George Gilder | Life After Google

well thank you thank you very much and [Music] but had live about five miles as the crow flies but the crows don't run reliably enough so I have to take a more circuitous route to a iar and last year when I was supposed to be speaking here my route had taken me to Thailand which made it more difficult to appear and so I didn't appear but I did finish life after Google and that I was my my daughter is a doctor and a refugee camp in Thailand and a friend of Bobo who I believe is affiliated with you in some way he's not here is he or what well in any case I was there finishing life after Google and and failed to appear but I hope I can redeem myself this evening is I should have a click clicker - oh thank you appreciate is capitalism chiefly an incentive system this is really you know a fundamental question which I've addressed throughout my career and now this week as William Nordhaus of Yale and Paul Romer of Berkeley both received the Nobel Prize in Economics for their coverage of Technology and an entrepreneurial creativity these are two economists that I addressed at length in my book knowledge and power of a few years back and criticized because because they chiefly see entrepreneurship as Romer put it the reassembling of chemical elements and he thought this gave the entrepreneur a lot of latitude because there a lot because there are a lot of potential patterns of chemical elements that can be contrived but essentially economists have tried to reduce the entrepreneur to a kind of Skinner box occupant who who was response to rewards and punishments and and is really reducible to his environment and the key theme of my current economic work is that capitalism should not be chiefly regarded as a system of incentives as the Skinner box has been discredited in psychology it shouldn't persist in economic models as Homo economicus who is a kind of skinner Redux of who persists in economic theory capitalism is chiefly an information system as the Austrians have long really understood and explained and but when you see capitalism as an information system you understand that all the various coverage you see in all the mainstream media constant references to the greed manifested or the fee here in the greed or the all these images of capitalism really become almost irrelevant when you understand that wealth is chiefly knowledge you know that because as Thomas Saul said years ago of the Neanderthal in his cave had access to all the material resources that we have today the difference between our age and the stone age is entirely the increase in knowledge but if knowledge is wealth wealth is knowledge what is economic growth well for years and years I've been examining a phenomenon called the learning curve it's the most thoroughly documented phenomenon in business strategy the Bain & Company in the Boston Consulting Group have made their entire careers by documenting learning curves or experience curves as Bain called them to an act of differentiation but they're essentially learning curves and they apply to everything from transistors on microchips to eggs and poultry farms to insurance policies to lines of software code their learning curves are the most pervasive and demonstrable phenomenon in capitalism and economic growth is learning that's what it is it's learning it's the increase in knowledge and it's achieved because every business is an empirical and falsifiable test of an entrepreneurial idea and it has to be falsifiable if if bankruptcy is not possible no learning can occur so all of of governments and socialists to guarantee outcomes prohibit economic growth you can create symbols you can simulate economic growth but you but it doesn't actually happen unless learning occurs the increase of knowledge occurs and this is the information theory of capitalism and it's the foundation for life after Google well this life after Google was inspired in part by life after television this was a book that came out in 1990 and with several editions and and one of them was passed out by Steve Jobs to his associates and in it I said the dominant computer of the future would be as portable as your watch as personal as your wallet it would recognize speech that would navigate streets it would collect your news and your mail just might not do windows but do doors anyway that was life after television and I returned to that title in to address the new subject to this book the Google system of the world and Google is not just a company it's a vehicle for a system of the world and its previous role was focused on search and search is quite a humble kind of function for a business it's really serving other of all the other businesses across the internet with its crawling and search services but since then Google has now arrived at a new system of the world which is satisfying solutions using Big Data cloud computing and machine learning it could produce answers to all the questions you might have so rather than offering a search instead it offers a solution it offers an answer based on this model that if you have enough data and you can get enough data because you give all your goods and services away for free you can answer any question and you can transcend mere human minds that move step by step to various conclusions and in a learning process which is falsifiable at every step you eclipse this learning process with a gigantic statistical process that delivers answers by by techniques that human minds can't really try to say I understand and Ray Kurzweil a good friend of mine who is now chief of engineering at Google and who's has a house in Richmond and predicts a singularity and my mother came and this is were delighted to see my mother here she's she's a hundred years old which gives me great encouragement and and she she celebrated her 100th birthday by playing a concert with yo-yo ma so she she still has her piano chart so but we're talking about life