Founders - #342 The Lessons of History (Will & Ariel Durant)

Starting point is 00:00:00 Since man is a moment in time, a transient guest of the earth, a spore of his species, a scion of his race, a composite of body, character, and mind, a member of a family and a community, a believer or doubter of a faith, a unit in an economy, perhaps a citizen in a state or a soldier in an army, We may ask, under the corresponding heads, astronomy, geology, geography, biology, biography, ethnology, psychology, morality, religion, economics, politics, and war, what history has to say about the nature, conduct, and prospects of man. It is a precarious enterprise, and only a fool would try to compress a hundred centuries into a hundred pages

Starting point is 00:00:51 of hazardous conclusions. Yet we proceed. That was an excerpt in one of my favorite paragraphs in the first chapter of the book that I'm going to talk to you about today, which is The Lessons of History by Will and Ariel Durant. You and I normally get together and speak about a biography of a person. The way to think about the book that I'm holding my hand is, this is a 100-page biography on the human species. And I can't

Starting point is 00:01:14 think of more qualified authors to write something like this than Will and Ariel Durant, because they spent 40 years, from 1935 to 1975, writing this 11-volume set called The Story of Civilization. If you read a bunch of biographies of entrepreneurs, Will and Ariel Durant's The Story of Civilization will pop up over and over again in their biographies because these entrepreneurs are reading it. People like Larry Ellison and Elon Musk come to mind. And part of what makes this book so special is they wrote the lesson of history after they finished The Story of Civilization. So you could think of this as like a 100-page synopsis or summary of their 40 year, that four decade long journey in trying to catalog the human existence. And so let's jump right in. The first lesson of history is to be modest. Let us define history as the

Starting point is 00:01:56 events or records of the past. Human history is a brief spot in space and its first lesson is modesty. At any moment, a comet may come too close to the earth and set our little globe turning And then this line hits you right in the chest. They have a bunch of lines like this throughout the book. And so I've read and reread this book three, four times, not including the times I listened to it on Audible as well. And so I have a bunch of notes from the last time I read it. But what came to mind this time, when I read that sentence, I thought about what Charlie Munger said, that what you and I are doing here is when we're reading biographies of great people, we're becoming friends with the eminent dead. And because most of the people that I read about are dead, when I get to the end of the book,

Starting point is 00:03:01 I'm not just getting to the end of the book. I'm getting to the end of somebody's life. So I am constantly, and you are, as a byproduct of listening, you are constantly reminded of the finiteness of life. That generations of men establish a growing mastery over the earth, but they are destined to become fossils in its soil. So what I think about this is it's ruthless. It forces ruthless prioritization about how I'm spending my time and what I choose to focus on. And it comes down to three Fs for me, founders, family, and friends. That's all I'm focused on. Everything else has to round to zero. That is one of the main benefits of this

Starting point is 00:03:37 relentless pursuit of studying history. You understand that you are destined to become fossils in its soil. The last time I read the book, when I got to this part, this is what I wrote. It reminds me of why Nolan Bushnell said he was Steve Jobs' mentor. He said Steve Jobs only had one speed, go. And he said that about a 19-year-old Steve Jobs. Steve Jobs did not know how limited his time on earth would be, right? And so he says, you don't get much time, don't waste it, go. Ruthless prioritization of how we spend our time is, I think, super important. Now, there's going to be a bunch of just, they're obviously incredible writers, and they have the ability to distill an entire story into one sentence. And a few pages later, I love this. The influence of geographic factors diminishes as technology grows. So they are

Starting point is 00:04:24 speaking about the entire sweep of human history as time goes forward, right? The influence of geographic factors diminishes as technology grows. The book that I'm holding in my hand was written in 1968. And yet that line is even more true today. The influence of geographic factors diminishes as technology grows. Go back to when you and I studied Napoleon. He spends an unbelievable amount of time talking about physical barriers. Physical barriers of moving an army somewhere from one place to another. This is what you do when you come into a river. This is what happens how you handle mountains. Napoleon died in 1821. The airplane was not invented yet. So the influence of geographic factors diminishes as technology grows. So I was thinking about the life of Will Durant specifically,

Starting point is 00:05:06 because he started, he wrote like the first half of the story of civilization alone, and then his wife joins for the second half. And so I looked up when he was alive and I was like, okay, he was born in 1885 and he dies in 1981. And a huge theme of this book is the influence of technology and the tools that we invent on the human species. And so I went to chat GPT and I asked, I was like, okay, can you give me a list of significant technological advancements that were created between the periods of 1885 and 1981? Listen to what was invented in the life of Will Durant. So you have the invention of the first automobile, the invention of the first camera that makes photography accessible to the masses.

Starting point is 00:06:05 The invention of radio, of the powered airplane, of penicillin, of the atomic bomb, of the transistor, of the solar cell, the integrated circuit, the ARPANET, which of course is the precursor to the internet, the microprocessor, the mobile phone, the personal computer, and finally the Walkman, which was invented in 1979, and then Will dies two years later. That is an incredible amount of technological progress in one lifetime. And that continues to accelerate today. Like even the technology I used to produce that list and to help me with the research of this episode. If you're not already using these AI systems like ChatGPT, it is remarkable. I use it multiple, multiple times a day. In fact, I built my own, which indexes all my notes, all my highlights, all my transcripts, every single word I've ever uttered on the entire podcast the last eight years. I've been testing it for a few weeks. It should be available to all founders, no subscribers, I would say in the next week or two. But let me give you an example. I was just on the phone. I'm going to be speaking at an event with,

