Dr Jordan B Peterson and Roy Sebag discuss financial investing, the intrinsic value of gold, and man’s relationship to wealth and the natural world.
Roy Sebag is a self-made entrepreneur who has innovated across multiple industries. He is the author of the newly published book “The Natural Order of Money” which is about the intrinsic relationship between people, money, and nature.
Dr Peterson’s extensive catalog is available now on DailyWire+:
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– Chapters –
(0:00) Coming up
(1:09) Intro
(3:00) Early Investing, writing Warren Buffet
(10:30) Aiming for Alpha
(12:15) Old-school views of macroeconomics
(13:00) Stocks versus commodities
(15:01) Stocks against time
(17:32) Why value investing is insufficient
(19:56) What constitutes value
(20:50) Economics as a means of truth
(21:30) Elitism in trading
(23:00) Mining and call options
(25:50) Buying toward intrinsic utility
(29:01) Permanence and decay
(32:01) Abundance and intrinsic value
(37:28) The allure of gold, the growing shortage
(40:22) At odds with modern economics
(45:30) A theology of wealth, material and spiritual
(49:00) Let nature take its course
(51:23) Returns from the land, working with it
(53:00) The two classes, artisans and aristocrats
(56:30) Proxy commodities: emblems and essence
(1:02:01) Pre and post subsistence
(1:03:00) Jewelry as a token of memory
(1:04:58) Newton, alchemy, and the gold standard
(1:07:45) You must produce for the privilege to consume
(1:12:03) The energy crisis, war in Europe
(1:15:00) Order and divine unity
(1:17:10) The Natural Order of Money
(1:22:03) The natural economy
(1:26:32) Work and leisure: a broken balance
(1:29:37) Entropy as the degenerative force in nature
(1:32:03) Sustainable games
(1:38:50) Superior money
(1:44:01) Logical errors
(1:47:47) The true loss in centralization
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Hello everyone there's still some Tickets available for a few of my later Announced upcoming shows in Fort Worth February 10th Everett Washington February 19th Toronto March 7th Tampa March 8th Fort Lauderdale March 9th Tickets are available online at Jordanbpeterson.com Hope to see you there If you believe in God then you believe That the world was created and if the World is created Um then you know ipso facto the natural Order itself is imbued with with the Order in the natural order the Regularity and the vagaries they're Imbued with us with a sense of morality The material world's a lot more Spiritual than we might conceived well Well one of the ways you you can think About that practically because it sounds Like a strange abstraction is that if You and I decide that we're going to do A joint venture in relationship to Mining and we don't treat each other Fairly and honestly the probability that Our mining Endeavor is going to be Successful is pretty much zero yeah Because we're going to run into so many Entanglements over time that it's going To make the Practical operations Impossible and so you might say that in Order to come to some concordant grip
With the vagaries of the natural world There's an ethic you have to manifest And that seems to that seems to be part And parcel of your sense too that to to Operate morally also means to align Yourself self with the proper rhythms of Nature and to pay attention to the Proper ratios of scarcity and their Principles of the natural world that you Have to abide by in order to play a Productive game [Music] Hello everyone watching on the YouTube Platform and Associated podcasts I'm here today with Roy sabag who I met About a year and a half ago Uh continuing my investigation into the Field of Economics I suppose in monetary Policy monetary conceptualization as Well something I'm woefully Undereducated in relationship to Roy's Had a remarkable career as an Entrepreneur businessman and as a Thinker he's recently published a book The Natural order of money which is what We're going to talk about today trying To puzzle through just exactly what Constitutes money and how it might be Productively contemplated Psychologically biologically to some Degree at least in terms of its Potential biological implications Economically sociologically Philosophically theologically kind of
We're going to try to cover all the Bases as Roy's book does and so I Thought we'd begin this conversation by Uh having Roy talk about his background So that all of you who are listening Have some reason To understand why he's doing what he's Doing and perhaps why his ideas might be Regarded as compelling and credible yeah So Roy Um we met a year and a half ago You started to talk to me about About the thought that you've put into The idea of money for really for what's Decades really eh and then you handed me This manuscript which was an early Version of the book and we've been Talking about it to some degree ever Since there are variants of it and so Let's walk through your the history of The development of your businesses so People can get an idea of the range of Activities that you engaged in so what What did you start with on the Entrepreneurial front the first thing I Started with an entrepreneurial front Was actually buying and selling uh Physical Minds so uh iron you did that How at all how old uh probably 25 yeah 25 26. so that gave you a taste for for Real World engagement because there's Something very concrete about about Minds and and from what you've told me You you went and visited a number of
Months yeah and so and so how did you Get involved in investing in something As complex as the mining industry at Such a young age and why did you pick Mining it's actually a good question so When I started in finance I was what you Might call a value investor in in the Graham and Dodd method which is the the Method espoused by Warren Buffett and a Lot of the famous investors so the idea Was that you were looking at a share of Stock as a piece of a actual business And your task as a security analyst was To um essentially value the business Come up with an estimation of value Known as intrinsic value and then you Would seek to capitalize when the price In the market was at a discrepancy or a Delta from that you know estimation of Intrinsic value so so you had to learn To investigate something like intrinsic Value conceptually right from the Beginning right that started you Thinking about what intrinsic value Might actually constitute in some deep Sense I would presume absolutely but in This case uh the method is simply an Abstract one I mean you know you're Looking at financial statements so You're analyzing um filings the Companies that are publicly traded have To make such as 10K filings 10q filings Or annual reports in other countries and Then you're learning to study basically
Three statements the balance sheet the Income statement and the cash flow Statement and you're building models Either in your mind or in actual Spreadsheets and you're looking to see If you can make an estimation of Intrinsic value now normally what you're Doing is you're taking the sum total of Potential cash flows that the business Might earn and then you're discounting It back to the present at an appropriate Discount rate now this becomes very Important Um so so you're actually what you're Really doing is you're valuing time Um but but I I don't want to get into That just because it's a bit of a Complex issue um but the other aspect of This of this Theory uh or or method of Investing is Benjamin Graham the founder He had this view that the stock market Had evolved into a kind of um Dual nature Beast on the one hand there Were speculators that were just trying To buy something and sell it for the Sake of you know like a hot potato But the actual for a quick profit for a Quick profit right um they were like the The merchant in the bazaar that was just Turning over their inventory but on the Other hand there were the business Owners the large shareholders uh the Proprietors and to them the machinations In the market the daily movements were
Meaningless So the way they looked at a business was Actually what was the profitability of The business what would the potential Dividends be uh what would the sum of Parts of the business be in liquidation And what he noticed was uh he called it Mr Market you know Mr Market shows up Every single day and tells you that your Share of stock is worth this or that and He's kind of a schizophrenic you know One day he says your your Shares are Dear uh and and the other day uh you Know they're not and your job as a Security analyst is to disregard those Daily machinations the only thing that's Important for you are the actual Business results right so you're trying In some sense as a value investor to put Yourself in the seat of uh business Owner yes and to see what the productive Potential of the business is over time That's right right right and so in some Sense you have to get down to whatever The fundamentals are and it's not so Obvious what the fundamentals of a Business might be that's right so you Have to familiarize yourself with with a Few things but but on the surface the The idea behind the method it is that You would take the financial information That's available to everyone you would Come up with an estimation of intrinsic Value you would use you know your your
Discounting mechanism whatever it is and Then you would go out into the market And look for these situations where There was a large discrepancy right so Essentially when you're looking for a Good a good purchase yeah you're looking To buy a dollar for 15 cents or for 50 Cents now here's the problem As Benjamin Graham uh family famously Said in the short run the market is a Voting machine but in the long run it's A weighing machine that long run we Never truly know how and why it happens But mysteriously uh eventually in time Uh companies will trade at their Intrinsic value and what often happens Is they'll overshoot their intrinsic Value or their undershoot their Intrinsic value right now this idea Because the short term is trying to Estimate that with within parameters There they're indeterminate that's right So as you stretch the arrow of time you Find that the kind of volatility that You see in the short run Um somewhat disappears but but there's a Problem here because there's nothing Guaranteeing that the share of stock Which is basically a security it's a Claim especially for a minority owner With no rights to just take control of The business shut it down and cash out The intrinsic value there's there's not Necessarily a um
A forcing mechanism uh that would that Would cause a share to uh to appreciate Your intrinsic value and and and Oftentimes uh or as would be uh believed In modern economic theory the market is So efficient that if if investors decide That a share of stock should trade below Intrinsic value there's a reason for it The Market's sensing something in the Future uh whether it's um you know there Are hypotheses in some sense correct me If I'm wrong that that value investing Of that sort is in some way impossible To do consistently consistently that Would be the efficient market hypothesis Right that all all actionable Information is in some sense already Priced into this stock and then the Hypothesis would be that even people who Routinely outperform the market are Doing that not because of any of their Intrinsic wisdom but because they They're statistical outliers they've got Lucky in some statistical sense and Sometimes even consistently or the Corollary that they'll tout is uh that Those people are just providing Liquidity at certain moments that's kind Of the the newer way of arguing it but That that position is just plain wrong I Mean I I wouldn't be where I am today if It were true well the problem I had with That position is that if that's true it Sort of invalidates the idea that
Intelligence is useful because the world Is about as unpredictable as the stock Market and yet we seem to be able to use Our intelligence to negotiate through it And so I have some what would you say Um Uh uh Sympathy For The Proposition that An intelligent analyst might be able to Get an edge on the other one on the on The perturbations of the market anyways You did do that and I you were quite Successful and what do you think made You successful and you've continued to Be successful financially in other ways But what what do you think it was that You brought to the problem especially at Such an early age that enable you to be Successful and what did you learn by Actually going to the mines and and so Forth well we're not at the mines yet Yeah okay so this would be me just Basically uh picking stocks in a vanilla Way both long and short but employing This method which I definitely Internalized you know at a very young Age I you know would meet Warren Buffett And write him letters and have lunch With him and things like that Um there was nothing wrong with the Method in fact I think the method is the Only way to outperform the market over Time and that's why all the great Investors are generally value investors For the last 15 years or so 10 years or
So uh value investing has gone out of Vogue um but all of those investors are Now making a comeback many of which have Produced really positive results in the Last year in 2022 so if you're going to Try and um generate Alpha as it's called In hedge fund parlance Um you you need to be a value investor In my opinion an elf is the differential Between the actual price and the assumed Its own value our performance over the Index so if the Sore I had that wrong yeah it's over Performance over the index that's the Average performance of the of the market That's right so so you need to prove That you're able to generate a return That a monkey throwing darts can't Generate uh because you know there's the Famous experiment where they had a Monkey throwing darts at various stocks And he basically produced the same right Well the idea is that you can't beat Random samples that's right yes Fooled By Randomness Um so no there's nothing wrong with Value investing uh but but for me Um I think it reached a point where it Was no longer Um satisfying intellectually uh to just Sit there and constantly analyze Businesses Um abstract abstractly although I did Enjoy learning about different
