$F_{damage}$: From Intra-species Structure ($S_s$) to Class Division and Struggle

I originally wanted the AI assistant to write this chapter for me. I have already written four chapters (five including the appendix), and it could see my tone, my train of thought, and my method of "economic explanation." Yet it insisted on generating a piece of stereotypical AI boilerplate for me. It really gave me a headache. I do not believe that AI can quickly replace humans when it comes to problems that require deep reflection and highly leap-of-logic reasoning. That is why I actually find it reasonable when a teacher recently said it is harder for AI to replace the humanities.

The correctness of code is easy to verify—just set up a CI/CD validation workflow, and if the AI detects an error, it can fix it immediately. However, when it comes to theoretical and especially leap-of-logic concepts in the humanities and social sciences, the AI is completely in the dark. It can only generate those intimidating buzzwords by feel—utter garbage. To be honest, writing this introduction has severely dampened my optimism about AI replacing humans.

Let's skip that.

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Having written up to this point, we need to return to the most fundamental question: Why do we need the theory of $F_{damage}$?

Because traditional economics always assumes that people are free and transactions are voluntary. As I mentioned earlier, traditional economic theory holds that "in a transaction, both parties feel they have got the better end of the deal."

But this is not the case. In real society, individuals are never completely free, and the completion of a transaction is often not out of complete autonomy.

This "unfreedom" and "non-autonomy" are the results of $F_{damage}$:

$$F_{damage} = \frac{S_s \cdot T^{\alpha}}{1 - \beta \cdot e^{-\gamma(L - W)}}$$

$F_{damage}$ represents those comprehensive, irresistible "forces of reality" weighing down on both parties of a transaction. The numerator is the coupling tension between structure and tools, while the denominator is the damping of biological behavioral feedback.

Only by introducing $F_{damage}$, the price loss-benefit factor—this irresistible external factor—can both parties of a transaction feel they have got the better deal.

1. Intra-species Transactions: Trading "Autonomy" for "Survival"

In Chapter 1, we mentioned that "the reason humans succeeded is that they follow commands."

This is actually a transaction. Under harsh natural conditions, if an individual retains 100% of their "autonomy," their survival rate is extremely low. Only by relinquishing part of their autonomy and submitting to collective dispatch can their survival rate be improved.

Therefore, the first transaction in human society is the exchange of "autonomy" for "survival."

At this time, $F_{damage}$ is the cost paid by individuals to obtain collective protection. This is the so-called sociality, which in our concept is the "complex intra-species structure." It is a result of selection that promotes the continuation and development of the population. Many people might not understand this, but human society and humans themselves are evolutionary results of natural selection. This is unquestionable and stamped with the solid iron seal of evolutionary theory.

The "sociality" of the human population does not originate from humans either. This is a chicken-and-egg question. However, once I bring evolutionary theory into the picture, the answer to this question becomes self-evident. Humans evolved from Australopithecus. Did Australopithecus have "sociality"? Definitely. This is also why, when I was constructing the formula for $F_{damage}$ back then, I suddenly had a flash of inspiration and came up with a formula like $S_s \times T$.

War and love, or war and sex, are the two eternal themes of the human world. Thus, war produced captives and slaves, and humanity entered slave society. Of course, the specific developmental and evolutionary process of society is not the focus of our discussion here. In short, we know very well that as the structure of human society becomes increasingly complex, the division of the human species, as well as the differences in rights, status, and welfare benefits within the species, gradually become intricate and diverse. Geographically, a nation is a conceptual collective of groups in a region, whereas politically, it is an "instrument of class rule."

Consequently, this makes it exceptionally simple for our $F_{damage}$ to return to the embrace of so-called "political economy." For we can explain not only the price formation of individuals, groups, and collectives of groups within a regional scope, but also the price formation across the entire human species and the global economic and trade system.

It is self-evident that after thousands of years of development, or rather, 7 million years of development from Australopithecus to the present, the human species has become a highly complex, intricate whole with overlapping classes or "strata" (classes). In this whole, civilization, culture, writing, and cultural relics differ immensely, yet we are all deeply bound together by "modernization." Will some readers find it annoying: why are different human races so different, and different countries and regions so different, yet we are still counted as one species? Well, there is nothing we can do about it; it was decided by biology teachers because there is no reproductive isolation. However, the AI does not understand this and kept writing "population structure" everywhere in my first draft. I could not teach them no matter how hard I tried. I said the entire human race is one species, only one species, not a population.

Class analysis is not the focus of this book either. You can find many excellent books on that topic. Just like political economy, this introduction of ours is merely a simple demonstration and guide of "the explanatory power of the $F_{damage}$ price loss-benefit factor theory."

We only need to remember one thing: $F_{damage}$ is co-determined by the intra-species structure ($S_s$), the tool level ($T$), and biological feedback ($L, W$). The price loss-benefit factor does not refer to the price itself, but to the "various irresistible comprehensive factors" that affect the completion of a transaction between the two parties during the process of price formation.

