Kyla Scanlon
Discover more from Infinite Loops
A couple of weeks ago, we announced a new series here on the Infinite Loops Substack.
Every other Wednesday, we will be publishing one of Ed’s research notes for a previous or upcoming guest.
These notes aim to identify the themes which underpin the entirety of our guests’ output. They are designed to prompt questions, not answers, and to provide a foundation upon which interested followers can launch their own dialogue with our guests’ work.
Today’s note is on the excellent Kyla Scanlon, who has established herself as one of the most prolific, original, informative and entertaining creators and educators on the internet. Kyla has appeared on Infinite Loops twice previously - see episodes 75 and 125 - and will undoubtedly do so again in future.
Enjoy!
Background
Links
Must-Read Pieces
Themes
Vibes
The Interaction between the Physical, Digital and Psychological
Evolving our Worldview
The Creator Economy
The Grey Areas
Theme 1: Vibes
Summary
The narratives that we tell and that we believe create vibes. These vibes permeate the actions we take and our perceptions of the world.
In many cases this means that our perceived reality is distinct from the fundamentals.
Paradoxically, this also can serve to bridge the gap between our reality and the fundamentals – we can vibe something into being.
Vibes can therefore be a self-fulfilling cycle. How well people expect something to perform will have a role in how it eventually does perform.
Vibes (and the narratives that shape them) are therefore hugely powerful. Control the vibes, control the results. We have to create the right vibes.
Institutions such as the Fed primarily exist as vibe regulators. By their statements and actions they ‘nudge the market around’ to achieve their mandates.
We are currently in a ‘vibecession’: “a period of temporary vibe decline where economic data such as trade and industrial activity are relatively okayish”.
Questions
Is the development of positive / negative vibes primarily a bottom-up or a top-down process? The role Kyla ascribes to e.g. the Fed and Elon Musk, suggests the former. But much of Kyla’s writing also implies that vibes are bottom-up phenomena driven by peoples’ experiences ‘on the ground’. How does she bridge this gap? How much agency do we have over our vibes?
This has made me think of examples of top-down vibe creation. Tony Blair’s New Labour created a very distinct vibe when it came to power (‘cool Britannia’). Obama’s first couple of years in power had a vibe. The Thatcher / Reagan consensus definitely had a vibe. In each case these administrations explicitly marketed themselves as making a clean break with the past. Does this suggest that vibes are born out of perceived change in circumstances?
I’m really interested by the interaction between perceived reality and the fundamentals. Can vibes exist entirely independently of the fundamentals? Or are they always interrelated?
What is the primary constraint on ‘good’ vibes for the average American? Is it material or psychological factors? Something else?
Does traditional economics underrate the role of vibes and narratives? If so, why?
If vibes are so important, and if positive outcomes can be manifested via vibes, does this suggest that we are underrating the benefits of the ‘this is fine’ dog meme approach?
How important is the truth of a narrative to its staying power?
Key Essays
Key Quotes
And if you pay attention, you can ~manifest~ things into existence, which is what Rudd is stating below
In the long run, inflation expectations are important - and almost every market *to some degree* is driven by expectationary behavior. How people *expect* stocks and crypto to perform has a role in how they eventually *do* perform, in the long run
Monetary policy is basically vibes at this point. The Fed nudge nudges the market around to achieve their mandates of price stability and maximum employment.
The market is a narrative. There are earnings, cash flows, term structures, valuation models, etc - but a lot of short-term movement is driven by what people are saying. Reflexivity - perceptions impact fundamentals.
But the important question here is what percentage is swayed by fundamentals versus storytelling - and it seems that most of the market is moving on the qualitative vs the quantitative.
People are worried. The narrative is a circle. That’s because people seek out things that they fear. It’s apart of our narrative as a species - we find the things that scare us, and try to tackle them. We go on Google, and we search “inflation” - and we worry. And that worry perpetuates more worry, so on and so forth. The doom loop.
The market is driven by storytelling more than anything right now - and those that hold the pen, like Elon and Yellen are able to shake the markets. And as storytellers, they get to decide when the “The End” comes up in the story.
We are all just playing the game together, and minds drive the underlying fundamentals of everything - we are all pricing out our own peculiarities.
It’s a vibecession for sure (JPMorgan titled it a productivity recession), we still have a bit to go before it’s an actual recession
Meaning is created, not discovered. Everything is within some sort of subjective realm (to a certain extent).
Prices end up being more about the narrative versus anything.
Narrative is EXTREMELY valuable. If you can craft a narrative (and get others to believe it), you can do most things.
