[00:00:00] Jacob Shapiro: Hello, listeners. Welcome to another episode of Cognitive Dissidence. As usual, I’m your host. I’m Jacob Shapiro. I’m a partner and the director of geopolitical analysis at Cognitive Investments. Joining me on the podcast today is Dee Smith. He is the CEO of the Private Intelligence Agency Strategic Insight Group.
I’ve met Dee. I’ve known him for a couple of years now. We’ve done a bunch of interviews on Real Vision and I finally decided to steal him off of Real Vision. And Dee was generous enough with his time to come on the podcast and give us an hour plus of his time. I also want to thank Dee. I was 15 minutes late for this recording, running around like a chicken with my head cut off, putting out a fire here in New Orleans.
That is not interesting to talk about. Maybe I’ll put a parenting corner or something like that on the podcast in the future But thank you d for being patient with me, even though I was 15 minutes late And staying for over an hour. I thought it was a really excellent conversation.
Listeners, if you want to talk to me about what we do at Cognitive Investments, anything about the podcast in general what’s going on in the world, hit me up at jacob at cognitive dot investments. I am at your service. Otherwise hug the people you love cheers and see you out there.
All right. D we’ve been on real vision enough times that I thought we should say Screw it. Let’s do it together and do it on my podcast. So thanks for making some time to come on and thank you for listeners. It all sounds perfectly produced and you think we’re all perfectly ready here ahead of time.
Like D’s traveling around New York, doing client stuff. I’m sure I literally had to rush to the middle of a busy street in New Orleans to get my wife a sign so that she could pick up somebody. It’s all a mess, but we’re all here and we all made it. So it’s good to see you. Good to see you.
Thank you for having me on I thought we would pick up where we left off from our last real vision conversation because I’m not sure that a lot of my listeners had a chance to talk about it and The theme, as the theme of every single macro or geopolitical discussion these days, seems to be, rising uncertainty, and rising volatility, and rising risk, and the world is ending, and everything is terrible.
And maybe it’s the contrarian in me, but I just chafe against all these things, because I’m not so pessimistic. I think that things are actually better, and I also find that it’s a self sacrifice. fulfilling prophecy and that we’re in a media environment where, you say doom and gloom to get the clicks, but if you’re giving the positive story, people say that’s what they want, but then that’s not what they’re clicking on or scroll when they’re doom scrolling at night.
Like they want the, Oh my God, the world is ending sort of validation. But that’s not to say that there aren’t things happening right now. So we’re recording on Friday, April 12th. I wanted to, really just start at a high level. So what do you think of the rest of the year for 2024?
Are you, are there things that you’re worried about? Are there things that you’re concerned about? Do you think that things are going to get better from here? I don’t know exactly how to frame it, but I’m just wondering about your 2024 outlook and maybe we can start there.
[00:02:40] Dee: Sure. I would start by saying I agree with your observation that people are attracted to negative news.
And if you think about Our evolutionary background, when you were a proto human hominid on the Savannah, it was always better to believe that a movement in the grass was a lion because he, so the people who saw the movement in the grass as a lion or the ones who survived, it’s very simplistic here, but, and they passed on that hyper awareness for danger that We all feel and then, this as time’s gone on, people like being scared.
That’s why horror movies and, all those kinds of mysteries and, they, for some reason we’re wired that way. So I agree with you. And I think you can. definitely over correct in that direction of it’s, it’s all doom and gloom. And and, as far back as the ancient Greeks, there were people who, you know, and Socrates among them who said, the next generation is just awful.
And what are we going to do? And, oh, tempore. So it’s all that stuff is very, much a part of human nature and always has been having said that. We are, there are times that are quieter and more less volatile, and there are times that are more. And we are living in a time that is more.
And that is, is absolutely correct, I think. And now. volatility brings both opportunity and risk. And it’s, if you have too much volatility or too much too many things that are uncontrolled, then the opportunity goes away. And an example of that would be a nuclear war. That’s not going to do anybody any good, but.
at several levels below that, which is where we are now and hopefully where we stay. There is enormous risk and there is opportunity. But the thing that I would say impresses me the most, and I’m hearing this from people in here in New York for the first time in a clearly articulated way because I’ve usually been saying it to them and now they’re saying it to me, is that, The level of uncertainty and the coalescence of multiple strands of uncertainty has reached a point that it’s affecting their business.
And then people are having a hard time performing to budget, for example, because there’s so many, X factors, exogenous factors, torpedoes from left field and all that stuff that they can’t project. The future in the way that they could or felt that they could in, let’s say, the late nineties, early two thousands.
The the financial crisis put paid to a lot of that, but it hasn’t settled down since then. It’s become more and more pronounced the amount of of. Just volatility and uncertainty. The thing that I worry about is the connectivity of things and how we created, one of the great Accomplishments of late 20th century science was understanding complex systems and how the more complex a system is, the more unpredictable it gets.
And everybody knows about the butterfly effect, but there’s a lot more to it than that. And so as these things Become hyper complex. And they now call them hyper objects. You don’t know what a change in one place is going to produce in another place. And keep seeing examples of this emergent phenomena, cascade effects, all these things that, we now understand the mathematics of it and the mathematics of it is very uncertain.
