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we have never found any evidence of any
human civilization that didn't have
money money predates written language
money is as old as belief in God as like
people staring into the stars and
wondering what's out there I think of
course there are Chinese spies in the US
government there are Russian spies even
our allies in 1951 Alan Turing wenton on
a lecture tour of the UK where he was
arguing that super intelligent AGI was
months away uh he was wrong
Graham Moore welcome to the show thank
you so much for having me Tom I'm really
excited to have you you've written a
fascinating book about a period in time
that I'm obsessed with which is World
War II uh the book The Wealth of Shadows
is about how economics were used to
break the back of the Nazi war machine I
think there are fascinating parallels to
what's going on today especially in
Ukraine and Russia and I'm curious how
did the US end up beating the Nazis
before they ever fired a shot I think
that the US ended up beating the Nazis
long before firing a shot thanks to a
largely unheralded group of economists
working under the offices of the US
Treasury Department and that's what the
book is really about I think in starting
in 1939 even after Germany had invaded
Poland there was there was this period
where the United States was not just
neutral in what we considered sort of
this European dispute but the United
States was assiduously neutral I mean
sort of passionately neutral I talk
about this in the book but in 1939 even
after the invasion of
Poland there was polling done
and 12% of Americans wanted to get
involved in what they called the
European dispute the percentage of
Americans who wanted to get involved
militarily was 2% it was politically
toxic for the Roosevelt administration
to not just wage any kind of war against
the Nazis but to even do anything that
vaguely looked like what they were doing
was Waging War against the Nazis what
year was that poll taken 39 so they
already know about concentration camps
at this point they know the horrific
conditions and yet it was still that
unpopular that's absolutely right um and
I when I found those numbers I was
shocked by how small they were um it was
really the common feeling was this is a
European thing okay Germany invaded
Poland it's complicated yes
Czechoslovakia it's complicated they're
not okay the UK is going to war okay
France is going to war but this is their
problem this is not our problem this is
not our problem this is not our problem
and yet there was this group of
economists and even sort of largely
amateur economists working for the
treasury Department who this book is
about and these people said no were the
US had passed a Neutrality Act so doing
anything to uh help the British against
the Nazis or to help the French against
the Nazis was illegal I mean it was
counter to government policy and these
people at treasury said no we're not
doing that this is really bad the Nazi
threat is not going to stop it's not
going to stop at Poland it's not going
to stop at Britain it's not going to
stop at France this is going to keep
happening why were they so confident
about that because a number of things so
one of the things that I think they had
done and that we've certainly been able
to prove since is that they' done
analysis of the German war operation and
what they found was that the entire
German economy had been restructured
around the making of war that is the
German government
um had the Nazi the Nazi government had
completely structured its natural
economy to produce one output and that
output was war everything you know is a
very kind of centrally planned economy
um they were
you know no secret that Nazi stands for
sort of I can't I can't speak German if
I try to do the German it'll be a
disaster but sort of National Socialist
Party of Germany um the politics of it
were complicated this kind of like
extreme sort of right-wing socialism mix
that was quite
statist and what
they what the Americans had done is we
sort of looked at this and said this
this isn't going to stop this is a real
threat
and the Germans couldn't stop even if
they wanted to um the German economy is
built around a couple things it's built
around one having a slave class of Jews
to perform unpaid labor um and it's
built around Conquest it's built around
taking new lands where they can acquire
new raw materials new money and frankly
more slaves and
if the Nazi war machine were to stop
conquering were to stop taking new
territory the entire the entire Nazi
economy would collapse and so they there
any idea that they're going to stop at
Czechoslovakia is ridiculous any idea
that they're going to stop at Poland is
ridiculous any idea that they're going
to stop at France is ridiculous this is
a machine built to take land and built
to take built to steal raw materials and
capture slaves and it's going to keep
doing that until one of two things
happen either they consume the entire
world or someone stops them and so what
this book is about what the wealth of
Shadows is about is about this group of
folks at treasury who said okay we're
going to be the ones to stop
them it's a really interesting Moment In
the book that you tell of an economist
who's basically looking at a spreadsheet
and says okay wait a second how did the
Germans go from utterly devastated by
the Treaty of Versa just demolished
demolished by that demolished by the
Great Depression and now all of a sudden
in the span of a very short number of
years like two uh they Roar back to life
with all the sanctions that say they
can't build this they can't build that
uh because they didn't want them to
rearm themselves and you get this
economist who looks at the spreadsheet
and goes they've created it's quite
brilliant and this is where it starts to
get very unnerving for me as somebody
who studies the economy uh the Germans
found a way basically to create a
circular economy that was completely
contained within Germany so you would
sell war bonds to your Farmers or
whatever promise them a return but to
avoid inflation tell them ah first of
all it won't pay off for a few years and
second of all even when it does I'm
going to restrict the amount that you
can take out but everybody's super
excited because they see their net worth
going up even though in reality they're
not being allowed to spend it and the
only way that they can keep the
inflation from going crazy since they
don't have economic output that they're
selling because it's all internal is to
your point we have to go to the next
conquest and on and on and on and that
toogy is what I worry about today and so
when you look at how they used economics
they um tried to cut Germany off from
the international money supply
uh they went to Brazil and tried to buy
up all the iron and cotton to make sure
they couldn't make bullets and uniforms
so they're doing all of these economic
things but what does that tell us about
what's likely going on today when we
look at how we're positioning ourselves
against Russia with Ukraine technically
we're not in the fight but we're doing
these economic things what's your read
on that so it's a great question and my
read is that that the set of techniques
that the United States and the European
Union have been using against Russia
these past few years are essentially the
modern versions of a set of techniques
developed by this group of people at
treasury in 1939 this was a set of
techniques that we now call economic
Warfare that really was developed in the
late 30s and early 40s I don't think it
had I would argue it hadn't really that
economic Warfare hadn't really been
tried before this um people sanctions
existed but sanctions are a very small
part um of I think the economic Warfare
package that's presently being used and
it was certainly being used in the 30s
and 40s um because as just as you're
saying I think a big part of of the
anti-nazi economic Warfare of 39 40 and
41 and of what the US and the EU are
doing against the Russian government
today is trying to
sever trying to sever those economies
from the rest of the world um the
problem
is uh both the German economists in the
30s and the Russian economists in the
last decade prepared for this um and I
think we can see I mean one of the other
Eerie corar between the late 30s and now
is so you were just talking about this
period in the mid-30s where the German
brilliant German economists sort of
rebuilt the German economy from nothing
after
you know Germany had it's no secret that
they were kind of doomed to Decades of
poverty thanks to these crushing
sanctions uh these crushing debts after
the war um you know Germany in the early
30s was this economic Backwater by
3839 they' built the largest military in
the world in just as you said only a few
years how did they do it it was pretty
brilliant um
and I suppose it doesn't need clarifying
that brilliant evil um because as I said
you know the the slave class was an
important part of that operation it
doesn't it doesn't work without
essentially these work camps of of of
forced
labor they but as you're saying they
develop this complicated Bond system to
effectively make it look kind of funnel
more and more of what was effectively
German GDP into the military than it
looked like they were doing the term GDP
didn't quite exist yet and actually we
get into that in the book it was sort of
being invented around the same time but
um basically a significant percentage of
of everyone's labor and everyone's money
was getting in Germany was getting put
into the war machine than it then
appeared to be going to it um but at the
same time you know everyone was putting
their money in the banks the banks were
sort of to simplified the banks were
secretly funneling that money to the
German military but it looked like
everyone would check their bank deposit
books and they had all this money in the
bank and they were making all these
returns and Banks were offering 4% 5%
returns in these checking accounts which
looked for Germany at the time was was
wildly High it looked great everyone was
sort of looking everyone thought they
were getting rich only just as you
pointed out there was one trick they
couldn't withdraw the money um the
German government had passed a set of
laws such that you know it was it was it
was against the law to withdraw too much
money from your checking account but
then again why would you because leaving
the money there made it grow and you
kept getting these statements that made
it look like it was growing um in a
sense that it was some bizarre
combination of like Ponzi scheme and
kind of wild military
expansion um but at the same time the
Germans knew that with a coming War they
were going to they needed to create this
autarchic system they needed to sever
the German economy from the west of the
world because they were going to soon
enough they were going to go to war with
the rest of Europe and the rest of the
world they were going to then not be
able to trade with those countries um
they needed
to they knew that they weren't going to
be able to trade in dollars very soon
they weren't going to be able to trade
in Sterling very soon they weren't going
to be able to trade in franks very soon
when they started going to war with the
countries producing those currencies so
they began this process of trying to
sort of sever themselves from the global
economy now if you look at the last 10
years um you can certainly see a set of
Russian economists doing the exact same
thing um you can see
them understanding that they don't need
to keep well they've done a couple of
other things they kept pretty
significant the Russians I guess in
contrast to the Germans I should clarify
have kept quite extensive dollar
reserves um and at the same time they
have something even more valuable which
is they have oil reserves um which
allows them to acquire dollars or other
currencies on the global market and kind
of keep trading with enough of the world
that even if the US shuts them off and
says we're not going to trade with you
anymore even if the sh them off and says
we're not going to trade with you
anymore um other places will um and so
you see a kind of preparation what you
find is that in both the 30s and in the
last decade is that the economists were
planning for the war many years before
the military
was what I find most interesting about
your book is there's this sense of
um we have uh moral agenda and we're
going to weaponize money as a way to get
this done and before reading your book I
would have agreed with the sentiment of
when you look at a government you should
say look it's hard to get things done
because there's this managerial class
it's bureaucrats pushing paper and they
bog things down but reading your book I
would say this is a contentious
statement but the idea of a deep state
is wiser way to look at it because there
are people in the government working at
intentional cross-purposes to the State
admission of the president of the
national Declaration of
neutrality um you have in your book
again the book is based on a true story
that's right one of the true stories is
that the guy running the treasury um
Department that's in charge of of this
war effort is also a Russian spy
and so I was like whoa it it gave this
sense of the government is not a bunch
of bumbling bureaucrats the government
is actually made up of people with
competing ideologies that are going to
war with each other inside the
government itself to pull historical
events in a given Direction and then
that sets the stage for we are maybe not
at maximum division cuz we're not not in
a civil war and we know we've had one so
there there is worse places to be than
where we are now well but we are at a
time of very heightened division which
tells me within the government there
will be massive Division and then we
have our former presidents stating hey
there's a very bad thing happening
inside the government which is that they
were pulling in directions that I did
not want them pulling in and so I look
at divided sentiment over Russia Ukraine
I look at your book and say I mean
I look at your book and I say there is a
very complicated thing happening in
terms of what I'll round to the Deep
State and so what do you think becomes
the outcome of this reality of how
governments operate in today's
context I I feel like in some ways
you're you're burying the lead here
because I feel like you're saying that
the book has sold you Tom on bureaucrats
and I'm proud to say that I'm finally I
could be the one to to prove the value
of bureaucrats the world over I
think yes I think it I
don't yes the word deep state is a
loaded term but I think it is absolutely
true that what this book gets into is
that in 3940 41 42 throughout the war
there were different groups of
competing teams of people within the US
government with very different aims from
what the government's kind of stated
goal was and what the president was
saying they were doing so on one side
you
have while the government while the
Rosevelt Administration is saying we're
neutral we're neutral we're neutral to
anyone who will listen we're going to go
speech after speech every night about
how neutral we are there's this at the
same time there's this group at treasury
who saying yeah yeah secretly what we're
going to do is we're going to wage war
against the Nazis and we're going to do
it because the Nazis are evil and this
is the right thing to do and the war is
going to come to our doorstep one
day one day whether we like it or not
this is going to be our problem and
we're not just going to sit here and
watch it happen um we're going to take
the fight to them and we're not soldiers
we're not we're not spies we're
economists and so we're going to kind of
invent this concept of economic Warfare
and try and kind of Kick the legs out
from underneath the German economy um at
the same time this team at treasury is
doing that there was
uh another team at the state department
on the other side which is to say that
there is a team of at best fascist
sympathizers in the state department at
worst I would
say out andout Nazis I mean there were
the state department was kind of Rife
with people who
were openly supporting the Germans and
the Italians against not just the
British and French but against the
Americans um and so you had
another like another deep State
operation at State sort of saying no no
we're not neutral because we should be
joining the Nazis we should be on their
side and we're going to start we're not
just going to kind of try
and we're going to do whatever we can to
kick the legs out from any kind of pro-
British or pro- French operation that
that the Roosevelt administration is
doing because eventually the Roosevelt
administration is going to wake up one
day and realize that like we should be
on the side of the access those are the
right that's the right side to be on
here um so in a way you find mind
um kind of it's like multiple deep
States right you have sort of multiple
competing forces within the government
with mutually exclusive and incompatible
goals um you have a a government very
much at war with
itself and I might argue um
that's not a flaw it's a feature I think
that
we the government's big the American
government's really big even in 1939 the
American government is really big
and
one there's a reason we have human
beings in those jobs and it's because
they're making moral decisions they're
making ethical decisions and
there this is certainly a period where
you had a bunch of people working for
the government who are saying we don't
care what our sort of official policy is
we're just going to do what we believe
is the right thing and I guess the emot
the I guess the ethically complicated
thing is you look back on this and say
okay you know in the book our guys at
treasury who were doing this are the
heroes because they were doing it on the
right side the guys at the state
department are the villains of the book
because they were doing it on what I
think we can inarguably say was the
wrong side but they were both making the
same calculation which is the
government's policy is wrong so we're
just going to pursue what we think is
the right thing to do one way or another
and you know to help with the
consequences um would they be the first
or the last government Bure rats to ever
do such a thing obviously not um
and it's funny it's like in some ways do
we only have the ability to evaluate the
morality of that
postao like where who does it turn out
was on the right side of that dispute in
this case it was the treasury Department
and I mean the state Department's
Behavior was a lot has been written
about this but
it's like worse than horrible
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ship to the US Canada the UK Europe and
Australia okay so let's start teasing
some of these ideas out as um guiding
principles so I think a lot of times
people will argue a concept at what I
call the level of the tea uh my will be
very familiar with the story so the
biggest fight my wife and I ever got in
was over a cup of tea uh two hours into
a screaming match I finally go there's
no way this is about a cup of tea what
is this really about uh so we vowed
never to argue about the Tea again and
so what we found is that you're really
arguing about beliefs or values or you
might have what I call as a collision of
based assumptions where you just both
have a belief about the way the world
works that is completely different um
and unless you lay those out you're
going to just argue past each other so
taking this argument to the level of um
values I think will be very interesting
so for instance do you think it is um
morally just to lie to the American
people to get a desired global economic
outcome uh this is a question
for um so in many ways it's it's a great
question this is why this is why I like
historical fiction I mean we sort of
talk about this why am I writing why am
I writing novels about this and not
non-fiction and it's because I want to
be able to tease out exactly the moral
question you're asking from the
perspective of the from the inner lives
the inner thoughts of the actual human
being beings in actual history who are
facing these very questions because
they're not simple ones um I think the
answer
is yes of course it's the right thing to
do
um it helps that in the specific cases
of government officials lying to pursue
the outcomes they wanted economic or
military in this book it sure helps that
they were on the right side um it sure
helps that when Roosevelt himself much
less the rest of his administration was
saying we're neutral we're neutral we're
neutral um did Roosevelt know what the
people in his Treasury Department were
doing not exactly but I think we have
good evidence that and the book s of
gets into this that you know they were
they were the the people at treasury
were basically sent Henry morgantha who
was the treasury secretary who was the
president's dear friend to his office to
sort of say to Roosevelt hey look I know
we're neutral
but I've got some guys back at the
office they're going to do some stuff
May you don't want to hear about that
stuff and you know Roosevelt basically
put his hands over his ears and said n n
n n n I'm not listening you didn't say
that don't as long as it never shows up
in the
newspaper I never need to hear about it
again and you guys do what you need to
do to get the job
done was he lying to the American people
when he then claimed that the United
States was perfectly neutral in this
matter of European dispute yeah
absolutely he was lying to the American
people people when he said that was it
the right thing to
do it sure helps that the Nazis were the
worst right that I think we can all
agree it helps that you and I can both
sit here today and without making a ton
of assumptions I think I can say that we
were both in perfect agreement that he
was on the right side of that dispute
right that these these lies were being
told for just outcomes defeating the
Nazis was a just outcome that we can all
look back and certainly support and if
it takes a couple lies to do that okay
um
if you know look then the moral question
becomes all right so then where do you
draw that bright line because anyone
who's ever lied to anyone ever can say
no no no but I was doing it for the
greater good you don't understand I had
to lie because it was in your best
interest to be lied to after the fact
you know you can lie to your family you
can lie to your co-workers you can lie
to anyone and say no no no no I was just
protecting you from the worst or I was
just I was doing it because if you
believed this then you would do
