{ "episodeId": "SLP458", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "peter_st_onge": { "name": "Peter St Onge", "role": "guest", "tag": "PETER" }, "guest_2": { "name": "Guest 2", "role": "guest", "tag": "GUEST" } }, "segments": [ { "speaker": "stephan", "time": "00:09", "start": 8.53, "text": "Hi, you're listening to Stephan Livera podcast, a show about Bitcoin and Austrian economics, brought to you by Swan Bitcoin. Swan is the easy way to buy Bitcoin and also learn about Bitcoin. Now, if you are with a business, consider that you can use Bitcoin to help future-proof your business, nonprofit or trust with Bitcoin Treasury services and the Bitcoin Benefit Plan, adding Bitcoin to your corporate balance Balance sheet has never been easier. Swan Bitcoin Treasury Solutions makes it easy for you to incorporate Bitcoin into your financial strategy. 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Now, for today's show, I noticed that there was a lot of drama about AI and ChatGPT, and so I thought, who better to ask than my friend Peter St Onge to come back on and talk to us about this? What is the impact of this, and how should we think through this from an Austrian economics perspective? And I think Peter has some really great perspectives to share. And Peter, welcome back to the show. It's great to be back, Stefan. So, Peter, I, I've always enjoyed, reading and listening to some of your takes over the years. Obviously, as an Austrian, I'm obviously a big fan of Austrian economics, and so I think, you know, there's, there's certainly a lot of things that we'll align on, and I know this, you know, I thought to have a chat with you recently because obviously this whole drama with ChatGPT and AI and where is it all going, and I know this From an Austrian perspective, years ago, and I believe people were talking about some of these ideas as a kind of futuristic idea, let's say maybe ten years ago, and even, let's say, kind of around twenty fifteen, I believe that was when you had one of your videos, and you were also writing articles about this also. But, yeah, I guess let's just hear a little bit from yourself, like, what's your initial reaction to this whole idea of, oh, ChatGPT or MidJourney and these other AI tools?" }, { "speaker": "peter_st_onge", "time": "04:27", "start": 267.38, "text": "Yeah, I mean, I think, You know, the idea that humans are gonna be obsolete, right? That we're gonna be replaced, by machines or technology, that's been around for a really, really long time. you know, back in the 19th century, the Luddites, Ned Ludd, they were running around smashing machines, and, you know, they were horrified that- the machines were gonna take all the jobs. and of course, what happened is that, you know, actually everybody got incredibly rich. The machines did take the jobs. It did happen. Everything happened according to their worst fears, and as a result, we got astoundingly rich. Right? And so this is a process that has gone on forever, that, you know, the very first, you know, human who started using fire or a fishing net, you know, that's a form of automation. Fishing nets stole jobs from fishermen, and what do you know, you've got a lot more fish. So, you know, it is very good that jobs become automated, you know, there's, we'll, we'll get into along the way. but anyway, there's always fear about it, and part of that fear, I think, is genuine, that people are actually afraid that, you, you know, their own job is gonna disappear. the other part of it, I think, is just opportunist, right? So, socialism, handouts, giving people money for free, this is always popular. you know, this is why it's been Their battle against socialism under various names, and so there, there's this, you know, entire sort of political infrastructure that is looking for an excuse to give people handouts. Right now, I think it- And thinks it's found its moment, you know? So during, the COVID crisis, a lot of countries implemented basically universal basic incomes, giving, you know, Canada, for example, where I was living at the time, no questions asked, here you go, here's some money. and, you know, now they're trying to sort of combine that test run with artificial intelligence to, you know, basically say, \"This time is different.\" Sure, last time the machines, you know- Automated farming, sure it turned out okay, but no, no, no, this time, this time is different. so I think within that, you've got an economic component to it, you know, are we gonna be okay? what's it gonna look like? there's a social component, you know, so how do we react, to AI? What does it do to society? Does it do good things, bad things? and then there's kind of a fun we can get to towards the end, kind of a broader existential or almost science- Fiction scenarios, that I think are becoming more and more worth considering, you know, if people start, you know, actually putting more, real decision making into AI's hands." }, { "speaker": "stephan", "time": "07:25", "start": 444.73, "text": "Yeah, I think that's a great overview because there's all these different implications of it, right? The economic part of it. I think that some of the arguments go back and forth. So for example, one argument is, well, think about it like this way, AI is going to amplify our productivity, right? That maybe one person So now can do the job of five people. So maybe even, so maybe today the argument is, okay, ChatGPT or these other AI platforms, they can't replace the best copywriters, but maybe they could take away the job of like the very low end, beginner level copywriting, just as an example. and so then the argument might be that, oh, okay, maybe if you're a good copywriter and you know how to do-- you know how to be a so-called AI prompt engineer, that you can multiply, you can multiply your productivity And become so much more productive in terms of how much copywriting that you can do. So that's kind of, I guess, one idea. But then I think maybe one criticism people have, and it would be great to hear your response on this, is people say, \"Well, what about the massive social upheaval that's going to happen? They say, \"Well, all of these jobs are just going to be totally obsoleted straight away, and, and it'll be too quick for those people to be able to retrain.\" And I'm curious how you kind of answer that." }, { "speaker": "peter_st_onge", "time": "08:40", "start": 520.02, "text": "So on the idea that, you know, these sort of mid-level performers, you're gonna get more inequality between performance. Okay, that I think is absolutely true. That's also true today. if you are, you know, good at marketing or if you have an appealing personality, right? If we take Mr. Beast, for example, right? In a pre-internet world, what is Mr. Beast doing? I don't know, he's hanging out, entertaining his friends. Maybe he's down at the local bar entertaining thirty people. Right? That doesn't scale, okay? But Mr. Beast has a very appealing personality, and so he effectively automates that personality by connecting it to the internet. And so yes, Mr. Beast makes a lot of money, and most people aren't charming enough to make millions of dollars by saying and doing random things on the internet. So yes, there's absolutely going to be a divergence. But I think the way to look at it, my favorite metaphor for what automa- Automation does for jobs is an escalator, right? So you are, the escalator is going up, but every so often you have to take a step down, okay? Now, a society without automation, right? Like a, you know, primitive somewhere on the edge of the Sahara Desert, okay? They have no automation, they have lots of jobs. You probably have jobs clearing out toilets at night. You don't want those jobs. You want those to be audit, to be automated. and so, you know, once you, so that's like a staircase, okay? Everybody just kinda stays put, you don't really progress very much. on the other hand, in the escalator metaphor, things are automating, things are getting cheaper Now, having said, you know, one of the, elements of that is that, you know, sort of the economy by its nature tries to reduce the use of expensive things. Okay? So, you know, if you're using gold in cell phones, then you would try to find some other substitute for it, right? Some other metal that conducts and so on. So this is the nature of the economy, because, you know, people are trying to produce things at lower cost. This is wonderful if you're- Or, you know, if you wanna protect the environment, right? You know, there's, there's a natural tendency for companies to economize, and to waste less because they wanna spend less. However, in this particular context, it means that, yes, companies are always trying to automate your job. They are trying to get rid of you, right? But as long as that escalator, right? Or as long as that process is allowed to continue, and in fact, to the degree that it becomes a crisis, it would only be a crisis because that escalator is going up so- So fast. Right. So if we sort of zoom out, you know, consider that in the United States, a maid, like a house cleaner, makes about twenty-five times what they make in Indonesia. Now, Indonesia, India, right, many countries in the world, okay, an American house cleaner makes a ton more, a British butler compared to an Indian butler, ten, twenty times more. Now, are the American house cleaners better? Probably not. They probably don't know how to cook. They can't ne- Negotiate good deals at the wet market, they're probably no better, right? What's happening is that they are sitting on an escalator. They are benefiting from the wealth around them so that even though house cleaning isn't a very well paid job, well, in the United States, right? You know, if you're, if you have a job painting a house or cleaning houses, you can buy a car, you can get a mortgage, you can live a middle class lifestyle that a, you know, Indonesian, house cleaner could only- Dream of. So, you know, I think that's kind of the big picture, you know, this has been known, by the way, for a long time, right? This is Bastiat's, Candlemakers' Petition, right? If you've got some technology that is giving