Jan 10, 2022 • 1HR 4M

Samo Burja - Founders, Markets, & Collapse

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Appears in this episode

Dwarkesh Patel
I interview scientists, historians, economists, & intellectuals. I ask really good questions. YouTube: https://www.youtube.com/DwarkeshPatel Apple Podcasts: https://apple.co/3oBack9 Spotify: https://spoti.fi/3S5g2YK
Episode details

Samo Burja is the founder of Bismarck Analysis and a Research Fellow at the Long Now Foundation. Samo writes and speaks about history, institutions, and strategy, and he is the creator of the Great Founder Theory of history.

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(0:00:00) - Intro

(0:00:17) - Are individuals causally responsible for history?

(0:04:34) - Was Napoleon a great founder?

(0:08:47) - What can great founder theory predict?

(0:11:17) - How many live players are there?

(0:15:40) - Is the market full of live players?

(0:18:37) - How to cozy up to both sides?

(0:22:58) - How do you become an intellectual?

(0:27:34) - Aligning incentives for intellectuals

(0:30:40) - What makes someone a great founder?

(0:39:29) - Why is decentralized internet inevitable?

(0:42:21) - Samo and I debate odds of civilizational collapse

(0:48:17) - Is GDP fake?

(0:56:52) - The world only has 1.5 civilizations

(0:59:32) - Advice to effective altruists

(1:02:30) - Advice to young people

Please share if you enjoyed this episode! Helps out a ton!



Are Individuals Causally Responsible for History?

Dwarkesh Patel  0:17  

Today I'm speaking with Samo Burja, who’s the founder of Bismarck Analysis and a research fellow at the Long Now Foundation. Samo writes and speaks about history, institutions and strategy, and he's the creator of the Great Founder Theory of History. So let's just jump right into it, Samo! What is the motivation behind this theory? What are you trying to explain and account for that other theories can’t account for?

Samo Burja  0:37  

Thank you for having me on the show! It's a pleasure to join you. So the goal with this theory was to propose a mechanism for the creation and introduction of various new social technologies that seem to define entire civilizations while also accounting for the role of human agency in history. Why do we seem to see some individuals.. some societies whose existence counterfactually seem pretty unlikely? There are unique features almost every civilization and every society might encounter, and there seem to be certain individuals at the right place at the right time who end up being catalysts for these vast institutional changes.

Dwarkesh Patel  1:23  

Right. So as you're aware, there's an alternative theory saying that “it's actually cultural evolution, it’s memes, or it’s market competition, and some people just happen to be in the right place at the right time.” There’s this idea that the forces are ‘great forces’, just randomness, or some sort of natural selection in the idea space that’s motivating these changes. What makes you think that the individuals are causally responsible, rather than just along for the ride?

Samo Burja  1:49  

Would you say these forces and trends can be understood and studied explicitly? 

Dwarkesh Patel 1:56 


Samo Burja  1:57  

So if they can be studied and if they can be intentionally impacted, then of course we are back to the causality with the individuals acting on the basis of these historical theories. An excellent example of this would be Vladimir Lenin, where, to a great extent, he's just taking Marxist economics which probably isn't quite right, but has some predictive things to say. He then tries to apply this to the process of accelerating a revolution. Now, whether or not this theory is any good at predicting global economic development, Marxism Leninism has a solid track record of revolutionary activity.

As soon as you come to study society, either implicitly or explicitly, if it is intelligible, then it sort of brings it back to particular individuals that leverage this knowledge and come to transform society. Now, I'm not going to claim anything like free will for the individuals. At the end of the day, they're still probably a product of all of these same physical laws that seem to determine everything else in our universe. But I think the individual represents a useful event horizon. It is very difficult to work out how exactly an individual was shaped by society, but, it is much easier to figure out how an individual shaped society back. So it seems an epistemically better place to try to start to untangle this catch 22.

Dwarkesh Patel  3:22  

Sure, okay that's interesting. So you might disagree with this, but it seems to me that there's certain social technologies that are clearly shaped by cultural evolution. Examples of this include the English language, or English common law, the city of Mumbai, or Hinduism. There's important figures–– like you can say that Shakespeare shaped a lot of the English language, for example. But these seem particularly to be the compound effects of many individuals across multiple centuries. Granted that there may be other social technologies that are the product of a single human mind, How do you figure out which kinds of social technologies are the result of more evolutionary pressures versus the agency of an individual?

Was Napoleon a Great Founder?

Samo Burja  4:07  

I would tend to say that it’s anything that has a clearly definable first exemplar, a first clear origin, where the jump in complexity is very rapid and happens over 10, 20, 30 years. Essentially the span of a single lifetime, maybe at most 50 years… the difference between let’s say, a teacher and an apprentice. I think the case is pretty strong there specifically. For example, when we look at the Prussian General Staff system: it's a product of long cultural evolution with the aristocratic class in Prussia called the Junker class, the older aristocrats, the legacy of the Teutonic Knights (who are basically the predecessors of the Prussian state) and all of this stuff. Yet, so much of it can be traced back to the way Napoleon organized his general staff. 

Various people in Germany intently studied the way Napoleon interacted with his lieutenants when making strategic and tactical decisions. Interactions which had great effect, by the way–– there have been statistical analyses of the success of Napoleon, compared to other commanders in his time period and it's been shown that he had a very outsized impact in this regard. Now, I wouldn't say Napoleon is a great founder, even if we acknowledge that he’s necessarily a great historical figure. But I don't think it's a stretch to say that the Prussian General Staff system is pretty much a direct consequence of Napoleon's system of management of military intelligence, resources, and commanders and all of that. 

Furthermore you know, if I were to try to make a case that Napoleon was a great founder type, I would note his codification of French law that was exported to the rest of the continent where it basically supplanted the older, much more locally diverse Roman tradition of law. It of course, built upon it, but it was a great reform in its own right, like the greatest since Justinian 1200 years ago. And honestly, that legal legacy might still be with Europe in 1000 years or 500 years. These types of things have deep roots once established.

