There is a God, and his name is Trade-off

Alternate Title: Do you know what decimation truly means?

“What the fuck did you say?”

Welp. That was not the reaction I was expecting.

Now everyone else at the table was now looking at me like I was a leper.

Still, I tried to shrug it off; I repeated what I said. “You didn't think this could happen?”

There were three others sitting at the table — including Mauricio, the person that I was specifically talking to. We were at a bar, and he was already on his fifth beer. I could see that, between the grief, the alcohol, and the confusion, he was trying to figure out how to respond.

Eventually, he settled with the good old: “Fuck you man.” He tried to say it in a playful “I'm not bothered” kind of way, but I could tell that he was insulted.

Now of course, if you're on the internet for too long, then this is the part where I would stand up and show everyone else how alpha I am. But in the real world, there's nothing sexier than using your words to deescalate a situation.

“Nah, man, I'm not blaming you or anything; I just think it's a good lesson for the future.”

Let me back up for a second

Mauricio is a smart guy. We're the same age, and he's already a senior director at a very well-known company. He makes a ton of money, and takes very fancy vacations with pretty women.

In the early part of the pandemic, things were going well for Mauricio. He just got into a new relationship, and he was making a tidy profit off of his real estate side hustle.

Mauricio and I went to the same high school, and while I was the better student, he’s victory lapped me in terms of the traditional markers of success. He always tries to make it seem as if he got lucky, but it's just a mask for his gloating. I don't mind, he always pays for the drinks.

He would always try to get me on board with his real estate schemes, telling me that I just needed to put a down payment of so-and-so dollars, property would practically be a waterfall of cash flow. I would always politely decline, and every time he would tease me about how much money I was leaving on the table.

His rants were always some shitty version to the Glengarry Glen Ross “coffee is for closers” speech.

“Rohan, man, you got to look at the world for what it is. You're stuck in the past – while I see the present.”

Unfortunately for Mauricio, he should have been more focused on the future.

As it turned out, real estate wasn't as solid of an investment as he thought. When they started hiking the interest rates, it really fucked up his mortgage payments, as well as the value of his properties. Beyond this, he realized the tenants he had been dealing with were no longer around. As in, poof, they disappeared.

(That is a separate story in and of itself; the tenants were multinationals who wanted to be in the country just long enough to have children and get automatic citizenship. The moment the mom gave birth, they were gone. They were willing to pay top dollar while they were here, but now that they had left the country, good luck getting the rest.)

As a result, Mauricio found himself under water on his investments.

To make matters worse, he had basically exhausted his life savings in the properties. To make matters even worse than that, he had used a good portion of his girlfriend's money in order to fund everything — without actually telling the girlfriend. As far as he was concerned, it was guaranteed income.

The girlfriend was one of those high performing lawyer types, so it's not like her contribution to the joint checking account was insignificant.

One day it all came crashing down; Mauricio could no longer hide that he's underwater, and the girlfriend realizes that much of her own money is gone, and so she bounces on the relationship.

Back to the bar

So now me and three of my friends are sitting at the bar, listening to Mauricio talk about his struggles as he drowns his sorrows in mediocre beer.

Here's the thing. When it comes to situations like these, men are just as delusional as women. Sure, we all know about how women pump each other up, talking about how every girl is a ten, and that no man is good enough for her. But it's the same thing with guys; when Mauricio was spilling his guts about how his girlfriend wasn't “ride or die” – as if life is some fucking Fast and Furious movie – all the others at the table were hyping him on, reaffirming his beliefs.

“Fuck that bitch, bro.”

“She doesn't understand what she lost, bro.”

“She’s a whore, she only wanted you for your money, bro.”

After an hour of this, I couldn't help but say the truth: “You didn’t think that could happen?”

And that's when everyone at the table looked at me like I was a leper. As if I had broken this secret truth that we weren't going to bring this up right now.

In my old school internet edgelord days, I might have doubled down and started a debate. But now I've learned something about the irrationality of human emotions. I knew Mauricio wasn't in a position to hear the truth, and I'm old enough to pick my battles.

