Economic Espionage and War Crimes: How Money Wins the War | Graham Moore PT 1

Summary

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Podcast Summary: Economic Espionage and War Crimes: How Money Wins the War | Impact Theory with Graham Moore (Pt. 1)

Date: July 16, 2024
Host: Tom Bilyeu
Guest: Graham Moore, novelist and author of "The Wealth of Shadows"

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Episode Overview

In this engaging episode, Tom Bilyeu sits down with novelist Graham Moore to explore the hidden financial battles of World War II and draw provocative parallels to modern economic warfare, especially in the context of the Russia-Ukraine conflict. The conversation moves beyond history, delving deep into the ethics of government secrecy, the mechanics of money, the reality of the "deep state," and whether currency should be in the hands of governments.

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Key Discussion Points & Insights

1. The Unseen Economic War Against the Nazis

• How the US "beat" the Nazis with money
  • Moore explains how a small, mostly unknown group within the US Treasury launched covert economic warfare before any formal military engagement, upending the Nazi war effort.
  • Despite overwhelming public aversion to entering the war (only 2% of Americans in 1939 supported military involvement; [03:11]), these Treasury economists clandestinely cut Germany off from critical resources and international markets.
  • Quote: “The German economy is built around having a slave class and conquest…if the Nazi war machine were to stop conquering…the entire Nazi economy would collapse.” —Graham Moore [05:13]

2. Economic Warfare—Then and Now

• Historical techniques meet modern conflict

  • Moore and Bilyeu underline how “economic warfare” was essentially invented to fight the Nazis and is now used against modern adversaries like Russia ([08:57]).
  • The conversation details Nazi strategies: creating a closed circular economy, restricting withdrawals to fund war efforts, and the necessity to perpetually conquer for economic survival.
  • Parallels are drawn to how Russia has "prepared" for Western sanctions (stockpiling dollar and oil reserves), rendering sanctions less effective.

• Quote: “The set of techniques that the US and EU have been using against Russia are essentially the modern versions of what was developed by these Treasury folks in 1939.” —Graham Moore [09:24]

3. Morality and the "Deep State": Internal Government Wars

• The Deep State: A Virtue or a Bug?
  • Tom brings up the idea of government being split among competing bureaucratic factions, referencing Moore’s book: “The idea of a ‘deep state’ is a wiser way to look at it…” ([14:21])
  • Moore clarifies the term is loaded but accurate: multiple internal factions worked at odds—some in Treasury broke official neutrality to battle the Nazis, others in State sympathized with the Axis ([18:00]).
  • Quote: “You have a government at war with itself. And I might argue that’s not a bug, it’s a feature." —Graham Moore [20:49]

4. Ethics of Secrecy and Lying for ‘Good’ Causes

• Is it just to lie for the greater good?
  • Tom asks if it’s ever moral for governments to lie to citizens if righteous outcomes are achieved ([23:08]).
  • Moore responds candidly: he believes it was “absolutely the right thing to do” in the context of WWII, but acknowledges the slippery slope—“Anyone who ever lied can say, ‘but it was for the greater good’...” ([24:56])
  • Quote: “In these cases, I think they were right to lie. But that’s really easy for me to say, because it worked.” —Graham Moore [27:08]

5. Who Decides? Democracy, Technocracy, or Bureaucracy?

• The Dilemma of Public Involvement
  • Tom provocatively wonders if real-time referenda (via blockchain, smartphones) would produce better governance, but questions if the public can ever be fully informed or immune to manipulation ([35:30]).
  • Moore insists some decisions (e.g., central bank interest rates) are too complex for public input, requiring layers of technical expertise and trust in appointees ([39:07]).
  • Quote: “You can't poll a population about a question as complicated as where to set interest rates...People have lives.” —Graham Moore [40:20]

6. Money as Tool, Fiction, and Weapon

• Money: Manipulated or Managed?
  • Tom rails against government money printing as legalized theft, especially when spent without productive output ([42:25]).
  • Moore provides Keynesian and anthropological perspectives: money is fundamentally a social tool, rooted in trust, and must be manipulated/managed—but always by someone ([44:52], [49:48]).
  • Quote: “Unless you want a fixed quantity of money forever ... all currencies are, by definition, manipulatable. They were created to be manipulated.” —Graham Moore [45:13]

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Notable Quotes & Memorable Moments

• Tom on the deep state:
  “The government is actually made up of people with competing ideologies that are going to war with each other inside the government to pull historical events in a given direction.” [15:18]

• Moore on post-facto moral clarity:
  “Do we only have the ability to evaluate the morality of that post-facto? In this case, Treasury were the heroes. But they were both making the calculation: the government’s policy is wrong, so we’re just going to do what we think is right.” [20:49]

• On referendums and media manipulation:
  “You would have to commit to complete and utter transparency and let the chips fall where they may. But right now...it's a bunch of lies.” —Tom [36:55]

• On Keynes and economic invention:
  “John Maynard Keynes...was not just an influential economist, he almost invented the field of economic training as we understand it today.” —Graham Moore [74:07]

• Moore on money’s origins & society:
  “We've never found evidence of any human civilization that didn’t have money. Money predates written language. Money is as old as belief in God.” [96:43]

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Important Timestamps

• [01:33] - Introduction of Graham Moore and the central question: How did the US defeat the Nazis before firing a shot?
• [03:17] - US neutrality and startlingly low support for intervention, even knowing about the Nazis’ atrocities.
• [08:57] - Economic warfare against Nazi Germany; modern parallels to sanctions against Russia.
• [14:21] - Discussion of the “deep state” and government factions working at cross-purposes.
• [18:00] - Intra-government struggle: Treasury's secret war vs. State's Nazi sympathizers.
• [23:08] - Moral complexities: Is it just to lie to the public?
• [35:30] - Dilemmas of transparency, real-time democracy, and media manipulation.
• [42:25] - Ethics and effects of monetary policy: is money-printing theft?
• [44:52] - Keynes, Bancor, and the premise that all currency is manipulatable.
• [74:07] - Brief biography of John Maynard Keynes.
• [94:03] - The Keynesian defense of fiat money: If we can do it, we can afford it.

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Thematic Takeaways

- History Rhymes:

Moore and Bilyeu repeatedly map WWII economic tactics directly onto contemporary geopolitics, especially the economic war with Russia.

- Government is Always at War (With Itself):

The inside story of WWII (and by extension, today’s governments) is one of relentless infighting, covert subversion, and complex moral calculations among competing factions.

- The Ethics of Power:

Both agree that government operates in a perpetual gray zone, where secrecy and control are wielded for both noble and ignoble purposes—raising enduring questions about transparency, democracy, and trust.

- Money: Tool or Trap?

Fiat currency, whether in paper, digital, or theoretical bancor form, is inherently manipulative. The central debate is not if, but who should control it, with strong warnings against both unchecked government power and unworkable populist alternatives.

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Final Segment: Looking Back To See Forward

Tom closes by explaining his approach: reading Moore’s book to draw lessons for modern conflicts, mapping historical frames for better future predictions. Moore affirms that cultural and value-based context inevitably shapes politics, government action, and citizen perception.

Tom: “Before The Wealth of Shadows, and after.” [61:55]

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For listeners:
This episode offers a gripping, accessible look at how money, power, and morality intersect in historical and current events—essential for anyone wishing to understand the true machinery behind headlines, wars, and the fate of nations.

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Transcript

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[Graham Moore]

We have never found any evidence of any human civilization that didn't have money. Money predates written language. Money is as old as belief in God, as like people staring into the stars and wondering what's out there. I think of course there are Chinese spies in the US government, there are Russian spies, even our allies. In 1951, Alan Turing went on a lecture tour of the UK where he was arguing that super intelligent AGI was months away. He was wrong.

[Tom (Interviewer)]

Graham Moore, welcome to the show.

[Graham Moore]

Thank you so much for having me. Tom.

[Tom (Interviewer)]

I'm really excited to have you. You've written a fascinating book about a period in time that I'm obsessed with, which is World War II. The book the wealth of Shadows is about how economics were used to break the back of the Nazi war machine. I think there are fascinating parallels to what's going on today, especially in Ukraine and Russia. And I'm curious, how did the US end up beating the Nazis before they ever fired a shot?

[Graham Moore]

I think that the US ended up beating the Nazis long before firing a shot, thanks to a largely unheralded group of economists working under the auspices of the U.S. treasury Department. And that's what the book is really about. I think in starting in 1939, even after Germany had invaded Poland, there was this period where the United States was not just neutral in what we considered sort of this European dispute, but the United States was assiduously neutral, sort of passionately neutral. I talk about this in the book, but in 1939, even after the invasion of Poland, there was polling done and 12% of Americans wanted to get involved in what they called the European dispute. The percentage of Americans who wanted to get involved militarily was 2%. It was politically toxic for the Roosevelt administration to not just wage any kind of war against the Nazis, but to even do anything that vaguely looked like what they were doing was waging war against the Nazis.

[Tom (Interviewer)]

What year was that poll taken?

[Graham Moore]

39.

[Tom (Interviewer)]

So they already know about concentration camps at this point. They know the horrific conditions and yet it was still that unpopular.

[Graham Moore]

That's absolutely right. And when I found those numbers, I was shocked by how small they were. It was really the common feeling was, this is a European thing. Okay, Germany invaded Poland. It's complicated, yes. Czechoslovakia, it's complicated. They're not, okay, the UK is going to war, okay, France is going to war, but this is their problem. This is not our problem. This is not our problem. This is not our problem. And yet there was this group of economists and even sort of largely amateur economists working for the Treasury Department who this book is about. And these people said, no. The U.S. had passed a neutrality act, so doing anything to help the British against the Nazis or to help the French against the Nazis was illegal. I mean, it was counter to government policy. And these people at treasury said, no, we're not doing that. This is really bad. The Nazi threat is not going to stop. It's not going to stop at Poland, it's not going to stop at Britain, it's not going to stop at France. This is going to keep happening.

[Tom (Interviewer)]

Why were they so confident about that?

