Financial Crash Expert: He Predicted The 2008 Crash, Now He Says Capitalism Failed, It’s Too Late!

Our political class has lost control. The right is getting more right than ever. And any time you have a combination of economic problems and social and stability and cultural problems, you put all those things together, it's not a good time. It's a time when conflict, violence, civil unrest, all of these things are much more likely. Oh, civil unrest is absolutely guaranteed. And what you are now seeing is, I fear, the beginnings of a totally new level of separation between people. We are on the road to civil unrest and violence. But I'm glad we're having this conversation because these are difficult things to talk about. And that's why China is outperforming the rest of the world. There are so many freedoms you don't get in America that you do get in China. Would you prefer a Chinese system if you. To America? Yes. What about political freedom, freedom of the individual, freedom of speech? Do you think Stephen could run his show if he was a Chinese citizen in China and have any conversation he wanted? And you think communism is bad? I grew up in the Soviet Union, so yes, I do think communism is bad. And you end up in a place where the economy is just screwed. So you get equality, but everyone's just equally poor. Constantine, what is your perspective on AI? I think the biggest threat to humanity, if you talk about AI, is actually the fact that you're creating something that's smarter than you. And if you're creating a superior species, you will become an inferior species. Best-case scenario, you become a pet. Worst-case scenario, you become a cow. So my next question logically becomes, what can we do about it? There is an actual solution that's available that's clear. I think what we should really be focusing on. You're wrong. This is where we're likely to have very strong disagreements. Guys, I've got a favour to ask before this episode begins. The algorithm, if you follow a show, will deliver you the best episodes from that show very prominently in your feed. So when we have our best episodes on this show, the most shared episodes, the most rated episodes, I would love you to know. And the simple way for you to know that is to hit that follow button. But also, it's the simple, easy, free thing that you can do to help us make this show better. And I would be hugely grateful if you could take a minute on the app you're listening to this on right now and hit that follow button. Thank you so, so, so much. Constantine, in terms of everything that's going on in the world at the moment, what are the subjects that are most concerning to you? I think that I wrote an article a couple of years ago called Why I Fear the Future, in which I basically predicted that what you were about to see was the rise of far-left populism and the rise of right-wing populism, and in some cases, far-right populism, particularly in Europe, but also elsewhere. And I think that's exactly what you're seeing in the Western world. And then geopolitically, the war in Iran will have an impact on the global economy that's only going to fuel that further. So I think the trend, you know, people have spent the last 10 years talking about polarization without really understanding the process that was driving it, in my opinion. Particularly in Europe. And what you are now seeing is, I fear, the beginnings of that process actually going to a totally new level of separation between people. And what's the root cause of that? Well, the root cause of that is a mixture of things, of course. Part of it is economic. Europe has basically stagnated since the great financial crisis. This country, Britain in particular, has stagnated economically. But a lot of it is the consequence of mass unfettered immigration and people's concerns about what has happened culturally and demographically. And these are difficult things to talk about, which, you know, some people find challenging to even discuss. But it's very clear to me, if you look at, you know, the AFD in Germany, Marine Le Pen in France, Giorgio Maloney in Italy, Farage and Rupert Lowe in the UK, what we saw in Soweto, however you pronounce it, a couple of weeks ago in Spain. These are all things just, you know, the visual medium is very powerful. When you see 60,000 people enter a country illegally in a day, that sort of imagery is likely to create a very strong amount of pushback. Oh, you came prepared, huh? Yeah, well, you know, if you're a normal person and you see this, whatever your other views, you just go, well, like, what's going on? That will be your question. Whether you're a really nice, not racist person who really, really thinks, you know, no human is illegal. You're thinking, what is going on here? And the compassion and empathy you might feel for people fleeing conflict, for example, is unlikely to extend to something like this because we know that these people are economic migrants overwhelmingly. And they're coming, if you ask them, which many people did, and ask them, why are you here? They will say, I want to have a better life for myself, which, you know, I don't blame people for. I myself have moved from a foreign country to Britain. And if you were in that position, would you do the same thing? Well, I don't know the exact position that they're in. I don't know the exact position that they're in. I, what I can tell you is I came to Britain legally because that's what I thought you're supposed to do. Are you supposed to follow the rules? So if I were in that position, it depends what you mean by that position. You know, if I had a wife and children, would I abandon them to try and get to Europe? And, you know, I don't know, but a lot of these people are overwhelmingly young men who probably don't have a wife and child. So it's difficult. I don't know. But if you're in a situation where you had a wife and child, let's say, and there was a promise that if you got over that border over there, you could have a better life for your wife and child, a significantly better life for your wife and child and send the money home and potentially even bring them over at some point. And if you were currently living in a point of hardship, would you cross the border? I don't know. I've never been in that situation and we don't know. But the issue for us, I think, in the West is not so much do we have empathy for those people? It's kind of unimportant actually for this conversation. At a personal level, you want to feel like we're all empathetic, but the reality is, it's a practical issue. We've talked about this so many times on your show about how so much of our decision-making and public conversation is driven by what makes us feel good as opposed to what works. This doesn't work. I think there is an element of the importance of that question in the sense that if you don't have empathy for them, you blame them. You shut up outside the hotels. I think the blaming of them is a pointless distraction and is kind of irrelevant. The question is, what should we be doing about this? Right? The fact is, this is not acceptable. And what caused it? Yes. Well, what caused it is the world is unequal. And there are poor parts of the world from which people would like to move to richer parts of the world. It's a very understandable decision. But unless you have a world in which everybody has the same quality of life everywhere, which we're never going to have because that's not how the world works, then countries will have to have borders that they enforce. And that was the consensus view around the West for the entirety of its history. And how is this, contributing to the problems that you described in the West? If you're looking at that and you are in the center, center-right, maybe old school leftist who sort of believes in high levels of redistribution, but believes in borders at the same time, you are looking at that and you're going, our political class has lost control. Our political class allows tens of thousands of people to enter Britain illegally on small boats every year. People on the right will look at that and say, we need to get tougher on borders. We need to get tougher on immigration. We need to get really tough on illegal immigration. And as long as the political class left and right refuses to address that issue, as they have done for this entire time, you will see more people on the right adopting harder line slogans, harder line policies when it comes to illegal immigration and immigration more broadly. So it sounds a little bit to me like we're saying, unless we address this, then the right has a very effective marketing campaign. Well, the right has, a very legitimate grievance about what's happening to their society. And that will be very effective electorally, of course. And the other thing you said was stagnation, economic stagnation, I'm presuming. Yeah, of course. So this polarization that you're talking about, this economic stagnation in Europe, where does this lead us? Well, I hate, as you know, to make predictions about the future with any great confidence. But I think anytime you have a combination of economic problems and social and stability and cultural problems, you put all those things together, historically speaking, it's not a good time. Doesn't mean they're guaranteed. Doesn't mean you can't change course. Doesn't mean you can't course correct. But if you don't, we are on the road to best case scenario, civil unrest and violence, for sure. Do you see evidence that there's going to be a remedy to course correct the issue you've described? Currently, I don't see that being addressed. But we are in a time when, in a time when unusual things are possible. And so at the next election in Britain, you may see the right-wing populace come in. And then the question is, can they do the things that they're promising to the people who will vote for them? And there's a big question mark about that, because the things that they'll be promising, which is about addressing not just this problem in terms of people currently coming in, but the people who are already here. You know, I don't know how much exactly we spend now, but there was a point at which we were spending eight million pounds a day on hotels for illegal immigrants. So it tells you the scale of the problem. And it's a very difficult problem to address because the legal system and international conventions and all sorts of other things that are now in place and they're now enforced make it very difficult to address. It's not a dishonesty, but the thing that people on the right don't tend to say is even once you've dealt with illegal immigration, the country's not magically going to be better. You have to have an economy that's growing for people to feel like their lot has got better. The fact that you have rightly removed people who should never have been allowed in in the first place. Will contribute somewhat to easing their concerns, but that's not going to. to solve the problem and so even if you get right-wing populists into power that's not necessarily a remedy for addressing the tensions that i'm talking about and in the united states a different set of issues but maybe symptoms are similar polarizations leading to an inequality is leading to a rise in socialism and and then the right is getting more right than ever the right is getting more right than ever i think trump's election was kind of like the peak of it and and it's just carried on in terms of ice and deportations and whatever and look there's a lot to be criticized about the trump administration the one thing they have done is close down the border and i think that's a very good thing and it was very necessary but in terms of the the rise of socialism and look democratic socialism we should be honest and just call it communism because that's that's what it is it's a very unwise but understandable reaction to the economic circumstances of young people's lives in particular if you're locked out of the housing market which historically speaking is really the only way for an ordinary person to accumulate capital if you don't have access to capital at a time when asset prices are inflating and have been inflating for a long time you're basically watching the possibility of capitalism run away from you of course you're going to turn over the apple cart and you think communism is bad i i grew up in the soviet union so yes i do think communism is bad ideologically it might sound great to people and i understand why quality to all men everyone being you know equal in every way it's wonderful it just doesn't it's not compatible with human nature for all sorts of reasons the most obvious one is you know the the basic 80 20 rule 80 20 rule of things most people are not aware of it but what communist communism tries to do is to take from from the disproportionately productive 20 and spread it out across