The Dollar, the Ape & the End of an Empire

0:00Your call has been forwarded to an automatic voice message system. A missed call doesn't feel like anything. No red flag, no notifications screaming at you. It just disappears into your call log. And nine times out of ten, that was someone ready to hand you money. That's why today's episode is brought to you by Quo, spelled Q-U-O. The business phone system built so you never miss a call. Here's what I like about it. All your calls, texts, and voicemails live in one place, so anyone on your team can pick up a conversation, see the full history, and respond fast. No more, wait, who talked to this customer last?

0:36And if you're worried about after-hours leads slipping through, Quo's optional built-in AI agent can answer questions and even book appointments while your team's offline. It's the number one rated business phone system on G2, and over 90 ,000 businesses already trust it to stay reachable. Money is on the line. Always say hello with Quo. Try Quo for free. Plus, get 20 % off your first six months when you go to Quo.com slash tech. That's Q-U-O dot com slash tech. Hey, I'm running out to drop off a stack of letters and packages. Need anything shipped while I'm gone? Save the gas. Stamps.com lets you print postage and schedule pickups right from your desk.

1:15Sync your contacts into the address book, get detailed accounting insights, and get notified the moment your certified mail is delivered. All from my desk? All from your desk. Join the 4 million businesses using Stamps.com right now with code PODCAST and get your free welcome gift. Stamps.com, code PODCAST. Taxes and fees apply. To understand the economy, you have to understand human nature. This podcast is powered by Acast. Hey there. Welcome to the podcast. John here. So the Dawky Book Festival season kicked off with a live podcast show recorded with a full house at the Coolidgee Club. It was great crack and we covered lots of ground, including a discussion on America's waning power, the current and future state of the dollar.

2:10And we also chatted about the world being at an inflection point between two super cycles. But as it's a book festival, we kicked off our chat talking about money, a story of humanity, and what money is, its evolution and its impact on societies and cultures throughout history. So today we're going to bring you some of the highlights of the show. Sit back, enjoy, have a listen to this. I think actually, Mac, one of the reasons you may agree with me that this book is doing so well is that it's not just an economics book. It's not just a book about money. It's about history and it's about anthropology and it's about psychology and biology and all the ologies, essentially.

2:58But it tells the story of the human condition through the lens of money.

3:05David McWilliams: No, it probably, you know, it does, John. And the fascinating thing about writing a book like this is, or writing any book, is you really second guess your own assumptions about the world. When you're on your own, in your own little head, reading away, it helped enormously that the pandemic happened. I'm probably one of the very few people who enjoyed the pandemic, thought it was great. I'd like another one that's very soon. Another book. No, but I was kind of down in my basement thinking, remember when we were thinking like this could go on for five years? Like there was nobody really knew. So I said, okay, well, I had the contract to write a book about money and I was going to write a book, which was pretty much the standard economics way of looking at how money is created, how it goes around the economy, etc.

3:49And then I started reading evolutionary biology.

3:52David McWilliams: Now, don't ask me why. I started reading evolutionary biology. I'd never read it before. And this evolutionary biology tells the story of humanity and how we became the clever ape that we are now. Now, we could be clever good, clever bad, but this story of this extraordinary creature that you wouldn't have bet on the human being, let's say, 15 ,000, 20 ,000 years ago. If you're hanging out in the savannah, I'd have bet on the line or something, you know? But why did the humans become the dominant species in the world? And what are the clues and what's the evidence? So I remember reading this and thinking to myself, economists talk about technology.

4:33David McWilliams: And when they talk about technology, John, as you know, they talk about, for example, the internet or the computer or the wheel being a great example. So when humans discovered the wheel, it prompted all these other discoveries. When we discovered steam, prompted all these other discoveries, et cetera. But what they never really spoke about was what I always thought was really fascinating, which were things called social technology. So the wheel and steam and the mechanical engine, these are all physical technologies built by humans to make our life easier, to solve problems for us. And then I thought about things called social technologies.

