 Hello, my name is Maria, I'm here today as a Circle Network host, and for the ones of you that are not aware, today is Earth Day. And what on Earth would be better to mark this day than me interviewing Sam Vaknim himself, the author of Malignan Self-Love, Narcissism Revisit, Professor of Psychology and Finance in various prestigious institutions and universities, Editor-in-Chief of various academic journals, and member of the editorial board in more than 60 of them, a busy man. Even I'm impressed. Thank you very much, Sam, for making the time to have a chat with me. Thank you for having me, a pleasure. How can we understand something as complex as Narcissism, and do we need to be one to know one? Well, it always behooves one to make a distinction between the individual and the collective levels. On the individual level, orthological Narcissism is distinct from healthy Narcissism, which we all have. Orthological Narcissism is, again, on the individual level, a trauma defense against trauma. Now, the trauma is usually inflicted in early childhood in a variety of ways, but it could also occur later in life. So we can have transitory or late onset Narcissism. Narcissism is a defense. It's a fantasy defense. It's a fantasy defense, gun or eye, writ large. And in this sense, it's a cognitive distortion. It's a filter which isolates the Narcissist from the world. We say in clinical terms that the Narcissist has an impaired reality testing. He doesn't understand reality properly. He distorts it in order to buttress his self-perception, his inflated and grandiose self-perception. And because he's grandiose in his own eyes, he's got life in his own eyes. He's perfect. He's brilliant. He's omniscient, all-knowing. He's omnipotent or powerful, et cetera, et cetera. He also feels entitled, feels entitled to special treatment, to benefits accruing to him without commensurate effort or investment. And finally, the Narcissist on the individual level does not have empathy, lacks empathy. Of course, one would lack empathy if one would regard himself as infinitely superior as godlike. One cannot empathize with an ant or with an insect. So the Narcissists regard other people contemptuously. They consider them a lower level in the evolutionary ladder. And so this is on the individual level. On the collective level, Narcissism is an organizing and hermeneutic explanatory principle. Narcissism makes sense of reality, allows us to predict events and trends. And in this sense, Narcissism had become a governing force in many social and antisocial interactions. This distinction is very important because on the individual level, Narcissism functions as a private religion, with the Narcissists being both god and worshipper. On the collective level, however, Narcissism permeates institutions, institutional memory, institutional structures, principles of institutional action, and therefore dictates the environment we live in increasingly more so. And I would even say that we are gravitating towards an extreme form of Narcissism known as psychopathy. Let me just put the light on. So that's very interesting. You see that as you explain that Narcissism permeates institutions, so it's a phenomenon that we can observe in business, right? In the way that people interact. Business is a very toxic and malignant environment, as far as Narcissism goes, because business involves ego trips, ego clashes, power plays, mind games. Business is, in effect, a kind of death count in the sense that business places a premium on material goods, which are essentially dead. They have no soul, if you wish, and places these goods or various parameters to measure these goods above the welfare of people. So for example, the bottom line, or the GDP, gross domestic product in case of national economics, we value these parameters rather than, for example, a happiness index of people happy environment, the environment. So business, the business environment is conducive to Narcissism because Narcissism is about death in effect. The Narcissist as a child had died and had replaced himself with a false self, with a concoction, with a narrative. We call it a paracosm. So the same happens to a large extent in business. Business is an insular simulated or extended reality. It's a metaverse. People play games. Business is a game. It's in the sense of game theory. It's a game. It's not a zero sum game, luckily for all of us, but it's still a game in the sense that it's highly simulated. And the outcomes are simple. The outcomes of business are rarely products. About 10% of the outcomes of business are products. Most outcomes of business are actually symbols. And business is about the manipulation of symbols, especially in the services industries and so on. So we've gravitated away from reality, which is a hallmark of Narcissism. We've gravitated away from reality and we've found ourselves embedded in virtual realities, cities of virtual realities. Business is a virtual reality. We live away from the land. We live away from reality. And so this is what I mean when I say a death count, not in the sense that it promotes death, although some industries promote death, the weapons industry, military industrial complex and so on, but in the sense that it promotes a divorce from reality. It is a rejection of life. It's a rejection of reality. And what about the efforts that businesses are doing with regards to measuring non-financial metrics such as CO2 emissions and water management? Do you think that's also a construct to avoid reality or can it actually contribute to improve the way we do business? It's public relations. We all know that social responsibility or corporate social responsibility, sustainability