So I did what any reasonable human does: I pretended to listen to the remainder of the conversation while watching the UFC fights on the screen behind the bar. When I had finished my drink, I pretended I needed to get home for my dog – good old doggy, always rescuing me from social situations I don't want to be in. And then I left.

Guys like Mauricio are everywhere

Let me be clear about something. People are way more complicated than the internet would have you believe. Based on what you've read so far, you might get the impression that Mauricio is one of those old school Finance douchebag types. And in many cases, he is. Every so often he gets into a sigma grindset hustle mode, and pretends as though he's Christian Bale in American psycho.

He's also one of the kindest people I've ever met. He throws parties, and he always tries to make sure that everybody feels welcome. Despite being 6'4 and really handsome, he treats everybody with kindness and respect, and he is one of the most family-oriented people I've ever met.

I out-performed him in school, but he outperformed me in life because he's a likable person. People actually want to see him succeed. He's also very smart, and understands esoteric shit like quantum physics and ancient scriptures.

But guys like Mauricio have a problem. It's a problem that was really bad when millentials were growing up, and it's only gotten way worse now. It's not a problem of work ethic, nor is it a problem of intelligence. It has nothing to do with money, and it has nothing to do with lies.

No, the fundamental problem runs much deeper.

He doesn’t how to acknowledge trade-offs

About a decade ago, comedy writer David Wong wrote an article about the way people sabotage themselves. Since then, I've read maybe a hundred books on psychology, neuroscience, behavior change, and self-improvement – and I can honestly say that, in some form or another, that article distills all the lessons into a clean list.

It's not a preachy article, and it's not written by some delusional hustle/grindset bro looking to get you into crypto. It was just written by an author who writes dick jokes for a living, who noticed a repeating pattern with other failed authors.

The lesson that stuck out to me the most was the fact that people take on projects without realizing a part of themselves will die, deteriorate, or otherwise be neglected.

As he hilariously puts it:

Everybody takes on a project and expresses it as a pure addition to their life. It's, "I've decided I'm finally going to learn the saxophone!" Instead of, "I've decided I'm going to learn the saxophone instead of hanging out with my girlfriend!"

Economists like to use fancy words for these types of things. They say things like “opportunity cost” or “pricing in the externalities”. But the underlying principle is easy to understand.

Whenever people take on new jobs, they always think about the obvious things – the job title, the salary, etc. But they never factor in all those little things which seem insignificant at the time. Maybe the person sitting beside you smells like shit, or maybe you move to a department where the coffee machine is always broken, or maybe you have to sacrifice Monday Night Football because the team always puts their weekly reviews on that day.

When you write it out like this, it sounds stupid and obvious, but I genuinely think a good 80% of people run under the delusion that they won't need to make these sorts of sacrifices in their life. They don’t want to make some sort of ‘shit-smelling-coworker-to-extra-salary’ calculation.

As a result, when they see people who can actually price in the costs, it seems like magic to them.

Coming back to Mauricio, he wasn't the only person in my friend group who took out loans in order to get real estate investments. At some point, all of them had to brag about how much their property had appreciated, and how much money they were going to make.

And when they inevitably got fucked over, they talked about it like it was something they could have never seen happening. Even those who ultimately made a profit talked about how the experience was terrible, because they constantly had to deal with tenants and their bullshit.

Again, these are not dumb or lazy people. In fact, I think if they were dumber or lazier they would have had an easier time of things.

No, the issue is that they truly believe that they can solve all of their problems using their intelligence and hard work – because, after all, it's been a winning strategy in the majority of their lives.

Go to any gym in January

And you’ll see all the Mauricio’s of the world for yourself.

Every single year, without fail, you will see a whole swath of new people eagerly signing up, desperate to shed that belly fat that had been accumulating over the years.

You can see them huddled around the various machines, wearing the latest Nike shoes and Reebok shorts, knowing that this is the year they finally become extremely buff.

About 70% of them will be gone by January 23rd. They will have magically realized why they never achieved these goals in the first place. They will magically realized that they have families, that they have social obligations, and that every hour of their calendar is occupied. It might be occupied by some trivial and unproductive shit, but it's occupied nonetheless.

