Sir,

You asked me to report to you on the character, functions and certain operational procedures of the State on the Luminiferous Star. Now that I have returned from my journey I am pleased to submit my observations to you.

My encounter with this place so far in the future – a place many imaginative dimensions removed from our present era – has left deep marks on my mind and body. I found an undoubtedly magnificent place. More often than I can convey, I witnessed dramatic, even revolutionary change. And yet, at the same time, so much of what I encountered felt familiar, as if I had encountered it before – perhaps in my dreams. Most striking has been the graceful co-existence between the natural and the human worlds on this distant star. The more perfect union of both realms – human and natural – has afforded more space, more resources and more happiness to all inhabitants. Alas, I am only able to provide a rudimentary sketch of the journey from here to there. And yet I know it took place – for life on the Luminiferous Star is but a sequel of ours here.

I believe my report holds truths that are pertinent for our age. It therefore transcends the mere recording of future arrangements, in part so different to ours, and offers suggestions for moving our present time towards that future, not over the course of centuries, but within a score – to achieve success before, in the end, our weaknesses may reassert themselves.

Yours faithfully,

I. The Beginning

1.       Yochanan stood before me on a crystalline winter day, his long, thin hands emerging from an old, oversized suit that clung to his willowy frame. As he looked at me, rays of white light ricocheted off the cold tarmac and the white lines that marked out its perimeter. The cold air crystallized my breath into ephemeral clouds. His gaze startled me, emanating with peculiar force from clear, grey eyes that shone like wet moonstone. “I am here to take you to the Luminiferous Star”, he said in a gentle, mellifluous voice. I cannot clearly say how I had ended up here, at the bottom of a hill rising along the boundary of the valley – a valley that had harassed my heart with so much fear. But then I saw its shoulders clothed in the radiance of the sun, whose radiance – so I thought – would serve to lead all men on the right path through life. At this my fear was somehow quieted. And just as he who, with exhausted breath, having escaped from sea to shore, turns back to watch the dangerous waters he has quit, so did my spirit, still a fugitive, turn back to look intently at the world behind me, that world that was now so hostile to man’s spirit. I longed to rest, but Yochanan interrupted my thoughts: “You don’t need to bring anything. We will be travelling for some time. On our way I will tell you more about our search for the Luminiferous Star and how we sought to configure and reconfigure a new state.” I asked: “Tell me, Yochanan: why me? Why should I go there, unworthy as I am?” Yochanan paused, looking at me and the muted grey sky that engulfed us. Then he replied: “You have been absorbed in confusion and fear, pursuing one thought hither, and another thither in a whirling wind of restless exploration. Over time, the waves engulfing your imagination have grown bigger, making it harder and harder to navigate the tempestuous waters. I am here to deliver you from these fears, to guide you through these moments of confusion.” He touched me with soft, lined hands that caressed my skin like rose petals. “Let me take you to a place in the future, a different world where we can offer you both sunlight and ice so sharp and clear that it cuts short your fearful paths. Like you, we were once overwhelmed by the debris of habit, convention and precedent, accumulated over millenia until they threatened to suffocate us. We embarked on the journey you will now retrace to shed the weight that blurred our vision, just as it does yours. What you will find is not flawless – it is not a Utopian impossibility, though parts of it are definitely Utopian. On the Luminiferous Star, you will find a world largely unencumbered – for now, for how long can it last? – by the confusion that has so constrained you.” Then he set out, and I followed him.

2.       As if bound to a pair of delicate, intricate wings – or perhaps it was merely a dream, who could truly say – we soared toward an orange sun that descended like a ripe, burning peach into an endless lake beyond the horizon. On one side, the vastness of blue space; on the other, golden fields of wheat and barley. My hands and feet touched the awns of the grains, their ears bending in the wind. Yochanan appeared beside me as, in silent, determined pursuit, we followed the curvature of the Old World, crossing into new space beyond. Gradually, we rose higher into the sky, passing the moons and the planets, the comets and stars. Gripped by an intense sensation of infinite space and breathtaking fear, tears streamed from my eyes like the rivers of time. We pierced through scattered clouds, searching for another world, the unseen star. Yochanan reached out to hold my hand, and together, as one being, one world, we surged ahead. A distant light, brilliant and intense, drew near and retreated again. The arrows of time spread out before us, offering countless pathways. Which was the right one? Perhaps we travelled for minutes or for a thousand years - it was impossible to tell. But when we finally reached a radiant square, a white hole spanning a million lifetimes, we plunged through it, cold, fresh air filling our lungs. The shining light drew closer and closer, a luminous sphere of gold, white and blue. The Luminiferous Star, Earth’s successor, emerged before us, reshaped and reimagined in a hundred million ways. Like a thousand winds we descended in a wide arc across the seas. The blue waves shimmered with Steller’s sea cows, their large, curved bodies gracefully dipping in and out of the water. It was both familiar and distant, veiled in mist. Then, as we came to rest and stepped ashore, Yochanan began to speak: “A long time ago, fear and anger came to dominate life. Powerlessness and corruption bred anger, anger bred strive; and strive bred fear, paralyzing the pursuit of knowledge and perfection, the very engine of the world’s revolution towards its ultimate destiny. After a long period of peace, during which economies and people recovered from the scars of terrible wars, new generations, unburdened by the memory of their cataclysmic destructiveness, sought to rediscover true meaning, the true spirit in life. This pursuit was neither new nor unjustified – it never is – but within the organisational principles of most societies at the time – and, above all, the State – it set off a chain of reverberations whose consequences could not be contained. The centralised state lost its authority as the maker and guardian of the law when certain primitive technological developments shattered what had in effect been a monopoly over the systematic distribution of knowledge. The contradiction between the state’s assertion of its historical authority and claims for prior-ranking autonomy and independence by a very large number of decentralised, distributed networks of social organisation ultimately led to the demise of the old central state.” My guide paused. “The original centres of state power became empty vessels. They still functioned, barely, but deprived of air, blood and legitimacy, they participated in the struggle of the many against the few only as lifeless symbols of a pre-revolutionary past that had to be destroyed. And so they were.”

3.       We boarded a sleek, oval-shaped machine that ascended vertically with silent thrust. As Yochanan mentioned our destination, it went off. Some time passed until we arrived at sprawling super-urban expanse, shaped like a star, where dense architectural polygons were separated by long, triangular fingers of untouched biosphere, reaching deep into the city’s heart. Clearly, commercial and residential neighbourhoods were intermingled in vibrant life, sometimes stacked in vertical layers of diverse materials that extended in tall skyscrapers to the skies. And yet, most of them were surrounded by pristine wood and marshlands, green meadows and clean, blue waterways for it was only a short distance from each metropolitan polygon to the next triangle of the natural world, offering respite to those in need and sustaining life amid the electrifying urban immersion. It was a simple, intelligent design. I reached out from our capsule and felt the voluptuous crowns of tall, elegant trees swaying gently in the breeze as we circled the star below. One of the natural triangles was a lush, tangled mass of moss-covered oak trees and rowans, interspersed with holly, hawthorn, hazel and eared willows; to my right, though distant, I could glimpse larches and sweet chestnuts dotted around open grassland, crisscrossed by paths leading beyond the horizon. The sun had risen, and I was saturated with the gentle, fragrant condensation of this curious, new world. We landed on a small, round plot and began walking from the edge of the city’s star-shaped rays toward its centre. Yochanan continued: “When the old world perished, we had to rebuild and reimagine a new one. At its core, we recalled, stood the State – a living but artificial entity, a sovereign and sometimes terrifying creature, a Leviathan even. Rebuilding the world required redefining the State, clarifying its purpose and its place in our lives – should it be at its core, surrounded by individuals orbiting like satellites, or should each person be at the heart of the world, supported by this edifice, the State? To do this, we needed to isolate and prioritise what really matters to us as persons in this life. Without a clear understanding of what really matters, our efforts to rejuvenate and rethink the role of our State on the Luminiferous Star would have been in vain. ‘What really matters’ must align with the essential shape, form and functions of the State. Each of us has different tastes and priorities – the texture, taste, colour, shape, smell, and origin of food are paramount to some whom I love, but they hold far less importance to me. Some treasure the smell and texture, the imaginative force, the comforting abode that books, thin, printed pages can give us. Some are drawn to rewiring transformer networks, others to hewing figures out of hard stone; yet others find solace and meaning in the solitary life of the desert monk. In redrawing, reconfiguring and rethinking the nature of the State on the Luminiferous Star we have sought to distil our diverse individual priorities into a small set of coherent guiding principles. These principles might then form the foundation of a large, stable and possibly timeless cooperative endeavour – a new State. It is both inevitable and essential that these guiding tenets be deeply grounded in ethical foundations. To attain universal, or nearly universal, acceptance over time they must be firmly anchored in a simple truth of near-axiomatic value. And yet they must be clear – crystal clear, leaving no room for misinterpretation. Few such principles exist. And when I speak of ‘principles’, I do not mean quasi-religious beliefs that cannot be questioned or reconsidered. Our ‘principles’ are positions that we believe can garner widespread support over time from reasonable individuals contemplating a framework for the State’s functional design and development – not, nota bene, the functions themselves, but the framework that would set out the guiding parameters and constraints for specifying these functions.” This struck me as a rational way of setting out the issue, but before I could complete my own thought, Yochanan anticipated it. “It is possible to express these foundational principles differently – what you will hear from me reflects how I articulate their essence. They are not based on a foundational constitutional document – because we do not have a constitution here on the Luminiferous Star (para. 114). Others can, and do, express these principles differently. Yet, I can say with some confidence, perhaps even some authority, that they are widely accepted and recognised as part of the substantive, philosophical foundation of the State here. For we discussed them at length on our journey here many years ago.”

4.       Yochanan and I strolled slowly along the edge of the grass and woodlands where we had landed a few moments earlier. To our right stood a towering sessile oak, its base surrounded by small, brown acorns that crunched beneath our feet as we walked. Long, curled branches hung over us, and with my hands, I brushed against hundreds of pale green, lanceolate leaves, and the sessile green acorns nestled among them. Then, on the edge of this remnant of the natural world, I could hear the hum, buzz and rumble of the metropolis just beyond a wide street, perhaps a hundred or a hundred and fifty feet away. I sensed Yochanan’s eagerness to leave the woods behind and return to the terrain he knew better. We picked up our pace, though it was nearly impossible to tell from Yochanan’s movement whether he was walking at all; he seemed to glide across the ground, at least, that’s how it appeared to me. As we approached the street, we passed a large, rectangular, grey block measuring approximately 10 by 10m in size. It looked beautiful in the early morning sun and the shadows cast by the surrounding trees. “This”, Yochanan explained, “is one of the fusion reactors that powers the city. Centuries ago, we reversed the centralisation of energy supply that began soon after the discovery of electricity. This centralisation led to significant supply stability issues when alternative energy sources, with smaller minimum efficient scales of production, came to dominate marginal supply. The resulting fragmentation of supply couldn’t be undone – the technologies that caused it could not be un-invented – so we had to reorganise the entire electricity generation infrastructure. In the era of fusion technology, which had long promised – and now delivers – our most vital source of energy, the reactors we need are much smaller and more efficient. It took about a hundred years to achieve the necessary miniaturisation and today most of us do not know, let alone recall, that these boxes were once a hundred times bigger. The process is simple, conceptually, although the engineering is complex. I can tell you more about the technology if you wish?” As I nodded with the enthusiasm of a child before a red current cake topped by soft meringue, Yochanan continued: “We heat deuterium and helium-3, two isotopes of hydrogen and helium, to plasma conditions – i.e. to such high temperatures that the atoms are stripped of their electrons, leaving a seething mix of electrons and ions – with the plasma confined by magnets in two separate, stable configurations. The fusion generator then accelerates them to collide at the centre at over a million miles per hour, where they are further compressed by a strong magnetic field to reach temperatures exceeding 100 million degrees Celsius. The fusion of these two isotopes then releases more energy than it consumes in the process. The subsequent expansion of the plasma alters the magnetic field, inducing a current that is directly captured as electricity. It is an efficient and remarkably effective process.“ I was astonished by the generator’s small size and its discreet location, almost hidden beneath the sheltering oak trees. “Placing a reactor here means low transmissions costs and easy access for maintenance,” and with a touch of wistfulness Yochanan added, “its dark, grey granite walls are rather beautiful, don’t you think?” I asked: “Where do you get the helium-3? Isn’t it extremely rare? I believe it was in the Old World, although I cannot be sure.” Yochanan smiled. “Indeed, it was. We produce a significant portion of it ourselves through deuterium-deuterium fusion, a natural complement to this fusion technology. In addition, to augment our supplies and scale up production we also mined it from a different star…its discovery allowed us to scale this fusion technology almost infinitely. Soon, you will hear more about that, too.”

5.       We arrived at a broad street that marked the boundary between a dream world of untouched oak trees and the metropolis beyond. The city now enveloped us. Towering buildings cast long shadows in all directions as the sun rose and set behind them, like mountain peaks at dawn and dusk. People were everywhere – so overwhelming, so life-affirming in a way entirely different from my first moments on the Luminiferous Star. Then, I had been surrounded by silence, water, fields of grass, air, and the dark, majestic trees. Now the heat and energy, the ambition and impatience, the twins of decay and recreation, the relentless noise and lingering scents all merged into a singular image of life as a quest for – or escape from – creation and reinvention, death and decline, love and contempt, vigour and disease, wealth, beauty, action, meaning and recognition. In one swift turn, as I looked around, I felt as though I could see and feel all of mankind’s history and future. “Here”, Yochanan said, glancing at me as he turned his hands to face the sky, revealing two long, raw scars across his palms, “here is, in one sense, a display and a manifestation of one thing that really matters – one of the guiding principles we believed could become, and indeed has become, a cornerstone of the State (para. 3).” These scars, I thought, were fresh. “The principle, if it can be called that, is rooted in the infinite variety and boundless multitude of mankind, all its individual men and women, girls and boys. Collectively, in our countless components – in our intellectual pursuits and ambitions, in our tastes, weaknesses and desires, our ignorance and talents, our failures, our noble acts and betrayals, our commitment to beautiful ideas and architects of their opposites – we all are highly differentiated, unique beings. In our lives, we come to know a handful of individuals with some depth, but even they, and certainly all others, elude much of, if not all, our understanding. Our real knowledge and understanding of all these individual persons, their lives and inner worlds, will always be non-existent or so rudimentary as to be useless. The first principle we agreed upon – and I should clarify that the State on the Luminiferous Star is not entirely derived from these core principles, but rather shaped by them, offering a perspective, a lens through which the State considers its real purpose both broadly and occasionally in specific contexts – is to recognise and honour the richness, often invisible, of each individual person. It is particularly important to us that this principle is upheld, especially when the State considers actions that might unnaturally disrupt the kaleidoscope of individuality. We cannot anticipate every scenario in which the State’s interactions with its citizens might fulfil – or violate – this principle, Principle #1. We are therefore cautious, sceptical, perhaps super-sceptical of roles, activities, and interventions that materially impact the way individuals choose to lead their lives. Each of us must be free to pursue her own vision of the good life – either because we know best what we really want, or because, if we don’t, we can still live as if we do. Replacing our incomplete, imperfect understanding of our life’s goals with someone else’s imperfect ideas is always the lesser course. This is why, in our own lives, we prefer to be left alone (“TBLA”).” Yochanan smiled, his lips forming a thin, elliptic line. “We resist real interference from others because they cannot know what matters to us, our priorities, preferences and tastes as well as we do. Our lifespan is finite, whereas the time after our lives end is infinite. We seek to use the limited time we have to shape and expand our lives in ways that only we, and no one else, can truly control. It is, if not a quest for immortality, then a search for what is ordinarily beyond our reach but one day ceases to be so: when what we once thought was impossible becomes possible. Preserving and protecting this quest – the pursuit of rare, high-value experiences alongside the more common, more regular, more pedestrian ones – is the most vital consequence of Principle #1: the recognition of the richness of the individuality of each person. It’s worth noting that throughout much of human history, Principle #1 has often been framed as the prior, higher-ranking value of the individual – one that supersedes the interests of any group, and even the State itself. It is not incorrect to draw a connection between our current understanding of Principle #1 and this historical perspective. As human beings today we still hold it to be true. However, this perspective also remains incomplete because it does not account for other forms of life: how does the individuality of person # 42 compare with the individuality of eagle #24? How does it compare with the individuality of all eagles? Principle #2 will help explain this (para. 15). ”

6.       We paused for a moment as five young children – sweet blond and brown and red-haired mongrels – emerged in frantic flight and shrieking laughter from a fruit and vegetable store. Their hands were brimming with chocolate bars and eggs; one of them clutched an apple in one tiny hand and a pear in the other. In hot pursuit came three women, neither young nor old, their breasts swinging from side to side as they shouted furiously at these little monsters…:” You come back here at once…”, along with some other commands that the children had no intention of obeying. They quickly vanished around a corner. I laughed. Yochanan laughed, too, his mouth and eyes expressing delighted amusement, before continuing: “TBLA is therefore the most valuable individual right – the right to be left alone. Clearly, this encapsulates the right to your person, life and possessions, long central to the conception of individual rights. However, TBLA might be both more expansive and more restrictive than the traditional notion of individual rights familiar from much earlier debates. It is more expansive because the right to TBLA implies the freedom to design and pursue a path in life – when you are left alone – that is entirely of your own choosing and making. The protection of this autonomy, the right of individuals to do their own thing, is thus central to our conception of a life worth living, and worthy of being preserved and protected by the State. It rests on the belief that action and engagement, rather than mere reactive inaction, are the spiritual nucleus of life. It reveals the State’s appetite and tolerance for small, individual risks that lack significant systemic externalities. These risks arise from action and activity: choices made by individuals to do, or refrain from, doing certain things in their pursuit of an idea, to build and create, to destroy and overthrow, to pluck and to break down. Such decisions signify involvement and engagement, which surely are intrinsically valuable to humanity and, therefore, worthy of the State’s support – by not being restricted or diminished, by being left alone to evolve and grow. In this ongoing process of change, where the old gives way to the new, we find our greatest opportunity to be truthful – to do what we believe is important, to affirm through our investments, commitments and beliefs how we should live. Our inclination toward creative action is not merely a desire to perfect the external world but also a pursuit of our own human spirit. Both matters equally.” Ahead of us, beneath the shade of a slender Eucalyptus tree, we found a small café with a long table where we settled down for some lemonade, baguettes, thick, creamy butter and gooseberry jam. Five or six others, young men in work clothes, were already sitting at that table, like us overlooking a construction site across the street, adjacent to an underground train station. The lemonade was delicious – tart and ice-cold, with condensation from the glass cooling my fingertips, allowing me to refresh my hot eyes. Our conversation, like theirs, was sporadic. We sat in silence for some time. I reflected on Yochanan’s observations. It was just after lunch, and the sun stood high and white, emerging from and disappearing behind thousands of pale herringbone clouds that scattered cold, grey light across the scene. The butter, too, was dotted with tiny beads of water, mirroring the altocumulus and cirrocumulus clouds that seemed to portend a change in weather – more rain, more wind, less sun. The baguette was crisp, warm and soft inside. Then I spoke: “The right to be left alone (TBLA) is clear – simple and clear. It also has, in some form, a long history. But is that the full scope of Principle #1, the sole consequence of the recognition of the richness of the individuality of each person?” Yochanan’s hands rested on the table, palms down, concealing his scars. Before responding, he looked at me. The depth and contours of his big, brown eyes were striking, framed by a thicket of lines and heavy bags, conveying a sense of both sadness and contentment – or perhaps they reflected a mind simultaneously grasping the pure, unblemished idea and the messy, imperfect reality of its manifestation. “In general, the right to be left alone has indeed been the primary right recognised under Principle #1, the recognition of the richness of the individuality of each person. There have been times when some sought to establish and codify additional rights, but that has not happened for a long time. However, today most of us believe – and I think rightly so – that the TBLA right, as Principle #1, serves as the central moral foundation of the State here on the Luminiferous Star. While it is possible to derive other reasonable expectations about our – everyone’s – position within this moral framework, these differ from those based on Principle #1. For example, because of the primacy of individual dignity, rooted in ownership of ourselves, it is reasonable to expect that others will not do to us what they wouldn’t want done to themselves, and to treat others as they would wish to be treated. It is therefore sensible to base our expectations of what others can and cannot do to us on a principle of reciprocity. This principle of reciprocity naturally constrains our actions and shapes our expectations. Yet, while Principle #1 embodies and expresses a fundamental right – to be left alone – the suite of reciprocal expectations that we hold towards each other might be better understood as social conventions, developed over time to enhance our longevity and quality of life. We might call these conventional rights, established by convention – distinct from Principle #1 fundamental rights. Some of these conventions are explicit and codified in law, while many others are implicit cultural norms. Humanity’s long history has created many relationships and behaviours that form the basis of ‘reasonable expectations’ for any one of us. However, these conventional rights differ from Principle #1 rights, which, unlike conventional rights, are not founded on reciprocity. The development – or perhaps even the design – of the State had to involve the protection of Principle #1 rights (the right to be left alone) while also supporting certain conventional rights, acknowledging that the latter can evolve over time. This, I would say, forms the arch of our explicit involvement in the codification and supervision of a system of rights.”

