The Great Simplification with Nate Hagens - Optionality Collapse: We're Investing in a Future That Won't Exist with Indy Johar

Episode Date: October 14, 2026

 Traditional financial management tells us that, if we invest right, we'll be able to retire and sink into a future of comfort and stability – and even pass on your wealth to your children and grandchildren. But this vision is built on an anomalous period of stability in which climate, energy resources, and labor markets were all predictable. As ecological breakdown, resource conflict, and AI-driven labor disruption begin to feed into one another, that predictability is slipping away. How can we better position hundreds of trillions of dollars in claims on the future to withstand uncertainty in the increasingly volatile world ahead? In this episode, Nate welcomes back Indy Johar, co-founder of Dark Matter Labs, for an exploration of how coupled systemic risks are reshaping capital, institutions, and what it means to invest for the future. Indy explains why most financial forecasting – built on linear, siloed models – misses the compounding, coupled crises we will have to face, and argues that "civilizational optionality" is diminishing, threatening the value of our claims on the future (money). Indy presents the Civilizational Optionality Fund as a way to protect these claims, while also increasing the ability of societies to adapt, mitigate, and respond to crises from various directions. Indy and Nate also discuss their deeper philosophies about humanity, emphasizing doubt and humility as critical mentalities for anyone attempting to navigate a future that will look very different from the past.  How much money is currently being saved for a future that isn't even available to buy? How might a "civilizational Sharpe ratio" – one that weighs returns against systemic volatility – change the way wealth is allocated, and broaden how we measure the capital returns? And if moments of crisis are when cultural narratives shift, what can each of us do now to cultivate the ideas, relationships, and courage needed to meet them? (Conversation recorded on September 23rd, 2026)    About Indy Johar:  Indy Johar is the co-founder of DarkMatterLabs, where he is currently building a stealth initiative to expand civilizational optionality. He is a professor at RMIT University, and the Executive Director of Project 00. An architect by training, he is also Non-Executive Director of the WikiHouse Foundation and Bloxhub, as well as a Vision Keeper at The Collaborative for Systemic Climate action. He writes frequently on his Substack.   Show Notes and More   Watch this video episode on YouTube   Want to learn the broad overview of The Great Simplification in 30 minutes? Watch our Animated Movie.   ---   Support The Institute for the Study of Energy and Our Future   Join our Substack newsletter   Join our Hylo channel and connect with other listeners

not inviting you to be kind, I'm just inviting you to be smart right now. I think we're looking at a 2028, 2029 disruption where these crises come into apex. As a steward of claims on the future, which is what money is, it is incumbent on you to understand the optionality collapse that your claims on the future are facing. There's a different theory of portfolio where actually those are not just managing risks, we're acting in a virtuous framework. So those options are working progressively to actually create a greater value than any one of those options.

Our role is to put the kind of conduits of resource and claims into these positions and with audacious energy. This is a courageous invitation. And I think the courage invites us to be more human than anything else. You're listening to The Great Simplification. I'm Nate Higgins. On this show we describe how energy the economy, the environment and human behavior all fit together and what it might mean for our future.

By sharing insights from global thinkers, we hope to inform and inspire more humans to play emergent roles in the coming great simplification. Today I'm very pleased to welcome back Indy Johar to the program for an exploration on how we might rebuild and adapt our land, our institutions, and our capital markets to expand the number of better possible futures for humanity, or as he calls it, civilizational optionality. Indy Johar is an architect and co-founder of Project Double Zero. He is also a professor at RMIT University, as well as a non-executive director of Wiki House Foundation and Blocks Hub. Most recently, Indy founded Dark Matter Labs,

a field laboratory focused on building the institutional infrastructure for radical civics of societies, cities, regions, and towns. This was one of the best conversations I have had on this platform. It was in New York City during Climate Week. I was exhausted going into this interview, but something about Indy's energy and his ideas pulled the best. out of me and perhaps that created some two-way synergy. We talked about the importance of financial markets, seeing the dead-end aspects of our current path and about humanity becoming self-aware

and about our moment in history. When I talk about emergence, this conversation is an example of that. I do expect it's for some going to be pretty academic and fancy concepts, But the implications of what we talked about here, in my opinion, are one of the few pathways forward for humanity and the biosphere. What a great dude.

Please welcome Indy Johar. Indy Johar. Namaste. Welcome back. Are you the call so? I'm delighted to be here. At the end of our last conversation, and I think we've had a Zoom call, you told me that the biggest central question of our time is,

what does it mean to be human? There's no greater question. Now, what does it mean to be human at this time? We kind of left off there, and I'm wondering what you've reflected on and where you've arrived with that question. Perfect. Let's start with the simple questions, I think. I think that question for me is a systemic not.

And actually, I think the worlds that you and I and I and many others talk about. So at a kind of philosophical level, I think, are subject-object separation from the world and our distancing, our birth of perspective, our birth of object and noun-orientated worldviews, our separation, which gave birth to many things, science and art separating chemistry, the kind of atomisation of the worldview,

actually is also the part which allows that distancing for it to be dominion, for separation to turn into dominion, for separation to turn into externality. I think we're living at the apex of that problem as how we understand ourselves. So that's why it's called the deep problem of the future of being human. Then there is a narrow problem of the future of being human. So if you take that logic chain and you marry that with effectively,

I think what we're about to see is the disruption of two key aspects of being human, humans as units of labour and humans as units of cognition. those two disruptions when you marry those with an atomized individuated self and I think those two disruptions from the economy as it's currently framed the commodity theory of being human in terms of cognition and in terms of labor I think we enter a systemic crisis a crisis which start where the economy starts to export people and de-expunge them from itself

and in that process, as humans become, in our current unitized labor form, become outside the economy, I think we will create the pathway of war. Now, I think my biggest change has been that I used to think that the disruption of, say, climate breakdown, which I think is going to be significant, would be in advance of this. I think we're looking at a 2028, 2029 disruption where these crises come into apex. And that will lay out the pathway for effectively conflict within nations as nations start to remove people from themselves

to preserve the kind of economics of the nation. And in that process, set up the pathway to war. And I think the war scenario and the conflict scenario cascades us into, in my view, a non-retrievable position. Because I think once we enter significant war where trauma is introduced into the intersociety at such scale, and the unit cost of wars has reduced to such small components, when actually someone with someone who's been psychologically traumatized is basically 129 IQ points, has CRISPR technology, has the capacity to do things of a horrific scale that we've never imagined.

