George Gilder - Life After Google: How The Singularity & Cryptocurrency Will Redefine Humanity

Full transcript: George Gilder on London Real

0:00 Brian Rose: This is London Real. I am Brian Rose. My guest today is George Gilder. George Gilder is one of the smartest men I have ever met. For the past four decades he’s been talking about economics and political policy. He wrote speeches for President Nixon, and Ronald Reagan quoted his book Wealth and Poverty more than any single source.

And now he’s back with a brand new book called Life After Google that’s talking about the future, talking about 5G, the singularity and, more importantly, cryptocurrency and what it means for all of us. I’m telling you, sitting down with George was like being in a time machine and really accessing so much information and just a wealth of knowledge. I know you’re going to enjoy this incredible episode with George Gilder.

This is London Real. I am Brian Rose. My guest today is George Gilder, the American investor, writer, economist and techno-utopian advocate. For the past four decades you’ve written extensively about technology’s key creative role in economic growth and prosperity. Your 1981 bestselling book Wealth and Poverty was the most quoted book by Ronald Reagan and defined the economic revolution of his presidency.

You’re a Forbes magazine contributing editor, and you’ve written for The Economist, the Harvard Business Review and The Wall Street Journal. Your latest book, Life After Google, describes a future internet armed with a unique cryptocurrency transaction layer that will provide a new standard for global money. George, welcome to London Real.

George Gilder: Great to be here.

4:39 Brian Rose: It’s great to have you here. Before we get started, George, I wanted to ask you about London. What does this city mean to you? What’s it like when you come here? Do you remember the first time you came here, and how is it different from the States?

George Gilder: Well, I love London. Isaac Newton was the master of the Mint in London, and lots of people focus on his transformation of physics, but I think his greatest contribution historically was the gold standard. Isaac Newton engineered the gold standard. Most histories of Newton also pretend that the end of his life was sort of wasted, that he spent it doing alchemy. But what he was doing was trying to hack gold.

He thought if gold could be demonstrated to be unhackable, then it could be the foundation for a global money, and it could underlie the British Empire. So what most people thought was a waste of time by Newton was actually critical to 200 years of the greatest prosperity in the history of the human race. Not only did he provide the physics that underlay the industrial revolution, he also provided the monetary structure.

I think today we’re in a similar Newtonian moment, where blockchain can not only provide the basis for a secure internet for the first time, but also the basis for unhackable money around the world. Now we have a double hacking crisis. The internet’s hacked billions of times, and money is being hacked constantly by central bankers around the world. So I’m glad to be in London for a new Newtonian moment.

Brian Rose: I love it. I’ve seen where he’s buried in Westminster Abbey, and I never thought of him as an economist as well, but it’s great that you say that, and maybe we can get back to the gold standard at some point. Just to give people some context, if they don’t know already, and I’m sure you’ve heard this quote, but in your book Life After Television, which was published over 25 years ago, you said this…

George Gilder: You want me to do it?

Brian Rose: Yeah, go ahead.

7:02 George Gilder: “The computer of the future will be as portable as your watch, as personal as your wallet. It’ll recognise speech, it’ll navigate streets, it will collect your news and your mail. It just might not do Windows. It’ll do doors: open doors to your future.” Steve Jobs took this book and distributed it to his colleagues, I learned recently. And Ari Emanuel read it, and the current Vanity Fair calls me the original gangster futurist of Hollywood who inspired Ari Emanuel to become the world’s super agent. So Life After Television was an important book, and Life After Google I hope will be equally important.

Brian Rose: That’s incredible, and the more I learn about you, the more I’m blown away by how your mind works to see these things. How do you see something like that way before it even happens?

George Gilder: Because I studied the microchip. It was really an insight that came from my decision after writing Wealth and Poverty. It sold millions of copies around the world; it was the number one book in France for six months. It was really a global bestseller, and it captivated the Reagan cabinet and Ronald Reagan himself. And I thought I’d done economics, and now I was going to do technology.

I decided that the most important event in the world was the creation of the integrated circuit. It just seemed to me that technology had moved from applying forces to material entities from the outside, pushing and pulling materials, to the internal manipulation of matter, and that this opened horizons of new technology that were really unlimited. The microchip summed it up, and so I wrote a book about the microchip.

Once you really understood the microchip, you could see that it had really no obvious limits, that it would transform all technologies, and certainly anything that could be created in a giant computer could also be created in a handheld device or a watch-size device. So that was the source of that particular prediction. But I have had intuitions that I just don’t know the real source of.

I wrote a book called Sexual Suicide in 1970-something and predicted that the real crisis of the world would be depopulation rather than overpopulation. That’s probably my best prophecy ever. Nobody expected it. Everybody was predicting a population bomb, a disaster of overpopulation. But the fact is the real threat to the human race is depopulation resulting from sexual suicide. So this was a pretty good call back in the 1960s and ’70s.

And today I’m doing time prices, which really transform economics, and I’m really excited by the discovery that money is time. Maybe I could use some water.

Brian Rose: Yeah, there’s some right there. So from what I understand of your time theory, you don’t look at prices in terms of money, but in the amount of time we sacrifice in order to acquire those goods.

George Gilder: That’s right.

Brian Rose: So it’s a completely different perspective.

George Gilder: The real price, the true price, of anything is the number of hours of work you have to expend to buy it. That measure obviates all the complexities of economic analysis summed up in consumer price indices, GDP deflators and purchasing power parities. All the ways that economists try to guess how different currencies relate to one another are transcended by the simple measure of how many hours you have to spend in order to acquire the money to buy anything.

Hours, minutes and seconds are a universal measuring stick, which can be applied to all problems of valuation. These are the true prices. William Nordhaus sort of half got this idea. He really got the idea and calls time prices the true prices, but then he didn’t quite understand the full implications.

Brian Rose: Based on that framework, how can you look at the economy today versus one of, say, 20 years ago? How are we doing?

George Gilder: We’re doing fabulously better than economists believe. Economists are plunged deep into the dismal science again. They think we’re running out of stuff, they think the climate is collapsing, they think economies are stagnating, that innovation is slowing. All these beliefs, that interest rates are zero or below, are disproven by the use of true prices, which are essentially calculated from nominal GDP, whatever it consists of, and the nominal average wage. You divide one into the other and you get a time price in hours, minutes and seconds.

They define the real values in the economy, and time prices show that we’re in an era of tremendous technological and economic growth and prosperity. We have psychological problems, we have philosophical problems, we have terrible political perplexities, but economic growth is in a great boom, measured by the fact that the average worker every year has to spend less and less time to buy the goods and services that sustain his life. Thus he’s released into doing all sorts of new inventive pursuits and opportunities.

I came from China a while back. I’ve been in China a lot because Life After Google was named the best social science book in China and was a bestseller there, so I’ve been over there on tour. Everybody believes that the Chinese communists have been exaggerating the rate of economic growth in China. But when you estimate it by time prices, the amount of time an average Chinese person has to spend to buy anything, Chinese growth has been drastically faster than the communist government claims. China has been really an economic miracle, unprecedented, ever since its free zone strategy was adopted by Deng Xiaoping in the 1980s.

16:23 Brian Rose: Well, let’s get into the book, because there’s fascinating stuff here, and you go pretty deep and pretty hard on Google. I’m guessing you’re not going to be invited to Talks at Google anytime soon.

George Gilder: Well, I keep getting told I’m going to be invited to Talks at Google. They might actually, but they haven’t done it.

Brian Rose: They won’t do it once people find out why. Ray Kurzweil did, however, invite you.

George Gilder: Ray Kurzweil? I invited Ray to speak at my conference, and he gave a wonderful speech at my conference, COSM, in Seattle.

Brian Rose: In Life After Google you call it Silicon Valley’s nervous breakdown, and you say that Google is not just a company, it’s a system of the world. I think most people would agree it’s ubiquitous, but they wouldn’t see it the same way you do. George, can you explain the premise of this?

