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Hi, I'm Jim O'Shaughnessy and welcome to Infinite Loops.
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Sometimes we get caught up in what feel like infinite loops when trying to figure things out.
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Markets go up and down, research is presented and then refuted, and we find ourselves right back where we started.
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The goal of this podcast is to learn how we can reset our thinking on issues that hopefully leaves us with a better understanding as to why we think the way we think and how we might be able to change that to avoid going in infinite loops of thought.
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We hope to offer our listeners a fresh perspective on a variety of issues and look at them through a multifaceted lens — including history, philosophy, art, science, linguistics, and yes, also through quantitative analysis.
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And through these discussions help you not only become a better investor, but also become a more nuanced thinker.
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With each episode we hope to bring you along with us as we learn together.
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Thanks for joining us, now please enjoy this episode of Infinite Loops.
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Disclaimer: Jim O'Shaughnessy is chairman and Co-Chief Investment Officer of O'Shaughnessy Asset Management, where Jamie Catherwood is an associate.
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All opinions expressed by Jim, Jamie and podcast guests are solely their own opinions and do not reflect the opinions of O'Shaughnessy Asset Management.
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This podcast is for informational purposes only, and should not be relied upon as a basis for investment decisions.
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Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.
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Jim O'Shaughnessy: Well, hello everyone for the second time.
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I'll explain that in a minute. Welcome.
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It's Jim O'Shaughnessy with Infinite Loops.
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I am super excited today, to have as my guest, Jonathan Bi.
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Now Jonathan, you are CV is just like, it amazes me that you are as young as you are.
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You first studied mathematics and competed in the Canadian Olympia ad for mathematics.
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You took a degree in computer science, but then you read this fellow called Rene Girard, who you found very, very intriguing.
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So you went back to school, took another degree in philosophy.
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I particularly like what you concentrated on, which was Buddhist theory.
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I'm more of a Daoist, but they can talk to each other certainly.
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And then you alighted on a series of seven lectures with my friend, David Perell about Girardian theory. Welcome.
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Jonathan Bi: Thanks for having me.
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When David gave me a very similar introduction, I said to people that I was worried, he was not unlike the equity market, setting me up so high that I could only fall from here, but that was last November.
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So I suppose that analogy has passed already.
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Jim O'Shaughnessy: Well, I don't know. Let's see.
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They might- Jonathan Bi: Exactly hold tight.
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Hold on tight- Jim O'Shaughnessy: ...
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for the third leg down in a bear market.
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I said for the second time gang, because as you know, I sometimes fuck everything up, and I failed to hit record, and Jonathan was kind enough to jump right in and say, "Hey, old guy, you got to hit record on this technology."
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And I'm like, "Alexa, Alexa, it doesn't have a voice recording."
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Jonathan Bi: There you go.
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Jim O'Shaughnessy: So, I'm going to actually lead in with how you end it, the first lecture, which you will find in our show notes, the link to Jonathan and David's first lecture on Girard with how you ended it.
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And you ended it by quoting Dante, which was essentially, "Abandon hope, all ye who enter here." Wow. Jonathan Bi: Yeah.
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Girard, especially the later Girard.
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And maybe you tell me maybe this is something that happens to everyone with age.
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It gets really, really pessimistic in earlier Girard, when he was writing his [inaudible] things hidden, he believed to some extent that the rational understanding of the mimetic mechanism and scapegoating could help us steer away from global violence and catastrophe.
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But the later Girard, especially in his final work, what is called a Completing Clausewitz, but translated as battling to the end was extremely pessimistic.
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And he would say things like, "We would have failed and Christ tried to save us, but we simply stumbled.
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He took off our training wheels and we've simply stumbled."
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And so Girard indeed does become extremely pessimistic.
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And I wanted the lecture series to reflect that as well, that you're not walking into an enlightenment world of reason, and sunshine, and rainbows.
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But the history is actually a very terrible one that you're walking into.
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Jim O'Shaughnessy: Yeah, this is not unicorns, and rainbows, and kitty tales.
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I originally started studying Girard for pretty pragmatic reasons. , actually.
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I'm, as you probably know an investor, we invest quantitatively, but I've always wanted to have as good an understanding of human nature as possible.
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And so quite a while ago, I stumbled on to Girard's works and found it absolutely fascinating.
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I have like you, some bones of contention with him and I think you're right about, oh, I know you're right about him becoming incredibly pessimistic with age.
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I tend to be going the other way, which is unusual, I think.
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I tend to be coming at age 62 more optimistic probably as the result of what I call The Great Reshuffle, but as sort of the Deutschen idea that we are truly standing at the beginning of infinity and we simply have no idea what new information, what new discoveries, etc.
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That we will be able to uncover.
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So- Jonathan Bi: A form of technological optimism that you think that science and technology is going to rescue us in some sense.
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Jim O'Shaughnessy: So in some sense, I wouldn't say that, I would say that we're going to be rescued.
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I would say that these new tools, because essentially I look at almost every technology as a tool, right? Jonathan Bi: Yeah.
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Jim O'Shaughnessy: If you have a shovel, it's a tool, you can dig a hole or build something, or kill somebody with it.
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The shovel itself is neither good, nor bad.
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It depends on whose hands that shovel is in my opinion.
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And, and I think it kind of continues to go on potentially right up until if we get sentient AI that requires a much different attitude and thought process.
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Jonathan Bi: So, if we can...
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this is already being such a generative conversation.
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I don't want to lead us too far afield because we want to talk about the cores of Girard.
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But I think one response to what you just said, is that's only because of the historical contingency that you and I have brought up in.
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That we think that the world has been so congenial in the last 62 years, at least that technology has been used for human flourishing, more than inflicting human suffering.
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However, once we get into a less congenial world, perhaps one that we're about to into very soon, I think most people would view technology, not necessarily as a positive, but sometimes as a negative.
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And in fact, it's happened at least once already in history, where the optimism of the 20th century, or this age of machines in Paris, I think the Eiffel tower is supposed to represent some glorious human future where we were supposed to engineer ourselves out of sort of our suffering.
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It gave way to the second world war, and these inventions became just unbelievable sort of tools of mass destruction.
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And so everyone almost flipped the other way on technology.
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So perhaps your optimism, and I think my default optimism is due more to the small historical contingency of the last 60 years, rather than a long sort of trend of history.
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I hope that opinion's wrong.
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I'm not saying I agree with that. Jim O'Shaughnessy: Yeah.
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Jonathan Bi: That'd be the objection. Jim O'Shaughnessy: Yeah.
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So, potentially the other thing that I love is history.
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So I think I have a reasonably good take on history, at least since we began writing.
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And one of the things that I was going to ask you about later, but I'm going to ask you about right now, because it's coming up in the conversation was this idea of Adam and Eve, right?
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And Girard talks about that quite a bit.
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And yet, I think you probably know that Eve essentially is based on a Greek myth where Zeus slights Aris, who was the goddess of chaos by not inviting her to a banquet at Olympus.
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And Aris decides she's going to get even with Zeus.
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And so she creates a magic apple on which she writes Kalistae, which means to the prettiest one, and rolls the apple's the into the banquet hall.
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Jonathan Bi: Trojan war, right? Jim O'Shaughnessy: Yes. Exactly. Exactly.
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So I think that at least through my reading of history, what you do is, you find all sorts of stories that we think maybe were the original story actually weren't.
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And they were actually based on much older stories that were so called updated by others.
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So in terms of technology, yes, you are correct in saying that for the most part, over my lifetime, I've lived in a relatively peaceful world in which technology has been used mostly for the benefit of human beings, but very well aware of its ill use.
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The only thing I would say to the thought of World War II and the antecedence there, is the idea that ultimately we're talking about human beings, and how we choose to do things and perceive things.
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And so for example, we have Woodrow Wilson, probably the worst person to be sitting in the oval office at the Armistice and the treaty of versailles, because he was a moralist and he wanted to teach Germany a lesson.
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And in a book that I think pairs very nicely with Girard's work by Will Storr called The Status Game.
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One of the things that Storr points out and I think proves to at least to my, maybe it's motivated reasoning on my part, but at least to my satisfaction is that when you humiliate another human and you don't kill them, which we're going to get into, when we get back to Girard, look at this, we're already way off of Girard.
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Jonathan Bi: I know, I know.
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Jim O'Shaughnessy: But when you humiliate another person or a nation, like we humiliated Germany with the terms ending World War I you create a very, very dangerous mix that almost always historically comes back to bite you in the ass.
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In this case, Germany being humiliated, despite its glorious history, and music and philosophy, and art, and most of the sciences led the humiliated Germans to open the door slightly to the madman Hitler.
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And that was one of the things that got us where we were.
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So I definitely think that you're absolutely correct in saying that this little slice of history we're talking about- Jonathan Bi: Yeah. Jim O'Shaughnessy: ...
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has been pretty unique in its generally positive outcomes from technology and its use. Jonathan Bi: Right.
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Jim O'Shaughnessy: I think, the one we're going into, also has a lot of positive things going for it. Jonathan Bi: Right.
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Jim O'Shaughnessy: We can talk about that.
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But I do think that when Prometheus gave us the gift of fire, again, it was, we humans who decided how we were going to use the fire.
