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The False Gods of Optimism and Pessimism
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Speaker 2
the 14th, 2024. We are talking tech today with my old friend, the publisher of That Was The Week newsletter, Keith Teer. A picture this week is worth a thousand words. Keith, originally, this is a show or his editorial this week is about agency and technology and how we need to change the future. The first picture he used, and I apologize for people who were just listening, they won't see the picture, is of a self-driving car, three people happily ensconced in a self-driving car. The second one, is a little bit more focused on human agency. And his editorial this week is about what he calls the false gods of optimism and pessimism. Keith, why did you discard the image of the self-driving car? Was there not enough agency there?
That could be true. My thought process was a little bit different. The editorial really speaking to the problems with both optimism and pessimism. The first graphic only focused on optimism not being enough. And I wanted to have a graphic that showed how neither optimism nor pessimism are the right way to...
Well, it's all about, as you know, in the editorial, anyone can be an optimist or a pessimist, but to borrow the language of your old friend Karl Marx, you've got to go out in the world and do something, either as a pessimist or an optimist.
Well, that's the interesting thing, which I've never really thought about before. Peter Thiel, I put a video from Peter Thiel in the editorial. It's very short, like two minutes. But he made me think about something I hadn't previously thought about.
And this was the Thiel appearance at the All In Summit.
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AndthiswastheThielappearanceattheAllInSummit.
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Yeah, which... It was an amazing event. Did you go? I didn't, but I watched a few of the YouTube videos they posted, um, which were, we can talk about that in a minute, but back to Peter Thiel, he was asked if he's an optimist and he kind of hesitated in the way that autistic people sometimes do, and then gave a very considerate answer that he doesn't really like answering the question because he doesn't believe either optimism or pessimism. really address how to change the future to what you want it to be. And I've always presented myself as an optimist. I thought, wow, he's so right. Optimism is an observation or an opinion, but it's like being a spectator at a football game. I think Manchester United will win, but only by being on the field and scoring a goal can you actually affect the outcome. So it's not a new idea at all, but I'm just being honest that it took the way I think about myself, which kind of is active, but I'd never intellectually decided that optimism needed to be attacked just as much as pessimism, if that's all a person is expressing. And then when you think about what you just said, pessimism, once you become activist, in order to address your pessimism, to try to make the future you fear not happen, actually you have to turn into an optimist, don't you? At least of the will. Well, not necessarily.
You're trying to avert a future. I mean, one of the links you have on this week's newsletter is the keynote interview I did this week with Gary Marcus. I know you've jousted with Marcus on AI. He has a new book out. It's called Taming Silicon Valley, How We Can Ensure That AI Works For Us. The book is a call to arms for everyone to fight, to tame Silicon Valley. So there's agency there. It's just not the agency that you necessarily would agree with.
I mean, you may not like what Marcus is arguing. You may not agree with it, but he's saying that people need to organize. They need to convince government to regulate. They need to fight and create new platforms, new ways of doing technology. So it's I mean, you may not like it, but it's it's not optimistic.
I like him and I'm generally not against anyone saying standing up Silicon Valley, intellectually he's fine with that, as long as it's rational. But I don't hear from him any actual practical things that a person can do. Well, you haven't read the book, have you? I've read Gary for many a moon.
But I think the book, in all fairness to him, is an attempt to really – I mean, the subtitle of the book is How We Can Ensure That AI Works for Us. I mean, I don't want to turn this into a conversation about Marcus or AI, but I'm not sure I agree with you that agency is by definition optimistic. That's what you're saying, right?
That doesn't make you an optimist. I mean, if you're thinking of the, let's think about Marcus and AI, he wants us humans to organize so that Silicon Valley doesn't become too powerful. So in a sense, I guess he's optimistic that that can be done, but that doesn't make him an optimist.
Um, Look, I think he's a complicated character and to some extent do have to engage with his ideas to answer that question. He represents a trend in AI that is different from large language models. And he's consistently been wanting to point out what large language models cannot do. By the way, I think he's mainly right when he does that. But he ignores altogether what large language models can do. And what they can do is dramatic in terms of its impact on human experience.
But is he a pessimist? I don't think he's a pessimist, actually. He's a pessimist about large language models, but he's not pessimistic about AI. He actually thinks AI will eventually happen.
