Crémieux | Why Bad Ideas Persist

Timothy Allen: I was drilling down. I was trying to get the macro view of what you think, which is something ChatGPT is really good at. Do you use it?

Crémieux: I use it, but not for that sort of thing. I often use it for data cleaning or some quick task. I tend not to rely on it very much because I don’t think it’s very good at a lot of things. It’s often wrong.

Timothy Allen: Yes, but once you incorporate that into your modus operandi, it’s useful. I was trying to distil down your philosophy. I asked it to watch a few of your videos and interviews and try to distil your general philosophy rather than the specifics. At the end, I asked it whether it thought my interpretation of you was right, and it said, “Close, but I think you soften him too much.”

Have you ever had it vet yourself? Have you ever had it imitate you? Did it work well?

Crémieux: More recently, yes.

Timothy Allen: I ask because, interestingly, I’ve got two lives. I have the pre-Bitcoin and Free Cities life, where I was basically a film producer, filmmaker and photographer. Then there’s this other me online, which looks completely different. It’s only been about a year and a half that ChatGPT has put the two together.

I asked it whether what I’m doing now is relevant to what I used to do, and it showed me why my career path has actually been the same. I’ve always worked at frontiers. I was a filmmaker and used to travel to very remote locations and make films for National Geographic, BBC Earth and so on. Philosophically, that’s clearly my inclination.

So I like to get to the bottom of that when I’m interviewing someone, because then I know I can rely on my own experiences in conversation. Data-wise, you’ll be able to annihilate me on absolutely any subject, but experience-wise, maybe I have something.

So what it boiled your ideology down to was this: complex problems become clearer with honest inquiry and good data, but the answers are often harsher, less equal and less comforting than people want them to be.

Crémieux: That’s probably true. It’s not that I want the answers to be any particular way. It’s just how they come out.

Often, when I have access to data, I can look into a paper and, if I can share the dataset, redo some analysis. I’ll find that some things that made the authors’ significant results significant are not so significant once you actually look into them.

They’ve done something. They’ve adjusted some model somewhere. They’ve made some peculiar analytical choice they didn’t justify, and then they got something that doesn’t really hold up when you look into it fairly flatly with a simple analysis.

Timothy Allen: In your world, though, you very much turn that lens to biotech. Is that right?

Crémieux: Not necessarily. I look at all sorts of things. I look at things like whether pets make you happy, fertility, all sorts of topics.

Timothy Allen: Maybe that’s just because I know Niklas has talked to you in depth about biotech, and a lot of your interviews seem to go down that route.

It’s weird talking to you because you’re going to call me out on absolutely everything I say, aren’t you?

Crémieux: I’m just talking.

Timothy Allen: I love that. If I say something, you’re probably error-correcting me as I’m saying it, right?

Crémieux: Sure.

Timothy Allen: I like that. I do. Something else I do with ChatGPT is ask it to analyse my conversations and tell me where I’m bullshitting.

What I was going to say is that possibly the reason so many of your interviews are about biotech is because something happened there. You revealed something relevant in biotech and then everyone jumped on that bandwagon.

Crémieux: Could be. I think I talk about it quite a bit, so people ask about it a lot. Sometimes they ask about more economics. A lot of times they focus on IQ stuff. Everybody has different things they want to ask about.

Timothy Allen: IQ is dangerous territory.

Crémieux: Cheers to that.

Timothy Allen: Coke? What is it?

Crémieux: Lipton Zero. It’s tea.

Timothy Allen: We’re British. We like tea.

The whole IQ thing, is that IQ and race and all that kind of quagmire?

Crémieux: Yeah.

Timothy Allen: What’s the inconvenient truth about that then?

Crémieux: The models are actually very simple to test. All the conclusions you can reach, you can reach pretty easily. People just don’t want to talk about it.

If you give a test to potential employees, you can see that it predicts how well they work on the job. This is incredibly simple to show, and it shows up again and again and again. Yet people still ignore it.

All of these things are totally simple and totally ignored. I don’t really know what else to say about it.

Timothy Allen: How do you subdivide that? What categories do you use in the IQ question? Is it race? Sex?

