Multilayer Thinking: Bubble Tricks and the Age of the Ecosystem

Consider bubble tricks. Someone takes a bubble, blows more bubbles in it, filled with smoke, and grows the main bubble in the process.

The big bubble is the economy. It’s everyone doing something someone else can’t. Studying the economy is a function in this system, so it can’t understand the system, by definition of the players in that system. Since we can’t conceptualise economy without being in one, by fudging my logic a bit, we can say the economy is the thing economists can’t fully understand.

Now, let’s make something they can. These inner objects are the smaller bubbles. To understand them, economists must be outside the systems, outside the bubbles. These are, effectively, games. Now, the thing is, games matter. Football is a real economic driver. Videogames are a huge market and casinos are real.

But we now have crypto, fintech, AI models, tokenomics, and more generally, any suitably boundable financial arbitrage opportunity — arbitrage happens at the layer above. These present cases where we can bound a game of such size, complexity and freedom, that it is a real economy and a game. But it’s not the economy.

In these games, we adjust distributions as we like. We can fill them with any colour smoke we like, even with more bubbles. For practical purpose, and with behavioural economy, we can manage these games to affect the real economy. Nonetheless, the fundamental laws governing the higher thing — the economy where we cannot comprehend what the whole system is doing because we are players in it — remain governed by the same rules. This can grow in scope as much as it wants using our games, but we must always remember that these are separate things.

This is “multilayer thinking”.

We can even pop those bubbles to change the colour of surrounding bubbles, and figuring this out is an important economic driver. That’s how we can shift from one model to another.

The big bubble can be locally affected, sure — when a core bubble pops, a whole new sector is born. But always remember: the big bubble must not be popped. Nothing contains it. It can only be incrementally adjusted, and the way to do that is with the bubble beneath.

However, that says nothing for the inner bubbles. Historically, we would start at the smallest bubble — the company — and grow that, which then affects a bigger bubble — the community — and then the economy. But with modern computational techniques, we can simulate that bubble in a computer, and then act on the bubble above instead.

We work at the community level. And how to deal with these objects is tricky. Not just scaling business, one scales an ecosystem. We must know how to grow that second bubble. How to pop its inner bubbles to make it grow. And how to pop it to blend it with other ecosystems.

The age of the ecosystem is nigh. If you want to make change, understand what contains it. And that’s still the economy we know and love.