But but We are experienced. We’re living it. And I think that is a direct result of complexity. Now, so what do I worry about? I worry about single incidents that can cause very large cascade effects. We saw an example of this in a couple of years ago when that tanker ran aground and blocked the Suez Canal.
We’ve seen another example of it now in the same part of the world with the Hootie attacks on on on, the ships in the Red Sea. We saw another example in the not only the invasion of Ukraine, but the effects of the invasion of Ukraine on up in a potash and various components that are critical to fertilizer and what that then began to do to agriculture and food prices.
And that’s example of Exactly the kind of thing I’m talking about these in order effects, second order, third order, fourth order effects. And those are literally technically mathematically unpredictable because it’s what they call deterministic chaos. And I worry about the big things, we’re told here on this Friday that an Iranian attack on Israel is imminent.
And we don’t know what that is. Would be and we don’t know what it would mean. And we don’t know how Israel would react and how the surrounding states or indeed the U. S. And Western Europe would react. So that’s a big event. But what small event is occurring today that we may never hear about, but it may three months from now have created an enormous cascade effect.
I guess what I worry about is the nature of the world that we’ve built. That’s so complex that it becomes hypersensitive and unpredictable.
[00:08:16] Jacob Shapiro: Yeah there’s a lot in there, and we’re going to break it all apart. I’ll make a joke about the Iranian attack, and then I want to stay at the conceptual level, and maybe we can get down to Iran.
Because Iran is one of the actors, I think, that injects the most uncertainty in the world system right now. But the fact that the Wall Street Journal is claiming that, Calling an attack in the next 24, 48 hours. I actually take some comfort from, because that tells me it tells me one of two things.
It tells me either the Iranians are really shitty at what they do, or more likely they want everyone to know that they’re about to do something so that they can take the action and they can say that they’ve done it, they’ve beat their chest, but there’s no escalation and it’s not a surprise to the system.
So I’m hoping that’s the right interpretation of that particular event. All errant missile instead of hitting an empty field in the neck of. hitting a population center in Tel Aviv and we’re off to the races. So I take your point there, but
[00:09:04] Dee: and all it also takes is one. person who overreacts to something and then triggers that.
And that’s, that’s the thing, we’ve got these systems that are so it’s in, in chaos theories called sensitive dependence on initial conditions. And initial means just the start of anything. It’s not the start of, some designated point, one person, one thing, one, like the Aaron missile or somebody who is just really unhappy.
And fires at something they shouldn’t. And those are so just to buttress your point. Yes, I agree with you. I agree with you. Okay, go ahead. Sorry.
[00:09:40] Jacob Shapiro: No, I’m happy to have agreement. But I’ve been doing some research. And I think I know at least how you’re going to sketch the answer to this.
But I want to dig into this idea of complex systems a bit more specifically because I’ve been rereading Hans Morgenthau’s Politics Among Nations for separate research reasons. And by the way, listeners, I get questions all the time. What should I read if I want to know more about geopolitics? Hans Morgenthau Politics Among Nations is the number one book that you should probably read from like a Conceptual what begins the feet like that’s where I would start and then it’ll open up all other avenues But if you haven’t read Morgenthau like you’re probably behind the curve if you’re trying to talk about these things, but he talks about the shift from multipolarity before World War ones and World Wars one and two and into bipolarity with the Cold War and the US Soviet conflict.
And he makes the case that the bipolar world is actually much more volatile and much more uncertain than the multipolar world was because you have the risk of moral absolutes forming. You’re either completely with the United States or you’re completely with the Soviet Union. There’s no gray area.
There’s no pragmatism. There’s no room for Machiavelli’s prince deciding one day I’m going to do this, but then if that power gets too strong, I’m going to switch over here completely unexpected and support this other power. And then when he gets too strong, I’m going to do something else completely different.
And he argued at least in the book, in the section that I’m reading right now, that multipolar systems are actually a little bit more stable. Now, of course they can break down. They, the multipolar world did break down in world war one and brought us a whole bunch of horrors. But part of his point was that.
When you have a more complex system and you have different actors that are balancing against each other, it actually might hold the actors in check. Because they have to be worried about different things that maybe they weren’t worried about before. Or there’s more room for maneuver. Whereas the sort of, you’re with us or you’re against us.
It’s us versus China. It’s World War III. Like these narratives and constructions leave you no room for maneuver. Something happens, and then it’s a cascading effect that goes on to the next. I wonder how you would respond to that, because in some ways it’s a shift from what you’re saying that actually, complexity can be a good thing.
It can even be a stabilizing thing, and that maybe what is causing the whiplash for people is not, The complexity itself. It’s the shift from one framework to another, but actually, objectively speaking, the complexity helps. I wonder how you would respond to that.
[00:11:55] Dee: Yeah, I know that he says those things and I would push back on it a bit for several reasons.
First of all, we didn’t actually get to World War Three and we’re closer to it now than we were during the whole Soviet U. S. standoff. On the other hand, that balance of power. system that was in existence from, the late 19th century through the early 20th where everybody was, moving little pieces and trying to rebalance and trying to get an advantage.
That actually led to World War I and World War II, which I see as bookends of a single war. That’s a whole other discussion. But, nevertheless, it did lead to World War I. And and it was a hyper complex environment. Very much like today. It was a globalized economy. An early, it was not the first, the first was really in, in the 18th century with the, in the Baroque era but that’s another argument too, but I think that these things when you have actors who are trying to jockey for power.