Starting point is 00:06:41 I can't tell you who the company is, but it's one of the largest asset managers in the world. They have over $2 trillion of asset center management. And while we were on the phone, they wanted me to talk about leadership lessons from history's greatest entrepreneurs. So I just asked founders notes. Again, this feature that I used while I was on the phone is not available to you yet, but it should be in a few weeks. And within 20 seconds, it gives me a list and a summary of ideas on leadership from Ted Turner, Charlie Munger, Barnett Helzberg. Barnett Helzberg is the guy that sold his family business to Warren Buffett. And the list continues. James Dyson, David Ogilvie, the founder of Trader Joe's,

Starting point is 00:07:15 Alibaba. I haven't done a podcast on Jack Ma in like seven years. Warren Buffett, Jim Collins. I've never done a podcast on Jim Collins, but I mentioned something he said about leadership in an episode that I did like five years ago. Jeff Bezos, Henry Ford, and Steve Jobs. And so all that comes to mind from one simple sentence, because the influence of geographic factors diminishes as technology grows. What the impact, what's fascinating to think about that is the influence of what else besides geographic factors, right? What other factors are going to diminish as technology grows? And so moving on, the next chapter is about biology and its effect on history. This is really a lot about on competition, selection. There's just a lot of ideas that pop to mind. Really,

Starting point is 00:07:54 the main theme of what I'm about to read to you is our job is to make our companies and ourselves better equipped to meet the test of survival. And so they're going to draw some lessons from history about that for you and I. The laws of biology are the fundamental lessons of history. We are subject to the processes and trials of evolution, to the struggle for existence and the survival of the fittest to survive. So the first biological lesson of history is that life is competition. Competition is not only the life of trade, it is the trade of life. They're just fantastic. This is what makes such a great communicator. It's not only that they're able to explain something, take something complex and make it simple,

Starting point is 00:08:36 but they put ideas, whatever they want you to understand from their brain to yours, it goes right in. Competition is not only the life of trade, it's the trade of life. It is peaceful when food abounds and violent when the mouths outrun the food. Animals eat one another without qualm. Civilized men consume one another by due process of law. Cooperation is real and increases with social development, but mostly because it is a tool and form of competition. We cooperate in our group, our family, community, company. He didn't write company, but I'm putting it in there. Our family, community, company, club, church, party, race, nation, in order to strengthen our group in its competition with other groups. So it's impossible for an entrepreneur to read that sentence, right? He's not talking about entrepreneurship and not

Starting point is 00:09:22 think of company building. That is the group that we operate in the most. That is the group that you and I think about the most. We are acquisitive, greedy, and pugnacious. He's talking about the human species, right? Remember, let's go back to the very beginning. I don't even think I elaborated on why I love that paragraph from the first chapter or from the introduction. It is a precarious enterprise, and only a fool would try to compress a hundred centuries into a hundred pages. That's exactly what they're doing. They're trying to compress. In a hundred centuries of observation, what are we? And what can history tell us about our nature, right? We are acquisitive, greedy, and pugnacious because our blood remembers millennium

Starting point is 00:09:59 through which our forebears had to chase and fight and kill in order to survive and had to eat to their gastric capacity for fear they soon should not capture another feast. War, which he's going to talk about a lot. War is a nation's way of eating. What a sentence. Hopefully by the end of this, if you don't already have the book, I'm going to convince you to buy a copy of the book. And if you have Audible, I'm pretty sure I have a subscription to Audible. I don't remember buying the audio book, but I have access. There's a version of the Lessons of History where you actually hear commentary from Will and Ariel Duran. And I'm pretty sure it's included in every single Audible subscription. War is a nation's way of eating. It promotes cooperation because it is the ultimate form of competition. The second biological lesson

Starting point is 00:10:43 of history is that life is selection. So the first biological lesson of history is that life is selection. So the first biological lesson of history is that life is competition. The second lesson of history is that life is selection. In the competition for food, our mates, our power, our customers, again, I'm going to throw in some company things here, okay? Our power. Some organisms succeed and some fail. In the struggle for existence, some companies succeed, some fail. In the struggle for existence, some companies succeed, some fail. In the struggle for existence, some individuals are better equipped than others to meet the test of survival. That is when I start double underlining. That is when I start adding all these exclamation points. In the struggle for existence, some companies are better

Starting point is 00:11:21 equipped than others to meet the test of survival. Our job is to make sure that our companies and ourselves are better equipped to meet the test of survival. A few pages later, it's all about differentiation produces unequal value. Come on. This is like screaming to you and I on how to build a valuable company. So let's go right to the book. Inequality is not only natural and inborn, it grows with the complexity of civilization. Again, words were written in 1968. Undoubtedly, our civilization is a lot more complex today than it was then. Inequality is not only natural and inborn, it grows with the complexity of

Starting point is 00:11:56 civilization. Economic development specializes functions. It differentiates abilities and makes men unequally valuable to their group. The note I left myself, I read this book a couple of years ago. I should read it every year. I should remember to read it every year because you read it in the weekend. Differentiation produces unequal value. Learn and optimize for this. So the heavily, there's a founder named Naval Ravikant. He's the founder of AngelList. I covered the book that my friend Eric Jorgensen wrote with Naval all the way back in episode 191. If you haven't listened to it, I highly recommend you listen to that episode after this one and then read the book, of course. The book is available for free online, but my friend Eric told me, even though

Starting point is 00:12:37 you can read the book for free online, they sold over a million copies of that book. And it's only been out for a few years. But Naval has a great way to describe exactly what Will and Ariel Duran are saying here. Economic development specializes functions, differentiates ability, and makes men unequally valuable to their group. Remember, the more complex a civilization gets, the more you'll see inequality, so economic inequality, right? So the way Naval has had influence on my thinking about this is he says something like, we living in the age of infinite leverage. And in the age of infinite leverage, it is more important to be at the extreme of your craft or the extreme of your work. Why? Because the person that is the best in the world at what they do gets to do it for everyone. In the age of infinite leverage, we should see this idea that economic development specializes functions, differentiates ability, and makes men unequally valuable to their group. We should see that only continue to expand and become more important. That's why a few years ago, I wrote to my own self, learn and optimize for this. That also ties to what I told you earlier

