The Rise of Man through the Dark and Steel Ages | The Saylor Series | Episode 2 (WiM002)

they're dominating because they're able

to

deliver force

faster harder stronger smarter

so if we ask the question what is money

money is the highest form of energy that

human beings can channel

bitcoin

is channeling human ingenuity

into making it better

and and every commodity is channeling

human energy into making it worse the

lowbrow or the

the

the historic

colloquial term is total right hold on

for dear life or just total or save

whatever and the highbrow term would be

adopt as a treasury reserve essay

[Music]

hey guys this is robert breedlove and

welcome to episode two of the sailor

series on the what is money show

so in episode one

uh we covered the rise of man

through the stone and the iron ages so

we went into

ancient technologies we talked about

fire we talked about missiles and we

talked about hydraulics facilitated by

water

and now in this episode

we're going to go a little further

in the historic arc of man and we're

going to get into the dark ages

we're going to learn

how missing one key step along the path

of civilization can actually cause us to

slide backwards and to regress

and that civilization is it's not a

guarantee right it is something that

must be

continually pushed forward and

maintained across time

and um

we'll also get into how humanity

re-emerge from the dark ages

into the

the ultimately into the industrial age

and the steel age

uh which enabled a lot of very important

technologies like cities

and aviation and railroads things of

this sort so

we're going to

touch on again

the

the benefits that are offered by

standardization uh and also the benefits

of protocols similar to the ones we

talked about

in ancient roman times earlier

and how the economic benefits

of these standardizations to one

language

or one protocol actually

accretes to civilization so these cost

efficiencies accrete to us

um in the form of being able to satisfy

wants

faster cheaper and better

and that's actually

the force that drives civilization

increases

both economic and network density for

mankind

we're also going to talk about how

violence and monopolization have shaped

the course of history

how violence has been used to extract

rents and taxes

um how gatekeepers have influenced the

course of history

and how monopolies have have developed

uh in both a natural and an unnatural

way and then we'll also talk about

packaged foods

uh how much of an influence that had on

civilization

enabling us to store energy in a

leak-proof container

and also how

mankind's

ability to eradicate some infectious

disease diseases

was such a huge boon to humanity uh in

terms of increasing life expectancy

um and quality of life overall

and again the

the general aim of this is to

construct a solid

intellectual foundation on which to

understand

the profound impact that we believe

bitcoin will have on the world

um

and

you can think about bitcoin as sailor

refers to it

as an engineering breakthrough and that

for the first time in history

we have a technology

that is able to store

the energetic life force that money

represents uh again we can think of

money

as a claim

on all other sources of energy in the

world right whether it's capital

chemical energy

kinetic energy

food energy all these types of energy

money acts as a kind of meta energy

and we've never had a monetary

technology

that was totally leak proof and that it

did not lose value over time so

hopefully by drawing analogies to these

very important innovations across

history um you'll start to have a

an emerging realization of the the the

real importance and significance of

bitcoin so with that let's jump into

episode two and at the end of this i'll

do a little outro to hopefully

synthesize some of these ideas all right

thanks

we have the rise of man through the

stone age and it took quite a long time

but we got here that's impressive

we have the roman

the roman rise

and

we saw

a sophisticated society mastering energy

networks logistics networks advanced

tools political processes

in order to

in order to dominate

their sphere of influence

and um

by the age of the antonines

around trajan hadrian marcus aurelius

those are like 100 years it's a golden

age of rome and

that's like 90 80 to 180 a.d

the average life expectancy of a roman

is

is 72.