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We're going to use it to cook and warm ourselves, or are we going to burn down villages with it.
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So that's where I want to jump off with Girard because we're really talking about human nature. Jonathan Bi: Right.
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Jim O'Shaughnessy: And what drives us as humans.
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And one of the things that I loved in the first lecture that I watched, by the way, I love the fact that you have a very, almost theatrical presentation style.
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I've sat through a lot of philosophy lectures and I have to admit sometimes I'm just like, this. Jonathan Bi: Yeah.
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Jim O'Shaughnessy: You make it really, really interesting. I wish...
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unless I'm not going to say you have to go into academia, but your classes would be full.
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One of the things that you did was lead in to your own story.
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And I think it would be great if you could recreate that here for our audience. Jonathan Bi: Yeah. I'm more than happy to.
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So I was born in Beijing, and I was raised between Beijing and Vancouver.
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And I think I was very ambitious growing up, and extremely prideful.
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And I think those two things are very commonly tied together, pride and ambition.
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And so I worked my ass off from a public Canadian school to get into an Ivy league.
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And then I dropped out, my sort of freshman spring to sort of run a startup company.
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Raise after small friends and family, ended up not working, went back to school.
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And that was a really tough experience because before all of my failures were me going up against something in the external world and failing, but me fundamentally being sure of my own desires.
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Whereas, when I retrospected on this experience, I didn't really want to build a company at the time.
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I just wanted to do what was cool, and what was cool at any elite college these days is to drop out as soon as possible to sort of raise around.
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And so I turned my sort of natural curiosity, which in my earlier days, as you mentioned, was directed at the external world through STEM and most notably mathematics, internally.
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And that's when I got introduced to philosophy.
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So, in my sophomore years, I was just trying to wrap up my CS classes as quickly as I could.
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And I found myself really being influenced by two set of authors the most: Buddhism and Girard.
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And those were my two trusted stewards with, if you will, that I was trying to self-psychoanalyze, and self-diagnose, and what...
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I'm sorry, there was actually a third set of authors.
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And that was a group that my professors called the recognition theorists.
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And this is the German tradition by Hegel most notably, the French tradition, Russo, most notably, and the Scottish tradition in Hume.
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And all these people believe that a primary good that humans seek for is not tables and chairs.
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It's not even putative end like sex or food, but it's recognition, right?
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It's social goods that we're after.
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And I think all these three authors that the Buddhist, Girard, and then the recognition theorists were, were honing on this one truth.
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And this was also the thing that I was trying to self-diagnose that I simply care...
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I simply existed much to externally.
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That was my self-diagnosis.
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I lived as if I was a character in a movie.
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The implication there, obviously being a movie is meant to be seen, and not to be experienced and lived in.
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And so for me, the interest of Girard, as well as a Buddhism, and philosophy to this day is not so much as academic as it is soteriological, which means in relation to salvation, for me making that lecture was the joy in and of itself because I wrestled with Girard, and learned a lot more about his theory, and therefore myself, and what I think that the world is like.
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And, so publishing it and going to things like this is the cherry on top, but I just have an innate joy to do and practice philosophy.
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And I think by the way, that's also the reason why I left the academy.
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I joke to my friends that I like contemplation too much to make out of it a career.
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I was seeing how in academy, when social status is so oriented around publishing and philosophy, knowing funny little arguments, that's a bit dismissive, but I think you get my point, the sort of drive for truth, and drive for knowing that comes from a genuine wellspring can quickly transform into a status game in and of itself.
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And I think that's what a lot of the academy has become.
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I hope to your question about me being an academic, I hope to return to the academy one day, but I want to establish myself in the world first to have a financial, but also the social means to distance myself away from it, if necessary. Jim O'Shaughnessy: Yeah.
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I think we're very much alike in that respect in that I too, I didn't take a degree in philosophy.
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I just was fascinated by it.
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So I just was read quite a bit, many of the works of the people you mentioned.
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One of the things that I came away with, which was why I became interested in Girard specifically, was this idea...
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my degree is in economics.
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And of course, if we look at the assumptions that go into economics, in my opinion, most of them are dead wrong.
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Ceteris Paribus rarely is.
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And I became increasingly aware, from my own studies that even economic man was essentially driven through a emotion, and not through pragmatism or rationality.
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And there's actually a wonderful book by a guy by the name of Howard Bloom in which he talks about the genius of the beast.
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And he has a wonderful passage, which is talking about, we should have this massive map of ideas and hacks, etc.
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And he's like, no, no, no.
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What we should have, is a complete encyclopedia of human emotion.
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And he goes on to say that human emotions are at the center of all economic exchanges. Jonathan Bi: Yeah.
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Jim O'Shaughnessy: Desire is at that center of all human exchanges.
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And so my theory, as I developed it in trying to apply it to my field, what I do, quantitative investing was to sort of understand that all of the economic theories that I had been taught were essentially fallacious, because they did not understand that at the center of this all stood emotional us, humans.
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And that when you look at how these things came about, what you can see is a decision is being made emotionally.
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And then afterwards, post hoc papered over with rationality.
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I there's a GIF I use on- Jonathan Bi: Precisely. Precisely.
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Jim O'Shaughnessy: There's a GIF I use on Twitter all the time which is a young man going because of reasons.
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And that is not why that young man made his decision. Jonathan Bi: Right.
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Jim O'Shaughnessy: He made his decision because of an emotional reaction.
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I believe that we are at our core, emotionally based creatures.
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I think that our driving emotion is fear, but also the desire as you put it eloquently for prestige, for standing out.
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But due to our tribal evolution, we had a first fit in before we could stand out, right?
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So we had both of these things operating with us within us at the same time.
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And I think from your lecture, you're going to say it much more eloquently than me.
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Talk a little bit about how Girard frames, that type of argument. Jonathan Bi: Yeah.
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Well, there's, this is so interesting.
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And the reason I was probably looking away is that I've written down a series of notes.
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Because I have like a few things I want to hit, but let me just, I'm so excited for this.
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Even more excited for this conversation than I was even starting, because this is fundamentally why I am interested in Girard.
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And why, at least the recognition theorists, Hael, Smith, Hume, as well as Girard both really speak to me, because I think they're rescuing a part of human nature that has been overlooked by modernity.
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Now to give you a little sort of history of philosophy. If you don't mind.
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Jim O'Shaughnessy: Please.
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Jonathan Bi: Let's take a platonic idea of the soul, right?
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That there is an appetitive part and the appetitive part of the soul.
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And if you don't like the word soul, you can just say part of the human nature. Jim O'Shaughnessy: Sure.
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Jonathan Bi: It goes after sex, it goes after food, animal natures.
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And then there's the rational part of the soul.
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And the rational part of the soul is not just about optimizing for sex and food, but it has its own good.
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And that is truth, reason, right?
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The joy of understanding that I think you very much can relate to.
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And there's a third part of the soul that is spirit.
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And this is what the Greeks thought were after Cleos, right? Honor, glory, right?
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This is what the Iliad and the Odyssey, or at least the Iliad is fundamentally about, whether Achilles, right?
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Remember because Achilles mom is a goddess.
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He gives him the prophecy.
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Either you stay here and you fight on the wall of the Trojans and your physical body, appetite, your animal body will perish, but your spirit, your honor, will live forever, or go back home and be a farmer and have your spirit and honor perish, but have your repetitive body live on for at least a very long time.
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And what I think, and this is exactly why I think, what I would agree with you, is that modernity has systematically removed spirit from the equation, but also overlooked the end of reason, which is truth.
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Now everyone just treats us as rational utility maximizing creatures, right?
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That is the fundamental assumption.
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And even if that's not the fundamental assumption of the most sophisticated academic positions, it certainly is the most fundamental assumption of sort of people really in the real world, right?
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Why is GDP such a one stamp, like one stop shop for how all country is doing?
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Because it's quantifying appetite, right?
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Or how many times have you heard this from some kind of Silicon valley tech bro, "Oh, we're just meat machines, squirting, happy chemicals."
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And to understand why we've overlooked spirit is a fascinating sort of topic in and of itself.
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And there, I would recommend you, my professor's work.
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I think it's called Struggle for Recognition by Axel Honneth.
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And you can see this trend already moving in Machiavelli and Haus, where we gradually lose sight of the spirited part of the soul.
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But I think, and this is why, in my manuscript, I called Girard a rescuer of spirit to put in other words that I think are quite provocative and interesting, Girard rationalizes, our irrationalities, he's able to describe the logic behind how people are illogical, right?
24:43
So another way to put this is: if you were to model man as rational utility maximizing creature, what you need to do is to overlay Girard on top of it, because he's interested in understanding all the ways that people aren't rational, utility maximizing creatures. Okay.
25:00
So that's a little prolegomena to what Girard fundamentally sees people as, but what is that logic? Right?
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That's the next question, what is that logic?
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And I'm going to give you a very, very brief over here.
25:08
And if you want to hear a more in depth, please go listen to the lectures.
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Girard thinks that we are mimetic creatures and the provocative way to say this is that what defines us from animal, is not our ability to grasp truth, right?
25:23
Animals grasp truth in ways that we don't.
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There's echolocation, there's tapping into magnetic fields, there's night vision.
