ALMOST 60% OF PEOPLE SUSPECT FOREIGN COUNTRIES engaged in “information manipulation” according to a Japanese Foreign Ministry poll, with increasing numbers of people claiming they verify or fact-check the information they read online as AI-related disinformation continues to proliferate at an increased pace.
Thought bubble: It won’t be long before live-action AI deepfakes make almost everything online untrustworthy. The question is, will this prove a pathway to chaos, or a pathway to liberation? We’re told there’s a contingent of cypherpunks who believe deep fake apotheosis could restore functional democracy both by rendering kompromat unusable — liberating politicians accordingly — but also by forcing campaigning back into the realm of face-to-face relations. The theory is that deep fakes will render professional influence ops ever less powerful because everyone will be inclined to verify everything at source or crosscheck it against their own interpretation of reality.
IZZY COMMENT: WHAT IF EVERYTHING IS AN ACTIVIST INFLUENCE OP?
Apologies if you’re the sort of person who already knows all of this. If you are, kudos to you, because it’s taken me 45 years to figure this out — something that speaks of my naivety, clearly. Of course, now I’ve seen it, I can’t unsee it. And I am seeing it almost everywhere.
But even if you are that person don’t look away just yet, because I think there may still be value in how what you know fits in with what I know. And what it says about where we are in the world right now.
What I’m talking about is how the world of NGOs, think tanks, lobby groups and political campaigning intersects with the real world of working people just getting on with their life and trying to make an honest living or livelihood.
I suspect, if you’re anything like me, or if you hail from the world of finance or investing (unless you’ve made it to the philanthropist level) that this mysterious world of civil society organisations will be as alien to you as it was to me. As will its lexicon. If you’re a journalist, meanwhile, unless you are actively involved in covering party politics, human rights or political activism (or were involved in such things as a student) you too will be unfamiliar.
Cards on the table first.
It’s no secret that I have spent most of my life trying to avoid covering politics or policy. This is largely because the struggle to influence people and the backroom-dealing that comes with it has always struck me as incredibly tedious, inefficient and self-serving. I always preferred to “rise above it” by focusing on the people and organisations adding real value to the economy by doing useful things. Those squabbling over how other people’s surpluses should be reallocated just didn’t interest me.
The only time I ever went to a protest was to protest against the second Iraq war, and even then I didn’t feel at all welcome or like it was my sort of thing. My only other encounter with the brute face of “civil society” organisations (aside from the media itself) was during my time in Azerbaijan and Afghanistan in the early noughties, which left me largely unimpressed with the entire sector and shocked by the asymmetry of the lifestyles of those working in the sector and those of other comparative “doers” in the economy. My main reflection was just shock and relative disgust at how much money these organisations were throwing about, mainly on exporting Western standards into their own gated communities, in contrast to the actual impact they were actually having on the ground. Western saviour syndrome, as it has now been deemed, seemed a genuine thing that I wanted very little to do with.
All the wrong sort of people seemed to be on the ground. Those actually adding value, ironically, seemed to be the corporates developing engineering projects, bottling plants or other commercial activities.
But it seems it’s precisely because people who are allergic to the squabbling in the non-profit and campaign sector have looked away from it for so long that the whole thing has run away with itself. What I suspect the finance world has missed as a result is the degree to which “inclusive organisation” practices, initially designed to temper the squabbling in the distributive sector of the economy, have over time created something much worse: an insidious and dangerous type of liberal authoritarianism, which masquerades as inclusive but is actually anything but.
These practices seem to have embedded authoritarianism into the counter-culture in the name of making it more efficient at competing with purely hierarchal and meritocratic organisations such as those found in the military or the corporate sector.
Again, what us common folk have missed (perhaps because we were busy doing value-adding stuff) is how these practices – which mostly stem from activist counter-culture groups – have bled into and infected the adjacent productive economy as well as more traditional institutional frameworks, much to their detriment.
This, I think, is the patient zero of wokeism. And if you don’t believe me, just take a gander at the activist handbook and the terms and recommendations that lie within it. It will all be very familiar to you. It might also remind you of the new corporate practices that managers are being asked to adopt almost everywhere.
Tyranny of the sticky note
The most notable way activist organisation has traditionally differed from conventional corporate or institutional executive management is with its obsession with continuing and ever-expanding feedback, so that decision-making appears equitable to the group or organisation at all times.
In reality, nothing is really equitable. Effective decision-makers are either sidelined by the tyranny of the masses — something that leads to stupid ideas like destroying the Magna Carta as a strategy — or forced to resort to established playbooks regardless. These playbooks, for some reason, are almost religiously observed and never questioned, regardless of how many over-privileged colonialists developed them. Probably because they are very effective toolkits.
The exercise of creating the optics of inclusivity, however, ensures 10 times the number of meetings and 10 times the number of funding are needed to get anything under way.
In the end, as with many IT projects, when time pressure eventually demands action, it’s the established playbooks that ultimately dictate strategy. What has worked in the past is deemed fundamental. More often than not, this means engaging in unquestioning repetition of the core message in as many avenues as possible and as much backdoor dealing to get key influencers to amplify or convert your message as possible. Whether you’re pushing blockchain, Uber or Net Zero, “adoption” and persuasion are judged to be key performance indicators, not the bottom line.
While I’m still refining my thoughts on what this means for markets and finance, not to mention the economy at large, my hunch is that a useful way of linking the two worlds is by thinking of voters as investors whose allegiance, rather than money, is being sought after. That means breaking them up as follows: 1) passive but sophisticated, 2) passive but unsophisticated, 3) active but sophisticated, 4) active but unsophisticated.
Sophistication, in this case, equals awareness of how the influence playbook operates, while activism can be judged by how engaged a person is in policy formation or how sensitive they are to policy adaptation (the more passive you are, the happier you are to entrust third-parties to take the helm on policy formation).
