Capitalism In Our Attention Economy With Albert Wenger

Episode Summary

Albert Wenger is Managing Partner at Union Square Ventures, which has invested in some of today's most exciting technology companies. In his new book, “The World After Capital", he argues that capitalism cannot allocate all resources efficiently in the digital age – where the new shortage isn't capital, but rather, human attention. While economically incentivized activities will not go away, he says, we must make room for the things we cannot put a price on. He proposes increasing three freedoms: economic, informational, and psychological, to ensure the continuation of human knowledge production. His book is available free of charge at

Episode Transcription

Albert Wenger: Too much of economics, I think, suffers from the fact that it looks at a relatively short period of human history and makes large inferences from it about human nature, and about how things ought to be and should exist.

Bethany: I’m Bethany McLean.

Phil Donahue: Did you ever have a moment of doubt about capitalism and whether greed’s a good idea?

Luigi: And I’m Luigi Zingales.

Bernie Sanders: We have socialism for the very rich, rugged individualism for the poor.

Bethany: And this is Capitalisn’t, a podcast about what is working in capitalism.

Milton Friedman: First of all, tell me, is there some society you know that doesn’t run on greed?

Luigi: And, most importantly, what isn’t.

Warren Buffett: We ought to do better by the people that get left behind. I don’t think we should kill the capitalist system in the process.

Bethany: As regular listeners of Capitalisn’t know, Luigi and I are always asking, “What’s working and what isn’t working with capitalism?”

In this increasingly technology-dominated world, does capitalism need to be revamped, or is there something better out there?

Our guest for this episode is Albert Wenger. He’s a venture capitalist at New York’s Union Square Ventures, which has invested in companies like Etsy and Twilio. His book, the provocatively titled The World After Capital, argues that humanity has gone through a number of transitions, from the forager age to the agrarian age to the industrial age. We’re in the painful throes of the transition to the next age, the digital age.

Wenger’s key argument is that each age has been marked by the scarcity of a key resource, from land in the agrarian age to capital in the industrial age. “Now,” he says, “there’s no shortage of capital. The new shortage: our attention.” He also argues that the market fails as an efficient allocator of attention, or, as he writes, “The new scarcity then is attention, which capitalism cannot and will not address, without dramatic changes in how we regulate society and ourselves.”

He also writes this: “Increasingly, the things that cannot be priced are becoming more important than those that can.” For example, the benefits of space exploration, the cost of the climate crisis, or an individual sense of purpose.

You make the point that markets are not an effective means for allocating attention. I think Luigi and I both want to come back and push on that a little bit more. But it seems to me that you’re also making a much broader argument, that from the dispersion of knowledge to income to the banking system to the very measure of GDP, that capitalism itself no longer works, is the main economic allocation system of the digital age. Is that too broad a reading of your book, or would you agree with that?

Albert Wenger: Well, I think capitalism works for the things that it is good at. So, this isn’t a, “Oh, capitalism is a terrible system.” It’s a system that’s good at certain things. In fact, it’s been ridiculously good at those things, which is why we can hold supercomputers in our hands.

This isn’t a book to say capitalism is a bad system per se. It’s just to say once you run a system for a certain length of time, its negatives will start to loom large. And I think we have entered this period where we have mistakenly concluded because it is so good at certain things, that it should be really good at all things. And because we’ve concluded that we’re throwing it at many things that it’s not good at, and we are left with these problems, that we’re like, “Why can’t we solve this problem?” Because we are using the wrong tool.

And the key point I’m making is, there is a ton of physical capital out there. When we point our attention to something, when we’re like, “Oh, we should deploy physical capital against X,” we can do amazing things. It’s just that what the X should be is where we go awry. The X should be very important things like the climate crisis and infectious disease.

We could do amazing things with the capital base that we have, but we’re also counting on the markets to tell us what we really should be pointing that capital base at. And I think that’s the fundamental mistake that we need to get away from.

Bethany: So, I hear your answer to my question that you’re not arguing against capitalism. You’re arguing it’s been extraordinarily successful in some ways. But given how much is breaking, what do we need it for going forward? Has it built the things that we needed it to build, and is there now an entirely new system that should be used going forward? Or, if you could rule the world, are there places in which you would still let the capitalist model rule, and other places where you would not?

