okay I'm very excited about this interview this is with Dr gail Pulley he's a very good friend of mine he's
taught at several different universities including BYU Hawaii he is the co-author of the book Super Abundance a chosen
lecturer for Peterson Academy he's been interviewed on the Alphabet Stations and on Jordan Peterson's podcast this
episode is brought to you by Go and Do Travel i'm the official spokesman for Go and Do Travel and the Wavemakers
podcaster cruise this is going to be a blast you have Jacob Hansen of Thoughtful Faith Hayden and Jackson Paul
of The Stick of Joseph Cardinal Ellis of Ward Radio Jasmine Rapley David Boyce of
52 Churches in 52 weeks and Dave Butler of Plain and Precious Thanks and I say
this every time it's a chance to bring on this online community this burgeoning online community together in person for
7 days down the Mexican Baja this is really going to be fun go to quickdia.com scroll to the top at trips
and events go down to wavemakers and I hope I see you there here's the interview
[Music]
can you walk us through the Julian Simon Paul Erlick bet what what made this more
than a wager and why is it historically significant
well the uh the bet actually came out of uh wrote this book in 1968 called the
population bomb and it was this international bestseller and it made all
these predictions about how the world was going to collapse because there were too many people and uh this obscure
economist Julian Simon uh read's book initially and thought well the logic
sounds reasonable but maybe what I should do is go back and look at the at the prices of these non-renewable
resources and so he begins he begins this research project and he goes back and he starts looking at wherever he
could find the prices of any of these metals for example copper was the was a key metal he would uh he would try to go
track the prices and he would make adjustments for inflation and and what he discovered in in the in the data was
that as population increases these prices would go down it's like well
that's that's uh contrary to Mthus and contrary to Erik's arguments so he he
puts his data together and he publishes this article in uh the journal science is the leading kind of journal in the US
for uh scientists and uh when Erlick reads this article uh he just he goes
ballistic and uh it got very personal this this contention between the two and
finally Erlick just threw up his hands and says hey Paul why don't why don't we just bet and um you know one of the
beauties of being an academic is you can say all kinds of things but you never really are accountable for it you never
really have to be accountable for it and uh so it was interesting It was genius that that Simon uh put Erlick on the uh
on the table with with money and said "Okay well," and he made him offer he says "You pick any metal and any
non-renewable resource and it's got to be longer than a year and I'll bet you that it's going to be the price is going
to go downed for inflation." So Erlick jumps at this bet he made some comments
about it's you know I love to take money from fools basically so he he picked
five metals copper chromium tin uh uh copper chromium nickel uh tin and
tungsten and they put $1,000 on the table it was basically $200 futures
contract on these five metals and uh it be in 1980 and uh Erlick picked the time
period he says "We'll bet you for 10 years." So over the course of the 1980s everybody kind of becomes aware of this
bet they're watching the prices well on uh you know in o early October of uh
1990 Simon goes out his mailbox and here's an envelope with no return
address and inside the envelope is a check for $576
and uh I can show you the check there if you want to display that side slide uh
here's this check and uh the inflation adjusted prices had fallen by 36% over
this 10-year period and uh
so here here's the deal also you have to remember is that period the 1980s we
recorded the highest growth in human population ever 850 million people were
added to the planet that was a 19% increase in population so how could you have a 19% growth in population but
these five metals their price had fallen by 36% how you know that wasn't supposed to
happen in fact uh the opposite was supposed to happen so this this you know
I I tell people I think this is one of the most important checks ever written in economics
because it really demonstrated that look there's something else going on here this relationship this fundamental
relationship between population and resources what is it musthus you know he
said well uh you know population goes up geometric but food can only grow
arithmetic uh basically food uh food grows at a linear rate but population
grows at this exponential rate and we're going to end up with this with this collapse of civilization and he wrote
this book in 1798 about this uh prediction that he made
this theoretical prediction that he made and uh Erlick picks up the argument same
argument too many people were we're going to run out um but both of them both Mus and failed to go back and look
at the historical record what's the empirical evidence tell us when we look at that these prices economists
quantities are really interesting but prices are much more valuable because they contain more information prices
tell you the relative scarcity of things you know when a price goes up it says "Wow we uh we must be for whatever
reason we don't have as much of it." If prices go down it suggests that you're having this increase in abundance
somehow and what explains that difference uh one of the um one of the
problems we we've had in economics is this idea that only atoms can be
resources and that is fundamentally flawed atoms by themselves with without
knowledge have no economic value it's knowledge that transforms atoms into
resources and that's what Julian Simon argued he said you know uh it's the
knowledge that's growing faster than population and that knowledge is
creating resources that allow them to become much more abundant so and uh so
this bet you know it comes out and I actually got to meet Julian Simon in 1981 he came to our university and gave
a a lecture and talked about this bet and we were all like "Okay well your theory sounds good let's see what
happens." You know because we really know what going to happen and when when
you know the bet the result of the bet it's like oh wow a lot of people said well uh sign was just lucky uh you know
we picked a lucky decade uh we went back and analyzed um clear back to 1919
looking at these five medals and what their what their prices had done and about 80% of the time Simon would have
would have won this bet we recognize you have periods where you have these uh
decrease in abundances and you'll have uh prices go up but they're they're typically temporary you know so you have
this this chart that looks like this but that that's a temporary up and down uh
market condition but underlying trend the underlying trend is is this
continuous increase in abundance and that's what uh Simon understood So Gail
so what so so typically what what I I I mean on a surface level I think most people would agree with Erlick Erlick
that that you've got a a supply and demand we've all learned about supply and demand and as the population grows
the demand is going to increase for the resources there's a finite number of resources so in your mind you know
superficially you're thinking well of course you know you're going you're going to have higher prices uh because
of supply and demand you're saying that the difference is is that knowledge itself infused into the resources
somehow or bridging the resources creates a a a super abundance that
normally that that how does that change supply and demand because supply and demand seems like
that is a law so so how does the knowledge actually change supply and