Dwarkesh Patel  6:22  

Yeah, there's evidence that the countries experienced faster growth rates for a long time after the Napoleonic law codes were instituted. Now I'm curious why you would be tempted to say that Napoleon’s not a great founder–– he seems like one of the greatest examples in history of a great founder type.

Samo Burja  6:40  

I think it's too early to tell, I think we'll see whether in fact, he managed to create a whole new civilization, or whether this was a more modest addition, I think, often it takes a few centuries to sort of figure out, “well, which of these innovations are truly exceptional?” Now, of course, is this a selection effect? I think obviously it is, right? There are people who strive to transform their societies, and they end up impacting a relatively marginal institution. And there are those who end up impacting the most relevant and the most important institutions. And it's not always clear beforehand which is which. 

All else equal, I'm going to say that Napoleon is a strong example of someone reshaping history intentionally in a quite-self aware way. You can read his diary entries, and if you go read these sources, it's really interesting. He writes about how when people cheer Napoleon, they're not cheering him, the person, they're cheering their image of him. How they've created a mythological figure out of him, and what can he possibly do but go along with this and work with this? And hasn't this been the destiny of all great people? And you might think, “okay, Napoleon, you're full of yourself.” But you know, is megalomania even unjustified when you're kind of right? It's sort of like when Alexander the Great thinks of himself as a Greek demigod is even wrong. Like, if you compare his feats to the mythical feats of Hercules, they kind of start to be in the same ballpark, right? It's not a Judeo Christian God, but it's something.

What can the Great Founder Theory predict?

Dwarkesh Patel  8:11  

Yeah. My favorite example of this is when Churchill was in high school, he wrote an essay where he said “London is going to be under attack, and I'm going to be the man that saves it.” If you're a conspiracy theorist, you would think that he had something planned in high school. And I mean, not only did he save London, he probably saved civilization itself, right? So in fact, what seemed like a kid who was too full of himself, was actually a kid who was underestimating himself. Which was interesting. Lots of interesting questions arise from the comments you just made. Since your theory places so much emphasis on the individual and the decisions the individual makes, doesn't that mean that you're basically saying your theory can't predict much because humans can choose different things? And is that part of your theory?

Samo Burja  9:02  

Well, I think the future is not set in stone. It is up to the decisions of many people around the world. I think that so much of so many political, social and cultural gambits rest on trying to convince everyone of self-fulfilling prophecies. I partially see my role is trying to sabotage some self-fulfilling prophecies. I see my role as deconstraining the future, insofar as I can, in my own modest way. So I'd say yeah, definitely! There are many theories that place a limit to knowledge, right? The first step in science, the most elementary statement you can make is I don't know. Now having said all of this, having said that I don't think we can easily predict the world 500 years from now, like say, the fictional Hari Seldon could and Isaac Asimov's Foundation books. 

I do think that once you identify a founder type, like someone that is creating new institutions, someone that is a “live player” to use my terminology–– “live player”, meaning someone who’s not playing off of a script, but creatively changing and breaking the mold; breaking the reference class over and over and over again. I think at that point, you can predict that that person is going to have successes, unless counterbalanced by different live player. So I think if you have someone that's a live player, and they're at the helm of a powerful institution, the only thing that can really beat them is sort of another live player.

I think it's just because they're just so overpowered compared to most social processes, precisely because of their adaptability. When I first wrote these essays a few years ago, I thought of various political and economic figures and I used the example of Elon Musk. Now, I don't use the example of Elon Musk because it's too obvious. Now, everyone already knows that he breaks the mold. But I feel that back in 2014-2015, you needed something like my theory. There are many different theories that will propose it, but I did make the right bet.

How many live players are there?

Dwarkesh Patel  11:03  

Yeah, that's interesting. I think I probably felt the same fallacy when I was reading it. It just didn't occur to me that this was actually written a long time ago. So the Elon Musk thing was actually less obvious. Okay, so I want to get a sense of how many “live players” you think there are in society. So if you think, for example, that even for somebody like Napoleon we can't yet conclude that he's a great founder––

Samo Burja  11:30  

He’s a live player, but we'll see how this French civilization and European civilization will do. Right now, I think that's unclear, right? It might be on a decline trajectory, it might have a great revival, and so on.

Dwarkesh Patel  11:43  

So how many? Is there a way we can estimate the amount of “live players” just so I can get an understanding of how constrained you think this group is. Would it be most companies in the Fortune 400-500? Or is it like a very few amount of people in the entire world?

Samo Burja  12:00  

It’s much narrower. I think you can be an excellent CEO and basically not be a live player. In fact, this is the point of many management theory books and there's one book I would recommend on this––it is a book called Leading Change by John P Kotter. He's a Harvard MBA professor and a business management theorist, and he notes that actually, most CEOs today are selected to be risk-averse. If you have a company that works then this is actually a great place to start. But if you're trying to produce something new, some innovative new product, then you're actually in quite a bit of trouble with that kind of human capital.

Honestly with most of society, we shouldn't be necessarily gambling with it. But as you know, sectors like venture capital and so on, demonstrate that there are important returns to be had from making these bets that are of low probability, but very high impact. These bets end up being so important for driving progress. And I think it applies not just in technology or software; it also applies to social change, to religious change, to political change, and so on. To give you an actual estimate, I think today if I had to guess then I would say between like 500 to 1000 live players. I don't think this is in the millions, I think most of us, including myself, we're just very much playing off of scripts because for the most part, like the safest strategy is to imitate and incrementally improve on what everyone else is doing. 

It's much harder to sort of derive things from first principles or have some sort of lucky intuition or hard to explain intuition. I think there's definitely unaccounted for genius. For example, whatever one thinks of Donald Trump, it's hard to deny that he was a rhetorical genius. On the fly, he would come up with these strange formulations–– both on Twitter and verbally during speeches. I think there are not many politicians like him. Now I would say that Obama was an interesting live player, no one was expecting him to win the Democratic nomination. But again, he was very different from Trump. And again, he kind of stood above everyone else, right? There wasn't someone that was “almost an Obama competing with Obama,” in my opinion.