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What defines us is our ability to believe in lies, insofar as other humans do as well.
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When we look around, we're the only creature who insofar as other people around us doing something.
25:45
We can pray to gods as well, right?
25:45
No animal, no dog is worshiping some dog deity that had never existed.
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And don't be offended here if you're a Christian, because you can just think back to the Egyptian gods, right?
25:54
Clearly those are just made up.
25:54
We are people who would trade pieces of paper for the fundaments of our survival, food and shelter, right? And don't get me wrong.
26:06
This ability to believe in lies, I only framed it provocatively.
26:06
It's not necessarily a bad thing.
26:10
In fact, if you read the word sapiens, there was a discussion about why homo sapien was able to win against Neanderthal and homo erectus.
26:15
And the reason is because humans can create myths, right?
26:22
The trite story probably...
26:22
The reductive story would probably go something like this.
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The Neanderthals were probably sober, truthful people.
26:30
And they were like, okay, there's no sky God.
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And I'm here fighting for my other Neanderthal friends and that's what I'm fighting for.
26:36
Whereas the humans were like, oh, this is a glorious quest because Zeus or Odin...
26:40
Obviously that's anachronistic but they've invented gods that enabled them to work on a much larger scale.
26:45
And what is, this goes back to economics now, what is a greater...
26:53
What is a better example of an invention than sort of the US dollar, right?
27:00
Especially when it goes off gold or different currencies.
27:04
Or cryptocurrencies' an even better example.
27:04
And I think that is precisely right, that even in the domain of economics, we are not rational utility maximizing creatures, but spirited creatures, right?
27:15
Concerned with, sort of like comparing with others, concerned with our own social standing, concerned with not what a car or a house can do for us, but what it says about us.
27:27
We are fundamentally spirited and social creatures.
27:30
I know I've been going on for a long time, so I want to let you respond, but let me give you a few examples here.
27:33
And let's not underestimate the importance of holding spirit as a key, if not the key lens to view humanity.
27:42
And the example I give and I think is very, it is an apocalyptic prediction that Girard gives.
27:49
Now Girard, draws apocalypticism, his predictions for apocalypse are not mine at all, right?
27:54
He doesn't say as some Marxist in the Frankfurt school do, that capitalism is going to end this day.
27:59
But he did make some quite interesting and unlikely predictions.
28:04
And one of them, which I talked about more extensively in the lecture was his predictions of the sign of American relationship deteriorating.
28:07
And he made this prediction in 2007, which of course in the nineties and the two thousands, everyone thought that economic liberalization, or most people thought would bring greater harmony.
28:24
The idea goes something like, as China entered into the world economic order, they would lift themselves up and they would also create cheaper goods.
28:29
It's that fundamental economic thought experiment about the Scots making cheese and wine and the Britains making cheese and wine and everyone trading.
28:39
And there's overall more goods for everyone.
28:39
Well, Girard's analysis is that, yes, that's going to happen, but that's going to have the opposite effect, because we are not absolute creatures concerned with just a raw amount of goods we have, but we're spirited, social creatures concerned with relativistic social standing.
28:54
So as the Chinese gain more wealth, they're not going to...
28:59
Or rather the dominant emotion, isn't gratitude.
29:04
It's envy, because envy exists more commonly amongst equals than it does among people who are very distant.
29:10
And the similar thing that's going to happen with the Americans Girard predicts, is that they're not going to be happy that they raise their absolute amount of cheap goods, but they're going to feel sort of more threatened by a closening it up of China.
29:22
And he actually predicted that there will be a great trade war between China and America.
29:29
And that would be the fundamental domain or the genesis of conflict between these nations.
29:35
And that it wasn't a clash of civilizations, but rather a competition between two types of capitalism that become much too similar. Okay.
29:45
One more example, I promise, and then I'll let you speak.
29:45
As you know, even in investing, or when you're trying to make a deal, it's not often not really the terms that matter, right? Or the price.
29:57
I have a friend, he runs a PE shop, and most of the time, and similar with my friend who does M and A consulting, it's not how much money it can give me, but it's, what does this deal say about me compared to that guy over there, or my friend who just sold this company, right?
30:14
A lot of that is that type of stuff.
30:14
And Girard actually has a very interesting sort of lens to view capitalism as well.
30:18
He says, "Don't be fooled by capitalistic actors who say that they want to save the world."
30:24
They're not even motivated by their own material greed, they're motivated by glory, right?
30:28
The money doesn't really matter to these people.
30:34
It's about what that money says about you.
30:34
And he had this very impactful line.
30:39
He says, "It's little wonder that the aristocracy in heroes of Europe, as soon as war went out of style, they went into commerce."
30:45
And in fact, if you talk to...
30:52
The question is this, who is the spiritually most similar people to the generals of Rome?
30:58
And I would wager those are the entrepreneurs of today, right?
31:02
They're motivated by the same desire for, mostly it's for glory I would say, and not for anything else or anyone else, obviously that there's exceptions.
31:08
And it's interesting because this is both a deep critique of capital, that's not fundamentally about helping others or even a rational self-sort of helping, but it's also a deep praise of capital, right?
31:23
These people that would've had to raise armies and kill each other in zero-sum wars.
31:23
We've now tricked these billionaires and entrepreneurs into making services and goods for each other, right? And so I'll pause there.
31:33
Jim O'Shaughnessy: And I love it. Jonathan Bi: And donate. And donate.
31:38
Jim O'Shaughnessy: I love your enthusiasm you've spent, it's infectious.
31:39
What I would say about the earlier part about humans being able to be myth creators, I think is absolutely dead on.
31:45
And I think that when you can create these myths and then take advantage of them, so for example, you mentioned a dog not praying to the dog God, I myself look at dogs as kind of natural Daoist sages.
32:05
They don't need to pray to anyone. Jonathan Bi: Right.
32:07
Jim O'Shaughnessy: They're just living right in the here and now, but the Persians took advantage of the Egyptians because they thought cats were deities.
32:13
And so the Persians in a battle threw cats at the Egyptians and they didn't know what they could do because they couldn't kill the cats.
32:24
Because they were their gods. I always loved that.
32:28
It was just like, oh, that was a very clever move.
32:28
As far as the furtherance of the analysis to capitalism, actually, when I got to that part of your lecture, I just was like, "bingo," because when I was doing it to try to learn more about human beings and what really drives us, you got to keep in mind that at the same time, I'm reading and re-reading Zen and the Art of Motorcycle Maintenance, where he struggles endlessly with this idea of [inaudible], excellence, right?
33:00
The idea of the spirit, Greek spirit, and with the engineering of society, right?
33:07
That we are these bags of chemicals and the tech guys just want to squirt more dopamine into us.
33:15
And one of the things that I lighted on, and another thing that I do that I always recommend is, I've kept journals handwritten journals since 1978.
33:30
And they're amazing at allowing you to go back and find out what you really thought rather than what you're recreating and overriding in your memory right now to mostly to emotional reasons, but also that idea of self, that idea that illusion of control, all of these
33:47
things that we find very, very important to markets are ultimately their source is within we humans and it can be isolated to our emotional needs that we refuse to basically admit our emotional needs, thus the papering over with rationality and whatnot. But one of my conclusions
34:03
But one of my conclusions when I was preparing for our chat today was I went back when I was originally reading Girard's Mimetic Theory.
34:16
And literally what I underwrote was, "Markets are the new battlefield."
34:24
And literally in Russia...
34:24
Jonathan Bi: That this is literally true, right?
34:28
Jim O'Shaughnessy: Right. Exactly. And so that's...
34:31
But if you look at US history, what do we always say?
34:37
Well, it's the wild, wild west there, right? And the wild, wild...
34:37
China briefly, when Deng brought capitalism in, was the wild, wild west.
34:42
And that's the beginning stages of what I call, anything goes capitalism.
34:49
And anything goes- Jonathan Bi: Crypto right now...
34:54
Jim O'Shaughnessy: Crypto right now, exactly.
34:54
Any new asset class and/or entire platform that its participants hope will revolutionize and/or augment already existing platforms is extremely inefficient.
35:08
And it's inefficient for all of those reasons.
35:16
Just to drag Claude Shannon in here, information theory basically says that information is something that's novel, right?
35:23
So he always quips that, or always quipped, that a political speech contains zero information, whereas a new poem, or a new piece of art, or new music contains huge amounts of information.
35:38
And then you marry information theory with Buckminster Fuller, the creator of the geodesic dome, his observation, and I love the way that he put this.
35:51
He's like, "I don't think it's that we're discovering or not discovering.
35:57
I think what it is, is that we humans are either tuned in or not tuned in, or tuned out."
36:03
And he uses as his example, the microscopic world, right?
36:03
Before we invented microscopes, we were tuned out because we had to be.
36:10
We didn't know it was there.
36:10
It wasn't that we were pounding the table and saying, "This is all..."
36:15
Well, a lot of people were, but when we invented that microscope, we got tuned in, right?
36:20
And in much the same way that when you see a new scientific theory, a new literary style, James Joyce comes to mind.
36:26
David Baum with the hidden variables on the science, new art, the impressionists, the existing authorities always react very badly to that.
36:42
I don't think it's just for the obvious reasons.
