← History 102 with WhatifAltHist's Rudyard Lynch and Austin Padgett
History 102 with WhatifAltHist's Rudyard Lynch and Austin Padgett
Explaining the History of Trade (feat. Ryan Petersen of Flexport)
01:26:57
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- [00:03]
A
Welcome to History 102, where YouTube creator what Ifalth Hists Rudyard lynch and I dive into critical moments in history and tease out patterns to help us predict the future.
- [00:12]
B
Let's jump right in.
- [00:15]
A
Hi, everybody, I'm Rudyard lynch and we have a special episode today where I'm bringing on Ryan Peterson from Flex Sport, and he's working on a historical atlas of trade. And so you guys can check that if you'd like. I'll leave the link in the description. And today's topic is going to be on global trade over history and its implications for the development of world civilization. First of all, thank you so much for coming.
- [00:46]
C
Yeah, it's great to be here. Big fan of both your pods, but I love the history one the most.
- [00:50]
A
Thank you. And today I'm going to start with sort of the data science side of history. And this is a book by Angus Madison, Contours of the World Economy, about looking at sort of macro data's impact on the course of human history. And this is one of the sort of, it's a very valuable lens that you can use to study the world. The 20th century, very much the best thing 20th century history did was just get lots of statistics on everything. And there's a certain degree of sort of inner truth you can find from looking at these historic patterns. One example we'll get to later is one of my favorite history books ever and my favorite economic history, the Great Wave by David Hackett Fisher, which correlates inflation over history with social collapse. But there's several different sort of themes you can tease out from looking at historic data on trade to understand how the world works. And the first being that just the sheer scale of of growth in global trade and GDP in the last century is utterly insane, especially so the last 40 years where if you there's a great source called Our World and Data, where they map global economic trends on an international scale and especially so in the third world, the growth in economic scale since the end of the Cold War is completely unprecedented. And I don't see anyone in the west talking about it. And do you have any thoughts about that? And I also meant to say, what would you like to say to introduce yourself for the audience?
- [02:34]
C
Yeah, sure. Well, I'm Ryan. I'm the founder and CEO of Flexport. Flexport is one of the largest logistics companies in the world. We're also a tech company and helps businesses ship cargo around the world. But more so relevant for this audience, I'm a large consumer of history and of course Therefore, my interests converge at like, the international trade and the history of trade and empire and where these things converge. I find it just to be a fascinating area to dig into on that topic. Yeah, I mean, the big thing you say since the end of. Did you say since the 60s or something? The end of the war? I mean, the big innovation there is like in the mid-60s, you had the invention of the shipping container, and it brought down the cost of everything by about 90% to ship something across the world just made it so easy and so standard. So, yeah, you had this outgrowth. But I don't know, it's interesting to hear you say it's unprecedented because you've had. Maybe it's just the nature of exponential growth, that it's grown for a long time since really, since the Mongol invasions or something. You've had this steady growth, probably. I don't know. I've seen it estimated at 4% annually for something like 800 years, which 4% doesn't seem like much for those of us in Silicon Valley looking at hockey stick growth curves and stuff. But if you put it together for 800 years, starts to become a very big number by the end of that.
- [03:51]
A
There's a few threads I'd tease out there, one of which is, so the shipping container revolution was really important and people don't talk about it. And there's a great book called the Sea in Civilization by Lincoln Payne. It's always like the 11th best history book I've read. It always gets whatever is right beneath my top 10 list. So I never recommend it. But it's a history of global shipping trade. And he talks about how the revolution in scale for shipping since that time period has been enormous and it allows the globalized economy. But another part of it was we used to have a much bigger naval culture where you needed a lot of people to sort of unload a ship because they'd go on and off and take everything individually out of the ship. But with the shipping containers, you can operate at a vastly higher scale.
- [04:46]
C
But.
- [04:46]
A
But it destroyed sort of the naval tradition of these longshoremen. And my grandfather was actually a longshoreman before World War II, when he was living in sort of the Irish ghetto of Jersey City. And so there was a real culture around that. And we've become significantly more. We've become significantly more dependent on global trade, while at the same time devaluing the same way. We don't think about it because not that many humans are involved. So it's this underlying humming thing that if you got rid of it would be billions of deaths. But we don't have the. It's something, it's one of the very many things that keeps humming on in the background. And I think the really impressive thing about our society is the sheer scale it can operate under. People don't understand the level of economic complexity of Walmart, but Walmart is a legitimate incredible operation. And I'd be curious what your thoughts on the Danish firm Maersk are but for comparing the pre modern to the modern world. For them they had economic growths equivalent in sort of their perception to us. Where as an example the entire world in the Roman empire had like 300 million people. And once you're at the jump from the industrial revolution till the present is 800 million to 8 billion. And so when you're operating at these significantly higher numbers, the exponential growth rate for the entire system is so much larger. Where if you compare pre industrial economies to modern economies there's a sort of deceptiveness partly for currency reasons, where like a penny was a significant amount of money in medieval England. So you can't compare the two economic scales where pennies are real money to one where they're none. But the industrial world is so big and it's all a money oriented economy that the numeric scale of appears so much larger. Where if you look at the Angus Madison or our world and data stats, the pre industrial world might be like 100th the economic size of the post industrial world. But we forget the pre industrial world had their own rich economies, they had lots of wealthy people, they had complex societies that went back thousands of years. So whenever you look at a statistic you have to be careful. Is the number deceiving me? Is me using this metric tricking me?
- [07:11]
C
Yeah, I always find this really interesting when you read history books and they try to say oh, what's that worth in today's dollars? And I like older history books, sort of like I'm a big fan of Will Durant. And so if you read a Will Durant book, he's always sort of translating it to today's dollars. But then he's writing in like, I don't know, the book started in 1930 and ended in 1970 or something. So you're like what does that actually mean? And it's very hard to relate to. I once did this sort of very amateur thing where I found how much a Roman soldier was paid in gold and you could find the weight. So you could be like, okay, how much is that much gold worth today? Because that seemed like something a little bit more comparable. It was only 2x worth more 2x today. When I translated to real term salary, what someone would be paid today. And on the one hand I was like, oh man, gold was a terrible investment. On the other hand, anything else you invested in got completely wiped out between then and now and is worthless. So maybe gold was a great one. And I think gold is really interesting because you find these. The soldiers would be paid in gold and they would often bury their salary underground before they went to war and then die. So you're finding these hoards of gold, they've been found all over the world. And it's really interesting way to look at the interconnectivity of the ancient world. Where you see where Roman coins. There have been more Roman coins, for example, found in China than in Ireland. You can sort of see the interconnectivity of the Roman world. And we think that it's like a new thing that China and India and things were connected to Rome. But of course they were very interconnected. And the Romans were sailing up and down the Red Sea into the Indian Ocean all the time.
