1 00:00:00,000 --> 00:00:02,877 So first of all, just a moment on AI. So you asked a question earlier which is 2 00:00:02,960 --> 00:00:05,517 like is is there like a there's a traditionalist view of like we need to 3 00:00:05,600 --> 00:00:08,437 go get the jobs that used to exist. We need to somehow bring them back. And and 4 00:00:08,520 --> 00:00:11,117 you know, and here you get into this argument of like well, you've got you 5 00:00:11,200 --> 00:00:13,797 know, Chinese laborers working for a dollar an hour or whatever. Like you're 6 00:00:13,880 --> 00:00:16,237 not going to get those jobs back. It's just not cost-effective to bring those 7 00:00:16,320 --> 00:00:19,557 jobs back. What we have though is we're we're at this very specific and 8 00:00:19,640 --> 00:00:22,397 important and fundamental and I think profound turning point in technology 9 00:00:22,480 --> 00:00:25,837 which is the rise of AI. Um and I would say that the good news, let's make the 10 00:00:25,920 --> 00:00:29,837 panel optimistic. The good news is the US is like by far the leader on AI. Now, 11 00:00:29,920 --> 00:00:32,557 by the way, we need to decide whether we want to be the leader in AI cuz there's 12 00:00:32,640 --> 00:00:35,277 like a lot of forces in the US and in the US government that are trying to 13 00:00:35,360 --> 00:00:38,237 prevent that from happening. >> But there's over a thousand laws at the 14 00:00:38,320 --> 00:00:40,677 state level we've been trying to fight and stop that would screw this up, 15 00:00:40,760 --> 00:00:42,477 right? So there's a lot of people who are against this. 16 00:00:42,560 --> 00:00:44,037 >> California state state government almost 17 00:00:44,120 --> 00:00:47,277 passed a law to outlaw AI in California uh six months ago which which is an 18 00:00:47,360 --> 00:00:48,677 indication of how crazy California is. 19 00:00:48,760 --> 00:00:52,397 But yes, that we we we can it's like everything else. We can have it if we 20 00:00:52,480 --> 00:00:55,597 want it. Uh these are all choices. But like AI's happening and AI's only 21 00:00:55,680 --> 00:00:58,357 happening in two places. Like it's only US versus China. There's a whole 22 00:00:58,440 --> 00:01:01,757 competition thing there. But like the US is like very powerful on this. And then 23 00:01:01,840 --> 00:01:05,037 by the way, US is benefiting a lot cuz Europe has basically made AI illegal. 24 00:01:05,120 --> 00:01:07,997 Like they're they're regulating themselves to death. And so the smart AI 25 00:01:08,080 --> 00:01:09,757 people in Europe are moving to the US. 26 00:01:09,840 --> 00:01:11,797 Um and so like the the US really is 27 00:01:11,880 --> 00:01:16,997 ground zero for AI. Um today AI is software, right? And so when you use AI, 28 00:01:17,080 --> 00:01:20,197 you use ChatGPT. It's an app on your phone, right? It it doesn't there's no 29 00:01:20,280 --> 00:01:22,597 manufacturing kind of component, you know, really to you know, people are 30 00:01:22,680 --> 00:01:25,397 building giant data centers. But you know, it's not a huge generator of like 31 00:01:25,480 --> 00:01:28,837 middle class jobs. Um but there's another turn on AI that's coming which 32 00:01:28,920 --> 00:01:33,557 is the turn to the turn to embodied physical AI which is robotics, right? Um 33 00:01:33,640 --> 00:01:35,957 and this is a transition that has already happened. It's already actually 34 00:01:36,040 --> 00:01:39,877 happened in drones uh where drones went from being human piloted to actually be 35 00:01:39,960 --> 00:01:41,277 auto you know, autonomously piloted. 36 00:01:41,360 --> 00:01:44,397 They they now fly themselves. Um it's a transition that's happening in 37 00:01:44,480 --> 00:01:47,517 cars right now, right? Where cars went from, you know, basically purely 38 00:01:47,600 --> 00:01:50,997 physical products to now basically being rolling computers that drive themselves. 39 00:01:51,080 --> 00:01:54,437 And if you if you haven't tried this yet, if go to go to if you ever have the 40 00:01:54,520 --> 00:01:57,817 misfortune of finding yourself in San Francisco, uh take a Waymo. 41 00:01:57,900 --> 00:02:00,477 >> [snorts] >> It's amazing to live in a cyberpunk 42 00:02:00,560 --> 00:02:03,797 future reality where you're in literally a state of the art self-driving car 43 00:02:03,880 --> 00:02:06,317 that's literally out of the Jetsons driving past people who are dying of 44 00:02:06,400 --> 00:02:09,557 fentanyl overdoses on the sidewalk. I recommend having the experience at least 45 00:02:09,640 --> 00:02:14,837 once. But the self-driving car really does work. Like it's really happening. And 46 00:02:14,920 --> 00:02:17,597 then what's going to happen you've all probably seen you know Elon has this 47 00:02:17,680 --> 00:02:19,517 Optimus robot that he's building. 48 00:02:19,600 --> 00:02:23,837 These humanoid robots like the general purpose robotics thing is going 49 00:02:23,920 --> 00:02:26,357 to happen and it's going to happen in the next decade and it's going to happen 50 00:02:26,440 --> 00:02:29,877 at giant scale. I I think there's a plausible argument which Elon also 51 00:02:29,960 --> 00:02:32,237 believes that robotics is going to be the biggest industry in the history of 52 00:02:32,320 --> 00:02:34,037 the planet. It's going to be gigantic. 53 00:02:34,120 --> 00:02:36,317 There's going to be billions, tens of billions, hundreds of billions of robots 54 00:02:36,400 --> 00:02:38,717 of all shapes, sizes, descriptions running around doing all kinds of 55 00:02:38,800 --> 00:02:42,837 things. Those robots need to get designed and built, right? And so my 56 00:02:42,920 --> 00:02:45,677 view is you know we don't try to get the old manufacturing jobs back. What we 57 00:02:45,760 --> 00:02:49,237 what we should do is lean hard into the manufacturing jobs of the future, which 58 00:02:49,320 --> 00:02:52,797 is designing and building all of these new things, right? By the way which 59 00:02:52,880 --> 00:02:56,637 includes drones and cars, right? And robots. 60 00:02:56,720 --> 00:02:59,237 And you know we shouldn't be building manufacturing lines that have people 61 00:02:59,320 --> 00:03:01,877 sitting on a rubber mat for 10 hours screwing screws in by hand, but we 62 00:03:01,960 --> 00:03:04,757 should be building you know what Elon calls he calls them alien dreadnought 63 00:03:04,840 --> 00:03:07,357 factories, right? Which is like these super sophisticated factories with like 64 00:03:07,440 --> 00:03:10,517 tons of robotics. But you can imagine thousands and 65 00:03:10,600 --> 00:03:13,037 thousands of different categories of industrial production that have to 66 00:03:13,120 --> 00:03:16,197 happen all across the US in order to make this happen. 67 00:03:16,280 --> 00:03:19,877 And and would cause just like enormous economic growth throughout the country. 68 00:03:19,960 --> 00:03:23,037 We'd get a huge payoff from all the tech investment that that the coasts are 69 00:03:23,120 --> 00:03:26,637 making, but we generate many tens or hundreds of millions of jobs in the 70 00:03:26,720 --> 00:03:30,317 countryside. And then the US would would lead. It would be you know be the third 71 00:03:30,400 --> 00:03:32,477 industrial or fourth industrial revolution. We would we would lead in 72 00:03:32,560 --> 00:03:34,597 the development of all these new things. 73 00:03:34,680 --> 00:03:37,197 And then you get to the national security side of this which is if you 74 00:03:37,280 --> 00:03:41,277 don't do this you're living in a world of Chinese robots everywhere. 75 00:03:41,360 --> 00:03:44,797 And that has you know very profound consequences for let's just say yeah 76 00:03:44,880 --> 00:03:46,717 profound consequences. >> I know you've been reading about and 77 00:03:46,800 --> 00:03:49,557 President Trump's been reading about from 100 years before which is which is 78 00:03:49,640 --> 00:03:53,477 William McKinley. William McKinley of course was a staunch protectionist at 79 00:03:53,560 --> 00:03:56,477 first. Uh and and is this historic historical 80 00:03:56,560 --> 00:03:59,397 example of how to revitalize American industry relevant today? Is it relevant 81 00:03:59,480 --> 00:04:03,517 to everything we're doing in AI and in energy? Like, how do you think about this? 82 00:04:03,600 --> 00:04:05,157 >> Yeah, so I've been doing my best to kind 83 00:04:05,240 --> 00:04:07,797 of spin up in the history of this. And so there there was something in the 19th 84 00:04:07,880 --> 00:04:11,557 century, uh actually originally created by Alexander Hamilton uh when he was 85 00:04:11,640 --> 00:04:15,637 Treasury Secretary, called the American system. Um and and and really what what 86 00:04:15,720 --> 00:04:18,477 they were and this is even, you know, this is like 80 years before McKinley, 87 00:04:18,560 --> 00:04:21,437 um 90 years before McKinley. Uh you know, what they were dealing with was 88 00:04:21,520 --> 00:04:23,277 the the the the British Empire, right? 