The following is a conversation with Tyler Cohen, an economist at George Mason University

and cocreator of an amazing economics blog called Marginal Revolution. Author of many books,

including The Great Stagnation, Average is Over, and his most recent Big Business,

a love letter to an American antihero. He's truly a polymath in his work,

including his love for food, which makes his amazing podcast called Conversations with Tyler

really fun to listen to. Quick mention of our sponsors, Linode, ExpressVPN,

Simply Safe, and Public Goods. Check them out in the description to support this podcast.

As a side note, given Tyler's culinary explorations, let me say that one of the things that makes me

sad about my love hate relationship with food is that while I've found a simple diet, playing

meat and veggies that makes me happy in day to day life, I sometimes wish I had the mental

ability to moderate consumption of food so that I could truly enjoy meals that go way outside of

that diet. I've seen my mom, for example, enjoy a single piece of chocolate, and yet if I were to

eat one piece of chocolate, the odds are high that I would end up eating the whole box. This is

definitely something I would like to fix because some of the amazing artistry in this world happens

in the kitchen, and some of the richest human experiences happen over a unique meal. I recently

was eating cheeseburgers with Joe Rogan and John Donahar late at night in Austin, talking about

jiu jitsu in life, and I was distinctly aware of the magic of that experience, magic made possible

by the incredibly delicious cheeseburgers. This is the Lex Friedman podcast, and here is my

conversation with Tyler Cohen. Would you say economics is more art or science or philosophy

or even magic? What is it? Economics is interesting because it's all of the above. To start with

magic, the notion that you can make some change and simply everyone's better off, that is a kind

of modern magic that has replaced old style magic. It's an art in the sense that the models are not

very exact. It's a science in the sense that occasionally propositions are falsified,

or a few basic things we know, and however trivial they may sound if you don't know them,

you're out of luck. So all of the above. But from my outsider's perspective, economics

is sometimes able to formulate very simple, almost like E equals MC squared, general models of how

our human society will function when you do a certain thing. But it seems impossible or almost

way too optimistic to think that a single formula or just a set of simple principles can describe

behavior of billions of human beings with all the complexity that we have involved.

Do you have a sense there's a hope for economics to have those kinds of physics level descriptions

and models of the world, or is it just our desperate attempts as humans to make sense of it even though

it's more desperate than rigorous and serious and actually predictable, like a physics type science?

I don't think economics will ever be very predictive. It's most useful for helping you

ask better questions. You look at something like game theory. Well, game theory never predicted

USA and USSR would have a war, would not have a war. But trying to think through the logic

of strategic conflict, if you know game theory, it's just a much more interesting discussion.

Are you surprised that we, speaking of Soviet Union and United States and speaking of game

theory, are you surprised that we haven't destroyed ourselves with nuclear weapons yet,

like that simple formulation of mutually assured destruction? That's a good example

of an explanation that perhaps allows us to ask better questions, but it seems to have actually

described the reality of why we haven't destroyed ourselves with these ultra powerful weapons.

Are you surprised? Do you think the game theory explanation is at all accurate there?

I think we will destroy each other with those weapons.

Eventually?

Eventually. Look, it's a very low probability event. So I'm not surprised it hasn't happened yet.

I'm a little surprised it came as close as it did. Your general thinking, realizing it might

have just been a flock of birds or it wasn't a first strike attack from the USA, we got very

lucky on that one. But if you just keep on running the clock on a low probability event,

it will happen. And it may not be USA and China, USA and Russia, whatever. It could be the Saudis

and Turkey. And it might not be nuclear weapons. It might be some other destruction.

Bio weapons. But it simply will happen, is my view. And I've argued at best we have seven or

eight hundred years and that's being generous. At worst, how long we got?

Well, maybe it's asking for a friend, a rival process, right? So tiny probability could come

anytime, probably not in your lifetime. But the chance presumably increases. The cheaper

weapons of mass destruction are. So the Poisson process description doesn't take in consideration

the game theoretic aspect. So another way to consider is repeated games, iterative games.

So is there something about our human nature that allows us to fight against probability,

reduce like the closer we get to trouble, the more we're able to figure out how to avoid trouble.

The same thing is for when you take exams or you go ahead and take classes, the closer you

or paper deadlines, the closer you get to a deadline, the better you start to perform and

get your shit together and actually get stuff done. I'm really not so negative on human nature.

And as an economist, I very much see the gains from cooperation. But if you just ask,

are there outliers in history, like was there a Hitler? For instance, obviously. And again,

you let the clock tick another Hitler with nuclear weapons, doesn't per se care about

his own destruction, it will happen. So your sense is fundamentally people are good.

A trembling hand equilibrium is what we would call it. Trumbling hand equilibrium.

That the basic logic is for cooperation, which is mostly what we've seen, even between enemies.

But every now and then, someone does something crazy and you don't know how to react to it.

And you can't always beat Hitler. Sometimes Hitler drags you down.

To push back is it possible that the crazier the person, the less likely they are.

And in a way where we're safe, meaning like, this is the kind of proposition I've had. I had

the discussion with my dad as a physicist about this, where he thinks that if you have a graph,

like evil people can't also be geniuses. So this is his defense why evil people will not get control

of nuclear weapons, because to be truly evil. But evil meaning, sort of, you can argue that

not even the evil of Hitler we're talking about, because Hitler had a kind of view of Germany

and all those kinds of, there's like, he probably diluted himself and the people around him to think

that he's actually doing good for the world, similar with Stalin and so on. By evil, I mean,

more like almost like terrorists to where they want to destroy themselves and the world.

Like those people will never be able to be actually skilled enough to do, to deliver that kind of

mass scale destruction. So the hope is that it's very unlikely that the kind of evil that would

lead to extinctions of humans or mass destruction is so unlikely that we're able to last way longer

than some 100, 800 years.

I agree. It's very unlikely in that sense. I accept the argument, but that's why you need to let the

clock tick. It's also the best argument for bureaucracy. To negotiate a bureaucracy, it

actually selects against pure evil, because you need to build alliances. So bureaucracy in that

regard is great. It keeps out the worst apples. But look, put it this way. Could you imagine 35

years from now, the Osama bin Laden of the future has nukes or very bad bio weapons? It seems to me

you can. And Osama was pretty evil and actually even he failed, right? But nonetheless, that's

what the 700 or 800 years is there for.

And it might be destructive technology that don't have such a high cost of production or

production or such a high learning curve, like cyber attacks or artificial intelligence,

all those kinds of things. So yeah.

I mean, let me ask you a question. Let's say you could as an active will by spending a million

dollars obliterate any city on earth and everyone in it dies and you'll get caught and you'll be

sentenced to death, but you can make it happen just by willing it. How many months does it take

before that happens?

So the obvious answer is like very soon. There's probably a good answer for that because you

can consider how many millionaires there are, how many you can look at that, right?

Right.

I have a sense that there's just people that have a million dollars. I mean, there's a certain

amount, but have a million dollars have other interests that will outweigh the interest of

destroying the entire city. Maybe that's a hope.

It's why we should be nice to the wealthy too, right?

Yeah. All that trash talking is Bill Gates. We should stop that because that doesn't inspire

the other future Bill Gates is to be nice to the world.

That's true. But your sense is the cheaper he gets to destroy the world, the more likely he becomes.

Now, when I say destroy the world, there's a trick in there. I don't think literally every

human will die, but it would set back civilization by an extraordinary degree. It's then just

hard to predict what comes next. But a catastrophe where everyone dies, that probably has to be

something more like an asteroid or supernova. And those are purely exogenous for the time being,

at least.

So I immigrated to this country. I was born in the Soviet Union in Russia.

Which one?

Again, it's an important question. You were born in the Soviet Union, right?

Yes, I was born in the Soviet Union. The rest is details, but I grew up in Moscow, Russia.

But I came to this country, and this country even back there, but it's always symbolized to me

a place of opportunity where everybody could build the most incredible things, especially

in the engineering side of things. Just invent and build and scale and have a huge impact on the

world. And that's been, to me, that's my version of the American ideal, the American dream.

Do you think the American dream is still there? What do you think of that notion in itself,

from an economics perspective, from a human perspective, is it still alive?

And how do you think about it, the American dream?

The American dream is mostly still there. If you look at which groups are the highest earners,

it is individuals from India and individuals from Iran, which is a fairly new development,

great for them, not necessarily easy. Both you could call persons of color, may have faced

discrimination, also on the grounds of religion, yet they've done it. That's amazing. It says

great things about America. Now, if you look at native born Americans, the story is trickier.

People think intergenerational mobility has declined a lot recently, but it has not

for native born Americans. For about, I think, 40 years, it's been fairly constant,

which is sort of good. But compared to much earlier times, it was much higher in the past.

I'm not sure we can replicate that because, look, go to the beginning of the 20th century,

very few Americans finish high school or even have much wealth. There's not much credentialism,

there aren't that many credentials. So there's more upward mobility across the generations than

today. And it's a good thing that we had it. I'm not sure we should blame the modern world

for not being able to reproduce that. But look, the general issue of who gets into Harvard or

Cornell, is there an injustice? Should we fix that? Is there too little opportunity for the

bottoms, say, half of Americans? Absolutely. It's a disgrace how this country has evolved in that

way. And in that sense, the American dream is clearly ailing. But it has had problems from

the beginning for blacks, for women, for many other groups. I mean, isn't that the whole

challenge of opportunity and freedom is that it's hard and the difficulty of how hard it is to move

up in society is unequal often? And that's the injustice of society. But the whole point of

that freedom is that over time, it becomes better and better. You start to fix the leaks,

the issues, and it keeps progressing in that kind of way. But ultimately, there's always the

opportunity, even if it's harder, there's the opportunity to create something truly special,

to move up, to be president, to be a leader in whatever the industry that you're passionate about.

To have it, we each have podcasts in English. The value of joining that American English

language network is much higher today than it was 30 years ago, mostly because of the internet.

So that makes immigration returns themselves skewed. So going to the US, Canada, or the UK,

I think has become much more valuable in relative terms than, say, going to France,

which is still a pretty well off, very nice country.

If you had gone to France, your chance of having a globally known podcast would be much smaller.

Yeah, this is the interesting thing about how much intellectual influence the United States has.

I don't know if it's connected to what we're discussing here, the freedom and the opportunity

of the American dream. Or does it make any sense to you that we have so much impact on the rest

of the world in terms of ideas? Is it just simply because the English is the primary language of

the world? Or is there something fundamental to the United States that drives the development

of ideas? It's almost like what's cool, what's entertaining, what's meme culture, the internet

culture, the philosophers, the intellectuals, the podcasts, the movies, music, all that stuff,

driving culture. There's something above and beyond language in the United States.

