Niall Ferguson: History of Money, Power, War, and Truth | Lex Fridman Podcast #239
the following is a conversation with neil ferguson one of the great historians of our time at times controversial and always brilliant whether you agree with him or not he's an author of 16 books on topics covering the history of money power war pandemics and empire previously at harvard currently at stanford and today launching a new university here in austin texas called the university of austin a new institution built from the ground up to encourage open inquiry and discourse by both thinkers and doers from philosophers and historians to scientists and engineers embracing debate dissent and self-examination free to speak to disagree to think to explore truly novel ideas the advisory board includes stephen pinker jonathan height and many other amazing people with one exception me i was graciously invited to be on the advisory board which i accepted in the hope of doing my small part in helping build the future of education and open discourse especially in the fields of artificial intelligence robotics and computing we spend the first hour of this conversation talking about this new university before switching to talking about some of the darkest moments in human history and what they reveal about human nature this is the lex friedman podcast to support it please check out our sponsors in the description and now here's my conversation with neil ferguson you are one of the great historians of our time respected sometimes controversial you've flourished in some of the best universities in the world from nyu to london school of economics to harvard and now to hoover institution at stanford before we talk about the history of money war and power let us talk about a new university you're part of launching here in austin texas it is called university of austin uatx what is its mission its goals its plan i think it's pretty obvious to a lot of people in higher education that there's a problem and that problem manifests itself in a great many different ways but i would sum up the problem as being a drastic chilling of the atmosphere that constrains free speech free exchange even free thought and i had never anticipated that this would happen in my lifetime my academic career began in oxford in the 1980s when anything went one sensed that a university was a place where one could risk saying the unsayable and debate the undebatable so the fact that in a relatively short space of time a variety of ideas critical race theory or wokeism whatever you want to call a variety of ideas have come along that seek to limit and quite drastically limit what we can talk about strikes me as deeply unhealthy and i'm not sure and i've thought about this for a long time you can fix it with the existing institutions i think you need to create a new one and so after much deliberation we decided to do it and i think uh it's a hugely timely opportunity to do what people used to do in this country which was to create new institutions i mean that used to be the default setting of america we sort of stopped doing that i mean i look back and i thought why why why are there no new universities or at least if there are why do they have so little impact it seems like we have the billionaires we have the need let's do it so you still believe in institutions in the university in the ideal of the university i believe passionately in that ideal there's a reason they've been around for nearly a millennium there is a a unique thing that happens on a university campus when it's done right and that is the transfer of knowledge between generations that is a very sacred activity and it seems to withstand major changes in technology so this form that we call the university predates the printing press survive the printing press continue to function through the scientific revolution the enlightenment uh the industrial revolution to this day and i think it's because maybe because of evolutionary psychology we need to be together in one relatively confined space when we're in our late teens and early 20s for the knowledge transfer between the generations to happen that's my feeling about this but in order for it to work well there need to be very few constraints there needs to be a sense that one can take intellectual risk remember people in their late teens and early 20s are adults but they're inexperienced adults and if i look back on my own time as an undergraduate saying stupid things was my mo my way to finding good ideas was through a minefield of bad ideas i feel so sorry for my for people like me today people age 18 19 20 today who are uh intellectually very curious ambitious but inexperienced because the minefields today are absolutely lethal and you know one wrong food and it's cancellation i said this to peter thiel the other day imagine being asked now i mean we were obnoxious undergraduates there's nothing that peter did at stanford that andrew sullivan and i were not doing at oxford uh and perhaps we were even worse but it was so so not career ending to be to be an absolutely insufferable obnoxious undergraduate then today if we if we if people like us exist today they must live in a state of of constant anxiety that they're going to be outed for some heretical statement that they made five years ago on social media so part of what motivates me is that it's the desire to give uh the means of today a shot at free thinking and really i i'd call it uh aggressive learning learning where you're really pushed and i just think that stopped happening on the the major campuses because whether at harvard where i used to teach at stanford where i'm now based i i sense a kind of suffocating atmosphere of self-censorship that that means people are afraid to take even minimal risk in in class i mean just just take for example a survey that was published earlier this year that revealed this is of undergraduates in four-year programs in the us 85 percent of self-described liberal students said they would report a professor to the university administration if he or she said something they considered offensive and something like 75 said said they do it to a fellow undergraduate that's the kind of culture that's evolved in our universities so we need a new university in which none of that is true in which you can speak your mind say stupid things get it completely wrong and live to to tell the tale there's a lot more going on i think because when you start thinking about what's wrong with a modern university many many more things suggest themselves and i think there's an opportunity here to build something that's radically new in in some ways and radically traditional in other ways for example i have a strong preference for the tutorial system that you see at oxford and cambridge which is small group teaching and and highly socratic in its structure i think it'd be great to bring that to the united states where it doesn't really exist but at the same time i think we should be doing some very 21st century things making sure that while people are reading and studying classic works they're also going to be immersed in the real world of technological innovation a world that you know very well and i'd love to get a synthesis of the ancient and classical which we're gradually letting fade away with the novel and technological so we we want to produce people who can simultaneously talk intelligently about adam smith or for that matter shakespeare or proust and have a conversation with you about where a.i is going and how long it will be before i can get driven here by a self-driving vehicle allowing me to have my lunch and prepare rather than focus on the other crazy people on the road so that's the dream that we can create something which is you know partly classical and partly 21st century and we look around and we we don't see it if you if you don't see an institution that you really think should exist i think you have a more responsibility to create it so you're thinking including something bigger than just liberal education also including science engineering and technology i should also comment that you know i mostly stay out of politics and out of some of these aspects of liberal education that kind of been the most controversial and difficult within the university but there is a kind of ripple effect of fear within that space into science and engineering and technology that i think has uh has a nature that's difficult to describe it doesn't have a controversial nature it just has a nature of fear where you're not you know you're not just saying stupid stuff as a young 20 year old you know for example deep learning machine learning is really popular in the computer science now as an approach for creating artificial intelligence systems it's it is controversial in that space to say that anything against machine learning saying sort of exploring ideas that saying this is going to lead to a dead end um now that that takes some guts to do as a young 20 year old within uh within a classroom to think like that to raise that question in a machine learning course it sounds ridiculous because it's like who's going to uh complain about this but the the fear that starts in uh in a course on history or on the some course that covers society the fear ripples and affects those students they're asking big out of the box questions about engineering about computer science and there's a lot you know there's like linear algebra that's not going to change but then there's like applied linear algebra which is machine learning and that's when robots and real systems touch human beings and that's when you have to ask yourself these difficult questions about about humanity even in engineering and science and technology courses and these are not separate worlds in two senses i've just taken delivery of my copy of the book that eric schmidt and henry kissinger have co-authored on artificial intelligence the central question of which is what does this mean for us broadly but they're not separate worlds you know in cp snow's sense of you know the the chasm between science and arts because on a university campus everything is contagious from a novel coronavirus to the behaviors that are occurring in the english department those behaviors if denunciation becomes a norm you know undergraduate denounces professor teaching assistant denounces undergraduate those behaviors are contagious and will spread inexorably first to social science and then to natural sciences and i think that's that's part of the reason why when this started to happen when we started to get the origins of disinvitation and cancel culture it was not just a few conservative professors in the humanities who had to worry everybody had to worry because eventually it was going to come even to the most apparently hard stem part of the the campus it's it's contagious this is something nicholas christakis should look at because he's very good at looking at the way in which social networks like the ones that exist in a university can spread everything but i think when when we look back and ask why did wokism spread so rapidly and rapidly out of humanities into other parts of universities and why did it spread across the country and d beyond the united states to the other english-speaking universities it's because it's a contagion uh and and these behaviors are contagious the president of a university i won't name said to me that he receives every day at least one denunciation one call for somebody or other to be fired for something that they said that's the crazy kind of totalitarianism light that now exists in our uh our universities and of course the people who want to downplay this say oh well there only have been 100 and something in dis invitations or oh there really aren't that many cases but the point is that the famous events the events that get the attention are responsible for a general chilling that as you say spreads to every part of the university and creates a very familiar culture in which people are afraid to say what they think self-censorship look at the heterodox academy data on this grows and grows so now a majority of students will say this is clear from the latest heterodox academy surveys we are scared to say what we think in case we get denounced in case we get cancelled but that's just not the correct atmosphere for a university in a free society to me what's really creepy is how many of the behaviors i see on university campuses today are reminiscent of the way that people used to behave in the soviet union or in the soviet bloc or in maui's china the sort of totalitarianism light that i think we're we're contending with here which manifests itself as denunciations people informing on superiors some people using it for career advantage other people reduced to hapless desperate apology to try to exonerate themselves people disappearing metaphorically if not literally all of this is so reminiscent of the totalitarian regimes that i studied earlier in my career that it makes me feel sick and what makes me really feel sick is that the people doing this stuff the people who write the letters of denunciation are apparently unaware that they're behaving exactly like people in stalin's soviet union they don't know that so they clearly have there's been a massive educational failure if somebody can write an anonymous or non-anonymous letter of denunciation and not feel shame i mean you should feel morally completely contaminated as you are doing that but but people haven't been taught the realities of totalitarianism for all these reasons i think you need to try at least to create a new institution where those pathologies will be structurally excluded so maybe a difficult question maybe you'll push back on this but you're widely seen politically as a conservative hoover institution is politically conservative what is the role of politics at the university of austin because some of the ideas people listening to this when they hear the ideas you're expressing they may think there's a lien to these ideas there's a conservative lean to these ideas is there such a lien there will certainly be people who say that because the standard mode of trying to discredit any new initiative is to say oh this is a sinister conservative plot but one of our co-founders heather heing is definitely not a conservative she's as committed to the idea of academic freedom as i am but i think on political issues we probably agree on almost nothing and at least i i would guess but but politics max weber made this point a long time ago the politics really should stop at the threshold of the the classroom of the lecture hall and in my career i've always tried to make sure that when i'm teaching it's not clear where i stand politically though of course undergraduates and insatiably curiously want to know but it shouldn't be clear from what i say because indoctrination on a political basis is an abuse of the power of the professor as weber rightly said so i think one of the key principles of of the university of austin will be that barbarian principle that politics is not an appropriate uh subject for the lecture hall for the classroom and we should pursue truth and enshrine liberty of thought if that's a political issue then i can't help you i mean if you're against freedom of thought then we don't really have much of a discussion to have and clearly there are some people who politically seem quite hostile to it but my sense is that there are plenty of people on the left in academia i think of that interesting partnership between cornell west and robbie george which has been institutionalized in the academic freedom alliance it's bipartisan this issue it really really is after all 50 years ago it was the left that was in favor of free speech the right still has an anti-free speech element to it look how quickly they're out to ban critical race theory critical race theory won't be banned at the university of texas wokism won't be banned everything will be up for discussion but the rules of engagement will be clear chicago principles those will be enforced and if you have to give a lecture on well let's just take a recent example uh the dorian abbott case if you're giving a lecture on astrophysics but it turns out that in some different venue you express skepticism about a formative action well it doesn't matter it's irrelevant we want to know what your thoughts are on astrophysics because that's what you're supposed to be doing a lecture on that used to be understood i mean at the oxford of the 1980s there were communists and there were ultratories at cambridge there were people who were so