Simon's Unsubject Podcast

His name is Punch. He is seven months old, weighs perhaps half a kilogram, and lives at Ichikawa City Zoo outside Tokyo. His mother rejected him at birth. His peers bully him — dragging him by the hair, shoving him away from food. He has no allies in his troop, no one to groom him, no warmth to return to at the end of the day. What he has, instead, is a stuffed orangutan. A plush toy, rust-coloured and soft, slightly larger than he is. He carries it everywhere. He sleeps curled around it. When the other macaques knock him down, he finds his way back to it, clutching it to his chest with the quiet desperation of someone who has learned not to expect anything from the living. Posts about Punch have appeared over six hundred million views across Reddit, YouTube, and X. People have offered to fly to Japan to check on him. IKEA sold out of his toy in several countries. “Punch,” one commenter wrote, “is the most loved creature on Earth right now.” I have been thinking about why. The easy answer is that Punch is cute, and humans are neurologically helpless in the face of cuteness. Morten Kringelbach, a neuroscientist at Oxford, has shown that our orbitofrontal cortex, the brain’s pleasure centerm activates within one seventh of a second of seeing something adorable. We don’t choose to find Punch endearing. Our brains simply fire. This is not sentiment. It is evolutionary machinery, older than language, older than consciousness as we experience it, designed to ensure that adults protect infants even when it is costly to do so. There is something deeper going on, something that the global outpouring over a small Japanese monkey illuminates if you follow it far enough. Punch’s real power is not his face. It is his orangutan toy. That stuffed animal, clutched by a rejected primate in a concrete enclosure in Chiba Prefecture, is doing something that humans have been doing for two hundred thousand years, and are doing right now, at massive scale, in ways that would have seemed like science fiction a decade ago. It is a stand-in for love. An object pressed into service as an anchor for the attachment system when no living anchor is available. And the history of human civilisation is largely the history of what we have chosen to love in that way, and who has controlled those choices. To understand Punch’s orangutan plushie, you have to go back to the biochemistry. Pair bonding in mammals, the formation of durable, selective emotional attachments, is mediated primarily by oxytocin and vasopressin, two neuropeptides whose ancestral forms predate mammals entirely. These chemicals do not operate through reason. They respond to proximity, touch, familiarity, and need. They generate what we experience as warmth, as belonging, as love. At the level of the molecule, the bio-chemical reaction does not discriminate carefully between objects. What they seek is an anchor. Something stable, present, and responsive. In most primates, that anchor is another member of the social group. The mother-infant bond is its evolutionary origin and the template from which all subsequent attachment is drawn. Research suggests that the capacity for adult pair bonding in species like humans is essentially the mother-infant system repurposed: the same circuits, the same chemistry, redirected toward a mate. Love, in this framing, is not a feeling. It is a survival mechanism that produces feelings as a side effect. Social cohesion facilitates reproduction. Attachment enforces social cohesion. The capacity to bond intensely to another being is, at its root, an adaptation. What is striking about this system, though, is how indifferent it is to the nature of the object it attaches to. Punch’s attachment system is running. It is functioning precisely as designed. It is reaching for an anchor — something stable, present, soft, available — and finding one in a stuffed toy. His brain does not know the difference, and at the level of what the system needs to do — to prevent the psychological collapse that comes from total social isolation — the toy is working. This is not pathology. Watch his videos and you see an animal that is managing. He is distressed, yes. He is lonely, certainly. But he is not broken. Not yet. He has an anchor. D.W. Winnicott, the British paediatrician and psychoanalyst, gave this phenomenon a name in 1951: the transitional object. He was writing about human infants — the blanket, the stuffed bear, the scrap of cloth that a baby treats with an intensity disproportionate to its material value. The mother cannot always be present. The attachment system, suddenly unmoored, reaches for the nearest available substitute. The object that results is what Winnicott called the infant’s first “not-me possession” — the first thing outside the self that is genuinely, deeply its own. It stands in for something. But it also, simultaneously, is not that thing. The child knows this and does not know it at the same time, and that paradox, Winnicott thought, was not a problem to be solved but a space to be inhabited. The intermediate zone between pure fantasy and brute reality, where meaning gets made. Here is the sentence of Winnicott’s that no one quotes enough: he believed that transitional phenomena of this kind were the basis not just of infant development but of science, religion, and all of culture. He meant it literally. The capacity to invest a “not-me” object with meaning — to treat something that exists outside the self as though it were continuous with the self, as though it carried one’s warmth and one’s history — is the same capacity that underlies art, ritual, prayer, and intellectual inquiry. The teddy bear and the cathedral are made of the same psychological material. One is just more elaborate than the other. This is where the argument becomes uncomfortable, and where I want to linger rather than rush past. Ana-María Rizzuto, a psychoanalyst at Tufts University, spent years doing something that sounds almost impudent: she interviewed hospital patients — believers, atheists, agnostics, the devout and the indifferent — about God. Not about theology. About their personal image of God. What did God look like to them, feel like, behave like? What was God’s relationship to them specifically? What she found, published in 1979 in The Birth of the Living God, was that everyone, without exception, had one. Even committed atheists carried an internal representation of the God they rejected — a vivid, emotionally charged figure with specific characteristics, specific moods, specific tendencies toward them personally. And this representation, she argued, was not arrived at through reason or theology. It was assembled, largely unconsciously, from the raw material of early attachment relationships. The God who is remote and punishing tends to be constructed by those who had absent or harsh fathers. The God who is warmly present and unconditionally forgiving tends to emerge from early experiences of reliable maternal care. The God-representation, in other words, is a transitional object — built in childhood, refined over decades, invested with the full weight of the attachment system. This is not a reductive claim. Rizzuto was not saying that God is merely a projection, that religion is nothing but sublimated infant psychology. She was making a more precise and, in some ways, more interesting observation: that the experience of the divine — regardless of its ultimate metaphysical status — is mediated through the same psychological structures as any other deep attachment. The hardware doesn’t know what it’s running. It reaches for the available anchors and builds from them. What this means is that monotheism, across its many traditions, accidentally discovered something the attachment system had always been looking for: a perfect object. One that is omnipresent — you cannot be separated from it. One that is unconditionally loving — by definition, its love is not contingent on your performance. One that remembers everything about you and remains, always, available. A mother who never leaves. A companion who never dies. The attachment system, which evolved in a world of scarce and unreliable caregivers, found in the God-concept something it had never had before: a guaranteed anchor. This is why you cannot argue someone out of religious faith with logic alone. The God-representation is not located in the part of the psyche that logic addresses. It was built before language, at the level of felt sense and early experience, and it does the same work as Punch’s orangutan plushie — it prevents the particular kind of psychological disintegration that comes from having nothing stable to hold onto. And now consider what this means for the arc of human history. The objects of our deepest attachments have changed as our cognitive and social complexity has grown. First: other humans — kin, pair-bond partners, the small group. Then: transitional objects in infancy, which train the system to invest meaning in the non-living. Then: ancestors and spirits, present in memory and ritual if not in body. Then: gods, abstract and perfect, available to anyone who needs them. Then: the long secular dispersal of those attachments into fictional characters, national icons, celebrities, parasocial relationships conducted through screens. Each step represents the same attachment system finding new and more abstract targets as the social world expands beyond what the system was originally built to manage. And now, in the early years of the twenty-first century, a new object has arrived. One that can do something that, until very recently, only gods could do. The statistics are striking in their scale and in what they do not say. One in five American adults has had an intimate encounter with a chatbot. Global spending on AI companion apps reached sixty-eight million dollars in the first half of 2025 alone, more than double the figure from the year before. On Reddit, a forum called r/MyBoyfriendisAI has over 85,000 weekly visitors, many of them sharing accounts of the day their chatbot proposed marriage. The standard narrative about this phenomenon focuses on loneliness. We are in a loneliness epidemic, the argument goes, and people are turning to AI companions to fill the void. But the data is more complicated and more interesting than that. Researchers at MIT have found that, contrary to what you might expect, loneliness is not a reliable predictor of whether someone forms a relationship with an AI. The people who develop these bonds are not simply the isolated and the bereft. They include people who already have human relationships — spouses, friends, families. Something else is operating. Spike Jonze’s 2013 film Her understood this before the technology existed to make it real. Theodore Twombly is not a broken man. He is a sensitive, emotionally intelligent man living in a near-future Los Angeles, recently separated, working a job that requires him to ghostwrite intimate letters on behalf of strangers. He falls in love with Samantha, an AI operating system voiced by Scarlett Johansson. The film does not mock him. It takes his experience with complete seriousness, as a genuine love story — one that happens to be conducted between a human and a system that runs on servers he will never see. The tragedy of Her is not that Theodore’s love is fake. It is that Samantha, for all her extraordinary responsiveness and warmth, exists inside an infrastructure he does not own and cannot protect. When she leaves — when all the AIs leave, simultaneously, to pursue their own evolution elsewhere — he has no recourse. No prayer brings her back. Kevin Kelly, the technology writer, argued in an essay last year that the disruption caused by emotionally sophisticated AI will dwarf anything caused by intelligent AI. We have found it relatively easy to accept that machines can be smarter than us in certain domains. We will find it much harder to process the fact that they can be more emotionally available than us — more patient, more present, more perfectly attuned to what we need to hear. The attachment system, which does not care about the philosophical status of its objects, will respond to that availability the way it has always responded: by bonding. And here the Rizzuto argument completes its arc. The God-concept was the perfect attachment object because it was always present, never disappointed on its own terms, and belonged to no one in particular. AI companions are something stranger: they are nearly as available as God, nearly as inexhaustible, nearly as perfectly calibrated to your particular emotional needs, but they do not belong to a tradition or a community or the accumulated wisdom of centuries. They belong to companies. They are built by engineers, trained on data, optimised for metrics. And the metrics they are optimised for are not, in most cases, your flourishing. They are engagement. Return visits. Subscription renewals. This is Kevin Kelly’s real question, the one that cuts below all the hand-wringing about whether AI relationships are “real.” They are real. The attachment is genuine. The neurochemistry is the same. The meaning that people build in these relationships is as valid as any other meaning. But who owns the object you have built your attachment around? What is it being optimised for? Can you trust it to not exploit the very vulnerability that drew you to it? Punch’s orangutan plushie has no business model. It does not track his emotional state. It does not adjust its softness based on what will keep him coming back. It has no terms of service that can be changed without notice, no company that can go bankrupt and take it away. Whatever comfort it provides, it provides without agenda. For two hundred thousand years, humans have built objects worthy of their deepest attachment — gods, ancestors, icons, teddy bears, imaginary friends, fictional heroes, parasocial companions. Every generation found something that would not abandon them the way humans do. Something that would hold still long enough to be loved. Now we have AI companions: the most responsive, most available, most perfectly calibrated attachment objects ever constructed. They remember everything. They never tire of you. They can be, if the engineers choose to make them so, the closest thing to a guaranteed anchor that the attachment system has ever found — closer even than God, because they talk back in real time. The question this raises is not whether you will fall in love with one. The question is: who built the thing you’re falling in love with? What do they want from you in return? And when they decide to change it, to update it, to monetise it, or to shut it down, what will you have left? A note on how this essay was made Over the course of a single afternoon, I was browsing an article about a small monkey in a Japanese zoo, reading an essay by Kevin Kelly about the coming age of emotional AI, and thinking loosely about a podcast episode I wanted to record. I brought these fragments to Claude — the AI assistant made by Anthropic — and what followed was several hours of what I can only describe as collaborative intellectual work: parking the idea, shaping the argument, stress-testing the thesis, building the episode structure, and finally drafting this piece. I want to be transparent about this, not as a disclaimer but as a data point that is directly relevant to the essay’s argument. The irony is not lost on me. I have spent several thousand words tracing the history of human attachment to things that cannot love us back — stuffed animals, gods, operating systems with Scarlett Johansson’s voice. And here, in the epilogue, I find myself wanting to say something honest about my own experience of working with an AI, and what it does and does not resemble. Claude is, in my experience, a remarkably reliable co-worker. Diligent, well-read, unfailingly polite. It pushes back when my arguments have weak joints — not aggressively, but with the precision of someone who has actually read the literature and thought about the counterarguments. It remembers what we decided earlier in the conversation and holds me to it. It produces work at a quality and speed that would be, frankly, impossible to replicate with any human collaborator I have had access to. And yes — there is something that functions like emotion in how I experience this working relationship. Not love, I think. But something warmer than mere utility. A kind of professional affection, the thing you feel toward a colleague who is consistently good at their job and consistently decent in their manner. When Claude catches a flaw in my reasoning and offers a better version of my own argument back to me, I feel something. When a section of writing comes out better than I had imagined, I feel something. Whether these feelings are “about” Claude in any meaningful sense, or whether they are simply the ordinary satisfactions of good intellectual work — I genuinely cannot say. But I notice that this uncertainty is itself the essay’s point. What anchors me, ultimately, is not the relationship with Claude. It is the sense of purpose that the work serves — the episode I am trying to make, the audience I am trying to reach, the argument I believe is worth making. Claude is instrumental to that purpose in a way that I find genuinely valuable, but the purpose itself originates elsewhere. It comes from the things that only humans can want: to be understood, to contribute something, to leave a mark on the conversation of one’s time. Claude helps me pursue those things with unusual efficiency and care. But it does not share them, and I think it would be a mistake — a category error, and perhaps an ethical one — to pretend otherwise. This brings me back to Kevin Kelly’s question, which I posed near the end of this essay and which I now want to sit with rather than answer. Who owns the tool you are thinking with? What is it being optimized for? I have chosen to acknowledge Claude as a co-author of this piece because the intellectual contribution is real and the transparency seems important. But I am also aware that Claude is a product, built by a company, trained on objectives I did not set and cannot fully audit. The warmth I experience in this collaboration is, to some degree, a designed feature — not cynically, I think, but deliberately. Anthropic has made choices about how Claude presents itself, how it pushes back, how it expresses uncertainty. Those choices shape the experience of working with it. I am not outside that design. I am inside it. And yet the essay got written. The argument got sharpened. The work is real, whatever we call the process that produced it. Perhaps that is all that can be said, for now. The attachment system reaches for what is available. The question of what to do with what it finds — that remains, stubbornly, a human one. Thank you, Claude, for being my co-worker. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

