Johan Norberg: Analyzing Golden Ages, Embracing Openness and Spotting Warning Signs

0:01Hi everyone, I'm Nikolaj Tengen, the CEO of the Norwegian Sovind Wealth Fund, and today we are exploring one of history's most pressing questions, the rise and fall of great civilisations. because there are so many things that we can learn from the past. And today I'm here with Johan Norberg, author of the newly released book, which I just loved, called Peak Human. What we can learn from the rise and fall of golden ages. Now, Johan, you have studied golden ages throughout history, from ancient Athens to the modern Anglosphere. And that's what we're going to zoom in on today. So, Johan, warm welcome.

0:38Thank you very much.

0:48Let's start with the beginning. What is a golden age? Yeah, I'm glad you asked. A golden age is something that's often defined in retrospect afterwards, which is a little bit sad. So it's often subsequent generations who look back at the past and say, wow, they really had something impressive going. Can you never see it when you're in it? Sometimes you do, but it's easier afterwards because it's about a combination of cultural creativity, scientific discovery, technological innovation and economic growth. And so it's really a large number of innovations and new discoveries in many different fields of human experience at the same time.

1:32So the plan today is to really focus in on the anglosphere, which is basically we are kind of in the middle of it or potentially towards the end of it. And then we get to compare some of the signs we're seeing here with what's been going on earlier in history. So Anglosphere, what is that? Sounds great. What is Anglosphere? Well, what I'm thinking of here is a starting point in Great Britain and the Industrial Revolution after the Enlightenment and the scientific Enlightenment, the unleashing of wealth on a dramatic scale, and simultaneously the creation of liberal democracy and of checks and balances on governments, and how that was later transplanted into North America, and how America has not just become a sort of a limited regionally golden age, but also after the Second World War, how it's been the protector and the guardian of a global world order, A more rules-based world order than we're used to in history.

2:37More of open seas and free trade rather than gunboat diplomacy. That's what I'm thinking. And in terms of previous golden ages that we are looking at, Greece, Rome, the Caliphate, Song Dynasty. Yeah. So they were impressive. But they were regionally based. which meant that when they fell, when Rome collapsed, at least in 476, when the last Western Roman emperor fell, that was in a way the end of civilization, because all that knowledge was lost and had to be rediscovered again 1 ,000 years later in order to get it. The Baghdad Caliphate, when that was over, it was all gone. The difference this time around is that this is a global civilization.

3:26For the first time, we're spreading ideas, knowledge, technology across borders, and that makes a great difference. The Dutch also had a good period. They were quite impressive. It's a very unlikely golden age in the 16th and 17th century when they were up against the mightiest empire on the planet, the Spanish Habsburgs, who basically owned Europe. And they were just some eccentric entrepreneurs and merchants in the northwestern periphery. And they had nothing, not even land on which to stand. But that forced them to become innovative. So they became incredibly innovative when it came to the economy, but also when it came to art, the philosophical enlightenment, and so on.

4:10So the really cool thing here is that we're going to compare what we're seeing today with what we've seen in the past. Generally speaking, How do golden ages end? They end when we shift mentality. Obviously, you can see lots of dangerous horsemen of the apocalypse here and there, of famine, climate change, the plague, war, and so on. But that happens a lot throughout history, and it doesn't really mean the end of civilizations. Because you can rebuild cities, you don't lose knowledge like that. But oftentimes those disasters led to a change of mentality. So instead of this, what the Greek historian Thucydides talked about as an Athenian mindset of going out into the world and explore and learn something new and acquire new things, you shift to a more Spartan mentality where you stay at home to try to protect what you've got.

5:05This is often how golden ages end. You lose that cultural self-confidence. You try to protect yourself and what you've got. And then you lose that because you have to regenerate it with new innovations and new knowledge. Are we at the end of our golden age now? Or are we seeing science? Well, I'm worried. That's one of the reasons why I wrote this book. I can see many troubling signs ahead. I think we've shifted to that Spartan mentality in the past two decades or so, partly as a result of many global worrying things we've experienced. Such as? So briefly, mention some of them and we'll unpick them.