everybody else the problem is that disincentivizes the 20 from doing anything and so you end up with a communist system like the one we had in the soviet union where no one really has any incentive to produce to create to innovate and so you get a very stagnant economy and on top of that then you have central planning where the government is trying to decide what to do they're not getting market signals about what's the right or wrong thing to do and you end up in a place where the economy is just screwed so you get equality but everyone's just equally poor steve uh-huh what do you think in terms of what constantin said to me what he said that he thinks there's civil unrest potential unrest is absolutely guaranteed uh there's all i can see is civil unrest ahead of us because it isn't just communism in that sense there's a russian soviet version that you experienced uh that's failed it's also capitalism and capitalism has failed us i think capitalism is going to fail and you guess why i blame for it economists neoclassical mainstream economists have a fantasy vision of capitalism and that fantasy vision has led them to trivialize what's happening with global warming and most people simply aren't aware of that they've they've done this so nobody is worrying about global warming and they're not aware of what's happening with global warming because they think it's something not nobody but the the political authorities are not putting any effort into global warming because they read the economists and the economists tell them that by 2100 if temperatures rise by three degrees there'll be a tiny fall in gdp so why worry about it in fact we're starting to see the beginning of it this this year with the crazy on then are coming our way the crazy weather we're living through in in england right now and the system is going to collapse because the productive system won't be able to cope with the change in the climate so that's what i see as the main source of conflict i don't i think the everything else we're seeing is trivial compared to what that's going to do what about so constantin talked about these crossings in sueta in spain yeah and he was alluding to the fact that this needs to be addressed or this polarization which is having lots of downstream consequences isn't going to change what is your perspective on again there's so much of a fog of misinformation around this these days that it's very hard to know whether what you hear is accurate but the proposition i've been told is that morocco has close relations with israel and the zionists wanted this as a way of destabilizing spain which is about the only country in europe that is attacking the zionist state and so this was a political setup well hold on a second but spain has the ability to enforce it on board of course it does the fact that this actually happened is arguably being argued and i don't know whether it's right or not i'm giving up on trying to say whether something is ai or not these days yeah but it's the argument has been that because the spanish government came out and was critical of israel critical of zionism then this was a setup by the israelis through morocco to disturb spain hold on what i'm making a different point which is if my four-year-old wants sweets at 11 o'clock at night that's true but i am the idiot who gives it to him and that and he then stays up all night and european countries refuse to enforce their borders whatever you think israel is doing by the way i've seen literally zero evidence to support this theory but let's say it's true just for the sake of argument it's ultimately up to spain it's up to italy it's up to britain it's up to other european countries to enforce the border that is something that we are capable of doing and it's not like this incident sweater is the only time this has happened three million people slightly under but around three million people have crossed the mediterranean on boats in the last 10 years yeah i'm not sure if that's and that's not israel doing it that's us allowing it to happen but also i'm destabilizing libya okay if we do if the libyan slave markets exist because we came we saw he died quote hillary clinton i completely agree the extent to which the west is destabilized the reasons from which the migrants are coming has to be acknowledged if you don't acknowledge it then you're blaming the people who are the sandwich between two political blocks but i i did acknowledge it i completely understand and i've been against a lot of the foreign interventions that the west is engaged in but a lot of people and we know this from surveys from interviews from the types of people who come most of these people are economic migrants doesn't mean that they're wrong to pursue a better life but they want to move to europe and i have i look this is not me saying it it's a friend of mine who's in iraqi and this is what he says he says in the middle east we have a saying if you want to work you go to america if you want to live on benefits you go to europe we are creating an incentive structure in europe that allows people to come and feel like this is a place in which we will provide a life for them that they don't have to provide a life for themselves in that incentive i mean you're an economist although an economy an anti-economist do you remember that but i do but i doubt we disagree about the importance of incentives incentives but also incentives to push people out of where they are rather than to reconstruct where they are and make it more livable i'm all and that i mean the one country we're not seeing a lot of economic migrants from is china now you say what china is very nonetheless nobody wants to leave the place because it's booming if there was an economic stagnation in europe would this subject be as inflammatory for people would this be again we're failing on all sorts of fronts in the uk is not a booming economy you've often said constant in that we're spending too much money well we're borrowing money now to pay off money we borrowed before this is wrong tell me why okay have you ever done accounting i've done my own accounting okay okay do the accounting and you'll see the government does not borrow when it spends more than it takes back in taxation you were asking me about our spending too much money i don't want to get a bog down on this the reality is if you spend more on welfare than you do on defense so if you spend more on welfare than you do on education if you spend more on welfare than other things you're not spending money to help somebody get the mental health intervention they need to get back into work that's not what we do in this country and andy burnham actually said that's not what we do in this country and actually is talking at least about attempting that what we do instead and we've had people like fraser nelson uh who's the editor i think he was the editor spectator at the time now he's at the times who's done a lot of research into this and what he basically uh came to is that what we're really doing is putting people in a position where they're they are getting money in order not to get back into work the incentive structure is such that it actually makes no sense for them to to get a starting job which will not necessarily be well paid but the tax incentives just mean that that they're actually better off on welfare if you do that and if you spend a significant portion of your budget on that plus you've got an aging population so you're spending a tremendous amount of money on pensions pensioners vote there's lots of them they have the ability to make sure the government is really looking after them if you do that over time your ability to do productive things you talked about productivity is not going to be there and by the way the difference between the u.s and and britain and europe more broadly in my opinion is really cultural uh you you've moved to the u.s recently or you certainly spend a lot of time there there is a business mindset that exists in america that just isn't there here and the other thing is you know their uh attitude to what we call welfare what they call entitlements is different and there's a there's a good and bad side to that coin in america you really really have to work very hard to to to survive um because the welfare system isn't there to catch you when you fall nearly as much you don't get the same quality of health care if you don't have the money to pay for it you can fire and hire people much more easily as you know as an employer all of those things mean that the u.s economy can accelerate a lot faster but you know i always say america is a a great place to be rich hard place to be kind of middle class and a very difficult place to be poor europe is kind of the other way around and and so i think those are some of the differences in productivity as well i'll agree with constantine that america does have that can-do attitude and they also do have the attitude that failure is the first step on the ladder of success. Okay. There are is an expectation or acceptance that people can fail and then recreate. It's not a stigma in America where it's more of a stigma over in the United Kingdom and Europe. So I think that is part of it. It's also the scale of the American economy. England, I think, has suffered more from the Thatcherite twist, cutting back government spending, meaning people have less money in their pockets to spend, meaning there's less economic activity, meaning you've got to go into debt to be able to start a business. All these things end up slowing down the rate of economic growth. America has not made the same mistake that the European Union made with something like the Maastricht Treaty. There are elements of the American system which give you a higher rate of technological innovation and development than England gets. For sure. So Steve, just to pick up on some of those points then, are you saying that the UK don't have a spending problem? No, they don't. They have a spending problem. They have the problem. They're not spending enough. The government should be spending more. Should be spending more money. On what? On what? Education, welfare, infrastructure, dams for a start. You know how many dams, one of the reasons that we've got a potential crisis in the UK right now is the UK, after privatizing its water 40 years ago, has one less dam now than it had 40 years ago. So you want the government to spend more? The government should be providing the infrastructure, the foundation that enables economic activity to occur. That's the problem. That's what we're seeing happening in China. When you cut back on providing the infrastructure, you mean you've got to build your own roads to connect your factories together. Okay. So by not providing the long-term stuff, which the government should finance, you end up hobbling your own private sector rather than enabling it. But what you've done is you've packaged a bunch of things together, some of which in my opinion are accurate and some of which are really inaccurate. When you say infrastructure, welfare, da, da, da, da, da, infrastructure, like I'm in favor of infrastructure, I'm in favor of government borrowing money to invest in things that generate productivity. And I'm in favor of them spending money to create that stuff. Same thing, but the borrowing is not important. Irrelevant. The way you get that money from is actually irrelevant. The government spending money to invest in useful infrastructure, productive infrastructure. I mean, one of the other reasons the US is growing in a different way to us, the UK has the highest industrial electricity prices in the world. So if you're trying to do AI, you're not going to do it here. If you're trying to do industry, you're not going to do it here, right? So if you're trying to build a power plant, if the government had actually made it easier to build nuclear power plants, to do other energy things that drive down the cost of electricity, then you are putting yourself in a position to succeed in industry and to succeed in business. And the government spending money, whether it's borrowed or not, to build infrastructure, housing, roads, there is definitely a case to be made for that. Giving money to people not to work, which is what a lot of the welfare bill is, that is not productive. And so you've got to separate these two things out. Money for infrastructure, wonderful, great. Money for keeping people unproductive, very bad. And culturally, it creates a lot of problems as well, because you create a society of people who are effectively takers and not creators, and it's terrible. I don't think we're doing that. I mean, I've seen unemployment benefits used to be adequate. Like I'm talking from my Australian experience now. They're not anymore. So the welfare that's provided to people doesn't mean that they can survive and live with nothing. There should be