The following is a rough transcript which has not been revised by The Jim Rutt Show or by Samo Burja. Please check with us before using any quotations from this transcript. Thank you.
Jim: Today’s guest is Samo Burja. This is directly from his webpage. This is pretty cool. This is what he leads off with. “There has never been an immortal society. I work on figuring out why.” Welcome Samo, how are you today?
Samo: Doing well. Thanks for having me on the show, Jim.
Jim: Yeah, this is going to be fun. I really enjoyed reading your book. Samo founded Bismarck Analysis, a consulting firm that investigates the political and institutional landscape of society. He’s a research fellow at the Long Now Foundation, where he studies how institutions can endure for centuries and millennia. He’s a research fellow at the Foresight Institute, and he’s a member of the startup team of Daniel Schmachtenberger’s Consilience Project. Today we’re mostly going to talk about his book, Great Founder Theory, which is available free as a PDF at Samo, S-A-M-O, Burja, B-U-R-J-A, that’s not how you pronounce it, but that’s how you spell it, .com. So if you want a copy, it’s free. Check it out. So we’re going to figure out something about how societies can last for a long time. How did you get interested in this?
Samo: To me the most interesting part of this question was trying to figure out the nature of, say scientific progress, or any intellectual progress, where I feel like the history books often present this as a history of these unmitigated triumphs, right? Where it’s there is an origin to the scientific revolution in the 17th century, all the way to today there is small incremental progress, new theories, and it works like a ratchet. It only goes in one direction. Now, of course, since that story is usually written starting in the 17th century, we can already tell that there is a part of the story that’s omitted. What’s omitted is, of course, like the achievement of the ancient Greeks, especially the Hellenistic period of ancient Greece, but also say later things like the Abbasid Caliphate.
Samo: So my interest in civilization as a whole started as an interest in science, because whatever approach you take to understanding the natural world, your body of knowledge lives embodied in a particular society, in a particular civilization. If that civilization fails, the vast majority of what you have will be lost. A classic example I like to give of this is that, of ancient Greek works, 94% of the authors that we know of, we know of only by name and reference. They don’t have any books associated with them. Can you imagine taking a book from the 21st century going through the list of references and only having 6% of them? That is significant attrition.
Jim: And it might be a plots in some domains. Yeah, the other one I use the example is that one of the most important materials of our society is concrete. It was invented by the Romans, but it was lost when the Western empire fell and wasn’t redeveloped until the 19th century. And one can argue, in fact, that the level of building technology in general did not recover to the Roman level, say 470AD until the 19th century, which is pretty fucking amazing, right? Something as fundamental as concrete and building buildings. So yes, it can definitely go both ways. So let’s step back a little bit, one of the things you start talking about early in the book is the idea of history, and why it’s important, and particularly theories of history. So let’s hear a little bit about why history is important, and the idea of theories of history, and what’s your theory of history?
Samo: Right. When it comes to a historical account of things, there’s always an immense amount of selection bias. The only question is, what kind of selection bias you’re dealing with? One of the things, since we mentioned the Roman example, is people sometimes make the argument that, Oh, nothing of value was lost because the very best works were preserved. I’m afraid that’s unduly optimistic. The reality is that if you live in a period of intellectual decline, it’s going to be the simplest works that are likeliest to be preserved. And we see evidence of this, you often have only the first few chapters of, say scientific technological works, only the first few chapters of history books, the introductory material. What tends to spread in a simplified environment is that which is still understood. So these historical sources, right? Have a hard time surviving big civilizational shifts.
Samo: One reason, again, is that it loses interest. It is, a history of the American Civil War is unlikely to be interesting in 700 years when it’s no longer of social, cultural, or political importance, or at least the perceived social, political and other importance. The second one is history books can be inconvenient. We see this both in the Roman empire, and where particular works that are flattering of one emperor might easily be disbursed, destroyed, lost, or at least not copied when the next emperor comes around. We see this in the transition from paganism to Christianity. And I would also argue that we saw it in recent centuries, with successive governments of different political orientations. Whether you read a flattering history of the Protestant Reformation often depends on whether the author is from a historically Protestant country, or from a historically Catholic country. And of course, we right now are lucky to have had both historically Protestant and historically Catholic countries, but the usual thing that happens is that there’s only one winner around. So you only see one perspective on a set of events.
Jim: Yeah, that is interesting. I was just going to mention, it’s interesting that the Westphalia settlement did actually lock in those two perspective, I was never really quite focused on that before, but it provided a parallax in the West of Catholicism and Protestantism, which as you point out, is historically pretty unusual.
Samo: Yeah. High quality recording of history, high integrity recording of history, is actually something that only a few civilizations really did. To the best of my understanding high-quality history emerged three times. It emerged with classical Greeks, such as the writing of Thucydides, who very wisely proposed that historians should actually primarily deal with the stuff that they personally have experience with, stuff that they are experts in. So he, as an Athenian statesman in general, felt called to write a history of the Peloponnesian War which he participated in. And fortunately for us, he was relatively objective as well since he got in trouble in Athens. Once you’re exiled from your home country, you perhaps don’t quite see it side of the war as being completely objective. You start being interested in what the Spartans have to say. And the second civilization that did I think a very good job of this, though with a much more severe problem of imperial censorship, was classical Chinese civilization.
Samo: They have very high quality historical accounts. People who were willing to sacrifice sometimes a life and limb to complete their works. The Records of the Grand Historian is possibly one of the best history books ever written. And the author there suffered a very personal cost for it. Rather endured, I think, rather endured castration than execution for the sake of completing that work, I think that’s quite something. The third period that I think has relatively good history is the early modern era of Europe. And if we’re optimistic, we could say it continues until the present day. And if we’re pessimistic, you could say that it’s starting to peter out in the last few decades.
Jim: Yeah. It’s interesting. And you are involved with the Long Now Foundation and I’ve heard something about those folks. I’ve been friends with Stuart Brand for a long time, who’s involved out there. And I know that’s one of their concerns is considering how much of our information is now in electronic form and in very specific formats, how do we preserve the information from the late modern era into the deep future? So it’s not obvious that, that always happens by any means.
Samo: Right. In particular there’s not just a direct loss of readability. And the people who might say that, Oh, with the advent of the internet, modern computing, nothing is ever going to be lost, to them I just recommend trying to open a third year old file in a format that’s no longer supported. And then imagining how difficult that might be two or 300 years later. Essentially every storage format is almost a form of encryption. Now, if we’re lucky, the future knows how to break it, if we’re unlucky, the future doesn’t know how to break it. But the true value of information, it’s essentially knowledge, right? It is communities of practice. It is when it exists in the minds of people. A physics textbook is much less useful than a healthy discipline of physicists who still know how to run the experiments with all the tacit implicit knowledge that entails, that perhaps even know how to extend, apply theories, perhaps even develop completely new theories.
Samo: Briefly earlier, you had mentioned in previous question, the theories of history as well. Everyone has an implicit belief about the future, about what truly matters. So whenever you rewrite the past, you’re rewriting the future, and there are particular visions of the future that encourage long-term thinking, and their visions of the future that discourage it. Historically, I think say the apocalyptic view of the future causes people to do the equivalent of slaughtering all your cattle because the ancestors will rise up and save you from the British, or perhaps the equivalent of eating the seed corn, right? Since the future is expected to be very short. The opposite perspective, the one that I think the Chinese civilization had was, we are immeasurably old and we have an immeasurably long future. With that perspective, society tends to make more long-termists decisions, where it tends to try to maintain things for the long run, tends to fund things sometimes just for the sake of them being old. Sometimes just for the sake of continuity with something ancient.
Samo: The real end of the library of Alexandria in ancient Egypt as, pardon, Ptolemaic Egypt, the real end was actually with about three to 400 years where funding hedges dried up. The library burning down is tragic, but the real death of that institution was when no longer would mechanics and philosophers be sponsored to study there, right? And books wouldn’t get copied. So what good is a book if no one reads it?
Jim: That’s a perfect transition to our next topic. Something that comes up again throughout the work is the idea of institutions. When you say the word institutions, what do you mean?
Samo: There’s a rather specific definition here where it’s related to also a definition of what I colloquially call an empire, which is a particular zone of coordination where institutions, or essentially these automated instantiated coordination mechanisms. Now, if the process is very, very automated, you might call it a bureaucracy. Wait, how could it bureaucracy be automated? It has scribes. Well, in this sense, automation means this proceduralized approach where you break down tasks into very small steps, where no participant needs to understand the steps for there to be a reliable output at the end, it’s a little bit like an assembly line. An assembly line in a factory, except it’s paperwork. Bureaucracies often go off the rails, so I’m often more interested in self-correcting institutions. You might see something like an institution that functions a little bit like an organized religion, where people deeply, deeply at various levels of the organization, believe in the mission of it, and they take it as their divine inspiration to remake it and try to maintain it into the future.
Samo: You might have something like an instantiation of a market mechanism, right? Where knowledge of particular individuals, adaptive individuals, can be factored back into the behavior of the institution as a whole. In general, the best lens to think about these, is that these are different social technologies, right? These are a type of software we implement in our minds and in society as a whole. And the introduction of new social technologies can radically reshape societies over time.
Jim: Yeah. Perfect. That was my next topic. Social technologies. When you use that term, what do you mean?
Samo: Social technologies is a very broad term, but the particular reason why I frame it as social technologies rather than necessarily saying something like culture, is that I want people to think carefully about the functional aspects of these every day interactions that surround them. Something as simple as politeness can be compared to a communications protocol. Something a little bit more complicated, like a bureaucracy, might be a machine to fit a particular purpose. Societies can fruitfully be described as either having certain features, or lacking certain features. So to say that the social technologies needed for capitalism were introduced from Western countries to what today we would call third world countries, or indigenous societies, thereby transforming them. That’s a meaningful statement. There’s something mechanistically different between societies as they go through these transitions, and not all societies go through all transitions, Emile Durkheim argued that Protestantism was vital and perhaps an unskippable step in the development of capitalism as he saw it. Yet we look at modern Japan, it seems to have picked up all the good parts of capitalism without having to convert to Protestant Christianity at all.
