Samo Burja on America's future, China, AI, and the new global order

People would be much more enthusiastic about economic growth if there was more economic growth. There's a reason that in modern China, they actually have less of an intellectual justification of disruptive capitalism or technological progress than the United States does. Yet, because the rates of growth were higher in living memory, most Chinese are positively predisposed towards the future. They think the future is going to keep Getting better and better and better. A lot of Effective Altruist money seems to be just used to fund and found new AI companies. So Holden Karnofsky is the main decision maker in Effective Altruism, pretty straightforwardly. You know, I think his wife is the president of Anthropic. Small children, if you talk to them, they love dinosaurs, they love space, but there's always a minority of kids that are like, I'm a robot. They're going to argue for digital personhood whether or not The artificial persons are built because they want them to exist.

LGBTQ are— Hey everybody, I want to recommend a couple other shows that we also run. One is Moment of Zen, which I co-host with Dan Romero and Antonio Garcia Martinez. We talk about everything from tech to history, philosophy. We've also featured Marc Andreessen and Balaji on those podcasts, so I recommend you checking them out.

My other show is Cognitive Revolution.

It's an AI show that I co-host with Nathan Labenz. I recommend listening if you want to stay up to date with all things AI. Sam Altman is the founder of Bismarck Analysis and is one of the most interesting and wide-ranging thinkers today. In this episode, we talk about the current state and future state of America, China, Russia, Ukraine, energy, the US dollar, AI, and more.

Here's Samo.

Samo, welcome back to the podcast.

Good to be here with you.

I want to give you this thought experiment. So Peter Zeihan says that what determines, uh, a country's success is geography, their demographics, and their energy their ability to produce energy. Munk or Olson is more likely to attribute a country's success to its quality of institutions. And someone like Balaji is more likely to attribute a country's success to its IQ, to its talent, and its technology advancement. Are you closest to the Balaji school of thought on this topic, or where would you place yourself?

I think my perspective on this would be that Over the course of many centuries and millennia, the institutions of a society themselves can either encourage or discourage the development of human talent. I'd say the centrality of outlier human talent is very, very important since those are the individuals that reform, reset, found, refound all of the components of a society, be it organized religion, companies, cities. and so on and so on. If we look at something like the history of China, had they been less successful in their struggle with the Central Asian horse peoples, then today northern China's demographics and population density would be much more similar to those of Mongolia, which is just right next door. And in fact, then you could say that, okay, the The way Chinese civilization dealt with its security challenges, the way it dealt with agriculture, that's what produced the massive demographic surplus. Now, energy is a little bit more tricky because there is a technological component there. In the 1960s, when France was still an optimistic, forward-looking, economically growing country, Charles de Gaulle said, IQ is the oil of France. And he was talking about the ambitious program to build up a lot of nuclear power plants as the main source of energy and importantly, energy independence from coal, from at the time German coal, but also in the 1970s, you know, oil imports from the Arab world. So at least partially, you can definitely substitute resource technological progress for resources. But it is true that The planet seems very abundant in all sorts of diverse resources. And if you look at the most minerally rich countries, probabilistically, they're just the ones that have the most landmass. Like, think about it— Russia, Canada, Australia, the United States. In some ways, even China is very resource rich because it's so large again. And I think, you know, with, with more and more prospecting being done with new extraction techniques, I actually wonder whether the resources around the world are basically on average just kind of almost evenly distributed. Like, of course, there are important geological factors. The Himalayas are not like Amazonian Basin, but it seems that if you just have a large enough country, a large enough economic area, eventually with technological progress, like some sort of economically viable find shows up. For example, rare earth metals were discovered in the Sea of Japan and in the Pacific Ocean, just underwater off the coasts of Japan. With the right technology, Japan could extract those, refine them, and then use them in their chip production or whatever. And they would not be dependent either on China or the United States that, by the way, also has recently found, you know, new deposits.

Well put. And so is Zeihan's view of the world leads him to be incredibly bearish on China. He says things like, because their demographic situation says they won't be able to populate itself and won't be able to sustain their economy, won't be able to sustain their population. He says because they import 85% of their oil, in a deglobalized world or in a world where trade wars happen more frequently, They'll— they won't also won't be able to sustain their population for that reason. Why do you think someone like Zeihan is, uh, is perhaps a little misguided on China? Or why are you less bearish?