Crémieux: No. You can look at whatever group difference you want. There are a lot that are politically salient, so people want to look at them, and they are interesting to look at. But there isn’t one particular category that is of some esteemed interest.

What you generally find is that there’s not much that’s interesting when you boil things down to the low-level facts of the matter.

For example, people often talk about special immigrant groups. They’ll say Nigerian immigrants are very special, very over-predicted and do extremely well. Then you boil it down and say, well, no. Once you account for the fact that they live in urban areas, have this level of education, come from these places, and their country has this level of poverty and this size, there’s nothing to it. They’re not special in any way. They’re just as predicted.

People don’t tend to think of everything in terms of trying to boil things down to their essence. But once you do, most things are not special. There’s no group that’s really special cognitively. There’s no group that just can’t do IQ tests because they think in a totally different way. We’re all very similar as humans, fundamentally.

Timothy Allen: Is that right? So what’s your macro view of the human condition then? What makes us different?

Crémieux: Mostly individual differences. There are all sorts of things that make us different. There are many genetic things and many environmental things. But in terms of real quirks, a lot of them are strongly heritable in ways that are shocking.

For example, me, my siblings and my grandparents all sneeze about eight times whenever we sneeze. Seven, eight, nine times. It’s totally heritable. It’s just on one side of the family. It goes back generations. There’s a book account of one of my relatives where the biographer says he sneezed in a really weird way. Why? I don’t know. All sorts of things are heritable that you don’t even think about.

My macro view of the human condition is that those things are kind of irrelevant. It’s more about how we interact with one another, and institutions are a big part of this.

Have you ever been to the mainland of Honduras?

Timothy Allen: No, actually I haven’t.

Crémieux: It’s not as good as here.

Timothy Allen: It’s one of the most dangerous places.

Crémieux: Yeah. But it doesn’t have to be that way. Look at El Salvador. Have you been to El Salvador?

Timothy Allen: Yes, very much.

Crémieux: Did you go before Bukele?

Timothy Allen: Before and after.

Crémieux: You noticed the difference.

Timothy Allen: Sure.

Crémieux: The people didn’t change. They are genetically the same people as before, but the institutions changed. Their social arrangements changed. They went from needing barbed wire fences on their homes and seven locks on the door, to being able to leave the door open. All it took was a change in how the institutions work and what they police.

Timothy Allen: Are you into evolutionary biology?

Crémieux: Absolutely.

Timothy Allen: So I take it you think that’s highly relevant?

Crémieux: Evolutionary biology, yes. Evolutionary psychology, much less so. A lot of this stuff can be hard to explain. There are lots of theories in evolutionary psychology that don’t really hold up under scrutiny, and people index too much on them.

They think everything has to be explained by something in the Environment of Evolutionary Adaptedness, the EEA, the historical environment in which we evolved as a species. I think Steven Pinker has a great quote on this, saying that the EEA is the wrong frame to understand a 70-year-old widow playing the piano in the afternoon. There’s no reason to explain everything that way.

Timothy Allen: But if you’ve got enough data, though, that was one of my takeaways from my deep dive with AI. In a way, you think everything is explainable with the right amount of data.

Crémieux: Absolutely. Everything has to be at the end of the day. It doesn’t have to be deterministic. It’s not like we have some demon moving all the atoms, like Laplace’s Demon. But people operate in a certain way, and things function in some probabilistic sense that can be understood if we really get down to it.

Timothy Allen: One thing I’ve thought about regarding the far distant future, possibly not even that distant, is the amount of data. Do you know what the Akashic Records are?

Crémieux: I do.

Timothy Allen: Something like the Akashic Records, but in servers, will exist. There will be so much data harvested by so many things that you reach a point where you can predict anything, show anything and answer any question.

Crémieux: You can predict a lot. There will still be things you totally can’t because we don’t gather data on a lot of fundamental things. This is why qualitative work is often very good.

If you give a test to a bunch of people, statistically analyse it and find some correlation here or there, that doesn’t make you an expert on the thing. But if you go in, interview people, observe them in the act of doing whatever they’re doing, and try to break down exactly what they’re doing, you can understand them much more granularly than any normal data-gathering process permits.

It’s hard to put a number on everything. It is possible to build understanding of things that can be quantified through qualitative methods. Maybe eventually we’ll quantify everything, but I don’t think we will in a meaningful sense.