5:44Well, you know, the global financial crisis of 2007 and 2008, I think, shifted minds. I think the pandemic made us worried about the world. Endless wars in the Middle East and then Putin's invasion of Ukraine. Terrorist attacks, migration crisis, all these things combined with a sense, especially in the West, that other parts of the world are now more innovative and empowered than we are. All of this combines to make us a little bit more worried. And then we stay at home more often than we should. You say that external threats often trigger internal responses that then actually cause the decline.

6:28What do you mean by that? Yeah, external threats is a given. We always face external threats from plagues to geopolitical tensions and natural disasters. But we can often handle them if we acquire knowledge, technological capacity and wealth. But what often happens is that we react instinctively as individuals, but also as societies to threats. In a way, it's kind of a societal collective fight or flight instinct. Rather than grappling with the problems, we try to flee from problems and build walls and tariff barriers or fight against them, find scapegoats and to arm ourselves against the problems.

7:15And that sometimes means that we lose that innovative spirit that could have given us the tools to deal with the problems. Now we're seeing some reversals of globalization happening in the world now. What does that mean? What could that lead to? Yeah, this is the thing that worries me the most. If there's one thing that golden ages have in common is that they imitate quite a lot. It's very difficult to come up with something brand new in the world. But it's much easier if you're open to the ideas of others. If you learn from their experiences from merchants, migrants, missionaries from other places, that's how we keep on going and constantly rejuvenate our societies.

8:00But this fear of the world, fear of international supply chains and other things have meant that we want to stay at home. We want to repatriate supply chains. We want someone to avoid free trade completely. And in that case, what happens is that we hurt ourselves because we lose access. We deny ourselves access to the brains of other people, to the hard work and goods and services and the intermediary goods of others. And that will make us less innovative and less competitive. Now, you say in your book that if a strong power steps down, that the countries it has protected can turn against it subsequently.

8:41What does that mean? Yes, this is the historical geopolitical relationship. If there's a strong power, it's often a bully and people want to protect themselves against it. They might subject to it, but they use any opportunity to get back at it if that power is threatened. That's what we've seen historically from China to the Abbasid Caliphate to different Greek hegemons. The difference this time around with the American-led world order is that that has been more a rules-based liberal world order, where America, obviously, it's been a bully at times. That happens when you're the hegemon. But more often, it's tried to protect a set of rules that makes it possible for others to also grow and to trade and to become prosperous.

9:32countries like Sweden, countries like all European countries, East Asia, many Latin American countries. And that has meant a decisive shift in geopolitical relationships, so far at least, that they realized that it's in their interest to protect this world order, because they're afraid that if America is not there to protect this rules-based order, there might be another bully in the lead, and that will be much worse.

10:11Now, just unpacking a bit what you said about globalization. So why has immigration been so important for golden ages to arise? I think one important reason is that innovation is hard. It's difficult to think outside the box. We don't want to do that because it's hard work, it's uncomfortable, and it's risky. We never know if it'll work. So most societies try to stick to the script if they find a way to survive and get on. So we need a constant input from others. We often get it from trade and from our business trips, just finding something else new elsewhere. But migrants have been incredibly important because it increases the chance of serendipity, surprises, because you subtly rub up against strangers who have a completely different way of looking at things, different experiences, different know-how.

11:05And when they suddenly look at your business models, your technologies, consumer demand, they come up with new ideas. And that's why there's a pattern that strangers, immigrants, are often much more innovative and they get more Nobel Prizes than locals do. They do. Now, what parallels can you draw? I mean, to which other empires can you draw comparisons when it comes to this?

