Hello, odd Logs listeners.
I'm Joe Wisenthal and I'm Tracy Allaway.
Tracy, We're going to be doing another live show, this time once again in our hometown of New York City.
That's right on the evening of May twenty eighth, from seven pm. We will be at Citywinery with a fantastic lineup of guests.
Yeah, I really like our live show. There are a great chance to meet the listeners. There are chants for listeners to meet us and actually, more importantly, listeners to hang out with other listeners and you know, all that community stuff.
But if you would like all that community stuff, and I think.
We're going to talk a lot about the future of trading because of that is a very New York City topic. Still figuring out the exact schedule, but yes, if you'd like to come to our live odd Lauge show at City Winery in New York City on May twenty eighth, go find details at bloomberg dot com, slash odd loads or look on either one of our Twitter handles. There are plenty of spaces to find it, and we'd love to see you there.
That's right, Get offline and interact with some actual human beings and do some of that commute stuff. We look forward to seeing you there.
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Hello and welcome to another episode of the Audults podcast. I'm Tracy Alloway.
And I'm Joe Wisenthal.
Joe, we're back in London.
We're making a tradition back in London. We're here last spring. That last year is April. At this time it's May. But I like the idea, let's do a recurring spring trip to London.
Now, when you're in London, do you feel the urge to sort of stroke your beard and think about geopolitics?
Can I say, well, yes for sure. But as you can confirm anytime there's like some big you know, there's something feels pivotal or historical, geopolitical. I turned to you in the office, I say, you know what we really need. We really need like an episode with an old guy with a British accent, like some moments. That's just what it calls for.
You gave the.
Secret away, you gave the secret all blots of books.
Who it is per save is like there's a certain type of guests that's like this is what this moment calls for some with wisdom, someone with perspective.
All right, well you've given it away at this point, but we are back here for our yearly check in with Martin Wolf, who is, of course the chief economics commentator over at the Financial Times, one of the most famous geopolitics geoeconomics commentators of all time, and someone who is really good to talk to when we're living through these potentially historic capital h historic events on what seems to be more than a yearly basis at this point.
So the last time we spoke to him was in April of twenty twenty five, and it was just after the Liberation Day tariff announcements. Now we're here in May twenty twenty six, and we have the Iran situation going on, we have headlines about further fracturing of US europe relations. I mean, all of these potential potentially pivotal moments seem to be happening on a sort of monthly, if not weekly basis at this point.
Absolutely right. And as you mentioned, when we were here last year, it was in the immediate wake I mean, I think maybe even just a week after the or a few days after the Liberation Day tariff schedule had come out, it was still during that period of absolutely insane volatility, and there is a sense in which, I mean, the pure volatility currently is not actually like it was
back then. But at the same time, perhaps probably because we're in the middle of a war ceasefire aside, April twenty twenty five feels a little quaint compared to where we are right now.
Isn't that something? I mean, everything's relative, I guess. Okay, Well, on that note, why don't we bring in our perfect guest, older gentleman, older British gentleman with a British accent per Joe's description, Martin Wolf, thank you so much for coming back on odd lauds.
Well, I'm very glad to fill a niche I didn't know you had.
You truly are the perfect guest, though, because you know, I again, a lot of people have described you as one of the most important economics commentators of all time, and so I think it's great that we get you back to opine on some of these very big events that we're seeing. Speaking of large events, you have described
the Iran situation as a nightmare scenario. Walk us through what you're thinking there, because when I look at some of the headlines around markets at the moment, S and P five hundred closed at a record on Friday, it doesn't seem like markets are aligned with that particular point of view. What's going on?
Well, I suppose the so many different things aspects of this. I've been thinking of this wonderful Shakespearean line, life being a tale told by any an idiot, full of sound and fury, signified nothing. So one feels that when markets are looking at this, they feel this is full of sound and fury, but it doesn't signify anything. And I think two possible reasons for that. One is the famous taco line from my dear colleague Robert Armstrong that Trump all with chickens out. So in the end, he's not
going to blow up the world. He's going to find a way out of this, which will have done some damage.
It will make I think the.
US look fairly ridiculous, but it can be forgotten, declare victory and stop, And I think that's still perfectly possible, a perfectly reasonable view, because he's already sort of stopped the fighting, and it feels like he's looking desperately for an endgame. The question is whether the other side will play ball, and that is still to be seen. And then there's the other possibility that in the end, if the oil were lost, as it were everever, the world will.
Adjust to that.
Yes, the output that goes through the straits is very large, but in the longer run a lot of it can go through pipelines. They can build these. It will take quite a while, and the world can compress this demand in time. It might take a few years. The world growth will be lower, but what we're losing is about a fifth world output. Oil is much less important than
it used to be seventy years ago. Prices have risen, but actually, if you look at real terms of the long history of oil prices since the first oil shot, they're not sensationally high, and so we will adjust to it, and we're very good at adjusting to it. The Gulf will end up as a different place because it won't be exporting the same way, but it's not enough to derail the world economy. And incidentally, the country that is likely to be the least damage of the major ones
is the US, which is not a coincidence. After all, they wouldn't have started it if that weren't at the back of their minds. China will be damaged. Russia is benefiting, but I don't think that's going to bother mister Trump. So in the end, the losers are Europe and China, not favorite, if favorite countries. I think that on the whole,
mister Trump prefers China to the Europe. But the and the world economy will continue, and there's this huge technological upheaval going on, which is very much what the markets they're talking about, which looks transformative. So I think the market's assumption that the profitability of companies is going to be fine. The world will have possibly a recession, but that's not the end of the world. World as recessions probably not even zero growth, and life goes off.
