← The Peter McCormack Show
The Peter McCormack Show
#152 - Balaji Srinivasan - The Mathematics of Collapse: Why The West Is Going To Zero
02:31:29
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- [00:00]
A
Western civilization's over, America's over. Western Europe as we know it is over. But the Internet is just beginning. If tax revenue is a few trillion a year, but compounding Debt is at 175 trillion a year, obviously it's unsustainable, it's going to go to zero.
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B
But it's taking the L then admitting this and allowing the separation to happen.
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A
Taking the L is admitting that you can't throw good money after bad. You can't also throw your spiritual energy behind a lost cause. Instead, when you write it off and write it to zero, the west is going to zero. America is going to zero as we know it, right? Then you say, what can we rebuild? Much more important than allocation is location. Choose your location. Just like the Pole came to the uk. Maybe the Brit goes to Poland or to Dubai, which a lot have done. One of the best things you can do is liquidate, emigrate, accelerate and reduce your cost structure. AI isn't taking your job. AI is turning you into the CEO.
- [00:57]
B
This show is brought to you by my lead sponsor, Aaron the AI Cloud for the Next Big Thing. Aaron builds and operates next generation data centers and delivers cutting edge GPU infrastructure, all powered by renewable energy. Now, if you need access to scalable GPU clusters or are simply curious about who is powering the future of AI, check out iren.com to learn more, which is I R E N Balaji, good to see you. How are you?
- [01:24]
A
Good. Good to see you too, Peter.
- [01:26]
B
These are very interesting times. I'm trying to understand at once this collapse in trust which has been accelerated with everything that we're seeing around Epstein, the rise of AI which feels like it's accelerating right now, and the potential bankruptcy or insolvency of the state. I messaged you the other day and you said there's a potential for Silicon Valley to go to zero. What's your mental model for the world over the next 10 years?
- [01:58]
A
Well, it's hard to model out 10 years because a lot of things happen. I mean, the Earth will go around the sun and the moon will go around the Earth. I know that sounds trivial, but you can plan things like space, like space launches or rocket launches and satellites and stuff on that basis. But many aspects of human behavior I think are going to change. Just on the points you just mentioned. Why do I say it's possible that Silicon Valley goes to zero? So there's an important graph. I will actually, I will share it with you. Zero Hedge tweeted it and sort of shows the cash flow of Free cash flow of the Magnificent Seven. And because they're spending so much on these AI data centers like these, which are some of the most profitable businesses in existence, you see a huge hit visible in their cash flow because they feel that AI is so existential and it's so expensive and billions and billions and billions of dollars are going into it. It's this gigantic, gigantic spend. And the thing about that is, obviously AI is really important, but the weird thing is that this multi trillion dollar, it's clearly an invention on the scale of a multi trillion dollar innovation. Because it disrupted Google search, right? Disrupted search, disrupted summarization, disrupts email, disrupts CRM, it disrupts image making, video, movies. It really is a big deal, right? It's a genuinely, genuinely big deal. It shrubs robot guidance, blah, blah, blah, blah, all kinds of endless industries. And yet it may actually end up being part of what disrupts Silicon Valley itself. And the reason is there's several things that are aiming for Silicon Valley the place. There's the anti tech backlash with like many Democrats, they've been disrupted by the Internet. Like we talked about in the last podcast, the Internet disrupted blue America. It took away their control over media and money. So speech, you know, went to social media, media went to AI and money went to crypto, right? So they fought really hard and in 2024, 2025, Democrats lost control of speech, media and money, right? They, with social media, with AI, video, with cryptocurrency, their strongholds of being destroyed, they lost not just control, but also control of their jobs, their livelihoods and so on and so forth. And they're really mad, really mad, incandescently mad. I can't express how angry they are in words at the tech guys that they feel did this to them, who also, by the way, took control of their beloved government, right? Which gives them all kinds of jobs and so on and so forth, right? And so if you look at blue sky, you look at threads, these are people who, you know what it is, they're Blue maga. You know why?
- [04:39]
B
Yep, I do know why.
- [04:40]
A
Yeah, it's like you see them on the street and these protests and it's actually all older Democrats now. The proxies have gone away. You know, the proxy of BLM and all these other things, you know, the various proxy war movements that they had, domestic proxy war, all gone away. And it's all just essentially older white boomers, right? Blue, blue American Democrats. And they're so mad, so mad. Unbelievably bad. They're NGOs their universities budgets are getting cut. Their media jobs are facing competition from AI basically with a few exceptions like NYT still has its subscriber numbers up, but they've lost a lot of cultural power really, I'd say irreversibly so. These guys essentially blame the Internet for all that. On the other side, the Red Americans blame China. And the red Americans haven't fully accepted defeat yet, but they have also been defeated. Just like Blue America lost their control over speech, media and money, Red America has lost the trade war, the proxy war and the Cold War to China. Why? They lost the trade war because China won on rare earths, among many other things like China's. You can't fight your factory, right? China, the US military is made in China. You go and look at the Tomahawk, the jdam and the parts are made in Chinese factories. The proxy war, you know, basically Russia is likely to win the proxy war in Ukraine. It certainly hasn't lost. And so China really, who's the winner of the Ukraine war? China. And then everybody who stayed out of it to. Right. Who's the losers of the Ukraine war? Obviously Ukraine and America and Europe, but actually also Russia because Russia became a Chinese colony, right? Like Russia's price, because Russia essentially went in with, you know, like this insane kind of thing. They thought they were just going to win in a few days like they did the Crimea 2014. And they went in and without Chinese support, they'd be toast. But the Chinese charge a pretty penny for that support. And so power of Siberia goes to China. And China also sells drones to the Ukrainians, which just to make the Russians happy. So China basically plays both sides and China comes out the winner, right? So China won the Ukraine war or like it's, it's. Maybe there's something that's going to change things. You know, history is uncertain, but at least it doesn't look like NATO is going to pull out a win. And the US is talking about winding down support in Europe. And finally China won the Cold War because the national security strategy that came out in November 2025 is something where it talks like Hegseth talked about everlasting peace with China and the US is pulling out of basically Asia and they're doing so in such a way they're like, we want Japan, we want other countries to pay for their defense and actually do actions. We can't shoulder everything and so and so forth. So it comes across in a seemingly hard nosed way. But think about how different that is from John F. Kennedy's pay any price and bear any burden to defeat communism. Right. Instead, the national security strategy literally says American elites overestimated America's ability. Not simply willingness, but ability. And they use that word ability to fund a giant welfare state and all these wars and so on and so forth, right? So that means to summarize, Democrats lost to the Internet, Republicans lost to China. And so the future is China versus the Internet. So if you take the Ray Dalio thesis, for example, which says the US empire is going to zero and China is a successor, you take the sovereign digital thesis, which says the west is going to zero because of debt and so on, and the Internet is the successor, and you superimpose those two and you say they're both right, Then you get the future is China versus the Internet, AI versus zk, right? Total surveillance versus total encryption, the total state versus the sovereign individual, and so on and so forth. Now, a new factor in this that I've sort of realized more and I kind of knew about it, but it's interesting to see everything happening and fast forward is it's possible that Silicon Valley also goes to zero in this process. And I mean Silicon Valley is a physical place. So historically, if you talk about the Internet, you would think of that as being the same as Silicon Valley. But actually the Internet is gradually, gradually decentralized. There's now 420 cities that have at least one unicorn, right? So it's 419 of them that are not San Francisco, or 418 that are not San Francisco and San Jose. Right? So that means you don't need to build a billion dollar company in the Bay Area or even in America anymore. You can just do it from the Internet. Cryptocurrency is decentralized. Most crypto holders are global. Certainly most social media users are not in America. You know, you have apps like TikTok that are globally competitive, that are not in America. AI is also decentralized, where most of the downloads of open source models are Chinese models. And the big thing, I think that's the last step, right? Physical AI has already decentralized. Did you see the Chinese harvest festival, the 2026, right? Yeah. Their robots work, right? Why do they work? Their speed of iteration is faster. Why is their speed of integration faster? Among other things, they have every single producer of screws and actuators and whatever within a, you know, one mile radius, right. They have the same density of physical talent and manufacturing plants that America's the digital stuff. Can America do that? No. Why can't it or not? Easily. Why well, first of all, like a supply chain doesn't just mean you can't like order it off Amazon. A supply chain means you've had thousands of companies go through years, sometimes decades of natural selection. The strongest survive and then the other ones go bust. And then those strongest are like really good at making hair dryers or you know, rotors or something like that. And then they just supply them to the entire world at China scale. And they have enormous, like every, you know, for example, just like the US has Detroit for cars and it has Hollywood for movies and so on and so forth. China has like small cities that specialize in hair dryers, washing machines, right? Every possible variant of that you will find within a few miles radius. And so if you don't normally give that much thought to household objects, but you know, the heating coil in a hair dryer, the fan, like does it look like, you know, is it a home hair dryer, is it a commercial one? Is blah, blah, blah, like there's all these different variations of it, just like there are for a camera, right? And so all that stuff, all the expertise and all this stuff is in China and non, obviously someone made the point the other day that Japan makes toilets, but guess what, the ceramic from that, the same guys who do that, that's actually also used in semiconductors and so on and so forth, the manufacturing of semiconductors. So it's not obvious. Sometimes something that seems really trivial can become very important. We know this in the digital context, why Video games led to GPUs, led to AI. Social media led to training data led to AI. Right? So it might seem, oh, we've got some hair dryers or whatever, what does that matter, you know? Well, maybe hair dryers lead to rotors and rotors help you lead to drones and drones let you lead to, you know, large drones, military drones and so on and so forth. I don't know, I'm just giving an example, I'm making that particular one up. But you get the concept, right? The mechanical engineering, the civil, not the civil engineering, but the mechanical engineering, the chemical engineering, all the stuff to make these physical objects work is it high density in China? So now they've put it together in arguably the most complicated kind of device ever made, a humanoid robot, Right. Why is it more complicated? Because, you know, a car, like obviously a car is hard to make, but it's nowhere near the level of flexibility and configuration and so on. If you do the math for like a hand, right. Or a gripper or something like that. So you know, more than 15 years ago I built a clinical genomics lab with a six so called six degree of freedom robot arm. Right. So that's like X, Y and Z and also theta, phi and psi, like the angle of the arm, right. So it moves to location and orients itself and whatnot. And it has other things like is the, is the hand open and closed and so on. This kind of arm can actually do a lot. It's almost like tweezers on a. I know how to put it. It's like, it kind of looks like almost like an alligator like this, right. And it goes and it grabs something and it moves it there and whatnot. Right. I can show a video. Those kinds of arms can do a lot. But actually it's quite non obvious to program their exact path. Like how it goes from here and it moves to here. This is something which is called inverse kinematics. Like you've got a hand that's here and you want to move it to here, right? We know, imagine there's a bunch of obstacles over here. We just do that in hardware. Like our brains know how to do that. It's actually a hard thing to program that. Right. That's like one of many hard problems in robotics now. You have to do that when the environment is changing and you know, that's what athletics is. To be very athletic is to be able to do that. So anyway, the point is why does Silicon Valley potentially go to zero? They have so crypto is decentralized and going global. The unicorns and how to make software companies decentralized gone global. The talent has been stopped from coming to America by The bans on H1BS and research visas and so on. And I understand why Americans are doing that, but it just does mean that like all these high IQ people that used to come to America for free are no longer coming there anymore. They're going to other places, going to Dubai, going to Singapore, staying in their own countries, building them up or just building on the Internet. You have the wealth taxes. That's a huge one. That's really maybe the most obvious that's driven. Do you know about this?
- [14:03]
B
Yeah. What a stupid idea.
- [14:06]
A
Well, is it stupid? Is it is stupid. So there's, there's a sense, I'll give the V1, the V2 and the V3. So these wealth taxes, basically it's like if you have. It's the billionaire tax, right? They actually proposed something like this years ago in 2020 where it was targeting the 30,000 high net worth people in California. They reduced the Number of people it was targeting to just 200 billionaires to remove the political base, to oppose it and to make it sound less sympathetic. Right. 30,000 people could probably organize 200 people. It's harder. And they made it a much higher tax on a much smaller number of people. Okay, that's, you know, that was a big change from 2020. They got, the Democrats got smarter about it. And this billionaire tax basically says if you are a billionaire in the sense of a billion dollars in net worth in some stock at some, some definition, then you have to fork over. And it's supposed to be one time, of course it's never going to be one time. A 5% tax tax on your assets as of I believe December 31, 2026. But it goes up 10x if you have 10x voting control. So it could be like 50% of your assets. Now this meant that Zuck page, Brin Thiel and Elon Elon a while ago have all left California. Bezos has actually left Washington state. Guess what? That's the founder of Facebook, the founders of Google, the founder of X, the founder of Amazon. Right. And of course founder of Apple is dead. Right. Which is Steve Jobs. Right. So who's left? Actually only Nvidia, right. Is still in California. I don't think Jensen Huang can move. He's also liquid due to Nvidia stock. He has, he has different circumstances than the others. That means Facebook, Amazon, Google, Tesla right out of the state. Right. Apple CEO is not a founder, doesn't have as much stock. Maybe he can't move Nvidia, they're still there. And maybe there's someone I'm forgetting, but basically that's, that's a lot right there. Right. And the thing is that means that the most, I mean these are people who literally founded Google and Facebook and Tesla and Amazon. Some of the most resourceful, well resourced people in the world. Right. Genuinely can run through brick walls and build multi continental supply chains and solve unsolved problems in computer science, you know, and they couldn't solve California. Okay, that's a really important point. It's like when Elon, you know, in May 2025, he replied to someone on X, he said, did my best. Right. You know there's a saying, saying it's like a poem, Casey at the Bat. You know this poem. Nope, it's this famous American poem. So depressing. But it's like basically it's from the 1900s. I mean 20th century America. And so baseball was actually a big part of America's Pastime and so on. And it talks about how there's this guy, mighty Casey at the bat and you know, the whole team was down and they all relied on Casey to pull them out. And then Casey struck out, right? And even Casey couldn't pull it out at the end, right? And I think, you know, like after the 2024 election, I had been down to 0.1% or something like that probability that America could pull it out. But Elon could land, he could land a rocket on a drone ship. He could literally like the chopsticks cash they did before the election, right? Genuinely, Elon is n of 1 and broke. Just to talk about that for a second, and I'll come back up. There's many rules that we have as venture capitalists, investors, CEOs, founders and so on. Some of those rules include focus, right? Focus on just one thing. Number two, actually have as boring a personal life as you can, right? Why? If you have all kinds of things going on in your personal life, then that's also something that takes away from your focus, right? Number three, hardware is hard and so on and so forth. These kinds of things we have as different rules. And by the way, really, really ridiculously smart and talented people who can just do quantum mechanics for breakfast and have incredible self discipline and drive still fail after following these kinds of rules. Okay? Like, you know how hard it is. You built a company yourself. You know how hard it is, right?
- [18:29]
B
It's hard.