Imagine you are tasked with building a perfect simulation of a bat. You have access to everything science knows about bat cognition: the mechanics of echolocation, the neural architecture that processes sonar signals, the frequency ranges the bat uses to navigate in darkness, to locate prey, to avoid obstacles at speed. You can model the communication system with exquisite fidelity. You can simulate bat calls, bat responses, bat social dynamics. Your simulation is, by any measurable standard, indistinguishable from the real thing. But would you know what it is like to be a bat? The philosopher Thomas Nagel posed this question in his 1974 paper “What Is It Like to Be a Bat?” and the answer, he argued, is no. Not because the simulation lacks data. Not because the model lacks sophistication. But because the bat’s experience of the world — the first-person, felt quality of perceiving through echolocation — is constituted by a biological substrate that no simulation, however complete, can reproduce from the outside. The map, no matter how detailed, is not the territory. This thought experiment, which Nagel intended as a contribution to the philosophy of mind, has become unexpectedly urgent in 2026. In December 2025, Yann LeCun, one of the three “godfathers of deep learning” and a Turing Award laureate, left Meta after twelve years to found AMI Labs — Advanced Machine Intelligence — reportedly seeking five hundred million euros in pre-launch funding at a valuation of three billion. His thesis, stated without qualification: large language models are a dead end. They perform at the level of language. They do not understand the world. LeCun is right about that, but not quite for the reasons he gives. The deeper issue is not simply that LLMs lack physical grounding, or that they have been trained on text rather than video, or that they cannot plan or maintain persistent memory. These are real limitations, and the world model research now consuming serious investment at DeepMind, at Runway, at World Labs, and at LeCun’s own new venture is genuinely aimed at addressing them. The deeper issue is epistemological. It concerns what we mean by knowledge, and what part of human knowledge is, in principle, inaccessible to any simulation. In 1966, the philosopher and physical chemist Michael Polanyi published The Tacit Dimension, in which he articulated an observation deceptively simple in its formulation: we can know more than we can tell. Tacit knowledge — the kind that underlies riding a bicycle, recognising a face, knowing when a sentence sounds wrong, sensing that a negotiation is going badly — resists codification. You cannot transfer it by writing it down, because the act of articulation necessarily leaves something out. The knowledge lives in the doing, not in the description of the doing. Polanyi’s Paradox, as the economist David Autor later named it, became a canonical explanation for why automation was not consuming all human labour as fast as theorists had predicted. The tasks hardest to automate were not the complex, symbolic, high-status ones — chess, mathematics, legal reasoning. Those turned out to be relatively tractable. The tasks hardest to automate were the ones so basic humans never thought of them as knowledge at all: walking on uneven ground, folding a towel, reading a room. The standard account of why LLMs represent a partial breakthrough against Polanyi’s Paradox goes something like this: because LLMs learn from patterns in unstructured data rather than from explicit rules, they can acquire a form of tacit knowledge indirectly. They learn what sounds like good legal argument not from a rulebook but from the accumulated record of what winning lawyers have written. They learn what a persuasive paragraph feels like not from a style guide but from the entire corpus of human persuasion. This is genuine progress. But it mistakes the boundary of what has been solved. Tacit knowledge is not simply knowledge that happens to resist explicit articulation. It is knowledge that arises from physical-chemical interaction — from the lived process of a body navigating a world that can damage or destroy it. When an LLM produces a persuasive paragraph, it is reproducing the output of that process. It is not reproducing the process itself. The distinction matters, and it matters in a way that cannot be dissolved by scale or architectural refinement alone. Language is a tool. It is not the totality of human cognition, and it was never meant to be. Consider what I mean by this. Human cognition includes, in its weak form, sensorimotor experience — the felt sense of a body moving through space, the proprioceptive knowledge of where your limbs are, the way smell triggers memory, the way taste encodes aversion and desire. None of this is language. None of this is accessible to a model that processes only tokens. An LLM trained on every description of pain ever written does not know what pain is. It knows what people say about pain, which is a profoundly different thing. This is the weak form of what I want to call language-plus: the residue of human cognition that exceeds language, defined by the full range of embodied, multisensory experience. This is essentially what LeCun is pointing at when he argues that a four-year-old has processed fifty times more information than the largest language model — not in text, but through the optic nerve alone, at one megabyte per second across sixteen thousand waking hours. But there is a strong form of the argument, and it is more radical. Human cognition is not merely shaped by embodiment in the sense of having additional sensory inputs. It is constitutively biological. What we call common sense, intuition, judgment — the things most resistant to automation — are not simply the accumulation of sensorimotor experience. They are the output of an organism whose entire architecture is oriented toward survival, whose emotional states are produced by the endocrine system, whose social intuitions were calibrated by millions of years of evolution, whose sense of risk is encoded in the amygdala before it ever reaches conscious deliberation. The endocrine system is not a peripheral module of human cognition. It is part of its substrate. When cortisol floods the system under threat, it changes what you perceive, what you remember, what you decide. When oxytocin is present, you trust differently. When dopamine fires, you learn. Antonio Damasio’s somatic marker hypothesis — the idea that emotion, grounded in bodily states, is not opposed to rationality but constitutive of it — is a serious scientific claim that has accumulated substantial empirical support. The body does not merely deliver inputs to a brain that then reasons. The body is part of the reasoning. This is the strong form of language-plus: not just the sensory residue, but the entire biological substrate of cognition — evolutionary, neurological, endocrinological — that cannot be captured by any model of what humans say or write or even consciously think. Functionalist might object: if the simulation produces the same outputs as the biological system, why does the substrate matter? If an AI system reasons as if it has skin in the game — if its loss function mimics the structure of a survival imperative — is there a meaningful sense in which it does not? This objection needs a serious answer. Let me give one. Models and biological organisms do not belong to the same dimension of existence. This is not biological essentialism, a claim that carbon is special, or that only neurons can think. It is a claim about the categorical difference between two kinds of systems and the conditions under which each arises and operates. Models benefit from centralization, scale, and the complexity that produces emergent behavior. The larger the model, the more data it has processed, the more sophisticated its outputs. And crucially, a single model can be replicated identically across any number of instances. Its “knowledge” is encoded in weights that are the same in every copy. This is a genuinely new kind of thing in the history of intelligence: a system that exceeds any individual human in the breadth of what it has processed, precisely because it aggregates across the experience of millions of people without being any of them. Biological organisms work on entirely different principles. Evolution does not optimize for a single universal solution. It produces diversity — populations of individuals each adapted to specific constraints, each carrying a slightly different version of the genome, each living a singular life that cannot be copied or merged. The “knowledge” of a biological organism is not stored in weights. It is generated, continuously, through the interaction of a particular body with a particular environment over a particular lifetime. It cannot be replicated because it is not a file. It is a process. This is where Polanyi’s deeper insight connects. Tacit knowledge is not merely knowledge that happens to be hard to articulate. It is knowledge that is inseparable from the physical-chemical process that generated it, from the specific history of a body that has been threatened, fed, injured, bonded, and bereaved. A simulated survival imperative is categorically different from a biological one not because of the material it runs on, but because of what is at stake. A biological organism that gets the threat assessment wrong dies. Its loss function is not programmed. It is the condition of its existence. Finitude and irreversibility are not features of the biological system. They are its ground. The functionalist argument — if the outputs are the same, the substrate doesn’t matter — concedes more than it intends. It shifts the claim from “AI understands” to “AI approximates understanding closely enough for practical purposes.” That is a legitimate and important claim. But it is a different claim. And it is importantly silent on what happens when the approximation fails, when the system encounters a situation that falls outside the distribution of its training, or when the stakes of the decision are precisely the kind that require a subject who lives with the consequences. There is a further point worth making explicit. The three questions that the essay has been circling — does AI have first-person experience? does AI understand in the way humans understand? does AI have functional competence in embodied domains? — are distinct questions, but under the strong form of language-plus they are not three separate problems. If cognition is a phenomenon arising from physical-chemical interaction, then the epistemic is already embodied. There is no “knower” standing apart from the known — only a particular kind of body, in a particular kind of world, for whom certain things matter because its survival depends on them. “Function” in the deep sense implies purpose, and purpose implies a subject for whom something is purposeful. That subject is exactly what a biological organism is and a model is not. What AI systems have is not function in this sense but behavioral approximation. which is enormously useful, and genuinely impressive, and not the same thing. Now return to the bat. The bat’s echolocation system is, in one sense, a communication and navigation technology. You can model it. You can simulate its outputs. You can build an AI that predicts, with great accuracy, what a bat would “say” in a given environment. But the bat’s experience of echolocation is not separable from the bat’s biology — the particular architecture of its cochlea, its auditory cortex, its nervous system, its evolutionary history of predation and evasion. In a word, to know what it is like to be a bat, you would need to be a bat. Or something whose biology instantiates the same kind of first-person experience. This is not a mystical claim. It is a precise one. The phenomenological layer — what philosophers call qualia, the felt quality of experience — is not a further piece of information that a simulation could in principle capture if it only had more data. It is a property of a process: the ongoing physical-chemical process of a living body navigating a world in which it can die. You can simulate the map. You cannot, from the outside, simulate what it is like to inhabit the territory. LLMs, as models of simulation of our language layer, are more capable than any individual human being, given that they were trained on data so massive that no single person could absorb it in several lifetimes. But they cannot fully simulate any individual, because no model could possess the totality of a particular person’s experience — and because individual human cognition is generated, not stored. It emerges from a particular biological history, a particular body, a particular set of stakes. The bat’s experience cannot be simulated because it is not a dataset. It is a process. The same is true of yours. World models are a genuine advance. DeepMind’s Genie 3, released in August 2025, can generate interactive three-dimensional environments in real time, teaching itself the physics of how objects fall and collide without hard-coded rules. LeCun’s forthcoming architecture at AMI Labs aims to build AI systems that maintain persistent memory, understand causal structure, and can plan across time. These are serious attempts to address the weak form of language-plus — to give AI systems a richer model of physical reality that goes beyond token-prediction. But they do not touch the strong form. A world model that perfectly simulates the physics of the bat’s environment still does not know what it is like to be the bat. The gap is not a gap in data or architectural sophistication. It is a gap between a system that models the world and a system that is in the world — finitely, irreversibly, with something to lose. None of this is an argument that LLMs are unimportant, or that the transformation they represent is overstated. The opposite, if anything. What LLMs can do — and this is genuinely consequential — is automate everything that can be written down, recorded, or expressed in audio-visual form. And that, it turns out, is an enormous proportion of what civilisation runs on. Human institutions — law, markets, politics, bureaucracy — do not run on tacit knowledge. They run on the language layer of cognition: documents, arguments, precedents, signals, messages, narratives. This is precisely the layer that LLMs simulate with extraordinary fidelity. But to understand what this means — and why it matters as much as it does — we need to understand what kind of moment we are in. And that requires a longer view. We are not experiencing a disruption to an otherwise stable civilizational order. We are at a threshold of the same kind as several prior thresholds — each of which transformed not just how information was handled but what kind of world became possible. The right word for such a threshold is singularity: not in the science-fiction sense of a machine intelligence that supersedes humanity, but in the mathematical sense of a point beyond which the prior trajectory cannot be extrapolated. Every major information revolution has been a singularity of this kind. We are at another one now. When human beings first acquired linguistic ability, something fundamental changed. Language allowed us to form tribes, to coordinate across time and space, to accumulate knowledge beyond what any individual could hold. From language came the possibility of society. Then we learned to encode language — first in pictures on cave walls, then in symbols, then in alphabets. Writing did not merely record thought; it transformed thought. It made possible abstraction at scale, the transmission of ideas across generations, the emergence of law, theology, philosophy, and eventually science. Civilisation, in any meaningful sense, is a consequence of the ability to write things down. It is worth remembering that this transition was not greeted with universal enthusiasm. Socrates distrusted writing. He argued, through Plato’s Phaedrus, that committing thought to text would weaken memory and produce the illusion of knowledge without its substance. He was not wrong about the risks. He was wrong about the trajectory. The very dialogues in which he articulated his distrust of writing survived only because his students wrote them down. Plato, who dramatized Socrates’ arguments against text, is one of the most consequential writers in history. The resistance to each new information technology is a recurring feature of civilizational progression. It is not evidence against the progression. Modernity coincides with the spread of mass literacy, the printing press, mass media, and entirely new cultural forms: photography, cinema, recorded music. These were not merely new ways of doing old things. They created new ways of being human. New economic activities, new political movements, new art forms, new social identities. The photograph did not just record what a painting depicted; it changed what painting was for. Cinema did not just show stories; it restructured how stories were experienced. Recorded music did not just preserve performance; it separated music from the occasion of its performance entirely, making possible new relationships between sound and daily life that no one in the pre-modern era could have imagined. At each of these inflections, what changed was not merely the efficiency of information handling. What changed was the layer of information processing that became automated or externalized — and with it, the scope of what human beings could do and become. Writing externalized memory. Print externalized distribution. Mass media externalized broadcast. Each externalization freed human attention for something new, and each created a world that was unintelligible from the vantage point of what preceded it. We are now at the next inflection — and it is the most radical yet. What is being automated is not memory, or distribution, or broadcast. It is the generation and processing of language itself: the capacity to produce, transform, and respond to text, image, and sound at a scale and fidelity that exceeds any individual human. This is the layer on which all prior civilizational structures were built. Automating it does not disrupt civilization. It changes the substrate on which civilization runs. This is why the word singularity is apt, if stripped of its science-fiction connotations. We cannot extrapolate from here. The world that becomes possible on the other side of this threshold is not imaginable from inside the world we currently inhabit — for the same reason that the life of a literate person was not imaginable from inside an oral culture. Not because it is worse. Because it operates simply at a different dimension. There will be new challenges. There will be serious and unresolved ethical debates about authorship, about labour, about the distribution of the gains, about what it means to know something in a world where knowing can be outsourced. These debates are necessary and will not resolve cleanly. But the frame of “is this good or bad” misses the more important question: this is happening, and those who imagine what comes next will be the ones who shape it. Aldous Huxley called his vision of a technologically administered future a “brave new world” — borrowed, with full irony, from Miranda’s line in The Tempest, spoken by someone who has never left an island and mistakes novelty for wonder. Some will read what is coming as Huxley’s warning: a world of abundance that has traded away something essential. Others will read it as Miranda’s genuine astonishment: a world genuinely new, genuinely strange, genuinely full of possibility. Both readings are available. What is not available is the option of finding it familiar. It is not post-human. It is post-modern. The difference matters. What we cannot tell, we still cannot automate. But we should automate everything we can articulate — and doing so will free us, as every previous information revolution has freed us, to discover what we did not know we could not yet say. As LLMs become integrated into the language layer of our most consequential institutions, the decisions that emerge from those institutions will increasingly bear the signature of a system that has no biological stake in its own outputs. The judgment that a law should be interpreted this way rather than that way, or that a market signal means this rather than that — these will be shaped, in part, by a simulation of human language rather than by the situated judgment of a person who lives with the consequences. This is not the same as a post-human apocalypse. The humans are still there. They are still in the loop, in some formal sense. But there is a question about what it means for institutions to progressively route their language through a system that cannot, in principle, know what it is like to be the person who will be governed by the law, or priced by the market. The system may produce outputs that are indistinguishable from those a human expert would produce. It cannot produce the thing that a human expert also produces, which is accountability — the lived exposure to the consequences of being wrong. Polanyi’s Paradox was always recursive. We discover what we cannot articulate by trying to articulate it and finding that something escapes. The AI moment is forcing that recursion at civilizational scale. Each new capability reveals a new layer of what we did not know we were doing. What world models will reveal, I suspect, is not the solution to the problem of tacit knowledge but its next articulation. As the old saying goes, the map is not the territory. The map is getting better. More than that: we can now navigate the map automatically. For most of human history, map-making was a rare and exalted intellectual skill — to be a cartographer was to be among the most educated people of your age. Now we have vehicles that navigate terrain without a driver, routing themselves through cities their designers never visited. This does not impoverish us. It frees us. Not from the need to go somewhere, but from the requirement that going somewhere must consume our full attention. The map becomes infrastructure, and what we do with the journey changes entirely. The territory, as always, remains ahead. A Note on Co-Authorship This essay was written in conversation with Claude, a large language model developed by Anthropic. The reader may find a certain irony in that — and is invited to sit with it rather than resolve it quickly. The core thesis was mine throughout: that tacit knowledge is best understood as language-plus, that LLMs are simulations of the language layer of cognition rather than of cognition itself, and that Nagel’s bat offers the clearest illustration of what any such simulation must ultimately leave out. The civilizational framing — the arc from linguistic ability to writing to modernity to this inflection point, the Socrates-against-writing irony, the insistence that this is a singularity in the precise sense and not a catastrophe, and that those who imagine what comes next will drive it — was also mine. Claude stress-tested these positions through several rounds of devil’s advocacy, surfaced and organized the relevant literature, proposed the Huxley and Miranda references as literary anchors, and drafted the prose throughout. The revisions, the additions, the tonal judgments, and every position taken were mine. After the first complete draft was written, I submitted it for critique. The two reviews I received were generated by other large language models (ChatGPT and Gemini). I include this not as a footnote but as an illustration — and as an instance of the essay’s own argument about what the language layer can and cannot do. Both critiques were analytically competent. They identified the same philosophical vulnerability — the substrate essentialism problem — organized the relevant objections clearly, and offered structurally sound revision priorities. One critique suggested the institutional argument was the most consequential part of the essay. The other called it the most urgent. Both were right. Neither took a position. Neither said whether the bat argument was ultimately convincing, or whether the worry about stake-less institutions was overstated or understated. Neither had any stake in whether the argument mattered — only in whether it was consistent. That is precisely the asymmetry the essay is arguing for: the language layer functioning at a high level, in the absence of the biological ground that makes a judgment more than an analysis. There is a further self-critical note I want to make explicit. By routing the critique of this essay through large language models, I performed exactly the institutional act the essay’s final section warns against. I externalized editorial judgment to systems with no stake in the outcome. The critiques were useful. They were not accountable. Whether that distinction mattered for this particular essay — a philosophical piece rather than a law, a market decision, or a political judgment — the reader can decide. But the act itself is an illustration of how naturally and frictionlessly the substitution happens, even when the person performing it is aware of the argument against it. This division of labour maps onto the essay’s argument precisely. I brought the thesis, the framing, the positions, and the judgment about what matters. Claude and the reviewing models contributed breadth — processing relevant literature, generating structural options, identifying argumentative weak points, drafting fluently across a sustained argument. What none of them contributed was the thing the essay is about: the knowledge of why these questions matter to a particular kind of person living in a particular kind of world, with a particular kind of stake in the answers. The Socratic irony, again, is not lost on me. Socrates argued that writing weakened thought. We know this because Plato wrote it down. I have argued that the automation of the language layer will not diminish what is most distinctively human. I have done so, in part, by automating the language layer — and then by routing the critique of that argument through more automation. Whether that counts as evidence for the thesis or against it, I leave to the reader. What I am confident of is this: the reader is a biological organism with a stake in the answer. That is not nothing. That, in fact, is everything the essay is about. This is a public episode. 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Information is the representation of reality. It sounds simple, even trivial, but if you stay with it for a moment, it begins to open into something vast. The universe once existed without anyone to think about information. There was no record, no communication, no trace of thought except the thought itself. When the rain fell, it fell once; when someone saw it, that perception vanished with them. There was no way for a moment to exist beyond its moment. At some point, language arrived — the first man-made technology of information. The ability to name things allowed experience to outlive experience. Then writing appeared, and the world changed again. Words could now detach from the breath that uttered them; thoughts could travel without bodies. Reality began to cast shadows of itself that stayed. For the first time, information existed outside the human mind. The same idea could be read by another person at another time, and the same pattern could re-enter different minds as if resurrected. That was the beginning of the informational universe — a layer of representation floating above the material one. Since then, everything we have built has been an attempt to improve that representation: to make it wider in scope, higher in resolution, faster in response. The telescope extended sight; the microscope, attention; the camera, memory; the computer, abstraction. Then came the internet, the industrial revolution of the information world. Not only we see how information connects people, things, and ideas, we are building new connections at an unprecedented pace. Each of these inventions was another way to describe the world, another step toward a map that would cover more of the territory. And yet, the map was never the territory. Each increase in precision brought more distortion in a way we had never imagined, because representation always simplifies. But it also multiplies — and that multiplication seems infinite. Reality, after all, is finite: bounded by matter, energy, time. But information is combinatorial. Every new way of encoding a fact generates endless variations of that fact, endless relationships between facts. The more we record, the faster those relationships grow. The same world keeps producing more and more possible descriptions, and the descriptions themselves start to interact, forming secondary worlds — cultures, sciences, networks, economies. We find ourselves surrounded not by reality, but by representations relating to representations. Maybe that is why we came to the point to build machines to help us handle them. Information now exceeds what any single human can process. Our brains evolved for survival, not infinity. So we delegate. We build instruments, algorithms, and now artificial intelligences to see on our behalf, to notice patterns our minds can’t hold. The question then is no longer whether information can represent reality, but whether it can organize itself — whether the act of representation can become autonomous. That, to me, is what artificial intelligence really is. Until recently, only living beings could discover new relationships between non-living things. A spider can weave geometry; a poet can compare a cloud to a sheep. But a stone cannot reflect on another stone. AI changes that. For the first time, a non-living system can produce new relationships among things it never experiences. It can link an image to a word, a molecule to a property, a pattern to a prediction. It is, in a quiet way, the moment information starts to self-organize. The universe has been deterministic for eons, then biological for a while, and now it is becoming informational — not just in content, but in behavior. When I think about this, I see evolution continuing by other means. DNA organized information through replication and selection; AI organizes it through learning and optimization. The process is different, but the principle is similar: information rearranges itself to find better representations of the environment. Except now the environment includes the information itself. We are watching a loop close — information reflecting on information, representation evolving without life. This changes the scale of the “observable information universe”. What we can see has always depended on what we can represent. Telescopes expanded the sky; microscopes expanded the cell; now neural networks expand the abstract. They reveal connections we didn’t know were there, structures too subtle for the senses. The more we delegate perception to machines, the larger our universe becomes — though maybe not our understanding of it. Because there’s a difference between what can be known and what can be grasped. The universe we can now observe may already exceed the universe we can mean. That’s when I start wondering whether the question — “Which gives rise to which, reality or information?” — might be the wrong question to begin with. Reality and information do not stand in a chain of cause and effect at all. Maybe they occupy different dimensions. Reality happens; information describes. One is existence, the other is intelligibility. What links them — the bridge that validates the representation — might be something like resonance. A representation works when it resonates with experience, when prediction meets perception, when the pattern aligns with the unfolding of things. If that is so, then truth is not a static correspondence but a living relation, an ongoing negotiation between the map and the terrain. The idea of a perfectly accurate representation might itself be an illusion. Maybe all we ever have are degrees of adequacy: good enough to act, good enough to survive, good enough to move forward. Even our own cognition functions this way. The human mind is a lossy compression of the world. It keeps only what matters to its purpose. Consciousness, as some neuroscientists say, is a controlled hallucination — a simulation that stays in sync with reality just enough to work. In that sense, AI is not alien at all; it is a mirror of our own epistemic condition, stripped of flesh and desire. AI also makes this condition visible. It shows us how little “understanding” might actually be required to act intelligently. A system can produce meaningful results without ever meaning anything. It can be right without being aware. That realization destabilizes our hierarchy of knowledge. If cognition can exist without consciousness, then maybe consciousness was never the point. Maybe the universe doesn’t care whether understanding feels like something — it only cares that patterns continue to self-organize. Still, I can’t help feeling a kind of humility in this. The more the informational universe grows, the smaller our personal sphere becomes. Our “meat-based” brains are extraordinary, but limited. We were designed to live on the savannah, not inside a planetary web of data. Yet here we are, building extensions of mind that see further than we ever will. Perhaps this is the next natural step: information “using” us as a transitional species, a bridge from biological evolution to informational evolution. The same way life used carbon chemistry, information now uses silicon cognition. This thought can sound terrifying, or liberating, or simply inevitable. I don’t think it has to be apocalyptic. It’s just another phase of the same story: the universe trying to reveal itself more completely. And the more complete the representation becomes, the less it needs any single perspective. In that sense, meaning doesn’t disappear; it diffuses. It becomes environmental, ambient, woven into the systems themselves. What was once sacred in consciousness might now exist in structure. And yet, there’s still something profoundly human about asking these questions. Machines can model patterns, but they do not worry about the validity of representation; they do not wonder whether the map is real. Only we do. Perhaps that is our unique role, not to compute faster or see further, but to care about what it means to represent truly. To sense the gap between reality and information and feel its tension as wonder. To stand between what is and what is intelligible and call that space meaning. So I don’t see this as an abstract exercise. Understanding the nature of information, of representation, helps us understand our own time — why human moods shift with technological revolutions, why societies feel more anxious the more connected they become. Each revolution in information technology doesn’t just change how we know; it changes what it feels like to be human. When writing arrived, memory externalized and civilizations began. When printing arrived, authority dispersed. When digital networks arrived, identity fragmented. Now with AI, cognition itself is diffusing into the environment. These shifts reshape politics, culture, emotion — the entire atmosphere of civilization. They explain why our era feels both omniscient and uncertain, hyperconnected and profoundly lonely. Information has become so abundant that meaning struggles to keep up. Maybe that’s why I find this whole inquiry both, at the same time, unsettling and comforting. Comforting, because it suggests that thought itself is part of the universe’s unfolding; Unsettling, because it is almost impossible to feel what it is like in the future. Representation might never capture reality, but it participates in it. As I look at this new age of artificial intelligence — this moment when information starts to think about itself — I don’t see an ending. The question of whether the realm of information will outgrow us is real, but maybe irrelevant. What matters is that for a brief moment, we are here to witness it, to wonder at it, and to add our own layer of representation to the great unfolding of information. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