Jim: Of course those statements are by no means contradictory. It may have required Protestantism to invent the institution of capitalism, but that doesn’t mean it couldn’t be copied. Right?
Samo: Exactly. So social technologies, I think often are better thought of as social technologies rather than culture, because they can be recombined, right? They can be atomistic, right? Things that happen to occur together in one civilization might not need to occur together in a different civilization.
Jim: Yeah. They have trajectories, right? Brian Arthur’s book on The Nature of Technology is very good about this, it’s more narrow that it’s talking about actual hard technology, but he points out that most innovations aren’t actually inventions, but they’re recombinations in unique fashions of pre-existing components, or they’re the gradual evolution of one component and then adding it back into three other components. So it is quite interesting how that works. In your book, you lay down the marker that these social institutions are typically invented/ designed. And I push back a little bit on that in saying that, yes, there’s always design at various points, but there’s also evolution. How would you respond to that?
Samo: I would say that there is, of course, evolution in the sense that there is some selection for, okay, this is sustainable for the society in question, this is not sustainable for the society in question, or this is sustainable for subculture, or not sustainable. But my thinking is that we are remarkably conformist as a species, or perhaps at least right now we seem to be remarkably conformist. So we have relatively little variation. Also, we’re remarkably ignorant of the past. Sometimes even the recent past. And especially the social norms of the recent past. This to me suggests that social norms can shift relatively easily. However, there’s not that much mutation, thereby it seems to me that societies often have these massive cliffs where they’re basically maladapted to their circumstance. And if there’s an evolutionary process to push them to a better state, to a better equilibria, it’s not strong enough to come to the society’s rescue in time.
Samo: So my concept of a “great founder” is a specific person that sees this situation, perhaps implicitly, perhaps explicitly, they can conceptualize it, of it as a social reform, or as a commandment from the gods, but they introduce a social technology whole formed. And we have many examples of very, very rapid social transformation, right? Where the social structures just completely changed within a 20 year time period. Right? Such as the, say the creation of a new religion. But if you examined an organized religion, certainly you would find many, many components included from past belief systems, but I would claim those are significantly chosen, right? There’s several points where strong re-engineering of society happened in such a brief time window that I just don’t think that the evolutionary explanation is the right one.
Jim: I think it depends. I’ll give a personal example. By chance I happened to be at the very early branch of what is now called social media, for instance, I worked at the very first consumer online service called, The Source in 1980 to 1982, believe it or not. And we had most of what’s on the web today. We had home shopping, we had news wires, we had chat, we had email, et cetera. It was all character mode only, 30 characters a second, which is amazingly slow. And it was really expensive, effectively eight or $9 an hour, and that was in 1980 dollars, which would be more than $20 an hour now. Some people say, why the hell would anybody use that? And the reason was because there were no alternatives. And so for the very earliest innovators that are interested in what we now have as our network world, The Source was it initially, and then eventually had one competitor called CompuServe.
Jim: But anyway, one of my personal participation was we had a bulletin board system called Post, and the first version of it, before I came onboard, was pretty bad. And I took on the task of designing the second generation. And so I literally personally designed the second generation of the Post system, which actually ended up setting some of the benchmarks for the whole forum version of what eventually metamorphosized to about 10 different evolutions into social media, and I was also a product manager for something called PARTICIPATE, which was a third-party product that we licensed at The Source. That was a more clear descendant of social media. And we made some specific product decisions that were evolutionary in their nature. And so if I look back at the history from the original Post 1.0, my Post, 2.0 through PARTICIPATE, I can draw a line that goes all the way to Facebook and then to the new things that are happening today beyond that.
Jim: And every step was evolutionary and competitive, for instance, The Source failed, and one of the reasons it failed I’ll modestly say is, because I left in a huff in 1982 when the management refused to accept my synthesis that we were in the enabling interaction business rather than the information publishing business. And our competitor, CompuServe got that, and put most of their investment in building out much improved forums that they called SIGs, special interest groups, et cetera. And so The Source actually died, it was acquired by the CompuServe for peanuts. And CompuServe was a very important node in the earliest parts of the branch of evolution. So, it was competition Darwinian, one killed the other due to a whole series of specific step at a time improvements in the concept of what we would now call forums, or indeed social media. So there’s a counterexample.
Samo: Yes. The interesting thing to me about this though, is that there is variance among different historical periods, times and places, in the amount of this creative competition that you might see. So for example, societies such as Imperial China, during one of its many phases of decline, or perhaps portions of European history and its development, there was very little change across centuries, or millennia, Bronze Age Egypt might be an even better example. So should we, from this infer, that these societies where at some kind of evolutionary equilibria? I actually don’t think so. I actually think that always there existed the possibilities to jump to a completely different social state. They just weren’t undertaken.
Samo: So I would say that a dynamic, competitive, evolutionary process is much likelier to happen in a society undergoing some kind of intellectual, or business, or industrial golden age, such as, again, examples would be the Italian Renaissance, classical Greek city-states, or perhaps Hellenistic states competing with each other. And, again, the early modern period where you have many cities with excellent thinkers and inventors, and they sometimes have similar ideas, and they build off of each other’s ideas, and of course, there’s also the aspect of military competition. These however, I think are golden ages, they’re dynamic periods. And they’re also huge blocks of time with stagnation.
Jim: Of course, we seem to be in a hyper innovative period right now, or as I described, even a relatively simple meta-institution as the market, which of course has now become very complicated, provides a forcing function to get better, adapt it, or die. And, of course, it has no teleology, it has no place it’s trying to get to, but it certainly seems to be a exponentially increasing lever for change.
Samo: I think it also should be noted that markets have been, or can be tamed, right? It’s possible to restrict them. Now sometimes to benefit and sometimes to harm, where one of the ways in which we’ve been wrong in our model of the world was the expectation that say market reforms would inevitably induce China to liberalize as a society, as a whole. And right now people in decision-making, policy-making positions, they’re trying to save their skin. They’re trying to say, Oh, we never expected China to liberalize, but that’s just not true. Both publicly and privately, 10 years ago, they were saying, Oh, it’s inevitable China to become rich, therefore it’s going to become democratic. And I suspect that it’s actually much more similar to Japan, capitalism and Protestantism, just because these institutions, part of what we would consider classical liberalism, were introduced, doesn’t mean the whole package will travel.
Jim: Exactly. In fact, I have a paper called In Search of the Fifth Attractor on Medium, where I lay out that there are alternative attractors to the West, and Chinese neo-fascism is clearly one of those, right? This is a institutional building innovation, true innovation, which uses parts of the market, uses a large amount of the fascist toolkit, plus some new things, what they call Chinese characteristics, to create a completely different social attractor system, which so far seems to be working. And it was very naive of our policy makers, 10, 20 years ago, to just think that, Oh yeah, the Chinese will inevitably be pulled into our basin of attraction when an ancient, culturally rich civilization like that had the opportunity to develop a separate innovation, a separate attractor basin. And there’ll be some serious competition between the West attractor, the neo-fascist Chinese attractor, and some other attractors over the rest of the century.
Samo: The interesting question here is, what are the internal attractors of the Western world right now? For example, on the question of the internet, as far as I can tell, we are step-by-step converging on the same answers the Chinese are converging on, which is some amount of censorship, some amount of algorithmic management of the expression of say public opinion and speech, which is partially a result of our social technologies that came, it’s not just a question of, Oh, the amount of speech has increased radically. I think our ability of our institutions to function with active critique heaped upon them, I think that has actually diminished. So I actually think that it’s not just a question of a massive explosion of information, therefore a massive explosion of speech, I think it’s also the ability of our institutions to endure, and in fact, thrive under constructive critique has been diminished.
Jim: Yeah. That’s very, very interesting. We’re at a pivotal point in the West where there’s clearly trends towards censorship and constraining the epistemic search, the search for better solutions. There’s also very strongly, though less publicly visible, counter thrusts of people, I was on a call yesterday, people specifically looking how to design something like the internet that has no choke points in it. And whether that’s good or bad, I’m not a hundred percent sure, but there is clearly a counter reaction, that’s one of the benefits of a relatively free society that we still have, that there will be people trying to work against this attempt to smother discourse, which is clearly going on from the incumbent elites, which is very interesting. Which actually gets us to our next topic, which is that you described social technologies, one of the principle drivers of why they’re useful, as that they lower social coordination costs. Why don’t you talk about that a little bit? And if you would, feed back to this idea of what’s going on around the battle for censorship and against it in our information commons?
Samo: It’s very notable that as far as we can tell, one of the primary drivers of human behavior and evolution has always been other humans, right? There’s all these interesting arguments that homosapiens is a self domesticated species. And even if we imagine say primitive stone-age tribes, or check the anthropological records, these are groups of at least a few hundred people coexisting in complex, social, and economic arrangements. Intermittency of things like food sources actually makes cooperation of some, or another, self-interested or not, or at least symbiosis, more vital rather than less, in a way in a more predictable environment you actually need to understand less about your social environment. You can rely on purely material understanding of your circumstances. The social technology view here is that, our interrelations can be moderated through what is sometimes called culture, but more importantly through specific mechanisms, right?