- [08:46]
A
Yeah, there's these huge hordes of Islamic gold in Scandinavia from the Viking period and even the British Isles, because the Vikings had an enormous trade with the Islamic world, mostly for slaves and furs and that stuff. And you also have medieval Islamic coins from a thousand years ago in Australia. And the thing with a lot of the pre modern world is certain small intrepid populations went very far. For example, we know for proof that the Phoenicians sailed around the bottom of Africa because they have accounts of the southern hemisphere that only make sense if you've been to the southern hemisphere and you actually can hug the entire coast of Africa with ancient technology, although it's quite difficult. But the Phoenicians, starting in Lebanon, made it out to India and Britain and the Atlantic. Some theorize the Phoenicians made it to America. The Vikings, we have a Buddha statue from India that we found in Scandinavia. And we know the Vikings made it out to Central Asia. They made it out to America. Vinland in the Vinland saga is identical to New York City. And then the Vikings made it down to North Africa and the Canary Islands. When the Vikings talked about black people, they called them blue men, because in Viking culture the term black was like for. They use it for dwarves and for mythical creatures or as an example. People often forget how huge medieval Asian trade was. Where the Indian Ocean trade, by some metrics was the wealthiest on Earth and medieval China was sort of an economic titan where we have records of them getting luxuries from off the coast of Australia, like sort of exotic sea slugs or certain types of bird feathers. We have some records that the Chinese explorers may have found Mexico, where they talk about a land called Fusong with like, with jade dragons and Mexican like cultures and pyramids and. And the Chinese made it out to Kenya and the west while they were dependent on like frankincense and myrrh and these sorts of incenses from Arabia. And so you can actually correlate political instability and political unification in Southeast Asia in the pre modern period based on China's economy. Because Southeast Asia was so dependent on trade from China that when China had a civil war, the Southeast Asian governments would collapse. And this is a consistent them with dependent economies where Latin America is very similar, where you can predict if Colombia is a democracy based off the price of coffee. When coffee price is low, Colombia cannot sustain democracy. When coffee price is high, Colombia can.
- [11:40]
C
Actually I'm very curious about this intersection between trade and empire and where political because some empires been built on trade. I think there's many examples of those where they're just the Venetians obviously and probably the British Empire given its colonial reach. But to what extent is that the foundational form of empire versus I don't think you would say that the Chinese were empires built on international trade. And yet of course prosperity, at least to prosperity, which if the government's able to tax it can help with political power and create that. How do you think about that intersection between trade and empire?
- [12:15]
A
You have to remember that reality is permeable and multifaceted. So trade is a huge component in the success of empires. And it depends to the degree on context for the society or whatever. But I was saying before we started the show I have a term called follow the dao to wealth and wisdom. And that's the Dow Jones or the index of top performing companies and then the Dao de Ching, which is a Chinese concept for sort of the rhythm of the universe, where in Chinese philosophy if you go against the dao, reality punishes you and if you go with the dao, it works. And so the dao is sort of like the stock market where reality has its own currents and those who follow the currents get rewarded and those who don't. And so successful trade is a chicken and egg phenomena with the successful civilization. And it follows the same rhythmic patterns as civilizational development, where you had a fairly big Bronze Age trade network which stretched with The Middle east as its center, amber from Scandinavia. Then they were trading out to Pakistan, down to Kush, which is like Kenya. So the Bronze Age had a complex trade system with Babylon as its center. And Egypt was a socialist state controlled economy without a private sector until a certain period where Egypt had to integrate with the rest of the Bronze Age order. And that weakened Egypt's society with the pharaoh's godhood. Then you had the Bronze Age collapse. Then for civilizational Cycle two, you saw the Greeks and the Phoenicians rebuild a trade system that culminated in what McNeill calls the classical ecumene, or a huge trade system that stretched from Britain in the west to Korea in the east, where you had the Han Dynasty or as some call it, handy nasty on one side of Eurasia and the Roman Empire and the other, and between a variety of states where you just had the origins of the Silk Road, where Romans made it to China, a Chinese guy made it to Iraq. Then that world fell with the fall of Rome and the Dark Ages. Then you see the medieval ecumene which was unified most so by the Mongol Empire, but it stemmed back earlier. Islam was a big conduit. And so as of the year 1500, you have a unification of the Europeans, of the Eurasian system, from Ireland to Japan and from Java to Russia. And European colonialism happens, which radically shifts the game because it moves from a world where, from Angus Madison's data, the center of the world's economy was in Afghanistan, because Afghanistan is Eurasia's midpoint. It's the midpoint of the big four civilizations of the west. Or Europe is the Middle East, India and China. To one where the economic center of the world moved to first Europe and then briefly Greenland, because America was half of the world's economy after World War II. And where it's going to where the center of the global economy will stabilize from now on will be determined by choices we make. Now, will it return to Afghanistan as Asia gains ascendancy, or will the west be able to maintain economic dominance or will it go somewhere else?
- [15:41]
C
Where do you think on that? The one part that really I think for a lot of people where global trade we think of start of globalization is that European colonial of the age of exploration finally opening up the Americas and the sea route to the east, the sea routes to the world, really, where do you think? We had Marco Polo, he made the Silk Road famous, he made the east famous in the west and people could read about it. And then you had sort of this Islamic Iron curtain that shut down Those trade routes so Europeans couldn't go there. How important was that in telling the Portuguese, hey, we need to start Henry the Navigator sailing down the coast? Or is that just like a convenient narrative ex post that that's what kicked things off? Is that this desire to return, did they know they were doing that? As the Portuguese were starting to explore, were they consciously trying to make it to the East?
- [16:30]
A
There's two themes I'll pull out here. The first, and this is something I've been thinking about for weeks, that societies are either built for travelers or locals. And that matters. And societies tend to oscillate between them. Where the Soviet Union was a society built for locals, where the Soviet Union was a sort of post hoc justification for we are ethnic Slavs, we are Russian peasants, we're friggin tired of a society that simps for Western Europe so much because the czars made Russia a society that West Europeans could enter very easily to modernize the country. And that worked. But it built up enormous resentment among Russia's majority serf population who are frequently treated like second class citizens. So czarist Russia, which against the old narratives was actually a rapidly industrializing, developing, liberalizing country. If the current statistical, if the statistical trajectory before World War I had continued, Russia would be a first world country. What the Soviets did is made incentives where there was no reason for productivity increases, so the Soviets would shove more inputs into the economy without equivalent outputs. And so what you're seeing here is this is a very consistent thread over history where Wokeness is actually a society in its very twisted, paradoxical way for locals, because their worldview only makes sense for a small managerial class. Progressive types of. And they're using foreigners as a wedge for that. So it's made for someone with a highly specific worldview. And Wokeness is designed to. I'm sure I want to talk about this, but I have several other themes I want to hit too. But wokeness is designed so that you can make highly arbitrary rules so a small managerial class can maintain total power. And then they use foreigners as a paradox to throw people off from what they're doing. They're pretending to be inclusive so that they can actually maintain a very tight control on power. As Aristotle said, tyrants bring in foreigners to rule their nations so they don't have to be responsible to the local population. We'll get back to the conversation in a moment after a word from our sponsors.
- [18:57]
B
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- [20:52]
C
So bring us back to the Portuguese and Henry the Navigators. They're trying to bring this.
- [20:56]
A
What I was saying was societies alternate between insiders and outsiders. Where the Taliban's an example of a society being for insiders. Societies go between these of we're going to have an ideologically pure society where if you're an outsider, you can't enter. And then they alternate between societies that are open for travelers. And so it's this sort of paradox and there's issues with both a society which is purely open to outsiders has no soul, and a society which is purely for insiders will die out due to its stultification. And these are the rhythmic patterns of history. You go out to one, you loop back to another, vice versa. And so my read on the European Age of Discovery was this was an emergent phenomena from Europe as a society. And I think the different European countries, they were all doing this. The Spanish happened to reach the New World first, but we forget that within five years of Columbus's discovery of the New World, the English happened to reach Newfoundland, and the Portuguese happened to reach Brazil. And a lot of historians think that the Europeans already knew about the New World before Columbus. It's just due to the incentive structures of European governments. They would hide their navigational charts from other countries until the call was bluffed and they would cease to reign. With Henry the Navigator, they were trying to circumnavigate Africa from the first because their goal was to circumnavigate Islam to avoid the middlemen who were controlling the trade system. And they were also trying to reach the immortal Christian wizard Prester John, who could lead a crusade against the Muslims. And they had very broad aspirations. And you have to remember that the Europeans are the descendants of the Vikings, the Greeks, and the original Indo Aryans, where this is a population that consistently sort of. That consistently goes to the edge of things, that's just constantly sort of breaking out across continents. And so I see the European age of exploration as a sort of outcome of the European society making a series of decisions where it just had so much energy it couldn't help itself.
