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Odd Lots is brought to you by Vaneck. For years investors basically forgot about real assets, energy, gold and infrastructure. But look what's driving markets now. Central banks loading up on gold, massive capex cycles, currencies doing weird things. These assets are at the center of it. Rax the Van Eck Real Asset ETF is an actively managed one stop shop for real assets spanning gold, commodities, natural resource equities and more. Go to van Eck.com raaxpod to learn more. Fun disclosures later in this episode everyone has been there.
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coast Unlock adventure at Red Lion Hotels by Sonesta where restful, sleep, friendly service and trusted local knowledge are part of every stay. Red lion makes it easy to feel welcomed, comfortable and connected wherever the road takes you. Whether you're traveling for business or pleasure, you can spend less and make more of every trip. When you sign up for Sinesta Travel Pass, you'll get their best rates instantly. Go to sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass. Here today, roam tomorrow. Join now@sinesta.com Terms and conditions apply. Hello Odd lots listeners. I'm Joe Weisenthal.
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And I'm Tracy Alloway.
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A
Tracy, we're gonna be doing another live show, this time once again in our hometown of New York City.
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B
That's right. On the evening of May 28th from 7pm, we will be at City Winery with a fantastic lineup of guests.
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A
Yeah, I really like our live show. They're a great chance to meet the listeners. They're a chance for listeners to meet us and actually more importantly, listeners to hang out with other listeners and you know, all that community stuff. But if you would like all that
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B
community stuff and I think we're going
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A
to talk a lot about the future of trading because that is a very New York City topic. Still figuring out the exact schedule. But yes, if you'd like to come to our live odd lot show at City Winery in New York City on May 28. Go find details@bloomberg.com oddlauds or look on either one of our Twitter handles. There are plenty of spaces to find it and we'd love to see you there.
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B
That's right, get offline and interact with some actual human beings and do some of that community stuff. We look forward to seeing you there.
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A
IRL is the new URL. Bloomberg audio studios podcasts radio news.
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B
Hello, and welcome to another episode of the All Thoughts podcast. I'm Tracy Alloway.
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And I'm Joe Weisenthal.
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B
Joe, we are, we're back in London.
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A
We're making a tradition back in London. We were here last spring. That last year is April. This time it's May. But I like the idea. Let's do a recurring spring trip to London.
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B
Now, when you're in London, do you feel the urge to sort of stroke your beard and think about geopolitics?
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A
Can I say, well, yes, for sure. But as you can confirm, anytime there's like some big, you know, there's something feels pivotal or historical, geopolitical, I turn to you in the office, I say, you know what we really need? We really need like an episode with an old guy with a British accent. Like some moments, that's just what it calls for.
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B
You gave the secret away. You gave the secret odd lots booking process.
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A
It doesn't really matter who it is per se, but it's like there's a certain type of guest that's like, this is what this moment calls for. Someone with wisdom, someone with perspective.
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B
All right, well, you've given it away at this point, but we are back here for our yearly check in with Martin Wolf, who is of course the chief economics commentator over at the Financial Times, one of the most famous geopolitics, geoeconomics commentators of all time, and someone who is really good to talk to when we're living through these potentially historic capital H, historic events on what seems to be more, more than a yearly basis at this point. So the last time we spoke to him was in April of 2025, and it was just after the Liberation Day tariff announcements. Now we're here in May 2026 and we have the Iran situation going on. We have headlines about further fracturing of U.S. europe relations. Yeah, I mean, all of these potential potentially pivotal moments seem to be happening on a sort of monthly, if not weekly basis at this point.
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A
Absolutely right. And as you mentioned, when we were here last year, it was in the immediate wake. I mean, I think maybe even just a week after the. Or a few Days after the Liberation Day tariff schedule had come out. It was still during that period of absolutely insane volatility. And there is a sense in which, I mean, the pure volatility currently is not actually like it was back then, but at the same time, perhaps probably because we're in the middle of a war. Ceasefire aside, April 2025 feels a little quaint compared to where we are right now.
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B
Isn't that something? I mean, everything's relative, I guess. Okay, well, on that note, why don't we bring in our perfect guest, older gentleman, Older British gentleman with a British accent, per Joe's description. Martin Wolf, thank you so much for coming back on Odd Lots.
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C
Well, I'm very glad to fill a niche I didn't know you had.
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B
You truly are the perfect guest, though, because, you know, again, a lot of people have described you as one of the most important economics commentators of all time. And so I think it's great that we get you back to opine on some of these very big events that we're seeing. Speaking of large events, you have described the Iran situation as a nightmare scenario. Walk us through what you're thinking there, because when I look at some of the headlines around markets at the moment, The S&P 500 closed at a record on Friday. It doesn't seem like markets are aligned with that particular point of view. What's going on?
