The Rise of Protectionism and Its Impact on Global Trade

In this comprehensive discussion, we examine the two major challenges shaping the future of global geopolitics and economics: the rapid development of AI and the ongoing fertility collapse. Our conversation delves into the impact of these changes on various regions and populations. We analyze fertility rate maps to understand how declining birth rates influence geopolitical power. We also explore how AI is reshaping the job market and its broader societal implications. Furthermore, we address potential economic destabilization in various countries due to these trends and their implications for future global stability. This episode provides a critical update on these pressing issues and their potential effects on our world.

Malcolm Collins: [00:00:00] Hello, I am excited to be here with you today. Today we are going to be discussing the future of global geopolitics and economics in the face of the two biggest changes the world is facing right now, which is the development of AI and fertility collapse.

So this can be thought of as sort of our fertility collapse update video and our well, and ai. Someone was like, you've been doing so much AI recently, and I'm like. AI is literally going to change everything about the human condition over our lifetimes. Anybody who's not thinking about AI as much as they're thinking about Rome priorities in order, buddy?

Simone Collins: That's, that's a very good point actually. Yeah. Ro roam happened. You, you can't change it. Oh, dear.

Malcolm Collins: No, but I mean, when, as you are, you know, predicting out your career or what education means for you and your kids, or. Really anything what's happening in the space of AI is incredibly important. Now, Simone, I sent [00:01:00] you yesterday some maps

and we'll just go over these in turn with our fans. Okay. Because I think that they're very important for getting a grip on how bad things are now. And this, this first graph is terribly designed. The darker blue areas. Where it gets to like purple and darker blue. Mm-hmm. Those are areas of lower fertility.

The lighter blue areas are areas of higher fertility. So the more

Simone Collins: tan, brown, orange-ish, the higher the fertility, the more darker purple, the lower the fertility and the lighter. And you see, I mean it's kind of obvious 'cause all you have to do on a graph like this to calibrate is look at South Korea and then you kind of know what's going on.

Yeah. And then the Nepal, man, I didn't know Nepal was doing so horribly.

Malcolm Collins: We'll, we'll get to these in a second. So the lighter red is higher FTI lower fertility, but it's higher fertility for the darker red. So they're sort of treating white the 2.1, you know, replacement TFR as the [00:02:00] midpoint, and then you move either to red or blue depending on where you are.

And what are you colorblind? It's, it's,

Simone Collins: it's purple.

Malcolm Collins: What you should immediately see here is, or purple. Okay. Is that, the Americas are now just completely ed out, right? Like I think a lot of people thought that South America would take longer to get to the place it is right now. But we're now at a place where we are.

Depending on how you calculate it, the ma if you, if you do it like per person, so if you Correct. By the population of a country. Yeah. LA Latin America may be below the United States in terms of TFR now.

Simone Collins: Yeah. She's, she's gone guys. And if

Malcolm Collins: it, if it isn't right now, it's going to be soon. And this is really big.

Because when we're talking about the future of geopolitics this is true both within the United States and around the world. And we'll get to this as we explore these different regional maps, because I think that's a better way to do this. Mm. Who's gonna own the future are countries and populations that while [00:03:00] being economically and technologically productive.

Can still be high fertility. Alright. A, a country like Somalia, which you can see right here I'm pretty sure that's Somalia which is super high. Fertility doesn't effing matter? It doesn't matter if Somalia has a. 20 times its currents population that's just gonna be 20 times where people in desperate suffering, it might matter to, you know, surrounding companies in terms of like refugee crises and stuff like that.

But it doesn't matter on like the global stage, right? Like they're not gonna suddenly become a powerhouse. And

Simone Collins: we imagine if they could choose, they, they would probably rather first improve quality of life before they improve.

Malcolm Collins: Which is going to lower population, the birth rate. But

Simone Collins: yeah,

Malcolm Collins: the place where this can really be seen is in East Asia.

And so here we're gonna be talking about the map I have on screen here is East Asia more broadly, but I'm gonna talk about it along with Oceania because they're basically a connected economy. When people think about fertility rate collapse even though it's a bigger problem in East Asia, they often [00:04:00] think about it in the context of themselves and their neighbors and their trading networks.

Mm-hmm. But the biggest disruption that it's gonna cause is, is in this part of the world. And so you've got China with a fertility rate of like 1.2 Japan with a fertility rate of 1.3 South Korea 0.9. And Taiwan. I've seen all sorts of weird fertility rates for Taiwan recently from this one has it at 1.1, but I've seen it down to below South Korea at 0.76.

Simone Collins: Yeah. What's going on?

Malcolm Collins: Get it straight guys. Falling very quickly is the general gist of it. But the, the wider point here is who is declining within this region? It is everyone who is economically relevant is declining within this region and. Well, I should say not everyone. So then the question is, is okay, you're saying there's somebody near this part of the world that isn't in a complete free fall right now.