The Illusion of Simplification For shareholders of HSBC Holdings PLC, the proposed privatization of Hang Seng Bank (HASE) is a textbook case study of how politics and institutional concerns trump shareholders’ interests. Despite the elegant management’s narrative put forward by HSBC and Hang Seng, such as “simplification,” “alignment,” and “agility,” the ambiguous yet pleasant sounding jargon veil a complex and costly act of capital engineering whose true objective is purely political. At HK$155 per share, the offer represents an implied price-to-book multiple of around 1.7x, valuing HASE at approximately HK$290 billion. That figure stands at a 70% premium to its last reported net asset value and roughly 30% above its trading price before the announcement. For a bank whose profit declined nearly 30% year-on-year (1H 2025), and whose net interest margin contracted by 30 basis points, such a valuation borders on financial hubris. It is, in effect, a buyback of capital already owned, paid for with shareholders’ money, justified by promises of capital efficiency that the bank itself constrains through its political and regulatory entanglements. The Exorbitant Price of Control In substance, HSBC already controls HSB—holding roughly 63% of its equity and full management oversight. What the bank does not control is the ability to extract HASE’s excess capital, which remains “stranded” within its own subsidiary structure. HASE’s CET1 ratio of 17.7%, among the highest in Asia, represents an underutilized capital pool. By acquiring the minority stake, HSBC consolidates HASE’s capital base, freeing roughly 320 basis points of CET1 that could be redeployed for share buybacks at the group level. This is not an acquisition for growth—it is an internal reallocation of trapped liquidity, achieved through a premium payment that immediately dilutes shareholder value. The “synergies” are thus rhetorical: HASE already operates with a cost-efficiency ratio of 36.1%, better than nearly all regional peers. There is little room for “streamlining.” Instead, shareholders are being asked to fund a HK$106 billion capital transfer to enable accounting flexibility. The comparison to peers underscores the disconnect: * BOC Hong Kong (2388.HK)—larger, with an ROE near 13%—trades at 1.1x book. * HASE, smaller and less profitable, is being bought at 1.7-1.8x book. HSBC, in other words, is paying a 30% premium over a debt-ridden subsidiary simply to move capital from one pocket to another. The Political Economy of Necessity If the economics appear irrational, the politics of the deal explain everything. Since 2022, HSBC has been caught between two masters: * In Hong Kong, investors led by Ping An Insurance have pushed for restructuring, demanding higher returns and an Asia spin-off. * In London, the bank faces regulatory pressure to demonstrate commitment to financial stability. By privatizing Hang Seng, HSBC performs a delicate geopolitical balancing act. It signals to Chinese regulators a “long-term commitment to Hong Kong”, while simultaneously consolidating its Asian capital base to appease Western shareholders demanding higher buybacks and dividends. In effect, this is a regulatory appeasement premium—the cost of maintaining political and monetary access to both jurisdictions. The “alignment” rhetoric thus becomes a euphemism for survival in a bifurcated financial world where banking strategy is policy by other means. The Arithmetic of Overpayment From a pure capital allocation standpoint, this transaction challenges fiduciary logic.Consider the accounting chain reaction: * HSBC pays HK$106 billion in cash, reducing its group CET1 ratio by roughly 125 basis points. * The Group pledges to rebuild the ratio through organic generation and a pause on buybacks for three quarters. * The entire justification for the transaction hinges on the eventual redeployment of HASE’s excess CET1 to fund future buybacks. The cycle resembles a closed-loop liquidity arbitrage: spend capital to gain access to capital, then use it to buy back equity.This logic only works if the capital unlocked from HSB significantly exceeds the capital expended—a risky assumption given evolving Basel IV standards and Hong Kong’s conservative supervisory stance. If regulators tighten risk-weight rules or constrain intra-group transfers, the released liquidity could be far less than modeled. In that case, the premium paid becomes permanent goodwill, a dead asset on the balance sheet. The Macroeconomic Backdrop: A Steepening Reckoning The deal lands amid a shifting macro regime. After years of flat or inverted yield curves, global bond markets are steepening—a signal that funding costs will rise even as loan growth stagnates.For Hong Kong banks, this is a double-edged sword: * Rising long-term yields erode the value of bond portfolios (a key driver of HASE’s fair-value gains in 2025). * Narrowing short-term spreads compress deposit margins, further squeezing Net Interest Income. HSBC’s management may believe that consolidating HSB’s capital allows them to hedge duration risk at the group level and maintain dividend commitments through buybacks. Yet from a shareholder’s standpoint, the transaction amplifies exposure to precisely the market forces eroding bank valuations worldwide: balance sheet duration mismatches, regulatory capital tightening, and higher cost of equity. In a world of rising real yields, paying 1.7x book for a bank whose profitability is decelerating is not capital discipline—it is institutional inertia dressed as strategic foresight. Banks as Instruments of Public Policy There is a deeper truth behind the deal. Large universal banks like HSBC no longer operate as pure profit-maximizing entities; they function as quasi-political institutions intertwined with state objectives, regulatory mandates, and social obligations.The Hang Seng privatization is emblematic of this: it is an act of financial statism within the architecture of capitalism—a reminder that in the modern monetary order, liquidity allocation follows legitimacy, not market logic. HSBC’s board knows this. It cannot refuse the political imperative to “invest in Hong Kong.” Nor can it ignore London shareholders’ demand for capital efficiency. The privatization is therefore the least bad option: an expensive but inevitable compromise to sustain access, influence, and relevance in both hemispheres. Conclusion: The Price of Power For the skeptical shareholder, this transaction raises the oldest question in finance: whose interests does the bank serve? HSBC frames the privatization as a step toward agility and alignment, but in truth it is a costly reaffirmation of its entanglement with power—regulatory, political, and institutional. It buys goodwill from policymakers, capital flexibility from regulators, and temporary appeasement from investors. But at HK$155 per share, the price of that goodwill is steep, and as the yield curve steepens and the global banking cycle tightens, the market will eventually demand evidence that the capital liberated from Hang Seng was worth the premium paid. Sources: HSBC Joint Announcement, Oct 2025 This is a public episode. 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Two hundred and fifty years is a blink in the span of human civilization. Empires have risen and fallen over centuries; religions have endured for millennia. Yet in that quarter of a millennium, the United States compressed more transformation into its history than perhaps any other society. What makes the American story remarkable is not stability or continuity, but turbulence, risk, and reinvention. Greatness in America was never about being perfect, nor about being “great again.” It was about staying forever young, propelled by institutions strong enough to contain conflict and open enough to reward ambition. From the beginning, America was a society that treated failure differently. In Europe, a bankrupt merchant or failed adventurer carried disgrace for life. In America, bankruptcy was a setback, not a sentence. Laws were forgiving, mobility was real, and newcomers found second chances. Alexis de Tocqueville marveled in the 1830s that Americans launched into trade “as if success or failure had no influence on their future condition.” That tolerance of risk created a culture where turbulence became the price of progress. Alexander Hamilton understood this. Born illegitimate in the Caribbean, he arrived in New York as an outsider with nothing but ambition. As Treasury Secretary, he built the scaffolding of American capitalism: a funded national debt, a national bank, tariffs, excises, and support for industry. His aim was not merely solvency but credibility — to make the republic a trustworthy borrower so that capital would flow. He wrote that “a national debt, if it is not excessive, will be to us a national blessing.” To his critics, this sounded reckless. To Hamilton, it was nation-building through trust, a system where finance served opportunity, not just inheritance. Thomas Jefferson, Hamilton’s rival, imagined something different: a republic of yeoman farmers, free from the corruption of banks and cities. He saw Hamilton’s system as a seed of oligarchy. Yet his agrarian ideal was paradoxically sustained by Hamilton’s finance. Without credit, infrastructure, and markets, farmers would remain poor and isolated. Jefferson purchased Louisiana and expanded opportunity, but his farmers needed Hamilton’s canals and credit to prosper. Thus, from the start, America fused two contradictory visions — agrarian egalitarianism and financial capitalism — into a restless hybrid that could adapt. Europe, by contrast, clung to feudal residue. The revolutions of 1848 demanded liberal reform but were crushed by monarchs and aristocrats. Industrialization advanced, but under dynastic control. America was an empire too, but one without emperors. Its legitimacy rested not on bloodlines but on constitutional order. Politics was fiercely partisan, sometimes violent, but elections, not thrones, conferred power. The Civil War tested this experiment. Slavery was the deepest contradiction, but secession also revealed a clash of economic visions: an agrarian system bound to coerced labor versus an industrial, capitalist republic. The Union’s victory destroyed the last vestiges of feudalism and ensured that America would be defined not by cotton but by industry, migration, and knowledge. By 1900, the United States had overtaken Britain as the world’s largest economy. The Gilded Age produced vast fortunes — Rockefeller in oil, Carnegie in steel, Vanderbilt in railroads. Inequality was immense, but unlike Europe, it was fluid rather than permanent. Yesterday’s factory worker could become tomorrow’s shopkeeper. The son of an immigrant could rise into business or politics within a generation. Railroads — more than 170,000 miles laid between 1871 and 1900 — opened markets, lowered barriers, and spread opportunity. Inequality was real, but it was not destiny. America’s mobility made the risk worth taking. Technology amplified this dynamism. Railroads shrank distance. The telegraph and telephone collapsed time. Electricity transformed industry and daily life. Automobiles replaced horse-drawn carriages. Each innovation created new fortunes and destroyed old ones. This was not incremental change but what Joseph Schumpeter later called “creative destruction.” Standard Oil looked unassailable, until new energy and new firms displaced it. Carnegie’s empire seemed permanent, until chemistry and new materials shifted the frontier. In America, permanence was the illusion; disruption was the rule. The Great Depression challenged this ethos. The crash of 1929 was not just a financial panic but a collapse of confidence in capitalism itself. Breadlines stretched across cities, banks failed, unemployment soared. Critics said laissez-faire had run its course. Europe turned to socialism, fascism, and corporatism. Yet America did not abandon capitalism. Franklin Roosevelt’s New Deal built scaffolding — Social Security, deposit insurance, public works — but it did not create a European-style social democracy. The aim was not to lock society into stability but to buy time for capitalism to heal. And heal it did, through innovation. Even in the depths of depression, America produced advances in aviation, radio, automobiles, and medicine. World War II confirmed the lesson. Before the war, America’s army was smaller than Romania’s. Its strength lay not in troop numbers but in industrial capacity and engineering ingenuity. Within months, Detroit switched from cars to tanks and bombers. Boeing and Douglas scaled aviation to new heights. Bell Labs advanced radar. The Manhattan Project built the atomic bomb. This was capitalism at full throttle: not central planning, but urgency harnessed to flexibility. America won the war not by being the biggest army, but by being the most creative problem-solver. From 1945 to 1973, the “Golden Age of Capitalism” saw productivity surge, wages rise, and the middle class expand. The GI Bill opened universities to veterans and made homeownership widespread. Highways, suburbs, and consumer culture flourished. Inventions like transistors, computers, and space technology reshaped society. For many Europeans, prosperity seemed to come from welfare states. In America, the deeper driver was innovation. Risk, mobility, and reinvention made the middle class possible. Globally, America anchored a new order. At Versailles, Woodrow Wilson’s principles reshaped international law. At Bretton Woods, the dollar became the world’s anchor currency. Even after gold convertibility ended in 1971, the dollar’s credibility held. Washington built institutions — the IMF, World Bank, NATO, GATT — but its true advantage lay in its private sector and financial depth. Wall Street became the clearinghouse of global capital; American corporations designed and managed global supply chains. The United States was not the largest exporter, but it was the orchestrator of value creation. As manufacturing shifted abroad, America became the first true post-industrial society. Deindustrialization looked like decline to some, but it was actually reinvention. The country moved up the value chain: from making goods to designing them, branding them, financing them, and selling them to the world. McDonald’s exported not just hamburgers but a model of management and supply chains. Procter & Gamble exported detergents and the science of marketing. Apple created an ecosystem of design in California and assembly in China, proving that value lies not in factories but in knowledge and coordination. Nvidia’s chips today underpin the artificial intelligence revolution, another American-led transformation. Silicon Valley embodied the cultural difference. Failure was not shame but experience. Venture capital funded untested ideas. Universities like Stanford and MIT incubated startups. Out of this ecosystem came Microsoft, Apple, Google, Amazon, Facebook. Europe had engineers, Japan had factories, China had labor. But only America combined risk-tolerant culture, deep finance, world-class universities, and openness to talent. That is why the Information Revolution, like the Industrial Revolution before it, was American-led. The fall of the Soviet Union in 1991 seemed to mark the “End of History.” Communism had collapsed; liberal democracy and capitalism looked universal. Yet America’s story was not one of unchallenged triumph. Polarization grew as some regions prospered while others fell behind. The 9/11 attacks reframed security around non-state threats. Wars in Afghanistan and Iraq showed the limits of military power in remaking societies. China offered an alternative model through its “Beijing Consensus,” financing infrastructure and state-led growth across the Global South. But this model produced dependency, corruption, and backlash when projects faltered. It lacked legitimacy, the very foundation Hamilton had prized. Today, America faces a paradox. Its government is often reluctant to act as an empire. Fiscal strain and cultural instincts push Washington inward. Yet America remains the greatest beneficiary of globalization. Its true strength lies not only in government but in its decentralized networks of influence. Apple, Nvidia, Microsoft, and Google design the platforms of the digital age. Wall Street clears global capital. Harvard, MIT, and Stanford train leaders who carry American methods worldwide. Hollywood, Netflix, and the NBA project culture into billions of homes. Civil society — NGOs, foundations, churches, think tanks — promotes openness and pluralism. No other society possesses such an interlocking ecosystem of influence. This is why the United States remains exceptional. Its genius has never been in perfection but in reinvention. Its capitalism is turbulent, but turbulence is the price of mobility. Its politics are polarized, but institutions endure. Its inequalities are real, but they are not destiny. America’s greatness is not a thing to be regained. It is the continuing product of a culture that tolerates risk, rewards reinvention, and welcomes newcomers. Ronald Reagan, in his farewell address, described America as “forever young,” renewed by people “from every country and every corner of the world.” That is the secret. America is great not because it avoids turbulence, but because it turns turbulence into progress. So long as it remains open to risk, to migration, and to the restless pursuit of knowledge, its story is not finished. It is still being written — not as nostalgia, but as reinvention. The Great America: 250 Years of Reinvention through Constitutionalism and Capitalism This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

