The Bitcoin Standard Podcast

113. Saifedean demolishes Green Energy in Human Action Podcast

• Dr. Saifedean Ammous

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Can we eliminate the use of fossil fuels? Can electric cars replace gasoline cars? Is a transition to wind and solar energy possible? At what cost? What impact will a forced transition have on economic development? How do the costs of eliminating fossil fuels compare to the dangers of increased CO2 emissions? What evidence is there for a pending climate catastrophe? The Mises Institute's Jeff Deist and Bob Murphy host Saifedean for a fascinating discussion of these and many more questions!

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Jeff Deist: [00:03:02] Welcome back ladies and gentlemen, once again, it is the Human Action Podcast. I'm Jeff Deist as always joined by my co-host Bob Murphy. And as you can see, we have a very special guest this week, our friend Dr. Saifedean Ammous! Saif, how are you doing?

Saifedean Ammous: Very good Jeff, always a pleasure to be chatting to you and Bob as well!

Bob Murphy: Nice to talk with you.

Jeff Deist: Given our topic this week, some of even your fans may not know that you have a background in energy and development and sustainability, both at London School of Economics and Columbia. So you haven't always been the Bitcoin guy.

Saifedean Ammous: No, but I hope you won't hold that against me.

Jeff Deist: Well Columbia, I got to hold that against you a little bit.

Saifedean Ammous: Yeah, although again, in my defense, Tom Woods and certain economist by the name of Murray Rothbard, you may have heard of him, he also went to Columbia. So it's not all bad.

Jeff Deist: Didn't Mick Jagger go to London School of Economics?

Bob Murphy: I think so, yeah.

Saifedean Ammous: Yeah. [00:04:02] Monica Lewinsky too.

Jeff Deist: So let me just throw something out there as a broad softball for starters. The other week, Jay Inslee, who's the governor of Washington state basically came out and said by 2030 we intend to have no electric vehicles operating in our state. And I looked at the calendar, and I thought to myself, my God it's only 2022, that's eight years away.

Do these people have any concept of the amount of infrastructure that would entail in eight years?

Saifedean Ammous: No, the short answer is no, they obviously don't. It's politicians that are saying this, not the engineers. I think Washington state, to manufacturer all the cars and the infrastructure and the charging stations is not something that is going to be done in eight years.

And I think the most important thing that people miss when they talk about electric cars replacing gasoline cars is sure it can be done for rich, affluent [00:05:02] people who live in cities, you can move to an electric car, you drive a total of one hour a day. So you plug it in at home at night, and you just drive for one hour in total, it's fine.

But what they miss is that, this is typical central planning in its misunderstanding of how the world works, what they miss is the critical infrastructure of trade, which is trucks. And trucks are basically the bloodline of economic trade. They transport things all around from producers to suppliers, to distributors and retail. And the trucking network is an enormously important part of an economy and trucks are extremely time-sensitive.

So the truck driver will drive for 18 hours non-stop, stopping only for toilet breaks. [00:06:02] So we don't have electric trucks even though of course Tesla and a whole bunch of other vaporware companies have achieved billion dollar valuations by promising to sell those things. But there are no electric trucks and they had not been made commercially and it's, it's not something that's going to be solved instantaneously over the next couple of years.

And it's not something that's going to be solved at a scale that allows a state like Washington to completely replace the current infrastructure. And even if they do make electric trucks, the problem with the recharging is going to massively slow down moving things around. For the average voter, for this kind of politician living in living in Seattle they've been using their electric car for five years or so.

They think it's feasible that everybody does it, but if your local Whole Foods and your [00:07:02] local Amazon delivery had to rely on electric trucks in order to deliver all of their stuff, everything will become enormously more expensive. We don't even have the electric trucks right now, but the infrastructure that would be required to build this is not even there.

So it's just another green pipe dream in my opinion.

Jeff Deist: Hey Saif, can I just ask as a follow up on that, because I think part of what's happening now is they're painting themselves into a corner with their own rhetoric with these time tables. Cause in the year 2000 you could have gotten away with saying, oh, by 2030, we're going to do this.

But now like with the Paris climate agreement and all these things, like they have gotten the public to think these milestones of 2030 and 2050 in particular. What do you think is going to happen? Clearly they're not going to be able to hit these things.

And then what are they going to do? Just keep pushing the goalpost back?

Saifedean Ammous: Are they going to blame greedy capitalists and awful deplorable people [00:08:02] for continuing to drive essential trucks that deliver them their stuff. They're going to throw tantrums, and they're going to make new deadlines.

And this is the case. That's always been the case. In my PhD, I wrote about ethanol and biofuels. That was a topic that I studied for my PhD, and the shocking thing was to read about how those things were developed in the 1970s. And it was the exact same thing. People just don't have a memory of how things happen.

So in the 1970s, you had an enormous number of government institutions and scientists and universities and international agencies, all saying things along the lines of within five years, we're going to have ethanol constitute 50% of the fuel supply. Or within this many years, we're going to have that happen.

And none of these milestones are hit, but the people who benefit from these scams [00:09:02] get the subsidies. That's what matters. So then, there's nobody to hold them accountable. So you get a few billion dollars to make electric cars work and you make a bunch of electric cars, you hand them over you sell them.

Sell them to the government, whatever, but if they can't make it work, there's nobody to hold accountable. There's nobody who's going to hold his hand up and say, I thought we'd save the planet by going to full electric by 2030. Unfortunately, we weren't going to do it, so because of me the oceans are going to be boiling.

There's none of that. There's no real accountability. This isn't the market. These people don't have real jobs. So it's just going to be more of the same rhetoric, the oceans are going to boil and it's all our fault, and we must try harder and maybe they're going to shift the goal of electric cars to say 2040, or maybe they're just going to move on to the next shiny flashy thing that hucksters want [00:10:02] subsidies for.

Jeff Deist: If you look back at some of the things that Alan Greenspan said publicly, he never really gets called to account for those, Jay Inslee probably won't be governor anymore by 2030. I don't know how long his term is or whatever. Somebody pointed out the other day on the radio as I was driving that it's interesting that Tesla's arrive at their ultimate destination on a big old diesel car carrier.

That's how you get your Tesla, that's how it's delivered, which I thought was interesting. But I don't know how many of our listeners have Saif's newest book The Fiat Standard, it's got a section on fiat fuels, fiat energy, of course as you would expect. And Saif one thing is I was flipping through this again last night, that really struck me is as you explained, for several centuries, humans had cheaper energy.

And we're able as a result to consume more per capita, and that was a big part of human development and wealth on this planet. And it really wasn't until the seventies [00:11:02] and the oil shocks that we experienced in the west that all the sudden, for the first time in a hell of a long time, energy got more expensive.