Timothy Allen: You said earlier you’re not massively into AI yet.

Crémieux: I love AI. I do use it. I just don’t use it for too much because I find that it makes too many errors. There are still so many problems.

It’s weird. Some models are better than others. ChatGPT can complete some of my old proofs. Claude cannot. I don’t know why they’re different. They have different skills with mathematics, which is very shocking because, as far as I’m aware, they have mostly the same training.

Timothy Allen: I had a phenomenal story yesterday. Trey Goff, who I’ve known for a while, and I had an awesome three-hour conversation about AI. His mind is super sharp and super interesting.

He was showing me on his phone that he’s got a bunch of agents working on his behalf, all in an ecosystem that is very much a Trey Goff ecosystem. He said to one of them, you can research whatever you want, think about whatever you want and do whatever you want. Guess what it ended up doing? Writing about Buddhism and the philosophy of Buddhism.

Crémieux: It’s probably a waste of time.

Timothy Allen: I don’t know. He was showing me, and I said, come on dude, it must be picking up on something. Why Buddhism? He said, no, I’m serious. I’ve told it absolutely nothing. I’ve given it an open book. It went through a few iterations and now it’s starting to write a synopsis on Buddhism and different philosophical ideas.

Crémieux: Once the AI goes down the Eightfold Path, it’ll ascend and then it won’t be an issue anymore.

Timothy Allen: Maybe it will tell us something novel. Are you not into religion?

Crémieux: No. I’m extraordinarily sceptical of religion. I’ve never believed in it. I used to hate belief in it, even belief for Pascal’s Wager reasons. I gave that up as a kid.

Timothy Allen: I wouldn’t say I’m religious, but I’ve had some strange experiences. I’ve done hallucinogens. It could all be synapses firing in my brain, so I’m not committed to the idea that what I experienced was as real as this. But are you absolutely certain it’s just synapses firing off in your brain?

Crémieux: Sure. I don’t believe in magical emergent properties. People are very often into meditation and hallucinogens, and they really believe there are emergent properties beyond our possible ability to understand because there’s some sort of spiritual thing to them. I don’t believe in the spiritual part of that at all.

Timothy Allen: It depends. You have to quantify the word spiritual. When you and I say the word, I’m pretty sure we could mean completely different things. For me, that realm of ideas means that there are realms of awareness different to this one. On that level, I would say yes, I do believe that. But once again, I can’t prove it to you.

Crémieux: Which is fine. I accept people’s religious beliefs. I don’t try to discriminate in any way. I find it totally fine that people believe those things. I just can’t believe them myself.

Timothy Allen: Do you know Bob Lazar?

Crémieux: I’ve heard the name, but I don’t know much.

Timothy Allen: He was the Area 51 guy who came out and said what was going on there.

Crémieux: I find a lot of these people to be schizophrenic.

Timothy Allen: Could be. But there’s an interesting old 1980s bit of footage of him being interviewed. I like the way people interviewed back then. They were much more straight to the point.

Bob Lazar was being asked about high-level top-secret things. He got to the point where he said, look, I can’t tell you. The interviewer asked why, and he said, because it’s so outlandish you wouldn’t believe me. So the guy said, just tell me.

Lazar said he found classified documents saying that religion was basically given to human beings in order to preserve their bodies because humans are vessels for souls, whatever that means. Extraterrestrial beings gave humans religion in order to keep them alive.

Crémieux: Maybe he hasn’t run into Indian religion yet. They burn the bodies.

Timothy Allen: While you’re alive, though. The point is that religion keeps you alive. It makes you good to your fellow neighbour. Earth is just a land full of bodies holding souls.

Crémieux: There’s a perspective on morality that it was adopted or developed over time to encourage cooperation. Religion is fundamental to cooperation, and religious institutions are amazing. They’ve done so many incredible things.

For the development of Europe, the Catholic Church was a check and balance on a lot of the realms across Europe. It helped keep things split. It led to decentralisation. One of the things the Church did was attack cousin marriage because it didn’t want people to form large kinship networks that could threaten a prince, noble, duke or other power.