Yeah, and he and I would. of course, strongly encourage everyone to watch the interview. He is a smart guy and he knows his stuff as well as anyone. But coming back to your point in the editorial, you say, and I'm quoting you from the first sentence, the key takeaway, this is from the Teal appearance at All In, is that pessimism and optimism are passive, which I agree. I mean, they can be and sometimes they're not. But I still don't agree with the idea that active pessimism, shall we say, which I think it would be fair to say that Gary Marcus is, in some ways, when it comes to AI, an active pessimist, is by definition optimistic. I just don't buy that. I mean, it's one of your semantic games.
Well, I think the word that might, you might be right, by the way, maybe my use of words is a problem here, but I think the word that comes to my mind as the kind of break the tie word is the word build. I think if you build something, and that can be social structures, technologies, campaigns, but if you build something where the purpose of the building it is to create a future that you prefer, then I do think it's pretty hard for you not to believe that the outcome would be good. And if you believe the outcome would be good, you're not really pessimistic anymore. Are you optimistic? Open question, but you're definitely not a pessimist.
I mean, again, this is semantic. You're optimistic that your actions can change the world, but it doesn't make you an optimist. It just means that you have faith in your ability to change the world. But you might want to you might want to revert back to the pre-digital age. It doesn't make you an optimist. It just means that you have faith that you can change the world.
Right, but I think the point of your editorial this week is that... And then we have an image of Peter Thiel on a couch at All In. We've all got to get off the couch. If you're a pessimist, try and change the world to what you want. If you're an optimist, you need to pursue your vision, your dream. It's not enough just to be a pessimist or an optimist. Is that fair?
That's fair, and that theme didn't just come out of Peter Thiel. Peter Thiel was a fortuitous catalyst for the editorial, but actually the entire newsletter is made up of extremely pessimistic views about Europe in particular. and extremely optimistic views about AI and especially AI, but also space and self-driving cars and...
Yeah, it's a good news this week. A lot of interesting stuff. Let's deal with the pessimistic stuff first. You and I are both going to Europe in a few days to fix Europe. We may even do a live show from there. One of the pieces you link with is one about Draghi says that the EU is itself at risk without more funds, more investment. Is that the problem, the former ECB chief? Is that the problem with Europe, not enough money, or is it a lack of agency? People are not getting off the couch, so to speak.
Well, they're probably correlated. It's probably one of those vicious circles where both of those are true. Just to put it in context, the GDP per capita here in the U.S. is $80,000 a year. In Europe, it's $35,000.
But just by a smidge. And of course, within the EU, there's going to be a hockey stick curve because the German... The Danish and the Swedish, but that's another issue. Now, the dollars spent on venture capital from Europe are $31 per head. In the US, it's $200 per head. In the UK, even, it's $100 per head. So the EU is not really pulling its weight on funding innovation. Thus, it's becoming... aged at a more rapid race. The distance between Europe and the US is widening, not even staying the same. And Draghi, and we got to give him a lot of credit here because he's the former president of the European Central Bank. Draghi, and before that, by the way, ran the Italian banking system. Draghi was given the job of analyzing the faults in the EU from the point of view of growth and innovation. And his 400-page report pulls absolutely zero punches. It's very honest. And I think the European Commission was pretty shocked that it was so honest. And his solution, moving from pessimism to action, his solution is to spend 5% of Europe's GDP on investing in innovation and growth, which, by the way, You know dwarfs anything currently being spent they're spending 24 billion a year to this year on on venture investments He wants it to be 800 billion spent on innovation and growth so You know, that's an annualized number. I don't even know practically how they would gear up Imagine how does it's
interesting that I don't want to turn this into another Trump Harris conversation but certainly you're suggesting that America is in a better condition. I mean, speaking of pessimism and optimism, it's Harris who's the optimist, Trump who's the pessimist, that things are still working when it comes to tech and investment and innovation in the US.
Well, there's a good article in this week that speaks to that from the information that says that venture capitalists are finding strange ways to return cash. So the US is not without its problems. We could talk at length about what those problems are. But it's in a way better shape at the macro level than either Europe or the UK or China for that matter.
