\"America Is About To Crash Into A Brick Wall\"- Wealth, Rising War, AI & Elon Musk | David Friedberg

💸 "We're drowning in debt; it's time to cut spending or face the consequences!" ⚠️

You could ask yourself, what do we celebrate? My income isn't going up as an individual. I'm not making more money, but this guy's got $200 billion. The US doesn't even seem to have a clear direction.

There's a world where we embrace technology, where we say we're not going to be fearful of loss but we're going to embrace the risk because the upside is worth it. We can go to the Moon, we can go to Mars, we can cure cancer. Some people will die, but we can do it.

David Freedberg, welcome to the show. Thanks for having me. I'm very, very glad to have you. I've been tracking your thinking for a while, and while you were often quiet in the All-In podcast, I'm always hanging on your every word, especially when it comes to the economy.

So tell me, why are you a single-issue voter when it comes to our national debt? Right now, the US is a car driving into a wall with our foot all the way down on the gas. The Federal Administration is proposing a $7 trillion budget next year. We have $33 trillion of national debt. That number has swelled since COVID and in the years following due to the launch of new programs and other stimulatory effects of spending by the federal government.

The problem with having too high of a national debt relative to national GDP is the way that a government pays their debt is by taxing their economy. Taxing their GDP, and there's a natural limit to how much economically you can actually tax the economy. Once you increase taxes too high, investment declines. Once you tax investments too high on individuals, people leave. We saw this with the launch of the wealth tax in France. There's an attrition of capital, a hiding of capital.

All of these factors aren't necessarily about people being bad and doing bad things; they're just natural economic forces that we've seen play out many times in the past. So there's a certain natural limit to how much debt a government can actually take on. Do we have a sense of what that limit is? Some people would argue it's somewhere between 100 and 150 to maybe up to 200% of GDP, but 100 and 150% is really where things are sustainable.

Now, the US is a very unique outlier in the history of global economies. There has been, and I talked about this on our podcast years ago, a set of studies. Ray Dalio kind of captured a bunch of data together in his book about the changing World Order and the economic cycles that we've seen historically six times in the last 500 years. Have you had Ray on your show? Yeah, a couple of times. So you know the story.

I think that's the thing that makes me worried; at some point, spending at the federal level gets so high and debt levels get so high that it's really hard to come back from that. Money printing is needed to support paying that interest and paying that debt. Right now, inflation is being fueled by the stimulatory effects of these programs. Because things are inflating, the government feels like there is a need to help make things easier for people, so they put more money and launch more programs to try and reduce inflation. In doing so, they increase inflation.

Then, as inflation goes up, the interest rates on the debt have to go up. When the interest rates on the debt go up, it becomes harder to pay down the debt. Our $33 trillion of debt, a good 50% of it, is getting refinanced now where the interest rate moves from an average of about 3% to 5%. When that happens, a 2% increase in interest on $15 trillion is another $300 billion in interest payments a year. This year, we're already paying a trillion dollars just in interest on the debt that the federal government owes to its bondholders, to the people that own treasuries.

We're getting to a point that it becomes really difficult to actually stop the spending, pay the interest, and reduce the debt levels. That's how these spirals have played out historically. Every time it's played out, whether it was the Dutch or the English or whoever you want to look to, there was always this, "It can't happen here. This is the leading global economy. This is the reserve currency of the world. It's not going to happen here." Every time, the natural forces of arithmetic played out.

I'm so worried. I think that the US voting population needs to be really thoughtful about voting for one's individual self-interest versus voting for the safety of the Union over the long run. Can we create a circumstance in this country where people recognize that we need to reduce spending and that people are going to lose benefits?

That is a nearly impossible thing to make happen in a democracy. That's where we see these sorts of things start to reel. I'm a single-issue voter. I want someone to show leadership. Bill Clinton had those poster boards: here's how we balance the budget, here's how we cut things back down. We need a degree of simplicity and leadership. The key objective of the next administration, unfortunately, I don't think we see either of them doing that.

If we get either Trump or Biden, both of them increase the debt massively. Four years on both counts of what they'll do economically. We are fundamentally driven by this concept: desire doesn't go away. Humans never stop wanting. The delta from year to year is what drives happiness. In a voting system, it drives how people vote. If my income isn't going up by 10% per year, I am unsatisfied.

A lot of good behavioral social studies on this; after that limit of income, income is no longer your predictor of happiness. Your change in income is your predictor of happiness. The government now has an incredible role, supporting a lot of people through active programs. The government is a customer, employing many people. Something north of like 30 or 40% of the US working force, the primary customer, employer. The government has created a big driving force for economic growth.

We're now reaching a point where it's no longer sustainable. A lot of people in the United States are dependent on Social Security, which is forecast to go bankrupt in 2033.

💰 "Endless debt isn't sustainable; tough choices are ahead!" 🚨

The government has been a significant driving force for economic growth in the United States over the last 250 years. However, we're now reaching a point where sustaining that system, where people have their income and livelihoods improved year after year due to government intervention and policy, is no longer sustainable. Many people in the United States depend on Social Security for their income, and that program is forecast to go bankrupt in 2033.

Additionally, the Medicare program's costs continue to climb, and many people depend on it for their healthcare needs. These are two very large programs. How do you get voters, tens of millions of people who depend on these programs, to vote to reduce these benefits? They simply won't. I'm not advocating for reducing these programs; I'm just pointing out the simple reality of how a democracy works in this circumstance. These individuals don't want to give up the benefits, income, and medical care that were promised to them and that they invested in for decades.

To support these programs, we have to take on more debt. The government also runs many other stimulatory programs where it is the customer of businesses, spending money to buy products and services. Medicare is a good example, as it buys a lot of pharmaceutical drugs. If I'm the government, what's my incentive to negotiate for a lower price? I can go to Congress and get a bigger budget next year. Everyone in the system is built to make more money for themselves, so the natural incentive is to grow the organization, not shrink it.

There is a lot of tension in the way the system has evolved. Both internal organizations are designed to grow, and voters are not going to give up the benefits they've received. That's how people get elected in a democracy; they promise to give more to the voters, not cut back for the survival of the Union. What sells is increasing Medicare benefits, improving Social Security, and launching new programs to support the community. Politicians are more a symptom of the system set up to operate this way, driven by voter demand for more.

When voters are not getting more due to a stagnating economy, they turn to the government to solve these problems. This leads to government expansion and the election of leaders who promise more benefits. This is why it's so hard to back away from this cycle.

Money printing was something I discovered quite late in life. The Central Bank of the United States, the Federal Reserve, plays a critical role here. The federal government needs money to pay its bills and taxes businesses and citizens, but it spends more than it makes. To cover the gap, it issues bonds bought by individuals, foreign governments, and companies. One of the buyers of these treasuries is the Federal Reserve, which has the ability to buy treasuries and issue money it doesn't have.

The Federal Reserve can print the US dollar, injecting more money into the system. This money flows into the economy, and the Federal Reserve issues it almost on a loan basis to banks, buying treasuries with the expectation that the US government will pay them back. The federal government can't just print money; the central bank does. At some point, when looking at the total amount of debt, there's a question of when too many dollars get printed. It literally becomes an entry into a database, a few clicks, and now that money technically exists.

This cycle of debt and money printing raises significant concerns about the long-term sustainability of our economic system.

📉 "Printing money shrinks your savings; inflation is sneaky!" 💸

The concept of debt is something we all understand on a personal level. Like any household, there's a limit to how much debt you can afford each month before you risk going broke. To overcome this, the Federal Reserve steps in, buying bonds and issuing money, which then finds its way into the system. However, there's a tipping point where too many dollars get printed.

When money is made up out of thin air, it’s literally just an entry into a database that they decide to click clack, and now that money technically exists. You might wonder why it isn't great that we can just make more money. Imagine you and I have $50 each, and there's a guy selling sodas. We might end up paying $25 each for a soda. Now, if someone shows up with another $200, the price of a soda might shoot up to $75 because more people want sodas and there's more cash available.

This flood of money into the system decreases the purchasing power of existing dollars. The value of the dollars goes down, which means that the value of your savings and assets also goes down. More than half of Americans can't pull together $1,000 for an emergency. If the value of dollars decreases and their incomes don't rise, these people are deeply affected. Meanwhile, those who own significant assets can hedge against inflation by investing in things like Timberland, gold, or Bitcoin.

Inflation hurts economic growth because people have less money to spend, businesses shrink, and things go bankrupt. The average person doesn't understand this, so they don't realize it's happening. Essentially, money printing is a form of legalized theft by the government, as it knowingly reduces your purchasing power. Voters in the United States have the power to change this by recognizing the problem and electing candidates who can address it.