Albert Wenger: Absolutely. So, the way I look at this is, do we still have agriculture? Well, absolutely. It’s just that agriculture isn’t occupying 80 percent of our attention in developed economies. It’s sub-10 percent.

If we do this right, will the realm of the markets go away? Will economically incentivized activity go away? Well, absolutely not. But can we shrink it from taking up 80, 90, 100 percent of our attention to maybe 20 or 30 percent? Yes. And that ought to be our goal.

So, it’s not going away. I’m just trying to compress it, and I’m trying to create room for things that are noneconomic and have to be noneconomic by their nature, because there cannot be prices for them. There’s never going to be a price for how much time we spend on the foundations of science. No price mechanism will ever incentivize that.

Susan Danziger, my wife, and I, are funding some research at Oxford on something called constructive theory. It’s an amazing program. No price will allocate money to this work. There’s no idea whether this work will ever produce anything that will move society forward. And yet, at the same time, it’s true that we’ve not had a fundamental breakthrough in physics in a hundred years. Quantum theory is a hundred years old.

Bethany: That’s a staggering observation.

Luigi: I’m sympathetic to your view that the market is not good at allocating attention. But it seems to me, at least from an economist point of view, that you are mixing three things. Each one of them might be right, but I see them, at least economically, very differently.

So, one is that knowledge is, in some nature, a public good, so there is underproduction of knowledge. The second point, which is often not mentioned but is important, is that the forecast error is so big that you can’t really use market price to infer that.

And, actually, I had a student last year who did a fascinating dissertation on the risk of nuclear war during the Cold War and whether this was priced by the equity market. The bottom line of this dissertation is that there was a little bit of pricing, cross-sectionally. During the Cuban missile crisis, for example, you saw that the towns that were the most likely targets of the Soviet attack, the companies with the headquarters there went down more in prices than the others.

So, in the cross-section, there was a little bit of that. But if you try to explain the effect, the magnitude was completely off. We came damn close to a nuclear war. And the stock price dropped by, what, 2 percent, 3 percent? So, that’s a second problem.

And then there is a third problem, that there are no prices for personal things like how valuable it is to take care of your children, for example, or the value of having friendship. And then you are saying the market fails. But, honestly, that I don’t see as a market failure. I see it as an individual failure, because you have your information, you are the master of your own time. You should know how valuable your time is. And if you get that equation wrong, it’s not the market’s responsibility, it’s yours.

Albert Wenger: No, I think the way we have actually priced attention is through advertising. So, the model of advertising is the resale of attention. I figure out how to gather some human attention, I resell it. And because that’s an integral part of the model, we actually have all these systems that are designed to maximally hog your attention.

The YouTube algorithm optimizes for engagement, because engagement gives units of attention, which can then be sold as advertising. And so, you are not actually in control of your time in any meaningful fashion. In fact, all the systems that you’re facing on the internet are designed to suck up as much of your attention as they can get.

And so, to say that this is just a failure of personal responsibility when people don’t spend enough time on their families, or don’t spend enough time on asking profound questions like, “What’s my purpose in life, and how do I find it, and how do I work on it?” I think these are systemic issues, not just personal failures, at all.

Bethany: It seems to me that advertising has worked because it preys on what’s worst about human nature. And I don’t know how a better system can change that. It feels like you might be asking a system to change things that are innate to people. Am I being too negative about the human condition?

Albert Wenger: Definitely. But in the book, I write about three freedoms. I write about economic freedom, I write about informational freedom, and I write about psychological freedom. And I do believe that if we increase all three of these meaningfully, that that will make a big change in our ability to resist these types of systems.

And so, just for people who haven’t read the book, economic freedom is some form of universal basic income. Informational freedom is giving us back meaningful control over these devices. And psychological freedom is just personal practices that help you be more in control of your attention, and notice where your attention goes and understand why it’s going there, and maybe be able to direct it a little bit better.