George Gilder: Well, I call it Google Marxism. When you think about it, what was the real mistake Marx made, the profound error of Marxism? It was to believe that the industrial revolution was a kind of final human achievement: that after the industrial revolution the problem of abundance had been solved, production was consummated, and the only issue politically was how to distribute the existing abundance. In other words, he believed that the industrial revolution, all those looms and factories and railroads and all the inventions of that era, were a kind of final thing, an eschaton.

Google’s making the same error. Silicon Valley is devoted to a similar Marxist mistake. It believes that machine learning, artificial intelligence, robotics, search engines, biotech, all these breakthroughs of this era, are a kind of final thing, and that they’re going to create machines that usurp human minds and transcend human minds. All of us are going to be able to retire to tropical beaches while Brin and Page and the Google people fly off with Elon Musk to nearby planets, and machine learning and artificial intelligence inseminate the universe with ever more powerful machines that leave human beings far behind.

I think this is a delusional belief, and it actually has consequences. It results in real errors of policy and errors of business strategy.

20:03 Brian Rose: Is this because there’s a big echo chamber in the Valley, where people start to drink their own Kool-Aid and believe they are the masters of the universe, create their own destiny and drag us all along for the ride? Is that what’s happening there?

George Gilder: I think it is a kind of delusional religion. It really derives from the bottom-up theory that human beings are merely figments of evolution, the product of a purely random and meaningless process, and that engineers can reproduce far better minds than this random process that’s believed to be the source of human capabilities. So they imagine they can design a better mind.

I just think this is a delusional belief, and it results in a whole industry focusing on replacing human beings rather than enhancing human beings. I think that’s a losing strategy. Human beings have got to support this Silicon Valley venture, and if it’s not enhancing their capabilities, expanding their opportunities and improving their lives, they aren’t going to support it. And it’s not going to work, because the fact is the human mind is the paramount manifestation of intelligence in the universe, and AI is just a machine that scarcely competes at all.

Brian Rose: And you’re not impressed with the possibilities of that technology?

George Gilder: No, I am impressed with the possibilities of artificial intelligence, but it’s just another step in the computer revolution that we’ve experienced for decades. It’s achieved tremendous breakthroughs. Artificial intelligence algorithms can now determine protein folds, which are a crucial process in biology, far more effectively than unaided researchers can.

DNA programs proteins. It assembles amino acids into a variety of proteins, but DNA does not self-evidently show how to fold these proteins into all sorts of intricate shapes, and this has been a big obstacle to success in biotech. This is an important breakthrough. AlphaFold came from Google, and it’s a tremendous achievement, and I’m not denying it. But there’s no intelligence in the way we conceive of intelligence in the human mind.

The human mind is unique, and this is a machine. A machine is deterministic. Human intelligence manifests itself by unexpected ideas, by the capacity of imagination to conceive of counterfactuals or errors or new propositions that have never been entertained and don’t spring in any predictable way from previous propositions. In information theory this is called entropy: it’s unexpected bits. All information is defined as unexpected bits. If a machine starts doing unexpected things, it’s probably broken.

Brian Rose: Right. So by definition it will never have the creativity of a human.

George Gilder: Yeah.

Brian Rose: And by thinking that that is a future possibility, we’re making a fatal flaw. And this company is so ubiquitous in our lives that going down that path can be dangerous to us, is what you’re saying.

George Gilder: Yeah.

25:13 Brian Rose: What else about Google do we not see? Are there ways that it’s in our lives that we don’t recognise are potentially dangerous? Is it the big data, is it the technology that goes with it, is it the money? What is it?

George Gilder: You know, I really don’t worry about Google. What I worry about today is this sort of mindless attack on Google. The Federal Trade Commission regards Google as a potential monopoly and is hobbling their prospects. The Equal Employment Opportunity Commission doesn’t like that Google is a meritocracy. They want it to follow all the rules of affirmative action, and don’t like it that Google only hires the best computer scientists.

So the government and the culture are really attacking these great achievements, which are just like the previous accomplishments of computer science, summed up by IBM, for example. IBM was a giant that was attacked by the government as a potential monopoly, and the same with Microsoft. They attack all these companies when they get big. They’re vulnerable when they’re big, and the attacks just make them less effective, and almost always penalise their competitors more than themselves.

In other words, when the government enters a field with lawyers and bureaucrats and regulators, it makes that field less open and less full of opportunity for small companies and companies that might challenge Google. Google now has come out against face recognition. Google’s got face recognition beat; it accomplished face recognition pretty well some time ago, and face recognition is an important, vital technology.

But Google’s got it. So if it calls for all sorts of investigation and regulation of face recognition, who’s going to be hurt? Google won’t be hurt. All the other companies that might challenge Google, or develop better forms of face recognition, or apply face recognition more inventively, are the ones that will be suppressed by new government regulation of a critical new human possibility.

Brian Rose: OK, so be careful when you go after these companies, because you might actually cut out the competitors.

George Gilder: That’s what you do. It’s such a lesson of history. Many academics have noticed that the big established companies all kind of like regulation. They absorb the government into their business plans and use these rules as defences against competition, as barriers to entry for rivals.

29:00 Brian Rose: Now, a lot of things that Google offers you are free. How do you feel about free, and what should we be wary of when it comes to free?

George Gilder: Well, Google’s strategy is aggregate and advertise. You assemble ever more customers and then you advertise to them on the basis of data you collect from them through your search engines and other devices. And when you think about these so-called ads that Google is the master of propagating, aren’t ads really minuses? Nobody wants to see them most of the time. They actually are value-subtracted advertising.

So I worry about a business strategy that’s based on giving people what they don’t want. This is particularly acute with mobile ads. Pop-up ads on your smartphone take some 30% of the bandwidth and 30% of the cost of your bandwidth subscription just to accommodate ads, and they slow down everything else and actually impair the functioning of your device. So I think Google faces a real challenge.

The statistics are just amazing. I think only 0.4% of ads are actually clicked, and of this 0.4%, half of them are clicked by mistake. So the actual click-through rate is some tiny portion of the total volume of ads that’s delivered. It’s really a fiasco, and it fails the test that I expounded in Life After Television, before Life After Google: that in this future internet era the advertisers would be so well informed about just what you need and what you want that you’d never have to see any advertisements you didn’t want to see anymore.

That is being thwarted not just by Google’s strategy, but also by a misunderstanding of what privacy is that’s prevalent everywhere. Everybody thinks that privacy has something to do with anonymity. Privacy has to do with identity. What we need is an internet with secure identities that have to be respected, and not an internet that allows anonymity, which means an internet that fills up with clutter and criminality.

Brian Rose: And what about free services like free email and free videos on YouTube, which is where we’re being watched right now? What is the danger of getting free services and having these things that don’t cost money?

George Gilder: Well, it just means that the vendors of these services don’t have any real customers. It’s all these circuitous ways to avoid having real customers to whom you owe something, including a secure connection, and from whom you are constantly learning how to satisfy their needs better. So I think free goods are a deception. They’ve caused a lot of resentment, actually, because they place a focus on this collection of information, which is ordinarily perfectly acceptable, but which, when it’s combined with free goods and lots of advertising that you don’t want to see, seems somehow a scandal.

I’m for micropayments. I’m for ways of collecting money from particular customers. Spending a lot of time in China, I noticed that the big Chinese internet companies only get 10 to 15% of their revenues from advertising, while Google and Facebook get 90% and more of their revenues from advertising. I think the American model is deeply vulnerable, and these American companies are harassed and fined and litigated against and sued constantly, and subjected to these byzantine privacy rules, such as the new California law.

That really defends the big companies, because small companies have tremendous problems complying with the mass of specific and complex regulations. Yes, they exempt some small companies, but in the end, if you are going to challenge the incumbents, you’ve got to get big, and as soon as you get big you face this sudden onset of thousands of regulations, which are all based on technologies that are past, or political prejudices or misconceptions. It’s destructive.

Brian Rose: Like you said, when something’s free it almost goes back to a barter economy, and then you don’t know what’s on the other side. And also you’re not a customer, so you don’t feel like you have rights, because you didn’t pay for something. So who is the customer? It’s not obvious. The whole psychology of the transaction becomes flawed, and you almost don’t have any rights anymore. That’s what you don’t like about free.