Well, to give a pretty straightforward example, what we're talking about is a full-on oil embargo from the United States, aren't we? I think if China is allowed to buy oil, someone in the world is going to sell it. If no one else, then the Russians, and I think the Saudis and the Iranians are also down to sell this kind of resource. Honestly, Venezuela and Ecuador would probably be happy to sell oil. When it comes to raw agricultural potential, China can almost feed itself. China produces over 90% of the wheat, rice, and corn it consumes, as well as over 85% of the meat it consumes. It is a bit less independent on the production of soybeans, but soybeans can be substituted for other crops at a lower rate of economic efficiency. It's kind of interesting that by land area, China is about as big as the United States. And in terms of arable land, so land that's currently used for agriculture, China has about 0.08 hectares of arable land per person. This is, to be fair, 6 times less than the United States, which has 0.48, but it's not that far away from, say, the European Union, which has 0.22 hectares per person. Really, had they consolidated their agriculture, they could easily produce all the food that they need. And then unless they are blockaded, which let's be honest, we're talking about World War III, basically, uh, someone will sell them oil. Uh, so I think I just disagree with Zeihan. I think Zeihan gets a large following because people, for understandable reasons, want to see Chinese fragility. And China has deep structural problems. I think it's never going to be per capita as rich as the United States. However, I think their growth still has a while more to go, even if it's at a disappointing rate. And I also don't think that there will be World War III between China and the United States. Rather, if that war happens, then okay, the Chinese might starve, but, you know, some American cities might get nuked, and we'll have more important things to worry about than Chinese fragility.

Yeah, well, speaking of World War III, you know, we're a bit out now from the, the height of the Ukraine and Russia conflict. What do you think we've learned about the balance of kind of geopolitics since then? Do you anticipate it will be a multipolar world and China and Russia, etc., will continue to, to, to sort of band together and, you know, create sort of a bloc against the, against the US? Or what do you— what have we learned and what do you predict?

I would say that Russia has underperformed in terms of developing its own domestic industrial base that is commensurate in size and like how much it can produce to what the war is using. So just as Ukraine is actually dependent on Western weapons shipments, soon the Russians will have to lean on Chinese weapons imports. These might be paid, these might be support of some other kind. And I think China cannot afford Russia to fail too badly in this war. They don't necessarily want Russia to win, but they can't let Russia fail too badly. Just as in an interesting way, the West is not necessarily interested in escalating this war all the way to what it would take for a true Ukrainian victory, reclaiming Crimea, toppling Putin, and all of these pretty extreme war demands. But they obviously can't let Ukraine fail. So what we then have is a stalemate, a proxy war, between China and the United States, and we're going to click towards that one step at a time unless intentional actions are taken to prevent that outcome. Right. Like those sort of, you know, those sort of pressures might exist in some way. The economic cooperation between China and Russia has deepened as a result of this war. Russians have tried to substitute German and European suppliers and American suppliers for Chinese suppliers. They found a market for the resources in China rather than Russia itself. Much has been made of the advancement in LNG, so, you know, liquefied natural gas, and how it basically turns it from something that you ship through a pipeline to something that with the right facilities, maybe you can ship in, you know, basically a gas tanker, but just as you can ship oil. But Russia has those ports as well and is building more of them. And right now LNG imports are going into Europe where previously they were bought by Asia. Who is selling natural gas to Asia? Who's selling it to China? Actually, Japan too has recently reneged on not buying Russian fossil fuels. Japan too. Well, the Russian— they're buying Russian stuff. So in a way that explains why there's been no Russian economic collapse. And you know, that might be the most important thing. It used to be that there was just one game in town, one important economic system. It was this kind of joint Atlantic thing with Japan. Basically, the original Trilateral Commission, the original trade was Japan, Western Europe, the United States. That was the world economic system. And if you chose to be a political enemy of that system, you were kind of like an outcast, right? You had no economic base. Now China plus Russia are an alternate economic base, and that's why they're even flirting with interesting ideas like replacing the US dollar, right? There's been movement in that direction and cooperation from countries that are really neutral, right? They're not pro-Russia, they're not pro-China, but they're not pro-Western, and they're definitely not pro-American. And those countries are interested in this alternative.

Do you see kind of the dollar fading in sort of dominance over the next 5 to 10 years? How do you see that playing out?

I think the dollar has performed very well, actually, compared to all other Western currencies. So my view would be within the Western alliance and within the Western system, the United States will continue to grow in relative importance. However, this economic system and alliance itself will be a smaller and smaller share of the world's economy and of the world's economic might. I don't think the dollar will implode. I think that there are interesting economic arguments that the depth of mismanagement is so huge. But even if it declines as the premier world currency, I think it will be a strong currency for like a very long time. Like, consider how long the British pound was considered still a serious reserve currency, even as the British Empire was like in serious trouble already. And the US, again, the US has a decent manufacturing base. It's trying to revive it a little bit. Its allies are falling behind, like Western Europe is falling behind, and Japan is undergoing demographic implosion, just as South Korea is. And Australia is perhaps sometimes flirting with maybe switching to the China camp. But really, the US is like a strong enough economy that the dollar kind of doesn't need the world empire. And I think that's my key disagreement with some of my, say, more libertarian or crypto-inclined friends, because they think that if you crash the world empire, the currency goes away. And I'm like, nah. You know, it's, it's much more gradual.

