YouSaid · the spoken record

Niall Ferguson

lines on the record: 166
first: 2021-11-08
most recent: 2021-11-08
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Great turning point in world history is August 2nd, 1914 When the British cabinet decides to intervene. And what would have been a European war? Comes a world war. And with British intervention it becomes a massively larger and more protracted conflict. So very early in my career I became very preoccupied with the deliberations on that day. And the surprising decision that a liberal cabinet took to go to war, which you might not have bet on that morning because there seemed to be a majority of cabinet members who would be disinclined and only a minority, including Winston Churchill, who wanted to go to war. So that's one turning point. I often wish I could. get my time machine working and go back and say, wait, stop, just think about what you're going to do. And by the way, let me show you a video of Europe in 1918. So that's one.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“And also ran a runner up, it would be World War II in Eastern Europe. And in many ways Might have been worse because. For medieval peasant, the sense of being on the wrong side of divine retribution must have been overpowering. In the mid twentieth century, you knew that this was man-made murder on a massive industrial scale. If one reads Brossman's Life and Fate, just to take one example, one enters a hellscape. It's extremely hard. Imagine oneself in. So these are two of the great disasters of human history. And if we did have a time machine, if one really were able to transport people back and give them a glimpse of these times, I think the post-traumatic stress would be enormous. People would come back from those trips even if it was a one-day excursion with guaranteed survival in a state of utter shock.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“I am glad I was not around in the mid fourteenth century when the bubonic plague swept across Eurasia. As far as we can see, that was history's worst pandemic. Maybe there was a comparably bad one in the reign of the Emperor Justinian Some reason to think it wasn't as bad And the more we learn about the 14th century, the more we realize that it really was across Eurasia and the mortality was 30% in some places, 50%, in some places higher, there were whole towns that were just emptied. And when one reads about the Black Death, it's an unimaginable nightmare of death and madness in the death with flagellant orders wandering from town to town, seeking to ward off divine retribution by flogging themselves, people turning on the local Jewish communities as if it's somehow their fault. That must have been a nightmarish time. If you ask me,”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Rather than the default setting being that the data are available, that's important, I think, because it was one of the biggest mistakes of the evolution of the internet, that in a way the default was to let our data be plundered. It's hard to undo that, but I think we can at least create a new regime that in future makes privacy default rather than open access default.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Dick a drink, your insurance goes up right, or my credit card wouldn't work in certain restaurants because they serve ribeye steak. I fear that world because I see it being built in China. And we must, at all costs, make sure that the Western world has something distinctive to offer. It can't just be, oh, it's the same as in China. Only the data go to five tech companies rather than to Xi Jinping. So I think the way we need to steer this world is in the way that our data are by default vaulted on our devices and we choose when to release the data.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“I think Course, we don't want to create a world of Chinese-style social credit in which our behavior becomes so transparent to providers of financial services, particularly insurers, that when I try to go into the pub, I'm stopped from doing so.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“People who really get sculpted in our financial system are senders and receivers of remittances, which are often amongst the poorest families in the world, the people who are My wife's family in East Africa really kind of hand to mouth. And if you send money to East Africa or the Philippines or Central America, it's the transaction costs are awful. I'm talking to you, Western Union We're going to solve that problem. So 10 years from now, the transaction costs will just be negligible and the money will go to the people who need it rather than to rent-seeking financial institutions. So I'm on the side of the revolution with this because I think the incumbent financial institutions globally are doing a pretty terrible job. And middle class and lower class families lose out. And thankfully, technology allows us to fix this.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“You couldn't really solve the problem I've just described. Certainly you couldn't solve it with something like microfinance. That was obviously not viable. The interest rates were high, the transaction costs were crazy. But now we have solutions. And the solutions are extremely exciting. So FinTech is this great force for good that brings people into the financial system and reduces transactions. You get suddenly, you get financial services on your phone, don't cost nearly as much as they did when there had to be a bricks and mortar building on Main Street that you kind of went humbly and beseeched to lend you money. I'm excited about that because it seems to me very socially transformative. I'll give you one other example of what's great.