reactionary that they celebrated franco's birthday but they were also out and out communists down the road at king's college the understanding was that that kind of intellectual diversity was part and parcel of university life and frankly for undergraduate it was great fun to cross the road and go from you know outright conservatism ultra tourism to communism one learns a lot that way but the issue is when you're promoting or hiring or tenuring people their politics is not relevant it really isn't and when it started to become relevant and i remember this coming up at the harvard history department late in my time there felt deeply deeply uneasy that we were having conversations that amounted to well we can't heart x person despite their obvious academic qualifications because of some political issue that that's not what should happen at a healthy university some practical questions will university of austin be a physical in person university or virtual university what are some uh in that aspect where the classroom is it will be a real space institution there may be an online dimension to it because there clearly are a lot of things that you can do uh via the internet but the core activity of of teaching and learning i think requires real space and i've thought about this a long time debated sebastian throne about this many many years ago when he was a complete believer in let's call it the metaversity to go with the metaverse i mean the metaversity was going to happen wasn't it but i never really believed in the metaversity i didn't do moocs because i just didn't think you'd a be able to retain the attention b be able to cope with the scale scaled grading that was involved i think there's a reason universities have been around and that they're formed for about a millennium you kind of need to all be in the same place so i think answer to that question definitely a campus in the austin area that's where we'll start and if we can allow some of our content to be available online great we'll certainly do that another question is what kind of courses and programming will it offer is that something you can speak to what's your vision here we think that we need to begin more like a startup than like a full service university from day one so our vision is that we start with a summer school which will offer provocatively the forbidden courses we we want i think to begin by giving a platform to the professors who've been most subject to council culture and also to give an opportunity to students who want to hear them to come so we'll start with the summer school that will be somewhat in the tradition of uh of those institutions in the interwar period that were havens for refugees so we're we are dealing here with the internal refugees of of the work era we'll start there uh it'll be an opportunity to test out some uh some content see what uh students will come uh and spend time in austin to hear so that's part a that's the sort of uh if if you like the launch product and then we go straight to a masters program i don't think you can go to undergraduate education right away because the established brands in undergraduate education are offering something it's impossible to compete with initially because they have the brand harvard yale stanford and they offer also this peer network which is part of the reason people want so badly to go to those places not really the professors it's the classmates so we don't want to compete there initially where there is i think room for new entrants is in a masters program and the first one will be in entrepreneurship and leadership because i think there's a huge hunger amongst people who want to get into particularly the technology world to learn about those things and they know they're not really going to learn about them at business schools the people who are not going to teach them leadership and entrepreneurship are professors so we want to create something that will be a little like the very successful schwarzman program in china which was come and spend a year in china and find out about china we'll be doing the same essentially saying come and spend a year and find out about technology and there'll be a mix of academic content we want people to understand some of the first principles of what they're studying there are first principles of entrepreneurship and leadership but we also want them to spend time with people like one of our co-founders joe lonsdale who's been a hugely successful venture capitalist and and learned directly from people like him so that's the kind of initial offering i think there are other masters programs that we will look to roll out quite quickly i have a particular passion for a masters in applied history or politics and applied history i'm a historian driven crazy by the tendency of academic historians to drift away from what seemed to me the important questions and certainly to drift away from addressing policy relevant questions so i would love to be involved in in in a masters in applied history and we'll we'll build some programs like that before we get to the full liberal arts uh experience that we envisage for an undergraduate program and that undergraduate program is an exciting one because i think we can be innovative there too i i would say two years would be spent doing some very classical and difficult classical things those old divides between arts and sciences but then there would also be in the second in the second half in the junior and senior years something somewhat more of an apprenticeship where we'll have centers including a center for uh technology engineering mathematics that will be designed to to help people make that transition from the theoretical to the the practical so that's the vision uh and i think like any like any early stage uh idea we'll doubtless tweak it as we go along we'll find things that work and things that don't work but i have a very clear sense in my own mind of how this should look five years from now and i don't know about you i mean i i'm unusual as an academic because i quite like starting new institutions and i've done a bit of it in my career you got to kind of know what it should look like after the first four or five years to get out of bed in the morning and put up with all the kind of hassles of doing it not not least the inevitable flack that we we're bound to take from the educational establishment and i was graciously invited to be an advisor to this university of austin and one the reason i would love to help in whatever way i can is several so one i would love to see austin the physical location flourish intellectually and especially in the space of science and engineering that's really exciting to me another reason is i am still a research scientist at mit i still love mit and i see this effort that you're launching as a as a beacon that leads the way to the other elite institutions in the world i think too many of my colleagues and especially in robotics kind of see don't see robotics as a humanities problem but to me robotics and ai will define much of our world in the next century and for not to consider all the deep psychological sociological human problems associated with that to have real open conversations to say stupid things to challenge the ideas that of how companies are being run for example that is the safe space it's very difficult to talk about the difficult questions about technology when you're employed by facebook or google and so on the university is the place to have those conversations that's right we're hugely excited that you want to be one of our advisors we we need a a broad and an eclectic group of people and i'm excited by the way that group has has has developed uh it has some of the some of my favorite intellectuals are there uh steve pinker uh for example uh but but we're also you know making sure that we have people with experience in academic leadership and so it's a it's a happy uh coalition of the willing looking to try to build something new which as you say will be complementary to the existing and established institutions i think of the academic world as a as a network i've moved from some major hubs in the network uh to others but i've always felt that we do our best work not in a silo called oxford but in a silo that that is really a hub connected to stanford connected to harvard connected to mit one of the reasons i moved to the united states was that i sensed that there was more intellectual action in my original field of expertise financial history and that was right it was it was a good move i think i'd have stagnated if i'd stayed at oxford but at the same time i i haven't lost connection with oxford i recently went and gave a lecture there in honour of sir roger scrutin one of the great conservative philosophers and the burden of my lecture was the idea of the anglo-sphere which appealed a lot to roger will go horribly wrong if illiberal ideas that inhibit academic freedom spread all over the anglo-sphere and this network gets infected with these i think deeply uh deeply damaging notions so yeah i think we're creating a new node uh i hope it's a node that makes the network overall more resilient and right now there's an urgent need for it i mean there are people whose academic careers have been terminated uh i'll name two who are involved peter bogosian who was harassed out of portland state for the reason that he was one of those uh intrepid figures who carried out the grievance studies hoaxes exposing the utter charlatan ray going on in many supposedly academic journals by getting phony gender studies articles published was genius and of course so put the noses out of joints of the academic establishment that he began to be subject to disciplinary actions so peter is going to be involved and in a recent uh shocking british case the philosopher kathleen stock has essentially been run off the campus of sussex university in england uh for trans uh for violating the the increasingly complex rules about discussing transgender issues and women's rights she will be uh one of our advisors and i think also one of our founding fellows actually teaching uh for us in our in our first uh iteration so i think we're creating a node that's badly needed those people i mean i remember saying this to the uh the other founders when we first began to talk about this idea uh to barry weiss uh and to panic and losses pano canelos as well as to heather heing we need to do this urgently because there are people whose livelihoods are in fact being destroyed by these extraordinarily illiberal campaigns against them and so there's no time to hang around and come up with the perfect design this this is an urgently needed lifeboat and let's start with that and then we can build something spectacular taking advantage of the fact that all of these people have well they now have very real skin in the game they they need to make this a success and and i'm sure they will help us make it a success so you mentioned some interesting names like heather heing barry weiss and so on stephen pinker somebody i really admire he too was under a lot of quite a lot of fire uh many reasons i admire him one because of his optimism about the future and two how little of a dam he seems to give about the like walking through the fire there's nobody more zen about walking through the fire than stephen pinker but anyway you mentioned a lot of interesting names jonathan height is also interesting there um who is involved with this venture at this early days well one of the one of the things that that i'm excited about is is that we're getting people from inside and outside the academic world so we've got arthur brooks who for many years ran the american enterprise very s enterprise institute very successfully has a harvard role now teaching uh and uh and so he's somebody who brings i think a different perspective there's obviously a a need to get uh experienced uh academic leaders involved which is why i was talking to larry summers about whether he would join our uh board of advisors uh the chicago principals owe a debt uh to the former president of chicago and he's uh graciously agreed to be in the board of advisors i could go on it would become a long and tedious list but my goal in in trying to get this happy band to form has been to signal that it's a bipartisan endeavor it is not a conservative institution that we're trying to build it's an institution that's committed to academic freedom and the pursuit of truth that will mean it uh when it uh takes uh robert zimmer's chicago principles and enshrines them in its its founding charter and will make those uh something other than honored in the breach which they seem to be at some institutions so the idea here is is to grow this organically we need rather like the academic freedom alliance that robbie george created earlier this year we need breadth and we need to show that this is not some kind of institutionalization of the intellectual dark web uh though we welcome founding members of that that nebulous body it's really something designed for all of academia to provide a kind of reboot that i i think we all agree is is needed is there a george washington type figure who is is there a president elected yet or is is who's going to lead this institution hannah canelos the former president of st john's is the president of university of austin and so he is our george washington i don't know who alexander hamilton is i'll lead you to guess it's funny you mentioned idw intellectual dark web have you uh talked to your friend sam harris about but any others he um he is another person i really admire and i've talked to online and offline quite a bit for not belonging to any tribe he stands boldly on his convictions when he knows they're not going to be popular with like he based he basically gets canceled by every group he sort of he doesn't shy away from controversy and not for the sake of controversy itself he is one of the best examples to me of a person who thinks freely i disagree with him on a few quite a few things but i deeply admire that he is he he is what it looks like to think freely by himself it feels to me like he represents a lot of the ideals of this kind of effort yes he would be a natural fit sam if you're listening i hope you're in uh i think in in the course of his recent intellectual quests he did collide with one of our founders heather hying so we'll have to model civil disagreements at the university of austin it's extremely important that we should all disagree about many things but do it amicably one of the things that has been lost sight of perhaps it's all the fault of twitter or maybe it's something more profound is that it is possible to disagree in a civil way and and still be friends i certainly had friends at oxford who were far to the left of me politically and they are still among my best friends so the university of austin has to be a place where we can disagree uh we can disagree vehemently but we can then go and have a beer afterwards that's that's in my mind a really important part of university life learning the difference between the political and the and the personal so sam is a i think a a good example as a you of a certain kind of intellectual hero who has been willing to go into the cyber uh sphere the metaverse and carve out an intellectual space the podcast and debate everything fearlessly his uh essay was really an essay on black lives matter and the question of police racism was a masterpiece of 2020 and and so he i think is a a model of what we believe in but we can't save the world with podcasts good though yours is because there's a kind of solo element to this form of public intellectual activities it's also there in substance where all our best writers now seem to be including our founder barry weiss the danger with this uh approach is ultimately your subscribers are the people who already agree with you and we are all therefore in danger of preaching to the choir i think what makes an institution like university of austin so attractive is that we get everybody together uh at least part of the year and we do that informal interaction at lunch at dinner uh that allows in my experience the best ideas to form intellectual activity isn't really a solo voyage historians often make it seem that way but i've realized over time that i do my best work in a collaborative way and scientists have been better at this than people in the humanities but what really matters what what's magical about a good university is that interdisciplinary serendipitous conversation that happens on campus tom sergeant the great nobel prize-winning economist