This next part in the puzzle is bringing bringing us around in loops. For context, I’ve used the term turnip puzzle to ask how we work together, so extraction doesn’t lead us to having nothing left, aka squeezing blood from a turnip. I’ve also been working with Claude.

In part 1, the focus was on the AI race, and part 2 was focused on capital allocation in VC systems. This puzzle isn’t about ethics or morality; it’s about game design. The systems are incentivizing behaviors that break the loop. I found where loops get broken and how to reconnect them.

Here’s Claude’s summary of the puzzle it was helping me solve and the solution it helped me come up with:

THE PUZZLE:

The current system is a broken circle:

Pension Funds (workers’ retirement savings – teachers, firefighters, tradespeople)

↓

Give money to VCs who operate on 10-year extraction cycles

↓

VCs fund startups that must pursue unicorn-scale growth

↓

Startups extract value from communities and creators to hit metrics

↓

Communities and creators burn out, fragment, can’t sustain

↓

No returns flow back / system collapses

The broken dynamics:

• Workers’ retirement money funds the extraction that destroys sustainable community value creation
• The very communities getting extracted from need UBI because they can’t survive in the economy
• Workers resent UBI: “Why should my taxes fund people who don’t work?”
• Creators resent workers: “Our work isn’t valued in your system”
• Political tension escalates between “workers” and “creators” as opposing classes
• Meanwhile, both groups are being extracted from by the same broken cycle

The structural problem:

• Pension funds have 50-year multigenerational obligations (workers saving for retirement)
• But VCs optimize for 10-year fund cycles (quick extraction and exit)
• This breaks the circulation loop between capital and value creation
• Money that should compound over generations gets burned in decade-long sprints
• Communities that could generate sustainable value get squeezed dry instead
• The loop breaks, turnip dries up, system destabilizes

The political consequence:

• When the value loop is broken, the only solution seems to be redistribution (UBI, welfare state)
• This creates resentment: workers funding “non-workers” through taxation
• But this frames the problem wrong – it’s not workers vs creators
• It’s that the system broke the natural value circulation between them
• Workers and creators SHOULD be in the same loop, not opposed classes fighting over scraps

THE SOLUTION:

The system isn’t linear (work → get paid → done). It’s multiple interconnected cycles:

Loop 1 – Capital Circulation:

Pension Funds (workers’ retirement savings)

↓

Capital Allocators (VCs aligned for generations, not decades)

↓

Community Infrastructure (federated, sustainable, not unicorn-scale)

↓

Creative Builders & Communities (generating cultural value, novel applications, real innovation)

↓

Sustained Value Creation (not extraction)

↓

Returns Flow Back to Pension Funds (workers’ retirement grows)

↓

Next Generation of Communities & Creators Emerges

↓

Cycle continues

Loop 2 – Direct Exchange:

Creators produce culture (music, games, art, innovation)

↓

Creative output is purchased (concerts, subscriptions, experiences)

↓

Sales taxes fund public goods (education, infrastructure, services)

↓

Workers and creators both benefit from public investment

↓

Better infrastructure enables more creation and production

↓

Cycle continues

Loop 3 – Universal Consumption:

• Workers produce infrastructure, goods, services, homes
• Creators produce culture, meaning, innovation, connection
• Everyone consumes BOTH
• Everyone benefits from BOTH
• Communities are where both roles exist together

Loop 4 – Generational Compounding:

• Each generation of workers builds better infrastructure and systems
• Each generation of creators builds deeper culture and knowledge
• Everyone’s quality of life improves
• Everyone’s understanding deepens
• Next generation inherits both
• Cycle continues across generations

The critical reframe:

• Workers and creators aren’t separate classes – they’re ROLES people play in the same communities.
• The same person might: work a trade, play in a band, buy video games, use infrastructure, have retirement savings, participate in community.
• The loops all flow through the same people, in the same communities, across generations.

