Can Democracy Survive an AI Economy?

0:00David McWilliams: A quick heads up of what is coming up on the podcast. We're going to be talking all about AI. I had the extraordinary privilege this week of being in the room with, asking questions and listening to a Nobel Prize winner on the issue of AI. And we are going to talk about AI, what it's going to do to the world, what it's going to do to you, what it's going to do to profit, which is animating John, and what it's going to do to the way in which we look at the economy. That's all coming up in a couple of minutes.

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2:12To understand the economy, you have to understand human nature.

2:18Demis Hassabis: This podcast is powered by ACAST.

2:24David McWilliams: How you doing there? It is time for the podcast and what a podcast we have coming up for you today. We are doing the podcast against the background of an American-Israeli attack on Iran. We will definitely come back to this. We are going to try and digest what it means. We will come back, we will talk politics, economics, oil prices, stock markets, initial reactions, trade, trade flows, etc. But we're going to let that a few days to digest. So we're going to come back to this.

2:58Demis Hassabis: But today, today... What is a good for absolutely nothing. Who sang that song? Well, Springsteen did a great version of it. Of course he did. Who was the other person who sang it? I can't remember. Anyway.

3:09David McWilliams: We are going to talk not about John's extraordinary ability to hit the high notes and keep those pitches, but we're going to talk today about something that I find absolutely fascinating. Last week, we talked to you on the podcast about the death of the software engineer. We talked about the death of the nerds. We talked about the idea that there was a 40-year period where people who wrote code were paid extremely well because they understood a new language. They, in effect, invented a new language, invented the grammar of coding, software coding. And now, as a result of AI, those jobs have begun to disappear.

3:51David McWilliams: So that was last week. I didn't realise that this week we're going to come back to that topic, John. Yeah. I had a fascinating week, and I'm just going to tell you about it. I had the extraordinary privilege of meeting a Nobel Prize winner this week. Ooh. A gentleman called Demis Habasis, an English guy who won the Nobel Prize for chemistry.

4:13Demis Hassabis: Oh, okay.

4:14David McWilliams: But he is also the chief executive of DeepMind, which is the AI operation of Google. Right. So I just listened to him. I'm going to tell you bits about what he was saying.

4:28Demis Hassabis: So he jumped from chemistry to tech, was it? What did he win in chemistry?

4:32David McWilliams: It was for discovering a certain type of behavior on a protein, John, in DNA and genetic engineering. Wow, that's fascinating. So I sat very much as an observer and listened to scientists, geneticists, medics in effect, discussing what this breakthrough meant for medicine. and the basis of the conversation was how AI is going to profoundly and positively affect medical engineering, medical, well, medicine.

5:09Demis Hassabis: Cure cancer type of thing. I mean, that's the big promise, isn't it?

5:12David McWilliams: Basically, the idea is that so much of medical research is data-driven. So you have 1 ,000 patients, you give them a drug, you see what happens, it takes a long time, et cetera. And the thing about AI is it accelerates that process dramatically and it can add millions to the sample. And of course, then if the sample has got millions, you can arrive at conclusions much quicker. So that was the general view. But what I took away from it as an economist was what we're going to talk about now, which is the evolutionary process by which the economy grows will be accelerated at a dramatic rate by artificial intelligence.

5:53David McWilliams: In fact, what the thrust of this podcast is going to be about is about evolutionary economics, which is basically Shumterian economics, which we announced, I think, in our very first podcast five years ago, that we were going to be governed by the ideas of Joseph Schumpeter amongst all the great economists.

6:11Demis Hassabis: He has certainly become the number one economist, go-to economist for this podcast.

6:17David McWilliams: But only for this podcast. I think we've done quite a bit of resuscitating Schumpeter's reputation. In fact, my only bested and seconded by my old friend, the English economist, Peter Antonioni, who has a tattoo of Schumpeter on his forearm. Which is, I think, if you want to go nerd, you want to go full nerd, you have a tattoo of an obscure Austrian economist on your arm. But Schumpeter's basic idea, and I believe this is the way the economy works, is that the economy works like an evolutionary mechanism. And that as the economy evolves, the economy doesn't grow, it evolves. And good companies are more fitting companies, replace old companies.