I believe in rethinking the role of government in our economy. Anytime the government gets involved in markets, it distorts market forces. This distortion prevents markets from getting better and cheaper for people. For instance, the owner of a defense contractor benefits immensely from government involvement because he can charge more each year. This cost-plus model incentivizes him to inflate prices.

The model needs to change, and voters play a crucial role in addressing this problem in a democracy. Consider a scenario where a soda seller uses new technology to produce more sodas. This technological innovation can reduce costs and benefit the economy, even as more money floods in. Increased productivity and technological advancements drive economic growth and help solve these issues.

Historically, the United States has thrived on innovation and entrepreneurship. These drive GDP growth through improved productivity, making more with less. For the last 250 years, this has fueled our economy and our global success. We need to enable more technological innovation and productivity gains to solve these problems.

There's a shift in perception about technology today. In the past, we were incredibly optimistic about technological advancements. Posters depicted humans on rockets to the moon, living on space bases, and traveling in flying cars. This wave of innovation, especially post-World War II, fueled our progress. However, incidents like nuclear meltdowns, cancer from new materials, and the Cold War's constant threat shifted our perception.

This fear and skepticism have led to a more negative association with technology. The American psyche, and that of the West, has been challenged in appreciating the benefits of technology due to the perceived downsides. This critical, anti-technology sentiment needs to be addressed for us to fully embrace the potential of innovation and solve our economic challenges.

🌍 "Fear of tech holds us back; embrace innovation for progress!" 🚀

Post World War II, we were so optimistic about technology. Then what happened is that we started to get cancer, and there were meltdowns of nuclear facilities. There was a Cold War, so there were these big nuclear bombs sitting over our heads all the time, and we were doing Duck and Cover nuclear bomb attack training at school. The American psyche, and the psyche of the West largely, got really challenged in terms of adopting and appreciating the upside of technology because there was so much downside. We got scared of technology, and everything became kind of this critical anti-technology sentiment.

In 1955, Disneyland opened with this ride called Tomorrowland. Every ride there was about the future opportunity with technology. In the 1970s, they started to turn over all the rides in Tomorrowland at Disneyland, and every ride got remade as a fear of technology ride. The rocket ship to the moon became Space Mountain, and it's all about a rocket ship that went off course. Star Tours was a robot that broke down and took you on a chaotic journey. Captain EO, with Michael Jackson, comes from outer space with his clan of people and destroys the robotic world that had been overtaken by robots, returning it to an organic natural state. Everything about what appealed to people starting in the 70s, as represented by Disneyland's Tomorrowland, was about technology going awry and the need to return everything to a natural, organic state.

There's this great tension in bioengineering, gene editing, and AI in all of these advanced technologies. There is so much trepidation, concern, and fear. We are potentially missing out on the productivity gains and the benefits that would arise from these technologies being more rapidly adopted. I'm not saying that the concerns and the risks of nuclear meltdowns, cancer, and chemicals are unfounded. What we have a tendency to do is to take one event or one experience and blanket the entire space or the entire industry around that one experience.

For instance, there was a guy who died in 1997 or 1999 while receiving a gene therapy treatment. When he died, they put a stop on gene therapy treatments for, I think, seven years. Now we have literally dozens of gene therapy treatments that can cure dozens of human diseases and save millions of lives, but for seven years, we weren't allowed to make progress because we were worried about losing another life. We worry more about loss than we care about gain.

If you go to a small, poor African nation, they are not worried about the downside of putting in a nuclear power plant. But in the United States, we don't want to have a nuclear reactor. That's the other tension that holds us back from embracing new technologies—our risk aversion. We worry more about loss than we care about gain... if you go to a small, poor African nation, they are not worried about the downside of putting in a nuclear power plant that would drop the cost of electricity and give everyone abundant power in their homes and clean water.

In the United States, we don't want to have a nuclear reactor because the marginal cost of electricity gets reduced by 3 cents a kilowatt hour, so it goes from 15 cents to 12 cents. I'd rather not have a nuclear facility in my backyard. We have the privilege of that in this wealthy nation.

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I think a big part of the problem is that people do not understand it, so you can say it but they don't understand it. It's a very counterintuitive thing to say, "Dear constituent, I'm going to print some money and I'm going to give that money to you," and it's very difficult for people to understand that's bad for you. It may help in a really acute moment, like when COVID happens and you need to put stimulus into people's hands just to calm some of the panic and make sure everybody makes it through okay. But even that is a tradeoff, and you're going to have a problem. The way that money gets put into the system in that magical moment where the FED creates money out of thin air is that they're buying the bonds with it.

Now, if I hold that asset class, I'm going to get that money, and so that money basically just protected me. When they print the money, they are socializing that decline in buying power across everybody.

💰 "Money printing fuels inequality and drives us toward conflict." 🔥

You know, holding that asset class basically just protected me. Their mechanism for getting the new money into the marketplace was to buy the asset that I had, giving me my guaranteed return on that money. Most people aren't doing that, so this starts to create a divide between the haves and the have-nots.

When they print the money, they are socializing that decline in buying power across everybody. The wealthy just got a bump because they got the money they put into the bond of the treasury protected, plus they got a return on that money. Meanwhile, those who gained nothing from the money printing only lose. They don't realize that those losses are being socialized across everybody.

It also creates an appetite for war. We've seen it historically, over and over again. As great nations rise, their populations demand more. The government takes on debt, prints more money, gives the population more, and at some point, you reach a critical natural state where the economic condition isn't naturally growing. There is the potential for war.

The choice becomes whether to let Saddam Hussein continue to lead Iraq or to spend a trillion dollars to remove him, gain access to oil fields, put U.S. companies in charge of those fields, and tax those companies to generate revenue. War historically has driven a lot of shifts in economic productivity and growth in certain aspects of the economy that need stimulation. If people are happy at home, they’re not looking for conflict abroad.

We are not happy at home, and the economic circumstances are deeply coupled with our unhappiness. Israel gets into it with Gaza, the Palestinians and Israelis clash, and the U.S. is more inclined to de-escalate if things are good at home. But they’re not, so we are more willing to engage in conflict abroad.

Let's give another $80 billion to Ukraine, let’s get that thing going. It brings people together with a common enemy—there's an external force, a bad guy like Putin. It’s great; we rally behind the idea of destroying Putin, just like we did with Saddam Hussein. Whether it's Hamas or Israel, there's always a bad guy somewhere to focus on.

Spending money on war is stimulatory. You’ve heard it from our Senate Majority Leader—money spent on Ukraine buys weapons from U.S. manufacturers, so that money comes back home. It creates economic growth and revenue, and now the debt is owed by Ukraine.

There are psychological reasons too. When things are not good at home, people feel more in control if they can "beat someone up" abroad. It’s like a bully mentality. Fixing issues at home is hard, so resolving conflicts elsewhere and installing new businesses sounds more appealing.

Historically, external conflict often arises from increased money printing and debt. Coming out of 2021, I felt we were heading towards conflict with Russia. Given the deficit and debt that year, it seemed inevitable.

Little did I know, we’d keep doing it for two more years, with a $7 trillion budget proposal next year. It felt like the right mix for us to get involved with Putin. No one will admit it outright, but it always happens.

Ray Dalio’s thesis supports this. Every time a new world power rises while an economic superpower declines, conflict is almost inevitable. It’s not 100% of the time, but historically, it's around 85%. Ray looked at the last 2,000 years, focusing on the last 500, and found that the rise and fall of nations is always tied to these economic conditions.

👍 "Debt cycles and desire for more drive global conflicts." 🌍💥

This feels very much like Ray Dalio’s thesis: every time you have a new world power rising and an economic superpower declining, you end up in conflict. It’s not 100% of the time, but historically, it's something like 85%. Ray did a survey, looking at the last 2,000 years but focusing on the last 500, and the rise and fall of these nations. He said it's always tied to the debt cycle, and what ends up happening is exactly what you've been describing. People always want more; they're driven by desire.

The turbulence of a rising superpower like China and a declining superpower like the U.S. already creates frictions. To your point, war is great for business. When the government prints money, they get to take your money without asking Congress for permission. It steals your buying power; it's literally the same as taxing you extra money, but they don’t have to ask. They just go, "Oh cool, I can rev up my economy by going and fighting in Ukraine or Israel-Palestine." The voters are voting for it, so ultimately, we're all reflecting the same human desire for more, more, more.

The term inflation reflects the inflation in some denomination. Stores of wealth don’t really mean anything because they are just paired values—an asset relative to another asset. If you had bought gold 10 years ago in U.S. dollar-denominated terms, gold has been a way to hedge against the inflation of the dollar. But if you had bought gold in Bitcoin-denominated terms and used Bitcoin to buy your gold, you haven't done a good job storing your wealth. In a Bitcoin-denominated model, Bitcoin's price relative to gold has gone up much faster. Stores of wealth don’t really mean anything because they are just paired values—an asset relative to another asset.

