Would You Have Kids Today? Economist's Dark Warning About the Future | PBD Podcast #835

Patrick Bet-David sits down with economist Steve Keen, one of the few economists to warn of the 2008 financial crisis before it happened. A longtime critic of mainstream economics, Keen debates capitalism, Marxism, climate change, AI, America's debt crisis, Iran, housing affordability, and the future of civilization. Steve Keen explains why he believes economists misunderstand money, why AI is headed for a massive shakeout, and why humanity faces its greatest challenges in the decades ahead. 👕 👍 SHOP FUTURE LOOKS BRIGHT: https://bit.ly/4f9RjjA 👕 👎 SHOP FUTURE LOOKS "BLEAK": https://bit.ly/4fnwsrH 🎟️ SECURE YOUR 2026 VAULT TICKETS: https://bit.ly/4xU2SCW 👔 BET-DAVID CONSULTING: https://bit.ly/4lzQph2 🥃 BOARDROOM CIGAR LOUNGE: https://bit.ly/4pzLEXj 🇰 KALSHI: http://kalshi.com/pbd 💬 TEXT US: Text “PODCAST” to 310-340-1132 to get the latest updates in real time! SUBSCRIBE TO: @VALUETAINMENT @BetDavidConsulting @ValuetainmentComedy ABOUT US: Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal bestseller “Your Next Five Moves” (Simon & Schuster) and a father of two boys and two girls. He currently resides in Fort Lauderdale, Florida.

• 0:00Speaker 00

  As an economist, how should we judge economists?

• 0:03Speaker 01

  As frauds. The only people that get considered for a position at the Fed are conventional economists. They don't even understand how money is created.

• 0:11Speaker 00

  Who's Karl Marx to you and who's Milton Friedman?

• 0:13Speaker 01

  You better explain that question.

• 0:15Speaker 00

  Do you think Karl Marx was a con man?

• 0:17Speaker 01

  I regard Marx as a far superior thinker to most.

• 0:21Speaker 00

  Is it fair to say Marxism, communism miserably failed? His theories, his ideas?

• 0:26Speaker 01

  No, no, it's not.

• 0:27Speaker 00

  What countries would you say tried to follow Marx's philosophy and miserably failed?

• 0:32Speaker 01

  Marx's belief and the belief of the Soviets was that socialism would grow so much faster that it would overwhelm capitalism.

• 0:39Speaker 00

  Say, well, capitalism produced this, what did communism produce? Not much, and even, you know, when you're talking about China...

• 0:46Speaker 01

  Capitalism basically says, you know, everybody out for themselves.

• 0:50Speaker 00

  I'm surprised the level of tension you have in defending communism.

• 0:54Speaker 01

  I'm surprised by this stuff. Mate, you are not letting, you, you, this is, I'm sorry, but I'm finding this a very black and white conversation, when I prefer to preserve work in shades of gray, as I'm saying beforehand.

• 1:03Speaker 00

  Feel free to make it colorful.

• 1:04Speaker 01

  The best example of free market failing America is your health system. Would you agree with that?

• 1:08Speaker 00

  No, I don't think so. I think we have a great health system.

• 1:11Speaker 01

  Do you now?

• 1:12Speaker 00

  How do you feel about RFK?

• 1:13Speaker 01

  I think he's a fool.

• 1:15Speaker 00

  But what do you disagree with him on?

• 1:18Speaker 00

  The average kid would get five vaccines, now they're getting anywhere between 50 to 72 vaccines. What number of kids were getting autism?

• 1:26Speaker 01

  Those stats are nonsense.

• 1:28Speaker 00

  You know, you talk about healthcare, and I went into...

• 1:30Speaker 01

  Well, you asked me about John Kennedy, what do you expect me to say back?

• 1:31Speaker 00

  No, no, I'm glad you did.

• 1:32Speaker 01

  Of course, John Kennedy, sunshine or god knows what else is part of the factor.

• 1:34Speaker 00

  You think sunshine caused autism?

• 1:36Speaker 01

  Like, I'm just saying it's a silly argument and I'm not gonna, I don't see any point in having this conversation.

• 1:41Speaker 00

  So you, you don't think the future looks bright?

• 1:43Speaker 01

  No, I don't think it looks bright at all, because it's catastrophic.

• 1:45Speaker 00

  Oh my god, that's scary. So you think it looks catastrophic? If, if you were 25 today, would you have kids today?

• 1:50Speaker 01

  No.

• 1:51Speaker 00

  Wow. Man, they really got a hold of you.

• 1:54Speaker 01

  No, reality got a hold of me, and I can see what they're seeing coming, and I'm fucking terrified.

• 2:09Speaker 00

  Steve King, great to have you on the podcast today.

• 2:11Speaker 01

  Thank you for the invitation.

• 2:13Speaker 00

  Yes, so Steve, you know, as an economist, you know, where you, you were famous for making quite a few different predictions, one of them being in 2008, and your work's been documented all over the place. How do you think we, the average people who read and study economists, how should we judge economists?

• 2:34Speaker 01

  As frauds, in so many words.

• 2:38Speaker 01

  Not that they're conscious that they're frauds, but fundamentally, all the economic theories, with the exception of the school of thought that I'm part of, which is called, just for historical reasons, called post-Keynesian. They tend to be people who got sick and tired of left-wing versus right-wing views from other economists, and say, we simply want to understand how the economy works. And so there's less ideology in the post-Keynesian school. But you get Marxists to one end who think capitalism's gonna give way to socialism, you get neoclassicals and Austrians at the other end who think that capitalism is the best possible social system. And those ideological biases drive their analysis more than, more than logic and more than data do.

• 3:17Speaker 00

  Got it, and so how, how do you view, I've, I've seen the work and the things you've said about Karl Marx versus Milton Friedman. Who's Karl Marx to you and who's Milton Friedman to you?

• 3:29Speaker 01

  Pardon me, you better, you better explain that question.

• 3:32Speaker 00

  Yeah, who, who is Karl Marx to you and who is Milton Friedman?

• 3:35Speaker 01

  Well, Karl Marx, both of them are caught up with some sense of ideology. I regard Marx as a far superior intellect to Friedman. But just like other ideological branches of economics, Marx had a set of conclusions he wished to reach, and when his logic didn't reach those conclusions, he twisted his own logic. Milton Friedman does the same thing. I don't know how anybody takes him seriously. When you take a look at his detailed work, the, the stuff he puts across at the, at the sort of political level, the sort of standing on a podium giving a speech level, can be persuasive. But if you look at the arguments behind his logic, they're just mythical, completely mythical.

• 4:16Speaker 01

  There's a wonderful put-down of people like Friedman by Joseph Schumpeter, who is the, the great non-orthodox Austrian economist and, and historian of economic thought. And he talked about what he called Ricardian, the Ricardian vice. He said, that's when you set up a set of assumptions that leave the conclusion you wish to reach is the only possible conclusion, you're conning people that way. And that's what Friedman does, it's what Ricardo did as well. So there's a, a large amount of, of rhetoric in economics, which, rest, people outside the discipline will mistake that as logic. But it's actually trying to reach a rhetorical position, and it's, it's a question of how clever you are with words,

• 4:59Speaker 01

  rather than what, whether, what you say actually makes any logical sense.

• 5:03Speaker 00

  So you think, you think Milton Friedman was a con man? Do you think Karl Marx was a con man?

• 5:09Speaker 01

  No, it's, it's beyond saying the con man. People, people convince themselves of a particular, a set of conclusions about, about capitalism. It's a question of how well they reason within their own frameworks. I regard Marx as not only a far superior thinker to most people in economics, but a, a great logician. But when he pushed his logic, when he started including his philosophical thinking in how he analyzed the economy, he ended up contradicting what's called the labor theory of value. Now, the labor theory of value says that all, basically all profit comes from labor. And if you have a, a, an industry with a high amount of labor and a small amount of capital will make more profit than one with a lot of capital and a small amount of labor.

• 5:54Speaker 01

  And this is empirically wrong, and it, it argues that all output comes from workers. But it also gave Marx an argument that there'd be a tendency, what he called the falling rate of profit, and that would lead to socialism. Now, when he used his own, developed his own philosophy to apply his philosophy to economics, he ended up saying that labor's not the only source of value, machines can produce value as well. And that meant there's no tendency for the rate of profit to fall. Now, that meant he, basically he proved there wouldn't be socialism. And his response was to bury his own logic, because he wanted to reach the conclusion that socialism was inevitable. So there's an extent to which people twist their economics,

• 6:38Speaker 01

  because there's a set of conclusions they wish to reach. And if their own logic doesn't reach to those conclusions, then they disrupt their own logic. And you can find that both, you can find that in Friedman, you can find it in Paul Samuelson, you also find it in Marx.

• 6:51Speaker 00

  So i, i, is it fair to say Marx's theories, Marxism, communism miserably failed? His theories, his ideas?

• 6:59Speaker 01

  No, no, it's not. No, it's not.

• 7:00Speaker 00

  Okay, tell us, tell us why you think it succeeded.

• 7:03Speaker 01

  It didn't succeed because people, people's, people outside economics...

• 7:13Speaker 01

  I'm not saying that socialism succeeds. I'm saying that a form of thinking about capitalism can be successful or unsuccessful. And the way we think about capitalism, which comes from neoclassical theory, is completely unsuccessful. You take a look at the theory as carefully as I have done over, you know, it's one and a half centuries of existence. They've contradicted their own logic, they contradict empirical data, and they keep on going with that same belief system regardless. So the logic inside neoclassical economics is extremely poor. Now Marx worked out a brilliant form of logic, but he didn't like the conclusion. So his logic is great, his deductions for it contradict his own logic. So in terms of having somebody with an intellectual framing to understand the capitalist economy,

• 7:57Speaker 01

  I'd go with Marx any day, but not with the labor theory of value, and not with most Marxists believe.

• 8:03Speaker 00

  But let's stay on that. If somebody, what, what countries would you say tried to follow Marx's philosophy and miserably failed?

• 8:11Speaker 01

  The Soviet Union.

• 8:12Speaker 00

  So they miserably failed, and they were all about communism, right? They followed...

• 8:17Speaker 01

  Yeah, I'm sorry, like, this, this, the, um...

• 8:23Speaker 01

  How do I, how do I frame this? The, the Soviet Union basically thought you could have a centrally controlled command economy. Okay, now, that failed to grow anywhere near as fast as the capitalist economies did. So Marx's belief and the belief of the Soviets was that socialism would grow so much faster and produce so many real goods for the workers that it would overwhelm capitalism by being more productive and giving a better salary to the workers. In fact, it failed on that front, and that's why, rather than, you know, it wasn't the East, it wasn't the West that tore down the Berlin Wall to get into the Soviet Union, it was the opposite direction, so the system failed. But there's a brilliant Hungarian economist, I'm sure you haven't heard of, called Janos Kornai.

• 9:08Speaker 01

  Ever heard the name?

• 9:09Speaker 00

  I haven't.

• 9:10Speaker 01

  Okay. Janos Kornai was a socialist economist in Hungary. And he's asked this question. Why did the Soviet Union fail? And why did capitalism succeed? And what he looked at, he said, well, in the Soviet system, of course, when the Soviet, when the Soviet, when the Soviet Union began, it was in a feudal society. Russia in 1917 still had serfs. So we're talking about a very primitive, mainly agricultural society, very, very backward. And therefore, because you had the, the Soviets had the ambition of industrializing Russia. Every last sector of the economy needed development goods. And they were trying to centrally plan each one. And what it meant was every sector got less than it needed. So they were all resource constrained.

• 9:55Speaker 01

  And when you're resource constrained, the best way to meet the physical targets you're given in the five-year plan is to produce more of what you produced last year. You don't innovate. Whereas capitalism in Kornai's analysis is demand constrained. You've got lots of people producing cars. Inadequate aggregate demand, because you try to pay workers as low a wage as possible. So in that situation, you have more productive capacity than you need to supply the actual level of aggregate demand. So there's excess capacity everywhere. And the way that firms may try to get the demand to come in through their doors rather than through a rival's door is by innovation. And so the constraints of capitalism give you innovation.