5:10David McWilliams: And social technologies are technologies that humans also came up with, but that allowed us to coordinate better, that allowed us to cooperate better, that allowed us to actually live together in complicated societies better. So a good example of that would be the legal system. Another example is organized religion. Another example is writing, because writing allows us to communicate. And obviously the most extraordinary example of a technology that we invented and grew ourselves, evolved into, is this thing called the voice box, which allowed us to speak. So when I was reading this sort of stuff, it struck me that money is a social technology very, very similar to the legal system.

5:53because money allows us, if you imagine today, the amount of interactions you have had with people you will never, ever, ever see again. You don't know, but you have them with money,

6:05David McWilliams: with exchange, with trade, with commerce, whether you're buying a coffee or you're online buying something else. And what you realize then is that maybe if you look at money as a technology that humans invented to figure out a very complicated world, it might be a foundational argument. It's kind of like a universal language, like music. It is exactly a universal language. And this is the extraordinary thing about money, is that everyone uses it. It's absolutely universal. Maybe with the exception of two or three tribes in the Kalahari Desert, the 7 billion people who live on the planet use money every day, number one.

6:47Number two, we have tried all sorts of other ways of organizing complex societies. We've had feudal societies. We've had societies based on religion. We've had societies based on tribes. We've had communist nirvanas. We've had all these ways of organizing complicated human societies, and we've abandoned them all. And the one that continues to exist and continues to be bought into by most people is a society based around money. So I thought, okay, this idea is interesting. and then it struck me that economists don't actually understand money which is a bit of a big reveal if you're a monetary economist.

7:27It's a bit worrying. I was going to say, we're going to cover as much as we possibly can in this hour. We're going to talk about America and the dollar and the super cycles and all that. John, now that you mention the dollar, one of the reasons I think this discussion is more urgent now than it would have been maybe five years ago, is that the foundational currency of the global financial system is the American dollar. And the assumption has been for the last, certainly since the 1920s, but absolutely since 1945, when the United States took on the mantle of the dominant Western superpower, the hegemon, the one with the big military, but also the one with the soft power, with rock and roll and Hollywood and all that sort of stuff.

8:20And USAID. USAID, exactly, multilateralism. The idea has always been that the American dollar will be the cornerstone of the financial architecture that we build around which to base our economy. And I think in the last six months, that assumption is now something that people are beginning to second guess, which is, is our friend with the orange face? in the White House, does he understand that he and his policies are chipping away at the credibility of America? And the most significant leading indicator, the canary in the coal mine, if you will, is not the Democratic Party, is not American public opinion, but it is the dollar.

9:12The dollar has now fallen to a four-year low this morning. And I think the reason this discussion is a little bit more urgent than it would have been maybe a while ago is that if the dollar, the currency that basically keeps the whole thing together is undermined by itself, which is quite an achievement by your own president, what comes after it, what comes in what they call the interregnum in the period between when it gets weak. I'm not saying that the dollar is over by no stretch of the imagination, but I think we're seeing the beginning of the end of a global monetary system that we in Ireland and in the UK and in Europe and certainly in the United States have assumed will be with us for a long, long time.

10:07And that chipping away, John, before we go back to the history, I think let's just focus. This is why I believe that at the moment discussions about money are more pertinent because they cover a multitude. And the dollar, the dollar is undermining by a combination of Donald Trump, the tariffs, the positioning of the United States, the pulling out of multilateralism. For example, I think the Americans' next move, they'll pull out of the IMF. They've already pulled out of the World Health. What will happen then? That's a massive issue for the global financial system. They've pulled out of the World Trade Organization.

10:43Yeah. They have undermined USAID and all those sort of things. Trump has said, look, multilateralism is something we're not interested in at all. Yeah, yeah. The next on the list has to be, nobody's talking about it. It has to be the World Bank. It has to be the IMF. because they believe the IMF and the World Bank are essentially old American ideas that come from a different regime. So that's it. So I'm just saying... There's so much to talk about just in that, like what will happen then, what that looks like and all that. But actually, we're going to try and get to all of that. We will get to it.

11:19But before that, I think it is important...

11:20David McWilliams: We'll be wading through all this stuff. I think it's important that we kind of understand what money actually is. It's power, it's influence, and it's part in the story of humanity. Yeah, so while I was doing this thinking, I thought, okay, let's write a book that hasn't been written before. I know that sounds weird, but most books have been written before, and they're just different iterations. It's like good songs as well. Yeah, it's like good songs, good melodies. There's only so many of them and whatever. So the idea would be, let's write a book that hasn't been written before from an economist who it's probably fair to say has grown a bit tired of his own tribe's ability to tell the story of money.