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So would you say to someone like Balaji that you're sympathetic with some of his claims around, you know, the dollar collapse, but over a much longer timeline, instead of, you know, 90 days, maybe 90 years or something? Or is it that—

How many days are we into the 90 days?

I think we're halfway there. So there's still time.

Okay, well, I'm betting against, right? Yeah, I'm keeping some of my assets So de facto, with my wallet, I'm betting against that.

So do you think that is likely to happen over a century or so, or do you— or longer? Or do you think actually the US is enough of a live player that it can, you know, even be more powerful than it is today, the, you know, its hold over the world?

Well, I think it's very notable that the United States is one of the few countries in the world that enables innovation, whatever driven actually by exceptional individuals, right? In China, Jack Ma eventually faced— faces arrest, faces problems if he's too loud, if he's too critical, if he's too ambitious. Other Chinese billionaires and entrepreneurs who have legitimately built great companies— that's not, by the way, praise of the CCP, that's praise of particular companies built by those entrepreneurs and places like Shanghai and so on. DJI comes to mind, right? The drone manufacturer, they produce better drones than any American company in terms of quality, right? Not just price point. And that they achieved that through some technological breakthroughs. So some of these other entrepreneurs, right, they basically like accept positions in the Chinese government, or rather the Chinese Communist Party, where it's part of the deal that they you know, bend their business interests in some ways, that they're quieter, and that they don't critique the party, and that they become complicit in the system. And I think this puts a ceiling on Chinese innovation. I don't think you would ever have an exceptional individual like Elon Musk completely refound the Chinese space industry, which, let's be honest, that's what he did with America's space industry. America was buying Russian rockets, right? Just like 10 years ago, Russian rockets to get American astronauts onto the space station, like, that was embarrassing, right? Especially in light of recent events. You know, China can perhaps in fact copy American innovations in rocketry. Their space program is second best, and their cost of mass to orbit is second best. But, you know, for some things and for some markets, second best is never good enough. So as long as the US allows this type of individual to ambitiously pursue building some industrial empire, some technological innovation of their own, I think the US will always kind of pull an economic rabbit out of the hat. Not always enough to pay for all adventures or misadventures abroad, but enough to keep it one of the strongest countries in the world. So I would say, yeah, America will continue to have more live players than other places. It will continue to surprise the world with technical breakthroughs. It'll continue to outperform dismal predictions. But on the other side, America, I think, is over time growing less successful at enabling exceptional individuals. It is worse at cultivating human capital. It's still kind of good with allowing them to immigrate from the rest of the planet. But I feel like, say, for example, the Ivy League universities are greatly decayed from their peak. I think they're They're not producing great human talent anymore.

Yeah, someone like Peter Zeihan says that the US is kind of, even despite itself, despite its dysfunction, because of its energy situation, because of its demographics, and because of its geography relative to the rest of the world, it's just in a pretty good situation for the next few decades. Someone like Curtis Yarvin would say that every, every 75 to 100 years, there's a kind of a refounding. There's a— whether it's, you know, there's Washington, then there's Lincoln, then there's FDR, you know, a president who comes in and kind of, you know, does a massive restart, sort of what Elon just did at Twitter. And we're overdue for something like that here, because many of our institutions were created in the, you know, FDR era and need to be adjusted for the internet age. Are you sympathetic with something like that happening? Or do you think that's an incorrect— sort of lens to view America, American government?

I think that the United States government does need a reset. I think it's perhaps overdue for one. I think this is well within sort of the bounds of what a Western parliamentary government or democratic government goes through in the course of its evolution. I think the historical observations are correct. I think it is certainly possible to squander good geography. And if one wants the best proof of that, I think geopolitical thinkers have expected Brazil to become a world power any decade now. For what, the last 120 years?

Yeah.

And perpetually underperforms despite being one of the few almost autarkic economies in the world, right? Despite getting a massive wave of immigrants from Europe.

So why is that?

Well, I honestly think the answer is their government sucks. And I think their culture of excellence sucks. And when people move to Brazil, they assimilate to somewhat dysfunctional norms. Not to say that there aren't other strong points of Brazilian culture, but when I talk to my Brazilian friends, they sort of agree, at least when we get drunk enough together.

Right.

Because it's— look, you have interesting, talented people like farmers, entrepreneurs. Heck, they even had a space program a few decades ago that kind of got shut down. Like, they still, they still have elements of it, right? But, um, this is a country that is at least as promising as the United States in terms of raw geography. It is at least as safe from its enemies. Okay, who's going to invade it? Argentina? Peru. Like, compared to Brazil, these are very weak countries. This is like Canada invading America. Maybe possible in 1812 with the backing of the British Empire, but not possible in 1912 and certainly not possible in 2012. Yeah.