And that has a lot of ramifications.

Saifedean Ammous: Exactly. I think the argument that I try and make in The Fiat Standard is that the interventions that fiat money has allowed and motivated in the energy markets are more than just a way for hucksters like Al Gore to get rich from subsidies.

This is what I used to think. When I wrote my PhD, I studied all of this hysteria around the need to develop alternative energy, and I came to the conclusion, this is silly. This can't work. Most of these things are just excuses for subsidies. And I thought, it's just another excuse for subsidies.

And there's many of these things in the U. S. government, but recently I've become to realize this is actually far more pernicious than just a bunch of hucksters getting rich. Because [00:12:02] historically, as you said, all of human history really is a struggle to make energy cheaper. How do we get more energy?

How do we get more work done for our needs, to meet our needs? And historically, throughout all of human history, up until the last 300, 400 years, the vast majority of humans that have ever lived could only ever consume the amount of energy that their body could produce in a day. The only energy that you could have was what your body could produce, and then you could use that to meet your needs.

So you have to spend all of your day growing your food in order to sustain yourself, and that consumed most of the energy, just growing and harvesting and preparing your food, that consumed most of the energy. So that's really why people lived in subsistence. Now with the introduction of, and of course they used other forms of energy like firewood particularly, historically, but then as we started to develop coal and [00:13:02] then oil, and then we developed engines that run on coal and oil, that allowed us to increase the amount of energy that we could use to meet our needs.

And historically the only people who could move significantly away from consuming just their own body's energy were slave masters or Kings. If you were a King, you didn't just have your own energy to meet your needs, you had maybe a thousand slaves and they went around and cut trees for you, and they boiled the water for you so that you could take a hot shower.

All of these things require energy, which we take for granted, and historically people didn't take them for granted. Historically you needed to be a king to have a house that was reliably warm, to have hot running water, to have candles that could light up the house.

Cause these things consume a lot of energy and preparing them, hunting the whales so that you could get the whale oil to light up [00:14:02] your house was an extremely energy intensive thing. So only Kings and slave masters were able to significantly move away from consuming the energy that their own body produces.

But then the industrial revolution comes along and modern fuels come along. And now even poor people get to consume many multiples of the energy that our body produces. And we take this for granted, but really for the average person today, you need to work for only a few minutes a day in order to secure your basic needs of food.

Your productivity is so high because of all the machines that you use, and the amount of energy available to you at a flick of a button, you flick a switch and suddenly the light goes on in your house, you have running cold and hot water, you can drive a car very easily.

So that's just energy becoming cheaper and cheaper. In terms of human [00:15:02] time, energy has just gotten cheaper, thanks to the industrial revolution and thanks to the use of fossil fuels, mainly coal, oil, and now gas. And really these are the building blocks of human civilization.

I think without high power energy sources, we wouldn't have all of the things that we take for granted. And I think perhaps Austrian economists maybe don't even emphasize this enough, and that's a point that I try and make in my forthcoming book Principles of Economics, which is there would be no division of labor in any meaningful sense. any global division of labor without modern energy resources.

It's no coincidence that capitalism developed and capital accumulation really took off when we started having all of those machines, because before then there was very little surplus that people could trade with one another.

The majority of people were in subsistence. The majority of people had to slave away all day just to [00:16:02] secure their needs. So specialization and the division of labor only really takes off with this increase in productivity. And if you look at the history of the price of energy, it's just constantly declining.

We invent the steam engine, price of energy declines. We invent the internal combustion engine, it declines even further. We invent nuclear energy, and it declines more and more. And then the 1970s come along and the price of energy starts going up and over the last 50 years it has been going up. It's going up nominally obviously, because the value of the money is declining.

But recently, it's also going up in real terms. It's more expensive to buy electricity in California today than it was 10 years ago, and the same is true for Germany. And the more crazy green and hysterical a constituency is, the more their power bills are rising.

And for the people who think of this as a necessary price to pay, this seems [00:17:02] like it's not such a big deal, all right well the price of electricity is going up, that's going to motivate us to switch to pre-industrial technologies, and that's going to heal the planet if we all live like 13th century peasants. But the reality of it is, you look at places in Europe and all over the world, the rising energy means a much harder life.

It means a much lower chance of surviving winter. It means a much lower productivity. I argue in The Fiat Standard that it really is inflation that is driving this. On the one hand inflation is increasing the nominal price of energy, and so making politicians look bad, and of course politicians don't want to look bad.

This is the kind of controversial point that I'm trying to make in The Fiat Standard, and it [00:18:02] applies I think to food and to energy, is that over the last 50 years government science, which is basically the only science we have these days, government funded science has very heavily favored anybody who comes up with a conclusion that suggests to people that they should consume less of the things that are getting very expensive.

So the majority or the most important part of people's consumption is energy and food. This is the most essential part of our life. Food for survival and energy also for survival and also for modern life, which we've all gone accustomed to.

Everybody needs energy, everybody needs food and these things are extremely sensitive to inflation because the supply chain is very tightly run. Things get produced from the oil field and they get processed and then they move. And so as inflation goes up, people are constantly buying, price of things will go up.

And we see [00:19:02] the emergence of these insane pseudosciences over the last 50 years that want to tell people that consuming fossil fuels is bad because it's destroying the planet or something or the other. And that similarly, consuming meat is bad for you because it's also destroying the planet and also destroying your body.

And if you dig into the science behind this stuff, you realize it's complete garbage. There's really nothing to suggest that me driving my car is causing the north pole to melt or the oceans to rise or the temperature of the earth rise. The link is so tenuous and the evidence is so thin, it is by no means scientific, and yet this stuff continues to get promoted by governments all over. Because that's how they're trying to hide the inflation.

That's how they're trying to make inflation not look bad. If you just use 15th century peasant technology like windmills and solar, then it won't be [00:20:02] expensive. Obviously with wind and solar, you won't be able to have the abundance of energy that makes modern life possible.

But if we just convince you that thing is bad for you, then there's no inflation. And I think we see this in the seventies and we see it now returning. I don't think it's a coincidence that the Federal Reserve's Twitter account is trying to tell you how to use tofu instead of your turkey for Thanksgiving. They were posting that it was a wonderful gift because that was the week in which my book came out and they gave me a wonderful illustration of this point.

Like why does the Federal Reserve tell people to cook soy instead of turkey? I think the answer is they would rather everybody eat soy because then it understates inflation compared to turkey and meat. And I think the same is true for energy.

Jeff Deist: Hey Saif, can I ask you? Cause I think some people, when they delve into this, they say, oh wow, these people think they're saving the [00:21:02] planet and they're not.

