Episode Transcript
[00:00:00] Technology is always and everywhere a tool, not an autonomous agent. It requires humans to operate, which they will do in order to satisfy human desires. When we say technology saves labor, what we really mean is it leverages labor. It gives to labor powers that were previously impossible, inconceivable. Even only in the aftermath of witnessing its novel capabilities do we articulate the that a car gives to a man the literal physical power of 200 horses. We do not start by imagining squishing 200 horses into a metal box.
[00:00:41] The best in Bitcoin made Audible I am Guy Swan and this is Bitcoin Audible Foreign what is up guys? Welcome back to Bitcoin. Audible I am Guy Swan, the guy who has read more about Bitcoin than anybody else you know. And we're reading a little bit about AI today. I know we just did Claude code, but this is something, this is what we talked about with Alan Farrington. If you did not listen to that chat, I was a really, really awesome a conversation and we actually postponed and we're actually going to go ahead and schedule it, I think to have one that was a conversation far more geared toward AI because there's a lot of things that I wanted to go over with him because he has been kind of diving down that rabbit hole quite a bit as well. And today we are reading an article that he wrote, Noster article that I thought was just really good and just interesting and it was way very much aligned with the way I was thinking about things. And I thought he just made some really, really good points.
[00:01:56] And I think you guys are really going to like this, especially if you're like, are you afraid of AI Super Intelligence and the takeover and like the job replacements, all of this stuff, it's all going to be terrible and awful. If you spend any time thinking about that and what the damage and dangers of AI are going to be and Super Intelligence, then I think you should listen to this episode. A shout out to Leden that's Led in IO they do bitcoin backed loans and and one thing that I don't think people realize is most of the bitcoin backed loan options you actually have to pay the interest every month. But with Leden you actually don't. So you can take out a loan and it will accrue interest. You obviously can pay it down and you can pay the loan down just on its face. There's no penalties or anything. You just pay as much as you want, anytime that you want. But you can also just accrue the interest if like let's say you're making an investment that doesn't have a return for six months. It's just entirely up to you how you want to pay it off during the term length. And it's also super easy, easy to refinance anyway. Bitcoin backed loans are a great way to get fiat out of your bitcoin without selling your bitcoin. And you should be insanely selective about who you trust. And I think LEDN is a trustworthy company that has proof of reserves and has open books and they've survived a lot of terrible times in the market and so that's why I've used them. You have a special link with a little bit of discount right down in the show notes. Also check out pub key that's P U B K Y.
[00:03:27] This is kind of a proof of concept for what they're building over at Synonym, which is an entirely an entirely new protocol stack for decentralizing the web. And one of the things that I really want you to check out if you're a builder is Pkar. It's PK Pkarr and it's essentially a DNS. It's a domain. It's a way to be able to connect and find servers and other people hosted on the BitTorrent mainline DHT. A bunch of you might not know what that means, but basically it means that it's domain names that can't be taken down. So what namecoin tried to do except without a shitcoin, check it out. Then there is a git chroma co for light health. I really like my Sky Portal mini. I kind of use it as like a combo nightlight and like a walk around because I can make it a full amber light. That's actually the only way I've used it. But I just can't wait until I get my studio set up because I think it's going to be a combo. I think I'm just going to be able to slot this thing on and off for kind of studio light, but then also have a battery powered amber light that I can just kind of move around and use as needed. 10% discount with code Bitcoin audible by the way. And lastly, get your tickets to the Oslo Freedom Forum hosted by the Human Rights Foundation. This is the center for the Fight for Freedom where you hear the stories, you learn about the tools and meet the activists and the real journalists fighting for freedom around the world as well as their financial Freedom report which is a fantastic resource. Links and details in the show notes with that let's go ahead and get into today's read and we will get a little guys take at the end. We are diving into the world of AI with an article titled Vibe Capital Accumulating by Alan Farrington In Scientific Culture and the Making of the Industrial West, Margaret Jacob argues that the Industrial Revolution started in Britain as opposed to France, the Netherlands or Germany due to its culture welcoming or even encouraging tolerant public debate, mechanical and physical reasoning, experimentation and entrepreneurship. Jacob repeatedly throws shade at simplistic or even economic historiographical assumptions that some combination of knowledge and capital are all you need for Homo economicus to industrialize, as if following a textbook chemical reaction devoid of any motivated human beings. Culture, she argues, is significantly more important. This is kind of obvious if you have read Bitcoin is Venice, but it doesn't hurt to be independently validated. Again, this isn't the kind of post in which I am inclined to quote Jacob at length. I I recommend reading it if you are into that sort of thing just outlined. Still, I bring it up to introduce the context of the Industrial Revolution, on the one hand to be returned to later in this post, but on the other hand to introduce the argument by singling out a point she makes in a handful of places. Public promoters of novel scientific understanding and technical progress in Enlightenment Britain would go to great pains to emphasize that machines create work for the poor specifically as opposed to replacing it. Jacob even implies on occasion that this was sneaky rhetoric verging even on propaganda promoted in public discourse for the selfish purposes of the newly minted capitalist class.
[00:06:52] Jacob may be performing a kind of apologetics around this sleight of hand on the part of the figures she's mostly otherwise championing. But of course in a purely economic analysis, outside of the social and historical lens Jacob adopts, both could be true.
[00:07:07] It depends on your perspective. From a static perspective, sure, steam powered industrial machinery does the job of a hundred men, but from a dynamic perspective we must recognize that opportunity costs are real and that any job such a machine could do almost certainly couldn't be done economically by a hundred men prior to it existing.