Industries and that's another very Important thing you know value investors Need to be versatile enough to learn About the economy itself and one of the Issues I had with the method Intellectually or the school of value Investing intellectually and some of the Mentors that I had was they they Genuinely believed that they didn't need To care about the economy at all their Job was just to look at individual Stocks and construct a portfolio of Individuals detailed focal knowledge Yeah and they used to there used to be These outages in the community all the Time I remember even as a young Young kid you know that nobody can Understand macroeconomics you know the The that stuff is is just a Fool's Errand and there you know you can't Actually Um but but importantly you can't Actually value a commodity because a Commodity has no balance sheet and um They were kind of starting how do you Distinguish a commodity from a stock or Another Financial uh um asset well Commodity is something that's physical So uh its possessor is using it as an Input Um so if you buy a wheat you know you're You might buy it electronically but then You take delivery of it and you use it To make flour to produce bread
Um so we think of those as raw material Yeah they're natural resources that's Right you're not buying it to sell it Onwards you're buying it to consume it Uh whereas so it's an input into another Process that generates value from those From those initials that's right in fact It's the fundamental input as I'm sure We'll get into a stock is is basically Um a contract uh you know a a note a Piece of paper that says that you're Entitled to a share of a corporation and Corporation themselves are these Interesting entities which are you know Relatively new in the history of of Humanity joint stock companies um the Idea before that that was that you would Normally create a partnership pool Capital and when you died your other Partners would have to buy you out but With stocks you've created these Entities that essentially live on Forever with just the shares Changing Hands Um right a more abstract form of Ownership but what that allows it to be More distributed allows risk to be more Distributed that's right Zoom allows People diversify more easily that's Right but what what that achieves is a Kind of Illusion where once a stock is Traded on a public exchange and it has Um shares slushing around every single Day
Investors begin to impart a sense of Timelessness uh or um entropy resistance To a share of stock right like it's a Thing yeah you can't conceive that Apple Will not be around in 100 years right Well but it turns into our psychology Very interestingly because if you plot a Stock and you see it going up if you see If you see a physical entity going up Yeah it's still moving at a pretty Decent rate you assume it's going to Continue to go up it's very difficult to Shake that at when you're looking at a Storm chart because you have this Built-in embodied proclivity to assume Things like inertia it's going down very Rapidly and things going down rapidly Tend to go down rapidly to continue that And there's no reason really to assume That that's the case at all with the Stock because well if you could then you Could predict the stock and then of Course you could make a lot of money so But there's actually an even greater Problem which is a historical fact that Um if you stretch time none of these Stocks ever survive so uh when they hit Zero at some point well they actually Disappear they go bankrupt or they get Reorganized and um so when Charles Dow Uh who worked at the Wall Street Journal Um or sorry at the Dow Jones company in The 19th century um formulated the Initial Dao index of 30 companies it's
The same Dow index you have today right Index is the same however there is not One constituent I think U.S steel the U.S steel is no longer in the Dow yeah There's not one constituent in the Dow Today from 130 years right so you're Trying to measure something that's Caught you're trying to measure that's Right whose constituent elements are Transforming constantly that's right but You're but the double illusion there is That the index value itself Um becomes uh an an idea an object right You know it becomes a security in and of Itself Um so so people like always I mean you Know some of the greatest economic Thinkers uh Nobel laureates uh will make This error uh but the whole industry Makes this error and what they do is They'll say Um the the value of the index has gone Up this much over this many years uh but The problem is that the index from a Hundred years ago was an entirely Different group of stocks and every time You need to get rid of some stocks Um there's costs associated with it with It and uh many times um is there can you Make an index that's large enough so That you overcome that problem Statistically no no because I suppose it Would take just longer for it to Transform entirely if it had more entity
Season and I know most corporate Entities don't last that long even if They're highly successful right it's About that's it's about 30 or 40 years Yeah right right and that turnover is Probably increasing and that's a good Thing as far as capitalism is concerned Because you know there's there's Creative destruction and failure is in Is an integral component of capitalism But going back to the switch Um There was nothing wrong with value Investing it was fine but there was a Kind of intellectual I became a little disinterested in the Whole the whole way of going about it And I had this problem that now you were Making money doing it yes how old were You when you became financially Independent I'd say early twenties early 20s okay so so despite the fact that you Were making money something was pulling You to investigate something different Yeah yeah and did you know at that point What it was I mean was it just a Diminishment of your interest or could You see interest in something specific Otherwise making itself manifest I Actually do remember one of the things That was it was it was me Um trying to purchase property and um Bidding on a few properties and learning About the real estate market and seeing
The price of houses change nominally And at some point like asking myself the Question what exactly is driving the Price of the house up I know it drives Us the price of a stock up I know that Ultimately Um stock is a share of a business which Generates income but what exactly is a House like why is a house worth more Today versus yesterday and I remember Thinking like very clearly like wouldn't The house actually be decaying over time Wouldn't it cost money to upkeep the House Um and and so that was when I realized That value investing was insufficient For understanding economics and that was What I was really interested in was Trying to answer certain questions I had About how the economy Works in and of Itself and Um and I also uh had this real problem That Commodities Were Somehow excluded From the value investing method and so I Started learning a lot about Commodities And I I was just fascinated with you Know the periodic table and the fact That so it sounds like to some degree You were starting to become interested In basic like really basic philosophical Notions of value per se right remember When I was a kid 17 or so I read this Book uh Zen and the Art of Motorcycle oh Yes wonderful great book yeah well it's
Really an investigation he called it an Investigation into quality right into What what what is it that makes Something of higher quality than another Which is really an investigation into Value and yes my career was driven in Large part by an investigation into Value and that might be maybe why our Interests parallel to some degree Because you were interested in value Very practically but then you also Became interested in the idea of value Like abstractly what constitutes value Why does it dynamically shift and change What drives that is that merely a Consequence of human interaction I mean That's that's something that persik Investigated in and said in the Art of Motorcycle Maintenance right because we Could assume that value is no more than What we say it is right it's merely a Matter of human agreement but but the Fact that there are commodities for Example this is something your word Points to indicates that while it's not Merely a matter of human agreement Because there's something basic about Basic Commodities right there there are Some things that we that we cannot do Anything at all without and I suppose Water would be the most basic of Commodities or air in that in that Particular case so there's some Fundamental relationship between human
Subjectivity and the objective structure Of the world and so maybe that's alert You like lurking at you underneath I Think that's that's exactly what it is I Would just change I I don't love the Word value I would say I was searching For truth and I think that there was Always this inherent uh intuition that There is objective truth and what I Couldn't reconcile even even in economic Analysis absolutely economics is Reflecting The Real World Um and so my issue I think was that the Commodities were objectively true you Know these were real entities that were At the heart of all human activity and Cooperation but then when it came to the Sort of sophisticated financial analysis Commodity trading was seen as a kind of Um uh you know inferior art form you Know the people in the midwest did that In the Futures Market Um the real intelligent people were were Hedge fund managers in New York City What do you think accounted for the Prejudice so to speak the elitist Prejudice against commodity trading Because you'd assume that if the goal Was To understand and to make money and Maybe with the latter primary that why Would there be any elitism in Relationship to the to the methods of Trading was the idea that in some
Somehow it was simpler to analyze the Commodities markets you think that would Make it more attractive though well the Fact is it's not simpler because if if It were Um you know you would have incredible Investors in that space right but They're a very small group of investors That have done well primarily building And operating mines Um but in terms of trading the Commodities themselves there aren't There's maybe a handful of good Investors Um no it actually has to do with with It's a mirror reflection of of the state Of our society and our economy so our Economy became more abstract more Service oriented and the velocity of Activity Um you know was was increasing the tenor Of of activity you know if you just take A a you know basic example of how Publicly traded companies you know used To report their financials once a year Now they're being forced to report every 90 days now they're making projections Every 90 days to what they're going to Report in 90 days Um so we're building an abstraction Hierarchy on top of the commodity base Yes and the and and status as an analyst Seems to depend on your operation at the Upper levels of the abstract I wonder if
That's partly well that's where you're Going to make money too so so you're Going to make money in all of these Frontier so-called Industries Um whether they're in stem or whether They're in um you know High Finance you Know Financial engineering derivatives Complicated things right so there's a Novelty there's a novelty contribution There is that the Commodities trading That's an ancient business yeah that's That's a physical physical business Physical clearing so remember the issue With the stock is you buy it and you Never know if the stock will be weighed Benjamin Graham claims that it does over Time Um but as I said it might it and it does Over time but you never know exactly When physical markets are entirely Different right well if they buy Here Apart pork belly's future and you don't Trade it in eventually you get the pork Bellies exactly and once you get the Pork belly the transactions close right You no longer own anything if you want To buy another pork belly future you Have to decide what month and delivery You want so that the farmer who's Producing it will sell into that Contract and settle the trade so so the Fact that you have Um full clearing and settlement in Physical Commodities is very interesting
From a financial lens because it means That you always have that objective Arbiter of Truth you know you can't just Defer things indefinitely and I think That also attracted me very much Um to the industry but basically what I Did was a fundamental corrective in some Sense yes right a fundamental reminder Of your of your union with an underlying Structure that isn't arbitrarily in some Sense isn't arbitrarily ordered by human Beings that's right that's right and I Think that um for me I was trying to Express what I had learned in value Investing through the world of Commodities and so this brings us back To the mining chapter what I ultimately Estimated was That if you take a mine in a stable Geopolitical jurisdiction so say in Canada or in the United States or in Europe you know depending where in Europe Um And the mine had already Been geologically explored and and thus There was an ore body which was Delineated in other words we've drilled Holes into the ground we know what Exists Underground And you bought that mind but you didn't Actually mine you you just bought the Land Um what you were essentially doing was
Buying a call option on future weight of Commodities in the future which you Could always extract from the ground Okay explain that a bit call option so You're leaving it like like it's a bag Yeah it's a vault in the ground you're Betting that the future value will be Higher than the present value otherwise You'd mind now that's right right There's a reason why you don't want to Mine now and and the reason is that You're estimating that there's going to Be more money floating around and so the Price of the commodity will rise over Time but you're also betting that the Cost of extracting the commodity will Not rise as fast or decline that's right Well they don't normally decline they Rise with inflation Um okay just like everything else Because you've got basically three Inputs in mining any commodity like you Have three inputs in doing anything in The economy which is energy labor and Time and and labor you know in inflation Always Rises and energy always Rises and You know when you actually have Inflation you have to raise interest Rates then you're basically increasing The cost of time as well the price of Time Um but that was my idea you know it was It was it was a novel idea there were a Few people that had done it successfully