89 00:04:23,360 --> 00:04:26,197 The UK was the preeminent industrial power. You know, they they were the 90 00:04:26,280 --> 00:04:30,837 first like giant industrial power uh on on on planet Earth. Um and it had built 91 00:04:30,920 --> 00:04:34,117 this, you know, very commanding economic, technological, military uh 92 00:04:34,200 --> 00:04:36,357 position. And of course, America, you know, at the at the time of the 93 00:04:36,440 --> 00:04:39,317 revolution was mostly farmland. Um and then there was this raging debate 94 00:04:39,400 --> 00:04:42,157 between Hamilton and Jefferson as to whether you you'd want America to be an 95 00:04:42,240 --> 00:04:45,517 industrial, you know, kind of urban, financialized power, which is what 96 00:04:45,600 --> 00:04:48,477 Hamilton wanted, or of kind of a rural, you know, kind of rural farming 97 00:04:48,560 --> 00:04:51,237 aristocratic uh power, which is what Jefferson wanted. And you know, and 98 00:04:51,320 --> 00:04:54,317 Hamilton won that debate. And so that led to what was called the American 99 00:04:54,400 --> 00:04:57,997 system. The American system led to, you know, the creation of the United States 100 00:04:58,080 --> 00:05:01,797 as an industrial power that developed over the course of the 19th century. But 101 00:05:01,880 --> 00:05:05,677 it really took off at the tail end of the 19th century in what was called the 102 00:05:05,760 --> 00:05:08,837 what's called the Second Industrial Revolution. And so between, call it 103 00:05:08,920 --> 00:05:12,517 1870, 1880, and like 1930, basically 104 00:05:12,600 --> 00:05:16,797 everything we view today as the modern world um was basically invented uh then. 105 00:05:16,880 --> 00:05:20,357 And and like you could almost look around the room here today, and you 106 00:05:20,440 --> 00:05:23,477 could say basically every piece of physical infrastructure, everything 107 00:05:23,560 --> 00:05:26,997 around us, you know, literally everything. The airplane, um you know, 108 00:05:27,080 --> 00:05:31,117 manufacturing techniques to be able to make um uh to be able to make uh you know, 109 00:05:31,200 --> 00:05:33,397 modern modern, you know, glassware, 110 00:05:33,480 --> 00:05:36,397 um uh at scale, um uh air conditioning, 111 00:05:36,480 --> 00:05:40,637 um you know, television, radio, uh you know, auto uh the automobiles we drove 112 00:05:40,720 --> 00:05:45,237 to get here, um you know, it it all was a uh the the result of the Second 113 00:05:45,320 --> 00:05:48,237 Industrial Revolution. And then the McKinley presidency was right in the 114 00:05:48,320 --> 00:05:49,837 middle of that of of of that period. 115 00:05:49,920 --> 00:05:53,077 It's really when the whole thing catalyzed. Um and so, it was really the 116 00:05:53,160 --> 00:05:55,917 point at which America became the the the world's industrial superpower. And 117 00:05:56,000 --> 00:05:58,957 then, of course, that led to America being able to become a huge player in 118 00:05:59,040 --> 00:06:02,357 both World War I and World War II, you know, ultimately, you know, we you know, 119 00:06:02,440 --> 00:06:05,477 you you know, winning winning World War II and and and becoming the uh you know, 120 00:06:05,560 --> 00:06:08,317 the arsenal of democracy. They all kind of flowed out of that 121 00:06:08,400 --> 00:06:11,357 period. And and so, and and the and the the American system is something that 122 00:06:11,440 --> 00:06:13,517 people really don't like to talk about these days cuz it was heavily 123 00:06:13,600 --> 00:06:17,397 protectionist. Um and the the whole theory of it was you you don't 124 00:06:17,480 --> 00:06:21,437 industrialize uh just with like a single technology or a single company. You 125 00:06:21,520 --> 00:06:24,917 industrialize by having an entire ecosystem, right? You industrialize by 126 00:06:25,000 --> 00:06:27,277 having, you know, not just three car companies, but by having all the 127 00:06:27,360 --> 00:06:31,557 thousands of parts suppliers that make all the parts for the cars. Um and so, 128 00:06:31,640 --> 00:06:34,757 the the Brits had done this. They had run a very uh heavily protectionist uh 129 00:06:34,840 --> 00:06:38,877 program to be able to boot up the first industrial revolution in the UK. You 130 00:06:38,960 --> 00:06:42,597 know, they then advocated for free trade when exports became more important. Uh 131 00:06:42,680 --> 00:06:45,637 McKinley was the inheritor of the American system. And so, he was heavily 132 00:06:45,720 --> 00:06:48,317 protectionist to build up the second industrial revolution. And then, he 133 00:06:48,400 --> 00:06:51,437 actually switched to become more of an advocate for free trade because his 134 00:06:51,520 --> 00:06:54,237 American exporters were becoming more successful. They needed exports. They 135 00:06:54,320 --> 00:06:56,117 needed They needed foreign markets. 136 00:06:56,200 --> 00:06:59,717 Um and then, by the way, um in the 20th century, basically, every industrial 137 00:06:59,800 --> 00:07:02,477 revolution in every other country that has worked in the last 100 years 138 00:07:02,560 --> 00:07:04,077 basically follows that model as well. 139 00:07:04,160 --> 00:07:07,077 So, you know, it's it's the same thing Germany did. It's the same thing Japan 140 00:07:07,160 --> 00:07:10,037 did. It's the same thing Korea did. It's the same thing China uh is doing right 141 00:07:10,120 --> 00:07:14,677 now. China's basically been running the American system playbook um in China. 142 00:07:14,760 --> 00:07:17,957 And so, and then, this this goes to tariff policy. And like, I and and and 143 00:07:18,040 --> 00:07:20,197 and I'm not here to like make an argument like it's like in favor of 144 00:07:20,280 --> 00:07:23,437 tariffs, but more of like a historical observation that there has been this 145 00:07:23,520 --> 00:07:27,517 phenomenon over time that if you want to have the kind of clustering effect that 146 00:07:27,600 --> 00:07:32,037 leads to industrial preeminence, uh it is not unusual uh to have, you know, a 147 00:07:32,120 --> 00:07:35,437 combination of of of of of tools and you know, kind of tools and methods used to 148 00:07:35,520 --> 00:07:38,317 do that. You know, it it has been historically characteristic that tariffs 149 00:07:38,400 --> 00:07:41,637 would be a part of that. But, it's also historically characteristic that there 150 00:07:41,720 --> 00:07:44,437 there becomes this point when you also therefore want to go for exports and you 151 00:07:44,520 --> 00:07:48,117 want to go for free trade. Um and and and McKinley specifically, you know, he 152 00:07:48,200 --> 00:07:51,717 ran for office very much on the idea of having a high and permanent tariff. Once 153 00:07:51,800 --> 00:07:54,637 he was in office, he switched more to a model of what he what he called 154 00:07:54,720 --> 00:07:57,837 reciprocity. Uh right? And and basically it was, you 155 00:07:57,920 --> 00:08:00,957 know, we we start out by tariffing, but the goal actually is to get everybody to 156 00:08:01,040 --> 00:08:04,037 lower their tariffs. That that you know, the goal is to get a a a world of much 157 00:08:04,120 --> 00:08:07,037 more free trade and then therefore these American exporters are able to to 158 00:08:07,120 --> 00:08:10,837 succeed globally. Um and and of course he was able he was able to use tariffs 159 00:08:10,920 --> 00:08:13,757 as American tariffs as a lever to get other countries to drop their tariffs. 160 00:08:13,840 --> 00:08:17,517 And so in that sense, [clears throat] what we're going through right now in the US 161 00:08:17,600 --> 00:08:20,837 is is sort of very characteristic of that. And what makes maybe the whole 162 00:08:20,920 --> 00:08:24,197 thing, you know, kind of more poignant is, you know, there is this kind of 163 00:08:24,280 --> 00:08:27,037 fundamental underlying question, which is do we want the US to be an industrial 164 00:08:27,120 --> 00:08:30,357 superpower or not? Right? And in the 19th century they were like completely 165 00:08:30,440 --> 00:08:32,997 clear that they wanted that. And in in our time, you know, I I think we're 166 00:08:33,080 --> 00:08:35,517 we're still ambiguous about >> Uh I want to shift a little bit ask you 167 00:08:35,600 --> 00:08:38,477 about how Silicon Valley, which, you know, has really been that one of the 168 00:08:38,560 --> 00:08:42,917 greatest engines of innovation in human history, how did it become so illiberal, 169 00:08:43,000 --> 00:08:47,477 uh woke we call it, and how do how do we fix it? How do we break out of that? 170 00:08:47,560 --> 00:08:50,797 >> Yeah, so it's a real you know, it's a real puzzle. Um I I think there's a very 171 00:08:50,880 --> 00:08:54,877 straightforward explanation for the why it happened, um which is basically it 172 00:08:54,960 --> 00:08:57,637 has to do with a one of the one of the fundamental 173 00:08:57,720 --> 00:09:01,037 personality traits of human beings called openness, trait openness, which 174 00:09:01,120 --> 00:09:03,357 is one of the big five kind of personality traits. 175 00:09:03,440 --> 00:09:06,877 Uh openness, which is by definition, um you know, people who are super into 176 00:09:06,960 --> 00:09:09,797 technology and entrepreneurship are, you know, we're we're highly open people. We 177 00:09:09,880 --> 00:09:12,637 love new ideas and and and we love doing new things. 