← Something You Should Know
Something You Should Know
How Ozempic and Similar Weight Loss Drugs Really Work & The Story of Money
00:48:55
The risks and rewards of Ozempic and other GLP-1 drugs, the surprising history of money, and whether visualization actually helps.
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- [00:01]
Podcast Host (Sponsor Segment)
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- [01:18]
Mike Carruthers
Today. On something you should know if you imagine yourself doing something, can it make you actually doing it? Then the latest on OIC and other weight loss drugs, how they work and their interesting side effects.
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Amy Donelan
One woman I spoke to said that she loved eating takeout. Another guy I spoke to loved Diet Coke. And when they were on these drugs, they had no interest in those types of foods. They wanted salmon and vegetables and they'd go to grocery stores and they would spend most of their money on fresh food.
- [01:49]
Mike Carruthers
Also effective ways to keep warm when you're in the cold and the Fascinating history of money and why it's often a difficult subject.
- [01:58]
David McWilliams
It is because money affects us in a different part of our psyche. To Logic, Take a price of something. Economists, when they see a price, they see a number. When real people, normal people, see a price, we get a feeling all this.
- [02:14]
Mike Carruthers
Today on something you should know.
- [02:17]
Podcast Host (Sponsor Segment)
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- [03:59]
Mike Carruthers
Something you should know Fascinating intel, the world's top experts and practical advice you can use in your life today. Something you should Know with Mike Carruthers so here's a question that you've probably heard discussed and maybe even thought about yourself. And the question is, can imagining yourself performing a skill actually make you better at performing that skill in real life? That's the question we're starting with today on this episode of Something youg Should Know. Hi and welcome. I'm Mike Carruthers. The short answer to that question is yes, imagining yourself performing a skill can make you better at it. In the 1930s, researchers demonstrated that when you're imagining an action, your brain sends signals to your muscles, subtle little triggers that are too weak to make the muscle contract, but ones that might help train the body to perform alternately. Mental practice may create a blueprint in your head, like an inner how to guide for a particular skill. Sports psychologists have conducted hundreds of studies comparing imagined and physical practice for things like throwing darts and juggling and tap dancing. And overall, the research shows that mental training works. There does seem to be one big caution about this whole thing, though. It doesn't work for novices. If you rehearse in your head how to shoot a free throw, but you have no experience doing it, you will likely rehearse it all wrong. And that will actually make you worse at it if you actually try to do it. And that is something you should know. This episode is publishing right around the start of the new year, which is a time when a lot of people are thinking about losing weight. And by now, I'm sure you've heard all the same discouraging messages that dieting doesn't work. Weight loss is hard, and even when people do succeed, the weight often comes back later. Losing weight on your own can be an uphill battle. Now, some people do succeed, but many don't. And now there's something new in the mix. These weight loss drugs like Ozempic, they don't work for everyone, but for a lot of people, they really do work. And the success stories are hard to ignore. So how do these drugs actually work? Are they safe? Do they change how you think about food? What happens if you stop taking them? And what about the side effects? Here to answer all those questions and more is Amy Donelan. She's a columnist at Reuters whose reporting focuses on the pharmaceutical industry, and she's author of a book called off the the Inside Story of Ozempic and the Race to Cure Obesity. Hi, Amy. Welcome to Something youg Should Know.
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Amy Donelan
Very nice to be here, Mike. Thank you.
- [06:58]
Mike Carruthers
So where are we today with these GLP1 drugs like Ozem? Because when they first came out and people were reporting success, there was also a lot of caution. We don't know enough. These drugs could be dangerous. The jury's still out. Is the jury still out? Are they safe? Are they not safe? Where are we?
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Amy Donelan
I think that that is the question. That is still a very big question that's out there. I think we do know a lot more than when we first started, when the drugs first came out. So what I would say is that I think a lot of people who specialize in obesity think that these drugs are an amazing breakthrough and something that really kind of benefits an awful lot of people. I think that there is still a little bit unknown as to how these drugs affect the brain, because these drugs do actually travel up your vagus nerve and get into your brain, and they do impact people's behavior and their cravings and their addictions and things like that. And I think there's still a little bit unknown about that. Scientists are still doing research on the other things, the other benefits that come with these drugs. So there's weight loss, obviously, that they also control your blood sugar, but there's all sorts of things they do to your kidneys, to your liver. Many of the benefits they're still exploring. So, but I think in general, I think, you know, there was a question of, you know, there was such a terrible track record for obesity There was the fen phen scandal in America where a lot of people took these drugs and then actually they ended up really damaging people's hearts. I don't think that Anyone thinks that GLP1 drugs are anything like that. There are some people who unfortunately suffer very significant side effects with them. But for a lot of people, they enjoy tremendous weight loss and kind of, in some cases, a transformation of their lives.
