Economic Truth

Popular opinion: platitude

Popular fact: triviality

Unpopular opinion: heresy

Unpopular fact: innovation

Why do we need consensus on what can be measured? Why does this have to be decentralized? Having a base of undeniable truth to realign society around is super interesting. Here’s why.

The first observation is: facts matter. Then the second-order observation is: facts may not matter, because if facts are just narratives told by competing tribes, then facts don’t matter at all.

But the third-order observation is: facts really do matter because a narrative based on facts will, in the medium- to long-term, have more favorable contact with reality and therefore more technological and economic strength.

That last bit is critical. The reason the US eventually beat the Soviet Union is because communism required more lies. The Soviet Union had to make up factory production numbers because they didn’t have prices, so supply chains didn’t work, which meant factories didn’t produce.

Holy lies, like the ones that animated the Soviet Regime, unfortunately work surprisingly well in the short term because you can bully or trick people into conforming with them. But in the medium- to long-term, they don’t work. Your machines don’t work, and your people don’t work. You become poorer as a society. You’re screaming these holy lies, but it doesn’t matter because other societies who found real truths have exceeded you technologically and economically. That’s why finding truths in a decentralized environment is important.

More verifiable economic information enables more complex economic alignment.

Financial decision-makers will always care about truth. And crypto is turning the world into investors, just like the internet turned the world into publishers. Whether you have the scientific or historical evidence to prove a truth does not matter if people do not have an economic incentive for evaluating and then spreading that truth.

Even inside a company when gathering feedback for a company decision, collecting predictions rather than just doing a poll can be useful. Predictions can be aggregated like votes but also disaggregated for individual accountability. The individual accountability of a prediction is critical. It gives people an incentive to be correct even if unpopular. Most people evaluate whether something is really true or false only when they stand to win or lose money.

Unpopular truth is a reliable source of profit. Behind every great fortune is a great thoughtcrime.