The archetypal passive unsophisticated voter is someone who votes the way they do because they’ve always voted that way, and trust the custodians of their votes to work in their interests. That means they are usually blissfully unaware of all the backroom politicking that goes on on the activist side, meaning they can only be “turned” if the party itself is turned without them noticing.
But the analogy is useful for another reason, too.
Consider, for example, that financial sector participants have historically always fought over the right to influence where rents generated from productive investments should be reallocated in a bid to make even more surplus and thus wealth for everyone.
Measuring success in this world used to be relatively easy. Investments either made money or they didn’t. When they did, allocators were awarded with even more capital. When they didn’t, investors lost trust and the operations collapsed. In theory, it was all mutually beneficial.
While civil society participants also fight over the right to influence where rents generated from productive investments (usually stemming from taxes or donations) should flow, their objective is not to reallocate them to make even more surplus, but rather to achieve a far more abstract and subjective outcome, that of “social justice”.
But measuring success in this world is much harder, since nobody can agree on what defines success. More worryingly, there is also no definitive indicator of failure. Operations that end up doing the opposite of “social justice”, i.e. social harm, have no mechanism for self-correction. They persist, and continue to influence where even more rents get to go, regardless of how poorly they impact society.
Eventually, such “longevity without accountability” encroaches on the efficacy of corporates to make profits directly themselves. They in turn inevitably resort to similar tactics to fend off and protect themselves from civil society organisations.
In the process, everything has become fused. Corporates have become increasingly dependent on regulatory capture and/or taxpayer support to protect their operations. And yet, to obtain such protection they require narratives that cast them as more than just profit-oriented organisations, but rather as ones with social good impulses, too (banking being an obvious example). This in turn provides civil society organisations an “in” for direct influence at the corporate level, extending their capture beyond government and over to business and industry too.
To wit, a totally abstract measure of “social justice” — as defined by largely non-productive social players — rather than profit or productivity becomes the defining metric by which all entities are increasingly measured. Yet, somehow, we are all supposed to be surprised that productivity is languishing across the board as corporates focus ever more of their balance sheet on non-core social good activity rather than profit-maximisation.
This leads us to where we are now. A situation where corporates can no longer be trusted to deliver wealth in the usual way (with inflation a key outcome) and where civil society organisations — for ideological reasons — refuse to cater to those who actually need their help.
What happens next is harder to predict. But one likely pathway is a war between the common working man – who has finally become wise to the fact that no party really represents his interests – and the vested interests that maintain superiority only by keeping him down.
Brexit and Trump, in that analogy, rather than representing the moment of systemic collapse, proved more of a Bear Stearns moment for politics. Indeed, the systemic collapse is yet to come precisely because the underlying issues revealed by Brexit and Trump shock are yet to be resolved and have since grown and festered.
Viewed from that perspective, what is happening with the Tory party right now has the makings of a truly systemic bank run.
But while passive and unsophisticated voters may have finally awoken to the capture at the heart of the system, a true ontological collapse will only come if and when they come to believe there is nowhere safe for them to reallocate their votes, because any new party will be beholden to the exact same corrupting forces.
What comes next is likely a push for regime change beyond the scope of the democratic system we have.
| BUSINESS, ECON AND FINANCE |
UBER SHARES SANK AFTER THE RIDE HAILING COMPANY posted a “surprise” quarterly loss, and undershot revenue expectations by more than $1.1 billion, losing almost 9 percent of stock price value. While this may have come as a surprise to most, a smart Redditor found it was Uber’s surprise beat announced in previous earnings in 2023 that had been mis-assessed by the market. These beats had far more to do with the bump in valuations of three Uber holdings, Aurora Innovations, Didi and Grab, than an actual operational improvement. The mediocre earnings from their ride-sharing app persist.
No surprise for Blind Spot readers: Aviation expert Hubert Horan has long warned the market that reports of Uber “profits” should never be taken at face value because the mainstream media and the analyst community seem to be lapping up the top lines of Uber press releases without any critical thought. As he noted to us in August 2023 (the last time the media went nuts about supposed Uber profits) “the $392 million GAAP profit was totally explained by $386 million in alleged appreciation in the non-tradeable stocks it holds (Didi, Grab, Aurora, etc). One presumes that short-term fiddling with numbers could easily create the net $6 million profit.”
Also buried in footnotes at the time, he noted, was the fact that Uber had pushed payment for their UK tax liability into the next accounting period.
A bespoke algorithm hunch: Horan’s suspicion at the time was that improved profitability was the result of Uber expanding its margin take from fares, but also in developing algorithms “for tailoring customer prices based on what they believe individual customers would be willing to and tailoring driver payments so they are as low as they think drivers need to accept trips.” This would create a situation where different passengers/drivers making the same trip would be charged very different rates based on their propensity to pay or be paid.
BOE DEBANKING: Former Bank of England economist, Andy Haldane, said in a speech he was debanked just like Nigel Farage because of his Bank of England “political connections”. As Haldane pointed out the unbanking is deeply worrisome for a number of reasons. “One, I wasn’t working for the Bank of England [by that point]. Two, the Bank of England is by statute independent from government. Third, the Bank of England was their regulator, so the risk was to their regulator.”
The path to hell is paved… with KYC. Haldane noted that while the regulations had been imposed with “the best of intentions” they were now “chilling risk appetite and forestalling investing”. He said many new rules introduced by the government and regulators were “penny wise but pound foolish”.
IZZY COMMENT: It’s time to recognise that the KYC and AML regime that has emerged from the work of the Financial Action Task Force has entirely failed in its key objective: that of fighting crime.
Had the strategy actually worked, over 30 years of anti-money laundering policy should by now have suppressed human trafficking, terrorism and illegal drug dealing. But it hasn’t. These have all expanded in that time. Why? Because actual policing of crime has been outsourced to institutions not equipped for such work. At the same time, the regime has allowed finance ministries and central banks to encroach on the expertise and jurisdiction of judicial authorities. This in turn has blurred the lines between criminality and political activism, since all meaningful value transfer is now an activist influence op.