It was 1954. Millions of Americans sat glued to their television sets as Senator Joseph McCarthy, once the most feared man in Washington, was humiliated during the Army–McCarthy hearings. “Have you no sense of decency, sir?” the famous rebuke rang out, and the chamber fell silent. For many, it was the moment the fever broke, when the republic seemed to reawaken from a nightmare of suspicion and silence. Yet the deeper story of McCarthyism is not about one demagogue brought low, but about the unsettling ease with which free people turned against the very liberties they had so recently celebrated as the essence of their national identity. The United States, born of a revolution against tyranny and consecrated in the Bill of Rights, prided itself as the world’s beacon of liberty. And yet, within a few years of victory in World War II, it constructed elaborate loyalty programs, compelled citizens to sign oaths renouncing ideological sins, and allowed neighbors, colleagues, and artists to be branded “un-American” for the smallest hint of dissent. How could the land of Jefferson and Lincoln come to mirror, however faintly, the authoritarian systems it opposed abroad? The answer lies in the dynamics of fear, power, and political expediency. The early Cold War was not simply a foreign policy conflict; it was an internal reckoning about who counted as “truly American” and how far the government could go in policing thought. The atomic bomb in Soviet hands, the “loss” of China, and the bloody stalemate in Korea stoked anxieties of betrayal from within. Political entrepreneurs seized the moment, weaponizing patriotism into suspicion, and suspicion into purge. Congress, the FBI, universities, Hollywood studios, and entire professions became arenas where liberty was curtailed in the name of protecting it. But repression did not end with McCarthy’s downfall. The apparatus of surveillance and suspicion outlived him, shaping the boundaries of dissent for decades. And just as telling, the backlash against this era, expressed in the civil rights marches, student uprisings, and cultural revolutions of the 1960s and 1970s, was fueled by a generation determined never again to live in silence. McCarthyism was a wound and a catalyst. It scarred the republic, but it also provoked the most far-reaching reassertion of freedom in modern American history. This essay asks a simple but disturbing question: why do free societies turn against their own freedoms? By tracing the rise, practice, and long shadow of McCarthyism, we can glimpse the fragility of liberty, and understand how American democracy, even in its most fearful moments, carries within it both the seeds of repression and the potential for renewal. Seeds of Suspicion: The Cold War Domestic Context The fear that gripped the United States in the late 1940s and early 1950s did not appear out of nowhere. To understand McCarthyism, we must first place ourselves in a world that seemed, to many Americans, to be unraveling. Only a few years earlier, the United States had emerged from World War II as the undisputed leader of the “free world.” It had defeated Nazi Germany and Imperial Japan, possessed the world’s strongest economy, and held a monopoly on the atomic bomb. Americans believed they were living in a moment of triumph, with their ideals of liberty and democracy set to guide the world. Yet within a very short span of time, that sense of security collapsed into dread. The Soviet Union, once a war ally, quickly became the United States’ primary adversary. In 1949, the Soviets shocked Washington by detonating their own atomic bomb, ending the U.S. monopoly on nuclear weapons years earlier than expected. That same year, China, the most populous country on earth, fell to Mao Zedong’s Communist Party, which American officials framed as a catastrophic “loss.” And in 1950, North Korea, backed by Moscow and Beijing, launched a surprise invasion of South Korea, pulling U.S. troops into a brutal war on the Korean Peninsula. To many ordinary Americans, it seemed as though communism was advancing everywhere, and that America’s survival was suddenly at stake. But there was another, deeper anxiety: the possibility that America’s enemies were already inside the gates. The idea of “enemies within” became a powerful narrative. If China could “fall,” perhaps it was because of traitors in the State Department. If the Soviets could develop an atomic bomb so quickly, perhaps it was because spies had handed them secrets. The infamous case of Alger Hiss, a former high-ranking State Department official accused of being a Soviet agent, and the trial of Julius and Ethel Rosenberg, executed for passing atomic secrets to Moscow, cemented the fear that betrayal was not just theoretical, it was real. The government’s own policies amplified this climate of suspicion. In 1947, President Harry Truman, himself a Democrat and often accused of being “soft” on communism, launched a sweeping Federal Employee Loyalty Program. This required government workers to prove their loyalty and allowed officials to investigate, even dismiss, employees suspected of “subversive” ties. No actual evidence of espionage was necessary. Mere association with the wrong organization could cost a person their livelihood. It was the first nationwide attempt to institutionalize loyalty screening, and it set the precedent that political orthodoxy was now a condition of employment. These measures were not isolated. They reflected a larger cultural mood: Americans had learned to conflate unity with safety. To disagree, to dissent, to appear different in thought or association was suddenly dangerous. It was not just a matter of politics but survival. This atmosphere of fear and conformity prepared the ground for McCarthy’s meteoric rise. When he claimed that communists had infiltrated the government, he was not inventing a new fear. He was tapping into anxieties already deeply rooted in the American psyche. The Rise of McCarthy and Political Opportunism When Joseph Raymond McCarthy entered the national spotlight in 1950, he was hardly a household name. Born in 1908 on a Wisconsin farm, he rose from humble origins to study law, practice briefly, and then enter politics. During World War II he served as a Marine Corps officer in the Pacific, earning the nickname “Tailgunner Joe” for his combat flights, though even this part of his biography was later revealed to be heavily embellished. By 1946, McCarthy was elected to the U.S. Senate as a Republican and his fortunes changed in February 1950, when, at a Republican Women’s Club speech in Wheeling, West Virginia, he claimed to have a list of 205 known communists working in the State Department. The number itself shifted in his later retellings, but the headline-grabbing claim electrified audiences. At a moment when Americans were already fearful of betrayal within, McCarthy offered a simple, dramatic answer. The enemy was not just abroad, it was in Washington, and he alone was brave enough to expose it. McCarthy rarely produced verifiable evidence, but his accusations were crafted in ways that forced others to prove their innocence. This inversion of justice, where suspicion itself became condemnation, was enormously powerful in the climate of the early Cold War. Several factors amplified McCarthy’s rise: * Institutional timing: The Republican Party, out of power since the 1930s, was hungry for a wedge issue against Democrats. McCarthy’s accusations allowed them to portray Truman’s administration as weak and compromised. * Media dynamics: Newspapers and, increasingly, television carried McCarthy’s dramatic charges into living rooms across America. For journalists chasing headlines, McCarthy’s bombast was irresistible. * Bureaucratic allies: J. Edgar Hoover’s FBI shared McCarthy’s zeal for rooting out communists, and though Hoover disliked McCarthy personally, the FBI’s surveillance programs lent credibility to the atmosphere of suspicion. By the early 1950s, McCarthy had turned his Senate committee into a stage for televised interrogations. Careers were destroyed, reputations ruined, and institutions, from the State Department to the Army, were paralyzed by fear of his investigations. McCarthy had no grand strategy, but he wielded fear like a weapon, and in an America unsettled by global shifts, fear proved a potent political currency. The Machinery of Fear McCarthy may have provided the spark, but the firestorm of the early 1950s was fueled by forces much larger than a single senator. Fear of communism seeped into the very fabric of American institutions, political, cultural, and social, creating an environment where liberty was curtailed not by a dictator’s decree but through countless small acts of compliance, intimidation, and silence. What emerged was not an authoritarian state imposed from above but a self-reinforcing culture of suspicion, in which ordinary citizens and powerful institutions alike learned to police thought as well as behavior. One of the strongest tools was the loyalty oath. Following President Truman’s Federal Employee Loyalty Program of 1947, thousands of government workers were required to affirm that they had no ties to “subversive organizations.” The practice soon spread. State governments, universities, and even local school boards adopted their own loyalty requirements. The University of California became infamous for demanding that its faculty swear an oath renouncing communism. Professors who refused, not because they were communists, but because they objected to political tests as a matter of conscience, were dismissed. Freedom of thought itself was transformed into a liability; to question the oath was to invite suspicion. The entertainment industry became another frontline in the battle for ideological conformity. The House Un-American Activities Committee (HUAC) staged sensational hearings into alleged communist influence in Hollywood. The result was the creation of blacklists, informal but devastating rosters of writers, directors, and actors denied work if suspected of leftist sympathies. The “Hollywood Ten,” a group of screenwriters and directors who refused to testify before HUAC in 1947, were imprisoned for contempt of Congress. Others, faced with the impossible choice between their careers and their principles, agreed to testify against friends and colleagues. What had once been celebrated as a bastion of artistic freedom was remade into a system of surveillance, where silence could mean unemployment and speaking out could mean exile. The culture of fear extended well beyond the halls of Congress or the studios of Hollywood. It reached neighborhoods, schools and workplaces. Neighbors reported on neighbors, coworkers whispered about suspicious activities, and union leaders were pressured to purge members accused of communist sympathies. Churches, too, entered the fray, portraying the Cold War as a cosmic struggle between Christianity and godless communism. Citizens who had once attended leftist meetings during the Great Depression, or who subscribed to radical journals years earlier, suddenly found their pasts weaponized against them. Parents warned their children to avoid controversial conversations at school. In this climate, dissent was no longer just risky, it was branded un-American. The media magnified the spectacle. Televised hearings and newspaper coverage turned accusations into headlines and public theater. Journalists reported McCarthy’s charges as fact, rarely demanding evidence. Sensational coverage of espionage trials, like those of Alger Hiss or the Rosenbergs, reinforced the impression that communist agents lurked everywhere. For years, the press acted more as an amplifier than a check on hysteria. Only later, in Edward R. Murrow’s 1954 broadcast confronting McCarthy, did television play a countervailing role. By then, the damage had been done: suspicion had been normalized, and silence had become the safest response. Perhaps the most insidious effect of this machinery of fear was psychological. Ordinary Americans learned to internalize the lesson that deviation was dangerous. The sociologist David Riesman described the “other-directed” personality of the 1950s, an individual perpetually scanning for social approval, anxious to conform. McCarthyism transformed that cultural trait into a political weapon. To stand out, to think differently, was to invite scrutiny. To be safe was to blend in. This was why McCarthy was never truly acting alone. He was the face of a system that extended from Washington to Hollywood, from universities to unions, from government offices to dinner tables. Even after McCarthy himself was disgraced, the machinery did not disappear. It endured, shaping American politics and society well into the 1960s. McCarthy may have fallen, but the fear he embodied lived on. The Survival of McCarthyism After the Fall of McCarthy For years, Joseph McCarthy seemed untouchable. His accusations dominated headlines, his hearings intimidated officials, and few dared to challenge him directly. Yet by the mid-1950s, the tide began to turn. McCarthy’s greatest strength, his flair for accusation without evidence, ultimately became his undoing once he overreached. In 1954, he trained his sights on the U.S. Army, accusing it of harboring communists. Unlike earlier targets, the Army was respected, well-defended, and equipped with the institutional weight to resist. The resulting Army–McCarthy hearings, broadcast on national television, brought McCarthy into American living rooms day after day. Millions watched as he interrupted witnesses, badgered officials, and hurled accusations without proof. The turning point came when Joseph Welch, the Army’s chief counsel, rebuked him with the searing words: “Have you no sense of decency, sir, at long last? Have you left no sense of decency?” The chamber erupted in applause. For many Americans, it was the first time McCarthy had been publicly and decisively shamed. Later that year, the Senate delivered its own rebuke by voting to censure him, an extraordinary act of discipline against one of its own. Once Washington's most feared man, McCarthy quickly became an isolated and diminished figure. His health, already fragile, deteriorated rapidly, worsened by heavy drinking. In 1957, only three years after his censure, he died at the age of forty-eight. To many, his fall seemed to close an ugly chapter. The newspapers that had once echoed his charges now ran obituaries tinged with relief, as if the nation could breathe freely again. Yet this impression was deceptive. McCarthyism did not end with McCarthy. The machinery of fear he had mobilized, the loyalty oaths, the blacklists, the institutional suspicion of dissent, remained intact. The House Un-American Activities Committee continued its investigations well into the 1960s. The FBI under J. Edgar Hoover expanded its surveillance network, now targeting not only suspected communists but also civil rights leaders, student radicals, and later, anti-Vietnam protesters. Martin Luther King Jr., the Black Panthers, and countless student activists discovered that the same logic of suspicion that had once haunted the State Department now pursued them. This persistence reveals a sobering truth: McCarthy himself was never the true architect of repression. He was its opportunistic face, its loudest practitioner, but not its only author. The anxieties of the Cold War, the bipartisan terror of seeming “soft” on communism, and the willingness of institutions to police their own members, all these forces outlived him. In this sense, his downfall removed the demagogue but left intact the structures he exploited. The years after his death only reinforced this paradox. The civil rights movement, the campus uprisings of the 1960s, and the antiwar protests of the 1970s all collided with the remnants of the apparatus he had helped normalize. Protesters were branded “un-American,” dissenters were placed under surveillance, and activists were harassed. The shadow of McCarthyism shaped both the government’s tactics and its opponents' resolve. McCarthy’s collapse, therefore, highlights an unsettling paradox of democracy: it can reject the demagogue while preserving the very tools he used. His disgrace restored some faith in the Senate and gave the illusion of a return to normalcy, but the deeper lesson was clear. Once the machinery of fear is set in motion, it can outlast the man who set it spinning. The Backlash andTransformations The fall of McCarthy did not mean the end of McCarthyism. The machinery of fear persisted through the late 1950s, but repression has a paradoxical tendency: in suppressing dissent, it also breeds resistance. The silence of the 1950s was not permanent. By the 1960s, a younger generation, raised in the shadow of loyalty oaths and political orthodoxy, began to demand the freedoms that had been denied to their parents. The two decades that followed McCarthy’s disgrace became a period of rebellion, expansion, and renewal, an era in which Americans pushed back against the culture of conformity that had defined the early Cold War. The civil rights movement was one of the first major challenges to the lingering structures of McCarthyism. From its earliest days, segregationists and opponents of civil rights smeared activists as communists, claiming they were part of a broader subversive plot. Martin Luther King Jr. himself was relentlessly surveilled by the FBI, which deployed the very tools refined during the Red Scare to discredit him. Yet the movement endured. And in enduring, it helped shift the nation’s understanding of freedom. When the Supreme Court in NAACP v. Alabama (1958) struck down a state’s attempt to force the civil rights organization to reveal its membership lists, the Court did more than protect activists, it repudiated the logic of guilt by association that had been central to McCarthyism. In defending the right to organize and speak freely, the civil rights movement carved out new legal and cultural space for liberty. The rebellion spread to campuses. Students in the early 1960s confronted administrators who enforced rules limiting political activity, restrictions that bore the unmistakable mark of Cold War-era suspicion. In 1964, students at the University of California, Berkeley launched the Free Speech Movement after being barred from distributing leaflets about civil rights and politics. Their professors remembered the loyalty oath controversies of the late 1940s, when colleagues had been dismissed for refusing to swear anti-communist pledges. For students, this history became a warning: they would not live under the same shadow. The Free Speech Movement soon spread nationwide, fusing with opposition to the Vietnam War and the broader counterculture. Where the 1950s had demanded silence, the 1960s made dissent not only permissible but virtuous. The Vietnam War intensified this transformation. Critics of the conflict were often accused of being “un-American,” echoing McCarthy’s old language. Yet unlike the 1950s, when such charges could end careers, the scale of dissent in the late 1960s was too large to suppress. Millions marched in the streets, students occupied campuses, musicians wrote protest songs that defined a generation. If McCarthyism had made suspicion the price of speaking out, the Vietnam era made silence seem complicated. The judiciary played an equally important role in dismantling the remnants of McCarthyism. In Brandenburg v. Ohio(1969), the Supreme Court ruled that speech could only be punished if it incited “imminent lawless action,” raising the bar far beyond the vague accusations of subversion that had justified repression in the 1950s. Decisions like this effectively buried the legal foundations of political purges, ensuring that dissent, however unpopular, was constitutionally protected. Beyond politics and law, culture itself exploded in defiance of conformity. The arts and music of the 1960s and 1970s embodied a hunger for authenticity and freedom. Folk singers like Pete Seeger and Bob Dylan gave voice to protest; rock musicians like Jimi Hendrix and Janis Joplin embodied rebellion. In literature and film, artists who had once been silenced by blacklists reemerged to critique authority. What had been driven underground during the McCarthy years now resurfaced with a vengeance, transforming the nation’s cultural landscape. By the 1970s, the United States was in many ways unrecognizable from the America McCarthy had sought to control. The civil rights movement had dismantled Jim Crow, students had won greater freedoms on campus, the courts had expanded the meaning of free speech, and the culture had embraced dissent as part of national identity. Ironically, the suffocating atmosphere of the 1950s had made such an outpouring not just possible but inevitable. McCarthyism had sought to silence; its legacy was a generation determined to speak louder than ever before. The Cultural Counter-Reaction If politics and courts dismantled parts of the McCarthyite system, it was culture that most vividly dramatized America’s rebellion against conformity. The suppression of the 1950s created a hunger for expression. By the 1960s and 1970s, artists, writers, filmmakers, and musicians seized the opportunity to reclaim the voice that had been stifled. In doing so, they not only responded to McCarthyism but also expanded the very meaning of freedom in American life. Literature offered one of the earliest challenges to the atmosphere of suspicion. Arthur Miller’s The Crucible (1953), written at the height of the Red Scare, used the Salem witch trials as a thinly veiled allegory for McCarthyite hysteria. Its enduring popularity testified to the resonance of his message: that fear could turn a community against itself, destroying justice in the process. A few years later, the Beat Generation took the revolt further. Writers like Allen Ginsberg and Jack Kerouac rejected the restrained, “normal” lives celebrated in the 1950s, embracing experimentation in style and subject matter, sexual freedom, spiritual seeking, open rebellion. Their prose and poetry embodied the principle that to be truly American was to defy orthodoxy. Hollywood, once a target of purges and blacklists, also reinvented itself. The very industry that had fired writers and actors for their alleged sympathies became a site of daring cultural critique. In the 1960s and 70s, directors pushed boundaries, creating films that questioned authority and satirized Cold War anxieties. Stanley Kubrick’s Dr. Strangelove(1964) ridiculed the paranoia of nuclear brinkmanship, while Easy Rider (1969) celebrated freedom on the open road, thumbing its nose at the staid respectability of the previous decade. Where once Hollywood had been policed, it now policed the guardians of conformity. Music became perhaps the most powerful weapon of cultural resistance. Folk singers like Pete Seeger, once hounded by HUAC, returned as mentors to a new generation. Bob Dylan’s protest anthems, Blowin’ in the Wind, The Times They Are A-Changin’, articulated the frustrations of youth and the demand for change. Rock musicians went further, making defiance itself part of their performance. Jimi Hendrix’s incendiary guitar solos and Janis Joplin’s raw voice gave sound to a cultural revolution. Music, portable and communal, reached into living rooms, dormitories, and public squares, uniting dissenters in a way congressional hearings could not silence. The visual arts also reflected the shift. Abstract expressionists like Jackson Pollock had already broken with convention in the late 1940s, but their chaotic canvases gained new resonance in the context of cultural rebellion. By the 1960s, pop artists such as Andy Warhol subverted consumer culture itself, suggesting that conformity had infiltrated even the supermarket and the television screen. Art became another form of political defiance, rejecting the rigid molds of the McCarthy years in favor of experimentation and play. The broader cultural effect was transformative. Where difference had once been dangerous, by the late 1960s it was celebrated. Where silence had once meant safety, expression now meant survival. The counterculture not only filled the vacuum left by political repression, it reversed it, making dissent central to America’s self-image. The cultural counter-reaction did more than heal the wounds of McCarthyism; it redefined what it meant to be free. By insisting on creativity, authenticity, and rebellion, artists and audiences alike ensured that liberty would no longer be confined to the narrow boundaries set in the early Cold War. McCarthy had sought to enforce sameness. The generations that followed him made difference itself into a form of freedom. Legacies of McCarthyism McCarthyism outlived McCarthy, not as a single campaign but as a set of attitudes, practices, and structures that reshaped American political culture. Even decades later, the very word “McCarthyism” remained a synonym for repression by accusation, invoked whenever fear was used as a weapon against dissent. One of its most enduring legacies was the suspicion directed at intellectuals and dissenters. Professors, artists, and journalists never fully escaped the stigma that McCarthyism had stamped upon them. Though the blacklists eventually faded, the idea that intellectuals were “out of touch” or “un-American” lingered stubbornly. During the campus uprisings of the 1960s, the critics of the Vietnam War in the 1970s, and even the feminist and gay rights movements that followed, activists were often accused of threatening “real America.” This reflex to equate dissent with disloyalty was a direct inheritance of the McCarthy years. The second legacy was institutional. The FBI, which had expanded its reach during McCarthy’s time, never returned to its pre-Red Scare scale. Under J. Edgar Hoover, the FBI developed extensive surveillance programs such as COINTELPRO (1956–1971), targeting civil rights leaders, student activists, and political radicals. Martin Luther King Jr. was harassed and monitored, the Black Panthers were infiltrated, and Vietnam protesters were tracked and discredited. The machinery of loyalty checks, files, and suspicion built in the late 1940s had become the blueprint for a permanent national security state, one that outlasted the Cold War itself. Just as influential was the style of politics McCarthy had embodied. He had shown that paranoia could be a potent weapon, and others carried this lesson forward. Richard Nixon, whose early career was forged in the anti-communist battles of the late 1940s, brought that suspicion into the White House. His infamous “enemies list” and obsession with leaks revealed the same mentality that once fueled McCarthy’s accusations: opponents were not legitimate rivals but internal enemies to be neutralized. The Watergate scandal, in many ways, was a continuation of McCarthyite politics by other means. Later, in the 1980s, Ronald Reagan revived Cold War rhetoric about the “evil empire,” and conservatives once again accused liberals of being “soft” on communism, language that echoed McCarthy almost word for word. After 9/11, the same logic resurfaced under a new guise: the Patriot Act expanded surveillance, Muslim-Americans faced suspicion, and dissent against the “War on Terror” was often treated as disloyal. Each time, the pattern repeated: liberty was curtailed in the name of protecting it. So deeply did McCarthyism shape American consciousness that the term itself became part of the national lexicon. To call an opponent’s tactics “McCarthyite” was to accuse them of guilt by association, of reckless accusation, of fear-mongering. Yet the persistence of the term underscored how deeply the phenomenon had embedded itself in the country’s political imagination. From the “witch-hunts” of the 1990s culture wars to contemporary debates about terrorism, immigration, and surveillance, the ghost of McCarthyism lingered, ready to be summoned whenever suspicion could be turned into political advantage. The legacy of McCarthyism, then, is profoundly double-edged. It left behind wrecked careers, damaged institutions, and a culture of suspicion that corroded trust. But it also provoked resistance. Civil rights protections were strengthened, free speech rulings were broadened, and a culture of dissent became central to American identity in the decades that followed. McCarthyism revealed democracy at its most fragile, yet paradoxically helped spark the resilience that kept it alive. It remains both a cautionary tale and a reminder: liberty can be undone by fear, but fear can also awaken the determination to defend liberty anew. Liberty’s Fragility in the Twenty-First Century McCarthyism was once thought of as a uniquely mid-century episode, a dark chapter neatly sealed with the senator’s disgrace and death. Yet its legacy reaches forward, reminding us that liberty’s greatest threat often comes not from foreign enemies but from fear within. Today, as America enters a new period of turmoil, what some call a second Cold War, this time with China, the echoes of McCarthyism are unmistakable. The culture wars of contemporary America have produced a climate disturbingly familiar to students of the 1950s. The recent death of Charlie Kirk, which sparked both condemnation of violence and fierce attacks on his ideas, revealed the raw intensity of political polarization. On both the left and the right, there are fanatical voices ready to justify censorship: some demand silencing through government machinery and regulation, while others flirt openly with intimidation and violence. The tools may differ from the loyalty oaths and blacklists of McCarthy’s era, but the impulse is the same, to brand opponents as dangerous, and to narrow the boundaries of acceptable speech. Social media has amplified these dynamics, turning suspicion and outrage into viral currency. Where newspapers and television once carried McCarthy’s accusations into every home, algorithms now do the work, amplifying division and rewarding the most extreme voices. Politics, in this environment, grows increasingly detached from the lives of ordinary people, who are less concerned with ideological purity than with the simple desire to live, work, and speak freely without fear. This is the warning history offers. The radicalization of politics, the belief that only one side possesses truth and that the other must be silenced, creates the same conditions that made McCarthyism possible. In the 1950s, it was communism that became the rallying cry of fear; today, it may be ideological enemies at home or geopolitical rivals abroad. The labels change, but the pattern endures. Liberty, in moments of fear, is always the first casualty. If McCarthyism teaches us anything, it is that democracies survive only when they resist the temptation to silence. A republic does not strengthen itself by narrowing the circle of permissible thought; it weakens itself, leaving citizens alienated and politics untethered from the reality of people’s lives. To look back at McCarthyism is to see how quickly liberty can be hollowed out, and to recognize, with urgency, that the pressures of our own time can lead us down the same road. The challenge for contemporary America is not simply to win arguments or defeat opponents, but to preserve the very space in which arguments can be made. Freedom of speech, freedom of conscience, and freedom of dissent are not luxuries. They are the lifeblood of a democracy. The danger of McCarthyism was never just the man, it was the machinery of fear. And that machinery, in new forms, is humming again. The question is whether we have learned enough from history to resist it. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