7.       A young man joined our table, impeccably dressed in a cream suit, with a tie gliding neatly down across the centre of an immaculate white linen shirt. He had only one arm – his empty sleeve discreetly tucked into this left pocket. It was easy to miss. On his remaining hand, he wore a beautiful jade ring, so clear and flawlessly polished that I could see his face reflected in it, upside down, stretched into the elongated shape created by the curvature of the sphere. Yochanan acknowledged him briefly, with a subtle but unmistakably ecstasy – his eyes ignited like a flame, upward and outward, radiating real love. The young man, too, seemed to shine, a bearer of an inner light. “It’s worth pointing out one particular feature of conventional rights,” Yochanan continued, despite the evident pleasure he took in the young man's presence, “a feature that is both important and easily forgotten as time passes: it is best not to take them for granted.“ Despite his joy, Yochanan resumed his speech without any further sign of distraction. “Among ourselves we might feel that certain conventional rights are, or should be, fundamental rights. However, because of their reciprocal nature, this would imply a claim to some portion of another person, which, prima facie, would violate the TBLA right – the right to be left alone. Conventional rights – say, a “right” to education or healthcare – are agreements reached through negotiation, often over extended periods, because they are believed to provide significant value to many people, both alive and yet to be born. Yet, these rights are ultimately institutional constructs, the result of a particular negotiation among reasonable people. Different outcomes are always conceivable, and indeed, later generations often arrive at different conclusions and implement different institutional arrangements. Therefore, it would be unwise and misguided to take conventional rights for granted. When we take things for granted, we are essentially insisting that the future must be like the past. But this is a foolish notion. It is better to be prepared, in some way, for the end of the world rather than assume its eternal continuation. Throughout our own lives, many smaller worlds come to an end all the time, and others are born. We will find greater peace, both in the world and in our minds, if we acknowledge that nothing is permanent while also appreciating that certain positive conventional rights, along with their associated institutional infrastructures, may not endure forever. It is wiser and better not to take anything for granted. Here, Yochanan glanced at the young man sitting a few paces away from us at the table, “Of course,” he added, “I am the first to admit that it is almost impossible not to take some things – or at least one thing – for granted. True love, for instance, often tempts us into taking what we cherish for granted, and this is not prudent either. It is difficult therefore to completely adhere to this fundamental truth.” The young man, imperceptibly, almost invisibly, nodded his beautiful head in quiet agreement.

8.       The sun vanished behind the clouds, and for a fleeting moment, a cold wind swept through the city, chasing a pattern of long, rectangular shadows through its streets and across its rooftops. When it stopped, it was almost silent. Yochanan rose from his seat, his wiry frame drawing a sharp contour against the grey sky. Then he said: “Please excuse me for a moment”, and with a few quick strides, he reached the far end of the terrace where the young man, with his one sleeve tucked into his jacket pocket, awaited him. Though I could not hear them, the scene was clear and vivid. Yochanan placed his hands – long, thin and etched with deep, blue veins, and two scars – on the young man’s shoulders. He spoke to him intensely, his eyes shining like burning oak trees. After a few minutes, the young man – tall, lithe, confident – lifted his one arm, cupped Yochanan’s face gently in his hand, and kissed his eyes, his brows and his temples. Then they disentangled and looked at each other. Trust, truthfulness, authenticity, love: that is what I saw. They stood there for a long time, communicating as much with their tongues and mouths as with their eyes. Yochanan grasped the young man’s hand firmly, holding it with a deep, lingering grasp. When the sun briefly broke through the grey clouds, the young man, now suffused in a radiant light that quickened my heartbeat, walked away and disappeared. Yochanan remained standing there for a moment. When he returned to our table, we crossed the street together in silence. Nothing in Yochanan’s expression betrayed the nature of this encounter. Gently, he guided me towards the entrance of the train station. Of course, I was eager to know who he had spoken to – but not yet. Inside the station, after a relatively short wait, we boarded an elegant train – a sleek, dark tube with hundreds of small, rectangular windows. As we travelled at great speed underground, these windows displayed the landscape above. “We can transmit the world above down here into these trains,” Yochanan explained. “So much of our transport network is underground, and as we desire to see the air and life on our journeys, a simple piece of technology combining real-time video feeds, GPS synchronisation and transparent OLED displays connects us with them. These trains travel through airless tunnels at a speed far greater than the speed of sound. For a long time, the development of new space- and aircraft overshadowed train travel, which was largely neglected. But then, one day, we developed the technology to build ultra-long tunnels at much lower cost, maintaining them in a constant vacuum with minimal effort. Today, a very large part of intra- and inter-continental travel – about 50-60%, I would estimate – is done on vacuum-trains of this kind. It takes about three hours to cover a distance of 8,000km – a speed that is not only physically possible but also comfortable for passengers.” When we arrived at our destination, we emerged into the light and air of rugged mountains that rose up from the land like shards of glass. We stood high above the world, surrounded by a sea of blue harebells. Their long, trailing stems swayed gently from side to side, causing the clusters of bell-shaped flowers to tingle like a silent brass orchestra. All around us stretched hundreds of miles of pure, translucent air. I breathed in deeply and exhaled the sentient remnants of my old world.

9.       We left the station and turned towards a mountain, glowing like pink sapphire in the early evening sun. “We will use these trains again on our journey. But for now, let us walk up to that peak; it won’t take long. There, I have something of interest to show you.” We hastened along a path that wound gently upwards, bathed in the gentle sheen of Rhododendron and azaleas. As we walked, Yochanan continued: “One day, you might hear more about the young man I spoke to earlier. He personifies something that complements and lives alongside Principle #1 and the conventional rights we discussed earlier (para. 6): our commitments. We have commitments to other people.” Yochanan paused, taking my arm and directing my attention towards a magnificent red kite gliding from the mountain peak. It circled above us three times, studying us with an intent, curious gaze. Then, suddenly, it lifted its head as if to encourage us along, and then it vanished so quickly I could not follow it. “Some of our commitments”, Yochanan resumed as we followed the path of this magnificent bird, “we inherit without explicit consent: caring for our parents in old age, looking after our younger brother. Others we embrace voluntarily: helping those in need, raising our own children. Still others we assume indirectly, perhaps by stepping into a contract agreed upon by others, like tending to the garden of my neighbour’s neighbour when she is unable to fulfil her promise. Our lives,” he continued, “are woven from a web of commitments – contractual and explicit, promissory and implied, natural and artificial, some more significant than others. Many commitments are broken, yet they bind us, nonetheless. Contracts certainly do, and so do the promises and pledges we make to others. Some commitments bind so tightly that they may take precedence over Principle #1: TBLA – the right to be left alone. We often accept a dilution of that principle – the subordination of our own person in some form– when fulfilling a prior commitment, such as protecting the lives of our parents or children. Many, perhaps most of us, would offer our life, our free and independent self, to a child we are committed to – or even to a stranger whose life is in imminent danger. Indeed, we might do so for someone whose life is not in danger at all but who nonetheless needs our help. In such situations, it would be absurd to discuss the primacy of the individual – Principle #1 – except insofar as it relates to the superior primacy of someone else, perhaps not forever, but for the moment. A desire to be left alone can evaporate like the scent of Bergamot as the needs of others impose themselves upon us. It is important to remember this fragility – our own and that of others – and to recognise how our lives can become more beautiful, more consummate, more complete when we suspend our right to be left alone and instead insist on not being left alone, for the sake of supporting the wellbeing and happiness of others. Or to make the same point slightly differently,” Yochanan added, “the TBLA sentiment, the crucial component of Principle #1, is perfectly compatible with an extreme – rare and unusual – sentiment such as ‘I will devote my life solely to serve others’ or ‘the well-being of strangers whom I will never meet is more important to me than my own’. These priorities, while significant and valuable, may occur more frequently than their more cold-hearted, more cool-headed – and equally legitimate – counterparts. Those who hold such views will also desire to be left alone whenever someone arrives to advise – or even instruct – them how to lead their lives differently. They, too, wish to be the masters and judges of their own lives. This is the essential point.”

10.     “And yet, Yochanan, what exactly do we owe to others? What debts and obligations call upon our commitment?”, I asked. He replied: “It is indeed challenging to map the concept of a ‘debt’ or ‘obligation’ in any meaningful, practical sense – moving away from abstract hypotheticals – beyond a small circle of acquaintances plus the occasional random encounter. Within this perimeter of our social existence, debts and obligations are the first derivative of commitment: I owe you something because I am committed to you, and that ‘something’ can be a lot in such circumstances. However, when we move beyond this perimeter of visible relationships to the world at large or to a realm where humanity in its entirety becomes our – ethical – focus, it becomes exceedingly difficult to anchor any debt or obligation to personal commitment: the beneficiary of my generosity could be a single, randomly selected stranger, or seven billion inhabitants of the Luminiferous Star (or its predecessor, the Old World) to whom my generosity can make no meaningful difference. Another potential source of obligation,” he continued, “is reciprocity – I owe you something in return for what you have done for me or for what I expect you will do for me. Reciprocity, like commitment, generally presupposes some form of personal relationship; without this connection, neither has much value because you don’t know who you are dealing with. A third origin of obligation might be pity – at the suffering of mankind at large or of the unknown sufferer on the street – possibly reinforced by the awareness that my own chances of falling into destitution are not zero, and that I, too, may one day have to rely on the pity of strangers. This includes all those I will never meet – a wholly abstract set of relationships in many respects. However,” Yochanan added, “it is questionable whether pity can be equated to an obligation based on mutuality. Reciprocity is fundamentally a conditional relationship: I will do X because you have done, or have undertaken to do, Y. Pity, on the other hand, is unconditional – it requires no prior or future reciprocal action from the beneficiary of my compassion. It is an absolute expression of concern for the fate of others rather than a manifestation of a quasi-contractual exchange of specific commodities. While pity and compassion may be a foundation of social interaction, they are not an expression, or the representation, of a debt that must be repaid.”

11.    We were nearing our destination – just beyond the hill, I sensed, was what Yochanan had been seeking. “Strictly speaking,” he began, ”the extent of our obligations to others is quite limited. The limitation is personal – beyond the bounds of our personal, sometimes close, at times more distant relationships, we owe little to anyone. Our feelings of love, charity and compassion, a sense of humility in the face of uncertainty, and other ethical imperatives – such as the notion of valuing lives of strangers as we do our own – can often elicit the same response as a personal debt I may owe to a close acquaintance, an obligation born from commitment. However, these are really expressions of a virtue – charity and love, hope, faith, for instance – rather than the repayment of any real debt. Acts of charity carry profound moral power – at least, we believe so, since life is fraught with risks that can crystallise in unforeseen and severe ways, much like death itself, as expensive, consequential risks are an inevitable part of our lives – but they generally do not arise from contractual relationships between independent persons, unlike actions grounded in commitment and reciprocity. A breach of such contracts is an explicit repudiation of a relationship that we have deliberately and personally established or inherited as independent individuals. Relative to the pool of beneficiaries, such contractual failings must be more consequential: my charitable deficiency for some cause X may be compensated by the generosity of person Y – there are lots of Y’s – but no one can compensate for my failure to honour a contract with my neighbour, for such relationships are few and difficult to replace. This is why the fraudulent and traitors, all those who abuse what is so uniquely human – our capacity to choose whether to behave virtuously or not – remain so damned at the bottom of hell. I realise”, Yochanan continued, sensing my unspoken objection, “that any concept of virtuousness presupposes a capacity to choose – in other words, free will. Many, having refashioned the human brain as a computer network, have argued – and still believe today – that free will is an illusion, that our minds are deterministic, with every action and belief traceable to a single origin, or at least a probability distribution of origins somewhere in the genetic-cum-physiological network of our existence.” “And doesn’t that dilute our capacity for moral agency?” I interjected. Yochanan looked at me with a blend of love and understanding: “I am afraid this debate remains unresolved – a clash between philosophers enamored with clever hypotheticals, and everyone else who believes that, since we can choose to lift our right arm a hundred times, it is our (free) will that drives this action. Regardless of the mechanics of the cellular/genetic automaton that facilitates such repeated up-and-down movement, we believe in free will and the agency it bestows upon us. Consequently, we act as if we possess it – a pragmatic stance that, in my view, holds the benefit of being true without requiring a cellular (or genetic) explanation for the chain of command from my neocortex to my right arm. In any event, we may hold that breaches of trust and contractual relationships are among the greatest human failings, perhaps even more so than a lack of charity. One could argue the opposite – if we believe in believing in free will. However, when considering the role of the State – our primary concern, rather than the nature of our personal relationships – we concluded that charity is not a scalable sentiment, whereas contractual performance is. Contracts require no unconditional commitment, only adherence to certain rules which gives them a mechanical and therefore scalable quality. Thus, a network of social relationships that balances a recognition of Principle #1 rights with an appreciation for the role of commitment and reciprocity therefore seemed to us a suitable and realistic basis for “State design”, if I may use this architectural metaphor. We believe this framework can provide a basic ethical foundation for a State, one capable of garnering and sustaining cross-generational support. Incidentally, this also implies that the State, in certain key respects, must be ‘small’ – though what smallness really means we shall find out in due course.”

12.    I remarked, “When life is unpredictable, it may be wiser to rely on a small set of simple rules rather than counter chance with chance – favouring contractual, reciprocal undertakings over unconditional, random gifts.” Yochanan nodded in agreement: “This is particularly true if you believe that nothing should be taken for granted – except perhaps what we have agreed to or committed to in a contractual sense, explicitly or implicitly. Even then it is generally wise to be cautious. We cannot take the goodness of people for granted, nor can we rely on their sense of virtue or charity because it is often difficult to determine what course of action is truly good, virtuous, or charitable. So much depends on the unique circumstances of specific events and individuals. The virtuous man might act selfishly in the face of great misfortune; the self-centred woman may display unexpected compassion for reasons of her own. While exhortations of certain codes of conduct can be broadcast across all of society, it would be both ungenerous and naïve to believe this will, or should, create specific or general obligations. Such expectations might be rational if these messages were confined to, say, my own family where the likelihood of reaching the intended recipient and eliciting a positive response is naturally higher. Thus, it is unwise to assume – to take for granted – that our micro-network codes of behaviour can be easily applied to the broader canvas of society as a whole. This does not imply that general ethical principles, which apply to and should bind everyone, are meaningless. They provide a framework for addressing problems of day-to-day moral dilemmas and guide our behaviour, particularly towards those outside our micro-networks. However, when it comes to specific engagement with others, it is best to invoke concrete contractual obligations rather than somewhat abstract ethical guidelines to regulate affairs. Moreover, the larger the number of people to be bound contractually, the more specific and narrower the basis of the contract must be. I can call upon my son to act charitably toward our neighbour and hold him accountable if he fails to do so. I cannot reasonably extend this expectation to all citizens of this Star. This insight was of great significance when we began constructing, block by block, code by code, brick by brick the Luminiferous State – as we have occasionally called it since the beginning of our journey.” Yochanan chose his words carefully, yet it was evident that his thoughts were perfectly clear. He continued: “The primary responsibility for maintaining behaviours that are dynamically stable – those that endure from one generation to the next because of their efficiency and effectiveness in a cooperative social context – resides in micro-networks. They find it easier to enforce and observe both explicit and implicit contracts. Consequently, certain social arrangements – binding laws and non-binding, but effective norms – are more easily created, monitored and enforced within smaller social cooperative units. This comparative advantage in social contract management – is that even a term?”, Yochanan paused to speculate, “positions micro-networks as the most effective candidates for stable cooperation machines, entities that can evolve their behaviours to adapt to new requirements without causing the dissolution of the networks for which these procedures are designed. Now, given the diversity of human experiences – different places, facing a diverse range of circumstances with a multitude of ideas about what is right and good – many distinct micro-networks have naturally emerged over time, each with its own distinct behaviours, laws and cultural characteristics. Perhaps the most elegant, beautiful feature of this original, original origin of the State is that the multiplicity of these networks has been essential to both their individual and collective stability, much like a coral reef thrives through the intricate support of its myriad coral polyps. Not only are micro-networks more likely to enjoy cooperative contractual stability, but the existence of many such networks also fosters stability between them. Those who disagree with a particular rule in their original network can find a home in another one, while those simply seeking a fresh experience have viable alternatives. One network can learn from another one: “We should adopt Network 42’s way of managing intellectual property rights – their rate of innovation is much higher than ours!” Competition between micro-networks can therefore generate a rich variety of social arrangements, offering a combination of cohesion (for permanent network members), optionality (for those moving around between networks) and stability (challenges in one network are not systematically dangerous when many other networks exist in parallel). This co-existence of micro-networks influenced our original thinking about creating a State in two key ways: first, it is optimal to root the original force of the State in these micro-networks – not its ultimate force or sole power, but its origin; and, second, we should harness the natural cooperative dynamics that evolve between them. Our task, then, has been to maintain a connection to this original source of power, even as the size and functions of the State have expanded beyond the confines of its early micro-networks.”