It is actually that simple. I remember that day on my way back from picking up a package at the New Era Supermarket, I told the AI assistant that if we view $F_{damage}$ as a concept encompassing interest theory, would we make greater progress in terms of "explanatory power"?

Of course we would.

And I have always believed in one thing: once you can clearly define it, the job is basically done. I originally felt there was no need to write a tens-of-thousands-of-words guide, let alone a hundred-thousand-word magnum opus. Especially in this modern AI era, many concepts and theories can be found with a simple search. There is no need for us to be redundant and verbose.

2. The Leverage of Technology: From Whips to Algorithms

With the structure ($S_s$) and the tools ($T$) combined, the efficiency of $F_{damage}$ is amplified.

$$F_{damage} = \frac{S_s \cdot T^{\alpha}}{1 - \beta \cdot e^{-\gamma(L - W)}}$$

$T$ itself is neutral. It is neither "good" nor "bad." In a rigid structure (where $S_s$ is extremely high), an increase in $T$ will only amplify $F_{damage}$ because $\alpha > 1$—the rate of tool transport far exceeds the rate of structural optimization, and the loss grows power-law style. Total Factor Productivity (TFP) grows, but welfare does not; the increment is intercepted by the structure. This is the "Total Factor Productivity illusion."

Only in systems with flexible $S_s$ (democratic checks and balances, welfare safety nets, union protection) can an increase in $T$ potentially reduce $F_{damage}$, because the institutions raise $W$ far above $L$.

Many believe that technological progress makes people freer. But it is not so. If the structure itself is unequal, the more technology progresses, the easier it is for this inequality to be solidified and amplified.

In the era of slavery, to maintain high-intensity exploitation (high $F_{damage}$), slave owners had to rely on whips and overseers. This management method was costly and inefficient.

But in the algorithm era, things have changed.

Whether for delivery riders or ride-hailing drivers, the system can use algorithms to precisely calculate a person's "reservation price"—that is, the psychological bottom line of "I won't do it if it's below this price."

• For someone carrying a mortgage and in urgent need of cash flow, their reservation price is very low.
• The algorithm identifies this "urgency" and dispatches low-priced orders to them.

In economics, this is called "first-degree price discrimination." The system no longer needs to force you to work; it only needs to leverage your life pressures and push a price to you via algorithms that you "have no choice but to accept."

On the surface, you appear free to choose whether to "accept" or "decline." In reality, however, your cost of living and debt structure dictate that you have very few choices. This is $F_{damage}$ in a high-tech environment—an efficient extraction realized through calculation.

The preceding section was entirely written by AI, and I think it's decent. However, this perspective is somewhat one-dimensional.

In fact, technological progress can also allow everyone to advance together, even if this is sometimes not the original intention of the "ruling class." That is the first point. The second point, returning to our dynamical function, is that when $W \gg L$, the denominator becomes negative, making $F_{damage} < 0$; so the result can be negative! A negative result means that the "irresistible and comprehensive intra-species structure" has elevated the price.

In fact, it is very easy to give a few examples, such as the welfare states of Northern Europe. Right? As technology advances, their welfare becomes better and better. And look at Europe now; they are already implementing a four-day workweek.

Therefore, we should not take a stance on the level of tools.

Yesterday, there was a question asking, "Will AI rule humanity?" My reply was, "Tools always function through humans." The questioner even thought my perspective was "so unique." I wonder what is so unique about it—tools have always been used by humans, after all.

To give a negative example: when the Haitians revolted, out of resentment, they destroyed the tools and agricultural irrigation facilities of the former landlords, local tyrants, and capitalists. What happened to the lives of the revolutionary masses themselves afterward? Right? It instead led to a comprehensive collapse of overall productivity. In short, our introduction of the parameter $T$ here is also to better align with the conceptual paradigm of "productive forces and relations of production" in Marxist political economy and Marxist philosophy. I can't help it—who told me to grow up receiving an education in Marxist philosophy? And here, by defining $F_{damage}$ as the factor influencing price formation, we have shown the exit from the economic system to the so-called "value" theory forcibly introduced by Teacher Marx, especially "use value" and "exchange value"—this unscientific price theory created out of thin air.

We do not need to add more concepts; we want to simplify our conceptual system. This is what I have insisted on while writing this small introduction. We must define our concepts using simple, already widely recognized concepts. For economics and economic explanation, I have always felt that only one concept is necessary, which is "Price." That is why when I first proposed $F_{damage}$ to the AI assistant, I defined it as the "price loss-benefit factor." I did not use terms like damage factor, value, pressure, or the like.