and i used to have these kind of random conversations in elevators at nyu or in corridors at stanford and sometimes they'd be quite short conversations but in that short serendipitous exchange i would have more intellectual stimulus than in in many a seminar lasting an hour and a half so i think we want to get the sam harris's and and lex friedman's out of their darkened rooms and give them a chance to interact in a much less structured way than we've got got used to again it's that it's that sense that sometimes you need some free willing unstructured debate to get the really good ideas i mean to talk anecdotally for a moment i look back on my oxford undergraduate experience and i wrote a lot of essays and attended a lot of classes but intellectually the most important thing i did was to write an essay on the viennese satirist carl krause for a an undergraduate discussion group called the cannon club and i probably put more work into that paper than i put into anything else except maybe my final examinations even although there was only really one senior member present the historian jeremy cato i was really just trying to impress my contemporaries and that's the kind of thing we want the great intellectuals the great intellectual leaps forward occurred often in somewhat unstructured settings i'm from scotland you can tell from my accent a little at least the enlightenment happened in late 18th century scotland in a very interesting interplay between the universities which were very important glasgow edinburgh st andrews and the coffee houses and and pubs of uh the scottish cities where a lot of unstructured discussion often fueled by copious amounts of wine to place that's what i've missed over the last few years let's let's just think about how hard academic social life has become that we've reached the point that amy chua becomes the object of a full-blown investigation and media storm for inviting to yale law school students over to her house to talk i mean when i was at oxford it was regarded as a tremendous honor to be asked to go to one of our tutors homes the social life of oxford and cambridge is one of their great strengths there's a sort of requirement to sip unpleasant sherry with the dons and we've kind of killed all that we've killed all that in the us because nobody dares have a social interaction with an undergraduate or exchange an informal email in case the whole thing ends up on the front page of the local or student newspaper so that that's what we need to kind of restore the the social life of academia so there's magic we didn't really address it sort of explicitly but there's magic to the interaction between students there's magic in the interaction between faculty the people that teach and there's the magic and the interaction between the students and the faculty and it's it's an iterative process that changes everybody involved so it's like world experts in a particular discipline are changed as much as the students as the 20 year olds with the with the wild ideas each are changed and that's the magic of it that applies in liberal education that applies in this in the sciences too that's probably maybe you can speak to this why so much scientific innovation has happened in universities there's something about the youthful energy of like young minds graduate students undergraduate students that inspire some of the world experts to do some of the best work of their lives yeah well the human brain we know is at its most dynamic uh when people are pretty young you know this with your background in math people don't get better at math after the age of 30. and this is important when you think about the intergenerational character of university the older people the professors have the experience but they're fading intellectually from much earlier than anybody really wants to admit and so you get this intellectual shot in the arm from hanging out with people who are circa 20 don't know shit but the brains are kind of like cooking yeah i look back on the career i've had in teaching which is over 25 years where cambridge oxford nyu harvard and uh i have extremely strong relationships with with students uh from those institutions because they would show up whether it was at office hours or in tutorials and disagree with me and for me it's always been about encouraging some active intellectual rebellion telling people i don't want your essay to echo my views if you can find something wrong with what i wrote great or if you can find something i missed that's new fantastic so there is definitely as you said a magic in that interaction across the generations and it's extraordinarily difficult i think for an intellectual to make the same progress in a project in isolation compared with the progress that can be made in these very very special communities what does a university do amongst other things it creates a somewhat artificial environment of of abnormal job security that's the whole idea of giving people tenure and then a relatively high turnover new faces each year and an institutionalization of thought experiments and actual experiments and then you get everybody living in the same kind of vicinity so that it can spill over into 3 a.m conversation well that that always seems to me to be a pretty potent combination let's ask ourselves a counterfactual question next let's imagine let's imagine that uh the the world wars happen but but there are no universities i mean how does the manhattan project happen with with no academia to take just one of many examples in truth how does britain even stay in the war without bletchley park without uh be being able to crack the german uh cipher the academics are unsung partly sung heroes of these conflicts the same is true in the soviet union the soviet union was a terribly evil and repressive system but it was good at science and that kept it in the game not only in in world war ii kept it in the cold war so it's clear that universities are incredibly powerful intellectual force multipliers and our our history without them would look very different sure some innovations would have happened without them that's clear the industrial revolution didn't need universities in fact they played a very marginal role in the key technological breakthroughs of the industrial revolution in its first phase but by the second industrial revolution in the late 19th century german industry would not have leapt ahead of british industry if the universities had not been superior and it was the fact that the germans institutionalized scientific research in the way that they did that really produced a powerful powerful advantage uh the problem was that this is a really interesting point that friedrich meinecker makes in d deutsche catestor for the german catastrophe the german intellectuals became technocrats homo faber he says they knew a great deal about their speciality but they were alienated from broadly speaking humanism and that is his explanation one of his explanations for why this very scientifically advanced germany goes down the path of hell led by hitler so when i come back and ask myself what is it that we want to do with a new university we want to make sure that we we don't fall into that that german pit where very high levels of technical and scientific expertise are decoupled from the fundamental foundations of of a free society so liberal arts are there i think to stop the scientists making fausty impacts and that that's why it's really important that people working on ai read shakespeare i think you said the academics are unsung heroes of the 20th century i think there's kind of an intellectual a lazy intellectual desire to kind of destroy the academics that the academics are the source of all problems in the world and i personally believe that exactly as you said we need to recognize that the university is probably where the ideas that will protect us from the catastrophes that are looming ahead of us is that's where those ideas are going to come from people who who work on economics can argue back and forth about john main arcanes but i think it's pretty clear that he was the most important economist and certainly the most influential economist of the 20th century and i think his ideas are looking better today in the wake of the financial crisis than they have at any time since the 1970s but imagine imagine john maynard keynes without cambridge you can't because someone like that doesn't actually doesn't actually exist without the incredible hot house that a place like cambridge wars in keynes's life he was a product of a kind of hereditary intellectual elite it had its vices but you can't help but admire the sheer power of the mind i've spent a lot of my career reading keynes and i i revere that intellect it's so so powerful but you can't have people like that if you're not prepared to have king's college cambridge and and it comes with redundancy i think that's the point there are lots and lots of things that are very annoying about academic life that you just have to you have to deal with they're they're made fun of in that recent netflix series the chair and it is easy to make fun of academic life uh tom sharpe's porterhouse blue did it it's it's an inherently comical subject professors at least used to be amusingly eccentric but we've sort of killed off that side of academia by turning it into an increasingly doctrinaire place where eccentricity is not tolerated i'll give you an illustration of this i had a call this morning from a british academic who said can you can you give me some advice because they're trying to decolonize the curriculum this is coming from the diversity equity and inclusion officers and it seems to me that what they're requiring of us is a fundamental violation of academic freedom because it is determining ex-ante what we should study and teach that's what's going on and that's the thing that we really really have to resist because that kills the university that's that's the moment that it stops being the magical place of intellectual creativity and simply becomes an adjunct of the ministry of propaganda i've loved the time we spent talking about this because it's such a hopeful message for the future of the university that i still share with you uh the love of the ideal of the university so very practical question you mentioned uh summer which summer are we talking about so when uh i know we don't want to put hard dates here but what year are we thinking about when is this thing launching what are your thoughts on this we are moving as fast as our resources allow uh the goal is to offer the first uh of the forbidden courses uh next summer summer of 2022 and we hope to be able to launch an initial uh albeit relatively small scale masters program in the fall of next year that's that's as fast as is humanly possible uh so yeah we're really we're really keen to get going and i think the the approach we're taking is uh somewhat imported from silicon valley think of this as a startup don't think of this as something that has to exist as a full service university on on day one we don't have the results of that you need billions and billions of dollars to build a university sort of as a as a facsimile of an existing university but that's not what we want to do i mean copying copying and pasting harvard or year or stanford would be a futile thing to do they would probably you very quickly end up with the same pathologies so we do have to come up with a different design and one way of doing that is to grow it organically from something quite small elon musk mentioned in his usual humorous way on twitter that he wants to launch the texas institute of technology and science tits some people thought this was sexist because of the acronym tits so first of all i understand their viewpoint uh but i also think there needs to be a place for humor on the internet even from ceo so on this podcast i've gotten a chance to talk to quite a few ceos and what i love to see is authenticity and humor is often a sign of authenticity the the quirkiness that you mentioned is such a beautiful characteristic of professors and faculty and great universities is also beautiful to see as ceos especially founding ceo so anyway the deeper point he was making is showing an excitement for the university as a place for big ideas in science technology engineering so to me if there's some kind of way if there is a serious thought that he had behind this tweet not to analyze elon musk's twitter like it's shakespeare but if there's a serious thought um i would love to see him supporting the the flourishing of austin as a place for science technology for these kinds of intellectual developments that uh that that we're talking about like make make a place for free inquiry civil disagreements coupled with great education and conversations about artificial intelligence about technology about engineering so i'm actually gonna uh i hope there's a serious idea behind that tweet and i'm gonna i'm gonna chat with him about it i do too i do too i uh most of the uh biggest uh storms and teacups of my academic career have been caused by bad jokes that i've made these days if you want to make bad jokes being a billionaire is a great idea uh i'm not here to defend elon's uh twitter style or sense of humor he's not gonna be remembered for his tweets i think uh he's gonna be remembered for the astonishing companies that he's built and his his contributions in a whole range of of fields from spacex to tesla and solar energy and i very much hope that we can interest elon in this project we need not only elon but a whole range of uh his peers because this takes resources universities are not cheap things to run especially if as i hope we can make as much of uh the the tuition uh covered by scholarships and bursaries we we want to attract the best intellectual talent to this institution the best intellectual talent is somewhat randomly distributed through society and some of it is in the bottom quintile of the income distribution and that makes it hard to get to elite education so this will take resources the last generation of super wealthy plutocrats the generation of the gilded age of the late 19th century did a pretty good job of founding universities chicago wouldn't exist uh but for the money of that era and so my message to not only to elon but to all of the peers all of those people who made their billions uh out of technology over the last couple of decades is this is your time i mean and this is your opportunity to create something new i can't really understand why the wealthy of our time are content to hand their money i mean think of the vast sums mike bloomberg recently gave to johns hopkins to his established institutions when on close inspection those institutions don't seem to spend the money terribly well and in fact one of the mysteries of our time is the lack of due diligence that hard-nosed billionaires seem to do when it comes to philanthropy so i think there's an opportunity here for this generation of very talented wealthy people to to do what their their counterparts did in the late 90s and early 20th century and and create some new institutions and they don't need to put their names on the buildings they just need to do what what the founders of of chicago university of chicago did create something new that will that will endure yeah uh mit is launching a college of computing and um steven schwartzman has given quite a large sum of money i think in total a billion dollars and as somebody who loves computing and somebody who loves mit i want some accountability uh for mit becoming a better institution and this is once again why i'm excited about university of austin because it serves as a beacon look you can create something new and this is what the great institutions of the future should look like and steve schwartzman uh is also uh an innovator the idea of creating a college on the tsinghua campus and creating a kind of rhodes program for students from the western world to come study in china was was steve's idea and and i was somewhat involved did some visiting professing there it taught me that you can create something new uh in that area of graduate education and quite quickly attract really strong applicants because the people who finish their four years at harvard or stanford know that they don't know a lot and i having taught a lot of people in that group know how intellectually dissatisfied they often are at the end of four years i mean they may have beautifully gained the system to graduate sumo or magna cum laude but they kind of know they they'll confess it after a drink or two