- [23:29]
C
Yeah. And so as they take us through, so as they reach the Indian Ocean, how much of it? It was just like immediate. I think you had this idea that Venice was dominating the trade route with those middlemen and being rich and that immediately the power shifted to the Atlantic powers. But I think actually it took longer than that, that Venice still continued to do reasonably well for a while. But imagine you're living through that time. Is it that immediately the world has changed or you don't notice it until a hundred years later or even longer than that.
- [24:00]
A
Yeah. So this speaks to one of the Angus Madison points. And I consider this like a historically actually point, you know, the actually meme.
- [24:09]
C
Oh, yeah, of course.
- [24:10]
A
So for those that don't know, actually, is when you have a sort of fat Reddit nerd make a sort of autistically correct point that misses the point. And so one of the things that historians have recently said is that China was the biggest economy until the middle of the 19th century on Earth, or that Asia was a majority of the world's economy until even the Industrial revolution. And that is statistically true. Where you have these great Asian civilizations where by some metrics, the Indian Ocean trade system was the wealthiest on Earth, where you had horses going from Arabia to India, frankincense and myrrh going from Somalia to China, you have the luxuries and the sandalwood of Southeast Asia. But at the same time, within like 10 years of entering the Indian Ocean or like 20 years, whatever. The Portuguese had a complete throttle on the trade or the Europeans totally remade the world. Where in the 1800s when these historians argue that Asia, a lot of historians would say that 18th century China, early 19th century China had a civilizational level approximate to Europe because they had similarly sized economies. They were both advanced, urban, literate, educated societies. But that covers up the point that the English could completely destroy the Chinese nation and pull China to a standstill without barely exerting a sweat in the Opium wars in the early 19th century. So that that shows how numbers can often obfuscate an underlying reality that Europe won in the age of exploration. And it's interesting where a lot of people did not understand the implications of the European age of exploration at the time. It wasn't a huge effect on the Italian Renaissance as an example. And it sort of shows how close minded a lot of people are. Or it wasn't a big concern for the Reformation where it's often very forward thinking people who can understand the future but most people in a society can't. Where they just thought of it as oh, faraway lands. But educated people figured out the implications. Where a big part of rejecting Aristotle and Plato and Scholasticism for new science was if the ancients didn't know about the New World, they didn't know everything. And the final thing is you are correct that Italy and Venice maintained wealth after the period of the European discovery of the New World where Italy was wealthy through the mid to late 17th centuries. That's a Fernand Braudel point. Italy was very wealthy past the thirty Years War. The point Will Durant has said is the thing that made Italy poor was the integration of Spanish authoritarian sort of monopolistic regulatory structures which shut down free competition. Because keep in mind Switzerland, which is an on the coast is very wealthy. Denmark, Sweden which are off or at least Sweden in a lot of places in central and west sort of central Europe like Austria or Germany, Prussia, Czechia are wealthy powerful societies. And so inside Europe, even if you're not directly on the coast or on the western front of Europe, if you're smart you can catch up. And Italy started slipping. But if Germany or Prussia could be powerful and they're not on the western shore of Europe, Italy could have too.
- [27:46]
C
Yeah, and I think Braudel actually talks about that. Much of the Spanish exploration was financed by Florentine banks and the Genoese had big active a lot of the names even in the, of course Columbus, but many others were Italians. And if you actually go look at their Financing international logistics was highly risky. It was the original venture capital. Right. I mean only a small number of your ships would come back, but they would make you 10x returns or more. The banks and the Florentines and the Venetians were just very good at this. Even as they lost monopoly control over the trade.
- [28:24]
A
They were, they were the people who integrated these institutions into Europe, often from the Muslim world and the. So an example of sort of weird statistics is that in the 14th century where Florence was the financial capital of Europe and the Medicis, the ruling family of Florence, who funded much of the Renaissance, they were military dictators who were former. Sorry, they were bankers who installed themselves in power because the banks had so much power they could just become rulers. And Florence had a higher total GDP than England's did, which doesn't actually make sense unless you realize that pre industrial economies don't count stats the way we do. Because Florence I think had like 100,000, maybe less people than that in total city state. England had like 2 to 4 million. And England as a country was significantly more powerful. England nearly conquered France. They had a trade system from Morocco to Russia, where in reality England was a significantly more important country than Florence. But most of England was not in a moneyed economy. They operated through credit systems. And David Graeber talks about this, the alternation between credit based economies and bullion based economies. And so the English economy wasn't measured in coins because it was an impersonal sort of. They had a form of cash where it was an IOU system inside villages and local feudal lands. And it took some time for coin based economies to trickle into north Europe. But it did by the end of the Middle Ages, where coins were initially used for military ventures. And parts of the reason the Holy Roman Emperor kept fighting in Italy was to get the coins in Italy. But Florence's economy due to banking was coinbase. And a lot of the dynamics of early modern Europe were, were financed by these banks. Practically every different endeavor you could think of. Between religious wars. There was a huge bank failure in 14th century Italy because they loaned to the king of England for the Hundred Years War. And the king of England, having an army, just said, no, I'm not going to pay you. Which shut off all of the Italian banks in the 14th century, except the one that survived, that forgot. And then banking crossed the Alps to first. Lyon was the financial capital of Europe at a certain point in the 16th century because it was across the Alps from Italy into France. And Lyon's in a very geographic position and Then I believe Augsburg in Germany was the financial capital of Europe in the 16th century. And is it the Fuggers?
- [31:03]
C
I think it's the Fuggers, but yeah, yeah, yeah.
- [31:05]
A
Damn.
- [31:06]
C
They're still around. By the way, they have a website, you can check them out. They own a lot of forests in Germany. I love forests, so it's interesting. Okay, coins. I think maybe that's a good segue to what are the technological innovations that have enabled the growth of trade that have been the most important? Because it is, obviously it's dependent on trade, the invention of the boat itself. I'd love to meet the guy who invented the boat 25,000 years ago. What a genius that was. But you mentioned coins. What do you see? How important is that? The technological evolution and development.
- [31:37]
A
It's interesting. We actually have deep, deep sea fishing records from the last ice age. We have some genetic. The lasso caves in France, they portray deep sea animals. So. And keep in mind, if you have a canoe, you can sail pretty far out. And my ancestors potentially for thousands of years were fishermen off the west coast of Ireland. And I sometimes wonder what their life would be just out in the water. Lynch is Gaelic for fishermen. And Irish last names are 2,000 years old. So maybe my. I know we were fishermen in the 19th century, but were we fishermen for 2,000 years? That tangent aside, by the way, this.
- [32:14]
C
Is why it always angers me, this whole Bering straight land bridge theory. It just annoys me because, like, couldn't they have just paddled a canoe? Why did we need a land bridge to get over to America?