Don't they realize that this would be rolling back the achievements of Western civilization, but I think for some of the extreme activists, that's a feature, not a bug. They don't like capitalism. They think people consume too much, period. And that's what's driving this, it's actually not so much carbon dioxide emissions and they're laying awake at night worried about that.

Saifedean Ammous: I think there's a little bit of that, yes. But I think, there have always been Luddites, there've always been people that are against human progress and they think things should go back to what they were. There's this very naive idea that the untouched Earth is the Garden of Eden.

And the only thing that is preventing us from experiencing Garden of Eden is greedy capitalism and industrial production and modern technology. And in reality, the only thing that's allowing you to live to have such stupid ideas is modern technology. The Modern technology [00:22:02] is what's isolating you enough from nature and allowing you to experience nature in such a nice, contained and safe way that you can entertain these ideas.

You'll notice that none of those people will actually go out there and practice what they preach. The vast majority of the Earth is on inhabited, is undeveloped, it doesn't have any modern industrial technology. They could go just spend their life in Yellowstone National Park.

It's huge, it's bigger than all of the U. S. cities combined. And yet all of those people live in the cities where they use modern technology to get online and berate you for being an evil capitalist from the safety of their heated house using electricity. And they imagine that if we just, the naivety is astonishing, on the one hand they think that [00:23:02] they can, some of them want to just reverse all industry or they claim to, but they don't want to live that.

Some of them think that we can have, and this is like the more sophisticated activist, they think that we could have everything that we have today without modern industrialization, without capitalism. This is a very simplistic idea that, I liken it to imagining that changing the source of energy that allows us to have modern technology for them in this simplistic mind, it's as simple as changing the color of your iPhone.

So if the government would just pass a law that says apple needs to make the iPhones all be green or all be blue, then we would be done with the problem of black and white iPhones. And they think the energy source that makes your laptop and your car and modern life possible, and [00:24:02] your hospital possible is just a tiny little detail, like the color of the iPhone.

So just like we can change the color of the iPhone by just passing a law, we can also pass a law that forces capitalists and producers all over the world to stop making their laptops and cars and sophisticated equipment out of fossil fuels.

And to make it out of wooden twigs and sunlight and wind and something or the other. I think there is that idea. But I think, yes, those people exist, where I think fiat is at fault is, insane people exist at all times and at all places, why are these insane ideas so influential?

I think the reason for that is, on one hand it's a bit of a too benign of an explanation, but the reality is any person in academia who goes up and says fossil fuels are bad gets funded. Any person who is not insane and who says, [00:25:02] hey by the way, we can't have any of the nice things that we have without fossil fuels, and our life expectancy would drop to 30 without fossil fuels, and all of the modern, amazing improvements that we have had in our lives came from fossil fuels.

If you say that, there's no way that you're going to be published in any academic journal today. That's what has in my mind been the wind in the sail of these insane people.

And I think the same thing applies for, there's religious cults in the U. S. that believe that eating meat is bad, and it's like the Seventh Day Adventists. They had this woman Leanna Cooper I think her name was, in the late 19th century, and she saw visions where again, Earth is the Garden of Eden, and the only thing preventing us from enjoying the Garden of Eden is that we're eating meat and that we should all become vegans in order to save the planet and in order to save ourselves.

Crazy people believe all kinds of crazy things [00:26:02] at all times, but why is this becoming government policy? Why do the Seventh Day Adventists become so influential? Because it fits in with the message that the government needed to communicate in the 1970s, which is meat is bad for you, eat our industrial waste instead because the industrial waste is cheaper.

This is why, what should really be just the weird insane people that are on the sidewalk going around saying the end is near give up your electronics, give up your machines, go back to primitiveness, the reason these people are not just weirdos on the sidewalk, and instead they're at universities with tenure and they're in control of mainstream media and they're out there haranguing us for daring point out the obvious that none of their own lives and their own work would be possible without fossil fuels, is because inflation in my mind.

The more I think about it, [00:27:02] the more convinced of it I am. Government at the end of the day determines, it's government funding that determines what passes for science and what doesn't. And so that's what determines who gets to be a university professor, who gets to be an expert, who gets to be quoted by the New York Times and CNN.

And that's an enormously influential avenue of shaping public opinion.

Jeff Deist: But Saif at some point, if whole societies, whole countries buy into preposterous ideas that don't work, and this is subsidized and propped up via academia or a fiat currency or whatever, that portends really harsh unpleasant times ahead.

You can't just fool mother nature forever. You can't do things that don't work forever.

Saifedean Ammous: Yeah. And we're witnessing the effect of this. When you think about it, think about all of the insane inflation and the devastation that it [00:28:02] has brought the world over the last few years, but also over the last 50 years in general, not just the last couple of years.

Think about all the examples of hyperinflation. Think about all of the examples of poverty around the world. This is a direct result of this insanity. If you look at particularly in poor countries, it's catastrophic enough that places like California and Texas and Germany can no longer count on having 24 hour electricity because their grid is being destroyed by all these insane primitive technologies, but where it's really catastrophic is in places like Kenya and Latin America and Africa and Asia where people never had 24 hour cheap electricity before.

And now, 24 hour electricity is such a trivial technical problem to solve. We've been making these generators for more than a hundred years, they're very easy to make. They are made in very high scale [00:29:02] production that makes them extremely cheap. And it's really very straightforward to give people 24 hour electricity.

So you would think, places like Kenya or Namibia, which doesn't have 24 hour electricity for the whole population, what's stopping them? Especially when you keep in mind that they keep getting all these enormous amounts of loans from development organizations to develop these things.

And the answer is that a lot of the energy, or the vast majority of the energy development funding going to the third world is going to build insane solar plants and wind plants, and these things aren't enormously expensive, and they're inefficient and they're unreliable, they don't provide 24 hour electricity and they fall apart very quickly.

For the price of a solar power plant built in a village in Kenya, you could buy a very simple little generator and give the entire village 24 hour electricity, for much less than the price of the solar plant. But [00:30:02] you won't get financing from the world bank and from all of these international organizations if you're going to be using things that are destroying the planet with your carbon dioxides.

And so there's been an enormous amount of money that has been spent on these white elephant energy sources, and this insane idea that exists in these international organizations where we need to make sure that the Africans and Latin Americans and poor Asians, that they don't make our mistake of basing their development on these energy sources that we're using that are ruining the planet.

This is of course a continuation of the insanity of the population bomb. Of course it has a lot of racist undertones. The notion that 5 billion poor people in the world are going to live like white Europeans and Americans is just, it's [00:31:02] offensive to a lot of white Europeans and Americans who think, alright we're so far ahead that if they were to catch up with us, obviously the planet won't handle it.

