What the Hell Is Going On?

Big institutions used to have unquestioned control over the narrative. Their dominance once seemed eternal. But now, they’re losing their monopoly over the dissemination of ideas.

To be sure, the internet has made some brands stronger, particularly in domains of incomplete information where people don’t know each other very well. The more an industry is about signaling, the more brand matters. That’s why brands matter so much in industries like fashion and beauty. Signaling brands are context-dependent. Signaling brands thri... See more

For years, factual disputes were settled by the Britannica in the living room. Now, they’re settled by instant Google searches, most of which lead to Wikipedia. Open the Britannica in your grandparents’ living room and you’ll find outdated facts and figures. Wikipedia, though, is always evolving. The shift from Britannica to Wikipedia is indicative... See more

As colleges lost their monopoly on information, college became less about learning and more about signaling. Whatever value they once provided is diminishing. Peter Thiel argues that college has become an expensive insurance policy for upper middle class parents who don’t want to see their children fall through the cracks of society.

brands are about trust and signaling. They’re a substitute for incomplete information. When information is scarce and asymmetric, consumers flock to trusted brands. But in many parts of the economy, when consumers have reviews at their fingertips, they no longer defer to brands when they make a purchasing decision.

For decades, editors left thousands of important stories off radio, newspapers, and televisions. Without awareness of an issue, people are uninformed because they don’t even know an issue exists. But on the internet, mistakes are made out in the open, in public, where everybody can see them. Transgressions are captured, shared, and amplified by the... See more

Fueled by economies of scale, the big got bigger. In 1958, the average company in the S&P 500 had been there an average of 61 years. Only the biggest brands could afford television advertising and endure costly funnel inefficiencies. As Charlie Munger, Warren Buffett’s longtime business partner observed:“In effect, if you didn’t have a big volu... See more

Growth in information, which has historically been (1) slow and additive and (2) only done by gatekeepers, is now (3) exponential, and (4) can be created and distributed by anyone.

The tide has shifted and people don’t trust authority like they used to. The same institutions that once commanded so much American praise have lost their edge and versatility. They look less like a Swiss army knife and more like your grandma’s dull, rusty, 19th-century butter knife. They’re slow and stodgy, bloated and inefficient.

. Britannica is organized by subjects, Wikipedia by hyperlinks. Britannica is organized in alphabetical order. Wikipedia is a web of references with no beginning or end. Wikipedia is made by the people, for the people. It’s a collective memory machine where knowledge is accessible to everybody with a smartphone