- [32:24]
A
It's like there was this huge sort of genetic issue where Native Americans are about a third sort of European esque ancestry, and that's biggest among the Ojibwa of Canada or Cherokee or Iroquois. And we looked at the genetics, we thought initially it was European admixture after colonialism, but it's actually thousands of years old and we didn't know why. And one theory was that the Solutreans, an ice age people on the west coast of France who have the deep sea fishing records and we have. Or they have paintings of it and they'll have certain sort of fish, fish hooks and evidence that they were sailing far out. Some people thought they sailed across the Atlantic. The current theory we have now is the European genetics are from Siberia. And so one branch went west and the other went east. And it used to be that there is this theory there was this tiny causeway around Alberta between the ice that humans walked through. And I thought that was suspicious as a child because a singular tiny causeway that doesn't seem. That seems geologically too convenient. And secondly, what we figured out recently, because we found genetics in the New World, older than that causeway, we call it, rather than this, the land bridge, we call it the kelp highway because Native American genetics are a mix of Polynesian, Australian, aboriginal, European, Mongolian, Ainu, some Siberian and Turkic, practically everything except East Asians, the current people of the other side of Asia. And so it just speaks to how interconnected the ancient world is, where there's just so many stories where in the New World, Cahokia in Illinois, they had trade stuff from the Mayans or from Canada or across the continent. So even in pre Columbian North America, the natives knew most of the geographic map of the continent.
- [34:25]
C
Yeah. Now it's one thing. Yeah, okay, could you mention the trades? Because there's one thing for people to reach there. You know, the Polynesians accidentally landed in a whole bunch of places without in purpose, but could they come back? And actually, the Polynesians, you benefited because the winds were seasonal. So you could take some risk sailing east and then know that three months later you'd be able to sail back to the west. And so some trade patterns could develop. But it's a little bit different if you say, well, some guys in a canoe happened to reach North America, but did they ever were there, was there exchange? And obviously the boat is a big driver here of exchange and trade. What are the other technologies and how do you see that evolving through history? What are the big landmarks?
- [35:01]
A
Maybe I haven't been answering your questions correctly so far. I'll go off on a tangent. I will endeavor to be more good. So the boat's really huge. The horse is huge, and the chariot, they unified the region. Compass is big. The astrolabe and the map and the compass are big. Because before then, all of sailing is based off rough heuristics. Oh, we make it to Finitair, we can sail a few. We can sail a few days north to England, we could jump west to Ireland. Once you have the astrolabe in the map, you can correlate your position on the map to the geography and then mathematically figure out how long it is to cross the ocean. So that meant ships could stay indefinitely or very long periods across the ocean. And that discovery set up the European age of exploration. Another interesting thing is that the lateen sail, between which the Spaniards introduced over the age of exploration, that's a Polynesian technology from the Solomon Islands that eventually went west till it hit the Spanish through the Muslim world. And fun fact. The Polynesians would navigate through balancing their testicles on the boat so that as the ocean came and went, they would feel its direction. I'm not making that up. I got that from the warriors with Terry Schappert documentary.
- [36:26]
C
This is, this is a. This is a Polynesian. Right. Where they could just tell. Yeah, they. Yeah. Very sensitive part of the body, I guess the astroloid is super interesting. I mean I think the way this works. I've never tried to use one, but it's basically you point it at the sun and it can tell you how far north south you are. Or is the astrolabe pointing at the stars? I can't remember. Maybe point it at the North Star. You pointed at the North Star and get an angle. I was visiting. We have an aircraft carrier here in the San Francisco Bay. It's a museum called the USS Hornet. And the Hornet served all the way through the Vietnam War. And through that entire period, that's still how they navigated, was using the stars. Until GPS is like a pretty recent thing and until I mean we're talking about modern aircraft carrier effectively still flying fighter jet, fighter planes flying off this plane. And they were still determining where they were in the world with what's more or less a modern version of the astrolabe all the way up to the 1970s.
- [37:20]
A
Damn. Of course, the Industrial revolution is a huge thing, as is the steamship. The steamship and the railroad really brought the world together in a way they weren't. And then even after that the plane. Because so the steamship as an example for migration to America. America was almost entirely among its white population, Northwest European till the steamship because you had to hop on a pre existing trade route. And America only traded with England, France, Germany. So those were the. Or. Yeah. England, France, Germany, British Isles. I'm going to add a few more. But that was the populations that came to America because they were hopping on trade routes where they'd sail out to England, pick up stuff, pick up immigrants and then sail them back. Then with the steamship, Italians and Slavs and Jews migrated to America because you radically lowered the cost. It's also how the Chinese and the Japanese came to America. And the steamship made people no longer reliant on wind patterns. Whereas an example, it took three times as long to go up the Mississippi as down the Mississippi because you are paddling against the current. The steamship radically simplifies that the railroad may land traffic affordable because in the pre modern world, I think sea traffic was like 90% cheaper than land traffic. You can look at a lot of pre modern empires as where do we have a water source to hold the land? Where the Roman Empire existed because it hugged the Mediterranean, China, a huge strategic thing they needed from the Dark Ages onwards was there was a canal between the Yellow and the Yangtze River. So China was unified by a hundreds of mile long canal between their two great rivers. And with the railroad you can have continental traffic where America as a modern country would not be tenable in the long sense in the pre industrial world because California is not connected to the East. And so a lot of the first settlers in California were people who sailed the long way around Patagonia. And interestingly a lot of California's coast places like San Francisco were dominated by an elite of New England Yankees who sailed the long way around. And they used Hawaii as a de facto puppet state where they would hunt whales like Moby Dick in of Kamchatka in Siberia. They trade furs from Alaska to East Asia and they, they, they, they totally dominate the Pacific. And the New England Yankees even, and this is the early 18th century, a century earlier they sailed around the bottom of Africa to raid the Indian Ocean. So these guys from Boston were taking down ships from the Mughal Emperor and they would, they used, they even seized control of the coastline of Madagascar as a naval base.
- [40:22]
C
And you forgot that one of their biggest commodities was opium. We always think of the British East India Company trading opium with the Chinese. But actually about 20% of the trade was run by an American family. They're called the Forbes family, not related to the magazine, but Forbes family. And there's a museum in Boston, I haven't been to it yet, but there's a museum in Boston that's the family. It's got all these Chinese treasures, antiquities and silks and paintings and things that they acquired. And actually the patriarch of that family, still very wealthy and famous, he's John Kerry.
- [40:56]
A
Really?
- [40:56]
C
Yeah.
- [40:57]
A
Huh. I didn't know that John. I thought John Kerry said he grew up poor.
- [41:02]
C
No, definitely not. But you were mentioning land travel and how expensive it was. I think one interesting fact there is that it's actually just the physics or the biology of a horse. You're doing land travel by horse. And a horse could only travel about 100 miles. It can only carry about 100 miles worth of its own food. So you can't do long distance travel on a horse. I mean it has to stop constantly and eat. But therefore you certainly can't trade grain, buy a horse because it's Just going to eat the grain. And so it can't carry that much. It can carry 100 miles worth of grain and then it runs out. So you definitely can't do grain trade. It has to be very valuable things. Until the invention of the railroads or yes, you could do maritime based grain. Obviously lots of grain was traded, but it had to be by sea because you didn't work on land.
- [41:51]
A
That speaks to the introduction to the camel, where the camel changed a lot of trade in the greater Middle east. Where as an example, the Arabs at the time of the Prophet Muhammad, they could only live out in the desert because the camel was introduced from Central Asia to Arabia. Which meant they could wander across larger areas of the desert where partly camels store huge amounts of water inside them so they can survive longer walks and they can also carry more than a horse. And the Romans vaguely knew about sub Saharan Africa, but the only way you could have trans Saharan trade sustainably was through camels. After Islam imported the camel to North Africa. And same thing with parts of Central Asia. A lot of Persia wasn't inhabitable for the camel. And another parallel is the introduction of the horse was one of the instigating events of the Aryan invasions. Where once the horse horses had to be sort of bred into existence. The first genetic engineering. You had to crossbreed horses for a very long time until they were large enough for humans to ride. And with attaching the horse to the camel, you suddenly saw the Orion migrations go from Ireland to Bengal. So it's often not even technological advances. It can be biological advances.