And so we need to make sure that they develop, that they shift straight to sustainable energy. And of course it's a very silly idea that in their mind, the reason we're not able to switch in the west to the sustainable energies is because of political capture and the fossil fuel industry, and because we we're on a path dependence on those things, not that there's any kind of thermodynamic reality that makes our lives impossible to run on wind and solar.

They just genuinely believe that poor countries can develop based on this. But yeah, you're right, it's not sustainable. The sad thing about it is that it is not sustainable for the victims, but it is sustainable for the perpetrators, as long as they have access to the money printer. As long as they have the access to the money printer, this is what it ultimately is about, the people that are telling [00:32:02] you you need to not consume fossil fuels, they're the ones who fly in private jets to Davos to go and meet together and talk about how important it is to deprive Kenyans of the chance to have 24 hour electricity, because it's more important that they'd rely on wind and solar panels. This is why I think it's all about fiat.

The fiat parasites benefit from the inflation, that raises the cost of everything else, the fiat parasites then naturally gravitate toward any kind of insane hysterical pseudoscience that gives them an explanation they can give to the peasants about why this is not our fault and why it's actually your fault.

You're living unsustainably, you're abusing mother Earth, and the only way out is for you to go back to being a 12th century peasant. This is the great reset. This is what the World Economic Forum [00:33:02] talks about. You will own nothing, you will be happy, you will live in a tiny pod, and if you have a million people living in tiny pods, that's a lot less energy consumption than if each one of those people had a big house that required a lot of energy to keep warm. So if you put everybody in a tiny little pod, if they can't drive an actual car with any decent range and they have to drive this that's a glorified golf cart, that are electric cars.

They'll only be able to go around for limited distances, and of course electric cars are more useful for surveillance and control. So your car will be programmable to not get you more than 15 minutes away from your house, because that would then boil the oceans. So if you don't have to drive more than 15 minutes away from your house, from your pod, and if you're living in the tiny pod, and if you're eating soy bug burgers all the time delivered to you along with everybody else in their pod, [00:34:02] and you're just stuck there with their headsets watching virtual reality all day, you're going to be consuming a lot less energy than the average person in the 1990s who had a big suburban house, not the average person worldwide, but the average person in rich country, quite a big house and a couple of cars and would drive around, would take trips on weekends and would fly to Miami a couple of times a year, or to Mexico during the winter.

You get rid of all of that, that is what allows the inflation to continue. I think this is really the key thing. The more they can make you live like a peasant, the more they can continue to print money. Because if you don't live like a peasant, you get hyperinflation. But if you stop people from spending money, and I think this is where the COVID lockdowns are going to be likely adapted to climate change.

I think, maybe I am too paranoid, but I suspect we're one major natural disaster away from [00:35:02] Bill Gates declaring a climate emergency and telling us we can't leave our homes and we need climate lock downs and we're going to ban fossil fuels. And I think if inflation keeps getting worse, it's highly likely that any kind of natural disaster will be overplayed and presented as the product of climate change.

Jeff Deist: Just following up on that. Because you're right. I've been doing some work myself on that, like in the Davos crowd and all this stuff they're getting into. And of course, they'll tell everybody how, they're motivated by concern for climate change, despite like you say, flying on their private jets to their conferences.

And I think you alluded to a minute ago that the kind of future they envision where people, they don't own homes, they don't have their own land, they don't even have their own vehicle that they could just jump in, it's like basically Uber, except they're all robot controlled, and it's not even like private drivers who own their own cars.

In [00:36:02] that kind of thing, it's pretty easy to implement control of that kind of a population too. Cause if you're stepping out of line, they just turn it off and no more Uber pickup for you. And so how much of that do you think is as opposed to other possible motivations, like you're saying, like to keep the consequences of inflation down, but also in that kind of environment that the elites who are setting the agenda, that gives them a lot more control over the people that are living like pod people.

Saifedean Ammous: Yeah. I think that's definitely another part of it and of course, the central bank digital currencies are an integral part of this because once everybody's got one app on their phone that allows you to have money and that's linked to your central bank, then everything is controlled from above.

And just think about the possibilities, you're allowed only 20 grams of beef a month. You're allowed only, think about the possibilities in terms of locking down people with undesirable [00:37:02] opinions, so you've tweeted something unacceptable about the glorious dear leader, your money doesn't work anymore for the next week.

Jeff Deist: Saif, If they're looking at tweets you're in big trouble, man.

Saifedean Ammous: No Jeff, I have Bitcoin. I don't give a hoot about these people.

Jeff Deist: Look, all of this is very frightening and I don't discount at all the idea that there are elites who really want to have less economic activity, who really want us to lock down, really want us controlled.

And I absolutely believe that is the case. Now that's certainly not all people on what we might call the environmentalist left or whatever, but I do want to touch on one subject which you alluded to briefly, especially when we're talking about the third world, I really hate this sort of Western white savior thing.

It's incredibly arrogant, this idea of storage of surplus, if you want to have reliable [00:38:02] 24/7 energy, solar and wind for example, have a real hard time with storage with having a surplus and excess at your fingertips and coil and oil have more or less solved that.

Saifedean Ammous: Exactly. And that's really the whole point. In my forthcoming book Principles of Economics, I try and emphasize this point that energy is infinite, it's abundant. The amount of energy that hits the surface of the Earth on any given day is more than all the energy that we as humans consume for many years.

The amount of energy that is in the rivers that is in the wind, that is in the infinite amount of fuels that we find underground. People think that fossil fuels are running out, it's complete nonsense. We always have more than 10, 20, 30 years of consumption in reserve.

And the more we dig, the more refined. The Earth is so enormous, and [00:39:02] most people just have no idea how big it is. The limit on how much oil we can have for our consumption is not anywhere close to being the actual quantity that is in the crust of the Earth.

The limit is how much time we can dedicate towards digging it. It's an economic limit, it's not an absolute limit, and nuclear energy, of course. So the energy itself is not scarce. It's not an economic good. Energy in itself is not an economic good. The real economic good is power, which is energy over a particular period of time.

Energy is measured in Joules, power is measured in Watts, which is Joules per second. And that's the amount of energy that you need directed at a particular job per unit of time. That's the tricky part, how do you get the energy that you need right now to move you from point A to point [00:40:02] B, how do you have it on demand so that you flick a switch in your car and your car takes you from A to B, that's the tricky part, that's the economic good.

That's what's really scarce, that's what's hard to have. So this is the value of hydrocarbons, this is why they're so enormously valuable. They are nature's plentiful batteries. They've accumulated energy over billions of years, and they're abundant everywhere we dig, we just need to dig and take them out.