Um that I looked up to but I had the Idea of kind of building an aggregation Of these deposits and so I I raised Money from some investors I cashed out Some of my own money and I did that and I chose a few Commodities that I thought Would be integral to society I was Trying to make a prediction over the Over my lifetime and I used to say you Know to my investors that I'm trying to Imagine you know like right before I die Which Commodities are still going to be The ones that are most important and so I I chose Um copper which is one of the most Important metals that we have in the Periodic table it's antimicrobial it Conducts energy Um it's it's just a a fascinating metal There's no end to the to the mysteries Of copper uh I chose silver which is the Most reflective of metals and is also an Incredible uh conductor of energy and Antimicrobial Um and I chose zinc which has medicinal Properties and is used in in a variety Of applications right so the periodic Table just so that everyone is following This is the layout of the structure of The elements of the of the cosmos that's Right right and and so if you decompose Material structures to their most Fundamental elements above the uh like Say subatomic less right then you end up
With about 116 fundamental elements the Top 15 or so mostly are man-made that's Right so there's a very finite set of Elements and all the elements have quite Spectacularly different properties and Right and that's intrinsic to their Nature right right which is which is Very important because there's really Nothing else like that everything else Reduces back to these elements these Material constituents of reality Essentially they're like the the Alphabet of reality in some sense yes Yes Um yeah except that human beings didn't Invent them yeah I used to say they're Like Legos you know they're pre-given Legos and then you can rearrange them Um and and do more than just rearrange Them but essentially what you're doing Is you're rearranging them Um and and so so it was yes silver Copper uh zinc uh iron ore uh which was A lot more interesting back when I was Doing it these days it's it's less Interesting as we're not building as Many things but obviously iron ore is an Input uh for steel uh or any kind of um Metal production and then why did you Why did you focus on Metals particularly Well actually uh there was a flaw in my Thinking that was only corrected uh in The last six years Um I had uh thought always in terms of
Longevity stretching time you know how Can I buy as much time as possible and My problem with the soft Commodities are Livestock Um was that I was thinking that uh you Know their their They diminish faster right so you're Looking for permanence that's right so You Associated that with Metals Absolutely because you know if I have a You know 100 tons of wheat I have to Store it somewhere and it's deeply Decaying as I'm storing it that's right And even oil if I try to store it you Know is evaporating at two or three Percent a year so you have to store it In Salt caverns and inject water and Then that costs loads of money Um but but with Metals you know you mine Them once especially the precious metal The pressure smells are the most unique Ones Um but you mine them once and what's Cool about owning the the mines is is They're in the ground so they're not Oxidizing yet you know it's only when You get them out of the ground if they Start to oxidize right so they don't Decay more further than they have Already that's right and and so that's That was uh the general idea Um and so I did that for a few years and I learned so much about Um geology and the natural world and I
Was just shocked to see that there were These intrinsic relationships not not All only in the natural attributes that Each of these elements possessed but in Terms of the relationships of the Natural attributes to the other elements So in other words Um you know there's a there's a Important metric called crustal Abundance and that's basically the the Average rate at which an element exists In the Earth's crust and it's obviously An imperfect a standard of data because You might go in your backyard and drill A hole and you will not find uh that That that Um you know material right it's not Uniform it's not you're informally However when you're talking about ore Bodies something that is actually being Mined for the sake of extracting the Resource that is generally the average And you can you can infer absolutely and Measure something like comparative Rarity absolutely as a consequence even If it isn't homogeneously distributed so One of the features of the periodic Table of the elements is that all the Elements are not equally distributed That's right there's an intrinsic income That's right but actually it turns out That they are all relatively equally Distributed uh you know on an on a Continent or Nation basis you know
Almost at a country level I mean you so It's a geographic territory is large Enough yeah and this is important for Later when we get into the notion of Scarcity and and and uh you know people Always always have qualms with you know But isn't it fair it's not fair that one Country has this or it turns out that Pretty much every country has what they Need uh in terms of the important Elements um and if they don't they have Something else that they can exchange For the important elements Um but so I I learned a lot about that Uh world and was fascinated by it and Spent quite a bit of time with Geologists Um yeah you told me a funny story last Night yeah we're talking about a Nobel Laureate in economics that you had Talked with Who was convinced that the value of Money was uh not attached in any Fundamental sense to the structures of The real world in the manner that you Claim it is and you told me that he Didn't know that there was genuine Natural variation in in Crystal Abundance of different Metals that's Right so yeah yeah so so this was a Nobel Laureate who said uh and it is Recorded somewhere Um that the reason that copper uh is Valued at X and gold is valued at Y is
Just subjective you know people have Decided to Value Copper at this level And gold at that level and I responded By saying but don't you think it's a bit Mysterious that the the price of copper Reflects the same crustal abundance of Copper in other words copper is 5 000 Times more abundant than gold in the Earth's crusts and if you look at the Price of copper per ton in the market It's roughly 5 000 times right right Right right well this is a key goal Sorry gold is five thousand times more Expensive right well this is a key point Right because that was part of what Clued you and to the to the idea that Value per se including Financial value Was not merely something that was Subjectively determined that it also Bore a relationship to something like Abundance and ease of access now there's An interaction between the two but the The fact that abundance in your Hypothesis places an intrinsic Constraint on the parameters within Which pricing might vary and is it what Even data point that that should usually Be taken into account both practically And conceptually and it's important here Because partly what we're trying to Understand is what is the relationship Between human systems of value that Would be pricing and the actual natural World as such and that's like a that's
Like a an investigation into the Relationship between brute empirical Reality and the domain of philosophical Value right so it's crucial it's a Crucial issue and and practically it Would be well it might help you invest Better and then you'd know what to do With your money but it's also crucial Conceptually and so okay so now you you Also said to me at one point that there Is a rough equivalence in the ratio of The value of metals to one another Across time in relationship to the Relative abundance and so with silver You see the same thing with silver in Relationship to Gold that you see with Copper in relationship to Gold Silver's Rarer than copper yeah we we never wake Up one morning and see that an asteroid Really did hit and these relationships Were appended entirely we never really See that Um you know all of a sudden uh uh you Know zinc becomes the rarest element you Know or or aluminum becomes the rarest Element we go back in history and what We see is that Um something like gold was always Understood for its intrinsic natural Attributes but also as being extremely Rare and that there are certain things That are more abundant than gold and yet Uh closer to gold and Rarity than they Are to Something Like Oxygen um so so I
See that as a kind of natural order Unnatural right right well yeah it's a Limit that there's a natural reason why People for example gravitated towards Gold and silver and bronze often but That's causing essentially as Hallmarks Of monetary value right let's see where That that was an attempt an attempt what Would you say practical and conceptual To tie the system of abstract value to Some underlying natural phenomena to Keep the value system pegged to the Structure of the world I I would say it A little different I would say that There was no notion of abstract value That basically you would have these Different Commodities that were produced For their utility for their usefulness And as they were being produced rather Than having a coincidence of wants or Barter or some kind of inefficient System uh people recognize that each one Of these Commodities were a common Measure and of the other ones right in Other words I can trade you two bushels Of corn for one gram of copper and then And that wasn't an abstraction that was An actual it's about that was even a Trait of intrinsic value it's it's Literally a balance scale that's Weighing the weight of these two Different Commodities and then Eventually so that's not precisely only Social contract dependent no it's not
This is this is basically just uh I Would say it's metabolism metabolization At some point it's it's you have some Energy that I need right and I'm going To give you something that you need Um and we're basically helping each Other we're nourishing each other's Souls Um but but the thing is that at some Point one of these things begins to be The de facto measure for all the other Things and so that is what you see with Metallic money whether it's gold or Silver or bronze or even iron in some Some uh civilizations but it's important To remember that every civilization that Deserves the name civilization in the Historical record would have had a metal As money and would have had a monetary Unit which had a weight rather than some Abstract nominal value like a dollar or Five dollars it would have been Something like a pound so you know a Pound in this country Sterling means Silver a pound is a weight of silver That's what the pound would have been Um so so I was figuring all of this out Um and it actually led me to a a real Appreciation of the Exemplar qualities Of this one element which was gold [Music] With the start of the New Year upon us What better time than now to start Building a habit of Prayer just like
Physical exercise daily spiritual Exercise is critical to your well-being Especially in a world where attacks on Faith and religion are happening all Around us every day Hallow the number one Christian Prayer App in the U.S and the number one Catholic app in the world helps you Maintain a daily prayer routine It's filled with studies meditations and Reflections including the number one Christian podcast the Bible in a year Download the app for free at hallow.com Jordan you can set prayer reminders Invite others to pray with you and track Your progress along the way Make this year your year for spiritual Growth and peace Get an exclusive three-month free trial At hallow.com Jordan that's hallow.com Jordan So so when you were analyzing Minds How did you learn which Minds to invest In and then let's go that concrete route First and then back to the abstract what Did you learn about value investing in Relationship to Minds in particular and Then how did that inform your decision To focus more particularly on gold well Actually I did something quite quite Novel even in regards to that I figured That as long as the Mind truly had the Uh the material wealth embodied in the Mind because it was drilled out and it
Was audited and it was basically tested Through a public disclosure file uh That's that has to go through a Securities Commission or something like That I it was worth owning that mine even if It wasn't necessarily clear how you Would get that mine permitted and so I Was buying Minds that um you know some People might say would have a difficult Time of being permitted and I felt that Over time the communities would work These things out as the as the value of The of the of the world intrinsic values Uh what perspective to begin with yes Because your notion there is that Because forensic value yes the market Which would be the regulatory Environment in some senses would you Verge on appreciation of the value and You can see that now in the UK where You're burning coal again exactly right That would be a perfect example so Someone like me I never invested in Coal But someone like me might have purchased A coal mine six years ago uh for pitting You know because people told them this Will never be permanent again right and Then but it's cold yes exactly you can Burn it yeah and I would argue that with Coal you know the argument isn't so Clear because you don't necessarily need It you know coal is a great source of Energy of course in terms of its energy
Density and in terms of the UK having a Lot of coal nearby Um cheap too yeah but with Metals it's It's easier to make that estimation you Know so you just give you a very basic Example if if the world truly wants to Electrify uh the global Fleet of of cars Um we basically don't really have enough Copper to do that based on what we know Today the reserves the economic reserves So at the very least we're going to be Taking down a lot of mountains uh around The world if we want to get just the Amount of copper that we're estimating You know to sell 100 million cars a year And the same is true of something like Nickel which is we can just solve that By forbidding people to have cars well That's that seems like what might happen Um but with nickel it's even easier and And with gold it's it's the easiest Easiest in in what way in terms of You're always at a shortage of gold it's The hardest thing to get out of the Ground and it just keeps getting harder And harder and harder so there's this Difficulty curve uh it's almost like is It harder than uranium is it harder than The even though yeah uranium is quite Abundant actually the thing about Uranium is it needs to be enriched into U208 or whatever YouTube and so so That's the real cost in it it's not the I mean there's quite a bit of uranium