36:50
If we come back to Buckminster Fuller and his idea that tuned in and tuned out, one of the things that these existing authorities are offended by is they don't know how to read that James Joyce novel. It's so new to them.
37:03
They literally were trained on traditional writing, right? Or traditional art.
37:10
That's why the French academy derisively named impressionist, impressionist.
37:18
Because they said, "It's like a child with finger painting." Right?
37:18
And so yes, they were high bound and yes, progress as à la Planck, happens one funeral at a time.
37:33
But it's also for more complicated reasons, which I think come back to you and your understanding of Girard.
37:38
The other thing that those people, and we're seeing it now, by the way. Yeah.
37:45
I'm doing a series called The Great Reshuffle, about what's happening now, which we can... Jonathan Bi: In markets? Or more broadly?
37:53
Jim O'Shaughnessy: More broadly. Everywhere. Everywhere.
37:56
And, but the reason why I'm fascinated by Girard here and what I've just said about the elders hating the new theories, the new ideas, et cetera.
38:02
It's also because of the loss of perceived prestige.
38:08
It is the loss of, or being taken down several pegs.
38:08
If one understands Girard, at least the way...
38:19
I tend to be very pragmatic when I'm approaching these philosophers, I'm looking for an edge, quite frankly. Jonathan Bi: Yeah. Yeah.
38:31
Jim O'Shaughnessy: And one of the things that I found in Girard is this idea, the old joke, no man is a hero to his valet.
38:34
Well, what happens with a lot of these people, if you accept the idea that we are fundamentally emotionally based creatures, and that fear is one of the primary emotions, as is a desire to stand out and be prestigious and be admired and be all of these various things, then what kind of conclusions and what type of models that you build are going to end up being very, very different.
39:12
In my case, for example, I realized that I could not build a model that will overcome human nature.
39:17
So I thought, "Well, perhaps I can arbitrage human nature," by using a highly identified process that evolves, right?
39:24
In terms of the way we look at it.
39:24
Because I came to the conclusion, it's a bit like if you're wise in the Socratic sense of knowing how little you know.
39:36
I came to the conclusion that I'm running human operating system, I'm running human OS.
39:42
I am not immune from human OS.
39:42
I am not immune from any of these things that affect other people.
39:48
And yet that's also one of the sort of hidden traps that snares so many people, is this idea that, oh, yes, that's true for everyone else, but not for me.
40:04
If we go back to Storr again, he's got yet another, you can tell I've been reading him because I haven't been coming on as a guest, but I stumbled onto his work because we have a communal library in our family and my son had bought the scientific method of storytelling and I'm like, "Wonder what this is."
40:23
And so it essentially was the lead up to the status game and his ideas are basically that human beings are fundamentally, confabulating unreliable narrators who basically always have themselves starring as the hero in their particular story they're telling themselves.
40:43
And yet, one of the first things when I was reading that, I thought about Girard. React to that for me. What do you think?
40:49
Jonathan Bi: Yeah, I have so many reactions.
40:51
This is easily a five hour long...
40:51
Making sure we blocked out five hours, but let me start one bit of a time.
40:57
I think I'm going to proceed by affirming and elaborating a bit on what you said about Planck.
41:04
And then I'm going to clarify a bit more about, specifically what is the logic of this irrationality of man, and then have a reference to what you said about assets.
41:15
And then lastly, I'll touch upon the journal point as well and all while touching upon Girard.
41:19
So the first is the science point and the example that Girard really likes to point is, and the purpose that I'm sharing this with you and our audience is to show that even in science, even in what we think to be the most rational sort of domain possible, so much of it is social reasons that things get passed and reasons that...
41:38
And the example that he likes to give is the discovery of the first half human, half ape skull in Gibraltar.
41:45
I think this first skull was discovered 1848.
41:52
And so the origin of species came out about 12 years later.
41:52
And the skull basically just sat there and no one realized any...
42:05
No one touched it, no one thought anything, no one thought like, "Holy shit, this is a half human half ape skull." Just sat there.
42:16
And once Darwin's sort of man to ape sort of arc became narratively popular and prestigious, these skulls started popping up everywhere.
42:32
And what Girard wants this example to show is that we think that science proceeds by getting new evidence, holy shit, we have a new evidence.
42:39
We need to reexplain our theories to adapt it.
42:43
And we only accept theories that are sort of validated by evidence, but that is wrong on both fronts in this example.
42:49
First, the discovery of that skull didn't do anything. Right?
42:56
Jim O'Shaughnessy: Right.
42:57
Jonathan Bi: What did change people was a change in narrative, that Darwin had this interesting narrative that he got from the beaks of birds, but then there was also no evidence for this human evolution. Right?
43:10
There was no evidence from sort of apes evolution to man, before the theory got popular.
43:17
And once it got popular, people started seeing evidence everywhere.
43:21
So the concern is that not only does evidence and facts, not really, or not, it's too strong, but not primarily govern sort of the trajectory of signs.
43:27
But we all have blinders on based on what sort of the mimetic narratives that we have.
43:34
And the much more troubling version of this has to be the story with eugenics in the 20th century.
43:45
Right now we consider eugenics to be a pseudoscience or even worse not a science at all.
43:49
But in the early 20th century, it was one of the most prestigious sciences there was.
43:54
There was a chair of eugenics in UCL and certain normal laureates, like Herman Mueller and Theodore Roosevelt's political leaders were very supportive of eugenics.
44:07
Eugenics was at the time grounded upon the latest biology of the day, Darwin.
44:12
And it actually gave birth to modern statistics.
44:12
The correlation coefficient was created to measure demographic correlations of different human features.
44:18
And so Girard is just putting this out by saying, "Look, don't put too much faith in science.
44:25
It doesn't even have the power to stop something like eugenics."
44:31
But perhaps what is worse than the fact that science didn't do anything to stop it, was that the reason we stopped eugenics had also very little to do with science.
44:42
It was because it became associated with the Nazis.
44:42
The Nazis became this core evil, and then so everything around it became highly suspicious, right?
44:47
That's why the Italian futurists are also suspicious in contemporary society.
44:52
And so that this is all to say that even the domain of science, where we think reasons should hold the realm, that's not, at the very least, that's not the entirety of the story. Jim O'Shaughnessy: Okay.
45:10
So let me stop you because I know you want to get to the other two points. Jonathan Bi: Yeah.
45:16
Jim O'Shaughnessy: But just to reinforce what you're saying here.
45:17
Oppenheimer, who of course quoted the Gita after developing and dropping the bomb, was all too human when he tried to destroy David Baum's theory of hidden variables in quantum mechanics, and the reason he chose to try to destroy that theory had nothing to do with the theory.
45:38
It had to do with the fact that it was the era of the red scare.
45:45
And many people believed that bomb was a communist.
45:51
And so we have, there's a movie about it that's fantastic.
45:51
I wrote a short thread about it.
45:57
Basically, we have Oppenheimer two, these other giant minds of science basically saying, "Ignore bomb.
46:06
If we cannot disprove his theory, ignore it."
46:06
Don't look at it because of these completely unrelated political shenanigans, which proved to be just misleading at the best. Right?
46:21
So here we have one of the greatest minds of all time in terms of physics and all of that.
46:25
And you could summarize their behavior by watching the movie Mean Girls, right?
46:32
You can't sit with us because you are not cool.
46:38
The other thing that I love about what you said and think very, very much, I wrote a thing called The Thinker and the Prover based on Dr.
46:46
Orr, who came up with it and was popularized by Robert Anton Wilson.
46:53
Basically the idea that we can think anything we want to think.
46:57
If we want to think that the world is a fair place, our prover is going to prove that to us.
47:04
This is what I'm bringing in about the apes, half man, half ape skull, right?
47:12
It becomes, it transfers...
47:12
This gets into memes too.
47:12
So maybe we would have to book another eight hours here. Jonathan Bi: Right.
47:20
But mimetically, it became fashionable as you point out because of eugenetics.
47:26
And that's why they started finding all these things.
47:33
It applies very beautifully to the art market as well, and to financial auction markets as well.
47:40
And the last comment that I would make about eugenetics and the reason we became so hateful of it was because of its association with the Nazis.
47:46
What else were German scientists who ironically were mostly Jewish, doing research on that got ignored?
47:53
Ooh, things like sugar being dangerous, things like it's not the amount of fact that you eat, it's this X, Y, and Z.
48:10
Other things like psychedelic studies, all of them got thrown out the door because of that lunatic Hitler, and everyone just stopped being willing to ever, ever go there again.
48:22
Even today, trying to suggest to people that the swastika is an ancient symbol, right?
48:30
That had been around for centuries with very different meaning.
48:30
You put that in the, "I will not go there."
48:36
How many young Adolfs do you know? Yeah. Yeah. Jim O'Shaughnessy: None. Jonathan Bi: Exactly. That's precisely right.
48:43
And one can help but think, and this is going to help us lead to our second item I want to touch upon, about Newton, right?
48:47
And him famously losing a large degree of his money in the, I can't remember which bubble it was.
48:51
It was one of- Jim O'Shaughnessy: It was the South Sea Trading Company.
48:57
Jonathan Bi: There we go, right?