Now, maybe if you just have one like Machiavelli’s prince, that’s what, but when you have multiple points of uncertainty, they interact in multiple ways that are not predictable and are more unpredictable. And the other thing about it is that these this was studied by A scientist named Per Bach, B A K.
And he started studying sand piles, believe it or not. And what he found was that you can keep adding a drop of, a grain of sand at, at a steady rate to a sand pile and it’ll grow and grow. And then one grain, when it reaches what they call criticality and half the thing collapses.
And, that has proven to be a universal. trait, things don’t change slowly. They really admit, they at least as often change in what they call mathematical catastrophes, meaning sudden change from state A to state B. And when you have a complex system, you don’t know where, you don’t know which grain of sand is going to produce that.
And, you have these cascade effects. Such and such happens. I need to do this and somebody else will, you He did that. I need to do this. And so you get this. And this is, as I say, it’s been studied mathematically and you get this enormously unpredictable and rapidly escalating.
Kind of situation and I think he was certainly writing before, that was as well understood as it is now, but but I just it’s not how I see the world working now. I could be wrong. But it’s just not I see it, I see complex systems as, I see it through, I have a, partly a science background, and I’m very interested in that kind of thing.
And I see those things. I see the rise of complexity theory as a real breakthrough and and I think that it’s given us a lot of insight into things that we didn’t have before. We could talk about fail. That’s another fascinating thing. That’s not quite relevant to this, but but it’s it’s just a, it’s an accelerant and it’s a volatility creator.
So that’s my response to that.
[00:15:06] Jacob Shapiro: Yeah, no, it’s also a mark of how much political science has changed. The idea of chaos theory and probability theory and advanced mathematics. is not what Hans Morgenthau probably conceptualized as political science. Whereas, today the field has changed in significant ways.
One, one sort of way to pick at this is obviously when Morgenthau was writing nuclear weapons were around but they were new. It wasn’t something that had been established previously, and it seems to me that the biggest difference between if we are headed towards a more complex world and a multipolar world the biggest difference to me from the previous time this happened in the late 19th century is there are nuclear weapons now, and I wonder if you think that can a conflict like World War I happen in a world with nuclear weapons?
Because there was no sort of deus ex machina hanging over these warring states in Asia and in Europe that were jockeying for positions. Whereas now, if you had that kind of threat, imagine if there was a German invasion of France or something equivalent in today’s environment, and one of those countries had nuclear weapons, like the nukes would get fired and the war wouldn’t escalate to that position.
So in some ways it makes. the worst case scenario scarier, but it also makes the worst case scenario maybe less probable because it’s all about mutually assured destruction. So how do you work nuclear weapons into your framework for thinking about this? Because I would think it’s both stabilizing and yet deeply unsettling at the same time for you.
[00:16:26] Dee: I think you’re exactly right. I think that’s a really important point or set of points. I recall seeing, and I have not tried to go back and find this, but I would like to if it’s even available anymore, but I recall seeing an interview with a Soviet general, this was after the fall of the Soviet Union, back when everything was open and people could interview people and so forth.
And what he said was really interesting and chilling. And he said, I’m of the last generation. Who has actually walked the field of a nuclear explosion. And when we’re gone, nobody’s going to know what that was really like. And so it’s going to become much more likely that it happens again. And It’s a really good point.
And and I think that is, in fact, the case. That’s where we are. Nobody, nobody in living memory, or they’re so old, they’re certainly not in active, activity in politics or military or anything. So I think that’s one aspect of it. We just You know, it seems to me that these things that you have these one, one factor in these relatively quiescent periods in history is that you have people who’ve gone through the intensity of war and realize how horrible it is and then and just resolved with never going to happen again.
And of course, what that means is it never happens again on their watch because they’re motivated. And then people who haven’t done that before. And I’m not just talking about nuclear weapons. And so that’s part of this gyration that you see, this sine wave of, conflict in quiescence and conflict in quiescence.
I think there are lots of other factors too, but I do think that. nuclear weapons change the entire dynamic. I think, that it’s very hard to make them. It’s very hard to store them and maintain them, but nevertheless, the it’s 70 something year old technology now. And, there are there are lots of countries who are working on it and there are lots of offshoots of it that are not quite as bad, dirty bombs and that sort of thing that, can.
Can have very long term effects, but can have instant effects on the value of commercial real estate that, at a, at an existential level for the world economy. If you take out, London, meaning it’s covered with radiation and suddenly all that value is gone. What, how do we deal with it?
But anyway That I think I would add to nuclear weapons bioweapons I would add chemical weapons, less, less so chemical because they’re hard to distribute. Bioweapons though, somebody with a few thousand dollars can buy CRISPR editing machinery and technology and put it in a garage and create, potentially create something that could kill millions of people.
Thank you. And that’s not something, and then that all leads me to the other factor that I think plays into this, which is asymmetric warfare, because you’ve now got a situation where parties that are small and poor can have a massive effect on very large players, like what’s going on with the Hooties in the Red Sea, and it’s affected the whole economy.
Because now chips have to go all the way around Africa, like they did in Vasco da Gama’s time. And, and it, and but those weaponized drones cost at most a few thousand dollars. The only way, effective way we have of countering them right now is missiles that cost Over, north of, north of, a million dollars.
