
Silicon Valley’s Ultimate Exit (2013) - nkurz
https://genius.com/Balaji-srinivasan-silicon-valleys-ultimate-exit-annotated
======
etjossem
> Build an opt-in society, ultimately outside the US, run by technology.

Balaji Srinivasan is being considered to run the FDA. If chosen, he is
expected to radically weaken its regulatory power, purportedly in the
interests of promoting innovation in the pharma space. He's described it as
the big enemy for any biotech innovator to overcome.

When we have an opt-in healthcare system, people who are in perfectly good
health will opt into favorable plans only they qualify for. Those born with
expensive conditions or who develop a chronic illness won't be able to opt in,
and will find themselves in a high risk pool paying hardship-tier premiums.

When we have pharmaceutical companies opting into less stringent regulatory
structures, even the most dangerous drugs will make it to clinical trials - to
be tested by people who lack the ability to choose any other way of making a
living. Pharma manufacturers will then base their prices on what they believe
the highest tier of wealth will bear, ignoring the long tail of underinsured
Americans.

The problem with an opt-in society is that only some people get the privilege
of opting in. It's an almost self-contradicting concept. Societies only hold
together if their members _don 't_ favor exit. Members collectively recognize
they're all on the same side, by way of the social contract they've entered
into, and they know the rules need to be the same for everyone. A modicum of
loyalty - in Hirschman's sense - is an absolute prerequisite for a group to be
called a society.

When it comes to our health, let's show some loyalty to our fellow Americans
and use our voices, instead of fleeing the inconveniently poor and sick. The
veil of ignorance hasn't come off yet, after all: if you get cancer tomorrow,
you might well become one of them.

~~~
yummyfajitas
_When we have an opt-in healthcare system, people who are in perfectly good
health will opt into favorable plans only they qualify for. Those born with
expensive conditions or who develop a chronic illness won 't be able to opt
in, and will find themselves in a high risk pool paying hardship-tier
premiums._

You write as if Srinivasan is being considered to run HHS/Obamacare. He's not.
The FDA has nothing to do with health insurance.

 _When we have pharmaceutical companies opting into less stringent regulatory
structures, even the most dangerous drugs will make it to clinical trials - to
be tested by people who lack the ability to choose any other way of making a
living._

I get the impression you want to remove this option from people, thereby
giving them exactly zero ways to make a living. Is that correct?

 _Pharma manufacturers will then base their prices on what they believe the
highest tier of wealth will bear, ignoring the long tail of underinsured
Americans._

You seem very confused. The FDA does not currently regulate prices. However,
FDA regulations do drive prices up and create a lot of monopolies in the
pharmaceutical space.

If you want to learn what Srinivasan might actually mean for the FDA, I
strongly recommend reading this blog post (written by a Trump hater, FYI):
[http://slatestarcodex.com/2017/01/18/watch-new-health-
picks/](http://slatestarcodex.com/2017/01/18/watch-new-health-picks/)

~~~
entee
Looking at this point and one of the ones below, I think there's a bit of a
misunderstanding as to why drugs are expensive and why they take so long to
get to market.

The hypothesis Balaji and others here suggest is that the FDA requires
drugmakers to pass useless onerous regulations and expensive studies before
it'll approve a drug. In so doing, the drugs become more expensive to market.

Having worked a little in the drug discovery area, I'd advance a different
hypothesis: the low hanging fruit are gone.

Balaji in his post explicitly mentions insulin coming to market in 2 years.
That's a pretty easy thing to approve: you have a molecule that is identical
to one produced by your own body, that has known or easily understood
physiology and pharmacokinetics. All you have to show is that your preparation
isn't toxic, so of course it's going to take nearly no time to get approved.

Contrast with a cancer drug. There you have a really complicated disease, not
very good model systems before you get to test the molecule in a human
subject, and when you get there most of your patients die anyway because
diseases are hard/they're too sick/it doesn't work well enough.