You could own dollars and have no inflation. If you buy gold and there's inflation, the price of gold should go up in dollar-denominated terms, hedging you against the loss in purchasing power of your dollars. I think from an amendment, from a Bill of Rights perspective, what we could do well to think about is a balanced budget amendment, which means the federal government has to balance the budget every year. You could have a balanced budget amendment that accounts for cycles of war and the necessary investment in economic growth by creating features in the amendment that allow for emergency authorization, provided debt-to-GDP levels are within a certain range and Congress has authorized an actual war.

There are ways to protect against the arguments that people immediately counter with, like "No, no, you can't take that power away from Congress; you have to let them stimulate." Historically, Congress's attempts to stimulate have had negative long-term implications because we never reverse the programs; we never get back out of them. I’d rather see a balanced budget amendment, which I think protects my dollars better than having the government involved in some new asset. We have a free market, so we have the ability to buy whatever we want.

Certainly, Biden has been very anti-crypto, and Gensler has been anti-crypto, which got me thinking about the right to hold assets. You can print my net worth away without any checks and balances. When you ask and answer the question "What is money?" you realize it’s a way to store the economic output of your energy. This means I can say I did something on Tuesday and store the output of that effort indefinitely.

If I have $100 worth of buying power today, I should have $100 worth of buying power in a hundred years. This way, I don’t have the perverse incentive to spend money today; I have an incentive to think long-term. Balancing a budget wouldn’t freak me out because I wouldn’t need the government to control all the systems. I just want an asset that can’t be inflated, and we can look at gold as an example.

💡 "Save smart: Protect your money from inflation!" 💰🚫📉

Poker players have a gambling mentality. They are clocking Bitcoin now because Bitcoin is a possibility. Bitcoin is going through a period of adoption which means it has massive volatility. Gamblers like the volatility; they make their money from it.

I just want an asset that is reliable—like gold—an asset that can't be inflated. From my understanding, the reason gold is a store of value is because a star has to explode and rain gold on the earth for there to be new gold. It inflates by roughly 2% a year, which is what we can extract. Gold has these properties of not being inflatable, and it doesn’t mold or rot, so it will carry over time.

Some people will believe in the Bitcoin version of that, but that's irrelevant to me. I just want something that cannot fall to the whims of human desire to inflate it away. I think that your principle is sound. There is some degree of risk; if everyone gives up on gold, it’s gone. If everyone gives up on Bitcoin, it’s gone. The value goes down. Fiat currency has the additional downside of being 100% in the control of the government. As somebody who just has a weird pathological aversion to authoritarian rule, what happened in Canada with the truckers protesting is concerning.

They said, "We're going to look at your faces, clock your bank account, and shut them down." What I really want is for the people of the United States to admit that this is important enough that we should see it as an inalienable right. Right now, people that save are punished. It's all over the West and even in the East too; it's everywhere. That's what terrifies me.

The people of the United States need to admit that this is important enough that we should see it as an inalienable right. Currently, we do not. The knock-on effect of this situation goes deep. What I really want, where I think this gets really interesting, is that my money isn’t inflating.

If I can spend today and never save, because right now people that save are punished, you're basically owning an inflation-protected asset. This definitionally means you can buy the same thing in the future as you can buy today for some number of units. Big Macs can go up in price, and you can still buy one unit to buy one Big Mac, and in 20 years, you can buy one Big Mac with one unit. But what if the price of Big Macs has gone up way more than the price of gasoline?

You're always indexing assets to other assets; they always have paired value. We use this term "inflation" a little loosely in the sense that we assume that yes, there is generally devaluation happening with the dollars. In some cases, you can buy a lot more Brazilian Reais with dollars today than you could three years ago; it’s gone up by 20%. Even though our ability to buy food has gone down, if I go to Brazil with my Reais, I can buy more stuff.

I can go to the UK now and buy more stuff because the value of the dollar relative to the pound has actually improved. So inflation in dollar-denominated terms against food prices and energy prices and housing prices and car insurance, and all the other things that we as consumers in the United States care about, has gone the wrong direction. But when paired against other things around the world—against the Yen, against the pound, against the Real—the dollar has actually done well. This means that your purchasing power has gone up in those countries because you own dollars.

We don’t see that every day as consumers, and global trade helps solve that. I think it’s important to understand what you are pairing against and what you are looking for protection from. Is it the price of food, the price of energy, the price of housing, or the price of medical insurance, or government manipulation of the monetary supply? If so, then you shouldn’t own currency, and you shouldn’t own dollars.

Globally traded assets, these commodities like copper and gold, these are the sorts of things—potentially Bitcoin—that you should own. The challenge with Bitcoin is that it has a very anti-government orientation, which makes it the enemy of government. Some powerful figures, like Trump, have come out in aggressive support of Bitcoin. RFK Jr. has also shown aggressive support, although he may have a slightly anti-authoritarian bent.

I can feel something shifting. To your point, what happens in the government is merely a reflection of what’s going on in culture. We are seeing what I call the age of conspiracy. COVID broke people’s ability to trust the government, and I think that’s just continuing to snowball.

People may be letting that snowball too far, wanting to throw it all away and burn it all down to start anew. That worries me far more. I think people are really looking at the truth, which is that you’re being lied to and manipulated. Even if the people lying and manipulating are doing it with the best of intentions, they’re lying and manipulating.

What I’m trying to get is a currency that they can’t manipulate, even if they think they’re manipulating it for my own good. So that I don’t have the perverse incentive to spend; I can save it and know what it’s going to be. Now, I hear you in terms of the volatility. It’s just an asset; a currency is just an asset, and it’s an asset relative that’s valued against some other asset 100%.

You’re never going to be able to, nor would you want to, squash the volatility in all of these things. I would not want any protections on whatever asset class comes to be; I'll call it Bitcoin for now. For me, that is the asset class I’m treating like this; it has high potential.

💡 "Bitcoin: Future-proof your wealth against inflation! 📈💎

What I'm trying to get at is a currency that they can't manipulate, even if they think they're doing it for my own good. I don't want the perverse incentive to spend. I hear you in terms of the volatility, but to me, it's just an asset. It's an asset relative that's valued against some other asset 100%. So let's take that head-on; you're never going to be able to squash the volatility, nor would you want to try.

I wouldn't want any protections on whatever asset class comes to be. I'll call it Bitcoin for now. It has high volatility currently, but in the future, I think it will be low volatility and it will really be about its ability to not inflate. I've got this non-inflated asset even though I'm still in a world where stuff is all over the map. Only half of the equation has that level of volatility, and now I have a store of wealth that I can plug into. Maybe to really be effective at what I want it to be, it needs to be a non-inflatable currency.

I do think that a natural knock-on effect of having this store of wealth, where I know $100 buying power will be contiguous down the line, is significant. I can benefit from deflationary things that happen in technology. The only way out of this spiral is innovation. History tells us that ultimately even that breaks down and you end up missing; you end up not being able to innovate fast enough to keep up, which is why no empire ever in human history has lasted.

When you start looking at how we’re going to make this work, it becomes about ensuring a governmental structure that is not deranging because of inflation. Instead of generating innovation for the government to print more money and effectively steal what should have been the deflationary impact of that innovation. The government doesn't set prices in markets, but they do manipulate fiat currency. Over the last 250 years, we've had incredible technological innovation. The cost of food went down; the wallet share of food has plummeted over the last 100 years. It's now coming back up, unfortunately, because of this recent inflationary cycle.

That potato, which should have been $4, goes back up to $8, and that's why we don't see prices drop over time. If you think technology, the price of technology should just drop, drop, drop. Over the last 250 years, we've had incredible technological innovation. I'll start with the plow, the tractor; 60% of Americans worked in farming until we got the tractor and hybrid seeds. We could mass-produce food using machines and systems, and the cost of food went down. The wallet share of food has plummeted over the last 100 years, but it's now coming back up because of this recent inflationary cycle.

The cost of fuel has also been influenced. As we've had all of these technological innovations, it's given us permission to spend more because the economy grows. When productivity increases, the cost of making something goes down. Relative to the number of people involved, units of energy, units of land, units of input—it all improves. Let's say I spend 15 cents to make this mug instead of 30 cents; I can now make this mug cheaper. You don't just buy one mug and pocket the savings; you buy two mugs, and the economy grows.

Productivity gains drive economic growth. When the economy grows, the net revenue I'm making, the net revenue you're making, and everyone else's net revenue goes up. The government taxes everyone the same amount, but now the government has more money to spend. Voters have a choice: to say tax less and spend less, but every voting cycle, voters say spend more. Inevitably, the economic growth that arises from productivity gains, a percentage of it, goes into increasing the role that government plays. The role that government plays in our economy has created inflation and distorted natural market forces.

