The leverage arbitrage: Why everything feels broken
91 comments
·July 29, 2025halayli
pyrale
> The title could have been written as: "Why do I feel everything is broken, and what can I do about it".
Sometimes collective action is required to fix an issue. Restricting people to individual action is depriving them of their freedom of association, a core enabler of democracy.
kubb
It’s an old strategy that tries to take agency from people by splitting them up.
If you convince many powerless people to work alone, they aren’t gonna be a threat.
ffsm8
Both of your comments have a grain of truth, just doesn't apply to this scenario.
what halayli wrote is spot on in this context. If you're writing a blog post and call it a day, then you're not trying to change the status quo. If he's giving talks, seeking out interviews etc to address this issue, you'd have a basis to argue your points...
But like this? No, it doesn't hold up.
It's super normalized however, and not specific to this blog. Most blogs seem to call on the reader to do things. And even if every reader did, you still wouldn't have changed the status quo, because that needs a way bigger investment.
root_axis
Seems like you've fixated on a detail about the title and have ignored the substance of the post. Whether or not some everyone agrees that "everything feels broken" doesn't really matter.
randomcarbloke
But the substance of the post appears to be word-salad and I've already had my five-a-day.
zwnow
No OP is right. Everything is broken. Thinking your system isn't and its OPs issue is not sincere.
icehawk
Actually, when I read this, it was obvious that this issue was an us problem and not just a me problem.
endymion-light
No, I think the original post has the right idea. I think attempting to individualise this to your extent would dilute the original message and make the article slightly pointless
King-Aaron
Except the OP is kind of right I feel.
trod1234
The framework derived also is based in power dynamic comparisons which are circular, without an objective base.
Its an opinion piece that has no real merit unless you tie it to reality.
atoav
Well yes, but you then deny people a collective position. Please consider that we live in a world where strong corporate actors massively profit from us not having a collective position. Shifting responsibility to the individual is one of their strongest tools in the toolbox to ensure problems do not get solved.
I think it is important from time to time to exit the world of individual responsibility ("What can I do to reach the moon") and enter the world of collecrive organization ("What can we do ro reach the moon?"). You probably understand why.
nosefurhairdo
Lots of bold assertions without evidence. Author claims Google's high salaries killed entrepreneurship. Is there any data to back this claim?
Or the idea that democracy can't adapt to social media discourse; not everyone is chronically online. Politicians still respond to public sentiment to similar degree as they always have.
Then there's this:
> AI systems aren't just tools—they're deployed faster than we can develop frameworks for understanding their social implications.
If they aren't just tools, what are they? Why do we need a framework for understanding their social implications?
Post feels like a fever dream of someone who fell asleep to the Navalmanack audiobook.
sien
The number of unicorns was 39 when the term was coined in 2013. Then there was 119 by 2018 and then there were 1284 unicorns by May 2024.
From :
https://en.wikipedia.org/wiki/Unicorn_(finance)#History
So not only is there no data to back up the authors claim but it is wrong and could be checked by looking at wikipedia.
You don't have to be right, you can make claims, but when you make grand claims you should at least check wikipedia.
nothrabannosir
Your broader point may stand but that’s not a counter argument if you give the original claim the benefit of the doubt: it can reasonably be interpreted as referencing lifestyle oriented businesses, niche b2b companies, anything small growth with a low ceiling.
Counting unicorns only serves to bolster that point : those are large VC fueled ships which operate on a completely different level. Because it is clear at founding time which type of company they are , it’s reasonable to include that as a qualifier.
Now if the data showed more small-growth companies were started , that’d be a stronger counter argument.
vlovich123
What do businesses need? Startup capital. What’s a good way to obtain it? Having a high salary and saving.
The counter argument is that high salaries enable more people to save and take risk rather than just those that start out wealthy.
The main counter is that people get comfortable and don’t take risks is definitely true, but I’m not sure how much that impacts the amount of entrepreneurship that would have otherwise happened.
cluckindan
Not sure about that.
https://news.crunchbase.com/startups/google-stanford-and-the...
jrflowers
This makes sense so long as you define “entrepreneurship” as the act of making a legal entity with the goal of using venture capital to hit a billion dollar valuation as quickly as possible.