Starting point is 00:13:40 about this reminder from history that our time is finite. That is why it's founders, family, friends. The opportunity cost is too high to waste. Not only is my time is limited, but I'm heavily incentivized to become the best in the world at what I do because economic development specializes functions, differentiabilities, and makes men unequally valuable to their group. Back to this. For freedom and equality are sworn and everlasting enemies. And when one prevails, the other dies. If you leave men free and their natural inequalities will multiply almost geometrically, leave men free and their natural inequalities will multiply almost geometrically. Only the man who is below

Starting point is 00:14:16 average in economic ability desires equality. Those who are conscious of superior ability desire freedom. And in the end, superior ability has its way. And in the end, superior ability has its way. Talent is the best asset class. Utopias of equality are biologically doomed. That sentence particularly hits me right in the heart. Utopias of equality are biologically doomed. I am the son of a Cuban immigrant. I grew up meeting people that put their children on rafts and sent them 90 miles across shark infested waters to flee communism. Since I was a child, I met people that did this. And then I remember getting older and actually running into people that think communism is a good idea. I'm sweating thinking about this. And I used to even getting these debates. Now I'm just like, whatever, you can believe whatever you want. But I think the key here is it's very simple. OK, how many people have put their children on rafts and hope that they make it across

Starting point is 00:15:17 90 miles of shark infested waters to flee free market capitalism? Do you see a line that go down to Key West or Miami Beach and put their American kids on rafts and hope that they make it to Cuba? And the crazy thing is if you just study history, you understand that of course that's not going to work. Utopians of equality are biologically doomed. And so look at the difference in growth between Cuba and America in this next sentence. A society in which all potential abilities are allowed to develop and function will have a survival advantage. So let's move on to character and history.

Starting point is 00:15:50 I'm telling you, my palms are sweaty right now. All right, let's move on to character and history. Human nature does not change. This part is just so, so good. We talk about it over and over again. History doesn't repeat. Human nature does. History shows little alteration

Starting point is 00:16:04 in the conduct of mankind. The Greeks of Plato's time behaved very much like the French of modern centuries, and the Romans behaved like the English. Means and instrumentalities change, motives and ends remain the same. To act or rest, to acquire or give, to fight or retreat, to seek association or privacy, to mate or to reject, to offer or resent parental care. Nor does human nature alter as between classes.

Starting point is 00:16:34 This is another double underlined sentence here. Nor does human nature alter between classes. By and large, the poor have the same impulses as the rich with only less opportunity or skill to implement them. That's obvious in history. That's also obvious in fiction. If you've ever read the book Animal Farm, they just gave you one sentence summary in there. The adoption by successful rebels of the methods they were accustomed to condemn and the forces they deposed. New situations, however, do arise, requiring novel, unstereotyped responses, hence development. And this development requires a capacity for experimentation and innovation. Here, the initiative individual,

Starting point is 00:17:26 so this applies to you and I because this is what we study, right? He's going to call it the initiative individual. The great man, the hero, the genius regains his place as a formative force in history. He grows out of his time. He's talking about the fact that the reappearance of these kinds of personalities are entirely predictable and usually what environment is required for them to appear. He grows out of his time and land and is the product and symbol of events as well as their agent and voice. Without some situation requiring a new response, his new ideas would be untimely and impractical. I would pause right there. I would really think of Churchill in this case, right? If there wasn't his whole life, you know, I've done multiple part series on Churchill, covered him when he was a young kid, covered him when he was an old man and

Starting point is 00:18:11 everything in between. And the whole thing was he believed in his destiny. He was just waiting for the right time. And yet, if it wasn't for the invasion of Britain by Hitler and the Nazis, we are likely not speaking about Churchill today, even though he'd be the same person. When he is a hero of action, right, you need some situation requiring a new response. So Churchill needed that response. The invasion, really, World War II in its entirety. So you need some situation requiring a new response. His new ideas would be untimely and impractical. When he is a hero of action, the demands of his position and the exhaustion of crisis develop and inflate him to such magnitude and powers as would in normal times have remained potential untapped. And just listen to this writing. Events take place through

Starting point is 00:18:59 him as well as around him. His ideas and decisions enter vitally into the course of history. Oh, that's hilarious. I was thinking about Churchill and I forgot that they were going to mention him here. At times, his eloquence, like Churchill's, may be worth a thousand regiments. His foresight and strategy and tactics, like Napoleon's, may win battles and campaigns and establish states. And then this is just what a sentence, what a sentence. The imitating majority follows the innovating minority. And this follows the original individual in adapting new responses to the demands of environmental survival. And then they go into detail on why time-tested ideas are usually more valuable than new ideas,

Starting point is 00:19:45 but that is not always the case. Out of every hundred new ideas, 99 or more will probably be inferior to the traditional responses which they propose to replace. No one man, however brilliant or well-informed, can come in one lifetime to such fullness of understanding as to safely judge and dismiss the customs or institutions of his society. For these are the wisdom of generations after centuries of experiment in the laboratory of history. And then there's just a few lines in the chapter on morals and history and the weird thoughts that come to mind when I read stuff like

Starting point is 00:20:23 this. I guess let me just jump right to the point, what I wrote myself. If you can identify an enduring human need, you can build a business around that. And I'm not casting judgment on what any businesses that other people build, but you see that there's businesses around us that will endure no matter what, some legal, some not, right? And so it says, sin has flourished in every age. Men and women have gambled in every age. I think that line is particularly interesting right now because you just see the change in regulations and laws and these really gigantic businesses built around gambling. And I have friends that ask me, like, why don't you bet on sports? And I just quote Ed Thorpe. I was like, I don't invest anywhere. We don't have an edge. The only place I have an edge is in my actual

Starting point is 00:21:03 business. And it's actually surprised me recently, like how prevalent and just giant, like big these businesses get. And it shouldn't have surprised me though, because I had read this book. I had previously underlined this line, men and women have gambled in every age. I just forgot it. And then this next sentence, I think everybody will agree with, is my favorite sentence in this entire section. In every age, men have been dishonest and governments have been corrupt. In every age of human history. What does that tell you? Governments have been corrupt.