you free stuff, okay, so in the case of Bastiat's, petition, you know, it was sort of a, ironic, complaint from the candle makers that, you know, the sun provides unfair competition, and so in a sense, the sun was automating So similarly, you know, as automation progresses, whether it's, you know, farming, or factory work, or in this case, white collar work, you're getting the same effect, right? It is, it is a gift to the universe Yes, individuals will step down, you know, they'll go down one rung, but at the same time, you know, if that's really serious, if AI is affecting the economy to the degree that we would consider it a crisis, then it means we are getting rich very, very fast." }, { "speaker": "stephan", "time": "13:25", "start": 804.6, "text": "That's a great way to put it. Now, another concern, and perhaps this is related to the inequality one, so typically progressives care more about this, but there is a concern I've heard where people say capital owners will be vastly rich And if you aren't a capital owner and you don't have access to the robotics, the machinery, the AI, or the question of access, that if you can't pay for access to use ChatGPT or Midjourney or one of these things, that, there's a concern of access and equality and inequality there. so perhaps that's just like a very fundamental philosophical question of, do you believe inequality, that it, it is with us whether we like it or not? I guess that's one way to think about it. How are you seeing the inequality question now?" }, { "speaker": "peter_st_onge", "time": "14:07", "start": 847.32, "text": "Yeah, I think inequality, it's always there simply because humans differ in their motivation, to a certain degree, you know, in their natural talents and such. but the thing is that as we get wealthier, the inequality bites less Okay. So, you know, you're not talking about some people, are, you know, starving to death and other people, are eating like medieval kings, right? The, the inequality that we see in a society like America, it is relatively minor. you know, people who live below the poverty line, they have air conditioners, they have internet connections, they, they actually have more food, than is probably healthy for them. you know, and so I think that, that process definitely continues News where, you know, yes, everybody's getting richer, but, you know, like with the early internet, right? One of the early concerns was that the poor people aren't gonna be able to get on the internet. And indeed, I had a buddy back in nineteen ninety-three, three or four, he was getting on the internet, he was spending fifteen hundred dollars a month to get on the internet because he thought it was so cool, right? It was just, you know, it was like a life changer for, for just social activities, for, for talking to people," }, { "speaker": "peter_st_onge", "time": "15:21", "start": 920.98, "text": "not even Sit around and said, \"Oh, this, this internet is gonna be horrible. All the rich people are gonna be able to sit around and, and coordinate and connect, and then the poor people are just gonna be on the outside looking in.\" And, you know, the logic of capitalism is that, you know, greedy capitalists want to sell more product, right? And so they are trying to, you know, earlier we mentioned how they're always trying to make everything cheap. Well, a reason they're trying to make it cheap is so that they can sell to more markets, right? So the, you You can make a profit off them if you, you know, provide a product, especially if that product helps make them more productive, right? You know, if now they can, you know, work on Fiverr out of the Philippines, and so they can make enough money to afford, you know, whatever product you're, connecting them with, so, you know, you get this virtuous circle. And so, you know, yes, I think that inequality will continue, it is always with us, it will not feel, as painful as it does today." }, { "speaker": "stephan", "time": "16:20", "start": 979.89, "text": "Yeah. To the types of jobs, do you have any theories or ideas on what kinds of jobs will be replaced and which ones will remain for a little while longer?" }, { "speaker": "peter_st_onge", "time": "16:32", "start": 992.08, "text": "Yeah, probably to the extent that AI gets better, we're probably looking at white collar jobs, so data entry, customer service, you know, copywriting, market research, content creation. you know, ChatGPT, GPT can do a, you know, pretty decent job of writing a blog post and lots of other things. but, you know, I think when we're talking about what kind of jobs are gonna replace these, we kinda wanna zoom out and consider, we- We kind of fall into the habit of looking at a job as like a valuable resource that we don't want to slip away. But the job isn't the resource, the human is the resource, right? So if you sort of do a thought experiment, what if the aliens teleported ten thousand Toyotas onto the side of the highway and just left them there, right? And, you know, completely unowned? What would we do as a society? Well, they're resources. I don't know, we would scoop them up. You would, you would get on the news and say, \"Hey, On the highway, grab one. Okay, they'd be scooped up instantly, no problem. Why? Because it would be a very fluid market, right? People would get on a bicycle and go grab a Toyota So as long as markets can clear, in other words, as long as, you know, an unowned resource can be bid at a correct price, all of those humans are unowned Toyotas, right? They are people who are useful, in some way. the activity that they used to do has been automated, but the-- you know, so now they have to step one down on the escalator and they have to turn, to what else they can do. Now, humans are not only physical and cognitive beings, right? there's a lot- A lot of value that humans have simply because they are human, right? So for example, handmade things, okay, are almost always worse quality than mass-produced, right? Anytime you hand-make a chair or something, you're going to introduce flaws to it, that, you know, you're never gonna have six sigma production when you're hand-making a chair. however, that actually makes them more valuable. Right? you know, you could do a CGI Van Gogh, especially now with the AIs, you could spit out five thousand Van Gogh paintings in the next couple of minutes, and yet people still want the original Van Gogh. In fact, the original Van Goghs Go up tremendously in price because of the escalator, right? Because the society is getting richer around us. So, you know, if we look around us, you know, Etsy, for example, the, the website where people hand make art products, is-- it, it's a massive field, it's growing. More and more people want that, and the reason is because as people get richer, they don't want, you know, the version of chairs out of Walmart, they want something interesting and creative. Right? And so, I think that there's gonna be a lot more demand for all those kinds of things. You know, we can consider bartenders versus vending machines. Right. Bartending has been automated for a very long time, right? Over a hundred years, and yet people don't want to go to a, you know, bar and sit there and look at a vending machine. teaching versus a YouTube video, raising children versus sitting them in, in front of a Barney video on the iPad. Right? All of these are functions that- They've been automated for a long time. You can very easily automate your babysitting, you can raise your kids using an iPad, and yet people don't want to, right? People actually want the human connection in there because it is a human, not because it mimics the human, right? You're not talking to the bartender because he acts like a human, you enjoy talking to him because he is a human. The value is inherent in being human, because we're humans, we like other humans. So, you know, if you consider, medical fields elder care, education, the vast majority of those jobs aren't done by a human because the humans want them to be done, by a human So, you know, and again, if you go back to, right? Like a lot of these, you know, if you're talking about elder care or something, it doesn't pay as well as, you know, whatever, other skilled jobs those people might have had, but you've got the escalator coming in underneath you, so that society is getting much richer around you. And, you know, in terms of scale to sort of illustrate that escalator, I, d-d-d anybody listening, right? You can ask yourself, if you could hire people for, you know, from your An hour. How many people would you hire? I mean, if you sat and thought about it, you'd probably hire about twenty people. You'd hire a cook, you'd hire a custom curriculum developer, you'd hire a personal trainer, you'd hire a personal coach, a full time nanny. I don't play board games with my kids enough, and I don't take them to the beach enough. I would really like to have somebody who comes and hangs out with the kids. There's a lot of stuff. If it's a dollar an hour, yes. I don't hire people like that now" }, { "speaker": "peter_st_onge", "time": "21:30", "start": 1290.2, "text": "Humans are resources, and other humans have an unlimited need. Now, some people get upset at that. They say, \"Well, we're gonna become a service economy, and we're just gonna be sitting around babysitting each other's kids.