[Auren Hoffman] Welcome to World of DaaS, a show for data enthusiasts. I'm your host, Auren Hoffman, CEO of SafeGraph. For more conversations, videos and transcripts, visit SafeGraph.com/podcasts.
Hello, fellow data nerds. My guest today is Niall Ferguson. Niall is a historian, author of 17 books, most recently Doom, which I just finished and thoroughly enjoyed, and a senior fellow at the Hoover Institution at Stanford. Niall, welcome to World of DaaS.
[Niall Ferguson] It's good to be with Auren. I'm also a data nerd. Not many historians are, but anybody who knows my work will know that I have a penchant for historical data. I love x-axes that go back to the Middle Ages, and I just used to get high on historic bond market data. So I am actually also a data nerd as well as a historian.
[Auren Hoffman] You definitely are, which is why you're here. You are in the club as are our fellow listeners. You know, I want to dive into history and data with you because you are such a data nerd. A lot of people working in the technology industry don't spend that much time studying history. Do you think things would be more different if they were more aware of the past?
[Niall Ferguson] Yes, I do. When I moved to California, which is five years ago now, I was slightly shocked to find that history had begun with the Google IPO. And everything before that was essentially Stone Age, not really worth studying. It was hard to get people around here to take history seriously. I mean they really were the kind of people who'd done CS. And if there'd been a history of requirement, they'd sort of evaded it as far as possible. I include Mark Zuckerberg in that because he never took any of my Harvard courses, and he had the chance. And that explains all of Facebook's subsidy…
[Auren Hoffman] It would be at least 3x market cap if you took your class.
[Niall Ferguson] No, they’d be smaller actually because they wouldn't have done a whole series of wicked things that were obviously going to have adverse consequences for humanity. I mean to be serious, the interesting thing about the technology world is that it is engaged in the latest of many transformations of the way in which humans interact. Most obviously, the internet was a revolution in communications, drastically lowered barriers to entry, essentially got rid of the established hierarchies which were gatekeepers for information flows. And that was a disruption that did have a historical precedent, indeed, multiple.
[Auren Hoffman] Like the printing press or some of these other things.
[Niall Ferguson] The printing press is the obvious one. I mean a lot of people pay a kind of lip service to that without actually having studied it. But I tried in my last book, The Square and the Tower, to show exactly what the similarities and differences are, and why it matters a lot that the internet has evolved in a different way from printing and that form of publishing. And I think that once you think about any of the issues that are currently burning issues in the world of technology with a historical framework, it all makes more sense. Same goes for things like antitrust or any of the issues of regulation that are currently being discussed.
[Auren Hoffman] Data companies. If you think about a data company, they're kind of essentially companies that catalog history. At SafeGraph where I work, you know, our motto is we predict the past, right? And by the way, thank you for being a SafeGraph investor.
[Niall Ferguson] Yeah. Full disclosure, I'm part of Team SafeGraph.
[Auren Hoffman] Exactly.
[Niall Ferguson] And when you first ran that slogan past me, I loved it immediately. Because in truth, history does consist of data. And the challenge is always the management and then interpretation of the data. I should have said the construction, management, and interpretation of the data. So SafeGraph is part of what I see is a very exciting aspect of the revolution caused by the internet and mobile telephony. We can see at much higher frequency and with much more granular detail how people get around. And history of humanity is partly the history of humanity's mobility.
[Auren Hoffman] Yep.
[Niall Ferguson] I love the fact that during the pandemic SafeGraph helped me and many others see how mobility was being impacted by the spread of not only the virus, but knowledge of and a deep fear of the virus. And so we were actually able, with SafeGraph’s help, to write the history of the pandemic in real time. I think that really helped understand what was going on. I'll give you a specific example. Right at the earliest stages of the pandemic my colleague, John Cochrane, at the Hoover Institution—a well-known economist whose grumpy economist blog everyone should read—made a prediction. He said people's behavior will adapt to their understanding of the virus and the disease it causes, and they will likely adjust their mobility in response to case numbers, hospitalization, and death data. That was a prediction, and he kind of modeled it out.
[Auren Hoffman] Yeah.
[Niall Ferguson] It turned out that this was right. SafeGraph data helped prove the point that there were really quite clear links from news flow on the severity of the pandemic and the way that people behaved. And then Austin Goolsbee, another economist, was able to show, again looking back on the data, that the adaptive behavior of individuals actually mattered more than lockdown restrictions. Because if you compare at adjacent places which had high versus low restrictions, behavior was extraordinarily similar. So it seems like people adjusted their behavior more in response to their perception of risk than to what they were told to do by government. And that I thought was a really interesting insight, which we couldn't possibly have had without the kind of thing that SafeGraph produces.
[Auren Hoffman] And when you think of like data companies broadly like how do you see their role in kind of like more accurately archiving historical events?
