.
32:27
If you let it, it'll tear apart any sense of meaning you have in the world from any source whatsoever.
32:33
And this is true of any approach to thinking and decision making that sort of draws inspiration from more scientific and rational approaches to decision making.
32:47
Which is, you define your terms of reference, you define the variables in play, you sort of make up mental models of how those things relate to each other, hopefully in a scientific spirit.
32:59
So you kind of make sense of the world and understand how the world works.
33:03
Then you kind of decide what you value and say, "I value this much, I value that that much." There are constraints.
33:10
And so you end up solving an optimization problem that there's a natural progression from thinking of the world in rationalistic modes and being sort of rational and building your models of reality, to moving to synthesis and normative considerations through optimization problems.
33:29
And what that leads to is seeing sort of life itself as an optimization problem where you are like, "All right, what's my utility function?
33:36
What are the weights on the different factors?
33:39
How am I going to solve this cost function?
33:41
If I have constraints in the picture, are they hard or soft constraints?"
33:44
So you kind of almost turn yourself into an automaton that's trying to solve an optimization problem.
33:51
And there's a long story about why this happens, but this is basically a doomed process. It will lead nihilism.
34:00
By the time you're done solving your perfectly rationally formulated and pose the problem, and you maximize your utility function and say, "Hey, this is the most utility maximizing outcome and decision I could hope for, and I'm going to do X, Y, and Z, and I'll live the optimal life," you will find that what you've solved for is a completely meaningless life.
34:18
It's sort of this conundrum of complete rationality and optimization as an approach to decision making leads to completely valueless, but technically correct, utility maximizing outcomes.
34:30
So it's the whole economics idea of knowing the price of everything and the value of nothing.
34:38
This is the manifestation of that.
34:40
So I think of it as how do you cut the Gordian Knot of getting trapped in this nihilistic process of rationalist decision making and life optimization?
34:50
And the answer is, you actually have to start not from rationality, but from complete arbitrariness.
34:55
It's like, "I'm going to pick something utterly arbitrary.
34:58
I'm not going to attempt to justify it."
35:00
It's not going to be like self-evidence first principle in the sense of Euclid's postulates.
35:06
Euclid's postulate stuff, you know, can draw a line through a point.
35:10
They're not arbitrary in the sense that if you state them to somebody else, they'll think about it and say, "Yeah, that makes sense."
35:16
And that's why Euclid's fifth postulate about parallel lines was such a big thing in mathematics, because when you stare it in and say, "All right, you can draw a line through a point that's parallel to another line," it's very hard to think of why that might not be true.
35:30
So I'm not talking about arbitrary postulates in the same sense of self-evident postulates.
35:36
You want arbitrariness in a completely... How do I put it? Artistic sense.
35:42
It's like, "I'm just going to declare that blue is my favorite color."
35:45
So that's the kind of thing I mean by arbitrariness.
35:49
And it's amazing how often committing to this kind of arbitrariness actually kills nihilism inherent in otherwise rational postulates.
35:58
And then you can be as rational as you want about everything else so long as you hold faster that one arbitrary commitment you've made, which is what I mean by fixed point futurism.
36:08
And an example that's on my mind right now, my wife and I, we are shopping around to buy a house for the first time.
36:14
And it's like that's a classic rational optimization decision making problem.
36:19
You can make up a spreadsheet about buying houses with all sorts of attributes about property values, income taxes, property taxes, blah blah, blah.
36:27
And you can lose yourself in this optimization problem of a million variables, and sort of get everlastingly trapped in this hell of trying to decide what your utility function is.
36:38
But on the other hand, you can pick something arbitrary that is going to break you out of that.
36:45
So for example, my wife is arbitrarily attached to the idea that she must have beautiful view, where either of the ocean or mountains or something like that.
36:55
And that can be an optimization variable where you can talk about, "All right, how much view am I willing to give up for lower taxes or whatever."
37:03
But it can also be arbitrary.
37:04
You can say, "I want a view of Mount Rainier," and that's an extremely arbitrary thing that can lock you in.
37:11
Another similar one for me is, I like amateur astronomy.
37:15
So it's like I want to live in a place where the skies are relatively clear, at least part of the year, and I can look up at the sky with my telescope.
37:22
It's an arbitrary variable to toss into the problem.
37:25
And I think at a practical level, it turns these, to use computer science lingo, NP complete decision and optimization problems into tractable heuristic problems that you can actually solve mathematically and logically and apply all your rationality in a sort of tractable way.
37:43
But at the same time, it also does this little philosophical sleight of hand trick of turning a nihilism process into a meaning-making process.
37:54
It's like now you've decided no matter what happens to the rest of the world and whether we are all doomed to die in a zombie apocalypse, you are going to make one thing true about the future.
38:03
You're going to be wearing blue shirts, you're going to be staring up at the sky with a telescope, even if it means zombies are coming at you and you're like killing them with the machete, right?
38:11
That's what I mean by fixed point futurism. Jim O’Shaughnessy: Wow. What a tour de force. Ed?
38:18
Ed William: So one thing that I find really interesting there, and it's something I've been thinking about quite a lot recently on my side, is that a lot of what you've talked about there and what you talk about in the books is sort of this finding meaning, and the pursuit of meaning.
38:35
And what I'm curious about is whether that is something that you've become more aware of since you've become a gig worker, or whether that was one of the reasons for leaving the paycheck economy in the first place.
38:55
So whether finding a meaning is a cause or effect of gig work.
38:58
Because what I've found is that when you're in the paycheck economy, you are in such a routine that sort of slightly more existential questions that don't come into the system as much.
39:10
Whereas now I've got a slightly more esoteric day structure.
39:14
I'm thinking about these things a lot more.
39:16
So I'm just curious of your take on that. Venkatesh Rao: Yeah.
39:22
Meaning I think is extremely strongly related to the first topic we were talking about, nerve versus imagination.
39:31
I think meaning-making begins when you first take your first courageous decision in your life and then realize just how much agency you have.
39:41
To what extent you are operating in a condition of learned helplessness in institutionalized environments.
39:49
And the first time you sort of make a reach for a truly autonomous decision, despite the risks, you realize how much more opportunity there is to do so.
39:59
And for me, the first time that happened was actually long before my leap into the gig economy, when I was unhappy with my first PhD advisor.
40:08
And I made the decision that even if it'll costs me my financial aid and I'm sort of adrift for a while, I'm going to break up with my PhD advisor and sort of go off in the wild for a while and find another advisor and new funding. And that is what I did.
40:23
It was very sort of a tough decision.
40:25
I quit that advisor, I lost my funding, I had to go off and work at a startup for a year.
40:32
Then I came back, worked with another advisor I got along with better.
40:35
But I think that flipped a switch in me where after that, solving for meaning became so easy and so much second nature because it's not an intellectual problem.
40:46
You don't have to be smart to solve for meaning-making, you just have to be courageous.
40:50
You have to do the tough and hard thing as opposed to the maybe intellectually complex but easy thing.
40:57
So I think I'm a reasonably smart guy, but I think what unlocked meaning-making for me was that first choice to make a tough decision.
41:04
And after that, it was brain-dead obvious to me.
41:07
Anytime I came to a fork in the road, it's like, "Yeah, this is obviously the more meaningful thing to do, so I'm going to do it."
41:13
And that became such ingrained habit that I don't think I've been at a loss for meaning in my life since that original grad school experience.
41:20
It's like 1999 or something like that.
41:23
And so to some extent, this has never been sort of one of those brooding existential angst themes for me.
41:32
I've been basically happy with the quality of my meaning-making for five years now because it was the step I took.
41:41
But I do notice that it's an important variable in the leap when other people make them, where the crisis of life that I came to at age 26 or something, other people might come to them at 33, 35, maybe they're in the middle of their careers as opposed to the beginning.
41:57
So whenever it happens to you the first time it happens to, you kind of make this connection between meaning-making, courage and easy intellectually, but hard in terms of guts decision making. And you can't get it. It's a habit.
42:14
You form the habit of doing the meaningful thing or the easier, but maybe intellectually more challenging thing.
42:24
So I would say that today the world is set up in a way where it's actually hard to learn this meaning-making trick except by accident.
42:38
And one of the things that I think this growing conversation around the gig economy is doing, is sort of reinforcing the intense practicality of looking for meaning.
42:49
And if you look at all the literature, not just my books, but Paul Millerd's book, the Pathless Path, you kind of notice this equation that a lot of people don't get.
42:57
If you look at conversations about meaning-making in the abstract, the way talking heads talk about them and talking about lost voice, listening to podcasters and getting radicalized, that level of conversation about the meaning crisis, it seems like a philosophical spiritual problem that should be addressed with religion and philosophy, ideas and so forth. It's not.
43:20
It's really as simple as meaning-making is unlocked when you first learn to take courageous decisions and keep doing that, so it becomes a habit.