\" And, I mean, that specifically, you know, two hundred years ago, when the Industrial Revolution began, people started coming off the farms, and instead of doing good, honest work making things you can see, now they were doing each other's laundry. Right? They, they were doing precisely that. There was a criticism at the time The time that England risks becoming, a nation that just takes each other's laundry in. And guess what? That, that kind of criticism, you can look at that, that, that exactly marks when Britain started taking over the entire universe, because it was a marker of becoming rich, that, you know, the entire society was getting rich enough. And, you know, it wasn't only rich people taking in clothes, right? It was almost everybody, even poor people, right? So poor people in Victorian- Britain, they didn't have to process their own food, they didn't have to spend three hours, you know, a day, processing things, they went out to restaurants, right? Restaurants are a form of automation. This is something that you do when you're rich, you're outsourcing labor, you're hiring other people to do, you know, service jobs for you, even if you're poor, right? If we look across rich countries today, you know, any poor person who goes to, you know, McDonald's is participating in this. They are acting as an employer Hiring other people because they are rich enough to do it, right? So, you know, the idea that, you know, it's a tragedy if the entire world becomes service based, this is the stuff of wealth. Hong Kong is something like ninety-six percent services at this point. There isn't no farming in Hong Kong, there isn't no manufacturing, and guess what? They do super." }, { "speaker": "stephan", "time": "23:20", "start": 1400.01, "text": "Yeah, so I think it's part of it is changing the way we think about things, and, as you mentioned, even if you are a poor person who doesn't have employees, you Since employing them when you buy things, and that, that person has employed either people or machinery to produce the food or the goods and the services. And so I think then the other question, I guess, you, you've kind of answered it, but I guess the question that some people might have is, will there be enough jobs to replace all the other jobs? But I guess in some sense, there's infinite jobs, right?" }, { "speaker": "peter_st_onge", "time": "23:53", "start": 1433.23, "text": "Yeah, there are infinite jobs. I like the example of Detroit. Okay, so, Detroit was- You know, the city of the future, you can see these videos from the 1950s where people were so excited. It's kind of like how people look at, at, at Dubai now, right? You know, just this exciting sci-fi wonderland, Detroit, and look at it today. And, you know, sort of the standard excuse given is that the car industry automated and so all the jobs went away. But actually, if you look at the Detroit metropolitan area, you know, so Detroit and its suburbs, the jobs didn't go away Anywhere. They moved, they moved to the suburbs, right? And, they, they, they, they didn't show up in Detroit. Now, meanwhile, of course, the jobs, they went to, or, or the, new jobs were formed in San Francisco or Austin or Seattle, right? All these places where they don't have enough housing because too many jobs were created. So the question isn't, you know, the jobs going away, the question is why did the new jobs not come to central Detroit? Right? So it's kind of like a ripple- River, and, you know, the economy is constantly creating new jobs. Those new jobs are coming from customer, customer demand. they change every so often because customers want different things or, you know, because new technologies come along. And as long as you let that river flow, you're gonna be just fine, okay? The river's gonna move, it's gonna meander here and there, no problem. You're gonna have a steady stream of new jobs because humans are valuable. The problem is if the government gets in the way and starts putting barriers down. And governments do this, you know, obsessively, they have to constantly control themselves, and, you know, it's, it's putting in wedges, so, you know, putting taxes, mandating benefits from employers, which, you know, raises the cost of hiring somebody. You know, what you'd ideally like is that the economy works like, you know, TaskRabbit or something, where, you know, or if you've got a fixed, you know, light fixture in your house, and you just go on whatever Craigslist and you find some guy for forty Bucks. that's how you want an economy to work. You want it to be extremely easy to hire. now that Craigslist economy is gray market, which is why it functions, because the government is largely out of the way. And, you know, most governments don't prosecute, handymen on Craigslist. But if they did, then they would whiteball that out too. So, you know, yes, there's a very risk that the jobs won't show up if governments get in the way. And the ways they can get in the way is either, punishing in the first place, or handing people a whole bunch of money to sit on the couch, which I think is gonna bring us to the next topic here." }, { "speaker": "stephan", "time": "26:38", "start": 1598.4, "text": "Right. Well, yeah, we're getting into the whole UBI conversation, but one, one other area I wanted to ask just before we get into that, I think maybe that's-- Now, of course, you and I, and probably many listeners, are maybe more, libertarians or kind of more liberty-friendly, so we would be more critis-- more critical of things like housing regulation, licensing laws, regulations that stop- You going into a new job or a new industry, minimum wage laws, obviously, anyone who's a free market person is normally anti minimum wage laws for obvious reasons. But in this hypothetical economy where you're only earning a dollar an hour, you know, that's gonna be below the minimum wage, and so what we're going to see is maybe a lot of the statist, governmental controls stop the readjustment. So I'm curious if you have any thoughts on that. Is it just that we need to be better at education, education and teaching people why these things are bad? What, what's the answer here?" }, { "speaker": "peter_st_onge", "time": "27:32", "start": 1651.98, "text": "Yeah, I think that's absolutely right. And, and just to clarify, when I say people's wages are gonna go down to a dollar or something like that, I mean in current dollars, right? Of course, y-y-you know, once we get prosperous and the escalator proceeds and whatnot, you know, the, the headline number will probably be something like a hundred dollars an hour to go work at Starbucks, but the point is that today psychologically, in terms of what that will feel like, because we'll be so much richer in the future," }, { "speaker": "peter_st_onge", "time": "28:00", "start": 1680.1, "text": "Right. I think a lot of it is education. You know, we have, we have, I think three groups of people in pretty much every society. We have the people who already agree with us, who, you know, appreciate the power of free markets and capitalism. And then you've got another group which is completely hostile, and they're either hostile because they're brainwashed by the socialist education system or because they're paid, right? Their, their, their job is to implement socialism, of which, I mean, the US, right? When you add together the government, the people who are Promote socialism, you know, these are either activist grants or universities. I mean, you're, you're talking more than ten million people. what's, what's shocking to me is that we have any capitalism at all. We have this army of literally ten million people whose day job is to come in and try to implement socialism. thank God they're lazy and they smoke a lot of, marijuana. But anyway, right. So, you know, we've got that group. They're always going to be hostile. They just, you know, we're not gonna In the middle, and I think that third group is the important part, to address, and, you know, they're legitimately concerned, because, you know, stepping down on the escalator is something that you see very, very easily, right? Somebody has a good factory job, and, you know, now they have to, you know, work at 7-Eleven. Okay? So that's, that's very easy to see. What is a lot harder to see is that, you know, the moving to 7-Eleven is a hallmark of society getting much richer And what, you know, comes, you know, if we sort of look around at the miracles around us that, you know, people can retire at fifty years old, people have two cars, they have, you know, three thousand square foot houses, you know, all, all, all of those miracles happened because millions of men stepped down from factory jobs to seven eleven, but that's not the most obvious connection in the world. so right, I think we have a lot of education to do with that middle group." }, { "speaker": "stephan", "time": "29:55", "start": 1795.11, "text": "Right. I guess it's really conveying that message to the ones who, who Education, facts, and these kinds of things. so let's talk a little bit about UBI. So I know this is something that it's been a conversation for a long time, but every time, it's almost like they're twin, they're twins that come together, right? As soon as you see some advancement in AI, you see advancement, you-- the conversation about UBI, Universal Basic Income, blows up again. So can you give us a bit of an overview? What are your thoughts on UBI? Is it, e-effective, ineffective?" }, { "speaker": "peter_st_onge", "time": "30:30", "start": 1830.14, "text": "So UBI is the idea that you're going to pay people a, you know, basic income to put real numbers on it. In the US, a common proposal is that, let's see, every adult will get a thousand dollars a month, and then every kid's gonna get five hundred dollars. And the idea is that this would replace the current welfare system, and what they're hoping to do, well, what they, what they claim to be doing, is to give sort of a humanistic, you know, quality of life to everybody so that, you know, nobody, is Suffering, not so much money that, you know, that it's extravagant, but, but, you know, basic needs. and they argue, that, you know, this would be beneficial because if, if the wolf isn't at the door, right? If people, you know, don't have the prospect of need facing them, then they claim that people would start a lot more businesses, they would be more entrepreneurial, they would have extra time to, you know, build skills and so on. And then there are, so that's kind of the left argument, and, you know, sort of the cynic would note that, you know, buying votes has always been incredibly effective, you know, bread and circuses, so that's the bread. and then meanwhile, on the conservative side, you've got a fair number of people who've actually, you know, said good things about UBI because they're hoping that UBI would replace the current welfare system. So the current welfare system is structured in a way, it's called a welfare trap. It's generally structured in a way that as you start to make money, the welfare benefits go away. And so, you know, you can get to a situation where you, let's say, you're getting eight hundred dollars a month in welfare benefits, or you could go work a job for forty hours and get, you know, whatever, a thousand dollars, but then your welfare benefits go away. So you're effectively working forty hours for two hundred dollars, which you'd have to be pretty dumb to do that, and so people don't. They're not that dumb. So the idea is that if you put in a UBI that's unconditional, so, you know, even Bill Gates gets his thousand dollars a month, then it has no impact, on that welfare trap. So to deal with that one first, because it's simpler, that's not how it really works. That's not politics. That isn't the world we live in. It would be nice, but it ain't. you know, in fact, whenever anything that looks like a UBI, we have something sort of similar in the US, it's a negative income tax called an EITC, and that was implemented on the exact same argument about thirty years ago, and in that case, nothing else went away. It just went right on top. The, it was hard to explain, as many things in e-- many effective things in economics are, it was hard to explain, and so the activists just f-- ignored it was there, pretended it wasn't even there, and said, \"We haven't raised, you know, welfare spending.