Episode 70 • 20 September 2023

Liv Boeree on Healthy vs Unhealthy Competition

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Liv Boeree is a former poker champion turned science communicator and podcaster, with a background in astrophysics. In 2014, she founded the nonprofit Raising for Effective Giving, which has raised more than $14 million for effective charities. Before retiring from professional poker in 2019, Liv was the Female Player of the Year for three years running. Currently she hosts the Win-Win podcast (you’ll enjoy it if you enjoy this podcast).

Liv Boeree

In this episode we talk about:

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On the analogy between powerful AI and powerful corporations

Corporations are not superintelligences. They are, in fact, extremely stupid, much stupider than the sum of their parts (a million corporate employees sum to a lot less than a million times smarter human), suffer from severe diseconomies of scale, and subject to only the weakest forms of natural selection due to their inability to replicate themselves reliably leading to the permanent existence of very large dispersion in efficiency/quality between corporations. (You will never see a single especially-well-run corporation take over most of the business world, the way you repeatedly saw more-fit COVID viruses drive to extinction lesser variants.) They are so stupid that they cannot walk and chew bubblegum at the same time, and must choose, because they can only have 1 top priority at a time - and CEOs exist mostly to repeat the top priority that “we do X. // Why then do we have corporations and they have any real-world power at all? Because they are simply very large and parallel and potentially-immortal, and are the least-bad organizations human minds can reliably form at present given the blackbox of human minds & inability to copy them. Not because they are optimal or intelligent.

After buying data on more than 23,000 publicly traded companies, Bettencourt and West discovered that corporate productivity, unlike urban productivity, was entirely sublinear. As the number of employees grows, the amount of profit per employee shrinks. West gets giddy when he shows me the linear regression charts. “Look at this bloody plot,” he says. “It’s ridiculous how well the points line up.” The graph reflects the bleak reality of corporate growth, in which efficiencies of scale are almost always outweighed by the burdens of bureaucracy. “When a company starts out, it’s all about the new idea,” West says. “And then, if the company gets lucky, the idea takes off. Everybody is happy and rich. But then management starts worrying about the bottom line, and so all these people are hired to keep track of the paper clips. This is the beginning of the end.” The danger, West says, is that the inevitable decline in profit per employee makes large companies increasingly vulnerable to market volatility. Since the company now has to support an expensive staff — overhead costs increase with size — even a minor disturbance can lead to significant losses. As West puts it, “Companies are killed by their need to keep on getting bigger.”


Coming soon!

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