178 00:09:12,720 --> 00:09:16,117 Um and then there's just on the political spectrum it just openness is 179 00:09:16,200 --> 00:09:20,077 is openness is a trait of the left. Um and uh and then you know, the the on the 180 00:09:20,160 --> 00:09:22,197 other side on the right is conscientiousness. 181 00:09:22,280 --> 00:09:25,637 Um you know, so structure and order, which is a a trait on the right. And so 182 00:09:25,720 --> 00:09:29,197 so we we just And by the way, this is not just tech. This is true in the arts. 183 00:09:29,280 --> 00:09:31,957 Any any any time you have a clustering of people who are high in openness, 184 00:09:32,040 --> 00:09:34,077 inevitably they're they're on the they're on the political left and 185 00:09:34,160 --> 00:09:38,117 usually very far uh to the political left. And so I I think we're we're we're 186 00:09:38,200 --> 00:09:42,277 just a classic example of what happens when very open people cluster together. 187 00:09:42,360 --> 00:09:45,397 Um, you know, you read these kind of again, these kind of historical things 188 00:09:45,480 --> 00:09:48,157 in the newspaper or whatever that Silicon Valley is so, you know, hotbed 189 00:09:48,240 --> 00:09:51,437 of, you know, libertarianism or, you know, incipient whatever cryptofascism 190 00:09:51,520 --> 00:09:54,757 or whatever. And it's like it's just like not true. It's like, you know, the 191 00:09:54,840 --> 00:09:58,197 valley is like 99% you know, Democrat and you can see that in the political 192 00:09:58,280 --> 00:10:02,157 donations and the voting patterns um, and and and everything else. And so, 193 00:10:02,240 --> 00:10:05,917 it is just it's a it's a classic left-wing democratic um, environment. 194 00:10:06,000 --> 00:10:09,117 Um, you know, look, I think people should have the politics 195 00:10:09,200 --> 00:10:11,277 that they want to have if they're voting for the people they like and they're 196 00:10:11,360 --> 00:10:12,597 getting the results that they want. 197 00:10:12,680 --> 00:10:15,597 >> But I didn't just say like left or liberal, I said illiberal too. Like why 198 00:10:15,680 --> 00:10:18,757 is this so illiberal? Cuz that wasn't the case in the '90s, right? Or was it? 199 00:10:18,840 --> 00:10:21,277 >> Well, but you know, it's it's a this is the para- the paradox of tolerance, 200 00:10:21,360 --> 00:10:25,637 right? Like to right to be to be maximally to be maximally tolerant, we 201 00:10:25,720 --> 00:10:29,557 can we have to be intolerant of intolerance. Right? Um, and so, right? 202 00:10:29,640 --> 00:10:32,597 And so, it it it is absolutely morally required if if if you're going to 203 00:10:32,680 --> 00:10:35,677 maximize tolerance above everything else, you have to be intolerant towards 204 00:10:35,760 --> 00:10:38,637 the intolerant. And and and and and that's how liberalism becomes 205 00:10:38,720 --> 00:10:43,357 illiberalism. I I quibble with the illiberal illiberal quibble with the 206 00:10:43,440 --> 00:10:47,517 illiberalism framing of it because I actually don't think it's something you 207 00:10:47,600 --> 00:10:50,117 and I might disagree on. I don't think illiberalism I don't think what's 208 00:10:50,200 --> 00:10:52,837 happening now is a betrayal of liberalism. I think it's just the full 209 00:10:52,920 --> 00:10:55,837 realization of liberalism. Like I think it's it's it's what happens when you 210 00:10:55,920 --> 00:10:59,277 take liberalism to the extreme, which is you declare war on the intolerant, 211 00:10:59,360 --> 00:11:01,877 right? And then and then the fact that you yourself have become intolerant, 212 00:11:01,960 --> 00:11:04,837 like somehow you never quite like wrap your head around that, but off you go. 213 00:11:04,920 --> 00:11:08,757 >> I think a lot of us have noticed that our cities are deeply dysfunctional. 214 00:11:08,840 --> 00:11:11,597 They're they're broken in our society, right? You have I think we have a 215 00:11:11,680 --> 00:11:14,437 candidate who's like a socialist Islamist who's in danger of taking over 216 00:11:14,520 --> 00:11:17,917 New York very soon right now. And we have we have we have all sorts of 217 00:11:18,000 --> 00:11:22,037 problems. People can't afford to have kids in cities the way they're set up. I 218 00:11:22,120 --> 00:11:25,357 think there's this cost disease for everything. Like what what went wrong? 219 00:11:25,440 --> 00:11:28,237 What's going on with these cities? And and what's what's an optimistic take on 220 00:11:28,320 --> 00:11:29,677 it, Mark? How do you how do we fix this? 221 00:11:29,760 --> 00:11:33,237 >> Yeah, so the guy in the guy in New York is interesting And he's you know kind of 222 00:11:33,320 --> 00:11:36,077 running slight slightly behind Cuomo for New York mayor, but he's literally 223 00:11:36,160 --> 00:11:40,237 running a platform among other things of having city-owned grocery stores. 224 00:11:40,320 --> 00:11:42,677 Right. And so and so that you know the joke is you know he's reinventing 225 00:11:42,760 --> 00:11:45,997 breadlines you know for the 21st century like you know 226 00:11:46,080 --> 00:11:48,717 really tremendous tremendously tremendous platform. 227 00:11:48,800 --> 00:11:52,557 Um the Seattle is another case study of this. Seattle to give you a sense how 228 00:11:52,640 --> 00:11:55,877 crazy things are that that the district in Seattle the city council district 229 00:11:55,960 --> 00:12:00,397 where the most Microsoft and Amazon executives lived live elected 230 00:12:00,480 --> 00:12:05,007 city councilwoman who ran a platform of nationalizing Microsoft and Amazon. 231 00:12:05,090 --> 00:12:07,117 >> [laughter] >> Um right. And then you know in the Bay 232 00:12:07,200 --> 00:12:10,037 Area I've got you know it's you know I I live in I live in ground zero of 233 00:12:10,120 --> 00:12:13,477 dysfunction and collapse and I've got I've got I've got thousands of stories 234 00:12:13,560 --> 00:12:16,197 from the Bay Area. Yeah. So like I think there's like a 235 00:12:16,280 --> 00:12:19,917 very fundamental political economy thing happening which which is which which 236 00:12:20,000 --> 00:12:22,717 falls out of this sort of economic transformation that's happened and this 237 00:12:22,800 --> 00:12:23,877 policy transformation that's happened. 238 00:12:23,960 --> 00:12:26,397 And so the there's a guy there's a French actually 239 00:12:26,480 --> 00:12:30,637 a French writer geographer who has I think the best analysis on this. Um 240 00:12:30,720 --> 00:12:32,957 and he's written a great book on it called Twilight of the Elites. And what 241 00:12:33,040 --> 00:12:36,117 he basically observes is if you look at all the Western countries through this 242 00:12:36,200 --> 00:12:39,877 process of sort of deindustrialization and financialization and technology you 243 00:12:39,960 --> 00:12:42,877 know sort of technology knowledge work you know becoming preeminent at the 244 00:12:42,960 --> 00:12:47,117 height of the economy you sort of have this pattern where basically like 245 00:12:47,200 --> 00:12:50,117 in an agricultural economy or in a manufacturing economy you kind of have 246 00:12:50,200 --> 00:12:52,557 to spread everything out throughout the country cuz like natural resources 247 00:12:52,640 --> 00:12:56,037 really matter and energy really matters and physical infrastructure matters and 248 00:12:56,120 --> 00:12:59,637 access to you know trains and all these things you know really rivers and water 249 00:12:59,720 --> 00:13:02,917 and so forth really matters. But if you're if you're going to replant your 250 00:13:03,000 --> 00:13:05,797 the sort of commanding heights of your economy on knowledge work then what 251 00:13:05,880 --> 00:13:07,877 you're going to do is you're going to slam basically all economic growth into 252 00:13:07,960 --> 00:13:11,157 the cities. Right? Cuz you you which is what what Silicon Valley has done. 253 00:13:11,240 --> 00:13:14,117 Right? So you want all the software developers in one place. And and you 254 00:13:14,200 --> 00:13:16,397 want them you know they're going to the good news is they're going to eat at 255 00:13:16,480 --> 00:13:18,997 high-end restaurants and they're going to employ a lot of nannies. But like 256 00:13:19,080 --> 00:13:21,797 fundamentally they're going to be sitting in conference rooms you know 257 00:13:21,880 --> 00:13:24,717 designing software together. And and you want that to happen in a 258 00:13:24,800 --> 00:13:28,597 single concentrated place. Um And so what happens is basically this 259 00:13:28,680 --> 00:13:32,077 the city's become a magnet for basically two kinds of people. One is sort of the 260 00:13:32,160 --> 00:13:35,357 upper class, which is to say kind of the you know, highly educated elite in the 261 00:13:35,440 --> 00:13:38,237 knowledge of professions uh who make enough money where they can 262 00:13:38,320 --> 00:13:42,477 afford to buy, you know, $3 million houses. Um and then you've basically got 263 00:13:42,560 --> 00:13:45,717 the So you've got basically like super expensive homes and then you've got 264 00:13:45,800 --> 00:13:48,717 public housing, which is so-called public housing, right? Council estates 265 00:13:48,800 --> 00:13:52,917 in the UK or section 8 8H or whatever it is housing here. Um where you've got, 266 00:13:53,000 --> 00:13:56,077 you know, basically public housing. And so and then and then the public housing 267 00:13:56,160 --> 00:13:59,037 is is is, you know, it's basically it's it's, you know, it's it's, you know, 268 00:13:59,120 --> 00:14:01,557 people who are very low-paid, kind of on the you know, low end of the service 269 00:14:01,640 --> 00:14:04,397 economy. >> [snorts] >> Um and then and then and then that's the 270 00:14:04,480 --> 00:14:07,277 city. And and then who's squeezed out of the city is basically, right, the entire 271 00:14:07,360 --> 00:14:09,837 middle class is squeezed out. And just to give you an example of this in the 272 00:14:09,920 --> 00:14:12,957 Bay Area, if you're a cop or a firefighter in the Bay Area and you work 273 00:14:13,040 --> 00:14:16,357 in Palo Alto, you can be there 3 hours both ways. 274 00:14:16,440 --> 00:14:20,037 Uh just to be able to like have a house and afford a family, right? And and then 275 00:14:20,120 --> 00:14:22,077 of course you look what's happening in the cities and like it's, you know, 276 00:14:22,160 --> 00:14:24,477 there's there's like lots of dogs, there's very few kids, right? And it's 277 00:14:24,560 --> 00:14:27,437 like, you know, what on earth is that about? Well, you you can't buy a house. 