indexes, happiness indexes and so on and so forth. They were all imposed on business, business fought back, tooth and nail and claw for decades against these things. I know because I've been advisor to governments and I've worked hand in hand with the World Bank and the IMF on behalf of eight governments all over the world. So I know this intimately first hand. Business was an obstacle, always passive aggressive, always sabotaging any effort to introduce any metric which is not quantifiable and is not bottom line oriented. Of course, as people became more aware, as the environment degraded and climate change had entered the backyard of each and every one of us, pressure, grassroots pressure had increased and since ultimately businesses depend on consumers and customers and even suppliers and supply chains are globalized. So they're very vulnerable to environmental impacts and not only to environmental impacts but to social impacts. For example, if people are unhappy, if they're rebellious, if they're defined, it has a massive impact on businesses. So businesses started to realize that these factors which were orphaned, orphaned factors, factors which they had rejected for decades, had to be taken into account. But they do so gradually and reluctantly. And whenever they do post of their accomplishments, it's utterly a public relations exercise. There's no real commitment in business to anything outside business. And this mentality is fostered on, egged on, engendered by the financial markets. The confluence, the malignant confluence, the metastasizing confluence between financial markets and business markets, mainstream and main street and Wall Street, this confluence had poisoned the well, had created a poison tree. And I think it's been one of the worst trends ever. You see, I don't need to tell you that until the 1920s, more or less, the financial markets were largely divorced from industry, from manufacturing, from agriculture. They served to finance these things, these activities, but they had minimal influence of these activities. And the financing mostly was channeled through banks, which were very essentially conservative institutions or were just messengers. It was a courier service. The finance industry was a courier service. And then in the 1920s, ironically, after the Great Depression, the finance industry became the engine, became the driver of economic activity. The finance industry is about symbols and manipulation of symbols. And not about proper, real economic activity. And this had diverted all of us into a very, very dangerous path. It's a fascinating topic. I think it would be interesting to now describe, you know, what is your opinion about the relationship between startups, mainly in tech, in technology, and the investors? I mean, how this group manages failure? Everything I say sounds like a rant, but it's not a rant. It's based on studies. For example, we know studies by Robert Hare and Babyak, for example, had demonstrated that about 5% of chief executive officers in Fortune 1,000 companies have diagnosable psychopathy. And the prevalence of narcissistic personality disorder among workers in Wall Street is dozens of times higher than in the general population. So it seems that narcissists and psychopaths gravitate to the business environment and much more specifically to the finance industry. So it's not a rant, what I'm saying. It happens to be the truth, reality. Now this leads to your question. Whenever there is a power as asymmetry, there is a potential for abuse. That is true in romantic relationships or intimate relationships. That's true among friends, in families. Whenever there is a situation where you need something from someone and that someone doesn't need anything from you, that creates a potential for abuse. And whenever there is a potential for abuse, there is abuse. There are corrupts and absolute power corrupts, absolutely. There is an important distinction in the financing cycle of startups between the seed or engine stage and let's say series A and I would say series B and C, especially series C. Series C is institutionally streamlined. It's almost algorithmic. It's almost, you know, it's institutional. So the impact of narcissistic and sadistic and psychopathic individuals on series C is much, much more limited. There's checks and balances which are institutional in nature. That's not the case in series A and definitely not the case in seed and angel. In seed and angel, seed and angel usually is the founders or family of the founders or friends or what have you. And so people have this naive notion that seed investors or angel investors are benign, benevolent, loving, caring, and puffy, they want to help the founders and so on. And series A is open to more abuse because these are strangers. They are much tougher, they're much harsher, they're much more numbers oriented, they're number crunches, bean counters, and they are risk takers but they try to mitigate the risk by essentially driving the founders out in terms of equity. That's a general idea. That's a general picture. The truth is that in both these stages there is vast potential for abuse and narcissistic abuse of which they and in both cases, unfortunately, this abuse is discernible. The power of symmetry translates into inequitable equity distribution, robbing robbing the founders usually in most cases. And the second thing is a takeover which is usually hostile, a takeover of management functions, of the liberty of degrees of freedom of the founders, of the values and beliefs that underlie the startup, of the choice of markets and how to cater to consumers and customers, how far to go and so on. So there is a leakage of power from founders