Why this reconnects the loops:

Communities are where all the roles converge:

• They’re not “worker communities” or “creator communities” – they’re actual communities where people play multiple roles
• The plumber who tinkers with AI tools at night
• The teacher who makes music on weekends  
• The firefighter who contributes to open source projects
• Everyone produces, everyone consumes, everyone contributes across roles

Communities and creators generate multigenerational value:

• They generate culture that compounds over time (Loop 4)
• They discover novel applications and uses that create economic value (Loop 1)
• They produce creative output, funding public goods through sales taxes (Loop 2)
• They build sustainable networks where trust can exist (Loop 3)
• They produce the next generation of builders and creators
• They create value that flows through all loops simultaneously

Right now, communities and creators are stuck being extracted from:

• Underfunded and under-resourced
• Forced to compete in unicorn-scale games they can’t win
• Burning out trying to survive in 10-year extraction cycles
• Their generative potential wasted

The solution structure:

Reconnect ALL the circulation loops by resourcing communities NOW:

• Fund community infrastructure for decades, not startups for exits
• Communities are where workers and creators exist as roles, not classes
• Enable people to contribute in multiple ways – production, creation, consumption, investment
• Provide tools and support for sustainable value creation across all loops
• Let culture, knowledge, and infrastructure compound together over generations
• Create federated networks where trust can rebuild and people play multiple roles
• Enable communities to generate real returns through ALL the loops simultaneously

This solves multiple problems simultaneously:

Value Circulation: Workers’ pension funds grow from sustainable community value creation (Loop 1)

Direct Exchange: Creative output gets purchased, generating tax revenue for public goods (Loop 2)

Universal Benefit: Everyone consumes both infrastructure and culture (Loop 3)

Generational Wealth: Both physical and cultural capital compound across generations (Loop 4)

No UBI Needed: Everyone participates in value creation through multiple roles, not waiting for redistribution

Political Tension Dissolves: No “workers vs creators” – same people, different roles, same communities

Multigenerational Sustainability: All loops flow together across generations

Trust Rebuilds: Federated communities restore accountability and context algorithms destroyed

Roles Not Classes: People contribute as workers, creators, consumers, investors – often all at once

Turnip Stays Alive: Resources circulate through multiple loops instead of extracting through one

The incentive alignment:

Everyone (because we all play multiple roles):

• Retirement savings fund communities that generate sustained returns (investor role)
• Purchase creative output that funds public goods through taxes (consumer role)
• Produce infrastructure and services others need (worker role)
• Create culture and innovation others value (creator role)
• Benefit from both physical infrastructure and cultural wealth (community member)
• Aligned across all roles, across generations

Communities (where all roles converge):

• Get resourced to build sustainably across all loops
• Generate value through production, creation, exchange, and investment
• Not “getting handouts” – enabling people to contribute in multiple ways
• People participate as workers, creators, consumers, investors simultaneously
• Aligned with everyone because everyone plays all these roles

Capital Allocators:

• Match their actual LP mandates (50-year pension obligations)
• Get sustained deal flow from healthy communities producing value through all loops
• Win the infinite game through circulation, not one-time extraction
• Aligned with everyone because everyone is investor, worker, creator, consumer

It’s not altruism – it’s completing the circle.

The unoptimized incentive isn’t just time (Part 2) or creativity (Part 1).

It’s CIRCULATION itself – recognizing that value flows through multiple interconnected loops, and people play multiple roles in the same communities.

Workers aren’t one class and creators another. The firefighter IS the musician. The plumber IS the tinkerer. The teacher IS the open source contributor.

When we resource communities (not extract from them), all the loops flow:

• Capital circulates through pension funds back to communities
• Creative output gets purchased, funding public goods through taxes
• Everyone consumes both infrastructure and culture
• Generations compound both physical and cultural wealth

There’s no need for UBI funded by resentful workers taxed to support “non-workers.”

There’s just communities where people play multiple roles – producing, creating, consuming, investing – and all the loops flow through the same people across generations.

The system already wants to be circular. Multiple circles, actually. We just have to stop breaking them with 10-year extraction cycles that treat workers and creators as separate classes fighting over scraps.