Theme 2: The Interaction between the Physical, Digital and Psychological
Summary
Sometimes narratives, vibes, intentions and ambitions come up against material constraints.
These constraints are the hard, ultimate, real-world limits to action.
There are material supply shortages in, for example, the energy sector. Until these are dealt with our capacity for action is limited.
The digital world requires the physical world to exist. To build a digital future we need a physical present.
Questions
Kyla’s writing is really clear on the impact of material scarcity on the economy and on wellbeing in the physical world. One of the selling points of crypto / NFTs is that they create artificial scarcity. Beyond the economic implications, what is the philosophical and/or instrumental advantage of this? Why is this a good thing
There is an interesting interplay here between (1) the role of vibes and narratives in dictating perceived reality, and (2) real physical constraints. At different points Kyla’s writing focuses on both of these points. My mental model of Kyla’s worldview is that at the margins there are these very real, very robust material constraints. You cannot ‘vibe’ your way out of these. But then in the middle there is this huge mass of nuance and wriggle room, which is ultimately dictated by vibes and narratives. Is this a fair reflection of Kyla’s current thinking?
How does Kyla weigh the relative importance of (1) technological, (2) political and (3) societal transformations in solving the problem of material constraints? Each of these factors implies a radically different set of solutions. Where should our priorities lie?
Why do policymakers consistently reach for demand side solutions to supply side problems? Is it because these solutions are easier / more accessible? Or is it something else?
Key Essays
Key Quotes
And to caveat - yes renewables are the future one day, but they simply are not the solution right now. We have to invest for the !!long run!! but the short run is going to be a lot of mitigation. (View Highlight)
But alongside all these meta thoughts, you have physical commodities, constrained by physical supply. (View Highlight)
And that’s the inherent shortfall with both Doge and the USD and monetary and fiscal policy - it can create incentives, but there is still the physical that cannot be generated from computing or interest rate discussions. (View Highlight)
There has to be a physical layer of the Internet. We can talk all we want about the ~metaverse~ but there still has to be a convergence of physical and digital realities. (View Highlight)
Digital infrastructure is the backbone of the entire Internet. It’s everything from data transmission technology to hardware to cell towers. The biggest thing is that a DIGITAL reality requires a physical reality - it needs to have the speed, the coverage, the capacity to build this future of the Internet (View Highlight)
I think we are entering the age of excess. We have always had a world where we are focused on the idea of the !consumer! as a tool for economic growth, and now the question becomes - how does a !consumer! function in the light of broken supply chains, ghost cities, and an inflationary environment? What is GDP, if not consumer spending? How do you deal with demand when supply chains are so rickety? (View Highlight)
But the more interesting contrast here is the physicality of centralization - what does it mean to geographically not belong like in crypto? Where does the physical tie in? Crypto can deal with infinite supply and demand (to a certain extent) because it exists online. But the infrastructure of crypto - the networks, the Internet, the power - all is reliant on the PHYSICAL - the physical goods, the broken supply chains etc. Everything boils down to how x gets to y - and right now x isn’t getting to y. How does the online reconcile with the physical? (View Highlight)
To summarize - it’s incredibly hard to organize the physical. Supply chains are constrained, energy crises are seeping through, and that’s HARD to solve for. (View Highlight)
GDP may be negative, but it doesn’t mean things are *bad*. It just means that growth at any cost might not be the most sustainable model, or reflective of the state of the economy. (View Highlight)
Theme 3: Evolving our Worldview
Summary
The world has fundamentally changed. Our models of the world haven’t.
We need to change how we approach the world. We need to build new ways of thinking about the economy.
As the world changes, so must we.
Questions
What new ideas and worldviews is Kyla currently excited about?
Where do the new models of thinking we need to embrace come from? In one sense this is a political point – new economic tools mean new economic policies. But in another sense it is a more philosophical point about how we interact with the world. Where does Kyla look to for inspiration?
I’m interested in the interplay between this and economic growth. Kyla argues that “GDP may be negative, but it doesn’t mean things are bad. It just means that growth at any cost might not be the most sustainable model”. A counterpoint to this is Tyler Cowen’s argument that economic growth is a moral imperative for making humanity happier and healthier. Does Kyla disagree with this thesis? If so, why?
Is a post-scarcity society a realistic / worthwhile aim?
A counterpoint to the Tyler Cowen argument is one which is often argued for in connection with the green movement, namely that to avoid impending environmental destruction we need to advocate a degrowth agenda – radically reducing consumption etc. What is Kyla’s appraisal of this argument?
If Kyla had to sum up the worldview she is trying to cultivate in one sentence what would it be?