\" They, they just kept up the exact same marketing pitch they were doing before. so that's kind of my answer to conservatives, is that I don't know what they're smoking if they think that this is actually gonna replace anything, because it won't. It claim that this is gonna make everybody entrepreneurial, and we have many, many natural examples where people are given free money, right? We have, trust funds, you know, rich kids get free money, we have subsidized college, for example, in Europe, where people don't have to pay any money to go to school. we have retirement and pensions, especially in rich countries where people stop working at, say, sixty-five, and we have a lot of data from all of these natural experiments To answer the question, if you give people a, you know, basic amount of money, do they become more entrepreneurial? And the answer is exactly what you expect. They, they, they play video games and they hang out on the couch. the New York Times has a, Time Survey study that they did, this, this huge thing, and they looked at, you know, how many hours per day do people spend on childcare, on going to work, on, you know, taking a shower, entertainment, hanging out with friends. Anyway, they broke- We broke that down by women, men, older, younger, and one of the things they broke out was unemployed status. So it turns out that people who are unemployed in the United States, typically you get something like half of your former salary, and you can get it for, I think, something like three months. During that period, people spent on average thirty minutes a day looking for work. So, you know, the way that the program was pitched was, you know, the way that unemployment insurance itself was pitched was identical, right? They said, \"Let's keep the wolf away from the door so people can sit down and really carefully consider all of their options and look for the best job available.\" That isn't what happens. People watch Netflix, they play video games, right? So they end up spending, what does that come to? About three hours a week, you know? And this is self-reported, so for anything that's going to be optimistic. So, you know, I think if you put a UBI in, you're gonna get exactly what you expect to get, which is people aren't gonna do anything. We're gonna have a society of trust fund The, you know, people are gonna behave like trust fund babies, there's gonna be a lot of dope being smoked, and then that, that's sort of gonna be our new overlords, these couch sitters, and the rest of us have to get up in the morning, kiss our kids goodbye, because we gotta go work all day to pay for all of the, couch surfers. So, it, it strikes me as disastrous. but also, I think you wanna step back in sort of a philosophical sense and ask, you know, what is a job? Right? So, you know, the concept of a job, right? The, and I don't just mean a formal job, but I mean broadly speaking, like what, what does it mean to earn money? Right? And, I think a useful way to look at it is that it's like doing favors, but for strangers. Okay? So if you do a favor for a friend, like if you buy them a beer, then you can be pretty certain that they're gonna buy you a beer at some point in the future. Okay? So that, that transaction is kind of built Tally of who did what, who owes what. now, you know, I would love if my lawnmower liked me enough to come and mow the lawn for free, right? But, but he doesn't like me that much, okay? So instead, what we have is this arrangement where, he does me a favor, right? He comes and mows my, my lawn, and I do him a favor, which is that I buy him groceries and I pay his electric bill. Now, you know, it'd be a pain in the butt if I went out and wired myself, and so I, I hired people to do that at the electric company, and in fact, I, you know, indirectly hire them by giving him tokens, and I say, \"Tell you what, you go hire the people who can do you the best favor in the world, whatever it is you want done for you, you go do that, I'm just gonna give you the tokens, and you go and let it be.\" So what I'm effectively doing, right? We have the, the electric company and the tokens are, are, you know, sort of these mechanisms Make it happen. But fundamentally, he's doing me a favor, I'm doing him a favor. Alright? If you take, you know, money out of the equation, if you take jobs out of the equation, if the people are just sitting on the couch now So they get favors done from them, right? Some other schmuck got up early in the morning and, you know, maintained the power station so they can go cruise the internet. So everybody else is serving them and doing favors for them. What do they do? They do nothing. Right. So, you know, philosophically, it strikes me as deeply offensive, you know, we're not supposed to have slavery in our societies. you know, rather, you know, the sort of free market idea that, you know, you, you do things for other people, if they like it, then they'll give you little tokens, and you'll trade those tokens to go get people to do favors for you. That strikes me as beautiful, as moral, as something that we don't want to get in the way of, and so something like a UBI, Strikes me as morally catastrophic." }, { "speaker": "stephan", "time": "38:40", "start": 2319.94, "text": "Yeah, so a-and as you've outlined, there are many ways in which it fails. So in one way, it fails because part of the argument is, \"Oh, by having this UBI, we'll get rid of the other welfare system elements,\" but in practice, they don't disappear. by having this UBI, there'll be more entrepreneurs, but in practice, there won't be more-- there won't be more entrepreneurs. They'll just sit around on the couch a-and, you know, just waste time and waste money, and, you know" }, { "speaker": "stephan", "time": "39:08", "start": 2348.12, "text": "amount of, let's say, charity for people who are genuinely disabled or too old to work, or obviously for children who are too young to work. Like obviously, you know, I think there's a role for family and community and char- like private charity, obviously, but I think this idea of government mandated UBI clearly is just, a crazy one and, and not necessary. I think really what would be more effective is obviously dropping the regulations, dropping the minimum wage laws, dropping licensing laws, and just letting people- People work, right? We should encourage them to work. And you know what's also interesting, there are people who, I've heard, you know, maybe they've been saving, you know, even in the whole financial independence groups, there are people who've been saving a lot, and then they, they hit a certain age, they retire, and then they feel like they've got nothing left to do because they didn't find something to retire to, right? That they didn't have like a job to work on. And I think that's also important as well, that really if you're young enough That you find enriching for yourself, but literally just sitting on the beach and, you know, reading books all day or just, you know, it's not, it's not going to be a productive or, enriching life anyway. So there's lots of reasons why, you know, we should be opposing UBI and encouraging people to get out there in the market." }, { "speaker": "peter_st_onge", "time": "40:29", "start": 2428.53, "text": "Yeah, no, you're absolutely right. There's a great line that says, the best part of becoming a millionaire isn't the money, it's who you have To become to be a millionaire. That's absolutely true. The journey is, is glorious. I mean, it's, it's, it's very exciting. yes, there's challenges, but that's, that's the stuff of life. That's, that's the whole gig, man. It's fun. So, right, absolutely. We, we don't wanna discourage people. you know, that's, that's one of the big moves now where they're talking about senior citizens who, you know, continuing to work, even if it's a mundane job, y" }, { "speaker": "peter_st_onge", "time": "41:08", "start": 2468.08, "text": "Much happier doing this. People like to be connected, they like to be useful, they like to do favors for each other, and capitalism automates the doing of favors for other people, which is, it's beautiful, it's, it's, it makes everybody happier in the process." }, { "speaker": "stephan", "time": "41:24", "start": 2483.51, "text": "Back to the show in a moment. As many of you know, I'm a big fan of multi-signature and Unchained Capital can make it easy for you, even if you are a beginner or an intermediate user, and maybe you've never played around with multi-signature before, maybe you've heard about it, but you just haven't been ready to take that next step. 