The End of Information Era Economics
I’ll trade my data and network cards for your...
Two hours from my home lies the second largest potato producing region in the country, a high desert valley surrounded by jagged peaks. Two more hours east, a crooked river canyon gives way to rolling plains. Alluvial fans overlay a vast aquifer, ideal conditions for melons, beets, chiles, and more.
Where fertile soil is deposited, agricultural wisdom collects.
It is soil science meets mechanical know-how meets generations of lessons learned in the fields. Farming is an uncanny local skill that does something profound - puts food on our tables.
In another time, communities with fertile grounds and green thumbs made for full bellies abound.
Today, many ag towns are food deserts.
Hunger is regularly tided by fast food trucked in from far-off slaughterhouses or sugary treats from the gas station. Where the local trade is feeding people, nutrition can be hard to come by.
Anyone who has spent time in an ag town knows that reverence for farmers is not just nostalgia, it is an ode to a uniquely local, mission critical skillset.
Where markets under-appreciate, locals know to over-appreciate.
Information Era Economics
This economy is just another version of Settlers of Catan. It has different cards with varying values depending on what phase of the game we are in. The rules are made up. The players are, well, all of us.
For the past 100 years, the game has been about collecting data and network cards.
These cards have been in the game the whole time, but were hard to play. Early network cards meant shaking hands with someone no one else could shake hands with. We have traveled across oceans to find new trade partners and formed a collage of alliances, clubs, and old-guards to make network cards valuable. Similarly, data was primitive. Longitude was once a data card that kingdoms saw as the key to worldwide dominance. England, The Netherlands, and Spain (twice) issued massive rewards to secure this data card. It was a different game back then.
Since the days of discovering longitude, people have flocked to London, NYC, SF, Hong Kong where their data and network cards were more valuable. It was a niche game amongst niche players.
Meanwhile, other cards, like farming, were easier to play. Find prosperous land and apply labor. Crops were not yet datapoints in commodity markets. They were food available for purchase by hungry locals.
The Information Era
An unforeseen telecommunications revolution transformed these cards forever.
First, computing enabled for theoretically limitless data creation. Then, the internet allowed for limitless access to not just data, but network. The opportunities to play data and network cards for profit became infinite.
Guess who’s been collecting these bitcoin-esque cards this whole time? Wall Street and Silicon Valley. Finance and Tech.
A century of collecting data network cards was already lucrative, but more in the bitcoin mid-2010s kind of way. Computers to the power of the internet made the cards Bitcoin 2024 valuable. They are the best in nearly every game worldwide.
As a result, finance and technology have all the leverage in value capture. If carrots are a static $1B market, the carrot farmer is making less than 100 years ago not because their carrots are worse or less desirable, but because finance and tech are just that much more effective at capturing value. That $1B gets doled out by cards played, and tech and finance simply hold the high cards.
This advantage will be the main story of the Information Era. The same players will keep winning with their same data and network cards.
Why?
Data and network cards are best played with a Knowledge card. Thus far, knowledge cards are only attainable by years of playing in data and network games.
Robinhood gave the public the same level of market access as Wall Street. This theoretically opens the game up to everyone.
Meanwhile, Wall Street buys the order book information from Robinhood, making billions off of this data advantage. That is the knowledge cards being played.
If you had order book information from Robinhood, could you arbitrage the markets in the same way? Could you write the SQL to analyze the information? Structure the investments to take advantage? Write the code to automate the trades? Raise the money to hire the people to help with this?
If you answered no to any of the above, you don’t have as many knowledge cards to play. Despite 66% of the world being online, only 0.01% know how to play the data and network card at that level.
Information Era Economics have been far from equally distributed. That begins to change in the final chapter.
The Knowledge Chapter
While the Information Era game remains tilted towards tech and finance, we enter its final chapter - the Knowledge Chapter.
The Gamestop short squeeze was a telling preview.
The data around Gamestop’s outstanding short positions had been publicly available for years, but the knowledge as to how to profit from it remained finite. Come 2020, a Reddit thread surfaced this knowledge and made it actionable (with help from our friend Robinhood) to the masses.
A few hedge funds had their multi-decade lead in the Information Era gam erased. Under the examination of a networked populous, short selling is a fundamentally riskier endeavor.
That was all before AI became available at consumer scale. Now, knowledge cards have been airdropped to everyone who has data and network cards.
This final chapter of the Information Era is only going to last the blink of an eye.
It is essentially, “next hand wins” for the Information Age.
Then comes the next game…
Coming up in the next game
Our final Knowledge Chapter hands
Finance and tech, diverge
Data and network cards go from being Bitcoin to Dogecoin
Do farmers get a break?
Your innovative finance announcements (hit reply!)