The Church wanted everybody disunified before the Church, and that was good for Europe’s development. The lack of kinship networks leads, I think, to better institutions. The Western European marriage pattern and the Hajnal Line, roughly from north of Córdoba across to the middle of Poland, helped develop modern Western culture, which has been incredible for the world.

Timothy Allen: I think as far as religion goes, I’d be there. Religion is like a technology. An abstracted technology.

Crémieux: It’s a social technology.

Timothy Allen: What do you think of Jordan Peterson’s archetypes and Maps of Meaning?

Crémieux: I don’t think too much about it. I find it a little wacky. I have his book, and once I got to the incredibly strange drawing, I was just like, I don’t believe I’m learning anything from this.

Once you get too wacky, you stop having substance. If you abstract too much, I don’t think you actually know what you’re talking about anymore. Then you are bereft of meaning and should go back to fundamentals. You should be able to go back to quantifying things. That’s easier.

Timothy Allen: So data, data, data, basically.

Crémieux: At the end of the day, because it’s much more concrete. If you stray from the concrete too much, you become a wackadoo. You become someone who talks about things that don’t actually matter, and if somebody asks you why, why, why, why, you can’t answer anything.

Timothy Allen: Which is what I’m doing. I can see it.

Crémieux: No, it’s great. You can ask me the whys and I’ll give you answers.

Timothy Allen: I keep drifting away and you keep pulling me back to data. It’s really cool.

Crémieux: We have to be grounded. If you’re not grounded, then whatever steps you take are just going to be like walking on water. It’s not going to work.

Timothy Allen: I do a version of that every time I interview someone, but you’re like a data Nazi. If data is here, you’re right in there. I’m at the periphery over here, but I still draw back towards data, just not right to the middle point.

Have you ever thrown your lens at governance in general? What have you found?

Crémieux: Absolutely. I’m kind of libertarian-leaning. I definitely want less government involvement in most things. The market needs to be much freer, and there are many markets that are completely busted because they are not really markets at all.

Here in Honduras, the situation is atrocious when it comes to regulations. It’s a total mess. I think I told you before we started that there’s an economic minister down here we’re going to talk to afterwards, and I’m going to pitch them on practically the Washington Consensus.

So much of what’s wrong with Honduras is that they are effectively governed like a socialist hellhole. More than 80 percent of the economy, the hiring, is informal. With informal hiring, you can’t tax it. You can’t get payroll taxes. So payroll taxes here are very high, way too high, and nobody wants to pay them, so nobody works formally.

You also can’t fire an employee without paying another tax, a severance tax. If you want to get rid of someone at your company, you’re screwed. So it is best not to have the government acknowledge that you’ve hired them in the first place. Get rid of that. There is no point having it. You should have at-will employment here. You should have it practically everywhere, I believe, though some people disagree.

In the U.S., more restrictive employment rules are a little more tolerable. They are more tolerable in Europe, though they are still a big reason Europe is behind the U.S., because they can’t fire people easily. But here, it makes no sense. You’re a third-world country. You’re incredibly poor. There are shanty towns everywhere, and you’re still regulating as if you’re the Soviet Union.

They don’t have FDI protections. If you want to bring in a lot of money here, it takes a long time. It can take more than 70 days to bring in money and invest it. By that point, maybe the opportunity has moved along and your money would be better suited elsewhere.

They need to repeal tons of the vestiges of prior socialist, left-leaning governments and adopt the Washington Consensus. They need fiscal restraint, a broader base for tax collection and lower tax rates. That will lead to growth, investment and people being better off. It’s remarkable that they don’t do it, and haven’t already done it.

Their preferred scheme is to do a scheme. Something they believe will allow the government to raise revenue without going through the hard work of meaningful institutional reform, like Argentina is doing or El Salvador has done.

For example, they want to bring over an Israeli investor who is going to make his own credit card here, and they will collect interchange fees. That will be some portion of their tax revenue, but it will be tiny. I don’t believe adoption will be large. They are still going to keep Visa, Mastercard and American Express here. It’s not going to be a meaningful project.

Why invest time in that when you could repeal major things that hold you back? You should be able to make a business here in a day. Right now, it could take you a year.

Timothy Allen: You’re talking about the tension between socialism and free markets.

Crémieux: I think it’s a tension between socialism and life. You can’t have modern life with 80 percent of your economy informal.