Around the world and it's Crystal Abundance is is you know it's not not Special at all Um uh you know why is gold particularly Rare That's a why question so we know we will Never know I mean it's it's you there Are a theory theoretical physicists that Um Postulate about Neutron Starks colliding And things like that but I don't think We know these the answers to these Questions I think it's a it's a mystery Why it is that we have this pre-given Set of Legos yeah okay and and they seem To be uh in use uh since time immemorial And and in my book there's appendices Where I try and identify sort of the Beginning of of the use you know it's Kind of like when someone asks you when Was the wheel invented when was the plow Invented when was writing I don't think We know because because in the extant Text that we have the oldest we already See a society uh you know pregnant with This activity so so we see uh in museums And in um archaeological discoveries Just not only this this knowledge of of The elements the metals but we see the Techni the ability to craft wonderful Objects from these from these elements That have kind of moral significance Um and so I think when you take a step Back which was what was happening to me
In my 20s uh and you look at the natural World with a sense of wonder in terms of Of my biographical Arc I was starting to Come back to the natural world you know I was starting to see that you know the Theoretical physics and and those Explanations of reality weren't going to Satisfy my desire about the truth but The natural world was there was still That sense of wonder that just like that Question you asked that I can't answer I Don't know why gold is the way it is It's just a pre-given reality Um and so I you know became quite Fascinated with gold and also invested In gold mines and at this point I moved To Canada to Toronto where you're from Because that was kind of the mecca of Mind Finance you know Toronto is the World's most important Financial market For Mining and unlike Um in the United States where the great Majority of companies at least before The last crash uh are service industry Companies in Canada the great majority Are real mining companies uh and all the Best engineers and geologists and banks That know how to deal these companies Are based in Canada so I learned a lot About that I invested in it and at some Point I made the mistake of trying to Mine the Gold Because I felt like some of the mines Were ready to go or I invested in some
Companies that had mines that they had Developed and were ready to mine and That was when I realized how hard it was To actually make a profit Mining and I I Yearned for the days of value investing That my mentors used to tell me about Um And it hit me one day just seeing these Continued losses and unexpected you know Vagaries of nature you know all of a Sudden something just goes terribly Wrong you weren't predicting all of a Sudden there's a flood and I realized You know you're actually better off just Buying the gold And then holding on to it or using it Then trying to get it out of the ground It's cheaper if you if you consider all Of the costs it's probably cheaper to do It that way and This was also interlaced with Um me shifting my intellectual area of Focus from you know Finance to economics And monetary history and I realized that A lot of the questions I had about the Inner workings of the economy centered On the question of what is money how do We cooperate what makes that cooperation Sustainable and uh you know no surprise Here in terms of the arc it became clear To me that the money had to be rooted in Nature and it had to be one of these Right now that puts you at odds with Most modern economists and value
Investors and and okay so why modern Economists and then why value investors As well well the basically the the whole You know the word economics economic Economical or economia you know in Aristotle's politics it means household Management so it was something that was Rooted in the in the family in the land In the house and over the course of you Know 2 000 years Um around the 19th century uh the whole Study of Economics becomes denaturalized Um you know with with people like mill Saying that you know the the whole Purpose of our activities to conquer Nature and uh figures such as Stanley G Vons who who began to postulate that you Know every exchange of goods and Services is just a ratio of two numbers Uh there's no limit to human desires Um and so what happens in economics is a Kind of mathematization of Economics you Know it becomes the study of the Abstract over the study of the real and Economics you know for most of its History was a was a branch of natural Philosophy but now it kind of becomes a Social science or a you know a Exactly it's exactly that and um you Know decoupling because I mean the the Whole post-modern revolution in some Sense decoupled meaning again in the Same way from the world right meaning It's just an arbitrary social
Construction just like identity it's Only encoded in the relationship between Concepts that's right same it's exactly The same idea operating in a different In a different sphere well perhaps it Was the economic turn that also Influenced a lot of that and I think When I look at Austrian economics for Example which is very popular and it's You know loaded with this language of Subjectivism Um from from that philosophical turn That takes place uh I I definitely think The seeds were planted with the Denaturalization of the economy but the Economy was always viewed I mean there's Nothing new in my book there's uh some Contributions Um and perhaps a reminder rediscovery There's some perhaps some minor Rediscoveries but really it's it's a Reminder of what we always thought about The economy and what we always thought Was that If you were even going to use the word Wealth uh you were referring to Something physical and something Material and the reason for that is that If You observe reality objectively Um the only place where you see growth Is is in that physical world of you know Either biology through reproduction or When you plant one seed in the spring And you reap two uh in the fall and and
And so you're only really you're an Interesting thinker in that regard Because I mean you have a very Materialist view of value but you also Have a philosophy that that extends into A Theology and you also believe that There is such a thing as spiritual Wealth right and I I suppose in some Sense the idea of spiritual wealth is Also an abstraction of the idea of Wealth and and how do you conceptualize The relationship we haven't talked about This at all before how do you Conceptualize the relationship between Spiritual wealth that's abstracted say Given that it's spiritual and the Material wealth that has to do with the Actual tan tangible like grip on on Physical substances Well if you believe in God then you Believe that the world was created and If the world is created Um then you know ipso facts facto the Natural order itself is imbued with with The order in the natural order the Regularity and the vagaries they're Imbued with us with a sense of morality So you can't separate in the natural law Itself encompasses both both the moral Right realities but also the right okay So for those who are listening I'm so Sorry about that what that means is that The material world's a lot more Spiritual than we might conceive well
Well one of the ways you you can think About that practically because it sounds Like a strange abstraction is that if You and I decide that we're going to do A joint venture in relationship to Mining and we don't treat each other Fairly and honestly the probability that Our mining Endeavor is going to be Successful is pretty much zero yeah Because we're going to run into so many Entanglements over time that it's going To make the Practical operations Impossible and so you might say that in Order to come to some Cordon grip with The vagaries of the natural world There's an ethic you have to manifest And that seems to that seems to be part And parcel of your sense too that to to Operate morally also means to align Yourself with the proper rhythms of Nature and to pay attention to the Proper ratios of scarcity and to take Into account the limits that the natural World They're not so much limits they're Principles of the natural world that you Have to abide by in order to play a Productive game and then you'd say There's a concordance between that Bottom-up morality which is practical And the top-down morality which is more Spiritual and Abstract the the the term Uh in the uh 18th century it was used by A French economy it's a term that now
Has come to dominate the libertarian uh Economic thinkers of the day Wasen which meant let nature take its Course and so you don't want to do Anything that prevents nature or Inhibits nature you don't want to Dam up The river you don't want to manipulate The material reality in this alchemical Or Gnostic way you want to let nature Take its course just like you want so There's a Harmony there that's right and So so you see nature as a gift you see The wealth that arises from nature as a Gift and you see any kind of growth as Being correlated to the material Realities and the first thing that that Arises from that kind of a world view Which again was was first nature it was A first principle of Economics until This denaturalization Is the importance of the farmer You know a natural economy Is predicated on the activity of the Farm well then that would be another Potential reason why the this Denaturalization occurred I mean what What how in 1880 what 90 percent of People were basically employed on the Farm and now it's like three percent Yeah and so you could imagine that There'd be uh running away from the Boundaries of nature that parallels Urbanization and and because it's an Abstraction process it's a real sense
Absolutely but um You know the the importance of the Farmer is is key and and remember when I Said earlier when you asked why didn't You invest in some of the soft Commodities or I had missed this in in My 20s I I only rediscovered this in the Last few years where I myself returned To my roots and and began farming again Um see what I missed was that the land That the farmer is tending to Coupled with the farmer's wisdom the Farmer's toil the farmer's ability to Respond to failure and change uh to the Caprices of of nature Um that that coupled with the land Produces a kind of yield a kind of Return which over time does multiply So if you have a flock of sheep and you Have a hundred sheep well you know You're usually gonna get two and a half Sheep per annum for each uh pregnant uh Sheep that you have and so you will Produce more than you had at the Beginning of the year and it just Becomes a function of how many sheep you Can fit per acre of land to feed them But the the excess sheep that you're Producing which you sell allow you to Make allows you to purchase more land Which allows you to then expand your Farming activity and so livestock it Literally means Um you know a Capital stock of of
Biological uh organisms that are Reproducing and and you know it's not Exactly the same with crops Um but what is true of crops is that the Land that you have and the work that You're doing is going to guarantee you a A a a kind of material abundance from Which you can at least sustain yourself But in what most likely cases you'll Have a surplus which you can then trade On for the things that you don't produce And again there's nothing new in terms Of of my ideas in the book here Um up until jivon's uh the economy was Always viewed to be broken into two Classes the productive class and the Unproductive class the unproductive Class were generally called The Artisans You know they even had a nice name it Was never an issue of like mutual Hostility or Elite versus you know Inferior aristocracy it was just about There are people that work with nature To produce these physical things which Then get traded on to this other group Of people that use those things they Improve them uh they change them they Consume them but at the end of the year Those productive people have to go back And negotiate with nature whilst the Other group of people has that option They can either revert back to that Activity or they can wait and hope that The service they're going to render uh
And this includes manufacturing you know Any any anything that requires the input From the land uh would be in the second Category and so in my book I call it the Real economy versus the service economy So so okay so the real economy the more You're in the real economy the more You're dealing directly with non-human Nature that's right right and so the and The the last year dealing with non-human Nature so the more your financial Transactions are only dependent on Social relations the more you're in the Secondary economy in the certain economy And so part of your hypothesis in some Senses even though there is a disconnect Between The the real economy and the service Economy that grows with time as more and More people are in the service economy If the service economy doesn't bear the Mark of the relationship with the Underlying natural order it's going to Become part of the ways that are that Are that are eventually unsustainable And counterproductive well then it's Just parasitic so so it's it's demanding It's dominating a a Class A group of People right let's provide that might Also be exhausting them well and Exhausting the natural react well Because it's not heating the signals as Well yeah but that that's a whole a Whole nother thing I mean I deal with
That briefly in the book you know for me What was important was just to see that The the activity every exchange of goods And services whether it's taking place At the real economy or at the service Economy Ultimately needed to be measured in the Same way that the farmer's activity is Measured that the miners activities Measured that the coal miner or oil rig Worker This activity is measured and that that Measure is not a human construct that It's part of that natural order that the Measure itself you thought that was Embodied or still think that that was Embodied in some real sense in metal and Best embodied in Gold it's actually Embodied in anything that's natural Right sorry I mean commodity yeah it can It can it can even theoretically be Embodied in a rock But the thing that it's going to be Embodied best in is going to have two or Three qualities First it has to outlast time it has to Be something that retains its material Existence without change over time right That makes it a reliable Storehouse of Value or reliable measure it's an hinge That never changes it's an inch that's Always an inch so a gram of gold will Always a constant it's a constant right The other thing that it has to have is