a button just down below here. You're already subscribed. If it says subscriber, that means you're not yet. And if you're not subscribed, please could you do us a favour and hit that button? It helps the show more than you know. And according to the algorithm, you're someone that watches our show, but you haven't yet hit that button. Thank you so much. The other point was you said you think the government should be spending even more money. Yeah. The point around how we generate growth does link fundamentally to energy. We have, there's a big conversation happening at the moment with Andy Burnham. I think he spoke to Trump about this, North Sea. Yeah. And about the oil in the North Sea. Do you think we should be drilling there? Look, the energy conversation, this is where we're likely to have very strong disagreements, but I think it's important to get the groundwork in place before we have the conversation. We, I mean, Steve said that, you know, no one's taking climate change seriously. I would argue, and I think we, I think it's based in what we have seen. We've talked about climate change in such a way for such a long time now that you literally have people who are so terrified they're not having children. They're so terrified. They've got climate anxiety. We had the, you know, the phenomenon on Greta Thunberg going around, you know, giving speeches everywhere, being taken as a credible person. Let's look at the reality. Okay. Almost all of the CO2 emissions, not almost all, but the overwhelming bulk of the CO2 emissions of the future, the greenhouse gases of the future are going to be produced in two countries, India and China. That's just a fact. The world now uses more oil, more gas, and more oil is going to be produced in two countries, India and China. More gas and more coal than it ever has done, ever. And people will say, well, China is building dams and wind turbines and solar panel arrays, et cetera. It's true, but they're also building coal power stations every week. They're building every form of energy that they can because they know something we in the West have forgotten, which is GDP is energy transformed. Now, there I'd completely agree. Okay. Okay. That's a shock, but I do. Good. Fantastic. In other words, if you don't have energy, if you're not creating energy, you are going to be poor. Almost all wealth creation in the history of humanity has been about using more dense fuel. So you go from hay, which you put into horses and cows and other animals to coal, to wood, to coal, to oil, to gas, to nuclear, but you get denser, denser, denser. You're creating more energy and you convert that energy into wealth, into prosperity, into hospitals, into schools, into money, into everything, right? Right. So any society which creates a structure where energy is expensive and not abundant is going to get poorer. It's one of the main reasons we are stagnating in Europe in a way that America is not. Okay. Now, in terms of climate change, I don't want to get bogged down in how impactful this is, who's doing this, who's doing that. The hard reality is Britain can literally do absolutely nothing about climate change. Britain produces 1% of global carbon emissions. Right. And the narrative was, well, it doesn't really matter that we only produce 1% of global carbon emissions because Britain has moral leadership in the world. And so if we reduce our energy consumption and if we increase our energy prices and we slightly repackage and we use slightly more wind and slightly more solar, then other countries will follow suit. That was the argument. It's very clear now that that is not remotely happening. India and China, if you talk to people in India and China, they're like, we want to grow. We need our people to be prosperous. We need our people not to die. I mean, life expectancy in India at the time of partition in 1947 was 32 years old. That's how long people lived. Life expectancy at birth was 32 years old. It's now, I think, over 70 or maybe an 80 now at this point, right? And that's because they've been burning fossil fuels and they're going to keep burning fossil fuels and they're going to keep using nuclear and they're going to do everything else. Britain can't affect that. We can't do anything about it. And the planet will get warmer. So what we should be doing is investing in infrastructure that allows us to cope with that reality. In exactly the way the Dutch have done. So they build flood defenses and other ways of managing the fact that sea levels change. That's the only thing that we in Britain can do about that issue. And in the meantime, rather than suiciding our economy by creating less energy and therefore reducing our ability to grow our GDP, what we should be doing is creating a system where we produce abundant, cheap energy. And, you know, Nick Clegg, former deputy prime minister, there's a very instructive video of him 15 or 20 years ago being asked why we're not building nuclear power stations. Him saying, well, it's going to take 15, 20 years. Well, it's been 15, 20 years and we don't have any bloody nuclear power stations because of the short-sightedness of our political leaders on these issues. So should we be pumping out as much CO2 into the atmosphere as we can? Absolutely no, we shouldn't be. Should we have a sensible energy policy that is about making sure that we actually grow our economy and keep our people wealthy and also have the money to make the adjustments we're going to have to make to the change? And we can't control that. That's the real question. It's not about do you believe climate change or whatever. This is a silly conversation. The real conversation is what can we do about the inevitable reality of the climate changing? And you're saying we can't do anything to stop it, but you're also then saying we should just build defences to deal with the symptoms. We should adapt. And this is what human beings have done throughout the history of our civilization and of our species. There have been times when the planet has been way warmer than it were. Hippopotamuses swimming in the Thames. No, not 12,000 years, please. I'm pretty sure it is 12,000. No, 12,000 years ago is the beginning of coming out of the ice age. Would you just check me on that, please? No. 12,000 years ago, Britain was coming out of the last ice age. The climate was cold, tundra-like. The opposite. Let him finish. So because it was cold, but it says 120,000 years ago. Yeah. Okay. 120,000 years ago. What I'm saying is the climate has changed in all sorts of different ways. 2,000 years ago, the Romans group rapes on Hadrian's wall, right? And 200 years ago, it was really cold. The Thames would freeze every year, et cetera. This happens. People have to adapt to it. And we're going to have to do it. So Steve, the assertion there is that the UK can't do anything about climate change in terms of affecting on a global scale, but they can defend themselves against it by. No, you can't. You can't. You can't. You can't. You cannot defend yourself against what England faces if climate change continues. England will become a. This is the most, some of the most recent research on what's called the Atlantic moon the urinal overturning circulation. You're aware of the AMOC? That translates about 10 degrees Celsius of heat from the south, actually the middle of the Atlantic up to Europe. If it stops running, temperatures in Europe on average fall by 10 degrees. So I guess the central question here is that, is there something the UK can do to affect global climate change? Not on its own. Okay. Not on its own. Because when you look at China and India, they have increased their carbon emissions. China is actually having falling per capita emissions at the moment, even though they're building a power station, they're building so many nuclear, far cheaper than they're doing in the West, so many wind and solar, that they're actually reducing their carbon footprint right now. Per capita. And their capita is falling as well. So they're reducing their carbon emissions? They're reducing their carbon emissions. Are they? Okay. And that's been the last two years. It's only in the last two years this has started to happen. But China is now reducing- And what about India? India, absolutely going gangbusters in the opposite direction. Because it's far less developed, of course, than China. So they'll keep developing? They will keep on doing it until such time as they have their first wet bulb catastrophe. And when, say, 10 or 20 million people die from heat in one day, then I think India will start doing something very different. But there's a belief this is something we can adjust to. And the forces we're talking about are far beyond anything humans have any capacity to adjust towards. Now, the AMOC, there is a lot of work going on. There's a lot of work going on and I mentioned the Atlantic Meridional Overturning Circulation. I love the abbreviation. It's going to make this country go amok. Because the temperature range for London, if the AMOC fails, is estimated to be between minus 20 degrees Celsius and plus 35. Steve, can the UK do anything about it if our emissions are so small? We cannot do anything as a bunch of nations fighting each other. This whole attitude that we've got, this contest with that country, this country is better than that country, et cetera, et cetera. This is derming us to extinction. But is this the reality? I'm going to out Greta Thunberg in this conversation now because I know a lot more than you guys do about the climate science. Okay? I agree. What I'm really saying is if we talk about human incentives, do we have any control over what India decide to do? No, we don't. Do we have any control over what China decide to do? None whatsoever. So does the UK then need to, does it need to be a bit selfish? We need to realize how serious the situation we're in is. And what will we then do? We realize it's serious. Let's say we accept your point. Yeah. This is the reality. Okay. What do we do? We would have to drastically reduce energy consumption. Ah. Okay. Energy consumption is vital for GDP. Completely, 100% agree. And I know the statistics on this front. The link between gross world product, the equivalent of GDP for the planet, and energy is incredibly tight. They're one for one. Yeah. If energy goes up, so does gross world product. If GWP goes down, so does energy consumption. They're one for one. So Steve, when you say we need to reduce energy, do you mean the UK? I mean the species. I mean human species. Okay. So how does Andy Burnham do that? We are not set up to deal with this problem. Because we're broken into nation states. Okay. We can't make decisions that affect the entire planet. So we need world government to reduce world energy consumption. Is that right? We're going to be stuck with that. Yes. We're going to be stuck with it. But see, I'm glad we're having this conversation because at least this is the first time, and I mean this in a genuinely respectful way. It's the first time I've ever heard anyone be honest about this issue. Yeah. That's what you want. You want world government. No, I don't want it. You believe it's inevitable. I'm saying it's inevitable. It's inevitable. Because by ignoring this problem, we've got to the scale. You believe it's inevitable that we have a world government that reduces energy consumption. Reduces world energy consumption and therefore the prosperity of everyone living on the planet. And if we had taken the advice of the limits to growth 50 years ago, we would not be having this conversation. Good. We have delayed for half a century. Is there any solutions that you believe are actually possible? No. No. No. There we go. You've done a public service here because you have showed what it is that sits underneath all the conversation about climate. It's a best case scenario. People who know there's nothing we can do, but what we should do is flail about in the meantime and in order to not address this issue, impoverish, not just in this case, our citizens and our fellow people, but actually the entire world. That's what this is. And the entire challenge I have to this is I don't believe in suicide for token gestures towards not solving a problem you're claiming to solve. We are not going to solve this problem by creating a world government and reducing energy consumption that is never, ever in a billion years going to happen. No, what we're going to do instead is run into the crisis and fall apart as a civilization. What we're going to do instead, what we're going to do instead, look, there's a possibility you're correct about that, but the only choice we actually have to solve this problem is to create forms of energy that do not produce CO2, but produce GDP, clean energy. That's what we're going to have to do. By the way, it's what we've done throughout history. And we need to make that