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Other people that lent you money. And let's look at your balance sheet. It sucks. There's this great big chunk of real estate. And what else have you really got on there? And the other side is a bunch of debt, which is probably paying too high interest. The typical household in the median kind of range is at the mercy of oligopolistic financial services providers go down further in the social scale and people are outside the financial system altogether. And those poor folks have to rely on banknotes and informal lending with huge punitive rates. We have to do better than this. This has to be improved upon. And I think what's exciting about our time is that technology now exists that didn't exist when I wrote the Ascent of Money to solve these problems. When I wrote the Ascent of Money, which was in 2008,”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“In debt servitude. And then you got to somehow lever up by a home if you can because everybody's kind of telling you you should do that. So you and your spouse, you are getting even more leveraged and your long one asset class called real estate, which is super illiquid. I mean, already I'm crying inside at the thought of describing so many households' financial predicament in that way and I'm not done with them yet because oh by the way, there's all this insurance you have to take out and here are the providers that are willing to insure you and here are the premiums you're going to be paying which are kind of presented to you. That's your car insurance, that's your home insurance. And if you're here, it's the earthquake insurance. And pretty soon you're just bleeding money in a bunch of monthly payments to the mortgage lender, to the insurer, to all the...”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Turned into smart contracts. That's probably where the future goes. I can't see an obvious reason why my range of different financial needs, let's think about insurance, for example, will continue to be met with instruments that in some ways are 100 years old. So, I think we're still an early stage of a financial revolution that will greatly streamline how we take care of all those financial needs that we have, mortgages and insurance leap to mind. Most households are penalized for being financially poorly educated and confronted with oligopolistic financial services providers. So you kind of leave college already in debt. So you start.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“I think It must be the case That a lot of the complexity in a mortgage. Is redundant. That when we are confronted with pages and pages and pages and pages of small prints, We're seeing some manifestation of the late stage regulatory state. The transaction itself is quite simple. Most of the verbage is just ass covering by regulators. So, I think the smart contract. Although I'm sure lawyers will email me and tell me I'm wrong, can deal with a lot of the plain vanilla and maybe not so plain transactions that we want to do and eliminate yet more intermediaries. That's my kind of working assumption. And given that a lot of Financial transactions have the potential at least to be simplified, automated”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Smart person who studied history definitely wants a bit of both. So let's imagine World War III has a very, very severe cyber component to it with high levels of disruption. Yeah, you'd be glad of the old shiny stuff at that point. Diversification still seems like the most important truth of financial history. And what is crypto? It's just this wonderful new source of diversification. But it would be nuts to be 100% in Bitcoin. I mean, I have some friends who are probably quite close to that”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“And I don't want to be 100% in crypto if they crash the internet. Which between them, China and Russia might be able to do.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Crypto's obvious utility in the short run is as a store of wealth, of transferable wealth for people who live in dangerous places with failing, not just failing money, but failing rule of law. That's why in Latin America there's so much interest in crypto because Latin Americans have a lot of monetary history to look back on and not much of it is good. So, I think that the short run problem that crypto solves is, and this goes back to the digital gold point, if you are in a dangerous place with weak rule of law and weak property rights, here is a new and better way to have portable wealth. Think the next. Question to ask is would you want to be long crypto in the event of World War III? What's interesting about that question is that World War III would likely have a significant cyber dimension to it.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Wars happen. Because the people Who have the power to command armed forces? Miscalculate. That's generally what happens. And we will have a big war in the near future if both the Chinese government and the US government miscalculates and they unleash lethal force on one another. Any more than the Rothschilds could stop World War I, and they were then the biggest bank in the world by far with massive international financial influence. So let's accept that war is in a different domain. War would impact the financial world massively if it were a war between the United States and China because there's still a huge China trade-on. Wall Street is long China, Europe is long China. So, the conflict that I could foresee in the future is one that's highly financially disruptive. Where does crypto fit in?”