Who are you talking about? Well, the two countries that are economically relevant in this region and are [00:05:00] not in complete free fall are Australia with a TFR of like 1.56. Mm-hmm. In New Zealand with fertility rates I've seen of between like 1.6 and 1.85. Mm-hmm. Which is actually very robust. I mean, for, for these days.

For these days, right? Yeah.

Simone Collins: I mean, you still need 2.1 people just to remind you, if you, if, if you're new to this podcast and subject, if you want your country to maintain a stable population, you need to have a total fertility rate of 2.1 or more.

Malcolm Collins: Right. And a lot of people can say, well, you know, what about, for example, India, right?

With its, with its TFR of two on average now or slightly below replacement rates. Mm-hmm. And this is again, where you, you sometimes even need to look sub regionally to predict the future of a region. You know, you can't think about these countries as just countries like India, as just India. You need to see who in India.

Is having lots of children. Yeah. And India it's, it's it Muslim extremists. And if [00:06:00] India does become a, a, a country because it's a democracy where Muslim extremists end up running the country. It's going to almost immediately fracture.

Speaker 3: Mm-hmm.

Malcolm Collins: And completely change its relationship with Pakistan because that would change things pretty extremely.

India's in a very dangerous demographic position right now. And it's something that's like very well known on the ground in India. It's, it's, it's sort of a ticking clock in terms of its regional power. Because its, its regional power relies on the existing sort of demographic breakup, staying largely the same.

And, and note here people can be like, oh, well wouldn't this be the same thing as like, minorities becoming the majority in the United States? Like, suppose like Hispanics became the majority in the United States and then they started electing, you know, a bunch of Hispanic presidents or something like that.

No, not, not even a little bit like. The, the, the conflict between the Hindis and the Muslims in India is [00:07:00] very, very much hotter than the conflict in America between, you know, wasps and Hispanics. There is not a deep animal like there is, you know, a little bit of tension occasionally, but it's not that deep or bad of tension.

Mm-hmm.

And what's also interesting about the United States is it's often the regions with the. Most history with Hispanic populations IEG you're getting a lot of Hispanic populations moving where you have the most positive sort of perceptions of them. Mm-hmm. And integration of them with locals.

One of the problems that Texas Republicans always have is they have a history of being more open to immigration than other Republicans, which has really hurt them. It hurt I forgot one of the guys who's running in the election cycle. I can't remember his name, but he was of a primary in Donald Trump a few election cycles ago, and it was a big problem for him.

I was thinking of Rick Perry here.

Malcolm Collins: But it is, it was a, a George Bush was that way too. So you, you have this problem [00:08:00] consistently, but it's, it, I think as a problem, what it shows is that when these populations live next to each other for a long time they often begin to become quite, you know, fine with each other.

Speaker 3: Mm-hmm. That

Malcolm Collins: is, that is not what we're going to see in India.

And this also, when people frame everything like this in terms of like racism or whatever, they're like, you are racist to care about this stuff. Right. I'm like, you do see that an entire half of the world. It's going to have the scales dominated in favor of white people, people in New Zealand and Australia.

And you're just ignoring that 'cause it doesn't fit your narrative. Now here I need to talk about ai and we're gonna get into a number of AI studies after we go around the globe, but just to. First year people can be like, oh, well there's still some, you know, economically. What, what about Cambodia?

They're, they're sort of have a stable population at like 2.2 or Vietnam, which has a stable population at like 1.9. And don't get us wrong,

Simone Collins: good for [00:09:00] them.

Malcolm Collins: Yeah. The Philippines at 2.7 and it's like, well, the problem is, is this kind of developing economy, what type of job are they taking? Right? Like what type of job did you have in India Most frequently when it was in its creative of development, it was outsourcing the type of jobs that you go to Upwork for.

The problem is, is outsourcing in call centers are the very first things that AI is being applied to at scale. You, you probably already interacted with AI call bots, right? That's not. Awesome. For these regions that are hoping to spam it with just lots of people.

Simone Collins: Well, and combine that with increasing protectionism, which people like Peter Zhan expect is only going to increase that we're gonna see less global trade and exchange.

So there will be less. Interest in people, even outsourcing non-service professions. Things like clothing production, factory production in general, et cetera. So in general, the headwinds are [00:10:00] not, they're not favorable.

Malcolm Collins: If people are wondering why that would happen, it's because the US. Has less motivation to do international deals.

It, it has a strong motivation to be protectionist. Now both of the United States political parties have a protectionist event like Joe Biden and Kam Harris had a bunch of protectionist policies. Donald Trump had a bunch of protectionist policies and the even more protectionist of the two protectionist parties won.

And he's shown. Perfectly willing to implement these protectionist policies. Like you look at the chip restrictions and everything like that on China. That was all under the Biden administration that that stuff was started. So, the u the United States, and I think AI might even increase the relevancy of being protectionist going forwards.

Because when you can totally automate a factory, like why do we send stuff to China to have it made inexpensively? It's because. Inexpensive Chinese labor, the more automation that's possible the more that can be done in the United States, right? Mm-hmm. The less of a motivation you have to ship out.