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So there's going to be an interactive community platform here where builders ranging from product managers, designers, and engineers can come together. There'll be events and a mentorship program to fast-track your success or simply a community space to learn Learn something new alongside other Bitcoiners building the future of Bitcoin Layer 2. So as an example, you can see there is Liquid or there is Lightning also. So for those people building on top of core Lightning, there's a range of features there, Liquidity adds, Bolt 12, PeerSwap, Greenlight, all kinds of impressive features and technologies being built out here. So if you're interested, go sign up at buildonl2 dot com. And now back to the show with Peter. I'm curious, is there a cultural element to this also? So for example, I've heard some people say that this exists in different countries around the world, this concept of ageism, or in certain industries, they say, \"Oh, once you're in your fifties, maybe it's hard to get a job in the IT industry or things like this.\" Do you believe maybe there's a cultural element to that also, that we, as a s-society, should, try to take away that ageism stigma so that, let's say Can work as opposed to being shut out, let's say." }, { "speaker": "peter_st_onge", "time": "44:21", "start": 2661.04, "text": "Yeah, and in a sense that relates to the escalator, right? Stepping down the escalator. So, you know, if you're sixty-five in IT, there's a very good chance that whatever languages you know and whatever skills you've learned are no longer relevant. You know, it's like being a TV repairman today. CoolScape can't do much with it. but you can step down, you know, and there are a lot of things that are close enough to that that do And useful for people. And so I think that sort of getting people used to the idea that it's not the end of the world if you step down, right? If you used to be a highly paid IT person and now you're a not so highly paid, I don't know, you're, you're planning out networks or, you know, some other activity related to it or helping nonprofits on their systems, you know, they don't necessarily need, the newest and flashiest, whatever it is, some way to use your skills, that's useful to some degree, you You know, I think people want to appreciate that, the value of stepping down one." }, { "speaker": "stephan", "time": "45:23", "start": 2722.54, "text": "Yeah. So I guess there's also an interesting question, are there any implications on what career or skill we should choose? Or even, let's say you, let's say people, listeners out there have children and they're now deciding, well, what should I encourage my child to learn? Because they're going into this world of AI, and I don't want them to go and learn an obsolete skill." }, { "speaker": "peter_st_onge", "time": "45:43", "start": 2743.43, "text": "Yeah, and that's, we're right at that stage. our kids are twelve Team, you're about to be at that stage. Yeah." }, { "speaker": "stephan", "time": "45:52", "start": 2751.74, "text": "Yeah. Well, I've got a few years left because, you know, my kid won't be old enough to be working for a while, but, no," }, { "speaker": "guest_2", "time": "45:56", "start": 2756.34, "text": "you're gonna get started though. You're gonna, you know, you're gonna start teaching them skills and passions, pretty young, I think. yeah, yeah. But right, yeah. Oh," }, { "speaker": "stephan", "time": "46:04", "start": 2763.97, "text": "to be clear, I don't have a kid yet, and he's coming soon, just for anyone, just for" }, { "speaker": "peter_st_onge", "time": "46:07", "start": 2767.43, "text": "listeners. But yeah," }, { "speaker": "peter_st_onge", "time": "46:18", "start": 2777.74, "text": "most people don't bother, but you, you know, as a conscientious parent, you want to. And, you know, I do think, tell kids to do what humans can do, right? y-you know, a couple examples that I really like. Kevin Kelly has a classic article. He was, the editor of Wired for a long time back when it was Libertarian, called \"A Thousand True Fans,\" right? And the essence of, the article says that you can be as niche as you like and- In fact, it's good to be niche, okay? You should choose something that you really, really love, because you only need one thousand people to love it along with you, and you can make a very solid living at it. And, you know, he was writing in the very early days of the internet, where the idea that you could automate distribution, right? The idea that you could be the most niche weirdo in the world, and there are a million other niche weirdos who exactly see the world the way you do, okay? That hadn't really, been internalized by people yet, and so Kelly's article, did a lot of work towards that. But, you know, I think the advice when you and I were growing up is that you should go learn a useful skill, okay? You should, learn a skill that's in demand. And I think in this, you know, sort of AI net automated society, no, you should learn a skill that you love, okay? Because if you love it, then it, it doesn't matter whether somebody hires you or whether you do the stupid thing on the internet. One of my favorite Prosthetic breasts, okay, and this is before it was cool to be transgender. so he had these prosthetic breasts, or, you know, he was just into them. So he would like write on, on Reddit or something, he would write reviews of, you know, the new brands of, you know, some Japanese company has a new brand, and I don't know, it feels rubbery. Anyway, so he had this huge fan base because there's a lot of other people who are into that. And so the guy does that full time, and he's got like Fort and he's got ten thousand subscribers and, you know, so I guarantee when that kid was grown up and he asked his parents what he should do, they didn't say, \"Do a newsletter about prosthetic breasts.\" Right, but the moral of the story is that no matter what you like, right, there is a massive group of people and they'll either pay you to do it for them, you know, personally, to teach them how to sing, to, you know, whatever, or, you can commoditize it into a product, and do it on the internet. And, you know, another, similar example, there was a guy, he was really into steampunk keyboards, alright? So, you know, he would take keyboards, he'd pull off the Little glowing lights and the whole thing, right? And so he did a couple of those and people really liked them. You know, it was kind of an Etsy type deal, and people started saying, \"Hey, can you build me one?\" And so he was like, \"Well, they take a long time, so I have to charge you like fifteen hundred dollars.\" And they were like, \"Done.\" So like, okay. So he starts building these things, and then he gets more and more people asking, and so, you know, he says, \"No, no, I can't take any more orders.\" And then people are like, \"Well, you know, what if I give you five thousand?\" Okay. You know, same deal. So, you know, again, if, you know, if you're a twelve year old and you say, \"Mom, when I grow up, I wanna make steampunk keyboards,\" that, you know, traditional advice would be, \"No, kid, stick to something practical.\" but in fact, that's not the case. you know, whatever you're into, whatever it is that you're truly passionate about, do it. Be the best in the world at it, or anyway, be-- you don't have to be the best in" }, { "speaker": "peter_st_onge", "time": "49:56", "start": 2996.03, "text": "Pretty good at it, and if you aren't, it doesn't matter what it is, it could be the weirdest thing you can possibly-- it could be, you know, looking at, rainwater culverts. This is practical engineering. He's got a business built on talking about that stuff. Anything you want, and not only will you make a living on it in this future, right? In this future where the human skills are worth more, okay, where, you know, cognitive personality, knowledge, all those things, but you're gonna enjoy life a whole lot more." }, { "speaker": "stephan", "time": "50:26", "start": 3026.17, "text": "Right. And I think there is also something to be said about niching down or potentially combining two different areas. So even, even if you're not the best in the world at one particular thing, that it's kind of like, I think, Scott Adams popularized this idea Idea of being good at only in the top twenty percentile of drawing and top twenty percentile for business, but combining those and doing doublet, it's a similar kind of idea, right? That you could be the best guy who does this, this and that, this in this combination, and so long as there are enough other people out there who like that too and are willing to pay for your newsletter or hire you or whatever, then there's, there's a market there and there's an opportunity there. So it's kind of about Finding the right way to do that." }, { "speaker": "peter_st_onge", "time": "51:11", "start": 3070.81, "text": "Great point, yeah." }, { "speaker": "stephan", "time": "51:12", "start": 3072.22, "text": "Yeah, and one other area with ChatGPT is people debate about this question about whether it has a political bias. And does that, because a lot of people are, in some sense, offloading their thinking or maybe in the future, right? So people used to make the same comment about Google. They used to say, \"Well, if you don't know how to calculate it for yourself or figure it out for yourself, and you only rely on Google, are we going to lose that knowledge? \" And is there potentially a similar concern with ChatGPT and the AI and the answers that maybe if there are a bunch of woke people who are coding the thing, that their bias inevitably seeps out and people will see that as the truth, but really it's not necessarily the truth?" }, { "speaker": "peter_st_onge", "time": "51:53", "start": 3113.1, "text": "Yeah, I think that definitely exists. We've seen that with ChatGPT, you know, people play various tests that illustrate that it is extremely, biased towards the left. I think there are two reasons for that. One of them may be that That, the employees are left wing, I think probably the, the, more likely explanation is that, you know, sort of the left has instituted this very threatening infrastructure for anybody who, dissents from their opinions, right? So, you know, in