So if you look at that, in the domain of politics, in the domain of business, in the domain of science of culture–– you add these people up together and I think that, 500 to 1000 is about right. How many Great Founders have there been historically? I sort of feel that if I were to go through the history of Western civilization, we would come up with about 10 or maybe 12 people. If we look at Chinese civilization and its various waves, I actually wrote an article on China where I talk this through. I think you'd also see about 10 to 12. So I think that throughout the recorded part of human history, there have been about 100-200 great founders. So that's why Napoleon might not pass the bar. I would be inclined to say he does, but I think it's actually very important to evaluate him in the context of people like Muhammad, and Charlemagne, and so on.

Is the market full of live players?

Dwarkesh Patel  15:35  

It reminds me of that quote (I forget the name of the historian), but he was asked, “What do you think of the French Revolution?” And he says, “It's too early to tell.” So I wonder what you think of my contention that the market is dominated by many live players. They're pretty impressive! The biggest firms especially are very innovative–– you think of, for example, the bets that Facebook is making in the Metaverse, you think of the bets that Elon is making in so many different places you can think about, Google betting on AI, and so on. Would you agree with me that the market is full of these live players, that they dominate most of the resources in the market, and in fact, this is what you would expect, given the incentives and the evolutionary pressures in the market?

Samo Burja  16:17  

I would cautiously agree with the example of say, Elon. I would also raise Jeff Bezos as an example–– I'm much more bullish on Blue Origin, even though on paper it doesn't look very good. Just because it's sort of the same man as putting attention into it as was there with the creation of Amazon back in the day. I'm more skeptical of Google's AI efforts. Of course, they've been sort of in the AI business nominally for a while now. I think the Metaverse is interesting in a way, it's perhaps driven by Zuckerberg. I'm not yet convinced it's going to actually work out. But these are all sorts of object-level arguments. I think the very biggest companies and some of the very smartest investors are often live players, but I don't think they're dominant.

Let's look at Aramco. It's a trillion dollar company but I don't think it's a live player. It's like a very formidable player. But Saudi Arabia's oil company, the former Arab-American oil company, very dominant, very big. But definitely this sort of glacial incumbent. Especially if we follow tech, feel that the rest of the economy is as dynamic as tech where winners and losers change so rapidly. But really, that's not the case, right? It's not the case that the winners and losers actually churn that quickly. If you look at the biggest giants, these are companies that have been around for a really long time. I'd be open to the argument that Blackstone, an asset management firm, is a live player. That's a 40-year old-live player. It's been around for 40 years. So you see these patterns. Who are the giants of philanthropy? Well, it's the Gates Foundation. Okay, why the Gates Foundation? Why not the Zuckerberg-Chang foundation or whatever it's called? I think it's because Gates, for whatever reason, was just better at the relevant maneuvering and got other people to sign the giving pledge and so on. 

How to cozy up to both sides?

Dwarkesh Patel  18:36  

Interesting. On a slight tangent, I really enjoyed the analysis you did of Blackstone on your newsletter. I'm curious if you think that Blackstone's “strategy” might just be an accident of the CEO donating to Republicans, but the Blackstone affiliated employees and groups donating to the Democrats. Is this smart? That they have both sides in their pocket? Or is this dumb and that they're cancelling out each other's contributions?

Samo Burja  19:09  

Well, first, I'm just going to take an opportunity to promote the Bismark Brief, which is an intelligence grade newsletter released every Wednesday at 7am Pacific time. We look into a company like Blackstone or into interesting phenomena like what's happening with Jack Ma this week and how did the conflict between Jack Ma and Xi’s China work out? There is an in depth case study every week, 10-20 pages of material research intended to cut through the noise and just get to the signal. All of it is done with these institutional analysis tools that me and my team have developed over the last decade. 

Anyway, about Blackstone. I think it's absolutely brilliant! I think politics is the art of superimposing sources of legitimacy that should cancel each other out. I think for example, modern states can claim many different sources of legitimacy. So if you took someone in the United States, who is more Republican leaning, they might ground the authority of the American state, the federal government in the Constitution and say it's legitimate as long as it's following the Constitution. This isn't a democracy, this is a constitutional republic.

Meanwhile, if you took someone on the Democratic side, they would say, “In a liberal democracy, the rights of individuals should be respected. Elections cannot be tampered with, elections have to be respected.” The authority comes directly from the people. In an interesting way, it's fascinating to me that the modern United States actually has a striking parallel with the Roman Republic. The Roman formula was of “The Senate and People of Rome”, right. That's where the SPQR comes from, like that acronym means that “The authority comes from the Senate of Rome, and the people of Rome.” And these are sort of separate entities. And I think it's very interesting that you can have the superposition. The end effect is that despite their ideological differences, most left-wing, center, and right-wing people in the United States agree on the legitimacy of the United States government. So you should try to always position yourself so that different ideological and political groups have different reasons for believing you're legitimate and doing a good job. You know, I'll give another example. Have you noticed how Elon Musk went from being basically Democrat affiliated and Democrat supported to basically Republican affiliated and Republican supported and nothing about his businesses really changed? 

Like, if you think back to the Obama era, the sort of green energy bill, where he's sort of the darling that's solving global warming, and now he's the rebel who moved from California to Texas because of lower taxes and he’s tweeting nasty things, and so on. This is quite a rebrand with no fundamental business change. So there are two ways you can do this. The first one is the Blackstone strategy: two things simultaneously. And the other way to draw from multiple sources of legitimacy and multiple allies, is to rebrand yourself when the time arises, which I think is what Elon did.

Dwarkesh Patel  22:16  

That's interesting. I thought it was actually kind of a mistake, because the government in charge is run by Democrats, but actually, you put a nice spin to it. There's two more interesting examples here. Napoleon himself, in the biography Andrew Roberts wrote about him, mentioned how the Jacobins thought “actually Napoleon's with us. He's just had to do a few things for the other guys, but really he sides with us.” The moderates said the same thing, the liberals said the same thing, and the religious conservatives said the same thing. They actually say of Bill Clinton that “he's the kind of guy that can walk into a room, talk to 25 different people, and leave each one of those people thinking that he actually agrees with me. He just told the other guy some lies.” So I'm glad you brought up the Bismarck Analysis brief. I actually have a question from Maxwell Tabarrok. On Twitter, he says, “I'd like to know more about Bismarck analysis. How did he start it? What did he know about the market before he started it? And who is their product intended for?” And just to give some context, Max is a friend, he's in college right now and he has a blog. I think he aspires to become an economist. So I think he's probably trying to learn how to become an intellectual whose ideas and thoughts are valued by the market.