- [18:30]
A
It's hard, right? And Elon shatters all of those rules. Elon does whatever, you know, he's such an amazing recruiter and motivator, but he's also highly technical. He's in the details that he could do SpaceX and Tesla and Neuralink and Boring Company and Xai and Grokipedia and, and in and things I'm probably forgetting, right? Oh yeah, by the way, running the entire political campaign, tweeting more than you or I do, right? Like it's genuinely insane. He's n of 1 while having, as I put it, n children by k women. Which is funny, you know, Elon, please don't get mad. It's funny. I think it's funny. Like that is like again, many, many men. Look at how much of a bite like Bezos's divorce or Gates's divorce took out of them, right? Elon is just a machine. I just don't even know how he possibly does it. It's like more. He's more productive, more creative, despite having an incredibly non trivial personal life. Let me put it like that, Right? So anyway, Elon was our absolute best, best, best, best guy. Right. His tolerance for parallel processing is. He is to us. He's like, you know, like Jensen Huang is like, Elon is the only guy who could do this. Right. Larry Page thinks Elon is the best. Elon is the best of the best buy, the best of the best. Everybody knows he's just the absolute best. And Elon said, did my best. Okay? He could not solve the US government just like the founder of Google and the founder of Meta and the founder of Amazon couldn't solve the governments of California and Washington. I can actually tell you why and let me get back to why. I don't. You can argue it's stupid. I think it's actually evil. But let me explain why. First, what is the policy we're talking about? What is the wealth tax? As I mentioned, it's 5% on billionaires just mark to market on their assets. 50% if they've got 10x voting rights. There's more to it. There's this article by the Tax foundation that goes on all the other bad details around it. But this would essentially be something where Larry Page or Brin or Zuckerberg would. It's targeted at them like it's meant to essentially take majority control of their stock, like to take away their force and liquid 50%. This, by the way, would tank. Like if the CEO and founder has to liquidate 50% of his stock. That's a lot. That tanks the market. That brings the price down. Right. It's not simply that it's sold and you get cash and there's no effect. It's like a hit of confidence. And so it's a hit of control. And so if you look at it simply as a revenue raising measure, that would actually be off base. This was something that was written by Democrats that hated, quote, oligarchs as a weapon against those oligarchs, quote, unquote, really against the founders. Okay? And the. So it's revenge. It's. Yeah, it's revenge. That's right, it's revenge. And it's also because, remember, the Internet disrupted blue America. Right? So the entire thing that the Internet did is. And by the way, I predicted this 13 years ago, I could tell the Internet was getting too big for its britches, that with what we were doing with tech, we were disrupting Hollywood, disrupting music, disrupting media, like disrupting money. We were going after every single institution of America, especially blue America, and reinventing it. I would argue mostly for the better but we can get to that part. It's better for the long run. But it didn't matter. You're upturning so many Apple carts at once. And guess what all the tech guys are? What? They're immigrants. Either from Asia or India or Iran or Eastern Europe or something like that. Russia. Or actually immigrants from within the US like from Kansas and Ohio, all coming to the Bay Area. And that meant they had no roots in the Bay Area. Right. Even the, like the, the Americans there, American born people there, even the white Americans there were often not from the Bay Area. They're just there to work, they're just there to grind, okay? And these jobs are very demanding. So you essentially have people who have no roots in the area who are just typing on their keys, who, by the way, they're not making their income really from the area either. You are seeing credit card swipes around the world that go into know the servers and that's what brings the revenue in. It's like you're, you know, you're getting a credit card swipe in Britain and you know, Bangalore and Brazil and that is what is funding your company in Palo Alto or San Francisco. It's not like you're making money from Palo Alto or San Francisco. Right. So you're making money remote from the cloud. So your expenses are global, or rather your revenue is global, but your spending is local. Right. And because your revenue is global, the tech guys really didn't build any political muscles. It's not like they had to build those muscles in order to. It's not like they own, okay, some guys do actually now own the Golden State warriors. But it's not like they're making money from selling sourdough pretzels or running cable cars or, you know, doing all the classical San Francisco, California type stuff. It's not like they've got, you know, a billion dollar company that does surfing, you know, or any of that stuff that the revenue is not connected to the land. No way of putting it is. There's no silicon in the hills of Silicon Valley, right? So you have. Okay, it's completely not something where we're reminding it out of the ground. Okay. So as distinct, by the way, from many other kinds of societies where coal was a thing in Appalachia, like there were geographical features that tethered those companies to the land. They had to be there, right? Fracking, you needed the shale oil in the Dakotas. There's a geological feature of the land where it was a one of one deal, non negotiable. Point being, there's no silicon in the hills of Silicon Valley. The revenue comes from the cloud. The tech guys are themselves immigrants. They're both internal and external immigrants. They're focused on code. They're working 16 hours a day. They have no local political connections. I knew that they were going to be defeated politically, obviously. Right. Like all of this stuff that we're doing now in tech, it's actually amazing how much it's been able to improvise. But it is something which is late breaking kind. I shouldn't say too little too late because I think we're actually going to figure out something in the medium run. But it's not going to look like reforming California. It's going to look like losing California. And why we don't need California. That's the thing. The California Democrat needs California. Why they need California. And this is a real key sentence. The state is their startup. The state is their startup. What does that mean? This encompasses a lot. Okay. The, the California Democrat, the American Democrat, essentially, you know, the $100 billion California train to nowhere.
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B
Yes.
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A
Okay. The point of that was not to actually build a train, it was to employ Democrat unions. Okay. That's if you look at the Twitter feed for the California train, the high speed rail train, it talks about jobs, jobs, jobs. And it's jobs in the sense of like communism, why they pay them to do nothing. Okay. It is a. Once you see it that way, Democrats gain control of the state to route money to interest groups that vote for Democrats to gain control of the state. That is everything. That is the $100 billion California train to nowhere. That is the billion dollars a year homeless industrial complex in San Francisco alone. So the money goes to these NGOs. The NGOs hand out the syringes. More people get addicted to drugs, then there's more vote to solve the homeless problem, which in turn results in more budget for them. Right. They don't intend to do well and it was just a mistake. They intend for their budget to go up. If their budget went down, that they would actually pay attention to. But everything else, they've convinced themselves they're helping the homeless, blah, blah, but it's a fee. The pigeon society, right? They're just increasing the number of pigeons and farming it. Okay. Another example, Podesta, this is national, not California, but $370 billion for like climate graft. Okay. And by the way, like, it's not like solar isn't real. You know who's done it? China. China actually put the billions of dollars into Actually making solar work, actually making nuclear work, actually making electric. I mean, so Elon did EVs and solar as well. So Elon is not. Elon is real and China is real. That's actually real clean tech. And I think there is something to it. Who wants pollution, right? Renewable energy is good. It has to be done in the right way, where you have to supplement with something like nuclear or something that can provide energy even when there isn't sun or wind. But the point being that the $370 billion for climate that Podesta had was all just Democrat graft, right? Same for blm. Right? Same for just about every ngo, every cause, every Democrat cause that you can think of. The part you're not seeing as much is that when they win their vote, there's the appropriations that go to sometimes academia in the form of grants, often NGOs in the form of grants, often new government agencies. And who gets the jobs there? Career Democrats. More regulatory powers mean more jobs for them, and so on and so forth. Right? The state is their startup. Okay. And what that means is philanthropists, quote unquote, like Soros, actually have their own way of going public, right? Like how does a VC go public? The venture capitalist finds an entrepreneur who starts a company and that company goes public and gains money from the public. And then it's a public company, it's publicly traded. The quote philanthropist, like Soros finds some ngo, puts in some money, and then that NGO figures out a way when there's some giant blm, everyone's losing their mind to write a law or write themselves into a block grant or into some flow of funds. So they start getting a stream of money from the taxpayer, either indefinitely or for a long period of time. That is their version of, quote, going public, going on the public teat. Once you see that, you realize the left wing philanthropist is not actually giving away their money. They are compounding in another way. They put in 1 million into an NGO and eventually it can get into this stream of funds. And now they've got a pocket of 5 million bucks a year, or whatever it is to play with.
- [28:43]
B
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- [29:36]
A
do you see what I'm saying?
- [29:36]
B
Yeah, but this is unsustainable.
- [29:39]
A
Of course it's going to destroy the whole system. Nevertheless, once you realize it's like a cancer that hijacks the resources to perpetuate itself and grow malignantly, it's like the most, I mean, the cancer is really motivated to get those resources. The state is their startup, right? The same energy that those tech guys are putting into figuring out every line of code, these Democrats are putting into figuring out every line of law and every workaround and they've got all the connections in the government and they all plot on how to. This is also, by the way, you know, zuckdidinternet.org, tech guys, we generally believe that increasing Internet connectivity is good. So it's smartphones, it's cheap smartphones for the developing world, it's satellite Internet, it's all this kind of stuff, right? Why do we believe that? Well, we actually do believe in it, but it also happens to be good for technology. As you go from 10 million to 100 million to a billion to 8 billion people globally on the Internet, that's more users, that's just good. That grows the network, that grows the base for everything we're doing, right? Learn to code, we want to do that. The equivalent for the Democrat is and someone came up with this great phrase, their net long taxation. That is to say, even if they're taxed at an individual level, a big tax on billionaires gives them more money to work with in their NGOs or what have you, or they think it does. And so therefore they're willing to take the $5,000 a year hit to their personal taxes or what have you, since they're often middle class or whatever to get the $5 million for their NGO and then they top themselves up or whatever on the personal or they don't even care, right? Because they've got more money to play with. Right. So net long taxation, the state is their startup. They want everything to be taxed until you get to really communism, right? Just like we want 100% of people to be on the Internet, they want essentially 100% government control of the economy. Okay? Now there's different ways of getting there. There's communism, Soviet communism, which is the obvious way. Lenin and his guys come with a gun and to go and seize 10% of the farms. They go house by house, they kick in the door, they rape the mother, they kill the father, they take the son to a gulag and then they, they take over the farm. That's what happened. That's what communism was. The euphemism is collectivization. Right? Now with AI video, we can finally make movies on this kind of thing, okay? Actually make movies of what it was. I start putting up some prizes for this, by the way. I want to start doing this. But like every kind of famous episode in communist history, you could actually dramatize it, make videos of it, show what actually happened, how horrific it was, right? Which is not being shown. And to be clear, of course, it's good that we have movies that show the horrors of Nazism in the right. Like it can go overboard, but we need to also balance that by showing what the far left did, because it was much more murderous than the far right. It has much better camouflage. The far right, you can see it coming, the far left, like it's completely different thing. It's actually because it believes itself to be good, it's actually much more evil. Anyway, so point being that the way that the Soviet Communists stole 10%, or let's say, of the farms, they actually would have to go house to house with guys with guns, kick in the door and do it, right? That's how communists did it. Keynesians do it by hitting a button and printing 10% of the money supply silent, right? Evolved camouflage in the same way that a mosquito evolves camouflage, it drains your blood without having to attack you like a cougar, right? A snake has evolved camouflage, right? So the Keynesian has evolved camouflage to steal all this money without people seeing it. And so that is a sense in which the American Democrat, as a Keynesian, has basically stolen enormous amounts of money from the population via inflation and taxation and other things. And this is now a huge percentage, maybe the majority of Americans are directly or indirectly on the government teat, right? For example, 40 million are on snap alone, okay? Which is like a kind of welfare program. You had welfare, you had Medicare, you had Medicaid. Social Security, disability, SNAP. You add NGOs, you add universities, the media. Hollywood and the New York Times are arguably upstream rather than downstream of the state, but they're still heavily involved with the state. Like, the Pentagon would work with Hollywood on shoots, and the New York Times would get leaks from the government and so on, and print those leaks and make money on that. But all of that, that entire thing, they need the government, they need to get control in order to. Like, that's their profession, right? The state is their startup. So it's win or die for them. Okay, this is what tech guys don't fully understand. Right? We understand. See, tech guys are basically pretty love and let live. They're basically pretty chill. You know, like, you do your thing, I do mine. But there is one area where they do play to win. You know what that is?
- [34:21]
B
Shoot.
- [34:21]
A
It's our startups. Yeah, startups. You play for world domination. Billion users, right? Bankrupt, the competition. You know, like the. You know, the Drago thing. If he dies, he dies, right? Like, you know what I'm talking about? Like the Rocky four. Yeah, if he dies, he dies. Look, that's like. It's like ufc, you know, you get in the ring with someone who's a CEO, founder, ambitious founder of a tech company, they are playing to win. And you know what? They might acquire your company if they win. Right? But, like, they're making a better product at a lower price. They're going to ship it faster, ship it cheaper. This is the same with the Chinese. Do it. By the way, everybody whines about Chinese overproduction, right? Chinese overproduction means they're making tons of stuff at low cost that lots of people are buying. And it's like. It's like complaining about American overproduction during, like, World War II or something like that. Like, that's what having an industrial machine is. Right? Go ahead.
- [35:12]
B
Well, this is all like, I get it, but this is all completely unsustainable. It is. And so then my question for you is, how does it end?
- [35:23]
A
Where does it go? To a new steam estate?
- [35:25]
B
Well, there's two questions. Can America recover? Can it save itself? And when I say America, I'm asking can the West? Because we have the same problems here in the UK and in Europe. If so, how? And if it can't, then how does it end? Do we just become third world countries?
- [35:42]
A
Okay, great question. So let me give the. My view. Of course, just my view. My view is Western civilization's over, America's over. Western Europe as we know it is over. But the Internet is just beginning. And the Internet is the rebirth that will be able to happen within the lifetimes of many of those now living. But it will take years, if not decades, to fully rebuild on what I call Internet first principles. Okay? And the analogy I'd say is, I'd say the Internet is to Western civilization as Western civilization is to Christendom, or the Internet is to America as America was to Britain. Or you could say Internet, America, Britain, Rome, Greece, if you go back far enough in time. Okay, let me just kind of give. Explain those analogies. So the first Europe used to refer to itself as Christendom, right. That delineated not just a geographical thing, but an ideological thing. God was at the center of the whole thing.
- [36:40]
B
Right.