When you I'm glad that when you Shakespeare and sounded furious signifying nothing, you were not referring to our conversations, et cetera. Always something though that I'm anxious about with respect to our business, because we type and talk and it's like, what doesn't really matter all.
That big said.
You mentioned the profitability of companies and if profits stay high, let stock stay high, and it's all very explicable. One has to admit, or you have to admit, like sitting here today recording this may forth, you have to admit. It's pretty surprising, isn't it, Like if you knew all the headlines over the last year and a half between Liberation Day and a subpoena for Chairman Powell and this war the early existence is pretty surprising.
Yeah, this is what I don't get. So I think I mentioned this the last time we spoke, but both Joe and I did international relations at university and we were told over and over again that the global economy does not like instability, it doesn't like chaos, and yet here we are in the midst of a lot of chaos, and things are more or less chugging along.
Yes, I think that's right, and there's been a greater disconnect that I would have expected. And so I have more than once used another famous quote from a British author. Of course, it has to be given the intro Adam Smith.
Adam Smith, there's.
A great deal of ruin in a country, which was, if I remember correctly, actually said in response to somebody saying that the loss of the American colonies was a tragedy, a catastrophe for this country, and I think that's the context. I believe that's the context in which you said there's a great deal of ruin in a country, so there's a great deal of ruining the world economy. I have a favorite statistic which I use in many of my presentations because it surprised me so much when I looked
at it. So since nineteen fifty on the data, Angus Madison.
Must be right.
There have only been two years in which the world economy shrank two and they're both perfectly obvious. One was two thousand and nine, and even then he crank barely. It was close to zero because China was still growing, lots of countries were still growing. And the other was the pandemic twenty twenty. Otherwise, the world economy grows and nearly always between two and four percent. It's changed over time. Why well, because everybody, everybody matters is in a growth mode.
I could go through what's driving it. I looked at this actually after the pandemic, I thought, how often is it that we've had a genuine recession a decline in GDP. Now this isn't GDB behead. There will be more often times when GDB per head shrank. But basically, the world economy is unbelievably robust, and that's because lots of people are providing stuff people want. There are markets they produce for the markets, they invest to produce for the markets.
Investment is very important as a driver in demand, as Kine said, and so it takes something really enormous to stop it. I went through the two oil shops of the seventies. I was already working economists, and they were big shops, and we got terrible inflation and all the rest of it. Volka came along, and yes he did cause a recession in the US, but it wasn't global. So I think we have to start off by saying
the world economy is incredibly resilient. The second thing is that and that's why I use the full of sound and fury. If you look at the actual policies that we've ended up with, they're sort of designed that I'm sure they're not intent, not really to hurt, so the protection is very uneven. This was part of I wrote about this before he Trump got into office, and that creates the opportunity is designed in the system for trade diversion.
Right now, if he just put up an average tariff of forty percent or thirty five percent, a lot of trade would disappear, but that's not what he did.
He ended up with.
Imposing very high tariffs on some some.
Origins.
China still has very high terriffs, but it's the trade diversion has been phenomenal. So trade goes through Vietnam, it goes through Mexico, and the IMF had a very nice chant on that in the latest World Economic Outlook, which basically showed that yes, direct trade between the US and China's shrunk. Direct trade, but the US Canada's shrunk, but other people have played taking its place, and in some
sense it was designed to be porous. Then there are all sorts of exceptions that he's negotiated in return for who knows what with sundry companies like Apple. Apple would have been very bad.
So it's all very porous and it's all negotiable, so it's not as serious as all that.
And then the shock in the Gulf is significant, but oil isn't as important as it used to be. As we discussed, the energy system has changed across much of the world, and this will be accelerated, of course, but that's for the future, and prices have gone up, there will be a slowdown. I'm absolutely sure we might get close really.
Bad, really bad.
Maybe the world economy grows at one one and a half percent, but it's not a catastrophe. And finally, profits are robust because, let's face it, worldwide labor is weak, so companies can manage their affairs in a way to ensure that they survive.
I'm sure lots I've looked at this.
I'm sure lots of small and medium sized businesses are very badly affected. But the colossi that are generating most of the profits, particularly the tech colossy, not affected by this.
This is at least expose.
Perhaps not as surprising as one might have thought. There's a great deliver ruin in the world economy.
We should see if we can do this entire episode only referencing British historians and economic thinkers direct for.
You know, you know one other thing you mentioned those exceptions that you know little Last week i think Trump announced that they made a little carve out for UK whiskey or something like that on the question of the King. So therefore, much like us, Trump is a sucker for the British accent clearly it was the king and everything. He's like, all right, okay, yeah.