• 10:38Speaker 01

  The constraints of the Soviet system gave you no innovation. So that's what's Kornai's explanation for why the Soviet system failed. Now China has studied both Marx and the Russian and the Chinese and the Russian experience and Kornai's work as well. And they realized they had to find some way of guaranteeing innovation would occur at the level of consumer products. And they've done that. They have centrally planned laying out the infrastructure. So the roads, the rail systems, you see, are all state-owned and state-managed. But in the, in things like car manufacturing, I think it's a hundred and, about a hundred and twenty Chinese car companies at the moment. That won't, that won't, maybe it won't last.

• 11:23Speaker 01

  But it means you've got a hundred and twenty different companies competing for the share of the same market. They're innovating like crazy. And therefore, this Chinese system has got the best of both worlds in the sense they've got central planning for infrastructure and long-term development, and they're doing that quite brilliantly. And at the same time, they've got enormous innovation taking place in the private sector, which is all driven by profitability and capitalist motivations and so on. So in terms of the country which succeeded from a Marxian foundation, it's definitely China.

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• 14:07Speaker 00

  Yeah, so if we, if we were to judge the systems, what is the right way for us to judge economic systems? If it's communism and capitalism, to judge it? So, you know, like, to me, if I, a personal trainer comes up to me, Stephen, he says, hey, Pat, I want you to help you lose 40 pounds. But the guy's 300 pounds, 40% body fat, out of shape, but he wants to be a trainer to tell me I can help you get in shape, right? And so the average person will look at him and say, how can you get me in shape if you're out of shape yourself? What is the right way for us to judge an economical system, communism versus capitalism, to say, well, capitalism produced this, what did communism produce? Not much. And even, you know,

• 14:50Speaker 01

  Now, look, hang on, hang on. That's not true.

• 14:52Speaker 00

  When you're talking about China, let me finish this. When you're talking about China, China even had to go and, you know, sit down with Japan to find out how they were growing exponentially. And then finally, they said, look, you got a couple of banks in China. You need a lot of banks. You need thousands of banks that are doing what they're doing. And then China finally listens and opened it up and realized they need a form of free market. Yes, they don't believe in free speech yet. They don't believe in a lot of that stuff. But they allowed guys to have ownership, and that changed. And so how do you judge success between? How should we judge success between capitalism and communism?

• 15:27Speaker 01

  Well, if you're going to use the America versus China result, China's rate of economic growth and China's lifting of people out of poverty transcends anything America's achieved over its time. So American, American industry has lost complexity, lost sophistication. China's increased its complexity, increased its sophistication. And since the Deng Xiaoping reforms, which were absolutely critical, occurred, you've had, you know, something like over half a billion people raised from, out of absolute poverty. So there's, there's, there's,

• 16:00Speaker 00

  Which they embrace capitalism, right? They embrace an element of capitalism.

• 16:04Speaker 01

  An element of capitalism. There's a tendency to be like a cardboard cutout attitude. You know, capitalism versus communism, as if there's a standard version of both. Now, of course, there's dramatic variations in capitalist nations and in communist nations. And if I had to choose a communist nation, which, as well as suffering from American sanctions, is done very well, badly in its own form, I'd choose Cuba. Okay? Having spent some time in Cuba. China is stunning at the other extreme. And you cannot believe you're in a,

• 16:43Speaker 00

  They're capitalism, though. I would put China as capitalist, because their government is communism, but they're, they have a free market element that allows you to compete. It's not by force. You can have an opinion. You, you have an ability to build a business, and they watch others succeed, and they decided to copy what was working, which is America. So did Russia, in a sense. Wouldn't you agree on those two concepts?

• 17:04Speaker 01

  No, I wouldn't.

• 17:05Speaker 00

  So you would say that Russia and China are still 100% communist nations?

• 17:09Speaker 01

  No, I'm not saying 100%. This is why, I'm thinking of trying to put things that, you know, black and white pictures when everything is shades of brown, hopefully colors.

• 17:16Speaker 00

  Can you define what communism means to you? What is the definition of communism to you?

• 17:21Speaker 01

  Look, we don't have communism anywhere on the planet. Okay? Because when you look at a Marx, Marx-defined communism is once you get to the stage where people, you know, each according to their ability, from each according to their, from each according to their ability, to each according to their needs, that sort of, you know, idealist system in the future. What you have is socialist versus capitalist. And the socialist, if you had to get a pure statement of the ideologies of both systems, capitalism basically says, you know, everybody out for themselves, get the best possible gain you can for yourself. And out of the self-interest and self-obsession, you'll get the best possible outcome.

• 18:00Speaker 00

  That's your definition of capitalism? That it's only self-interest?

• 18:04Speaker 01

  It's one potential, so it's, it's not the one that I heard.

• 18:05Speaker 00

  It's mathematically impossible if it's only self-interest for you to succeed.

• 18:10Speaker 01

  Yes, that's true. That's true.

• 18:11Speaker 00

  It's impossible.

• 18:12Speaker 01

  That's, that's an important point. Both systems are impossible in their extremes. And there's a tendency in Western thinking to go left versus right, one extreme versus another extreme.

• 18:21Speaker 00

  Not necessarily. I'm, I'm more interested in, in being specific. You've been doing this for 50 years. I've talked to a lot of different economists. I enjoyed my conversation with Richard Wolff, who's a socialist. I've spoken to Slavoj Zizek, who was more of a communist himself, and we had a very good conversation. I've sat down with Ray Dalio. We've sat down with a lot of billionaires. We've sat down with a lot of heads of states and, and presidents. If, if we were to put a percentage to it, Steve, and say taxes, because to me, Capitalism, socialism, communism can be tied to percentage of taxes. Communism is the state owns everything and they, you know, seize the means of production. So it's a hundred percent taxes. You don't have the ability to build anything.

• 19:05Speaker 00

  And maybe capitalism is going to be a lower rate of taxes. You pick and choose where you want it to be. Ten percent flat, thirty percent, or some states want to do progressive. I know you guys in your state just launched that if somebody decides to sell, you could end your capital gains just went to the roof depending on what timeframe you sell it in. And then socialism could be in the middle. How would you describe those three economical systems specifically tied to percentage that people pay in taxes? Because that's how clear would make it for the average person.

• 19:36Speaker 01

  I think it's percentage of the services that are provided are provided by the state rather than provided by the market. And in that sense, socialist economies tend to be fifty fifty or more provided by the state. Capitalist, less than fifty fifty. But there's, as time has gone on, there's more and more things that are needed for a sophisticated society that what you can call public goods. So for example, health. My health affects your health. If I come down with a communicative disease, you're going to catch it. So there's ways in which that's a public good rather than just a private good. Now, there's an enormous range of things that are like that now. Education, we all benefit from an educated workforce. We suffer from a dumb one.

• 20:20Speaker 01

  Education is a public good. Health is a public good. Transportation, to some extent, is a public good because if it's easy for workers to get from one point to another without paying a great deal of money, then it makes it cheaper to hire those workers because your wages don't have to cover high transportation costs for them to get to the factories. So there's a division between what is a public good and is better provided in a public environment and what is a private good, things like now television sets and fancy restaurants and so on, which are best provided by the private sector. And there's also a time dimension to it. When you're looking at normally ordinary consumer goods, there's plenty of potential for a manufacturer to make a profit out of things like television sets and so on.

• 21:03Speaker 01

  You can't make a profit of the same scuttle up to sewerage systems. If you leave those sorts of things for profit oriented providers in the first instance to provide, you'll have less sewerage than they need. So I think that's really, it's a division between the extent to which goods are provided by the state's system as just part of the fact that you're a citizen versus having to pay for them. And the socialist economies will have more of that. And I think that's actually, in effect, that's the trend we've been going through over time. Because a hundred and fifty years ago, you didn't worry about sewerage. You had shit running down, you know, the streets of London into the Thames River. If you move to a more advanced and sophisticated society, we can't tolerate that. And that means you have the state providing those services.

• 21:47Speaker 01

  If you leave it to the private sector, those services will break down.

• 21:51Speaker 00

  Those services would break down. I mean, a lot of people would say anything produced by the government, it's shitty your customer service. They treat you horrible. They can make you wait as long as possible. And free market, if they do do that, they get complaints and those complaints hurt their business. But the state doesn't have competition. What would the state worry about if they don't treat you well? They have a different energy when they talk to certain people. I was in the US Army, I was in the military, and I've dealt with the state for a long time. I've never seen any customer service on how they treat people be better that's ran by the state than ran on the free market side.

• 22:32Speaker 01

  When I was in China the first time, which was eighty one, eighty two, I ran a seminar between Australian journalists and Chinese journalists, which was observed by a large number of students of journalism in China. This is the beginning of China having a, not a free press, but a press system. And the one thing the students were most fascinated by, that I unfortunately did not give them information on for various reasons, was the ombudsman system that Australia had, which had copied from Sweden. And the ombudsman system put controls and monitoring sets on public servants. Now, it seems that China has implemented that. If you become a bureaucrat in China, you have a set of guidelines that you're required to reach. And if you don't reach them, you either get sacked or you don't get promoted.

• 23:17Speaker 01

  And you get ossified. And that seems to be a large part of why the public services in China seem extremely well provided and certainly better than what you get in America.

• 23:30Speaker 00

  You said certainly better than what you get in America.

• 23:32Speaker 01

  Transportation, public transportation.

• 23:35Speaker 00

  You feel service is going to be better rendered by the government than free market? What does the government lose? They don't have an alternative competition.

• 23:46Speaker 01

  The best example of free market failing America is your health system. Would you agree with that?

• 23:51Speaker 00

  No, I don't think so. I think we have a great health system. I think.

• 23:55Speaker 01

  Do you now? You cost three times as much as the rest of the world. You pay about three times as much per head to health as most Western nations do.

• 24:06Speaker 00

  Our, you know, capita per GDP is also higher. If Australia was a state with us, you would be number forty. You know, if UK was a state, it would be behind Mississippi at fifty one. So it's also capitalism's brought more people out of poverty in US than any other country in the world. I'm surprised you're fighting this. But let me.

• 24:28Speaker 01

  Look, I'm surprised you're fighting it as well because you're making claims.

• 24:31Speaker 00

  It's the reason why I lived here. I escaped Iran to come live in America because I have an incredible life. And by the way, I'm surprised the level of tension you have in defending communism, a failed economical system. I'm surprised.

• 24:46Speaker 01

  I'm surprised by this. Mate, you are not letting, this is, I'm sorry, but I'm finding this a very black and white conversation when I prefer to preserve work in shades of gray, as I was saying beforehand.

• 24:56Speaker 00

  I mean, go ahead if you want to make it colorful.

• 24:58Speaker 01

  The color is, I mean, I mentioned about the medical. Now, you say the medical system in the States is fine. You have a lower life expectancy than virtually every other major Western nation. I don't know the actual numbers, but I think the life expectancy in America is of the order of about seventy four or seventy eight, I think it is, and the most of the rest of the world, it's eighty four. And you pay about three times as much per capita for the health system. And the reason the health works very badly as a private good is because when you find you're dying of a fatal disease or that's, you don't have any bargaining power. If you find you've got a disease you need the best doctor for, you'll pay the best doctor's price no matter what.

• 25:34Speaker 00

  A lot of people would say on that side, how do you like Robert Kennedy? How do you feel about RFK?

• 25:39Speaker 01

  I think he's a fool.

• 25:40Speaker 00

  You think he's a fraud?

• 25:43Speaker 01

  I think he's weird. I mean, his attitude to vaccines, the idea that you should catch diseases and the idea you're going to have herd immunity from exposure to diseases.

• 25:53Speaker 00

  Do you agree with them? Do you agree with them on the types of food that we eat in America is a lot worse than other places because of?

• 26:04Speaker 01

  Oh, yeah, that is definitely right on.

• 26:06Speaker 00

  Okay, so you agree with them on that. So what do you disagree with them on?

• 26:11Speaker 01

  Belief that vaccines cause diseases.

