Samo Burja - The Great Founder Theory of History - [Invest Like the Best, EP.339]

My guest today is Samo Burja. Samo is the founder of consulting firm, Bismark Analysis, and has dedicated his life’s work to understanding why there has never been an immortal society. His research focuses on institutions, the founders behind them, how they rise and why they always fall in the end. As you’ll hear, Samo has an encyclopedic grasp of history and his work has led him to some fascinating theories about human progress, the nature of exceptional founders, and the future of different societies across the world. Please enjoy my conversation with Samo Burja. Listen to Founders Podcast Founders Episode 311: James Cameron For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes (00:02:52) - (First question) - The core thesis behind the Great Founder Theory (00:06:40) - Great ideas inevitably being discovered at some point in history (00:08:45) - The historic implications of a global adoption of the Great Founder Theory (00:10:51) - The different possible directions of future trends (00:17:08) - Distinctions between great founders versus live players (00:22:15) - Common misconceptions about what qualifies one as a great founder (00:24:38) - Noteworthy great founders in the United States (00:28:34) - Recurring observable traits and common themes of great founders (00:31:29) - Using caution when projecting a mythic lens onto great founders (00:37:53) - Social technology as the upstream effects of prior material technology (00:43:32) - Whether or not institutions play a role in propagating the work of great founders (00:49:08) - The role of power and differences between owned and borrowed power (00:56:51) - Additional ideas that play an outsized role in shaping the world (01:01:09) - A differing worldview to his own that he finds interesting (01:04:53) - Whether or not capital allocators can benefit from the Great Founder Theory (01:07:37) - The kindest thing anyone has ever done for him

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Patrick O'Shaughnessy?

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• 0:35Patrick O'Shaughnessy?

  Hello and welcome, everyone. I'm Patrick O'Neal and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts and you can access all our podcasts, including edited transcripts, show notes and other resources to keep learning at joincolossus.com.

• 1:00Speaker 01

  Patrick O'Neal is the CEO and founding partner of Positive Sum and the CEO of O'Neal Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum or O'Neal Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Positive Sum or O'Neal Asset Management may maintain positions in the securities discussed in this podcast.

• 1:32Patrick O'Shaughnessy?

  My guest today is Samo Burja. Samo is the founder of consulting firm Bismark Analysis and has dedicated his life's work to understanding why there has never been an immortal society. His research focuses on institutions, the founders behind them, how they rise and why they always fall in the end. As you'll hear, Samo has an encyclopedic grasp of history and his work has led him to some fascinating theories about human progress, the nature of exceptional founders and the future of different societies across the world. Please enjoy my conversation with Samo Burja.

• 2:05Patrick O'Shaughnessy?

  Samo, your writing has been amongst the most interesting that I've encountered in the last couple of years, just a tremendous variety of ideas and ways of looking at the world and history. One of the overarching things that you're best known for is this lens on history that you call Great Founder Theory. I'd love you to just begin by laying out the core idea here, how you came upon the idea and maybe what it opposes the alternative view of history from the one that you've developed. I'd love to start there and then we'll dive into lots of nooks and crannies together.

• 2:36Speaker 02

  To me, it seems that most of social science for the last 100 years has been focused on trying to find these macro deep patterns of human behavior, human history, sometimes being as hubristic to try to find immutable laws of history, such was the case in the early, in the middle of the 20th century. And while it certainly is the case that there are deep patterns that are worth studying in the nature of all civilization, from the advent of agriculture to today, and while it certainly is true, again, that there is a deep current that's changing our society that started with the Industrial Revolution

• 3:16Speaker 02

  200 years ago, none of these patterns were set in stone, none of these patterns are fixed. So I think none of them really rise to the level of sociological laws. And the reason why we can't just predict future history for the next few hundred years is that people observe society and they come to alter it. Exceptional individuals, great man's theory of history sense, perhaps don't determine everything to how things transpire. But I think almost all of the exceptional institutions that have shaped human civilization, anything you can think of, be it organized religion, technological companies, political systems.

• 3:59Speaker 02

  They usually have an individual or a small group of people who deviate from the previous social norm, create a new type of organization, a new type of institution, or honestly, just a new way of doing things as the old society fails. And we see this over and over again. Again, to give historical examples, it might take a very religious and legible form, such as creating, founding, the new organized religion. Say, for example, Muhammad reorganizing the tribal Arab societies into a cohesive, unified whole, ends up expanding and conquering most of the Middle East. It might take the form of, say, Confucius, who has this relatively

• 4:41Speaker 02

  modest social reform program, but ends up teaching something like a hundred bureaucrats who travel the country and try to spread the Soko philosophy of reforming the dysfunctional Chinese states during the Warring States period. And eventually, that comes to dominate their education system for the next 2,000 years. Or it might be Charlemagne, refounding what is basically a tribal structure into something that ingests Roman law, creating the Frankish Empire as we think of it, and link the groundwork for medieval European feudalism. It's not the case that Charlemagne, or Muhammad, or Confucius thought out the full effect of

• 5:25Speaker 02

  their reforms on society for a thousand or 2,000 years. It's just that it did shape human civilization for the next 1,000, 2,000 years. And if you removed any of them, history would have gone quite differently, not necessarily because of their personal impact, winning this or that battle, but from the perspective of reshaping the institutism, given the probabilities for these events.

• 5:55Patrick O'Shaughnessy?

  How do you think about things where if there's a compounding cumulative knowledge of society that builds on previous knowledge, so there's like always this adjacent possible and that there are certain ideas, let's take like calculus, for example, where like Newton and I can never remember if it's Leibniz or Spinoza effectively like discover quote unquote calculus at the same time and calculus is really important idea in like the progression of our understanding of the world or our ability to do stuff as a species. The fact that two people discovered the same thing at the same time and you see this, I think this happened with relativity and it's happened with other ideas, that it doesn't really matter who the person is. And if Einstein didn't exist, someone else

• 6:36Patrick O'Shaughnessy?

  would have discovered this idea. How do you think about concepts like that? It's inevitable and the person matters less, maybe?