and so if you're you've got baths you've

got writing you've got civilization

you've got sanitation you've got

aqueducts you've got roads

they've got stuff pretty well organized

some sophisticated machines

and then of course we take a a hard

left turn

into the dark ages and stuff just starts

to break down

it's a reminder that if you

that nothing is certain if you miss a

key insight

you could

waste a thousand years

and

um stuff could have happened different

way it didn't

for example

um

let's take the printing press

the chinese developed printing presses

way back 2 000 years ago

they never really thought to

commercialize them

and uh the chinese alphabet is a

pictographic alphabet and so you

wouldn't need 25 000 different uh type

pieces in order to have like movable

type and a printing press

and so they had the wrong language

to develop printing presses the romans

had the roman alphabet which is an ideal

language because you could actually

print anything with just like

26 or 50 pieces of movable type

and they had all the knowledge but for

some reason they just stare anybody

could have figured it out robert like

all you got to do is walk in your boots

through the mud and step on a nice floor

and look down

and

there's the idea for a printing press

tracks in the mud

right they had paint

they had dyes and you know they're

they're just oh so close and then

they don't hit it and

we wait until whatever 1453 or something

for gutenberg

to work this out and we're gonna suffer

for a thousand years

um it's amazing to me how

certain things can be just right in

front of a civilization and they just

won't grab them like

if you go

if you go to saint peter's square to the

vatican and you look at that uh column

that was

i think that used to be tr it's now

saint peter's column but it used to be

trajan's column

and trajan's calling was put up you know

on the

you know as a to celebrate the triumph

of trajan and his wars

and um

it's a um it's a bass relief a marble

relief of the dacian wars and it wrapped

spirals up the column

had a little staircase in the middle of

it a work of art an architecture and at

the top

eventually the roman catholics put the

statue of saint peter

i guess

uh

and uh in the ancient roman times that

had trajan statue on it

and trajan is standing there in his

imperial robes

and he's holding his hand up in the air

and do you know what he's holding in his

hand

uh i i don't know

he's holding

the world

and it's round robert

the globe in his hand

and this is 100 a.d

fast forward 1400 years and people think

the world is flat

it's like

knew the world was not flat

right and if they hadn't ripped his

statue off the column

a thousand years earlier or whenever

they ripped it off

and buried it somewhere they would have

known the world was round and it's just

it's so ironic

that you could learn and then forget

such a basic

thing right right so there is the

possibility of significant

civilizational regression

if we ignore those learnings that we've

accumulated over time

and

yeah you can go backwards and you think

well we've got it and if we do this

we're going to leap forward

into a new progressive error but if we

kill it at a pivotal point maybe people

forget it ever existed like letting that

fire go out yeah i'll tell you another

one that blows my mind

if you go to the um

museum of uh of the native american

indian

or native american in washington dc

and you walk around you see

there's an entire civilization i mean

they're pretty much hunter-gatherers

and if you want to understand how

hunter-gatherers lived i mean the

american and native americans the way

they were when the europeans showed up

in america is probably your best proxy

for

what uh what the

what the paleolithic man was i guess

but amongst all the artifacts they

gather if you walk around you eventually

find

a pottery wheel

and the pottery wheel it's a wheel and

stone

and it's

got a beautiful piece of pottery

and the sign says

glowingly yeah

native americans had very sophisticated

pottery and they knew how to mold clay

and they used this pottery wheel to do

it

and i looked at the wheel

and i think

for 5 000 years

nobody in the entire continent thought

to take the wheel and turn it this way

and roll it right

like they knew a wheel they knew wheel

was useful

i give you the wheel robert but they

never invented the wheelbarrow they

never invented the wagon there's no

rolling stock anywhere in america

incredible

and you know and so you're like think

about the consequences

of

that insight like

how is it possible that not a single

person the entire continent ever thought

they might want to turn the wheel

this way

right

but it's such a profound idea

and yet you can go a thousand years and

not get that idea

do you think there's any modern

examples that jump to mind that

something that's maybe glaring at us

in the modern age that we're ignoring or

something that maybe we've forgotten or

we're not we're no longer respecting

robert

the blockchain and bitcoin is a wheel

it's uh i can use this stuff if i turn

it this way you know

is i i take a couple of

they're not complicated ideas you know

public

pretty good privacy public private key

encryption

hashing

you know like

no one of them on its own i mean they've

all been sitting there and someone says

well what if i just

do that with it and i start this fire

and it's i rub two rubbed two sticks

together

i just never think to rub two sticks

this calls to mind your example of the

roman hierarchy as well that because

everyone knew they were being watched

