00:45:21 · Casey Handmer, Ty Morse
Basically, any country on earth one day will get will develop until they're rich enough that people are no longer dying young, which is a great thing. It's a great thing that people your age, my age, aren't dying of preventable disease, but that just means sooner or later we like your description of New Zealand. And everyone around there is old, and everyone has health problems, and everyone has dependencies, and everyone... Like, children are, like, crazy dependent and relatively expensive for a few years at the very beginning. Then they're relatively independent, but they're not economically productive for another decade or so, then they become economically productive. But for old people, you know, there's no, like, economic productivity ahead of them. There's just spending down whatever the the society has managed to accumulate, which is not... Like, it's it's it's a socially worthwhile thing to do, but at the same time, it is not compounding. Right? And and sooner or later, everyone's old. You can walk around, you know, Germany right now. The median age is 48. 48. Right? And the median voter age is older than that, obviously, because children don't vote. And you wonder why it is that these these societies... Why Europe is is kind of in its own death row. Well, why wouldn't they be? They don't they don't... Like, the the the median voter is is past the point where they can vote for a future they wanna be part of. [00:46:39] S0: You think that this outside of, like, a major war, is there any ability for us to downregulate?
00:46:44 · Casey Handmer
[00:46:44] S1: That's a good question. Some people say, well, you know, the regulations get cleared out in a major war, but it's pretty clear that a major war in 2026 would be extremely different from a major war in 1941. Basically, what happens in a war is you end up with this like... Well, we're seeing this in in Iran right now. This kind of extremely kinetic exchange of explosives and and weapons that the net effect of it is you're killing people who don't wanna die and in many cases uninvolved civilians. The number of people involved in this... In actually fighting these wars is collapsing. Right? Even in Ukraine, the number of people involved in active combat is minuscule compared to World War one and World War two. And so instead, what you're doing is blowing up infrastructure, and you're just making money expensive and destroying wealth. Right? So it's just pushing us back in the stone age, and you say, well, we need to rebuild this stuff maybe. It seems to me that the forcing function for improving regulations is more likely to be competitive pressure. So you end up in a situation, actually, we're already seeing this, where the Anglophone West is relatively economically non dynamic compared to parts of Asia, for example, particularly South Asia, and has a lot of homologation in their regulatory setup. So for example, if you're an entrepreneur in England and you don't like the fact that the English government has a certain policy, you could say go to the EU and work there. But how different is the EU? They have all the same structural problems and much of the same laws. And despite Brexit, it's pretty much the same deal. You can go to United States, and you get a better deal because capital... There's more capital here. It's more permissive environment and so on. But if you're Japanese, right, you're a young Japanese guy and... Or woman, and you wanna you wanna start a company and and build a new business and build wealth and help the economy grow, nope. You have to you have to learn a new language, go to a new country. And so what I would like to see is it would only take one of these countries to defect from the current consensus that we just have to, like, increase spending, increase taxation, increase the size of the public sector by, like, three or four x the size of the overall economy on an ongoing basis.
00:48:44 · Casey Handmer
I wrote a blog post a couple months ago pointing out that Australia, for, like, fifteen years now, has been locked into a future where it becomes fully communist, essentially, like full government control of the economy because the private economy, the economy that actually generates net wealth and takes taxes, is shrinking. But you only need one one of these countries to, say, face an existential problem, realize it's facing an existential problem and undergo massive reform. So, actually, Patrick Collison and Mario Draghi recently announced the Rine Group, which is of a think tank whose efforts are around restoring European dynamism. I find it's an interesting or useful thought experiment to think of Europe as a as kind of a a successor civilization to the civilization that built all the infrastructure that's kind of living in the ruins of that infrastructure, but isn't capable of building it again. And we're talking, like, not 1700. We're talking, like, 1960 kind of thing, like, only a few generations ago. I think a lot of it was driven by energy scarcity. Right? So, like, big big economic shock in the nineteen seventies when, basically the Saudis nationalized Saudi Aramco and and then formed the OPEC oil cartel. And we were able to find, like, a modicum of economic growth in the intervening periods through capital deepening, improvement in public health, kind of a little bit of cold war nonsense and and kind of elevation of of the developing world. And then more recently in software, consumer software, which is a really great way of improving productivity without increasing energetic inputs particularly. Although now data centers have grown to the point where they're, like, pushing double digits of total energy consumption and, like, we're starting to rub against those limits again. And so it's really important, I think, for us to grow to to break these constraints on energy availability. So our friend Isaiah is working on this, for example, on on nuclear energy, and and, obviously, solar is a key way to go that direction, you know, and then bring back permission to do things. One things the Japanese do do nicely, and and it has its own proclivities and weaknesses, but they they they normalize construction. So they're actually constructing things all the time. And part of the reason they've got an extremely powerful steel cartel, basically, with...