I think the information/silicon technology side of silicon valley doesn't
quite understand how hard biochemistry and biotech actually is. In traditional
engineering you know a lot about the inputs to your system (code, silicon,
plastic, etc.) and you know a lot about how they work. In
Biology/Biochemistry/Physiology none of that is true. Your inputs, underlying
system and outputs are hugely complex and in many ways completely non-
understood.

That's why it takes so long to "innovate" or develop new drugs. Bureaucracy
may not help, but it's not the main cause either.

An essential blog to read if interested in drug discovery:

[http://blogs.sciencemag.org/pipeline/](http://blogs.sciencemag.org/pipeline/)

topic relevant post:

[http://blogs.sciencemag.org/pipeline/archives/2015/08/07/on-...](http://blogs.sciencemag.org/pipeline/archives/2015/08/07/on-
the-fda-drug-approvals-and-not-knowing-enough)

Full disclosure: I once met with Balaji for an informal job interview/get to
know the company at Counsyl

~~~
yummyfajitas
I agree that low hanging fruit being gone is an issue.

However, that doesn't mean bad FDA rules are not also an issue. From the blog
post I linked to:

 _Any pharma company that wants their medication approved in both the US and
Europe has to spend a billion or so dollars getting it approved by the FDA,
and then another billion or so dollars getting it approved by the Europeans. A
lot of pharma companies don’t want to bother, with the end result that Europe
has many good medications that America doesn’t, and vice versa. Just in my own
field, amisulpride, one of the antipsychotics with the best safety /efficacy
balance, has been used successfully in Europe for twenty years and is totally
unavailable here despite a real need for better antipsychotic drugs._

~~~
HarryHirsch
Here's a fun data point: people in the drug discovery business do not see the
FDA as an obstacle to doing business. It's the financing model that's commonly
seen as troublesome, with the low-hanging fruit gone coming distant second.

For genuine public health emergencies (anyone remember AIDS?) there's fast-
track approval, the first antiretrovirals were at market remarkably quickly.

~~~
avn2109
>> "...people in the drug discovery business do not see the FDA as an obstacle
to doing business."

Let me play devil's advocate here and suggest that entrenched market
participants _love_ high-barrier-to-entry regulatory regimes. The FDA is
"people in the drug discovery business'" moat.

~~~
HarryHirsch
When you do drug discovery and development safety and efficacy is your
concern. Your aims and the FDA's coincide. It's Pharma-Bro Shkreli who uses
the FDA as a moat, but I think the general public sees him as an aberration
and pharma wishes he would just go away because he draws the wrong kind of
attention.

------
nkurz
I post this now because the author (Balaji Srinivasan) has recently been named
as a contender for heading the FDA: [https://www.statnews.com/2017/01/12/fda-
trump-oneil-srinivas...](https://www.statnews.com/2017/01/12/fda-trump-oneil-
srinivasan/)

Note that "exit" here is not synonymous with "secession", but instead refers
to Albert Hirschman's contrast of "exit" and "voice" as two complementary
approaches that individuals can use to influence the society around them:
[http://peterlevine.ws/?p=11887](http://peterlevine.ws/?p=11887).

In this context, the option of "voice" includes the approach of reforming
institutions from within, while "exit" leaves them broken and bypasses them
with new alternatives. Given Srinivasan's embrace of "exit", this makes him an
intriguing candidate for overhauling a massive federal bureaucracy.

~~~
RangerScience
Amazing read, thank you! I have no idea what this next government will look
like for the US...

Interestingly, the kind of "exit" he's talking about sounds an awful lot like
Timothy Leary's "Turn on, tune in, drop out":
[https://en.wikipedia.org/wiki/Turn_on,_tune_in,_drop_out](https://en.wikipedia.org/wiki/Turn_on,_tune_in,_drop_out)

~~~
thenewregiment1
Amazing read. Such thoughtful Writing.