And in every single scenario, they choose that trivial and unproductive shit over going to the gym, without realizing they’re making that choice. And so, ten years, from now, they’ll fatter, more out of shape, and just as hopeless.

None of this is new

I think we have all seen people take on lofty and ambitious projects without any sort of plan, knowing full well that it's going to crash and burn.

But that's not what I'm here to talk about.

See, if it was just a problem with individuals, that would be one thing, but the truth of the matter is, the majority of the problems in the modern world today are downstream from this inability to acknowledge trade-offs.

The failure to acknowledge tradeoffs is destroying institutions

Similar to how most individuals are becoming fat and bloated, most modern corporations are similarly becoming obese. Instead of fat cells, however, the corporations are stuffed with unnecessary and unproductive bureaucrats. These are not the executives at the company, nor are they the everyday rank and file workers – rather, they are the middle managers. These are the people who hold titles such as manager, director, coordinator, facilitator, advisor, etc.

Most of the time, these people don’t actually have any tangible skills. They’re not coders, they don’t build things, they don’t sit on the front lines, and very rarely do they actually come up with productive decisions. They are a group of unimpressive elites, who have been trained in Business School. They come from the management paradigm of “creative destruction” and “triple bottom line” and “the new normal”.

As a result, they are unable to make decisions. And if they do, it must be clear that none of the decisions can actually be traced back to them. They do this by conducting a number of endless meetings, getting approval from consultants, and navigating a labyrinth of endless red tape.

Not all of these bureaucrats are useless. Only about 80% of them.

In my time working in consulting, one of my key roles was to discern the useless bureaucrat from actual leaders.

I would test them by presenting them with a scenario that required trade-offs. I would ask them a question similar to the following: “An engineer has to work on task X, task Y, and task Z. They all have conflicting requirements, and they all have conflicting deadlines. Which task should the engineer focus on?”

I don’t care which one they pick. I care that they actually use logic to come to a reasonable decision.

Unsurprisingly, the vast majority of bureaucrats fail this test, because picking one of the options involves making a decision, which is the antithesis to their modus operandi. Usually, they try to mask this inadequacy by saying something to the effect of: “All of these tasks are important”. Then they give me an answer as to how they can juggle all three simultaneously.

While this spares them the stress of making any decision, it pushes the stress of onto people who might potentially work for them — rendering them absolutely useless. Most institutions are dominated by this sort of paradigm, and that's why it feels as though most institutions have come to a grinding halt.

Even in technology, we can feel this degradation; tell me, has Google search improved over the last 10 years? What about Apple – what's the difference between an iPhone 15 and an iPhone 7?

These corporations have been destroyed by bureaucrats, and bureaucrats cannot acknowledge the trade-off.

This delusion is killing academia

Take the Harvard admissions scandal.

A group of Asian students sued Harvard on the grounds of discrimination. They pointed out a statistical discrepancy in the admissions rates, observing that black students were being admitted into Harvard at the same rate as Asian students, even though Asian students had far higher grades.

It would be one thing if their admissions department just came out and said: “Look, we’ve got tons of Chinese, Koreans, and Indians on our campuses. And quite frankly, most of them have been tutored to get good grades since before they could walk. This black person comes from a one parent household that earns $30,000 a year, so the fact that she’s even remotely as smart as you people is impressive.”

Setting aside the fact that most of the black people getting into Harvard also tend to come from privileged backgrounds, I can understand this logic. If I saw LeBron James dunk, I would be pretty impressed; if I saw a 5 foot 6 white guy dunk, my mind would be absolutely blown.

But of course, this is not what the admissions department does. Rather, they discriminate under the framing of equal opportunity. Then they pretend like the discrimination against Asians is not happening. And then, if anyone points out the statistical irregularities, they just call you a racist – because if it's one thing the KKK is known for, it's Chinese supremacy.

The academics simply cannot acknowledge the trade-off.

We see this play out in social issues as well

Let's talk about trans athletes in sports.

On some level it seems strange to devote so much thought to such a niche issue. But I realized it's just another symptom of the greater problem of failing to acknowledge trade-offs.