It's a sense of entertainment, really mattering how to connect with your audience, being direct

and getting to the point, how humor is integrated even with science that is pretty

strongly represented here, much more say than on the European continent.

Britain has its own version of this, which it does very well. And not surprisingly,

they're hugely influential in music, comedy, most of the other areas you mentioned. Canada,

yes, but their best talent tends to come here. But you could say it's like a broader North American

thing and give them their fair share of credit. What about science? There's a sense higher education

is really strong, research is really strong in the United States, but it just feels like

culturally speaking, when we zoom out, scientists aren't very cool here.

Most people wouldn't be able to name basically a single scientist. Maybe they would say Einstein

and Neil deGrasse Tyson, maybe. And Neil deGrasse Tyson isn't exactly a scientist,

he's a science communicator. So there's not the same kind of admiration of science and innovators

as there is of athletes or actors, actresses, musicians.

Well, you can become a celebrity scientist if you want to, may or may not be best for science.

And we have Spock from Star Trek, who is still a big deal. But look at it this way,

which country is most comfortable with any egalitarian rewards for scientists,

whether it's fame or money? And I still think it's here. Some of that's just the tax rate.

Some of it is a lot of America is set up for rich people to live really well.

And again, that's going to attract a lot of top talent. And you ask the two best vaccines. I

know the Pfizer vaccine is sorted from Germany, sorted from Turkey, but it's nonetheless being

distributed through the United States, Moderna, an ethnic Armenian immigrant through Lebanon,

first to Canada, then down here to Boston, Cambridge area. Those are incredible vaccines,

and US nailed it. Yeah. Well, that's more almost like the,

I don't know what you would call it, engineering the sort of scaling. That's what US is really good

as, not just inventing of ideas, but taking an idea and actually building the thing and

scaling it and being able to distribute it at scale. I think some people would have attributed

that to the general word of capitalism. I don't know if you would. Sure. What in your views are

the pros and cons of capitalism as it's implemented in America? I don't know if you would say

capitalism has really existed in America, but to the extent that it does. People use the word

capitalism in so many different ways. What is capitalism? The literal meaning is private

ownership of capital goods, which I favor in most areas, but no, I don't think the private sector

should own our F16s or military assets. Government owned water utilities seem to work as well as

privately owned water utilities, but with all those qualifications put to the side, business,

for the most part, innovates better than government. It is oriented toward consumer services.

The biggest businesses tend to pay the highest wages. Business is great at getting things done.

USA is fundamentally a nation of business, and that makes us a nation of opportunity,

so I am indeed mostly a fan, subject to numerous caveats. What's a con? What are some negative

downsides of capitalism in your view or some things that we should be concerned about maybe for

long term impacts of capitalism? Capitalism takes a different form in each country. I would say in

the United States, our weird blend of whatever you want to call it, has had an enduring racial

problem from the beginning, has been a force of taking away land from Native Americans and

oppressing them pretty much from the beginning. It has done very well by immigrants for the most part.

We revel in chimpaterian creative destruction more, so we don't just prop up national champions

forever, and there is a precariousness to life for some people here that is less so,

say, in Germany or the Netherlands. We have weaker communities in some regards than,

say, Northwestern Europe often would. That has pluses and minuses. I think it makes us

more creative. It's a better country in which to be a weirdo than, say, Germany or Denmark,

but there is truly, whether from the government or from your private community, there is less

social security in some fundamental sense. On the point of weirdo, that's kind of a beautiful

little statement. What is that? That seems to be, you could think of a guy like Elon Musk

and say that he's a weirdo. Is that the sense in which you're using weirdo outside of the norm,

breaking conventions? Absolutely. Here, that is either acceptable or even admired or to be a

loner. Since so many people are outsiders, and that where all immigrants are selecting for people

who left something behind, were willing to leave behind their families, were willing to undergo

a certain brutality of switch in their lives, makes us a nation of weirdos, and weirdos are

creative. Denmark is not a nation of weirdos. It's a wonderful place, great for them. Ideally,

you want part of the world to be fully weirdos and innovating, and the other part of the world

to be a little kind of chicken shit, risk averse, and enjoy the benefits of innovation, and to give

people these smooth lives in six weeks off and free ride. Everyone's like, oh, American way versus

European way, but basically they're compliments. Yeah, that's fascinating. I used to have this

conversation with my parents when I was growing up, and just others from the immigrant kind of

flow, and they used this term, especially in Russian, is to criticize something I was doing,

that would suggest normal people don't do this. I used to be really offended by that,

but as I got older, I realized that that's a kind of compliment, because in the same kind of,

I would say, way that you're saying that is the American ideal, because if you want to do

anything special or interesting, you don't want to be doing in one particular avenue what normal

people do, because that won't be interesting. The Russians, I think, fit in very well here,

because the ones who come are weirdos, and there's a very different Russian weirdo tradition,

like Alyosha, or Perlman, the mathematician. They're weirdos, and they have their own

different kind of status in Soviet Union, Russia, wherever. When Russians come to America,

they stay pretty Russian, but it seems to me, a week later, they've somehow adjusted,

and the ways in which they might want to be grumpier than Americans, not smile, think the

people who smile are idiots. They can do that. No one takes that away from them.

Yeah. Yeah. What are you on the tiny tangent? I'd love to hear a few thoughts about Grisha Perlman

turning down the Fields Medal. Is that something you admire? Does that make sense to you that somebody,

we have the structure of Nobel Prizes, of these huge awards, of the reputations,

the hierarchy of everyone saying, applauding how special you are, and here's a person who was

doing one of the greatest accomplishments in the history of mathematics. It doesn't want

the stupid prize and doesn't want recognition, doesn't want to do interviews, it doesn't want to be

famous. What do you make of that? It's great. Look, prizes are corrupting. After scientists win

Nobel Prizes, they tend to become less productive. Now, statistically, it's hard to sort out the

different effects. There's a Russian toward the mean. Does the prize make you too busy? It's a

little tricky, but there's not enough Nobel Prizes either to gather enough data. Right. But I've

known a lot of Nobel Prize winners, and it is my sense they become less productive. They repeat

more of their older messages, which may be highly socially valuable. But if someone wants to turn

their back on that and keep on working, which I assume is what he's doing, that's awesome. I mean,

we should respect that. It's like he wins a bigger prize, our extreme respect.

Yeah. Well, Grisha, if you're listening, you need to talk to you soon. Okay. I've been trying to

get ahold of them. Okay. Back to capitalism. I got to ask you, just competition in general in

this world of weirdos. Is competition good for the world? This kind of seems to be one of the

fundamental engines of capitalism. Do you see it as ultimately constructive or destructive for the

world? What really matters is how good your legal framework is. So competition within nature for food

leads to bloody conflict all the time. The animal world is quite unpleasant, to say the least.

If you have something like the rule of law and clearly defined property rights, which are

within reason, justly allocated, competition probably is going to work very well. But it's

not an unalloyed good thing at all. It can be highly destructive, military competition, which

actually is itself sometimes good, but it's not good per se. What aspects of life do you think

we should protect from competition? You said like the rule of law, is there some things we

should keep away from competition? Well, the fight for territory most of all. The violence,

anything that involves actual physical violence. Right. And it's not that I think the current

borders are just, I mean, go talk to Hungarians, Romanians, Serbians, Bosnians, they'll talk

your ear off. And some of them are probably right. But at the end of the day, we have some kind of

international order. And I would rather be more or less stick with it. If Catalonians want to

leave, they keep up with it, let them go. But what about a space of healthcare? This is where

you get into a tension of between capitalism and I don't want to use socialism, but those kinds

of policies, they're less free market. I think in this country, healthcare should be much more

competitive. So you go to hospitals, doctors, they don't treat you like a customer. They treat you

like an idiot or like a child or someone with third party payment. And it's a pretty humiliating

experience often. Yeah. Do you think free market in general is possible? Like a pure free market?

And is that a good goal to strive for? I don't think the term pure free market is well defined

because you need a legal order. The legal order has to make decisions on what is intellectual

property more important than ever. There's no benchmark that represents the pure free market

way of doing things. What will penalties be? How much do we put into law enforcement? No simple

answers, but just saying free market doesn't pin down what you're going to do on those all

important questions. So free market is an economics idea. So it's not possible for free

market to generate the rules. They're like emergent, like self governing. It generates a lot of them

right through private norms, through trade associations. International trade is mostly done

privately and by norms. So it's certainly possible. But at the end of the day, I think you need

governments to draw very clear lines to prevent it from turning into mafia run systems.

You know, I've been hanging out with other group of weirdos lately, Michael Malis,

who espouses to be an anarchist anarchism, which is like, I think intellectually, just a fascinating

set of ideas where, you know, taking free market to the full extreme of basically saying there

should be no, no government. What is it? Oversight, I guess. And then everything should be fully

like all the agreements, all the collectives you form should be

voluntary, not based on the geographic land you were born on and so on. Do you think

that's just a giant mess? Like, do you think it's possible for an anarchist society to work where

it's, you know, in a fully distributed way, people agree with each other, not just on financial

transactions, but, you know, on their personal security, on sort of military type of stuff,

on health care, on education, all those kinds of things. And where does it break down?

Well, I wouldn't press a button to say get rid of our current constitution, which I view is pretty

good and quite wise. But I think the deeper point is that all societies are in some regards

anarchistic. And we should take the anarchist seriously. So globally, there's a kind of anarchy

across borders, even within federalistic systems. They're typically complex. There's not a clear

transitivity necessarily of who has the final say over what. Just the state vis a vis its people.

There's not, per se, a final arbitrator in that regard. So you want a good anarchy rather than

a bad anarchy. You want to squish your anarchy into the right corners. And I don't think there's a

theoretical answer how to do it. But you start with a country like, is it working well enough now?

This country, you'd say mostly, you'd certainly want to make a lot of improvements. And that's

why I don't want to press that get rid of the constitution button. But to just dump on the

anarchists is to miss the point. Always try to learn from any opinion, you know, and what in it

is true? I'm just like marveling at the poetry of saying that we should squish our anarchy into

the right corners. I love it. Okay, I gotta ask, I've been talking with,

since we're doing a whirlwind introduction to all of economics, I've been talking to a few

objectivists recently. And just, you know, I ran comes up as a, as a person, as a philosopher,

throughout many conversations, a lot of people really despise her. A lot of people really love

her. It's always weird to me when somebody arouses a philosophy or a human being arouses that much

emotion in either direction. Does she make, do you understand, first of all, that level of emotion?

And what are your thoughts about Ayn Rand and her philosophy of objectivism? Is it useful at all

to think about this kind of formulation of rational self interest, if I could put it in those words,

or, I guess, more negatively, the selfishness, or she would put, I guess, the virtue of selfishness?