It has to have a sense of difficulty and If possible it's like proof of work in Bitcoin well we all know that you know Satoshi was a mirroring Um you know the process of of gold Mining of course with Bitcoin there's Forgibly scarce proof of work bits with Mining you have the physical gold that You get out of the ground Um which you can then pass on to anyone Um So so that difficulty though is not just How rare something is uh it also has to Do with what are the attributes of the Thing Um and so if you lay them out you'll Find that because these Commodities are A common measure and a reward for each Other that you can have one commodity Act as a proxy for another okay now so It's sort of like the idea of an essence Of a essence of commodity itself that's Right you'd say that gold is the essence Of the idea of commodity itself that's That's yes exactly and and and it Doesn't mean that um gold is more Important you know obviously if you're Stuck in a room and you have better Measure yes so if you're stuck in a room And you've got a glass of water it's a Famous Diamond Water Paradox but I'll Use gold and you've got loads of gold And you know you're locked in the room Uh you know you're obviously going to
Choose the water over the gold but That's not how a society that advances From subsistence where it's just Producing the things it needs which then Consumes to post subsistence where There's a market economy that is Developed where there's different people Engage in different specialized scale Skills and where essentially the goods And services are exchanged in that Post-subsistence Society at that point Everything is exchanged for everything Else there's very few people emblem of That exchangeability yeah and and the Point is that in that Society People still have the right and the Option to revert back to subsistence This is another thing that that no Modern Economist really understands is There's always the option to pull out of The economy and go back to the land you Know it happens on YouTube you can see That it's quite trendy with um a lot Harder than people think generally but It's a lot harder but it's more Rewarding you know and and I think a lot Of people talk about that um You know that infused morality that Comes comes with that process but the Point is that you know you may hate gold Uh because it symbolizes something but You can't dispute the natural properties Of gold and so you know one of the Things that really troubles me is um
When I see people automatically label Gold as some kind of a right-wing Conservative thing and um and I think That's just so ridiculous I mean it's an Element on the periodic table and and It's it's it's part of nature itself you Know it's it's a it's a beautiful Element that's used in art and it's used In your cell phone and it's used in you Know so many applications whether you're Going out to space and there's only one That doesn't corrode for example yeah And so you can't say that that gold or Any commodity belongs to a class or a Group of ideas what you can say Objectively and if you speak to any a Chemist or or a geologist they'll all Tell you this that there are just Exemplary properties to this element and So as a result the the property of being Rare and outlasting everything else you Know the tomatoes will have to be Reproduced the Sheep are going to be Eaten and reproduced the oil is going to Be consumed for movement we have to Produce more oil the gold is produced Once and then it begins to serve as a Measure under reward for everything else And how Universal was that among archaic Societies that gold was a standard of Value it's it's basically every single Society you know you you go to Mesopotamia and you look at Hammurabi You know it's primarily silver and
Hammurabi you look at Um you know all of the the Hebrew Bible You know I have an appendix where I go Through the Hebrew Bible and just the Amount of passages where Um you know the the Israelites Are Required by God in law to have you know Honest balance on a scales honest Measures Um you know obviously King Solomon Famously says um all things were made by God according to number measure and Weight the weight is very important here Weight is not like number there there There's a distinction in kind between What weight is and what a number is Um and so things definitely have to be Weighed and you know you there's there's A many ways it always means comparison Of one thing to another well I actually Think wait yeah and I think way is just Almost saying like justice you know it's It's like what is this well we used the Scales as a measure of Justice yeah so You know there's there's examples of uh Of Abraham buying a field and literally You know using the silver earrings of Sarah to pay putting them on the balance Scales weighing them so there's another Misconception uh in economics and Economic history and monetary history Which is you know parroted all the time Is that somehow gold coins were just
Used from the time of King coices in Lydia in you know 700 in the year 700 And that's not true that's just when a King decided to basically get into the Business of you know minting the money Uh but but before that people would just Actually weigh the medal and and they Would just go somewhere and say this is How much metal I have I'm weighing it And in many cases they might just not be Weighing they might not just be weighing Metal they're weighing you know other Commodities that they have but the idea That you would give someone something Some kind of product of your toil Um or render a service and not get Anything in in return you know this is a A famous idea of David Graber the late Uh uh Anthropologist who I I deal with In the book Um I I just don't think that's true I I Think that that might be true in a Subsistence Society where the bonds of Kinship uh and just a sense of altruism To your neighbor Um you know are kind of familial bonds I Think that yeah but you forget like even Then like I've noticed in tracks I've Made with people we'll be discussing Extremely weighty financial matters and You think well this will burn it in on Your memory and then six months later a Dispute comes up and you think well we All knew what we were talking about six
Months ago but you forget your memory Itself decays exactly you need a marker That's independent of the transitoriness Even of memory when it's motivated by Goodwill that's right and and that's I Think what's really interesting about Jewelry and you know I also have a Jewelry brand which produces 24 karat Gold jewelry and we sell it by weight You know not not a coincidence and it's Called Monet which is the ancient Aramaic word for a weight of gold or Silver Um but one of the things that I I Learned in starting the jewelry brand Was just that the role of jewelry itself And the choice of precious elements for Jewelry expresses something that Essentially what you just said where You're trying to wrap a moment in time Where memory in this case you know I am Betrothed you know I'm marrying you it Has to not Decay it has a portable it Has to be hidable that's right it has to Be memorable that's right has to attract Attention yes the glitteriness would be Part of that yes it's almost like you Know its purpose is to do this right Um and and it's a token you know that's Why we call it a token so so we're Wrapping some kind of event that's Fleeting because time is always moving Us forward Um now what's interesting in the case of
Gold you have this Perfection of the Element which is it's it's Incommensurability with other elements So the Alchemists regarding gold as Noble morally because it didn't mate Promiscuously with other metals right And you can you can deride that as a Kind of primordial Superstition but it's Not because part of the reason that gold Was admirable was because its lack of of Of proclivity to alloy or to the road Makes it permanent and then in the case Of precious stones there's a there's a Perfection to them which is the absolute Regulatory Regulation of their crystalline Structure Um and it's the fact of that regularity That allows them to reflect light and That idea that something precious Reflects light has a spiritual element Because you can say well that's what it Means to be illuminated is so because You reflect light under those Circumstances so there's this weird Mythological parallel between the the Molec or the atomic structure let's say Of of both gold and of of precious Jewels that that that isn't just Arbitrary right it's got this it's got a Metaphorical reality that's overlaid on Top of its yes of its physical rail it's Almost like a semiotic claim yeah yeah But yeah it's like you know it's
Important just to stress though that the Gems are much different from elements Because they're compounds of elements Right oxides and things like that so They're actually not as rare as people Think either uh diamonds are not that Rare and because they're basically a Crystal of carbon you know you can also Produce them by compressing carbon but It is interesting to note that you know Isaac Newton was obsessed with Alchemy And tried for I think almost a decade to Transmute other elements into gold and It was when he finally Um recognized that this wasn't going to Be possible That he was uh Made the master of the mint of the bank Of England in 1694 and one of his first Acts was establishing a gold standard And so it's it's almost like he tried to Hack gold for so many and then failing To give up and recognize you know this Is how I'm going to get create monetary Order out of the chaos of an economy That doesn't have one so he became Convinced of the immutability of gold And that made him a good candidate for Someone who is establishing the Foundations or in charge of what would You say guarding the foundations of of Of the monetary system itself yeah There's a curious passage in the Optics Uh I don't think I can recall it because
I read it many years ago but it's Something like in the beginning it's Clear that in the beginning God formed All matter in such a way where it was Truly indestructible and then he says Something about gold shortly thereafter But Um yeah I know I I think that that and Remember like Newton is someone that Appreciated the laws of nature helped Advance Humanity's knowledge of those Laws in ways that are just unfathomable Today but he recognized that this was an Element that was exemplary and that Money needed to be something that was Physical rooted in nature We'll be back in one moment first we Wanted to give you a sneak peek at Jordan's new documentary logos and Literacy I was very much struck by how the Translation of the biblical writings Jump started the development of literacy Across the entire world The pastor's home was the first school And every morning it would begin with Singing the Christian faith is a singing Religion probably 80 percent of Scripture memorization today exists only Because of what is sung this is amazing Here we have a Gutenberg Bible printed On the Press of Johann goonberg science And religion are opposing forces in the World but historically that has not been
The case now the book is available to Everyone from Shakespeare to modern Education and medicine and science to to Civilization itself it is the most Influential book in all of history and Hopefully people can walk away with at Least a sense of that So prior to this conversation we've Talked about the advantages and Disadvantages of decoupling the monetary System from this underlying the Underlying principles of or constraints Of reality and people who are like late Followers of Keynes have made the Proposition if I have it correct that One of the advantages to bringing the Monetary system under only human control Is that you can inflate or deflate the Money supply to smooth out business Cycles and that would be the oscillation Between bust and boom that can otherwise Be somewhat destabilizing and upsetting Now there's plenty of controversy about Whether it's even possible to De-oscillate the business cycle it's not Obvious to me that it is but also there Are the so the advantages a little bit Of extension of political and voluntary Control but the disadvantage is or one Of the disadvantages is the production Of of of of of devaluation of the Currency inflation essentially and so Let's talk about that a little bit and Then let's turn specifically to the to
The order of the topics in the book sure Well let's look at a few examples Um in the natural world You have cycles of generation and Degeneration So that means that production has to Come before consumption In an inverted economy we see that Consumption is brought forward before Consumption that's debt no just in the Sense that we're trying to stimulate the Economy as though if we stimulate Consumption demand we will somehow Produce more but in the natural world You first have to produce so that you Have the privilege to consume you know The farmer has to produce this crop First In the natural economy We see that these Cycles also breed Um growth and Decay so we don't see Anything like infinite growth in the Natural economy whereas in the inverted Economy we look at these abstract Metrics like GDP nominal growth and we Become obsessed with this idea that We're not only temporally exceptional But we're constantly just you know Piercing through reality itself and Growing and growing and growing and the Natural economy in the natural world Frugality and savings is a function of Your cooperation with nature you Absolutely have to produce more than you