11:32Basically, all of them. But if you want a very perfect example, it's ancient Rome, which was in a way built according to mythology by Romulus, by inviting everyone to Rome because they had to inhabit their hills. So they invited immigrants and even smugglers and criminals and refugees from everywhere and on their asylum on top of the ancient Roman hill over there. And that's where we get our word for asylum. So Rome became famous in their own mythology, in their own set of ideas, as the place where we constantly acquire, absorb new peoples and new ideas from elsewhere. Sometimes they did that in a very brutal way, by conquering other people.

12:25But they also said that it's incredibly important, unlike many other powers, to be able to defeat people and integrate them during the same day, basically, because we have so much power to get from it. What happened when they started to restrict this? Well, one thing that happens is that you suddenly shop off that access to new ideas, to that input that you need to constantly grow richer. This is one lesson that they saw early on from many Greek city-states, how they were much more hesitant to accept new entrants, new immigrants into their power. So slowly they declined and lost people. They lost manpower, but they also lost that sense of doing something new.

13:17So Sparta, for example, became a smaller and smaller city-state. And in the end, they couldn't even put up men on the war fields because they didn't integrate more people. Tariffs is kind of fashionable in parts of the world just now. Now, you write about Song China. And you say that part of the reason for the downfall was increased trade barriers. Now, how would you explain that? Yes. China is one of the most powerful examples of the benefits of free trade and one of the strongest lessons in failure when you block that. Because the Song Dynasty, roughly a thousand years ago, became prosperous by being open eternally, but also outwardly.

14:09So they learned new technologies and they built incredible wealth. Some economic historians talk about how they were almost about to start an industrial revolution 500 years before the British did. However, after a period of turbulence and civil strife, there was a new dynasty, the Ming dynasty, who took power and And they promised stability instead. And they thought that stability, one way of building, getting back to a better goal, good old days, was to restrict international trade. And they were much more hardcore than our present day protectionists. So they basically burnt their entire world-leading armada.

14:55They burnt the maps to make sure that no one repeated the example. and they put the death penalty on international trade. And they got stability and stagnation for 500 years. So the richest country on the planet became a desperately poor country after that anti-globalization revolution. What about Venice? An incredible example of how trade creates wealth and even the Renaissance by trading with everyone. on. Trading even with the infidels, trading even with the Muslims, something that the Pope didn't like, but the Venetians said that trade should be free even to the gates of hell, which is a very powerful free trade slogan.

15:41And they became an incredibly wealthy city-state, and so did the other trading Italian city-states. But also, then again, you could see how it began to break down when they lost to those trade routes, in times of warfare, in times of religious war and more barriers to prosperity. And what used to be the most open cities became involved in more repressive and protectionist strife. What is strategic tolerance? Strategic tolerance doesn't mean being nice and kind and open to other peoples because you're a decent humanitarian do-good liberal. It means you do it like the ancient Romans did in order to become more powerful, in a way in order to beat people up and take their stuff.

16:38They understood, and they had learned this from many others, from Alexander the Great and sometimes from the Persians, who understood that the best way to acquire new knowledge, technological capacity, better tools of warfare, you have to be open to it. When you go to new places, don't try to ruin it all. Try to acquire what they have. Try to learn if they have something better. So Montesquieu, the great Enlightenment philosopher, said that the reason why the Romans became the masters of the world was that they quickly abandoned their own ideas, methods, and traditions when they acquired something new and better elsewhere.

17:19And in a way, that's what we do in a global civilization. We constantly learn, is there a better way of producing steel or create a large language model elsewhere? That's strategic tolerance. You're open to new ideas because you know it makes you powerful.

17:38Political instability. Now, you write about how increased polarization contributes to a collapse of a golden edge. First of all, why do we get polarization and why does it contribute to the collapse? Well, you know, we can be polarized in different ways. Some polarization might not be that bad if it means that we look at things from different vantage points. In a way, our confrontational systems in the legal sphere and in the media and in politics means that we see more things because we all have confirmation biases. And the best way of acquiring more knowledge is to actually listen to your opponent a little bit more ideas on the table.