Ayn Rand was the big influence on me growing up. The book that really mattered for me was

capitalism, the unknown ideal, the notion that wealth creates opportunity and good lives,

and wealth is something we ought to valorize and give very high status. It's one of her key ideas.

I think it's completely correct. I think she has the most profound and articulate statement of that

idea. That said, as a philosopher, I disagree with her on most things. And I did, even like as a boy

when I was reading her, I read Plato before Ayn Rand. And in a Socratic dialogue, there's all

these different points of view being thrown around. And whomever it is you agree with,

you understand the wisdom is coming together at the different points of view. And she doesn't

have that. So altruism can be wonderful in my view. Humans are not actually that rational.

Self interest is often poorly defined. To pound the table and say existence exists.

I wouldn't say I disagree, but I'm not sure that it's a very meaningful statement.

I think the secret to Ayn Rand is that she was Russian. I'd love to have her on my podcast

if she was still alive. I'd only ask her about Russia, which she mostly never talked about

after writing We the Living. And she is much more Russian than she seems at first,

even like purging people from the objectivist circles. It's like how Russians, especially

female Russians, so often purge their friends. It's weird, all the parallels.

So you're saying, so yes, assuming she's still not around. But if she is and she comes into

your podcast, can you dig into that a little bit? Do you mean her personal demons around

the social and economic Russia of the time when she escaped?

The traumas she suffered there. What she really likes in the music and literature and why.

Music and literature.

And getting deeply into that, her view of relations between the sexes and Russia,

how it differs from America, why she still carries through the old Russian vision in her

fiction, this extreme sexual dimorphism, but with also very strong women. To me,

as a uniquely, at least Eastern European vision, mostly Russian, I would say.

And that's in her. That's her actual real philosophy, not this table bounding existence

exists. And that's not talked about enough. She's a Russian philosopher or Soviet,

whatever you want to call it.

And if she wasn't so certain, she could have been a Dostoyevsky where it's not

not that that certainty is almost the thing that brings over the adoration of millions,

but also the hatred of millions.

You became a cult figure in a somewhat Russian like manner.

Yeah. Yeah.

It is. It is what it is. But I love the idea that again, you're just dropping bombs that are poetic,

that the wisdom is in the coming together of ideas. It's kind of interesting to think that

that no one human possesses wisdom. No one idea is the wisdom, that the coming together is the

wisdom.

Like in my view, Boswell's life of Johnson, 18th century British biography. It's in essence

a coauthored work, Boswell and Johnson. It's one of the greatest philosophy books ever,

though it is commonly regarded as a biography. John Stuart Mill, who in a sense was coauthoring

with Harriet Teller, a better philosopher than is realized, though he's rated very,

very highly. Plato slash Socrates, a lot of the greatest works are in a kind of dialogue form,

Kurtis Faust, would be another example. It's very much a dialogue. And yes, it's drama,

but it's also philosophy, Shakespeare, maybe the wisest thinker of them all.

In your book, Big Business, speaking of Iron Rand, Big Business, a love letter to an American

antihero, you make the case for the benefit that large businesses bring to society. Can you explain?

If you look at, say, the pandemic, which has been a catastrophic event, right, for many reasons,

but who is it that saved us? So Amazon has done remarkably well. They upped their delivery game

more or less overnight with very few hitches. I've ordered hundreds of Amazon packages,

direct delivery food, whether it's DoorDash or Uber Eats or using Whole Foods through Amazon

shipping. Again, it's gone remarkably well. Switching over our entire higher educational system,

basically within two weeks to Zoom. Zoom did it. I mean, I've had a Zoom outage,

but their performance rate has been remarkably high. So if you just look at resources, competence,

incentives, who's been the star performers, the NBA even, just canceling the season as early as

they did, sending a message like, hey, people, this is real. And then pulling off the bubble.

It's not a single found case of COVID and having all the testing set up in advance.

Big Business has done very well lately. And throughout the broader course of American history,

in my view, has mostly been a hero. Can we engage in a therapy session? I'm often troubled by

the negativity towards big business. And I wonder if you could help figure out how

we've removed that or maybe first psychoanalyze it and then how we remove it. It feels like

once we've gotten Wi Fi on flights, on airplane flights, people start complaining about how

shady the connection is, right? They take it for granted immediately. And then start complaining

about little details. Another example that's closer to, especially as an aspiring entrepreneur is

closer to the things I'm thinking about is Jack Dorsey with Twitter. To me, Twitter has enabled

an incredible platform of communication. And yet the biggest thing that people talk about

is not how incredible this platform is. They essentially use the platform to complain about

the censorship of a few individuals, as opposed to how amazing it is. Now, you should also,

you should talk about how shady the Wi Fi is and how censorship or the removal of Donald Trump from

the platform is a bad thing. But it feels like we don't talk about the positive impacts at scale

of these technologies. Can you explain why and is there a way to fix it?

I don't know if we can fix it. I think we are beings of high neuroticism, for the most part,

as a personality trait. Not everyone, but most people. And as a compliment to that,

if someone says 10 nice things about you and one insult, you're more bothered by the insult than

you're pleased by the nice things, especially if the insult is somewhat true. So you have these

media, these vehicles, Twitter is one you mentioned, where there's all kinds of messages

going back and forth. And you're really bugged by the messages you don't like. Most people are

neurotic to begin with. It's not only taken out on big business to be clear. So Congress catches

a lot of grief and some of it they deserve, yes. Religion is not attacked the same way,

but religiosity is declining. If you poll people, the military still polls quite well,

but people are very disillusioned with many things. And the Martin Gury thesis,

that because of the internet, you just see more of things. And the more you see of something,

whether it's good, bad, or in between, the more you will find to complain about,

I suspect is the fundamental mechanism here. I mean, look at Clubhouse, right? To me,

it's a great service, may or may not be like my thing, but gives people this opportunity.

No one makes you go on it. And all these media articles like, oh, is Clubhouse going to wreck

things? Are they going to break things? New York Times is complaining. Of course,

it's their competitor as well. I'm like, give these people a chance, talk it up.

You may or may not like it. Let's praise the people who are getting something done,

very Einrandian point. As an economic thinker, as a writer, as a podcaster, what do you think about

Clubhouse? What do you think about? Okay, let me just throw my feeling about it. I used to use

Discord, which is another service where people use voice. So the only thing you do is just hear

each other. There's no face. You just see a little icon. That's the essential element of

Clubhouse. And there's an intimacy to voice only communication that's hard. That didn't make sense

to me, but it was just what it is, which feels like something that won't last for some reason.

Maybe it's the cynical view. But what's your sense about the intimacy of what's happening

right now with Clubhouse? I've greatly enjoyed what I've done, but I'm not sure it's for me

in the long run for two reasons. First, if you compare it to doing a podcast, podcasting has

greater reach than Clubhouse. So I would rather put time into my podcast, but then also my core

asset, so to speak, is I'm a very fast reader. So audio per se is not necessarily to my advantage.

I don't speak or listen faster than other people. In fact, I'm a slower listener because I like 1.0,

not 1.5x. So I should spend less time on audio and more time reading and writing.

Yeah. It's interesting because you mentioned podcasts and audiobooks. The podcasts are recorded,

and so I can skip things. I can skip commercials or I can skip parts where it's like, this part is

boring. With live conversations, especially when there's a magic to the fact when you have a lot

of people participating in that conversation, but some people are like, this topic, they're going

into this thing and you can't skip it or you can't fast forward, you can't go 1.5x or 2x,

you can't speed it up. Nevertheless, there's a tension between that. So that's the productivity

aspect with the actual magic of live communication where anything can happen where

Elon Musk can ask the CEO of Robinhood, Vlad, about, hey, somebody holding a gun to your head,

there's something shady going on, the magic of that. That's also my criticism of there's been

a recent conversation with Bill Gates that he won a platform and had a regular interview on the

platform without allowing the possibility of the magic of the chaos. So I'm not exactly sure.

It's probably not the right platform for you and for many other people who are exceptionally

productive in other places, but there's still nevertheless a magic to the chaos that could

be created with live conversation that gives me pause. Maybe what it's perfect for is the tribute.

So they had an episode recently that I didn't hear, but I heard it was wonderful.

It was anecdotes about Steve Jobs. That you can't do one to one, right? And you don't want control.

You want different people appearing and stepping up and saying their bit. And Clubhouse is

110% perfect for that, the tribute. I love that, the tribute. But there's also the possibility,

I think there was a time when somebody arranged a conversation with Steve Jobs and Bill Gates

on stage. I remember that happen a long time ago. And it was very formal. It could have

probably gone better, but it was still magical to have these people that obviously had a bunch

of tension throughout their history. It's so frictionless to have two major figures

in world history just jump on on a Clubhouse stage. Putin and Elon Musk.

Putin and Elon Musk. And that's exactly it. So there's a language barrier there. There's also

the problem that in particular, Biden would have a similar problem. It's like,

they're just not into a new technology. So it's very hard to catch the Kremlin up to,

first of all, Twitter, but to catch them up to Clubhouse, you have to have the,

Elon Musk has a sense of the internet, the humor, the memes and all that kind of stuff

that you have to have in order to use a new app and figure out the timing, the beat. What is

this thing about? So that's the challenge there. But that's exactly it. That magic of have two

big personalities just show up. And I wonder if it's just the temporary thing that we're going

through with the pandemic where people are just lonely and they're seeking for that human connection

that we usually get elsewhere through our work, but they'll stay lonely in my opinion.

You think so? I do. So it is a pandemic thing, but I think it will persist. And the idea of

wanting to be connected to more of the world, Clubhouse will still offer that. And all the mental

health issues out there, a lot of people have broken ties and they will still be lonely post

vaccines. Yeah, I, from an artificial intelligence perspective, have a sense that there is like a

deep loneliness in the world that all of us are really lonely. Like we don't even acknowledge

it. Even people in happy relationships, it feels like there's like an iceberg of loneliness in all

of us, like seeking to be understood, like deeply understood, understanding us like having somebody

with whom you can have a deep interaction enough to where you can, they can help you to

understand yourself. And they also understand you. Like I have a sense that artificial intelligence

systems can provide that as well. But humans, I think, crave that from other humans in ways that

we perhaps don't acknowledge. And I have a hope that technology will enable that more and more.

Like Clubhouse is an example that allows that. Our touring bot is going to outcompete Clubhouse.

Like why not sort of program your own session? You'll just talk into your device and say,

here's the kind of conversation I want and it will create the characters for you.

And it may not be as good as Elon and Vladimir Putin, but he'll be better than ordinary Clubhouse.