You have this ability of a very small player with limited means to now challenge and make a real nuisance for at least a very large player or very large players. And that is, that whole asymmetric equation is intensified as we get into other kinds of asymmetric.
combat cyber war, for example, and so forth. So those things have to enter. I just, I think we’re in a different period than we were in the 19th century, but I don’t think that the difference, I would argue that the differences have not made it less likely that combat happens. They’ve made it more likely that combat happens.
And the question is, have they made it more likely or less likely that global combat at an existential level, like a nuclear war. Or something else happens, and I don’t know. I don’t know, really, what the answer to that is.
[00:21:04] Jacob Shapiro: We’re off to a really uplifting start here. So let’s see if we can
[00:21:08] Dee: Well, you tell me you’re the optimist, so I feel like I have to play the pessimist.
[00:21:11] Jacob Shapiro: Oh, that’s fine. I appreciate a good contrary. We can flip back and forth. One of my I won’t tell that story right now. I’ll tell you that’s that story to you later. Sorry, listeners. I’m going to ask you a question now that I don’t want you to take pejoratively, because I think the fact that you’re older than me gives you more experience.
But, my career begins with the 2008 financial crisis to date myself. And if you’re thinking about geopolitics. Since 2008, it’s just been a steady year, steady linear decline towards shittier outcomes, like things just get worse and more unstable and more risky and all these other things.
Your career is much longer than mine so far. And I wonder Does it feel like a linear downward line to you? Does it feel like we’re returning to a previous level of instability? Like when you take in your own career and where the world was when you started and where we are now, what is I just wonder what that plot looks like in your brain.
[00:22:01] Dee: That’s a really interesting question, and I’m not sure anybody’s ever asked me that before, but when I started out, seriously doing things professionally it was the, the Soviet Union was fully in place. That bipolar system was fully in place. The world was a stable place of the, there were worries, but the world was relatively stable and it was opening up into a, a period of globalization.
Generally speaking things were getting, seemed to be getting better. The there was a consensus that later became called the Washington Consensus, but it wasn’t called that. in the early days, but nevertheless, it was, the liberal international order that, all of these countries were going to we were going to create a global system.
We did create a global system of rules and countries abided with it by even the Soviet union did. Everybody, because if you don’t have rules on things like, where satellites are in orbit and how, international communications operate, then you don’t have it at all because it all interacts.
Anyway, so it seemed in the eighties, in the 90s were a period of great optimism. And I ran an NGO and we did all these things about, to help cultures understand and interrelate and help them communicate. And down at the level of the common person, that it was the top level too, but also it was, the ability to actually get people excited and interested in understanding another culture and all the cultural protectionism, if you want to call it that was not there and it was open and it was that’s the world I grew up in and It was very optimistic and I guess what happened is that personally putting all that effort into it, I saw didn’t really, things got worse and they got considerably worse.
In, in 1989, I was in Moscow when the Berlin Wall fell and it was just, it was, it was just. exuberant optimism. And I was part of that. I agreed. And then it was just a very short period, before things started to seriously fall apart. We brought, China into the into the global economic, all this stuff was happening.
And then, dominoes starting around the late nineties and being pronounced pronouncedly greater in, 2001 and then in 2008, the dominoes just started to fall and it was as much negative as the previous period had been positive. And so that’s my experience is that I’ve gone from a period that was just exuberant optimism to watching it all crash and burn.
And I’m sure that’s affected the way I look at it unquestionably. And I’m not saying that we won’t have a another period of optimism, but I don’t see when it’s probably not going to be in my lifetime, it’s probably not going to be in your lifetime, maybe our grandkids, your grandkids and my, my grandkids and your great grandkids, something like that.
if we make it through this period. But I think the, the key change in this looking at it, compared to the past, and there’ve been horrible times, the 131 years of war, in Europe that ended with the Westphalian Treaty, all that, there were horrible times. But what we have now is what you alluded to, which is existential threats.
And that didn’t exist. We couldn’t destroy ourselves until the 1940s. And then you’ve had those things. layer in faster and faster, bio threats, cyber threats, AI, if that is an existential AI artificial general intelligence. And we, and that has an effect on people’s mentation too.
It’s we thought okay, we had nuclear weapons and we’ve dealt with that. Now, God damn it. We’ve got another thing and oh, shit, we’ve got it. And, it, it affects you. Does that answer your question?
[00:26:07] Jacob Shapiro: Oh, it sure does. I you know, you’re even more pessimistic than I thought about things.
I actually am I worry about the world that my great first of all, I haven’t given up on living forever yet. So I think I’m hoping that change happens in my life.
[00:26:20] Dee: Is it rude to ask why you would want to do that? No,
[00:26:25] Jacob Shapiro: it’s not rude at all. One of my favorite Parlor tricks at bars in college was to ask people the question, would you rather live forever at your current age?
So putting aside that your body would break down or you would be like, imagine you can live forever at your current level of health, or you can live a great 120 year life and then die with your family surrounding you. And I always wanted to live forever. And when my, John has been on this podcast before, my, my roommate John and I used to ask this question at bars to people in colleges as a way of provoking conversation.