​​How do you become an intellectual?

Samo Burja  23:29  

I view my intellectual career in a way that’s separate but in a way that’s intimately connected to the company, Bismarck Analysis. Basically, it seemed to be very clear that the vast majority of interesting stuff happens on the inside of organizations on the inside of elite networks, not necessarily on the outside. And I wanted an opportunity to do both and participate in many different types of institutions. That's a problem today–– we have a really specialized economy, and rightfully so. Is there a specialty that could allow you to touch many different domains, learn from all of them, gather that information, and acquire firsthand experience? So the option of consulting came up fairly quickly. 

I was fortunate enough to be relatively well networked in Silicon Valley. I also noticed that there was a missing niche when it came to working with ultra-high net worth individuals. Their financial investments were well taken care of with basically family offices covering almost all aspects. But when it came to their personal strategy, there was an opening! They often would just have to talk to people they hand picked like courtiers, like this was like Florentine Italy or something. I looked at that and felt that this was so inefficient, that there must be a niche. I could not do much more market research because it was such an underdeveloped market, but it turned out to be the right bet. 

So we work with technology entrepreneurs, people who'd worked in finance, and we help figure out the institutional aspects of their strategies. We often will look at companies like Aramco, or the regulatory agencies, and Switzerland, or the United Kingdom or whatever. Sometimes the goals will still be economic and financial. Other times, they might be philanthropic. We've also been working on figuring out what a private individual could do to encourage and bring about an international arms control treaty aimed at artificial intelligence and weapons using artificial intelligence. Our client was convinced that this is going to be as bad or worse than nuclear weapons, and that something like a landmine ban should be made. If you're a tech billionaire, it's not really obvious who you hire or how you would hire them, or how you would go about trying to push an international treaty trying to achieve it. 

We did some case studies on this and research, it turned out there were actually some Swedish industrialists that had, because of the country's neutrality, been able to greatly contribute to the start of the nuclear disarmament negotiations in the 1970s. And, you know, that's not an obvious thing, that's not something that is easy to find. So I have just delighted in this work, and here's where maybe the connection comes back: I do think you have to impress people, I think when you come into a room…. it's not hard to get a meeting with some of the most interesting, intelligent or wealthy people in the world–– it's much harder to have something worth saying. So you might get a 30 minute meeting, but that's going to be your last 30 minute meeting, if you don't say something very useful, or very interesting, something to grab attention. 

So I think being, let's say being well read, having thought about society a lot, I always had a unique angle, a unique advantage to offer, the ability to say something that was plausibly true, or they could even confirm was true, that they'd never heard before. And I think that really, really helped the initial client acquisition. Now, the Bismark brief that I mentioned is our attempt to democratize it right? It's still a pretty objectively speaking, pretty expensive subscription service. And my goal was to offer for an audience of hundreds or 1000s of people, briefs of the quality that usually billionaires afford. For now it seems to be working out, we're two months in, but we’re very happy with this additional object, this additional product.

Aligning incentives for intellectuals

Dwarkesh Patel  27:34  

As an entrepreneur, or if you work in the private sector, how do you make sure you have incentives that make sure that you're focusing on the right problem and that you're not getting distracted? Are the solutions you’re coming up with are actually practical and helpful? How do you manufacture the same set of incentives for somebody who's an intellectual who might be a consultant, for example? Do you think that you have been able to stay on track here? And if so, how? What's been your strategy?

Samo Burja  28:12  

Well, I think a big part of my strategy  is to… I honestly have turned down clients when I thought they would not accept the answer that I believe they were wrong. I think that there's, of course, some money left on the table and that it's not quite profit maximizing to do this. But I think it's very important for a long term edge, a long term advantage––no matter what I do, I'm never going to be as well networked as a company like McKinsey. Even if I hire brilliant people from McKinsey, or excellent people who've worked at Yale before, and so on, (and we've done so) it's just a complete difference, like an elephant and a little fly, you have to have a differential. 

My hope is to develop these very long-term client relationships, where: What I have to say you might not always like it, but a few years down the line, you'll remember that perhaps I was the only person in your circle who told you that. The selection for yes men and the distortion for information traveling up company hierarchies is absolutely brutal. It's also brutal, unfortunately, in the consulting market. If you read people who have been sort of dissatisfied with the consulting industry, they'll note that often consulting firms are brought into companies to advocate for things that the leadership already wants. So the leadership of the company will say they want to cut staff by 30% and they want to do layoffs. So they'll basically hire the consulting firm to be the bad guy to be blamed for the decisions they want to make. That doesn't leave a lot of intellectual freedom, right? 

But talking to an individual who wants accurate information, who just wants a good navigation grade map for their decision making often they're very intellectually open. So I'd like the opportunity to work with individuals rather than committees. My experiences over the years have been that you can tell an individual they're wrong, and they might still listen to you, they might renew your contract in a year and renew your retainer. But if you tell it to a committee, however, you have to always tell them they're right, even when they disagree with each other. So that's a big problem, right? On a committee, you can never be quite sure. Who are your friends or your allies? Who is your real client, you often don't even know who on the committee advocated for your contract. And like, that's a very important piece of information, just from a salesman perspective, right?

What makes someone a great founder?

Dwarkesh Patel  30:41  

Now, I think I want to ask you about the great founders themselves. So I want to learn, why do some people become great founders and others don't? Everybody says they want to have an impact, right? Peter Thiel claims that the thing that distinguishes great founders from others, is they exemplify the opposite ends of many traits. I'm wondering, do you agree with this characterization? Have you noticed some patterns in the people who tend to have a lot of influence and the live players? 