7:03David McWilliams: And this process accelerates periodically. And what accelerates those periodic episodes of evolutionary economics are technological breakthroughs. And I think that what we are seeing now with AI will push the process of evolutionary change in the economy from a certain speed to what could be described as warp speed. That's what today's podcast is going to be all about.

7:29Demis Hassabis: Not necessarily a good thing.

7:31David McWilliams: Well, a thing.

7:32Demis Hassabis: It's a thing. It's a thing, right?

7:34David McWilliams: Well, again, I come back to the idea that what I've always believed that neoclassical economics gets wrong is the obsession with equilibrium. So basically, when I studied economics, John, the nirvana, the end point of all macroeconomics was to find equilibrium, right? As a sort of a general equilibrium theory, which comes from physics. and this idea was that when the economy is at equilibrium, there is no tendency to change. And this was assumed and accepted as the basis of all macroeconomics, theoretical economics, not practical economics, but theoretical economics. And I always found that really silly because the evidence from economics is that there is no equilibrium, that there is no moment at which all the factors cancel each other out.

8:26And in fact, what it was, was sort of physics-based mathematics taking over social science, right?

8:36David McWilliams: Now, what Schumpeter does, and the Austrian school in general, is they dispense with statistics, with models, with mathematics, and they talk about processes. And they don't say that they can actually define or in some way pre-ordain those processes. They just say they are.

8:55Demis Hassabis: So the idea is, right? But actually, just before you go there, I mean, that's what biology and the environment is all about. Exactly. It's always trying to find equilibrium. And the minute it does, something else changes. So it's in this constant state of flux.

9:12David McWilliams: Yeah. Well, so the idea is finding equilibrium is silly because it doesn't exist.

9:15Demis Hassabis: Yeah.

9:16David McWilliams: So basically, so let's come back to it. So I was triggered this morning by Jack Dorsey.

9:22Demis Hassabis: Yeah.

9:22David McWilliams: So Jack Dorsey is the founder of Twitter, right? He's a good beard. He has a brutal beard. I love it. He has a beard, now I'm back from Serbia, which is fashioned on Serbian Orthodox priests, I suspect, right? Yeah, yeah. Okay? But Jack Dorsey was the head of Twitter. Then he went off into the wilderness.

9:39Demis Hassabis: Surfing.

9:40David McWilliams: I think some sort of yogi sort of carry on. Namaste, do good, be nice. So he basically was one of those white knights of the internet. Remember Silicon Valley 2.0? Yeah. And they were all nice.

9:52Demis Hassabis: Yeah.

9:52David McWilliams: And they were all thinking about, you know, economic and social responsibility. Now they've all turned into nasty hyper-capitalists, right? Dorsey being the great one. So he's gone from sort of namaste to fuck you, right? Yeah, yeah. And this week, his company, Block, which we'll talk about in a minute, announced as a result of AI that they were going to cut their workforce almost in half. And the share price of his company went up by 25%. Now, I want to frame this discussion with that moment, right? Yeah. So what you have is AI, as we spoke about last week, accelerating the process of economic acceleration.

10:37David McWilliams: So much so that when a chief executive migrates from being a white knight to a dark knight, not only can he do this with impunity, number one, but the stock markets react with overwhelming positivity. So what you have is the stock markets and the finance bros enabling the tech bros to use AI to destroy jobs. That is what we are looking at. And what I want to talk about is what A is the process, but B, more importantly, John, maybe where that leads society. That slightly Armageddonist idea that you enable and enrich people who are actively extracting all the value out of the network they've built.

11:23David McWilliams: They're actively making people unemployed and they are being rewarded for that behavior.

11:29Demis Hassabis: Yeah.