demand okay let's go back to this original idea that that it seems like it's logical to
make this assumption you have a fixed a fixed amount of resources um and it's
interesting that that argument was picked up by by Thanos uh if you want to
share the slide there you remember Thanos kind of says the same thing again he says the universe is finite its
resource is finite well the first part of that argument is true we do live in
in you know we do live on a earth with a finite number of atoms but atoms are not
the resource it's it's knowledge that ultimately transforms these atoms into
resources and we have no upper bounds on the amount of undiscovered knowledge and
that really is what allows us to jump out of this fixed pieite
world of resources and say our resources are really knowledge if knowledge doesn't have a bound then our resources
also can become infinite and we make the argument that we really live on this planet that has u that
that's infinitely bountiful because uh this knowledge is what allows us to
transform our world around us and that that really goes back to Simon's original argument is what who discovers
knowledge and it's human beings so if you want more resources you need more
knowledge and that knowledge is discovered by human beings that are free to innovate
and that's why you can increase population and your resources actually increase much faster as long as that
population has this freedom to innovate yeah so it's actually resources somehow
increase metaphys there's a metaphysical increase over a physical increase and
the most important thing is the metaphysical is that right somehow you know I know people can say well that's
your brain but there is a the knowledge is not
you know that's not that that's not a physical resource no it's not a metaphysical resource that
somehow increases the physical resource Right economics is not physics physics
is about atoms economics is about knowledge and knowledge is not subject
to the laws of physics it has this entirely different different uh set of
parameters or laws and um this idea of of uh knowledge is is
uh when we organize atoms when intelligence imposes a a creative
organization on atoms that's when they become valuable you think about a You
think about a a million-doll car a beautiful milliondoll uh uh sports car
and you buy it you take it off the lot and you're driving it down the street and everybody's looking at you you get
distracted and you crash the car you know what has the value done well
the value's kind of like disappeared but the atoms are all still there all the atoms of that car still they're just not
organized like they were it's the organization that's really a product of intelligent
action that creates value and that's that's this knowledge that really wealth
is knowledge we uh one of our uh kind of guys that inspired our writing George
Guilder he uh he makes this argument that wealth is knowledge and it's not
oil or gold it's really knowledge that really uh transforms our world and and
that's what lifts us also out of poverty and makes this uh world around us
transforms all these things into abundances economics you know we have this definition of
economics that is stud choice under scarcity and that's interesting but what's really more interesting is how do
we transform scarcities into abundances how do we go from microwave ovens that
cost you know a thousand hours of work to buy to
costing three hours of work how do we go from from uh large screen TVs costing
$15,000 to costing $150 how do we transform this world uh from
scarcities to abundances it's knowledge that we discover and apply to the world
does its transformation so one of the things you really focus on that I really like you've got a Substack
also and and Gail wins by the way uh but it's you you put out these little uh
examples of what you call time price and and so you'll take like a Model T a Ford
Model T or or something early really really early on and look at the pricing there as compared to what we have today
with a car can you explain how time pricing works and why it's an important way to look at historically at at
economics and the value of a product sure uh so we buy things with money but
we really pay for them with our time which means that you can price things in
dollars and cents but you can also price things in hours and minutes so uh uh you
have a money price and a time price uh to to uh calculate a
time price you just take the money price and divide it by your hourly income example a pizza costs $20 and you're
earning $20 an hour that pizza is a uh the time price is one hour or six
minutes well what we do then is we look at that time price over time what's
happening to how much time it takes you to earn the money to buy that thing and
when you have new knowledge that's discovered it shows up in lower prices and higher hourly incomes now inflation
kind of enters the equation and we get distracted by inflation but generally what we observe is that people's incomes
increase faster than prices now what this also tells us is that this time is
this ultimate com ultimate currency that we have as human beings we wake up in
the morning each of us get 24 hours um and what do we get to do that 24 hours
well a measure or an index of your standard of living is does it take you
more or less time today to earn the money to be able to buy something that you're interested in and so when we did
our study uh we actually uh um we're real interested in this bet and when the
the Infinity War movie came out in 2018 and Thanos makes this remark it was like
uh uh oh here we go it's it's Erlick again and so we thought well should we should look at this bet again to see who
would win the bet and we went back and looked at uh
we said what was the the major criticisms criticism of the bet and
there were two criticisms one it only covered five items and it was only for 10 years so a lot of people said well
Simon you were just lucky so we did we we expanded that we looked at 50
different items we said,"Well let's look at let's look at these." So there's a slide for you of the items that looked
at and we said "Let's look at all these items." We looked at energy so we looked at oil prices uh natural gas prices we
looked at food we looked at you know including barley and wheat and corn and and meat uh we looked at materials like
wood and uh uh cotton we then also looked at uh metals u all these original
metals so we had this data set of 50 items and we went back to 1980 forward
to it was at the time it was 2018 and we looked at their time prices and um what
we discovered is that uh on the average these time prices had fallen by almost
70% over this period mhm uh
and uh so we we kind of reconfirm that what Simon said about population and uh
resources was once again empirically confirmed that how could you have this
abundance increase at the same time population increased and it led to this
idea of what we call super abundance where population uh excuse me where where resources are
becoming abundant at a faster rate than population so if population grows 5% uh
your resource abundance is growing at 10% in other words you get 10% more for the same amount of time and that goes
back to time prices now when you're uh
when you're dealing with these economic prices we typically think inflation or
the consumer price index or the CPI yes that's was that was my next question
yeah the problem with the CPI is the CPI tells you how expensive things have gotten doesn't tell you if they've
gotten more or less affordable and that's really the the issue if prices go up by 10% but your hourly income goes up
by 20% these things are actually more affordable to you because it now takes you less time to earn the money even
though the money price is higher the time price lower so it's key to think in