48:59
And I think he famously said, "I can predict the movement of the billiard balls and understand the natural laws given by God, but I can understand markets."
49:05
And I think this precisely is going to lead into what we want to talk about, which is how markets can't be measured like billiard balls.
49:13
Oh, but the last thing I'll say here is, two things actually.
49:21
One thing is science can also fundamentally distort what evidence we think of as legitimate.
49:29
In the same way that the Catholic church could say only these canonical books are the word of God.
49:35
And the Book of Thomas, nope, we're not doing that.
49:39
Jim O'Shaughnessy: Mary Magdalene. No, no. Jonathan Bi: Exactly.
49:41
And science I think can also have this very dictatorial stance of what it conceives as evidence.
49:44
For example, as you know- Jim O'Shaughnessy: Sorry, just to, and this is fun, I can only imagine people would be staring at us in a restaurant.
49:55
The idea behind science is also one that resonates quite deeply with me because, your idea about it being dictatorial.
50:03
I think that when the humans who have these gods that we create, yes, when we sanctify something, be it science or be it the sky God, that creates the conditions with which you let doctrine enter.
50:34
And then doctrine becomes untestable, unquestionable.
50:34
And then to go against doctrine you have to be a heretic or an apostate, for which most of human history the punishment was death.
50:48
Jonathan Bi: That's totally right.
50:50
And I think, if I may be heretical now and hopefully I won't die.
50:55
I think the way that science has exercised its influence and completely ignored a whole series of valid, I wouldn't say evidence, but valid phenomenon, put it in the most broad sense, is that it has mistaken its epistemic limitation for an ontological theory.
51:13
And what I mean by that, and I'll do a very quick overview here, you can listen to lecture six when it comes out, is that in the beginning, science was contented with investigating the material world, the natural world.
51:30
And that's what its devices and what its procedures were well suited for.
51:35
But then I think science as it became more prestigious got a bit too arrogant.
51:40
And then it started mistaking the limitations of its tools, which is useful to studying external phenomena, material phenomena, and then started saying anything that is not this is completely invalid.
51:52
And I think probably the best example here is the behavioralist in the 20th century. B. F.
51:56
Skinner, all those folks, which even in the most charitable interpretation thinks that all meaningful things about humans can be understood by external observable phenomena, as well as how they interact with the external environment.
52:18
So what is occluded there?
52:18
I think what was occluded there is introspection, right?
52:26
Introspection, meditation perhaps, and this is going to draw us even further down, but I think we're lost at this point.
52:31
One of the most convincing arguments that I've heard about Buddhism and why their cosmology may have stronger epistemic grounds than perhaps Christianity or other religions is that just like we have telescopes, they have a finally tuned to instrument to understand the human soul.
52:49
And that's through meditation.
52:49
I'm more open to the idea that if you meditate hard enough, and I'm not agreeing with this idea, but I think there's probably something to it, that you can through that introspection understand the truths that you can't otherwise.
53:04
Imagine if you said that at a scientific conference.
53:10
I meditated for 20 years and I learned that in my last life I was Caesar.
53:10
Now that does seem a bit ridiculous, but I think there's much less ridiculous things that are being overlooked.
53:19
Anyways, let me try to take us back on track.
53:23
The second thing I want to talk about is what you said about assets and what I eventually want to get to is a very nascent theory that I'm still thinking through these days about what assets are subject to this sort of medic frenzy and what aren't.
53:33
And I think I have a rough outline of this already.
53:37
So let me take a step back and give our listeners, because I know you've listened to it already, an overview of Girard psychology.
53:43
And he basically believes that there's two strands, two types of desire.
53:47
One is physical desire and one is metaphysical desire.
53:52
Physical desire aims at the utility of things.
53:56
Metaphysical desire aims at identity.
53:56
I can be after, for example, something like sex out of physical desire and that would be the pleasure or the intimacy, experiences in the moment, what the activity and the objects can offer me.
54:05
Or I can be after it because of what having sex with a specific person says about me, right?
54:09
And this a real psychology, or this is a psychology of the Don Juan or the [inaudible], right?
54:13
They feel that sort of power.
54:18
And this extends to numerous domains.
54:18
And I'll give you another one that ties in nicely with the assets.
54:22
Most of my friends who started off in investment banking now, so maybe 20 years ago, 10 years ago it was different, but who started investment banking now, they're almost solely motivated by metaphysical desire.
54:31
That is to say they're solely motivated by what the job says about them.
54:36
Whereas on the other hand, almost all of my friends in philosophy are motivated by physical desire, a sort of interest of truth.
54:41
And the reason there is because there is no metaphysical desire for philosophy.
54:46
It's such a lowly sort of activity these days, you're not going to get that much social validation.
54:51
And the opposite is true for investment banking, right?
54:55
The actual experience of being an investment banker and being an analyst, I haven't experienced it, but so I hear is not that enjoyable.
55:03
And so the idea goes something like this, these two strands of metaphysical desire, the desire for being, and this is the one that is much more influenced by the opinions of others because we want to be seen as existing in great measure in the eyes of others, you can loosely interpret it like that.
55:18
And physical desire, these are almost competing for real estate.
55:22
And so for different activities and even for the same person with the same activity but across time, one can engage with them in very different proportions, right?
55:27
I got into Girard almost exclusively metaphysical desire because I admired Peter Thiel, but I stayed with him almost out of the general interest in studying him.
55:40
And how I think this translates into assets is that the more the assets' value is predicated upon some kind of, I don't have a great word for this, but hypothetical, or to put it in very reductive, but hopefully more illumining terms, not predicated on your solid cash flow, the more the asset is subject to this form of frenzy, right?
56:01
For example, you're not going to find some kind of infrastructure company, unless there's like a huge power outage or something like that, that's just making steady cash flows be hyped up.
56:12
In the same way, crypto, which has no under underlying, if you'll excuse my language here, reality, is the most subject to this sort of activity, right?
56:30
And that's why the art market is also subject to this because there's nothing you can point to, right?
56:36
For a bond, right, at least these days, there's a clear model that you can value its current value.
56:44
But it becomes a bit more difficult when you look at some like Google that's still growing.
56:50
And even more difficult still when you look at us, like a startup company.
56:54
And then even more difficult still something like Bitcoin that does not even entertain the idea of it making underlying money, right?
57:03
And I'm going to pause, but I'll make one more point here.
57:03
Some of my friends are involved in stablecoin companies, right?
57:09
And these are basically crypto tokens that aim to hold a dollar peg.
57:12
And what I noticed is that the ones who claim that they're going to maintain at $1, those are ones easily go bust than the ones who say, we're going to balance around 0. 95.
57:25
Because insofar as the value of an asset is unfalsifiable, that gives room for hope, and that is where mimesis comes in.
57:33
So I think we can draw a very binary and reductive and first order divide between where an assets' value comes from and draw a distinction there.
57:46
Jim O'Shaughnessy: I think that's wonderful.
57:46
And it's actually something that one of our [inaudible] research partners who operates under a pseudonym, Jesse Livermore, we did a whole podcast on it.
57:56
That was essentially the underlying theory of his argument.
58:04
The underlying theory of his argument was ultimately an asset that has a series of cash flows attached to it is a very different beast than one that is relying on the, as another friend of mine calls it, the price to magic ratio.
58:25
Jonathan Bi: Can you elaborate that a bit?
58:25
Can you elaborate that a bit, price to magic?
58:28
Jim O'Shaughnessy: Yeah, price to magic is essentially where everyone ascribes value to the asset, if and only if magical things actually occur and magical thinking actually works.
58:41
Newton, your example of his was great because it really underlined the emotional nature of markets.
58:59
What Newton said was, "I can measure the motion of heavenly bodies, but not the madness of men." Jonathan Bi: Right.
59:04
Jim O'Shaughnessy: And the other thing that is really interesting that illustrates this idea about what actually drives prices for good or for bad was that at the time of the South Sea Trading bubble people actually wrote poems about the stock.
59:22
One of them went, "Fill the South Sea goblet bowl; the gods shall of our stock take care; Europa pleased accepts the Bull, and Jove with joy puts off the Bear."
59:35
Jonathan Bi: Oh my goodness.
59:38
Jim O'Shaughnessy: I have come across very few absolute sell signals, but if somebody writes a poem about your fucking company, get out. Get out next.
59:46
Jonathan Bi: Can you send me that quote, can you send me that quote?
59:49
I must learn to recite it.
59:49
Yeah, I must learn to recite.
59:53
Jim O'Shaughnessy: Of course, of course.
59:54
The reason that particular bubble is used so extensively by people who look at markets the way I do is because it really encapsulates both a new market, right, because back then it wasn't just the South Sea.
1:00:12
It was like the inventions, if you look at some of these- Jonathan Bi: Limited Liability Corporation, that was a new thing, yeah.
1:00:21
Jim O'Shaughnessy: Brand new, brand new.
1:00:21
And so what happens, we get back to the price to magic ratio.
1:00:24
I joke about that, but some things actually do come true, right?
1:00:31
Jonathan Bi: Of course, of course.
1:00:32
Otherwise it wouldn't be sustainable, right?
1:00:32
Like if crypto does this for four more cycles and nothing comes out of it, I told my friends, Ethereum is not going to be sustainable because, not to interrupt you, but Bitcoin is not saying that it's going to do anything.