11:29David McWilliams: It's all short termism, isn't it? In a democracy, this throws up some dramatic dilemmas, which is that the finance world is actively encouraging inequality. And if you understand that, then you amplify that out to society. And the impact of AI will be revolutionary. Yeah. And revolutionary in the context of, for example, the best way to see this is through, as we spoke about, the Industrial Revolution.

12:03Demis Hassabis: Yeah, but you know, Mac, for all his namaste and surfing and yoga and all the rest, I never thought that Dorsey was any sort of a white knight. I always think he had that darkness in him, like most of those tech pros.

12:18David McWilliams: I'll tell you the funniest thing is there's a thing in behavioral economics called framing, which is when, for example, if I say to you, I'd like to buy... Estate agents use this all the time. I'd like to buy a house. And the estate agent knows that the thing is worth, let's say, 400 grand, but starts the negotiation at six. And then if you get him down to 450, you think that you've actually got a bargain. So the framing pushes you over here. It's a classic sales technique.

12:48Demis Hassabis: Or anchoring, isn't it?

12:49David McWilliams: It's anchoring or framing. So you basically anchor up here and you drag them over. Basically the anchor for Dorsey looking like a good, guy was Elon Musk. Right? Yes. So basically, Elon Musk comes in and buys Twitter. Suddenly, Dorsey looks like the guy you want to go for a pint with.

13:04Demis Hassabis: Yeah, that's true.

13:05David McWilliams: Because the other guy's a creep, okay? But now you realize that it's relative creepiness, okay? Anyway, enough of that, carry on. Anchoring, relative creepiness, the whole thing. So Dorsey has many companies. He's like these serial entrepreneurs. They're interesting people. They're exciting people, etc.

13:19Demis Hassabis: But he used to do something with his money as well.

13:21David McWilliams: He sets this company up called Block. This is the one that he cut the labour force of the other day and got rewarded. What did they do? In a sense, it's a finance company, right? Right. So it's got Tapping. It's got a company called Square, which is Tapping. But the interesting one, I think. It's a bit like Revolut, then. It's like Revolut, yeah. Okay. It's like Revolut for Yanks, right? Right. But he has this buy now, pay later company, a part of that, which is called Afterpay. Now, this really intrigues me.

13:47Demis Hassabis: All right.

13:48David McWilliams: Because buy now, pay later is the greatest credit scam we know. Yeah. Right? Because the promise of buy now, play later is no pain today, lots of pain tomorrow. Higher purchase stuff. Anybody who does that knows it. And it's basically based on the notion of what they call in economics and finance balloon payments. So you have for the first four or five months or years of anything, you have very modest rates of interest or no rate of interest. You think, my God, this is great as the debtor. And then you have a balloon payment. You've got a massive payment. you've got to make at a certain time.

14:23Demis Hassabis: And that's when the dishwasher has broken down.

14:25David McWilliams: That's when everything's broken down. Yeah, yeah. But you know, the funniest thing is, I didn't realise this, right? That millennials are most likely to have a reporter to be using buy now, pay later. For at least, they're using it for everything. People are using it for fast food, for dominoes. Really? Yeah. Right, so this is all happening, right?

14:44Demis Hassabis: So I go to a kebab house, Zaytunes, or Harbour Kebab around the world, Like, I'll give you a quid now and 20 quid next week.

14:51David McWilliams: Well, exactly. Oh, right. So think about how mad that is. So consumption is now, day-to-day consumption is now being financed on the never-never. So that is one of Dorsey's companies. And the statistics are amazing. More than half of buy now, pay later consumers are under 35. Okay, women are more likely, women are more likely than men, which is very unusual because women are usually much more financially conservative. What's the psychology behind that? I have no idea. About two in five of buy now, pay later shoppers feel less financially real than using debit or credit cards. What does that mean?

15:31David McWilliams: Well, you want to be financially real, right? Because you actually have some connection between your ability to pay and what you're actually buying. So again, all of these companies are about ensnaring people in ever increasing amounts of debt, number one. But they market themselves as financial liberation from the constraints of income.

15:54Demis Hassabis: Right.