And so, this really is about creating the systems, both at the individual and at the societal level, that allow individuals to be more in charge of their attention.

Bethany: Another point you make that’s lovely, I think, is the importance of ensuring that knowledge continues to build. And do we need an explicit mechanism, whether it’s via a democracy, whether it’s via a market system, whether it’s via long-term planning like China might do, to ensure that knowledge continues to build? Or can you rely on the creativity and passion and curiosity of humanity once freed by the constraints of the current need to work?

Albert Wenger: I’m pretty firmly in the latter camp. For people who haven’t read the book, I have a fairly broad definition of knowledge. Knowledge is not just scientific knowledge, but it’s also art. It’s basically things that persist over time. Knowledge to me is that I can read a book today that somebody else wrote 2,000 years ago in a different part of the world, or I can go into a museum and see an artwork that somebody else created in a different part of the world, whatever. You get the idea.

And so, I believe that a lot of this type of production, this cultural knowledge production, I believe this is what makes us uniquely human. I believe that when given the right set of circumstances, we are very eager to produce it and participate in it. And so, I am very optimistic that if we free people up to participate in what I call the Knowledge Loop, which is this, you learn something, you create something, you share it—and that’s the loop on which we’ve built all this knowledge that we have today—I believe we’ll get a lot more of it.

The problem is, today, that loop has broken down in so many different places, and we haven’t used the power of digital systems to make it flourish. Often, we’ve used the power of digital systems to, in various ways, subvert it.

I was bashing YouTube earlier for its hogging of attention. YouTube combines the best and the worst of digital technology in one place. There are these amazing explanatory videos on YouTube on just about everything from fixing your kitchen sink to understanding advanced topics in math.

And it’s all there for humans to access. And it’s all produced by humans and often produced by humans for no reward of any kind, other than the intrinsic reward of saying, “Hey, I understood this thing, and now I’m going to tell you what I understood, and maybe you’ll understand it better as a result.”

Luigi: I think you said correctly in your book that the Knowledge Loop is broken now, and you’re right. Because, historically, the bottleneck was the sharing of the information. People were creating information, they were learning, they were creating, but then sharing was very difficult.

Today, we are in a world in which sharing is the easiest thing on the face of the earth. But as a result of that, there is too much of that, and it is unfiltered. What are you proposing as a filter? Because, for the Knowledge Loop to work, not only do you need to have people dedicated to it, you need a filter, a bit like Wikipedia is some kind of filter, but it is more the exception than the norm.

Albert Wenger: We could use systems to surface the best math content on YouTube, except that YouTube has zero economic incentivization to do that. Zero, literally. So, their algorithm would rather show you something that enrages you, because then you’re going to rage click on the next thing, and the next thing, and the next thing after that.

But it’s all there. So, between some amount of human curation, and then some amount of machines taking that human curation, we have no problem building fantastic filters. It’s just the objective function for the filters is wrong. And it’s wrong because it’s economically incentivized. That’s why it’s wrong.

Luigi: No, no, I understand. But it’s more than that, because if I’m willing to pay a certain amount of money for somebody to filter for me, companies are preventing this from taking place. So, I cannot put a filter between me and Twitter, or a filter between me and Facebook.

Albert Wenger: Absolutely. And, by the way, the whole chapter about informational freedom is about how the fundamental architecture of computation is broken, especially once we shifted away from the web to these devices. Because this is a supercomputer in my pocket, and yet I can’t program it. I can’t run software on it that says, “Only show me the following set of things off Twitter or TikTok or Facebook. I’m not interested in any of the others.” I have to interact through the interface that was created by the company that’s economically incentivized to then show me terrible things the second I start looking.

And the point that’s really important to me is, regulators are trying to intervene with the wrong toolkit. They’re coming with an industrial age toolkit at this, instead of saying, “No, this is a digital-age problem, and we need to come up with a digital-age solution for it." The solution that I’m fond of is, just empower us to use computing power vis-à-vis these systems.