• 26:13Speaker 00

  So you don't think, you don't think that the studies that show that in the last fifty years, and this is the part that you and I may actually agree on. You don't think, Steve, that these big pharmaceutical companies have benefited from increasing from, the average kid would get five vaccines, three vaccines back fifty years ago, and now they're getting anywhere between fifty to seventy two vaccines? You don't think financially that's benefited Big Pharma in America?

• 26:42Speaker 01

  Well, certainly it has, but now you're being a critic of capitalism.

• 26:44Speaker 00

  I am, I am, I am with Pharma. I am with Pharma because they forced down, you see, to me, it's, I have the ability to reason and see the flaws in certain areas and weaknesses. I'm very comfortable doing that. That's not something I'm uncomfortable with. I do think with the help of the state, they forced these vaccines on kids. And if we go look at stats, because I know you like stats as an economist, it's not hard to see what number of kids were getting autism fifty years ago versus today. Have you looked at those numbers?

• 27:17Speaker 01

  I'm not a medical person and I've seen arguments from people I know who are medical researchers say those stats are nonsense. I'm certainly not going to get involved in saying.

• 27:26Speaker 00

  So you're saying the stats that's.

• 27:28Speaker 01

  The anti-vax, the anti-vaccine, like, I'll give you one reason why I'm pro-vaccines. My father had polio.

• 27:36Speaker 01

  I didn't, okay? And the, but certainly for big pharma making money out of unnecessary drugs, for sure. And that's one reason you need a state system. And it may be that, that health in general is better at the state level where it's provided and state, the health is guaranteed in that sense, rather than being something you can only afford an operation if you have the money for it. Or you have the insurance cover from your private company, which is very much an American thing, it's not the rest of the world.

• 28:06Speaker 00

  Got it, but, but it, when you're looking at numbers, I mean, these are numbers that's coming from the states and organization you trust, right?

• 28:15Speaker 01

  Hang on, please, please, please, please. So you're doing a caricature of me here. I'm a critic of the state. I've worked in state, I, I used to regard the Department of Trade, which I worked in at one stage as a retirement center.

• 28:27Speaker 00

  Are you familiar with the CDC?

• 28:30Speaker 01

  The Center for Disease Control, yes.

• 28:32Speaker 00

  Okay, so this is coming from CDC. You brought up vaccine, nowhere in my notes was I planning on going into vaccines. I was gonna, you know, you talked about health care and I went into it.

• 28:42Speaker 01

  What do you expect me to say back?

• 28:43Speaker 00

  No, no, I'm glad you did. I'm glad you, but since you did, let's look at some numbers, because you're a numbers guy, you're an economist. So in 1970s, in America, according to CDC, one in 10,000 children had autism. Eight, 1995 was one in 500, 2000 was one in 150, 2010 is one in 68, 2020 is one in 36. The latest is one in 30, about 4.9% of boys today are identified as autistic, 1.4% of girls. How do you think that happens? Should we not consider vaccine as possibly one of the reasons for it?

• 29:19Speaker 01

  We can probably think sunshine or god knows what else is part of the factor.

• 29:23Speaker 00

  You think sunshine caused autism?

• 29:24Speaker 01

  Like, I'm just saying it's a silly argument and I'm not gonna, I don't see any point in having this conversation.

• 29:29Speaker 00

  But, but you, you brought it up and...

• 29:31Speaker 01

  You brought up John Kennedy, I mentioned vaccines as well. You said, do I like John Kennedy? I instantly said, I had no intention of discussing vaccines, let's talk about something that's actually my area of expertise.

• 29:42Speaker 00

  No, no, but you brought this up and you had strong opinions and I'm just sharing with you for...

• 29:46Speaker 01

  You said, John, what do you expect me to say if you raise Robert Kennedy?

• 29:49Speaker 00

  Yeah, I think Robert Kennedy, he's a guy that brought up the concerns...

• 29:52Speaker 01

  Why did you raise Robert Kennedy? Why did you raise him in the first place?

• 29:55Speaker 00

  Because I'll tell you exactly why I raised it, because you said, the healthcare is the issue in America, and I said, he brought up the food that we eat in America is a lot more processed than other states. I was going in the food direction, you went to vaccine. I never brought up vaccine, you brought up vaccine.

• 30:09Speaker 01

  Okay, well, let's, let's go back to food.

• 30:11Speaker 00

  But no, let's stay on that, let's stay on vaccine if you brought it up and let's just move on past this, because you brought it up. How do you, how do you feel when you see a data, if an average person like me or you, who is not in this space, you're a thinker, right? And if you see we go from one in 10,000 autistic rate to now one in 31, according to CDC, not pharma, what do you think could be those reasons?

• 30:33Speaker 01

  Different definitions of autism.

• 30:36Speaker 01

  I have, like, you know, I, I, if I think back to my school class 50 years ago, there's about half a dozen kids I could classify as autistic today who wouldn't have been called that 50 years ago. But in terms of, I have, I have vaguely seen some research contradicting the argument there's any relationship between vaccines and autism, and I have no expertise and I have no interest in the topic either.

• 30:58Speaker 00

  I figured, that makes sense why you wouldn't have any interest. What do you think about Alan Greenspan? He just passed away at the age of 100. What do you think about Alan Greenspan's legacy?

• 31:07Speaker 01

  Very negative. The one thing we should remember Greenspan for is he rescues the financial sector when it causes crashes, that's the Greenspan put. When the stock market fell 87% in, in 1980, so it fell 20% in 1987 in one day, he basically guaranteed that all the, all the financial firms would be rescued. And that basically led to encouraging financial instability and a financial irresponsibility. I think he did a very negative contribution to Americans, the American economy.

• 31:37Speaker 00

  Which, which American economist do you think, or a Fed chair, do you respect that did a decent job in America? Who would you say that person was decent?

• 31:49Speaker 01

  All, all the Fed chairs have come from the same school of thought, which is called neoclassical economics, that includes Ben Bernanke, for example. They have, in my opinion, a totally, they have a model of the economy, which is, to use a great American satirist, Menchen, their theories are neat, plausible, and wrong. And those, the, the only people that get considered for a position at the Fed are conventional economists, they don't even understand how money is created. So you've got, there's not, not a single one I would take particularly seriously. If you wanted to ask me a mainstream economist that I have some time for, I'd mention Robert Shiller and Paul Roma, that's really about it.

• 32:27Speaker 00

  Got it. How hard of a job you think the, the most recent chair has washed that he got the job, with being pressured to lower rates versus keeping him that way? And if you were given that job, let's just say if you were given that job, this is your world, you follow it, what do you think would be the right move for him to make in this state of affairs that we're in America?

• 32:49Speaker 02

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• 33:18Speaker 03

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• 33:48Speaker 04

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• 34:18Speaker 05

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web. Like restoring a vintage motorcycle from a 50-page restoration block. Or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 34:43Speaker 07

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• 34:59Speaker 01

  Well, I think the main problem in America is too much private debt. It's not the government debt that matters. And that's what all the mainstream economists obsess about. What causes financial crises is too much private debt. Booms and busts in the level of rate of growth of private debt. So I'd be using the government's capacity to create money to cancel household debt, which is what we used to call a jubilee. That's what I'd be doing. And in terms of the interest rate, again, it's a very fallacious theory of economics. It says the rate of interest controls the rate of investment. That's the basis of, or the rate of consumption, in fact, is what modern, so-called modern economic theories argue the rate of interest controls. They're completely fallacious. They don't work.

• 35:40Speaker 01

  And at the moment, if I was in charge of America's interest rates policies, I'd be reducing them because we're about to see a huge shock for the American economy coming out of this closure of the Strait of Hormuz. The impact of that on productive, the capacity of the economy to produce goods and services, which will mean people can't service their debts anymore. And you're going to start seeing bankruptcies coming out of the inability to pay the debt levels people currently have because of the destruction of the productive capability of the economy from the war, you know, war against Iran.

• 36:13Speaker 00

  So your position would be to lower rates? So you would agree with Trump because Trump wants to see also?

• 36:19Speaker 01

  In this particular point, yes, I do.

• 36:20Speaker 00

  Okay, so can you unpack that? Why do you, because some people

• 36:26Speaker 00

  push back on the president on lowering rates? And they're concerned if you lower rates, you know, inflation may continue versus keeping it kind of where it is right now for things to level off. What is your position and the reasoning for lowering rates?

• 36:41Speaker 01

  Well, inflation is not controlled by interest rates in any effective sense. If you want to reduce the rate of inflation by using interest rates, you have to do something like Volcker did and cause a recession, put rates up that much. That's what actually, that's the only control mechanism is when you cripple the economy and therefore push inflation out that way. That's what happened under Volcker. To, I believe you can fine tune it using the interest rate, which is the belief that conventional economists have. I think that's completely wrong. Now, what conventional economists don't look at is the level of private debt. They have no idea, even though they collect the data, they really have no idea of how high the level of private debt is. As you put up the interest rate, you make it harder to service that debt. And that's what can cause a downturn. What worries me about the current situation for the economy

• 37:26Speaker 01

  is that people are comparing it to the 70s when there was the, the oil price rose and that led to rising wages and that gave you a wage-price spiral. Back in the 70s, you had strong unions, relatively speaking, certainly stronger than they are today. So when the price of petrol went up at the petrol pump, unions could go and lobby the firms to say, we want a higher level of wages. And you got a what's called a wage-price spiral. This time around, unions are so weak and workers, generally speaking, don't dare go and bargain with their wages. They're happy to hang on to their jobs. What you will get from the increase in the oil price, which is coming courtesy of the Strait of Hormuz closure, is that workers won't be able to afford to pay their petrol costs.

• 38:09Speaker 01

  They will, they will have to reduce what they do elsewhere. So there'll be less consumption coming out of the economy. That will cause a bit of a slump. And rather than getting a wage-price spiral, you'll get increase in prices courtesy of the Strait of Hormuz. And that means workers will not get the wage rises they want. So what I expect instead is to see a deflationary crisis coming out of this. Initially inflation from the increase in oil prices and increase in cost of production of so many goods courtesy of the other things which are blocked by the Strait of Hormuz. And then if workers been unable to pass those costs on to them in terms of their wages, a collapse in demand. And then you will have a deflationary crisis. And in that situation, the last one you would think you want is a high rate of interest.

• 38:55Speaker 00

  Got it. And I, it's funny because you and the president agree on that. That, that is a part where,

• 39:02Speaker 00

  you know, they, they think that's the right move to me. I'm not sure if I'm there with you and the president. I know you guys agree on that part of it. Uh, whether lowering the rates the right thing to do or not, the, the economy, a lot of people in America would love to see that happen. Uh, by the way, going back to the personal debt side, how much of that, and I'm curious from your standpoint, how much of that personal debt challenge happened the moment we got off the gold standard? Is that where you are with it? Or do you have a different position?

• 39:27Speaker 01

  No, no, no. What actually caused the growth in debt was deregulation of the financial sector. You used to have, if you go back and look what happened after the Great Depression, uh, what Roosevelt realized and Irving Fisher realized was the financial sector caused both the bubble of the 1920s and the crash of the 1930s. And so this, we have to restrain the tendency of the financial sector to get involved in irresponsible behavior and Ponzi schemes. So things like the Glass-Steagall Act, reduction in the level of, uh, margin leverage. So margin debt used to give you 10 to one leverage. Now it only gives you two to one leverage. All those things came out because the attitude of the people who experienced the Great Depression was the financial sector,

• 40:07Speaker 01

  uh, will lead to speculative bubbles and we have to restrain that tendency of irresponsible behavior by the financial sector. When we got conventional economists dominating the profession and starting in the 1970s, they basically thought everything is better as a free market, let the banks do what they want to do. And their belief was that if you deregulated the financial sector, there'd be more money for investment. In fact, there was more money for speculation. You had the, uh, you had some, you know, obviously, uh, banks provided, uh, money, investment funds for telecommunications and internet and all that sort of thing. But they also did the subprime bubble. And the whole idea of the subprime bubble was borrow money, buy a house and sell it to somebody else for more money,

• 40:47Speaker 01

  which only worked if somebody else borrowed more money than you did. So you got this exponential increase in the ratio of, of household debt to GDP, which reached a peak and then crashed in 2006. That led to the crisis. So, uh, the, the banking sector has a tendency to be irresponsible and it just runs with the nature of banking. So I, I blame that on deregulating the financial sector. I'd bring back regulations to make sure that the financial sector predominantly provide working capital for corporations, rather than providing funds for gambling and speculation in casinos, which is what they do at the moment.

