The Eric Metaxas Show - George Gilder

Episode Date: January 7, 2025

Life After Capitalism with Economist George Gilder

Welcome to the Eric Metaxas show. I shouldn't tell you this, but Eric hired someone who sounds just like him to host today's show. But since I'm the announcer, they told me, so I'm telling you, don't be fooled. The real Eric's in jail. I want to introduce my guest, George Gilder. Now, George Gilder is one of these people. He's been a marked man for some time. For years.

I don't know when George first came to a Socrates event, quite a few years ago. but I even singled him out in the crowd as a future Socrates and the city guest, because he just is that way. If you know anything about him, you know that nobody deserves to be a Socrates and the city guest more than he. But that makes him difficult to sum up. He's a polymathic genius, as many of us here are. I'll just read the standard introduction. You can read between the lines.

But he's a bit of a legend. He's an influential American author, economist, an entrepreneur known for his groundbreaking ideas on technology, economics, and culture. He gained prominence in the 1970s with his book, Wealth and Poverty, which I believe had something to do with bringing supply-side economics into the national vocabulary. Am I getting that wrong, George? No, I mean, it was, I was Reagan's most quoted. living author. Reagan's most quoted living author is my guest tonight.

If you think you are Reagan's most quoted living author, see me after class. George Gilder's work often intersects with his Christian faith, offering a unique perspective on the relationship

between spirituality and economic systems. He's also authored many other books such as Life After Google, where he explores the future of technology and its impact on society advocating for a decentralized internet. He is co-founder of the Discovery Institute. Any of you who have been followers of Socrates and City know that something like half of our guests come from the Discovery Institute. So for that alone, George deserves our praise and gratitude.

Tonight, we're going to be talking about his new book. life after capitalism. Before I bring George up, I've interviewed George on this subject at my radio studio. And the one thing that we had going for us in the radio studio that we don't hear is a Tiffany glass skylight.

And when I pointed it out to George during the interview, he said very nonchalantly, oh yeah, Lewis Comfort Tiffany, it was my great-grandfather. I didn't believe it then. I don't believe it now. George Gilder, welcome to Socrates in the city. I hate the fact that you lied about your great-grandfather, George,

and I want you to come clean. Take this opportunity to tell the group that you were just kidding. Well, my grandmother was his daughter, Comfort Tiffany. And comfort... I guess if you put it that way. Comfort Tiffany Gilder and my sister. name is comfort Tiffany Gilder and

we have Tiffany's galore Tiffany Glass it was startling to me when I... My father collected he worked for Tiffany and he collected Tiffany Glass his favorite exhibits and

my father was killed in the war but he wasn't wanted me to have a selection of the most choice Tiffany Glass, which was stored in our barn with our hay barn behind our house, and the hay barn was ignited by an arsonist, and all the Tiffany Glass was consumed. So I have no physical evidence to present beyond DNA. You can consult 23 and me.

Wow, wow. Well, then China would have, you know, the information. I steer clear of 23 and me. I don't want them to have it. Your book we're going to discuss today is Life After Capitalism. Do us a favor and sum up the thesis. I mean, I've interviewed me on this before, but it's complex. It's a little difficult, so I just want to make sure that we get the foundation.

So what's the fundamental thesis of life after capitalism? Well, in the beginning was the word. It wasn't the atom. It wasn't some material thing. It wasn't depleted natural resources. In the beginning was the word. And human beings are chiefly minds, not mouths. Human beings are creative in the image of their creator.

And to the extent that they're emancipated, they produce wealth. And wealth is most essentially knowledge. As Thomas Sol has explained, the Neanderthal in his cave had all the natural resources we have today. The difference between our age and the Stone Age is entirely the increase of knowledge. Wealth is knowledge. Now, in the book, you're sort of arguing against materialism. In other words, when you say that it's not that in the beginning was the atom, no, it's not about material. It's about what we do with the material, and it's what our minds do with the material.

So now, I guess my first question is, who would argue with that? Who is arguing with that? Everybody. Well, right. I mean, in the circles in which you travel, I'm sure, but for us, less sophisticated. This is to some degree a critique of Adam Smith. Okay, then do us a favor and explain that. Adam Smith founded capitalism on mimicking physics.