I think that's something.
He yes that He's also a sack of people have grand positions, didn't he didn't they have some sort of maybe it was true social or something else.
When he referred to.
There being two kings together, that was I'm sure not a joke. I think he would like to be king. But when I think about the king he would most like to be, I immediately come to Henry the Eighth, who was our real king, who made probably the single most important decision made by any English monarch, namely to leave the Catholic Church and make himself the head of the church.
I think Donald Trump would quite like that, don't you think.
And he was an absolute modock who chopped the heads of one advisor after another. I think quite like that. So yeah, he likes the idea of being a king. Now, our porking Charles isn't like that, but at least he's sort of connected to that, so I can see the glamour.
And he lives in palaces.
I mean, don't you think he'd rather like to Mister Trump would like to move Buckingham Palace to Washington put it in the middle.
I think the Oval Office makeover is very reminiscent of a classic European style palace. I'm thinking of a particular French one setting aside interior decorating. And Joe knows that I could certainly talk about this for much longer. But you know, you mentioned this idea of Trump as king,
and you also mentioned this idea of trade adaptations. And one of the things that's happened since the Iran situation is Trump has come out and said, well, if you can't get oil from the Gulf and your Europe, why don't you can come to the US and get oil from the US. And I'm very curious how statements like that play on the ground in Europe, given that, on the one hand, this is a situation caused by the US.
I think it's fair to say that Europeans regard Trump as somewhat unpredictable, somewhat somewhat doing an impersonation of British understatedness here, and then his message to Europe is basically, well, you know, trust US for your energy security.
Yes, well, I think the trust US has definitively gone. That's hardly news. I think that's true worldwide. I'm just trying to think, does anyone actually trust this guy? Because being untrust untrustworthy seems to me the core of his modus operandi. I mean, he wants to surprise people, and he does in both directions. So nobody in Europe believes now that there's any promise that will come for this administration that is to be believed. And I think that's
true pretty well for everybody. That's understandable because it's consistent
with the evidence and the behavior and even what he says. However, Europe is in a very very unfortunate position, which is that it grew so dependent on America for so long that pretty well all its structures, its defense system, very obviously, but also the things it didn't bother to produce itself, for instance, the whole tech array, the trade relations, the investment relations, and of course the underlying ideologic ideology, the sort of liberal democracy they imported.
This all came from America.
I mean, we were wrong to say that it wasn't there. A lot of this wasn't there before in different ways. But after the war, the first and second together, it was so shatteringly demoralized as a continent and so damaged. I can go through with the damage done to all the different major countries that the US became the core of every aspect of security, believe trust. They were very very content with this. So whether they were naive or
not very interesting question. It's all come as a colossal shock. Now Trump one was when they the first administration of Trump was a wake up call. But in the end it wasn't so bad. They felt oh well, full of sound and fury, but didn't signify that much. In the end, he didn't do much so as he didn't change great policy, didn't withdraw fromim NATO. He filled his administration with the sort of people we're familiar with, we like and trust,
those sorts of Americans. This is a shock. I don't think it should have been a shock, but this is a shock.
And in the.
First year, when suddenly you know your trusted spouse, as it were, that very much, the relationship turns around and becomes a violent bully. You're sort of shock, but worse, you don't know where to go and live. Who do you get to, who's your alternative? Do you want to become friendly with China?
Not really?
Do you want to become friendly with absolutely not. And are we strong enough to survive.
On our own in all these different.
Dimensions, of course not. The vulnerability of Europe is staggering. Do just think what would happen if the American administration has decided if he could decide that to just close off our access to the American digital stack, as it were, cloud computing, all the rest of it. So then the question is, well, what do you do? And I think they're still really and truly the Europeans that at the early stage of deciding what they want to do, and
they find it difficult to agree, very difficult. There are so many of them with different attitudes, values, historical relations. They don't trust one another. Very important point, by the way, you know, the European history is not so far beneath the art the surface. So I think we are there at the stage of absolute intellectual, moral confusion.
But they don't trust Trump.
I mean, you sort of anticipated where I was going to go with my next question, because you know, you've written about the threat to democracy that both in Europe and the US that you perceived the Trump administration as posing, and you mentioned that perhaps Trump actually prefers China to Europe at this point, And it seems like, as you've written, the administration seems to have two specific big critiques of Europe. One is a particular conception of free speech, which the
administration does not perceive Europe as upholding. And then of course immigration, which they would associate with civilizational decline and so forth. Interestingly, in your writing you acknowledge that both of those they are stranger their kernels to both critiques, that the Europea government has to take seriously border control
maintaining those liberal values around speech. How much harder does it or like, you know, how does your charter path while also taking into account those factors which may have some grain of reality to them.