• 41:22Speaker 00

  How, how do you do that? How do you do that? Because what, what opened up, we talked about it earlier with China, what opened up the market in China is when they started having more banks lending more money to small business owners. You and I both know when, uh, the big banks were, uh, bailed out in 2008 and they got all those billions of dollars, the money didn't go to the business owner. They kind of kept it to themselves and didn't. So what, what can we do? Like, how do you force them? Like, what, what do you create for that money to go to small business owners?

• 41:52Speaker 01

  Well, one thing I'd do was rule out making it possible to make a profit out of funding a Ponzi scheme. So my favorite one there of course is the housing scheme, housing, housing bubbles. And I've done empirical work to show that what causes rising house prices is accelerating household debt. And that's what's, that's, that's caused the booms and busts you've seen in America and everywhere else. And what that means, that comes about because banks will claim to be giving a borrower an amount of money based on their income. But they'll fudge the numbers, you know, the old era, what do they, what do they have expression for it? No ninja loans, no income, no job, no assets?

• 42:24Speaker 00

  That's right.

• 42:25Speaker 01

  Okay. Okay. They're willing to do that. I would make it, uh, I would put a limit on the amount of money that can be provided to buy a property, based not on the income of the buyer, but the real or prospective income of the asset itself. So if you buy, if you, you know, you build a house for rent, then I would say the, the maximum amount of you could borrow to buy a house for rental purposes would be 10 times the annual rental income of the property. The same sort of thing applies for owner occupied. That would mean that it was no longer profitable to lend into bubbles. You wouldn't get runaway amounts of debt. The level, amount of money being lent would be related to the, to the rental income of the property, which doesn't have the bubbles we see elsewhere.

• 43:09Speaker 01

  Uh, I'd also make it possible for banks to take a equity position when they made a loan. At the moment, there's a very good reason for banks not to lend to entrepreneurs and that is that most entrepreneurs fail. And if you, if a bank lends to say six entrepreneurs, then five fail. So the bank loses its money on five of them and only makes an interest, uh, earning out of the, the sixth. I would have banks having passive, emphasis on passive. I've got enough entrepreneurs who tell me the last thing I want as a banker, making decisions on their board, but a passive position, uh, where they take an equity stake. And if they have six, five companies that fail and one that succeeds, the one that succeeds could be Amazon. So you make up for the losses elsewhere.

• 43:49Speaker 00

  It's called that private equity, right? Kind of like a private equity model?

• 43:52Speaker 01

  Similar, but it's, it's money creation rather than, you know, private equity tends to pool existing money. This would be, banks create money when they lend. This is one thing mainstream economists do not understand. They simply don't want to know that that's the case. But when a bank makes a loan, it also creates money. So I want to, uh, limit that for money being created for productive purposes, not for speculative ones. And I want to encourage getting money to entrepreneurs. So that idea of being, uh, firms, banks make loans to entrepreneurs and get an equity stake rather than a loan position. I call those EELs for entrepreneur, entrepreneurial equity loans. So you can make changes like that to change the behavior of the banking sector

• 44:32Speaker 01

  and get back from the days when the banking sector dominates the physical economy, to the days when the banking sector was a servant of the physical economy. That's what we need.

• 44:40Speaker 00

  Do you think, do you think there almost needs to be a massive shakeup for them to make that kind of an adjustment? Because, you know, if, if somebody wanted to go that route and somebody got elected and they wanted to propose your idea, real estate valuation in America will probably take a 25% hit overnight, if that would have happened, right?

• 45:00Speaker 01

  And I've come, yeah.

• 45:01Speaker 00

  And you'd like to see that happen.

• 45:03Speaker 01

  Yeah. I, I have no, I, I have no doubt my ideas will never get tried. Okay. So I'm aware that I'm putting through hypotheticals that it won't happen. But in the, in the case of trying to reduce the level of household debt, uh, which is like running at about a hundred percent of GDP, it should be about 30% of GDP at most.

• 45:20Speaker 00

  It's scary, by the way. It, it, it is, it is truly a, uh, concern that I don't care who the president is on the left or the right. They have to know that's a real issue with affordability. Because if the average guy, say 28-year-old man cannot afford to get married, buy a house and have kids, we have a very big problem in America.

• 45:37Speaker 01

  Yeah. And that's the situation you're in. Yeah. And it's a global, it's a global phenomenon. House, house prices used to be roughly three times, three times household income. When you had a single income earner back in the 50s, the male, male income earner. Okay. And the male breadwinner could support a wife and three kids and, and buy a house at the same time. That's the so-called American dream. Women's liberation, I think, actually contributed negatively here because women got into the workforce and it's now three times two incomes. Uh, the, the finance sector benefited more from women's liberation than women did.

• 46:07Speaker 00

  So you think the idea, so, because in 1970, we had, I think 1970, we had a record break in most kids born in America are, it was a 3.59, you know how we were at 1.58 right now? I don't know what it was in 1950, 1970. Can you look up when was the highest birth rate in America? The year it was one of the highest birth rates in America, Steve,

• 46:30Speaker 00

  only 35% of women were in the workforce. Today it's 70% in America. So you think that wasn't a good thing for the economy?

• 46:38Speaker 01

  No, it was, the, the benefit of that went to the finance sector rather than individuals. If you basically thought if you had two people working, you got twice as much income, you have a more comfortable life. That was the, the fantasy of, of, you know, getting, expanding women's role in the workforce and the, and the women and the, and the families will benefit. Instead, it meant that when you went to buy, get a house loan, housing loan, they, they took, you know, two incomes in, doubled the amount of money they let you borrow. You end up servicing that debt. And in fact, the, the increase in incomes, uh, ended up causing an increase in house prices, making houses unaffordable. So I've gone from the days, it's not as bad in America as most of the rest of the world, I might add.

• 47:18Speaker 01

  But the ratio of house prices to income used to be about three and a half. Now it's about 10. And that just means enormous strain.

• 47:26Speaker 00

  That's a scary sight.

• 47:27Speaker 01

  Yeah. So we need to get out of that. But the thing is, to do it, you've got to reduce the level of household debt and reduce house prices. Now, as you said, if you do that, you'll make many people who think they're currently asset rich, make them asset poor. So I came up with a proposal that I call a modern debt jubilee. And the idea with a modern debt jubilee is the government can create money. And it creates that money and gives every American adult a hundred thousand dollars and says, if you have debt, you must pay the debt down. So if you have a two, two, two income family, they got two hundred thousand dollars. They've got a mortgage of two hundred and fifty. They've got to pay that two hundred thousand dollars off. They end up with a mortgage of fifty thousand. So they benefit in that sense. So you, the cash injection in the first place can cover the fact that the price of the house might fall.

• 48:12Speaker 01

  And of course, most people think they're asset rich when they've got an expensive house. But to get benefit from that house, they've got to sell it. This would be a way you hang on to your house. You have a lower level of debt and we get you out of the debt squeeze you're in right now. And then we limit how much banks will lend in the future. So we don't have the same ridiculous level of household debt to buy a house in the first instance.

• 48:32Speaker 00

  So, so in other words, let me restate what I think you're saying and correct me if I'm wrong. A form of a quantitative easing for individuals, not corporations.

• 48:41Speaker 01

  That's a reasonable way to put it. That's a reasonable way to put it.

• 48:43Speaker 00

  Okay, I got it. So, so that, that, eh, that makes sense. And, and by the way, where are you at, uh, uh, Steve? On the topic of what's happening right now with the wealth disparity? You know, we've always heard the saying, rich get richer, poor get poor, right? I, I pulled up something yesterday when I was looking at it, when, you know, the last fifty years, who were the top five richest men in, in America, last fifty years? And one of the things I noticed is fifty years ago, the difference between first place and second place was, I don't know, ten percent. Okay?

• 49:16Speaker 01

  Yeah.

• 49:17Speaker 00

  And it went to twenty percent and then twenty-five percent. Today, the difference between first place and second place is three hundred percent. And, and you know, Elon is at the top with one point three, one point four, which I have no problem with. I'm the capitalist. You and I may differ in this, in this, uh, uh, in this, um, topic. But what role you think AI is going to play on accelerating, creating extremely wealthy people and a lot of people being left behind? And then if that does end up happening, your position, maybe you're pro AI, maybe you're optimistic that AI is going to do good for the economy. But what role you think AI is going to play the next five to 10 years? We're just seeing it right now. What do you think is going to happen?

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• 51:07Speaker 03

  College football is back. So Hilton called to me, the superstition concierge, to make your fan rituals a reality. Need a room to match your lucky number? We got you. Want to make sure our team doesn't wash your lucky jersey? Oh, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition, even a marching band wake up call at five fifty-five in fifty-five seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton, for the stay.

• 51:37Speaker 04

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid, and risked three hundred fifty thousand for Ginyan's healthcare to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes, and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, the House Majority PAC dot com. Not authorized by any candidate or candidate's committee.

• 52:08Speaker 05

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• 52:52Speaker 01

  Well, first of all, I think there's going to be a bust. Uh, this is a classic boom and bust cycle in capitalism, just like with railways back in the nineteenth century. So railways were a private technology when they first came in, and everybody thought they're going to make an absolute fortune out of railways. Railways, particularly in the UK, just crisscrossed everywhere. They all went bust, uh, and, and you only had a handful of operators surviving, and then the state bought them up.

• 53:15Speaker 00

  How long did it take, by the way? How, how long the, from start to bust? What was the time?

• 53:19Speaker 01

  I'm only getting, I've, I don't, I can't recall. I haven't done the, read the literature.

• 53:23Speaker 00

  Is it over fifty years? Is it seventeen? Fifteen years?

• 53:26Speaker 01

  Fifteen, ten, ten to fifteen years. AI is much faster than that. So we're seeing a huge buildup right now. I, from what I've seen in terms of the amount of revenue these companies are getting versus the cost they've got, they're costs of five or 10 times the revenue. In other words, they're losing large amounts of money. And so you're going to come up with only a few survivors coming out of this. And I think the cost of AI is going to increase quite dramatically as well. At the moment, people are using AI to make funny cartoons of their father-in-law or mother-in-law. Uh, the days when that's a feasible, I think are going to end.

• 53:56Speaker 00

  More mother-in-law's fun, but.

• 53:57Speaker 01

  Well, mother-in-law, see, I'll agree with that. Uh, but, uh, but this, uh, you know, we're going to get a boom and a bust. So we're getting a boom at the moment. The bust will come, I think, I mean, in the next one or two years. Uh, and then you're going to get a large collapse. All, all the, all the money that was put into it will be lost. Money will still be distributed in the system, of course, but it won't be in the hands of those who paid out for the data centers and so on. So I see that happening. With AI in general, I know that it's a long way from this being technologically feasible. But the thing which Musk is talking about, and I agree with him on this front, is that if we got to the stage where robots could replace humans, then there would be no capacity for workers, for anybody without capital, to get an income.

• 54:39Speaker 01

  So the only way to survive that is to have the income generated by the economy as a whole. And that means you get, uh, the, basically a universal, uh, Musk calls it universal high income. But you have to create the money that enables people to buy, because the vast majority of people won't have ownership of, of, of capital, and they won't have, uh, the capacity to get unschooled jobs anymore anyway. The robots will have them. So if you're going to avoid the Hunger Games outcome, you have to give everybody enough money to be able to buy the goods being produced by those firms and live a comfortable life.

• 55:12Speaker 00

  Yeah.

• 55:13Speaker 01

  But I can't see that happening. I think, I think we're going to see, you know, climatic issues longer before we get to that point.