- [08:50]
Mike Carruthers
Well, I remember here, I remember talking to someone on this podcast and the take that I hadn't really thought about because people were being very critical of these drugs or there was a lot of criticism going around about them, that, yes, it was effective, but at what risk? But then the guy said, and it just really stuck with me, that, well, there may be risks to these drugs, but there's a real risk to obesity, and that you can't ignore that. These drugs do help that. And so we need to keep looking at this because you can toss them aside and say, well, there's risks, but being obesely overweight, we know what those risks are, and they're not good.
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Amy Donelan
That's true. That is very true. So obesity, as I'm sure you know, is linked to 13 different types of cancers. Heart disease, fatty liver disease, you know, type 2 diabetes itself is, you know, can really wreak havoc on your body. And again, it leads to all sorts of heart problems and kidney problems. So I think you're right. I think that a lot of people who go on these drugs experience nausea, some people have diarrhea, but then they decide that actually those things are tolerable compared to the future that they would have living with the disease of obesity and what that might do to their body. So I think that their lives are, if they can manage to get through that phase, which a lot of people do actually get over, the phase where they have some unpleasant side effects and they are willing to do that. And as you said, I think the disease of obesity is very deadly. So, yeah, I think that's something that people are weighing up.
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Mike Carruthers
Can you give me a fairly brief history of these drugs? Where did they come from? What does GLP mean? What? Ozempic is a brand name. Can you set the stage for me so people know what we're talking about, how we got here? Sure.
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Amy Donelan
So it's a really interesting story because this is first of all a hormone that is found naturally in the human body, and it's glucagon, like peptide one. So this is a hormone that exists in your stomach. So think about if you have a Thanksgiving dinner, a Christmas dinner, big, big meal. GLP1 is a hormone that's created that basically tells your body you've eaten enough. It's like, basically you're satiated, you don't need to eat anymore. And it's created. And so in the 1980s, and this was before really obesity became this crisis that it is today, there were scientists who were really trying to work on type 2 diabetes, that the only real treatment at the time for type 2 diabetes was insulin. So they were looking, these scientists in Massachusetts General Hospital in Boston and another scientist in Copenhagen in Denmark, they were looking at the sort of natural hormones of the body and thinking, if we can harness these hormones, if we could make a synthetic or you. A scientific version of this in a lab, maybe we could come up with a much more effective treatment for type 2 diabetes that could control blood sugar better. And that's exactly what they found. And two scientists who were working in Novo Nordisk decided that GLP1 would be. Yes, absolutely. They wanted to make a diabetes medication out of it because that was the specialty of the company. But they also started to notice that there was weight loss with these drugs. And that's not necessarily unusual with drugs. There are many drugs that cause weight loss. But what they thought was interesting is that a lot of the people, the type 2 diabetes patients, were also living with obesity. So they thought if we could come up with this drug that not only deals with their blood sugar issues, but also helps them lose weight, this would be amazing. And then Ozempic, as you said, is a brand name, and that is Novo Nordisk's obesity. It was actually its type 2 diabetes medication. And that if you're in America, that came along with a very, very catchy marketing jingle, which was the OO Ozempic. And that's what kind of got into people's minds.
- [12:57]
Mike Carruthers
And so the way they work is how do they. Do they make you just not want to eat more, or do they somehow do something to the food you eat that it doesn't stay, or what is the mechanism that makes it work?
- [13:15]
Amy Donelan
Okay, so you take a. First of all, you take an injectable pen, which is like a needle, and it basically, it's once a week. And when you take GLP1, what it does is it delays the emptying. It delays the emptying of your stomach. So you eat food, but you feel fuller for longer. So you don't. You're not as hungry as much. But as I said, there are some things that we still don't really know why they do the Things they do. So lots of people that I spoke to really didn't have much. They didn't have much craving for unhealthy food. So they had been. One woman I spoke to said that she had, you know, loved eating takeout and McDonald's and all sorts of things. And other guys spoke to, loved Diet Coke. And when they were on these drugs, they had no interest in those types of foods. They wanted salmon and vegetables and they'd go to grocery stores and they would spend most of their money on fresh food. They drank lots of water, lemon infused water. People talk about drinking. They don't really have any interest in sodas. So the main thing that we definitely know is they delay the emptying of your stomach. That's like the key mechanism for making you feel fuller. So one doctor I spoke to said it's almost like these people who have struggled with their weight all their lives live like skinny people. So they go around not really thinking too much about food, not really interested in food. And for any of your listeners who have sat opposite somebody who was on these drugs over dinner, you will sort of notice sort of a familiar thing where they sort of push their food around their plate. Like, it's almost like, I think in some ways, if you were to have had a dinner and somebody put a dinner in front of you, how much interest would you have in that meal? And I think that's what a lot of these people describe.