Well, one of the problems we have is we don't feel, looking at the whole range of what's going on in the United States, that this administration really does believe in free speech conception. The mildly quite a bit of hypocrisy going on. I don't think I need to lay that out for your audience, but there I suppose a number
of different elements in this story. The I think that the administration is right, but I don't think it's a I don't think they're honest in their critique, but that some government it's my own included, have gone too far in protecting people from what is called hate speech, and that there is a perfectly good argument that both in private institutions, universities and so forth, and in public you don't have a right not to be offended.
That's clear.
However, my view also is that there are some forms of speech that European history will see where it goes with American history suggests are profoundly dangerous. And the one I used in my example of this is that if you're lecturing Germans on the import which is started in the most notorious start of this was Dvance's speech in Munich last year in twenty twenty five. Well, the Germans feel that it really would have been a pretty good thing if they'd stopped Hitler saying some of the things
he said. Indeed, if they'd removed him and put him in prison for a very long time and not instead of just letting him out when he was put in prison. So there are questions of what how far you allow speech to be free. It's a fine doctrine, but it seems actually the administration to believe there are lots of things we really don't want people to say so that's an issue there. But I think there's a critique there
on the civilizational thing. I think, and I wrote this in my book, that one of the things that define a state, and certainly a democratic state, is the possession of borders a state and a citizenship which is associated with a state in a democratic context is exclusive by definition. It is the values universal, but citizenship is not by definition, and that we get that or going all the way back to the beginning of these ideas for our in our ancient world, the Greeks and Roman view of what
a republic or a democracy was. So I think that not controlling your borders and making sure that the people who come to live in it, particularly the people who come to live in it permanently, are people you've chosen. It's been a political process in which you've chosen them, is essentially in violation of the citizenship compact. And I wrote that at length, and I think it's perfectly understandable how many citizens would feel, we don't want everybody in
the world to come here. It would create some very very big problems. And I think the view on the parts of the left, quote unquote progressive left that borders should basically be abolished is not compatible with the survivor of any form of democratic notion grounded a citizenship. So
I'm very clear that was a big mistake. What worries me more about the concept of democracy that is emerging, which you see in the Trump camp and you saw in some of the people admired, like Victor Uban, is the idea that if you are elected, anything you do by definition is democratic, and that is absolutely incompatible, inconsistent with obviously the core premises of the Constitution, particularly what we would think of as the Madisonian principles, that there
is such a thing as the tyranny of the majority. So even if somebody has a majority very rare that they do, that doesn't entitle them to do whatever they want. Constraining institutions are the core of a republic, the republican idea, and we are I am concerned that ideologies that reject that on the left and the right are being have been reborn over the last twenty or thirty years, perhaps a bit longer, and that's what the Second World War
was fought against in a very extreme form. So I'm not comparing them with that, and So while I agree that there are important elements of the critique which are serious and we should take seriously, which I've mentioned, that the critique doesn't seem to me to be coming from an honorable place. If the aim is to prefer preserve republics, if the aim is to preserve ethno national dictatorships, which mister Putin would certainly agree with, then that's something else. But that's not my side.
I feel like it's become a cliche at this point to you know, no matter what happens in the world, people always seem to say, you're is like the loser. Yeah, it's good for Europe? Right? Is there a sliver of hope down the line if we think that one of the things that Europe has struggled with is you know,
strategic autonomy and managing all these different national interests. And if we think that, you know, maybe the US emerges as a force for Europe to you know, unite against or maybe encourage it, motivate it to develop some form of like centralized strategy or autonomy. Couldn't we see like a more united Europe out of the situation.
Well that's one possibility, and it's a possibility that pretty much everyone who's a friend of mine who's European, and I suppose I one would want to see. I think it's important to understand why it's so difficult, And this gets back to the sort of like the historical tragedy of Europe. How do you get to be where it is? I wrote one column on this which I'm particularly proud of it, so I will repeat some of the argument.
The essentially that Europe transformed the world. It's absolutely nambiguously the case. This, this peripheral you can call it, the continent, is really just a promontory of Eurasia six or seven hundred years ago, was pretty irrelevant, and it ended up conquering motion of the world and completely transforming the world intellectually, culturally, scientifically, and politically by creating these vast empires and one product in which was the United States. And how did this happen? Well,
there are many argiments about this. There was a shared civilization and profound political rivalry.
That the one core element.
Of European history since the fall for the Roman Empire is that it was Christian and divided. And so the European states evolved in conflict and they became very very very good at it, extraordinarily good at it, so good at it that once they really got going, they ended up I conquered so much of the world. It's still
very shocking that they did, you know. I still think think of how few thousands of English people succeeded in conquering India in the middle of the eighteenth centuries, completely freakish. So this fragmentation was a core of it, and the cultural development, the scientific was also the core of that. Because when there was a problem with one state trying to suppress certain sorts of thinking, people moved everywhere somewhere else,
or the ideas moved somewhere else. So there is this idea which I think is right, that the.
Division of Europe actually made it.