[00:07:32] So the static comparison is irrelevant. It is only even conceivable after the fact. We retain linguistic traces of this once obvious truth in how we talk about cars. A 200 horsepower car implies dramatic improvement, not equivalence, because it is not physically possible to perform the same tasks with 200 horses. There are not 200 horses obsoleted by the existence of a car.
[00:07:59] There's just newly viable economic tasks.
[00:08:03] And so since nothing is ever new we find ourselves in the midst of only the 20th or 30th major technology revolution since the birth of industrial steam power, and yet another moral panic over the end of work. I am talking of course about LLMs.
[00:08:20] While AI will do all the jobs is both a stale, decades old meme at this point, and is so vague in general as to be difficult to debunk. And this AI cycle has thrown up the neologism of Vibe coding. I like Vibe coding as a concept, but also as a standard bearing meme, as it presents a kind of memetically powerful black humor to the effect that the code is coding itself, a mergerd that is easier to pin down but also funnier to mock. The AI doomers would have you believe that the ability to Vibe code spells the end for coding as a profession when which recursively spells the end for all valuable work relying on human thought, and that all the time spent learning any skill, coding or otherwise, is now a sunk cost to be covered only by working at McDonald's or playing video games on UBI or whatever. But fear not, for I am here to explain to you that this is extremely foolish. P parenthesis doom equals zero as the cool kids might say, this time isn't different, and the reason this time isn't different is the same as the reason every other time wasn't different.
[00:09:28] Technology is always and everywhere a tool, not an autonomous agent. It requires humans to operate, which they will do in order to satisfy human desires. When we say technology saves labor, what we really mean is it leverages labor.
[00:09:48] It gives to labor powers that were previously impossible, inconceivable even. Only in the aftermath of witnessing its novel capabilities do we articulate that a car gives to a man the literal physical power of 200 horses. We do not start by imagining squishing 200 horses into a metal box.
[00:10:09] As Steve Jobs eloquently put it, the computer is the bicycle of the mind, to which I once less eloquently added, this is usually understood as commentary on technology, but I think it is more about capital, a less romantic framing perhaps, than economic potential. Energy Capital is tools jobs. Point is just how potent software is as a form of capital. But ultimately all capital magnifies the desirability of the output of some exertion of time and energy.
[00:10:43] A bicycle is one example, and a computer is another. At the risk of mixing metaphors, capital is the bicycle of labor, of time, of effort, and of the grind to produce value by hand.
[00:10:57] Note, by the way, that bicycles do not ride themselves.
[00:11:02] Humans ride bicycles and while they consume three times fewer calories and go three times as fast as running humans, they nonetheless do not replace nine humans.
[00:11:13] This is so painfully obvious it might just justify all these confusing metaphors in allowing us to recognize that all capital ultimately rests on human capital.
[00:11:23] Technologies may obsolete other technologies, but they never obsolete people, because people can learn to use them.
[00:11:31] This may seem curious in the scheme of people losing their jobs because they are replaced, if not by AI, then by literally any major technological shift in history.
[00:11:40] Consider, for example, that In Britain in 1650 there were roughly 2.1 million agricultural workers, whereas today there are more like 700,000.
[00:11:49] That's a lot of unemployed farmers.
[00:11:52] The trick here is once again a static versus dynamic view. 1850 is a much more relevant marker, rounding to 50 years of the Industrial Revolution having taken hold in Britain. Consider, for example, that the growth in non agricultural jobs even from 1800 to 1850, which never mind from 1650, exceeded the entire population at 1800. This was on the order of 10 to 100 times the gradual loss in jobs in the agricultural sector in the same period, and was entirely the product of the same mechanical advances that were ever so slightly reducing the agricultural workforce. It is worth noting that none of this is to dispute the likes of Wendell Berry in arguing that agriculture shouldn't be valued. Conflating work with value is an unfortunate modernism that is outside the scope of this post. To evaluate, to get back on track, we might offer that being freed from the necessity to work in agriculture allows, but does not require the space and time to value it more deliberately and conscientiously than otherwise. At the dawn of the steam engine, surveying the economic landscape with an eye to what might change, one sees pretty much nothing but agriculture. One imagines such improvements as pumping water for irrigation or driving mills. Eventually the engines become portable and start to work on tasks like threshing. I tactically left out above by the way that the expression horsepower was coined by none other than James Watt as a way to articulate the capabilities of his new machine. So in a sense, the origin of the phrase really was to communicate the ability to replace horses. But but this only makes sense for agricultural or even industrial enterprises with perhaps four horses or eight at a stretch.
[00:13:37] But of course, 20 horsepower engines and above performed tasks that were unfathomable before their existence, and they created orders of magnitude more jobs than they destroyed. Even that is inexhaustive because it assumes a direct replacement, as opposed to engines of merely one horsepower, taking up less space or eating less hay and taking fewer shits than a horse, and so horsepower quickly becomes useless as a real equivalence and more like a term of all or a unit of account. Lul. To recap then yes, we do lose some jobs as machines leverage human labor. This is inevitable and can cause local hardship about which we shouldn't be callous. But given humans are not obsolete machines, but rather the malleable operators of an unbounded array of mechanical advances, we gain significantly more jobs than we ever lose. And we get significantly wealthier in aggregate the more capital we accumulate in this manner.