And then you've got that explosive amount of energy that you need to move your car from A to B in one tiny little package. You need a gallon of gas for that trip. You put that gallon of gas in a car, and it's there available for you on demand whenever you want it. The idea that we could move our energy consumption away from nature, that it's not relying on the wind to blow so that our windmill could run so that we could grind our wheat, that we [00:41:02] don't have to wait for the sun to come out in order for us to get the sunlight.

We just use the energy whenever we want it. So you get cold at night, you turn on the heat, you don't have to wait for the sun to come out. This is modernity, this is modern technology. This is what fossil fuels have allowed us to do. People massively discount that, it's the fact that they dismiss this, is the ultimate compliment that they pay fossil fields.

Because they just don't realize what their lives would be like without fossil fuels. And my challenge always is to any of these people who are hysterical about fossil fuels, destroying the world is try and live for a week without fossil fuels, without any products made out of fossil fuel.

So not just the consumption of the fuel itself, but also the things that are made out of fossil fuels, and that includes solar panels as well, that includes wind turbines. We can't make solar panels out of solar energy, you need enormous amounts of coal in order to make those things happen.

And that includes all electronics, which are made out of coal [00:42:02] and of course, many other substances that we have to use fossil fuels to dig up for. Modern life really is about having this abundance of energy available on demand. And if you've ever lived in a place that doesn't have 24 hour electricity, and I have, I've lived in Lebanon, I think it's astonishing to see just how expensive that is, and how destructive of your productivity it is when you just can't count on the energy being there. I think most listeners probably have lived most of their lives in places where you walk into a room, you just flick a switch and the light goes on and you never have to think about it.

But it's an entirely different existence if every time you flip the switch, it's a crapshoot whether the lights is going to go on or not, and it unsettles everything in your life. It makes everything in your life unplannable, unpredictable. And now in my case in Lebanon, it [00:43:02] wasn't that bad. It was out for a few hours a day, if it goes out for more hours a day, then you start thinking about the real cost of it is how it just completely destroys the viability of all kinds of industries.

I think the most powerful example is it makes preterm babies unable to survive. So many preterm babies die all over the world because their hospitals don't have 24 hour electricity. Electricity goes out, the incubator goes out, baby dies. This is just something that's very common. This is a huge contributor to...

Jeff Deist: Why don't we just have big huge gas generators in third world hospitals?

Saifedean Ammous: Because that would be bad for the climate. That's the insane death cult that we are having to deal with. I highly recommend the work of Alex Epstein, he's written a great book called The Moral Case for Fossil Fuels, and he's got a new book coming out in the next month called Fossil Future.

[00:44:02] He's an extremely eloquent person who describes this. He says it's really a cult. It's an ideology that views humans as a burden. And I think it's completely incoherent, obviously. Because if you really believe that, the first thing you would do is just kill yourself.

If you really thought you are a burden and that the Earth, the unimpacted Earth is the thing that you would strive for. Kill yourself and help bring us closer to the unimpacted Earth. But of course, all these people cling on to life. And Paul Ehrlich is now in his seventies or eighties, and he's still going on about how humans are a horrible thing, he has been doing this shtick for 50 years.

And it's never occurred to him to take the obvious solution there. But yeah, I think it's a very dangerous ideology because it looks at humans as a burden and it looks at the Earth as the thing that we seek, and therefore [00:45:02] once you start thinking of it this way, these people don't necessarily think that they're actually denying premature babies from the opportunity of living.

They just think in completely unreasonable ways like crazy cults can afford to think, because this is how fiat allows their existence to be. They think we can just wish for this beautiful Garden of Eden vision of Earth without any of those energy resources and magically, everybody will survive.

I don't know whether they think we'll have electricity, some of them think we can have electricity from solar and wind and angel farts or whatever, and some of them think that we don't need electricity, we need to go back to primitive life. Primitive life will be much better. Obviously coherence isn't their strong suit [00:46:02] here and accountability obviously isn't an option.

These ideologies are financed by fiat. These insane ideologies and the insane college professors and the insane media outlets that are promoting this stuff. They don't come from any kind of real place where you have to make sense in order to keep your job. They live in a world in which you just need to make the right noises and you continue to make your salary.

Jeff Deist: I think too Saif part of it is, oh the premature baby dying, that's just, a regrettable thing, but they don't connect it to their policies because they're not looking at the alternate universe where we have freedom. It reminds me when I graduated undergrad and before I went off to grad school, I was pretty broke and I was living in a poor neighborhood in Chicago, and it was the summer.

And we did have what they call brownouts or rolling blackouts where it, coincidentally it was just the poor sections of town that would have the power go out for a few hours. The [00:47:02] affluent ones, for some reason, that's never where the grid and the people aren't like, at that time, I had knew enough about free market economics that I was like this is because the government is running the electric grid, that's why.

And people would go, no, it's because it's really hot, and people are running their AC too much. And I was saying we're not running out of beer. People are drinking more beer when it's hot, but yet that's showing, isn't a coincidence that the stuff handled by the private sector.

It's fine when there's a high demand, but yet the stuff that goes, the water, you can only water your lawn every Tuesday and Thursday now because there's a drought. They just blame it on just looking the Soviet Union, oh and there's massive crop failures or there's drought, it's not that the system has anything to do with it.

Saifedean Ammous: Yeah, it's astounding for me. You see the governor of California last summer going on Twitter and telling people what was it that, try and cut down on energy in the afternoon, cause everybody's consuming a lot of energy, and it's just been normalized and you talk to a lot of the people that get to experience this.

They've come to accept that somehow there's something [00:48:02] that technically makes it hard to have the 24 hour electricity in the summer, but California has had 24 hour electricity in the summer for many decades. It's a trivial problem that was solved in the early 20th century and has spread out all over the world throughout the 20th century.

And it's really a political problem, it's not a technical problem. There's never a problem with it. Like really it's very simple. You just get a generator, you put some fuel in, it could be diesel, could be gas, it could be cold. And then you get electricity and then you connect it to a wire and you connect the wire to the house and you just need to figure out how big your engine needs to be depending on the demand.

And you make a margin of safety so that you have more and that's it. The wires will handle it. There's nothing about the hot temperatures that makes it, places like Qatar and the United Arab Emirates in Saudi Arabia, they get 24 hour electricity in the heat. It's not a miracle.

It's not something that's miraculous to achieve, [00:49:02] but it's been normalized in people's minds. That just it got hot and so we can't have electricity. And of course, the really fascinating thing I find here and I'm really looking forward, not looking forward to it obviously, but it's inevitably going to happen at some point, which is when we're talking about putting all the cars and electricity demand of making all the cars electric, and then adding them onto a grid that is struggling to handle people's air conditioning, what's going to happen with that? We are already beginning to see this rationing of charging. Charging stations for cars are beginning to be turned off in certain times because of energy rationing.

