Go East, Young Man

Will Bitcoin's future rise in the East or set in the West? Saudi Arabia's support for frontier technologies may offer a clue

Jul 27, 2023

East vs. West

"Go West, young man" - American newspaper editor Horace Greeley’s famous quote feels as applicable today as it was in 1865:

“Washington [D.C.] is not a place to live in. The rents are high, the food is bad, the dust is disgusting, and the morals are deplorable. Go West, young man, go West and grow up with the country.”
— Horace Greeley (New York Daily Tribune: July 13, 1865)

Today the rents & taxes are high (just look at the quality of infrastructure, healthcare, and education offered in return). The food is poison (literally). The filth is out of control (hello, San Francisco). And if Greeley thought the morals were deplorable in 1865, just remember this song was America’s #1 Billboard track the same year Dr. Seuss was canceled for “offensive content”.

So the “Go West” sentiment is understandable. And in fact, it’s been great advice to follow for a long time: from the Fertile Crescent to the Balkans to Western Europe, America, and recently to the West Coast.

But today, pursuing advice to abandon a decaying and opportunity-bankrupt land for greater opportunities elsewhere may instead take you East, to places like Abu Dhabi, Dubai, Riyadh, Jeddah, NEOM (??), and Bangalore.

Rising in the East

M31 Capital has been spending a lot of time in the Middle East this year and can confirm that in many ways the American Dream is alive and well over there.

The business-friendly and pro-innovation atmosphere in places like Dubai and Riyadh is immediately apparent, and stands in stark contrast to the United States right now, where absurd taxation, Educate-Then-Excommunicate visa policies, “Anti-crypto armies” and A.I. moratoria threaten America’s longstanding reputation as the entrepreneurship capital of the universe.

Today it is the Middle East, of all places, where forward thinking entrepreneurs are offered tax rates that incentivize startups, a visa program that aims to attract, rather than reject, the best talent in the world, and a government that won’t stand in their way as they experiment with revolutionary new technologies & ideas.

Like linear cities:

Saudi Arabia The Line: Designs unveiled for one-building city as part of the Neom project | CNN — The Line

Floating manufacturing plants:

Oxagon: a reimagined industrial city — Oxagon

Ski resorts in the desert:

Trojena: inside Saudi Arabia's snow-topped mountain tourist destination — Trojena

Yes, these giga-projects amount to a Hail Mary thrown by a country overly-reliant on a dying energy source. But there are worse ways to deal with your existential problems (I’m looking at you, Putin). And because Saudi is more reliant on oil than any country in the world, it also has a greater incentive than any country in the world to make alternative energy sources work.

Instead of going down with the oil ship, they’re going to cannibalize themselves.

But regardless the reason, they have the will and the means to think BIG. And they are. Reimagining everything from scratch: urban life, energy production, architecture, finance, transportation, education, and more.

That creative freedom explains the optimism and the energy there: many of the world’s most creative and technologically capable minds are being drawn to Saudi Arabia where they’re free to experiment with frontier technologies that have the potential to reshape the world.

Why does M31 Capital care?

Because this blank slate, blue sky thinking may make the Middle East a natural home for Bitcoin (a futuristic technology rethinking the concept of money from scratch), DeFi (frontier technologies rearchitecting Wall Street financial products & services from scratch), and Web3 (a complete reinvention of the entire global internet).

And we’re not the only ones realizing this…

How Did This Happen?

Saudi and the UAE are copying much of the playbook that made America successful:

Pro-Innovation: America & the West seem to be voluntarily ceding their technology lead, while the Middle East is embracing tech innovation across all industries: manufacturing, healthcare, agriculture, finance, education, etc.
Brain Drain: The Middle East is “brain-draining” the world to attract the brightest minds: slashing taxes to zero, establishing economic free zones, simplifying the visa process, etc. The UAE is encouraging immigration and Saudi is incentivizing companies to move HQs to Riyadh. They’re competing for the world’s top talent.
Low Bureaucracy: The Middle East is deregulating and privatizing industry. Government decisions are data-driven and politicians are held to quarterly KPIs like managers at a high-functioning company.
Moral Fabric: Moral & social decline in the West vs. strong moral & social fabric in the East. The upcoming book, ‘Why Empires Fall: Rome, America, and the West’ outlines the cultural factors that collapse nations. Saudi’s historic prohibition of drugs & alcohol and support for strong family structures & Abrahamic morality are a few obvious differences from recent America.
Post-War Boom: America just finished spending two decades and +$7 Trillion waging war in/on the Middle East and what was the outcome? The Middle East (Dubai, Abu Dhabi, Riyadh, Jeddah, NEOM) has never been stronger. Historically, some of the best investment opportunities of all time are post-war economies.
Low Time Preference: America thinks 1 earnings quarter ahead, at most. KSA is thinking decades ahead, in part related to the fact that 63% of Saudi Arabia’s population is under 30 years old. Their leader is 37. Average age of a U.S. Senator? 64.
Hardware vs. Software: The West has overfocused on software at the expense of physical hardware like urban infrastructure and “the world of atoms” as Peter Thiel puts it. The East is striking a more encouraging balance. Integrating frontier software like blockchain and AI into frontier hardware like The Cube.

The Mukaab: Inside Saudi Arabia's massive cube shaped city

Started From the Bottom…

Saudi is rapidly Westernizing, modernizing, and making huge progress on the human & women rights fronts. And the country hilariously already has much of what the American Left and Right both claim to want for their country: universal healthcare, tuition-free universities, huge sustainable energy investments for the liberals, plus strong family values, a business-friendly environment, and no income tax for the conservatives.

The country is far from perfect, I get it. But look at where they were and look at where they are. Saudi is clearly heading in the right direction, eliminating the morality police and increasing freedom for 40 million people, all of which should be celebrated.

But, like a geomagnetic reversal, it’s an incredible change in an incredibly short period of time which can be… messy. We should also be extremely wary of the illusion of authoritarian efficacy. Building on the ‘Foundation’ motif from our ‘Crypto Claps Back’ post, there are too-easy parallels to draw between the Kingdom of Saudi and the Empire of Trantor:

The all-powerful leaders (Crown Prince vs. Emperor), the similarly named giga-projects (the “Starbridge” on Trantor & the “Skybridge” in Riyadh), the similar-looking ocean cities of Oxagon & Synnax… there’s even “The Vault” on Terminus and “The Vault” in Trojena.

Eerie Sci-Fi parallels aside, two things to seriously keep an eye on:

Bread & Circuses
Legalizing alcohol, inviting Mariah Carey to Riyadh raves, a relentless focus on tourism & entertainment… these are the same ‘Brave New World’ style population control tactics we criticize the West for. Legalize weed in NYC and they’ll forget about Epstein. Give them a David Guetta concert so they shut up about Khashoggi.
Secularization
Saudi Arabia’s progress involves a fairly heavy and intentional suppression of religious practice. The “enlightened” Western liberal will cite this as a positive, but as every good communist (and reader of Huxley, and student of Ancient Rome…) knows, the path to mass-compliance is paved with religious subjugation.

Conclusion

When the Roman Empire fell and the West entered a 900 year Dark Age, the Middle East exploded, entering its own “Golden Age”. Today, signs of the American Empire in decline may indicate history repeating.

The UAE, Saudi Arabia, and India are again in rapid ascension. America, Canada, and Europe increasingly feel like Countries Controlling Citizens, while the Middle East feels more like Companies Competing for Customers. A much healthier arrangement vs. today’s unbalanced political dynamic.

Time will tell whether the Middle East entering a 2nd Golden Age.

My advice? Go East, young man.