[00:14:38] It's worth noting a slightly different perspective on the statistics also. In Industrial Revolution Britain the decline in absolute numbers was relatively gradual, especially when smoothed out over longer and longer periods, whereas the decline in the proportion of the overall population was was much more dramatic, from roughly 65% in 1650 to less than 1% today.
[00:15:01] This is leverage. This is power.
[00:15:05] 64% of the population is now free to create things other than food and more to the point, are perfectly capable of doing so. They are not unemployed, but compounding away creating orders of magnitude more wealth than you could even begin to explain to a 17th century Brit jumping ahead from the Industrial Revolution, but not quite all the way to today just yet, I strongly, strongly encourage the reader to watch this documentary on YouTube in which a 1982 British television crew was sent to Japan to report on the daunting prospect of robots. The video is unintentionally hilarious because while the entirety of the surface level content can be reduced to capital accumulation creates improved employment opportunities, there is another layer of interpretation available in recognizing that the British narrator seems incapable of recognizing what he is literally seeing with his own eyes and even accurately reporting on.
[00:16:06] Clearly profoundly pwned by social inclinations and demoralized by the malaise of British industry produced by exactly such inclinations in others around him, he acts as if he alone has the wisdom to predict that the entire situation is paradoxical and and can only end in misery. It is tempting to transcribe the entire video, but I will restrain myself and pull out some choice quotes.
[00:16:31] Japanese car manufacturers can afford to pay high wages and still undercut the competition. This one Nissan plant turns out nearly half a million cars a year, equivalent to 50% of the British car industry. It's volume production like this that helps keep costs down, and every Nissan worker has at his elbow several times more capital equipment than is available to a British car worker.
[00:16:53] So far, so good. Immediately followed by the following interview snippet with a factory worker. What happens if all of this work is robotized. Even if robots were to be introduced, we would be given different jobs with better status, so I don't believe the introduction of robots would mean we would lose our jobs.
[00:17:09] This might seem like a positive message, but I'm telling you, it's the way he says it that is comic gold. You just have to watch it. His tone is such that he may as well preface every remark with you'll never believe it, but patient enough viewers will get a good chuckle in discovering around the 20 minute mark that the only Japanese they could find to say anything negative about this whole situation was, wait for it, an economist, and clearly a western trained one at that.
[00:17:36] So even though the narrator is accurately reporting on the refutation of his own ridiculous beliefs, he can't help but end the segment with if once the robots become so numerous that they are regarded as rivals rather than colleagues, workers and management may find themselves pulling in opposite directions, and once the full potential of Japanese robots is realized, they could threaten everybody's jobs.
[00:17:59] As my friend and occasional co author Sasha said, having brought this marvelous material to my attention, you have to keep in mind the early 80s British intended audience so as to translate these ornate yet nonsensical locutions into something more straightforward like but these robots will kill jobs. Oh my God. In Britain we have super high unemployment and yet we don't even have robots. Imagine if we had robots. They're taking our jobs. Can't have robots.
[00:18:26] And of course this all comes back to culture. This illiterate nonsense is how most people thought and still think in the uk, which is why we have no real industry anymore. Just bullshit fiat services.
[00:18:39] Meanwhile, the countries with the highest rates of industrial robot usage also have the highest rate of industrial employment.
[00:18:46] Much strange. So surprise. Wow.
[00:18:50] From 1950 to 1980, British industrial output roughly doubled in inflation adjusted terms, while Japanese industrial output went up 20x. If your explanation of this doesn't include general social and political attitudes to the merits of capital accumulation, that is to say culture, then it is wrong.
[00:19:11] What does any of this have to do with Vibe coding? That this time is not different and not much more. I think the first and most essential intellectual exercise is to get clarity on what Vibe coding really is as a function of what LLMs are really doing.
[00:19:28] At the risk of yelling at clouds, I hate artificial intelligence as an expression because it is needlessly confusing. It makes this technology sound like a God, a truly autonomous agent that truly does replace people. This of course is retarded. I've dabbled with calling them statistical linguistic algorithms, whereas Fancy autocomplete has become a bit of a cliche, but I am also wary of downplaying their capabilities. I don't at all mean to dismiss them. My point is to praise their potentially positive effect while contextualizing it appropriately as something like leverage for the mind. Comparisons to steam engines only get us so far before becoming confusing, and besides, we are not introducing LLMs into predominantly agricultural societies.
[00:20:13] Let us consider a more practical comparison. I think LLMs are like calculators or spreadsheets, but for words instead of numbers. Pick according to your age and formative experiences. What electronic calculators enabled was an interface for people to perform much, much more complicated arithmetic operations than they could possibly hope to have done in their heads or by their own workings with pen and paper. Spreadsheets generalize the operations and the interface by making it even easier to treat different types of data as numbers to be computed on and returned to whatever original form they were presented in.
[00:20:50] LLMs are word calculators. They do the same thing, but they let you ask in words and get answers in words as well. Since code is a form of language, hey presto, code itself can be computed on in this way.
[00:21:06] The etymology of the word calculator is worth considering in a similar vein to horsepower. It was originally that of a human who calculates at first with reference to logarithmic tables, but as time progressed with mechanical adding machines in the 18th century right up to early electronic computers in the 20th. It is a profoundly good thing that people don't calculate anymore, just as it is profoundly good that such a small proportion of the total work in agriculture.