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C
Well, I suppose there's so many different things, aspects of this. I've been thinking of this wonderful Shakespearean line, life being a tale told by an idiot, full of sound and fury signifying nothing. So one feels that when markets are looking at this, they feel this is full of sound and fury, but it doesn't signify anything. And there are, I think, two possible reasons for that. One is the famous taco line from my dear colleague Robert Armstrong that Trump always chickens out. So in the end, he's not going to blow up the world. He's going to find a way out of this which will have done some damage. It will make, I think, the US look fairly ridiculous, but it can, it can be forgotten, declare victory and stop. And I think that's still perfectly possible, a perfectly reasonable view, because he's already sort of stopped the fighting and it feels like he's looking desperately for an end game. The question is whether the other side will play ball. And that is still to be seen. And then there's the other possibility that in the end, if the oil were lost, far as it were, forever, the world will adjust to that. Yes, the output that goes through the straits is very large. But in the longer run, a lot of it can go through pipelines. They can build these. It will take quite a while and the world can compress this demand in time. It might take a few years. The world growth will be lower, but what we're losing is about a fifth world output. Oil is much less important than it used to be 70 years ago. Prices have risen. But actually, if you look in real terms over the long history of oil prices since the first oil shock, they're not sensationally high. And so we will adjust to it, and we're very good at adjusting to it. The Gulf will end up as a different place because it won't be exporting the same way. But it's not enough to derail the world economy. And incidentally, the country that is likely to be the least damaged of the major ones is the US which is not a coincidence. After all, they wouldn't have started it if that weren't at the back of their minds. China will be damaged. Russia is benefiting, but I don't think that's going to bother Mr. Trump. So in the end, the losers are Europe and China, not his favorite countries. I think that on the whole, Mr. Trump prefers China to the Europe, but the. And the world economy will continue. And there's this huge technological upheaval going on, which is very much what the markets are talking about, which looks transformative. So I think the market's assumption that the profitability of companies is going to be fine. The world will have possibly a recession, but that's not the end of the world. World has recessions, probably not even zero growth, and life goes on.
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A
When you. I'm glad that when you reference Shakespeare and sound and fury signifying nothing, you were not referring to our conversations, etc. Always something though, that I'm anxious about with respect to our business, because we type and talk. It's like, what does it really matter? All that being said, you mentioned the profitability of companies and if profits stay high, that stocks say high. And it's all very explicable, one has to admit, or you have to admit, like sitting here today recording this May 4, you have to admit it's pretty surprising, isn't it? Like if you knew all the headlines over the last year and a half between Liberation Day and a subpoena for Chairman Powell and this war, the early sustenance is pretty surprising.
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B
Yeah, this is what I don't get. So I think I mentioned this the last time we spoke, but both Joe and I did international relations at university, and we were told over and over again that the global economy does not like instability. It doesn't like. And yet here we are in the midst of a lot of chaos and things are more or less chugging along.
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A
There's this disconnect, right?
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C
Yes, I think that's right. And there's been a greater disconnect than I would have expected. And so I've more than once used another famous quote from a British author. Of course, it has to be given the intro.
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A
Yes.
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C
Adam Smith. There's a great deal of ruin in a country, which was, if I remember correctly, actually said in response to somebody saying that the loss of the American colonies was a tragedy, a catastrophe for this country. And I think that's the context. I believe that's the context in which you said there's a great deal of ruin in a country. So there's a great deal of ruin in the world economy. I have a favorite statistic which I use in many of my presentations because it surprised me so much when I looked at it. So since 1950 on the data from Angus Madison must be right. There have only been two years in which the world economy shrank. Two, and they're both perfectly obvious. One was 2009, and even then it shrank barely. It was close to zero because China was still growing, lots of countries were still growing. And the other was the pandemic, 2020. Otherwise, the world economy grows, and nearly always between 2 and 4%. It's changed over time. Why? Well, because everybody matters is in a growth mode. I could go through what's driving it. I looked at this, actually, after the pandemic. I thought, how often is it that we've had a genuine recession, a decline in gdp? Now, this isn't GDP per head. There will be more often times when GDP per head shrank. But basically the economy is unbelievably robust. And that's because lots of people are providing stuff people want. There are markets. They produce for the markets, they invest to produce for the markets. Investment is very important as a driver of demand, as Kane said. And so it takes something really enormous to stop it. I went through the two oil shocks of the 70s. I was already a working economist, and they were big shocks, and we got terrible inflation and all the rest of it. Volcker came along and yes, he did cause a recession in the us, but it wasn't global. So I think we have to start off by saying the world economy is incredibly resilient. The second thing is that. And that's why I use the full of sound and fury. If you look at the actual policies that we've ended up with, they're sort of designed, I'm sure they're not intent, not really to hurt. So the protection is very uneven. This was part of. I wrote about this before Trump got into office. And that creates the opportunity is designed in the system for trade diversion. Right. If he just put up an average tariff of 40% or 35%, a lot of trade would disappear. But that's not what he did. He ended up with imposing very high tariffs on some, some origins. China still has very high tariffs, but the trade diversion has been phenomenal. So trade goes through Vietnam, it goes through Mexico and the IMF had a very nice chart on that in the latest World Economic Outlook which basically showed that yes, direct Trade between the U.S. and China shrunk, direct trade between the U.S. canada has shrunk, but other people have taken its place. And in some sense it was designed to be porous. Then there are all sorts of exceptions that he's negated, negotiated in return for who knows what with sundry companies like Apple. Apple would have been very badly hit. So it's all very porous and it's all negotiable. So it's not as serious as all that. And then the shock in the Gulf is significant. But oil isn't as important as it used to be. As we discussed, the energy system has changed across much of the world and this will be accelerated, of course, but that's for the future. And prices have gone up. There will be a slowdown, I'm absolutely sure. We might get close. Really bad, really bad. Maybe the world economy grows at 11 and a half percent, but it's not a catastrophe. And finally profits are robust because let's face it, worldwide labor is weak. So companies can manage their affairs in a way to ensure that they survive. I'm sure lots I haven't looked at this. I'm sure lots of small and medium sized businesses are very badly affected. But the colossi that are generating most of the profits, particularly the tech colossi, they're not affected by this. This is at least expose perhaps not as surprising as one might have thought. There's a great deal of ruin in the world economy.