they know that they gained the system and that intellectually it wasn't the fulfilling experience they wanted and they also know that an mba from a comparable institution would not be a massive intellectual step forward so i think what we want to say is here's something really novel exciting that will be intellectually very challenging i i do think the university of austin has to be difficult yeah um i'd like it to feel a little bit like surviving navy seal training to come through this program because it will be intellectually demanding and that i think should be a magnet so yeah steve if you're listening uh please join elon in in supporting this and and and peter thiel if you're listening i know how skeptical you are about the idea of creating a new university because heaven knows peter and i have been discussing this idea for years and he's always said well no we thought about this and it just isn't going to work but i really think we've got a we got a responsibility to to do this well steve's been on this podcast before we've uh spoken a few times so i'll send this to him i hope he does actually get behind it as well so i'm i'm super excited by the ideas that we've been talking about that this uh effort represents and what ripple effect it has on the rest of society so thank you that was a time beautifully spent and i'm really grateful for the the fortune of getting a chance to talk to you at this moment in history because i've been a big fan of your work and the reason i wanted to talk to you today is about all the excellent books you've written about various aspects of history through money war power pandemics all of that but i'm glad that this we got a chance to talk about this which is not looking at history it's looking at the future this is a beautiful little uh fortuitous uh moment i appreciate you talking about it in the book ascent of money you give a history of the world through the lens of money if the financial system is uh evolutionary nature much like life on earth what is the origin of money on earth the origin of money predates coins most people kind of assume i'll talk about coins but coins are relatively late developments back in ancient mesopotamia so i don't know 5 000 years ago there were relations between creditors and debtors there there are even in the simplest economy uh because of the way in which agriculture works hey i need i need to plant these seeds but i'm not going to have crops for x months so we have clay tablets in which simple debt transactions are inscribed i remember looking at great numbers of these in the british museum when i was writing the ascent of money and that's really the beginning of money the minute you start recording a relationship between a creditor and a debtor you have something that is quasi money and that is probably what these um clay tablets mostly denoted from that point on there's a great evolutionary experiment to see what the most convenient way is to record relations between creditors and debtors and what emerges uh in the time of the ancient greeks are coins metal tokens uh sometimes uh a valuable metal sometimes not usually bearing the imprint of a state or a monarch and that's the sort of more familiar form of of money that we still use today for very very small transactions i expect coins will all be gone by the time my youngest son is my age but but they're a last remnant of a very very old way of of doing of doing simple transactions and when you say coins you mean physical coins i'm talking about coins has been rebranded into digital space yeah not coin based coins actual coin coins you know the ones that jangle in your in your pocket and you kind of don't know quite what to do with once you have some so that that became an incredibly pervasive form of of of paying for things money's just a it's just a crystallization of a relationship between a debtor and a creditor and coins are just very fungible you know whereas a clay tablet relates to a specific transaction coins are generic and fungible they can be used in in any transaction so that was an important evolutionary advance if you think of financial history and this was the point of the ascent of money as an evolutionary story there are punctuated equilibria people get by with coins for a long time despite their defects as a means of payment such as that they can be debased they can be clipped uh it's very hard to avoid fake or debased money entering the system but coinage is still kind of the basis of payments all the way through the roman empire out the other end into the so-called dark ages it's still how most things are settled in cash transactions in the early 1300s you don't get a big shift until after the black death when there is such a need to monetize the economy because of chronic labor shortages and feudalism begins to unravel that you you just don't have a sufficient uh amount of coinage and so you get bills of exchange and i'm really into bills of exchange because and this i hope will capture your listeners and viewers imaginations when they start using bills of exchange which which are really just pieces of paper saying you know i owe you over a three month period while goods are in transit from florence to london you get the first uh peer-to-peer payment system which is network verified because they're they're not coins they don't have a king's head on them they're just pieces of paper and the verification comes in the form of signatures and you you need ultimately some kind of guarantee if i write an iou to you build change i mean you don't really know me that well we only just met so you might want to get endorsed by i don't know somebody really credit worthy like elon and so we we actually can see in the late 14th century in northern italy in england and elsewhere the evolution of a peer-to-peer network system of of payment and that's actually how world trade grows because you just couldn't settle long oceanic transactions with coinage it just wasn't practical all those treasure chests full of doubloons which were part of the way in which the spanish empire worked really inefficient so bills of exchange are an exciting uh part of the story and they illustrate something i should have made more clear of the ascent of money that not everything used in payment needs to be money classically economists will tell you oh well money money has three different functions it's you've heard this a zillion times right it's a unit of account it's a store of value and it's a medium of exchange now there are three or four things that are worth saying about this and i'll just say two one it may be that those three things are a trilemma and it's very difficult for anything to be all of them this point was made by my hoover colleague manny rincon cruz last year and i still wish he would write this up as a paper because it's a great insight the second thing that's really interesting to me is that payments don't need to be money and if we go around as economists love to do saying well bitcoin's not money because it doesn't fulfill these criteria we're missing the point that you could build a system of payments which i think is how we should think about crypto that is isn't money doesn't need to be money it's like bills of exchange it's network-based verification peer-to-peer transactions without without third-party verification when it hit me the other day that we actually had this precedent for crypto i got quite excited and thought i wish i had written that in the ascent of money can you sort of from a first principles like almost like a physics perspective or maybe a human perspective uh describe where does the value of money come from like where is it actually where is it so it's a sheet of paper or it's coins but it feels like in a platonic sense there's some kind of thing that's actually storing the value as us a bunch of ants are dancing around and so on i come from a family of physicists i'm the black sheep of the family my mother's a physicist my sister is and uh so when you ask me to explain something in physics terms i i get a kind of little part of me dies because i know i'll fail but in in truth it doesn't really matter what we decide money is going to be and anything can record uh crystallize the the relationship between the the creditor and the debtor it could be a piece of paper it can be a piece of metal it can be nothing can just be a digital entry it's trust that we're really talking about here we are not just trusting one another we may not but we are trusting the money so whatever we use to represent the credited debtor relationship whether it's a banknote or a coin or whatever it does depend on us both trusting it and that doesn't always pertain what we see in episodes of inflation especially episodes of hyperinflation is a crisis of trust a crisis of confidence in the means of payments and this is very traumatic for the societies to which it happens by and large human beings particularly once you have a rule of law uh system of the sort that evolved in the west and then became generalized are predisposed to trust one another and the default setting is to trust money even when it depreciates a quite steady rate as the us dollar has done uh pretty much uninterruptedly since the 1960s it takes quite a big disruption for money to lose that trust but i think essentially what money should be thought of as is a series of tokens that can take any form we like and can be purely digital which represent our transactions as as creditors and debtors and the whole thing depends on our collective trust to work i had to explain this to stephen colbert once in the call burster the old old show that was actually funny and when he said um so so so neil could i be money and i said yes you know we could we could settle a debt with a human being that was quite common in much of history but but it's not the most convenient form of money money has to be convenient that's why when they worked out how to make payments with cell phones the chinese simply went straight there from bank accounts they skipped out credit cards you won't see credit cards in china except in the hands of naive tourists how much can this trust bear in terms of uh us humans with our human nature testing it it seems that i guess the surprising thing is the thing works a bunch of self-interested ants running around trading in trust and it seems to work except for a bunch of moments in human history when there's hyperinflation like you mentioned and it's just uh it's just kind of amazing it's kind of amazing that us humans if i were to be optimistic and sort of hopeful about human nature it gives me a sense that people want to lean on each other they want to trust that certainly i would say probably now a widely shared view amongst evolutionary psychologists network scientists it's one of uh nicholas christakis's argument in a recent book and i think economic history broadly bears this out but you have to be cautious the cases where the system works are familiar to us because those are the those are the the states and the eras that produce a lot of written records but when the system of trust collapses and the monetary system collapses with it there's generally quite a paucity of of records i found that when i was writing doom and so we slightly are biased in favor of the periods when trust prevailed and the system functioned it's very easy to point to a great many episodes of very very intense monetary chaos even in the relatively recent past in the wake of the first world war multiple currencies not just the german currency multiple currencies were completely destroyed the russian currency the polish currency there were currency disasters all over central and eastern europe in the early 1920s and that was partly because over the course of the 19th century a system had evolved in which trust was based on gold and rules that were supposedly applied by central banks that system which produced relative price stability over the the 19th century fell apart as a result of the first world war and and as soon as it was gone as soon as there was no longer a clear link between those uh banknotes and coins and gold the whole thing went completely haywire and i think we should remember that the extent of the monetary chaos from certainly 1918 all the way through to the late 1940s i mean the german currency was destroyed not once but twice in that period and that was one of the most advanced economies in the world in the united states there were periods of intensely deep deflation prices fell by a third in the great depression and then very serious price volatility in the immediate post-world war ii period so it's a bit of an illusion maybe it's an illusion for people who've spent most of their lives in the last 20 years we've had a period of exceptional price stability since this century began in which a regime of central bank independence and inflation targeting appeared to generate steady below 2 inflation in much of the developed world was a bit too low for the central bankers liking and that became a problem in the financial crisis but we've avoided major price uh instability for the better part of 20 years in most of the world there haven't really been that many very high inflation episodes and hardly any hyperinflationary episodes venezuela is one of the very few zimbabwes another but if you take a hundred year view or a 200 year view or if you want to take a 500 year view you realize that quite often the system doesn't work if you go back to the 17th century there were multiple competing systems of coinage there had been a great inflation that had begun the previous century the price revolution caused mainly by the arrival of new world silver i think financial history is a bit messier than one might think and the more one studies it the more one realizes that the need for the evolution the reason bills of exchange came along was because the coinage systems had stopped working the reason that banknotes started to become used more generally first in the american colonies in the 17th century then more widely in the 18th century was just that they were more convenient than any other way of of paying for things we had to invent the bond market in the 18th century to cope with the problem of public debt which up until that point had been a recurrent source of instability and then we invented equity finance because bonds were not enough so i would prefer to think of of the financial history as a series of crises really that are resolved by innovations and in the most recent episode very exciting episode of financial history something called bitcoin initiated a new financial or monetary revolution in response i think to the growing crisis of the fiat money system can you speak to that so what do you think about bitcoin what do you think it is the response to what are the growing problems of the fiat system what is this moment in human history that is full of challenges that bitcoin and cryptocurrency is trying to overcome i don't think bitcoin was devised by satoshi whoever he was for fear of a breakdown of the fiat currencies if it was it was a very far-sighted enterprise because certainly in 2008 when the first bitcoin paper appeared it wasn't very likely that a wave of inflation was coming if anything there was more reason to fear deflation at that point i think it would be more accurate to say that with the advent of the internet there was a need for a means of payment native to the internet typing your credit card number into a random website it's not the way to pay for things on the internet and i'd rather think of bitcoin as the first iteration the first attempt to solve the problem of how do we pay for things in what we must learn to call the metaverse but let's just call it the internet for old times sake and ever since that initial innovation the realization that you could use computing power and cryptography to create peer-to-peer payments without third-party verification a revolution has been gathering momentum that poses a very profound threat to the existing legacy system of banks and and fiat currencies most money in the world today is made by banks not central banks banks that's what most money is it's entries in bank accounts and what bitcoin represents is an alternative mode of payment that really ought to render banks obsolete i think this financial revolution has got past the point at which it can be killed it was vulnerable in the early years but it now has sufficient adoption and has generated sufficient additional layers i mean ethereum was in many ways the more important innovation because you can build a whole system of of payments