after Google MoMA it's and the idea that big debt she's read it and the idea that big data is a replacement for individual human minds that ultimately a singularity will occur when machines become smarter than us and and they can create a cascade of ever better machines that end up usurping the universe F and and allowing Brynn a Sergey Brin and Larry Page of Google to fly off to distant planets with Elon Musk of while the rest of us can retire on beaches on a guaranteed annual income which is which is the current fashion in Silicon Valley they literally do believe this system of the world where big data and cloud computing and machine mines produce a new system of the world well there's another system of the world rising up to compete with this Google system of the world and it is what I call the cryptic azam it's it's began with Bitcoin it and the technology of the blockchain which Bitcoin harbored and of which really can be considered as a new architecture of security for the Internet and the microcosm was my book which told about the microchip which was really a crucial breakthrough because it showed that matter could be manipulated from inside that you could manipulate matter from inside using quantum physics matter wasn't merely something that had to be moved by from outside forces you could manipulate it interior li and create billions of transistors on a microchip and computers that run and billions of operations a second the telecom was the worldwide web of glass and light which really is the internet and the cryptic azam is the new solution that is satoshi up there the guy with with the cigar a lot of people don't want to believe these Satoshi but it turns out that years years before he was introducing himself this Satoshi Nakamoto and I've talked to people who knew him then and it's amazing but I don't he may not have completely written the paper he may maybe David Klieman who currently Sue's family is currently suing him that anyway Heath was involved in that history this is the law of it fight Alec booter inthere and he's the inventor of aetherium he does not believe that Wright is Satoshi so you can take my notice Jeffrey I believe so so there's you take this this with the appropriate grains of salt but but after long ice more or less believe that he is the Satoshi Ethier iam is a new blockchain that was created by this teal fellow who Peter teal were lured from college to start a company and he started aetherium violating all the rules of venture capital and venture capital if you change the software you can't change the hardware you that everything has to be very incremental if it's going to unless the support of Silicon Valley's venture capitalists and and vitalik here boo Turin created a new blockchain and based on the Bitcoin blockchain but more generalized and improved a global computer platform that of could be programmed with a new computer language called solidity which could be funded by a new currency called ether and which had its value based on the energy used in computer operations to execute the smart contracts on the platform and that whole system has already proved itself by launching some 2000 companies and raising some twenty billion dollars in the last 12 months and the third one is wujin tang of bet main and he was he was a Chinese kid who in 2013 saw that Bitcoin was going to be really important and that somebody who could develop an application-specific computer that focused exclusively on algorithms for Bitcoin mining could rule the world could by 2017 be the world's most profitable semiconductor microchip company and build the fastest computer in the face of the earth even though it's a very application specific computer is only good for one thing but it's a brilliant coup of peda hashes a second that's 10 to the 18th hash operations a second in the Bitcoin mining of regime there's some debate and bit Maine has been restricted by the jab by the Chinese government so his company is now metastasized all around the world it's got offices and Singapore and Israel and California it's it's it's becoming an important semiconductor company making AI chips among other things and so that's the cryptic azam which is the candidate to replace this Google system that's going to replace all our brains and in 2008 the world's four top companies in market cap were Exxon Walmart China Petroleum and China industrial and commercial bank that's just 10 years ago those were the four top companies in market cap and a lot of people think that I've that my projections for the crypto Kazem are too ambitious and that this can't happen for decades and and by 2018 the world four top companies in market cap where Apple Amazon Google and Microsoft an astounding and unexpected development this was a great triumph for us information technology so how did this happen in ten years you know a complete transformation of the world economy and this is a part of what the information theory of capitalism gives you you understand that in an Information Age economies can change as fast as Minds can change in 2023 the question is will the top four be Google inspired and these are these are four companies in China and which has three times our population and in a more capitalist government maybe by some measures than we do and they have a smaller government as a share of GDP than we do surprisingly enough about six percent smaller but these companies have different models these Google and Facebook both get ninety five percent of their revenues from advertising and I think this is a deep vulnerability because we all know that these aren't really ads they're minuses their value subtracted and and to have your whole economy based on a system of the world that depends on aggregating people's data for free and then sewing advert telling that people don't really want to see is is a flawed strategy well these Alibaba Tencent Baidu and bite dance is a new company that uses artificial intelligence