• 55:20Speaker 00

  Let me, let me, uh, by the way, when is your birthday? What month is your birthday? I'm curious.

• 55:23Speaker 01

  March.

• 55:24Speaker 00

  You're March? Okay. Early March, mid-March?

• 55:27Speaker 01

  Late.

• 55:28Speaker 00

  Okay. Uh, so you're in Aries? Are you like after the twenty-second?

• 55:32Speaker 01

  Yes, indeed.

• 55:34Speaker 00

  Okay. So my dad's also the same as you, and, and it's, it's funny just talking to you. I'm, I'm, I'm, uh, wondering, wiring, how much of your own philosophies on economy and finance, how has it worked for you when it comes down to making investments with your own money?

• 55:55Speaker 01

  I don't invest.

• 55:56Speaker 00

  At all?

• 55:57Speaker 01

  I've been in, I'm, no, I mean, I'm building a company. I've got a company called Ravel, Revelation. So I'm making a software, uh, uh, uh, product. I've done a couple of attempts at getting businesses started. If I'd done them in America, they would have been successful because the scale of your American economy is much larger than the Australian economy. So one, one attempt I made was.

• 56:15Speaker 00

  So you're like American capitalism. That was a very big compliment right there.

• 56:17Speaker 01

  I like the scale of the American economy.

• 56:19Speaker 00

  Listen, you, you flirted a little bit, you flirted a little bit with the, you know.

• 56:23Speaker 01

  Equally, Europe, we have been quite successful in Europe or England as well. Australia's too small.

• 56:28Speaker 00

  I think you made America look a little sexier. The way you said it, you could help yourself.

• 56:31Speaker 01

  That's true enough. I mean, there is, there is a, the one thing I will say in favor of American culture, failure is not a problem. Uh, failures, uh, uh, one of my favorite lines is, is end up as saying, success is the first step on the ladder of failure and vice versa. So being able to fail and then could be, kiss off and keep on going, that's part of what the attitude of America is, and that's a, that's a positive contribution to enabling innovation to occur. So you need that to some degree. Uh, but yeah, in terms of, I, what people call investing, I call speculation. Okay? You're buying shares and buying houses and expecting to increase in price.

• 57:03Speaker 00

  Sure, yeah.

• 57:04Speaker 01

  When I know, when I know the logic behind that, it's all driven by financial bubbles. So I've stayed out of that. But I am trying to form a company right now called Revelation, and that'll be marketing a software package both for data analysis and for economic, economic planning.

• 57:16Speaker 00

  Steve, did, did, did a, did you fall in love with an American girl that broke your heart many years ago and you just had spite for America? Did a girl break your heart in the past? Is that what it is? It seems like you're, you know, Mary was wrong. It's not your fault, Steve. I just want to let you know, screw Mary. You're okay. We're going to be fine. I'm giving you a hard time. I'm saying if your ex's name was Mary.

• 57:39Speaker 01

  In fact, I married, I made, I made two, I said, two things I'd never do is marry a nurse or an American, and I did both in a sequence.

• 57:44Speaker 00

  Really?

• 57:45Speaker 01

  Yes.

• 57:46Speaker 00

  So you married an American nurse?

• 57:48Speaker 01

  No, I married an American singer.

• 57:50Speaker 00

  Oh, singer? I thought you said nurse.

• 57:52Speaker 01

  The first wife was a wife, the first wife was an Australian nurse, the second was an American singer.

• 57:57Speaker 00

  So the second one succeeded? You're still married?

• 58:00Speaker 01

  No, lasted about two years, and I wish I'd never got involved.

• 58:03Speaker 00

  There you go. I mean, we just figured it out. We just figured out your economical philosophies in the last twenty seconds with what happened on the second one. But let, let me ask you, do you, do you ever sit there, Steve, and wonder and say, maybe I should have gone into the market? Maybe I should have invested? Maybe I should have bought some Bitcoin? Maybe I was wrong on some of my?

• 58:24Speaker 01

  Oh, Bitcoin, definitely. I should have bought Bitcoin because I was first introduced when it cost a pound of Bitcoin.

• 58:29Speaker 00

  Stop it.

• 58:31Speaker 00

  Did you say a pound of Bitcoin?

• 58:33Speaker 01

  Yep, roughly speaking.

• 58:34Speaker 00

  And you said no to it?

• 58:36Speaker 01

  I just, when I had the energy used, explained to me, I thought this isn't going to work. Now, I should have done what Newton did, not the first time, but say, this is a crazy bubble. If other people idiotic enough to do it, I'm gonna buy and put a thousand bucks I can't afford to lose. I would have made a billion. Okay? So it's my mistake. I didn't do it. So yes, I do have regrets like that.

• 58:55Speaker 00

  Do you, how about, how about free market? How about the stock market? Like, do you look back and say, you know, because, because an element of investing, and I'm so glad you're in the, in free market capitalism right now to build a company. God willing, you'll build it and you'll sell it. And I, I actually hope you do, because I love when these types of, I just had Mehdi Hassan on. I don't know if you're familiar with Mehdi Hassan, he was on.

• 59:17Speaker 01

  I know Mehdi, yeah.

• 59:18Speaker 00

  I think he was on two weeks ago or three weeks. So we had a very good conversation, great back and forth debate. And, you know, he's a professional debater. I mean, he does this for a living. It was a phenomenal conversation. But I said to him, I said, you know,

• 59:31Speaker 00

  how's it feel going from working at MSNBC and they're paying you a salary to now you're a capitalist? You have to hire people, you have to build a company. And he had a smirk, we laughed about it, you know, kind of went through it. I hope he exists for a hundred million dollars. I hope he, because you, you know, I grew up in a family where my mother was a communist. We grew up, our Bible was the Karl Marx Communist Manifesto. I've read the book, I, you know, my mother's side, they come from Baku, Azerbaijan. So her family was all about, my dad was pro-Shah, so he was an imperialist. And so they married each other. They married and divorced each other twice. And so, no, literally, that's what happened. They married and divorced each other. They married, my sister's born, they divorced. Two years later, they remarried, I'm born divorced. And they never got married again to anybody.

• 1:00:17Speaker 00

  But a, a big part of my, a big part of my, uh, financial philosophy comes from me hating rich people and saying, these guys are greedy. It's all self-interest. That's all they care about. And then I went into business and then I started off with Morgan Stanley, Dean Witter. And then next thing you know, I made some money, then I build a business and I realize, you're not gonna win if it's only you making money. And so I give everybody equity. And then I realized when everybody owned a piece of the company, they ran in a different way. They picked up the trash. You know, they said hello to people in a different way. There was a certain incentive to it. So I'm glad you're getting into the business, but do you think about and say, maybe I should have gotten involved in equities thirty, forty years ago?

• 1:00:57Speaker 01

  Not equities, but the software package I'm designing now called Ravel. I came up with the idea for that thirty years ago. In fact, it's Ravel, the main thing Ravel does that in terms of data analysis, that's better than anything else on the market, is that it handles multi-dimensional data. Data that's more than rows and columns in a spreadsheet. And in fact, the system that most people use is called a pivot table. And it turns out that pivot tables first invented seven years after I came up with the idea that I'm now putting into Ravel, which is a graphical, multi-dimensional object for handling, you know, complex data and being able to analyze it and see it easily. So yes, I, I, I could have made the decision to go and push that forward. I would have come up with a software package that predates Excel, that would have trashed what Excel tried to do with pivot tables.

• 1:01:40Speaker 01

  So I wish I had done that, but I didn't. So I'm now doing it a bit later in age.

• 1:01:43Speaker 00

  Would you mind spelling it so guys know how to find it? Ravel, Rivel?

• 1:01:47Speaker 01

  Ravel, now Ravel, R A V E L. And the company name is Ravelation, not Revelation, but Ravelation.

• 1:01:53Speaker 00

  And is there a website to it? Is there a website?

• 1:01:55Speaker 01

  Yes, it's, it's, we're just about to launch it. In fact, there is a Patreon page, which we're doing at the moment, very basic. But that's where you can get a copy of Revelation from at the moment for a sort of Patreon support level.

• 1:02:05Speaker 00

  Can you send that link to us so we can put it below for the audience to see it?

• 1:02:08Speaker 01

  We'll do, we'll do. It'll come out about two. We have, we have to do an initial seed launch. Uh, we've done a pre-seed round, uh, using, you know, the idea of a safe agreement. So she'll do an agreement for future equity. We've already done that.

• 1:02:18Speaker 00

  I love it. I love it. I love it.

• 1:02:20Speaker 01

  So we're doing, doing, happily doing a seed round in about one or two months' time.

• 1:02:24Speaker 00

  Beautiful. If you send that to us, we'll put it below. Let me continue. So, uh, but a question on this as we're going into it. And we're talking about, you know, investments, capitalism, all of that. Have you followed Jim Simons? Do you know about Jim Simons, Renaissance Technologies?

• 1:02:40Speaker 01

  Yes, and I also know Louis Kelso, the toy, the similar sort of ideas, the capitalist manifesto. You were talking a bit about worker-managed firms fundamentally a moment ago. And it's a similar sort of idea. You want people to have a commitment to the firm they're in. And just having a wage doesn't necessarily do that. Having an equity position can, uh, can enhance that. Apparently, that's a large part of the success for BYD.

• 1:03:01Speaker 00

  Yeah. Do you remember that one socialist, uh, who said, I pay everybody only seventy thousand dollars a year? And Bernie Sanders liked the story. The story of the guy went viral. This was like five years ago. I don't know if you remember that story or not. Uh, what was the guy's name? Who was the socialist that paid his employees seventy K a year? Something like that. And he went viral. Can you pull up his name? Yeah, I remember. So when, when we had him on, I, yeah, Gravity Payments. We ended up having him on. What was the guy's name? Who was, he had a long carry, looked like a guy, he looked like Brad Pitt, good-looking guy. Dan Price was his name, Dan Price. And I had him on the podcast once, this was probably five years ago.

• 1:03:44Speaker 00

  And again, politically, we probably, economically, we probably disagreed where we were at, because he was more of a socialist. But then when I asked him the question, I said, so you pay everybody seventy grand? He says, yes, including your C-suites, yes. I said, how much equity do you give your guys? And he was startled by that question. I said, if you're so much about spreading the wealth, why don't you give them equity? I said, so you got a hundred million dollars of your company? And you own a hundred percent of the company? I do. I said, that's not, that doesn't sound like, you know, your values match each other. So it, it made for a great conversation. I, I don't know what happened to his business. I think he got in trouble. But I'm excited to see what this next phase you're going. By the way, um, how much you think,

• 1:04:26Speaker 00

  if, if I were to ask your best friends from high school, guys that you've known the longest? Okay, people that, like, you know, if you ask my friends, they'll be able to tell you who I was and all this stuff. Would they consider you a pessimist or an optimist?

• 1:04:39Speaker 01

  Back in those days, an optimist. Okay? Um, I, I've got a very optimistic orientation, a very outgoing personality. Um, so I tend to be optimistic. But the more I learn about society and the state we're in, pessimism's been forced upon me.

• 1:04:55Speaker 00

  Do, do you regret that? Do you wish you were the old optimist?

• 1:04:58Speaker 01

  Well, I'm only the optimist if I didn't know what I know right now. Um, so like, for example, one, one career I could have had was being a professional tennis player. And that would have been a very different lifestyle to what I've led. Uh, it, it, it was like a fork in the road moment where I had a choice between, uh, professional, uh, sports career or academia. And by sheer circumstance, academia won out.

• 1:05:21Speaker 00

  What, what happened? What was the event that you didn't go tennis? Because, I mean, why wouldn't you go tennis over academia?

• 1:05:27Speaker 01

  Well, because I was a student at the time at Sydney University, uh, studying, doing an arts law degree, studying economics, and horrified by how stupid the economic theory is, still even more horrified today than I was then. And then there was a student strike at the university, which led us to overthrow the economics department. Well, not to overthrow it, but to create a rival department. I got caught up in all the politics of that. Uh, and, and that meant my tennis went from five days a week to one day a week. And I dropped from that incredibly high standard that you, that hit when that level, I was doing twenty hours a week of tennis, plus a ludicrous amount of running and weightlifting and cycling, uh, while doing a university degree. And then with the academic, uh, the excitement of the student strike and taking on economics and challenging it.