• 6:44Speaker 02

  I think to some extent, there is knowledge which is over-determined and which just will be well discovered. There are any examples of this, right? We can even go much further than your analogy with Newton. About the same time, traditional Japanese mathematics, so in the 17th and 18th century, was in a way completely unrelated to European mathematics, basically discovering calculus. So sometimes these parallels go even across totally different societies. It is the case that some knowledge is like that, but I want to caution here that human organization isn't just knowledge. So the idea of monotheism or religious law

• 7:24Speaker 02

  or meritocratic bureaucracy, these are ideas that might be discovered independently, derived independently. But will that particular knowledge, that particular time, adhere into a new class of Chinese civil servants? Will it cohere into a new organized religion? Will it cohere into a concrete Frankish empire? I think there's nothing over-determined about that because it's not just knowledge, it's creation of human organizations that transfer this knowledge. That's why I talk about the creation of institutions as such.

• 8:00Patrick O'Shaughnessy?

  What do you think is the major so what of your worldview? If someone is converted, let's say, to your view of the world and history, what changes? What beliefs change? What behavior changes? Like if the whole world agreed that you were right, how would things be different, do you think?

• 8:17Speaker 02

  Well, I think for starters, people in the early 2000s would have not assumed that China will become a democracy just because it's becoming wealthy. That was in a way now in 2023, it's an acknowledged blunder of US foreign policy and an example of wishful thinking. The more constructivist view, a more great founder theory view would say, oh, let's examine the Chinese Communist Party. Let's examine how it's different or similar to the Soviet Union. Let's examine how well the machinery of the party works and then we'll make up our mind if this thing is going to stay in power or not as China grows wealthier. Now, it's still probably on net, the good thing that China became wealthier.

• 9:00Speaker 02

  But I do want to say that policy at the highest level and not to mention investment decisions are often made on the basis of long debunked historical theories. And looking at some leads as to what's happening in organizations, not taking it for granted that they will persist. That's a very important difference in worldview. I think it prepares us for a vastly different world. I think 50 years from now, we shouldn't expect a world that is like the present, but more so. I think we'll have deep institutional change within the Western world. The way, say, social media re-futured the way we approach politics, that's going to have deep consequences, deep changes.

• 9:45Speaker 02

  And there's no deterministic way to figure out how that's going to play out. Say, the introduction of social media in the West results in polarization and in China, it resulted in a very intense regime of censorship. So the same technology, the internet with social media on top, results into very different political phenomena.

• 10:06Patrick O'Shaughnessy?

  If you think about the power of that predicting the future is basically today plus progress in the same direction. What are different directions that stand out most to you as possible futures that might surprise people? If you take that 50-year hence example, what are things, trends, great founders, people that you're watching that might affect the way the world looks in 50 years that are very different than how it looks today?

• 10:30Speaker 02

  Think there are some interesting surprises where most of the Middle East will probably fail to properly industrialize and develop any sort of high-tech energy, any sort of transition away from oil. However, an interesting exception to this might be the United Arab Emirates. People a few years ago were surprised that there was an Emirati mission to Mars. Now, of course, this was mostly done by the Japanese Space Agency, yet significant partnership existed within UAE. People also might be surprised to learn that they are building nuclear reactors for civilian use. They also are starting to manufacture all sorts of other

• 11:12Speaker 02

  equipment within the country. So UAE might be a very successful, highly-developed country 50 years from now if basically the current monarchs, the successors, continue to be relatively directed while governing, if they continue to agentially adapt to economic changes. It's the same kind of transformation that perhaps we saw with Singapore over 50 years after its initial independence under Lee Kuan Yew, where he sort of broke the mold in a whole variety of ways and the usual advice for how a country should develop was ignored. And most of the countries that followed

• 11:52Speaker 02

  that advice didn't develop. Meanwhile, Singapore did. The other important one is that I think that the European institutions will decay much more than people are even now assuming. I think that significant chunks of Europe might become somewhat impoverished. And the key reason for this is that there are very few live players that is exceptional, exceptional people who can adjust to their circumstances in any position of power in Europe, in the European system, be it in the economic domain. There are a few exceptional new companies. There's a reason

• 12:31Speaker 02

  that European tech stagnates so profoundly. Russia has more unicorns than Germany. And Russia is not a well-functioning economy, but for whatever reason, it's easier to create a tech startup in Russia than it is in Germany, acquire like a large market and so on, large user base. Unless someone actively refounds

• 12:54Speaker 02

  European governments, the EU supranational bureaucracy, or even something like key industrial sector in Europe. Europe will continue to lose out of like one or two percentage point a year way, where at first it's imperceptible, then twenty, thirty, forty years on, it just seems a vastly different place. I think thinking of Europe as the formerly developed world will become common. What about the United States? The United States has some similar problems to Europe. It just has them to a much lesser degree. There's some discussion recently of American dynamism, of reindustrialization,

• 13:36Speaker 02

  of things like the CHIP Act, they're supposed to reshore certain kinds of manufacturing in the United States. Obviously, the US has relatively healthy startup scene. Obviously, artificial intelligence is advancing most rapidly. It's advancing most rapidly in the United States, here in the Bay Area. But I think ultimately, core problems of the US government have not been resolved. The US government is less functional, is less competent, is less cost effective than it was forty or fifty years ago. Whatever we think of other social changes, it is hard to deny that a government-run project will just be run worse than it would have been in nineteen sixty or nineteen forty.

• 14:19Speaker 02

  In addition to this, outside of artificial intelligence, software companies and tech companies have experienced a real slowdown. The reason that so much capital flowed into AI wasn't just because AI was wonderful and exciting, it's because there was nothing else around. There's a real genuine breakthrough with ChatGPT. But what else is happening? What happened to cryptocurrencies? What happened to software is eating the world? All of that, those mantras that created many, many new companies, value the economic out of those companies was smaller. The US economic growth, I think, is somewhat overstated, but real.

• 15:00Speaker 02

  Meanwhile, in Europe, I think we are already seeing the beginnings of just a contracting economy. In some ways, China is a good example of where our future is going. Both the United States, Europe, and lots of the developed East Asian economies and some semi-developed ones like that of China are experiencing a massive demographic transition. And some of these things are very much exponential, where, for example, when your population starts aging at first, you might even have an increase in total population, since while fewer people are born, previous generations are still alive and working. Eventually, you start to see a decrease in population, and one year is the population shrinking by a hundred thousand.

• 15:45Speaker 02

  In a few years, might be two, three, four million, just because it's already baked in so deeply. These are all compounding effects. So ultimately, that demographic headwind is something that only the United States is outrunning. A little bit with the help of immigration. However, mostly it's from rising productivity in the tech sector. And then the tech sector itself, it's making a big bet on AI. If AI doesn't work out, that is the big economy-transforming bet. I think the US will also slip into this kind of decaying state.