in the practical way to produce a newspaper and it's current project it's it's going to have an IPO this year at a valuation of 75 billion dollars it's going to be a bigger IPO than uber and and these other companies only have about 10 percent of their revenues from advertising the Chinese have just been to China I'm about to go back they love life after Google over there believe it or not and and they the Chinese are all very concerned with collecting money from real customers rather than given things away for free and then selling to a small cohort of the advertisers so but maybe the spit core that model with AI and and search and and online commerce will be eclipsed by the cryptic azam and that's bit main I told you about bit main etherium neo is the Chinese version of the cerium and it's very impressive it's it uses the smart contract capability to comply with the intricate regulations of that the Chinese government imposes on anything that that pretends to currency in the possible export of Chinese capital hadera is a very interesting new blockchain they say they call them they're trying to differentiate themselves by saying they to blockchain they say they have rounds rather than blocks but but there but it's the same essential technology except for a fundamental invention of called virtual voting which creates consensus over a whole network without having actual voting proceeding on the network network and so it obviates so key step in most block chains and it's very efficient it has its limitations but it's it's part of this cryptic azam so we're moving from Google life to afterlife and the ten laws of Google are on their web page at least were until recent ill I started doing this speech and the life after tell of a gulet laughter Google and Google's first law is to focus on users and that's by giving them free stuff the cryptic azam first law is to focus on security and ID security first and nothing is free actually you can learn if you use the price system as all the Austrian economists have explained so well Google load number two is it's best to do one thing really really well be world champion in AI based answers the cryptic azam law number two is to create a secure foundation for customers to do many things really really well Google line number three is fast is better than slow this is even if humans can never keep up the whole idea is you run your computer's so fast that they generate consciousness as a kind of epiphenomena of very fast computation and is a fundamental misconception of how computers work and what they can do the cryptic azam is willing to accept descent ten thousand folds slowdown of transactional of speeds if if you've in exchange for this you establish a ground state a secure basis for identity and and security democracy on the web works but google's our hierarchy and in the cryptic azam a majority majority rule is it as is a disaster really it's a 51% attack and it's bitcoins biggest threat the blockchain is a header our key not a hierarchy and you don't need voting if you really distribute the power well enough you don't need all this concern about majorities now I missed uh you don't need the fifth laws you don't need to be at your desk to need an answer so Google went out and bought AdMob so it can put ads on your smartphone and the cryptic azam says that if your smartphone is smart the least it can do is suppress ads and ads count for 30% of customer bandwidth cost on their smartphones they slow down they impose measure will slow down on your smartphones because they're more cumbersome than the material you actually want the error of the click-through rate is point oh six percent and the error most of them are mistakes half of mistakes estimated so the net ad click through rate on smartphones is 0.03 percent and that's a satisfactory rate if you're a Nigerian prince trying to sell rights and some vast new goldmine on the moon but of but for ordinary people that that ad rate that click-through rate is spam and is a catastrophe so Brendan Eich is a great figure in the history of the internet a Brendan was one of the founders of Netscape and he introduced the Secure Sockets Layer to browsers he invented the JavaScript programming language which is now the most widely used programming language in the world he started the mozilla foundation to launch a firefox browser he's the world's expert in browsers and he's invented a new browser called brave which directly addresses all these problems of the Google era and system of the world there we go well this is you can make money without doing evil and Google is very proud of having its big data centers some 85 big data centers located near glaciers and large bodies of water and waterfalls to carry away the heat and they connect them for to enhance their virtue but with various Sun hinges of solar cells and quixotic windmills but that's and they think bitcoin is very wasteful but the claw of the cryptic Azam is real money is good money is is a crucial human invention and the biggest waste probably in the world economy is the world's biggest industry by far the world's biggest industry is currency trading and it's five point one trillion dollars a day that's 25 times all world GDP that's 73 times all world trade and goods and services and at the end of the day it fails to duplicate the function that gold performed for 300 years of actually providing a measuring stick for valuations across the world economy so that's that money is a measuring stick not a magic wand for central banks Google woah number seven is there's always more information out there and we can get it by giving our services away for free the cryptic azam law is that information should be owned by its creators not by its distributors and nothing is free the need for information crosses all borders as Google's law and they've got Google Translate which is a wonderful system which they imply somehow represents a triumph for machines