At that intersection, we're in trouble. So in a weird way, one of the things that's happened over the last time we spoke is that apex problem, I think, is now absolutely the nail problem where it sits at the kind of psychological basis and the fundamental basis of our landscape of externalization. But it also now sits at a fundamental basis where we are going to create that crisis. Now, what I think that means is that there's a massive systemic opportunity in how we redefine the future of being human. we need frontier labs in the future of being human as a key anchor point, both to give capacity to redefine that future and to reimagine that future, but also to give a North star in that transition. I have so many questions because you've just summarized and distilled how I'm actually

thinking about this in better words and a better accent. But let me stay here just for a moment before we get into the civilizational financial risk. what does it mean to be human? How is that question different than what does it mean to be humanity? Because you talked about the cognitive and the labor, like, is there a third option that humans could be units of regeneration? And I've been very focused recently on distinguishing between the individual human and our attributes and how the emergent property is of billions of us acting together. So would you give a distinction to those two questions? Yeah, so I think there's multiple trajectories and they are all important. Weird enough, this is where I think where I've ended up is the idea of consciousness,

the act of being conscious actually might be a fundamental component beyond cognition and labor. and I think that space does both things. It effectively invites an idea of entanglement as well as dealing with a fundamentally different way of seeing the world. And I would argue that there is, you know, it's people like Roger Pemrose and what he has been saying, I think there's a whole space space. there. Now, I want to leave it as space because everything I'll say will be far too

conjectured and far too easy to dismantle at this moment in time, I would argue. But I think there's something absolutely critical there. When I say that, let's put that in reference to the quantum of money that's going after AI. And there's a reason for this, I think. I think the capital that is making claims on AI is not made it's justified by the disruption of labor and I use the word justified

but it's not the search I would argue that the capital that's hunting at the center of AGI or recursive intelligence is hunting and I'm going to use a sort of a language

touching a mirror of God touching the mirror of God. Now the reason why I use this is I would say that large language models and the transformers are what they're doing is they're taking fragments of consciousness, metamorphosize abstracted into language, and language itself is an abstraction of that consciousness. That is then being computed to the point of constructing a manifold, a sort of a higher dimensional manifold, space. That manifold space is what the search is for. And from my understanding is multiple models are reaching and forming at the same geometric shape. And that, I would argue, is a kind of a higher

dimensional cognition space. I use the word God entirely to be evocative, but you could interpose other things. It's some civilizational emergent consciousness. this behavior that we don't know. I leave that open to us, but I use it largely for the evocative power. And I think the best example is that is what the search is for. It reminds me, and the best example I've heard is it's a moment of allocating capital in alchemy. In the middle centuries, in the middle ages, the search, the allocation of capital went into alchemy, gave birth to chemistry. Money is not moving in the old commodity theory of value. It is moving in a completely different theory of where value lies. And why I say that is that if you put that into counterposition with what is a

frontier lab on human consciousness, and not just human, more than human consciousness of things, I think there's a whole world that starts to emerge. What I'm saying with you here is like at the edges of my knowledge. But I think the reason why I'm saying them is because I think they're existentially critical now. Because if we don't make some of these moves, we're about to displace

ourselves in partial cognition and partial awareness of what we're displacing. And I think then to round on your point, which I think is phenomenally important, which is the 1968 picture and sort of of an astronaut taking a picture of the

earth was not an astronaut taking a picture of the earth. In the long arc of planetary becomings, that was the planet becoming self-aware. It was able to perceive itself. James Lovelock put this line down. And I think so, I think that is an extraordinary thing if you think about it through that lens. So when you marry these three things together, you start to see a completely different arc of what is possible. And I think part of the problem is that our theory of machines and our theory of machines

is rooted in such low fidelity industrial ideas. And they're rooted in the objectness of being human. And so the objectness and certainty of the systems as well. So there's something, there's a, there is a very emergent critical deep code issue right now somewhere here. And I'm saying this with deep invitation for people way smarter than me to actually start filling in the holds, but I think this is critical and civilizational critical. If we're not directing money towards a theory of commodity value, but we are kind of headed in this direction of the mirror of God, it's also headed in the

direction of there be dragons because there's a lot of risk and unknowns there. And it's like all the money in the world is based on our GDP as our goal and more stuff and abundance. And it's heading off a cliff in many ways. And so there is a lot of hyper-intelligence as an aggregation in the markets, and there's also the madness of crowds and the delusion of where we're headed. Can you speak to that for a second?

So civilization in this round, 12,000 years, was largely a function of a climatic predictable period. The predictability thereby gave a... to institutional frameworks of operating in knowledge systems of prediction. Our whole institutional framework has been built. Farming is just the byproduct of an institutional framework built on predictability. Our civilization has been built on this theory. The challenge we're facing is we are, I think, on the macro level,

moving outside those zones of predictability at the climate. sense, but also we're now fundamentally moving outside the predictability in terms of our demographics, our energy supply, all of this infrastructure is now winding into a period of systemic volatility. So our entire financial system, our institutions, our expectations, our prices, our incentives were based on an unbelievably stable period of history, both ecologically, because we have more energy every single year, that's been stable as well. And demographics. And demographics as well.

I would argue that most of our financial accrual of wealth has been built on that predictability and the exploitation of that predictability. And so the problem is that all of our theories of alpha, they don't exist. I think they've already gone. We just don't know it. And so when I sit in rooms and people talk about product replacements, replacing one thing with another. And I'm like, well, what I don't yet understand is if we have a major labor cognition collapse, we don't necessarily have the value of the labor distribution

in the economy. So the demand collapses simultaneously very quickly and violence kicks off. So all these predictions of copper and the need for copper, really? Is that how the cycle works? And again, my number one thing is we're literally working on how these systems couple and model together because they're not linear predictable systems. And all the projections I see are linear separated systems. Whereas what

we're seeing is these systems are now started to couple in ways that were unforeseen. The volatility is not only coupling, but it's also feedbacking on itself. So all the worldview as you look into it, and if you're a capital allocator,

if you're not seeing this, and I challenge any want to build their own world view on this. Build your own worldview. But if you're not seeing this, I don't know how fiduciary duty is being fulfilled. How many are seeing it or even suspecting it? Privately individuals are. I think the challenges, and this is where I think family officers have a strategic advantage because they're unencumbered capital. Coded capital, I think, is unfortunately in the worst position. Well, I don't know what that means. Funds, pre-structured funds, funds which have a particular remit, the capital has been coded, probably five years in advance or 20 years in advance.

So it cannot be able to be agile. I think all the theories of market-based returns, markets, which markets, which backward-facing worldview, all of these norms that we've been relying on, the fundamentals we've been relying on in the financial system of becoming fragile or non-real. And that really opens up a really much more difficult question. So it requires what I'd call genuine thinkers, genuine first-principle thinkers, to engage this problem space. And I think there's a completely different world emerging in that.

And what I find problematic is people are trying to see this stuff in separation. They're trying to see it. You know, I was yesterday in a private equity room and somebody was talking about copper demand. And I was like, okay, just tell me where your underlines are coming from. Because I don't, I think we collapse the demand at a much more different level. And that changes the dynamics of the whole system because we may go to war. the war may create the copper demand, but it won't be the traditional consumer supply. Let me double click on something you said before.

You mentioned alpha, and I think there's two aspects of that that I'm curious about. One is to a planet that is only recently becoming self-aware, what is the alpha that we should be measuring? That's one question. And second, the narrow boundary alpha that we're currently optimizing for, if you take the future and condense it to today in a net present value of all these different coupled scenarios as you say it doesn't make sense to the to the alpha that people expect based on the historical stability so i recently had a french biologist on olivia hamont who said humanity is leaving the era of the mean and headed into the ear of the standard deviation which rhymes with

what you're saying so can you unpack this for people who have financial acumen and are thinking about the world in a historically linear way that what's happened in the past is going to continue to happen in the future, only shinier. Break this down and how does this apply to your current work? I think the first dimension of that conversation is just biophysical reality. I think my biggest worry is there's a kind of lack of comprehension of actually the scale of the biophysical degradation we're in the middle of. So if you had Sir David King in the room, he would turn around very cleanly and say,

well, look, we've already pumped up enough carbon in the air to effectively be in a situation where we're going to have to stabilize the Arctic. And if we don't, we have four and a half metres rise of sea level. So in that scenario, just the residential value of London, there are 3.8 million residential apartments and homes. Average price is 668,000 pounds. That's 2.52 trillion just in London alone. So the first things that I think people are misunderstanding is we're no longer in minor impairments and adjustments.