- [43:11]
C
Where do you see? So we hit on technology. You were earlier talking, okay, the emergence of certain cities, geography like trade, how some cities or some city states or civilizations even did not could be trading powers or mercantile powers without being on the coast. Seems rare, seems nonintuitive. But you gave a couple examples. Florence Lyon, some other. But often it's like okay, geographic control of a geographic choke point. Singapore is the modern example. It's just a perfect location for a trading city for wealth to emerge. How important is that geography to where does trade take place? How does it lead to prosperity versus it's not that relevant.
- [44:01]
A
In some cases you do see inland trading centers in the premodern world. There's an interest and not interesting. It's an okay book. There's an okay book called Camels, Cotton and Something by Cotton Climate and Camels by Bulliet. And it's a history of a brief period in northeastern Iran during the Islamic golden age when you had cities of a million people on the Iranian plateau. And Iran was one of the wealthiest places on earth. And it's part of a broader Silk Road trading system where you'd have relatively large cities in the middle of Central Asia, like Merv, Nishapur, Samarkand, and then you'd have even Silk Road cities further east like Yarkent or the Tarim Basin. And these were places totally dependent on Silk Road trade, very much inland. You could look at Timbuktu in the Sahel in the middle of the land as an African version. But what he looks at is this was a specific period when it was artificially wet due to the mini Ice Age. And so Iran was a lot more fertile. And they also had Arabic VC capital, which where this cotton growth in the desert, much like the cotton in Arizona, was funded by Arab VC capital, which was quite large because Islam used to have a stock market and a capitalist economy. And then as the Islamic Dark Ages kicked in, it was post apocalyptic where the cities were totally abandoned. And that was partly Islam's natural decay and it was partly barbarian invaders like the Turks and Mongols.
- [45:41]
C
And so the broader theme though, like you think you could predict where a city of the future would will be based, the great cities of the future based on where they are today, based on geography, where something might emerge. Is it based on politics? Is it based on technology? Is it based on culture?
- [45:56]
A
Yes and no. Reality is complicated. Where, for example, Singapore or Istanbul are natural centers for big cities, they're straits. And then there's certain weird options that don't make sense. I don't know why Phoenix, Arizona is there. It's just a completely unformed area in the middle of the desert. Las Vegas is there purely for historic reasons, where Las Vegas is all just in the middle of the desert. And in certain societies, like in ancient India, they just put the city in the middle of a plane because the king likes it. And then the craftsmen and the economy congregates. Then when that dynasty dies, the city totally changed. So cities can form for purely political reasons reasons. Madrid is another example where the King of Spain sort of put it out in the middle of a plain with no water source as a kind of power move. So there are also, for example, Cairo, Illinois should be a major metropolitan area because it's where the Ohio and the Mississippi rivers meet in bottom Illinois. But Cairo was formed largely after the railroad, so a junction like that didn't matter. There's lots of places like that in the Midwest where Pittsburgh is, where the Monongahela, the Susquehanna and the Ohio meet the Buffalo is the Niagara Straits. You have Detroit, where the Midwest has a lot of really important geographic chokepoints and river traffic that didn't take off. And then you just have certain historic things like Rwanda is doing well because it has a fairly laissez. It has one of the more like business friendly governments in Africa where politics and intentions do matter. I mean as an example, Texas has a climate pretty comparable to North Africa, but they're wildly different. And so Switzerland has a terrible sort of geography. It's up in the mountains, it is nothing. And so as a general rule, geography helps and it's formative. But if you have property rights and rule of law, your society is going to be wealthy, which is what, what why nations fail says and geography can or can't help you. But if you have property rights and rule of law, you can make a not very good geography wealthy. Like Finland.
- [48:22]
C
Yep. And, and that rule of law is key in trade.
- [48:27]
A
Yeah.
- [48:27]
C
It's like you have to have, you have to have security that you're going to get your money back and you do a deal with someone or that they're going to enforce the contract. One of the really interesting things I learned is actually the importance of Jewish law, Talmudic law in the development of trade and the economy. Because under Roman law you couldn't sell your debt. If I owed you money, I owed you money. You couldn't sell that to someone else and I owe that person money. But under Talmudic law you could. So you could get these exchange based systems that's the origin of securities, securities law and bonds and equities and things is like, okay, now I owe that person money instead of you. That's like a huge innovation. And a big part of trade was done on these kind of networks of people that could trade letters of credit because you didn't want to have to send the gold across the world. You could send a piece of paper and say, okay, now I owe you this. Much simpler than.
- [49:21]
A
Yeah, you're right. And that's a consistent theme with middlemen, minorities, where if you're a small merchant minority and you have to rely on your own team, you can build up higher levels of economic trust that allows you to do that. Because the Jews had a lot of internal trust because they were an oppressed minority that had a very deep and long history. So they could sort of trust the other Jews to make these financial agreements and then pay back. It's comparable to why the Quakers, a small sect of Protestantism I grew up with, were instrumental in the Industrial revolution and the rise of banking in both America and Britain. You see it with the Armenians, who are. I'm sad the Armenians get less recognition than the Jews. You see it with the Greeks. There's the Chinese of Southeast asia, who are 1 or 1 or 2% of the population, but often have a majority of the wealth in Southeast Asia. So you see these consistent middlemen, minorities. And do you know what the Geniza records?
- [50:17]
C
No.
- [50:18]
A
You'd love these. They're one of our best sources for economic data in the medieval world, where they're the economic transactions of Cairo's Jewish population in the medieval period. They're writing about all their different transactions they had with each other. And it was in the synagogue. And so you see a trade network based out of Cairo that stretches from England to China and Indonesia because they were at the middle and the hub of this system.
- [50:49]
C
Yeah, that's fascinating. I mean, it's amazing how much of ancient writing and even numbers were built around trade, tariffs, taxation. What is it? Hammurabi's code. Hammurabi Steel has a whole bunch of rules about shipping regulations and trade and who owes who and what happens if two ships collide. And it's like a decent chunk of the. Of the. What is it? How do you say that word? Steal or stelle. Stelae. Yeah.
- [51:18]
A
I want to emphasize property rights again. Think that property rights and rule of law are the most important thing. I will sacrifice literally everything in a society before property rights and rule of law, because as long as you have those, you can restart. But once they degenerate, your society is going to degenerate. And every single society that has those two things succeeds and grows wealthy. But there's always the temptation of the ring of power, of the elites on top who want to steal. And then once you've removed property rights and rule of law, your society fails.
- [51:50]
C
Are there any patterns there? So you mentioned Colombia. If the price of coffee goes down too much, they lose democracy. But does that then lead to the loss of property rights and rule of law? Does that go with it? Or can you maintain that? Because a strongman comes to power and you still get to.
- [52:03]
A
You must develop a culture of discipline to do this, and that's difficult. Where, for example, England is the country that's consistently done those things, and England's happened to take over the world and launched the. The industrial and scientific and democratic revolutions. But over the course of English history, in a lot of the neighboring countries, there has been a consistent respect for those things, which is why Western Europe did well. So when Cromwell took over England, he still respected those things. And over French history, with a few examples like the ultimate crash outs of the French Revolution, the French have respected those things. Or it depends on the sort of moral decrepitude of the elites, where in Latin America you oscillate between sort of like globalist technocrats and populist sort of thugs. And so in a lot of Latin American countries, I once had a tweet that, I once said something that reemerged in the Internet later and people said it aged well, where I said, if Javier Milei fixes Argentina, they'll immediately grow arrogant and then remove the things that resulted in them getting wealthy from that. This is what Latin America does. And you can see it's not a racial thing because Argentina and Mediterranean Europe keep doing this, and then North European countries don't. And when Mediterranean Europe respected property rights, like in the classical and medieval world, they were wealthy. And then when they stopped, they stopped. And 14th century Islamic historian Ibn Khaldun spoke of the importance of property rights and rule of law, because you had it in Islam. And then he was also saying that it was degenerating over the course of the late Middle Ages, which is why Islam declined. So it's a consistent theme over history. And in Latin America, good things happen through establishing good incentives. And the elite cannot pass the marshmallow test, so they take away the good things. Where you know, the marshmallow test, right, sure, yeah.