If we continue with technological progress, we can resolve some of the inflationary risks. The economy will grow, more tax revenue will be generated, and voters will say let's do more. That's the history of the last 250 years. It started out as a place where you could be free from the tyranny of government involvement in your everyday life. Entrepreneurs came to this country for that freedom. It still is the most free place, the most entrepreneur-friendly place, the most innovative place on planet Earth.

The natural forces are that as things go well, more programs are launched. All the people that we elect say, "Yeah, I'll give you more of that stuff," from the federal level, and that's just the way it goes. It's very hard to say that there's an individual or an organization responsible. This is a natural force of what's happened with governments over thousands of years.

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💡 "Protect your wealth: Opt out of inflation chaos with smart assets! 💸🔒

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What I'm getting at is I think the logical conclusion of having a non-inflatable asset class is that I can opt out of that madness. Because what will happen is the voters will say, "Hey, we want to tax you more to give you this." They're going to say no, and the government's going to be like, "Cool, no worries, we'll just print more money." That's a tax, just with better branding, so people don't realize it's a tax. But if I have my assets in a non-inflatable asset class, I'm opted out of that. What's going to happen is that's all going to come to a head real fast. People are going to realize, wait, these guys that are storing their money over here still get the benefits but don't participate in the socialized sweep cost through money printing. People are finally going to understand that a tax is a tax by any name. You can call it money printing, but it's just a tax.

Wealthy people have had this option; they could buy timberland, gold, or other things that have kept them out of the damaging effect of inflation. They can just sell that asset when they need cash dollars to buy stuff that's denominated in dollars. That's largely what's fueled a lot of the wealth disparity in the US and the West. As inflation has been driven by government program spending and increased money printing, the wealthy have had the ability to protect their assets by making investments in assets that are inflation protected. People that don't have the ability to do that have not, and their incomes haven't risen to make up for that. What you're saying is sound: to give access to everyone what the wealthy have had access to. I think the question is, are they going to have enough assets to start with? That's the big conundrum that we have.

When this happened in France, when they passed a wealth tax, there was massive immigration out of France. The government authorized the ability to go in and pull people's assets as a tax every year; some percentage of your net worth gets calculated. Elizabeth Warren's been proposing this in the US, and Bernie Sanders has supported it. If you start to do that, wealth is reduced, investment declines because I have less incentive to take risks to grow my asset base if it's just going to be taken away from me if it grows. There's some psychological aversion to investing to some degree, so there's a reduction in investment, so the economy grows less, and then people opt out. They leave, they move to Puerto Rico, they move to Brazil, they move to Europe. Mainstream politicians are going to lose their donor dollars if they even consider proposing that. So yeah, it is a very interesting approach.

Love that guy. That guy's the man. I need that guy. I really want to meet that guy. That guy speaks truth to power. Then people opt out, they leave, they move to Puerto Rico, they move to Brazil, they move to Europe. It's becoming a popular thought amongst more fringy types, not mainstream for sure because mainstream politicians are going to lose their donor dollars if they even consider proposing that. It is a very interesting approach.

What do you think about Milei in Argentina? Love that guy. That guy's the man. I need that guy. I really want to meet that guy. That makes two of us, by the way. That guy speaks truth to power. I wonder if he is the beginning of the tipping of the policies and systems that we just talked about, and the challenges that arise from the way that we have voted and the way that we have allowed government to grow and intertwine itself in the market and individual lives. Argentina's recovery from that and the voters saying we want this guy is a way to indicate that maybe things are tipping. In El Salvador, you know, they put all the cartel members in prison and made Bitcoin a national currency. I think it's a national currency now, right? There may be this moment where Milei is looked upon as the guy that speaks truth, not just to power but to the individuals that now have access through social media and the internet. The ability to hear these sorts of voices clean and true on what we have done, what we have done to ourselves.

Socialized policies, policies that provide massive social programs at the cost of taxation, ultimately inflate things because the government's involvement distorts market forces, making things more expensive. He's shown people that there is a way to recover from that, fix it, and get out of it. Now he's shutting down these wasteful bureaucracies in the government in Argentina. He's shutting down these groups that should have never been created, these programs that should have never been created because they don't create much benefit for people. There's no accountability in how the money is spent; the cost does not justify the ends. He's showing by example that this economy can grow, that people can prosper, that the government can run a surplus and people can be taken care of without the wasteful nonsense. The tentacles that have grown out of politicians standing on platforms saying, "I'm going to make everything in the vending machine free." And what happens from that after 50 years, 100 years? Buenos Aires was like the Paris of the West and had the highest GDP per capita of anywhere in the world at the turn of the 20th century or early late 19th century. It was this burgeoning industrial system.

Social policies crept into Argentina like they did throughout Latin America in the 20th century, leading to multiple coups and the eradication of the free market system that allowed Buenos Aires to become what it had been. Then I think this guy came along and said, you know, people were sick of it. They've been through the pain. The US doesn't know pain like that; we have no idea. We could go through another 30 years of this sort of inflation to come close to what Argentinians have been dealing with over the last 30, 50 years. There's a breaking point where people say, "We need something different; these systems don't work." He could be showing people the future. He's like come from the future. I was joking with my friends the other day; I feel like he's Superman in the movie where he flies up into Earth, and remember, Lois Lane died, and then he flies around the earth and reverses time, bringing everything back to a happy place. He's like Superman; he's taken the burden of spinning the world backward on his shoulders to save lives. He feels like that guy to me; he's like a superhero. The fact that he doesn't give a [ __ ] and acts like he has nothing to lose. He'll stand up on any platform and speak truth to the circumstances, regardless of the common refrain that's used to support.

💡 "Innovation = Wealth! Celebrate the creators who make life easier. 🚀💰

He's like Superman... he's taken the burden of spinning the world backwards on his shoulders to show us... to save lives... I think the fact that he doesn't give a [ __ ] and will stand up on any platform to speak truth to the circumstances, regardless of the common refrain that's used to support these decisions, is remarkable. I encourage you to watch his speech at the World Economic Forum. There are aspects of liberalism in the West that he addresses, such as the overextension of the government's role in creating equal outcomes rather than equal opportunities.

When the government gets involved, it distorts the cost of things because it can just print more money, making everything more expensive. Rather than letting the most competitive individuals, the most successful entrepreneurs, and the hardest-working people succeed, the government intervenes based on other social definitions like race, class, or income. These social policies, although well-intended, have led to inefficiencies and economic distortion.

Let me just tell you what happened to Argentina. We were one of the great cities of the globe, so successful that we started adopting socialist policies. We did this to ourselves, and it completely destroyed our country. Maybe we all wish that capitalism didn't work, but it does. Capitalism has brought more people out of poverty than any other system ever tried. The way to get back on track is by balancing the budget, spending only what we make, and ensuring that we are the home for innovation. We need to invite the greatest minds from around the globe to come to Argentina and create incredible things.

America is still the king of innovation, and there’s a cultural tradition of celebrating people who do great things. Historically, there's been a disparity in wealth arising from successful entrepreneurship. Most Americans, when adjusted for inflation, haven't seen their incomes rise over the last ten years. Happiness is driven by changes in income.

Now, with the media's reach, I get to see what Kanye West is doing every day or how much Justin Bieber is spending on his new Lamborghini. This level of insight was never available before. We've always had ultra-wealthy individuals in capitalist societies. Someone who figures out how to make a Golden Goose can start making more golden geese.

Take Jeff Bezos, for example. Many people have a negative view of him, but he gave us the ability to get whatever we want tomorrow at a fraction of the cost. The investment Amazon made kept reinvesting every dollar it earned, creating an infrastructure that has unlocked value for everyday consumers. People can buy toys for their kids for $8, and it shows up at their doorstep the next day. This is an incredible unlock in prosperity.

But he's criticized for having $160 billion and hanging out on a yacht. We should be celebrating him as a superhero. If what he did wasn't valuable, he wouldn't be worth $160 billion. There was no cronyism; he didn't steal wealth. He built a business and innovated, just like countless others have done in the United States over the last 250 years.

Individuals don't necessarily pay attention because now we're all used to Amazon and our iPhones. My income isn't going up, but this guy's got $200 billion—that's unfair. The world is made up of haves and have-nots. Everyone thinks they’re a have-not relative to some other have, and everyone is a have to some other have-not. This simple fact drives all social policy, politics, and the economy.

If I'm a have-not relative to someone else's have, I want to tax them or compete with them in the market. If I'm an entrepreneur, I want to gain their market share. If I'm a have, I want to vote for a politician who will protect my assets. This dynamic drives all of this.

💡 "Celebrate entrepreneurs! They're the spark that lights progress. 🚀✨

What they have that I don't have, I want to tax them. I want to get them. I want to compete with them in the market... If I am an entrepreneur, I want to go get the market share they have. I want to get a politician to take their stuff away from them. And if I'm a 'have' and there's a 'have-not' trying to get me, I want to vote for a politician that's going to protect my assets and give me the freedom to continue to have stuff. So that dynamic is what drives all of this.