[Graham Moore]

Because a number of things. So one of the things that I think they had done and that we've certainly been able to prove since is that they'd done analysis of the German war operation. And what they found was that the entire German economy had been restructured around the making of war. That is the German government, the Nazi government had completely structured its natural economy to produce one output and that output was war. Everything is a very kind of centrally planned economy. They were no secret that Nazi stands for sort of I can't speak German. If I try to do the German, it'll be a disaster. But sort of National Socialist Party of Germany, the politics of it were complicated. This kind of extreme sort of right wing socialism mix that was quite statist. What the Americans had done is we'd sort of looked at this and said, this isn't going to stop. This is a real threat. And the Germans couldn't stop even if they wanted to. The German economy is built around a couple things. It's built around one, having a slave class of Jews to perform unpaid labor. And it's built around conquest. It's built around taking new lands where they can acquire new raw materials, new money, and frankly, more slaves. And if the Nazi war machine were to stop conquering, were to stop taking new territory, the entire Nazi economy would collapse. And so any idea that they're going to stop at Czechoslovakia is ridiculous. Any idea that they're going to stop at Poland is ridiculous. Any idea that they're going to stop at France is ridiculous. This is a machine built to take land and built to steal raw materials and capture slaves. And it's going to keep doing that until one of two things happen. Either they consume the entire world or someone stops them. And so what this book is about, what the wealth of Shadows is about, is about this group of folks at treasury who said, okay, we're going to be the ones to stop them.

[Tom (Interviewer)]

It's a really interesting moment in the book that you tell of an economist who's basically looking at a spreadsheet and says, okay, wait a second, how did the Germans go from utterly devastated by the Treaty of Versailles? Just demolished, demolished by that, demolished by the Great Depression. And now all of a sudden, in the span of a very short number of years, like two, they roar back to life with all the sanctions that say they can't build this, they can't build that because they didn't want them to rearm themselves. And you get this economist who looks at the spreadsheet and goes, they've created. It's quite brilliant. And this is where it starts to get very unnerving for me as somebody who studies the economy. The Germans found a way basically to create a circular economy that was completely contained within Germany. So you would sell war bonds to your farmers or whatever, promise them a return, but to avoid inflation, tell them, ah, first of all, it won't pay off for a few years. And second of all, even when it does, I'm going to restrict the amount that you can take out. But everybody's super excited because they see their net worth going up, even though in reality they're not being allowed to spend it. And the only way that they can keep the inflation from going crazy, since they don't have economic output that they're selling because it's all internal, is to your point, we have to go to the next conquest and on and on and on. And that totality is what I worry about today. And so when you look at how they used economics, they tried to cut Germany off from the international money supply, they went to Brazil and Tried to buy up all the iron and cotton to make sure they couldn't make bullets and uniforms. So they're doing all of these economic things. But what does that tell us about what's likely going on today when we look at how we're positioning ourselves against Russia with Ukraine? Technically we're not in the fight, but we're doing these economic things. What's your read on that?

[Graham Moore]

So it's a great question and my read is that the set of techniques that the United States and the European Union have been using against Russia these past few years are essentially the modern versions of a set of techniques developed by this group of people at treasury in 1939. This was a set of techniques that we now call economic warfare that really was developed in the late 30s and early 40s. I don't think it had, I would argue it hadn't really, that economic warfare hadn't really been tried before this people sanctions existed. But sanctions are a very small part of I think, the economic warfare package that's presently being used. And it was certainly being used in the 30s and 40s because as just as you're saying, I think a big part of the anti Nazi economic warfare of 39, 40 and 41 and of what the US and the EU are doing against the Russian government today is trying to sever, trying to sever those economies from the rest of the world. The problem is both the German economists in the 30s and the Russian economists in the last decade prepared for this. And I think we can see, I mean one of the other eerie corollaries between the late 30s and now is. So you were just talking about this period in the mid-30s where the brilliant German economists sort of rebuilt the German economy from nothing. After Versailles, Germany had. It's no secret that they were kind of doomed to decades of poverty thanks to these crushing sanctions, 60s, crushing debts. After the war, Germany in the early 30s was this economic backwater water. By 38, 39, they'd built the largest military in the world in just as you said, only a few years. How did they do it? It was pretty brilliant and I suppose it doesn't need clarifying that it's brilliant evil because as I said, the slave class was an important part of that operation. It doesn't work without essentially these work camps of forced labor. But as you're saying, they developed this complicated bond system to effectively make it look kind of funnel more and more of what was effectively German GDP into the military than it looked like they were doing. The term GDP didn't Quite exist yet. And actually we get into that in the book. It was sort of being invented around the same time, but basically a significant percentage of everyone's labor and everyone's money in Germany was getting put into the war machine. It than appeared to be going to it. But at the same time, everyone was putting their money in the banks. The banks were sort of, to simplify, the banks were secretly funneling that money to the German military. But it looked like everyone would check their bank deposit books and they had all this money in the bank and they were making all these returns. And banks were offering 4%, 5% returns in these checking accounts. Which looked for Germany at the time was wildly high. It looked great. Everyone was sort of looking. Everyone thought they were getting rich. Only just as you pointed out, there was one trick. They couldn't withdraw the money. The German government had passed a set of laws such that it was against the law to withdraw too much money from your checking account. But then again, why would you. Because leaving the money there made it grow. And you kept getting these statements that made it look like it was growing. In a sense, it was some bizarre combination of like Ponzi scheme and kind of wild military expansion. But at the same time, the Germans knew that with a coming war, they needed to create this autarkic system. They needed to sever the German economy from the rest of the world because they were going to soon enough. They were going to go to war with the rest of Europe and the rest of the world. They were going to then not be able to trade with those countries. They needed to. They knew that they weren't going to be able to trade in dollars very soon. They weren't going to be able to trade in sterling very soon. They weren't going to be able to trade in francs very soon. When they started going to war with the countries producing those currencies. So they began this process of trying to sort of sever themselves from the global economy. Now, if you look at the last 10 years, you can certainly see a set of Russian economists doing the exact same thing. You can see them understanding that they don't need to keep. Well, they've done a couple of other things. They kept pretty significant. The Russians, I guess, in contrast to the Germans, I should clarify, have kept quite extensive dollar reserves. And at the same time they have something even more valuable, which is they have oil reserves which allows them to acquire dollars or other currencies on the global market and kind of keep trading with enough of the world that even if the US Shuts them off and says, we're not going to trade with you anymore. Even if the EU shuts them off and says, we're not going to trade with you anymore, other places will. And so you see a kind of preparation. What you find is that in both the 30s and in the last decade is that the economists were planning for the war many years before the military was.

[Tom (Interviewer)]

What I find most interesting about your book is there's this sense of, um, we have a moral agenda and we're going to weaponize money as a way to get this done. And before reading your book, I would have agreed with the sentiment of, when you look at a government, you should say, look, it's hard to get things done because there's this managerial class. It's bureaucrats pushing paper, and they bog things down. But reading your book, I would say this is a contentious statement, but the idea of a deep state is a wiser way to look at it because there are people in the government working at intentional cross purposes to the state admission of the President of the National Declaration of Neutrality. You have in your book, again, the book is based on a true story.

[Graham Moore]

That's right.

[Tom (Interviewer)]

One of the true stories is that the guy running the Treasury Department that's in charge of this war effort is also a Russian spy. And so I was like, whoa. It gave this sense of the government is not a bunch of bumbling bureaucrats. The government is actually made up of people with competing ideologies that are going to war with each other inside the government itself to pull historical events in a given direction. And then that sets the stage for we are maybe not at maximum division because we're not in a civil war and we know we've had one. So there is worse places to be than where we are now.

[Graham Moore]

Well put.

[Tom (Interviewer)]

But we are at a time of very heightened division, which tells me within the government there will be massive division. And then we have our former presidents stating, hey, there's a very bad thing happening inside the government, which is that they were pulling in directions that I did not want them pulling in. And so I look at divided sentiment over Russia, Ukraine. I look at your book and say. I mean, I look at your book and I say, there is a very complicated thing happening in terms of what I'll round to the deep state. And so what do you think becomes the outcome of this reality of how governments operate in today's context?

[Graham Moore]

I feel like in some ways you're burying the lead here because I feel like you're saying that the book has sold You, Tom on bureaucrats. And I'm proud to say that finally I could be the one to prove the value of bureaucrats the world over. I think, yes, I think. I don't. Yes, the word deep state is a loaded term, but I think it is absolutely true that what this book gets into is that in 39, 40, 41, 42, throughout the war, there were different groups of competing teams of people within the US Government with very different aims from what the government's kind of stated goal was and what the President was saying they were doing.

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[Graham Moore]

So on one side you have while the government, while the Roosevelt administration is saying, we're neutral, we're neutral, we're neutral. To anyone who will listen, we're going to go speech after speech every night about how neutral we are. There's this. At the same time, there's this group at treasury who's saying, yeah, yeah, secretly, what we're going to do is we're going to wage war against the Nazis and we're going to do it because the Nazis are evil and this is the right thing to do. And the war is going to come to our doorstep one day, one day, whether we like it or not. This is going to be our problem. And we're not just going to sit here and watch it happen. We're going to take the fight to them. And we're not soldiers, we're not spies, we're economists. And so we're going to kind of invent this concept of economic warfare and try and kind of kick the legs out from underneath the German economy. At the same time, this team at treasury is doing that. There was another team at the State Department on the other side, which is to say that there was a team of, at best, fascist sympathizers in the State Department. At worst, I would say out and out Nazis. I mean, there were. The State Department was kind of rife with people who were openly supporting the Germans and the Italians against, not just the British and French, but against the Americans. And so you had another, like another deep State operation at State sort of Saying, no, no, we're not neutral, because we should be joining the Nazis. We should be on their side. And we're going to start. We're not just going to kind of try and we're going to do whatever we can to kick the legs out from any kind of pro British or pro French operation that the Roosevelt administration is doing. Because eventually the Roosevelt administration is going to wake up one day and realize that we should be on the side of the Axis. Those are the right. That's the right side to be on here. So in a way, you find it's like multiple deep states, right? You have sort of multiple competing forces within the government with mutually exclusive and incompatible goals. You have a government very much at war with itself. And I might argue that's not a flaw, it's a feature. I think that we. The government's big. The American government's really big. Even in 1939, the American government is really big. And one, there's a reason we have human beings in those jobs, and it's because they're making moral decisions, they're making ethical decisions. And this is certainly a period where you had a bunch of people working for the government who were saying, we don't care what our sort of official policy is. We're just going to do what we believe is the right thing. And I guess the ethically complicated thing is you look back on this and say, okay, in the book, our guys at treasury who are doing this are the heroes because they were doing it on the right side. The guys at the State Department are the villains of the book because they were doing it on what I think we can inarguably say was the wrong side, but they were both making the same calculation, which is the government's policy is wrong. So we're just going to pursue what we think is the right thing to do one way or another, and to hell with the consequences. Would they be the first or the last government bureaucrats to ever do such a thing? Obviously not. And it's funny. It's like, in some ways, do we only have the ability to evaluate the morality of that post facto? Who does it turn out was on the right side of that dispute? In this case, it was the Treasury Department. And I mean, the State Department's behavior was. A lot has been written about this, but it's worse than horrible.