I think this is very very powerful idea and correct, and China's unity held it back because it didn't allow for this competition. The Europe was built around competition among the states, among the rulers and within them. As a result, partly because of this, I won't go through all that
because it takes too long. So then at the end of this magnificent process, not surprisingly, when the modern states were emerging after the Industrial Revolution, nationalism became the way of mobilizing the people for the first time, you really created mobilized societies. Before that, the armies were predominantly professional or class based armies. The French really invented the universal conscription state. And this came culminated in the two World Wars,
which completely shattered Europe. Shattered that its idea of itself, its confidence in itself, and its values. Because look what happened in the the death camps. So europe triumph.
Ended up in a catastrophe.
And that's what europeans. I'm old enough to remember all this. I was born in just after the war.
Not the colonies, not the colonies.
It was actually Europe itself that destroyed itself in the end, by the way, that led to the direct liberation of all the empires, because they didn't have the power anymore to do it. And America was very keen on it's breaking it absolutely right by the way. So anyway, Europe said after that, we have to be something completely different.
This is really important.
We have to be something completely different. But the most important we need to unite. But we're still state member states. We have different histories, languages, cultures, and so forth. We can't get rid of that, so we must cooperate. We want someone to look after us.
That was the us.
We don't trust ourselves. We've lost trust in ourselves. Very important British least, which covered this because they got through it, so they decided that they would. They feel we can be outside it. We're an island, but the others, with the enemies to just across the border everywhere. Go back to that at the end of the world. So we left everything to Uncle Sam because he was a kind, generous uncle. We've made a few odd stake but maybe we trust it.
That's how we.
Got to where we are. This is my ten minute history of Europe. Now suddenly you're saying you want us to become a superpower. You want us to be a great power with an army and a will, and we don't trust any of that stuff. The last time we tried to do that, we blew up the world. This is not this is not nothing. It's still there, the desired, the will to power, the famous isn't really there. So that gets to the answer to your question, what do
I think will happen? And I think that's exactly the struggle now because you could see in a sense, there are two forces in Europe today.
One is a centrist liberal.
Rather mild desire to create an effective Europe, which isn't really a state, but is more of one than now. That's the center and the other side of the right wing nationalists. But the right wing nationalists are nationalists.
They're not European.
Because when you start going back to who the nation is, you go back so France less Germany, but it's going to happen. Italy is Italy is a peculiar story. I won't go into that. But in France, the French right is nationalist, protectionist.
It doesn't see itself as Europe.
There aren't any nationalists in the sense that Dvance is a nationalist or Trump is a nationalist.
Who are European nationalists? It doesn't.
That's an excitement. There are, but there aren't many. And in political will terms, then you have this either mild centralizing desire to pull together be a more effective club I would like to see, or it's yes, we would like to be a great part, but it's the nation. And as one famous European politician once said, in Europe there are small countries and small countries that don't realize they're small.
And so if you honestly.
Ask me how this will play out, I have no idea, and I don't think anyone does. I know what I would like to see, I've indicated it, but that may not be what is possible. What you really need is a European Charlemn or Napoleon, and that doesn't come out of this because there isn't a European with that will. The last European will to make Europe was that's what he wanted to do. It would have been a German right, and before that was a Napoleon. Before that, Luis Cator's
briefly mentioned. So I think the question of what Europe's future is what it can be given its history of fragmentation and the extraordinary life that came out at this fragmentation.
I think it's just not a toll clear. But there's no doubt that America is helping if it does develop an independent sense of itself with its own institution's sense of destiny, sense of identity, very difficult in a multinational state like this, enteredy like this, then it will be because the Americans of saying you can't trust us, We're going to beat you around the head. If you don't sort yourself, maybe that will count.
Had a fantastic sort of overview of the history and the core challenge. I'm curious. Look, predicting the future is impossible, so we will just stick to the present. In the past, the UK left Europe. So the UK left this sort of structure that was put in place to sort of denationalize the content continent. So join accidentally, but also like, okay, so the UK and theory has more sovereignty now than it had when it was part of the EU. What's
it doing with that sovereignty? Because it doesn't look like it's been able to put it. You know, it looks like more or less the struggles of continental Europe and you care more.
Or less shared.
Well, what's holding the UK.
It's a perfect example of a small country that didn't realize it was a small country.
They thought.
The people who sold this sold this in part because they said this will stop all these immigrants. It turned out actually we could do an stupendous job of accepting immigrants from everywhere else in the world as soon as we stopped the Europeans. So that was sort of they were sold a Bill of Goods on that was pretty obvious. They were told we would be able to do all sorts of wonderful deals on our own, and we've done
a few minor deals. One of the deals we were promised was a free trade deal with America that certainly didn't happen. The point is Britain on its own is a minor power. So the idea that the liberating ourselves from the EU will mean that we would suddenly have huge choices to trans form ourselves and our relations to
the world was a fantasy. Now that's one side. The other side of it is, of course that a very large part of what we had in common with Europe, the welfare state, we had a relatively undeveloped one, but we have it in common. The problems of our economy, de industrialization, the difficulty of coping with Chinese competition, for example, become more obvious. Are weakness in technology well we share
with Europe. Britain wasn't different from and therefore didn't have completely different options from European countries.
We're very similar in the.
Germans, and they're all different in a certain ways, have different strength. But actually in the big picture, Britain is just another European country. How else what else could it be? Look at its history. The only difference has got this tiny little water weight between us, and that's preserved independence.