To revisit our takedown of the FATF system, see here, here, and here.
| POLITICS, POLITICS, POLITICS |
ROLLING STONE CLAIMED POLITICO MISSED THE MARK in its “who’s who’ of the pro-Palestine protests against Joe Biden. Politico initially published a story suggesting that top Democratic donors including the Bill and Melinda Gates Foundation had been funding the pro-Palestine groups organising massive US-wide protests. But according to Rolling Stone, it was wrong to tie the funding from the Tides Foundation, a sprawling liberal donor-advised fund, to pro-Palestinian groups with donor funds given to the Tides Foundation because “tracing money from individual donors, through a donor-advised fund, to any ultimate grant recipient is unwise, and particularly so when the donations involve such a large group like the Tides Foundation”.
Donation laundering: Nothing is as it seems, however. By Rolling Stone’s own admission, Politico’s story had attempted “to trace relatively small donations through a massive black box, a group that acts as a pass-through entity, into specific recipients’ coffers — something that dark-money reporters generally know to avoid.” This seems to us the important bit. The fact that black boxes like this dominate the sector, and that pathways between donors and causes are so obscured no journalist can make heads or tails of them.
The downstream hijacking of donated capital: Worth thinking about is what happens when groups awarded Western capital to fight specific causes, especially abroad, decide to redirect that capital back to its source? It is a type of blowback, arguably, that hasn’t been fully appreciated yet. A good example might be money sent to help pro-democracy movements in authoritarian countries that is deemed ineffective for as long as authoritarians can claim Western countries are subscribing to equally authoritarian tactics. Such groups might then be convinced to redirect some share of those funds to activist orgs pushing back against … Joe Biden or Justin Trudeau.
RUSSIA’S FOREIGN INTELLIGENCE SERVICE CLAIMED THE UNITED STATES was intensifying its efforts to find a replacement for Zelensky as the President of Ukraine. Allegedly, Washington has been contacting former Ukrainian President Pyotr Poroshenko and other Ukrainian leaders, in order to replace Zelensky should the situation on the front line deteriorate sharply. This news came just before the Russians began advancing in the Kherson region, in what appears to be the first major offensive in Ukraine since the failed Ukrainian counter-offensive that began last summer.
| CULTURE WARS |
MIT BANNED THE USE OF DEI STATEMENTS in the hiring of faculty members and promotions, the university claimed this week. In what appears to be a significant turning point in the use of DEI in elite universities, MIT decided that “compelled statements impinge on freedom of expression, and they don’t work”, as MIT President Sally Kornbluth explained to UnHerd.
| SPACE RACE |
UPCOMING MOONBASE: The United States, Russia and China announced new details regarding their upcoming moonbase projects. According to Newsweek, China and Russia’s lunar project — the so-called International Lunar Research Station (ILRS) — has been progressing, and they are “seriously considering” the inclusion of a nuclear reactor on the surface of the Moon by 2035. Meanwhile, NASA just outlined its plans to build a levitating robot train, known as FLOAT (Flexible Levitation On A Track), on the moon’s surface for the transportation of goods.
DARIO COMMENT: The new space race is heating up. And, unlike the original showdown between the United States and the Soviet Union, this one isn’t about getting there first. Instead, it’s about location, location, location.
The Chinese and Russians are leading this effort alongside Venezuela, Pakistan, Azerbaijan, Belarus, South Africa, Egypt, Thailand and Nicaragua. While the plan is to have a base ready by 2035, which will include comprehensive scientific facilities, along with all-around basic functions, the other goal is to build a well-equipped and stable facility for permanent human habitation by 2045.
The Chinese and Russian strategy is for their moon base to commence its first mission in 2026, and then to establish a base with fully remote, robotic capabilities in a project planned for 2028.
Meanwhile, NASA’s own Moon project — Artemis — which originally planned to put humans on a new moonbase by 2024, is still being plagued by delays. Artemis is now hoping to launch in September 2026 with its first crewed landing, but will likely not land until 2027, according to the US’s Government Accountability Office.
That’s not to say the Russians and Chinese haven’t faced delays too — the Russians’ 2023 Luna-25 launch failure was a significant project setback — but the Artemis project in comparison is suffering from its over ambitious nature.
Unlike the Russians and the Chinese, whose project appears to be focused on permanent habitation of the moon, the Artemis project aspires to create a jumping-off point to colonise Mars.
Firstly, it is intensely focused on astronaut safety. The original Apollo missions exposed NASA astronauts to massive risks, so the Artemis missions are aiming to reduce the risk of mission failure from 10 percent to 0.1 percent.
So why is this new space race all about location, when their objectives are different? Both missions have set their sights on the same area of the moon for permanent habitation: the lunar South Pole.
This area is particularly interesting due to the presence of frozen water trapped inside craters which also benefit from significant shading in an area otherwise privy to near-constant sunlight. This is critical for two reasons: 1. Drinking water; 2. Because one could extract hydrogen from the ice to allow for the refuelling of spacecraft bound for re-entry missions to Earth, or for missions to Mars. Additionally, these areas would be shielded from the intense radiation of the sun, meaning they are ideal locations for the placements of lunar bases.
What’s critical about the lunar South Pole, according to NASA head Bill Nelson, is that the prime real estate is limited. But also because there is only so much water in certain craters. That makes it all an old-fashioned resource rush. If the Chinese get there before the Americans, they’ll say “this is ours, you stay out”, Nelson believes.
Another reason why Nelson is worried about the Chinese project is because “most of it has some connection to their military”. Of course, NASA itself is arguably a civilian-led space department in name only. Practically speaking, it’s been a de facto parallel department of the United States Department of Defence since its inception, engaged in furnishing cover stories for covert operations, monitoring Soviet missile tests, and supplying weather data to the US military.
But returning to the race itself, and considering the importance of speed as emphasised by Nelson, one could question the priorities of the Artemis program, since it focuses on pilot safety and human-led exploration, as opposed to the robot-first approach of Russia and China. This human-led approach is prioritised because it’s very complicated to program robots to face all the eventualities that could arise in the building of a moonbase.