So now your car is unusable for certain amounts of time because of this. And that's just more and more of this, less energy, more expensive energy, basically more poverty, more energy poverty reflected [00:50:02] in overall poverty because energy is in everything, energies, the essential ingredients that goes into the production of every single good.

So everything is becoming more expensive. We're just becoming poorer and people are normalizing this because the science is coming up with all kinds of new stories about why this is good for you. It's actually good for you that you just stay home and not move. Who needs to move anyway?

Jeff Deist: Can you imagine the population growth in the United States, for example, in the desert Southwest and the hot humid Southeast and south Florida without abundant cheap 24/7 air conditioning, it would be a different world.

Saifedean Ammous: Absolutely. And this is why the hottest areas in the south in the U. S were very sparsely populated before air conditioning. Florida, and then Vegas would not be where they are today without air conditioning.

Jeff Deist: You've touched on this, but I want to just wrap [00:51:02] this a little tighter, you've talked about how hydrocarbons are so important to our development, to our wellbeing.

They can't they're irreplaceable, but give us your quick and dirty reputation of carbon hysteria. Why should we not be worried about sending hydrocarbons into the air and burning fossil fuels.

Saifedean Ammous: I think the case here is first of all, the onus of proof is on the people who are telling us to give up on essential life technology.

So I think the argument is two-pronged. On the first hand, we see that without electricity, when we see how the quality of life deteriorates in very serious ways, we're not just talking about, let's have Americans consume a little bit less cheap plastic crap that they don't need from China.

We're talking about life expectancy dropping by half, and we're talking about health and basic wellbeing and basic security being destroyed [00:52:02] and vulnerability to the elements, vulnerability to rain and cold and heat. All those things, we protect ourselves from them with abundant energy.

Energy is absolutely essential and vital. And if we were to, take a place like the U. S. Let's change the average consumption of energy for the average US citizen to make us similar to the average Kenyan, that's going to mean massive death and destruction of in The US, there's no way around that.

There's no way you can change that. It's going to mean a lot of deaths. The population is going to collapse, like a place like New York is not sustainable without enormous amount of energy. So there's a very high cost that comes with reducing our energy consumption, which carbon hysterics, as I like to call them, don't ever discuss.

They just think, we just pass along, then everything switches to solar and wind and everything is fine. But on the flip side, We need to look at what is it that is actually going to happen. If we consume [00:53:02] more energy and we produce more carbon dioxide. So what happens if we were to 10 X, our carbon dioxide emissions, which I think would be an enormous boon for humanity.

I think humanity should have 10 X, our carbon dioxide consumption production. And I think that would be great. If you want Africans to have living standards of Europeans, if you want the 5 billion poorer people on the Earth to have the standard of living of the 2 billion richest people, that's gonna mean something like they're going to need 10, 20, 30 times as much energy consumption, which is inevitably going to come from hydrocarbons.

Of course nuclear can play a major role in this, but nuclear is not a replacement. A lot of people like to take nuclear, I think of it as a kind of a cheap cop-out, that oh fossil fuels are bad, we should just move to nuclear. Nuclear is great and we should definitely have more nuclear, and it's going to help us 10 X our energy consumption, [00:54:02] but it's no replacement for fossil fuels.

We still need fossil fuels. We can't build nuclear plants without having fossil fuels. And we, even if we don't need the energy consumption for say energy generation, if we have nuclear plants for every little town in the world, we still need fossil fuels for mobile applications for cars, for transportation.

And we're very far off from a potential where we could get rid of them for transportation. And even perhaps more importantly, we need them for the materials. The vast majority of the world around you, everything that you use is manufactured from fossil fuels, plastics, and rubber, and all kinds of things.

They come from fossil fuels and we need them and in all kinds of applications. So we're going to be consuming a lot more fossil fuels. If you don't want, there's no alternative around it, if you don't want mass starvation, if you don't want people to get poorer, we're going to have to consume more and we're going to have to emit more carbon dioxide.

So what is going to happen? The [00:55:02] problem is, if this was an actual scientific theory and not an insane hysterical cult, the way that a scientific theory would work is somebody would present you a very clear testable hypothesis, which says, if we increased carbon dioxide by this much, then we're going to win.

X is going to happen. And that X would be very precisely explained. And then we could actually see over time, we could falsify these predictions. We can see that. So we'd have a clear statement that says, if we continue to consume this much energy and we're going to produce this much CO2, and then that much CO2 is going to translate to this much sea level rise or that much temperature rise, or this much collapse in the Arctic.

But the carbon hysterics don't do any of that. The carbon hysterics look at things that happen. It's exactly like which doctors do, you look at things that already happen, and after they happen, you tell me this happened [00:56:02] because you did that.

You didn't get me enough money. That's why it didn't rain enough this year. That's why it rained too much this year. So if we get flooding in Australia, that's because of climate change. If we get droughts in Australia That's because of climate change.

If it's too hot, it's climate change. If it's too cold, it's climate change. The reality is we have tens of thousands of weather stations all over the world taking readings of temperature and rainfall and humidity and all kinds of things every single minute of the day. So every day we're adding new data and it's just every data set will have a maximum and a minimum and we'll have extremes and you're going to get outliers.

And every day you're going to get records. You're going to get the highest temperature in Mongolia. You're going to have the lowest rainfall in Brazil. And every day they're just going to be there. One day there's going to be the day in which it rains the most in Brazil. So without an actual clear theory, we're just doing [00:57:02] pseudoscience here, which is if it rains too much, it's because of climate change, if the rainstorm comes it's because of climate change.

So there's no clear theory that any of these people will present about what is actually going to happen. And we're stuck in this world where everything confirms their theories and nothing can deny it. And this is really the key thing. I'd like to ask one of these hysterics, what weather phenomenon would falsify your worldview?

What would it take for you to admit that, all right, there is no problem. Look, there's going to be floods and there's going to be hurricanes and there's going to be droughts. These things have always existed. We've got thousand year old books that talk about floods and droughts. These things have always happened.

We're going to get years in which it rains a lot. What precisely needs to happen from these things in order for you to think, all right nope, I was wrong, carbon dioxide is not a problem. And you'll never get this from any of those people. And that's because it's not a science, it's an insane [00:58:02] cult.

They operate in universities that get fiat funding from above. They don't have to approve anything true. They all sign off on each other's research funding proposals, and they all agree that they need more funding. And so there's nothing, and of course there's an enormous incentive to magnify the problem, because the only way that you get funding in fiat academia is if you're dealing with a serious problem. If you go and you write oh well I've looked into flooding in Australia and I've found out that flooding in Australia is just, what's always been happening, or I've looked into the population of polar bears, and I found out that all the bears are just doing whatever polar bears have always done, and the population is largely unchanged.