something that made this all work out
for the better of us so I think that's
in some ways this is a moral
question this is a Shakespearean
question right more than an economic
question this is a kind of what do we
believe as people in the
world
about what are the ethics that guide our
Behavior towards each other what sort of
Little White Lies are acceptable where
is that line crossed can we
only um you know are we do we want to be
perfect effective altruists or perfect
utilitarians and believe that only
outcomes matter it doesn't matter how
you get there the only thing that
matters is the effect of your actions or
do we want to
believe frankly in a more Christian
morality where we're saying no no no
intentions matter it matters what I was
trying to do and if I know that I'm
lying to you
that's bad one way or another um so I
think in these cases in the cases that
the wealth of Shadows gets
into these characters were right to lie
uh but that's really easy for me to say
because it worked and if it hadn't
worked or if we were looking back and
saying oh no it turned out they were on
the wrong side um is that more it
doesn't work out quite so well does it
and you know in this we get into the the
case of a character who is a real person
who you were just saying was effectively
applying that same logic um to justify
being a Soviet spy which which he was at
the same time that he was sort of lying
to the American people on behalf of the
Treasury Department to defeat the Nazis
he was also lying to the treasury
Department on behalf of the Soviets
because he believed that he believed
correctly that the Soviets were valuable
allies against the Nazis for United
States and the Roosevelt administration
was holding
them too much at arms length you know
these were operation one from his
perspective was defeat the Nazis let's
work ever more closely with the Soviets
to do that and you know we can deal with
that we can deal with an American
American Soviet problems later um but so
you know you can kind of see within the
book that the logic of no no no it's
okay I'm just going to lie to the people
around me this one time because it's in
the best interest for
everyone if you're making that sort of
utilitarian argument that what matters
is ends and not
means you better be really sure about
what those ends are going to
be yes uh and my the thing that worries
me is that no one is ever going to be
sure that they're on the right side of
history and the the wonderful thing
about setting your book at World War II
is not only is it a fascina time period
but there's moral Clarity I would say
and you don't have to do a lot of
calculus to be like hey the people
killing people by the millions in uh
concentration camps they're the bad guys
um but this begs so many questions about
how you should approach something like
this um so what I want to drill into is
okay if we know that we're putting a
moral question on the table about
whether you should be lying to people if
this is a judeo-christian ethic like
intentions matter and so lying in and of
itself is a problem whether this is
purely utilitarian no as long as we get
to the end of um stopping Nazis and
saving lives uh we're good and we can do
anything we want including uh drop
nuclear bombs on uh Hiroshima Nagasaki
like that's fine because you know we
ended up saving so many lives by doing
that okay the question becomes who gets
to make who gets to run that moral
calculus ought it be done by vote by
decree what's the right answer there and
then who gets to decide what lies to
tell I mean certainly when you're
talking about a government as discussed
the government's really big right and I
think people make the argument right we
don't we don't there's a reason we don't
live in a perfectly representative
democracy right we we elect we elect
leaders they appoint lots of people most
of the government is appointed Not
Elected they are in theory appointed by
the people who are elected and they're
going to make many thousands of
decisions tens of thousands of decisions
hundreds of thousands of decisions every
day that affect your life and that
affects my life and they're not going to
explain themselves to us as they make
all those decisions every single day um
some of those decisions will be
relatively minor some of those decisions
are going to be dropping nuclear weapons
on Hiroshima and Nagasaki and we
understand that for the government to
work work they it's functionally
impossible for them
to what reach out to polling and say hey
should we drop a nuclear weapon on the
city at the tail end of a war they can't
ask that question right so on some
level what I it's on on some level what
I would argue that elections are is
um you is making decisions
about the people whose thought processes
and judgment
and character and do is this someone
when you're voting for someone you're
saying is this someone I trust to make
it a bunch of decisions that I'm never
going to know about because it's
certainly the case that I think that
anyone in government will say this that
half of the important decisions are the
decisions that we as Citizens don't know
about and and you and I see this in our
own lives right even taking this out of
the context of government like we you
make things I make
things half of three qus of the really
important decisions that go into how to
make the things that we make aren't
necessarily things that the audience is
going to know about or hear about
they're not there for that decision-
making right they're they're on the
outside of it and they just see the
outcome and they weren't there for all
the meetings that kind of went into that
process right and that's certainly the
case with government so I think it's
um um
I mean the United States famously saw
this with with George W bush right who
ran on a platform of non-intervention
was sort of his a big campaign plank for
him was non-intervention in foreign
affairs and we're not going to be sort
of policemen of the world I think he
said in in a speech at one point and
then sure enough what was the sort of
defining defining decision of the George
W Bush Administration was the invasion
of Iraq uh the exact opposite of the
very thing he had campaigned on Now One
could make the argument that well what
happened is the world changed and
September 11th happened and he was he
was responding to new information and
new events as it was coming in and I'm
not sitting here trying to defend the
invasion of Iraq because I won't but
the what we find there is that the most
so that's a presidential Administration
in which what I think anyone would argue
is the mo in which the most significant
the most significant decision that was
made was quite public
and was totally contrary to what the
election had been about it was it was
something had happened and the George W
Bush Administration made a de
collectively and collectively made a set
of decisions about what to do and that
set of decisions involved invading Iraq
right you
um and so I think when you're talking
about what we want the government to to
do what do we what do we want the how
honest with us do we want the government
to be how how much do we want the
government to sort of stick to their
campaign promises or elected officials
to stick to their campaign promises or
if you're asking kind of what elections
are really about in some
ways there's this kind of Base lizard
brain level on which elections are about
electing people who we think have a good
sense of judgment to respond in
productive ways to unpredictable events
as they
occur it's interesting so I don't know
that um that you can run a government
without lying I don't know but the
reality is if you believe that the
government ought to be elected officials
by an informed Republic then you have to
inform the public like they have to
actually understand the things that are
going on and if you're creating a smoke
screen which is what we're doing now
there is the world that we all think we
interact with and literally until I was
in my 40s I thought the world as I saw
it was the world and then the more that
I began to learn about money the more I
realize wait a second the world that I
thought actually isn't real and that
there is a curtain money is a fiction
it's being manipulated it's being
manipulated to my disadvantage that we
being told one thing weapons of mass
destruction just to stick on Bush for a
second uh Saddam Hussein has weapons of
mass destruction we have to invade Iraq
and I remember at the time being like
wait what does Iraq have to do with um
911 like I I was like well I guess I
just don't understand and they just kept
saying weapons of mass destruction over
and over and over and so I was like oh
okay and so you begin to realize oh what
this is is they are counting on the fact
that the public is uninformed they are
counting on the fact that the public is
manipulatable they are counting on the
fact that they have Superior your morals
to what the public would have if they
could vote in real time because if you
in in the very near future uh between
just the the way that everybody has
access to a computer the way that the
blockchain works you could with every
decision in real time say hey everybody
grab your your cell phone at home uh
you're going to be prompted to vote on
seven new things just send in your vote
and we'll do it by decree now I would
say that that is
a disaster and the reason that that
isn't going to function is because
you've got a media that is just
manipulating the living [ __ ] out of
everybody and we're being lied to left
right and center and so even though yes
you could vote in real time you would
have to clean up all the BS first and so
if there was just com you would have to
commit to complete and utter
transparency and let the chips fall
where they may if you really wanted to
do a nonrepresentative democracy which I
recognize for the people screaming in
the comments right now I understand
that's not what we have now but I'm just
saying for people who will put that
forth um as you did and said we could
never do this technically it will be
very feasible I believe in very short
order to have everybody just vote
immediately now for all the ways that
can be hacked and manipulated it's
probably Beyond a terrible idea uh but
the question becomes what would have to
be true in order for us to want a
nonrepresentative democracy where
everybody just cast their vote and I
don't know that humans are capable of
digesting the issue putting it out in a
way uh that is accurately representative
of what's going on um and not only do I
not even know if that's possible right
now it's just a bunch of lies and so the
question becomes how do you create a
functioning
government when the mechanisms that have
been proven over and over all throughout
human history are that you lie to the
public you control The Narrative this is
why whenever a dictator takes over the
first thing they do is take over the
media uh you lie to the public control
the narrative get them to believe what
you want them to believe many many many
of them will and then the denters you
just punish relentlessly this will be
fun let me defend the status quo to you
uh because it's always I always feel
like such a Bor as long as you define it
first I'm happy too um it always feels
like only boring people defend the
status quo so it's a fun it's a fun
exercise in some
ways let's let's try and take this into
the realm of of something something
really specific uh a specific question
on which the government of here in this
case I'll give an example of unelected
officials making decisions that
profoundly infect our lives without
without pulling everyone first um
interest rates you know a lot about
monetary Theory um
so no secret that the board of the
Federal Reserve all these Governors make
a set of decisions about about what
about what interest rates should be
right um
the these issue where to set interest
rates is extremely technical I know some
things about economics um I am not a
governor on the Federal Reserve board
nor should I be I don't have a degree in
economics um I I Graham want people who
know a lot more about this than I do to
be sitting on the Federal Reserve board
making these decisions if you'd asked me
a year ago whether interest rates should
have been lowered more I would have said
yes that seemed like the right thing to
do now in uh the middle of 2024 that
turns out would have been the wrong
decision and that I would actually argue
Drome Powell and Company have done a
terrifically good job of managing um the
inflationary crisis of the past few
years and I'm not going to argue that
the inflationary situation is perfect um
I'm going to argue that it's better in
the United States than it is in Europe
because I think Jerome Powell and
Company have done a better job than
anyone in the EU has done um and and I
actually think that's pretty
remarkable the so that
situation and we can have another
conversation about whether we want
governments to be managing currencies at
all but we certainly have a situation in
which they are
so you you're not going to you can't
pull a population about a question as
complicated as where to set interest
rates people have lives people
are
um it's a really technical finicky
question right
and at the same time someone needs to
make a decision there needs to be sort
of at the end of the day one person in
the government who is making that
decision and stands up in front of a
microphone at a Podium and announces
that decision and then the world
responds to it so uh we don't know all
of the considerations that go into that
decision right we we're not in the
meetings where the Federal Reserve
Governors kind of discussed
this but we hear about the outcome and I
would I would argue that that there's a
specific example where yes the
government is by nature keeping
information from the public it's keeping
that decision-making process from the
public it's not Consulting the public
about that
decision uh but nor should
it and nor should it because the people
are not going to be able to make that
kind of well-informed
decision yeah I again I'm not the
most informed person about monetary
theory in the United States of America
but I'm not the least and had I made
that decision a year ago I would have
been wrong yeah so this now gets into um
are there some decisions that simply
shouldn't be left to anybody to make the
decision so taking monetary policy um
monetary policy I would put forth there
is a moral obligation that governments
have to not manipulate currencies the
reason I believe that is because of my
definition of money my definition of
money is that it is any one person's
ability to capture the efficacy of how
they spent their time so if I spend my
time um as a school teacher then I'm
able to capture the economics of that
and the society values it to a certain
degree and I'm able to get that now if
the government can say oh well we're
going to print more money now the
economic activity that I was able to
capture in the dollars that I generated
by being a school teacher they're now
worth less and so that will derange how
I think about my money because it's
actually wiser to spend my money
hopefully on something that holds value
but no matter what it is better to spend
your money on the thing that it can buy
today because it will buy less tomorrow
and the fact that behind the scenes we
have unelected bureaucrats that are
manipulating money that cause this
Downstream total derangement of people's
relationship to their own time and
energy
and so just to say it another way by
letting the government print money you
are letting them steal
retroactively your own efforts it's it's
literally crazy to me I cannot believe
people are not more upset about this uh
they're not upset about it because they
don't understand it and so to your point
you have a thing where people even if
they have the time like the amount of
time I've spent to understand it and to
feel like I'm sort of just clinging to
the Bottom Rung of something uh like you
talk about in your book John Maynard
kanes who as somebody who's in the
Bitcoin Community I will say they
[ __ ] hate that guy with a FY passion
and it's fascinating because reading
your book he gets into he basically
describes what I want to do as a Global
Currency literally I'm waiting for you
to say Bitcoin because it sounds exactly
like Bitcoin but he wants it to still be
manipulatable he wants people to have
control but ironically by creating this
this high level currency that no one
government had access to he thought it
would be less manipula but he still
thought the manipulation in my reading
of this was a feature and not a bug
which is why they hate him I think
that's correct I think that correct for
I think that's a correct description of
his theories he had this it's funny when
you read biographies of canes and i'
I've read a bunch they tend to skip over
his what he called bankor bankor which
is his his name for his kind of Global
Currency he was going to create at the
end of the second world war um we tend
to skip over this in histories of can's
because as you may have noticed he
failed in his attempt to create vanor it
doesn't exist it didn't exist a Global
Currency was not created at the end of
the second world war the BR and wood
system as we know today was instead the
World Bank the
IMF and so forth um he but yes as you're
saying I think one of the interesting
things to me about the conversations
that KES and his colleagues and his
enemies frankly were having around
surrounding currency manipulation and
currency Creation in the second world
war is that to me they felt I was
reading canes and I was reading his
opponents uh writing in the 30s and 40s
and going oh my gosh this could have
been written yesterday this is exactly
the same set of conversations we're
having about uh cryptocurrencies that
we're having today this is exactly the
same set of conversations that we're
having about you know do we want do we
want governments to create currencies do
we want someone else to create
currencies who is the someone else you
just talked about currencies being
manipulatable um I would argue that
unless you want a fixed quantity of
money forever which I guess is the sort
of Bitcoin argument that um that as soon
as you move past that all currencies are
they're by definition manipulatable they
they were created to be
manipulated um and so the question is
just who we want to be manipulating it
um unless you're going to make an
argument that we sort of want you know a
fixed pool the kind of Bitcoin
maximalist argument that we really want
a sort of a fixed pool of currency that
can't move up and down ever you can make
that argument but if that was the case
in 1939 the United States would not have
been able to defeat the Germans we would
not have been able to with the economics
but the Germans also wouldn't have been
able to manipulate their own currency to
create that Loop that allowed them to
rearm that's true the yes they would not
have been able to sort of do their own
currency Shenanigans and an arm in that
way though they like I mean these
counterfactuals are always a little bit
tricky right um like describing sort of
what would 1939 have been like with
Bitcoin is a really tricky problem to
solve um because on the one hand you're
like well but they didn't have computers
how would it work um there's a bunch of
practical questions to solve but if
something like that did exist I mean
literally you can look at it today
because what my hypothesis in reading
your book is your book is like talking
about the Korean War during the Vietnam
war you do it to create a little bit of
distance uh so we can really talk about
the issues but really we're talking
about Russia and Ukraine like your book
as far as I can tell man whether you
intended it or not maps effectively one
to one what's going on right now we are
manipulating the US dollar by printing a
metric [ __ ] ton of it so that we can
send Aid to Ukraine without having to
ask the American people if they're here
for it or not because you just print and
it in my words steals from all of us us
because I don't have any say you dilute
my buying power which is the same as
taking some of my money literally
effectively is not different if you
inflate the currency if inflation
because there is a difference between
the amount that you inflate the money
and the actual inflation felt in the
marketplace for reasons that are
fascinating but we'll set aside uh if
you inflate if inflation hits 20% that's
the same as taking 20% of my money right
just so people understand like hey don't
fall for the trip
so they the I'm not even saying it's the
wrong answer to pay for the war in
Ukraine I am saying that it's the wrong
answer to do it without going to the
American people and saying we would like
to get into an economic war with uh
Russia via Ukraine you in or you out and
if they're like we're out then we're out
and that just is and you have to accept
uh I'll finish that sentence and I want
to plant an idea you have to accept that
there is a um there is a wide spectrum
of intellectual abilities and so some of
the voting public will not have the
ability to cognitively understand the
second and third order consequences of
what's going on they will be easily
manipulated by messaging which will be
whether people intended to or not be
tilted in a given direction that just is
what it is but hey Welcome to The Human
Condition I don't see a way around that
so if given the populace speaking up
this is a very Western perspective uh I
believe in the power of the individual
way over the power of the collective and
if those Collective individuals come
together and say this is what we want
then then that is what it is and I don't
believe morally speaking that anybody
from the top should be able to say no
I'm gonna lie to you I'm just not going
to ask I'm going to money print so I
don't have to talk to you and so that
was the vibe that I got reading the book
man and I kept wondering like are you
intending me to read it this way because
you convinced me that the Deep state is
real you convince me that the my own
government is is is at war with itself
that there are people in my own
government that are like I don't give a
[ __ ] what the public thinks I am going
to go to fight on the side of the
Ukraine or God I'm sure there are people
like I'm going to go fight on the side
of Russia I'm sure there are yeah a
thousand per. and so now I'm like whoa
okay here's the seed that I wanted to
plant there are solutions that come at a
hyper oblique angle there's a guy Nam
name b g shason you know him uh not
personally but I know him brother I