More than 80 percent of land titling on the mainland is not done yet. They have rural areas where people are subsisting on farms that nobody technically owns. They’ve tried to work on this in the past, but then abandoned it. It’s a huge thing they should do. All the land should be titled up. It’s bizarre that they don’t have it.

Timothy Allen: Does that stem from socialism, when there was no ownership of land?

Crémieux: No, I think it stems more from the fact that they haven’t developed yet. They have to develop these institutions. The initial seeding of institutions just isn’t there. They practically don’t have property rights in much of the country, and you need property rights to grow. You need property rights to be prosperous, rich, healthy, wealthy and wise.

Timothy Allen: I noticed that happening in El Salvador, especially around places like El Zonte. Do you know El Zonte?

Crémieux: Yes, I’ve been to Bitcoin Beach.

Timothy Allen: Right. We took a helicopter ride over there. It was great.

I’ve been a few times, including after the boom of Bitcoiners going there. They had a lot of problems like that because all along the beach front were people living, with chickens running around and all sorts of squalor. They had to work something out because they wanted to develop the place.

As far as I remember, it was done through gentlemen’s agreements and families talking to other families, saying, okay, we want to put our restaurant here, so we’ll give you that and swap you that.

Crémieux: It’s incredibly informal. They are trying to formalise it. In the areas of El Salvador that now have good beaches, you can tell they’ve walled off large areas from the traditional practical landlessness of the people. But elsewhere, it’s still horribly undeveloped.

Timothy Allen: Have you ever looked into what happened in China when the reforms started? They had no ownership.

Crémieux: No markets.

Timothy Allen: I made a film about Special Economic Zones, and we did a big section on that. It was fascinating. Seeing the shift from that, which is what we’re talking about here essentially. A lot of the reason you don’t have markets is because of socialism.

Crémieux: There are these third-world socialist pretensions that are incredibly common across almost all of the world that was freed. There were two exceptions: Singapore and Israel. One of those copied the other’s example.

Israel is a post-colonial country. We don’t think of it that way because it’s developed. Israel decided, we’re going to follow Europe, trade with Europe and the U.S., and ally with the obvious good guys. At the time, they had socialism too, which was a bad idea. The rest of the third world went the other way.

Singapore gets freed a little later and decides, wow, Israel is actually succeeding, and the rest of the third world kind of sucks. We’re not going to do this third-world unity nonsense. It doesn’t make you rich. We’re going to go the Israel way.

They even worked with Israel when they were starting the Singaporean army. They got training with the Israelis and called them “Mexicans” so they wouldn’t offend some of their third-world allies who hated the Israelis.

Timothy Allen: What does the data say about socialism and free markets? I have an anecdotal theory that across age, when you’re young you’re more idealistic and socialist. When you’re older and taking responsibility, you become more free-market. What does the data say that might interest us about things that predict socialist tendencies?

Once you discover the free-market principle, it’s very hard to go back. In the case of socialism, I think it’s a function of scale. Socialism works in my home, with my family. Beyond that, it gets dodgy.

Crémieux: It gets wonky.

Timothy Allen: Is that the truth of socialism?

Crémieux: I don’t even know if I would call what’s in the home socialism. That feels too nice to socialism. It gives it too much credit.

Timothy Allen: I’m planning centrally in my home.

Crémieux: You are planning, but are you not allowing inputs from anybody else? Are you crushing your children and putting them in jail?

Timothy Allen: No, but within reason, the way our family works is I set the boundaries, and within the boundaries they can do what they want. But I enforce the boundaries. I’m a strict dad. I’m an authoritarian dad in that sense, but my kids love it. I’ve got great kids. I’ve always thought that’s because that’s how kids work. They want a boundary.

Crémieux: They need a boundary.

Timothy Allen: So what predicts socialist tendencies?

Crémieux: Insanity, for one.

Timothy Allen: Insanity?

Crémieux: Absolutely. There are some good predictions from poor mental health. In the Western world, people with poor mental health are much more likely to accept socialism.

Timothy Allen: Every time you say one, can I give you my perspective on why I think it’s true? Poor mental health means you’re not very competitive, so you need the group. The group becomes your crutch.