right it maximized their accountability

and therefore their their performance

and competence the bitcoin network's

sort of the same you have all the nodes

and miners looking at one another's

activity to make sure everything's above

board all the time right it's

instantly auditing itself constantly in

real time and you and you could say

right the romans were healthy as long as

they kept

tension

and um

dynam dynamism and cap and this

incredible competition

in their ecosystem and when they lost it

they lost their edge

and then

you know when you look at the classic

guns germs and steel

type narratives like the europeans

they got hardened and tougher because

they were always fighting with each

other and living with your animals made

you tougher and having people come

through from asia made you tougher and

you know

and uh as soon as you try to insulate

yourself from those stressors

right then your

stabilization

forgets how to do things right

never figures it out right celeb calls

the stressors are the information right

so you're actually cutting yourself off

from the information flow that's driving

your adaptation

so one way or the other we meander

through that but it strikes me that

didn't have to last as long as it did

you know

life expectancy plunges down to 30 years

from 72 years

and in a world without technology if you

don't have

aqueducts and

sanitation and and rules like don't

bring your horse into the middle of the

village because he's gonna crap all over

everything and going to get sick right

in the absence of all those those

orderly rules

then

then you um you have just a degradation

of the human condition

and we started to crawl out with the

renaissance and

you know

what's interesting there

i think is um

if you look at all the great

cities

in the world

all the great cities grew as nexus as

the central node of an empire

so

rome was the nexus of an empire

carthage was the nexus of an empire when

they lose their empire

they collapse

the only way

you generate enough money

to make a great city

is you have to scrape a tax

off of all the energy all the commercial

value in a large

place a fisherman cast a wide net to

capture the fish that's your empire

the roman

the roman schtick was

you know pay us 10 when it comes into

rome and 10

when it goes into the next port and

we'll take 20 percent of the value added

or maybe 30 to whatever we're going to

take right

um

if you go into venice

and you look around the grand canal you

see all these palazzos they're all just

uh warehouses i bring a ship into venice

i offload my cargo and then it goes out

the back and it gets barged up and down

the canal and it gets transshipped to a

new ship

in that world each ship ran this route

venice alexandria was one trade route

venice the rome is another trade route

venice distant ball is another trade

route you're you're at the nexus

you're running these shipping networks

and of course you got to bribe the guy

in istanbul or maybe you know your son

marries

his daughter

and that's how that's how you get to

come in and out of istanbul without

getting murdered or getting your stuff

stolen

you know and eventually all the families

in venice intermarry like

you know i know you you're my second

cousin that's how we don't cheat each

other

and um

there's no way

you can't solve the traveling salesman

problem there's no way i can take a ship

from istanbul to alexandria

to venice

to rome

you know to um

uh ibiza wherever i would go

right barcelona

because

i would basically get over taxed or

extorted

in each port unless i actually was

you know

friendly right right so the way that

works is you have a hub and spoke system

and

there's always one central city

and there's always one set of families

or companies and they enter mary and

they trust each other and they just

agree

i'm going to buy wheat for a nickel or

for a dime in alexandria

i'm going to bring it to venice and i'm

going to sell it to you for 50 cents

you're going to take it to barcelona and

sell it for a dollar

or and you're going to pay and you're

going to pay a nickel and tax to the guy

on the other and

you know you're going to get your 45

cents i'm going to get my 45 cents those

guys paying a dollar these guys got paid

a nickel we can play with what's the

markup right it might be i buy it for a

quarter seller for 50 and you sell it

for 75 to the dude that sells it for a

dollar

but invariably

it's the people at the center of the

network

that are actually getting 10 20 30 50 of

all the commerce right which is all the

energy

now and what's the definition of a

smuggler

or you know that or a pirate the

definition of a smuggler is someone that

doesn't want to give me half their stuff

right

so

how do i stop that i have to have a navy

that goes to kill them

so you have the carthaginian navy

stopping smuggling so they can tax half

the stuff and that's why romans can't

carthago delinda s right is it like is

it like uh

20 the elder or or cato i forget which

one said in every speech he gave in the

senate for 20 years carthago delinda s

carthage must be destroyed

why

because two people can't shake down the

same guy of half his stuff there's

nothing left

if i take half your stuff as a tax i

can't you know it's like the tax wars

yeah yeah indians are taxing the

shippers and the romans want the money

so therefore the romans must defeat the

carthaginians

now the romans tax you then they fall

and the venetians rise now the venetian

navy controls the men

then you've got uh you know you ever go

to venice there's this great um