• 16:23Patrick O'Shaughnessy?

  If you think about some of the key terms that you've mentioned, I want to pick on two. Concept of a great founder and the concept of a live player, which is a term I love. I've sort of adopted my own version of it in lots of conversations. Maybe define what both of those terms mean and help us understand the relative frequency of those. How many great founders have there ever been in history? How many live players are there alive at any given time in your estimation? Give us your definition of those two terms and how common they are.

• 16:53Speaker 02

  Okay, I think every time a founder creates a new organization, this is a singular act of social creation, even if it's something relatively boring, like a technology company or a nonprofit organization. Their peculiarities and who they pick as staffing, what their decisions that they're making are. Similarly, what would the great founder be? Well, they're the creator of a key new social institution. We think one way to think of civilizations is that civilization isn't a single organism. It's less a tree and more a forest, where any individual institution can be replaced, and it still is recognizably the same civilization, the same ecological pattern. Say, if you were to look at Western civilization and observe that, I don't know,

• 17:38Speaker 02

  say, the Catholic Church is much less important now than it was a hundred years ago, just because society secularized, doesn't mean it's a different civilization, yet. When exactly, you know, does the forest transform into savanna or something like that? We can have those discussions. But it is true that some institutions vastly more influential than others. So having said that, how many unique pieces of, let's think of it as social technology, or unique civilization-defining institutions are there per civilization? Well, I think that most civilizations have sort of like five to maybe eight unique things that they're doing. So the total number of distinct, in this macrohistorical sense,

• 18:20Speaker 02

  civilizations for human history that we know of, I would say that it's about thirty or so different civilizations. Most of them, of course, long gone. No one is very much interested in Sumerian civilization, except as a historical case study today. It doesn't impact us in any profound way, except perhaps in some ways influencing biblical myths of the great flood and so on. So then let's say that about thirty civilizations, some of them still relevant, some of them ancient history, each of them having probably something like ten or so great founders. So I think for all of human history, if you were to chart the impact of these individuals, and again, I want to emphasize, sometimes it's

• 19:01Speaker 02

  a small group of people. It might be an individual plus a few very close allies, or it might be a partnership of two lawgivers, or anything like this. Such small human clusters, I think we're talking about five hundred people at most. Five hundred people at most for human history. And then for the term life player, all great founders are life players. Not all life players are great founders. A life player is someone that is not operating off of an inherited script. An inherited script might be something like professionalism, political tradition. It can be anything. It can be a very successful script.

• 19:41Speaker 02

  If I am a surgeon and I work exactly as I was trained, I'll be doing a fairly good job. Then I can repeat this exact program, this recipe that I've been taught, and of course, apply it in my domain with some creativity. And society basically functions on the top of such roles, on surgeons, engineers, plumbers, but also lawyers, politicians, priests. A live player, though, is someone that can, on the spot, improvise, develop, and create new social roles. And one of the surest indicators that someone is a live player is the ability to jump multiple industries. So if you see someone that's succeeded in one industry and gone to a totally unrelated

• 20:26Speaker 02

  field of activity and succeeded there as well, and then gone again and succeeded as well, it's very unlikely that's luck. And it's very unlikely that they're using the same recipe or the same insights for all three domains. And I think that's sort of the strongest evidence that some individuals can recreate patterns of behavior and improvise essentially in a way that's basically just very deep, very groundbreaking. And I think the total number of live players in the world probably reckons closer to about 50,000 or so. So it's actually still extremely rare. A fun historical example might be Arnold Schwarzenegger, who rebrands from being a

• 21:09Speaker 02

  weightlifting champion to being an actor, to being a politician. Well, look, while he was an actor starring in blockbuster movies, people said, oh, he's not really an actor. But as soon as he became a politician, people said, he's not really a politician, he's just an actor. So it's that kind of jump to a different activity that demonstrates an aliveness and adaptability.

• 21:30Patrick O'Shaughnessy?

  I have so many questions about both, maybe starting with great founders, since there's so many fewer of them. What's an example of somebody that we all might have the inclination as a great founder, I'm going to make one up like Napoleon or something, that is in fact not one and why? Like, I just want to use an example or two to really drive home the point that potentially so few people have effectively driven what happens in the lives of however many billions of people that have lived through human history.

• 22:00Speaker 02

  For Napoleon, he won many battles. He was an exceptional general. But if he were to become a great founder, I'm not yet convinced that he is even, it would mostly be through the military and legal reforms that he instituted. Now, when it comes to military reforms, I think that his method of directing battles and so on with the general staff and everything, that was somewhat influential. But I think it was over determined to have developed in that direction even without Napoleon. The interesting thing, though, is that his code of law that spread across Europe, that could be argued to be profoundly influential. That was actually the moment when Europe stepped away from feudalism,

• 22:45Speaker 02

  when adopted a very different legal framework. Say guilds were outlawed in Lock Europe. It would be an exaggeration to say markets were opened, but it would not be an exaggeration to say that people from all walks of life could suddenly enter positions in not just the French state, but all of these puppet republics and kingdoms that were set up. Even in countries that were strictly opposed to Napoleon, who were only coerced into alliances such as Austria and Prussia, some of these reforms were imitated because they were so administratively and politically successful. Now, having said all of this, it's still not clear Napoleon is a great founder.

• 23:27Speaker 02

  It might turn out that in fact this civil code, this reform is much more important than we think. However, it seems to be a fairly short chapter in European history, with it being not directly related to the Industrial Revolution as such.

• 23:44Speaker 02

  Doesn't seem like Napoleon's reforms were particularly conducive to France becoming a great industrial power fifty or eighty or ninety years later.

• 23:53Patrick O'Shaughnessy?

  If there are just five to ten of these key great founders per civilization, what are some of them for our civilization?

• 24:01Speaker 02

  It's very much a cliche to talk about America's founding fathers. But I'm pretty sure, and historiography can disagree here, that at least two or three of them will end up being considered great founders. Benjamin Franklin is a good guess. Thomas Jefferson is a good guess. Alexander Hamilton is a good guess. Say, Hamilton can be argued to be the father of American industry in a way through trade policy and through this prioritization of factories. The Jeffersonian political ideology is radical and very different from what you have previously in the British Empire and in the colonies. And of course, you know, his role as a president to attempt to put some of that into practice.