- [54:08]
C
And this does seem to be some predictive power here. It's like, okay, we can certainly see who has the rule of law today and therefore who's going to do well in the near future. Is there anything that predicts where that comes from? You said discipline, but that's something that's not an immutable trait about a culture. Culture, civilization.
- [54:28]
A
Rule of law comes from a culture of masculinity and honor where rule of law is a side effect of sort of populations that can push back against their elites. And so Germanic Europe was able to do that because it was a warrior culture that every man was expected to fight. And America is armed. And so as Europe got disarmed over the last hundred years, Europe has been losing property rights because their population sold out Islam. As they lost their Islam for the first few centuries when they were Bedouin warriors, they maintained property rights, but as they degenerated, they lost it. And Asia has consistently gotten worse in their regard as their societies have gone on longer. As that edge wears off, where the ability to maintain property rights and rule of law and respect for others requires a degree of consistent responsibility and discipline from the people involved. Is it's a system for when a few people start defecting, the effectiveness of the system radically decreases. So it's a combination of high trust with sort of disciplined warrior culture.
- [55:48]
C
Yet maybe there might be a cat. Have you read the book How Asia Works?
- [55:53]
A
No, I haven't.
- [55:54]
C
This is a very good book. And it's kind of like recent history of the Asia industrialization, the Asian Tigers. And one of the points that he basically says, there's two things that led to the emergence of the Asian Tigers. This is sort of China, Taiwan, I guess, early Hong Kong, Korea, Japan and Singapore. And there was many attempts at industrialization in other countries in Asia that failed. And the attempts were in the recent. The same time period like Malaysia tried to build like a national car company champion, like they did in Korea and Japan. And no one's ever heard of that. I couldn't even tell you what it's called failed. And what the Malaysians did that went wrong was they put up protective barriers so that no one could import cars into that country. There was no competition. And they said, okay, our country, we're going to make cars because no one can compete with us. And they threw up all kinds of tariff barriers and stuff and that just didn't work because their cars sucked and so they could never export them. And all you did was make your population have crappy cars. Whereas the Koreans and Japanese said, great, we're going to create all kinds of stimulus and incentives for you to industrialize here, but you must export. You have to ship cars internationally because if you're not exporting, there's no proof that your cars are any good. They might suck. And you're actually just holding us all back here. But if foreigners are buying your cars, you're making good cars, you're winning. So they introduce this competitive dynamic. That was one. I think America, by the way, is getting that wrong right now. We're putting up tariff barriers to protect ourselves but not requiring our companies to export. So you don't know if we're making good companies as a result or if we just get crappy products. Okay, that's one line. But the one that I think is more relevant to what you're just talking about, a rule of law is the other key ingredient of these countries is that they did land reform and try to create a broad based ownership of society. So that you didn't. And it actually started with MacArthur after World War II, where the United States imposed on the Japanese, hey, we're going to distribute the land. But maybe there's something there where they did both, they did land reform and then put in property rights for the people afterwards.
- [57:55]
A
It's speaking to a philosophic theme that it's sort of a unified thing in ancient and pre modern philosophy, but it doesn't have a term in modern philosophy where pre modern political philosophy was about increasing the total responsibility of the society in stake. Because when you have a stake in the society, you're going to use your life force to protect it. Because there's a huge difference between societies that whip people to work in societies that people have market incentives to work, because either you can have hierarchy or market incentives. Where once communists try to short circuit this, they turn the population into slaves because that's the alternative to self interest. And so I knew about the land reform thing, but I didn't connect it to the Asian tiger economy. But it makes sense where Korea, Japan, Vietnam and China all did have land reform with the removal of the old nobilities who often practiced slavery. I mean Korea had slavery till World War II. So you need to sort of get to a nice threshold where you can have a competitive space but it's not too competitive, where it's difficult. You have to sort of create an ecosystem for your companies to train skill level. And I see tariffs as a strategic tool that you can use based on context. Where 19th century America had really high tariffs and that was useful because the Europeans already had a larger industrial base. So we were trying to create a protective ecosystem in America to develop our industry until it hit a scale of size in the late 19th century when we were out competing Europe, Britain earlier did the exact opposite strategy. Where Britain had completely open free trade because they had a strategic advantage over the rest of Europe where free trade didn't have costs for them. And the British in fact forced free trade in other countries against their own consent, like China and America did that for Japan. And so the dynamic you speak of, it happened in Argentina or South Africa where they had these really strong tariffs. So it meant their industry could never compete. And so they were cut off from the world. And so I see politics and economics as a toolkit that you should use based on context. I don't see it as sort of ideological worldview where everything fits in every situation. Which is one of the things I really hate about sort of the older, how a lot of politics is today, whether Marxism or the old neoliberal order, which suggests every society on earth should have the exact Same economic policies. And you're an idiot if you don't think that.
- [60:38]
C
Yeah. That we just have to follow Milton Friedman no matter what.
- [60:42]
A
Yeah.
- [60:43]
C
Where do you come down on that? You got conservative tendencies of libertarian bent, but then also recognizing a real politic or. Or other interests that besides just pure free trade.
- [60:54]
A
Yeah. I'm significantly more Austrian than I am Keynesian. I think Keynesianism can work in highly specific situations with a leadership class, with profound discipline. But I think once you give Keynesianism to a leadership class, they're going to abuse it so quickly. You have to be really careful where. World War II clearly was a sort of Keynesian slap to the economy, but that's the only data set they use. Modern economics only looks at Post World War II data, which is just mental illness, in my opinion, because post World War II was a very brief blip of a line go up. And so I'm more Austrian where I think the more you sort of artificially control the economy, the more distorted it becomes because there isn't an interactivity with nature. I think the economy needs to be a reflection of nature or sort of the dao, because the economy has to adapt inflexibility to actual reality. And whatever distance you split up between reality and the economy, you will suffer because you need to economically incentivize people to play with reality. And I think we built an economy which doesn't do that, and we're going to really suffer for it. But I do have a realpolitik, sort of not entirely economic view of this, because you look at China as an example, and a mistake Westerners keep making is they think the Chinese Communist Party is operating for economic reasons. They're largely not. They're using economics as a tool for power. And that's more common over history than doing it out of purely economic considerations. And so if you've removed the realpolitik power level from our global economic policy, you're operating without a tool. You really need to have to deal with other players, if that makes sense.
- [62:49]
C
Yeah, it's. It's naive to think that everybody's just gonna follow the do the rules or not adopt the technology or not do the thing. It's just like clearly in game theory standpoint, if somebody does it, they win. Then someone's gonna do it.