You're not going to get funding for the next research grant. But if you say, oh no, polar bears are going extinct, and it's all because of climate change and we need another $3 million grant to go and study the polar bear population, [00:59:02] you might get it.

So the incentive is there for them to be hysterical. And there's no accountability. There's a beautiful quote I read, which I mentioned in the The Fiat Standard, which is in fiat academia there's no cost to being wrong. You're never going to face any consequence for being wrong in academia.

You can cry wolf million times, and you're never going to have anybody walk up to you and say hey, you've cried wolf a million times, maybe you shouldn't have your job, or maybe you should lose tenure, or maybe you should go from being an associate professor to an assistant professor because you've cried wolf a million times.

This has basically never happened. There is no cost to being wrong, there is only a cost not getting published. And so the important thing is to just get published, and the way to get published is to over sensationalize your findings.

So there is no evidence, there's absolutely no convincing evidence that CO2 is a control knob for the [01:00:02] temperature of the Earth. This idea that this massive 12,000 kilometer diameter ball hurtling through space around a much more massive giant fireball of plasma, the temperature of this Earth is regulated by how much CO2 exists in the atmosphere, is completely untenable.

Historically, we've had enormous variations in the temperature of the Earth before industrialization. We know for sure for a fact that trees used to grow above the current tree line and near the North Pole. So there's a limit near the Arctic where beyond that you don't have any trees that grow and the land is dead.

But if you dig inside, if you dig deep, you'll find tree fossils. Trees used to grow there. So there was a time in which what is now freezing used to be warm enough to allow trees to grow. But that has changed. We know [01:01:02] historically the climate has definitely changed. We can argue about the datasets and how accurate the people's past reconstructions of temperatures are, but we know that the climate of the Earth has changed significantly over time without humans having any kind of contribution.

And there are many more obvious things that can affect the temperature than the carbon dioxide. The Earth's precession, just the degree to which the Earth is tilting in its orbit around the sun can affect how much of the Earth's water versus land gets sunshine.

All of the stuff that's between us and the sun, all of the clouds and all of the things that can intervene between us and the sun, they can affect the quantity of sunlight falling on Earth, and that's going to have a much more enormous impact than anything we can do. So it's there's an enormous number of things that can affect the climate of the Earth and the idea that this tiny little essential [01:02:02] trace gas, which is essential to all living things, and which exists in the atmosphere.

This is something they don't like to talk about much is, they like to talk about how the level of carbon dioxide is rising, but we're currently at 420 parts per million. So out of every 1 million particles of the atmosphere, 420 are carbon dioxide. Carbon dioxide is a trace gas.

So to think that this entire giant ball that is the Earth is having its temperature regulated by these tiny particles of CO2, I think is just completely nonsensical. I can't dismiss the idea that it can have an effect on temperature, perhaps it does. But I cannot possibly find anything that could convince any reasonable person that there's a direct relationship, that it's a control knob, that if we up our CO2, we're going to [01:03:02] make the Earth warmer, if we reduce our CO2, we're going to reduce the Earth temperature.

So that's really the main argument. The main argument is just there's no evidence, but there's a further aspect of it, which is an argument that very few people are making, and I think I may be the first one to make it in my book, which is a result of this insane natural experiment that we had with the COVID lockdowns in 2020, in March, 2020, when the world was taken over by another insane hysterical cult with a lot of overlap obviously in terms of the members, which decided that to defeat the respiratory illnesses, we need to destroy the global economy and shut everybody down in their house and prevent them from going out and seeing the sun, which is what is most essential for people to fight the respiratory illness.

We had an enormous global shutdown of aviation and of cars. Everybody's car was was sitting [01:04:02] in their garage. The vast majority of airplanes weren't flying. And a lot of industrial stuff was put on hold, a lot of jobs were suspended. So a lot of heavy energy consumption was forestalled.

The astonishing thing, and I mentioned this in my book, The Fiat Standard is if you look at the trend for carbon dioxide emissions, and for atmospheric concentration, you don't notice any kind of dent in the trend that we've had over the past centuries. It's just that there's always this seasonal oscillation, but overall is just climbing in a very regular ma manner.

I'm 100% confidence that CO2 is not the climate control knob, but it's looking increasingly like humanity are not the CO2 control knob. Us burning fuels is not what is determining the concentration of CO2 in the atmosphere. [01:05:02] I think the onus of proof on people who want you to think that we are the ones determining the degree of CO2 in the atmosphere has become extremely difficult because we did have.

A very significant shutdown, which gave us a natural experiment. That's what science is about. We've got an experiment. And in the wildest dreams of the carbon hysterics, we would get something like that. We would permanently suspend aviation, stop people from flying and everybody gets on zoom, everybody stays home and we save Earth from that.

We did that, and it did nothing to CO2 emissions. And of course it did nothing to the weather. The weather didn't get cooler because we stopped emitting CO2, but even CO2 concentrations didn't change. So I think the case, the idea of a climate crisis is just completely untenable.

It's complete fiction, ther is no crisis. The actual crisis [01:06:02] is the fact that billions of people are being denied their access to cheap plentiful, reliable, essential energy sources that can make their lives enormously better. And they're being denied it because of an insane cult of hysterics who think they can control the temperature of the Earth.

It's absolutely astounding.

Jeff Deist: If I could just jump in real quick there Saif, cause I've done some work on this too, that I think what our listeners need to know is that, because a lot of times you'll get like the sort of Martin Bailey technique where they'll say, oh look at CO2 is a greenhouse gas, this is basic chemistry.

You can do this in front of a classroom, do a little experiment. But in terms of these models that are predicting catastrophe, it's not the direct, oh you increase CO2 by this much in the atmosphere, how much more heat is retained. That isn't driving the catastrophe, those results, those scenarios, you have to have positive feedback.

Where, oh, there's a little bit of direct warming and then that causes [01:07:02] this to happen, and then that causes this to happen, and the models all disagree with each other on whether that's going to happen or not. As of a few years ago when I was looking at it, someone literally said, yeah the climate models right now, we don't even know what sign to put on clouds.

Meaning like they don't know if more cloud cover makes the Earth warmer or cooler because there's two, reflects more light, but then retains more heat, that kind of stuff.

Saifedean Ammous: Yeah.

Jeff Deist: So it is not just, like I say, so a lot of times when people argue online and the people who say hey follow the science in this context, they make it sound like this is basic chemistry, when no it's not.

The argument relies on a bunch of things that are very complicated. And like you say, it's predicting the results of a chaotic system 50 years in the future, which is a huge act of hubris.

