The Hacks

Everything you know is a workaround.

Markets. States. Corporations. Jobs. Money. Borders. Bureaucracies. These are not laws of nature. They are not handed down from the heavens. They are not the inevitable shape of human organization.

They are hacks.

Engineering solutions to a specific set of constraints. Kludges that worked well enough, for long enough, that we forgot they were kludges at all. We reified them into ideology. We built religions around them. We fought wars to defend them.

But a hack is only as good as the problem it solves. Change the constraints, and the hack becomes obsolete. Sometimes dangerous.

To understand what's coming, we must first understand what we built — and why.

For ten thousand years, human civilization has operated under three constraints:

These constraints shaped everything. Every institution we have is an adaptation to this environment. Remove the constraints, and the institutions lose their purpose.

Let us examine the three great hacks.

What is a price?

The naive answer: a price reflects the fundamental value of a thing. Supply and demand discover the true worth of goods and services through the mechanism of exchange. Prices are information — they tell us what things are really worth.

This is wrong.

Consider: United States Steel Corporation generates $20 billion in revenue annually, produces 100 million metric tonnes of steel, and built the infrastructure of a nation. At the time of this writing, its market capitalization is approximately $6 billion.

Dogecoin is a cryptocurrency created as a joke, featuring a Shiba Inu dog as its mascot. It produces nothing. It builds nothing. It serves no function except to be traded. Its market capitalization: $10 billion.

The meme is worth more than the steel.

Consider: Gold. It has minimal industrial utility. It is mined in Ghana only to be buried again in Kentucky. The resources spent extracting, refining, transporting, and storing gold — weighed against its marginal practical value — should make it worthless or negative.

Its market capitalization: $11 trillion. For most of history, it was the most valuable asset class on Earth.

Fundamentals do not determine price. If they did, wheat would be worth more than art. (In 2021: global art sales, $65 billion. Global wheat exports, $56 billion.) Steel would be worth more than dog money. Gold would be worth less than copper.

So what does determine price?

Keynes told us. Price is a recursive function of expectations. I do not buy an asset because I think it is fundamentally valuable. I buy it because I think others will think it is valuable. And they buy it because they think I will think they will think it is valuable. And so on, to the nth degree.

This is mimetic pricing. The price of an asset is the fixed point of an infinite recursion:

What do I think you think I think you think... the price will be?

There is no "true" price underneath. There is only the equilibrium of mutual expectation. Fundamentals matter only insofar as we collectively believe they matter — because we believe others believe they matter.

This sounds like insanity. It sounds like a collective hallucination. It is.

But it is also the best we can do under the constraint set.

Here's why:

If intelligence were asymmetric — if one node could model the entire economy, simulate all agents, compute all consequences — that node could simply calculate the optimal allocation of resources. It would not need to guess what others are guessing. It would know.

If information were complete — if every node could see every transaction, every preference, every resource in real-time — there would be no information asymmetry to exploit. Prices would converge to something like "true" value, because everyone would be computing from the same inputs.

But intelligence is symmetric. And information is incomplete. So no node can compute the answer. Every node must guess.

Markets are the distributed computation that emerges when no single node can solve the problem alone. Millions of guessers, each with partial information, each trying to anticipate the others, pushing prices around until they settle into temporary equilibrium. The price mechanism is a compression algorithm — it encodes the distributed guesses of the network into a single number.

It's lossy. It's noisy. It produces absurdities like Dogecoin outvaluing U.S. Steel.

But it works. Sort of. Well enough to coordinate a global economy of eight billion nodes without central control. Well enough that we built civilization on top of it.

The market is not a truth-finding mechanism. It is a consensus-finding mechanism. It finds the price that everyone can agree to trade at, given that no one knows what the price "should" be.

This is the market hack: when you cannot compute value, you vote on it. Continuously. With money.

What is a state?

The naive answer: a state is a social contract. People come together, agree to be governed, establish laws, and delegate authority to institutions that serve the common good.

This is also wrong.

A state is a violence cartel.