Samo Burja  31:16  

I think one very important point is that people who end up being exceptional founders, they are people who can socially conform, if they choose to, but are capable of not conforming even when everyone tells them they're wrong. This sounds so basic but if you think about it, for the most part, if you like to read social psychology or behavioral economics or anything like that, you realize that we're much more conformist creatures than we would like to admit. I think there's a nicer way to say we're extremely social creatures, our feelings are hurt when someone says something bad to us. Since you're active on Twitter, you know how hurtful a nasty Twitter comment can be even though objectively, it doesn't matter.

But I think it's very hard to escape the social intuitions, so who are these people who escape the social intuitions? Well they often might just be antisocial! Unfortunately, though, or maybe fortunately, that sort of anti-sociality produces a really strong ceiling on where you could go. Like whatever one thinks of Bill Clinton, he is empathic, because he's able to tell what people are feeling right he can feel with them. Now, you might say he is empathic and manipulative, but know how different that is from just being clueless about what others think, or completely disregarding or not caring what others think. So I think often there is a persuasive ability and charisma, there is a special source of knowledge, there's something that they believe they know that no one else does, that, in their own mind justifies them to action.

They might even conceive of it as divine inspiration, like a lot of the historical founders believed they were inspired by gods or God. It might be like a belief in scientific knowledge. It might be belief in their own personal brilliance, as was the case of Napoleon. A lot of things can provide that legitimacy from which they act so that they don't get demoralized. And at first they will often have long periods of demoralisation. Now, you mentioned Winston Churchill, right? You know the part of his career where the Gallipoli invasion is an absolute disaster. It seems like his political career is over forever. I think if he was more socially, attuned and conforming, he would just go and switch careers at that point, he would never go back into politics and never have this opportunity to do something again. 

Dwarkesh Patel  33:49  

He just switched cards slightly and he became a writer for a little while, but got back into Parliament as soon as he could. But by the way, when you bring up being on Twitter so much that you know what hate messages feel like, I can honestly say that I'm so little-popular on Twitter that I've never received any negative comment whatsoever. The worst I've received was when somebody said, “Your timestamps are not synchronized with the episode.” That's about as bad as it has gotten for me so far.

Samo Burja  34:18  

I have to say the vast majority of my followers are excellent. I'm very grateful that with 27,000 or 26,000 followers, I still delight in most of the replies I receive. This especially includes people who disagree in good faith, because those I feel are so important for intellectual progress. I've seen too many echo chambers in my life to not appreciate constructive disagreement. Private DMs and emails, that's a different matter. People start making weird conspiracy theories about you. Sometimes just somewhat unstable people email you and the only real thing to do then is delete and block. That's it and you move on with your day. It's not really worth getting into details. But you know, there's more than one way to acquire stalkers or whatever. Right? And you don't want that. You really don't.

Dwarkesh Patel  35:12  

Yeah, definitely. In a recent episode of his podcast, Tyler Cowen said that the thing that distinguishes the millionaires and the billionaires he knows is their level of perseverance. What have you noticed that distinguishes a live player from a Great Founder–– obviously other than the fact that great founders have a lot of impact, but why do they have so much impact many generations down? 

Samo Burja  35:38  

Well, I think many live players are actually just interested in optimizing the world here and now and many great founders feel that it’s their calling to impact society, right? You can of course impact society profoundly without having any such aspirations. But you know, this desire to really reform, re-found or fix a big important aspect of your society.. I think that's a pretty neat calling. That's a pretty unique ambition. There are many people who LARP it, who take it on themselves as a kind of an attire. But they're not going to make many choices, right? They're mostly going to make choices that end up being perhaps profit maximizing, or popularity maximizing, or some simpler goal like this, something less elevated. 

Often, the very best way to have a big impact is not to add yourself to one team or another that each is pulling the rope in their own direction. The best thing to do is to pull the rope sideways, right? But very few people are motivated to pull the rope sideways. So if I were to succinctly really drill into this, perhaps what I would really say is that there is something like a desire to found something or create something that outlasts you. This can be a relatively narcissistic motivation, it can be out of a desire for a legacy that endures the centuries, a desire to beat Ozymandias, right? Ozymandias, King of kings, and all that remains of this great monument of this Pharaoh was the broken feet. 

Arguably, Julius Caesar has this motivation. Maybe even Alexander the Great. In Julius Caesar, there's the famous episode where he's weeping when he's 30 years old and visits the statue of Alexander the Great. He weeps that Alexander the Great conquered the known world. And Julius Caesar has done nothing and he kind of makes up for it by the time he's 50. Now, he's at least as well known as Alexander the Great, many thousands of years later. So that type of motivation, it can work. And the other type is often that it's more of an altruistic calling. It's a desire that, “there's something deeply injured about the human condition, and it needs repair or reform.” I think many people who today we would term as prophets or social reformers, they often come out of this position, interested in motivation. Ofourse, that can also be perverted and can obviously cause immense suffering and destruction. But it orients the person towards the distant future and the deep future.

Dwarkesh Patel  38:21  

Would you disagree with the Lord Acton quote, that great men are almost always bad men? Even if there's an element of altruism to their actions?

Samo Burja  38:32  

I think it's perfectly possible to be a bad man with a big dose of altruism. I think that great people, both bad and good.. they're complex, they're multifaceted. Like, for example, I guarantee you that there are many aspects of Abraham Lincoln's personality that modern Americans would find annoying or unsavory. And the same can obviously be said of Churchill. There are many aspects that people might find admirable, even in history's villains. Genghis Khan, for example, there might be things that people would find admirable about him if they could know the person, not just the historical effect. So I really do think that we shouldn't forget that perverse outcomes can also play an important role. Someone might have the best intentions, but you know, the road to hell is paved with good intentions.

Why is decentralized internet inevitable?

Dwarkesh Patel  39:30  

I want to bring us back to social technology. You claim that social technology determines material technologies and civilization. I'm curious why you think decentralized internet is inevitable. If social technology is the background here, there's many different societies where they have different social technologies. Why is it the case that they will all gravitate towards the same material technology?