13.    We reached a large, circular plateau at the apex of our ascent. It was late afternoon, and the sun stood at an angle of ca 30 degrees, painting the sky in golden colours at the edge of the horizon. Despite the lingering daylight, stars were everywhere, glittering like small pots of silver dipped in water. In the centre of the plateau stood a large building in the shape of a horseshoe. At its heart was a large cube with long windows on each side, men and women walking in and out in perpetual flow. In front of the building, just across from where we arrived, five long runways stretched into the distance, each extending a mile or so. Every hundred metres or so, hemispheric sub-stations covered in glass domes opened up access to tunnels whose purpose was not yet clear to me. Surrounding the runways and buildings were green meadows of long, hardy grass interspersed with thin blue flowers that swayed in the wind, creating small waves cascading down the runways towards the horizon. Suddenly, five or six aircraft arrived, long and slender, about fifty meters in length, with four windows at the front. Moving at great speed through their air, they landed swiftly and disappeared into one of the sub-stations flanking the runways. “Centuries ago, we established contact with an exoplanet in a remote galaxy. This is the central exchange hub. The encounter has been invaluable to us and, as you can imagine, quite extraordinary. Shortly before discovering that planet, we succeeded in developing anti-matter propulsion, a technology that allowed us to travel at very high speeds – not quite the speed of light, but far faster than previously possible. This greatly expanded the range of the universe we could explore. On one such journey a crew – who themselves never returned – discovered a fertile, resource-rich exoplanet. We named it Beatrice.” The sun was now setting, and the golden crescent above the horizon deepened to a bright red, like fresh, thin blood spread across the atmosphere. “For a long time, we believed the likelihood of discovering extra-terrestrial life was infinitesimally small. And, indeed, we didn’t discover human-like life on Beatrice; no intelligent, sentient beings greeted us. There were traces of prior human-like life – small, fossilized ear bones, tissue that may have been part of a heart muscle – but nothing more. However, we did find two remarkable things: the first was intelligent machines, including the oblong objects you saw landing on the runways. These powerful devices are capable of evolving and improving over time. They draw on collective learning experiences, memory, and strong predictive power to solve complex new tasks. Critically, they possess nano-scale production and reproduction capabilities. This means they can repair themselves and command a vast array of tools with which to build things, from mining and excavation equipment to energy generation and transmission infrastructure. The Beatrice machines have developed methods to harvest all their energy needs through a dense array of solar panels that encircles their mother star like a swarm – enabling them to operate perpetually, continuously renewing and reinvigorating themselves. The second discovery we made on Beatrice was a pristine natural world. The entire planet is enveloped in air and covered in water, woods, and grasslands. All of it is home to an extraordinarily rich vegetation, seas and lakes, woodlands and rocky mountains, deserts and wetlands, all teeming with quite exquisite wildlife: water beetles, dragonfly nymphs and other insects that fly through water with wing-like appendages; large earthworms and sophisticated ant and termite colonies recycle the soil; lungfish, capable of surviving both dry and wet seasons by alternating between gills and lungs, live for more than a century. Herbivores move slowly, almost thoughtfully from one buried nest to another, protected by their armoured skin, while clever parrots have developed speech like that of humans. Beatrice is alive with the sounds of chirping birds, croaking reptiles, stridulating insects, wind sweeping through the trees, rain cascading from one layer of leaves to the next, and hot air resonating across large planes – it is the most complete natural world we know, by some distance. These two discoveries – intelligent machines and an extraordinarily rich flora and fauna – are of immense significance, tangible and intangible, to us on the Luminiferous Star.” Yochanan paused and leaned back to cross his legs. Evening came, and the first cloaks of the sparkling, dark night enveloped us. The stars shone brighter, clearer and somehow more alive than I had ever seen them on my planet. Beatrice machines arrived and departed every few minutes, streaking across the night sky. A green-blue-orange aurora descended from above, wrapping itself around the northern sphere of space, undulating like a giant silk curtain over the past, the present and the future.

14.    We sat in silence for some time, watching more Beatrice machines landing and disappearing into all these sparkling, luminous sub-stations. Others emerged and took off for their return journey to Beatrice. It was a metronomic operation. Then Yochanan spoke: “These Beatrice Terminals – of which we have about a hundred scattered around the star – serve as our distribution centres for the large amount of raw materials we receive from Beatrice. Each terminal has about 300 sub-stations, which are entry points to an extensive subterranean transport system that criss-crosses the entire Luminiferous Star at a depth of 200-300m. Through this network of tunnels – the same technology, incidentally, that powered our train journey here (para. 8) – all deliveries are dispatched to their destinations – ports, factories, warehouses, and other wholesale delivery points – promptly upon arrival. The Beatrice machines return with waste collected from their drop-off points, which is sent back to Beatrice. The system works extremely well. We also operate our own, unmanned Beatrice planes, powered by fusion or anti-matter propulsion engines, giving them an almost infinite range and therefore well suited for trips to Beatrice.” Based on the frequency of landings and take-offs, and their average travelling speed, I estimated that at any one time 7,000-10,000 planes were airborne, producing c 8,500 landings per day or a bit more than 2 per hour per sub-station. With an average carrying capacity of 80 tonnes for each machine, this meant that ca 680,000 metric tonnes of materials arrived at each Beatrice Terminal daily, totalling ca. 25bn tonnes annually. Yochana told me accounted for about 25% of the resource requirements of the Luminiferous Star, significantly reducing the need for its own resource extraction. It was an impressive infrastructure. “One particular challenge we were able to overcome by accessing these raw material supplies”, Yochanan continued, “was the poor quality of substitutes for most sophisticated metals we used in our economy. After decades of exponential growth in processing capacity and performance quality, maintaining and enhancing the performance of core technologies became increasingly challenging due to the technical limitations of the metals we were using. As these constraints became more pressing, our search for substitutes grew more urgent, yet many metals lacked viable alternatives. The superior quality of the materials we found on Beatrice – some of which also existed on our Star, while others did not or, like Helium-3 (para. 4), in only very limited quantities – has allowed us to significantly enhance the performance of most of our technologies, enabling us to achieve more with less. This was the first of two transformations in resource consumption on the Luminiferous Star. The second transformation stemmed from advancements in developing synthetic substitutes for several key metals, including certain rare earth elements, lithium, a range of platinum metals such as palladium and rhodium, phosphates and even sand – the most crucial resource by volume. Although economically viable technologies for synthesizing these materials had emerged long ago, scaling them up and diversifying their application took further time. We also developed entirely new materials – silicon carbide-infused magnesium, for instance, which proved to have a wide range of applications. Our synthetic production now covers another 25% or so of our total annual resource needs. In total, we now only need to mine or extract about half of our annual material requirements from this Star. It used to be 100%, with everything dug out, squeezed from, made of this Star in some form. Today it’s just half. This is why”, he said, reclining on the bench with a beguiling smile, “it is possible for us – humans, that is – to live on only about half of this Star. The other half is, you might say, rather like what we found on Beatrice: untouched, complete, original. Once, only ten percent of this Star’s land and waters were as original, complete, and untouched – untarnished, immaculate, virginal natural life; then one quarter, then one third. Today it is about half.” He paused, looking around, then back at me. “Who knows whether what we have here today is just a precursor to the life we can see on Beatrice. Time will tell whether life on the Luminiferous Star will – or must – include human life.” He leaned back, stretching his arms along the bench, the starlight illuminating the ragged scars on his palms. “Time will tell.”

15.    Above us was the sky – a blue and grey, white and red, black, luminescent sky of the evening, the coming night, the departing day. I could hear the faint humming noise of the Beatrice machines, but even more pronounced was the sound of grass around us, whispering and murmuring softly into my ears and through my body. And then there were the Black Rosy-Finches – so many that their clear, melodious warbling flowed in gentle waves across the fields surrounding the station. Their dark, slate grey plumage, adorned with coral-coloured patches on their wings and tails, looked like a regal cloak. Were they the real kings and queens here? I could hear thousands of them, or so I thought, and could see many more, too numerous to count, flitting between the tall grass. “The discovery of Beatrice – an event that was as much an arrival of our civilisation in a new world as it was a planetary discovery (and who, really, discovered whom?) – crystallized Principle #2 for our re-design, the creation of the Luminiferous State (para. 5). While some conceptual origins of Principle #2 go back much further, its real shape and true meaning only became clear when we experienced the abundance of that planet compared with ours. It led us to an essential realization – essential for purposes of redefining the scope and functions of the State: what should it undertake, and what should it refrain from? Life on this Star should not be seen as a testament of human supremacy over other forms of life but rather as a very large, interconnected network, a network of life, in which each node has functional equivalence. This is Principle #2: the recognition of life on this Star as a network of functional equivalence encompassing both humans and the natural world. Functional equivalence means that every node is equally important – the destruction of a node is harmful regardless of whether it is honeybees or a tropical rainforest. A node can only be damaged, or its value diminished, if doing so maximises the value of the network as a whole. A small beehive should not be disturbed if it violates this principle, but a large forest may be altered if it does not (or vice versa). We call this the MiniMax Condition: harm to any node of the network should be minimised and is permissible only if it maximises the overall value of the network. Some have argued that this is insufficient and that we must acknowledge the absolute equivalence of all lives, as if MiniMax should be MaxMax – suggesting that the life of a bee is as worthy of protection as the life of a person. However, this view is misguided. We have designed a State for people, just as a colony of bees builds a state for bees. Our obligation to human life must always be acknowledged, in accordance with Principle #1, but this occurs within the framework established by Principle #2. Principle #2 is not perfect, but it is good – and I believe it is good enough, given what it has helped us achieve since our arrival. Over time, Principle #2 has become the cornerstone of our conception of the role of the State in this regard – and, as you will see, it underpins one of its central political roles, the management of the natural world (para. 84): it is clear, without being absolutist; effective, because it uses a model of life that is more accurate than any other; and, most importantly, popular because of its intrinsic, intuitive merits and the ease and effectiveness with which it can be – and is – implemented. It is a form of all-life utilitarianism that permits preferential treatment of one species over another, provided this does not compromise the overall stability of the network of life – man, plants and animals alike – on this Star and therefore satisfies the MiniMax Condition.” And in between the stars of the coming night Yochanan pointed me to an image that helped me see what he thought and said.

16.    More machines came and went, like a small parade of grandeur. I wondered if I could spot Beatrice among the tiny dots in the sky. “It’s time to get something to eat and drink”, Yochanan said, mirroring my thoughts. “Let me take you to a little downtown spot with simple, delicious food.” With one of the flying capsules we had used earlier, we ascended through an arc of densely packed stars, leaving thin, white trails in our wake. When, after a while we descended slowly towards the sprawling city, the moon, pale and benevolent, hovered above us, inviting us to join him – light and shadows – on this nighttime journey through the streets of the metropolis, the urban-and-nature polygon. We flew so low, I could almost touch the trees that were everywhere – some oaks, field maples, rows of rowan trees, their clusters of orange-red berries providing nourishment for birds and mice. Skyscrapers made of wood and steel gently swayed in the wind. “It’s just a short walk from here”, Yochanan said, leading me along a narrow path that wound onto a crooked street lined with food stands, bars, small shops, and curious machines that seemed to operate as refuelling and charging stations. We soon arrived at the restaurant, where Yochanan guided me to a secluded garden at the back. Many of the patrons discreetly acknowledged Yochanan with subtle nods. Who, I wondered, was he really? When we reached our table, we found crisp, chilled white wine and glossy, oily almonds awaiting us. From my first sip, I felt a gentle inebriation take hold, as if a cold glacier were melting through my lungs and coursing through my veins.

17.    Yochanan, too, drank some wine: “Let me resume the story from where we stopped when we reached the Beatrice terminal (para. 12). The central issue of collective organisation is the following: how can each person’s Principle #1 right – the right to be left alone as an idiosyncratic, unique individual – be reconciled with its opposite, Anti-Principle #1, which involves the extension of individual commitments to others with whom we don’t have direct relationships. In what circumstances will individuals who may naturally believe in Principle #1 also support Anti-Principle #1, both as members of a micro-network and when multiple micro-networks form a – let’s call it that – a macro-network? The first question is under what conditions such collective commitments can be justified. The second question is whether such generalised, as opposed to direct, personal, commitments can be robust. Robustness, not stability, is crucial. We need an arrangement that can withstand shocks, even if it displays volatility on occasion, as opposed to a seemingly stable system that disintegrates in the face of minor disruptions. Stability…..”, Yochanan rolled his eyes just a little bit, “….is elusive, overrated fog that never exists in real life. Now”, and he reached for more of the cold, golden wine, “every person and life has meaning an sich, without being instrumentalised for someone else’s purpose. We desire and expect to be treated as complete, independent beings. Despite the uncertainty about our life trajectories and our capacities to influence them as independent agents, we want to live our own lives. To do this it is essential to believe in our ability to do what we want to do (to act as independent, sovereign agents), and for that we must believe in our capacity to choose, and therefore in free will. I would say our belief in free will is essential for our dignity as persons (para. 11). However, our dignity and freedom – to choose, act, and live as independent persons – are sometimes constrained by our commitments to others (para. 9). Nonetheless, our commitment to our own lives takes precedence because (a) Principle #1 establishes the primacy of each person within their own life over that of others, and (b) we are less likely to err when striving to perfect our own lives compared to those of others. If I am to extend a commitment to an unknown person, someone who may always remain unknown – if I am therefore either to subordinate myself in some part to, or share my person with, someone else – then this should satisfy three criteria: (i) the condition associated with such a commitment must be specific; (ii) there must be co-investment by those receiving or asking for such a commitment; and (iii) the relationship must be reciprocal. These conditions are typical for mutual insurance contracts: if an insured event X occurs there will be a payout, but not otherwise; to obtain insurance protection the insured will need to retain a first-loss exposure to mitigate moral hazard by having ‘skin in the game’. Finally, my claim for insurance protection is as valid as your claim, provided the insurer is sufficiently well capitalised to handle sequential or contemporaneous insurance claims adequately. We have found that mutual insurance arrangements can be a robust basis for many collective partnerships. Even when small, they can be strong enough financially to handle a wide range of risks, exploit significant economies of scale from sharing and pooling certain risks collectively, involve co-investment and hence skin in the game, and are fundamentally reciprocal in nature. Reciprocity, specificity and co-investment are three necessary conditions for robust collective partnerships, and mutual insurance structures incorporate these principles in their financial arrangements. Reciprocity is likely the easiest condition to meet: it ensures that if person A’s claim is honoured, co-funded by person B, then person B’s claim, now co-funded by person A, will also be honoured. The capital requirement for such insurance policies can usually be calculated with reasonable accuracy provided we know enough about the parameters of the particular risk that is being insured. Specificity ensures that insurance cover is narrowly defined and not misused, thereby facilitating the crystallization of the co-investment condition. These features make specificity, co-investment and reciprocity the three contractual conditions for robust mutual insurance.” Looking at me across the table amidst the lively, distant rumblings of a hundred men and women talking and laughing, Yochanan then went on to say: “And you might already see how these three conditions might suggest “smallness” as an important parameter for a State, and possibly the optimal State (para. 11).”

18.    Yochanan absentmindedly rolled around a handful of almonds in one hand, picking them off one by one with the other. I did the same, savouring each slowly one by one. Then he continued: “However, there are also three technical conditions for mutual insurance to function effectively: first, participants must have a certain degree of risk aversion; without it, there will only be self-insurance, but not mutual insurance. Second, the expected cost of the events being insured must be high. Third, the cost of insurance itself must be reasonably low. These conditions imply that it is better for insurance schemes to be large rather than small and provided the first two technical conditions hold this will generally be the case: only insurers with a sufficiently large number of members will have the capital to cover claims costs at premiums that are affordable to its members. In essence”, Yochanan leaned back, taking one more sip of golden wine, “the technically optimal insurance pool will generally cover everyone who is exposed to the insured risks. On the other hand, small groups have a natural advantage when it comes to satisfying the three contractual conditions necessary for successful mutual insurance schemes. Reciprocity is more natural when members regularly interact or least have the prospect of doing so, making it easier to monitor and enforce reciprocal contractual obligations. Specifying insured events is easier in smaller pools with more homogenous and uniformly distributed risks. Finally, co-investment obligations are easier to arrange, monitor and enforce. These characteristics of small-group contracts are evident in our everyday lives, where commitments between friends and neighbours are naturally stronger than those with distant, unrelated individuals. Staff engagement in small companies, where everyone owns equity, is typically far higher than in large corporations where equity ownership is more thinly distributed, and the value of individual stakes is smaller. In LargeCo, my laziness may not materially affect overall value, so whether I work or play poker makes little difference. But in SmallCo, where commitment is more direct and impactful, making an effort has a more immediate, more visible pay-off, and the marginal cost of not reciprocating is high. In short, a breach of contract in SmallCo will be quickly noticed and carries significant consequences, while in LargeCo, it is far less likely to be detected. Yet, we also know that the technical conditions for robust mutual insurance favour large schemes, i.e. LargeCo. This is the central tension in designing insurance schemes, and indeed the central tension in the design of the State itself. Even the optimal State cannot escape this conundrum: reconciling the contractual advantages of smaller insurance schemes with the technical benefits of larger pools. Now, the smallest insurance entity is you and me, each of us individually as one person – Ultra-Small InsuranceCo. It is important to remember this central fact, namely that unconstrained self-insurance is the dominant modus operandi for us. It operates outside the realm, confines and spheres of influence of any State. The tension, sometimes the conflict, and certainly the co-existence between the many small mutual insurance arrangements and the fewer large ones, with corner solutions at either end – Ultra-Small InsuranceCo here and the single, ultra-large InsuranceCo there – define the very origin and evolution of the State. Here on the Luminiferous Star, this tension explains the evolution of multiple Mini-States alongside one Maxi-State.”

