Complex Systems with Patrick McKenzie (patio11)

Patrick McKenzie is joined by returning guest Clara Collier, editor-in-chief of Asterisk Magazine, to discuss how working writers and reporters actually use LLMs. Patrick walks through the machinery behind his recent SPLC reporting, including "parallel construction" with LLMs: when sources can't go on the record, models can surface public confirmation of the same facts in unguarded podcast interviews, press releases, and prepared remarks.

In this video episode of Complex Systems, Patrick McKenzie (patio11) is joined by Justin Kuiper, a longtime writer for MatPat's Game Theory family of channels and now creator of Proof Positive, to discuss the microeconomics of YouTube. They break down how creators actually get paid — from $3–$20 CPMs and the leaky funnel where a million views yields perhaps 50,000 actual ad views, to sponsor reads, Super Chats, and MrBeast selling chocolate bars as his own advertiser of last resort.

Patrick McKenzie (patio11) is joined by Aaron Brown, author of Wrong Number, to examine why institutions that produce bad statistics face so few consequences for doing so. Presenting Sponsors: Mercury & Granola Complex Systems is presented by Mercury—radically better banking for founders. Mercury offers the best wire experience anywhere: fast, reliable, and free for domestic U.S. wires, so you can stay focused on growing your business. Apply online in minutes at mercury.com.

The improbable but true story of how non-profits operating a private intelligence agency to combat terrorism decided to interfere with campaign infrastructure in a U.S. election. This piece includes original public interest reporting, following on the previous episode on how the Southern Poverty Law Center became financial infrastructure.

The Department of Justice unsealed an indictment against a well-respected civil rights non-profit on April 21st. Here I tell the improbable story of how the private intelligence agency it ran published a data product, then drove wide adoption of it in the financial industry as a screening tool for accounts and transactions. Jeff Bezos couldn't do better than it. The private intelligence agency also ran covert assets. Those covert assets needed a paycheck.

In this episode of Complex Systems, Patrick McKenzie riffs on why public sector payroll modernization is even more likely to fail than the typical public software procurement project. He then goes into a wider discussion about payroll providers and their role as software, payment rails, and a sink for an enduring controversy in political economy. We want robust state capacity and hate income taxes.

Patrick McKenzie (patio11) explains how compliance regimes designed to be viral brought many more firms into the scope of frameworks like SOC 2. This created a market demand for compliance-on-the-cheap by companies like Delve. Delve has been accused in an anonymous bit of investigative journalism as engaging in Potemkin compliance. Patrick contrasts what real audits look like with what Delve allegedly delivered.

Patrick McKenzie (patio11) reads his classic Bits about Money essay explaining why the debt collection industry earns its “river of effluvia” metaphor. From the accounting standards that force banks to "charge off" delinquent accounts to the large CSV files that constitute the only proof of a debt's existence, he explores how the system prioritizes accounting finality over legal and factual accuracy.

Patrick McKenzie (patio11) and Philip Kiely, early employee at Baseten, discuss the inference stack: the critical layer of software and hardware that sits between a model’s weights and a user’s prompt. They cover inference engineering, how intermediate layers are evolving over a technical stack that is changing every six months, and how sophisticated organizations are actually consuming LLMs beyond just writing their questions into chatbot apps.

Patrick McKenzie (patio11) deconstructs the "original sin" of payments: building a global financial substrate on shared secrets that were distributed promiscuously to function. He examines the multi-decade game of Whack-a-Mole played by the industry to balance the "optimal amount of fraud" against the catastrophic conversion hit of high-friction security.