While it's as hard as ever to make sense of Moldbug's stream of consciousness, it seems like he is stuck in a circular redefinition of "underdog". The regular definition involves comparing priors, while his is comparing posteriors:
While I disagree with quite strongly with some of his content and think he is over-hyped compared to other Dark Enlightenment authors, this seems an uncharitable reading. I'm somewhat familiar with his style and think you are wrong on your interpretation.
he is over-hyped compared to other Dark Enlightenment authors,
Who would you say is 'better'?
http://unqualified-reservations.blogspot.com/2013/01/noam-chomsky-killed-aaron-swartz.html
Summary: Moldbug on the Aaron Schwartz affair. Power is a very real thing with real consequences for activists, yet many people don't understand the nature of power in modern times. People like Noam Chomsky get great fame doing bad epistomology about who has power, and as a result do great harm to idealistic nerds who don't read between the lines to selectively target their attacks at weak institutions (Exxon, Pentagon) instead of strong ones (State, academica incl. MIT).
Here he returns to a theme that is one of his real contributions to blogospheric political thought: that victory in political competitions provides Bayesian information about who has power and who doesn't. If your worldview has the underdog somehow systematically beating the overdog, your epistemology is simply wrong - in the same way, and to the same extent, as a geocentrist who has to keep adding epicycles to account for anomalous observations.
This means that activists like King, Schwartz, and Assange are only effective in bullying the weak, not standing up to the strong (despite conventional narratives that misassign strengths to institutions). When such activists stop following the script, and naively use the same tactics to attack strong institutions, reality reasserts itself quite forcefully: