back to indexNiall Ferguson: History of Money, Power, War, and Truth | Lex Fridman Podcast #239
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The following is a conversation with Neil Ferguson,
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one of the great historians of our time,
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at times controversial and always brilliant,
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whether you agree with him or not.
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He's an author of 16 books on topics covering
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the history of money, power, war, pandemics, and empire.
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Previously at Harvard, currently at Stanford,
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and today launching a new university here in Austin, Texas
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called the University of Austin,
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a new institution built from the ground up
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to encourage open inquiry and discourse
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by both thinkers and doers,
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from philosophers and historians,
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to scientists and engineers,
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embracing debate, dissent, and self examination,
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free to speak, to disagree, to think,
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to explore truly novel ideas.
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The advisory board includes Stephen Pinker,
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Jonathan Haidt, and many other amazing people
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with one exception, me.
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I was graciously invited to be on the advisory board,
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which I accepted in the hope of doing my small part
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in helping build the future of education and open discourse,
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especially in the fields of artificial intelligence,
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robotics, and computing.
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We spend the first hour of this conversation
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talking about this new university
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before switching to talking about
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some of the darkest moments in human history
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and what they reveal about human nature.
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This is the Lex Friedman podcast.
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To support it, please check out our sponsors
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in the description.
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And now, here's my conversation with Neil Ferguson.
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You are one of the great historians of our time,
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respected, sometimes controversial.
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You have flourished in some of the best universities
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in the world, from NYU to London School of Economics,
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to Harvard, and now to Hoover Institution at Stanford.
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Before we talk about the history of money, war, and power,
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let us talk about a new university.
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You're a part of launching here in Austin, Texas.
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It is called University of Austin, UATX.
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What is its mission, its goals, its plan?
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I think it's pretty obvious to a lot of people
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in higher education that there's a problem.
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And that problem manifests itself
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in a great many different ways.
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But I would sum up the problem as being
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a drastic chilling of the atmosphere
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that constrains free speech, free exchange,
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even free thought.
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And I had never anticipated that this would happen
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My academic career began in Oxford in the 1980s
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when anything went.
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One sensed that a university was a place
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where one could risk saying the unsayable.
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And debate the undebatable.
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So the fact that in a relatively short space of time,
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a variety of ideas, critical race theory or wokeism,
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whatever you want to call it,
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a variety of ideas have come along that seek to limit
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and quite drastically limit what we can talk about,
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strikes me as deeply unhealthy.
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And I'm not sure, and I've thought about this for a long time,
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you can fix it with the existing institutions.
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I think you need to create a new one.
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And so after much deliberation, we decided to do it.
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And I think it's a hugely timely opportunity
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to do what people used to do in this country,
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which was to create new institutions.
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I mean, that used to be the default setting of America.
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We sort of stopped doing that.
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I mean, I look back and I'm like,
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why are there no new universities?
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Or at least if there are, why do they have sort of impact?
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It seems like we have the billionaires,
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So you still believe in institutions,
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in the university, in the ideal of the university?
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I believe passionately in that ideal,
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there's a reason they've been around for nearly a millennium.
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There is a unique thing that happens
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on a university campus when it's done right.
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And that is the transfer of knowledge between generations.
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That is a very sacred activity.
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And it seems to withstand major changes in technology.
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So this form that we call the university
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predates the printing press,
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survive the printing press,
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continue to function through the scientific revolution,
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the enlightenment, the industrial revolution to this day.
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And I think it's because,
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maybe because of evolutionary psychology,
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we need to be together in one relatively confined space,
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when we're in our late teens and early twenties,
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for the knowledge transfer between the generations to happen.
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That's my feeling about this.
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But in order for it to work well,
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there needs to be very few constraints.
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There needs to be a sense
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that one can take intellectual risk.
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Remember, people in their late teens and early twenties are adults,
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but they're inexperienced adults.
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And if I look back on my own time as an undergraduate,
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saying stupid things was my MO,
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my way to finding good ideas was through a minefield of bad ideas.
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I feel so sorry for people like me today.
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People age 18, 19, 20 today, who are intellectually very curious,
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ambitious, but inexperienced,
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because the minefields today are absolutely lethal.
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And one wrong food and it's cancellation.
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I said this to Peter Thiel the other day.
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Imagine being us now.
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I mean, we were obnoxious undergraduates.
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There's nothing that Peter did at Stanford
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that Andrew Sullivan and I were not doing at Oxford.
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And perhaps we were even worse.
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But it was so not career ending
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to be an absolutely insufferable, obnoxious undergraduate then.
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Today, if people like us exist today,
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they must live in a state of constant anxiety
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that they're going to be outed for some heretical statement
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that they made five years ago on social media.
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So part of what motivates me is that it's the desire
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to give the mise of today a shot at free thinking
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and really, I'd call it, aggressive learning.
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Learning where you're really pushed.
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And I just think that stopped happening
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on the major campuses.
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Because whether at Harvard, where I used to teach,
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or at Stanford, where I'm now based,
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I sense a kind of suffocating atmosphere of self censorship
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that means people are afraid to take even minimal risk in class.
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I mean, just take, for example, a survey that
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was published earlier this year that
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revealed this is of undergraduates in four year programs
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85% of self described liberal students
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said they would report a professor to the university
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administration if he or she said something
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they considered offensive.
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And something like 75% said they do it
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to a fellow undergraduate.
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That's the kind of culture that's evolved in our universities.
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So we need a new university in which none of that is true,
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in which you can speak your mind, say stupid things,
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get it completely wrong, and live to tell the tale.
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There's a lot more going on, I think,
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because when you start thinking about what's
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wrong with a modern university, many, many more
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things suggest themselves.
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And I think there's an opportunity here
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to build something that's radically new in some ways
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and radically traditional in other ways.
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For example, I have a strong preference
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for the tutorial system that you see at Oxford and Cambridge,
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which is small group teaching and highly
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Socratic in its structure.
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I think it'd be great to bring that to the United States,
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where it doesn't really exist.
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But at the same time, I think we should
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be doing some very 21st century things,
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making sure that while people are reading and studying
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classic works, they're also going
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to be immersed in the real world of technological innovation,
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a world that you know very well.
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And I'd love to get a synthesis of the ancient and classical,
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which we're gradually letting fade away with the novel
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and technological.
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So we want to produce people who can simultaneously
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talk intelligently about Adam Smith,
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or for that matter, Shakespeare or Proust,
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and have a conversation with you about where AI is going
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and how long it will be before I can get driven here
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by a self driving vehicle, allowing me
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to have my lunch and prepare rather than focus
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on the other crazy people on the road.
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So that's the dream that we can create something
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which is partly classical and partly 21st century.
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And we look around and we don't see it.
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If you don't see an institution that you really
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think should exist, I think you have a more responsibility
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So you're thinking, including something bigger
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than just liberal education, also including science,
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engineering, and technology.
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I should also comment that I mostly
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stay out of politics and out of some
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of these aspects of liberal education
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that's kind of been the most controversial and difficult
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within the university.
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But there is a kind of ripple effect of fear within that space
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into science and engineering and technology
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that I think has a nature that's difficult to describe.
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It doesn't have a controversial nature.
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It just has a nature of fear.
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Where you're not, you mentioned saying stupid stuff
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as a young 20 year old, for example, deep learning,
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machine learning is really popular in the computer
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science now as an approach for creating artificial intelligence
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It is controversial in that space
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to say that anything against machine learning,
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saying, sort of exploring ideas that's
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saying this is going to lead to a dead end.
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Now, that takes some guts to do as a young 20 year old
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within a classroom to think like that,
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to raise that question in a machine learning course.
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It sounds ridiculous because it's
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like who's going to complain about this.
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But the fear that starts in a course on history
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or on some course that covers society, the fear ripples
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and affects those students that are asking big out of the box
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questions about engineering, about computer science.
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And there's a lot.
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There's linear algebra that's not going to change.
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But then there's applied linear algebra, machine
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And that's when robots and real system touch human beings.
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And that's when you have to ask yourself
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these difficult questions about humanity even
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in the engineering and science and technology courses.
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And these are not separate worlds.
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In two senses, I've just taken delivery
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of my copy of the book that Eric Schmidt and Henry
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Kissinger have coauthored on artificial intelligence.
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The central question of which is, what
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does this mean for us broadly?
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But they're not separate worlds in C.P. Snow's sense
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of the chasm between science and arts.
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Because on a university campus, everything
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is contagious from a novel coronavirus
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to the behaviors occurring in the English department.
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Those behaviors, if denunciation becomes a norm,
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undergraduate denounces professor, teaching assistant
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denounces undergraduate, those behaviors are contagious
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and will spread inexorably first to social science
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and then to natural sciences.
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And I think that's part of the reason
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why when this started to happen, when
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we started to get the origins of disinvitation and cancel
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culture, it was not just a few conservative professors
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in the humanities who had to worry.
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Everybody had to worry.
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Because eventually, it was going to come even
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to the most apparently hard stem part of the campus.
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This is something Nicholas Krasnakas should look at,
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because he's very good at looking
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at the way in which social networks, like the ones that
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exist in a university, can spread everything.
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But I think when we look back and ask,
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why did wokeism spread so rapidly and rapidly out
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of humanities into other parts of universities?
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And why did it spread across the country
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and beyond the United States to the other English speaking
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It's because it's a contagion.
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And these behaviors are contagious.
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The president of a university, I won't name,
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said to me that he receives every day at least one
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denunciation, one call for somebody or other
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to be fired for something that they said.
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That's the crazy kind of totalitarianism
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light that now exists in our universities.
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And of course, the people who want to downplay this say,
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oh, well, there only have been 100 and something
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in disinvitations.
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Or, oh, there really aren't that many cases.
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But the point is that the famous events, the events that
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get the attention, are responsible for a general
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chilling that, as you say, spreads to every part
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of the university and creates a very familiar culture in which
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people are afraid to say what they think.
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Self censorship, look at the heterodox academy data
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on this, grows and grows.
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So now a majority of students will
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say this is clear from the latest heterodox academy
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surveys, we are scared to say what we think in case we get
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denounced in case we get canceled.
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Well, that's just not the correct atmosphere
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for a university in a free society.
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To me, what's really creepy is how many of the behaviors
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I see on university campuses today
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are reminiscent of the way that people used
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to behave in the Soviet Union or in the Soviet bloc
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or in Maoist China.
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There's sort of totalitarianism light
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that I think we're contending with here, which manifests itself
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as denunciations, people informing on superiors.
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Some people using it for career advantage.
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Other people reduced to hapless, desperate apology
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to try to exonerate themselves.
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People disappearing metaphorically, if not literally.
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All of this is so reminiscent of the totalitarian regimes
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that I studied earlier in my career,
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that it makes me feel sick.
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And what makes me really feel sick
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is that the people doing this stuff,
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the people who write the letters of denunciation,
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are apparently unaware that they're behaving exactly
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like people in Stalin's Soviet Union.
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They don't know that.
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So there's been a massive educational failure.
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If somebody can write an anonymous or nonanonymous
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letter of denunciation and not feel shame,
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I mean, you should feel morally completely contaminated
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as you're doing that, but people haven't been taught
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the realities of totalitarianism.
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For all these reasons, I think you need to try,
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at least to create a new institution
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where those pathologies will be structurally excluded.
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So maybe a difficult question.
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Maybe you'll push back on this,
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but you're widely seen politically as a conservative.
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Hoover Institution is politically conservative.
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What is the role of politics at the University of Austin?
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Because some of the ideas, people listening to this,
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when they hear the ideas you're expressing,
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they may think there's a lean to these ideas.
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There's a conservative lean to these ideas.
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Is there such a lean?
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There will certainly be people who say that
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because the standard mode of trying to discredit
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any new initiative is to say,
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oh, this is a sinister conservative plot.
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But one of our cofounders, Heather Hying,
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is definitely not a conservative.
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She's as committed to the idea of academic freedom as I am.
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But I think on political issues,
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we probably agree on almost nothing.
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And at least I would guess.
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But politics, Max Weber made this point a long time ago,
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that politics really should stop at the threshold
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of the classroom, of the lecture hall.
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And in my career, I've always tried to make sure
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that when I'm teaching,
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it's not clear where I stand politically,
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though of course undergraduates
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and insatiably curiously want to know,
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but it shouldn't be clear from what I say
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because indoctrination on a political basis
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is an abuse of the power of the professor,
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as Weber rightly said.
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So I think one of the key principles
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of the University of Austin will be
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that the Barian principle,
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that politics is not an appropriate subject
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for the lecture hall, for the classroom.
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And we should pursue truth
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and enshrine liberty of thought.
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If that's a political issue, then I can't help you.
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I mean, if you're against freedom of thought,
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then we don't really have much of a discussion to have.
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And clearly there are some people
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who politically seem quite hostile to it.
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But my sense is that there are plenty of people
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on the left in academia.
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I think of that interesting partnership
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between Cornell West and Robbie George,
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which has been institutionalized
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in the Academic Freedom Alliance.
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It's bipartisan this issue.
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It really, really is.
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After all, 50 years ago,
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it was the left that was in favor of free speech.
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The right still has an anti free speech element to it.
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Look how quickly they're out to ban critical race theory.
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Critical race theory won't be banned
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at the University of Texas.
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Wokeism won't be banned.
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Everything will be up for discussion.
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But the rules of engagement will be clear.
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Chicago principles, those will be enforced.
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And if you have to give a lecture on,
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well, let's just take a recent example,
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the Dorian Abbott case.
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If you're giving a lecture on astrophysics,
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but it turns out that in some different venue,
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you express skepticism about affirmative action,
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well, it doesn't matter.
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We want to know what your thoughts are on astrophysics
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because that's what you're supposed to be giving a lecture on.
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That used to be understood.
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I mean, at the Oxford of the 1980s,
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there were communists and there were ultra Tories.
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At Cambridge, there were people who were so reactionary
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that they celebrated Franco's birthday,
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but they were also out and out communists
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down the road at King's College.
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The understanding was that that kind of intellectual diversity
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was part and parcel of university life.
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And frankly, for an undergraduate,
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it was great fun to cross the road
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and go from outright conservatism,
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ultra Toryism to communism.
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One learns a lot that way.
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But the issue is when you're promoting or hiring
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or tenuring people, their politics is not relevant.
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And when it started to become relevant,
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and I remember this coming up
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at the Harvard History Department late in my time there,
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I felt deeply, deeply uneasy
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that we were having conversations
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that amounted to, well, we can't hire ex person
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despite their obvious academic qualifications
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because of some political issue.
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That's not what should happen at a healthy university.
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Some practical questions.
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Will University of Austin be a physical in person university
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or virtual university?
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What are some, in that aspect, where the classroom is?
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It will be a real space institution.
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There may be an online dimension to it
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because there clearly are a lot of things
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that you can do via the internet.
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But the core activity of teaching and learning
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I think requires real space.
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And I've thought about this a long time,
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debated Sebastian Thrun about this many, many years ago
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when he was a complete believer in,
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let's call it the metaversity to go with the metaverse.
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I mean, the metaversity was going to happen, wasn't it?
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But I never really believed in the metaversity.
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I didn't do MOOCs because I just didn't think you'd,
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A, be able to retain the attention,
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B, be able to cope with the scale,
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scaled grading that was involved.
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I think there's a reason universities have been around
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and that they're formed for about a millennium.
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You kinda need to all be in the same place.
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So I think answer to that question
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definitely a campus in the Austin area,
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that's where we'll start.
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And if we can allow some of our content
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to be available online, great, we'll certainly do that.
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Another question is,
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what kind of courses and programming will it offer?
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Is that something you can speak to?
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What's your vision here?
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We think that we need to begin more like a startup
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than like a full service university from day one.
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So our vision is that we start with a summer school,
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which will offer provocatively the forbidden courses.
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We want, I think to begin by giving a platform
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to the professors who've been most subject
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to council culture and also to give an opportunity
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to students who want to hear them to come.
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So we'll start with a summer school that will be
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somewhat in the tradition of those institutions
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in the interwar period that were havens for refugees.
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So we're dealing here with the internal refugees
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We'll start there.
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It'll be an opportunity to test out some content,
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see what students will come and spend time in Austin to hear.
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That's the sort of, if you like the launch product.
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And then we go straight to a master's program.
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I don't think you can go to undergraduate education
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right away because the established brands
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in undergraduate education are offering something
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it's impossible to compete with initially
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because they have the brand Harvard, Yale, Stanford
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and they offer also this peer network,
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which is part of the reason people want so badly
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to go to those places.
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Not really the professors, it's the classmates.
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So we don't want to compete there initially.
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Where there is, I think room for new entrants
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is in a master's program.
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And the first one will be in entrepreneurship and leadership
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because I think there is a huge hunger amongst people
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who want to get into particularly the technology world
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to learn about those things.
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And they know they're not really going to learn
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about the business schools.
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The people who are not going to teach them leadership
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and entrepreneurship are professors.
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So we want to create something that will be a little like
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the very successful Schwarzman program in China,
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which was come and spend a year in China
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and find out about China.
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We'll be doing the same essentially saying
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come and spend a year and find out about technology
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and there'll be a mix of academic content.
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We want people to understand some of the first principles
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of what they're studying.
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There are first principles of entrepreneurship
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and leadership, but we also want them to spend time with
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people like one of our co founders, Joe Lonsdale,
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who's been a hugely successful venture capitalist
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and learn directly from people like him.
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So that's the kind of initial offering.
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I think there are other master's programs
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that we will look to roll out quite quickly.
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I have a particular passion for a master's in applied history
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or politics in applied history.
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I'm a historian driven crazy by the tendency
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of academic historians to drift away
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from what seemed to me the important questions
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and certainly to drift away from addressing
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policy relevant questions.
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So I would love to be involved in a master's
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in applied history.
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And we'll build some programs like that
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before we get to the full liberal arts experience
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that we envisage for an undergraduate program.
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And that undergraduate program is an exciting one
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because I think we can be innovative there too.
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I would say two years would be spent doing
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some very classical and difficult classical things,
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bridging those old divides between arts and sciences.
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But then there would also be in the second half
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in the junior and senior years,
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something somewhat more of an apprenticeship
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where we'll have centers,
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including a center for technology,
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engineering, mathematics that will be designed
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to help people make that transition from the theoretical
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So that's the vision.
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And I think like any early stage idea
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will doubtless tweak it as we go along,
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we'll find things that work and things that don't work.
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But I have a very clear sense in my own mind
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of how this should look five years from now.
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And I don't know about you.
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I mean, I'm unusual as an academic
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because I quite like starting new institutions
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and I've done a bit of it in my career.
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You gotta kind of know what it should look like
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after the first four or five years
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to get out of bed in the morning
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and put up with all the kind of hassles of doing it,
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not least the inevitable flak that we're bound to take
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from the educational establishment.
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And I was graciously invited to be an advisor
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to this University of Austin.
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And the reason I would love to help in whatever way I can
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So one, I would love to see Austin,
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the physical location flourish intellectually
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and especially in the space of science and engineering.
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That's really exciting to me.
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Another reason is I am still a research scientist at MIT.
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And I see this effort that you're launching
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as a beacon that leads the way
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to the other elite institutions in the world.
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I think too many of my colleagues
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and especially in robotics kind of see,
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don't see robotics as a humanities problem.
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But to me, robotics and AI will define much of our world
link |
in the next century.
link |
And not to consider all the deep psychological,
link |
sociological, human problems associated with that.
link |
To have real open conversations, to say stupid things,
link |
to challenge the ideas of how companies are being run,
link |
for example, that is the safe space.
link |
It's very difficult to talk about the difficult questions
link |
about technology when you're employed by Facebook
link |
or Google and so on.
link |
The university is the place to have those conversations.
link |
And we're hugely excited that you want to be
link |
one of our advisors.
link |
We need a broad and an eclectic group of people.
link |
And I'm excited by the way that group has developed.
link |
It has some of my favorite intellectuals are there,
link |
Steve Pinker, for example.
link |
But we're also making sure that we have people
link |
with experience in academic leadership.
link |
And so it's a happy coalition of the willing
link |
looking to try to build something new,
link |
which as you say will be complimentary
link |
to the existing and established institutions.
link |
I think of the academic world as a network.
link |
I've moved from some major hubs in the network to others.
link |
But I've always felt that we do our best work,
link |
not in a silo called Oxford,
link |
but in a silo that is really a hub connected to Stanford,
link |
Harvard connected to Harvard, connected to MIT.
link |
One of the reasons I moved to the United States
link |
was that I sensed that there was more intellectual action
link |
in my original field of expertise, financial history.
link |
And that was right.
link |
It was a good move.
link |
I think I'd have stagnated if I'd stayed at Oxford.
link |
But at the same time, I haven't lost connection with Oxford.
link |
I recently went and gave a lecture there
link |
in honor of Sir Roger Scruton,
link |
one of the great conservative philosophers.
link |
And the burden of my lecture was the idea of the Anglosphere,
link |
which appealed a lot to Roger, will go horribly wrong
link |
if illiberal ideas that inhibit academic freedom
link |
spread all over the Anglosphere.
link |
And this network gets infected with these,
link |
I think deeply damaging notions.
link |
So yeah, I think we're creating a new node.
link |
I hope it's a node that makes the network overall
link |
And right now, there's an urgent need for it.
link |
I mean, there are people
link |
whose academic careers have been terminated.
link |
I'll name two who are involved, Peter Bogossian,
link |
who was harassed out of Portland State
link |
for the reason that he was one of those intrepid figures
link |
who carried out the grievance studies, hoaxes,
link |
exposing the utter charlatanry going on
link |
in many supposedly academic journals
link |
by getting phony gender studies articles published.
link |
And of course, so put the noses out of joint
link |
of the academic establishment that he began to be subject
link |
to disciplinary actions.
link |
So Peter is going to be involved.
link |
And in a recent shocking British case,
link |
the philosopher Kathleen Stock has essentially been run off
link |
the campus of Sussex University in England
link |
for violating the increasingly complex rules
link |
about discussing transgender issues and women's rights.
link |
She will be one of our advisors.
link |
And I think also one of our founding fellows
link |
actually teaching for us in our first iteration.
link |
So I think we're creating a node that's badly needed.
link |
Those people, I mean, I remember saying this
link |
to the other founders when we first began
link |
to talk about this idea to Barry Weiss
link |
and to Pano Kanellos as well as to Heather Hying.
link |
We need to do this urgently
link |
because there are people whose livelihoods
link |
are in fact being destroyed
link |
by these extraordinarily illiberal campaigns against them.
link |
And so there's no time to hang around
link |
and come up with the perfect design.
link |
This is an urgently needed lifeboat.
link |
And let's start with that.
link |
And then we can build something spectacular,
link |
taking advantage of the fact that all of these people have,
link |
well, they now have very real skin in the game.
link |
They need to make this a success
link |
and I'm sure they will help us make it a success.
link |
So you mentioned some interesting names
link |
like Heather Hying, Barry Weiss and so on.
link |
Steven Pinker, somebody I really admire
link |
and he too was under quite a lot of fire.
link |
Many reasons I admire him, one,
link |
because of his optimism about the future
link |
and two, how little of a dam he seems to give
link |
about walking through the fire.
link |
There's nobody more zen about walking through the fire
link |
than Steven Pinker.
link |
But anyway, you mentioned a lot of interesting names.
link |
Jonathan Hight is also interesting there.
link |
Who is involved with this venture at these early days?
link |
Well, one of the things that I'm excited about
link |
is that we're getting people from inside
link |
and outside the academic world.
link |
So we've got Arthur Brooks, who for many years
link |
ran the American Enterprise Institute very successfully,
link |
has a Harvard role now teaching.
link |
And so he's somebody who brings, I think,
link |
a different perspective.
link |
There's obviously a need to get experienced
link |
academic leaders involved, which is why I was
link |
talking to Larry Summers about
link |
whether he would join our Board of Advisors.
link |
The Chicago principals owe a debt
link |
to the former president of Chicago
link |
and he's graciously agreed to be in the Board of Advisors.
link |
I could go on, it would become a long and tedious list.
link |
But my goal in trying to get this happy ban to form
link |
has been to signal that it's a bipartisan endeavor.
link |
It is not a conservative institution
link |
that we're trying to build.
link |
It's an institution that's committed to academic freedom
link |
and the pursuit of truth that will mean it
link |
when it takes Robert Zimmer's Chicago principals
link |
and enshrines them in its founding charter
link |
and will make those something other than honored
link |
in the breach, which they seem to be at some institutions.
link |
So the idea here is to grow this organically.
link |
We need, rather like the academic freedom alliance
link |
that Robbie George created earlier this year,
link |
we need breadth and we need to show
link |
that this is not some kind of institutionalization
link |
of the intellectual dark web,
link |
though we welcome founding members of that nebulous body.
link |
It's really something designed for Olive academia
link |
to provide a kind of reboot
link |
that I think we all agree is needed.
link |
Is there a George Washington type figure
link |
who's, is there a president elected yet
link |
or who's going to lead this institution?
link |
Hanna Canellos, the former president of St. John's
link |
is the president of University of Austin.
link |
And so he is our George Washington.
link |
I don't know who Alexander Hamilton is.
link |
I'll lead you to guess.
link |
It's funny you mentioned IDW, Intellectual Dark Web.
link |
Have you talked to your friend Sam Harris about any of this?
link |
He is another person I really admire
link |
and I've talked to online and offline quite a bit
link |
for not belonging to any tribe.
link |
He stands boldly on his convictions
link |
when he knows they're not going to be popular
link |
with like he basically gets canceled by every group.
link |
He sort of, he doesn't shy away from controversy
link |
and not for the sake of controversy itself.
link |
He is one of the best examples to me
link |
of a person who thinks freely.
link |
I disagree with him on a few, quite a few things,
link |
but I deeply admire that he is what it looks like
link |
to think freely by himself.
link |
It feels to me like he represents a lot of the ideals
link |
of this kind of effort.
link |
Yes, he would be a natural fit.
link |
Sam, if you're listening, I hope you're in.
link |
I think in the course of his recent intellectual quests,
link |
he did collide with one of our founders, Heather Hying.
link |
So we'll have to model civil disagreement
link |
at the University of Austin.
link |
It's extremely important that we should all disagree
link |
about many things, but do it amicably.
link |
One of the things that has been lost sight of,
link |
perhaps it's all the fault of Twitter
link |
or maybe it's something more profound,
link |
is that it is possible to disagree in a civil way
link |
and still be friends.
link |
I certainly had friends at Oxford
link |
who were far to the left of me politically
link |
and they are still among my best friends.
link |
So the University of Austin has to be a place
link |
where we can disagree vehemently,
link |
but we can then go and have a beer afterwards.
link |
That's, in my mind, a really important part
link |
of university life, learning the difference
link |
between the political and the personal.
link |
So Sam is, I think, a good example,
link |
as a you of a certain kind of intellectual hero
link |
who has been willing to go into the cyber sphere,
link |
the metaverse and carve out an intellectual space,
link |
the podcast and debate everything fearlessly.
link |
His essay, it was really an essay on Black Lives Matter
link |
and the question of police racism
link |
was a masterpiece of 2020.
link |
And so he, I think, is a model of what we believe in,
link |
but we can't save the world with podcasts,
link |
good though yours is,
link |
because there's a kind of solo element
link |
to this form of public intellectual activities.
link |
It's also there in Substack
link |
where all our best writers now seem to be
link |
including our founder Barry Weiss.
link |
The danger with this approach is ultimately
link |
your subscribers are the people who already agree with you
link |
and we are all therefore in danger of preaching to the choir.
link |
I think what makes an institution like University of Austin
link |
so attractive is that we get everybody together
link |
at least part of the year
link |
and we do that informal interaction at lunch,
link |
at dinner that allows in my experience
link |
the best ideas to form.
link |
Intellectual activity isn't really a solo voyage.
link |
Historians often make it seem that way,
link |
but I've realized over time that I do my best work
link |
in a collaborative way
link |
and scientists have been better at this
link |
than people in the humanities.
link |
But what really matters,
link |
what's magical about a good university
link |
is that interdisciplinary serendipitous conversation
link |
that happens on campus.
link |
Tom Sargent, the great Nobel Prize winning economist
link |
and I used to have these kind of random conversations
link |
in elevators at NYU or in corridors at Stanford.
link |
And sometimes they'd be quite short conversations
link |
but in that short serendipitous exchange
link |
I would have more intellectual stimulus
link |
than in many a seminar lasting an hour and a half.
link |
So I think we want to get the Sam Harris's
link |
and Lex Friedman's out of their darkened rooms
link |
and give them a chance to interact
link |
in a much less structured way than we've got used to.
link |
Again, it's that sense that sometimes you need
link |
some freewheeling unstructured debate
link |
to get the really good ideas.
link |
I mean, to talk anecdotally for a moment,
link |
I look back on my Oxford undergraduate experience
link |
and I wrote a lot of essays
link |
and attended a lot of classes
link |
but intellectually the most important thing I did
link |
was to write an essay on the Viennese satirist Carl Krause
link |
for an undergraduate discussion group called The Canning Club.
link |
And I probably put more work into that paper
link |
than I put into anything else
link |
except maybe my final examinations.
link |
Even although there was only really one senior member
link |
present, the historian Jeremy Cato,
link |
I was really just trying to impress my contemporaries.
link |
And that's the kind of thing we want.
link |
The great intellectuals,
link |
the great intellectual leaps forward occurred,
link |
often in somewhat unstructured settings.
link |
I'm from Scotland, you can tell from my accent
link |
a little at least.
link |
The enlightenment happened in late 18th century Scotland
link |
in a very interesting interplay between the universities
link |
which were very important,
link |
Glasgow, Edinburgh, St Andrews and the coffee houses
link |
and pubs of the Scottish cities
link |
where a lot of unstructured discussion
link |
often fueled by copious amounts of wine took place.
link |
That's what I've missed over the last few years.
link |
Let's just think about how hard academic social life
link |
has become that we've reached the point
link |
that Amy Tua becomes the object of a full blown investigation
link |
and media storm for inviting two Yale Law School students
link |
over to her house to talk.
link |
I mean, when I was at Oxford,
link |
it was regarded as a tremendous honor to be asked
link |
to go to one of our tutors homes.
link |
The social life of Oxford and Cambridge
link |
is one of their great strengths.
link |
There's a sort of requirement to sip unpleasant sherry
link |
with the dons and we've kind of killed all that.
link |
We've killed all that in the US
link |
because nobody dares have a social interaction
link |
with an undergraduate or exchange an informal email
link |
in case the whole thing ends up on the front page
link |
of the local or student newspaper.
link |
So that's what we need to kind of restore
link |
the social life of academia.
link |
We didn't really address this sort of explicitly
link |
but there's magic to the interaction between students.
link |
There's magic in the interaction between faculty,
link |
the people that teach and there's the magic
link |
in the interaction between the students and the faculty
link |
and it's an iterative process
link |
that changes everybody involved.
link |
So it's like world experts in a particular discipline
link |
are changed as much as the students.
link |
As the 20 year olds with the wild ideas,
link |
each are changed and that's the magic of it.
link |
And that applies in liberal education
link |
that applies in the sciences too.
link |
That's probably maybe you can speak to this
link |
why so much scientific innovation
link |
has happened in universities.
link |
There's something about the youthful energy
link |
of like young minds, graduate students
link |
and the graduate students that inspire some of the world
link |
experts to do some of the best work of their lives.
link |
Well, the human brain we know is at its most dynamic
link |
when people are pretty young.
link |
You know this with your background in math.
link |
People don't get better at math after the age of 30.
link |
And this is important when you think about
link |
the intergenerational character of university.
link |
The older people, the professors have the experience
link |
but they're fading intellectually
link |
from much earlier than anybody really wants to admit.
link |
And so you get this intellectual shot in the arm
link |
from hanging out with people who are circa 20,
link |
don't know shit, but brains are kind of like cooking.
link |
I look back on the career I've had in teaching
link |
which is over 25 years where Cambridge, Oxford, NYU, Harvard
link |
and I have extremely strong relationships
link |
with students from those institutions
link |
because they would show up whether it was at office hours
link |
or in tutorials and disagree with me.
link |
And for me, it's always been about encouraging
link |
some active intellectual rebellion, telling people
link |
I don't want your essay to echo my views.
link |
If you can find something wrong with what I wrote, great.
link |
Or if you can find something I missed that's new, fantastic.
link |
So there is definitely, as you said, a magic
link |
in that interaction across the generations.
link |
And it's extraordinarily difficult I think
link |
for an intellectual to make the same progress
link |
in a project, in isolation, compared with the progress
link |
that can be made in these very special communities.
link |
What does a university do amongst other things?
link |
It creates a somewhat artificial environment
link |
of abnormal job security.
link |
That's the whole idea of giving people tenure.
link |
And then a relatively high turnover, new faces each year.
link |
And an institutionalization of thought experiments
link |
and actual experiments.
link |
And then you get everybody living in the same kind
link |
of vicinity so that it can spill over into 3AM conversation.
link |
Well, that always seems to me to be
link |
a pretty potent combination.
link |
Let's ask ourselves a counterfactual question next.
link |
Let's imagine that the world wars happen,
link |
but there are no universities.
link |
I mean, how does the Manhattan Project
link |
happen with no academia to take just one of many examples?
link |
In truth, how does Britain even stay in the war
link |
without Bletchley Park, without being
link |
able to crack the German cipher?
link |
The academics are unsung, partly sung
link |
heroes of these conflicts.
link |
The same is true in the Soviet Union.
link |
The Soviet Union was a terribly evil and repressive system,
link |
but it was good at science.
link |
And that kept it in the game not only in World War II,
link |
it kept it in the Cold War.
link |
So it's clear that universities are incredibly powerful,
link |
intellectual force multipliers.
link |
And our history without them would look very different.
link |
Sure, some innovations would have happened without them.
link |
The Industrial Revolution didn't need universities.
link |
In fact, they played a very marginal role
link |
in the key technological breakthroughs
link |
of the Industrial Revolution in its first phase.
link |
But by the second Industrial Revolution
link |
in the late 19th century, the German industry
link |
would not have leapt ahead of British industry
link |
if the universities had not been superior.
link |
And it was the fact that the Germans institutionalized
link |
scientific research in the way that they did that really
link |
produced a powerful, powerful advantage.
link |
The problem was that this is a really interesting point
link |
that Friedrich Meinecke makes in die Deutsche
link |
Katastrophe for the German catastrophe.
link |
The German intellectuals became technocrats,
link |
homophobic, he says.
link |
They knew a great deal about their speciality,
link |
but they were alienated from, broadly speaking, humanism.
link |
And that is his explanation, or one of his explanations,
link |
for why this very scientifically advanced
link |
Germany goes down the path of hell led by Hitler.
link |
So when I come back and ask myself,
link |
what is it that we want to do with a new university,
link |
we want to make sure that we don't fall into that German pit
link |
where very high levels of technical and scientific
link |
expertise are decoupled from the fundamental foundations
link |
of a free society.
link |
So liberal arts are there, I think,
link |
to stop the scientists making faustian pacts.
link |
And that's why it's really important that people working
link |
on AI reach Shakespeare.
link |
I think you said that academics are unsung heroes
link |
of the 20th century.
link |
I think there's kind of a lazy intellectual desire
link |
to kind of destroy the academics,
link |
that the academics are the source of all problems
link |
And I personally believe that, exactly as you said,
link |
we need to recognize that the university is probably
link |
where the ideas that will protect us from the catastrophes
link |
that are looming ahead of us, that's
link |
where those ideas are going to come from.
link |
People who work on economics can argue back and forth
link |
about John Maynard Keynes.
link |
But I think it's pretty clear that he
link |
was the most important economist and certainly
link |
the most influential economist of the 20th century.
link |
And I think his ideas are looking better today
link |
in the wake of the financial crisis
link |
than they have at any time since the 1970s.
link |
But imagine John Maynard Keynes without Cambridge.
link |
You can't, because someone like that
link |
doesn't actually exist without the incredible hot house
link |
that a place like Cambridge was in Keynes's life.
link |
He was a product of a kind of hereditary intellectual elite.
link |
But you can't help but admire the sheer power of the mind.
link |
I've spent a lot of my career reading Keynes
link |
and I revere that intellect.
link |
It's so, so powerful.
link |
But you can't have people like that
link |
if you're not prepared to have King's College, Cambridge.
link |
And it comes with redundancy.
link |
I think that's the point.
link |
There are lots and lots of things
link |
that are very annoying about academic life
link |
that you just have to deal with.
link |
They're made fun of in that recent Netflix series The Chair.
link |
And it is easy to make fun of academic life.
link |
Tom Sharp's Porterhouse Blue did it.
link |
It's an inherently comical subject.
link |
Professors at least used to be amusingly eccentric.
link |
But we've sort of killed off that side of academia
link |
by turning it into an increasingly doctrinaire
link |
place where eccentricity is not tolerated.
link |
I'll give you an illustration of this.
link |
I had a call this morning from a British academic who said,
link |
can you give me some advice because they're
link |
trying to decolonize the curriculum?
link |
This is coming from the diversity, equity,
link |
and inclusion officers.
link |
And it seems to me that what they're
link |
requiring of us is a fundamental violation
link |
of academic freedom because it is determining ex ante
link |
what we should study and teach.
link |
That's what's going on.
link |
And that's the thing that we really, really have to resist
link |
because that kills the university.
link |
That's the moment that it stops being
link |
the magical place of intellectual creativity
link |
and simply becomes an adjunct of the Ministry of Propaganda.
link |
I've loved the time we spent talking about this
link |
because it's such a hopeful message for the future
link |
of the university that I still share with you
link |
the love of the ideal of the university.
link |
So a very practical question.
link |
You mentioned summer.
link |
Which summer are we talking about?
link |
So I know we don't want to put hard dates here,
link |
but what year are we thinking about when is this thing
link |
What are your thoughts on this?
link |
We are moving as fast as our resources allow.
link |
The goal is to offer the first of the forbidden courses
link |
next summer, summer of 2022.
link |
And we hope to be able to launch an initial, albeit
link |
relatively small scale masters program
link |
in the fall of next year.
link |
That's as fast as is humanly possible.
link |
So yeah, we're really keen to get going.
link |
And I think the approach we're taking is somewhat
link |
imported from Silicon Valley.
link |
Think of this as a startup.
link |
Don't think of this as something that
link |
has to exist as a full service university on day one.
link |
We don't have the resources for that.
link |
You did billions and billions of dollars
link |
to build a university sort of as a facsimile
link |
of an existing university, but that's not what we want to do.
link |
I mean, copying and pasting Harvard or Yale or Stanford
link |
would be a futile thing to do.
link |
They would probably, you very quickly
link |
end up with the same pathologies.
link |
So we do have to come up with a different design.
link |
And one way of doing that is to grow it organically
link |
from something quite small.
link |
Elon Musk mentioned in his usual humorous way on Twitter
link |
that he wants to launch the Texas Institute of Technology
link |
Some people thought this was sexist because of the acronym
link |
So first of all, I understand their viewpoint,
link |
but I also think there needs to be a place for humor
link |
on the internet, even from CEOs.
link |
So on this podcast, I've gotten a chance
link |
to talk to quite a few CEOs and what
link |
I love to see is authenticity.
link |
And humor is often a sign of authenticity.
link |
The quirkiness that you mentioned
link |
is such a beautiful characteristic
link |
of professors and faculty in great universities
link |
is also beautiful to see as CEOs, especially founding CEOs.
link |
So anyway, the deeper point he was making
link |
is showing an excitement for the university
link |
as a place for big ideas in science, technology,
link |
So to me, if there's some kind of way,
link |
if there is a serious thought that he had behind this tweet,
link |
not to analyze Elon Musk's Twitter like it's Shakespeare,
link |
but if there's a serious thought,
link |
I would love to see him supporting the flourishing
link |
of Austin as a place for science, technology,
link |
for these kinds of intellectual developments
link |
that we're talking about, make a place for free inquiry,
link |
civil disagreements coupled with great education
link |
and conversations about artificial intelligence,
link |
about technology, about engineering.
link |
So I'm actually going to, I hope there's
link |
a serious idea behind that tweet.
link |
I mean, I'm going to chat with him about it.
link |
Most of the biggest storms and teacups of my academic career
link |
have been caused by bad jokes that I've made.
link |
These days, if you want to make bad jokes,
link |
being a billionaire is a great idea.
link |
I'm not here to defend Elon's Twitter style
link |
or sense of humor.
link |
He's not going to be remembered for his tweets, I think.
link |
He's going to be remembered for the astonishing companies
link |
that he's built and his contributions
link |
in a whole range of fields from SpaceX to Tesla
link |
And I very much hope that we can interest Elon
link |
We need not only Elon, but a whole range of his peers
link |
because this takes resources.
link |
Universities are not cheap things to run,
link |
especially if, as I hope, we can make
link |
as much of the tuition covered by scholarships and bursaries.
link |
We want to attract the best intellectual talent
link |
to this institution.
link |
The best intellectual talent is somewhat randomly distributed
link |
And some of it is in the bottom quintile
link |
of the income distribution.
link |
And that makes it hard to get to elite education.
link |
So this will take resources.
link |
The last generation of super wealthy plutocrats,
link |
the generation of the Gilded Age of the late 19th century,
link |
did a pretty good job of founding universities.
link |
Chicago wouldn't exist, but for the money of that era.
link |
And so my message to not only to Elon,
link |
but to all of the peers, all of those people
link |
who made their billions out of technology
link |
over the last couple of decades is, this is your time.
link |
And this is your opportunity to create something new.
link |
I can't really understand why the wealthy of our time
link |
are content to hand their money.
link |
I mean, think of the vast sums Mike Bloomberg recently
link |
gave to Johns Hopkins, to his established institutions.
link |
When, on close inspection, those institutions
link |
don't seem to spend the money terribly well.
link |
And in fact, one of the mysteries of our time
link |
is the lack of due diligence that hardnosed billionaires seem
link |
to do when it comes to philanthropy.
link |
So I think there's an opportunity here
link |
for this generation of very talented wealthy people
link |
to do what their counterparts did in the late 19th
link |
and the early 20th century and create some new institutions.
link |
And they don't need to put their names on the buildings.
link |
They just need to do what the founders of University of Chicago
link |
did, create something new that will endure.
link |
Yeah, MIT is launching a College of Computing.
link |
And Stephen Schwarzman has given quite a large sum of money,
link |
I think, in total, $1 billion.
link |
And as somebody who loves computing,
link |
as somebody who loves MIT, I want some accountability.
link |
For MIT becoming a better institution.
link |
And this is, once again, why I'm excited about University
link |
of Austin because it serves as a beacon.
link |
Look, you can create something new.
link |
And this is what the great institutions of the future
link |
And Steve Schwarzman is also an innovator.
link |
The idea of creating a college on the Tsinghua campus
link |
and creating a kind of Rhodes program for students
link |
from the Western world to come study in China was Steve's idea.
link |
And I was somewhat involved, did some visiting,
link |
It taught me that you can create something new
link |
in that area of graduate education
link |
and quite quickly attract really strong applicants.
link |
Because the people who finished their four years at Harvard
link |
or Stanford know that they don't know a lot.
link |
And I, having taught a lot of people in that group,
link |
know how intellectually dissatisfied they often
link |
are at the end of four years.
link |
I mean, they may have beautifully
link |
gamed the system to graduate summa magna cum laude,
link |
but they kind of know they'll confess it after a drink or two.
link |
They know that they gamed the system
link |
and that intellectually it wasn't the fulfilling experience
link |
And they also know that an MBA from a comparable institution
link |
would not be a massive intellectual step forward.
link |
So I think what we want to say is here's something really
link |
novel, exciting, that will be intellectually very challenging.
link |
I do think the University of Austin has to be difficult.
link |
I'd like it to feel a little bit like surviving Navy SEAL
link |
training to come through this program,
link |
because it will be intellectually demanding.
link |
And that, I think, should be a magnet.
link |
So yeah, Steve, if you're listening,
link |
please join Elon in supporting this.
link |
And Peter, Teal, if you're listening,
link |
I know how skeptical you are about the idea of creating
link |
a new university, because heaven knows.
link |
Peter and I have been discussing this idea for years,
link |
and he's always said, well, no, we thought about this,
link |
and it just isn't going to work.
link |
But I really think we've got a responsibility to do this.
link |
Well, Steve's been on the podcast before.
link |
We've spoken a few times, so I'll send this to him.
link |
I hope he does actually get behind it as well.
link |
So I'm super excited by the ideas that we've
link |
been talking about that this effort represents
link |
and what ripple effect it has on the rest of society.
link |
That was a time beautifully spent.
link |
And I'm really grateful for the fortune
link |
of getting a chance to talk to you at this moment in history,
link |
because I've been a big fan of your work,
link |
and the reason I wanted to talk to you today
link |
is about all the excellent books you've
link |
written about various aspects of history
link |
through money, war, power, pandemics, all of that.
link |
But I'm glad that we've got a chance
link |
to talk about this, which is not looking at history.
link |
It's looking at the future.
link |
This is a beautiful little fortuitous moment.
link |
I appreciate you talking about it.