[Niall Ferguson] Well, I think it's first important to recognize that we've been doing this kind of thing for a long, long time. But the kind of data and the nature of archiving have both changed a lot. So if you go back to the really early period, when professional history emerged as a branch of scholarship, what historians tended to focus on were the written records preserved usually in state archives. This would be letters and diaries and the minutes of meetings and the acts of parliaments or the decrees of kings. And that was what historians tended to do in the early phase of the profession. The 19th century when the Germans in particular said you can't just make stuff up. You actually have to show that this was said, and you have to have a reference to a document. Now, I think in the course of the 20th century, historians became more omnivorous, and they started to look for other kinds of data. They started to look at nonpublic archives. I do a lot of work in non-private archives looking at say business archives trying to understand the decisions of corporations. And that was part of the change. But the other big shift that occurred was we began to see that apparently boring things like price data from old newspapers could help us understand flows of trade, of goods, and so forth. And then you discover that there's actually a wealth of statistical data going back surprisingly far. Because even in the medieval period, the English crown, for example, was gathering data on prices and wages. So economic history is born because there actually is a remarkably large reservoir of raw data about how the English economy works. And more recently, you get, of course, much, much more of that stuff because the systematic collection of statistics for the purposes of making policy starts more or less late 19th, early 20th century, and then becomes pretty much standardized around the world after the Second World War. So the exercise of understanding the world by this stage is a combination of looking at the documents that are generated by public and private actors, and then often juxtaposing the story, quite often different story, that the data tells. And that's really been the core of my methodology going right back to my early work. Kind of looking at what people thought was happening, and then looking at what actually was happening so far as we can tease it out of the statistics.
[Auren Hoffman] Interesting. It seems that most people in the world are more interested in history than Americans. I always thought that Americans are more interested maybe in the future, and maybe Europeans are more interested in the past. How do you see that? And as you're kind of in your adopted new country, how do you see your fellow Americans as they're interacting with history?
[Niall Ferguson] Well, I have joked with my friend Graham Allison Oliver that this is the United States of Amnesia. The point we made when we wrote that, which is quite a few years ago now, was that the government and government institutions are extremely bad at learning from the past. It's not well institutionalized. And so that it comes as a great surprise to people trying to run Iraq after 2003 that it's quite difficult to get cooperation, and it's quite hard to cope with an insurgency and all these things that really had been learned by Americans in Vietnam.
[Auren Hoffman] Or the Philippines.
[Niall Ferguson] Yeah, I mean, the history of American interventions in foreign countries goes back a long, long way. And yet, it's not really part of the way in which officials are trained. In fact, what struck me most when I moved here, which was around 2002, was the tendency of decision makers to base their decisions on different disciplines like political science or economics. Illustration of this point. Prior to the invasion of Iraq, I remember being told by somebody in the U.S. Treasury that the sort of model they had in mind for post Saddam Iraq was post-communist Poland. And I remember realizing at that moment with a terrible horror that they had no notion of how very different Poland and Iraq are as places. So I think there's a sort of failure to institutionalize history, which means that the government has a kind of structural amnesia, and each administration seems as if it has to learn by making its own mistakes. But there's another aspect of this, which I think is a little bit to do with the hierarchy of academia. History is not a kind of high status subject to major in whereas economics or computer science are. I mean, I liked when I first came to the United States, the fact that at Harvard students would have to do a broad range of subjects. And so even the most nerdy computer science person was supposed to do something historical along the four year way, but I came to the conclusion, this didn't really work. And that students tended to game the system and they did not emerge with significant historical knowledge. Indeed, it was possible really to get through Harvard with effectively none. So I think there's an institutional problem at the academic level. But I'll say one thing in defense of Americans. When I go out into the big wide world and talk about my books. When I go to bookstores or go on local radio, there is a significant section of the American public—it tends to be older—that is really interested in history and wants to argue about history, usually American history. In other words, it's a debate that goes back to 1776. And then there's this whole public debate that has been sparked by Critical Race Theory and Black Lives Matter, which the New York Times diluted or distilled rather into the 1619 Project that says, “No, no, no. The history of the United States is, in fact, bad stuff. It's about slavery and segregation and systemic racism.” So they're very heated arguments about history going on. So it's not entirely true to say it's the United States of Amnesia. I'm struck by how politically live history is. And I heard an interesting thing just the other day in a conversation with an eminent academic at Yale. And she said she was struck by the fact that the students who lean left, kind of woke students as we might call them, seem so exercised by history and past injustices that they seem almost to want to change it. And I thought that was a really interesting insight. That the great deal of what drives people to pull down statues or engage in other kinds of protest is a deep and passionate feeling that history is full of wrongs that one can somehow redress. Whereas in reality, of course, history is a done deal. It's done, right. You can't go back. There is no time machine, and we can't undo it. So I think there's a sort of sense in which that politicization of history, though, in some ways it's good, leads to slightly misplaced interest in the past. It's not our role to go back through the past and say what wicked people our ancestors were. That's not the point. Because our value system, our norms, are radically different from the norms of the 18th, 19th, and even the 20th century. So it's not that interesting to say that people in 18th century had a different view of slavery than people today. That seems like an obvious and banal point. What we really want to understand about the 18th century are a different set of things. So history is alive in America, but it's almost in danger of becoming politicized beyond being useful.
[Auren Hoffman] Interesting. Now, in The Square and the Tower, which I loved. Great book. You talked a lot about social networks. And one of the things I'm interested in is just like how things go viral. You know, I recently chatted with Sinan Aral who is a professor at MIT on a previous World of DaaS episode. We talked about like he studied how tweets go viral. You know, is there a good period of time that we could study to better kind of understand this current phenomenon?
[Niall Ferguson] Yeah, I think that it's worth looking at the impact of the printing press in Europe, and then seeing how certain things went viral in the 16th and 17th centuries.