In fact since the number of billion dollar valuations goes up by an order of magnitude every few years we are on track for every person on earth to start a billion dollar corporation in a few short decades. This is proof that you could see on Wikipedia that entrepreneurship is doing great
reissbaker
Given the frequent "it's not X—it's Y" type of constructions, lack of researched data, and the em-dashes, unfortunately I think this is the fever dream of a GPU cluster humming away somewhere.
thrawa8387336
The only thing worse than the author claiming that is you asking for "data". Like what data? This is qualitative. And yes, Google killed one particular flavor of startup that paid its employees with smoke
jrflowers
It’s always kind of funny when people respond to a subjective opinion with “where’s the data?” because unless you’re responding with data it’s pretty much just a way of saying “I don’t like this”
rwmj
The blog post makes a bold claim about how the rise of tech salaries at Google killed entrepreneurship. The poster could have at least given this a sniff test: how about, for example, showing a graph of Google salaries overlaid with a graph of the number of start-ups from the crunchbase database? As he didn't even go to this minimum effort, it's valid to ask "where's the data" here.
trinsic2
Yeah, I noticed this too. It's a kind of response one would make if one felt threatened by the subject matter.
motorest
> And yes, Google killed one particular flavor of startup that paid its employees with smoke
To me, it reads like a desperate far-fetched argument to deny employees a fair compensation for their work. As if there is any virtue in stiffing people out of their paycheck.
bluetomcat
With a lot of fancy wording, the article basically proposes that slow-moving, bureaucratic educational institutions should catch up with TikTok’s latest algorithm, helping raise the next generation of influencers.
RajT88
To the effect it clearly proposes anything!
Perepiska
"billions of influencers"
vineyardmike
This isn’t particularly controversial tbh.
Yes Google’s high salaries are part of a system that has been reworking entrepreneurship in Silicon Valley. This has been documented and discussed at length. Did you look for data?
Big tech pays in valuable stock, and salaries can reach upwards of 500k for relative rank and file positions (not rare one offs). Over a decade, that’s $5M. At the same time, VC firms have been holding companies private longer raising more rounds, which often dilutes the employee shares and reduces the “reward” for employees waiting for an IPO. If that new diluted IPO rewards an employee under $5M for a decade of employment, they were better off at Google/Meta/etc. Startups were always a lottery ticket, but if a “winning” ticket is less profitable than not playing, why join at all?
This plays directly into the thesis that the powerful are extracting additional resources at the expense of the cultural expectations and understandings. VC firms diluting employees is profitable for VCs, but it jeopardizes the Silicon Valley startup ecosystem if smart people prefer better compensation. Same with the recent AI aqui-hire controversies like Windsurf. Why join a startup if the CEO will take a billion dollar payout and leave the employees with worthless stock.
bbor
If they aren't just tools, what are they?
1. This post seems likely to have been written with the assistance of a chatbot, which explains this phrase. The "they aren't just tools" phrase is only there because he needed a third example for a "it's not just X--it's Y" paragraph, one of ChatGPT's all-time fave constructions.
2. Another cause is more fundamental: the third "leverage" doesn't really apply to this discussion IMO. It's probably useful elsewhere, but owning a large social media company is just a different variety of capital, not some mutually-exclusive group. All expressions of capitalist power in 2025 have some amount of technological amplification going on.
jrflowers
>Why do we need a framework for understanding their social implications?
I would guess that the argument for wanting a framework for understanding language models’ social implications would be the social implications of language models. Like a phenomenon existing is a valid argument for understanding it.
https://www.theatlantic.com/technology/archive/2025/07/chatg...
https://www.rollingstone.com/culture/culture-features/ai-spi...
https://www.psychologytoday.com/us/blog/urban-survival/20250...