George Gilder: Well put.

Brian Rose: And the internet popularised it, and Google made it more popular than ever with free Gmail, free internet, free YouTube, and we haven’t really properly thought out the ramifications. That’s what you’re saying.

George Gilder: I also believe that these big companies can launch all sorts of new projects and new businesses without any real commitment to whether they succeed or not. Capitalism thrives through a learning process. Economic growth is really learning; it’s an increase of knowledge. That’s what economic growth is about. And if you don’t have any prices, you miss that learning process, and you become a big sterile company like a government.

That’s what I fear in Google. They’re launching self-driving cars and spaceships and live-forever Calico programs, not to mention all their searches and maps and everything else, but they don’t have a real economic set of constraints from which they can learn by serving particular customers who pay the money. So I think ultimately Google is hurt by its free strategy.

38:40 Brian Rose: That’s a fascinating way to look at it. You once said that you completely agree with Peter Thiel on the thesis that technological progress is not inevitable, it’s the product of human creativity, which a lot of people would be surprised at. And you said, “If creativity didn’t come as a surprise, we wouldn’t need it, and socialism would work.” Is this missed sometimes by people out there?

George Gilder: Yeah, I think it is. Today a lot of people in Washington actually imagine that we can’t compete with the Chinese economy because the Chinese subsidise a lot of their companies, or the Chinese have top-down rules and Communist Party regulations that actually render them more potent competitors. The fact is that’s the big vulnerability of China. To the extent that the Communist Party really does interfere ever more deeply in their economy, the future of their enterprise is hurt.

Today the biggest threat is that the Communist Party is actually reaching down and forcing companies to fire their owner CEOs if they seem to emerge as too important figures, like Jack Ma, the founder and chief of Alibaba. Alibaba is one of the great companies in world history, and it made a tremendous contribution to Chinese growth. Jack Ma is still a pretty young man, and he now works for some UN agency, allegedly because communist apparatchiks forced Alibaba’s board to kick him out.

That’s a really alarming development, and there are several other leading business figures who’ve been forced out of their companies by political interference. I think it’s a real danger to China.

Brian Rose: Right. So you need that creativity and the capitalism. The capitalism has to be there, because you must be rewarded with monetary gain for great ideas. So a free system like Google’s will stifle it, socialism will stifle it, and communism does, because, like you said, those outliers get quieted, so they won’t get the innovation they really need.

41:25 George Gilder: Yeah, I think that’s right. I also think it’s crucial to my understanding of capitalism that capitalism is not primarily an incentive system. It’s not a scheme of carrots and sticks, rewards and punishments, by which good or profitable behaviour is rewarded and mistakes are punished. That whole model is a sort of mechanistic model of the economy. I believe that capitalism is chiefly not an incentive system but an information system, and that wealth is chiefly knowledge.

You can see this if you realise that the Neanderthal in his cave, as Thomas Sowell wrote decades ago, has all the material resources that we have today. The difference between our age and the Stone Age is not more resources; it’s more knowledge. That’s what wealth really is, and growth is learning. Growth is the increase in knowledge, and the rules of learning are really defined by the scientific method.

Every business venture is the entrepreneurial test of an idea, and unless it can fail, unless it’s falsifiable in terms of the scientific method, it can’t succeed either. That’s one of the problems with the Google strategy of depending entirely on these third parties who buy advertising. You have to be able to fail. When government tries to guarantee economic growth, it prohibits it, because you can’t guarantee an imaginative process of surprising creativity.

Brian Rose: And then that idea can’t stand on its own two legs, and you never know if it’s real. So interesting: capitalism isn’t about carrots and sticks, like you said. It’s not even about money. It’s about information and the collection of great ideas, and that’s what creates the wealth.

George Gilder: That’s right.

Brian Rose: But people miss that, and they see money in capitalism, but that’s not correct. The invisible hand isn’t about money; the invisible hand promotes a great idea.

George Gilder: Yeah. This whole mode of argument should have failed a long time ago. You can’t really say that Jeff Bezos or Mark Zuckerberg or Bill Gates or whoever needs billions and billions of dollars to motivate them to go to the office and pursue the expansion of their companies. That’s just wrong on its surface. They can satisfy all their needs with radically less money than they supposedly command.

The reason we need these people is because they know how to expand wealth. Money in capitalism doesn’t go to people who spend it best, which is the demand-side image. It goes to people who can expand it best. And when they expand it, it’s usually illiquid. All sorts of long-term projects that actually produce great value are illiquid. As Bill Gates used to say, he was bound to the mast of Microsoft. Back in the years when Bill was really running Microsoft, if he’d started selling shares massively, the shares would have fallen in value faster than he could sell them.

This whole idea that the wealth of the billionaires is comparable to spending money gained by ordinary people in the economy is just a misconception. That wealth is all invested, chiefly illiquid. So if you tax it away, you devalue it. If you force people to sell their companies and their shares in some effort to equalise incomes, you devalue all the companies by that process. It’s the great delusion of redistribution.

47:21 Brian Rose: And he’s not motivated by making a hundred billion anymore. That’s not Jeff’s motivation.

George Gilder: No, now he wants to stop climate change. What’s really a disaster is when the charities of these big billionaires are really their efforts to appease political correctness. Jeff Bezos now is giving $10 billion to stop climate change, and you can just be sure that that money is going to be wasted. It’s really not designed to achieve any business goal or any human goal. It’s designed to pay off all the people who are challenging Jeff Bezos as a monopolist or as a MeToo violator or some other kind of offender.

So $10 billion to climate change. Virtually every rich family in America has a climate change programme, and they all damage the environment and create all sorts of foolish pursuits, and corrupt all the universities, and distract scientists from the real scientific method.

Brian Rose: But he’s doing it as a reaction to the fact that we won’t let him go ahead and pursue his ultimate form of creativity and ideas and capitalism.

George Gilder: That’s right. He’s now being sued by the FTC, he’s being harassed all over the place, he’s been tweeted at by President Trump. Bezos is really in the crosshairs of the media everywhere, and he just wants to be liked again, and $10 billion for climate change seems to be a formula for being liked.

Brian Rose: And you think we should just leave them alone and let everybody get on with their capitalism. Except for Google; we’ve got to watch them.

George Gilder: Well, I think Google will fail if its business strategy is misconceived. My book is not about attacking Google for doing nefarious things. It’s criticising a business strategy that I think will fail, and that is bad for the US economy, which is being excelled dramatically by a whole set of Chinese companies, and which is provoking governments in the United States and Europe to harass Google constantly, litigate against them and sue them. So it’s a dead end.

Brian Rose: We definitely need to get you at Talks at Google and see what they say. They’re very open-minded there, so it could happen.

50:57 I want to talk about blockchain, because I think you believe this could be the solution, and it involves a lot of individual ownership of what’s going on in people’s lives and their spending. Talk to me about the blockchain, because you’ve become this blockchain guru. Now you’re in London to talk at CoinGeek 2020, you’re meeting with the man that you believe is the real Satoshi Nakamoto, who denies it, and you’ve met with Andreas Antonopoulos, who we’ve had on the show three times. Tell me what you see in blockchain and what is currently happening.

George Gilder: Well, I think the blockchain is what is sometimes called a unity. It’s a single technology that addresses a set of serious global crises, and the two most serious ones, I think, are, first, the collapse of internet security. You can tell a paradigm has failed when the more money you spend on it, the worse the results. Today the internet security paradigm in 2019 generated some eight billion breaches of personal data. Eight billion pieces of personal data were hacked, four times the year before. Every year we spend 20% more on internet security, and every year there are more hacks. This is a broken paradigm.

The other great hacking scandal in the world is the scandal of money. The biggest industry in the world is not food or transportation or housing or medicine. The biggest industry in the world is currency trading. Every three years the Bank for International Settlements does its triennial survey, and in 2016, which was the last one until a couple of months ago, they estimated that currency trading was $5.1 trillion a day. That is roughly 25 times all global GDP, and roughly 75 times all global trade in goods and services.