- [14:54]
Mike Carruthers
So unless you've been there, unless you've taken these drugs, it's probably a little hard to imagine what that might be like. Well, the example you just used of putting a plate in front of you after you just ate. But you know, if you like pecan pie, it's hard to imagine not wanting it and yet they don't necessarily want it. But what about the people on whom it doesn't work?
- [15:21]
Amy Donelan
There are people who it just doesn't work for. There's about, I'd say 10 to 15%. It doesn't seem to have any effect on at all. So they don't lose weight, they don't have any, you know, unpleasant side effects. They just. It's almost like they've taken nothing. So for those people, obviously it's very unfortunate. But there are, I mean, Eli Lilly is the other company that is making these weight loss drugs. So they have Mounjaro, which is a very popular drug at the moment, that is a diabetes medication, which also has weight loss benefits. And they have Zeppelin, which is their obesity medication. So they are working on all sorts of like new versions of these drugs. And it's not only them. Roche is a Swiss company. They are, they've got a whole like basically GLP1 franchise now that they're working on. Novo Nordisk is also working on new drugs, the one that made Ozempic. So there's quite a rush of companies to try and make drugs that actually will work for some of these people who they just don't seem to work for at all. And to also service the people who are struggling with side effects, because about 50% of the people who take these drugs come off them a year later, which is quite a high number. And particularly when what they're finding in studies is if you come off these drugs, you put all the weight back on.
- [16:30]
Mike Carruthers
Well, that was going to be my next question and that I want to dive into in just a moment. I'm talking with Amy Donelan. She's a columnist at Reuters and author of the book off the Scales the Inside Story of Ozempic and the Race to Cure Obesity. The new year brings new health goals and wealth goals. Protecting your identity is an important step. Your info is in endless places that could expose you to identity theft leading to lost funds. LifeLock monitors millions of data points per second. If your identity is stolen, our restoration specialists will fix it, guaranteed, or your money back. Resolve to make identity, health and wealth part of your new year's goals. With LifeLock, save up to 40% your first year. Visit lifelock.com podcast terms apply. This is pro linebacker TJ Watt and I'm back with YPB by Abercrombie for another activewear drop. My second co design collection has new shorts and tanks that keep up with all my in season workouts. And their new Restore collection is a game changer off the field too, because even pro athletes like me need rest days.
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David McWilliams
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- [17:34]
Mike Carruthers
Online and in stores, because your personal best is greater than anything. So Amy, the question I was gonna ask you was these drugs only work for as long as you take them. In other words, you can't take them and develop new habits, new, better eating habits, then come off the drug and carry on with those new habits. People who come off the drugs tend to put the weight back on and go back to eating the way they did typically, right?
- [18:09]
Amy Donelan
Yeah, that's absolutely right. And I think again, there are parallels in pharmaceuticals that you can think about. So think about statins. Statins work for as long as you're taking them, but if you come off statins they don't work anymore. And similarly to insulin, you know, insulin works very well if you're taking insulin regularly, but when you stop taking it, your body goes back to the way it was. But something that I found really interesting is that when you speak to people who are on these drugs, their behavior, the thing I was talking about, their cravings, like, you know, the pecan pie that you talked about, or Diet Coke or white wine, a lot of people talk about really having not much interest in alcohol, that when they stop taking the drugs, those cravings come back almost immediately. And so that. That sort of shows you the impact of these drugs on people that they do. They are changing behavior, but you have to keep taking them. And I think that that is something a lot of users really struggle with, is they think that they can take them for a year, they will lose the weight, that they will make some lifestyle changes, they'll start weight training, they'll start eating lots of protein, they'll do all these things, and then they can come off them because they don't like the idea of taking, you know, a pharmaceutical drug for. For their whole lives. But unfortunately, it doesn't seem like that's.
- [19:23]
Mike Carruthers
The way these drugs work, and they're not inexpensive. So if you're looking at a lifetime of that drug, that's gonna cost you money.
- [19:33]
Amy Donelan
Yes, absolutely. So, I mean, in the US they are coming down a lot. They were over $1,000 a month. If you were paying out of pocket, which, as you said, is an enormous amount of money for a lot of people, they've come down. Certain pharmacies offer them for about $500 a month. But even still, I mean, think about what's going on at the moment with stubbornly high inflation and people really kind of struggling to pay their bills. Having this on top of that in perpetuity is an awful lot for people.