Starting point is 00:21:32 Men have been dishonest and governments have been corrupt. But I think the top level lesson or the meta lesson around that is identifying an enduring human need and building a business around that. And then one enduring and repeating need of the human species has an entire chapter based on it. It is religion and history. It says, even the skeptical historian develops a humble respect for religion since he sees it functioning and seemingly indispensable in every land and in every age to the unhappy, the suffering, the bereaved, the old. It has brought supernatural comforts valued by millions of souls as more precious than any natural aid.

Starting point is 00:22:12 And I just spent three days this past week with 150 very inspiring and ambitious and successful entrepreneurs that listened to this podcast. And this is something that actually came up. I wish I, we didn't record anything on purpose. I want these events to be very special. And it like you have to be there and a lot and when you're not recording people tend to speak you know more honestly and and more freely and something that came up where i was like man i would i wish i had recorded myself saying this was i actually

Starting point is 00:22:37 think there's a lot that companies can learn uh by studying religions because religions if you think about what what will and a Ari Durand are saying here, they've lasted longer than companies do. They last longer than countries do. And the reason this came to mind is because somebody once, one time, described Founders Podcast as church for entrepreneurs. And I think there's a lot of lessons here for you as you're leading your company because my friend Patrick from Invest Like the Best,

Starting point is 00:23:01 I always say repetition is persuasive. He put it maybe even better. He says that repetition does not spoil the prayer. And I think one of the main lessons that entrepreneurs and company builders can learn from religions is if you think about all the major religions in the world, right? Usually based on some kind of book. I grew up Christian, so I'll just use that as an example. You know, we don't read the Bible once and then be like, all right, I got it.

Starting point is 00:23:20 We're good. No, we revisit it. We go back to it. Then we gather, right? We repeat lessons from it over and over and to it. Then we gather, right? We repeat lessons from it over and over and over again. Repetition is persuasive. Repetition does not spoil the prayer. We gather at specific intervals, you know, every Wednesday or every Sunday or whatever, you know, whatever time in your religion, religions have different days of the week or time

Starting point is 00:23:39 periods, but you'll see them consistently. They gather together. Sometimes it's every day. And they gather together with people that believe in the same thing that they do. And they repeat the lessons that they agree upon and they want to guide their actions and guide like their path in life. That is very similar. Like if you go back and read any of the shareholders, like the example I used a couple of days ago was Jeff Bezos. There's ideas and phrases and mindsets that are in his very first shareholder in 97 that are in his last one 20 years later. And you see this over and over again, these biographies of entrepreneurs. They repeat the same lessons decade after decade after decade, the same way that the religions do. And then they go back to the importance that history optimizes for

Starting point is 00:24:26 survival. History remains, at bottom, a natural selection of the fittest individuals, the fittest companies, and groups in a struggle wherein goodness receives no favors, misfortunes abound, and the final test is the ability to survive. Nature and history do not agree with our conceptions of good and bad. They define good as that which survives and bad as that which goes under. Now, it's insane, really like remarkable, I guess is a better word than insane, how much of this book is about the importance of survival, right? Nature and history do not agree with our conceptions of good and bad. They define good as that which survives and bad as which goes under. How many times do you and I talk about and repeat the quotes and the ideas of history's greatest

Starting point is 00:25:12 founders on the importance of survival? One of my favorite lines on this actually came from Steve Jobs. He says, victory in our industry is spelled survival. Victory in our industry is spelled survival. A few years ago, I read a 700 page biography on Charles de Gaulle and everybody around him, Churchill, FDR, they just could not understand why the guy just refused to quit. And you could almost summarize his entire philosophy around, you know, fighting Hitler and making sure that France remains free, to his fantastic quote. He says, all that matters is to survive. The rest is just words. In a more business context, think about if you read Warren Buffett's shareholder letters. I think this is episode 227, Warren Buffett's essays, which is Warren's shareholder letters, but organized instead of by year, it's organized by

Starting point is 00:25:59 topic, which is excellent. And he talks about that they play offense while others scramble for survival. Let me read from his shareholder letters. I think this was, this is after 2008. I don't have the exact year, but I'm going to read this to you. And really the, again, the reason I'm bringing this up is because a strong financial foundation is what allows you to survive, right? To not ever take risks of, you know, I'm going to risk the remote chance that my business goes out, that my company goes under, my business dies to, you know, make a little bit of extra money. Warren and Charlie would smack you in the face if you did that. So Warren says, by being so cautious in respect to leverage, we penalize our returns by a minor amount.

Starting point is 00:26:39 Having loads of liquidity, loads of cash, right? Having loads of cash lets us sleep well. Moreover, during the episodes of financial chaos that occasionally erupt in our economy, we will be equipped both financially and emotionally to play offense while others scramble for survival. What a line. We play offense while others scramble for survival. That's what allowed us to invest $15.6 billion in 25 days of panic following the Lehman bankruptcy in 2008. They invested $15.6 billion in 25 days of panic. And so what does this all have to do with religion? This is really a one-sentence summary, which again, Will and Ariel Durant are gifted at.