- [63:02]
A
Yeah. And so I'm mostly a sort of. I'm mostly a free market absolutist. I think whenever you have sort of obfuscations, the system. The system warps in on itself. Where I read I was Reading the Road to Serfdom when I hiked the Appalachian Trail and I remember climbing up on top of a mountain in Massachusetts, reading Hayek talk about how once the government intervenes in the economy a little bit, it adds up to serfdom. Because Hayek's argument is that once the government's making economic choices, the economy will end up in a dependent relationship with the government which will snowball. And he said it would take about a century until the population are serf to the state. As you have a totally sort of mixed economy. And that's what you see because the government has economic buddies. Those people keep growing and everyone else who's not one of those becomes dependents to those people. And this was a process you've seen in several historic societies. And that's how we get wefism, the World Economic Forum of. And it's interesting where a lot of sort of political schizos like Yanis Varoufoukas, who's a Greek communist or like Tucker Carlson, they were talking about sort of like modern feudalism for a while and I thought they were making that up. But you're sort of seeing it develop now and it's scary. And it's the culmination of this idea of the government working with the private sector and their buddies against other people. And you look at the rental society and most people being put in a state of sort of permanent poverty where they can't get out. It's a. It removes stakeholders from society which is very dangerous.
- [64:51]
C
The Road to Serfdom was written. He said he predicted 100 years. It was written 80 years ago by the way.
- [64:56]
A
Double check, check that I think he said about a century. But I could be getting that wrong.
- [65:00]
C
We're coming up on that. Yeah. And I think it's interesting that serfs only had to give 10% of their crop to the Lord. Right. And here we are. Our tax rates are a lot higher than that.
- [65:10]
A
Yeah. Cringe. It's the other thing as well with the massive distortions of the economy is it creates really weird consequences. As an example, the feminist movement can't really exist without the government. Without government distortion of the economy either. The creation of large. So the creation of large non productive sectors in the economy motivated off government spending that created wokeness. And Richard Hanania has a book on it. Because the government created these legal structures where it was very easy to sue someone if they don't follow a fairly insane interpretation of discrimination law which is basically having racial quotas. And because the government makes up 40% of the economy in the western, in America, a majority often in Europe. And keep in mind the pre modern world, it was like 1 to 3%. And so the government part of the economy is mostly fake because it's not responsive to market demand and it's often inflated. And so when you have these inflated currencies, you have really weird effects where I have a theory that for example, BlackRock's current control of the economy. They made a deal with the Democratic party where the Democratic party with the vast money printing they're doing it ends up in these firms. Because when you print free money, it ends up in the stock market and accumulations of capital. It radically increases the price of housing because it's a stable asset. It radically increases the stock market versus the rest of the economy. And so we're in a situation where the general economy now for most Americans is, is not good, but then the economy on paper is good because it's being funded by this fake economy which is a continuous bluff. This entire system is a bluff. And the issue though is it radically distorts the economy. So health care is our biggest sector. Healthcare is 20% of the economy. The next five sectors combined are not as much as healthcare. Manufacturing I think is like 8%, 10%. And if you look at a map of 1990, America's. Most of our states were predominantly manufacturing. Now most states are health care. The reason that's the case is government prints fake money. Fake money goes to largely the baby boomers who fund it into health care. Manufacturing requires a cheap currency because once you can produce things cheaply, you can export it. And so that's why China and Japan have suppressed their currencies for decades. And the US if our currency were to drop because we have the most debt of any era ever in human history, it would suddenly make American cost of living much cheaper. It would make our currency cheaper. So America could become a manufacturing powerhouse because also we have higher efficiency. We have, we have a lot of skilled, we have potent, a lot of potential skill. But because we're inflating our currency, the society and the market can't correct. And we have an insanely artificial society because our economic system is artificial, because all things are connected.
- [68:28]
C
And where do you see that biggest historical analog? Do you go straight to Rome?
- [68:32]
A
Rome is a great example. These things happen in the classical world. I have a book I haven't read called the End of Antiquity by Michael Hudson. It's a study of sort of debt in the classical world where debt cycles were a huge issue in the ancient world. A lot of the stuff in the Bible was that debt slavery was so huge in the ancient Middle east that Christianity and Judaism were trying to get rid of debt slavery. They talk about that a lot. It was a huge issue in the classical world. Greece and Rome. In Babylon, three quarters of the population were debt slaves by the end. And so Rome kept on hyperinflating its currency again and again. And that is part of what killed Rome. The Roman currency was totally valueless by the end of the empire.
- [69:17]
C
And they were doing this through like clipping the size of the coins or something?
- [69:21]
A
Yes, they'd pay soldiers with sheepskins and iron by the end because the coins were worthless. So Rome hyperinflated its currency. And Spain's one of the most egregious examples too, where they did it. And that's the reason why Spain went from the greatest empire on earth, with colonies on every continent, much of the New World, to a totally powerless, pathetic country over the course of the 17th century because they hyperinflated their currency. And when you do not follow the dao, you get neither wealth nor wisdom.
- [69:57]
C
So what's the answer? Cryptocurrencies of the future government.
- [70:01]
A
So I'm a very firm believer in the government not seeing my financial transactions. I think this is very important. And I think we just friggin like why do we live in the 1984 timeline? The government can listen to everything we say, they can see all our transactions and they're going to turn us into slaves. If this continues, if we develop a currency independent from the government, and if we develop an Internet the government cannot constantly spend spy on, it will be the greatest cry of freedom in human history.
- [70:31]
C
So the network state, what does the Rudyard network state look like?
- [70:38]
A
We'll have to see. It's all chill vibes. I think this speaks to a point that you look at the global integration of the system that you see with financial currencies. And I think that the economy has to be a reflection of reality. And the degree to which you remove that is the degree to which you suffer. And you look at a society like medieval Europe, where you had a vast decentralization of power. Europe was over 100 countries, church, state, nobility, peasants, merchant class, all at odds creating these dynamic city state cultures like Florence or Milan, Venice, the Hanseatic League in the north shore of Germany, Antwerp. And power naturally corrupts. And so the more power can manipulate the economy for its own aims, the more the society suffers.
- [71:40]
C
Go on.
- [71:41]
A
So this speaks to something Bertrand de Juvenal says that there is society and then there's power. And the growth of the government means you have to sort of inorganically force things. But in a healthy society and pre modern political philosophy was based on maximizing the power of society, then human interactions are made up of consensual sort of agreements, whether for economic reasons, religious reasons, class, regional. And a huge trajectory over the industrial revolution is we've seen the replacement of a society where that was everything. Keep in mind, feudal nobilities are the private sector becoming government. They're family businesses. And in the same way that we trust family businesses more so as a society than we do joint stock companies over the course of generations. That was the logic for why feudal monarchies predominated. I am a democrat, I am an American, I'm a firm believer in the Republic, but I can see both arguments here. And so with government, you're seeing the artificialization of the economy and then that's the artificialization of the society. And so it's a sort of combined bluff. And the system tests you to see if you push back against the bluff. Where it is a sort of. Yeah, it's sort of group decision or it's. There's a, there's a term, there's a term I'm missing here, but I'm sure you understand my point.
- [73:18]
C
The feudal monarchy is a really interesting one too. Is it? Because each from a trade standpoint, the topic of the day is you had all these, every single baron set up their own little tax regime, their own borders, their own tariffs. And it's just became kind of impossible to do business and have really friction on prosperity that you had to pay. I find it very interesting, the history of France is a really good example where the monarchy actually a big part of what they did was block the power of these sub lords and dukes and barons, whatever they call them in French, so that you actually had one national economy. And that's grown and grown to where we have one global economy. But then you get all the other problems that have come with it.
- [73:59]
A
Yeah, it's complicated and it speaks to the theme that these things kind of ebb and flow. Where as an example, you are correct, where the unification of countries is often a huge boost to the economy. The Persian Empire bringing the entire greater Middle east together, that was an economic revolution. Standardization. If America was 50 different countries, we would not be the place we are now. At the same time, once you unify a country, the standardization breeds out diversity and interesting things because to generate culture you need small enclosed groups where people can talk ideas that are not acceptable to the general public. As an example, great innovations are normally made by one to three scientists, usually.