278 00:14:27,520 --> 00:14:30,957 You you you can't you can't you can't have a family. Um you may not even own a 279 00:14:31,040 --> 00:14:33,237 car. Like how are you going to kids anywhere? 280 00:14:33,320 --> 00:14:36,117 But what happens is from from a political standpoint is the cities then 281 00:14:36,200 --> 00:14:40,637 are run, right? They're in in in their local democracies, it's these super 282 00:14:40,720 --> 00:14:43,237 high-end kind of, you know, very progressive elites and then it's sort of 283 00:14:43,320 --> 00:14:47,557 the clientele underclass, right? Um that um you know, of of, you know, in the US 284 00:14:47,640 --> 00:14:50,477 it's Hispanic immigrants or African Americans. You know, in Europe it's 285 00:14:50,560 --> 00:14:52,477 it's, you know, they're you know, they're they're other kind of uh 286 00:14:52,560 --> 00:14:56,157 clientele underclass that they've developed in places like Paris. Um and 287 00:14:56,240 --> 00:14:59,277 so you've got this high plus you you've got this kind of old political kind of 288 00:14:59,360 --> 00:15:02,037 structure of of, you know, sort of top plus bottom, you know, kind of 289 00:15:02,120 --> 00:15:04,677 configuration. What you've done is you squeezed the middle and you've ejected 290 00:15:04,760 --> 00:15:08,037 the middle out of the cities into the countryside, but you've deindustrialized 291 00:15:08,120 --> 00:15:11,877 and so there's no new economic activity happening in the countryside uh for all 292 00:15:11,960 --> 00:15:12,957 the middle class people to do. 293 00:15:13,040 --> 00:15:14,877 >> so far is not an optimistic panel, Mark. 294 00:15:14,960 --> 00:15:17,677 >> I'm sorry. >> [laughter] >> Sorry. 295 00:15:17,760 --> 00:15:19,037 Let me try to make it optimistic. Sorry. 296 00:15:19,120 --> 00:15:20,197 Let me try to make it optimistic. 297 00:15:20,280 --> 00:15:22,117 >> I okay. >> Let me try to make it optimistic. These 298 00:15:22,200 --> 00:15:23,957 are choices. Like these are choices. 299 00:15:24,040 --> 00:15:27,397 These are policy choices. Like sometimes the way this stuff gets 300 00:15:27,480 --> 00:15:30,237 painted as that these are just like impersonal economic forces or technology 301 00:15:30,320 --> 00:15:33,037 forces. And of course, you know, I get this a lot. It's like you idiot, don't 302 00:15:33,120 --> 00:15:35,717 you understand that like, you know, it's it's just like, you know, manufacturing 303 00:15:35,800 --> 00:15:38,397 is old fashion. We have this all this new stuff. We shouldn't need, you know, 304 00:15:38,480 --> 00:15:42,957 what what No, these are choices. Like there were specific choices made. So, 305 00:15:43,040 --> 00:15:45,477 the classic choice the classic choice that was made I'll be since I'm at the 306 00:15:45,560 --> 00:15:49,717 Reagan Library I'll be I'll beat up on Nixon. Um, so Richard Nixon the year I 307 00:15:49,800 --> 00:15:53,477 was born 1971 he proposed something called Project Independence. Uh, he he 308 00:15:53,560 --> 00:15:55,077 actually visionary visionary president. 309 00:15:55,160 --> 00:15:58,437 He saw the energy crisis coming. Um, and he said it's a national imperative to 310 00:15:58,520 --> 00:16:01,797 build a thousand new nuclear power plants uh, in the civilian nuclear power plants 311 00:16:01,880 --> 00:16:05,317 in the US by the year 2000. Cut the entire US electric grid over to nuclear. 312 00:16:05,400 --> 00:16:06,517 >> Right. >> It would by the way it would have gotten 313 00:16:06,600 --> 00:16:09,437 us to electric cars, you know, probably 30 40 years faster. 314 00:16:09,520 --> 00:16:12,517 Um, and would have completely separated us from strategic involvement in the in 315 00:16:12,600 --> 00:16:16,357 the in the Middle East for for for energy. Um, so that was the good news. 316 00:16:16,440 --> 00:16:19,317 The bad news is he created the EPA and the Nuclear Regulatory Commission which 317 00:16:19,400 --> 00:16:22,357 then prevented Project Independence from happening and of course the no new 318 00:16:22,440 --> 00:16:24,157 nuclear power plants got built. 319 00:16:24,240 --> 00:16:26,397 But But that was a policy choice, right? 320 00:16:26,480 --> 00:16:28,957 And And I'm sure that was not the out that was not the result that he 321 00:16:29,040 --> 00:16:30,757 intended, but that was a policy choice. 322 00:16:30,840 --> 00:16:34,477 Um, and so you know, And And by the way, a lot of this is happening right now in 323 00:16:34,560 --> 00:16:37,237 Washington. Like there is an opportunity to look at everything from nuclear 324 00:16:37,320 --> 00:16:40,637 power, minerals, natural resources. I was on a call this morning on it natural 325 00:16:40,720 --> 00:16:43,957 resources with very promising progress being made. Um, you know, rare earth 326 00:16:44,040 --> 00:16:46,557 metals there's in you know, construction. 327 00:16:46,640 --> 00:16:50,157 We have a project to build a new city um, in California. Um, we bought, you 328 00:16:50,240 --> 00:16:55,117 know, four times the acreage of of Manhattan. Uh, in Solano County. Um, you 329 00:16:55,200 --> 00:16:57,357 know, we have the opportunity to build like entirely new cities in this 330 00:16:57,440 --> 00:17:01,677 country. Um, you know, we like there's any number of things any number of these 331 00:17:01,760 --> 00:17:04,477 policy decisions that we could make that would cause a revitalization. 332 00:17:04,560 --> 00:17:06,757 >> So, we're So, we're going to fix better policies. There's something else going 333 00:17:06,840 --> 00:17:09,277 on though which I think you and I are both very bullish on and which is which 334 00:17:09,360 --> 00:17:11,157 is these AI wave and AI services, right? 335 00:17:11,240 --> 00:17:14,717 And so I think I think one thing is very interesting right now is obviously we 336 00:17:14,800 --> 00:17:17,637 all know there's major cost disease in our society. Healthcare is becoming more 337 00:17:17,720 --> 00:17:20,957 and more unaffordable. We I think people are talking about our $36 trillion debt. 338 00:17:21,040 --> 00:17:23,957 It's actually 150 trillion more if you include our health care promises. It's a 339 00:17:24,040 --> 00:17:27,437 much bigger problem. Uh you obviously education, housing, all these things are 340 00:17:27,520 --> 00:17:30,717 becoming less affordable. But but you and I have both seen that a lot of these 341 00:17:30,800 --> 00:17:33,277 new technologies are going to turn some of these services into much more 342 00:17:33,360 --> 00:17:35,797 affordable products. And I think we're making big bets on that. So tell tell us 343 00:17:35,880 --> 00:17:38,357 about this. >> The this new regulation on AI that's 344 00:17:38,440 --> 00:17:41,237 coming out will basically completely prevent anyone from using AI at all in 345 00:17:41,320 --> 00:17:44,317 Europe and just put them way behind. And you know, everyone hates Brexit in the 346 00:17:44,400 --> 00:17:47,037 UK where I am right now. Well, not everyone, but a lot of people do. And in 347 00:17:47,120 --> 00:17:50,157 London they hate it overall. Uh but one of the bright sides may be that they 348 00:17:50,240 --> 00:17:53,597 escape Europe's terrible regulatory regime on AI. Maybe it maybe frees them 349 00:17:53,680 --> 00:17:57,797 from it ironically and helps out. Like what are the actual biggest dangers for 350 00:17:57,880 --> 00:18:01,237 countries with AI? Like is Europe going to be left behind? And and and and and 351 00:18:01,320 --> 00:18:04,637 and how should we think about the race with China in that regard as well? 352 00:18:04,720 --> 00:18:07,357 >> Yeah, so let me look. Europe seems I just take them at their word. They seem 353 00:18:07,440 --> 00:18:10,517 determined to They seem determined They seem enthusiastic about being left 354 00:18:10,600 --> 00:18:14,917 behind. Um they seem to really badly want that. Um you know, that look they 355 00:18:15,000 --> 00:18:18,277 data Here's one where the where the data is clear, which is you know, 25 years 356 00:18:18,360 --> 00:18:21,157 ago if you did a list of the 50 biggest tech companies in the world, like a 357 00:18:21,240 --> 00:18:23,517 pretty significant number of them were European. It's like I don't know, 358 00:18:23,600 --> 00:18:25,437 probably 15 of the top 50 or something. 