Venture Communism

pirate wires #52 // the wealthy tech elite's improbable love affair with karl marx, is the future of web3 authoritarianism?, lol it's not, and a friendly welcome to the bitcoin dictator

A little late this week on account of it was Labor Day, and I didn’t feel like laboring, no offense. In any case, a request — nay, a demand: if you haven’t yet, please subscribe to Pirate Wires. No payment necessary, I just want to slide into your inbox every week and say hello. Many cool things coming that you don’t want to miss, and anyway you sort of owe me. To be honest, my haters sort of owe me too. In fact, my haters especially owe me. Haters, I would like you specifically to subscribe. Thank you, love you, bye.

Now onto the weekly ~ drama ~

Feeling inspired. The talk of the town last week was “It Girl” venture capitalist Li Jin’s new 13 million dollar fund for “influencer-related startups,” propelled into the Daily Narrative by wildly popular tech fan fiction writer Taylor Lorenz in an uncharacteristically-glowing profile for the New York Times. Li seems like a genuinely kind person, and I hope her fund succeeds. She clearly cares about creative platforms and the creative people who bring them to life. As a somewhat creative person who has found his voice greatly and gratefully amplified by several such platforms, I naturally find myself amenable to the cause. Li is also a champion of Web3, and correctly argues new technology in the space will afford greater economic opportunity to the average artist, or, her preferred terminology, “worker.” Love this for us. But in her profile, the phrase “inspired by the ideas of Friedrich Engels and Karl Marx” is employed, and this, from a jet setting venture capitalist, gives me pause.

Though explicitly not explicitly by name — “‘I’m very careful to not use that word, the S word,’ she said of socialism, ‘it’s unnecessarily polarizing in the U.S.’” — the profile focusses a great deal on Li’s affinity for socialism, an authoritarian ideology that has led to the greatest mass murders in human history, and that is entirely antithetical not only to the work of venture capitalists, but to the far more important work of technology companies funded by venture capital, to the concept of industry broadly, and to Web3, which generally refers to decentralized applications that run on a blockchain, technology itself designed overtly to protect people from authoritarianism. It’s all just kind of… awkward? But a little light venture socialism is also not entirely new to the industry.

Investors like Hunter Walk have shown public support for Alexandria Ocasio-Cortez (though most of his tweets have been deleted), as have Alexis Ohanian and Chris Sacca. Still, to the best of my knowledge, none of these investors have officially endorsed Twitter’s favorite Brooklyn socialist, nor have any of them flirted with any sort of explicit case for socialism. They just seem to think the young gun reds are cool, and what’s the big deal with normalizing the end of American industry? Ocasio’s on Twitch, for God’s sake. She can’t be all that bad!

A little adjacent to venture capital we get a better glimpse of the wasteland, where all manner of wealthy, Tesla-driving tech employees LARP the revolution. This is a trend I’m intimately acquainted with on account of I live in San Francisco, where political strawmen come to life like Dorothy’s Scarecrow in a four-hundred-dollar Che Guevara shirt and wield actual power.

Here’s one of my favorite local political influencers:

This is obviously insane. San Francisco venture capitalists aren’t dealing fentanyl or knifing old women in the Sunset, though… I will never get the image of Vinod Khosla in a Hamburglar outfit out of my head. But the insanity of the rhetoric is also self-evident. The more interesting question is why does the language need to be this extreme? Here, “venture capitalists” are demonized to deflect from the reality of Jason’s lived experience as an extremely class-privileged rich person. In tech. An alum not only of Stanford, but Facebook, Google, and Microsoft, Jason is also author of a blog called “venture commune,” where he waxes poetically about the plight of the working class, and is therefore beautifully, almost perfectly, the physical incarnation of a satirical Babylon Bee piece.

If there’s one thing I know about rich tech people, it’s they hate being associated with rich tech people. So, how to differentiate? Tech money has been flowing into DSA coffers for years, something David Sacks called out not too long ago:

But, important question, who cares? Don’t people have a right to whatever crazy political ideas spark joy in their lives? More importantly, can’t this just be funny? The actual richest people alive reading Das Kapital in a hot tub on their yacht, lamenting the plight of the men and women serving them their drinks — this is funny. I mean don’t get me wrong, it’s embarrassing as hell, but I’m laughing, and beyond the rare Jason exception none of these people are really serious about the socialism. Right?


Since the word is thrown around a lot, a quick side on what I mean when I say socialism: a theoretical system of power in which a society’s means of production, distribution, and exchange — so every business from Amazon and Exxon to the video game startup in your mom’s garage — is “owned” collectively, from the scope of a community to the scope of a state. In order to perpetuate such a system, the concept of individual consent can’t exist. Socialist states are slave states. But socialism in the world of content, where single creators are increasingly becoming enormous businesses themselves, raises an especially interesting question. What exactly is the group owning here… or who?

We’ll circle back to that one in a minute.