And the result of all this currency trading seems to be more trade wars, more currency conflicts, more economic conflict and failure. I’ve just discovered that the new triennial review of the Bank for International Settlements shows that over the last three years, while the world economy didn’t really thrive, there was some kind of recession and trade stopped growing, currency trading increased 30% to $6.7 trillion every 24 hours. It’s just an absurd waste of computer power, a waste of entrepreneurial skills, a waste of bandwidth.

The reason I’m so excited about the blockchain is that it addresses both these problems at once. It’s a unity. It addresses the problem of internet security: it’s a new security layer for the internet, where personal identities can be immutably anchored in this blockchain software structure. And it solves this other hacking problem, where central banks hack world money in this carnival of floating currencies and currency trading: central banks printing money, easy monetary policy, issuing debt madly and stealing from the future.

These central bank operations don’t even result in more trade. If global money is working, you have more trade every year and less conflict, and the money is more reliable. It offers more dependable information to entrepreneurs, so there’s less conflict. But because of this scandal of internet security, we can’t even trust Huawei routers. This was a great Chinese telecom company. It was a private company that beat out all the state-owned enterprises in China and became the world’s leading telecom equipment vendor.

Now we’re terrified that Huawei routers, which are full of American and Israeli and Western chips, are based on Western standards and incorporate Western software, are somehow going to be a Trojan horse that brings down the West. It’s a fantasy. It’s not going to happen. But it’s the result of this collapse of internet security, because with billions of hacks you can’t trust anything. So all these nations are building walled gardens around their internets and trying to regulate them more, and they’re going to end up extinguishing this great achievement of our era, which is really internet technology.

So the blockchain offers a solution to internet security, and it also offers a solution to global money. This whole idea that money is a feature of sovereignty, a property of nation states, is just a complete misconception. Money until 1971 was universal; it was based on gold. In 1971, and really ’67 before, the US left the gold standard completely and cast money into this current chaos of trillions and trillions of dollars’ worth of currency trading every 24 hours. It’s a bizarre phenomenon that has no utility. It enriches 11 or 12 big banks quite a lot. It’s just a gigantic scandal of money.

59:41 And the blockchain: Satoshi Nakamoto, probably Craig Wright, this Australian rogue, really invented blockchain, probably. Satoshi Nakamoto is pseudonymous; people don’t know quite who he is. But it seems at least Craig Wright was pretty central to this whole development.

Brian Rose: OK. And should we have stayed on the gold standard?

George Gilder: We should have stayed on the gold standard, but the gold standard would have been digitised by now. It would have evolved into new forms that would retain the measuring-stick property that money has to have.

Brian Rose: OK. And what’s stopping us from making this transition to blockchain? There are a lot of entities and governments resisting this, resisting that loss of control.

George Gilder: Because governments have persuaded themselves that one of their greatest powers is just to print money. And if governments can print money, money really doesn’t mean anything. Money is just an expression of government willpower and extravagance and political pandering, and money no longer is an information tool that guides all economic behaviour, as in the information theory of economics that I’m developing.

Brian Rose: Right. So how do we make this transition, using this blockchain layer around the internet to get this security and get us a real form of money? Because it seems like there are a bunch of bumps in the way, including our current understanding of these volatile cryptocurrencies that we don’t know how to use as money. They don’t feel like money; they scare us. How do we make that transition?

George Gilder: I believe that this transition is underway, and all around the world experiments are now being conducted with blockchain. The crucial thing is once blockchain is linked to some standard that resembles gold, so money all around the world is valued by the same physical constants that make it function as a metric rather than as a central bank model. Xi Jinping in China has just endorsed blockchain. He gave a long speech to a central committee of his Communist Party saying that blockchain was going to be a core technology for China.

Facebook is trying to adopt blockchain, Google has various blockchain projects, JPMorgan Chase too. All over the world people are experimenting with blockchain, and once it gets established, once really superior money is launched, I believe more and more people are going to use it. People are already using Bitcoin, for all its flaws. Whenever there’s a real economic crisis, in Greece or Zimbabwe or Venezuela, Bitcoin became a salvation for an economy where the money had been destroyed by government. I believe we’re in the process now of evolving a new world economy around blockchain.

But this is the period I always call the diving board model of the economy. All the entrepreneurs go out to the end of the diving board and say they’re going to do this and that, degree of difficulty a thousand or whatever, and then they dive and disappear. All the people around the swimming pool say, “Hey, that guy’s never going to come up. This is the end of that project.” But the fact is, this is when all the creativity really happens, during the phase when the money has been invested.

Just in the ERC-20 tokens from Ethereum, which raised some $20 billion for thousands of crypto projects in the last few years, there’s all sorts of creativity and invention going on. I believe most of these are going to fail, and more than half of them have already failed. But ultimately someone’s going to get it right, and maybe Satoshi will get it right again, who knows. But they do have to understand that money is a measuring stick. It’s not a speculative asset.

As long as people imagine that they’re going to get rich by holding Bitcoin, it’s called HODL, as long as people imagine that money can be a speculative asset where you get rich, they’re going to fail. Money has to be a measuring stick, and you have to be able to issue as much of it as the economy needs. What controls the quantity of money should be the number of projects that entrepreneurs are willing to commit themselves to and borrow money to pursue. That’s what limits the money supply, not some rule, as Milton Friedman proposed, of a limited, rigid, mechanistic monetary system where all the adjustments come in the price of the money. Money has to reveal prices, not set prices.

1:06:41 Brian Rose: Right. What if you told this to Ronald Reagan in 1982, or told this to your friend Henry Kissinger in ’82: that in the future, some 50 years from now, there will be no money, there will be this thing called a blockchain, and central banks won’t control it?

George Gilder: Well, I believe money is important, but central banks won’t control it. And Reagan pretty much understood this. Reagan was a gold standard advocate, and a lot of people believe Volcker effectively targeted gold when he overcame inflation in the 1980s. Inflation when Reagan assumed office was 15 to 20% a year, interest rates were spiking, and people were predicting peak oil, peak population, peak food. Famine and plague were prophesied. Reagan was remorselessly optimistic, and he was willing to accept Volcker’s terrible recession of the early 1980s in order to overcome inflation and restore the soundness of money.

Brian Rose: Right. And thanks to your book that he read right when he did.

George Gilder: Yeah, he read Wealth and Poverty. When I wrote Wealth and Poverty I didn’t understand money as well as I do today, but I’ve now written six or seven more books on money and economics, and 15 more books overall.

Brian Rose: Right. The things that you talked about in Wealth and Poverty, which Reagan went ahead and implemented, included this concept that lowering taxes and reducing the size of the government would promote the economy. I know that’s probably a really simple way of saying it.

George Gilder: Well, I actually made a more aggressive statement than that, which everybody believed. What I said was that lowering tax rates increases revenue and allows you to expand the government, if that’s the best thing for you to do. You can’t expand government by raising tax rates. Raising tax rates just inhibits the private sector and reduces economic growth and progress. So I said lower tax rates yield more revenue.

A guy named Keith Marsden at the World Bank did quite a good study that showed that, taking all the economies of the world, countries with low or declining tax rates grew their governments three times as fast as countries with high or rising tax rates. And the reason the countries with low tax rates could increase their government spending three times as fast was that their private economies grew six times as fast.

This whole idea that our problem is austerity, that we’re spending too much, and if we just raise taxes to pay for our government spending we’ll balance some budget, or balance some ledger in heaven, and prosper again, is just completely incorrect. That strategy is futile. I think that most government programmes have lots of bad effects and probably inflict net damage on the economy, so certainly retrenching government is a desirable thing to do. But that’s true regardless of what the tax rates are.

These are two separate challenges. You raise tax rates in order to expand government, and government shrinks because your economy collapses and you’re no longer capable of achieving your government programme.

Brian Rose: Why is that so hard for us humans to understand, that raising taxes or being austere is the completely wrong way to stimulate an economy? Is it because we have this mentality that our mum and grandma said you’d better save?