I should be able to intermediate these systems with computing power that operates on my behalf, not on behalf of the other entity. And one of the stranger things is that some of the same regulators who recognize that these large digital monopolies, or new monopolies, are a problem, that many of these same regulators are very opposed to crypto or web 3.0, which is one of the technologies that actually gives us a shot at having network effects, but not having those network effects be owned and the rents extracted by a central entity. So, it seems like, to me, a strange cognitive dissonance.

Luigi: You summarize it very nicely in the book, “Don’t break them up, open them up.” I’m sure you’re familiar with Francis Fukuyama, and he had a group that was promoting this middleware idea that is not very different from your personalized-bot idea. The problem is how to get there. Francis Fukuyama is very vague, I think strategically vague, in saying how you get there.

Albert Wenger: I’m not vague about it at all. Systems above a certain scale should have a mandated API. And you could say, “Here’s how much you can charge for this API,” which is you can charge at most what your ARPU is on free users. So, if I’m like, “I don’t want any of your stuff, just give it to me, give me the tech, I’m happy to pay what you make off an ad-supported user.”

Luigi: You are one of the few venture capitalists I know who is against patents. Can you elaborate on that position? How can you keep that job by being against patents?

Albert Wenger: Well, I’m not a patent abolitionist. I just think we have gone way overboard on both copyright and patents. It should be harder to get a patent. The patent should be more serious, and we should figure out ways of incentivizing research and progress that don’t enclose them.

And I’m very partial to prizes. And I think we should have a lot more prizes—governments and also private money—there should be a lot more prizes, and those prizes should come with, you win the prize, your thing becomes publicly available for anybody to use.

Bethany: One of your other key solutions is the idea of universal basic income. What do you think is the strongest objection to universal basic income, the best objection, and what would your response to that best objection be?

Albert Wenger: That’s a great question. Everybody usually rolls out their own favorite objection. To me, I think the best objection actually is that it just seems too far. It just seems too utopian. It just seems too . . . We can’t do it. And I just think this is where we need to allow ourselves to think bigger. And that’s why I think economics has had a pernicious influence on the political dialogue, because economics has taken such a narrow view, a short view of history, and such a narrow view of the systems that are possible.

And a big thing that I’m pointing out in the book is, “Look, we’ve changed everything about how humanity lives, several times already.” The changes when we went from forager to agrarian society are so profound. It’s like we went from being migratory to being sedentary. We went from these flat tribal societies to these super hierarchical societies. We went from being clearly, in various forms, polyamorous or whatever, to basically being monogamous-ish. We went from having these animistic religions where every rock has a spirit to these theistic religions.

These are really, really profound changes. And so, when people say, “Albert, what are you talking about? It’s all utopian. You’re talking about basic income, you’re talking about changing the education system, you’re talking about changing everything.” I’m like, “Yeah, I am, because we’ve done it twice before. And why did we do it? Because something technologically got unlocked, and it fundamentally changed what was possible in the world. And so, then we had to find new ways of organizing ourselves that would get the benefit out of that new possibility.”

Bethany: You opened my mind to a new way of thinking. I would have said, before reading your book and before this conversation, “But, oh, the dignity of work.” And seeing the dignity of work, that concept, through the lens of the Protestant work ethic, which itself served the existing economic model, is actually a quite compelling change in perspective that really blows the thing apart.

I’m still not sure. It’s been so ingrained in me that I’m still not sure I’m there, but I’m at least thinking a little bit differently, or thinking about the possibility of thinking differently.

Albert Wenger: I love that. One conversion at a time.

Luigi: Can I ruin this UBI love fest? Because I think, Bethany, when you asked Albert what was the major criticism, I said, “Oh, let me do it.” And, honestly, I’m not ideological against UBI, but my concern is that it doesn’t seem to deliver what you want it to deliver, in the sense that one of the objectives is to basically provide a safety net, but the safety net can be provided by unemployment insurance. It doesn’t need to be a UBI to do that.

And, by the way, I think adding universal health insurance—maybe as a European, you take it for granted—seems to be much more important in that dimension than anything else. So, before UBI, let’s get universal health insurance. But then, the other reason why you want UBI is because you assume that once people are liberated from the pain of working, they will all produce great things. You have in mind tenured faculty, because, in a sense, traditional tenure was not about getting a fantastic income, but you get a guaranteed income, and then you produce knowledge.