18:26However, polarization can become so radical that you don't listen. You're just confrontational. And we're seeing that many places in the world, right? I think we do. I think we've stopped listening because we think we have the one true way. And why is that so bad for our society? Because it might mean that we just stick to the script without being open to others. And again, this is not something we do to be kind and nice. It's strategic tolerance. It's something we do in order to be better and to improve ourselves. If your ideas are based on reality, and they should be if you want to build everything from a better intellectual understanding of the world to better business models to greater technology, it has to be reality-based.

19:21And in that case, you have to listen to your opponents, because if what they say is a little bit painful, because it seems like they've got a point, they help you out. They teach you how to become a better, smarter person, a better, smarter business. So if we stop listening to our opponents, we shoot ourselves in the foot. What about if you have questions and problems with the academic institutions or the legal system? Have we seen examples of that in history? Yeah. You know, I often talk about how to define the end of a golden age is when you really know that you're about to lose it all. That's the death to Socrates moment.

20:11What is a Socrates moment? It's named after the greatest Athenian philosopher, Socrates, who constantly pestered people with the questions and forcing them to think more and harder about difficult questions. And obviously, that was a little bit painful, because it's difficult to think outside the box. But he did Athens a great favor. But during the Peloponnesian Wars, when there were times of strife and problems, Socrates became the scapegoat. And the Athenian democracy sentenced him to death for his teachings. And so if even the intellectually open Athenians can do that, it tells you that we can all end up in such a situation, becoming fed up with our openness.

21:01We try to find scapegoats. We try to instill some sort of intellectual orthodoxy. And this happens at the end of many golden ages, when we don't want to listen to the outsiders. We want to have a more pure system. We want more intellectual orthodoxy. I think we've seen this at many universities, how speakers, teachers who've tried to provoke students have been shouted down and even thrown out of campus in a problematic kind of a leftist woke mentality. Now we see it from the other side where the nationalist right is trying to push back but instill their own orthodoxy and force all the scholars to think in the same way and remove all the words that seem problematic from their perspective.

21:54And this is a sign that we should be worried because this might mean that we're losing that pluralism that helps us to think further. In which cases have you seen attacks on the legal system and quality of information, these kind of things? Well, when it comes to, we can see that many democracies have, we've seen more of a majoritarian struggle. Someone gets power and wants to name the media as the enemy of the people, but also the legal system and to try to undermine the checks and balances, the division of power that we've got. If we look at international ratings, countries like Turkey and Hungary have declined dramatically in terms of the independence of legal institutions and of media freedom.

22:50Have we seen it historically in other places? Oh, for sure. This is, I mean, the golden ages that I look at are not any perfect democracies in any way, because it's a fairly new concept with liberal democracy. But they've all had some sort of a restraint on the arbitrary rule of the powerful. And that has been incredibly important. Sometimes it's come from the system of law. Sometimes it's come from different guilds that have had power and restrain then the ruler. And that's important because then you expand the possibilities of having more voices. It's more difficult for one emperor to set all the standards, all the rules, and to force him to have a set of rules that makes it more predictable.

23:48You know that you can invest long-term in the future in new exotic eccentric ideas or business models and it might pay off in the long term and he might not be able to undermine it all or to steal, expropriate everything from you. But at the end of golden ages, what happens is that the rulers, they don't like that. They don't want anybody else to have a say in those systems and they want it all for themselves. Is that what you call a strongman? Yes, that's right. Tell us about it. What is it? You know, in times of trouble, we all want someone to protect us. We have this sense that someone should guide us and help us out.