[00:21:36] This is not because the latest edition of Excel comes with 200 brain powers of human Equivalent Arithmetic capacity, or TERA brain powers, more like. It is because Excel can not only perform calculations that no human could do in a lifetime of the universe, but also comes with an interface that makes this easy, that provides a form of leverage to the limited bandwidth of humans to enable the performance of previously inconceivable tasks, and to free up these humans to intelligently and adaptively accumulate human capital in other areas that then informs their application of this immensely powerful tool. If you fail to grok this, you will slide down the slippery slope to proclaiming that computers must have already put 20, quadrillion human calculators out of work.
[00:22:29] Accumulating capital in other areas could be anything at all. The cheery trope of Vibe coding is a total software noob, building a mildly useful app relevant to their hobby, maybe even to their job. But it can come full circle. One can Vibe code as a way of becoming a better software engineer by accumulating human capital relevant to the task of coding. And you don't need to take any of this from me, a think boy shitposter. You can instead take it from Kali, a doer of actual things I've Vibe coded almost a dozen weekend projects this year, and with every single one I've done something I've never tried before. Whether it's developing for a wholly new platform, using a completely new JavaScript framework, or accessing hardware APIs I have zero experience with, it's incredible how much you can learn by fully submitting to the Vibe. Instead of spending days researching the tools I'd like to use, I'm just using them. In the process, I'm learning new things every single day. The learning experience is much more intense than it has ever been. In my rather long coding career, I've never learned as much about programming as I did in the last year. Insane. If this isn't the singularity, I don't know what is.
[00:23:38] You could even push it to the borderline satirical in Observing further that LLMs are themselves software, are the product of human ingenuity in utilizing other software, and hence that one's efforts in compounding capital accumulation may be directed to improving the functionality of LLMs. In any case, the obvious extension of Cowli's argument, beyond his personal reflection is that the result of all of this will almost certainly be more and better coding. One might instinctively scoff at this and think something like but Vibe coding constantly throws up mistakes. It's nothing like a professional, and it might even be dangerous if the user doesn't know how to identify and fix these mistakes. This may be true, but it could hardly miss the point by Moore. It's like saying that calculators make us lazy in our mental arithmetic, spreadsheets invite errors in data tabulation, or steam engines invite reckless and unpredictable application of perfectly well understood horsepower. A tool is only as effective as its human operator. We are very, very early in understanding how best to use these tools, and being bearish on the basis that somebody somewhere used it stupidly is, well, stupid. Mistakes are the obvious price of experimentation, and the nature of experiments is that they don't always work, but it is also their nature to be reproducible. When we experiment with creating new tools, we explore the potential to widen access to their product. We democratize leverage. We quite literally empower people.
[00:25:09] I trust Callie that this is as revolutionary as it sounds, and yet the very nature of radical technological advances is that you definitionally cannot predict what will happen next because knowledge is dispersed and invention and entrepreneurship are irreducible mental phenomena. Hence, with the appropriate conceptual and historical lenses, I think you only really have two options in dealing with this. Option one is you believe it's all a nothing burger, the latest bubble of easy money blown up by Silicon Valley. Perhaps Option two is you believe it's the most important thing in recent history, maybe one of the most important things ever. Admittedly, there are more options, but they clearly sit somewhere between these two extremes. In the case of option one, nobody is going to get any poorer because nothing is going to change. In the case of option two, a few people might get poorer in the very short term, but humanity as a whole will get much, much wealthier over every other period of time.
[00:26:05] Although I cannot predict it, I would be very surprised if LLMs change industrial society and as much as the mechanical power devices of the early industrial Revolution. But then again, imagine if they did. Imagine a 100x increase in leverage over computation on numerical representations of language, leading to more new and previously unimaginable jobs than the entire current population, with only a slow and gradual decline in roles superficially replaced.
[00:26:36] Can you even imagine it? Maybe it's not possible, but whatever it is, it's awesome. Which brings us back to Jacob to conclude on a question of culture, the literally unfathomable benefits of technological advances will accrue to those cultures that best inculcate their adoption. The act of creating capital isn't a spontaneous physical event. It takes a mind, and minds exist in social settings.
[00:27:03] The more a culture encourages tolerant public debate, what today we would likely broaden to conceptual reasoning, experimentation, and entrepreneurship, the more likely its constituents are to generate worthwhile industrial advances that give more tools to more people and ultimately benefit everybody.
[00:27:25] So what do you want to do anan? Do you want to bitch and moan about how people are finally obsolete because this time is finally different?
[00:27:33] Do you want to tell people they are stupid and redundant and pay them to do nothing to placate them? Do you want to go around destroying physical capital to save jobs or do you want to embrace empowering people to do things they couldn't previously do? Do you want humans to flourish? Do you want to vibe capital accumulate?
[00:27:53] Is P doom 100% or is it zero just like every other time?
[00:28:00] Alan Farrington Block 910,209 thanks to Callie, Gigi, Pablo F7Z and Jack for the discussion that stimulated these salts.
[00:28:10] This is why I think economics is so important to understand, because this was my natural inclination, and I think he's totally right, is to understand like it, it requires you to think in the context of what the purpose and specifically Austrian economics, because he makes the funny joke or the pointing it out that it was actually an economist, quote unquote, who was spelling doom and gloom in the video. So it clearly matters what kind of economics you learn and how your economic framing of the world is.
[00:28:45] But there's just a very, very simple reality here. And it's just, it's funny that this has been the story since forever, is this new technology is going to take all the jobs and then nobody's going to have to work. When has that ever been true? It's been the argument and the imagined disaster scenario for every, every great technological shift in history.