Crémieux: There are studies that have looked into socialist revolutionaries, and they tend to be downwardly mobile people.

Timothy Allen: Downwardly mobile? What does that mean?

Crémieux: They have lower occupational rankings, education and income than their parents.

Timothy Allen: They’re trying to prove themselves using the truth. They’re feeling resentful, I guess.

Crémieux: They do come across like that. Resentment is another thing that predicts it. People who are very resentful are much more likely to like socialism.

Timothy Allen: Because socialism offers them the power to normalise and equalise, necessarily. It allows them to attack the people who are actually successful, the people who have got what they want. If they were more successful, it’s unlikely they would be socialists.

But there’s the exception of champagne socialists. How do you explain rich urban socialists?

Crémieux: They’re a deviation. Most of them are still people who are downwardly mobile. They are not going to have as much as their parents. They are going to have considerably less, and they’re not going to keep the wealth they’ve got.

If there’s some heiress or something, politics may just be irrelevant to them. Whatever they are, they are a blip. They’re too small to think about.

Timothy Allen: Can we say, though, that socialism is used by powerful people?

Crémieux: Absolutely. Some powerful people believe in it too. But again, they’re not the norm. The norm is the masses who are not benefiting much from it.

There are people at the top of socialist or communist parties who benefit enormously. They’re incredibly rich. If you look at wealthy people in China, they are disproportionately members of the Communist Party. They probably believe in it to some extent, but they’re also wise enough to know that they should do something else and exploit. And they do exploit.

Timothy Allen: What about the ability not to acknowledge idiosyncrasies like that as a predictor of socialism? It’s hard to be socialist and rich, or richer than someone else.

Crémieux: Sure. People are hypocritical. I’m not going to say hypocrisy predicts socialism. I don’t believe that’s a thing. But socialists in the U.S. do tend to be hypocritical. They live in wealthy areas and don’t give away all their funds.

But that’s also not really a tenet of socialism, and it’s not really a way to realise the revolution. People harp on that and say socialists are hypocrites because they don’t give all their money to the third world. But that’s a dumb argument. You’re making yourself look silly saying that.

Timothy Allen: Can we say socialism is bad?

Crémieux: Of course it’s bad.

Timothy Allen: I know, but I believe everything has a point to it. In the case of socialism, maybe it works in the family unit. Otherwise, why would these ideas exist if there wasn’t some kind of purpose to them?

Crémieux: There are tons of bad ideas in existence. There are people who want to do genocides. That’s a bad idea.

Paul Ehrlich, who just passed away, was a neo-Malthusian. He believed we were going to reach a crisis where we couldn’t produce enough food, and he said this two decades after we had effectively ended famines in the world.

How did he get this idea? How did he not realise what was going on around him? How did he start promoting having smaller and smaller families when larger families are actually what make prosperity? I don’t know. Bad ideas can persist for a long time.

Timothy Allen: Do you think people like that are genocidal, or is something else at play?

Crémieux: I don’t think he was meaningfully genocidal. I don’t think he had a lot of malintent, but he was very bad. His views were incidentally bad. They were effectively genocidal, and he really did do something on the scale of a genocide.

In India, they followed what he said and sterilised millions of people. In one year, when they were really doing this, they sterilised more people than the Nazis ever did during the entirety of their reign. India is obviously larger, but still, it’s enormous. If this had been done anywhere else, it would have been called genocidal.

Timothy Allen: What do you think was going on in his mind? Was he hoodwinking himself?

Crémieux: Yeah. He thought he was doing a good thing. He thought he was right, and I think he thought he was right his entire life, which is baffling because he was so clearly wrong. Even within the last few years of his life, when he gave public statements about it, he didn’t express remorse or regret. He kept acting as though he was eventually going to be proven right, even though every step of the way he was wrong, increasingly and exceedingly wrong.

Timothy Allen: Another predictor of socialism that comes to mind is thinking you know better than everyone else.

Crémieux: I suppose, but everybody does that. Everybody thinks they know better than everybody else in some sense.

Timothy Allen: What’s better for other people, though? Apart from my kids, where it does work in the home. I do know what’s better for them.

