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The Perverse Incentives Dominating Our Lives January 8, 2026
The net result of these perverse incentives is an Internet that is increasingly toxic and untrustworthy.
Perverse incentives are funny things. Even though we know they're harming us, we can't stop pursuing them because the refusal harms us, too, as we're excluded from the system. Perverse incentives have come to dominate our lives, but slowly enough that we now accept this immiseration as "the way it is" / normal / inescapable. Let's start with the Internet, which dominates our lives in two ways: 1) as the infrastructure that enables the entire digital realm we depend on for the majority of our transactions and processes, and 2) the engrenages / gearing of our zeitgeist: how we communicate, gather information, learn and amuse / entertain ourselves. One advantage of being active in the early days of the Internet is we experienced a completely different World Wide Web than those who have only experienced the current version dominated by perverse incentives. In its initial incarnation, the Web was not ruled by algorithms extracting wealth by collecting and selling every bit of information from our activity online. To post content, you needed a domain name / DNS and a host for your website. Search engines (Google) tracked incoming and outgoing links between sites, and assigned a page rank based on the number and quality of the incoming links to your site. Sites with large numbers of incoming links were given high page ranks, as the content was assumed to be valuable enough to attract other sites to link to it. These higher ranked sites were placed at the top of the list of search results. This simple system was difficult to game. yes, you could set up 100 websites that linked to each other to give the appearance of many incoming links, but each of those links were worthless because they had no incoming links of high quality, i.e. links from sites with numerous incoming links. Private communication was email, and you could post a comment on public forums / message boards. If your site had a comments section, you curated it yourself. If you wanted to monetize your website, you could sell space for display adverts that weren't targeted to visitors; every visitor saw the same advert. Or you could sell a product or service, or offer a tip jar for those who wanted to support your content. Search engines directed users to a ranked list of websites that were deemed most likely to be relevant to the search topic. There were no platforms that collected visitors' information and sold it, monetized your content and then gave you a negligible slice of the revenues and ranked links by who paid them the most to "sponsor" the link. You kept any money made from adverts, sales or visitor contributions. Compare this authentic, self-organizing system with the perverse incentives embedded in today's Web. Since web traffic now flows primarily through a handful of Big Tech social media / search platforms that monetize both users and content creators, the only way to earn any money is to 1) do whatever it takes to goose your posts to go viral, i.e. click-bait that attracts thousands or millions of views, and 2) generate as much content as possible to "win" by quantity, not quality. The meager revenue shares offered by Big Tech follow a power-law distribution: the vast majority of the earnings go to a handful of top earners and a small percentage of high earners (which I define as earning a sum that qualifies as a middle-class income) and the vast majority of content creators earn very little. This distribution is visible on all the tech platforms: the few at the top make millions, a handful make $50,000 to $100,000 and the majority don't make enough to live on. For example, musicians who manage to get 100,000 listens might make a few hundred dollars, while those who manage to get 3 million listens might make $10,000, unless they have a label, distributor and manager to split the income with, in which case their share might be $6,000 or less: one month of a lower-middle class income. 
The Big Tech platforms have reached dominance via 1) the network effect, 2) buying up competitors before they could scale up to become threats, 3) intensifying the addictive draw of their content and "social rewards": clicks, likes, etc. and 4) aggregating all the functions that were once distributed over many sites into one integrated network state: search answers, marketplaces to sell stuff, sponsored ad placement, and so on. The incentive is to increase profits by any means available, which means anything that hasn't been made illegal. Since "use" requires "acceptance of community standards," the Big Tech platforms are privatized totalitarian network states which can ban or shadow-ban users without explanation or recourse, collect and sell data with few limits, and modify all this in black-box operations invisible to regulators and users. Content that isn't posted on the platforms or paid "sponsored content" placement in effect disappears from view: search no longer directs queries to the site and their visibility to average users going only to platforms for content is zero. The concentration of all search and content streams into a handful of platforms and the power-law distribution of the earnings generates perverse incentives to: 1. Generate as much content as possible (win by quantity not quality) which leads to AI slop becoming the norm, as AI tools tout their capacity to "create videos in minutes." This includes spam, phishing, etc., of course: increase income by sending millions of malicious emails, SMS, and bot-generated activity. 2. Seek to viralize content by making it click-bait (cute animals, heartwarming scenes, accidents averted at the last second, etc.) or extreme, designed to stimulate strong emotional reactions, or "edgy" which is getting more challenging as every outrage has already been commoditized by AI. 3. Attempt to game the platform's algorithms to gain some tiny advantage over the millions making almost nothing from all their content creation. Content creators desperate to increase their share of the tiny slice distributed to creators are the hamsters spinning the quantity-slop wheels that make the web increasingly deranging as its authentic utility declines, wheels that spin out ever higher profits for the Big tech platforms. From their point of view, this arrangement is ideal for generating ever-expanding revenues and profits. The net result of these perverse incentives is an Internet that is increasingly toxic and untrustworthy, as deepfakes proliferate, extremes of degradation and abuse are rewarded, and addictive behaviors are incentivized. Future posts will explore other systemic perverse incentives. My new book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free) Check out my updated Books and Films. Become a $3/month patron of my work via patreon.com Subscribe to my Substack for free My recent books: Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site. THE REVOLUTION TRILOGY: Investing In Revolution Ultra-Processed Life The Mythology of Progress Systemic Problems/Solutions Investing In Revolution (2025) Introduction (free) The Mythology of Progress (2024) Introduction (free) Global Crisis, National Renewal (2021) Introduction (free) Money and Work Unchained (2017) Introduction (free) A Radically Beneficial World (2015) Introduction (free) What You Can Do Yourself Ultra-Processed Life (2025) Introduction (free) Self-Reliance in the 21st Century (2022) Introduction (free) When You Can't Go On: Burnout, Reckoning and Renewal (2022) Introduction (free) Get a Job, Build a Real Career and Defy a Bewildering Economy (2014) Intro (free) Novels The Adventures of the Consulting Philosopher Intro (free) The Secret Life of an Asian Heroine First chapters (free) Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free Investing In Revolution print $18, (Kindle $8.95, Hardcover $24 (145 pages, 2025) 
Only now do we see that we've been investing in revolution for decades--not the revolutions we thought we were investing in, revolutions in technology and finance, but in the social revolution made inevitable by the extremes that we've reached in our single-minded pursuit of private gains.