Yeah. Right. So it's not that future. We've already leapfrogged that. Second thing, we're working in one bioregion in, in, uh, in northern Spain, what you start to realize is that we've got a regressive coupling of systems starting to happen, where runaway monocultural forests, which were used for charcoal production, have now dried the soil to the point where the soil in the mycelium has died.

It's a monoculture effectively. The fauna has been killed off by hunting and other game theory games. and built on that, what you've got now is the white clouds that used to come for the Mediterranean because the forests aren't releasing moisture are rising above and sailing past. So that landscape is now in a self-drying environment. When it does rain in winter, it does, the ground is so compacted so it flushes away all the nutrients. Because the fauna isn't coming into that environment, the micronutrients aren't coming, so you've got a collapse of effectively the mycelium infrastructure and the nutrient base.

The depopulation means that people don't care because people aren't embedded in the environment and the demographics to care aren't there. When you start coupling these systems as they're now coupling regressively, we are now in a moment of bioregional regime shifts of desertification and abandonment in parts of the system because these systems are coupling in this way. So I think the number one thing I'm finding is that our knowledge is single systems oriented. It's not system coupled effects.

And that I think means that if you're not aware of the coupling risks, you're not cognizant as to what that does. Land value is now 1,500 per hectare in that environment. The total liabilities of fire and other things are 20,000. So the economics is collapsing fundamentally as we see it. And those are just two scenarios that start to see. And then you know, you know, food systems collapse in terms of actually we're about to see a major event now probably between end of 20206 and 27, driven by super alineo effect and the straits of immerse. And those two environments are going to collide in terms of a nutrition risk.

The problem is not just nutrition. The problem is the pass-through where inequality, as these, as you get these, as you get these. these moments, what you'll see is a whiplash effect. And the whiplash effect on price will mean inequality will shoot up. Because it's not about an even distribution. It's what this does to systems. And systems, appra and financial systems will accelerate that. That whiplash effect will massively drive inequality. That inequality will make the social contract fragile and weaponizable. Note, the endpoint is the weaponizability of that fragile social contract, which means the incentives for war and conflict massively.

accelerate in a resource-consensate environment. That as a finance, as an investor, we need to start to see what that's looking like. Well, let me pay devil's advocate. AI is going to solve all this, Indy. I want to think through that lens with you, right? So you know when Eric Schmidt turned around and said, we're going to solve for AGI and then we're going to deal with climate change? And all the left laughed. You're like, why, you're joking. Oh, what are you idiot? For a moment, let's just reverse engineer what he was saying. This is how I think he was saying it. He was saying it on the basis that whoever gets recursive intelligence will have the pathway of holding freedom.

The choice of holding freedom, whether they choose it or not is another question. But whoever gets it will have the choice of freedom. So it is an existential idea to the idea of an agent. say, if you have the capacity to reach for it. If you then root AGI on that basis and you start valuing it on the disruption of labour, you start to say very quickly, well, we need to remove X million people from a society to preserve the social contract instability long enough, because they become surplus to the labour utility. If you then couple that, with the energy demand that it drives.

So in our societies, we have flat demographics or declining demographics, which means and historically energy demand was falling. What this does is drive a super cycle of energy demand, which brings unprecedented investment into energy innovation that has been missing for perhaps 20 years. If you bring energy unit cost of energy down to near zero,

that's the conjecture. you have good reasons for why that's not possible but let's look at it if you can bring it down to near zero you can do desalination and you can do carbon sequestation because carbon sequestation is a one-to-one function of energy as is desalination if that's clear then you can do nutrition because vertical farming is directly a function of energy so if you look at that civilizational stack and I particularly name it as a civilizational stack as a worldview. You've got a disruption of labor. You've got compute and automation driving a super cycle of energy to drive unprecedented investment in energy to drive desalination and decarbonization. At the same time, whichever agent gets that stack has been

simultaneously benefiting for the volatility of the world as it's creating hyperstability through that power base. I say this because not obviously because I don't agree with this. That's not so my objective because I also believe that the intelligence that's built by AI is a, is a mirror, and we're missing the fact that it's a it's a verified mirror through abstraction, through language, which means it's not as advanced as conscious, actual human consciousness. It's a partial mirror that's leaning in on the left brain narrow boundary aspect of our phenotype. Precisely. Exactly. And this is why I think a civilization entirely based on that logic. will become problematic.

But if you see, the only reason I want to name this stack is because I want to name it for us to be able to understand what the scale of the play is. Yeah. What are the other strategies and how those other strategies

are actually allocating capital and orchestrating forces? Because I find that my problem is that when I sit in rooms, there isn't the comprehension of what the scale of the civilizational play is, let alone then building the counter positions to say, what are those counter positions,

and what are the other adjacent positions that are critical to that cascade that's being designed? And it's not been designed in the traditional way, by the way. I don't think somebody has a notebook, has written a strategy down. I think what this is an emergent function of actors that are entangled in a shared future with a cascade emergent intelligence form that is self-realizing now. Thank you for unpacking it that way,

because when I've started to do that logical chain that you just did, it's just filled with so many asterisks that I kind of give up, but I understand. So there are a lot of humans, powerful humans, that believe in the story that you just said. Yeah. Probably way more than people that are having this conversation. I think they believe it.

they also believe it, um, it fulfills a narrative like, you know, the earth is, earth is only, um, capable of supporting a billion people. Memes like this. This fulfills the narrative for those means. I want to take a point to just destroy those memes because they are really bad viruses and are cognitive thought. One, it's very clear that a billion people, the problem isn't 7.5 billion people. It's a billion people and it's probably people like me who live the way I do, right?

So we create most of the externalities to which actually we are in problems with. We Westerners. Yeah, Westerners, right? Me, the lifestyles I lead. And I don't think it's just Western. So because I think there's equally problematic living in India, similar formats. It's the lifestyles to which we're. Right, right, right.

Second, it's very clear. My big worry, and I said this earlier, is that if we were to create an environment where 7.5 billion people were lost, the trauma that it would set up, I'm not sure we would would ever stop the violence because of the conflict that would be set up. Three, I think actually we're missing the point. In the long arc of the system, the Earth has stored vast amounts of hydrocarbons, expended those hydrocarbons in giving birth to 8.5 billion human consciousnesses with machine consciousness, with non-human consciousnesses,

as a system. That is the price. The prize that we've in this moment of is an extraordinary moment of expansion of advanced conscious planet. And then I think this opens up a whole different. So if you look at these three scenarios, the prize, and when people often talk about long-termism and the continuity of civilization, and they've reduced long-termism of civilization to our of civilization, to the production of microchips or the production of books, the key artifacts of a civilization and its continuity, I think they miss what the real prize is. The prize was not those. The prize was the capabilities that we've built. And if you were to expand the optionality that it opens up, if we're able to self-reflect in our own awareness to transmogrify ourselves into a new

civilizational play, I think that's the real prize on the table. And I think we're optimizing for lower order prices. So here's a trippy thought. There's a lot of narratives in the news that humans are causing climate change. But what if climate change caused humans? Because you said we had this huge volatility and all of a sudden the Holocene was stable. And humans then via going to space and taking that picture and now these conversations, climate change kicked into motion the consciousness of this planet. And our ability to go from a stable consciousness is required when we operate into volatility,

a new form of meta-intelligence is required. And you're right, this could be a symbiotic transformation of the capabilities of us as species. This is why I genuinely believe the moment we're in is the Fermi paradox moment. It is this tipping point between a civilization which is operating object-form, separational theory to entangle thesis.

and this is the earth becoming self-aware. So I don't sit here with, oh, my God, it's all due. I think that we're in the most extraordinary transformational moment and all these capabilities are coming to play. The challenge is I don't think we're organizing for the vision of the possible right now. And I think there's something extraordinary in this long arc. So talk me through that.

