The Great Disintermediation

The Core Argument

Technology periodically reshuffles power by removing the need for intermediary institutions. Just as the printing press disintermediated the Catholic Church's monopoly on scripture and enabled the Reformation, the internet, social media, and AI are disintermediating the institutions of the post-Cold War order.

The pattern:

Institutions accumulate power by controlling access (to information, credentials, distribution, capital)
New technology removes that control
Individuals can now do directly what required institutional permission
The old institutions don't disappear immediately—they hollow out, losing legitimacy even as they retain formal power

The current instance: The post-Cold War elite consensus—post-conflict, post-scarcity, post-ideological—was built on institutional gatekeeping. That consensus is now colliding with reality, and technology is the weapon the public uses to bypass and challenge it.

The key insight: Those following the old pattern will fail, even when they "win." Politicians get elected but can't govern. Executives get hired but can't lead. The playbook that worked in an institutionally-mediated world actively backfires in a disintermediated one.

Key Claims

1. Old pattern actors fail even when they win Politicians elected on institutional backing struggle to govern. Executives hired through traditional credentials underperform. The gap between elite narratives and reality becomes their undoing. (Cummings: "They fall into the crack.")

2. The Elite Reality Gap widens before collapse Institutions don't fail suddenly—they hollow out as elite stories diverge from reality. The gap becomes visible to outsiders while remaining invisible to insiders. (Cummings, via McLuhan: "A new medium becomes invisible during its innovation.")

3. Narrative whiplash accelerates (Cummings) The old media creates constantly flipping official stories. Each reversal erodes credibility further. "Wrestling is real. The news is fake." Those still watching old media live in a constructed reality disconnected from events.

4. Technology determines the timeline Each major communication technology shift triggers a reformation-scale disruption. Printing press to Protestant Reformation. Rail and telegram to 1848 revolutions. Internet and AI to current disruption—we're approximately 30 years in.

5. System replacement, not reform (Cummings) You cannot fix the old order by putting new people in old institutions. You cannot fix it by asking old people to change. "You have to change the people, the ideas, the institutions and the tools all together." Build new, don't reform old.

6. New gatekeepers emerge from builders Power shifts to those who understand technology AND build alternatives. Don't wait for permission. Start building now—especially where AI makes old institutions obsolete (education, media, credentialing).

What I'm Watching

Core Thesis Signals

1. Old pattern winners who fail to execute Politicians who win elections but can't govern. Executives hired through traditional networks who underperform. The more "winners" who fail to deliver, the stronger the thesis.

2. Elite reality gap visibility (Cummings) Are more people noticing the gap between what elites say and what's actually happening? When outsiders see what insiders can't, the tipping point approaches.

3. Narrative whiplash frequency (Cummings) How often does the official story flip completely? The faster the reversals, the more old media loses credibility, the more power shifts to direct voices.

Deinstitutionalization Signals (Clark)

4. The "two guys and a tool" pattern Clark started his fund management career needing a large institution for credibility, distribution, and research access. By mid-2000s, "two guys and a Bloomberg terminal" could compete. Where else is this pattern emerging? Legal, accounting, consulting, medicine?

5. Watchability over quality Rugby league beats rugby union in Australia because it's more watchable, not better. Restaurants optimize for Instagram, not taste. NFL's value comes from advertising opportunity, not popularity. What industries are shifting from "quality" to "shareability"?

6. Meme dynamics in serious domains Meme stocks changed finance. What other "serious" domains are being disrupted by networked attention rather than institutional credentialing?

7. Tech platforms as new sovereigns Meta has 4 billion monthly users—more than any government. In China, government controls tech. In the US, tech increasingly influences government. Who are the new gatekeepers?

Revolt of the Public Signals (Gurri)

8. Public challenges to expert authority When does the networked public successfully challenge credentialed experts? Covid policy reversals, financial "experts" vs retail investors, media narratives vs citizen journalism. Track the win rate.

9. Formal power without actual influence Institutions that retain titles and budgets but lose ability to shape behavior. Universities grant degrees but employers ignore them. Media publishes but audiences route around. Credentials that no longer credential.