• 24:46Speaker 02

  There are other exceptional individuals in the last four hundred years that are not in the United States that could be considered great founders. I think for better or worse, Martin Luther could be considered such. Protestant Reformation was immensely destructive at first in Germany. It's undeniable. The result was the Thirty Years' War, the Wars of Religion, all of that stemmed out of a religious conflict between Catholics and Protestants within the Holy Roman Empire in Germany. It is undeniable that the Reformation and Luther specifically created a distinct Northern European civilization that rose and became first the driver of global capitalism and

• 25:31Speaker 02

  then a driver of industrialization, technological progress, and came to, in a lot of ways, militarily dominate most of the world. And it has maybe two expressions. You could say that the British Empire is an expression of this Protestant civilization, and then so is sort of the German Empire. So again, it branches off into many different directions. If we were recording this podcast in 1971, it would be quite plausible to argue that, say, Marx was a great founder. Again, you don't want to necessarily always endorse the effects of someone or their reshaping of civilization to acknowledge it. Because if we were recording this in 1973 or something like this, half of the planet

• 26:13Speaker 02

  is communist. And here's a fun one. If China becomes a dominant civilization for the next 200 years, you know what? Maybe Marx was a great founder. Why? Because modern China isn't Confucian. It's a Marxist society. If you read CCP documents and their official ideology, they in fact believe that they are practicing a straightforward evolution of Marxist theory. And this is in a way the state ideology of a country with 1.3 billion people, the world's second largest economy. We take it sort of for granted that the, say, Bolshevik Revolution and the communist world is in the past. Quite possibly, China is

• 26:57Speaker 02

  here to stay for a very long time. And perhaps we can think of them as a distinct civilization. And maybe it's lazy of us to think of them as historically China, that's imperial Confucian China. They're an intensely modern society. They're building huge numbers of Chiways. People own cars mostly. They drive around. And the consequence of this sociologically is that in some ways, it's going to become more similar to the United States, which is also a car-oriented culture. But this is just fundamentally such a different China that I think thinking of it as a new civilization is perhaps warranted. And if that's the case, if this China is actually sustainable, then then Xiaoping is probably another great founder

• 27:41Speaker 02

  of that Chinese civilization, because he figures out a way to have their political system not choke off economic growth.

• 27:50Patrick O'Shaughnessy?

  If you think about the common traits of these people, what have you observed? A lot of the ones you've described are, I would describe as thinkers or systems thinkers or something like that. Others are institution builders, doers. Is there any sort of common story to these people? I have in my mind that movie, The Truman Show. There's like a process of waking up, so to speak, and realizing that you're sort of like in this high inertia way of doing things and they break free for some reason. Like, is there a common story of the people's lives or anything else we can learn about the pattern of these people?

• 28:25Speaker 02

  When it comes to the thinkers, I have to emphasize, all of the thinkers I listed are people who inspired very dedicated disciples. That's true of Confucius. That's true of Marx, right? Let's remember, he was supported by basically a rich, very er, right? Engels supported him. He was extremely well-known in his time. Benjamin Franklin, obviously a thinker, but also a political actor. All of them inspired at least disciples and many of them personally created relevant new organizations. And the common thread that I would put is, I think each of them was willing to radically

• 29:04Speaker 02

  revise, either in thought or in action, a key plank of society as existed before. You are proposing that the community of your local tribe and clan is going to be replaced by the community of all believers. Like, that's a radical departure from where previously society was set to go in Sia Raven Peninsula of the sixth century. You are posing that, actually, we shouldn't worry if something is not sufficiently communist or if something is private property or not. Actually, anything that generates wealth, I will just define as communism. That's a radical thing that Deng Xiaoping is doing.

• 29:49Speaker 02

  Whether he intellectualizes it, as he does in some essays, or whether he puts it into practice, these are just different mechanisms of breaking from a social consensus of how everything should be oriented. And then instantiating it in the world and having it actually work. Because if you propose a failed social reform, it is implemented and it's just an unmitigated disaster. Then your effect on human history will be limited, since this is an experiment that has played itself out. It's an experiment that doesn't necessarily reproduce itself. So that would be the commonality. I think radical reimagining of how society can be, followed by expressing it in a way that's charismatic.

• 30:33Speaker 02

  It inspires disciples, cheering on this mission, this reform program. Or luckily implementing it yourself with political decisions, essentially.

• 30:44Patrick O'Shaughnessy?

  If we think about their contribution being these new social technologies, you called them. And then I want to talk about hard technology too, and whether or not that's up or downstream of social technologies. But if you think about the journey of each individual to arrive at the social technology that they then propagate through the world. Is there like a Joseph Campbell hero's journey story behind these people where they're sort of crossing the threshold, so to speak? And entering some dark, unknown forest and returning back with their new idea, the grail equivalent in Campbell's writing is. His story just overlaid to social technology as the grail that unites these common stories, do you think?

• 31:24Speaker 02

  I think we have to be very careful when reasoning across so many diverse case studies, especially since here's an interesting one. Most of these individuals have become so well known that they've become mythologized. So is it the case that, say, human psychology follows the Joseph Campbell story? Or is it the case that when we tell a life story, we can't help but format it in this Joseph Campbell style? You ask this question, if I just went from the written sources, I'd say, oh, yes, yes, they all have a hero's journey. But actually, I'm much more skeptical of that. I'm much more like, well, when we retell their story, we always retell as a hero's story. And when I or you or anyone who's listening now goes to read a book about Napoleon, a book about the actual historical Confucius.

• 32:10Speaker 02

  It won't be able to avoid telling a hero's story, a story of journey, beyond the limits and returning with something unique. However, look, let's put it this way, there's more commonalities than what I said, though. Almost all of them have deep conflict and social opposition. Experience serious opposition in their life. It's much stronger than just fierce intellectual criticism. It is at least public slander and all the way to violent opposition. People will recognize breaking with a societal pattern as antisocial behavior. This is actually mostly correct.

• 32:50Speaker 02

  For most of how society operates, deviation is a pretty good marker that someone is basically behaving in bad faith, trying to take advantage of a system, not living up to whatever the ideals of the society are. Or if you institute new ideals, these new ideals must necessarily be from the perspective of old ideals, a norm violation. Say, Martin Luther, you probably won't be surprised that he had to flee several times in his life, faced a religious persecution, was in real danger of dying, being executed as a heretic multiple times in his life. But on the other hand, he was also such a combative, disagreeable person.