The pendulum that we've pushed to an extreme will swing to the opposite extreme, and the artifices that have propped up a facade a stability for decades will accelerate the disorder rather than reverse it. We now stand at the point of decision, and this book offers a path to a reformation and renewal that serves the shared interests of us all, not just the few. Introduction (free) Ultra-Processed Life print $16, (Kindle $7.95, audiobook, Hardcover $20 (129 pages, 2025) 
Ultra-Processed Life: the substitution of a synthetic, commoditized, very profitable facsimile for what was once authentic.
Ultra-Processed Life is my term for everything that is analogous to ultra-processed snacks: attractively marketed, instantly alluring, easy to consume, addictive by design, tasty in the moment but harmful over time, its origins a black box of unknown processes, the brightly colored product bearing no resemblance to the real-world ingredients, an idealized form of what is inherently imperfect, untethered from the natural world. As with many others, the catalyst for my exploration was a life-threatening medical crisis that did not have a specific cause. This led me to wonder if our entire way of life is like an ultra-processed snack: tasty but not healthy, edible but stripped of the nutrients we need to be healthy, addictive by design. Introduction (free) The Mythology of Progress, Anti-Progress and a Mythology for the 21st Century print $20, (Kindle $9.95, Hardcover $24 (215 pages, 2024) audiobook, Read the Introduction and first chapter for free (PDF) 
What if the policies to accelerate growth are no longer working because our fix for every problem--growth at any cost--is failing? We're told Progress is inevitable as a result of technology, but everyday life is getting harder, not easier--the opposite of Progress, what I call Anti-Progress.
What if the real source of the unraveling is far deeper than economics or politics? What if the problem is what we see as the inevitable destiny of humanity--Progress--is actually a modern mythology, disconnected from the real-world consequences of growth for growth's sake? We indignantly reject that Progress is a mythology, but our need for mythology hasn't gone away because we've mastered technology; we've created a modern mythology of technology that is heedless of its own consequences. To truly progress, we need a new mythology aligned to 21st century realities. Read the Introduction and first chapter for free
Recent entries: The Perverse Incentives Dominating Our Lives January 8, 2026 We Can Discern Cycles and Waves, But Not the Outcomes January 6, 2026 Channeling Napoleon and Chou En-Lai January 5, 2026 Pretense, Staging, Expediency: the "Solutions" That Implode the Whole Shebang January 1, 2026 Everyone's a Lender Now: Shadow Banking USA December 29, 2025 The Good News Is People Are Realizing We're On Our Own December 26, 2025 My Christmas Letter December 23, 2025 Insane Financial Imbalances and Social Revolution December 19, 2025 All the Dominant Models Are Collapsing December 17, 2025 The Wile E. Coyote Insight: What We "Know" Is More Dangerous Than the Unknown December 15, 2025 The Perilous Journey Ahead December 13, 2025
How We Fail: The Empire Is Forever
December 11, 2025
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Extra-Special Bonus Aphorisms:
"There is no security on this earth; there is only opportunity." (Douglas MacArthur) "We are what we repeatedly do." (Aristotle) "Do the thing and you shall have the power." (Ralph Waldo Emerson) "Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius and a lot of courage to move in the opposite direction." (E.F. Schumacher, via Tom R.) "He who will not risk cannot win." (John Paul Jones) "When we drink coffee, ideas march in like the army." (Honore de Balzac) "Progress is not possible without deviation." (Frank Zappa, via Richard Metzger) "Victory favors those who take pains." (amat victoria curam) "The man who has a garden and a library has everything." (Cicero, via Lee Bentley) "A healthy homecooked family meal and a home garden are revolutionary acts." (CHS) "Do you know what amazes me more than anything else? The impotence of force to organize anything." (Napoleon Bonaparte) "The way of the Tao is reversal" Or "Reversal is the movement of Tao." (Lao Tzu) "Chance favours the prepared mind." (Louis Pasteur) "Success consists of going from failure to failure without loss of enthusiasm." (Winston Churchill) "Where there is ruin, there is hope for treasures." (Rumi) "The realm of gratitude is boundless." (CHS, 11/25/15) "History doesn't have a reverse gear." (CHS, 12/22/15) Smith's Law of Conservation of Risk: Every sustained action has more than one consequence. Some consequences will appear positive for a time before revealing their destructive nature. Some consequences will be intended, some will not. Some will be foreseeable, some will not. Some