So it's worth reminding ourselves of that. And then what about the systemic elements? Last week, I had very distinguished, I used to be the IMF economist, Branko Milanovic. I interviewed him in New York. You have a a link from, I think, his substack on whether the international economic system can coexist in a world of nationalisms. I know you're not a big fan of the nation state keys. What does Milanovic suggest? Does he argue that if we're going to continue to innovate and become wealthier, more prosperous, we need to get beyond the nation state?
He doesn't. He doesn't extrapolate from his thesis to that level, but implied within it, you would imagine some kind of global solution is required. What he talks about is the international monetary system created after World War II and Bretton Woods and all of the World Bank and the International Monetary Fund and all of the institutions post-World War II were predicated on a global consensus that free trade was best and that money flows between nations had to be friction free. And that, you know, he doesn't really understand that that was a function of World War II. In other words, the destruction of value in World War II through bombing led to a boom starting roughly in the 1950s that lasted about 15 years.
and that the monetary system created on top of that boom was laissez-faire and equal in many ways. But what he does is he charts the decline of that into a series of competing nations where even the strong nations are using trade wars to bash each other and money flow controls to bash each other. And in that context makes the point that the IMF and the World Bank, when they go to a third world country and say, you've got to be more disciplined, you've got to have free trade, falls on deaf ears because... You know, mummy and daddy, America and the UK aren't even following those rules anymore. So he's really talking about the destruction of the post-Second World War consensus, which is a major, major thing, and it's true.
Yeah, and he's certainly not the first or the last person to address that. You also have an interesting piece on, and we've talked about this in the last couple of episodes, Musk telegramming the European assault on Iran. online speech, it's obviously the French decision to arrest Durov, the CEO of Telegram and Musk's endless conflict with the EU. How does this fit in with Milanovic's thesis? Is this part of the birth pains of a new order, a 21st century order that isn't Bretton Woods, isn't the international system, but it isn't like the 20th century either?
Yeah. It's interesting. I sometimes wonder whether Europe's hostility to social media is a disguised form of anti-Americanism or whether it's actually about the tech and the media.
I do think he would argue that nationalisms are at play here. And when they are, anything global or foreign are equal targets, right? As soon as the global and the foreign become targets, you know that you're in the world he describes. And tech, I think, is perceived as foreign.
Just before you move on, Andrew, just before you move on, I do think there is a correlation between the decline economically, the decline of parts of the world and their hostility to the rest of the world. I do think that's true. And you could argue that that reaches a tipping point. If you look at the history of Japan or Korea, that was true until it wasn't. As soon as after World War II, when there was no choice anymore, embracing the world economy actually helped those countries.
I wonder also, coming back to Thiel, you talked about Gary Marcus being a complicated fellow. Thiel is the the most complicated man around, smart but very divisive and distasteful in some ways. He initially backed Trump, now has backed off from backing Trump. Do you think that, and he's not comfortable with this term optimism, but do you think his belief in agency may have influenced his ambivalence now towards Trump?
you know teal is the supreme agency person right he's the guy that argued that students shouldn't go to college but should build startups and helped fund them to do that as well young you know 18 year olds well his his life like we're going to
come to musk as we always do later i mean these are textbook lives of agency teal came and came with his family to the u.s he's better or worse. I mean, he's created a remarkable life. The other side of the coin, Keith, of this new world order, we're not quite sure what to define it as, is the underworld, the dark web. You have an interesting piece that I suggested you put in on the cryptocurrency tether enabling a parallel economy that operates beyond the reach of U.S. law enforcement. I know you've always been a bit skeptical of these sorts of scare pieces, but do you think that that is the dark side of an international networked crypto order? There is always going to be an underworld driven, powered by companies' products like Tether?
I think you've got to see more than one thing in Tether. I'd say that financial underworlds exist both within the national structures and above them. And so the dark side of humanity is pretty pervasive everywhere, no matter how you divide humanity up to analyze it. I think Tether has its fair share of that. So you would acknowledge that some of this piece is accurate? Yeah, but I think it would be wrong to characterize Tether as equal to the dark web of the underworld any more than it would be right to.
Well, I think that this article is suggesting that.
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Well,Ithinkthatthisarticleissuggestingthat.
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No, I agree.
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No,Iagree.