- [20:04]
Mike Carruthers
What's the future of this? I mean, it is what it is. These drugs are what they are, and they seem to work for a lot of people. And so is that the end of the story?
- [20:17]
Amy Donelan
No, I think we're at a phase now. There's still. I mean, it's still almost like an exclusive club of people who can take these drugs, afford to take these drugs. As I said, there were shortages for quite a long time. So, no, I think by no means is this the end of the story. If anything, I personally believe that these drugs are going to kind of explode. And I think that cost is one of the things that is really a barrier at the moment. They also are prescription drugs. In many countries, like outside of the US you need to have a BMI, so body mass index of over 30. And you also need what they call a comorbidity, which is something that, like an ailment that goes alongside obesity. So that could be type 2 diabetes, it could be heart disease. So in order to get a prescription, that's what you need. So if that changes, more people would be eligible to take these drugs. And the other thing is Ozempic, the, you know, the most well known of the drugs, the patent for like the secret sauce of that, the key ingredient in that comes off patent in 2031. So that is when the price will collapse. And I think that that is when you're going to see, you know, a huge amount of people taking them. So think about the US at the moment, over 70% of people are either overweight or obese. There is an enormous market for these drugs and I think that there will be and there will be demand when people can afford them.
- [21:39]
Mike Carruthers
And it is always in an injection, right? There's no pill.
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Amy Donelan
Both Novodortisk and Eli Lilly are working on pill versions of their drugs. But unfortunately they don't show the same weight loss benefits as the injection, which is unfortunate for some people because I think that a lot of people struggle with the idea of taking a needle. These drugs need to be refrigerated. So there's, you know, there's a hassle associated with these drugs. If you wanted to go away, let's say you were going away for a month for work, you'd have to carry four of these injections with you. Whereas I think a lot of people have kind of got their heads around taking supplements in the morning. You could just wash it down with your coffee. I think that is what people kind of want to get to. And also for the manufacturers, making a pill is much cheaper than making the injectables.
- [22:29]
Mike Carruthers
So when I think about it, there are two kinds of side effects a drug can have, the kind that you have while you're taking it, but then there can be long term effects, you know, and I'm wondering, are there any long term effects from taking this drug that persist after you stop taking it? Like, I don't know, cancer or heart disease or anything like that.
- [22:51]
Amy Donelan
So no, I think that there are some pretty terrible side effects that people have experienced. Nothing that I've seen like cancer, but there's a condition called pancreatitis where your pancreas gets inflamed. Some people who go on these drugs experience that that can be extremely painful and kind of debilitating. There's another thing called gastroparesis, which is a number of people that I spoke to for the book had experienced this and there's like a class action going on about that. So this is where your stomach essentially gets kind of paralyzed and stops working kind of altogether. So you are expelling like undigested food from your body. So it's extremely unpleasant. So I suppose when I talk to people, when I, when I asked, by the way, constantly about these drugs and whether people who are perfectly slim should be on them, I have many friends who have asked me that question. And what I say to people is, I really think you have to think about these drugs as like a prescription drug for very specific diseases. So they are for type 2 diabetes, they are for people living with obesity, and for those conditions, those people have an awful lot of side effects anyway. They have, you know, high blood sugar and, you know, they have swelling, they have pain, they're more likely to get cancers, all these types of things. So they make sense for you to take those drugs. But I think if you're in a perfectly healthy body and you just wanna lose 10 pounds or 15 pounds, I don't think these drugs make sense in any way. I think it's a huge risk to take with your body.
- [24:20]
Mike Carruthers
Well, I know there has been, there have been things in the media, pictures of celebrities and there's like this look, like you can tell they're on Ozempic because of a look they have or some thing on their face or do you know what I'm talking about?
- [24:36]
Amy Donelan
They, I mean, they call that Oz face. Is the, is the sort of what it's called on social media, which is, again, it's not, again, it's not specific to these drugs. It's just if you lose an awful lot of weight quickly, you tend to get kind of hollowed out cheeks, so a kind of gaunt look. And that people say is sort of a telltale sign of people who are taking these drugs.
- [24:59]
Mike Carruthers
These drugs have been around long enough that, you know, there's long enough time for people who have been on them for a while to still be on them like 10, 15 years later. Do people tend to stay on them for a long, long time or do people finally say, you know, that this is enough's enough?
- [25:18]
Amy Donelan
I mean, I have not met anybody who has been on them that long. Like, I've never met anybody who's been on them for 15 years. I'd say I've met people who went on the earlier versions of GLP1 drugs which weren't as effective, and maybe they've been on them for like seven or eight years. It doesn't seem, as I said, like, that statistic still baffles me that 50% of people come off these drugs.