to investors. When all the investor does is put up meager, meager usually, amounts of money. So there's a disproportion between the amount invested and the power relegated. And that's a great definition of abuse. That's a good point. And I definitely see what you mean that early stages, Angel and Seed are a huge struggle because... And Searus A, not only Seed and Angel, Searus A as well, Searus B begins to be more benign. And Searus B, the company, the startup has more leverage, this is a proven track record, their markets, I mean, it's more balanced. But Searus A is utterly imbalanced, now imbalanced is a bed, end of story, their bed in every human setting, wherever there's an imbalance, you know, Russia and Ukraine, there's a bit of an imbalance there, war, whenever there's an imbalance, bad things happen. So I'm not saying that these two stages of financing a bed, after all, we would not have had startups without these two stages. But I am saying that there's a lot of abuse going on. One would even raise the question, could many more startups have succeeded? Could the failure rate had been lower? Had there been more symmetry between founders and their vision and investors and their pockets? That's a great question. Yeah, it's a great question because very often, I used to be a venture capitalist just to clarify, because very often the founders have a vision and the vision is based on values, on intimate knowledge of markets, on niche markets, on very good acquaintance with the product cycle and the problem of the founders in vast majority of cases, they don't know how to make money, they're not money oriented, they're great with the product, they're great with their customers and clients and consumers, they have wonderful ideas, they have a great vision, they just don't know how to monetize it. That's a vast majority of cases. So here comes the investor, the investor says, I'm going to give you money, but I'm going to also give you marketing prowess, I'm also going to give you my lifelong experience at making money, I'm a moneymaker, I'm a rainmaker, and I'm going to teach you how to make money. And had this been the deal, had this been the alliance, that's a great combination. But then the investor grandiose lead and most investors are grandiose because they have money. You know, the Puritans who had established the United States, the Puritans thought that if you make money, if you're a moneymaker, it means you're blessed by God. And this grandiose perception that making money means that you are blessed by God Himself, personally, had persisted to this very date, it is the foundation of the American dream. So people who make money also think they are highly intelligent, they also think they are blessed, they have magical thinking, it's called magical thinking, it's a pathology. It's the belief that you can't be wrong. Why? Because you've made money. Here's the proof, you know? So that's where the problem starts. Investors don't know their place, they just don't know their place. They start off by giving you money as a founder, you know, they give you money as a startup. And that's where they should stop. They should put in place, of course, supervisory mechanisms, the money is well spent and so on. That's essentially where they should stop. If they can bring to the table contacts and marketing skills, all for the better. But they should stop, they should know their own limitations. And investors don't, because they think they are also good managers, much better than the founders, good marketing people, good in financing, good in knowing the consumers, good in knowing the markets, and they tell the founders what the product should be. They end up undermining themselves. It's self sabotage, which is very classic narcissistic behavior. How can founders protect themselves during early stages? Because one could almost say that the startup founders become borderline in terms of, in this relationship, is how you see it. Yes, I do, actually. I think the grandiosity is on both sides. Many, many founders could have said, we're going to grow much more slowly. We are going to grow integrally. We're going to grow incrementally, bit by bit. It's going to take 40 years, not four. But they want to be billionaires, and they want to be billionaires tomorrow. So it's the founders grandiosity, which clashes with the investors grandiosity, and so a gigantic number of startups fail. They fail owing to grandiosity. The founder wants to be instantly rich, instantly famous, instantly loaded and commended for his brilliant vision, and I don't know what, and the investor wants to be the founder. He wants to be the founder. He wants to deem in the founder or reduce the founder to a vassal, like a feudal system. And this clash of egos is, in my experience, I've had quite a lot of experience with venture academy in Israel, which is a hub, a bigger hub than the United States, by the way, in terms of... I see. There are a lot of startups there that are really, really impressive. There's about 5,000 active startups at any given moment in Israel, per capita it's much, much higher than any other place in the world, the United States included. So I come from a good school when it comes to venture capital, and I can tell you that this is like 90% of a reason for failure. A clash of egos, who's going to be bigger, who's going to prevail, who's going to be the public face, who is going to make the decisions, who is the boss, who is the underling. So this clash destroys the startups. Most vast majority of founders do not need anything beyond the angel or seed face. They don't need series A or B or C, let alone an IPO. They don't need any of this if they're patient. But