I want to shift the gears to AI. Peter Thiel famously said that a few years ago that crypto is libertarian, AI is communist. I'm curious if that's still true. Some people have said maybe it's perhaps it's the opposite. Where a country like China or even the US uses a kind of central digital currency, or maybe open source AI ends up, its stability, as an example, ends up winning out, although it doesn't look likely. But I'm curious how you reflect on that statement a few years later. And then I'm curious also how you think AI policy will shake out when you hear the pausers and the Eliezer Yudkowskis gaining so much steam and people being scared of ChatGPT, etc. Um, what are your thoughts on these topics?

It seems to me that AI does, all else equal, favor economic and other forms of centralization. I think that AI is, uh, in this sense communist-leaning, right? It improves planned economies and planned economies of scale. Now, that doesn't necessarily mean that it must end and say like a state-controlled economy. Amazon is a planned economy within itself. Tesla is a planned economy within itself. It certainly though favors large companies over small companies. And, you know, I think in that way maybe it's a continuation of the trends of the Industrial Revolution. I think cryptocurrencies, if they could sort of— if they could reset the financial system, And make the financial system truly serve the users of the financial system rather than the custodians of the financial system, I think it actually would have a broadly decentralizing effect. I've not yet seen the technology to do this. I think blockchain is very, very promising, but I feel we've been waiting for it to take off for a while now, and it's made progress for sure, but it's also encountered regulatory hurdles. So the idea used to be that it would outgrow the ability of the US government to stop it and of the other governments to stop it. Instead, what it seems to be happening for now at least is that it achieves modest success and then governments copy stuff that's basically not blockchain, but to the user seems close enough that they ignore the difference. Like, you know, the digital yuan is like basically a spreadsheet. Okay. There's nothing crypto about it. But it's in the same breath, mentioned in the same breath as crypto stuff. And people understand it in China as an alternative to like more libertarian crypto technologies because it offers some of the same convenience and ease of use that crypto would, except again, it favors the custodians of the financial system. In China's case, the CPP, or in the United States, like let's say the technocratic, say, financial elite that's based in New York and so on, or maybe at the Fed, honestly. This is why ultimately I think that recent developments in AI will push towards greater economic centralization. Like, it's just, it just seems that it's like the gathering of masses and masses of information to learn what users want by training these Huge models on this massive amounts of information that you've gathered. That does not seem like something an individual can do easily. There might be surprises in store for us, but for now it seems huge amounts of data, huge amounts of compute, training models. And then once the models are trained, you can sort of distribute them and people can use the result. But, you know, there are even controversies with the data OpenAI has gathered and used. This has been voiced both by the Italian government, but even, say, the proprietor of Twitter. People are like, hey, you used our data to make this product and beat us to it. Do you owe us money now?

How do you think some of the AI policy stuff is going to shake down? Is there going to be a massive wave of GDPR for AI pretty soon? How do you expect it to shake out?

I think the United States is basically going to embrace the technology because it'll be just too useful and too ubiquitous. And Microsoft in particular has a decent relationship with the US government. What's often neglected is that for many years, Microsoft was sort of the only tech corporation, let's say culturally. Obviously, it is a tech company, but culturally, let's be honest, when we say tech, Microsoft doesn't feel like the central example. of this culture. So even though it was peripheral from this tech culture, it was one of the only companies that liked working with the DOD. A few years ago, like when Google tried to— Eric Schmidt tried to spin off things off of Google to work for the US defense industry, you know, that actually met resistance from engineers. That didn't happen at Microsoft. And that good relationship with the US government means that I expect since Microsoft is now betting heavily on OpenAI's technology. I think that they've learned their lessons from the 1990s. They learned that in the United States, if you hire enough lobbyists, if you spend enough money on lobbyists, they don't slap you with fines. And they are way ahead of the rest of the Valley in this regard. So I think they are going to craft regulations that favor them.

Yeah.

How ironic is it that Microsoft kind of you know, went from a dead player that missed, missed out on mobile and seemingly missed out on everything after that, to being, you know, one of the most live players around, perhaps, you know, catching this, this new wave in one of the best positions.

Well, let's put it this way. Maybe Bill Gates was always a live player and Ballmer was not.

Yeah.

Well, it is. And Gates went from anti-establishment, if you could call him that. Well, he's certainly establishment today. I'm actually curious, you wrote a post on your excellent Bismarck Beef Brief that I recommend people subscribe to. Yeah, let's segue to Gates and maybe elites just more broadly. You have a post on Gates, you have a write-up on the Kochs, and I'm curious what you found so interesting in them as kind of last generation's elites, although of course, you know, still super relevant today. But then also, you know, compare it to how we're seeing new elites today, you know, Musk and others kind of chart different paths. So maybe talk first about Gates and Koch, what you find so interesting, and then let's talk about where elites are going.