43:27
And after that you kind of unlock this idea of fixed point futures and all these other little tricks become sort of self-evident.
43:35
And the so sort of learning to make meaning is the most intensely practical thing you can do.
43:43
It's not a matter of spiritual retreats and going on soul-searching journeys and having shamans take you on Aya retreats and things like that.
43:59
It's not about that at all.
44:00
It's the first time you come to a hard decision in your career or life, make the hard decision, see how good you are at making tough calls, and then keep doing that and meaning-making will take care of itself.
44:11
And I think that's a lesson that the emerging conversation in the gig economy is driving home for a lot of people.
44:17
And a lot of people who stay in the pay check economy, stay in an environment that makes this way too hard, that tells them, "You have to go on spiritual retreats and read Zen philosophy and take drugs to learn meaning-making." And it's not that hard.
44:32
Jim O’Shaughnessy: I just love that answer on so many levels because it resonates so deeply with me.
44:41
But I wonder, so with me, I was voraciously curious from a very young age.
44:50
I read a lot and got punished for reading ahead when I was in grade school.
44:56
I'm a bit older than both of you boys.
45:00
And so rather than send me to the library, they kind of created an anti-authoritarian, very libertarian, sovereign, individual type person.
45:10
But with me it was, I was so obsessed with my original, why do stock markets work the way they work?
45:21
That's all I wanted to know about.
45:23
And so I was young, right? I was 20, whatever.
45:28
So you put it in such a great framework.
45:31
I didn't put it in a framework.
45:33
It was just like I was so obsessed by wanting to know why markets worked the way they worked, that that launched my career, that did all of those things for me.
45:47
But then I come back to the making that choice.
45:53
I am fascinated with, for most of my asset management career, I was a quant, right?
46:00
So we were the ultimate nihilists, if you will, because we would torture the data until it confessed.
46:11
But that isn't the way that I thought about things.
46:14
I thought about things only directionally.
46:16
I didn't think whenever I was working with a younger colleague and they would say, "Yes, the standard deviation, the risk here is 17. 3%."
46:26
I'm like, "No, no, no, no, directionally, let's say, does this make sense?
46:33
Does it comply with what you've observed in other aspects of your life, et cetera?"
46:39
So I always kind of tried to figure that out.
46:44
But, let's be clear, not intentionally.
46:46
It wasn't well-thought-out the way you have it. But I was always...
46:49
So I would keep, once these bad boys came around, I used to have notebooks that I kept the intuitions in.
46:56
But now I just record every intuition I have in here, because one of the things that I've found over 40 years of keeping journals and things like that is, it's really good for you to be continually called out as a liar in your own handwriting, right?
47:12
Because I love the fact that saturated intuition, imbued intuition, after seeing the same pattern time and time and time again, it's worthwhile.
47:25
But our brains don't think that.
47:28
We're confabulating, unreliable narrators and guess what?
47:32
We're the hero of our story.
47:35
And so those memories that tend to be inconvenient because they're not consistent with the way you currently think things, our memory hold essentially.
47:45
And I came to this realization when I was looking for something else in an earlier journal.
47:50
I had thought that I had been in favor of the first Gulf War, what they call in the US, the Good Gulf War.
47:56
That's when Kuwait got invaded and everything.
48:00
And we were at a party and everyone was saying, "Well, yes, of course I supported the first Gulf War."
48:05
And I was right there with everybody.
48:07
And then later that week I was looking for something that I wrote right around that time, and I came face to face with the fact that not only was I not in support of that war, I was diametrically opposed to that war.
48:23
And so it really got me thinking, "Holy shit, if you'd have put me in a courtroom and made me, even though I'm not religious, swear an oath, I would've swore that oath."
48:34
I would've said "Yes, I was."
48:36
And so it fascinated me with the way that our memories work.
48:41
But how do you give, to bring it to a more practical point of view, are there certain people who just are...
48:51
This sounds horrible, but are going to be better in the paycheck community than in the gig?
49:00
Venkatesh Rao: Yeah, this is an interesting line of thought.
49:04
And like you, I didn't have a fully formed framework for this stuff going in.
49:09
I was also fumbling through, and it's only with hindsight that I can make sense of what I was actually doing.
49:16
But there's an interesting sort of framework for thinking about how the narratives we craft out of unreliable memory, form the context within which we sort of do our more apparently sort of rational thinking.
49:32
So the context of rational thought is actually narrative.
49:35
Which is why I like to make fun of people, like Nassim Taleb and others who are skeptical of narrative rationality.
49:44
And in my first book, Tempo, there's the whole framework of decision making in that book is around narratives are the ground.
49:52
And on top of that, you can do optimization and other kinds of calculation.
49:55
But the ground truth that you're relying on against which all your other thinking makes sense is narratives.
50:04
And there's a couple of interesting ways to think about narrative contexts for decision making.
50:11
And there's a long tradition in narrative psychology about this.
50:15
So a book I like to cite in this is I think the author is Dan McAdams, and the book is called The Redemptive Self.
50:23
And it's basically a psychology study of stories Americans tell themselves.
50:29
And this is like a psychological examination of the epidemiology of scripts out there.
50:36
And it turns out that most Americans have a particular story they tell themselves about how they grew up in relatively good circumstances, and at some point had a moment where they realized they were special, and then they tell a kind of Hollywood story for themselves.
50:54
And this coming from India for grad school, India has its own sort of narrative canvas, but it was unfamiliar enough that I think it jolted me out of seeing or being unconscious of narrative canvases.
51:08
It's like they say you don't know your own country until you viewed it from the outside, that kind of effect.
51:13
So I think that was a big moment for me.
51:16
But the point is the default narratives, which form the backdrops of our decisions and lives for most people are not actually in our own heads, but actually in the environment out there; in our schools, in our employment context and so forth.
51:32
Which means that the agency we think we have is restricted to the more rational, simpler stuff that's contained within the narrative context.
51:40
So we think we are making spreadsheet decisions and we are unaware of the narrative, which made us make the spreadsheet in a particular way.
51:49
So to take your example, yeah, quants are known as spreadsheet people who squeeze meaning out of numbers and so forth.
51:56
But what leads people to become quant traders in Wall Street?
52:01
And I know several people like yourself, and it's surprising even though everybody will say everybody else is a soulless grinder monkey doing their thing, they are not like that.
52:13
They have a soulful, meaningful reason for having joined Wall Street. And they are right.
52:19
Everyone that I've talked to, they usually have an irrational, soulful reason.
52:23
And in your case, you just wanted to know how the stock market works, which is a very different motivation from wanting to make a lot of money or having a mercenary orientation towards investing.
52:34
And this has been the case for every thoughtful investor I've known in my life, their fundamental motivation is about something else.
52:42
A different fixed point than actually making money, which is kind of interesting.
52:46
And if you ask, how do these fixed points interplay with narrative contexts, either out there in institutions or in your own head on the one hand, and with how you actually do practical decision making?
53:01
A very interesting picture emerges, which is one either circumstances or predisposition leads some people to pull the narrative out of their environments and put it in their own heads, which is the first step.
53:14
Which is own your narrative.
53:16
Stop pretending that your narrative is just inherited uncritically from your school or Wall Street or Silicon Valley or whatever.
53:24
Tell yourself what that narrative explicitly is and install it in your head so you can play with it, tweak it, toss it aside, substitute it for another narrative.
53:32
So you have to own your narrative and not be one of the case studies in Dan McAdam's book, but be somebody who's like self-authoring in some sense.
53:40
And this research on this, the famous Harvard longitudinal study of meaning and happiness by I think George [inaudible], that actually gets at this.
53:49
About what makes us happy is actually complexity of thought, which comes from owning your narrative.
53:56
And that's one big piece of it.
53:58
But okay, let's assume you do that well.
54:00
You've like stopped being uncritical and unconscious of your narrative and you pulled it from the environment and put it in your own head, what next?
54:08
How do you actually start using it as an operating reality?
54:13
And here, I think things like fixed point futurism actually form part of... How do I call it?
54:21
Narrative intelligence of sort.
54:22
Picking an arbitrary thing to commit to is a kind of narrative intelligence.
54:26
And there's other aspects to narrative intelligence.
54:28
And if you try to contrast that with say, optimization and problem solving in that mode, one way you can think of it is you're establishing boundary conditions.
54:36
You're putting maybe infinite weights on some things like your fixed points.
54:39
You're putting zero weights on some things, others you value very highly.
54:43
So you're creating this very weird context within which your apparently rational problem lives.
54:48
And this can lead to very creative and imaginative and bold outcomes.
54:52
And oddly enough, some of the finest rational thinkers have been really, really good at this.
54:59
So a favorite example of mine is the physicist Enrico Fermi.