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That it enables a parallel economy. And you and I have disagreed on Telegram. I think most people would disagree. The telegram also helps to enable this parallel economy.
Yeah, but in the same way that the United States' existence helped to create the Italian mafia in the US. I mean, you can't really separate where people hang out and the tools they use from what they choose to do with the tools and the places. So it's always wrong to blame the superstructure for part of its ecosystem being dark. So what is Tether really doing? And you can see it in this Wall Street Journal article. It's facilitating $190 billion of daily global transfers that do not pay the banking system the tithe that the banking system normally expects when money flows. So there's a huge
Yeah, and this is the reality. People like Milanovic, he's writing a new book. He told me when I saw him in New York. They're all trying to define this post-neoliberal age. We know we don't live in the neoliberal age anymore. we're all trying to figure out what exactly it is. We're not going back to Bretton Woods. So this is companies and cryptocurrencies like Tether are part of this. There are some pieces of good news coming back. I noted that you backed off the image of the self-driving car, but there's some Good self-driving car news this week. Waymo and Uber are expanding their robo taxi partnership to Austin and Atlanta. It's already extensive in San Francisco. My sense is this is and coming from me, this is probably more significant. This is a big deal. And it's major progress when you have these self-driving cars. dominating transportation, certainly in every American city, things will dramatically change. It will reduce accidents. It's good for the environment. It's good for us. We'll have more time to be agents in the rest of our lives. Is that fair? Do you think, Keith, there's an inevitability now that companies like Waymo are going to become massively embedded in the American transportation infrastructure system.
It seems that way, doesn't it? I mean, they are getting permits in lots and lots of cities. Now, what this news story is about is Uber's putting Waymo into the Uber app. So just as you could choose an UberX or an Uber Comfort, you can now choose a Waymo in the cities where Waymo operates, which means that Uber's getting paid a portion of the fare And that means Uber doesn't have to build its own fleet. I think the kind of the, you know, the giant at the gate here is Tesla, which just released the most recent self-driving software. I know you've got a Tesla. If you update to the most recent self-driving software and ask it to take you from your home to somewhere else in San Francisco, I think you'd be pretty surprised how good it is.
Well, you've got the new Tesla. And of course, Waymo is owned by Google, small little startup in Silicon Valley. Often people have written Google off now in terms of OpenAI. OpenAI has announced this week that it would raise $6.5 billion at $150 billion valuation. Gary Marcus doesn't trust Sam Altman. What do you make of this news, Keith? Is it a big deal or is it just fairly inevitable?
Well, if we can believe the rumors, that roughly equates to 12 months worth of costs for OpenAI. I know that Gary yesterday said he doesn't ever know how they're going to make a profit, but it does ignore the fact that they're making $3 billion a year already in revenue in what is effectively their second year of revenue. So one would imagine that that revenue is going to attract to typically revenue at that stage of a company grows by well over a hundred percent a year. So if you just take it out five years, even you go from three to six, from six to 12, from 12 to 24, and from 24 to 48, that would imply a valuation well above 150 billion. So the way these investors are thinking is what is the future value of open AI? And if I put in 6.5 billion today, it's probably going to be worth 10 times that in the next five years.
Yeah. I think it gets to a trillion by the end of 2025.
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Yeah.Ithinkitgetstoatrillionbytheendof2025.
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And then the sky's the limit. Well, we will see. I mean, a lot of it will depend on Google and other startups. So the news is encouraging in that sense, certainly in the US.
Well, that's a big leap from reasoning to biological weapons, but they can address any problem and break it down into chunks and explain the reasoning between each part of the answer. And you can see it's transparent. Obviously, a clever tool can be used by bad people for bad ends, but we have laws against that. So certainly a person using OpenAI for biological weapons would be breaking the law unless it's a government
Unless they're doing it on tether, Keith. But certainly, yeah, I mean, OpenAI is moving very, very fast. One really striking thing about this week's newsletter, which focuses on agency and technology, is that there was nothing at all about the iPhone 16 Pro. I'm not suggesting you missed it. You're a big Apple guy, so I'm sure you watched it. You've probably got the new phone. Apple announcements now, are they not even worth including in the newsletter, Keith?