- [25:42]
Mike Carruthers
Is the experience of taking these drugs that you sit at a table with people and you don't enjoy food or you just enjoy less food?
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Amy Donelan
I mean, it seems to be that you enjoy it less, is what I would say. I mean, I don't ever meet people who are taking these drugs that talk about how much they love food and how much, how interested they are in food. Even a small amount, like, oh, I ate a half a Snickers bar and it was amazing. They don't seem in the same way to kind of think about food in the same way. And a woman I was speaking to recently told me that she went to stay with a friend of hers who was on these drugs and both of their families were under one roof. So it's like lunchtime comes along and it was this woman's house who was taking Ozempic. And so they were all kind of looking around being like, are we having lunch? And this woman was not hungry. She hadn't even thought about food. I don't think she even recognized it was lunchtime. And this, her friend was like, wow. She had always been the person that would wake up in the morning and be like, what are we going to make today? What great food are we going to make? And she just didn't think about it like that anymore.
- [26:50]
Mike Carruthers
Well, there certainly is a lot of interest in these drugs. I mean, people talk about it all the time. You see it in the media all the time, social media. And, you know, you could very well be right that as the price comes down, there could be a real explosion in using these drugs. And, well, we'll see what happens. Amy Donilon has been my guest. She's a columnist at Reuters and author of the book off the Scales, the Inside Story of Ozempic and the Race to Cure Obesity. And there's a link to her book at Amazon in the show notes. Amy, thanks for coming on and talking about this.
- [27:24]
Amy Donelan
Thanks very much, Mike. If Bravo drama, pop culture chaos and honest takes are your love language, you'll want all about TRH podcast in your feed. Hosted by Roxanne and Chantel, this show breaks down Real Housewives, reality tv, and the moments everyone's group chat is arguing about. Roxanne's been spilling bravo tea since 2010. And yes, we've interviewed housewives, royalty like Countess Luann and Teresa Giudice, Smart recaps, insider energy, and zero fluff. Listen to all about Tear H podcasts on Apple Podcasts, Spotify or wherever you listen. New episodes weekly.
- [27:58]
Podcast Host (Sponsor Segment)
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- [28:30]
Mike Carruthers
Money makes the world go round. We use it to buy things, measure success, improve our lives, and sometimes to help other people. Whether we like it or not, money is what makes things happen. And what's really interesting is just about every culture on earth has created some form of it. People really like money. So where did money come from? Why does it work the way it does? And why do some people understand it and benefit from it while others struggle? Well, here to take us on a fascinating journey through the history of money and how it really works is David McWilliams. He's a former central bank economist based in London and host of the David McWilliams Podcast. He's an adjunct professor of economics at Trinity College in Dublin and author of the book the History of A Story of Humanity. Hey, David, welcome to something you should know.
- [29:27]
David McWilliams
Mike, delighted to be talking to you in California from Dublin. So great. Let's go for it.
- [29:32]
Mike Carruthers
So as someone who has researched the whole history of money, what is it? What is money?
- [29:39]
David McWilliams
Money is a technology, and not only a technology. It is the most magical technology that humans have ever come up with. It is what we call in economics a social technology. A social technology is technology that we use to make us collaborate, coordinate, organize better.
- [30:01]
Mike Carruthers
Do we have a pretty good idea of when people started using money, some sort of currency, to buy things?
- [30:09]
David McWilliams
Yeah, we do. We do. Around 5,000 years ago, about 3,000 years before Christ.
- [30:14]
Mike Carruthers
And where was that?
- [30:16]
David McWilliams
In Sumer, the Sumer civilization, which is now in southern Iraq. And Sumer is in essentially the very first urban civilization we have. And so what you see is that when humans first, Mike, started to become urban creatures, we begin to develop, invent, begin to use lots and lots of things that now we would understand as being the building blocks of civilization, one of which is money, one of which was organized religion, legal systems, writing, numeracy, all these things coming around the same time. So that's where you start to see money emerging. And interestingly, Mike, it wasn't really that different to what it is now.
- [31:00]
Mike Carruthers
So I remember in school sort of hearing this idea that, well, the way things used to be is if I needed you to build me a fence, I might bake you a cake and you'd build me a fence. But that.
- [31:16]
David McWilliams
Yeah, yeah, yeah, I remember that one.
- [31:17]
Mike Carruthers
But that didn't really work very well because you may not want the cake. And so somebody came up with this idea of money because that equals the playing field. And now we don't have to swap cakes for fences. We can just use this money. Is there any truth to that basic history?