think yeah I think you'd find him
utterly fascinating so his whole thing
about the network State and he's like ah
these governments super p a not going to
work to a highly educated public uh once
you divorce money from governments
you're going to find that people no
longer Group by region they Group by
values and while I'm not sure that plays
out at that level I certainly think that
people do group by values whether they
group at nation state esque levels I
don't know oh a lot to respond to there
um on the BAGI topic I think his
argument is fascinating and super smart
I almost entirely disagree with it but I
think there's really interesting things
give me a quick rundown of what you see
his stance as oh great question um you
just did such a great summary of it um I
think the argument so so he's arguing I
take his argument he arges a lot of
different very complicated things but
one of his arguments is against
government created currencies entirely
that this is a p
a as you just said a p these are p a
institutions they don't work they're too
manipulatable and that we sort of want
um he's arguing
against that communities are human
communities are best
formed effectively electronically kind
of not based on physical location
but we'll we'll be getting sort of
networks of people groups of people
building effectively their own kind of
delocalized def
physicalized nation states people can
build their own currencies people can
build their own kind of communities
their own jobs their own
corporations what have you it's a sort
of the the nation state is going away to
be replaced by these other communities
do you think is that a reasonable
description of he's doing you're
probably better up on B's work than I am
yeah I think that that's very close the
the concept of stri governments of the
ability to Overlord on people people by
taking their money away essentially
their ability to manipulate the currency
and then um don't lock them in with your
borders and then see what happens so I'm
pretty so that's see that's a great way
of describe it um because I'm actually
largely in agreement with him on the
open borders question um I'm like my
politics tend to be quite open borders
um as are his from my understanding of
it um the bit where I disagree with that
is that um
the
age-old argument that the the government
is the entity with the um a monopoly on
the legitimate use of force a very
classic kind of argument for that's what
a government is they're the people
they're the people allowed to hurt other
people and we say it's okay that's
that's the definition of a government
that's either gosh my um your listeners
who are uh more versed in enlightenment
philosophers recently than I am will
remind me if that's rouso or lock or
Hume I'm forgetting I'm so embarrassed
in this moment drop in the comments yeah
drop it in the comments who that was but
that's a uh the idea is that that's
that's the definition of the government
right we say what is a government the
government is whatever we say is allowed
to put people in prison the government
is whatever we say they're allowed to
have weapons that you and I aren't
allowed to have they're allowed to use
force that you and I are not allowed to
use that's what defines a government and
I think that's correct and I think
that's a good thing um I think that we
want the the government to have access
to nuclear weapons but not for me and
you sitting here to have access to
nuclear weapons um I was going to show
you mine after the interview [ __ ] much
as I much as I think that my personal
use of nuclear weapons would be entirely
benevolent and right and I would only
use it uh don't we all yeah for the
right reasons and against the wrong
people I think that is a good thing I
think it is a good thing that
only not only do only governments around
the world have nuclear weapons but only
some governments have nuclear weapons I
think it's a good thing that the
government of Iran does not have nuclear
weapons yet I think it's a good thing
that uh we're trying to you know the I
think the situation in Russia and
Ukraine would look a lot different if
Russia did not have nuclear weapons
today right I think that's inarguable
what do you think about um the Second
Amendment right to bear arms oh great
question um so this is one of those
things where I'm a little bit agnostic
like it seems I feel like I keep reading
about this this is totally tendential
obviously to wealth Shadows or anything
um
I gosh it's complicated so I feel like I
keep uh I'm from Chicago grew up there
spent the first 18 years of my life
there um and so Chicago right is
famously a place with some of the
strictest gun laws in America and also
sort of one of the highest rates of gun
crime in America um the and when you do
my loose understanding of the data on
this is that when you
do um cross State comparisons states
with stronger gun laws do not have lower
rates of gun crime than states with
looser gun laws um you can tell me if
you've seen data that contradicts that
but that's my loose understanding of the
situation I I have no sense of the data
I am I'm a junior constitutionalist in
that if I knew the Constitution better I
might make that statement really
aggressively but I know well enough to
be like if that's where we're founded on
then that's where we should be and given
the second amendment's pretty clear now
on the nuclear Armament side yes I'm
with you and so if that ends up being a
uh a violation of the Constitution I'm
I'm here for limiting nuclear weapons
yes so yeah I guess in some level right
we're just
arguing some level it's funny I get
really perhaps because I write write
Pros for a living I find constitutional
arguments impossibly tedious uh at a
technical level or at a philosophical
moral level both and here's why because
every time we have conversations about
well um this depending on how you read
this clause on this piece of paper from
a couple hundred years ago like one set
of people reads that one set of people
reads those couple words this way
another set of people reads this couple
words in another way I write Pros
fiction for a living so trust me I write
books where hopefully different readers
do take away different things from the
text this is a book where as we were
just discussing you can I just wrote a
novel which is not a constitution but at
the same point you know you'll have um
you were talking about the book's
comparisons to the way the book is sort
of clearly making references to Modern
debates about Bitcoin and other
cryptocurrencies and I've had people
write to me since the book is coming out
saying oh gosh I like the book but God
you were so Pro Bitcoin like this was I
I couldn't handle how Pro Bitcoin the
book was and I've had other people write
to me and say gosh I really love the
book but oh this book was so anti-
Bitcoin like you really took such a
strong anti- Bitcoin position I just
disagree with you and I don't understand
and that's um I would argue that's a
feature not a bug of what novels and art
are supposed to do they're supposed to
raise these questions and not give
anyone exactly what they're looking for
if you go into the book with one set of
opinions you should have those opinions
challenged if you go into the book with
a completely contradictory set of
opinions you should have those opinions
challenged um with with constitutional
arguments it ends up being this thing
it's like it vaguely feels to me like
I'm listening to my English professor
friends debate
some monologue in the middle of Hamlet
going oh I think Hamlet felt this way
and someone else is saying I think
Hamlet felt that way and on some level
perhaps this is what I find tedious is
that I find myself going well do we have
data on which version of this kills the
fewest number of people because I feel
like I'm in favor of the one that kills
the fewest number of people and this is
perhaps where
I'm uh a sort of maybe this is where I'm
more of a utilitarian and then I realize
where it's just the outcome matters more
to me than some of the Constitutional
procedural arguments and I
think
um yeah like in some ways I almost feel
like argument about the Second Amendment
per se is a slight tangent to the actual
issue I mean I just I didn't maybe it's
because I didn't grow up with guns I
never had guns around well what I'm
trying to Peg it to so in in all these
questions I'm trying to map the way that
you view the world so that I can
understand and
um so that I the reason to understand
things is so that you can make
predictions and so I think of every
human that I encounter as an
incredibly uh expensive flesh- based AI
that they may draw better conclusions
than I do and if I can map their
thinking and predict their answers then
I now have access to that AI even when
they're not around me so I'm always
trying to understand somebody's thoughts
and then go okay well their way of
thinking is going to lead to you know
this second third fourth order
consequence at least as far as I can
think uh really fascinating when I'm
talking to somebody who looks backwards
to form their um certainly is looking
backwards to understand now I won't put
words in your mouth in terms of why you
do that but when I read your material I
Look Backwards to understand the future
so I read the wealth of Shadow so I can
understand Russia Ukraine and if I can
then Look Backwards understand the
historical context of somebody like you
whose AI is really programmed on
historical events that are knowable it
gets very interesting because I'm like
oh he believes that for this reason we
see that play out historically did that
play out well or not so for instance as
we've been talking though I haven't
wanted to interrupt uh basically every
war that I can think of and I'm I'm not
a historian I want to be very careful
about that so I have a headline reader
sense of what I'm about to say but every
war that I think about post World War II
has not turned out to be what I will
call a just war and so all the things
that we did to manipulate and win
against the Nazis we did to um in in the
uh Vietnam for instance and uh don't
love that one that did not go well
Afghanistan Iraq all of it like it just
starts to get this becomes a game that I
start saying we just shouldn't be
playing it that that the game to itself
is so manipulative and puts the power in
the hands of unelected bureaucrats
although I really do think deep state is
the right it conjures the Right image
certainly in my mind um of these
competing factions within a government
that are pulling in different directions
that may in fact believe another country
is more moral more just more whatever
and so they're trying to pull in that
direction and I will even grant that
they have the best of intentions that
that they want the same things that I
want but they're going about trying to
achieve them in a way that I'm mortified
by uh again reading your book brought
that home to me in in such an incredibly
visceral way that in some ways man I'm
really going to be able to draw a line
in my thinking and say before the wealth
of nation the wealth of Shadows and
after absolutely fasc that's so kind I
really appreciate you're saying so well
the question becomes are you going to
end up hating what I do with that
thinking that's what I'm trying to
figure out in this in this episode is
how do you think so anyway you're you're
telling me things um that you for
instance the thing that made me ask
about the second amendment was uh the
government should have a monopoly on
violence and if Drew was really on his
game he would not have waited for people
in the comments to tell us he would have
pulled that up uh but whoever said it um
that's very interesting but now that for
me brings up questions of well the
founders of our constitution said the
thing you have to worry about is a
tyrannical government that we know
there's something about The Human
Condition that over time a government
entity is likely to bend towards tyranny
and while we think we've built one
that'll keep itself in
check it probably still bends towards
tyranny and so the first thing we're
going to do is say nobody can tell you
what you can and can't say Okay first
amendment baby freedom of speech but
that value is falling out of favor which
brings us back to my whole thing about
it's values are all that really matter
uh the second one is and just in case
they try to tell you what you can't say
you've got guns to protect them if they
were shutting you up so that they could
come do something else crazy now I love
the modern world man and I like that
water just shows up at my house and I
don't want anybody to get confused life
despite the complexities of the moment
that we're living in is still awesome
and within the just proximity of people
that can hear my voice in this room let
alone on this microphone are people that
I love are great and if you lose sight
of that woo we what I think people are
struggling with and this is certainly
true for me I can feel the value system
is changing so anyway what I want to map
in this is your values how they play out
and then as I get a better understanding
of where you're coming from we can talk
about second and third order
consequences right that was all
explanations as to why I asked about the
Second Amendment it's not tangential for
me it's all part of me trying to map how
you view this
yeah wow there was a lot to respond to
there I think
that's fascinating and yes important to
remember I feel like we we see charts in
this all the time that every time
someone sort of starts tearing their
hair out about this being I don't know
the worst time to live in human history
or something you kind of go well
actually the fewest number of people
globally are living at the poverty
line since recorded time like like fewer
people are living under starvation or a
few a smaller percentage of the world
population is living under starvation
condition conditions now than has lived
at any other point in human history that
feels pretty good um you know even
beyond the fact that you and I can sit
here in your beautiful home surrounded
by expert crafts people building these
things surrounded by all this wonderful
technology you know the
world starvation is going down war is
actually the rate of uh deaths to war is
due to war is going down over the last
100 years 200 years certainly 500 years
C certainly a thousand years right the
trend lines you if you zoom out long
enough um and you don't even have to
zoom out that far the trend lines are
all going in the right direction so
that's great um the when you say that
values are changing can you tell me more
about what you mean by that every
generation is going to get the world
that they want and this is the
fascinating Greek curse like an ancient
be careful what you wish for yes yeah
very much so this is why also history
Rhymes is that there's only so many
human personalities which means uh
everybody ex so all right there's only
so many personalities what do I mean by
that think of humans as flesh- based AI
like we were talking about previously uh
it it's a very constrained system with a
ton of epigenetic context so you're born
into an area where you have 50% of use
hard wire there's nothing you can do to
change it and then there are a bunch of
epigenetic tags on you so that um if
your family went through a famine you're
going to respond to calories in a wildly
different way if your family was hyper
stressed out uh it's mother more way
more importantly but it actually tracks
on both sides but if your mother was
hyper stressed out especially during
pregnancy there are going to be all
kinds of epigenetic tags on your DNA
that have to do with just what she went
through uh so you're up against all that
in terms of how you're going to respond
to your inputs now humans are the
ultimate adaptation machine so we are
going to adapt to whatever environment
we're born into so that could be
Geographic what's the weather like
what's the food like how much exposure
to Sun do you have etc etc um and then
it could also be social so hey you come
out in a time of War how do you respond
to that you'll adapt so that's the 50%
of you that is malleable and so in the
50% that's malleable in goes value
system and so if you were about to grow
up in China and have one set of values
but instead the moment you're born I
bring you over to Afghanistan you're
going to grow up with a very different
set of values or I bring you to America
you're going to grow up with a very
different set of values doesn't matter
everyone's going to absorb the values in
which they are born now you'll get
iconic classs obviously um but you're
going to absorb the values that you're
born into now those values along with
beliefs and biological context but now
you have the whole shebang so your
values your beliefs your biological
context they make up this thing I'll
call frame of reference frame of
reference is the distorted lens through
which you view everything in the world
you mistake your frame of reference for
objective truth all right since values
is one of the three things that make up
your entire sense of how you view the
world uh they play an unreasonably
outsized role and since they effectively
govern your sense of what is
moral now it just in terms of what
people want to see reflected in the
world that's a question of values and
you will see the left and the right long
story about how they get set up from a
biological standpoint it's pretty
interesting but for now just accept that
they do there's biological reason why
some lean left and some lean right um
but all of that ultimately comes down to
a value system and so when you see them
colliding they are colliding over values
they often can't explain them because so
much of this stuff is just subconscious
but if the values of the day are um hey
everybody should be treated equally and
we want to see all people rise and be
happy uh then you're going to get that
world whether people try to fight
against it or not take the 60s people
were just like no we [ __ ] had enough
of this we're not going to live in a
place where some people have some rights
and other people based on the color of
their skin do not [ __ ] that that's
ridiculous cool Society got what it
wanted as it always will just throughout
history people have been crushed down
suppressed because the values of the day
were like but they are lesser people
obviously and so because that was the
value system of the day slavery is fine
yeah no problem then that's what people
did and so you can get Nazi Germany
where it's like hey this is the values
uh Germany is not going to be kicked
around anymore by these you know other
imperialistic dogs from Europe we are
going to rise up and we're going to take
back what's ours and nobody's going to
tell us what to do anymore cool Hitler's
able to
the values of the country and then the
ideas follow and then once they bind
your values you're going to drive them
into war But first you have to change
the narrative which is ultimately
changing the values which is changing
their frame of reference which is how
you get people to act so whoever
controls the values controls the world
this is why people say that politics is
Downstream of culture what they mean is
politics is Downstream of the mechanism
by which we manipulate people's beliefs
and values and that very much is culture
so once you understand that
you your morality is controlled by an
invisible set of values you understand
the game of manipulating yourself or
being manipulated by others but that's
what I mean so culture just gets values
it comes across in the music the movies
the TV shows the way their parents raise
them uh and on and on that's really
fascinating and I love your description
of
values as being our own kind of blurry
lens that we internally are through
which we internally are viewing the
world and and we know it's blurry and I
think one of the interesting things
again is someone who writes books and
makes films like the point of that is to
hopefully sort of contribute to culture
right like you want people I make things
so that people will engage with them and
so that people will hopefully feel that
their I don't know their moral framework
is being challenged or their
understanding of the second world war is
being challenged right you want some
kind of um you want you want people to
be we're a better culture of people are
constantly challenging their own values
is this really what I believe right is
this I think that's something it's
something I do a lot right where you're
saying is
this am I right you know I've been
saying uh whatever about the Federal
Reserve for a couple years but is that
right do I still believe that is that
still right like I giving ourselves the
opportunity to be wrong constantly
challenging our own Frameworks
constantly surrounding us ourselves with
people who will challenge our Frameworks
I feel like that's and as you're saying
our especially our Frameworks of values
is really important I mean I've never
had as you're saying we hold our values
pretty dearly but there's nothing it
feels a valuable exercise to try and
have them poked at by by someone else
especially someone else who's thought
very hard about about their own value
system right um especially if they I
don't know believe in a God that you
don't or they believe in a kind of
ethical framework for the world that you
don't I think that's um I guess I would
make an argument that that's kind of the
work of culture is to sort of create a
constantly
destabilizing you know kind of like
workout for all of
our Frameworks of
values when you look at everything that
the government has historically done
with money printing manipulation Etc um
do you see that as a path forward that
we want to continue on
or do you want to see something like a
Bitcoin coming to existence or a bankor
coming to existence that's outside of
any one nation state I think
that government created and controlled
currencies
are an imperfect solution to the problem
of how to organized Human Society but a
better solution than I've seen from
frankly any other comers uh including
Bitcoin maximalists it's funny you're
using the word manipulate to describe
what governments do with currencies and
I think that's correct I don't disagree
with you um I guess I would just say
that manipulates a funny word because it
sounds somehow
nefarious um I though
in the sentence I just said I just use
the word controlled which now that I
think about it also sounds vaguely
nefarious doesn't it uh create or alter
might be other words we could use to
describe what's going on and and creates
an important one because I would argue
that uh the book sort of gets into this
