Glossary

A term coined by economist Steven Weber, the term describes goods or systems that increase in value the more people use or contribute to them. Unlike rival goods (which are depleted by use) or non-rival ones (which remain unchanged), anti-rival goods are mutually amplifying. Examples include open-source software, shared scientific knowledge, and public infrastructure. Anti-rival goods are critical to innovation and progress, but Misaligned Markets argues that market capitalism struggles to maintain their production because they erode pricing power. They persist mainly through public investment, commons-based governance, or collective norms of reciprocity rather than profit.

Inspired by brute-force search in computer science and evolutionary dynamics, this describes how market capitalism functions as an information-processing system that generates “solutions” to an unbounded search process. Essentially, every firm is an answer to a metaphorical query (e.g., where can I find ten apples?). Because the process is unbounded, it will generate any viable response to the query, including those that distort or subvert the search process through exploitation of differentials, corporate kung fu, or capitalist serialization.

A metaphor that treats capitalism as a technology stack—a layered system that brings markets online. Each layer—legal institutions, political bodies, financial infrastructure, and cultural norms—enables and constrains the operation of markets. Together, they define how ownership, risk, and coordination function within a society.

A metaphorical process describing how objects in the world are encoded with ownership, entitlements, use rights, and even risk so that markets can act on them. Serialization happens within capitalism’s legal and financial layers, translating complex realities into tradable forms. The process is inherently lossy, as context is dropped in the conversion, and can be hijacked through the abuse of legal or regulatory power.

Corporate kung fu refers to the strategic use of capitalism’s own structures, incentives, and blind spots to gain advantage. It’s the art of turning the market’s momentum against itself using regulation, information asymmetry, or legal form to subvert competition while appearing to play by the rules.

Differentials are the structural imbalances within market capitalism—gaps in information, power, cost, or access—that create opportunities for pricing advantage. Knowledge of differentials drives all activity within market capitalism, as exploiting them confers advantages that can be leveraged for profit. They function like gradients in thermodynamics: energy, in the form of pricing power, is “released” when an actor “traverses” them.

A term coined by Austro-Hungarian economic historian Karl Polanyi. Refers to a dialectical process in which expanding marketization (capitalist serialization) is met in response by social protections that address market harms and ground market logic to better serve society.

From economics: a cost or consequence displaced outside the boundaries of a market transaction. In Misaligned Markets, externalities are shadow outputs of optimization—harms or effects the system can’t “see” because they aren’t priced. Negative externalities accumulate when market actors pursue profit within a narrow model of value, shifting real-world costs onto the social or ecological environment.

Refers to four attractor basins that emerge within market capitalist societies resulting from both tensions within capitalism and markets. All paradoxes are mutually reinforcing of one another:

1. Property rights incentivize economic participation but limit competition when used.
2. Property rights enforcement invites exploitation of the property rights regime.
3. Markets reward secrecy but need transparency to function well.
4. Market success undermines market competition.

A metaphor for how innovations (represented by the baton) diffuse through society. Historically, the race began with government-funded basic research, which could be financed at a “loss” to create nearly commoditized public goods or general-purpose technologies—such as the path from relativity to GPS, or ARPANET to TCP/IP to HTTP to the Internet.

Private-sector loss-leaders can also pass the baton through “productive” monopolies like Bell Labs or through investment bubbles, where overbuilt infrastructure is later reused after the crash. But this reliance on private actors introduces fragility: Bubbles are wasteful and private actors aren't always incentivized to pass the baton. Peter Thiel’s monopoly thesis (“competition is for losers”) exemplifies this logic, arguing that firms should hold the baton indefinitely to extract rents.

A term coined by literary critic Timothy Morton. A phenomenon so vast, distributed, and temporally extended that it resists human or market comprehension. In Misaligned Markets, hyperobjects are the large-scale outcomes of runaway optimization—externalities that have accumulated until they form their own environment. Climate change is one example; it is an emergent product of a system that cannot fully grasp the harms it produces.

From economics: refers to transactions where one party knows more than the other and can use that knowledge to gain an unfair advantage (e.g., the “used car” problem). While traditional economics treats information asymmetry as an edge case, Misaligned Markets argues it is the fuel of market capitalism’s optimization process. It confers pricing power on firms that exploit existing structural advantages (“differentials”) or manufacture new ones. Not all information asymmetry is bad, as society benefits when people capitalize on productive knowledge others don’t have. However, since markets reward the path of least resistance to profits, it’s often easier to exploit non-productive knowledge.