You can get what kind of nerds we were back then. And I would say about, 90 percent of people wanted to die at 120. I was in the lonely 10 percent that wanted to be around for everything. And but do you,
[00:27:07] Dee: it’s fascinating because do you really think about what forever means? Yeah, I do. And I’m sure you do.
And that was that. I don’t mean that it is. When I think about forever, I think about the nature of A time that goes even if it doesn’t, for us, it doesn’t go all the way back, but it goes all the way forward and never ends. And, one of the phenomena of, at least that seems to happen with life is that as you have more of it, each individual unit is a smaller portion of that whole.
So it seems to go much faster. When you’re a two day old baby, a day is. One half of your 50% of your life when you’re 10, it’s whatever the equation is, a 3000th of your life. And when you’re, a hundred, it’s a, a 300000th, I’m just pulling figures out. But, and as that happens, time does seem to flow faster.
So if you had an infinite being, all of time would pass in an instant. And this is, this is the subject of discussion. So what is it that you’re accomplishing by living forever? If, first of all, everything that has can ever happen is infinitely far in the past. And because you’ve got an infinite future, all the time happens in an instant.
It’s just, I find these things very interesting actually, but it’s I think that a lot of people don’t, they don’t, when they think about religion Or when they think about their own lives, they don’t actually think about what infinity infinity is a fascinating subject, and that’s what you’re talking about.
Living forever. You’re actually talking about infinity and there are all these different infinities. There’s, cantor’s hierarchy of infinities and all these things that for one thing are not computable. They’re non computable functions, so AIs can’t deal with them. So if you think you’re going to transfer yourself to an AI, I’ve got news for you.
But it’s just, those things, I think what we think is it would be lifelike. We have it just going on, indefinitely. But I don’t think that’s what it would be. But what do I know? I could be totally wrong.
[00:29:14] Jacob Shapiro: So some listeners may think this is off track, but I my dad’s advisor in college who was very close to our family and who I loved very much.
His name was Werner Danhauser. Probably not a name you’ve come across. He wasn’t really well known, but he was In the Leo Strauss family of scholars, Alan Bloom is probably much more well known than Werner, Werner was, but he was great, and he used to say that all conversations ultimately boil down to either God, death, or sex, like we, like everything, that’s ultimately what we’re talking about, so we’re on we’re on at least one of those planks, and it’s nice to be addressing it directly, and the answer to your question is it’s more of a fear of the negative, maybe, than an embrace of the positive.
I’m terrified of death. I don’t want to die and death is a form of infinity even in and of itself, which it appears to me means I have no consciousness and I would rather be around all the time with my consciousness than have it disappear one day. This would make me a terrible Buddhist. I am way too attached to myself.
I want myself to, I don’t want to be an AI. I want to be able to touch things and smell things and feel things. And I’ll take the hits. It’s I’ll take the climate crises and everything else that’s terrible. And yes, the other part of this is I think the real argument against living forever is you don’t get to take anyone with you, so you will live long enough to see everything and everyone you loved die around you.
And do you, will you still have the stamina and the energy to love more things? And in that sense, it’s both defiant and very profoundly idealistic that I’m like, Yes, sign me up. I think I have never ending reserves of love and attention to give to all sorts of people in the world. But I fully like I’m in the 10 percent and I fully recognize that a couple thousand years in, I might be looking around being like, man, D was really right.
On that April 12th, 2024, I should have let it go.
[00:30:52] Dee: One argument that I’d like to adduce on this is Seneca’s argument, the Roman philosopher, who said, if I get this right, and I usually invert it, but as long as you can worry about being dead, you’re alive. And once you’re dead, you can’t worry about it anymore.
So what’s there to fear, that’s assuming that death is a total cessation. Now I’m not, I don’t know that it is, I don’t know that we don’t, the concept of conservation is so strong in science, in physics, conservation of masses. It may well be That we do survive in some way or that we’re just outside of time and that time in this universe is an anomaly, but, and we are getting way off track here for geopolitics, but and I really don’t know the answers to those questions, but I do I guess that’s a big difference is I’m not afraid of death and I’ve nearly died more than once and but maybe that’s why I’m not, but But it’s a very interesting topic, and I, you may be right, I may be totally wrong.
And I’m, in the non existence that I have after death, I may be thinking, Gosh, I wish I’d listened to Jacob now. Who knows?
[00:32:00] Jacob Shapiro: Yeah, I would push back against what you said in that it’s, This is actually like the core of geopolitics is this question. And the core of all sort of political science to me is about these fundamental questions and whether we use math or whatever, like methods that we use to get them, like that is the whole point of political science.
Thinking about these things. Yeah. I take your point. If you bury me in a beautiful cemetery, maybe I’ll be reborn as a tree one day. This is why I’m a terrible Buddhist. So I’m very attached to me. I like this brain. I want to be eating my own cookies and my own cheddar and sour cream rough, and like making my I’m very attached to that sort of thing.
This also gets where the food’s so good. I can totally understand.
That, that’s a constant exercise in self discipline as I like to joke, but this actually does get into things relating to geopolitics and not just in a sort of. Nietzschean eternal return of the same thing.
There’s that banal, it’s become banal. Like the first time you hear that Mark Twain said, history doesn’t repeat itself, but it rhymes. You nod to yourself, that’s a pretty clever little quote. And then everybody and their mom uses it. And you’re like, ah, that’s a really, I don’t want to be in the same class as people who use that quote.