But even in that context, there is a huge amount of selection. When we try to determine whether somebody deserves tenure or not, one of the characteristics is whether she or he has produced a lot of valuable research. But the other question is, will she or he continue producing that research, or once he gets tenure, will they be off consulting or doing something else?

The question is, do you really think that most of the people will be happy drinking water and not wine, and produce great research and not do something else?

Albert Wenger: There’s a couple of parts to this. The first is that I think we are vastly underutilizing the world’s capabilities, because so many humans are trapped in just having to wake up every morning, and then working eight hours, or possibly multiple jobs.

And among those people are people who could produce amazing work. In order to move forward, we don’t need everybody to produce amazing work, we just need to increase the percentage of people who have a shot at it. There are all these people that say, “Oh, we need many more humans, and let’s not have the population go down.” I’m like, “No, we’re vastly underutilizing the population. We’re vastly underutilizing humans’ potential to do amazing things, because we’re not giving enough people a shot at it.” And so, all I’m saying is, these are systems that can give more people a shot at it.

Some people will take it, some people will be great, some people won’t, and some people will try it and won’t be great. It’s just opening up the aperture massively to who gets to take that shot. I just think there are way more people out there, and I think the reason the tenure system has worked is largely because there are people who are just going to work no matter what, and they tend to be the people who actually wind up getting tenure.

And so, I just think that this idea that, somehow, it’s the prize of tenure that somehow gets them to work this hard. No, there are people who are going to work hard no matter what. And it happens, there’s a system where you can then earn tenure as part of that.

I think there’s a lot to be learned from looking at math. The reason I like looking at math is because you can’t get patents on math, you can’t copyright. You can say, “This is the paper I published,” but it’s largely a reputation economy, and it is supplemented by a few prizes. The Fields Medal, some famous prizes, the millennium questions and so forth.

That system has produced an extraordinary amount of new math. Extraordinary. When you go to college today, you get a math college degree, you will barely make it through 1900 in terms of math. And so, all the math that has been invented since then, you have to learn in graduate school, basically, for the most part.

And it’s been in a system that doesn’t really do a lot other than say, “Here’s a bunch of math.” It’s simply saying that more people deserve to spend serious time participating in the Knowledge Loop. And too many people are prevented from that by circumstance of their lives. And we can fix that. We have the material means of changing that.

Luigi: But saying more people doesn’t mean that you should pay a universal basic income to everybody. I think there are a lot of people who prefer playing video games.

Albert Wenger: Here’s another really interesting fun fact. We did the entire Apollo program at a time when math was not mandatory in high schools.

Luigi: But, honestly, Albert, we made the Apollo program by getting all the great scientists from Europe exported to our own country. Von Braun was German, and a lot of the people trained there—

Albert Wenger: There was Operation Paperclip. We did import some Nazis to get it jumpstarted. That’s fair enough. But we had a lot of very capable engineers working on it that grew up in the American heartland.

Bethany: It’s a small part of your book, but there was one point you made toward the end of it that actually made me recoil, and that was this idea of privacy. So, as we make technological progress, we must eventually insist on less privacy in order to protect society. And I thought you were utopian in this sense, because you make an argument that if people had UBI, they wouldn’t have to be worried about their health information being disclosed and therefore being unable to get a job, because a prospective employer saw that they had an expensive health condition. But you’d still care for a whole host of other reasons. I did think you were a little bit cavalier about privacy.

Albert Wenger: My privacy thoughts could take up an entire podcast on their own. But let me try to put them succinctly. I believe that privacy and technological progress are fundamentally incompatible with each other. There will come a point in time when we are so technologically advanced that you could build something in your home that could destroy the planet in a millisecond.

And so, I believe that the rest of society has a legitimate interest in understanding whether or not you’re building such a thing. And so, I do think that there’s this fundamental long-term incompatibility. I think there are also some profound short-term incompatibilities that people don’t think enough about. And I’ll give just one recent, fun example.