link |
In the book, Ascent of Money, you give a history of the world
link |
through the lens of money.
link |
If the financial system is evolutionary nature,
link |
much like life on Earth, what is the origin of money on Earth?
link |
The origin of money predates coins.
link |
Most people kind of assume I'll talk about coins,
link |
but coins are relatively late developments.
link |
Back in ancient Mesopotamia, so I don't know,
link |
5,000 years ago, there were relations
link |
between creditors and debtors.
link |
There are even in the simplest economy because of the way
link |
in which agriculture works.
link |
Hey, I need to plant these seeds,
link |
but I'm not going to have crops for X months.
link |
So we have clay tablets in which simple debt transactions
link |
I remember looking at great numbers of these in the British
link |
Museum when I was writing The Ascent of Money.
link |
And that's really the beginning of money.
link |
The minute you start recording a relationship
link |
between a creditor and a debtor, you have something
link |
that is quasi money.
link |
And that is probably what these clay tablets mostly
link |
From that point on, there's a great evolutionary experiment
link |
to see what the most convenient way
link |
is to record relations between creditors and debtors.
link |
And what emerges in the time of the ancient Greeks
link |
are coins, metal, tokens, sometimes a valuable metal,
link |
sometimes not, usually bearing the imprint of a state
link |
And that's the sort of more familiar form of money
link |
that we still use today for very, very small transactions.
link |
I expect coins will all be gone by the time my youngest son
link |
But they're a last remnant of a very, very old way
link |
of doing simple transactions.
link |
By the way, when you say coins, you mean physical coins.
link |
I'm talking about.
link |
Because the term coins has been rebranded
link |
in the digital space as well.
link |
Yeah, not coin based coins, actual coin coins.
link |
You know the ones that jangle in your pocket
link |
and you don't know quite what to do with once you have some.
link |
So that became an incredibly pervasive form of paying
link |
Money is just a crystallization of a relationship
link |
between a debtor and a creditor.
link |
And coins are just very fungible.
link |
Whereas a clay tablet relates to a specific transaction,
link |
coins are generic and fungible.
link |
They can be used in any transaction.
link |
So that was an important evolutionary advance.
link |
If you think of financial history,
link |
and this was the point of the Ascent of Money,
link |
as an evolutionary story, there are punctuated equilibria.
link |
People get by with coins for a long time,
link |
despite their defects as a means of payment,
link |
such as that they can be debased, they can be clipped.
link |
It's very hard to avoid fake or debased money entering
link |
But coinage is still kind of the basis of payments
link |
all the way through the Roman Empire, out the other end,
link |
into the so called dark ages.
link |
It's still how most things are settled in cash transactions
link |
in the early 1300s.
link |
You don't get a big shift until after the Black Death,
link |
when there is such a need to monetize the economy
link |
because of chronic labor shortages
link |
and feudalism begins to unravel, that you just don't
link |
have a sufficient amount of coinage.
link |
And so you get bills of exchange.
link |
And I'm really into bills of exchange because,
link |
and this I hope will capture your listeners
link |
and viewers imaginations, when they
link |
start using bills of exchange, which are really just pieces
link |
of paper saying, I owe you over a three month period,
link |
while goods are in transit from Florence to London,
link |
you get the first peer to peer payment system, which
link |
is network verified.
link |
Because they're not coins.
link |
They don't have a king's head on them.
link |
They're just pieces of paper.
link |
And the verification comes in the form of signatures.
link |
And you need, ultimately, some kind of guarantee if I
link |
write an IOU to you, bills of exchange,
link |
I mean, you don't really know me that well, we only just met.
link |
So you might want to get endorsed by, I don't know,
link |
somebody really credit worthy like Elon.
link |
And so we actually can see in the late 14th century
link |
in northern Italy and England and elsewhere,
link |
the evolution of a peer to peer network system of payment.
link |
And that's actually how world trade grows.
link |
Because you just couldn't settle long oceanic transactions
link |
It just wasn't practical.
link |
All those treasure chests full of the balloons,
link |
which were part of the way in which the Spanish Empire worked
link |
were really inefficient.
link |
So bills of exchange are an exciting part of the story.
link |
And they illustrate something I should have made more clear
link |
with the ascent of money, that not everything used in payment
link |
needs to be money.
link |
Classically, economists will tell you, oh, well, money.
link |
Money has three different functions.
link |
You've heard this a zillion times, right?
link |
It's a unit of account.
link |
It's a store of value.
link |
And it's a medium of exchange.
link |
Now, there are three or four things
link |
that are worth saying about this.
link |
And I'll just say two.
link |
One, it may be that those three things are a trilemma.
link |
And it's very difficult for anything to be all of them.
link |
This point was made by my Hoover colleague, Manny Rincón,
link |
And I still wish he would write this up as a paper,
link |
because it's a great insight.
link |
The second thing that's really interesting to me
link |
is that payments don't need to be money.
link |
And if we go around, as economists love to do saying,
link |
well, Bitcoin's not money, because it doesn't
link |
fulfill these criteria, we're missing the point
link |
that you could build a system of payments, which I think
link |
is how we should think about crypto that isn't money.
link |
It doesn't need to be money.
link |
It's like bills of exchange.
link |
It's network based verification, peer to peer transactions
link |
without third party verification.
link |
When it hit me the other day that we actually
link |
had this precedent for crypto, I got quite excited and thought,
link |
I wish I had written that in the assent of money.
link |
Can you sort of form a first principles, like almost
link |
like a physics perspective, or maybe a human perspective,
link |
describe where does the value of money come from?
link |
Like, where is it actually?
link |
So it's a sheet of paper, or it's coins.
link |
But it feels like in a platonic sense,
link |
there's some kind of thing that's actually storing the value,
link |
as a bunch of ants are dancing around and so on.
link |
I come from a family of physicists.
link |
I'm the black sheep of the family.
link |
My mother's a physicist.
link |
So when you ask me to explain something in physics terms,
link |
I get a kind of little part of me dies,
link |
because I know I'll fail.
link |
But in truth, it doesn't really matter
link |
what we decide money is going to be.
link |
And anything can record, crystallize the relationship
link |
between the creditor and the debtor.
link |
It can be a piece of paper.
link |
It can be a piece of metal.
link |
It can be nothing.
link |
It can be a digital entry.
link |
It's trust that we're really talking about here.
link |
We are not just trusting one another.
link |
We may not, but we are trusting the money.
link |
So whatever we use to represent the creditor
link |
debtor relationship, whether it's a banknote or a coin
link |
or whatever, it does depend on us both trusting it.
link |
And that doesn't always pertain.
link |
What we see in episodes of inflation,
link |
especially episodes of hyperinflation,
link |
is a crisis of trust, a crisis of confidence
link |
in the means of payment.
link |
And this is very traumatic for the societies
link |
to which it happens.
link |
By and large, human beings, particularly
link |
once you have a rule of law system of the sort that evolved
link |
in the West and then became generalized,
link |
are predisposed to trust one another.
link |
And the default setting is to trust money.
link |
Even when it depreciates, a quite steady rate
link |
as the US dollar has done pretty much uninterruptedly
link |
since the 1960s, it takes quite a big disruption for money
link |
to lose that trust.
link |
But I think essentially what money should be thought of as
link |
is a series of tokens that can take any form we like
link |
and can be purely digital, which represent
link |
our transactions as creditors and debtors.
link |
And the whole thing depends on our collective trust to work.
link |
I had to explain this to Stephen Colbert once
link |
in the Colbert show, the old show that was actually funny.
link |
And it was a great moment when he said, so Neil,
link |
And I said, yes, we could settle a debt with the human being.
link |
That was quite common in much of history,
link |
but it's not the most convenient form of money.
link |
Money has to be convenient.
link |
That's why when they worked out how to make payments
link |
with cell phones, the Chinese simply went straight there
link |
from bank accounts.
link |
They skipped out credit cards.
link |
You won't see credit cards in China,
link |
except in the hands of naive tourists.
link |
How much can this trust bear in terms of us humans
link |
with our human nature testing it?
link |
I guess the surprising thing is the thing works.
link |
A bunch of self interested ants running around trading
link |
And it seems to work except for a bunch of moments
link |
in human history when there's hyperinflation,
link |
like you mentioned.
link |
And it's just kind of amazing.
link |
It's kind of amazing that us humans,
link |
if I were to be optimistic and hopeful about human nature,
link |
it gives me a sense that people want to lean on each other.
link |
They want to trust.
link |
That certainly, I would say probably now,
link |
a widely shared view amongst evolutionary psychologists,
link |
network scientists.
link |
It's one of Nicholas Christakis's argument
link |
And I think economic history broadly bears this out.
link |
But you have to be cautious.
link |
The cases where the system works are familiar to us.
link |
Because those are the states and the eras that
link |
produce a lot of written records.
link |
But when the system of trust collapses
link |
and the monetary system collapses with it,
link |
there is generally quite a paucity of records.
link |
I found that when I was writing Doom.
link |
And so we slightly are biased in favor
link |
of the periods when trust prevailed
link |
and the system functioned.
link |
It's very easy to point to a great many episodes
link |
of very, very intense monetary chaos,
link |
even in the relatively recent past.
link |
In the wake of the First World War,
link |
multiple currencies, not just the German currency,
link |
multiple currencies were completely destroyed,
link |
the Russian currency, the Polish currency.
link |
There were currency disasters all over central and eastern
link |
Europe in the early 1920s.
link |
And that was partly because over the course
link |
of the 19th century, a system had evolved in which trust
link |
was based on gold and rules that were supposedly applied
link |
That system, which produced relative price stability
link |
over the 19th century, fell apart
link |
as a result of the First World War.
link |
And as soon as it was gone, as soon as there was no longer
link |
a clear link between those banknotes and coins and gold,
link |
the whole thing went completely haywire.
link |
And I think we should remember that the extent
link |
of the monetary chaos from certainly 1918
link |
all the way through to the late 1940s.
link |
I mean, the German currency was destroyed not once,
link |
but twice in that period.
link |
And that was one of the most advanced economies in the world.
link |
In the United States, there were periods
link |
of intensely deep deflation.
link |
Prices fell by a third in the Great Depression,
link |
and then very serious price volatility in the immediate
link |
post World War II period.
link |
So it's a bit of an illusion.
link |
Maybe it's an illusion for people
link |
who've spent most of their lives in the last 20 years.
link |
We've had a period of exceptional price stability
link |
since this century began in which a regime
link |
of central bank independence and inflation targeting
link |
appeared to generate steady below 2% inflation
link |
in much of the developed world.
link |
It was a bit too low for the central bankers liking.
link |
And that became a problem in the financial crisis.
link |
But we've avoided major price instability
link |
for the better part of 20 years in most of the world.
link |
There haven't really been that many very high inflation
link |
episodes and hardly any hyperinflationary episodes.
link |
Venezuela's one of the very few Zimbabwe's another.
link |
But if you take a 100 year view or a 200 year view
link |
or if you want to take a 500 year view,
link |
you realize that quite often the system doesn't work.
link |
If you go back to the 17th century,
link |
there were multiple competing systems of coinage.
link |
There had been a great inflation
link |
that had begun the previous century.
link |
The price revolution caused mainly
link |
by the arrival of New World Silver.
link |
I think financial history is a bit messier
link |
than one might think.
link |
And the more one studies it,
link |
the more one realizes the need for the evolution.
link |
The reason bills of exchange came along
link |
was because the coinage systems had stopped working.
link |
The reason that banknotes started to become used more
link |
generally first in the American colonialism 17th century,
link |
then more widely in the 18th century
link |
was just that they were more convenient
link |
than any other way of paying for things.
link |
We had to invent the bond market in the 18th century
link |
to cope with the problem of public debt,
link |
which up until that point
link |
had been a recurrent source of instability.
link |
And then we invented equity finance
link |
because bonds were not enough.
link |
So I would prefer to think of the financial history
link |
as a series of crises really
link |
that are resolved by innovations.
link |
And in the most recent episode,
link |
very exciting episode of financial history,
link |
something called Bitcoin initiated a new
link |
financial or monetary revolution
link |
in response, I think, to the growing crisis
link |
of the fiat money system.
link |
Can you speak to that?
link |
So what do you think about Bitcoin?
link |
What do you think it is a response to?
link |
What are the growing problems of the fiat system?
link |
What is this moment in human history
link |
that is full of challenges
link |
that Bitcoin and cryptocurrencies trying to overcome?
link |
I don't think Bitcoin was devised by Satoshi,
link |
whoever he was, for fear of a breakdown
link |
of the fiat currencies.
link |
If it was, it was a very farsighted enterprise
link |
because certainly in 2008,
link |
when the first Bitcoin paper appeared,
link |
it wasn't very likely that a wave of inflation
link |
was coming, if anything.
link |
There was more reason to fear deflation at that point.
link |
I think it would be more accurate to say
link |
that with the advent of the internet,
link |
there was a need for a means of payment
link |
native to the internet,
link |
typing your credit card number into a random website.
link |
It's not the way to pay for things on the internet.
link |
And I'd rather think of Bitcoin as the first iteration,
link |
the first attempt to solve the problem
link |
of how do we pay for things
link |
in what we must learn to call the metaverse,
link |
but let's just call it the internet for all time's sake.
link |
And ever since that initial innovation,
link |
the realization that you could use computing power
link |
and cryptography to create peer to peer payments
link |
without third party verification,
link |
a revolution has been gathering momentum
link |
that poses a very profound threat
link |
to the existing legacy system of banks and fiat currencies.
link |
Most money in the world today is made by banks,
link |
not central banks, banks.
link |
That's what most money is, it's entries in bank accounts.
link |
And what Bitcoin represents
link |
is an alternative mode of payment
link |
that really ought to render banks obsolete.
link |
I think this financial revolution has got past
link |
the point at which it can be killed.
link |
It was vulnerable in the early years,
link |
but it now has sufficient adoption
link |
and has generated sufficient additional layers.
link |
I mean, Ethereum was in many ways the more important innovation
link |
because you can build a whole system of payments
link |
and ultimately smart contracts on top of Ether.
link |
I think we've now reached the point
link |
that it's pretty hard to imagine it all being killed.
link |
And it's just survived an amazing thing,
link |
which was the Chinese shutting down mining
link |
and shutting down everything.
link |
And still here we are, in fact, cryptos thriving.
link |
What we don't know is how much damage
link |
ill judged regulatory interventions
link |
are going to do to this financial revolution.
link |
Left to its own devices,
link |
I think decentralized finance provides
link |
the native monitoring financial system for the internet.
link |
And the more time we spend in the metaverse,
link |
the more use we will make of it.
link |
The next things that will happen,
link |
I think will be that tokens in game spaces
link |
like Roblox will become fungible.
link |
As my nine year old spends a lot more time
link |
playing on computer games than I ever did,
link |
I can see that entertainment is becoming
link |
a game driven phenomenon.
link |
And in the game space, you need skins for your avatar.
link |
The economics of the internet, it's evolving very fast.
link |
you can see this payments revolution happening.
link |
I think that all goes naturally very well
link |
and generates an enormous amount
link |
of wealth in the process.
link |
The problem is there are people in Washington
link |
with an overwhelming urge to intervene
link |
and disrupt this evolutionary process.
link |
Partly, I think out of a muddled sense
link |
that there must be a lot of nefarious things going on.
link |
If we don't step in, many more will go on.
link |
This, I think greatly exaggerates
link |
how much criminal activity is in fact going on in the space.
link |
But there's also the vested interests at work.
link |
It was odd to me, maybe not odd,
link |
perhaps it wasn't surprising
link |
that the Bank for International Settlements earlier this year
link |
published a report, one chapter of which said,
link |
this must all go, must all stop.
link |
It's all got to be shut down
link |
and it's got to be replaced by central bank digital currency.
link |
And Martin Wolf in the Financial Times read this
link |
and said, I agree with this.
link |
And once only realized that the banks are clever.
link |
They had achieved the intellectual counterattack
link |
with almost no fingerprints on the weapon.
link |
I think central bank digital currency is a terrible idea.
link |
I can't imagine why we would want to copy a Chinese model
link |
that essentially takes all transactions
link |
and puts them directly under the surveillance
link |
of a central government institution.
link |
But that suddenly is a serious counter proposal.
link |
So on the one side, we have a relatively decentralized,
link |
technologically innovative, internet native system
link |
of payments that has the possibility to evolve,
link |
to produce a full set of smart contracts,
link |
reducing enormously the transaction costs
link |
that we currently encounter in the financial world
link |
because it gets rid of all those middlemen
link |
who take their cart every time you take out a mortgage
link |
or whatever it is.
link |
That's one alternative.
link |
But on the other side, we have a highly centralized system
link |
in which transactions will by default
link |
be under the surveillance of the central bank.
link |
Seems like an easy choice to me,
link |
but hey, I have this thing about personal liberty.
link |
So that's where we are.
link |
I don't think that the regulators can kill Web3.
link |
I think we're supposed to call it Web3
link |
because crypto is now an obsolescent term.
link |
They can't kill it, but they can definitely make it difficult.
link |
And throw a lot of sand into the machine.
link |
And I think worst of all,
link |
they can spoil the evolutionary story
link |
by creating central bank digital currency
link |
that I don't think we really need.
link |
Or we certainly don't need it in the Chinese form.
link |
So do you think Bitcoin has a strong chance
link |
to take over the world?
link |
So become the primary.
link |
You mentioned the three things that make money money.
link |
Become the primary methodology
link |
by which we store wealth, we exchange.
link |
No, I think what Bitcoin is,
link |
this was a phrase that I got from my friend Matt McClennan,
link |
first eagle, an option on digital gold.
link |
So it's the gold of the system,
link |
but currently behaves like an option.
link |
That's why it's quite volatile.
link |
Because we don't really know if this brave new world
link |
of crypto is gonna work.
link |
But if it does work, then Bitcoin is the gold
link |
because of the finite supply.
link |
What role we need gold to play
link |
in the metaverse isn't quite clear.
link |
I love that you're using the term metaverse, this is great.
link |
Well, I just like the metaversity as a kind of,
link |
as the antithesis of what we're trying to do in Austin.
link |
But can you imagine I'm using it sarcastically?
link |
I come from Glasgow where all novel words
link |
have to be used sarcastically.
link |
So the metaverse sarcastically.
link |
But see the beauty about humor and sarcasm
link |
is that the joke becomes reality.
link |
I mean, it's like using the word big bang
link |
to describe the origins of the universe.
link |
It becomes like that.
link |
After a while, it's in the textbooks
link |
and nobody's laughing.
link |
Well, that's exactly right.
link |
I'm on the side of humor,
link |
but it is a dangerous activity these days.
link |
Anyway, I think Bitcoin is the option of digital gold.
link |
The role it plays is probably not so much story value.
link |
Right now, it's just nicely not very correlated asset
link |
in your portfolio.
link |
When I updated the Ascent of Money,
link |
which was in 2018, 10 years after it came out,
link |
I wrote a new chapter in which I said,
link |
Bitcoin, which had just sold off after its 2017 bubble
link |
will rise again through adoption.
link |
Because if every millionaire in the world has 0.2%
link |
of his or her wealth in Bitcoin,
link |
the price should be $15,000.
link |
If it's 1%, it's $75,000.
link |
And it might not even stay at 1%
link |
because, I mean, look at its recent performance.
link |
If your exposure to global stocks
link |
had been hedged with a significant crypto holding,
link |
you would have aced the last few months.
link |
So I think the noncorrelation property
link |
is very, very important in driving adoption.
link |
And the volatility also drives adoption
link |
if you're a sophisticated investor.
link |
So I think the adoption drives Bitcoin up
link |
because it's the option of digital gold.
link |
But it's also just this nicely not very correlated asset
link |
that you wanna hold.
link |
In a world where the hell, I mean,
link |
the central bank is gonna tighten.
link |
We've come through this massively disruptive episode
link |
of the pandemic, public debt soared,
link |
money printing soared.
link |
You could hang around with your bonds
link |
and wait for the euthanasia of the Rontier.
link |
You can hang on to your tech stocks
link |
and just hope there isn't a massive correction or dot, dot,
link |
Well, and it seems like a fairly obvious strategy
link |
to make sure that you have at least some crypto
link |
for the coming year, given what we likely have to face.
link |
I think what's really interesting
link |
is that on top of Ethereum,
link |
a more elaborate financial system is being built.
link |
Stable coins are the interesting puzzle for me
link |
because we need off ramps.
link |
Ultimately, you and I have to pay taxes in US dollars.
link |
And there's no getting away from that.
link |
The IRS is gonna let us hold crypto as long as we pay our taxes.
link |
And the only question in my mind is,
link |
what's the optimal off ramp to make those taxes,
link |
make those tax payments?
link |
Probably it shouldn't be a currency invented by Facebook.
link |
Never struck me as the best solution to this problem.
link |
Maybe it's some kind of Fed coin
link |
or maybe one of the existing algorithmic stable coins
link |
does the job, but we clearly need some stable off ramp.
link |
So you don't think it's possible for the IRS
link |
within the next decade to be accepting
link |
Bitcoin as tax payments?
link |
Having dealt with the IRS now,
link |
since when did I first come here, 2002?
link |
It's hard to think of an institution less likely
link |
to leap into the 21st century when it comes to payments.
link |
No, I think we'll be tolerated,
link |
the crypto world will be tolerated
link |
as long as we pay our taxes.
link |
And it's important that we're already at that point.
link |
And then the next question becomes,
link |
well, does Gary Gensler define everything as a security?
link |
And do we then have to go through
link |
endless regulatory contortions to satisfy the SEC?
link |
There's a whole bunch of uncertainties
link |
that the administrative state excels at creating,
link |
because that's just how the administrative state works.
link |
You're doing something new.
link |
Hmm, I'll decide whether that's a security,
link |
but don't expect me to define it for you.
link |
I'll decide in an arbitrary way,
link |
and then you'll owe me money.
link |
So all of this is going to be very annoying.
link |
And for people who are trying to run exchanges
link |
or innovate in the space,
link |
these regulations will be annoying.
link |
But the problem with fintech is it's different from tech,
link |
When tech got into eCommerce with Amazon,
link |
when it got into social networking with Facebook,
link |
there wasn't a huge regulatory jungle to navigate,
link |
but welcome to the world of finance,
link |
which has always been a jungle of regulation,
link |
because the regulation is there to basically
link |
entrench the incumbents, that's what it's for.
link |
So it'll be a much tougher fight
link |
than the fights we've seen of other aspects
link |
of the tech revolution,
link |
because the incumbents are there and they see the threat.
link |
And in the end, Satoshi said it very explicitly.
link |
It's peer to peer payment
link |
without third party verification.
link |
And all the third parties are going, wait, what?
link |
What are the third parties?
link |
So there is a connection between power and money.
link |
You've mentioned World War I from the perspective of money.
link |
So power, money, war, authoritarian regimes.
link |
From the perspective of money,
link |
do you have hope that cryptocurrency can help resist war,
link |
can help resist the negative effects
link |
of authoritarian regimes, or is that a silly hope?
link |
Wars happen because the people
link |
who have the power to command armed forces miscalculate.
link |
Miscalculate, that's generally what happens.
link |
And we will have a big war in the near future
link |
if both the Chinese government
link |
and the US government miscalculates
link |
and they unleash lethal force on one another.
link |
And there's nothing that any financial institution can do
link |
to stop that any more than the Rothschilds
link |
could stop World War I.
link |
And they were then the biggest bank in the world by far
link |
with massive international financial influence.
link |
So let's accept that war is in a different domain.
link |
War would impact the financial world massively
link |
if it were a war between the United States and China
link |
because there's still a huge China trade on.
link |
Wall Street is long China, Europe is long China.
link |
So the conflict that I could foresee in the future
link |
is one that's highly financially disruptive.
link |
Where does crypto fit in?
link |
Crypto's obvious utility in the short run
link |
is as a store of wealth, of transferable wealth
link |
for people who live in dangerous places
link |
with failing, not just failing money,
link |
but failing rule of law.
link |
That's why in Latin America,
link |
there's so much interest in crypto
link |
because Latin Americans have a lot of monetary history
link |
to look back on and not much of it is good.
link |
So I think that the short run problem that crypto solves
link |
is, and this goes back to the digital gold point,
link |
if you are in a dangerous place with weak rule of law
link |
and weak property rights,
link |
here is a new and better way to have portable wealth.
link |
I think the next question to ask is
link |
would you want to be long crypto
link |
in the event of World War III?
link |
What's interesting about that question
link |
is that World War III would likely have
link |
a significant cyber dimension to it.
link |
And I don't wanna be 100% in crypto
link |
if they crash the internet,
link |
which between them China and Russia might be able to do.
link |
That's a fascinating question,
link |
whether you want to be holding physical gold
link |
or digital gold in the event of World War III.
link |
The smart person who studied history
link |
definitely wants better both.
link |
And so let's imagine World War III
link |
has a very, very severe cyber component to it
link |
with high levels of disruption.
link |
Yeah, you'd be glad of the old Chinese stuff at that point.
link |
So diversification still seems like the most important truth
link |
of financial history.
link |
And what is crypto?
link |
It's just this wonderful new source of diversification.
link |
But you would be nuts to be 100% in Bitcoin.
link |
I mean, I have some friends
link |
who are probably quite close to that.
link |
I admire the balls of steel.
link |
Yeah, in whatever way that balls of steel takes form.
link |
You mentioned smart contracts.
link |
What are your thoughts about,
link |
in the context of the history of money,
link |
about Ethereum, about smart contracts,
link |
about kind of more systematic at scale formalization
link |
of agreements between humans?
link |
I think it must be the case
link |
that a lot of the complexity in a mortgage is redundant.
link |
That when we are confronted with pages and pages
link |
and pages and pages of small prints,
link |
we're seeing some manifestation
link |
of the late stage regulatory state.
link |
The transaction itself is quite simple.
link |
And most of the verbiage is just ass covering by regulators.
link |
So I think the smart contract,
link |
although I'm sure lawyers will email me
link |
and tell me I'm wrong,
link |
can deal with a lot of the plain vanilla
link |
and maybe not so plain transactions that we want to do
link |
and eliminate yet more intermediaries.
link |
That's my kind of working assumption.
link |
And given that a lot of financial transactions
link |
have the potential at least to be simplified,
link |
automated, turned into smart contracts,
link |
that's probably where the future goes.
link |
I can't see an obvious reason why my range
link |
of different financial needs,
link |
let's think about insurance for example,
link |
will continue to be met with instruments
link |
that in some ways are 100 years old.
link |
So I think we're still at an early stage
link |
of a financial revolution that will greatly streamline
link |
how we take care of all those financial needs that we have,
link |
mortgages and insurance leap to mind.
link |
You know, most households are penalized
link |
for being financially poorly educated
link |
and confronted with oligopolistic
link |
financial services providers.
link |
So you kind of leave college already in debt.
link |
So you start in debt servitude.
link |
And then you gotta somehow lever up to buy a home if you can,
link |
because everybody's kind of telling you you should do that.
link |
So you and your spouse, you are getting even more leveraged
link |
and you're long one asset class called real estate,
link |
which is super illiquid.
link |
I mean, already I'm crying inside
link |
at the thought of describing so many households,
link |
financial predicament in that way.
link |
And I'm not done with them yet because oh, by the way,
link |
there's all this insurance you have to take out.
link |
And here are the providers that are willing to insure you
link |
and here are the premiums you're gonna be paying,
link |
which are kind of presented to you.
link |
That's your car insurance, that's your home insurance.
link |
And if you're here, it's the earthquake insurance.
link |
And pretty soon you're just bleeding money
link |
in a bunch of monthly payments to the mortgage lender,
link |
to the insurer, to all the other people that lent you money.
link |
And let's look at your balance sheet, it sucks.
link |
You know, there's this great big chunk of real estate
link |
and what else have you really got on there?
link |
And the other side is a bunch of debt,
link |
which is probably paying too high interest.
link |
The typical household in the median kind of range
link |
is at the mercy of oligopolistic financial services providers.
link |
Go down further in the social scale
link |
and people are outside the financial system altogether.
link |
And those poor folks have to rely on bank notes
link |
and informal lending with huge punitive rates.
link |
We have to do better.
link |
This has to be improved upon.
link |
And I think what's exciting about our time
link |
is that technology now exists,
link |
that didn't exist when I wrote the Ascent of Money
link |
to solve these problems.
link |
When I wrote the Ascent of Money, which is in 2008,
link |
you couldn't really solve the problem I've just described.
link |
Certainly you couldn't solve it
link |
with something like microfinance.
link |
That was obviously not viable,
link |
the interest rates were high,
link |
the transaction costs were crazy.
link |
But now we have solutions.
link |
And the solutions are extremely exciting.
link |
So Fintech is this great force for good
link |
that brings people into the financial system
link |
and reduces transaction costs.
link |
Crypto is part of it, but it's just part of it.
link |
There's a much broader story of Fintech going on here
link |
where suddenly you get financial services on your phone
link |
don't cost nearly as much as they did
link |
when there had to be a bricks and mortar building
link |
on Main Street that you kind of went humbly
link |
and beseeched to lend you money.
link |
I'm excited about that
link |
because it seems to me very socially transformative.
link |
I'll give you one other example of what's great.
link |
The people who really get sculpted
link |
in our financial system are senders
link |
and receivers of remittances,
link |
which are often amongst the poorest families in the world,
link |
the people who are like my wife's family in East Africa
link |
really kind of hand to mouth.
link |
And if you send money to East Africa
link |
or the Philippines or Central America,
link |
it's the transaction costs are awful.
link |
I'm talking to you, Western Union.
link |
We're gonna solve that problem.
link |
So 10 years from now,
link |
the transaction costs will just be negligible
link |
and the money will go to the people who need it
link |
rather than to rent seeking financial institutions.
link |
So I'm on the side of the revolution with this
link |
because I think the incumbent financial institutions
link |
globally are doing a pretty terrible job
link |
and middle class and lower class families lose out.
link |
And thankfully technology allows us to fix this.
link |
Yeah, so fintech can remove
link |
a lot of inefficiencies in the system.
link |
I'm super excited myself,
link |
maybe as a machine learning person in data oracles.
link |
So converting a lot of our physical world into data
link |
and have smart contracts on top of that.