Well, personally, I didn't actually get the new phone. Wow, if you don't get it, they're not going to sell it to anyone. It's the first time I haven't. And it's because the benefits vis-a-vis last year's phone are just pretty much zero.
That's true, but AI is going to be in last year's phone as well, so there's no differentiation there. The only real differentiation is a small camera lens differentiation and some new functionality on taking photos. That's about it. So I'm going to wait a year.
I watched it, and it was one of the more... I don't really want to say disappointing, because Apple doesn't owe us amazing change every year. We like it.
Yeah, I was underwhelmed by the event. And I was saying Apple doesn't really owe us to excite us every year. We just kind of expect it because it does it often enough that we're hoping to get excited.
Yeah, I think implicitly that's big news. Certainly Apple is not going to get your Startup of the Week award, which this week you give to the AI-powered work assistant Glean. Tell us about Glean. Work AI for all, they claim.
Yes, so this is an indication of where AI is going to go in terms of practical application. A worker system is just the same as hiring an army of interns, really. And Glean has captured that idea and put it into a product. And people are liking it and buying it. And they are now worth $5 billion. So I thought it's interesting for two reasons. The valuation, of course. doubling in less than seven months, as the headline says. But just that we're starting to see applications of AI that are packaged in a specific way for a specific purpose. There's going to be a lot more of that.
And you and I were talking about this before we went live. I'm still... slightly skeptical of AI, certainly in the short term, but I would love an AI personal assistant. My life is fairly predictable. So if I can find an AI personal assistant, is this Glean or is it more of a corporate thing?
It's currently more of a corporate thing, but it could be turned. You can actually, depending on how you use it, you can turn ChatGPT or Claude.ai into personal assistants. It's really to do with how you use them. whether they do that. And that means you've got to give them tasks. The new reasoning AI is task focused. So you can give it a task and it will break it down into steps.
Well, we are at the... X of the week. I told you it shouldn't be X. You should change it to social media posts, but you insist on keeping it as X of the week.
Okay, well, surprise, surprise. It's of the owner of X, a certain Elon Musk, who is responding to... News that Australia wants to find internet platforms up to 5% of their global revenue for failing to prevent the spread of so-called misinformation online. And Elon Musk responds in a word, fascists. And his ex actually made news. headline, for example, at Reuters. Elon Musk calls Australian government fascists over misinformation law. Is this really worthy of news, given that Musk often says odd things on X?
Yeah, I'm not sure I would write a Reuters story about it, but I did make it post of the week for a reason. And that is, it speaks very well to the theme of the whole newsletter this week, which is hatred of the foreign or the global and by the nation. And Australia and New Zealand, weirdly, because they're quite liberal places in general, have been the most repressive authoritarian when it came to COVID, for example.
No, I don't mean COVID's foreign. I mean, their governments took on a kind of a repressive attitude, the most extreme in the world, actually, you know, apart from possibly China. And Now they're doing the same when it comes to speech. And Musk calling them out, Musk is clearly in the right here, which maybe that's more like the news.
And I think this argument you have, you sort of... Again, it doesn't necessarily make sense because... Australia and New Zealand are getting tough on social media posts and these social media platforms are American or Chinese. That makes them hostile to overseas ideas. I'm guessing that if X or TikTok was owned by a New Zealand or an Australian company, they'd pass the same laws, wouldn't they?
Well, no. I mean, if you think about what, mindset has to sit behind that Australian decision. It is a mindset that wants to control media and be able to ask for things to be censored. I remember during the Second World War, didn't the British government require the Times sometimes to put black over certain articles?
Well, they were at war and it was part of the war effort.
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Well,theywereatwaranditwaspartofthewareffort.
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Don't take what I said literally. It's an allegory for Australia. So let's keep talking about Australia. The spirit behind that is a controlling spirit of a media, which is almost always wrong when governments want to control media. I can't imagine there's very many times in human history where we think it's a good thing that a government wants to control media.