I mean there are these part of what
kanes was looking into and part of what
um a lot of the character can you tell
people who John mayard KES was uh sure
John mayard KES was I would argue the C
certainly the most influential Economist
of the 20th century if not the most
famous and influential and influential
intellectual of the 20th century he was
a British Economist though not by
training uh he had no real economic
training because I think until John
maner kanes came around frankly that he
almost invented the field of economic
training as we understand it today he
was um as I said he was English born
into a very kind of uppercrust Posh old
money English family um and you know
sort of had all the Hallmarks of that
kind of
upbringing um time in the Foreign
Service um and he became uh uh
he got a teaching position at Oxford
quite young I want to say he was 24 25
um and in that time he basically
pioneered a lot of like what is now the
field of Economics like remember before
that before can's economics wasn't
really a field um you know you go back
to something like Adam Smith um who did
not describe himself as an economist uh
he was a philosopher it was just
philosophy and the word economy was in
there but that was just philosophy
economics was not its own study yet it
took a little while until the sort of
early 20th century for economics to be
its own field of study and kanes is one
of the people who made that the case um
you know his biography is fascinating he
was a sort of as as you were saying a
kind of like midlevel mid uper level
like government he'd spent some time in
the government he was a bureaucrat
certainly um and I'm so glad feel like
so so much of this book is a defense of
a defense of bureaucrats uh SL the Deep
state or at least showing how they can
be useful and Kane certainly spent his
time as a bureaucrat but first world war
first world war breaks out and he is
basically asked by the government to
manage the British economy through the
first world war which he did um and this
is one of his unquestionable Geniuses he
somehow man manag the British economy
during the first world war and sitting
here today I don't think I or maybe
anyone else alive could really explain
how he did this he somehow managed it so
well that Britain left the first world
war in better shape economically than
she entered it which given the
destruction on all sides in that war is
unfathomable to me um he was at the end
of the war greeted as a national hero
and it says something I think a lot
about British culture certainly at the
time that an economist became a war hero
at the end of the the first World War I
mean everyone was stunned by how well
the country was doing then he goes to
the Treaty of Versa he's there as part
of the British delegation signing the
Treaty of Versa where he quite famously
and quite publicly quits in a huff
because he felt that the treaty that the
British and the French and the Americans
were the peace treaty they were signing
with the Germans was so punitive against
the Germans for having quote unquote
started the first world war that it was
going to can's felt that it was going to
Doom Germany to all of these debts to
generations of poverty that would end up
producing
the cultural and social conditions under
which some sort of dictatorship might
later emerge um can's at the end uh at
Versailles he quits Paris and leaves and
basically with shocking and terrifying
accuracy predicts to the letter the next
20 years of German history and says if
you guys do this he doesn't you know
he's not calling out Hitler by name but
he basically predicts what's going to
happen in the next 20 years of German
politics ending with you know the rise
of something that looks a lot like the
Nazi party and he says if you guys Force
the Germans to sign this deal this is
what's going to happen and if that's
what you're doing then scree wall I'm
out and quits in a big huff and he
writes it up into a pamphlet do you
remember his reasoning what why did he
think such a punitive thing would lead
to a hitleresque character because he
felt that it would Force so first of all
it was going to force the Germans into
Decades of crushing poverty and he was
certainly of the belief that if you
force a population into Decades of
crushing poverty they're going to choose
political solutions to that poverty that
are horrible um I think canes felt
that um you
don't countries that are doing really
well economically don't Veer towards
dictatorship
that comes
from that comes from crushing social
catastrophe and he felt that you know
when
you that punishing the Germans was it
might feel really good to say oh you
guys started the war or of quote unquote
started the war and we're going to
punish you and you're the bad guys and
we're the good guys and it feels so good
to kind of punish The Losers of the war
but it's going to
you've now created all these social
conditions in Germany where not only do
you have widespread poverty but the
government has to spend so much of its
resources towards just paying the
British back paying the French back
paying the Americans back paying back
all these War debts they're also going
to get all this resentment German are
going to grow really resentful for
devoting I forget what the percentages
are but however whatever significant
percentage of its GDP is just going to
get sort of sent out the door to their
former enemies in the British the French
and the Americans and
you want to get a bunch of people really
really angry you tell them oh you don't
get to have food this week because
actually the government's spending all
of its money sending it to London um
that's going to get a lot of people
really pissed at London it's going to
get a lot of people really pissed at the
English um and it's also going to get as
it would turn out a lot of people really
really pissed at the Jews who they
believed were s of controlling the
global economy and some sort of insane
conspiracy theory um and sure enough a
lot of people really did come to grow
tremendously resentful in Germany about
the rest of Europe about the Americans
certainly about you know Jews across the
world and so K predicted all of this uh
writes this paper the papers writes it
in a sort of he publishes this book the
book somehow becomes a bestseller all
around the world I mean this was a time
when John mayard canes could be like the
bestselling author of the year with this
economic Trea about why the um why the
Versa was such a bad idea uh but then he
goes He Lives his fam fabulously
Glamorous Life where he invests really
early in the artistic careers of Pablo
Picasso and Virginia wolf he buys these
Picasso paintings really really early
before they were valuable Virginia wolf
he knows and gives her a house to write
her first novels um he has this great
artistic taste it's this very kind of
classy old money sort of world that he's
from um he makes
Untold fortunes actually on the currency
markets which now we would consider
tremendously unethical because he was a
former government uh you know he was
managing currency for the British
government and then made a ton of money
on the currency markets in the 20s we
did not you know they did not have the
same ethical rules that we would today
Jerome Powell could not go and sort of
play the currency markets the way John
maner kanes did in the 20s that would be
illegal tell tell that to
Congress um but uh seem to work out fine
he sort of had these Untold fortunes he
made um so canes was uh personally he
was gay for his entire life and quite
open openly gay with the folks around
him um he we find in his Diaries He Kept
these amazing he kept these amazing
Diaries of all of his sort of sexual
encounters he kept these um they're
really funny to look at people can
Google them they look like Excel
spreadsheets where you kind of check off
the various characteristics of all of
the men who he was kind of meeting and
sleeping with and many hundreds of them
every year it was quite a oh yes he
canes was a dashing wealthy man in an
exciting period in British history um
and again this was the worst kept secret
in London was that canes was sort of an
out out
homosexual uh uh meeting men in parks
and going home with them it was I mean
he was really famous too so it wasn't
like this was a secret you could keep
particularly well um but so he was
personally he was gay his whole life
until he then met a woman named Lydia
lakova who was at the time the uh Prima
ballerina in the Moscow ballet then
engaged to a messy divorce from eigor
Stravinsky somehow KES meets her falls
in love begins his first heterosexual
relationship they get together he steals
her from
Stravinsky they get married um attempt
the sort of what turns out to be this
wonderful life together together for
decades afterwards um in what by all
account seemingly was was quite a happy
heterosexual marriage um and you know
you can imagine kees is the most famous
intellectual alive at the time Lydia
Lova was the Prima ballerina of the
Moscow ballet who just divorced one of
the most famous composers in the world
they were a sort
of it's like a Kanye Kim Kardashian kind
of marriage it's sort of two of the most
famous people in the world get engaged
in this messy thing
um and it was this level of sort of the
glamour around canes is hard to convey
today because we talk about him as being
an economist and it all sounds kind of a
bit dreary but he was anything but
dreary um and so kees was canes was
basically running the when the second
world war breaks out kanes is basically
running the kind of British economic
operation um he wasn't officially at the
ex cheer when the war broke out but he
was such
a he was so powerful and important in
in Britain that they kind of nobody did
anything without kind of going to him
and checking with him and um he didn't
he they ended up giving him an official
government position at some point during
the war but I think at the beginning of
the war he didn't even have an official
position he was just kind of like well
look we're going into war so clearly the
person we need to ask is the most famous
economist in a 100 years if not ever
John maner kanes and so he ran the
British war operation and so he was in
some ways um he's in this book He's sort
of the antagon he's a and antagonist of
our Americans uh our American Heroes
because they one of the big questions on
the American side during the war was how
do we
fund the United States had to fund not
just the American war operation but the
British and French War operations as
well and kanes was in charge of the
British side and he very much felt that
um the he the Americans wanted Britain
to pay for all the weapons we were
sending them and Canes felt that well
wouldn't it be quite nice if you just
gave us all these weapons and we didn't
pay for them wouldn't that be a better
solution for all involved and that was
his position through much of the war
there was a lot of kind of economic
wrangling around around this fact that
you know in again in 39 and 40 the
Germans had built up this massive war
operation the British military was a
some tiny fraction of the size of the
German military the French military was
a tiny fraction of the size of the
German military the American Military
wasn't even tinier fraction of the size
of the German military the the
collective Allied Forces were outmanned
and outgunned in 39 and 40 in every
conceivable way and so what our folks at
treasury had to figure out how to do
was do what the Germans had done over
the last few years how do we build up
our own massive war operation and build
it very very quickly um and moreover the
British don't have a war operation the
French don't have a war operation um
you know we need to like like physically
Britain doesn't have enough bullets to
go to war they didn't have bullets how
many we need to start making millions of
bullets and we need to start making
quickly they were making three million
bullets a month com you know there
was World War II took a lot of bullets
and someone had to make them and someone
had to pay for the making of them
and neither the UK or France were in a
position to be able to make them so the
US basically became the armorers of the
entire Allied war effort and that took
quite a bit of government expense um to
one of our earlier topics of
conversation the way
they financed the building of to way the
way they financed
the creation of all those bullets was by
printing quite a lot of money because
someone had to pay a bunch of guys in
Detroit to build a bunch of factories
that would then make all these bullets
and that that took money printing which
means the guys in Detroit paid for their
own making of the bullets along with
everybody
else well yes I maybe this is where this
becomes an interesting question of you
were talking earlier about your sort of
understanding of and I think the book
gets into this too that like if we
accept that money is essentially a
fiction like it's not real right there's
nothing real about it it's just this
thing we use so that Society can help
function we can Define it however we
want to and I I would argue actually
that that's one of you just asking about
kanes I would actually argue that's one
of his greatest insights so we talk
about K's K's is talked about as being
sort of an economist of the left and I
think that's true um but he's an
economist of the left who is very much
not in the shadow of Marx he is no
Marxist he is no socialist he is
certainly no communist um and kan's big
contributions to economic thought are
largely around exactly what we're
talking about which is money printing in
times of economic distress that is in
times of economic slowdown the govern
should print more money to hire more
people to do more jobs uh to work more
jobs so when we talk about you know the
US response to the Great Depression and
the idea of okay the government's just
going to hire a bunch of people to build
roads and dig ditches and do whatever
that's a very Keynesian approach to uh
to the problem um the frankly what the
Germans did in the 30s to build up their
War operation and to build the autobond
was a very Keynesian approach that was
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really fast I want to yeah I want to
challenge an idea there and I want to
get your feedback so um I would say this
is why people in the bit Community
Bitcoin Community absolutely despise
canes is that it is the very same thing
that led Germany to have to do Conquest
after Conquest because when you're
printing money you're now even though
money is quote unquote a fiction which I
hear you but there is this real concept
of value right that I will give you a
thing if I get a thing that I want that
is of equal or greater value and so just
the easy way to do it is to create what
we call currency now when you print more
of that you are taking money from
everybody that holds that currency and
part of the reason like you you need
only think of it as uh it's
counterfeiting that's approved for the
government so the government is allowed
to counterfeit their own currency but
the question you have to ask then is if
they can print money why don't they just
print everybody a billion dollars and
people will either get stuck on that and
go yeah why don't they just print a
billion dollars or they will go oh my
God even printing me a dollar is that
same problem just smaller and so now
we're asking a question of not does this
destroy the um stability of the economic
system but it's just a question of how
fast so I'm willing to destroy it
because I hope that when it falls apart
it falls apart after me or that we can
sort of Limp this thing along long
enough or maybe they have a vision of
well the currency in Great Britain the
Sterling uh they used to be the reserve
currency and you know look they're fine
now and so what's it matter that they
used to be the most powerful economy in
the world and now they're you know God
knows where so um people I think lose
sight of that at their Peril so the fact
that KES wants he doesn't want to go to
say gold which is way too restrictive
you can't manipulate it I know you don't
love that but I stand by that choice of
word
um because of that you now get into the
people hate that hate that because it is
taking from everybody else in an
invisible way with no vote Yes I don't
disagree with anything you just said um
May I give you the Keynesian counter
argument to that so two things one um
and this isn't just Keynesian but uh why
does gold suck as a global Reserve
currency and a currency overall because
it's the amount of gold in the world is
not fixed we keep finding new stores of
gold all over the place there is a lot
more gold now in the world than there
was 100 years ago um and gold is the
worst of all possible options because
not only at least with Bitcoin you have
the argument that okay there's a fixed
store of these things there's this is
the number of Bitcoins that are ever
going to exist with gold somebody finds
a new mine somewhere someone finds some
new store of gold you know 100 miles
below the Earth or a mile below the
Earth or something somewhere in the
middle of nowhere oops now the price of
gold on the all over the world just
fluctuated and it fluctuated totally
rank randomly um that's even worse than
Central planning because you have
fluctuations now depending on like what
some mine happens to do someday so um I
would argue that uh gold as a currency
manages to combine both the worst
features of Bitcoin and the worst
features of the US dollar the Keynesian
argument to the why don't we just print
everybody a billion dollars is I think
this is a really interesting point about
Keynesian Theory and um
what he would say is and I think this is
his famous quote I think I'm going to
get this right I'm always mangling these
quotes but I'm pretty sure this one's
short enough that I can do it right
anything we can actually do we can
afford um I I would argue that that that
single sentence is utterly Central to
Keynesian thought um and it's and it's a
thought that I agree with I don't agree
with everything about keynesianism but
that's a bit that I will totally agree
with the which is to say that the reason
we can't print everyone a billion
dollars is because everyone is not sort
of doing a billion dollars worth of work
um that money is fiction money is all
made up it's just stuff we need to move
around in order to sort of get real
things to happen in the world we can
Define it however we want we can make it
do whatever we want we can make it work
however we want the thing that matters
is what happens in the real world um if
you want
to if you want if you want to make a
bullet the the con
rint if we have the technology to make a
bullet we can make some bullets and we
can make as many dollars to go make
bullets as we want to because we have
the technology to do that we know how to
do it if we want to build a cold fusion
machine you could give as you the
government can print as many billions of
dollars as it wants to build a cold
fusion machine it doesn't matter we
don't know how to do it we're physically
incapable of doing that the thing that
matters is is the real world meaning if
you
put uh newly printed dollars
inflationary dollars into cold fusion
and it doesn't work you just inflated
the money supply exactly but if you do
it to create a bullet which has an
economic unit of value you did not that
is the argument and um and so you can
create money and have it not be
inflationary to the degree that the real
world corresponds to to the money you're
making so a word that actual work actual
productive use and part of this has to
do with kind of how we defined like what
are actual Goods in the actual world
right um establishing that money is a
fiction you can't eat money you can't
you know money doesn't keep you warm at
night right the the heat that goes into
your house keeps you warm at night the
the blanket that's over you is what
keeps you warm at night money is sort of
a tool that we use and the way we kind
of think of money now is we use is is a
tool that we use
to kind of move Society in such a way
that a lot of people can get blankets
over them at night or that more people
can have blankets over them at night
than had blankets before because we know
how to make blankets we have the
technology to make blankets if the
government aian thought would be that if
the government wanted to spend money
making I don't know how many how many
Americans are there now 300 million 400
million 30 is the last official count
but we we'll get back to your open
border statement from earlier so great
so let's call it 330 if the government
wanted to make 330 million blankets so
that everyone in America could sleep
with the blanket over the night we
absolutely have both the technology and
the money creation ability to do that we
have factories that can make blankets we
have Logistics systems to make blankets
I mean Logistics is a part of this too
right
um
what we can do that and the argument is
that would not be inflationary because
that's creating real value for people um
it's creating like real things that
people can actually use in the world if
we can actually do it we can afford it
and we can make the limits on how much
money we can print are physical limits
another great historian who sort of
whose work went into this book a lot is
is David Graber who we should certainly
talk about um Contra canes David Graber
was uh he just died a couple years ago
very sadly um he was a socialist he was
like an out andout um very proud
socialist but he wrote a wonderful book
that I can't recommend more highly to
your listeners called debt the first
5,000 years and it's a wonderful history
of the concept of debt and this shows up
in my book and I really just stole it
from greyber because I think it's so
brilliant um he talks about the idea
that um
effectively digital currencies predate
physical currencies that um one of these
questions that kanes is looking into and
frankly other economic historians are
looking into is where money where does
money come from where where was money
created who invented money where did we
come up with this thing Adam Smith tells
this theory that we've all heard we Adam
Smith sort of popularized a theory that
became kind of how economists tend to
talk about it now which is always some
kind of parable about like there's two
farmers and one of them has horse or one
of them has cows and the other
one uh has hay or something and the guy
who makes the hay wants to sell it to
the cow guy and the guy who has the cows
wants to sell it to the hay guy but they
don't know how how much hay or how many