15:55David McWilliams: But the constraints of income are usually quite a good thing as a general idea, which is why you don't necessarily buy stuff that you can't afford. So Dorsey is in on this game, right? But the interesting thing is that your point at the beginning is right, which is you have this very strange intersection of deregulated credit in the United States, an aspirant consumer market of the under 35s who seem to me to be more driven by consumerism than older people. and you have AI, all of which is enriching a tiny minority of people. And now actively you're seeing that the financial markets, i.e. the stock markets, are rewarding that sort of behaviour.

16:44David McWilliams: So that, I think, anchors to a degree, John, this discussion, which is what happens next.

16:51Demis Hassabis: It's amazing because, I mean, the big complaint from a lot of kind of the financiers and all the rest, is that we're swimming in debt. So this is just more and more debt, which is more and more enslavement. But the funny thing is, I was just thinking when you were saying that, so the fellows who are working for block or afterpay or whatever it is, now they've been lagged out, so they can't fulfil their payments.

17:16David McWilliams: Well, the point is you will get large-scale defaults in the United States.

17:21Demis Hassabis: And not just for burgers, but for everything. But if interest rates start to rise.

17:25David McWilliams: So that is one thing. But the second aspect, the more profound aspect of what is going on is the impact of AI on the process by which the economy evolves. And that is why listening to a Nobel Prize winner discuss this was so fascinating because it's very rare you get an opportunity to listen to these guys. It's very rare an opportunity to speak to them, to chat to them, to ask them questions. And this guy, Demas Hababas, is English. He's from North London. He's half Greek, half Singaporeese. He was a chess prodigy, obviously a mathematician of great, great alacrity. He then went to Cambridge. He studied software engineering.

18:16David McWilliams: He's an engineer. He's a serial entrepreneur, set up various different companies over the course of his young life. He's only in his late 40s. And happens to be a Liverpool FC fan, which I was asking him what part of general AI can explain the decline of Liverpool FC. He's Greek, you were saying? He's English, but he's with Greek and Asian parents.

18:40Demis Hassabis: Yeah, because most London Greeks would be Arsenal supporters. Just saying this all.

18:46David McWilliams: Arsenal supporters are, well, this man is a Liverpool supporter. But his energy, his intellectual energy is phenomenal. And what he was discussing was, obviously the holy grail of AI is general AI. So that you create a general intelligence. And that general intelligence is self-reinforcing. And that's self-reinforcing. So the machine learns from itself, itself. So he was talking about the difference between, you know, a pragmatic machine, a robot that is programmed to do things, and a machine that can program itself and that can learn. And I found that really fascinating. I'm not that terrified of it, but I know a lot of people are.

19:32David McWilliams: But I just thought...

19:34Demis Hassabis: Why aren't you terrified of it? Well, because I've looked at, if you look at humans,

19:41David McWilliams: the history of humanity is that humans are tool makers. We have, remember I said that many years ago, the opening scene of Space Odyssey.

19:53Demis Hassabis: Yeah, yeah.

19:54David McWilliams: Where you have the ape, the baboon, using the bone to attack other people, creating tools. So what humans have done from the very, very start, If you look at what has propelled us to the highest level on the evolutionary or animalistic hierarchy, it's our ability to make tools. Dogs don't make tools as a general rule.

20:19Demis Hassabis: Well, the big Schumpeter moments throughout history were things like, and we spoke about this before, you know, the plough in Europe, for instance, changed everything. The printing press, you know. And they changed everything rapidly for their time, but they were still slow. And of course, the industrial revolution, as you're talking about. But the difference, it seems, with AI is that it's changing stuff. It's changing stuff at such a rate that we can't keep up with it. Well, again, I think that two things can be true at the same time.

20:52David McWilliams: One is that humans have always been toolmakers, number one. and number two is that technology tends to accelerate everything around it. So you mentioned the printing press. Printing press is quite phenomenally interesting for a variety of reasons but one of the reasons is that nobody really has any idea or had any idea what the profound effect of the printing press would have been and maybe the most profound effect of the printing press was the Reformation, was a religious and intellectual revolution which happened as a result of the mass dissemination of information. So, for example, the price of books collapsed in the 16th century, 17th century.