[Tom (Interviewer)]

Okay, so let's start teasing some of these ideas out as guiding principles. So I think a lot of times people will argue a concept at what I call the level of the tea. My audience Will be very familiar with the story. So the biggest fight my wife and I ever got in was over a cup of tea. Two hours into a screaming match, I finally go, there's no way this is about a cup of tea. What is this really about? So we vowed never to argue about the tea again. And so what we found is that you're really arguing about beliefs or values, or you might have what I call as a collision of base assumptions, where you just both have a belief about the way the world works that is completely different. And unless you lay those out, you're gonna just argue past each other. So taking this argument to the level of values, I think will be very interesting. So, for instance, do you think it is morally just to lie to the American people to get a desired global economic outcome?

[Graham Moore]

This is a question for. So in many ways, it's a great question. This is why I like historical fiction. I mean, we sort of talk about this. Why am I writing novels about this and not nonfiction? And it's because I want to be able to tease out exactly the moral question you're asking from the perspective of. From the inner lives, the inner thoughts of the actual human beings in actual history who are facing these very questions. Because they're not simple ones. I think the answer is yes, of course it's the right thing to do. It helps that in the specific cases of government officials lying to pursue the outcomes they wanted, economic or military, in this book, it sure helps that they were on the right side. It sure helps that when Roosevelt himself, much less the rest of his administration, was saying, we're neutral, we're neutral, we're neutral. Did Roosevelt know what the people in his Treasury Department were doing? Not exactly, but I think we have good evidence that. And the book gets into this, that the people at treasury were basically sent Henry Morgenthau, who was the treasury secretary, who was the president's dear friend, to his office, to sort of say to Roosevelt, hey, look, I know we're neutral, but I've got some guys back at the office. They're going to do some stuff. Maybe you don't want to hear about that stuff. And Roosevelt basically put his hands over his ears and said, nah, nah, nah, nah, nah, I'm not listening. You didn't say that. Don't. As long as it never shows up in the newspaper, I never need to hear about it again. And you guys do what you need to do to get the job done. Was he lying to the American people when he then claimed that the United States was perfectly neutral? In this matter of European dispute, yeah, absolutely. He was lying to the American people when he said that. Was it the right thing to do? It sure helps that the Nazis were the worst. Right? That I think we can all agree. It helps that you and I can both sit here today and without making a ton of assumptions, I think I can say that we were both in perfect agreement that he was on the right side of that dispute. Right? That these lies were being told for just outcomes. Defeating the Nazis was a just outcome that we can all look back and certainly support. And if it takes a couple of lies to do that. Okay, look, then the moral question becomes. All right, so then where do you draw that bright line? Because anyone who's ever lied to anyone ever can say, no, no, no, but I was doing it for the greater good. You don't understand. I had to lie. Because it was in your best interest to be lied to after the fact. You know, you can lie to your family, you can lie to your co workers, you can lie to anyone and say, no, no, no, no. I was just protecting you from the worst. Or I was just. I was doing it because if you believed this, then you would do something that made this all work out for the better of us. So I think that's. In some ways, this is a moral question. This is a Shakespearean question, right. More than an economic question. This is a kind of, what do we believe as people in the world about? What are the ethics that guide our behavior towards each other? What sort of little white lies are acceptable? Where is that line crossed? Can we only, you know, are we. Do we want to be perfect, effective altruists or perfect utilitarians and believe that only outcomes matter? It doesn't matter how you get there. The only thing that matters is the effect of your actions. Or do we want to believe, frankly, in a more Christian morality where we're saying, no, no, no intentions matter. It matters what I was trying to do. And if I know that I'm lying to you, that's bad one way or another. So I think in these cases, in the cases that the wealth of Shadows gets into, these characters were right to lie. But that's really easy for me to say because it worked. And if it hadn't worked, or if we were looking back and saying, oh, no, it turned out they were on the wrong side, is that it doesn't work out quite so well, does it? And in this book, we get into the case of a character who is a real person who, as you were just saying, was effectively Applying that same logic to justify being a Soviet spy, which he was. At the same time that he was lying to the American people on behalf of the Treasury Department to defeat the Nazis, he was also lying to the Treasury Department on behalf of the Soviets because he believed that. He believed, correctly, that the Soviets were valuable allies against the Nazis for the United States, and the Roosevelt administration was holding them too much at arm's length. Operation One, from his perspective, was defeat the Nazis. Let's work ever more closely with the Soviets to do that, and we can deal with American Soviet problems later. But so you can kind of see within the book that the logic of. No, no, no, it's okay. I'm just going to lie to the people around me this one time because it's in the best interest for everyone. If you're making that sort of utilitarian argument that what matters is ends and not means, you better be really sure about what those ends are going to be.

[Tom (Interviewer)]

Yes. And the thing that worries me is that no one is ever going to be sure that they're on the right side of history. And the wonderful thing about setting your book at World War II is not only is it a fascinating time period, but there's moral clarity, I would say. And you don't have to do a lot of calculus to be like, hey, the people killing people by the millions in concentration camps, they're the bad guys. But this begs so many questions about how you should approach something like this. So what I want to drill into is, okay, if we know that we're putting a moral question on the table about whether you should be lying to people. If this is a Judeo Christian ethic of like intentions matter. And so lying in and of itself is a problem. Whether this is purely utilitarian, no. As long as we get to the end of stopping Nazis and saving lives, we're good and we can do anything we want, including drop nuclear bombs on Hiroshima and Nagasaki, like, that's fine, because, you know, we ended up saving so many lives by doing that. Okay, the question becomes who gets to make. Who gets to run that moral calculus? Ought it be done by vote, by decree? What's the right answer there? And then who gets to decide what lies to tell?

[Graham Moore]

I mean, certainly when you're talking about a government, as discussed, the government's really big, right? And I think people make the argument right. There's a reason we don't live in a perfectly representative democracy, right? We elect leaders, they appoint lots of people. Most of the government is appointed, not elected. They are in theory, appointed by the people who are elected. And they're going to make many thousands of decisions, tens of thousands of decisions, hundreds of thousands of decisions every day that affect your life, and it affects my life. And they're not going to explain themselves to us as they make all those decisions every single day. Some of those decisions will be relatively minor. Some of those decisions are going to be dropping nuclear weapons on Hiroshima and Nagasaki. And we understand that for the government to work, it's functionally impossible for them to reach out to polling and say, hey, should we drop a nuclear weapon on the city at the tail end of a war? They can't ask that question, right? So on some level, on some level, what I would argue that elections are is. Making decisions about the people whose thought processes and judgment and character. And is this someone, when you're voting for someone, you're saying, is this someone I trust to make it as a bunch of decisions that I'm never going to know about? Because it's certainly the case that I think that anyone in government will say this, that half the important decisions are the decisions that we as citizens don't know about. And you and I see this in our own lives, right. Even taking this out of the context of government, like, you make things, I make things. Half of three quarters of the really important decisions that go into how to make the things that we make aren't necessarily things that the audience is going to know about or hear about. They're not there for that decision making. Right. They're on the outside of it, and they just see the outcome, and they weren't there for all the meetings that kind of went into that process. Right. And that's certainly the case with government. So I think it's. I mean, the United States famously saw this with. With George W. Bush. Right. Who ran on a platform of non intervention, was sort of his. A big campaign plank for him was non intervention in foreign affairs. And we're not going to be sort of policemen of the world, I think he said in a speech at one point. And then, sure enough, what was the sort of defining, defining decision of the George W. Bush administration? Was the invasion of Iraq the exact opposite of the very thing he had campaigned on. Now, one could make the argument that, well, what happened is the world changed and September 11 happened, and he was responding to new information and new events as it was coming in. And I'm not sitting here trying to defend the invasion of Iraq, because I won't. But what we find there is that the most. So that's a presidential administration in which what I think anyone would argue is in which the most significant decision that was made was quite public and was totally contrary to what the election had been about. It was something had happened. And the George W. Bush administration collectively and collectively made a set of decisions about what to do. And that set of decisions involves invading Iraq. Right. And so I think when you're talking about what we want the government to do, what do we want? What do we want? How honest with us do we want the government to be? How, how much do we want the government to sort of stick to their campaign promises or elected officials to stick their campaign promises or if you're asking kind of what elections are really about, in some ways there's this kind of base lizard brain level on which elections are about electing people who we think have a good sense of judgment to respond in productive ways to unpredictable events as they occur.

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[Tom (Interviewer)]

It's interesting. So I don't know that. That you can run a government without lying. I don't know. But the reality is, if you believe that the government ought to be elected officials by an informed republic, then you have to inform the public. Like, they have to actually understand the things that are going on. And if you're creating a smokescreen, which is what we're doing now, there is the world that we all think we interact with. And literally until I was in my 40s, I thought the world as I saw it was the world. And then the more that I began to learn about money, the more I realized, wait a second, the world that I thought actually isn't real and that there is a curtain. Money is a fiction. It's being manipulated. It's being manipulated to my disadvantage that we're being told one thing, weapons of mass destruction, just to stick on Bush for a second. Saddam Hussein has weapons of mass destruction. We have to invade Iraq. And I remember at the time being like, wait, what does Iraq have to do with 9, 11. Like I, I was like, well, I guess I just don't understand. And they just kept saying weapons of mass destruction over and over and over. And so I was like, oh, okay. And so you begin to realize, oh, what this is, is they are counting on the fact that the public is uninformed. They are counting on the fact that the public is manipulatable. They are counting on the fact that they have superior morals to what the public would have if they could vote in real time. Because if you, in the very near future between just the way that everybody has access to a computer, the way that the blockchain works, you could, with every decision in real time, say, hey everybody, grab your cell phone at home. You're going to be prompted to vote on seven new things. Just send in your vote and we'll do it by decree. Now I would say that that is a disaster. And the reason that that isn't going to function is because you've got a media that is just manipulating the living shit out of everybody and we're being lied to left, right and center. And so even though, yes, you could vote in real time, you would have to clean up all the BS first. And so if there was just, you would have to commit to complete and utter transparency and let the chips fall where they may. If you really wanted to do a non representative democracy, which I recognize for the people screaming in the comments right now, I understand that's not what we have now, but I'm just saying for people who will put that forth as you did and said we could never do this, technically it will be very feasible, I believe in very short order to have everybody just vote immediately. Now, for all the ways that can be hacked and manipulated, it's probably beyond a terrible idea. But the question becomes, what would have to be true in order for us to want a non representative democracy where everybody just casts their vote? And I don't know that humans are capable of digesting the issue, putting it out in a way that is accurately representative of what's going on. And not only do I not even know if that's possible right now, it's just a bunch of lies. And so the question becomes, how do you create a functioning government when the mechanisms that have been proven over and over all throughout human history are that you lie to the public, you control the narrative. This is why whenever a dictator takes over, the first thing they do is take over the media. You lie to the public, control the narrative, get them to believe what you want them to believe. Many, many Many of them will. And then the dissenters, you just punish relentlessly.