55:03
He was famous for doing a kind of estimation known as Fermi estimation, which I'm trying to teach myself in a study group we run.
55:09
And Fermi estimation, the famous example is when the first atom bomb tests were being done, people were of course building very complicated mathematical models to estimate what the yield of the atom bomb was.
55:23
And Fermi, just prepared by pairing up bits of paper in his office and a stopwatch.
55:29
And when the bomb went off, he started the stopwatch and started dropping the bits of paper.
55:34
And by seeing how far the bits of paper drifted due to the shockwave, he was able to guesstimate a fairly good idea of how much the yield was.
55:43
That later was within 10% of the more accurate models.
55:47
And another example, I believe is the physicist Arthur Eddington, who at one point there was a picture published in a magazine of the Trinity Bomb tests, which showed the size of the spherical bomb with sense of scale and time.
56:03
This is the distance and meters, and this is 10 seconds after the explosion or whatever.
56:08
And even though all the details of the hydrogen bomb were deeply held secrets and they were not revealed, he was able to do some very quick and dirty dimensional analysis and figured out from the size of the hemisphere and the time and distance scales again, what the yield of the bomb was, and therefore what the physics of the explosion had to be.
56:28
And you can turn this to the synthesis side, and Freeman Dyson, the physicist, he came up with wonderful ideas for nuclear propulsion, Dyson spheres for mining energy from the sun, all these really wild ideas based on, I think of as the synthesis side of Fermi estimation, which I think of as Dyson design.
56:45
So these kinds of thinking, which are very approximate, rough and ready, but still very rigorous and quantitative to the extent they need to be, they follow once you make that leap into narrative boldness and say, "I'm going to commit to nuclear propelled journeys to the stars.
57:02
I'm going to commit to making atom bomb's work."
57:05
You make these bold, wild decisions of what you're going to go for.
57:09
And once you make those big commitments to those big fixed points, the maths become surprisingly easy while still remaining rigorous.
57:17
You don't have to do 10th order calculus, partial differential equations.
57:21
You can do quick, simple algebra and arithmetic and dimensional analysis.
57:25
And this is not because you're working on dumb problems.
57:28
You might be working on atom bombs and nuclear propulsion, even the hardest problems, the yield to this kind of approximation thinking.
57:34
And I think of this sort of thing as the sense of narrative rationality, meaning-making and being basically a courageous thinker.
57:42
I think that's the underlying theme here, which is how do you become a courageous thinker regardless of the machinery you use to do your thinking?
57:49
And that, of course is a question of aptitudes and talents, whether you're an artist or a mathematician or a programmer, you're going to have different tools at your disposal to be a courageous thinker.
57:59
But the fundamental challenge I think of life is how do you do that?
58:03
How do you become the courageous thinker given your aptitudes?
58:05
Jim O’Shaughnessy: Yeah, I just want to do a quick follow up because he hit something there.
58:10
And again, we were on journals.
58:12
So as you were talking, I pulled this journal out, I've been using it.
58:17
And so this is from September 8th, 1983. I was 23 years old.
58:24
But I wanted to read this because one of the things that I've been trying to get my head around and that appeals to me about your work is, how do you make this accessible to other people who don't think like this?
58:36
And I'm going to read you what I said, and so I lead in with history is important, blah, blah, blah, blah.
58:41
But then I say, and I've highlighted it because I didn't remember writing this, and I didn't do this for this interview.
58:49
So serendipitous yet again.
58:51
So here's what I said at age 23: "Ever since I was a child, I have felt as if I could shape my destiny.
58:59
I have always felt that my future was a given in that it was impossible for it not to be just the way I imagine it." So did I just get lucky?
59:17
Is there a way, because I totally am on side with you on the whole directional, the use of both the hyper-rational and logical and then the creative thinking.
59:30
But is this something like I hate lists, so I just 10 things entrepreneurs do before they take a crap in the morning.
59:42
They all do different things and it's samples and everything.
59:45
But is there a way to make it easier for people who aren't given to this way of thinking and doing to unlock it in that type of person, or no?
1:00:00
Venkatesh Rao: I think there is, but I think you can make a very careful distinction in the passage you just read out.
1:00:09
I can tell it's a 23-year-old thought.
1:00:11
And if you had to revisit that thought today and write a more sophisticated one- Jim O’Shaughnessy: I wouldn't write, I wouldn't write it.
1:00:15
Venkatesh Rao: Yeah, you wouldn't' write that. Neither would I.
1:00:19
But at 23 it's very tempting to conflate agency and determinism in scripts.
1:00:26
You think you control your future, but you think you can make a very specific future happen.
1:00:32
You think I'm a smart guy, I have these resources at hand and I can solve the problem and solve the equation of how to turn my talents and resources into the outcomes I want.
1:00:43
And then of course, life hits you in the face.
1:00:45
You realize it's much more complex.
1:00:47
Then you ask, "What happens next?"
1:00:49
Do you then refactor your sense of agency as I still have agency, it just doesn't work the way I thought it did, so I'd better said about understanding how the world actually works and understanding how agency actually operates, that's one path.
1:01:04
The other path is of course the world sort of mashed my plans to bits and pieces and I'm going to be helpless here on out, and that happens to people too.
1:01:13
So I think just as a naive sense of youthful agency does not survive first contact with the enemy, which is cool, right? It's like war.
1:01:24
But for some people it does.
1:01:26
And of course there are also people who just get lucky in a very naive sense in the sense that they plan a particular future and actually it unfolds because they never get hit in the face with conflicting reality.
1:01:36
So there are people I know that who have this sort of, they're bleed spirits who go through life everything having gone exactly as they planned.
1:01:45
But there's a certain tragedy there, which is, they think they're super agenty then things go out exactly as planned and they become president or whatever, and then they're like 60, 70 or these old people and they come across as children.
1:01:59
I talk to them and they're like, there's a sense of a lost child about them.
1:02:03
It's like they were never really tested by life, so they'd never really actually learned what was going on.
1:02:08
It's like they're 60 or 70 and they act like children or 23-year olds maybe.
1:02:14
And the part of the reason is they were on the surface, they were super lucky that things bent as they planned, but at the deeper sort of philosophical level, they're the most intensely tragic figures in the world because things went exactly as they planned.
1:02:27
The most interesting thing that can happen to you in your life is things don't go as you plan.
1:02:33
And because that forces you to come to terms with what's the actual nature of the world, what's the actual nature of agency.
1:02:40
And I think Paul Millerd, in The Pathless Path, does a very good job of laying out a very deeply felt and personal account of how he actually navigated that sense of high agency and the future being a particular high performing career and then being hit in the face with health problems and so forth, and figuring out what agency actually was at a higher level. So that was his story.
1:03:04
But okay, to your question of can, so of course, first of all, there's two versions of the problem.
1:03:12
One is, people were so battered down by early life traumas that they never make those naively optimistic 23-year old statements at all.
1:03:20
So I think you and I have been lucky that at 23 we weren't that way in fact.
1:03:24
But lots of people, kids you talk to them at 23, they've been so beaten down by life.
1:03:28
The first challenge is to get them to that place of naive optimism in the first place.
1:03:33
So I think of that as a much more basic challenge of humane treatment of young people, which is if they've been battered, just create kind environments for them where they can develop some confidence and say, "Hey agencies, actually I think that exists", even if it's at a very toy level.
1:03:50
So often when I'm thrown into position of trying to mentor younger people, which I try to avoid, I'm not a mentor type person, but when I am thrown in the situation, my tendency is to ask "how burned are you?
1:04:00
How much are you a devastated landscape of bad parenting and bad childhood conditioning that we have to get you to the starting line of being a naive optimistic age 20?"
1:04:10
And this requires kindness and nurturing, and I'm not very good at that, other people are better.
1:04:15
But let's assume some people are already at that starting line of naive optimism and some people have need some work to get there.
1:04:21
But assuming you can get them to that starting line, how do you then ensure that you throw them into reality in the right way where they, A, don't get tragically lucky, that's the phrase I would use.
1:04:34
Let's hope they don't get tragically lucky.
1:04:36
Throw them in something that actually challenges their assumptions about the world and breaks them in some way.
1:04:43
But then how do you ensure that if they're broken, they're actually not going to react with complete helplessness, but then sort of pick themselves up and say, "No, the world works differently and I'm going to rethink what agency means."
1:04:55
And I think yes, that is a learnable, teachable skill, but it's one that the industrial environment with schooling and the paycheck world is actually anti optimized for.
1:05:08
It's designed to teach you exactly the opposite of that.
1:05:11
It's designed to take you from an naive starting point and keep you tragically lucky for the rest of your life.
1:05:18
And if they fail at it, you're tossed by the wayside.
1:05:21
That's what the industrial world is set up to do, make you tragically lucky or throw you into the garbage heap.