How do we organize for the possible? I trained as an architect, and I was often sort of said, oh, indeed, draw me a picture of this future. And I was like, I found myself always hesitant. because what I don't want to do is colonize our future. And by colonize that, I don't want to trap us in the vision of one person. I think this is an unfurling capacity. What I'm more interested in is how do we unfurl into a different future?

So this is why I use the language of the earth perceiving itself as to be able to shift our frames. I think the brilliant work that's been done by Naya Trust and Hedda and Alexa on a whale, a species nation, right, as an idea. I think it's extraordinary because it transforms, it takes a theory of state, transposes it to beyond human systems, allows us to interface our theories of state

into a whole new worldviews. These are stepping stones. Stabilizing the Arctic, I think, is a stepping stone for a new theory of planetary governance based on actually mutualized, recognized of entanglement or risks. And this will transform. It won't be about Arctic becoming self-sovereign like an object.

It'll be a relational problem. And I think that's where I see the pathways exist for a new type of future. I think the disruption of humans as units of labor and cognition into this next form, I think is a pathway of a new future becoming available. I think it will challenge our theories of machines from theories of certainty-oriented systems to doubt-oriented systems. I think the beauty of being human is our metacognitive. mission that we don't know. Our ability to know that we don't know is, I think, the most beautiful

things about humans. Because in that self-awareness, we generate a landscape of curiosity. In that self-awareness, we generate landscapes for tentativeness, tenderness, care, and then play as a possible landscape of being and becoming that would otherwise not be available to us. So I think there's something extraordinary through these options. I think our theory of land, I think I'm pretty convinced that a pathway forward is we are going to have to look at an auto-terreperta worldview of land where Amazonian thinking on land as a cultivated open garden, mass multi-species hosting and gardening with machine systems, I think it's going to be almost certainly micro autonomous machines with these sort of environments. There's going to be a completely different theory of land and perhaps with it almost certainly a different theory of,

of money, different theory of governance, rooted into those frameworks. All those things are now becoming possible, which I think, so I hint at where I can see pathways rather than saying, that's the vision. But those pathways are, for me, are extraordinary.

Because I think if you can touch them, they transform everything. So let me double click on something. Our culture not only is trained in, ensconced in certainty and confidence and authority and individualism and all that. But we do reward overconfidence institutionally and in the media. And humility and the ability to say, I don't know, is almost a first step to looking at the magnitude of what is coming our way.

What are your thoughts on that? I think this is a really critical problem. So I think we've ended up using science and logic as a truth thing. Science for me is a socialized mechanism for holding uncertainty and unfurling. A socialized mechanism for holding uncertainty and the unfurling of knowing. It is not about truths. And we have reduced science and conflated it with religion. that it is a provider of truce.

And it's just not, it's something maybe even more beautiful. And I say that as a Sikh. It allows us to hold uncertainty. There is a role of faith. I genuinely believe this, because faith allows us to operate, I think, in the space, outside, space and time. It allows us to operate in a space of the possible, the imagination, which I think is critical. But at the same time, science is not faith. Science is the mechanism, means for holding uncertainty.

I think one of the things that happened as a kind of viral failure of as we became more abstracted and noun-orientated into the world, we then started to apply certainty systems, nounification systems, into science and everything. And that conflation of both abstraction and nounification has thereby actually trapped us and we've lost the means to hold uncertainty. And, you know, Descartes, if you read his work properly in the first place, And I'm not a big fan of Descartes generally, but what you say is it's, I doubt, therefore I think, therefore I am. And if you reintroduce the thesis on doubt, a civilization that cannot hold doubt actually cannot hold progress and unknowing tendernessness and care because it's rooted in the conflict of certainties.

And I think this is an ontological failure that we're operating at a civilisation scale. Okay, many, many questions. So firstly, Descartes didn't only say, I think, therefore I am, that was preceded by I doubt, I think. Yeah. I didn't know that. So if you read the first paragraph before, that is what he's suggesting. Okay. And I think that's really beautiful because it really challenges the certainty systems that we've operated.

That is cool. Financial markets. At the current moment, there's a pinpoint of absolute certainty, yet, over time it spreads out to enormous volatility. Thoughts on that? So it's a really good question. I suppose what I'm trying to do is sort of come at it from, so what are the spaces of quasi-certainty or necessities that we can construct?

According to the science as far as I can see it and the models that I can see, we are going to have to stabilize the Arctic. right. And a thousand other things. Right. Now, if you can take that as a necessity, a need, we know what the systemic losses are of that. That is where capital markets should be allocating. We are going to have to cool Madrid or many cities by 8.5 degrees, vast numbers. The creation of quasi-infestructures, and one way we're dealing with uncertainty,

is operating no longer at the product scale, but the quasi-population scale. So the economic asset is not individual economic products and services, but is the effect of cooling Madrid by 7.5 degrees. And that is a function of multiple interventions and multiple beneficiaries. The ability to construct these quasi-infestructures, I think, are new needs. So if you notice, everything I'm talking about is the need space, as opposed to the provision space. So I'm talking less about the supply side of innovation, but actually the demand side of innovation and where it sits and how do we construct and organize that demand.

So where, and those are all based on likely projections and probabilistic analysis of where we're likely to head and what the implications are. And even in this, I think one of the things that we've learned really, this addressing of say cooling Madrid in itself, once you start to look at that problem, that becomes a system problem. problem, capabilities, capacities, distributed. And fundamentally, it becomes about building the capability of a system to auto-poetically address itself. So what you're really, the end goal, is not the addressment of the problem, but building the capabilities of a system to auto-partically heal itself. And that is a financial capability, perceiving a risk capability, an organizational capability, and a civic legitimacy to that framework that allows us to society to self-organize for its transition. And that, I think, is the real systemic goals of

these investments, as opposed to even the needs to which we are allocating resources and moving to allocate resources. Okay, let me take a wide boundary step back here. So we're $100 trillion odd in GDP. There's upwards of $400 trillion in total debt and claims, and there's financial stock markets and all, first of all of that 400 trillion odd of digits in bank accounts and linen in our pockets, first of all, when it is spent, it's spent on energy and resources and non-renewable materials and ecosystem impact. So that's number one. There isn't enough energy and materials and ecological health for that all to be spent is one of my core theses. That's number one. Number two is all the holders of that are expecting that to grow

and be serviceable in the future and being spendable for them, their children, and whatever in a world that is rapidly leaving the stability of the Holocene and is rapidly headed towards famines, wars, other things. So, So is it collective denial that's happening in the financial markets? I know one of the things you're working on is civilizational optionality. And I think I saw you say recently that creating options for our future is actually potentially our biggest asset class. I say that time is our biggest asset class.