19.    It was hot and humid as we reached the middle of the evening, the night still before us. A collection of small parcels of food arrived, which Yochanan unwrapped and laid out on a thin wooden board. Crispy leaves enclosed red, raw meat. Succulent tomatoes smelt of gras and morning dew. Green and yellow, red and purple vegetables were arranged with the precision of an Arcimboldo painting – polished, wet, and tender. Nearby, a white fish sizzled on a small grill. More wine appeared, shimmering like a morning lake. I placed a morning dew tomato into my mouth and asked, “Yochanan, tell me how you handled one issue which, I imagine, was not easy to resolve: average, ‘normal’ risks and losses are much easier to fund in a mutual co-insurance structure than extreme risks which are more expensive, more infrequent, and hard to predict. How do Mini-States – the contractually robust, but typically smaller insurers – cope with those, let’s say, existential risks?” My guide replied: “This is indeed the key point that led us to establish a Maxi-State as the reinsurance vehicle for the Mini-States. In this role it does not have to satisfy any contractual conditions because its sole purpose is to provide reinsurance capital to Mini-States, and it does so in three ways: First, Maxi Re, a specialised reinsurance carrier, provides low quota share (“QS”) reinsurance, typically covering 10-15% of Mini-State programmes and obligations. For every loss or payment incurred by a Mini-State, Maxi Re will fund 10-15%, or some other agreed-upon percentage, of the cost. Second, Mini-States can buy excess-of-loss (“XOL”) coverage from Maxi Re which means that if costs of particular programs or specific losses exceed a certain threshold, Maxi Re will reimburse Mini-States for all expenses above that threshold. Finally, Maxi Re is solely responsible for funding the costs of rare but extremely expensive events. These “catastrophe-risk insurance programs” cover ultra-high cost, extreme risks – thick-tail events that are truly exogenous and massively, positively correlated across all Mini-States. Mini-States lack the financial capacity to absorb such risks; only one ultra-large pool of capital, like Maxi Re, can do so. These are the three reinsurance functions of the Maxi-State, which generate good premiums for it in return.” He continued: “Mini-States, structured and operated to satisfy three stability conditions – co-investment, reciprocity and specificity – have found it easier to satisfy these conditions at a smaller scale (para.17). However, the technical requirements of mutual insurance – addressing risk aversion and covering large, expensive risks at affordable cost – crystallize the significant economies of scale in Mini-State creation. Larger Mini-States benefit from lower average insurance costs, ceteris paribus, because they have better access to capital, operating costs are partly fixed and therefore lower on average, and the benefits from risk pooling and risk diversification – the two central pillars of insurance – are more meaningful for bigger insurance vehicles. The Maxi-State reinsurance vehicle epitomizes the economic characteristics of insurance: having one ultra-large reinsurer is optimal for managing extreme risks, but even smaller cooperative insurance vehicles – such as a Mini-State – can achieve significant economies of scale. Consequently, Mini-States can offer returns to their citizens that, on average, exceed the cost of insurance they provide.” Yochanan pierced a slice of meat wrapped in a crisp leaf with a slender fork, savouring it slowly with some salt and lemon. “Of course, it’s crucial to determine how individual returns compare to the average, and how individual costs align with overall averages. Mini-State membership will generally make everyone better off. But there is no thing as an ‘average’ person. Some will incur claims costs far exceeding their contributions, while for others, the opposite will be true. The former are naturally incentivized to join a Mini-State (and Maxi-State) insurance scheme, but what about the latter? This is the key question. There are individuals whose productivity is so high that they can easily self-insure. Yet two compelling factors have persuaded even the most self-reliant individuals to join such an insurance scheme – our State. First, high-productivity individuals are often more risk averse than their ability to self-insure might suggest – possibly because they care deeply for close friends and family, many of whom may well be significantly less productive, or because their fortunes can change, making them unproductive: one can never be certain. Or perhaps it’s the recognition that high-cost risks can be prohibitively expensive and potentially catastrophic – the totalitarian dictatorship, the definition of the sub-optimal state, is no friend of high productivity. It is mere prudence to insure against such risks. Second, they receive a good return for their participation. The insurance vehicle offers value for money, providing not only tangible benefits but also peace of mind. We know these two factors are decisive, as they explain why even low-cost, high-value individuals take out insurance against other risks all the time. The same logic applies to the decision to join the State, the state as an insurance vehicle – the structure we have created here on the Luminiferous Star.”

20.    Then a gleaming, white fish arrived at our table. “This is Patagonian toothfish,” Yochanan said, “still the finest white fish in the seas. It narrowly escaped extinction, with only a handful of specimens surviving in captivity near some remote islands in a remote ocean. Our journey began when the population had dwindled to about a hundred, and we took some specimen along to this Star where we managed to shepherd their numbers back to the large stocks we see today.” The fish, served on a plain rectangular wooden board, was almost golden at the top. Its mouth was agape, wide, and almost square; its big, black, round eyes sparkled like tiny ponds. Surrounding it were some lemon wedges, sea salt, garlic, pepper, and a sweet juice – diaphanous, translucent blood. “Now go ahead”, Yochanan whispered in a seductive, deep voice. I carved a slice of meat from beneath its dorsal fin. It melted on my tongue. “By Jove”, I muttered in astonishment. Yochanan smiled gently, his grey eyes glancing briefly at the waiter as he withdrew. A long loaf of very dark, soft bread in triangular shape arrived next. Yochanan spread a thin layer of butter across it and remarked: “I have been here so often – yet the experience of eating here, the visual and sensory experience of tasting and consuming such delicious, subtle food: it remains so definitive, so defining.” He took a bite, and I followed suit. After a pause he continued: “Allow me to draw an analogy that might clarify how we think about risk in the design of this State. Aversion to extreme, fat-tail risks concerns rare, but very expensive events. Our aversion to high-frequency, comparatively inexpensive events is more akin to fear. Managing fear requires a different strategy than managing catastrophic risks: it is rooted in deeply personal, idiosyncratic knowledge. My fear of heights has little in common with your fear of losing your job, for instance. And how could I ever discover that you are afraid of heights? Catastrophic risks – extinction, severe illness, extreme poverty, death – are universally comprehensible. Their nature is self-evident upon observation. We might even agree on a range of probability distributions for such events, but because to cost of catastrophic events is so immense, the exact specifications of these distributions is not that important. Whether the probability of loss is 2% or 5%, the expected loss remains enormous – a hundred trillion times 2% is a very large number even if a hundred trillion times 5% is larger. In these cases, a heuristic based on potential cost, rather than precise expected value, suffices to justify cooperative action. Thus, we have tasked the Mini-States with managing the smaller, high-frequency risks – the personal fears, if you will, of their citizens – while the Maxi-State, through Maxi Re, is the provider of Mini-State reinsurance and catastrophe risk insurance. This”, Yochanan said, his eyes glimmering like small orbs of light, “is an application and a reflection of the third principle that has guided us in the formation of the State here – Principle #3: focus on extreme risks. The Maxi-State was born as an extreme risk insurer. Although it has since evolved to encompass a few other functions which we will elucidate for you, many of these can still be traced back to its primary role as a catastrophe risk (re-)insurer. Unlike the Mini-States, which have largely organic, self-made origins, the Maxi-State is their deliberate, artificial creation, designed to harness the economies of scale in managing certain collective affairs (and risks). Thus, Principle #3 is the most mechanical of the State’s three organising principles. It is reasonable to believe that Principle #1 and #2 can naturally emerge from certain a priori considerations about the value of life across all its forms and dimensions. Principle #3, on the other hand, stands apart as a more technocratic directive for managing societal affairs. When we reimagined the role of the state ab initio, considering our understanding of human nature and history, this principle was, if I may say so, an exceptionally wise choice that profoundly influenced our decisions and actions in countless ways.

21.    “Let me elaborate on three aspects of the dynamic relationship between the many Mini-States and the Maxi-State, a relationship whose complexity quickly became apparent and commanded much of our attention. First, as I previously noted (para. 18), there is a genuine tension between the technical and contractual conditions for effective mutual insurance. The former favour large insurance pools (and at the limit one pool), while the latter favour small pools. Trust in cooperative reciprocity and co-investment intentions is a fundamental condition for the stability of states and the formation of Mini-States. Yet, as scale increases, the average co-investment cost for each participant decreases, making it generally advantageous for Mini-States to consider new membership applications favourably. Porous group boundaries can prevent Mini-State atrophy and enhance primary insurance capacity, provided membership rules are obeyed. They also contribute to valuable stability among Mini-States (para. 12). In contrast, small and isolated Mini-States may struggle to offer a stable insurance proposition. The economic dynamics of social cooperation therefore generally favour larger Mini-States. However, growing state-size can erode the contractual foundation of effective mutual insurance – citizens must assume, without being able to see it directly, that others are behaving as required. When this trust falters, larger states can crumble, either at the edges or at their core. Thus, the political dynamics of social cooperation generally favour smaller Mini-States. We wrestled with this tension for some time, and, of course, we still do. Initially, we sought an average solution, somewhere in between Mini and Maxi state size. We invested considerable effort in calculating the “optimal” state size to balance this political-economic tension between smaller and larger (Mini-States). Some developed sophisticated differential equations to solve for an ’equilibrium’. In the end, we concluded that the correct answer lies in a corner solution, not an average: we have solved for the maximum Mini-State minimum, in other words the largest number of Mini-States. The reason for this is that the Maxi-State is an artificial construct, formed by many small Mini-States (or a few large ones). What really matters is aggregate reinsurance capacity, ultimately determined by population size and productivity (and therefore wealth), rather than its specific source and composition. Conversely, the political capacity of Mini-States cannot be artificially engineered; it is a real constraint, with the size of Mini-States being the critical factor. Consequently, we ended up with substantial – indeed, maximum – decentralisation. The size of Mini-States varies greatly, as do many other aspects of their organisation, a natural outcome of this decentralisation. However, this variety satisfies the contractual stability conditions. Interestingly, this process also determines the optimum size of the Maxi-State: the level of reinsurance protection is a parameter chosen by Mini-States. Some opt for a very large ‘excess’ relying primarily on their own insurance provision with minimal excess of loss/quota share protection, while others secure much higher reinsurance cover, resulting in a lower ‘excess’ and more extensive primary insurance provision. In contrast, the extent of catastrophe-risk protection is relatively uniform across the board, given the consensus on its probability distribution. Together these factors largely dictate the size of the Maxi-State.” The Patagonian toothfish looked at me with resigned patience, as if asking how much longer he had to wait. Beautiful and delicious, I thought. Then I said: “The premise of Mini-State stability rests on the idea that smaller cooperative social networks can better recognise and protect the richness of each individual (para. 12). But isn’t it also true that small, localised institutions can be extremely parochial, cobwebbed chambers run by small Bonapartes, evolving into impenetrable and often corrupt fiefdoms? Just as many find their own families to be the institutions they long to escape from – rather than some mystical, totalitarian, all-encompassing Panopticon – how can you reconcile Principle #1 with maximum decentralization if maximum decentralisation means maximum confinement?” Yochanan laughed: “That is one heart of the matter, though there are many hearts. The essential answer is this: the Maxi-State does more than simply operate Maxi Re, as we will explore further. One of its derivative functions – emerging from the interaction between one highly centralised organisation and many decentralised ones – is akin to acid: it occasionally cuts through the provincial, insular, petty clutter of the Mini-States by doing its own thing. Most of what the Maxi-State does it does without the Mini-States. The citizens of the Luminiferous Star can therefore be citizens of two states – at least one Mini-State and the Maxi-State. In that parallel existence, everyone has an escape route, if they need it.”

22.    “An important second issue is the efficiency of insurance,” Yochanan remarked with a wry smile, “and here we encounter challenges that are the exact opposite of those we’ve just discussed. When information is imperfect and contributors’ claims probabilities are difficult to ascertain, the optimal size of an insurance company – from an economic, not an administrative perspective – is large owing to the law of large numbers. The technical conditions for effective mutual insurance – risk aversion, high expected total costs and affordable individual premiums – lead to the same conclusion. This means the insurance company and its capital base will also be large, making it more robust and powerful than smaller, less well-capitalised entities. However, when information is ‘perfect’ and individual behaviour, tastes and motivations can be observed with high accuracy, the optimal size of an insurance company can be much smaller because claims probabilities can be estimated ex-ante with a low margin of error. The pooling of unobservable and idiosyncratic risks then becomes less important because fewer such risks exist. Yet, without this risk pooling, the subsidies provided by ‘good risks’ to make insurance affordable for ‘bad risks’ erode and may ultimately disappear. This leads to cheaper insurance for individuals with low claims frequencies, making it more attractive to them, while it becomes more expensive – or even unavailable – for high-cost policyholders. Paradoxically, better information about others strengthens the contractual dynamics of Mini-States, but also fragments insurance pools, jeopardizing their economic viability. Over time, this threatens the very contractual stability that improved information was supposed to strengthen. An insurance scheme with one member isn’t an insurance scheme, neither contractually nor technically (unless it is Ultra-Small InsuranceCo, but that is just you or me, and not a scheme). This is where the QS / XOL reinsurance provided by the Maxi-State – the artificial creation of the Mini-States – plays a vital role. It mitigates the risk of insurance pool fragmentation by making it affordable for Mini-States to insure a broader range of risks. In this way, the Mini-States establish and support a Maxi-State, which in turn sustains them by enabling larger-scale risk pooling – like the risk-pooling Mini-States perform for their citizens. Thus, Maxi-State reinsurance also upholds and reinforces Principle #1 by facilitating individuals’ participation in a Mini-State mutual insurance arrangement, preserving the contractual integrity that binds these systems together.

23.    Nonetheless, risk-pooling of good and bad risks is a necessary, but not a sufficient condition for the long-term contractual stability of Mini-States. While there is considerable annual turnover among contributors and recipients of insurance cover, a significant portion of contributors never become net beneficiaries. Moreover, their financial contributions are often particularly important. The best way for the State to encourage such individuals to join is by expanding its investment function. This is the third issue we addressed: leveraging the capital of both Maxi- and Mini-States to generate returns for members of the insurance company – namely the citizens of the State. Specifically, Mini- & Maxi-States use ‘float’ of earned but unpaid insurance premiums to make investments that benefit everyone, regardless of their individual contribution. This approach can mollify those who feel they are contributing ‘too much’ relative to their expected costs of drawing on the state’s resources. Similarly, those who believe others should contribute more to the pool – or, indeed, to them personally – can equally be compensated through benefits in kind and services that extend beyond simple monetary pay-outs. In this way, citizens gain access to resources that were unavailable before the formation of the Mini-States and their Maxi-State counterpart. The provision of public goods and services, therefore, originates from the economies of scale inherent in insurance. As insurers, Maxi- & Mini-States accumulate significant capital which can be leveraged to provide a wide range of benefits to their citizens. This approach addresses the contractual instability that arises within a purely insurance-based network of Mini-States, where a small number of individuals will consistently be net contributors rather than net beneficiaries. “

24.    “Excuse me for a moment”, Yochanan said, disappearing from sight. As he left, a young woman came over from the bar: red hair resembling a ball of fire surrounded a face dappled with freckles, small and large. She smiled at me and placed two small pots of chocolate mousse on the table. The mousse bubbled before me. My spoon drilled into an oil well: thick, brown, sweet stuff. A glass of red wine was there in front of me – light, ultra-light, smooth. Across the bar, I caught sight of Yochanan. To my surprise, he was there with the young, one-armed man he had embraced so lovingly earlier in the day (para. 7). They were engaged in conversation with an elderly woman whose sharp nose, grey, curly hair and big lips all moved in great animation. Her hands were everywhere, giving life to her words. The young man, on the other hand, didn’t move, and the tension I could see I could also feel. After a few minutes, Yochanan left them to it and returned to our table. “Forgive the brief interruption,” he said, sitting down. “You may have noticed the young man at the bar, whom I met earlier today. His parents died when he was very young, right before my eyes. He was nearly crushed to death by their bodies but survived, though he lost his arm. I was so close when they fell that I was covered in their blood, in everything that was inside them. When he recovered, he came to live with me, but to this day, his body still believes he has two arms. The phantom pain he experiences is extraordinary – sometimes so intense that he loses consciousness for several days.” He paused, as if weighing whether to continue, then added: “I can’t imagine this part of my history is of any interest to you. I apologise. Now that he is grown up, I see him less often. The pain of not seeing him, and the joy and tension released when I do, are both so acute. It’s as if I am experiencing the same phantom pain he does – as if he once was, and now isn’t, a real part of my body. This is why my encounters with him are always so momentous.” For a while Yochanan sat there quietly, drilling into his chocolate mousse. “Let me return to our earlier discussion (para. 23). The next challenge we faced was then determining the State’s optimal investment policy. One early conclusion was that the State must generate significant positive returns over short and very long periods. This is crucial because, politically, the State must satisfy the contractual insurance conditions that are foundational to the Maxi/Mini-States; and, economically, it must fully harness the economies of scale from the combined capital base of the Maxi- & the Mini-States. The former requires returns to be visible –citizens need to see and earn returns on their contributions into insurance pools, noting that these returns, the distributions insurers pay, are typically irregular and asymmetric – 10-20% of the recipients receive 70-80% of payouts; the latter is desirable because of the unique size and credit rating of the Maxi-State. Since we conceive of Mini-States as cooperative structures that constantly renew themselves, part of the optimal investment policy is to generate appropriate returns for each new generation of these Mini-States. The Maxi-State, by contrast, being a more eternal and artificial construct, is better suited for investment projects with an ultra-long lifespan. To achieve this, we created many Immediate Investment Funds (“IIFs”), operated by the Mini-States, and one Eternal Investment Fund (“EIF”), managed by the Maxi-State. Both funds invest the insurance float from the various pools of capital that are generated by their sponsors. The IIFs and the EIF generate the necessary investment returns to maintain contractual stability within Mini-States, and by extension, the Maxi-State, providing tangible value to all contributors in the mutual insurance pools of the State.” Yochanan folded his hands on the table and closed his eyes, hearing and seeing the past, present and future. “The Maxi-State’s primary function,” he said somewhat forcefully, “is to think – sharp, analytical, strategic thinking – and then allocate capital through the EIF and Maxi Re. The Maxi-State is a Thinking Machine. In contrast, the Mini-States are Doing Machines, with the IIFs as their key instruments for action.”

25.    “Yochanan, let me summarise your journey thus far to clarify my understanding. The formation of small groups, micro-networks becoming Mini-States, where individuals live and work together, represents an optimal approach to managing idiosyncratic, minor, non-catastrophic risks. Competition among these Mini-States fosters robust stability by accommodating a diverse range of social norms and arrangements. This ensures the initial satisfaction of Principle #1 for the role of the State on the Luminiferous Star: recognizing the richness of the individuality of each person and their desire and capacity to be left alone (TBLA) (para. 5). The boundaries of Mini-States’ spheres of influence emerge organically, shaped by the limitations imposed by three contractual conditions of cooperative stability, akin to mutual insurance arrangements: specificity, co-investment, and reciprocity (para. 17). However, certain technical conditions for optimal mutual insurance necessitate the creation of a Maxi-State. By pooling more capital, the Maxi-State can provide reinsurance cover for Mini-States’ primary insurance services at an acceptable cost, accommodating their diversity and ensuring comprehensive cover. Furthermore, it can provide catastrophe insurance for rare, yet extremely costly events that exceed the financial capacity of any individual Mini-State (para. 18). One such risk is the destruction of the Luminiferous Star itself. The discovery of Beatrice served as the final, pivotal moment in recognizing Principle #2 of the State’s role on this star: the principle of Functional Equivalence with its MiniMax Condition (para. 15). Combined with the Maxi-State’s focus on managing and insuring against extreme risks (Principle #3, para. 20), this has led to the restoration of nearly half of the Luminiferous Star’s surface area to its pristine, original state (para. 14) – the most comprehensive act of insurance against a terminal risk that the State could implement. The contractual mutual insurance conditions naturally facilitate maximum Mini-State decentralization. In contrast, the Maxi-State – an artificial construct created by the Mini-States – is a highly centralised Thinking Machine. In this capacity, it can act like acid, counteracting and cutting through the provincial, small-world confinement pressures that occasionally bubble up in the Mini-States, the Doing Machines. This dynamic supports and protects Principle #1, with every individual holding dual citizenship: in one or more Mini-States and the Maxi-State. While the Mini-States are the original source of the power of the State (para. 12), the Maxi-State embodies its ultimate and most potent expression. To ensure the technical and contractual stability of both Mini- and Maxi-States, multiple Immediate Investment Funds and one large-scale Eternal Investment Fund generate investment returns that are sufficient to persuade high-productivity net contributors into the insurance pool to join and remain citizens of the State.” Yochanan picked up a short, worn pencil and sketched a crude diagram on the back of a napkin. “Don’t you think that’s a solid, rather sophisticated arrangement? Of course, we still need to account for governance and administration – oversight and implementation”, he remarked, adding two small lines to represent these elements. “This encapsulates the core economic function of the State here on the Luminiferous Star. But it is not enough to consider the role of the State in an abstract manner – and the story so far has been quite abstract. Alongside the What? we must also think about How? – how the State performs its functions. It is not sufficient to create a conceptual map of the State’s role; we must also describe how it executes these functions for if the State doesn’t do so well, it will lose its legitimacy (para. 87) – and, in extremis, cease to be a State.”