I'm not saying it's nothing, but essentially the opportunities and the challenges for the British economy essentially those of Europe, and leaving the U hasn't suddenly given us an enormous number of new opportunities which allow Britain to transform itself. And certainly, no British political leader, and I can say this with some confidence looking at the whole lot, have any fundamentally new ways of operating here which are going to transform the performance of the country.
And that's become more and more.
Obvious, and it will be even more obvious if Niger Faraj orzach Polanski becomes the next prime minister. Nobody offers a coherence strategy for solving the problems of Britain as they are now, and it's partly because they've actually genuinely become very very difficult.
Since we've been talking sort of broad strokes history throughout this Yes, can you give us your thoughts on what is the world that the US is ultimately working towards, inasmuch as you can try to eke out a coherent strategy from the Trump administration, like what is it that they are working towards.
I'm almost speechless in response to that very very good question,
because it's very difficult. Part of the problem, I think is I see a separation between Donald Trump as a person, very him, obviously charismatic and exciting, and his views of the world from that of the various different elements of the coalition that he's put together, which is a pretty strange coalition pretty intellectually, culturally, it includes obviously a very large number of spectacularly wealthy and powerful business people, some of whom have a religious belief in the future, and
at the other hand, it includes intellectual elements and people who have a religious belief in the past.
Pretty obvious they want to.
Go back to a theocratic state or theocratic state structures. They want to establish, re establish patterns of behavior and relations between men and women, between racism so well, which sort of old fashion. So there's a blistering new and a crusted old as it were, trying to work together here there are intellectual elements and then relatively small numbers I presume and a huge mass are very dissatisfied people, particularly as far as I can see men and old people.
What do these people have in common? So you answer the question, And what do I think America is about? I don't know, because I don't think this the Mega movement broadly defined, if I can use that word, knows what it wants, because I'm not saying that individuals people don't, but.
They don't share anything that is completely Trump Trump.
So if I understand this view, what they might share and as long as somebody like Trump is there, Trump wants to be Okay, I think that's pretty clear. He wants to be a man who says my word is law. That's pretty obvious. He wants to rule a state which is free to do anything, which is anything he wants, and is bound by no constraint or law or rules external or internal. And look, Ataus would have understood this.
I mean, it's perfectly understandable. This is how much of point of much of humanity was rules since the agrarian age. Any Egyptian pharaoh would have understood this. So he wants that. He has no ideology really beyond that, except it is very very important to make clear in every bilateral relations he thinks bilaterally that he's the boss and the others aren't, and so he will throw his weight around, particularly against anybody who thinks is essentially not showing improper respect in
various different ways. So Maduro, so the mullets, and that's important. It might be only constrained is my own sense of morality.
Well you will work out what that be.
So that is what he wants, what he wants to be, and he will naturally respect people who are like him. The movement, I think, has multiple different objectives. Some of them would like the United States, which are coincidence with Trump, to the United States to be a nineteenth century great power like Britain in eighteen fifty Palmerstonian and Britain. You know, we have no friends, that no permanent enemies, we have permanent interests. That would be a more intellectual version of this.
And obviously lots of them think that, but some of them pretty well. Obviously hexath Is is a Christian crusaders, a completely different set of ideological aims. Vance seems to be an isolationist. So there's nothing coherent there. And so in the end, when I look at this I think this is Trump's party, and with Trump, what you will get is action, but not intellectually grounded, pretty ignorant.
He will use a lot of power.
If he doesn't work, he will withdraw, Thank heavens, That's what I see. It doesn't seem to me that we're looking at the US under this regime and looking at the people around that has a coherent sense as a whole of what it wants to be and what it wants to do. That's terrifying because it is the most important country in the world. It is the guaranteur of the system, which I'd like to point out works sensationally
well for the US. So one of the most astonishing thing to me is that if you look at it from outside the US, I mean, I think it makes incredible mess of its own policy and politics. It could do much better, But the US is a spectacular success. Whereas everybody want to change everything, it seems very difficult to understand, you know, if you compare it with the Roman Empire, the United States is sort of in the second century, so what's the problem. But this US is
what I see now. It could change, presumably, though I have no idea whether it could change durably. And this is my last point was very much a part of my new PostScript for my book. You won't restore confidence in the rest of the world that the US sort of knows what it's doing and what it's about, has a coherent sense of itself just by a defeat in one election, because that's not it. That's not over. You have to think that this has become unthinkable and that doesn't
seem to me likely looking at it. So the honest truth. And someone lived in America for ten years a foreigner, but I lived there follow it closely. The place has become completely bewildering, and a completely bewildering superpower is absolutely terrifying. Nobody likes China, nobody really, but they know what it's about.
It's predictable.
You know how the regime works, you know how the system works. Do you know what she's trying to do that one can with. It's very difficult to live with a country with this power which is as completely bewildering as this one has become. And I've tried to give you some sense of how I think about it, and in the end, what I do is see an incoherent movement of people full of resentments and hatreds, including amongst
one another. But also I'm against other Americans, the rest of the world, and Trump, who is sort of You can make sense of him as long as you accept he doesn't operate in a way that one would normally think of as rational. So when I think of a ruler, I mean like him, I think of Nero.