1:05:28
We don't want either of those outcomes.
1:05:30
We want you to be thrown into the world, into a test environment where you're actually tested and then you kind of learn the skills through trial and error of acquired realistic agency.
1:05:41
And I think people like you, me, Paul, and most of the people, people in our little subculture, which the internet as a big source of agency and community, we learn these things and we are, I think, disproportionately represented in our own milieu.
1:05:57
But in the broader environment, the larger populations especially, and surprisingly it does not a developed versus developing world problem.
1:06:06
This whole condition of learned helplessness and industrial institutional environments.
1:06:12
It manifests in different ways in developed versus developing countries, but it's kind of the same, you see the same attitude of helplessness and letting environmental strips drive you and you're like helpless, whether it makes you tragically lucky or tosses you by the wayside.
1:06:27
It's just that in the developing world, more people are thrown by the wayside, and in places the US more people enjoy the tragically, enjoy is the wrong word, but suffer the tragically lucky outcome.
1:06:38
And I think we're just learning the playbook of, "All right, how do we actually turn these sort of scripted institutional paycheck people into kind of startup people who can learn these skills of agency, meaning making narrative rationality and so forth?"
1:06:53
And I think whenever I do end up writing about practical issues in the art of gig, and my older book Tempo is also kind of in that vein, which is, it took very, it's kind of weird, I was doing research for the Air Force on the command and control systems, so like in a battlefield with soldiers and robots are very weird technical topics.
1:07:14
And I was like, there's actually a lot of lessons here about how you weave narratives and how you make decisions in an actual real world environment.
1:07:22
And that's how I ended up writing Tempo about narrative driven decision making.
1:07:25
And I think it was looking back unconsciously and attempt to teach this kind of thinking to people who might not otherwise be exposed to it.
1:07:34
And a lot of the reaction to my writing I get is, in fact, in this way of achieving this practical unlocking of flip or switch, a light goes on and people realize that the world really works in this way, not that way, and this is how agency actually works.
1:07:50
I'm not as helpless as I thought, but I can't get things I want in this sort of naively expected script-based ways.
1:07:58
But I can't get very interesting things out of life if I just rethink how agency works.
1:08:03
And I think even though I tend philosophical in most of my writing, I think I have had that practical effect on at least some people who read my work, which is it unlocks, I don't know, a sense of philosophical agency over their lives.
1:08:20
Jim O’Shaughnessy: One of the things that I, my problem is when I pull out these old journals, then I spend the rest of the day, I'm like, "Holy shit".
1:08:32
I remember that when the first thing went wrong, and then later I revisited that and I was both charmed by the naivety of 23-year old me, but also thinking a lot about like, "God, I was really lucky to have that because things didn't go the way that I planned."
1:09:00
And what was great is those are some of the greatest things of it that happened in my life and career, when something really got fucked up very badly and the opportunity that unlocks to learn.
1:09:16
And I think it comes back to your point about a failure of nerve.
1:09:22
So I think it's necessary to have at least that kind of ground enthusiasm, if you will, for, "Yes, I can make a difference", but then it's not sufficient because the next step is if that happens, what's going to happen is life is going to punch you in the face continually.
1:09:45
And how you react to life, punching you in the face is the next part of the journey, so to speak. Venkatesh Rao: Yeah.
1:09:54
Jim O’Shaughnessy: And I wonder if that is, and then you bring in, I've been obsessed by Taylorism in America because it ruined so many of our institutions.
1:10:07
It just totally fucked everything up because it was like, "Oh, we need people to do the same thing on the assembly line the same way.
1:10:17
So you better train them to be like machines, don't you think for yourself", and then that bled into our government, it bled into society, it bled into education.
1:10:29
But man, Henry Ford did well with it.
1:10:33
So if we could expand a little bit about how you deal with, there's all of these forces that for a variety of reasons are trying to argue against our sort of point of view, and in other words, be a good child, do as you're told, be proficient at it, don't take risks, blah, blah, blah, blah.
1:11:01
But, and what excites me now is that this seems to be taking on a life of its own.
1:11:08
This, people being willing to make the leap.
1:11:10
Ed is a fantastic example.
1:11:13
He had such courage, in my opinion, to leave the law in which he was doing splendidly well to come over and work for a lunatic like me, but that's happening more and more.
1:11:29
And so my guess my first question is, am I right in that, is it happening more, and if so, is it because we've come to a place where doing so is easier?
1:11:42
I don't even know how to phrase the question adequately, but... Venkatesh Rao: Yeah.
1:11:46
I get what you're getting at here like, all right.
1:11:52
Yeah, yes you and I were lucky, presumably, Ed, you've been lucky in similar ways and it's kind of interesting to unpack the luck that goes into creating the naive sort of agency at youth and how that has an interplay with generational sort of cultural context.
1:12:13
So I think it's useful to look at this from a generational point of view.
1:12:16
So I'm Gen X, born 1974, I guess came of age in 1980s, India, which was still kind of a socialist planned economy before India liberalized when I was in high school around 91, 92, just heading off to college, I was freshman in 93.
1:12:35
So right on the cusp of India becoming sort of a more modern liberal market economy as opposed to a Soviet planned economy.
1:12:44
And it's kind of interesting to relate my own sense of, I don't know, personal agency at age 23 or so with what was going on in the world out there.
1:12:57
And part of it was that I kind of acquired my sense of optimistic agency along with the India itself.
1:13:04
And before in the 80s, you were like paternalistic, they used to call it the Hindu rate of growth.
1:13:11
It was like there's no possibility of dynamicism, there is no possibility of initiative an agency, the entire country is going to go in the Taylorist mode of lockstep five year planning and it's going to be a dreary Soviet hell hall of queuing up for every little material good.
1:13:30
And this was an environment that my early schooling was, but by the time I was in high school, I had experienced the Berlin Wall fell in 1989, I was in ninth grade.
1:13:39
So I came of age during a period when all this was changing and it powerfully affected I think my sense of agents and of course everybody else my age, I discovered computers and programming at the same time.
1:13:49
I learned how to program when the Berlin Wall was falling down, for example.
1:13:53
So that all this sort of plays a role in how you come of age in the critical moment when you pick your starter life attitudes.
1:14:02
And I think if you look at other generations both around the world and in America specifically, I actually, I'm sort of heartened by what I see people be mourn, millennials in particular, but I think despite themselves, boomers actually did right by millennials because boomers grew up in the military industrial complex, which is completely run by the Taylorist ethos.
1:14:34
And they themselves had a very knee-jerk scripted reaction to it.
1:14:38
So even though we think of the counterculture as this sort of fluid hippie creative movement, it was just the flip side of Taylorism.
1:14:45
There's something very Taylorist about the hippie movement.
1:14:48
So in a sense, you could say the boomers were generationally tragically lucky.
1:14:58
Like, one way or the other, the world worked to their expectations.
1:15:02
And even though they had dark dreams about it, fundamentally many of them got tragically lucky.
1:15:08
And so they grew up naive.
1:15:09
This is the impression I get with the most caricature kinds of boomers, that they precisely have this characteristic tragic luck to them.
1:15:19
Either they were part of the military industrial complex and have a very self certain attitude about how the world works, which is frankly wrong.
1:15:27
Or there were hippies that grew up with a particular counter-cultural narrative and they're wrong in an entirely different way, but both have this sort of almost precious quality of like, "Oh, you summer spring child."
1:15:37
It's like, "No, you're 30 years older than me, but I have this paternalistic attitude towards you."
1:15:46
And I'm Gen X and we famously grew up with this sort of cynical sort of attitude of the wrong starting point, which is I think overstated but yes, it was true.
1:15:56
The 80s were kind of a grim conditioning environment where you grew up with negative expectations.
1:16:01
And even though I transitioned along with India as a whole to a more optimistic starter attitude, I think if I'd just been a few years older and say hit college in 1985 or something, I might have been a much more cynical person than I am.
1:16:15
I still am very Gen X and cynical and so forth, but I would be much more so.
1:16:20
But yeah, talking of millennials and starter attitudes, I think boomers are often sort of blamed for coddling them in the 90s and creating a generation of entitled over parented kids who got participation trophies and so forth.
1:16:38
But it's not actually true.
1:16:39
I think that did right by their kids and their kids sort of hit the world with this sense of agency and optimism between 2000 and 2006, but then the world hit them in the face between 2000 and 2007, you had oh 9/11, you had the dotcom bust, you had the Iraq war that sent half of their generation off to war.
1:17:02
You had the market crashing.
1:17:04
You had an entire sort of middle millennial generation hitting the market in a place where nobody was hiring and they had to invent careers for themselves in social media and everything we see around us in terms of the culture of war, both the good parts.
1:17:17
Like inventing WordPress, Facebook, the entrepreneurs of our day, they're the greatest generation, but also even the darkest stuff, the people who've invented the toxicities of the culture, war and everything that goes with it, much as we are all disturbed by it, you have to admire the creativity.