Starting point is 00:27:20 One lesson of history is that religion has many lives and a habit of resurrection. In other words, religion survives throughout history. All right, now we got into economics, and the lessons are even more obvious for you and I. History reports that men who can manage men manage the men who can manage only things, and the men who can manage money manage all. So think about that. This is a note I left myself that I think is a good summary of that. The strong rule the weak, the wise rule the strong, and incentives rule all. And it goes into the fact that history is inflationary. So the bankers watching the trends in agricultural history, trade, inviting and directing the

Starting point is 00:28:02 flow of capital, putting our money doubly to work, controlling loans and interest in enterprise, running great risks to make great gains, rise to the top of the economic period. And this is, you know, if you read that sentence now, you're like, yeah, it's obvious. Like, look at, I read, this is many, many years ago, financial services was something like 8% of GDP by size, but like 40% by profit. I forgot what the exact stat was, but that's how I remember it. And we think, oh, this is like unique to our time. And then he goes back and he's like, well, this isn't unique to your time. He's describing the Medicis, the Fugers.

Starting point is 00:28:35 I've done a bunch of podcasts. I did a podcast on Jacob Fuger. If you just search in your podcast player, it's the richest, I think it says like the richest man in history. The Rothschild did two episodes, two or three episodes on them. The Morgans. And so over and over again, these are the people that rise to the top of the economic pyramid. They're not the only ones, obviously the company builders too. Perhaps it is one secret of their power that having studied the fluctuations of prices, they know that history is inflationary and that money is the last thing

Starting point is 00:29:02 a wise man would hoard. The experience of the past leaves little doubt that every economic system must sooner or later rely upon some form of a profit motive to stir individuals and groups to productivity. And then they reintroduce something they introduced earlier, the fact that humans are inherently unequal. The more complex, the more technologically advanced a society gets, the more you're going to see the differences in this human ability expand. Since practical ability differs from person to person, the majority of such abilities is gathered in the minority of men. The concentration of wealth is a natural result of this concentration of ability and regularly recurs in history. The rate of concentration varies with the economic freedom permitted. Deputism may for a time retard the concentration. Democracy, allowing the most liberty,

Starting point is 00:29:54 accelerates it. And so even though this reappears over and over again, it does need alleviation. Really, concentration of wealth does not seem to be tenable. We conclude that the concentration of wealth is natural and inevitable and is periodically alleviated by violent or peaceable partial redistribution. In this view, all economic history is the slow heartbeat of the social organism. I like that they use the heartbeat metaphor there. And so what is interesting is right after the chapter in economics, they talk about government. And if we just went through, hey, you know, usually the most prosperous is when you have freedom, people are connecting their own interests, their incentives are more aligned than if you have the centrally controlled system. But yet, if you study human history, essentially every single government is going to default into an oligarchy. I didn't even say that word correctly.

Starting point is 00:30:46 Oligarchy is what I meant to say. So this is fascinating. If we were to judge forms of government from their prevalence and duration in history, we should have to give the palm to monarchy. Democracies, by contrast, have been hectic interludes. So what are they saying? Monarchy is the longest lasting and most common form of government in history. Democracies, by contrast, have been hectic interludes. So what are they saying? Monarchy is the longest lasting and most common form of government in history. Democracies, by contrast, have been hectic interludes. Now, there is a statement or a reoccurring theme in history called the iron law of oligarchy.

Starting point is 00:31:16 And they go into detail about that here. And it has to do with this inherent difference in the abilities of human beings. Most governments have been oligarchies ruled by a minority, chosen either by birth or by a religious organization or by wealth. It is unnatural for a majority to rule, for a majority can seldom be organized and united into specific action, and a minority can. If the majority of abilities is contained in a minority of men, minority government is as inevitable as the concentration of wealth. See how they tied everything they've been, like the past few themes together there? If the majority of abilities is contained in a minority of men, minority government is as inevitable as the concentration of wealth.

Starting point is 00:31:54 The majority can do no more than periodically throw out one minority and set up another. And so the summary there is the iron law of oligarchy. And so a few pages later, it goes back to this idea that you and I keep talking about. This is why you should spend so much of your time learning and practicing so you can be better at your craft. Every advance in the complexity of the economy puts an added premium upon superior ability. Every advance in the complexity of the economy puts an added premium upon superior ability. And so a lot earlier in the book, we went over the fact that in the biology and history chapter, that war is a nation's way of eating.

Starting point is 00:32:32 It promotes cooperation because it's the ultimate form of competition and that the first biological lesson of history is that life is competition. And so this next sentence, although provocative, will not be surprising. War is one of the constants of history and has not diminished with civilization or democracy. In the last 3,421 years of recorded history, only 268 have seen no war. War or competition is the father of all things, the potent source of ideas, inventions, institutions, and states. And that idea that war, I've done a couple podcasts on this, that war is a potent source of ideas. When it is literally life and death, you will see human ingen many, many years ago on the partnership between J. Robert Oppenheimer and General Leslie Grove. But there's actually an excellent book that speaks about this heroic effort for the United States Industrial Complex to turn on a dime in World War II and go from manufacturing things for consumers to manufacturing things to help the allies in the war. It's called Freedom's Forge. I read it. I

Starting point is 00:33:45 did a podcast on it a long time ago. I think I deleted the podcast. I can't find it. But I'm going to reread that book because I think it's fascinating. It's on ingenuity and really leadership and how large groups of people can get things done incredibly fast, I think is the main lesson. The same causes of war are the same as the causes of competition among individuals. Acquisitiveness, pugnacity, and pride, the desire for food, land, materials, fuels, and mastery. War is the final arbiter. A nation must be ready, just like a company must be ready, at any moment to defend itself. And when its essential interests are involved, it must be allowed to use any means it considers necessary to its survival. So, you know, this goes on for many pages and really you can, again, another one sentence

Starting point is 00:34:30 summary, whether the lesson that he derived through studying a hundred centuries of human history, the 10 commandments must be silent when self-preservation is at stake. Man is a competitive animal and his states must be like himself. And then if you have the book, I think you're especially going to be interested in the growth and decay chapter. They're talking about civilizations. I think with you and I, obviously, the lessons for companies jumps off the page. This is really why there's always more opportunity. There's always room for a new company, a new startup, because on one point, we are all agreed civilizations begin, flourish, decline, and disappear.