Apple was like, “We are going to shut down all these ad IDs and these device identifiers because of privacy.” And people are like, “Yeah, you have privacy, so let’s go do this.” And now Apple is becoming one of the largest players in advertising, in which they’re like, “Oh, actually, we have all first-party data. We don’t need to drop a cookie; we don’t need to do anything. We can sell you this audience.” So, I think that part of what has gone wrong in privacy is that, in order to make certain privacy assurances, we’ve created new systems that have actually made the powerful players more powerful, and that have made it harder, if not impossible, for us to take control over these devices.

Luigi: One last question before you get off, because I’m very curious, you speak in very negative terms about both the Digital Millennium Copyright Act and the Computer Fraud and Abuse Act. Can you educate our listeners, and also me, about what is so evil about them?

Albert Wenger: The Digital Millennium Copyright Act has some good aspects to it. It has this important safe-harbor provision in it, but it also has provisions in it that basically make it a federal crime to take certain computer code and look at what it does.

Basically, that makes it a crime for me to take, let’s say, Facebook’s app and look at the code and say, “Oh, here’s what this code does. Here’s a way I could access Facebook’s APIs directly by writing my own code in a way that pretends to be Facebook’s code, essentially.”

And the Computer Fraud and Abuse Act has a very similar thrust, where if you’re interacting with a system in a way that wasn’t explicitly permitted by the parties that designed the system, that can easily be fraudulent activity and, again, can be a federal crime.

So, how do we get to where Facebook is a programmable thing? There’s two ways of getting there. One is the government mandates that Facebook open up. And another is, we just say, “Hey, if you want to program something and you’re capable of doing it, go knock yourself out.” And, basically, we have foreclosed the second route. So, we have foreclosed it because we have basically made the steps that you would need to take, in order to do that, a crime.

Bethany: Well, thank you for taking the time to join us. I found this really thought-provoking, and the book was thought-provoking, in and of itself, but I found the discussion even more thought-provoking. So, thank you for sharing.

Albert Wenger: This was a fantastic conversation, because you asked terrific questions, informed by reading the book, and so, this was such an enjoyable conversation for me, and I really thank you for it.

Bethany: The area I wish we had pushed a little bit harder on is this idea that regulation, that different forms of regulation, different approaches to patent law, can make capitalism more successful, can effectively reform capitalism so that you have this middle ground between, yes capitalism, and no capitalism, with these reforms of capitalism that will make it function better for the digital age.

And I don’t think I pushed enough on that to get clarity on it. Did you feel like you came away with a clear sense of what pieces could be reformed through better regulation and how doable that was?

Luigi: I think he has a very general viewpoint that we went too far in the direction of enforcing property rights and intellectual-property rights, which I think is true. I think Besson was of the same view, and I agree with them. Now, from there to say how to change it is not an easy step, and I’m not so sure that he knows how to walk all the steps in that direction.

But I think that it’s another person pushing in that direction, and I think it’s particularly relevant because it’s not coming from ivory-tower academics. It’s actually coming from a venture capitalist.

Bethany: I wanted to push him to get at the extent to which capitalism was broken. And I thought it was really interesting that he came out and said, “Basically, capitalism should be 20 to 30 percent of the world, and the rest should be regulated by something else.” This idea that you articulated as well, that capitalism was so successful that markets became our mechanism for everything, and that it’s really in taking it to the extreme that we’ve gone wrong, and believing that the market should regulate all aspects of life, not just particular aspects of life, I think that’s really compelling.

And I don’t know what the right answer is, whether it’s 20 to 30 percent or 80 percent, but I think even thinking about your own life through that lens, what do you allow the market to regulate, and what do you not allow the market to regulate? What do you have a different mechanism for? It’s a really interesting framework for thinking about life.

I, too, in reading his book, thought he really minimized this idea of the importance of financial capital. He defines capital as something other than financial capital. It’s physical capital, but physical capital is created by financial capital.

And he answered that by saying, well, he’s a venture capitalist, he understands the allocation of financial capital better than everybody. True. But he still doesn’t quite articulate the importance of financial capital, particularly in a financialized world.