1:17:34
These kids graduated into the heart of the recession, no jobs available.
1:17:38
They had the spunk to spin up blogs, get really good at shit posting in the underbelly of the internet, learn how to manipulate people and craft narratives that confuse the hell out of the boomers.
1:17:51
They managed to distort a couple of major elections and they're the ones who ran rings around their older generations and completely took over crafting narratives.
1:18:03
And to me, with in both its light and dark aspects, this speaks very powerfully to a generation that actually entered the world with a sense of its own agency, got hit in its face, picked itself up and actually regained a sense of agency.
1:18:20
Of course, it led to some dark places in some parts of the world and so forth, but you got to admire the overall grown increased sense of agency.
1:18:27
And I, for one, even compared to Gen X, which thinks of itself as super pragmatic and high agency in a dark sense, I think we actually have a kind of overall more helpless attitude towards the world than the millennials and Gen Z is kind of more like Gen X in some ways.
1:18:45
But yeah, I think millennials actually exercise a very strong culture of agency, whereas Gen X, we kind of are more helpless than we like to admit.
1:18:55
And we sort of have a lot of coping mechanisms of being cynical and writing dark things and pretending we are more worldly-wise than we are.
1:19:04
But I admire millennials for being much more high agency and I think this will only increase because the world is becoming a conditioning environment for this more and more.
1:19:14
So it looks dark out there, but I think the underlying currents are positive.
1:19:18
Ed William: So the one thing that I was sort of thinking about when we'd be talking about these last topics is that you wrote quite a lot about your sparring practice, which is, as far as I understand it, the centerpiece really of your consulting practice along with your writing, as where you have these one-on-one interactions with quite high-flying executives.
1:19:42
Are the sort of issues that we've been talking about today, sort of our narrative around risk taking, around meaning, are they the sort of questions that come up or are these executive in a different paradigm?
1:19:55
Are they beyond these questions or are they not even interacting with these questions?
1:19:59
Venkatesh Rao: I would say a hundred percent of my clients actually fall into the mode where they're interested in and thoughtfully engaged in these kinds of questions.
1:20:10
But I will qualify that by saying that's an extraordinarily strong selection effect going on because these are people who find me through my blogs and writings, and I suspect they are a very non-representative subsection of the senior executive ranks of corporate America.
1:20:26
And that makes sense, obviously, because when I talk to more representative executives in random contexts that are not curated, I am struck by how boring they are and how fundamentally incurious they are about any of these things and how much they're honestly boring normy grinder monkeys, even though they make millions of dollars and might have huge options packages and have CEO titles and big companies, they're fundamentally boring people.
1:20:58
And I'm kind of glad they don't self-select into working with me.
1:21:01
I wouldn't work with them because even if they paid me big bucks, it would be very, very boring.
1:21:06
So with that qualification aside, yeah, I would say the executives I work with are very interested in these questions, but in a very different way than I myself am, because I am a writer, I don't run large organizations of tens of thousands of people.
1:21:23
I spend most of my time on my own, idly and rivalries or daydreaming about my favorite topics, writing, brainstorming, shit posting.
1:21:32
So I have a very sort of relaxed, lazy life of the mind and I've been able to craft that for myself.
1:21:41
And so I think of these teams from that perspective, lazy life of the mind, useless, intellectual type writing and thinking about these things.
1:21:50
But the executives I work with strongly self-selected, again, I want to underline that again, they come at these in the context of extremely busy, high pressure, high stakes lives where they might be running organizations of thousands of people.
1:22:09
They might be dealing with decisions that involve hundreds or even billions of dollars.
1:22:13
And the context in which they're talking about these abstract problems of meaning making and narrative reasoning is the context of the one or two hours a month or so that they get to talk to me, is pretty much the only time in their lives they ever get to sit quietly and think about these things.
1:22:33
The rest of the time it is wall to wall meetings, operational decision making, thinking about hard problems and so forth.
1:22:39
It's like these are busy people.
1:22:41
I would say I work maybe 10 hours a week that I would call work, the rest is kind of like pseudo work.
1:22:48
They work a hundred hours a weeks and it's like, all right, once every four to six weeks they get to talk to somebody like me about know meaning making, blah, blah, blah.
1:22:55
And the interesting challenges in my sparring practice, which is it really is that it's not therapy, and whenever a potential client comes to me and I sense that they're actually looking for therapy, I politely say no and say go find a therapist.
1:23:09
To me, it's really about, I assume you're fundamentally healthy and you've kind of sorted out your fucked-up-ness.
1:23:15
We all have it, but I assume you're old enough and in a senior enough position that you've sorted that stuff out or dealing with it some other way.
1:23:23
I'm here to talk to you about everything else, everything outside your head and how it relates to your ideas and your work and so forth.
1:23:31
And sparring is about you are making big decisions and doing important thinking with lots of resources.
1:23:40
And it's important that you get it right.
1:23:41
So it's important that you workshop your thinking, that you think it through with a trusted ally.
1:23:47
And yes, maybe your peers at your corporation might be good in terms of sharing a context, but often they have different incentives.
1:23:53
Like, a senior VP or a CEO, if they talk to people in their own corporation, there's like misaligned incentives.
1:23:59
Even if they talk to board members, the board members have different duties and incentives, if they talk to retired CEOs, those people have the biases of old days.
1:24:09
So I think the reason I have a niche at all is that, yeah, I can play that role of keep up at a relatively sophisticated high level with these kinds of management problems, but also serve as sort of a workshopping thinking partner, and that's what we do.
1:24:26
It's like, all right, we need to do a read, or we need to think about our technology roadmap and think about the significance of AI or crypto on our product and things like that.
1:24:34
That's the practical ground that they're thinking of.
1:24:37
And then there's all the messy details of, "All right, this person is miscast in the role, do we need to fire that person, and we are in that team", all those usual types of things.
1:24:46
And then you talk about, all right, meaning making, how are we learning?
1:24:49
How are we narrativising our decisions?
1:24:51
So the kinds of things we've been talking about in this context.
1:24:54
So it tends to be very intense and demanding sparring sessions where we kind of go at it and I try to test their thinking in kind of an improv mode of, I'm not really out to try and knock you out.
1:25:05
I can't do that anyway because you are master of your context, it's like an important and difficult domain.
1:25:09
But I am going to test and challenge you. And I think it helps.
1:25:13
I think that I'm an engineer by training, and unlike most of the traditional consulting world, I can go reasonably deep on pretty much any technology domain.
1:25:22
My own background is in aerospace engineering and controls and systems.
1:25:25
But yeah, over the years I've worked in semiconductors, chemicals, even finance, retail, sustainability, energy transition.
1:25:35
So I have a wide gamut and I'm able to go more deeply than most consultants.
1:25:39
And this is important in today's context because all these philosophical cultural ideas about risks and narratives, they have an interplay with both traditional management science and leadership and so forth, the traditional topics of management, but an increasingly important role played by technology.
1:25:58
And it's no longer, in my opinion, possible to be a good executive of any kind in any function without having serious technology literacy that is actually tech curious, you can't afford anymore to be a kind of potential asshole who says, "Oh, I am going to be the
1:26:15
VP of marketing and I have a background in liberal arts and French poetry, and I'm going to pretend that all technologies, the preserve of dirty, tasteless, uncultured engineers with no higher life mind." And to me, when you want a brand and a beautiful narrative, I think that's bullshit and I refuse
1:26:27
And to me, when you want a brand and a beautiful narrative, I think that's bullshit and I refuse to work with people like that.
1:26:34
I do primarily work with technology executives, but when I work with non-technology executives, I make sure that they're fundamentally tech positive, curious about technology and within the limits of their aptitudes and capabilities.
1:26:46
They're curious about the world from a technological lens, because I think that's a very important part of leading big organizations and making big decisions.
1:26:57
It's like you're running an organization, that's management skill.
1:27:00
You are dealing with a lot of people, so that's psychology and sociology skill, but you're dealing with a world that's being increasingly eaten by software, blockchains, large language models.
1:27:10
You better have an idea what that all means and how it all fits together with the other pieces.
1:27:15
And if you're not interested in that question, not only will you suck as a leader, you won't be very interesting to talk to in 2023.
1:27:22
So as a consultant, I would fundamentally be bored.
1:27:25
I'd be like, "Hey, I am actually interested in talking to you about how these things affect your business.
1:27:31
So if you're not interested, I don't care if you can pay my rates, I don't want to work with you."
1:27:36
Jim O’Shaughnessy: I love that aspect of it.
1:27:38
And it leads me to another thing that I love that you do, talking about your own narrative as it were.
1:27:47
And that you had gone from a narrative of be slightly evil to a narrative of be slightly nonsensical.