Key Essays
Key Quotes
It’s a time to create new stories. Things have fundamentally changed - a pandemic, a war, crypto ownership, wealth distribution and concentration, etc etc etc and an era where what used to work no longer works anymore. Maybe it’s time to f*ck around and find out - whatever that means. (View Highlight)
It’s a combination of stepping backwards - realizing that we need to prepare for a changing economic world, but that doesn’t mean completely abandoning the idea of progress. The differential between what we are used to and what is happening has to close a little bit as we reconcile with reality. (View Highlight)
We are living in a world of increasing differentials, where our base case is becoming less probable, and we are having to build out new models of thinking. That is exciting but scary - we might be all experiencing the derivative of the ‘same thing’ as our economic world changes around us but it shows up for all us differently. And that is important to remember. (View Highlight)
Our economy has changed but our methodology hasn’t. (View Highlight)
We kind of get stuck in these corrals that limit how far we can see to the side of us - it’s not always about moving forward, but about moving laterally too (View Highlight)
We have to start rethinking how we think about things - analyzing the tools we have, and the frameworks we implement, and perhaps trading them in for something different. (View Highlight)
I think the way that we think about the economy is going to have to evolve (View Highlight)
GDP may be negative, but it doesn’t mean things are *bad*. It just means that growth at any cost might not be the most sustainable model, or reflective of the state of the economy. (View Highlight)
The way that we think about the economy and markets might have to evolve as the economy and markets evolve (View Highlight)
think there is a world where consumer spending isn’t a core driver of our existence, a world where participation is incentivized and encouraged instead of us living in a zero-sum individualistic culture, and focused on innovation that truly makes the world better. (View Highlight)
Theme 4: The Creator Economy
Summary
The creator economy (meaning the ecosystem of content creators, consumers and advertisers) is just beginning.
In order to be successful in the creator economy one must solve for distribution, marketing, creativity, brand management and trust. Monetising this is hard.
Brands are becoming increasingly involved in the creator economy as they realise that they can capitalise on and leverage the above elements.
A key element of the creator economy is figuring out how to tap into what people are passionate about.
Creators are the storytellers of the next generation. It all comes down to narrative.
Curation is a way to leverage the existing creator economy.
Questions
Kyla has argued that the ‘equation’ behind a successful creator is distribution + marketing + creativity + brand management + trust. I note that quality isn’t included here. How important is quality to succeeding in the creator economy?
One trend in recent years is the institutionalisation of the creator economy. Kyla has pointed to the institutionalisation of crypto and the opportunities for big brands. Some companies now advertise for roles like ‘in-house influencer’. Many large traditional organisations are building out their informal marketing through blogs and twitter etc. Is this a good thing?
One of my favourite things about the creator economy is its ability to unharness passion. The traditional boundary between ‘9-5 me’ and ‘after work me’ is breaking down. But can monetising your passions divorce you from why you loved them in the first place?
The creator economy is extremely unevenly distributed. Why is this? What would a more broad-based creator economy look like?
Where is the alpha in the creator economy? Is it curation, distribution, persistence? Something else? Why has Kyla been so successful - what is her edge
What is Kyla’s main piece of advice to aspiring creators?
Kyla has argued that NFTs flip the creator economy so that we can make an economy out of the creator – we will each be our own little economies. Can she sketch this out in a bit more detail?
Key Essays
Key Quotes
I am incredibly bullish on the creator economy, the evolution of social, and the potential of blockchain integration in our daily lives. And I think Roblox is a steppingstone in this path.
There is an element of figuring out how to tap into what people are passionate about (and giving them the space to explore that) - (View Highlight)
Anecdotally, as a “influencer” (am I that?) I’ve become increasingly frustrated with the Creator Economy at large. There are so many people investing in it that 1) don’t talk to creators or 2) think they know what creators need (they usually don’t). DAOs are an opportunity to break away from the power of platforms and the power of traditional dollars. To the extent it works, it will democratize the space (which is becoming increasingly extractive). (View Highlight)
Creators have a role here. They are the storytellers of the next generation. Creator communities have long been hacking away at traditional media coverage, because they are humans, and humans want to get their information in a humanistic way. (View Highlight)
Brands are becoming increasingly aware that influencers/creators are the key to unlocking distribution. (View Highlight)
how do you sort through it all? With all the content out there, how do you make sure the best rises to the top? The answer would be some sort of curator - (View Highlight)
the ~creator economy~ is really just beginning in my opinion. (View Highlight)
It’s still about the story. Stripping it all away, we are seeking for the story, for the building of the ecosystem, for understanding our MAIN OBJECTIVE. And the ecosystem in which these stories are being told is growing, flourishing, and we are nearing some sort of Cambrian Explosion of content. (View Highlight)
The number one social currency is trust - and if brands can leverage that through creator partnerships, that is once again, a ~big ROI~ (View Highlight)
Theme 5: The Grey Areas
Summary
Kyla is interested in the grey areas – the murky, unclear areas between good and bad, right and wrong, centralization and decentralization, supply and demand, love and hate, what we think is happening and what is happening, etc.