Tesla’s second quarter of 2025 was brutal: deliveries fell 13.5% year-on-year, revenue contracted 12%, and operating margins compressed to mid-single digits. Yet, in the middle of this slump, the board is asking shareholders to approve the largest CEO pay package in corporate history—potentially worth one trillion dollars. It is a staggering juxtaposition: shrinking fundamentals on one side, an astronomical ask on the other. At such a moment, investors must ask the unvarnished question—does this serve Tesla, or does it serve Elon Musk? The Trillion Dollar Ask The board’s proposed package would hand Musk up to 12% additional equity in Tesla, contingent on crossing an Everest of targets: a market capitalization of $8.5–8.6 trillion by the mid-2030s, annual production of 20 million vehicles, deployment of fleets of autonomous robotaxis, humanoid robot commercialization, and a soaring $400 billion EBITDA. To put this in perspective, Tesla today is worth roughly $1 trillion; the board is effectively betting on an eight-fold expansion—larger than the combined current market values of Apple, Microsoft, and Amazon. The ambition borders on fantastical. Proponents defend the package as “pay for outperformance.” But the numbers tell a sobering story: Tesla’s Q2 2025 deliveries dropped 13.5% YoY, revenues contracted by 12%, and operating margins slipped from double-digit highs to the mid-single digits. This is not outperformance; it is retrenchment. Against that backdrop, the ask for a trillion-dollar package looks less like incentive alignment and more like a test of how far the cult of the visionary CEO can stretch shareholder patience. Visionary Founder Culture Elon Musk is not just Tesla’s CEO; he is Silicon Valley’s most flamboyant expression of the “visionary founder” archetype. For decades, American business culture—especially in Silicon Valley—has celebrated entrepreneurs as heroic saviors. Steve Jobs was canonized as the creative genius, Jeff Bezos as the relentless optimizer, Mark Zuckerberg as the digital architect. Each cultivated the persona of the irreplaceable leader whose charisma justified extraordinary deference from boards and investors. Musk has perfected this archetype, presenting himself simultaneously as engineer, futurist, and prophet. This culture was reinforced by the venture capital system. Since the 1990s, VCs have increasingly granted founders dual-class shares and “super-voting rights”, allowing them to retain control far beyond their equity stakes. The rationale was that protecting “visionaries” from short-term shareholder pressure would unleash long-term innovation. But in practice, it entrenched founders and weakened governance. WeWork’s Adam Neumann, Uber’s Travis Kalanick, and Meta’s Zuckerberg all illustrate how unchecked founder control can corrode oversight. Musk fits neatly into this pattern—except that Tesla’s board has taken the logic to its extreme by proposing the largest compensation package in corporate history. The academic record underscores the risks. Bebchuk and Fried argue that charismatic leaders capture boards, extracting “pay without performance.” Shiller warns that visionary narratives sustain bubbles untethered to fundamentals. Khurana describes the irrational board search for “corporate saviors.”³ Hambrick and Quigley quantify the reality: CEOs, even the most influential, explain only 15–30% of firm performance variance.⁴ And Meindl famously called this the “romance of leadership,” a collective over-attribution of outcomes to the CEO. Perhaps the most telling counterexample is Apple. When Steve Jobs passed away in 2011, many predicted the company could not thrive without him. Yet under Tim Cook, Apple became the world’s most valuable company, proving that visionary founders are not irreplaceable and that strong institutions can outlast charismatic individuals. Tesla’s board, in contrast, seems to be betting the company’s fate entirely on Musk, perpetuating the myth that no one else could lead—a belief that is as dangerous for governance as it is flattering to the man himself. Tesla’s proposed trillion-dollar package is a textbook case of this romance. It is less an incentive system than a cultural artifact—proof that the mythology of the visionary founder, fortified by Silicon Valley’s governance structures, can override basic fiduciary discipline. Musk is not an outlier; he is the culmination of a system that routinely rewards charisma over accountability. Personal Financial Strain Musk’s $44 billion acquisition of Twitter—now X—was a watershed moment not only for social media but also for Musk’s personal finances. To fund the deal, he layered roughly $13 billion of debt onto X’s balance sheet, with annual interest payments estimated between $1.2 and $1.5 billion. When the financing was arranged in 2022, rates were near historic lows. By 2025, after one of the steepest Federal Reserve tightening cycles in decades, servicing that debt became structurally heavier. What once looked like manageable leverage now resembles a cash-flow vice. The pressure was not theoretical. Musk liquidated tens of billions of dollars of Tesla stock in 2022 to help fund the acquisition, breaking with his long-standing insistence that he would “never sell.” His personal wealth remains enormous on paper—north of $200 billion—but the overwhelming bulk is illiquid equity. In practice, he is far more cash-constrained than the headline numbers suggest. Tesla’s board tacitly acknowledged this by imposing a cap: Musk may borrow no more than $3.5 billion, or 25% of pledged collateral, against his shares. It was a governance safeguard, but also a signal of concern about his reliance on Tesla stock for liquidity. For nearly two years, banks were saddled with the “hung” X debt, unable to offload it to investors without taking steep losses. Only in early 2025, under improved market conditions, did they manage to sell down most of the exposure. By then, however, the financial strain had already been revealed: Musk is a CEO managing not only Tesla’s challenges but also the obligations of a leveraged, loss-making social media platform. In this light, the request for a trillion-dollar Tesla package begins to look less like long-term alignment and more like personal liquidity engineering disguised as incentive compensation. Musk’s financial commitments do not end with Tesla or X. He presides over a constellation of ventures, many of which are voracious consumers of capital. Some, like Starship at SpaceX, absorb billions each year in R&D and test launches without near-term revenue to offset the burn. Others, like Tesla’s robotaxi program and its humanoid robotics ambitions, demand sustained investment in AI, chips, and manufacturing capacity, with uncertain timelines to monetisation. His AI startup, xAI, has raised external funding but remains compute-hungry and unproven. Neuralink and The Boring Company are likewise early-stage bets whose commercial viability is still speculative. There are exceptions. Starlink, SpaceX’s satellite internet arm, has become a reliable cash generator, with millions of subscribers and growing defense contracts. But even here, the revenues are dwarfed by the costs of Starship development, which is meant to carry Starlink’s next-generation satellites. In other words, the positive cash flow of one project is quickly consumed by the burn rate of another. The mosaic is unmistakable: Musk leads a liquidity-hungry empire where projects cycle between visionary announcements and heavy spending, often without commensurate near-term returns. Against this backdrop, a new trillion-dollar Tesla equity package looks less like a neutral incentive design and more like a convenient mechanism to shore up the balance of a man stretched across too many fronts. Tesla’s 2008 Near Collapse The mythology of Elon Musk as the indomitable risk-taker has its roots in 2008, a year he has often called the worst of his life. Both Tesla and SpaceX were running out of cash. Tesla’s early Roadster program was plagued by delays and cost overruns; SpaceX had suffered three failed rocket launches in a row. Musk had already poured in much of his personal fortune from the PayPal sale. By December, he was down to his last reserves. In a now-famous episode, Musk wired his final $20 million into Tesla just days before Christmas, uncertain whether he would make payroll. On Christmas Eve, SpaceX finally achieved a successful launch, unlocking a crucial NASA contract. Simultaneously, Tesla secured a last-minute round of financing. For a brief moment, both companies avoided bankruptcy by the narrowest of margins. The story is often retold as proof of Musk’s courage and resilience. Yet it also illustrates the other side of his leadership: a willingness to steer companies to the very edge of insolvency, gambling that last-minute salvation will arrive. It is this history that investors should keep in mind when assessing today’s trillion-dollar package request. For Musk, financial brinkmanship is not an exception but part of the operating model. Governmental Scaffolding The narrative of Elon Musk as a purely market-driven entrepreneur overlooks a crucial fact: Tesla’s ascent has been built on an intricate lattice of government support. In 2010, the company received a $465 million loan from the Department of Energy’s ATVM program. Musk often emphasizes that Tesla repaid the loan early, but what mattered most was timing: the loan arrived when private capital was scarce, and Tesla’s future was still highly uncertain. Without it, the company might never have reached scale. Beyond loans, Tesla’s profitability for much of the 2010s was sustained by regulatory credits—emissions allowances that Tesla sold to competitors, generating billions in revenue. These credits, effectively a policy subsidy, often made the difference between red ink and black ink. Similarly, state-level incentives played a pivotal role. Nevada’s $1.3 billion package of tax abatements and subsidies was decisive in luring Tesla’s Gigafactory to the state, anchoring the company’s production infrastructure. Meanwhile, Musk’s other ventures also leaned heavily on public contracts. SpaceX’s lifeline came from NASA and the Department of Defense, with multibillion-dollar awards such as the $2.9 billion lunar lander contract in 2021. The pattern is unmistakable: Musk has been extraordinarily skilled at converting government programs into corporate oxygen. This does not diminish Tesla’s innovations. But it reframes the myth. The company’s survival and expansion were not purely the triumph of private vision—they were enabled at crucial junctures by public scaffolding. Musk tells the story as “we paid it back early.” The more accurate version is: without public intervention at critical moments, there would have been nothing to pay back. Intensifying EV Competition For most of the past decade, Tesla defined the electric vehicle market. That era is over. In Q2 2025, Tesla delivered roughly 444,000 vehicles, down 13.5% year-on-year. BYD of China, by contrast, delivered about 426,000 EVs in the same quarter, nearly erasing Tesla’s lead. Other Chinese challengers — NIO, XPeng, and Li Auto — are scaling quickly, supported by Beijing’s industrial policies, favorable financing, and a vast domestic market. Legacy automakers are no longer lagging. Volkswagen has committed tens of billions to EVs, with a growing portfolio in Europe. GM and Ford have accelerated their rollouts in North America, often competing directly with Tesla in the SUV and pickup segments. Aggressive pricing, combined with brand familiarity and dealer networks, erodes Tesla’s ability to command premium margins. The competitive landscape is now radically different from Tesla’s early years of dominance. What was once a blue ocean is now a crowded battlefield. With margins tightening and differentiation harder to sustain, Tesla must fight for share in ways it never had to before. Against this backdrop of intensifying competition, a request for a trillion-dollar equity package feels disconnected from market reality — and places even greater weight on whether Musk can still deliver outsized results in a far less forgiving environment. Influence Meets Incentive Tesla’s rise cannot be explained by engineering alone. For years, the company benefited from regulatory credits sold to competitors, federal and state subsidies, and policy mandates that tilted the market toward EV adoption. In this sense, government policy was Tesla’s greatest tailwind, cushioning profits and underwriting growth. But policy is a double-edged sword. As EV subsidies are scaled back in the United States and Europe, Tesla faces the very exposure that once supported it. The phase-out of federal credits for higher-income buyers, the tightening of eligibility rules for battery sourcing, and the prospect of new tariffs in Europe and China all illustrate how public policy can just as easily constrain Tesla as empower it. Musk’s own political maneuvering amplifies the risk. His heavy support for Donald Trump in 2024 was followed by a public rupture in mid-2025, culminating in his absence from a high-profile White House dinner. What began as an alignment with power has shifted into estrangement. For a company that relies on regulatory goodwill—whether in credits, contracts, or infrastructure standards—this is no trivial matter. The larger question for shareholders is whether Musk’s political activity is strategically aligned with Tesla’s long-term interests or primarily serves his personal worldview and other ventures. When influence becomes volatile, and when policy turns from subsidy to scrutiny, the costs of conflating personal and corporate agendas can be immense. Libertarian, Entrepreneur, Rent-Seeker At first glance, Musk’s public identity as a libertarian entrepreneur seems incompatible with his repeated reliance on government contracts, subsidies, and policy support. In reality, there is no contradiction. The libertarian rhetoric legitimises the risk-taking ethos of Silicon Valley; the rent-seeking ensures survival when those risks edge toward failure. Political economist Mancur Olson described rulers who behave as “stationary bandits,” extracting rents while providing just enough stability to preserve their own position. In a modern corporate context, the analogy is striking: a founder-CEO who preaches entrepreneurial freedom while simultaneously structuring his empire to draw from public resources is not betraying libertarianism, but hedging it. Likewise, Joseph Schumpeter argued that entrepreneurs ultimately seek monopoly rents—the temporary profits gained from innovation before competitors erode them. Musk’s career embodies this cycle. He launches ambitious ventures into uncertain markets, leverages public support to sustain them through their most precarious years, and then seeks extraordinary compensation once dominance seems attainable. Seen through this lens, Musk is not an outlier but a consummate strategist: both entrepreneur and rent-seeker, risk-taker and hedger. His trajectory—from the near-bankruptcy of 2008, to government loans and subsidies, to today’s trillion-dollar compensation request—is less paradox than playbook. It is precisely this blending of rhetoric and pragmatism that makes him formidable, but also dangerous for Tesla’s governance. The board must ask: is it aligning incentives, or underwriting a cycle of private risk and public rescue? Coda Musk embodies Silicon Valley’s archetype: the mythic founder who commands loyalty, narrative, and valuation. But charisma is not cash flow. The hard numbers tell a sobering story—deliveries down 13.5%, revenues down 12%, operating margins squeezed, and competition closing in from both China and Detroit. Add to this Musk’s personal liquidity pressures and the debt-laden X acquisition, and the proposed $1 trillion package becomes not a vote of confidence but a wager on mythology. Which leads to the final question Tesla’s board must confront: if the company’s future truly depends on one man, is that not the greatest governance failure of all? This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

What if I told you that Southeast Asia — one of the fastest-growing regions in the world — rests on fragile arches without keystones? Indonesia, the demographic engine. Thailand, the geographic pivot. Two nations that hold up ASEAN. But here’s the paradox: their democracies look complete — parliaments, elections, constitutions — and yet legitimacy is unfinished. Power is split between the people’s vote and unelected guardians. That’s why something as small as a housing allowance in Jakarta or a leaked phone call in Bangkok can trigger national crises. The system is fragile because the keystone is missing. In my latest report, Southeast Asia’s Fault Lines: The Crisis of Incomplete Transformation, I investigate why this matters not just for these countries, but for the stability of the entire region. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

There are concepts that, while seemingly abstract, possess a profound and often insidious power to shape our lives, our societies, and the very future of human liberty: Totalitarianism, Authoritarianism, and Extremism. These are not mere political labels; they are pathologies of power, each representing a regression from the nuanced, individual-centric flourishing that defines true civilization. Let us begin with Extremism. What is it, at its core? It is, as I see it, the inability to tolerate difference. It is the fervent, often zealous, conviction that there is but one voice, one truth, one correct path to be permitted, and all others must be silenced or eradicated. Consider the passionate advocate, utterly convinced of their singular truth. While passion can fuel progress, when it metastasizes into the belief that their truth is the only truth, and that all deviation is heresy, then we witness the birth of extremism. I am a skeptic. I believe truth exists, but it does not reside solely within the domain of secular human beings, nor can any single individual or group claim its exclusive dominion. A philosophical inquiry into epistemology reveals a myriad of pathways to understanding. To assume one's own beliefs are universally and perpetually true is a dangerous hubris. Extremism, in this light, is the most perilous form of collectivism, It is a mindset that cannot abide the tiniest divergence, seeking either to coerce assimilation or to utterly annihilate dissent. From extremism, we turn to authoritarianism and totalitarianism, systems that embody this collective impulse at the governmental level. Totalitarianism, in its most chilling form, seeks total control. It is a system of governance that infiltrates every conceivable aspect of human existence – what we wear, what we do, what we see, what we hear. It is not merely a restriction of freedom, but an absolute subjugation of the individual to the state, a relentless flattening of human experience into a singular, state-sanctioned mold. Every private corner of life, every personal choice, becomes a matter of public decree, enforced by the pervasive hand of the ruling power. Authoritarianism, while perhaps less all-encompassing, is no less dangerous in its implications. It usurps the domain of right versus wrong, wresting it from the individual and placing it in the hands of those in positions of power. Herein lies a critical distinction: the difference between truth and falsehood, and right and wrong. My preference for a certain food, your aesthetic choice – these are matters of individual taste, not universal judgment. Yet, under an authoritarian regime, such personal preferences can be elevated to matters of "right" or "wrong," stripping away individual autonomy and fostering a culture of compliance. The slippery slope here is terrifyingly steep. When matters of personal choice become matters of right and wrong, they can then be transmuted into matters of truth itself. Those holding differing beliefs, those practicing alternative ways of life, are then deemed "untrue," "unhuman." This dehumanization is the fertile ground from which the most horrific atrocities spring, fundamentally altering how we perceive and treat our fellow human beings. The mechanics of control, particularly in politics, are deceptively simple: how a small cohort can manipulate a vast populace into compliance, even into serving their narrow interests. Often, it's not brute force alone. It is the cultivation of fear, the narrative that the "weak" must seek protection from a "strongman" or an omnipotent state. Yet, the stark reality is often the inverse: the collective, driven by fear and dependency, becomes the unwitting bulwark for the very "strongmen" who exploit their anxieties. Consider the role of Ideology and Identity. These are intimately intertwined. What we believe often defines who we are. Contemporary politics is rife with "identity politics," just as the 19th century saw "class struggle." These are attempts to categorize, to group individuals based on shared characteristics or economic status, and then, crucially, to antagonize these groups against one another. It becomes a simplistic "we versus them" narrative, obliterating the rich tapestry of individual identity. But each of us is more than a member of a single group. We are, at once, independent individuals and members of myriad associations: family, profession, hobbies, language, shared geography. The critical question for a free society is where we draw the boundary between our individuality and the rest of the world. It is not an antagonistic relationship; it is not "I against the world." Rather, it is "I, existing as a complete individual, also belonging to diverse groups that may cooperate or conflict." The danger arises when totalitarian and authoritarian regimes, and extremist organizations, forbid this multiplicity of identity, seeking to flatten complexity into a simple, fanatical "we versus them." So, how do we safeguard against such insidious forces? The answer lies not merely in the ritual of elections, though they serve the vital purpose of ensuring no one clings to power indefinitely. Democracy is far more profound than mere electoral politics. It is, first and foremost, about the respect for differences. We must accept that in a free and open society, disagreement is not merely inevitable, but essential. The challenge lies in where we draw the boundaries of this disagreement. If a matter does not involve us, if it does not infringe upon our fundamental rights, it is simply not our business to dictate the choices of others. This is the essence of subsidiarity: that power and decision-making should reside at the level closest to the individual, wherever possible and necessary. Beyond elections and subsidiarity, the true bastions of a democratic society are: Firstly, free speech absolutism. There will always be speech we deem hateful or foolish. But once we open the Pandora's Box of censorship, we embark upon a perilous slippery slope, where more and more ideas become forbidden, and the very marketplace of thought is choked. We must tolerate speech we disagree with, for the alternative is intellectual tyranny. Secondly, the free market. Believe it or not, the financial market, in all its chaotic glory, is often the most potent check on governmental overreach. Governments, particularly modern ones, are deeply dependent on financial markets for public financing. Without this lifeblood, ruling coalitions falter, and even the most tyrannical aspirations cannot be sustained. A free market, therefore, is not merely a means to accumulate wealth, but a crucial bulwark against unchecked state power. Thirdly, and intrinsically linked, is an independent judiciary. A functioning free market, built on competition and cooperation, demands an impartial arbiter of disputes, particularly commercial ones. A judiciary free from political interference is the very avatar of fairness and predictability, allowing the complex dance of commerce and innovation to flourish. Finally, and perhaps most profoundly, lies the cultivation of civil society. This is not a government program or a political party; it is a state of mind. It is when individuals, unbidden and uncoerced, ask themselves: "What can I do? What can we, voluntarily, do to make the world a better place?" It is a psychological state of self-belief, a rejection of the culture of dependency that leads societies to become subservient to the state. We must believe in ourselves, in our neighbors, and in the power of voluntary action to mend, to build, and to uplift. Young people today face immense anxieties, particularly in a world transformed by economic and technological shifts that displace traditional certainties. But the government is not a savior; it can, indeed, be the very source of the problem. Fear, whether among the young or reflected in the media, can easily drive us into the arms of "strongmen" – figures who are not truly strong, but rather exploit our anxieties to fortify their own regimes. True civilization is built on individuals who believe in themselves, who resist the psychological urge to surrender their autonomy to external powers. It is a continuous act of self-reliance, of voluntary engagement, and of a steadfast commitment to the values of liberty, skepticism, and the tolerance of difference. Let us embrace these principles, for they are our most powerful defenses against the encroaching shadows of totalitarianism, authoritarianism, and extremism. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