But will a human-led approach, emphasising efficiency and quality, matter if the Chinese and Russians claim all the best real estate first — albeit with dingy robots?
Only time will tell which approach will reward each power with the best lunar real estate. In the meantime, buckle up your seatbelts and sit tight until 2026.
| HOLY WARS |
G7 POPE: The Pope is back as a geopolitical force having accepted Italian premier Giorgia Meloni’s invitation to attend the G7 meeting of global leaders which takes place in Puglia on June 13. This is the first time in history that a Pope will attend a G7 summit, which this year aims to focus its attention on the rise of artificial intelligence.
DARIO COMMENT: Pope Francis’ unexpected acceptance of this invitation by Italian President Giorgia Meloni comes amid a nadir in the Church’s position within geopolitically influential Western countries, for its neutral position on the Russian-Ukrainian conflict. The internet is now filled with interpretations as to why the Pope has embraced such a “multipolar” geopolitical strategy. And despite assurances to the contrary, it wouldn’t be unsurprising if the Pope did more than focus on AI during this summit.
Officially, the Pope’s presence comes alongside the Vatican’s creation of the Rome Call for AI Ethics. This document, signed by the Vatican Pontifical Academy for Life, Microsoft, IBM, FAO and the Italian Government, promotes an ethical approach to Artificial Intelligence. It is essentially a wish list of what we fervently hope our future robotic AI overlords won’t do (pretty please): respecting the dignity of the human person, putting mankind as AI’s central preoccupation, and ensuring AI doesn’t have as its sole goal “profits or the gradual replacement of people”.
This Rome Call for Ethics comes alongside the Vatican’s creation of the RenAIssance Foundation (the Vatican’s marketer deserves a raise), which will function as the think-tank that promotes and encourages the dissemination of the Rome Call for AI Ethics. It also has an interesting logo:
As for what the Pope will actually do at the summit, it’s anyone’s best guess. But, as he admitted last year in Budapest, it’s worth remembering the Pope is working on a “secret mission” to attain peace in Ukraine.
Though, of course, it’s precisely this mission that got Pope Francis in hot water with the Western mainstream following the Russian invasion of Ukraine. Just prior to Russia’s attack, the pontiff had claimed NATO was “barking at Russia’s door”, and suggested that Russia’s president had been acting on legitimate security concerns. Since then, the Pope has defined the invasion as “unacceptable, repugnant, barbaric”, but he has continued to draw the ire of Western spokespeople and journalists for his ceaseless calls for Ukrainians to be “brave enough” to raise the white flag.
Search online for these results and you’ll get several interpretations as to how this represents a massive shift in Vatican policy.
The Atlantic claimed this “represents a dramatic break with the Vatican’s traditional philosophy” of geopolitics. Traditionally, “the Holy See has practised what academics call the “great power” model of diplomacy”, where it attaches itself to the superpower of the day. It goes on to outline why this historically meant de-facto alliances with the Holy Roman Empire, the French monarchy, or the Austro-Hungarian Empire.
More recently, this “great power” trajectory appeared to be underpinned by Rome’s attachment to Western powers and its ferocious alliance with anti-Communist powers in the Cold War, especially acute in the era of Pope John Paul II, who hailed from Poland.
But when these online pieces aren’t flat-out condemning the Pope’s call for peace, they’re claiming the Vatican’s supposed multipolar strategy is about one thing: demographics.
By 2000, there were around 1.1 billion Catholics around the world, with only 350 million of them in Europe and North America. The overwhelming majority, 720 million, lived in Latin America, Africa and Asia. Soon, only one in five Catholics will be non-Hispanic Caucasians.
So, perhaps the reason for the Pope’s neutrality on the conflict is because the global South, where the majority of the Church’s flock now resides, sees the Ukrainian conflict as a European affair. As such, it makes sense that the Pope is calling for peace in this conflict, far-removed from its true centre of influence.
What is a little harder to understand is why Western journalists can’t understand the obvious: The Vatican hasn’t changed — the West has.
The Vatican’s prime directive in most conflicts has been to counsel for peace. When Chile and Argentina almost went to war in 1978 over the Beagle Canal in Tierra Del Fuego, only the Pope’s intercession saved the region from all-out war. When the United States invaded Iraq, Pope John Paul II was one of the world’s most vocal opponents. More recently, his intercessions among feuding factions of South Sudan pushed the president of the country to lift a suspension in peace talks between his government and opposition fighters in February of 2023.
The exceptions to that have been the Vatican’s use as a financial conduit for anti-Communist guerillas and other covert shenanigans during the Cold War, and Pope John Paul II’s agitations for the Solidarity movement in Poland. Here, the Vatican clearly took a side — a position which could have easily degenerated into war. But remember: these were anti-Communist positions — arguably the most threatening movement to Catholicism since the rise of Protestantism.
That the Vatican is calling for peace should be seen as nothing other than exceptionally unremarkable. The inability of Western journalists to see this obvious fact is more revealing. It suggests the West’s encouragement of the conflict in Ukraine can’t stand up to the most basic of moral scrutinies: that peace is always preferable to war in most people’s minds.
| SNEAK PEEK |
— Izzy argues that the real economy is being stifled by management techniques inherited from the activist and civil society realm that turns everything into a data-driven influence op.
— Dario updates readers on the new space race to conquer the moon.
— Why the Vatican has created a renAIssance foundation to help protect humanity from AI.
Happy Sunday evening,
Apologies for the delayed send-out. It’s been a busy and hayfever-ridden week, capped off by the death of investor legend, Renaissance Technologies’ Jim Simons. There is so much to say about the subtle influence of Simons and Renaissance on almost everything, but we sadly don’t really have time to start that journey now. It is, however, fitting that this week’s newsletter should inadvertently already be structured around so many of those linkages – whether in terms of party political endowments and influence ops or artificial intelligence — even before news of Simons’ death publicly broke.