------
bbctol
One thing a lot of people don't realize about the modern concept of the
"social contract" is that it _depends_ on the capacity to exit, which requires
the existence of the frontier. John Locke's idea of government wasn't just
influential to the development of the United States, it was openly influenced
by the existence of America; he wrote a lot about how the "state of nature"
that exists independent of government _was_ the American frontier (he didn't
care much for/about Native Americans.) Now, the idea that a government is a
social contract between citizens and rulers is universal, but we've eliminated
its original foundation: an empty space citizens can settle when they decide
their government is worse than nothing.

There's no easy solution to this problem. We're out of unclaimed land
(seasteading and Mars colonization wouldn't really resolve it, even if they
were more plausible.) I don't think Srinivasan has a great concept of why
nations work; the problem with a Silicon Valley exit is less that Silicon
Valley doesn't have aircraft carriers, and more that it doesn't have, you
know, farmland, and I don't think the opt-in society would be allowed: Silicon
Valley is rich and prosperous because of the large pool of mainly American
consumers it sells to, and it is protected by the auspices of the US
government. If they really wanted to _leave_ , they wouldn't be able to take
the money-making with them, as the US has no incentive to protect the
businesses of a foreign power. I actually think that instead of getting more
and more small countries as time goes on, we'll get increasing large blocs
caring for things like _defense_ and _very_ general welfare, and increasingly
small, atomized communities, either geographically or online, caring for other
needs. If we have a large United States government that takes care of the
nuclear weapons stockpile, coordinates response to natural disasters, and
makes sure people don't die for arbitrary reasons, smaller communities can
tax, spend, negotiate as they will. And I expect these communities will
increasingly go online; online, Locke's dream can be realized, as there really
is infinite space to colonize (if you don't like your current forum, go found
a new one.) As long as people have a basic level of security, they'll be free
to self-organize and explore new models of society in a virtual world. I can't
tell if this vision of the future is utopian or dystopian.

~~~
ryanmarsh
> You don’t have to actually go and get your own island; you can do the
> equivalent of dual-booting or telecommuting. You can opt out, exit at
> whatever level you prefer.

And the government will be there to kindly remind us that: "Democracy is asset
insurance for the rich"[0] and we may not skimp on the payments.

[0] Austerity: The History of a Dangerous Idea by Mark Blyth

~~~
nkurz
You are likely referring to Blyth's book by this title[1], but for those
desiring a softer introduction, the author also made an excellent 5 minute
introductory video:
[https://www.youtube.com/watch?v=go2bVGi0ReE](https://www.youtube.com/watch?v=go2bVGi0ReE)

[1] [http://centredelangues.ens-lyon.fr/anglais/espace-
etudiants/...](http://centredelangues.ens-lyon.fr/anglais/espace-
etudiants/retire/the-transatlantic-circulation-of-ideas-and-
policies/class-10-reinhart-and-rogoff-bolster-transatlantic-
austerity/Mark%20Blyth%20-%20Austerity-%20the%20History%20of%20a%20Dangerous%20Idea.pdf)

------
Animats
That reads like a right-wing version of Barlow's Cyberspace Manifesto:[1] _"
Governments of the Industrial World, you weary giants of flesh and steel, I
come from Cyberspace, the new home of Mind. On behalf of the future, I ask you
of the past to leave us alone. You are not welcome among us. You have no
sovereignty where we gather."_

Boy, was he wrong.

[1] [https://www.eff.org/cyberspace-
independence](https://www.eff.org/cyberspace-independence)

------
DannyB2
If the USA is the Microsoft of nations, as the article says.

Then would some current or future president be the Ballmer of the US?

~~~
r00fus
The analogy is flawed at the CEO<->President level, obviously. 3 CEOs vs. 44
Presidents?

~~~
nostrademons
There've been numerous Presidents who are akin to Ballmer though, having
presided upon times where things were pretty good for the fortunate segment of
society but doing nothing about looming catastrophes which could be seen but
weren't critical problems. I'm thinking of Fillmore/Pierce/Buchanan in the
run-up to the Civil War and Harding/Coolidge/Hoover in the run-up to the Great
Depression. It's fairly likely that historians will view Dubya/Obama/Trump in
the same way in reference to some future crisis around the national debt,
global warming, or rising inequality.