Samo Burja  39:57  

I basically think that it is possible to construct a more decentralized internet, but it would require very different social technologies than the ones we are currently using. I feel like the Western world pretends to have a free internet. But what we actually have is this archaic, 1990s Internet, that is one step at a time, every few years getting closer and closer to the Chinese vision of the intranet. In other words, China's already living in the future. We don't like China, but we mostly just talk or negotiate about how fast our internet has to be until we’re like China? How are we going to collect all of this data without violating people's privacy? 

Well, the answer is we're going to first collect more slowly, and then eventually, we're going to collect all the same things China collects. Maybe we're going to produce some barriers between companies and governments that don't exist in China. But then the companies will start to have a great role in how elections go, and then they're going to have an influence over the government. Then companies and government are merged again, except from the other end, we don't yet have a good answer. I think I would say that in the absence of material invention and social technology inventions, the internet has been a centralizing force, and will continue to be so.

I honestly think this is even true of the so-called Web3 trend, which has started being relevant in the years since I wrote this article–– because if you think about it, it’s something like a publicly readable ledger of all transactions. Now, that doesn't sound very decentralized. Maybe the implementation is, but by default, it's actually increasing the transparency of financial transactions compared to something like cash.

Dwarkesh Patel  41:42  

Yeah, I guess maybe it's important to make a distinction between legibility and decentralization.

Samo Burja  41:49  

Sure, but it's easy to make the case that increases in legibility by default lead to more centralization. Seeing like a State is like another excellent book I'd recommend. The argument there is that if you make something legible, unless you've done something else, in addition to making it legible, you are in fact aiding central planning, and that's what's going to happen, or at least the pressure will be towards there and the economic and political rewards will be for centralization for such economies of scale. 

Samo and I debate the odds of civilizational collapse

Dwarkesh Patel  42:21  

Okay. Let's talk about civilizational collapse. I view that as another great theme of your work. I find your analysis of past civilizations very interesting, especially when you claim that civilization is older than we think. But when I look at modern civilization, it seems to me that much of the potential fragilities of past civilizations are diminishing. We're so much wealthier, and we have so much more technology that even with small disasters or big disasters, there's a greater stock that has to evaporate before we're down to the level of famine and destruction. We have a global civilization, our technologies are distributed around the world and there's factories all around for all kinds of things. If one society goes down for some reason, the knowledge remains around the world to restart civilization. There's nothing like the Library of Alexandria anymore, where if you burn it down, you’ve decimated the stock of human knowledge. Even tacit knowledge through YouTube, as you've explained, we have a stock of tacit knowledge on the internet. Not to mention explicit knowledge that obviously we have loads and loads of backups of. So I'm curious, can you convince me that the evidence of civilizational collapse in the past is applicable to our world today?

Samo Burja  43:49  

First off, I'm going to say there are in fact problems we have outgrown. If there's a particularly bad drought on the Nile River, this will not collapse our civilization. I would agree with that. However, I'm going to note on what an inhuman scale nature operates. When you look at the universe and when you look at something like a supernova explosion, or even something much smaller, like many orders of magnitude less energy intensive like an asteroid hit, I think you can agree that an event like that could easily wipe out our technological civilization. A very strong solar flare could easily fry all of the planet’s electronics, these aren't even flares that happen once a million years. For as best as we can tell, this is just something that happens every few 1000 years, we might not get unlucky. 

But then the ancient Egyptians might not have gotten unlucky, they might have had a few centuries of good floods and so on. So I want to say that we have outgrown many problems caused by our environment, but not all of them. Currently, I think there is a live debate within our society. Whether global warming is a manmade problem that is a severe enough natural or manmade natural disaster, that it might be a threat to our society. I would actually tend to say that we're probably going to adapt to it fairly well. But again, I think there's a strong case to be made that it might be very hard for us to adapt to it. So that's my first argument. The second argument is, I feel you made the case that we are a single globalized society. And then you immediately went and said, “if you know, there's a failure of one of society, there are plenty of other societies around the world.” Well which is it?

If we're a globalized society, all of my chips, everything in my phone, my iPhone, Android, it doesn't matter. It's all built in Taiwan. And if it's not all built in Taiwan, it's all built in China. If the US experiences an economic collapse, the profits of those factories fall down through the floor. If there's a great war between the United States and China, a nuclear war that targets centers of production, tell me when are we going to be back to building CPUs like we do in 2022? It might be decades, it might be a century. By the way, I don't think nuclear war wipes out humanity, but it could wipe out enough industrial centers that we have to go low tech for a while, and the EMP stuff wipes out the internet. I think that's quite plausible. So that leads me to the third argument.

So the second argument was, if we're a globalized society, it's not that we are correcting each other's fragility. We are compounding each other's fragility because we are not independent (many different civilizations, each in their own container) but interdependent. And then the third argument that I'm touching on with the nuclear war argument, is the argument that with great wealth and great technological power, conflicts, wars, both internal and external, can become very destructive. Let's remember that the Library of Alexandria died in two steps. The first step is when the Romans conquered it, it loses its main source of funding–– the Ptolemaic Dynasty. The second step is much later when it's burned down. Both of these are the result of political conflict. 

No one's going to necessarily burn down the internet. But would you be really shocked if cyber warfare got so bad that during the course of a serious war between great powers or even middle powers, a virus was unleashed that had the specific purpose of destroying every copy of a file in existence? Like consider Stuxnet, right? Stuxnet made its way from the general internet all the way to Iranian centrifuge spinners. That's cyber warfare. That's the modern equivalent of burning down the Library of Alexandria. So I'd be very happy to hear your responses to these three arguments. Or we can move to the next question, if you prefer.

Dwarkesh Patel  47:44  

Yeah, quickly. So I think actually, climate change is a great example of my point that wealth and technology has put us at a point where we can deal with challenges that our ancestors would never deal with. I think the estimates are that we're going to experience a 3% loss of GDP by 2100, or something, because of climate change. The reason it's only 3% is because you know, GDP is expected to be so big by that point. Nobody gets like 3% of the whole amount is tiny. For an ancient civilization, that would be like everything, but we're gonna be so wealthy that “oh it's only 3% of our stuff and that’s fine. We can deal with that.”

Is GDP fake?