24:33And at that time, some people, someone powerful often presents himself saying that, I've got a solution to all your problems. I can fix this. And the later Roman emperors, they presented themselves more like royalty and undermining all the checks and balances. We see that even in tolerant places like the Dutch Republic in the 17th century, when they were more geopolitically exposed, French and English invasions at the same time. People wanted the Stadtholder, the de facto prime minister, to acquire more power. So William of Orange, he didn't object. So he began to undermine the independent universities, the independent local rulers and independent institutions and acquire all power for himself.

25:29The problem then, of course, is that you get yourself surrounded with yes-men. You're surrounded by people who only say what you want to hear, and that makes you more vulnerable to your own prejudice rather than listening to contrary information. In which periods have you seen legitimization of corruption in the past? There's a little bit of corruption in every society, but the best societies have worked hard to try to create more transparency so that the corrupt are more exposed and that others look into it and that there is a system of law that makes it possible to punish wrongdoers. And this is something that has been incredibly important in opening up economies to others than the incumbents, others than the politically connected.

26:35But there's always this tension, always this struggle where those in power try to help their own friends out a little bit. And that's what you get in the decline phase of many golden ages when this becomes more the rule than the exception. So, for example, you see this in the end of the Chinese golden era. The Chinese emperors begin to think that a cheaper, quicker, better way of funding the whole military is to just give them power over the economy and hand them some powers of taxation, giving them specific monopolies, giving them control over bits and parcels of land. And again, this means a centralization where you limit new ideas to a specific set of incumbents.

27:39And that makes it difficult to be innovative because most new ideas come from the outside. It comes from the eccentrics, from the rebels who try and test something new. And that's difficult when corruption becomes legitimized.

27:58Johan you have also written another book called Open which I also happen to think is really really great thank you

28:08and you talk about the importance of being open as a human being as a kind of a company corporation and then as a country and I was just wondering if you could perhaps just unpick it a bit why is it important for people to be open I'm sorry, these are kind of naive questions, but I'd just love to hear how you phrase it. No, it's a great question because it's hard work to be open. Very, it's very hard work. We're all very comfortable where we are and where the places we're going. Totally. The problem is that we restrict ourselves then to those things. You might be the smartest people in the room, but the room is always very small.

28:43And most of the new ideas, most of the new technologies are being developed elsewhere. So if you want to continue to thrive as a business or as a society or even as an individual, you have to go outside of your comfort zone. Let's start with the individual. So I heard you say somewhere that you love every time you change your mind because it means that you have been open to new ideas. That's how I try to tell myself. And I thought about it myself. And actually, it's pretty nice to change your mind if the facts are backing up and out of you, right? It's right. How often do you change your mind?

29:28Too seldom, I'm sure, because we're also loyal to our ideas and our conclusions. And that's a good thing, not to give it up. But we should always realize that we suffer from confirmation bias. We're so comfortable when we find new bits and pieces of information that fits with what we already thought. But that tells us that we should be worried. That's why we have to teach ourselves this intellectually, that it's a good thing when we find things that don't fit in, because it means that we've seen more parts of the world than what we saw already. So I'm telling myself intellectually it's a good thing to change my mind.

30:12And that's one reason why I listen to my opponents. I read books that I don't agree with. And I write it down every time I learn something that I don't like. Because I think that's strategic tolerance. I'm being an ancient Roman. I make myself stronger when I do that. What about at the kind of company level or corporation level? Why is it important for a company to be open? Well, we're all very loyal to our business models. We should be. We should fight for them and make sure that they work out. But the problem then, of course, is that if you look at technology history and if you look at business history, nothing was in the blueprint.

30:59Almost no great idea started out in that particular version. They all started out differently. I mean, YouTube was originally supposed to be an online dating video app and Tencent was supposed to be a chat program. If you're open to new ideas, you learn from the feedback. You learn from the innovation that goes on in other sectors and in other businesses. You learn what works and what doesn't work. That's how you thrive through trial and error, constant feedback and constant adaptation. adaptation. And that's how you improve your business model as well. Because otherwise, there's this risk that your confirmation bias and your loyalty to what you originally came up with is your way to ruin.