Yeah. And one of the things that's missing, it's not just conversation,

it's memory. So long term memory is what current AI systems don't have is sharing

an experience together. Forget the words. It's like sharing the highs and the lows of life together.

And the systems around us remembering that, remembering we've been through that. Like that's

the thing that creates really close relationships is going through some shit. Like go struggle.

If you've survived together, there's something really difficult that bonds you with other humans.

And this is related to immigration in the American dream.

In what way? The people who have come to this country, however weird and different they may be,

they or their ancestors at some point probably have shared this thing.

Right. U.S. is not going to split up. It may get more screwed up as a country,

but Texas and California are not going to break off. I mean, they're big enough

where they could do it, but it's just never going to happen.

We've been through too much together. That's a hopeful message.

Do you think, some people have talked to Eric Weinstein, you've talked to Eric Weinstein.

He has a sense that growth, the entirety of the American system is based on the assumption

that we're going to grow forever. The economy is going to grow forever. Do you think

economic growth will continue indefinitely or will we stagnate?

I've long been in agreement with Eric Peter Thiel, Robert Gordon, and others that growth has slowed

down. I argued that in my book, The Great Stagnation, appropriately titled, but the last two years,

I've become much more optimistic. I've seen a lot of breakthroughs in green energy and battery

technology. mRNA vaccines and medicine is a big deal already. It will repair our GDP and save

millions of lives around the world. There's an anti malaria vaccine that's now in stage three trial.

It probably works. CRISPR to defeat sickle cell anemia. Space, area after area after area,

there's suddenly this surge of breakthroughs. I would say many of them rooted in superior

computation and ultimately Moore's law and access to those computational abilities.

I'm much more optimistic than, say, the last time I spoke to Eric. He moves all the time

in his views. I don't know where he's at now. He hasn't gained. That's really interesting.

So your little drop of optimism comes from, there might be a fundamental shift in the kind

of things that computation has unlocked for us in terms of, it could be a wellspring of

innovation that enables growth for a long time to come. Eric has not quite connected to the

computation aspect yet to where it could be a wellspring of innovation.

But you're very close to it in your own work. I don't have to tell you that.

The work you're doing would not have been possible not very long ago.

But the question is, how much does that work enable continued growth for decades to come?

For all their problems, some version of driverless vehicles will be a thing. I'm not sure when,

you know, much better than I do, maybe only partially, but that too will be a big deal.

Well, one of the open questions that the Peter Thiel School area of ideas is how much can be

converted to technology? How many parts of our lives can technology integrate and then innovate?

Like, can it replace healthcare? Can it replace legal system? Can it replace government? Not

replace, but make it digital and thereby enable computation to improve it. That's the open question

because many aspects of our lives are still not really that digitized.

There was a New York Times symposium in April, which is not long ago, and they asked the so

called experts, when are we going to get vaccines? And the most optimistic answer was in four years.

And obviously, we beat that by a long mile. So I think people still haven't woken up. You

mentioned my tiny drop of optimism, but it's a big drop of optimism. Is it a waterfall yet? I mean,

is it just... Well, here's my pessimism. Whenever there are major new technologies,

they also tend to be used for violence directly or indirectly. Radio, Hitler, not that he hit people

over the head with radios, but it enabled the rise of various dictators. So the new technologies

now, whatever exactly they may be, they're going to cause a lot of trouble. And that's my pessimism,

not that I think they're all going to slow to a trickle. When was the stagnation book?

2011. 2011. Yes. It was the first of these stagnation books, in fact. It's very interesting.

But even then, I said, this is temporary. And I was predicting it would be gone in about 20 years

time. I'm not sure that's exactly the right prediction, like 2030, but I think we're actually

going to beat that. So you think the United States might still be on top of the world for the

rest of the century in terms of its economic growth, impact on the world, scientific innovation,

all those kinds of things? That's too long to predict, but I'm bullish on America in general.

Got it. Speaking of being bullish on America, the opposite of that is...

We talked about capitalism, we talked about Iran and her Russian roots.

What do you think about communism? Why doesn't it work? Is it the implementation?

Is there anything about its ideas that you find compelling, or is it just a fundamentally flawed

system? Well, communism is like capitalism. The words mean many things to different people.

You could argue my life as a tenured professor comes closer to communism than anything the human

race has seen. And I would argue it works pretty well. But look, if you mean the Soviet Union,

it devolved pretty quickly to a kind of decentralized set of incentives that were

destructive rather than value maximizing. It wasn't even central planning, much less communism. So

Paul Craig Roberts and Poignet were correct in their descriptions of the Soviet system.

Think of it as weird mixes of barter and malfunctioning incentives, and being very good at a whole

bunch of things, but in terms of progress, innovation, and consumer goods, it really being

quite a failure. And now I wouldn't call that communism, but that's what I think of the system

the Soviets had. And it required an ever increasing pile of lies that both alienated people but

created an elite that by the end of the thing, no longer believed in the system itself, or even

thought they were doing better by being crooks than by just moving to Switzerland and being

an upper middle class individual. Like you would have a higher standard of living by Gorbachev's

time, not Gorbachev, but if you're number 30 in the hierarchy, you're better off as a middle class

person in Switzerland. And that, of course, did not prove sustainable. And so what is it? A momentum

of bureaucracy or something like that? It just builds up when you lose control of the original

vision. And that naturally happens. It's just people. And you can't use normal profit and loss

in price incentives. So you get all prices, or most prices set too low, shortages everywhere,

people trade favors, you have this culture of bartered bribes, sexual favors, or family friends.

And you get more and more of that. And you over time lose more and more of the information and

the prices and quantities and practices and norms you had. And that slowly decays. And then by the

end, no one is believing in it. That would be my take. But again, you're the expert here, the

Russian scholar. Well, perhaps no more an expert than Ayn Rand. It's more personal than it is

scholarly or historic. So Stalin held power for 30 years. Vladimir Putin has held power for 21

years. Well, you could argue he took a little break. But not much. He was still holding power,

I think. And it's still possible now with the new constitution that he could hold power from

longer than Stalin 30, longer than 30 years. What do you think about the man, the state of affairs

in Russia? In general, the system they have there, is there something interesting to use

in economists as a human being about Russia? Everything is interesting. I mean, he would be

part of my take. As you know, the Russian economy starting what, 1999, 2000, has really quite a

few years of super excellent growth. And Putin is still riding on that. It more or less coincides

with his rise as the truly focal figure on the scene. Since then, pretty recently, they've had

a bunch of years of negative four to five percent growth in a row, which is terrible. The economy

is way too dependent on fossil fuels. But the structural problem is this. You need a concordance

across economic power, social power, political power. They don't have to be allocated identically,

but they have to be allocated consistently. And the Russian system under Putin from almost the

beginning has never been able to have that, that ultimately, his incentives are to steer the system

where the economic power is in a small number of hands in a non diversified way. The system won't

deliver sustainable gains and living standards anymore, ever the way it's set up now, that with

fossil fuel prices go up, they'll have some good years for sure. And that is really quite structural

what has gone wrong. And then on top of that, you can have an opinion of Putin, but you've got to

start with those structural problems. And that's why it's just not going to work. But he had all

those good years in the beginning. So the number of Russians, say who live here or in Russia,

who love Putin and it's sincere, they're not just afraid of being dragged away.

Like that's a real phenomenon.

Yeah. I'm really torn on Putin's approval rating, real approval rating. It seems to be very high.

And I'm torn in whether that has to do with the fact that there is control of the press

or if it's, which is the people I talk to who are in Russia family and so on, a genuine love of

Putin appreciation of what Putin has done and is going to do with Russia. And a lot of that would

go away if the press were freer, I think. Yes. Well, Singapore realizes this. Anyone discussed by

the press, no matter who they are, people in Singapore have done a great job. Yes. But if

you're discussed by the press, you don't look good. Take company executives are learning this, right?

It's just like a rule. So in that sense, I think the rating is artificially high, but I don't,

by any means, think it's all insincere. But that high popularity I view as bearish for Russia,

I would feel better about the country if people were more pissed off at him.

Yeah, that's right. It's nice to see free speech, even if it's full of hate.

I am also troubled on the scientific side and entrepreneurial side. It seems difficult to

be an entrepreneur in Russia. It's not even in terms of rules. It's just culturally that people

I speak to, it's not easy to build a business. No, it's not easy to even dream of building a

business in Russia. That's just not part of the culture, part of the conversation. It's almost

like the conversation is, if you want to be the next Bill Gates or Elon Musk or Steve Jobs or

whatever, you come to America. That's the sense they have. History matters. Is history just structural

problems of today? I mean, it's all the same thing. So a history of hostility to commerce, which of

course, the old USSR is gone, but a lot of the attitudes remain, a lot of the corruption remains.

You have this legacy distribution of wealth from the auctioning off of the assets,

which is not conducive to some kind of broadly egalitarian democracy. So you have these small

number of power points that try to control information and wealth, and not really so keen

to encourage the others who ultimately would pull the balance of political power away from the very

wealthy and from Putin, and they support that culture and the return of interest in Orthodox

church and all that. It's all part of the same piece, I think, because the old Orthodox church

is not that pro commerce, you'd have to say, but it's traditionalist. It's pro family. Those are

safer ideas. And then there's such a great safety valve, the most ambitious, smartest people, like

they probably will learn English. They can look like they belong in all sorts of other countries

that can show up and blend in. Super talented. They've probably had an excellent education,

especially if they're from one of the two major cities, but even if not so, even from Siberia,

and they go off, they leave, they're not a source of opposition. And that keeps the whole thing

up and running for another generation. Yeah. What do you make of the other big player, China?

They seem to have a very different messed up, but also functioning system. They seem to be much

better at encouraging entrepreneurs. They're choosing winners, but what do you make of the

entire Chinese system? Why does it work as well as it does currently? What are your concerns about

it? And what are its threats to the United States or possible? You said wisdom isn't when two ideas

come together. Is there some possible benefits of these kinds of ideas coming together?

It's amazing what China has done, but I would say to put it in perspective, if you compare them

to Japan, South Korea, Taiwan, Hong Kong, and Singapore, they've still done much worse,

not even close. And that's both living standards, or I hesitate to cite democracy as

an unalloyed good in and of itself, but there's more freedom in all those other places by a lot.

China has all these problems of history, but they've managed, as actually the Soviets did in

the middle of the 20th century, one of the two great mass migrations from the countryside to

cities, which boosts productivity enormously, and will sustain totalitarian systems, but they

move from a totalitarian system to an oligarchy, where the CCP is actually at least for a while,

hey, have been really good at governing, have made a lot of very good decisions. You have to admit

that. I don't know how long that streak will continue. With one person so much now holding

authority in a more extreme manner, the selection pressures for the next generation of high level

CCP members probably become much worse. You have this general problem of the state owned

enterprise is losing relative productivity compared to the private sector. Well, we're going to kind

of hold Jack Ma on this island, and he can only issue like weird hello statements. It kind of

smells bad to me. I don't feel that it's about to crash, but I don't see them supplanting America

as like the world's number one country. I think they will muddle through and have very serious

problems, but there's enough talent there they will muddle through. Is there ideas from China or

from anywhere in general of large scale role of government that you find might be useful?