And in [00:11:00] addition, if we are going to ship out now, it's cheaper. Like if you're setting up a new factory from scratch to just do it in Mexico. Which is closer to us and kept artificially inexpensive because of the gangs in a really weird economic way. That's, it's, it's a very weird situation. Like at Mexico, it's like geopolitically, like way worse than it should be given its demographics, education level.

Location next to the United States, et cetera, et cetera. By the way, did you know Mexico has fallen below the US in some measures in terms of TFR? Yeah. And above the US in terms of obesity rates now?

Simone Collins: Yeah. Yeah.

Malcolm Collins: So Mexico's got some poor

Simone Collins: Mexico. Yeah, there's, they've got a lot going on right now.

Malcolm Collins: So next let's go to the Middle East, right, because I think a lot of people, they look at the Middle East and they're like, oh, the Middle East has great tfr and I think you can immediately see the economically relevant countries don't like look, look at, look at Turkey here. 1.4, right? I ran 1.6. Like those aren't great.

Speaker 3: No.

Malcolm Collins: The only [00:12:00] place where, where you see the good ones is like, you know, like Tunisia in Egypt, right? But that's the

Simone Collins: poverty thing. We talked about this when we did our middle East birth rates episode, and, and it looked, it would dispel basically the rumors of, oh, well it's Muslims and people in the Middle Eastern, Eastern, no, their fertility rates are not that good.

And when they are good, it's because they haven't developed yet. That's it, you know, it's. Classic pattern. Are they poor? Okay. Well that's why their fertility is high. Okay. Get over it. Right?

Malcolm Collins: Stop. And a a and ai. This is the thing you could be like, well, I mean, at least like the rulers in the geographically regions, and one of the things that we've gotta keep in mind by the future is the poxy Romana, the urban monoculture.

This is sort of the piece that's being held up by Europe right now is going to collapse Europe. A lot of these countries are like 20 years away, away from your social security systems collapsing. And when Europe starts to break apart as a geopolitical force, them telling other people to not kill each other or enslave each other over stupid things [00:13:00] is not gonna be as effective.

And in the Middle East, there's a lot of groups that want to kill our enslaved. They're neighbors over silly things. And well not necessarily over things or even just like economic, right? You know, we see this, all over the place where you basically have slavery all, all across the region already.

If you don't literally have slavery in the region now. People could say, well, what if, you know, the super wealthy groups that aren't doing good in fertility, they just sort of enslaves the populations near them that do have this high fertility rate, and they can use that to sort of economically cheese their system in a way that they, they kind of are already.

The problem with this is that it's twofold for this region one. As soon as we have good AI bots that you can build, right? There. They're just more efficient than slaves. This, this is, you know, if you think about, I have a AI scenario I created for our fab.ai when it's implemented. We haven't implemented this scenario yet where you, you are you know, a, [00:14:00] a commander for the Tarn Federation, which is a.

Far future earth fascist empire and you've just conquered a planet. And you need to justify why the planet's popula shouldn't just be liquidated. Because, you know, you could just have AI workers replace them with less resistance and, and well, less expensively. And you can be like, well, what about the energy cost?

And it's like, Uhuh, remember, you are in the Middle East, which means even if you didn't have inexpensive gas for energy, you would have. Endless solar power in some of these regions. Well,

Simone Collins: and we're gonna end up with much more scalable nuclear energy too, which I think is big.

Malcolm Collins: Yeah. Which means that we may have an opportunity for the most economically productive of these regions to consolidate their power and have even more power.

But for everyone else, they're basically effed. And national borders probably won't matter as much once the urban monoculture falls. Like the idea of national embroiders is something that's become [00:15:00] normalized. In a large part because of the p de Romana implied by Europe. Mm-hmm. When countries decide they want to expand their borders going forward, historically that was something people did all the time.

Like now it's something you just don't do that much. So, going on to Europe, we've been talking about what a terrible, terrible situation Europe is in. And here if you look at a map, you know, across Europe, you're looking at things like in the, in the more Catholic countries. You know, like Italy and Spain, 1.2, which as I've pointed out, it's like 1.85 actually.

For every a hundred Italians, there's gonna be 20 great grandchildren at this point. And this is assuming it doesn't get worse. Right? And even, and then you, you see, you know, you've got ones here, one point twos all over the place, but if you're, if you're looking at the, the better ones, and this is another thing where people are like, oh, you're trying to.

You are worried about fertility rates because it's your people who are going to suffer. And I'm like, it's not my people. Like Ev, wherever I look, we're pretty fine end up dominating. So I you know, we are our English, Scottish, [00:16:00] Scandinavian background, right? You know. So if you look at this map and you ask the question, what are the places that are better off in fertility rate and still economically productive, okay?

Mm-hmm.

Simone Collins: Yeah.

Malcolm Collins: France 1.6 with

Simone Collins: us audience, Ireland, 1.6,

Malcolm Collins: England 1.5 Scandinavia and Norway at 1.4. 1.4. Germany, 1.5. Denmark 1.5. It's Switzerland, 1.5. It's the places that look like me. There are some other places that have slightly higher fertility rates here, like the 1.6 in Turkey, right? And, and some of these, these.