It’s unfortunate the New York Times profile turned out as clownish as it did, because if you set aside the Nicky Hilton beachfront dinner cringe and steelman her case for Web3, there’s an important conversation Li is trying to provoke, which comes across far more eloquently in her writing. The conversation is distorted and essentially undermined by a lot of clunky Marxist rhetoric, but the most basic reduction of what she’s arguing for is I think just better pay for content creators, which is a worthy thing to fight for, our first of many points of agreement, and btw:

Just a few weeks ago, Li provided some potential solutions to the “crisis” of creative platforms failing content creators. Among the potential solutions she explored were DAOs, or decentralized autonomous organizations, which are extremely exciting. Ground floor, blockchain enables the construction of decentralized companies, or really any sort of group committed to any sort of purpose, composed of any number of people who may or may not be working anonymously, all of whom own a share of the work. It’s your average startup, but scattered across the web, with a greater initial transparency into ownership stakes, and also screw it maybe it’s invisible. Then, of more interest to the content monetization conversation, if a user, or “creator” — or “worker” fml — needs to hold a token in order to use a Web3 platform, the user also owns a piece of the platform. The optimistic forward look at a Web3 ‘revolution’ is all of us owning a lot more of the world we inhabit. Still love this for us. But also still have no idea what it has to do with Marx.

In the context of creative content, influencers populating Web2 giants like Twitter, Instagram, and YouTube provide social media companies most of their value, and until very recently they haven’t been paid. The old spirit of the internet was sharing, and we shared. But as the success of platforms like OnlyFans, Patreon, and Substack clearly demonstrate, the content trend is decidedly toward greater creator control, monetization, and autonomy. This is the future. Could the Web2 giants reimagine their businesses, and build something more creator-friendly? Conceivably yes, which I wrote about last spring in the Sovereign Influencer. But to cancel-proof a wildly popular content creator, monetize them in a manner independent from the platform, and grant them total control of their fan base (lists of emails for example) would be to free them from the platform — something of a classic innovator’s dilemma. If the giants don’t build along new trendlines, they’re going to lose their most prolific content creators, and if they do build along new trendlines… they’re going to lose their most prolific content creators.

Now let’s talk about these golden geese.

A very small handful of people produce most of the value on creative platforms, and until very recently almost all of them were grossly underpaid. For example, with the rise of Substack, uniquely-popular writers like Bari Weiss, Matt Yglesias, and Glenn Greenwald were able to directly monetize their audience of loyal readers, and generate ten or more times what they were making at the New York Times, Vox, and the Intercept. But these writers are outliers. The vast majority of writers don’t make much money at all, on Substack or anywhere else, because the vast majority of writers don’t have many readers. Welcome to reality, all selfies are not created equal — sorry bout it.

The power law, in which the great majority of value is produced and captured by a small minority of people, is as true on Twitter or Spotify as it is on OnlyFans. The dynamic also exists beyond creative platforms. We see it almost everywhere — from business, where single operators dominate entire markets, to art, where single painters, actors, or musicians attract the overwhelming majority of fans, to coding, which no one has done a better job illustrating than Nadia Eghbal in her fantastic book Working in Public, an examination of the last twenty years of open source technology.

This brings us to the peculiarity of invoking Marx in a conversation about content, and especially in the context of blockchain. In her pitch for the Universal Creative Income, a salary for anyone on any platform who wants to TikTok for a living, Li introduces the problem as thus:

“Despite the democratization of creative tools and platforms and the lower barriers to becoming a creator on the internet, financial success is concentrated among just a small segment of top creators, and the middle class of the creator economy remains elusive.”

Let’s table for a moment the question of whether or not a middle class comprised of TikTok dancers is even desirable, let alone necessary, and think through the mechanics here. Li’s “creator middle class” would be funded by the UCI, itself funded by the sort of platform that, if trendlines continue, should no longer exist in five or ten years. So, long-term, what are we really talking about? What will the majority of lower value content creators be “owning” exactly? Here, we approach the inevitable conclusion of every socialist journey: our story is not of some noble-hearted army of “creators” opposed to the tyranny of a heartless platform, we’re talking about the success of an exceedingly productive few framed in opposition to a far less successful majority. Buckle up, Yglesias, we’re coming for your newsletter gold.  

The demonizing language applied to our most highly productive — human beings reduced to the word “capital,” for example, rather than “leader” or “founder” — is how we get ourselves comfortable with the forced seizure of property, which is the only way to subvert what appears to be a law of reality: some people produce more than others, and technology amplifies innate differences in productivity by orders of magnitude. Web3 apps are producing incredible value, and there are any number of ways small groups of people can organize and share a capture of value, but none of this is being distributed equally — at least not in anything close to a universal sense — nor will it ever. Nor should it. Massive resource redistribution programs require strong, centralized authority to exert coercive force (in the service of good, we promise!). Web3 apps naturally decentralize.  

Arguments for a “creator middle class,” to be funded by a guaranteed income for all “creators,” and any hinting at the eradication of business ownership in exchange for a system of collective user ownership, misunderstand not only the basic nature of social media, but of reality. The ease of information generation and distribution on the internet means we are somewhat living on a giant trash planet. Most of the content out there? Not pretty. No one is entitled to a “living wage” for their podcast no one listens to, and no one is going to give it to them — especially not a podcasting giant.

I’ve often wondered if meaningful authoritarianism is even possible in a world of mainstreamed crypto. The big news this week is we’re about to see.

El Salvador just became the world’s first country to adopt Bitcoin as legal tender. El Salvador is also run by a dictator, which makes the country’s decision to offer every one of its citizens a piece of Bitcoin one the strangest stories in the world. This is a currency that can’t be destroyed, inflated, or seized. At least, it can’t be seized at scale. Encouraging the mass circumvention of centralized banks, the government of El Salvador has therefore ceded considerable autonomy to its citizens, and with no real way to get it back. Holding Bitcoin could easily be made illegal by any government, and has been in countries around the world, but it can’t really be stopped. Short of nuking the internet, economic freedom’s here to stay.

Good luck with your revolution.