[Auren Hoffman] Is this like the Martin Luther side of things?
[Niall Ferguson] Right so Martin Luther, his ideas went viral. He was challenging the Roman Catholic Church to reform itself. Pointing out all kinds of abuses that had grown up in the previous centuries. He was essentially saying the institution was corrupt. And a hundred years before, I think if he tried that, he would have been on a fast track to being burned at the stake as a heretic, and that would have been bad. But the thing that made it different was that after 1517, these ideas could go viral because they were very easy to reproduce with the printing press. And by that point, there were enough printing presses scattered all over Europe—and particularly in Northern Europe, in the German speaking parts of Europe—for the idea is to be pretty impossible to put back in the bottle. The genie was out, and that's a very good starting point for understanding how things go viral in the early modern period.
[Auren Hoffman] In some ways, he had a benefit that a lot of what he was saying about the church at the time was true. He was pointing out problems. Whereas a lot of things that go viral today or maybe part of the reason they go viral is because they're untrue.
[Niall Ferguson] Yeah, that's right Auren, and that brings me to the second example. At the same time or shortly after Luther’s ideas spread through the German speaking world and then through Europe as a whole leading to breaks with Rome and all kinds of countries, including places as far away as England and Scotland, another crazy idea spread with equal speed. And that was that there were witches living amongst us. Witches whose practices essentially involve a compact with Satan. Now, this idea went viral. So viral that it crossed the Atlantic and became—and everybody knows this—the case of the Salem Witch Trials. Became, for a time, a really important part of the American experience. If one looks at Europe, the number of people put to death as witches is really very high. Thousands and thousands of people during a period from the mid-16th to the mid-17th century are tried as witches and put to death. And that's a good illustration of a point that The Square and the Tower made, which is that once you create new network structures and you lower the cost of the spread of information, it's not necessarily just good ideas that go viral. It may be quite dangerous ideas that are nevertheless very compelling. And this brings us to the modern period. The problem with the internet is that the business model that evolved at Google and then was adopted by many other network platforms, whereby you monetize the data by selling ads, incentivizes the platforms to produce and disseminate content that's very engaging, keeps the eyeball on the screen. And that's, I think, a very strong argument for why we have the fake news extreme views problem on the internet. It's the rise of network platforms that have a business model that essentially promotes—it's designed to promote—engaging content, which is very often extreme views and fake news. And that's not a new problem because, clearly, witches don't live amongst us. And people who were put to death were maybe eccentric people in the town or the village, but they certainly weren't witches. I think that's the kind of problem that when the internet was going through that great structural transformation from the very decentralized worldwide web that Tim Berners-Lee envisioned to something dominated by network platforms. People really underestimated the downside risk. And I can remember the kind of happy talk—and you'll remember it too from those days back in the 2000s. Well, when everybody is connected, everything will be awesome. That was essentially the message. And the historians were kind of inaudibly shouting from the sidelines. “No, no, no, no. When everybody is connected, all kinds of crazy stuff is going to go around. And you're really underestimating the risks of a highly, highly connected world.”
[Auren Hoffman] Now, I know you study all these networks. If you think of like the who you knows versus the what you know. Maybe the who you know is like Paul Revere in the way. What type of person do you think was more important in the past? And do you think what type of person will be more important in the future?
[Niall Ferguson] One way of thinking about importance is to see how many biographies are written about somebody. If you go to the libraries, you'll find a lot of biographies of George Washington, and you'll also find a lot of biographies of quite wicked people like Adolf Hitler. In fact, I think Hitler is out there and in pole position when it comes to the number of biographies of historical figures. Now importance in that sense means, I think, a consensus that begins during a person's lifetime and grows over the period after that, that they really mattered a lot. And that by implication, if they hadn't lived or if they died much younger, the world would have been different. If you then go back to contemporary sources and ask, “Well, were they really important in a different sense, in the sense of their connectedness? Were they in a network structure very central? Did they have a high degree of centrality? Were they connected in critical ways to lots of different people? The answer can be quite different. In the case of Paul Revere, whom you mentioned, Revere was not one of the great thinkers of the American Revolution, and the number of biographies is a lot smaller than the number of George Washington biographies. But if you look at the network structure of the revolutionary movement in New England, Paul Revere was one of two people with extraordinarily high connectedness, which means he was a member of multiple organizations, including a Masonic Lodge, that were very important in forming the revolutionary movement that ultimately successfully kicked the British government out of the American colonies. And the argument of importance there is that at a critical point when he did his famous ride to warn the people of Massachusetts of a major British military operation, his connectedness meant that he was believed.
[Auren Hoffman] Yep. His credibility because he knew people.