A lot of people will not know, for example, that Renaissance’s Robert Mercer and Peter Brown were significant contributors to the development of large language models, and that the technology was readily seized and pioneered by the hedge fund nearly 30 years ago. Add Jim Simons’ links to the NSA, Mercer’s funding of Cambridge Analytica and the ongoing discrepancy between the outperformance of its closed Medallion fund with that of its opened funds, and you’ve got the recipe for an influence operation unlike any the world has ever seen.
But more on how a sovereign state might have used a hedge fund structure to monetise its information advantage in the markets next week.
As usual, this newsletter was brought to you by Izabella Kaminska and Dario Garcia Giner.
Send tips to [email protected] and [email protected]
| THE BIG BLIND SPOT THIS WEEK |
ALMOST 60% OF PEOPLE SUSPECT FOREIGN COUNTRIES engaged in “information manipulation” according to a Japanese Foreign Ministry poll, with increasing numbers of people claiming they verify or fact-check the information they read online as AI-related disinformation continues to proliferate at an increased pace.
Thought bubble: It won’t be long before live-action AI deepfakes make almost everything online untrustworthy. The question is, will this prove a pathway to chaos, or a pathway to liberation? We’re told there’s a contingent of cypherpunks who believe deep fake apotheosis could restore functional democracy both by rendering kompromat unusable — liberating politicians accordingly — but also by forcing campaigning back into the realm of face-to-face relations. The theory is that deep fakes will render professional influence ops ever less powerful because everyone will be inclined to verify everything at source or crosscheck it against their own interpretation of reality.
IZZY COMMENT: WHAT IF EVERYTHING IS AN ACTIVIST INFLUENCE OP?
Apologies if you’re the sort of person who already knows all of this. If you are, kudos to you, because it’s taken me 45 years to figure this out — something that speaks of my naivety, clearly. Of course, now I’ve seen it, I can’t unsee it. And I am seeing it almost everywhere.
But even if you are that person don’t look away just yet, because I think there may still be value in how what you know fits in with what I know. And what it says about where we are in the world right now.
What I’m talking about is how the world of NGOs, think tanks, lobby groups and political campaigning intersects with the real world of working people just getting on with their life and trying to make an honest living or livelihood.
I suspect, if you’re anything like me, or if you hail from the world of finance or investing (unless you’ve made it to the philanthropist level) that this mysterious world of civil society organisations will be as alien to you as it was to me. As will its lexicon. If you’re a journalist, meanwhile, unless you are actively involved in covering party politics, human rights or political activism (or were involved in such things as a student) you too will be unfamiliar.
Cards on the table first.
It’s no secret that I have spent most of my life trying to avoid covering politics or policy. This is largely because the struggle to influence people and the backroom-dealing that comes with it has always struck me as incredibly tedious, inefficient and self-serving. I always preferred to “rise above it” by focusing on the people and organisations adding real value to the economy by doing useful things. Those squabbling over how other people’s surpluses should be reallocated just didn’t interest me.
The only time I ever went to a protest was to protest against the second Iraq war, and even then I didn’t feel at all welcome or like it was my sort of thing. My only other encounter with the brute face of “civil society” organisations (aside from the media itself) was during my time in Azerbaijan and Afghanistan in the early noughties, which left me largely unimpressed with the entire sector and shocked by the asymmetry of the lifestyles of those working in the sector and those of other comparative “doers” in the economy. My main reflection was just shock and relative disgust at how much money these organisations were throwing about, mainly on exporting Western standards into their own gated communities, in contrast to the actual impact they were actually having on the ground. Western saviour syndrome, as it has now been deemed, seemed a genuine thing that I wanted very little to do with.
All the wrong sort of people seemed to be on the ground. Those actually adding value, ironically, seemed to be the corporates developing engineering projects, bottling plants or other commercial activities.
But it seems it’s precisely because people who are allergic to the squabbling in the non-profit and campaign sector have looked away from it for so long that the whole thing has run away with itself. What I suspect the finance world has missed as a result is the degree to which “inclusive organisation” practices, initially designed to temper the squabbling in the distributive sector of the economy, have over time created something much worse: an insidious and dangerous type of liberal authoritarianism, which masquerades as inclusive but is actually anything but.
These practices seem to have embedded authoritarianism into the counter-culture in the name of making it more efficient at competing with purely hierarchal and meritocratic organisations such as those found in the military or the corporate sector.
Again, what us common folk have missed (perhaps because we were busy doing value-adding stuff) is how these practices – which mostly stem from activist counter-culture groups – have bled into and infected the adjacent productive economy as well as more traditional institutional frameworks, much to their detriment.
This, I think, is the patient zero of wokeism. And if you don’t believe me, just take a gander at the activist handbook and the terms and recommendations that lie within it. It will all be very familiar to you. It might also remind you of the new corporate practices that managers are being asked to adopt almost everywhere.
Tyranny of the sticky note
The most notable way activist organisation has traditionally differed from conventional corporate or institutional executive management is with its obsession with continuing and ever-expanding feedback, so that decision-making appears equitable to the group or organisation at all times.
In reality, nothing is really equitable. Effective decision-makers are either sidelined by the tyranny of the masses — something that leads to stupid ideas like destroying the Magna Carta as a strategy — or forced to resort to established playbooks regardless. These playbooks, for some reason, are almost religiously observed and never questioned, regardless of how many over-privileged colonialists developed them. Probably because they are very effective toolkits.
The exercise of creating the optics of inclusivity, however, ensures 10 times the number of meetings and 10 times the number of funding are needed to get anything under way.
In the end, as with many IT projects, when time pressure eventually demands action, it’s the established playbooks that ultimately dictate strategy. What has worked in the past is deemed fundamental. More often than not, this means engaging in unquestioning repetition of the core message in as many avenues as possible and as much backdoor dealing to get key influencers to amplify or convert your message as possible. Whether you’re pushing blockchain, Uber or Net Zero, “adoption” and persuasion are judged to be key performance indicators, not the bottom line.