cows is a barrel of hay worth how many
barrels of pay as a cow worth if only we
had some sort of system for figuring out
what things are worth and then I can
exchange them like actually giving you a
cow is physically really difficult so
gosh if we only we had some little slips
of paper we could use to sort of smooth
over this transaction and so money was
created okay that's a very standard Adam
smithian account of how money was
created um uh an account that
uh that Graber I think sort of brought
my attention to it's it's usually called
the Tartus the of money creation um
because it comes from another school of
economic thought is that this did
not that that entire story is ridiculous
that didn't happen that has never
happened um and in fact we've we've
never found evidence of any human
civilization no matter how old looking
back however many thousands of years we
have never found any evidence of any
human civilization that didn't have
money money predates written language
money
predates um moneyy is as old as belief
in God as like people in into the stars
and wondering what's out there money is
as old as the human brain because and
they didn't use little pieces of paper
um but they effectively had sort of
rituals and processes and
tablets um around which people could
make check marks to record debts because
money is debt um and we know that's kind
of literally true right like on a a
dollar what makes a dollar a dollar it's
the part on it that
says if you bring it to the treasury
we'll give you this much in gold they
don't actually do that anymore but
that's what it like says that on dollar
bills right like that's what the value
of dollar a dollar is a debt all dollars
are debts from the US Treasury money is
sort of literally this history of debt
and so the garine argument that I find
quite
compelling is that the history of money
is is really a history of human society
and so so we had money long before we
were kind of moving pieces of paper
around and so we can't think
about the questions of like what money
is and what do we want it to do are as
you were just saying earlier they're
questions of values if we know what we
want to do as a
society we can determine how to make the
money system sort of do that for us if
what we want to make is 3 million
bullets we can make a money system that
makes us a lot of bullets if what we
want to make is blankets we can make a
money system that makes us a lot of
blankets if what we want to do
is capture territory and kill a bunch of
strangers and enslave a bunch of people
we can also make a money system that
does that and I would argue that the
sort of Keynesian argument is is also
this one of similar to what you're
making it's this argument about values
it's
saying it's a better thing to do to
design an economic system that makes
lots of blankets than an economic system
that makes a lot of
bullets uh if I understood that well
I'll be able to sum it up in a single
sentence which is to map it to to a law
of
physics
uh value can be
created but it is only destroyed when
you don't get a good of comparable value
for the money that you created so it's
probably better to say it in money money
can can money can be created but it can
only be destroyed if you fail to create
a
good of equal value meaning if I've
understood all that correct uh and this
is why I was saying earlier that
inflation is a tricky beast and that it
doesn't map one to one because if you
create money and out of thin air but you
do it in such a way that it creates a
good that people want so you paid
somebody with new fake counterfeited
money printed however you want to think
about it if you pay them to make a
bullet
with that newly created money as long as
you get the bullet at the end it was as
if there was already a balance between
the money and the thing but if in the
case of covid you just give people a
bunch of money and there's no economic
output then you do destroy that value
and now you are back to what I was
saying which is that form of theft where
you printed money nothing of economic
value came out the other end and so now
you have literally taken from everybody
and spread that
uh you you have as they say socialized
the losses because we could get very
complicated as to how the money gets
into the system which favors people that
own assets which then tends to favor the
rich and this is how you accelerate the
rich poor divide which is another reason
that uh people that are against canes
absolutely hate money printing um but I
can see the logic even though I think it
is a system that becomes so dangerous
because you
will some very distressing amount of the
amount of time put money into the system
without creating something of economic
value and therefore it takes I think
that's uh wonderfully put and I I
honestly I agree with all of that the
yes you're going to make mistakes
sometimes you're going to print too much
money sometimes like you're going to
sometimes you're going to overshoot
sometimes you're going to undershoot
right um you're always trying to gauge
money printing to the amount of real
world goods and I actually liked a lot
when you use the word value in your kind
of neonian physics example I think value
is a very good way of thinking about it
that um uh and another way of framing
this might be to say that
um here's why I think value is a good a
good word to use here Adam Smith would
argue that um there is no such thing as
value Adam Smith would argue that uh
this cup is worth the cup that I'm
holding in my hand right now is worth
exactly what I can convince you to pay
for it if I can convince you to give me
a dollar for it it's worth a dollar if I
can convince you you to give me $100 for
it it's worth $100 there is no inherent
Worth or inherent value to this cup um
KES would say that's [ __ ] um it does
have inherent value the inherent value
is that it brings in this case the last
bits of cold coffee to my lips like it
does a thing it physically does
something and that thing has value and
that thing has value to society the
money part that we use to sort of
describe it who cares that's just the
that's just the money bit um the value
it has is
real um so yes when we talk about which
sounds a bit kind of Airy and
philosophical but I think it has direct
application to what you're describing
about the kind of Co era money printing
that first the Trump Administration and
then the B Biden Administration did with
the uh I forget what they were called
the two there was two stimulus packages
right the Trump era one and then the
Biden era one um so I
would while neither were perfect I would
defend both and say that at the time in
they were 2020 and 2021 if I'm
remembering this right correct me if I'm
getting the ear wrong I would I would
make the argument that given what was
the kind of societal cataclysm that was
those couple covid
years printing too much money you'd
rather air on the side of too much than
too little and they aired on the side of
too much and I would argue boy did they
ever air on the side of printing too
much they printed a lot too much um I
don't think anyone would make the
argument in hindsight that they printed
just the right amount they obviously
printed too much um hence the rise in
the rate of inflation that we're seeing
today and we're seeing it all across the
board right because I mean I think
comparing it to Europe is a great
example where um you
know inflation is bad in the US but
compare it to Russian inflation I mean
we're what isn't it like 15% % 20% it's
terrible in Russia compar it to someone
in your comments can look up the numbers
it's much much worse um or Drew or Drew
can look it up compare it to the UK was
worse France was worse Germany was worse
um the US has done I would argue
comparatively quite well in response to
sort of comparable economies across the
world okay I haven't looked at this but
I will say that because the US dollar is
a world Reserve currency we're actually
Outsourcing a lot of our inflation which
is partly why we don't feel it as much
at home agree I don't disagree with that
um I will agree yeah 100% agree with
what you just said but I would make the
argument that if you're going back to
2020 and 2021 you'd want to while
ideally you would get the amount of
money You' print the exact right number
of dollars to precisely correspond to
the amount of economic activity going in
the world you're you're looking at a
period where there's widespread
unemployment right where people are
stuck at home people are not producing
Goods they're not producing value into
the real world no one is making cups no
one is making I mean I write books for a
living and I remember this period in
2020 where I had my book before this
came out of the beginning of 2020 and we
physically ran out of books because the
printing presses stopped like the the
factory where they print I don't even
know where the factory where they print
these hard covers is I think it's in the
Northeast somewhere the factory was shut
down right so they were just there
weren't any more books um like that's a
supply chain problem that had not been
faced in the United States since I don't
know when if ever um so you know I could
I can write as many books as I want but
we physically lacked the ability to
print them and send them to people so
there's all this value that's being lost
um so we're kind of printing money to
fill the Gap and as you were just
saying obviously that money wasn't
people were paying rent people were I
mean a lot of people used it to pay down
debt which is not super helpful um but
people were
not using that money to I don't know
build High ways or print books or build
cups um and so we got a lot of inflation
the argument in the so the pro argument
for that that I would make is you want
to better to air on the side of too much
than too little because airing on the
side of too little couldn't means too
little could mean widespread
unemployment the likes of which we've
never seen in the United States since
the Great Depression and the Great
Depression and and while the inflation
the United States is currently not ideal
and bad it's a lot better than Great
Depression era
unemployment yeah it is uh okay this is
where it starts getting complicated so
um no one wants to see people without
jobs I was I changed the entire focus of
impact theory of the show uh as my very
small contribution to what I thought was
going to happen because I did not know
what money printing was uh and so I
thought okay people need to buckle down
they need to know how to weather this
storm the problem is that while money
printing worked and it did a very good
job of making sure that all of us in
2020 did not suffer it does create
suffering for the Next Generation for
sure and so we said hey we don't want to
suffer so we're going to leave you guys
to suffer and so what I want to know is
what do you think history tells us about
the money printing that we're doing now
and the national debt that we racked up
because when I put it in context of the
wealth of Shadows and what happened to
Germany and how crazy their debt was and
the madness that ensued because they
were just so burdened with debt and what
we can learn from Great Britain and what
happened to them because they were so
burdened by debt um what does history
tell us about this moment money Printing
and our national debt um it's a great
question so obviously during the second
world war the United States printed a
ton of money and racked up a ton of debt
um and we did it to win a war war that
we felt I would argue correctly and I
think we would all argue correctly was
existential and sure enough it worked we
won the war as we all have noticed um
and the and the
the and we ended up building a bunch of
factories to build bullets and build
airplane you know the airplane factories
are still there right like the Boeing
factories are still there they're still
making airplanes um we ended building up
during the war we used all the money
Printing and all the debt all the
government bonds to build a bunch of
things that are kind of Blue Chip
valuable American
Industries um so I would
not I I would again say
that it's the issue isn't money printing
itself the issue is what are you using
the money for the devil's in the details
here um if you're using the money to
build build factories that can now
produce airplanes that we can sell all
around the world and people can use to
fly places there's there's value created
there um if you're using the money to
just sort of like go into the black hole
that is the Wall Street Financial
system I would argue that not that much
value is being created there um so what
does history teach us about money
printing per se and debt per se it's
it's they're not per se problems but
itend depends on what you're doing with
them you know I think now I mean I'll
here let me give you an argument against
what I'm just saying which is yeah so
the argument against what I just said is
okay Graham that's well and good but
we're not we are not engaged in World
War II right now like yes we're funding
a Ukrainian War operation yes we're
making weapons for Ukraine but the I
mean you can remind me of what the
however many billions of dollars 80
billion was that the last Aid package to
Ukraine the most recent perhaps yeah but
that's certainly not the sum total it's
a couple hundred billion something like
that total got to be I don't know the
exact number but it's yeah hundreds of
billions hundreds of billions um so
though that gets a little bit
complicated because the most of those
values are the value of weapons we've
already built that are just sitting
there that we're giving away rather than
selling them or we're basically we're
actually doing the same thing we did
with the British in the second world war
where we're saying uh we're going to
quote unquote sell it to you but you
don't have to give us any money now
we're going to give you a loan to pay us
for
it so and it's a little bit unclear
exactly when these loans are going to be
due like we did this in the second world
war with Britain right we funded their
entire War operation by um there two
programs the first was called Cash and
Carry the second was called L lease and
in a nutshell the basic idea of of these
programs was saying to the British we're
just going to give you a bunch of
weapons that you're quote unquote buying
from us um but we're also going to loan
you the money to buy them from us so
we're just paying ourselves the money to
make these weapons um you're going to
pay a small interest rate on those loans
and the loans aren't due for 50
years um and so sure enough there was
some funny moment I want to say it was
in '94 1996 when Britain finally paid
back its World War II loans to United
States like at the point where frankly
due inflation the value of those loans
was neg
um so they're kind of
fake it's a way of looking like we're
kind of charging for the weapons without
actually really charging anyone for the
weapons
um and in the second World of War I I
would make the argument and certainly
kanes make made the argument that this
was the right thing to do because it was
really really important for US security
that Britain had a bunch of weapons to
fight the Nazis because certainly in 39
and 40 they were actually at War and the
United States was not so we could make a
bunch of weapons the US can't use them
we're not a war but Britain was um
moreover it was vitally important for US
National Security interests that Nazi
Germany not take over Britain that would
have been bad for America so if a bunch
of kind of fake loans is what that
takes great a small price to pay
literally speaking um it's a little more
complicated with the aid to Ukraine
because when we talk about these AIDS
packages some of it is direct financial
aid but if I'm remembering rightly it's
a lot of just giving them giving the
ukrainians Weaponry that's just sort of
sitting there and um and then like loans
to quote unquote buy the weapons that
they're never going to pay back and no
one is expecting them to pay back and we
know they're not paying it back they
know they're not paying it back it's
fine um but but then of course we have
to sort of use a bunch of money to
build kind of rebuild the weapons right
if we're giving them a bunch of bullets
in theory we have to go make a bunch of
bullets next year so that we can have
some bullets around because the US
military doesn't want to run out of
bullets um
so your question was about what what
these events in history teach us about
about this present moment and and I
guess I would argue that what they would
show is that
um neither money printing nor these huge
debts are intrinsically bad if we're
using them for the right thing and if
we're using them to build productive
capacity like the US left the second
world war in much better shape
economically than she entered it um I
would argue that the American this isn't
even my argument this is a pretty
commonly accepted argument that the
American
economic um success of the 1940s and
1950s through the 1960s was because of
how well we did economically during the
war we made
we shrank unemployment we made all these
jobs we used government money to build
these factories and then sure enough
those factories could produce cars and
all sorts of stuff after the war that
you know created the like
life of America in 1950s that we all
sort of talk about today so so what
you're actually doing with the money
really matters now I'm again going to
argue against myself and say okay but US
national debt now is significantly
higher than it was during World War II
and there was a war on then so really is
this actually a sustainable level of
debt um obviously it's a tricky question
because it is by definition
unprecedented the US government is in an
unprecedented level of debt right now
the argument I would make is that people
keep buying treasury bonds so I know I
was just talking [ __ ] about Adam Smith a
minute ago but if the value of something
is what someone will pay for it well
clearly the global markets seem to think
that the treasury is good for the
money you if people didn't buy t- bills
then we'd have a problem but we don't
seem to have a problem selling them
so like in theory on some theoretical
level is a Deb a problem I suppose so
but in the real world it's hard to find
evidence of the actual
problem okay so the evidence of the
actual problem do you think that people
will continue to buy them no matter what
our debt to GDP as a I think is a good
indicator not everybody agrees with that
but we'll use it for now do you think
there is any number at which point the
debt to GDP becomes so problematic that
foreign institutions stop wanting to do
transactions in dollars for instance
they stop buying our bonds I think it's
a great question again this is sort of
theoretically yes but I'm hardpressed to
say what that number is because the
global market for treasury bonds seems
to have lost none of its appetite over
the last decade much less the last 50
years what I I don't see any sign that
anyone sort of going oh gosh the now
that the debt to GDP ratio hit whatever
it's at right now now I'm going to buy I
don't see a real world actor buying
fewer treasury bonds as a result of that
well so that may just be um uh that
you've missed some of the headlines so
China is going hard in the paint to
divest themselves of us bonds uh they
are getting out of the US dollar game
they have teamed up with the brics
Nations which I'm pretty sure I've seen
you right about um so you've got got but
isn't that because of their own currency
game I mean yes so I'm interrupting you
sorry no none at all please well no I
was going to say that isn't that their
own I mean the uh the Chinese government
is facing their own massive currency
problem um you know their Co era
inflation it's really hard to tell
because all their government statistics
are lies but from what we can tell
government's lies gram Mo you it can't
be true this this is great I've
convinced you that bureaucrats are good
and you've convinced me that
government's lie oh you have not
convinced me the bureaucrats are good
you've convinced me that our government
is full of people that have their own
agenda and they are pulling in different
[ __ ] directions you convinc me with
something very scary very scary in fact
yeah we'll we'll get I have I have one
question about that that we'll get to
later but first China China give me take
always gosh I'm so far from a China
expert um and again every time I try to
look at this um I feel like it's really
hard because it's you don't have to look
Beyond Breton Woods as far as I'm
concerned to tell me what you write
about in the book ly fascinating you
prompted me to do a ton of research
about this um but Breton Woods I think
predicts bricks and explains exactly
what is going to happen and so the only
question is in in Breton Woods which
country is America now is America still
America or are we Great Britain are we
Great Britain are we uh India we're
going to be somebody else's Pawn are we
uh the Soviet Union and we're just going
to like Hey we're not going to let any
you control us we're out like what's
going to what do you think this moment
represents for us with if I'm getting
the numbers right the debt that was
crushing Germany so bad they turned into
the Nazi war machine was in today's
dollars $1 trillion that was the
crushing debt can't see beyond it oh my
God country's terrible $1 trillion guess
what everybody we're $32 trillion in
debt so
uh interest rates go up servicing the
debt becomes a problem already if I'm
not mistaken we spend more in servicing
our debt than we spend in uh uh military
um keeping our military up this is
bigger than that in like three years or
something it will be our single B
biggest expense and in uh now I'm making
it up but it's something like in four
years at the current rate of growth that
uh simply servicing the interest on the
debt will be more than we bring in in
taxes full stop all of it together which
means now your only way to service the
debt is print print print which is how
you keep creating the problem uh yes but
back sorry because I I say that as the
framework for you to answer the question
who's America in the new sort of Bret
and woods um a great question and I
think it is vitally important to us
economic interests and to US National
Security that the United States do
everything possible to make sure that
the US dollar Remains the global Reserve
col currency do you think shutting off
Russia moved us towards Romania
the uh the dominant Reserve currency or
away from oh good question uh it
probably hurt short term because Russia
is doing far less of its trading in
