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quoting**Going to try something new for this new article. I have a budget of 10,000 sats to allocate across anyone who reads and posts a comment / feedback, and just for anyone who reposts (not "likes"..) on Nostr! 100 sats minimum zap, and will also redistribute any zaps received in full also **
note193w…5ffz
This is an article reviewing Simon Sinek's book, The Infinite Game. You can also view it at https://bitcoincollective.co/bitcoin-and-the-infinite-game/
Simon Sinek asks in his book “The Infinite Game” why more companies don’t operate with an infinite rather than a finite mindset. One main reason he misses, of course, is the money. The good news is there’s a new infinite game in town.
In “The Infinite Game”, Simon Sinek argues that great leaders set up their organisations to succeed beyond their own lifetimes. By recognising and positioning their business with an infinite rather than a finite mindset, they can engender greater trust throughout their employees and also build more resilience into their business. Their companies can also remain true to themselves and their mission, whatever that may be.
Sinek outlines that unfortunately we have entered an age of general subservience from leaders to their shareholders, and a slavery to the balance sheet and short term, “finite”, accounting and strategy. This generally leads to a decline of loyalty and engagement amongst customers and an increase in insecurity and anxiety amongst employees.
There’s plenty to agree with here in general terms. With that said, Sinek fails to identify one of the largest causes of the issues he identifies, which is the money. The book lays the blame on a watershed article from 1970 in which Milton Friedman laid out that “there is one and only one social responsibility of business, to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” This is noted in the book as a turning point from the original ideas of Adam Smith, for whom the consumer was king, but I couldn’t help but wonder if anything else happened in the early 70s, such as Nixon cancelling the convertibility of dollars into gold in 1971. (see also – https://wtfhappenedin1971.com/).
Sinek bemoans the short term nature of companies since that point, but doesn’t consider how the nature of money has shaped this; surely a much more omnipresent and powerful factor than the writings of Milton Friedman. For the average bitcoiner this may be relatively self evident, but let’s consider the motives of the leadership under a system in which the underlying money cannot hold it’s value and in which credit is artificially priced. Incentives abound – one to laden the company with debt (which all else will likely diminish in real terms over time versus company assets and earnings), acquire other businesses and grow as big as possible in the process. Other options such as share buybacks also reflect short term incentives. Shareholders are going to place their own high short term demands on companies in a world where it is hard to outrun monetary debasement.
What of new businesses? When a new private entity is formed, the business plan is written, agreement on its viability is formed, strategy is set, tactics are agreed and then the first question posed by external stakeholders or posed to the majority shareholders is ‘what is your exit strategy’. Small successful businesses are expected to have a 3-5 year plan, private equity is usually a 3-5 year plan, and the successful larger companies with a longer trajectory also tend to swallow up the smaller successful companies (easier access to debt). With such incentives, it’s no wonder that we tend to see certain outcomes. There are obvious agency problems the larger a company gets, and they are more likely to fail to adhere to an infinite game principle. Smaller companies are forever at risk of getting swallowed up by larger ones.
So how does Bitcoin come into this? In my view, in two ways:
1. Bitcoin is an infinite game within itself
This is one of the subtle but crucial differences that splits Bitcoin sceptics and bitcoiners, and then dominates their onward arguments. If interpreted as a finite game, Bitcoin is for gambling, for speculation, it will have an end, and will be defined by winners and losers. Just the other day, this article framed it as such with the following line –
“Whether Bitcoin is rising or falling, or who is buying or not buying it, nothing alters a basic fact: that Bitcoin is a classic zero-sum game. Large numbers of people can make vast paper fortunes by bidding up the price, but they cannot all realise those fortunes, because if everyone sells out the price collapses to zero. In that situation, those who were quick to sell would become rich at the expense of those who were slow to sell.”
Herein lies the problem for this criticism. As far as I can possibly ascertain right now, Bitcoin doesn’t end. Plenty might treat it as a finite game (and dismiss it as a ponzi, or try and trade it), but that treatment is a one way journey, and once you see Bitcoin as an infinite game there is little going back.