Countries in the Balkan that have decent fertility rates, but they're not economically particularly relevant. Which is the, the problem here, right? Like we need to be realistic. They're not gonna, you know, Turkey isn't gonna become an economic powerhouse overnight just because this population is declining slightly slower than these other places.

Yeah. It's also gonna have to deal with the social security issues as things start [00:17:00] collapsing. Okay. Yeah.

Simone Collins: Yeah. And yeah, even those who are doing okay are still going to face dependency ratio cascades as time goes on. Mm-hmm.

Malcolm Collins: A dependency ratio cascade is a phenomenon where in the, in the United States, you have 1.8 people paying into the tax system for every one person who's living off the tax system.

And this number gets worse as more and more people get old because you have more and more people in social security. And eventually you reach a point where the majority of the population is reliant on the government and then democracy stop working because people never vote themselves less money, you know, if they're, if they're living off the government, and so then all the productive taxpayers leave.

Mm-hmm. And your country ends up in a terrible situation. But if we wanna talk about terrible situations, look at Latin America, right? Like, not only are they. Not great off economically, but like, look at a country like Argentina. That's 1.16. How do you, how do you fix that? When? Well, I

Simone Collins: mean, they're trying to import some Mennonites, so that's a start.

Malcolm Collins: Look at, look at [00:18:00] Chile. 1.03. Yeah, not good. Brazil 1.47. Mexico 1.45. Peru 1.7. Columbia 1.06. Hmm. Venezuela. Oh, we got, we got a strong one here. You can be like, well, some of these countries are, no. Yeah. All you

Simone Collins: have to do is just create rampant poverty and have blackouts and brownouts and little electricity and food shortages and you know that stuff.

Yeah. Yeah. Who's okay here?

Malcolm Collins: Venezuela and Haiti, you think Because they're okay with demographics right now. They're gonna be economic power players in the future. Ev. Everyone within education in Venezuela is leaving. Right. Everyone who's economically productive is leaving. What do you think? Oh, they've left

Simone Collins: already.

They've left already. We, we've seen this mean the travel business that we, that we managed at the time that we acquired it, basically its specialty, was working with Venezuelan travel agencies that were either specialized in getting Venezuelans out of Venezuelan Venezuela, or [00:19:00] literally flying suitcases full of US dollars into the country because.

You know, their currency wasn't exactly working anymore. By

Malcolm Collins: the way, Simone, you know how I, I, I often tout the, I've been to 50 countries statistic. Yeah. A huge part of that is because, you know, when it's on this map in the island chain, that there's a bunch of different numbers listed because there's so many different countries in that chain.

Simone Collins: Yeah.

Malcolm Collins: I, I took a boat trip through that island scuba trip. So

Simone Collins: that's just one of those like, ding, ding, ding, ding, ding, ding, ding, ding,

Malcolm Collins: ding, ding, ding, ding, ding, ding, ding, ding. Yeah. So that's, that's how I, I read that. That explains a lot. Okay. Like, 10 of those

Simone Collins: seems like excessive, you know,

Malcolm Collins: it does seem excessive, but Yeah.

But I, I think you can see by looking at this, like you, you look throughout Central America, right? You, you, so you see, you know, one point ones, one point sevens in some cases, 1.3, you know, this is not good. This is not a place that's better off when people are like, you're concerned about white people.

Also, I'd note in the United States, remember I said what matters is the groups that are breeding when they have money, [00:20:00] right? Because what's gonna happen to a group over time if they're having tons of kids, and it's only the ones who don't have money, who are having tons of kids is one that population is gonna be subjective to dis discogenic selection.

Mm. Which has negative effects. But then two. Even culturally speaking, if it's making an anti-education choice, if it's making a choice to not be economically productive, that leads to that group surviving and proliferating. The cultural elements in those groups that enhance that choice are going to proliferate in the future in the US becomes really important.

'cause if you're like, who's gonna dominate the future of the United States? If you are above 50% income in the United States above 50% income. Who has the highest fertility? What, what demographic? Can anybody guess? It's white people.

Simone Collins: Yeah. White people. People. Not what people think. I'm actually, I'll send you on WhatsApp, the Institute for Family Studies graph that shows this.

Yeah. 'cause it's so, actually it, when you look at it, it actually looks as though when we're, when we get beyond [00:21:00] just abject poverty, there is actually a slight positive correlation between income and. Well, fertility, but only for white people. Only For white people, like for all other groups, it goes down, which really does.

Oh, it kind of makes what they're arguing for look really bad because they keep arguing like, give people more money and they'll have more kids. And it's like, well, that's not really true except for just white people. Can you guys maybe stop?

Malcolm Collins: It's just white people. White people do have more kids.

Simone Collins: You're showing your hand, guys, this is not a good look for you.

Whatever. The, the,

Malcolm Collins: the thing here is is people are like, oh, what about scary black? TFR? Which isn't even that high, by the way. And I always point out here, but it is very important to note, black people in the United States that aren't in like the bottom, I'd say 15% of income for, for black individuals have the lowest fertility rate of any ethnic group in the United States.