Andrew Yang recently ran on a platform, UBI, Universal Basic Income. Is there

some interesting ideas of large scale government welfare programs at scale that you find interesting?

Well, keep in mind, the current version of the Chinese Communist Party post Mao dismantled

what was called the iron rice ball. It took apart the healthcare protections,

a lot of the welfare system, a lot of the guaranteed jobs. So the economic rise of China coincided

with the weakening of welfare. I'm not saying that's causal per se, but people think of China

as having a government that takes care of everyone's very far from the truth and buy a lot of metrics.

I don't mean control over people's lives. I don't mean speech, but buy a lot of metrics.

Economically, we have a lot more government than they do. So what one means here by like

government, private control, I don't think you can just add up the numbers and get a simple answer.

They've been fantastic at building infrastructure in cities in ways that will attract people from

the countryside. And furthermore, they more or less enforce a meritocracy in this sense.

Like if you're a kid, if you're a rich guy, you'll get unfair privilege. That's unfair,

but systems can afford that. If you are smart and from the countryside and your parents have nothing,

you will be elevated and sent to a very good school, graduate school because of the exam system.

And they do that, and they mean that very consistently. It's like the Soviets had a

version of that, like for chess and romantic piano, not for everything, but where they had it.

Like, again, they were tremendous, right? Yeah, exactly.

Chinese have it in so many areas, a genuine meritocracy in this one way that moves people

from the rural to the big city. And that's a big boost of productivity for so amount of time.

And when they get there, they're taken seriously. Jack Ma was riding a bicycle teaching English

in his late 20s. He was a poor guy. Not a society of credentialism. Or in America,

it's way too much a credentialist society. As we were talking about, even with the Nobel Prize.

But what do you think about these large government programs like UBI?

The one version of UBI that makes the most sense to me is the Mitt Romney version, UBI for kids.

Like kids are vulnerable. If their parents screw up, you shouldn't blame the kid or make the kid

suffer. I believe in something like UBI for kids, maybe just cash. But if you don't have kids,

even with AI, my sense is, at least in the world we know, you should be able to find a way to adjust.

You might have to move to North Dakota to work next to fracking, say.

But look, before the pandemic, the two most robot intensive societies, Japan and the US,

US at least for manufacturing, were at full employment. So maybe there's some far off day

where there's literally no work. John Lennon and Imagine, it's piped everywhere.

And then we might revisit the question. But for now, we had rising wages

in the Trump years and full employment. You don't see automation as a threat that

fundamentally shakes our society. It's a threat in the following sense.

The new technologies are harder to work with for many people, and that's a social problem.

But I'm not sure a universal basic income is the right answer to that very real problem.

Well, that's also, I like the UBI for kids. It's also your definition or the line, the

threshold for what is vulnerable and what is basic human nature. Going back to Russia, life is

suffering. That struggle is a part of life. And perhaps sort of changing, maybe what defines

the 21st century is having multiple careers and adjusting and learning and evolving.

And some of the technology in terms of, you know, some of the technology we see,

like the internet, allows us to make those pivots easier, allows later life education

possible, it makes it possible. I don't know. And your earlier point about loneliness being

this fundamental human problem, which I would agree with strongly, UBI, if it's at a high level,

will make that worse. I mean, say UBI were higher enough, you could just sit at home.

People are not going to be happy. They don't actually want that. And we've relearned that

in the pandemic. Yeah, the flip side, the hope with UBI is you have a little bit more freedom

to find the thing that alleviates your loneliness. That's the idea. So it's kind of an open question.

If I give you a million dollars, or a billion dollars, will you pursue the thing you love?

Will you be more motivated to find the thing you love, to do the thing you love? Or will you be

lazy and lose yourself in the sort of daily activities that don't actually bring you joy,

but, you know, pacify you in some kind of way where you just let the day slip by?

That's an open question. A lot of the great creators did not have huge cushions,

whether it was Mozart or James Brown or the great painters in history. They had to work

pretty hard. And if you look at heirs to great fortunes, maybe I'm forgetting someone, but

it's hard to think of any who have creatively been important as novelists or they might have

continued to run the family business. But Van Gogh was not heirs, not heir to a great family fortune.

It's sad that cushions get in the way of progress. It's the same point about prizes,

right? Yeah, inheriting too much money is like winning a prize.

We mentioned Eric Weinstein. I know you agree on a bunch of things. Is there some beautiful,

fascinating insights for disagreement that you have? Does he have to be resolved with him?

Is there some ideas that you guys battle it out on? Is it the stagnation question that you've

mentioned? That's one of them, but here's at least two others. But I would stress Eric is

always evolving. So I'm just talking about a time slice, Eric, right? I don't know where he's at

right now. Like I heard him on Clubhouse three nights ago, but that was three nights ago.

But I think he's far too pessimistic about the impact of immigration on US science.

He thinks it has displaced US scientists, which I think that is partly true. I just think we've

gotten better talent. I'm like, bring it on, double down, and look at Kurt Eco, who basically came

up with mRNA vaccines. She was from Hungary and was ridiculed and mocked. She couldn't get her

papers published. She stuck at it. An American might not have been so stubborn because we have

these cushions. So Eric is all worried, like mathematicians coming in, they're discouraging

native US citizens from doing math. I'm like, bring in the best people. If we all end up

in other avocations, absolutely fine by me. Does it trouble you that we kick them out

after they get a degree often? I would give anyone with a plausible graduate degree a green card,

universally. Yeah. I agree with that. It makes no sense. It makes so strange that the best people

that come here suffer here, create awesome stuff here. Then when we kick them out, it doesn't make

any sense. Here's another view I have. I call it open borders for Belarus. Now, Russia is a big

country. I would gladly increase the Russian quota by 3x, 4x, 5x. Not 20%, but a big boost.

But Belarus, a small country, they're poor and they have decent education

and a lot of talent there. Why can't we just open the door and convert a Belarus passport

to a green card? Open borders for Belarus. It's my new campaign slogan.

Are you running for president in 2024? Well, writings are welcome.

What's the second thing you disagree with, Eric?

Trade. Again, I'm not sure where he's at now, but he is suspicious of trade in a way that I am not.

I do understand what's called the China shock has been a big problem for the US

middle class. I fully accept that. I think most of that is behind us.

National security issues aside, I think free trade is very much a good thing.

Eric, I'm not sure he'll say it's not a good thing, but he won't say it is a good thing.

Eric, free trade. But look, on things like vaccines, I don't believe in free trade.

Why? You want vaccine production in your own country.

Look at the EU. They have enough money. No one will send them vaccines.

What's different about vaccines? There's some things you want to prioritize the

citizenry on. You could argue it would be cheaper to produce all US manufactured vaccines in India.

They have the technologies, obviously lower wages, but look, there's talk in India right

now of cutting off the export of vaccines. If you outsource your vaccine production, you're not

sure the other country will respect the norm of free trade. You need to keep some vaccine

production in your country. It's an exception to free trade, not to the logic a bunch of things

the Navy uses. You can't buy those components from China. That's insane. But look, it would

be cheaper to do so, right? Yeah. Let me completely shift topics on something that's fascinating.

It's all the same topic, but great. Everything is interesting.

What do you think about what the hell is money? The recent excitement around cryptocurrency

that brings to the forefront, the philosophical discussion of the nature of money. Are you

bullish on cryptocurrency? Are you excited about it? What does it make you think about

how the nature of money is changing? No one knows what money is. Probably no one ever knew.

Go back to medieval times, bills of exchange. Were they money? Maybe it's just a semantic

debate. Gold, silver, what about copper coins? What about metals that were considered legal tender

but not always circulating? What about credit? Being confused about money is the natural state

of affairs for human beings. If there's more of that, I'd say that's probably a good thing.

Crypto, per se, I think Bitcoin has taken over a lot of the space held by gold.

That, to me, seems sustainable. I'm not short Bitcoin. I don't have some

view that the price has to be different than the current price, but I know it changes every moment.

I am deeply uncertain about the less of crypto, which seems connected to ultimate visions of

using it for transactions in ways where I'm not sure whether it be prediction markets or DeFi.

I'm not sure the retail demand really is there once it is regulated like everything else is.

I would say I'm 4060 optimistic on those forms of crypto. That is, I think it's somewhat more

likely they fail than succeed, but I take them very seriously. We're talking about it becoming

one of the main currencies in the world. That's what we're discussing. That I don't think will

happen. The reality is that Bitcoin used to be in the single digits of a dollar and now has

crossed $50,000 for a single Bitcoin. Do you think it's possible it reaches something like a million

dollars? I don't think we have a good theory of the value of Bitcoin. If people decide it's worth

a million dollars, it's worth a million dollars. Isn't that money? Like you said, isn't the ultimate

state of money confusion, however beautifully you put it? It's like valuing an Andy Warhol painting.

When Warhol started off, probably those things had no value, the early sketches of shoes.

Now a good Warhol could be worth over $50 million. That's an incredible rate of price appreciation.

Bitcoin is seeing a similar trajectory. I don't pretend to know where it will stop,

but it's about trying to figure out what did people think of Andy Warhol. He could be out of

fashion in a century, maybe yes, maybe no, but you don't think about Warhols as money.

They perform some money like functions. You can even use them as collateral

for deals between gangs, but they're not basically money nor is Bitcoin. The transactions velocity

of Bitcoin I would think is likely to fall, if anything. You don't think there will be some

kind of phase shift, will it become adopted, become mainstream for one of the main mechanisms

of transactions? Bitcoin, no. Ether has some chance at that. I would bet against it,

but I wouldn't give you a definitive no. Bitcoin is too costly. It may be fine to hold it like

gold, but gold is also costly. You have smart people trying to make, say, Ether much more

effective as a currency than Bitcoin, and there's certainly a decent chance they will succeed.

Yeah, there's a lot of innovation. It was smart contracts with NFTs as well. There's a lot of

interesting innovations that are plugging into the human psyche somehow, just like money does.

Money seems to be this viral thing, our ideas of money. If the idea is strong enough,

it seems to be able to take hold. There's network effects that just take over.

I particularly see that with, I'd love to get your comment on Dogecoin, which is basically by

a single human being Elon Musk has been created. It's like these celebrities can have a huge ripple

effect on the impact of money. Is it possible that in the 21st century, people like Elon Musk

and celebrities, Donald Trump, the Rock, whoever else, can actually define the currencies that

we use? Can Dogecoin be kind of the primary currency of the world?