>not everyone is chronically online
Do you have data to support this? What does “chronically” mean and why would its absence invalidate the idea of social media impacting how people act and vote?
la64710
This is a blog post not a research paper. The evidence is anecdotal and most people with common sense know it by intuition all the facts that the author mentions.
exmadscientist
What a strange article. It feels like one of those cases where the author gathers so many of the pieces, then, just... fails to solve the puzzle. Or get anywhere close.
I agree that everything feels broken. I'd like to do something about it. Let me deploy my leverage to work on that. Here's my "labor leverage", right here, this comment. Check. Leverage strength... not much. Let's bring my "capital leverage" to bear... okay, done, my 401(k) is invested in my favorite companies. Did you notice? No? Okay, leverage strength... let's go with epsilon^2. And my "code leverage"... uh... I don't think I have any.
So, wait, I, personally, don't have any third-order leverage at all? How am I supposed to go up against trillion-dollar, billion-node networks, with my epsilon^3 "leverage"?
That's the real problem: I don't actually have any meaningful leverage. I'm not in the game.
Is that actually true? Doesn't matter: I believe it to be true. Sure looks like everything is broken to me.
kelseyfrog
What are you talking about?
This is about hyper-scaling unicorns who can create and scale a business faster than the regulatory framework[government] can respond. "Disruption" is a dog whistle for "we're going to break the law faster than the government can keep up." The game is scaling from disruption to entrenchment before the first "The United States vs You" hits your desk.
If you don't have the ability to play the game then you can believe it doesn't exist, but those playing it found a slot machine that only lands on 777.
germandiago
Bureaucracy and institutions are by definition slower. It has always been like that.
If they want to have more impact, they need to adapt to more market-like techniques.
Whether an institution moving faster would be good or bad, I am not sure actually. Probably moving too fast for something that belongs to "everyone", with all kinds of heated opinions, etc. is not the best place to move fast.
OTOH, and this is as a spanish (I do not know enough about the specifics of America), I feel that nowadays part of the insritutions are "injected" changes that the society is not demanding from them. Destroying the established base and traditions of the (in this case) society. Social engineering and influencing campaigns I would say.
Maybe this is not the main topic of the article. Just was a brain dump I was doing about observations of my own.
These things have always existed actually. It is just that with technology and many people using it, information from individuals, etc. this influence is probably made more effectively.
joules77
Engineering/STEM training doesn't have what is required to fix such problems. So they have to get involved with multi-disciplinary groups or nothing useful will ever get built that actually fixes things.
This is why lot of people within tech/science circles feel lost and defensive about their work. They barely understand anything about the humanities/social sciences.
Consciousness of what is missing is increasing slowly, thanks to the info tsunami the internet has unleashed.
But that info delivery architecture relies on pseudo experts and celebs whose survival depends on collecting views, and is delivered to the mind in such random order, with high levels of over stimulation and noise, that it creates even more confusion.
What's missing?
No foundations in Philosophy. No idea where Value Systems come from. No idea how they are maintained - learn - adapt to change. No idea why all religious systems train their priests in some form of "Pastoral Care" involving constant contact with ordinary people and their suffering.
So the Vatican survives the fall of nations/empires/plagues/economic downturns/reformation/enlightenment/pedo scandals etc but science/engineering orgs look totally helpless reacting to systemic shocks and go running to Legal/HR/PR people for help.
That's at the org level. At the individual level, most tech folk pretend the limitations/divisions of their own brain/mind don't exist and have no impact on what they build. There is no awareness of what Plato/Hume/Freud/Kahneman have to say about it and how those divisions of the non united mind and denial of it effect what gets built. And since the article mentions systems running at different speed think about the electrical and chemical signaling in your own mind. Are they happening at the same speed?
So don't try to work all this out by yourself. Multi-disciplinary groups are our only hope. If the org is filled with only engineers, history already shows us how the story unfolds.
treetalker
> Something fundamental has shifted in how power works, and most of our institutions haven't noticed. We're living through what might be called "leverage arbitrage divergence"—a growing gap between how fast some actors can change the world and how fast others can respond to those changes.
I disagree that the way «Power» works has fundamentally shifted. This is a classic pattern of hegemony/insurgence/counter-insurgence.
null
homeonthemtn
I agree with the premise and appreciate the definitions that capture a situation that's still being understood, but the solutions are vapid.