359 00:18:25,520 --> 00:18:28,077 You know, today you're you're basically down to Spotify. 360 00:18:28,160 --> 00:18:31,197 Um which is great. I love Spotify. But like it's you know, that's not that's 361 00:18:31,280 --> 00:18:33,277 not what the European tech sector used to be. 362 00:18:33,360 --> 00:18:38,077 Um and so you know, they they have sort of deliberately disarmed and turned away from 363 00:18:38,160 --> 00:18:41,797 technology and progress and capitalism in really profound ways for a long, you 364 00:18:41,880 --> 00:18:45,677 know, for decades now. And and yeah, look the the EU is designed to do this. 365 00:18:45,760 --> 00:18:48,277 That's kind of the whole point of the structure is to impose these kinds of 366 00:18:48,360 --> 00:18:51,197 controls and stop, you know, stop stop these kinds of things. 367 00:18:51,280 --> 00:18:55,037 Um and yeah, they they I mean they they they're very vocal about it. Like they 368 00:18:55,120 --> 00:18:57,997 they very much want it. I I think they would be very happy if AI didn't happen 369 00:18:58,080 --> 00:19:00,597 inside the EU. I think they'd be very happy if social media didn't exist. I 370 00:19:00,680 --> 00:19:04,837 think they'd be quite happy to shut up the internet. Um and so I I think the 371 00:19:04,920 --> 00:19:07,637 you know, the citizenry of the EU have an even more kind of pointed version of 372 00:19:07,720 --> 00:19:10,917 the of the question that that that that that our own citizens have. 373 00:19:11,000 --> 00:19:13,717 You know, I have a lot of friends who are like, you know, optimistic about 374 00:19:13,800 --> 00:19:16,117 this or that or the French are going to save it or whatever. And it's like I I 375 00:19:16,200 --> 00:19:19,597 hope that happens, but the overall, you know, kind of vector there is is is is 376 00:19:19,680 --> 00:19:24,717 in a very clear direction. Um and then look at look, China's the other China's 377 00:19:24,800 --> 00:19:28,277 the the sort of, you know, the China's sort of the the dog that didn't bark in 378 00:19:28,360 --> 00:19:31,117 a lot of these conversations. So So what I find is when I talk to people in 379 00:19:31,200 --> 00:19:33,917 Washington about AI or tech policy generally, there's two completely 380 00:19:34,000 --> 00:19:38,157 different conversations I can have with the same people the same person and on 381 00:19:38,240 --> 00:19:40,597 the same day. Um so conversation number 382 00:19:40,680 --> 00:19:45,637 one is a conversation about tech in the US, right? Um and so tech in the US, US 383 00:19:45,720 --> 00:19:49,037 government, US tech companies, US tech policy, you know, US society, all the 384 00:19:49,120 --> 00:19:52,477 all the all these issues. And and and that's a discussion that's characterized 385 00:19:52,560 --> 00:19:56,117 by just enormous antipathy and loathing from Washington towards American tech 386 00:19:56,200 --> 00:19:58,557 and towards, you know, increasingly just like flat-out capitalism, market 387 00:19:58,640 --> 00:20:00,757 economy, uh innovation kinds of things. 388 00:20:00,840 --> 00:20:03,957 Um I can have a completely different conversation with that same person where 389 00:20:04,040 --> 00:20:07,037 China's on the table. Um and the minute the China topic's on the table, it's a 390 00:20:07,120 --> 00:20:09,917 completely different conversation, which is how does the American public sector 391 00:20:10,000 --> 00:20:13,077 or private sector team up to make sure that we win versus China in this sort of 392 00:20:13,160 --> 00:20:16,757 new cold war cold cold war that's underway. Um and so, you know, the the 393 00:20:16,840 --> 00:20:19,997 cynical optimist in me would say as long as China's a big enough threat, it will 394 00:20:20,080 --> 00:20:23,557 be sufficient to kind of glue us together uh to be able to actually make 395 00:20:23,640 --> 00:20:26,877 some rational decisions uh as a society. Um you know, may maybe 396 00:20:26,960 --> 00:20:30,277 the presence of an external enemy is actually helpful to kind of galvanize, 397 00:20:30,360 --> 00:20:32,797 you know, kind of your own side because to you know, to organize and and and be 398 00:20:32,880 --> 00:20:36,037 smarter. Um you know, the cynical pessimist, 399 00:20:36,120 --> 00:20:40,117 right, would say China's not enough of a threat. Um and uh you know, boy, it 400 00:20:40,200 --> 00:20:43,277 would maybe be actually even a little bit more of a threat. 401 00:20:43,360 --> 00:20:46,277 Um you know, many other people would find this entire line of conversation 402 00:20:46,360 --> 00:20:50,197 horrifying. I I I would just say I I I don't actually know how to have a 403 00:20:50,280 --> 00:20:53,237 productive conversation with people in DC right now if they if they if they 404 00:20:53,320 --> 00:20:56,877 don't have China in their head cuz otherwise the the the sort of the the 405 00:20:56,960 --> 00:21:02,237 the the the the negative emotion, fear, whatever, um panic just turns internal 406 00:21:02,320 --> 00:21:03,757 and I I and I think it's very dangerous. 407 00:21:03,840 --> 00:21:06,277 >> A lot of people are very scared right now with the disruption. I'm very 408 00:21:06,360 --> 00:21:08,997 excited about the higher productivity cuz I see it being disinflationary. I 409 00:21:09,080 --> 00:21:12,837 see it creating more jobs. How How do we How do we If assuming we're aligned, how 410 00:21:12,920 --> 00:21:15,437 do we explain this to people? How do we explain this is actually a really good 411 00:21:15,520 --> 00:21:18,077 thing for the country cuz a lot of Luddites are going to attack this. They 412 00:21:18,160 --> 00:21:20,917 are going to try to stop it. >> Yeah, so the the Luddites the the 413 00:21:21,000 --> 00:21:23,677 Luddites are wrong. Neil Neil Luddites are wrong. They're wrong in the sense of 414 00:21:23,760 --> 00:21:26,717 like the for the reason they've always been wrong, which is the reality is we 415 00:21:26,800 --> 00:21:30,317 have not in the last 50 years been in an era of fast productivity growth 416 00:21:30,400 --> 00:21:33,357 technological change. We've been in an area of slow productivity change, slow 417 00:21:33,440 --> 00:21:36,557 economic growth. Uh AI if it works the way that actually 418 00:21:36,640 --> 00:21:38,917 people either hope or fear that it's going to work, it's going to cause 419 00:21:39,000 --> 00:21:42,237 productivity growth to shoot up. That will naturally accelerate uh economic 420 00:21:42,320 --> 00:21:46,117 growth. Um but look, if if it just stays as software, then the result of that is 421 00:21:46,200 --> 00:21:48,437 it's going to make the cities much better off, right? It's going to It's 422 00:21:48,520 --> 00:21:51,237 going to make San Francisco and LA and and New York much better off and Austin 423 00:21:51,320 --> 00:21:53,917 much better off, but it's still not going to answer this question of what 424 00:21:54,000 --> 00:21:56,837 happens in the countryside. Uh to answer the question of what happens in the 425 00:21:56,920 --> 00:21:59,517 countryside, you need you need to get to the next 426 00:21:59,600 --> 00:22:02,997 thing. You need You need to make AI hardware as as well as software. And And 427 00:22:03,080 --> 00:22:04,917 you're right back to that same prescription of basically 428 00:22:05,000 --> 00:22:07,917 reindustrializing the country. And again, not reindus- not 429 00:22:08,000 --> 00:22:10,477 reindustrializing the country on the stuff that has already left. 430 00:22:10,560 --> 00:22:13,277 Reindustrializing the country based on all the things that have to be invented 431 00:22:13,360 --> 00:22:17,117 and built. Um and it's just like we know I mean just like I'm just like incredibly 432 00:22:17,200 --> 00:22:20,717 highly confident that there's going to be these giant industries of you know 433 00:22:20,800 --> 00:22:23,837 computerized everything, AI powered all kinds of hardware of all kinds of 434 00:22:23,920 --> 00:22:26,197 shapes, sizes, and descriptions. You know, you're finding a lot of that kind 435 00:22:26,280 --> 00:22:28,837 of thing. I'm finding a lot of that kind of thing. I mean look, the entire 436 00:22:28,920 --> 00:22:30,797 defense base has to get rebuilt around this. 437 00:22:30,880 --> 00:22:31,997 >> We're going to redo the manufacturing. 438 00:22:32,080 --> 00:22:34,517 We're going to build roads and tunnels and everything cheaper. It's going to be 439 00:22:34,600 --> 00:22:37,357 exciting. >> Yeah. And so so so this this is this is 440 00:22:37,440 --> 00:22:40,237 the thing that that that this is the thing to do. Like the to me the path 441 00:22:40,320 --> 00:22:43,517 like on this is very clear cuz we we have to we have to do it we have to do 442 00:22:43,600 --> 00:22:46,237 this because it's necessary for national security standpoint. We have to do it 443 00:22:46,320 --> 00:22:48,637 because we need it we need the economic growth. We have to do it cuz we need an 444 00:22:48,720 --> 00:22:52,117 answer for the entire population of the country, not just the cities. 