II. Persons and Power

26.    When the first rays of the sun filtered into my compartment, I found a cup of strong, thick coffee waiting beside my bed, its aroma awakening my spirits. After dinner, we had returned to the train station, and now our journey took us across an endless plain of arid grasslands. The abundance of wildlife was astonishing – Greater-Sage grouse dancing on their toes, beautiful, yellow-chested Meadowlarks, perhaps singing, though I couldn’t hear them, Sprague’s Pipits, elegant Chestnut-collared Longspurs, and then the small, Burrowing Owls emerging from the abandoned burrows of black-tailed prairie dogs. Someone had drawn a web of smooth, convex and concave curves when creating the rolling landscape before us. As the sun rose, long, elliptical shadows stretched their soft hands across the land. Then, a herd of bison appeared, perhaps 20-30 bulls and cows, each with dark brown fur shimmering in the early light. They stood still, their vigilant eyes calmly observing the passing train, surrounded by dust, flies, sprays of grass. Gradually, they began to move, slow at first like a massive tanker, then faster, until we could hear and feel the reverberations of their hooves beneath us. Beside me, Yochanan watched the spectacle with quiet admiration. “For many years,” he said, “we worked to reintroduce American and European buffalo across a large area of grasslands and sagebrush, semi-arid lands. We estimate there are now 20-30 million bison across this star – not quite the numbers that once roamed these lands, but a significant recovery from the time when their population dwindled to mere tens of thousands. Returning half of this star to its untouched, natural state (para. 14) has made this possible.” For several more hours, we continued our journey through the seemingly endless green-grey steppe beneath an azure sky that, like the Star itself, felt infinite. Eventually, we reached a wide, dark emerald river whose estuary twisted into the sea a few miles to the north. An enormous murmuration of knots created dark, delicate waves in the sky. Beyond a long bridge, the river’s waters turned blue and green as they spilled into the sea, glittering like a sea of diamonds scattered across blue silk. In the distance, the silhouette of a large metropolis came into view. Our train veered north along the shore, racing towards the city. Its shadows painted long, slender figures onto the fields and roads that surrounded it in a tight web.

27.    As we neared the city, gliding through the endless outskirts towards its heart, the serene, sprawling grasslands gave way to a cacophonous, dense manifold. Its somewhat chaotic asymmetry – everything everywhere – was as striking as the wide, open spaces we had traversed to get here. A million people, a thousand machines, houses and factories, some rising what looked like miles into the sky; construction and space, noise and smoke, thought and action, water and air, ambition, extravagance and poverty, movement and solitude, drama and performance, confinement, freedom, life and death – the roots and expressions of human existence were all in front of us. Yochanan spoke: “We aim to delineate the perimeter of State involvement and action with precision – focussed rather than broadly expansive. Here, as in all cities, the State is scarcely visible. We leave them to their own devices (supported by one intelligent, semi-anarchic intervention, para. 123), and so they have grown to mirror the intrinsic nature of humanity – colourful, multifaceted, dirty, generous, sometimes a bit dangerous, but ultimately rich, rewarding and beautiful. It is a magnificent sight, embodying the spirit that gave rise to Principle #1, perhaps the central foundation of state design and organisation here. Our cities are our own making, fading with us, only to be reborn in a hundred different ways. Nature, on the other hand, exists in a more delicate and singular state – not out of inherent fragility, but because of the power we wield over it. Therefore, we strive to preserve the natural world, while allowing urban life to flourish unrestrained. The discovery of Beatrice was crucial in this: it reaffirmed that our freedom within the natural world requires boundaries, whereas our urban freedom shall remain unencumbered.”

28.    Yochanan took my arm and guided me through the gentle mêlée of the office blocks surrounding the station, themselves encircled by a bustling food market. Amidst the commercial steel and concrete were older residential buildings, a few larger town houses remodelled for mixed-use, and tall apartment buildings made largely of wood that created a sense of absorbing lightness. Eventually, we reached Yochanan’s office – a sunlit refuge of organised chaos: books, screens, microscopes, paper, a small machine that looked like an engine, canvas roles, and dahlias everywhere. An elderly woman was already there, her face deeply lined with age, her sharp nose casting a small shadow on its left ala that accentuated the glimmer in her snake-green eyes. “Have some breakfast”, she said gently, guiding me to a small table with soft bread, butter and green, finely cut chives. There was more coffee, too. “Thank you, Judith”, Yochanan said, and then he disappeared into his office. Judith spoke up, her voice calm and assured: “Allow me to clarify an aspect of the concept of insurance, the State’s primary economic function, as it pertains to Principle #1 and TBLA – the recognition of the richness of the individuality of each person and the desire to be left alone (para. 5), and Principle #2 – the principle of Functional Equivalence with its MiniMax Condition (para. 15). The safeguarding of Principle #1 and acknowledgement of Principle #2 form the State’s essential foundations, yet neither possesses obvious economic substance. How, then, can they shape and define the role of the State as an insurance vehicle? They do so through the State’s second insurance function – not the provision of insurance against catastrophic or more conventional economic risks, but by providing insurance against the abuse of power. Managing power – the power of one individual over another, humans over the natural world, and nature over us, as well as the power of the State, the Mini-States and the Maxi-State, over humans and natural, non-human life – is the State’s central political function. This is not about preventing, or extending, the end of life – the domain of Maxi Re’s cat-risk reinsurance operations – but about preserving life that is free, dignified and enjoyable. In this way, Principle #1 and Principle #2 are embedded in both the body and spirit of the State.” Yochanan’s voice drifted back from his office, quiet but authoritative: “Much like its economic role, the State’s political function is a mutual insurance operation – the insurance of ourselves by ourselves, safeguarding both the human and natural world from the State, while also relying on its protection. The central political function of the State is to manage power – to contain and apply, to observe and evaluate, to suspend and enforce it – including the power citizens can wield over the State. Think of it is a form of reinsurance, protecting against the very powers we have created.”

29.    Judith looked at Yochanan, and he met her gaze. Between them, I saw a quiet trinity of affection, respect, and commitment. Then, Judith turned to me and said: “Principle #1 emphasizes the richness of the individuality of each person, and alongside Principle #2, forms the foundation of the State’s political function on the Luminiferous Star – the management of power. Yet, upon reaching this conclusion, we were compelled to revisit the beginning – what exactly does the ‘richness of the individuality of each person’ mean and, if we can know what it means, what are the consequences of that? It is evident how expansive and indefinable it can be. For a group of N individuals, with each individual having R possible ways to rank C components of their ‘richness of individuality’ – in other words, each person is unique – there are T = RCxN possible rankings. This is a very, very, very large number. Furthermore, rankings change over time: our personalities evolve, and with them our perceptions of what constitutes the ‘richness’ of our lives and ourselves. If the State is to be guided by Principle #1, what exactly is it to be guided by? Indeed, what is the State’s ranking R of C, being a person of sorts itself? What is clear is that the set of components C of the richness of each individual person that is ranked in the same order R by everyone – we can describe this as the universally agreed-upon components of individuality – is extremely small, so small as to be almost invisible. Yet, this minimal set defines the State’s primary focus – it involves preventing extreme abuse of power and protecting against catastrophic risks. Preserving the ‘richness of the individuality of each person’ fundamentally depends on both. One person may long to sail stormy seas, another to decipher ancient scripts, and another to construct tall, wooden homes. These endlessly diverse and idiosyncratic ideas of the good life cannot form the basis of a State’s operations. However, a shared desire to avoid and mitigate extremes – extreme, catastrophic, uncorrelated risks and extreme abuses of power – lies at the heart of every person’s sense of unencumbered individuality. Insurance against events beyond our control, which can strip us of agency through no fault of our own, sets a reasonable and viable perimeter for State functionality. This implies, and must imply, that each of us should be free to pursue our own high-value, possibly high-risk endeavours – those ultra-high value events (“UVE”) whose pursuit is within our control. Dignity requires some form of Thymos, the real spirit.” Yochanan added: “Here the spirit manifests as absolute freedom, the self-confidence that perceives its own existence as inherent and essential to all intellectual and real things in the world.” Judith, smiling, looked at us both: “Perhaps, this concept of Spirit captures the essence of being alive as an independent, unencumbered, free person more than any other experience: the brief, fleeting moment of perfection that frames our memory forever, sharpens our sense of beauty, and helps us tolerate and see through the repetitiveness of ordinary life. This spirit is central to human dignity and deserves preservation and protection. The best way, indeed the only way for the State to protect it is to Do Nothing: to step aside, and let each life take its own course, even if this course occasionally leads to calamity. The case for State involvement is compelling when we lose agency for reasons beyond our control; not when we use it poorly.” Judith rose, and Yochanan made arrangements to accompany her out. As she left, she turned back and said: “Remember, there are many Mini-States. We are all citizens of at least one Mini-State and one Maxi-State. Maximum decentralisation is the defining feature of the State, and therefore its Mini-States (para. 21). Some of them do – and will – develop alternative arrangements to those I have just described, offering more intervention when we misuse our agency or to address our fears rather than existential risks. Mini-States, in these roles, can almost act as persons, akin to individuals with their own life, sentiment and vitality – quite unlike the centralised and artificial creature of the Maxi-State. This means that in a maximally decentralised State, there are multiple answers to the central question of the role of the State. There is, in essence, a place for everyone, a source of comfort we already identified earlier (para. 12).“ Judith’s words lingered in my mind, touching my heart, as if they were to guide me when – or was it if? – I returned to the Old World, seeking rest from my long journey.

30.    Morning settled over the city like a blanket of grey clouds, flat and somber. Yet beneath this overcast veil, another light flickered to life – the radiant glow of the people who live and work here. As I looked across the streets and buildings, the cars and planes and trains, the open windows, the imposing iron gates, amidst the towering scaffolding rising from the hot asphalt, there was life as a whole. Within this landscape, the tall and the short, the wide and the narrow, the dark and the light, the happy and the discontented, the busy and the idle, the strong and the weak all gathered together in one great crucible. Meanwhile, with deft, deliberate movement, Yoachanan manipulated his thin hands like a draughtsman, sketching another image on paper with a thick charcoal pencil. “This,” he said, “represents another way to understand our earlier discussion (para. 25). Our vision of the role of the State is to provide insurance – guarding against extreme and ultra-extreme events, managing both risk and power (para. 17 & 28), and, at times, simply to Do Nothing (para. 29). Alongside this, Mini-States address other, more immediate, less costly, yet important matters, such offering certain primary insurance services to preserve and enhance contractual cohesion. This dual approach creates both a political and an economic foundation for scalable social cooperation. In this world, we are content to leave many things to chance, while we are leaving nothing to chance as far as certain low-probability, ultra-high-cost events are concerned.” He opened a door, and we stepped into a large hall overlooking the shimmering rooftops of ten thousand buildings, lining a thousand streets that stretched all the way to the end of the land. The grey light of the morning bounced across the metropolis and gently

touched my eyes. Judith spoke: “Stability can prevail, at least most of the time, if the Maxi-State’s commitment to managing extreme risks and abuse of power is highly credible. Alongside this, if both the Mini- & Maxi-States discharge their powers effectively, people can find contentment with the consequences of Doing Nothing – living therefore in a world, in a State, that leaves you alone to pursue your own idea of ultra-high value events, an ultra-high value life. The returns we derive from these activities, and how we measure such returns, vary so much. There is no common unit of account: the value of time and money, open space and fulfilment, the value of love and possession, stability and health, the value of consumption and production, the morning breeze and the late-night jaunt – we all attach different weights to these. Therefore, the concept of “return on investment” or “return on how I chose to spend my life” will always carry a unique meaning to each of us. The resources we possess – those things that, in our mind and hands, signify our own measure of true worth – cannot be easily compared with those of another. Some are richer in their mastery of the three laws of thermodynamics; others have more magnificent netsuke (根付) collections; some can scale granite cliffs with the tips of their fingers; and others simply have more money than you or I.” Yochanan, standing on my right, added: “What matters is not that everyone should have the same, or that the bottom x% of the income distribution should hold no less than y% of the income (or wealth) of the top x%. What truly matters is that everyone has enough. When everyone has enough it is inconsequential if some have more than others. People are generally content with an unequal distribution of income or wealth, as long as they have enough to meet their needs, regardless of whether some other arrangement could provide them with more. This is because the total value they place on life’s many facets is, in their own eyes, sufficient – how does the value of a late spring sunset on the Green Island compare with that of your investment portfolio? Some will value the former more than the latter, and vice versa. No fixed ranking exists.” With a hint of melancholy and luminescent sparkle in her eyes, Judith added: “What father has ever told his son: ‘Do not focus on and pursue what truly matters to you, what genuinely interests you. Do not lead an independent, moral life in search for wisdom and happiness. Instead, aim to establish a level of wealth no less than x% of the richest y% in your country, regardless of the means.’ No father has ever said such a thing. The mistaken belief that economic equality is important in itself leads people to detach the problem of formulating their economic ambitions from the problem of what is most significant to them. It influences to take too seriously, as though it were a matter of great moral concern, a question that is inherently rather insignificant and not directly to the point, i.e. how their economic status compares with the economic status of others. We are concerned with helping the severely handicapped son, the extremely poor neighbour not because the former is worse off than his record-breaking athlete sister or the latter destitute in comparison to her wealthy landlord, but because their condition is bad. How their lives relates compare to others’ is fundamentally irrelevant.”

31.    Judith’s figure was almost as diaphanous as her linen clothing. Yochanan coughed once, then again, and settled down at a large, square table – the only piece of furniture in that expansive, open space where light and sound danced across all four walls. A bowl of shining pears, one green, one yellow, one brown, stood in the middle of the table. Outside, the metropolis sprawled before our eyes, glancing back at us. Judith’s green, almond-shaped eyes fixed on me with concentration and interest. “Distributional equality is an impossible and misguided goal,” she began, her eyes shining like a cat’s in dim light. “Yet one cannot always escape the Weight of History. The abuse of power can outlive the abuser for centuries. A massive appropriation of resources, a monumental theft from a thousand years ago, a clear abuse of power in the past, may explain abject poverty – and great wealth – today. Are those who benefit from such wealth violating a procedural criteria of justice, even if we discard any concept of distributive justice? How does the historical abuse of power linger on today? These are questions we couldn’t escape from during our journey to this Star because we, too, sought to leave history behind. But could we? The ultimate truth is that the consequences of actions taken a long time ago are often unknowable. When we examine the more recent past – still remembered by those still alive today – we can sometimes trace the legality or illegality of actions and decisions taken years ago. Yet, even then, re-opening long-dormant claims often breeds more cruelty than justice. That’s why we have statutes of limitations, to constrain the time within which grievances from the past can be brought to court. The further back we go in history, the harder it becomes to untangle the causes, sequence, and consequences of events. Mapping even well-known historical grievances onto individual lives today becomes impossible.” Judith rose and walked to the opposite side of the room, where a large park blanketed in autumn's orange colours stretched out before us. She continued, “In our legal tradition, only murder, genocide, crimes against humanity and war crimes have no statute of limitations. But even in these cases, the perpetrator must be alive. Once they are gone, retribution must give way to something else. How can we address an historical injustice when all protagonists are long dead? Indeed, when their victims are dead? In general, we cannot. We cannot go back in time. The dead are gone, and any relationship of the living to past offenders and victims is derivative. Justice and retribution must be direct, not enacted by proxy. History imposes its own statute of limitations.” She paused for a moment, then added. “Moreover, when considering the justice of today’s economic distribution, we must account not only for past injustices but also for the acts of charity, generosity and love that have shaped our present. How can we measure the theft of 1653, which we resent, against the act of extraordinary generosity in 2036, which we could not take for granted? We owe much to the past: not only the burdens it imposes but the gifts it has bestowed. Is the value of the latter not greater than the costs of the former?”

32.    Yochanan rose and moved to one of the large windows, placing his long, slender hands on the blueish pane of glass. His breath formed a small island of condensation, an atoll in a sea, which vanished as soon as it appeared. He stood there for a moment, then turned to me and said: “It is therefore possible to acknowledge past injustices while still accepting the fairness of the present distribution, provided that distribution adheres to a principle of justice we can call the Do-Not-Abuse-Your-Power condition (the “DNAP Condition”). The DNAP Condition does not prohibit the use of power; rather, it insists: ‘do not abuse it’. This means do not use your power for nefarious ends that further erode the power of others, and over whom you might already have legitimate power. However, the DNAP Condition is not a perfect remedy for there are times when we cannot escape the Weight of History, which can be overwhelming. Some generations are more fortunate in their relationship with the past, being net beneficiaries of history, while others experience mostly costs with fewer benefits. The value of the past, like any asset, is also unevenly distributed. In some egregious cases, when the consequences of the past live on painfully today, it is impossible to simply ignore it as if history’s statute of limitations applies unconditionally, even if the DNAP Condition is satisfied today. Thus, in a very limited number of cases, we addressed the past and its legacy in two ways: first, we altered certain Ancient Rules that had been in force for centuries and were exerting a pervasive, perverse influence on the present. Second, we decided to deal with one Event of Extreme Immorality, whose consequences had persisted across generations, remaining a raw and living issue instead of fading into distant memory. The resolution we brought about was both powerful and elegant, a way of confronting the past while paving a path towards a future where that past could finally be laid to rest. Together with the abolition of Ancient Rules, these initiatives appropriately and effectively addressed the lingering Weight of History. They helped us place Principle #1, the recognition of the richness of the individuality of each person, firmly at the heart of the State here on the Luminiferous Star, as one of three guiding principles. Confronting the past gave the State legitimacy early on in its life (para. 82), currency it used to implement other initiatives that might otherwise have struggled to gain public support. Only by addressing the past in this way could we finally leave it behind and shape a different future.”

33.    Like Yochanan, Judith stood at the large windows, looking out at a city that stretched out to the edge of the sky. She said: “Ancient Rules are laws or conventions with potentially permanent, certainly very long-lasting influence on the ownership and monetization of certain high-value assets – rules that, by any reasonable standard, have become obsolete (and it is doubtful whether they ever had any justification). Noone cares much about the distribution of low-value, non-income generating assets – jewellery, vintage Levy jeans, La Tache Grand Cru bottles of succulent wine, or 1964 Gordon Keebles. The distribution of ownership of these items is inconsequential in relative or absolute terms. However, on our journey to the Luminiferous Star we revamped the operating protocols for the use and ownership of two high-value assets. One was land and real estate (para. 34-35), the other was digital data (para. 36-38). Both are natural resources that had been exchanged under circumstances where one party was significantly disadvantaged compared to the other – in one case, the buyer paid for an asset without acquiring outright ownership, while in the other, the buyer paid no consideration to the seller. Could the State tolerate this and retain its legitimacy?

