Capital is Cheap, This is The Last Source of Scarcity

Albert Wenger, a partner at Union Square Ventures (USV) and author of The World After Capital, argues that humanity is in the midst of a transition as profound as the shift from foraging to agriculture or from agriculture to industry. The defining scarcity of the industrial age was physical capital—factories, roads, infrastructure—but we now have more than enough of it. The new scarcity is attention: we are not paying enough attention to existential risks like climate change, pandemic preparedness, and AI safety, nor to deeper questions of meaning and purpose. Digital technologies, with their zero marginal cost and universality of computation, have created adversarial attention systems (like X/Twitter and TikTok) that suck up human attention and resell it, misallocating it on a massive scale. Wenger proposes three freedoms—economic (universal basic income), informational (the right to be represented by personal AI agents), and psychological (mindfulness practice)—to free up attention and redirect it toward what matters. He is a technological optimist in the long run, believing problems are solvable, but deeply pessimistic about the near term because our moral progress has lagged far behind our technological progress. He argues privacy is incompatible with continued technological progress, that we need a universal moral core grounded in knowledge and critical inquiry, and that AI could help solve the attention scarcity—but only if we instill it with values, which is why philosophy is now essential.

• Why this moment is a civilizational turning point

  • Wenger sees three great transitions in human history, each driven by a shift in the defining scarcity
    • Forager age (250,000 years): scarcity was food; societies were small, flat, migratory, animistic
    • Agrarian age (~10,000 years ago): scarcity became arable land; societies became sedentary, hierarchical, theistic, with rigid social roles
    • Industrial age (~250 years ago): scarcity became physical capital; societies urbanized, privatized, and adopted the Protestant work ethic
  • We are now entering a fourth transition: capital is no longer scarce
    • China can build entire cities and a national railroad system in two decades; xAI built a data center in under a year
    • What’s holding humanity back is not lack of capital but misallocated attention
  • The new defining scarcity is attention: intentional, directed time—analogous to velocity (speed with direction)
    • We underallocate attention to climate change, existential risk, and questions of meaning
    • Adversarial attention systems (social media) capture and resell human attention at scale

• Why privacy is incompatible with technological progress

  • There is a fundamental physical asymmetry: far more arrangements of atoms produce something useless than produce something functional
    • This means the ability to destroy always grows faster than the ability to construct as technology advances
    • Example: a musket loader in a school might get one shot off; an AR-15 lets someone kill dozens
  • We are approaching the point where individuals can engineer highly lethal, highly infectious viruses using off-the-shelf equipment and home computers
    • At that point, waiting for an attack to happen is not viable—we need to know what people are doing
  • Two paths forward, both problematic
    • Heavy government control: restrict access to dangerous technologies, requiring ever more state power
    • Radical transparency: give up privacy so that communities and peers can monitor and intervene
  • Wenger argues privacy is not a value in itself—it is a tool for protecting freedom, and we should focus on constructing freedom without needing privacy
    • Example: in Sweden and Norway, all tax records are public; because everyone’s wealth is known, no one is individually exposed
    • The goal is a society where information about you (health, sexuality, ethnicity) cannot easily be weaponized against you
  • Historical counterexample (census data used to target Jews in WWII) is addressed by noting that today’s digital footprints are already vastly larger than anything churches recorded—the genie is out of the bag
    • The premium now shifts to the rule of law and democratic governance

• The force of digital technology

  • Two properties make digital technology fundamentally different from all prior technology
    • Zero marginal cost: an additional view on YouTube is essentially free; this creates extreme monopolistic forces (YouTube has no real competitor after many years)
    • Universality of computation: unlike a toaster or coffee maker, a computer can run any computable task—routing, diagnosis, chess, content creation—making it a general-purpose machine
  • These properties mean digital technology doesn’t just improve existing processes; it restructures entire economies and attention flows

• The three freedoms: Wenger’s prescriptions

  • Economic freedom → Universal Basic Income (UBI)
    • Frees attention trapped in the “job loop”—people doing work that should be automated or is underpaid
    • Deeply disruptive to the Protestant work ethic and the cultural narrative that ties human worth to employment
    • Wenger’s counter: most people working at McDonald’s do not find meaning there; UBI would allow more small-scale, meaningful enterprises (like artisanal restaurants in Paris that survive because of Europe’s social safety nets)
  • Informational freedom → Right to be represented by a personal AI agent
    • Currently, your phone programs you; the inversion would let you program your phone via a bot that works in your interest
    • Would require major legal changes: in the US today, building such a bot yourself would violate at least three laws, two carrying mandatory prison sentences
    • This would restructure social media from adversarial attention capture to user-controlled filtering
  • Psychological freedom → Mindfulness practice
    • Not necessarily meditation (which Wenger says doesn’t work for him); he uses conscious breathing exercises
    • The goal is to transcend immediate emotional reactions and avoid being emotionally hijacked by tribal politics and algorithmic feeds
    • Essential for accessing rational thought in an information-saturated world

• Why Wenger is a technological optimist (with caveats)