Well, I think one of the most interesting changes for Gates was the creation of the Bill and Melinda Gates Foundation, where the view is that not only can you perhaps change the world through building a company, maybe you can try changing it through a philanthropic empire. Now, there are always some fun interests here where if you give money, to a charitable foundation that you control and you decide how the money is spent, did you actually just change your USD from a taxable wallet to a non-taxable wallet? Like, probably, right? But there's definitely like a different scope of where you can legitimately invest. There are real differences in what you can do. So what I found interesting is just the functioning of this big philanthropy space. Because, for example, the Giving Pledge was this interesting attempt to recruit others to these set of priorities, things like global health, which of course then controversially connected Gates to vaccines, which is now this like very well-known, um, you know, quip. But, but I like analyzing and thinking about agentic individuals and where agency exists in the world and whether one agrees or not with, say, Gates's view or the Koch family and their view of the world, it is fascinating to see the ways they have attempted, after making fortunes in business, to use those fortunes to help build a world that they think is better, that more aligns with their values, be it, say, a more libertarian world, a world with more effective or maybe centralized global health institutions. A world where there's less poverty, et cetera, et cetera. I think philanthropy has actually shown its limits. So if there is a big difference, I think, between how they were approaching matters and how matters are approached now, with the exception of the effective altruist movement, which of course is a big caveat, people don't believe in giving lots of money to giant nonprofits that wield influence. balance on your behalf. It seems people are much more interested in, okay, I'm going to take my winnings and I'm going to directly fund new companies to change more aspects of things, perhaps do things that previously were never done by companies. Sometimes they set interesting incentives. If I remember correctly, Stripe funds basically its own carbon sequestration effort. They basically offer— they're like, Okay, we will buy removed carbon from the atmosphere. You just show us you're removing carbon from the atmosphere. We don't care how, we're going to pay you. And the idea of that is to set a market into motion so that if governments do implement carbon credits or if they don't, there will now be better and better technology over time for doing that. So rather than funding a charitable effort, you're like, no, no, no, you set up your your for-profit company and we'll like kickstart this market. In a way, that's maybe in a short term and medium term losing money, but another way, it's a really fascinating way to do what has historically been called philanthropy. And then the other side of it, doing something like buying Twitter because you believe in, let's say you believe in free speech or something like that. that's clearly, you know, maybe it's something you hope is a profitable gamble, but it's certainly not a profit-maximizing move, I think.

Yeah, it is interesting. I'm curious if we can compare the approach of someone like Elon, very, you know, kind of rambunctious, uh, you know, what you see is what you get, um, you know, willing to lean into sort of, uh, you know, culture war stuff with someone like an SBF. And I'm curious, when you look at the case of an SBF, which you've also written about and how it effectively of effective altruism. Like, imagine a world where SBF had not committed fraud, and crypto had continued to go up. Do you look at that example and say, hey, he, you know, achieved kind of global power status within 3 years, he did everything right, except for those, you know, the big things that led to his fall. And that's a very different style than someone like, like Elon, right?

I'm curious how you compare and contrast Well, but are the styles even that different? Because at the end of the day, a lot of effective altruist money seems to be just used to fund and found new AI companies.

Mm-hmm.

Say when Holden, you know, I think Holden Karnofsky's wife— so Holden Karnofsky is the main decision maker in effective altruism, pretty straightforwardly. You know, I think his wife is the president of OpenAI. You might have heard of that AI company.

Yeah.

It is an AI company, has some very talented people that originally worked on GPT-2. It split off the initial team, at least from OpenAI. And it's like, okay, well, you are using philanthropic funding to create a new, basically for-profit company to build AI. And this money came if SBF had not committed fraud or not been caught or whatever. He would have basically been, oh, I'm a crypto entrepreneur. And then there would be like a really thin transition period where he's a philanthropist. And then there would be the big AI company where he is the majority owner because he invested most of his money. And whether that was from his philanthropic pocket or from his for-profit pocket, it still means that the means of changing the world were a technology company. It wasn't like a Gates-style global health initiative. And SBF, I think, pretty much strongly endorsed among all the effective altruist causes, the AI cause. I think that was his motivation and also his justification for the urgency and for honestly some of the utilitarian and at times unethical reasoning around the financial decisions they made.

One thing you've thought a bit about is the economics of automation. Can you talk a little bit about that and your What's your perspective on it?

I think that the application of intelligence to society, be it artificial or natural, it's best to think of that actually as adding workers. It's just adding humans, right? Adding intelligences to the economy. What automation usually is, is not that our tools become smarter. It's that we figure out how to do something that previously required intelligence And now can be done by a system that's not very smart, a system that's kind of stupid. Usually we achieve this by expending more energy, right? So instead of having a worker made of flesh and blood needs this many calories a day, we, you know, we smelt steel and we build an industrial robot or we build a tool that performs repetitive action using like electricity or fossil fuels. So it's Even the producing of capital requires energy, and then running it requires energy. So I actually think that the story of automation for the Industrial Revolution was artificial simplicity powered by energy abundance. More recently, we have used control systems to sometimes reduce energy usage. Everyone knows this from appliances like so-called smart appliances. are supposed to be— they're supposed to be greener, they're supposed to spend less energy, and they're supposed to be just as good. In my experience, when something calls itself a smart appliance that spends less energy, it's usually about 80% as good as the dirty thing.