• 1:06:12Speaker 01

  That's become my life. So in one sense, I'm, I'm enjoying the life I've led. I'm glad I've led this life, but I'd like to have two of me. I would have liked to try the tennis as well.

• 1:06:22Speaker 00

  Is that not crazy when we look back and we're like, what if I would have done this? And what if I would have done that? Who would it have become and what would I have done? By the way, how old were you the first time you read Communist Manifesto?

• 1:06:33Speaker 01

  Oh, I first read Capital as the first book I read by Marx. I was twenty.

• 1:06:38Speaker 00

  You were twenty? So you, so you read Capitalist first, then you read Communist Manifesto?

• 1:06:43Speaker 01

  I've read everything Marx ever read on economics. That was my master's degree, it's true. Because when I read Capital, this is a bit of a funny story. At the end of that student strike at Sydney University in nineteen seventy-three, I was, well, everybody in the strike was a lefty, okay? You'd call them communists.

• 1:06:58Speaker 00

  Sure, for sure.

• 1:06:59Speaker 01

  Uh, and, and they said, the, the, we, all the various strikes succeeded. All sorts of reform of education at Sydney University that year. And we had a, let's have a Marxist reading group. So in the middle of a Sydney summer, and I'm talking a glorious summer when you should be spending your time on the beach, a bunch of twenty or thirty lefties sitting in a cold room inside the Sydney University, reading Das Kapital. Now, part of what I knew was in Das Kapital was the argument that machines don't add value. Machines transfer the value they hold, but they don't actually add any extra value to the system. And I remember walking across to that, the, the beginning of this reading group, with a colleague, looking at the, over Sydney's skyline and where Sydney, you can see the whole of Sydney from Sydney University. And there were hundreds of cranes.

• 1:07:43Speaker 01

  And I said, I want a very good explanation by Marx as to why those machines don't add value. So I read the, the book very carefully and I found that Marx had a brilliant argument about what he called the gap between use value and exchange value, uh, in production. And I applied that to machinery and it led to the deduction that machines do add value. So I then said that to my bunch of fellow Marxists and they'd already brainwashed themselves into believing the labor theory of value. They, they laughed at me. So I then decided that's going to be my master's thesis topic to find where Marx came up with those ideas. And I didn't do a master's until I was about twenty years older. I started, I finished my undergrad in seventy-three. I began my master's in nineteen ninety-three, I think so, twenty years later.

• 1:08:26Speaker 01

  But I went through Marx, looking for where he came up with those ideas and I found it. Um, so I've read everything Marx ever wrote on economics, including the Communist Manifesto.

• 1:08:34Speaker 00

  But would you have considered yourself a leftist at seventeen?

• 1:08:37Speaker 01

  No, I was quite right wing.

• 1:08:39Speaker 00

  So, so academia got a hold of you and, and kept that mindset with you since then?

• 1:08:46Speaker 01

  No. I'm, I'm, I, I, Marxists dislike me about as much as neoclassical economists do, okay? It's very hard to put me into any particular category. Uh, I'm very much a capitalist entrepreneur at the same time as being an intellectual. So, uh, I don't think I've got a hold of anything. Uh, I've been, and what I look for is good logic. And what I found in Marx in those first seven chapters was brilliant logic that contradicted a fundamental argument he believed in, which is the labor theory of value. And the labor theory of value was needed to believe that, that there'd be what are called a falling rate of profit. And the falling rate of profit was needed to believe in socialism. So when I read that book in nineteen seventy-three, I saw that Marx's arguments that socialism is inevitable were wrong.

• 1:09:30Speaker 01

  Okay? So it's pretty hard. I mean, the, the first people I got, the first people I attacked in terms of attacking their economic thinking was neoclassical economists. The next group was Marxists.

• 1:09:42Speaker 02

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• 1:11:51Speaker 00

  But by the way, the school you went to, did they also ask you to read Wealth of Nations or Hayek or any of the von Mises? Any of this stuff or not really?

• 1:11:58Speaker 01

  Well, it's all my own reading. I mean, at university school, I went to a Catholic school. So I read the Bible more than I read any economics text, but I read books by books by Samuelson and Hicks when I was at school. So my, my, my basic argument is you've got to read to understand what people are talking about. You don't just take newspaper cutouts to understand the theories.

• 1:12:18Speaker 00

  You just took me to a completely different angle. You, I mean, I wasn't even going to go this angle with you. Yeah. Uh, you know, I'm 47. I'm about to turn 48. I don't know your age, but if you've been doing.

• 1:12:27Speaker 01

  Seventy three.

• 1:12:28Speaker 00

  Okay. So 70, by the way, you look like the guy, uh, the Hollywood actor who was Batman's mentor. I don't know what the guy's name is. You look like him.

• 1:12:37Speaker 01

  Oh, Meredith, Meredith Bergman.

• 1:12:39Speaker 00

  Uh, uh, can you pull them up? Is that the one is a very, very good looking guy? No, I'm thinking Alfred. Who was the Alfred guy in Batman?

• 1:12:47Speaker 01

  Alfred, the, the, you're thinking Batman's, Batman's.

• 1:12:49Speaker 00

  That guy right there. You look like him. So you're, you're a good looking man. It's a compliment. Take it as a compliment.

• 1:12:53Speaker 01

  I'll take it that way.

• 1:12:54Speaker 00

  You know, I'm 47, you're, you're 73.

• 1:12:59Speaker 00

  It's tough when we get older to talk about the mistakes we made earlier. What, what advice would you give to young men? Like, you know, being where you are right now and, you know, you've seen a lot. You've been all over the world. You, you've had some ideas, maybe some of them became right. Maybe some of them you got wrong. What, what, what feedback would you give to young men? Young men are very confused today. What advice would you give to young 16, 17, 18 year old men?

• 1:13:21Speaker 01

  Well, given the fact that I expect climate change to cause a social system to collapse, I'd say learn how to hunt. I hate to say, um, but.

• 1:13:30Speaker 00

  You all of a sudden became an optimist. That, that was a, so we went back to the pessimist. You think, so you, you don't think the future looks bright?

• 1:13:37Speaker 01

  No, I don't think it looks bright.

• 1:13:38Speaker 00

  Oh my God, that's scary. So you think it looks catastrophic?

• 1:13:41Speaker 01

  Yes.

• 1:13:42Speaker 00

  By the way, did, did you ever end up having kids or no?

• 1:13:45Speaker 01

  No, my first wife was, uh, had a disease called endometriosis. She was infertile. My second wife was far too old and my third wife already has three kids.

• 1:13:54Speaker 00

  Yeah. And if, if you were 25 today, would you have kids today?

• 1:13:58Speaker 01

  No.

• 1:13:59Speaker 00

  Wow. Man, they really got a hold of you.

• 1:14:03Speaker 01

  No, reality got a hold of me.

• 1:14:05Speaker 00

  Come on. I, I can see inside of you. There's the sense of humor, lighthearted, fun, positive side, but they, they got, they got a hold of you.

• 1:14:15Speaker 01

  No, what got me a hold of me is facts. Okay. Uh, I've, I've read massively in the climate change literature as well and work with climate scientists and I can see what they're seeing coming and I'm fucking terrified. And the last thing I want to do is have a child to lug through what I think is going to come away in the next decade.

• 1:14:33Speaker 00

  Did you see the recent report that came out? I don't know if you saw this recent, I'll show it to you. Please.

• 1:14:38Speaker 01

  Yeah.

• 1:14:38Speaker 00

  Uh, you know, I don't want you to lose your shit and get upset at me. This is a report that came out. I'm just going to read it to you and I want you to react to it any way you want and tear it apart if you want to.

• 1:14:48Speaker 01

  Yeah.

• 1:14:48Speaker 00

  But this is from Department of Energy that just came out. And it says, this is from, uh, the website, energy.gov. Guys, I just texted you the link. If you want to go to it, you have it, you, I just literally texted it to you. Department of Energy issues report evaluating impact of greenhouse gases on US climate and invites public comment. And one of the things they said here is the, the severe concern that they had. If you read this entire report, I'm not going to read the entire report to you.

• 1:15:20Speaker 01

  Yeah.

• 1:15:20Speaker 00

  It was overly exaggerated on how bad climate change is going to be for the last few decades. And this is coming from the state. Do you agree with this report? And have you had a chance to look at the report?

• 1:15:33Speaker 01

  Total bullshit, total bullshit. And I can tell you why.

• 1:15:35Speaker 00

  Tell me.

• 1:15:36Speaker 01

  Okay. This is what economists have said. This is William Nordhaus. And if I had to have anybody blame the state of the, what I expect to be the state of the planet in the next 10 years is William Nordhaus. His work on climate change is why we've done so little about climate change and trivialized the dangers. Now to give you one example of why he said climate change wasn't dangerous. When he first tried to quantify the impact of climate change on the economy. This is back in 1991. He said that his prediction was that three degrees of warming by 2100 would reduce GDP in 2100 by one quarter of 1% compared to what it would have been if there's absolutely no global warming at all. Now, one quarter of 1% means that the impact of three degrees of warming would be to reduce

• 1:16:20Speaker 01

  the annual rate of economic growth by one 40th of the precision with which we currently measure it. So we currently, you know, you get a reports GDP is risen 1.2, now 2.1%, 2.2. So you, you work in the point 1%. He said a point 025 impact, which is so true. You can't even measure it.

• 1:16:38Speaker 00

  Can you say who, who said this?

• 1:16:39Speaker 01

  William Nordhaus, the guy got the Nobel Prize for his work on climate change in 2018. Now, as part of that, he assumed that a roof would protect you from climate change. Okay. So he mistook weather for climate change, weather for climate. And that's the basis of all the low predictions you're seeing right now, all coming out of economists. And they have literally pretended that you can use data about the impact of temperature on GDP across the planet today to predict what's going to happen out of global warming over time. And that is completely mistaking what rising temperatures mean. And so I think that particular Department of Energy report, I'm sure it's based on the work of economists and it's a load of nonsense.

• 1:17:22Speaker 00

  So you don't, you don't side with what they're saying here? Let me just read it to you to fire you up a little bit. It says, the report challenges the mainstream view on climate change, arguing that climate risk may be overstated, the benefits of emissions cuts must, uh, maybe smaller than advertised, and the economic costs of aggressive climate policies deserve greater scrutiny. So you're for, you know, uh, you side with the Al Gore's of the world. You side with the AOC's of the world. You side with the people.

• 1:17:48Speaker 01

  I side with the scientists.

• 1:17:49Speaker 00

  You side with the scientists. Scientists have done a lot of things wrong in, in, in the past as well, right?

• 1:17:54Speaker 01

  Well, mate, you're talking to me through something invented by a scientist. You're seeing me through something invented by a scientist.

• 1:17:59Speaker 00

  By capitalists, I would say by an entrepreneur, right? By a.

• 1:18:02Speaker 01

  Entrepreneurs don't have engineering degrees. If an entrepreneur doesn't have an engineering degree, you can't make something that involves engineering or science. So it isn't the entrepreneur. It's, it's the, it's the knowledge levels that we have and we don't give enough respect to scientists.

• 1:18:16Speaker 00

  Yeah, those are engineers to me, but they also get things wrong. I mean, it's not like to put here and sit there. And so, so let me ask this. So for you, you're not optimistic about the future. You wouldn't have kids today if you were 25. You're. So, so, okay, so then, why have kids? Why get married? Why buy a house? Why have a career? Why create Rival, the company that you're building? Why buy your product? If we're gonna die anyways, let's all be negative. Let's not go to the website. Not, let's not support Patreon.

• 1:18:47Speaker 01

  Like, I'm gonna change our direction. The thing of you can't change direction if people believe there's no threat on the road you're on. Now, you're saying there's no threat, so there's no need to change our behavior. I'm saying there is. Okay? And, uh...