I think of it as like baseball cards. Right now, every baseball player has a baseball card.

The players who are stars, their cards can end up worth a fair amount of money.

That's stable. We've had it for many decades. The player defines the card. They sign a contract

with Tops or whatever company. Could you imagine celebrities, baseball players, LeBron James,

having their own currencies instead of cards? Absolutely. You're somewhat seeing that right

now, as you mentioned, artists with these unique works on the blockchain. But I'm not sure those

are macroeconomically important. If it's just a new class of collectibles that people have fun with,

again, I say bring it on. But whether there are use cases beyond that that challenge fiat

monies, which actually work very well. Yesterday, I sent money to a family in Ethiopia that I

helped support. In less than 24 hours, they got that money.

Digitally, yes. No, not digitally, through my bank. My primitive dinosaur bank, BB&T,

Mid Atlantic Bank, had quartered in North Carolina, charted by the Fed, regulated by the FDAC and

the OCC. Now, you could say, well, the exchange rate was not so great. I don't see crypto as

close to beating that once you take into account all of the last mile problems.

Fiat currency works really well. People are not sitting around bitching about it. And when you

talk to crypto people, the number who have to postulate some out of the blue hyperinflation,

where there's no evidence for that whatsoever, that's Denise assigned, they're not thinking clearly

about how hard they have to work to outcompete fiat currency.

There's a bunch of different technologies that are really exciting that don't want to address

how difficult it is to outcompete the current accepted alternative. So for example, autonomous

vehicles, a lot of people are really excited, but it's not trivial to outcompete Uber on the cost

and the effectiveness and the user experience and all those kinds of, sorry, Uber driven by humans.

And it's not, that's taken for granted, I think, that look, wouldn't it be amazing how amazing

would the world look when the cars are driving themselves fully? It's going to drive the cost

down, you can remove the cost of drivers, all those kinds of things. But when you actually get

down to it and have to build a business around it, it's actually very difficult to do. And I guess

you're saying your sense is similar competition is facing cryptocurrency. You have to actually

present a killer app reason to switch from fiat currency to Ethereum or whatever.

And the Biden people are going to regulate crypto and they're going to do it soon. So something like

DeFi, I fully get why that is cheaper or for some can be cheaper than other ways of conducting

financial intermediation. But some of that is regulatory arbitrage. It will not be allowed

to go on forever for better or worse. I would rather see it given greater tolerance. But the

point is banking lobby is strong. The government will only let it run so far. There'll be capital

requirements, reporting requirements imposed, and it will lose a lot of those advantages.

What do you make of Wall Street bets? Another thing that recently happened that shook the world

and at least me from the outside of perspective, make me question what I do and don't understand

about economics, which is a large number of individuals getting together on the internet

and having a large scale impact on the markets. If you tell a group of people and coordinate

them through the internet, we're going to play a fun game that might cost you money,

but you're going to make the headlines and there's a chance you'll screw over some billionaires

and hedge funds. Enough people will play that game. That game might continue, but I don't

think it's of macroeconomic importance. The price of those stocks in the medium term

will end up wherever it ought to be. These are little outliers from a macroeconomics

perspective. These are not signals of shifting power, like from centralized power to distributed

power. These aren't some fundamental changes in the way our economy works.

I think of it as a new brand of eSports, maybe more fun than the old brand,

which is fine. It's like push the anarchy into the corners where you want it. It doesn't

bother me, but I think people are seeing it as more fun amount than it is. It's a new eSport,

more fun for many, but more expensive than the old eSports. Like chess is a new eSport,

super cheap. Not as fun as sending hedge funds to their doom, but what would you expect?

The poacher that I love it. Okay. But macroeconomically, it's not fundamental.

Okay. I was going to say, I hope you're right because I'm uncomfortable with the chaos of the

masses that's creates. I think that chaos is somewhat real to be clear, but it will matter

through other channels, not through manipulating GameStop or AMC. So you're seeing the real

macro phenomenon. When people see a real macro phenomenon, they tend to make every micro story

fit the narrative. And this micro story, like it fits the narrative, but it doesn't mean its

importance fits the narrative. That's how I would kind of dissect the mistake I think people are

making. Then the macro phenomenon, there are there, do you mean... Everyone's weird now.

The internet either allows us to be weirder or makes us weirder. I'm not sure what's

the right way to put it. Maybe a mix of both. You're probably right that it allows us to be

weirder because this connects our previous conversation. Does America allow us to be

weirder or does it make us weirder? Like say we're weird and somewhat neurotic to begin with.

But the only messages we get are Dwight D. Eisenhower and I Love Lucy and Network TV.

Like that's going to keep us within certain bounds in good and bad ways. That's obviously

totally gone. And the internet, you can connect to not just QAnon, but all sorts of things. Many

of them just fantastic, right? But in good and bad ways, it makes us weirder. So that maybe is

troubling, right? Like if someone's worried about that, I would at least say they should

give it deep serious thought. And then it has a whole lot of ebbs and flows, micro realizations

of the weirdness that don't actually matter. So like chess players today, they play a lot

more weird openings than they did 20 years ago. Like it reflects the same thing. Because you

can research any weird opening on the internet. But like, does that matter? Probably not. So a

lot of the things we see are just like the weird chess openings. And to figure out which are like

the weird chess openings and which are fundamental to the new and growing weirdness. Like that's

what a hedge fund investor type should be trying to do. I just think no one knows yet. It's like

this itself, this fun weird guessing game, which we're partly engaging in right now.

Exactly. And I mean, as Eric talks about on the science side of things, I mean, I said like at

MIT, especially in the machine learning field, there's a natural institutional resistance to

the weird. It's very, as they talk about, it's difficult to hire weird faculty, for example.

Correct. You want to hire, you want to hire and give tenure to people that are safe, not weird.

And that's one of the concerns is like, it seems like the weird people are the ones that push the

science forward usually. Right. And so like, how do you, how do you balance it to, it's not obvious.

Because another area where Eric and I disagree, as I interpret him, he thinks academia is totally

bankrupt. And I think it's only partially bankrupt. How do we fix it? Because I'm with

you. I'm bullish on academia. You need up and coming schools that end up better than where

they started off. And MIT was once one of them. Now they're not in every area. In some areas,

they have become the problem. You Chicago, you wouldn't call it up and coming,

but it's still different. And that's great. Let's hope they manage to keep it that way.

The biggest problem to me is the rank absurd conformism at kind of second tier schools,

maybe in the top 40, but not in the top dozen, that are just trying to be like a junior MIT,

but it's mediocre and copycat. And they're the most dogmatic enforcers of weirdness that like

Harvard is more open than those second tier schools. And those second tier schools are

pretty good, typically, right? Yeah. But the mediocrity is enforced there.

Correct. Very strictly. And the homogenization pressure is trying to climb their rankings by

another three places and be a little closer to MIT though you'll never touch them. That to me is

very harmful. And you'd rather they be more like Chicago, more like Caltech, or the older Caltech

all the more like pick some model, be weird in it. You might fail. That's socially better.

Yeah. But so the problem with MIT, for example, is the mediocrity is really enforced on the

junior faculty. Yeah. So the people that are allowed to be weird, or actually they just don't

even ask for permissions anymore, are more senior faculty. And that's good, of course,

but you want the weird young people. I find to this podcast, I like talking to tech people

and I find the young faculty to be really boring. They are. They're the most boring of faculty.

Their work is interesting technically, technically, but just the passion. They are dredges.

And some of them sneak by. Like you have like the young version of Max Tegmark who

knows how to play the role of boring and fitting in. And then on the side, he does the weird shit.

But they're not, they're far and few in between, which I'd love to figure out a way to shake up

the system because. If you look at MIT's Broad Institute, right, in biomedical, it's been a

huge hit. Yeah. I'm not privy to their internal doings, but I suspect they support weird more

than the formal departments do at the junior level. Yes, that's probably true. Yeah, I don't know

what whatever they're doing is working, but it needs to figure it out because I think the best

ideas still do come from the, so forget my apologies, but for the humanity side of things,

I don't know anything, Bob, but the engineering and the science side, I think there's so many

amazing ideas that are still coming from universities. It's not true that you don't

know anything about the humanities. You're doing the humanities right now. We're talking about

people. There are no numbers put on a blackboard, right? There's no hypothesis testing per se. No,

yeah. You have however many subscribers to your podcast, all listening to you on the humanities,

every whatever your frequency is. But I'm not in the department of the humanities. That's why

it's innovative. They have very different conversations. There's the number of emails I get

about, listen, I really deeply respect diversity and the full scope of what diversity means and

also the more narrow scope of different races and genders and so on. It's a really important

topic, but there's a disproportionate number of emails I'm getting about meetings and discussions

and that just kind of overwhelming. I don't get enough emails from people like a meeting about

why are all your ideas bad? For example, let me call out MIT. Why don't we do more? Why don't we

kick Stanford's ass or Google's ass more importantly in deep learning and machine learning and AI

research? What CCL for example used to be a laboratory is a laboratory for artificial

intelligence research. Why is that not the beacon of greatness in artificial intelligence?

Let's have those meetings as well. Diversity talk has oddly become this new mechanism for

enforcing conformity. Yes, exactly. Right. So it's almost like this conformity mechanism finds

the hot new topic to use to enforce further conformity. Exactly. Boy, I still hope I'm

made optimistic. The humanities have innovated through podcasts, including yours and mine.

And they're alive and well. All the bad talk you hear about the humanities in universities,

there's been this huge end run of innovation on the internet and it's amazing.

You're right. I never thought, I mean, this is humanities. This podcast.

It's like I've been speaking prose all one's life and didn't know it, right?

Yeah. I am actually part of the humanities department at MIT now. I did not realize this

and I will fully embrace it from this moment on. Look, you have this thing, the media lab.

I'm sure you know about it. Done some excellent things, done a lot of very bogus things,

but you're out competing them. You're blowing them out of the water. Yeah. Like you are them.

Yeah. I mean, I'm talking to those folks and they're trying to figure it out. I mean,

they had their issues with Jeff Epstein and so on, but outside of that, there's a, I actually

gone through a shift with this particular podcast, for example, where at first it was seen as one,

very first it was seen as a distraction. Second, it was a source of like almost like a kind of

jealousy, like the same kind of jealousy you feel when junior faculty outshines the senior faculty.

Of course. And now it's more like, oh, okay, this is a thing. We should do more of that.