12:02David McWilliams: And that struck me. It's a long time ago, John, as you know, when I worked in the Central Bank. I remember working in the Central Bank, talking to the chief economist and the governor. And I was really young. I was 24. Yeah, you were part-time, weren't you? I thought it was more of a part-time. It was civil service. I was in the cinema at four o 'clock every day, having a smoke when you could smoke in the academy. Cinema, having a smoke. But I was thinking, I'm in the institution that makes up the money. Do you remember the punt? So the central bank made it. And I always thought this was a great trick, you know?

12:33David McWilliams: Yeah. You bring paper into the central bank. It's like the tabernacle. You're in the basement. It's like the tabernacle at mass, you know? You read the hocus pocus, blah, blah, blah, blah, blah. And behold, I swear to God, this is the body of Christ. Right? Which is, the paper comes in, I swear to God, this is worth a tenner. Right? Same sort of magical idea, based on the notion that we all buy into and trust the organization. And then I thought, the people who run this place are really powerful. So I remember having these conversations and coming to this bizarre conclusion, John, that in the same way as a plumber, so for example, if you employ a plumber, the plumber will be able to explain to you how the water, when you turn on the tap, goes from here to there.

13:20David McWilliams: There's a combination of gravity and pressure and pipes and direction. And the plumber, he or she can show you the map and say, this is how the water gets. So the plumber can tell you how the water gets around the house. But if you sit and have a drink with the plumber and you say, why is water essential for life? Like, why do we need it? I'd say the plumber would be hard pressed to answer that question in general. And I think economists are the same, which is we are trained when we learn monetary economics and we teach it and we are basically, we're given that title, monetary economist. We're trained to say, when you turn the tap on, in the tabernacle, right?

14:02David McWilliams: Okay, and the money gushes in. This is where it goes, this part of the economy, that part goes through the banking system. We raise interest rates and the money. Leavers and pulleys. Leavers and pulleys. But that's not interesting. Well, that is interesting from an engineering perspective. but the question is what does it do to us? What is this thing, money and why does it change us? Why have we adopted it? Why did we adopt it when we adopted it? Why does every society that's come into contact in the ancient world with monetary societies lose? Why were monetary societies in the ancient world the societies that seemed to have some sort of comparative advantage over societies that didn't use it?

14:44So what is it?

14:45David McWilliams: And then why do we want it? You know, when a 10-year-old, you know, when our kids would ask, you know, I wanted to ask that question. Another question, kids say, what's money, Dad? Where does it come from? Can it run out? Can we get more of it? Right? We get the money tree. Get the money tree. So in order to answer those questions, to go back to where we see complex societies in the first place in the world. And they are largely, I picked the Sumerian Society, which was the society that existed in the Mesopotamia. around 5 ,000 years ago. So that's the first evidence when humans stopped being hunter-gatherers and began to become domesticated.

15:27David McWilliams: Now, it became domesticated very slowly. It happened about over 5 ,000 or 6 ,000 years. And one of the fascinating things when I was writing it during the pandemic was the following. I read something which said that 10 ,000 years ago, when the Ice Age started to melt, and obviously, you know, you're botanist-sided, John, John, you realise that when it gets warmer, it gets wetter, not to mention the rain, and there's a confusion of life. Yes. So you would have thought that when we became domesticated in a warmer globe, that the human population would have risen dramatically. And so ancient demographers believed that our population went from 4 million 10 ,000 years ago to 5 million 5 ,000 years ago, which is almost nothing.

16:14Right, yeah. They also believe that our population went from 5 million humans in the world 5 ,000 years ago to 100 million by the time Jesus was chasing the money lenders out of the temple. So I thought, why was this? And of course, the reason was that once we started domesticating animals, their diseases killed us until we acquired immunity, which took us thousands of years. So the whole process of domestication was a slow one, not because we didn't like gardening. In fact, we love gardening. It's a human thing, right? Because basically, domestication is just gardening, right? But because gardening killed us.