445 00:22:52,200 --> 00:22:54,957 Um and yeah, and we have to do it because if we don't do it, China's going 446 00:22:55,040 --> 00:22:56,717 to do it and we don't want to live in that world. 447 00:22:56,800 --> 00:23:00,477 >> Obviously, the second industrial revolution from 1870 to 1900 or so, I 448 00:23:00,560 --> 00:23:03,517 think it tripled the living standards in the US. But what do we learn from prior 449 00:23:03,600 --> 00:23:06,877 leaps in human progress and what lessons should we apply today and what mistakes 450 00:23:06,960 --> 00:23:09,317 should we avoid? You didn't you're not too concerned about mistakes, but are 451 00:23:09,400 --> 00:23:11,717 there lessons are there mistakes to avoid? How how how you thinking about 452 00:23:11,800 --> 00:23:14,397 this based on history? >> Yeah, so look the big thing is for a 453 00:23:14,480 --> 00:23:18,797 very long time we had a model or an ethos or an ethic of of industrial 454 00:23:18,880 --> 00:23:22,357 progress. It started with like um you know basically once upon a time it was 455 00:23:22,440 --> 00:23:25,197 uh to to for the greater glory of God it was to discover the secrets of the 456 00:23:25,280 --> 00:23:29,197 universe and nature as a way to to glorify God, but then that that turned into what 457 00:23:29,280 --> 00:23:32,757 became known as natural philosophy which turned into science 458 00:23:32,840 --> 00:23:36,397 uh and then the the enlightenment hit and then science became technology. Um 459 00:23:36,480 --> 00:23:40,277 that became industrialization and then you know we had about a 250 year run or 460 00:23:40,360 --> 00:23:45,077 something from basically like steam power through basically the 1970s 461 00:23:45,160 --> 00:23:48,197 um where we said wow this is great like we can build all these new things, we 462 00:23:48,280 --> 00:23:50,877 can do electric you know we can electrify, uh we can have you know 463 00:23:50,960 --> 00:23:53,557 lighting everywhere, um you know we can have you know 464 00:23:53,640 --> 00:23:57,397 antibiotics, we can have you know computers, we can have cars, you know we 465 00:23:57,480 --> 00:24:00,677 we can we can build all these amazing things. By the way, we can build 466 00:24:00,760 --> 00:24:03,877 weapons, right? We can build like you know guns and we can have like you know 467 00:24:03,960 --> 00:24:07,957 increasingly powerful tanks and aircraft and and so forth um 468 00:24:08,040 --> 00:24:10,757 uh and and we can do all these things you know good and bad or you can say 469 00:24:10,840 --> 00:24:14,437 maybe civilian and military or you know sort of pacifistic or or potentially 470 00:24:14,520 --> 00:24:17,157 violent, but we we have we have all these things that that we can do and and 471 00:24:17,240 --> 00:24:20,277 we should do these things like we should build these things and and by doing that 472 00:24:20,360 --> 00:24:23,157 you know and and certainly in in aggregate overwhelmingly we we we can 473 00:24:23,240 --> 00:24:26,797 improve the world and that that created the civilization that we live in today. 474 00:24:26,880 --> 00:24:30,677 Um you know I think basically things took a bit of a left turn in the 70s um 475 00:24:30,760 --> 00:24:34,717 with what was uh a concept invented by the German Greens at the time called uh 476 00:24:34,800 --> 00:24:38,877 the precautionary principle. Um and that sort of uh you know kind of corresponded 477 00:24:38,960 --> 00:24:42,517 with the rise of a lot of the kind of defining ethical ideas of our period 478 00:24:42,600 --> 00:24:47,477 um you know which basically basically advocated a much more cautious stance um 479 00:24:47,560 --> 00:24:51,237 and and that's very kind of an an evocative idea right now number one 480 00:24:51,320 --> 00:24:54,357 because it just seems so obvious to people in our modern world that if a 481 00:24:54,440 --> 00:24:57,437 technology is just going to release a new technology the burden should be on 482 00:24:57,520 --> 00:25:00,317 the technologists to prove that the technology is not harmful and that's 483 00:25:00,400 --> 00:25:02,637 what you keep hearing about about AI. 484 00:25:02,720 --> 00:25:05,677 Um, you know, the observation that I make is the German Greens invented that 485 00:25:05,760 --> 00:25:09,717 concept in the 1970s to stop nuclear power. Um, and I think, you know, the 486 00:25:09,800 --> 00:25:13,037 the consequences of stopping nuclear power 50 years later, you know, it it's 487 00:25:13,120 --> 00:25:17,757 just was just like a catastrophic mistake. Um, you know, geopolitically, 488 00:25:17,840 --> 00:25:20,437 it's directly connected to Russia's invasion of Ukraine. Europe is 489 00:25:20,520 --> 00:25:23,077 effectively funding Russia to invade Ukraine cuz they keep, you know, buying 490 00:25:23,160 --> 00:25:26,277 oil from them. Which they wouldn't need to buy if they were running all nuclear. 491 00:25:26,360 --> 00:25:27,797 And then of course, carbon emissions. 492 00:25:27,880 --> 00:25:31,357 Nuclear is carbon, you know, zero carbon. Um, and of course, the 493 00:25:31,440 --> 00:25:35,957 alternative to nuclear and to carbon, um, you know, oil is is is coal. And so, 494 00:25:36,040 --> 00:25:38,357 you know, emissions in Europe are are right now spiking through the roof 495 00:25:38,440 --> 00:25:40,637 because they're bringing all these coal plants online. 496 00:25:40,720 --> 00:25:43,757 Uh, and so anyway, like I would argue in the last 50 years we've we've we've 497 00:25:43,840 --> 00:25:46,317 played out this experiment with the so-called precautionary principle. It 498 00:25:46,400 --> 00:25:49,437 did not work well uh, for the technology it was invented 499 00:25:49,520 --> 00:25:52,637 for. I don't think it makes a lot of sense for most of the new technologies. 500 00:25:52,720 --> 00:25:55,997 There's now an attempt to apply that that that that ethos or that rule for 501 00:25:56,080 --> 00:25:59,237 AI, which I think would be another catastrophic mistake. And as as we sit 502 00:25:59,320 --> 00:26:02,237 here today, I think it it uh, it's uh, the future hangs in the balance because 503 00:26:02,320 --> 00:26:04,597 there's a lot of people who are pushing for that right now. At some point you 504 00:26:04,680 --> 00:26:07,797 have to ask the question of like, okay, what levels of controls are required to 505 00:26:07,880 --> 00:26:11,317 accomplish these various levels of goals? And then, um, to what extent are 506 00:26:11,400 --> 00:26:15,837 you ultimately basically destroying yourself um, in order to uh, in order to 507 00:26:15,920 --> 00:26:17,157 in order to basically save the world. 508 00:26:17,240 --> 00:26:19,877 And and and and and this is where things get very dystopian in the other 509 00:26:19,960 --> 00:26:24,517 direction very, very fast. Um, because what various people, and I won't I won't 510 00:26:24,600 --> 00:26:27,477 name names and whatever, but like there's a there's a general development 511 00:26:27,560 --> 00:26:30,877 of policy recommendations that are coming. Um, including from from some 512 00:26:30,960 --> 00:26:33,357 very big companies and some very respected people. And they say things 513 00:26:33,440 --> 00:26:36,797 like, well, you know, advanced chips ought to be registered. Um, and they say 514 00:26:36,880 --> 00:26:40,477 things like advanced chips ought to have like a monitoring agent on them so that 515 00:26:40,560 --> 00:26:42,597 the government can tell what people are doing with them. 516 00:26:42,680 --> 00:26:44,637 >> That's scary. >> Right. And then they ought to have an 517 00:26:44,720 --> 00:26:46,917 override. The government ought to have a kill switch. And if the government, you 518 00:26:47,000 --> 00:26:49,597 know, sees what you're doing on your computer and then they don't like it, 519 00:26:49,680 --> 00:26:53,037 they should be able to turn your computer off. Right. Um, and then, you 520 00:26:53,120 --> 00:26:56,477 know, the more extreme form of this is what was in Time magazine, which was a 521 00:26:56,560 --> 00:27:00,597 call for air strikes on rogue AI data centers. Right. And And by the way, in 522 00:27:00,680 --> 00:27:04,077 complete contravention of international law, right? Just like, yeah, screw it, 523 00:27:04,160 --> 00:27:07,237 bomb them. Um, and then some people in this movement are saying we should be 524 00:27:07,320 --> 00:27:10,037 willing to risk nuclear war in order to prevent or prevent hostile foreign 525 00:27:10,120 --> 00:27:13,397 states from using AI. And so, at this point, like, you're walking down a path 526 00:27:13,480 --> 00:27:17,797 basically saying, I want a global totalitarian superstate, omnipresent, 527 00:27:17,880 --> 00:27:22,637 right? Um, uh, authoritarian dictatorship that's monitoring every computer and every 528 00:27:22,720 --> 00:27:26,117 person and every chip and every piece of software. Um, and then I want to destroy 529 00:27:26,200 --> 00:27:29,437 anybody who deviates from that. And that's how I'm going to save things. 