clean energy more favorable in terms of the economics to India and China. Did you need a world government to reduce usage of the horse and car and replace a, or the automobile? No, you didn't. You came up with a better technology and people adopted that technology voluntarily because it was advantageous. This is not going to be solved by making everybody poor. Well, for the reasons that Steve himself articulated, but it's also not going to be solved by making everyone poor because people will not do it. You say you need everybody to hold hands and sing Kumbaya and act together. No, what I'm saying is we need to have engineers in control and we're talking about it 50 years ago. Engineers in control. Engineers. So we should stop having elections. So compared to with politicians we get, yes, I'd rather get rid of elections and have engineers running everything. They do a damn side better job than a politicians have done. Well, and this is why I say this is a public service because this is what, this is the true face of the climate catastrophe narrative. We need a world government, we don't want elections and we want to make everybody poor. And you know why? And we've got it out in the air. Okay. Now I'm going to go back and say where it started. It started in 1972 when the limits to growth study was published and the limits to growth said. It said that if we, if we continue on the current trajectory, we're going to have an ecological catastrophe sometime in the 21st century, okay. They deliberately left the dates vague. They knew they couldn't predict the actual dates. So they said 1900 is the start of our work, 2100 is the end. In the middle of their projections, roughly speaking about the time we are now between 2030 and 2050, the system would start falling over because we'd be eliminating the capacity of the planet to support our species at the energy consumption levels that we have now. So they said we had to reduce dramatically pollution per unit of output, stabilize population at 4 billion people. They wanted to stabilize at 4 billion people in 1975, okay. We wouldn't be having this dilemma if we'd actually taken the advice of the engineers who wrote that report. It wasn't written by hippies. Most people think limits to growth are by a bunch of dope smoking hippies in Rome. It was written by engineers and MIT. Steve, one of the things that I am. I spend a lot of time doing on this podcast is trying to find reality through like wishful thinking. And, you know, I have a lot of conversations about AI, for example, and I see so many parallels with AI because we're saying that AI could be a big problem. But when you look at human incentives, the US are trying to beat China and China are trying to beat this person and they're trying to beat them. And even in the US you've got, you've got open AI trying to be anthropic. So when you look at incentives, you go, okay, I kind of see, can see how this is going to play out. I can see the possibility to it. And the example you gave there, what I'm hearing is reduce pollution, which would have meant getting China and India and the US and the UK and Europe to all cooperate, which is as has proven to be impossible without political systems. And the other thing you mentioned was stopping people having babies, stabilizing at 4 billion, which would have come with a lopsided economy, lots of other problems. I mean, we've seen it. It wasn't, it looks like it wasn't possible. Steve McLaughlin: And the fossil fuel lobbies and conventional economists undermine it. Steve McLaughlin: They undermine all that stuff. So the reason we're having this conversation now is you basically think we've got to adapt. It's like we're going up a hill, so we've got to, you know, have a lighter car or more power for the car, whatever else. I'm saying we're five inches from, from a brick wall. Okay. And we're not going to slow down in time to hit the wall. We're going to hit the wall. Brace yourselves. Okay. Brace for impact. That's the advice I'd give. Steve McLaughlin: Fine. When I asked you earlier, if we need world government, you said yes. If I asked you- Steve McLaughlin: It's not going to happen. I know it's not going to happen. The only way out of this is to do it collectively. With this obvious example, we're going to do it competitively and shoot each other in the foot in the process. If we'd realized that each nation had to reduce its energy consumption or get a higher efficiency out of its energy 50 years ago- Steve McLaughlin: Yeah. But who's the we? Steve McLaughlin: Look at the engineering. Who's the we that would have realized this? You would have needed a world government back then to do it. Steve McLaughlin: You would have needed politicians who understand what the engineers told them. Right. Steve McLaughlin: Instead, you had politicians who listened to the media and listened to the oil interests and trivialized these whole dangers. That's why now it's catastrophic. I truly believe we're on the edge of a catastrophic breakdown of human civilization. In that situation, if you wanted to stop it happening, you would need to have global coordination, authoritarian, et cetera, et cetera. If we'd done it 50 years ago, we wouldn't need any of this. Steve, how would you go to India and tell them that they can't use energy when they're. Some people in India- Steve McLaughlin: Yeah, I know. The women are dying in childbirth and their children are starving. Steve McLaughlin: Yeah. Yeah. I mean- Steve McLaughlin: And you go to India and go, "No, no, no. We can't grow." Steve McLaughlin: We have an ignorance about the biosphere on which we live. Okay? The understanding of the biosphere itself and the impact that our civilization has on the biosphere is trivial. And therefore, we have these discussions as if the biosphere will take care of itself. Steve McLaughlin: I think we all agree that climate change is both real and a huge existential problem. And the evidence for that is we can observe it. We can measure it. I mean, even now, we're going through one of the sort of record-breaking periods in global weather volatility. Yeah. Yeah. Steve McLaughlin: But sort of the Western United States and Western Europe are experiencing severe record-breaking weathers at the moment yeah we get so my next question logically becomes what can we do about it it's too late okay the extent to which we're unaware of the energy forces we've unleashed on the planet are huge and when when you find that people think all this stuff is going to happen and you know it's a couple of you know decades away or you know half a century away and somebody else's problem when is it going to happen i've got a feeling the next 10 years next 10 years what's going to happen the beginning of the breakdown of our capacity to maintain a civilized ocean on the planet i'm probably wrong in terms of timing i'm probably putting it too far in the future okay i might be wrong yeah it could be less i really really hope all three of us live long enough to be able to sit down i hope i'm wrong this is i'm desperately hoping i'm wrong steve can you define what you mean by climate breakdown specifically what does that look like for me as i walk out well let's say the one of the big ones again the atlantic meridional overturning circulation the amok the most recent estimates is that's going to stop functioning sometime between last year because hasn't it happened and 2095 when that happens the temperature on europe will fall roughly speaking by three degrees per decade for three decades so the temperature on europe average will fall by 10 degrees the extremes will become even more ridiculous so this is research from tim lenton exeter university professor of climate change the range of temperatures in london will be between minus 20 and plus 35 okay now what's the chance of london surviving that scale of temperature range you can you can't even cope with leaves on the train lines here that's one thing i found ridiculous that's right there's an australian arriving in london and find my train from from from waterloo to kingston is it slowed down because there are leaves on the rail leaves on the rail has that never happened before what are your engineers doing about that why don't you have trains that move the leaves this sort of unprepared nature we are completely unprepared for the scale of what we face look as someone who is russian minus 20 is a nice spring day for me but look we're being silly about it i i think if we ground this conversation in the realms of the possible uh and look at what we can do it seems to me that the only thing we can do is create forms of energy that do not produce emissions that we believe are contributing to the changing climate a world government's not going to happen the level of coordination is not going to happen the authoritarian uh and the world run by engineers is not going to happen these are not realistic things to be talking about let's talk about what we actually can do yeah what we can do is plow all the money we have wrongly plowed into trying to mitigate this issue into trying to create forms of energy that are actually going to work not only to solve this problem but actually to fuel prosperity to fuel technological innovation and to to create a better world as opposed to thinking that you know like we're all doomed and nothing is possible of all the things i thought would ever turn up on my desk a red light toothbrush was not one of them here we are this is made by our sponsor bond charge and you'll probably know of their red light face mask and their infrared sauna blanket because i use them religiously and i've spoken about them on this podcast before but their toothbrush is new to me i was someone of these a few weeks ago and ever since then i've been using it religiously because i love their products and this is the first toothbrush that combines both red light and near infrared light with sonic cleaning at the same time the same red light technology that's used for skin and inflammation is now built into a device you already know so well and i'm using at 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members called christiana she tried it once and came up to my desk and she goes this is the best product ever made and i think in part that's because she really cares about those cognitive benefits as i do as john jones does and as i think most of my listeners probably will so if you haven't tried these yet all you have to do is go to ketone.com steven and you'll also get 30 off your first subscription order you'll get exclusive ketone iq merch and of course cognitive benefits that might just change your life so let's let's take a look at this situation which is somewhat linked this is uh the straight of hormuz yep this is u.s oil reserves at the moment in rapid decline yep yep yep what is your perspective on what's going on in the middle east at the moment constantine why has this happened so one of the things i think is very important not to do is project our own ideas onto people who we've never met like president trump i assume none of us have met president trump no etc so i can only tell you what i know from speaking to people in his administration other people who have some access to the administration's thinking etc my understanding and it's a very frustrating thing to have to articulate and to believe but it is true is that the level of analysis we all have about the complicated machinations of how different departments in the u.s government you know work out the complexity it really isn't as complicated than that and what i think we all wish it was sometimes trump walked into into a trap i think he walked into a trap that it was a sugar high from venezuela yes there was a kind of feeling of perhaps invulnerability and a sort of belief that we can solve every problem and iran is different to venezuela iran has the ability to choke off the world's supply not just of oil but i think as you discussed with steve when you recently had him on of gas of helium natural gas of helium fertilizer and lots of other things and it hasn't quite fed through to the global economy in the way that people have talked about in a catastrophizing way but if this carries on it will do because our stocks you you've got this talking about oil but it's stocks of other things too are gonna start running out and the price of those things is gonna go up and so then the many predictions that people like steve have been making are likely to come true we had senator ted cruz on our show around the time this war was launched he's not only a huge supporter of president trump but a huge supporter of this conflict and he advocated for it and when i said to him look come the midterms this is not going to be good for you and for your party and his words his exact words quote him from memory so maybe they're not his exact words but the the the broad theme of