link |
So that no longer is there's this fuzziness
link |
about what is the concrete nature of the agreements.
link |
You can tie your agreement to weather.
link |
You can tie your agreement to the behavior
link |
of certain kinds of financial systems.
link |
You can tie your behavior to, I don't know.
link |
I mean, all kinds of things.
link |
You can connect it to the body
link |
in terms of human sensory information.
link |
Like you can make an agreement
link |
that if you don't lose five pounds in the next month,
link |
you're going to pay me $1,000 or something like that.
link |
It's a stupid example, but it's not
link |
because you can create all kinds of services on top of that.
link |
You can just create all kinds of interesting applications
link |
that completely revolutionize how humans transact.
link |
I think, of course, we don't want to create a world
link |
of Chinese style social credit
link |
in which our behavior becomes so transparent
link |
to providers of financial services,
link |
particularly insurers,
link |
that when I try to go into the pub,
link |
I'm stopped from doing so.
link |
Every time you take a drink, your insurance goes up.
link |
Right, or my credit card won't work in certain restaurants
link |
because they serve ribeye steak.
link |
I fear that world because I see it being built in China.
link |
And we must, at all costs,
link |
make sure that the Western world has something distinctive
link |
It can't just be, oh, it's the same as in China,
link |
only the data go to five tech companies
link |
rather than to Xi Jinping.
link |
So I think that the way we need to steer this world
link |
is in the way that our data
link |
are, by default, vaulted on our devices.
link |
And we choose when to release the data
link |
rather than the default setting
link |
being that the data are available.
link |
That's important, I think,
link |
because it was one of the biggest mistakes
link |
of the evolution of the internet
link |
that in a way, the default was to let our data be plundered.
link |
It's hard to undo that, but I think we can at least
link |
create a new regime that, in future,
link |
makes privacy default rather than open access default.
link |
In the book, Doom, The Politics of Catastrophe,
link |
your newest book, you describe wars, pandemics,
link |
and the terrible disasters in human history,
link |
which stands out to you as the worst
link |
in terms of how much it shook the world
link |
and the human spirit.
link |
I am glad I was not around in the mid 14th century
link |
when the bubonic plague swept across Eurasia.
link |
As far as we can see, that was history's worst pandemic.
link |
Maybe there was a comparably bad one
link |
in the reign of the emperor, Justinian,
link |
but there's some reason to think it wasn't as bad.
link |
And the more we learn about the 14th century,
link |
the more we realize that it really was across Eurasia
link |
and that the mortality was 30% in some places, 50%
link |
in some places higher, there were whole towns
link |
that were just emptied.
link |
And when one reads about the Black Death,
link |
it's an unimaginable nightmare of death
link |
and madness in the death with flagellant orders
link |
wandering from town to town,
link |
seeking to ward off divine retribution
link |
by flogging themselves,
link |
people turning on the local Jewish communities
link |
as if it's somehow their fault.
link |
That must have been a nightmarish time.
link |
If you asked me for a Nolso ran and runner up,
link |
it would be World War II in Eastern Europe.
link |
And in many ways, it might have been worse
link |
because for a medieval peasant,
link |
the sense of being on the wrong side of divine retribution
link |
must have been overpowering.
link |
In the mid 20th century,
link |
you knew that this was manmade murder
link |
on a massive industrial scale.
link |
If one reads Brosman's Life and Fate,
link |
just to take one example,
link |
one enters a hellscape that it's extremely hard
link |
to imagine oneself in.
link |
So these are two of the great disasters of human history.
link |
And if we did have a time machine,
link |
if one really were able to transport people back
link |
and give them a glimpse of these times,
link |
I think the post traumatic stress would be enormous.
link |
People would come back from those trips,
link |
even if it was a one day excursion
link |
with guaranteed survival in a state of utter shock.
link |
You often explore counterfactual and hypothetical history,
link |
which is a fascinating thing to do,
link |
sometimes to a controversial degree.
link |
And again, you walk through that fire gracefully.
link |
So let me ask maybe about World War II
link |
or in general, what key moments in history
link |
of the 20th century,
link |
do you think if something else happened at those moments,
link |
we could have avoided some of the big atrocities?
link |
Stalin's Hall of More, Hitler's Holocaust,
link |
Mao's Great Chinese Famine?
link |
The great turning point in world history
link |
is August the 2nd, 1914,
link |
when the British cabinet decides to intervene
link |
and what would have been a European war becomes a world war.
link |
And with British intervention,
link |
it becomes a massively larger and more protracted conflict.
link |
So very early in my career,
link |
I became very preoccupied with the deliberations on that day
link |
and the surprising decision that a liberal cabinet took
link |
to go to war, which you might not have bet on that morning
link |
because there seemed to be a majority of cabinet members
link |
who would be disinclined and only a minority,
link |
including Winston Churchill, who wanted to go to war.
link |
So that's one turning point.
link |
I often wish I could get my time machine working
link |
and go back and say, wait, stop.
link |
Just think about what you're going to do.
link |
And by the way, let me show you a video of Europe in 1918.
link |
Can we linger on that one? That one,
link |
a lot of people push back on you on in the,
link |
because it's so difficult.
link |
So the idea is, if I could try to summarize,
link |
and you're the first person that made me think
link |
about this very uncomfortable thought,
link |
which is the ideas in World War I,
link |
it would be a better world if Britain stayed out of the war
link |
Thinking now, in retrospect,
link |
at the whole story of the 20th century,
link |
thinking about Stalin's rule of 30 years,
link |
thinking about Hitler's rise to power
link |
and the atrocities of the Holocaust,
link |
but also, like you said, on the Eastern Front,
link |
the death of tens of millions of people through the war.
link |
And also sort of the political prisoners
link |
and the suffering connected to communism,
link |
connected to fascism, all those kinds of things.
link |
Well, that's one heck of an example
link |
of why you're just like fearless
link |
in this particular style of exploring counterfactual history.
link |
So can you elaborate on that idea
link |
and maybe why this was such an important day
link |
This argument was central to my book, The Pity of War.
link |
I also did an essay in virtual history about this.
link |
And it's always amused me that from around that time,
link |
I began to be called a conservative historian
link |
because it's actually a very left wing argument.
link |
The people in 1914 who thought Britain should stay at the war
link |
were the left of the Labour Party,
link |
who split to become the independent Labour Party.
link |
What would have happened?
link |
Well, first of all,
link |
Britain was not ready for war in 1914.
link |
There had not been conscription.
link |
The army was tiny.
link |
So Britain had failed to deter Germany.
link |
The Germans took the decision
link |
that they could risk going through Belgium
link |
using the Schlieffen Plan to fight their two front war.
link |
They calculated that Britain's intervention
link |
would either not happen or not matter.
link |
If Britain had been strategically committed
link |
to preventing Germany winning a war in Europe,
link |
they should have introduced conscription 10 years before,
link |
had a meaningful land army,
link |
and that would have deterred the Germans.
link |
So the Liberal government provided the worst of both worlds,
link |
a commitment that was more or less secret to intervene
link |
that the public didn't know about.
link |
In fact, much of the Liberal Party didn't know about,
link |
but without really the means
link |
to make that intervention effective,
link |
a tiny army with just a few divisions.
link |
So it was perfectly reasonable to argue
link |
as a number of people did on August the 2nd, 1914,
link |
that Britain should not intervene.
link |
After all, Britain had not immediately intervened
link |
against the French Revolutionary armies back in the 1790s.
link |
It had played an offshore role, ultimately intervening,
link |
but not immediately intervening.
link |
If Britain had stayed out,
link |
I don't think that France would have collapsed immediately
link |
as it had in 1870.
link |
The French held up remarkably well
link |
to catastrophic casualties
link |
in the first six months of the First World War.
link |
But by 1916, I don't see how France could have kept going
link |
if Britain had not joined the war.
link |
And I think the war would have been over perhaps
link |
at some point in 1916.
link |
We know that Germany's aims
link |
would have been significantly limited
link |
because they would have needed to keep Britain out.
link |
If they'd succeeded in keeping Britain out,
link |
they'd have had to keep Britain out.
link |
And the way to keep Britain out
link |
was obviously not to make any annexation of Belgium,
link |
to limit German war aims,
link |
particularly to limit them to Eastern Europe.
link |
And from Britain's point of view,
link |
what was not to like?
link |
So the Russian Empire is defeated along with France.
link |
What does that really change?
link |
If the Germans are sensible
link |
and we can see what this might have looked like,
link |
they focus on Eastern Europe.
link |
They take chunks of the Russian Empire,
link |
perhaps they create as they did
link |
in the piece of Brestletovsk,
link |
an independent or quasi independent Poland.
link |
In no way does that pose a threat to the British Empire.
link |
In fact, it's a good thing.
link |
Britain never had had a particularly good relationship
link |
with the Russian Empire after all.
link |
The key point here is that the Germany
link |
that emerges from victory in 1916
link |
has a kind of European Union.
link |
It's the dominant power of an enlarged Germany
link |
with a significant Middle Europa,
link |
whatever you want to call it,
link |
a customs union type arrangement with neighboring countries,
link |
including one suspects Austria Hungary.
link |
That is a very different world from the world of 1917, 18.
link |
The protraction of the war for a further two years,
link |
its globalization,
link |
which Britain's intervention made inevitable.
link |
As Philip Zelikow showed in his recent book
link |
on the failure to make peace in 1916,
link |
Woodrow Wilson tried and failed to intervene
link |
and broke a peace in 1916.
link |
So I'm not the only counterfactualist here.
link |
The extension of the war for a further two years
link |
with escalating slaughter, the death toll rose
link |
because the industrial capacity of the armies grew greater.
link |
That's what condemns us to the Bolshevik Revolution.
link |
And it's what condemns us ultimately to Nazism,
link |
because it's out of the experience of defeat in 1918
link |
as Hitler makes clear in mind camp
link |
that he becomes radicalized and enters the political realm.
link |
Take out those additional years of war
link |
and Hitler's just a failed artist.
link |
It's the end of the war that turns him into the demagogue.
link |
You asked what are the things
link |
that have all avoid the totalitarian states?
link |
As I've said, British non intervention for me
link |
is the most plausible
link |
and it takes out all of that malignant history
link |
that follows from the Bolshevik Revolution.
link |
It's very hard for me to see how Lenin gets anywhere
link |
if the war is over.
link |
That looks like the opportunity
link |
for the constitutional elements,
link |
the liberal elements in Russia.
link |
There are other moments at which you can imagine history
link |
taking a different path, if the provisional government
link |
in Russia had been more ruthless,
link |
it was very lenient towards the Bolsheviks,
link |
but if it had just rounded them up
link |
and shot the Bolshevik leadership,
link |
that would have certainly cut the Bolshevik Revolution off.
link |
One looks back on the conduct of the Russian liberals
link |
with the kind of despair at their failure
link |
to see the scale of the threat that they face
link |
and the ruthlessness that the Bolshevik leadership
link |
There's a counterfactual in Germany, which is interesting.
link |
I think the Weimar Republic destroyed itself
link |
into disastrous economic calamities,
link |
the inflation and then the deflation.
link |
It's difficult for me to imagine Hitler
link |
getting to be Reich Chancellor
link |
without those huge economic disasters.
link |
So another part of my early work explored
link |
alternative policy options that the German Republic,
link |
the Weimar Republic might have pursued.
link |
There are other contingencies that spring to mind.
link |
In 1936 or 38, I think more plausibly, 38,
link |
Britain should have gone to war.
link |
The great mistake was Munich.
link |
Hitler was in an extremely vulnerable position in 1938,
link |
because remember, he didn't have Russia squared away
link |
as he would in 1939.
link |
Chamberlain's mistake was to fold
link |
instead of going for war as Churchill rightly saw.
link |
And there was a magical opportunity there
link |
that would have played into the hands
link |
of the German military opposition and conservatives
link |
to snuff Hitler out over Czechoslovakia.
link |
The point is that history is not some inexorable narrative,
link |
which can only end one way.
link |
It's a garden of forking paths
link |
and many, many junctions in the road
link |
that were choices that could have averted
link |
the calamities of the mid 20th century.
link |
I have to ask you about this moment
link |
before you said I could go on.
link |
This moment of Chamberlain and Snuff Hitler out
link |
in terms of Czechoslovakia,
link |
and we'll return to the book Doom on this point.
link |
What does it take to be a great leader
link |
in the room with Hitler,
link |
or in the same time and space as Hitler
link |
to snuff him out, to make the right decisions?
link |
So it sounds like you put quite a bit
link |
of a blame on the man, Chamberlain,
link |
and give credit to somebody like a Churchill.
link |
So what is the difference?
link |
Where's that line?
link |
You've also written a book about Henry Kissinger,
link |
who was an interesting sort of person
link |
that's been throughout many difficult decisions
link |
in the games of power.
link |
So what does it take to be a great leader in that moment?
link |
That particular moment, sorry to keep talking,
link |
is fascinating to me,
link |
because it feels like it's man on man conversations
link |
that define history.
link |
Well, Hitler was bluffing.
link |
He really wasn't ready for war in 1938.
link |
The German economy was clearly not ready for war in 1938.
link |
And Chamberlain made a fundamental miscalculation,
link |
along with his advisors,
link |
because it wasn't all Chamberlain.
link |
He was, in many ways, articulating the establishment view.
link |
And I tried to show in a book called War of the World,
link |
how that establishment worked.
link |
It extended through the BBC,
link |
into the aristocracy, to Oxford.
link |
There was an establishment view.
link |
Chamberlain personified it.
link |
Churchill was seen as a warmonger.
link |
He was at his lowest point of popularity in 1938.
link |
But what is it that Chamberlain gets wrong?
link |
Because it's conceptual.
link |
Chamberlain is persuaded that Britain has to play for time,
link |
because Britain is not ready for war in 1938.
link |
He fails to see that the time that he gets,
link |
that he buys at Munich, is also available to Hitler.
link |
Everybody gets the time.
link |
And Hitler's able to do much more with it,
link |
because Hitler strikes the pact with Stalin,
link |
that guarantees that Germany can fight
link |
a war on one front in 1939.
link |
What does Chamberlain do?
link |
Builds some more aircraft.
link |
So the great mistake of the strategy of appeasement
link |
was to play for time.
link |
I mean, they knew war was coming,
link |
but they were playing for time,
link |
not realizing that Hitler got the time too.
link |
And after he partitioned Czechoslovakia,
link |
he was in a much stronger position,
link |
not least because of all the resources
link |
that they were able to plunder from Czechoslovakia.
link |
So that was the conceptual mistake.
link |
Churchill played an heroic role in pointing out
link |
this mistake and predicting accurately
link |
that it would lead to war on worse terms.
link |
What does it take?
link |
It takes distinct courage to be unpopular.
link |
And Churchill was deeply unpopular at that point.
link |
People would listen to him in the House of Commons
link |
in silence on one occasion.
link |
Lady Astor shouted, rubbish.
link |
So he went through a period of being hated on.
link |
The other thing that made Churchill a formidable leader
link |
was that he always applied history to the problem.
link |
And that's why he gets it right.
link |
He sees the historical problem much more clearly
link |
So I think if you go back to 1938,
link |
there's no realistic counterfactual
link |
in which Churchill's in government in 1938.