- [36:40]
A
And it was something where, like that was Christendom as distinct from Islam or as distinct from, you know, East Asia, like the Orient. And so Christendom is how Europeans self conceptualize themselves. With the Enlightenment, with the rise of science, you moved gradually from God to the state as a primary organizing principle, Right. Where you had, you know, the French Revolution, you had the American Revolution. All of those are fundamentally secular revolutions, right? We take that for granted. The American Revolution, the French Revolution, the like, what Bismarck did in Germany, like the Russian Revolution. Those were secular revolutions about law, not religion, right? They were not really. Fundamentally, the Thirty Years War was arguably the last big religious war, Protestant versus Catholic. And then all of these were wars of different modes of organizing government, right. So God moved away from the center and the state started to move towards the center. Nietzsche talked about this in the late 1800s, where he said, God is dead. And what he observed was that basically educated people didn't believe in God. So what moved into place, rather than God punishing you with a lightning bolt, it was the policeman coming after you. The state would punish you and throw you in jail. Right? And that was the rise of the total state in the 20th century. Democracy and Soviet communism and Nazism and so on. Okay? So Western civilization, as you move from Christendom to Western civilization, it was a geographical shift, so America started to be included. But it was also a ideological shift where you move from Christendom and God to the west, which is, we say, what is Western civilization? It's like various sorts of liberal Enlightenment values like individual free inquiry and individual rights and free speech, all these kinds of things, Right. And people will have a different list of them. But really it's about the rights of the individual as opposed to the collective, let's say. Right. Which distinguishes the west from much of Eurasia. Right. Okay. And it was also a technological shift as you go from Christendom to the West. You go from battle axes and swords in medieval Europe and maybe wooden ships to guns and a much more modern civilizational stack. Right. So it was a geographical shift, it was an ideological shift, it was a technological shift from Christendom to the west that is similar to the shift from the west to the Internet. Right. But there's a continuity, of course. The west owes a debt to Christianity and Christendom. Right. Similarly, the Internet owes a debt to the west and indirectly to Christianity and Christendom. Like the plus symbol, Right. Goes all the way back to the cross in some ways. Right. But it's also a shift. Right. In the same way, what's the shift? So the shift is geographical. You go from America and Western Europe to what? Decentralized. So Bitcoin is. It's decentralized, Right. So we go globally, population wise. You go from just Europeans. America had Europeans majority, but many others. The Internet is really all Anglophones, I would say. Right? Of course there's a Chinese Internet, a Russian Internet, but at least as I'm defining it, and you can, you can argue this, but let's say the English speaking Internet is really what I'm talking about when I talk about the Internet, okay? And meaning, you know, all the AIs will translate it to English. Even the parts of the Chinese Internet that could translate to English are what I'm calling the Internet here. Right? The Anglophone Internet, let's call it that. And that has open source, right? That is peer to peer, that has encryption, that has decentralization, that has anybody can start a company. You can see a continuity between that and Western civilization. Just like you can see the egalitarianism of Western civilization is a continuity between that and Christendom. Right? So there's a geographical shift. There's an ideological shift as well. So from God to state to the network as the organizing principle, Christendom was defined by God and belief in God. Western civilization is what can the state do? What can it not do? Like the 10amendments or the French Revolution is all about what the state does and doesn't do. And now we get to the third phase, which is the network. What the network does and doesn't do, you shift the central force, the most powerful force in the world. Is it Almighty God, Is it the military and the police, the US military and the police, or is it encryption? So you shift geographically from Europe to the west to decentralized, you shift ideologically From God to state to the network. You shift demographically from Europeans to Europeans and Americans to basically all, let's say, English speakers on the English Internet. And of course, you shift technologically. You go from horses and guns and wooden ships to railroads and cars and so on and so forth. And guns, right? Horses and swords and wooden ships. That's a Christian, no. To, you know, assembly lines and cars and so on, so forth. And now the information revolution is as big as industrial revolution. Why? It's all drones, robots, right? Like, manned combat is over. Like, I mean, we're still in a transitional era, but like, as China scales up, the Chinese drone armada will obviously clean the clock of any still human military. That's just obvious, right? Like, they can just crank them out. I talked about this in the network state book in 2022, even before these robot things, because I could see where robotics was going, right? Just in the same way that when people first invented muskets, they thought they were cowardly because you're shooting from a distance rather than fighting with a sword like a man. But of course, now we think of the US Marine as brawny and brave and whatnot. But a good chunk of what the Marine does is being offloaded to the machinery. They pull the trigger, it's not a punch, but it's a bullet. They hit a button, it's not a punch, but a bomb that rains down, right? Like, so much of it is about high tech and the human is pulling the trigger. But why would you want the human to pull a trigger? You want to be sitting and sipping, you know, a latte or whatever, and hit a button and you just do it Starcraft style, right? You do it like a video game. Every kid has been trained on war, video games, right? So decades of video game war has trained people for robot war, right? So Western civilization, it doesn't continue, but Internet civilization does, because it's superior at war, right? It also takes over. It goes from like gold to paper money to digital gold, right? You can have a table like this as you go from Christendom to the west to the Internet, right? So now the bad thing about this is like another way of putting it is when I say Western civilization is going to zero, I actually, you know, people often take that as, oh, my God, why do you hate America so much? Why do you hate the west so much? Not at all. It's like saying, Christendom doesn't exist anymore. That's an observation. That is not like, oh, I'm against that, or there's a lot of great things Christians did. I appreciate lots of, you know, I appreciate cathedrals, I appreciate egalitarianism, you know, as, like, as someone from a Hindu background. I try to see the best in every culture that like any culture that made it to the modern day often has something going for them.
- [43:44]
B
You just be realistic.
- [43:46]
A
Go ahead.
- [43:47]
B
You're just being realistic. This is.
- [43:48]
A
I'm just being realistic. That's right.
- [43:51]
B
But you saying there is nothing that can save the West. There's no border case.
- [43:56]
A
No. Yes, exactly. I don't think there is. And the reason is. Well, the thing is, what do people mean by the West? It's like saying, what can save the Soviet Union?
- [44:05]
B
Okay, what can save America?
- [44:08]
A
America doesn't exist. Like, what I mean by that is like, it's like saying, what can save Korea? Korea doesn't exist. There's North Korea and South Korea, you know, and those are different Koreas. So America doesn't exist. There's blue America and red America and tech America. It's the disunited tribes of North America, not the United States of America, by the way. That's not. That might seem like a fun, or fun whatever that might seem like a wordplay or what have you, but there's a reason that it's that they gave it the name the United States. States of America. Just like the European Union, the Union of Soviet Socialist Republics. Right, The United Arab Emirates. One of India's names is the Indian Union. It's because building a union state is really, really hard. It's like doing a merger of all the tech companies together under one leader is really difficult to do because everybody's like, who should be the leader? Should we be together? I want 50 individual states. So the reason that they put it in the name and, and they made people repeat it 5 billion times, trillions of times, really, to the point that you don't even realize you're repeating United is that it was really hard to unite it. Really hard. Right. Civil war, all kinds of things. There's constant centrifugal, decentralizing forces. Okay, this is the Chinese proverb. The empire long united must divide. Long divided must unite. When it's long united, everybody wants to break apart, do their own thing. Then there's period of chaos and anarchy. Then they want to come back together and they want, okay, can someone restore order? That is the unbundling, rebundling cycle. So I think the question is framed wrong, which is like, how to save the Soviet Union is how to save America is how to save the West. But if you Ask how to rebuild Russia. Right? How to rebuild startup societies, how to rebuild, let's say, red America, Right? Like how to rebuild in an Internet first way. I think that's a better posed question.
- [46:02]
B
Okay, so what's the answer to that question?
- [46:04]
A
So the answer to that question is. I think it starts with the concept of Internet first. Okay, what do I mean by Internet first? So anybody who's looking at this is probably Internet first. Why is that? You know, when, as a kid in an American school, we'd say the Pledge of Allegiance every time in the morning, you know, I pledge allegiance to the flag, the United States of America, and to the republic for which it stands, one country, indivisible under God, with liberty and justice for all. See, I can say that by heart. Right? That's. Remember the thing we're saying with God, state and network, like, that was like a prayer that I said every single morning as a kid. It was a prayer to the state, not to God. Okay, now what do you do every time when you make. There's a certain point in life, I don't know exactly when, it was when I probably started spending more time each day on the Internet than seeing the pledge, right? Probably as I exited high school, went to college, and so on and so forth. And, you know, prompting repetition is really important, right. You go from the state at the center of your worldview. The first thing you say every day is the Pledge of Allegiance, right. To, you know, the Internet. Right. And so it's not like people are saluting the flag first thing in the morning. It's not like they're going and engaging their communities. They're logging onto the Internet. Now, this is a very complicated thing because it's both the unbundling and the rebundling. Okay. If you know about how Rome fell, Rome is actually a lot like America. A lot. A lot of people make this parallel. But I actually had a long post on this recently. You can bring it up, but Rome started as a group. I mean, this is a massive overflow of, like, thousands of years of history and so and so forth. Okay, but like, because history isn't just one, like, clean arc like this, it's got a lot of zigzag like this, you know. Okay, but like, to oversimplify radically, starting as a group, you know, like out of. Influenced by Greece, obviously radiating out of, you know, the. The area that is Rome and Italy to what we call Italy, to take over essentially the entire Mediterranean basin. And they built this gigantic empire. And actually they were more benevolent than the Civilizations before them, because they didn't genocide everybody and in fact they conquered lots of people. They kept them as slaves. And eventually those slaves that got integrated into the empire. Actually there was demographic change in the Roman capital. Their currency over time got devalued. And then they tried like these last ditch moves at the end, like the crisis of the third century and so on and so forth. And there were like three things that are actually very similar to present day America. Several things. First is they had denatured their currency and then they introduced the siliqua and the solidius in this really hardcore attempt to introduce hard money. At the end they did introduce hard money when they introduced hard money. Now suddenly all the invisible taxation, the Keynesian type stuff became visible, which resulted in a huge tax burden on merchants since they had to pay in hard currency, which meant that they didn't want to be part of the empire anymore. Right? Another thing was there was a disruptive ideology, far left ideology that grew up on the edge of empire called Christianity, because Christianity at the time of the Romans was the original communism. The first shall be last and last shall be first. Sooner a CAM will go through an eye of a needle than then a rich man make it to heaven. Like all these kinds of things, you know, where essentially like the slave religion, right? Taking the worst and saying that the worst are the first and you know, like the he is, you know, the first should be last. Last should be first, not the worst. You know what I mean? And this basically delegitimized Rome and eventually when Constantine converted to Christianity, that's a little bit like, you can argue, you could say it's like Obama being the first black president, or you could say it's like the first, you know, Trump being the first crypto president. It was something where what the regime was fighting for so long flipped and won, you know, and that destabilized it because now Constantine flipped the direction of persecution. Now people, Rome, Rome was no longer persecuting Christians, it was persecuting the people who had persecuted Christians, right? And all the Roman gods, everything that they had thought was good was now bad or is questionable. Everything they had built Rome, they had a crisis of confidence. They know who they were. And then also from the outside, the Germanic barbarians were gaining strength, right? And so Christianity was a disruption, ideological disruption from the inside, the intangible, the barbarians were disruption from the outside. The whole thing fell down. And Byzantium, which was like the Eastern Roman Empire, continued. Right, okay, so what does that apply to the present day? The money Printing and then the sudden surge into hard money is like what happened at the end of Rome, right, where they did lots of money printing, then they surged into hard money. The burden of taxation became apparent and actually people didn't want to be part of it. The disruptive force, that's like Christianity, I would call the Internet, because the Internet disruption is in a sense like a slave religion. It's like flipping over Apple cards. The guy who has nothing is suddenly a CEO. The guy who is running Blockbuster or Kodak is suddenly nothing. So flipping over all these Apple cards is disrupting the institutions. Okay. The equivalent of the Germans are like the Chinese. They're like the barbarians outside who are just militarily strong. And maybe the equivalent of Byzantium might be like India or the overseas Anglosphere. Which was the reason that Byzantium continued is it was sort of. It fully understood Rome and it spoke a lot. It understood the laws and so on, but it wasn't as dependent on the capital. So it could kind of continue and it also could tolerate. Byzantium was complicated. I mean, you know, Byzantine politics. It's a reason for it. So all of these different subgroups and new religions and ideologies and so on, Byzantium was more tolerant of that than Rome itself. Sort of like India is better equipped. I'd say India and China in different ways are better equipped for the age of the Internet than the West. Should I speak on that for a second?
- [51:44]
B
Yeah, please do.
- [51:45]
A
Like, if you look at western nation states, they tend to be in the 10 to 100 million person range. You know, like Germany, France, Italy, the UK, Poland, you know, you've got the smaller ones, but they're kind of in that range. Right. If you take that and you push it to the extremes, China is the centralized sinic billion person super state that is bigger than the EU and US combined. 1.4 billion people under one guy. Right? Just this gigantic voltron meta organism where there's like one town with a million people making hair dryers. It's so specialized, yet so competent at just that. Right. There's like a San Francisco for hair dryers there. All right, so that's like the Internet in its total centralization mode, sinic centralization. Then you have India, which is like dharmic decentralization. So India historically had all these different subgroups that would manage to live next to each other and they worked out their own form of tolerance, harmony, pluralism. Right. Hinduism. And they speak lots of languages. They have an eye for all the political complexity of South Asia also, you know, the really good Indians are highly verbal, like very, you know, one way of thinking about it, when East Asian culture goes global, Japanese anime, Japanese video games, Korean K pop, Hong Kong cinema, Chinese films like Crouching Tiger, Hidden Dragon and now Chinese TikTok. The aesthetics of Chinese cities and Chinese dress, you know, and like their style and aesthetics. Their characters don't translate, but their aesthetics are very good. When East Asian culture exports, it's visuospatial, typically. Right. And because the Chinese language doesn't translate well into English, nor vice versa, their language doesn't sound charismatic abroad. But in all these regions, like, you know, where people speak neither English nor Chinese, their visuals are very compelling. Right? So China is like non verbal, highly visual. That's like basically where East Asia, broadly, when it exports culture, it exports visuospatial. India. When it exports culture and India, let's say broadly, South Asia is opposite. It's verbal. The Upanishads, it's like, for example, Ramanujan, India's greatest mathematician, was all algebra and analysis, not geometry. The three branches of mathematics. You look at Indian math Olympiad winners, the one area they're weakest in is geometry. They're amazing verbally and they're amazing on formulas and so on and so forth. So 1D characters and so on and so forth. That's where Indians are strong. So in the age of AI, the Chinese do the physical AI, like robots and Indians are the prompts. You know the age of the phrase. Right. Like so 140 characters on social media, or the AI prompt, or you know, the 14 or 13 or 12 words for a crypto passphrase. Right. And of course there's many other people besides Indians who are like that. I'm just giving broad characteristics. Right. And so in the age of the Internet, you can go totally centralized, which is China, or totally decentralized, which is Internet, which is India, which is Israel, which is the tech kind of cluster. Lots of small startups and doing things. Right. And I think that's the future is a billion person Chinese superstate and 1000 million person network states.
- [54:51]
B
Okay, I see.
- [54:52]
A
And go ahead.
- [54:53]
B
No, I see, I'm following it. I'm following it. So.
- [54:55]
A
Right, go ahead.
- [54:56]
B
Okay, so but going back to the rebuilding.
- [55:00]
A
Yes.
- [55:01]
B
Can it be done? And what. And transitionally, what does it look like?
- [55:05]
A
So the first thing is, in my view, the greatest strength is to understand one's own weakness. Okay. And what I mean by that is. Let me see if I can give an example that people won't Be mad about. Okay, let's say it's a basketball team, all right? Just make them mad. There's a point, huh?
- [55:22]
B
Just make them mad.
- [55:23]
A
Make a mad. All right, sure, I'll make a mat, but let's start with one which. Let's get the point across before I make a mat. Right? So like take a basketball team, right? A basketball team. The point guard is, you know, US basketball. Like, the point guard tends to be shorter than the center, but the point guard is usually more agile. So if the point guard knows their strengths and their weaknesses, they know that they can dribble, they know they can pass, they know that they're set up to play. They don't have to be the one who tries to dunk. The center knows they're the opposite. They're bigger. They're often a foot tall or 7ft tall. So the center's job is to dunk, and the point guard's job is to pass and to shoot. So it's division of labor, understanding one's strengths and weaknesses. Everybody isn't the same, but nor is one superior to the other. Those are, I think, the two Western failure modes. Either everybody's completely equal in all respects, like insane egalitarianism of communism or wokeism or supremacism. We're the best, you know, Aryans or what have you, right? If instead there is the acknowledgment of difference and the appreciation of division of labor, that's a different view. That's yet a third view, right? The thing of balance, where they call it yin Yang or dharma, whatever. Okay? So. And I think that kind of lens on the world is going to rise with the rise of China and the rise of India and the relative decline of the Abrahamic style. Why did I say that? If the greatest strength is to understand one's own weakness. Let me give you another example and then I'll get to the West. You know Satya Nadella, CEO of Microsoft?
- [56:50]
B
Yes.