1:00:46
So if it doesn't do anything, it's fine.
1:00:46
But Ethereum, it's legitimacy.
1:00:49
Jim O'Shaughnessy: It's making a claim, yeah.
1:00:50
Jonathan Bi: Exactly, it's making a claim that there will be apps built upon it.
1:00:51
So there can't be former ...
1:00:56
the reason that these magic works is because once in a while there will be magic truly, right? Jim O'Shaughnessy: Yeah.
1:01:03
But the other point of course, is that, and the reason South Sea is so great, is because it brings in one particular story.
1:01:09
All of the things that we are actually talking about that Girard was talking about.
1:01:17
It brings into this idea that human beings are, in my view, wonderful creatures because of their ability to create these myths and legends.
1:01:28
Here's an example, 1962, President John F.
1:01:34
Kennedy said, "By the end of this decade, America will land a man on the moon." Okay.
1:01:41
Did he base that on any evidence other than the Russians had launched Sputnik? Not really.
1:01:46
When asked later, his scientific advisor said, "Yeah, that's probably absolutely impossible.
1:01:54
There's no way that we could in such a short period of time come," but what did Kennedy do?
1:02:00
He created an aspirational goal, right?
1:02:00
Which is as old as homo sapien sapiens, right?
1:02:07
And why you mentioned earlier why the Neanderthals were like, ah, there's no fucking sky God.
1:02:14
I'm just here fighting for my brothers, right?
1:02:20
Homo sapiens, that's us right, we are able to create these incredible cathedrals in the sky, right? Jonathan Bi: Yeah.
1:02:29
Jim O'Shaughnessy: And so when we're creating that cathedral in the sky, guess what, all of our minds start going, I wonder if we could actually do that. Jonathan Bi: Yeah.
1:02:39
Jim O'Shaughnessy: And the answer is not always yes, of course not.
1:02:40
But sometimes- Jonathan Bi: But the important thing is it's not always no either, right?
1:02:45
Jim O'Shaughnessy: Exactly. Exactly.
1:02:48
And that is how the United States landed on the moon. Jonathan Bi: Yeah.
1:02:53
Jim O'Shaughnessy: Because a very charismatic president said we would.
1:02:56
And all of these people who were thinking about other things and were gifted in mechanics, in electrical engineering, in rocketry, in all of these things, turned their focus to, okay, we got to solve this problem. Jonathan Bi: Yeah.
1:03:15
The reason again, sorry, if I look distracted, I was trying to pull up one of my favorite lines in Dante.
1:03:19
We opened up with Dante so I think it's fitting because you mentioned Europa, and it's very similar.
1:03:24
He's I think going into the metaphysical realm.
1:03:24
I think it's the end of the paradise.
1:03:33
The third of the comedia.
1:03:33
And he's looking back and he's seeing Odysseus' journeying.
1:03:38
And of course in his telling, Odysseus leaves home after he goes back to Penelope and he dies, right, his form of transgression, and it's beautiful lines of poetry.
1:03:49
And it goes, " So that, beyond Cadiz, I saw Ulysses' mad course and, to the east, could almost see that shoreline where Europa was sweet burden."
1:04:00
And what this is supposed to represent is Dante, or one reading of this rather, won't be too arrogant here.
1:04:08
One reading of this is to see Dante as thinking, using Odysseus as a model because the sin of the Odysseys is transgression, right?
1:04:16
He should have left Circe, but he shouldn't have left Penelope.
1:04:20
He should have stayed there.
1:04:20
His problem is transgression, wanting to go too far.
1:04:25
But of course, that's exactly where Dante is and that's where exactly where he's been for the entire comedia.
1:04:30
That he as a living person has gone through hell and purgatory, and now he's venturing into heaven.
1:04:34
And the reason I brought that up, not only because it connects through Europa of your poem, but I think it is the fundamental question that we're trying to ask now which is, is this mimetic yearning, is that transgression illegitimate, or is that a legitimate striving?
1:04:53
And this I think is the fundamental part where I probably disagree with Girard or at least am not, I think, old enough and don't have enough lived experiences to really go one way or the next.
1:05:04
Ask me again in 20 years.
1:05:04
So this is my problem or concern with Girard.
1:05:11
Girard thinks that metaphysical desire, which elaborate a bit more, is a desire for greatness, to exist in great measure.
1:05:17
We want to be eternal, right?
1:05:17
[inaudible] denial of death.
1:05:17
We want to be recognized. We want to have glory.
1:05:23
We want to be real, a social reality, right?
1:05:28
If it doesn't happen on Instagram is it really real?
1:05:28
That's the type of reality that we want, a social reality.
1:05:32
And we want to be powerful in our relationships.
1:05:32
And so it's no surprise that when Girard uses as patients, if you will, for his psycho analysis, he chooses the Clausewitz, the Napoleons, the [inaudible] of the world, right, people who want to conquer the world through word or through sword.
1:05:50
One objection here, which is like, is that really the psychology of everyone?
1:05:59
But the real objection I have or question I have is this drive really bad, right?
1:06:05
Because what else does this drive sound like?
1:06:05
It sounds like Nietzsche's will to power, right?
1:06:11
In fact, an argument one in one of my manuscripts, that it's very, very close to Nietzsche's will of power.
1:06:16
And this is where Girard and the Buddhists agree, right, this fundamental ontological yearning. That's a bad thing.
1:06:25
We need to renounce that.
1:06:25
But to the best of my knowledge, Nietzsche is the only other person who has caught onto this, but has disagreed with that.
1:06:29
That this will to power, this endless unsatisfiable, unsatiable drive should be affirmed and should be embodied. Jim O'Shaughnessy: Yes.
1:06:42
Jonathan Bi: That is the final question that I'm struggling with because we're also going to tie him back into my story.
1:06:45
The reason I got into Columbia was because I was so concerned with vanity.
1:06:49
I don't think I would've been able to get there if I was only rationally concerned with my own wellbeing and making a good job. It was glory, right?
1:06:58
Ex post, that strategy worked.
1:06:58
Ex ante, is that going to work?
1:06:58
And I'm kind of two minds here.
1:07:07
One is to say, yes, all the great world historical activity in the world needs to be motivated from a place of untruth, of delusion.
1:07:14
And this is why one of my favorite essays is Nietzsche's, he wrote a series of essays called The Untimely Meditations.
1:07:26
And one of them was called The Uses and Abuses of History For Life.
1:07:26
Where he said, "If you're a great man, then only think of history as a series of progeny," almost, "by great men.
1:07:38
If you want to be a critical person," or a progressive in these days, "then think of history as a series of injustices.
1:07:41
And if you want to be an antiquarian," someone who protects history, then emphasize that dimension of the greatness of history.
1:07:50
And the idea here is one that concerns with historiography, that history should not be done objectively, but we should distort truth for our own ends and action.
1:07:55
But I think there's an easy equivalent to the sphere of action, right?
1:08:01
Almost all the really successful entrepreneurs, almost, that I know are diluted, is too strong and negative a word but I'll use it for theater if not anything else, that they believe that achieving it will grant them more happiness than it actually would. It's a false promise.
1:08:18
And they also think the thing they're building is more important than it probably is.
1:08:21
That's one line of thinking is that only by motivated by this type of delusional self-aggrandizing prideful desire can you really do not good things, not great things, but world historical activity.
1:08:39
The other line of thinking goes something like, if you pursue this you are going to be caught too up in the trends of the day.
1:08:44
And what you really need is to be able to not be too mimetic or at least design environments that are not too mimetic, and that's where you get your alpha, so to speak.
1:08:53
Because all the prestigious avenues have way too many people.
1:08:57
And the only reason that you cannot go into a prestigious avenue is if you, through different methods, not care too much about it, and then pursue an avenue that's seemingly unfruitful in the beginning, but then yields greater yields.
1:09:08
This is also my biggest life question now, and one of the philosophical questions that I'm most interested in.
1:09:15
But to your point, that's precisely it.
1:09:20
It's not necessarily a bad thing. Jim O'Shaughnessy: Yeah.
1:09:24
And the idea of delusional could also be easily transferred to the people of literally any vision that contrasts with and is at odds with the collective beliefs of humans in ground state reality as we exist today.
1:09:40
For example, I read, spiritual's a bad word for him, but an enlightenment seeker who himself is a fictional character called Jed McKenna.
1:09:55
And he's got a great quote which is, "Crazy as a numbers game".
1:10:01
And then his conversant said, "You mean," and he goes, "Yeah, the more people who believe in, it's not crazy anymore."
1:10:06
Jonathan Bi: Precisely, precisely.
1:10:09
That's what happens with religions, right?
1:10:09
Once it gets a certain amount of followers, it becomes legitimate.
1:10:14
It becomes- Jim O'Shaughnessy: Yes, exactly.
1:10:17
And the idea though also strikes me as, like you're mentioning Nietzsche, I think his idea of amor fati, love your fate, is actually quite actionable and quite a good way to look at life.
1:10:34
Because he's not saying love your fate, only if it's good, right, he's saying, love your fate, amor fati, which it brings you back to the Greek spirit and all of that.