dollars um and it's going to push them
towards Remy be or uh God knows what
else um but the argument would be in the
long term it's better if the war kind of
reaches a satisfactory conclusion so a
mixed bag but I think it's no secret
that the Russian government does not
want the US dollar to be the global
Reserve currency anymore nor is it any
secret that the Chinese government does
not want the US dollar to be the global
Reserve currency anymore um both kind I
mean I don't think anyone thinks the
Russian currency is about to be a global
Reserve currency they've been largely
cut off from the Swift interbank
system it's almost impossible to trade
Russian currency around the world um uh
Chinese currency is a different matter
and they're obviously doing everything
possible to uh you know buy oil in remb
they're doing everything possible to
trade in Africa and Remy B to sort of
get it used all around the world in the
same way the United States was doing in
the 1930s and 1940s and and paid off
very well for us so I think winning that
currency
war is going to be tremendously valuable
for the United States and and as you
were just saying the United States
benefits in Untold ways from the fact
that when we print dollars everyone in
the world has to deal with that like
because dollars are a global Reserve
currency we're printing dollars that
aren't just used here but they're used
everywhere um I think that's to the
United States's benefit so that's the
other thing when we talk about the
unprecedented nature of debts GDP
ratios um the other unprecedented bit is
the degree to which not not only is the
de to GDP ratio unprecedented but so is
the ubiquity of the US
dollar in which that debt is denominated
around the world and the fact that our
debt is denominated in dollars and not
something
else is both I think I think from your
perspective it's scary because because
our debt is denominated in the currency
that we control we can just print more
of it to pay back to debt which
terrifies you I can see by the look on
your face right now from my perspective
it's okay I would much rather have debt
denominated in dollars than something
the United States government cannot
control agreed it's the only reason it's
not crippling
um okay
so one thing that um I would like to
know is do you think bricks is a real
threat or is it um it's so small we
don't have to worry about it um oh gosh
I wish I knew more about this from my
loose understanding of this I think
it's
uh a threat to be taken seriously I mean
again like the the ubiquity of the US
dollar is tremendously valuable for me
and you and
American citizens and frankly for kind
of global stability and so I think it's
worth preserving that system and I think
how big of a threat is
bricks I'm not an expert enough to I
don't know like quantify
the I wish I could give you a 6% chance
of disaster 25% chance of disaster I
don't know what the percentage chance of
disaster is but I know that there is a
potential disaster do you think I'm
crazy to say it's 100% chance I just
don't know over what time period it
could be another 50 years but the US
dollar will lose Reserve currency status
so tells me history oh that's an
interesting argument I
mean h I've never thought about it that
way let me try and think about that for
a
second uh I mean you have to be right
right because no currency has ever
maintained Global dominance forever I
mean no Empire lasts forever Rome fell
the British Empire collapsed nothing
lasts forever um we are what 80 years
into
this project of kind of a post-war
American Empire um with the US dollar
being and and then the sort of
difference of what I would argue as the
American post war Empire is that it's a
it's an Empire of dollars it's not an
Empire of soldiers um we don't have you
know kind of soldiers Outpost everywhere
around the world um we are not the
United States has not for 80 years been
on a path to Conquest to take new
territory um when was the last time the
United States government took new
territory it's been a little while it's
yeah I don't know the answer to that is
the only real question yeah the fact
that we don't yeah the fact that we
don't know TI talking that one real fast
here not Tik Tok but in 1947 the Mariana
Islands Carolina Islands Caroline
islands and Marshall Islands came the
most recent US Territorial acquisition
as of August 2021 we certainly haven't
taken any since then so there you have
it 1947 yeah it does not seem like the
United States is on a massive path of
territorial Conquest around the world
but the US dollar has been um
and that I would argue has been
tremendously important for global
stability um in in in in a way and
that's a defense of the BR andwood
system that's saying that you know at
the end of the war a bunch of people got
together in a hotel in New Hampshire in
BR the town of Breton Woods to Fashion
an economic system that would prevent a
third world war and knock on this table
right now so far so good
I think you know you can hear the
trepidation in both your voice and my
voice because as we said here in June of
2024 it feels like we're uncomfortably
close to something that could tip
into into a war of global proportions
which we haven't seen in 80 years and I
think I don't feel comfortable putting
words in your mouth but I think I can
safely say that both of us feel like
that would that is a situation to be
avoided yeah there's a great quote uh
anybody that lives by the crystal balls
destined to eat glass uh so 100% I'm
going to be wrong that I know but I
think it is extremely worthwhile for
people to build their internal logic and
say okay based on the things that I
believe here's what I think will happen
and if you believe it enough then you'll
act accordingly I mean this comes back
to the John mayard kan's thing where he
painted a picture of the next 20 years
of German's existence and he was right
um because he actually understood the
mechan naations um and I think that's
really important I posted a clip today
from an interview I did with Ray doio
arguably one of the greatest economic
Minds certainly made more money off of
his economic beliefs than anybody uh
living that's got to be close certainly
in terms of head fund owners there might
be personal investors that have done
better but um and he was saying Tom the
I was putting forth a thesis that we
need a leader that can unite us and he
said nope you're making a mistake
because that's how dictators come to
power now his whole thing was you're
skipping past the mechanism of action
now I actually think in the final
analysis he's going to end up being
wrong and unfortunately I did not push
him and say well Ray what's the
mechanism of action in your world um and
because what he'll tell you I'm so
familiar with this because I've asked
him this question a dozen times is it
all comes down to how people are with
each other and so yes if people have
high trust if they're getting along well
uh if they're not you know torn apart by
division then things go well and for him
the mechanism of action of the
everything falls apart is
um people have division they start
pulling away from each other and there
is no way to bring them back together
okay so I believe that we are all in the
grips of ideas and if you can put forth
an idea of unity that you actually can
get people to come back together uh so
now whether um I have a path that will
trigger the right mechanisms of action
is a very valid point um but I don't
think it sort of violates any sort of
laws of humanity that we can do that but
where where I think we are the mechanism
of action that I'm trying to lay out is
that money printing creates a mechanism
of action that when you're the one that
controls it you end up racking up debt
now an interesting fact that I want
everybody to burn into their soul is
that at the time of Breton woods and the
reason I think we're a different country
now in that conference in brettonwoods
back when it happened the first time
right before the end of World War II uh
we were the largest creditor in the
world we are now the largest deor in the
world and there's no way that anybody
can look at brettonwoods and go oh the
largest deor in the world would be the
one that would be able to get their
currency put as like the Global Currency
and so you I look at the movements of
the Brick Nations and how many more
people are trying to sign on to that
including Saudi Arabia and I say huh the
G7 now make up 25. like 5% of Global GDP
that's a quarter man they make up a
quarter America alone at the time of
brettonwoods was 50% just America and so
dude people people can they you I'm not
asking you to forecast in the future I'm
just saying Look Backwards at the end of
World War II America is the largest
creditor and by its creditor and by
itself makes up 50% of global GDP Flash
Forward the G7 make up 25% of global GDP
and America is the largest debtor and PS
they're cutting off countries like
Russia and saying uh we're just going to
remove you from the global monetary
system which then Russia goes a word
like we're going to go talk to China
China's desperate to get out from under
your thumb they want to be at least a
regional hedgemon uh we live in now a
multi-polar world again and China is a
pure competitor to the US so says John
mimer shout out to John who we want to
get on the show uh and it's the the
whole deck is just totally different and
so when I watch the US government say
I'm never going to be able to convince
the American people to go to war with
Russia on behalf of Ukraine not even by
proxy and so I'm just going to print
money I'm like look all of Kane's ideas
he was brilliant but I don't think he
appreciated the human proclivity to
abuse that power into Oblivion bringing
us back to
rallio rallio said there's only so many
personality types that's why history
Rhymes and the reality is every time
somebody gets the privilege of being the
reserve currency they just end up taking
on debt Deb Deb Deb Deb Deb debt they
can't help themselves they print to
service the debt and then
eventually you hit a point where it just
doesn't work anymore and you
hyperinflate your own currency because
there is a Breaking Point and you
finally find that breaking point which
not like you can point to and say oh
this ratio of debt to GDP I get it it's
very complicated but every currency ever
in human history ends up hitting that
limit it hyper inflates they lose their
status and in that moment you have to
have a debt Jubilee and that normally
comes at the cost of war and so I'm just
saying when I look out at the world and
I'm like hey the US is funding the
Ukraine's fight with
Russia that can go badly like first of
all they're a nuclear power what are we
doing you you're not even getting the
American people to vote on it and when
you put it in an economic historical
context covered in an amazing book
called The Wealth of Shadows uh wow that
shot I was so thank you for that dude
the crazy thing is I in some ways I
think your book is affected me more than
it's affected
youting well I'm also I I think I'm uh
I'm probably arguing against you more
than agreeing with you for
conversational purposes honestly because
I feel like I learn more from arguments
than I do from agreements agreed um and
it's more
we both grow from that experience um but
yeah I look I don't I think that's a
valid point I think the way that
we've the way the US government has
frankly in the last 80 years gotten into
the habit
of kind of soft declaring Wars without
Congressional resolutions is this is not
the first time that's been a problem um
you know I ironically the it was Iraq
right which we were talking about
earlier was a time when Congress did
vote and they gave the president
authority to launch an invasion and and
look how that worked out so there are
difficulties both ways um I think
that again I don't think that
the I don't know that anyone would make
the argument that the the major
inflationary pressures on the American
economy right now are the aid to
Ukraine um I'm not saying those are
helping I agree with you entirely that
they're not they're hurting
but
the co era money money printing is kind
of obviously the prime source of the
inflationary pressures the American
economy is feeling now I don't I don't
know how you'd make an argument contrary
to that agreed um so but that which is
all to say that that's not to say that a
to Ukraine is is helping again it's it's
not that's obviously inflationary
um because because theworks are not
building things in the United States
that we use and I think it's um it's
interesting example that you're making
about what you were just saying R Al was
making about um what how other
currencies have stopped being Global
Reserve currencies I mean Sterling
really lost that privilege in the second
world war um it wasn't a massive s in
debt yes what do you mean well they yes
they did get you're right you're right
they did get themselves in a tremendous
amount of debt during the war to the
United States um and they also got
bombed it feels like the getting bombed
part was pretty bad I mean huge
Advantage they had to rebuild America
obviously Pearl Harbor but basically we
walked out of that completely unscathed
so America's geography to the rescue one
more time no doubt about that um so um
yes but I certainly see the argument
that it was the it's an interesting way
of thinking about it that the problem
and it sounds like the argument that
you're saying Del is making and it's a
smart one is that Sterling's problem as
a global Reserve currency was the debt
per se and not the fact that they nearly
lost a massive war and nearly became you
know a territory of Germany I think we
sort of forget whenever I go back into
the early history of the war and I did
this when I was reading this book and I
did this when I was um writing the
imitation game the film I wrote about 10
years ago the which also gets the one
you won the Academy Award for I did win
an Academy Award for yeah um you know
whenever you read through an exercise I
recommend to anyone and actually here
this is slightly tangential but if you
want to feel better about life in 2024
go on the on the New York Times website
they have the I think they call times
machine you can look back at the sort of
physical paper any day in the history of
New York Times publication um and
something I've done with this book and
with when I was doing imitation game was
just go back and read the front page of
the New York Times every day from
January 1st 1939 to January 1st
1940 if you read the front page of the
New York Times every day for that year
or even to skim through it um you will
find your hand starting to shake you
will find like a deep anxiety welling up
in your chest uh I find myself near
tears frankly half the time going
through it because the sheer level of
Apocalypse that it looked like the world
was facing in that time was something
was something that I haven't known in my
lifetime I'm 42 years old and I have not
in those 42 years experienced that level
of civilizational Apocalypse on the
precipice and I and certainly I don't
find myself feeling that way in in June
of
2024 uh you know knock on wood I don't
start feeling that way in July of 2024
but I
think you know the feeling of whenever
we look back on the second world war
it's very easy to look back on it I we
all find ourselves looking back on it I
think with these kind of rose-colored
glasses where it's like oh yeah and the
good guys won of course the good guys
were going to win and if you look at
what it must have been like to be alive
in the United States much less Britain
in 1939 or
1940 Not only was it unclear that the
good guys were going to win it was
pretty clear that the opposite was going
to happen it did not at all feel like
the Americans and the British were going
to survive this and um you know you look
at the prop the frankly the propaganda
the British government was putting out
at the time when their War started
because they're after the invasion of
Poland Britain declares war um and their
war was going so disastrously badly I
think there a line actually in the book
where I make fun fun of it um or one of
the character I have one of the
characters making fun of it cuz they put
they literally had to put out some press
release that was um I'm probably going
to mangle the text slightly but the
British government kind of propaganda
press release was like and in the high
seas our boats have sunk a number of
German
ships and in the book I have a bit where
the guys are reading that going a number
that's the best they can muster like
they don't want to tell you how many
they sunk because the answer is like two
and it it's so embarrassingly small that
they don't even want to tell they can't
even report on how badly the war effort
is going on because everyone will freak
out even more than they already are um
so I think that sense
of
um the sense of in both Britain and the
United States that
um you know at the end of 39 Britain
actually there's a scene of this in the
imitation game we don't TR to talk about
it but there's a bit where
um uh
700,000 British school children were put
on trains and sent out of London to the
countryside to largely stay with
relatives because they felt that London
at the end of 1939 was an unsafe place
for children I mean this is London this
isn't like some small town somewhere
this is all the children in London got
put onto a bunch of trains and sent to
the
countryside as many as could possibly
stay with relatives um uh we didn't
explain an imitation this a bit in the
early in the movie where you see alen
Turing it was a real thing he was on the
train he happened to be on the train the
day that all the children were on so
he's on a train filled with children
it's a couple shots in the movie but um
uh that we never really explain but
that's what it was is that he's on a
train filled with school children
because he's going somewhere the same
day that they're all being sent out of
the city I mean imagine if imagine what
it would feel like societally if all of
the children were sent out of Los
Angeles one day um I mean I have two
children I think you don't but the we
both know plenty of people with children
there's children around I mean
culturally what that would feel like to
say okay bye kids we're probably going
to get bombed
soon you'll be back soon fingers crossed
we hope that we're not all dead in six
months but kind of it looks like we're
all going to be dead in six months um I
would argue that that sensation also did
not contribute to
people's Assurance in the stability of
pound sterling to bring it back to an
economic question yeah no doubt I mean
war is is just Savage and when it's on
your land even more brutal all right I
want to ask you a question this is
something that um I talked about the
beginning of the book but given that I
think your book picks a time in history
uh but I don't think it anything is
fundamentally different about the way
the government operated then to now I
agree with that in your book there are
spies in the US government do you
believe there are spies in the US
government today uh hard easy yes of
course there are spies in US Government
today how many people work for the US
government a lot a lot I mean how how
many millions I I'm I I don't even want
to Hazard a guess because I'm sure I'll
be off but if if none of them turned out
to be spies that would be statistically
improbable I think of course there
are Chinese spies in the US government
of course there are Russian spies in the
US government um of course there are
French spies in the US government I mean
even our
allies it's no secret that we spend a
lot of time it is no secret that the
United States spends a lot of time
spying on even our own allies so I think
that's um you know we can have a
separate conversation about whether we
think that all the money we spend on
intelligent services are kind of
producing the effects that we're hoping
for um you know talk you know if you
want to talk about inflation and if we
accept this cany an idea that inflation
happens when the kind of the we're not
getting value for the money we're
creating money that without
corresponding kind of goods and services
being produced um there's there's good
questions about how much value the CIA
is really adding to I don't know
American Security and American Life
their track record has not been uh
certainly not been Flawless but I think
um yeah is it well here's another
question why would it be why why do you
ask about American about foreign spies
in the US government like doesn't seem
sort of obvious that would be the case
and normal
uh yes I think it is not I think the
very reason I'm asking is because your
book showed me a vision of the
government that did not match the very
naive Vision that I had of the
government where uh spies are low-level
people working in janitorial services
that are paid to grab a couple documents
um seeing a real life example of an
extremely highlevel person that has a
Major Impact in in World War II for
ideological reasons this is the part
that freaked me out it was not just
about money he was compensated but this
is yeah who just believed in the cause
of the other country because here's what
I see when I look at our government
first of all America I love you you
cannot imagine how much you really can't
imagine how much you've you've given me
everything I could write love song after
love song I love this country I love it
the most that is a Beau statement to
share on this show right now that's I
love that man mean it and I'm utterly
heartbroken that for people the American
flag has somehow become a negative thing
but I grew up in the 80s baby and so
that American flag swells me with pride
now that doesn't mean that we don't do
terrible [ __ ] such seems to be the
reality of governments um but with all
of my love what I see when I look out at
the government is I see ideological
divisions this is where my whole thesis
around we're all in the grips of ideas
when those ideas cause us to pull in
opposite directions now we have a
problem and I just see people in the
grips of ideas that are pulling them in
opposite directions may my small
contribution to the world be that I
bring on incredibly thoughtful people I
map the way they think uh I find and
debate the most important ideas of our
time and then hopefully all together we
can begin adopting better ideas that
have gone through the fire of
criticism uh and that we can all be in
the grips of ideas that move us to a
positive place which is something you
and I haven't talked about but I've
talked about to my audience many times
you have to have a North star and um I
