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Silicon Valley Investor Naval On Positive-Sum and Zero-Sum Games

Investor Naval Ravikant is considered a sage in Silicon Valley. Dilbert creator and tech investor Scott Adams calls him one of the smartest people he knows. Naval (he prefers the single name brand) recently did a Periscope where he took questions from viewers.

The whole discussion is interesting, but readers of the Spy’s Guide series will find his discussion of Positive-Sum and Zero-Sum Games fascinating. He takes those concepts beyond the thinking and strategic points in A Spy’s Guide To Thinking and A Spy’s Guide To Strategy. He takes those concepts to a political/philosophical level.

The discussion of those games begins at the 10:45 mark (a transcript is below the video):

Transcript via Ninth Path (highlights are mine):

"Everybody richer would not be a bad thing and wealth is a positive sum game. The reason business work, the reason Silicon Valley works is because we can get together to create a product or a service and create more value, more wealth than before we found it, so this positive-sum game of capitalism I think gets a bad rap. I don’t think there is anything wrong with being wealthy. The problem is that people, they signal against wealth, they talk about how “money is the root of all evil” or “I’m beyond wealth, I don’t want wealth” or they attack income inequality and so on and a lot of this is just people status signaling. They’re trying to get status in the eyes of the the tribe by saying “look, I’m looking out for the entire tribe not just a few of the people who are getting ahead,” and what I don’t like – status signalling is needed to some extent, you just can’t have the oligarchs run the world, you have to have other hierarchies other than a money based hierarchy, you want other ways to order people other than oligarchy. Obviously there are many more hierarchies that have merit, but I find that many of the others are zero-sum games, whereas with wealth we can all be wealthy, all of us.

Imagine if everybody in the world was a hardware or software engineer. Don’t ask me how, but we have a magic demon who can come in and retrain everybody, turns everybody into a master or Ph.D. level engineer. Software, hardware, whatever you want, a chemical engineer, pick some hard science, but you know, real engineer. I guarantee that within 5 years the robots would be doing all the work in the world and we will be living with massive wealth and abundance and we would all be better off so why not. Why shouldn’t we go for that so recently I’ve been thinking a lot about wealth or status because one of the things that annoys me about status is that status is the currency that politicians and academics and journalists move in. It’s a zero-sum game where for me to be higher status than you, you have to be lower status than me or vice versa. The thing I don’t like about this status game is that one of the ways they seek status is by attacking wealth and I think its’ great to basically create wealth for all of us.

One of the reasons I get on periscope is because honestly, I want to tell people whatever I know about how to make money in an ethical, honest, positive non-zero sum kind of way so that is the goal of mine and I’ve been working on a related tweetstorm.

Someone’s saying make sure only the people who own the robots see the wealth. At some point, something becomes so abundant that everybody has it by default. At some point, society became so advanced that we decided to have roads and sidewalks and now everybody benefits from roads and sidewalk whether or not they ‘re part of the system or not so I would say overall wealth creation is done right if done in a non-monopolistic way.

Jackie says “well the wealth is relative.” Well, that’s not true, you know, you’re trying to make it a zero-sum game. Yes, it’s relative in the sense that I can score it against each other but you know if I’m a millionaire and my neighbor is a billionaire we can both still drive nice cars, we can both still eat well. His or her being a billionaire doesn’t take anything away from me so you have to get out of that relative mindset because if you get into that relative mindset you’re always gonna hate people who do better than you. You’re always going to be jealous and envious of them, they’ll sense that when you do business with them. When you try to do business with somebody, if you have any bad thoughts about them or any judgments about them, they will feel it. You know that humans are wired to kind of feel what the other person deep down inside feels. Don’t think you’re so clever that you can hide it.

So to the extent that you have distaste or malice in your heart for someone you’re trying to do business with if you resent them they not going to want to do business with you. So literally you know being anti-wealth will prevent you from becoming wealthy because you will not have the right mindset for it. You won’t have the right spirit and you won’t be dealing with people at the right level. So being optimistic and being positive is important, optimists actually do better in the long run."


For more on how Positive-Sum Games and Zero-Sum Games fit together in strategies, see A Spy's Guide To Strategy.

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