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Him with Facebook Wasn't a huge regulatory jungle to navigate, but welcome to the world of finance, which has always been a jungle of regulation because the regulation is there to basically entrench the incumbents. That's what it's for. So it'll be a much tougher fight than the fights we've seen over other aspects of the tech revolution because the incumbents are there and they see the threat. And in the end, Satoshi said it very explicitly. It's peer-to-peer payment without third-party verification. And all the third parties are going, wait, what? We're the third parties.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Crypto world will be tolerated as long as we pay our taxes. And it's important that we're already at that point. And then the next question becomes, well, does Gary Gensler define everything as a security and do we then have to go through endless regulatory contortions to satisfy the SEC? There's a whole bunch of uncertainties that the administrative state excels at creating because that's just how the administrative state works. You'll do something new. I'll decide whether that's a security, but don't expect me to define it for you. I'll decide in an arbitrary way and then you'll owe me money. So all of this is going to be very annoying. And for people who are trying to run exchanges or innovate in the space, these regulations will be annoying. But the problem with fintech is it's different from tech, broadly defined. e-commerce with Amazon, when it got into social networks.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“doubt that having dealt with the IRS now since when did I first come here 2002 Hard to think of an institution less likely to. Leap into the 21st century when it comes to payments. No, I think we'll be tolerated.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably it shouldn't be a currency invented by Facebook. Never struck me as the best solution to this problem. Maybe it's some kind of Fed coin. Or maybe one of the existing algorithmic stablecoins does the job. But we clearly need some stable off-ramp.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“You could hang around with your bonds and wait for the euthanasia of the rentier. You can hang on to your tech stocks and just hope there isn't a massive correction. Or dot dot dot. And it seems like a fairly obvious strategy to make sure that you have at least some crypto for the coming year, given what we likely have to face. I think what's really interesting is that on top of Ethereum, a more elaborate financial system is being built. Able coins are the interesting puzzle. For me, because we need off ramps. Ultimately, you and I have to pay taxes in US dollars. And there's no getting away from that. The IRS is going to let us hold crypto as long as we pay our taxes. And the only question in my mind is what's the optimal off-ramp to make those tax payments?”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think the non correlation property is very, very important in driving adoption. And the volatility also drives adoption if you're a sophisticated investor. So I think the adoption drives Bitcoin up because it's the option of digital gold, but it's also just this nicely not very correlated asset that you want to hold in a world where the hell, I mean, the bank, central banks are going to tighten. We've come through this massively disruptive episode of the pandemic. Public debt soared. Money printing soared.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Bitcoin which had just sold off after its 2017 bubble will rise again through adoption because if every millionaire in the world has 0.2% of his or her wealth in Bitcoin, the price should be $15,000. And if it's 1%, it's $75,000. And it might not even stay at 1% because, I mean, look at its recent performance. If your exposure to stock global stocks had been hedged with a significant crypto holding, you would have aced the last few months.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“After a while, it's in the textbooks and nobody's laughing Yeah. Well, that's exactly right. Yeah, I'm on the side of humor, but it is a dangerous activity these days. Anyway, I think Bitcoin is the option of digital gold. The role it plays is probably not so much story of value. Right now it's just nicely not very correlated asset in your portfolio. When I updated the Ascent of Money, which was in 2018, 10 years after it came out, I wrote a new chapter in which I said,”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I just like the metaversity as a kind of As the antithesis of what we're trying to do in Austin. But can you imagine I'm using it sarcastically? I come from Glasgow where all novel words have to be used sarcastically. So the metaverse sarcastic.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no, I think what Bitcoin is, this was a phrase that I got from my friend Matt McClelnan at First Eagle, an option on digital gold. So it's the gold of the system, but currently it behaves like an option. That's why it's quite volatile. Because we don't really know if this brave new world of crypto is going to work. But if it does work, then Bitcoin is the gold because of the finite supply. What role we need gold to play in the metaverse isn't quite clear.