You know, there's a million ways we could have things I could ask you.
Isn't that you're cute to ask about Roman Empire history? Isn't that we could go You're a middle aged guy, That's true.
You know what I yet I have one you know, said I.
Studied Roman history.
You did.
I studied classics, so.
I read a lot of Ancient Greek and Latin.
So you are always, in fact thinking about the Roman Empire.
The first and best column by Fire wrote about Donald Trump, it was in March twenty sixteen when I said Donald Trump is how great republics to meet their end? That was the headline, and it compared him with the Caesars Julius and Augustus, who Tavian who basically ended the Roman Empire.
But they were far cleverer.
You know, you mentioned that Europe excelled during a period in which there was competition among the states but also the shared and you used the Christian civilization when I figured, you know, you mentioned that.
They did have two hundred and fifty years of religious war along with that period.
But I'm curious you mentioned the sort of like the mild liberal you know, not quite a European nationalism, but this like sort of mild liberal desire for some sort of Europe that exists. You know, one thing I think about like should there be maybe philosophically maybe in practice, like does it would it go along well with the
revived Christianity in Europe? Because when I think about secular liberal Europeans, I one thing is like nobody goes to church, but historically a lot of liberal ideas were you know, co located, so to speak, with Christian ideas, particularly around sort of like equal rights, And there's a lot of framing. Does that could that underpin or could that be a tailwind for a sort of reinvigorated Europe if it found that sort of spiritual vector. Again, one of.
The things that I think is very important in which I didn't stress in the the history of the last one two hundred years, particularly the twentieth century, is Europe spawned a lot of ideologies, spawned all of them. So obviously every variety of Christianity you can imagine, which they happily fought over from much to their history, Orthodoxy, Catholicism, Protestantism and so forth, and of course socialism, communism, fascism,
the dominant ideologies of the world. And one of the things that happened as a result of the religious wars, which were devastating. Arguably the most destructive single war in European history, though it's very into a particular place, based in Germany, was the Thirty Years War of the early seventeenth century. I believe something like thirty percent of the population was killed, and it was many other things, but it was also a religious war. So that was the
seventeenth century. Everybody believed that. The probably is when everybody really believes in something, they often find an excuse for killing people who don't. And I won't didn't talk about
what happened to Jews. And then of course the same thing happened with nationalism, which led to some pretty spectacular wars, and communism that was more mass murder internally, so Europeans became and this is part of I think European culture, civilization after the Second World War became exhausted with ideology. We wanted to stop that because when we I think it was very widely shared. Whenever we got one of these,
we ended up with mass murder. And the truth is, nothing bad has ever happened to the US except your idiotic Civil War, which should never have been fought because of the civil because slavery should have just been abolished by then. It wasn't justifiable. So the point is, but one of my favorite statistics, and I can't remember the exact figures, but if you compare the number of Americans who've died in war, I think it's a somewhere over a million, including the Civil War million and a half.
You can probably give me the exact figures. In Europe, it's many tens of millions. So the idea of really believing in things, really really believing things to the point that you actually want to go and kill people who don't share those beliefs, which is where it seems to go, is very very frightening. Now, the younger generation now may now have forgotten enough history to start it again so
it might, it might happen, but that was a dominant part. Yes, we wanted to defend ourselves against communists because it was one of those ideologies, European ideologies that had gone pretty obviously. We had realized most of us Stalin's death camps meant in terms of deaths.
So Europeans didn't want that.
And we look at when I say, I look at these europe Americans now with the enthusiasm for ideology and for passionate belief and also all I see is people who want to come and kill their neighbors because they have the wrong views, or they're the wrong color, or they're the wrong whatever. And that's Europe, that's European history.
Hecatombs.
Now, the problem with that is, if you carefully, it's toleration is your dominant mode. You can accept everybody except the intolerant, and you crowd them out. That doesn't last. As you rightly say, sooner orly can people start getting passionate beliefs again. And we may be moving in that direction.
But I'm one of those people who thinks once you're in that mode, it's very difficult to find the off switch, because sooner or later everyone around you starts thinking looking like an enemy, and so I don't want to go that. And most Europeans of my generation or even somewhat younger don't want to go that because we bear the scars. And I think in a different way, why do the Chinese in the end accept the current regime because it works and it doesn't kill them all, and they don't
want to lunatic again. So we're not going to become go where you are, because we tend to think where you're going could ultimately lead you to some very very dark places.
I wasn't expecting this conversation to be so sort of state centric in many ways. But since we've gone in this direction, and since again we're talking about the long arc history here and society, can you talk a little bit about the impact of AI on you know, if we think about the social contract between a state's population and its political authority, what does it mean when work starts to be automated, when maybe culture becomes more automated.
I realize this is a very general, big picture question, but if anyone can respond to this, you can well.