------
pmyjavec
_That’s how we got cell phones from a toy for Wall Street to something that’s
helping the poorest of the poor all over the world_

I just don't see it, after spending time in third world countries I believe
this is a false statement. It's not free to use a cell phone in the third
world, the poorest of the poor can't afford "credit" nor phones, nor have
anywhere to charge them. If anything I've seen cell phones usually being used
by shady characters using them for nefarious purposes, they're often the only
"poor" who can afford cell phones in third world.

Let's also not forget who actually produced the cheap cell phones that made
them affordable.

God bless this article.

------
adangert
I agree with this article on many points. I wish GitHub had a way to remove
the "forked from" link in order to give more freedom to developers that want
to take a project in a different direction, and properly "exit"

~~~
yummyfajitas

        git clone ....
    

Create new repo in github.

    
    
        git push ....

------
tzakrajs
The governments will sooner outlaw job automation or implement basic income
than allow chaos to take hold.

~~~
tzakrajs
Also, our standards are pretty high right now, so I think chaos would ensue
before our quality of living fell too much.

------
austenallred
Does anybody have a link to Balaji's MOOC? I've heard great reviews about it,
and I have an enormous amount of respect for Balaji, but I haven't been able
to find it - I can only find his MOOC about Bitcoin. Or is that the MOOC he
was referring to?

~~~
vmarsy
It was called called "Startup Engineering" [1]. This course doesn't exist on
coursera anymore, there's a similar syllabus on Stanford's website [2]. The
project was something about building a small web app with node.js and
accepting enabling donations via bitcoin payment.

I was trying to find the course in the archive.org's backup of coursera [3]
but it doesn't appear to be searchable.

[1]
[https://news.ycombinator.com/item?id=5089487](https://news.ycombinator.com/item?id=5089487)

[2] [http://startup.stanford.edu/](http://startup.stanford.edu/)

[3]
[https://archive.org/details/archiveteam_coursera](https://archive.org/details/archiveteam_coursera)

------
pascalxus
I like the way he's thinking and core argument is a good one. But there's one
reason it won't work: Taxes. You can't have a new country when every single
economic transaction is subject to an extremely onerous 35% income tax - you
still have to pay this tax even if you live in another country.

There's probably still a lot of good stuff you can do though: low cost housing
and transportation, just for starters.

------
stephancoral
Why are SV "big shots" so obsessed with making their own little la-la land
fiefdoms (Who actually wants AI/tech to run their country? Like, that is
literally an apocalyptic nightmare of mine) instead of contributing positively
to the country that helped foster their fortunes?

This is some of the most myopic, ego-stroking bullshit I think I've ever read
on this site.

Also the sooner ridiculous "code=law" analogy goes away the better. It's clear
this person has very little understanding how affairs of state actually work.

~~~
doctorcroc
Did you read the article? It explicitly discusses using 'voice' or
'contributing positively to the country' as option #1, and 'exit' as the
backup in case the former is ineffective.

If you think their vision of the future is nightmarish, you don't have to do
anything. Just stay where you are.

------
meanduck
TLDR: 25k Govts is better than 25 Govts.

And I absolutely agree. Its obvious that noone is going to happy with their
Mega Govt all the time. We should work on mechanism that allows creating new,
smaller Govts out of a Mega Govt as easy as possible. Let the market
innovation/compitition advance Governence too.

------
la6470
Yes many people won’t understand this article it but there is a strong and
subtle point that Balaji makes. It is the power that technology brings to the
common people. Technology will one day make food shelter healthcare clothing
ie all the basic necessities so automated and so cheap that everyone can be
guranteed free access to these basic needs. Already certain countries have
started experimenting with annual basic income. This does not stop people from
excelling or working hard to do better but will help us to stop worrying about
going homeless or going broke just because one loses ones job. This is where
technology can take us and this is what we dream about. Thank you.