• 33:31Speaker 02

  So another feature is, I think a lot of these people are quite unreasonable people. I think if you're a reasonable person, you adjust yourself to the world. And then if you are an unreasonable person, you try to adjust the world to yourself. And it doesn't need to be egotistical. You might view yourself as a humble instrument of God. But let's be honest, viewing yourself as the humble instrument of God, preaching the truth to your society, and that's pretty egotistical, too. You have to be trying to fool yourself to think that God chose you specifically. Maybe God did, for all we know, let's be metaphysically agnostic here. But it is a very unreasonable social position, and the majority of people who try to adjust and change the world to fit them,

• 34:16Speaker 02

  they just fail because there are very good reasons for most of the things that we do. There's very good reasons to do things the way they've always been done. And you have to be so immensely psychologically fortified against basically everyone disagreeing with you at first.

• 34:35Speaker 02

  To achieve something in your life. So let's put it this way, they all are immensely psychologically tough. Become tough through the course of their life. They all suffer negative social censor. And at the end of the day, I think many of them, but not all of them are somewhat deluded about their personal capabilities. Are they sociopaths? Sociopath is a strong word because many of them have deep empathy in the sense of being able to understand other humans. So there are some of them that definitely have sociopathic traits. That's definitely true. It's an interesting question as to what the role of sociopathy even is in society. I used previously the example of a surgeon, right?

• 35:16Speaker 02

  Being a surgeon immensely beneficial to humanity, but a pretty sociopathic activity. You're kind of cutting through people. And again, for Deng Xiaoping, his blood on his hands, because he was operating in the Chinese Communist Party. They're definitely political prisoners. He ordered, could be executed. There are some professions that demand a type of those sociopathy, some political historical positions. Maybe it's just always immoral to be in them, or maybe they have their own type of morality. That's like, again, an ancient discussion. It's been reheated many times over in the Italian Renaissance, in the 18th century, et cetera, et cetera. Napoleon inspired these debates as to what even is morality?

• 36:00Speaker 02

  If you are Napoleon and the whole Nietzschean arc goes from there as well. I would say that if you believe you are a demigod, you are deluded and you're basically insane. But if you're Alexander the Great, you're basically also correct. As Greeks thought of demigods, Alexander the Great is a demigod, at least as much of a demigod as, say, Hercules is. So when he claims that, you know, oh, my actual father is Zeus or Ares or whatever. When you look at his life, this guy who conquers the known world is acknowledged by many people as some sort of divine being in his lifetime.

• 36:39Speaker 02

  When he visits the eastern empires in Persia, in Egypt, and he conquers them, he adopts those political forms. Like honestly, from the Greek perspective, he kind of is a demigod. That's the interesting thing. Megalomania, one thing that is immensely destructive and is profoundly personally tragic. If you're Alexander the Great, is it even megalomaniac? Or is it just an accurate appraisal of sort of where in the world you are and how your culture perceives you?

• 37:09Patrick O'Shaughnessy?

  Another thing you've written about that I find fascinating. If a lot of people think about history, they might think of it as the march of hard technology. In this example I used earlier, ideas building on ideas in a very kind of hard math and science way. Your idea is that these social technologies, which are installed by these great founders, are actually upstream of hard technology and innovation. Can you describe that mechanism as you see it and why you think the world works that way?

• 37:37Speaker 02

  I think material technology, that is hard technology that you described, and social technology are intensely mutually symbiotic. You can't have one without the other. Everything from, say, a Bronze Age empire relying on the infrastructure of bringing copper from the eastern Mediterranean and tin from the British Isles or Afghanistan smelting them down into weaponry. There's a real technological and infrastructure base there. So Bronze Age empires rely on that. Everything from that to modern chip fabs where we need a planet's worth of economies of scale so that a small island off the coast of China can invest hundreds of billions of dollars into, what, four factories?

• 38:22Speaker 02

  Make the chips that are in every device we all have and carry with us daily? That's crazy. That's a crazy technological dependency for our society. But it goes the other way, too. The technology depends on the social. I described global trade. Well, the global trade rests on the chip fabs themselves. No, not really. Maybe you could say that, oh, it rests on the hard technology of the US Navy. But wait, what is the US Navy? If the US Navy is keeping the world's ocean safe and navigable for trade and the US has supported a system of free international trade, et cetera, et cetera.

• 39:02Speaker 02

  It becomes very murky and becomes very hard to arrive this at the phenomenon of the technology itself. Most importantly, if the technology itself, the material technology, was all that was driving forward human history, it would look much more like a ratchet. It wouldn't look like this thing with fits and starts, this thing that has a rise and fall of very advanced civilizations all the time. It wouldn't have civilizations going down blind alleys. Consider 16th century Japan, very adept at gunpowder warfare, very adept at using the gun. The gun is outlawed after Japan is unified, and Japanese guns stagnate for the next two or three hundred years.

• 39:45Speaker 02

  Look, if it was just you introduce the gun to society and then modern warfare starts to develop, Japan wouldn't have fallen behind the Western world. We often talk about, again, in the American mythological context, if you introduce personal firearms, that's a force for liberty. Yet in much of Asia, actually, in the 18th and 17th century, the introduction of firearms empowered large centralized militaries. The rifle in the hands of a Napoleonic soldier can be either, you know, a tool of despotism or a tool of liberation. It's a mass exercise, not an individual exercise. We're discussing guns. What about the printing press? I mentioned Martin Luther earlier.

• 40:29Speaker 02

  Honestly, the first thing that was printed on the printing press wasn't Martin Luther's Bible, it was envelgences. So it was first used as a financial mechanism to fund the papacy and strengthen the papacy, but only later comes to be adopted to into bibles, in the dialect, in German that is. And also, there were variants of the printing press that were introduced in Chinese society, in Korean society, long before the printing press was invented in Europe. So a simplistic story where you say, oh, guns lead to personal liberation, or printing press leads to information liberation, these are not far tendencies, these are possible

• 41:12Speaker 02

  routes you can go down with that technology. And then finally, there are clear examples of technology advancing and then regressing. If it was purely the growth and development of a technical base with no social factor whatsoever.

• 41:28Speaker 02

  The Roman Empire would never have fallen, or if it did fall, we wouldn't have lost technologies such as Roman concrete or Heron steam engine, which was a primitive steam engine used in Alexandria. We wouldn't have lost mathematics, significant chunks of mathematics that were forgotten for a thousand years. People understood quite well in 200 B.C., the earth is round. This was known, Eretostenes calculated the size of the earth. So there are all sorts of interesting examples where we can show that scientific knowledge advances and regresses. And more importantly, when we can show technology advances and then regresses. I feel like a lot of the advocates of a more hard technology view want to have it both ways.