But walk me through if I was an institutional. large wealth holder, like a pension fund or a government sovereign wealth fund or any of the institutional's looking at, oh, how do I manage my IRA going forward, but then looking at the whole system and walk me through the logic there. So I think the first thing I would say is, I think it's really important for any institutional actor, sovereign actor, to start seeing the coupling of these risks. Okay. Name a bunch of the things that are coupled. So I think, I think the risk between nutrition with labor and cognitive collapse linked with geopolitical destabilization as resource conflicts accelerate and with the climate breakdown volatility

that we'll start to see, those things are coupling at a very rapid speed. And you cannot see those things separately. So not only, historically, those things were very small risks and they were not connected. But now they're increasing and increasingly obvious and they're correlated. Yeah, and not just correlated. They're coupling. They're self-feedbacking into each other. The impact of climate breakdown is affecting our nutrition cycle as well as the fertilizer energy costs, as well as the loss of labor. Like, these things are starting to couple in ways that I don't think we ever foresaw. So that's number one. I would definitely do that.

Number two, I think there is a kind of a realization moment that's required that I think our perpetual theory of hunting alpha may need to be rebalanced in a world of great volatility. So if you are a holder of wealth, I think it is incumbent on you, not through a moral landscape, but incumbent on you to understand the optionality collapse that your claims, on the future are facing. That is the number one thing. And again, I'm just going to reiterate that as a steward of claims on the future, which is what money is, we are about to see a collapse on that claim capacity of that money. Here's a term I just thought of on the spot. You are free to use it. We need a civilizational sharp ratio. I think so. I very much agree. And this is why I'm also

saying that this isn't a moral demand. I'm not inviting you to be kind. I'm not inviting you to be kind. I'm just inviting you to be smart right now. There was a time I would invite you to kindness and just be generous. I think this is about self-awareness of the optionality collapse to capital itself. So one of the problems, though, is all the things that you mentioned that are coupling and feeding into each other don't have prices and therefore are invisible to our current markets. They're invisible to our current markets, but this is where I think sovereigns

and intergenerational family offices are not bound to the train that's jumping off a cliff. That is their superpower. That is their delta. That is their position. That is their power is they can actually perceive real risks, not just the accountable risk to which our current world operates.

So this is why I kind of slightly ignore all coded capital. So if you're a fund manager, you've raised your, fund five years ago, you're locked in into a particular performance cycle, you don't have the capacity because of the coding of that capital to actually take account of the risks that are in play. It's the institutional version of the Upton-Sinclair quote. You can't expect a man to understand something his job depends on him, not understanding. Precisely. And I think that's why, but I do think sovereigns, intergenerational family offices, have not only an obligation but necessity to start

to understand this. And that's also where their power to delaminate off the train that's about to jump off a cliff is. That's where all the value lies. So what are you working on? What are you trying to do? So from our position, I mean, like, what we're trying to do is basically root capital that's become aware of this optionality collapse to positions and options on the ground which can either firebreak the pathways of cascading risks or provide cascading markets very similar to what I described in the area for transformation or do high levels of what I'd call diffusion capability. And so example would be, I used the example before, cooling a city, an example would be stabilizing an aquifer system, an example would be

all the way through to atmospheric river governance. example would be zero material growth of a city where you increase the net livability of a city with no new material inputs. So actually taking these, and they're about 17 different options, how do societies make decisions together, which we find that if we can't transform our capacity to decide, we won't be able to manage the risk that we hold. The whole work on beyond labor and cognition theory of humans, we think that's a key risk. Bioregions around the world, we're operating in our seven different bioregions and looking at how you stabilize them. So you may not know this because we just said hello before this interview, but I am exhausted

because of all the things in New York City. And I am completely wide awake right now because of what you're saying. So getting back to my framing, because I think there's a third piece. The first piece is we've got hundreds of trillions of dollars that eventually will have to be turned in to real things. Number two is the ecological systems accounting doesn't allow for that to happen. But the third piece is all of that digital claims on biophysical and ecological reality themselves have optionality. And we don't have to spend those things on comfort convenience and bling. We can spend them on regenerating living systems and the things that a self-aware planet might want us to spend it on.

Exactly. And that is the choice that we have, and I think that's the groundscape that we have the capacity to be able to do. I also think that if you do any one of those things, so let's take Niatrus Wales Nation, looks like a far option. But I would argue it's not. I think it fundamentally is about the transformation of human and more than human consciousness. It's about ecosystems. It's about theories of state. It's about theories of diplomacy. theories of capital formation, which is beyond human capital formation, that one option explodes a whole theory of like whole thesis on how we perceive the world. It's going beyond humans as units of labor and cognition, I think will explode our theory of what is where the value lies and what is the theory of attention, what does love really

mean, what is meaning really mean, all the way through to what is imagination, All these kind of words that we use in like soft ways in literature, I think these are like, these are words that are so powerful that we just don't understand them yet. And, you know, if I speak as a science fiction author for a moment, and I was to say, what if love was basically the gravity between conscious systems to consciousness and the gravity of a metaconsciousness? what if the love of things was actually a gravitational effect of a metaconscious? What if imagination is the collapse of space time in our brain and a quantum brain capability?

What if memory is a dialogic function in time? What if meaning is about our relationship of how we persist in time and how attention rareifies our persistence? and our desire to persist because we have a... Like, I think these words, and I'm saying them partly through a framework of science fiction, because I think we're nowhere close to what's possible. And I have to evoke science fiction to give a wrapper of the possibility of those systems. I hear you, and that really resonated with me.

But as you're speaking, I had another thought, which is, increasingly I meet amazing humans like you doing this work. and it gives me so much hope and inspiration. But we look at the masses of 8.2 billion of us. And what is the theory of change? Do we need 1%, 5%, 10%, do we need no people except the institutions and the prices and the move? I mean, how do we operationalize people asking the questions you just asked

short of putting psilocybin in the water supply? I think it's a combination of things. Unfortunately, I've probably come to the reality that the moments of crisis will be our Overton Window shift landscape moments. And we're going to go through them. And the question is, are we able to act fast enough with high enough diffusibility to be able to use those moments so that we prevent large-scale violence? I think that those are the needle moments that I think I'm looking at more and more. I think that's going to be part of the story. I also think that actually what I love about what you're doing, what all of us are doing in this room, is I think we can narrate actual possibilities.

And once you start to narrate them, once you start to ask those questions, they're like viruses. They can't be stopped easily. This is why I think, you know, really working at the memetic level, I think is so important. This has happened to me three times where somebody walked over who, you know, you said, I didn't understand what everything you said, but I felt it. And I was like, hmm, maybe that was the whole thing. I thought it was the words. But actually the most important thing was the feeling, because then the person could construct

their own words. And that's what actually handled. They ended up constructing their own language, but they could sense it in their embodied self. So I do sit with great hope. I think our role is to not only narrate, but to put the kind of conduits of resource and claims into these positions and with audacious, like, energy.

I think not apologetic energy, with audacious energy of making this future. Because I think it's necessary. It's asking to be called out and called into being. I don't want to use the word hope because I find the word hope is to consumer. It sort of pacifies the audience into being a consumer of a future. But I think this is a courageous invitation. And I think the courage invites us to be more human than anything else.

