Transcription
Everyone has an opinion about extremely rich people. The top 10 richest people right now have more than the bottom three billion people. They're either innovative heroes or greedy villains.
Greed, for lack of a better word, is good. Tell me, is there some society you know that doesn't run on greed? Because the essence of capitalism, the goal, its function is not to help you, not to save the environment, not to build homes for the homeless. His goal is to transform nature into commodities and commodities into capital. It is to accumulate, accumulate, invest to accumulate. In the only cases in which the masses have escaped from the kind of grinding poverty you're talking about or where they have had capitalism and largely free trade, the fight boils down to one question. Will the drive for profit build the future or destroy it?
To answer this question, we need to stop thinking like economists and start thinking like physicists. Instead of following the money, we need to follow something more basic. Because long before dollars, pounds, gold coins, and even humanity itself, there was the currency of life, energy.
If you zoom in enough to the world around you, you'll see everything is made of atoms connected by invisible springs, what we call chemical bonds. When atoms link together, they form molecules. If you add energy to a molecule, it vibrates faster. When molecules vibrate randomly, we feel it as heat.
The first single-celled organisms on Earth were little energy scavengers. They absorbed sugar molecules floating in the ocean, broke them down, and used that stored energy to swim around and find more sugar and make copies of themselves. And this is where profit begins. These cells could only survive if they captured more energy than they spent getting it. Any surplus energy got stored inside the cell. The first profit is cellular fat. So the most efficient energy foragers survived and reproduced. The first example of profit-driven competition, but at the cellular level.
Even the most successful energy foragers hit a wall. You can drop one cell in a pool of energy-rich molecules and it will divide into billions of cells. They consume everything until the energy runs out. Then the population crashes. A boom-bust cycle. Life's first bubble.
But then life discovered something revolutionary. Photosynthesis. On Earth, this high-energy sunlight hits simple molecules like carbon dioxide and water and breaks them apart, causing them to snap back together into more complex molecules, storing more potential energy. We call this molecule a sugar, such as glucose. Think of it as a molecular mouse trap storing solar energy. When these sugar molecules break down, those wound-up springs unwind, releasing energy that powers all cellular motion. Energy that would have just bounced back into space became food. This was the most important energy innovation since the beginning of life, allowing photosynthetic organisms to grow larger and more complex, eventually becoming the plants we recognize today.
As plants became multicellular, cells specialized. Some captured sunlight, others transported water and nutrients. The division of labor made them far more efficient at capturing energy for the organism as a whole. But every new energy innovation triggers a new form of competition. Plants had to compete for land to capture sunlight. And plants came up with two key strategies: go tall or go wide. Redwoods went tall, hundreds of feet high, monopolizing up to 98% of the sunlight in their area. Grasses, on the other hand, went wide, small and fast to grow, capturing less energy per square foot, but spreading much faster. Today, grasslands cover roughly 40% of the Earth's land.
But success always makes you a target. Plants were packed with trillions of energy-dense molecules, and that's when animals emerge. Life that ate life, not sunlight. It started with animals eating plants, and then animals started eating each other, accessing even more concentrated energy. And notice that unlike photosynthesis, animals were not creating new usable energy. They just moved it around. This is a crucial distinction. The sun produces energy. Plants capture that solar energy and convert it into glucose, making it accessible for the rest of life, while animals transfer that plant-captured energy up the food chain.
And like cells, animals stored surplus energy as body fat. But animals went further, storing energy outside their bodies. Squirrels hid nuts for winter. Woodpeckers drilled holes in trees to store thousands of acorns. Bees took it to the next level. They concentrated their surplus energy. First, they collect nectar and then condense it into honey, nearly four times the energy density. A hive becomes a massive energy bank.
The most sophisticated strategy was environmental engineering, and it looks a lot like entrepreneurship. Beavers spend massive upfront energy to build dams that slow rivers, which create pools where aquatic plants can flourish. They're farming new food that would not have existed otherwise. So from the first cell onward, life discovered increasingly advanced forms of energy capture. Sometimes through fierce individual competition, sometimes through collective cooperation, and most often both at once.
The difference between creating versus transferring energy is important for seeing where profit comes from. Start by drawing a boundary around whatever you're analyzing. Take the beaver. At the individual level, the beaver does work and gets surplus food, more energy than it spent. Clearly profitable for the beaver's body. But then we can expand the boundary a step and look at the local ecosystem. The pond now supports dozens of new plant species that would not have existed otherwise. More usable energy in the system because of the beaver's actions. So, the energy stays positive no matter how wide you look. That's the key.
Now, compare this to a seagull stealing fish from another bird. At the individual boundary, the seagull spent some energy chasing and got back more in food. But expand the boundary to the ecosystem. The total usable energy didn't increase. One bird gained and another lost. It was pure energy transferred.
Now look at the algae bloom. At the algae level, it's capturing massive amounts of energy. Looks extremely profitable, but expand the boundary to the lake ecosystem and it's consuming all the oxygen, killing fish and collapsing the food web. There is less usable energy than before the algae arrived. It only looked profitable when we kept the boundary narrow. This boundary test reveals that some strategies actually create new usable energy at all levels, while others just move it around and in some cases destroy it.
But regardless of strategy, natural limits prevented any one organism from runaway accumulation of energy because competition diffuses energy. The more you accumulate, the bigger target you become. And more importantly, death resets everything. When an organism dies, its accumulated energy gets redistributed back into the ecosystem. A squirrel's cache of nuts does not transfer to its offspring. If a squirrel notices its cache being raided, it will move the remaining items. Property rights die with you. You only control what you can defend while alive.