• 42:12Speaker 02

  They want technology to be all important, but they will acknowledge if pressed that technology is fragile. So I'm like, wait, which is it? If technology is all important, except for it being very fragile, wait, maybe we should study the societal causes of that fragility. And they do acknowledge these are societal causes, they're not like material causes. That's the way to think about it. It's that social organization is a prerequisite for technologies, for material technologies. And material technologies are a prerequisite for many kinds of social organization.

• 42:48Patrick O'Shaughnessy?

  What about institutions? Are institutions all important in the way that you just described? Because it seems like we've got like the people and the ideas, we've got the hard technologies. The missing piece is like the actual persistent institution that lasts across many human lifetimes, sometimes for very, very long time, that propagate forward the social technology or ideas of the great founders. So what role do the institutions play?

• 43:13Speaker 02

  The institutions are essentially these neatly entrenched, repeated patterns of human behavior, where every institution has to basically replace the members to compose it. We talked about many examples today, sometimes talking about states, sometimes talking about religions.

• 43:30Speaker 02

  Organized religions, that is. But it also can be something like a particular city. The city of Athens, as it exists in the classic era, is a particular set of institutions. If you completely change the politics of Athens, sure, the city is still there. But whenever a unique genius was cultivated, whatever their version of a meritocracy or natural aristocracy was, where exceptional people came to prosper, have political power, and then they would also on the side debate philosophy with each other, that goes away. There is the case that you can have nearly the same material base, but a very different pattern of coordination. And in that case, you can't really say that the institution persisted.

• 44:15Speaker 02

  Say if Athens is conquered by Persia and is governed by a Persian governor, and it's not given autonomy, you can't really say that this is the same Athens with Socrates. And of course, Persia never conquered Athens. However, now that I've laid out an example, let's say, of Athens, every institution must solve the succession problem. That is, human beings are mortal. And sooner or later, no matter how talented, how long lived, you have to replace them. And for whatever pattern an institution embodies, be it a political system, an educational system, an economic production system, you have to find new individuals who can fulfill that role. And there are a number of ways you could do this.

• 45:00Speaker 02

  But that is the most fundamental role of institutions. Let's put it this way. If human beings were truly physically immortal, if we continued to live in the same society for thousands, maybe even millions of years, I'm not sure we would even have institutions. We might have tribes. But every individual would become this deep repository of know-how and social connection and obligation favors owed, favors given. It'll be something really interesting. It might be actually a very anarchic society at the end of the day. But because we are at least physically mortal, I assume just generally mortal.

• 45:43Speaker 02

  The result is that you're born into a world. You are introduced by your parents in a way in your society. And institutions function as repositories of social reputation. The outlives an individual. So if I tell you someone went to Harvard today, went to Yale, you know something about them. Wait, do you know anything about them? You don't know anything about them. What you know is facts about what kind of person Yale and Harvard. Wow. Study there. That's what you know in a very fundamental sense. So that's how those elite universities function as cross generational repositories of social reputation. I'm more skeptical of their ability to transfer knowledge.

• 46:28Speaker 02

  But let's say that the education system in general, not elite universities specifically, also function as the mechanism of formal transfer of knowledge and the verification that knowledge has been transferred. So we therefore have the educational function. We have the transfer of social reputation function, so kind of social accounting function. And finally, also, there's a scaling function. An institution is many, many people working together towards a common end. And there's a straightforward way in which an organization of a thousand people, like if I personally undertook it as a mission to build a car.

• 47:10Speaker 02

  It could be a lifelong quest for me to build every single part of the car with a metal workshop somewhere in my basement. But on the other hand, if I worked in a factory and I worked there for forty years, I might not have assembled a single complete car. But I've probably assembled the equivalent of five or six or honestly, no, probably more like sixty or seventy cars. I've contributed parts to thousands of cars. And this industrial logic lies to so many things. It applies to bureaucracy in its best sense. Say, when you take a census of a country that is just counting the number of people, that's in a way a very distributed form of labor.

• 47:53Speaker 02

  You can get an estimate of who owns the land, where is land, et cetera, et cetera. And it's only possible due to a very deep division of labor and a very deep standardization of, say, the kind of surveying that's done. So there is a bureaucratic, not just a factory equivalent, some sort of economies of scale. No matter what I personally did, I probably could never on my own figure out how many people are living in the United States today. Were that information not already pregathered by the US government?

• 48:24Patrick O'Shaughnessy?

  How do you think about the notion of power? I really liked your division between borrowed versus owned power. But I'm also just generally curious about the role that power plays in this whole story that we've been talking about today. I guess another way of asking is, is there a great founder that wasn't powerful in some way? Any thoughts you have on studying power, its importance and its utility would be fascinating.

• 48:47Speaker 02

  To shape the world, you just have to be powerful in some sense. And perhaps it doesn't mean that you are extremely prestigious in your life, that you're accredited in your life. But there are changes you are affecting on the world, either people are aware of or not, that ultimately are kind of just your decisions. These are not decisions taken by the consensus of society. In fact, actually, this might be my most radical claim. I don't think society as a whole decides to do anything. I think due to basically a certain kind of luck, the talents, character you're born with or that you're raised into, right? That's in a way luck.

• 49:28Speaker 02

  You don't choose who your parents will be, who your educators will be, what your environment will be. So due to a certain kind of luck, people come to be able to choose for all of society. And that's really remarkable. Okay, if I think of a recent film that tries to present this, I think the Oppenheimer film is a pretty good example. Oppenheimer mythologizes himself to a great extent, but it is true that he personally was not completely replaceable. If he personally had not worked on the Manhattan Project and led a lot of the scientific work and persuaded many of the scientists to work on the project, maybe the United States has

• 50:12Speaker 02

  the atomic bomb in 1946 or 1947. That is a very different world, but as a world where World War II has already ended, maybe the atomic bomb is never used on civilians ever. Or maybe, you know, in the 1950s, because no one knows how terrible it is, there's a nuclear war between Russia and the US where dozens of cities are destroyed. These are difficult, weird decisions, and I think it's dishonest to say that they are not exercising power. When you choose to work on something or choose not to, then your talents and positions are actually unique.