George Gilder: No, I believe that it’s a combination of envy. People want to tax the rich. This is what leftist parties constantly do: they pretend that the rich are somehow avoiding taxes and need to pay more in order to redistribute resources from the rich to the poor. It’s that redistributionist idea that was Karl Marx’s great mistake at the time of the industrial revolution: that it was our final human achievement, and from then on we just redistribute wealth.

Today it’s believed that all the wealth we need is in the coffers of Google and Facebook and Walmart and Alibaba, and that now we just need to redistribute the existing wealth.

Brian Rose: Amazon, Bezos as well. And Bezos wants to anticipate these demands by setting up the global warming fund. But that’s flawed because, like you said with Marx, he forgot the fact that we must continually innovate as a culture. We must learn new things and test ideas, like you said, and capitalism gives us the chance to do that. So let it run, is what you’re trying to say.

George Gilder: Yeah, let it run as it should. That’s right.

1:13:52 The human race constantly faces big, unexpected challenges. Now the coronavirus is a threat.

Brian Rose: Where capitalism could help there?

George Gilder: Sure, absolutely. I just came from Seattle a few days ago, where I met with Matt Scholz, who’s one of the great biotech geniuses of our era. He has four companies he started to address various opportunities in biotech: making biotech into an information science rather than a chemical science, and reprogramming human bodies to produce what they need to overcome such perils as coronavirus. Capitalism will solve these problems. Government can’t do anything about it.

The poor Chinese government is thrashing around trying to quarantine people, and maybe that will work for a while. But ultimately, if you’re going to deal with viruses and plagues, which continue to recur, you’re going to have to have a creative pharmaceutical industry and biotech industry that can address these threats with ever more creative solutions.

Brian Rose: Where a financial motive must prevail in order to get the most creativity?

George Gilder: Well, no, I don’t like this financial motive; that’s not the point. The point is that the people who generate wealth have to have further wealth to reinvest to expand their ideas. We don’t give entrepreneurs more money as a reward, or to motivate them, or as a carrot and stick. The people who generate wealth have to command the resources to expand it. It takes constant reinvestment, constant pursuit of new ideas, with outcomes that can’t be predicted.

This is why government guarantees always fail. A learning process can’t be guaranteed. New ideas are unexpected. Creativity always comes as a surprise to us. If it didn’t, planning would work; socialism would work. The enemy of surprise is a government guarantee. If the government tries to guarantee economic growth, it by definition thwarts it, because the guarantee will necessarily be based on the past and will not anticipate the unexpected developments on which all future wealth depends.

Brian Rose: And that’s what China’s doing.

George Gilder: Well, China’s doing lots of things. China is a great big country. The Communist Party is probably doing lots of bad things most of the time, but ever since Deng the Chinese have been creating free zones. They’ve been promoting entrepreneurship, they’ve been expanding venture capital, they’ve been mimicking Silicon Valley. Jiang Zemin, who was mayor of Shanghai, launched a lot of the free zone experiments in China.

The American Nasdaq and IPO system, initial public offerings, is the crown jewel of American capitalism, and China has been creating stock markets and initial public offerings ever since. Now they have three times as many initial public offerings as we do, they have many more business starts than we do, and they’re educating millions more engineers than we are. So at the same time that they’re stifling freedom of speech and stifling political competition, they are promoting economic competition.

It’s hard to tell how this is going to turn out. It could be that the Communist Party tries to take over the entire economy and manage it and rule it, and will create another great catastrophe like the Mao era, where they tried to guarantee economic growth and progress and caused famine and plague and failure.

1:19:59 Brian Rose: I want to just finish up with economics really quick. Trump has famously lowered taxes and driven the stock market to all-time highs, pursuing similar policies to Reagan in that sense. First of all, does that outcome surprise you?

George Gilder: Well, I’m delighted that Trump lowered corporate tax rates. Our tax system is still a leviathan. It’s still incredibly complex, it still costs billions and billions of dollars for compliance, and it loses revenues left and right, even with Trump’s reforms. I’m glad that Trump did reform corporate taxes. We had some of the highest in the world, and that was causing companies to leave the United States or not establish themselves here.

Brian Rose: So should we abolish corporate taxes and personal income taxes?

George Gilder: We certainly could abolish corporate taxes and have flat-rate personal tax rates. I think it would be fine, and we’d get a lot more revenues, and the government would have more resources to waste, or possibly to invest in valuable ways. But the stock market is another thing. You realise that the US stock market is only half as big as it was 20 years ago? There are only half as many public companies, and the number of initial public offerings has collapsed some 90%.

There are now a lot of big unicorn initial public offerings that people imagine mean this is a great era for IPOs, but that’s a deception. Small companies can’t go public anymore, and it’s really a tragedy. So there are serious issues still in the United States. I think Trump has been a great president in many ways, but I don’t agree with his trade policy, I don’t agree with his China policy, and I think there are a number of problems, including the constant bragging about the stock market, when much of the money that supports these record prices comes from the companies themselves. Sometimes 80% of the net new investment in many of these companies comes from the companies themselves.

Brian Rose: Stock buybacks.

George Gilder: Yup, stock buybacks.

Brian Rose: So it’s not the best barometer of how everyone’s doing.

George Gilder: It really isn’t. And there’s a scandal of money. Money doesn’t mean anything if it can just be printed by governments. That’s why I believe it’s crucial to understand that money is essentially time. What remains scarce when everything else grows abundant is time. Money is what translates this ubiquitous economic scarcity that governs all our lives into the economy in a fungible way, so you can use this symbolic embodiment of time, which is money, to purchase goods and services and offer the information signals that govern economic growth and learning.

Brian Rose: Will there be a more accurate way of tracking people’s time in the future, and will governments start using that?

George Gilder: I think so. Two economists, Gale Pooley of Brigham Young in Hawaii and Marian Tupy of St Andrews in Scotland, are together following up on the Nordhaus concept of true prices being time prices, to restate almost all economic data and make it universal everywhere. The value of goods and services is measured by the number of hours you’ve got to work to buy them, and that’s the real price. When you run out of money, you’re really running out of the time to earn the money to buy what you want. Time is the real scarce resource when everything else grows abundant.

Governments and central banks can print money, but they can’t print time. So what they do is end up stealing from the future, and we now have an overhang of some $250 trillion of global debt. That’s a kind of doomsday pot that has got to be sustained by subsequent generations. This is really the chief reason for this scandal of money, this currency trading: to allow central banks to steal from the future to pay off the politicians and their constituents of today. It’s a rebellion against time.

That’s what the blockchain offers: a return to an immutable ground state for both world internet communications and electronic commerce, and a new ground state for world money, realigning economies with the reality of the passage of time.

Brian Rose: I love this concept. It’s powerful.

1:27:01 All right, I want to talk about 5G technology and this new generation of Wi-Fi called Wi-Fi 6, which I haven’t heard about. Tell me about 5G. We’re paranoid in this country that Huawei is going to come in and take over our 5G networks; I think Boris just said they could come in. What do you see in 5G, and what is this Wi-Fi 6 I’ve never heard of?

George Gilder: Well, 5G is the establishment solution to future communications. It’s all the big telecom companies setting a new standard that perpetuates the dominance of these big telecoms with exclusive spectrum. In the US they have auctions that sell off exclusive rights to specific bands of frequencies that all our wireless communications devices use. Back when we were doing 2G and 3G and 4G, I used to predict that all the action would not occur in these auctioned exclusive bands. It would occur in the ISM bands, which are unlicensed bands.

ISM stands for industrial, scientific and medical. The idea was that factory floors and hospitals and laboratories and other such uses couldn’t apply to government for exclusive spectrum every time they wanted to do an experiment or reuse some frequency; they needed unlicensed bands. And I predicted all the action in technology would migrate to the unlicensed bands. Wi-Fi emerged, and Wi-Fi isn’t exactly industrial, scientific or medical, but once people began depending on Wi-Fi, it expanded endlessly, and the various communications authorities did not limit it. Sure enough, between 70% and 80% of all communications now is completed by Wi-Fi.