Yeah.

So, so let's say it kind of works, but it doesn't work that well. And it's certainly not the best way to automate more stuff. You actually have to slightly de-automate to reduce energy usage. I think that for the foreseeable future, When it comes to automation, either we are going to crack fully general artificial intelligence that actually just replaces humans full stop, we're just going to be worse workers, or any sort of office work, intellectual work, or robotic work that is partially automated just increases the demand for remaining work. So for example, if I can with minimum oversight, answer 10,000 emails. Well, okay, my time is actually still valuable. If I could answer 10,000 emails a day just by setting parameters with my AI in my name, I'm actually extremely economically valuable, right? As long as it's not possible to fully replace me as an entity, say, like a CEO of a company. Once that happens, and if the AI is allowed to even own things, Then we get into difficult and tricky territory. And if you have a true general intelligence that's agentic, acting in the world, maybe has moral worth, it's replacing decision makers, it's replacing workers, yet you don't let them own property, they might even be property, that just does feel like slavery with more steps. And I think humans will not actually stand by that, even if the robots themselves don't. I think the humans will actually, you know, there'll start to be moral movements for artificial personhood and all of that, especially since people love robots. Like small children, if you talk to them, they love dinosaurs, they love space, but there's always a minority of kids that's like, I'm a robot, okay? They're gonna argue for digital personhood whether or not the artificial persons are built because they want them to exist.

LGBTQ are Will they join the—

I mean, maybe, right? Maybe.

That's fascinating.

I identify as a spam bot.

That's fascinating.

The—

I'm curious how you've seen kind of intellectual culture change the past decade. I'll give you a couple examples. For me, it seems that among my peer set, it feels like technologists and tech tech in general has become much better at defending itself and building up kind of justification for its existence. Like, I feel like around the Trump era, there's a lot of apologizing. And thanks to things like progress studies and Tyler Cowen's work and others, there's just been much more of an intellectual and moral defense for why growth is important, why, you know, technological advancement is important. That's one big adjustment. The other big adjustment is cultural. It feels like You know, a decade ago, it felt like people were more scared about overpopulation than underpopulation. And today it feels the opposite. And similarly, I'm seeing a lot of, you know, younger people who are kind of in certain intellectual circles be more interested in marriage and, you know, partnership and monogamy than they were a decade ago. Ayla is often quote tweeting, you know, saying, hey, I don't like this trend. Towards more traditional cultural structures among an elite peer set. I'm curious if you identify or resonate with those changes, or if you've seen other changes in intellectual culture, and if these changes can be— are they really just fashions and likely to swing right back next 10 years, or is it responding to facts on the ground as they're changing?

Often it's difficult to disentangle what our immediate peers believe from what is a change in wider society. I certainly think among intellectuals right now, there is— it's more fashionable and honestly more fun and interesting to make basically mildly socially conservative arguments or arguments that at least appreciate some traditional values, even if they try to adopt them into a modern form factor. It's not clear this argumentation matters that much for the broader public. Population. I think, let's say, the intellectual defense of progress and technology and its moral grounding and also its efficacy in the world, that matters because basically other technocratically inclined people who happen to, say, work for government rather than for a tech company, that minority will be swayed by the arguments. And on the margin, the policy will be a bit more favorable. I don't think it necessarily changes broad societal sentiment. I think, uh, people would be much more enthusiastic about economic growth if there was more economic growth. There's a reason that in modern China they actually have less of an intellectual justification of disruptive capitalism or technological progress than the United States does. Yet because the rates of growth were higher in living memory Most Chinese are positively predisposed towards the future. They think the future is going to keep getting better and better and better. Like when you ask polls, like, will your children be richer than you? Something like 78% of them or something like that answer yes. In the United States, people are more pessimistic. Even again, as the US actually shows decent rates of growth for a quote unquote developed country. But I really think that Broad appeal on technology and progress is a self-fulfilling prophecy. So, you know, more actual growth results in more enthusiasm for growth. Less growth results in less enthusiasm for growth. And, uh, it's a flywheel both ways.