Samo: We discussed say market mechanisms as a method of revealing information, or profiting off of information, right? Thereby increasing the amount of information shared. But you can also have other types of things where you might have a way in which we render each other more intelligible, and legible to each other. Now this is one that’s a bit less libertarian in theme, but consider the imposition of the French language by the French state, through the 15th to 18th century. And especially even concluding this process in the 19th century on the population of what we think of as France today. Language was so important in 19th century Europe, because it meant that you shared the same information sphere. I guarantee you that people who spoke Basque or Breton, or some of the Southern languages that existed in France, which were also Romance languages, but were not really compatible with French as spoken in Paris, they certainly probably resented a language policy through mandatory schooling. However, the end result of it was a nation of 60 million people that could talk to each other, thereby making trade easier…
Samo: That could talk to each other, thereby making trade easier, thereby making bureaucracy easier there by making the scaling of militaries easier and whatever we might think about the rise of the nation state, it’s clearly has increased the total amount of coordination. Now, a third example might be again, the organized religions that arose during the so-called Axial Age. So this period from about 700 BC to 780 AD, where these large iron age empires that were seen throughout Eurasia. The Roman empire, the Persian empire, India, China, they needed gods and mythologies that were understood at any point in their respective trade networks or political systems. Your local gods have to change to whatever the generic standard was of these other mythologies, these underpinnings of organization. So I think that it’s the case where sometimes these mechanisms are relatively voluntary, but other times these mechanisms are invasive in the terraform, the human animal into something different. There is a window of flexibility here of course. You can’t do everything with it. It’s not quite a blank slate, but you can do a whole lot of it.
Jim: That’s interesting. Let’s relate back to the epistemic commons that are being manifested on the internet and the war around censorship, not censorship, how much, et cetera. I think a very interesting case study again, personally involved with, I think as well-known Facebook in particular has let loose Hunter-killer algorithms to target QAnon. QAnon’s interesting. I mean, it’s an emergent non top down, as far as we can tell, though, there is another narrative that says it’s an intelligence operation by somebody, but let’s assume it’s not, the QAnon movement is more or less honest bottoms up reaction to various things. But it seems deranged. It’s not in congruence with reality, nonetheless kind of like religion. Not necessarily in congruence with reality, but it’s able to become a standing wave and mimetic space essentially not only maintaining itself, but actually growing. So anyway, Facebook creates Hunter-killer automated algorithms to take out what it thinks are QAnon nodes on its network.
Jim: Guess what it accidentally targeted the GameB network, which I’ve been very involved with. They banned with the permanent, unappealable ban us three admins for the GameB group on Facebook, for no apparent reason and typical Facebook fashion, refuse to give any reason. Fortunately, we had a pretty good set of supporters and we raised a big shit over on Twitter. And we had some friends in Facebook who looked into it and within 10 hours it was reversed, that ban. We’ve since left Facebook and now have our own home at game-b.org.
Jim: But anyway, it’s interesting that whole combination. Here we have an emergent network phenomena that the affordances of the networks certainly up-regulated, if not actually caused, we then have a response in the form of unsupervised Hunter-killer AIs, which are literally allowed to give death penalty bans to people based on algorithmic calculations, which have the side effect of suppressing what at least we think is one of the best bits of intellectual work going on in the world. In a nutshell, this actual event that I was right in the middle of is a very interesting example of what’s going on in the evolution and co-evolution of ideas on these new platforms.
Samo: Yeah. The co-evolution aspect here is interesting, but I want to point out that the decision is still reached in something of a classical corporate context. Whatever one thinks of these social media companies, I think it’s, to me always very interesting, “Well, which committee decided that? And who is sitting on that committee?” A lot of these decisions and decision-making processes are relatively opaque. We don’t know who approved or decided not to approve a particular set of algorithms to try to manage or manipulate the public opinion.
Samo: The consequences of instituting such an algorithm of course are myriad and they can’t really be predicted. I still think that it’s very notable that there was a decision involved. That, “Okay, QAnon is sufficiently divorced from reality. We have to do something about this. We are in fact enabling this as a platform. Oh, oops. We made a mistake.” There were two decisions here, the first decision to deploy the algorithm, the second decision to possibly, partially redress some of the consequences of that one. And it seems to me that these committees could be made much more transparent and that perhaps that’s one of the things that should be done in the public interest.
Jim: I strongly agree I’ve been… Especially after this experience, but actually even before that, I’ve been strongly advocating that any platform that has more than 5 million unique visitors per month should have a legislated IE social demand that they only ban people by explicitly saying, why are you pointing to 300 words or less of texts, which is the policy allegedly violated. Two, that they specifically highlight the utterances which violated the policy. And third, that there’d be an appeals process. In fact, they came up with a very clever algorithm for the appeals process, which is if you get banned by let’s say Facebook, you should be able to appeal and put up a stake. And the stake could be any amount up to, I think I calculated $8 million and the appeal would be judged by an independent arbitrator using an American arbitration association standards. And if the ban was reversed, you got paid 10X, your stake by Facebook.
Jim: If your band was not reversed, Facebook scooped up your steak. And that would put Facebook having material skin in the game. And then further to make it even more interesting, anyone who wanted to challenge a decision by Facebook would be allowed to syndicate their claims. So they would put the facts up. Facebook said, “This is the rule I violated.” Facebook said, “This is the utterance that violated that rule. I’m appealing. I’m putting up 500 bucks because that’s all I got. And I’m looking for co-investors in this claim who, if I am right, will get paid off 9X, I’m going to scoop 1X, 10% of the win into my own pocket for organizing this.” And it seems to me that that would be an extraordinarily interesting set of reforms that would require Facebook to operate in something closer to good faith, rather than the star chamber as you’ve point out. Someone’s deciding these things, but nobody knows who they are and they’re not accountable. And they have no skin in the game.
Samo: Yeah. When thinking about, say the landscape of power in society, it’s always very important to track information asymmetries. And there was an article I wrote on, perhaps with a strong title, Why expect the internet decentralized society. It was for Palladium Magazine. And the core argument of that article was that, “Look, the way the online world has manifested right now has resulted in us as individuals, becoming radically more transparent to organizations. The data collection on us is significant. Everything from audio recorded on our phones, if we’ve given these devices the right permissions and nearly always the fine print says that you give permission. Our online browsing and reading habits. And of course our online shopping, now that retail has moved mostly online. We, on the other hand, barely know anything more about most of the organizations that define our life. The internet has not made the Chinese government more visible and transparent to Chinese citizens or the American government for that matter.
Samo: We don’t have regular leaks of internal working group emails. You would need a hundred organizations doing something very similar to what Juliana Sonja’s organization was doing, before you would even start to make a dent in the massive asymmetry that’s arisen between highly regimented organizations with data processing capability, on the one hand and individuals who more and more are just composing this data, but don’t have the ability to analyze those institutions. The middle ground of this is that online cultural phenomena can be unpredictable. Both to individual users and to these organizations. However, I view these as the stormy sea and I’m more interested in climate rather than weather. So this change and information asymmetry, I think is a very important one. And I’m looking for signs that it might turn the other way around.”
Jim: Yeah. It’s going to be hard and the window is short. If we don’t, through our democratic apparatus in the West, change the opacity and asymmetry and do some reforms along the line I suggested, or some others, the opportunity to be lost probably. Because once power has become accumulated and has been financialized, there’s gigantic interests and ability to manipulate politics, which we’re already seeing of course. To lock in that advantageous situation for the incumbent. So I suspect that the opportunity to avoid being dominated by asymmetric information and opacity has at most four or five years to be worked out or we’re fucked most likely.
Samo: Yeah. The classic dynamic for societal decay is what I call a centralized declining empire. Now there also exists a de-centralized declining empire, but in a centralized declining empire, there is a central power “High” that is mostly sustaining itself, materially and socially through taxing, either again financially or through human capital, through in-kind other parts of society. You can have a slow choke hold where the center has accumulated enough power. Yet the center is not dynamic, is not creative, generative in its own and it sustains itself through essentially self cannibalizing, more and more parts of the domains it controls. Arguably the late Roman empire, the Western Roman empire is precisely of this type. The city of Rome, not being economically productive, slowly chokes off and bleeds off all these other cities like the predecessor to modern Marseille or modern Paris, or heck even Munden. All of these like proto-cities that emerged in Golish lands and Iberian lands, North Africa and of course the rich cities of the Eastern Mediterranean, Alexandria and so on.
Samo: When the generativity in the center stopped, but power in the center remained then you had this slow static burn where the society is hollowed out. Once Rome falls, most of the change actually happens in the 200 years prior to the fall of the Roman empire. The correct way to think of it is imagine if whatever real GDP is, it shrinks by half a percent a year. It seems imperceptible yet after a century or two, you’re living in a very different world, even if none of the legal fictions of who’s in control where… none of those have changed. But the substance of your social reality is completely different. And it’s been terraformed by the central political process that you didn’t have much control over.
Jim: And of course the opposite is true too. I mean, if you look at, let’s say the West since 1700, it’s been 1% a year increase in GDP, which compounded is produced a remarkable transformation of material life.
Samo: Yes. It’s absolutely remarkable. And then this is, again, there is the possibility of generativity of expansion. Now, of course there are some physical limits that are interesting to consider. But purely sociologically, I think that societies aren’t inherently very rational about the amount of resources they have available. Social conditions dominate material conditions when it comes to decisions about the society. If you’re on Easter Island, the social needs of whatever the status game between the chief says and whatever the material needs of supporting your warriors or your priest, the classes, these dominate any mere consideration of, “Well, how much land do these islands have? Is it… how much construction can we afford?” The social reality guides the decisions.
Jim: Yeah, [inaudible 00:41:57] famously. Should we cut down our last trees? And once they did, they could no longer fish, because they used canoes made from trees. And so they lost the most nutritious part of their ecosystem. And of course we have the issue of climate change, species extinctions, soil depletion, perhaps more subtle things like pseudo hormones into the ecosystem that are reducing sperm count. Our societies are not good at understanding they’re embedding in an outer context.