1:27:57
And I personally found that brilliant, because you are, directionally, when I read you, you are really bang on, and what you just said is part of that, right.
1:28:14
Like I am tech obsessed, but I understand that technology is a tool, and as these tools become available to me, I'm going to want to use them.
1:28:24
I'm going to want to be able to understand them and use them in the right way.
1:28:29
But I also see people, again, this is going back to the learned helplessness, I see people saying, "Oh, there goes my job.
1:28:40
Now the fucking robot's going to do my job." No, it's not.
1:28:46
It's going to create a whole new category of jobs that are going to be vastly, in my opinion, vastly more interesting than the cut and paste job you happen to have right now.
1:28:57
And I always think of the movie Office Space, I'm a people person.
1:29:04
But ultimately, isn't that what it comes back down to, right?
1:29:11
I'm involved in some just high technology startups and yet when you go into slack, ultimately it's just about the people.
1:29:21
It is about getting those people working together, using the tools appropriately, et cetera.
1:29:29
But this sort of idea that, "Oh, well the tech's going to do it." No, no, no, no.
1:29:34
The tech is a tool in your hand that extends your reach, that it gives you leverage that you didn't have in the past.
1:29:42
Venkatesh Rao: I would challenge that to some degree, but in a subtle way, it's like, yes, you can make the sort of basic case that the sort of moral panicking humanists, as I call them, never get, which is the lump of labor fallacy.
1:30:00
It's like, go back as far back as you like in tech history.
1:30:04
And you will always find that it's the case that whenever tech sort of automates or disrupts a category of labor, it creates 10 times more new kinds of labor, right?
1:30:15
So we feed the entire planet with maybe 4% of modern populations in agriculture.
1:30:22
It used to be 80 plus percent a couple of centuries back, but we produced more food and feed everybody.
1:30:28
And it's not that all those farmers banished.
1:30:33
Future generations just weren't farmers anymore.
1:30:35
There was no need for them to be farmers.
1:30:37
So in one sense, it's true.
1:30:38
If you're attached to your idea of yourself being a farmer or a creative writer who's going to get disrupted by LLMs and you're attached to that idea, you are going to go obsolete.
1:30:50
So your expectation is, in fact, tragically correct.
1:30:51
You are going to be extinct.
1:30:54
But the question is, "Why are you choosing that path of extinction?"
1:30:58
I think the reason is that these people like the character in office space who says, "I'm a people person," they're actually the most degenerate sort of lesser subhumans in our world, because it's kind of weirdly dumb to live as part of a species that's been a technological species for 6,000 years and reject this hugely important aspect of our environment that's been growing for 6,000 years, right?
1:31:25
Saying, "I'm a people person," and sort of distancing yourself from the world of technology that you're completely entangled with is like I translate it as saying, "I choose to be a 10th of what a human being actually is."
1:31:39
So yes, the thing is it's not the technologies or tools or that we are sort of masters of our technology, that we use technology as tools, but that we co-evolve with them.
1:31:51
The medium is the message, and we are inextricably entangled with our tools.
1:31:55
Who you are is a function of what tools you sort of came of age with.
1:32:00
I am, in some sense, a PC person and a Moore's Law person.
1:32:03
I'm as much a product of my human conditioning environment, my parents and my friends and so forth, as I am a product of computers and various other technological artifacts through which my brain became what it is today, and that process kind of continues.
1:32:22
To your kickoff point of my slogan of, "Be slightly evil," changing to, "Be slightly nonsensical," in a way, I would say that reflects me evolving with the medium of the message.
1:32:37
So when I came up with the tagline, "Be slightly evil," that was when I was writing things like The Gervais Principle.
1:32:44
And at that point, a whole attitude of sociopathic management wisdom was having a moment.
1:32:52
Management literature from the '80s to, I would say, right up to the recession, had this sort of Pollyannish, positive, managers are good, leaders are good kind of attitude, and office space kind of triggered this whole trend of slightly satirical, dystopian, Dilbert as well, ways of thinking about the world of work.
1:33:12
And The Office, of course, in my view, was the sitcom that really was the apogee of that kind of thinking.
1:33:18
And I kind of accidentally timed that moment, and I wrote about The Office.
1:33:21
And I kind of made sort of a reputation for myself as the guy who takes your traditional management wisdom and MBA books, and translates it into this much more fun and darker sociopathic view of organizations.
1:33:34
But that's actually a medium of the message.
1:33:36
The medium in that case is late stage industrial organizations which are outgrowth of industrial technology.
1:33:44
Like factories, machines, assembly lines, all those Tayloristic things grew to a peak of perfection by around 2011.
1:33:53
And that kind of perfected state of a technology often coincides with the most cynical, darker, sort of, but realistic takes.
1:34:00
That's why as a medium of the message in a medium of the message kind of way, I was sort of channeling that nature of the medium by being slightly evil.
1:34:07
It's like if you are trying to be Pollyannish and good, you're going to be a bad manager and leader and employee.
1:34:12
So to actually be effective in the context of late stage industrial capitalism, you kind of have to be slightly evil in a sort of tongue in cheek, ironic way. So that was then.
1:34:22
It fit the medium of the time.
1:34:23
Now, 10 years, 12 years later, we are in a whole new world.
1:34:28
We've been through years of what I call the great weirding.
1:34:31
The entire world has been transformed by radical new non-industrial technologies.
1:34:35
The gig economy has grown, the managerial class has shrunk.
1:34:39
We are all dealing with the creators stack and just making shit up as we go along.
1:34:44
And you have to ask, "What is the message of this medium?"
1:34:46
What is the message of this new medium of creative stacks, blockchains, large language models and so forth?
1:34:51
One of the fundamental messages of the medium is, in fact, I think, randomness.
1:34:57
Randomness is woven into the fundamental nature of this technology so deeply, we don't notice it.
1:35:04
Just like deterministic planning was the essence of Taylorism, randomness is at the heart of everything that's coming online in the last decade.
1:35:11
So to take blockchains, randomness is fundamentally key to the entropy that's used in generating key pairs, for example.
1:35:19
This cascades through the entire structure of blockchain technologies, and it creates this sort of thing that you kind of have to internalize at your fingertips level and you have to internalize the randomness of the blockchain world. AI is the same way.
1:35:36
I know you're associated with Stability, and I work for...
1:35:39
One of my clients is Tenstorrent, which is an AI hardware maker.
1:35:43
And we've all kind of learned to understand the nature of generative AI models, right?
1:35:48
And we know, for example, that they actually begin by assuming random output and slowly tweak it by using past data.
1:35:57
And you go from randomness to something that looks like a Van Gogh painting, right?
1:36:01
Or from randomness to something that looks like text the way Douglas Adams might have written it.
1:36:08
And I think we're still coming to grips with what it means to sort of channel the message of this medium which is fundamentally random.
1:36:16
This is the largest sense of co-evolving with your tools.
1:36:19
It's not about finding creative new ways of being a writer, maybe use ChatGPT to fuel your fiction experiments.
1:36:27
That's sort of the shallow level of how you might channel the message of the medium.
1:36:31
The deeper ways to ask, " What does the technological medium of large language models tell me about the nature of text, and how should I sort of internalize that in how I relate to text as a medium myself?"
1:36:46
Because text itself is a 5,000-year-old or whatever, 6,000-year-old technology, right?
1:36:52
And then you start asking, "All right, maybe the best way to write a short story or an opinion piece about politics today is not to start with a well-formed thesis and work it out logically like a Tayloristic factory, but to start with a completely random set of inputs and then go from there."
1:37:10
And then looking back, I realized that's a lot of the success of my writing comes from that kind of random start orientation to writing.
1:37:17
At the start of our conversation, you sort of said I have a talent for the turn of phrase, and there's actually a history to that.
1:37:27
When I was in grad school, at a party, one of my close friends sort of called me out on always wanting to have the punchline in any live oral conversation.
1:37:37
It was like, "Yeah, you always want to have the punchline."
1:37:39
And he meant it as a criticism, like I was trying to own the room or do the mic drop moment.
1:37:46
In that moment, it did hurt a little bit, but then on reflection, I was like, "I need to own this. This is a strength. Can I build on it?"
1:37:54
Since then, I've realized that all my best writing has come from random seeds.
1:37:58
It's like I noticed, for example, Hugh MacLeod's cartoon, which has the triangle of sociopaths, clueless, and losers, and I was like, "This is a wonderfully succinct way of capturing everything that you need to know about organizations."
1:38:12
And then reflecting on that, and then at that point, I was idly watching the show, The Office.
1:38:17
That led to The Gervais Principle and that entire series that made my career.
1:38:20
So completely random seeds, like a cartoon and watching a TV show while idly thinking about my own work at Xerox, it led to an essay that changed my life.
1:38:29
This has happened repeatedly.