While I’m still refining my thoughts on what this means for markets and finance, not to mention the economy at large, my hunch is that a useful way of linking the two worlds is by thinking of voters as investors whose allegiance, rather than money, is being sought after. That means breaking them up as follows: 1) passive but sophisticated, 2) passive but unsophisticated, 3) active but sophisticated, 4) active but unsophisticated.
Sophistication, in this case, equals awareness of how the influence playbook operates, while activism can be judged by how engaged a person is in policy formation or how sensitive they are to policy adaptation (the more passive you are, the happier you are to entrust third-parties to take the helm on policy formation).
The archetypal passive unsophisticated voter is someone who votes the way they do because they’ve always voted that way, and trust the custodians of their votes to work in their interests. That means they are usually blissfully unaware of all the backroom politicking that goes on on the activist side, meaning they can only be “turned” if the party itself is turned without them noticing.
But the analogy is useful for another reason, too.
Consider, for example, that financial sector participants have historically always fought over the right to influence where rents generated from productive investments should be reallocated in a bid to make even more surplus and thus wealth for everyone.
Measuring success in this world used to be relatively easy. Investments either made money or they didn’t. When they did, allocators were awarded with even more capital. When they didn’t, investors lost trust and the operations collapsed. In theory, it was all mutually beneficial.
While civil society participants also fight over the right to influence where rents generated from productive investments (usually stemming from taxes or donations) should flow, their objective is not to reallocate them to make even more surplus, but rather to achieve a far more abstract and subjective outcome, that of “social justice”.
But measuring success in this world is much harder, since nobody can agree on what defines success. More worryingly, there is also no definitive indicator of failure. Operations that end up doing the opposite of “social justice”, i.e. social harm, have no mechanism for self-correction. They persist, and continue to influence where even more rents get to go, regardless of how poorly they impact society.
Eventually, such “longevity without accountability” encroaches on the efficacy of corporates to make profits directly themselves. They in turn inevitably resort to similar tactics to fend off and protect themselves from civil society organisations.
In the process, everything has become fused. Corporates have become increasingly dependent on regulatory capture and/or taxpayer support to protect their operations. And yet, to obtain such protection they require narratives that cast them as more than just profit-oriented organisations, but rather as ones with social good impulses, too (banking being an obvious example). This in turn provides civil society organisations an “in” for direct influence at the corporate level, extending their capture beyond government and over to business and industry too.
To wit, a totally abstract measure of “social justice” — as defined by largely non-productive social players — rather than profit or productivity becomes the defining metric by which all entities are increasingly measured. Yet, somehow, we are all supposed to be surprised that productivity is languishing across the board as corporates focus ever more of their balance sheet on non-core social good activity rather than profit-maximisation.
This leads us to where we are now. A situation where corporates can no longer be trusted to deliver wealth in the usual way (with inflation a key outcome) and where civil society organisations — for ideological reasons — refuse to cater to those who actually need their help.
What happens next is harder to predict. But one likely pathway is a war between the common working man – who has finally become wise to the fact that no party really represents his interests – and the vested interests that maintain superiority only by keeping him down.
Brexit and Trump, in that analogy, rather than representing the moment of systemic collapse, proved more of a Bear Stearns moment for politics. Indeed, the systemic collapse is yet to come precisely because the underlying issues revealed by Brexit and Trump shock are yet to be resolved and have since grown and festered.
Viewed from that perspective, what is happening with the Tory party right now has the makings of a truly systemic bank run.
But while passive and unsophisticated voters may have finally awoken to the capture at the heart of the system, a true ontological collapse will only come if and when they come to believe there is nowhere safe for them to reallocate their votes, because any new party will be beholden to the exact same corrupting forces.
What comes next is likely a push for regime change beyond the scope of the democratic system we have.
| BUSINESS, ECON AND FINANCE |
UBER SHARES SANK AFTER THE RIDE HAILING COMPANY posted a “surprise” quarterly loss, and undershot revenue expectations by more than $1.1 billion, losing almost 9 percent of stock price value. While this may have come as a surprise to most, a smart Redditor found it was Uber’s surprise beat announced in previous earnings in 2023 that had been mis-assessed by the market. These beats had far more to do with the bump in valuations of three Uber holdings, Aurora Innovations, Didi and Grab, than an actual operational improvement. The mediocre earnings from their ride-sharing app persist.
No surprise for Blind Spot readers: Aviation expert Hubert Horan has long warned the market that reports of Uber “profits” should never be taken at face value because the mainstream media and the analyst community seem to be lapping up the top lines of Uber press releases without any critical thought. As he noted to us in August 2023 (the last time the media went nuts about supposed Uber profits) “the $392 million GAAP profit was totally explained by $386 million in alleged appreciation in the non-tradeable stocks it holds (Didi, Grab, Aurora, etc). One presumes that short-term fiddling with numbers could easily create the net $6 million profit.”
Also buried in footnotes at the time, he noted, was the fact that Uber had pushed payment for their UK tax liability into the next accounting period.
A bespoke algorithm hunch: Horan’s suspicion at the time was that improved profitability was the result of Uber expanding its margin take from fares, but also in developing algorithms “for tailoring customer prices based on what they believe individual customers would be willing to and tailoring driver payments so they are as low as they think drivers need to accept trips.” This would create a situation where different passengers/drivers making the same trip would be charged very different rates based on their propensity to pay or be paid.
BOE DEBANKING: Former Bank of England economist, Andy Haldane, said in a speech he was debanked just like Nigel Farage because of his Bank of England “political connections”. As Haldane pointed out the unbanking is deeply worrisome for a number of reasons. “One, I wasn’t working for the Bank of England [by that point]. Two, the Bank of England is by statute independent from government. Third, the Bank of England was their regulator, so the risk was to their regulator.”
The path to hell is paved… with KYC. Haldane noted that while the regulations had been imposed with “the best of intentions” they were now “chilling risk appetite and forestalling investing”. He said many new rules introduced by the government and regulators were “penny wise but pound foolish”.