think it is very fair to say my norstar
is panish but I think you have to have
one and so mine is just human
flourishing so what leads to human
flourishing and with that I am I'm
trying to look out at the world and be
honest about where we are hyper divided
honest about why we're hyperd divided uh
ideology that's pulling in opposite
directions and then fig figure out how
we bring that all back together but when
I read your book and realized people are
are in the grips of these ideas and they
they really are active right now today
in our government in high level
positions pulling in directions that I
would be horrified by and then when I
look out at the mainstream media and I
just see gaslighting on top of
gaslighting I'm like oh my God like all
these people that have been complaining
for years that literally inside I was
just like why do people think about
politics like put your head down build
something that matters has always been
my response um but that only work works
when you're standing on Solid Ground and
I can feel the ground turning into a bit
of sand I don't think we're quick sand
yet but it's Sandy and so for the first
time in my life I just feel like huh we
need to be addressing these ideas headon
because I can now in fact this this will
bring me into one of the reasons I want
to have you on is you speak to two sides
of my life you were pitched To Us by
your publicist I was like it's not
possible that this gu into the two
things that I'm hyper into the economic
side of the book that you wrote and then
you're a successful screenwriter I am a
currently failed screenwriter uh but
nonetheless love Hollywood love where
all this is going now irony of ironies I
am an ideologically driven screenwriter
I only want to tell stories that have a
message that I think will make people's
lives better but I look at Hollywood
today and I'm like hey kids you have to
hide the slide of hand so when I see
something like Disney's Star Wars I'm
like I get it women are rad they're
powerful we want to celebrate that we
want to make young women feel like they
can do anything but when you have a Jedi
that's just a dope Jedi from day one and
never has to learn anything I see the
slide of hand I see what you're trying
to do and now I can't see the story I
can only see the slide of hand and
clumsy slide of hand is why I would say
the last however many Disney movies have
just tanked I'm very curious to get your
take on the current state of Hollywood
oh man uh this might be a harder
question than economic theory in the
second world war current state of
Hollywood so yes I live this funny life
right where I spent half of my time
writing books and the other half making
movies and I've written four novels and
two films and um working on it now and
the uh so in a way I sort of
have half of my professional life is in
Hollywood so I have the kind of view of
someone who's half there which in some
ways is nice because I'm not I have a
little bit of distance from it like I'm
not sort of in Hollywood every day um I
I live in Silver Lake on the east side
of Los Angeles I'm kind of literally
never in Hollywood except today where I
get to come see you the the state of
Hollywood I think uh I I honestly
haven't seen a Star Wars movie in so
long I can't comment on any I just don't
know I'm not your stick or they turned
you off no it was never it was a thing
when I was a kid like it feels like
um I I remain surprised in some ways
that they're enduring popular in some
ways I would argue the strange thing is
that we're still talking about Star Wars
movies like that's the thing I'm sort of
surprised at I think a lot of the
things like I remember being super into
it as in middle school and high school
um again in the 80s and 90s and I'm from
that generation that when the Star Wars
movies were coming out I was too young
to have seen them in theater so I
watched the Star Wars movies on a VHS
tape in my Dad's apartment my parents
split when I was seven and my dad um we
mostly live with with my mom but then my
brother and I would some we'd go visit
our dad and he had this little apartment
and he'd sort of put us in the apartment
then he'd go out and uh so my little
brother and I would just sit there with
like a VHS player and a TV that I'm sure
if you watch anything on it now the
resolution quality would be so
shockingly low um in some ways I wonder
if I've ever seen the Star Wars movies
now I'm like man I watch those things on
VHS tapes on like a 14in x 14in square
television in impossibly low resolution
who knows what I actually watched all
those years ago um I think and I loved
them then it just didn't sort of stay
aart of My Life um after that um oh
that's not true I watched the there was
an Andor show that was great I watched
some of that um and that was really
really good but I'm not sort of up on
the currency of Star Wars things um have
you seen the controversy over the
acolyte I am vaguely aware that this
exists but no I don't know anything
about this there's a controversy there
is
uh and so I haven't seen the acolyte but
I've certainly seen the controversy and
since it fits so well into the same
controversy they've been having forever
it is from what I can tell Disney has
become an
ideologically driven company which hey
like I said impact theory is an
ideologically driven company but when
you do that you have to be so careful
because what the audience wants is just
a good story so to them the moral of the
story yeah it should be there as if for
no other reason than I think what makes
films work for the human mind is that
they are an exploration of a theme and
then in the end they will come to a
conclusion and in a typical threea
structure um sort of star
warsan uh Power of myth Joseph Campbell
way they will come to a nice tidy
conclusion that gives you a life lesson
that you can carry out the hero's
journey um but you shouldn't know what
the final conclusion is going to be
until the end and even then it should
feel right and it should feel subtle and
it shouldn't feel like something that
was thrown in your face and what from my
perspective Disney in particular but
this is rampant in Hollywood is they
have an agenda they're going to wear it
on their sleeve they're going to cram it
down your throat they're not even going
to explore it they're just going to
State it so it becomes a sermon so I'm
giving you a sermon about exactly how
you should live and while again I
respect it um once people can see the
slide of hand you get into trouble and
it stops being a movie and it starts
being a preacher sermon H um that's
interesting and I look I I can't comment
on that specifically I just haven't seen
it and don't know much about it or this
controversy I will say though that in
general I guess I would make the
argument that all art is ideological
whether whether you know it or not um so
you were talking about impact Theory
being kind of ideologically driven you
have these you have these messages you
have these themes that you want to bring
out to people I think that my work is
too I think that
hopefully
um again I'm going to mangle the source
of this quote but there was I think it
was originally a quote about journalism
and someone can look up who said it but
the idea was that journalism should aim
to either um comfort The Afflicted or
afflict the comfortable and I've always
loved this and I think that's right that
kind of good art should be doing one of
those two things and I don't know that
I've achieved this by any stpes of the
imagination but I have certainly I feel
like the bit where I get more excited is
the afflict the comfortable part um that
you I find myself wanting
to I find myself getting excited about
art that changes how I think about
something that doesn't tell me what I
already know um you know like it would
be awfully silly to have written a book
about World War II where the thesis was
Nazis are
bad no [ __ ] that's not particularly
interesting that's not particularly
compelling fiction um and frankly when
we were doing imitation game we got into
a lot of these things where um that was
movie where
again we do we do we need a scene where
we say Nazis are
bad
no no [ __ ] everybody knows um do we need
a scene where we say like homophobia is
bad no it's assumed the movie just
assumes that um and that seemed and in
in fact like
something in all the things we've tried
to do is kind of have something in it
that should hopefully
challenge the preconceptions and the
ideology of anyone going into it like to
sort of destabilize IDE ideology a bit
it's I think why it's funny actually
someone was talking to me a friend said
this to me years ago about uh work that
I was doing and it's always stuck with
me because I found it
terribly
um perceptive um she said you know
nothing you WR ever has any villains in
it like you never have any real
villains and I have slowly come to R
over the years that she was absolutely
right um like because villains are so
cuz I get bored with them quickly okay
they're the bad guy like I don't care
I'm much more interested in characters
who are morally complicated like we were
talking about this is a book with a guy
who's a spy who's doing some pretty
awful things but he's doing them for the
right reasons and his reasons are
actually really good and we're still on
board with his reasons and we're in fact
on board with 80% of the dastardly
things he does in the book it's that
last 20% with which I think both you and
I go oh oh gosh man that was I was with
you up till now but now you've taken it
a bridge too far and as we talk about
kind of narratives and sort of
Storytelling that's compelling or
interesting I find that sort of work
really exciting where you know
you're challenging
you don't want to create a set of
characters and maybe this is Disney
thing I don't know but a set of
characters where you're sort of going
like these are the good guys these are
the bad guys because I think whenever
you start doing that if the morality is
that obvious then it's not that
interesting um or at least it's not that
you're not asking that much from your
readers from your audience you know I
think there are no like there are no
kind of Nazi characters in this book
because it's not um they would just be
bad guys that's not interesting it's
much more yeah compelling to me to see
people who
are like Nazi adjacent sympathizers or
Americans unwittingly helping the Nazi
cause or something like that or there's
a lot of people in the book who are um
they're not even Nazi sympathizers
they're just unwilling to involve
themselves they're just want to go about
their day and not get involved and not
have anything to do with it and they
want
to stand in a trolley car and look at
their shoes as a bunch of Nazis are kind
of marching past the trolley car that's
the terrifying yes they want to just
look away and the morality of that is
really interesting to me I think more so
than kind of clearcut lines in Good and
Evil you know actually what made me
think of that the other day I was we
were asking about Disney storytelling um
uh I have a three and a half-year-old
and I watched ratatouille with him for
the first time the other day I had not
seen Ratatouille in so long um these are
my like extremely belated plugs for hit
movies of a decade prior r chewy it's
great oh my gosh how do we ever forget
how great it is um another movie without
villains like even the guys who are set
up as villain actually turn out to have
really interesting thoughtful points and
be right about a bunch of stuff and kind
of turn and change in interesting ways
and you're sort of just as compelled by
them as you are by the heroes um I think
that was an example of I can't remember
if Disney owned Pixar at the time of
ratou but uh of that kind of kind of
four quadrant all family story line
that's still is I would argue
morally complicated in in interesting
ways so I don't know it's funny like I I
go because I'm only half in Hollywood
you're asking about the state of it
um some days I find myself on calls
where everyone's tearing their hair out
like are people going to go see movies
anymore maybe this was the end was this
the end of movies is it all going to
fall apart
um but then it seems fine and I feel
like again this is sort of looking at
history every 15 or 20 years some has
had we've culturally had that freak out
about movies specifically um in the face
of first television and
now what YouTube or frankly the kind of
media the kind of media channel this is
right where you're you're making
podcasts you're making you have a
YouTube channel you're sort of doing all
of these you know we're in a media
environment where you look at like
streaming we always forget this but you
look at streaming video consumption in
the United States and I've seen this dat
just a little bit but
like I culturally sometimes we talk
about Netflix as being the kind of
streaming video leader in the United
States but it's not remotely it's a
fifth of what YouTube gets in terms of
views YouTube is unquestionably the sort
of streaming leader in the United States
um which
is is that bad for Hollywood is that
good for Hollywood I don't know it's
different I think I'm
excited as a consumer of a lot of I read
a lot of books I watch a lot of movies I
love books love
movies I don't feel a current shortage
of things I really like like I find
myself able to find things and being
driven towards things that I really love
that I might not otherwise have found
that I can watch really really easily um
and that is very exciting to me and I
hope other people are having the same
experience is AI going to be good or bad
for the film industry um I am super
bearish on AI I think it's been widely
overhyped this is among here this is
good my one of my least popular opinions
I feel like my wife and I play this game
sometimes where she's like she's like
what is your dumbest craziest opinion
and and maybe my bearishness on AI is
that one I honestly think and this comes
from my sort of having spent some time
because I wrote about alen Turing
because I've spent some time sort of
looking at the history of AI I think the
history of AI
for
100 30 years now since Charles babage on
has been Rife with wild overprediction
about what AI is on the cusp of being
able to do from the
1880s to aluring in the 1950s to um a
lot of great research researchers in the
1980s we have been on the cusp of a
massive AI Revolution so many times
before and I am
unconvinced that this is the moment when
an actual Revolution is occurring so
much as like a bunch of really minor
user interface improvements have been
created and kind of rebranded as
something called
AI now so I am uh I am equally bearish
in the sense of right now today right
now today it cannot do the things that
people think it will be able to do or
want it to do but every time I see
somebody tweet something like what
you're saying right now I think but if
you just extrapolate like okay so we're
now roughly I think 18 months since chat
GPT launched mhm 18 months so in 18
months we've gone from W this is crazy
to oh look at the photos it can do to oh
my God it can do video now but it the
video is terrible and it's so weird and
surreal and they can't even get the
hands right uh it's uh Will Smith eating
spaghetti and it's you know just like
absolutely hilarious to whoa whoa whoa
wait a second I can't now in a single
shot sometimes I can't tell if this is
real or not they they're not you know
running around because as soon as they
start moving it gives it away but these
really subtle shots they're working
okay wait a second if you've just seen
literally this week a new model dropped
uh for Runway ml it is insane you've got
Sora which I don't still don't think is
available to the public but the stuff
they've shown like the puppies playing
in the snow good Lord it hits the snow
and then pulls back and it's got snow on
its muzzle and the way it's interacting
with its fur is real and I'm just like
okay cool where's if if that's how far
we've come in 18 months how far do we go
in another 18 months but forget 18
months where are we in 10 years
like it I think people are really going
to be shocked at where we are in 3 years
but even if you think I'm out of my mind
where are we going to be in 10 years and
10 years ain't that long may I offer a
reframing the point you're making uh if
your point is that in the 18 months
since chat GPT has been released um
the number and volume of useless things
that it has been able to do has
increased if that is your argument I
agree with you wholeheartedly they are
finding ever newer and more broke
useless things that this technology can
do every day and I am fascinated both by
the technological Brilliance the
unquestionable technological Brilliance
going into these
things and what seems to
me like maybe so let's go back to John
mayard canes and talk about value and
usefulness and I'm still waiting for
someone to give me a real use C that
maybe that would be the point I'm still
waiting for a real use case because
every time someone talks about a use
case it's always oh yeah yeah the thing
we do now well obviously it's useless
it's the thing we'll be able to do in 18
months that's super useful and I would
argue that that that was that argument
was being made
um at Stanford and Yale and the sbone in
1982 and 1983 that argument was being
made made um frankly Alan Turing was
making that argument in 1951 in 1951
Alan Turing went on a lecture tour of
the UK where he was arguing that super
intelligent AGI was months away uh he
was wrong that did not happen in the
mid-50s um why did he think it was going
to happen it's because the people who um
and Allan Turing again maybe smarter
than John maner kanes among the kind of
great intellectuals of the 20th century
um why was he wrong
about AGI he didn't call it AI I forget
what his term was but that's basically
what he was talking about um it's
because the people who work on this tend
to sort of get in the weeds of it and
they get excited by these sort of
technolog
these like nudging improvements but
again what is it maybe if you're writing
code I've seen some people I've talked
to some people who write code for a
living who talk about it being actually
useful for them in kind of real ways but
look certainly on on the boring Old Pros
fiction side or on the filmm
side uh the people I I ask filmaker
friends all the time I ask editor
friends all the time I was talking to an
editor last week you know do does any of
this do anything can you do anything
with this you couldn't do before and
it's oh well no of course not I mean all
this I could do two years ago I could do
this all 10 years ago none of this no
but look it's kind of cool look I can
push a button and it like adds a dog to
the shot um and you know it's like
before if I had to do that I spend a
little bit more work because I'd have to
use a mat or something you'd have to
kind of do it photochemically or
whatever like it doesn't um I'm sure I'm
sure I want to get a bunch of angry
letters after this from AI people who
are like no no no our thing is really
useful but let me ask you have you seen
someone with a real use case of any of
this technology yeah so uh this is
probably so some of the way that your
friends are bamboozling you they're not
lying to you because of the way you
frame the question but this is probably
six years ago I went to a post house and
I forget the name of the actress but she
was in a show called Nashville and she
was pregnant while they were filming and
the guy goes watch this and he pulls her
up and Tucks her chin in reduces her
belly in front of me and I was like what
on Earth how did you do that obviously
the technology that's running underneath
that is AI it's not AI in the way that
we think about it now but it's AI so a
AI has been in all of these tools
whether it's Adobe Photoshop Premiere
whatever they've all been adding little
pieces of algorithms here in there which
is AI uh it's already doing so much the
modern CGI Universe brought to you by
Under the Hood um AI everything Pixar is
doing brought to you by under the hood
AI I mean they're running all these
crazy algorithms to do like the motion
in the fur and all that stuff so it's
the world has been slowly being being
gobbled up by AI in ways that people
don't understand and so it's this how do
you boil a frog slowly it it's just it
we hit a critical threshold with chat
GPT where suddenly people were like oh
my God you've now triggered my
imagination I can see where this is
going to be now people's imagination is
ahead of them that is very true and when
we have tried to deploy it to create 3D
assets it's terrible at 3D assets but it
can do it badly and so what I'm saying
is it's sales fish of technology I want
Sam Alman to stand up in front of all
his investors and be like think of the
number of things that we can do badly
yes but what if the difference between
doing it badly and doing it well is
electricity and training data then then
it is so I read an amazing book called
The Wealth of Shadows and basically the
opening line is uh this guy looked at
the the German spreadsheet and
understood it was a mathematical
certainty that they would invade Poland
and then it was a mathematical certainty
that ultimately they would collapse
because even if they conquered the
entire world the second they did their
economy would collapse and what I'm
saying is it is unless we run out of
electricity it is a mathematical
certainty that virtually everything that
you watch visually will be generated by
AI now it may still require the human
soul the human Spirit to tell it what to
create I I don't know if it will ever
make novel leaps where we watch
something and go oh my God you made me
think of something I've never thought of
before it may not be able to do that it
may only regurgitate patterns but
visuals are simply regurgitated patterns
now maybe actors will forever have dots
in their face and they they can just do
a thing that AI will never be able to do
cool but the thing that you see on
screen 100% is going to be entirely from
top to bottom AI generated that that is
a from where I'm sitting that is a
mathematical certainty of just you have
to give it enough time now is that time
3 years 30 years 300 years that I don't
know but it's probably closer to three
than we
think uh that's fascinating and I I
would push back on that and
say here my single word response to that
is Oppenheimer my single word response
from the last 24 months of film history
is
that
uh wow audiences can in some intangible
way appreciate photochemical
cinematography in a way that we didn't
think they could um Oppenheimer famously