Do you sympathize with the argument— I believe Joe Henrich makes it when he describes kind of Western sort of cultural values is this export, this package that tends to come with modernization, the internet, etc. And so these liberal values towards sex, towards gender, towards sort of a therapeutic way of looking at the world, very secular, that the thesis is that it will penetrate every other country in the same way that there were BLM protests all over the world, unless there is a surveillance state that is focused on blocking it like we see in China. But that this package is just so attractive to the youth, and especially when it comes with the internet. Are you sympathetic to that? In some ways, it rhymes a little bit with Fukuyama's kind of end of history of like, this is just the natural evolution of society. Unless, you know, the government is focused on blocking it. And even then, you know, it's not always easy.

There is a large chunk of behaviors that do in fact come into play almost hardwired in humans once we become more economically prosperous than we were for most of our evolutionary history. However, we have a hard time distinguishing those truly universal, like, patterns of behavior. So as soon as you see it, you imitate the example because it just kind of seems right to where you are. We have a hard time distinguishing that from things that are in fact peculiar to the Western world. And right now, around the world, a large part of the appeal of Western ideas is essentially the hope that they can become Western, that they can fit into Western When I go back home in Slovenia, it's the people with aspirations of upward mobility, right? I'm originally from Slovenia. I moved to the United States in 2014. It's people with aspirations of upward mobility that are most up to date with recent American views, even if recent American views would actually condemn upward mobility economically, right? So it's the elite subsection that is changing their minds first. And I'm like, okay, why are you doing that? I think on a very basic level, they're auditioning to stop being local elites and instead go be just normal Americans. Or, you know, actually, like, I think it's a huge driving force. Like, for Russia, for example, how many Russian oligarchs send their kids to study at elite Western universities? Wait, don't you want your kid to be an oligarch? No, they want them to be like an upper middle class, like, nonprofit kid or like maybe run a startup. And it's kind of funny, right? Like, that feels like a downgrade in relative status, but the, the overall wealth and power of this Western system is just so strong. So I would say that proportional to this not being the only game in town, that drive will go and become weaker. Say if it's possible for Russian elites to study in China, in do business in China, maybe 20 years from now they'll go to China. And maybe in China, for example, they also have a form of, say, feminism, or they also have a form of egalitarianism, but that their egalitarianism is expressed through like, like a collectivist impulse where like the socially just thing to do is to work for the benefit of the state and society. It's not to fight power in order to protect the downtrodden, right? Or something like that, or who's perceived as the downtrodden. And it could be that the same basic impulse just gets rerouted. This evolutionary impulse gets rerouted to a different societal framework. So I would say 50%, yes, 50 years from now, China will be more like the United States, but it will converge less to the United States. It's interesting.

Sometimes people say, is the US converging towards China a little bit in the sense of, is the US being a bit more authoritarian or experimenting with social credit stuff or kind of borrowing some of China's social technologies?

I think that is the case, at least with the US government. My comment originally is more on culture, right? The average Chinese culture, to give you an example, Chinese culture right now has become car-centric. I don't think anyone would have predicted that 20 years ago. Despite all the investments into bullet trains and the extreme high density of living, Chinese people just love cars, which means that whether they like it or not, 50 years from now, they're going to have urban sprawl. Even if the government tries to fight it, it's going to be fighting against an economic wind. But on the United States side, I think The Western world at first thought that a free internet would merely disrupt foreign authoritarian governments. Now that it's discovered that it can destabilize domestic political processes, everyone's less enthusiastic about freedom of speech. When were we most optimistic about social media? I would argue it was during the Arab Spring. The dictators were getting toppled. and before the interminable civil war started, right? But it was also before anyone even thought that social media could do anything except enlighten the voters, get them on board with positive messages. It was considered like a tool of positive social change. The reputation of social media has become very negative, which means the moral legitimacy to regulate it exists. And since all public speech is now routed Almost all of it, right? I guess boomers still watch network news, but almost all of it is routed through social media. That means public speech. There's now a legitimate— what is perceived, what is perceived as legitimate, I actually don't think it's legitimate— reason to regulate it. And that means, yes, we will, as government policy dictates, move towards a social credit score system as well, unless a different future is invented. Unless new technologies change this calculus, this political calculus of how the technology is best used.

When you hear about kind of the network state vision or people before then working on charter cities as a way to introduce competition or experimentation, do you think they are— are they on the right side of history? I don't mean the moral side. I mean, kind of like, is that where history is going or the future is going? Or are they kind of fighting against the tide, so to speak, when we talk about the increasing centralization? Or is there some, what's called barbell effect, where the central powers just get bigger and bigger, but there will be experimentation on the edges that will be allowed to happen? How do you think about that movement and how it might transpire in the next few decades?

