Forward Economics
Interlude With the Skeptic
Competing is intense among humans, and within a group, selfish individuals always win. But in contests between groups, groups of altruists always beat groups of selfish individuals.
— EO Wilson, Biologist
If you've made it this far, something in you is persuaded … at least in part.
The logic holds. The general architecture is sound. The historical precedents are real. The math compounds in ways that are genuinely difficult to argue with.
And yet.
For some readers, there is still a nagging voice of doubt. It's been sitting there patiently, arms crossed, frowning, and waiting for the right moment. And now that a breath has been taken after the introduction of the book's core ideas and claims, it clears its throat.
This all sounds wonderful. But you're forgetting something. Something rather important.
People.
People are selfish. People are greedy. People cut corners, game systems, and look out for themselves first. You can design all the elegant architecture you want — but the moment self-interested human beings get their hands on it, they'll find a way to extract, defect, and accumulate. They always do.
That's not cynicism. That's human nature.
History looks like a graveyard of systems that tried to be better and failed. Rome. The Gilded Age. Every civilization that drifted toward extraction and eventually collapsed under its own weight.
So why would this be any different?
These objections deserve a serious answer.
But first, it's worth noting the company the skeptic keeps.
In 1787, Europe's monarchs made precisely this argument about democracy. People are too selfish, too easily corrupted, and too short-sighted to govern themselves. You need a strong hand at the top. Let the people rule and they'll tear each other apart within a generation.
The monarchs weren't being reckless. They were being empirical. Athens fell. Rome fell. Every republic in recorded history had eventually collapsed under the weight of faction, ambition, and self-dealing. The evidence was overwhelming.
Until a small group of Americans designed a system that didn't require better people. One that finally got the rules right.
Separation of powers. Checks and balances. A structure where ambition counteracts ambition and no single faction can capture the whole. The monarchs weren't wrong about human nature. They were wrong about what human nature can produce under the right rules.
Two hundred and fifty years later, no serious person argues that democracy was a naive idea. But in 1787, nearly every serious person did.
The skeptic of the forward economy sits in the same chair today. And the same logic that proved the monarchs wrong is about to prove the skeptic wrong — not with hope, but with reason, evidence, and math.
The Prisoner's Dilemma: Dispelling the Illusion that Self-Interest is King
An appropriate place to dig deeper is with one of the most famous problems in game theory: the prisoner's dilemma. Especially as it is often used to justify the inevitability of selfish behavior.
You might be familiar with it. Two partners in crime, apprehended and held in separate cells, are each given the same choice by the warden: remain in solidarity with your partner and say nothing, or defect by ratting them out.
If both stay silent, both go free. If one rats while the other stays silent, the rat walks and the loyal partner takes the full sentence. If both rat, both go to prison — not for as long as the sucker who stayed loyal, but far worse than if they'd both kept their mouths shut.
The logic is plain. No matter what your partner does, you are better off defecting. If they stay silent, you walk free instead of sharing a lighter sentence. If they rat, you get a reduced sentence instead of the maximum. Defection, powered by self-interest, dominates. Every time
That's the context most people have in mind when they say self-interest is inevitable and greed is simply human nature. And in a single encounter, they're right.
But if this is to be the end of argument, then the skeptic has mistaken the tree for the forest — and it is a crucial error.
Because in the real world, you don't play the game once. You play it over and over again — with the same people, in the same communities, inside the same economy. And the moment the game repeats, everything changes.
Exhibit A: Game Theory and the Prisoner’s Dilemma
In the 1980s, political scientist Robert Axelrod set out to discover what actually happens when the game never ends. He took the prisoner's dilemma and converted it into a points system — a way to measure, precisely and objectively, what wins across hundreds of interactions. If both players cooperate, each earns 3 points. If one defects while the other cooperates, the defector gets 5 and the cooperator gets nothing. If both defect, each gets 1. The temptation is obvious: 5 beats 3 every time. But the mutual defection result — 1 point each — is where the extractors can fall behind over the long run.
Then he designed a tournament. Open to the world's best game theorists, economists, mathematicians, and evolutionary biologists, he invited them to submit computer programs that would play this scored version of the prisoner's dilemma against each other, round after round, hundreds of times per matchup. Hundreds showed up to compete.
The rules: every strategy plays every other strategy in 20 subsequent exchanges, where each strategy can change its position (cooperate or defect) based on the prior exchange. Once a given game is completed, it moves onto the next opponent. Points accumulate for each competitor across the entire tournament. Whoever collects the most total points over all exchanges wins.
The entries that arrived were extraordinary in their sophistication. Strategies with hundreds of lines of code, some with thousands — programs designed to detect patterns in opponents, lure them into confidence, probe for weakness, exploit any sign of trust, and defect at the mathematically optimal moment to extract maximum gain. They were, in short, the finest weapons that self-interest could engineer.
The winning strategy, to everyone’s surprise, had four lines of code.
It was called Tit for Tat.
Cooperate on the first move. Then do whatever your partner did last.
(See this link here for an incredible You Tube video depiction of the tournament and the results. It will change the way you see the world).
That's it. Start with trust. Reward cooperation. Punish defection. Forgive quickly.
Axelrod published the results, to allow everyone to learn from the first, and held a second tourney. Tit for Tat won again.
When he studied why it won, he identified four properties that made it unbeatable in a repeated environment. It was nice — it never defected first. It was retaliatory — it punished every defection immediately, so exploiters could never get a free ride. It was forgiving — after punishing, it returned immediately to cooperation, so a single mistake didn't spiral into permanent warfare. And it was clear — so simple that opponents could quickly learn what to expect and trust the pattern.