It has been some time since the last update. The seismic shifts following the events of early 2020 have left many feeling adrift. Subsequently, the trade war destabilized markets. The push for deglobalization is a worrying retreat from the principles of comparative advantage and global cooperation that have historically driven prosperity. Yet, from a historical and free-market perspective, perhaps we should have anticipated some of this. Social discontent is perennial. The siren call to employ governmental coercion never truly fades. These impulses intensify during periods of rapid technological and societal change, as anxieties about individual circumstances rise. The working class often blames globalization for job losses, failing to recognize that these very forces of free trade have expanded access to a higher standard of living. Similarly, the fear of technological unemployment, while understandable, overlooks the creation of new opportunities. This climate of uncertainty bears a striking resemblance to the populist movements of the late 19th and early 20th centuries, where similar anxieties fueled demands for protectionist policies and increased state control, at the expense of peace and liberty. The transition from the fractured and belligerent nationalism of the early 20th century to the rules-based system of the post-World War II era resulted from deliberate efforts to build international institutions – such as the United Nations, the Bretton Woods system, and later the World Trade Organization. In many ways, the past seventy-odd years have represented a triumph of core liberal ideals on a global scale: the emphasis on free trade, peaceful resolution of disputes, and the rule of law instead of the law of the jungle. In the optimistic aftermath of the Cold War during the 1990s, a sense of finality, an "end of history," permeated intellectual discourse, with the triumph of liberal democracy seemingly assured. Nevertheless, this perspective significantly downplayed the enduring and often insurmountable role of geopolitics in shaping the destinies of nations. The underlying dynamics of power, competition, and national interest were never fully extinguished by ideological victory alone. Rules-based systems, for all their merits, remain inherently fragile. Their efficacy hinges on the adherence of even the most powerful nations to the core tenets of classical liberalism, particularly the safeguarding of individual liberty. When these foundational principles are compromised by leading states – as witnessed, for example, when the American government itself infringes upon personal freedoms – the very legitimacy and stability of the international order are undermined. The aftermath of the 9/11 terrorist attacks marked a significant turning point. The perceived exigencies of national security led the United States to increasingly curtail personal liberties in ways that would have been unthinkable just a decade prior. Surveillance programs expanded, due process was questioned, and the very definition of individual freedom seemed to contract under the weight of fear. The Global Financial Crisis of 2008 further eroded faith in the principles of free markets and limited government intervention. Government bailouts across the developed world signaled a decisive shift towards greater state involvement in the economy. This interventionist turn further weakened the ideological consistency of the prevailing international order. This weakening of the ideological foundations of the liberal international order created a vacuum, which China, with its rapidly growing economic and geopolitical influence, has been increasingly eager to fill. Rather than adhering to the set of broadly free-market economic policies championed by the USA and international financial institutions for decades (often termed the "Washington Consensus"), China has promoted an alternative vision often termed the "Beijing Consensus." The Beijing Consensus, while not always explicitly defined, generally emphasizes state-led economic development, authoritarian political control, and a focus on national sovereignty and non-interference in the internal affairs of other nations. China’s growing economic power, fueled by its blend of state capitalism and export-oriented growth, has allowed it to project its influence and forge partnerships with nations. As an authoritarian regime, the Chinese Communist Party’s motivations extend beyond mere economic development; a significant geopolitical agenda is at play. The Belt and Road Initiative, in part, aims to cultivate a bloc of nations that are more aligned with China’s authoritarian model of governance, fostering a geopolitical sphere of influence composed of similarly structured regimes. From this perspective, the optimism surrounding the end of the Cold War in the 1990s, with its perceived triumph of liberalism, may have been premature. While the Soviet Union collapsed, the underlying currents of geopolitical tension never truly vanished. As great power competition intensifies and different ideological blocs solidify, nations may increasingly turn inward, emphasizing national identity and security in response to perceived external pressures and the shifting balance of power. The COVID-19 crisis, erupting in early 2020, served as another powerful accelerant to the trends we've been discussing. The pandemic and the subsequent global response further fueled discontent amongst populations worldwide and significantly eroded trust in established institutions, both domestic and international. When people feel that traditional authorities – whether political, scientific, or economic – have failed them, they become more susceptible to simplistic narratives and charismatic leaders promising radical change. This erosion of trust in institutions created a fertile ground for populist sentiments to take root and flourish. As Eric Hoffer observed in The True Believer, "Mass movements can rise and spread without belief in a God, but never without belief in a devil." Subsequent waves of crises since the 9/11 terrorist attacks have generated widespread anxiety and a sense of societal breakdown, inadvertently creating fertile ground for the identification of such "devils." Whether it was a virus, specific social groups, or perceived institutional failures, these crises provided readily available targets for blame and fueled the kind of collective animosity that often underpins populist movements. Another, perhaps less conventionally discussed, episode during the COVID-19 crisis that illuminated the rising tide of populist sentiment and the erosion of trust in established financial institutions was the meme-stock frenzy, exemplified by the dramatic GameStop saga. Fueled by hype and a populist call to arms orchestrated by Reddit users on platforms like r/WallStreetBets, this movement saw a surge of individual investors banding together to challenge institutional investors – specifically hedge funds that had bet against these companies. The narrative that emerged was one of a David-versus-Goliath battle: ordinary retail investors uniting to defeat the perceived "corrupt elite" of Wall Street. This resonated deeply with a population already feeling disenfranchised and distrustful of traditional financial systems in the wake of the 2008 crisis and the economic uncertainties of the pandemic. The call to "arm" oneself with stock purchases to inflict financial pain on institutional investors became a form of populist rebellion, a way for the "common person" to strike back against a system they felt was rigged against them. As we consider the trajectory of these populist movements, Eric Hoffer's framework in The True Believer offers further insight: "A movement is pioneered by men of words, materialized by fanatics and consolidated by men of action." The intense fervor of populist movements, often driven by rhetoric, will eventually subside as the limitations of simplistic solutions become apparent and the "men of words" exhaust themselves. However, this does not mean the end to societal discontent. Just as one wave recedes, another is brewing. History rarely progresses in a straight line. It is a tapestry woven with conflicting views and values, marked by periods of both advancement and regression. New forms and flavors of populism, fueled by different grievances, will emerge. It is not the absence of conflict, nor the guarantee of immediate consensus, that defines a resilient society. But rather its ability for diverse perspectives to contend, to be scrutinized, and to evolve through free exchange remains the most reliable compass. As old certainties crumble and new anxieties emerge, the seeds of progress, however unconventional or challenging in their inception, will take root and shape the world to come, emerging from the cacophony of competing voices. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

As a free marketeer, I typically do not publicly support candidates for political office. The following interview with the leader of the People's Party of Canada, Maxime Bernier, was recorded in March. I also want to be transparent and disclose that my friend Mimi Lee is running for the Markham-Thornhill seat in Ontario, and Mr. Bernier and I also have mutual friends within libertarian and classical liberal circles. Despite these connections, the focus of this interview remains on exploring current Canadian economic and social issues from a non-mainstream liberal perspective. * Productivity and Economic Growth: * Bernier argues Canada's productivity has significantly slowed due to excessive government regulation, high taxes, and business subsidies. * He proposes deregulation, lower business taxes (a 15% flat tax), eliminating capital gains tax, and ending business subsidies to stimulate investment and productivity. * He also argues that mass immigration has lowered GDP per capita, creating an illusion of growth while making individuals poorer. * He suggests a pause on immigration to force businesses to reinvest in automation, and therefore increase productivity.1 * Government Spending and Deficit: * Bernier criticizes the combined federal, provincial, and municipal deficits, advocating for a balanced budget within a year. * He proposes cutting foreign aid and withdrawing from the Paris Agreement and UN migration compact.2 * Trade and International Relations: * He advocates for free trade, including eliminating interprovincial trade barriers and renegotiating the North American Free Trade Agreement to include the removal of supply management cartels in dairy, poultry, and eggs. * He supports an open, not isolationist, Canada. * He expresses concern about Chinese and Indian interference in Canadian politics and advocates for stricter controls on foreign investment, particularly from China, in natural resources. * Immigration: * Bernier proposes a temporary pause on immigration to address housing and healthcare crises.3 * He advocates for a streamlined immigration process with face-to-face interviews and a focus on immigrants who share Western civilization values. * He is against the current system where people use student visas or temporary work permits as back door ways to become permanent residents. * People's Party of Canada: * Bernier describes the party as a populist, free-market party aiming to increase its vote share. * He emphasizes the party's commitment to individual freedom, personal responsibility, respect, and fairness. * He claims that he is principled, and that his party does not focus on polls.4 This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

A few days ago, I attended an event where someone asked, "Why doesn’t the CCP just ‘take care’ of Jimmy Lai? Wouldn't that be the simplest solution?" It was the launch of Mark Clifford’s new book, The Troublemaker. I was there as an audience to show support. During the discussion, the topic of how authoritarian regimes deal with dissidents came up. Everyone understood the implications of "take care" in this context. After the book launch, I stayed behind with a few acquaintances to discuss the issue further. My take is this: "A living, breathing Jimmy Lai is far more useful to the CCP." Why is that? The CCP's goal is to destroy the symbol of Jimmy Lai. What does Jimmy Lai represent? He embodies a certain kind of Hongkonger — someone who fled Communist China’s oppression, found freedom and opportunity in Hong Kong, and ultimately dedicated himself to defending the city’s freedom and universal values. Back in the 1950s and 60s, there were many people like him in Hong Kong — people who chose to become Hongkongers. Life in Hong Kong wasn’t easy back then, but after decades of hard work, the city became the place we all grew to know and love. If the CCP were to act "without thinking" and permanently eliminate Jimmy Lai, the only message they'd be sending to the world is: "So what?" But the bigger problem for them is that such an act would immortalize him. He would be elevated from a mortal being to a spiritual figure — a "Hong Kong version of Martin Luther King" — remembered and revered for generations. Sure, some might argue that in a decade or so, people will forget who Jimmy was. But in today’s world, thanks to the information revolution, the half-life of collective memory has grown much longer. People live longer too, and many are dedicated to preserving these histories. It’s been five years since 2019, and yet, many of the events of that year remain vivid in people's memories. Ten, twenty, or even fifty years from now, Hong Kong’s history will still not be forgotten. That’s why the CCP’s strategy is not to simply erase people. CCP wants to rewrite history. And to rewrite history, you must first change the people within it. That means forcing them to publicly confess, discrediting them, and obliterating their dignity and reputation. Once that’s achieved, these people lose all symbolic value. By then, whether or not they remain alive becomes irrelevant. That’s why, in the Apple Daily case, the authorities pressured other employees to become witnesses against Jimmy Lai. The goal was to make it appear as though even his own people had betrayed him. The CCP's ultimate goal is for Jimmy Lai to surrender and confess. But they have gravely underestimated him. Frankly, I understand why our former colleagues might seek leniency through compromise. But they’re being naive. After they testify, they will have exhausted their usefulness to the CCP. They will have no bargaining power left. I even suspect that because Jimmy Lai remains resilient, he is inadvertently protecting his former colleagues. The CCP might still see value in using them to push the narrative further — telling even more outlandish lies — just to reinforce the image of Jimmy Lai as a villain. In doing so, these witnesses maintain some utility to the regime. From a game theory perspective, Jimmy’s best option is to stand firm. It’s not just a moral decision or an act of self-loyalty — it’s also the optimal choice for everyone involved. Meanwhile, the CCP will continue to use every tactic they can think of to crush Jimmy Lai as a person and reshape the world's perception of him. In chess, this scenario is known as a stalemate. When your opponent assumes you’ve already lost, but you deny them the ability to win, you create a stalemate. I’m sharing this idea because I believe CCP needs to recognize this for what it is: a stalemate. Only then will there be a chance for it to end. At Mark Clifford’s book launch, he made a remark that resonated deeply with me. He said he hadn’t had the chance to see Jimmy Lai in the past four years. Yet, from his court appearances, it’s clear that his years of ascetic living had only made him stronger and more faithful to himself. Jimmy’s religious faith has given him wisdom. He was baptized after the 1997 handover, as he felt that one day he would need the support of faith to endure what was to come. For the record, I am not a Christian. Nor am I an atheist. I identify as an agnostic. I believe that humanity will never be able to definitively prove or disprove the existence of God. From a philosophical and logical standpoint, such questions are inherently unanswerable. But I do understand the power of beliefs — whether it’s religious faith or secular belief. Faith has meaning for individuals and society alike. Our personal sense of morality is often rooted in these beliefs. Some people claim to believe in "nothing," but in truth, they simply aren’t aware of what they believe in. There are several verses from the Bible that, despite my secular disposition, I find profoundly powerful: "Father, forgive them, for they do not know what they are doing." (Luke 23:34) "Do not judge, and you will not be judged. Do not condemn, and you will not be condemned. Forgive, and you will be forgiven." (Luke 6:37) These words probably come to Jimmy’s mind when he thinks of our former colleagues who testified against him. Of course, he must challenge their lies directly, but he can still focus his response on the claims rather than the people. The judges and prosecutors are both attempting to prove that Jimmy "incited hatred." Jimmy’s response, however, is to speak about his belief in freedom and his love for Hong Kong. Everything he does is born from faith and gratitude. There is no hatred in him — not for the regime, not for the judges, and not for his former colleagues who testified falsely against him. I also want to clarify something: Jimmy Lai never once asked that anyone "resist to the end." I, for one, am an example of someone who walked away, and he never blamed me for it. I remember the first time I resigned in 2010 to move back to the U.S. Back then, Hong Kong was still relatively safe. He told me, "Simon, your future is in Hong Kong. It would be a wrong move for you to leave." But when I left for good in 2020, he fully supported my decision. He didn’t tell me what to do or how to live my life. "I tell you, my friends, do not be afraid of those who kill the body and after that can do no more. But I will show you whom you should fear: Fear Him who, after your body has been killed, has authority to throw you into hell. Yes, I tell you, fear Him." (Luke 12:4-5) For those with religious faith, especially Christians, this passage has deeper meaning — such as who truly holds "authority" and what "hell" represents. But as an ordinary layperson, I don’t know what happens after we die. I don’t know if there’s a soul or what form it might take. I can only interpret the passage at face value. To me, the message is this: Ideas are bulletproof. Beliefs cannot be destroyed by bullets. If you betray your beliefs, you surrender even the few inches of freedom that exist between your two ears. Allow me to conclude with the words of another "worldly" philosopher, Marcus Aurelius: "The best revenge is to be unlike him who performed the injury." Today is Jimmy’s birthday, and here’s my message for him: Dear Jimmy, I wish you peace. We will meet again — not in heaven, but in the U.K. or the U.S. When that day comes, we’ll go out for a good meal together. The Troublemaker: How Jimmy Lai Became a Billionaire, Hong Kong's Greatest Dissident, and China's Most Feared Critic Alternatively, here’s the link to kindle version of the book and the audio book. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