• 50:50Speaker 02

  I call it luck in an important sense because I don't think it's helpful or fruitful to be excited by those opportunities. And I think the sort of like Oppenheimer mild dread of, wait, I have to figure this out. That's actually like a much healthier one, though even that can go too far. And so because of that, I think that maybe the view should be that, okay, yes, all of these individuals are powerful, and the wisest of them also realize, though, that they are also responsible. In a way, my view of history is also like kind of terrifying. It's like, okay, if you are a great founder, if you're one of 500 people in history, and

• 51:31Speaker 02

  if eventually people come to an accurate understanding of history, your role in human civilization will be accounted for. Wow, I don't even know what to say about that, right? I'm happy I'm not in that position. Don't envy anyone who happens to be in that position. Humanity is gonna look at what you did.

• 51:50Patrick O'Shaughnessy?

  Can you define the idea of borrowed versus owned power for people? I think that's a super interesting concept.

• 51:56Speaker 02

  Owned power is something that is sort of inherently within your reach. It is something that you have no difficulty defending, and you really rely on very few people to carry it out. Borrowed power is wielding power on someone else's behalf. So there's an interesting way where over time borrowed power can change into owned power. Let's have a simplistic example. An absolutist monarchy in the 18th century, the king controls all taxation. Let's say, and the king relies on civil servants. And at first, the civil servants are dismissed at the leisure of the king.

• 52:41Speaker 02

  Over time, though, it becomes harder and harder to know who to fire. So what at first is the borrowed power, the bureaucrat versus the power of the king, over time, becomes more and more the owned power of the bureaucrat. Because it's totally illegible. So by the time you roll to the last Louis, state apparatus can work fine without the king at all. Or has diffused into all of these existing bureaus. A different example might be a more everyday example. There's a way in which, if you are employed by a key organization, if you look at the Secretary of State in the modern United States,

• 53:22Speaker 02

  they have certain powers and certain abilities to change the world and change US foreign policy. They also usually have quite a bit of owned power. However, if they can be dismissed by the president or anyone else, there's some other mechanisms as well, from their role, they lose that power. So that was actually always borrowed power. So most political offices in republican systems of government should in theory be borrowed power. It's where the whole concept of servant of the people, et cetera, comes from as well. And every job, unless you have engineered it so that you cannot be fired, is a form of borrowed power. If I was hired to redesign a key aspect of a modern car,

• 54:07Speaker 02

  with the ability to shape what the next model, what the next Tesla will look like, only until I'm fired. And then it's going to be clear that my power was borrowed from ultimately the owner of the company. So maybe intermediates like owner of the company, there's a board, there's a CEO, and then below the CEO is like the chief technology officer or whatever. And there's like an interesting clear chain of borrowing there. You could go even further, and it's actually been an interesting dispute to what extent is property owned or buried power. It's always a relative description. There's no such thing as like, in all cases, absolutely owned power, or it is impossible to lend power without giving up some of your power as well.

• 54:52Speaker 02

  It's this extreme example of like a despotic ruler in Han China. As soon as you delegate, there are some things about, oh, the job was done that you don't know, that fundamentally this power now rests with your civil service. Perhaps the way to think about this is in economics, people talk about the principal agent problem. There's a way in which you can pay people, you can pay them to do the work, but you can't really pay them to care. And you can pay them to do exactly what you've defined the payment should cause them to do, and nothing more, nothing less. There's always something that's not captured by this.

• 55:31Patrick O'Shaughnessy?

  Are there any ideas that you think play an outsized role in history? Your discussion there just makes me think of property rights. We all sort of in the West just take property rights for granted, and probably there's an argument, a huge amount of what the world looks like is based on the simple idea of property rights, or a few other key ideas like that in the modern world. Are there any other ideas that just you find the most fascinating or have had the most leverage on how the world ended up being that you would encourage people to study?

• 56:02Speaker 02

  I also want to emphasize that it's not just the idea of liberty rights. It is a whole set of concrete institutional enforcement mechanisms. And one could even argue that concept of property has changed actually quite significantly several times over the last hundred or so years. Property is a very important lens to see the world through. It's a very deep set of ideas and assumptions about the distribution of society. I think that when it comes to political order and sovereignty, world could have looked very different. Like, there's a way in which in 1945, when the United Nations is created, it's supposed to be kind of like what the European Union is today. It was supposed to be United Nations Parliament even.

• 56:47Speaker 02

  It was in the Charter as an option. So in a direct elected body, it was supposed to govern war and it was supposed to govern global cultural development and it was supposed to prevent buckbreak of things like World War II and it was supposed to safeguard rights of individuals in those countries. So needless to say, the United Nations did not succeed at this mission. It failed. We take it for granted it failed. But in 1945, that was far from obvious. And even today, the debates of how far sovereignty goes or not are not fully resolved. So this idea that, oh, actually, there is no legal authority beyond a particular country's government. It's an interesting one.

• 57:27Speaker 02

  And even in medieval Europe, for example, first it was an authority above a king. It was at least divine. And then the final question was, above this authority, is Pope the person that interprets this authority? That's a large reason for the conflicts between popes of medieval Europe and the kings and emperors of medieval Europe. It was unclear what exactly sovereignty really entails. So, okay, we have sovereignty, we have property rights. I think that the idea of...

• 58:02Speaker 02

  Science or philosophy, or the idea that through reason, we can come to understand the world. This is something that could be taken for granted. There are many societies that are much more fatalistic than our society is, where it is assumed that the world actually on a fundamental level does not make sense. Therefore, to try to reason your way to an understanding or approximate understanding of it is a futile endeavor. And our society might say that, oh, it's impossible in an individual lifetime to think through everything that's happening in the world. But this went until recently was the mainstream consensus was that in principle, that's possible. Like in principle, you could figure out the physics of gravity and electromagnetism.

• 58:44Speaker 02

  In principle, you could figure out the biology from or the biology of your own liver. In principle, you could figure out how society works. So that sort of view, which again, you could call it science, but I feel the term science has become really watered down and distinct. Let's call it something like belief in the power of reason, I think. And it is ultimately and ironically a belief that is very hard to justify with reason. But okay, but doesn't preclude it from being an extremely powerful force that reshaped the world.

• 59:18Patrick O'Shaughnessy?

  That's a Gödel or something, incompleteness theorem makes me think of that.

• 59:21Speaker 02

  Exactly, right, right.

• 59:24Patrick O'Shaughnessy?