Yeah. Anybody, they, they are

Simone Collins: at risk. They are at risk. They need help.

Malcolm Collins: Yeah. And anybody with wealthy black friends, nosis like black people, when they get money, they have like no kids. And [00:22:00] there's a number of reasons for this. We won't get into it in this episode. Might be worth doing a whole episode of, of why black people don't have kids with their money.

Actually would.

Simone Collins: Would be an interesting episode. Yeah.

Because I think it's similar to people being like, oh, we'll just use Latin America indefinitely to get population numbers up for the United States, which is as we've shown super not gonna happen. The other thing that people constantly say is like, well, black people in Africans are just gonna keep having lots of babies, so, you know, just don't worry about it.

They'll take care of it. And it's like, well, actually, assuming you're not in poverty, no. Extra. No, let's work on that.

Malcolm Collins: And so here I want to go over some studies because I have made the assertion many times. And I, I, I do deeply believe this, that as AI becomes more advanced, there will be sections of the population.

They just can't do anything as good as AI can do it. And the question is, is what is their role within the economy and was the geopolitical order within which we live when that happens? And [00:23:00] the question here is, yeah, but is that true? Because if you anecdotally think about it, you will have heard of some studies that show that AI actually increases the productivity of less productive workers more.

And it increases the productivity of more productive workers, less. So let's go over some of these studies in a field experiment with nearly 5,200 customer support agents, a Fortune 500 software firm access to a generative AI con. Conversational assistant, increased average productivity issues resolved per hour by 14%.

The gains were largest, up 35% for the least skilled and least experienced agents. Those with under three months tenure while highly skilled agents saw minimum are no improvement. The AI dissemination, tacit knowledge from top performers, allowing, sorry, the AI disseminated tat knowledge from top performers, allowing novices to move up the experience curve faster.

We, we've treated agents at two months tenure matching untreated agents at six months tenure. This also [00:24:00] improves customer satisfaction and reduced employee turnover among the newer workers suggesting potential to narrow-based skill inequality. So, think about that. A two months employee is now equal to a six months employee.

It's almost

Simone Collins: like a, a prosthetic for dumb people. Yes. And it wasn't

Malcolm Collins: helping the smart people at all. Yeah. No. What I think is really happening here, and we're gonna see this over and over again, is mid wis because if you're working at a call center, even if you are a higher in producer, you're probably on the mid side of the spectrum.

I mean, you'd be running the company if you were on the higher end of the spectrum. Mid wits are over as Brian Chow once said. Mid is over. Mid artist, mid musicians, mid employees, mid humans are, yeah,

Simone Collins: just the center. If you're in the center of the bell curve. Well watch out. Mm-hmm. Yikes.

Malcolm Collins: Let's go next.

An online experiment with 453 college educated professionals on writing task eeg, press releases reports showed that Chad GBT reduced [00:25:00] tax time by 40% and improved quality out to put by 18% on average. Weaker skilled participants benefited the most, leading to a convergence in performance and reduced inequality between the high and low ability workers.

Participants exposed through chat GPT were twice as likely to adopt their re, to adopt it in their real jobs later indicating lasting effects. A study involving over 700 Boston Consulting Group consultants on tasks like idea generation and analysis found that GPT-4 improved performance by 40% when used within its capabilities.

Lower skilled consultants to saw you 43% boost relative to their baseline compared to 17% for higher skilled ones suggesting AI acts as an equalizer. IMF analytics sites. Research showing AI helps less experienced workers enhance productivity more quickly with younger workers adopting it faster in advanced economies, AI could compliment about half of exposed jobs boost output.

But this is more pronounced for entry to high level. Roles. [00:26:00] Now let's go to the other end. The same MIT Sloan BCG study found that tasks outside of GBT capabilities, complex problem solving, requiring human judgment. AI use decreased performance by 13 to 24% as users over relied on flawed outputs.

Higher skilled models were better at applying a cognitive effort to integrate the point here being is for the type of thing that humans are better at than ai, AI makes mid worse and dramatically worse when contrasted with experts.

Speaker 3: Mm-hmm.

Malcolm Collins: So again, we're seeing the, but what does this mean economically? It means a slight boosting and I suspect temporary boosting of the very bottom of the economy. And then it's going to be basically washed out when AI can do everything they can do. And the reason why AI can't do everything they can do.

Is mostly just problems with the models and the way they're set up right now because you don't have persistent memory learning [00:27:00] an easy way to create them to be more agentic, which is a project we're gonna work on with our AI company. Broader analysis suggests AI could widen gaps by displacing load skill jobs while complimenting high income roles.

For instance, ai, it may increase demand for skilled labor and knowledge into the fields leading to a pyramid type skilled structures, autonomous AI agents. EG. Systems that handle routine work independently tend to benefit knowledgeable individuals more as they can orchestrate and verify AI outputs more effectively.