and ultimately smart contracts on top of ether i think we've now reached the point that it's pretty hard to imagine it all being killed and it's just survived an amazing thing which was the chinese shutting down mining and shutting down everything and still here we are uh in fact crypto's thriving what we don't know is how much damage ill-judged regulatory interventions are going to do to this financial revolution left to its own devices i think decentralized finance provides the native monitoring financial system for the internet and the more time we spend in the metaverse the more use we will make of it the next things that will happen i think will be that uh tokens in game spaces like roblox will become fungible as my nine-year-old spends a lot more time playing on computer games than i ever did i can see the entertainment is becoming a game-driven phenomenon and in the game space you need skins for your avatar the economics of the internet it's evolving very fast and in parallel you can see this payments revolution happening i think that all that all goes naturally very well and generates an enormous amount of wealth in the process the the problem is there are people in washington with an overwhelming urge to intervene and and disrupt this evolutionary uh process partly i think out of a muddled sense that there must be a lot of nefarious things going on if we don't step in many more will go on this i think greatly exaggerates how much criminal activity is in fact going on in the space but there's also the vested interests at work it was odd to me maybe not odd perhaps it wasn't surprising but the bank for international settlements earlier this year published a report uh one chapter of which said this must all go let's all stop it's all got to be shut down and it's got to be replaced by central bank digital currency and martin wolf in the financial times read this and said i agree with this and one suddenly realized that the the banks are clever they had they'd achieved the intellectual counter-attack uh with uh almost no fingerprints on the weapon i think central bank digital currency is a terrible idea i can't imagine why we would want to copy a chinese model that essentially takes all transactions and puts them directly under the surveillance of a central government institution but that suddenly is a serious counterproposal so on the one side we have a relatively decentralized technologically innovative internet native system of payments that has the possibility to evolve to produce a full set of of smart contracts reducing enormously the transaction costs that we currently encounter in the financial world because it gets rid of all those middlemen who take their cut every time you take out a mortgage or whatever it is that's one alternative on the other side we have a highly centralized system in which transactions will by default be under the surveillance of the central bank seems like an easy choice to me but hey i have this thing about personal liberty so that's where we are i don't think that the regulators can can kill uh web 3 i think we're supposed to call it web 3 because crypto is now an obsolescent term they can't kill it but they can definitely make it difficult and throw a lot of sand into the machine and i think worst of all they can spoil the evolutionary story by by creating central bank digital currency that i don't think we really need or we certainly don't need it in the chinese form but do you think bitcoin has a strong chance to take over the world so become the primary you mentioned the three things that make money money become the primary methodology by which we store wealth we exchange no no i think what bitcoin is this was a phrase that i i got from my friend matt mclennan first eagle an option on digital gold so it's the gold of the system but currently it behaves like an option that's why it's quite volatile because we don't really know if this brave new world of crypto is gonna work but if it does work then bitcoin is the gold because of the finite supply what role we need gold to play in the metaverse isn't quite clear i love that you're using the term metaverse this is great well i i just like the metaversity as a kind of yeah as the antithesis of what we're trying to do in in austin but i love it but can you imagine i'm using it sarcastically i come from glasgow where all novel words have to be used sarcastically so the metaverse sarcastic but see the beauty about humor and sarcasm is that the joke becomes reality i mean it's like using the word big bang to describe the origins of the universe it becomes like that it will after a while it's in the textbooks yeah and nobody's laughing yeah well that's exactly right so sticky yeah um i'm on the side of humor but it is a it is a dangerous activity these days anyway i think bitcoin is is the option of digital gold the the role it plays is probably not so much storage value right now it's just nicely not very correlated asset in your portfolio when i updated the ascent of money which was in 2018 10 years after it came out i wrote a new chapter in which i said bitcoin which had just sold off after its 2017 bubble will rise again through adoption because if every millionaire in the world has point two percent of his or her wealth in bitcoin the price should be fifteen thousand dollars and if it's one percent it's seventy five thousand dollars and it might not even stay at one percent because i mean look at its recent performance if you if your exposure to stocks global stocks had been hedged with a significant uh crypto holding you would have aced the last few months so i think the non-correlation [Music] property is very very important in driving adoption and the volatility also drives adoption if you're a sophisticated investor uh so i think the adoption drives uh uh bitcoin up because it's the option of digital gold but it's also just this nicely not very correlated asset that you want to hold in in a world where the hell i mean the bank central bank is going to tighten we've come through this massively disruptive episode of the pandemic public debt soared money printing sword you could hang around with your bonds and wait for the euthanasia of the rontier you can hang on to your tech stocks and just hope there isn't a massive correction or dot dot dot well and it seems like a fairly obvious strategy to make sure that you have at least some crypto for the coming year given what we likely have to face i think what's really interesting is that on top of ethereum a more elaborate financial system is being built stable coins are the interesting puzzle for me because we need off-ramps you and i have to pay taxes in u.s dollars and there's no getting away from that the irs is going to let us hold crypto as long as we pay our taxes and the only question in my mind is what's the optimal off-ramp to make those taxes make those tax payments probably it shouldn't be a currency invented by facebook never struck me as the best solution to this problem maybe it's some kind of fed coin or maybe one of the the existing algorithmic stable coins does the job but we clearly need some stable off-ramp so you don't think it's possible for the irs within the next decade to be accepting bitcoin as tax payments i doubt that having dealt with the irs now since when did i first come here 2002 it's hard to think of an institution less likely to leap into the 21st century when it comes to to payments no i think i think we'll we'll be we'll be tolerated crypto world will be tolerated as long as we pay our taxes that's the and it's important that we're already at that point and then the next question becomes well does gary gensler define everything as a security and do we then have to go through endless regulatory contortions to satisfy the sec there's a whole bunch of of uncertainties that the administrative state excels at creating because you know that's just how that's how the administrative state works you'll do something new hmm i'll decide whether that's a security but don't expect me to define it for you i'll decide in an arbitrary way and then you'll owe me money so all of this is going to be very annoying and you know for people who are trying to run uh exchanges or uh innovate in the space these these regulations will be annoying but the problem with fintech is it's it's different from tech broadly defined you know when tech got into e-commerce with amazon when it got into social networking with facebook there wasn't a huge regulatory jungle to navigate but welcome to the world of finance which has always been a jungle of regulation because the regulation is is there to you know basically entrench the incumbents that's what it's for so it'll be a much tougher fight than the fights we've we've seen over other aspects of the tech revolution because because the incumbents are are there and they see the threat and in the end satoshi said it very explicitly it's peer-to-peer payment without third party verification and all the third parties are going wait what we're the third parties so there is a connection between power and money you've mentioned world war one from the perspective of money so power money war authoritarian regimes from the perspective of money do you have hope that cryptocurrency can help resist war can help resist the negative effects of authoritarian regimes or is that a silly hope wars happen because the people who have the power to command armed forces miscalculate that's generally what happens and we will have a big war in the near future if both the chinese government and the us government miscalculates and they unleash lethal lethal force on one another and there's nothing that any financial institution can do to stop that any more than the rothschilds could rothschilds could stop world war one and they were then the biggest bank in the world by far with massive international financial influence so let's accept that war is is in a different domain war would impact the financial world massively if it were a war between the united states and china because there's still a huge china trade on wall street is long china europe is long china so the conflict that i could foresee in the future is one that's highly financially disruptive where does crypto fit in crypto's obvious utility in the short run is as a store of wealth of transferable wealth for people who live in dangerous places with failing not just failing money but failing rule of law that's why in latin america there's so much interest in crypto because latin americans have a lot of monetary history to look back on and not much of it is so i think that the short run problem that crypto solves is and this goes back to the the digital gold point if you are in a dangerous place with weak rule of law and weak property rights here's a new and better way to have portable wealth i think the next question to ask is would you want to be long crypto in the event of world war three what's interesting about that question is that world war three would likely have a significant cyber dimension to it and i don't want to be a hundred percent in crypto if they crash the internet which between them china and russia might be able to do that's a fascinating question whether you want to be holding physical gold or digital gold in the event of world war iii the smart person who studied history definitely wants better both and so let's imagine world war iii has a very very severe cyber component to it with high levels of disruption yeah you'd be glad of the old the old shiny stuff at that point so diversification still seems like the most important truth of a financial history yeah and and what is crypto it's just this wonderful new source of diversification but you'd be nuts to be a hundred percent in bitcoin i mean i i i have some friends who are probably quite close to that close to 100 i i'd marr the i'd mar the bowls of steel yeah uh in whatever way that balls of steel takes uh to takes form uh you mentioned smart contracts what are your thoughts about in the context of the history of money about ethereum about smart contracts about kind of uh more systematic at scale formalization of agreements between humans i think it must be the case that a lot of the complexity in a mortgage is redundant that when we are confronted with pages and pages and pages and pages of small prints uh we're seeing some manifestation of of the late stage regulatory state the transaction itself is quite simple and most of the verbage is just ass covering by regulators so i think the smart contract although i'm sure lawyers will email me and tell me i'm wrong can deal with a lot of the plain vanilla and maybe not so plain transactions that we want to do and eliminate yet more intermediaries that's my my kind of working assumption and given that a lot of of financial transactions have the potential at least to be to be simplified automated turned into smart contracts that that's probably where the future goes i can't see an obvious reason why my range of different financial needs let's think about insurance for example will continue to be met with instruments that in some ways are 100 years old so i think we're still an early stage of a financial revolution that will greatly streamline how we take care of all those financial needs that we have uh mortgages and insurance leave leap to mind you know most households are are penalized for being financially poorly educated and confronted with oligopolistic financial services providers so you kind of leave college already in debt so you start in debt servitude and then you gotta somehow leave her up to buy a home if you can because everybody's kind of telling you you should do that so so you and your spouse you are getting even more leveraged and you're you're long one asset class called real estate which is super illiquid i mean already i'm i'm crying inside at the thought of describing so many households financial predicament in that way and i'm not done with them yet because oh by the way there's all this insurance you have to take out and here are the providers that are willing to insure you and here are the premiums you're going to be paying which are kind of presented to you that's your that's your car insurance that's your home insurance and if you're here it's the earthquake insurance and pretty soon you're just bleeding money in a bunch of monthly payments to the mortgage lender to the insurer to all the other people that lent you money and let's look at your balance sheet it sucks you know there's this great big chunk of real estate and what else have you really got on there and the other side is a bunch of debt which is probably paying too high interest the typical household in the median kind of range is is at the mercy of oligopolistic financial services providers go down further in the social scale and people are outside the financial system altogether and those poor folks have to rely on banknotes and informal lending with huge punitive rates we have to do better than this this has to be this has to be improved upon and i think what's exciting about our time is that technology now exists that didn't exist when i wrote the ascent of money to solve these problems when i wrote this under money which was in 2008 you couldn't really solve the problem i've just described certainly you couldn't solve it with something like microfinance that was obviously not viable the interest rates were high the transaction costs were crazy but now we have solutions and the solutions are extremely exciting so fintech is this great force for good that brings people into the financial system and reduces transaction costs crypto is part of it but it's just part of it there's a much broader story of fintech going on here where you get suddenly you get financial services on your phone don't cost nearly as much as they they did when there had to be a bricks and mortar building on main street that you kind of went humbly and beseeched to lend you money i'm excited about that because it seems to me very socially transformative i'll give you one other example of what's great the people who really get sculpt in our financial system are senders and receivers of uh remittances which are often amongst the poorest families in the world the people who are like my wife's family in east africa really kind of hand to mouth and if you send money to east africa or the philippines or central america it's it's the transaction costs are awful uh i'm talking to you western union we're gonna solve that problem so ten years from now the transaction cost will just be negligible and the money will go to the people who need it