1:10:47
And that was all part of his big Ubermensch thing, right, that kind of striving, right, he viewed as a very, very good thing.
1:11:00
But then I would add in most of what we humans enjoy today came out of our minds, right?
1:11:09
Money is an abstract thing.
1:11:09
It only works because all of us believe that it has value. And human rights.
1:11:16
Human rights, are you kidding me?
1:11:24
In the world of yester year, while the beasts were still kicking our ass, there was no such thing as human rights.
1:11:30
Those were coming out of collective human minds. Jonathan Bi: Yeah.
1:11:37
Jim O'Shaughnessy: And I see that as building on itself, does it always go upward? No. It doesn't.
1:11:40
We talked about Hitler earlier.
1:11:40
But the fact is I believe in the Deutschean sense of being a pragmatic optimist that the directional arrow of progress is up.
1:11:55
It doesn't mean it's always up.
1:11:55
Sometimes it can take a very bad crash.
1:11:55
Part of your first lecture got into the darker aspects of his theory and talking about now we have the ability to when we strike a match we can burn the entire world, right? Jonathan Bi: Yeah.
1:12:16
Jim O'Shaughnessy: Whereas before Cicero could say, "Nevertheless, Carthage must be destroyed," at the end of every speech, and the Romans did it.
1:12:20
The Romans were the original gangsters.
1:12:25
They went to Carthage, burned it to the ground, sold all of the women and children into slavery, killed all the men, and salted the earth so that nothing would ever grow there again.
1:12:34
Imagine these people with nuclear weapons. Jonathan Bi: Yeah.
1:12:40
Jim O'Shaughnessy: And so that's an interesting point that you bring up.
1:12:44
I tend to take a different view of that.
1:12:44
But I like this idea of just understanding that in many instances, the idea of introspection, I think very deeply about the importance of that.
1:13:03
And it seems to be such a moving target for we humans, because if we're just looking at empirical results, we tend to be pretty good at judging the deficiencies or assets of other people.
1:13:20
And we tend to really suck at judging our own abilities or assets and deficiencies, so much so that Tony de Mello, the priest who became enlightened and was tossed out of the Catholic church, they took him back later.
1:13:35
But so much so that he goes, "If you want to know your own deficiencies, just look at what bothers you in other people."
1:13:49
Because what you're going to do is be very good at that, which led to a theory of trying to be able to stand outside of yourself as applied to economic theory and art.
1:14:00
Art, again, in my opinion is one of the purest good examples of memetic theory in action, because as you note, most art has no practical value, i. e.
1:14:09
we can't eat it, we can't...
1:14:09
It's a very small fire indeed of the Mona Lisa, and yet it's worth hundreds of millions of dollars or euros.
1:14:25
And that is because of the collective judgment of human desire and what it judges to find value in.
1:14:34
That's what I find fascinating, because you can create a fortune out of your mind.
1:14:41
People can do it in tech companies, they can do it in finance companies, they can do it in art.
1:14:47
So, one of the things that I see as very much a good thing to be looking at, is we now have in the internet, a term that I steal from Matt Clifford, who's been on my show and I'm an investor in his company, the greatest variance amplifier in human history. And so I think that... Jonathan Bi: Computers. Computers?
1:15:15
Jim O'Shaughnessy: No, the internet.
1:15:16
Jonathan Bi: The internet. The internet, right.
1:15:18
Jim O'Shaughnessy: The internet, because the internet connects us all.
1:15:20
And essentially this too, and I'm leading to a question here, gang, so bear with me.
1:15:28
Because the question that I was going to have for you is one of the first things that I thought about when talking with Matt and the internet and the power of variance amplification, was this idea of a very Girardian idea of all of a sudden, we're going to have humans from all around the world, whereas before it used to be very geographically based.
1:15:55
If you were ambitious, you went to Silicon Valley or New York City.
1:15:59
You mentioned investment bankers.
1:15:59
And they had to come to New York for the most part.
1:16:05
Yes, they could do it in San Francisco. Yes, maybe Chicago.
1:16:05
But if you wanted to really be one of the big swinging dick masters of the universe, you came to New York.
1:16:10
Likewise, if you wanted to be a tech god, you went to Silicon Valley. That isn't true anymore.
1:16:15
And I'm wondering, what's your opinion about that diffusion, the ending of geography as a limitation?
1:16:29
Time, space, all of that is collapsing in this new world.
1:16:29
Are there going to be new Girardian things to look for, or do you think it's going to still be the traditional take on his work?
1:16:40
Jonathan Bi: You know, this is perfect.
1:16:41
People are going to think that we pre-planned this, because this is a perfect setup.
1:16:48
Because this is precisely why Girard thinks the world is going to go to hell.
1:16:54
Jim O'Shaughnessy: I know, I know.
1:16:55
Jonathan Bi: I'll paint a picture first.
1:16:57
I think it was in the '90s when the PalmPilot became popular, or maybe in the early 2000s.
1:17:03
And you just noticed the volatility of the stock market increasing, almost one to one.
1:17:11
Not one to one, but you get my understanding.
1:17:11
And it's this idea that we've entered into a phase of sort of memetic frenzy.
1:17:19
Again, another good example here is contrast crypto startups with a regular, good old what we're doing, venture-backed startups.
1:17:32
Illiquidity is a feature, not a bug.
1:17:32
The people in crypto, they have to manage their own token price.
1:17:37
People get way too excited, they care about the tokens more than they care about the actual company.
1:17:46
The tokens could [inaudible], the company could be shitty or vice versa.
1:17:46
Whereas in private space, that illiquidity, that we're going to mark you in the market every time you raise, every three years, is actually a nice seclusion from there.
1:17:55
And I think with all this championing of access, we think access is a fantastic thing these days, and in many ways it certainly is, we've overlooked how it could be very disastrous and detrimental.
1:18:14
And I think what's really interesting about Girard's philosophy of history, especially coming from a German background, vis a vis Kant and Hegel, is that Girard largely agrees descriptively with how history has changed, but his normative conclusions of that have completely flipped.
1:18:31
So Gellien would say something like truth, reason, equality, have expanded to a time where we're now approaching, or already at, at his time already, the end of history.
1:18:44
Where institutions can still be approved, but the fundamental logic of those institutions were set there.
1:18:47
There's no more normative revolutions there.
1:18:50
So it's a very peaceful thing.
1:18:50
Drug would say, yes, truth, reason, equality have all progressed.
1:18:57
But as a result, our world is both the best for the very similar reasons that Hegel thinks it is.
1:19:03
But also the worst that it's ever been.
1:19:03
Maybe not the worst is the wrong phrase.
1:19:10
It's the potential for violence has never been greater.
1:19:10
And this ties back into Girard's psychology, which again is going to be very alien to people in modernity.
1:19:23
But I think one that you'll appreciate where for him, metaphysical desire, this more memetic component of desire is much more easily trafficked between people who think of themselves as equals.
1:19:34
Let me give you an example.
1:19:34
As a sophomore, if a junior gets a prestigious internship, I reason to myself, this guy's got a year ahead of me.
1:19:45
And you see this in entrepreneurs as well.
1:19:45
A 22 year old with a 10 million dollar company, and a 24 year old with a 200 million dollar company.
1:19:51
The 22 year old thinks, give me some time.
1:19:56
The difference acts as a protective barrier to the identity.
1:19:56
Whereas if you have a sophomore and you see this other sophomore get this prestigious internship, there's other things you can think, and this is the psychology of coping.
1:20:07
You can think, well, he came from a richer family or this or that, or this or that, but desire is much more easily trafficked amongst equals.
1:20:19
And that's why Girard thinks all forms of separation, which are ultimately evil, based on ultimate lies, are in the worldly sense, practically, if not good, then helpful.
1:20:32
Caste systems, gender roles, professions and guild lineages, because these prevent people from competing with each other.
1:20:40
The problem with what you described about the internet giving access to all, Girard would say, is that now we're inviting everyone to compete with everyone else.
1:20:49
And my dad actually gave a really interesting observation.
1:20:54
He's like, what could the Chinese farmer compare himself to in the forties?
1:20:54
Or maybe not the forties, there was civil war going on, in the fifties, or especially in the Xing Dynasty. Not that much, right?
1:21:05
He can't really see almost anyone else.
1:21:09
But now, what is it, half of people have smartphones and a quarter of us have internet.
1:21:09
Everyone is comparing themselves to the most outrageous forms of display of luxury and wealth.
1:21:15
And so Girard thinks that fundamentally this equality has the potential for radical love because now we're fundamentally equals.
1:21:34
And now we can truly affirm and love each other and renounce violence.
1:21:38
But it's also a place with a radical potential of violence, because we now so more readily enter into competition with others.
1:21:44
Before, half of us were sophomores, half were freshmen.
1:21:50
Now everyone's a sophomore.
1:21:50
And we all think that we're equally deserving of these things.
1:21:53
Access for all is the phrase that we all want to say.
1:21:53
And this is why he's an apocalyptic thinker.
1:21:59
History can go one of two ways.
1:21:59
And in the end he eventually thinks it's going to go the negative way.
1:22:04
Jim O'Shaughnessy: Yeah, that's interesting.
1:22:07
What's been so fun about this.