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B
We should see if we can do this entire episode only referencing British historians and economic thinkers. Direct questions.
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C
Are there any of us?
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A
One other thing you mentioned those exceptions that last week I think Trump that they made a little carve out for UK whiskey or something like that. On request of the King. So therefore, much like us, Trump is a sucker for the British accent. Clearly it was the king and everything. He's like, all right, I'll cave on.
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C
Yeah, I think that is something. Yes. He's also a sucker for people who have grand positions. Didn't he?
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A
That's right.
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C
Didn't he have some sort of. Maybe it was true social or something else? When he referred to there being two kings together, that was, I'm sure, not a joke. I think he would like to be king, but when I think about the king he would most likely to be, I immediately come to Henry viii, who was our real king, who made probably the single most important decision made by any English monarch, namely to get leave the Catholic Church and make himself head of the church. I think Donald Trump would quite like that, don't you think? And he was an absolute monarch who chopped the heads of one advisor after another after. I think he quite like that. So yeah, he likes the idea of being a king. Now our poor King Charles isn't like that, but at least he's sort of connected to that. So I can see the glamour. And he lives in palaces. I mean, don't you think he'd rather like to. Mr. Trump would like to move Buckingham palace to Washington and put it in the middle.
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B
I think the Oval Office makeover is very reminiscent of a classic European style palace. I'm thinking of a particular French one.
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A
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A
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B
3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full terms@mintmobile.com setting aside interior decorating. And Joe knows that I could certainly talk about this for much longer, but you know, you mentioned this idea of Trump as, as king and you also mentioned this idea of trade adaptations. And one of the things that's happened since the Iran situation is Trump has come out and said, well, if you can't get oil from the Gulf and you're Europe, why don't you can come to the US and get oil from the US And I'm very curious how statements like that play on the ground in Europe, given that. On the one hand, this is a situation caused by the US I think it's fair to say that Europeans regard Trump as somewhat unpredictable.
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A
Somewhat, somewhat.
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B
I'm doing an impersonation of British understatedness here. And then his message to Europe is basically, well, you know, trust us for your energy security.
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C
Yes, well, I think the trust us has definitively gone. That's hardly news. I think that's true worldwide. I'm just trying to think, does anyone actually trust this guy? Because being untrustworthy seems to me the core of his modus operandi. I mean, he wants to surprise people and he does in both directions. So nobody in Europe believes now that there's any promise that will come for this administration that is to be believed. And I think that's true pretty well for everybody. That's understandable because it's consistent with the evidence and the behavior and even what he says. However, Europe is in a very, very unfortunate position, which is that it grew so dependent on America for so long that pretty well all its structures, its defense system, very obviously, but also the things it didn't bother to produce itself. For instance, the whole tech array, the trade relations, the investment relations, and of course the underlying ideology, the sort of liberal democracy they imported. This all came from America. I mean, we were wrong to say that it wasn't there. A lot of this wasn't there before in different ways, but after the war, the first and second together, it was so shatteringly demoralized as a continent and so damaged. We can go through the damage done to all the different major countries that the US became the core of every aspect of security, belief, trust. They were very, very content with this. So whether they were naive or not, very interesting question. It's all come as a colossal shock. Now. Trump won was when the first administration of Trump was a wake up call. But in the end it wasn't so bad. They felt, oh, well, full of sound and fury, but still didn't signify that much. In the end, he didn't do much. So as he didn't change trade policy, didn't withdraw from NATO, he filled his administration with the sort of people we're familiar with. We like and trust those sorts of Americans. This is a shock. I don't think it should have been a shock, but this is a shock. And in the first year, when suddenly you know your trusted spouse, as it were, very much the relationship turns around and becomes a violent bully. You're sort of in shock, but worse, you don't know where to go and live. Who do you get to? Who's your alternative? Do you want to become friendly with China? Not really. Do you want to become friendly with Putin? Absolutely not. And are we strong enough to survive on our own in all these different dimensions? Of course not. The vulnerability of Europe is staggering. Just think what would happen if the American administration decided, if it could decide that, to just close off our access to the American digital stack, as it were, cloud computing, all the rest of it. So then the question is, well, what do you do? And I think they're still really and truly the Europeans are at an early stage of deciding what they want to do and they find it difficult to agree. Very difficult. There are so many of them with different attitudes, values, historical relations. They don't trust one another. Very important point, by the way. You, you know, the European history is not so far beneath the surface. So I think we are there at the stage of absolute intellectual moral confusion. But they don't trust Trump.
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A
I mean, you sort of anticipated where I was going to go with my next question because, you know, you've written about the threat to democracy that both in Europe and the US that you perceive the Trump administration as posing. And you mentioned that perhaps Trump actually prefers China to Europe at this point. And it seems like, as you've written, the administration seems to have two specific big critiques of Europe. One is a particular conception of free speech, which the administration does not perceive Europe as upholding. And then, of course, immigration, which they would associate with civilizational decline and so forth. Interestingly, in your writing, you acknowledge that both of those, they're strange or they're kernels to both critiques that the European government has to take seriously. Border control, maintaining those liberal values around speech, how much harder does it, or, like, how does Europe chart a path while also taking into account those factors which may have some grain of reality to them?