rather than to rent seeking financial institutions so i'm on the side of the revolution with this because i think the incumbent financial institutions globally are doing a pretty terrible job and middle class and lower class families lose out and thankfully technology technology allows us to fix this yeah so fintech can remove a lot of inefficiencies in the system i'm super excited myself maybe as a machine learning person in the data oracles so converting a lot of our physical world into data so and have smart contracts on top of that so that no longer is there's this fuzziness about what is the concrete nature of the agreements you can tie your agreement to weather you can tie your agreement to the behavior of certain kinds of financial uh systems you can tie your behavior to i don't know uh i mean all kinds of things you can connect it to the body in terms of human um sensory information like uh you can make an agreement that if you don't lose five pounds in the next month you're going to pay me a thousand dollars or something like that i don't know it's a stupid example but it's not because like you can create all kinds of services on top of that you can you can just create all kinds of interesting applications that completely revolutionize how humans transact i think of course we don't want to create a world of chinese style social credit in which our behavior becomes so transparent to providers of financial services particularly insurers that uh when i try to go into the pub i'm i'm stopped from doing so every time you take a drink your insurance goes up right or my credit card won't work uh in certain restaurants because they serve you know ribeye steak i fear that world because i see it being built in china and we we must at all costs make sure that the western world has something distinctive to offer uh it can't just be oh it's the same as in china only the data go to to five tech companies rather than to xi jinping so i think the the way we need to steer this world is in the way that our data are by default vaulted on our devices and we choose when to release the data yes rather than the default setting being that the data are available that's important i think because it was one of the biggest mistakes of the evolution of the internet that that in a way the default was to let our our data be plundered it's hard to undo that but i think we can we can at least uh create a new regime that in future makes privacy default rather than open access default in the book doom the politics of catastrophe your newest book you describe wars pandemics and the terrible disasters in human history which stands out to you as the worst in terms of how much it shook the world and the human spirit i am glad i was not around in the mid 14th century when the bubonic plague swept across eurasia as far as we can see that was history's worst pandemic maybe there was a comparably bad one in the reign of the emperor uh justinian but there's some reason to think it wasn't as bad and the more we learn about uh the 14th century with the more we realized that it really was across eurasia and the the mortality was 30 in some places 50 in some places higher there were whole towns that were just emptied and when one reads about the black death it's an unimaginable nightmare of of death and madness in the death with flagellate orders wandering from town to town seeking to ward off divine retribution by flogging themselves people turning on the local jewish communities as if it's somehow their fault that must have been a nightmarish time if you ask me for an an also ran a runner-up it would be it would be world war ii uh in eastern europe and in many ways it might have been worse because for a medieval peasant the sense of being on the wrong side of divine retribution must have been overpowering in the mid-20th century you knew that this was man-made murder on a massive industrial scale if only if one reads grossman's life and fate just to take one example one enters a a hellscape that it's extremely hard to imagine oneself in so these are two of the great disasters of of human history and if we did have a time machine if one really were able to transport people back and and give them a glimpse of these times i think the post-traumatic stress would be enormous people would come back from those those trips even if it was a one-day excursion with guaranteed survival uh in a state of of utter shock you often explore counterfactual hypothetical history this which is a fascinating thing to do uh sometimes to a controversial degree and again you walk through that fire gracefully so let me ask maybe about uh world war ii or in general or what key moments in history of the 20th century do you think if something else happened at those moments we could have avoided some of the big atrocities stalin's holomore hitler's holocaust miles great chinese famine the great turning point in in world history is is august the 2nd 1914 when the british cabinet decides to intervene and what would have been a european war becomes a world war and with british intervention it becomes a massively larger and more protracted conflict so very early in my career i became very preoccupied with the deliberations on that day uh and the surprising decision that a liberal cabinet took to to go to war which you might not have bet on that morning because there seemed to be a majority of cabinet members who would be disinclined and only a minority including winston church who wanted to go to war so that's one turning point i often wish i could get my time machine working and go back and say wait stop just think about what you're going to do and by the way let me show you a video of europe in 1918 so that's one can we linger on that one that one uh a lot of people push back on you on in the because it's so difficult so the idea is if i could try to summarize and you're the first person that made me think about this very uncomfortable thought which is uh the ideas in world war one it would be a better world if britain stayed out of the war and germany won right uh thinking now in retrospect that the whole story of the 20th century thinking about stalin's rule of 30 years thinking about hitler's rise to power and the atrocities of the holocaust but also like you said on the eastern front the death of tens of millions of people through the war and also sort of the political prisoners and the suffering connected to communism connected to fascism all those kinds of things well that's one that's one heck of an example of why you're just like fearless in this uh particular style of exploring counterfactual history so can you elaborate on that idea and maybe why this was such an important day in human history this argument was central to my book the pity of war i i also did an essay in virtual history about this and it's always amused me that from around that time i began to be called a conservative historian because it's actually a very left-wing argument the people in 1914 who thought britain should stay at the war were the left of the labour party who split to become the independent labour party what would have happened well first of all britain was not ready for war in 1914 there had not been conscription the army was tiny so britain had failed to deter germany the germans took the decision that they could risk uh going through belgium using the schlieffen plan to fight their two-front war they they calculated that britain's intervention would either not happen or not matter if britain had been strategically committed to preventing germany winning a war in europe they should have introduced conscription 10 years before had a meaningful land army and that would have deterred the germans so the liberal government provided the worst of both worlds a commitment that was more or less secret to intervene that the public didn't know about in fact much of the liberal party didn't know about but without really the means to make that intervention effective a tiny army with just a few divisions so it's perfectly reasonable to argue as a number of people did in uh on august the 2nd 1914 that britain should not intervene after britain had not immediately intervened against the french revolutionary armies back in the 1790s it had played an offshore role ultimately intervening but not immediately intervening if britain had stayed out i don't think that france would have collapsed immediately as it had in 1870 the french held up remarkably well to catastrophic casualties in the first six months of the first world war but by 1916 i don't see how uh france could have kept going if britain had not joined the war and i think the war would have been over perhaps at some point in 1916. we know that germany's aims would have been significantly limited because they would have needed to keep britain out if they'd succeeded in keeping britain out they'd have had to keep britain out and the way to keep britain out was obviously not to make any annexation of belgium to limit german war aims particularly to limit them to eastern europe and from britain's point of view what was not to like so the russian empire is defeated along with france what does that really change if the germans are sensible and we can see what this might have looked like they focus on eastern europe they take chunks of the russian empire perhaps they create as they did in the uh in the piece of brest-litovsk an independent or quasi-independent poland in no way does that pose a threat to the british empire in fact it's a good thing uh britain never had had a particularly good relationship with the russian empire after all the key point here is that the germany that emerges from victory in 1916 has a kind of european union it's the dominant part of an enlarged germany with a significant missile europa whatever you want to call it customs union type arrangement with neighboring countries including one suspects austria-hungary that is a very different world from the world of 1917-18 the protraction of the war for a further two years its globalization which britain's intervention made inevitable as philip zeliko showed in his recent book on the failure to make peace in 1916 woodrow wilson tried and failed to intervene and broker a piece in 1916 so i'm not the only counterfactualist here the extension of the war for a further two years with escalating slaughter the death toll rose because the industrial uh capacity of the armies grew greater that's what condemns us to the bolshevik revolution and it's what condemns us ultimately to nazism because it's out of the experience of defeat in 1918 as hitler makes clear in mind camp that he becomes radicalized and enters the political realm take out those additional years of war and hitler's just a failed artist it's the it's the end of the war that turns him into the demagogue you asked what are the things that evolve avoid the totalitarian states as i've said british intervention for me is the most plausible and it takes out all of that malignant history that follows from the bolshevik revolution it's very hard for me to see how lenin gets anywhere if the war is over that looks like the opportunity for the the constitutional elements uh the liberal elements in in russia there are other moments at which you can imagine history taking a different path if uh the provisional government in russia had been more ruthless it was very lenient towards the bolsheviks but if it had just rounded them up and shot the bolshevik leadership that would have certainly cut the bolshevik revolution off one looks back on the conduct of the the russian liberals with the kind of despair at their their failure to see the scale of the threat that they face and the ruthlessness that the bolshevik leadership would evince there's a counterfactual in germany which is interesting i think the weimar republic destroyed itself in two disastrous economic uh calamities the inflation and then the deflation it's difficult for me to imagine hitler getting to be reich chancellor without those huge economic disasters so another part of my early work explored alternative policy options that the german republic the weimar republic might have pursued there are other contingencies that that spring to mind in 1936 or 38 i think more plausibly 38 britain should have gone to war the great mistake was munich hitler was in an extremely vulnerable position in 1938 because remember he didn't have russia squared away as he would in 1939. chamberlain's mistake was to fold instead of uh of going for going for war as church or rightly saw and and that there was a magical opportunity there that would have played into the hands of the german military opposition and conservatives to to snuff hitler out over czechoslovakia i could go on the point is that the history is not some inexorable narrative which can only end one way it's a garden of forking paths and at many many junctions in the road there were choices that could have averted the calamities of the mid-20th century i have to ask you about this moment before you said i could go on this moment of chamberlain and hitler snuff hitler out in terms of czechoslovakia and uh we'll return to the book doom on this point what does it take to be a great leader in the room with hitler or in the same time and space as hitler to snuff him out to make the right decisions what what is so it sounds like you put quite a bit of the blame on the man chamberlain and give credit to somebody like a churchill so what is the difference where's that line you've also uh written a book about henry kissinger who's an interesting sort of person that's been through throughout many difficult decisions in the games of power so what does it take to be a great leader in that moment that particular moment sorry to keep talking is fascinating to me because it feels like it's man on man conversations that define history well hitler was bluffing uh he really wasn't ready for war in 1938 the german economy was clearly not ready for war in 1938 and and chamberlain made a fundamental uh miscalculation along with his advisors because it wasn't all chamberlain he was in many ways articulating the establishment view uh and i tried to show in a book called war of the world how that establishment worked it extended uh through the bbc into the aristocracy to oxford there was an establishment view chamberlain personified it churchill was seen as a warmonger uh he was at his lowest point of popularity in 1938 but what is what is it that chamberlain gets wrong because it's conceptual chamberlain is persuaded that britain has to play for time because britain is not ready for war in 1938. he fails to see that the time that he gets that he buys at munich is also available to hitler everybody gets the time and hitler's able to do much more with it because hitler strikes the pact with with stalin that guarantees that germany can fight a war on one front in 1939. what does chamberlain do builds some more aircraft so the great mistake of the strategy of appeasement was to play for time i mean they knew all was coming but they were playing for time not realizing that hitler got the time too and after he partitioned czechoslovakia he was in a much stronger position not least because of all the resources that they were able to plunder uh uh from czechoslovakia so that was the conceptual mistake churchill played an heroic role in pointing out this mistake and predicting accurately that it would lead to war on worse terms what does it take it takes a distinct courage to be unpopular and churchill was deeply unpopular at that point people would listen to him in the house of commons in silence on one occasion uh lady astor shouted rubbish so he went through a period of being hated on the other thing that made churchill a formidable leader was that he always applied history to the problem and that's why he gets it right he he sees the historical problem much more clearly than than chamberlain so i think if you go back to 1938 there's no realistic counterfactual in which churchill's in government in 1938 you have to france collapse for churchill to come into government but you can certainly imagine a tory elite that's thinking more clearly about the likely dynamics they haven't seen this i guess problem of conjecture to take a phrase from kissinger which is that whatever they're doing in postponing the war has the potential to create a worse starting point for the war it would have been risky in 1938 but it was a way better situation than they ended up with in 1939 a year later you asked about kissinger and i've learnt a lot from reading kissinger and talking to kissinger since i embarked