[Graham Moore]

This will be fun. Let me defend the status quo to you because it's always. I always feel like I have such a.

[Tom (Interviewer)]

As long as you define it first, I'm happy to.

[Graham Moore]

It always feels like only boring people defend the status quo. So it's a fun. It's a fun exercise in some ways. Let's try and take this into the realm of something, something really specific, a specific question on which the government of here in this case, I'll give an example of unelected officials making decisions that profoundly infect our lives without pulling everyone first. Interest rates. You know a lot about monetary theory. So no secret that the board of the Federal Reserve, all these governors make a set of decisions about what interest rates should be. Right. The these issue where to set interest rates is extremely technical. I know some things about economics. I am not a governor on the Federal Reserve Board, nor should I be. I don't have a degree in economics. I, Graham, want people who know a lot more about this than I do to be sitting on the Federal Reserve Board making these decisions. If you'd asked me a year ago whether interest rates should have been lowered more, I would have said yes. That seemed like the right thing to do. Now, in the middle of 2024, that turns out would have been the wrong decision. And I would actually argue Jerome Powell and company have done a terrifically good job of managing the inflationary crisis of the past few years. And I'm not going to argue that the inflationary situation is perfect. I'm going to argue that it's better in the United States than it is in Europe, because I think Jerome Powell and company have done a better job than anyone in the EU has done. And I actually think that's pretty remarkable. So that situation, and we can have another conversation about whether we want governments to be managing currencies at all, but we certainly have a situation in which they are. So you can't pull a population about a question as complicated as where to set interest rates. People have lives. People are. It's a really technical, finicky question. Right? And at the same time, someone needs to make a decision. There needs to be sort of, at the end of the day, one person in the government who is making that decision and stands up in front of a microphone at a podium and announces that decision and then the world responds to it. So we don't know all of the considerations that go into that decision. Right. We're not in the meetings where the Federal Reserve governors kind of discuss this, but we hear about the outcome. And I would argue that there's a specific example where, yes, the government is by nature keeping information from the public. It's keeping that decision making process from the public. It's not consulting the public about that decision making.

[Tom (Interviewer)]

But nor should it, and nor should it, because the people are not going to be able to make that kind of well informed decision.

[Graham Moore]

Yeah, Again, I'm not the most informed person about monetary theory in the United States of America, but I'm not the least. And had I made that decision a year ago, I would have been wrong.

[Tom (Interviewer)]

Yeah. So this now gets into, are there some decisions that simply shouldn't be left to anybody to make the decision? So taking monetary policy. Monetary policy I would put forth. There is a moral obligation that governments have to not manipulate currencies. The reason I believe that is because of my definition of money. My definition of money is that it is any one person's ability to capture the efficacy of how they spent their time. So if I spend my time as a school teacher, then I'm able to capture the economics of that and the society values it to a certain degree. And I'm able to get that. Now, if the government can say, oh, well, we're going to print more money now, the economic activity that I was able to capture in the dollars that I generated by being a schoolteacher, they're now worth less. And so that will derange how I think about my money, because it's actually wiser to spend my money, hopefully on something that holds value. But no matter what, it is better to spend your money on the thing that it can buy today because it will buy less tomorrow. And the fact that behind the scenes we have unelected bureaucrats that are manipulating money that cause this downstream total derangement of people's relationship to their own time and energy. And so just to say it another way, by letting the government print money, you are letting them steal retroactively your own efforts. It's. It's literally crazy to me. I cannot believe people are not more upset about this. They're not upset about it because they don't understand it. And so to your point, you have a thing where people, even if they have the time, like the amount of time I've spent, to understand it and to feel like I'm sort of just clinging to the bottom rung of something like you talk about in your book, John Maynard Keynes, who, as somebody who's in the bitcoin community, I will say they Fucking hate that guy. With a fiery passion. And it's fascinating because reading your book, he gets into. He basically describes what I want to do as a global currency, literally. I'm waiting for you to say Bitcoin because it sounds exactly like Bitcoin, but he wants it to still be manipulatable. He wants people to have control. But ironically, by creating this, this high level currency that no one government had access to, he thought it would be less manipulatable. But he still thought the manipulation in my reading of this was, was a feature and not a bug, which is why they hate him.

[Graham Moore]

I think that's correct. I think that is correct for. I think that is a correct description of his theories. He had this. It's funny, when you read biographies of Keynes, and I've read a bunch, they tend to skip over his, what he called bancor. Bancor, which is his name for his kind of global currency he was going to create at the end of the Second World War. We tend to skip over this in histories of Keynes because as you may have noticed, he failed in his attempt to create Vancouver. It doesn't exist. It didn't exist. A global currency was not created at the end of the Second World War. The Bretton woods system as we know it today was instead the World bank, the IMF and so forth. But yes, as you're saying, I think one of the interesting things to me about the conversations that Keynes and his colleagues and his enemies, frankly, were having surrounding currency manipulation and currency creation in the Second World War is that to me, they felt, I was reading Keynes and I was reading his opponents and writing in the 30s and 40s and going, oh my gosh, this could have been written yesterday. This is exactly the same set of conversations we're having about cryptocurrencies that we're having today. This is exactly the same set of conversations that we're having about, you know, do we want, do we want governments to create currencies? Do we want someone else to create currencies? Who is the someone else? You just talked about currencies being manipulatable. I would argue that unless you want a fixed quantity of money forever, which I guess is the sort of bitcoin argument that as soon as you move past that all currencies are by definition manipulatable. They were created to be manipulated. And so the question is just who we want to be manipulating it. Unless you're going to make an argument that we sort of want a fixed price pool, the kind of bitcoin maximalist argument that we really want a sort of a fixed pool of currency that can't move up and down ever. You can make that argument. But if that was the case in 1939, the United States would not have been able to defeat the Germans. We would not have been able to with the economics.

[Tom (Interviewer)]

But the Germans also wouldn't have been able to manipulate their own currency to create that loop that allowed them to rearm.

[Graham Moore]

That's true, yes. They would not have been able to sort of do their own currency shenanigans and arm in that way, though they likely. I mean, these counterfactuals are always a little bit tricky, right? Like describing sort of what would 1939 have been like with Bitcoin is a really tricky problem to solve. Because on the one hand you're like, well, but they didn't have computers. How would it work? There's a bunch of practical questions to solve. But if something like that did exist,

[Tom (Interviewer)]

I mean, literally, you can look at it today. Because what my hypothesis in reading your book is, your book is like talking about the Korean War during the Vietnam War. You do it to create a little bit of distance so we can really talk about the issues, but really we're talking about Russia and Ukraine. Like your book, as far as I can tell, man, whether you intended it or not, maps effectively one to one what's going on. Right now. We are manipulating the US dollar by printing a metric shit ton of it so that we can send aid to Ukraine without having to ask the American people if they're here for it or not. Because you just print and it, in my words, steals from all of us. Because I don't have any say, you dilute my buying power, which is the same as taking some of my money literally, effectively is not different. If you inflate the currency, if inflation. Because there is a difference between the amount that you inflate the money and the actual inflation felt in the marketplace. For reasons that are fascinating, but we'll set aside if you inflate, if inflation hits 20%, that's the same as taking 20% of my money.

[Graham Moore]

That's right.

[Tom (Interviewer)]

Just so people understand, like, hey, don't fall for the trick. So they the. I'm not even saying it's the wrong answer to pay for the war in Ukraine. I am saying that it's the wrong answer to do it without going to the American people and saying, we would like to get into an economic war with Russia via Ukraine. You win or you out. And if they're like, we're out, then we're out. And that just is. And you have to accept. I'll finish that sentence and I want to plant an idea. You have to accept that there is a wide spectrum of intellectual abilities and so some of the voting public will not have the ability to cognitively understand the second and third order consequences of what's going on. They will be easily manipulated by messaging, which will be whether people intended to or not be tilted in a given direction. That just is what it is. But hey, welcome to the human condition. I don't see a way around that. So if given the populace speaking up, this is a very western perspective. I believe in the power of the individual way over the power of the collective. And if those collective individuals come together and say this is what we want, then then that is what it is. And I don't believe, morally speaking, that anybody from the top should be able to say no, I'm going to lie to you, I'm just not going to ask. I'm going to money print so I don't have to talk to you. And so that was the vibe that I got reading the book, man. And I kept wondering like, are you intending me to read it this way? Because you convinced me that the deep state is real. You convinced me that the my own government is as is at war with itself. That there are people in my own government that are like, I don't give a fuck what the public thinks. I am going to go to fight on the side of the Ukraine or God. I'm sure there are people like I'm going to go fight on the side of Russia.

[Graham Moore]

I'm sure there are, yeah, a thousand percent.

[Tom (Interviewer)]

And so now I'm like, whoa, okay, here's the seed that I wanted to plant. There are solutions that come at a hyper oblique angle. There's a guy named Balaji Srinivasan. You know him?

[Graham Moore]

Not personally, but I know my friends.

[Tom (Interviewer)]

I think, yeah, I think you'd find him utterly fascinating.

[Graham Moore]

I do.

[Tom (Interviewer)]

So his whole thing about the network state and he's like, ah, these governments super passe. Not going to work to a highly educated public. Once you divorce money from governments, you're going to find that people no longer group by region, they group by values. And while I'm not sure that plays out at that level, I certainly think that people do group by values, whether they group at nation, state esque levels.

[Graham Moore]

I don't know lot to respond to there on the Balaji topic, I think his argument is fascinating and super smart. I almost entirely disagree with It. But I think it's really interesting things.