16:53And it took our immune systems about 3 ,000 or 4 ,000 years to identify these new pathogens, like the flu, right? Just think about the flu, right?

17:06David McWilliams: And then once 5 ,000 years ago to 5 ,000 years ago to the time of Jesus, you see this massive increase in the population. Well, what doesn't kill you makes you stronger. So yes, exactly. So the few humans who survived were stronger. Now, that led to a massive change in human society because there was just more of us. And that meant we had to deal with much more complicated situations. We had, prior to this, for the first 300 ,000 years, been actually dealing with our families. Yeah. You know, and our cousins and kids. And small tribes. Small tribes. Once we start settling down, once the human population expands dramatically, we have to deal with thousands of people.

17:45And that presents problems of complexity. So humans had to invent a shortcut to deal with living in a complex society. Where am I in the hierarchy? Do I have something called value? Where is everybody else? And you see, and this is what fascinated me and got me thinking the idea. We see a co-evolution of money with writing, with numerals, with legal systems, with organized religions, they all emerge around 3 ,000 years BC. But what is it about money that actually has that power to drive innovation and change?

18:27David McWilliams: Because the essential promise, this is the fascinating thing, and there are all sorts of arguments we can talk about now about equality and who gets the money and all that sort of stuff, But the essential promise of money today and back then was that with money, you can change your material and social circumstances from the circumstances you were born in. Upward social mobility. And this has proven very attractive to humans. This simple elixir of upward social mobility has proved an incredibly propulsive force for humanity. and then when you look at the societies that adopted money, so take the Sumerians and they were followed by a crowd called the Lydians and then the Greeks who we know of, what you see is by the time the Greeks have adopted money, which is about 700 BC, maybe about 500 BC, what you also see is the Greek mind begins to change.

19:26The Greeks go from believing in mythos like Homer and the Odyssey and those epics and Zeus throwing, you know. Thunderbolts.

19:35David McWilliams: Thunderbolts, like Elon Musk with wings, you know, Big Lat, right? That sort of fella, right? You see the Greeks going from mythos, that sort of mythological thinking, stories, narratives, to logos, to rationality, to democracy, to precision, to logic, to proof. So were you saying that the money brought on the idea of democracy? I think it did. I think you can't see these things because I believe that what money did was, number one, it liberated a certain few Greeks who would have been born. In the old days, if you were born poor, you stayed poor, and the narrative was, like the caste system many years ago in India, you were a certain caste.

20:13If you inject money into that, it's an unbelievably disruptive thing because suddenly people... It's an equaling force as well. It's an equaling force. It's a liberating force. So you see, for example, in Lydian societies, Lydian women were the first society, the recorder that were allowed to choose their own husbands because they were rich. Because they had power. They had financial power. They had good dowry. All that sort of stuff. And then, so when you look at it, what struck me is why did the Greeks, why were they the civilization that broke through this sort of intellectual glass ceiling?

20:45Why did they come up with democracy? Why did they come up with Greek theater artistically miles ahead? Why did they come up with geometry? Why was it this crazy little nation? And the fascinating thing is once you read about the Greeks, you realise they couldn't even feed themselves. They couldn't feed themselves. It was the first urban empire that couldn't feed itself. So how did they do it? Because they were commercial. They mined silver. Right. And they used money to coax other people to feed them. That's number one. Number two, they never had a big army. Yeah. And number three, they were entirely, entirely based around city-states, around the Mediterranean, the Aegean, and the Black Sea.

21:25There wasn't a landmass. The Samarians was a landmass. The Egyptians were a landmass. So that sort of thinking, John, in the basement late at night when the kids are saying, oh, fuck, there goes dad again with his mad theories, right, got me thinking of looking at money as a much more eclectic, modernizing force that humans. So the book was going to be called The Fifth Element. So the reason was the following. Again, coming back to the Greeks. The Greeks believed the world came from the four elements. Yeah. You know, the earth, wind, fire, and water. Water, yeah. Okay, right? Back to the plumber.

22:06Exactly, back to the plumber. And they believed that's how the world worked, and they were essential elements. I believe that money was the fifth element. That is, the element that humans invented, amazingly, something that doesn't exist. Money only exists between our ears. It's not real. But we have made it real. And that fifth element is the way to look at it. And if you look at mythology, the whole idea of Prometheus getting elbowed out, because Prometheus gave fire to humans, and Zeus got all pissed off, and he put poor old Prometheus in Georgia, and his liver was eaten out, and then it grew again.