He’s got this example in the book about how you’ve got a Spanish galleon that’s full of gold, and the sailors have all this access to financial capital, but what they needed to survive was more knowledge or a better boat. So, if anything, they should have just thrown the gold overboard.

And I thought that was not a very smart way to look at this, because it was such a specific example about what to do in a storm and not an overall comment on the usefulness of financial capital. And I’m still not sure we managed to pull out of him exactly what the role of financial capital should be.

Luigi: What is your definition of financial capital, Bethany?

Bethany: The way I think about it, and we could probably argue this point, is that financial capital is the precondition for the other forms of capital that he was thinking about. And without financial capital, you can’t produce these kinds of physical capital.

And then, I guess I’d layer on top of that, in a financialized world, financial capital has taken on a life of its own, the life that is separate from the physical capital that it is used to produce. Because this idea that there’s no shortage of physical capital, that we have everything we could need, that depends in some ways on where the control of the financial capital that creates the physical capital rests.

And if the control of that financial capital is in the hands of people who then are going to control the resulting physical capital, then there isn’t enough for everybody. Am I making this too complicated?

Luigi: One story could be, say, there is enough land to feed everybody in the world. I think that the statement is correct. Of course, there is an issue of allocation which is not trivial. Telling the Biafra kid who’s starving that there is enough land for everybody is not particularly a consolation.

And I think he’s saying the same thing regarding physical capital, which I don’t know that this is actually a fact, that there is enough capital. I guess it very much depends on how you define needs, because long-lasting healthcare, I’m not so sure that there is enough physical capital for everybody.

But let’s take the most generous interpretation. There is enough capital to produce goods to satisfy everybody’s needs. But, of course, there is an issue of redistribution, which is not trivial.

On the financial capital, I think that my interpretation is financial capital is simply the ability to reallocate resources across space, time and even contingencies. Whether there is enough of that depends a lot on where you live. If you live in the United States, probably there is enough. If you live in most of Africa, probably there is not.

But, to his credit, what he’s trying to say is, to fix the problems that he identifies as the number-one problems of the future, I think that neither physical capital nor financial capital are essential. First of all, there must be a political will, and this is what is lacking, and this is what he’s trying desperately to generate.

Bethany: That makes sense to me, Luigi, as a way of thinking about it. I guess I still think—and this gets to one of my chief criticisms before our conversation, that I had a more nuanced view of after talking to him—that he is naive/utopian about the idea that there is enough physical capital for everybody. Because, in my view, that does rest on a reallocation of the financial capital that is used to create the physical capital.

And without that, there is not enough physical capital for everybody, whether it’s food, whether it’s healthcare, whether it’s, in my case, drinking wine instead of water. There’s not necessarily enough, and human nature—and this is where I get to my broader criticism that I’m not as sure I’m right about after talking to him—wants to have more than other people have.

And so, this idea that we can apportion things so that there’s enough for everybody, without the nastiness of human nature rearing its ugly head and saying, “But I want more than everybody else has,” is utopian, to my way of thinking.

Now, the thing that changed my mind about that, after talking . . . Or didn’t really change my mind, but opened my mind to the idea of a new way of thinking, which I really, really like, is that so much of what we think of as human nature has been conditioned on the structures in which we live, the structures of the age in which we lived. And that from the agrarian age to the forager age, human nature has differed in some key ways, based on the structures of those ages, and that we don’t really know what human nature is, because it can’t be separated from the scarcities of its age.

And that still may be a little too much wishful thinking. But I like that as a possibility. I like the idea that when we say, “Human nature is this,” we’re conditioning it upon our own experience, or upon our experience in a very specific age of the world. And we don’t, actually, really, really know. And I like the idea of at least opening that up to a little bit of doubt.

Luigi: But this is Jean-Jacques Rousseau, and the myth of the bon sauvage, of a primitive man who is kind and nice, and has been destroyed by the superstructure of society. I don’t know, I think that certainly—

Bethany: You think my cynicism is right.