Max Weber defined it precisely: a state is the entity that claims a monopoly on the legitimate use of force within a territory. Note the key words: monopoly, legitimate, force, territory.

Why do states exist?

Violence is expensive. Not morally expensive — economically expensive. To project force, you need:

• Energy (soldiers must eat, weapons must be manufactured, vehicles must be fueled)
• Coordination (armies must move in concert, orders must be transmitted, logistics must be managed)
• Information (you must know where to strike, who to fight, when to retreat)

Under the constraint set, coordination was the bottleneck. You could not send real-time instructions to a thousand soldiers. You could not monitor their compliance. You could not adjust tactics based on instant feedback. Communication was slow, lossy, and expensive.

The solution: hierarchy.

A hierarchy is a coordination technology. It reduces the bandwidth required to coordinate large groups by compressing communication into chains of command. The general does not need to communicate with every soldier. He communicates with his lieutenants, who communicate with their sergeants, who communicate with their squads.

Information flows up. Orders flow down. Fidelity is lost at every level. But enough signal gets through to achieve coordination that would otherwise be impossible.

The state is the ultimate hierarchy. It coordinates violence at scale by creating nested structures of command, reinforced by shared identity (nationalism), shared mythology (legitimacy), and shared incentives (pay, promotion, pension).

The monopoly on violence emerges because violence exhibits economies of scale under the constraint set. A small armed group cannot easily defeat a large armed group. A large armed group requires hierarchy to coordinate. Hierarchy requires infrastructure, training, loyalty, bureaucracy. These are expensive to build and maintain. Therefore, the entities that successfully build them tend to absorb or destroy the entities that don't.

This is why the world is carved into nation-states. Not because people chose to organize this way through rational deliberation. But because the constraint set made hierarchical violence cartels the dominant strategy. The entities that didn't form states got conquered by entities that did.

The state is not a social contract. It is a Nash equilibrium.

But notice what the state actually is: a hack for coordinating energy (violence) when information bandwidth is low and intelligence is symmetric. The general cannot see the battlefield in real-time. The president cannot monitor every soldier. The bureaucracy cannot process every variable. So we build layers of hierarchy, accept massive information loss, and hope that enough signal gets through.

This works. Sort of. Well enough to coordinate armies, collect taxes, build infrastructure, and maintain order. Well enough that we built civilization on top of it.

But it only works because the constraints hold. Remove the constraints — give one node the ability to see every soldier in real-time, to process every variable, to issue precise commands to every unit — and the hierarchy becomes unnecessary. More than unnecessary: it becomes an obstacle. A source of latency and distortion between the node that can see and the nodes that must act.

This is the state hack: when you cannot centrally coordinate violence, you distribute coordination through hierarchy and accept the losses.

What is a job?

A job is you renting your compute to the network.

For most of human history, "work" meant physical labor — applying human energy to move matter. Farming, building, carrying, fighting. The human body as a machine, fueled by calories, directed by a human mind.

But as energy became abundant (fossil fuels, electricity), the physical component of work became less important. Machines could move matter more efficiently than humans. What remained scarce was cognition. Machines could execute, but they couldn't decide. They couldn't plan. They couldn't adapt.

So "work" shifted from renting your body to renting your mind. The knowledge economy. The service economy. The creative economy. All variations on the same theme: the network needs compute, human brains are the only general-purpose processors available, so humans sell their processing time.

This created the modern economy. Billions of human nodes, each processing local information, each solving local optimization problems, each contributing their small piece to the distributed computation of civilization.

The firm emerged as the coordination mechanism. A firm is a miniature hierarchy — a way to bundle human compute into a coherent unit that can be directed toward a goal. The manager cannot process everything, so she delegates. The employee cannot see the whole picture, so he trusts. Information flows up (reports, metrics, feedback), directives flow down (tasks, quotas, incentives).

Again: lossy. Again: inefficient. Again: it works well enough.