21:39David McWilliams: That's the first thing. The second thing is I found this fascinating that the link between the Protestant religion and the printing press. So towns in Germany that had printing presses because printing presses were incredibly expensive to make. They were twice as likely to flip Protestant in the Reformation as towns that didn't have the printing press. And that is a finesse. And why was that? Was because the dissemination of information was largely an attack on the ownership of information. And the people who owned information at the time was the Christian church.

22:18Demis Hassabis: Yeah, yeah, yeah.

22:19David McWilliams: So that I find fascinating, that nobody could really preordain or pre-prescribe what was going to happen in society. And that is why the key to evolutionary economics, which is what we're talking about, is this notion that evolutionary economics is a design without a designer, which is the great way of describing evolution. that when you look at the world and you look at the animal kingdom and you look at the plant kingdom and you look at what has survived and what hasn't survived, what you can say is two things. One is that evolution is messy. It doesn't go in straight lines. Yeah, yeah, of course.

22:58Second thing you can say is we have no idea which animal

23:02David McWilliams: and or which plant will actually survive. And the third thing we can say is that the design that is evolution seems to occur without a designer. So it comes from the bottom up. And that, I think, is the essence of what Schumpeter spoke about in economics. So if you think of evolution as being a massive, massive crunching of information all the time, constantly, then I think what you have is a blueprint for the way the economy works, which is that no company. I was really intrigued. If you pick up your mobile phone, you will look at the mobile phone. They're made by Apple now. But when they first started, there was a company called Nokia made all the mobile phones.

23:50David McWilliams: Remember that Finnish company? And it was miles ahead. And you would have... And so was BlackBerry as well. BlackBerry's another great example. You would have forecast years ago that those companies would have been the market leaders.

24:00Demis Hassabis: Yeah. But they disappeared. But the difference is between like the printing press and even the Industrial Revolution where jobs changed. You know, people, as we spoke about before, it moved from a rural economy to an industrial economy and an urban economy. But the difference with this seems to me is that we don't know where this is headed and it puts people in debt.

24:26David McWilliams: Well, that's one part of it. I know it's only a part of it. That's the finance part of it. But if we look at evolution, as you know, I'm looking at here, there's a great book I'm reading at the moment, which is, So, Eric, if you're interested in this, dear listener, Eric Beinhocker's book, The Origin of Wealth, is very brilliant on all this stuff. He's talking about Schumpeterian economics, and he's saying, look, evolution is a general purpose and highly powered recipe for finding innovative solutions to complex problems, right? So evolution is a recipe, right? How do we find these solutions, right?

24:59David McWilliams: It is a learning algorithm that adapts to changing environments and it accumulates knowledge over time, right? It is a formula responsible for all the order, the complexity and the diversity of the natural world. And if you think about it as being a formula, the same formula lies behind all the order, complexity and diversity in the economic world. That's what I believe is the case. Yeah. And if you think, therefore, that what happens is the process of evolution is accelerated, let's say, by climate change in the natural world. So we know that if there is significant change in the climate, like the Ice Age disappearing, you will get an evolutionary response all over the planet.

25:43David McWilliams: Yeah, yeah.

25:44Demis Hassabis: There's many examples of that.

25:46David McWilliams: And this led to the emergence of agriculture and the emergence of agriculture led to the extinction of nomadic lifestyles, the increasing willingness of humans to be domesticated, domestic animals.

25:58Demis Hassabis: And away we go. But the timescale is the crucial factor in all of this.

26:02David McWilliams: So basically what we are, we are in a period where AI is going to accelerate that timescale dramatically. Yeah. And what happened in years is going to happen in hours.