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Web 3, I think we're supposed to call it Web3 because crypto is now an obsolescent term. They can't kill it, but they can definitely make it difficult and throw a lot of sand into the machine. And I think worst of all, they can spoil the evolutionary story by creating central bank digital currency that I don't think we really need. We certainly don't need it in the Chinese form.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“That suddenly is a serious counterproposal. So on the one side, we have a relatively decentralized, technologically innovative internet native system of payments that has the possibility to evolve to produce a full set of smart contracts, reducing enormously the transaction costs that we currently encounter in the financial world because it gets rid of all those middlemen who take their cut every time you take out a mortgage or whatever it is. That's one alternative. But on the other side, we have a highly centralized system in which transactions will by default be under the surveillance of the central bank. Seems like an easy choice to me, but hey, I have this thing about personal liberty. So that's where we are. I don't think that the regulators can kill.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“I think central bank digital currencies are a terrible idea. I can't imagine why we would want to copy a Chinese model that essentially takes all transactions and puts them directly under the surveillance of a central government institution.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Partly, I think, out of a muddled sense that there must be a lot of nefarious things going on if we don't step in, many more will go on. This, I think, greatly exaggerates how much criminal activity is in fact going on in the space. But there's also the vested interests at work. It was odd to me, maybe not odd, perhaps it wasn't surprising, that the Bank for International Settlements earlier this year published a report, one chapter of which said this must all go, must all stop. It's all got to be shut down and it's got to be replaced by central bank digital currency. Martin Wolf and the Financial Times read this and said, I agree with this. And one suddenly realized that the banks are clever. They'd achieved the intellectual counterattack with almost no fingerprints on the weapon.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Evolving very fast, and in parallel, you can see this payments revolution happening. I think that all goes naturally very well and generates an enormous amount of wealth in the process. The problem is There are people in Washington with an overwhelming urge to intervene and disrupt this evolutionary process.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't know is how much damage ill judged regulatory interventions are going to do to this financial revolution left to its own devices I think decentralized finance provides the native monetary and financial system for the internet. And the more time we spend in the metaverse, the more use we will make of it. The next things that will happen, I think, will be that tokens in game spaces like Roblox will become fungible. As my nine year old spends a lot more time playing on computer games than I ever did, I can see that entertainment is becoming a game-driven phenomenon. And in the game space, you need skins for your avatar. The economics of the internet.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Think this financial revolution has got past the point at which it can be killed. It was vulnerable in the early years, but it now has sufficient adoption and has generated sufficient additional layers, I mean Ethereum was in many ways the more important innovation because you can build a whole system of payments and ultimately smart contracts on top of Ether. I think we've now reached the point that it's pretty hard to imagine it all being killed. And it's just survived an amazing thing, which was the Chinese shutting down mining and shutting down everything. And still here we are. In fact, crypto's thriving.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“A revolution has been gathering momentum that poses a very profound threat to the existing legacy system of banks and fiat currencies. Most money in the world today is made by banks, not central banks, banks. That's what most money is. It's entries in bank accounts. And what Bitcoin represents is an alternative mode of payment that really ought to rend the banks obsolete.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think Bitcoin was devised by Satoshi, whoever he was. For fear of Breakdown of the fiat currencies. It was a very far sighted enterprise because certainly in 2008 when the first Bitcoin paper appeared, it wasn't very likely that a wave of inflation was coming, if anything, there was more reason to fear deflation at that point. I think it would be more accurate to say that with the advent of the internet, there was a need for a means of payment native to the internet, typing your credit card number into a random website. It's not the way to pay for things on the internet. And I'd rather think of Bitcoin as the first iteration, the first attempt to solve the problem of how do we pay for things in what we must learn to call the metaverse, but let's just call it the internet for old time's sake. And ever since that initial innovation, the realization that you could use computing power and cryptography