Because I don't think a machine has courage. Okay. So one thing I've learned in this work and experienced over these years is the incredible standard deviation of phenotypes, personalities, skills, temperaments, all the things with the humans that I've met. that presumably that same normal curve is within the financial services industry and some of the high degrees of freedom wealth holders sovereign funds family offices and such so walk me through are you actively doing this now trying to persuade these people so try to simplify it down as if I were really naive about these topics and is there a way way that they can contribute and make a proper decision for their family office or their

sovereign fund that falls short of agreeing with our biophysical system synthesis that still makes sense from an IRA objective fund. Walk me through all that. So the way we're thinking about it and I really, you know, love the listeners to this and everyone who's parted to this conversation to actually add and improve this. This is how we're thinking about it currently. So, and again, you know, it's increasingly the models and the way we look into the future, it increasingly makes clear that there will be a collapse of the claim capacity of money over the next 30 years, largely driven by the biophysical realities that we're facing and the kind of volatility system center. There is a, I think, according to the models of,

it's about an 80% chance. Now, if we take that as a basic starting point, and you're a wealth holder, and somebody said that to you, I think the first obvious thing to do would be saying, okay, let's check the models. Great, let's check the models. Then if you check the models and you say,

well, actually those models are realistic, then your second thing would be to say, well, if those models are realistic, and I'm running a portfolio and I want to basically hedge against these losses, how much should I be allocating to the management of these risks? That's it. Step one. And even if it's 0.1%, 1%, 2%, 10%, it is the management of these existential collapse of

optionality to capital itself. That is what you're managing. Great. So I'm not asking for you to be, to believe this. I'm asking you to just use your intelligence and probabilistic analysis to say, is this a chance? Yes. If this is a chance, how are you contributing to the management of this? It's why we buy fire insurance in the unlikely event. Our house burns down. We're really screwed. So it's worth paying a quarter of a percent of the value or whatever. And that's the first step that I'm asking. Then I think what's really important is to code that flow of capital as to the management of those risks.

So if you genuinely are saying these are cascading risk failures, then you've got to be able to allocate a series of positions and options which have a chance in a snowball health to effectively manage that risk. So that is, I think, the responsibility of the agent that's managing capital. The return on capital that they should be seeking to provide is for the return of the management of the existential risk to capital itself. That is the return pathway. I also think that every one of these pathways expand optionality.

So, for example, if you look at transforming our land to being a terra preta future, it will require new theory of machines, it will require new theory of governance, it will require new, all sorts of new supply chains and value chains will we need to be built. I think there is then,

along with that existential capital, which is aware of the essential risk to itself, there's participatory capital with options into allocating into those futures. And those are two buckets of capital that need to work together. And the reason I think those two buckets are really interesting is because they create the chain,

they create a logic argument, argumentation for capital to be able to flow in a way. What we're looking to do is create the conduit between where capital pools and how capital is allocated. And if we can do that, Then I think that 400 trillion, those claims can start to be recycled in a way.

Currently, they're locked into a worldview that can't absorb them without self-terminating us. You mentioned TerraPreda future. That's biochar and sequestering carbon using ecological methods. Presumably, that would be one of thousands of techniques that in the same way that our 400 trillion is locked into self-termination, there's a ceiling on these technologies right now because there's no market for them and there's no cultural aspiration to use them at scale. So it opens that ceiling and changes the self-termination risk. And totally. You know, what I find interesting, say, for example, the Amazon, it's one of the most species diverse environments. That species

diversity was almost certainly human cultivated. Yeah? Tell me more. Because I think all the research that we've seen in the Amazon is that the Amazon was effectively an open garden and the biochar infrastructure and the species cultivation was a, it was literally an open garden and it was cultivated as an open garden. And I think our theory of agriculture, our theory of commodification, our theory of abstraction and a form of simplification, which I think is actually undermined all of that. So I think what I'm looking at is these sorts of capabilities of these mass multi-species and that's made possible because we have the capacity to construct I think micro-autonomous machines that are going to be able to help operate into this new

garden space so it's it's a combination you know I think the simplification you know James Scott's seeing like a state or whether it's agroindustrial machines all designed for a logic of machines and I think we're going to break both simultaneously a logic of land and a or machines in these moments, which I think is really, it's a really interesting invitation. So you are actively trying to set up a civilization optionality fund. And the first step is that wealth holders realize, oh, we're in a cul-de-sac here. And if we do the NPV of these, there's no, it's zeros in the coming decades. So that's the step one.

and then maybe they allocate some as a hedge. Presumably you want to go further than that. And if this were to scale, then there's all kinds of new technologies and everything else. So so far, what are the two or three biggest roadblocks that you find in conversations? What are the biggest pushbacks? Or is there a culture-wide financial services cognitive dissonance that is occurring? or is there, if you're right, Indy, then my built identity and what I care about and all of my investments and decisions are tilted the wrong way and therefore this is too much of a pill

for me to swallow? Or what's been your experience? It's a really good question. I think a few days ago I was at a dinner and I was sitting with someone of wealth. And the thing that scared me the most was when they turned around and said, I'll indeed it's the best I can do and that scared me the most because they were there's somebody really kind

and they'd become exhausted and exhausted at at the scale of the micro and allocating and trying and so there was something that I really that was one thing that I really disturbed me for a moment because I think they were

they had for many many years trying to do this but it'd become and I think one of what they were constantly operating with is the space of the possible, not space of the necessary. And I think the space of the possible is a disastrous space, actually. Space of the necessary is, I think, liberatory. And I think there was something really shockingly, you know, some of those moments where you sit there and think,

oh, shit, I feel for you. And I also feel for me, because this cycle is terrible. I have a follow-up question, but please define the space of the possible and the space of the necessary. briefly. Yeah, the space as a possible is, indeed, we still need to build homes because homes are required and yeah, we'll try to decarbonize them a little bit if we can, but we still, you know, we need labor, we need concrete because we don't have alternative. It is operating in the incremental improvements of the possible. Okay. And the necessary recognizes that every one of those homes that you build basically has a balance sheet of lives on the other side of it that people

will die. And you're not operating in the necessary. You're trying to fix it at the kind of plausible adjacent possible of the present as opposed to looking at it first first principles are saying how do we build how do we double a city in terms of accommodation without massively increasing its ecological material footprint and energy footprint. And what would be the means to doing that at a scale of imagination necessary? So using different words you're talking about advanced financial triage. Could be. Yeah.

So how much of the barrier with the people that you talk to do you perceive to be a lack of understanding of these things versus a lack of the social license because their peer group are going this way. And for them to go this way is too much of a reputation, friendship, social risk. And that if the narrative changed, they would quickly sign on because they do understand what you're saying. How much would you say in those camps? What I'm finding is this requires first principle thinkers.

And unfortunately, we've built a society which doesn't really enjoy doing that. And to be able to make the chain, it requires somebody to be able to operate from the biophysical to the social, to the capital markets, and to be able to actually understand these things and wanting to understand the better think anyone. I think the desire to understand it. So that's my number one thing. Anyone who has a desire to really understand it. Second, anyone that's inoculated themselves from the one billion human future thing who recognizes that's a non-viable pathway.