Government spending—the 'have-nots' vote to get what the 'haves' have or to take stuff away from the 'haves.' And then the government is the agent by which we can all accumulate our power to exercise that action. That's where government programs come from. Today, unfortunately, I think successful entrepreneurs are viewed in a negative light generally.

Elon has gotten very socially active; he's got very politically loud, but he's an incredible entrepreneur. His entrepreneurism is not celebrated; it's viewed as a threat. This guy has power... he has success with his car company that the other car companies don't have, so they want to pass legislation to hurt him. He's viewed as a right-winger because he doesn't agree with my policy, and he has the ability and the megaphone to be able to say that because he's wealthy. So he's negative; he's an evil character now, largely.

Throughout American history, we've had folks that we've boned, but there was a lot of cronyism in the early days. I don't think there's as much cronyism today. I think there's just a lot of 'have-have-not' dynamics that are driving this. We head down a socialist tunnel if we're not careful, where we want to make sure that everyone has equal outcomes, which is what Malay warns against. The reality is equal opportunity—everyone has access to participate.

As long as there are some young people that will step out and build businesses, innovate, and create new technology, we do have enough of that spirit in the United States still. So I'm very optimistic about entrepreneurship. I have this worry that we're at this very weird intersection of choosing between the Dark Ages and the Enlightenment.

Society wants to redistribute all the wealth, all the assets, and all the access. But I think there's still enough young people that succeed through entrepreneurship that they can become beacons and lights for ensuring that folks don't fall that way. We need to shine light and support and applaud.

I don't have a great answer for you on this because I think you could see things go either way. I generally have this worry that we're at this very intersection of choosing between the Dark Ages and the Enlightenment. Do we want to stop innovation because we're fearful of technology, of progress, of the downside? Because we don't like entrepreneurs, we don't want people to accumulate wealth, we hate success, and we want the government to do stuff for us and not individual companies—that's the Dark Ages.

The absence of empiricism, fact, data... all the data shows that entrepreneurship and capitalism are better than socialism. You're not going to compel someone that socialism is better unless you leave out all the data that supports capitalism. You have to have an absence of information.

I can wax a little too philosophical here. There's this element of human belief that allows us to do incredible things. We have to come together and believe in something as a group to accomplish a mission, to build something. Like, we all get together and say, "Let's build a house." We all have to work together, so the belief allows us to accomplish the building of the house. That also opens up room for humans to believe in things that aren't empirical, that aren't supported by data, that maybe take us down a different path.

We can believe that the data is right and good, or we can ignore the data and believe in something else. I see a lot of alarming behavior, things that worry me, particularly in the media and from politicians where they say things that aren't true and then people believe them. That's what happened in the Dark Ages. Whether it’s the monarchy or the church at the time, or whatever group was in power, they told people something to maintain their status.

We ended up saying, "No, the sun revolves around the earth; the earth doesn't revolve around the sun," despite the data that this crazy guy is talking about. Ignore the crazy guy; his data is wrong. What we're telling you is right. That's the Dark Ages. We ignore empiricism, we ignore facts, and we don't make progress.

The Enlightenment is that we get into a more rational thought mode where we use data to make decisions. Let's look at the performance of a government program to decide whether or not we want to keep doing it. Let's look at the results of this experiment. Make sure that data guides us. We have a principled, rational discussion about what we should do, and that's not what we hear from politicians.

I don't hear anyone standing up there... I think Vivek probably did the best job of this. He actually came out and gave facts and figures about the size of some of these government programs and what they were doing. There's a world where we embrace technology, where we say we're not going to be fearful of loss but embrace the risk because the upside is worth it.

We can go to the Moon, we can go to Mars, we can cure cancer. Some people will die, but we can do it; we just have to be willing to do it. We can look at the data, iterate and iterate, and be successful. Or, "This stuff is bad—this technology is bad, the idea of capitalism is bad, the celebration of the entrepreneur is bad." I think that's the moment, this crossroads that we are at. I don't think it's like we just go one way or the other; I think we have that choice every day.

💡 "Embrace risk, the upside is worth it! 🌟🚀

There's a world where we embrace technology, where we say we're not going to be fearful of loss but we're going to embrace the risk because the upside is worth it. We can go to the Moon, we can go to Mars, we can cure cancer—we just have to be willing to do it. We can look at the data, iterate and iterate, and be successful. Or, we can say this stuff is bad... this idea of capitalism is bad, the celebration of the entrepreneur is bad.

We should really take a hard look at whether we're launching new science, new technology, supporting innovation, supporting entrepreneurship, supporting free markets, and allowing the individual that has the brilliance, the ability to narrate, and the ability to bring people together to succeed. We have this moment where there are crazy things happening right now in science that people don’t understand. They don't get how crazy it is, but like, we are understanding how to reverse aging in every cell in our body.

There are several multi-billion dollar private companies building fusion reaction systems to create unlimited energy at effectively free production cost, coming from ocean water. If either of those two things happen, humanity's trajectory changes completely. We could have infinitely free energy. We have AI, we have this ability for all of human knowledge to be encapsulated in a device that I can keep in my pocket, and it can answer any question for me and do anything for me using knowledge work.

Every one of these innovations faces efforts to stymie them with regulation, efforts to denounce the technology as being too risky, which means that all of the innovation is going to be stifled. We're not as accustomed to taking risks anymore as we were when we were pioneers in the West in the United States because those pioneers had nothing to lose. Today, we have so much to lose. I've got two cars in a suburban driveway, my kids, my IRA, I've got stuff, so I don't know if I want to take the risk of dying from this new thing.

If you had asked me a year ago, I was getting pretty pessimistic about the direction we were going from an authoritarian perspective. Elon didn’t own Twitter yet, and people didn’t seem to want any freedom of speech. We were just coming out of COVID, where I thought people acted like psychopaths. It was just bananas, in terms of people giving up all of their freedom in exchange for safety. It was just a very strange time.

When I think about the ideas that have people in their grips, the ideas are not necessarily the ideas of old. He's a very controversial figure now, but it's somebody I have tremendous respect for: Winston Churchill. He grew up a man of means but despite that, he was so in the grips of a set of ideas around the greatness of England and Britannia. He fights and fights and fights to get into politics, finally gets into politics, gets assigned to a naval station, and ends up messing up massively, completely destroying his career.

Instead, he says, "I want to immediately be put on the front lines of World War I, and I'm going to earn my way back into the government." He used to do all these really dangerous things, like walking the perimeter where people didn't want to go with him because when he would get shot at, he would just stand there. People would be like, "What are you doing?" and he’d say, "By the time they've shot at you, you either got hit or you didn’t. Now the danger has passed." He just had this attitude of, "I'm not going to be a coward. I'm going to get this done. I'm going to lead. I'm going to show people what it's about." What mattered was self-respect.

I grew up middle to lower middle class, and my parents were like, "Alright, we can't give you money. In fact, I graduated college with debt, can't help you there, but my dad was obsessed with work ethic." From the time I was 12, I worked in a door factory, then a paint factory, then a paint warehouse. My dad just kept saying, "You're going to know how to work when other people don't."

I remember one of the earliest quests starting with Quest. Everything was hard, and I had learned how to drive a forklift back in the paint warehouse days. When all of our equipment showed up, we realized, "Oh my God, we don't have a forklift." I was like, "Guys, I'm actually a certified forklift driver." I looked into the camera and said, "Dad, wax on, wax off. You told me that all these skills would come in handy one day."

It was the desire to get good at things that I wasn't good at, to earn a reputation for being the hardest worker in every room that I was in. When I first got on camera, I was telling people all the time, "Hey, you should go out and work for free. Optimize for knowledge and connections." I would just get lit up. "Oh Tom, these people are just being taken advantage of."

💡 "Optimize for knowledge, not money! 📚💪

My Journey with the Forklift

"Forklift driver," they said, looking at me in disbelief. So, we borrowed a forklift, and I was able to get all of our gear off the truck. I looked into the camera and said, "Dad, wax on, wax off. You told me that all these skills would come in handy one day." That set of ideas drove me. It was the desire to get good at things I wasn't good at, to earn a reputation for being the hardest worker in every room I was in. And so all of those things ended up paying off.

The Value of Optimizing for Knowledge

When I first got on camera, I would tell people all the time, "Hey, you should go out and work for free. Learn something in exchange instead of trying to optimize for money. Optimize for knowledge and connections." I would just get lit up. "Oh Tom, these people are just being taken advantage of. Of course, you say that because you're rich." Hold on, do you know how I got rich? I wasn't trying to maximize my dollar; I was trying to maximize knowledge and connections.