time one of our arguments is we think that people need to move from thinking in atoms to thinking in knowledge and we
also say that people need to move from thinking in money to thinking in time
and if move if we move to thinking in in money and and or thinking in time and
knowledge it gives us a totally different perspective on our standard of living
so Gail so then so then more people obviously means more demand right there's more demand especially if
you're looking at staples food different things what but you're saying that the the
supply for this the more people there are the more demand there is but the more people there are the more knowledge
there is and the knowledge out outgrows the demand is that correct right yeah
back to your question about supply and demand that's this these laws of supply and demand and and what uh our research
says is yeah what we we're we're not uh trying to say there's a new law we're saying take a look at the supply curve
what is moving that supply curve out to the right what is increasing supply well
what's increasing supply is is this growth in knowledge if think about this
if population doubles but the price of something remains the same what does
that mean well the demand curve moves out but it says the supply curve is
moving out at the same rate and that keeps the prices at the same level so in
our analysis what we we are is if you see a population increase and prices
don't increase that's an indication that you're having this increase in abundance
people are discovering new knowledge that allows them to create this product
continue to create this product with greater and greater uh supply i mean
think about your think about this guy you know what's happening here and the
other aspect of knowledge economics you know there's economics about the physical world of atoms and we count
those atoms and we think about atoms there the economics of knowledge says
you know when you discover new knowledge I can share that with another person I don't lose it if I make a Snickers bar
and I and I share it with you i've lost half of my you know I lose the Snickers bar that that those physical atoms move
to you but if I come up with this new idea this new thought and I share it
with you I haven't lost it if I come up with a with a new uh song for example
and I share it with you I haven't lost it and the other uh thing that we think
of so knowledge has this uh characteristic that we call we say it's nonrivalous you and I can consume it at
the same time and that's also another factor we consider once you come up with
this new knowledge everybody can consume it at the same time which also uh tells
us that uh you know as we move to more of a knowledge economy that uh as people
discover more and more knowledge and share that we lift everybody now you
have products that c that are very expensive to to develop the first unit uh I I mean what did it cost Apple
to develop the first iPhone i mean to date
they've spent billions of dollars to develop this product but that was the
first unit and then to make a copy of that unit the marginal cost per unit
cost can drop way down uh I get access to this I get access to this device that
costs billions of dollars to create and I can I can use it i it cost me $2 a day
you know by the time I pay for my I can get the plan and it's $2 a day for $2 a
day I get to have access to a billion dollar product and the reason I do is because that product is knowledge and
all of us can consume it at the same time and enjoy this benefit of this knowledge that that that gets discovered
and created and shared now the question is how do you come up with the billion dollars to begin with to spend to
develop this product and it has to do with how many people you have if it cost
me a billion dollars to develop a new drug uh but once I've developed it it only
cost me a dollar to make a copy of this pill what should the price of the the pill be
well I want to be the second guy in line i don't want to spend the billion dollars i want to be the guy that spends a dollar but if your market is a billion
people you could basically charge everybody $2 for that pill and everybody
gets a billion dollar bill for dollars and that's this power and economics of
knowledge that we have to recognize that's really what gives us the standard
of living we have is is these knowledge product that that really make us all billionaires because now we get to to
there's so many of us things can become so affordable and so abundant because
you can spread that cost across a lot a huge market now if we're moving into an information
age you know we have been for decades but the more we move into an information age we've got AI developing we've of
course got the internet to share this information so as you say this commodity
this infinite commodity of knowledge that can be transferred and shared to everybody else are we looking then going
into the future as a knowledgeharingbased uh uh people and economy and and world
population are we looking then at more super abundance because if it's if the
economy is based on the knowledge then and and and that knowledge is not
is becoming less and less scarce and in fact is infinite as far as sharability
does that does that work in your model to say that you know future predictions
would be that the economy should continue to grow and expand and and uh
uh be the opposite of what many people think with world population in that
we're actually going to move more and more toward more super abundance with more people
absolutely um just want to recognize that we've been in this super abundant
state for about 200 years now uh we've been increasing knowledge uh faster than
population since around 1820 um interesting uh article that uh was
published in the Wall Street Journal if you want to see the slide there back in 1990 uh they you know millennium was
coming up and the Wall Street Journal wanted to have somebody kind of comment about the economic changes over the
millennium and so they reached out to this economist his name is Angus Madison and he was recognized as the world's
leading authority on economic demography so he writes this article about what happened and the title was poor until
1820 he picks this day out and he says you know 1820 and the the the what it
look like is is here's this trend of per capita income we call it a uh hockey
stick you know it's just flat horizontal around 1820 suddenly it goes vertical
and what was that it was this emergence of the recognition that you know if you
allow people the freedom to innovate that suddenly everybody starts to discover things and share things and you
lift people out of poverty uh so we've been in this period for about 200 years
and the question is are we going to be able to go forward our all of our analysis suggests is we are increasing
at an increasing rate in other words our curve is not just linear growth we're
increasing at this increasing rate exponential it's an exponential exponential so it's increasing at an
increasing rate so uh we we expect that
as long as we continue to have population that are free to innovate
that we should continue to have this knowledge discovery process that gets easier and faster and more affordable
and AI is the most recent iteration of a tool that allows us to do that and uh so
our expectation if if we can if we can remain at peace with one another on the
planet and have this freedom to innovate that we will see phenomenal increases in
our standards of living because we will have all of these products that are going to be very intense knowledge
products yeah so let me move to something else here i want to talk about inequality and
innovation uh you've got is is is inequality
necessary for innovation to scale up the way you're saying it does for example
you know you've got luxury goods that are funded by the wealthy