We should embrace this guy. We should embrace this thing. So there's a sense that podcasting

and whatever this is, and it's just not the podcasting, will drive some innovation within

MIT, within different universities. There's a sense that things are changing. It's just that

university is lagged behind. And my hope is that they catch up quickly. They innovate in

some way that goes along with the innovations of the internet. I think the internet will

outrace them for a long time, maybe forever. Well, I mean, but it's okay if they're, as long as they

keep them. Yeah. And we're both in universities. So we have multiple hats on here, as we're speaking.

So we can complain about the university, but that's like complaining about the podcasting, right?

Yeah. We be them. But speaking on the weird, you've, in the best sense of the word weird,

you've written about and made the case that we should take UFO sightings more seriously.

So that's one of the things that I've been inundated with, sort of the excitement and the

passion that people have for the possibility of extraterrestrial life, of life out there in

the universe. I've always felt this excitement of just looking up at the stars and wondering what

the hell's out there. But there's people that have more like, more grounded excitement and

passion of actually interacting with the, with aliens on this here, our planet. What's the case

they, from your perspective for taking these sightings more seriously?

The data from the Navy to me seem quite serious. I don't pretend that I have the technical

abilities to judge it as data, but there are numerous senators at the very highest of levels,

former heads of CIA. Brennan, I talked to him, did an interview with him.

I asked him, what's up with these? What do you think it is? He basically said that was the

single most likely explanation was of alien origin. Now you don't have to agree with him.

But look, if you know how government works, these senators or Hillary Clinton, for that matter,

or Brennan, they sat down, they were briefed by their smartest people and they said, hey,

what's going on here? And everyone around the table, I believe is telling them, we don't know.

And that is sociological data. I take very seriously, I have not seen a debunking of the

technical data, which is eyewitness reports and images and radar. Again, at a technical level,

I feel quite uncertain on that turf, but evaluating the testimony of witnesses, it seems to me it's

now at a threshold where one ought to take it seriously. One of the problems with UFO sightings

is that because of people with good equipment, don't take it seriously. It's such a taboo topic

that you have just like really shitty equipment collecting data. And so you have the blurry,

bigfoot kind of situation where you have just bad video and all those kinds of things.

As opposed to, I mean, there's a bunch of people, Avi Lo from Harvard talking about Amua Mua,

it's just like people with the equipment to do the data collection don't want to help out.

And that creates a kind of divide where the scientists ignore that this is happening and

there's the masses of people who are curious about it. And then there's the government that's

full of secrets that's leaking some confusion. And it creates distrust in the government,

it creates distrust in science. And it prevents the scientists from being able to explore some

cool topics, some exciting possibilities that they should be, be curious kids like Avi talks about.

Even if it has nothing to do with aliens, whatever the answer is, it has to be something

fascinating. We already know everything's interesting, but this is fascinating.

But look, that all said, I suspect they're not of alien origin. And let's let me tell you my

reason. The people who are all gung ho, they do a kind of reasoning in reverse or argument from

elimination. They figure out a bunch of things that can't be like, is it a Russian advanced vehicle?

No, probably pretty good arguments there. Is it a Chinese advanced vehicle? No.

Is it people like from the Earth's future coming back in time? No. And they go through a few others,

they have some really good no arguments, and they're like, well, what we've got left is aliens.

This argument from elimination, I don't actually find that persuasive. You can talk yourself into

a lot of mistaken ideas that way. Yeah. The positive evidence that it's aliens

is still quite weak. The positive evidence that it's a puzzle is quite huge.

And whatever the solutions to the puzzle is, it might be fascinating.

And it's going to be so weird or fascinating, or maybe even trivial, but that's weird in its own

way, that we can't set up by elimination all the things that might be able to be.

Yeah. And just like you said, the debunking that I've seen of these kinds of things are

less explorations and solutions to the puzzle and more a kind of half hearted dismissal.

And Avi, as you mentioned to him on your podcast with him, he's been attacked an awful lot.

And when I hear the idea carrier attacked, I get very suspicious of the critics.

Yeah. If he's wrong, just tell me why. Yeah.

Like my ears are open. I don't have a set view on Oumuamua. I know I can't judge Avi's

arguments. He can't convince me in that sense. I'm too stupid to understand how good his argument

may or may not be. And like you said, ultimately, in the argument, in the meeting of that debate

is where we find the wisdom, like dismissing it. That's one of the things that troubles me.

There's a bunch of people like Nietzsche sometimes dismissed this way.

Ayn Rand is sometimes dismissed this way. Oh, here we go. Like there's as opposed to arguing

against her ideas, dismissing it outright. And that's not productive at all. She may be wrong

in a lot of things, but like laying out some arguments, even if they're basic human arguments,

that's where we arrive at the wisdom. I love that.

Is there something deeper to be said about our trust in institutions and governments and so on

that has to do with UFOs? That there's a kind of suspicion that the US government and governments

in general are hiding stuff from us when you talk about UFOs?

This is my view on that. If we declassified everything, I think we would find a lot more

evidence all pointing toward the same puzzle. There aren't some alien men being held underground.

There's not some secret file that lays out whatever is happening. I think the real lesson

about government is government cannot bring itself to any new belief on this matter of any

kind. And it's a kind of funny inertia. Government is deeply puzzled. They're more puzzled than

they want to admit to us, which like, I'm okay with that actually. They shouldn't just be out

panicking people in the streets. But at the end of the day, it's a bit like approving the AstraZeneca

vaccine, which does work and they haven't approved it. When are they going to do it? When is our

government actually, if only internally, going to take this more than just seriously, but take

it truly seriously? And I just don't know if we have that capability kind of mentally to sound

like Eric Weinstein for another moment. To stay on the same topic, although on the surface shifting

completely, because it is all the same topic, you have written and studied art. What do you think we

humans long to create art? Human society in general and just the human mind?

Well, most of us don't really long to create art, right? I would start with that point.

You think so? You think that's a unique weirdness of some particular humans?

I think, I don't know, 10% of humans, roughly, which is a lot. But it is somewhat weird. I don't

aspire to create art. You could say, writing nonfiction, there's something art like about it,

but it's a different urge, I would say. So why do some people have it? I think human brains are

very different. It's a different notion of working through a problem, like you and I

enjoy working through analytic problems. For me, economics for UAI and other areas or your

humanity's podcast, but that's fun. For that problem to be visual and linked to physical

materials and putting those on a canvas, to me, it's not a huge leap. But I really don't want to

do it. If you paid me 500 bucks to spend an hour painting, I don't know. Is that worth it? Maybe,

but I'm happy when that hour's over. And would not be proud or happy with the results?

It would suck. I don't think I would do it, actually.

Do you think you're suppressing some deep... Absolutely not. Now, when I was young, I played

the guitar as you played the guitar, and that I greatly enjoyed, although I was never good.

But it helped me appreciate music much, much more. Well, this is the question. Okay, so from the

perspective of the observer and appreciator of art, you said good. Is there such a concept as good

in art? There's clearly a concept of bad. My guitar playing fit that concept.

Okay. But I wasn't trying to be good. I wanted to learn how to chords work,

how does a jazz improvisation work, how is blues different, classical guitar,

sort of physically, how do you make those sounds? Yes. And I did learn those things,

and you can't learn everything about them, but you couldn't learn a lot about them without ever

being good or even trying to be that good. But I could play all the notes.

So from the observer perspective, what do you... I apologize for the absurd question,

but what do you use the most beautiful and maybe a moving piece of art you've encountered in your

life? It's not an absurd question at all. And I think about this quite a bit. I would say

the two winners by a clear margin are both by Michelangelo. It's the Pieta in the Vatican

and the David statue in Florence. Why? Historical context or just purity, the creation itself?

I don't think you can view it apart from historical context and being in Florence

or in the Vatican. You're already primed for a lot, right? You can't pull that out.

But just technically, how they express the emotion of human form, I do honestly intellectually think

they're the two greatest artworks for doing that. That's not all that art does. Not all art is about

the human form, but they are phenomenal. And I think critical opinion, not that everyone agrees,

but my view is not considered a crazy one within the broader court of critical opinion. Now,

in painting, I think the most I was ever blown away was to see Vermeer's artwork. It's called

the Art of Painting and it's in Vienna in the Kunsthistorisches Museum. And I saw that, I think

I was 23. It just stunned me because I'd seen reproductions, but live in front of you and

huge, a completely different artwork. And again, Vienna primed. Yes. And I was living abroad for

the first time in Vienna itself, the city and so on. Now, unlike the Michelangeloes, that is not my

current favorite painting, but that would be like historically the one I would pick. What do you make

in the context of those choices? What do you make of modern art? And I apologize if I'm not using

the correct terminology, but art that maybe is goes another level of weird outside of the art

that you've kind of mentioned and breaks all the conventions and rules and so on and becomes

something else entirely that doesn't make sense in the same way that David might.

I think a lot of it is phenomenal. And I would say the single biggest mistake that really smart

people make is to think contemporary art or music, for that matter, is just a load of junk

or rubbish. It's just like a kind of mathematics they haven't learned yet. It's really hard to learn.

Maybe some people can never learn it. But there's a very large community of super smart, well

educated people who spend their lives with it, who love it. Those are genuine pleasures. They

understand it. They talk about it with the common language. And to think that somehow

they're all frauds, it just isn't true. Like one doesn't have to like it oneself, just like

love house may or may not be your thing. But it is amazing. And for me personally, highly rewarding.

And if someone doesn't get it, I do kind of have the conceited response of thinking like in that

area, I'm just smarter than you are. Yeah. So the interesting thing is as with most,

we get back to Eric Weinstein again. Yes. Who is in general smarter than I am. This I get.

But when it comes to contemporary artistic creations, I'm smarter than he is.

So he's not a fan of contemporary art. I don't want to speak for him.

I've heard him say derogatory things about some of it. Doesn't mean he doesn't love some other

parts of it. So I wonder if there's just a higher learning curve, a steeper learning curve for

contemporary art, meaning like it takes more work to appreciate the stories, the context from which

you're like thinking about this work. It feels like in order to appreciate the art, contemporary,

certain pieces of contemporary art, you have to know the story better behind the art.

I think that's true for many people, but I think it's a funny shape distribution

because there's a whole other set of people, sometimes just small children,

and they get abstract art more easily. You show them Vermeer or Rembrandt,

they don't get it. But just like a wall of color, they're in love with it. So

I don't think I know the full story. Again, some strange kind of distribution. The entry barriers

are super high or super low, but not that often in between.

But you were challenged saying that there's a lot to be explored in contemporary art.

It's just you need to learn.

Yeah, it's one of the most profound bodies of human thought out there, and it's part of the

humanities. And yes, there are people who also don't like podcasts, right? And that's fine.