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Now, we know humans developed unusually large brains relative to body size. This is energy-hungry tissue that consumes 20% of your daily calories, even at rest. But there's a huge payoff. Brains convert energy into information. Your experiences burn energy, like learning how to start a fire, and it gets stored as information after you've learned it. Language allowed information to jump directly from one mind to another.
Fire was the first key breakthrough when someone figured out how to start and control flames. And fire wasn't just useful for light and heat, but what it did to food. Cooking breaks down cell walls and tough proteins and makes up to 40% more energy available than if eaten raw. That extra energy enabled brains to grow larger and discover even better ways to capture energy. And innovations could sweep through populations within a single generation instead of taking thousands of years. And unlike food or tools, knowledge grows when shared.
This accumulation led to massive energy breakthroughs. The first was farming. Deliberately planting and tending crops to capture new energy from sunlight. Farming created something crucial: storeable surplus energy. Grain could be kept for months, supporting far more people per square mile than foraging ever could. And this enabled specialization. Some could focus entirely on making better tools or better shelter or working purely with information, doing knowledge work or making new discoveries.
And then came the ultimate energy unlock, fossil fuels. Coal and oil formed from dead life compressed over hundreds of millions of years underground. Ancient concentrated sunlight with energy density far beyond anything before. One barrel of oil could do the work of hundreds of humans for weeks. This unleashed surplus energy into society, powering engines that animated machines and factories that could run day and night. A wave of profit unlike anything before.
Coordinating this explosion of activity required another invention, money. A portable claim on energy. When you hold money, you can exchange it for others' energy, their labor, their goods they produce, or services they provide. It's an incredible technology from an energy perspective because think about it, gold doesn't rot like food. It isn't stuck like land and it doesn't need feeding like livestock. And so large amounts of money can be used to direct thousands of people to align their efforts towards a goal no individual could achieve in an organization, which is like a programmable colony, whether it's a government or a private company. Each level of complexity requires more specialized roles to coordinate towards that goal.
Industry believes that one of the major requirements for the success of a free economy is that there must be a steady flow of investment capital. We must prevent and eliminate interference with the basic processes of capital formation. These are the processes which make the new jobs possible. But here's where the boundary test becomes essential. Is this organization increasing the total usable energy in the system? Whether by creating new energy sources or making existing energy work better, or is it just repositioning itself to extract from existing flows?
Take a drug company. It spends billions of dollars developing a new antibiotic. Before this drug existed, people died from infections. Afterward, they survived and returned to productive life. If we draw a boundary around the company, it's profitable. And now let's expand the boundary to all of society. The energy stays positive. More people are alive and productive. The firm created new capability that wouldn't have existed otherwise. So the company might get a patent giving it monopoly protection, meaning only they can sell it as a payment for the years and billions spent discovering it.
Compare this to another drug company that takes the same drug just before the patent expires and makes a trivial change, a new coating or slightly different time release, just enough to file a fresh 20-year patent and block any generic competition and then raise the prices. Same drug, no improvement. If we draw the boundary around this company, we see even more profits. But when we expand the boundary to society, we see usable energy decrease. Higher prices mean fewer people can afford the medicine. Some skip doses or stay sick longer. Others go bankrupt paying for it. Now you have sick people who can't work, lost productive capacity, plus money diverted from productive uses towards rent extraction.
This brings us to the fundamental profit test. Whether a cell or a corporation, we can say good profit increases total usable energy in the system while bad profit only works when you keep your view narrow. But even value-creating firms face a deeper problem. Remember nature's limits. Death resets everything. Well, humans removed these limits. We invented property rights that survive death and money that compounds indefinitely. And this creates a fundamental mismatch. Financial claims can compound forever, but physical energy cannot.
For centuries, energy was so cheap and abundant that this didn't really matter. Reality could match the growth in claims. But since around the 1970s, we ran out of easy oil. And now, whether we're drilling deeper wells or building solar farms, each kilowatt-hour costs more energy to produce than the last. The energy cost of energy is rising. And we see it everywhere. Basic wages that used to cover life costs now barely cover rent. Because as energy gets more expensive to extract, human labor buys less of the energy-intensive goods we need: housing, transport, healthcare. The cost of living rises while the energy value of human labor falls behind. Eventually, claims adjust to reality. And history shows us how: debt defaults, currency collapse, conflict.
But here's the final problem. Every time we access more energy, we immediately find new ways to use it. When we made engines more efficient, we don't save fuel. We build more engines. When we invented LED lights, we don't save electricity, we put lights everywhere. This is known as Jevons paradox. The more efficient we become, the more we consume. The question isn't whether we have enough energy, it's whether we can ever have enough. Like algae, we're consuming energy faster than the system can sustain. But unlike algae, we can see it coming. And like the beaver, we have the ability to transform our world. The question isn't if we'll hit energy limits. It's whether we'll see them coming and be ready when we do.
Capitalism will search and move into every corner of the world and transform it into its own image. Greed clarifies, cuts through and captures the essence of the evolutionary spirit.
Making this video meant thinking through complex systems: how energy flows, where boundaries matter, how physics and economics overlap. When I hit those moments, that's when I turn to Brilliant. What I appreciate most about Brilliant is how much thought goes into their pedagogy. Every course builds real understanding through problem-solving, not memorization. Like their science courses where you design circuits and build intuition for how these systems actually work. They also cover data analysis with real economic data sets, exploring rental marketplaces or analyzing coffee production versus GDP. You can learn anywhere on your phone or computer, just a few minutes a day. Start learning for free. Go to brilliant.org/artofthepros or scan the QR code. Brilliant is also giving my viewers 20% off an annual premium subscription, which gives you unlimited daily access to everything on Brilliant.
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