and they eventually become mass affordable to everyone right so in other
words is that is that part of the scaling that inequality actually is in place for for the economy to to boom
that way yeah you know the term inequality kind of carries all this baggage with it like you know is is
inequality good or bad uh inequality that this key issue is do we want to
lift people out of poverty uh do we want to to help the poorest in our in our
society how does that happen it happens by people discovering ways to become
more and more productive so more and more people can enjoy these products these products of abundance and uh back
to the question that if that's the case then you've got to be in favor of allowing people innovate now this
innovation process it doesn't affect everybody at the same time it's typically uh the innovators that are
funded by people who are looking uh to create value and the the first buyers of
these products tend to be wealthy people it's the wealthy that allow us to get on learning curves and that's another key
principle is wealth is knowledge growth is learning and and growth is learning
really has to do with how do you discover new knowledge it's in this process of learning curves and what
we've what we've observed is every time that um you can double production
your uh per unit costs fall between 20 and 30% so get on a learning curve and
that allows you to discover things along the way that allow you to lower your costs and when those costs go down you
can lower the price but who funds those initial things henry Ford he introduces
model 1909 it was $850
and by 20 by 1922 the price had fallen to $260
well it was the the wealthy that bought the product to begin with but that really allowed him to get on these
learning curves because the more you make the more you learn the more you learn the lower the cost the lower the
cost the lower the price the lower the price the more you can sell and the more
you sell you get into this virtuous spiral of this knowledge discovery and
sharing process which then lowers the price for everybody and I tell people
you know if you see something today that's really cool it's probably pretty expensive but wait 5 years and everybody
will have it if the product gets on a learning curve and that learning curve
is really what what allows us to to transform these luxuries into into uh
things that that everybody can enjoy that that that the masses can enjoy and
you you think about the wealth that that's created in in the US uh by and
large it's created by people who figure out how to make things affordable for everybody
um Ford Walmart uh all of these companies that have figured out how they
become very wealthy but how did they do that not by selling products to the rich
uh because there's not that many rich people really rich people but there's a lot of just regular people and the
question is how can I sell to everybody on the planet i've got to figure out how to make it affordable and that's by
learning how to make it affordable in that process of prey so so within the
United States I mean using this in a in a in I don't know what you call it a dualism but it's you've got you've got
the wealthy in the US as an example um they start off they are the the uh um
the early buyers of these products they're basically helping to fund additional research uh for the product
to be improved to be um created manufactured at a cheaper price
for the company that's that's that's manufacturing it and then the rest of us
you know eventually are able to have access to this as the price comes down as it as as they're able to create a
lower a better product at a lower price than the masses are able to start to uh
uh participate in this it would be the same thing in looking at it as nation to nation where the US is such a wealthy
nation it goes in it helps fund the products um
shows you how you can scale this to to a large number of people and when that has
been put into place it can now go out to the world to the to to uh um third world
countries as an example at a lower price at a higher access accessibility would
that work in the same scaling of within the United States for example is going global
right globalization is is simply uh expanding your market is uh I have more
people I can sell to but more people can sell to more people so now I can find customers all over the planet but you
also have producers now that if you can activate these producers uh these creative innovator entrepreneurs that
are around the planet that that give them that opportunity to move from being
uh consumers to being creators that's what this global capitalism really the
ideal uh uh uh vision of a global capitalist society it's really a global
innovation society a society that really everybody's on learning curves
discovering knowledge and then it ultimately gets shared in an economy in
uh these new products prices and varieties of products so we think about
the United States we think about little pockets in the United States silicon Valley for example it's really intense
innovative place but uh you know uh what that really is it's a place but it's
attracted people from all the plan that come to this place because that's where you can accelerate your innovation
visions you I you think of Elon Musk and uh here's a guy born in South Africa
goes to Canada you know he ends up in California he moves to Texas what is he pursuing he's pursuing a place that
allows him to manifest his vision in the world with his entrepreneurial
creativity and look at his companies and what he does is he gets on these learning curves and he tries to make as
many as he can as fast as he can because he recognizes every time I make one of these things I'm going to learn
something you look at the Tesla learning curve and it's just like this in terms of the units he produces you look the
satellites it's like this you look at the you know the Starlink device it's
like this and you know so he really understands mentally that I'm on this
pursuit to learn as much as fast as I can and that allows me to to create these
markets and capture these markets because I am the the guy that can can u
sell it to the lowest possible price you know he dropped the price of putting uh
uh putting a a pound of uh a pound into orbit he's dropped that by 90% in the
last 10 years and he says "My goal is to drop it another 90%." So I go from
something that cost a dollar $100 down to $1 well that creates a
totally different environment now for wow this this creat totally different
environment now uh he's got lots of other interesting things but he really
understands the economics of knowledge and how it creates value and wealth for
for the planet now knowledge then being shared is is a great thing for the
economy it's great for the poor the poverty but there's another type of knowledge that gets shared out there and
in fact it is the dominating narrative out there and that is scarcity and and
that there is a carbon footprint that you need to look for and and and be worried about there is the scarcity of
food and medicine and everything else right the more people we have you've got for example the younger generations have
really been hit with this even harder and so there's the thought of well if I bring more people into the world as an
example I'm doing the world a disservice right to bring a new person into the
world and there uh you know whether it's a climate concern that you have or a
resources concern that that that you might have what why are we still in a position the
majority I I would say of the world of the educated world is still in a position of a very Malthusian type of
perspective on supply and demand well selling fear is very profitable
it's very profitable you know uh human beings by kind of our nature we we we
have survived when we're afraid and uh so to be able to uh capitalize on that