Consume and you have to reserve a Surplus of seed for the following year So that you can you know sow the seeds And reap them again it's this cycle Where you first have to sow then you Reap in the inverted economy we see that You know people are incentivized to Consume first again just like in the Previous example but not necessarily Safe you know not really look out for The future to do as much as they can to Increase the velocity of their activity As much as they can and sort of pursue This this Limitless growth in the Natural economy we see that people have A respect for the land and that they Basically want to work in the land and Follow in the activity of their Ancestors because we see that you know To have an economy in the first place we Have to produce these material things in An inverted economy you see everyone Being told they have to go to university Or become you know in service of the Power structure you know it's idealized To work at Google uh the the farmer's Daughter is told that you should go to University she shouldn't stay and work The land and produce things but how can That be true if everyone worked at Google we wouldn't have the things that We need to produce there's also like This sense of prestige that's lost in The inverted economy and then there's
Also this this feature of the natural Economy where people have to cooperate In a decentralized way you know if you Just look at a community in the plots of Land that surround it if different Farmers doing different tasks and Cooperating then you have a blacksmith And a metalsmith and a you know Barber And a baker and in the inverted economy We see Prosperity as coming centrally From a centrally controlled spigot you Know top down and so it comes from the Center to the periphery Um instead of from the periphery and Building up into a center And so and then when you get into Something like the rate of interest you Know in a natural economy your rate of Interest if you had one if that was how The society wants to organize itself It's not the only way uh through through Lending but if it does it would be a Function of the of the material Prosperity you know the the harvest That Season the amount of capital you Produced from the earth uh and in the in The inverted economy you know a bunch of People sit in a room and decide Arbitrarily what the rate of interest Should be and as we see they can be um Coerced by uh political interests you Know to bail out political failures or Folly and so just you know take another Account so you're saying in in some part
That as you abstract away from the Natural or you introduce the possibility An increased possibility of merely human Manipulation for purposes that have Nothing to do with the maintenance and Stabilization of the productive natural Order so you're you're devolving away From the natural ethic that's imposed On You by the principles and constraints Now it's how do you distinguish that From just a romanticization of the state Of nature you know because there there's Echoes of that in some sense in what You're saying well I'll give you an Example so so let's look at a live Example Um we see that in Europe there's a war And we see that politicians are saying That you know the the the the the issue With the war economically speaking as It's creating uh an energy short a Shortage of energy and so our job as Politicians is to solve this problem so That we can steer the economy back to The track that it was before Uh and so my question would be what Exactly is that track like were we on The right track before in in what data Set were we on the right track and the Fact that over the last 30 years we just See you know rich people getting richer The fact that it's harder to buy a house Harder to pay for you know education for Health Care
Um inflation uh run amok the quality of Our products diminishing the Craftsmanship Um obviously within the technology Bubble we might argue that we're seeing Some phenomenal things and that may be True you know it may be true that Materially uh as as regards to material Technological peripherals things are Incredible but in almost everything else You know the quality of your clothes and The quality of your Um you know actual artifacts that are Made by hand uh they're terrible and so I don't think that we have observed Um You know this system working in the Sense of producing material abundance or Prosperity I I've said this before but The whole notion of prosperity uh has Become divorced from the tangible side Of it you know which is basically food On the table a warm place to live you Know knowing that if I work hard my Children will have an opportunity to do Better than me but more people around The world seem to be experiencing that Proportionally say than than 50 years Ago yes and so that's sort of what I Meant by the romanticization I mean oh You have you think more people are doing Better today than 50 years well Proportionally I don't think that's true Yeah I mean maybe in the developing
Nations but no that's what I meant I Meant in the developing Nation yeah but They're doing that because their Economies are more oriented towards the Real so they're the ones producing all The things that we in the western so you Think we've hit a kind of asymptote in Some fundamental sense in the developed Countries so it's reflected in such Things as the ever escalating price of Housing for young people yeah and just You know it also expresses itself in Society and just you know this this the Decadence of the western society and These individualism and selfishness and The subjectivity that's creeped into our Objective disciplines in in school and Academia Um and you also in our whole consequence Of being decoupled in some sense from The natural order absolutely I think That's anything anything that's contrary To the Natural Order of Things uh is Going to find uh you know itself at the Center of our culture that's an Interesting philosophical claim because You could imagine the Western culture is Really uh an intermixture of two ideas Of logos right so there was a an Objective logos idea that was primarily Greek which was the idea that in the Natural order there's an implicate order Of things and that there's a moral Structure to that that's implicit in in
The world as such right and then on the More judeo-christian side the idea of Order was exemplified more particularly On the spiritual and and personality Side and then the web and the West in Some sense is the laying of the personal Logos on top of the objective logos and The proposition that there's an Isomorphism between the two and your Argument seems to be to some degree so The nietzschean argument is that we've Dispensed with God and are floundering About in nihilism or ideological Possession as a consequence but your Argument is well we've done the same Thing from the bottom up we've divorced Ourselves from the implicant order of The actual world and that's also Destabilizing us well morally and Practically just is that or is that a Reasonable absolutely I I think that you Know I don't make arguments to that Extent in the book I give hints at it And I actually have a footnote where I Say I think this would be profitable for Other people to do Um but I certainly think that the relay Relationship between That natural standard of measure and Reward which the real economy is subject To and the rest of society having that Ability to temporarily forget about that Standard decouple from that it's a fact Of nature so at some point the natural
Order exerts its fault you know I've Often liked I like dealing with real Scientists I like dealing with Engineers I like being dealing with Craftsmen and High quality work man and I think the Reason for that is that they're always Testing their abstractions against Something that isn't merely arbitrarily Human so they pop themselves out of the Postmodern bubble yes and they're They're orientation in the world isn't a Mere consequence of their rationality Right it's got this empirical element to It and within that empirical element There's a kind of unethical logos and so It keeps the conversation honest let me Turn to your book okay so we'll just so Again for everyone watching the book That that Roy has recently published and He self-published it for reasons we may Get into later perhaps on The Daily wire Side of this the book is called the Natural order of money it's quite a Beautiful book it's very elegant it's a Very short book and it's very tightly Edited although it's also a book That for me indicated you know one of The ways that you can distinguish high Quality thought in some sense from low Quality thought is that Ever you can tell in high quality book That every sentence has been thought Through using multiple sentences that Aren't in the book right so there's a
Depth of idea that that has been Compacted into the concepts and there's An Elegance of presentation and it's a Beautiful book and so that's also Extraordinarily interesting but it's It's very straightforwardly written it Reminds me in that sense of Matthew Pajo's recent book called uh this the The language of creation which is about This long and it's analogous to this Book in some ways although more on the Theological side so this book has eight Chapters and so I'll start there's a Little chapter summaries at the Beginning and I'll just throw them at Roy for now and he can comment on them So chapter one what makes cooperation Possible and sustainable between people In the natural world we must turn to the Natural order modern economic theory Deals with analysis in a mathematical Vacuum removed from its wider ecological Environment this work this book is an Exercise and natural philosophy that is Occupied with the synthesis of the Leaving living breathing economy now we Probably covered that yes Time is the fundamental superseding law Of nature it moves forward and is Irreversible Human Action is beholden to The requirements of the present Contemporary economics tends to ignore The condition of our temporality there's One let's we haven't delved into that
Particularly so what do you mean by that Contemporary economics tends to ignore The condition of our temporality So the moment that you take The Moment of production or activity and you Abstract it into some kind of symbolic Value Um You're representing something there is Some truth there but as you aggregate Those values and you begin to refer to Them in the way that you refer to either A stock index or a GDP uh graph over Time You've completely Stripped that that measure from anything Real so you're adding layers of Abstraction yes and it gets more Untenable as the abstraction layers it's Measuring nothing at the very least Um everything has changed since the time You've published The Measure you know Like at the very least that's that's one Problem Um but the but the real issue is that You're trying to Um You're lying to yourself you're saying That somehow I can quantify all of this Multifarious economic activity and you Also allow yourself to have another Party in this case the government Um run deficits or spend money and get
The G in the GDP by growing it and so It's it's just a a false metric you know It's kind of like grading your own paper If if you could conceive of this well we Had started to talk a little bit about Um the dangers of abstraction away from The fundamental economy and one of the Dangers there is well the danger of Government produced inflation because One of the things that governments can Do they're supposed to be printing money Let's say to smooth out the business Cycle but the problem is of course that When you're using a fiat currency that Isn't grounded to something fundamental Is that you can print money more or less At when yes and then you rob the people Who are savings that's what we're saving Essentially and as you print Fiat money The GDP increases nominally right so Your measure looks good yeah it's it's Basically like it doesn't reflect the Underlying yeah it's sustainable it Reflects nothing you you want to look at You know more tangible measures if You're looking to measure the health of An economy start with the fertility rate Because that's going to be where your Real growth comes from Um and so or or start with the amount of Weight of products that you produce Right so so we should just point out for Everyone who's listening that's actually A pretty radical proposition because the
Ethos of our time is that a low birth Rate is better because there's too many Damn people on the planet anyways and You just made the proposition that a More fundamental measure of human Flourishing would actually be a positive Birth rate absolutely but I don't think We even know if we're at that limit or Not because we don't compare the Fertility rate to what our productive Capacity is in the nation you know we're We're mixing services with real economic Activity and then we're measuring them And so the services can be measured There's a lot of really incredible uh Analyzes and um products that that Central banks and and I can endemic Economists come out with which I think Do shed light on a lot of very Interesting questions within the service Economy within the subjective side of The economy but they cannot be the National lodestar you know it just goes Back to what I said the majority I mean I actually think the majority of the People should probably be in the real Economy I think it's bizarre that you Have this situation where a great Majority of the people are not working In the land or are not involved with the Extraction of these fundamental things And I think that what ends up happening In a recession of the kind that we're Facing now but also of the kind we're
Going to keep facing given where we are In this overall Arc of the western Development of the economy since the Suspension uh of the redeemability of Money into gold in 1971 is people will Revert back to the Natural economy you Know they will recognize that it's Becoming a Fool's error and trying to Live in a city and and make ends meet And have you know terrible air quality And all of these things when they can Literally buy a plot of land somewhere And you know start start a homestead and Live off their land and so I think that That's literally what happens in a Recession that's a natural recession if The government doesn't get involved and Try to stimulate and try to keep all the Thoughts decomposes the the excess Levels of abstraction yeah and you know The objector will respond and say well What are you talking about you know look At the Great Depression how what were People supposed to do they were in soup You know they were standing in line for Their bread they where would they go And the answer is that well but what was The government policy leading up to the Great Depression you know the the Government incentivized stock market Speculation millions of people own Stocks there were bucket shops on every Corner of the street and well it is an Open question always how much of that