they're not patient. They want everything now, instant gratification, inability to delay gratification is a classic sign of narcissism. Narcissists feel entitled, and they feel entitled now. It's the marshmallow experience. It's infantilism. It's a childlike mentality. Instead of saying, okay, I have this product, and I have a tiny market, and I'm going to work hard, and I'm going to work for decades until this market grows on me and with me. And yeah, it may be 1% of the market I can have if I sell 90% of my company to some grandiose buffoonish investor. But it would still be 100% my market. And I would be happy in it because I would know each consumer by name. And I would still be making a million or two a year. That's not bad. That's not so bad. It's not a billion, mind you, but it's still a lot of money to spend. It's not easy to spend it, try it. But they don't think it's enough. It's what we call in social media, relative positioning. How many likes do I get and how many likes do you get? You get 2,000, even if I get 1,000, it's not enough because you got 2,000. It's relative positioning. It's a competitive bet, malignant competitive spirit. And it destroys a lot of value, a lot of value, not only in terms of money, or not actually in terms of money, but in terms of creativity, vision of possibly very useful products and of the happiness of everyone involved. I mean, there are a variety of different segments that tech startups are now being involved with. If we think about the last 20 years, it's been crazy, the number of items that we're doing in a personal level or manual level and now are digitalized, this opened the opportunity for many, many startups to emerge with great ideas. Then technologies like artificial intelligence and blockchain enabled, search for talent for these people that can really develop these type of technologies, they feel entitled to create their own idea and come up with their own startup. And is there a failure here of the corporate institutions to embrace this type of talent? Had there been no failure, we would not have had crowdfunding. The emergence of crowdfunding is a symptom of corporate venture, capital failure. And so I see two hopes, two multicolored hopes, I hope, because minorities, mind you, minorities of various colors and genders and minorities are both underrepresented in terms of startups and mistreated even much worse than the white alleged majorities. Whites are not a majority in many cases, but they still behave as though they were a majority. And so I hope it's a multicolored coalition kind of. I mean, I see two hopes. One is crowdfunding. I hope crowdfunding somehow succeeds to challenge, meaningfully, the venture capital industry, let alone investment banks and so on. It's a long way to go, mind you. But it's a hope, especially if ultimately it will be coupled with blockchain technologies. So we would have blockchained crowdfunding in, inside, immersive or pervasive virtual realities such as the metaverse. I think this will open whole new channels of financing, which will be outside the reach of current institutions, the very same way that Bitcoin, for example, does challenge traditional currencies, fiat currencies. That's one hope. The second hope is ironically intrapreneurship, not entrepreneurship, but intrapreneurship, entrepreneurship inside established companies. So for example, you have Google and Intel. They have venture capital arms. That's growing in most companies. I find that interesting. Yes. I think that's a great hope. Why is it a great hope? Because it's actually series A or seed capital with all the constraints of series C. Imagine you're an employee of Google. So you come up with an idea, a new product, and Google gives you the money. Google is actually acting as an angel investor when it gives you the money. But it's Google. So it has all the institutional constraints of a pension fund or a series C investor. And that's a wonderful combination. When there's not a single individual, however malignant, however narcissistic, however psychopathic, who can influence the process meaningfully. Because it's totally algorithmic, automated, and headstrong. I mean, there's no way to fight this. It's a huge ship. So I think combining the best features of series A and the best features of series C gives us corporate incubators such as Google's or Intel's. If they wise enough, if they wise up, I'm sorry, and they combine this with crowdfunding and with the blockchain. I think that will be the picture of the future. It's going to be interesting to see some cap tables with traditional institutional investors looking at participations from venture arms from this type of investments and then see how they will react to that, right? Don't forget that companies like Google, they're gigantic internal markets. I mean, they employ like 100,000, 200,000, 300,000 people. They can conduct the mother of all market research because they have a captive audience, which is essentially very diversifying, well represents the population well, except when it comes to minorities again, but especially women. It doesn't represent women well, but otherwise okay, it's a good approximation. And you can do market research there, and they are potential consumers as well. So they have a captive market. Like if you work with a company that has a half a million employees, it's like a small country in Europe, good. So it's an interesting, a very interesting concept in my opinion. Intrep and Nurship is very interesting. I mean, many of the startups starting in the tech space, of course, they will try to, if they're smart, to be part of one of the ecosystems of the Microsoft also has done enormous efforts on seeding