renaissance painting the battle of

lepanto

and the battle of ponto is when the king

of spain

allies with the pope from rome the head

of the roman catholic church and with

the doge of venice

and those three navies

fight

the uh turks

the the the invading muslims from

istanbul and they beat them

and and it's the triumph of christendom

but it gets you thinking about why why

were they all killing each other in the

first place over the med and you realize

it's because they're fighting over

control of the mercantile network

right and then the next interesting

observation is

you've heard the name the word roman

catholic church right

you ever heard the phrase venetian

catholic

i don't think so

there was a time

when the venetians

terminated the catholic church

in venice

the catholic church in the entire

venetian empire didn't terminate with

with the pope in rome it terminated

with the doge in venice and

and so

that means all tithes right

all do

goes to venice and stops

you can't have an empire

unless the person at the top of the

empire is also in control of the

religion

because if you don't control the

religion then someone else takes half

your money you see

it's all it's all about energy flow

right

and the energy is flowing

by the way

the pontifex maximus

originally refers

uh to the to the roman consul

to the head of rome

augustus caesar was the pontifex maximus

so the romans had it eventually

the um the high priest

right

so the high priest

the roman consuls were the high priest

of rome for 700 years if you're elected

general you're also the priest you run

all the religious ceremonies they didn't

separate those two

and so so the church and the mercantile

empire and the power of tax

migrates from rome

to venice

okay

when did venice start to decline

when they lost control of the of the

church

at the end of the day they start sinking

because you can't afford to maintain

those buildings

you know you can't afford to maintain

hundred story buildings in manhattan

unless you're at the center of a

financial empire right i have to

basically buy your bonds for 68 cents on

the dollar and sell them

at uh 82 cents on

cut the difference right

you know there are a lot of securities

in on wall street where there's only two

market makers

there's the one bank and the other bank

and they trade with each other

and if you're buying you're buying at

the bottom or you're buying at the top

of the spread and you're selling at the

bottom of the spread and the spread is

two percent robert

and so

if i turn over a billion dollars worth

of bonds

i'm paying 20 million dollars in

commissions

and there's a monopoly there

and the 20 million dollars is just

flowing into what it's flowing into the

building

you know and my buddy works for that

bank and i work for this bank and we

drink together and

and we just kind of joke about the 200

basis point spread

interesting so it's these groups sort of

competing to be the head gatekeeper in a

way right

but to preserve that gatekeeping it's

intimately connected to the church

control of religion i guess you might

say

so does this somehow connect

uh the the actual connections between

money and religion like even today we

have in god we trust on the us

it takes us to the reformation

by the way if you go to amsterdam

amsterdam is the city of canals it's a

big distribution if you've ever seen a

distribution center

it's

the

trucks come in one side it goes through

a very complicated set of conveyors and

it goes out the other side these trucks

come from the manufacturers those trucks

go to the stores or the locales and this

this distribution center is

uh a we a maze of conveyors

amsterdam's that but it's that for

barges before we had machines

that's what venice is

that's what every that's what every

great mercantile that's what uh they did

in every mercantile center and

when you get to

you know martin luther's time

you realize one of the key drivers is

there's

there's no way that we can rise

or or elevate our civilization if we

have to send all of our money to rome

right right you see this struggle

with throughout medieval history william

the conqueror had that struggle you see

the struggle of the of the northern

europe uh your northern european uh

german nobles and then of course it

punctuates itself with henry viii

who eventually forms the anglican church

so he can be the pontifex maximus

and if uh the church terminates with the

king of england they don't have to ship

any money

you know down to italy nor do they have

to ask permission to to change their

alliances and get married and do what

they will

it's useful to have god on your side

it's always been useful and so that

drives a lot of stuff throughout the

renaissance and it drives the you know

you can say

you can say that northern europe broke

off

from the roman catholic church for

religious reasons or you could say the

northern european powers to be created

the religion

for political reasons to an economic

reason to break off from the roman

catholic church

but either way you know

it's it's kind of a triumph of history

that everybody's forgotten that there

used to be lots of

why they call it roman catholic if there

weren't other catholics

how many different branches of the

catholic church you think there were

like

a thousand

there could have been a lot they just

kind of coalesced over time but here's

the general principle

everywhere on earth where you see a big

city

it was the center of an empire

paris london

hong kong

new york

venice rome

everywhere you and by the way everywhere