Cyclical activity you actually want to Suppress right so the idea would be to Suppress the cyclical activity and Produce a linear growth Well the problem with that is is that Even in in well within us yeah our life Is actually a very very delicate balance Between proper death and proper Regeneration so any cell lines that you Have that don't die are cancerous right So I mean the only reason you're able to Live is because you're dying optimally All the time yes so so the idea that Life is nothing but growth that's what Cancer is is life that's nothing but Growth I think there has to be death and Replacement as a precondition for life In some real sense so if you flatten That out of the economy there's no You're your point I think is that There's no signal that you've gone Astray if you artificially suppress like A recession because a recession is a Form of death inside that's right yes That that line you mentioned I I've read It before somewhere yeah that the the Policy of a cancer cell is infinite Growth right exact philosophy of a Cancer yes yes yes yeah that's that's a Great line Um yeah Um no well and you can see that Reflected in certain kinds of Environmentalist fatalism right but
Remember these are Cancers on the planet Right and this is pursue this infinite Growth policy and we want people to be More prosperous but that doesn't mean That growth can and this is where I Think your work is so interesting it Doesn't mean that growth can occur in a Completely abstracted manner that Doesn't take into account the underlying Fundamental principles of the of the Principles of the natural world and it Does go back to time though with this With regards to this because the whole Point we're trying to say is that time Moves forward and is irreversible so any Of your your actions are always taking Place in what we call the present you Know you're always living in the present The past is you know available to you Through recollection and the future is Is coming but it's sort of like always a Present that's becoming the future and Becoming the present Um but at some point you do know that It's finite you know that you're going To die and and everything grows and Decays and so Um the idea of infinite growth is is Already an illusion in the sense that It's it's lying to you as though you're Going to outlive you know your own life Some way through economic contributions And you're not what's going to happen is Is you can make a contribution to the
Economy and through your Offspring Perhaps you know bequeath something to Them which then you know imparts on them A sense of responsibility both to the Land to the community to the state Etc etc Um but it's really not all about that You know in in Latin uh you know the Word otum Means Leisure and the word negotium Means business so business is defined as Not Leisure and I think that's another Thing that we we lose when we Denaturalize the economy we lose the Fact that our goal here is to work for The sake of leisure it's not to work Every single day for the rest of our Lives there's a time for work and There's a time for leisure and I think That in general in modern society Most people are working all the time you Know even in the way that they may have Forgotten how to have Leisure at all Yeah even in the way that they're Ostensibly having Leisure it's still This very quantitative technical work Based gamified experience where there's A zero sum you know how many likes did I Get how many tweets did I do today how Many followers do I have uh did you see This person over here did you see that Everything is just constantly being Ranked in this quantitative way which is Actually entirely subjective and
Manipulable uh whereas what they're Really supposed to do is produce a Surplus which then allows them to either Have a family bequeath that Surplus to The family or live off their remaining Days in in pursuing some form of leisure It could be playing golf or it could be Coming closer to God you know that that Is that is uh within their uh Free Will And rights to do but this idea of Constantly working or even a a country Just constantly working is is so bizarre And you know this is actually what China Does China is a corporation disguised as A country you know they're basically Generating a profit on on the back of Out competing with the rest of the world And and so on an economic level that's a Problem because it's true and and the West has to deal with that but on a Philosophical level on a cultural level That's one of the advantages we might Have in that they don't really tend Towards leisure in the way that I think We can we used to here in the west So that's also part of the matter in Which the ethic in some sense has gone Astray you have ever more work tracing Ever more growth forgetting the fact That the purpose of of work in some Senses you said to enable Leisure and Say to enable play yes play perhaps Being the opposite of toil yes and that That's a true loss of of richness in
Life right right now we're supposed to Work but but there has to be a balance Chapter 4 the human Cooperative system Is also thermodynamic there's a chain of Temporal energy dependency in which the First cause of an economy is those who Work with nature to Source Foods fuels And Elemental substances the real Economy generates energy embodiments the Service economy only consumes them so What do you mean by energy embodiments So energy embodiments is anything that's Produced from the earth that can be Weighed divided and shared and I Specifically say anything that's Produced for you know by the by the by The work of the human hand from the Earth so it can be assault it can be Cattle it can be a gold it can be silver It's any commodity essentially well it's Very interesting that you tie that into Thermodynamics I was I was talking to uh Neuroscientists recently um whose name Momentarily Escapes Me friston and uh Um We discussed the relationship of human Emotion to entropy so imagine you can Calculate entropy by Computing the Distance between your goal and your Current reality and that's a path length Right so there's a certain distance that You have to Traverse to get to where You're going and that distance requires A certain amount of energy and that
Energy that the that distance is Equivalent to the entropy of the Distance between your vision and your Goal Um if that distance increases rapidly That's an entropy increase that's what Happens when a tool fails right because You don't know how to use it in Relationship to the goal it makes you Anxious anxiety is actually a signal of Unexpected entropy increase and then Positive emotion interestingly enough is A signal of entropy decrease so you feel Positive emotion for example when you're Moving towards a goal so decreasing Entropy and the movement works so now You're closer to the goal so the whole The whole emotional system is also Thermodynamic fundamentally in its Essence and you're you're making the Point that the primary the point of the Primary economy is to produce the Commodities that Have an intrinsic entropy reduction It's not just entropy right because it's Also the provision of material resources Like direct food I know that some of That's energy some of it's the Reconstitution of of the material Substrate as well yeah right so so I Think I'm using energy entropy I think In a different way from how a physicist Might use it and perhaps even how you Just used it the way I think about
Energy and entropy after uh wrestling With this concept for a long time is I Think energy is best described as the Generative force in nature an entropy is Best described as the degenerative force In nature yeah so so I'd say that's the Same yeah it's the same so I Concentrated on a different element yeah Of course of course yeah but like so so The you know the rows blooming in Springtime is is energy and and that Same Rose withering literally dying in Front of your eyes is entropy but then But nature you know dies and then is Reborn again you know this the same Nature the same plant will will die and Then give birth all over again it's it's It's like it dies and renews and I think That's uh just just really well you know You know Schrodinger the physicists Basically Defined Life as an Anti-entropic uh phenomenon that's right So so there's something very fundamental About this I'm going to read Three chapters Specifically and then I think we'll Close this out concentrating on what They concentrate on because this turns To the issue of money ecological Accountability Is a fact of nature of all human Cooperative systems so the idea there Would be if you transgress against the Principles of ecology you're playing a
Non-playable game you're going to fail Only the service economy is able to Artificially and temporarily ignore Ecological accountability the Environmentalists make a case like that Although it's more of an explicitly Anti-industrial case right when Ecological accountability is manipulated Or forgotten so that's the relationship Between the economy and the underlying Environmental structure the relationship Between the real and service economies Becomes parasitic very interesting turn Of phrase there parasitic because it Means a parasite actually destroys the Source of value well-consolable right Yeah yeah yeah so there's nothing about It that renews and revivifies the net The natural standard must be reified and Extended to all members ensuring that Ecological accountability remains at the Heart of cooperation so the idea there In some sense this natural standard to Be reified means that the signal that it Contains has to be propagated reliably Through the abstractions of the system That's right okay ecological Accountability this is where it gets More practical is not an ideal or Promise but a lived reality and then we Switch to money money extends the Natural standard so that's that's the Key element of your book in some real Sense yes genuine money extends the
Natural standard in an ecologically Valid manner that's your claim because It's taking that natural standard and It's reflecting it in the object itself It has it has two features any commodity Has two features it's a measure in the Sense that it's a weight of something Relative to other things relative to the Farmer's Harvest this season relative to The amount of land so it contains an Intrinsic information yes but this Information is changing relative to the Natural order but the natural order is The is the Arbiter but then it's also a Reward in the sense that irrespective of Whether it's a good measure or a bad Measure it's something you need as an Input you can do something with it it's Useful and so every commodity has that Feature uh and and and so when we so Your notion with Fiat money is that it's Stripped of its intrinsic information It's neither a measure nor a reward I Mean it's it's which is why the Nobel Laureate would have been able to say Well the only difference between copper And gold is subjective design yeah yeah But you know it's funny because Aristotle in the politics says that Money shouldn't be pursued for its own Sake it has to be something that's a Good that's useful and the Fiat money is Something that's just pursued for its Own sake you don't receive the Fiat
Monies that you can do it right so That's another place where it's Ethically uncoupled is because it Doesn't have that intrinsic value or you Get the ideas usefulness and remember in The cryptocurrency space they've been Trying to tell us now and and you know I Have a a great respect for the crypto Cryptocurrency space but they've been Trying to tell somebody well it's things Can have utility by virtue of them just Being a medium of exchange but with Exchange onwards and they build scarcity Into it yes but I just don't think That's true right you know I I think That nobody you think about it even in Financial markets nobody just wants to Have Fiat money sitting in their bank Account they want to invest the Fiat Money to generate some interest they Want to buy a stock they want to buy Property so so right nobody actually Wants to just sit and own the fiat Currency unless they're buying it on Leverage relative to some other fiat Currency like the Japanese Yen well why Can't you say the same thing about gold Because the gold always has that Embedded optionality to its owner I can Sell it to someone that needs to turn it Into jewelry or I can sell it to NASA Which needs to add it to a rocket or I Can sell it to Apple which is right so At minimum it always has that
Fundamental yeah your choice to take the Gold and treat it as what's called a Storehouse of value doesn't change it's Intrinsic natural utility okay so then You say Money extends the natural standard Promoting cooperation well re while Reflecting ecological accountability That's a very nice sentence by the way It's a good example of the Elegance of Your writing I would say because that's A very tight sentence promoting Cooperation while reflecting the Ecological accountability and think About that ethically because what that Means is if it promotes cooperation then It's a medium of exchange that helps us Play socially sustainable games that's Right but if it can also simultaneously Reflects the natural order then not only Does it help us play socially Sustainable games it helps us play the Small class of socially sustainable Games that are also environmentally Sustainable right so then you get a Balance of that logo top-down logo That's right and bottom up okay okay What I'm doing there is I'm basically Going back 150 years to the point at Which uh William Stanley G Vons in 1875 Introduces these terms unit of account Medium of Exchange store value to a Lesser extent standard of value which Have become the rigor in any discussion
About money these days and I'm trying to Show that the the the main function of Money goes beyond it's it's more than The function of just allowing the farmer Who has a surplus of corn to sell his Corn for money so that the barber can You know basically buy the corn with the Money that someone pays him it's it's Actually making sure that every single Member of the economy is accountable to The real wealth that's being produced And and I think that the the whole Notion of a store value follows from That because today we're told that Anything that's why you say money is More than it's incidental features yes And today we're told that anything can Be a store of value if someone Subjectively decides to just hold on to It so we say you know art is a store of Value but when you think about it the Way that money was was understood before This denaturalization of the economy was That it was a store of value not because I just subjectively want it and I don't Care what it's worth but hopefully it's Scarce and it'll be worth more one day Day it was that I want to hold on to This thing because I know that everyone Else recognizes that this thing is Something that they might need in the Future right right and that has a deep Intrinsic value that's tied to Nature Itself another anti-post modern argument