startups. I mean, but you pick any big tech vendor, being an infrastructure, cloud vendor, or applications, they all invest in startups, yeah, internally, externally. There's a famous venture capital firm. It's called Amazon. Everyone who works with Amazon is a startup, it's a startup. My wife has a small publishing company, and she works with Amazon. She doesn't know it, but she's a startup, and Amazon is giving her, in effect, seed money. Amazon is her angel investor, and Amazon works with millions, tens of millions maybe, I don't know the number, like millions. So, and every B2B is actually this. If I'm a Google employee, and I come up with a product, and Google gives me seed money, and then uses its own workforce as a market research opportunity, and so on and so forth. I'm actually B2B, because I'm business, and Google is a business. So, it's a B2B thing. So, and my wife is a business, and Amazon is a business. It's a B2B relationship, because my wife sells it to Amazon. Amazon is big. Then Amazon sells it on, but so it's a B2B thing. And yet, it's a B2B. And yet, it's a classic venture capital situation, classic seed and angel, but without any malignancy, without narcissism, without psychopathy, because not a single individual in Amazon can influence Amazon. I think not even Jeff Bezos. It's too big. This ship is too big, and that's wonderful. Let's hope for the future. Matrix type of organizations, I mean, using more of a type of team structure name, that's what I've seen technology firms adopting, and I don't quite see that in other industries. So, maybe there's something to learn for other industries to become more tech businesses and look at the separation of power. It's definitely the power not being concentrated in one or two individuals, or even 20 or 40. It's hundreds or thousands of them for companies that have 100,000 employees, half of them are middle management, and they have their power and things intersect, and that's what you think. It's checks and balances. I would say, I think we need to reconstruct the financing industry, or definitely the financing of startups using two principles. Algorithms like YouTube. YouTube selects which recommends videos for you to see. There's no real interaction between you and YouTube, and YouTube doesn't care. There's nothing personal there. It's like the mafia hitmen. I'm killing you, it's nothing personal, it's business, so there's nothing personal there, and that's good that there is nothing personal there, because there's not one guy in YouTube who says, I really hate Maria. I'm going to make her life hell. She can't. It's the algorithm. So converting or reducing everything to impersonal algorithms would be extremely helpful. And the second thing is reverting from hierarchy to network. Today, venture capital, seed money included, but definitely serious A and so on. They are hierarchical. The founder ostensibly is equal to the investor. They're negotiating. Who is negotiating? It's bullshit. The investor has all the power. It's a take-it-all, leave-it situation. It's my way or the highway. It's totally psychopathic, in effect. So hierarchy is dead, and that's an antiquated model that rules venture capital. It needs to be converted into a nodal nodes network model where actually self-assembling adhoc networks of investors invest blindly in startups via the mediation of experts, of course, so valuations and everything. But there will be a filter of expertise isolating the investors from the founders, the technocrats. So to speak, in the middle. So the investors will form self-assembling adhoc networks, put the money, and of course, the money will not be dispensed or used until a mid-layer of experts, top-level experts, will say, yeah, this is right. This is wrong. Founder is right about this, wrong about this, and so on. The experts are disinterested. And there's no ego in the game for the experts. They're just studying the situation and rendering an opinion. They don't even know who is going to read the opinion. Everything must be totally isolated. There is a model for this in Akadim. In Akadim, the peer review process. OK, yeah. The peer review process. I don't know who is reviewing my papers. I published about 20 papers in the last two, three years, four years, and I don't know who had reviewed it. I know some of them are my colleagues. I'm sure of that. I reviewed books and papers of my colleagues, but it's blind. It's a blind game, double blind. It's exactly like conducting research in science. The process needs to become much more scientific and much less personal. Interesting. So what are the consequences of that? Because if we are taking the personal side from business and becoming more and more to algorithms, what's the future of humanity? No, only the investment is algorithm. The interface between the, actually, this will enhance the interface between the startup and its market. It will personalize the market because the founder will not have to worry about placating grandiose investor or a psychopathic investor. The founder will be able to focus on his market, on his consumers, on his suppliers, on the stakeholders, on society, on environment. The founder will have his priorities straight, other people. Now the founders of startups are focused on money, not on people. But if you detach the investment function from the operational function, as had been the case before 1920, if you divorce the finance aspect from the operational aspect, you restore humanity and personal touch. In the 7th, up until the 19th century, when you made a product, are we still on? Are you sure? Yes, yes. No. No, because it is. Until the 19th century, until the Industrial Revolution, when we made a