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Pure Investors in the Rot Economy

January 18, 2025

Ed Zitron’s piece The Rot Economy should be mandatory reading for anyone curious about the environment in which tech companies exist today.

Venture pumps millions or billions of dollars into ideas that might sell a product or a service, but ultimately resemble things that can be sold to other companies or put on the public market for a profit higher than what was paid on a per-share basis. I once suggested that Silicon Valley conflated “making great ideas work” with “making ideas I like work,” but on consideration, many of these companies aren’t even things venture capitalists like - they are things that resemble things that they can sell. Do I genuinely believe that everyone who invested into the Web3 grift was a strident believer in the brave new decentralized economy? Hell no. They just went where the winds blew — or where they seemed to be blowing.

https://www.wheresyoured.at/the-rot-economy/

The Rot Economy

At the center of everything I’ve written for the last few months (if not the last few years), sits a cancerous problem with the fabric of how capital is deployed in modern business. Public and private investors, along with the markets themselves, have become entirely decoupled from the concept of what “good” business truly is, focusing on one metric — one

This opinion piece rings true to me. I have acquaintances who are “pure investors”—they will buy anything from crypto to Gamestop to copper billets as long as they think they can double their money in short order, and they are eternally searching for the next tech IPO to buy into. They do not care what these companies even do, nor whether they are sustainable, nor their net effect on employees, society, or the environment. There is a single axis on which they place all possible investments: money go up—yes/no.

I suppose investors of this sort have always existed, but their disregard for sustainability I think is new, facilitated by the ease with which they can discard their investment when no longer desired—a few taps on the screen; no need to even call your brokers. And the fact that they are socially acceptable is new. They’re no longer the evil profiteers that ruin societies to make a buck, they’re just…investors now. That’s just how everyone is expected to behave.

In a “sane and just” world, to use Ed Zitron’s phrasing, sustainability should be priced into the worth of a company’s stock. After all, an unsustainable business is more likely to fail, and adds risk to your investment. But for some reason, everyone is convinced that they will be able to catch the falling knife, to exit before the stock goes down, to cash in before people figure out that the ugly jpeg they bought wasn’t worth ten thousand dollars.

This way of thinking is, of course, the very definition of The Greater Fool Theory: a pyramid scheme in which investors convince themselves that there will be a steady supply of even greedier idiots who will give them cash for their overpriced assets before everyone discovers that it’s actually worthless.