1:38:31
I've taken random inputs in my environment, and that seeds a train of thought, and that turns into, I don't know, an interesting thesis or idea, insight into something going on in the world.
1:38:43
And then when a reader reads that, it looks like a current and well-structured idea that came from somewhere, but it's somehow weirdly catchy or has a punchline or a turn of phrase that really sticks.
1:38:56
And they're like, "You write really good essays with these good means at the heart of them," but they're not able to see the recipe that produced that stuff, and it's because perhaps they're trapped in the Taylorist medium of thinking that essays have to be written a particular factory-like way, the way your high school teacher taught you of, "Come up with a thesis.
1:39:15
I want to write about Republicans versus Democrats in 2024.
1:39:18
Here are my assumptions, here's my logical reasoning, and here's my sort of analysis of the thing."
1:39:24
And you'll end up with this extremely boring Taylorist essay that nobody will want to read.
1:39:28
On the other hand, if you're just idly lounging around on Twitter and you notice a clever meme doing a round, and you notice that it connects in a weird way to something somebody said about Trump, you might have the seed of a very generative, powerful essay about politics, right?
1:39:43
I think I have internalized that medium through, I guess, 15, 16 years of being a blogger now, because I started blogging 2007, right when this became a good way to think and write.
1:39:55
So I kind of grew up with this environment of randomness.
1:39:58
Jim O’Shaughnessy: I love the idea of randomness.
1:40:03
It is something, again, I'm maybe quantumly entangled with you.
1:40:07
I don't think we've ever come into contact.
1:40:10
But when I was younger and music was still CDs, right?
1:40:13
I would go to Tower Records and literally buy 50 CDs at random. Totally at random.
1:40:20
I would direct myself to the various sections, right?
1:40:25
That's how I discovered what was then called European new beat, which is electronic dance music, techno. And I fucking love it.
1:40:33
It's great, but I would've ever, ever, ever just gone and intentionally gone to the European new beat section.
1:40:44
So I love that idea, and I just wonder is...
1:40:50
Again, trying to put that out there, you do it so well, but is there an exercise?
1:40:58
Is there something like when you're working with a client who is a bit more buttoned up and who doesn't like to think about the world in a random sort of generated way, is there a way that you find a way into their thinking that unlocks that ability in them?
1:41:15
Venkatesh Rao: I think this goes back to our original discussion topic of nerve and courage, because nominally, everybody knows how to do this, but they don't practice it right.
1:41:25
You talk to an engineer, they'll think in terms of local optima and global optima and how you need randomness to jump out of local optima.
1:41:31
You talk to a creative artist, they'll say, "All right, you have to splash paint around on a canvas, and that's your source of randomness."
1:41:38
You talk to a musician, they might pick up on ambient sounds, right?
1:41:41
You talk to a fiction writer, and they say maybe they break out of ruts by opening a book at random and stabbing a finger at a word, and then that's the first word of their new novel, right?
1:41:51
So everybody at some level intellectually appreciates the nature of randomness and how it fuels generativity and creativity and so forth, but somehow it never rises to the level of more than acute little creativity exercise for them.
1:42:07
It's like they appreciate it intellectually through whatever frame they're coming at it from, but they never actually act on it in a powerful way.
1:42:14
I think that has to do with the failure of nerve, as Arthur C Clark called it.
1:42:18
It's like acting in randomly generative ways takes both imagination and nerve, and everybody's got the imagination piece down bad.
1:42:28
It's like everybody knows how to tap into randomness and do weird shit, but almost nobody knows how to do that with any sort of courage.
1:42:38
It's like great, you stabbed your finger into an open book and came up with, I don't know, a weird word like rosebud, and you decide to write a story starting with the word "rosebud."
1:42:49
Are you going to come up with Citizen Kane?
1:42:51
Chances are you're not, right?
1:42:53
Jim O’Shaughnessy: Right.
1:42:54
Venkatesh Rao: There's an element of real courage and nerve that great scientists, artists, and even people in their everyday lives have.
1:43:03
That element of courage, which we often from the outside, from the output end, think of as some special sauce, some innate genius, is actually just courage.
1:43:13
I love this definition of genius as in talent hits what other people can't hit, but genius hits what other people can't see.
1:43:22
What does it take to see what other people can't see?
1:43:26
Does an imagination component, which is just look in a direction nobody else is looking, right?
1:43:32
That's the randomness component.
1:43:33
It's like yeah, you'll discover an author nobody else reads if you happen to just randomly browse the bookstore or library and pick a volume out at random.
1:43:41
That's seeing something nobody else can see.
1:43:45
But then actually choosing to go ahead and hit it, that's primarily an act of courage, not skill.
1:43:51
It's like the talented person sees a target that the script tells you to see. It's like hit a 4.
1:43:55
0 GPA or get this perfect SAT score or get the VP title.
1:44:01
That's a target everybody can see.
1:44:02
You turn your talents towards it, you aim carefully, work hard, hit the target.
1:44:07
You turn 90 degrees and you look at this weird, I don't know, electronic dance music from Europe or some weird author, and that's a different kind of target.
1:44:14
It takes an imagination to see how that might play into what you might do with your life, like maybe write an essay, maybe come up with a business idea, maybe propose a business initiative to your boss and say, "Hey, I listened to this weird music record from Europe, and that gives me an idea that we should be selling ramen noodles in grocery stores across the U. S. ," right? And you propose it.
1:44:36
And after that, it might follow the script.
1:44:38
It might say, "All right.
1:44:39
Yeah, that's a good idea.
1:44:40
Do the spreadsheet analysis and come up with the market sizing, and then yes, we'll fund it."
1:44:45
You do it, you pursue that path, and then it works, and then you get appreciated and get promoted to senior vice president.
1:44:51
So from that point on, it actually looks very traditional.
1:44:55
It looks like hitting a target others can hit.
1:44:57
It looks like raw talent.
1:44:59
But the initial part of genius is daring to look in directions others don't look, so imagination and seeing things they would not see.
1:45:06
And then the nerve is then trying to hit it.
1:45:09
It's like, "Can I come up with a creative path of like, 'Hey, I am going to try and actually hit that.' ?"
1:45:13
I think that's, again, something that's...
1:45:15
It looks like magic from the outside once it's been done, but when you're actually starting to do it on your own, all it takes is the first bit of courage to take that step, then take the next step, and then just keep doing that, and suddenly what you do looks like weird genius to other people. Jim O’Shaughnessy: Ed.
1:45:34
Ed William: You've written a lot about the infinite game side of gig work and how your sort of...
1:45:45
View your career now as an infinite game rather than a finite game.
1:45:50
How have you optimized for that?
1:45:53
What does the process look like from turning the way you see your work from finite to an infinite game?
1:45:58
Venkatesh Rao: Language is so revealing, isn't it?
1:46:01
You just asked me how you would optimize for that, and- Ed William: Well, yeah, exactly. Venkatesh Rao: ...
1:46:04
the point of the finite versus infinite game distinction is you don't optimize.
1:46:09
You don't play to win the game, you play to continue the game, right?
1:46:12
Jim O’Shaughnessy: Right.
1:46:13
Venkatesh Rao: It's kind of funny, and I think I discovered James Carse late, and it's a lovely little very poetic and dense book, Finite and Infinite Games.
1:46:24
And his other writing is good too.
1:46:26
I like The Religious Case... What's it called?
1:46:31
Well, for doubt or something like that, where he talks about how religion is fundamentally rooted in doubt rather than certainty.
1:46:39
But yeah, James Carse is, I think, a very interesting pathway into a realm of ideas that works for a lot of people.
1:46:48
The interesting thing for me was I discovered him very late when I had already stumbled on that realm of ideas in my own way.
1:46:56
So it turned out to be more a communication tool for me than a way to actually discover the ideas.
1:47:02
So I use the frame a lot and it helps a lot of people new to this kind of thinking, get it.
1:47:10
My own way of thinking about it is probably the frames we've been talking about of narrative rationality as opposed to calculative, optimizing-based rationality.
1:47:22
So yeah, my sort of scaffolding for thinking about infinite games, that's a large part of my first book, Tempo, and thinking about infinite horizons and so forth.
1:47:35
How do you optimize for it in life?
1:47:38
This is one of, I would say, my least popular idea ever, and therefore, my absolute favorite idea ever, which is this call for mediocrity.
1:47:48
I have a whole series on my blog about mediocrity and how I love mediocrity and how I solve for mediocrity and I hate excellence.
1:47:57
And finally, it's just me being a troll and a contrarian in this culture of excellence and trying to win and 4.
1:48:02
0s and being excellent and Six Sigma and optimizing and all that whole world of being Paycheck People.
1:48:12
This is why the term Paycheck People evokes a whole world of stuff.
1:48:15
They are people who play finite games.