product, when someone made a product, he knew his customers personally. He knew them personally. There was a direct relationship between producer and consumer. The Industrial Revolution destroyed part of this, but the biggest damage by far was the involvement of the finance industry in the manufacturing process. Manufacturing of goods and manufacturing of services. Doesn't matter. The involvement of the finance industry in the operational process. So we saw in the 80s, the Gordon geckos of the world, the scavengers, and the destroying value in companies, breaking them apart, unlocks internal value allegedly. Never did, was nonsense. We saw what happened to the junk bondsman. So this was, finance became a scavenger industry, living off the corpses of dying startups and dying companies and so on. And we saw this also, we saw this divorce between value and the end consumer in the mortgage crisis. So we need to restore proper factually to the market. Those who produce should produce and they should be intimately acquainted with their consumers and customers and with their suppliers. They should maintain human relationships along the chain. Those who finance should give money and shut up. End of story. They should rely, of course, on a team of experts, I don't know, accountants, valuators, tax experts, and experts on the product, experts on the product. They should rely on experts, of course, and should not give the money blindly. They should rely on experts. But they should communicate with the experts, not with the founders. The model is not working. We know it's not working because most startups fail. No, the number is, I don't know, it's between regions. But we may be looking at 80, 90% failure. Actually, 95% within five years. 95% within five years. It's a staggering number. There is no other field of human activity with a 95% failure rate. For example, if you went to a hospital and you knew that a specific surgery ends up 95% of the time in death, I strongly suspect you would have not agreed to go under the knife. For sure. OK, it's definitely, I mean, there are ways to improve. But do we need all of these tech innovations? Is there space for all of this innovation? Could all of them actually succeed? Would there be enough market out there? No, as we both know, the vast majority of tech innovations fail and die away. Betamax. But that's another issue. The finance industry is driving people to innovate compulsively because they're focused on growth. They're not focused on value, they're focused on growth. And you can't have growth without innovation. You can have stability without innovation. And you can have incremental growth. You can't have stellar growth, spectacular growth without innovation. So this created two adverse outcomes. One, as I said, people innovate compulsively. Like it must be new. I mean, iPhone 13, iPhone 14, iPhone 15, every single year, it must be done. We tweak the camera, we do it, and we call it iPhone 15. So this is the first thing. If you look at products today, iPhone included, all the technologies are 60 years old. All, not one exception. That means all the innovation of the last 60 years was rubbish, rubbish. Or they are just marketing an existing technology that people still want to buy. And the market is just worth it. It's a smokescreen. If I look at the iPhone, the technologies that are worthwhile, believe me, they are in the iPhone. But they are all 60 years old. What had happened to the technologies in the interim in the last 60 years? They've been probably worthless, or they would have ended up in the iPhone. So it's a lot of compulsive innovation, which is not innovation. It's a lot of tweaking, public relations, fakery, and so on, Elizabeth Holmes. The second thing, second adverse outcome, we became addicted to innovation as consumers. So we spend a lot of money unnecessarily. There is planned obsolescence. And planned obsolescence conditions us is operant conditioning. We salivate. When we see a new product, we salivate. And we are ill-equipped, because we are not scientists. We are not technology experts. We're ill-equipped to judge whether the innovation is real. And so it's a good value to buy the new version. Or whether it's nonsense, or tweaking, or public relations, or life, simply life. We're ill-equipped as consumers. There is an asymmetry, a symmetry of power in this sense also. So we buy. They innovate compulsively. We buy compulsively. And then there are business models that became even more complicated, because if we are not talking about products and hardware, if we're just talking about software and the number of subscriptions and social media with advertising business models, we've created, to your point, before these are also metaverses. We don't need to be immersed in a complete virtual reality, to be in metaverse. We're already detached from reality and living in a digital world. I mean, if you need to, how did we get here? Would it be possible in the eighties, to see the signs of what we ended up becoming in 2022? Oh, yeah. The roots were earlier than the eighties. The roots, I think, started in the late fifties. But the problem is this. People had discovered, to the ultimate shock, that you can make a lot of money, more money, actually, by manipulating symbols, than by manipulating anything else. Land, inputs, industrial manufacturing, it is all dwarfed by the manipulation of symbols. And when I say symbols, I don't mean just finance. The publishing industry, symbols, media industry, Netflix is symbols. It's manipulation of symbols. It's all digitized now, so definitely it's symbols. So people discovered there's a lot more money in manipulating symbols. Now, what's wrong with