[00:29:12] So when has it been true?
[00:29:14] The simple reality is that when accomplishing things that we desire take less time and energy to do so we simply discover and come up with other things that we want to do. There is no end to what we want to attempt or what we hope to achieve. And necessarily our technology has to continue to get orders of magnitude more efficient, faster and more advanced at accomplishing all of the various steps of all of the infinite number of things we want to accomplish in order to accomplish things of orders of magnitude greater import or difficulty. Like seriously, how do you think we put people on Mars? How do you think we become an extrasolar system society? You think that happens while we're still having to manually create all of our software? That that doesn't occur after orders of mag, like, like hundreds, thousands, millions of times as much experimentation and capacity to produce or create or attempt things, or that we would somehow a thousand x or ten thousand x in one very narrow specific type of technology, but that all of our other technology would just be stagnant and it would just kind of look the same as it does today? Of course not. It's all going to move. And in fact it's the only reason you have those ,thousand x or ten thousand leaps in one type of technology is because you've already made 100 x's and a thousand x's in every other technology around it. And suddenly that opening is possible.
[00:30:50] Suddenly the pressure to actually move some narrow and more difficult or far more, far slower technological leaps, things that happen at very base technologies like energy, like fundamental, the nature of, like kind of our scientific understanding, these things are slow and the leaps happen, change our entire thinking and allow us to advance in a completely different way and on a completely different path. But those happen very rarely. They. They happen. It takes a lot to build up and to get the.
[00:31:24] The image and the data necessary to have the perspective. Because all of our technology allows us to have a new perspective and to see just a little bit more detail. And we inch by inch see more and more of the picture until suddenly we start to see contradictions in the old way that we thought about things when we had limited data. This is exactly what the Internet has done. This is exactly why the entire world is going through an identity crisis right now, is because we're recognizing that the old narratives and the old way that we used to look at the world wasn't accurate, or that the way we consumed and quote unquote, assessed technology and the trust that we put into these very powerful and centralized institutions was actually not earned. And now we can actually get information and data from people that is not filtered through them. But it is specifically the technology that has allowed us to see around these things, to get a clearer picture of what's going on that's created this identity crisis. And it's why society is bifurcating so viciously. But all this means, all this means is that we are going through a massive shift in how we will use technology and what technology will make available to us. We what what now becomes possible because of the way we technology works. And I love this, this concept is that we only in hindsight go back to think about how to relate it to.
[00:32:47] To what, what kind of comparison is even worthy of being mentioning. Like the idea of the, the horsepower, right, is that technology specifically gives labor powers that were previously impossible, inconceivable even.
[00:33:01] Only in the aftermath of witnessing its novel capabilities do we articulate that a car gives a man the literal physical power of 200 horses. We do not start by imagining squishing 200 horses into a metal box.
[00:33:20] And another major point that I think is really worth focusing on or thinking about in this context too is and if you've got an economy where the technology is so primitive that you only have a hundred jobs, there's literally only 100 different things to occupy yourself with, well, then competition is extremely high and the poor are worst off based on the degree to which other people can do the job better and optionality is extremely low when a new technology comes along that completely changes the nature of that job, the nature of producing.
[00:33:58] I'm going to stop using the word job. I'm going to try to focus on what actually matters, because a job is completely arbitrary. A job has nothing to do with Anything. The last thing we ever want to do is maintain jobs. The question is how much resources, how much of our resources and time does it take to produce a thing that we want? That is the question. If a job is taking more to produce, taking more energy and resources to produce the same thing, then we want that job to die. Because it's got nothing to do with jobs. It's got to do with how much time and resources it takes. Because that is our level of poverty, that is our level of wealth and prosperity is how much does it cost us to get what we want or need to produce and live. A job is literally just a made up structure for how we think about, in a very arbitrary sense, the simplest and least conflicting way to, to share the cost, share the reward of the production. But it in no way is something that is necessary and it's not even something that we want. It's just kind of a stopgap until the next thing comes, the next technological improvement comes along that allows us to compensate people and to work together in a more adaptive way with far more explicit and immediate feedback. So a job is not the point of it. The last thing we would want is for everybody to have jobs using spoons to dig holes. When one person could come through in a day and do the work of literally thousands of men doing this with spoons using an excavator. Sure, thousands of men have jobs using spoons to dig a hole. But now the product of that hole is whatever resources that hole is important in order to produce has to sustain the livelihoods of thousands of men. Which means that if the hole isn't thousands of times more productive and it's still just a hole for a foundation, for a building or a house or something, well then that means that whatever tiny reward comes from accomplishing that is the tiny amount that's divided amongst the thousands of men needed to actually get the job done. But when one person can come in and do it with an excavator, now we can not only use that, that much larger reward to pay for the person who's using the excavator, but we can then give an excavator to all thousands of the men who were then using, who had been previously using spoons. And we can thousand x the output the reward, because we can have a thousand x the number of foundations and a thousand x the number of houses. And now we're splitting a vastly greater reward across the exact same number of people.
[00:36:38] Always think about it in the terms of productive capacity of output. Imagine you're digging a mine, and at the bottom of that mine is a single diamond.
[00:36:48] If it takes 10,000 men to dig that mine because our technology is so crappy that we're all having to do it with spoons or shovels, then whatever that one diamond is worth has to be split up among 10,000 different people.