And then anyway, I'll just leave that out. But yeah, they, the point here being I think what we're gonna see is at first a huge jump. To sort of mid intellect individuals. And then as ai sorry, the very low skilled in individuals. Like, like not at the very bottom, like basically tars. But, but the type of people he would used to outsource to.

Mm-hmm. And then after that we're going to see them become economically. Irrelevant as [00:28:00] AI can do literally everything they can do, especially as AI can do physical tasks more. And then the world is essentially going to be dominated by a very narrow class of people who is having kids at a very low rate in most economies right now.

Simone Collins: Yeah. Like maybe what I hear more people saying is that just the stock market in general. Is gonna see a big boom. White collar jobs are gonna be wiped out. So generally, like high achieving MBA holding, you know, more highly educated people are going to find themselves high and dry. Those with money to invest though, will be able to make a lot of money during this period.

Those who are in the trades are going to maintain stable jobs for the foreseeable future because it's gonna take a long time for us to catch up with robotics. And. So the, the really big disruption is going to [00:29:00] be just a hollowing out of what many people think of as the middle class or the middle class is just going to change from what historically has been seen as more of a college education holding I don't know, like a higher social class kind of group to a high earning, but trade degree holding and maybe.

Not seen as like coastal elite culture style person, which I think is kind of great and more close to the American ideal. Yeah.

Malcolm Collins: I, I think people are just underestimating a few things in a lot of their calculations here. It's even within the high fertility countries, how few of those high fertility people are big economic contributors and big you know, like, like the type of per person who's gonna be inventing the next AI system.

I mean, take a country like Israel, which we, I do la like secular Jewish [00:30:00] populations conservative religious Jewish populations have decent fertility rates, but they're still absolutely stomped by ultra orthodox Jews. Many of whom are not the type of groups that are going to develop cutting edge AI systems.

And that, you know, as our governments take more and more of a burden to care for these populations that's going to hit us more and more going forwards.

Simone Collins: Yeah.

Malcolm Collins: And that's gonna change like with daily life a lot. I mean, I think a lot of kids aren't even really planning to enter the economy right now, which is such a a, an interesting sort of phenomenon.

Simone Collins: I 100% agree. And can you blame them? I mean, I think a lot of people in Gen Z or and or Gen Alpha have already more or less decided like, I guess that's not gonna happen to me anymore. So we're there. This is the reality we occupy. Now the question is what's gonna happen after [00:31:00] the shakeout? Right now the earthquake is happening.

What happens after the aftershocks have mostly passed and were in some form of new normal? That I don't know. But like I said, you know, trade's good. Building a public reputation and specialization that is likely going to maintain relevancy in a post a IH. Good if you wanna have a job. Man, mechanical engineering.

That seems like a pretty good place to be. 'cause that's one place where I just, I know there's gonna have to be so much work done in order for us to get to that full, full on a AI age. We're, we're just super behind in robotics and you can see that.

Malcolm Collins: But I'd be like, I think that the bigger thing that you're missing with all of this is when I'm going over all this and I'm going over the geopolitics of all this,

Speaker 3: okay.

Malcolm Collins: Is going forwards how much, which country you happen to be in is going to matter. I've lived in an age [00:32:00] with very little war. Like the fact that there is a war in Europe at all right now, people are acting like is absolutely insane. When, you know, historically wars were very common between regions.

If you, if you look at the rate of war in the world right now, like it's like a super low rate historically speaking I don't think that it's, so, it's not just that we might have now, are we gonna have a more. Quote unquote, traditional wars. Maybe not, maybe not even traditional terrorism, because keep in mind, older people don't do this stuff as much.

They're just not as radical as other groups. But we've gotta ask what does happen once countries begin to become economically unfeasible? Like what is actually going to happen across Latin America and Europe when they hit a a, a dependency ratio cascade, like I, I think. We don't know. Or actually, I, I can sort of, I'll try to map this out.

I think that Japan and Korea are gonna figure this out in some way. It's gonna be hard and it's not gonna look nice. But they'll figure out some solution not for saving their [00:33:00] populations. I think that their fertility rates are going to stay pretty bad. You're

Simone Collins: just writing them off?

Malcolm Collins: Oh, yeah. I'm just saying the preventing a complete government collapse due to their social security system not working.

Hmm.

But I think that then some other countries are gonna be like, oh, well we in Europe will be able to do what they did. And I'm like, no. Like South Koreans are much more disciplined than you. I've worked with both of these populations before I lived in South Korea, I lived in Europe. Something that you implement in South Korea isn't necessarily gonna work in the uk.

And so I think that that's where we're gonna see some really brutal collapses, Europe and Latin America. And. I actually might even recommend people to seriously think about immigrating out of countries that are in really, really bad dependency ratio situations right now.

Simone Collins: So, you know, maybe we should do a whole episode on this, but I feel like many Latin American countries not due to some wise form of preparation, but perhaps due to a lack of [00:34:00] trust.

Conscientiousness when it comes to filing taxes or things like that, or like a an expectation of corruption, meaning that you've had to make a more trustless society, have set up social services in a way that could possibly be accommodated by demographic collapse and reduces the incidence of dependency ratio cascades.