22:50David McWilliams: It's terrible, gory stuff. Great stuff to be reading at night. But if fire was the Promethean force of the old ancient world, and people think that the reason that humans actually accelerated so much as hunter-gatherers is we're the only animal that mastered fire. And lots of anthropologists call us a pyrophied species. Yeah, yeah, yeah. That we are a species that can be understood by our adaption and our willingness to adapt fire to ourselves and our environment, which is why we look like the way we do, which is why we don't have big jaws, which is why we have actually small stomachs in comparison, which is why we have big brains, all that sort of stuff, right?

23:33And also socially, because around the fire, we cultivate interpersonal skills, chatting, talking, imagination. So if the first 200-odd thousand years of human existence was defined by our relationship with this natural technology called fire, I believe the last 5 ,000 years of human development cannot be understood, and nor can our world today be understood without understanding our relationship with this extraordinary technology that we invented. So the amazing thing about money, it doesn't exist in the animal world. Your average dog doesn't worry about a tenor, right? You know, it's entirely human.

24:15It's entirely made up by us. and we have evolved with it and it has evolved with us. And so the narrative in the book is to start there and then go through all the civilizations that we would regard, as you know, as foundational civilizations, Romans, Greeks, Renaissance, the Arabic Enlightenment, all the way through to now, and look at how every massive propulsion move human civilization has been accompanied by, are actually driven by, innovations in money. Yeah, there's a bit of a chicken and egg at each juncture, really, isn't there? And the, you know, money has shaped society, but it's also shaped the individual.

25:03It has an amazing power over the mind. And we say at the beginning of the podcast every time that the, you know, to understand economics and money, you really need to understand human behavior. So how does it affect human behavior? So the reason that, you know, we are, humans are, this is where I think economics lost its way many, many years ago. What we know about humans is we are chatty creatures. We are very social. We talk to each other a lot. We influence each other a lot. We are, and again, it comes back to anthropology, the reasons that many anthropologists and evolutionary biologists think that humans are so successful is that we collaborate in a way that other animals don't do and why do we do that because we can talk yeah when you can talk you can create all sorts of narratives and whatever so that is essentially the creature we're dealing with in the economy a chatty slightly indisciplined slightly irrational beautifully lovely kind of stupid yoke right yeah us so and that was the way economists thought about economics in the 19th century they thought that economics was a branch of or could be informed by biology by evolution by looking at evolution and look and then what happened in the 20th century is that biology as the premier science declined and it was replaced by physics yeah so einstein and all these nuclear power and i think economists got very jealous the physicists were getting all

26:35David McWilliams: deplored so you know and einstein was a big hero and they said could you imagine if we could make economics even harder, right? By pretending that it's physics. So how do we do that? Well, do more maths. Do more sums, yeah. Okay, to have more absolutely hard and fast iron laws of economics. Yeah. I love that. Who doesn't like an iron law? We've got an iron law. I'm throwing a pie chart for good measure. Loads of pie charts, loads of equations, all that malarkey, right? And then what we do, yeah, yeah, but okay, well, what are we doing? We're looking at humans. So what we're going to do is to make these models work.

27:09Yeah.

27:09David McWilliams: Because this is what I did in the central bank, right? What we'll do is we will assume away all the characteristics that make humans human, right? So the thing we know about humans is not only are we not rational, we are beautifully irrational. Not only do we have a straight view that we understand and we know our own mind about everything, we haven't erasures about anything, right? We change our mind all the time. We get influenced by the last. This is back to the psychology of money, right? Think about the creature we're dealing with. And then this comes to your idea of money and psychology.

27:48So what's always intrigued me is why do people buy stuff? It's a really simple question, right? It's the core question of economics and finance. Why do people buy stuff? People buy stuff because other people buy stuff, right? That's why we buy stuff. And marketing works. And marketing and advertising works. Yeah. So when you put our social insecurity and you put on top of that this incendiary thing called money, you get these mad investment cycles, crazy. Like we had here in the property carry-on. Yeah, yeah, yeah, absolutely. And this has ever been so as well, all the way through history. Yes.