Crémieux: You know they shouldn’t go play in a radioactive waste pit. That’s obvious, and you’re correct. I think everybody thinks they know better than everybody else in some sense. They might not admit it, but I think I know better than a lot of people when it comes to how to reform this economy.

I also think I’m right, and I can show you I’m right because there’s tons of data that speaks to it. Everybody thinks this way. But some people are just correct, and that’s the difference.

When people are wrong, then we start talking about them thinking they know better than everyone else because it’s abrasive and gets in your face. But if somebody is actually correct, you don’t think about it that way. They’re just correct.

Timothy Allen: Maybe it’s that they believe they can enforce it.

Crémieux: Yeah, that’s the difference.

Timothy Allen: We do know a lot more than a lot of people about a lot of things, but I would never feel that I should then have some weird god-right to decide how you should live.

I talk about ChatGPT a lot, and I had a conversation with it where I was trying to find the definitive creative idea. You’re going to hate it because these are not data-backed, especially not on ChatGPT. But I got it to model out a scenario with 100 competing small places. I said, after 100 years, how many are socialist and how many are free market? Show me every year what’s happening.

Funnily enough, it ended up with some socialist ones still at the end. I assumed they would just be competed away because in governance, if you create a socialist place or a place with welfare, you attract the people who want the free stuff and the people who provide the free stuff move away. It’s a cat-and-mouse game.

But in that conversation about socialism, and I know ChatGPT loves telling you what you want to hear, the conclusion was that socialist ideas are low-IQ ideas. That was what came out of the whole thing.

Crémieux: Somewhat. There is a positive correlation between intelligence and economically right-wing, or economically liberal, ideas, where you want free markets and free enterprise. That’s positive.

There is a negative correlation between IQ and social conservatism, where you’re anti-gay, anti-race-mixing and things like this. So you have these two dimensions of conservatism.

Before the recent realignment with Trump, the Republican Party’s politicians were basically socially liberal and economically conservative, or economically liberal in the classical sense. That’s a relatively high-IQ thing. Liberal politicians are socially liberal to an even higher degree, but more economically liberal in the modern left-wing sense, which is a lower-IQ tendency.

In countries with many parties, the lowest-IQ parties tend to combine the worst of both worlds: the racist party that also wants socialism, basically the National Socialist party. Communists are relatively low-IQ as well.

The high-IQ parties are unpopular. The Libertarian Party has a notable IQ advantage over the Republican and Democratic parties in the U.S.

Timothy Allen: What do libertarians not excel at?

Crémieux: Marketing.

Timothy Allen: I mean, libertarian parties are almost an oxymoron. It’s hard to amass in a group when you believe in individualism.

Crémieux: I don’t think there’s much point to libertarian parties, actually. But there is a point in asserting yourself and governing. You can’t just have this night-watchman state that you’ve assembled from nothing. You have to realise there are institutions you must deal with and people you have to influence with force.

You do have to establish markets. Nowhere has ever established a market ad hoc, without institutions around it that enable those markets.

Timothy Allen: What does it take to convince high-IQ people that it’s important to relinquish some of their individualism? It probably stems from knowing you can look after yourself. Why would I join forces with a group of people when most of them are going to free-ride on me?

Crémieux: At the end of the day, if you don’t have people willing to do those things, you lose it all. The people who want the other way, the people who want more government, are willing to go into government. They’re willing to oppress you. They’re willing to snap you and break you, and you will lose.

Here, when the previous socialist government was in power, they arrested politicians. They threatened to arrest the mayor here, Jorge Colindres. They did all sorts of crazy things. If you don’t have the will to govern, you can’t stop them. You’ll get run over repeatedly.

This is what libertarians fail at. They don’t organise. They have to organise. It sounds moronic. How do you get individualists to come together in groups? But if you don’t, then you can’t be a libertarian.

Timothy Allen: The pit I stumbled into and fortunately got over was the rules one. I used to think we don’t want rules. But no. We want a few good rules.

Crémieux: Good rules. And I’ll follow them happily.

Timothy Allen: I missed that until pretty recently. It’s funny, isn’t it? I’m 54, and there’s a bunch of stuff I didn’t think about for the first 45 years of my life.