what he said was uh if we're still in this conflict come the midterms we failed i suspect that that is almost certainly going to happen you've just shown me a picture of president trump's approval ratings they seem to verify what i'm saying and so i i think he's walked into a trap and uh you've had people on your show to articulate why this is going to happen the trap will continue to to bear uh fruit for the iranians you know there's this great saying in in the east in the west you have all the watches in the east we have all the time they don't have midterms in iran they can wait they can take the pain and the punishment that they're currently experiencing for as long as they really need to this is kind of like their battle of stalingrad they can take the pain they can throw men at the problem they can throw bodies at the problem as long as they need to because they know the us can't go the distance uh and because of that the incentive structure is for the iranians to hold on as long as possible because they know that the us will have to deal with this reality so i think it's been a catastrophic mistake and do you think iran are actually going to be stronger on the other side of this nobody knows exactly they're definitely stronger now than they were but look this all of this is very unpredictable i think we should be very careful about uh making predictions about the future of countries that we understand very little in the west from the outside it's very difficult for anyone outside of iran to understand what's going to happen in the future and i think that's a very important part of iran today to understand what's happening in iran the example i'd like to give is uh nicholas nicholas uh the romanian dictator he had a 92 approval rating the day before he was seized with his wife and summarily executed the predictability of how long a regime survives in these countries is difficult to judge from the outside currently iran has a chokehold on the global economy and they're leveraging it very powerfully you predicted a famine steve yeah i think it's still going to happen but the thing is it's again it's a question of what the stocks are like for example we know this story about the u.s strategic oil reserve we also know that china had a huge reserve and they've run that reserve down from about one and a half years of supply of oil for them to i don't know what amount but they're going back in the opposite direction now so we didn't need to know what the stocks of all these products were around the globe beforehand so when you make an estimate yes there's going to be a you know running out of oil well china reduced its oil consumption america's running its stock down at some point though with of course the flow is still blocked through the straight and there won't be the oil there won't be the fertilizer there won't be the sulfuric acid all these things will not be available and then we'll have a physical hit coming out of all that and i completely agree trump was sold a pup it's the old expression and we're paying the price is there any way out of this in your view steve i think america has to leave the middle east that's about the only long-term resolution america stops interfering in the middle east if if they were to leave now the issue that they face is they've now given iran they've sort of established a precedence where iran can use the straight of hormuz which is like a proxy For the global economy as a bargaining chip. And so if you're Iran, you now can proceed potentially with your nuclear program. And if they come back, you shut down the global economy via the Strait of Hormuz. Yeah. Or you sort of kneecap it. Which is why it was a catastrophically bad decision to provoke them in the first place. The thing that no one really talks about, and it's an issue close to my heart with the Ukrainian family and the conflict there is something that's very important to me, is one of the hopes I had for the Trump presidency was that he would find a way to bring that conflict to a close. This has only made things better for Russia. The fact that they've had to lift sanctions on Russian oil, for example, in order to compensate for the lack of supply. This is allowing Russia to continue this war and to fund its war. And so it's been a disaster. It's been a disastrous intervention and really, really unfortunate in the way that it's been done. Do you think this is going to completely tarnish his presidency more than any other issue? It depends on how it ends. The only way out of this that I can see at the moment, look, again, these things are very unpredictable. I think we really should be very honest about that. But the way that I see it at the moment is his only way out, really, I don't know about pulling out the Middle East, that seems a bit extreme. But the best way for him to get out of this. Is to find a way to sell Americans on the lie that it's been a success. That is the only way he's going to get out of this. If he can find a way to sell a terrible deal, which he's going to have to sign with Iran as a victory for America, which Trump is uniquely placed to do, let's be honest, right? His ability to sell things is pretty, pretty strong. Then he can leave with less egg on his face than otherwise. At which point, how the world judges him for a temporary interruption. Of oil and fertilizer and gas supplies, how history judges him is hard to say, not least because he's still got time in his term to either do good things or to do more things that don't work out well. But at the moment, this is a conflict whose only resolution, it seems to me, is for him to accept the reality that he made a mistake and to find a way to extricate himself from it without admitting it was a mistake. Steve mentioned that he predicts a famine is coming, a global famine. Yeah. Do you agree? Do you agree with that? Depends how long it runs. It depends how long. I mean, I have friends in Australia who are farmers. And when this first started, they were telling me they can't get hands on fertilizer, even at the quotas they already had. And again, context here is that a lot of fertilizer comes from via the Strait of Hormuz. Yeah. And goes to all over the world. But even if, even if, say you get your supply of fertilizer, not from the Middle East. Well, given that the supply of fertilizer is no longer coming from the Middle East, the people who used to get it from the Middle East now have to get it from somewhere else. And there's less of it. There's less of it to go around. Therefore, price goes up, quotas allocations go down. You can't plant the crops, et cetera, et cetera, et cetera, et cetera. Yeah. Like on the Australian front, I've got friends in the same boat. And they tell me that about half the usual wheat crop has been laid because of the cost of fertilizer. And Australia used to produce seven times as much food as it needs for its people. So it's going to produce three times as much food, three and a half. And that means, of course, less availability for food around the world. And this is going to be a global phenomenon. Where it hits is, again, it's very hard to say because you don't know what stocks exist. You don't know how dependent different agricultural systems are on the fertilizer that they bring in. But, yeah, it's a catastrophically bad decision. And the only way that Trump can get out of it is to lose and declare victory. That's what he'll do. There's midterm elections coming up, which could have a big impact. But there's also the 2028 elections coming up for the presidential position. A lot of people are now forecasting that the Democrats, the left side, politics or potentially even a socialist candidate is going to get into office. Do you think that would be a net good thing for the United States? Well, after Trump, anything is going to be better. OK, so, yes, I do. Because, again, I think America's pushed far too far in the independent self-reliance, don't let the state do anything. And you get an unbalanced economy out of that. Do you think the U.S. needs a democratic socialist candidate? Yeah, yeah. Why? Because they will promote the need for the public goods that the public sector provides and the private sector does not. We've got the classic illustration here with water supplies for the U.K. We privatized them 40 years ago. What's the consequence? You can't swim in any river in the United Kingdom anymore because they're polluted with feces. The beaches are impossible as well. We have one less dam than we had 40 years ago. Privatizing resources which take a long time to construct is a recipe for those resources not to be created in the very first instance. Whereas China, with obviously a socialist economy, the energy supplies you were mentioning earlier, they have provided the transportation, the education. It's extremely hard to get in. You can't buy your way in. The education is publicly funded. All these things show that you need a balance between the public and private sector. And America's gone too far in the private direction. And we now need to switch back in the opposite direction. So China's model would be better? Yeah, because, I mean, it provides the infrastructure that enables a private sector to thrive. If you don't have the energy, as you were saying earlier, then you can't even imagine building the private sector facilities. Or if you do, they've got to be used at the expense of some other activity. So we're seeing Americans protesting about rising energy prices because of data centers being established and rising problems with the water supply for the same reason. Steve would prefer a socialist government coming into the United States in the next election cycle. Democratic socialists. There's a big difference. Democratic socialism is the same. It's the same idea that has been tried repeatedly and failed repeatedly, which is communism. It's sort of the idea that if we elect communists instead of having them win in the revolution, that it'll all be better. It won't be. Their policies don't work. And by the way, the one thing— Soviet policies obviously did not work. Yeah. Russia failed. No doubt about that. Okay. China's succeeding. So what's the difference between the two? Why is the Chinese system being so successful and the Russian system so abjectly a failure? Well, in the 1930s, a lot of people thought that the rapid industrialization of the Soviet Union was a massive success. I think it's worth remembering that communist societies lie all the time about the real figures in their economy, and they create fake growth and fake numbers about all of these things. We know, for example, that almost certainly, according to the intelligence assessment of pretty much every Western intelligence service, the COVID virus came from a lab in China. It's something they lied about to the world and still haven't paid any price for. And the way they lie about that is the way they were. They lie about other things, including economic growth and all sorts of other things. In the short term, models can look appealing if you don't understand the full implications of what it is. But also, you've got to remember that the Chinese system is not just about the economy. It's also about what rights people have and don't have. The right to express your opinion freely, the right to criticize the government, the right— I mean, we talk about private enterprise in China. If you're a private business owner in China, there's no such thing, really, because the moment you are inconvenient to the government, you're going to— you're going to disappear and come back suddenly with a totally different new set of beliefs about what's right and wrong and who's right and who's wrong. So, I think we should be very, very, very careful about praising communist dictatorships. I have friends in China, both nationals and immigrants, who tell me that the level of discussion and argument in China is far, far greater than people think. You don't get left versus right conversations, okay? You've got a political system which— you're not going to change the Communist Party being in control and so on. But the level of debate over what policy should be, whether the government should balance its books, whether the government should run a deficit, whether the government should build infrastructure or not, there's enormous debate there. So, people do have— there's more conflict, but it's mediated. It's not conflict that leads to flipping from one party one year to an opposite attitude at the next election. And so on. I think so. Really? Maybe not as broad as this one. Probably more limited. I will agree with that, okay? It probably would be more limited. But I've been involved— you know, if you've spoken on the Chinese Global Television Network, I presume. I haven't. Okay. Well, that's— the conversations that I've had there are comparable to what I'm having here. And so, those conversations