on writing his biography a great many years ago i think one of the most important things i've learned uh is that you can apply history to contemporary problems it may be the most important tool that we have in that kind of decision making you have to do it quite ruthlessly and rigorously and in the moment of crisis you have to take risk so kissinger often says in his early work the temptation of the bureaucrat is to wait for more data but ultimately the decision making that we do under uncertainty can't be based on data the problem of conjecture is that you could take an action now and incur some cost an avert disaster but you'll get no thanks for it because nobody is grateful for an averted disaster and nobody goes around saying wasn't it wonderful how we didn't have another 911 on the other hand you can do nothing incur no upfront costs and hope for the best and you might get lucky the disaster might not happen that's in a democratic system the much easier path to take and i think the the essence of leadership is to be ready to take that upfront cost avert the disaster and accept that you won't get gratitude if i may make a comment an aside about henry kissinger so he i think at 98 years old currently has still got it yeah he's brilliant it's very very impressive i can only hope that my brain has the same durability that his his does because it's a formidable intellect and it's still in in as sharp form as it it was 50 years ago so you mentioned eric schmidt's in his book they reached out to me didn't want to do this podcast and i'm i'm i know eric schmidt i've spoken to him before i like him a lot obviously um so they said we could do a podcast for 40 minutes with eric 40 minutes with eric and henry together and 40 minutes with henry so those are three different conversations and i had to like i had to do some soul searching because i said fine 40 minutes with eric we'll probably talk many times again fine let's talk about this ai book together for 40 minutes but i said what i wrote to them said i would hate myself if i only have 40 minutes to talk to henry kissinger as i had to hold my ground went back and forth and in the end decided to part ways over this and i sometimes think about this kind of difficult decision um in the podcasting space of when do you walk away because um there's a particular world leader that i've mentioned in the past where the conversation is very likely to happen and as as it happens those conversations can often be you know unfortunately this person only has 30 minutes now i know we agreed for three hours but unfortunately and you have to decide do i stand my ground on this on this point i suppose that's the thing that journalists have to think about right like um do i hold on to my integrity in whatever form that takes and do i stay in my ground even if i lose a fascinating opportunity anyway it's something i thought i thought about and something i think about and with henry kissinger i mean he's had a million amazing conversations in your biography so it's not like something is lost but it was still nevertheless to me some soul searching they had to do as a as a kind of practice for what to me is a higher stakes conversation i'll just mention is vladimir putin i can have a conversation with him unlike any conversation he's ever had partially because i'm a fluent russian speaker partially because i'm messed up in the head in certain kind of ways that make for an interesting dynamic because we're both judo people we both are certain kinds of human beings that can have a much deeper apolitical conversation i have to ask to stay on the topic of leadership you've uh in your book doom have talked about wars pandemics throughout human history and in some sense saying that all of these disasters are man-made so humans have a role in terms of the magnitude of the effect that they have on human civilization without taking cheap political shots can we talk about covid19 how will history remember the coven 19 pandemic what were the successes with what were the failures of leadership of of man of humans doom was a book that i was planning to write before yes the pandemic struck as a history of of the future based in large measure on science fiction it had occurred to me in 2019 that i had spent too long not reading science fiction and so i decided i would liven up my my intake by getting off history for a bit and reading science fiction because history is great at telling you about the perennial problems of power putin is always interesting on history he's become something of a historian recently with uh his essays and lectures but what history is bad at telling you is well what will the effects of this discontinuity of technology be and so i thought i need some science fiction to think more about this because i'm i'm i'm tending to miss the importance of technological discontinuity if you read a lot of science fiction you read a lot of plague books because science fiction writers are really quite fond of the plague scenario so the world ends in many ways in science fiction but one of the most popular is the lethal pandemic so when when the first email came to me i think it was on january the third from my medical friend justin stebing funny pneumonia and wuhan my antennae began to tingle because it was just like one of those science fiction books that begins in just that way in a pandemic as larry brilliant the epidemiologist said many years ago the key is early detection and early action that's how you deal with a novel pathogen and almost no western country did that we know it was doable because the time and ease and the south koreans did it and they did it very well but really no western country got this right some were unlucky because super spreader events happened earlier than in other countries italy was hit very hard very early for other countries the real disaster came quite late russia which has only relatively recently had a really bad experience the lesson for me is quite different from the one that most journalists thought they were learning last year most journalists last year thought trump is a terrible president he's saying a lot of crazy things it's his fault that we have high excess mortality in the united states the same argument was being made by journalists in britain boris johnson dot dot dot brazil bolsonaro dot dot dot even india narendra modi the same argument and i think this argument is wrong in a few ways it's true that the populist leaders said many crazy things and broadly speaking gave poor guidance to their their populations but i don't think it's true to say that with different leaders these countries would have done significantly better if joe biden had magically been president a year earlier i don't think the us would have done much better because the things that caused excess mortality last year weren't presidential decisions they were utter failure of cdc to provide testing that definitely wasn't trump's fault scott gottlieb's book makes that very clear it's just been published recently we utterly failed to use technology for contact tracing which the koreans did very well we didn't really quarantine anybody seriously there was no enforcement of quarantine and we exposed the elderly to the virus as quickly as possible in elderly care homes and these things have very little to do with presidential incompetence so i think leadership is of somewhat marginal importance in a crisis like this because what you really need is your public health bureaucracy to get it right and very few western public health bureaucracies got it right could the president have given better leadership yes his correct strategy however was to learn from barack obama's playbook with the opioid epidemic the opioid epidemic killed as many people on obama's watch as covert did on trump's watch and it was worse in the sense because it only happened in the u.s and each year it killed more people than the year before over eight years nobody to my knowledge has ever seriously blamed obama for the opioid epidemic trump's mistake was to put himself front and center of the response to claim that he had some unique insight into the pandemic and to say with every passing week more and more foolish things until even a significant portion of people who'd voted for him in 2016 realized that he'd blown it which is why he lost the election the correct strategy was actually to make mike pence the pandemic tsar and get the hell out the way that's what my advice to trump would have been in fact it was in february of last year so the mistake was to to try to lead but actually leadership in a pandemic's almost a contradiction in terms what you really need is your public health bureaucracy not to fuck it up and they really really fucked it up and that was then all blamed on trump yes you know jim fallows writes a piece in the atlantic that says well being the president's like flying a light aircraft it's pilot error and i i read that piece and i thought does he really after all the years he's spent writing think that being president is like flying a light aircraft i mean it's really nothing like flying a light aircraft being president is you sit on top of a vast bureaucracy with how many different agencies 60 70 we've all lost count and you're surrounded by advisers at least a quarter of whom are saying this is a disaster we have to close the borders and the others are saying no no we have to keep the economy going that's what you're running on in november so being a president in a pandemic is a very unenviable position uh because you actually can't you can't really determine whether your public health bureaucracy will get it right or not you don't think to push back on that just like being churchill in a war is difficult so leaving trump abiding aside what i would love to see from a president is somebody who makes great speeches and arouses the public to push the bureaucracy the public health bureaucracy to get their shit together to fire certain kinds of people to do i mean i'm sorry but i'm a big fan of powerful speeches especially in the modern age with the internet it can really move people instead the lack of speeches resulted in certain kinds of forces uh amplifying division over whether wear masks or not or all it's like it's almost like the public pick some random topic over which to divide themselves and there was like a complete indecision which is really what it was fear of the of uncertainty materializing itself in some kind of division and then you almost like busy yourself with the red versus blue politics as opposed to some i don't know fdr type character just stands and say uh fuck all this bullshit that we're hearing we're going to manufacture 5 billion tests this is what america is great at we're going to build the greatest testing infrastructure ever built or something or even with the vaccine development but that was what i was about to interject yes in a pandemic the most important thing is the vaccine if you get that right then you should be forgiven for much else and that was the one thing the trump administration got right because uh they went around the bureaucracy with operation warp speed and achieved a really major success so i think the paradox of of the the 2020 story in the united states is that the one thing that mattered most the trump administration got right and it got so much else wrong that was sort of marginal that we were left with the impression that trump had been to blame for the whole disaster which wasn't really quite right sure it would have been great if we did operation warp speed for testing but ultimately vaccines are more important than tests and this brings me to the question that that you raised there of polarization and why that happened now in a book called the square in the tower i argued that it would be very costly for the united states to allow the public sphere to continue to be dominated by a handful of big tech companies that this ultimately would have more adverse effects than simply contested elections and i think we saw over the past 18 months uh just how bad this could be because the odd thing about this country is that we came up with vaccines with 90 plus percent efficacy and about 20 of people refuse to get them and still do refuse for reasons that seem best explained in terms of the anti-vaxx network which has been embedded on the internet for a long time predating the pandemic reni diresta wrote about this pre-2020 and this this anti-vax network has turned out to kill maybe 200 000 americans who could have been vaccinated but were persuaded through magical thinking that the vaccine was riskier than the virus whereas you don't need to be in epidemiology you don't need to be a medical scientist to know that the virus is about two orders of magnitude riskier than the vaccine so again leadership could definitely have been better but the politicization of everything was not trump's doing alone it happened because our public sphere has been dominated by a handful of platforms whose business model inherently promotes polarization inherently promotes fake news and extreme views because those are the things that get the eyeballs on the screens and sell the ads i mean this is now a common place but when one thinks about the cost of allowing this uh kind of thing to happen it's now a very high human cost and we were foolish to leave uncorrected these structural problems in the public sphere that were already very clearly visible in 2016. and he described that like you mentioned that there's these networks they're almost like laying dormant waiting for their time in the sun and they stepped forward in this case and that those network effects just the service catalyst for whatever the bad parts of human nature i do hope that there's kinds of networks that emphasize the the better angels of our nature to to to quote steven pinker it's just clearly and we know this from all the revelations of the facebook whistleblower there is clearly a very clear tension between the business model of a company like facebook and the public good and they know that i just talked to the founder of instagram i i yes that's the case but it's not from a technology perspective like absolutely true of any kind of social network i think it's possible to build actually i think it's not just possible i think it's pretty easy if you set that as the goal to build social networks that don't have these negative effects right but if the business model is we sell ads and the way you sell ads is to maximize user engagement then the algorithm is biased in favor of fake news and extreme views but it's not it's so it's not the ads a lot of people blame the ads uh the the problem i think is the engagement and the engagement is just the easiest the dumbest way to solve the ads i think there's much different metrics that could be used to make a lot more money than the engagement in the long term it has more to do with planning for the long term so optimizing the selling of ads to make people happy with themselves in the long term as opposed to some kind of addicted like dopamine feeling and so that's to me that has to do with metrics and measuring things correctly and sort of also creating a culture with what's valued to have difficult conversation about what we're doing with society all those kinds of things and i i think once you have those conversations this takes us back to the university of austin kind of once you have those difficult human conversations you can design the technology that will actually make for help people grow become the best version of themselves help them be happy in the long term what gives you hope about the future as somebody who studied some of the darker moments of human history what gives you hope a couple of things first of all the united states has a very unique operating system which was very well designed by the founders who thought a lot about history and and realized it would take quite a a novel design to prevent the republic going the way of all republics because republics tend to end up as tyrannies for reasons that were well established by the time of the renaissance and it gives me hope that this design has worked very well and with student enormous stress test stress test in the last in the last year i became an american in 2018 i think one of the most important features of this operating system is that it is the magnet for talent here we sit uh part of the immigration story in uh you know in a darkened room with funny accents talking to russians walk into a recording studio and talk about america it's it's very much like a joke and elon's a south african and so on and