  If you were to imagine someone extremely smart, thoughtful, who you respect very deeply, who most disagrees with your worldview. Curious if like any actual person comes to mind, but also just like generically, like what you think the most different version of a worldview is from your own that you find interesting for some reason.

• 59:46Speaker 02

  It's an interesting and it's a difficult question. I think that Peter Turchin has an interesting approach. He's an American, not quite historian, more like complex systems theorist. He's founded this field called Cledynamics. You could think of it as a almost Harry Seldon like.

• 1:00:04Patrick O'Shaughnessy?

  Psycho history?

• 1:00:05Speaker 02

  Yes, to produce like a macro mathematical model of history. He ends up finding what I think are patterns of distribution of elites, applies this old sociological theory that's actually from the 1900s. Wilfred Pareto already spoke of it. The idea of elite overproduction, where elites in societies strapped in direct surplus to achieve certain goals. However, people aspire to join the elites. Eventually, there are too many elites for the society to sustain itself, and the elites start fighting each other as to who gets to stay elite. And that this is kind of the cycle of violence and peace, and that you can have these cycles over a long period of time.

• 1:00:48Speaker 02

  It's not so much that I think he is wrong in some of the patterns that he observes. It's just that I think that patterns hold until they don't. These are long patterns that break. There is no clear statistical way to predict when these patterns break. And the breaking of the patterns, I think, sometimes is due to the work of great founders, where they might take a civilization that was on terminal decline, that was set to self-destruct and emulate in like interminable civil wars, and reorient a totally different political system directs those energy outward.

• 1:01:28Speaker 02

  Or you might have the periphery of declining empire that manages to break away from that empire, obtain its independence, develop a whole new difference of social norms, and it becomes the core of a totally new civilization. These are the things that are not really well captured by these statistical models. And these are things that are not, I think, over-determined. Now, ultimately, we can get into debates of free will. You can say, ah, but every individual is a deterministic product of their society. And sure, that's true. If the fate of the society actually depends on a few individuals, then it is not possible to study those individuals sociologically. What's happening inside my brain?

• 1:02:12Speaker 02

  It doesn't make sense to use theories of elite overproduction for that. Then it becomes maybe a psychological or biological question. And you know what? The brains of the great founders that shaped our world, they're long decomposed. So we can't actually study that. So we have to acknowledge the limits of our sociological knowledge. It's almost kind of like an event horizon consideration, even if theoretically it's fully deterministic. So. I would say that this leads me to my second disagreement. I think we lose far too much information about past societies to be able to develop such highly accurate quantitative models. We have decent quantitative information on, say, the economy of the last hundred years.

• 1:02:56Speaker 02

  And if you've ever tried to study even, say, economics or politics of 18th century Europe, you realize there's all kinds of data that are really hard to access. And if you go even further back to the 14th century, it gets even more difficult. So really, we're operating with very sparse dataset. So yeah, Peter Turchin is very interesting. I think Steven Pinker, rather well-known. I think I completely disagree with the idea of a linear ratcheting development of human progress over time. I think that progress is always bounded by the civilization you find yourself in. These civilizations tend to be mortal, so there will be progress for a civilization until there's not, and then the civilization fails.

• 1:03:41Speaker 02

  And perhaps there's a new civilization that picks up at a more advanced level. Perhaps the new civilization is actually more primitive than what came before. I think that my view of history would not be that it's exactly cyclical, not at all. There's further evolution. I do think that, again, that we've been on a curve of, we're compounding material and moral progress for the last 10,000 years. I think that can be easily disproven.

• 1:04:08Patrick O'Shaughnessy?

  Is it a reasonable conclusion? Now I'm zooming down to like my world of investing and the allocation of capital. It's very well established, this extreme power law Pareto distribution, that very few companies represent the vast majority of, let's say, the market cap or enterprise value in the world. And this is kind of always true, like in any era, that's always the case. In investing, a couple of companies account for like a huge chunk of their overall return, and vast swaths of companies represent like no return. Is it reasonable from our conversation then to conclude that like a capital allocator should effectively spend all their time being like an elitist, only looking for the absolute

• 1:04:50Patrick O'Shaughnessy?

  best live players and/or potentially great founders because they will drive?

• 1:04:57Patrick O'Shaughnessy?

  Effectively like all the important things that happened in the world?

• 1:05:00Speaker 02

  With capital allocation, it's tricky because so much of it is that capital is kind of always on fire. So sometimes the least roomed investment is actually a great investment because it beats out what would have otherwise happened. I think that venture capitalists would very much agree with the hypothesis that you should seek the outliers. I think very, very few of them actually manage to figure out who the outliers are. It's also the case that while something might be world shaping, it doesn't necessarily always make for a great financial investment. The vehicle of investment is not clear. Say, if you met a Steve Jobs early in his career,

• 1:05:43Speaker 02

  you might not know which of his ventures to invest in or when to invest, or when exactly this would become among the most valuable companies in the world. So even if you knew the individual, the human capital, the timing can be absolutely crucial. It might have seemed like a terrible investment, actually. After Steve Jobs left the company the first time, it might have seemed like a complete write-off. I think that perhaps the strongest lesson is the societal consensus of where society is going can be profoundly wrong. This means that even everyday investments and everyday individuals and everyday companies and cities and so on, like real estate, whatever, the common wisdom might be wrong.

• 1:06:27Speaker 02

  And discovering when it's wrong can actually lead to good investments. Even if you don't find the next Steve Jobs, you might say, for example, realize that, oh, actually, there's not that many reasons to be optimistic about Paris or Berlin real estate. If the economies of the countries are going down in the long run, maybe even Tokyo is not that great an investment because eventually you're going to run out of the Japanese people.

• 1:06:53Patrick O'Shaughnessy?

  Yeah, fascinating application of the ideas. Sam, this has been so much fun. I absolutely love so many of the things you've explored. It's such a fun way to think about it and learn about history. I ask the same traditional closing question of all my guests. What is the kindest thing that anyone's ever done for you?

• 1:07:10Speaker 02

  I think it was in my mid twenties where a person that I just corresponded with on the internet let me stay and just sleep in their couch for like a month while I was hunting for a job here in Silicon Valley. And I'd never been in the United States before, but that was very generous of them and immensely helpful.

• 1:07:30Patrick O'Shaughnessy?

  Samo, thank you so much for your time.

• 1:07:32Speaker 02

  Thank you.

• 1:07:34Patrick O'Shaughnessy?

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