He wanted to be the Newton of economics. And so he really began with what I call a materialist superstition. But just for a moment, just to clarify, Adam Smith writes the wealth of nations in 1776. So I'm not aware of economic theory in the 18th century. So when he writes that book, you know, obviously, Newton. It was a great foundational book, obviously,

but its flaw is its mechanical model of the economy that echoes physics governed by gravity. Smith's view was economics governed by self-interest, which easily got transmuted into greed. and which now we're dealing with that now the point is that that idea that self-interest

described that way which is really in the movie Wall Street you know greed is good you and I both know that's nonsense that's a twisting of what it ought to be but you're saying that that begins with Adam Smith

and that there are people today who are arguing for that so but when When you say it's materialism, I just want to make it clear. So Newton has this mechanistic idea of the universe, and you're saying that Adam Smith, 100 years plus later, is doing something similar with economics.

That is right. Okay. And at what point... And we still today, all our economics is based on this incentive mechanism. And it misunderstands the fundamental essence of wealth, which is knowledge. And economic growth, therefore, is learning. That's what economic growth is. That's why the learning curve is the most fundamental concept in business consulting, really,

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They're extending their six-a-old. 60-day money-back guarantee till March 1st, plus all orders, $75 or more. Ship absolutely free. Mypillow.com. Use code, Eric. Okay, so what was it in recent years that would have inspired you to write this book? In other words, this is something that these bad ideas have been carrying on since Adam Smith, but have they borne particular fruit suddenly or recently?

Pretty much. I mean, they have led to the idea that we have a limited planet, that human beings are somehow a plague on the planet. Human beings are depicted as chiefly mouths rather than minds. So you multiply human beings and you somehow burden the resource endowment. But I just want to be clear that I'm tracking. It's all materialist superstition. Okay, so it's...

They don't understand that in the beginning was the word. Well, I could... I don't know why they're applauding because I know they don't understand what you just said. Let me be... I just want to be clear. I want to... If we have time, I want to quibble with you in the beginning was the word. Just to quibble.

I don't really disagree, but we can quibble. But before we go there, you're talking about a Malthusian view of the world, a zero-sum game Marxist view of the world, which we know is fundamentally flawed. It's fundamentally flawed because it's not God's idea. It's a very fallen idea. But you're saying that concept has taken control. I mean, it really is...

It's persisted. and it's now reached the point where people can't defend capitalism anymore. Because obviously, you know, if incentives really govern the system, clearly Jeff Bezos and Elon Musk and Larry Page and Brennan and Zuckerberg, all these richest Americans have passed beyond. beyond the mere being governed by incentives. So it opens up a fundamental contradiction in capitalism. So the left comes in and says, yeah, we can tax everything over $400 million.

Surely nobody needs more than $400 million worth of incentives. But economics is not an incentive system. It's an information system. And it's an investment embody knowledge. And you can't, if you redistribute knowledge, it disappears. You can't redistribute resources in capitalism without. essentially nullifying those resources. So it seems to me, and correct me if I'm wrong,

but your critique is of this heavy-handed, you know, elites deciding that, okay, now we're going to redistribute. I mean, we can start there and say, who gives them the right to do that? I mean, I think we can start there. That's Marxist, you know, statist philosophy. That's antithetical to our founding principles. So we would disagree with it there, but you're also saying that it doesn't work.

What is it that most recently made you say, I need to write about this? Is it that when you say we don't have people that can really explain capitalism or give a good defense of capitalism, is it because their definition of capitalism has become perverted in this way, that they're not talking about, the capitalism that we would think of, but they're talking about capitalism as pure, as greed, as self-interest. Well, it's that they don't understand the system. They believe that somehow the key problem of the American economy

is excessive money supply, that somehow we're suffering from inflation because the Federal Reserve is printing too much money. And that... Well, you wouldn't say that the Federal Reserve printing a lot of money is a good thing, or would you? No, it's not a good thing. But money, because the Federal Reserve doesn't have a clue

what money is. And nor do most conservatives who write about the money supply, beginning with Milton Friedman, who persuaded Richard Nixon to leave the gold standard. What if wealth is knowledge and growth, economic growth, is learning, what is money? Money is time. money is tokenized time.