I think of this as the ultimate Faustian bargain. The devil promises infinite wealth and power to Faust in return for his immortal soul, which is in some sense he's meaning, and he makes the bargain and it doesn't end well. So we have been fantastically innovative and creative, and we have in the process made ourselves vastly wealthier and wiser in some obvious ways.
But we're always the.
Brink of catastrophes a result. And the last thing that really motivated people around those lines was nuclear weapons created. People like Einstein got terribly frightened about what they created. Well, I think of Ai that way. We have made a Faust, Embarkin, and we have created a servant quote unquote with the capacity to replace us or even in some way to
dominate us. Where this will end up, I don't know, but it seems to me there are a number of absolutely terrifying dangers I think, And I thought for the first time I've read about it three or four years ago, that it was going to prove completely unregulatable. It would competitionive process and so forth, it would make institutions that used it unaccountable in some profound way because decisions were not being taken by anyone you can hold to account.
It would create transformation in our society, in our economy, and in our sense of ourselves, which was in avoidably just of an ordered magnitude different from anything that it can't come before. And in the short to medium run, a lot of this would seem very helpful, very encouraging. We will we will enjoy it, we will be able
to do things we couldn't do otherwise. But if we do get to artificial general intelligence, and it's absolutely clear that the machine dominates humanity in terms of what it can do intellectually in every possible way, then there is an existential question, obviously, is what is humanity for and
what does human beings think there for? So when I thought about this, and I leave aside the of his dangers, the creation of pathogens, we can't possibly manage the creation of armies AI run armies, which are completely bought armies which could control human population is just flesh and blood with such all this is absolutely terrifying. And we're dancing into this and souciently under the direction of four or
five geniuses and their companies, and that's what's happening. My instinct, probably those of an old man with grandchildren, is it should all be closed down, but of course it's not going to happen. I do think it's transformative. I think it's going to be transformative in business.
Is pretty clear.
They're going to be powerful business models. I can perfectly well understand that ten years from now there will be no Martin Wolves because the computer will do it so much better, though they'd be less fun. But the I think we just have to say we are stepping into the unknown. We should do our best to work out what their big dangers are and focus on them. With
our current politics, that's impossible, clearly impossible. I think it is a huge moment in human history, possibly the single most important invention, and there have been some very very important ones, and human humanity will change profoundly. Humanity was changed by writing profoundly. It was transformed by publishing, by the ability to print. It was transformed by the Internet. I think this is probably more important than all of
these put together, but I'm not sure. But my instinct is I'm a great fan of Frank Herbert, the June books, particularly June itself, and his idea that at some point in the past there was something called the but Leary and jihad in which at the end of which machines that think were banned. I wouldn't be terribly surprised of one hundred years from now people, if there are people still around, we'll say we should have done that.
Dune references were also not where I was expecting this conversation to go.
But science fiction is better on this sort of stuff than anything else. Yes, as a great science fiction writers. Asimov is another of my fans, my hero. Sorry, he wrote wonderfully the Laws of robotics, and nobody seemed to be thinking about those either.
We should get a list of recommended sci fi books from Martin and put it in the news letter. We'll follow up with you afterwards. Martin Wolf, another amazing conversation. Thank you so much for coming back on our thoughts.
That's certainly not what I expected.
Thank you so much. We'll chat with you again next spring.
Okay, Joe, that was fascinating. Indeed, I feel I feel a little bit like I was back at university getting a history lecture. I also just realized, since we've come to London from Madrid, we could hit maybe four I want to say, four more European cities and get a complete European colonial tour. So we just got to go to Lisbon, Paris, Brussels. That's three.
We really need. We need to make a we need a European tour, we need we need to make this a recurring spring trip to London. There was so much in that conversation that was interesting.
I do think so I do think Martin hit on something. And it's funny because this came up in our conversation from last year as well, where we were talking about the dollar reserve system and the idea that like, yes, okay, there are downsides to having the world's reserve currency, but there are also a lot of upsides, including being able
to run a massive fiscal deficit. But like his point that it's difficult to understand why so many Americans in particular are so aggrieved as to want to blow up an existing structure that, compared to the rest of the world, seems to have benefited them enormously.
I love his point about the sort of like and it raises some questions about the short term future, like just a few years from now, of what is the Trump coalition. For example, there's a really big difference between the AI focused Peter teelworld versus some of the people would like a world to go back to the nineteen fifties and so forth.
Another thing that.
I hadn't really appreciated until you articulate it on the Europe question. You know, when we joke about the EU and they love their documents and their reports and their studies and regulations and stuff like that. But this sort of not just Okay, let's put in some mechanisms to avoid World War two again or something like that. With the sort of the complete.
Exhaustion of ideology.
Yeah, it's such an interesting, such an interesting framing. It's like every time we've gotten into some new ideology, it like end terribly. So it's like, let's let's make the attempt of sort of creating a post ideological super state in somewhere. It's such an interesting framing and like, I don't know, like maybe it's that was Maybe that's an experiment with a finite, finite time span.
I guess we'll find out. Shall we leave it there?
Let's leave it there.
This has been another episode of the Odd Lots podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.
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