[00:37:02] If our technology is so advanced that one person can dig that mine and find that diamond, the one person who digs the mine can get the reward of the entire diamond. The entire diamond goes to them, and all the other thousands of people can actually go dig their own mine and find their own diamond. And this is the very nature of value. There is no end. It's not like diamonds are actually scarce. Value is not scarce. Humans create value all of the time. We create new things to value when we have more time to think, to consume, to create and expand the scope of what we are actually able to accomplish. Machines, specifically, produce work for the poor.
[00:37:42] And going back to the notion that, you know, 100, we've got 100 separate jobs in the economy. That's it, right?
[00:37:48] Or occupations or different things that we can produce. We've simply limited ourselves to 100 things because that's all our technology can actually, actually has the capacity to produce.
[00:37:59] Well, then the poorest people, the least skilled people are in the highest competitive environment.
[00:38:07] There is a huge oversupply of workers per type of job, per type of thing that needs to be produced. You know, you've got, let's say you've got a hundred million people in a hundred different, in 100 different occupations or things that can be produced. Well, then if you just spread that out evenly, you've got a million people to compete for in order to justify your share of the reward for producing that thing, which means everybody from 900,000 to a million are going to get paid pretty damn low. What happens when there's a few people on the market, but there's millions of houses per, per each individual looking to buy available for sale in the market? Housing prices plummet. That's what happens. Now imagine technology is such that we have the capacity to produce hundreds of thousands, millions of different items, products, services, content, types, and even more importantly, all of the consumers have more time to consume those things, have more capacity to expand and try and afford to buy those things. Well, if you have a million people looking to accomplish tasks, and you have a million different tasks to accomplish, you actually have a far better situation where more and more people can specialize in one tiny little niche, in one tiny little, little piece of the cog of the entire machine and justify their part of a reward that is explicitly growing because of the increased specialization and the increased technological innovation that allows us to produce more and more in a greater and greater variety of output. But none of this happens without technology replacing the old jobs or changing the concept of what the old job actually is.
[00:39:53] Like a computer, which used to literally be a person who was hired. This is very simple and it is very fundamental. Every single person who was hired as a computer lost their job as a computer. But did computers take away their jobs? Are we poorer today? Are more people out of work because computers exist? Or is everything vastly easier to accomplish? Is every output vastly more complex and possible because of all of the computers that we have, because of the Internet, because of our ability to communicate, because our ability to actually organize vast amounts of data and large complex systems of, of communication? And that while there used to be a thousand, ten thousand people who did the job of a computer, now there are literally tens, hundreds, literally billions of people around the world who are working, working with and in the industry of computing to accomplish literally every part of society that we do everything that we produce anywhere in the society better and more efficiently and with less input, resources and energy and time than it did before we had them.
[00:41:08] AI isn't different.
[00:41:10] AI isn't different. In fact, it could not be more beautifully the exact same thing, just really aggressive and with a really short time frame because of all of the previous technologies that we have advanced so great. And the communication network that we have in the Internet that is global and instant, because of that, it's moving so much faster than our previous technological advancements and major kind of innovative shifts, like foundational shifts in lower level input technology. Because this is a very low level technology. This is prior to, I mean I've, I have straight up Vibe coded programs and I have not. I've learned more about code since LLMs than I knew previously in my entire day. And I took a whole course on like Python and it still didn't, I didn't understand the structure of an application. I didn't understand the picture. And that's what kind of drove me crazy about it is I was just kind of learning syntax and the, the way like lines I was looking at very small, like right in front of me. And I felt like after I got out of that and I did all of this and I like tried to dedicate every little, every a little bit, every single day to it for a good long time and I came out of it still Thinking like, how the hell do I make an app? How the hell do I actually do anything with this? And I've always thought this is kind of part of the problem in so much of how we educate and how we think about education is that we don't go from, like, the big picture. Like, what's my goal? You know, like, I go into chemistry, not. Not go into a chemistry class and start learning about atoms and, you know, molecular weights and all of this crazy stuff. And then I'm supposed to take these building blocks and, you know, electrons, atoms and neutrons and protons, and I'm supposed to put them together and start understanding, like, how carbon and oxygen and hydrogen all stick together and all of this stuff. And I'm supposed to come up with this big elaborate thing, but I have no relationship to it, right? I have no idea why it matters.
[00:43:07] Rather than coming from the perspective of like, oh, I'm trying to accomplish this thing, or I have this chemical or something, this stuff has gotten on me, how could I take it off? What's the relationship for it to some other thing? Which is exactly how we go about discovering chemistry. Which is why I think it should be taught exactly the same way. From the perspective of what happens when I mix this and this. Okay, why it seems as though this substance neutralizes this other substance. Why would it do that? That's a useful relationship to the principles of chemistry, specifically because it was the useful thing that allowed us to keep experimenting to find out what the chemical, the relationships of those things are from a chemical perspective. And the exact same thing goes for software. And it's why, when I enter into a conversation with an LLM about building or vibe coding an app, my perspective is totally different than what would go in. When I'm looking at a course, you know, like I'm taking a JavaScript or a Python course online, I'm asking, okay, what's the framework? What is. And he says, I go, you want to do electron? It's like, okay, well, what's electron? What do you mean, electron? Why do I have to have electron? What does it do? I'm coming at it from, how do we go from a text file with a lot of code in it to something that I'm actually using?