By analogy, let's take the professional cage fighter Jon Jones. At the time of writing this, he just defended his heavyweight title, cementing his legacy as one of the greatest fighters of all time.

If you know anything about mixed martial arts, you know that Jones has the perfect genetics for fighting: tall, lean, with freakishly long arms and legs. His genetics are undeniable; Jones has two brothers, and both of them are in the NFL.

If another fighter accused him of winning because has a genetic advantage over everyone else, the universal response would be “tough shit.”

But Jones has also been accused of taking steroids. It’s one of the scandals which puts an asterisk on his legacy. If another fighter accused him of winning because he took steroids, the universal response would be “cheater.”

Coming back to the trans issue: is being a trans woman closer to having Jon Jones’s genetic advantage? Or is it closer to Jon Jones taking performance enhancing drugs?

I'm not here to tell you the answer. Anybody reading this already has their own intuitions. The point is that this framing is more intellectually honest than the vast majority of the discourse around this issue.

Instead, the majority of the intellectual taste makers have already chosen a side, pretended as though there was no decision to make in the first place, and then called you a bigot if you questioned it.

They have to pretend there was no decision – because otherwise they would have to admit there is a trade-off taking place. They have to make a cold and calculated decision whether to give preference to biological females vs trans athletes. Any decision they make in favor of one group is going to come at the cost of the other.

The elites simply cannot acknowledge the trade-off.

This delusion is the reason why Trump got elected

Freddie de Boer wrote this post about deindustrialization in America.

He points out that neoliberals refuse to acknowledge the devastation that took place in many American cities when we decided to move manufacturing to China and other parts of Asia. Looking at factors such as crime, economic activity, obesity rates, and literacy rates, it is clear that many parts of the country — such as Gary Indiana or Detroit Michigan — have never really recovered.

As deBoer puts it:

Even if you think the globalization policies that caused deindustrialization were ultimately the correct ones, you have to account for the losers and what it cost them.

Neoliberals won't do this sort of accounting. From their perspective, this is just another example of the management paradigm of “creative destruction.” But of course, creative destruction is an easy paradigm to adopt when you are the one doing the creating and someone else is getting destroyed.

That's why the neoliberal paradigm is so repulsive to so many people. They never have to acknowledge any mistakes; they can always say “well, it's good for everybody in the long term” while being vague about what that timeline actually is, while ignoring the immediate pain that people have to go through.

Because, for these New York Times reading liberals, things have always worked out for them. They've always had big mommy’s invisible hand guiding them up the corporate and social ladder, soothing them whenever they have a boo boo.

For all of Trump’s faults, he doesn't live in this fantasy land where everything is always going to serve everybody's benefit. When he talks about tariffs, he doesn't shy away from the fact that it will harm the Chinese; when he talks about war in NATO, he doesn’t shy away from the fact that Europe is going to suffer, because they will actually have to start paying their dues; when he talks about immigration, he doesn't shy away from the fact that illegal immigrants are going to suffer.

Time will tell whether his policies will actually prove effective, but at the very least he is able to acknowledge the trade-off.

Do you know what decimation actually means?

“Deci” is the prefix for one tenth.

Decimation was an ancient Roman punishment, where one tenth of the army would be randomly selected to be stoned to death. The idea was that decimation would make the remaining soldiers work harder during the campaigns.

Neoliberals love the idea of decimation. “Sure, it's barbaric, but in the long term it creates a better army.”

It's easy for them to tout this sort of reasoning, because they don't ever see themselves as being decimated, and they don't know anybody in their life who has. For them, it's just a philosophical concept, little more than a trolley problem. And so they are left absolutely confused as to why the common soldier ultimately rises up and rebels.

They simply cannot acknowledge the trade-off.

My criticism is not just against neoliberals

The nature of my work frequently puts me into contact with tech workers – people who approximately have the same worldview as Silicon Valley natives like Marc Andreessen, a guy who recently went on Joe Rogan.

This essay by Andreessen is hilarious – unironically entitled “Why AI will save the world.”

He endorsed Trump, and he has been known to criticize bureaucrats who stand in the way of progress – but he largely has the same worldview as any vanilla neoliberal. He has a reflexive inability to point out that technological progress will have winners and losers – permanent winners and losers.