IZZY COMMENT: It’s time to recognise that the KYC and AML regime that has emerged from the work of the Financial Action Task Force has entirely failed in its key objective: that of fighting crime.
Had the strategy actually worked, over 30 years of anti-money laundering policy should by now have suppressed human trafficking, terrorism and illegal drug dealing. But it hasn’t. These have all expanded in that time. Why? Because actual policing of crime has been outsourced to institutions not equipped for such work. At the same time, the regime has allowed finance ministries and central banks to encroach on the expertise and jurisdiction of judicial authorities. This in turn has blurred the lines between criminality and political activism, since all meaningful value transfer is now an activist influence op.
To revisit our takedown of the FATF system, see here, here, and here.
| POLITICS, POLITICS, POLITICS |
ROLLING STONE CLAIMED POLITICO MISSED THE MARK in its “who’s who’ of the pro-Palestine protests against Joe Biden. Politico initially published a story suggesting that top Democratic donors including the Bill and Melinda Gates Foundation had been funding the pro-Palestine groups organising massive US-wide protests. But according to Rolling Stone, it was wrong to tie the funding from the Tides Foundation, a sprawling liberal donor-advised fund, to pro-Palestinian groups with donor funds given to the Tides Foundation because “tracing money from individual donors, through a donor-advised fund, to any ultimate grant recipient is unwise, and particularly so when the donations involve such a large group like the Tides Foundation”.
Donation laundering: Nothing is as it seems, however. By Rolling Stone’s own admission, Politico’s story had attempted “to trace relatively small donations through a massive black box, a group that acts as a pass-through entity, into specific recipients’ coffers — something that dark-money reporters generally know to avoid.” This seems to us the important bit. The fact that black boxes like this dominate the sector, and that pathways between donors and causes are so obscured no journalist can make heads or tails of them.
The downstream hijacking of donated capital: Worth thinking about is what happens when groups awarded Western capital to fight specific causes, especially abroad, decide to redirect that capital back to its source? It is a type of blowback, arguably, that hasn’t been fully appreciated yet. A good example might be money sent to help pro-democracy movements in authoritarian countries that is deemed ineffective for as long as authoritarians can claim Western countries are subscribing to equally authoritarian tactics. Such groups might then be convinced to redirect some share of those funds to activist orgs pushing back against … Joe Biden or Justin Trudeau.
RUSSIA’S FOREIGN INTELLIGENCE SERVICE CLAIMED THE UNITED STATES was intensifying its efforts to find a replacement for Zelensky as the President of Ukraine. Allegedly, Washington has been contacting former Ukrainian President Pyotr Poroshenko and other Ukrainian leaders, in order to replace Zelensky should the situation on the front line deteriorate sharply. This news came just before the Russians began advancing in the Kherson region, in what appears to be the first major offensive in Ukraine since the failed Ukrainian counter-offensive that began last summer.
| CULTURE WARS |
MIT BANNED THE USE OF DEI STATEMENTS in the hiring of faculty members and promotions, the university claimed this week. In what appears to be a significant turning point in the use of DEI in elite universities, MIT decided that “compelled statements impinge on freedom of expression, and they don’t work”, as MIT President Sally Kornbluth explained to UnHerd.
| SPACE RACE |
UPCOMING MOONBASE: The United States, Russia and China announced new details regarding their upcoming moonbase projects. According to Newsweek, China and Russia’s lunar project — the so-called International Lunar Research Station (ILRS) — has been progressing, and they are “seriously considering” the inclusion of a nuclear reactor on the surface of the Moon by 2035. Meanwhile, NASA just outlined its plans to build a levitating robot train, known as FLOAT (Flexible Levitation On A Track), on the moon’s surface for the transportation of goods.
DARIO COMMENT: The new space race is heating up. And, unlike the original showdown between the United States and the Soviet Union, this one isn’t about getting there first. Instead, it’s about location, location, location.
The Chinese and Russians are leading this effort alongside Venezuela, Pakistan, Azerbaijan, Belarus, South Africa, Egypt, Thailand and Nicaragua. While the plan is to have a base ready by 2035, which will include comprehensive scientific facilities, along with all-around basic functions, the other goal is to build a well-equipped and stable facility for permanent human habitation by 2045.
The Chinese and Russian strategy is for their moon base to commence its first mission in 2026, and then to establish a base with fully remote, robotic capabilities in a project planned for 2028.
Meanwhile, NASA’s own Moon project — Artemis — which originally planned to put humans on a new moonbase by 2024, is still being plagued by delays. Artemis is now hoping to launch in September 2026 with its first crewed landing, but will likely not land until 2027, according to the US’s Government Accountability Office.
That’s not to say the Russians and Chinese haven’t faced delays too — the Russians’ 2023 Luna-25 launch failure was a significant project setback — but the Artemis project in comparison is suffering from its over ambitious nature.
Unlike the Russians and the Chinese, whose project appears to be focused on permanent habitation of the moon, the Artemis project aspires to create a jumping-off point to colonise Mars.
Firstly, it is intensely focused on astronaut safety. The original Apollo missions exposed NASA astronauts to massive risks, so the Artemis missions are aiming to reduce the risk of mission failure from 10 percent to 0.1 percent.
So why is this new space race all about location, when their objectives are different? Both missions have set their sights on the same area of the moon for permanent habitation: the lunar South Pole.
This area is particularly interesting due to the presence of frozen water trapped inside craters which also benefit from significant shading in an area otherwise privy to near-constant sunlight. This is critical for two reasons: 1. Drinking water; 2. Because one could extract hydrogen from the ice to allow for the refuelling of spacecraft bound for re-entry missions to Earth, or for missions to Mars. Additionally, these areas would be shielded from the intense radiation of the sun, meaning they are ideal locations for the placements of lunar bases.