this case, Chat, ChatGPT is a company that's trying to go public, they're trying to reach out to investors or be acquired, that's going to be the case, you know, really across most of these AI, efforts, and I don't think that they're going Necessarily because they believe in it. I mean, engineers are sort of, you know, famously the most libertarian people out there, but, you know, they have to do what they have to do, right? Otherwise, you know, you get legal threats, you get regulatory threats, from government, you get threats from activists who, if governments won't prosecute, you know, say when the activists burn down your offices, then effectively the government's done it, right? I mean, you know, this is done in Venezuela, for example, where-- no, the government doesn't beat up the Enterprising citizens beat up the opposition, and then, you know, the government, try as it might, can't, arrest the guys. So, you know, you kind of have this hand in glove, thuggish, behavior from the left. But either way, whatever the cause of it, right, the end result is that, you are getting a lot of bias. I think in a forum or in a sense, what you get out of this Is, or anyway, what I worried about early on with AI is that, you know, academia has a lot of prestige, I think, left over from when it used to be neutral, and since it got captured by the left and says crazy things now, it's still kinda running on that residual, prestige from the old days. So, you know, it kinda has this halo. So, you know, you get these ridiculous studies that come out of, academia nowadays, and a lot of people in the middle- They believe it because they don't, they don't understand that it's been, not all of academia, but big parts are now rotten. And so my concern with AI was that we would see something similar where you would have this magical AI that would just seem to know everything, and people wouldn't realize there was bias in it. So I've actually been very, very pleased with how GPT handled the bias because it's so fricking obvious, and, you know, everybody knows now. anyway, at least the two thirds, okay? The third in the middle and the third who was al-w already skeptical, they understand that, you know, AI, no matter how amazing it is, you have to be very, very careful about what program this thing. I think at the same time, I'm very optimistic because of COVID. and the, you know, the censorship and the thought control that was imposed, during the COVID, events. And I think that society at large has a much better immune system now against bias. Okay? So, you know, ten years ago, if you complained about bias in academia, people would figure that you were sour grapes or that, you know, you're a crazy person, you're a tin foil hat. now, you know, you can talk about these things and most people are very- Very, very receptive, to that argument because they have shown their cards, so obviously. So I'm, I'm paradoxically happy with, you know, the bias that's come along, not for good reasons, but, you know, sort of a gallows celebration, I guess. and then the question is, is it gonna be temporary? And, you know, the beauty of the market is that the market is always trying to serve the people. you know, capitalism routes around censorship, because capitalism is constantly trying to make the people happy Happy, wise, so it'll give them tokens so they can get favors. Anyway, so I think that there's a strong tendency, you know, ninety-five percent of the users of AI want an unbiased, engine. Almost nobody is a woke activist, most people are just intimidated and don't say anything about it, but almost the entire market wants, you know, unbiased. I think what's happening in AI with things like ChatGPT, you know, there are many other competitors to ChatGPT which are comparable or better. Better quality. I mean, there, there, there's a lot of players in this field, and, you know, I think what happens over time is that, you know, somebody, you know, it's kind of the Fox News phenomenon where, you know, the media is all left wing, and then some guy gets the genius idea to appeal to the rest of the people, then he grabs all the market share. And so I think we see a similar, we will sooner or later see something similar. In a sense, that's what's happening with Elon with Twitter, right? Smaller, smaller percent of humanity. So he's gonna jump on the outside and say, \"Okay, the other ninety-eight percent, come on over.\" So I think that we'll see that, in, in AI programming itself, either in isolation as an individual product or maybe even integrated into something like Twitter, you know, or, or some other billionaire who is interested in reaching out to all of the customers as opposed to just the politically approved customers." }, { "speaker": "stephan", "time": "57:13", "start": 3432.81, "text": "Of course. Yeah. So essentially the answer is that there's competition and that, the- The more one side tries to censor or tip the scales in their own favor, well, that's going to motivate the other side, and then the people who are, let's call them moderates, or people who aren't really that bothered either way, they want an unbiased answer, they don't want this kind of crazy lefty woke thing. So that's interesting as well. I think it's also interesting to point out that there are elements of, let's call it, AI that are being used in our day-to-day things today, that even if you are using, let's say, Gmail That some of these things are already being, let's call it, AI assisted or computer programming assisted. So, you know, I think maybe some of it is a marketing play as well that people are, you know, like it's the same kind of thing that I know even, analytics, data science, you know, people used to call that business information or like, you know, they've just kind of gone by different names, and the marketing is just kind of a new, like, a new lick of paint on the same kind of idea that, oh, okay, it was just" }, { "speaker": "peter_st_onge", "time": "58:19", "start": 3498.74, "text": "Yeah, yeah, you're absolutely right. You know, 7-Eleven in Japan, every time it rains, 7-Eleven has umbrellas for sale. Like they appear out of nowhere. It's like artificial intelligence. It's incredible. Okay, why? Because they have a database and they have statistics and they correlate the two of them, right? So, you know, I mean, in a sense, whatever AI does, quote unquote, it's really just Statistics, right? You know, it's, it's, it's got an interesting, you know, it's, it's Bayesian, so it learns, and, you know, it's got cool little models in it, but, you know, in terms of what it does to the world, it's statistics. What did statistics do to the world? You know, mostly good things, some bad things, and, you, you know, getting into the question of whether, you know, is it gonna make us smarter or dumber? you know, this is one of the grand People smart, right? So, you know, you could watch a history program on the television or the radio, you know, nowadays you can look up everything on Google, you know, you can know every fact ever known to humanity at the touch of a finger. And, you know, early in the internet, people were really excited about that. They were like, \"Imagine having all of the world's encyclopedias at your fingertips. Imagine how a child's mind would soar.\" So, you know, spoiler alert, that didn't happen. And, you know, in, in, in fact, we can quantify this. So, I, I had a paper years ago where I looked at, you have the, Flesch-Kincaid score, okay, where you can take, a piece of writing and you can assess how complicated it is, like the reading level" }, { "speaker": "stephan", "time": "59:53", "start": 3592.77, "text": "and stuff. Yeah," }, { "speaker": "peter_st_onge", "time": "59:53", "start": 3593.45, "text": "right, the reading level. Yeah, right, the reading level. And so I did that for, State of the Union speeches. I I went back and looked at the speeches over the years, all right? And, you know, back in nineteen hundred, so this was when the radio was still not really widely used, you know, most people used newspapers. People complained back then that newspapers were making everybody dumb, but anyway. All right, so this is nineteen hundred, and, McKinley's speech, thirteen point six, okay? In other words, his inaugural speech was aimed effectively at college sophomores today. Alright. And keep in mind, these were speeches that were aiming at the common man, okay? They weren't aiming at, you know, the, the university faculty. They weren't trying to be impressive. They were trying to do what politicians always try to do, which is to appear like one of you, right? and then you had Roosevelt. Roosevelt was probably, Teddy Roosevelt. He was probably the closest version to Trump that we had before the Trump. you know, he was a populist. You know, he was, people made fun of him, for being stupid. his was fourteen point one, maybe compensation, who knows? Alright, so that was nineteen hundred, nineteen o four. Now, fast forward, Barack Obama, just a couple years ago, eight point three. Like, what happened? Right? We went from college, middle college level Level to, you know, grade school. Trump eight, Joe Biden four point nine. And we, we-- So all" }, { "speaker": "stephan", "time": "01:01:24", "start": 3684.2, "text": "of those," }, { "speaker": "peter_st_onge", "time": "01:01:26", "start": 3686.12, "text": "those speeches are aimed at who the, you know, top Political marketers in the United States, which is probably a more or less the best in the world in terms of knowing how to use statistics, this is what those people are guessing the median voter is, right? So in a hundred year period, it went from thirteen point five, in other words, the roughly the average American having a college degree, okay, we went from that to fifth grade during the period that we had all of the encyclopedias in the world at your fingertips. So So, you know, this is kind of the concern is that on, the people who make use of AI, the people who, you know, getting back to our early argument, how do you raise a kid or, or how do you develop your own skills? I think the people who are passionate about what they