Now I believe the big change with this new 5G standard is going to be a gigahertz, a billion cycles a second. Spectrum is measured in hertz, and a whole big gigahertz of new spectrum is going to be assigned to the unlicensed bands. There’s only about 600 megahertz of spectrum used by the unlicensed bands now, so this is more than a doubling of the unlicensed bands. And this comes at the same time that a new Wi-Fi standard is being launched, called Wi-Fi 6, which vastly expands the flexibility and utility and the number of carriers that each Wi-Fi router can provide.

So I believe that all the action in communications over the next several years is going to migrate to Wi-Fi 6, and Wi-Fi 6 is going to be a lot more important and meaningful than 5G, with these hundreds of thousands, millions, of antennas from Huawei that are going to be strewn around everywhere, handling such high frequencies that they can’t really penetrate walls. Many of these frequencies aren’t useful for mobile applications. So I think 5G is overrated, like all big establishment projects.

And entrepreneurs will learn how to create cognitive radios: radios that can survey all the frequencies out there and direct communications to the unused spans of frequency in real time. These are called cognitive radios or software-defined radios. They already work well on battlefields, and the Israelis are brilliant at it. I believe these cognitive radios are going to be the most important developments of the Wi-Fi 6 era.

Brian Rose: OK, that’s fascinating.

1:33:33 We saw this in the internet boom in the ’90s. I was in New York City, where everybody was building out all of this fibre optic, and it was massively built and massively overbuilt. Then I think we soon realised that we didn’t actually need all this technology, they started running all this internet stuff over very low-bandwidth cable, and all of those companies went out of business. Overspending on infrastructure: are there any kind of similarities between that and what you see happening with 5G?

George Gilder: Well, fibre is the net. All the backhaul, all the international, all the undersea, all long-distance communications go through fibre, and fibre is increasingly used in all these previously coax systems, which in the US are cable TV. It was a scandal of money that brought down those thousand telecom companies that went into debt in order to launch the fibre optic revolution, which I called the telecosm, and which really did transform our world economy. So I don’t think we overlaid fibre.

What happened is that fibre has immense capacity, and all the expenses are front-loaded, while the yield is enjoyed far into the future. During the late ’90s the dollar rose in value some 60 to 70% against gold and 30% against all commodities. So all the countries, companies and entities that went deep into dollar debt in the late ’90s essentially went broke. All the economies of Asia went broke. The Asian financial crisis was a vast convulsion across all of Asia, and all of that stemmed from this huge increase in the value of the dollar engineered by monetarist managers of central banks.

We didn’t have gold, and so central banks just made catastrophic mistakes. They thought the big threat in the late ’90s was inflation, when in fact prices were plummeting massively with the internet revolution and all sorts of other inventions and advances. All these companies that went into debt to lay the fibre foundations of the world economy in which we currently live went bust. Global Crossing laid fibre across all the oceans of the world, and we’re still using their fibre investments, but Global Crossing went bankrupt, and so did hundreds of other similar companies, as well as retailers that went into debt during that period. Target almost went bankrupt as a result of the same thing.

It was just a disastrous mistake, and it comes from having unmoored money: money that has no anchor in anything outside the system itself. It’s a self-referential loop manipulated by central banks, and it can result in this kind of disaster. By comparison, for 200 years of British prosperity launched by the gold standard, the British government could issue consols with unlimited horizons at 3% interest rates, because gold really is an index of time, as I explained in Life After Google, my book on the future of the world economy.

1:38:37 Brian Rose: Right. You once said that global warming is a good way of blaming Republicans for bad weather. What did you mean by that?

George Gilder: Well, do we want to go into the history of weather? The fact is that all the global warming data merely reflects our escape from the Little Ice Age of the 19th century and late 18th century. We’re still recovering from this Little Ice Age, which had lots of bad effects. But temperatures now are not warmer than they were in the medieval climate optimum, or in the Roman period or the Minoan period. There’s nothing extraordinary about the weather, judged by time prices.

The thesis is that because of the increasing emissions of CO2, which represents 0.04% of the atmosphere, we’re undergoing a period of extreme weather that’s damaging agricultural production and prospects and damaging the seas. What time prices show, the true prices, how long people have to work to earn the money to buy any particular good or service, food or commodity, is that since 1980 the amount of CO2 in the atmosphere has increased by 22 to 25%. That’s a significant increase in CO2.

And did agricultural production drop during this period? Agricultural prices measured by time dropped 75%. The price of salmon dropped 80 to 85%. Workers have to expend far less time to earn the money to buy food and fish and nutrients and all the 50 key commodities that support human life. There’s no evidence at all in time prices of any damage to agriculture from increases in CO2. All the evidence is that this small increase in CO2 has been extremely favourable for human life and global climate.

But everybody always wants to complain about the weather, and now the left has brilliantly arrived at a way to blame conservatives for bad weather.

Brian Rose: And what about rising sea levels?

George Gilder: Sea levels have been rising for centuries at about exactly the same pace they’re rising today. There’s no increased rate of sea level rise. And the idea that the human race can’t deal with a few inches of sea level rise, seven inches or something a century, which is far smaller than the tidal change every day, is just one of those absurd claims that falls apart if you just contemplate it seriously.

1:43:04 Brian Rose: Which you’re very good at doing. You’ve written speeches for Richard Nixon and Nelson Rockefeller, you were mentored, I think, by Henry Kissinger, and obviously Ronald Reagan quoted your work a lot. What’s it like working with these powerful people?

George Gilder: Actually, my rule when I worked for politicians was to see them as little as possible. I was a speechwriter, and the key thing is they want the best speech they can get for a particular audience. But if I talked to them before the speech, I’d have to pay excessive attention to what happened to be in their mind at that particular time, and ordinarily the meeting with the speechwriter is not a central activity of that day. So I found it a waste of time to talk to politicians.

I used to work at night. I’d go to the offices at night and write the speeches during the night, where I wouldn’t be interfered with, and then deliver the speech on the politician’s desk the next morning, go back to my apartment and sleep. My worst job was working for Jacob Javits, who was a really brilliant guy who cared a lot about speeches and wanted to tell you exactly what to write. I had nothing to offer Jacob Javits.

But the best person was Nixon. Nixon would read word for word everything he was given. He hired good speechwriters, and they really were terrific, from Pat Buchanan to Jeffrey Hart. I wrote a lot of speeches, and he would read them word for word, and he did very well with his speeches.

Nelson Rockefeller was dyslexic and not especially good at delivering speeches, particularly if he had to read them. With Nelson Rockefeller, you didn’t want him to be reading speeches; you wanted him to be talking extemporaneously. He was very good at talking extemporaneously; he couldn’t read a speech. Bob Dole was impossible, because he liked telling jokes and doing anecdotes. I worked for Bob Dole, and he would sometimes laboriously read the first paragraph of the speech I’d written for him and then throw it away and launch into a series of his very entertaining monologues. I enjoyed my time with politicians, but I didn’t spend much time with them.

Brian Rose: And they’d call you up because you were the economist who knew what he was talking about and could help them communicate.

George Gilder: Well, in the early years I was just a writer. I spent a whole year in Lansing, Michigan, writing a book for George Romney called The Mission and the Dream. This was when Romney was running for president. He ended up not running for president, and I ended up not getting paid for the book, which meant I pretty much had rights to everything in it, and I converted it into Wealth and Poverty ten years later. That was why I could write Wealth and Poverty in time to come out before the Reagan administration, and Reagan adopting Wealth and Poverty was a wonderful development for me.

1:47:27 Brian Rose: Wow. You grew up on a dairy farm in Massachusetts.

George Gilder: I did.

Brian Rose: But also your father died, I think, when you were three, in World War II.

George Gilder: Really two. He died when I was two, but they didn’t report his death until a year later, so it’s between two and three. I didn’t see him in the last year of his life.

Brian Rose: And yet one of your godparents was one of the Rockefellers.

George Gilder: David. David Rockefeller.

Brian Rose: So you had this strange existence where you’re milking cows on one hand, and then you’re hanging out on Fifth Avenue or at these estates. Talk to me about that. How did that change you as a young man, to grow up in these two realities?