[Niall Ferguson] I mean, this is now quite a familiar point because it's often been written about. Malcolm Gladwell writes about it in one of his books. But the interesting thing is when you start drilling down and seeing what it was that made Revere so connected, it turns out that one of the things was his involvement in the movement we call Freemasonry. And surprise, surprise, a lot of the leaders of the American Revolution were masons. And those lodges were really, really important in building a social network that was separate from the hierarchy of British society. The British envisioned a kind of aristocratic order emerging in their American colonies. They even tried to create some elements of hereditary status, but that didn't take because there was a different network structure forming in the colonies. So conclusion. If you want to think about the importance of an individual in history, don't just go with their fame because fame may itself be something of a construct. Behind the deeds of famous men, and it's usually men, there is a different version of events in which less obvious people are, in fact, crucial to the success of a movement. And this is true not just of the American Revolution. I think it's true of all revolutions. I think it's true of all the great revolutions, political and otherwise in history. Let me illustrate this point with something very close to your world. In a way, Auren, you're part of an economic revolution that we associate with the rise of the internet. The first great economic revolution that changed the world completely was the Industrial Revolution. Now, who made the Industrial Revolution? There are heroic inventors who get a lot of the airtime if you read histories of the Industrial Revolution, but it's very clear that this was not really a revolution made by a few heroic individuals. That the improvements that made the steam engine increasingly efficient were the achievements of multiple people. Yes, some eminent, some just tinkering away in their workshops. So I like the idea that when you look at the Industrial Revolution, there's not really a convincing heroic account of it in which just a handful of people transform the world.
[Auren Hoffman] You can't point to a Hamilton or a Lenin or anyone like that.
[Niall Ferguson] Yeah. I mean, you can try. You can say James Watt was the heroic improver of the steam engine, but actually, he was just one of a network of people who were all essentially obsessing about the same problem. How can we make these things more efficient? And the efficiency gains are the achievement of just a network of people all noodling on the same problem. And to me, that's a more convincing account of how things happen. And, and it's a sort of antidote to great man history. It's a history in which networks, social networks, do the transforming. And although some people get the fame, it's an unfair world. You know? Watt is famous because he just got associated with the innovation.
[Auren Hoffman] Or at the end of it, let’s say Carnegie is very famous because he was rich or something.
[Niall Ferguson] Exactly. Carnegie's famous not so much because of his economic achievements, but because of the philanthropy that he did in the final parts of his life. That’s why his name is still remembered. The Rothschild name is extremely famous in finance to this day, even though now the Rothschilds are a relatively small financial set of entities. But the reason that that name is famous has much more to do with the role they played in the 19th century in promoting Jewish emancipation, civil rights for Jews in England, France, and the German speaking world. So I think we often get a kind of skewed sense of who mattered in history because of the way that fame evolves. And fame itself is the product of the networks that basically build history. The publishers who decide to publish biographies and the people who assign the books. We have to recognize that this notion of historical importance is itself the product of networks of education and publication.
[Auren Hoffman] Now, if you and I were going to conspire together and start a secret society, like, how should we do it?
[Niall Ferguson] Definitely not with a podcast. That would be rule number one. The idea is interesting because networks that really want to change the world cannot be too open about it. Because if you say on your podcast, we're going to conspire together to change the world, you're kind of giving the game away to the vested interests who might not want you to. So when I was writing The Square and the Tower, I was very struck by the story of the Illuminati. It's a great story because people have heard of the Illuminati. They've heard the conspiracy theory version, which has found its way from the late 18th century all the way to the novels of Dan Brown. And so there's a kind of name recognition there, but nobody actually knows what the Illuminati were.
[Auren Hoffman] Unless they read your book.
[Niall Ferguson] Unless they read my book, and not enough people have done that. It’s still available in bookstores.
[Auren Hoffman] That's a tragedy. Yes.
[Niall Ferguson] But I mean the real story is fascinating. We can actually reconstruct it now. It was a sort of group of South German enlightenment radicals who really wanted to bring about a quite drastic change that would undermine the power of organized religious authority and advance ideas of enlightenment. But because this is such a revolutionary, and indeed dangerous thing to do, they created a very, very secretive society. A bit like a Masonic Lodge, with initiation rites, elaborate language, and a set of stages through which initiates had to pass before the true purpose of the organization was real to them. And this was quite smart because you just don't want to let people in without vetting them. The biggest problem for any group of people who want to change the world is that they're taking on vested interests. And it's very important, therefore, to avoid being infiltrated by--
[Auren Hoffman] Or having a double agent or something like that.
[Niall Ferguson] Yeah. And this is such a common problem historically for anybody trying to organize a change, even if it's just to change a monarch or change a prince. That we ought to be far more aware of it today. But, again, because we don't really think very historically about our own time, I think I'm struck by the way in which people very explicitly say, “We're getting together to change the world.” And one reason that those people generally don't change the world is that they have shown their intentions for doing it.
[Auren Hoffman] They're doing it live on Twitter or something like that.
[Niall Ferguson] I mean, if you really, really pose a threat to vested interests, it's best not to flag your intentions when you're a relatively weak, poorly resourced, and rather decentralized network.
[Auren Hoffman] So if anyone's listening, Niall and I are not starting a secret society. We're definitely not doing that.
[Niall Ferguson] Definitely not. No, we're just we're actually pillars of the established order. That's what we are. We like things as they are. We would never dream of changing them. I think that's one of the problems of a very transparent world in which we quite readily, too readily, reveal what we're up to. That we underestimate the extent to which our readiness to give up our data may be entrenching an established order that we might not like. I mean, I hear all the time about the problem of inequality and how we need to do something about that. It seems to me fairly obvious that inequality is hugely beneficial to a tiny percentage of people who have billions of dollars of wealth. And if you expect the wealth holders to let you radically alter the distribution of wealth without a fight, you really haven't learned anything from history. And this might seem a little odd, but I can assure you in most countries in the world, the principal owners of wealth—the people who are in the 0.01% of the distribution—really do not want transformative social change. And they are quite well positioned to stop it.