530 00:27:29,520 --> 00:27:32,397 Right? And so, that that that's what's gotten just like it to for me completely 531 00:27:32,480 --> 00:27:35,477 surreal about this whole discussion. And And I And I think this can only be 532 00:27:35,560 --> 00:27:40,037 happening cuz they we're in a moral panic right now. Um, but like the >> [laughter] 533 00:27:40,120 --> 00:27:42,997 >> the rationality has left the room for the time being, and I think I think we 534 00:27:43,080 --> 00:27:45,357 should bring it back. >> No, I I mean, and that's totally fair. I 535 00:27:45,440 --> 00:27:48,957 mean, the the the only excuse for that for me, if we talk about the Fermi 536 00:27:49,040 --> 00:27:52,237 paradox, the paradox of the fact that that that there, you know, seem to be 537 00:27:52,320 --> 00:27:55,437 trillions of worlds to support life, and then we're not seeing life. And one of 538 00:27:55,520 --> 00:27:58,677 the one of the possibilities is that as we get to this point and whenever a 539 00:27:58,760 --> 00:28:01,957 civilization figures out how to create thinking machines, it destroys itself 540 00:28:02,040 --> 00:28:04,517 somehow with the power of those machines. But it's the argument they're 541 00:28:04,600 --> 00:28:06,437 making, which I realize is maybe somewhat ridiculous, but if people 542 00:28:06,520 --> 00:28:09,757 believe that, of course, it would justify almost any of the things they're 543 00:28:09,840 --> 00:28:12,157 saying if they believe that. But I guess they're making a really big leap. 544 00:28:12,240 --> 00:28:15,997 >> Yeah, it's the precautionary principle on steroids. Um, and it leads to 545 00:28:16,080 --> 00:28:19,877 stagnation and and and violence and madness and death. Um, it's an 546 00:28:19,960 --> 00:28:22,477 incredibly anti-human philosophy. 547 00:28:22,560 --> 00:28:24,597 Um, you know, it's basically anti everything that's made Western 548 00:28:24,680 --> 00:28:28,157 civilization great, um, in terms of like what you do as a consequence of that. 549 00:28:28,240 --> 00:28:31,117 Uh, and then look, and then I would make one I would make one final claim against 550 00:28:31,200 --> 00:28:33,637 that kind of position, and I do hear that, and it's it's a completely 551 00:28:33,720 --> 00:28:37,157 unscientific position. By definition, it's a completely unscientific position 552 00:28:37,240 --> 00:28:40,517 because there is no way at all to prove or disprove the theory. 553 00:28:40,600 --> 00:28:45,437 Right. And so, it is the worst kind of ivory tower thought experiment. Um, and 554 00:28:45,520 --> 00:28:48,397 you know, the history If we've learned one thing from the last 100 years, it's 555 00:28:48,480 --> 00:28:50,877 that ivory tower thought experiments should not be the way that we determine 556 00:28:50,960 --> 00:28:52,997 the shape of society. >> Well, I think both of us see how health 557 00:28:53,080 --> 00:28:57,117 care doesn't need to take up 20% of our GDP, right? It's very obvious to AI to 558 00:28:57,200 --> 00:29:01,557 make these things half a third the cost for better outcomes. And yet, every one 559 00:29:01,640 --> 00:29:05,677 of our states in this country has very powerful provider and payer lobbies and 560 00:29:05,760 --> 00:29:08,917 has very powerful cartels to block competition. And so, if we want to go 561 00:29:09,000 --> 00:29:11,997 build something with AI, we're not allowed to right now. Like, do you see 562 00:29:12,080 --> 00:29:14,917 the left and the right tech working together to fight these special 563 00:29:15,000 --> 00:29:17,117 interests to actually fix the regulatory state cuz it's not like the 564 00:29:17,200 --> 00:29:18,197 administration could just do it, right? 565 00:29:18,280 --> 00:29:21,037 We have It's going to take a lot of effort. Like, what does that coalition 566 00:29:21,120 --> 00:29:24,757 look like of the of the of the good guys against this kind of broken regulatory 567 00:29:24,840 --> 00:29:27,797 cartel in all these industries? Is that Is that something we're going to all 568 00:29:27,880 --> 00:29:30,077 have to fight? >> Yeah, so the the way I think about this 569 00:29:30,160 --> 00:29:33,117 is there's basically, right, three components to the American dream. Right, 570 00:29:33,200 --> 00:29:36,077 there's house, you know, have a have a house, have a house for your kids where 571 00:29:36,160 --> 00:29:39,117 and you know, kind of by definition, this goes back to the geographic lens, 572 00:29:39,200 --> 00:29:41,597 the house needs to be like near a place where there's like great job 573 00:29:41,680 --> 00:29:43,997 opportunities, right? So, it can't be can't be a house in the middle of 574 00:29:44,080 --> 00:29:46,877 nowhere, it has to be a house where there's going to be great jobs, 575 00:29:46,960 --> 00:29:50,357 um and you know, a safe environment and so forth. Um number one, number two is 576 00:29:50,440 --> 00:29:52,637 is is health care. You need you need great health care for you and your 577 00:29:52,720 --> 00:29:55,317 family. And then three is education. You want to send your kids kids to good 578 00:29:55,400 --> 00:30:00,157 schools. Um if you disaggregate sectors of the economy over the last 25 years, 579 00:30:00,240 --> 00:30:03,557 what you find is basically everything that technology touches basically 580 00:30:03,640 --> 00:30:07,677 collapses in price. Um and so, television sets and you know, computer 581 00:30:07,760 --> 00:30:10,837 games and you know, everything, you know, anything anything with electronics 582 00:30:10,920 --> 00:30:13,397 in it basically that the the the the price is productivity growth in those 583 00:30:13,480 --> 00:30:17,037 sectors has advanced very fast, product prices have have have have collapsed. 584 00:30:17,120 --> 00:30:19,437 Everything is is much cheaper. Um but if 585 00:30:19,520 --> 00:30:24,157 you chart uh housing, education, and health care, um the prices of those 586 00:30:24,240 --> 00:30:27,237 things are skyrocketing, right? And and we all we all you you we all see this. 587 00:30:27,320 --> 00:30:29,917 It's just the price of housing is exploding, the price of education is 588 00:30:30,000 --> 00:30:32,597 exploding, and the the price of health care. I mean, health care is 20% of the 589 00:30:32,680 --> 00:30:37,677 economy on its way to 50%. Um and and so, the the the prices are exploding. 590 00:30:37,760 --> 00:30:40,997 And and and so, it's like, okay, what what makes health care what what makes 591 00:30:41,080 --> 00:30:44,197 those three components of the American dream have these exploding prices? It's 592 00:30:44,280 --> 00:30:48,317 basically it's two things. Number one is and these are interrelated, but number 593 00:30:48,400 --> 00:30:51,997 one is technology is not really touching them very much. The and you could say 594 00:30:52,080 --> 00:30:55,317 the tech industry has done a bad job at addressing housing and health care and 595 00:30:55,400 --> 00:30:57,917 education or or you could say that, you know, these industries have been 596 00:30:58,000 --> 00:31:00,517 resistant to it. But technology hasn't really touched 597 00:31:00,600 --> 00:31:03,397 them that much, which means that they productivity growth hasn't happened in 598 00:31:03,480 --> 00:31:06,877 them. And then the other thing is they're heavily regulated. They're they're 599 00:31:06,960 --> 00:31:09,197 heavily dominated by the government, they're heavily regulated and then in 600 00:31:09,280 --> 00:31:13,197 all three of those sectors, the government both restricts supply, 601 00:31:13,280 --> 00:31:17,957 right? And so zoning laws and university certifications and so forth, right? Mean 602 00:31:18,040 --> 00:31:21,957 that it's very hard to actually build new of of those three things. 603 00:31:22,040 --> 00:31:24,917 And then the government responds to the political pressure caused by the rising 604 00:31:25,000 --> 00:31:28,437 prices by subsidizing demand. And of course, if you subsidize demand and a 605 00:31:28,520 --> 00:31:31,677 fixed supply, you get skyrocketing prices, right? And so every time there's 606 00:31:31,760 --> 00:31:34,277 a housing crisis, you know, it's a perpetual housing crisis in California, 607 00:31:34,360 --> 00:31:37,437 the answer always is subsidies for home buyers, which always has the effect of 608 00:31:37,520 --> 00:31:39,837 driving prices up further and making the problem worse. 609 00:31:39,920 --> 00:31:44,517 Right. And so so so like that that that drives, you know, that those are the 610 00:31:44,600 --> 00:31:47,317 microeconomics of of what's happening. 611 00:31:47,400 --> 00:31:50,397 I don't think there's easy answers on this. I but I think the acknowledgement 612 00:31:50,480 --> 00:31:53,877 that this is in fact what's happening and then I think the the people I think 613 00:31:53,960 --> 00:31:57,237 the people have to decide that they do not want to live this way. 614 00:31:57,320 --> 00:32:00,757 I think like the ordinary the marginal American voter needs to decide it's just 615 00:32:00,840 --> 00:32:03,557 look it's just not acceptable that if I can't spend $3 million I can't have a 616 00:32:03,640 --> 00:32:06,637 house that's in a good neighborhood with a good job attached to it. And it's just 617 00:32:06,720 --> 00:32:09,197 not acceptable that a four-year college degree is going 618 00:32:09,280 --> 00:32:12,237 to cost you a million dollars, which is which is what it's on its way to doing. 