Samo: As it requires us to represent the outer context in something that is a socially shared reality. And maintaining an accurate social reality, what we called earlier, the epistemic commons that’s non-trivial that actually requires several different social technologies. The most interesting thing about Europe a few centuries ago is that it was possible as an English gentleman to practice the scientific method, which often involve telling authorities that they were wrong. That at… And corresponding over large distances with other people who, their material and social circumstances enabled them some amount of descent.
Jim: And of course we have great platforms for that today, I think of archive, the Open Science platform. Where in fact, in some fields, machine learning, physics, certain parts of statistics, et cetera, the traditional choke pointed of journals become almost irrelevant. And there’s essentially the ability for emergent ideas to form with no obvious gatekeepers. So it’s actually interesting that in some domains, at least we’re in a golden age, it looks a lot like 1690s, the Scientific Letters’ Era. We have that again.
Samo: Yeah. That is, I think, a positive development. Though, I would begin to be cautious, Elsevier is a huge business. People don’t even realize that it is a for-profit business. Scientists write free reviews. That’s where Peer Review comes from yet to get a journal, where these reviews that were written by the scientists for free, you have to pay quite a bit. And gaining access to some of these closed journals is in fact, a significant expense for university libraries and research libraries. They’re essentially paying Elsevier subscription money. This money goes directly from governments, which presumably fund this research for the public good or from endowments by wealthy alumni. So I wonder when the alumni and the governments are going to decide, “No, wait, actually, as a condition of funding, you should make this open and publicly available online. You shouldn’t be keep it in a post journal.”
Jim: Well, they are moving in that direction. Europe in theory is requiring that now. And the US government has moved in that direction. It requires somewhere in a six month to two year windows, stuff has to be put in the public domain. Each of the funding agencies has different standards, but I’m with you that this bizarre historical choke point of Elsevier and its competitors is really pretty bad. If I was bill Gates, within the money he’s got, he could easily buy out the journal businesses of Elsevier and its competitors and turn them all into not-for-profits and probably have more impact on the world than any of his other projects. So, “Hey, Bill Gates, if you’re listening to this, if it’s one of your people, [inaudible 00:45:23] turn a loose of about $6 or $7 billion. It is about all it would take to buy those journal businesses and turn them into open access science publications. You’d be doing the world a huge favor”
Samo: And that would be very much a compounding gain over time. I think one of the great scientific triumphs of our era is understood often as a failure, I’m talking here about the replication crisis. It’s a triumph because people even realized that you should try to replicate psychology papers and sociology papers and whatever. So I would actually argue that the replication crisis in psychology is a positive indicator for our future and a positive hope for future progress, because it was possible. It was possible to do the career threatening thing of telling other researchers that they’re wrong.
Jim: Yeah. We actually had Brian Nozick on the show. He was the guy who led the psychology replication project. And he’s now the founder of the Center for Open Science. And I chat with him regularly and indeed help fund one of their important innovations. And this is huge in the sociology of science. And that’s the idea of pre-registration. If this becomes general, it will change the game of science in a very positive way. And the idea is that scientists pre-register an experiment that they’re going to do with a lot of detail in the protocol, then a journal agrees to publish the result it’s positive or negative.
Jim: The scientific team then does the experiment. And then the experiment gets published, whether it’s a positive or negative results. So you eliminate this very pernicious effect in science where publication is highly skewed to positive outcomes, thus giving scientists, at least an unconscious reward for fudging their numbers through P-Hacking and other things such as they can show a positive result. When in reality, the ratchet of science should work just as well on negative results as positive results. And this is something that is right on the verge of happening. There’s a number of journals who are participating in this work, and I strongly encourage working scientists to consider pre-registering their hypothesis and their protocols and getting journals to agree to publish the results positive or negative.
Samo: The interesting part about scientific culture is again, this culture of constructive critique and also of bridging the gap between material reality and social reality. The agreed upon laws of nature come over time to match more and more the actual regularities we observed in the material world. It’s certainly possible to come at a story of how nature works that is universally socially accepted. Yet it’s just not so. The maintenance of these epistemic commons is absolutely vital for the long-term viability of societies.
Jim: And of course, we have some risk at the moment. There’s some wacky ass shit called postmodernism, which at least in its debased form claims that science is not a privileged perspective on reality and that a witchdoctor is as good as Johns Hopkins University Hospital. And this goddamn thing seems to be getting some currency in the world right now. And I consider that to be a very disturbing trend.
Samo: I mean, of course John Hopkins might be taken over by the witchdoctors at some point, one has to have the substance, not just the name of science. And unfortunately we saw with the recent pandemic, that at times public health officials in the name of saving lives were lying to the public about the realities of the virus. Masks don’t help until they do. The virus is harmless until it’s very harmful. And these are things that I think are not sustainable as strategies.
Samo: I think if you have an institution where as part of its mandate of safe public health, it has to engage in what Plato would call the Noble lie. The Noble lie, where you misrepresent reality to the unwise, because if you told them the truth they would do foolish things. I think if you ingest and accepted the Noble lie at an institutional level, sooner or later, people start applying it to each other. So it’s in a way it’s a type of defection. It’s very hard to maintain a norm of internal truth-telling and external PR. So I think that’s one of the reasons why I’m skeptical of safe public health messaging that takes shortcuts.
Jim: Yeah. The case of the masks is a fine example. I know you guys on the Consilience Project are working on that as one of your meta-news projects. We’ll talk briefly about the Consilience Project at the end. Let’s get back on my topic list here we’ve had some fun diversions. I think people find interesting, but one of the areas that you explore in the book is the relationship between technology and society. And you define technology, I think in an interesting and useful way. You gave an example of, “The arc type of the blacksmith cannot be reduced to a meager individual nor do a set of tools, but personalizes an entire socioeconomic niche, one deeply entwined with our thought and life over millennia. These arch types are even reflected and entwined with our thought and life over millennia.” So technology and society, what do you got to say about that?
Samo: They are just completely and utterly, mutually co-dependent. You cannot analyze any material technology without looking at how it’s made. You can’t look at how it’s made without looking at what are the people doing to make it. If technology cannot be absorbed productively into a social niche, societies will just leave that technology on the shelf. They won’t instantiate it. I think we have many thousands of years of history where the occasional innovation and curiosity pops up as a personal interest of this inventor or that inventor. But unless someone else has a use for that invention, something that caused them to make more machines of the same type or build upon the understanding that allowed the eccentric inventor to build their machine, then it’s very soon forgotten. How many times in history has the steam engine been reinvented? We know of at least two times. When steam engines were sort of came into [inaudible 00:51:59]. And one of those times in Hellenistic Greece, when you had Hero steam engine, it didn’t take off. It did not result in massive social transformation.
Samo: And at a different one, again, 18th century, England, it did take off. Watt steam engine completely transformed it. And I think often it is a matter of can the society integrate this into its shared broader understanding of how things are done. A different example might also be Japan. Where Japan actually having fought a serious civil war with gunpowder weapons in the 16th century and the Tokugawa era, just banned essentially the use of firearms. As a result, you had 300 years of peace on the Island. However, gun development didn’t advance. And of course, Commodore Perry shows up with very good guns on his boat. And that’s the end of that society. That society had to transform almost completely to remain viable in the modern world. So what if there was no America? What if Japan was its own planet? I think sometimes today we are our own planet with no outside stimulation and we’re probably leaving many very interesting inventions, very interesting technologies on the table because we find no good socio-economic niche for the practitioners of them.
Jim: Yeah. I think there’s a very interesting distinction, which at the Sanofi Institute we use, and which I recently discovered another author, I knew other people use, this Matt Ridley’s very interesting book, how innovation works. Who by the way, we’ll have on the show here in about two weeks. Then the distinction is invention is the creation of the fundamentals of something. Let’s say for instance, the steam engine back in the Greek times, it was used for little things like kids toys, I think for opening a door and a few things. But it didn’t get further adopted because it didn’t evolve, the team around it never got strong, et cetera. So it was an invention, but not an innovation. While on the other hand, Edison and the light bulb is a great example of what an innovation actually is. 40 people within about 10 years invented different ways of doing incandescent lights and yet only Edison, and you could argue perhaps Westinghouse as well, built out the other things that you needed to make this actually a socially important innovation.
Jim: Edison refined, didn’t invent, the generator, distribution lines, wires, insulators, all kinds of stuff, and start building out the power grid. And so light bulb plus power grid ended up being a very powerful innovation while the other 39 people that invented the light bulb are footnotes in history. And so that’s really a hugely important distinction and gets back to your ideas of institutions, because Edison built a number of institutions, including amazingly not so well-known anymore, General Electric was a company that was founded by Thomas Edison. And of course, Westinghouse was… George Westinghouse founded that. So institutions were built to turn inventions into innovations.
Samo: And to those institutions, they work for a while until they don’t. You can easily have a very prestigious history of innovation and you can easily keep the name of something. Even as the substance becomes more and more and more distant. I would argue that, say a lot of the differences between, say a university departments today and 70 years ago can be nailed down to a radical change in how they function. It used to be very easy for the equivalent of the eccentric thinker or the eccentric somewhat unusual professor to gain a position at the university, to get something like tenure. It was not a contested thing. You didn’t have to compete on beating everyone else out on particular metrics. Things like Publish to Perish were much more lax. In the 19th century, again, you could be considered a productive mathematician if you were silent for many years and only then publish stuff you were truly sure of. Today the academic incentive gradient is you better be talking. You better be publishing papers, whether or not you have anything to say.
Samo: The number of people competing for the same few possessions has also increased radically because the number of people going to grad school has increased radically. And do you really have anything to do after grad school except just continue participating in this education process with the view that eventually you’ll contribute to science? I think there’s something very unusual about how we’ve bundled together, the funding of science and mass credentialing and something like life trajectory in education. I think it’s kind of broken. 70, 50 years ago, these were relatively minor effects. Now I feel they very much dominate all sorts of decisions, like decisions who ends up getting tenure. By the time you’re deciding whether someone is worthy of tenure or not, they’ve often already spent decades of filtering, where this filtering was partially selecting for agreeableness, regular publication schedule, things that are not necessarily incompatible with intellectual progress, but they’re not really particularly conducive to it either.