Starting point is 00:35:12 Companies begin, flourish, decline, and disappear. So what determines if this challenge will be met? If we put the problem further back and ask what determines whether a challenge will or will not be met, the answer is that this depends upon the presence of creative individuals, what you and I call founders, right? Of creative individuals with clarity of mind and energy of will, capable of effective responses to new situations. Again, they're talking about civilizations, so they're talking about all kinds of things. It holds precisely true with founders of companies too. Will this new challenge be met? Well, the answer is that this depends upon the presence of a creative individual with clarity of mind and

Starting point is 00:35:53 energy of will, capable of effective responses to new situations. And so we see not only the death of individuals, but the death of entire civilizations. And they're like, well, it's just depressing. And really this is on ideas being immortal. Whether in individuals or in states, death is natural. And if it comes in due time, it is forgivable and useful. And the mature mind will take no offense from its coming. But do civilizations die? Again, not quite. Greek civilization is not really dead. Only its frame is gone and its habitat has changed. It survives in the memory and in such abundance that no one life, however full and long, could absorb it all. And this is a great, again, they do a great job of summarizing in one sentence

Starting point is 00:36:36 what they mean. Homer has more readers now than in his own day and land. The Greek poets and philosophers are in every library and college. At this moment, Plato is being studied by a hundred thousand discoverers of the dear delight of philosophy, overspreading life with understanding thought, meaning that a hundred thousand people discovering Plato for the very first time right now. This selective survival of creative minds is the most real and beneficiary of immortality. Going back to this, if you can find an enduring need, you can build a business around that. All technological advances will have to be written off as merely new means of achieving old

Starting point is 00:37:18 ends. We are driven by the same desires, the same proclivities. We just find different ways to satisfy them. Now we get into the mind of humansivities. We just find different ways to satisfy them. Now we get into the mind of humans. You and I do this. I do this. I'm sure you do too. Our capacity for fretting is endless. And no matter how many difficulties we surmount, how many ideals we realize, we shall always find an excuse for being magnificently miserable. The study of history allows you to stand outside yourself and realize, hey, these feelings, what I'm going through, what I desire, the things I love, the things that bring joy, the things that bring sadness, they are not unique to me. I think it's so important to get control of our minds because we have this one shot. I love what D. Hawk said, the founder of

Starting point is 00:38:00 ESA, when he said, life is a magnificent, mysterious odyssey to be experienced. We do not want our minds to make this one magnificent odyssey miserable. We must control our capacity for fretting, since we know in nature, in human nature, it is endless. And then as expected, they find the perfect way to end a book on the lessons of history. Some precious achievements have survived all the vicissitudes of rising and falling states, the making of fire and light, of the wheel and other basic tools, language, writing, art, and song,

Starting point is 00:38:33 agriculture, the family, social organization, morality, and charity, and the use of teaching to transmit the lore of the family and the human race. That's exactly what's happening now. We're reading words of somebody that's no longer with us, who's been dead for almost 50 years. These are the elements of civilization,

Starting point is 00:38:51 and they have been tenaciously maintained through the perilous passage from one civilization to the next. They are the connective tissue of human history. If education is the transmission of civilization, we are unquestionably progressing. Civilization is not inherited. It has to be learned and earned by each generation anew. If the transmissions should be interrupted for one century, civilization would die and we should be savages again.

Starting point is 00:39:20 If progress is real, it is not because we are born any better or wiser than infants were in the past, but because we are born to a richer heritage, born on a higher level of that pedestal, which the accumulation of knowledge raises as the ground and support of our being. The heritage rises and man rises in proportion as he receives it. To those of us who study history, not merely as a warning and a reminder of man's follies and crimes, but also as an encouraging remembrance of generative souls, the past ceases to be a depressing chamber of horrors. It becomes a celestial city, a spacious country of the mind wherein thousands saints, statesmen, inventors, scientists, poets, artists, musicians, lovers, and philosophers will still live and speak,

Starting point is 00:40:15 teach and carve and sing. The historian will not mourn because he can see no meaning in human existence except that which man puts into it. Let it be our pride that we ourselves may put meaning into our lives and sometimes a significance that transcends death. If a man is fortunate, he will, before he dies, gather up as much as he can of his civilized heritage and transmit it to his children. And to his final breath, he will be That is incredible. Will and Ariel Durant can write, they can teach, and they can inspire. For the full story, highly, highly, highly recommend getting the book. If you buy the book using the link that's in the show

Starting point is 00:41:10 notes in your podcast player, you'll be supporting the podcast at the same time. That is 342 books down, 1,000 to go, and I'll talk to you again soon. Okay, so just one quick update for you before you go. So this feature that I mentioned in this episode, where I was on the phone with one of the world's largest asset managers, and within 20 seconds, I had an overview going back, you know, eight years of how some of history's greatest entrepreneurs thought about leadership. I've talked about that I'm constantly updating. Well, first of all, for founders notes, you you know, every week I'm adding more notes and highlights.