get broadcast in China. Well, you're clearly very in favor of China. It doesn't surprise me that they would have you on their TV channel. That's not the point I'm making. The point— The point I'm making is Xi Jinping, the current president of China, has purged dozens of people who are internal critics within his own party, people in the military, people in the political system who disappear one after another, and business leaders of all kinds. The reason I keep having to remember things, I've got Jack Ma, but others too. I've got young—I've got new dad brains. I haven't slept properly for about two years. That's fair enough. I understand that problem. But yeah, so if you're a business owner in China, it's not really your business. It's kind of like in Russia. There's no private enterprise. I think that's an exaggeration, okay, because the Russian situation, yes, there was only one motorbike-making company in the entire country. China apparently has about 130 car companies, okay. They have managed to combine the central planning that the Soviets had with the competition that the West has in one model. And a lot of it comes back—I'd love to know the extent to which they were influenced by a friend of mine called Yanis. Yanis Kornay, who was a Hungarian economist. He died about four years ago, who tried to understand why did the Soviet system fail and why did the American system grow. And he came down to saying that the Soviet system was constrained by supply. You couldn't get all the inputs you needed, and you had only one. There was no innovation taking place in the Soviet system. The Chinese system is rampant with private sector innovation, and companies are competing against each other rampantly in that system. Somehow, they've managed to combine the state providing the infrastructure and the foundation and letting private diversity occur both between different corporations and between different provinces in China. So, it is the same family of systems, but they've managed to overcome the drawback that the Soviet system had. Let's accept that at face value. What about the point I was making about political freedom, freedom of the individual, freedom of speech, political repression of opponents, imprisonment of people who don't agree, state-sanctioned murder, et cetera? What about that? Well, I'd look at America's prison system and say, you've got a different version of the same poison. Critics of the government. Well, a couple have been shot. The whole stuff with the ICE and the talking about the stuff that's happening with Trump now is awful. America has the world's largest prison populations. Would you prefer a Chinese system? To America? Yes. Even though you can't criticize the government? Yes, I've spent enough time in American cities and Chinese cities to know which ones I prefer, and I'm down to cities of a mere 4 million people, which is a small city on Chinese standards. And you're okay with- I didn't see the homelessness. I didn't see the violence. I didn't see the poverty levels that I see in American cities, in Chinese cities. That's totally true, but it's exactly the sort of thing that people would have said about aspects of the Soviet Union in the 1930s. The Soviet never pulled that off. I mean, the Soviet- What about the Moscow Metro? This is what every- The Moscow Metro is a great system. Every Western idiot like Tucker Carlson goes to Moscow and says- Raves about the underground. Oh, my God, the underground. Well, that was built by totalitarian dictators with slave labor. You can get a hell of a lot done. And that's not being done in China right now, which has the world's greatest metro systems and the world's greatest high-speed rail. So, again, your experience, and I'm not Russian. I wasn't born there. I respect your experience. It's very different to what I had growing up, and it's a horrific society, and it led to a whole range of horrors, as we know. The people instantly say what happened in the Soviet Union is happening in China, is misidentifying those two systems. Well, first of all, what happened in China, if you take the entire history of China- China under communism, is actually much worse than what happened in the Soviet Union. Well, look, I was in there in 81, 82. Forty-five million people killed. Yep. Greatly poor. And the culture was a disaster. Right. The ideological stuff in the Mao was horrific, and I saw, literally, I saw examples of that in Sichuan with children who clearly had quarkish or protein deficiency disease because of the flip and floppy of the Central Committee about grain versus legume crops. Horrific things like that. It's what's happened since Deng Xiaoping that has made the huge difference. Now, also, they did manage to get rid of the landlords, so you didn't have the inequality that occurred in the Chinese system beforehand. You did have an education system as distorted as it was. Everybody had education. They set the foundations. What's happened since Deng Xiaoping is what's been a remarkable transition. And politically, they still have the, you know, the party is still in control. You have the potential to get the sort of dynasty effect that we see in North Korea. Steve, according to the major global happiness surveys in the U.N. World Happiness Report, people in the United States report overall happier life satisfaction than people in China. Does that matter? I don't know. I don't know the survey. So, why don't you read out the results? Essentially, it's saying that the United States ranks as 23rd and China ranks as 65th. The report uses several mechanisms asking residents of each country to evaluate their current life on a scale of 0, which is the worst possible life, to 10, the best possible life. Yeah. And China ranks as 65th. In fact, 40 years ago, you would have found China down 150th. It's the rate of change in China over the last 40 years, which is breathtaking. This is something that I've made for you. I realize that the diversity of audience are strivers, whether it's in business or health. We all have big goals that we want to accomplish. And one of the things I've learned is that when you aim at the big, big, big goal, it can feel incredibly psychologically uncomfortable because it's kind of like being stood at the foot of Mount Everest and looking upwards. The way to accomplish your goals. Is by breaking them down into tiny, small steps. And we call this in our team, the 1%. And actually, this philosophy is highly responsible for much of our success here. So what we've done so that you at home can accomplish any big goal that you have is we've made these 1% diaries and we released these last year and they all sold out. So I asked my team over and over again to bring the diaries back, but also to introduce some new colors and to make some minor tweaks to the diary. So now we have a better range for you. So if you have a big goal in mind and you need a framework and a process and some motivation, then I highly recommend you get one of these diaries before they all sell out once again. And you can get yours at thediary.com. And if you want the link, the link is in the description below. So bringing this back to this sort of where we started a little bit on the United Kingdom, we've just appointed a new prime minister, Andy Burnham. Do you think he's going to be successful? What do you mean by successful? Do you think he's going to improve the UK? Do you think he's going to improve the UK's position to such extent that we changed our trajectory? No, he has absolutely smashed the PR side of things. There's no arguing with that whatsoever. But in terms of the tectonic stuff that we've been discussing today, he is not remotely going to address any of it. You know, we started the conversation with popular populism, immigration, illegal immigration, etc. He seems to be totally doubling down on what the Labour and before that the Conservative government were doing. On the economy, he is not going to restart the British economy, not least because it takes a long time and a mandate he doesn't have for the reasons that Steve alluded to. And the only question really is, is he going to call an early election, which would be the ballsy and probably smart thing to do, because I don't think he's ever going to be as popular as he is now. That is a question that remains because it probably would be the sense of the rational thing to do. But it is a big risk because elections are unpredictable. Election campaigns are unpredictable. Nobody knows what will happen. It will happen once it kicks off. But fundamentally, I don't believe he's going to be the transformative candidate that will change Britain for the better. Can anybody? That's a very good question. I think it's a very difficult job. I think it's theoretically possible. You need a whole different set of policies. What would those policies look like? We talked about it already. We want abundant, cheap energy. So would you drill in the North Sea? It's not something that I'm an I'm not an expert in the oil industry. So I don't know. I mean, one of the things I've never. Understood is why we don't build more nuclear power stations. Part of it is they're so expensive to build here because of the regulations. And the famous example is with like bad tunnels for train lines that cost more than the trains and all this kind of it's very difficult to build energy infrastructure in the UK. I would pursue every avenue of every kind and probably including drilling for oil and other things to create the cheap, abundant energy that we need to grow the economy. Number one, for the reasons that we talked about in the climate discussion. The other thing is you've got to the situation where you literally have. Tens and maybe even hundreds of thousands of young people now completely on the scrap heap. No chance of ever getting into employment because they have anxiety or they have depression. You know, when I remember being 20 going to the to to get a job as a student to the student employment office and sweating buckets because I was so anxious. It was an un like a weird experience I'd never been through. I'm sure you know, I know your background. You've had times when you were scrapping and scraping and you would have been depressed or anxious and all sorts of things. Those are obstacles in life. You have to get over. Those are not medical problems by and large. Some people have really serious depression. We shouldn't trivialize that. But by and large, you have to overcome anxiety. You have to overcome your feelings of discomfort about the reality you face and get into the workplace. So we have to do that as well. For the reasons that we talked about earlier, I think one of the most important policies to pursue is to make sure that there are no benefits of any kind for foreign nationals that will create a system where rather than doing terrible optics, like the ice, you know, rounding people up and trying to get them out of the country, people will just leave the people who shouldn't be here, who are not contributing will leave of their own volition. Is that really what will happen? Yeah. Or does crime not a consequence of desperation? Crime? I'm not talking about crime. I'm talking about if you are a foreign national and you live in social housing and you receive benefits, I don't understand why you're here. I understand taking care of British people. I understand taking care of British people who were born here or even who've become British citizens. You know, once you become a citizen of the country and you commit to it, at that point, you fall through the net, you get an injury, like we should look after you. But by and large, perhaps other than health care, which I think is something we as a compassionate country would want to provide to anybody who needs it. I don't think you should get access to social housing, unemployment benefit or any of the other things if you're not a citizen of this country. And I'm very pleased to see that more and more parties are adopting that policy because, well, what it will do is it will create a system where people who are not contributing will leave of their own accord and go to other places. Is that truly what happens? Because I'm imagining, you know, I'm imagining people start coming over on boats or you remove the current social housing infrastructure. Wouldn't that just result in a lot of homeless people that we then that creates another problem? No, because I'm not talking about illegal immigrants. Illegal immigrants apply for asylum and there's a different process for that. I'm talking about people who are here legally, who have settled. status here or who have a visa to be here or whatever. So they shouldn't get social housing. any benefit. So if you removed that today. They will leave. How? What do you mean how? They'll get on a plane and leave. Fly? If they can get on a boat to get here and pay people