Jim: You’re absolutely right. I’m involved in science governance on boards at various elite scientific institutions. And I can tell you that you have to work extraordinarily hard to avoid that. And truthfully very few institutions and almost none that aren’t at the absolute top are able to do so. I think Peter Turchin has a very interesting insight on this and he calls it the overproduction of elites. I’d actually reframe it and call it the overproduction of elite candidates. And you’re right. I graduate-
Jim: For production of elite candidates and you’re right, I graduated from undergraduate university in 1975. So what was that? 45 years ago. And at that point, the pressure was a lot less than it is now. Cause through a whole series of ratchets, we’ve overproduced PhDs in almost all disciplines. You know the famous story of all the PhD physicists that are working on Wall Street might be as many as half of them.
Jim: And so that leaves those who actually want to be physicists taught in a kind of whole series of gestures that may have very little to do with physics. How have they managed their ideas so that they can maximize the number of papers they publish. They actually teach this in graduate school now. How to take a research program and chop it up to maximize the number of publications. What the fuck, right? Why should somebody be doing that? And yet the institution of elite physics departments literally teach this as part of their apprenticeship program for PhD. And this is, I would say, not by anybody’s design, but it’s an emergent phenomenon of the quest for funding dollars, the development of the peer reviewed journal as the gatekeeper, the massive administrative growth in universities. So we that’s grown up without anybody saying that’s what they wanted.
Samo: Yeah, I think over time one has to continually readjust the machinery of society. If you want to have particular outcomes in mind because the unforeseen consequences multiply. Entropy is the natural state of things and something that might’ve been a very good innovation at one point, something that where, say even the institution of something like student debt might’ve at one point seemed like a clever way to increase the affordability of education as of course perversely because universities have no reason to ever reduce their fees, resulted in a college education becoming something that possibly wipes out all of your middle-class savings.
Jim: That’s ridiculous. I’m a perfect example of both actually. I was working class kid. My father is ninth grade dropout and definitely not from any privileged background, but I was sort of able to patch it together to go to MIT in part through low interest defense department loans. But I doubt I’d even consider applying today because elite university expense in the United States is now four X what it was in the 1970s after controlling for inflation. Four X! And unlike medicine, as far as I can tell, it’s no better. It might be worse, probably is worse than it was that the only other field that’s exploded in costs like that has been medicine, but it’s delivered a tremendous amount of functional change. University’s gotten hugely expensive in part because, “Hey, if it’s a status symbol, it’s highly valuable, there’s no constraint on cost.”
Jim: And so off it goes, and that has helped fuel that to make it at least in theory affordable, even though it results in debt slavery for an awful lot of people who don’t make it all the way to the elite of the elite. And I was able to pay off my student loans in one year. Saved my money really, really stringently and I was a free man one year after college. I know people today who are in their forties, still paying on their student loans. This is fucking nuts. Again, I don’t believe anyone designed our system this way, but this is the way it has evolved.
Samo: Well, the functionality versus non-functionality here is, I think, a useful distinction where I think that many functional systems, I think they, they usually required a red or clever design and they have a bounded set of operating conditions in which they deliver basically what was the desired outcome. However, over time, both circumstances change and mechanisms break, right? Things are routed around either in the organization or in the legal environment or the cultural aspect of it, where the machinery of whatever institution that was once set up that one work once worked very well, even if a name, it remains it no longer works very well. Right, I think in name, we are spending more than ever on science in practice. We are spending more than ever on a type of white collar careerism where you’re sort of trying to produce these very small, very defensible pieces of weaponized information, I even hesitate to call it knowledge. If right now you have a preferred policy position, for example, you can hunt for a white paper that supports your position, the think tank industry has you covered.
Jim: Yep, and of course we have also a bizarre phenomena like the humanities departments at elite universities, most of which is producing absolute horseshit. The utterly bad stuff, and yet, the standing wave of the incentive systems keeps it cranking out.
Samo: These are things that I think require intervention. We can’t really rely or assume our society has good corrective mechanisms for all of these situations or circumstances, pressures, factors that we find ourselves under. So in a way, society is always an unfinished building. Not necessarily immediately near collapse, but certainly something that requires active maintenance where maintenance is a re-imagining, right? It’s not keeping things the same.
Samo: If you have termites in the beams supporting your roof or rather perhaps beetles is that’s a little bit of a slower process weld you, you better be hunting for some new tall trees, right? You better be hunting for new wooden beams. And perhaps you have to ask yourself, “Well, do I still need a dining hall or might be redesigned this to be an open air court?” And society as a whole, is this huge complex of semi abandoned buildings, some buildings are in operation or a different metaphor might be that it’s a complex ecosystem of interdependent institutions. It’s a forest, right? And as some old healthy trees, it has some old dead trees and has some saplings. The question of what is the risk of fire, right? Or which species can be introduced to the ecosystem productively for the health of the whole forest, the whole complex ecosystem of interdependent interrelated, mutually competing institutions. These are not trivial. These are not trivial questions.
Jim: Indeed, and let’s jump to one of my favorites. You talk about social technologies and the adoption of technology, and essentially the social machinery around that, particularly in quite call-outs specifically, but I would call it the industrial Taylorist Era of evermore scale on one side and ever narrow specialization on the other.
Samo: I think one of the most interesting aspects of the 20th century is how similar the industrial societies were in some ways. You could say that perhaps the true unifying… the secret M theory, the unifying political ideology of all 20th century states has been a Six Sigma, right? This is where you try to the best of your ability to eliminate variance in a production line. And as a result whatever you thought was wrong with the product, it ceases, it goes away. You don’t try to work out. Okay, there’s been this flaw in the car, therefore I’m changing what this particular robot does or what this particular worker does. Instead, you just clamped down on the variance of inputs and you have a high probability of reducing the variance of outputs. Things like our schooling system, right? Again, designed with this very Taylorist mindset where things are measured evermore in infant testimony, right?
Samo: Where our best idea of how to achieve meritocracy is more competition around SATs or more competition around something like extracurricular activities and furthermore, where the breakdown of things into disciplines must happen in order to make something socially illegible whether or not the subject matter really is divisible into that. This goes beyond education to say most management techniques in society, right? Arguably under what is sometimes called management. We actually smuggle in all sorts of interesting political and epistemic assumptions. That just aren’t so.
Jim: And where I like to take this is that while Taylorism and Six Sigma and incremental improvement and the ratchet of more and more specialization is a Hill climber with respect the financial domain, it by no means is guaranteed to increase human wellbeing. And in fact, the sociologists have a term for it, anime, which is the idea of people living meaningless lives. Well actually reminds me of my first application of complexity theory and business when I was the facto CTO and internet strategists that Thompson Corporation now Thomson Reuters, which was a large conglomerate with operated in six different businesses, 8 billion a year in revenue, 50,000 employees. And most importantly, we did about 80 acquisitions a year, most of them tiny. So anyway, I had been reading in the literature of evolutionary computation and that literature is full of the analysis of fitness landscapes.
Jim: And I had this aha that watching the behavior of my fellow executives and even myself when I was in the line operating role, which I had been for a while previously to being CTO, is that the bureaucracies tend to climb the Hill and entrench on the Hill that they’re in and not think at all about the fact that there are other Hills around that they need to be concerned about for two reasons. One, as you said, the maximum that you’re on may not be the highest one. And the other, which few people talk about, is that business is a co-evolutionary context. Hills are growing and shrinking all the time. And in fact, part of our Hill system was shrinking. We own some newspapers. We own some print college textbooks. And as it turned out using this analysis, we got rid of both of them. So I had some ideas like every business person that controls or is an important player on a Hill.
Jim: So look around, see what other Hills are nearby. Are some of them connected by ridges where you don’t have to go down very far to get there and attack the other peak? Or do you need what we called a Death Valley Attack where you go down the Hill and up the other side, which is very expensive. We did a couple of those, but we made sure we had enough supplies to operate our war wagons to cross Death Valley. And if you don’t, you’ll die in Death Valley. That’s why we call it that.
Jim: And then the final strategy that we developed from this as we call it Parachute Attack, which is suppose there was a business out in the distance that we saw was a Hill coming up, let’s call it the internet in 1996, right? It may be that there is no obvious connection to a business that has some reason to believe it has expertise that’s relevant. So instead we attack by parachute and we acquire three or four companies in that domain and then use our strong financial and operational resources to attack from there. So there was an example of using this kind of fitness landscape thinking in a very tangible way in a quite prosaic bottom line driven business.
Samo: The interesting thing about business development is further how it always sort of interacts very deeply with what the predominant culture of a society, and also with the regulatory environment, both of which are driven by dynamics that are often outside of the control of a particular business.
Jim: Yeah, fortunately in our case, not so much. We were operating a bunch of little niches and as long as we kept our acquisitions under $50 million, which were most of them, we were not subject to Scott-Hart-Rodino review. And so we exploited that regulatory loophole to do a lot of this stuff. From time to time, we’d do a mega acquisition. And then we had a whole team of fancy lawyers in New York who knew how to tap dance our way through the anti-trust process with the minimal amount of problem. And in that case, it turned out the parachute attack scenario, it was not subject to anti-trust at all because we weren’t in businesses that we had any obvious dominance in. And when we were exporting instead our organizational capability, our low cost of capital and our ability to do global tax planning in a truly predatory fashion. So we weren’t subject to anti- trust at all, in those cases.