Named after DuPont toxicologist Robert Kehoe, who argued that a substance or technology should be presumed safe until proven harmful. It inverts the precautionary principle, which places the burden of proof on producers to demonstrate safety before exposure. In Misaligned Markets, the Kehoe Principle exemplifies how market capitalism exploits uncertainty to delay accountability. By requiring provable harm rather than demonstrable risk, it allows firms to profit from incomplete knowledge, thus pushing the costs of discovery onto the public.

The preferred way to refer to capitalism in Misaligned Markets. A diagnostic term that breaks modern capitalist systems into constituent components: a market economy and a capitalist layer that serializes inputs into markets. Market capitalism is a metastable system that exists on a continuum. The friction between market coordination and capitalist accumulation drives both innovation and systemic instability.

From economics: scenarios where markets create or lead to sub-optimal allocations of resources. This is a contested term among economists, but textbook examples include monopolies, pollution (negative externalities), and information asymmetries. Misaligned Markets argues market failure isn’t an occasional glitch but the natural consequence of market capitalism’s optimization logic. Because firms are rewarded for exploiting structural asymmetries, the system continuously produces outcomes that undermine its own idealized assumptions of transparency, competition, and efficiency. Market failures, in this view, are not deviations from equilibrium but evidence of what the market does best: identify and monetize unpriced differentials faster than society can regulate them.

From sociology: the tendency for advantages (wealth, attention, credibility) to accumulate among those who already possess them (“the rich get richer”). In Misaligned Markets this is reflected in paradoxes 2 and 4 of capitalism.

From physics and systems theory: describes a state that appears stable but is maintained only through constant flux and internal tension—for example, a boulder balanced on the edge of a cliff. A metastable system resists minor disturbances yet can collapse abruptly when pushed beyond its tolerance. In Misaligned Markets, metastability captures how market capitalism sustains itself through continual motion (investment, growth, and reinvention) while never achieving genuine equilibrium. Each success accumulates new risks. The result is a dynamic balance that can persist for centuries yet remains permanently one shock away from transformation or breakdown.

A natural extension of the differentials and gradient metaphor. Market capitalism rewards actors who identify the easiest routes to profit—often through corporate kung fu or by exploiting existing structural disadvantages. Over time, this creates a self-reinforcing cycle in which competition gravitates toward easy opportunities rather than genuine value creation, eroding systemic integrity and long-term resilience.

From economics: describes situations where an agent (e.g., a manager, contractor, or firm) acts on behalf of a principal (e.g., a shareholder, client, or citizen) but has different incentives and more information about their actions. Agents often operate with greater information about conditions on the ground, creating a classic case of information asymmetry. In Misaligned Markets, principal-agent problems are not exceptions, but the system’s default mode. Market capitalism relies on layers of delegated decision-making where agents routinely exploit information asymmetries, often externalizing risk or costs. The result is a system where coordination depends on trust, yet the rewards go to those most skilled at exploiting it.

Coined by German sociologist Ulrich Beck, risk society describes a stage of modernity in which industrial and technological progress produces new, systemic risks that cannot be contained within traditional political, legal, or market boundaries. In Misaligned Markets, the risk society emerges as the endgame of runaway optimization: externalities scale into hyperobjects, feedback into the social order, and overwhelm the mechanisms meant to regulate them.

Mammon is a metaphor for unbounded runaway optimization processes, like the brute-force “search algorithm” driving market capitalism. The name is inspired by Aristotle’s definition of wealth-getting (the pursuit of wealth for its own sake, above all else). Whenever a system single-mindedly optimizes for an internal goal, Mammon appears: exacting “payment” in the form of everything else we value.

Profitability in market capitalism requires optimizing for timing so that “value” is only created when “needed” or recognized by the market. This results in behaviors that systemically drive toward short-termism. Transitory gig-economy labor, overproduction of goods like food and clothing, fragile just-in-time supply chains that break under crisis, startups that pretend to be the next big thing in order to be recognized as valuable. On the flip-side speculators want to anticipate what will be valuable before the system catches up, resulting in bubbles and other wasteful behaviors.

A system whose stability is constrained by its most failure-prone components rather than its average performance. Market capitalism behaves as a weak-link system because its brute-force search produces a wide distribution of outcomes. Most are benign, but some are catastrophic. Even if most actors optimize “honestly,” harmful outliers can dominate the system’s trajectory.

A shorthand for the late-stage ideology of market capitalism that valorizes monopoly as the highest form of efficiency. Popularized by Peter Thiel and Silicon Valley, it reflects a system that has learned to optimize by enclosing existing differentials and suppressing competitors. This is evidence that not all monopolies are productive and some exist explicitly to leverage the paradoxes of capitalism against itself.