- [31:38]
David McWilliams
No, no. And it's quite, it's quite funny when you've been to research, what you find is barter. I was taught the same thing. There's no archaeological evidence, there's no historical evidence, there's no anthropological evidence that any societies ever used this thing called barter. Economists have a very mangled word which is called the mutual coincidence of wants. So basically the idea was that Mike and David wouldn't trade because David didn't want a fence that day and Mike didn't want cakes. That's not what actually happened. What actually happened was that humans traded with each other and then they had a sort of like a day of reckoning. And the day of reckoning would have been the day you clear the slate, in effect. And you would say, well, Mike, David, you owe me X. I'd say, fair enough. That's okay, Mike. And then we would clear the slate and start again. Now what do we clear the slate with? Have we cleared the slate with money?
- [32:30]
Mike Carruthers
And so when the first money became money, was it well accepted? And everyone said, yeah, this is a great idea, let's run with this. Or was there resistance? Or. And what did it look like?
- [32:43]
David McWilliams
Well, that's a fascinating question because what you see is that money was adopted willingly by various civilizations. The very first one were the Sumerians. But the civilization that really got this going was a crowd called the Lydians, who were a pre Greek society living in and around what is now the west part of Turkey, about 900 years before Christ. And those guys came up with coins. And once you come up with coins, it changes the game because money goes from being in your head, money goes into your back pocket, and suddenly it goes into your back pocket. You get things like commerce, you get things like retail. And once the Lydians get going with gold coins, copper coins, you see other civilizations Gradually but willingly take this on. So the Greeks take it on, the Romans take it on, and before you know it, it is the intellectual foundation of what we would call human civilization.
- [33:42]
Mike Carruthers
You would think, though, that if you've never had money, no one really understands this concept of money, that it would be a pretty tough sell to get people to buy into it.
- [33:53]
David McWilliams
Money was so attractive because money then and now holds the same essential promise, which is that with money you can change your circumstances, you can change the position you're born into, and you can create a better life for yourself. I think that is the compelling promise of money now. And I suspect, Mike, that was exactly the same for our great, great ancestors thousands of years ago. They wanted to change their position and that's why I think it became so compelling.
- [34:26]
Mike Carruthers
It seems though that as I understand it, the reason that we all agree that a $10 bill is worth $10 is because we all agree, everybody has to agree that this has value and that's why it works. And if you don't have everyone agreeing that it has value, it tends not to work very well. So how do you get everybody to buy in and say, okay, we're now going to call this valuable and we'll use it to trade things again?
- [34:58]
David McWilliams
Fascinating. So you can never get people to do something unwillingly over time. Right? You can force people to do things for a little bit of time, but in general you can't. So the question is, what was the essential chemistry in this thing called money that not only compelled us, but that willingly propelled us to doing something which you just put your finger on, which is coming up with an entirely fictitious notion that a ten dollar bill can buy me a beer. Okay, That a beer is worth $10. Now, in order to do that, you need everybody to in some way suspend their critical faculties. In order to do that, it has to be better than what went before. So as a result of this, what you're seeing is the societies, willingly, from a bottom up perspective, began to adopt money. Now why did they do this? Was it a better organizational technology? Yes. So basically what you have is you've got. Societies can be run in two ways. Bottom up, from the ground up, are top down. Old traditional societies run top down. Boss man King tells everyone what to do. In a monetary society, there's a small modicum of social independence. So as a result of this, what you see is societies began to adopt money. And once they did, they never went back.
- [36:26]
Mike Carruthers
And in those societies that have adopted money, does it mean the same thing? Does having a lot of money mean the same thing in all of those societies? And does having little money mean the same thing?
- [36:40]
David McWilliams
This is the interesting. It is a universal language. So let's say you take like a technology billionaire in California and you take a rickshaw driver in Old Delhi and you put these two together, they don't understand each other's language, no idea, don't understand each other's religion, don't understand each other's culture, but they understand the universal language of money. Now why is this? Why has it become universal? It has become universal because it seems when you start looking at the way in which money has developed around societies, that the universality of, as you say, prestige, etc, etc has been something that humans not only accept, but because of the social value of money that they have yearned.
- [37:30]
Mike Carruthers
And yet every country, every society, every whatever has its own money. Like why, if money is so universal, why don't we have just one money?