In some sense so Chapter seven this is where we turn to The nature of money itself that's the Signal and medium of exchange but but Also as something that contains Intrinsic information about the Structure of the sustainable of the World and sustainability in the world a Superior money Will be resistant to entropy so that Would be Decay so it's permanent a Storehouse and reliable and unchanging Spatially as well and rare or difficult To extract from nature because otherwise It would be so plentiful you can't use Air as a medium of exchange true money Will neither be food nor fuel because It's consumable then but rather an Elemental substance elements are Naturally scarce meaning that each Element exhibits certain unchanging Qualities and then at the Apex gold is The Apex element within the natural Order of money expand on that a bit go Now that has to do with its scarcity and Its and its nobility that's a global map But it's important to state that when I Say true money there I'm saying in a Post-subsistent society so as the Society has matured and it's become Complex and there's a division of labor And there's a market at that point it Wouldn't make sense to use the most Necessary inputs the food not only
Because they're subject to Entrepreneurial lettuce last six days But also because it's better for the Economy to use those inputs rather than Just hold on to them for the sake of Measuring rewarding there's something The Gold's got that weird balance where It has a utility yes but but the utility Isn't so overwhelming and so immediate That it can't be used as a as a bank its Utility as money is more important for a Well-functioning post-subsistent society Than its utility right as a commodity Right that doesn't mean that it doesn't Oscillate it it still oscillates well That's a very interesting proposition Right that gold has that strange balance It's not so useful that you have to use It that's right but it's not so useless That it has no intrinsic value that's Right right whereas with silver we find That it's it's a lot more industrial it Has a lot more industrial use so even Though silver might be embraced as money You still need loads of it for industry The thing about gold is it has you know There's there's an aspect of elements Called specific gravity it's one of These features qualitative features and Gold has a specific gravity that's so High which means that as you condense More weight of it it occupies a very Small volumetric space right so if you Were to take a sugar cube sized of pure
Silver or a sugar cube size of pure gold You would find the gold is just heavier Even though it occupies the same Volumetric space and so what I'm trying To say is that the amount of gold that We have so it's value density it's Something like that yeah you might say Value density like energy density you Could say that definitely I mean in Terms of the amount of energy that it Took to produce the gold the gold is Representing in less space than anything Else right right so you know efficient Estimate yeah and in my company Goldman You know we have a warehouse let's say We have a billion dollars of silver well That's going to be Warehouse upon Warehouse upon Warehouse of silver You're walking through aisles of silver Bars whereas a billion dollars of gold Would fit right here in this little room Right right um and so so it's also got That property of efficiency that's right And and that I think makes it also very Efficient in terms of exchange as being Um something that pays for its own Movement you know it's not it's Inexpensive to move it doesn't require As much energy to move and easy to hide In some real sense too yeah perhaps uh But wow that that could be real relevant When someone's after your after your Storehouse of value yeah yeah but but The thing is there is that because of
That feature of gold Um you don't need so much of it Volumetrically for industry what ends up Happening is that we use as a society The lowest amount of gold the smallest Amount of gold that we need to do the Things that we can't do with any other Element so in your phone there's a part Of your phone there's a certain soldered Connecting joints where we have to use Gold the Apple doesn't want to use this Right right but it has to so it uses Just the bare minimum that it needs but It's still a couple of dollars worth of Gold per phone and and so so we're Constantly using just kind of the lowest Amount of gold that we need yeah so it's Interesting what what you're proposing In some sense like a good game is bound By rules which isn't really a good way Of thinking about it because rules and Laws sound like they're walls but that's Not really true a good game has Principles that enable a lot of activity Right and The better the best game has the best Rules in some real sense and so And and again the best game we've Already alluded to this to some degree The best game is one we both want to Play and that can play for a long time And that maybe even improves as we play It but that would also be a game that we Could do that with that would be
That would allow us to stay in Harmony In some real sense with the natural World yes so we want a set of principles That enables cooperation that's the next Thing you say here honestly when money Is gold this is probably the key Sentence certainly to the introduction And and you repeat it this is that this Is a repetition about an appropriate one When money is gold Cooperation between people and nature is Sustainable well that's the thesis of Your book fundamentally in one sentence Right and so Um and part of the reason I'm talking to You today is because I'm still trying to Evaluate that thesis it's a bold thesis I in in some real sense if it's true I Haven't been able to figure out why it Might not be true because I do believe That Obviously we can't decoupler economic System from empirical reality any more Than we can decouple our conceptual Systems from biology or if we do we're Going to pay a big price for it I Believe well let me propose a solution To that quandary um You know some of the greatest errors in History have begun as you know logical Uh Logical axioms that made sense at some Level but then after yes Marxism yeah And then you conceptualize it and you
Realize you know it's like that Meme Where you see the Domino and you you Know you push one Domino and then you End up yeah yeah yeah so right the Axioms sound good in in principle yeah So my response to that would be well if You're on the side of what I just said You're essentially on the side of all of The traditional wisdom that is Characterized the development of the Western world and if you're on this Other side you're in a brief period of History to which we observe a great deal Of of issues and then I would raise you And say well what is the other Alternative because the I'm not going to Be convinced that the current system That we have is a valid alternative I Think it's a terrible system it's a Parasitic system it has despac symptoms Such as inflation and wealth inequality And I think also environmental damage And to that end The Germ and the environmental movement Is coming from the right place they've Identified that our ways are Antagonistic to nature but their Solution is arrogant in the sense that It's also top down incentives exactly an Abstract exactly they're not trolling They're not letting nature take its Course and and and the real solutions to Any potential now this is a bottom-up Solution right in some real centralized
Well that's why you said well the other Thing I like about it's got this fractal Nature in some sense right so your Notion is is that if gold in some real Sense reflects the natural order and use Gold as the signal of measure that prop That permeates the entire system the System is being corrected at all of its Subsidiary levels simultaneously it's Not a top-down corrective and I'll give You a perfect example if gold is money When you have growth you get deflation Prices come down because the gold is Always that rarest longest lasting thing So when you produce more things relative To the gold that means the price of Those things declines conversely when You have a slow down in economic Activity relative to a pass point the Prices are going to rise but the price Is rising are basically telling people That they have to go out and produce More real things and and it's just it's A concept it's so hard to conceive of You know we've lived with inflation for So many years now it is possible to have Inflation under gold standard of course But that would reflect a Slowdown of Economic activity or a shortage of Certain things right gold right well That wouldn't be inflation exactly that Would be scarcity yeah and but doesn't It doesn't it sound amazing that you Could live in an economy where as you
Were prospering prices you know were Lower and don't you remember in the in The tech world where we saw that like With flat screen TV there was this Productivity where you know or even with Certain vehicles Um that used to be the way of the world For every industry you know and that was The engine which actually allows people Still argue that that's occurring you Know I interviewed Marion tupi yeah The book super abundance that makes some Claims that are contrary to yours Um but you're you're concentrating more On the rise in asset prices like housing Very very basic asset prices that seem To be you know in in some sense escaping From people's grip well he and I I would Disagree with the methodology in his Book and you know I'd be happy happy to Talk about it but I I will get the two Of you together at some point on that Yeah I'd love to I on that sense you Know If you talk to anyone on the street That's over you know 30 years old they Will tell you that in their lifetime the Cost of everything has gone up Every single person will tell you that Now when those people have to express That view politically they're being Offered two kinds of responses Irrespective of a political party one Response is it's true I'm going to help
You vote for me but then there's another That's a centralizing control Yes again But then there's another response which Is Oh no no you're wrong you're wrong let Me bedazzle you with quantitative Abstractions let me show you why you're Wrong and well it is tricky because we Do have these remarkable cell phones for Example it's not easy to quantify their Value let's say well yeah but what is The value of all the all the bookshops That we lost because of you know Amazon And what is the value of the record Shops that we lost what is the value the Diversity that was there and the diverse And decentralization you know we're both This is an issue measurement isn't it in The Cold War one of the great Arguments For the superiority of of the of the West versus Russia was that you'd go Into a supermarket and you would see Just so many Brands diversity but today You go to a western supermarket and it's Basically the same kind of packaging the Brands your craft Heinz owns half the Aisles right so your argument in some Sense Because our measurements are wrong like Fundamentally none of the calculations That we're making in relationship to Abundance are actually valid yeah and I Would also have a quarrel with this Metric of GDP per hour is worked I I
Don't think that that well we'll we'll Have we'll arrange this discussion at Some point and see what we can hash out I'm going to read the rest of the Summary of Chapter eight and then I Guess we'll we'll we'll bring this part To a halt I'm going to talk to Roy for Another half an hour you all know this By now or many of you who are listening On The Daily wire plus platform I often Walk through Um someone's life biographically I might Do that with Roy but there's there's Other places we can take this so I'm Still deciding on that Um anyways here's the summary of the Eighth and Final Chapter when money is Gold And as I said that's the fundamental Thesis of the book when money is gold Cooperation between people and nature is Sustainable that's a hell of a claim That'd be interesting to see what people Make of that in the comments when money Is gold cooperation between people and Nature is sustainable gold money remains A stable measure and reward in both Generative and degenerative cycles and Then he concludes with this we live in An age of contrived monies reflected Let's say in voluntary inflation the Printing of money and parasitic Economies the definition there would be Economies that are bubbling upward but
Not replenishing The Source that's a Good way of thinking about it A solution must be given by Nature and Not the service economy and then the Closing is gold It's quite it's quite a it's quite a Claim Gold is the perfect mirror of ecological Accountability So well It's hard for me to evaluate the book You know Um because I'm not an expert in these Topics I've read a lot of books this Seems to me to be a very good book it's Very clear I found the argument very Compelling it's very interesting Argument at least there may be things Wrong with it that I certainly don't Understand there's probably things wrong With it that you don't understand but I Definitely enjoyed reading it and it's Made it's given me an awful lot to think About and I do think it's beautifully Written and is also a beautiful book so That's the natural order of money if You're interested in this discussion I Would recommend the book it's pretty Short read it's pretty damn clear and I'd like to thank Roy for talking to me Today thank you and uh for all of you Watching and listening on YouTube and The associated podcast thank you very Much for your time and attention to the
Film crew that's here today they they Came in from from London Um uh suddenly and unexpectedly let's Say so that was very helpful to the Daily wire plus people thank you for Facilitating these conversations and uh I guess it's not too late in the air to Wish everyone happy New Year One More Time thank you for your time and Attention Hello everyone I would encourage you to Continue listening to my conversation With my guest on dailywireplus.com