28:30You talk about the likes of, you know, seemingly very clever people doing incredibly stupid things. You know, Jonathan Swift, Darwin.

28:40David McWilliams: Yeah, yeah, yeah. Newton. Newton. So basically this idea is that money, because it's a social technology, brings out the social madness and the social brilliance in us. And that is at the core of understanding, I think, economics. And then when you look at exactly this, so you get someone like Newton, clever fellow, great with the owl apples. Apples falling off, please. Great for that, right? Great for the owl bit of gravity, D.R. Fella Newton, right? Lost his shirt on a thing called the South Sea Bubble. Jonathan Swift, great for writing the books. Brutal with money. Absolutely terrible money.

29:14David McWilliams: And, of course, Charles Darwin. Charles Darwin lost his shirt speculating, and this is the interesting thing, speculating on a railway company that built the Dublin to Dun Laoghaire Railway. Yeah. That had been the most successful railway, suburban railway in the 1830s, And of course they did with... It's still going. And it's still the same bloody infrastructure. Yes, it is. Yes, it is. It is the same thing. It's the same line. It hasn't been expanded since 1830. Think about that. How mad. Up the Republic. Great country to live in. So, but of course they did like everything. This is the human nature.

29:49So the first iteration was really successful. All the shareholders got paid back. They said, great, what are we going to do? We're going to expand massively in Ireland in the 1840s. What happened in Ireland in the 1840s? famine. Yeah. Darwin lost his shirt. Yeah. And Darwin was fascinated by economics. In fact, again, in the course of writing the book, I'd kind of been aware that Darwin got his theories, his evolutionary theories from an economics book written by a guy called Malthus. Really? Yeah. So Darwin was a great man for taking notes. He was great.

30:24David McWilliams: He was a data... That was his traveling book. He was a data crunch. To the Galapagos, wasn't he? Exactly. Little photos and taking all these notes. A lot of time to kill, A lot of time. He had four years. Only rich people can do that. He had four years. So he went around drawing photos of penguins and taking data. And he had this hunch that something was going on in the world that subsequently became his idea of natural selection, which is the foundational idea about evolution. The Finchus of the Galapagos. That's exactly. When I was playing football, you were reading this stuff. I knew it would all equalize eventually, John.

31:00I'm running out of time

31:02David McWilliams: Not at all, your mind's ahead So he was trying to come up with it Darwin had this idea but he didn't have an overarching theory that he thought could explain what he observed which was that certain species seemed to be able to last and other species didn't So he was thinking, how does this work? And he read a book by a guy called Thomas Malthus Malthus was an Anglican priest, a big intellectual in England at the time. He'd have been on, I don't know, Newsnight now a lot these days. They had news back those days. And he had this idea, which was that humans are locked into a battle with nature and nature always wins.

31:46So when our population gets too big as humans, we get famines. Of course, Ireland was the exemplar of this. We get famines, we get pestilence, we get diseases.

31:55David McWilliams: and human behavior changes when we experience this. So, for example, Irish people emigrated. That's a massive change in behavior. Irish people had much smaller families after the famine. Irish people didn't get married. So we changed our behavior. And Malthus predicted all this, and he called these things behavioral adjustments in the face of changes in the environment. And that was his theory. and Darwin took that idea and he said, if humans change their behavior, can you imagine if we do this on a general level for animals? Yeah, over a huge timescale. Over a huge timescale. So the essence, and this is why I say that, you know, economics was much more applied to biology in the 19th century than it is now.

32:42Now we're all physicists doing, the problem with physics is if you're dealing with physics with a creature that doesn't do physics in his head or her head, what you gain in precision for the models are very precise. Yeah, yeah, yeah. You lose in relevance. They're kind of irrelevant. Yeah, yeah. So now a lot of economics is like, I would think, learning Latin in a cloister. Yeah. Right? Academic economics, it's speaking to itself. It's just theoretically, it is. Yeah, yeah. The answer is this. And it's like,

33:10David McWilliams: oh no, Jesus, I'm very clever. Oh no, you're very clever. Oh no, it's all about who's most clever rather than who's explaining to people what's going on.