- [56:52]
A
Okay. Before Satya Nadella took over Microsoft, Microsoft was in bad shape. Steve Ballmer had been running it for 10 years and was in complete denial about the fact that Microsoft was losing on the server to Linux, it was losing ON mobile to iOS and Android, and it was losing in the browser to. To Chrome and Firefox. Right. It was just losing in the next generation things. And his response was like, you know, to compete with the Zune, like, you know, which is like a terrible ipod, and to say that Windows, everything has to be Windows and Office, Windows and Office to just try and defend Their monopoly, and so on and so forth. And Satya Nadella, when he took over, did something very important, which is he took the L. You know how people say take the L? Right? He took the L on the server and he said, you know what? Linux is there, it's not going to go away. Microsoft initially called Linux communism and so on in the 2000s. A famous thing on that Linux is not going to go away. In fact, we're going to run Linux on Microsoft hardware. Couldn't believe it, okay? Then he said, mobile is not going away and nobody's installing the Microsoft mobile os. It's just not good enough. So we're going to allow Word and PowerPoint and Excel to run on iOS and Android devices and we're going to put all Microsoft apps and serve them on someone else's operating system. Again, unheard of. And third, the browser isn't going away. So we're going to make Office365 work in the cloud and we're going to actually charge SaaS. And in fact, we're also going to even acquire GitHub, which is an open source web app that runs in the browser. Right. And which was like a complete and total reversal. Could not be more reversal. And because of that, because he took the L, Sathya set Microsoft up for the W, right? Which is cloud, which is AI, which was GitHub. Look at the. I mean, he's crushed it right over, you know, you can't argue with Sathya's track record. And actually now you can't argue with Sunders either. Sundar managed to turn around Google with AI and people had a question mark around Sundar. But Gemini is really, really, really good. It's really good, right? Really good. Net. Net. He was CEO when he got.
- [59:02]
B
Well, it's really good. Well, I mean, I flipped from ChatGPT to Google Gemini about three months ago. We use it here on this podcast and it's fundamentally changed what we do. It told us what we're good at and it like he understood us.
- [59:18]
A
Yes, Gemini, also, because you can paste in PDFs and it analyzes that, it's less, you know, it doesn't have the same cloying style to the same extent as ChatGPT does. You know, its tone is better. To be clear, ChatGPT was a huge breakthrough when it came out, you know, and took Google operating on full cylinders to do something better. And who knows what will happen in the future. But anyway, point being, Satya Nadella took the L, took the L, took a huge L, admitted Defeat in order to pursue victory. It's called cutting losses, right? And so many of my American friends are stuck in a mindset where they're like, well, you're saying we should cut and run. We should accept defeat. These colors don't run, right? Like, you know, we're always going to fight to the end and blah, blah, blah. And they actually aren't even thinking about, like, their ancestors who, for example, left the English Civil War to come to America, right? Like the Cavaliers and the Virginians or the Roundheads in Massachusetts. Like, those colors ran. They didn't want. Part of. The way they put it is they didn't want a part of Europe's endless wars. Why did the Germans come after the Revolutions of 1848? Why did Italians come? Because the Messejourno didn't have opportunities. Why did the Irish come to America? Because of the Irish potato famine, obviously. The Jews in the Holocaust. Why did Persians come after the Iranian revolution? Or Chinese, you know, Koreans, Vietnamese, after communism in Southeast Asia, et cetera, et cetera, et cetera. All kinds of groups came to America because their home countries had been destabilized, because they didn't have the political resources to fix them within their lifetimes. They cut and ran, Right? So, you know, there was some, like, Irish American guy who I like, and I was like, was your great grandfather a traitor to Ireland? Like, why didn't he sign up for the Irish Republican army or whatever, you know? Right. And he had no response because he had genuinely never thought about it.
- [61:12]
B
Yeah, but hold on. Are you saying taking the L is for the good Americans to leave and go elsewhere? Or is it to know, for example,
- [61:18]
A
or at least have as an option?
- [61:20]
B
Yeah, that's an option. But what if you love your country and you want to stay? What is taking the L and rebuild in America internally?
- [61:27]
A
There's many different ways, right? But basically, like, so the first thing is to take the L to admit that it's over. JPG okay? And like Elon said, did my best. As I said, it was at 99.9%. Elon pushed when Elon said, did my best. Elon is our best guy. Okay? Maybe if you think you can do better than Elon, fine. Okay, great. Knock yourself out. In my view, that flipped it over into full. Elon could not fix the U.S. government. Okay? Full Elon land a rocket on a drone ship. Full Elon brain machine interface. Full Elon do you know basically everything he could. He could win the election 4,000, 948. Couldn't. Couldn't fix the government. Partly. Maybe he didn't have root control, but Honestly it's just $175 trillion in compounding debt is what the US government's actual debt burden is. It's not 30 something, it's 175. Why when you. Yeah, exactly, that's right. The financial report of the US government, like if you saw that thing, I had this thing like America's $175 trillion problem, they admit somewhere on like page 270 something that the actual debt is 175.3 trillion. You know, it's funny is there's like 50 headlines on the Kardashians and like zero on this stuff, right? This is not really discussed in the same way. Right. Anyway, if tax revenue is a few trillion a year, but compounding Debt is at 175 trillion a year, obviously it's unsustainable. It's going to go to zero. Right? There's. And the tech guys until recently would tell me AI will fix it. AI is going to fix it because it was a DSX machina, Right? Right. Remember God, state network. Like the network is their God. And you know what, I get it. Right? Like it's true that AI and robotics could unlock enormous productivity, but that's gonna be in China and it's gonna be outside America largely, or at least outside America as we know it. Because you can't build in America. You can't build the robots in America. Elon might be able to, but guess what? Left and to some extent right are turning on Elon. So like you need huge, you need supply chains working with you, not against you to do this, right? So, you know, everybody cooperating with you. You don't need Elon walking around private security. Like the Chinese robot guys don't have to deal with any of that stuff. They have other problems. They don't have to deal with that, right? So also Elon has like one fifth the, you know, America is like only 300 million people versus 1.4 billion and so on and so forth, all kinds of issues. So you look at it numerically, right? And there's no way the debt gets paid off without a bankruptcy. Right? So another way of putting it is work out the math. Really work out the math. And you know, this is my venture capitalist friends, my CEO friends. Like if I don't know, 10 years ago I'd said, oh, Bolivia is going to have a sovereign debt crisis or something, they'd say, oh really? And you know, we just pull out the spreadsheets we'd look at it dispassionately, okay, They've got a company in their portfolio, it might be doing well, might be doing not. They just are dispassionate investors. They look at the numbers and they're like, it's going to happen or it's not. Right. And they don't throw good money after bad. All of that numerical dispassionate precision completely goes out the window for many of them, until recently, I think. But many of them, when they talk about the state of America or California, they're like, we gotta win. They've got a romantic attachment to it. And I get that. There's actually a good to that, by the way, not everything can be pure calculations and numbers and so on. Sometimes you need heart, you need passion, you need drive, you need irrationality. There's a rationality and irrationality. If you can signal that you're gonna be committed more than anybody else, then you can win. Right? Right. The problem is the state is not their startup. The state is not their startup. They have other options. The best guys, at the end of the day, can build companies outside California, they can move elsewhere. It's not win or die, right? But it is win or die for the other guys. Because win or die for the other guys, they're going to win. They're going to win control of California, they're going to win control of Seattle and Washington state and win control of New York, win control of Illinois and basically win control of Canada. And what. One of the things, by the way, what Trump did, where he was posting about how he's going to invade Canada, may be seen as one of the worst foreign policy mistakes of all time. You know why?
- [65:29]
B
Tell me.
- [65:31]
A
Because the Canadian conservative Pierre Paul Ivray is actually up in the Canadian polls. It was cruising to a victory on. On Trump's coattails, basically. You know the term coattails, like the president, Right. Once Trump decided to start and Mag started to start humiliating Canada for no reason, right? With these stupid tweets that would be seen as sort of bullying jokes by magas. Yeah, we're so big and strong in Canada's wimpy weeks. But within Canada, the Canadian conservatives were humiliated by this and undercut. Why? Because of course, the blue Canadians and the blue Americans already hated Trump, but now the red Canadians were forced into opposition. Cause they're proud nationalists too, right? So what happened was Trump basically, rather than having a friendly country on the northern border, by just giving some words of support to Pierre Paul Ivre or even just being Quiet. Instead he got Mark Carney, who's actually very smart, but he became the leader of Canada. And what did Mark Carney do? Mark Carney realized well after D.C. he needs she. Okay, Newsom has made the same calculation. Mamdani's made the same calculation. Probably Keir Starmer has made the same calculation, Right. Pritzker has made the same calculation. Walls of Minnesota has made the same calculation. And they've all been fairly public about it. Hassan, who's like a, you know, leftist podcaster, has posted how he's China maxing, right? Essentially Democrats. They were by the way, in opposition to China for a long time because the Democrats wanted to operate the world's most powerful state. And they fought them pretty hard during the Biden era with sanctions and tariffs and not tariffs, but sanctions and you know, like all kinds of stuff, human rights, blah, blah, blah, all kinds of stuff they went after them on. But now they've lost. And because they've lost, they're like, you know what? The enemy of our enemy is our friend. And Democrats hate Republicans and the enemy of their enemy is the communists. And so Democrats and communists are linking up and Canada is the land bridge across the west coast, the Great Lakes states and the Northeast. So that's like communist America. And then the southeast of Texas and Florida and Bukele area, right? That's like Latin America versus Communist America, right? Or capitalist maximalist, you know, techno capitalist America. Right? So there's a map I did where, where just like Germany got split down the middle between communist and capitalist in the 20th century. America is getting split between the communist side, which is going to be essentially China backed and the techno capitalist side. So let's say techno communist versus techno capitalist, right? Which is the techno capitalist side is weaker, but it's got the assault rifles, it's got the muscles, the sunshine, bitcoin, it's got eat steak, you know, f the government, tribal, ultra masculinity and so on and so forth. Men are men and women are women, right? Like it's kind of a caudillo, you know, like Latin American feel to it, right. And so, but in a functional way, okay? There's Bukele, there's Francis Suarez, there's Rubio, right? There's a new generation of actually competent, you know, like there's Malay, right? This is actually a culture which is continuous with where Republicans are today, right? And then similar. But you know, the thing is that culture was lower status among Republicans, but now it's achieved about equal status, their peers, right? Similarly, the Chinese Communists were lower status relative Democrats, but now their peers are even superiors. Okay, so like what I'm saying there has really kind of already happened. Why Democrats and Republicans don't talk to each other. They don't marry each other.
- [69:11]
B
They.
- [69:12]
A
They've already digitally seceded. Democrats are in blue sky and threads. Republicans are in X. In truth, they don't talk to each other, they don't marry each other, they don't vote for each other. The only thing they barely do is trade with each other. And then too, they don't even want to do that. They want to, you know, like, you know, all the anti ice protests. Right. You saw this stuff in Minnesota.
- [69:29]
B
Yeah, of course.
- [69:30]
A
Democrats actually agree with Republicans on one deep thing. You know what that is? They want control of their borders and they also want to deport people. They just want to deport Republicans. Right. ICE out. Right. Means no Republicans, no go ahead.
- [69:46]
B
It's MAGA out.
- [69:48]
A
Exactly. That's right. So they want to. Democrats basically want the other tribe out.
- [69:55]
B
Right?
- [69:55]
A
That's what it boils down to. Reds want blue. Now the thing is, Republicans are just dummies on this very roughly. Like the Republican looks at the Democrat like their estranged wife that they want to get back together with, as you put it, save Western civilization, save America, save the marriage, whatever, whatever, Right. The Democrat looks at the Republican as their like abusive husband that they want to get away from. Right? Like restraining order, go away, blah, blah. And it's only when they remarry XI that the Republican will finally have their laser eyes glow and realize America is actually over. I'm not saying this, by the way, I'm saying this in a flip kind of way. But I'm saying that, you know, Republicans only perceive things in an explicit kind of way. Right. Like even the term America first is a misnomer. Why? It says Elizabeth Warren is an American and so is Trump, so in the same set. And Bukele is non American, so he's in a different set. But Bukele and Trump are on the same team. And Elizabeth Warren and AOC are on another team, obviously. Right. Like to put it in a different context, it'd be like saying Eurasia first. What does Eurasia first mean? Eurasia includes everything from like Amsterdam to Tokyo to like Abu Dhabi. Right. Eurasia first is not a useful category. That's such a broad category as many different subgroups in it. Like this just giant geographical area. Think of it. It's like saying North America first. Right. If you want. Right. America first is basically. It's Conceptually incoherent, because blue Americans are the primary enemy of red Americans. Another way of putting this is, you know, Democrats would say for years, it's against our democracy. It's against our democracy, right? That's because Democrats define democracy as ruled by Democrats, and Republicans define America as red America. So Democrats are always surprised that 50% of the votes are from Republicans, and Republicans are always surprised if 50% of Americans are blue Americans.
- [71:52]
B
And there's no fixing this.
- [71:54]
A
There's no fixing this. There's no fixing. There's North Korea, South Korea, like, Protestant, Catholic, East Germany, West Germany, right? Like, you know, Taiwan, China, Pakistan, India, right? Like, people split. Like, you can look at. Like, Turchin has graphed these things. Dalio's graph this stuff. There's a fourth turning which did this sort of like, on vibes and has gotten pretty far. There's like 50 different graphs I can show you. Like, let's just look at social networks, friending, relationships and so on and so forth. Look at migration, right? All kinds of people are refugees fleeing the blue states to red states. That's a lot like India before partition and after partition, you know, like, people getting the heck out and getting to, right? So.
- [72:36]
B
But is taking the L then admitting this and allowing the separation to happen.
- [72:42]
A
Taking the L is admitting that you can't throw good money after bad.
- [72:47]
B
You.
- [72:47]
A
You can't also throw your spiritual energy behind a lost cause. It is instead, when you write it off and write it to zero, the west is going to zero. America is going to zero as we know it, right? Then you say, what can we rebuild? You know what we can do? YouTube was built from nothing into literally billions of people in like, 20 years, right? Look at how rapidly ChatGPT grew. Look at how rapidly, like, open cloud, whatever, just grew, right? Just contemporary kind of thing. If you start with a mindset of Internet first, I mean, think about your podcast, right? You've got whatever, hundreds of thousands of people. What did you build that from? You built that intranet first. Yeah, yeah, you built it from zero, right? Because you didn't say, how can I fix a BBC? You said, how can I use tcpip, right? And so that's a mindset where all of your energy is constructive and it's pointed a direction where you have the property rights over it. You have the private keys to your DNS and your deployments, you have the passwords. You have control. Digital rights, digital property rights. You have control. I mean, of course it's true. YouTube and others censor and so on, but we've gone to a reasonable state of affairs on that right now. Right. Maybe there'll be a pushback on that and then a pushback to the pushback. We'll see what happens. But Internet first, you know, the state is their startup, but the network is ours. Right. We will actually push hard on the Internet. And you know, by the way, the reason, you know, once you realize the Democrats or Democrats, the state was their startup, you realize how remarkable it was that there was a 49, 48 victory. Because that was what it was. By the way, the Trump Kamala victory was 49, 48. It felt like a 50 point vibes victory, but it was literally one point victory. Like gust of wind goes the other way. Obviously a bullet goes the other way. It was very, very, very, very, very close. And I think what that victory did is it shattered the left coalition so that you have instead of tyranny, you have anarchy. Anarchy is better than tyranny because at least you can get to freedom. Right. Only half of North America goes communist. And by the way, when I say that, have you heard the saying communism with Chinese characteristics?