What’s critical about the lunar South Pole, according to NASA head Bill Nelson, is that the prime real estate is limited. But also because there is only so much water in certain craters. That makes it all an old-fashioned resource rush. If the Chinese get there before the Americans, they’ll say “this is ours, you stay out”, Nelson believes.
Another reason why Nelson is worried about the Chinese project is because “most of it has some connection to their military”. Of course, NASA itself is arguably a civilian-led space department in name only. Practically speaking, it’s been a de facto parallel department of the United States Department of Defence since its inception, engaged in furnishing cover stories for covert operations, monitoring Soviet missile tests, and supplying weather data to the US military.
But returning to the race itself, and considering the importance of speed as emphasised by Nelson, one could question the priorities of the Artemis program, since it focuses on pilot safety and human-led exploration, as opposed to the robot-first approach of Russia and China. This human-led approach is prioritised because it’s very complicated to program robots to face all the eventualities that could arise in the building of a moonbase.
But will a human-led approach, emphasising efficiency and quality, matter if the Chinese and Russians claim all the best real estate first — albeit with dingy robots?
Only time will tell which approach will reward each power with the best lunar real estate. In the meantime, buckle up your seatbelts and sit tight until 2026.
| HOLY WARS |
G7 POPE: The Pope is back as a geopolitical force having accepted Italian premier Giorgia Meloni’s invitation to attend the G7 meeting of global leaders which takes place in Puglia on June 13. This is the first time in history that a Pope will attend a G7 summit, which this year aims to focus its attention on the rise of artificial intelligence.
DARIO COMMENT: Pope Francis’ unexpected acceptance of this invitation by Italian President Giorgia Meloni comes amid a nadir in the Church’s position within geopolitically influential Western countries, for its neutral position on the Russian-Ukrainian conflict. The internet is now filled with interpretations as to why the Pope has embraced such a “multipolar” geopolitical strategy. And despite assurances to the contrary, it wouldn’t be unsurprising if the Pope did more than focus on AI during this summit.
Officially, the Pope’s presence comes alongside the Vatican’s creation of the Rome Call for AI Ethics. This document, signed by the Vatican Pontifical Academy for Life, Microsoft, IBM, FAO and the Italian Government, promotes an ethical approach to Artificial Intelligence. It is essentially a wish list of what we fervently hope our future robotic AI overlords won’t do (pretty please): respecting the dignity of the human person, putting mankind as AI’s central preoccupation, and ensuring AI doesn’t have as its sole goal “profits or the gradual replacement of people”.
This Rome Call for Ethics comes alongside the Vatican’s creation of the RenAIssance Foundation (the Vatican’s marketer deserves a raise), which will function as the think-tank that promotes and encourages the dissemination of the Rome Call for AI Ethics. It also has an interesting logo:
As for what the Pope will actually do at the summit, it’s anyone’s best guess. But, as he admitted last year in Budapest, it’s worth remembering the Pope is working on a “secret mission” to attain peace in Ukraine.
Though, of course, it’s precisely this mission that got Pope Francis in hot water with the Western mainstream following the Russian invasion of Ukraine. Just prior to Russia’s attack, the pontiff had claimed NATO was “barking at Russia’s door”, and suggested that Russia’s president had been acting on legitimate security concerns. Since then, the Pope has defined the invasion as “unacceptable, repugnant, barbaric”, but he has continued to draw the ire of Western spokespeople and journalists for his ceaseless calls for Ukrainians to be “brave enough” to raise the white flag.
Search online for these results and you’ll get several interpretations as to how this represents a massive shift in Vatican policy.
The Atlantic claimed this “represents a dramatic break with the Vatican’s traditional philosophy” of geopolitics. Traditionally, “the Holy See has practised what academics call the “great power” model of diplomacy”, where it attaches itself to the superpower of the day. It goes on to outline why this historically meant de-facto alliances with the Holy Roman Empire, the French monarchy, or the Austro-Hungarian Empire.
More recently, this “great power” trajectory appeared to be underpinned by Rome’s attachment to Western powers and its ferocious alliance with anti-Communist powers in the Cold War, especially acute in the era of Pope John Paul II, who hailed from Poland.
But when these online pieces aren’t flat-out condemning the Pope’s call for peace, they’re claiming the Vatican’s supposed multipolar strategy is about one thing: demographics.
By 2000, there were around 1.1 billion Catholics around the world, with only 350 million of them in Europe and North America. The overwhelming majority, 720 million, lived in Latin America, Africa and Asia. Soon, only one in five Catholics will be non-Hispanic Caucasians.
So, perhaps the reason for the Pope’s neutrality on the conflict is because the global South, where the majority of the Church’s flock now resides, sees the Ukrainian conflict as a European affair. As such, it makes sense that the Pope is calling for peace in this conflict, far-removed from its true centre of influence.
What is a little harder to understand is why Western journalists can’t understand the obvious: The Vatican hasn’t changed — the West has.
The Vatican’s prime directive in most conflicts has been to counsel for peace. When Chile and Argentina almost went to war in 1978 over the Beagle Canal in Tierra Del Fuego, only the Pope’s intercession saved the region from all-out war. When the United States invaded Iraq, Pope John Paul II was one of the world’s most vocal opponents. More recently, his intercessions among feuding factions of South Sudan pushed the president of the country to lift a suspension in peace talks between his government and opposition fighters in February of 2023.
The exceptions to that have been the Vatican’s use as a financial conduit for anti-Communist guerillas and other covert shenanigans during the Cold War, and Pope John Paul II’s agitations for the Solidarity movement in Poland. Here, the Vatican clearly took a side — a position which could have easily degenerated into war. But remember: these were anti-Communist positions — arguably the most threatening movement to Catholicism since the rise of Protestantism.
That the Vatican is calling for peace should be seen as nothing other than exceptionally unremarkable. The inability of Western journalists to see this obvious fact is more revealing. It suggests the West’s encouragement of the conflict in Ukraine can’t stand up to the most basic of moral scrutinies: that peace is always preferable to war in most people’s minds.