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C
Well, one of the problems we have is we don't feel, looking at the whole range of what's going on in the United States, that this administration really does believe in free speech. It's a particular conception, to put it mildly, quite a bit of hypocrisy going on. I don't think I need to lay that out for your audience. But there are, I suppose, a number of different elements in this story. I think that the administration is right, but I don't think it's a. I don't think they're honest in their critique, but that some governments, my own included, have gone too far in protecting people from what is called hate speech. And that there is a perfectly good argument that both in private institutions, universities and so forth, and in public, you don't have a right not to be offended. That is clear. However, my view also is that there are some forms of speech that European history, we'll see where it goes with American history, suggests are profoundly dangerous. And the one I used in my example of this is that if you're lecturing Germans on the import which is started in. The most notorious start of this was Wanz's speech in Munich last year, in 2025, well, the Germans feel that it really would have been a pretty good thing if they'd stopped Hitler saying some of the things he said. Indeed, if they'd removed him and put him in prison for a very long time, and not instead of just letting him out when he was put in prison. So there are questions of how far you allow speech to be free. It's a fine doctrine. But it seems, actually the administration, too believes there are lots of things we really don't want people to say so there's an issue there. But I think there's a critique there on the civilizational thing. I think, and I wrote this in my book, that one of the things that define a state, and certainly a democratic state, is the possession of borders. A state and citizenship, which is associated with a state in a democratic context, is exclusive by definition. The values may be universal, but citizenship is not by definition. And that we get that going all the way back to the beginning of these ideas in our ancient world, the Greeks and Roman view of what a republic or a democracy was. So I think that not controlling your borders and making sure that the people who come to live in it, particularly the people who come to live in it permanently, are people you've chosen, it's been a political process in which you've chosen them, is essentially in violation of the citizenship compact. And I wrote that at length, and I think it's perfectly understandable why many citizens would feel we don't want everybody in the world to come here. It would create some very, very big problems. And I think the view on the parts of the left, quote, unquote, progressive left, that borders should basically be abolished is not compatible with the survival of any form of democratic notion grounded in citizenship. So I'm very clear that was a big mistake. What worries me more about the concept of democracy that is emerging, which you see in the Trump camp, and you saw in some of the people he admired, like Victor Orban, is the idea that if you are elected, anything you do by definition, is democratic. And that is absolutely incompatible, inconsistent with obviously, the core premises of the Constitution, particularly what we would think of as the Madisonian principles, that there is such a thing as the tyranny of the majority. So even if somebody has a majority very rare, that they do, that doesn't entitle them to do whatever they want. Constraining institutions are the core of a republic, the republican idea. And I am concerned that ideologies that reject that on the left and the right have been reborn over the last 20 or 30 years, perhaps a bit longer. And that's what the Second World War was fought against in a very extreme form. So I'm not comparing them with that.
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A
Sure.
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C
And so while I agree that there are important elements of the critique which are serious and we should take seriously, which I've mentioned, that the critique doesn't seem to me to be coming from an honorable place. If the aim is to preserve republics, if the aim is to preserve ethno national dictatorships, which Mr. Putin would certainly agree with, then that's something else. But that's not my side.
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B
I feel like it's become a cliche at this point to, you know, no matter what happens in the world, people always seem to say Europe is like the loser. Yeah, it's bad for Europe. Right. Is there a sliver of hope down the line? If we think that one of the things that Europe has struggled with is, you know, strategic autonomy and managing all these different national interests, and if we think that maybe the US Emerges as a force for Europe to unite against or maybe encourage it, motivate it to develop some form of centralized strategy or autonomy, couldn't we see a more united Europe out of the situation?
- [32:36]
C
Well, that's one possibility. And it's a possibility that pretty well, everyone who's a friend of mine who's European, and I suppose I would want to see. I think it's important to understand why it's so difficult. And this gets back to the sort of, if you like, the historical tragedy of Europe. How did it get to be where it is? I wrote one column on this, which I'm particularly proud of it. So I will repeat some of the. The argument. The. Essentially, that Europe transformed the world. It's absolutely unambiguously the case. This peripheral, you can call it the continent, really just a promontory off Eurasia six or seven hundred years ago was pretty irrelevant. And it ended up conquering most of the world and completely transforming the world intellectually, culturally, scientifically, and politically by creating these vast empires and one product of which, which was the United States. And how did this happen? Well, there are many arguments about this. There was a shared civilization and profound political rivalry that the one core element of European history since the fall of the Roman Empire is that it was Christian and divided. And so the European states evolved in conflict, and they became very, very, very good at it, Extraordinarily good at it. So good at it that once they really got going, they ended up by conquering so much of the world. It's still very shocking that they did. You know, I still think. Think of how few thousands of English people succeeded in conquering India in the middle of the 18th century. It's completely freakish. So this. This fragmentation was a core of it. And the cultural development, the scientific was also the core of that. Because when there was a problem with one state trying to suppress certain sorts of thinking, people moved everywhere, somewhere else, or the ideas moved somewhere else. So there is this idea which I think is right, that the division of Europe Actually made it. I think this is very very powerful idea and correct. And China's unity held it back because it didn't allow for this competition. Europe was built around competition among the states, among the rulers and within them as a result. Partly because of this I won't go through all that because it takes too long. So then at the end of this magnificent process, not surprisingly, when the modern states were emerging after the industrial revolution, nationalism became the way of mobilizing the people. For the first time you really create it mobilized societies. Before that the armies were predominantly professional or class based armies. The French really invented the universal conscription state. And this culminated in the two world wars which completely shattered Europe. It shattered its idea of itself, its confidence in itself and its values because look what happened in the death camps. So Europe's triumph ended up in a catastrophe. And that's what Europeans. I'm old enough to remember all this. I was born just after the war.