- [74:54]
B
I have, yeah.
- [74:56]
A
So what that means is it's really nationalism. Right. Or it's, or it's, it's like, you know, they have the surveillance cameras and so on, but they have the tradition of harmony. They have the red envelope. It's actually a good way of looking at it. You know those robots that were doing the dance.
- [75:09]
B
Yes.
- [75:09]
A
They were doing like a traditional harvest festival with young boys running around as well. It was techno traditional. Right. So it wasn't like Terminator with guns and so and so forth. It was a fusion of the new future with the respected past.
- [75:25]
B
Yeah. But when you watch that, you know, it looked nice, but I'm pretty sure everyone like was like me and looked at it and thought, yeah, but what happens when you do give them guns?
- [75:34]
A
No, exactly, that's right. So the point is, within China, that's techno communism with Chinese characteristics. There's a, like basically the guy who's underneath the surveillance camera often knows somebody who's over the surveillance camera.
- [75:47]
B
Right.
- [75:47]
A
There's lots of informal channels. I'm not saying it's perfect, but like it's worked for them much better than Maoism did. It's a, someone called it an alloy of, you know, just like, you know, the, the Europeans took Christianity, which was original communism and after it destroyed the Roman Empire, they rebuilt the Holy Roman Empire in, you know, it was kind of a fusion of Christianity and you know, it was In Northern Europe. So it was in Germany. Right. Or we call today Germany. And they called it the Holy Roman Empire. Right. So it fused Christian, the three things. Rome had been destroyed by Germany and by Christianity. And then in what was Germany, you had a Christian Roman Empire. The Holy Roman Empire. Right. And people say it was neither holy nor Roman or the empire, but at least it felt the need to replicate the brand name of the Roman Empire. Right. So like communism with Chinese characteristics is like saying nationalist socialism. It's like a fusion of right and left. It's. Or like Stalin would put it, socialism in one country or the Holy Roman Empire. It fuses the left and the right, the left of Christianity and the right. Okay. And of course, it could be bad fusions, good fusions. I'm not saying all of them is good, but China is really much more of a fusion of the two. Right. Than really a pure communist state within China, outside of China. We'll have to really see what happens because they will just export their drones, they'll export their cameras, they'll export their surveillance equipment, and it won't have any of the harvest festival type stuff. There won't be any Chinese people underneath the cameras who can appeal to the Chinese people over the cameras. Instead, it's just sold en masse to Carney or Newsom to repress the Republicans or the conservatives, see. Or to Kierstarmer.
- [77:29]
B
Yeah. And look, I mean, this is a. You know, you're not giving it high odds that this can be saved or rebuilt or fixed. And what you're really talking about is there's a potential. But you also also talk about the gray team. Right? The ex.
- [77:44]
A
Yes. So, like. Like, the way I put it is, you know, I think we have to understand more history to understand the good guys don't always win, especially in the short run.
- [77:56]
B
Right.
- [77:57]
A
Communists won in Russia. Like the Bolshevik Revolution happened. Eastern Europe was enslaved.
- [78:03]
B
Right.
- [78:04]
A
Like, for generations, China felt communism, Vietnam felt communism, North Korea felt communism. Right. Bad guys do win at times, you know, and. And yes, there's like a spirit that, you know, can, like, overall, in the very long run of humanity, yes, we managed to rebuild and so and so forth, but not every battle is won. And I think this century, roughly everybody who had a great 20th century has a bad 21st and vice versa, because the. The Chinese, the Russians, the Indians, they had a. The Vietnamese, they had a terrible 20th century that socialism, communism, third world people shooting each other, killing each other. Just massive chaos on that side of the world. Right. And the first world was Western Europe and America, and they were rich, but wealth led to complacency and then degeneracy. And now they're being declining very rapidly. And the east has been rising, even given its problems, on balance, it's rising.
- [79:08]
B
And we're seeing your Mandamis. And here in the UK we've got Polanski, this kind of rise of socialism, right?
- [79:16]
A
And the reason is people are. Look, I can't say how it's going to play out everywhere. The Internet means that nationalist and libertarian movements will be able to resist communist movements, but it'll be a constant predator prey like Starlink is this ridiculously important technology because with Starlink you can beam in freedom. And even if Starmer or whatever is trying to censor the Internet, you can beam it in via Starlink and you can still be on X, right? And so Starlink is a much more important technology than people realize. Satellite Internet, that's hard to block out of outer space. Elon is our, we need to keep him alive. He's very attuned to security and so on, but it's very, very important. My view is the reason I say this is first recognizing that the sovereign debt crisis, the political crisis, also the military, the manufacturing ells, all these kinds of things mean this long Keynesian era of borrowing and printing and so on is coming to an end. And there will be a giant correction which is like gold going vertical. The US military is withdrawing, alliances breaking up, like China's winning, Russia may be winning. The Internet is disrupting old things. And China basically essentially takes over the Democrats, right? And the Republicans lose control of their nation, their borders, which is the most precious thing. The Chinese actually now establish a presence there, as Trump called it, a drop off point for all the Chinese gear and equipment there, if you notice. By the way, what is Carney talking about in Canada? He's like, we're going to electrify the whole country. Or he's like, you know, if, if America invades Greenland, we have a response. Why is he suddenly so confident? Because China's going to do it for him. In his statement, he didn't just say Chinese electric vehicles are coming. If you read more close, he said the EV supply chain. So Democrats can't build and more generally, Western leftists can't build, but China can. And so that's a Chinese bailout of Canada, California and so on. So getting back to are they stupid or evil? The effect of these wealth taxes is to a rob or deport the tech guys from California. And then once that's Done. Yes, the economy will crash, but the Democrat party will be in total control. Just like, you know, Raul Castro, like Fidel Castro is in total control of Cuba. Right. Democrats destroyed democracy in California and other blue states. Why they built a one party state where elections are held, but the Democrat always wins. That one party state is how the graph got to such a level. Like the last Republican in California was Schwarzenegger. This is many years ago. Right. So once they built a one party state, that's when the stealing began. The state is their startup. They started to steal and so they drive out the tech guys who are their one competition for power there with this wealth tax where it's win, win already. They managed to drive out Zuck, Paige, Thiel, Brin, Elon Bezos. What a win for them. Just by even putting it, not even getting it passed. Right. Huge win. Because they have political power, they're pointing a gun, they're saying we're going to take your money, then what happens?
- [82:30]
B
But it was also, it was also at a part. There was like a time when things started to flip. Like when Marc Andreessen started doing interviews and saying he couldn't go to dinner parties anymore because he was agreeing with the Republicans and. And Zuck started going like training with Muay Thai and changed his out. Like they'd all started to turn. I don't want to say maga, but certainly Republican.
- [82:53]
A
They are not leftists.
- [82:54]
B
Yeah, right.
- [82:55]
A
However they are, in my view, they're caught. There's not a natural fit in America, but there is on the Internet. I'll come back to this point. Right. Basically the Internet is to the right of the left and to the left of the right to the. Which means they're in the center. Right. You know, we're. The Internet is international capitalism. That's what the Internet is. If you took every tech company and you said you can't sign up foreign users, you can't have foreign talent, you can't open foreign offices, you can't sell to foreign markets. 96% of their, I mean only 4% of the world is American. Right. It's like 20% of the market or something like that. Like, you know, the US is, The US is just much less central to the world than it used to be. If you can't sell to global like you're not going to have billions of users, et cetera, et cetera, you can get pretty big in the US it's true. Amazon got pretty big in the us. Amazon's the most America centric of them. But like, you know, imagine if AI could only be trained on American training data. Right? Like, you wouldn't have all the training data from Reddit if you didn't have global markets. You wouldn't have the scale. That, by the way, is actually the defense of the left. The left's egalitarianism helps form gigantic markets for capitalism.
- [84:08]
B
Right.
- [84:08]
A
Ultranationalism that restricts a market to just quote your people gets you this small market of a few million people, max.
- [84:16]
B
Right.
- [84:18]
A
And there is one exception to that. You know what that is?
- [84:21]
B
It's gone.
- [84:21]
A
China.
- [84:22]
B
Okay. Yeah.
- [84:23]
A
China is the only state, in my view, that can actually afford nationalism because it's a civilization. Right. MAGA and Europeans can't really afford nationalism because the leftists cooperate across borders and the rightists don't as much. Right. So you don't have scale. They don't have scale. You don't have a market, and so on and so forth. Right. So that's why, historically, in the 20th century, the capitalist center can also cooperate across borders, and they beat the communist left, but the nationalist right couldn't because it couldn't cooperate across borders. This century, though, China's the exception to the rule because it's so big. China is the one country that can actually afford nationalism. Everybody else has to be internationalist because you don't have the scale. That's just like, by the way, that is a rightist argument for leftism. Right?
- [85:16]
B
Yeah.
- [85:17]
A
Because it argued on the base of power.
- [85:18]
B
Right.
- [85:19]
A
Another version of that is that's also the partial argument against, you know, like, I understand without endorsing or not, I understand how, like, Andrew Tate and all that arose. And as, you know, for if, let's say you're a young man in America and you'd be told you're like this evil white supremacist, blah, blah, blah, kid in school, and so on and so forth. And here comes Andrew Tate who's like, you know, telling you you can be muscled. And so there is a good to that in the sense of self discipline, lifting weights, strengthening yourself and so on and so forth. The problem, and Tate himself is actually a very smart guy. He's the son of a chess master. He wouldn't be where he is without having some intelligence. And I think he plays a Persona. I think he says a lot of things as a grain of salt, almost like a WWE wrestler or something like that. A lot of people are Internet Personas in this way. The problem is a lot of people don't get the joke. The issue is that individually, alpha is Collectively, beta. What that means is, if you have one Andrew Tate, he can probably beat up, like, one individual Chinese guy. But if you have a thousand people who just watch Andrew Tate's stuff and try to act like Andrew Tate, Tate himself is probably capable of some degree of cooperation. But a thousand people who don't get the joke and just watch the show, they get beaten by a thousand Chinese guys who cooperate. Have you seen, like, the cooperation game where they all dribble the ball in unison around, you know, like basic. Yeah, Google the Chinese cooperation game, okay? It's got, like, 50 school children and they bounce a ball like this, right? Like, they dribble and they move over and they bounce the next ball and they move like this around in a circle. So it is teamwork. So you just have a giant circle outside. So let's say, for example, there's 50 people. There's 51 giant, like, beach ball kind of things. They go like this, and they move over one, they go like this. And the whole point is to anticipate. The guy to your left, the guy to your right, keep the rhythm going, the harmony going. Move over, boom, like this, right? So the games they play are about harmony and synchronization. One way of thinking about it is, you know, in the 20th century, technology was centralizing. It was mass media, it was mass production. And America, because it had its tradition of freedom, was a good balance to the centralizing technology of the 20th century. Whereas Russia, with this tradition of tsarism, or China, with this tradition of harmony, it went too far. It was like a centralizing or collectivist culture on top of a centralizing collectivist technology. So it went all the way bad. Whereas America had the balance of mass media, mass production, but also tradition of freedom, right? Okay, this century, with the Internet being this incredibly decentralizing technology, layering that on top of all the American freedoms and so forth, gets you what I call American anarchy, right? But the Chinese, with their tradition of harmony and so. And so forth, balance that, right? Other cultures, the tradition of leadership or kings or whatever, balance that, right? The way that we balance that, I think, with the west and with network states and startup societies is we keep the democracy, but we call it. We allow you to become president of a network state. You actually run an election on chain. Just like we put capitalism on chain, we put democracy on chain. And you can vote on chain. And the same way you send one Bitcoin on chain, you can send one vote. And every vote counts because you can count all the votes. And you get back basically An NFT that's also the key to your door and to the property. So you can't enter the property without it. I gave a whole talk on this whole topic. But the point being that you can have legitimate and competent leadership. The left focus on legitimacy, the right focus on competency. But you can have both if you go Internet first. Right. You essentially elect your leaders on chain with the same technology we've used to guard Bitcoin, but we use it for votes. So this brings me back to that point. Basically take the L, right? The west, one of the things the Americans will say, Euro poors, right? Have you heard that? But the thing is, actually Europe is richer than America. And one very important thing, you know what that is? Culture. Well, it's history. But actually they do have more functional infrastructure and lower crime because like they just have like. I'm not saying Europe is going in the right direction, it's going in the wrong direction. Western Europe, at least Eastern Europe is much better. Western Europe is going in the wrong direction. Nevertheless, their public sector is much more functional than like Blue Americas where you don't have the same shanty towns, homeless. It's bad, don't get me wrong, but it's not as bad. Right. You have to a greater extent functional public infrastructure and so on. It's getting worse, but it's not as bad as what it is in America. So that's not seen in the individual income levels. Europeans can tolerate to some extent lower income levels because their commons is better. Americans need high income levels to escape insane levels of crime, dysfunction and so on and whatnot. Right?
- [90:12]
B
Yeah. But that's breaking now in Europe. It is, yeah. I would say we're just on a lag from the US because it's breaking here. People are feeling poorer. We have new political parties, we have nationalism. It is like we've hit our limit.
- [90:29]
A
Absolutely. And Americans are also becoming poorer because of inflation and so on and so forth. Aside from tech. Right. So the idea that basically both Americans and western Europeans are getting poor privately and publicly together. Okay, Just the. Unfortunately, okay. Eastern Europe, different this century. I think a lot of people will go and you know, much more important than allocation is location. Choose your location. Just like the Pole came to the uk. Maybe the Brit goes to Poland or to Dubai, which a lot have done.
- [91:05]
B
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- [92:54]
A
I think here's my argument as to why and everybody will disagree with this, but I think I'm one of the very few people who are making the the moral intellectual case for leaving. First of all, exit built America, right? Like it's a people who left who had the bravery to leave. See, the thing is, staying in one place is not actually courage, it's just inaction, right? In a sense, staying is surrendering. Because guess what, you're paying tax revenue to the state that hates you, right? And how Are you going to.
- [93:24]
B
It's surrendering if you don't do anything. But if you become politically active to. Well, say you become politically active, you join what feels like a revolutionary party to change something.
- [93:35]
A
Maybe, but. Okay, so let's talk about that. Does that actually have to be done from within the country? No. Why? You're posting on the Internet. They can read it from within the country. Right. So much of what you're doing is Internet first. Right? And you know the exact techniques, tbd. But, for example, if you develop a startup society that's outside the UK that actually has all the British values that you seek to emulate, right? And you bring in a bunch of the high IQ people there and they're underneath those values, you drain the resources out of Britain. You're posting, posting, posting. You can essentially hold a plebiscite on chain prior to reentering. Right. You start the new thing and you drain. Like how Netflix drained the resources away from Blockbuster. It didn't reform Blockbuster. It basically just pulled the customer base away.
- [94:29]
B
So you're.
- [94:29]
A
If you pull enough of that, you're stronger.
- [94:32]
B
You're stronger on the outside because you're
- [94:34]
A
much stronger on the outside.
- [94:35]
B
You're given less of your resources to the state. Kirstalmer can't throw you in jail for a mistweet. And you can prove your case.
- [94:42]
A
Yeah, you're. You're more free and deployed by building
- [94:45]
B
up that network externally. Yeah.