Yeah, we've argued this endlessly. I don't agree. But anyway, it seems like it's what certainly this represents is a growing conflict, and we've talked about this before, between tech barons like Musk and the governments of the world. And there was a couple of other interesting pieces that you didn't include. I linked them to a New York Times piece about getting inside Musk's mushrooming security apparatus and then his political efforts in the US to go after some of his political enemies. Do you think that in a way, Musk, and there was also another piece suggesting that he's on track to become the world's first trillionaire. Is he acquiring, for better or worse, the power of a state? I mean, there are only... I looked it up before we went live. There are only 19 countries in the trillion-dollar club. So, in a sense, Musk will acquire the power, financially, certainly, of the top 20 most powerful countries in the world. Is that what's happening here, ultimately? I think...
We've talked about, you know, we've been doing this show for more than three years now. And if you go back, you'll find conversations we've had about how Facebook with almost 3 billion users, there's no nation bigger than Facebook when it comes to how many human beings engage with it daily or weekly or monthly. And so this is an impact of globalization more than of the individual. Globalization creates a single market. And the single market means that if you're successful, you get super big, super fast. And no nation state has the levers of control that could really influence that. And so we are living in an era where, triggered by technology, things are being created that are bigger than nations.
Yeah, but you're not answering my question. No one's arguing against that. But what about the idea of someone like Musk, and there will be people after Musk, who acquire certainly the financial and maybe the political power of nation states? Is that something that we should be wary of?
we do see that comes from money we have the link about using his money to maybe at a local level to oust a Soros backed prosecutor in Texas I mean that's real I
couldn't do that you couldn't do that well maybe more interesting is that there is a prosecutor that is Soros backed in Texas well Soros has money too so Soros in
Yeah, but both of them actually prove the opposite of your point. Both of them are having to engage with who is a prosecutor. In other words, the institutions of democracy still exist. And if you want power, you have to change who is running democracy through democratic means. That is to say, using the rules. And they both have to use the rules. And so... Actually, the individual, no matter how rich, is not separate from the structures and the rules. And Trump being, sorry, Musk being pulled up in Brazil is a great example of that. Even though the rules are wrong, he's a victim of them.
Some people think that's a good thing. I think you think it's a rather bad thing. I mean, you would be disappointed. You'd be upset. You'd probably be outraged if Musk went to Brazil and got put in jail.
the power he has. I mean, for better or worse, given the wealth he has, he is a 21st century monarch. He runs around with his security apparatus. I'm sure there are people who would like to assassinate him or kidnap him.
Yeah, and the New York Times is just slightly different. It's describing the fact that he has security around him. You and I both know Michael Arrington I can tell you Michael Arrington had death threats when he was running TechCrunch, and he had bodyguards. And it wasn't because he had aspirations to become a king. It was because he didn't want harm to come to himself. And I would imagine that Elon Musk must fear random harm more than ever before, given that people are demonizing him and calling him names like king-like. Names like what?
No, but I think the demonizing of him will lead to random individuals who are not rational taking actions like they did against Trump recently. And you can't blame the individual for it.
Yeah, I mean, he has been demonized, but he also has... And you and I, I disagree strongly on him as a demonic quality to him. Now he would probably argue it's because again, he's demonic.
No, you said it. He's being, he's being depicted. as essentially bad for humanity in the week that SpaceX did the first spacewalk 500 miles above the Earth and tested uniforms that are 10 times lighter than NASA's that will allow travelling through radiation zones that previously were not passable.
No one's arguing against that, but we're focusing on your X of the Week, which he accused the Australian government of being fascist. Yeah. Which does have a, I mean, maybe not demonic, but sort of an odd quality.
You don't think that the appearance of these, eventually these trillion dollar figures, maybe Musk, Altman, whoever, that's not going to change the world that much? You don't think it's that big a deal?
No, I have a more nuanced view, which is that I think that capitalism has reached the point where it is both global and scalable and in rapid time. And therefore, there's going to be lots of billionaires and trillionaires. They're unavoidable. My problem isn't with the innovative side of capitalism. If I have a problem, it's with who enjoys the benefits of these enormous growth in wealth that AI is going to create and whether the human race as a whole is lifted up.
Lots of things to think about. We will return to these subjects time and time again. But that was the week for the week of September the 14th, 2028. Not 2028. That was a Freudian 2024. I was jumping ahead a little bit. We will be back next week to discuss, no doubt, more stuff on a post-Nation state world, Elon Musk, Peter Thiel, Sam Altman, and AI. Have a great week, Keith, and we'll see you next week.