Starting point is 00:41:47 So what's been taking place lately is a lot of people have asked for an ability to have like a one-time payment option for Founders Notes, where that means not only if you sign up now, you get access to every single highlight and note that I've ever done for the podcast, but you'll get access to every single highlight and note I ever ever done for the podcast, but you'll get access to every single highlight and note I ever will do for the podcast, which I think is a crazy value. But also, you get all the new features that I add for free. And essentially, what I'm building, what I'm externalizing to the world is, this is my own internal tool to keep track of every single thing that I'm learning on this crazy journey to try to really document,

Starting point is 00:42:25 really condense and clarify the collective knowledge of history's greatest entrepreneurs. So I've said over the past few weeks, if you've been listening to these past episodes, that I've been doing, using this, it's like an AI assistant. It's trained on all, every single transcript. So every single word I've ever uttered on the podcast, all of my notes, all of my highlights. And I have over 20,000 notes and highlights in this notebook that I've been adding through this app called Readwise since 2018. Right. And so Readwise is who I've partnered with to start building founders notes. And we've been working on it, you know, maybe for half a year or something like that so far. But the more I use the AI assistant, it becomes the feature that

Starting point is 00:43:03 I use the most. And I'm sitting here thinking, I don't know what the hell to call this thing. It's not Founders GPT. That's not good. I was like, is that a chat? Well, I don't chat with it. I ask it questions, but it's not a conversation. And so just some of the questions that I've been asking or other users have been asking,

Starting point is 00:43:27 sending it to me because I've been asking people, like, hey, when you asked whatever, I'm going to call this thing, we're calling it chat right now, but that's not going to be the name. That's like, whenever you ask chat, something that you find is interesting, you like the answer, send it back to me. Because what I'm going to do is crowdsource the best questions and answers. And eventually, you won't even have to search. I mean, you can, you always be able to search. But eventually, I'm just going to have like a library of, you know, the top 100, top 200 questions and answers. It's like this really targeted curriculum for entrepreneurs. So I've been asking stuff like, I need some unique ideas on how to find new customers. What advice do you have for me? What is the best way to fire a bad employee? How did Andrew Carnegie know what to focus on? How did Edwin Land find new employees

Starting point is 00:43:57 to hire? Did he find any unusual sources to find talent? Can you give me a summary of Warren Buffett's best ideas? What are the most important leadership lessons from history's greatest entrepreneurs? It just goes on and on and on. And so when you ask this AI assistant these questions, it goes and searches. I mean, it does this relatively fast, although I want to make it even faster. So it goes and searches every single transcript, every single note, every single highlight. And you have to keep in mind, you know, I would say, I don't know. I don't know the percentage, but 70% of my notes and highlights are never even make it into the podcast. And so it searches all this and then it grabs and essentially makes a summary of

Starting point is 00:44:29 all these different ideas. And so it's like, oh, it's not a chat. It's like a synthesizer because the definition of synthesize is to make something by combining different things. And so a few existing subscribers have emailed me asking, hey, can I test this? I was calling a super search for a while. This new feature that I can't come up with a name of, right? I was like, maybe it's Founders Chat. Maybe it's Founders GPT. Maybe it's Super Search. Maybe it's Synthesizer. And I was emailing back and forth with one of them who's testing this out for me. And he's like, oh, it doesn't do, these names don't do it justice to what you're actually creating. And he suggested that you should call it sage.

Starting point is 00:45:10 And it was fascinating because then he listed the why he thought that he defined the word sage. So there's two main definitions. One's a noun and one's an adjective. The first one is a profoundly wise person. I'm reading this. I'll tell you what popped immediately to mind. And it's not going to surprise you if you listen to a bunch of these podcasts. I think of Charlie Munger. I think of him as my like personal sage. I think he's the wisest person I've ever come across. And so it says a profoundly wise person. This refers to someone with a deep understanding of life, accumulated knowledge and sound judgment. That is every single person that you and I have covered on the podcast. So the reason I think this tool is going to be the one I use all the time, why I think it's super powerful. I've been telling you for a while, hey, don't sign up

Starting point is 00:45:44 for founders notes. It is made for people already existing like successful companies, successful careers. That is still true. I think Sage brings it to a different level in the sense that, you see how I'm already referring it to Sage. I said I was going to sleep on this, and I still could change the name, but I think this is it. Because if you listen, look at the definition. But I'll get back to them in one second. But what I really think is like, oh no, it's going to be for, if you're going to invest,

Starting point is 00:46:16 and many people invest hundreds of hours, even if you're listening to Founders Podcast, this tool just makes perfect sense because it is the accumulated knowledge of everything that you've ever heard on the podcast. And in some cases, there's no way you're going to remember all this stuff because I said, I think earlier in this episode, you know, I was asking questions on leadership lessons and I was pulling from podcasts I did seven years ago.

Starting point is 00:46:37 There's no way that I could remember it. Like this has a perfect memory. I don't. So let me go back to this. Sage, as a noun, it's a profoundly wise person. This refers to someone with a deep understanding of life, accumulated knowledge, and sound judgment. They're often looked to for guidance and advice.

Starting point is 00:46:54 That is exactly the way I'm using it. I'm not chatting with them. You know, I'm asking this question. It's like, can you combine these ideas? I need to know something. I need to make an important decision in my business. Will this tool improve my decision-making, yes or no? Of course.

Starting point is 00:47:10 I mean, come on. It's the accumulated knowledge of history's greatest entrepreneurs, condensed and clarified, and you can have it on demand. Of course, it's going to make your decision-making over the life of your career better. And so that's the noun version, the adjective. It's a wise, discerning, or prudent to describe someone who shows good judgment and makes well-considered decisions. You can't be so good at your job and so remarkable at your work that somebody wrote a book about your life if you

Starting point is 00:47:35 didn't show good judgment and make well-considered decisions. That applies to every single person you and I are trying to learn from. And so whatever the name of this feature is, I think we're just going to ship it this week. We've been testing it internally uh for many weeks i don't even maybe two months something like that then we have a bunch it's out in the wild for existing subscribers for people are testing it what i'm looking for is like is it can you break it and what i mean by break it is is it crashing is it getting stuck and so far it has proved reliable so now i am real hesitant. So here's the thing.