where you see a city that's fallen upon

hard times

it's been destroyed

it's empire lapsed

carthage

troy

right

you could name them on and on and on

venice

had an empire lost an empire

and that's because

you can't physically create this kind of

economic density

you go to paris and you look at

the cathedral of notre dame and you look

at how much human effort went into

creating notre dame

there are people

that are selling

postcards and bottled water in the

shadow of notre dame cathedral

making money off of tourists

where the guys

inherited the concession from his

fathers fathers fathers fathers fathers

fathers fathers fathers fathers father's

father

and if you go back 10 generations

the concession was 700 years old

okay they're living off of

off of um

the vestiges of an empire

long past

now the question is

what are the empires of the future

where they form

and that takes us really to

the steel age

you know the 19th century the

the robber barons and the like and you

can see

with shipping networks

you know those canals gave way to free

ports and eventually gave way to

container ships

and container ships totally remade

everything and they and they shifted

power to singapore and hong kong and

companies like maersk

and uh

ultimately it's a low energy it's a

componentized way to move things around

the most efficient way to move anything

on earth

is modern containers

by the way

the biggest range in technology and

servers today is containerized

software via kubernetes

and docker

which is the same principle as

put all your stuff in a container ship

and the container

goes on to a ship

they've got standard loading facilities

into a port

they've got standard

standard train

cars and standard trucks

everything standardized

and the cost of the cost and the

transparency of that was cut maybe by an

order of magnitude with that innovation

right

standardization once again all right

so what i do have a question about the

the in these empires that we've

discussed historically

ostensibly the purpose of an empire like

this is to basically

preserve the walls of the city protect

the peace

honor private property rights within

that dominion right enforce contract law

uh ensure that there's a non-violent

means for dispute resolution such such

that commerce can be conducted

uh fluidly

and i i and you you mentioned

the empires of the future it this is

something i think about a lot is that

we've always needed this monopolist on

violence

to sort of honor private property rights

within their jurisdiction

but another really interesting aspect of

bitcoin is that it's kind of it's the

first private property right

that is agnostic of government

completely right you don't need

government to enforce

the your right to your private keys it's

like holding physical gold or any other

beer instrument so i wonder how much

that plays into the the relevance of an

an empire in the historical sense kind

of going into the future

well i guess yeah traditional empires

are producing security

the number one export of the united

states is security like literally

i can i can live in miami beach and i

don't worry about someone

shooting me across you know the

intercostal waterway and if i was in

certain other parts of the world i'd

have to be surrounded by a hundred

bodyguards right so security they they

have that saying about genghis khan

they said when the mongols controlled

all of asia a virgin could have ridden

from one end of the empire to the other

with a pot of gold on her head and not

be molested

the mongols weren't screwing around

either

you intercept their mail

if anybody get anything gets stolen

anybody gets hurt they show up with an

impa with an army and they murder

everybody for 100 miles in every

direction kind of to make the point

don't f with the system right

now most of these empires they generally

provide this kind of security for their

citizens you know

not always for the

non-citizens or the aliens or the slaves

or the whatever whoever's

the underclass but but they do manage to

establish them

um

bitcoin is a security and bitcoin's

number one

its number one uh value proposition is

security

it's it's security of

of uh

energy

right if energy is

translated to money and money is

translated to bitcoin and it's stored in

the bitcoin network

you're securitizing your assets

you know in a cloud of behind a wall of

encrypted energy

and

in that regard

it provides an important right

and empowerment to the individual

it hasn't quite addressed the physical

security element right

when we actually come up with something

that will surround your person with a

field

of

of um

i guess uh i guess repulsive energy

you're you know

you're almost filled

yeah right then you will accomplish the

same thing in the physical domain

that bitcoin does in the virtual domain

but it's

but

but having um

if i secure your life force

right energy money

is energy

is life force is money is power

if i secure your power

that can be converted into into physical

security

either by allowing you to travel away

from the

we have the example

uh nazi germany in the 30s

all the jews had their money locked up

in germany and so

the way the system worked is is they

operated as bankers and they allowed

people to launder their money out of

germany and they would take a haircut

10 20 30

initially then 50 then 70 percent than

90

until pretty soon they were it was like

a 90 haircut to get your value out and

so

consequently um

people didn't want to leave

right

and so if you if you if you don't have