Samo Burja  48:21  

Can I ask you why you think the growth is going to continue in perpetuity where, for example, if you measured economic growth in 200 AD, you could have just as easily said, “you know, as far back as we have data for the last 600 years, we have experienced constant economic and population growth in the Mediterranean.” And it would have been exactly the wrong time to make this argument because a mere 300 years later, the volume of trade would be much lower, urbanization would be much lower, and population density would be much lower. I think that from some of this year, we cannot take our own projections of economic growth as certainties. Did you know that the Soviets had their own measure equivalent to GDP? They did not actually use GDP, they had what I think was called a total material production factor. And when the Soviet experts were planning economic growth, they were also expecting to grow all the way to 2010 or 2020. When people make fun of the CIA producing in the 1960s and 1970s reports talking about which capacities the Soviet Union will develop in the 2000s, I think we should cut them some slack. They were reading Soviet reports and often taking Soviet reports about themselves at face value.

Dwarkesh Patel  49:33  

Interesting. Maybe some evidence is the fact that people were not liquidating the markets right? There's very intelligent people who are trying to assess what the best places are to invest capital. They could just say “All right, put all my money in gold, put all my money in Bitcoin,” but in fact, they're very happy making a bet on the stock market––

Samo Burja  49:55  

Bitcoin is a hedge for disaster, I'm going to note its market cap is vastly higher than it was five years ago.

Dwarkesh Patel  50:02  

Sure, sure. But I do know that people are not bearish on the stock market, right? And I think that should say something.

Samo Burja  50:09  

Sure. I mean, I think there's reality there, but I think you have to also agree that there's been a lot of manipulation of the prices of the stock market. The reason I invoke Soviet economic measures.. See I don't think we're quite at Soviet levels, but let's be honest, when you dump a trillion dollars or more from the Federal government through some other stimulus bill directly into the stock market (or indirectly into the stock market), perhaps those numbers are bullish on the value of the stocks themselves as the speculation and not on the underlying value of the companies. 

If say, I radically decreased the value of the US dollar, the price of American stocks valued in US dollars would also go up, wouldn't it? I'm just throwing out some clarifications here. Because my argument here is: we've had a really good run of thinking about our economies for the last 100 years or so. But the economy has grown more complex. And these measures that we crafted like GDP and so on, these are like things from the 1950s and 1960s. And, sure, of course, there's been progress in macroeconomics, but there's not been enough progress for us to basically successfully handle financial crises. I think 2008 disproves the idea that we have figured out macroeconomic policy well enough to be able to avoid financial crises. And there are more recent crises in Asian countries that are just as technocratic and advanced! 

Currently, it's a live question whether the Chinese government will be able to manage various Chinese financial challenges well enough to keep their economy on track. There are very serious Western economists asking these questions. So I think we have to acknowledge our own limits here. And I can't predict the exact thing we're getting wrong. But if you asked me to make a bet with some alien that comes to earth, and the alien is like “Will there be (more or less) uninterrupted growth in the next 100 years?”  I would probably say it's likelier than not. If they ask “Over the next 1000 years, will there be uninterrupted growth?” then I would say it's likely or no than yes. So I don't know exactly what will happen. But something will interrupt growth at some point.

Dwarkesh Patel  52:28  

Sure, and I would agree with that as well. It depends on how intense we think the interruption is going to be. 

Samo Burja  52:33  

I think it could be as intense as the fall of the Roman Empire, or as intense as the end of the Han Dynasty in China to use a non-western historical example. So I'm talking here about easily 50% to 80% reduction in actual wealth if measured by GDP, or something else. These are really tail events that are very infrequent. But when they happen, they can wipe out the accumulated surplus of centuries. I really do think that the way I think of economic and social and intellectual progress is that you have a civilizational superstructure. Within this civilizational superstructure, growth continues for a while. Maybe it's an S curve and it becomes stagnant for a very long period of time, the way the Egyptian civilization did, or maybe it's much more dynamic like let's say Western civilization is. Though, again, we could make an argument for relative stagnation in the last 50 years. Books like The Great Stagnation make this case, or a variant of this case. But if the superstructure is containing this growth that is supporting it… if that social infrastructure is threatened, collapses, or is displaced from the outside, a lot of that accumulated capital goes to waste.

Dwarkesh Patel  53:46  

Right. But do you think that different civilizations are correlated to such an extent that if one collapses, the other ones are going to collapse as well? I mean you brought up the example that we’re manufacturing a whole bunch of our electronics in Taiwan. But smartphones have only been around for 20 years, right? So if you fall back 20 years in terms of this and we already know about the idea of a smartphone––

Samo Burja  54:13  

I would ask you, “How much does GDP shrink if we lose smartphones right now?” I would argue it's more than 3%.

Dwarkesh Patel  54:19  

Right. So is there an alternative metric you would use in order to capture how well civilization is doing and how far we’re progressing instead of GDP and GDP growth respectively? My opinion is that they aren’t perfect, but I can't think of a better metric to use.

Samo Burja  54:36  

I honestly wish there was a metric that measured institutional health and institutional functionality well. There have been attempts to create things like corruption indexes (sort of like societal health indexes), and they've all been fairly unsuccessful. I have to say, it does seem to me that institutions are similar enough that there should be some quantifiable metric for the quality of an organization. And then honestly, I would just look at a basket of the 500 most important organizations of a society and see how well they're doing. Because I think that those organizations together collectively form the superstructure I described––the superstructure that’s supporting things like a market economy. 

Examples of things that might support a market economy, even though of course they benefit from the market economy as well, include the global ocean trade. It partially rests on being a great naval power, enforcing the laws of the seas. If the global ocean trade isn’t viable, then maybe land trade is still viable, or maybe smaller seas like the Mediterranean can have it. But you lose so many economies of scale, right? It's a fragmentation back from a global market into local markets. There's an argument to be made. It's made by so called “system theorists” stating that we've in fact had a global market since about the Silk Road era, though not through the Silk Road but through the Indian Ocean tying up with the Mediterranean.