Changing Spirits and Ideas

I can feel that a spirit has changed in some way, and that people are no longer in the grips of the same ideas that I was raised with. It was just the water we swam in during the 80s—to be the hardest working person in the room, to strive for more, to pick your biggest dream and go for it, to celebrate people who were successful. That worries me to no end. My default stance is that this is a pendulum that swings, and it only swings based on pain. What you need is not just pain; you need pain plus an idea. When you have a good idea, and hopefully someone who can articulate it well, you don't have to be in as much pain before you change course.

Political Reflections

When I look at Trump and Biden as the nominees for 2024, I think, "Oh yeah, this is a group of people who need enough pain to realize this is ridiculous." In the early to mid-20th century, we celebrated people working hard. We celebrated entrepreneurs and scientists having breakthroughs. Today, unfortunately, we celebrate victimhood and celebrity. The problem is that's out of reach for everyone. That's what everyone aspires to be. I think that was the number one thing out of a recent survey coming out of high school: What do you want to be when you grow up? A social media influencer, because that's what we celebrate.

Celebrating Boldness and Innovation

My hope is that we can begin to celebrate creation, innovation, risk-taking, people that are bold, and success—people that pull it off. When I look at Elon Musk, I get it. I get why some people don't like his politics, fair enough. There's a bit of a boyish, troll nature to his ongoings on X. But at the same time, he is the greatest entrepreneur of our generation. When I look at the way Elon has been able to replicate success in just wildly different companies, it's pure insanity. Doing it from an engineering standpoint is really, really breathtaking.

The Promise of Fusion Energy

Fusion energy is this whole new way of creating energy. You can take heavy water molecules, and if you get them moving fast enough—if you get hydrogen moving fast enough and get two of them together—they fuse and release energy. You have to get them moving fast enough and close enough, so high energy, high density. The sun is a giant plasma fusion reactor. The energy from the sun heats us, those photons drain us.

We can now do that, or we are trying to do that, on Earth in a controlled way by creating a plasma. We take these atoms and spin them around so fast, then use a magnet to try and squeeze them super close together. When they're close together, they start to fuse, and we capture the energy that comes out. In the last decade or so, there's been a bit of a renaissance and acceleration in fusion technology. There are about 70 companies now that have been started up, doing fusion reaction systems.

A Future Powered by Fusion

Theoretically, you could take water from the ocean, and using just two swimming pools of water, power all the energy needs of planet Earth on all of our systems today. Everyone's always like, "It's a decade away," so it's always been this kind of thing people call [ __ ] on all the time. But the underlying engineering is improving, the underlying science is there, so this could be a reality within our lifetimes. Energy consumption has increased per capita as GDP per capita has gone up, so we've demanded more energy as we've become more prosperous.

Sure, here's a viral Instagram-like insight extracted from the source paragraph:

💡 "Fusion energy: Cheaper power, greener planet! 🌍⚡

The Potential of Fusion Energy

The underlying science is there, so this could be a reality within our lifetimes. Imagine seeing fusion reactors everywhere, which would dramatically drop the cost of power and increase the availability of energy. When the cost of energy goes down, we can produce more stuff at lower costs, create new materials, and run more powerful computers. Energy is a huge driver for economic prosperity and growth.

Historically, energy consumption has increased per capita as GDP per capita has gone up. As we've become more prosperous, our demand for energy has also increased. To meet the GDP per capita demands, we need to increase energy production on Earth by something like 3 to 10 times, maybe even more. We need a new paradigm, a new system. That's the argument for fusion and why it's potentially game-changing, even if it's still a ways away.

The Revolution in Gene and Cell Therapy

We're using the ability to manipulate proteins to alter genes for human therapies. This includes destroying cancer and creating new cells, like T-cells that can target and eliminate cancer. There are now tons of gene therapy products on the market. Genes are the code for proteins, and proteins are the machines that do everything in life.

Proteins stick stuff together, they rip stuff apart, and they assemble new molecules. When there's something wrong with a gene, the corresponding protein can be dysfunctional, leading to disease. There's a separate area of medicine involving cell therapies, where we edit the DNA of cells to make them perform specific tasks in the body. For example, these cells can be reintroduced into the body to kill cancer cells or repair damaged tissues.

People receiving these therapies often find their cancers gone. It's unbelievable. This technology is about 15 years old, and there are over a thousand cell and gene therapy products currently in testing and trials. These therapies can address a wide range of human diseases, from curing blindness to treating cancer and autoimmune diseases.

Advances in Stem Cell Research

Yamanaka figured out that by turning on certain genes using chemicals known as Yamanaka factors, cells can act like stem cells. These stem cells can then be turned into any other type of cell, such as eye cells or skin cells. Creating stem cells using Yamanaka factors is now common practice in biological and life sciences research.

As we age, the mechanisms that turn genes on and off in our cells degrade. This leads to dysfunctional cells, causing issues like wrinkles, poor eyesight, and weakened organs. If we could reset these cells so that the correct genes are turned on and off, all the cells would function perfectly. We have everything we need in our bodies; it's just a matter of gene regulation.

Several companies are making progress in this area, showing that there may be a path within our lifetimes to rejuvenate cells in our bodies. It's an insane thing to think about.

Agricultural Biotechnology

The work I do is mostly in agriculture, focusing on plants. We're making plants more genetically diverse, increasing their yield, and improving their performance, health, and growth rate. We have the ability to improve the quality of crops, making them grow faster, bigger, and healthier. AI is just an unlock for people.

These advancements in biotechnology are transforming agriculture, making it possible to feed more people with fewer resources. It's an exciting time to be involved in this field.

💡 "AI's taking over—write a novel in a day! 📚🤖

The Evolution of Agricultural Biotechnology and AI

Humans use half of our land to grow stuff. We have the ability to actually improve the quality of all those crops, make them grow faster, bigger, healthier. We've developed the system for doing that, so that's another technology area that is super interesting.

Obviously, AI is a huge topic. Everyone talks about AI. It's this statistically driven unlock for us where our productivity goes through the roof. Instead of going in and changing every pixel, I can just say, "Hey, I would like to write a book today—300 pages and about government involvement in markets. Go source all the data for me, aggregate it in my style, and then I want to go in and edit it with you." By the end of the day, I've written a novel. The cost now of being a writer or a copywriter goes down, the value of being a copywriter goes down, so the income for the copywriter goes down. But the ability for someone to now create 100 novels a day increases output, and so the economy grows, the market grows.

The Interplay of Technology and Public Acceptance

The big thing I wanted to get a sense of is, okay, there's a lot of really amazing things happening in technology, but I think the needs to be married to your earlier point: Are people going to reject this, or are they going to embrace it? Gene editing, I think that's huge. You've got gene editing inside the human, you've got gene editing inside of the plants, you've got AI, and the impact that those are going to have. Those three feel very germane to the argument of whether people are going to embrace these or reject them.

Seeing the benefit is beyond luck. In human health, we see the benefit of these tools because people's diseases are being cured. The concept of gene editing or using gene editing to create new therapies, which sounded scary in the first place and everyone was against, suddenly it's like, "Wait, my uncle got cured from cancer with one of those therapies. This is awesome." That term is no longer an evil term because consumers can now see the problem with technology is it's always ahead of the curve.

Shifting Perceptions and Real-World Impact

AI stuff shows up, people talk about it. Terminator 2 came out 30 years ago. I can tell you, if someone got their energy bill cut by 75%, they probably wouldn't complain as much about having a nuclear power plant 100 miles away from their home. They'd be like, "Wow, that's pretty amazing." And you know, then you understand all the protocols for safety and all the regulatory systems that keep you safe.

In human therapies, we're seeing all these lives being saved, and we're not hearing tons of stories about people dying from gene therapy, so the attitude shifts and the benefit is there. In the early days, there's a lot of this like, "Wait, don't go too fast. Slow down. Make sure this works, make sure the benefit is there, make sure the downside is understood and protected." It's not viewed necessarily as an innate good until people realize the benefit.

Antibiotics, for example. People died from infections all the time before we had antibiotics. Now we've got antibiotics; you get an infection, you take one, you live. We kind of take that a little bit for granted now. I generally try and avoid them just to be clear; I don't think they're great, but if you're going to die from an infection, you've got to take an antibiotic.

The Future and Public Sentiment

At some point, maybe we take things for granted a little bit too much and forget about once you're on the other side of that curve. I think we're going to go through something very weird over the next three to five years, and it's going to be largely driven by technology and some of the promises we thought it would deliver but didn't.

If you look at what happened with social media, social media made all these promises; it was going to make you feel connected. It clearly has not done that. Increasing rates of suicide among young kids, causing some sort of disturbances that caused them to really struggle with anxiety and depression.