So they'll almost certainly have built their bunker. They'll almost certainly have imagined their bunker. And then have almost certainly come to a realization there is no future in that bunker. it's like a sorry to put it this way but it's like a dummy you feel good about having it as a child but it's not really a viable future

so you have to have inoculated yourself from that position you've had to be able to go through this first principle position and then you've got to reimagine yourself being an agent in the necessary and that I think is the third dimension of actually quite a hard space because to be an agent in the necessary

it's not an allocation space it's not, it's you have to be participatory in the creation of the world. And I think that's a really much more difficult space because I think the good capital, let's put it that way, has become so apologetic of itself that it seeks not to imprint on the world. So it sits backwards and kind of goes, well, I don't want to impose myself. And so what ends up happening is it's, it's just, it's sitting there distributing without a sense of agency in itself. And what is our theory of good power? And those might be difficult words to put together, but unless we can, we cannot be agent in the making of the world. And so those are the things that I find the inoculations

that are required to be able to open this space up. That's the problem space. If there is such a wealth holder who considers themselves a first principal thinker what are the first steps to go down this path who if they're listening to this show let's all meet and talk i genuinely think this isn't it's not a pitch doc it's a sensing the world together and why and all of us being and what i admire about all of us is that we are able to make claims into the future but with sufficient doubt to allow other people to transform us. And you've done this so beautifully from when I saw you in Austin. Like the journey you've been on is extraordinary. You were brilliant then. And what you've done since then is extraordinary as well. So I think there's something about

how we do this that has to be fundamentally different to the way to do this. I think it's about building a movement of people together, which I know you're part of doing. Well, thank you for saying that. Let me double click on one of the aspects of what you just said. I have a pretty strong feeling that there will be some sort of famine and caloric shortfall in the world by 2028. This Ukraine-Russia thing, the Iran-Israel-U-S thing are not going to just, I mean, life has changed for the rest of our lives because of that. I don't know when there's going to be a disruption. I think there's a 30 or 40 percent chance. It's in the not-too-distant future.

but there's a chance that the superorganism continues to be resilient, and it's after 2040. I don't know. When dealing with these enormous, coupled, systemic, ecological, planetary, socioeconomic risks, how do you personally hold uncertainty with all these forecasts? And we can model it, and a model is only as good as its least good. good viable input. I parse this as I'm very confident

in my worldview, but I'm human and humans are often delusional. Therefore, as even if I'm 100% confident, I have to lop off 25% haircut just because I'm a human. And that's kind of my philosophy, but I'm wondering how you think about that

with your own work. I think the way I've got to that is to discount myself, but to hold my own certainty. As in to say, unfortunately, what I'm describing in evolving has higher and higher resolutions.

It's solidifying, not dissolving. The more data that comes, the more... So, but what I would say to everyone is model it your own way. And then let's talk. And the reason why I say it that way is I'm not sure. So I hold everything I say with an opennessness.

But at the same time, what I'm seeing, I don't even know how to describe it, that it's not just uncertainty. There are new patterns of volatility that are information that look more and more tightly wound and coupling. And so I suppose where I embrace the uncertainty of a system and discount my own hubris is to say, and my invitation to everyone is do your research, join us. I think building a capital pool of any type is, I think, is a real commitment.

In a sense, that pooling of capital is also a pooling of claims. and in the active pooling of claims, you're making a commitment to the fulfillment of the allocation. And we set up a couple of funds many years ago, 10 years ago. And I remember thinking at the end of one of the funds saying, I will never set up a capital pool until I was absolutely certain that I wanted to play here because I think it's a complete life commitment

at the moment that you pull capital. And I think that commitment has to be commercial. So where I would invite everyone to say, look, make sure we're only a small part of your portfolio. Discount us. And let's hope there are alternative better pathways for the system to same resilient. But at the same time, I genuinely believe through the darkness that we're appointed to, I think, is an extraordinary light. And that extraordinary light, I think, is unimaginably beautiful. So I also think that the risk that we're inviting people to see is a pathway to a new way of perceiving ourselves and the planet and the civilization that we are.

But I think we should only be a part of a portfolio of thought and part of a much wider portfolio of allocations to which a worldview can be held with divesting. I wouldn't normally ask this question, but you're such a deep thinker and a wordsmith. maybe you would be willing to define or redefine, given the context of this conversation, the words capital and portfolio. Those are words that I would love to decode properly. So the first thing I probably move away from capital per se, and I know I've used it. My brain just instantly went on claims on the future. I find that a very useful device, transferable.

claims on the future, i.e. money. I find that a very useful device on what, what financial capital gives us. Whether we like Elon Musk or not, I'm going to put that aside. But to make the claims on the future that he's making requires an intensity in pooling of capital or currency or money. And I think there's something interesting to be learned in, and I think the same was true for electrification of New York, and I think the same was true. There are these moments where civilizations have to pool their claims of the future to create an intensity to be able to construct those futures in different ways. So one of the things I'm holding a lot right now is what is a good way of holding those claims? What is a way that doesn't end up becoming self-fulfilling to the individual

that's stewarding those claims? What is a way that allows for those claims to be temporary enough to then diffuse generatively back into the system? There's a whole exploration there. And in portfolio, I mean, like, there's what I'd call a lower dimensional portfolio, which is effectively just the distribution and the hedging of risk between options where you have. So you say, I've got some of this and I've got some of this and this will give us fixed returns every period. I think there's a different theory of portfolio where actually those are not just managing risks, but actively acting in a virtuous framework.

So those options are working progressively to actually create a greater value than any one of those options. So not just the management or risk, but the expansion of optionality that those positions are creating in that portfolio. And I think that itself is a different way of looking at a portfolio. I think then the whole thing is point of view. What is the worldview behind a portfolio? And frankly, my biggest worry to any capital allocator right now is that if you don't have a worldview, I'm deeply worried.

So, and because I think there is a very serious question that any LP should be asking any fund is give me your worldview. Why do you think the science or the logics that you're constructing that worldview are pertinent? in this age of volatile, I think that level of interrogation, just that question of that interrogation will, I think, be transformative for actually capital structures that they exist right now. I think a lot of people in that universe probably outsource their worldview to the financial markets. Yeah, or what I would call it perceived norms. Perceive norms.

But the problem I think, I think, goes back to the earlier point, all the fundamentals are off. All the, energy, demographics, M2 supply versus GDP, AI infrastructures, climate breakdown effects. You put any of them down. The fundamentals of those norms are off. So if you're relying on existing market norms to be able to make claims into the future, this feels like, I mean, the kindest way to say is crazy. So if capital is claims on the future, The fuse and the speed of turnover of the capital becomes an important characteristic because money is probably arguably the most intense supernormal stimuli of our species. I mean, because it condenses all of our ancestral traits into one denomination.

That can be immediately transferred from digits in the bank to land or crypto or oil. or ships or social power or whatever instantly. But it's the instantaneous aspect of it that is also its potential downfall. Because if we understand that capital is a claim on the future, but we had a 10-year lock-up on capital or a 30-year lock-up or a 100-year lock-up, people would make wildly different decisions. Yeah, and this is the, I mean, we have the options to be able to design those lock-ins and incentivize those lock-ins as well.