• 1:18:59Speaker 00

  Okay, that's a, that's a good pushback. So, so maybe, maybe help me with what you think the right solution is? And how much of it is on free market people? And how much of it is on the state to fix it?

• 1:19:10Speaker 01

  A lot of it's actually on, on economists, period, to making the mistake of not understanding what global warming actually means. So, I, I don't blame the state or the, uh, private sector so much. I blame economists barging into an area where they know nothing about and producing numbers which convince politicians because they're used to taking advice from economists and they trust them, they should not. So economists have fooled us to believe global warming is trivial challenge. It's actually an existential challenge. And on that front, uh, like, there's, there was a survey. I'll give you an idea of how different economists are from scientists on this front. There was a survey done of climate economists in 2020. They surveyed about two and, two and a half thousand people, about 380 answered a question saying,

• 1:19:54Speaker 01

  what do they think is gonna happen to a GDP if we hit seven degrees of global warming by 2020? So two centuries away. The average answer those economists gave was GDP to be 25% smaller. That's seven degrees of global warming than it would be if there's no global warming at all. Now, you talk to climate scientists and they say that anything more than five degrees of global warming probably means humans won't continue to exist on the planet. It's existential. So economists are saying anything more than three degrees is catastrophic. Five degrees is, so they're beyond catastrophic, including existential risks. Economists think that seven degrees of warming or reduced GDP by 25%.

• 1:20:34Speaker 01

  Uh, they're totally different, uh, uh, predictions, obviously. It's damned good idea to find out which one's based on realism. Having looked at what the economists have done, they're completely based on fantasy. But unfortunately, most people don't know that, so they take economists' arguments seriously. I'm sure that's what that energy, Department of Energy document you've got there is doing. And I wouldn't trust them as far as I can throw them.

• 1:20:59Speaker 00

  Yeah, uh, uh, I'm gonna push back a little bit and please, feel free to do what you do best. So, you know, do your thing. I'm enjoying this banter. Um, don't you think a, a, an element of economists or pro-climate change, global warming, fear porn, all this stuff that maybe, maybe they believe what they're saying? Don't you think a part of it is, if all of a sudden that solution didn't exist, they don't have a job? Let me unpack and then, you know, I wanna, I wanna hear from you. How many insurance space? In the insurance space, there's such things as actuaries. Okay? And actuaries, you know, most of them, they make very good money. They make a few hundred thousand dollars. It's a very, very high-paying job.

• 1:21:41Speaker 00

  And these reinsurance companies were hired them left and right and they get a job. But recently, the last five years, AI can pretty much do 99% of what they do. And the 1% is their opinion or their intuition and their gut is, I think this is table D. I think this is table C. I think we're gonna prove them at this. And it's just kinda more, you know, what they think about it. It, it reminds me of the old story, which is this one guy, uh, goes and hooks up with the king's daughter. The king is furious and he hooks up with her in his castle. So he's even more furious. He sends his soldiers to go kill this guy. Now, this guy is a psychic and he predicts the future.

• 1:22:25Speaker 00

  So when the soldiers come to kill him, he says, look, before you kill me, I have one prediction that the king needs to know. It's very important to him. So they sit, they call the king, the king says, come on down, let's talk. You know, of course, this is a fictional story, but I'm just sharing the story with you. He goes to the king and the king says, what's your prediction before I kill you? He says, I have one prediction for you. What's that? You're going to die a day after I die. And the king says, what did you say? He says, you're going to die a day after I die. And the king says, shit, this guy's made some predictions in the past before. He puts him in the castle, gives him to his daughter, lives there, well-fed, everything.

• 1:23:08Speaker 00

  And of course, the king died before he died. But that was his way of saying, let me scare the shit out of everybody to make sure you know me. Don't you think there's a little bit of that going on with climate change?

• 1:23:18Speaker 01

  No, I don't. You want me to band pack why?

• 1:23:22Speaker 00

  Please.

• 1:23:23Speaker 01

  Okay. What would be the temperature of the planet, do you think? At, if there was zero carbon dioxide in the atmosphere?

• 1:23:29Speaker 00

  Tell me.

• 1:23:31Speaker 01

  Minus 14 degrees Celsius. And of course, it wouldn't stay at minus 14, it would hit minus 100 because the whole planet would be covered in ice and it would then reflect solar energy back into outer space. So the fact that the temperature, the average temperature is not minus 14 but plus 14, I might have had the, for the first number wrong, the, the second is pretty, I think minus, minus 15 degrees or minus 11, something in the, minus 11 to minus 15 degrees. That's the temperature we'd have if we didn't have carbon dioxide and other greenhouse gases, particularly, um, uh, water vapor capturing photons bouncing off the surface and going back into outer space, the temperature would be that much lower. So without global warming, we wouldn't have a civilization at all. We wouldn't have life on the planet.

• 1:24:13Speaker 01

  So global warming is necessary to have a biosphere that can support life. Now, as we increase the amount of carbon dioxide, of course, we're increasing that temperature. And the sort of thinking which you're caught up in, and this is what economists have done as well, is they've said, look, it's, you, we, we, people live at minus seven degrees in the Arctic and they live at plus 35 in the tropics. That's a huge range of temperatures. Global warming's only gonna increase temperature by two or three degrees. What's that in terms of across the space of the planet? I'm doing a cartoon right now. You might actually wanna take a look at the cartoon because I'm trying to get across why this is completely wrong thinking. Because we're talking about temperature across space and we know this huge range. We're thinking, you know, what's a few degrees across space? It doesn't mean anything at all.

• 1:24:56Speaker 01

  But if you look at where we came from as a species, we evolved about 300,000 years ago. And about 12,000 years ago, we started to develop civilization. The reason we started developing civilization about now 12 to 15,000 years ago was because the planet goes through cycles that are called Milankovich cycles, after the person who first discovered them. And they're pulses in the average temperature of the planet caused by changes in the orbit of the planet around the sun, the inclination and so on. So every 20, roughly every 100,000 years, that we've got, we've got a, a cold period and a hot period. The cold period lasts about 80,000 years, which is an ice age. The warm period lasts about 10 to 20,000 years and that's what we're in right now, which we call the Holocene.

• 1:25:38Speaker 01

  So if we go back just, uh, 20,000 years, we find the temperature of the planet was about seven degrees colder than it is now. So the average temperature of the planet during the ice age was about plus seven degrees Celsius. So going from plus seven degrees to plus 14 degrees is what enabled us to build our ecological systems. Now, if we hadn't built industrial civilization, we would have gone back down again into the next ice age. So at the moment, temperatures are falling, the natural temperature of the planet is declining. And if that kept up, we'd be go back and lose another six degrees, six, six, five, six or seven degrees cooler. Uh, we'd go back to an ice age and that would destroy our civilizations.

• 1:26:19Speaker 01

  So tiny variations across time, like six degrees, not tiny, but, uh, you know, six degrees is the difference between an ice age when Chicago is a kilometer, uh, beneath, beneath a kilometer of ice and today where, you know, Chicago's an industrial powerhouse. Uh, that's how sensitive temperature is through time. Uh, it's far more sensitive to time than it is to space. But what economists have done is said, oh, it's not particularly sensitive across space, so why should it be sensitive across time? They're completely ignorant of the dynamics that give us the, the change in temperature over time. And that's why it's so dangerous to trivialize what we're going through.

• 1:27:00Speaker 02

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• 1:29:10Speaker 00

  Yeah, I, I, I think for me, uh, I, I sit there and I watch human behavior on what we do. And again, this is my opinion on, on what I think happens is, you know, I'm in Florida. So right now by 2030, you know, they're, they're wanting us to lift, I live on the water. They wanted us to lift the edge to the intercoastal two feet higher, right? So because why is that happening? It kind of validates to your point where, why are they doing that in Florida? Because the climate and all this other stuff. But people are still, actuaries and underwriters are still underwriting homes on water. And they're still getting the insurance and the insurance companies are not going to give insurance.

• 1:29:53Speaker 00

  If they didn't feel in the next decade, two, three decades, something's going to happen. There's just not, not a good business plan for them to be able to do it. Now, don't get me wrong. Some of the insurance companies in America have left the state of California. And they've just flat out says, I'm out. And their reasoning for leaving it like, I think GICO left, I think State Farm left. Somebody can fact check this to see one of those farmers left. And a part of it is the fires that happens there. So insurance companies won't stay some, stay somewhere if they can't make the money. And so, I don't know, I, I think on the climate change side, I do agree. I think they went from global warming and they said, well, it's probably not the good name. Let's change it to climate change, kind of like how it used to be, uh, uh, pro death to pro choice.

• 1:30:35Speaker 00

  Pro choice is probably a better word than pro death back in the days campaign wise, politically. But I also watched what BlackRock did, what that ESG concept was, it kind of went away from it. Who knows, it may make a comeback, it may make a comeback. But my bigger concern is that a lot of, a 20 year old Steve Keen went to a university with the aspirations of being a tennis player. And some Marxists got a hold of him. He read Das Kapital and then read Communist Manifesto. Instead, he could have competed against Jimmy Connors, not, not Connors. Connors, uh, 10 years before you, I think, right? I think Connors is in his 60s, yeah, younger. But, uh, who knows, you, you may have played against some of these guys.

• 1:31:18Speaker 00

  But I, I worry respectfully, I worry that there's millions of 18, 20 year old youngs, next Steve Keens that may have people around them that, that have maybe a little bit of the framing like you that are negative about the future. And that may scare the crap out of them to not want to pursue it because they're thinking the end of the world is around the corner. I think that is a bigger damage than the risk of climate change. And I think by tenfold, it's a bigger damage. You, you're probably going to disagree with it.

• 1:31:49Speaker 01

  Of course I am.

• 1:31:51Speaker 00

  I know you are. You have to, you don't have a choice but to disagree with it. Because what is the alternative?

• 1:31:56Speaker 01

  The alternative, see, we don't realize how fragile life on this planet is. And there's a, a, a arrogance to believe we can do anything we like to the planet and we won't come back and bite us. Now, that arrogance is going to kill us. And so it's arrogance and not understanding the actual dynamics of the system that is commonplace for humans, uh, that I think is the greatest danger we face.

• 1:32:20Speaker 00

  Don't you, don't you think it's also the mutual arrogance of knowing for a fact you're right? Maybe you're wrong. Are you comfortable with you being wrong?

• 1:32:29Speaker 01

  I'm working with the climate scientists. Okay, so I'm looking at the models they've built.

• 1:32:33Speaker 00

  But are you comfortable with them being wrong? Are you comfortable, what if they're wrong?

• 1:32:36Speaker 01

  Yes, I am. And I think in fact the mistakes they've made it under, underestimate the dangers they face. Okay, for example, I'll give you one of the, my favorite examples there. Have you heard what's called wet bulb catastrophe?

• 1:32:47Speaker 00

  Yes.

• 1:32:48Speaker 01

  Okay, um, I asked one of the leading scientists in this area, has anybody done work on the wet bulb temperature that will kill non-humans? Because one thing which makes humans almost unique in the animal kingdom is we have sweat glands all over our body, which means we can radiate heat from our bodies much more effectively than any other animal except horses. And I thought that somebody would have said, well, in that case, we, we know wet bulb temperature that would kill a human. Uh, it used to be thought to be 35 degrees for six hours. We now know it's probably 31 degrees. Experimental results recently have shown that it's more likely 31 degrees wet bulb will kill the vast majority of people. So it's much closer in that sense than we think.

• 1:33:30Speaker 01

  But I said, what about, um, you know, if, if we have a wet bulb catastrophe which kills livestock? Has anybody done studies about that? He said, no, we haven't. So because animals normally sweat through their tongues, uh, they can't get rid of heat as easily as we can. And it's quite possible a wet bulb catastrophe could hit at a lower temperature for animals and wipe out our animal stock. Now, that's the sort of thing where I thought scientists would have done the right work. They haven't yet because this is happening so quickly in terms of scientific procedures. Most of the programs that, computer programs that simulate what's going to happen with the climate are written in Fortran. Because that's what the first meteorological, uh, systems were first written in Fortran.