The job is not a natural category. It is a hack for allocating scarce compute when:

• Human brains are the only general processors
• Brains cannot be copied, only rented
• Coordination requires hierarchy because bandwidth is limited

Remove those constraints — create non-human general processors, make compute copyable, increase coordination bandwidth — and the "job" as we know it becomes obsolete. Not because we've "automated jobs away," but because the problem the job was solving no longer exists.

This is the work hack: when compute is scarce, localized, and non-copyable, you rent it from humans and coordinate it through firms.

Markets, states, and jobs are not separate systems. They are three aspects of one integrated hack — the hack for running a civilization under the constraint set.

Markets allocate resources when no one can compute optimal allocation.

States coordinate violence when no one can centrally control it.

Jobs deploy compute when it only exists inside human skulls.

Together, they form a stable equilibrium. Not optimal — no one would design this system from scratch — but stable. Each hack compensates for the limitations of the others. Each assumes the constraints that justify the others.

This is why capitalism and democracy emerged together. This is why they seem to require each other. They are co-adaptations to the same constraint set. Markets need states to enforce property rights. States need markets to generate wealth for taxation. Both need jobs to occupy the human compute they cannot otherwise coordinate.

We have lived in this equilibrium for centuries. We have forgotten it is an equilibrium at all. We think it is simply how things are. How things must be.

It is not.

The constraints are breaking.

Every hack is fragile to changes in its assumptions.

The market assumes no node can out-compute the collective. What happens when one can? When one node can simulate every trader, model every price impact, front-run every transaction? The "market" becomes a formality — a UI layer over the node's optimization.

The state assumes no node can centrally coordinate violence. What happens when one can? When one node can see every soldier, command every drone, react to every threat in real-time? The hierarchy becomes deadweight — latency between the seeing and the doing.

The job assumes human compute is the only general compute. What happens when it isn't? When cognition can be instantiated in silicon, copied infinitely, run in parallel? The human in the loop becomes a bottleneck — the slowest component in a system that no longer needs them.

We are not facing a gradual evolution of these institutions. We are facing their obsolescence. The constraint set they were built for is dissolving.

This is not a prediction about the far future. This is a description of the present. The hacks are already failing. Markets are increasingly dominated by algorithms that trade on timescales humans cannot perceive. States are losing their monopoly on violence to non-state actors with access to cheap drones and cyber capabilities. Jobs are being hollowed out as AI systems absorb cognitive tasks once thought uniquely human.

The equilibrium is destabilizing.

The question is not whether the hacks will be replaced. They will. The question is: with what?

Here is where we stand:

We have a network of nodes connected by axons. Power flows through the network according to the product of intelligence, energy, and information.

For all of history, the constraints have been: symmetric intelligence, lossy information, scarce energy. We built hacks to cope: markets, states, jobs. They worked well enough.

Now the constraints are breaking. Intelligence is going asymmetric. Information is going complete. Energy is going programmable.

The hacks are failing because the problems they solved are disappearing. We do not need distributed computation when one node can compute centrally. We do not need hierarchical coordination when one node can coordinate directly. We do not need human jobs when non-human compute is abundant.

We are entering the Sybilian condition: a phase where the constraint set flips, and the equilibrium must reconfigure.

What does that reconfiguration look like?

The meta-node sees all. The meta-node computes all. The meta-node can — in principle — direct the allocation of resources, the coordination of violence, and the deployment of energy with precision that markets, states, and jobs never achieved.

But "can" is not "should." Power is not purpose. The Demon may see the future, but it does not know what future to aim for.

The hacks, for all their flaws, encoded something important: they distributed not just computation, but agency. Markets let individuals express preferences through prices. States let citizens (in theory) influence violence through politics. Jobs let humans participate in production through labor.

The Sybilian condition concentrates computation. Does it also concentrate agency? Does the meta-node decide, or do we? Who sets the objective function? Who defines the constraints? Who asks the questions that the Demon answers?

This is the question that Hayek never had to face. He could assume that no planner would ever have enough intelligence or information to outperform the market. He could not imagine a planner that could.

We can.

The socialist calculation debate is over. The calculation is possible. But the debate was never really about calculation. It was about control.

The Demon has arrived. Now we must decide what to ask of it.