link |
You have to have France collapse
link |
for Churchill to come into government.
link |
But you can certainly imagine a Tory elite
link |
that's thinking more clearly about the likely dynamics.
link |
They haven't seen this, I guess, problem of conjecture
link |
to take a phrase from Kissinger,
link |
which is that whatever they're doing
link |
in postponing the war has the potential
link |
to create a worse starting point for the war.
link |
It would have been risky in 1938,
link |
but it was a way better situation than they ended up with
link |
in 1939, a year later.
link |
You asked about Kissinger and I've learned a lot
link |
from reading Kissinger and talking to Kissinger
link |
since I embarked on writing his biography
link |
great many years ago.
link |
I think one of the most important things I've learned
link |
is that you can apply history to contemporary problems.
link |
It may be the most important tool that we have
link |
in that kind of decision making.
link |
You have to do it quite ruthlessly and rigorously.
link |
And in the moment of crisis, you have to take risk.
link |
So Kissinger often says in his early work,
link |
the temptation of the bureaucrat is to wait for more data,
link |
but ultimately the decision making
link |
that we do under uncertainty can't be based on data.
link |
The problem of conjecture is that you could take an action
link |
now and incur some cost, an avert disaster,
link |
but you'll get no thanks for it
link |
because nobody is grateful for an averted disaster.
link |
And nobody goes around saying,
link |
wasn't it wonderful how we didn't have another 911?
link |
On the other hand, you can do nothing
link |
incur no upfront costs and hope for the best.
link |
And you might get lucky the disaster might not happen.
link |
That's in a democratic system,
link |
the much easier path to take.
link |
And I think that the essence of leadership is to be ready
link |
to take that upfront cost, avert the disaster
link |
and accept that you won't get gratitude.
link |
If I may make a comment and a side about Henry Kissinger.
link |
So he, I think at 98 years old currently,
link |
has still got it, he's brilliant.
link |
It's very, very impressive.
link |
I can only hope that my brain has the same durability
link |
that his does because it's a formidable intellect
link |
and it's still in as sharp form as it was 50 years ago.
link |
So you mentioned Eric Schmitz in his book.
link |
They reached out to me, they didn't want to do this podcast.
link |
And I know Eric Schmit, I've spoken to him before,
link |
I like him a lot, obviously.
link |
So they said, we could do a podcast for 40 minutes with Eric,
link |
40 minutes with Eric and Henry together
link |
and 40 minutes with Henry.
link |
So there's a three different conversations.
link |
And I had to like, I had to do some soul searching
link |
because I said, fine, 40 minutes with Eric,
link |
we'll probably talk many times again.
link |
Fine, let's talk about this AI book together for 40 minutes.
link |
But I said, what I wrote to them is that I would hate myself
link |
if I only have 40 minutes to talk to Henry Kissinger.
link |
And so I had to hold my ground, went back and forth
link |
and in the end decided to part ways over this.
link |
And I sometimes think about this kind of difficult decision
link |
in the podcasting space of when do you walk away?
link |
Because there's a particular world leader
link |
that I've mentioned in the past
link |
where the conversation is very likely to happen.
link |
And as it happens, those conversations could often be,
link |
you know, unfortunately, this person only has 30 minutes now.
link |
I know we agreed for three hours, but unfortunately,
link |
and you have to decide, do I stand my ground on this point?
link |
I suppose that's the thing that journalists
link |
have to think about, right?
link |
Like, do I hold on to my integrity
link |
in whatever form that takes and do I stay my ground
link |
even if I lose a fascinating opportunity?
link |
Anyway, it's something I thought about
link |
and something I think about.
link |
And with Henry Kissinger, I mean,
link |
he's had a million amazing conversations in your biography
link |
so it's not like something is lost,
link |
but it was still nevertheless to me some soul searching
link |
that had to do as a kind of practice
link |
for what to me is a higher stakes conversation.
link |
I'll just mention is Vladimir Putin,
link |
I can have a conversation with him
link |
unlike any conversation he's ever had,
link |
partially because I'm a fluent Russian speaker,
link |
partially because I'm messed up in the head
link |
in certain kinds of ways
link |
that make for an interesting dynamic
link |
because we're both judo people,
link |
we're both are certain kinds of human beings
link |
that can have a much deeper apolitical conversation.
link |
I have to ask to stay on the topic of leadership.
link |
You've in your book, Doom,
link |
have talked about wars, pandemics throughout human history
link |
and in some sense saying that all of these disasters
link |
So humans have a role in terms of the magnitude
link |
of the effect that they have on human civilization.
link |
Without taking cheap political shots,
link |
can we talk about COVID 19?
link |
How will history remember the COVID 19 pandemic?
link |
What were the successes, what were the failures
link |
of leadership of man, of humans?
link |
Doom was a book that I was planning to write
link |
before the pandemic struck as a history of the future
link |
based in large measure on science fiction.
link |
It had occurred to me in 2019
link |
that I had spent too long not reading science fiction
link |
and so I decided I would liven up my intake
link |
by getting off history for a bit and reading science fiction.
link |
Because history is great at telling you
link |
about the perennial problems of power.
link |
Putin is always interesting on history.
link |
He's become something of a historian recently
link |
with his essays and lectures.
link |
But what history is bad at telling you is,
link |
well, what will the effects of discontinuity
link |
And so I thought I need some science fiction
link |
to think more about this
link |
because I'm tending to miss the importance
link |
of technological discontinuity.
link |
If you read a lot of science fiction,
link |
you read a lot of plague books
link |
because science fiction writers
link |
are really quite fond of the plague scenario.
link |
So the world ends in many ways in science fiction
link |
but one of the most popular is the lethal pandemic.
link |
So when the first email came to me,
link |
I think it was on January the third
link |
from my medical friend Justin Stepping,
link |
funny pneumonia in Wuhan, my antennae began to tingle
link |
because it was just like one of those science fiction books
link |
that begins in just that way.
link |
In a pandemic, as Larry Brilliant,
link |
the epidemiologist said many years ago,
link |
the key is early detection and early action.
link |
That's how you deal with a novel pathogen.
link |
And almost no Western country did that.
link |
We know it was doable
link |
because the Taiwanese and the South Koreans did it
link |
and they did it very well.
link |
But really no Western country got this right.
link |
Some were unlucky because super spreader events
link |
happened earlier than in other countries.
link |
Italy was hit very hard very early.
link |
For other countries, the real disaster came quite late,
link |
Russia, which has only relatively recently
link |
had a really bad experience.
link |
The lesson for me is quite different
link |
from the one that most journalists
link |
thought they were learning last year.
link |
Most journalists last year thought,
link |
Trump is a terrible president.
link |
He's saying a lot of crazy things.
link |
It's his fault that we have high access mortality
link |
in the United States.
link |
The same argument was being made
link |
by journalists in Britain, Boris Johnson, dot, dot, dot,
link |
Brazil, Jair Bolsonaro, dot, dot, dot,
link |
even India, Narendra Modi, the same argument.
link |
And I think this argument is wrong in a few ways.
link |
It's true that the populist leaders
link |
said many crazy things.
link |
And, broadly speaking, gave poor guidance
link |
to their populations.
link |
But I don't think it's true to say
link |
that with different leaders,
link |
these countries would have done significantly better
link |
if Joe Biden had magically been president a year earlier.
link |
I don't think the US would have done much better
link |
because the things that caused access mortality last year
link |
weren't presidential decisions.
link |
They were utter failure of CDC to provide testing.
link |
That definitely wasn't Trump's fault.
link |
Scott Gottlieb's book makes that very clear.
link |
It's just been published recently.
link |
We utterly failed to use technology for contact tracing,
link |
which the Koreans did very well.
link |
We didn't really quarantine anybody seriously.
link |
There was no enforcement of quarantine.
link |
And we exposed the elderly to the virus
link |
as quickly as possible in elderly care homes.
link |
And these things had very little to do
link |
with presidential incompetence.
link |
So I think leadership is of somewhat marginal importance
link |
in a crisis like this, because what you really need
link |
is your public health bureaucracy to get it right.
link |
And very few Western public health bureaucracies got it right.
link |
Could the president have given better leadership?
link |
His correct strategy, however, was
link |
to learn from Barack Obama's playbook
link |
with the opioid epidemic.
link |
The opioid epidemic killed as many people on Obama's watch
link |
as COVID did on Trump's watch.
link |
And it was worse in the sense, because it only happened
link |
And each year, it killed more people than the year
link |
before, over eight years.
link |
Nobody, to my knowledge, has ever seriously blamed Obama
link |
for the opioid epidemic.
link |
Trump's mistake was to put himself front and center
link |
of the response to claim that he had some unique insight
link |
into the pandemic and to say, with every passing week,
link |
more and more foolish things.
link |
Until even a significant portion of people
link |
who'd voted for him in 2016 realized
link |
that he'd blown it, which was why he lost the election.
link |
The correct strategy was actually
link |
to make Mike Pence the pandemic star
link |
and get the hell out of the way.
link |
That's what my advice to Trump would have been, in fact,
link |
it was in February of last year.
link |
So the mistake was to try to lead.
link |
But actually, leadership in a pandemic
link |
is almost the contradiction in terms.
link |
What you really need is your public health bureaucracy
link |
not to fuck it up.
link |
And they really, really fucked it up.
link |
And that was then all blamed on Trump.
link |
You know, Jim Fallows writes a piece in The Atlantic that says,
link |
well, being the president's like flying a light aircraft,
link |
And I read that piece and I thought,
link |
does he really, after all the years he's spent writing,
link |
think that being president is like flying a light aircraft?
link |
I mean, it's really nothing like flying a light aircraft.
link |
Being president is you sit on top of a vast bureaucracy
link |
with how many different agencies, 60, 70,
link |
we've all lost count.
link |
And you're surrounded by advisors,
link |
at least a quarter of whom are saying,
link |
this is a disaster, we have to close the borders.
link |
And the others are saying, no, no, we have to keep the economy
link |
going, that's what you're running on in November.
link |
So being a president in a pandemic
link |
is a very unenviable position.
link |
Because you actually can't, you can't really determine
link |
whether your public health bureaucracy will get it right
link |
You don't think to push back on that,
link |
it's just like being Churchill in a war is difficult.
link |
So leaving Trump a buy and a side,
link |
what I would love to see from a president
link |
is somebody who makes great speeches
link |
and arouses the public to push to bureaucracy,
link |
the public health bureaucracy, to get their shit together,
link |
to fire certain kinds of people.
link |
I mean, I'm sorry, but I'm a big fan of powerful speeches,
link |
especially in the modern age with the internet,
link |
it can really move people.
link |
Instead, the lack of speeches resulted
link |
in certain kinds of forces amplifying division
link |
over whether wear masks or not.
link |
It's almost like the public picked
link |
some random topic over which to divide themselves.
link |
And there was a complete indecision,
link |
which is really what it was fear of uncertainty
link |
materializing itself in some kind of division.
link |
And then you almost like busy yourself with the red versus
link |
blue politics, as opposed to some, I don't know,
link |
FDR type character just stands and say,
link |
fuck all this bullshit that we're hearing,
link |
we're going to manufacture five billion tests.
link |
This is what America is great at.
link |
We're going to build the greatest testing infrastructure
link |
ever built or something, or even with the vaccine development.
link |
But that was what I was about to interject.
link |
In a pandemic, the most important thing is the vaccine.
link |
If you get that right, then you should be forgiven
link |
And that was the one thing the Trump administration
link |
got right because they went around the bureaucracy
link |
with Operation Warp Speed and achieved
link |
a really major success.
link |
So I think the paradox of the 2020 story
link |
in the United States is that the one thing
link |
that mattered most, the Trump administration got right.
link |
And it got so much else wrong that was sort of marginal
link |
that we were left with the impression
link |
that Trump had been to blame for the whole disaster,
link |
which wasn't really quite right.
link |
Sure, it would have been great
link |
if we did Operation Warp Speed for testing,
link |
but ultimately vaccines are more important than tests.
link |
And this brings me to the question
link |
that you raised there of polarization
link |
and why that happened.
link |
Now, in a book called The Square and the Tower,
link |
I argued that it would be very costly for the United States
link |
to allow the public sphere to continue to be dominated
link |
by a handful of big tech companies
link |
that this ultimately would have more adverse effects
link |
than simply contested elections.
link |
And I think we saw over the past 18 months
link |
just how bad this could be because the odd thing
link |
about this country is that we came up with vaccines
link |
with 90 plus percent efficacy
link |
and about 20% of people refused to get them
link |
and still do refuse for reasons that seem best explained
link |
in terms of the anti vaccine network,
link |
which has been embedded on the internet
link |
for a long time predating the pandemic.
link |
Rene de Resta wrote about this pre 2020.
link |
And this anti vaccine network has turned out
link |
to kill maybe 200,000 Americans
link |
who could have been vaccinated
link |
but were persuaded through magical thinking
link |
that the vaccine was riskier than the virus.
link |
Whereas you don't need to be an epidemiology,
link |
don't need to be a medical scientist to know
link |
that the virus is about two orders
link |
of magnitude riskier than the vaccine.
link |
So again, leadership could definitely have been better
link |
but the politicization of everything
link |
was not Trump's doing alone.
link |
It happened because our public sphere has been dominated
link |
by a handful of platforms whose business model
link |
inherently promotes polarization,
link |
inherently promotes fake news and extreme views
link |
because those are the things that get the eyeballs
link |
and the screens and sell the ads.
link |
I mean, this is now a commonplace
link |
but when one thinks about the cost
link |
of allowing this kind of thing to happen,
link |
it's now a very high human cost.
link |
And we were foolish to leave uncorrected
link |
these structural problems in the public sphere
link |
that were already very clearly visible in 2016.
link |
And you described that like you mentioned
link |
that there's these networks that are almost like
link |
laying dormant, waiting for their time in the sun.
link |
And they stepped forward in this case.
link |
And that those network effects just the service catalyst
link |
for whatever the bad parts of human nature.
link |
I do hope that there's kinds of networks
link |
that emphasize the better angels of our nature
link |
to cause Steven Pinker.
link |
It's just clearly, and we know this
link |
from all the revelations of the Facebook whistleblower,
link |
there is clearly a very clear tension
link |
between the business model of a company like Facebook
link |
and the public good.
link |
And they know that.
link |
I just talked to the founder of Instagram.
link |
I, yes, that's the case, but it's not
link |
from a technology perspective,
link |
like absolutely true of any kind of social network.
link |
I think it's possible to build.
link |
Actually, I think it's not just possible.
link |
I think it's pretty easy if you set that as the goal
link |
to build social networks that don't have
link |
these negative effects.
link |
Right, but if the business model is we sell ads
link |
and the way you sell ads is to maximize user engagement,
link |
then the algorithm is biased in favor
link |
of fake news and extreme views.
link |
But it's not, so it's not the ads.
link |
A lot of people blame the ads.
link |
The problem I think is the engagement
link |
and the engagement is just the easiest,
link |
the dumbest way to sell the ads.
link |
I think there's much different metrics
link |
that could be used to make a lot more money
link |
than the engagement in the longterm.
link |
It has more to do with planning for the longterm.