thiel is a german and we're we're extraordinarily fortunate that the natives let us come and play and and play in a way that we could not in our countries of birth and as long as the united states continues to exploit that superpower that it is the talent magnet then it should out innovate the totalitarian competition every time so that's that's one reason for being an optimist another reason and it's quite a historical reason as you would expect from me another reason that i'm optimistic is that my kids give me a great deal of hope they range in age from 27 down to four but each of them in their different way seems to be finding a way through this crazy time of ours without losing contact with that culture and civilization that i hold dear i don't want to live in the metaverse as mark zuckerberg imagines it to me that's a kind of ghastly hell i think western civilization is the best civilization and i think that almost all the truths about the human condition can be found in western literature art and music and i think also that the the civilization that produced the scientific revolution has produced the great problem-solving tool that eluded the other civilizations that never really cracked science and what gives me hope is that despite all the temptations and distractions that their generation [Music] had to contend with my children in their different ways have found the found their way uh to literature and to art and to music and and they are civilized and i i don't i don't claim much of the credit for that i've done my best but i think it's deeply encouraging that that that they found their way to the things that i think are indispensable for a happy life a fulfilled life nobody i think can be truly fulfilled if they're cut off from the great body of western literature for example i've thought a lot about elon's argument that we might be in a simulation no no there is a simulation it's cold literature and we just have to decide whether or not to enter it i'm currently in the midst of the later stages of of proust's great allah and observation of human relationships is perhaps more meticulous than that of any other writer and it's impossible not to find yourself identifying with marcel and his obsessive jealous relationships particularly with alberti it's the simulation and you you decide i think as a sentient being how far to in your own life reenact these more profound experiences that others have written down one of my earliest literary simulations was to reenact jack kerouac tripping on the road when i was 17 culminating and getting very wasted in the hanging gardens of zochimilco not to be not to be missed and it hit me just just as i was reading proof that's really how to live a rich life that one lives life but one lives it juxtaposing one's own experience against the more refined experiences of the great the great writers so it gives me hope that my children do that a bit do you include the the russian authors very much in the canon yes i don't read russian um but i was entirely obsessed with russian literature as a schoolboy i read my way through dostoyevsky tolstoy turganyev i uh check off i think um of all of those writers tolstoy had the biggest impact because at the end of war and peace there's this great essay on historical determinism which i think was the reason i became a historian but i'm i'm really temperamentally a kind of togenyev person oddly enough i i think if you if you haven't read those novelists i mean you can't really be a complete human being if you haven't if you haven't read the brothers karamazov you will not really you're not grown up and so i think i think in many ways those are the greatest the greatest novels raskolnikov's remember raskolnikov's nightmare at the end of crime and punishment in which he imagines in his dream a world in which a terrible virus spreads do you remember this and this virus has the effect of making every individual think that what he believes is right and in this self-righteousness uh people fall on one another and commit appalling violence that's raskolnikov's nightmare and it's a prophecy it's a terrible prophecy of of russia's future yeah it's uh and coupled with that is probably the i also like the french the existentialist all that that the full spectrum and germans hermann has said and just that range of human thought has expressed the literature it's fascinating i really love your idea that the simulation like one way to to live life is to kind of explore these other worlds and borrow from them yes wisdom that you then just map onto your own lives you almost like stitched together your life with these kind of pieces from literature the highly educated person is constantly struck by illusion everything is an allusion to something that one has read and that is the simulation that's what the real metaverse is it's the imaginary world that we enter when we read empathize and then recognize in our daily lives some scrap of the shared experience that literature gives us yeah i think i've uh aspired to be the idiot from prince mishkin from dostoevsky and in aspiring to be that i have become the idiot i feel at least in part um what you mentioned the human condition does love have to do what role does it play in the human condition friendship love love is the drug kind is uh this was a great roxy music line uh that brian ferry wrote and love is uh the most powerful and and dangerous of all the drugs uh the um the driving force that overrides our reason and of course uh it is the it is the primal it's the primal urge so what a civilized society has to do is to prevent that drug that primal force from creating mayhem so there have to be rules uh like monogamy and rituals like like marriage that that reign love in and make the the addicts uh at least more or less uh under control and i i think that's that's part of why i'm i'm a romantic rather than a you know steve pinker enlightenment rationalist because the romantics realized that that love was the drug it's like the difference in sensibility between uh handel and wagner and i i had a vagnerian phase when i was an undergraduate i still remember thinking that in in uh as old as libra's toad that wagner had got the closest to sex that anybody had ever got in in music or perhaps to love i'm i'm lucky that i love my wife and that uh that we were by the time we met you know smart enough to understand that that love is a drug that you have to kind of take in in in certain careful ways and that it works best in the context of a of a stable family that's that's the key thing that one has to sort of take the drug and then submit to the the the conventions of of of marriage and family life i i think in that respect i'm a kind of tamed romantic contain romantic that's how i would like to think about it and that's the degree to which your romanticism is tamed can be then channeled into productive work that's why you're a historian and a writer is the breast is that love is channeled through the writing so if you're going to be addicted to anything be addicted to work i mean we're all addictive but yeah the thing about workaholism is that it is the most productive addiction and uh and rather that than drugs or booze so i i'm i'm yes i'm always trying to channel my anxieties in into work i learnt that at a relatively early age it's a sort of massively productive way of coping with the inner demons and again we should teach kids that because let's come back to our earlier conversation about universities part of what happens at university is that adolescents have to overcome all the inner demons and these include deep insecurity about one's appearance about one's intellect and then madly raging hormones that cause you to behave like a complete fool with the people to whom you're sexually attracted all of this is going on in the university how can it be a safe space it's a completely dangerous space by definition yeah so so yeah teaching young people how to manage these storms uh you know that's part of the job and and we've we're really not allowed to do that anymore because we can't talk about these things for fear of the title nine officers kicking down the door and dragging us off in chains and like you said hard work and something you call work ethic in civilization is um is a pretty is a pretty effective way to achieve i think a kind of happiness in a world that's full of anxiety or at least exhaustion so sleep well well there is there's a beauty to the exhaustion too that's why running this manual work that some some part of us is built for that right i mean we are products of of evolution and our adaptation to a technological world is a very imperfect one so hence the kind of masochistic urge to to run uh i i'd like outdoor exercise i don't really like gyms so i'll go for long punishing runs in in woodland hike up hills i like swimming in lakes and in the sea because there just has to be that physical uh activity in order to do the good mental work and so it's all about trying to do the best work that's my sense that we we have some random allocation of talent you kind of figure out what it is that you're relatively good at and you try to do that well i think my father encouraged me to think that way and you don't mind about being average at the other stuff the kind of sick thing is to try to be brilliant to everything i hate those people you should really not worry too much if you're just an average double bass player which i am or kind of average skier which i definitely am doing those things okay is is part of leading a rich and fulfilling life i was not a good actor but i got a lot out of acting as an undergraduate turned out after three years of experimentation oxford that i was broadly speaking better at writing history essays than uh my peers and that was my edge that was my comparative advantage and so i've just tried to make a living from from that slight edge yeah that's a beautiful way to describe a life is there a meaning to this thing is there a meaning to life what is the meaning of life i was brought up by a physicist and a physician they were more or less committed atheists who had left the church of scotland as a protest against sectarianism in glasgow and so my sister and i were told from an early age life was a cosmic accident and that was it there was no great meaning to it and i i can't really get past that isn't there beauty to being an accident at a cosmic scale yes i wasn't taught to to feel negative about that and if anything it was a frivolous a frivolous insight the whole thing was a kind of joke um and and i think that atheism isn't really a basis for ordering a society but it's it's been all right for me i don't have a kind of sense of of a missing religious faith for me however there's clearly some embedded christian ethics in the way my parents lived and so we were kind of atheist calvinists who had kind of deposed god but carried on behaving as if we were members of the elect in in a moral universe so that's kind of um the state of mind that i was left in and i i think that we aren't really around long enough to claim that our individual lives have meaning but what edmund burke said is true the real social contract is between the generations between the dead the living and the unborn and the meaning of life is for me at least uh to live in a way that honors the dead seeks to learn from their accumulated wisdom because they do still outnumber us they outnumber the the living by quite a significant margin and then to be mindful of the unborn and our our responsibility to them writing books is a way of communicating with the unborn it may or may not succeed and probably won't succeed if my books are never assigned by work professors in the future so what we have to do is more than just write books and record podcasts there have to be institutions i'm 57 now i realized recently that succession planning had to be the main focus of the next 20 years because there are things that i really care about that i want future generations to have access to and so the meaning of life i do regard as being intergenerational transfer of wisdom ultimately the species will go extinct at some point even if we do colonize mars one senses that physics will catch up with this particular organism but it's in the pretty far distant future and so the meaning of life is to make sure that for as long as there are human beings they are able to live the kind of fulfilled lives ethically fulfilled intellectually fulfilled emotionally fulfilled lives that civilization has made possible it would be easy for us to revert to the uncivilized world there's a fantastic book that i'm going to misremember milos is the captive soul the captive mind rather which has a fantastic passage here he was a polish intellectual who says americans can never imagine what it's like for civilization to be completely destroyed as it was in poland at the end of by the end of world war ii to have no rule of law to have no security of even person never mind property rights they can't imagine what that's like and what it will lead you to do so one reason for teaching history is to remind the lucky uh generation z members of california that that civilization is a thin film and it can be destroyed remarkably easily and to preserve civilization is a tremendous responsibility that we have it's a huge responsibility and we must we must not destroy ourselves whether it's in the name of of wokism or the pursuit of the metaverse preserving civilization and making it available not just to our kids but to people we'll never know generations ahead that's the meaning and do so by studying the lessons of history right not only studying them but then acting on them for me the biggest problem is how do we apply history more effectively it seems as if our institutions including government are very very bad at applying history lessons of history are learnt poorly if at all analogies are drawn crudely often the wrong inferences are drawn one of the big intellectual challenges for me is how to make history more useful and this was the kind of thing that professors used to hate but really practically useful so that policymakers and citizens can think about the decisions that they face with a more historically informed body of knowledge whether it's a pandemic the challenge of climate change what to do about taiwan i can't think of a better set of uh of things to know before you make decisions about those things than the the things that history has to offer well i love the discipline of applied history basically going to history and saying what are the key principles here that are applicable to the problems of today right and how can we solve that great philosopher of history r.g collingwood said in his autobiography which was published in 1939 that the purpose of history was to reconstitute past thought from whatever surviving remnants there were and then to juxtapose it with our own predicament and that's that juxtaposition of past experience with present experience that is so important we don't do that well uh and indeed we've 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 and castigate uh the the dead for their racism and sexism and transphobia and whatnot and that's exactly wrong our mission is to go back and try to understand what it was like to live in the 18th century not to go back and condescend to the the people of the past and once we've had a better understanding once we've seen into their lives read their words tried to reconstitute their experience to come back and understand our own time better that's what we should really be doing but academic history has gone completely haywire and it does almost the exact opposite of what i think it should do and by studying history walk beautifully gracefully through the simulation as you described by mapping the lessons of history into the world of today we have virtual reality already in our heads we do not need oculus in the metaverse this was an incredible hopeful conversation in in many ways that did not expect i thought our conversation would be much more about history than about the future and it turned out to be the opposite thank you so much for talking today it's a huge honor to finally meet you to talk to you thank you for your valuable time thank you lex and good luck with putin thanks for listening to this conversation with neil ferguson to support this podcast please check out our sponsors in the description and now let me leave you with some words from neil ferguson himself no civilization no matter how mighty it may appear to itself is indestructible thank you for listening and hope to see you next time