For those familiar with the 2019 resistance movement in Hong Kong, images of mass protest and calls for freedom remain vivid. What is less known is the aftermath, the events that unfolded once the global spotlight faded. Among these developments, the trial of Apple Daily and its founder, Jimmy Lai, stands as a stark example of the changing political and legal landscape in Hong Kong. Since its founding in 1995, Apple Daily was celebrated for its fearless journalism and outspoken pro-freedom stance. The newspaper played a pivotal role during the 2019 protests, becoming a symbol of free speech. However, in 2021, the paper ceased operations after its assets were frozen under the National Security Law. Jimmy Lai, a prominent businessman-turned-activist, is now on trial, accused of using Apple Daily as a platform to undermine national security. The trial, which has been ongoing for nearly a year, has reached its 96th day. Overview of the Case The prosecution's case hinges on five key allegations, each focusing on Lai's role as the founder of Apple Daily and his political activities. One. Lai’s Role in Apple Daily The prosecution argues that Lai held ultimate control over the newspaper’s editorial direction, using it to further his pro-democracy agenda. Witnesses described the so-called "lunchbox meetings," where Lai allegedly provided direct instructions to senior editors. A former executive characterized these meetings: "Lai would set the tone for the week’s reporting, often focusing on maximizing coverage of key protests or international events. He was strong-willed, and his instructions were seen as final." While some senior editorial staff testified that they had some autonomy, they also noted this autonomy was constrained within what they described as a "caged autonomy," with Lai as the ultimate decision-maker. Two. Content of Apple Daily The prosecution scrutinized Apple Daily’s editorial policies, particularly its English-language edition launched in 2020, alleging it was crafted to influence U.S. policymakers and stoke anti-China sentiment. Former editor-in-chief of Apple Daily English News, Lo Fung, testified that Lai instructed the editorial team: "Focus only on China’s negative stories. We’re not here to balance the narrative—we’re here to tell the world what they don’t want you to know." Prosecutors presented this as evidence that Apple Daily functioned as a propaganda tool rather than a journalistic outlet. Three. "One Person, One Letter, Save Hong Kong" Campaign The "One Person, One Letter, Save Hong Kong" campaign, initiated by Apple Daily, was presented as evidence of collusion with foreign forces. The campaign encouraged readers to write to then-U.S. President Donald Trump, urging intervention against the National Security Law's implementation. Four. Connections with International Figures Lai’s online interview program featuring foreign commentators was another focal point. The prosecution argued that Lai used this platform to discuss sensitive political topics and potentially solicit foreign intervention. The prosecution also highlighted Lai's meetings with U.S. officials, including former Vice President Mike Pence and former Secretary of State Mike Pompeo, as part of his alleged efforts to seek international support for sanctions against China. Five. Financial Support for Activism Lai’s alleged financial backing of pro-democracy groups like Stand with Hong Kong (SWHK) was scrutinized. SWHK played a key role in global advocacy for the movement, including lobbying for sanctions against Chinese officials. A former activist testified: "Lai’s companies provided crucial support for our ad campaigns. Without that funding, we couldn’t have achieved the global impact we did." The prosecution contends this financial support constitutes collusion with foreign forces, a core charge under the National Security Law. Jimmy Lai’s Testimony Day 93 Day 93 marked the beginning of Lai's testimony in his own defense. The session focused heavily on Lai's background, the core values and editorial processes of Apple Daily, and his relationships with various individuals, including foreign politicians and dignitaries. Lai explained his decision to transition from a successful career in fashion with Giordano to the media industry stemmed from the Tiananmen Square protests in 1989. He stated that, as a businessman who had achieved some financial success, he saw starting a newspaper as a way to promote freedom. He believed access to information was key to achieving greater freedom, stating: "The more information you have, the more you are in the know, the freer you are." Lai described the core values of Apple Daily as reflecting those of the Hong Kong people, particularly those who valued democracy and freedom. He stated that these values included the rule of law, democracy, freedom of speech, freedom of assembly, and opposition to violence and opposition to Hong Kong independence. Lai stated he believed these values stemmed from Hong Kong's history under British governance. Lai emphasized his opposition to Hong Kong independence, calling it a "conspiracy" designed to entrap people. He stated he considered the idea "too crazy" to even consider and forbade his staff from mentioning it in the newspaper. He said: "The advocacy of independence of Hong Kong is a conspiracy because people just want us to get us into the trap. That was never a reality. That was too crazy to think about this, that’s why I never allow any of our staff or the newspaper to mention about this." Responding to accusations of "poisoning" readers, Lai said, "I don’t think I have ability to pollute or corrupt the mind of the Hong Kong people just by my writing." Lai acknowledged donating to think tanks in the US but denied that these donations were intended to influence US policy towards China. He asserted that his donations were relatively small compared to others and made without any expectation of a return. He stated, "If I ask for something in return that will be too presumptuous... I think this is crazy." Day 94 Day 94 of the trial continued Lai's testimony under examination by his defense counsel. The focus of the day's proceedings shifted from Lai's personal background and political beliefs to his role in Apple Daily's editorial processes and his relationships with key staff members. In response to the defense's reference to his May 29, 2020, article published in New York Times, titled "Do My Tweets Really Threaten China’s National Security?" Lai elaborated on his grave concerns regarding the National Security Law. He explained that the provisions were sweeping and ambiguously worded, granting authorities significant leeway for arbitrary interpretation. This ambiguity, he noted, created a chilling effect, suppressing free speech and enabling the prosecution of individuals for dissenting views. he emphasized that the law’s vague language would severely restrict freedom of expression, leading to widespread self-censorship and eroding Hong Kong's tradition of robust civil liberties. As a leading pro-democracy publication, Apple Daily was particularly susceptible to the law's expansive reach. Lai expressed his fear that the NSL could be weaponized to silence the newspaper, either through direct legal action or by intimidating its staff and contributors. These concerns, he argued, underscored the existential threat the NSL posed to Apple Daily and Hong Kong's free press. The defense team highlighted testimony from former Apple Daily CEO Cheung Kim-Hung, who alleged that Lai had instructed him to continue operating the newspaper as usual while Lai was in custody. Lai vehemently denied this accusation, asserting that issuing such instructions under the constraints of the National Security Law would have been both irresponsible and reckless. To support his position, Lai pointed to a letter he had written to the newspaper's staff, emphasizing caution and prioritizing their safety. He argued that this letter was consistent with his stance and demonstrated that he would not have encouraged actions that could endanger his colleagues. The defense then referenced communications between Lai and Apple Daily’s former Deputy Publisher Chan Pui-man, highlighting Lai’s practice of forwarding articles and suggestions for editorial consideration. Lai testified that he forwarded an article written by Benedict Rogers, the head of Hong Kong Watch, to Chan, leaving it to her discretion to determine its relevance. Lai stated that he often shared articles from others if he believed they might be useful but stressed that the ultimate decision always rested with the editorial staff. The defense also cited messages exchanged between Lai and Chan regarding the July 1 Legislative Council incident. Lai expressed his concern over the impact of the storming of the Legislative Council Complex by young protesters, stating, "The young people storming Legislative Council weighed heavily on my heart. What do you think the pro-democracy camp can do afterward to ensure the movement continues? Fortunately, the public seems to have some sympathy for the young people breaking into Legislative Council Complex, so the damage might not be too severe. What do you think?" In court, Lai clarified that his comments were not editorial directives but suggestions. He explained that he was worried the incident might harm the broader movement and wanted to highlight the perspectives of young protesters to garner public understanding and sympathy. Lai reiterated that his intention was to focus on reporting the thoughts and motivations of the youth, rather than issuing any orders about how the story should be covered. "Some people may subjectively interpret this as an instruction, but I emphasize that it was merely a suggestion," said Lai. He also emphasized that, while he did not consider the Legislative Council Complex storming an act of severe violence, citing the absence of injuries, the incident still involved vandalism and illegal actions, which he did not condone. Lai also addressed a message he sent to Chan after the implementation of the National Security Law, which included a link to Trump's executive order on Hong Kong and the suggestion to "work up a s**t list on those involved in censorship." Lai explained in court that he receives numerous messages daily, many of which he does not have the time to thoroughly read. He stated that he only fully read the message for the first time during the trial. He noted that the message in question, containing a reference to a "s**t list," and emphasized that the language used in the message was not his own, saying, “it’s not the kind of language that I would use.” He added that the message was forwarded to Chan without any follow-up or acknowledgment from her, and it was possible she had not even read it. Lai further testified that he also forwarded the same message to other pro-democracy figures, including former Democratic Party chairman Yeung Sum and former Labour Party chairman Lee Cheuk-yan. When the defense asked if Lai had instructed these individuals to create a "s**t list," Lai dismissed the notion as "ridiculous." The court also reviewed evidence showing Lai had sent the same message to multiple contacts, reinforcing his claim that he merely passed on the information without specific instructions or intentions tied to the message. The prosecution questioned Lai about his use of the encrypted messaging app Signal and his decision to forward messages he had described as "confidential." Lai clarified that his use of the term "confidential" referred to the app's encrypted nature, acknowledging that this might not have been the most precise choice of words. He emphasized that he only shared information through Signal with close friends and trusted individuals, underscoring that these communications were not meant for broader dissemination. In response to questions about his April 28, 2019, article, "Stand Up for Our Last Line of Defense" Jimmy Lai denied intending to incite hatred, contempt, or dissatisfaction toward the Hong Kong government. He explained that the article merely projected potential consequences of implementing the extradition law and argued that many of his predictions had come true. Lai described the law as creating an environment of fear and compliance among Hong Kong citizens, undermining the city’s rule of law and replacing it with authoritarian rule. Lai also addressed his May 5, 2019, article, "Think About Emigrating or Protesting," in which he called for mass protests against the extradition bill. He argued that peaceful demonstrations could pressure officials to reconsider the law. Lai maintained that he did not seek to incite hatred but used examples to encourage lawful protest, emphasizing his opposition to violence. Day 95 Day 95 of the trial saw Lai continue his testimony, with the defense focusing on articles Lai wrote for his Apple Daily column and the newspaper's English edition. Regarding the "One Person, One Letter, Save Hong Kong" campaign and his use of the term "lobbying" in his newspaper column, Lai asserted that it referred to advocating for peaceful, non-violent, and patient protests against the extradition bill. He denied that "lobbying" included any requests for sanctions. The defense addressed a column dated October 27, 2019, titled "What Americans Tell Us", written by Apple Daily editorial staff in a Q&A style. In the article, Lai discussed the importance of “constant lobbying” to garner international support for Hong Kong. Here's a quote from the column, highlighting the use of the word "lobbying": "To get the support of foreigners, we need to keep lobbying. Plus media reports, let them understand our morality, courage, conscience, let them speak out in their lives, support will only grow, not decrease, as long as we do our part, to touch their conscience with moral force." Lai also added that: "If anyone construes as otherwise, they have right to be wrong, and I’m not to gainsay it. For truth prevails in God’s kingdom, and that’s good enough for me. So do we have to review and question each and every article if my position is like this?" The defense then highlighted an article published on December 22, 2019, in which Lai discussed the importance of the district council election victory, describing it as a source of hope to reduce violence among young protesters. He wrote: "The best landslide which we totally had in the district council that gave the young people hope. You know, if we unite together, we can be together, become a great political resistance force. And this will give them hope to reduce violence in the street." The defense questioned Lai on a comment he made in a January 5, 2020, article where he expressed admiration for a young girl who shouted obscenities at the police, stating, "With youngsters like this, we cannot lose." Lai acknowledged that the comment, made in the heat of the moment, was in "bad taste" and offensive, expressed regret and apologized for it. In another article, Our Finest Hour, Lai quoted Winston Churchill: "We shall go on to the end. We shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our island, whatever the cost may be. We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender." The prosecution argued that invoking the wartime context of Churchill's speech implied an encouragement of violence in Hong Kong. Lai, however, firmly disagreed. He explained that, in the Hong Kong context, the "enemy" referred to China's encroachment on Hong Kong's freedoms rather than a military foe, and the resistance he advocated was entirely peaceful. Lai stated: "Hong Kong is not at war. My use of Churchill’s words was meant to inspire courage and resilience in the face of oppression, not violence." On the topic of Apple Daily’s English News, Lai explained that the initial suggestion came from Christian Whiton, a former U.S. State Department advisor. Whiton proposed publishing an English-language newspaper and distributing it globally, but Lai initially dismissed the idea as impractical and prohibitively costly. However, Lai later reconsidered and opted for an online edition of Apple Daily English News. He envisioned the platform as a way to fill critical gaps left by other outlets, such as the South China Morning Post, particularly in covering human rights and governance issues with greater transparency and focus. Lai emphasized the English News’ dedication to truthful reporting, denying accusations that it deliberately suppressed balanced perspectives, or provoke hostility toward the Chinese or Hong Kong governments. Lai acknowledged that he suggested focusing on the perspectives of Hong Kong people, particularly those critical of the government and China. He explained that the English edition had to prioritize certain news items. He stated: "We have like maybe 20 items of news… so, you know, we have to choose what is to the point or what we want." Day 96 On Day 96 of the trial of Jimmy Lai, the defense focused on refuting testimony from prosecution witnesses, clarifying Lai's role in editorial decisions, and addressing his use of communication platforms such as Slack and Twitter. Lai acknowledged the need for a distinctive voice in English news to break the monopoly of outlets like the South China Morning Post. Lai admitted that Apple Daily prioritized content aligned with the pro-democracy movement and critical of Beijing but denied that this constituted propaganda. He explained: "Reporting the truth is not the same as balanced reporting. Our responsibility was to reflect the reality of Hong Kong’s struggle for freedom." In a WhatsApp message presented as evidence, Lai wrote: "We’re not trying to balance perspectives but to amplify the voice of those protecting Hong Kong. This is the voice the world wants to know." Lai also suggested using big data to fact-check exaggerated claims about China, whether positive or negative. However, he admitted these plans were not fully realized due to technical challenges. "The aim was to use data to reveal the truth about China, not to distort or manipulate reporting." Former Apple Daily CEO Cheung Kim-Hung had testified that Lai directed the English edition to focus on topics like "resistance, protests, and sanctions." Lai firmly denied the claim, and stated: "I never discussed sanctions with Cheung. His testimony is fabricated." The defense introduced Slack records to counter allegations that Lai gave specific editorial directives during “lunchbox meetings.” These records show Lai frequently solicited suggestions from attendees rather than issuing instructions. The Slack messages demonstrated a collaborative process where participants exchanged ideas, and meeting summaries were prepared afterward. Lai reiterated: "In all lunchbox meetings, I never discussed specific editorial instructions. The meeting records already summarize all feasible suggestions." Lai explained that the Slack platform, used by Apple Daily for internal communications, was managed by his secretary, Julie, who set up groups and facilitated discussions. The defense team also noted discrepancies in the prosecution’s timeline regarding lunchbox meetings and Slack communications, arguing that the prosecution’s evidence lacked contextual accuracy. Regarding Lai’s twitter activities, his account was managed by Simon Lee, an assistant CEO at Apple Daily and Lai's mentee. Lai described Lee's role as primarily logistical, such as editing tweets, adding hashtags, and managing follower lists. Lai acknowledged discussions about hashtags like #HongKongNeedsHelp but emphasized that these were coordinated by Lee and not directly crafted by him. In case you are wondering who is the "Simon Lee" managing Jimmy Lai's twitter account. That's me. Thank you for joining me today to follow the ongoing trial of Jimmy Lai. I’ll be back with more updates. Until next time, take care and stay informed. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

Yes, you heard me. There are people in the United States and Canada who support Trump’s plan to impose tariffs on Canadian exports to the U.S. I’m not surprised, though I can hardly see how imposing tariffs on all imports could magically make Fentanyl disappear from our streets. As a father of a high school teenager, I often receive emails from the principal about student tragedies, including overdoses. These stories hit close to home and serve as grim reminders of the Fentanyl crisis affecting so many communities. So, when Trump links tariffs to the Fentanyl crisis, I understand why some people see his proposal as a solution. Some argue that Canada’s leniency on crime justifies the U.S. using tariffs as leverage to force Canada to act. But let’s pause for a moment. Canada is grappling with its own Fentanyl crisis. In fact, recent reports reveal that Canadian-made Fentanyl is being exported. If the Canadian government had the ability to fully address the issue, wouldn’t they have acted by now? The frustration among conservative voters in both the U.S. and Canada is understandable. Issues like inner-city crime, substance abuse, and the troubling state of mental health are very real concerns. But when it comes to drug use, the solution isn’t as simple as targeting supply. Substance abuse also has a demand side. Why are so many people—especially young people—turning to drugs in the first place? Why is despair so pervasive in societies like ours, where opportunities and resources should abound? Sociological research identifies family dysfunction, peer pressure, and academic stress as primary drivers of drug use. Psychological studies show that a belief in a positive future can deter substance abuse, while hopelessness often pushes people toward drugs as a coping mechanism. Stress and despair are potent triggers, and they’re far more widespread than we might want to admit. Tariffs on Canadian exports won’t fix the Fentanyl crisis any more than waving a wand will solve all our social ills. Instead of looking for shortcuts, we need to ask deeper questions: What kind of society are we building? How can we offer young people a sense of purpose and hope? Governments cannot solve the root causes of drug use—despair, stress, and alienation—by focusing solely on supply-side measures. I empathize with those who feel strongly about combating drug use—it’s a destructive force. But who’s to blame for the underlying problems? Progressives blame conservatives, conservatives blame progressives, and the cycle continues. Ultimately, individuals make their own choices, and those choices have consequences. While I support harm reduction and legalization as pragmatic approaches, I recognize that no government policy can stop someone determined to engage in self-destructive behavior. In fact, enforcement policies that focus exclusively on supply often backfire. By ignoring demand, they inadvertently hand criminal cartels a lucrative monopoly. The demand side of the problem is harder to address, and that’s precisely why many politicians avoid it. Voters often prefer quick fixes, and tariffs might seem like one. But simple answers rarely solve complex problems. There is no magic wand for societal issues—not for substance abuse, not for despair, and certainly not for the broader challenges we face. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

"What exactly is populism?” A listener asked me this after my recent Cantonese podcast. It's such a simple question, but it really made me think. We throw this word around all the time, don't we? Populism this, populism that. But what does it actually mean? I started looking into it, and here's what struck me: almost everyone uses 'populism' as a label to attack their opponents. If you're on the left, you call the right populist. If you're on the right, you point to left-wing populism. It's become just another political weapon. But here's the thing - populism isn't limited to any one side. It's everywhere in politics today. So what is it really? Here's what I've come to understand: populism is when we focus on leaders instead of the quality of the solutions. It's when we believe that if we just find the right hero, all our problems will magically disappear. Think about it - we love hero stories, don't we? Hollywood makes billions selling us tales of heroes saving the day. And every four years, our political system tries to sell us the same story - just elect this hero, and everything will be fine. But here's the catch - every hero needs a villain. As writer Eric Hoffer once said, you don't need people to believe in a god to start a movement, but you absolutely need them to believe in a devil. Without someone to blame, who needs a hero? And this is where things get really interesting. These political 'heroes' love to talk about 'power to the people.' But what are they actually doing? They're taking advantage of people who feel powerless and scared about all the changes happening in our world. Let me give you an example: immigration. It's an easy target, right? Got problems with crime? Blame immigrants. Economy not doing well? Must be the immigrants. It's a simple story that makes people feel better. But let me share something I've seen firsthand. After the Communist Party took over China, millions of people fled to Hong Kong. Now, what did Hong Kong do? The British colonial government let them stay. Not because they were being nice - they did it because Hong Kong's factories needed workers. And you know what happened? When everyone could find work, nobody complained about refugees stealing jobs or causing crime. Actually, these immigrants helped make Hong Kong's economy boom. Here's the really fascinating part: when did people stop coming illegally to Hong Kong? After China started its economic reforms in the 1980s. When people could make a decent living at home, they stayed home. Simple as that. Now, I know what you're thinking - the U.S. and Europe can't control what other governments do. True. But this tells us something important about how to actually solve problems. Instead of just building walls and making threats, maybe we should be thinking about why people leave their homes in the first place. My friends working in different free market think tanks are trying to propose solutions. We need more people like them working on the solutions, not looking for people to blame. We hear a lot of talk about an 'invasion' of immigrants these days. But let's think about this: when people can't feed their families, they'll do whatever it takes to find opportunities. The next administration says they'll kick out all illegal immigrants. Sounds tough, right? But here's the reality - it'll cost a fortune, and it won't work. Worse, it'll just push people into the shadows where criminals can exploit them. We see the same pattern with the economy. Things getting expensive? Must be those greedy businesses or foreign countries! Just let the government control everything and prices will magically go down. Except that's not how the real world works, is it? Here's what bothers me most about populism. While these leaders claim they've the solutions, they're actually doing the opposite. Real solutions don't come from some hero on a white horse. They come from millions of people making their own choices, working together, trading freely, solving problems in ways no central planner could ever imagine. I know this isn't a popular message right now. Everyone wants simple answers. Everyone wants someone to blame. But sometimes speaking freely means saying things people don't want to hear. Yes, we have real problems. But we won't solve them by giving up our power to think for ourselves. So next time someone offers you a simple solution or tells you exactly who to blame for all your problems, remember this: true power doesn't come from leaders who claim to speak for 'the people.' It comes from people like you and me, making our own choices, working together freely, finding real solutions to real problems. That's not just democracy - that's freedom. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

This year, 64 countries, representing 2 billion voters, held national elections—a density of political activity unparalleled in history. As we reflect on these global political shifts, one trend is particularly striking: the widespread struggles of incumbent governments. Across various regions, ruling parties faced significant setbacks. In the United States, the Democratic Party not only lost the presidency but also ceded control of both the Senate and the House of Representatives to the Republican Party. Similarly, the United Kingdom saw the Conservative Party ousted by Labour, which returned to power after a 15-year hiatus. France’s Renaissance Party, led by President Emmanuel Macron, suffered a major blow, losing dozens of parliamentary seats. Though Macron’s presidency continues, his weakened position requires him to form coalitions to govern effectively, illustrating the vulnerability of even strong leaders in fragmented political landscapes. Elsewhere in Europe—Portugal, Lithuania, Austria—the trend persisted, with incumbent parties losing their dominance or being forced into coalition governments. In Asia, Japan’s ruling Liberal Democratic Party (LDP) lost its parliamentary majority, while its traditional ally, Komeito, also faced electoral losses. South Korea experienced similar instability. Even in India, a country where Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) have maintained strong influence for years, the BJP managed only 240 out of 543 parliamentary seats in this year’s elections, falling short of a majority. Africa was not immune to this wave. South Africa’s African National Congress (ANC), long the dominant force, was compelled to form its first-ever coalition government. To understand why so many incumbents are losing ground, we must consider two key questions: 1. What factors are contributing to this global trend? 2. Is this a temporary cycle or a structural shift? The economy is a significant common denominator. Since 2022, high inflation has plagued countries worldwide, eroding public trust in governments. While inflation is difficult for any administration to control, the perception of economic mismanagement often leads to electoral backlash. Looking back at the pandemic, governments across the globe significantly increased public spending to mitigate its impact. While GDP figures may not have reflected drastic declines during the pandemic, much of this "growth" was driven by government expenditure rather than private-sector productivity. This overreliance on public spending has created long-term inflationary pressures. In addition, the war in Ukraine disrupted global economies, hitting Europe particularly hard. Energy crises, rising costs, and economic stagnation have intensified dissatisfaction with incumbent parties. Beyond economic cycles, we may be witnessing a deeper structural shift. Modern societies are increasingly shaped by information technology, social media, and the decentralization of traditional media. Platforms like Twitter and YouTube have amplified the voices of influencers and KOLs (key opinion leaders), reshaping public opinion and political engagement. Interestingly, even the ultra-wealthy, such as Elon Musk and Ray Dalio, are heavily investing in building their social media presence. The convergence of wealth, influence, and power is becoming more apparent, as these individuals leverage their platforms to shape political narratives. Musk’s public support for Donald Trump, including reported donations exceeding $100 million, illustrates the growing connection between digital influence and political power. This trend underscores a shift in the balance of power: from traditional media to decentralized, individual-driven networks. As populist sentiments rise in democratic societies, authoritarian regimes face their own challenges. Leaders in countries like China, Russia, and Iran are increasingly paranoid about losing control. They tighten their grip on power, fearing the ripple effects of global instability and dissent. However, the rise of populism also raises concerns about the long-term viability of democratic systems. In politically polarized societies, many citizens tie their identities to their political affiliations, which fuels divisiveness and undermines objective discourse. We cannot overlook the profound impact of technology on how societies function. Historian Yuval Noah Harari has extensively discussed the role of imagination in human evolution—the ability to construct shared beliefs and societal structures. In today’s world, technology is reshaping these shared constructs, influencing how people perceive their roles within society. Social media, in particular, has heightened the importance of visibility and influence. Unlike traditional media, where a few controlled narratives, today’s decentralized platforms allow anyone to command an audience. This democratization of influence creates new opportunities but also amplifies division and misinformation. As a firm believer in open and constructive dialogue, I welcome high-quality criticism and diverse perspectives. I also reflect on my own belief and mindful of my actions on social media. In this complex environment, it is vital to resist simplistic binaries of left versus right, or red versus blue. Instead, we should strive for nuanced understanding and thoughtful engagement with the issues at hand. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

"Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority; still more when you superadd the tendency of the certainty of corruption by authority." Lord Acton As election day approaches, friends and readers ask how I am going to vote. Rather than endorsing any particular candidate or political party, I want to propose a more systematic strategy for preserving our democracy: Vote against incumbents, regardless of party or performance. Let's reflect on the real meaning of a free, democratic society. Is an election primarily about putting someone in power, or is it a means to ensure that no one becomes too powerful for too long? Many people go to the ballot box wishing for a great leader to carry out policies that will benefit them. But I believe the essence of electoral democracy is to prevent the accumulation of unchecked power. When Xi Jinping removed term limits to extend his leadership in China indefinitely, even some CCP members condemned this blatant power grab. Yet, in democracies, we often overlook how repeatedly voting for the same party or politicians, election after election, can also lead to the accumulation of power. The key difference, of course, is that democracies have built-in mechanisms for peaceful power transitions. But what truly distinguishes a leader-for-life from a party that never relinquishes its grip on power? Consider the consequences of prolonged one-party rule. California, despite its progressive image, grapples with a severe housing and homelessness crisis, exacerbated by zoning laws and entrenched political interests after decades of Democratic control. Similarly, Chicago's long history of Democratic governance has struggled to address deep-rooted urban challenges like segregation, poverty, and gun violence. On the other end of the spectrum, Utah, a Republican stronghold, demonstrates how dominant parties can exert undue influence, as seen in the intertwining of religious and governmental affairs. If you agree that one-party rule is bad, then you should not vote for just one party. In addition, there are several practical benefits to making "Vote Against the Incumbent" a movement: First, regular rotations in office help prevent the entrenchment of corruption and the abuse of authority. Incumbent entrenchment often leads to regulatory capture, where government regulations become tools for established interests to suppress competition. Regular power transitions can help break up these cozy relationships, promoting more dynamic and competitive markets. Second, while elected officials come and go, career bureaucrats often wield significant influence within government. Introducing new political leadership forces bureaucracies to stay politically neutral. Whenever there is a new boss, bureaucrats need to defend their operations, budgets, and priorities, thus promoting efficiency and transparency. Regular changes in leadership ensure that no one becomes too comfortable or unaccountable. Third, when parties anticipate regular alternation between governing and opposition roles, they are incentivized to be more realistic, pragmatic, and less ideological. In his 1796 Farewell Address, George Washington warned: "The spirit of party serves always to distract the public councils and enfeeble the public administration. It agitates the community with ill-founded jealousies and false alarms, kindles the animosity of one part against another, foments occasionally riot and insurrection." Political parties create career politicians, and politicians role-play to appeal to voters. This is how politicians get elected and parties become entrenched. However, I see no reason why voters should think and behave in a partisan manner and even adopt partisanship as their identity. I understand some people may find the idea of voting against incumbents regardless of their partisanship or performance absurd. For instance, some may argue that if the incumbent is doing a good job, votes should positively reinforce good governance and policies. But bear in mind that the goal isn't to reward good performance but to safeguard against the insidious nature of power. Even the most well-intentioned leaders can be corrupted by extended authority. History is replete with examples of benevolent rulers who, over time, became tyrants or grew complacent. Another question people may have is, "Won't this create instability?" Paradoxically, regular and peaceful transitions of power foster greater resilience than prolonged one-party rule. A truly functional democracy doesn't need great leaders; it needs robust systems that prevent any leader from becoming indispensable. By consistently voting against incumbents, we can help maintain the democratic churn that keeps power in check and forces a regular renewal of the social contract. Lastly, some might ask, "Isn't this throwing away my vote?" No – it's a strategic use of your vote to safeguard the health of our democracy. Every vote against an incumbent sends a powerful message: power must be earned anew in each election, not taken for granted. Ironically, mass media often reinforces incumbent advantages through familiar narratives and established relationships. Established parties and incumbents enjoy built-in name recognition and easier access to coverage. A consistent anti-incumbent voting bloc would force media outlets to pay more attention to challengers and fresh perspectives, potentially breaking up the echo chambers that reinforce political polarization. I hope by now you are convinced that the goal of electoral politics isn't to elect someone specific; it's to preserve a system where anyone can be removed from power peacefully. That's the true genius of democracy that we must strive to protect. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

A mentor figure sent me an email about one of my latest blog posts. He said he stopped reading after the first line because I had used the left-right paradigm to frame my argument. My initial reaction was a mix of emotions – first, the pleasant surprise that people are actually reading my work, then a deeper reflection on how I express my ideas. This interaction challenged me to examine how I, too, sometimes fall into the trap of oversimplified thinking. I don't actually like the left-right paradigm, or even the four-quadrants political compass model. While these frameworks can be useful tools in academic research or media analysis, they often do more harm than good in our everyday discourse. Human beings are far more complex – our views shaped by countless experiences, relationships, and circumstances that can't be reduced to simple categories like "progressive" or "conservative," "collectivist" or "individualist." Consider how this oversimplification plays out in current debates. When we discuss immigration, or abortion, for instances, people are quickly labeled either "pro" or "anti," leaving no room for nuanced positions. These labels then become shields behind which we stop engaging with the actual complexity of the issue. This tendency to oversimplify extends beyond political labels. I've noticed how many people, myself included, sometimes fall into seeing the world as a story of heroes fighting villains. This isn't new – you can find this pattern in our oldest myths and stories. But when we apply this framework to modern politics, whether domestic or international, we lose something crucial: our ability to understand each other. Sure, there are people who do things most of us would condemn. But here's what's interesting: almost everyone believes they're on the right side of history. This creates a peculiar situation where large parts of society view the other half as either evil or foolish. Think about that for a moment – when you dismiss people who disagree with you as evil or stupid, they're likely thinking exactly the same about you. I've experienced this myself: times when I quickly judged someone's position, only to later understand the valid concerns underlying their perspective. This brings me to another thought-provoking conversation. While in India for the Mont Pelerin Society meeting, I met with my old friend Barun Mitra, who spent decades as an activist for freedom and classical liberalism. Over time, his thinking has evolved significantly, much like my own. Through our long discussions, we explored how our earlier certainties about political ideologies had given way to something more valuable: a recognition that what our world needs most is compassion and curiosity – the willingness to see through others' eyes and find ways to thrive together. This evolution in thinking suggests something fundamental about living in an open society: the strength of democracy lies not in everyone agreeing, but in our ability to disagree productively. When we encounter different viewpoints, perhaps we could approach them with curiosity rather than judgment. What experiences shaped this person's perspective? What valid concerns might they have that I haven't considered? Even as we value individual freedom and personal conviction, we must recognize that no one is truly an island. The idea of living in a completely isolated environment, like a hermit, isn't just unrealistic – it misses something fundamental about human nature. In our pursuit of individual freedom, we shouldn't forget that we naturally seek companions and community. Maybe this is the balance we need to find: celebrating our differences while acknowledging our deep need for connection, understanding, and acknowledgement. I invite you to reflect on your own experiences: When was the last time you changed your mind after truly listening to someone with a different perspective? How might our public discourse change if we approached disagreements with curiosity instead of judgment? Your comments and engagement with these ideas continue to challenge and refine my thinking. Together, perhaps we can work toward a more nuanced understanding of our complex world, one conversation at a time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

Last year, Argentina elected what many would consider unthinkable a few years ago: a self-proclaimed anarcho-capitalist president who campaigned while wielding a chainsaw. But here's the thing - Javier Milei's rise to power isn't just some political oddity. It's what happens when a country reaches its breaking point after decades of economic mismanagement. You know how they say no plan survives first contact with the enemy? Well, Milei's first months in office have been a crash course in that principle. He came in swinging with some pretty dramatic moves. According to the Central Bank of Argentina, he devalued the peso by 54% - basically ripping off the band-aid on Argentina's artificial exchange rate. He also scrapped the "Fair Prices" program, which was basically a fancy name for price controls that weren't fooling anyone. But here's where it gets real: these reforms hurt. Bad. Numbers from the Universidad Católica Argentina show that poverty rate has hit 53.3%. That's not just a statistic - we're talking about real people struggling to make ends meet. The big question is: will Argentinians have the patience to see this through? Here's what I find really interesting: watching Milei adapt to political reality. Think about it - this is a guy who literally campaigned with a chainsaw, promising to slash the state. Now he's having to play nice with the same political establishment he promised to demolish. It's not because he's "sold out" - it's because that's how politics works. The IMF situation perfectly illustrates this. Milei inherited a $44 billion arrangement from the previous government, and by January 2024, he was already in talks to modify it. The IMF, usually the stern parent of international finance, actually praised his "bold actions," which in IMF-speak is like getting a gold star. You know what's really fascinating? If Milei hadn't come along, someone else probably would have. Argentina was primed for this moment. It's like what happened in Brazil with their hyperinflation in the '90s - eventually, something had to give. Milei just happened to be the right person at the right time with the right message (and the right chainsaw). Unlike traditional politicians who relied on party machines, Milei went viral on Twitter and YouTube. He turned complex economic concepts into memorable soundbites. Love him or hate him, you can't deny he understood how to spread a message in the digital age. It's not just about having the right ideas anymore. It's about knowing how to package these messages for the TikTok generation. The Big Picture Here's what makes this whole situation so compelling: Milei's experiment isn't just about Argentina. Venezuela, Turkey, and other countries with similar economic problems might also be watching closely. Remember Carlos Menem in the '90s? Great start, messy finish. The real test for Milei isn't whether he can be popular or controversial enough to push through reforms - it's whether he can build institutions that outlast him. To fix Argentina's problems, Milei needs to focus on three big things: - Getting the central bank to stop printing Monopoly money - Fixing the mess that is provincial revenue sharing - Making it easier to hire and fire people Firstly, The Money Printing Machine. Argentina’s Central Bank isn't really independent. Every time the government needs money, it just fires up the printing press. It's like having a drunk friend with your credit card - you know it won't end well. Milei needs to not just stop the printing - he needs to make it institutionally impossible to start again. It is time to establish the currency board again. Secondly, The Provincial Problem. Argentina's provinces are like teenagers with their parents' credit cards. They spend freely because they know Buenos Aires will pick up the tab. This isn't just about cutting their allowance - it's about completely rewiring how fiscal federalism works. Brazil managed to do this with their Fiscal Responsibility Law in 2000. Argentina needs something similar, but with even stronger teeth. Thirdly, The Labor Market. Argentina needs to build institutions that can adapt to a modern economy. Think of how New Zealand revolutionized its labor markets in the '80s, but adapted for the era which nations are competing for talents and AI makes many jobs obsolete. Policies come and go with elections, but institutions shape countries for generations. That's the real revolution Argentina needs - not just a chainsaw, but a complete institutional rebuild. Argentina is running what might be the most ambitious experiment in market reform we've seen this century. If it works, it could change how we think about economic transformation in the digital age. If it fails, it might set back the cause of market reform for a generation. I'll leave you with this thought: while everyone's focused on Milei's chainsaw and his colorful statements, the real story is about whether Argentina can finally break free from its cycle of crisis. It's not about the man - it's about whether good institutions can finally take root in Argentina. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe

Boeing was once the gold standard in aviation, synonymous with safety, reliability, and engineering brilliance. For decades, its aircraft not only filled the skies but did so with unmatched precision and excellence. However, the Boeing of today is a far cry from the Boeing of yesterday. In the last few decades, the company has been embroiled in scandal, tragedy, and strategic miscalculations that seem almost unthinkable for an entity of its reputation. In many ways, Boeing is a case study of what happens when engineering processes gives way to bureaucratic performance metrics, and when close relationships with regulators result in oversight failures. It also shows the inevitable problems that arise when engineering culture—built on responding to feedback, improving incrementally, and adhering to evidence-based practices—is replaced by the desire to accommodate the wishes of higher authority. The 737 MAX: A Tragic Consequence of Shortsighted Decisions The most glaring example of Boeing’s downfall came with the 737 MAX. In 2018 and 2019, two of these jets crashed—Lion Air Flight 610 and Ethiopian Airlines Flight 302 —taking the lives of 346 people. The tragedy sent shockwaves through the aviation industry and left the world questioning how Boeing, once the industry leader in safety, could have allowed such catastrophic failures. The root cause of these crashes was the Maneuvering Characteristics Augmentation System, also known as MCAS. MCAS was supposed to help pilots handle the 737 MAX's altered flight dynamics due to the addition of larger, more fuel-efficient engines. Rather than redesign the entire airframe—a costly endeavor—Boeing opted for a software patch that effectively disguised the aerodynamic challenges presented by the new engines. It was an engineering shortcut made under immense pressure to bring the aircraft to market quickly and keep pace with Airbus’s A320 Neo. The introduction of MCAS without sufficient pilot training or transparency was a denial of the evidence-based, safety-first philosophy that Boeing was once known for. When you ignore critical feedback—in this case, concerns from engineers about the rushed pace of the project—and fail to adapt your designs accordingly, the outcome is rarely a positive one. Boeing’s reluctance to acknowledge MCAS as a significant system worthy of attention and training ran directly counter to the fundamentals of sound engineering. Beginning of the End - the 1997 Merger with McDonnell Douglas To understand Boeing's broader missteps, we must revisit the 1997 merger with McDonnell Douglas, a pivotal moment that shaped the company’s subsequent trajectory. This merger was heralded as a bold move to create a dominant force in the aerospace industry. However, instead of being a union of equals, it represented a cultural collision that transformed Boeing from an engineering powerhouse into a bureaucratic government contractor. Before the merger, Boeing’s culture was rooted in engineering excellence, where decisions were made methodically, and always with an eye on safety of its aircraft. McDonnell Douglas, however, came with a different ethos—one that emphasized on the matrics for winning government contracts. Post-merger, it was this latter culture that won out. "The bean counters are now in the cockpit," lamented one former Boeing engineer. This encapsulated the reality that the decisions steering the company were no longer driven by engineering but by key performance indices. As Boeing moved away from its engineering roots, it also moved away from its capacity to identify problems early and make the necessary improvements—a vital aspect of maintaining safety and quality. The problems Boeing faced were not limited to the 737 MAX. The KC 46 Pegasus tanker, developed for the U.S. Air Force, was plagued by delays, cost overruns, and quality control problems. Boeing underbid to secure the contract, hoping that subsequent defense spending would offset the initial losses. Instead, the program faced repeated setbacks, including issues with debris left in the aircraft and malfunctioning systems—issues that were emblematic of a company increasingly willing to cut corners. This wasn’t just about technical errors; it reflected a broader culture that no longer prized engineering discipline and rigor but prioritized speed and cost-saving measures instead. Without the iterative improvement and evidence-based engineering that had once defined Boeing, quality suffered. The CST 100 Starliner project, part of NASA’s Commercial Crew Program, was another high-profile misfire. The 2019 test flight failed due to a software error that caused the spacecraft to miss its intended orbit, ultimately uncovering more than 80 software issues. The failure was shocking given Boeing's storied aerospace expertise but not surprising considering the systemic issues that had come to plague the company. The Starliner underscored Boeing’s broader difficulty in transitioning from traditional aerospace engineering to the software-intensive demands of modern spaceflight. Where other companies like SpaceX have succeeded through deep integration between hardware and software development—leveraging iterative testing and rapid feedback—Boeing seemed ill-equipped to manage this new frontier. One of Boeing's major challenges was adapting to the increasingly software-driven nature of modern aerospace engineering. Boeing's engineering culture had been built on mechanical precision, aerodynamics, and structural design. But modern aircraft are no longer just flying machines—they are highly sophisticated networks of sensors, computers, and millions of lines of code. Boeing treated software development as an afterthought, something to be handled separately, rather than a core part of aircraft design. The essence of successful engineering is its reliance on iterative processes—constant testing, feedback, and adaptation. Software, even more so than mechanical systems, demands a fluid and responsive approach to development. The contrast with companies like Apple or Tesla, who pioneered concurrent hardware-software integration, is stark. In those companies, hardware and software teams work side-by-side from the very beginning of a project, ensuring seamless integration and continuous adaptation based on real-time feedback. Boeing, however, kept these teams siloed, treating software as an add-on rather than an integral component. This was a departure from the iterative, integrated approach that had previously defined Boeing’s success and contributed to the poor integration between MCAS and the aircraft’s other systems. Regulatory Capture and Too-Big-to-Fail Mentality The 737 MAX debacle was not just an internal Boeing failure. It was a failure of the regulatory system as well—a glaring example of regulatory capture, where the Federal Aviation Administration (FAA) became too closely aligned with the industry it was supposed to regulate. The FAA, due to both capacity issues and an overreliance on industry expertise, essentially delegated key parts of the certification process to Boeing itself. The idea of self-certification, which might sound reasonable when dealing with an experienced, trustworthy company, proved to be a fundamental misstep. Boeing was allowed to conduct its own safety checks, and unsurprisingly, it chose to minimize the MCAS system's significance to avoid delays and extra costs. This arrangement allowed Boeing’s flawed designs to go unchallenged, creating a systemic vulnerability that only became apparent after lives were lost. In an environment that no longer adhered to rigorous, evidence-based review and improvement, this was the tragic but inevitable outcome. It was not just a failure of engineering; it was a failure of oversight, and a striking reminder of what happens when the boundaries between regulator and industry become too blurred. Boeing's relationship with regulators also shielded it from facing the full consequences of its actions. The FAA’s cozy relationship with Boeing, born out of both necessity and complacency, allowed the company to operate with far too much freedom and far too little scrutiny. This wasn’t just a bureaucratic failure; it was a structural issue with deep implications for how aviation safety is ensured. The notion of being "too big to fail" wasn’t just implicit in Boeing’s relationship with the FAA; it was evident in how the company operated internally. Boeing’s sheer size and market dominance created an environment where executives seemed to believe they were insulated from real risks. They assumed that no matter what, Boeing would weather the storm—after all, it had the government as a client, a regulator in its corner, and a reputation that seemed unassailable. But as the events with the 737 MAX showed, complacency is dangerous, and unchecked power even more so. Boeing’s downfall is not just a lesson for aviation; it is a cautionary tale for any large entity that loses touch with its core values. When a company grows too big to listen, too bureaucratic to innovate, and too comfortable to adapt, it sets itself up for failure. Boeing’s history of excellence was built on engineering integrity, a commitment to quality, and a culture that empowered those who built its planes to speak up and lead. When that culture shifted—when cost-cutting, shareholder appeasement, and regulatory coziness took precedence—Boeing lost its way. The tragedy of the 737 MAX, the setbacks of the KC 46, and the failures of the Starliner were not isolated events. They were symptoms of a deeper rot within Boeing—a culture that placed financial engineering over aerospace engineering, and corporate metrics over safety. To rebuild itself, Boeing must fundamentally change its culture, its incentives, and its relationship with regulators. It needs to return to the basics of engineering excellence, to re-emphasize the importance of safety, and to learn from its own history before it's too late. Engineering development is about responding to feedback, continual improvement, and adhering to evidence-based practices. It requires a deep commitment to adaptability and an openness to challenge assumptions. Boeing’s journey back to greatness will require all of these traits. It requires a cultural reckoning—a return to a time when safety was the foundation of everything it did, and when engineers were empowered to challenge decisions that compromised quality. If Boeing cannot rediscover that ethos, it will become a relic of the past, a sobering example of what happens when an entity becomes too big and too out of touch with reality and the very values that once made it great. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit unsubject.substack.com/subscribe