But I think, firstly, I just really appreciate the clarity of which you articulated that. I think it was really beautiful and important. So you can buy a place in a city. You could say I'll pick up the appreciation of that city's vitality in the land value. You could take that worldview, which is an extractive worldview, of taking the natural, you know, um, buoyancy,

urban buoyancy, economic buoyancy of a city and be able to extract it in land value. You could take a worldview that I own assets in that city and investing in the buoyancy of that city is a systemic way to actually pick up land value. So you can take those are two different points. One is a systems worldview. One is an extract a single point worldview.

I think as volatility increases, the only way to hold assets well will be to take a system's worldview onto the management of those assets and the preservation of wealth and the preservation of even those assets in those different ways. So I think advanced capital allocators are going to have to start to think about how not only, you know, take this building, if I was to pick this building up and put it in the middle of Nova Scotia, how much is it worth? nothing. Because its value doesn't come from its material logic. It comes from its placement in Manhattan, its labor markets, its culture, it's all sorts of transportation. The building itself is nominal. I mean, I'll agree with you on the material value of the building, which is, I think, massively underappreciated. No, I was just going to be flippant and say, to me, it would have more

value in Nova Scotia because then I can quickly get to the forest. But I know what you mean from an economic sense. For my economic sense, right? So why I say that is that I think we've seen the object form of value rather than the system form of value. And once you start to see the system form of value, your theory of allocation becomes fundamentally different. I think that's a key part of how you make claims into the future is no longer going to be on direct investments and direct returns, but system benefits and system returns, which opens up a whole different economic case and also the continuity of provision. the value of stability, I think, is massively underpriced in the world.

The value of continuity of water, massively underpriced in the world. The value of continuity of energy, massively under price. And note, the word is the continuity. And I think fewer and fewer environments will be able to stabilize on the nutrition, energy, water, even critical mineral supply, even labor provision, perhaps even. Those continuity provisions will become more and more valuable rather than the the efficiency of capital in the providing of them. I have an idea.

If you're a first principal thinker watching this, this has to at least ring true to people. And what we're really talking about, as I mentioned earlier, is civilizational sharp ratio. And for those non-finance people, humans are as biological animals, are risk-averse. And so to just show a historical return doesn't give you a lot of information unless you divide it by the standard deviation or the risk that it took to get that return. So if we have huge volatility in coming decades, but it averages out to 3% IRA, it's actually horrible because of the down 50% up 60% because we like to have certainty because that allows us to plan.

So one of the inferences that I'm hearing from your work is by hedging, by taking monetary claims on biophysical and ecological reality and doing investments, either as hedges against the rest of your monetary portfolio or as a slight shifting of the cultural aircraft carrier away from conspicuous consumption and destruction of the biosphere. as our implicit cultural goal, we actually reduce the volatility of the future and therefore make all other investments have a higher return in the process. You've just articulated kind of a key point where the management, the kind of loss of optionality of capital itself is one. I think exactly you say, if you can reduce the volatility, that has a massive delta on value itself. And volatility of what is also really interesting. Volatility of the supply of energy, food, water, or is it the volatility of your perceived asset classes? And I think this is where

there's slight plays here where I think we need to be really clever. Well, here's the Oroboros of this argument in this totally makes sense to reduce the volatility of future streams, except markets are Gordon Gecko-like in the movie Wall Street Doggy Dog and they're very, very competitive. So weird, this is a little bit of a prisoner's dilemma tragedy, the commons thing, because we're investing our hedge to help the whole thing. So there's a game theoretic aspect to this too, yes? I think there is. I actually think there is a theory of continuity value of provision.

that is underpriced in the system. And I think there's some derivative tools that could be constructed to actually optimise for them, which would actually change those market dynamics. So the efficiency of capital is not just an extractive provision. I think we have to think about layers of capital operating, and we have to create like layers of cognition of capital. And currently we often design things in single layers.

And I think this is where the role of derivatives and other balancing products is going to be critical. And I think we have to think like, that and we have to import that thinking into critical utility markets into a fundamentally different way and I think some of that stuff is naturally happening evolving in the system itself but I think they have to be intentionally designed and it has to be balancing to the fact that if you were to lose say nutrition supply in a city you would have a total asset value loss of residential asset value loss so where the economics of this are constructed are not in the provision of supply itself

but in the total asset asset theory so I think this is where layered capital products will, I think, be key parts of this story and will be a key part of rebalancing, recoding the capital, the coding of capital, but also the provision and continuity value of biscuits. You have completely waken me up from my New York City grueling, sleep-de-fried state, and yet we're out of time. What else would you like to share with our audience? This has been very inspiring and planted a lot of seeds for me to muse on. Two points I'd share. One is, I feel like, much like yourself, I'd sort of half jet lagged and didn't sleep at all. But so what I would say is that what hopefully has happened in this conversation is these lines of thought have been laid out.

I think those lines of thought yet aren't knotted together, but hopefully listening with a bit of care, as in care, not as careful listening to us, but care as in we were trying to be intelligent as possible. I think would open up a way to perceive how those lines of thoughts interrelate and come together. Second, I think there's a lot, as you would say, every one of these points does weave together in multiple different ways, and I think it's really vital that we start to look at that. Next, genuinely my deep appreciation to you, Nate, for your capacity to hold these conversations and to create the conversational base to allow for these sorts of, and I would say the brilliant people that you have on this podcast,

to allow for this conversation to have the depths that it needs to have and to allow first principles to actually, which you built, your material analysis was a first principles analysis which allowed the world to perceive the world differently and the future differently. And I think keeping this space open,

I think is the fertile ground for the future to be built. I think I want to bring out the fact that you have mentioned, our time in history as bloody extraordinary and maybe a shout out to our viewers, an inspirational indie Joharism that double clicks on that phrase and the truth of our moment. Do you want to say anything about that? Maybe adjacent to this, what I would say is that I'm not sitting here with despair. I do think we're looking at an eye over needles to an extraordinary future. Yeah.

And I think that is the invitation. And my invitation to all of us is courage and the invitation to all of us. I think you can just about taste it. And that's the invitation. And I think this is what the moment requires. I taste it when I'm in conversations with people like you. don't always taste it. And so the inference there by the transitive property, I need to have more conversations with people like you, or summarize, I need to have more conversations with people

in the belly of the beast that are working on these cutting edge, Hail Mary passes at this moment. And I think there are a lot of people out there. I agree. And I think you're weaving them together. And you're building shared vocabulary, which I think also is really important. Like, our vocabulary codes the future. I had lunch yesterday with Jeremy Granton. He's like, Nate, you're doing great, but too much inside baseball. You got to change some of your phrases so more people can understand them. I'm like, yeah, but then that takes time.

I think people get the feeling. I think this is the thing that I've really got to is people will discover the words if they get the feeling. And the discovery of the words is their own. but I think what we have to do is create the space for people to be able to feel what we're saying. And then everything else, actually they're extraordinary beings in their own right. Gaius B, do you and your work, my friend. To be continued, come back in six months and give us an update. Absolutely. Thank you.

Thank you. If you'd like to learn more about this episode, please visit thegreat simplification.com for references and show notes. From there, you can also join our Hilo community. and subscribe to our Substack newsletter. This show is hosted by me, Nate Hagen's, edited by No Troublemakers Media, and produced by Misty Stinnett and Lizzie Siriani. Our production team also includes Leslie Batlutz, Brady Hyann, Julia Maxwell, Gabriella Sleman, and Grace Brunfield.

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