For example, in the United States right now, people paying into social security actively like us as, as active taxpayers. Our money is being used by people who are draining the system. Like we don't, you know, you can log in and see your account, but that's your money ain't sitting there safe. Whereas in Peru where we worked for a while, we learned through having to manage all of the account deposits and reporting that citizens have their dedicated.

Bank account in Al de Peru [00:35:00] that is its own bank, with its own branches, where employers have to deposit money into your retirement account, into an unemployment account, and they're real accounts that you can see, and that's your money sitting there. So. In that sense, like whereas we're in the United States going to see social security collapse between 2032 and 2036, probably what's gonna happen is they're just gonna start devaluing the US dollar to a certain extent.

And, and, you know, our, the, the purchasing power, power of a dollar is gonna go down as it just kind of make up for it by being like, oh, don't worry, we're just printing more money. It's fine. Whereas in Peru. At least when it comes to retirement accounts, they don't need to like find the money to pay people out.

Yeah. If I understand how things are being run correctly. So I wonder if maybe based on the way that some society's social safety nets have been set up, it's gonna be okay. For example, like similar [00:36:00] thing happens in Peru with unemployment. The way that UN unemployment works is that you as an employer have to deposit money into.

Your employee's individual unemployment accounts, and we have had employees ask us to fire them. So that they can liquidate those accounts and use the money for like, other stuff and then like rehire them when we're like, we're not, we're not doing that. We're not gonna do that. But like that the money is real.

Whereas what we do in the United States is pay into this like vague state unemployment system and it's not really clear what happens when you lose your job. You have to apply for it. There's all these other. Hoops you have to jump through. Maybe you'll get it, maybe you won't. It kind of depends on like how you were fired and how long.

Whereas like, no, it's super clear in Peru, money gets deposited into that. Periodically you can log in and see exactly how much money is in that account. So like the longer you've worked somewhere, the bigger your unemployment account gets. And when you are fi, [00:37:00] when you lose your job or are fired, that money is now yours and you know exactly how much there is.

And there's no application process. There's no. You know, do you qualify? I don't know, because it's your freaking money. So I, I do wonder if there are some countries that are counterintuitively perhaps, or due to the, the nature of their infrastructure not as screwed because they didn't use as much of the Ponzi scheme, not model as other countries.

What do you think?

Malcolm Collins: I mean, Peru just has a fantastically, like, designed a lot of parts of, it's, it's, it's like, for example, when I pay my local taxes there's a little envelope for putting your credit card information in and they're just like, we'll just charge you your taxes. And they give you a brochure of every day.

Yeah, you can

Simone Collins: go on autopay. It's just like a Netflix subscription. But they also give you a beautiful booklet that shows you all the nice things that have been. Used to, to improve your local municipality when you pay those taxes, which is just so nice. I'm like, yeah, take [00:38:00] my Absolutely. You're doing something that's great.

Yeah. Auto set up.

Malcolm Collins: Yes. Yeah. I but so yeah, there's, there's systems that are better, and you might be right about this, but Peru more broadly, if we're just gonna talk about Peru, is completely. Because basically all of Peru is Lima Lima's, like a third of the population of Peru. Hmm. It's a huge chunk of their economy.

Hmm. And Lima is, I think, the largest city in the world, in the middle of the desert or one of the largest, but it's in a giant desert. Yeah, you really

Simone Collins: feel it. Like as soon as you step out, you're like, am, am I on Mars? It looks like Mars. It's this red sand. Yeah. As soon

Malcolm Collins: as you can get outside of, of, of the city itself, in the city, it feels like you're in like a, a, a jungle oasis of, of, you know.

Yeah. Really nice stuff. All, all the cliff edge, the ocean, but the problem is. The problem is, is that the water that the city relies on is gonna dry up in something like 20 years. Not, not that long. It's comes from, well, let's take it really good.

Simone Collins: I feel like AI could really help with de desalinization [00:39:00] technology, and then they're fine.

Yeah. Elon has mentioned

Malcolm Collins: that they might be able to de something with desalinization. We'll see. But yeah. I wonder we have to hope also keeping going. We really need

Simone Collins: nuclear to work. We really need desalinization to work. Yeah.

Malcolm Collins: A lot of the developing world is propped up by demand from China, right? Like Yeah.

A lot of these countries, like, like Peru, a lot of Latin American countries, a lot of African countries make a lot of their money selling commodities. A lot of these commodities are basically building materials, which are used to build this giant real estate bubble that happened in China. Mm-hmm. With China being at a TFR of 1.2, you know, you need to look like, you wanna know the future of your country.

Don't just look at your fertility rate look at a breakup of who's buying your stuff and then look at their fertility rates. Mm-hmm. Because if their fertility rates are bad, that's gonna hit you really bad as well. That's the future of your economy.

Simone Collins: Yeah, yeah,

Malcolm Collins: yeah.

Simone Collins: What else is there to say? I mean, that's.