GMO foods became this incredible unlock that allows us to feed billions of people. It didn't happen largely because we made huge innovations in agriculture. You have people that are like, "I won't eat GMOs. I won't let it touch me. No way. This is bad. This is horrible." People just think of it as the Death Star, the evil empire.

AI and Human Augmentation

AI, I mean, don't even get me started. People are going to reject that. I think with AI and Neuralink-type things where you're augmenting the human body, there's going to be a true bifurcation. There will be Puritans who are like, "I'm pure. I don't have any augmentations in my body. I don't use micro technologies. I don't augment my body. I don't use AI. I don't engage with it at all." And then you'll have people that go hard the other way: "I've augmented with everything that I can get my hands on. I don't have real friends; it's all AI. My wife is AI, all my friends are AI, etc."

I think you're going to start to see, in the next three to five years, the beginning of that split. Where is that in 15-20 years? I think it's going to be pretty dramatic. Now, I think the people that don't embrace new technologies will end up being relatively small.

💡 "Future society: Pure humans vs. Tech-enhanced beings! 🤖 vs. 🧑‍🦱

The Bifurcation of Society Through Technology

There's going to be a true bifurcation in society. You'll see people who consider themselves "Puritans," saying things like, "I'm pure; I don't have any augmentations in my body. I don't use micro-technologies. I don't augment my body. I don't use AI. I don't engage with it at all." On the other hand, you'll find people who go all-in on technology: "I've augmented with everything I can get my hands on. I don't have real friends; it's all AI. My wife is AI, all my friends are AI."

I think within the next three to five years, we'll start to see the beginning of this split. Looking further out, say 15 to 20 years, I believe this divide is going to be quite dramatic. People who don't embrace new technologies will become a relatively small group. Whether this leads to disdain or even localized violence, I can't say for sure, but we'll see.

Wealth and the Adoption of Technology

The split can be easier to understand if you consider the role of wealth. Wealthier individuals have the luxury and privilege of not adopting certain technologies, whereas those who aren't as wealthy may see technology as a crucial tool for progress. For instance, I might buy a handcrafted clay plate set for my family, paying $80 for four plates because it was made by an artist I admire. Most people, however, can't afford that and opt for plastic plates from Target, where they can get four plates for two bucks.

There was this great website called Dollar Street. They documented how people live based on their income and wealth, showing daily life items like how they cook food or brush their teeth. Some use propane burners, while upper-class families might have gas stoves in Norway. You realize how much someone living in a hut without furniture would benefit from having access to the internet on a mobile phone.

The Role of Technology in Social Mobility

For those with fewer resources, technology can be an incredible unlock. While we might spend a few minutes searching for information online, for someone with nothing, this access could be transformative. What we generally observe is that resistance to new technologies comes mostly from the privileged, wealthy class who don't need it, while those who see a path to progress quickly adopt it.

The Luxury Premium on Non-Technology Assets

There's a psychological aspect to this. The wealthier you get, the more likely you are to pay a premium for non-technology assets, appreciating their authenticity and genuine feel. For example, I might buy organic, non-GMO food and feel good about it. Most people, however, are trying to progress in life and will use any available technology to do so.

The Self-Limiting Effects of Wealth

Interestingly, this luxury can have self-limiting effects. For example, wealthier individuals tend to have fewer children, while those with less wealth tend to have more. Similarly, wealthier people might consume more calories and become obese, only to then spend money on diets and gym memberships to lose weight. I had friends over recently, and offering them snacks felt almost out of place because the trendy thing now is to not eat.

Wealthy Nations and Technology Adoption

Wealthy nations often hit a ceiling where they prioritize safety over innovation, potentially stalling progress. This makes me think about what you're doing at Ohal and how people react to GMO foods. Do you think this technology will be slowed down by regulation, or will people adopt it? Considering the history of plant breeding, which has always aimed to improve crop yield and quality, it's fascinating to observe how societal attitudes and regulations can impact technological advancements.

In plant breeding, we've always tried to select the best traits to improve crops. Historically, that meant picking the biggest plant and replanting its seeds year after year. Now, we have advanced methods, but the core goal remains the same: better plants, better yields, and ultimately, better outcomes for both farmers and consumers.

🌾 "Gene editing: faster, precise, and nature-friendly plant magic! ✨🌱

The Evolution of Plant Breeding and Genetic Modification

Breeding is the process by which we make better plants that grow bigger on our farms. The bigger the plants grow, the more food they produce. Historically, we simply picked the biggest plant, took its seeds, and replanted them. We would do this repeatedly, year after year, selecting for the physical characteristics, or phenotypes, that we found desirable.

In the '90s, we got DNA sequencers, and it transformed how we approached plant breeding. We realized we could actually look at the genes responsible for these physical traits. This led to molecular breeding, where plant breeders started to select plants based on their genetic makeup rather than waiting for the plants to grow and measuring them.

The concept of a GMO, or transgenic crop, emerged from this. Essentially, this involves taking a gene from another species and inserting it into a plant, thereby enabling the plant to produce a new protein that it otherwise wouldn't. A well-known example is BT corn, which is widely planted today. This corn variety contains a gene from another species, making it a GMO.

Another fascinating example is golden rice. Scientists inserted a gene into rice to produce vitamin A, aiming to combat river blindness and vitamin A deficiency in South Asia. Despite its potential to improve health for millions, the idea of GMOs faced significant backlash. People became worried about tampering with nature and the unknown consequences.

Humans have been breeding plants and intervening in nature for thousands of years. The process of selecting the best plants and discarding the less favorable ones dates back at least 23,000 years. However, GMOs have garnered a bad reputation; they are highly regulated and often misunderstood by consumers. Many believe GMOs are harmful, despite the fact that we can measure their effects and ensure they are beneficial.

Gene editing brought a new dimension to this field. Unlike GMOs, gene editing doesn't involve introducing foreign DNA into a plant. Instead, it applies a protein to a plant cell, causing a change in its genes. This allows us to make precise changes quickly, without waiting for natural breeding cycles to achieve the same result.

Gene editing has revolutionized plant breeding, as well as medical fields like cancer treatment and disease prevention. It enables us to create desired traits in plants almost instantly, using the plant's existing DNA. This technology is regulated differently from GMOs. In the U.S., for example, getting approval for a gene-edited plant is much quicker and less cumbersome.

The potential of gene editing to improve plant characteristics is enormous. It allows breeders to create better, healthier, and more nutritious plants without the long breeding cycles. However, there's always the risk that consumers might view this technology with the same skepticism they have for GMOs. It's crucial to remember that humans have been altering plants for millennia.

Take corn, for example. Originally, it was just a small grass with a few seeds. Through thousands of years of breeding, it has become one of the largest sources of calories on Earth. This transformation showcases the power and importance of plant breeding.

Unfortunately, the negative perception of GMOs has hindered the adoption of beneficial technologies like golden rice. Despite its potential to provide essential nutrients to millions, it never took off. It's easy to fall into the trap of opposing new technologies without fully understanding their benefits. This goes back to the broader issue of societal acceptance and the challenges of educating the public.

In conclusion, the evolution of plant breeding, GMOs, and gene editing demonstrates the incredible advancements we've made. Yet, it also highlights the ongoing struggle to balance innovation with public perception.

🚀 "New tech isn't scary; it's our future! Embrace the change. 🤖🌍

The Misunderstanding and Fear of New Technologies

That whole system, I think, is where people don't really have the full context of this. When you hear a sound bite that's pretty negative, you want to believe it. It feels good to be against the technology; it feels good to be against Monsanto, against the man, against the big system. It's easy to fall into the Dark Ages trap where we say let's stay away from this technology.

It's really sad, like golden rice never took off. It was an incredible product, but people were nervous about it. They don't understand genetics; they don't understand DNA sequencing. It's scary.

Similarly, AI, which is basically just a statistical process on a matrix of numbers, is similarly scary. When you break these technologies down... I was in Vegas and I was a little hungover, and I saw some kid with a drone. I was like, man, what if that drone, with AI, just shot everyone? That's crazy.

A couple of weeks ago, China put out this video of a military dog. They put a machine gun on the back of the military dog, and it's got AI vision; it can run autonomously. You could see China making 10 million, 100 million of these. Dude, that is dystopia; it's a literal Black Mirror episode.

I very much want to see people adopt these technologies. However, humans... if we got as scared as we got over COVID, which had less than a 2% fatality rate... I just don’t see people continuing to do good calculus in terms of the long-term advantage. There are people that are struggling; they'll adopt it out of necessity.

So it becomes an interesting tale of leapfrogging where countries are adopting some of this stuff. Cellular meat, which I think is really interesting, is going to get massive pushback. Cellular meat will probably get more pushback than GMOs ever did. It's been banned in Florida already, and there are seven other states where state legislatures are looking at bills to ban it. There's now talk in the US Senate of putting together a bill to ban it.