[Tom (Interviewer)]

Give me a quick rundown of what you see his stance as.

[Graham Moore]

Oh, great question. You just did such a great summary of it. I think the argument. So he's arguing. I take his argument. He agrees. A lot of different, very complicated things. But one of his arguments is against government created currencies entirely. That this is a passe. As you just said, these are passe institutions. They don't work, they're too manipulatable and that we sort of want. He's arguing against that human communities are best formed effectively electronically, kind of not based on physical location. But we'll. We'll be getting sort of networks of people, groups of people building effectively their own kind of delocalized de physicalized nation states. People can build their own currencies, people can build their own kind of communities, their own jobs, their own corporations, what have you. It's a sort of the. The nation state is going away to be replaced by these other communities. Do you think. Is that a reasonable description of who's doing. You're probably better up on blodges work than I am.

[Tom (Interviewer)]

Yeah. I think that that's very close to the concept of. Strip governments of the ability to overlord on people by taking their money away. Essentially their ability to manipulate the currency and then don't lock them in with your borders and then see what happens.

[Graham Moore]

So I'm pretty. So that's a. That's a great way of describing it because I'm actually largely in agreement with him on the open borders question. My politics tend to be quite open borders as are his from my understanding of it. The bit where I disagree with that is that the age old argument that the government is the entity with the. A monopoly on the legitimate use of force. A very classic kind of argument for that's what a government is. They're the people allowed to hurt other people and we say it's okay. That's the definition of a government. That's either. Gosh my. Your listeners who are more versed in Enlightenment philosophers recently than I am will remind me if that's Rousseau or Locke or Hume. I'm forgetting. I'm so embarrassed in this moment.

[Tom (Interviewer)]

Drop it in the comments.

[Graham Moore]

Yeah, drop in the comments who that was. But that's a. The idea is that that's the definition of the government. Right. We say what is a government? The government is whatever we say is allowed to put people in prison. The government is whatever we say they're allowed to have weapons that you and I aren't allowed to have. They're allowed to use force that you and I are not allowed to use. That's what defines a government. And I think that's correct. And I think that's a good thing. I think that we want the government to have access to nuclear weapons, but not for me and you sitting here to have access to nuclear weapons.

[Tom (Interviewer)]

I was going to show you mine after the interview.

[Graham Moore]

Much as I think that my personal use of nuclear weapons would be entirely benevolent and right, and I would only use it. Don't we all? Yeah. For the right reasons and against the wrong people. I think that it is a good thing. I think it is a good thing that only. Not only do only governments around the world have nuclear weapons, but only some governments have nuclear weapons. I think it's a good thing that the government of Iran does not have nuclear weapons yet. I think it's a good thing that we're trying to. You know, I think the situation in Russia and Ukraine would look a lot different if Russia did not have nuclear weapons today. Right. I think that's inarguable.

[Tom (Interviewer)]

What do you think about the Second Amendment right to bear arms?

[Graham Moore]

Ooh, great question. So this is one of those things where I'm a little bit agnostic, like it seems. I feel like. I keep reading about this. This is totally tangential, obviously, to wealth of Shadows or anything. Gosh, it's complicated. So I feel like I keep. I'm from Chicago, grew up there, spent the first 18 years of my life there. And so Chicago, Right. Is famously a place with some of the strictest gun laws in America and also sort of one of the highest rates of gun crime in America. The. And when you do. My loose understanding of the data on this is that when you do cross state comparisons, states with stronger gun laws do not have lower rates of gun crime than states with looser gun laws. You can tell me if you've seen data that contradicts that. But that's my loose understanding of the situation.

[Tom (Interviewer)]

I have no sense of the data. I'm a junior constitutionalist in that if I knew the Constitution better, I might make that statement really aggressively. But I know well enough to be like, if that's what we're founded on, then that's where we should be. And given the Second Amendment's pretty clear now on the nuclear armament side. Yes, I'm with you. And so if that ends up being a violation of the Constitution, I'm here for limiting nuclear weapons.

[Graham Moore]

Yes. So, yeah, I guess in some level, Right. We're Just arguing at some level. It's funny. I get. Really. Perhaps because I write prose for a living, I find constitutional arguments impossibly tedious.

[Tom (Interviewer)]

At a technical level or at a philosophical, moral level? Both.

[Graham Moore]

And here's why. Because every time we have conversations about, well, this. Depending on how you read this clause on this piece of paper from a couple hundred years ago, like, one set of people reads that. One set of people reads those couple words this way. Another set of people reads this couple words another way. I write prose fiction for a living, so trust me, I write books where hopefully different readers do take away different things from the text. This is a book where, as we were just discussing, I just wrote a novel, which is not a constitution. But at the same point, you'll have. You were talking about the book's comparisons to the way the book is, clearly making references to modern debates about Bitcoin and other cryptocurrencies. And I've had people write to me since the book is coming out saying, oh, gosh, I like the book, but, God, you were so pro Bitcoin. I couldn't handle how pro bitcoin the book was. And I've had other people write to me and say, gosh, I really love the book, but, oh, this book was so anti Bitcoin. You really took such a strong anti Bitcoin position. I just disagree with you and I don't understand. And that's. I would argue that's a feature, not a bug, of what novels and art are supposed to do. They're supposed to raise these questions and not give anyone exactly what they're looking for. If you go into the book with one set of opinions, you should have those opinions challenged. If you go into the book with a completely contradictory set of opinions, you should have those opinions challenged. With constitutional arguments, it ends up being this thing. It's like. It vaguely feels to me like I'm listening to my English professor friends debate some monologue in the middle of Hamlet going, oh, I think Hamlet felt this way. And someone else is saying, I think Hamlet felt that way. And on some level, perhaps this is what I find tedious, is that I find myself going, well, do we have data on which version of this kills the fewest number of people? Because I feel like I'm in favor of the one that kills the fewest number of people. And this is perhaps where I'm a sort of. Maybe this is where I'm more of a utilitarian than I realize where. It's just the outcome matters more to me than Some of the constitutional procedural arguments, I think. Yeah, like in some ways I almost feel like argument about the second Amendment per se is a slight tangent to the actual issue. I mean I just, I didn't. Maybe it's because I didn't grow up with guns. I never had guns around.

[Tom (Interviewer)]

Well, what I'm trying to peg it to. So in all these questions I'm trying to map the way that you view the world so that I can understand. So that I. The reason to understand things is so that you can make predictions. And so I think of every human that I encounter as an incredibly expensive flesh based AI, that they may draw better conclusions than I do. And if I can map their thinking and predict their answers, then I now have access to that AI even when they're not around me. So I'm always trying to understand somebody's thoughts and then go, okay, well their way of thinking is going to lead to, you know, this second, third, fourth order consequences at least as far as I can think. Really fascinating. When I'm talking to somebody who looks backwards to form their certainly is looking backwards to understand. Now I won't put words in your mouth in terms of why you do that, but when I read your material, I look backwards to understand the future. So I read the wealth of Shadows so I can understand Russia, Ukraine and if I can then look backwards, understand the historical context of somebody like you, whose AI is really programmed on historical events that are knowable. It gets very interesting because I'm like, oh, he believes that for this reason we see that play out historically. Did that play out well or not? So for instance, as we've been talking though I haven't wanted to interrupt basically every war that I can think of. And I'm not a historian, I want to be very careful about that. So I have a headline reader's sense of what I'm about to say. But every war that I think about post World War II has not turned out to be what I will call a just war. And so all the things that we did to manipulate and win against the Nazis, we did to in. In the Vietnam for instance, and don't love that one, that did not go well. Afghanistan, Iraq, all of it, like it just starts to get. This becomes a game that I start saying we just shouldn't be playing it. That the game unto itself is so manipulative and puts the power in the hands of unelected bureaucrats. Although I really do think deep state is the right. It conjures the right image certainly in my mind of These competing factions within a government that are pulling in different directions, that may in fact believe another country is more moral, more just, more whatever. And so they're trying to pull in that direction. And I will even grant that they have the best of intentions, that they want the same things that I want, but they're going about trying to achieve them in a way that I'm mortified by. Again, reading your book brought that home to me in such an incredibly visceral way that in some ways, man, I'm really going to be able to draw a line in my thinking and say, before the wealth of Shadows and after.

[Graham Moore]

Absolutely fascinating. That's so kind. I really appreciate your saying so.

[Tom (Interviewer)]

Well, the question becomes, are you going to end up hating what I do with that thinking? That's what I'm trying to figure out in this. In this episode is, how do you think. So anyway, you're. You're telling me things that you. For instance, the thing that made me ask about the Second Amendment was the government should have a monopoly on violence. And if Drew was really on his game, he would not have waited for people in the comments to tell us he would have pulled that up. But whoever said it, that's very interesting. But now that, for me, brings up questions of, well, the founders of our Constitution said the thing you have to worry about is a tyrannical government. That we know there's something about the human condition that over time, a government entity is likely to bend towards tyranny. And while we think we've built one that'll keep itself in check, it probably still bends towards tyranny. And so the first thing we're going to do is say, nobody can tell you what you can and can't say, okay, First Amendment, baby, freedom of speech. But that value is falling out of favor. Which brings us back to my whole thing about values are all that really matter. The second one is, and just in case they try to tell you what you can't say, you've got guns to protect them if they were shutting you up so that they could come do something else crazy. Now, I love the modern world, man. And I like that water just shows up at my house. And I don't want anybody to get confused. Life, despite the complexities of the moment that we're living in, is still awesome. And within the just proximity of people that can hear my voice in this room, let alone on this microphone, are people that I love. Things are great. And if you lose sight of that, what I think people are struggling with, and this is Certainly true for me. I can feel the value system is changing. So anyway, what I want to map in this is your values, how they play out. And then as I get a better understanding of where you're coming from, we can talk about second and third order consequences. That was all explanation as to why I asked about the Second Amendment. It's not tangential for me. It's all part of me trying to map how you view this.