- [94:47]
A
Yeah.
- [94:48]
B
Okay.
- [94:48]
A
Yeah. You're more free in Dubai than you are in the uk, I think, in many ways, right? Not every way, but a lot of ways. You're more free to walk down the street. Right. And so the thing is, every society has a line. And what I think a lot of Westerners don't get is they'll see the explicit lines in the East. In the east, the lines are very explicit, which are basically like, don't criticize the ruling party or the government by name. Just keep them out of your mouth if you like. If you have criticism, first of all, discuss it in private or do it through official channels or something like that. Don't cause a fuss. Right? Many Westerners just lose their minds over this, okay? But they actually are conversant with something else, which is don't criticize the ruling ideology. So see, the thing is, in the west, right, you can go after the puppet, like Biden or whatever, but until Elon decentralized or like, took control of X, you couldn't criticize the ideology that backed Biden. Biden himself was a pinata. Like Almost not even a human being meant to take a million hits. He's basically dead while he's president. Right. So being able to criticize the ruler is actually not as important as the level of indirection that the west had evolved was like a decentralized ideology of wokeness that you couldn't criticize. Right. Until 2023, by the way. Go ahead. Less than three years ago.
- [96:06]
B
But also in the east, the line is pretty visible. You know where it is. It's pretty fixed.
- [96:10]
A
Exactly. It's explosive. Here.
- [96:12]
B
Here it is. And it's like moving all the time and it's coming towards you and you're not sure if you're stepping over it.
- [96:17]
A
Correct, that's right. And it's like, you know, the thought crime that Orwell talked about is literally speech crime in the uk. Like you can literally get arrested, you know, and so something like that. I prefer to know what is permissible and what is impermissible and it be obvious and bright line than to have it ever evolving and unsaid and unspoken and so on and so forth. Right. That just allows for a great degree of predictability. Right. So. And by the way, that's going to happen in, in the former west anyway, you know, why.
- [96:50]
B
Go on.
- [96:51]
A
Do you think Carney is ever going to criticize XI again?
- [96:54]
B
Of course not. No. You can.
- [96:56]
A
Newsom is.
- [96:57]
B
No, no. He put out the red carpet, visually, and cleared up all the crackheads.
- [97:02]
A
Exactly. That's right. So Democrats have destroyed democracy. The Labor Party, the basically Democrats, I mean, in the broadest sense, labor, you know, the, the, the leftists in Canada and so so forth, they're not going to criticize Xi. Like all of that was basically when they thought they could still fight, you know, China or whatever. Right. The, the same trick that people use on LeBron. Right. They're like, lebron, criticize, you know, the Uyghurs or whatever. Right. Remember that? Like he was, he was talking about blm, but he wouldn't talk about the Uyghurs. Why? He didn't want to hurt his revenue in China. Right. So now you can use that. You easily use that on everybody on the left and it'll show their true boss. It used to be the ruling ideology, but now it's actually the Communist Party. What's funny is now the thing about this, it's interesting and there's a subtlety to this. There's like the 50 IQ conservative and then the 150 IQ conservative. Okay. You know, the 5100. Right.
- [97:55]
B
It's the bell Curve.
- [97:56]
A
Yeah, it's the bell curve meme. The 50 IQ conservative is the Communists are behind the Democrats. Then there's like a much smarter version which says, look, wokeness came out of America and the West. Like, with the exception of Foucault, who's French, almost all the craziest wokes were American, right? Like, all the far left ideologies came out of American universities, were funded by America. It's not like they came out of Chinese rice paddies during the Cultural Revolution. No seminal texts of wokeness are in Chinese characters. How could the Communists be upstream of the Democrats? That's so stupid. The Chinese, if you've read their propaganda, they're not good at arguing in English, right? They're good at many other things. That's not their forte. Right, but then the 150 IQ is actually, yes, the Communists are behind the Democrats now. Not really in the past, but they will be. And the reason is Democrats are so dysfunctional. They're D.I. democrats. It's D.I. democrats versus retard Republicans. Right? That's like, okay, okay, so because both sides have become idiocratic, you know, like the IQ is drained out to China and the Internet and like, in a sense of the Democrats now today, it is true. The communists are behind them because the Democrats can't execute anymore. They don't. They used to have guys like Rahm Emanuel, Larry Summers, Andrew Yang. Elon was a Democrat, Trump was a Democrat.
- [99:23]
B
Right?
- [99:24]
A
Like many tech guys were Democrats. They had a whole base of guys who could execute. Now they're so against tech and finance and so on that they've just become like, anybody with any technical, mathematical, quantitative, numerical acumen whatsoever is probably a white supremacist or whatever. So they think, blah, blah. Now the funny thing about this is, like, this is another ridiculous aspect of today's Western politics, and it's the woke whites versus the dark, right? Okay, so you have Elizabeth Warren and you have Newsom and you have many, many, you know, like the, the Minnesota types who are protesting ICE and so and so forth, actually are, are whites. And then a lot of the ICE agents are like black, Hispanic. A lot of the people who are, you know, like some of the people on the, quote, far right, you know, Tate Fuentes, you know, Kanye, blah, blah. They tend to be Latino or Mexican or, you know, or black or what have you. So the woke whites versus the dark, right is this really interesting political spectrum. Like people yelling at Marco Rubio, for example, for, you know, saying, you know, capitalism is good and so on. And it's like a white leftist who is yelling at Marco Rubio, right? This is something which is almost comical, right? Because the woke white feels guilty for being white and the like, ice might be close to 50% non white. It's certainly like more non white than many of these Democrat rallies, right? So you have this bizarre thing where these people are yelling, like, you know, about how much they support non white people and these people are being called white supremacists when actually there's a color inversion or confusion. It's like a bizarre kind of aspect to it, right? Getting out of that frame entirely is a valuable thing, right? And you can only have the luxury of being out of that frame if you've changed your location. Right. Like, one way of putting it is in the 2000s, okay, you and I probably both had the experience of, I don't know, going through an airport at some point and seeing some television screen and something that's like blowing up in Iraq or Afghanistan, Syria, right? And you'd say, sucks for them, right? Like that's terrible. Oh my God. And then what are you going to do? You just kind of go back to, you know, just go back to your coffee and you've got your work to do or whatever. It's like in an airport lounge. You see, literally it's televised, this explosion or something like that, you know, 33 were killed in a bombing attack in Fallujah or whatever it is, right? And you're like, sucks for them. And you just kind of go back to your work right now. Being here in Asia, I feel like that when I look at America.
- [102:04]
B
Fuck.
- [102:06]
A
Okay. I see the chaos on the X feed and of course I think it's bad. And I say sucks for them. And then you kind of go back to peace and quiet out in southeast Asia, which 70 years ago had its own time, obviously of huge problems with communism and shooting and so forth. So it's almost like chaos moves around the world and it's coming. It has come to the US and Western Europe, okay.
- [102:29]
B
And I guess one of the issues is like, it's very difficult to accept the reality of it. It's a bit like you're in a shitty relationship and you want out, but you stick around for a couple of years because you think it might get better and eventually you leave. It's a bit similar to that because, you know, I love the uk. I don't want to leave the uk, but I know it's fucked, Balaji. I know it's screwed. Like, what am I sticking around for?
- [102:52]
A
Well, here's the thing. Part of the tradition of the Anglo, more than almost anybody else, other than maybe the American or the Internetizen, is to travel the world. Like you got all the way down to Australia and New Zealand and Hong Kong, like the British Empire. Like, you see, you guys are different than the Germans or the Russians, who are much more land powers, right? The Germans were the last to colonialism. I think they only did like Namibia or something like that, right? The Anglos and the French, due to being maritime powers, especially the English, who were 100% maritime, since you know, the nature of England and the nature of the uk, you basically, in a sense, were started. It's funny, this is a backronym or not backroom. This is a retcon, okay? But you guys, there is a similarity between the ocean and the Internet. You know, like you go port to port, okay? Like, that's like the thing on your computer that opens up packets and sends to another thing you can, you know, that's the thing about being an ocean power. You can send goods directly from this port to Hong Kong without going overland through all these other hostile countries, right? So you almost can teleport goods. The law of the sea, right? The ocean is decentralized. No state controls it, right? So maritime law and the law of the sea, which is actually, that's literally a thing. The law of the sea. It's like what happens if tankers collide each other. The law of the sea is the best precedent for the Internet and the Anglos, the Americans. Internetizens are actually pretty good at this world, right? Pretty, pretty good. You're actually pretty strong on the Internet. Like this was, you know, it's like your grandchild, you know, Anglos gave birth to America, gave birth to the Internet. So you'll be pretty strong Internet first. I mean, you're good at arguing in English. It's made the second most successful tech place and so forth. All the things people beat up on the uk, it still has a lot of good things. Like the people. There's a lot of good there. So given that you have a tradition of being able to strike out and do things on your own, a cultural tradition is not. It's not just one thing, right? Like, you know, that meme that I that we showed, you know, that I thought was very funny, which is how Americans see the Brits. And it's all like, you know, very, very well dressed, eaten Oxbridge guys, you know, eating a, you know, cup of tea, you know, drinking tea and, you know, a foyer and how The Europeans see, the British was like some drunk chav who's passed out on the street, right? A culture has many strands into it, right? And certainly one strand is the farmer and little England and so on and so forth. Another strand is London and the Metropole, right? But a third strand is like, you know, the thing with the guy looking over the mountain into the distance and so and so forth is like the famous painting, right? Actually, I don't know if it's actually a British guy, but the third pole is the explorer, right? The pioneer. That's definitely a British thing, right? So lean into that aspect of the culture. Go Internet first. Go abroad. It's a big world. Build new London abroad. Because we're giving the tools to do that. Okay? Just like, obviously Dubai exists, right? Like the east has built all these new cities. It's possible to do that. It's hard. I mean, look, you actually did a lot, you know, you organized this whole soccer club.
- [106:17]
B
Right? But that anchors me a bit.
- [106:19]
A
Go ahead.
- [106:19]
B
It kind of anchors me. I think there's a bigger question, though, with this look. I'm Balaji, I'm an Internet animators.
- [106:25]
A
Yes.
- [106:25]
B
Yeah. You and I are doing this, right? This is the first time I've done a remote show. But in the end, as beautiful as this studio is, as much as we love it, if I'd have done this from my bedroom on a laptop, and you'd done from your bedroom from a laptop, the people who are watching it would have come for the content. And yeah, a studio looks great, but the impact on the monetization is. Is a rounding error, like. And so as much as I want a beautiful studio and I want to do this in person and maybe fly to Singapore and hang out with you, I don't have to. This is a.
- [106:57]
A
You don't have to.
- [106:57]
B
This is a business I can do anywhere in the world. It's Internet native. I have bitcoin. Okay, but that's me. Somebody watching this might be looking to go well, that isn't me. I'm Steve. I live in. I don't know, I live in Rochdale and I'm a plumber and I've got three kids. Even worse. I'll give you a worse. I think Steve's better positioned than, say, John, who's a lawyer who's looking at AI and knows his job's potentially going to Claude within 12 to 18 months. And his wife is an art director and advertising agency and she's already lost her job and they've got three kids and they're thinking, well, what do I do and how long have I got? What do I do and how long have I got?
- [107:38]
A
So here's how I'd say to that. And I'm not being callous at all when I say this, okay? Like many, many, many Chinese, Vietnamese, Indian, et cetera, immigrants, like certainly my parents generation would say like Russians, you know, and so and so forth after the end of the Soviet Union, they, you've often heard them say something like I came to America with a dollar in my pocket.
- [108:03]
B
Yeah, right.
- [108:04]
A
These are people who are, for example, physicists or something at the end of the Soviet Union or like engineers, like fairly senior people. And they had to tolerate an enormous late career, step down. Sometimes they had to become a cab driver or something like that to give their children a better life abroad.
- [108:21]
B
I see what you're saying. It's like take the L. On an individual level, you might picture yourself as a middle class couple with two six figure salaries, but they're going, if you want to do the best for your kids, you need to realize you're the immigrant who has to travel to Dubai and maybe become the taxi driver maybe.
- [108:38]
A
Right now the thing is that the sooner you self disrupt the. Obviously that's a very hard thing to say, right. But the only reason I bring it up is that's why, why are there so many Chinese people who are running laundromats or Indians who are running hotels or whatever, motels and their kids do really well as physicians or something like that. These are people who had a lot of skills in the old world and because of communism, because of socialism, they were crushed and many people stuck there and a few really resourceful ones managed to get out and they just bit their tongue and swallow their pride and grind it away and then their children could have a better life.
- [109:21]
B
Right.
- [109:21]
A
Like my father literally came from a dirt floor in India, right. Like, you know, it was something where India was at its nadir civilizationally and you know, he just grinded his way through, you know. Now part of it is it is in. It's funny to put it this way, but if you start at zero, it's much easier to get to infinity. It's much harder to start high and then accept such a drop and then come back.
- [109:50]
B
I recognize most people there's a long period of cope.
- [109:54]
A
Yeah. And some people will really like, they'll just get abs, like just so mad at somebody or something that they blame for it. And it might even be partially true. Like basically the Republicans will blame China and there'll Be some truth to that. But it's also true that China executes. China's really competent, really smart, really hardworking. If you've been to China, have you seen the Chinese cities?
- [110:16]
B
Yeah. Unbelievable.
- [110:17]
A
Yeah, they actually are smart. Right. It's not something where like the Republican narrative is everything was given to them, they stole everything and so and so forth. And you know, the problem is people can't keep two things in one head at the same time. Absolutely. Do the Chinese clone and copy and so on and so forth? Yeah. But they also executed like crazy. And you know what, if you look at the 1800s, the Americans did that to the Brits. Like American industry was at first copycat and MeToo and so on and so forth. And then it became respected on its own. Right. But that actually took a while. You have to actually copy before you can innovate. So the point being that like, similarly, the Democrats will blame the Internet in part, and they'll be right. They'll be right that that did disrupt them. But like, you know, there's a few possible options. People can just be angry for the rest of their lives. And, and by the way, you can now sort of understand, it's funny to put it this way. When I say understand, I do not mean sympathize with or whatever. I just mean understand the worldview of like someone like Bin Laden, right? Who he's like, oh, we lost Andalusia and our civilization has declined. We need to strike the crusaders who did this, blah, blah, blah, blah, blah, Right? If you just go too far into never taking the L, then you end up like that, right? Just like this resentful kind of person who just, you know, hates everybody and so on and so forth. Right?
- [111:36]
B
But there's a bigger reality to this because I watched the CEO, the AI CEO of Microsoft saying, yeah, all these jobs are going to be gone in 12 to 18 months.
- [111:46]
A
I don't know about that. There's friction on that. Let me argue that point in a second, but go ahead.
- [111:50]
B
Yeah, but even so, like John and Kathy with their three kids and their 800,000 pound house facing some challenges because Kathy can't get another job in advertising at the moment because there's no need for art directors. And he's looking down the barrel of the gun with his law job, but whatever, like they're in an okay position, but they could sit and go through this kind of like slow decay where it's like, oh yeah, really afford the mortgage or we, we sell the house, we move to a smaller house, we. Or Rather than leave liquid, a liquidate, immigrate, go ahead and they've got more than a dollar in their pocket. They could go to Thailand and be wealthy.
- [112:29]
A
Exactly. That's my view, is liquidate, emigrate, accelerate.