to create peer-to-peer payments without third-party verification,”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Reason bills of exchange came along was because the coinage systems had stopped working. The reason that banknotes started to become used more generally first in the American colonies in the seventeenth century then more widely in the 18th century was just that they were more convenient than any other way of paying for things. We had to invent the bond market in the 18th century to cope with the problem of public debt which up until that point had been a recurrent source of instability. And then we invented equity finance because bonds were not enough. So I would prefer to think of the financial history as a series of crises really that are resolved by innovations. And in the most recent episode, very exciting episode of financial history, something called Bitcoin initiated a new financial or monetary revolution in response, I think, to the growing crisis of the fiat money system.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Very high inflation episodes and hardly any hyperinflationary episodes. Venezuela is one of the very few, Zimbabwe is another. But if you take a hundred year view or a 200 year view, or if you want to take a 500-year view, you realize that quite often the system doesn't work. If you go back to the 17th century, there were multiple competing systems of coinage. There had been a Previous century. The price revolution caused mainly by the arrival of New World silver. Think financial history is a bit messier than one might think. And the more one studies it, the more one realizes the need for the evolution.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“For people who've spent most of their lives in the last 20 years, we've had a period of exceptional price stability. Since this century began. in which a regime of central bank independence and inflation targeting appeared to generate steady below 2% inflation in much of the developed world was a bit too low for the central bankers' liking. And that became a problem with the financial crisis. But we've avoided major price instability for the better part of 20 years. In most of the world, there haven't really been that many.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“That system which produced relative price stability over the 19th century fell apart as a result of the First World War. And as soon as it was gone, as soon as there was no longer a clear link between those banknotes and coins and gold, the whole thing went completely haywire. And I think we should remember the extent of the monetary chaos from certainly 1918 all the way through to the late 1940s. I mean, the German currency was destroyed not once but twice in that period. And that was one of the most advanced economies in the world. In the United States, there were periods of intensely deep deflation. Prices fell by a third in the Great Depression. And then very serious price volatility in the immediate post-World War II period. So it's a bit of an illusion. Maybe it's an illusion.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Multiple currencies, not just the German currency, multiple currencies were completely destroyed. The Russian currency, the Polish currency, there were currency disasters all over Central and Eastern Europe in the early 1920s. And that was partly because Over the course of the 19th century, a system had evolved in which trust was based on gold and rules that were supposedly applied by central banks.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly, I would say probably no, a widely shared view amongst evolutionary psychologists, network scientists. It's one of Nicholas Krustakis' argument in a recent book. Think economic history broadly bears this out, but you have to be Cautious. Cases where the system works are familiar to us because those are the states and the eras that produce a lot of written records When the system of trust collapses and the monetary system collapses with it, there is generally quite a paucity of records. I found that when I was writing Doom. And so we slightly are biased in favor of the periods when trust prevailed and the system functioned. It's very easy to point to a great many episodes of very, very intense monetary chaos, even in the relatively recent past. In the wake of the First World War”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Which represent our transactions as creditors and debtors. And the whole thing depends on our collective trust to work. Had to explain this to Stephen Colbert once, and that Colbershire, the old show that was actually funny. Was a great moment When he said, so Neil, could I be money? And I said, yes, we could settle a debt with a human being that was quite common in much of history, but it's not the most convenient form of money. Money has to be convenient. That's why when they worked out how to make payments with cell phones, the Chinese simply went straight there from bank accounts. They skipped out credit cards. You won't see credit cards in China, except in the hands of naive tourists.