[Auren Hoffman] Yep. So they would be the obvious dis beneficiaries of any change.
[Niall Ferguson] They have good reason to be wary. Because if one goes back to the early 20th century, we're only talking about a century ago, or two China in the period after 1949. What happened in those revolutions was that the wealthy elite, the people who own the wealth, we're not only expropriated, but often were killed. Frank Dikötter’s book on the Maoist revolution shows that in the immediate aftermath of seizing power, the Chinese communists carried out mass slaughter of landlords, of landowners. The Bolsheviks took a similar approach, not just to the monarchy but to the aristocracy. It was very prudent if you were an aristocrat in the period after 1970 to get the hell out of Russia. Say goodbye to vast estate and be glad that you still had your life. So I think we've slightly forgotten how high the stakes are in all conversations about social justice. The stakes are very high.
[Auren Hoffman] Now I just finished your book Doom, which I loved. And one of the things I started thinking when I was reading is I started thinking about Paul Ehrlich who wrote the population bomb, where he predicted worldwide famine, I think, in the 70s and 80s. He wrote the book, I believe, in like 1968. And at the time, there were all these smart people that believed in this catastrophe. This overpopulation was going to lead to, you know, massive starvation. And they kind of failed to see that we could invest in technology. In this case the Green Agricultural Revolution which really changed things. And there seems to be plenty of catastrophizing today. Is this just a historical thing where smart people kind of tend toward that? Or is there a legitimacy in all this catastrophizing?
[Niall Ferguson] Well, the idea that we were going to produce too many people and that there would be disastrous consequences goes a long way.
[Auren Hoffman] Right, it’s Malthus.
[Niall Ferguson] Back to Thomas Malthus who's a clergyman in the late 18th century who writes his essay on the principle of population, making the observation that population increases geometrically, and the food supply is arithmetic. And that idea has had a very long lifespan, ironically because as he was writing, a true agricultural revolution was already underway in England that was causing the productivity of English agriculture to soar. And the story of the period after Malthus’s life was a story in which the world economy proved him wrong. And that agricultural revolution, which really we can date from Western Europe in the 18th century, becomes pretty widespread. But it's nothing compared with the Green Revolution, which is a truly global transformation in the efficiency of agriculture. Broadly speaking, the story of the agricultural, commercial, and industrial revolutions is a story where growth of productivity in every sector solves the Malthus problem, and allows human population to reach extraordinary heights, and we're still growing. And the projections of the United Nations tell us that we’ll pass the 9 billion mark. That we’ll only really think about having a plateau towards the end of this century. Most of that predicted growth, of course, is in Africa. The plateau has already been arrived at in much of the world. But the human species is still going to keep growing, according to the UN, right through this century, especially in Africa. Okay, so that's the story. That's the backstory.
[Auren Hoffman] Yeah.
[Niall Ferguson] People who worry about the end of the world belong in another even longer tradition going all the way back to the earliest religions. It's amazing how fascinated human beings are by the end of the world as an idea. And so it's a very important part of Christian and Muslim theology that the world is going to end.
[Auren Hoffman] Yes, the rapture.
[Niall Ferguson] The scatology of religion is that it's all going to end in some spectacular sequence of events that will end the world and usher in some new era of divine utopia.
[Auren Hoffman] It does seem like some people like kind of want the world to end. Like I think this would be a bad thing, probably, if the world ended, but a lot of people kind of are in some way hoping that the world ends in kind of a weird way.
[Niall Ferguson] Yeah weird is kind of putting it mildly. Both Evangelical Christians who think about the end time as a rapture in which a divine utopia will succeed this world of sin have their counterparts in the world of Islamic extremism where you are in fact engaged in jihad against the infidel to fast track yourself to paradise. But the ultimate goal, once again, is the end of the world, and a new era of divine virtue. That idea is so powerful that it seems impossible to eradicate. You would have thought that the advances I talked about a minute ago—the Industrial Revolution, a dramatic improvement not only in living standards, but life expectancy. You would have thought that those things would have made people somewhat less needy of a blissful future state. I mean I can understand the medieval peasant wanting to believe in an afterlife that was really much superior to his earthly laws. But it's harder to understand why somebody living in the early 21st century with all the material comforts available would nevertheless elect to become a terrorist. And yet, that pattern has repeated itself. It's actually not the poor, downtrodden types who become the most dangerous people in extreme ideological organizations. So we seem to be dealing here with some profound fascination with the end of the world. And I think it carries over in a strange way into the more extreme climate alarmists. People like Greta Thunberg, who while they like to talk about science, in fact seems to me to personify a distinctly religious millenarian tradition. When people say the world is going to end in 12 years if we don't do X, the reality is that they're engaged in massive exaggeration of the downside risk. I mean, it's clear that the planet is warming, and that will have all kinds of adverse consequences. But it's a stretch to say that it'll be the end of the world. And not even the most negative scenario of the Intergovernmental Panel on Climate Change says that. It just says that there'll be lots of adverse consequences. And that won't even mean excess mortality because people will be able to move. It's not that fast acting. It's not like a pandemic. So the idea that the end of the world is coming because of manmade greenhouse gas emissions is not actually a very scientific idea at all. And in the book Doom, I try to argue that that is just one of a whole series of sources of disasters that will kill a relatively small percentage of the world population. The challenge for us is not the end of the world, which is a pretty far distance scenario. I mean it's coming. At some point, this planet won't support human life. I mean, really, there's nothing we can do about that. That's just the way the world is going to go, but over a very, very long time horizon. Our problem in the much more short term of our lives, our children's lives, and their children's lives is just managing the inevitable disasters that history throws at us from pandemics to extreme weather events in a better way. Because I don't think we manage them very well these days, despite our vastly greater scientific knowledge. So my sense is that the fascination with the end of the world, which by the way also drives us to watch apocalyptic science fiction movies. It almost distracts us from the more humdrum challenges that disasters pose. We're kind of sitting there fascinated by the end of the world instead of giving some serious thought to what we can do to mitigate the effects of global warming, which clearly is going to happen. I mean, there's no credible political economy I see that stops China building coal burning power stations. We can talk about it till we're blue in the face. They're gonna keep building them until it suits them to stop. So I see global warming as almost inevitable at this point. The question is how do we mitigate its adverse consequences? But some other people would rather talk about the end of the world and say—as Greta Thunberg said in January of 2020--you must stop your emissions right now. Now, instantly, all emissions. Which is a pretty unrealistic thing to recommend. Ironically, we did that. Not because of anything she said. But because of COVID.