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B
Not the colonies, surely not the colonies.
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C
It was actually Europe itself that destroyed itself in the end by the way that led to the direct liberation of all the empires because they didn't have the power anymore to do it. And America was very keen on its breaking. Absolutely right by the way. So anyway Europe said after that we have to be something completely different. This is really important. We have to be something completely different. But the most important we need to unite. But we're still member states. We have different histories, languages, cultures and so forth. We can't get rid of that. So we must cooperate. We want someone to look after us. That was the US we don't trust ourselves. We've lost trust in ourselves. Very important the British least which cover this because they got through it. So they decided that they would. They feel we can be outside it, we're an island. But the others, the enemies are just across the border everywhere. Go back to that. The end of the world. So we, we left everything to Uncle Sam because he was a kind generous uncle, made a few odd mistakes. But basically we trusted. That's how we got to where we are. This is my 10 minute history of Europe. Now suddenly you're saying you want us to become a superpower. You want us to be a great power with an army and a will and we don't trust any of that stuff. The last time we tried to do that we blew up the world. This is not nothing, it's still there. The desire, the will to power. The famous isn't really there. So that gets to the answer to your question. What do I think will happen? And I think that's exactly the struggle now, because you could see in a sense there are two forces in Europe today. One is a centrist, liberal, rather mild desire to create an effective Europe which isn't really a state but is more of one than now. That's the center. And the other side is right wing nationalists. But the right wing nationalists are nationalists, they're not European. Because when you start going back to who the nation is, you go back to France, less Germany, but it's going to happen. Italy is a peculiar story, I won't go into that. But in France, the French right is nationalistic, protectionist. It doesn't see itself as Europe. There aren't any nationalists in the sense that Vance is a nationalist or Trump is a nationalist who are European nationalists. It doesn't. That's an exciting. There are, but there aren't many. And in political will terms, then you have this either mild centralizing desire to pull together, be a more effective club, which is what I would like to see, or it's yes, we would like to be a great power, but it's the nation. And as one famous European politician once said, in Europe there are small countries and small countries that don't realize they're small. And so if you honestly ask me how this will play out, I have no idea and I don't think anyone does. I know what I would like to see. I've indicated it. But that may not be what is possible. What you really need is a European Charlemagne or Napoleon. And that doesn't come out of this because there isn't a European with that will. The last European who had the will to make Europe was Hitler. That's what he wanted to do. It would have been a German Reich. And before that was Napoleon. And before that Louis Quatorze briefly mentioned. So I think the question of what Europe's future is, what it can be, given its history of fragmentation and the extraordinary life that came out of this fragmentation, I think it's just not at all clear. But there's no doubt that America is helping if it does develop an independent sense of itself with its own institution, sense of destiny, sense of identity, very difficult in a multinational state like this entity like this. Then it will be because the Americans are saying, you can't trust us, we're going to beat you around the head if you don't sort yourself out. Maybe that will count.
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- [42:51]
A
non stop work Family workouts True nature meets New York Strip Steak Richly seasoned pre cooked perfection that melts in your mouth mouth. 30 years supplying the finest steakhouses heat in four minutes. No stress, just nourishing joy. Head to TrueNatureMeats.com code free meat for 20% off plus free New York strip Texas Smoked Brisket and Mediterranean Chicken with Code free meat@trunaturemeats.com that was a fantastic sort of overview of the history and the core challenge. I'm curious. Look, predicting the future is impossible, so maybe we'll just stick to the present and the past. The UK left Europe, so the UK left this sort of structure that was put in place to sort of denationalize the continent.
- [43:41]
C
We did join late, not accidentally, but
- [43:44]
A
also like okay, so the UK in theory has more sovereignty now than it had when it was part of the eu. What's it doing with that sovereignty? Because it doesn't look like it's been able to put it. It looks like more or less the struggles of continental Europe and the UK are more or less shared. What's holding the UK back?
- [44:08]
C
It's a perfect example of a small country that didn't realize it was a small country. They thought the people who sold this sold this in part because they said, this will stop all these immigrants. It turned out actually we could do a stupendous job of accepting immigrants from everywhere else in the world as soon as we stopped the Europeans. So that was sort of. They were sold a bill of goods on that was pretty obvious. They were told we would be able to do all sorts of wonderful deals on our own, and we've done a few minor deals. One of the deals we were promised was a free trade deal with America. That certainly didn't happen. The point is, Britain on its own is a minor power. So the idea that the liberating ourselves from the EU will mean that we would suddenly have huge choices to transform ourselves and our relation to the world was a fantasy. Now, that's one side. The other side of it is, of course, that a very large part of what we had in common with Europe. Europe, the welfare state, we had a relatively undeveloped one, but we have it in common. The problems of our economy, deindustrialization, the difficulty of coping with Chinese competition, for example, become more obvious. There are weakness in technology and so we share with Europe. Britain wasn't different from and therefore didn't have completely different options from European countries. We are very similar. The Germans, and they're all different in a certain ways, have different strength. But actually, in the big picture, Britain is just another European country. What else could it be? Look at its history. The only difference is got these tiny little waterway between us and that's preserved independence. I'm not saying it's nothing, but essentially the opportunities and the challenges for the British economy, essentially those of Europe. And leaving the EU hasn't suddenly given us an enormous number of new opportunities which allowed Britain to transform itself and certainly no British political leader. And I can say this with some confidence looking at the whole lot, have any fundamentally new ways of operating here which are going to transform the performance of the country? And that's become more and more obvious, and it will be even more obvious if Nigel Farage or Zach Polanski becomes the next Prime Minister. Nobody offers a coherent strategy for solving the problems of Britain as they are now. And it's partly because they've actually genuinely become very, very difficult.