over human translators but all the Google Translate is dependent on examples of translation performed by human beings and this is the Chi I my book dwells on this subject at some length of refuting this idea that somehow artificial intelligence is on a path to usurp human intelligence but the it's unbelievable the extent to which in Silicon Valley they really believe that this is a fundamental new achievement for human beings and which machines over human beings and I call it Google Marxism because a lot of people don't really understand Marx's key mistake and Marx's key mistake was his belief that Industrial Revolution of the 19th century it's the railroads the turbines the looms and all the great breakthroughs of the 19th century Industrial Revolution had permanently solved the problem of human productivity so in the future of wealth creation would no longer be an issue the only challenge was redistributing wealth and that was that was Marx's error he imagined that achievements of his era were a kind of eschaton a final human achievement that and it's it's kind of a temporal vanity where you've imagined that science of your day is the ultimate science Google Marxism is the same mistake again they say that they're machine learning of artificial intelligence cloud computing search solutions all their current algorithmic biology all their technologies are a final human attainment even more significant than the Industrial Age which only solved the problem of physical labor the Google Marxist vision is in eschaton for human minds as well and I think that is the great great mistake of Google so we're going to move along here this is the crash of the existing model of where Google anyway we all know this this is a failed security model and it will be replaced by the blockchain and Google law number 10 great isn't good enough we are casually great we're cosmically great and cryptic azam law number 10 is we provide an architecture of security and timestamp factuality which enables our customers to be great and this with this kid this your face can be on the cover of the Horwood economic review if your very nice - Jeffrey Tucker here and I'm very proud to be on the back end of the heartwood economic review identified and even if I can't be on the cover so I think I'll end us in answer questions as as you you wish no you did I'm glad you can remember that so my question is short and simple in retrospect what do you think of the supply side movement Reaganomics what happened what didn't happen whether we've learned the lesson since where we stand now I know it's not microcosm stuff I know it's not I tell no I mean I wait where do you think we stand George I think which supply-side economics was correct I like my reformulation of it as information as an information theory of capitalism and that's what my chief purposes which is a way of re articulating the essential insights of wealth and poverty and extending it with a monetary model where money actually is recognized as finally based on time money has to be scarce and what remains scarce when everything else becomes abundant time and time really represents the ultimate scarcities of the universe and of international trade around the world as really made possible by a whole series of physical measuring sticks the second the meter the degree Kelvin the mole of chemistry the kilogram the ampere all these measuring sticks which make possible creating a microchip and in Israel and manufacturing it in Taiwan and integrating it in a system and Shenzhen and then marketing and Cupertino all that is made possible by this set of measuring sticks that are all rooted in physical constants in the system Internationale which maintains these these measurements in Paris and and I believe money is real money is is not just a figment of central bank's money is a real measuring stick and and what it measures is the ultimate scarcity that's manifested in all those other measurements all of which ultimately are rooted in time you get you get the second is obviously time and it's calibrated by the speed of light and there's a whole series of other measuring sticks and they are all rooted in various frequencies ultimately which all represent this same scarcity of time and I think money is a measuring stick equivalent to all these other measuring sticks and it manifests the ultimate scarcity of time and in economics and to in all the various abuses perpetrated by central banks there are in that five point one trillion dollar a day Carnival of currency trading which as a symbol all their all their errors really are an effort to steal from the future that their abuses against the scarcity of time the interest rates mediate between past and future for entrepreneurs and exchange rates allow entrepreneurs to horizontally trade around the world they've measured time and space in the economy and and we've lost the guidance of real money when we've abandoned gold and I think we're going to regain it as the cryptocurrency movement supplies new proxies for gold many may be actually linked to gold itself you'll see that many of the central banks of the world while they claim that gold is irrelevant of barbaric relic they're accumulating gold heavily and and the Chinese and Indians and most of the people in the world actually believe in gold still so the would dream continues and I've I believe that it will be us celebrated well in this wonderful magazine that you are now watching really a wonderful talk I appreciate you coming here we learned so much about the telecom the crypto Kazem and if you read his book you too can look great at the age of 100 we have dessert and also drinks served at the other end of the building thank you very much [Applause]

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Keywords: George Gilder, Gilder, Life after google, Google, Finance, Financial Books, Books

Id: DvX191cYin0

Length: 43min 33sec (2613 seconds)

Published: Fri Oct 19 2018