your monetary power or your assets

secured virtually

then your physical security is always at

risk because you can't leave nor can you

protect yourself right

you can't you can't pay for anything to

protect yourself

and you can't get out or you can't pay

to get out

you know you would think they're

probably

one of the most useful

or common or not

one of the compelling use cases of

bitcoin would be if i'm a refugee trying

to flee a war zone

because it's either that

or gold

and the problem with gold is

there's a lot of people with guns

they're going to take it from you

at least with uh bitcoin

you could pay the guy with the gun half

the money

when you started and the other half when

you got there

and the worst you can do is blow your

head off but he's not getting your money

whereas if you got gold he just blows

your head off takes the gold

yep so

so yeah i think it's second order

beneficial to physical security in a lot

of different ways and it makes the world

better but it's first order beneficial

to economic security

um

[Music]

if we uh if we think about the steel age

these rail networks are are are another

network to deliver

deliver

energy

faster

stronger

smarter

harder uh of course

at the at the nexus of every

transportation hub there's an economic

center so rail heads

uh if the great city isn't a port it's

at the center of a railroad juncture

and when you bring in a lot of times

sometimes they

at the center of the rail juncture you

can tax all the trains

so if uh goods come from spain and to

paris and they're going to germany

the french get to take tax right there

in paris the rail heads became a nexus

the other fascinating thing about the

railroads is they became really

instrumental to logistics movement of

armies and and they drove economic and

political power

and one

interesting example is

winston churchill when he was like 25

he wrote a book called the river war

before he was famous for anything in

fact he was quite the adventure he went

off uh to fight in

the war in the sudan

under kitchener

and uh the entire book is about the

british um

working to to win a war in the sudan and

they had to had to take khartoum and

it's like going a thousand miles up the

nile maybe 1500 miles up the hill across

desert

and you know and why would they want to

do it very interesting question but

here's the bottom line

the entire outcome of the war comes down

to the question can the british build a

railroad to cartoon

and if the british succeed in building a

railroad they win

and if they can't build the railroad

they can't provision the army and they

can't move their heavy equipment and

they

lose the war

the entire war it's called the river war

but it'll be called the railroad war

it's just about building a railroad

across a desert and

at the end of the day the

as soon as the railroad arrived a bunch

of guys with explosives and gatling guns

showed up

they

you know devastated everybody and it was

not a fair fight at all like gatling

guns versus guys with spears and musket

loaders and

it's kind of very unpleasant

you know and if you read it through the

modern view

you know it doesn't necessarily leave

you a good taste of your mouth but

it's a reminder that a lot of times the

difference between winning and losing

and living and dying is d of railroads i

got i think there's a similar story

in the american civil war

if you look at the way railroads

functioned and

even the conquest of the continent right

the union pacific railroad and

once the railroad crossed the continent

you know

manifest destiny

states was going to dominate without

that railroad

was it a thousand times more expensive

to move stuff over land right right

right right

like

you know google is um they're very good

at saying we don't do anything else

that's going to be 10x or 100x better i

mean so that's a silicon valley

trope

you know don't bother to do it unless

you're gonna have a breakthrough that's

100x

and well all these things were 100x

better but a railroad we take for

granted it could be

i give you five tons of stuff carry it

from new york to california

count the amount of energy it's going to

take you now put it on a railroad car

try again

right you think that's not faster and

stronger thousand times faster

thousand times stronger something like

that orders of magnitude

and that takes us to john d rockefeller

right and before standard oil comes

along

people are actually

hunting whales they're getting in wooden

ships chasing around the ocean to kill a

whale

boil down his blubber make kerosene and

burn a lamp

no not a very efficient way to gather

energy

you know so then along comes oil and oil

is a thousand times more efficient way

to get energy and what standard oil was

was

it was first an energy producer but it

was also an energy storage device

is a battery

right because the best way to store

energy is put it in a tank

it was also an energy network

standard oil

they bought up all the they didn't

actually buy the fields they bought the

refineries

they refined the oil they stored the oil

they bought up all the tanker cars they

bought up all the tanker ships they

locked down all of the networks and they

basically had an energy network

they actually had guys

driving around with carriages to deliver

you know their energy to every single

retail store they had retail

distribution

they would even give away the furnaces

to sell the energy they did a jeff bezos

you know amazon prime

people think jeffy is invented he didn't

invent it if you read the you know the

biography of john d rockefeller