do, the people who love what they do, they're going to take advantage of this AI and they're going to be astoundingly, breathtakingly brilliant. On the other hand, you're gonna have people who don't like what they do, they get up in the morning They're not, you know, they're not interested in, you know, because they're not doing it for a living, you know, they're just going on the internet, not, not to learn anything useful, but just to be entertained. I think those people will continue, they won't bump along at four point nine, AI might bring them down to three point nine, break the four mark So, you know, that's my guess is that some of us get a lot smarter, most of us get, you know, paradoxically dumber. You have this bimodal distribution, which by the way, I think has also been the case with the internet, right? You've got a lot, you know, in, in Austrian economics, for example, there are a ton of people who discovered Austrian economics because they had access to the internet. And so, you know, you've got- A hundred times larger number of people who go back and read, you know, economics books from the nineteenth century. At the same time, the average American, you know, you see man in the street interviews where, you know, people ask like, you know, I don't know, how many, can you name, you know, three countries? And they're like, America, Texas, and New York. And I mean, it's, it's, it's rough, you know, people are very, very stupid for the most part." }, { "speaker": "stephan", "time": "01:03:37", "start": 3817.17, "text": "And you're right, I mean, I, I found Austrian economics because of the internet. I, I probably wouldn't have, I might not have even found it if, if I was just growing up, I may never have gone on this pathway that I'm on now. So it's interesting to, to see that. I think maybe the-- there's one other, I guess, philosophical question, and I know Austrians have a, you know, generally have an answer on this, is we sort of go towards this idea of, is there such a thing as post-scarcity, or is just-- is that just-- is that idea just basically impossible given what we really know?" }, { "speaker": "peter_st_onge", "time": "01:04:14", "start": 3854.2, "text": "Yeah, I mean, I think, you know, we always adjust, people get used to it, you know, so the, you know, quality of life in nineteen hundred, to somebody in the Stone Age, they would have been mystified why anybody goes to work, why don't you just, you know, sit back and relax? if you are living in a, abandoned trailer in San Francisco and you're fishing garbage out of the dumpster, you are living the high life, man. Compared to ninety-nine point nine percent of the human experience, you are an absolute god. You have food that's delicious and isn't rotten. no animal's gonna kill you, I mean, rarely. On the way to go get the, food, you know, you, you can go to the public library and use the internet. Your quality of life is Unimaginable to Stone Age man, and you work zero for it, right? Astounding. Yet we look at those people, you know, we look at somebody living in a trailer in Seattle, and we don't say, \"Oh, man, you know, that's it. We have, we have achieved everything,\" right? Because it is human nature. We, we celebrate the challenge. We always want to, seek out, you know, new things. I, I, I think it's human nature, I mean, it's sort of built into us, that as soon as we To, you know, the top of the mountain, we go look for another mountain peak. Now, this is why, you know, getting to our earlier discussion, I think this is why it's important to enjoy the ride, because if you're only focused on the goal, the-- you're gonna enjoy that for like long enough to have one beer, and then you're gonna create the next goal. So, you know, don't live for that moment, my god, you don't, you know, what a frustrating, way to live. But right. So, you know, I think" }, { "speaker": "peter_st_onge", "time": "01:05:59", "start": 3959.7, "text": "So a lot of people do sort of, you know, become livestock and just kind of wait for it to happen. personally, you know, I think that's a tragedy." }, { "speaker": "stephan", "time": "01:06:08", "start": 3968.57, "text": "Yeah, I think that's a really good way to put it. It's just fundamentally people always want more, and they'll find ways to spend-- if they're given more productive or more purchasing power, they'll find ways to use it, right? Because as, as, in, in some sense, we're naturally lazy, right? So in some ways we're naturally lazy, but in other ways" }, { "speaker": "stephan", "time": "01:06:29", "start": 3989.68, "text": "Eight more. So it's kind of an interesting thing that we, at times, embody both of those things, right? There are times where we just wanna sit back and relax, and other times where, no, I really wanna get out there and do something and produce something and make something valuable, so I think that kind of leaves a few interesting ideas. I think one other area, and maybe a little bit away from the AI stuff, is just more about, you know, this question of printing a one trillion dollar coin or this kind of idea of, you know, can we just, you know, and I think this also came into maybe the UBI conversation a little bit because people would joke about, and some people aren't joking, about the idea of just printing, just print the coin or just mint the coin. I'm curious how you would, critique that idea of just minting the one trillion dollar coin or even theoretically thirty-one one trillion dollar coins." }, { "speaker": "peter_st_onge", "time": "01:07:22", "start": 4042.28, "text": "Yeah, so the trillion dollar coin, you know, is a uniquely American thing because we have this, debt limit where, So Congress gets to decide to spend, you know, a bunch of money, but then they also have to make a separate decision to raise the debt limit. And, you know, so it, it, it's sort of like if your boss told you to cater a lunch for fifty people, make it a nice one, and here's five dollars to do it with. It, it, it can't be done, right? And, now of course, I would say, okay, well then just spend the five bucks, and, you know, the left would say, okay, well, you give me an unlimited check, and so that's what the debate is. But, you know, this is part of sort of a larger debate about MMT, about inflationism, about the idea that government can create prosperity by just, you know, printing more money, spending more money. And, you know, that's, it's-- I think it's always, or it holds so much appeal because the promoters of it have been, very, very smart in capturing the institution Right? They started with the education system. They used, you know, almost like an alien spawning, you know, they, they found a host and then they infected that host and then all these millions of little alien baby eggs came streaming out. and, you know, the, the people who graduated, you know, I, I taught for years in an MBA program and, I mean, they are astoundingly left wing. I would constantly try to inject, you know, the other side of things for the students And I, it, it was inevitably the first time they'd ever heard this before. and, you know, those MBA programs graduate communists who then go and work on Wall Street. What do they do on Wall Street? They allocate capital. Who did they do that to? Mark Zuckerberg. Okay. So the-- I mean, just the left has been brilliant in propagating, their ideology that, you know, state power is the way to be rich. Now, thank goodness we have, you know, a lot of historical examples, you know, so the Soviet Union, for example, the state ran everything. the, the Soviet Union very assiduously put PhDs and very, very smart people, people with huge brains, in charge of the economy You know, so Gosplan, the Ministry of Planning and all this, they absolutely had brilliant people working there. You know, they were very careful to, to choose the best and the brightest of, you know, Soviet, citizenry, and yet they failed spectacularly because it can't be done. It's not a matter of intelligence. So, you know, this is sort of the ongoing battle is on the one hand, you've got the planners, versus, you know, those of us who believe in liberty. the planners are always wrong, but the planners are They fundamentally can go to hold a tax money, right, which is extorted out of the people, and then they can use that tax money to promote their ideology, right? Partly, you know, they can indoctrinate people, and then partly they can pay people to join the party. so, you know, it's, it's, it's sort of permanently easy for the left to build this army. now, you know, in terms of just sort of taking the actual, claim on MMT, right? So, you know, strictly speaking, it says that Budget constraints if the government prints its own money, okay? Because, you know, the government can print as much as it wants and it can never go bankrupt because, it can always just print more money. Right? And of course, you know, this is age-old, it was called inflationism. the idea was, you know, you would just print endless amounts of money. this would sort of trick the population into thinking that they're rich. If they think they're rich, they'll spend more. If they spend more, then the other people get rich and they do the same thing. So you, you, you wanna kind of keep this, deception going, and it becomes very, very important not to stop it under this hypothesis. Because if you stop it, then everybody sort of wakes up like out of a spell and realizes, you, you know, that, that it's all fake. And so, you know, sort of this is what the modern central banking system is, is built on, is, is, is, you know, essentially creating an illusion of prosperity and then keep it going, keep it going. If it ever falters, because reality intrudes, then, you know, the solution is to flush out another couple of trillion dollars. Now, because our- System, I think today, in historically terms, in historical terms, the world economy is very, very productive, right? Compared to most of human history. Most of human history, we didn't do anything. We were, you know, if you're in one thousand Britain, year one thousand, and you show up in year fifteen hundred Britain, it's, it's pretty