To make a calorie of beef takes 30 calories of energy from the rest of the food system. There's an incredible amount of energy to make one pound of beef. The question is, scientifically, can we take the cell from the cow that makes the muscle tissue and then get it to just grow the muscle in a vat, like you make beer, like a brewery, like a fermentation tank?

Energy from the rest of the food system to feed the cow, to make the corn, the water, all the stuff that goes into growing the cow, processing the cow, transporting it... There's an incredible amount of energy to make one pound of beef. The question is, scientifically, can we take the cell from the cow that makes the cow's muscle and then get it to just grow the muscle in a vat, like a fermentation tank? You pour sugar in, make some changes to the cell to get it to suck up the sugar water and double and double and double and grow muscles. You also have to put proteins into the vat to trigger those cells to grow, trying to make sure that there's no disease in there, that no bacteria enters.

Theoretically, we have all the tools we need to grow the muscle from the cow without the cow and use less energy, use less carbon, lower footprint, and theoretically, as it scales up, lower cost. The FDA started approving these; they started reviewing them and said, okay, we got it, we've analyzed it, we've studied it. They started approving a couple of them; each one has to go through regulatory approval in the US.

Cattle ranchers started saying this is messed up, and you're going to destroy our industry. There's a big industry, a big lobby that would be threatened by this new technology. Dan Santis basically stood up and said we're doing regulatory capture. Forget the tech companies, forget the fact that it could save people money because now meat can be cheaper. Well, because the ranchers are there and they're saying we got to protect our industry. This is classic regulatory capture, classic cronyism.

It's enabled by a fear of the technology; it's enabled by the fact that they're editing cells and putting them in vats and lab-grown meat, and we don't want that putrid stuff growing in our... And DeSantis put out a picture of one of the tanks that grows the meat and said, look at how they're growing this; it's disgusting.

🚀 "Let the market decide what's good or bad! 💡🛒

The Role of Consumer Choice and Market Dynamics

Consumers can have a choice; they don't have to buy this stuff if they think it's junk, disgusting, or evil. They can still buy beef. The ranchers are there, saying we got to protect our industry. This is classic regulatory capture, classic cronyism.

It's enabled by a fear of the technology; it's enabled by the fact that they're editing cells and putting them in vats and lab-grown meat, and we don't want that putrid stuff growing. DeSantis put out a picture of one of the tanks that grows the meat and said, "Look at how they're growing this; it's disgusting." Then someone else put out a picture of the exact same tank, which is making beer that we all drink, or making cheese, or making yogurt, all the other stuff we eat. It's the same tank.

If the product sucks and it doesn't taste good, or it's more unhealthy for you, or all the other things that are bad, consumers will not buy it, and they'll stick with beef. But now they're stopping the market from even being able to discover itself.

I'm a vegetarian, so I'm not going to buy any of this stuff anyway, so I don't care. Maybe I'll try it for sure, but it's not something I desire. You should let the market figure it out; let consumers try it, let people see if it's good.

If you write software that's over a certain size, you have to report to the government now. They used to eat meat one meal a week on average; now they eat meat five meals a week. It could help a lot of people get access to stuff that they want and progress.

These businesses aren't mostly going to benefit other people. We now at least have a way to get out of some of the regulatory capture. We have a way to avoid some of the censorship and misinformation. Let the market decide.

There might be a pretty good market for this. It could help a lot of people get access to stuff that they want and progress. It's great for the rich people in America and the Floridians that want to support the ranching industry, but you know, these businesses aren't mostly going to benefit other people.

We now at least have a way to get out of some of the regulatory capture. We have a way to avoid some of the censorship and misinformation. Let the market decide.

Every week for years, I've questioned should I keep doing this for various reasons because it's not motivating. It's not motivational for me to put myself out there and do this sort of thing. I get a lot of benefit when I hear people on the street say that I said something that inspired a change in their life.

People have to build equity in themselves. This was the comment I made on this one show. Make sure that everything you're doing is increasing your leverage so next year you get more for less. Next year, you can do more and progress your life.

I don't like the politics because you've heard my point of view today. I feel like it's a false choice. We got $33 trillion of debt and we're running a $3 trillion annual deficit. What are we going to do? That's the number one thing we have to figure out before we talk about all the 50 other things that everyone cares about because otherwise, there is no ability to do all the other things.

So much of the machinations are just boring. It's just gossipy. I don't care about so and so; yeah, they all have good sides, they all have bad sides, they all go into prison. I get it.

💬 "We must tackle our debt crisis before anything else! 💰🔍

Addressing the Fiscal Deficit and the Need for Constructive Discourse

Not sure I hear either person saying the thing that I think I need to hear, which is, we've got $33 trillion of debt and we're running a $3 trillion annual deficit. What are we going to do about that? That's the number one thing we have to figure out before we talk about all the 50 other things that everyone cares about, because otherwise, there is no ability to do all the other things.

So much of the machinations are just boring. It's just gossipy. I don't care about so-and-so. They all have good sides, they all have bad sides, they all go into prison. I get it. I care much more about the bigger picture stuff.

I get a lot of calls and emails from friends being like, "Are you associating yourself with Trump supporters now? What is wrong with you?" This kind of blanket association. My friends are my friends. They can be interested in politics; they're giving money to this guy, they also give money to Democrats, they also give money to other candidates in the Republican party. I don't care what they do with their time. If they want to talk about it, we'll talk about it. I do get a lot of this.

You shouldn't immediately associate my opinions with the actions that a friend of mine took. It shows me a lot about how people think now. I'm only gonna hang out with people that think like me or talk like me. I don't have any interest in engaging in discourse with people that think differently than me, and I think that's wrong. We got to be fully engaged and fully conversational with all aspects of the discourse on these matters that are important.

I've definitely heard that. A lot of people say comments and stuff. We get comments like it's great to see people have civil discourse where we don't go to the attack of the other person. If you think about media, the feedback loop is say something controversial and activating. The consumer, the viewer, is activated. I said something like, "Screw you, Joe Biden's dying, look at him, he's a dead corpse, Weekend at Bernie's." That's activating to someone that agrees with me, so then they tune in more and the viewership goes up. So then you say that again, you say more stuff. Media has this interesting evolutionary curve where the feedback loop that drives the limbic system response in the viewer ends up dominating the media.

We should be talking about the facts of the matter and debating around that. Both sides should spend an hour on a debate stage talking about how we are going to resolve this fiscal deficit and debt problem. If you don't think it's a problem, then tell us why. Articulate why; how do you think through a problem? I'm a first principles thinker, or at least I try to be. You got to always ask why, and then when you get their assumptions, like the assumption is the GC knows, like they're the source of truth. Turns out the general contractor is not the source of truth. I just went on the website and I found a Home Depot generator for eight grand; why am I spending a hundred-some thousand? Because the electrical guy said that's how it costs.

First principles thinking is all about asking why and getting to the source of truth. What are the absolute facts, the data that you know is true, and then building the answer or solution from there. When you ask people why enough times, you end up getting to the ground fact, the ground truth that you can then build from to make the right decision or come up with the right solution for a problem. Let’s figure out what they’re doing and what we could do differently to get it done as fast as possible. Okay, we can get it done in 12 months when you break the problem down to every step in the process.

🧠 "Ask 'why' to uncover the core truth and solve problems from the ground up! 🔍💡

Embracing First Principles Thinking and Adapting to Change

Truth is, we need to figure out the steps to come up with new ways of doing things, with shortened timelines and 24-hour cycles. For me, first principles thinking is all about asking why and getting to the source of truth. What are the absolute facts, the data that you know is true, and then building the answer or solution from there? When you actually understand how things work and if you can get to the essence of the thing, that becomes really important.

The real problem is, we're up against the generator, or we're up against that contractor who is not available for a month or whatever. Okay, now I actually know the problem set, and once I know the real problem set, then I can solve the problem. Chat's game has changed a lot in the last year, year and a half. He's been changing up his game, for better or worse.

J Cal's kind of like a little knitter; you know, he sits around and waits for the right thing, and then he takes it, and he doesn't bet anymore. He kind of just goes home with his money. Sax is just MIA, so I wouldn't even rank him anymore. I don't even know the last time he played; he's too busy electing the next U.S. president.

The game style matters. Some of us perform differently, better in different game styles. Chth does well in the big games. I don't play the big, over-the-top games like Chth does. He knows how to play those games better than I do. I'm much better in the more normalized, strategic game; where you can do a better job game-theorizing where people are at.

I have a Twitter account, a Twitter handle—Freedberg, that's it. And the All-In Podcast, I'm on the All-In Podcast. We're going to do a party in Vegas when we get to a million subs, which was never a goal for us, but we realized recently we should probably set that goal.

Watch: youtube.com/watch?v=ccOQ_lxOz_4