Jim: All right, well, those are some interesting war stories. Oh, wait, one last thing, before we move on to our next topics, the social technologies and technology and markets, you allude to it, which is that in late modernism, let’s say starting around the twenties, the understanding of psychology started to become an important tool in the development of needs in the development of marketing. And you mentioned Sigmund Freud’s nephew Bernays who wrote the famous book Propaganda. Well, you didn’t mention was John Watson. He was the leading psychologist in the world and he got ran out of academia for having an affair with this 21 year old graduate student. And he went to work for J Walter Thompson, the largest advertising agency in the world. And he brought the insights from behavioral psychology to the world of advertising. And the world has not been the same since. So maybe you could talk a little bit about how our social technologies in the context of technology and business also involve the purposeful manipulation of the human psychology.
Samo: Yes, like one of the more interesting examples here that people regularly use as the introduction of cigarettes as torches of freedom, right? Something that might be seen as headiness that can be reframed as something is nearly virtuous or excellent, right? For women in a new social environment. You basically pair up the consumption of a particular material good with what you claim or what other people already believe is a desirable social role, right? One of the classic says, “Well, who consumes this item? Don’t you want to be them? Don’t you want to be like them?” And to me, the interesting positive aspect of this, right? There’s the negative predatory aspect where people are inclined to pursue roles that don’t have a substantiated, actual social reality attached to them. That’s sort of the negative one, but the positive version of this is in a way we could see marketing as a great American innovation.
Samo: Arguably no other society in the history of mankind was capable in rolling out completely new ways of doing domestic economy or workplace economy as the U.S. did. You essentially saturate the media with depictions of role models of how to use things in a way you’re inducing desires. In another way, you’re essentially running a mass education program and you saw both high and low integrity versions of this, right? The machinery of advertising could be deployed straightforwardly during World War II as say, political propaganda, helping the war effort or for campaigns such as public health. And so on the long-term effects of trying to deploy these tools for such behavior modifying updates to the social code though. I’m not sure that’s sustainable. It could be, it is a self exhausting innovation where these shortcuts, these behavioral shortcuts to bring people into new social behavior patterns before the actual reality changes around them, before they had the time to really deeply understand what it means or doesn’t mean to be playing a social role. Maybe that was eroding some, some deeper cultural reservoirs.
Jim: Yep and now we’re dancing to the marionettes of micro-targeted advertising on the platforms where every behavior we make, even if it’s where our mouse is on the screen, gets fed to machine learning algorithms to try to make us buy something, right? So we’ve reached an apotheosis of this phenomenon. And again, God knows if it’s good for us. My guess is it’s probably not.
Samo: One of the key differences is that perhaps advertising agencies and people interested in public health and all of these PR public relations strategies from 1920 to 1960, still understood themselves in some way to be custodians of society, of being active pro-social participants. They didn’t necessarily just think of themselves as making a quick buck. The view of, “Oh, we’re inventing all of these wonderful new products, radio, microwave’s, color TV sets. We should let people know about them.” You could hold that view in much more good faith, then you can, “Well, actually we just want to addict as many people as we want to our particular video game. And we don’t care about what other social effects this has.”
Jim: That is huge. In fact, that was the genesis of the Game B movement was a conversation Jordan Hall and I had in 2008, where I pointed out when I joined the workforce in 1975, the ethos and the companies I worked for was that just because something was profitable doesn’t mean you should do it. There was still the concept of right and wrong. By 1994, Jordan Hall, when he joined the workforce about generation younger than I, he said that “ethos was gone and they had been replaced by the eighties ethos of if it’s legal and profitable, then you not only should, but you must do it irrespective of whether it’s good for society.” Then the next evolution was, is it arguably legal? And is it profitable?
Jim: And then the final destination, which we both figured happened by the mid double odds was if you’re caught and the costs of being caught are less than the benefit of exploiting the violation, then not only can you, but you must violate the law. And we can think about Facebook and Google as two examples. They’ve been constantly caught by the regulatory agencies and fined, in some cases billions of dollars, but they keep doing it because they know that the wind from violating the social norms and the legal requirements is way greater to build their empire than paying even $5 billion worth of fines. And so that’s the moral framework of late stage hyper financialized capitalism. And it sucks. And that’s why we’re building game Bay as an alternative.
Samo: I mean, very, very directly.
Jim: Yeah, exactly. Well, let’s move on to some other interesting things. Your time is getting short, unfortunately. We can talk for two hours easily. One of the key points you make is functional institutions are the exception, not the rule. Talk about that.
Samo: I think it’s very easy to produce the appearance of functionality, the appearance of the gears and cogs of the organization fitting together than it is to produce its actual substance.
Samo: If you know, the lights are on in an organization, this doesn’t necessarily say anything about the organization itself, except that it’s capable of paying the power company to keep the lights on. You might have massive reservoirs of both financial endowments, but more importantly, prestige endowments or remnants of human capital. And you can keep this disappearance around for a very, very long time. I think the most interesting show of whether an institution is functional is how well it can reorient and adapt to a radical change in circumstances. So something that has been doing the same thing for 300 years in an unchanged world, or in a way that where the world hasn’t changed much, that’s not necessarily evidence that the thing is still functional. Strong evidence of functionality would be several massive changes, all navigated well. Now this can be cultural changes. These can be technological changes. These can be geopolitical changes. But if you have four or five unpredictable events, yet the institution has still navigated them well, this means it has a self re-engineering ability, right? It’s not just an inert machine. It is at least a machine with an active engineering team working on it.
Jim: Actually the data is interesting in that regard, Jeff West and another one of our people’s name will come to me. They’ve been gathering data on the longevity of various kinds of institutions and they found, for instance, business firms actually die off at a predictable power law distribution rate. It’s very unusual to find a company that’s more than a hundred years old, and there are no companies more than about 800 years old. While cities on the other hand, the oldest city on earth’s probably Damascus and it’s four or 5,000 years old. And it’s not clear when it would die. So something about the nature of business firms seems to be particularly oriented to not being able to navigate one transition over another and maybe they do two or three, but they don’t do the fourth. And they end up dying. Another distinction you make, which I love and I’m going to start using this, is live players versus dead players. Tell us about that.
Samo: Life players are operating in a responsive, creative way with regard to their environment, right? It requires an act of perception of your environment. Dead players, on the other hand, they might be doing very well right now. However, they’re only executing a preexisting script, right? This preexisting script, it might be something like an archetype break early in the conversation we mentioned, blacksmiths is such an archetype, or it could be a literal, bureaucratic checklist. And again, the massive change in circumstances might quickly reveal who is a live player and who is a dead player. The results are sometimes very surprising because the usual outward signs of success might’ve been accumulated due to chance or accumulated in a previous period where you were still paying attention to the environment. One other way of thinking of it is that many dead players are people who fallen asleep, who’ve been going on autopilot who have not needed to perceive their environment for a very long time.
Jim: You gave the example of a possible dead player is Apple, and I think you might be right. The most valuable company on earth, huge prestige. Their brand has got…is considered by far the most valuable brand on earth. And yet what have they done recently? Not a goddamn thing. They seem to be on the mission of economic optimization and stacking up cash to a ridiculous degree. Now, an interesting test to see if they’re alive player or a dead player is, do they actually deliver on a world shaking self-driving car? That would be, I think, an interesting sign on whether they’re a live player or a dead player. Any speculation? Because you mentioned it in the book, Apple as a possible dead player.
Samo: My inclination is that likely a dead player because in a way they’ve become sort of a high-end luxury brand. However, it’s a high-end luxury brand or at least has the appearance of it that hasn’t changed its fashion in 10 years. In a way it continuously asks the question of what would Steve jobs do? How would Steve jobs design this electronic device? How would he want it to be used? Well, Steve jobs didn’t ask that question, right? He would have probably changed the style of the company radically, right? The correct way to style machines, UIs, and so on in 2008 should be very different from 2021. Yet the aesthetic continuity there is very much apparent. Now you bring up the possibility that they might engage in developing a proper self-driving car or jump into other industries. I think the example of Google here is instructive where Google funded a project to pursue a self-driving car.
Samo: I personally was very optimistic when I heard about this. I thought that we would have self-driving cars built by Google within five years or within 10 years. We certainly didn’t. And I’d be very happy to bet against us ever receiving such a product from Google. So in a way, Google was maintaining the image of an innovative company so that people don’t think of it as a search engine monopoly, right? Because a search engine monopoly that might invite pushback. I wonder whether Apple is making a similar decision, something that’s for show, but no real desire to deeply restructure the company into something that could be also a car company.
Samo: We’ll see. I mean, I follow this area pretty closely. We had Shahin Farshchi on episode 94 of the Jim Rutt show who’s a venture capitalist who also worked in the self-driving car businesses at General Motors and knows a shitload about it. And had the most non-BS evaluation of where self-driving car tech is. And he’s still hopeful. He believes it’ll take a lot longer than the zealots thought. There’s no way, obviously, it’s going to happen at 2021, but by 2030, it might. This is the famous statement that we tend to over estimate progress in technology in the short-term and underestimate it in the longterm. So I would not write off Waymo. In fact, we both agreed Waymo might have the best shot of all still of delivering at least the technology where they have the capacity to take it to market and turn into an innovation or not less clear. Somebody like Tesla or Ford or General Motors or Toyota, or one of the Chinese companies may have a better chance at creating the innovationary context around the invention and Apple, again, this will be an interesting test.
Samo: So, well, let’s move on another idea that again, I’m stealing it, I’m using it. The idea of borrowed versus owned power. Tell us about that.