34.    Let me begin with land. The supply of land is fixed, it is immovable, and its ownership reflects thousands of years of requisitions, expropriations and gifts, purchases and sales, occupations and many other forms of use and exchange. All our initial wealth derived from land and its use by man, though over time we have created a lot of other wealth unrelated to it. In the Old World – the world that we left behind when we embarked on our journey to the Luminiferous Star – the most notable, and peculiar, aspect of land ownership was the prevalence of leaseholds. This form of property tenure granted occupancy and certain usage rights, but only for fixed periods of time. The leases could span long periods – 99 years or even more – but when they expired, all rights reverted to the freeholder. The freeholder retained legal title throughout the lease and could therefore sell the same property multiple times, all while collecting valuable ground rent and services charges along the way. This system, a feudal relic from the Middle Ages, had astonishingly survived a series of reforms in the Old World that strengthened the rights of leaseholders vis-à-vis freeholders, yet lacked the boldness to abolish this historical anachronism altogether. Abolishing leasehold tenure was therefore the first Ancient Rule we overturned upon our arrival on the Luminiferous Star. As a result, leaseholders have become freeholders, securing outright ownership of the properties they had once leased. Freeholders had long argued that they provided a unique and valuable service that would be lost with alternative ownership models, but these claims quickly fell apart under even modest scrutiny. Individual homeowners are empowered, incentivised and have proven fully capable of maintaining their properties as well as, if not better than, remote, absentee freeholders who nominally managed large property portfolios – though their actual contribution was often hard to discern. Individual apartment owners, using an amended commonhold system, can manage shared ownership of common areas in a perfectly satisfactory manner, often doing so with greater efficiency and care than professional freeholders. Under the old leasehold-freehold system, the relationship between occupation, ownership, management and maintenance responsibilities was needlessly – and feudally – convoluted. Today, however, it is simple, clear and far more effective. This was achieved by amending freehold law so that ownership rights no longer must correspond to an area identifiable on a map. Instead, shared ownership in companies that own the relevant property, such as apartment buildings, has become the norm. The sale of an individual unit, like an apartment, is then executed through the sale of shares in the company – a practice long used across the old planet but, for archaic historical reasons, had never been adopted in the Old World.”

35.    Standing beside Yochanan and Judith, I said: “I understand the intuitive and rational appeal of abolishing leasehold property ownership. The challenge, I imagine, was implementing this in a way that was both effective and fair, ensuring the removal of a Weight of History without creating a new one. How did you manage the transition from the Old World to this new one here on this Star?” Judith folded her hands – old hands marked with a refined elegance of age, their soft, thin skin dotted with small brown moles – and replied: “We reformed this Ancient Rule as follows: First, from the moment the legislation was enacted, all property sales were converted to freehold transactions. The sale price now included the cost of the freehold, calculated using a simple, long-established methodology. For transactions already underway but not yet completed, prices were adjusted if both parties could agree on the relevant price adjustment. If no agreement was reached, the transactions were typically cancelled. Second, all freeholders and leaseholders were required to complete an enfranchisement process within 36 months of the legislation taking effect. They could do so in any way they wished. After this period, any remaining freehold transactions were executed through compulsory purchase orders and enfranchisement payments were redirected to the government instead of freeholders, with the funds used as seed investment capital for the EIF Hub (para. 50). This system incentivised freeholders to transact without dissuading leaseholders from doing so. Once enfranchisement was complete, cooperatives or joint stock companies were formed, where necessary, to own and manage now jointly owned freehold properties. These entities were subject to existing laws governing companies, their directors and shareholders, ensuring proper management and protecting the interests of the new shareholders. Thus, after three years, leasehold ownership – and with it, the archaic system of ground rents, service charges and similar peculiarities – came to an end. Disputes between leaseholders, freeholders, service companies and owners of ground rent became a thing of the past. Initially, property prices rose slightly to reflect the enfranchisement cost, but the increase was modest, and market prices soon stabilized according to conventional supply and demand dynamics for different types of real estate. Many large estates were reduced in size, but they did not disappear as many leaseholders chose to sell rather than buy freeholds, with many estates actively purchasing property. Rental stock therefore increased. Ultimately, the enormous concentration of landholdings in the Old World ended. While the reforms faced strong opposition among a few with a long – possibly medieval – history, the changes we enacted were unstoppable: history, the future and common sense were on our side. Within a few decades, the ancient system of leasehold tenancy became little more than a historical curiosity, regarded with wonder and puzzled bemusement by younger generations.”

36.    The morning sky, once draped in grey, began to lighten as we opened one of the large windows which faced the arc of heaven that had cradled the sun’s birth that morning. A north-easterly wind, stirred by the endless rotation of the Luminiferous Star, swept through us and the spacious room in which we stood. Judith reach for a pear, still ripening long after it had been harvested. Yochanan took one as well, and I followed their lead: one yellow, one green, one brown. After a brief pause, Yochanan resumed: “Let me tell you about the second Ancient Rule we altered. Unlike land, the supply of digital data is not fixed. With the digitisation of economic and social life, it grew exponentially over many years. In the digital world, three types of personal information became particularly important, all categorized as ‘Digital Data’: (a) information about individual digital behaviour linked to IP addresses or other device indicators (including geolocation data), allowing the mapping of preferred products, services, and general outputs to these indicators; (b) information connected to individuals through email addresses, browsing history, search queries and social media activity, app use patterns, phone numbers and other personal identifiers, including data from credit referencing agencies; and (c) specific personal information voluntarily disclosed by individuals, which then becomes the possession of a third party, who may or may not use it legitimately based on the permissions granted. As the old planet became a digital planet, privacy and data protection evolved from a sensitive and contentious topic of public debate into a heavily regulated domain, supervised by numerous governmental agencies and covered by an ever-growing body of law. The foundation of these laws was typically a negative application protocol for third-party use of Digital Data: use is prohibited unless individuals grant permission or there is another lawful basis, such as a legitimate interest or legal necessity. However, securing individual authorisations for the use of Digital Data was often impractical or impossible. As the digital economy grew, the scope of relevant legislation expanded significantly. Yet, this legislation failed to address the core issue: the economic value of Digital Data. Instead, it focussed on (i) privacy protection, which is often irrelevant when data is anonymised, and sometimes undesirable, such as in medical contexts where linking personal data to treatment history is critical; and (ii) individual control, which is often irrelevant and, given the balance of power between individuals and large network users of data, impossible. As Digital Data became increasingly ubiquitous, valuable, and integral, regulatory measures – driven by paranoia, fear and a restless drive for legislative control – grew ever more draconian. Furthermore – and this was a key point for our undertaking – the nature and scope of such regulation undermined the legitimacy of the State (para. 81). It was costly to implement, difficult to monitor, nearly impossible to enforce. It treated the vastly complex realm of Digital Data as though it were a homogenous market with a single supply and demand curve. Consequently, regulation suffered from two, ultimately fatal flaws: it enhanced, rather than curtailed, the market power of large firms; and it ascribed a uniform, low value to Digital Data, ignoring its variability from person to person and over time. This approach to managing a pressing issue of the Old World and the Old Planet was both ineffective and inefficient.

37.    “The change we implemented was simple, powerful and extremely effective”, Yochanan explained. “We replaced the regulation of the use of Digital Data with direct payment for it. Data users – all of them, including the State – now pay data owners via Digital Data Trading Platforms (“DDTP”). These platforms serve two main functions: first, they quote prices for standardised Digital Data indices used for ‘plain vanilla’, anonymised data such as location information that cannot be traced back to an individual. Second, they operate automated digital markets where individuals can sell either non-standardised, personal data, for instance their medical histories, or standardised data that, when combined with other information, can identify the owner and link the data to personal or behavioural characteristics. The DDTPs operate in real-time, 24/7, allowing users to offer data for sale either in batches – where purchasers acquire rights to access, retain, and use the data for a specified period – or through one-off transactions. Users can choose to monetize their past, current or future data generation automatically. While they can always terminate a transaction that is in progress, but not yet complete, past transactions cannot be reversed. The platforms can handle users’ instructions automatically, with no need for further intervention unless they wish to change their preferences. The system provides multiple monetization options. For example, an individual might sell certain data for one week at price X or sell the same data for 52 weeks at a different price. Typically, the market-clearing price for a year’s worth of data sale will not simply be 52 times the weekly rate, reflecting the nuances of yield curves, buyer preferences and payment patterns, such as one-off vs. periodic payments throughout the contract period. Regardless, the compensation requirement applies to all Digital Data transactions, highlighting both the economic value of data and the importance of preventing arbitrage and fraud by ensuring no data used is subject without payment. Consequently, unlike the legislative exemptions regarding data use and disclosure embedded in Old World-Old Planet regulatory frameworks, even the Mini- & Maxi-States on the Luminiferous Star must pay for the Digital Data they require from citizens. Although the sale of certain data can be made compulsory in some cases – with market prices therefore reflecting partial monopsony power in such instances – payment is always mandatory. A sophisticated system of data storage and transaction recording has unlocked countless development and monetization opportunities we didn’t fully anticipate. All data is converted into standardised units across various categories, with unit prices establishing transaction values for the traded data sets while Digital Data indices set composite market values for baskets of date. Depending on data type, anonymous data trades at varying discounts to personalised data (and there are various degrees of information disclosure or anonymisation in between that are also reflected in market prices for relevant data). For anonymization, data owners have two options (i) stateless tokenization, which maps live data to surrogate values without the need for a database, typically used for standardised Digital Data; or (ii) encryption for more sensitive, high-value data. All Digital Data transactions are securely recorded on quantum blockchains which can process and settle a high volume of transactions almost instantaneously. This technology eliminates intermediary processing and administrative delays, allowing buyers and sellers to track transactions and view transaction histories across multiple platforms and data categories. These capabilities have given rise to many secondary applications built on DDTPs. While the original aim was to create a market for data monetization, a deep and liquid secondary market has developed, enabling data users to purchase large volumes of data units for future use. Concurrently, users can join issuance pools to securitise their future data generation, creating attractive, often investment-grade securities. These securities appeal to a wide range of investors due to the granularity and predictability of the underlying collateral. They also create personal financial instruments that convert Digital Data value into secure income streams, reducing the need for other, typically means-tested State-led transfer payments to citizens.” Yochanan folded his fingers into an intricate web, unravelling and refolding them in slow, rhythmic motion. The setting felt dream-like: a large, spacious room flooded with light, overlooking an endless city, with only the sound of wind sweeping through us. In the midst of this, Yochanan and Judith – distinctively beautiful – unfolded for me a narrative that bridged the distant past and the far future. I wondered: was I closer to the former or the latter?

38.    “The volumes processed by DDTPs are large. In the early days, each person generated approximately 60GB of data per day, worth about $60 or $22k p.a. Today, data generation per person is nearly three times higher. While prices per GB for standardised data have plummeted by over 98%, specialised data sets now command significantly higher prices, ranging from $10 to $30 per GB. As a result, the annual value of digital data generated per person now exceeds $65k. About three quarters of this data is monetized, resulting in annual payments per person of almost $50k, or about $140 per day. Globally, this translates into around $450trn of payments from users to Digital Data owner-producers, representing about 15% of GDP. These payments,” Yochanan concluded, “are consuming a proportionate share of global output: one-seventh of GDP aptly reflects the immense value created by the myriad use cases for Digital Data. The abolition of data-related regulatory rules and legislation naturally followed the introduction of Digital Data compensation. As data owners can monetize their data at fair market values, regulating its use has become unnecessary. This initiative – the abolition of an Ancient Rule that facilitated the extraction of a hugely valuable natural resource for free – has brought about clarity, ease of use and, through the DDTPs, a transparent and equitable allocation of value for what has become one of the most essential primary assets (para. 141) on this Star.” “How were you able to introduce such a radical change in the management of this resource?”, I asked. “I gather from your description that the State played a role in creating the DDTPs but it seems it no longer manages these platforms. Everyone appreciates the outcome, but how did you achieve it?” Both Yochanan and Judith smiled generously, absorbing the significance of my question. “We will elaborate on that in due course”, Yochanan replied. “For now, I can tell you that one of the three investment programs managed by the EIF was instrumental in this transformation (para. 55).”

39.    “The management of land and digital data were the two Ancient Rules we altered shortly after arriving on the Luminiferous Star. These arrangements profoundly reshaped the relationships among citizens and their interactions with the artificial creatures they had created – corporations and the State. These reforms have since served as models for other initiatives we have pursued here.” With bright eyes fixed on me and an expression so sincere that his face looked like a sharp rectangle, Yochanan remarked: “I must leave now, but we will meet again before your journey ends. You will be in Judith’s care, and she will tell you more about how we addressed the Weight of History (para. 31).” He then turned, taking her hands in his with the thoughtfulness of someone assured that his sentiment would be fully reciprocated. After a brief exchange – glances, words, meaning – he departed. “Let’s go”, Judith said, casually draping her arm around mine. “It’s time to see the real world outside”. Before long, we were immersed in the life of a thousand streets and a thousand buildings, walking west at a brisk pace. A series of large lime trees shaded our path until it opened up into a spacious square with a large pond at its centre. In the middle of the pond stood a beautiful church, its nave measuring about 45 by 10 meters, crowned with a long, pointed spire covered in dark, weathered copper that shimmered part green, part silver, part orange, topped off by a beautiful golden star. At the church’s entrance, a young girl sat, shielding her eyes with her hand to steady her vision. Remarkably, two larks perched on a ledge beside her, gently swaying from side to side as they sang a pure, melodious duet. “Let me take you to that pond and the church,” Judith suggested, and I willingly obliged.

40.    A pair of elegant Great Crested Grebes glided along the edges of the pond surrounding the church, their pointed bills tenderly interlocking like lovers delicate embrace. After a moment, they separated and then, like synchronised swimmers mirroring each other’s movements, swam towards each other, their feathery breasts puffed, necks stretched toward the sky, and crests fully fanned. Then they dived beneath the water, resurfacing with weeds in their beaks, which they exchanged as if sharing a secret token. One of them began to dance on the water’s surface, turning this way and that, his black double crest vibrating vigorously above his white neck, framed as it was by reddish-brown ruffs on either side. Despite the challenge posed by his lobed feet, the display was a breathtaking blend of control, passion, and pride. In the end, as the mid-day sun splintered into a million fragments, one for each of the ripples formed by the wind and the water on the pond’s surface, the two birds, as if clasping hands – or the tips of their wings – dove into the water once more. They vanished, no sign, no life, only to reappear in perfect harmony moments later, their wings still touching. A spectacle of grace, beauty and – who knows? – love. As we crossed the bridge to the island, Judith turned to me and said: “You are surprised to see larks and Great Crested Grebes sharing the same environment, aren’t you?” And, indeed, I was. “It’s rare,” she continued, “but the star-shape layout of this city has made it possible, the open, untouched land and the water so close together.” She paused, her smile wilting away as she went on: “The Weight of History we faced was slavery – or, rather, it confronted us for its weight had grown ever more burdensome, more suffocating over the centuries during which it had remained unaddressed. Time did not ease its sting; instead, it gave birth to more and more memories of the cruel fates endured by so many individuals. As more accounts of these stories surfaced, the anguish spread, like an unquenchable fire, piercing the hearts of many. This brought into sharp relief – like the blade of the finest Masamune katana – the grievous and ultimately intolerable dissonance between the denunciation of this past and the absence of any action to redress it. No doubt, this was partly because the sentiments underlying slavery had endured longer than slavery itself. However, those who seriously thought about how to design a system of redress for this blood-filled history, so enmeshed with contemporary life (and lives) despite its ancient origin, failed to overcome the conceptual difficulties and procedural hurdles that stood in the way of such a settlement. The conceptual problem was that financial compensation alone – the typical method by which historical debts had been settled before – was an inadequate, and impractical in addressing the legacies of slavery. But what could take its place? What other mechanism was appropriate? The procedural difficulties were easier to understand, but no easier to overcome: the very divergent views on this subject made agreement on a common course of action nearly impossible. Thus, the search for resolution dragged on in the Old World, though without success. Yet, as the years wore on, the blade of Masamune’s katana only grew sharper. Our arrival on the Luminiferous Star – or rather, our departure from the Old World, taking place, as it did, amidst an atmosphere of sharp conflict – presented us with a new opportunity to revisit this thorn-filled subject in a decisive and constructive fashion. It was a chance to overcome and destroy the procedural hurdles that had stood in the way for so long. But could we also transcend the conceptual obstacles that had stymied our predecessors? The first step, so obvious now but far less so then, was to empower the State to take the lead. Only the State, a quasi-eternal and ever-living entity, could confront an issue whose original facts had faded into the mists of time, even as its enduring consequences still shaped the present. Individuals, corporations and other institutions with finite lifespans were simply not equipped to handle such a monumental task. Thus, the settlement we crafted was designed from the outset to be full and final. Recognising that financial compensation alone could never suffice to fully acknowledge or atone for this historical injustice, we expanded our search for more meaningful solutions. While a financial element remained necessary, it was secondary – merely an adjunct. Slavery was no longer just a Weight of History; it had become a Weight of the Present. The central question therefore became: how can we honour both the dead and the living, treating them as Personen an sich (para. 17)?

41.    The solution lay in creating a dedicated institution with a quasi-eternal life, blending the present lives and memories of individuals into a collective endeavour for the future. This is the Overlapping State (“OLS”), established many centuries ago by the Maxi-State and a few other states. The OLS was designed not to be exclusive but to serve as a spiritual home for descendants of slavery and others who sought such a refuge. It has united those who believe in the value and purpose of OLS membership, fostering shared interests while balancing their roles as citizens of the Luminiferous Star and beyond. Thus, the OLS has transformed a certain shared history – and a certain shared present – into collective efforts to improve the lives of its ‘citizens’, operating within a flexible institutional framework that can be reformed and renewed, expanded and reduced according to the wishes of its (quasi-)citizens. Upon its creation, the OLS was endowed with a substantial portfolio of assets, providing it with the resources necessary to build and operate its infrastructure and services. As you can imagine, the amount of this initial transfer of resources to the OLS was the subject of heated debate. Some argued it was too much, others claimed it fell far short of compensating for the “true cost” of slavery. While it is true the OLS’ initial endowment was materially less than what complete financial compensation would require, total financial restitution was neither possible nor the primary purpose of the OLS. Instead, we focused on an institutional system of compensation, where financial considerations played a secondary role – important but not paramount. From the outset, in collaboration with a group of leaders and representatives, the Luminiferous Star drafted a constitutional arrangement outlining the purpose and modus operandi of the OLS. Membership, or citizenship – since the OLS is a voluntary association – was open to all. It quickly became clear that requiring proof “blackness” or ancestral ties to slavery was impractical, impossible to administer and, most importantly, contrary to the underlying spirit of the OLS. To fulfil its mission – to provide reconciliation for a dark chapter of our past by nourishing peaceful co-existence and offering valuable services to future generations – the OLS had to be open and transparent, transcending the racial divisions that burden this particular Weight of History. Accordingly, the Maxi-State (and its co-founding states) mandated that while the OLS could set its own membership (or citizenship) rules, these must be non-discriminatory and fundamentally open to all. We knew not everyone would choose to become an OLS citizen and, this has proven true – most OLS citizens have a personal connection with slavery. Yet, the principle of open access remains important, offering for everyone the opportunity to share not only the past, but also their futures. In this way, the OLS reveals and responds to a deeper truth: we all have multiple personalities and allegiances. Just as our personalities have many layers, we can be citizens of multiple states, just as we are citizens of at least one Mini-State and the Maxi-State. By welcoming and uniting people for a specific, shared purpose, the OLS has become a powerful catalyst for peace and reconciliation.” I interjected: “Tell me more about its operational protocol and architecture.” Judith responded with a grace that transformed her words into something like the dance of the Great Crested Crebes made audible. “The OLS has developed a network of central and local administrative organisations that periodically review its governance and membership arrangements while overseeing the investment of its assets to benefits its citizens. Two successful initiatives include the creation of educational institutions and real estate development programs designed to leverage a better and more flexible regulatory regime for residential construction (para. 123), addressing specific housing challenges. The OLS operates through two elected bodies: an administrative council, elected directly, and a managerial assembly, elected by proportional representation. Together, they manage the OLS’ affairs, and collaborate with the Luminiferous State and other sponsoring states to review, refine and update the quasi-constitutional principles of the OLS. This constitution is quite narrowly conceived – for instance, the OLS has no coercive or tax-raising powers, although it does maintain representative offices in various states, functioning somewhat like embassies. As the OLS’ legitimacy grew, thanks to shrewd investment management and effective housing programs, voluntary contributions – you could call it OLS tax income – have significantly increased its endowment, further enhancing its capacity. The OLS’ success can be attributed to its narrow but adaptable focus, its open-access membership policy, and its effective management of its assets. These three pillars have achieved the reconciliation we sought and have fostered a harmonious coexistence with the Luminiferous State.”