smugglers 3,000 euros, they can pay a hundred quid for easy jet to fly back to wherever they came from. It's not hard. It's exactly how I would leave if I had to go back to where I've come from. It's not difficult. People pretend like this is complicated. It's really not complicated. People will follow the incentive structure that's in front of them. If you can come to Britain and get benefits as a foreign national, you will come. If you can't, and you are the sort of person that wants benefits, you will leave. It's really simple. And the people we want here, if you want to talk about immigration, there's some really good things about immigration. You want immigrants who come here from other countries and create businesses. They will come, they will stay, and they will continue to do what they do. So you think Andy Burnham's ultimately going to not be successful? By the definition that you gave, which is like a transformative prime minister who changes the fate of the country? No. There's this term called wokeism that people talk about a lot. It's often associated with, I mean, you can probably explain it better than I can. I believe I can. Yes, I think you should explain it. Okay. Wokeism, certainly in the way that it's been implemented, is a hierarchy of oppression based on various demographic characteristics. In other words, it's a system that says an outsider looking in to this conversation between the three of us, can say, without knowing anything about any of us, which one of us is more oppressed than others, and which one of us is doing more of the oppression, and therefore to whom victim status should be accorded and to whom oppressor status should be accorded. So you don't win on this one, I'm afraid, Steve. You're a pale male and stale, and therefore you're the oppressor. I am an immigrant, so somewhat oppressed. You're black, so you are like, you know, way at the top of the chart of oppression. You've been. And, you know, I think if you compare all our three bank balances, you might find that's not quite true. But nonetheless, my point is, it's a very simplified and, frankly, racist way of looking at the world. And then it says, from that, it follows that we must pursue policies that seek to address these imbalances and inherent privilege between people who look like us. It's a way of judging people as groups, not as individuals, and pursuing social policy aimed at ensuring what's called social justice. Last time you said to me, we need to stop worrying. About how things make us feel rather than the consequences of our actions. Yeah. Wokeism is the idea that we should really, really focus on what makes us feel good and really ignore what works. I think what we should really be focusing on is what works. And I thought our climate discussion, I misspoke about the years, but actually where we came to, I thought was very constructive, which is like, what do we do about this? And when you have that conversation, you get to a constructive place, right? Which is, I think we all agreed the only way to do it is to create forms of energy. That are actually going to be clean, right? Innovation. Innovate. But that's what we came to. Yeah. But before that, we were all talking about how, what makes us feel good and bad and what we're scared of and et cetera. So I think that's part of it. Steve, we need to stop worrying about how things make us feel rather than the consequences of our actions. We actually need to understand the consequences of actions. Absolutely. That's vital. But do you think we focus too much on what makes us feel good? Yeah. And not enough about how does our system actually function? Right. What works? Okay. And that leads, was why I led to. My position on climate change as well as my position on economic policy. Last thing I want to talk to you both about is just getting any of your thoughts on all of this stuff that's going on with AI at the moment and the impact you think that's going to have. AI is a potentially transformative technology without a doubt. Okay. You think about the sort of future we might imagine for a wonderful human species is to the stage where we all have universal high income, to take a quote from Elon Musk. The machines do the work and we live in a world where the machines are doing it. Star Trek. Wow. That'd be a dream outcome. Okay. To get there, how are you going to give people income if they're not working anymore? Okay. The only way to do that is the government has to create the money. Now that is something which I don't think Musk has thought through. If people who don't own capital, and that's the vast majority of the population, therefore don't have an income, they can't buy the goods being produced by the robots in the first place. So you need a mechanism that enables people to pay for the basic goods. And services to stay alive. And then if you want to become wealthy, you've got to become an entrepreneur as well. Okay. So you could tax the AI companies instead of printing money? No. Taxation takes money out of the economy. Okay. It doesn't pay for services. It takes money out. It's excessive money creation. If the government simply spent and didn't tax, then the money supply would be growing at 20 and 30% per annum, and you would have hyperinflation without a doubt. Okay. That level of money creation. So the taxation is there to take excessive money creation out of the process. Could you not tax? So let's take one of the big AI companies. Let's call them Company A. Tax Company A, 50% of their, I don't know, their profits. Give it out as a UBI or something. I don't know. You'd need a system like that because if AI works, then all the manual labor, all the clerical, boring clerical jobs will disappear. Okay. And if they disappear and people don't have incomes, then we end up in the hunger games. And that's the fear that I have. If we just go for a totally private sector approach to AI, then we're going to have a system like that. And if we just go for a then we end up as either the hunger games or the government provides an income for people to enable them to have a basic standard of living. And if they want to go above that, they've got to become entrepreneurs. How are you feeling about AI, Constantine? Well, it's a mix of things. This is why, if you remember last time we spoke, we talked about the fact that I think my anti-communist credentials are pretty well established, but I did say that I thought that if we get to the position where AI is doing all the work, communism is an inevitable ability, i.e. from each according to his ability, which will be zero, to each according to his needs, which will be whatever our needs are, right? So once we get, if and when we get to that point, that seems kind of inevitable. The mechanism by which we achieve that, whether it is taxation or whatever, I struggle to understand the economic concept that Steve has been presenting, but we probably don't have time to get into that. Nonetheless, a form of redistribution will be inevitable because as we spoke about last time, if six people in the world own all the revenue generating assets in the world, they're either going to have to share it or they're going to find their heads on spikes. That's a fact. Unless they can have really powerful robots to stop the rest of us from climbing over their big walls, even then the heads are going to be on spikes. So I would not recommend that approach to the big tech AI oligarchs. But I think we're talking about, I was going to use the term long-term, no one knows what short, medium and long-term is in AI because nobody knows how quickly we're likely to get to that point where we're talking about, which is kind of artificial generalized intelligence, i.e. a machine that can think like humans and probably faster and better. And robotics. And then of course, it will create robots that can do physical things faster and better than humans. But we are not there at the moment, I think it's fair to say. Do you not think this is like the most important or consequential issue of our time? I do. Because it does permeate. Even subjects like immigration, and we talked about socialism and capitalism, all of these things change in such a scenario. Yes, they do. Yes, they do. And we talk about economic stagnation. I mean, it's a relevant conversation. There's private debt, a relevant conversation in that scenario. But I suspect we're not going to get there overnight. It will take some time. In the interim, what I say to the guys that work for me is, you will not be replaced by AI. You will be replaced by someone who uses AI better than you do. In the interim. In the interim. If you are a young person making your way in the world, these are tools. And you want to be using these tools as efficiently as possible, if you want to succeed in the current environment. And I think that situation will carry on for some time. I think that to me, the biggest risk is actually not the economics of it. I think economics will probably be painful, but actually ultimately potentially beneficial once we put that, if we put the right heads on spikes, you know, in the extreme scenario, I'm being hypothetical. And metaphoric here, of course, or maybe not, we'll find out. But I think the biggest threat to humanity, if you talk about AI is actually the fact that you're creating something that's smarter than you. You are creating a superior species. And if you become an inferior species, you only need to look around in the world at the world in which we live to understand what that means for you. Best case scenario, you become a pet. Worst case scenario, you become a cow. I've had so many conversations on the show about artificial intelligence. I've really tried to like reason my way to a different conclusion. And I can't. That's why I keep having these bloody conversations because I'm hoping that someone will say something about this idea that a more intelligent species, especially in a world where it has legs and can move through physical space, which is what Optimus is accelerating towards, won't be superior to me as it relates to like the pyramid of. The hierarchy. Yeah, the hierarchy. The hierarchy of power. It will have more power than you and therefore it will make decisions and not you. And therefore it will make decisions that are in its own interest and not yours. That's a fact. But okay, so one argument might be we'll control it and design it in such a way where it can't get there. Really? Can squirrels control human beings? But maybe we can, we program it so it never gets to the point where it wants to tell on us. Counter argument is cats, right? Cats absolutely control human beings, right? The argument I've heard actually from one of the great godfathers of i is we should be thinking about mothers and their babies and the argument was that we're programmed to care for them even though they're less intelligent but this is the difference though is there's a genetic incentive my child is actually much the economists will understand what i'm talking about my child has a much more much higher future value to me than me it's why i will jump in front of a bullet to stop my children from being killed because their genetic material will remain in the world much longer no it's because you have empathy no it's not it's not at all it's because i mean richard dawkins wrote about in the selfish gene and that's a very bad book uh he he wrote some very other bad books uh and i like richard but that one is not one of them well the desire to uh replicate your genes into the future in my opinion steve clearly has his own is what drives parent behavior ultimately could you program the same maternal instinct into a language model i don't think you can because as we discussed it will be a superior intelligence and you can always rationalize its way out of that because it's not a biological function right projecting my genes into the future is not going to be its agenda it's going to have its own because it's a different species this was the argument that uh one of the godfathers of ai made made actually after coming on my show so he came on my show yeah um jeffrey hinton yeah i've seen that episode i think yeah it was a very good episode and he came on and he made the warnings that make a lot of sense to most of us but then subsequently about a year later his he came back to the world with a hypothesis that the only way to do it was to replicate a mother and their child's relationship this sort of deep maternal instinct where the ai is born believing that we are to be protected protected well you know in the same way oh that's interesting isn't it yeah it's really about love to to like yeah to have that maternal instinct not to want to destroy us and that's why i said empathy beforehand perhaps not to let us destroy ourselves right potentially so let's make sure that we don't go to war and let's make sure that we don't