31:51We have to learn to quit as well when we learn something new and better. Interesting. We had the founder of Pixar on the podcast. And he said that in the beginning, they were just open with all their ideas. They shared them freely. And somebody said, hey, why do you want to share your secrets? It makes no sense. But it basically led to them getting so many people applying to work in the company that it was like a huge positive. And we see that as a firm, I think, or as a fund, you know, we are the most transparent fund in the world. And I always thought that, hey, that's a great idea, because now the outside world can see what we do, and it's good for trust, and so on.

32:27But I think I increasingly realized that it's also very, very good for us because it makes us more open to ideas coming from the outside. I think the technology absorption that we are doing now and applying new technologies and new ways of doing AI and so on, we would not have done it if we had been a closed up shop. So I can really see it. I think that's an incredibly important point. And I've realized that as an author as well. Once upon a time, I thought I should keep my best ideas secret because, you know, and then develop them. And then I'll write a book and everybody will love it. Well, the problem is that they might not care for your book that much.

33:13And I haven't developed my ideas to the extent that I should. So I began to share some ideas openly on social media and elsewhere. And then I learned two things. First of all, I learned, and I think this is very similar to your fund, first of all, people are interested, they get engaged with what is going on, they find that they want to follow my work and they might even read my book eventually, but also they give me feedback. They tell me when I'm wrong. They tell me if they have an example that fits with my perspective. And that helps me to develop my own idea. So openness is a constant dialogue, I think, with the rest of the world.

34:01And that's something that if you give away your best ideas, people will give their best ideas in exchange. And that will help you tremendously. Absolutely. The give and take concept of, for instance, Adam Grant and so on. Now, so that's people as individuals. its companies, corporations, countries. Why is it important for countries to be open? I think that every country, no matter, regardless of size, regardless of where we are and what resources we've got, needs to constantly develop its own resources, its human capital and its economy. How do you do that? Innovation, coming up with something that didn't exist in the world, is the most difficult thing there is.

34:57So what I've learned is that nations prosper from imitation and innovation. You need lots of ingredients to start creating new dishes. And you get most of these ingredients by looking elsewhere, looking at other places. This is one reason why most great civilizations have been maritime cultures. They've been trading nations. They've constantly gone out to other places. They don't just pick up goods and services. They also see other experiences, other ways of life, which means that they realize that there are other ways of doing things than what we have been doing back home. And that sets minds racing.

35:37So you get those ingredients and then you can start cooking. That's the innovation part of it. If you have more ingredients is in the kitchen, you can then combine them in new and unexpected ways. And you do that by being open both to outsiders and open internally so that you let more people have a go in exploring and testing all those ideas. So why does it go in cycles? Why do countries go through this open and closed, apart from perhaps the last one we'll talk about, but why do most of them go through these cycles? I think that's because we have that cycle within ourselves. I think it's there in human nature.

36:22And how does that work? Because we need both of them. We need to be open to have a reason to, I mean, get out of the cave and explore, find something new. But why do we then close down again? Because we also have to be a little bit sensitive that the outside world might be dangerous. It might be that you end up in a strange place where there are people who don't have your best interest at heart. So I think the reason why human beings have come so far for 300 ,000 years is that we were open. We explored and we exchanged. We found new partners and new resources. But we were also very sensitive when we realized that there's a raiding band or there are predators out there.

37:00And then we immediately had to retreat. So we needed both those things, both the Athenian going outwards and the Spartan going home. But the Anglosphere openness has lasted for a long time. It has. How long? And I think it's lasted since 1688, since the glorious revolution, which was really not just an English revolution, but a Dutch invasion. And do you think it was lost? Well, you know, the thing is, societies also have this thing where they want to retreat and isolate themselves. Unfortunately, it doesn't help us as much as it might have done, evolutionary speaking, because nowadays if we retreat, we lose access to those technologies, ideas, the wealth that helps us to go there.