[Graham Moore]

Yeah, wow. There's a lot to respond to there. I think that's fascinating and yes, important to remember. I feel like we see charts in this all the time. That every time someone sort of starts tearing their hair out about this being, I don't know, the worst time to live in human history or something, you kind of go, well, actually the fewest number of people globally are living at the poverty line since recorded time. Fewer people are living under starvation or a smaller percentage of the world population is living under starvation conditions now than has lived at any other point in human history. That feels pretty good. Even beyond the fact that you and I can sit here in your beautiful home surrounded by expert craftspeople building these things, surrounded by all this wonderful technology. You know, the world starvation is going down. War is actually the rate of deaths to war is due to war is going down over the Last hundred years, 200 years, certainly 500 years, certainly a thousand years. Right. The trend lines, if you, if you zoom out long enough and you don't even have to zoom out that far, trend lines are all going in the right direction. So that's great. When you say that values are changing. Can you tell me more about what you mean by that?

[Tom (Interviewer)]

Every generation is going to get the world that they want. And this is the.

[Graham Moore]

That sounds like a fascinating Greek curse. Like an ancient. Be careful what you wish for.

[Tom (Interviewer)]

Yes, very much so. This is why also history rhymes is that there's only so many human personalities, which means everybody ex. So all right, there's only so many personalities. What do I mean by that? Think of humans as flesh based AI like we were talking about previously. It's a very constrained system with a ton of epigenetic context. So you're born into an area where you have 50% of use hardwired. There's nothing you can do to change it. And then there are a bunch of epigenetic tags on you so that if your family went through a famine, you're going to respond to calories in a wildly different way. If your family was hyper stressed out mother more way more importantly. But it actually tracks on both sides. But if your mother was hyper stressed out, especially during pregnancy, there are going to be all kinds of epigenetic tags on your DNA that have to do with just what she went through through. So you're up against all that in terms of how you're going to respond to your inputs. Now, humans are the ultimate adaptation machine. So we are going to adapt to whatever environment we're born into. So that could be geographic, what's the weather like, what's the food like, how much exposure to sun do you have, et cetera, et cetera. And then it could also be social. So hey, you come out in a time of war, how do you respond to that? You'll adapt. So that's the 50% of you that is malleable. And so in the 50% that's malleable in goes value system. And so if you were about to grow up in China and have one set of values, but instead, the moment you're born, I bring you over to Afghanistan, you're going to grow up with a very different set of values, or I bring you to America, you're going to grow up with a very different set of values. Doesn't matter. Everyone's going to absorb the values in which they are born. Now you'll get iconoclasts, obviously, but you're going to absorb the values that you're born into. Now, those values along with beliefs and biological context. But now you have the whole shebang. So your values, your beliefs, your biological context, they make up this thing I'll call frame of reference. Frame of reference is the distorted lens through which you view everything in the world. You mistake your frame of reference for objective truth. All right, since values is one of the three things that make up your entire sense of how you view the world, they play an unreasonably outsized role. And since they effectively govern your sense of what is moral now, it just in terms of what people want to see reflected in the world, that's a question of values. And you will see the left and the right long story about how they get set up from a biological standpoint, it's pretty interesting. But for now, just accept that they do. There's biological reason why some lean left and some lean right. But all of that ultimately comes down to a value system. And so when you see them colliding, they are colliding over values. They often can't explain them because so much of this stuff is just subconscious. But if the values of the day

[Graham Moore]

are,

[Tom (Interviewer)]

hey, everybody should be treated equally and we Want to see all people rise and be happy, then you're going to get that world, whether people try to fight against it or not. Take the 60s. People are just like, no, we fucking had enough of this. We're not going to live in a place where some people have some rights and other people based on the color of their skin do not. Fuck that. That's ridiculous.

[Graham Moore]

Cool.

[Tom (Interviewer)]

Society got what it wanted, as it always will. Just as throughout history, people have been crushed down, suppressed, because the values of the day were like. But there are lesser people, obviously. And so because that was the value system of the day, slavery's fine. Yeah, no problem. Then that's what people did. And so you can get Nazi Germany where it's like, hey, this is the values. Germany is not going to be kicked around anymore by these, you know, other imperialistic dogs from Europe. We're going to rise up and we're going to take back what's ours, and nobody's going to tell us what to do anymore.

[Graham Moore]

Cool.

[Tom (Interviewer)]

Hitler's able to sway the values of the country, and then the ideas follow. And then once they bind your values, you're going to drive them into war. But first you have to change the narrative, which is ultimately changing the values, which is changing their frame of reference, which is how you get people to act. So whoever controls the values controls the world. This is why people say that politics is downstream of culture. What they mean is politics is downstream of the mechanism by which we manipulate people's beliefs and values, and that very much is culture. So once you understand that you. Your morality is controlled by an invisible set of values, you understand the game of manipulating yourself or being manipulated by others. But that's what I mean. So culture just gets values. It comes across in the music, the movies, the TV shows, the way their parents raised them, and on and on.

[Graham Moore]

That's really fascinating, and I love your description of values as being our own kind of blurry lens that we internally are. Through which we internally are viewing the world. And we know it's blurry. And I think one of the interesting things, again, as someone who writes books and makes films, the point of that is to hopefully sort of contribute to culture. Right. Like you want people. I make things so that people will engage with them and so that people will hopefully feel that their, I don't know, their moral framework is being challenged or their understanding of the Second World War is being challenged. Right. You want some kind of. You want people to be, we're a better culture if people are constantly challenging their own values. Is this really what I believe? Right? Is this. I think that's something. It's something I do a lot, right? Where you're saying, is this. Am I right? You know, I've been saying whatever about the Federal Reserve for a couple years, but is that still right? Do I still believe that? Is that still right? Like I. Giving ourselves the opportunity to be wrong, constantly challenging our own frameworks, constantly surrounding us, ourselves with people who will challenge our frameworks. I feel like that's. And as you're saying, our especially our frameworks of values is really important. I mean, I've never had. As you're saying, we hold our values pretty dearly, but there's nothing, it feels, to make such a valuable exercise to try and have them poked at by someone else, especially someone else who's thought very hard about their own value system. Right. Especially if they, I don't know, believe in a God that you don't, or they believe in a kind of ethical framework for the world that you don't. I think that's. I guess I would make an argument that that's kind of the work of culture is to sort of create a constantly destabilizing, you know, kind of like workout for all of our frameworks of values.

[Tom (Interviewer)]

When you look at everything that the government has historically done with money printing, manipulation, etc. Do you see that as a path forward that we want to continue on, or do you want to see something like a bitcoin come into existence or a bancor come into existence that's outside of any one nation state?

[Graham Moore]

I think that government created and controlled currencies are an imperfect solution to the problem of how to organize human society, but a better solution than I've seen from frankly, any other commerce, including bitcoin maximalists. It's funny, you're using the word manipulate to describe what governments do with currencies. And I think that's correct. I don't disagree with you. I guess I would just say that manipulate's a funny word because it sounds somehow nefarious, though in the sentence I just said, I just use the word controlled, which, now that I think about it, also sounds vaguely nefarious, doesn't it? Create or alter might be other words we could use to describe what's going on. And create's an important one because I would argue that the book sort of gets into this. I mean, there are these. Part of what Keynes was looking into and part of what a lot of the characters.

[Tom (Interviewer)]

Can you tell people who John Maynard Keynes was?

[Graham Moore]

Sure, John Maynard Keynes was, I would argue, certainly the most influential economist of the 20th century, if not the most famous, an influential intellectual of the 20th century. He was a British economist, though not by training. He had no real economic training because I think until John Maynard Keynes came around, frankly, he almost invented the field of economic training as we understand it today. He was, as I said, he was English, born into a very kind of upper crust, posh, old money, English family and sort of had all the hallmarks of that kind of upbringing. Time in the Foreign Service and he became, he got a teaching position at Oxford quite young, I want to say he was 24, 25. And in that time he basically pioneered a lot of, like, what is now the field of economics. Like, remember before that, before Keynes, economics wasn't really a field. You know, you go back to something like Adam Smith, who did not describe himself as an economist. He was a philosopher. It was just philosophy. And the word economy was in there, but that was just philosophy. Economics was not its own study yet it took a little while until the sort of early 20th century for economics to be its own field of study. And Keynes is one of the people who made that the case. You know, his biography is fascinating. He was a sort of, as you were saying, a kind of like mid level, mid, upper level, like government. He'd spent some time in the government. He was a bureaucrat, certainly, and I'm so glad so much of this book is a defense of bureaucrats, the deep state, or at least showing how they can be useful. And Keynes certainly spent his time as a bureaucrat. But First World War, First World War breaks out and he is basically asked by the government to manage the British economy through the First World War, which he did. And this is one of his unquestionable geniuses. He somehow managed the British economy during the First World War. And sitting here today, I don't think I, or maybe anyone else alive could really explain how he did this. He somehow managed it so well that Britain left the First World War in better shape economically than she entered it. Which, given the destruction on all sides in that war, is unfathomable to me. He was at the end of the war, greeted as a national hero. And it says something, I think, a lot about British culture, certainly at the time that an economist became a war hero at the end of the First World War. I mean, everyone was stunned by how well the country was doing then. He goes to the Treaty of Versailles. He's there as part of the British delegation signing the Treaty of Versailles, where he quite famously and quite publicly quits in a Hoff because he felt that the treaty that the British and the French and the Americans were, the peace treaty they were signing with the Germans was so punitive against the Germans for having, quote unquote started the First World War that it was going to. Keynes felt that it was going to doom Germany to all of these debts to generations of poverty that would end up producing the cultural and social conditions under which some sort of dictatorship might later emerge. Keynes at the end at Versailles, he quits Paris and leaves and basically with shocking and terrifying accuracy, predicts to the letter the next 20 years of German history and says if you guys do this, I mean, he doesn't, you know, he's not calling out Hitler by name, but he basically predicts what's going to happen in the next 20 years of German politics ending with, you know, the rise of something that looks a lot like the Nazi party. And he says, if you guys force the Germans to sign this deal, this is what's going to happen. And if that's what you're doing, then screw you all, I'm out. And quits in a big huff. And he writes it up into a pamphlet.

[Tom (Interviewer)]

Do you remember his reasoning? Why did he think such a punitive thing would lead to a Hitler esque character?