Money is what remains scarce when everything else is abundant. We have infinite horizons of potential knowledge. When you say money, do you really mean wealth? Is that what you really mean? No, I mean money. Money is an important function in the economy. It represents time.

and time is both scarce. It's the one scarcity. You know, as soon as you break away from the idea that resources are scarce, if you recognize that resources, there are essentially as abundant as atoms in the universe, as ideas in the mind of God, you recognize that a, Essentially, economics is a study of abundance, not of scarcity.

And what's scarce? The scarcity we all face is time. And the way time is translated into economics is through money, which is tokenized time. And that's the scarcity. And I wrote the introductory. to a book called Super Abundance that was written by Gail Pooley and

Marion Tupi. And it demonstrates that the learning curve continues to prevail. That we are not suffering from inflation. We're suffering from ghastly misallocation

of resources. We're suffering from the terrible affliction of the religion of climate change, where we worship windmill totem poles and druidical sunhanges. Did you say druidical sunhenges? Yes. You know, that's the secret word. You get $100.

I never thought anybody would say that, but there he is. What you just said now, you're talking about several things at once, which I just want to clarify. You're talking about it's this negative Malthusian zero-sum game worldview that says everything is limited and we're in big trouble. And so we've got to decrease the population. It is fundamentally hopeless, if not neolithic and satanic. You're positing the opposite, which is tremendously. optimism, obviously. It's tremendously optimistic. But it's true.

Well, no, no, I, right. I agree with you. But since I didn't write the book, let me ask you, why, where does that optimism come from? What is it? Is it your view of humanity that's different than your view? In other words, I would say, if somebody believes that capitalism is greed effectively, right? First of all, that's not true, right? And if the free market relies on that, we know that the free market is just going to give us better drugs and pornography.

So the free market, apart from virtue, is a bad thing. And so on the one hand, you have a bad definition of capitalism in the free market. You have people that don't really understand it and don't understand that virtue is a part of it. So is that at the heart of it. So is that at the heart of your thesis that we've forgotten about virtue?

We've forgotten about the dignity of human beings and the possibilities of human beings. Where does your optimism stem from? Well, those propositions are true. We have come to regard human beings as mouths rather than minds. and we think they're the problem rather than the solution. But human beings that are mere products of some random evolutionary process cannot express this foundational truth. In the beginning was the word,

and the word has to shape and inform all our, economic activity as well as our technological creativity. So you're putting money away, saving for the future, for retirement, for your family. You're doing what you're supposed to do, right? Well, what if I told you that your 401k, IRA, and other investments are probably paying for gambling, abortion, and LGBT causes? Inspire Advisors can tell you where your profits are really coming from. Do what I did.

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Visit inspireadvisors.com. slash Eric. That's inspireadvisors.com slash Eric. Hey folks, listeners to my show know I'm passionate about the work of Christian Solidarity International because they protect and free those who are being persecuted and enslaved for their faith. Thanks to you to date, CSI has freed more than 100,000 people from slavery in Sudan, but the work is not done yet. It's estimated that there are still tens of thousands more still in bondage, and CSI is preparing right now for their final slave liberation of this year. you'll join me and help them liberate another 300 women and children. Your gift of just

$250 will free a woman in Sudan who has been enslaved for years and provide her with food and other supplies necessary to start her new life. Call 888-253-3522. 888-253-3522. Christian Solidarity International freeing and healing captives in Jesus' name. Go to metaxistalk.com. Click on the Christian Solidarity banner. Metaxistalk.com. or 888-2533522. God bless you. When you say in the beginning was the word, you're not just being cheeky.

In other words, you're not just saying in the beginning was the information and the word, but you're saying it in the genuinely biblical sense. Yes, well, the biblical sense is fundamental. It's not, they didn't say in the beginning was the word, but there were multiple other beginnings in which atoms prevailed and petroleum deposits were crucial. In the beginning was the word.