shot on IMX cameras um there it's not
there isn't cgus used in it of course
there's plenty there's plenty of cgus in
everything um and that's I think both
agrees with the point you're making and
furthers it which is that that we find
that a lot of these visual effects tools
things that used to be sort of visual
effects shots are now just oh yeah just
things you're kind of doing in a post
house like you were talking about
removing um kind of changing the shape
of an actress's belly or um and I think
the point that you just made
that
um in a way that might give away the
game is when you said that you had that
conversation at the Post House six years
ago and they weren't talking about it as
AI like AI is this branding thing that
as far as I can tell is entirely this
like Alman
driven came up with a great branding for
a bunch of technology that was largely
already there and some minor
improvements on that technology you know
when we were
doing when we made imitation game like a
small English period math drama
we we this this was 10 years ago 12
years ago we were in post on that and we
even then we had the ability to there
was something I remember there was a
scene that we cut up it was shot as one
scene and we realized we wanted to put
something another scene in the middle of
it so we sort of cut a scene in half but
it would be weird to have them actors
wearing the same clothes in sort of two
scenes two scene apart so we needed to
change we changed the color of the dress
that the actress Kiran and NY was
wearing in the scen so the same footage
but we just put a new dress on her and
this was 11 years ago 12 years ago and I
thought this was going to be a oh gosh
we have to call a somebody call ilm
somebody call like a
big effects house to do this and instead
it was the assistant editor just said oh
do you want me to just go in my office
and here just hang for an hour and I'll
just come back and do it and he went in
his office on his computer and came back
and address that a new color I don't
even know how he did it some of the
software that was even around again 10
12 years ago so I
think this isn't new technology some of
it has gotten a little bit
easier to use and the idea that
audiences are suddenly going to be
really receptive
to entirely computer General ated
imagery and I think what we
find maybe we don't find this but I
certainly find is that I can tell when
I'm watching a movie where the sort of
Base image is photochemically generated
versus something that's Al
algorithmically generated um you can
tell in like a kind of shotly made
superhero movie where suddenly they kind
of go into the shot where they all look
a little bit robotic and like none of it
looks quite real and it all looks sort
of video gamey to co to maybe give away
the game by describing it that way but
um or you can tell when a film and
Oppenheimer is a great example here is
photographed
photochemically
with with cameras and
uh you know real Celluloid that is
photochemically responding to the light
in front of it why is it that that feels
different audience and then you can
manipulate little bits right you change
the shape of shape of belly you change
the color of a dress you can like change
it in Little Bits but that fundamentally
the image is photochemically generated
fun fundamentally the image has been
photographed um can all can all
audiences detect that all the time no
but I would argue that enough people
kind of feel that on some level even
still with the even as good as sort of
computer generated imagery is that it
doesn't it's not like we're at a point
where we're saying is anyone going to
watch kind of liveaction films that are
is anyone going to watch live action
films that are mostly computer generated
soon I'm saying that um no one's even
aware of no one even likes watching
liveaction films any of any frames of
which have been entirely computer
generated now um like we sort of
instinctively recoil at those things
because we know the uncanny valley of
that is still
is still strong um and I think we find
this with um so I would argue frankly
this is something interesting about the
funny place in media history we're in
where we we thought a bunch of things we
thought a bunch of technological
improvements were going to kind of
fundamentally
change really really old and durable art
forms and we've found actually that the
changes have been on the margins and
they've expanded the realm of kind of
what those art forms look like but not
that they fundamentally kind of
kick the knees out from under them um a
great example would be books a te a
technology as old as old as time or not
as old as time right as old as the
printing press like we've had we've had
printing presses for a while we've had
printed books like the one here for a
while there is there is no interesting
new technology that went into like the
printing of a book or frankly even the
writing of it I'm trying to think of
like what technology I've used spell
check but even then I still have three
different copy editors to go through the
manuscripts kind of weeding out errors
that have escaped the notice of spell
Che or any kind of grammar editor so I
think we find and there was this bit
kind of 15 years ago when everyone
thought that everyone was going to
transfer on to ebooks and e-readers that
ebooks people were going to stop reading
kind of physical printed books and
transfer and start reading ebooks and
then that didn't happen they kept buying
physical books and in fact uh the
percentage of book purchases that have
been ebooks has gone down every year for
the the past however many years um
there's something about the quality of
the people like um I strange way the
conversation that we are having right
now as we sit here today is a perfect
example of this because we are two human
beings sitting in front of two
microphones kind of talking into a bunch
of Recording Technology to be listen to
people on headphones or off of a speaker
somewhere that is 110 year old
technology um we've had radio interviews
for I'm gonna say about 110 years maybe
it's closer to 100 um and what we're
finding with with frankly the the
Resurgence of we're finding with the
recent popularity of podcast I would
argue is a Resurgence in really old
technology like there's actually
something about radio that people love
um there's something and but what the
technology has allowed us to do is
consume even more radio than we used to
and to consume audio books and I
actually publishing it's a good example
um the the real shift that happened when
you look at what audiences were doing
what readers were doing is it's not that
people stopped buying print books it's
they also started listening to audio
books um because now we have the
technology to make that super super easy
um and I'll say you know I just my wife
and I had a baby last summer and our
second thank you very much and I cannot
imagine we have a three-year-old and a
one-year-old now and I cannot imagine
the experience of either child without
audio books or like having an infant cuz
when you have to stay up from you have
to stay up all night and like you get to
sleep in these sort of 45 minute little
increments and then you're kind of
giving an infinite bottle um and I would
just kind of stay up listening to audio
books while kind of giving the baby
bottles and soothing him and putting him
in a crib and getting up and down and I
can't tell you how many like great books
I got to listen to last summer with an
infant in the house that I would not
otherwise have been able to read because
of that technology so and again this
isn't new technology it's weirdly a new
like people reading books into
microphones is really really old
technology the distribution mechanism is
new the part where I get to listen to it
on my phone and it's super easy to just
click a couple things download it on
Audible start listening in 10 seconds
that's the really new bit um so it's um
I know that was a kind of long
winded and kind of varied way of looking
at a kind of media landscape but I would
argue that it's this changes in
distribution methods are kind of more
important we're finding more important
than the changing methods of how stuff
is actually created as evidenced by the
fact that you and I are recording
recording right now in the same way if
this was 80 years ago this wouldn't
really look any different yeah we you
have a tablet in front of you yeah we
have video cameras on us but uh Johnny
Carson did the same thing right like
that's not new technology
I agree I want to I agree with you that
it's not new technology in that
fundamental sense but I'm going to paint
a picture for you of what I think the
future looks like and then tell me what
you think about that okay is this a
scary picture or a happy picture um it's
it is terrifying and that it passes
through a valley of Despair so traumatic
my God that I think it will be a
fundamental paradigm shift and I don't
think humans are good at Paradigm shifts
um so I'm in for this journey all right
here's here's what I think happens so
the reason that the argument that you
just made is 100% correct and yet not
predictive of the future is that the
difference is that the new technology
that's happening now is intelligence
itself and so if you can imagine what it
would have what life would have looked
like 5,000 years ago and if I could pull
5,000 years forward so that somebody
5,000 years ago could instantaneously
experience 24 it would be disorienting
beyond belief so they don't have
electricity they don't have uh TVs they
don't have things that look like
telepathy like imagine this I could say
to them in all honesty um I'm going to
go over in that room and uh you're going
to stay here with Graham and Graham is
going to ask you to give him a number
you're going to give him a number and
then he's going to send it to me without
moving his mouth without making a sound
and I'm going to know what that number
is you can give him a whole sentence you
can give him a whole paragraph and I'm
going to know it instantaneously and
he'd be like yep nope not true or it's
Witchcraft and of course you're either
just going to record it on your phone
and text it to me or you're just going
to write it out and text it to me it it
is actual telepathy but because it
happens so slowly we don't really think
about it okay so that would be shocking
but it took a long time scale to really
make something shocking what I'm saying
is intelligence if we get to what
they're calling super intelligence so uh
there's a meme going around what did
Ilia see so ilas sver was working at
open AI something happens and he goes
radio silent won't talk to anybody for
months and then the first thing back is
I'm starting my new company his new
company is if I'm not mistaken SSI uh
safe super intelligence so there's this
whole hypothesis that he's seen that AI
is way farther along than people think
it is and that now he is just freaked
out by what's going to happen if people
don't Focus entirely around coming up
with a way to um make AI safe by making
sure it wants the same things that we
want it's called alignment anyway so if
superintelligence comes into existence
now imagine that um in an hour it can
have 100 Years of human advancement
because it's thinking a million times
faster smarter than we are and then what
happens to give you an idea um I ran the
math in this one time Einstein is
something like 2.4 times smarter than a
literal [ __ ] somebody who scores well I
think it's 81 or 82 somewhere around in
there is the legal definition of a [ __ ]
so he was 2.4 I believe that's close uh
times smarter so what happens when you
have something that's a million times
smarter a billion times smarter it it
will be able to bring about a world that
Not only would be indistinguishable you
could just say um create a movie for me
that looks like it was shot on Celluloid
that you wouldn't be able to tell the
difference it will be photorealistic and
because I now again I don't know
timeline so I don't know if this happens
in 5 years 50 500 but again it just
comes back to as long as we can generate
the amount of compute which requires the
electricity I don't see why we wouldn't
be able to get to that point I'll never
say that it will be able to make genuine
leaps of cognition because I don't know
if that requires some that humans have I
don't know I assume it will but I don't
know but even if it can only recognize
patterns it will be able to do things
like say this is how the proteins are
going to fold in your body right and so
now all of a sudden it can predict the
obscenely complicated interactions of
the human body that becomes down pat now
you can live forever whatever
so once people once you give an
intelligence that is self-improving all
bets are off and so that is is a world
that is just so fundamentally different
that it is as they say it's the
technological singularity you can't
anticipate what it would be like if you
could you'd build it uh so utterly
fascinating but now to narrow our Focus
back to Hollywood and something that I
think is more near- term so I think
about this a lot I'm spending a lot of
money to build a studio and so I'm
staring at AI coming down the pipe and
I'm like okay what's going to be
when um right now it it can write a
screenplay for you but that screenplay
is not inspired by any stretch of the
imagination but it can help you
brainstorm and it's actually pretty
interesting for that uh it can help you
identify patterns so hey of the last uh
10 Academy award-winning screenplays
what were the structural beats what was
happening on page seven what was
happening on page 27 whatever and it
will break it all down for you utterly
fascinating what were their genres how
many speaking Parts etc etc so you can
get a level of data Insight that you
wouldn't be able to get but the real
thing that I think is going to happen is
society's going to bifurcate and there
are going to be people who are like uh I
want a movie starring Pikachu set in the
Star Wars Universe um but based on the
visual stylings of these photos from my
childhood and then it will do it and
it'll be like oh well it's crazy Pikachu
lives in my bedroom and this is nuts and
it's telling a story about whatever you
can feed it what you want it to be about
so you'll get people that are like I
want that hyper specialized stuff and I
get it's a little off um but I mean if
you've ever watched bad soap operas you
know there are just some things where
people accept it's not great but I love
it so you're going to get people that
are I want the hyper personalization
that AI can bring and I don't care that
it's The Uncanny Valley then you have
other people that will literally March
in the streets and I don't know if
there'll be violence but they're going
to take it very seriously that I do not
engage with anything that is AI driven I
don't watch movies that are AI driven I
don't let my kids watch things that are
AI driven I want the soul of humanity I
want stories that are written by real
people I want real actors I don't care
if it's not personalized I don't care if
there are less of them whatever I just I
want it to be real humans now I wore
this shirt as a part of this punchline I
wrote a comic book about this about what
I think now it's called neon future
because I think on the other side of
this Valley of Despair you actually get
to there's no Utopias but you get to the
closest thing I think technology
ultimately becomes the thing that saves
us but I think that we are fooling
ourselves if we don't think that that
bifurcation in society happens and so
the story that I wrote is about that
friction the moment where it's like
neither of them have hit escape velocity
yet but you've got the humans on one
side saying we don't like these bad uh
people that are infused with AI cuz we
focused a lot on people that embed
technology into their bodies like
neuralink style uh we don't like those
bad augmented people like that becomes
the new class to discriminate against so
we will have to go through that and
we'll have to navigate that and it will
be very interesting to see how far the
purus go and to see how fast people that
augment uh are able to augment
themselves but I do think that's the
path I I think that is a fascinating
scenario I'm curious see how it plays
out I think I would say the part of that
I certainly can latch on to
is and get behind is the idea that
there'll be hugely customizable kind of
video in art like you as you were saying
I want you know Pikachu and Batman doing
a dance for 4 hours and going on like
Lord of the Ring style Quest or whatever
and copyright be damned I can just sort
of uh make my little videos that only
I'm watching and I'm not charging for
them so I'm not violing any cop
violating any copyright and um we uh and
I can entertain myself to death with
this I think that certainly seem and I
don't care if it's like uncanny valish I
don't care if it's not that good um I
think you're right that we are kind of
singled digit years away from that being
a real reality and I'm curious to see
how people respond to that um because I
think we
find in my
experience the experien that I've found
with my readers and my viewers has been
that the things that people respond to
the most are not the things that they
said they wanted it's the things they
didn't say they wanted um and I think
that's
the what I would predict will be
unsatisfying about art Bruce that way
that it might be a little bit satisfying
and kind of diverting for a little
periods of time but it's ultimately not
as as satisfying to I don't think that
will be as satisfying to audiences as
work that they couldn't have predicted
you know my my second book The Last Days
of Night was about um it was about the
relationship between Thomas Edison
George Westing and Nicola Tesla um and
the protagonist of that book of The Last
Days of Night was um is a guy named Paul
Kath who was George Westing House's
patent lawyer um in 1893 George westing
house sued Thomas Edison for a billion
dollars over the patent to the light
bulb um in 1893 you imagine a billion
dollars was the kind of money worth
going to court over um and so Paul Kass
was this real guy and he was sort of
young untested patent Attorney in charge
of handling I think the most what I
would argue is the most valuable lawsuit
in in American history it was all about
who invented the light bulb was it
Thomas Edison was it George Westinghouse
or was it Nicola Tesla
and uh you know in the book Paul is our
sort of um narrator and lens into this
very complicated story of these three
you know great Geniuses of the late 19th
century who it's no secret loathed each
other they all hated each other so much
in part because they thought they were
each the kind of Genius behind this
amazing invention um and I think also in
part because they had completely
different values um to go back to
something you were saying earlier they
thought of invention in fundamentally
different terms um when Thomas Edison
sort of thought that he invented the
light bulb he meant something different
by the idea by invention than Nicola
Tesla meant when he thought of himself
as the guy who invented the light bulb
or something different than George
Westinghouse meant when he thought of
himself as guy who invented the light
bulb and I'm making this point to talk
about how um I'm making the point to say
this um one of the Thomas Edison quotes
when I was working on that book that I
can't remember it's in the book or not
but it always stuck with me was
um uh at some point he said uh people
don't know what they want until you show
it to them and I think that's true I
think that
people um
it's like things that are immediately
pleasing and this is sort of my point
about that kind of art it's like things
that are immediately pleasing tend to be
a little bit ephemeral um it's like
exercise or something right like you
start that first 30 seconds that you
start working out are kind of unpleasant
I don't know if you have this experience
but it's like the first 30 seconds are
kind of unpleasant and then you get
really into it and then after you work
out you feel really good and I have two
small children so I do not work out
nearly as much as I used to a few years
ago but my vague memory of a time in my
life when I used to get to exercise a
lot more was that you know that initial
thing of oh this is hard this is sweaty
and painful and my body doesn't like
this is necessary to get to the point of
oh this is fulfilling to me in a way
that I didn't quite realize that it
would be um so that's what I think about
when you sort of talk about endlessly
customizable kind of video or audio or
certainly Pros um I'm curious to see
what there's people who sort of will
turn off AI entirely I guess I'm still
sort of so bearish on the idea that AI
is even a classifiable thing that
there's some some set of things
called like we've
now everything that we describe as AI I
feel like is stuff that 10 years ago we
would have just called like spell check
or something like it's it's just like oh
a little feature in Microsoft Word that
does a fun but kind of useless thing and
I'm not sure calling it AI makes it
sound fancier and I've read Nick
bostrom's wonderful book on super
intellig
um which I just loved um even though I
think I disagree with him kind of
fundamentally about kind of the
possibility of AGI and sort of
self-improving AI and I guess I would
just
say this is not the first time these
predictions have been made and I would
be surprised if it was the first time
they came
true I love it this has been a lot of
fun man where can people follow you
where can they get the book you follow
me through books and the films I make
I'm you and I were talking about this
before we turn the my micrphone on I'm
not on social media which is perhaps a
mistake maybe I'll go back on it I was
on it before I was on it a few years ago
and I found I got to some point where I
felt like I was for a while it felt like
the ratio of information I was getting
to time I was wasting was working in my
favor and then I got to some point where
I felt the ratio had flipped um so I
went off it it's been a couple years
maybe I'll get back on um but you know
people are welcome to find me wherever
they can I love it all right everybody
if you haven't already be sure to
subscribe and until next time my friends
be legendary take care peace if you like
this conversation check out this episode
to learn more you could ask yourself
what do we celebrate my income isn't
going up as an individual I'm not making
more money but this guy's got $200
billion the US doesn't know pay like we
have no idea there's a world where we
Embrace technology