Luigi: Certainly, our needs are in part determined by who is around us, and so are determined by society, and that’s not new and is important. Whether most people will be satisfied with a thousand dollars a month in all their needs, I think remains to be seen. And what is interesting is, when people talk about UBI, they always talk about a thousand of whatever currency they have. So, it is a thousand dollars in the United States, it’s a thousand pounds in the UK, it’s a thousand euros in the EU, and we don’t understand why a thousand is this magic number. And if there is high inflation, will it still remain a thousand?

Bethany: Yeah, I agree. But I did think on the UBI point—again, I’m not sure I agree with him. I am so schooled in this Protestant view of the world that work is what gives your life meaning, and that if you don’t have work, you don’t have dignity, and that the harder you work, the better a human being you are.

But I think it’s interesting to think about how that grew up in a very specific era, when the religious belief, as it so often does, helped to augment the economic needs of the time and to wonder if that really is a core part of human nature.

So, I’m not sure I’m wrong, I’m not sure my original preconceptions were wrong, and I’m not sure he’s right, but it’s at least interesting to open up the aperture a little bit on that, and think differently about it, or at least think differently about the possibilities.

Luigi: He wasn’t even discussing how to finance it. If the money comes from heaven, maybe that’s a good idea. In order to finance a UBI, it means that the people who are actually working need to pay a lot more of their income toward supporting the ones who don’t work. How impactful that is in discouraging actual work remains to be seen. And whether it’s self-supporting remains to be seen.

I think the more interesting aspect is this idea that if you have free time, you will contribute to the Knowledge Loop. And I think it’s definitely true for people who have a passion and a curiosity. And you might argue that in a different society, everybody that, if raised in the proper way, everybody would have passion and knowledge.

And these are the nonverifiable alternatives that might be right. But it’s hard to prove. And because it’s so complicated to go to the other equilibrium and so risky, I’m not so sure that anybody wants to try anytime soon. But in places where you have more generous unemployment insurance, I think it would be worthwhile seeing how much these people contribute to the Knowledge Loop. I’m not so sure a lot, but maybe I’m wrong.

Bethany: I thought he was more nuanced about it in our discussion than he was in the book, in the sense that he didn’t say every single person, when freed from the constraints of needing to work in a low-paying job, would contribute to the Knowledge Loop. He basically said, “If one in a million does, we’re better off than we were before that.” And I think that’s . . . I don’t know what the number is, and I’m not sure he said one in a million. I don’t know what the number is where you make that worthwhile.

But at some point, the basic idea that you don’t need everybody who’s freed from the constraints of having to do a menial job to make a living, to somehow become a contributor. If just one does who wouldn’t have done so otherwise, the world could fundamentally change. And so, I found him a little more compelling on that point in our discussion than I did after reading his book.

Luigi: So, Bethany, what was your big takeaway from this book and this interview?

Bethany: So, I’m broadly sympathetic to this notion that markets are being used to measure things which they cannot measure, that we’ve allowed this idea of the market to expand into spheres that it was never meant to be in, and in part because of its huge success in so many areas of doing that.

I’m also open to the notion that these distinct phases of human existence have shaped a lot more than we realize, than we who are living in them at the time realize that they shape, from the nature of work to the structure of society. I still think Wenger has a more idealistic view of human nature than I do, but I’m open to the notion that I might be too cynical.

You, Luigi, what were your broad takeaways?

Luigi: I think he is certainly right that we are undergoing a dramatic change in technology, which is changing all our ways of living. I always tell my students that the little gadget that we carry around has changed the way we shop, the way we study, the way we do everything, including the way we mate, so it has been, really, a Copernican revolution that just started.

The implications of all the social norms that are needed to support this new technology in equilibrium are still in evolution. I think we’re living through the change, and we’re still experimenting and there are a lot of tensions. One of the things that needs to change is also the content and the form of our education.

I always joke that the only difference between the way Socrates used to teach and the way I teach is PowerPoint, but it’s not a big difference. And look how the world has changed dramatically in the meantime. It’s hard to conceive.

I wish he had elaborated better on his personal-bot idea, which is very much in line with the middleware idea for Fukuyama, because I think it is very powerful. I see zero chance that this will be approved by Congress, because it is really an arrow in the heart of the business model of digital platforms. So, they prefer anything else but that. But I think that that’s the right solution.