And this understanding that truth allows us to grasp the information theory of economics, which is what my book's about. Is it possible to make this case without offending people who are atheists? I think it probably is. But, I mean, my book, there's not a lot of explicit biblical quotation or religious exposition in my book. Its foundational documents are Claude Shannon's information theory, where he identified information passing through a network as measured by its surprisal to what unexpected bits.

In other words, if everything I tell you tonight, you already know, zero information is being transmitted in Shannon's terms. And it's unexpected bits. So government planning, and this is, we got a $3 trillion inflation reduction act that is chiefly devoted to subsidizing the most obsolete technologies in the world,

which are windmills and solar panels probably, They consume that resource that's most scarce, which apart from time is the planetary land area. It produces, and it produces, it's just a purely religious commitment because it produces not net zero energy, but it subtracts from energy or power, by subverting the power grid, rendering it more vulnerable and less efficient.

In other words, this $3 trillion that we're lavishing on this climate change agenda reduces value everywhere it touches. It's the chief, it's emergency socialism, as I describe it, why I call it life after capitalism is emergency socialism. You declare a climate crisis. You declare a pandemic. You declare whatever new population crisis.

And then you impose socialism. And that's the problem. It's not that some mistake that the Fed's making. It's the mistake that the politicians are all imposing on us. Emergency socialism. Okay, so a part of what you're saying, obviously, is that all of this stuff is anti-freedom, anti-free market in the genuine sense of the free market. It's a fear of freedom.

It's a fear of people governing themselves. It's a fear of the American founding. principles, really. And so, and I guess part of what you're saying is that people are using emergencies or fear to manipulate people so that they can control them. And so that's antithetical to what we believe about America and about self-governance and all these beautiful ideas. But it sounds like you're saying that a lot of capitalists have bought into this.

Yeah, a lot of them have. Can you give us some names? Well, Bill Gates, I don't know. Okay. So, yeah, but I mean, talk about that. So he's a capitalist. He's made many, many billions through the capitalistic system. But he feels like, okay, now maybe I've got enough and I want to, I don't want to give others the opportunity to make the kind of money I did. Now that I have that money, I can impose a system on others.

Yeah, and they call them charities. I mean, the real self-indulgence of the rich is expressed in their charity. charitable giving to a considerable degree. It's, you know, he's, Bill Gates is devoted to the climate change, emergency socialist agenda, and thus he's actually impeding economic growth and progress.

Right. And one of the themes of this book is, is, of William Nordhaus's insight into time prices. Hey folks, listeners to my show know I'm passionate about the work of Christian Solidarity International because they protect and free those who are being persecuted and enslaved for their faith. Thanks to you to date, CSI has freed more than 100,000 people from slavery in Sudan, but the work is not done yet.

It's estimated that there are still tens of thousands more still in bondage, and CSI is preparing right now for their final slave liberation of this year. I'm hoping you'll join me and help them liberate another 300 women and children. Your gift of just $250 will free a woman in Sudan who has been enslaved for years and provide her with food and other supplies necessary to start her new life. Call 888-253-3522. 888-253-3522 Christian Solidarity International, freeing and healing captives in Jesus' name.

Go to Metaxistock.com. Metaxistock.com. Click on the Christian Solidarity banner. Metaxistock.com or 888-253522. God bless you. House the Nobel laureate, Yale Economist. He got his Nobel for climate change, of course. Nobels are ordinarily given for the worst ideas of the relevant.

Are you seeing that Barack Obama's Nobel Prize was not entirely legitimate? That's conceivable. Right. But Nordhaus was really provided the basis for this book, Super Abundance by Pooley and Tupi that shows that since 1980, has increased 75%. And the price in that number of hours of work, a typical worker has to expend

to earn the money to buy the 100 commodities that sustain his life has dropped 75%. Prices are not going up. Prices are going down. They go up only in those areas, such as those touched by the Inflation Reduction Act. That's where you subsidize spurious advances and obsolete technologies. Well, when there's outside meddling by elites who have power. So you're really basically arguing for freedom and for the free market.

I just want to be clear. Yeah, I am. Knowledge rather than power. What previous book was called knowledge and power that was also expounding this theory. In the book, we had about two years ago I had as my guest at Socrates in the city, the great Dr. James Tour of Rice University and I've written about him.