10. Impossible coordination becoming possible What collective actions are now possible that weren't before? Flash movements, decentralized organizing, cross-border coordination. The public can now do what previously required institutional infrastructure.

Implications

For Investors

1. Institutional arbitrage Which institutions are hollowing out—retaining formal power but losing actual influence? Short the old pattern. Which builders are creating alternatives? These are asymmetric bets.

2. The new gatekeeper map Power doesn't disappear—it shifts. Tech platforms are the new sovereigns. Authentic voices with large followings are the new credentialing authorities. Map who is building infrastructure for the new pattern.

3. Technology adoption as the tell Those following the new pattern understand technology and use it to amplify. Those clinging to old pattern are often contemptuous of or ignorant about technology. This reliably signals who wins and who loses.

For Society

4. Instability is the norm for now We're early-Reformation, not post-Reformation. The printing press to Peace of Westphalia took 150 years. We're maybe 30 years in. Plan for continued disruption, not a return to stability.

5. The elite reality gap will widen before it breaks (Cummings) Institutions will continue issuing confident pronouncements while losing the ability to shape events. The gap between official narrative and lived reality grows until it snaps.

6. Legitimacy flows from authenticity, not affiliation (Gurri) Trust shifts from "what institution are you with?" to "do I believe you?" Credentials that once settled arguments now start them. This is disorienting but not reversible.

For Businesses

7. The "two guys and a tool" threat is coming (Clark) If you're in a knowledge industry—legal, accounting, consulting, medicine—someone with AI tools and authentic presence will soon offer 80% of your value at 20% of your cost. Be the disruptor, not the disrupted.

8. Build direct relationships now When institutions hollow out, what remains is trust built directly. Your clients, your audience, your reputation. This is your moat against deinstitutionalization.

9. Optimize for visibility, not just quality (Clark) Rugby league beat rugby union by being more watchable. Restaurants win on Instagram. Your expertise matters—but invisible quality loses to visible authenticity.

For Government

10. Old playbooks guarantee failure (Cummings) Politicians who win on institutional backing can't govern. The system produces "fake meetings, fake decisions, fake news." Following the old pattern leads to victory without power.

11. System replacement, not reform (Cummings) Putting new people in old institutions fails. Asking old people to change fails. "You have to change the people, the ideas, the institutions and the tools all together."

12. Science and technology must move to the center (Cummings) A civilization built on science and technology cannot be governed by elites contemptuous of both. This gap between what government understands and what reality requires is existential.

Connections

AI & Knowledge Work The Great Disintermediation accelerates and is accelerated by AI. Clark's "two guys and a tool" pattern becomes "one person and an AI" pattern. The Knowledge Programmer emerges as the new authentic voice—someone who understands technology AND can build. Context Graphs become the new institutional knowledge that survives the transition.

Reshoring/Deglobalization The post-Cold War consensus included hyperglobalization. As that consensus collapses, deglobalization accelerates. But the deinstitutionalization pattern also applies to global institutions (WTO, UN, EU)—formal power without actual influence.

Inflation Pressures The elite consensus held that inflation was solved. Reality reasserted itself. This is a specific instance of the elite reality gap—expert consensus divorced from what's actually happening.

US-China Competition (Clark) Two models of how technology and government merge. In China, government controls tech. In the US, tech increasingly influences government. Both are responses to deinstitutionalization—attempts to create new institutional frameworks for the new technological reality.

Demographics Generational conflict is central to The Great Disintermediation. Older generations built and believe in the institutional order. Younger generations see through it. The "sclerotic old order" is literally run by people who came of age in a different technological era.

This thesis synthesizes Martin Gurri's "The Revolt of the Public" (information abundance enabling public revolt), Russell Clark's "deinstitutionalization" framework (technology making institutions unnecessary), and Dominic Cummings' analysis of elite institutional decay (the reality gap, narrative whiplash, and the need for systemic replacement).

The Great Disintermediation

Signal Momentum

Signal Momentum

Thesis Evolution