42.    “Just as having a private room allows you to live more comfortably withing an extended family’s home, the OLS, by providing its own space and value, has enabled more people to become content citizens of the Luminiferous Star”, I replied. Judith tilted her head slightly. “Indeed…..a room of one’s own. This is what the OLS offers those who seek such a space within the vast, somewhat overwhelming, Maxi-State and its many Mini-States. The OLS has taught us valuable lessons about designing institutions that exist both within and beyond the traditional boundaries of the State. Its creation has made the State more porous and flexible, inspiring the emergence of other, similar institutions. This evolution has sharpened the State’s focus on its core functions, allowing it to shed unnecessary roles that accumulated over centuries but provided little marginal value.” Judith paused in reflection, and then continued: “Mini-States, in a sense, are a specific form of Overlapping State, and Overlapping States are a unique incarnation of Mini-States, safeguarding the Principle #1 rights of their members. Instead of asserting a prior-ranking and comprehensive claim to monopolistic power, the creation of Mini-States and later the OLS has demonstrated that, much like wise civilisations of the past, the legitimate claim to central authority is not absolute. It is either preceded by the legitimate authority of Mini-States or coexists alongside other, potentially rival but not necessarily conflicting, claims on authority within the OLS.”

43.    We crossed the pond on a narrow, wooden bridge and reached the church, which majestically rose into the sky. By now my eyes were set again upon my guide’s face, and with my eyes, my mind: from every other thought it was withdrawn. She did not smile. Instead she said: “Were I to smile, then you would be like Semele when she was turned into ashes, because, as you have seen, my loveliness – which, even as we climb the steps of this eternal palace, blazes with more brightness – were it not tempered here, would be so brilliant that, as it flashed, your mortal faculty would seem a branch a lightning bolt has cracked. Let your mind follow where your eyes have led, and let your eyes be mirrors for the figure that will appear to you within this mirror.” Judith gently touched my hand as we crossed the narthex of the church. Our slow steps echoed against the ancient, smooth flagstones. The afternoon sun streamed through the windows flanking the nave, casting steep angles of light onto the floor, which, polished by millennia of pilgrimage, reflected rays back up, illuminating the dust-filled air with a solemn sparkle. Fireflies danced near the western windows. Sunlight descended from the intricate clerestory above, drawing, it seemed, the letters W and I in the air, traced perpendicularly by celestial light entering this ancient space. We passed through the lowest arch towards the elevated altar at the nave’s vanishing point. Judith stopped in the middle of church. Her shadow stretched to the eastern wall, darkening the old, shimmering stones. She waited, and I too waited, slowly turning in a full circle. When I caught sight of Judith again, she was tracing the letters of ‘Ulysses’ in the dust on a pew. She said: “Ulysses ended up in the inferno for the boldness of his quest – you must not deny experience of that which lies beyond the sun, and of the world that is unpeopled. Consider well the seed that gave you birth: you were not made to live your lives as brutes, but to be the followers of worth and knowledge. He promised his followers a search for the unknown all the way to the end of the world, and beyond.” “But this soon turned to sorrow”, I continued, “for out of that new land a whirlwind rose and hammered his ship: three times it turned it round with all the waters; and at the fourth, it lifted up the stern so that his prow plunged deep, as pleased God, until the sea again closed over them.” “And for his attempt to shortcut the divine journey through life and what comes after, he was sent to Lucifer’s cold, dark world of ice”, Judith said. “Yet here, on this Luminiferous Star, we seek to continue Ulysses’ journey. We accept the costs this brings, in exchange for less frequent but more spectacular discoveries and moments of exaltation.” She paused, her finger resting at the end of letters which she had traced in the thin layer of dust on the pew before her. “This church”, she resumed, “reminds us that the search for virtue was once the very essence of our lives. For many of us, it still is: the pursuit of virtue, light and knowledge may well be the central pillar, the very Spirit of life. Yet, for each of us, this spirit takes on many different forms. The arrangements we have made for the Luminiferous State on this star allow people to pursue their own spirits – the Spirit in its manifold manifestations – in their diverse and unconstrained ways.”

44.    “We should leave now”, Judith said. “The afternoon is drawing to a close. It is time for you to meet others who can guide you through some of the other dimensions of the Luminiferous Star, and the real, actual life you might discover here.” Though my question remained unspoken, it was nonetheless discernible and Judith, a being from another Star, responded. “What matters in assessing everyone’s economic well-being, is whether they have enough (para. 30) – enough to live, certainly, but also enough not to die and to live instead. This is the minimal basis for ‘enough’. But what is the minimal acceptable basis for it? Would it not violate our sense of self-interest – our understanding of what makes a person’s life go best for her – if we had to believe that children have ‘enough’ when, order to live, they must gather breadcrumbs off the streets? Would we accept that our parents have ‘enough’ if, in their old age, they lived in crippled destitution, isolated, merely because they had not yet died? We feel instinctively that ‘enough’ means, not just the avoidance of death but a life where the shadow of death is not a constant companion – a life that allows us to think about and do things that are unencumbered by the fear of death or pain. Here, on this Star, we have come to agree that this understanding of ‘enough’ – Real, Actual Life (“RAL”) – is the true standard. We believe that the richness of the individuality of each person (Principle #1) is incompatible with a lesser goal, and Principle #3 compels us to address this extreme risk: there is no richness in an individuality mired in near-death poverty. While it is conceivable that dignity can survive even in the harshest poverty, our objective as designers of this new state – both then and now, as our work is never complete – has been to facilitate Real, Actual Life. This encompasses the pursuit of Spirit and ultra-high value experiences (UVEs) (para. 29) that define and enrich our existence. Nothing less will suffice. RAL is an ambitious, perhaps a utopian, conception of what constitutes ‘enough’; it transcends merely avoiding extreme poverty, early death, and excessive pain. My friends, your new guides, will show you how we strive – imperfectly, to be sure – to facilitate the pursuit of this multi-dimensional goal.” This time I sketched my own drawing to help solidify my understanding, moving my hand across the dust on the pews.

III. Investing Eternally

45.    Judith departed like sunlight swallowed by passing clouds. I walked back over the bridge, which now swayed gently beneath my steps, to return to the other side of the pond. The cobblestones were round and warm. As I knelt to move my hands across their smooth edges, gravel and grass danced through the small gaps between my fingers. I pondered Judith’s last words: Real, Actual Life. How many of us could truly live it? A cat crossed the street in front of me, elegantly and silently, like a lithe athlete. Her shadow lengthened as she reached the pavement, then she disappeared into a small side alley. From the shadows emerged an old, crooked man, stepping into the fading sun. Blinking as if the late afternoon rays pierced his eyes as well as his mind, he walked towards me with such briskness that I wondered if he was walking at all, rather than gliding through frictionless air. “I may look old, there is no doubt about it; and my back may be bent like an elliptic bow”, he spoke, “but I am here to guide you on the next stage of your journey: to show and tell you more about how we are striving to achieve real, actual life for the people of this State.” “What is your name?”, I asked. “My name is Stetten. Quite medieval, as you can see, and not in perfect shape, but very much alive. During my time on this star, life has changed tremendously; but I have lived for so long, these changes are sometimes difficult to comprehend. In any case, let me take you to something you will definitely not have seen before, and along the way, we can discuss in more detail how we organised the investment activities of the State on the Luminiferous Star.”

46.    We set off on our walk, the noise of the street ebbing away into the evening. Stetten shuffled along, largely unencumbered by the peculiar curvature of his body. “Yochanan mentioned (para. 23) that the State’s investment function on this star arose to solve the problem of satisfying the three mutual insurance conditions – reciprocity, specificity and co-investment (para. 17) – such that net contributors to the mutual insurance scheme, i.e. the State, who might otherwise feel that it lacks reciprocity or specificity or perceive it as providing free lunches for some participants, can be compensated through their share of positive investment returns. The role of the EIF (para. 24) is then to invest in projects with an indefinite lifespan and long-term return profile, while the IIFs focus on projects delivering an immediate return visible today. Together, the EIF and IIFs aim to maximise returns, generating the capital needed to persuade net contributors to remain citizens of the State and to fund payouts to net beneficiaries.” Stetten paused briefly, looking around. Then he took my arm before as we turned the corner. Ahead of us was a broad avenue, extending all the way to a distant horizon that gradually absorbed the orange sphere of the sun. “I should clarify,” he continued, “that ‘maximising return on capital’ has a very specific meaning when the Maxi-State, via the EIF, is the investor. ‘Returns’ have two components: (i) the direct and indirect economic returns on invested capital which are generally relatively straightforward to measure; and (ii) a political return – how the EIF can sustain the rationale for stable, repeated cooperation between net contributors and net beneficiaries of our insurance schemes. The key feature of the former is that indirect economic returns can transform the economics of investment projects. Even projects that fail halfway through their expected life often generate valuable know-how that facilitates the success of subsequent projects B, C, D, and beyond. Between them, these follow-on ventures often yield significant, direct financial returns. The indirect benefits from a failed project can be frequent and substantial, making true financial losses rare, though not impossible. As for the second return component, we think of ‘political’ here specifically as a cooperative metric – driven, on the one hand, by the design of the investment funds and programs; and, on the other, by their performance, i.e. the value they generate. Clearly high value is always better: it is preferable to have more value to share. However, the design characteristics are equally important: we aim to systematically engage the Luminiferous State’s citizens in the investment process, creating commitment, co-investment and value – both economic and political.

47.    These considerations have led to four investment criteria for the Eternal Investment Fund: First, the EIF will invest in projects – Eternal Investment Projects (“EIPs”) – that would otherwise receive insufficient or no capital, preventing them from scaling to generate a meaningful return. As you would expect, EIPs are often capital intensive and highly speculative. Second, the range of potential applications of the relevant EIP is either uncertain or very wide. EIPs have therefore high option value, which magnifies lifetime returns. These two investment criteria mean that most EIPs involve investments in technology, whether that’s an engineering application, scientific research, medical products, or, for example, innovations in communications and coding. Third, individual EIPs have a high probability of failure. Consequently, over a conventional lifespan, the probability of success and expected returns are low, often too low for conventional investors to undertake the entire investment alone. This does not imply Anti-State investors are unwilling to invest—private capital pools are vast with diverse return expectations and lifespans. However, sometimes EIF investments are necessary to unlock such co-investments, and where they are not, significant private sector investment strengthens the case for the EIF to be the co-, and not the lead investor. It can lead or follow and generate real value in both cases. Fourth, following from criterion #3, the EIF will never be the sole investor. It invests alongside one or more conventional investors on terms that provide commensurate protection to the EIF in the capital structure of the investee company. Given these criteria, the expected net return for EIPs can often be low or even negative, as super-normal potential returns are offset by high probabilities of failure. The probability distribution of expected net returns skews towards low or zero return outcomes. Private investors will sometimes, but not always, struggle to be the sole investors in such projects. The EIF has a funding and target return profile that is ideally suited for ultra-long-term projects with lower ex-ante risk-adjusted returns. For example, nuclear fusion holds immense value for the Luminiferous Star. It would have been absurd for the EIF not to invest in several projects in this field, even if the resulting EIP portfolio had a negative net present value (NPV) over a 10-year period (or even 50 years) at conventional discount rates, for example because of the collapse of some EIPs backed by the EIF. This leads to the final crucial point for evaluating EIF value creation: the relevant parameter for returns is the EIF’s investment portfolio, not individual investments. “This is so obviously correct”, Stetten remarked, “that it shouldn’t need much elaboration. However, it did require extensive clarification because the somewhat absurd expectation that all projects should generate positive returns almost derailed the EIF’s development early on.” Stetten paused and emitted a light, guttural sigh that sounded like the faint croak of a very old frog. We sat down on a bench that presented itself along our path, facing the evening sun. “This concludes the rather formalistic collation of certain technical propositions. As you will have noticed – Yochanan alerted me to your sharp and observant mind – the EIF’s remit is informed by Principle #3, the importance of focussing on extreme risks (para. 20). While the Maxi-State’s primary insurance function centers around the protection against extreme, catastrophic risks, the EIF’s mission to invest in extreme, ultra-long-term, super-high-return projects is essentially another form of insurance. The Maxi-State is taking out insurance against certain things not happening – nuclear fusion, and the permanent solution to this Star’s energy needs, might never have come to fruition without the EIF’s substantial investments in various fusion projects. Conversely, the Maxi-State’s extreme insurance program is there to protect against the costs of certain expensive events that do happen on occasion. The EIF and Maxi Re share a common perspective when it comes to thinking about the future and risk management: focus on the fat tails of the distribution while leaving the rest largely untouched. This mindset also encapsulates our view about the role of State vis-à-vis the future and what it may bring – those aspects of life that hold the greatest importance because history cannot be changed.

48.    With his aged hands, Stetten picked up a stick from the ground and swiftly sketched two small figures in the fine grey dust near the bench, his speed and precision defying his years. “The left graph”, he explained, “is a frequency distribution of the probability of success or failure of EIPs. The thin tail on the right indicates that a much larger number of projects will fail than succeed. The graph on the right depicts the cumulative gross and net economic returns on EIP, where net means after deduction of the investment cost and is therefore the best measure of real, economic profit. Can you see this all? I don’t have any paper with me, so we have to do with the dust and sand at our feet.” Stetten likely wondered if I – remote, unfamiliar (though perhaps not as unfamiliar as I seemed), from the Old World and not this new one, ancient and yet alive – could truly grasp even these simple mathematical representations. I, on the other hand, marvelled at how he could draw such intricate figures on the surface of the Star, knowing they would soon be swept away by the wind. “As the number of EIP increases, total investment goes up, though not necessarily in a straight line – still we can live with this simplification for now. A minority of investments yield net profits, allowing the EIF to recoup its investment cost. Once the dashed line crosses the horizontal axis, the EIF begins to generate very substantial positive aggregate net economic returns. Of course, this second chart could depict a different, ideal scenario – if all EIPs generate positive net economic returns, the line R(n) would always be above the horizontal axis, sloping upwards and to the right. But what we have here reflects reality: a lopsided distribution of EIPs, where a small number of projects are exceptionally successful while many others are not.”

“Note that my little chart only illustrates the economic return (para. 46 (i)). It does not show the cooperative political return (para. 46 (ii)), which over time has become just as significant as the economic one, shifting the R(g) and R(n) line upwards. The catalyst for this shift was the ultimate acceptance of portfolio vs. project returns as the relevant financial performance metric for the EIF. Once benchmarks are calibrated for aggregate portfolio performance, the choice between two high-value EIPs becomes more complex – how should nuclear fusion be valued relative to quantum computing? The EIF’s task is then to ensure that its investment decisions receive appropriate support. The recognition and acceptance of the EIF’s dual return mandate has been a crucial milestone on its path to success. It has also crystallized an important aspect of investment cost: the opportunity cost of not pursuing a valuable EIP. The best way to minimise this cost is to fund a wide range of EIPs within a chosen field of activity. Many of these EIPs have pay-off profiles akin to deep out-of-the-money call options, and in most cases, the EIF will lose the option premium (i.e. its investment). However, provided the scale and breadth of our EIF activities is large enough, we can achieve an aggregate return profile resembling the one before us – and, as the wind has been merciful, it is still visible: possibly low, zero, or negative returns on a hundred EIPs for quite a while, followed by ultra-massive pay-offs from, say, ten of them.” Stetten paused and I ventured: “Another way to characterise this investment strategy is that discount rates – or required rates of return for EIPs with expected pay-offs far into the future – tend to be much lower than those for EIPs with more immediate pay-offs. Similar to Gamma discounting.” Stetten blinked at me with satisfaction and growled: “Exactly. When we are persuaded by the intrinsic value of an EIP, our return requirement generally declines with the length of time it would take to generate returns. This approach is particularly useful for ultra-high-value EIPs, whose present value might otherwise seem quite small due to their distant future pay-off. By applying ultra-low, time-varying discount rates, we can account for this in our EIP selection. Ultimately, our discount rates – our return requirements – can approach zero. In some cases, we are investing substantial amounts of capital with an expected (real) value a century from now that is not materially different from today, suggesting therefore that the probability of a massive payoff is, say, only 0.01%. No one else can do this – except the Maxi-State via the EIF. And we understand that our calculations are almost certainly wrong because we cannot foresee all future applications of EIPs (para. 47(2)). ‘Expected value’ often holds little meaning – it can be practically meaningless. The question is: is the idea, the technology, the solution really groundbreaking, even if it takes a hundred years to realise? That’s what interests the EIF – just as it does many Anti-State investors, by the way. We simply nudge them along, or join them on their journey. Sometimes we lead, and at other times, we follow.”

49.    “Let me show you one very successful EIP”, Stetten suggested as a floating capsule descended to pick us up. We quickly sped across the rooftops of the metropolis. “In the end, we figured out how to operate self-flying machines in a crowded space such that each machine would choose its travel corridor to minimise time to destination and collision risk with other flying vehicles.” Stetten digressed briefly. “With thousands of other machines navigating the skies, this requires a complex, dynamic calculation in real time – an aeronautical application of the Navier-Stokes equations, if you will.” Soon, we were descending over vast, dry fields of wheat and barley, stretching out below us. A flat, blue stream, its banks thick with cattails and bullrushes, meandered through the landscape, bending left and right in elliptic arcs. To our right, on the western edge of these fields, a towering forest of oaks lined the horizon, bordered by miles of earthen mounds and wooden shelters. We swirled downwards, hovering momentarily before landing at the edge of the field. “This is one of thousands of protected bee habitats we have established across the country. The original objective of this EIP was to cultivate amadou (Fomes) and reishi (Ganoderma) fungi on a large scale. These fungi are remarkably effective in halting the spread of Varroa destructor, the parasitic mite largely responsible for the catastrophic decline in bee populations many centuries ago. Wood-rotting fungi are a rich source of antiviral compounds, and it was discovered – and later confirmed – that they could arrest large-scale bee colony collapse. This site alone operates more than 10,000 feeding platforms, sustaining more than 100 million bees. Across the Star, we have set up more than 1,000 such sites, which have significantly stabilised bee populations. The proximity of this large angiosperm forest, home of amadou fungi, made it natural to extend the project to natural habitat regeneration, addressing another major cause of colony collapse disorder – habitat loss.” We reached the edge of the forest, which was draped in a luminescent sea of colour – luscious fuchsias, golden potentilla plattensis, and pink Jasmine clustered around the trees as far as the eyes could see. The EIP clearly leveraged the pollinator-attracting power of these magnificent colours in a woodland, nurturing a woodland that produces the raw material for the mycoremediation at its boundary. “The wooden shelters you see are feeding platforms,” Stetten explained. “Although they are used less frequently these days, we still depend upon them. The mounds host natural bee nests, found throughout the forest in hollow trees, rock cavities, and small caves. The reduced viral load in bees has greatly strengthened their overall health, making them more resilient to other stresses. This increased resilience reduces the impact of the Varroa mites further, as healthier bees can manage mite populations more effectively.” A gentle humming sound permeated the air. Nearly every flower cup contained a bee, sometimes two or three. The warm scent of honey surrounded us. Stetten reached into one of the wooden sheds and emerged with a small pot of dark honey: “Here is some oak honey for you,” he said, as we dipped a finger into the pot, tasting the malty, woody, and slightly bitter substance. “The bees collect honeydew – a sugary secretion from aphids feeding on the sap of oaks. You can see them hovering above these tiny insects, lapping up the sweet nectar, which they process like regular nectar to produce honeydew honey.” Before us stood a thousand oak trees, lined in perfect formation, stretching five to six miles into the distance. Around them thrived a hundred million bees, rejuvenated and invigorated by the amadou and reishi fungi. An endless carpet of golden potentilla plattensis, fuchsias and jasmine surrounded the bees, and their golden-black honey.