that? You have a philosopher like David Chalmers, and he says, simulation is also a reality. What's the problem? I'll tell you what the problem is. You and David Chalmers. Problem is psychology. Chalmers is a great philosopher, but not such a great psychologist. Problem is psychology. The minute you disengage from reality to any extent and immerse yourself willingly, voluntarily in virtual space could be digital, could be anything else. There are two processes that start immediately. One is known as Apophina or Pareidolia. It's finding patterns and regularities and rules and laws where they are known. In other words, confronting random sets of data and discerning these random sets of random data, discerning patterns and rules and regularities, which are utterly wrong, fake, not true. People do that. You look at the cloud, you see a horse. That's Pareidolia. You look at a series of numbers and you find a regularity, although these numbers were randomly generated by a computer. That's Apophina. That happens. Number one, number two. If you divorce people from reality and allow them to operate in a simulation or virtual reality or metaverse or extended reality, whatever you want to call it, allow them to operate in extended reality, augmented, mixed. What happens is there are no effective feedback loops. Reality, what is reality? An excellent definition of reality is a feedback loop. It's a feedback. You walk, you walk, you walk. You bang into a wall, that's feedback. If you're not totally insane, you stop. Reality has provided you with an incontrovertible feedback. When you deal with symbols exclusively, digital symbols, even if they appear to be reality, like second life, the game, yeah? Even if it's a multiplayer game and it appears to be very real, even if you mine Bitcoin and it appears to be very real, the problem is sets of symbols never, ever provide you with feedback. What seems to be feedback is not feedback. It's the integral evolution of the algorithm or the symbols, it's not real feedback. So people go haywire. They get totally disoriented and they do utterly crazy things, which leads to financial crisis, for example. So it's not true that humans react identically to a simulation and to reality. It's utterly untrue. I don't know where to begin. That's 100% untrue. And so the more we move into virtual realities and many startups are actually virtual environments by now, the more we move there, the more crazy making is gonna happen because we see patterns where there are none. So we make bad investment decisions. And that's, of course, technical analysis in stocks. People analyze bonds in stocks, technical analysis. Technical analysis is a scam, one of the greatest scams ever because it's based on Pallidolia and Apophina. So that's an example, a very old example. You asked me when it started. Technical analysis is at the very least 90 years. So we have that example. And then you have virtual economies, for example, in Second Life and Future Metaverse. You have virtual economies and people buy and sell things online and they invest real money and convert it into Linden dollars or whatever. And then they trade with this and they have a feeling that they're creating value. They are deranged, clinically deranged, I'm sorry to say, it's a form of insanity. How do we define psychosis? We define psychosis when you misidentify internal objects as external objects, you have a voice in your head. You think it's coming from the corner of the room. That is psychosis. So if you trade Linden dollars and you have a strong feeling that you had created value, I'm sorry, but that's a psychotic disorder. Okay, how do we get people back to the farms and doing agriculture and connecting with earth again? Less than 2% of the population of the United States is engaged in agriculture and not secondary derivative agriculture, but like raising crops or cattle or whatever, less than 2%. And yet they produce enough food for the United States and a few hundred million people. Same in Ukraine, although the number there is much higher, it's still about 15% and Ukraine produces food, used to produce food for 400 million people. So what we need is not going back to the farm. What we need is to extricate, to eradicate, to remove symbols from production, to decouple, to have a process of decoupling. It's legitimate to deal with symbols as long as you know that you're dealing with symbols and that your actions are not going to have real life consequences. And it's legitimate to deal with production as long as you know that your products and services could never be translated to symbols. Now you say, how can you do that? Money is a symbol. And so we end up always dealing with a symbol of some kind. Yes, that's true, but I'm talking about decision-making processes. Those who deal with symbols should not have a say in production processes. And those who deal with production should not have any involvement in the symbol processing part. There should be a middle layer which is now missing. This layer does not exist. There should be a middle layer mediators between the two. And those people should have no interest in either production or simple manipulation so that we can rest assured that everything remains in its place. So again, if I'm an investor and I have surplus money, one day I hope, I have surplus money and I want to invest it in a new startup who is producing a gizmo for, I don't know what, that's okay, that's the way to go. That's legitimate, of course we need this. But then what I do, I place it in a blind pool and I walk away and I trust the middle stratum, the mediators to do the job of due diligence, valuation, et cetera, et cetera. They come back with