The ruthless strategies defeated Tit for Tat in some individual matchups. They could exploit cooperators brilliantly — for a while. But they sacrificed points everywhere else, because their opponents learned to stop cooperating with them. The extractors won battles.
The cooperator won the war.
Read that result carefully, because it is the mathematical spine of everything this book argues.
In a system of one-time transactions — where you take what you can and never see the other party again — extraction is the rational play. But an economy is not a one-time transaction. It is the most complex repeated-interaction system human beings have ever built. The same workers show up tomorrow. The same customers return next quarter. The same suppliers negotiate next year. The same communities vote in the next election.\
In that world — our world — cooperation doesn't just compete with extraction. It outcompetes it. Not because it's morally superior. Because when cooperators find each other, they accumulate more points than those who seek to exploit.
The skeptic might still be tempted to say: but haven’t the extractors have already found each other too? Don’t they cooperate beautifully — among boards, shareholders, and executives — and haven’t they been winning for the past fifty years? But here is what that observation misses: every extractive equilibrium in history felt stable, until it wasn’t. The Romans thought so. The Gilded Age robber barons thought so. History doesn't record a single one that held — it records their ruins.
In other words, Gordon Gekko was wrong — not morally, but strategically.[1]
Greed may work in a single transaction. In a repeated system, it ultimately fails.
The only strategy that endures is cooperation.
Exhibit B: The Results of Natural Selection over Millions of Years
While the results form the tournament may have surprised game theorists and economists, Axelrod's result wasn't a surprise to evolutionary biologists. That’s because nature had already run the experiment at vastly greater scale and over vastly greater time, with clear results.
Look at the apex predators — the species that sit at the very top of their ecosystems, with the most reliable access to resources, the most resilience, the most generational continuity.
Lions. Wolves. Orcas. African wild dogs, whose cooperative hunting strategy produces kill rates that put solitary predators to shame. Dolphins. Chimpanzees.
Nearly all of them cooperative. Almost without exception.
The lone apex predator is mostly myth. What actually dominates — what natural selection, the most brutal and unsentimental optimizer that has ever operated on this planet, produced after hundreds of millions of years of ruthless iteration — is the cooperative form.
And then there is us. The most cooperative species that has ever existed. Not the strongest, not the fastest, far from the most ferocious — but the ones who figured out how to work together at a scale no other organism has achieved. That is why we rule the planet. Not despite cooperation. Because of it.
Cooperation, in other words, is our superpower.
Then Why Does Extraction Still Dominate our Economy?
If cooperation is the winning strategy — if Axelrod proved it, if evolution confirmed it, if we are the living proof of it — then why does the backward economy persist?
The answer stands right before us, every day.
Democracy is the superior form of governance — and yet it took humanity roughly ten thousand years of civilization to get there. For most of recorded history, the monarchs were winning the argument. Every republic had failed. Every experiment in self-governance had collapsed. It wasn't until 1787 that a group of people, with the benefit of the written word, were able to study enough of human history to escape the trap of those who failed before them. They designed a system that worked — not because they were more virtuous than the Romans or the Athenians, but because they had more history to learn from and built a better architecture.
Free enterprise is younger still. Modern capitalism is only a few centuries old. We are still in the early chapters of learning what really works — still experimenting, still refining. Skeptics who ask “why hasn’t this been done before?” mistake the first draft for the final version. The backward economy isn't proof that extraction is the best we can do. It's proof that we haven't finished the design work yet. And that should surprise no one. The Founders didn't look at the failures of Athens and conclude that self-governance was impossible. They concluded that it hadn't been designed well enough. We are at that same moment with capitalism. And the absence of the answer until now says nothing about whether the answer exists.
This is the structural problem the Forward Fund is designed to solve.
Not by making people less self-interested — Axelrod showed that's unnecessary. And not by catching freeloaders faster — that's still policing after the fact. Individual Forward Funds will face pressure, drift, and occasional failure — that is the nature of any human institution. But the architecture anticipates this. When funds split by design, when hundreds become thousands each governed independently, no single failure breaks the system. It's James Madison's federalism in economic form. The freeloading position is not merely policed — it is progressively crowded out. The architecture doesn't need every one to succeed. It only needs enough of them to.
Just like Tit for Tat.
Where Extraction and Virtue Ultimately Lead
If one lives in a predominantly extractive system, the rational move is to get yours. Take as much as you can. Everyone else is doing it. Every dollar you don’t take is a dollar someone else does. Over time, extraction becomes normal. Then expected. Then necessary. The system reinforces the behavior until it ultimately degrades it. That degradation manifests as corruption.
Once corruption arrives, the decline accelerates faster, feeding on itself.
History has recorded this movie. Repeatedly. The Mayans. The Aztecs. Rome. Communism. And now, the last fifty years of American capitalism, where 80 percent are left behind. Different timelines, different costumes, but ultimately the same spiral.
But this is only half the story.
And here’s what is so important to see clearly: virtue is the other side of the coin. And it feeds on itself the same way.
In a system where contribution is rewarded, generosity becomes rational, too. Where profits are shared by design, workers invest their full capability — because they share in what that capability produces. Where the rules make cooperation the winning strategy, defection becomes conspicuous, costly, and rare. We are social creatures, and we mirror what we see. Trust compounds. Reputations build. The forward business that shares its profits attracts better workers, who produce more, which generates more profit to share, which attracts still better workers. The cycle lifts ever upwards. Axelrod’s tournament, and natural history, prove it.
The final lesson, then, deserves to be stated clearly.
When self-interest meets intelligence, it cooperates.
[1] For those unfamiliar with the reference, watch the 1990s-era movie, Wall Street, with Michael Douglas.
[2] thanks to Vitaly Garlev for the pic at the top of this page, which is pulled from Unsplash.