00:50:47 · Casey Handmer
Know, very, very politically connected that that wants to keep on building things. But they also understand that a city is really only a city if it's constantly in the process of regeneration and recreation, and it's completely acceptable to say, Well, yeah, there's one or two nice buildings, we'll keep them nice, we'll restore them, but in general we want to replace 98% of the fabric of the city every fifty years. What a radical point of view that is. But 98% of the fabric of the city every fifty years just means that on average your buildings are 25 years old instead of 150 years old, which is a major problem we have faced here in the West. It means that you get lots of practice in construction. You get lots of practice in project financing and and and management. And if you build a real stinker, you're not stuck with it forever. You just rip it down and try again. Right? So I'd I'd love to do something with the Salton Sea one day. It's this environmentally desolate wasteland in the Southern End Of California that could be like like Phoenix, Arizona, but with with with this beautiful lake in the middle of it. It could be the most extraordinarily beautiful part of the world. And, like, there's no downside to trying. The worst that can happen is it remains an environmental catastrophe. It is already an environmental catastrophe. You could only improve it by changing it. You know, it's kind of like the the right to try laws around using weird drugs if you're about dying of cancer anyway. Like, what difference does it make?
00:52:07 · Ty Morse
[00:52:07] S0: On the same kind of thread of regulation Yes. In America. America. I've never understood this idea that if Elon believes that the kind of, like, American system and all the regulation that surrounds this is basically like this unstoppable, you know, thousand strings, you can't do anything over time situation. Like, he's not gonna import that bad system to another planet.
00:52:33 · Casey Handmer
[00:52:33] S1: One would hope not, and I think that's kind of the libertarian... You know, you need you need one state which tries things differently, does things differently to become competitive. Right? So, like, in some sense, the the the Arab states do this. Like, UAE has radically lower taxes. It's quite attractive to certain areas. And in The United States, the federation, different states are able to compete in terms of their, you know, regulatory approach to various things. So some states have decided they're gonna be, like, business friendly places. Other states are so wealthy through no fault of their own that they can afford to be extremely profligate in the way that they spend money. Cough California. Cough. Yeah. There's never been a really strong forcing function for great governance in any part of The United States. But, yeah, we we need we need one Western liberal, ideally Anglophone democracy to defect and say we're going to adopt a extremely, like, aggressive deregulatory agenda. Like, AI is a great way to do it. You say, like, hey. I I I had Claude 4.6 do this a year ago. Like, ingest the complete corpus of American law and regulation and compress it to 4,000 pages, which is a Mastercard text catalog book. Right? I'm a fit guy. I should be able to fit the laws of land in an overhead locker. Right, in an overhead bin. That should be your constraint. Like, you can't just keep on adding laws forever. How many laws do you really need? You know, we... Anyone who's developed software knows that there's an optimum size. Right? And you should not have too much or too little. You should have an optimum size. But there's no forcing function. There's no process even for the destruction of laws that are, you know, obsolete or no longer needed. In the Reconstruction period after the civil war, I think under Jackson, there was a... An effort to, for the first time, actually get all of US law in one place. So you have the constitution, the founding documents, obviously, but then you had lots of laws in front of the place. It wasn't particularly well kept. It came to 1,700 pages at that time. 1,700 pages. But, like, Lincoln himself was originally a trial circuit lawyer in Illinois, I believe, prior to prior to his election.