- [37:42]
David McWilliams
Because, and this gets us into the political economy of money, because money is a weapon. So what we have evolved into is a system where money and the state and the organs of power of each country are soldered together. So for example, what gives the American dollar its global power and its unique power is that the United States government requires you to pay your taxes in dollars. And it is the very paying your taxes in dollars that gives the American dollar the heft that it has. So having won money, I mean, we are in an experiment in Europe now. We have the euro, which is between, you know, 17, 18 odd Democratic states. We've all voted to have it. We have one currency. It's been working for about 30 years. But it's an unusual moment. And you have to have political and economic alignment to have that, whereas we don't have that in the world. So you can't even have one money between Canada and America, Mexico and America, let alone the United States and Argentina, the United States and Brazil, because the essential makeup of the society is very, very different.
- [38:54]
Mike Carruthers
So it is often said that money is the root of all evil, that money makes people greedy. Are they inevitable? If you have money, does greed follow?
- [39:04]
David McWilliams
I actually don't think so. So I, I was educated by Catholic priests, so I get all that. From the very start I got that money is the root of all evil. And in the beginning I kind of said, well, it sounds okay. I actually think when you, when you look at it, the reason that money became incredibly popular was that money in the beginning and still now is an alternative to war, not an amplification of war. So there was A French sociologist, a fellow called Marshall Mouse, who said, in order to trade, man first had to throw down the spear. And by that he meant was that in the old days, if I wanted what Mike had, I'd have to do some damage to Mike to get it with money. I could say, hey, Mike, look, why don't we just trade? So suddenly, rather than fighting together, we live together using this mechanism of money to acquire what you have at a price that I want and a price that you want to sell. So I would say that this saint, I think it was St. Augustine with the money is the root of all evil. I think without money we would have a much, much more violent, volatile world, much more so.
- [40:18]
Mike Carruthers
Well, that's an interesting argument. I've never heard that.
- [40:20]
David McWilliams
But think about China and America now. You know, you guys have got this scrap over rare earths. The fight is going on through money. Think about, for example, I want something from you. Some society wants something from another society. Paying for it is a much nicer alternative than going to war over it. And that's what we have done. So the reason the seven and a half billion of us live on this planet in reasonable, I'm not saying absolute peace, but reasonable peace, given how many of us there are, is because of money.
- [41:00]
Mike Carruthers
And money is in fact the way we keep score.
- [41:04]
David McWilliams
The way we keep score, the position we have for ourselves, the hierarchy. I mean, I'm not saying this is good or bad. I'm saying it is what it is. And certain societies elevate materialism, of which money is the main arbiter. Other societies elevate wisdom, age, all these other things. But as a general rule, money allows us to keep score, and keeping score keeps us sane. This is the interesting thing, that once you take money out of a society, once you mess with money, once you screw with the value of money, you don't just create inflation, as economists say. What you do is you mess with people's heads. So money is not just about keeping score in a narrow way. It's actually about a very, very sophisticated mechanism whereby economies operate, whereby people slot, slot in where people fit in. They know their place, they understand value, they have a stake. All these ephemeral but unbelievably powerful forces.
- [42:11]
Mike Carruthers
I want to talk about the psychology of money, how we feel and deal with money. Because some people are supposedly, you know, he's good with money. Other people don't seem to handle money very well. People view money differently and value money differently. And what about all of that?
- [42:31]
David McWilliams
It's amazing because for Example, I'm looking out here in a suburb of Dublin called Dunleary and there's a railway line about 20 meters away from me. And that railway line was built in 1841. And one of the chief speculators on railway shares, that is the monetary equivalent of the railway, was Charles Darwin, the man who came up with evolution. And Charles Darwin lost his shirt speculating on railway shares here in Ireland and in the uk Isaac Newton lost his shirt speculating on something that was called the South Sea bubble in Mississippi in the 1820s. What you have is two of the most intelligent, objectively intelligent men who arguably ever lived, were brilliant at biology, brilliant in physics, dreadful with the psychology of money. Now why is that? It is because money affects us in a different part of our psyche to logic, to rationality. So for example, take a price of something, the price of a house in California. You know economists, when they see a price, they see a number of. When real people, normal people see a price, we get a feeling. And it's the feeling that is the psychology. And that's what brings us into group psychology, into all sorts of booms and bus psychologies, into explaining why we make so many mistakes, why we convince ourselves that now is this time it's different, all that sort of stuff. And the psychology, money is fascinating because it is the psychology of a social technology and therefore it's the psychology of groups, it's mass psychology. And that is totally different understanding that than narrow gauged intellectual ideas etc, which is why, you know, I remember when I was in school, you know, the cleverest boys in the class, they didn't end up the richest at all. I'm looking back, you know, decades.
- [44:34]
Mike Carruthers
Yeah, well lots of the guys who.
- [44:35]
David McWilliams
Sat in the back of our class had a laugh, got kick Daves, they're the guys who got money. He's a great leveler actually.