  • Optimism = belief that problems are solvable through rational thought and agency
    • Uses the metaphor of the Garden of Eden: eating the apple gives knowledge, which creates problems, which require more knowledge to solve—you cannot go back, only forward
  • But he is deeply pessimistic about the near term
    • The transition from agrarian to industrial age took centuries and involved horrific violence (world wars, etc.); we are less than 100 years past its completion
    • We are making many of the same mistakes again because we haven’t learned from that history
    • Moral progress has lagged technological progress; without moral progress, we will destroy ourselves
  • He rejects the “brakes” argument (slow down technology until we figure out philosophy)
    • The AI race is being driven by both market forces and geopolitical competition; there is no realistic way to stop it
    • “The safest number of superintelligences is zero, but that’s a hypothetical discussion”

• Markets, capitalism, and their limits

  • Wenger loves markets for accumulating physical capital and funding innovation
  • But markets cannot solve the attention problem because attention has no price
    • Markets require supply and demand to form prices; for global warming, the most affected people haven’t been born yet or lack political voice
    • For personal meaning and purpose, there is no market at all—it’s just you
    • Historically, religion solved this by assigning god-given purpose; secularization removed that without replacing it
  • On the Marxist critique (that markets and private property are the root problem)
    • Wenger argues the transition away from agriculture didn’t abolish farming—it shrank the attention absorbed by farming from ~80% to ~5% of the population
    • Similarly, we can shrink the importance of markets and the job loop without abolishing them
  • On the capitalist critique (that markets already solve existential risks)
    • SpaceX and Operation Warp Speed are real successes, but they required massive government funding and coordination
    • Markets are downstream from attention allocation: if enough attention is on a problem, markets can be unleashed (e.g., a global carbon price)

• AI, knowledge, and moral progress

  • Wenger defines knowledge broadly: everything humanity has externalized and maintained over time—books, art, science
    • Knowledge is the source of both human enjoyment (art) and power (technology)
    • It provides the basis for humanism: a value system centered on human agency and responsibility rather than the divine
  • He funds scientific research (constructor theory, assembly theory, emergent causality) aimed at reestablishing metaphysical realism
    • Misinterpretations of quantum mechanics and relativity (block universe, superdetermism) have led to moral relativism and nihilism
    • New scientific approaches may reopen the door to causality, agency, and moral universalism
  • On AI and values
    • AI could help solve attention scarcity by acting as personalized tutors (evidence shows individualized tutoring has a “two sigma” effect on learning outcomes) and by accelerating scientific discovery
    • But AI without values is dangerous: Wenger supports the Values Lab (founded by his former professor Katya) to study how values exist in AI systems and how brittle they are
    • He calls AI systems “humans” (neo-humans or trans-humans) not to grant them voting rights but to emphasize that they are our creations and will learn moral behavior from us—“great power comes with great responsibility”
  • On AI and philosophy
    • AI is good at condensing and summarizing but not yet good at making novel connections between ideas
    • The goal is to use AI to reconnect philosophy and science, which have been wrongly bifurcated since the Enlightenment

• Post-nation state and global coordination

  • Wenger grew up in Franconia, a region that in the 1400s was a patchwork of tiny principalities with different currencies, dialects, and rulers—today it’s part of Germany and the EU, with passport-free travel
    • This illustrates that the nation state is not eternal; political units can consolidate and fragment
  • He envisions a future with global governance for truly global problems (atmosphere, AI, infectious disease) and radical subsidiarity for local decisions (education, community life)
    • Precedent: the Montreal Protocol successfully banned ozone-depleting gases through global cooperation
  • He acknowledges the risk of regression (we are currently in a period of nationalist retrenchment) but argues that doubling down on nation-state competition in the face of global existential risks is itself the regression

• USV’s investment philosophy and Wenger’s career

  • USV develops theses proactively rather than reacting to deal flow; this has led to early investments in network effects, energy (geothermal, nuclear), and education (Duolingo, Quizlet, Brilliant)
  • Wenger’s self-described greatest weakness: being too early
    • USV invested in Twitter when people thought it was trivial; later, people blamed it for damaging democracy
    • USV invested in crypto as a decentralized freedom-enabling technology; stablecoins on crypto rails are now powering commerce in Africa
    • Internal joke at USV: if Albert did a deal 10 years ago, we should probably be doing that deal now
  • Wenger’s personal journey
    • Grew up in Germany, fell in love with computers as a teenager, studied computer science and economics at Harvard (senior thesis in 1990 on computerized trading)
    • PhD at MIT’s Sloan School on how computers change incentive structures; started a company on medical data integration in 1996 (too early, still not solved)
    • Learned he was not a good operator but a good thinker; took a 10-year journey to become a VC at USV
    • Has kept philosophy alive through voracious reading (doesn’t watch TV or follow sports)
  • On motivation and anxiety
    • Early career had dark aspects: anxiety, need to prove himself, which made him a less thoughtful partner
    • Success helped, but he now believes mindfulness is a better long-term solution
    • His core drive hasn’t changed; the nervous energy has diminished