[Auren Hoffman] The pandemic.
[Niall Ferguson] We actually ran the experiment. Let's see what happens if we shut down manufacturing, first in China and then in Europe and then in North America. And it's true. We really reduced emissions for that period of the really extreme lockdowns last year. We also caused unemployment to soar to Great Depression levels for a short period of time until we realized it wasn't sustainable. That was a kind of interesting experiment run because I think it showed the kind of extinction rebellion arguments, they're not politically viable. It's not like we really have the option to shut down manufacturing and stop immediately consuming fossil fuels. So why argue for something that unrealistic? I think the answer is because it's deeply satisfying to say the end of the world is coming. I've had a revelation, and only revolutionary change can avert it. I mean, I don't see a profound difference between that state of mind and the state of mind of medieval saints.
[Auren Hoffman] It’s a bit of a cult in a way is what you're saying. We have to drink this Kool Aid together. One of the things you talked a lot about in the book is this idea of Cassandras, right. And in some ways, they can do good things. Cassandras can point out problems, right? But they can also point out too many problems. You know the Cassandra's probably have predicted 90 of the last two pandemics, and you know all these different things all the way through. And, of course, every time you point out a problem, it’s becoming very, very expensive to build a bridge because Cassandras are constantly pointing out all these issues. So it becomes very, very difficult to innovate. So on one hand, Cassandras do all these good things. They point out these issues. And you know, you talked about the shuttle tragedy or some of these other things that maybe if they listened to a Cassandra that maybe wouldn't have happened. But on the other side, you could say well maybe we listen too much to Cassandras today. Because passengers are mostly wrong. So how do we decide when to listen and when not to listen to these Cassandras?
[Niall Ferguson] Well, you've framed it in the right way Auren. I mean the original Cassandra of Greek tragedy was not heeded, even though her prophecy proved to be accurate.
[Auren Hoffman] Yes.
[Niall Ferguson] And that has led to a certain view of the world that says each time a disaster happens—Take 911. There was a Cassandra—it was Richard Clarke—who foresaw it. And if only we had listened to Richard Clarke, it wouldn't have happened. You can retrofit any disaster narrative that way. You'll always find somebody who predicted it. The number of people who predicted a pandemic was very large.
[Auren Hoffman] It was thousands and thousands of people.
[Niall Ferguson] It was almost like an annual event and TED talks to predict the next pandemic.
[Auren Hoffman] And Richard Clarke historically, even in the 80s and 90s, was constantly predicting all these things that turned out to be wrong.
[Niall Ferguson] Nouriel Roubini predicted the financial crisis every year beginning in 2002. I think he may have done it before then, but that was when I first met him until finally he got one. And then he subsequently kept predicting them. You're remembered for that one you got right, not all the ones that you call that didn't happen. So I think the correct conclusion is not that we should sort of have a Cassandra in every government agency because that would have a completely paralyzing effect. As you rightly say, Cassandras are available to predict any disaster like any day of the week. And if you infer from their prediction that we must stop emitting carbon dioxide or we must stop Indians from having children—which was of course the consequence of that early prediction that the world was going to have mass famines. That led to a policy of forced sterilization in India that was really very disastrous. It also led indirectly to the one child policy in China. It's very important, actually, not to heed or take too literally people who prophesied disastrous outcomes because they may be quite wrong. And you may take steps to avert disaster that will have worse consequences than might otherwise have happened. This is a point Bjorn Lomborg makes on the issue of climate, which is an important one. If you take steps that slow growth to near zero, you will have fewer resources available to deal with the problem of climate change. And so you may actually make matters worse than they might have been. So that's the first point to make. The second point to make is that it is inherently impossible to predict most disasters. And therefore Cassandras are really no different from the astrology column in the local newspaper with your horoscope. It's actually impossible to predict most disasters because disasters are not normally distributed. I mean I can attach some probability to one or both of us being involved in an automobile accident in the coming 12 months. That’s how the insurance industry functions. But I really can't attach a meaningful probability to a huge earthquake occurring during our discussion. We're both in California. Notionally there is a big earthquake going to happen here at some point, but we have no idea when.