- [112:34]
B
Look, I tell you what, when I tell this to my son, he's going to be like, when are we going?
- [112:38]
A
Yeah, right. Like you're saying, liquidate, emigrate, accelerate means before the sovereign debt crisis fully hits. Before like gold moons and also before it's hard to get out physically. And confiscation, mass confiscation and confiscation, it's going to be. The thing is there, like if you know enough history, you know the Berlin Wall was only set up in 1961, right? Is I'll get the exact date. Hold on. I believe it was 19. Let me just double confirm that.
- [113:13]
B
Yeah, 1961. Konika checked.
- [113:15]
A
Yeah. So it's like 16 years after the end of the Cold War. Right. Why? Because there was a loophole where people from the communist region could get out to the capitalist region from West Berlin. And the Berlin Wall was set up because all these engineers, doctors, skilled people were leaving the communist zone for better opportunities in the West. And it was an embarrassment to the communist regime. So they set up a Berlin Wall. They called it an anti fascist barrier and they pointed the guns inward.
- [113:44]
B
Okay.
- [113:45]
A
So when a regime is embarrassed enough, the wealth taxes will obviously be followed by exit taxes. In fact, they've tried to pass those as well. Right. And the thing is, the worst regimes in world history, the Nazis had a Reich flight tax that stopped you from leaving. The Soviets had a diploma attacks that stopped, they're educated from leaving. The Cubans shoot you for trying to leave. The East Germans built the Berlin Wall. North Korea has had people in gulags and they shot them for trying to leave. Basically communist states are prison states and Keynesian states. You know, the thing is, if you quote stay and fight, right, you're staying in surrendering to essentially a future where probably, if you're in a western European country or in a blue American state where probably your kids and you will be in debt slavery forever or for certainly your lifetime since what happened in Latin America, unless you understand the history of other countries, why are they third world countries? Right. Often they basically got into what's called financial repression and the combination of inflation, taxation and also by the way, the passport sucks, so it's hard to get abroad. Right. By the way, the American passport is cratering. All of these trade wars and stuff with other countries and Visa things. They retaliate by saying Brazil says guess what, no more visa free travel. That's a huge part of bricks. It's cut off. So. So American passport has plummeted out of the top 10. It's going to keep plummeting like this because sort of chest thumping nationalism has made them so antagonistic, needlessly. So to Uruguay and Thailand and all these other neutral places, right. That lots of countries are just going to treat Americans like Americans are treating them. Which to say, it's going to be hard for them to get out. Okay, now it's like a crashing asset. Just like the dollar is declining against gold, the US passport is declining. Western passports are going to decline. We'll see. Maybe the US passport declines faster. This kind of stuff happens fast, but it's got some friction to it. The point is liquidate, emigrate, accelerate means it took 16 years for the Berlin Wall to get up and you would be smart to get out before that happened. That's some period of time, You know, move fast or escape things, right? Like the, the way I put it is the people who are both really helpless and really cynical never make a move. The people who are really helpless don't even know what to do. The people who are cynical have convinced themselves nothing can be done. Right? But the bold take a calculated risk at the right time. They numerically assess the situation. Liquidate, emigrate, accelerate. Right, and immigrate. By the way, if you do take that capital and you do move, there's a lot of places you can do really, really, really well still.
- [116:45]
B
And they'll treat you nicely.
- [116:47]
A
And they treat you nicely. Dubai, obviously, you know, that's fine for, for the Brits, Thailand, you know, like, you know, network school, we've got network school, we've got, you know, that's NS.com, there's a bunch. But you can come here if you want. But there's many places, right? El Salvador, you know, and the thing is like money isn't everything. You know. What's more important? Safety, health. Right? Like a smile from your neighbors. They don't hate you. You're, you know, right, duh, you know, you just don't want to be. It's so much better to be part of what I call the ascending world than the descending world. That's the opposite. It's not developed and developing world. Developed and developing world is a terrible term because assumes the developed are here and developing are catching up, right? This is a finished product. Done. It's like small C. Conservative in a sense. These are catching up. That's not what it is at all. It's the descending world and the ascending world. The ascending world is China, India, Vietnam, Eastern Europe and so on and so forth. The descending world is like the US and Western Europe, right. And. Or much of blue America. At least there's pockets in red America that are doing okay, like Miami and Texas and so on and so forth. They have some health to them. And I think if you had to be in America, you'd be in Texas or Miami. And if you had to be in Western Europe, I guess Switzerland. But you know, Switzerland ain't what it used to be, you know, like, if you have your EU password, I'd get to Eastern Europe.
- [118:14]
B
If you're going to go, you've got to go somewhere where the sunshine. Can we talk about a bit about AI? Because I've already taken up a lot of your time and I'm conscious of trying. I do have some AI things. It felt over the last three or four weeks, it's almost felt like we've gone through a period of acceleration. All of a sudden everything seems to be moving really quickly. And there's different claims about. There's bull cases for the job market, bear cases for the job market. We already have a difficult economy here. What's your take?
- [118:44]
A
What I think. Well, so AI is. AI is a big thing, obviously that does many different things. One way of doing it is you can start splitting it down into like AI for code, AI for images, AI for video, AI for sub subsets of it, like comics. Right. It's a subset of images. Right. AI for robotics and for drones and so and so forth. So it's like it hits so many different areas at the same time. Right. My rough view is China and the Internet benefit from AI and there'll be tons of jobs. Like let's say, for example, obviously physical AI, the, the humanoid robots, the drones and so on. One of the, one of the things you know, I have a post called polytheistic AI rather than monotheistic AI. You can, can see that, right? So I make 10 points in the post. But one of the points is AI doesn't do it end to end. It doesn't middle to middle because you still need the contextualization and the initialization and the verification. Right? You need the prompting and you need the verifying. It does all the middle steps fast. You still need to tell it what to do and verify that it did what you told it what to do. No matter how long the agent is until it can prompt Itself, which I think it won't be for a while. But prompting and verification are very human steps. Okay. And what it actually means is it pushes it to the harder and harder and harder parts. Those are actually the harder parts. Right. It's like, okay, maybe there's. I don't even know if this is true, but let's say there's less engineering jobs, there's more engineering manager jobs because you have to be like a higher skilled person. I think you have to have a higher skill than engineer to be an engineering manager in general. That's a generally true thing. You need to be able to find errors in the code. Right. Which means you have to be a more skilled engineer. And orchestrating these agents is like managing software engineers. It's a lot like that. It's not exactly like that, but it's a lot like that. So another way of putting it is, when we went to chair factories, artisans who are good at carving chairs with a knife basically split into the people who set up the tool chains and the machines for carving the chairs and the technicians who maintain them. And both of these people need to know something about chairs. So you go from artisanal coding to technicians who are going into details of why the AI is getting it wrong, and the engineering managers who are setting up the AI to crank out the code. Right. It means you do train somewhat differently, but it means you sort of flank it, you know? Okay. And this is the prompting and this is the verifying. Now, there's many other scenarios for how things this can transpire. For example, let's say there's somebody abroad who makes $2,000 a year and an American lawyer who makes $200,000 a year. And AI converges it. So AI plus this person can get it to $20,000 a year. That's a 10x increase for them. Amazing. 90% decrease for the American lawyer. Terrible. That's the kind of thing I think will happen. Okay, so that's not necessarily taking the jobs. It is, in a sense, redistributing them. So it's like AI plus human. Other kinds of things. Yes. Will be done purely by AIs and there's no need for it. And the thing is, Sometimes it takes five or 10 or 15 years to really nail all the endpoints. Like, finally, self driving actually works. Waymo actually shows that you can get it to work end to end. And you literally don't need a driver. You still need people to maintain the vehicles and so on and so forth, but you don't need a driver.
- [122:23]
B
Okay, but this, this is all a bigger argument for leaving somewhere like a western country because it's going to decimate large, you know, sectors of the job market. It's possible, but, but liquidate, immigrate and you can accelerate in countries which are, you know, ascending with this technology.
- [122:44]
A
Exactly, that's right. So ascending with AI, like India, China are broadly going to benefit from AI, from robotics and so they're optimistic on it because they have nowhere to go about. Right?
- [122:56]
B
Yeah.
- [122:56]
A
Like Indians with AI can do all these kinds of things and you know, you're coming from a dirt floor. This is a significant improvement in your life, Right. Within your life. So the. And when I say liquidate, emigrate, accelerate, it also means do it faster. Right. Do it now because it's a pain, it's like a huge pain to do it.
- [123:18]
B
Right.
- [123:18]
A
You don't want to do it. And sometimes the thing you have to do the most is the thing you don't want to do. And the faster you do it, the faster it'll get done. And also you'll probably get out just in time before the, you know, UK exit. You know, like all the non dom stuff they're doing in the uk, Right, they're trying to implement global taxation. Why are they doing it? Because it's bankrupt. Right? Yeah, it's like. Yes. So it's ultimately like the Keynesianism ends up like communism, which is a prison state that robs you and doesn't let you leave and enslaves your descendants and so on and so forth. If you can see that coming in slow mo, liquidate, immigrant, accelerate. Okay. And get to an ascending rural country which is benefiting from AI because you know, like Silicon Valley going to zero benefits everywhere. That's not Silicon Valley. You know, if you were on the left, you'd say, ha ha, it's decentralized. It's global economic equality. Right. If, if you're on the right, you'd say, well, great. It's not an, it's a country, not an economic zone. Right. I mean, I'm like somewhat being sarcastic, but. But the point is there's aspects of left and right theory that say, hey, it's great to send all this stuff away, we can just do it all ourselves, who cares? Right? Fine. So there's an aspect of disruption. There's also an aspect of redistribution. There's another big part of it which is AI disrupts many of the, let's say AI, the digital part of AI goes after blue America, the left. And the physical part of AI, the China goes after red America, like the manufacturing and military and so and so forth, right? So digital AI means Hollywood can be done by anybody. They're in big trouble. Obviously media, like media is corrupted from inside and outside by this because you just set up boom, you know, like news sites and so on. You have bureaucrats, lawyers, doctors, artists, the entire blue base of symbol manipulators, college educated, you know, whether you call them midwits or blueberry, you know, that's all just toast, right? They're way overpaid for what they are, arguably, but obviously they don't like that. However, if you go from one American doctor getting $200,000 to a billion people having a doctor on their phone, obviously that's a good trade off, you know, like for the world, right? So it's wealth increasing even though it sucks for let's say the AMA or the USMD or something like that, right? Lots of things are like that where I think they're radically wealth increasing for the world, but they do suck for that demographic that's being disrupted who will then fight them. It's like, but are there any elevator operators anymore? No. Right now up to this point the argument would be, okay, you're just kind of analogizing this to all past industrial disruptions. And it is true that after a period of political chaos there was a rebalancing. But this is different because it's actually brains, right? It's actually like human beings. And then people could be long term unemployed and so on. It's possible. But we do have VR, we do have drones that are doing farming and construction and so on and so forth. So cost of actually living may be less and less and less. Right? I mean, in a sense, like we've rebalanced to the point that most humans, they're not farming, they're not mining, they're not manufacturing, they're not like doing construction. I don't know what fraction of, but most people in Western countries, I don't know if it's, it's definitely not even close to 10% that are doing farming. It's all automated, right? So then you kind of move up the value chain to other kinds of things. Maybe there's a lot of people going into space exploration, right? Maybe there's oceanic exploration, maybe there's people working on math and there's, you know, what kinds of jobs exist after that? It's always difficult to say. But I do think there's going to be a lot of jobs that are in proctoring and verification. So like AI increases Productivity in many areas, but also increases the fake fakeness. Right, lots of fakeness, many different kinds of fakes. So you're going to need much more effort on proctoring, on verification, on having people check up on things. Like someone goes to a house and checks, is that house actually exist or was an AI image that was uploaded. Right. That's almost like a security guard type job, proctoring and verification. I think we'll see a 10x. It's kind of a combination of KYC and Captchas and so on and so forth. But Captcha is just for everything.
- [127:37]
B
Well, I was going to say. So this is really going to be a problem for if you're 45 to 55 years old because how do you become an AI native? But if you're 25 years old, you just need to become an AI native.
- [127:50]
A
Yes. Well, I am 46, by the way.
- [127:52]
B
I am 47.
- [127:54]
A
All right, there we go. So we're, we're able to adapt somehow. But. Yeah, I mean, look, but we see it coming. Huh?
- [128:01]
B
We see it coming. It's part of, it's part of what we do anyway.
- [128:05]
A
That's right. We process this stuff for a living. It's not like I'm unsympathetic to it. Of course I'm sympathetic. And like, I also think, by the way, in a sense the reason Red America, blue America, Gray America, which is tech America, are all just going to basically blow each other up is blue America is targeting tech America with wealth taxes and it's targeting red America by basically allying with China. The nationalism tax. They're literally giving land to China, which is the thing that. So the tech guys prize their technology and wealth the most and the red Americans prize their country and their borders the most. And blue Americans are trying to take away the wealth and the tech from the tech guys and they're trying to take away the land and the borders from the red Americans. I think they'll probably be successful in that the red Americans are targeting the blue Americans NGOs and their international standing and all of these organizations like Trump is basically withdrawing America from all kinds of stuff from this UN body and that alliance and all this stuff. The diplomats, the American diplomats, the blues, when they were competent, set up this whole web of global alliances and you know, it's like to get 180 countries to sign off on something is not a trivial thing at all to do. It's like imagine getting 180 investors to sign something. Not easy. American diplomats twisted arms and got all kinds of Things to happen and set up the American empire. And Trump is just dismantling that. And he's also dismantling the US Universities and so on and so forth. And I get that, you know, like, I get why. But he's going after Red America, is going after the things Blue America holds most precious. And Tech America is doing the same to Blue America. Why? The part that we just talked about. So what, what Red America is doing is they're doing the nationalism tax on Blue America. They're saying America is a country, it's not an empire. And they're taking away all the Blue American diplomatic relationships and the research universities and soft power and presses, Blues Prize. And Tech America is taking away, as I said, the media, the money. Right. And so it's AI tax on. On Blue America. Right. And then finally, Red America is taking away the talent that streams into the US From Tech America because it is imposing, you know, visa bans and so on and so forth. Right. And Tech America is outsourcing jobs and redecentralizing around the rest of the world. And so it's the internationalism tax on Red America, like, you know, opening up. Why? Because there is a lot of talent in India. There is, like, it's not. There's a lot of smart people there who are finally online. You know, if you don't get that talent, your competitors will and we're, you know, then, then people will lose money. And, you know, as a capitalist, I will tap that talent. Just like I will hire. You know, I've got guys here from Indiana and I've got guys from India. I just, like, as a meritocrat, I just take people globally. Yeah. So all, all three of these factions, Blues are wealth taxing tech, and they
- [131:02]
B
are
- [131:04]
A
communism taxing Republicans. Republicans. Reds are nationalism taxing blues and they are talent taxing tech. And tech is internationalism taxing reds, and they are AI taxing blues. Right. It's like, think of it as a jobs tax. That tech is just like. Blue's attacking tech with a wealth tax. Tech is attacking blue with a jobs tax.
- [131:32]
B
Okay, Right.
- [131:33]
A
Like AI is disrupting their jobs. Right. So go ahead.
- [131:36]
B
Well, but doesn't all of this just shine a bigger light on the 175 trillion of debt and that's going to be the major problem.