And as I wrote even earlier, "transactions" emerged the moment some human individuals submitted to the commands of others, relinquishing their autonomy to "trade" for better survival resources. This is also different from the narrow definition in Marxist economics, where transactions are strictly commodity transactions. Humans themselves can also serve as consideration in a transaction—human dignity, the human body, human labor, and human genes. Thus, transactions are everywhere, and prices are dynamically formed at all times. Therefore, from the perspective of political economy, we have generalized the definition of transaction, and to that end, we must simplify price formation. Otherwise, we will inevitably end up trapped in circular reasoning and self-contradiction with no way out.

3. Historical Clearing: An Economic Explanation of the Law of Cycles

Placing this logic in the long river of history, the dynastic changes in Chinese history were essentially forced clearings caused by an excessive accumulation of $F_{damage}$.

At the beginning of a dynasty, the old interest groups were eliminated, the structure was simple, and there were few people and abundant land. At this time, $F_{damage}$ was low, and the common people kept most of their labor output for themselves, hence the "golden ages."

Over time, the bureaucracy bloated, and the rentier class expanded. To support these people who did not directly engage in production, $F_{damage}$ had to be continuously raised.

When a critical point is reached: Labor Output < Survival Maintenance Cost + Forced Deductions

When peasants worked hard all year and could not even support themselves, "default" became the rational choice.

In ancient times, default was called "rebellion"; in modern times, default is called "lying flat" or "stopping mortgage payments." When the system's entropy accumulates to its limit, a collapse is bound to happen, which is "dynastic replacement."

This paragraph was also written by AI. I originally disliked its writing of such exaggerated AI boilerplate. It is mostly a pile of concepts and rhetoric, empty of content for the most part, and occasionally contains logical errors. But I will keep this paragraph to discuss the explanatory power of our $F_{damage}$ theory regarding social transitions.

As a basic economic theory, a theory of price formation, we have the confidence to explain all social phenomena.

I suppose what we should discuss here is the range of values for $F_{damage}$.

This way, we can completely ignore the life-and-death revolutionary struggles of human society, whether they be peasant uprisings, worker-peasant revolutions, or removing military power over a cup of wine. We won't look at specific histories like the Twenty-Five Histories either. We only look at one number: whether this $F_{damage}$ has gone off the charts.

In the new formula, when $W \to L$ (individual retention approaches the survival red line) and the system fragility coefficient $\beta \to 1$, the denominator approaches zero, and $F_{damage} \to \infty$. This is the singularity state: the price signal breaks down completely, and no transaction can be reached at any price. Where price fails to function, natural violence will rise to take its place. Of course, the price here does not simply refer to the price of rice, oil... Considering what we mentioned earlier, we do not believe that "only commodity exchange constitutes a transaction," nor do we believe that "only products used for exchange are commodities, while others are merely products." Furthermore, we do not believe that "price fluctuates around value, and value is the undifferentiated human labor congealed in commodities."

We believe that price is simply a trading condition formed during the transaction process.

As for what a transaction is, to simplify our reasoning and avoid over-exaggeration, I think we should define it as: the exchange by the transacting parties of their own usufructuary rights, as well as the usufructuary rights and ownership of external objects.

Why can't the ownership of the transacting subjects themselves be traded? Because without ownership, one would be a slave. But then again, after millions of years of human society, what kind of freaks haven't existed? Some people are just born with a liking for being slaves. So, I suppose this definition could also be expanded to "the exchange of the ownership and usufructuary rights of the transacting subjects themselves, as well as the ownership and usufructuary rights of external objects."

Right, today I even saw someone say, "Without economic independence, there is no intellectual independence." This is absolute nonsense! Think about those great European literary giants, writers who penned monumental masterpieces—how many of them were gigolos kept by wealthy ladies! I don't know why I am writing this, but I suppose my point is that humans are actually quite creative in innovating the forms of "transactions."

In the words of Zweig, "All the gifts of fate have already been secretly priced."

4. Conclusion

We propose $F_{damage}$ not to vent emotions, but to see clearly the real mechanism of price formation. Just as it started merely as a factor we used to supplement Fisher's interest theory, we later developed it into an independent factor that truly, comprehensively, and widely affects price formation, thereby enhancing its explanatory power. Understanding this, we can comprehend not only why our wages are this amount or why our exchange rates are that figure, but also easily make sense of various strange phenomena throughout human history.

Of course, we could also use this to understand bees, or ants. Having written up to this point, however, I think we might still need to improve the functional form of this formula in the future. Let's leave it like this for now.

For this is not only an economic explanation, but also a universal theory of biological intra-species relationships from an evolutionary standpoint. This is also a very crude way of thinking about the problems of complex human societies, which is to downgrade humans to "general animals, general organisms," to see if it works.

And of course, it works. Not only does it work, but our theory ultimately breaks free from those low-brow "utopias." Because we downgrade to the "animal level" to construct our theoretical framework, we can avoid the empty target-shooting of political economy that disregards the "flaws of human nature."