link |
So optimizing the selling of ads
link |
to make people happy with themselves in the longterm
link |
as opposed to some kind of addicted, like dopamine feeling.
link |
And so that's, to me, that has to do with metrics
link |
and measuring things correctly
link |
and sort of also creating a culture
link |
with what's valued to have difficult conversations
link |
about what we're doing with society,
link |
all those kinds of things.
link |
And I think once you have those conversations,
link |
this takes us back to the University of Austin,
link |
kind of, once you have those difficult human conversations,
link |
you can design the technology
link |
that will actually make for help people grow,
link |
become the best version of themselves,
link |
help them be happy in the longterm.
link |
What gives you hope about the future?
link |
As somebody who studied some of the darker moments
link |
of human history, what gives you hope?
link |
A couple of things.
link |
First of all, the United States
link |
has a very unique operating system,
link |
which was very well designed by the founders
link |
who thought a lot about history
link |
and realized it would take quite a novel design
link |
to prevent the Republic going the way of all republics
link |
because republics tend to end up as tyrannies
link |
for reasons that were well established
link |
by the time of the Renaissance.
link |
And it gives me hope that this design has worked very well
link |
and withstood an enormous stress test,
link |
stress test in the last year.
link |
I became an American in 2018.
link |
I think one of the most important features
link |
of this operating system is that it is the magnet for talent.
link |
part of the immigration story.
link |
In a darkened room with funny accents.
link |
Scott and a Russian walk into a recording studio
link |
and talk about America.
link |
It's very much like a joke.
link |
And Elon's a South African and so on and Teal is a German.
link |
And we're extraordinarily fortunate
link |
that the natives let us come and play
link |
and play in a way that we could not in our countries of birth.
link |
And as long as the United States continues to exploit
link |
that superpower that it is the talent magnet,
link |
then it should out innovate
link |
the totalitarian competition every time.
link |
So that's one reason for being an optimist.
link |
Another reason, and it's quite a historical reason
link |
as you would expect from me.
link |
Another reason that I'm optimistic
link |
is that my kids give me a great deal of hope.
link |
They range in age from 27 down to four.
link |
But each of them in their different way
link |
seems to be finding a way through this crazy time of ours
link |
without losing contact with that culture and civilization
link |
I don't want to live in the metaverse
link |
as Mark Zuckerberg imagines it.
link |
To me, that's a kind of ghastly hell.
link |
I think Western civilization is the best civilization.
link |
And I think that almost all the truths
link |
about the human condition can be found
link |
in Western literature, art and music.
link |
And I think also that the civilization
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that produced the scientific revolution
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has produced the great problem solving tool
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that eluded the other civilizations
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that never really cracked science.
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And what gives me hope is that despite all the temptations
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and distractions that their generation had to contend with,
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my children and their different ways
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have found their way to literature and to art and to music.
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And they are civilized.
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And I don't claim much of the credit for that.
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I've done my best, but I think it's deeply encouraging
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that they found their way to the things
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that I think are indispensable for a happy life,
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Nobody, I think, can be truly fulfilled
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if they're cut off from the great body
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of Western literature, for example.
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I've thought a lot about Elon's argument
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that we might be in a simulation.
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No, no, there is a simulation, it's called literature.
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And we just have to decide whether or not to enter it.
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I'm currently in the midst of the later stages
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of Proust's great, a la recherche du temps perdu
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and Proust's observation of human relationships
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is perhaps more meticulous than that of any other writer.
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And it's impossible not to find yourself identifying
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with Marcel and his obsessive, jealous relationships,
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particularly with Albertine, it's the simulation.
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And you decide, I think, as a sentient being,
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how far to in your own life reenact
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these more profound experiences
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that others have written down.
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One of my earliest literary simulations
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was to reenact Jack Kerak's trip in On the Road
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when I was 17, culminating in getting very wasted
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in the hanging gardens of Zochimilco, not to be missed.
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And it hit me just as I was reading Proust.
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That's really how to live a rich life,
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that one lives life, but one lives it,
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juxtaposing one's own experience
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against the more refined experiences of the great writers.
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So it gives me hope that my children do that a bit.
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Do you include the Russian authors in the canon?
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Yes, I don't read Russian,
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but I was entirely obsessed with Russian literature
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I read my way through Dostoevsky, Tolstoy, Turgenev,
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I think of all of those writers, Tolstoy had the biggest impact,
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because at the end of War and Peace,
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there's this great essay on historical determinism,
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which I think was the reason I became a historian.
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But I'm really temperamentally a kind of Turgenev person,
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I think if you haven't read those novelists,
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I mean, you can't really be a complete human being
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if you haven't read the Brothers Karamazov.
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You're not really, you're not grown up.
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And so I think in many ways those are the greatest novels.
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Raskolnikov's, remember Raskolnikov's nightmare
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at the end of Crime and Punishment,
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in which he imagines, in his dream,
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a world in which a terrible virus spreads.
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Do you remember this?
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And this virus has the effect of making every individual think
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that what he believes is right.
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And in this self righteousness,
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people fall on one another and commit appalling violence.
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That's Raskolnikov's nightmare.
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And it's a prophecy.
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It's a terrible prophecy of Russia's future.
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Yeah, it's, in coupled with that,
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it's probably the, I also like the French,
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the existentialist, all that.
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The full spectrum in German's Harmon Hessen
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and just that range of human thought
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has expressed the literature is fascinating.
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I really love your idea that the simulation,
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like one way to live life
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is to kind of explore these other worlds
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and borrow from them wisdom
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that you then just map onto your own life.
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You're almost like stitched together your life
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with these kind of pieces from literature.
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The highly educated person is constantly struck by illusion.
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Everything is an illusion to something that one has read.
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And that is the simulation.
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That's what the real metaverse is.
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It's the imaginary world that we enter when we read, empathize,
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and then recognize in our daily lives
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some scrap of the shared experience that literature gives us.
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Yeah, I think I've aspired to be the idiot
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from Prince Mishkin from Dostoyevsky.
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And in aspiring to be that,
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I have become the idiot, I feel, at least in part.
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What, you mentioned the human condition,
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does love have to do?
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What role does it play in the human condition?
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Love is, this was the great Roxy Music line
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that Brian Ferry wrote.
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Love is the most powerful and dangerous of all the drugs.
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The driving force that overrides our reason.
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And of course, it is the primal.
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It's the primal urge.
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So what a civilized society has to do
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is to prevent that drug, that primal force from creating mayhem.
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So there have to be rules like monogamy
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and rituals like marriage that reign love in
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and make the addict at least more or less under control.
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I think that's part of why I'm a romantic
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rather than a Steve Penker Enlightenment rationalist
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because the romantics realize that love was the drug.
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It's like the difference in sensibility
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between Handel and Wagner.
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And I had a Wagnerian phase when I was an undergraduate.
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I still remember thinking that as old as Liebes told
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that Wagner had got the closest to sex
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that anybody had ever got in music or perhaps to love.
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I'm lucky that I love my wife
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and that we were, by the time we met, smart enough to understand
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that love is a drug that you have to kind of take
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in certain careful ways.
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And that it works best in the context of a stable family.
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That's the key thing.
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That one has to sort of take the drug
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and then submit to the conventions of marriage and family life.
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I think in that respect, I'm a kind of tamed romantic.
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That's how I'd like to think about it.
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And the degree to which your romanticism is tamed
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can be then channeled into productive work.
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That's why you're a historian and a writer.
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The rest of that love is channeled through the writing.
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So, if you're going to be addicted to anything,
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be addicted to work.
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I mean, we're all addictive,
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but the thing about workaholism
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is that it is the most productive addiction
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and rather that than drugs or booze.
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So, yes, I'm always trying to channel my anxieties into work.
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I learned that at a relatively early age,
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it's a sort of massively productive way of coping with the inner demons.
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And again, we should teach kids that
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because let's come back to our earlier conversation about universities.
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Part of what happens at university is that adolescents
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have to overcome all the inner demons.
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And these include deep insecurity
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about one's appearance, about one's intellect,
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and then madly raging hormones that cause you to behave
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like a complete fool with the people to whom you're sexually attracted.
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All of this is going on in the university.
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How can it be a safe space?
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It's a completely dangerous space, by definition.
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So, yeah, teaching young people how to manage these storms,
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that's part of the job and we're really not allowed to do that anymore
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because we can't talk about these things for fear of the title
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and iron offices kicking down the door and dragging us off in chains.
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And like you said, hard work and something you call work ethic
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in civilization is a pretty effective way to achieve,
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I think, a kind of happiness in a world that's full of anxiety.
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Or at least exhaustion.
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Well, there is beauty to the exhaustion.
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There's why running this manual work that some part of us has built for that.
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I mean, we are products of evolution
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and our adaptation to a technological world is a very imperfect one.
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So, hence the kind of masochistic urge to run.
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I'd like outdoor exercise.
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I don't really like gyms.
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So, I'll go for long punishing runs in woodland,
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I like swimming in lakes and in the sea
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because that just has to be that physical activity
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in order to do the good mental work.
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And so, it's all about trying to do the best work.
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That's my sense that we have some random allocation of talent.
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You kind of figure out what it is that you're relatively good at
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and you try to do that well.
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I think my father encouraged me to think that way.
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And you don't mind about being average at the other stuff.
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The kind of sick thing is to try to be brilliant at everything, I hate those people.
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You should really not worry too much if you're just an average double bass player,
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which I am, or kind of average skier, which I definitely am.
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Doing those things okay is part of leading a rich and fulfilling life.
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I was not a good actor, but I got a lot out of acting as an undergraduate.
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I turned out after three years of experimentation at Oxford that I was broadly speaking better
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at writing history essays than my peers.
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And that was my edge.
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That was my comparative advantage.
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And so, I've just tried to make a living from that slight edge.
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Yeah, that's a beautiful way to describe a life.
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Is there a meaning to this thing?
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Is there a meaning to life?
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What is the meaning of life?
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By a physicist and a physician, they were more or less committed atheists
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who had left the Church of Scotland as a protest against sectarianism in Glasgow.
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And so, my sister and I were told from an early age life was a cosmic accident.
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There was no great meaning to it.
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And I can't really get past that.
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Isn't there beauty to being an accident at a cosmic scale?
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Yes, I wasn't taught to feel negative about that.
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And if anything, it was a frivolous insight that the whole thing was a kind of joke.
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And I think that atheism isn't really a basis for ordering a society,
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but it's been all right for me.
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I don't have a kind of sense of a missing religious faith.
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For me, however, there's clearly some embedded Christian ethics in the way my parents lived.
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And so, we were kind of atheist Calvinists who had kind of deposed God
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but carried on behaving as if we were members of the elect in a moral universe.
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So, that's kind of the state of mind that I was left in.
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And I think that we aren't really around long enough to claim that our individual lives have meaning.
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But what Edmund Burke said is true.
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The real social contract is between the generations, between the dead, the living and the unborn.
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And the meaning of life is, for me at least, to live in a way that honors the dead,
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seeks to learn from their accumulated wisdom because they do still outnumber us.
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They outnumber the living by quite a significant margin.
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And then, to be mindful of the unborn and our responsibility to them,
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writing books is a way of communicating with the unborn.
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It may or may not succeed and probably won't succeed if my books are never assigned by work professors in the future.
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So, what we have to do is more than just write books and record podcasts.
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There have to be institutions.
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I realized recently that succession planning had to be the main focus of the next 20 years
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because there are things that I really care about that I want future generations to have access to.
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And so, the meaning of life, I do regard as being intergenerational transfer of wisdom.
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Ultimately, the species will go extinct at some point.
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Even if we do colonize Mars, one senses that physics will catch up with this particular organism,
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but it's in the pretty far distant future.
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And so, the meaning of life is to make sure that for as long as there are human beings,
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they are able to live the kind of fulfilled lives, ethically fulfilled, intellectually fulfilled, emotionally fulfilled lives,
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that civilization has made possible.
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It would be easy for us to revert to the uncivilized world.
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There's a fantastic book that I'm going to misremember.
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Milos is the captive mind, rather, which has a fantastic passage.
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He was a Polish intellectual who says,
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Americans can never imagine what it's like for civilization to be completely destroyed,
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as it was in Poland by the end of World War II, to have no rule of law,
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to have no security of even person, never mind property rights.
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They can't imagine what that's like and what it will lead you to do.
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So, one reason for teaching history is to remind the lucky Generation Z members of California that civilization is a thin film,
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and it can be destroyed remarkably easily.
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And to preserve civilization is a tremendous responsibility that we have.
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It's a huge responsibility.
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And we must not destroy ourselves, whether it's in the name of wokeism
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or the pursuit of the metaverse.
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Preserving civilization and making it available, not just to our kids,
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but to people we'll never know, generations ahead, that's the meaning.
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And do so by studying the lessons of history.
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Not only studying them, but then acting on them.
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For me, the biggest problem is how do we apply history more effectively?
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It seems as if our institutions, including government, are very, very bad at applying history.
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Lessons of history are learned poorly, if at all.
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Analogies are drawn crudely.
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Often the wrong inferences are drawn.
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One of the big intellectual challenges for me is how to make history more useful.
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And this was the kind of thing that professors used to hate, but really practically useful,
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so that policymakers and citizens can think about the decisions that they face with a more historically informed body of knowledge,
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whether it's a pandemic, the challenge of climate change, what to do about Taiwan.
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I can't think of a better set of things to know before you make decisions about those things
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than the things that history has to offer.
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Well, I love the discipline of applied history.
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Basically going to history and saying, what are the key principles here that are applicable to the problems of today?
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And how can we solve that?
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The great philosopher of history, R.G. Collingwood, said in his autobiography, which was published in 1939,
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that the purpose of history was to reconstitute past thought from whatever surviving remnants there were,
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and then to juxtapose it with our own predicament.
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And that's that juxtaposition of past experience with present experience that is so important.
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We don't do that well.
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And indeed, we've flipped it so that academic historians now think their mission is to travel back to the past with the value system of 2021
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and castigate the dead for their racism and sexism and transphobia and whatnot.
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And that's exactly wrong.
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Our mission is to go back and try to understand what it was like to live in the 18th century,
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not to go back and condescend to the people of the past.
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And once we've had a better understanding, once we've seen into their lives, read their words,
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tried to reconstitute their experience to come back and understand our own time better,
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that's what we should really be doing.
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But academic history has gone completely haywire and it does almost the exact opposite of what I think it should do.
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And by studying history, walk beautifully, gracefully through this simulation, as you described,
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by mapping the lessons of history into the world of today.
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We have virtual reality already in our heads.
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We do not need Oculus and the Metaverse.
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This was an incredible, hopeful conversation in many ways that did not expect.
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I thought our conversation would be much more about history than about the future and it turned out to be the opposite.
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Thank you so much for talking today. It's a huge honor to finally meet you, to talk to you.
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Thank you for your valuable time.
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Thank you, Lex, and good luck with Putin.
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Thanks for listening to this conversation with Neil Ferguson.
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To support this podcast, please check out our sponsors in the description.
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And now, let me leave you with some words from Neil Ferguson himself.
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No civilization, no matter how mighty it may appear to itself, is indestructible.
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Thank you for listening and hope to see you next time.