During the Abbasids caliphate and so on, most of the world's trade paths went through the Indian Ocean into the Mediterranean and from the Mediterranean into the Indian Ocean. The first center of Islamic commerce and Islamic civilization was not Baghdad, it was Cairo. By the way, you might not have known there was a medieval Suez Canal equivalent, but there was a canal between the Nile River and the Red Sea. This canal was actually closed by a Khalif who wanted to move the center of commerce from Cairo to Baghdad into Mesopotamia. So they intentionally made a choice worse for the global economy that made it a better choke point, and much more taxable for that particular dynasty.

Dwarkesh Patel  56:47  

Yeah, interesting. Interesting. 

The world only has 1.5 civilizations

Samo Burja  56:52  

So there's a lot to say here, right? Regarding the trade example, I feel like the world currently has 1.5 civilizations. I think almost everyone is running a copy of Western industrialized civilization, even China! Let's be honest, Marx and Lenin, these are not Chinese thinkers. Mao might be a Chinese thinker, but the internal structure of the Chinese Communist Party is not uniquely Chinese–– it's very similar to the agile early version of the Soviet Communist Party. The Soviet Communist Party was inspired by the theory and practice of revolutionary parties in Germany. That's where Lenin was educated. So I think when you look at it again, China has income tax, it has a police force, and it has venture capital funds. We can go through a list of almost every institution you can think of, and it's going to be Western derived. 

Now, not everything is Western derived. And of course, I'm not saying this all originated in the West, I'm just saying the package came together and everyone's running the same package. If we break down this package, ofcourse a lot of it in the medieval era might go back to the Islamic world, or back to antiquity, or to Middle Eastern Christianity or pagan sources or whatever. But we are basically running the same architecture, and we’re fairly integrated when it comes to global trade! How many logistical disruptions have we seen because of COVID? I think each of those was a lesson, right? Talking about disasters, I said before that the Nile River couldn’t disrupt us. Well, what if a fat boat gets stuck in the Suez Canal? That seemed to bother us. That seemed to disrupt us, didn’t it? Not a lot of civilization, but it was a neat demonstration of how narrow these chokeholds are, how fragile the superstructure of our world order is.

Dwarkesh Patel  58:54  

Yeah, yeah. I was recently in India for about two weeks. And you know, somebody from my family asked me, “So are you feeling a culture shock?” By the way, I grew up in India until I was about nine. And I said, “Not really, at all!” This is an incredibly westernized society––all my cousins speak half English, half Gujrati. So there's no culture shock at all.

Samo Burja  59:14  

Every summer when I return to visit family in Slovenia, I marvel at how much more similar Slovenia is to the United States than the year before. Like consumption patterns are the same–– people eat sushi there. That was not the case when I was a kid, for example.

Dwarkesh Patel  59:28  

Just a few rapid fire questions before you go since I get to talk to some people who are in the EA progress studies circle. The conventional advice there is to give about $2000- $4,000, make the marginal contribution and then save a person in Africa through malaria with bed nets.

Samo Burja  59:48  

If you're thinking about it strategically, you're not necessarily just thinking as a charity giver. You're thinking of yourself as a political actor and as an agent. For most people, that’s probably the best way to spend $4000, $40,000, or even $400,000. I really doubt that it's the best way for say, the Patrick Collisons and Sam Waltons of the world to spend their money. I mean the progress study space is very much boosted and launched by a co-authored article between Tyler Cowen and Patrick Collison! A great example of how arguably more good was done by them writing that article than donating the amount of money they would have made in that time to alleviating global poverty directly.

Dwarkesh Patel  1:00:37  

Right. So that was about to be my question. If you're of this bent, and you have the priorities they do, and if you have access to large amounts of resources, how should you allocate those resources instead of allocating them the same way you would allocate a smaller amount? Because of the Great Founder Theory, it seems to me that it implies that if you can figure out some way to be a live player, then you can probably have a much bigger impact than making marginal contributions.

Samo Burja  1:01:01  

I honestly think you should try to spend your money in some ways that are low probability bets that are different from the other low probability bets people are making. If the money your new bespoke foundation was going to spend is going to be spent in the same exact way that the Ford Foundation or the Open Philanthropy Foundation would spend their money, it's probably not spent optimally. Be prepared to waste some of it, but do seek these large wins. Another thing I would propose is–– often there's no substitute for just building an organization yourself.

I think today, our view is that once you become very wealthy, the main thing you should do is invest your capital. I would say, “No, let other people invest your capital, and you continue doing whatever it is that you did best.” It's better for Elon Musk to try to run Tesla or even a company like the Boring Company than it is for him to try to become a second Warren Buffett. He's not a Warren Buffett. But he created SpaceX, he created Tesla, I think the best thing he could possibly do is create a new crazy company that costs $100 billion, that no one in their right mind would fund. He can make a bet on himself in good conscience. If he spends that money on that new big company, that money doesn't go away. It's been poured back into the economy and maybe ultimately, the company doesn't work out. But you know, not that much wealth has been wasted.

Dwarkesh Patel  1:02:30  

I always like to end my interviews with this question: if the great founder theory is true, how should that impact my decisions about what to do in my career?

Samo Burja  1:02:37  

I think one of the things you should try to do is find a live player and work with them. I mean, whether one can or cannot become a live player… I think there's always room in people's lives for more agency. But it's very difficult. I don't necessarily even think of myself as a life player, right? So I want to make sure that people understand that there's a very high bar here, right? This is not a term to use casually. But I think my advice would be to try to work with live players. They will tend to win. Identify the smartest most agentic people you can find, make sure that they match your ethical vision of where the world goes, and then strive to be as useful as you can to them. Often that's going to be a very well compensated compliment. Much of my life has also been oriented around trying to make myself useful, both to the public and to live players.

Dwarkesh Patel  1:03:30  

Awesome! Excellent. Samo, Thank you so much for coming on this podcast. Do you mind repeating the different places that people can find you?

Samo Burja  1:03:38  

Right, you can find the Bismarck brief at brief.bismarkanalysis.com. You can also check out our website, Bismarckanalysis.com. You can find a collection of my writing and links to all of my work even beyond this market at samoburja.com and you can follow me on Twitter @SamoBurja. Excellent. Thanks so much for having me on the show. It was a pleasure.