But the point of that quote is that we, history repeats itself. That leaders and people. Become afraid of death in moments and then are not afraid of death in moments. If we boil Russia’s invasion of Ukraine down to its, essentials, that’s Vladimir Putin was not afraid of what would happen to Russia and not afraid of death for hundreds of thousands, let’s say, Russian civilians and Ukrainian civilians and soldiers and everything else in the context of that war.
In some ways, like how the human species thinks about death, That’s the beginning of demographics. That’s the beginning of what are we going to do about climate. That’s the beginning of what types of monetary policy are we going to have? Are we going to support the current, the present and, Rob Peter to pay Paul?
Like when you get down to it, like these essential questions are the core of geopolitics. And one of my problems with political scientists and risk analysts in general today is they don’t talk about this shit. They, it’s pushpins on a map or it’s probabilistic equations and nobody has actually sat down and been in the bar with me and John at 2 a.
m. in Ithaca, New York and been like would you live forever?
[00:34:03] Dee: Yeah. There’s a lot in what you said and And I agree that it’s core to geopolitics and to human affairs. It’s very hard to get people to understand that. And because they have such, they think they’re being practical and pragmatic.
In fact, what they’re being is they’re having their heads in the sand. And But I do think that, Putin, you brought is a very interesting and tragic and nasty character, but I don’t know, did you take the time to read that horrible long thing he wrote about Putin? Two years before he invaded Ukraine about, yep.
I did that, that Ukraine was the, and the sad thing is some of it’s true, you the ru the Russian culture started in Ukraine a thousand years ago. And he, and he constructed this whole argument about, he, we had to take Ukraine back because, Russia is pure and Ukraine needs to be pure and land powers are pure and sea powers, Aren, Dugin and all these.
miserable philosophers. And so I think that not only was he not afraid, he thought he had a mission. He thought he had a mission from God. And this was with, and of course the Ukrainians have moved on long ago. They don’t want to be Russians. And but he thought and I’m sure it’s been very difficult to him for him to understand.
He’s a very religious guy. How, why this has been dramatically difficult to do. And you can spend, we could go lots of different spokes on the wheel from that, including how I think people underestimate now how fantastically inefficient the Russian bureaucracy is and, and how fantastically corrupt, there was all this stuff about Russia’s revised the military doctrine of the Soviet Union.
And it’s not going to be had those doctrines were like you had to, if you wanted to take a hill, you had to check it all the way up. The chain of command and then all the way back down. And then by the time that had happened, the opportunity to take the hill was lost and that they had spent all this money modernizing and of course, what happened, they didn’t change the doctrine at all and all the money went into the Swiss bank accounts of generals.
And it’s just, it’s a, there’s several directions to go with that. But I find Putin a fascinating character because I think he’s an example of someone who really starts believing their own bullshit and and has a, has created a, one of these authoritarian systems where nobody will talk contrary to him.
Nobody will counter him. Because he’s got everybody’s family as hostage. And so if he doesn’t like you, it’s not that you’re going to be in prison. It’s that your family is going to be completely, decimated. And it’s just, it is, the whole situation is tragic. And he’s got thousands of nuclear weapons, by the way.
If even half of them work, or even 10 percent of them work, there’s no end to what he could do.
[00:36:56] Jacob Shapiro: Yeah. Speaking of nightmare scenarios, I worry more about what happens to the nukes if Russia falls apart than I do about Putin hitting the button. What Chechen warlord gets a couple, nukes and what do they decide to do?
[00:37:09] Dee: Ukraine had a bunch of nukes and they gave them up and that’s never going to happen again.
[00:37:15] Jacob Shapiro: No
[00:37:16] Dee: guarantees that weren’t guarantees. And if they had the nukes, Russia wouldn’t have invaded. And that point is not lost on anybody.
[00:37:23] Jacob Shapiro: No, we’re entering an era of nuclear proliferation. That’s for sure when it comes to putin Yes, I did read what you’re talking.
I think it was actually earlier than what you’re talking about and I remember reading it and that essay that you’re talking I think I can find a link to it and i’ll put it in the show notes And I was at geopolitical futures at that time. I was still george freedman’s right hand manned at the time and hand man at the time and I I wrote an article at GPF Which I think is one of the best and most present things I ever wrote It was the title of the article was the first partition of Ukraine question mark and I wondered whether 2014 was the first partition of Ukraine and whether there would be future partitions and whether the future of Ukraine wasn’t going to be unlike Poland in the 18th century if it was just gonna get salami slice, not just by Russia, but, there are parts of Ukraine that Poland would like back.
There are parts of Ukraine that Hungary would like back, even Romania gets in there and wants it too. And I got off of that take and I made, it was a classic mistake. I got to know some Russian analysts. And they insisted to me they didn’t want to conquer Ukraine that Putin was just positioning things politically so that he could get concessions from the West and that Russia, of course, wasn’t going to invade Ukraine because it was smart enough to know that it would be, an Iraq war type scenario that it could never possibly win and up until Russia invaded my Russian analyst friends were telling me that and then they went silent.
They didn’t want to talk to me anymore. And I made the mistake of listening to them and I got Putin wrong. Like I said, I thought he was, posturing. So even though I had the mental map at one point in my head of what was correct When the chips were actually down I didn’t have putin correct and it’s a mistake.