[Graham Moore]

Because he felt that it would force. So first of all, it was going to force the Germans into decades of crushing poverty. And he was certainly of the belief that if you force a population into decades of crushing poverty, they're going to choose political solutions to that poverty that are horrible. I think Keynes felt that you don't. Countries that are doing really well economically don't veer towards dictatorship that comes from crushing social catastrophe. And he felt that. Punishing the Germans was, it might feel really good to say, oh, you guys started the war or started the war and we're going to punish you and you're the bad guys and we're the good guys. And it feels so good to kind of punish the losers of the war, but it's going to. You've now created all these social conditions in Germany where not only do you have widespread poverty, but the government has to spend so much of its resources towards just paying the British back, paying the French back, paying the Americans back, paying back all these war debts that you're also going to get all this resentment. Germany's are going to grow really resentful for devoting. I forget what the percentages are, but whatever significant percentage of its GDP is just going to get sort of sent out the door to their former enemies in the British, the French and the Americans. And you want to get a bunch of people really, really angry, you tell them, oh, you don't get to have food this week because actually the government's spending all of its money sending it to London. That's going to get a lot of people really pissed at London. It's getting a lot of people really pissed at the English. And it's also going to get, as it would turn out, a lot of people really, really pissed at the Jews who they believed were controlling the global economy in some sort of insane conspiracy theory. And sure enough, a lot of people really did come to grow tremendously resentful in Germany about the rest of Europe, about the Americans, certainly about, you know, Jews across the world. And so Keyneson predicted all of this, writes this paper, the paper's writes it in a sort of. He publishes this book. The book somehow becomes a bestseller all around the world. I mean, this was a time when John Maynard Keynes could be like the best selling author of the year with this economic treatise about why the. Why the Tree of Versailles was such a bad idea. But then he goes, he lives this fabulously glamorous life where he invests really early in the artistic careers of Pablo Picasso and Virginia Woolf. He buys these Picasso paintings really, really early, before they were valuable. Virginia Woolf he knows and gives her a house to write her first novels. He has this great artistic taste. It's this very kind of classy old money sort of world that he's from. He makes untold fortunes actually on the currency markets, which now we would consider tremendously unethical because he was a former government, you know, he was managing currency for the British government and then made a ton of money on the currency markets in the twenties. We did not, you know, they did not have the same ethical rules that we would today. Jerome Powell could not go and sort of play the currency markets the way John Maynard Keynes did in the 20s. That would be illegal.

[Tom (Interviewer)]

Tell that to Congress.

[Graham Moore]

But seemed to work out fine. He sort of had these untold fortunes he made. So Keynes was personally. He was gay for his entire life and quite openly gay with the folks around him. We find in his diaries he kept these amazing. He kept these amazing diaries of all of his sort of sexual encounters. He kept these. They're really funny to look at. People can Google them. They look like Excel spreadsheets where you kind of check off the various characteristics of all of the men who he was kind of meeting and sleeping with and many hundreds of Them every year. It was quite a. Oh, yes, he, Keynes was a dashing, wealthy man in an exciting period in British history. And again, this was the worst kept secret in London was that Keynes was sort of an out and out homosexual. Meeting men in parks and going home with them. It was. I mean, he was really famous too. So it wasn't like this is a secret you could keep particularly well. But so he was personally, he was gay his whole life until he then met a woman named Lidia Lopakova, who was at the time the prima ballerina in the Moscow Ballet, then engaged to a messy divorce from Igor Stravinsky. Somehow Keynes meets her, falls in love, begins his first heterosexual relationship, they get together, he steals her from Stravinsky, they get married, attempt this sort of, what turns out to be this wonderful life together. They're together for decades afterwards in what by all accounts seemingly was quite a happy heterosexual marriage. And, you know, you can imagine Keynes is the most famous intellectual alive at the time. Lidia Lopakova was the prima ballerina of the Moscow Ballet who just divorced one of the most famous composers in the world. They were a sort of. It's like a Kanye Kim Kardashian kind of marriage. It's sort of two of the most famous people in the world get engaged in this messy thing. And it was this level of sort of. The glamour around Keynes is hard to convey today because we talk about him as being an economist and it all sounds kind of a bit dreary, but he was anything but dreary. And so Keynes was basically running. When the Second World War breaks out, Keynes was basically running the kind of British economic operation. He wasn't officially at the Exchequer when the war broke out, but he was such a. He was so powerful and important in Britain that they kind of nobody did anything without kind of going to him and checking with him. And he didn't. They ended up giving him an official government position at some point during the war. But I think at the beginning of the war, he didn't even have an official position. He was just kind of like, well, look, we're going into war. So clearly the person we need to ask is the most famous economist in 100 years, if not ever John Maynard Keynes. And so he ran the British war operation. And so he was. In some ways, he's in this book, he's sort of the antagonist. He's an antagonist of our Americans, our American heroes. Because one of the big questions on the American side during the war was how do we fund the United States? Had to fund not just the American war operation, but the British and French war operations as well. And Keynes was in charge of the British side and he very much felt that. The Americans wanted Britain to pay for all the weapons we were sending them. And Keynes felt that, well, wouldn't it be quite nice if you just gave us all these weapons and we didn't pay for them? Wouldn't that be a better solution for all involved? And that was his position through much of the war. So there was a lot of kind of economic wrangling around, around this fact that, you know, in again, in 39 and 40, the Germans had built up this massive war operation. The British military was some tiny fraction of the size of the German military. The French military was a tiny fraction of the size of the German military. The American military was an even tinier fraction of the size of the German military. The, the collective Allied forces were outmanned and outgunned in 39 and 40 in every conceivable way. And so what our folks at treasury had to figure out how to do was do what the Germans had done over the last few years. How do we build up our own massive war operation and build it very, very quickly. And moreover, the British don't have a war operation, the French don't have a war operation. Physically, Britain doesn't have enough bullets to go to war. They didn't have bullets. How many? We need to start making millions of bullets and we need to start making quickly. They were making 3 million bullets a month. World War II took a lot of bullets and someone had to make them and someone had to pay for the making of them. And neither the UK or France were in a position to be able to make them. So the US basically became the armorers of the entire Allied war effort. And that took quite a bit of government expense. To one of our earlier topics of conversation, the way they financed the building of, the way they financed the creation of all those bullets was by printing quite a lot of money because someone had to pay a bunch of guys in Detroit to build a bunch of factories that would then make all these bullets. And that, that took money printing, which

[Tom (Interviewer)]

means the guys in Detroit paid for their own making of the bullets along with everybody else.

[Graham Moore]

Well, yes, maybe this is where this becomes an interesting question of. You were talking earlier about your sort of understanding of, and I think the book gets into this too, that if we accept that money is essentially a fiction, it's not real. Right? There's nothing real about it. It's just this thing we use so that society can help function. We can define it however we want to. And I would argue actually that that's one of. You were just asking about Keynes. I would actually argue that's one of his greatest insights. So we talk about Keynes. Keynes is talked about as being sort of an economist of the left, and I think that's true. But he's an economist of the left who is very much not in the shadow of Marx. He is no Marxist, he is no socialist, he is certainly no communist. And Keynes, big contributions to economic thought are largely around exactly what we're talking about, which is money printing in times of economic distress, that is, in times of economic slowdown, the government should print more money to hire more people, to do more jobs, to work more jobs. So when we talk about the US Response to the Great Depression and the idea of, okay, the government's just going to hire a bunch of people to build roads and dig ditches and do whatever, that's a very Keynesian approach to. To the problem, frankly. What the Germans did in the 30s to build up their war operation and to build the Autobahn was a very Keynesian approach that was all government funded really fast.

[Tom (Interviewer)]

I want to challenge an idea there, and I want to get your feedback. So I would say this is why people in the Bitcoin community absolutely despise Keynes, is that it is the very same thing that led Germany to have to do conquest after conquest after. Because when you're printing money, you're now, even though money is quote unquote, a fiction, which I hear you, but there is this real concept of value, right, that I will give you a thing if I get a thing that I want that is of equal or greater value. And so just the easy way to do it is to create what we call currency. Now, when you print more of that, you are taking money from everybody that holds that currency. And part of the reason, like, you need only think of it as it's counterfeiting that's approved for the government. So the government is allowed to counterfeit their own currency. But the question you have to ask then is, if they can print money, why don't they just print everybody a billion dollars? And people will either get stuck on that and go, yeah, why don't they just print a billion dollars? Or they will go, oh my God, even printing me a dollar is that same problem, just smaller? And so now we're asking a question of not does this destroy the stability of the economic system? But it's just a question of how fast. So I'M willing to destroy it because I hope that when it falls apart, it falls apart after me. Or that we can sort of limp this thing along long enough. Or maybe they have a vision of, well, the currency in Great Britain, the sterling, they used to be the reserve currency and, you know, look, they're fine now and so, ish, what's it matter that they used to be the most powerful economy in the world and now they're, you know, God knows where? So people, I think, lose sight of that at their peril. So the fact that Keynes wants. He doesn't want to go to, say, gold, which is way too restrictive. You can't manipulate it. I know you don't love that, but I stand by that choice of word. Because of that, you now get into the people that hate that hate that, because it is taking from everybody else in an invisible way with no vote.

[Graham Moore]

Yes, I don't disagree with anything you just said. May I give you the Keynesian counter argument to that? So two things. One, and this isn't just Keynesian, but why does gold suck as a global reserve currency and a currency overall? Because the amount of gold in the world is not fixed. We keep finding new stores of gold all over the place. There is a lot more gold now in the world than there was a hundred years ago. And gold is the worst of all possible options because not only, at least with bitcoin, you have the argument that, okay, there's a fixed store of these things. This is the number of bitcoins that are ever going to exist with gold. Somebody finds a new mine somewhere, Someone finds some new store of gold 100 miles below the earth or a mile below the earth or something somewhere in the middle of nowhere. Oops. Now the price of gold all over the world just fluctuated and it fluctuated totally randomly. That's even worse than central planning because you have fluctuations now depending on what some mine happens to do someday. So I would argue that gold as a currency manages to combine both the worst features of bitcoin and the worst features of the US Dollar. The Keynesian argument to the why don't we just print everybody a billion dollars? Is I think this is a really interesting point about Keynesian theory. And what he would say is, and I think this is his famous quote, I think I'm going to get this right. I'm always mangling these quotes and I'm pretty sure this one's short enough that I can do it right. Anything we can actually do, we can afford. I would argue that that single sentence is utterly central to Keynesian thought. And it's a thought that I agree with. I don't agree with everything about Keynesianism, but that's a bit that I will totally agree with, which is to say that the reason we can't print everyone a billion dollars is because everyone is not sort of doing a billion dollars worth of work. Work. That money is fiction. Money is all made up. It's just stuff we need to move around in order to sort of get real things to happen in the world. We can define it however we want. We can make it do whatever we want. We can make it work however we want. The thing that matters is what happens in the real world. If you want to make a bullet. The constraint. If we have the technology to make a bullet, we can make some bullets, and we can make as many dollars to go make bullets as we want to. Because we have the technology to do that. We know how to do it. If we want to build a cold fusion machine, the government can print as many billions of dollars as it wants to build a cold fusion machine. It doesn't matter. We don't know how to do it. It. We're physically incapable of doing that. The thing that matters is the real world.