- [46:54]
B
Since we've been talking sort of broad strokes history. Very broad throughout this. Yes. Can you give us your thoughts on, like, what is the world that the US is ultimately working towards, inasmuch as you can try to eke out a coherent strategy from the Trump Administration, like what is it that they are working towards?
- [47:21]
C
I. I'm almost speechless in response to that very, very good question because it's very difficult. Part of the problem I think is I see a separation between Donald Trump as a person, very him, obviously charismatic and exciting, and his views of the world from that of the various different elements of the coalition that he's put together, which is a pretty strange coalition, pretty intellectually, culturally. It includes obviously a very large number of spectacularly wealthy and powerful business people, some of whom have a religious belief in the future. And at the other hand, it includes intellectual elements and people who have a religious belief in the past. I mean, pretty obvious they want to go back to a theocratic state or theocratic state structures. They want to establish. Re. Establish patterns of behavior and relations between men and women, between races and so forth, which was sort of old fashioned. So there's a blistering new and a crusted old, as it were, trying to work together here. There are intellectual elements and then relatively small numbers, I presume, and a huge mass of very dissatisfied people, particularly, as far as I can see, men and old people. What do these people have in common? So to answer the question, what do I think America's about? I don't know because I don't think the MAGA movement, broadly defined, if I can use that word, knows what it wants. Because I'm not saying that individuals, people don't, but they don't show share anything that is other than their affinity for Trump.
- [49:22]
A
What other than their affinity for Trump.
- [49:25]
C
So if I understand this view, what they might share and as long as somebody like Trump is there, Trump wants to be king. I think that's pretty clear. He wants to be a man who says my word is law. It's pretty obvious he wants to rule a state which is free to do anything, which is anything he wants, and is bound by no constraint or law or rules, external or internal. And Luca Torres would have understood this. I mean, it's perfectly understandable. This is how much of, much of humanity was ruled since the agrarian age. Any Egyptian pharaoh would have understood this. So he wants that. He has no ideology really beyond that, except it is very, very important to make clear in every bilateral agency, he thinks bilaterally that he's the boss and the others aren't. And so he will throw his weight around, particularly against anybody who thinks he's essentially not showing him proper respect in various different ways. So Maduro, so the mullahs. And as he put it, the only constraint on me is my own Sense of morality. Well, you work out what that means. So that is what he wants, what he wants to be, and he will naturally respect people who are like him. The movement, I think, has multiple different objectives. Some of them would like the United States, which coincides with Trump, to the United States to be a 19th century great power, like Britain in 1850, Palmerstonian Britain, you know, we have no friends, no permanent enemies, we have permanent interests. That would be a more intellectual version of this. And obviously lots of them think that, but some of them pretty well, obviously, Hegseth is a. Is a Christian crusader. That's a completely different set of ideological aims. Vance seems to be an isolationist, so there's nothing coherent there. And so in the end, when I look at this, I think this is Trump's party, and with Trump, what you will get is action. Not intellectually grounded, pretty ignorant. He will use a lot of power and if he doesn't work, he will withdraw. Thank heavens. That's what I see. It doesn't seem to me that we're looking at the US under this regime and looking at the people around that has a coherent sense as a whole of what it wants to be and what it wants to do. That's terrifying because it is the most important country in the world. It is the guarantor of the system, which I like to point out works sensationally well for the U.S. so one of the most astonishing thing to me is that if you look at it from outside the U.S. i mean, I think it makes incredible mess of its own policy and politics. It could do much better, but the US is a spectacular success. Why does everybody want to change everything? It seems very difficult to understand. You know, if you compare it with the Roman Empire, the United States is sort of in the second century, so what's the problem? But this US is what I see now. It could change, presumably, though I have no idea whether it could change durably. And this is my last point, was very much a part of my new postscript for my book. You won't restore confidence in the rest of the world that the US sort of knows what it's doing and what it's about, has a coherent sense of itself just by a defeat in one election. Because that's not it. That's not over. You have to think that this has become unthinkable and it doesn't seem to me likely looking at it. So the honest truth, and I'm someone lived In America for 10 years, a foreigner, but I lived there, followed it closely. The place has become completely bewildering. And a completely bewildering superpower is absolutely terrifying. Nobody likes China. Nobody really. But they know what it's about. It's predictable. You know how the regime works, you know how the system works. You know what Xi's trying to do that one can live with. It's very difficult to live with a country with this power, which is as completely bewildering as this one has become. And I've tried to give you some sense of how I think about it. And in the end, what I do is see an incoherent movement of people full of resentments and hatreds, including amongst one another, but also amongst other Americans, the rest of the world. And Trump, who is sort of, you can make sense of him as long as you accept he doesn't operate in a way that one would normally think of as rational. So when I think of a ruler, I mean, like him, I think of Nero.
- [54:44]
A
You know, there's a million ways we could have a million things I could ask you in the box.
- [54:49]
B
Isn't that your cue to ask about Roman Empire history? Isn't that. We could go, you're a middle aged guy, come on.
- [54:56]
A
That's true. You know what? I have a phrase. This is why you're here phase. Yet I have, you know, you said
- [55:01]
C
I studied Roman history.