50.    As we returned to the city – a valley of concrete and wood, flanked by concrete slopes and teeming with ten million souls climbing up and down the scales of life – Stetten took my hand and said: “Three guiding thoughts have shaped the creation of the Eternal Investment Fund. First, recognising opportunity cost as the central component of the EIF’s cost of capital (para. 48) suggests that the EIF should be decentralised. To maximize option value and minimize opportunity cost, the EIF needs to invest in a large number of EIPs. While a highly centralised EIF could theoretically manage numerous ‘option contracts’ by controlling every aspect of the investment process – project search, evaluation, selection, capital deployment, management and monitoring (and not just in a supervisory capacity), realisation and reinvestment – such centralization inherently limits the scope of knowledge to the tastes and preferences of those who work in this super-centralised EIF. What we really need is an investment capability that transcends the limitations of our own minds. Only a decentralised, global network of ‘investment nodes’ can achieve this. Such a network allows the State – an institution employing people and an organism encompassing all citizens – to maximise option value by minimising opportunity cost, that is, the cost of not making an investment we should be making (and the cost of making the wrong investment). In a network of n nodes there are n x (n-1) / 2 possible connections. As the network scales by factor of 10 (and then 100, and then 1,000), the number of possible connections – and thus the power of intellectual discourse and discovery – increases exponentially, far beyond what centralised structures can achieve. Leveraging this remarkable feature of large networks is crucial. Our second consideration addressed an issue fundamentally opposite of the first. The EIF serves as the investment arm of the Maxi-State, the Thinking Machine of the State (para. 24). One of its roles is to manage extreme risks (Principle #3), with the State’s investment activities being a form of such (extreme) risk management (para. 47). Is it really viable to rely on a decentralized network to manage a limited number of extreme risks? We believe it is not. While such networks operate like evolutionary machines – ideas being subject to natural selection and mutations, occasionally yielding valuable, unexpected outcomes – they are less suited to systematically managing a small number of ultra-high-value investments that can shape the fate of mankind. Therefore, we also established a dedicated space for a highly centralised team of intelligent, committed individuals to think about those problems and invest in their solutions. Third, the management of the EIF itself must also be centralized. While effective management requires substantive delegation, and we have designed the overall structure of the EIF to encourage and demand this, it must have a single heart. This heart not only manages the EIF’s operations but also communicates its activities to the governance machinery of the State (para. 92-115) to preserve and enhance its legitimacy.” “A structure of equal and opposite equilibrium”, I murmured. Stetten smiled: “Perhaps. The challenge lies in finding the right balance between a central team and the thousands of nodes surrounding it – and the teams surrounding these nodes. The structure we have developed for the EIF therefore consists of two layers wrapped in a third. Layer #1 is the EIF Investment Network (“EIFIN”), an open-source research and investment platform where everyone, including the second layer, can post, manage and invest in unresolved problems in all the sciences and application of human ingenuity. Layer #2 is the EIF Hub, a centralised, relationship-based investment engine. And Layer #3 is a programme of prizes awarded for the best solutions to specific scientific problems. This layer is open to everyone, including participants from Layer #1 and Layer #2, effectively making it the wrapper. It has proven to be an exceptionally effective device. Let me discuss each of these layers in turn.

51.    Layer #1 – the EIFIN – is a globally accessible platform where participants can access public repositories and, upon meeting utilisation and registration requirements, contribute and amend content to tackle a broad spectrum of scientific and technical challenges. As users pose their own questions, generating further derivative inquiries, the range of issues explored on EIFIN has expanded in dynamic and unexpected ways. Beyond its scientific problem-solving functionality, EIFIN also operates an investment engine, channelling capital into the commercialisation of EIFIN projects and further research on unsolved problems. Investment proposals can be submitted by EIFIN participants or the EIF itself. Managing such a large system requires a sophisticated research reward and investment selection engine. This system aims to optimise (i) intelligent participation by investment nodes, (ii) collaboration among nodes, (iii) the output of successful discoveries and solutions receiving EIF funding, and (iv) investment returns in line with the EIF’s investment remit. The design of EIFIN has been carefully crafted to ensure it does not become a state-led hub of innovation and investment. Its purpose is not to increase state power, but to leverage insurance float and other capital to solve puzzles and make unexpected discoveries, with the benefit of these discoveries being shared widely. The goal is to maximize the dispersion, not the retention, of investment value. Therefore, EIFIN’s design must prevent any individuals or groups from capturing the network for their own benefit. As a large, decentralised investment network, maintaining legitimacy is crucial for EIFIN. It must be perceived as a robust, incorruptible system dedicated solely to solving diverse scientific problems and allocating capital to high-value investment projects. Three design features of EIFIN have been instrumental in achieving these objectives:-

a)     EIFIN’s research and investment activities – the search for answers and applications – are structured as an open-source, open-access system that assigns value in real time to (i) specific research and investment projects and (ii) the investment nodes working on and contributing to them. This is facilitated through prediction markets, where investors can trade contracts that place bets on particular outcomes – project X being successfully completed by time T, investment node A contributing the missing piece to commercialise project B. Market participants include institutional and retail investors as well as investment nodes and project backers themselves. The EIF plays a crucial role in these markets, primarily as a major liquidity provider rather than placing bets on particular outcomes, although it does so occasionally. As a liquidity provider, the EIF establishes matched long/short positions across a wide range of contracts, enabling other investors to easily establish and liquidate positions. This encourages investor participation, a critical factor in making prediction markets more effective and efficient. A notable innovation within EIFIN’s prediction markets is the creation of investment contracts centred around investment nodes, which include individuals and institutions. Consequently, EIFIN value can be realised by, and attributed to, projects as well as the brains and hands that contribute to their solution. John K. can become a valuable asset – that is, the underlying asset of investment contracts traded on EIFIN’s prediction markets – in the same way as Project K, thereby providing strong incentives for John to participate on EIFIN,  for example to solve Project K. This structure offers individuals and institutions – the Ultra-Mini-States and their mini-organisations – a direct path to capture the value they generate through their research and development activities, without necessarily having to organise themselves as corporations. This feature has been a central driver of EIFIN’s popularity, success and legitimacy.

b)     The second stage of EIFIN’s operations involve its core investment activities. This is EIFIN’s ultimate – it’s “real” – purpose: facilitating the flow of capital to projects and nodes in need of funding to complete or expand their activities. With basic eligibility criteria in place, anyone can apply for such capital on EIFIN. In practice, the projects and investment nodes that are most successful in securing funds are typically those with a track record of activity on EIFIN and that have been the focus of prediction market trades. This visibility improves their chances of accessing the deep pools of capital through the platform. In fact, their success in securing funding often becomes the basis for specific investment contracts on the prediction market. Moreover, matched funding from EIF is only available for projects that have been valued in the EIFIN prediction market. This serves as a simple, initial screen for both investor appetite and the probability of success of a particular project. EIFIN’s most distinctive feature lies in its innovative capital allocation system, which combines individual investments (from any organisation or institution other than the EIF) with matched EIF funding. This matched funding is allocated in proportion to the sum of the square roots of individual investments committed to each project. Here’s how this works: A block of EIFIN projects is open for funding at various times, attracting investors who contribute varying amounts. Project A appeals to a thousand investors putting up $10,000 each, while Project B attracts ten investors investing $1m each. Both projects therefore raise $10m. A conventional $-for-$ matched funding mechanism would allocate 50% to Project B and 50% to Project A, reflecting the distribution of investment capital between them and treating each $ invested equally, as if it is one vote. However, this conventional approach does not account for the diversity of support received by Project A compared with Project B. EIFIN’s quadratic matched funding mechanism corrects this imbalance, addressing what you could call the ‘tyranny of the majority’ – in this case, the majority of $’s, not people. The quadratic (or square root) scaling factor adjusts the matched funding allocations to account for the intensity of support among the larger pool of contributors for Project A compared with Project B. This approach increases the marginal cost of allocating capital to particular investment projects or investment nodes, making it more expensive for well-resourced investors to capture a larger share of the EIF’s co-investment capital, while enabling a well-organised or well-supported minority (of $’s) to secure a larger portion of the matched funding than a simple $-for-$ system would allow. Under this quadratic matched funding, Project A receives 91% of EIF co-investment while Project B only gets 9%. In aggregate, the preferences of well-resourced investors still translate into significantly larger capital allocations for Project B – 70% in this example compared with 30% for Project A – facilitating, as it did in this particular case, the development of artificial photosynthesis to convert CO2 into fuels. The value of quadratic matched funding lies in its ability to capture more nuanced preferences than a straightforward one-person-one-vote or $-for-$ system. It rewards EIFIN projects that garner widespread support from many smaller investors, facilitating a more efficient allocation of resources and ensuring that projects most highly valued by investors receive funding, not just those backed by the largest sums of money (or $-votes, if you prefer). This approach safeguards minority views, such as those of Ultra-Mini-States with limited capital, from being overwhelmed by a well-capitalised, dominant majority, such as the Maxi-State. By aligning private and public values more closely for EIFIN projects, the quadratic co-investment formula helps to correct the under-provision of certain goods that can occur in simpler majoritarian systems.

c)     The third design feature of EIFIN pertains to the structure of its co-investment. As you have seen, co-investment by the project sponsors or investment nodes seeking to raise capital is a fundamental aspect of EIFIN’s design. In fact, one could argue that the co-investor is the EIF, not the nodes or project sponsors – they are generally the lead investor. Each node determines the matched funding percentage it will seek from the EIF, and generally the higher it is, the more expensive the funding. The EIF is the dominant capital provider only in exceptional cases, generally on projects that it originates, typically via the EIF Hub. Currently, EIF’s co-investment share averages about 25-30%, though it can range from less than 5% to as high as 60-70%. The EIF typically subscribes for convertible preferred shares that rank pari passu with the most senior class of shares and benefit from a liquidation preference. These shares convert into ordinary shares at a 20% valuation discount upon specified liquidity events, such as a sale or a new, large investment, but they do not carry a current coupon and have no minimum return requirement. While the EIF does not directly participate in the governance of its investee companies, its information rights ensure it can adequately monitor corporate developments, project progress or other important investment node activities.”

52.    Stetten beckoned me to follow him, and we strolled down the street toward a canal. Cool air surrounded us. I remarked: “EIFIN seems to stand like a counterpoint to both the Maxi- and the Mini-State. Its decentralised structure contrasts with the centralised nature of the Maxi-State, while it operates on a different plane than the Mini-State, which, though smaller, can be highly centralised in its own, occasionally somewhat parochial domain (para. 21). EIFIN offers a platform where everyone can act as Ultra-Mini-States without the need for an intermediate layer of administrative bureaucracy, investing and participating in ways that are economically beneficial and cooperatively positive. Does it not transform what is often an impersonal, artificial, and remote part of the State into something more personal, more tangible, more immediate? Is this, too, an important ‘design feature’ of EIFIN?” He responded: “Indeed, it is: EIFIN maximises, if you will, Maximum Decentralisation (para. 21). Much like the Digital Data Trading Platforms (para. 37-38), EIFIN exists to offer individuals – the Ultra-Mini-States – more agency while remaining connected to ‘the State’ and one of its core functions: investment, organised and delivered through a specific institutional architecture. As such, EIFIN serves a dual purpose: it strengthens both the Ultra-Mini-States and the Maxi-State. Maximum Decentralisation has been the path towards greater stability and longevity of the highly centralised organism that is the Maxi-State.”  

53.    Stetten continued: “Let’s discuss Layer #2 of the EIF, the EIF Hub. Unlike Layer #1, which is a large-scale investment engine powered by a specific investment selection and funding programme, the EIF Hub is a bespoke, relationship-based investment fund managed by a small team. While the decentralised EIFIN achieves scale – or, more accurately, is scalable: our interest in scale is contingent upon the quality of EIFIN’s deal flow and ideas – because it has so many participants, it cannot entirely replace an investment process that relies on the know-how and personal relationships developed by professional investors over many years. This is what the EIF Hub, Layer #2, is for. It operates with strategic focus. It is non-automated, idiosyncratic, occasionally large in scope, and highly specialised. We often make investments of S$10-20bn (Star-Dollars), sometimes reaching S$100bn, and on occasion as small as S$500m. The opportunities and value in these projects are generally immense, commensurate with the size of the investment. At this scale, automation becomes nearly impossible and unnecessary, as the process of review and management is not much more labour-intensive than for smaller EIPs. However, the cost of mismanagement, as opposed to mere bad luck, is significantly higher. The EIF’s autonomy ultimately hinges on the success of these ultra-large investments. Poor performance would almost certainly lead to the loss of that independence. Furthermore, EIFIN sometimes sources investment projects for the EIF Hub, allowing the Hub to leverage its distributed intelligence. The Hub, in turn, also offers its transactions for co-investment on EIFIN, mirroring EIFIN’s collaborative practices. This reciprocal relationship has become a highly valued and integral feature of the EIF Hub’s investment activities. At its core, the EIF Hub is designed to attract and harness the intelligence of a largely invisible yet effective network of intelligence and relationships. The design principle for Layer #2, the EIF Hub, is straightforward yet intricate: we recruit sharp, heterodox people with deep insights – though not always extensive experience – in their fields and without overpowering egos. The original EIF Hub comprised about 30 professionals from diverse backgrounds. We seek a specific type of intellect: probing, patient, independent, imaginative, capable of pivoting midway through an enquiry. Once the core team was established, overseen by an investment committee, they were granted near-total operational freedom to do three things: develop and manage the EIF’s overall investment strategy; design, and occasionally redesign, the EIFIN process – some call it an algorithm – for investment selection and monitoring; and carry out the EIF Hub’s investment activities. The essential element here is independence. We persuaded the Maxi-State’s Legislative Engine (para. 107) that too much daylight, excessive transparency and oversight, are unhelpful and unnecessary. The EIF team must have the freedom to fail without constant scrutiny from the Legislative Engine, the Executive Engine (para. 114), or the public. Each year, the EIF publishes an annual report containing detailed information about investments made and realised, those that were not pursued, and those that were unsuccessful. It also provides insights into the evolving investment priorities and the global use of EIFIN. EIFIN scales through maximum investor participation across numerous projects, many of which originate as research questions on the platform. Conversely, the EIF Hub scales by investing in a combination of a few ultra-large, high-risk projects and a greater number of lower-risk projects that offer attractive returns – economic and political (para. 46 (i), (ii)) – on capital.”

54.    I asked: “The EIF Hub has now thrived for centuries. There must be a core cultural-cum-organisational foundation that explains its durability. It is straightforward to declare, say, ‘focus’ as central to the EIF Hub’s strategy, but how do you then cultivate such ‘focus’ ex-machina in practice? You can write ‘intellectual independence’ into a strategy paper, but how do you really bring such a concept to life five to seven days a week? There is a cultural wrapper here that is much more difficult to design and sustain. How did you manage to do it?” Stetten nodded. “You are quite right”, he replied. “And at first, we failed in this regard. Hubris took hold of us for some time. Eventually, we sought out the founders of what had been the most successful private investment firm of the time. For more than fifty years this firm had made hundreds of investments and never lost any money. It operated with a small team and had virtually no staff turnover. Its clients rated it more highly than any other investment manager, allowing it to raise ultra-large pools of discretionary investment capital in just a few months. Its investment returns were consistently high and acyclical. We listened intently as they shared the origins of their success – a strict ‘no-asshole’ hiring policy (we loved the term!); a singular focus on one investment strategy; patience; deep expertise. It all sounded perfectly sensible – things I might have said myself. But the turning point only came when we asked them to lend us a team to re-design the EIF Hub after our early setbacks. We realized we needed people who intuitively understood what we were trying to do but had failed to do so ourselves – learning by doing just didn’t work in this case. With the right team in place, we were able to teach others and gradually nurture a culture that mirrored their own. Only when this culture was deeply engrained in the DNA of the EIF Hub could it become an eternal institution, one capable of renewing and extending itself naturally from generation to generation.”

55.    “Let me conclude with a discussion of Layer #3 of the EIF investment activities, the ‘wrapper’ around Layer #1 and Layer #2.  Layer #3 is a competitive program designed to award prizes to teams or individuals who solve important scientific or technological problems. The EIF regularly publicizes new projects, with ca 80% tied to deadlines and the remaining 20% reserved for very substantial, foundational questions with no set timeframes – for instance, the invention of scalable, low-cost carbon-capture technology. The projects with deadlines focus on a larger number of smaller problems with multiple applications across science and technology. Here we have found deadlines are crucial, creating a sense of focus and urgency. By contrast, for the larger, more complex problems deadlines are impractical. This is offset by the structure and size of the prizes, which are substantial, especially for foundational projects. These prizes are often supplemented with private donations and are awarded solely to the winning entry. We have found that a winner-takes-all reward structure is considerably more effective in generating innovative, unusual and successful submissions compared to a system that distributes a fixed pot of money among, say, the top-10 proposed solutions. While both reward schemes are designed to offer the same expected return to each participant, the risk of failure is materially bigger in the winner-takes-all program. This encourages riskier, novel and more creative thought and proposals – the kind of innovation we are actively seeking. In the early days, this reward scheme was heavily criticized as inequitable and ‘elitist’ (a term we found to have no fixed meaning). Yet, this approach has proven to be far more successful than alternatives, with results that speak for themselves. Take, for example, the Digital Data Trading Platforms (DDTPs) we discussed earlier (see para. 37-38). They are a direct outcome of a Layer #3 competition. The EIF launched a competition to develop a platform capable of monetizing digital data on a global scale using a real-time marketplace to balance supply and demand for various types of data at market-clearing prices. The winning entry came from a 3-person team, all barely in their twenties. When the platform launched, it quickly became so popular that incumbent data users found they had no choice but to adopt it. DDTPs stand as one of Layer #3’s most remarkable success stories, having established a now global system of remuneration for a natural resource that is significantly more valuable today than all the non-renewable natural resources combined.” Stetten paused briefly, before continuing. “The EIF’s three investment programs draw on three distinct pools of expertise and capital: ultra-focussed and centralized (Layer #2), a global, distributed network of active participants and investors (Layer #2), and everyone (Layer #3). As such, it has become one of the State’s most successful institutions.” As he spoke, the wind gently shaped the thin, transparent clouds into an image that aided my understanding.

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