- [131:45]
A
That's right. So what's going to happen, in my view, is like, I mean, when the Soviet Union fell. See, one of the problems is iron Americans just truly don't know the history of anything other than like 1945 1865, 1776 and that's about it. American history. Yeah, American history. And even then only like a very like a potted plant version of American history, which is only like kind of the most propaganda laden points. Right. A lot of the subtleties, reversals, other kinds of lessons. And the reason to study history is the same reason people run fluid in a tank to study fluid mechanics. They just have different configurations and you can see the eddies and the currents and the turbulence and so on and so forth. That's what history is. It's a cryptic epic of twisting trajectories. It's not just like an arc like this. There's like corkscrews and things that happen. And the reason study historical scenarios is in many ways you can think about America from the standpoint of Soviet Russia towards the end, or China's warlord era, or India's partition, or South Africa's Balkanization and so on. So the end of the Soviet Union is probably the best analogy where we think of the Soviet Union as breaking up on primarily economic grounds because communism didn't work. But actually nationalist movements were a huge part at the end of the Soviet Union. The Russians felt they were bearing the burdens of empire and the Estonians and Poles felt that they were oppressed by the Russians. And it's a lot like white Americans and non white Americans are wokes and magas feeling each is oppressing the other and wanting to break up. Right. And there's also obviously an economic reason which is Estonia broke away first from the Soviet Union. And when they did, guess what their big gift was? They didn't inherit the debt. Ah, the Soviet Union. And it's very possible, by the way, sometimes the bad guys win. Okay, it's very possible that the democrats secede first. There's a whole thing called soft secession, Right. Like you know how only Nixon could go to China?
- [133:57]
B
Right.
- [133:58]
A
Like only Nixon, you know, Republican had enough support in his right to go and talk to stuff. A leftist could succeed S E C C E D E Because there'd be enough rightists who would support that that they have enough. If they got leftists to go for it, then they might be able to do it. So very possible. You see blue state secession. There's a whole article that went super viral called the blue state soft secession. And if they did that, the big thing Estonia got is they didn't inherit the debt of the Soviet Union, Russia did. So Russia had such a tough time afterwards. They were like 140 million from 280 million. And everybody was mad at them and they had all this chaos and they had to rebuild their whole country amidst all of this debt and so on and so forth. Because the Russians are like the magus, right? They were like, you know, they knew on some level that they had invaded a bunch of countries and so on. They were sort of proud of their empire, the military staspics. But they hated the leftism towards the end. They hated the fact that it oppressed so many of their people. They're sort of proud of it. Like this weird contradiction things like, you know, and they also hated the fact that all these Near Eastern peoples that they had dominated were now like a pain in the ass for them. But they were also mad at communism. It was a complicated thing at the end of the Soviet Union. It's not like one story, lots of faults to go around, right? But ultimately they were like the Russian Ivans and this was their land, right? And so the magas are like that, you know, this is America, this is our land and so on, right? Now, by the way, you can even argue it's. It's maybe half their land, right? Because the Massachusetts type of person, the leftist American, is also half of America. The blue American has always been half. The mag is like more like the Virginian, Appalachian, you know, like people al BNC talks about four folkways and roughly the left, modern left is from Massachusetts and Pennsylvania, you know, the, the Puritans and the Quakers. And the modern American right descends ideologically from the Virginians and the Appalachians, right? The Cavaliers and the Scots, Irish or whatever, right? So point being that it's very possible blue, blue states break away. And if so, if they break away first, they don't have the debt of America, right? Like if, if 49 states are there, the other 51 state breaks away, let's say California or something like that. All the other governments in the world will probably recognize California as not inheriting the debt. California has its own debts, perhaps, but doesn't inherit the debt of America, right? Florida is actually perhaps also very well positioned to this because it's got its own port. Texas is positioned to do this. I don't know which one breaks away first, but I think it's likely that that happens at some point simply because the incentive to secede is actually very high. Economically, you've got a clean slate, right? The other thing is, I think, you know, you know, the NPC meme, non player character memes. The thing is that Democrats have one advantage, which is they just mindlessly follow whatever the party tells them to do that is an advantage when it is the Chinese telling them what to do because the Chinese are actually competent. And so like if the Chinese are upstream, then maybe the Democrat regions, actually it's very hard for me to predict. It might be some, some work and some don't. Right. Maybe Carney's Chinese. Canada is more functional, but like Chinese California is more like Venezuela. Hard to say. Okay. Very hard to say until it actually happens. But the fact that Democrats will just obey the party means they'll snap in to grid. You'll need adapter layers, guys like Newsom or Carney who speak both Canadian and Chinese or speak both Californian and Chinese. Right. But there's enough of those in the Democrat party to do it. And I think that is probably what happens on the Democrat side. On the Republican side, I think they turn towards Latin America. Miami, Texas culture of, you know, it's the sun, it's being physically strong. It's, you know, really, it's beauty, it's strength. It's also an anti intellectual culture in many ways. Right. There will be tech, there's techno capitalism there, but it's like very focused on aesthetics, on health. Very different than the cold, rainy, you know, Northeastern, like the Seattle, Canada. Yeah, go ahead.
- [138:42]
B
Seattle. I just said Seattle, right?
- [138:45]
A
Yes. That whole culture is going to be very different than this sun belt kind of culture. Right. Why do we get on that? We got on that because. Oh yeah. Self disrupting, right?
- [138:54]
B
Yeah, yeah, yeah. I just wanted to know what you would think of that. Just one last thing. Because of your time and we. Which how much do you think about AI safety?
- [139:07]
A
I think that killer AI already exists and it's called drones. And both China and the US are working hard on that and so are many other countries. Right. And I think that the entire framework of AI safety turned out to be interestingly wrong, but wrong. So just to recap, the AI safety concept was if we summon an all powerful, all knowing AGI, then it needs to be aligned with humanity because it can outthink us and destroy us. And it was essentially like if we summon God or a demon, it'll be so much smarter than us, it'll tell us what to do and so on and so forth. Right. That is actually not what happened. I think that was what motivated people to do it. But it's not what's happened, it's not what's happening. First, instead of a monotheistic Abrahamic AI, the all seeing, all knowing God, we got polytheistic AI with many different models being Dropped all the time that each have their own style, and so on and so forth. And so at first it looked like the capex to do AI was so high that only ChatGPT or OpenAI would do it. And then everybody caught up in a year or two. Right now you have polytheistic AI, and moreover, the models are actually starting to flatten out. It's like Opus 4.6, Codex 5.3. The models themselves are not radically improving anymore. The deployment of them is. And that's still going to be a very big thing, don't get me wrong. But it's not like. I'm sorry I put this. It is not summoning something that's above you, it's summoning something that's below you. Right. The way I put it is, especially in China, Chinese Communism is much more likely to create AI slaves than AI gods. Okay? Right. Their robots, like, they don't let their humans get out of line. So their robots will definitely not get out of line. Right. They'll have all kinds of shutoff switches and so on and so forth to make sure that's all under party control. Right. They're very technically competent. They'll be absolutely sure of that. And they're going to make most of the robots.
- [141:20]
B
Right.
- [141:21]
A
So killer AI is already here. It's called drones. And who makes the drones? Mostly China. Right. And they're all going to be under Chinese kill switches, or, you know, in both sense of the term and more generally. Prompting is like a harness for a horse. It's like a leash for a dog. It's like a steering wheel for a car.
- [141:37]
B
Right.
- [141:37]
A
It's a control panel. It's a control plane by which you give instructions to the thing to have it go in the direction you want to. For a variety of reasons. An AI that can't be prompted is not an AI that's economically useful. Unless you as a human can be like, halt, continue, stop, reverse, et cetera, et cetera. Unless you can give it these instructions, it's not actually economically useful, which means there will probably always be a human owner prompter controller for both security reasons and economic reasons. Like, the whole point of what we've been doing over the last few years, AI alignment has been making this robot do exactly what you want, when you want to do it. Right. So the initial fear was of AI gods, but especially because of Chinese Communism, Chinese Communist is more likely to create AI slaves. Okay. I know. It's okay. So the fears that people have. Go ahead.
- [142:36]
B
No, no, I'm just listening. It's great.
- [142:39]
A
It's interesting, right? So it's just turning out somewhat different. Rather than monotheistic, polytheistic, rather than above, below.
- [142:47]
B
Right.
- [142:47]
A
Rather than giving us direction, taking direction, like in a sense, there's another aspect which is AI isn't taking your job. AI is turning you into the CEO. Actually. That's a great tweet. Right? You get it?
- [143:04]
B
Yeah.
- [143:04]
A
Turning into the CEO. Go ahead.
- [143:06]
B
Yeah. Because you're in charge. You're running the AI like you're the prompter.
- [143:09]
A
You think you can be a great CEO? AI, AI says prove it. Prove it. Right.
- [143:14]
B
When do you get the first person, like single person unicorn, where everybody else who works for it's an agent. How far are we off on that?
- [143:21]
A
Literally the means of production have been put in your hands.
- [143:24]
B
Right.
- [143:25]
A
If you think you'd be a great founder, a great CEO, it's being hyper deflated. The global talent search has begun. Right. You don't need any money, basically. Literally, if you have a computer, if you're looking online, actually that's a great, that's, that's a great one line. I'm going to tweet that it doesn't take your job. Air turns you into the CEO.
- [143:43]
B
If you're ready to take it. If you're ready to take it, you're ready to be.
- [143:47]
A
Exactly. That's, that's right. Now it's just a reframe, right? You're the CEO now, in a sense. Now should everybody be CEO? No. However. However, I do think that there is a much larger group of people if you take away the capital cost of doing it. Because there is a lot of talent out there, right. Like, look, if you look at tech, I mean, Bezos, Elon, these guys did not come from wealth, right? This is what Jefferson calls the natural aristocracy. Calendly founder came into Nigeria, you know, you have founders from like, you know, all kinds of places around the world, right. Random places, right. So guys from Midwest, like Andreessen, you have people, I'm sure from rural areas in England or like the uk. You have people from all over, right? So the Internet to me is leveling egalitarianism in a good way. Equality of opportunity, the sky hook for anybody who wants to do it. Right. So another aspect of things is AI doesn't take your job. It takes the job of the previous AI. Why you had some video model, guess what, you swap it out, boom, goodbye. I don't know, like cling, hello, sea dance. Right? You know, goodbye, chatgpt, hello, midjourney or whatever. And it Keeps swapping out like this. These guys are in this relentless race with each other, you know. Moreover, all the concern about centralization of AI, it's almost opposite. RX is decentralization, right? Another thing about this is AI safety. The people who kind of talked about it would kind of assume that AI safety meant alignment and alignment meant under their control, right? Only they, the EAs were going to be able to control it. And it was essentially a argument for centralized control by the US government, which they would control and be the ethicist or whatever, whatever. But we've fortunately gotten a very different version which is everybody has AIs. And so rather than like, like a, like an Abrahamic God turning you into a pillar of salt or paperclips, which is kind of what people thought, instead you have War of the Gods, right? You have this AI controlling these robots and that AI controlling these robots and this human and that human, right? So you have something which is like everybody levels up. It's like everybody gets a rifle, right? Everybody has. Every civilization of sufficient scale has their own social media cryptocurrency and AI at the core of what they do, right? The AI is almost like their oracle. It's like what would Lee Kuan Yew do? What would Jesus do? What would Churchill do? What would so and so do? You can actually literally animate them and in full video and what have you. They can speak to you from their old writings and so and so forth. Yes, it's AI version, but it's interesting and I think something like that are done in a really quality way, could be interesting, speak with ancient philosophers and so on and so forth. So now the thing about it is like a is very unpredictable. But I do think. That one of the best things you can do is liquidate, immigrate, accelerate and reduce your cost structure. Like that's the thing about China and Asia, it's cheap. If you're on like a West, if you manage to liquidate, immigrate before the west goes to zero, it's like getting your money out of FTX before it collapses, right. I think you'll do fine.
- [147:15]
B
Right.
- [147:16]
A
The main thing is obviously that's not a solution for everybody, but if the top, I don't know, 100,000 or whatever people do it, then you know. You know what foundation is?
- [147:26]
B
What, the TV show?
- [147:28]
A
No, it's a. Well, actually I guess it's not device. So the Isaac Asimov series of books called foundation that they made into a TV show is much better as books. So the idea was the Galactic empire is going to collapse. So build a school on the edge of empire to rebuild. And why a school? Because wealth is kind of trans turing so on. But knowledge is permanent. And with knowledge we can rebuild. I mean, one of the great things is, yes, I think there's going to be a collapse, but we'll have drone construction, we'll have solar, we'll have working nuclear. This massive technological advance. So if we take the L, we might be able to rebuild an Internet speed maybe in a decade or two decades. If Deng Xiaoping was able to build China into what it is in 40, 50 years. If Google was being able to build what it is in 20 years. Right. OpenAI in 10 years, you know, Coinbase in about 10 years. You know, I think once we embrace Internet first, like, your state may fail, but the Internet will be there for you.
- [148:38]
B
So is foundation network state, or is network state? Foundation.
- [148:42]
A
Network school is like foundation.
- [148:43]
B
It's foundation. Yeah.
- [148:44]
A
Network, Network school. Network school is to network state as like Chinatown is to China. So, like, if China didn't exist. Right. So Chinatown is just like a themed thing, Right? So network school is like, how do we start new societies? So people should come and visit ns.com. we've got lots of Brits out here, lots of Europeans, lots of, you know, freedom people. But they're pragmatists, right? Like, they're pro civilization. You know, as I said, like I mentioned, I said this to Verhees several years ago, but I still like it. I understand crypto anarchy, but I believe in crypto civilization.
- [149:20]
B
That's a great place to end it. Balaji. I don't know how many times we've done this over the years. Five, six, seven times. But I'm always left with a lot to think about. We're gonna have a good car journey home. Talking about this. Liquidate, immigrate, accelerate. That's a pretty good show title as well. Balaji, man, thank you so much. I really appreciate it. By the way, that's what you gone.
- [149:45]
A
Go ahead.
- [149:47]
B
I was gonna say, I know, that's
- [149:48]
A
what I know how you did Elon Bezos.
- [149:51]
B
Yeah, I know how you did eight Hours now with Lex Friedman.
- [149:57]
A
Well, it's always a pleasure, Peter. And you know, I want to say I wish the best for you and your audience and everybody, you know, I, I, it is. I, I, I want to just sound and notice, like, I notice sympathy, because when you or I digest all this content that's coming towards us, you know, like the endless onrush, I mean, I'm like pretty good at software, you're pretty good at media and so and so forth. And I have to like spend time and energy processing the sheer rate at which these things are going. And there's a real temptation. I can understand how many people just want to try to ignore it and just, you know, like. Or. Or they get completely discombobulated by it. Right. And I think we want to figure out how people can ride the lightning. And the way you can ride the lightning is get to an ascending world location. That's my view.
- [150:49]
B
This is the burden of the male brain. I've got a video I'm going to send you later that I think you'll appreciate, but thank you, man. I want to get back out and come and see because I've been out to network school in.
- [151:02]
A
It's grown a lot.
- [151:03]
B
Yeah. And we had a great time. We weirded out on the first day. We're like, what's going on here? And then within a couple of days we're like, I don't want to leave. I love it here. So, yeah, we'll come out again, come back. But thank you, everyone. Check it out. Also check out B's Book Network State. It's a fantastic book. And we will see you all soon.
- [151:19]
A
Okay, Peace out. Thank. You.