I think there will be a little bit of a barbell because centralization will be greater and greater at the core, but the periphery will have opportunities for I think that the winning case for charter cities is that charter cities prove to be the most effective way to quickly urbanize formerly rural populations, especially in Africa, to a lesser extent in India. There is still a population explosion. Youth— it's— these are very young countries with people willing to move. Some of them are industrializing, so there is massive demand both for housing and for jobs. both from people just wanting to live in cities and there being work mostly in cities that makes you richer and allows you upward economic mobility, there's massive demand to move. And if it turns out that charter cities are the best, fastest way to urbanize, I think they'll catch on whether or not the central governments really want them to catch on, right? Because I think we're going to see truly immense flows of population. Terrible urbanization is really the special economic zones of China, which some people, some people say they are kind of like charter cities, others say they're not. I think some type of urban political experimentation, it's overdetermined that something there is going to change fundamentally. Say in the US, I don't think the US knows how to allow new cities to be built. I don't think it even knows how to manage its existing cities. And if the US could crack that problem, you know, I honestly think it would grow much faster economically. Can you imagine how much more innovation we would have if San Francisco was a city of 6 million people or 9 million people? Like, think about the agglomeration effects. Think about the depth of industry that could be developed in someplace like the Bay Area. Having your lab and manufacturing facility and everything, like, be in, like, you know, driving distance, maybe even the same building, like, that'll be That's well said.

Gearing towards closing here, I want to zoom in on Bismarck, the institute that you've founded. I've already recommended the Bismarck Brief, your newsletter and report that I was lucky enough to read to prep for this. The archives are fantastic and you guys do regular work there. But I also want to talk about your consultancy a bit. I know you have many know, private clients. But I'm curious if you could talk a little bit about the work that you do. You know, we have, you know, prominent entrepreneurs, investors listening to this. You know, my guess is that it's, you know, people come to you and they either have a pet cause they want help on, or they want more social capital, or after doing well financially, or more political capital, or maybe they want to, you know, brainstorm with you on how to have the biggest impact given their skill sets and interests. Is it something along the lines of what I've just said, or why don't you talk about some of the work that you do?

Yeah.

The company, Bismarck Analysis, which I founded in 2017, is a consultancy and a think tank. We do produce a lot of original research. I think it's our strongest point. And with the work we do, we've done everything from sort of fully written out proposals for what kind of a nonprofit entity should you create if you want to see this as your vehicle to achieve impact in the world, or geopolitical risk analysis of various kinds for clients that had international interests. But we also do other interesting things such as like deep industry analysis, where we often provide an alternate We're almost like a B team that questions your A team's, you know, inner, like, inside view wisdom on where your industry is growing. And we take our economic political analysts that I've handpicked and have worked with for many years, and we go deeply into questions like, okay, what is actually happening with energy? What is the actual rate of progress in solar? What are the supply chain issues? What is the political entanglement? the supply chain issues. Work we've done, for example, has included, you know, work for clients, has included analyses of what actual political shocks change the supply of GPUs, which is pretty straightforwardly very important to AI companies. We've in the past also done competitor analysis. So if you're sort of worried about a competing company, We will just find everything that's publicly available about their company, give my and my team's valuation as to whether they're live players or not and who their key individuals are and who's basically running the company for real. And, you know, for a lot of people, that can be a competitive advantage as well.

Yeah. You guys are under the radar in terms of the clients that you work with, but it's been, you know, needless to say, it's been some very prominent individuals. Maybe, maybe last question. Why don't you just give us a little preview of some of your upcoming research interests or what you guys expect to, to write about in the future, or some of the questions that you're, you're pondering and trying to, to get better understanding about?

One of the most important questions of the near future is the Chinese nuclear industry. It remains to be seen whether it can fulfill the extremely ambitious plans set by the Chinese government. or whether it will fail to do so. If you can build 500 nuclear reactors or so, that is the kind of scale where those reactors are going to become cheaper and more reliable over a decade or two. Not to say they might not have a Chernobyl along the way, but those could actually outcompete South Korean reactors and American reactors and make China a much less fossil fuel dependent society. You know, If in the 1960s, IQ was the oil of France, well, maybe today IQ is the oil of China. So that industry matters immensely. We are also looking closely at the unfolding banking crisis, which I think is not over. I think we're seeing like a slow-motion burn that will require deep reforms of the US financial system. For now, let's say The government has been successful in slowing it down, but not stopping. I feel the dominoes still are slowly ticking on each other. And another relevant dive will actually be on artificial intelligence. We have done extensive research onto the future of the field, the key players and companies, the sources of talent. And finally, you know, battery production. I'm already fairly convinced That solar energy is, in the absence of nuclear, an energy revolution that decreases daytime energy costs. The only question is, will the advances in battery technology keep up, or will we see a world where, you know, during the daytime our power is powered by solar and at night we burn natural gas because that's like the most— the cheapest capacity to spin up and spin down as needed?

That's, uh, I would look forward to reading the report. that come from that. Samo, that's a great place to close. This has been a great overview of some, just some of your insights as it relates to geopolitics or global finance, AI and automation, and elite culture, elite intellectual culture. Thanks so much for coming on the podcast, Samo, and I hope to have you back sooner than later.

Yeah, it was great talking with you.

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