will be controllable, some will not. Those that are unforeseen and uncontrollable will trigger waves of other unforeseen and uncontrollable consequences. (July 8, 2014)(thanks to Lew G. for retitling the idea.) Smith's Neofeudalism Principle #1: If the citizenry cannot replace a kleptocratic authoritarian government and/or limit the power of the financial Aristocracy at the ballot box, the nation is a democracy in name only. The Smith Corollary to Metcalfe's Law (The Network Effect): the value of the network is created not just by the number of connected devices/users but by the value of the information and knowledge shared by users in sub-networks and in the entire network. (CHS, 4/6/16) My Credo of Liberation: I no longer care if the power centers of our society--the distant, fortified castles of our financial feudal system--are changed by my actions, for I am liberated by the act of resistance. I am no longer complicit in perpetuating fraudulent feudalism and the pathology of concentrated power. I no longer covet signifiers of membership in the Upper Caste that serves the plutocracy. I am liberated from self-destructive consumerist-State financialization and the delusion that debt servitude and obedience to sociopathological Elites serve my self-interests. (Thank you, Klaus-Peter L., for reminding me) "We've become a culture of excuses rather than solutions: solutions always require sustained effort and discipline." (CHS 4/9/16) "Fraud as a way of life caters an extravagant banquet of consequences." (CHS 4/14/16) "Creativity = problem solving = value creation." (CHS 6/4/16) "Truth is powerful because it is the core dynamic of solving problems." (CHS 7/21/17) "We live in a system of human emotions that masquerades as a science (economics)." (CHS 1/1/18) "Always remember, your focus determines your reality." (George Lucas) "Diversity is for poor people. Sameness is for the successful." (GFB) "When power dissipates suddenly, it dissipates completely." (CHS 7/14/19) "Disobedience is the true foundation of liberty. The obedient must be slaves." (Henry David Thoreau) "Markets cannot price in the value of non-monetized natural assets such as diverse ecosystems." (CHS 7/14/19) "Magical thinking isn't optimism, it is folly." CHS 1/3/22) "Tune in (to self-reliance), drop out (of hyper-consumerism and debt-serfdom) and turn on (to relocalizing capital and agency)." (CHS 1/5/22) "The path to everything you desire starts here: like yourself as you are right now." (CHS 11/20/22) "There are only two signals: how many essentials you produce and share and if you're consuming less with better results. Everything else is noise." (CHS 12/17/22) "Liberation is no longer needing any confirmation or feedback from others or the world for one's sense of self. Wealth, fame, recognition, admiration, praise, prestige, approval, sainthood, martyrdom, success: none are needed, none are desired." (CHS 12/26/22) "When fame, wealth, prestige, status and glory are out of reach, you're free to pursue other more valuable things." (CHS 2/6/22) "It is the sacred duty of every activist who seeks to better their community to grow and share as much life-giving food as is humanly possible." (CHS 6/15/23) "Being anonymous, gray and unknown is the ideal state of freedom." (CHS 3/15/24) "We seem to have entered a world of anti-leisure and anti-productivity in which the unpaid shadow work demanded to keep all the complicated digital bits in motion obliterate our leisure and productivity." CHS (5/22/24) "It is axiomatic that failing systems work the best just before they fail catastrophically." Ray W. "Looking younger is mere technique; thinking younger demands creativity." CHS (10/16/24) "Tell me what's taboo and I'll tell you the truths that threaten the status quo." CHS (12/15/24) "This is the core of the Attention Economy: the ultimate addiction is the addiction to ourselves." CHS (1/28/25) "If You Seek the Truth, Look for What's Taboo." CHS (7/18/25) "My definition of self-reliance: the less you need, the easier it is to get what you need." CHS (7/26/25) "Mastery requires reading and doing." CHS (7/28/25) "The replacement of authentic value, quality, agency, choice, trust, legitimacy and experience with self-serving facsimiles is the key dynamic of Ultra-Processed Life, my term for the present-day human condition." CHS (8/12/25) "Ultra-Processed Life replaces an authentic experience with a synthetic, simulated, commoditized, highly profitable version that's superficially attractive but destructive over the long term." CHS (8/12/25) "What we see everywhere is the replacement of authentic things--including democracy--with synthetic facsimiles designed to maintain the illusion of choice and value." CHS (8/12/25) "Sometimes certainty is the enemy we don't even see and uncertainty is our most faithful ally." CHS (9/20/25) |
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