[Auren Hoffman] Yeah.
[Niall Ferguson] There is in fact no way of saying when that will happen and how big it will be. And the same applies to most of the things that we think of as disasters. They're either randomly distributed, like big wars. Hey, there could be a really big war between the US and China at some point in the next few years. There could be, but I cannot really attach a meaningful probability to that. Because as a man named L.F. Richardson showed a long time ago, all the way back before World War II. The distribution of war historically follows no meaningful pattern. That's the critical point. Since we can't predict catastrophes, in fact Cassandras are superfluous. All we really need to do is react rapidly when a disaster begins. That's the optimal strategy. Because if you constantly kind of brace yourself for a whole range of disasters, you may actually find yourselves paralyzed. Better to keep on going, aware that some disaster may strike and being ready for that eventuality. As in the first tremor is the point at which you probably want to get out from under an object that might crush you. The first reports of a novel Coronavirus in Wuhan were a cue to start adapting behavior just in case it was a highly contagious and dangerous virus. I've come to realize writing Doom, that it's not Cassandras we need. It's just early warning systems. Early warnings and rapid responses to them are the way to go rather than modeling, creating some artificial projection that says date x a disaster…
[Auren Hoffman] Or some sort of like more anti fragile type of system.
[Niall Ferguson] Yeah. I think it was interesting to me that back in January when the pandemic was at its early, early stages, Nassim Taleb was one of a very small number of people who said we need to take really quite drastic early action to contain this because there's a nonzero probability it's a very contagious dangerous virus. And he did a great paper with Yaneer Bar-Yam and Joe Norman saying just that. It was short, and it was absolutely spot on. And I think it was interesting that Nassim, who came up with the idea of anti-fragility and of a black swan in an earlier book, was so quick to see that there was a huge downside risk in what was happening in Wuhan back in January last year.
[Auren Hoffman] Now, one thing that I'd love to talk to you about is just the idea of playing with ideas. Because when you play with ideas, you're essentially kind of thinking outside the box. And in some ways, it isn't really safe to play with these ideas publicly because you need the freedom to be wrong at kind of the ideation stage of the idea. How do one or how do you play with these ideas in a safe way? And then how can you do it in a way where you avoid or at least mitigate things like self-censorship?
[Niall Ferguson] Well, it used to be perfectly possible to say outrageous things at an economic seminar. It used to be at universities that you could dare to think, as Immanuel Kant said in his essay What is Enlightenment? And indeed, that was what drew me through to academic life as a young man, the thought that there was a domain in which one could think freely with academic freedom as a special dispensation.
[Auren Hoffman] Something like the idea of tenure was that right.
[Niall Ferguson] Yeah because you couldn't be fired. And so for a long time, really the early part of my career, I was able to write what were considered outrageous things with impunity.
[Auren Hoffman] Empire in some ways was a controversial book.
[Niall Ferguson] My first books were controversial. For example, The Pity of War argued that Britain should not have intervened in World War I. We should just have let Germany win to put it very simply. And that was a quite contrarian and controversial thing to write. Empire, which came out in, I think, 2003 said, on balance, the British Empire was a good thing. The subtitle in I think the UK edition was how Britain made the modern world. And the book argued that you couldn't really imagine the modern world without the British Empire and a world without it would have almost certainly been less good because a whole set of ideas would not have spread as far as they did. Now, I could say those things in the 1990s and the early 2000s. I could even do a TV series around Empire. And that has become much harder today because a set of ideas have taken hold in academia that essentially inhibits the expression of ideas that some people find triggering or uncomfortable or offensive. And this is a really interesting change that's happened, and it's taken place quite rapidly because I wasn't really aware of it 10 years ago. And I became very aware of it starting, oh I don't know around about 2011, when a much more aggressive culture evolved—partly on the internet, partly on campus—where if you said something that people found offensive or triggering, you would be denounced, and denunciation would then be amplified. Calls for your sacking would suddenly be all over social media. Academic life used to be a place where quite obnoxiously brilliant people could be obnoxious and brilliant with no penalty, and that's no longer the case. Now, I can't believe that that's a good step. I mean people's feelings may be less hurt, but we're just never going to have such brilliant ideas. I'll tell you just to give you an example of the kind of person I have in mind. In Doom, I tell the story of Maurice Hilleman, who probably saved more human lives than any individual in history because he invented so many successful vaccines. Including one against the 1957 Asian flu.
[Auren Hoffman] And he was a bit of a jerk.
[Niall Ferguson] Well, he was clearly a jerk. Maybe jerk’s not the right word. He was very mercurial. He had a routine where he was hiring people for the laboratory where he would show them shrunken heads and say, “This is what happened to the people who failed.” You know, of course, they weren't real shrunken heads. I think his kids had made them. But that kind of thing, to me, that's the spirit of the innovative mind. And it's slightly red of tooth and claw. I mean, you're not going to feel terribly comfortable if Maurice Hilleman is directing your laboratory because you know that if you screw up, you'll certainly get yelled at. You may get fired. But that culture is kind of no longer viable, even in the private sector, even in tech companies. The obnoxious CEO is kind of, at this point, an endangered species.
[Auren Hoffman] Before we leave, just two personal questions. So one, you and your wife, Ayaan, you're both very well-known public intellectuals, which is somewhat rare for a married couple, right? You're both super successful authors, speakers. You engage sometimes on similar topics. How does your partnership help sharpen each other?