26:15Demis Hassabis: But not only that, we also have more people living on the planet today than we've ever had. so 8 billion people have to find their way in life and their occupation what do they do you know if if like like Dorsey and Block you know half the people are going to be laid off what are they going to do well and this can't end well surely well I suppose the the key to the to look at it

26:42David McWilliams: from an evolutionary perspective is that everyone will adapt is that when we look at the word or die Well, it's not so much adapt or die because, in fact, the other side of AI is going to probably reduce dramatically the costs of medicine. And as the cost of medicine is reduced, it's going to rapidly expand the amount of people who are going to actually get access to that. But the point is more so that the process, if you decide that you are going to try and slow down this process, either as an individual or as a company or as a country, then I think you will eventually pay the price for that.

27:28But if you say, well, this is the new world and this is the way the world is going, then I think what evolutionary economics would say is that when we started the industrial revolution, you had the Luddites.

27:41David McWilliams: Remember the Luddites? The Luddites were people who said, we are against steam weaving because the steam engine was the very first of these industrial tools that accelerated productivity. Now, what is fascinating is that when the internet started, people said, oh, the internet's going to wipe out so many jobs, right? It hasn't done. It's actually created a huge amount of jobs. So when, for example, the combustion engine started, they said, oh, my God, it's going to eliminate the horse, which it did. So what?

28:13Demis Hassabis: Yeah.

28:13David McWilliams: It'll be good for horses, right? Yeah. You know, when we had, for example, electricity, people are saying, oh, my God, electricity, that's going to be appalling. I mean, it's going to wipe out the demand for gas. These are very different, though.

28:26Demis Hassabis: I mean...

28:27David McWilliams: No, but the idea is that at every stage you have Armageddonists versus utopians.

28:34Demis Hassabis: Yeah.

28:34David McWilliams: And typically what happens is the middle ground is where humans end up.

28:40Demis Hassabis: Let me ask you a question then. So economics as we know it and the economy as we know it, you know, is that just a blip been the the grand scale of evolution of humanity so we've been living in this style of economics and economy for so many years that now with such a rapid change and such an enormous change that you know the economy entirely changes because it's not going to wipe out old jobs obviously and it's going to I agree with you it's going to create new jobs but there are as I said eight billion people on the planet, will there be jobs for eight billion people? And if not, what do they do and how do they survive?

29:28Demis Hassabis: And if the financial system is driven purely by profit, as you say. So are we looking at a much bigger, broader change and fundamental change to the economy?

29:42David McWilliams: Let's come back to that question maybe after a little bit of this.

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32:01Demis Hassabis: So, Mike, we're talking about AI and the possible Armageddon or not. We don't know, but it's... You're talking Armageddon. Okay, that's fair enough. That is fair enough. I kind of, I can't quite see it. And that's why I want to ask you this question, that you're talking about economics being very similar to biology and the environment. Yes. Insofar as that it's an evolutionary process. Yes. And it has evolved at every stage throughout humanity with big landmarks like the printing press and the plough and the industrial revolution and electricity, blah, blah, blah, blah. But I'm kind of wondering, is AI such a massive change that it will completely and fundamentally change the economy and how we see economics and how it operates?

32:52David McWilliams: I think you're right. I think the first thing is that I come back to this idea that humans are tool makers and we are problem solvers. That's what makes us different to every other animal. The second thing is that classical economics, because it was obsessed by physics and not biology, was obsessed with this notion of general equilibrium, which is an idea largely that comes from physics. And the idea of equilibrium is that, you know, at one stage, all the forces that are acting in the system cancel each other out. And then the system is at rest. For those who have suffered general economic theory, the guy was called Walrus, who was an actual Wal-Ray, French economist, who came up with these great big ideas.

33:42David McWilliams: Walrus. Yes. I am the walrus. Exactly, exactly. Yeah, exactly. And it was John Lennon was writing about economics, right? Okay. But so the idea is that these forces that are in the economy cancel each other out. and the general equilibrium is when the economy is inert or at rest or even sleeping. Right, yeah. Now, I know this sounds mad for those of you who haven't studied economics, but there's an area of the priesthood of economics which is really very theoretical. And I used to love that when I was in college because I used to love the madness of it.