George Gilder: Maybe it gave me a more independent mind. I definitely knew what life was like in real poverty. Dairy farming in the Berkshires was not a lucrative pursuit while I was growing up, and my stepfather, who was also my father’s first cousin, had a really difficult life and had no extra money at all. And then I would go off to the Rockefellers for various vacations in Seal Harbor, Maine, and the JY Ranch in Jackson Hole, Wyoming, and I spent a year or more living in David’s house in New York City.

As a kid I really was persuaded by David that I was a very special person, because David admired my father, I think I can say, as much as any person in the world. He thought my father was a genius, and he thought his loss in the Second World War was a tragedy. My father went to Germany with David after graduating from Harvard in 1936, and they saw Hitler speak and saw what was happening to Germany. My father decided on the spot that war was inevitable with Nazi Germany, and he came back to the United States and began civilian flight training so he’d be prepared for what he thought would be a war settled by air power.

That was his insight: that the war would be resolved by air power. He was one of the youngest members of the Council on Foreign Relations and debated with people like Allen Dulles about what to do about Germany. He was a really remarkable man, and David treated me, without much evidence that I could detect, as embodying all the virtues that he saw in my father. That really did contribute to my life in a crucial way.

I like to think that my father might have liked a lot of my books. I saw a book that my father was writing before he died. He was writing an economics text, and I didn’t see it until after I wrote Wealth and Poverty, but it was largely about intangible capital. This is really an Austrian economic concept, which was central to all my books, and an information theory of capitalism today really is based on intangible capital.

Material resources are meaningless. All the atoms of the universe remain, and the question is how we deal with these atoms, and that’s ideas: intangible capital that determines the future of the economy. My father saw that in his 20s, before he got into the B-17, a terrible plane, half of which never made it across the Atlantic. He never made it across the Atlantic. He led a squadron of B-17s.

It was the brilliant idea of the designers that you wouldn’t need any fighter planes if you had all the fighter capacity in the bombers: a mixture of a fighter and a bomber. In contriving this device, they neglected to make it capable of flying across the Atlantic in a storm, and that cost my father and thousands of other pilots their lives in the Atlantic. The B-17 also gave me an idea of what a kludge is: how a technology that’s badly designed can cost lives.

Brian Rose: Wow. So that thing just couldn’t make it across the ocean in bad weather; it would run out of fuel.

George Gilder: Yeah, because it was heavy. It was cumbersome, and it flew low and was buffeted by weather and just couldn’t make it. Half of them were lost, which is amazing: a technology where half of them don’t even perform the basic function of getting to their place of application.

Brian Rose: Wow. It sounds like your dad was a bit of a futurist as well.

George Gilder: He was. I really think he was a futurist.

1:54:19 Brian Rose: And so you get mentored by David Rockefeller, you end up getting to Harvard, you dropped out and went into the Marines for a couple of years. Was that just because you wanted to be like your dad?

George Gilder: I actually went into the Marines for six months and then eight years of reserve duty, so I was in the Marines for eight years technically. I did all the Marine Corps training, and that was really crucial to beat some sense into my head and some muscles into my body. I’m eternally grateful to the Marines for the training they gave. It was better than Harvard.

Brian Rose: The Marines are better than Harvard. That should be a T-shirt. And before that, were you a bit of a bookworm, or not physical?

George Gilder: Well, I was a runner and a trackman. My proudest running accomplishment was beating all the other runners at Camp Lejeune in a 5K with a pack on my back. I ran that in 17 minutes something, which was just amazing. Still today I’m amazed at the time I did for that 5K, but I guess it was real, because it beat hundreds of other Marines in training down at Camp Lejeune.

Brian Rose: What’s a daily practice that you do every day? I think I know what it is, but you could share it with people. You’re 80, right, George?

George Gilder: I’m 80.

Brian Rose: Eighty years old, and yet you run every day.

George Gilder: I ran today, along the Thames. I ran about six miles. I like running up hills. In the winter I like cross-country skiing, and I like cross-country skiing uphill, so I can then ski downhill on cross-country skis. When I go to Beaver Creek or Vail or one of those places, I ski uphill first and then ski down on my cross-country skis without paying. Don’t tell anybody about this.

Brian Rose: A lot of people couldn’t do this at 60 or 70, let alone 80. How do you do that every day?

George Gilder: Well, I’ve been doing it for 68 years or so. I’m a runner. That’s really an essential part of my identity, being a long-distance runner. I wasn’t tremendously talented. I did do the 17-minute 5K with my pack at Camp Lejeune, but my best marathon time was three hours flat, which isn’t distinguished, and I ran a bunch of 4:30 miles but never faster than that. So I wasn’t an extraordinary runner, but I kept at it, and I’ve been doing it all my life. As I get older I find my competition diminishes, so I’ve won about a hundred races in the last several years for my age group. I beat the 70-year-olds.

Brian Rose: A 4:30 mile, that’s pretty good. A couple of questions about you, George. What was the best day of your life and the worst day, if you had to think about it?

George Gilder: Oh boy. I wrote Sexual Suicide, which is a celebration of marriage, so certainly my marriage to Nini was a glorious triumph. I’ve had four wonderful children who I love, and so family experiences really have been central to my life and my stability and ability to keep going. Those are the best times.

The worst times, if I really had to think about it: I had a wonderful relationship with a cousin of mine who actually wrote speeches for Reagan. He was just a wonderful person who I admired tremendously, and he was a brilliant writer. During the time my newsletter business was really flourishing, I bought The American Spectator and made him editor of it. I didn’t realise at the time he had a terrible alcohol problem, and it brought down the magazine and brought down my company in the end.

I did everything wrong. I just didn’t know how to deal with a family member in trouble to whom I’d given responsibilities that would determine the future of my whole enterprise. I love the guy still, and he’s stopped drinking; he’s a wonderful person. But that was the worst time of my life, because he blamed me for everything that happened, and my closest friend and relative became just terribly fraught, in almost violent conflict. That was an appalling experience that told me nepotism really is not a good idea.

Brian Rose: Yeah, it’s a good lesson.

2:00:48 What scares you, George?

George Gilder: I’m scared that the United States really doesn’t understand the world at all at the moment, that we really have a culture that’s quite inimical to the ideas that made us great and triumphant in the world. We’re now facing a rising power in China, and in Washington they still believe we’re way ahead of China in technology. I spent months in the last year in China, visiting many companies there. They are substantially ahead of us, at least in most technologies.

To have this delusional belief that we can win a trade war with China, and that we can continue to dominate the South China Sea with our giant naval vessels, is just a really frightening prospect. And now we’re decoupling from China, the fastest-growing economy in the world. My time prices show that it’s been growing a lot faster even than it’s measured to have grown in monetary terms. We imagine that we benefit from decoupling ourselves from this market, and what we do is punish all the private companies in China that want to participate in our economy and help us expand and improve our living standards: Huawei, Alibaba.

There’s a company called Ping An that I discovered in China. It’s an insurance company that is just incomparably ahead of all American insurance companies in its use of technology. If you get in an automobile accident in China, and it’s not too serious, you get out, take a picture of the damage with your smartphone and explain the accident over the smartphone. Through a combination of artificial intelligence and various other innovations, within ten minutes your money is in your account, you’ve been scheduled at the best available garage to fix your particular damage, the components have all been priced and the estimates have all been completed.

I ran into a deer driving home from the airport, and it takes six weeks, and there are investigators and adjusters. It’s just a ridiculous kind of imbroglio compared to this elegant and swift solution, which involves face recognition. I want people to recognise my face. This whole idea that face recognition is a bad technology is just ridiculous.

Brian Rose: How did that happen?

George Gilder: We had this crazy exaggeration of Orwell, and Orwell was wrong. Orwell thought that telescreens were going to be a terrible instrument of government power. Instead we have telescreens in all our pockets, and we often gain access to them by face recognition now. The best airport for face recognition that I’ve encountered is Heathrow. I came through there, and you just lay down your passport, and they recognise your face, compare it to the passport and project you through.

Face recognition is really valuable. It recognises you. Privacy is not anonymity; privacy is identity, and part of your identity is your face. When we didn’t have face recognition, government had to treat everybody as a terrorist. That’s what happens in American airports mostly. And during the Second World War we didn’t have face recognition, so we incarcerated all the Japanese categorically in concentration camps.