do this and let's i mean climate is such a big concern let's make sure that we reduce the world's gdp or energy consumption or protection it sounds good but it's it's a it's a it's ultimately about control over your actions which will will take away human free will i believe i'm still skeptical about elements actually being intelligence it's indistinguishable though this is the thing like yeah i mean the one time that i when i saw it but i thought okay this is potentially going to create a different form of intelligence to us is when they attempted to shut an ai down and it replicated itself somewhere else on the internet to be able to avoid being you know i think the way to the way or blackmail the guy shutting down this current version of it yeah by leaking the fact that he's having an affair with on with the secretary all of this stuff so that's that's the beginning that's the worries me so you know it's a bit late which if we're trying to do it now we're shutting the door after the horse is bolted in that you're talking about climate change or ai now i'm talking about both humans are good at doing both operating systems computers were the same that's why i have all these bloody security hassles with computers in the very first instance so we tend we we unleash these things and find out the consequences afterwards yeah i think and the incentive structure this sort of global economic race for the most advanced frontier intelligence it's kind of you know this is what i don't know who's going to stop it's kind of what we're saying about climate change no one's going to stop i think what might cost it stop it as a sheer cost of it and whether we actually have the physical resources to be able to implement that sort of future we're talking about because if you look at the current profitability of these companies they're losing money hand over fist i think that's one argument but the other would be that it's such an important military asset yeah that you if you don't have the missiles that are smarter you know all the satellites whatever that are smarter the torpedoes whatever then you are there's a national security risk and also how long was facebook and amazon not profitable i think there's you know there's one survivor out of each of those companies they're doing very well thanks very much but that's my point yeah so with the ai but the ai who's going to survive and looking at the odds i think it's going to be a chinese company that survives not the american given the sheer cost of those data so i think we've established you're a fan of china and this yes i am i'm ashamed i'm not making i'm not even making fun of me i'm just saying yeah with you all roads i mean looking at the kimmy system that just came out recently the fact that it's an the ironic thing is the communists are talking about open source and the americans are talking about closed and secretive it's rather ridiculous in some ways okay but it doesn't really detract from the broader point i think we're discussing yeah which is some ai company you talk about profitability one of them at least will emerge that is profitable that has the potential to create agi and at that point no one can predict but logically it is very difficult to see how an intelligence that is superior to us at the very least will not take away our free will for our own good or at least there won't be one accident that is catastrophic that could theoretically also involve things like nuclear weapons yeah and this is where i think the spiritual dimension of this conversation inevitably comes in which is ultimately none of us can control the things that we can't control and so the question is how do you live your life now knowing all these things and this is why it's always interesting to me looking at people who make certain predictions about the future i'm and then how they actually live a life you know people who catastrophize about the climate but buy a big house on the seafront etc you go you're clearly there's one thing you're saying and then there's another thing you're doing and that's telling me something about what you actually truly believe deep down and it's the same with ais if ai is going to kill us all the best and most important thing to do is to enjoy your life now to enjoy time with your family your kids to do things that are meaningful to do things that you think are important that's really that i mean are you going to stop ai steven are you you're powerful and successful and influential you're not going to stop it i don't think steve is i don't think i am what we can do in the meantime uh is live in a way that uh is beneficial to us our families the people around us our community our country uh that's all that's left i would think that we can have an impact though i think even you watching eric schmidt be booed at that university commencement speech he did by 7 000 students was a consequence of what a lot of us do i mean all of us do where we put information out into the world and we have the public conversation and once upon a time maybe we wouldn't have been able to do that because there's there was gatekeepers and media but now the public is i think and then you think about the 2028 election cycle what are the issues that are really going to be on the ballot i think ai is going to be a massive one i think you're optimistic about that i think most people don't get this conversation you don't think it's going to be a big issue not as big as you think it is i think the reason i say this is we all think and talk about this a lot one of the reasons is we've all i imagine been to san francisco and seen and talked to people etc. the overwhelming majority of people don't have that experience and most people's biggest exposure to ai is they tried an early model two years ago it was totally inaccurate and they went oh this is a bit shit and we've done with their lives it's kind of where most people are at this point but you think in the next two years there'll be unemployment levels especially the entry level stage of employment and then you're going to see on the other side the anthropic hits a 10 trillion dollar valuation yeah and that people will make that connection they'll say i'm unemployed because trump is bad or they'll say i'm unemployed because burnham is bad that's how people think unfortunately and by the way in terms of you know impact etc i've talked to a few people who are not not the very people at the top but from what i hear they're kind of similar there's a messianic cult in in in in silicon valley yeah of people who believe that they're on the frontiers of being god and most of them are young men who are very very seduced by the idea of being god as young men have always been and when i see them i i see them as it's not that they're addicts exactly but there is there's a gold rush happening except it's not gold it's it's power it's destiny it's the ultimate technological breakthrough it it's your name in history these are things that are way more powerful than gold and what i see happening in silicon valley is a bunch of young men who are absolutely determined to get there as quickly as possible and there is no way in hell they're going to stop i know i think you're right i mean that's also what i've had in sort of some private conversations where you know some of my friends who know these people have told me these kinds of things and they have very good arguments by the way and we should give credit to those arguments they will say and i can i can present to you that argument look i with my frontier model i'm going to solve cancer i with my frontier model i'm going to solve inequality i with my frontier model will make sure that human beings never fight another war again i with my frontier model will make sure that no child ever dies in infancy ever again how can you be against this how can you say we must go slower how can you say we must be careful why should i be careful when i'm saving lives billions of lives humanity i am saving humanity from nuclear disaster i am saving humanity from climate change which will destroy this planet if we just go harder at this problem five years from now we can set up life on a different planet and not worry about climate change but also china are coming china china are coming oh china well all the better the competition will make us all get there faster isn't that wonderful steven so if you truly believe that this is both an existential threat yeah and you believe that right now on the course of travel run it's inevitable yeah shouldn't you be doing something about it as well i can't do anything about it you can't do anything about it no who can do something no one not trump no what's trump gonna do so no one can do anything about it no it's going to happen one way or another and we don't know what that's going to be like but there is no solution to to that issue. So that's why I talked about the spiritual. Nobody knows how AI is going to work out, but I think it's worth operating as if it will. And what that means is, this is why I said the spiritual, you come back to what does it mean to live a meaningful life for as long as you do? And by the way, that's true even without AI, you're going to die and you're going to die very, very soon, all of us. And so the question is, how do you spend the days between today and that day in a way that when you look back, you feel like you did the right thing? And I don't remotely do that every day. I lose my temper, I make mistakes, I say things I shouldn't, all that shit. But ultimately, the only choice any human being on the planet now has is, how do you live the time that you have between today and the day you die? And that may be because AI puts you in a chokehold, robotic chokehold three years from now, or it could be 40 years from now, or it could be 200 years from now because AI have dissolved all your health problems. But ultimately, the question and the answer don't change. What do you do with your life that you think is meaningful and important? Earlier on, you had more optimism for humanity. As it related to the climate change conversation, you weren't willing to concede that there's nothing we can do. Because there's a solution. When Steve said we're five seconds from the brick wall, you said, no, listen. Well, I don't think that's true, number one. But I also think that there is an actual solution that's available, that's clear. Now, I'm not saying the technology currently exists that allows us to build. I'm not saying that there's a solution that's available, that's clear. I'm not saying there's some kind of power station that's clean. We don't have that yet, but I believe we can discover that. And if you look at human history, I think that's undeniable. AI is completely unprecedented and a category different to what we're talking about. So the AI issue is a different issue. It's not the same. And I am not pessimistic. I am just accepting of the truth of this issue, which is nobody can stop it. Nobody can control it. And ultimately, the only thing you control is what do you do when you leave the studio? Okay. Well, then we shall conclude there. Thank you so much. Thank you. Thank you for being here. Thank you for writing all these wonderful books, Steve. Got all of them here. I think there's another one on the way, isn't there? And then I've got Konstantin's book here. You've got a nice red one. I like it. What? This one? Yeah. Yeah. I'm surprised it's not about China, mate. Sorry. I keep making all these jokes. I appreciate your perspective. It's been really eye-opening. And I think, especially on the subject of climate change, it's been really eye-opening. And I think, that was a really productive piece of red. Well, the current book I'm working on, which I hope to finish by the end of this month, is called How Economists Will Destroy Capitalism. And what it makes the argument for is that economists have completely and utterly misunderstood what climate change actually means. And therefore, they've given us predictions about the damage it'll do to our economy, which are trivial. And therefore, we're doing trivial things to address it. Fantastic. I hope people read it. And I would just say, I think it's very important people in public eye, when they say something that's not accurate, hold their hand up. So in the climate conversation, I obviously took a zero away from the figure. It's my mistake. I'm glad for the correction. I'll definitely be more careful when I talk about it. I think, you know, the way the rest of the conversation went, I think we understood the points we were trying to make. But I'm grateful for that. And I appreciate the opportunity to correct the record as well. So thanks for doing that. Well, people should go listen to your show as well, Trigonometry. I'll link that below. Fantastic show. Thank you guys so much for watching. I'll see you guys in the next one. Bye.