Going back to the book, let’s consider the “just cause” that Sinek says all businesses should have. According to Sinek, a just cause defines “the world we hope to live in and will commit to help build. It is the just cause that we are working to advance that gives our work and lives meaning. We know a cause is just when we commit to it with the confidence that others will carry on our legacy.” There are criteria listed too – a just cause must be “inclusive, service orientated, resilient, and idealistic.” Bitcoin surely fulfils these. On the ideology point, Michael Saylor articulated this well when dismissing altcoins in comparison to Bitcoin on the What Is Money podcast –
“If you really want a crypto to be successful over 100 years, the technology is only a part of it, right? It’s the ideology paired with the technology. And you’re gonna have to have an ideology that is so pure and so straightforward that people will fight to the death to defend the ideology. And that’s why I’m probably not gonna sacrifice my life for the 13th iteration on smart contracts. It’s not that important. On the other hand, if you tell me that we’re about to suck all of the economic energy out of the civilization and plunge ourselves into the Dark Ages, then I think I’ll fight for it. That’s worth fighting for.”
Michael Saylor – What is Money Show Episode 8
2. Bitcoin on balance sheets
Any business embracing Bitcoin on its balance sheet will automatically be closer to playing an infinite game itself, and let’s consider why. For starters, any shareholders will likely be holding equity with one opportunity cost being a holding of an equivalent amount of Bitcoin instead. This in itself will give them a low time preference mindset, which should transfer onto the company. Secondly, the act of having Bitcoin on the balance sheet provides a very simple yet iron clad discipline upon the company. One goal in broad terms is to grow that Bitcoin balance sheet over time, and they can only achieve that by being profitable. If they are not, they will find that Bitcoin balance dwindling over time instead. Though conventional businesses do broadly have the same need to be profitable, the Bitcoin example is quite different from a business with requirements to service debt, which may carry much shorter term deadlines for payment. In conclusion, companies looking to grow their Bitcoin holdings on a balance sheet are far more likely to buy into an infinite game mindset.
There are examples of infinite minded leaders out there, of course. Elon Musk is perhaps the most relevant in the present day, given Tesla and SpaceX have lofty long term ideals far removed from satisfying shareholders. Steve Jobs is another obvious one, and Sinek quotes an anecdote about sharing a cab with a senior Apple executive and telling him that the latest Microsoft Zune product (mp3 player at the time) was so much better than the iPod touch. The executive smiled politely and was unfazed – tellingly, Apple weren’t worried about competitors in the short term due to their infinite mindset in making great & innovative products. Fast forward to today and there is evidence that Apple aren’t playing the infinite game that they used to. Take for example the recent news that Apple is plugging in Open AI into the iPhone. This doesn’t feel like the same ethos of a company who famously told us to “Think different” under Steve Jobs.
In conclusion, there’s plenty of decent ideas in the text and he articulates the issues well. However, due to failing to identify probably the main cause of the problem, Sinek doesn’t quite nail the call to arms for leaders to embrace an infinite game. Add in Bitcoin though, and the time preference of companies and their shareholders would vastly decrease and an infinite game mindset would come naturally.
One final thought – Sinek opens by looking back to the Vietnam war. Despite their vastly superior army and losing far fewer men, the US still lost the war. The reason being – it was an example of a finite mindset (thinking there would be a simple beginning and end) coming up against an infinite game and an enemy with an infinite mindset. The USA had comparatively infinite resources, infinite money, but a finite purpose & ideology when it came to the war. By contrast the Vietnamese, as one of their foreign ministry specialists was quoted as saying, were fighting for their independence and had already been doing so for thousands of years.
As far as Bitcoin is concerned, it might be said that companies who adopt a Bitcoin strategy are playing an infinite game with a non-debt based money of finite supply, and the competition are playing a finite game with an infinite supply of debt-based money.
This is a guest blog by Bitcoin Actuary / BitcoinActuary@BitcoinNostr.com. Thanks go to @btconlyscott for early comments/suggestions on this article.