The rules of the game
It’s interesting to think of life as a game.
What is the goal?
What are the rules?
The goal is up to you, one luxury we have is the freewill to decide how ambitious we want to be, and the universe expands or contracts to match our desired level of ambition.
For the sake of this note I will say that the goal is control of scarce resources.
Time + Currency + All other scarce resources.
You can make more currency and acquire more scarce resources but time is the main one.
Why should you learn the rules?
A founder running a business which is not creating value, won’t be in business very long.
I do believe, to be a founder creating value, it would be irresponsible to ignore the rules. I believe it is important to learn the rules, and make an informed decision which rules you will and will not abide by, and build your plan with this at its core. As explained below, you can knowingly break the laws of the land, and you only have to deal with the consequences.
So in my opinion, if you’re going to build something, you build it right. If you’re planning on creating nothing of value, you won’t have a profitable business and therefore don’t need to concern yourself with the rules of the game, because you won’t be playing for very long.
learn the rules ≠ follow the rules
TLDR: This is how I would allocate my time studying.
Innovative product business: Physics = 70%, Laws of the Land = 20%, Enforceable Rules = 5%.
All other businesses: Laws of the Land = 70%, Enforceable Rules = 20%, Societal Rules = 5%.
What are the rules?
- Laws of Physics - unavoidable for innovative product businesses
Elon Musk is quoted as saying “Physics is the law, everything else is a recommendation” which I believe is true.
Admittedly I haven’t studied these nearly enough, which I plan to do ASAP.
- Law of the Land - frequently changing, frequently enforced
This is the simplest to explain, and possibly the longest to learn.
The laws of the land you operate in apply to you, so you should learn them.
It’s important to remember that “Physics is the law, everything else is a recommendation”.
Some recommendations are enforced more heavily and frequently, its up to you to make an informed decision which you will abide by.
If a law is difficult, expensive or slow to find someone guilty of breaking it, you should weight it less than one which is quick and easy to identify. For example I would expect HMRC to come after your missing corporation tax before your missing plastic packaging tax.
If a law has a low fixed penalty they are often uneconomical to enforce.
- Enforceable Rules - rarely enforced, critical when enforced
These are rules set by an entity you depend on, which extend beyond the law of the land. Which can result in your use of the entity being revoked if you do not comply with the rules.
The importance of these can be measured: likelihood of enforcement * cost of consequence.
The likelihood of getting banned from all Meta platforms if you use your accounts to insult Mark Zuckerberg is low, I guess around 10%. This could probably be enforced instantly. This creates another dimension: how long you can break the rules before getting caught.
If you had an e-commerce business with 98% of sales directly attributed to your Meta advertising campaigns, it would be unwise to be a insult to Mark.
Another example would be violating the rules of your courier. Are DHL likely to terminate your account if you mailed Christmas crackers, its against their terms of service. But if you can ship again with UPS tomorrow, what’s the harm in trying it a few times.
- Law of other Lands - rarely applicable, critical when enforced
An example of this would be: “The health and safety regulations of food in Afghanistan”, it is highly unlikely your business imports or exports food from Afghanistan, so changes to this law likely do not directly impact you.
Another example of this would be: “The EU AI ACT” which entered into force on August 1, 2024 in the European Union or the recent tariffs enforced on imports into the United States of American under Donald Trumps 2nd term as the President.
Clearly not all the laws of the other lands applies to you, but you likely import goods from china and other countries. If you have an e-commerce store its likely your marketing to people from the other countries and should know the laws over there too.
- Societal Rules / Unenforceable Rules - ignore with no legal repercussions, however can adversely effect profit.
Societal Rules are the purely the opinions of people in society who project their opinion, it is unknown how many people share this opinion or how strongly they hold it either.
Violating the societal rules could cause some vocal members of societal to push for your ostracisation, or a widespread boycott of your operations, but any attempt to escalate in a court of law would be largely unsuccessful.
Nations, States, Corporations are unlikely to pursue you in a court of law as you have not broken any laws. People are unlikely to pursue you in a court of law due to lack of funds.
I believe boycotts are largely unsuccessful in bankrupting a company in the long run however they do have the power to decrease sales in the short term, having a company with healthy profit margins and low overheads overcomes this issue. There will always be new news, the boycott of your company will fall out of the headlines soon and sales should return.
For example a small number of people where boycotting McDonalds because they sell products in Isreal, yet their stock is nearing all time highs.
- International Laws - easiest to avoid
Examples: Piracy, Genocide, Crimes against humanity, War crimes, Aggression (starting wars).
Unless you frequently navigate international waters or airspace, these are easy to ignore.
This section likely only applies to those in or supplying to those in defence sector and the military industrial complex.