You talk about him and his technologies in this book. In other words, he seems to me a signal example of why we should have hope that the party isn't over. In other words, because it seems to me

that a lot of these elites, Bill Gates at Al, they have decided that the party's over. We've grown as much as we can and now we have to redistribute, we have to decrease the mouths to feed. It's fundamentally pessimistic. And you're saying no, there's no reason for the party to be over.

If we do what we were doing, we can continue to grow. We can continue to build wealth. Faster than ever. Actually, we're growing faster than ever. Around the world, much of the growth isn't happening in the United States anymore because of our emergency socialism, but the world economy continues to grow at an amazing pace,

fueled by unexpected developments, by surprisal. And Jim Torr, who runs a laboratory at Rice University, has developed a way to produce graphene, which is the new material. Think of the Iron Age, the Steel Age, the silicon epoch, and now we're about to move into the Graphene Age, which is a single layer of carbon atoms, Which is 200 times stronger than steel.

It's a thousand times more conductives than copper. It's as flexible as rubber. It's transparent. It switches in the terrahertz, trillions of times a second, rather than in the gigahertz, billions of times a second, as silicon switches. And it is the new paradigm for a new economy and really a new epic of creativity.

And it was completely unexpected. It required a new physics to explain it. The new physics is called topology. There have been five Nobel Prizes awarded for it so far. and it because it it's the behavior

of graphene was totally unexpected. It's a single layer of graphite you encounter every day when you use a lead pencil you are depositing millions of layers

of graphene on the paper on your paper and this material can you mix it with concrete for example

and the concrete in parts per million and the concrete becomes 35% stronger it you've obviously invested in this I have invested

in Jim Tours major innovation which is called flash jeweled heating. And it may not be, I'm not claiming that my investment will necessarily prosper, because for the last 20 years since graphene was discovered, there have been 40 papers, peer-reviewed papers published every day. So this is just a frenzy of entrepreneurial activity has been

unleashed all around the world. And Jim Tour has propagated some 25 companies from his lab at Rice in Houston. But it's possible that his particular

formula won't prevail, but it's called flash dual heating and it can convert any form of garbage, any carbon-based refuse, into perfect layers of turbostratic graphene, graphene that is usable industrially.

And a company that produces it is called Universal Matter. But there are thousands of companies around the world. And in my newsletters, I've struggled with trying to sort out this incredible efflorescence of crazy. creativity all around. Other than in your newsletter, why is it that everyone wouldn't be generally aware of this? This is clearly monumental news. It just started.

What happened was the discovery of this material occurred in 2004. The original discovery was accomplished at Manchester University in England by Andre Geim and Kostanaestelikov. I've got it wrong, Nazalikov. Anyway, they did it with scotch tape. In other words, they've separated single layers of graphene from a block of graphite by using scotch tape. And this method does not translate readily.

to industrial bonanzas, but it did win them both a million dollar Nobel Prizes, and they specified all these properties of a single layer

of graphene, which are completely inconsistent with the previous physics, which had held, held that any single layer of graphene would just break into shards.

It could not be employed as a material usable in concrete or asphalt. Or, and as one of Jim Tours companies, almost all Jim Tours companies are in Israel, the way. And this is another example. I mean, the idea that 0.02% of

the world's population should produce most of the key inventions of our era is completely contrary to what an incentive theory of economics

would predict. I mean, my book the Israel test, which has been republic. now is and is, I'm yacking about it all everywhere. But literally, the whole AI revolution, which imparts to American companies 70% of global market cap at the moment, American companies hold 70% of the market cap of global corporations. and this is

heavily attributable to AI and the key development in artificial intelligence was Nvidia Corporation which made game graphics processors for games it bought an Israeli

company called Melanox which made it possible to transform these graphics processors that could handle 3D graphics for games into hyperscale computers which could process at once trillions of parameters of data in order to generate, you know, the process. of artificial intelligence. But this AI, as Jensen Wang,

head of Nvidia, acknowledged that when he bought Melanox, this Israeli communications company, Melanox had a bigger footprint in all the data centers of the world than Nvidia does. I'm