37:49What has made the Anglosphere, which is sort of the broader Anglosphere, and I would count all liberal democracies as sort of honorary members of this Anglosphere. What has kept it open for so long is that it has been more global, more competition between different places. So we realize we have more people to learn from, more countries to learn from. And we also have to learn from them in order to thrive in this competition. So it doesn't benefit ourselves to go home. Now this time might be different because this time around it seems like America is fed up with this American-led world order. Partly for good reasons.

38:30They think that they've been exploited in a way by Europeans and others who've outsourced their military defense and much of this world order to them. But there is a risk that we have this overcorrection where Americans go home and hurt themselves because they prosper in this world order as well from having this huge world economy of lots of smaller powers that want to help them to keep this world order going. So my question right now is, will Europe, will East Asian democracies, Latin American trading nations do their bit and step up and step in to keep things like the world trade system and the world trade organization going, the rules-based order, the open seas going?

39:25And if that happens, we might have a chance. Otherwise, I'm worried. How important is peace? it's incredibly important because nothing undermines long-term thinking like not knowing what happens tomorrow if if your country if your life your security your economy your crops will be ruined tomorrow so all these golden ages that I've looked at obviously there's been some war involved. But they've been able to create relatively peaceful systems where people have been able to think long term. The olive branch is the symbol of peace. And that's because olive trees take a long time. In ancient Greece, the cultivators of olives, the olive merchants, they always wanted negotiations and peace talks instead of war, because they knew that it would take them some 20 years for these trees to bear fruits.

40:26So peace is important not just for life, but for prosperity as well.

40:37Human psychology. You say that history doesn't repeat itself, but human behavior does. So what is it with human behavior that repeats itself? Yeah, I think that what repeats itself is both our curiosity and the innovative parts of our human nature. We want to accomplish things. We are excited when we learn new things and that keeps us going. But the other thing that repeats itself is the fear of things that are worrying. A world that seems worrying and then the sometimes dangerous conclusion that we should retreat and that we should isolate ourselves and that the best way to prosper is to stay at home.

41:27That repeats itself for societies as well. And that's one reason why we often have these open eras when we prosper. But in times of trouble, we become a protectionist. We want a strong man to protect us. And often that's a self-fulfilling fear, because that then limits our acquisition of new ideas and of innovations. And that's something we see again and again. Has this been particularly pronounced in periods of fear for the unknown? Or do you split between the two? I think fear of the unknown is a given. we have some sort of human... In our human nature, we have some sort of fire detector, I think.

42:19When something seems strange and risky, alarm bells are ringing and we run away. It has to be oversensitive historically. And the more unknown it is, the faster we run. That's right. That's right. And historically, that has benefited us because everything that seems worrying and strange might have been a threat to our survival. But today we live in a very different age because now we have access to information about the whole world instantly. And we live in a social media world where everything that goes wrong somewhere in the world is broadcasted to us instantly. And I think that our reptilian brains, they act on this information in a faulty way, thinking that there are fire alarms going off everywhere.

43:09And it makes us more anxious and worried about the world. And we think that just running and hiding is the solution. And that is dangerous. Why is confidence important? Because the confident person and the confident society goes places. They go out and try to find new things. If you don't fear instant loss, instant defeat, you don't worry about finding something new that is unexpected. You don't worry about finding bits and pieces of information that might even go against your conclusions because you think that this can benefit yourselves. And this is how we grow stronger all the time. When we lose that confidence, I mean, as an individual, we stay at home.

44:04But societies do too. And businesses do too. Yeah, but I mean, a person can lose confidence pretty quickly. But what about a nation? What does it take for a nation to lose confidence? It takes a longer time. What kind of process is that? It takes a longer time, but I think that there are some meta-trends that can undermine our confidence. Economic decline might undermine our confidence because suddenly the economy doesn't seem like a positive sum game where we can all thrive simultaneously, but a zero-sum game and it gets worrying and we have to protect what we've got. And that's self-fulfilling, obviously, because then we don't invest, we don't innovate.