1:22:07
This is, gang, like Jonathan said, if you thought we practiced this, we did not.
1:22:18
And this is why I love having these types of conversations because the really interesting stuff comes out in exchanging ideas with one another.
1:22:34
But I do want to get to, because we're running against our time model here, I want to get to your idea.
1:22:40
Again, I don't agree, and I'm not going to get into all of the reasons because that would tack on a half an hour, with Girard's apocalyptic scenario.
1:22:54
But you have a different scenario that I think is very interesting and that our listeners and viewers would be very interested in.
1:23:00
And that is what I don't think you call it, but I called it in my notes, the Buddhist solution where one recognizes that one's self is impermanent and transitory, but interdependent.
1:23:17
Now I'm sure that I'm butchering this.
1:23:17
I'd like to hear the fuller voice of this from you. Jonathan Bi: Yeah. Okay.
1:23:30
I'll try to give this the speed run here if that's even possible.
1:23:30
For Girard, the core psychological motor of humanity is metaphysical desire.
1:23:41
And as we discussed already, metaphysical desire, what it really wants, is for the self to be a certain type of self.
1:23:55
A self that's all-lasting, all-powerful, and the most real for social reality.
1:23:55
And this is precisely the type of self that the Buddhist conception of emptiness is supposed to alleviate us from.
1:24:10
The Buddhist, at least according to certain schools of thought, think that we mistakenly think a great deal of phenomenon are not impermanent, they're not constructed, and they're not dependent on certain causes to exist and go out of existence.
1:24:28
For example, this earplug.
1:24:28
I know that there are atoms flying in and out of it.
1:24:28
But the human conceptual model treats this as one lasting entity, the earplug that moves through space and time.
1:24:40
But the labeling of these series of atoms as the earplug is due to me and not due to some sort of objective arrangement in the world.
1:24:50
Why choose these set of atoms and not the earplug and the wallet as a joint group.
1:24:55
And the problem is when we apply that type of thinking to the self, the Buddhists think that we do exactly what Girard thinks we do.
1:25:10
We end up chasing models who appear to have a great deal of reality, trying to be impermanent, trying to be the most real and trying to be all powerful.
1:25:23
So it's the metaphysical, ontological confusion about phenomenon projected on the self that is the root of our problems.
1:25:29
And so the idea goes something like, there is actually a way that individuals can alleviate themselves from this memetic frenzy and contagion.
1:25:34
And that's through the practices that make emptiness second nature to you.
1:25:43
So mostly thinking intellectual study and then meditation, specifically the vipassanā.
1:25:50
That's supposed to hammer, if you will, emptiness into you.
1:25:57
I'm not very convinced by this argument.
1:25:57
If I may, I wrote this manuscript when I was 20.
1:26:05
So I think they're no more than the musings of a child, but the fundamental problem that I run into, even if everyone could practice this, is that I think so much of the good parts of human civilization is predicated on this sort of metaphysical delusion, if in fact it is a delusion.
1:26:28
And this goes back to everything that we talked about today, that the unrealistic and delusional yearning of going to the moon.
1:26:35
And so I just think that once we get out of this, we're not going to be vegetables per se.
1:26:40
There's other motivating forces like compassion, but I think human civilization, will at the very least be unrecognizable or very hard to recognize.
1:26:54
So long story short, I think even if an individual can fully liberate themselves from this faculty, I don't think a whole civilization, and certainly not the entire world can engage in this sort of practice. Jim O'Shaughnessy: Yeah. That's very interesting.
1:27:04
Obviously we could do our own conversation series, because we didn't even touch on half the stuff that I wanted to get to, like the absolutely brilliant idea of scapegoating and why that seems to be a feature, not a bug of humanity, and the idea that I'd like to explore more.
1:27:32
So you'll have to have come back on and maybe we'll even...
1:27:36
Jonathan Bi: I'd love to, I mean, there's six more lectures.
1:27:37
There's six more lectures.
1:27:40
Jim O'Shaughnessy: Yeah, so maybe we'll focus on each one as it comes, because the other thing that I find really interesting is this idea that at least in my philosophy, if you will, I see two of the things that humans strive for the most, happiness and wealth for example, are both byproducts.
1:28:02
They are not things that you can go at directly. Jonathan Bi: Yes.
1:28:11
Jim O'Shaughnessy: You can't say my objective is happiness.
1:28:12
I am going to seek happiness.
1:28:16
Jonathan Bi: Sorry to interrupt, the example I gave here is an orgasm.
1:28:19
That's a prerogative, example I give.
1:28:19
You can't go after it directly. It has to...
1:28:23
Jim O'Shaughnessy: Right.
1:28:24
Jonathan Bi: It has to ensue, not be pursued.
1:28:25
Jim O'Shaughnessy: Precisely.
1:28:29
And I think that right now, I'm very willing to liberally mix and match with various thinkers, simply because I always do kind of hear Wittgenstein in my ear.
1:28:37
Look for use, not for meaning so much.
1:28:45
And sometimes I worry about, and this is motivated reasoning on my part, so this is probably part of my problem.
1:28:53
But Jonathan Haidt had a great thing that he wrote, which was people who devote their lives to studying something often come to believe that the object of their fascination is the key to understanding everything. And it's not.
1:29:14
And I think I was guilty of that when I was younger.
1:29:14
It's so interesting as you see people grow, your comment about, I wrote that when I was 20, it made me think of a Bob Dylan quote, which was, "oh, oh, that was long ago. I'm much younger now."
1:29:40
So kind of the other way around. Jonathan Bi: Yeah.
1:29:43
And if I may introduce this, in my interpretation of Gerard, both in the manuscripts, as well as what I presented in the lecture series, hopefully I have carried a recognition of that, but I think...
1:29:54
Jim O'Shaughnessy: Oh, you definitely have.
1:29:55
Jonathan Bi: Gerard himself has exaggerated the importance of these mechanisms, even though they are incredibly important.
1:30:01
That's why I described him as a rescuer of spirit, early on in our conversation.
1:30:07
That he rescues a crucial and important part of the human psyche, but it is by no means the extent of it.
1:30:12
Clearly reason operates in some fashion, clearly appetite works in some way, and clearly these three interact in some fashion.
1:30:17
But he is interested in describing this one part of human psyche that is quite explanatory, it turns out, in many domains.
1:30:26
Jim O'Shaughnessy: You and I are entirely in agreement on that viewpoint and take.
1:30:27
Listen, one of the things that you will only have to do this time, you won't have to do when you come on again, because you'll know about the question, but at the end of each of these podcasts, I ask my guests the following: we are going to wave a wand, magic, and we are going to make you the emperor of the world for one day. Okay.
1:30:50
But two restrictions, you cannot kill anyone and you cannot send anyone to a reeducation camp.
1:30:58
What you can do is you can have the ear worm to end all ear worms, and you can speak into the magic microphone two ideas or action items or whatever you want to give me that everyone in the world is going to wake up the following morning, whenever morning happens to be for them.
1:31:19
And they're going to think that they thought of this and that it's the best idea they ever had.
1:31:25
And they're going to start doing that right today.
1:31:30
What two things are you going to incept in them?
1:31:33
Jonathan Bi: I'd probably buy some alt coin and then pump it with this mechanism, but...
1:31:35
Jim O'Shaughnessy: Practical. Jonathan Bi: Exactly.
1:31:41
Partially because I'm a very confused person.
1:31:41
Socrates advises the young before they're 30 to not study philosophy.
1:31:50
And unfortunately, I learned that a few years into my philosophy degree.
1:31:55
Jim O'Shaughnessy: You done fucked up. You done fucked up.
1:31:56
Jonathan Bi: I messed up. So I'm quite confused.
1:31:58
As you can tell, it's hopefully a sort of sophisticated confusion.
1:32:04
Is Nietzsche right, is Girard right are the Buddhists right?
1:32:04
So I really don't know what to tell people.
1:32:10
If I tell them to be more prideful, maybe we go to apocalypse, maybe we create 20 more Elons.
1:32:16
If I tell them to be less, maybe we all starve to death cause no one's working. So I don't know.
1:32:21
I'll play Let it Be by the Beatles or something.
1:32:21
Something nice and innocuous, or something. I got nothing for you.
1:32:32
Jim O'Shaughnessy: Well, that reminds me about your confusion of later in life Oppenheimer, who said along the lines of the following, of course the world is going to absolute hell, and the only possible chance that we can prevent it is that we do nothing to prevent it. Jonathan Bi: Yeah. Perhaps, yeah.
1:32:56
No, I think that's a fair thing to conclude.
1:32:56
Just radio silence from the emperor, yean.
1:33:03
Jim O'Shaughnessy: Exactly.
1:33:06
This has been a blast, Jonathan.
1:33:06
Tell us where people can find you.
1:33:09
Jonathan Bi: Oh, so a YouTube channel, Johnathan at Limbo, there's also a website called Johnathanbi. com.
1:33:14
I think Jim is going to link both of them in the show notes.
1:33:18
And by the time this goes live, we'll probably have two, if not three episodes live.
1:33:22
So I recommend people watch the first one.
1:33:22
That covers the entire lecture series.
1:33:27
Jim O'Shaughnessy: Perfect. Thank you.