recommendations. I can decide to withdraw my money from the pool. I can decide to leave it in the pool, whatever. So we do have inklings of that. We have like mutual funds, we have hedge funds. We began to go this way and then somehow we didn't get there. I think because the whole system collapsed and there is some delusional weight, but we started to go there. There are some angel networks that already function a bit like that. And yeah, I think so, I see signals and if we look at the trends at the moment, there's definitely, we're heading that direction but I think to your point, there's a lot of work to be done. By the way, it's two-way. Like you have producers who interfere with symbol manipulation. It's not only one way. Microsoft is a producer and Amazon, Microsoft is a producer, I'm sorry, Intel. And yet they do interfere in symbol manipulation. They financially, for example. So we need to decouple. Otherwise we will end up with crash after crash after crash after crash. It will be an endless cycle. Now, capitalism is prone to clashes. That's been known since the 18th century. Capitalism technically is about six or 700 years old. So it's been prone to clashes because of over-evaluations, acid bubbles, I mean, you name it. It's prone to clashes. But if we go into the roots of crashes, we discover in each and every single one case, a mix, a confusion, a conflation of something real and something symbolic. Tulip mania, tulip mania. There were really tulips there. But the manipulation was manipulation of symbols, expectations, manipulation of expectations regarding the future value of tulips. There was an underlying real core, the tulips, but it got out of hand because people saw patterns, Pagadolia and Apophenia. And then they started to manipulate symbols, expectations, money. There was a stock exchange for tulips. So head, for example, if you take tulip mania, had there has been a strict separation between tulip production and sale and distribution and marketing and so on, on the one hand. And the ability to invest in tulips so that the investor side would have been totally isolated from the real side, I think this crash would never have happened. It's because people were trading symbols with each other. They were allowed to, that this crash had happened. And this is, and then just as a final question here, you touched earlier the topic of minorities, right? And if we think about how to bring balance into Southern Hemisphere technology, for example, African tech ideas coming from India, how do we get Northern Hemisphere venture capitalists or institutional money out there to see the opportunities that exist in there and particularly looking into technology that addresses supply chain transformation. There's no way we can actually transform supply chains if we don't bring the tech from Southern Hemisphere to a different level. Do you have any recommendations there? Ironically, the North-South Divine is a perfect ratification of everything I'm advocating. Because what happens? There's a divorce between innovation and simple manipulation and manufacturing. China stole intellectual property on a massive scale. So China became a manufacturing hub initially, not now, now they're innovating, but initially, but they became a manufacturing hub. So there was a manufacturing hub which was so far away in geographical terms and so remote, it was not under the influence of simple manipulators. And it became a major success story. It's a perfect example of what I'm saying. Perfect, it's an advocacy of what I'm saying. When you divorce the production from the simple manipulation, you get gigantic success stories like China. India, on the other hand, started this way, but then emulated the Western model because they were more exposed to the United Kingdom and so on. So India started the right way and overtook China at the beginning. India became a manufacturing hub, excellence, no symbols, no finance, no nothing, just manufacturing. But then they tried to emulate the West. And so now India is a mixture of simple manipulation and manufacturing, and it fell way behind China, way behind China. China started with financial experimentation, the yuan, not the digital yuan, aiming for convertibility of yuan, reserve currency. China started to manipulate symbols. Immediately, its economy started to contract. The growth rate of its economy is much lower now. And I see a direct connection between its emulation of the Western model and the slowdown in growth. So the minute we divorce these two functions, there's growth in both, there's growth in both. When we combine them, coming back to your initial question, for example, in startups, there are enormous failure rates. Startups is a laboratory. It's a laboratory of the capitalist dream. We are doing something wrong. The failure rate is enormous. And yet, the failure rate has been the same since at least the 80s, and no, everyone says it's normal. It's totally normal. No, it's not normal. If you look at innovation in the 18th and 19th century, the success rate was well over 70%, 70%. The hard grieves, weaving, the steamship, the locomotive, they were all invented in the 1970s, telegraph, I mean, you name it. It up until the beginning of the 20th century, most innovations were very successful. Extremely few innovations failed. Why? Why are we trapped in a reverse cycle? Okay, we think about that question, and there's not a right answer for that, right? It's very complex, but it's been really wonderful to have this conversation with you. I've learned a lot today. And thank you very much. Thank you for having me. I'm going to end the recording now, but you can stay on the Rikintop, if you wish. Let's stop recording. Yay!