619 00:32:12,320 --> 00:32:14,757 And it's just not acceptable that like this health care, you know, monster is 620 00:32:14,840 --> 00:32:17,797 running out of control. And and so you know, 621 00:32:17,880 --> 00:32:20,557 you know, in many ways like that this is like the fundamental, you know, policy 622 00:32:20,640 --> 00:32:23,117 political question of our time, you know, that kind of kind of needs to be 623 00:32:23,200 --> 00:32:26,037 dealt with. Again, these issues become much easier to deal with in a 624 00:32:26,120 --> 00:32:30,077 high-growth environment, right? And and in an environment with very rapid 625 00:32:30,160 --> 00:32:33,317 technological development. Let me give you the good news story on 626 00:32:33,400 --> 00:32:35,237 on health care. Everybody talks about health care, you can't break these 627 00:32:35,320 --> 00:32:38,797 curves. There's one area of health care that is incredibly sophisticated, 628 00:32:38,880 --> 00:32:41,957 technologically advanced, and the price curve looks like Moore's law. The price 629 00:32:42,040 --> 00:32:45,037 curve looks like video games. The price curve is just a straight line down, and 630 00:32:45,120 --> 00:32:48,957 the quality of the service has gone way up. And And that's LASIK eye surgery. 631 00:32:49,040 --> 00:32:51,837 Right? And And the reason it's And the reason that's the case is cuz it's it's 632 00:32:51,920 --> 00:32:55,197 outside the system. It's a discretionary purchase paid for by the consumer. Um 633 00:32:55,280 --> 00:32:58,757 you know, in the the the LASIK eye studios are in like strip malls. 634 00:32:58,840 --> 00:33:01,517 Um and they've got like, you know, three people in like a super advanced, you 635 00:33:01,600 --> 00:33:05,197 know, incredibly advanced like laser eye machine. Um and you go in there and you 636 00:33:05,280 --> 00:33:07,997 get zapped and you have perfect eyesight. And it every year it gets 637 00:33:08,080 --> 00:33:10,957 better and cheaper. Um and so that's like an example of what 638 00:33:11,040 --> 00:33:13,877 happens if you're able to touch these sectors with technology and if you're 639 00:33:13,960 --> 00:33:17,277 able to get them out from under all the regulatory and government overhang. And 640 00:33:17,360 --> 00:33:20,757 so that That potential exists, I think, throughout the system. But But 641 00:33:20,840 --> 00:33:23,797 fundamentally, we have to decide we want it. And And fundamentally, the the 642 00:33:23,880 --> 00:33:25,717 population of the country has to decide that that it wants 643 00:33:25,800 --> 00:33:28,117 >> Um my name is John Kidenda. 644 00:33:28,200 --> 00:33:31,117 Um one of my favorite parts of the the 645 00:33:31,200 --> 00:33:33,757 AI articles where you say something to 646 00:33:33,840 --> 00:33:38,357 the effect of um the AI's are not going to want to kill you because 647 00:33:38,440 --> 00:33:40,157 they're not going to want. 648 00:33:40,240 --> 00:33:43,237 And my question is, given that, do you 649 00:33:43,320 --> 00:33:46,157 think that uh the whole conversation 650 00:33:46,240 --> 00:33:51,277 around AI alignment is is is net negative because it kind of 651 00:33:51,360 --> 00:33:57,157 tends to push people towards anthropomorphizing at the technology and 652 00:33:57,240 --> 00:33:59,877 um creates this this sense that it's going 653 00:33:59,960 --> 00:34:05,197 to have these wants that are similar to the ones of a of a human being. 654 00:34:05,280 --> 00:34:08,997 >> Um the whole field of AI alignment and safety starts with the assumption that 655 00:34:09,080 --> 00:34:12,597 there's a problem. Right? And you get you also see this in the academic world 656 00:34:12,680 --> 00:34:15,117 cuz like the origin point of a lot of these ideas at Oxford, I think it's 657 00:34:15,200 --> 00:34:17,037 called the Center for Existential Risk. 658 00:34:17,120 --> 00:34:19,877 Right? And And notice they didn't say the they didn't say the Center for 659 00:34:19,960 --> 00:34:22,517 Existential like, you know, benefits and risk. 660 00:34:22,600 --> 00:34:25,437 They [laughter] just said the Center for Existential Risk. And so, you know, 661 00:34:25,520 --> 00:34:26,837 these things are wired from the start. 662 00:34:26,920 --> 00:34:29,757 You know, I have like nightmares that there had been like a center of internet 663 00:34:29,840 --> 00:34:32,477 risk in like 1993, which there wasn't. 664 00:34:32,560 --> 00:34:35,117 Um but had there been like would we have ever been allowed to even do what we 665 00:34:35,200 --> 00:34:38,677 did? Like I don't know. You know, imagine a center for microchip risk in 666 00:34:38,760 --> 00:34:41,877 1960. Probably also a bad idea. 667 00:34:41,960 --> 00:34:46,957 A center for automobile risk in 1930 would have been a bad idea. So so so 668 00:34:47,040 --> 00:34:49,437 they're just they're sort of inherently inclined to the negative. They're 669 00:34:49,520 --> 00:34:52,197 they're sort of critical. You know, the in thing in academia is critical 670 00:34:52,280 --> 00:34:55,037 everything and they're sort of this is sort of critical technology studies. 671 00:34:55,120 --> 00:34:57,357 And so they're inclined to the negative. 672 00:34:57,440 --> 00:35:01,077 And then the other thing that just happens is there's a tip off. 673 00:35:01,160 --> 00:35:03,357 There's a tip off for what's happening, which is actually in the term AI 674 00:35:03,440 --> 00:35:07,477 alignment. Which is the AI alignment is not the original term that was actually 675 00:35:07,560 --> 00:35:11,317 used for this whole field of things. The original term was AI risk. 676 00:35:11,400 --> 00:35:15,637 And or AI safety, right? And it was it was literally it started with people who 677 00:35:15,720 --> 00:35:18,397 were like literally worried about things like killer robots and and so forth. So 678 00:35:18,480 --> 00:35:20,517 it was like it was it was that real like 679 00:35:20,600 --> 00:35:25,477 like actual risk to life. The the the flip of the vocabulary was very telling. 680 00:35:25,560 --> 00:35:28,997 So when it went from AI risk to AI alignment, which was about 10 years ago, 681 00:35:29,080 --> 00:35:32,077 it was very telling what was actually happening there, which and and and the 682 00:35:32,160 --> 00:35:34,877 reason is because with risk it's just like, okay, risk, safe, unsafe. That's 683 00:35:34,960 --> 00:35:39,037 like, okay, very clear. Alignment, it's like, okay, alignment with what? Right? 684 00:35:39,120 --> 00:35:41,597 And then what what they'll tell you is that it's alignment with human values, 685 00:35:41,680 --> 00:35:44,557 right? And then it's like, well, alignment with whose human values? 686 00:35:44,640 --> 00:35:47,437 Right? And basically what happened is there were a set of people who basically 687 00:35:47,520 --> 00:35:50,597 took what had been a literally life or death existential question and turned it 688 00:35:50,680 --> 00:35:54,077 into a morality and ethics question. And of course why did they do that? You 689 00:35:54,160 --> 00:35:56,477 know, in part is because they had legitimate concerns about the future of 690 00:35:56,560 --> 00:35:59,037 morals and ethics, but in part because they had envisioned themselves as being 691 00:35:59,120 --> 00:36:03,237 able to answer those questions. And so and this is why in my essay I I started 692 00:36:03,320 --> 00:36:06,597 with, you know, sort of risk number one, which was existential risk, but then I 693 00:36:06,680 --> 00:36:08,397 went to risk number two, which is sort 694 00:36:08,480 --> 00:36:14,037 of societal risk, right? The risk of the big fall societal harms. The harm word 695 00:36:14,120 --> 00:36:16,237 is another one of these tip offs when you know you're you're dealing with this 696 00:36:16,320 --> 00:36:20,397 kind of thing. And and for that second risk, expressed as AI alignment, what 697 00:36:20,480 --> 00:36:23,597 you're dealing with fundamentally is social engineering. And when you're 698 00:36:23,680 --> 00:36:26,637 dealing with social engineering, you're necessarily dealing with politics. And 699 00:36:26,720 --> 00:36:30,397 so that that's the sort of collapse that's happened kind of inside the AI 700 00:36:30,480 --> 00:36:34,317 risk field. By the way, the original AI risk people who are worried about the 701 00:36:34,400 --> 00:36:37,557 killer robots, they actually are very upset that this shift happens and they 702 00:36:37,640 --> 00:36:40,677 think that their movement has been hijacked by basically social activists, 703 00:36:40,760 --> 00:36:43,917 which it has been. Um and they now have proposed that the 704 00:36:44,000 --> 00:36:46,437 the the name of the field should be changed to something even more vividly 705 00:36:46,520 --> 00:36:49,837 clear about what they're concerned about. And the leading candidate is AI 706 00:36:49,920 --> 00:36:53,597 not kill everyoneism. >> [laughter] 707 00:36:53,680 --> 00:36:58,040 >> Has not taken off yet, but you know, give it time.