I still hate myself for making I will also say though It was also an example of good risk control because we actually had some exposure to russian equities at cognitive investments at the time Because we thought we were contrarian and saying an invasion wasn’t going to happen And the day that putin made that speech in front of his You National intelligence council or security council or whatever it was.
I called a meeting of the CI principles and I said sell the trade now, get out now. And they were all traders. Ah the chart, don’t you want to give it a few days? And I said no I’m wrong. Like this is broken sell now. And three days later, the Russian stock market. You couldn’t get your assets out even if you wanted.
So we didn’t take much of a loss, and I was very proud of myself for making the change, even though I was mad at myself for making the mistake in the first place. But I agree with you. Putin, I’ve gotten Putin wrong at every step of the way, because I have a sense of what I think, Is like what a rational actor would do in his position.
And his sense of rationality is not the same as my rationality. And I have just underestimated him and called him wrong every step of the way to the point now where I don’t even try I’m just going to see what he does and react.
[00:40:04] Dee: And, you get things wrong for your reasons in the same way I get things wrong because you’re an optimist and I’m a pessimist and nothing is that consistent.
[00:40:13] Jacob Shapiro: I, D, I just interrupt you. I don’t mind getting things wrong if I’m an optimist. I mind the Russia thing because I got things wrong because I was Gullible. I let people tell me something and I didn’t trust my own brain. Like optimism, that’s fine. Especially if it’s backed up with data. I let myself get lulled into a false sense of security because Oh, I know these guys in Moscow, they wouldn’t tell me something that wasn’t true.
That was that was, I really took myself behind the woodshed for that one. Anyway, go
[00:40:39] Dee: on. Yeah. Yeah. No, it’s, and this also gets to another fallacy. In thinking, which is, sometimes called recency bias. It’s that the, the, that the near future is going to be like the recent past.
And it’s a very curious thing because, change, we know that change happens suddenly. You don’t have a heart attack over a period of a year. You don’t get in a car wreck over a period of a month. The things that really change your life often happen very fast, but we’re always surprised that change happens so fast and and we’re always expecting the near future to be like the recent past part of that, that, in philosophy, that’s called the problem of induction and it’s the, it’s basically the idea that things stay the same until they don’t.
And, um, it’s And there, I’ve talked to neuroscientists and other people about why we have that kind of of, predilection. And, the best explanation I got is that the human brain uses more than 20 percent of the energy of the body. And so anything it can do to lower its energy use, it does.
And assuming that the past is going to, the present, the future is going to be like the past, is a way of reducing energy use. But of course. It doesn’t work when you’re in a highly complex and changing environment, but in terms of Putin. This is a guy who has been afraid of a shaman in Siberia, who’s, he’s not a rational actor and, and this is getting into territory we may or may not want to explore now or at another time, but I think that a lot of these people who become powerful leaders and appeal to people in a way that gets them into that position, whether democratically or otherwise.
But let’s say democratically are are not really don’t are not playing with a full deck. I think that there’s some quality of this certainty in this, aggressive certainty that those people display that appeals to. Individuals and families and people who have been oppressed or who are on the hitting end of the stick or whose lives have not turned out like they wanted and here’s someone who’s he’s got a simple answer.
She he or she has got simple answer. They’re going to be they’re forceful. They like the fact that this person, dismisses the elite and dismisses the structures and that very quality. get into these positions of power. And it’s a real dilemma because what that means, and this is not my observation, it’s been observed many times, but the things that Allow you to get elected should prohibit you from holding office, and there’s some truth to that.
[00:43:20] Jacob Shapiro: Yeah, we could say that forever. But I’ve already taken most of the time that I asked for from you and you’re being very generous. So there was one thing I wanted to ask you before I let you go, and you’ll have to agree to come back on to continue this. And next time we’ll do it with the actual beers like we were joking beforehand.
I know you cut your teeth a bit in Central America and South America and things like that. And you’re also based in Texas. I think aside from the U. S. Election, the most important thing that’s going to happen. Arguably in the Western Hemisphere this year is Mexico’s elections and the future of U. S.
Mexico relations, and I wondered if you could just give me your five minute like what? Do you see risks? Do you see opportunities? What do you think happened? If Biden wins versus what do you think happens if if Trump wins? It’s pretty clear. It’s Marina and Shinebaum in Mexico itself, whether it’s a super majority or not might be the question there.
But just curious to get your take on Mexico and U. S. Mexico relations. The short version.
[00:44:09] Dee: Okay. I, that’s another 30 minute conversation, but I’ll try to boil it down to three minutes. Scheinbaum is not amlo. He, she is very different from and she looks, she sounds the same. But she actually is very different from and she will rule in a different way.
And she is not as hide bound by these old I don’t want to call them hatreds, but these old, ideas about the nature of poverty and then, and that sort of thing she does, she will agree with them intellectually, but she, I think she’s going to here’s a case where I’m somewhat, I’m guardedly optimistic.
I think she’s going to be a better president. I think she will be the president. There seems to be no, no other person who could be given the demographic and voter, the whole situation. But I think that Mexico is is fantastically insecure because of criminal activity. And, what’s happened is that and this is an interesting example of whether, of a way in which, and I’m not making an argument here, but a way in which an open democratic system may be worse than a closed system.