- [55:03]
A
You did.
- [55:03]
C
I studied classics, so I read a lot of Ancient Greek and Latin at Oxford.
- [55:11]
B
So you are always in fact thinking about the Roman Empire.
- [55:16]
C
The first and best column by far I wrote about Donald Trump. It was in March 2016 when I said Donald Trump is How Great Republics Meet Their End. That was the headline. And it compared him with the Caesars, Julius and Augustus. Who Tavian, who basically ended the Roman Empire. But they were far cleverer.
- [55:38]
A
You know, you mentioned that Europe excelled during a period in which there was competition among states, but also the shared. And you used the Christian civilization. When I think, you know, you mentioned
- [55:54]
C
they did have 250 years of religious war along with that period.
- [55:59]
A
But I'm curious, you mentioned the sort of like the mild liberal, you know, not quite a European nationalism, but this like sort of mild liberal desire for some sort of Europe that exists. You know, one thing I think, like, should there be maybe philosophically, maybe in practice, like does. Would it. Would it go along well with the revived Christianity in Europe? Because when I think about secular liberal Europeans, one thing is like, nobody goes to church. But historically a lot of liberal ideas were co located, so to speak, with Christian ideas, particularly around sort of like equal Rights. And there's a lot of framing. Could that underpin or could that be a tailwind for a sort of reinvigorated Europe if it found that sort of spiritual vector Again?
- [56:54]
C
One of the things that I think is very important, which I didn't stress in the history of the last 200 years, particularly the 20th century, is Europe spawned a lot of ideologies, incidentally, it spawned all of them. So obviously every variety of Christianity you can imagine, which they happily fought over for much of their history. Orthodoxy, Catholicism, Protestantism and so forth. And of course, socialism, communism, fascism, the dominant ideologies of the world. And one of the things that happened as a result of the religious wars, which were devastating, arguably the most destructive single war in European history, though it's very, it's in a particular place based in Germany, was a 30 years war of the early 17th century. And I believe something like 30% of the population was killed. And it was many other things, but it was also a religious war. So by that was the 17th century, everybody believed. The problem is when everybody really believes in something, they often find an excuse for killing people who don't. And I won't even talk about what happens to Jews. And then, of course, the same thing happened with nationalism, which led to some pretty spectacular wars. And communism, that was more mass murder internally. So Europeans became, and this is part of, I think, European culture, civilization after the Second World War became exhausted with that ideology. Yeah, we wanted to stop that because when we. I think it was very widely shared, whenever we got one of these, we ended up with mass murder. And the truth is, nothing bad has ever happened to the US except your idiotic civil war, which should never have been fought because the civil. Because we. Slavery should have just been abolished by then. It wasn't justifiable. So the point is. But one of my favorite statistics, I can't remember the exact figures, but if you compare the number of Americans who've died in war, I think it's somewhere over a million, including the Civil War, million and a half. You can probably give me the exact figures. In Europe, it's many tens of millions. So. So the idea of really believing in things, really, really believing things to the point that you actually want to go and kill people who don't share those beliefs, which is where it seems to go, is very, very frightening. Now, the younger generation now may now have forgotten enough history to start it again. So it might happen, but that was a dominant part. Yes, we wanted to defend ourselves against communism because it was one of those IDEOLOGIES European ideologies that had gone wrong pretty obviously. We had realized, most of us, Stalin's death camps meant in terms of deaths. So Europeans didn't want that. And we look at, when I say we, I, I look at these Europe Americans now with enthusiasm for ideology and for passionate belief. And also all I see is people who want to come and kill their neighbors because they have the wrong views or they're the wrong color or they're the wrong whatever. And that's Europe, that's European history. Hecatombs. Now the problem with that is if you carefully Toleration is your dominant mode, you can accept everybody except the intolerant and you crowd them out. That doesn't last. As you rightly say, sooner or later people start getting passionate beliefs again and we may be moving in that direction. But I'm one of those people who thinks once you're in that mode, it's very difficult to find the off switch because sooner or later everyone around you starts thinking, looking like an enemy. And so I don't want to go that and most Europeans of my generation, or even somewhat younger don't want to go that because we bear the scars. And I think in a different way, why do the Chinese in the end accept the current regime? Because it works and it doesn't kill them all and they don't want a lunatic again. So we're not going to become Go where you are because we tend to think where you're going could ultimately lead you to some very, very dark places.
- [61:53]
B
I wasn't expecting this conversation to be so sort of state centric in many ways. But since we've gone in this direction, and since again, we're talking about the long arc of history here and society, can you talk a little bit about the impact of AI on. If we think about the social contract between a state's population and its political authority, what does it mean when work starts to be automated? When maybe culture becomes more automated? I realize this is a very general big picture question, but if anyone can respond to this, you can.