Malcolm Collins: Well, it's just, it's just such a thing when you're thinking about the future of [00:40:00] geopolitical control and AI and all that, to not get high, high, high fertility rates caused by poverty, confused with actual high fertility rates as a lot of people do.

Simone Collins: That's fair. Yeah.

Malcolm Collins: That's underrated. Future relevancy.

Anyway, I love you Simone. This is a very interesting conversation and a good. Sort of catch up for people who haven't heard this stuff in a while. And very excited to be giving this speech to some very important people in the near future.

Simone Collins: Me too. Yeah. Looking forward to our drive time together.

Malcolm Collins: All right. Bye

Simone Collins: I think I figured out why you've been so irritable today and it's, I was deprived of my morning walk with you.

Malcolm Collins: Oh, I'm an addict.

Simone Collins: That's what happens.

Malcolm Collins: You've been, well, tomorrow we're gonna be in the car, DC and back. Yeah. So that's gonna

Simone Collins: be a good day. Although. We may have calls on the car ride, but

Malcolm Collins: Oh really?

Somebody's trying to That's okay.

Simone Collins: There'll be [00:41:00] so many hours. We'll have plenty. Yeah. Well, I mean, we're gonna

Malcolm Collins: need to memorize that speech and blah, blah, blah, blah, blah.

Simone Collins: Yes.

Malcolm Collins: I appreciate your work on putting together the slide deck. Make sure you get that for me so I can review it tomorrow morning as I get an episode ready to go.

Simone Collins: Yeah. After dinner, I'm gonna finish it up. It will out. All right. That

Malcolm Collins: works for me. The, the comments on the episode today, I was so surprised that it did bad. The one on AI and like the Silicon Valley people, the becoming religious because of ai. And I had another one prepped on the same topic because I found a really interesting article on this trend and it did really bad.

And so I, I don't get it. I thought, I thought our audience would love that. I mean, you

Simone Collins: could make it something that we put on. Patreon for one of our Patreon only weekend episodes.

Malcolm Collins: That's really good idea. Yeah. That's the type of thing that we would like. Alright, let's do that. Simone will let me, we created a book out of her personal diaries from the first year we met.

Mm-hmm. Called Into the Heart of Dork Ness, which is the best

Simone Collins: title ever book we

Malcolm Collins: [00:42:00] published. But she wouldn't let me I was like, oh, I'll release it on Patreon. And she's like, you absolutely will not. Our platform is too big now. I was, well, what? It was gonna be our debut book and now I can't even publish it on Patreon.

Simone Collins: Yeah. I mean, someone might convince me someday, but hey, I really trust our friends who are like, whatever you do, don't publish.

Malcolm Collins: No, what she said was, is it just wasn't entertaining to read as we thought it was. But I think that that was the case because she had no, not the personal investment in us, that somebody who subscribed to her Patreon would, they would be very interested to, what are Simone's inner thoughts when she's first meeting Malcolm in the first year they're dating when they, she's promising to break up the, you know, I'll only date you if you break up with me, et cetera.

Like, what, what was she thinking during their breakup? Like, this is all, I think from a. You know what our, our podcast fans can, can weigh in on this and, and you can tell Simone mm-hmm. Whether or not she needs to publish this to Patreon. Mm-hmm. [00:43:00] Maybe, maybe to a special tier. Mm.

And then the comments on the AI religion video were just like, not, not that interesting. It was just like, oh, there dumb atheists taking too long to figure it out.

Simone Collins: Some people were sharing specific thoughts on specific elements of religion. Some people. We're trying to argue that AI is a false God, but you were never saying that AI was a God.

So I think they weren't really paying attention. Yeah, it was a mix and there were, there were some people who just. A lot of people just really enjoyed the subject like you, so I don't, well, and

Malcolm Collins: this is where people are being stupid. AI is not a God, nor would we argue that it's ever going to be a God.

But it is an intelligence and it is the, like us, a token predictor. And it is the first orthogonal intelligence we have ever encountered. Which means. That it is very useful in attempting to [00:44:00] model because go God, a, a supernatural entity from the perspective of most people. Certainly an entity that is, that is different from us in some incredibly meaningful way.

Like as, as different as we are from ai. By looking at how AI is different from us we can begin to understand the different ways that thought machines can be different from each other. And this is useful when attempting to, to model out supernatural entities and stuff like that. Mm-hmm. So I just, I don't think it's something to just throw away and be like, Hey, this is a pointless thing to, to not engage with.

Anyway. I love you Simone, and I will get started. I

Simone Collins: love you

Malcolm Collins: too.

Speaker: Yes, you are. They are. They're, yes. I buy my new house. Oh, honey. Hey, this is my new house. Hey, dad's dad. Wait, I know. Hey, that's our dad. Because see, that's.[00:45:00]

Hey, stop. That is a house that doesn't like the house. Looks like that's, yeah, that's what the house looks like and

that.

That garage,

but that's our daddy house.

Okay. Don't. I'm neighbors with you. I'm neighbors. Okay. Yeah, my house is your house actually. [00:46:00] Okay.

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