Starting point is 00:48:06 I'm really excited to get this out because I think this is really cool, right? And it's only going to get better because I'm going to add more transcripts to it, more notes, more highlights. The underlying AI models will keep getting better and better. This thing is going to be crazy a couple years from now. And I got a bunch of ideas and unfair advantages in the sense that there's a bunch of AI founders listening to this podcast that would give me private product demos and saying, hey, you should grab this feature and you should add it here and I'll show you how to do it. So again, this is just an unfair advantage I think you have listening to this podcast and then hopefully subscribing to founders notes. So I have to straddle my excitement for this new feature with I don't want to release to everybody and then,

Starting point is 00:48:42 you know, it starts, it breaks because there's so many more people using it. So I think we're pretty sure, I was talking to the engineers at ReadWise, the founders of ReadWise, the ones helping me build this product. They're saying we should ship it this week. I've been using the version, right, the actual live version that's in Founders Notes 2, and I can't break it. So we're going to do a couple more days of testing. If there's nothing going wrong, it's going to be live. If you run into any issues when you use it, okay, there's an, you see the customer support email. Once you're logged into Founders Notes, please email me. I will be monitoring. I have people helping me, but I will be looking at the emails as well. All I ask you is just be cool. Everybody's been cool.

Starting point is 00:49:21 We just spent, I spent a hundred or spent 150 days. I spent the last three days at the first founders only conference, uh, with 150 super driven, successful, ambitious, inspiring founders. It was incredible. We didn't record anything on purpose. Any event I ever do in the future, it's not going to be recorded. Like you have to be there. But what I was struck by is, you know, there's multiple billionaires there. There's super successful people. People have sold their companies for hundreds of millions of dollars. There's capital allocators, you know, responsible for tens of billions of dollars of capital. Everybody, it's just a group of business nerds. Business nerds that want to get better at their craft and, you know, get to the end of our lives, not dancing on a reservoir of untapped potential.

Starting point is 00:50:05 And the amazing thing, other than the inspiration and learning and the relationships that we built, is I didn't run into any assholes. Everybody was cool. And so I think I can relate to this feature. If you run into any issues, just email me. I will fix it. I don't even know if you will run into it. But keep in mind, this is a tool for me first, right?

Starting point is 00:50:21 I'm building something that I need. The cool thing is just by externalizing it to you, then it becomes valuable. It's not something that's just, you know, some hidden talent or hidden secret that I have. And so there's no way I'm going to let stay broken. I'm going to constantly fix it. I'm on, I'm on top of it all the time. So that is my current thinking about it. I want to, obviously I'm always going to talk directly to you. Like I break the fourth wall. There is no fourth wall here, right? I'm always going to tell you the thinking I'm, I'm having about this, the evolution of the thinking, and what I have planned next. Because this is going to be, you

Starting point is 00:50:48 know, a full-fledged platform with the North Star of the ability to condense and clarify the collective knowledge of history's greatest entrepreneurs. Because I want it on demand so we can use it when we're making decisions throughout our entire career. So in addition to the AI assistant, whatever, I'll name it, right? There's a bunch of different ways you can use it. When you sign up, you will get an email. It's a welcome email. It goes through. I wrote the welcome email. It goes through exactly how I use it. You know, you can still search all my highlights. That's the feature before the invention of Sage or whatever AI assistant, whatever I call this thing. That was the feature I was using the most. So any topic that I was thinking about, I would just type

Starting point is 00:51:24 it in the search bar. Sometimes it's a person. Sometimes it's a topic. Sometimes it's an idea. Sometimes I want to read about how did they think about patients? How did they think about monopolies? How did they think about moats? How did they think about incentives?

Starting point is 00:51:35 And it would perform a keyword search for all my notes and highlights. And now we have this new feature with transcripts, which has made the search like 10 times better because then you can search every single time I've mentioned it on the podcast. So you still have the ability to search my highlights. I've been getting a bunch of emails and DMs that people are using the highlight feed, like I suggested, which is the highlight feed is just a, it presents all my notes and highlights in a random order to you. It's almost like a smart Twitter feed, but instead of reading, you know, the ramblings of some crazy person online, you read a note or a highlight from one of the hundreds, you know, 300 books or whatever I have in, in founders notes. And so multiple people have said, hey, that idea about

Starting point is 00:52:13 replacing searches, like reading the news for 10 or 15 minutes in the morning, I just read the highlight feed, it's actually a lot better. Think of it as a bunch of random ideas from history's greatest entrepreneurs that you start your morning with. And then the last feature I'll talk about, but even though there's two more listed in the welcome email, you can just read it after you sign up, but is the books feature. You go in and you can pick a book. Like I did this for Lessons of History, the book that you and I just covered. I read that book for the first time, I don't know, years ago. And so I had 31 previous highlights from that book. You can go in and read all my notes and highlights on a book in five, 10 minutes for most of them. And you have a good idea

Starting point is 00:52:51 of the key ideas for every single book. So if you want a tool that you can use for your entire career, I highly, highly, highly recommend you go to foundersnotes.com. That is foundersnotes.com, founders with an S just like the podcast, foundersnotes.com. with an s just like the podcast foundersnotes.com and you can get access to what i truly believe is the world's most valuable notebook for founders it is by far the best way to support the podcast thank you very much for listening thank you very much for the support and i will talk to you again soon

Founders - #342 The Lessons of History (Will & Ariel Durant)

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