Samo: Borrowed power is something that has been lent to you, right? It’s something that you have received on behalf of someone else, right? The very classic example of this might be in politics and political theory, where at one point the monarchs decided that they would replace a feudal structure of personal oaths owed to them with something of a bureaucratic structure, right, where they’re salaried civil servants. At the very start of it, the salaried civil servant was completely powerless next to something like a Monarch. However, you wait 10, 20, 30 years, especially after there has been a succession. And suddenly the new King has no idea of how things are done, but the civil servant is the same. So there was a transformation during that time of what was for once for a bureaucrat borrowed power into owned power. And I think a lot of this is done through information asymmetries, where you have something called the Principal Agent Problem.
Samo: If I say wanted to hire an intelligence agency to keep secrets for me, well, that’s a terrible market. You is… If there are any good at their job, they can obviously keep secrets from me and they will have some relevant conflict of interest. So one of the historically interesting details for me is say in the political development of the Soviet Union, where the KGB, at one point a straightforward instrument of terror for Stalin. After Stalin comes to dominate Soviet politics to the point where in 1985 it’s an open question, whether the KGB or the communist party is the stronger organization. So be careful who you deputize, how you deputize them. They might over time, having come to understand their own position much better than you do, actually constrain you in a very relevant way. Now the best forms of power, of course, are things that no one can take from you; no one can lend you. Arguably, knowledge is such a form of owned power, right? Anything you have actually, in-sourced where you’re not relying on someone else’s understanding that’s pretty reliably yours.
Jim: It’s funny. When I was reading this book caused me to do a lot of introspection and I realized that my own life I had intentionally turned away from borrowed power towards owned power, whenever the trade was even within a factor of five close. I never thought of it that way, but I just seem to have an instinct to prefer owned power versus borrow power. Even when offered are extremely nominally, powerful positions of the borrowed sword.
Jim: Let’s move on to another one of your topics, which I found extraordinarily interesting, the succession problem, which I think is closely related to the idea of institutional decay and great founders. So talk about those three things together.
Jim: …founders. So talk about those three things together.
Samo: Well, institutions built by one generation of founders must be successfully handed off to the next to keep these organizations functional. Functional here, meaning fit for purpose succeeding in their formal purpose. In the absence of such succession, I think organizational sclerosis or constant internal conflict sets in. The succession problem as I think two components, skill succession and power succession. I think in public discourse and political thought, we tried to solve one or the other, but not both. When we try to solve knowledge succession, that is skill succession, we understand the importance of close personal collaboration of mentorship. On the other hand, when we think of power succession, we tend to want to disperse power, right? We want the successor to Steve Jobs to be less powerful within the company than Steve Jobs himself.
Samo: I think that that is an understandable political impulse though it is one that is sometimes deeply misunderstood. If you think of a system such as checks and balances and you imagine something like the United States works the way the civics class says that it should work with the executive under a president than a legislature under Congress and then the Supreme Court, you actually want each of these three bodies to stay powerful, right? If Congress over time was becoming less powerful, this actually messes up your political architecture, or if the president somehow was losing authority to say on elected officials over time. Why might that be happening? Well, yeah, I think it’s pretty clear that it has been, at least through the course of the 20th century. Since I briefly talked about the US system, I think that say the Supreme Court is the only one of these three bodies where I think that’s actually increased significantly in power over time since the 1950s, let’s say. But taking it back from the political realm to the organizational realm, I think we believe that competition is good.
Samo: And I think that this is, we have a Darwinian view that’s present in our economic, political, sometimes even academic values. These underwrite various legal and social obstacles we impose on power succession. Since we tend to think that this is going to also solve a skill succession by disempowering the holders of institutional positions from choosing their successors, we think we ensure that they will be replaced based on merit. I think this often fails. So I’m actually going to now talk about some societies that did it radically differently. I think ancient Rome is a very interesting example. It’s extra interesting because again, the political architecture there nominally was Republican for a long period. It did also transition to an Imperial structure. The Imperial structure did not end up working very well. Often, it led to endemic Civil Wars.
Samo: The one period where however there were no such Civil Wars had the interesting phenomena of a non bloodline-based hereditary monarchy, so an adoptive monarchy. You had a sequence of Roman emperors where each emperor took on the title of Augustus, and their successor was adopted, even though we’re talking about an adult man adopting another adult man as his own son. So they were adopted in name becoming successors to the dynasty. That one would take the junior title of Caesar, right? And when the Augustus passed away, well, Caesar would become Augustus, and appoint their own successor. The sequence went through what is sometimes been called the five good emperors by historians, Nerva, Trajan, Hadrian, Antoninus Pius and Marcus Aurelius. Marcus Aurelius is also famous for having a less than exceptional son, right? His own son, his biological son inherited the throne, became emperor, and according to most consensus views, doesn’t make the list of the five good emperors.
Samo: So I think this is a very interesting social technology in a way, right? We today understand the value of adoption when it comes to ensuring that say children have families that raised them. We understand that the orphanage is not a good, useful social technology. An absolutely massive social experiment was actually run on this by Ceausescu’s Romania.
Jim: Horrifying. Horrifying outcome, right?
Samo: Yeah, exactly. It was interesting because it was again a communist country, which a similar to China, attempted to population planning approach. However, Romania wanted to massively increase fertility. Well, they banned a contraception. They put all other limits. They encouraged as much as they could basically fertility as a state would, and the result was a lot of abandoned children. And then the state-run orphanages really had a horror show around them, right? Still, we, also in the West, when you read 19th century novels, people were aware of this.
Samo: Still, our society understands the taking someone who’s not biological related, bringing them into your family, raised him as your own child. What we don’t understand is inducing an adult new family member, right? The only technology we really know for this is a marriage. And why might this be useful? Well, one of the reasons it might be useful is that it presents a powerful political alchemy where your greatest rival, the person is the second or third most powerful person in say the Roman empire, who might be inclined to start a Civil War against you, right, who might want to undermine your legacy, who this one simple mechanism, you, first, credibly promise that this is your political successor. And secondly, they now want to enhance your legacy rather than undermine it, right? They want to put up more statues of you rather than tear down the statues of you. So I think for the Roman empire, for their political problems, this was a very smart solution. And the marriage aspect is also interesting, right? There’s a different social technology from a different, more modern society that is worth bringing up here.
Samo: This is Japan. Today of course, we see that Japan is a developed industrial society. However, it has a unique practice, right? The practice called mukoyoshi which is son-in-law adoption. What happens is that you have essentially an industrial dynasty, right? You have a family, a family name that is associated and that runs a major Japanese corporation, companies such as Suzuki, Kikkoman or Toyota. Well, all of these companies have in fact made use of the practice of mukoyoshi, that is the practice of son-in-law adoption, where the daughter of the current industrialist is married off to someone who is selected for their business acumen. And this son-in-law adopts the family name, right? They adopt the family name. And again, you have social succession without a straightforward familial tie, yet all the intangible social capital of the family name, right? Friendships, reputation, personal assets, not just company assets, these are all transferred. And I think that makes it for a much stronger position in terms of solving, say the power succession problem.
Samo: How could if Steve Jobs handed off his company to someone? Well, the West doesn’t really have such a straightforward adoption technology. I think we have some weaker versions of it, such as say in mathematics, being mentored by an exceptional mathematician, is usually considered in itself a credential. Now, of course you have to demonstrate exceptional mathematical abilities. But the fact that that is considered a credential, shows that when it comes to mathematics at least, we do believe in skill succession. We do believe in real knowledge transfer and education. Possibly here, I would make the analogy to the orphanages where, perhaps, when it comes to the very peak of human performance, universities are much more like orphanages and mentors are much more like parents than is usually acknowledged. And that’s an argument that goes back to Socrates.
Jim: That’s interesting. Let me probe on this a bit, the famous Roman empire succession problem, where other than a short period of time with the good emperors resulted in one-
Samo: Civil War after another.
Jim: Yeah. It’s crazy. It’s amazing. It lasted so long, right? Holy shit. The institutional robustness and then the other one you didn’t talk about, but you do talk about it in the book, is the overly complicated scheme put together by Diocletian, where he formally had junior Caesars reporting to the Augustus’s, division of territory amongst the all four of them, the East and the West. And from a social engineering perspective, you’d say, yeah, this seems interesting, but, again theoretic, so that turned out not to work, right? So one has to be really skeptical about any such arrangements. I famously say that one of the biggest things I learned from my foray into complexity science is epistemic humility about such things, right? They often don’t evolve the way the founder intended by any means. And I think the Diocletian story is a classic example.
Jim: I would also though say that in the business world, which is really where most of my experience comes from on such things, there is often really thoughtful attempts to deal with the succession problem, but they don’t always work. For instance, in two big companies that I worked for in very senior positions, we had a formal succession plan that went three levels deep from the CEO. And each person on the succession depth chart could be rated as either ready to move up, ready within two years to move up, or possibly ready at some point, but not yet there. And we tried to have at least three on each rank including for the CEO.
Jim: And basically the rule was that let’s say at the Thomson Corporation, where this was pretty well established, that if nobody was ready, then you went outside. But if somebody was ready, you gave them the job, essentially. And that worked actually worked quite well. And we did an annual review of the succession depth chart for each person. We did it recursively down the tree, where the bosses one level up got together as a committee and reviewed the succession plans for each of their equals, essentially. And that actually worked.
Jim: The second point is, and this is very near and dear to my heart, the difference between power and skill. And I think there’s two parts of that, that one, I’m coming more and more skeptical about role-based authority. And this is the power component. In fact, in our game B ethos, we argue that we should try to transition to role-based authority where the person who has the greatest skill in any given domain has temporary leadership, but seeds it back when their particular skill set is no longer the optimal one.
Jim: And second, and again, this applies more to business than to governance, but has some relevance to governance, is that the skill necessary does change. And again, I’ve spent a fair amount of my life in early stage companies as well, and the person or persons that’s the right leadership team for the start up of a company, or to get it to 50 people or to 100 people or to 300 people, the various phase changes that occur in the unfolding of an organization is often not the right person to take it to the next level. And so even if you are going to stick with position-based authority, the skills that you need at each of those may well be different.