1:48:16
They do all these things.
1:48:17
But yeah, how do you get away from that? Be mediocre.
1:48:22
I think I got onto this line of thinking starting with David Allen, the author of Getting Things Done.
1:48:31
I got friendly with him in 2005 or 2006.
1:48:34
I met him a couple of times. Lovely guy.
1:48:36
In his workshops on Getting Things Done, he starts off with a very good joke, which is, "How do you get things done?
1:48:43
I'm going to give you a absolutely perfect hack. Lower your standards." I love that.
1:48:51
And he doesn't mean it flippantly.
1:48:54
A lot of people assume he's just making a joke, and the rest of the workshop is about, "All right, how not to lower your standards and how to actually maintain high standards and do it." No, David means it.
1:49:03
He means fricking lower your standards.
1:49:05
This, I think, is an unbelievably important key to unlocking infinite game attitudes, because the conceptual connection is optimizing in a finite game and trying to win by particular standards and maximizing according to those standards means you're operating in a closed universe of sort of contextual information and you're ignoring everything outside of that.
1:49:30
And the infinite game is fundamentally about recognizing the fact that there is an infinite universe out there beyond the little scope of a little game you've set yourself to play, and there is no such thing as ultimately winning or losing in that little fake game you've made up.
1:49:46
All that happens is that you either win or you don't.
1:49:48
And then you sit back and say, "All right, life hit me in the face or made me tragically lucky."
1:49:55
So I think winning in a finite game is tragic luck, losing in a finite game is life hitting you in the face.
1:49:59
But then what happens next?
1:50:01
You'll sit back, let that boundary dissolve, expand your horizons and say, "All right, what else is out there in the universe?
1:50:07
What else is out there beyond the scope of this game that I was just in, that I can pay attention to a," I don't know, "new fixed point that I can sort of latch onto and create a whole new game around?"
1:50:18
That's how you continue the game, right?
1:50:20
The way to do this is to let go standards.
1:50:22
The way to do this is to appreciate that mediocrity is the key, which is when you're in any given finite game, you don't go all out.
1:50:31
You reserve a part of sort of your human potential for just paying attention to peripheral vision, the world outside the little particular game you happen to be playing.
1:50:41
Of course you play it sincerely.
1:50:43
And ironically, you do right by commitments you've made to other people.
1:50:47
If you say you're going to do a job and other people are depending on you to do that, you do that.
1:50:51
So I'm not saying cut your standards in the sense of being unethical or unreliable or anything like that.
1:50:57
I'm saying maintain a reserve of who you are, your thinking, and devote it to the infinite universe beyond the particular game you happen to be playing.
1:51:06
That looks, from the context of the game, kind of like mediocrity.
1:51:10
It kind of looks like you're not willing to go 110% and hustle and go all out and stuff like that.
1:51:16
It looks like, at some level, a part of you is philosophically checked out because it's curious about the rest of the universe.
1:51:22
It's not checked out because you're lazy or lack courage or insufficiently committed.
1:51:26
You're checked out because you're bigger than the particular thing you happen to be doing right now.
1:51:32
You're a larger being that has a bigger faith in your life, and you want to reserve a part of your attention to that.
1:51:39
And there's a strong evolutionary logic to that.
1:51:41
You look at how evolutionary processes work.
1:51:44
Like our jaw, for example.
1:51:46
Why can we speak and hear? Why do we have ears?
1:51:49
The little bones in our ears that enable us to hear, they were actually once fused into part of the skull.
1:51:55
So the species that can't vocalize or hear or do complex kinds of auditory processing, they have surplus bone material.
1:52:04
And evolution worked by taking that surplus and then eventually in a different use circumstance, creating these three little small bones and the balance channel, and then we got these mammals that could hear and have a sense of balance and things like that.
1:52:18
So evolution used the untapped potential of reserved material.
1:52:22
So you could say in a previous world where we had thicker jaws and the inability to hear very well, the job of having thick jaws was an evidence of doing that job in a mediocre way.
1:52:35
You were not optimizing the jaw for the life you were living then, you were leaving some reserve that was available for evolving in new context.
1:52:43
I think that evolutionary logic should be brought to your thinking.
1:52:45
It's like, "Hold back, be mediocre, lower your standards.
1:52:49
Keep some reserves and surpluses so that you can," I don't know, "have infinite horizons.
1:52:54
And whenever a particular finite game ends in whichever way, either with victory or loss, you can then continue the game.
1:53:00
You're not at a loss and you're not in this nihilistic pit of despair."
1:53:03
This is why success can be so tragic for people who've been overcommitted to it.
1:53:07
It's like you've actually won and you're acting devastated and destroyed, like the meaning of your life has been rugged from you.
1:53:16
The rug has been pulled out from under your feet.
1:53:19
That's because you overcommitted.
1:53:20
You had too high of a standard.
1:53:22
So yeah, that's my hack, be mediocre, lower your standards.
1:53:25
That's how you play the game.
1:53:27
Jim O’Shaughnessy: I absolutely adore that.
1:53:32
That seems like a great segue.
1:53:33
I'm looking, we're already two hours in.
1:53:36
I could talk to you the rest of the day, but sadly, I have other things that I have to do, as does Ed.
1:53:42
This has been absolutely wonderful, so thank you for taking the time.
1:53:48
I love the way you look at the world.
1:53:50
And I also love the be mediocre, because there's so many different levels to that and what you really mean by that, and I think it's fantastic.
1:54:06
One of the things we do at the end of every podcast is we wave a wand and we create you as the emperor of the world for just a moment.
1:54:15
You can't put anyone in a reeducation camp and you can't kill anyone, but we're going to hand you a magic microphone into which you can speak two things.
1:54:28
The effect will be every sentient being...
1:54:32
Let's not limit it to humans.
1:54:33
Every sentient being that can actually act on it, that happens to be on this planet, will wake up the next day and think that they thought up these two ideas and they're going to act on both of them.
1:54:46
What are you going to incept in the population of the world?
1:54:51
Venkatesh Rao: That's a powerful magic wand there.
1:54:52
One I think immediately pops to mind is a favorite philosophical idea I came up with, which I call divergentism, which is that people, as they grow and age, fundamentally diverge from each other in thought space, and that's okay.
1:55:12
So the part I would incept is it's okay to not be understood, because that's what happens when you diverge from other people.
1:55:19
It's like people don't understand you as well, and you don't understand them as well.
1:55:23
So I would say the compact form of the thought is it's okay to not be understood and to not understand other people.
1:55:30
It's the sort of secret sauce of divergentism, and I would love people to wake up with that thought and sort of act on it. The other thought...
1:55:38
Yeah, I don't have an immediately obvious second best candidate there, but quite possibly it would be this idea of fixed point futurism, but a specific instantiation of that.
1:55:51
All these eight billion people of the world would wake up with one specific, arbitrary, irrational thing they're fixated on.
1:55:59
So you might wake up wanting to wear blue shirts the rest of your life.
1:56:03
Ed might want to wake up, I don't know, wearing red shirts the rest of his life.
1:56:06
I don't know what it is, but I would like eight billion weird, new, arbitrary ideas to be implanted in people's heads that are just arbitrary things they're going to make true in the world. Those are my two things.
1:56:17
Jim O’Shaughnessy: I love it. I love it. This has been fantastic.
1:56:21
We'd love to have you back on, because we did just touch the very surface of your great thinking and ideas.
1:56:30
Where can people find you?
1:56:31
I know where you are, but some of our listeners might not.
1:56:34
Venkatesh Rao: Yeah, my main blog is ribbonfarm.
1:56:34
com, and I also have a Substack newsletter, studio. ribbonfarm. com.
1:56:41
You can sort of find my basic biographical information and sort of my one spot landing spot at venkateshrao. com.
1:56:50
And I used to be super active on Twitter, but I've kind of locked my account and tailed off there.
1:56:56
But I am really active on Farcaster, which is a blockchain-based Twitter-like thing.
1:57:00
So you can find me at Farcaster, @vgr.
1:57:02
Jim O’Shaughnessy: Perfect. Thank you so much. This was so much fun. It's one of the great...
1:57:09
And by the way, this podcast, totally random.
1:57:13
[inaudible] worked for me, came into my office and he goes, "Jim, you really have to have a podcast."
1:57:20
And I looked at him and I said, "Why? No."
1:57:26
And then finally, I made a deal with him.
1:57:27
It was like, "Okay, you do everything.
1:57:30
You line up all the guests, you do all the editing, and I'll do it for five sessions."
1:57:36
Out of that came a lot of fun and my ability to chat with fascinating, brilliant people like you.
1:57:44
So thank you for your time. I truly appreciate it.
1:57:47
Venkatesh Rao: Thanks for having me again. Ed William: Thank you.
1:57:50
Jim O’Shaughnessy: Cheers.