The Stake Theory

Zohran Mamdani just won his mayoral race and I'm sitting here trying to figure out what the fuck is happening. New York City is becoming clown world.

This guy is a straight up socialist. Not some watered down progressive version. Full blown "capitalism is evil" messaging. And he won big. Young people came out in droves to vote for him.

Everyone keeps saying these kids are brainwashed or don't understand economics or whatever. But I think there's something else going on.

I was reading this email thread and Peter Thiel had this line that completely changed how I see this whole thing. He's talking about why young people are drawn to socialism and he says: "when one has too much student debt or if housing is too unaffordable, then one will have negative capital for a long time and/or find it very hard to start accumulating capital in the form of real estate; and if one has no stake in the capitalist system, then one may well turn against it."

That's it right there.

People defend what they own. If you have equity in something, you want it to succeed. If you have nothing, you have nothing to lose by burning it down. If you can't buy a house, can't build equity, can't accumulate assets, can't get ahead despite doing everything "right," then of course you're going to question the system. When capitalism doesn't work for you, why would you defend it?

I see this everywhere. The employees who actually give a shit about the company are the ones with stock options. The ones just collecting paychecks? They couldn't care less if the whole thing collapses tomorrow.

Same thing with relationships. People who feel like they have real investment in the outcome will fight for it. People who feel disposable just check out.

So when I look at these young voters supporting full blown socialists, I don't see ideological brainwashing. I see people who've been completely locked out of traditional wealth building responding rationally to their situation.

Think about it. You do everything right. Good grades, college degree, follow all the rules. But you can't buy a house because they cost 10x what they used to relative to income. You can't build equity. You can't invest because you're drowning in debt. The system works great for people who got in early but it's completely fucked for you.

Of course you're going to be open to alternatives.

The people freaking out about this are missing the point entirely. They think it's about messaging or education. "If we just explain capitalism better, these kids will come around."

But it's not about understanding. It's about participation.

When people can't participate in a system, they want a different system. When they have no stake in the current game, they want new rules.

Here's where I think there's a fundamental problem though. This whole dynamic assumes people are actually trying to play the game and being excluded. But from what I see, most people don't want to work anymore.

Everything involves crutches and cushions now. People don't face the music anymore. We live in a time where doing the hard thing or facing difficulty is looked at as taboo or damaging for mental health. These younger people have accepted this infectious disease that basically says having no mission is okay. Consuming all day is okay. Not working hard or pushing the envelope is okay.

I strongly disagree with the thinking that anyone is excluded from playing the game. I started from zero. Had no handouts or help when I first started and found a path. So have countless others. The game is still there. The opportunities still exist. But they require the same thing they always have: actual work.

The victim mindset is a huge factor in this thinking. It's easier to blame the system than to acknowledge you haven't put in the effort. It's more comfortable to say capitalism is broken than to admit you haven't developed skills the market values.

I get the stake theory. It makes sense psychologically. But there's also this underlying assumption that people are entitled to stakes without earning them. That just showing up and following basic rules should guarantee ownership and wealth building.

That's not how it works. That's never been how it works.

The system isn't perfect, but it's not excluding people who are willing to do what it takes. Most people just aren't willing to do what it takes anymore.

This isn't going away with better PR campaigns. This gets solved by giving people real ownership. Real equity. Real skin in the game.

But that ownership has to be earned. That equity has to be built. That skin has to be risked.

Without stake, you don't have buy in. Without buy in, you get people voting to burn everything down.

But without effort, you don't get stake. And effort seems to be what's really missing.

The writing's on the wall. Either figure out how to give people meaningful participation in wealth building, or keep watching them vote for people who promise to tear the whole thing down.

Just remember that participation requires participation. It's really that simple.