The key concept here is uncertainty. Uncertainty is a part of life. Much of Kyla’s writing can be seen as an attempt to embrace uncertainty.
The grey areas are frightening. But they are also exciting. They provide opportunity for change. It is within these grey areas that vibes operate.
Nuanced thinking is crucial for us to be able to navigate these uncertainties.
Politics is basically the art of navigating the grey areas.
Questions
In a world of uncertainties, there is a competitive advantage in being able to clearly and concisely diagnose and summarise. But in doing so we risk skirting over the grey areas. As an educator and a creator what is Kyla’s process for doing the former while avoiding the latter?
Social media amplifies strong views. Society incentivises loud opinion. The ‘grey areas’ is a great concept as it implicitly acknowledges that we don’t need to have an opinion on everything. As a creator does Kyla feel a pressure to have unnuanced views? How does she fight this?
If we accept that the world is inherently uncertain, one could argue that narratives are lies created to make sense of the grey areas. Does Kyla agree with this framing?
The grey areas provide opportunity. They provide space for compromise and for creation. But it is within the grey area’s that dragons lie. Grey areas allow the evil to be passed off as the good. ‘Alternative facts’ lie in the grey areas. Is there an ethical case for the taking of unequivocal positions?
One could read Kyla’s work as an example of millennial / Gen Z post modernism. The world is so complex and hard to understand, and knowledge is so contingent on vibes and narratives, that there is no single objective reality. But this doesn’t feel like a fair reflection of Kyla’s writing, which is far less nihilistic. It also contradicts the fundamental driver of her project – to educate. Does any element of this characterisation ring true to Kyla? If so then why, and if not then why not?
How can we better leverage information abundance to help understand, rather than cloud, the grey areas?
Key Essays
Key Quotes
Think of Goldilocks and her porridge - it can’t be too hot, too cold, it has to be just right. The Fed has to manage both price stability (keeping prices reasonable) and jobs (keeping people employed) which is an incredibly delicate balancing act, at best. (View Highlight)
This gray area is the most interesting part - what exists in the margins of good and bad, what makes something decent versus excellent, and what makes something horrible versus fantastic. (View Highlight)
The bad/good gets fuzzy because of tradeoffs. (View Highlight)
But just like the trolley problem, it really isn’t (A) Centralization or (B) Decentralization - it’s more like (A) Centralization with situational trust and some element of optionality or (B) Decentralization with total ownership but with access to a support system. (View Highlight)
Politics is just a massive gray area honestly - from a centralization risk standpoint, the fact that we have one guy who can nuke an incredibly important deal (in favor for his own family’s coal company, presumably) is… bad. (View Highlight)
following - people’s intentions are often gray, but we perceive them to be either white/black (we think that people are saying the most extreme of what they mean) - so this results in narrative disruption. (View Highlight)
The gray area of being nice could definitely solve a lot of the problems that we have. (View Highlight)
think my biggest takeaway over the past few weeks is that nothing makes sense, and that’s okay ([View Highlight] (https://instapaper.com/read/1529298261/20397950))
We are incentivized to be angry, so we are going to be angry. That’s what the algorithmic money faucet wants from us. It doesn’t reward nuance. (View Highlight)
We do not like uncertainty, as creatures. It’s confusing and noisy. (View Highlight)
The algorithmic money faucet does not like detail, but that is what this economy *requires*. Things are bad, things are good, and it’s important to understand where and why both are happening versus saying that Everything is Actually Hell. (View Highlight)
We are living in a world of increasing differentials, where our base case is becoming less probable, and we are having to build out new models of thinking. That is exciting but scary - we might be all experiencing the derivative of the ‘same thing’ as our economic world changes around us but it shows up for all us differently. And that is important to remember. (View Highlight)
Miscellaneous questions
What is Kyla’s favourite music to work to?
What is Kyla’s favourite method of distribution?
Why hasn’t traditional education (schools, universities) better leveraged modern forms of information distribution?
What is Kyla’s favourite cycle route?
 | A guest post by
|
Kyla Scanlon
Kyla's great! 💚 🥃