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“And that doesn't always pertain. What we see in episodes of inflation, especially episodes of hyperinflation, is a crisis of trust, a crisis of confidence in the means of payment. And this is very traumatic for the societies to which it happens. By and large, human beings, particularly once you have a rule of law system of the sort that evolved in the West and then became generalized, are predisposed to trust one another. And the default setting is to trust money. Even when it depreciates at quite steady rate, as the US dollar has done pretty much uninterruptedly since the 1960s. Takes quite a big disruption for money to lose that trust. But I think essentially what money should be thought of as is a series of tokens that can take any form we like and can be purely digital”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“I come from a family of physicists. I'm the black sheep of the family. My mother's a physicist. My sister is. And so when you asked me to explain something in physics terms, I get a kind of little part of me dies because I know I'll fail. But in truth, it doesn't really matter what we decide. Money is going to be. And anything can record, crystallize, the relationship between the creditor and the debtor. Be a piece of paper, it can be a piece of metal, it can be nothing, it can just be a digital entry. It's trust that we're really talking about here. We are not just trusting one another, we may not, but we are trusting the money. So whatever we use to represent Creditor debtor relationship, whether it's a banknote or a coin or whatever. It does depend on us both trusting it.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“We're missing the point that you could build a system of payments, which I think is how we should think about crypto that isn't money, doesn't need to be money. It's like bills of exchange. It's network-based verification, peer-to-peer transactions without third-party verification. When it hit me the other day that we actually had this precedent for crypto, I got quite excited and thought, I wish I'd written that in the ascent of money.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“There are three or four things that are worth saying about this, and I'll just say two. One, it may be that those three things are a trilemma, and it's very difficult for anything to be all of them. This point was made by my Hoover colleague Manny Rincon Cruz last year, and I still wish he would write this up as a paper because it's a great insight. The second thing that's really interesting to me is that payments don't need to be money. And if we go around, as economists love to do, saying, well, Bitcoin's not money because it doesn't fulfill these criteria.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's actually how world trade grows because you just couldn't settle long oceanic transactions with coinage. It just wasn't practical, all those treasure chests full of the balloons, which were part of the way in which the Spanish Empire worked were really inefficient. So bills of exchange are an exciting part of the story, and they illustrate something I should have made more clear at the ascent of money, that not everything used in payment needs to be money. Classically economists will tell you, oh, well, money, money has three different functions. You've heard the zillion times, right? It's a unit of account, it's a store of value, and it's a medium of exchange.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“When they start using bills of exchange, which are really just pieces of paper saying I owe you over a three-month period while goods are in transit from Florence to London, you get the first peer-to-peer payment system, which is network verified because they're not coins. They don't have a king's head on them. They're just pieces of paper. And the verification comes in the form of signatures. ultimately some kind of guarantee if I write an IOU to you, I mean you don't really know me that well we only just met so you might want to get endorsed by I don't know somebody really creditworthy like Elon and so we we actually can see in the late 14th century in northern Italy and England and elsewhere the evolution of a peer-to-peer network system of payment”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Money entering the system, but coinage is still kind of the basis of payments all the way through the Roman Empire, out the other end into the so-called Dark Ages, it still how most things are settled in cash transactions in the early 1300s. You don't get a big shift until after the Black Death when there's such a need to monetize the economy because of chronic labor shortages and feudalism begins to unravel that you just don't have a sufficient amount of coinage. And so you get bills of exchange. And I'm really into bills of exchange because, and this I hope will capture your listeners and viewers' imaginations.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source
“Not Coinbase coins, actual coin coins. You know, the ones that jangle in your pocket and you kind of don't know quite what to do with once you have some. So that became an incredibly pervasive form of paying for things. Money's just a crystallization of a relationship between a debtor and a creditor. Coins are just very fungible. You know, whereas a clay tablet relates to a specific transaction coins are generic and fungible. They can be used in any transaction. So that was an important evolutionary advance. If you think of financial history, and this was the point of the Ascent of Money as an evolutionary story, there are punctuated equilibria. People get by with coins for a long time despite their defects as a means of payment, such as that they can be debased, they can be clipped, it's very hard to avoid fake or debate.”
2021-11-08 · Lex Fridman Podcast · #239 – Niall Ferguson: History of Money, Power, War, and Truth · IDENTIFIED FROM THE TRANSCRIPT · source