Voima Weekly #49 – Physical is King

From my camera roll, on the flight from Las Vegas to Seattle — most likely somewhere over Nevada. Those perfect circles are created by a center-pivot irrigation system: a long irrigation arm rotates around a central point, creating an almost perfectly circular field.

Technology can distribute water efficiently and turn dry land into productive farmland. But it does not create water, it simply uses a scarce physical resource more efficiently. To me, this is also a good illustration of the age of AI. AI can scale information, analysis, and digital production almost without limit, but it does not remove the scarcity of the physical world.

We recently spent some time in Las Vegas with Voima’s management team, looking for ideas particularly around scaling a business, performance management, leadership, and how to build a growing organization without everything ultimately depending on just a few people. It was an excellent week, and America still has a great deal of the energy, entrepreneurial spirit, commercial drive, and bias toward action that I would love to see much more of in Europe.

Perhaps somewhat paradoxically, however, one of the strongest thoughts I came away with was about the things that do not scale.

Artificial intelligence is rapidly changing what is scarce in the world. Writing a good email used to cost someone’s time. The same was true of producing a report, an image, a video, an analysis, or a sales presentation. AI can now create these in seconds, and within a few years a significant share of all online communication will probably pass through some form of AI layer. We may not even always know whether the message we receive was written by a human, a machine, or a human assisted by a machine.

I do not see this as a bad development at all. On the contrary, I believe AI will improve productivity enormously and free people to focus on the things for which human beings are genuinely needed. At the same time, however, it changes relative value. If good text can be produced in virtually unlimited quantities at almost no cost, good text itself is no longer scarce in the same way. If a million personalized messages can be generated at the press of a button, the value of a single digital outreach changes.

An hour spent in the same room with another person, by contrast, cannot be multiplied. A face-to-face conversation, a shared meal, eye contact, or trust built over years cannot be scaled to a thousand people at once. Nor do human beings experience one another only through the words we speak. We constantly read tone of voice, body language, humor, hesitation, motives, and countless small signals that we may not even consciously know how to name.

This has made me think about a broader principle: the more powerful the digital world becomes, the more valuable the physical world may become in relative terms. The digital world scales exceptionally well, but the physical world anchors.

This is not only about how we work or communicate. The same development can be seen in how we build trust. The larger and more distant our systems become, the more interpersonal trust has to be replaced by contracts, processes, verification, and oversight. All of these are necessary, but there is something interesting about the direction of travel: the less people know one another, and the less we can rely on a shared moral foundation, the more systems we need to make sure people behave properly.

I found myself thinking about this in America as well.

There is a great deal I admire about American society: entrepreneurship, personal responsibility, family orientation, and the belief that a person ought to build something. At the same time, you can also see how deeply legalized society has become. The roadsides are full of law-firm advertisements reminding you that if something happened to you, you may be entitled to compensation. An environment like that can easily feed a culture of entitlement and victimhood: when something goes wrong, attention shifts from personal responsibility toward the question of who can be made to pay.¹

At the event in Las Vegas, I met an entrepreneur from Michigan who told me that insurance for his company of slightly fewer than 20 trucks is approaching $50,000 per month, partly because of the growing liability and litigation risk. This is not merely one person’s experience. U.S. insurance regulators at the NAIC refer to the broader phenomenon as “social inflation” and identify commercial transportation, particularly trucking, as one of the areas heavily exposed to it.² According to one study cited by the NAIC, social inflation added more than $20 billion to commercial auto liability losses between 2010 and 2019.³

Trust quickly loses its value if keeping your word no longer matters, and even a contract loses some of its meaning if sufficient legal leverage can always be used to create a new dispute around what was already agreed. At that point, the decisive question is no longer simply what was agreed or what is right, but which side is better able to use the system to its advantage. Law is obviously necessary, but law cannot replace conscience.

A wise man once told me that a person must either believe in God, or at least behave as though God exists. The thought stayed with me, because a person who believes that he is accountable for his actions even when no one else can see them requires less external control than someone whose moral standard rests only on what is permitted, what can be proven, or what can be justified afterwards.

We human beings are surprisingly good at constructing a version of events that favors ourselves. We naturally emphasize the facts that support our own position and overlook those that do not fit. We can find a mistake made by the other party, a legal justification, or some other reason that makes our own behavior appear justified, at least in our own eyes. Perhaps the more important question, then, is not whether I can justify what I did, but simply whether I did the right thing.

In Christian thought, God does not look only at whether someone got the legal details right or whether he was caught doing something wrong. What also matters is the heart from which the action came. We all make mistakes, but a mistake made sincerely while trying to do good is morally different from an act that was intended from the outset to deceive or exploit another person.⁴

Perhaps this points to another paradox of the AI age. The weaker our internal control becomes, the more external control we build through rules, law, data, audit trails, cameras, and algorithms. AI may one day become astonishingly good at determining what a person did. It still cannot give that person a reason to do the right thing when no one is watching.

Perhaps the physical world is not ultimately only about matter. It is also about presence, responsibility, and things that cannot be fully outsourced to a system.

All of this has made me think about the physical world somewhat differently.

I do not think we should resist digitalization. Quite the opposite: we should use AI, automation, and digital systems wherever they genuinely make things better. At Voima, we will certainly do more and more of this as well.

But precisely for that reason, I also want to hold even more tightly to what is not digital: trust built face to face, real people, family, community, and physical real assets.

Gold is real, physical, and finite. Its existence does not depend on what is written in a database, and it cannot be created through a decision, a piece of code, or additional computing power. Technology can make the discovery, refining, trading, and storage of gold more efficient, but it cannot change the nature of physical scarcity itself.

AI can generate a billion new images, a billion emails, and a virtually unlimited amount of other digital content. Tomorrow, it will be able to produce many times more.

But it cannot prompt a single additional gram of gold into existence.

Perhaps this is one of the more interesting paradoxes of the coming decades. The more digital the world becomes, the more information can be copied, and the more efficiently everything digital can be analyzed, the more value may accrue to the things that cannot be copied in the same way.

Time with another person is finite. Family cannot be automated. Trust has to be earned. Physical scarcity remains physical scarcity.

That is why I do not think we need to choose between the digital and physical worlds. We should use digital tools where they are superior. At the same time, it may be wiser than ever to know what we ourselves are anchored to.

The more powerful the digital world becomes, the more valuable the physical world gets. Digital scales. Physical anchors. Physical is king.

–Marko Viinikka
Founder, CEO
Voima Gold Oy

Disclaimer: Voima Weeklies are the personal writings of the undersigned. They do not necessarily represent the official view of Voima Gold Oy or any other company, nor do they constitute investment advice or a recommendation to purchase securities.