34:18Demis Hassabis: Yeah.

34:18David McWilliams: But I used to always leave the lectures knowing it was kind of bollocks.

34:21Demis Hassabis: Yeah, your head was scrambled.

34:23David McWilliams: Well, my head was scrambled. It was more of an academic exercise. exercise and elegant mathematics and making sure these things. But when you went out onto the street on Dawson Street or Dame Street in Dublin, these are street listeners which are just outside Trinity College where I studied economics, you realise, well, actually, that's not how the world works at all. Yeah, yeah, yeah. The world works in a very, very different way. And what was that way? That way was this evolutionary idea that cafes come and go, bars come and go, nightclubs come and go. When we were kids, music comes and goes, bands came and went.

34:55David McWilliams: A band would introduce an amazing album and then the second album is shite. Why is that? Because they couldn't reach the same level of creative genius, right? And this was the same. Hadn't evolved enough. This is the same for all processes. So I used to come out from those lectures and think, it's really elegant, the maths, but it doesn't work. It's not the way the world works. So to come back to your question, right? If we are constantly adapting all the time, and if the economy is only a reflection of the way humans behave, then AI will just add another layer of accelerant into the process of evolution.

35:39David McWilliams: And that, I think, is the key. You said, you know, profit, etc. Profit is a good thing, right? Yeah. I know you come from a slightly Marxian worldview. I blame my brother for that. People before profit, you know, give me a fucking break. No, no, no, I'm not on that. So profit is only the indicator that something is successful, right? If you think about it. So a commercial venture in this capitalist world that we live in, right? If it's making profit, all profit is is a signal from the environment that your chances of evolutionary success are quite high.

36:17Demis Hassabis: Yeah. Right? Yeah.

36:19David McWilliams: And that means, therefore, that profit in and of itself is a positive thing. Because when you start condemning profit and besmirching profit and degrading profit, well, then what do you have? You have a centrally planned economy where some geezer in a room in the Soviet capital will pull a lever and say, we need 500 tractors over here. Right? The best way to get the 500 tractors is to see, I believe, what the market is demanding. And that is the design without a designer. But there is no doubt that the system that we have built, so again, let's take the Industrial Revolution. The Industrial Revolution leads to this idea of wage earners.

37:05David McWilliams: Wage earners lead to this idea of wages versus profit, capitalists versus labor, Marxism, trade unionism, democratic socialism, democratic movements. It changes the world completely. So the world of the Napoleonic age in, let's say, 1810, and the world of the Edwardian age, 1910, are completely different. There's different politics, there's different economics, There was colonialism right in the middle of it. Sure, yeah. All these things happened as a function of the Industrial Revolution or as outgrowths of the Industrial Revolution, never really preordained or imagined by anybody. So you are right that the world we are in now, which is based on stable, slow, capitalistic movements inherited from the last generation, a generation before AI, will change profoundly.

38:06David McWilliams: And the question is, therefore, does it move to the left, which is that the people, the losers in this particular world, rise up against the winners? Because in effect, politics is always a battle between winners and losers. If the winners are so small a group and are identified by shaved heads and bad orthodox-style beards In their gated communities. In Namaste, yes. Doing yoga while actually fucking everybody else, right? I would be all for the revolution.

38:38Demis Hassabis: Yeah. Okay? Yeah, yeah, me too. But if... We'd be on the barricades. If...

38:42David McWilliams: Well, we're a bit too old for the barricades, John. We'd be behind it. We'd be kind of orchestrating things. Drinking our cocoa. Exactly. But if AI, artificial intelligence, leads to a profound, better human experience, which it might do, then we will learn to live with it. I think at the moment, Yanis Varoufakis, my old mate, has written a book on what they call techno-feudalism. And what he's basically saying is that we are turning to feudal serfs in the same way as people in the 12th century were. That basically we had a huge peasant population, a couple of lords, and the peasants not only worked the land of the lords, but the peasants paid the lords for the pleasure of working the land of the lords.