- [74:47]
C
In their early twenties.
- [74:49]
A
Yes, exactly. When you can still pass on, you're still sort of making decisions. So you can pass on your genes. I choose to pass on chinos. And so once you have the mass society, you lose that. And it's. I think about how this is a thread in my mind. I'm going to make a video, the Paradox of Asia soon. Because I watch a lot of second and third world media and it's weird to look at like Vietnamese pop music or like Russian state propaganda, or I was watching like Afghan school propaganda. This is what I do. So when you look at these countries or like Thailand, it's weird because they're sort of parroting their nationalism, but they're using an entirely Western cultural frame where the Vietnamese pop music video looks American. They love 20% Thai culture, but their culture is also sort of like a museum piece. They've made it sort of artificial to be relatable, but it's also still Western. And I think the mass global society means no one can tell their story. And so Americans can't make stories of being American. Indonesians won't make stories of being Indonesian. You can't make a movie about, like being a working class Polish guy in Pittsburgh. But that's like a unique story people could find valuable. And so with the global economy, you see a staggering absence of creativity because Hollywood panders to the Indonesian and the Ukrainian audiences. So they could have stories totally stripped of sort of the cultural context of any given society. So you see global system grow, global system shrink. Where the earlier eras of history, the ruling sort of ecumenes before Dark Ages, cultural forms grow, they encapsulate the world. Then the deficiencies of scale grow, so you have to operate under a smaller frame, and so you shrink back down. And so it's a rhythmic pattern of increasing and then decreasing.
- [76:51]
C
And is that. I've heard you say elsewhere that the Dark Age can be a good thing for a society, although I assume you're meaning if you look at it over the course of centuries, then actually you start to get new emerging forms after the Dark Age. Like being in the Dark. Dark Age must suck.
- [77:05]
A
Yeah. So there's this school of histories here that the Dark Ages weren't real and they were just as advanced as the Roman Empire. And that staggering cope, I mean, Western Europe did genuinely take a nose dive. But as I say, the difference in the wise man and the fool is that when he suffers, the wise man learns and the fool does not. And so you can choose to take your Dark Ages and grow, or you can choose your Dark Ages to stagnate, which is what Islam did. So a few other themes that we'll cover and then we'll check out. You said earlier you wanted to talk about how currency shifts in trade shifts influence moral shifts, whereas the Axial Age is an example. I got this theory from David Graeber, who talks about how in 500 BC you saw Confucius and Lao Tzu and Buddha and Socrates emerge because coinage developed across Eurasia, where societies alternate between currencies based off social capital and on bullion. So in both the Bronze Age world and the Middle Ages, social currency was based off knowing people where in a village you'd have a sort of checklist where Bob the Smith has six points in our trade system, Charles the Tailor has five points. And so it's an IOU system that everyone keeps track track of. And so when you have that society, religion is the shared social glue because your system needs social trust to operate. When you have a bullion based economy like early modern Europe or the classical period, agnosticism and atheism develops because the social glue you use your for your society is impersonal. So you can give someone a coin and then leave. You don't have to maintain the IOU relationship. So you're seeing the social structure of the society parallel the currency, because that's how people are interfacing on a social level. I can explain that more if you'd like. But the thing with the Axial Age is that with the rise of coins, you saw a series of social effects, the growth of empires, impersonal cities. You saw the growth of a city culture in the big four civilizations, except Middle east, which had it before. But then as currency broke down the need for these sorts of relationships, you saw social breakdown with slavery, people being terrible to each other, families collapsing. So there was a period of nihilism and anarchy before 500 B.C. and those philosophers were developing objective moral principles for the new social structure because you had to sort of level up the moral code to a more sort of complex level of social interaction.
- [79:49]
C
Okay, so coins can lead to change in morality. Is it something specific about coins and bullion or is it. I mean, we also had the printing press was a new technology that led to the Protestant Reformation and a moral change, or at least a sort of societal change that came with that. Is there others that can come? And now we have the Internet. That's upon us. And maybe there's forms of money flowing freely, but it's certainly more transactional than ever before. Life is. And less personal. You don't need to know anybody. You swipe right.
- [80:21]
A
Yeah, exactly. Dating apps are the perfect example of that because you've dehumanized dating with making it transactional. Coins do it. Because you give someone the coin, you can walk away, the relationship's over. Internet does that. And the Internet is potentially profoundly good because it allows asynchronous organization independent from the state where the managerial class or the bureaucrats managed all the transactions. In a pre Internet AI world, now we can use the machines to do that. So the machines can do social. We can use those things to do social organization independent from the bureaucracy managing things, which is going to have enormous implications on our worldview. And that does create a profound hurdle though, because the Internet, the Internet also breaks down traditional communities and meaning and ways we interacted. So we're going to have to work with the Internet's failings and then you can use its benefits. And I mean other examples of historic shifts like this. The shift of the market economy was really big in Europe in the Middle ages because you move from a system where your feudal lord dictated everything to one where you had financial free market relationships like employers. And that was a shift from a hierarchy sort of land focused society to a city rationality focus. Because God was no longer the unifying social glue. It was rationalistic calculations.
- [81:57]
C
And coming back where we are today, you have the Internet, but the Internet's just a classic. I mean a broader. There's. It's so ubiquitous now that it's everywhere. But even think thinking things through, like what I want to think transactional, I'm like, have I pay for something? Like I don't have to talk to my Uber driver anymore. It's really broken down like I used to, you know, you would talk to the taxi driver. Famously. There's like whole TV shows of people talking to their taxi driver and Uber. You just set the setting. No, don't talk to me, please. Or you pay with a QR code and Apple pay. You don't have to talk to the cashier anymore even to get your change or anything. It definitely feels like a degradation of society and societal norms. And yet it's interesting to hear you say also. Well, it's bringing people together. They can find each other. There's community. I guess technology is always amoral.
- [82:43]
A
Yeah, Things are often not what they appear where, or they change over time. As an example, the popularization of slavery was a side effect of the growth of market economies because in a pre market economy, slaves are just people from the neighboring village. You take and you make them serve you and they assimilate out in a few generations. In the Greco Roman classical world, you could have industrial grade slavery operating on a transnational scale. And that's a negative side of the forces we're talking about. But slavery is also not the free market. Because you're keeping someone in bondage, they're by definition not part of the free market. It's a side effect of Darwinism. But the thing with the Internet is you cannot escape your destiny. You have to sort of grab it by its tongue. And so we've already opened up the genie bottle of being disconnected from the Internet, but we can use those methods to reintegrate people because you can bring people together who are more personality similar. It's the network state once again, but not geographically similar. And we could use tools like AI or certain types of social website because the current conditions we live in aren't healthy. It's not healthy to spend your entire life at your house behind a screen or just living in your sort of horse stall of an apartment, spending your job and your pleasure on the same screen. And so we're going to move past this because it's against our human nature. And we're going to have to sort of figure out the very tricky question of how does a social species live with the Internet?
- [84:26]
C
It is the question of our day.
- [84:27]
A
Facts, Any other points you want to cover?
- [84:32]
C
No, I'm fascinated. But here you go, especially on all these topics of trying to connect it all together, from trade all the way through to empires and beyond into the future.
- [84:46]
A
Thank you. Well, this was a pleasure and peace.
- [84:52]
C
Peace. Adios.
- [84:54]
A
History102 by Rudyard lynch and Austin Padgett is a podcast from Turpentine, the network behind Moment of Zen live players and econ 102. If you like the episode, subscribe, follow on YouTube, forward to a friend and let us know what else you want us to cover. Thank you for listening.