I would respect him much more if he just said: “Look, I make a lot of money if AI companies make profit, so that's why I'm voting for Trump.” Rather, people like him try to gaslight society into believing that there is some sort of moral foundation for his beliefs. Google “The Techno Optimist Manifesto” to see what I mean.

The effective altruism community has a similar issue. They believe that you can aggregate a person's experience into a single utility function. They have no problem letting someone else's life get worse by 20% if it means somebody else’s gets better by 30%. Overall it's a positive expected value, so why wouldn't they take that trade?

Once more, I don't really have a problem with this sort of analysis – my problem is when they apply this analysis on to other people, knowing full well that they themselves will be immune from the same sort of calculation. They never have to envision a future where they are on the wrong side of the trade-off – because that would mean acknowledging the trade-off in the first place. And of course…

They simply cannot acknowledge the trade-off.

“We” are not pregnant

I've always found it weird when a couple proudly proclaims “We are pregnant.”

In the back of my mind I always look back and forth between the man and the woman and ask myself: who is we?

Of course, I understand why people phrase it like this. It's generally impolite to say “I impregnated my wife.”

Nevertheless, when you say “We are pregnant”, it makes it seem like the man is going to be pregnant for the first four and a half months, before doing some sort of NFL style handoff to the woman so she can complete the mission.

It sounds trivial, but I think it's a microcosm of the greater delusion. It's the sort of slimy language that allows people to hide the costs and benefits, and how those costs and benefits get allocated. It's the sort of delusional thinking that people like Mauricio have, believing that their investments will never fail.

It's the sort of sanitized language that middle managers use in order to avoid any sort of accountability. “We have to work overtime.” No, I have to work overtime because you are a shitty bureaucrat who doesn't know how to make decisions.”

‘We’ are not pregnant, Derek. You got her pregnant. For the next 9 months, she is going to have cankles and a weird craving for roast beef; and you're going to be sitting around, drinking beer and watching college football with the boys.

I’ve tricked you

Believe it or not, you just read an entire post about ethical philosophy.

Broadly speaking, the philosophical discussion of ethics bifurcates into two categories:

1. Consequentialism is the idea that we should judge right and wrong based on the results it produces.

2. Deontology starts with following a list of rules, and adhering to those rules no matter what.

For the majority of my life, consequentialism has always been intuitively true to me. We need to judge the morality of an action based on the effect it has on the real world.

But lately I've started to see the pitfalls in this sort of thinking at every level.

At the personal level, there's the incident at the bar, watching Mauricio pitifully drained beer after beer after his girlfriend left him.

At the societal level, we can see this play out everywhere.

Let's take the most recent fight between Jake Paul and Mike Tyson. From a utilitarian perspective, this event was a success: Jake Paul got paid, Mike Tyson got paid, Netflix got over 60 million concurrent viewers, and everybody got to watch a spectacle.

But if we take a step back, what does it say about us that we allowed this to happen? What does it say about us that we eagerly watched a 27 year old beat up a 58 year old for eight rounds? And it was hardly as though Tyson was healthy; 6 months prior to the fight, he had a severe ulcer that nearly killed him! The operation was so bad that he lost half of his blood volume, and required no less than eight transfusions!

What does it say that we let this fight happen anyway, under the excuse of “well, he got paid, didn’t he?”

This is the downfall of consequentialism; anything becomes permissible if there's enough utility to it – and essentially everything has enough utility if you fail to account for the trade-offs.

The Lesson

If it's one thing I want you to take away from this post, it's this:

It's easy to be a consequentialist when you don't actually have to deal with the consequences.

It's easy to “break a few eggs to make an omelet” when you're the one who gets to eat, and everyone else is left with the shells.

It's easy to talk about how America is the richest nation in the world when you live in Alameda rather than Appalacha.

It's easy to talk about solutions, when you don't have to acknowledge the trade-off.

For the rest of us, those who are forced to live in reality, we realize that there are no solutions, only trade-offs. So please, for the love of god, start acknowledging them. Otherwise you end up like Mauricio, face down in five cups of beer, crying about your shitty investments.