33:22Your call has been forwarded to an automatic voice message system. A missed call doesn't feel like anything. No red flag, no notifications screaming at you. It just disappears into your call log. And nine times out of ten, that was someone ready to hand you money. That's why today's episode is brought to you by Quo, spelled Q-U-O. The business phone system built so you never miss a call. Here's what I like about it. All your calls, texts, and voicemails live in one place, so anyone on your team can pick up a conversation, see the full history, and respond fast. No more, wait, who talked to this customer last?

33:58And if you're worried about after-hours leads slipping through, Quo's optional built-in AI agent can answer questions and even book appointments while your team's offline. It's the number one rated business phone system on G2, and over 90 ,000 businesses already trust it to stay reachable. Money is on the line. Always say hello with Quo. Try Quo for free. Plus, get 20 % off your first six months when you go to Quo.com slash tech. That's Q-U-O dot com slash tech. This is the story of the one. As a shipping manager, he's running the dock, stocking supplies, and making sure every order goes out on time.

34:34And Grainger helps him stay prepared. From shipping supplies to PPE to hand tools, he counts on Grainger to keep products moving and trucks rolling. So his operation runs smoothly no matter the shift. Call 1-800-GRAINGER, click grainger.com, or just stop by Grainger for the ones who get it done. Your daily supplement routine doesn't need to be managing a handful of different bottles. Onnit's Total Human brings key research-based vitamins, minerals, herbs, and amino acids together in convenient day and night packs. One all-in-one product designed to make supplementation easier. The day pack supports cognition, focus, and cellular energy production.

35:18At night, the night pack helps you wind down and supports a calm, relaxed state. Less time managing your supplements, more support for your day and night. Shop Total Human now at onnit.com.

35:35Let's just move it on a bit. Okay. Let's talk about, at the beginning there, you talked about super cycles. Yeah. and the undermining of the dollar and America as a global power and the dollar as a leading indicator for this super cycle and what's actually happening. Where are we now? Okay, so I've always thought

35:56David McWilliams: it's better to look at economics and politics and sociology and demography and all those ideology in these super cycles that go in kind of four or five decade cycles. And I think that we had one in 1945 after the Second World War. That cycle went up to about 1990, let's say more or less the fall of the Berlin Wall. That cycle was a cycle dictated by America, American hegemony, the Cold War. Democracy was suppressed in many countries. Trade was managed. Capital flows were managed. Immigration was managed, et cetera. That cycle gives way to the cycle after the end of the Cold War, where Reagan and Thatcher become preeminent.

36:36You have the cycle we lived in, globalization. Mass movement of capital, mass movement of trade, mass movement of goods around the world,

36:43David McWilliams: mass movement of people, as we're seeing now, and also the proliferation of democracy and multilateralism and all that sort of stuff, particularly in Eastern Europe and in Africa where you see countries that were under authoritarian rule becoming democratic. That has now run its course. And I think the reason we're so anxious is we are now at an inflection point between that old super cycle that lasted 40 years, and most of us in Ireland have grown up in that cycle, the one that really kicked off in the late 80s, early 90s. That has been the background noise for the Irish economy, for Irish society.

37:20I think we're moving into another super cycle. Why is it changing? I think most of these super cycles have within their dynamic the seeds of their own destruction. So the seeds of their own destruction of the Cold War was in effect the Soviet Union ran out of money and ran out of ideas. Right. And it just ran out. It just couldn't do what it was doing. Yeah. I think now inequality has been the big one in the West. Yeah. So after the 2008 crash, we cut interest rates dramatically as a way to relaunch the economy. The dilemma for cutting interest rates is that it works eventually, but it doesn't work fairly for everybody.

37:58So if you reduce interest rates as the way to kickstart the economy, what happens is it basically works through asset prices going up, house prices, share prices, et cetera. They go up, so you refloat the balance sheet, as happened here in Ireland, okay? And so you over-reward people whose income depends on assets. So that's share prices, house prices, rents, dividends. At the same time, the people whose income depends on wages are having their wages suppressed by China because China has destroyed manufacturing in the West, right? So therefore, the problem is that there's far fewer people whose income depends on assets than there are who go out to work for a living, right?