[00:44:28] And that was the first thing I did, the very first thing I did was build like a four or five piece puzzle of just the framework of things so that I could do one tiny little thing in a visual sense on my computer. And that single interaction that took maybe an hour got me, I swear it painted a better picture in my mind of what and how coding works than the entire course I had with Python. I knew it was just math problems and linear logic that you just, like, you put together with if statements, and if then, and this, if this, then that. Like, I knew it was just a set of instructions and all the syntax and all this stuff. Like, sure, I learned some things about it, but I didn't conceptually learn what it was and why it mattered in the bigger picture of how I actually produce something that I could use, that I could relate to. But I am able to do that with LLMs. I am able to just give it some code and then ask, what piece of it does this? Which piece of this code takes this piece of information and sends it here? And then I'll find out, oh, that's not one piece. It's actually like five pieces working together. And I'll be like, okay, what are those different five pieces? Why is it that we need five different pieces? That's one of my favorite things to do, is just explore, explore code using an LLM. I swear this is going to be an explosion. This is going to be massive for, for producing software, for the world of software. This is going to make software a thousand times more ubiquitous than it has in the past, specifically because of the experimentation. And that was the big thing that stood out to me in the six weeks of CLAUDE code. The. The piece we read recently about, about using Claude and about a seasoned. A professional software engineer and how they were using it, is that they were experimenting and trying things that they never would have tried before, that would have taken them too long, that allowed them to work in different frameworks that they'd never even tried before.
[00:46:31] That experimentation is the heart of the economy.
[00:46:34] That is the thing that's going to fundamentally change so much experimentation. Trying something new, trying something you never would have tried otherwise. Because the capacity to use those resources or to use a little bit of resources in a completely separate way that now doesn't feel insurmountable, that is what's going to change everything. Because it will be the little things. Like, there will be 10,000 failed experiments, but there will be one thing that works and works in a way that nobody had actually expected it to. And that's going to be built on top of like, a brick, like a. Like a Lego block that allows us to build cities. And we're going to be finding those faster and faster and faster and faster and in greater and greater number and infinitely going forward. And it's going to speed up everything that's already been sped up. So I want to read a quote from this. It says, quote, the AI Doomers would have you believe that the ability to vibe code spells the end for coding as a profession, which recursively spells the end for all valuable work relying on human thought. And that all the time spent learning any skill, coding or otherwise, is now a sunk cost to be covered only by working at McDonald's or playing video games on UBI or whatever.
[00:47:43] Did photography end all art?
[00:47:46] Is art dead? Is content creation dead because painting is no longer king?
[00:47:52] Or did photography and ultimately leading to digital photography and the capacity to have a camera in everybody's pocket as technology continued to advance and make it smaller and more and more accessible, open us to a world of art that could not have ever been possible otherwise.
[00:48:13] Entire industries of expression that were literally inconceivable before it.
[00:48:21] Did computers replace all valuable work? Did computers replace all technical jobs and calculating and mathematical and systems design jobs?
[00:48:34] Or did it open us up to an entire world of systems engineering and thinking about how software and computers can be applied to any and every industry and take what was a small industry of, quote, technically skilled people and turn it into like, literally a third of the entire economy?
[00:48:56] So I would ask the AI doomers, what is it specifically about AI that not only makes it different than those previous technologies that completely changed how we did everything and made everything easier and made it easier to experiment and made our resources and our energy and time go much further and produce much more, much more quickly.
[00:49:20] How is it not only just different from those, but completely the polar opposite? What is it about this that has so drastically, completely reversed the basic economic reality that we have seen from all technical technological advancement in human history? Because all I can say is that from my personal perspective, it looks exactly the same, except that the capacity to produce more is so localized that I cannot see how this, this doesn't lead to an absolute insane explosion of education, of creativity, of self reflection, of discovery. Imagine what you can discover if you could just blast your way through parts of a topic that are necessary to kind of get a foundation for something else that you're trying to. Trying to figure out, and that you can start from an 80 to 90% accurate baseline on like five or six various topics or disciplines that you have no knowledge of, and that you can just kind of learn the most important pieces that you need to accomplish some specific task, and you can just specialize in like, the sixth thing in, like, the thing that's built on top of those Things.
[00:50:37] This is the, this is the sort of place that we're headed.
[00:50:40] And I'll tell you something, and this is not always the case. This is not universal, but it's generally true, is that the people who are excited about AI are the people who are using it, and the people who are scared of AI are the ones who are generally not using it very much.
[00:50:55] That should probably, that should probably tell us something about exactly why those relationships correlate. And I think it's also fair to say that a lot of the doom and gloom is because of how imbalanced and broken and debt suffocating in debt our current society is.
[00:51:15] So it's easy to see or think that the new technologies that come about are just going to exaggerate this massive systemic problem and to mistakenly conflate it with the technology, rather than a more systemic problem on which the technology is just sitting. And that is exactly why this show is about Bitcoin and why we talk about economics and money. Because the very base layer of our society is fundamentally broken. And all of these technological, all of this technology should be freeing up an enormous amount of time and making us vastly wealthier and give us a higher, a far higher standard of living. But once what most people just feel is that things are getting faster and jobs are getting more scarce. And that's a, that's an economic problem, not a technological problem. Technology is actually diminishing that effect. The damage being done by the inflation, by the debt, by the imbalanced monetary system that we have, that is this increasing inequality and pushing things up into the corporate and financial and political worlds. We're pushing all of the resources and capital ownership into those worlds because the new money is starting there and coming down. The constant technological advancements that we're going through and the Internet and all of these things that are making our lives better and making us more productive and capable are actually, are actually the only barrier to the immense amount of damage that that would be doing because the economy is getting like 5 or 7% more, 4 to 5% wealthier and more prosperous as time goes on. Like every single year while the money is being inflated 7 to 10%. So while we would be getting absolutely eviscerated by the enormous amount of debt and money printing and counterfeit that is occurring at the political and financial layers, we're actually getting less than half of its effect because of the forward movement of technology.