much the same deal. fashion changed and not much else. So in modern, the modern world, thanks to, you know, a lot of work done, in the classical age, a lot of Economists, we're actually relatively rich, right? We have relative, free markets, we have relative economic stability, and so be- that generates a certain surplus, like, you know, a certain amount of wealth, trillions of dollars a year, and then in, in today's world, that sort of inflationary, you know, treadmill is absorbing a lot of that. Okay? So we don't see the full effects of it. We see, you know, two percent inflation, but we're not seeing the full amount That they're capturing because the economy is still doing pretty well. We're sort of running on the fumes of our, forefathers who had, such good foresight. and then, you know, of course, the question becomes, you know, they're sort of killing it gradually. We can actually see this in numbers, you know, the number of aggregate regulations that come out of Washington, European Union seems to be going much faster. so if they kind of kill the underlying productivity, then people start to see the full extent of the hustle. They start to see how much governments are confiscating even today to keep that treadmill going. At that point, we can imagine that people might, you know, rebel against it, and actually start voting, you know, basically stop voting to just let it keep running, and do something about it." }, { "speaker": "stephan", "time": "01:13:42", "start": 4422.93, "text": "Yeah. So I think there's a lot of ways in which the world, whether it's by intellectual reasons or just necessity, they're gonna go towards printing, right? That's just the likely outcome, right? It's just the easiest way from their point of view. Now, of course, We don't endorse that. The, you know, stopping the printing, having free markets, endo-endorsing deflation would be better, of course, but we know that's not gonna happen, like in terms of what's realistic. And we're seeing this even in terms of, we saw this comment, there was some, there was a news article just recently talking about Britcoin, which is the UK central bank digital currency, and they were basically saying that you won't even be allowed to, quote unquote, hoard Britcoin. Now, I was commenting just now saying" }, { "speaker": "stephan", "time": "01:14:25", "start": 4465.12, "text": "You disrupt your enemy when he's making a mistake. So, you know, maybe we just say, \"Look, okay, you guys, you're not allowed to hoard the CBDC, \"and guess what? It's gonna drive all of these people into Bitcoin. So, that's how I'm seeing it. I'm curious if you have any initial reactions on it." }, { "speaker": "peter_st_onge", "time": "01:14:39", "start": 4479.79, "text": "Yeah, I think you're absolutely right. The, it, you know, one of the ironies in Bitcoin is that there's a lot of bad things that might happen in the world, like hyperinflation or Gest" }, { "speaker": "peter_st_onge", "time": "01:14:55", "start": 4495.16, "text": "A lot of collateral damage, but the fact of the matter is, if they do this, they are shooting themselves in the foot. You know, it pushes ever more people, into, you know, into our camp, into people who are trying to build, a decentralized world that doesn't depend on government largesse. so, I mean, in a sense, the acceleration and the accelerationist in me wants to say, \"You know what, guys, go for it, put your stupid coin out.\" you know, I wanna communicate to British people that, y-you know I usually buy this thing, you know, try to park your, assets in something else. But yeah, I mean, governments, you know, the, the logic of socialism is to chase power, having a, you know, all of the money centralized in a database that However they structure it on top is gonna be controlled by, by the, government in power. that, that is, it's obviously attractive to them, it will always be. y-y-you know, you get to own nothing and be happy, is their plan, and of course, fortunately, you don't have to do that, right? You can own other assets such as Bitcoin, that you can escape that." }, { "speaker": "stephan", "time": "01:16:02", "start": 4562.87, "text": "Yeah. So I think it'll be interesting to see where that goes. We've probably got to wrap up, but I guess we can maybe just The discussion has been around this idea of ChatGPT and other AIs, will they make us obsolete or will we be entering into a world where we are so much more productive? And I think the answer is, yeah, we will be so much more productive and it will be a good thing. Yes, it will be unequal, but it will be so much more prosperous and we might live better lives on the whole. But I think the key analogy that you were making was this idea of the escalator, right? So if we think of it like we're on this escalator and it's continually going up Capital accumulation, but periodically we have to learn, okay, you know what, I need to take a step down because maybe this job got obsoleted, this industry is changing. We can't just try to retain that industry by pure fiat because that's just gonna stop the whole escalator, and then we don't wanna turn the escalator into a set of stairs. We want, we wanna be on the escalator, let's keep the escalator going. So I think that's probably how I would sum it up, but yeah, any closing thoughts from your side, and of course, where" }, { "speaker": "peter_st_onge", "time": "01:17:10", "start": 4630.75, "text": "The problem, this is, this is one of the classic examples, of AI. It, it, Kurt Vonnegut called it the gray goo problem. but the idea would be, let's say that you have an AI and you tell it that, its number one goal is to maximize paperclip production, right? And so an AI would of course seek to decompose all living things for the carbon so it can make more paperclips, so it would kill all humans, right? And, you know, there's, there's variations on this, you know To make sure that no human murders another human, then of course, the fastest way to do that is to go ahead and, you know, asphyxiate all the humans so that they can't murder each other. and, you know, we're, we, we saw a nice example the other day with, ChatGPT. Somebody made it choose between saying a racial slur and disarming a nuclear bomb in New York. And the AI heroically, it told the engineer to heroically sacrifice himself by not saying the racial slur. And, and, and then the bomb blew up, and the AI's reaction, or, you know, ChatGPT's reaction was, people will remember his, they will honor his memory because he avoided the racial slur. And so, you know, the moral of the story, I think, is that however an AI is designed, it is potentially dangerous Because the programmers can put arbitrary things in there that don't necessarily occur to them, you know? So, you've got the story of the genie with the three wishes, but when you give it the wish, he twists every one so that it hurts you. And, you know, I think that's a black mirror episode waiting to happen, that, you know, AI, maybe not intentionally, but, you know, it's, it's fiendishly difficult to assess out what all of the incentives are It's difficult now dealing with humans, which, you know, we know and we're used to. I mean, that's, that's a big part of what we try doing economics, and we never do it perfectly. so, you know, I, I do think things like that are gonna come along the way, you know, if they're introducing things like, you know, assign, nuking a city minus eighty seven, but assign a racial slur minus a hundred because otherwise we're gonna, you know, we're gonna get in trouble and get canceled on the internet" }, { "speaker": "peter_st_onge", "time": "01:19:31", "start": 4771.18, "text": "Things because, the programmers live in an actual society or maybe they themselves have preferences. so, but, you know, like we said earlier, I'm really actually pleasantly surprised how all this stuff has come in, that it's, it's sort of come in on baby steps so that people are actually seeing all this, it's part of the public conversation. You know, ten years ago, talking about the paperclip problem or, you know, I mean, that, that was, you know, there were like a couple of nerdy singulatarians who Out at Burning Man and do that, now, it's really reaching public consciousness. So I do think game's on. You know, AI has, has joined the chat at this point. you know, it's gonna be joining, you know, the automation with, you know, with machines has been happening forever. there, there's gonna be enormous, you know, political back and forth, because the opportunities involved on all sides, whether it's promoting UBI, whether it's, you know, the left trying to institutionalize, And, you know, the non-left constantly trying to escape from it in this cat-and-mouse game. so, I mean, honestly, I think it's gonna be a lot of fun at this point. And, you know, I'm throughout comforted that we have Bitcoin, that we have the Bitcoin community, you know, we have brilliant-- and, and I, I do mean that, we have, you know, absolutely brilliant, Maxis who are, you know, extremely committed. We have an, an extremely strong, intellectual immune system. I'm very happy that we get to, you know, enjoy this ride, with the gang." }, { "speaker": "stephan", "time": "01:21:08", "start": 4868.96, "text": "Fantastic. And Peter, where can people find you online?" }, { "speaker": "peter_st_onge", "time": "01:21:11", "start": 4871.88, "text": "I'm on Twitter. Everybody should be on Twitter nowadays at, at Prof St Onge. I have an Oster account, but I'm waiting for critical mass over there. And then, also, you know, visit me at Heritage. I'm at Heritage Foundation. We have some good people over there as well." }, { "speaker": "stephan", "time": "01:21:24", "start": 4884.69, "text": "Fantastic. Thank you, Peter. It was really, great to chat with you, as always." }, { "speaker": "guest_2", "time": "01:21:29", "start": 4889.14, "text": "Yeah, it's always great to see you, Stephan." }, { "speaker": "stephan", "time": "01:21:32", "start": 4892.44, "text": "Show notes are available at stephanlivera dot com slash four five eight. Share the show if you enjoyed the discussion, and I'll see you in the citadels." } ] }