- [44:42]
Mike Carruthers
You hear the phrase he or she is good with money. And people like Warren Buffett and Elon Musk, who are very wealthy people, they have some sort of magic that nobody else has or a few other people have that they're able to amass these fortunes that most of us could only.
- [45:06]
David McWilliams
Dream of, but maybe they want to as well. I mean this is, these are, this is the very interesting thing, Mike. You know, I. You probably have loads of mates. I have loads of mates who have no interest in money. In fact, ironically, I've probably no, very little interest in money either. I'm interested in the concept, but I'm not really that pushed about acquiring lots of cash. And being a wealthy person, it's never really, really on the, on the overall schemes of things that are important in my life, not really. But there are other people for whom it's been number one on the financial pecking order is an absolutely existential part of their characters. And that's what I think, again, makes it fascinating. But what is fascinating is that I think money amplifies your inner self. So if you're a greedy person, money will make you more greedy. If you're a generous person and you see this all over the world, very wealthy people give their money away. It makes you more generous. So I think it animates your initial psychological disposition. I don't think it completely corrodes you.
- [46:08]
Mike Carruthers
So a very fundamental question I think a lot of people wonder about is where does money come from? Who decides how much money there is going to be and where it's going to go? And where is it.
- [46:22]
David McWilliams
How it works is that there's one great myth in the money world, and I speak as a former central banker, which is that the Federal Reserve or the central bank of whatever country you're in, controls the money. They don't. Right. Money is. In our sophisticated early 21st century capitalist economies, money is created out of thin air by commercial banks. So Mike goes into a bank tomorrow and says, I wouldn't mind buying a car. Car costs 50 grand. Let's say Mike says to the bank guy, could I have 50 grand loan? The guy says, okay, cool. Looks at your credit rating, says, okay, fair enough, right? The next day you've got 50 grand in your bank account, you buy the car. That money didn't exist yesterday, it exists today. Why? Because the bank created it. The bank doesn't ring the Federal Reserve and say, I've got this guy called Mike Ruthers. Should I give him a loan? They don't tell anybody, Right. They are essentially the alchemy of making money, the commercial banks. So the, the way to understand money is that where it comes from is it's created by commercial banks under license from the central bank with the real kinetic energy of finance comes from the banking system. And that's why things go wrong. Because, you know, the easiest way to rob a bank is to run it. Banks go by from the inside out. And that's what we've always got to be aware of.
- [47:48]
Mike Carruthers
Well, we've talked about money many times on this podcast, but never like this. This is a very different view of money and how it works and where it comes from. David McWilliams has been my guest he's a former central bank economist based in Dublin, and he is author of the book the History of A Story of Humanity, and there's a link to his book at Amazon in the show Notes and David, thank you so much for talking about this. In cold weather, it really helps to have a few tricks for keeping warm, so here are a few Layer your bed blankets correctly. You should use multiple blankets to help trap heat, so start with your sheets and then put your fluffiest comforter on top of that and then layer thin, dense blankets on top of that. Also, if you keep your bed pushed up against an external wall of your home, pull it out a few inches. On chilly days, eating fat helps because fat digests slowly. When your body starts to digest, you feel warm because your body has to provide energy to digest the food product. Fat is notorious for moving slowly through the digestive system. Remember the good old days. One study found that nostalgia warms your heart. Participants who recalled a nostalgic event as opposed to just an ordinary event, they had a greater tolerance for intense cold and Sip something warm. Hot drinks and soups will make you feel warmer, if only for a little while. Hot fluids don't actually raise your internal temperature, but they give you the impression that you're heating up. Your mouth is among the most sensitive parts of your body, and the hot liquid in that sensitive area gives you the feeling that you're warmer. And that is something you should know. Our podcast is produced by Jennifer Brennan and Jeff Havison. The executive producer is Ken Williams and I'm Micah Ruthers. Thanks for listening today to something you should know. When they were young, the five members of an elite commando group nicknamed the Stone Wolves raged against the oppressive rule of the Kraderok Empire, which occupies and dominates most of the galaxy's inhabited planets. The Wolves fought for freedom, but they failed, leaving countless corpses in their wake. Defeated and disillusioned, they hung up their guns and went their separate ways, all hoping to find some small bit of peace amidst a universe thick with violence and oppression. Four decades after their heyday, they each tried to stay alive and eke out a living. But a friend from the past won't let them move on, and neither will their bitterest enemy. The Stone wolves is season 11 of the Galactic Football League science fiction series by author Scott Sigler. Enjoy it as a standalone story or listen to the entire GFL series, beginning with season one, the Rookie Search for Scott Sigler S I G L E R Wherever you get your podcasts.