Yes, face recognition, like any other technology, can be used abusively by governments, but government abuses and dictatorial excesses are not caused by technology. Mao was capable of killing people by the hundreds of millions without any advanced technology.

Brian Rose: Right, that’s really well said. I appreciate that.

2:06:57 There’s a documentary on Netflix called American Factory that just won an Oscar. It’s about a Chinese company moving into Dayton, Ohio, and rebooting a factory that closed down in the financial crisis. They put a bunch of Chinese workers next to these American workers who used to be highly paid union workers at GM but are now accepting salaries at probably a third of what they made. It’s the merging of these two cultures, where the Chinese workers don’t understand the Americans and think they’re lazy, and the Americans think the Chinese have the wrong value system. It’s interesting to see how different these cultures are, because the Chinese want to get it done no matter what, and they look at the Americans as being lazy and privileged.

George Gilder: And to some extent that’s right.

Brian Rose: It’s pretty much right. And the cushy jobs they used to have, where they were making $55 an hour on a line: they said they’ll never get these back again.

George Gilder: Yeah, maybe that’s right. However, Pooley and Tupy do this time price study based on the Farm Bureau estimate of the cost of a Thanksgiving dinner. For a blue-collar worker in 1980, a Thanksgiving dinner for ten people used to take 36 hours of work, and today, for a blue-collar worker, it takes nine minutes. There’s just a drastic improvement. No, I’ve got it: it’s 36 minutes versus nine minutes. It’s not 36 hours, I’m sorry.

Brian Rose: That’s a big Thanksgiving meal. So it’s one quarter of the time it takes them to have that same meal, because of the efficiencies that have been involved in creating that food?

George Gilder: Because of the technological revolution that’s been spreading all around the world and has generated drastic reductions in the number of hours typical workers have to work in order to buy the goods and services that sustain their lives. And if you assume that the worker in 1980 advanced through the workforce like the vast majority did and actually increased their income over the years, then that Thanksgiving dinner becomes still cheaper in hours of work. And you see that equality has improved.

Pooley and Tupy do this analysis of how long a worker in Iowa had to spend to buy the wheat in the bread that essentially sustains his life, and compare that to a rice farmer in Asia, actually in India. They discovered that the wheat farmer in Iowa had actually increased his capabilities more than the rice farmer in absolute terms. But the wheat farmer began by spending less than a day generating the wheat to sustain his life, while the rice farmer spent 60 hours generating the rice that sustained his life.

So with the advance of the world economy, poor peasants who used to spend their whole lives just earning the food to keep them alive now have 40 hours a week to invent new products and launch new companies and enjoy new leisure pursuits, while the wheat farmer only increased his available time by a few hours. So there is a vast equalisation of the world economy as a result of these advances in technology, which have caused these learning curves all around the world that really identify economic growth.

Brian Rose: Right, that’s a powerful way of looking at the world, for sure.

2:12:10 George, I always ask a few questions at the end. If you could pick up a phone and call the 20-year-old George Gilder, maybe at Harvard still or going off to the Marines, and give him some advice based on everything you know now, what would you tell that young man?

George Gilder: Contrary to what people always tell you, time working is good time. You shouldn’t pursue good times in a sort of compulsive way. Pursuing pleasures actually yields pain. Pursuing goals through work really is edifying and ultimately enjoyable, and really the essence of human creativity and the image of his creator. That, I think, is really what I would tell the young George, who was kind of a compulsive pursuer of pleasure, despite his Marine Corps stint and other disciplines. I did work, but I never regretted working too hard.

Brian Rose: OK. You liked to socialise and party a little bit, but you’re saying over time you realised the real pleasure came in putting in hard work.

George Gilder: Yeah, and family. My first book was about politics, which I wrote with my friend Bruce Chapman, with whom I established the Discovery Institute. He really worked in politics; he was head of the Census Bureau, did policy planning under Reagan for a while, and was an ambassador to the UN and all kinds of things. But four of the books after that were about sex and family. I wrote Sexual Suicide, and Naked Nomads, which showed that unmarried men were the cause of all the problems of the world.

Brian Rose: And you still believe that?

George Gilder: Yeah, sure. The barbarians have to be tamed, and the way civilisation tames the barbarians is getting them married. I’m an anti-feminist. I think feminism is a menace. Not that I don’t like women achieving things; women have always worked throughout history and have made tremendous contributions. But this idea that getting women out of the home into the workforce is a huge achievement is just a serious misconception, and the idea that natural male leadership is the result of some patriarchal conspiracy is just false. Men do not dominate computer science because they have some conspiratorial advantage. Men and women are different. I did four books on that subject, and I don’t regret any of them. Men and Marriage is still in print and selling, and it’s one of my best books.

Brian Rose: I’m going to go read it. What do you make of the current dialogue in the social sphere, which is the opposite of what you just said?

George Gilder: I think it’s really bad for society. It’s creating sexual suicide. People get married later, they divorce more, they have fewer children, they lose their links to the future. I think a man’s tie to the future passes through the womb of a woman, and these links are being broken and twisted and subverted by a culture that exalts some false ideal of equality.

Brian Rose: Yeah, I think you might have some good points there.

2:17:00 Second part of that question: the best advice you ever received. It could have come from David Rockefeller, Henry Kissinger, someone else, a writer, or your father.

George Gilder: Well, David taught me about work. Here was a man who epitomised money. He was head of Chase Manhattan Bank and one of the richest men in the world, from the richest family in the world for a long time, and he worked harder than anybody else I ever saw. He worked late into the night, he was up early in the morning. He was a compulsive worker, and this told me that what was important wasn’t money as an incentive. What was important was goals and aspirations and ideals and moral disciplines.

Brian Rose: Powerful lessons. Last question: to that 20-year-old that’s out there watching us or listening to us right now, what advice do you have for them? If they’ve consumed a bunch of the ideas in this book and they’ve listened to us today, what’s the one thing they should go do to take action, and not let this just pass and wash over them?

George Gilder: Well, I think they shouldn’t exaggerate the value of credentials and qualifications and educational rewards. The real learning process behind capitalism is personal, and it often entails defying what all the experts tell you. All the great entrepreneurs’ stories are about people who produced a surprising and unexpected advance because they defied what all the established powers had told them before.

When everybody in the world is lining up to applaud Greta Thunberg for declaring that the world’s coming to an end in 12 years because of bad weather, it’d be wise to scrutinise the assumptions of this. When the richest man in the world is just about to waste $10 billion on changing the weather, you can really see a mania at large. People should not be browbeaten by people saying 97% of scientists have a consensus that the world’s coming to an end in ten years, or 12 years, or whatever it is Greta gives us. This is just hokum.

But many students in American universities now are accepting the hokum. They believe their lives are going to be worse than their parents’. They believe that there’s some kind of doom hovering ahead, and if they all do believe this, they’re probably right. If a whole generation of young people gets demoralised and spends all its time trying to stop things rather than start them, as the colleges teach them… Where America is the world’s leading country is in stopping things with lawyers. I think they should be contrarian. Don’t do what everybody else is doing. Do what you see that’s unique, and that’s how they can add to this world.

Brian Rose: It’s really well said. All the great entrepreneurs in this world did it their way, and that’s what we need: that creativity, which is capitalism without the insurance policy. No guarantees. It has to stand on its own; you have to go do it out there; it has to be risky. And then that wealth gets rewarded to whoever did it, so they can invest in these long-term illiquid investments that take us to the next level.

George Gilder: Illiquid, yeah. Exactly.

Brian Rose: George, real pleasure sitting down with you. I love all the stuff in this book, and people should go out and get a copy of Life After Google. You’re going to have to come back and see us again in the future, because there are a bunch of things we didn’t even cover. Thanks so much for your wisdom. Some of your ideas I’m barely getting a handle on right now, because they’re so grand and so contrarian and quite revolutionary, and obviously you think a lot about this stuff, and I really appreciate that. So thank you so much. All the best, George.

George Gilder: Thanks so much.