fear in human beings uh grab their attention with something that's frightening and then be able to hold
that attention and then sell them advertising is the model of media and
it's the model of much of academia that you know unless we let someone else be
in charge unless you let me be in charge we're going to have this total collapse
there's really always a power element tied to this prediction of collapse and
as you dig deeper in that you realize you know this is about power it's not about lifting people out of poverty
you go back to climate if you look at climate related deaths deaths that are are due to climate they've dropped by
over 99% in the last hundred years people people have no idea how
how how uh risky the planet used to be and how expensive things used to be and
so I think part of it is is educating people uh having them look over time you
know if you just look around today and you think "Wow there's lots of problems." What you don't really see is
that we've overcome so many problems you know we live in Phoenix and and St
george Utah and I'm sitting here and it's you know 72 degrees on my thermometer i can just
punch a little button turn lights on turn air conditioning on we transform these deserts into these places that are
very habitable human beings are very adaptable they can adapt to uh you know
do we have climate that temperatures that move up and down yeah we do but look at the range of temperatures human
beings can thrive in i can thrive in Rexburg Idaho which gets to 20 below and
I can thrive in Phoenix that gets to 120 how is that possible it's because we
discovered knowledge that allows us to adapt to these conditions and to think
that that suddenly we're we're no long we're going to lose that knowledge or we're no longer going to be able to adapt to it and this is going to
collapse it's like where does that come from other than just this innate fear
that that we we have as humans that things are going to you know could go bad yeah they could go bad but look at
the probabilities that that's going to happen and
you know uh once again young people uh you you you think that things are bad
now it's like you have no idea how bad they used to be and look at this trend
line you know if we went from here to here what's going to stop us from continuing to to to move forward now
that we have a lot more tools a lot more people a lot more ability to be able to
discover knowledge into the future our ability you think about 8 billion people on the planet and 7 billion of them have
mobile phones what's that mean in terms of learning curves is this potential is there's
never been a better time on this earth to be alive in our history to be alive
and to uh to have opportunities to to really create value for one another and
that's really what economics is it's a study of how human beings create value
for one another by discovering and sharing knowledge in free markets that's the other aspect you've got to have
markets that are free that allow prices to move up and down because prices really contain this information about
what you should be doing prices go up I shouldn't consume as much prices go up I
should go figure how to make that thing or find a substitute for it or recycle
and ultimately that focus on that price leads to this increase in abundance
because people dis people will discover substitutes that suddenly I don't I don't need that anymore light for
example in 1820 you had to spend three hours working to earn the money to buy
enough light to have light for one hour enough light to be able to read and
today uh it takes you less than one sixth of a
second to earn the money to buy light that gives you reading enough light for
reading uh in one hour so you've had this tremendous abundance of light and it's not because we're making candles
bigger and faster it's because we continue to come up with new ways to create light we go from a candle to a
light bulb and then we go from this light bulb technology from incandescent through these iterations into LED lights
it's just phenomenal how abundant lighting has become and those kinds of
things give us these foundation technologies and resources that now let
us discover even more at a faster rate what so as you're explaining this I'm
thinking to myself okay well this has a lot to do with the ability of open markets and and how crucial that is you
describe uh innovation in three different parts you talk about in invention market validation and
diffusion right how important is a free market for all this to work
markets are really uh they're a place that creates knowledge if you prevent
markets from working you're really preventing knowledge from being discovered if you control the price
you're really controlling and limiting this knowledge discovery process if you limit people from being able to trade
with each other you're limiting knowledge so a free market is really it it's it's about giving people the
opportunity to find somebody else that they can create value for and then a price that makes both of them happy you
know once again unless the price makes both parties happy the trade doesn't
occur in a transaction there's one price but there's two values when when I sell
you when I sell you a car you know say I sell you my car for $5,000
why did I do that it's because I think it's worth less than 5,000 to me and you think it's worth more than 5,000 to you
we both walk away from that trade feeling better having increased our
value that we hold and that insight what happens in a market this value creation
process is key to understanding how we move forward it also uh markets tell us
what we should and shouldn't do uh there's these three levels of uh
innovation really entails these three levels it ends with ideas and ideas can become inventions an invention is the
the um realization or the manifestation of my idea i've taken it from my mind
and now it's on the table here's my invention but but you've got to then take that invent to a market to
determine whether you've created value or not and that value uh creation
process is key if I invent something it cost me $100 to make one of them but I
can only sell it for $80 it remains an invention but it has not created value
on the other hand if I can sell it for $120 that's telling me that I've created
something that people value more than it costs me to actually create it therefore
that signal that profit signal is telling everybody else go pursue that
thing the the market is recognizing that you've you've created an innovation
and innovation is really the discovery of valuable new knowledge and only it's
interesting because only about 3% of the innovation inventions that are created
ultimately end up at this innovation level if you look at all the patents that are registered only about 3% of
them make money which is which is really interesting but the way we determine whether or not what you're doing in your
life is creating value is a market you've got to have a market that lets
you validate markets are voting booths you have this continuous real-time voting about whether or not what you're
doing is a good idea i mean if I came to you and said "Greg I I I I'd like to
have you do this new job you got to move to New York City and I'm going to pay you $5 million a year to do it." What
would you tell me i'm probably in i'm probably in you know
you've given me a piece of information that tells me I can move myself to a higher valued thing and activity and
it's going to be better for me and the reason I'm doing that is because I think I believe that if I did that for you
it's actually going to be better off for me as well so allow people to discover
ways that they can create value for each other by by letting us move our
resources into things that are more and more valuable to everyone else and
that's what a market does and you've got to have two things we