39:37David McWilliams: And he looks at the large tech companies as neo-feudalistic companies. And they own your data. You have to use their platforms. They make decisions for many, many billions of people who are using their platforms every day without any reference to the welfare of those people. And, as you say, they are so wealthy, like feudal lords, that they can buy up places in New Zealand or Hololulu or whatever and basically live in a world adjacent to the rest of us but not part of the rest of us. And, of course, Janice's view is that this is going to lead to mass revolution. There's another view.

40:19Demis Hassabis: Yeah, kind of with Janice on this one, but go on.

40:21David McWilliams: Okay, there's another view. I know you are. I know you are.

40:24Demis Hassabis: But the podcast has to be objective.

40:27David McWilliams: You can't be going down one way. The other view is that humanity has always worked with technology and technology has always changed the world. And ironically, the very people who are in power now may not necessarily be the people who are in power in 10 or 15 years time. I'll give you an example of that. if you look at the top 10 in just in the corporate world the top 20 companies in the united states in 1995 1995 is not that long ago the top 20 companies in the s &p 500 not one of them are in the top 20 today yeah so the the process of corporate change is relentless and winners become losers and losers become winners and new incumbents elbow out the old ones and we recalibrate and we go on.

41:24David McWilliams: That is the, as I am more of the optimist, John, than you are. That is the optimistic way and I think we should end on this optimistic note.

41:32Demis Hassabis: I'll just say one other thing, though. It's the way it's been sold and delivered to us. It was that phrase that we heard over and over again was the democratization of this, that, and all the rest, and technology was driving that. It feels to me is that it's the very opposite.

41:52David McWilliams: Well, I think democratization is one of those great makey-uppy words that comes from the... The unfortunate thing is AI didn't come up with democratization. A human came up with that word. That's true.

42:06Demis Hassabis: That's true. That's a fair point.

42:07David McWilliams: Some clever copywriter in a large advertising agency came up with that word. It's now redundant. Well, no, but the way... It's that idea of the Overton window, that basically the Overton window is that things that seem sort of unusual at first become mainstream. So the great example of that is Brexit. So Brexit in 1995 in Britain was a tiny minority.

42:26Demis Hassabis: Yeah.

42:26David McWilliams: Were four leaving the EU, and it becomes a majority pursuit. And so the idea is that democratisation, people think, OK, this makes sense for a tiny minority, and then it gets bigger and it gets bigger, and then academics start to use it, and then you see it in journals and you see it in newspapers and you see it in corporate banners and corporate stuff and suddenly, as you say, democratisation becomes a thing, right? My sense, though, is that, maybe we'll leave it here, there was a great quote by Roosevelt's advisor, a guy called Brandeis, B-R-A-N-D-E-I-S. He was the Attorney General of America.

43:09Demis Hassabis: Right.

43:09David McWilliams: And he concluded your way. He said that America, and it can go for the rest of the world, can have inequality and democracy, but you can't have both for very long. So the essential promise of democracy is one man, one vote. The essential promise of hyper-capitalism is one man, loads of votes. So the rich guy gets all the votes.

43:37Demis Hassabis: Yeah, yeah, yeah.

43:38David McWilliams: And therefore the whole process of macroeconomics and politics is a pendulum fight between inequality and democracy. Between one man, one vote, as articulated by Plato, the founding fathers, all these characters, right? And one man, all the votes, as espoused by hyper-capitalism. Musk. Musk, well, exactly. Trump, Musk, all those sort of things. And in a sense, we're locked into this eternal struggle between these two forces. And right now, people are worried that the one man, one vote democracy is losing. And the one man, lots of votes, hyper capitalism is winning. But the essential thing about democracy is they have one great thing, John.

44:26David McWilliams: It's called elections. And elections tend to put manners on people. so I have faith in the future in the AI future because I have faith in the essential permanence of democratic solutions but I may well be in an increasing minority so we will leave it there we'll come back to that one we'll come back to that one alright we'll talk to you on Thursday

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