Jim: And in fact, when I’m mentoring startups CEOs, and choosing to mentor startups CEOs, one of my tough qualifying questions before I agree, is are you willing to step aside for the right person three years from now? Should you not develop to be the right person at which I’d say it’s at least 50/50 that you won’t and that we can find the right person. And so I think that’s also really important. Both things are important. Is positioned-based authority really the right way to do something? And that position-based authority, the skills that should be associated with that can and do change over time.
Samo: Yeah. I think that it’s notable to point to the requisite social technologies to have these smooth transitions, where what is optimal for the function of the organization actually works out in the internal office politics. We can’t wish power away. Power exists. It exists in our organizations and it does get attached to institutional positions whether we like it or not. And this I think is one of the reasons where I fear that often I have these statements where I say we talked earlier about the replication crisis ironically being a show of strength. I’m now going to argue that startup culture, while incredibly productive, might actually be a show of weakness because in modern American economic contexts, it proved best for talented young engineers to create completely new companies instead of rising up within old companies and redirecting them to deploy their massive resources, massive technical expertise, not just financial resources, towards new problems.
Samo: Companies used to be much better at this. There wasn’t really a startup culture as we currently understand it in say, a late 19th century industrialization or heck even the 1940s and ’50s while they of course have new companies, they also have old companies doing new things. So while I think startup culture was good, produced a bunch of new technologies, it actually shows that power succession got stuck within normal corporate America.
Jim: Ah, that’s an interesting conjecture, actually. It’s certainly true, objectively, right? The pharmaceutical industry, many of the biggest players have explicitly said, “We’re stuck. We can’t invent shit of any significance.” And so what we’re going to do instead is invest in or build relationships with a whole portfolio of early stage companies and either license their products for gigantic windfalls to them, or just buy them, right? And Google, even, which has a more innovative culture, at least it did than most, has also taken that road. What was the last time Google invented something fundamentally new in their core business? I can’t think about it. I can’t even think of it, right? Most of the things they’ve added, they’ve either acquired or they’ve done in pseudo independent internal startups. And even those mostly have not worked. And of course, the definitive guy who wrote about this is Clayton Christensen from the Harvard Business School who wrote one of the five business books actually worth reading called The Innovator’s Dilemma, when new technologies cause great firms to fail.
Jim: And his is a very subtle analysis of the internal dynamics in a company. I have seen this where the vested interest in the current product that pays the bills is able to frustrate and trump often by passive aggressive techniques and control of the budget, the upstart who has a business idea that actually threatens the core business of the firm, when of course it’s way smarter for the firm to cannibalize itself than to wait for some third party to cannibalize it. But the internal dynamics of a traditionally organized command and control organization where people don’t have skin in the game will produce this result almost always. But really good management, the right organizational structures can at least in part work around that.
Jim: One of the things we did at Thomson, which I thought was very interesting, is that we had radical decentralization. In fact, I used to actually jokingly describe Thomson as a feudal empire, where we had, for whatever reason I used religious titles, oh we have a Pope, we have Cardinals, we have Archbishops, we have parish priests, et cetera. And each one has great autonomy in its own area. We also had a big pot of $150 million a year that could be allocated to anything. And that we had a small committee.
Samo: That fund likely ended up being very generative.
Jim: It was, and of course a lot of it was wasted. And in fact, I can still recall a talk I gave about this to our senior management team, the top 200 people in the company. Each year we had that meeting. I’d almost always say that one of our great advantages over our competitors is we have 200 people who are allowed to waste $50,000 while our most direct competitor, at that point McGraw Hill, who we knew very well, only three people are allowed to waste $50,000. And I’d always look over and grin at the CFO while I was saying that, and he’d scowl, but he understood that I was correct.
Jim: And that this was a significant competitive advantage and the threshold of our free money committee for explicitly 50 grand, because in our businesses, that was enough to do some serious research or knock together a smoke and mirrors prototype or something like that, but it was not enough to launch a product. So we were easy touches for $50,000 and large percentage of them failed. And we thought that was our way. And then I had actually read Christensen’s Innovator’s Dilemma and a surprising number of our other executives add as well, and we specifically tried to engineer our company to do that. But of course this is entering back to your second point about succession, through a series of accidents of history, enough people were brought in from outside the company in the senior roles, crazy story with the person who should have been the next CEO, had a family crisis that didn’t allow him to do so.
Jim: And the people they brought in for the new CEO and the people around him didn’t really understand the old time religion. And then over a period of about five years, all the Cardinals left and most of the Archbishops, and the company collapsed into conventionality, lost its radical decentralized culture, became a command and control company run around financial metrics, and completely lost its way. So it’s an interesting example of both how to fight this trend, and if succession does not work. And the key succession event here was driven by an exogenous event, which is the wife of the person who should have been the next CEO, became deathly ill. And he had to step aside from the succession. He was on the succession chart as the guy with 100% support from all the rest of the hierarchy. And then over a period of five years, the whole scheme unraveled. There was a way to fight it, but if succession doesn’t work correctly, it’s damn hard to sustain over the long haul.
Samo: Yeah. Yeah. One of the interesting things that it’s worth considering is like how many organizations spend millions of dollars in an effort to not waste $50,000, right? There’s a very strange type of risk aversion that masquerades itself as fiscally prudent, but it’s actually anything but.
Jim: Exactly. In fact, my words for that, which I would also use in this speech and would also get a friendly scowl from our CFO who was hilariously also a standup comic, whoever heard of a standup comic CFO, but this guy was funnier as shit and his talks would just get everybody would bust their gut, is that, actually it was a two part statement, which is we can always get more money, but we can never get more time. And to move innovation forward, I am happy to lubricate with cash, which means that if you can show me that the application of money, even a somewhat wasteful fashion will increase the pace of our innovation, I am happy to explicitly trade money for time. And to your point, there are many corporations with extraordinarily anal financial allocation mechanisms that either spend millions to avoid losing 50,000 or so anal about not losing 50,000, that they lose pace. And as a student of military history, pace is one of the great strategic weapons that’s grossly underestimated in the business world.
Samo: Yes. The interesting thing about the succession problem is that it’s in fact impossible to avoid, right? It’s human nature, as you mentioned earlier, where we’re mortal, we’re finite. At least that’s our current state. So any organization that’s not planning for it, sooner or later, it will encounter these crises.
Jim: Yeah. There’s as my example shows, we actually had a good plan, but fail due to an exogenous event of history. And of course we probably should have had a the equivalent of the Roman sensor or something that could intervene, but we didn’t. Our mechanism was not robust to a single failure, which was unfortunate, but that’s the way she goes. You give another interesting example of pseudo-democracy, but with this succession mechanism, and it’s a little different than what we think of as democracy in the West. And that’s Botswana. Maybe you could run through that example, quickly.
Samo: Yeah. Botswana is an interesting country because it’s a resource rich country. So development economists would tell you that this means that necessarily it encounters the resource curse, which I think is not a phenomenon that is quite as real as economist would like to say this. It’s an issue where a relatively simple extractive economy results in political instability and all other issues. It’s a landlocked country, which is extra bad in a relatively globalized world as the world was in the post-colonial period as it arguably still is, having access to the world’s oceans is absolutely vital. Shipping costs remain massively lower as the word implies over the oceans, over sea than they are over land, right? A cargo ship still beats a train. And of course we’re talking about Africa, the infrastructure wasn’t developed yet, so there were no real trains. Despite all of this in the post-colonial period, post independence, Botswana struck a productive partnership between the country itself and the De Beers Corporation, which is a diamond corporation.
Samo: So not only was this a resource-based economy, it was a diamond-based economy. This should have failed. And I think a significant reason that it didn’t is that every single president of Botswana has been the vice-president of the previous one, where learning on the job is very much something that can happen since this is a tiny, tiny country with a population in the hundreds of thousands. I very much can relate to this since I grew up in Slovenia with a population of 2 million people. And a common political saying is, for a country of this size, we have about 1.5 teams available, 1.5 competent teams to run an administration. For Botswana, this problem of course would only have been compounded. This is then a system where there is a public ascent, right? There are elections. You still have to win this elections, but you gain something of an incumbency advantage since you in fact are a familiar face to the public. You know all the relevant members of the government.
Samo: But this is not an incumbency of a single person. There’s in fact a transfer, right? Since you are not the previous president, you are merely the vice-president. I think this results in a rather smooth set of political transitions and more importantly, enable the country to do the long-term planning that’s absolutely vital for a resource rich country. If we were to compare it to another, let’s say wildly successful resource-based country, such as a Saudi Arabia, arguably, Saudi Arabia did a far worse job of planning for the future than Botswana did.
Samo: Botswana’s economy has started to diversify. Its corruption levels are among the lowest in the world. Its economic growth has been solid. The population isn’t mostly in make work government jobs rather are gainfully employed in other sectors of the economy. And given all of their constraints, I think a small African country working well is one of those things we don’t pay attention to, but actually perhaps it’s way more worth paying attention to than another country not working. At the end of the day, there’s only so much you can learn from train wrecks. You have to also study working trains. At least if you’re in India engineering or reverse engineering business.
Jim: Cool. I like it. All right. Well, that’s extraordinarily interesting. I’ve been watching bots one out of the corner of my eye and it does stand out as a statistical anomaly again and again. It’s very interesting to learn more about the mechanisms that they may have used to achieve these outstanding results. Well unfortunately, we run up against our time window here. But this has spend such an interesting conversation. I would love to schedule a second episode to finish going through the book and have some other conversations along the way. Does that work for you?
Samo: Oh, I’d be delighted.
Jim: Oh wow. Let’s do it. All right guys. Let’s wrap it here.
Production services and audio editing by Jared Janes Consulting, music by Tom Mueller at modernspacemusic.com