talk about a market but it really we really need to say a free market and there's two aspects to a free market you
have to have prices that are free to move up and down because prices are giving us a signal about what we should
and shouldn't do but you also have the need to have the freedom for buyers and sellers to come into that market when
you limit a market and say well you have to have a license to do this or you can't do it here you can't do it at this
time of day you're really limiting this knowledge discovery process and that
once again is preventing wealth from being created and um once again we
recognize that there are markets where you've you've got problems where they don't really work as well as they could
but the alternative is worse you know you want to shut that market down you
want to prevent that market from happening you really prevent knowledge from being discovered which ultimately
is wealth so as you're talking here again thinking
about we talked about two different narratives that are out there but what about within the economics profession
right how how has super abundance and your work been received among economists
and where is the state of that field as compared to where your work is right now
in other words how much of a discrepancy is there Well
I talk about the original sins of economics these original ideas that we had in economics that that now we
recognize were deeply flawed uh this uh fixed pi uh fallacy uh and it's it's
it's moving from thinking in atoms because we kind of looked at the
physical world and we thought well the physical world is our resource and that's true but the physical world
doesn't become valuable unless you add knowledge to it so moving from thinking in atoms to thinking in knowledge and
then the second issue is you've got to move from thinking in scarcity because if you think in atoms the world is
scarce if you think in knowledge the world's potentially abundant so moving
from scarcity to abundance how do we transform this world into a world of
from scarcity to how do we transform product make them affordable for everybody and then the third issue is we
uh in economics we measure things in money and now we realize that money is
not a good measuring stick because it can be inflated it can be counterfeited
time on the other hand uh doesn't have those those problems so think in time so
the economics profession we're going through this we're going through this process of trying to recognize
uh this one abundance creation process how does it occur uh and then and then
it's uh how do we measure it how do we measure it and then the uh the other
aspect is we've really had these ideas but they've just been kind of in the
background for a couple hundred years adam Smith kind of the father of modern economics he talked about time prices he
talked about time prices but we never really got the traction we're hopeful that if we can move people from thinking
in money thinking in time that they'll see a completely different world and
thinking in in the the u the perspective of what's changed over time so Jordan
Peterson makes this interesting observation he says you know if you uh
if you uh compare yourself to who other people are today you're you're going to
be miserable but if you compare yourself to who you were yesterday your life is you're going to feel much
better about yourself essentially I think it's his fourth rule in his book 12 rules don't compare yourself to other
people today compared to who you were yesterday and what he's trying to say is look if you go back in time and look at
your parents and your grandparents what kind of standard of living and life that they had you're going to realize you can
be nothing but profoundly grateful if you compare yourself to other people today
you don't have to go very far to feel like you're a loser because there's other people that are wealthier and you
know better looking and so forth and so on that comparison uh to other people in
that respect kind of leads you to envy versus uh comparing yourself time look
at look at uh your life compared to your parents and grandparents and you realize
wow not only did they have a lower standard of living but they made sacrifices for us
investments for us that give us a much higher standard of living that they had
so what's the equity in that we're about 50 times richer than people were a
hundred years ago 50 times richer so it's like if you want to talk about inequality talk about inequality over
time and it's it's drastic and that's why make argument that you should
compare people not your income inequality your time inequality what do you get to do today with your 24 hours
versus everybody else on the planet and that is that has been compressed just dramatically because of this abundance
that we've created that's all these people at the bottom where they no longer have to spend eight hours a day
just to earn the money to feed themselves that day they can spend an hour less a day now earning the money to
buy the food that they need to sustain their life so now they have seven extra hours
right to be creators yeah to be creators if they want to what
uh do you think that that your work challenges the uh ideological
underpinnings of modern environmentalism yeah absolutely because environmentalism
I mean there's lots of different aspects of of it but the environmental movement is once again stuck in this fixed pie
fallacy that we just have this fixed amount of resources that that if you add
more people that everybody's slices gets smaller and uh therefore we we've got to
stop population uh because it'll run out of things and the the evidence is no
that's that's the opposite is true i know it it sounds it sounds uh obvious
that that's the case but your fundamental assumption about what a resource is that's where the flaw is
that's where the defect is assumption it's not this this fixed pie um I like
to ask my students do a little quiz you know how many are on a piano and my my
students that know music will say well there's 88 keys and then the question is well how many songs are in a piano
and if you ask Thanos that question he would say well you got 88 keys you must have 88 songs it's like that seems silly
because recognize that the piano actually itself has no songs has no
songs those songs exist in the minds of human so the keys on the piano are the
atoms but the songs are the knowledge and what's really valuable interesting a piano with no songs really has no value
and then the question is how many songs are there how many potential songs are there and that that number has to approach in infinity
an infinite number of songs and how do we determine what songs are really good that's where markets come in that tell
us okay produce these songs everybody write a song let's put it out there let's all vote on the song we like and
when we see what we like that now tells people you should make a song like that because that is
so the environmental uh you know they shifted back in Elix's day it was too many people and and when we discuss well
it looks like when you add more people we're not running out of stuff so then the argument shifted to well we're going
to too much pollution people are going to cause pollution and what we did over
the 70s and 80s we had this dramatic reduction in pollution levels i don't know didn't you grow up in uh California
yeah a lot of pollution in the 70s lots of pollution in the 70s but you go there
today it's like this isn't anything like it was in the 70s what happened we got a lot more people today but it's a lot
cleaner what happened well we discovered how to to reduce that pollution and
dramatic reduction in pollution so now the the the shift is well how do we
still keep people afraid let's define CO2 as pollution