[Niall Ferguson] I'm very lucky to be married to Ayaan, who is brilliant, brave, and beautiful, which is a great trifecta. It means that in our household we are talking not only about who takes which child to which activity, which, of course, is what married couples have to talk about when their kids are nine and three years old. But we are also talking about what is the significance of the fall of Kabul. What will the consequences be of a fresh wave of migration from—
[Auren Hoffman] I've been over dinner at your house with the nine year old and a three year old, and that is exactly what you talk about in front of them, which is amazing.
[Niall Ferguson] Yeah. And our nine year old is quite loquacious and has his own often strong and interesting view. So yeah. I think that's really hugely important. I grew up in a pretty talkative family, and the dinner table was a place where one road test one's ideas. And I encourage Thomas, who's nine, to do this. I mean, he came up last year with a brilliant insight, one of many, but this is the one that really beat all the others. He said, “Dad, there are two pandemics at the moment.” And I said, “How's that?” He said, “Well, there's COVID-19, which everybody knows about, but there's WOKID-19. And WOKID-19 is more contagious because you can get it from the internet.” Now that's not a bad insight for somebody who’s, I guess he must have been eight when that hit him. So yeah.
[Auren Hoffman] Most certainly that's your child and Ayann’s child.
[Niall Ferguson] Yeah, I think that's the benefit of…You want to have your family be a place where ideas can be freely discussed. We definitely have a full radical free speech zone at our home, if nowhere else.
[Auren Hoffman] Okay, last question we ask all of our guests. If you can go back in time, what advice would you wish you could have given to your younger self?
[Niall Ferguson] Oh, that's easy. Back when I was 16, the way in which the education system worked was that you had to narrow down—if you wanted to go to an English University—the number of subjects essentially to three. And I remember I had to choose three subjects to do at A-level in order to apply to Oxford. My choices were limited. I could not do history, English and mathematics. The school said, “Well, that's just not possible for timetabling reasons.” And so I ended up doing history, English, and Latin. My Latin is not bad, but was never great. But my mathematics suffered hugely from that choice. If I could go back to Niall age 16, I would say stick to your guns. Just insist on maths. Do mathematics, even if it means doing it with a private tutor. Do not stop doing math. Because it's not like history, which you can kind of carry on in a sort of spare time way. You have to really keep focused on math for your life.
[Auren Hoffman] You have to keep practicing.
[Niall Ferguson] Yeah, and I didn't do that. It's kind of irretrievable when you realize, as I did. Ooh, it must have been five or six years later that I really needed it for some of the more econometric stuff that I wanted to do. It was too late. It had gone. So that's the one piece of advice, and I give it to all people listening. I mean don’t stop doing math because it's really impossible to sustain by yourself if you have any significant interruption.
[Auren Hoffman] Interesting. All right, this has been great. Thank you Niall for being on World of DaaS. Thank you so much.
[Niall Ferguson] You made me feel I hadn't been funny enough Auren, but you asked non funny questions dude. It's not my fault.
[Auren Hoffman] I agree. If I was a better interviewer, this definitely would have been a more funny podcast.
[Niall Ferguson] You’re a terrible straight man. We should never do comedy together. Ever.
[Auren Hoffman] This is a very good point. All right, thank you again.
[Niall Ferguson] Thanks Auren, my pleasure.
[Auren Hoffman] Thanks for listening. If you enjoyed this show, consider rating this podcast and leaving a review. For more World of DaaS (DaaS is D-A-A-S), you can subscribe on Spotify or Apple Podcasts. Also check out YouTube for the videos. You can find me on Twitter at @auren (A-U-R-E-N). I’d love to hear from you.
Technology drives many transformations in how humans interact. Yet, very few people working in technology spend time studying the past. Niall Ferguson believes that we would better understand today's burning issues in technology if we thought about them with a historical framework.
Niall Ferguson is the Milbank Family Senior Fellow at the Hoover Institution, a public policy think tank within Stanford University. Niall is also an historian, columnist at Bloomberg, and author of 17 books.
Auren and Niall explore early examples of virality in the 16th and 17th century, data's role in writing and understanding history, and what you shouldn't do if you want to change the world. They also dive into Niall's latest book, Doom, and Niall's concern that society today is limiting the creation of brilliant ideas.
Tyler Cowen is Professor of Economics at George Mason University, host of the Conversations with Tyler podcast, blogger at Marginal Revolution, author of several books (including one my personal favorites, the Great Stagnation).
Tyler is one of the very few truly committed to constantly learning. He also reads 5-10x faster than a fast reader, so his superpower is consuming large amounts of information.
We cover how the last year drove the end of the Great Stagnation, society’s newfound appreciation for big business, why Tyler thinks economists’ use of data is overrated, how to spot talent, why organizational capital would be one of the most valuable data sources, and so much more.
Sinan Aral, Professor of Management, Marketing, IT and Data Science at MIT, talks with World of DaaS host Auren Hoffman. Sinan is also the director of the MIT Initiative on the Digital Economy, founding partner of Manifest Capital, and the author of the book “Hype Machine”. Auren and Sinan discuss why social media networks are optimized to connect users with like-minded people, what creates viral content, and how to solve market failures in social media. They also discuss the future of Wall Street Bets and why it will likely remain part of our investment landscape.