- [62:29]
C
Well, I think of this as the ultimate Faustian bargain. The devil promises infinite wealth and power to Faust in return for his immortal soul, which is in some sense his meaning. And he makes the bargain and it doesn't end well. So we have been fantastically innovative and creative and we have in the process made ourselves vastly wealthier and wiser in some obvious ways. But we're always skirting the brink of catastrophe as a result. And the last thing that really motivated people around those Lines was nuclear weapons created. People like Einstein got terribly frightened about what they created. Well, I think of AI that way we have made a Faustian bargain and we have created a servant, quote unquote, with the capacity to replace us or even in some way to dominate us. Where this will end up I don't know. But it seems to me there are a number of absolutely terrifying dangers. I think, and I thought for the first time I read about it three or four years ago, that it was going to prove completely unregulatable. It would competitive process and so forth. It would make institutions that used it unaccountable in some profound way because decisions were not being taken by anyone you can hold to account. It would create transformation in our society, in our economy and in our sense of ourselves, which was unavoidably just of an order of magnitude different from anything that had come before. And in the short to medium run, a lot of this would seem very helpful, very encouraging. We'll enjoy it. We will be able to do things we couldn't do otherwise. But if we do get to artificial general intelligence, and it's absolutely clear that the machine dominates humanity in terms of what it can do intellectually in every possible way, then there is an existential question obviously raised. What is humanity for and what will human beings think there for? So when I thought about this, and I'm leaving side the other obvious dangers, the creation of pathogens we can't possibly manage, the creation of armies AI run armies which are completely bought armies which could control human population with sort of just flesh and blood, with such. All this is absolutely terrifying. And we're dancing into this and Susiant Lee under the direction of four or five geniuses and their companies. And that's what's happening. My instinct, probably those of an old man with, with grandchildren, is it should all be closed down. But of course it's not going to happen. I do think it's transformative. I think it's going to be transformative in business. Pretty clear they're going to be powerful business models. I can perfectly well understand that 10 years from now there will be no Martin Waltz because the computer will do it so much better. They'll be less fun. But I think we just have to say we are stepping into the unknown. We should do our best to work out what our big dangers are and focus on them. With our current politics, that's impossible. Clearly impossible. I think it is a huge moment in human history, possibly the single most important invention and there have been some very, very important ones. And humanity will change profoundly. Humanity was changed by writing profoundly. It was transformed by publishing, by the ability to print. It was transformed by the Internet. I think this is probably more important than all of these put together. But I'm not sure. But my instinct is I'm a great fan of Frank Herbert, the Dune books, particularly Dune itself, and his idea that at some point in the past there was something called the Butlerian Jihad in which at the end of which machines that think were banned. I wouldn't be terribly surprised if 100 years from now people, if there are people still around, will say we should have done that.
- [67:11]
B
Well, Dune references were also not where I was expecting this conversation to go.
- [67:15]
C
But science fiction is better on this sort of stuff than anything else.
- [67:19]
B
Yeah, I see that.
- [67:20]
C
The great science fiction writers. Asimov is another of my fans, my heroes. Sorry. He wrote wonderfully. The laws of robotics and nobody seemed to be thinking about those either.
- [67:33]
B
We should get a list of recommended sci fi books from Martin and put it in the newsletter. We'll follow up with you afterwards. Martin Wolfe, another amazing conversation. Thank you so much for coming back on all thoughts.
- [67:45]
C
Well, it's certainly not what I expected.
- [67:47]
A
Thank you so much. We'll chat with you again next spring.
- [67:50]
C
Okay.
- [68:04]
B
Joe, that was fascinating.
- [68:06]
A
Indeed.
- [68:06]
B
I feel, I feel a little bit like I was back at university getting a history lecture. I also just realized since we've come to London from Madrid. Yeah, we could hit maybe four, I want to say four more European cities and get a complete European colonial tour.
- [68:23]
A
I would love to.
- [68:23]
B
Gotta go to Lisbon, Paris, Brussels. That's three.
- [68:29]
A
We really need. We need to make a. We need a European tour. We need a. We need to make this a recurring spring trip to London. There was so much in that conversation that was interesting.
- [68:40]
B
I do think so. I do think Martin hit on something. And it's funny because this came up in our conversation from last year as well, where we were talking about the dollar reserve system and the idea that like, yes, okay, there are down sides to having the world's reserve currency, but there are also a lot of upsides, including being able to run a massive fiscal deficit. But like his point that it's difficult to understand why so many Americans in particular are so aggrieved as to want to blow up an existing structure that compared to the rest of the world, seems to have benefited them enormously.
- [69:19]
A
I love his point about the sort of like. And it raises some questions about the short term future, like just a few years from now. So what is the Trump coalition for example, there's a really big difference between the AI focused Peter Thiel world versus some of the people who would like a world to go back to the 1950s and so forth. Another thing that I hadn't really appreciated until he articulated on the Europe question when joke about the EU and they love their documents and their reports, their studies and regulations and stuff like that, but this sort of not just okay, let's put in some mechanisms to avoid World War II again or something like that, but this sort of the complete exhaustion of ideology. Yeah, I think it's such an interesting framing. It's like every time we've gotten into some new ideology it like ends terribly. So it's like let's make the attempt of sort of creating a post ideological superstate in somewhere. It's such an interesting framing. And like, I don't know, like maybe it's that was. Maybe that's an experiment with a finite time span.
- [70:29]
B
I guess we'll find out. Shall we leave it there?
- [70:32]
A
Let's leave it there.
- [70:33]
B
This has been another episode of the Odd Lots podcast. I'm Tracy Alloway. You can follow me, Tracy Alloway and I'm Jill Wiesenthal.
- [70:40]
A
You can follow me at the Stalwart. Follow our producers, Carmen Rodriguez, Armenarman dashiell Bennett at Dash and Kevin Lozano at Kevin LloydLozano. And for more Odd Lots content, go to bloomberg.comoddlots we have a daily newsletter and all of our episodes and you can chat about all these topics 24. 7 in our Discord, Discord, GG Oddlauts
- [71:01]
B
and if you enjoy Odd Lots if you want us to do a science fiction review with Martin Wolf, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.
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D
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