In the past, you had for all. More than 70 years a specific group, the PRI ruling Mexico. And one of the things that, that they did, and it was corrupt in this, in the, at least the Western definition of corruption. That’s a whole other argument, but is that they had an arrangement with the drug dealers.
And the arrangement was, if you don’t screw around with Mexican society, You can do what you want. You can, keep doing your, we’ll look the other way. And when that system broke and the and different parties were elected, the PON and so forth, that whole system went away because you didn’t have a, you didn’t have anything like a a foreign serve a government, bureaucracy that wasn’t political.
They were, it was all, so those people got replaced. That whole system, good, bad, or indifferent, fell apart. And so the drug dealers found themselves in a very difficult place. They were not able to just do what they did. So they became much more violent. At the same time, the drug demand from the U.
S. increased significantly, at the same time, you had, Mexico was a transshipment point for things coming in from Asia as well as things coming from, further south in Latin America, and So the Mexican drug gangs became criminal gang, became institutionalized criminality. And they got into kidnappings and there are two kinds of kidnappings and they’re, they got into avocado for farming, all these kinds of simple businesses, which is what, groups like that can do.
It’s also, by the way, what people like Putin can understand and his crony. But anyway so the whole thing began to just. fall apart. And it opened up a, it created a need among these criminal groups to do other things because they were under more pressure and it created a, an opening for them to get into these other businesses.
And now it’s permeated the society. And so I, and then you’ve got the pressure of the population movement that is going to get much more pronounced and, a very large portion of the immigrants at the U S border are not even from the Americas. They’re from, it’s from Ukraine.
They’re from, they fly. These are, it costs you, Venezuela, but it costs you about 30 to 50, 000. If you’re, if you want to move yourself from Santiago, Chile where this kind of underground railroad starts up to, and into the U S so the people who can do this are they’re middle class, at least.
They’re not. poor. And and so it’s become a huge business moving people all the way from Chile, mostly that’s where it starts up through the spine of of South America, across the Darien Gap, which is its own thing, across Central America, across Mexico and into the U. S. And there’s, it’s corrupt all the way through, which is also an interesting topic.
But. Mexico is the nexus point of all this and it’s been very destabilizing. On a society that when I was young, you could, you could just leave something somewhere and nobody would even steal it. It’s just it’s become a totally different place. I think you’ve got and now we haven’t even gotten into the U.
S. Mexico, the U. S. side of the U. S. Mexican relation. But I think you’ve got a glimmer of possible hope with a new person who’s not on low and is not going to have, it’s been an hour and a half every morning or more having these TV speeches that literally every day and who’s not, coming up with things like whiteicans, the term they use for Mexicans who are elites and look like the end of the crusade.
They’re not, they don’t look like the U S they look like elites look everywhere. And but just who’s, who is who is determined to upset the status quo in Mexico because he’s so resentful of it. And he has every right to be resentful. The poor people in Mexico had been horribly shat upon, But nevertheless, it has created, it has just added another layer of resentment and instability to Mexican society.
That may start to ameliorate a bit. But then you have the drug demand from from the U. S. and you have the supply of guns going into Mexico from the guns and other weapons from the U. S. And and it really is probably my favorite place in the world. I think it’s one of the most fascinating, interesting countries.
It has an ancient history that is equal to any the food is amazing. It’s just a great culture, but it’s really going through a bad period and I don’t see that, sadly, I wish I could say I did, but I just don’t see that changing in the near term, given all these pressures in terms of what a Biden or Trump will do.
Trump, of course, and AMLA were very much alike, and they got on even though one was far to the right or claimed to be, and one was far to the left. Now, do left and right even make sense anymore? That’s a whole other argument. But I think that, with Biden, you’ll have a more of a less of a status quo and things will quiet down a little bit.
But with Scheinbaum if, with With Trump, he will try to see the AMLO and Scheinbaum and he will also really try to crack down on the border because that’s what his constituents want. So, there’s, there are pluses and minuses. But it’s going to be, and I agree with you, it’s certainly the most important thing in the hemisphere and it’s one of the most important things in the U.
S. And, Mexico is once again the U. S. Leading trade partner. And interestingly enough, 50 percent roughly of the trade between Mexico and the U. S. goes between the northern states of Mexico and Texas. We’re right in the And you’re not far in New Orleans. It comes up to our part of the country.
And Anyway, those are a few thoughts. More than three minutes. Sorry.
[00:51:23] Jacob Shapiro: No, that’s great. We’ll pick it up there next time. I’m reminded of politics is a flat circle when it comes to ideology. But we could talk forever, but D, I can’t let you talk forever because you’ve already been generous with your time.
You’ll have to agree to come back on soon, okay? Look forward to it. Thanks again. Enjoyed it. so much for listening to the Cognitive Dissidence podcast. It’s a podcast brought to you by Cognitive Investments. If you are interested in learning more about Cognitive Investments, you can check us out online at Cognitive.
Investments. That’s Cognitive. Investments. You can also write to me directly if you want at jacob at Cognitive. Investments. Cheers and we’ll see you out there. The views expressed in this commentary are subject to change based on market and other conditions. This podcast may contain certain statements that may be deemed forward looking statements.
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