38:48People who go to work for a living. And those people might find their stake in societies declining, but in a democracy, they might not have a stake, but they have a vote. And they have exercised their displeasure at the status quo and the relative difference between asset owners and workers by voting in populist politicians who says, I feel your pain. I see where you're going. So we see that all over the world. So Trump, for instance... Trump is a great example of that. Yeah, he's a great example of that, but he's a symptom as opposed to... Now, he is accelerating the whole thing. If you just stick to the dollar and the economy for a second.

39:28Trump is evidence that something is wrong in the United States. and there's no point railing and saying he's this, he's that he's whatever he is evidence that more Americans went to vote for him than voted for Kamala more Americans voted for what he was selling they bought what he was selling and he said what he was going to do he said he was going to

39:48David McWilliams: round up immigrants he said he was going to isolate America he said they were going to pull out of the multinational regimes he said he was going to exactly he said he was going to turn against the Europeans he's done it all yeah It's a tick, tick, tick since he's come in. So there's nothing that Trump is doing that he didn't say he was going to do. Yeah. You know, he said it all. So my point is, and one of the dilemmas, there's two dilemmas, John. One is that the dollar weakens. Yes. Right? And that, I think, is critically important for the financial architecture of the world. And the other thing for us Europeans is that Germany, for the first time since the Second World War, has decided to lead Europe.

40:31Yeah. It's going to rearm. It's going to redeploy its capital. It's going to re-engineer its manufacturing base. And it's going to be in the ascendancy. And that is a massive change for us. Is that a problem, though? Well, look, what we know about the Germans is that they are a serious crowd. They are. I'm not too sure highly armed Germans, you know, walking around Central Europe is a great idea. And when they decide they're going to rearm, and when they decide they're going to take on the Russians, they will turn Ukraine into a fortress. They will turn Ukraine into a garrison. I've just come back from Lithuania.

41:09I've been having conversations in Riga and in Vilnius about how they see the world going forward. It's very much they will be... Are they worried about the Germans? No. I think they should be, but they're not. Really? Okay. They're worried about the Russians, of course. They're worried about the Russians. They're worried about the fact that the last time they were sandwiched between Russia and Germany, and they had no hope at all in 1941. Yeah, yeah. So that's the world we're in, John. And that's the world that Trump has bequeathed us. And on the financial side, it means the dollar, which is this amazingly beautifully weird thing called the American dollar, which is the foundational stone of the global financial architecture, has been weakened.

41:53And the question we have now, and we don't really have a huge amount of time, is, is it weakened permanently? Or will the Americans reframe? But is there any currency that can replace it? No. So the last time we had this was when the British pound declined in the 1920s after the First World War. The obvious candidate was the United States. It was the big power. It was the coming superpower. It was the economy that was actually booming. It was growing tremendously. It was absorbing in lots of people. we don't have such an economy now. What about China? Rimbin being... Chinese, the thing about being the global reserve currency is you have to take on the responsibility of saving the world.

42:37And the Chinese don't want to do that. The Americans thought this was part and parcel of Pax Americana. Yeah, yeah. The Chinese have no such ambition. They do not have imperial ambitions in the way America did after the Second World War or Britain did during the British Empire. The Europeans are the other, we're the other obvious thing, but we have no sense of doing this because we have no leadership. Now, maybe under the Germans we will. Yeah. But my point is we are in a new world, John, and that new world means discussing money is more urgent than ever because money will be the weapon that is deployed to change the world and mould it into something new that we have yet really got to figure out.

43:26Well, tune into the podcast because we'll be covering all of this over the next few years.

43:31David McWilliams: Thank you all so much. It has been wonderful to talk to you about these issues, for you to listen. Thank you all very, very much. Thank you. Thank you.

44:18We'll see you next time. more with up to 90 % savings. Go to ShipStation.com and use code audio to try ShipStation free for 60 days. This is the story of the one. As a shipping manager, he's running the dock, stocking supplies, and making sure every order goes out on time. And Grainger helps him stay prepared. From shipping supplies to PPE to hand tools, he counts on Grainger to keep products moving and trucks rolling. So his operation runs smoothly no matter the shift. Call 1-800-GRAINGER, click grainger.com, or just stop by. Grainger, for the ones who get it done.