so now the the benchmark is we're looking at this CO2 level saying well we don't want to go up because that could
be bad for us and so we've we've once again moved from the empirical evidence
of what people do when they're faced with a challenge to these theoretical models it's a model that gives us this
fear not the evidence and uh those models drive the environmentalism
movement of wow uh we're going to have the CO2 it's going to cause collapse and
we're going to have all of these problems and the question is is that is that really empirically true if you go
back in time and look at sea levels is that really the case and deeper than
that are human beings able to innovate with these challenges yeah if the planet
gets warmer is that is that good or bad well if
you're in a cold place actually there's a lot more death due to cold than heat
so when the planet warms up you actually end up with fewer net deaths fewer net
deaths and uh you've got these other aspects i what I would just uh suggest
to people is look at the data look at the evidence and look at the models and
and ask yourself do these models really are they really uh accurate in terms of
the historical empirical evidence go back to Mus he had a model uh about the
future and wasn't it wasn't evidence-based if he had done the research and looked at what had happened
in England the hundred years prior to when he wrote his book the whole 1700s
English population's growing but the price of bread's go going down the time
price of bread's going down how that be possible what he missed in his model is this role of knowledge knowledge was
growing faster than population because people are actually these knowledge
discoverers and uh same you his predictions all modeled out you
look at the computer models and it's like oh this computer is is predicting
this collapse is going to happen it's like well the assumptions that you made when you develop the model maybe those
assumptions are not the looks right but your assumptions could be deeply flawed
which lead you to this to this result that's that's that's not going to happen
change the assumptions and that model completely changes so uh science
expertism we call it expertism you model based and that that can lead us down
these uh these paths of fearing things that really are not worth fearing and
also not being afraid or or not afraid of the things we should be afraid of
right like like uh the eastern seabboard's going to be underwater in 12 years that was that was about 20 years
ago i think that was brought up but uh so so what about free speech what how
would free speech you know we've talked a lot about freedom of market opening that up how does free speech also apply
to your work and why is that why would it be such an important element in in super abundance
well innovation requires thinking and thinking you really can't think unless
you can speak and write you really can't do that and
uh that process of being able to be free to think is is this beginning of being
able to think about a new way of doing something how could I do this a different way and that that ability that
freedom to think is key that's why Elon Musk uh one of his great contributions
to innovation was to buy Twitter to give uh a platform now that people were free
to express their opinions now you have political opinions that are expressed there but you also have this environment
where people are free to go think about things and then that that thing gets to
go to a market a free press and a free market have this relationship with each
other it really both of them are the the purpose of both of those are to discover
truth right this knowledge that has this quality of truthfulness to it and value
truth and value a political market of free speech where you're trying to
pursue what's true an economic market of of freedom uh you're trying to to
discover value both of those require that human beings have this political
and economic freedom they're tied together you really really can't have one without the other now we noticed
that in China china had all these people you know a billion people and but they
didn't have the freedom to innovate and they were given a small measure of freedom to to to innovate and suddenly
China just just escapes poverty escapes poverty now what's interesting is are
they going to be able to have free speech because that freedom of speech
ultimately is a a precursor to innovation
much of this growth in China was due to imitating what had been innovated
someplace else right so they've been they've done a job of
catching up to everybody else but are you going to be able to now innovate new things you've got to be able to have
this freedom to innovate and that's tied to this political freedom of of freedom
of speech i've got to be able to to speak being able to speak also tells me
if what I'm thinking is actually valuable or not because when I you talk
to each other it's like well you know I said something that actually doesn't make sense or you tell me it doesn't
make sense and I go "Okay well let me go back i've created something here but maybe it's not valuable i'm going to go
back and think about this deeper." If if you and I couldn't do this we would not
be able to discover what's valuable and what's not or what's true and what's not
so it's this key element in a human civilization that's really interested in
thriving we know that there's costs to do this that people will say crazy things and and so forth but are we
willing to tolerate that to be able to get the benefit it's always weighing the
costs and the benefits against you know economic thinking is really trying to
rationalize uh and and to be uh rational means to to ratio comes from the word to
scale to put things on a scale and to put the benefits against the costs the
benefits of of free speech are they greater than the costs of free speech
yeah we've got to we've got to be able to say yeah they are we're gonna put up with these voices out there that are
extreme and and say things that we don't agree with because we're willing to uh
we're willing to risk that with this idea that we're going to be able to listen to voices now that will truly be
able to to share what they've come up with that has this quality of truth to it yeah so you bring up communist China
as a closed system instead of an open system another one that is advocating for that is the Club of Rome and and
they've got an initiative here that I want to share that's called the story it's called Earth for All and this is
going exactly against what you're saying here if I read this in their opening blurb on their website it says Earth for
All is an international initiative to accelerate the systems change this is going from a free market to a closed
market by the way free speech to to govern speech that we need for an
equitable future on a finite planet so the whole assumption here of their
systems that they want to change to are based on something that is finite and and there that's obviously in their
minds we have a pie there's only so so much in it and how do we make it so that
everybody gets the same amount right of of that pie is what they're looking at it says "Our analysis combines the best
available science or I would say narrative in science with new economic
thinking we found that the next 10 years must see the fastest economic
transformation in history if we want to steer humanity
away from social and ecological catastrophe." Now this is exactly what
we have been saying here you've been going over on this they're doing the exact opposite they want Malthusianism
to dominate everything they want Thanos to be in charge thanos to be in charge what what how does this persist when
over and over again these models have been tried and to close down quite frankly
knowledge and and the sharability of knowledge to close down the markets why
do they keep persisting in this well pull up pull up my slide uh in 19