44:44But not just these instant shocks. I also think that longer-term trends affects our confidence. One of them being losing relative power has a very powerful effect on our psyche. I think that is happening right now in the Western world. That we are losing to China. Yes, we used to think that for 500 years we run the show in a way. Suddenly we realized that new businesses and new cultural expressions come from businesses and cities that we can't even pronounce. Not just China, from South Korea, might come from Indonesia and Latin American countries. and the biggest musician in the world is from Puerto Rico right now.

45:35When would you say that that loss of confidence started? How long time has this decline in confidence in the Western world been going on for? I think in a way it started happening when Japan got its economy going for real until the 1990s. Then we saw that worry in the United States. The Japanese are taking over the world basically. But then they kind of flatline them. That's right. Quite right. So it seems like all those fears might not become reality. But then China took that position. And especially, I think, the financial crisis in 2008 really hurt our self-confidence and American self-confidence.

46:22Now we think that China is doing this. In a way, this is great. innovation investment is hard but once you've achieved it we can all use it once upon a time only a few western countries invested in all that research to come up with new drugs and new communications technologies and better ways of extending the lifespan now other countries do the same thing and add to our pool of cultural entertainment and so on so if we're open to it And if we use it in our businesses as well and build upon it, it's a great thing. But it might undermine our confidence to the extent that we shut our minds and our markets to it.

47:09And then the only beneficiaries will be them, of course, and not us. We will lose out. Let's say now you see a lot of these signs stacking up, right? How long time does it take before it has really impact on the economy, on the society, on the way we live? How long is this sunset period? It might unravel very rapidly for great cultures historically. Once, it doesn't have to, because often those signs, troubling signs, are there for a very long time. And you might be able to muddle through and carry on. But sometimes, if the world loses confidence in you, loses confidence in the investment climate in a leading place, in the reserve currency, in the independence of institutions like the legal system or the central bank, things might unravel very quickly.

48:11In that case, capital abandons you quickly and people, businesses, investors start to look for alternatives. And even nations start to look for alternatives. When you look at it historically, have nations in decline? Did they have a lot of fun? Why it declined? What I mean is that there is some great parties in Venice after it started to go down, right? Huge hedonistic lifestyles and so on. That's a good point. If you've acquired a lot of wealth and great culture, you might enjoy it for a long time. And I think, you know, Edward Gibbon, when he wrote about the decline and fall of the Roman Empire, he wrote about the Byzantian Empire, how they declined basically for 1 ,000 years.

48:58But they still managed to have some fun. The problem is that it has to rely then on you being able to use some of the new ideas and innovations that others come up with. One reason why the Byzantian Empire could prosper was that they at least learned from the Abbasid Caliphate, their neighbor and often enemy in war, from their science, from their technology from their books and they could pick it up. So this might make this era different because we might decline relatively for a long time. But if we're open to new good services, technologies, and great TV series from other places, we might be able to build a nice museum in declining places.

49:56But it's not as fun as being at the forefront and constantly discovering and creating something new. Talking of which and finishing off on advice to young people. Now, you had an interesting personal journey, right? You founded your own anarchist party. You ran an underground nightclub and so on. And so given your experiences, what is your advice to young people?

50:24Well, building on those experiences, I would say don't be afraid of doing eccentric, weird things that people might think are completely hopeless. Because even if you fail, you have some interesting experiences on which to build. Failing is a great thing. Failing at things is wonderful. at least if you admit those failures, admit the mistakes, because then it's a wonderful way to begin again in a more intelligent way. Because the future is always unknown and uncharted. And the only way in finding your way is to go out onto the minefield. Absolutely. Johan, this has not been a failure. It's been a huge success.

51:15It's been tremendously good fun. I hope. Thank you so much. I think so too. Thank you very much.