"Awareness" as an option for an information saturated society is not the pathway for anything right now
jb_rad
Excellent observation. But I believe your proposed solutions could be strengthened. Improving “leverage literacy” may be a first step, but the fundamental mismatch in velocity will continue expanding the gap between technology and social institutions.
The question then becomes, how do we increase the velocity of social institutions to keep pace with technology? Balaji’s blockchain native societies come to mind. The comment in the thread about needing philosophical roots in engineering is interesting too. Curious what you think.
PeterStuer
Agility is the one trait by which a new entrant can unseat incumbants.
Lose that, and you'll be stuck in a stagnated first past the post world.
Does that mean all new is good and old is bad? No. And 'hypernovelty' has huge problems as it leaves no time for individuals nor society to adapt. But tread carefull with what you whish for.
raincole
The articles on this blog before 2025 never contained em-dashes. Not even a single one.
And the articles from 2025 onward all use em-dashes.
Curious, huh?
> Each operates at a different mathematical order: linear, exponential, and systematic respectively.
This was where I stop reading. "Systematic" mathematical order. Sure.
endymion-light
When I saw the classic
It's not X -- It's Y
On the end paragraph, it became very obvious that a lot of this was AI generated. Please, speak in your own voice! The message of this article is almost completely ruined by the use of ChatGPT as a writing crutch.
xxs
It has all the classics
raincole
I know I shouldn't care at all. However I can't help but feel a little bit sad knowing that a (I suppose) once genuine blogger simply gave up and decided to delegate his thinking process to a token machine.
endymion-light
I hate AI writing, but I get it on pointless B2B marketing & awful linkedin posts, they're worth nothing, and it's a great way to block and ignore an account.
But the fact that blog trying to communicate an interesting idea is using a predictive machine to word things is just so depressing. Is it your blog, or is it chatgpts? Did you come up with the term leverage arbitrage, or did a predictive model?
Did OP just provide an outline and let the predictive model write the entire thing? It just feels sad.
xxs
>I know I shouldn't care at all.
Personally I do care about punctuation, it's part of the (my) style and presentation, the way to convey meaning, etc. Still a reference to a classic: https://news.ycombinator.com/item?id=7865024
dvt
> making employment more attractive than company-building
This is decidedly untrue. You can make a few clever(er) points here: VC meddling is rotting at the core of ingenuity (which I happen to agree with) or even that large companies (GOOG/MSFT/etc.) are tangentially capturing startups via incentives (think free credits, etc.). But author doesn't make these, so I won't argue against (or for) them.
> Today, higher-leverage actors are strip-mining institutional commons—democratic norms, social trust, educational relevance, economic mobility—faster than lower-leverage actors can regenerate them.
This will seem like a technicality, but for a pedant like myself, it's quite important: this is absolutely not the tragedy of the commons. It might be a new tragedy (maybe we'll call it "theft?"), but the interesting and paradoxical nature of the original has nothing to do with this reformulation. What makes the tragedy of the commons interesting is that all agents will favor maximizing their local maxima in spite of minimizing the global maxima. A sort of "missing the forest for the trees" thing.
> The stakes couldn't be higher. If we don't develop conscious approaches to managing leverage arbitrage, we risk a future where technological capability advances exponentially while social coordination capacity deteriorates linearly—a recipe for civilizational breakdown.
This seems a tad dramatic; "leverage arbitrage" was significantly higher during colonial or industrial times and society didn't exactly collapse. I agree with the sentiment, but not sure about all the "боже мой."
When you read the title, "Why everything feels broken and what can we do", it is obvious op turned a me problem into an us problem.
It's a common pitfall to take yourself out of the equation when you are about to make assertions without evidence to back them up. The title could have been written as:
"Why do I feel everything is broken, and what can I do about it".
you will end up writing a completely different post as a result. a more sincere one, and one that is closer to the reality of the situation that needs to be addressed, and that is one's perceptions, biases, and feelings that come from our own personal experiences.