• 1:34:14Speaker 01

  Uh, that's what people still maintain. It's ancient code. It's not stuff which has, you know, got all the, the powers of modern software object orientation and functional programming and things like that. So they don't get updated fast enough and people don't, aren't doing the work. And so in that sense, there are dangers that are not being considered by the climate scientists, even though they've got the technology to do it. Uh, so we're under, we're potentially underestimating the dangers we face, not overestimating.

• 1:34:41Speaker 00

  Um, fair enough. I don't think I'm going to change your mind. I think you're.

• 1:34:45Speaker 01

  You're not going to change my mind, definitely not.

• 1:34:47Speaker 00

  I think, you know, so you know, our brand is called Future Looks Bright. Okay, if you go.

• 1:34:51Speaker 01

  Is it? I didn't know that.

• 1:34:52Speaker 00

  Yeah, that's, that's what makes it so funny. Uh, if you go to, uh, if you go to FLB.com or if you go to VTmerch.com, can you go to the Future Bright, the Bright Collection? That's our brand. Take a look at that. I, I, I, for you, I'm thinking about making a shirt and selling it to see how many it sells. The one that's, what is the opposite of Future Looks Bright? Would it be Future Looks Dark? Future Looks Grim? I wonder, I wonder walking in the streets and seeing somebody, kids wearing Future Looks Grim, what they would say about it.

• 1:35:22Speaker 01

  I think we're, I think we're close to a global, a golden future. This is what pisses me off because it's so dangerous. In the last quarter of a millennium, so 250 years, pretty much since the beginning of the American, uh, uh, uh, Amer- America as a country, that's when the industrial revolution began. We've learned so much about the universe in that period of time. And I would, if we can continue learning and continue expanding, we could go to a Star Trek future. And that's what I'd like to see. Okay. But at the same time, we're, we're damaging the biosphere at the same point. Now, we are probably 20 or 30 years from being able to take production off planet. I mean, therefore we could produce the goods and services we all consume now and, and far, far richer in outer space. The, we'd waste, we'd dump the waste into the sun.

• 1:36:06Speaker 01

  We could have that global golden future. And that's what I'd like to see us get to. But we can't get there if we recklessly go at it at such a stage that we end up destroying the productive capacity of the planet before we get to that point.

• 1:36:17Speaker 00

  So you must be, you must be a massive fan of, uh, Elon Musk?

• 1:36:21Speaker 01

  Uh, yes and no. I, he was a total bloody fool when he got involved with Trump. I think it was totally destructive. He should have stuck with engineering. So like I was supporting Musk because I, I really want to see a human outpost on Mars or anywhere off planet. Because my feeling is we're not going to stop the damage we're doing on the planet. We are going to destroy the capacity for this planet to support human civilization, if not human life. So in that situation, a bit like the Middle Ages, the only way to hang on to the knowledge is to have a monastery somewhere that keeps all the knowledge. And, you know, while there's chaos around everywhere else, at least the knowledge is preserved and then we can go forward in the future. That's what I saw about Musk and the potential for getting a human outpost on Mars. Now, he's wasted so much bloody time with his right wing politics and with his meddling

• 1:37:06Speaker 01

  and, and elections around the, around the planet, including getting Trump elected. I hope he regrets that now, uh, that I don't think he's going to get there. Probably the Chinese might beat him. But I do want to see a human outpost on Mars to give us some chance of hanging on to the knowledge we've built in the last quarter millennium and not destroying it by destroying the biosphere and not being aware we're doing it until it's too late.

• 1:37:25Speaker 00

  I want to go to the last topic before we wrap up, Steve. And again, I appreciate your time. By the way, have you seen the movie Project Hail Mary with Ryan Gosling? Just came out?

• 1:37:33Speaker 01

  No, I haven't.

• 1:37:34Speaker 00

  I think you would like it. It's about that. It's, it's a very, I, I actually think you would love it. It's one of my favorite movies I've seen last 12 months. And on the business side, have you read the book Blue Ocean Strategy? Have you ever read Blue? I think read that as well. It sold 5 million copies. The guys that wrote it, they're academia. It's about how to differentiate your product, you're about to go through building a business. I, I don't think you'll be able to put that book down. But last thing before we wrap up. So.

• 1:37:59Speaker 01

  Yep.

• 1:37:59Speaker 00

  Iran, you know, um.

• 1:38:03Speaker 00

  This thing started a few months back. We are now where we are, you know, negotiations. I'm sure you followed what happened in Switzerland when J D Vance is there and you know Cutter and all this stuff. Where are you at today? You know, because some people said, you know, I, this is going to be a next Iraq and next Afghanistan. It's going to take decades. We're going to be in it. We're going to do this. We're going to do that. What, what is, uh, what are your thoughts about where we are right now specifically with Iran?

• 1:38:28Speaker 01

  I think we're about to suffer a serious economic downturn caused by the damage by, by, by blocking the Strait of Hormuz. Products that come through there are absolutely critical for the, uh, for our civilization and we're blocking off supplies of sulfuric acid, helium, uh, fertilizer, the lubricating oils, all these things have been damaged and we need them to maintain our production system. So we're about to, it's, it's, it's just likely to start hitting the American economy in the next four weeks. It's literally that close. Uh, because that's the length of time from the Strait of Hormuz to where the ships would normally be unloaded. We're getting to the point where that huge hole in the supply chain, a three-month hole is about to arrive.

• 1:39:09Speaker 00

  Four weeks.

• 1:39:09Speaker 01

  And when that happens, of that order.

• 1:39:12Speaker 00

  How nasty is it going to be? How nasty is it going to be?

• 1:39:15Speaker 01

  Well, uh, it'd be nasty for other countries which don't have their own capacity to produce their own fertilizer. So America's got a bit of an advantage there. Uh, but I think quite nasty because when you take a look at the relationship between energy and GDP, it's absolutely lockstep. If you have a 10% fall in energy, you get a 10% fall in GDP. We're looking at about that scale of fall in energy because of damage to the Strait of Hormuz or all the facilities in the, in the, in the Gulf, in the Gulf. Uh, so, and also we're going to lose the capacity to produce so many goods that rely upon sulfuric acid, copper, massive use of copper right now for data centers. Uh, we won't be able to refine as much copper. So all these things are going to hit the economy in the next,

• 1:40:00Speaker 01

  start hitting in the next four to, four to eight weeks and it'll be quite drastic. And I think this is partly why Trump is finally looking like he might make a negotiation he actually sticks with because he's getting, being told that the Strategic Petroleum Reserve is down to about 20 days. Uh, you were that close to running out of supplies in America that we might finally get a sensible resolution for the stupid war that should never have happened in the first place.

• 1:40:25Speaker 00

  So, so you also predicted a famine though, right? Didn't you predict the famine?

• 1:40:28Speaker 01

  I think a famine is likely because with about 30% of the world's fertilizer comes through the Strait of Hormuz and people aren't aware of the extent to which we rely upon fertilizer for food. Again, this is stuff I know from agronomists. I, I know, not, not from my own research, but they claim that if we didn't have the fertilizer from the Haber Bosch process, the stuff that gives us nitrogenous fertilizers and super phosphate, uh, we would have a carrying capacity on the planet of about one or two billion people. We currently have eight and a half billion. We currently produce 30% more food than we need to, to, to keep all those people alive, but that 30% could fall because of a 30% fall in fertilizer. It could be more severe than that. So I don't think we're going to

• 1:41:10Speaker 01

  see a global famine, but we will see famines all around the planet when people aren't producing as much food because of the fact they haven't got the fertilizer and also the increase in the fertilizer is meaning that some farmers are deciding not to plant crops. So for example, Australia's wheat planting, it seems to be about 50% of the usual level because the fertilizer is costing too much to make it worth the farmer's while to plant the acreage they normally plant. So we're likely to see a large fall in global food supplies and that will affect not just, you know, brown people countries, the usual thing where famines occur. It may even affect countries like the UK, which imports over 40% of its food. So we'd like to see some serious disruptions and, and this is one

• 1:41:53Speaker 01

  time where collateral damage from a war won't occur to the civilians in the, in the war zone. It's occurring to civilians all over the planet. Incredibly irresponsible war. It should never have started.

• 1:42:04Speaker 00

  Yeah. So, okay. So, uh, if you're wrong, would you be willing to come back and say you were wrong about what happens the next four weeks with the famine and the market?

• 1:42:13Speaker 01

  Yep. Yep.

• 1:42:14Speaker 00

  All right. So.

• 1:42:15Speaker 01

  I mean, again, in terms of timing, again, I'm going, I'm, I'm not an expert on shipping, for example. So one thing somebody pointed out to me is that a shipper tank is moving at about, about 13 miles an hour, maximum speed. So how, how many miles have you got between the Strait of Hormuz and California? That's how many days before the supply chain

• 1:42:32Speaker 00

  You're doing it based on the time. I got it.

• 1:42:33Speaker 01

  That sort of thing. Okay.

• 1:42:35Speaker 00

  Yeah. And by the way, what's more valuable? What, what has got more, uh, impact to the world economy? The Strait of Hormuz or Panama Canal?

• 1:42:42Speaker 01

  Probably the Strait of Hormuz. The Panama Canal is absolutely essential for, you know, American exports to Asia and Asian exports back to America and so on. It's a, it's a critical life way. But, um, the, the thing about the Strait of Hormuz is it locks up, uh, you know, it's just 30% of production of fertilizer and sulfuric acid. And I don't know that, in some ways, the Panama Canal divides the planet in serious ways. The Pacific Ocean on one side, Atlantic on the other. With the, with the Strait of Hormuz, you're blocking off the Persian Gulf. And given the idiosyncrasies of the planet, that so

• 1:43:22Speaker 01

  much of the oil is around that region and so many critical inputs we need for our manufacturing systems come from oil. Uh, that's why the Strait of Hormuz is so important.

• 1:43:32Speaker 00

  Steve, this has been a pleasure of speaking. We started off rough. I think it was a little

• 1:43:37Speaker 01

  We did rather. Yeah. We sort of, I got to like you by the end. Okay. So.

• 1:43:41Speaker 00

  So Steve, where can people find you? Do, is there a website you want guys to go look you up? Cause I know we're going to put the link of the Patreon you talked about, but is there anything else?

• 1:43:51Speaker 01

  Well, there's, I've got a Patreon site and a Substack site and they both have their name, Prof Steve Kane in that, that link. And then my YouTube channel is also at Prof Steve Kane. So those are probably the three main sites together.

• 1:44:02Speaker 00

  We're going to put both of them below for the audience to go support Steve. Again, thank you for your time and I look forward to our next visit.

• 1:44:09Speaker 01

  Yeah, that was fun. We got there. Okay. See you again. Bye.

• 1:44:13Speaker 00

  Okay. So we're going to do an experiment real quick. You know, our brand is Future Looks Bright. We're going to say that Steve's Future Looks Bleak, right? You just heard the exchange back and forth. Here's what we're going to do. Order one of these two shirts. Future Looks Bright, if you believe the future looks bright. And if you order Future Looks Bleak, we've never done this before, we will give a hundred percent of the sales of Future Looks Bleak to Steve's Patreon. So go to VTmerch.com. We'll put the link somewhere here. Go to the site. Let's see what you're going to order. Future Looks Bright or Future Looks Bleak?

• 1:44:46Speaker 09

  When we set out to create a shoe that blends comfort, function, and luxury, we had the choice to make it fast, we had the choice to make it cheap. We chose neither. Instead, we chose Tuscanero. We chose true Italian craftsmanship. Each pair touched by 50 skilled hands. We chose patience, spending two years perfecting every detail, and we chose the finest quality at every step. Introducing the Future Looks Bright collection. Not rushed, not disposable, not ordinary. Rather intentional, luxurious, timeless.

• 1:45:31Speaker 04

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid, and risked 350,000 Virginians' health care to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes, and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, the House Majority PAC dot com. Not authorized by any candidate or candidate's committee.

• 1:46:00Speaker 06

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• 1:46:46Speaker 11

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