when I was a junior in high school I had to read these two books uh the
population bomb that's when I first became familiar with Erlick was in high school in 73 and the other book I had to
read was limits to growth and uh uh that was produced by the club hold on just a
second here Gail i don't know why they I can't get this back in here okay um but
I had to read these two books in in high school and uh you know I came from a family of six and it's like wow my
parents are responsible for the collapse of the planet
but they you know they've continued with the same arguments the same uh the same arguments uh yeah I notice it's the a
report uh for the club of Romes project so this was 1973 1973 incidentally was
also the year that Thanos was introduced in the Marvel comic strips so you had this kind of vibe or zeitgeist in the
early 70s of wow we're we're having all these limits and all of this uh stress
and it was this fundamental um uh pessimism that was really driven by this
uh kind of it was this irrational pessimism it really was because it
wasn't based on uh facts it was based on these these models so you fast forward
pull up your slide again the the slide the Club of Rome slide again and show that take a look at the language that
they're using there the word they've they've chosen to use in this argument
first of all Earth for all okay who's who's afraid of who's against Earth for all nobody it's international initiative
the word initiative and then accelerate that's can pause the word assist a
systems change we need for an equitable that that word equitable future on a
finite planet what does that mean we got a pizza here and we want to make sure that everybody gets the slice the same
size how how are you going to prevent how you going to do that it ultimately
comes back to this uh transformation away from this ecological catastrophe
once again uh catastrophism is this idea that that we can frighten
you into letting us have the power now to be able to to control all of the
resources on the planet because only we are able to have this this understanding
based on our models how to upgrade this system got mathematical model here it's
got an equation in it therefore it must be true mus used this argument uh Erlick
used it thanos used it he says it's simple calculus the implication is that
oh if you if you believe in math you got to believe in my model it's like well
you're conflating math with with reality uh you're using math to masquerade the
weaknesses in your assumption
so looking at all this your assertion is that more people in
free markets so you need to qualify that i think more people in free markets is
the best possible path to solving global challenges not reducing the population
correct right and I wouldn't say it's an assertion i'd say it's a conclusion it's
a conclusion based on the evidence um you we've put it on the table you know
find us something that has become less abundant over the last 20 50 years find
me something that's become less abundant and there are things that have become less abundant but those things typically
are highly influenced by government policy higher education health care uh
housing they become less abundant but you have government involved either in
the demand or the supply side that's prevented market from really operating
healthcare for example we know that cost of health care has gone up but if you look at at uh elective surgeries
cosmetic surgeries for example um um um
uh the uh implants the the tooth implant business those prices have all gone down
why is it that when you have a market for health services that prices go down versus when you have this non-market
situation where government third parties are involved that you have these prices
that go up it's this uh government interference in the market that's preventing this knowledge creation from
happening and it can it it's done uh on the supply side by uh for example
restricting uh entrance into that market licensing for example um can restrict
entry into a market which if you can reduce the entry in the market you can increase prices on the demand side why
are houses going up well if you've got a government that's subsidizing um uh mortgages if you've got a
government that's subsidizing uh or changing the parameters on what it takes
to qualify for a mortgage you're increase the demand faster than you can increase the supply the prices are going
to go up and the interesting thing about housing is both you're reducing the supply and increasing the demand at the
same time and that yield of those are going to push prices up higher and higher
so um our conclusion based on this you know everything that we've looked at is
we we should expect to be able to see greater and greater abundance going forward and um you know the great
tragedy today of course is that uh we we're just not growing people we we just
not growing population like we did and uh yes our model is really uh wealth is
a function of population uh people that are free to innovate and uh if you're
not creating people you don't have this fundamental element that's going to give
you the ability to to uh discover knowledge so we're we're very concerned about that
yeah it's an important Yeah everybody else it to me the fertility
rate the birth rate is the number one temporal issue on earth right i I just
it Yeah it's very concerning uh but it keeps going so with that let's let's
finalize things with this question looking forward for the future what do you say to young people that are
paralyzed by an echo anxiety and they're told that they're a burden
on the planet well first of all I tell them look at the facts look at the historical
empirical evidence of what we've been able to accomplish in the last hundred years really the last 200 years where we
went from flat to we did this and then the and then the second question is why
would you think that going forward uh we're going to do this what out there
do you see is going to to to reverse this trend um we've got there there's
never been a better time on on this planet to be able to be creative to have
this freedom and the tools and the time to be creative there's never been a
better time and um I it's it's uh you
know if you you you think you're a victim or there's too many people or there's not enough uh resources that's
just just factually wrong so look at the facts and then ask yourself going
forward there's never been a better time to create more life on the planet uh and
that's really also what's going to give us give you the um the greatest kind of
happiness in your life is to create life and uh so
your life is going to be better than your life's better than your parents' life and much better than your
grandparents life and your children's life and their children's life is also going to be much better if you if you
can think in in abundance not scarcity and if you can
think in knowledge and not atoms and if you can think in time and not money
you'll be able to to be able to see your way forward with this perspective well it's it's fascinating this touches
on so many different things and and honestly it goes you can also take this to a spiritual realm and and look at
look at things with these same principles and apply them to spiritual principles as well you've uh written an
article recently for us at our Substack at Alive and Intelligent uh which is very interesting goes over
these principles and of course if I can put this up here you've got your book here super abundance uh written with
Marian El Tupi by Gail Gail El Pulley as well fascinating read I'm going to put
this link in the description box so that everybody can go grab this book it's one of the books I keep on my shelf here so
Gail really appreciate your time very interesting thing we'd love to have you back sometime
okay thanks thanks Greg