He's also been a scholar of food. We're just going through the entirety of the human experience

today on this humanities podcast. Another absurd question, say this conversation is the last thing

you ever do in your life. We're in the suit, would murder you at the end of the conversation.

So this is your last day on earth, but I would offer you a last meal. What would that meal

contain? We can also travel to other parts of the world. Well, we have to travel because

my preferred last meal here, I probably had like two nights ago.

Which is what? Can you describe or not? The best restaurant around here is called Mama Chang's,

and it's in Fairfax, and it's food from Wuhan, actually. And they take pandemic safety seriously,

in addition to the food being very good. But this is what I would do. I would fly to Hermosillo

in northern Mexico, which is some of the best food in Mexico, but I sadly only had two days there.

So somewhere like Oaxaca, Puebla, I think they have food just as good, or some people would

say better, but I've spent a lot of time in those places. Wait, is it possible the scarcity of time

contributed to the richness of the experience? Of course, but the point is that scarcity still

holds. So I want one more dose of the food from Hermosillo. Can we describe what the food is?

It's the one kind of Mexican food that at least nominally is just like the Mexican food you get

in the US. So there are burritos, there's fajitas. It doesn't taste at all like our stuff. But again,

nominally, it's the part of Mexican food that made it into the US, was then transformed.

Yes. But it's in a way the most familiar. But for that reason, it's the most radical,

because you have to rethink all these things you know, and they're way better in Hermosillo.

Hardly any tourists go there. Like there's nothing to see in Hermosillo. Nothing to do

other than eat. It's not ruined by any outsiders. It's this longstanding tradition,

dirt cheap. And the thing to do there is just sweet talk a taxi driver into first taking you

seriously and then trusting you enough to know that you trust him to bring you to the very best

like food stands. So where's the magic of that nominally similar entity of the burrito? Where's

the magic come from? Is it the taxi ride? Is it the whole experience? Or is there something

actually in the food? Well, you can break the food down part by part. So if you think of the beef,

the beef there will be dry aged just out in the air in a way the FDA here would never permit.

Like they dry age it till it turns green, but it is phenomenal. The quality of the chilies.

So here, there's only a small number of kinds of chilies you can get. In most parts of Mexico,

there's quite a large number of chilies you can get. They're different, they're fresher,

but it's just like a different thing, the chilies. The wheat used, so this is wheat territory,

not corn territory, which is itself interesting. The wheat is more diverse and more complex. Here,

it's more homogenized, obviously cheaper, more efficient, but there it is better.

Nonpasteurized cheeses are legal in all parts of Mexico, and they can be white and gooey and

amazing in a way that here, again, it's just against the law. You could legalize them. The

demand wouldn't be that great. There's a black market in these cheeses that Latino groceries

are around here, but you just can't get that much of it. So the cheese, the meat, the wheat,

all different in significant ways, the chilies. I don't think the onions really matter much.

Garlic, I don't know. I wouldn't put much stock in that, but that's a lot of the core food,

and then it's cooked much better, and everything's super fresh. The food chain is not relying on

refrigeration, and this is one thing Russia and US have in common. We were early pioneers in food

refrigeration, and that made a lot of our foods worse quite early, and it took us a long time to

dig out of that because big countries, right? You've had an extensive rail system in Russia,

USSR, a long time, which makes it easier to freeze and then ship. What about the actual cooking,

the chef? Is there an artistry to the simple? Of course. I hesitate to call the burrito simple,

but... And there's no brain drain out of cooking. So if you're in the United States and you're very

talented, I'm not saying there aren't talented chefs. Of course there are, but there's so many

other things to pull people away. But in Mexico, there's so much talent going into food, as there

is in China, which would be another candidate for last meal questions, or India. Well, India.

That's not even get started. Unbelievable. There's a million things we could talk about here,

but you've written about Jiro, dreams of sushi. It's just a really clean, good example that people

are aware of mastery in the art of the simple in food. What do you make of that obsessive pursuit

of perfection in creating simple food? Sushi is about perfection, but it's a bit like the Beatles

White album, which people think is simple and not overproduced. It's in a funny way their most

overproduced album, but it's produced just perfectly. It sounds simple. It's really hard to

produce music to the point where it's going to sound so simple and not sound like sludge,

like let it be album. There's some great songs, but a lot of it sounds like sludge,

one after 909. That's sludge. I dig a pony. It's sludge. Like it's a bit interesting.

It's not that good. It doesn't sound that good. White album, like the best half, like Dear Prudence,

sounds perfect. Sounds simple. Cry baby cry. It's not simple. Back in the USSR. Super complex.

So sushi is like that. It's because it's so incredibly not simple, starting with the rice.

You try to refine it to make it appear super simple, and that's the most complex thing of all.

So do you admire, I mean, we're not talking about days, weeks, months. We're talking about

years, generations of doing the same thing over and over and over again. Do you admire that kind

of sticking to the, does that, you know, we talked about our admiration of the weird. That doesn't

feel weird. That seems like discipline and dedication to like a stoic minimalism or something like that.

I'm happy they do it, but I actually feel bad about it. I feel they're sacrificial victims to me,

which I benefit from. But don't you ever think like, gee, you're a great master sushi chef.

Wouldn't you be happier if you did something else? Doesn't seem to happen.

That might be something that a weird mind, maybe it is weird people, and maybe they're

really enjoying it, but like to learn how to pack rice for 10 years before they let you do

anything else. It's like these Indian, you know, Sarod players, they just spent five years tapping

at rhythms before they're allowed to touch their instruments. Well, actually, to defend that,

it's kind of like graduate school, right? Well, I think graduate school, perhaps I,

graduate school is full of like every single day is full surprises, I would say.

I did martial arts for a long time, I do martial arts, and I've always loved kind of the Russian

way of drilling is doing the same technique. I don't know if this applies in intellectual or

academic disciplines where you can do the same thing over and over and over again, thousands

and thousands and thousands of times. What I've discovered through that process is you get to

start to appreciate the tiniest of details and find the beauty in them. People who go to like

monasteries to meditate, talk about this, is when you just sit in silence and don't do anything,

you start to appreciate how much complexity and beauty there is in just the movement of a finger.

Like you can spend the whole day joyously thinking about how fun it is to move a finger.

And then you can almost become your full weird self about the tiniest details of life.

The thing you've got to wonder, like, is there a free lunch in there? Are the rest of us moving

around too much? Yeah, exactly. They sure feel like they found a free lunch,

that people meditate, they're onto something. I tend to think it's like artists that some

percent of people are like that, but most are not. And for most of us, there's no free lunch.

Like my free lunch is to move around a lot in search of lunch, in fact.

Well, with all the food talk, you made me hungry. What books, three or so books, if you can come,

if any, come to mind, technical fiction philosophical, would you recommend? Had a big impact

on you, or you just drew some insights from throughout your life?

Well, two of them we've already discussed. One is Plato's Dialogues, which I started reading

when I was like 13. Another is Ein Rand, Capitalism, the Unknown Ideal. But I would say

the Friedrich Hayek essay, The Use of Knowledge in Society, which is about how decentralized

mechanisms can work, also why they might go wrong. And that's where you start to understand

the price system, capitalism. And that was in a book called Individualism and Economic Order,

but it was just a few essays in that book. Those are maybe the three I would say.

Can you elaborate a little bit on the...

Say the price of copper goes up, right, because there's a problem with the copper mine in Chile

or Bolivia. So the price of copper goes up all around the world. People are led to economize

copper, to look for substitutes for copper, to change their production processes, to change

the goods and services they buy, to build homes a different way. And this one event creates this

one tiny change in information. It gets into your AI work very directly. And how much complexity

that one change engenders in a meaningful, coherent way. How the different pieces of the

price system fit together. Hayek really laid out very clearly. And it's like an AI problem.

And how well, not for everything, but for many things, we solve that AI problem. I learned,

I was, I think, 13, maybe 14 when I read Hayek.

The distributed nature of things there.

And it's like your work on human attention, like how much can we take in?

Yes.

Very often, not that much. And how many of the advances of modern civilization you need to

understand as a response to that constraint? I got that also from Hayek.

What's the title of the book again?

It's reprinted in a lot of books at this point. But back then, the book was called

Individualism and Economic Order. But the essays online, Hayek, Use of Knowledge in Society,

there are open access versions of it through Google. And you don't need the whole book.

So it's a very good book.

Again, one of those profound looking over the ocean, maybe sitting on a porch,

maybe with a drink of some kind. And a young kid comes by and asks you for advice.

What advice would you give to a drink? That's my advice. I'm serious.

So, okay, after that, what advice would you give to a young person today as they take on life,

whether a career in academia in general, or just a life which is probably more important than career?

Most good advice is context specific. But here are my two generic pieces of advice.

First, get a mentor. Both career, but anything you want to learn. Say you want to learn about

contemporary art. People write me this. What book should I read? It's probably not going to

work that way. You need a mentor. Yes, you should read some books on it. But you want a mentor to

help you frame them, take you around to some art, talk about it with you. So get as many mentors as

you can in the things you want to learn and then cast you a quick tangent on that, presumably a

good mentor. Of course. Is there begging the question in there? It's complicated, right?

What is complicated? Is there a lot of damage to be done from a bad mentor?

I don't think that much because it's very easy to drop mentors. And in fact, it's quite hard to

maintain them. Good mentors tend to be busy. Bad mentors tend to be busy. And you can try on mentors

and maybe they're not good for you, but you still, there's a good chance you'll learn something.

Like I had a mentor. I was an undergrad. He was a Stalinist. He edited the book called The Essential

Stalin. Brilliant guy. I learned a tremendous amount from him. Was he like as a Stalinist,

a good mentor for me? Fanifiak? Well, no. But for a year, it was tremendous. Yeah.

He introduced me like to, you know, Soviet and Eastern European science fiction,

because he was a Marxist. Like that's what I took from him, among other things.

Any advice on finding a good mentor? Daniel Kahneman has, somebody just popped us to mind

as somebody who was able to find exceptionally good collaborators throughout his life.

There's not many bright minds that find collaborators. They often,

which I ultimately see what a mentor is. Yeah. Method to it. Be interesting, be direct and try.

It's not like a perfect formula, but it's amazing how many people don't even do those things.

Be interesting, be direct and try. Like what you want from a better known person,

I would just say be very direct with them. Yeah. Beautiful. What's the second piece of advice?

Build small groups of peers. They don't have to be your age, but very often they'll be your age,

especially if you're younger, with broadly similar interests, but there can be different

points of view. People you hang out with, which can include in a WhatsApp group online. And like

every day or almost every day, they're talking about the thing you care about, trying to solve

problems in that thing. And that's your small group and you really like them and they like you

and you care what you think about each other. And you have this common interest. That's for

human connection or that's for development of ideas. It's both. They're not that different.