Saifedean Ammous: Absolutely. And you can demonstrate the greenhouse effect in a laboratory, but to extrapolate from a tiny little box that you have in the lab to the entire planet, 12,000 kilometer diameter ball hurtling through space at 30 [01:08:02] kilometers per second, is insane.

The complexity involved is enormous. And in fact, a little tiny tidbit, it was really climate modeling that was my gateway drug to Austrian economics. I was one of those people. I was trying to model the climate and I was trying to figure out what would happen if we replaced fuels or some extent of American fuel consumption with biofuels.

How does that go and fix the weather? And it was really trying to answer that question honestly, trying to really approach that question and try and think how's this going to change CO2 and how is the increase in CO2 or how's the decrease in CO2 going to affect the climate and the weather.

When you start thinking about this, and you go down the rabbit hole of reading Hayek and then you start reading Mises and Rothbard and you realize, yeah this is an insane [01:09:02] pseudoscience. The complexity involved is beyond our ability to calculate, and of course it's ultimately impossible to calculate because we're talking about humans acting. We're not talking about lab rats that we can experiment on, we're talking about humans who are going to face incentives, and aren't going to do things.

So my vivid intro to Human Action, the way that I was doing it, the way that I really understood this before I read Human Action and what drove me to read it was all right. So they passed the law saying we need to have more biofuels or whatever.

So they subsidizing buyer bio-diesel in particular in the European Union. And that was well, we're going to reduce 5% fuel consumption, gasoline consumption because we're going to replace it with biodiesel. And then in Indonesia and Malaysia, they start burning down rainforests to grow the crops for making bio-diesel.

[01:10:02] So whatever 5% reduction may have happened from CO2 in Europe is a tiny little rounding error next to all of these enormous rainforests that got burned in order to give Europeans their biodiesel. So you're dealing with human beings ultimately. They act and they shape reality, you can't just model it like it is a lap.

You can't treat them like they're just lab rats or particles in an experiment, these are human beings who act, and when you switch economic incentives in a certain way, people are going to find a way that maximizes their wellbeing and they're going to do all kinds of things. And carbon dioxide is an essential part of life.

So everything that we do has an impact on carbon.

I think one of your points here is that even if you believe all of this is happening in harmful, and even if you believe the [01:11:02] environmental progressives are well-intentioned, those people still fall under the same problems of central planning that for example, bankers and politicians fall under, there's no difference here.

Exactly, exactly. And so even if you believe all of that stuff, all right, so you really think government can just pass a law and change the temperature of the Earth? It's just the amount of logical leaps that you need to make in order to go from, all right, we pass this law, we switched to electric cars and then we stop consuming fuel and then fuel consumption declines, and the CO2 declines.

And then the weather is going to become more pleasant or we're going to stop getting droughts or floods or all that stuff. It's just so complex and the chains of reasoning that you need to have there are so elaborate that, and of course the ability of governments and central planners to dictate this is obviously unworkable.

And this is of course, [01:12:02] even if you agree that all of the things they talk about are correct, you can't possibly make the case that this can actually be implemented in any reasonable way.

Jeff Deist: I want to mention to our audience, you actually have a paper published by a journal at Columbia in 2015 called Energy Systems and the Knowledge Problem, the Case of Biofuels.

And I guess it's about the energy mix that would emerge spontaneously. In other words, what about coal? What about gas? I believe that's paywalled, I'm not sure if it's out there for free any place. Is that related to your PhD topic?

Saifedean Ammous: Yeah, this was basically the part that I had to take out from my PhD in order to graduate.

So initially I submit the PhD and then when the advisors finally got around to reading it the night before the defense, they realized no no no, this is heretic, this is unacceptable. You need to add more numbers and formulas and you need to get rid of all the Austrians. So I took off the Austrian [01:13:02] part and added a bunch of irrelevant numbers and graduated.

And now I have a completely unreadable PhD dissertation, maybe not completely. But you might find perhaps a little bit interesting, but I think the interesting part I took out and made into this paper, I believe it is available somewhere. I think it is, I haven't looked it up in a while, but I'll send you a link to post in the show notes.

This was basically as I tried to do this modeling, and then I first started off with reading Hoppe and then Hayek, and at that time I hadn't really gotten into a lot of Mises. I think it was mainly Hayek, and it was from the perspective of the knowledge problem.

The idea of the complexity of the calculation and how impossible it would be, and just arguing, trying to communicate the point that the energy [01:14:02] mix is not something that governments can dictate. There are seven, 8 billion people around the world, and every one of them every morning wakes up and makes choices about what they want to consume.

That gives signals to millions of producers around the world who produce everything from firewood to natural gas, to nuclear plants. All of those signals go to those people and they produce, and then you get a statistician who tries to aggregate all of this stuff and put it into a neat table that shows, oh no, we have 24% natural gas and 22% oil and only 1% solar, and 1% wind, what we need is to up this, that one.

And they think of it as if it's just something, just because you were able to produce this nice glossy graph or a pie chart which shows the distribution, then you can just, just like you do it on your software, where you change [01:15:02] the values in the pie chart, you could also do the same thing on the Earth.

We can just change the pie chart to what we would like it to look, and then we figure out a couple of policies and a couple of laws, and then the world will adjust and we're going to have the same beautiful world that we have right now, but we're going to go from a 20% gas and 20% oil to 20% wind and 20% solar.

Your life will go on, and we can just dictate this from above. And when you start seeing how it actually works, it's all full of things similar to that example. So let's reduce the amount of diesel in European cars and replace it with bio diesel. And then, it's like a game of whack-a-mole, the carbon dioxide shows up in Indonesian rainforests burning down. Because that ends up being the most profitable thing that you can do.

And like all profitable things, it involves [01:16:02] emitting carbon dioxide, breathing emits carbon dioxide. So good luck trying to really squeeze that balloon of trying to just imagine that you can just press buttons and decide what happens with the energy and then decide how much carbon dioxide comes out and then decide what happens to Earth's temperature.

Jeff Deist: We have taken a lot of your time safe. We thank you for it. Dr. Saifedean Ammous. We will link to your website saifedean.com where you can find Saif's books and sign up for his econ classes, which also include a group chat, which is pretty interesting. We'll link to your Twitter for people who want to follow you on Twitter.

And beyond that, just please keep us apprised of everything you're doing and we're following your career with interest. This was a great lesson for us today. It's a little disconcerting, but nonetheless, I think we learned a lot.

Saifedean Ammous: Thank you. Thank you so much, Jeff. It's always a pleasure to [01:17:02] chat to you and Bob.

And yeah, I look forward to being on again, talking about other amazing feats of fiat world.

 

Jeff Deist: Bob, Saif, thanks a lot. Ladies and gentlemen have a great weekend. .

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