[00:53:11] But we are still on a net negative course. We're still being net destroyed. So people see, oh, I'm losing 3%, 5% of my value. Everything's getting like 3 to 5% harder. Why is everything getting harder when all of this technology is getting better? This technology is evil. It's taking my jobs. No, it's the thing that's actually saving you from feeling like things are two to three times worse than they actually are. Which means that the monetary structure, the system of counterfeit money printing and debt issuance is actually sucking up two to three times as much value as it feels like it's sucking. Because our lives are supposed to get easier and our lives are getting harder. Our lives are supposed to be getting easier and wealthier and more prosperous at twice the rate that we're watching it get harder every year. Now I have a few final thoughts, but I want to just thank our sponsors really quick. So Leden Ledn IO for Bitcoin backed loans.
[00:54:07] Been a customer of theirs for a while now and I am hugely thankful for this service in general because I have saved myself from having to sell a lot of bitcoin because of it. Do your research on the company. Check out my link. There's a small discount to the interest rate, but this is an incredibly useful tool if especially if you're on a bitcoin standard and you need the fiat and you don't want to sell the bitcoin. Also check out synonym and PubKey P u b k y Pububkey app. They have built a really incredible set of tools for re decentralizing the web.
[00:54:43] One in particular that I want to highlight is Picar, which essentially enables you to have a domain, a public key that people can look up and you can point to any device or any IP address or anywhere in the world on the Internet and nobody can take it away from you. You. Then there is Git Chroma Gitchroma co. They're all about light health and red light therapy and I've got a number of their products now and I have really, really enjoyed them. There's a 10% discount with code, Bitcoin audible and then lastly the Oslo Freedom Forum, run by the Human Rights foundation and their amazing Financial Freedom Report newsletter links to all of that. If you want to go to the Oslo freedom forum on June 1st to 3rd next year, go ahead and sign up now and get tickets. Everything will be right down in the description of this show.
[00:55:28] All right, so I want to leave this with a couple of different quotes.
[00:55:32] The first one is this, but given humans are not obsolete machines, but rather the malleable operators of an unbounded array of Mechanical advances, we gain significantly more jobs than we ever lose, and we get significantly wealthier in aggregate the more capital we accumulate in this manner.
[00:55:56] AI is simply a way to take a thousand x more advantage of accumulated information capital.
[00:56:06] That's what it is.
[00:56:08] Right now, our information capital on the Internet is extremely hard to take advantage of. It's extremely slow, and it is extremely manual.
[00:56:18] LLMs are a way to embed, to use computation, to embed the patterns of all of this information so that we can make use of it at a thousand times the pace we could without it, in exactly the same way that Kali or the I can't even remember the author's name right now, for six weeks of Claude code were able to build in completely new frameworks that they never even would have tried.
[00:56:47] Just because they can, they can actually use the accumulated wealth and information capital of thousands, tens of thousands, millions of other developers who have built these things. And they can use their general expertise on how software works and how these frameworks are likely to go together in order to kind of guide and nurture the, the output of this into something real.
[00:57:13] When information on the Internet grows to, you know, a million x, a billion times what any human could ever even make use of. And then new content, new code, new video, new audio, new writing, research, all of this stuff being added to the Internet is occurring at tens of thousands of times as fast as any human could dedicated every single minute and every single second of every single day could ever make use of it. It necessitates some eventual technological advancement to condense it, to make it useful in a thousand x, the individual capacity so that we can consume and apply the knowledge, the aggregate information accumulated on the Internet quicker, more accurately and more generally than we ever could individually.
[00:58:13] LLMs are a perfectly natural extension of the capital capital accumulated and thus the problem of actually sorting through and making sense of all of that information capital on the Internet and it is going to create, it is going to make us vastly more wealthy because of that. And I want to hit one more statistic because if you really think about one more quote, if you really think about the statistic in the quote, though, you would have to, if you just thought on the face face value of what this is, this should spell disaster. If our idea that new technology destroys jobs and takes away people's ability to produce because it replaces the them, this would necessarily be the worst economic disaster to have ever come about.
[00:59:04] Here's the quote. In Industrial Revolution Britain, the decline in absolute numbers was relatively gradual, especially when smoothed out over longer and longer periods, whereas the decline in the proportion of the overall population was much more dramatic, from roughly 65% in 1650 to to less than 1% today.
[00:59:29] This is leverage. This is power.
[00:59:34] 64% of the population is now free to create things other than food, and more to the point, are perfectly capable of doing so.
[00:59:46] They are not unemployed, but compounding away, creating orders of magnitude more wealth than you could ever even begin to explain to a 17th century Brit.
[00:59:59] This time is not different, and that's where we are headed.
[01:00:03] I'm Guy Swan and that's my two sats.
[01:00:16] Finish each day and be done with it. You have done what you could. Some blunders and absurdities no doubt crept in. Forget them as soon as you can. Tomorrow is a new day. You shall begin it serenely and with too high a spirit to be encumbered with your old nonsense.
[01:00:35] Ralph Waldo Emerson.