[Tom (Interviewer)]

Meaning if you put newly printed dollars, inflationary dollars, into cold fusion and it doesn't work, you just inflated the money supply.

[Graham Moore]

Exactly.

[Tom (Interviewer)]

But if you do it to create a bullet which has an economic unit of value, you did not.

[Graham Moore]

That is the argument. And so you can create money and have it not be inflationary to the degree that the real world corresponds to the money you're making. So it's a word that actual work, actual productive use. And part of this has to do with how we defined what are actual goods in the actual world. Right. Establishing that money is a fiction. You can't eat money. You can't. You know, money doesn't keep you warm at night. Right. The heat that goes into your house keeps you warm at night. The blanket that's over you is what keeps you warm at night. Money is sort of a tool that we use. And the way we kind of think of money now is a tool that we use to kind of move society in such a way that a lot of people can get blankets over them at night or that more people can have blankets over them at night than had blankets before. Because we know how to make blankets. We have the technology to make blankets. If the government, a Keynesian thought would be that if the government wanted to spend money making I don't know how many Americans are there now. 300 million, 400 million.

[Tom (Interviewer)]

330 is the last official count. But we'll get back to your open border statement from earlier.

[Graham Moore]

We'll do that. Yeah, great. So let's call it 330. If the government wanted to make 330 million blankets so that everyone in America could sleep with the blanket over the night, we absolutely have both the technology and the money creation ability to do that. We have factories that can make blankets. We have logistics systems to make blankets. I mean, logistics is a part of this too, right? We can do that. And the argument is that would not be inflationary because that's creating real value for people. It's creating real things that people can actually use in the world. If we can actually do it, we can afford it and we can make. The limits on how much money we can print are physical limits. Another great historian who sort of whose work went into this book a lot is David Graeber, who we should certainly talk about contra Keynes. David Graeber was. He just died a couple years ago, very sadly. He was a socialist. He was like an out and out, very proud socialist. But he wrote a wonderful book that I can't recommend more highly to your listeners called the first 5,000 years. And it's a wonderful history of the concept of debt. And this shows up in my book and I really just stole it from Graeber because I think it's so brilliant. He talks about the idea that effectively digital currencies predate physical currencies. That one of these questions that Keynes is looking into, and frankly other economic historians are looking into, is where does money come from? Where was money created? Who invented money? Where did we come up with this thing? Adam Smith tells this theory that we've all heard. Adam Smith sort of popularized a theory that became kind of how economists tend to talk about it now, which is always some kind of parable about, like there's two farmers and one of them has horse, or one of them has cows and the other one has hay or something. And the guy who makes the hay wants to sell it to the cow guy, and the guy who has the cows wants to sell it to the hay guy, but they don't know how much hay or how many cows is a barrel of hay worth? How many barrels of hay is a cow worth? If only we had some sort of system for figuring out what things are worth and I can exchange them. Like actually giving you a cow is physically really difficult. So, gosh, if we only had some little slips of paper, we could use to sort of smooth over this transaction. And so money was created, okay, That's a very standard Adam Smithian account of how money was created. An account that Graeber, I think, sort of brought my attention to. It's usually called the chartless theory of money creation, because it comes from another school of economic thought, is that that entire story is ridiculous. That didn't happen. That has never happened. And in fact, we've never found evidence of any human civilization, no matter how old. Looking back however many thousands of years, we have never found any evidence of any human civilization that didn't have money. Money predates written language. Money is as old as belief in God, as like people staring into the stars and wondering what's out there. Money is as old as the human brain. And they didn't use little pieces of paper, but they effectively had sort of rituals and processes and tablets around which people could make check marks to record debts. Because money is debt. And we know that's kind of literally true, right? Like on a dollar, what makes a dollar a dollar? It's the part on it that says if you bring it to the treasury, we'll give you this much in gold. And they don't actually do that anymore. But that's what it says that on dollar bills, right? That's what the value of a dollar, a dollar is a debt. All dollars are debts from the US Treasury. Money is sort of literally this history of debt. And so the Graean argument that I find quite compelling is that the history of money is really a history of human society. And so we had money long before we were kind of moving pieces of paper around. And so we can't think about the questions of like, what money is and what do we want it to do are, as you were just saying earlier, they're questions of value. If we know what we want to do as a society, we can determine how to make the money system sort of do that for us. If what we want to make is 3 million bullets, we can make a money system that makes us a lot of bullets. If what we want to make is blankets, we can make a money system that makes us a lot of blankets. If what we want to do is capture territory and kill a bunch of strangers and enslave a bunch of people, we can also make a money system that does that. And I would argue that the sort of Keynesian argument is also this one of similar to what you're making. It's this argument about values. It's saying it's a better thing to do to design an economic system that makes lots of blankets than an economic system that makes a lot of bullets.

[Tom (Interviewer)]

If I understood that, well, I'll be able to sum it up in a single sentence, which is to map it to a law of physics. Value can be created, but it is only destroyed when you don't get a good of comparable value for the money that you created. This is probably better to say it in money. Money can, can. Money can be created, but it can only be destroyed if you fail to create a good of equal value. Meaning, if I've understood all that. Correct, and this is why I was saying earlier that inflation is a tricky beast and that it doesn't map one to one. Because if you create money and out of thin air, but you do it in such a way that it creates a good that people want. So you paid somebody with new fake, counterfeited money, printed however you want to think about it. If you pay them to make a bullet with that newly created money, as long as you get the bullet at the end, it was as if there was already a balance between the money and the thing. But if in the case of COVID you just give people a bunch of money and there's no economic output, then you do destroy that value. And now you are back to what I was saying, which is that form of theft where you printed money, nothing of economic value came out the other end. And so now you have literally taken from everybody and spread that you, you have, as they say, socialized the losses. Because we could get very complicated as to how the money gets into the system, which favors people that own assets, which then tends to favor the rich. And this is how you accelerate the rich, poor divide, which is another reason that people that are against Keynes absolutely hate money printing. But I can see the logic, even though I think it is a system that becomes so dangerous because you will some very distressing amount of the amount of time put money into the system without creating something of economic value. And therefore it takes.

[Graham Moore]

I think that's wonderfully put and I honestly, I agree with all of that. The yes, you're going to make mistakes. Sometimes you're going to print too much money. Sometimes, sometimes you're going to overshoot, sometimes you're going to undershoot. Right? You're always trying to gauge money printing to the amount of real world goods. And I actually liked a lot when you use the word value in your kind of Newtonian physics example, because I think value is a very good way of thinking about it. And another way of framing this Might be to say that. Here's why I think value is a good word to use here. Adam Smith would argue that there is no such thing as value. Adam Smith would argue that this cup is worth. The cup that I'm holding in my hand right now is worth exactly what I can convince you to pay for it. If I can convince you to give me a dollar for it, it's worth a dollar. If I can convince you to give me $100 for it, it's worth $100. There is no inherent worth or inherent value to this cup. Keynes would say that's bullshit. It does have inherent value. The inherent value is that it brings, in this case, the last bits of cold coffee to my lips. It does a thing. It physically does something. And that thing has value. And that thing has value to society. The money part that we use to sort of describe it, who cares? That's just the money bit. The value it has is real. So, yes, when we talk about. Which sounds a bit kind of airy and philosophical, but I think it has direct application to what you're describing about the kind of COVID era money printing that first the Trump administration and then the Biden administration did with the. I forget what they were called. There was two stimulus packages, right? The Trump era one and then the Biden era one. So I would. While neither were perfect, I would defend both and say that at the time in. They were 2020 and 2021, if I'm remembering this right, correct me if I'm getting the years wrong. I would make the argument that given what was the kind of societal cataclysm that was those couple Covid years printing too much money, you'd rather err on the side of too much than too little. And they erred on the side of too much. And I would argue, boy, did they ever err on the side of printing too much. They printed a lot too much. I don't think anyone would make the argument in hindsight that they printed just the right amount. They obviously printed too much. Hence the rise in the rate of inflation that we're seeing today. And we're seeing it all across the board, right? Because I think comparing it to Europe is a great example where, you know, inflation is bad in the US but compare it to Russian inflation. I mean, we're. What, isn't it like 15%, 20%? It's terrible in Russia. Compare it to. Someone in your comments can look up the numbers. It's much, much worse. Drew, or Drew can look it up, compare it to the UK was worse. France was worse. Germany was worse. The US has done, I would argue, comparatively quite well in response to sort of comparable economies across the world.

[Tom (Interviewer)]

Okay. I haven't looked at this, but I will say that because the US Dollar is a world reserve currency, we're actually outsourcing a lot of our inflation, which is partly why we don't feel it as much at home.

[Graham Moore]

Agree. I don't disagree with that. I will agree. Yeah, 100% agree with what you just said. But I would make the argument that if you're going back to 2020 and 2021, you'd want to. While ideally you would get the amount of money you'd print, the exact right number of dollars to precisely correspond to the amount of economic activity going in the world, you're looking at a period where there's widespread unemployment. Right. Where people are stuck at home, people are not producing goods, they're not producing value into the real world. No one is making cups. No one is making. I mean, I write books for a living. And I remember this period in 2020 where I had my book before this came out at the beginning of 2020, and we physically ran out of books because the printing presses stopped. Like the factory where they print. I don't even know where the factory where they print these hardcovers is. I think it's in the Northeast somewhere. The factory was shut down. Right. So there weren't any more books. That's a supply chain problem that had not been faced in the United States since I don't know when, if ever. So I can write as many books as I want, but we physically lacked the ability to print them and send them to people. People. So there's all this value that's being lost. So we're kind of printing money to fill the gap. And as you were just saying, obviously that money was. People were paying rent, people were. I mean, a lot of people used it to pay down debt, which is not super helpful. But people were not using that money to, I don't know, build highways or print books or build cups. And so we got a lot of inflation. The argument in. So the pro argument for that that I would make is better to err on the side of too much than too little. Because erring on the side of too little, too little could mean widespread unemployment the likes of which we've never seen in the United States since the Great Depression and the Great Depression. And while the inflation in the United States is currently not ideal and bad, it's a lot better than Great Depression era unemployment.