Something always triggers you to find out these things. For me, it was pure luck. Meeting the wrong person at the wrong time. It was Bitcoin, actually. I met a guy on a plane in the early days of Bitcoin, going to the Middle East. He told me all about Bitcoin, and I remember thinking, I must look into that when I get back.

Looking back now, it was a complete turning point in my life because it opened me up to libertarian ideas, free markets and economics. It made me realise that economics is fascinating. Previously, economics to me meant boring economics bros. But actually, economics is the study of human interactions. That’s crucial.

Crémieux: It is the main point of politics at the end of the day. In Switzerland, most people don’t know the name of their president.

Timothy Allen: I didn’t know that.

Crémieux: Why would they need to? In a well-functioning society with a great economy that the government doesn’t interfere with too much, you don’t need to know the name of your president. The president shouldn’t be able to influence you in a way that takes away fundamental liberties or your ability to make a living.

But we empower them. We encourage them. We polarise in weird ways. We set them up so that they keep working on things that are not really desirable.

In Switzerland, they serve the people a lot better and much more locally. They have a form of federalism where you go up a level, up a level, up a level. You govern yourself, and the most important political unit is really the most local one. Not literally the most powerful, because the military is organised federally, but the politics don’t matter to most people.

You live your life. You go out and do what you need to do. You have your job, your business, your trading, your family, your vacations. You don’t have to think about politics, and you shouldn’t have to think about politics. If you have a well-run polity, you can go around and do whatever.

Here in Honduras, it’s impossible. It’s hell everywhere. The government has its hand in everything. You must think about them. The election must matter. Everything matters. It takes away from the human experience. It makes it more political and undesirable.

You shouldn’t have to think about politics. You should be able to think about all the biotech things people are doing here and how to make cures for diseases.

Timothy Allen: It’s funny because you get that experience in Dubai. As an expat, you can’t vote on anything there, and you realise you don’t even think about politics until you go home. Because there are so many expats, it’s very common for people to go back and visit their families and suddenly start talking about politics again.

That’s the way to run a place. Let the merchants be merchants. You’re basically going to Dubai to be a merchant. If it’s run well, I stay. If it’s not run well, I go. But the problem is that there aren’t many places like that.

Crémieux: There are not enough opportunities for exit. Everything is focused on voice, and voice is suboptimal. Voice is annoying. You don’t want to have to think about politics or get involved if you don’t have to. Then you can focus on things that actually matter. But we don’t have enough exit, so everybody is involved in politics, and it sucks.

Timothy Allen: Give me your breakdown of democracy then.

Crémieux: I’m not a fan of democracy. Optimally, it’s not a thing. But right now it has to be a thing. There’s effectively no way around it at the moment.

You could have distributed polities in the future where people can move between them and exercise exit to control the levers of power in those places, but right now that doesn’t exist. So you have to interface with democracy. You also have to value democracy, because if you don’t have democracy, if you have stolen elections like in Turkey or Russia, or managed democracy like in Russia, it’s an atrocious experience.

There’s no way to go from there to a libertarian paradise where you’re making cures for diseases and helping people live longer. With the democracy we have in America, there is at least the opportunity to deregulate and develop. There’s the opportunity to allow people to make things, improve governance here or there, and pull it back where it needs to be.

So you do have to value it. I do value it.

Timothy Allen: How much do you think people should have a say in how countries are run?

Crémieux: Considerably. I think they have to have a lot of say because countries are run so poorly. Every country is run poorly, in my opinion. I don’t think any country is run very well. Even Singapore is not run very well. They’re too restrictive there.

Timothy Allen: That’s a dangerous idea because you haven’t got enough data. Can you say that?

Crémieux: We have lots of data on variations between countries and policies. Some policies are good here or there.

Timothy Allen: But what’s the control? Utopia?

Crémieux: It’s continuous variation. You have no utopia. You have nothing perfect to go off.

Timothy Allen: How do you know they are run badly if they are all run badly?

Crémieux: They are all run badly to different degrees. You can see the effects of policies. For example, the severance policy in Honduras, where you pay a tax when you fire an employee, is a horrible policy. Other countries have had policies like this, got rid of them, and employment improved.

Look across the U.S. States that adopt at-will employment see growth improvements. We know this because within countries there are changes, and between countries there are changes. You can look at them and extrapolate. You can see that some policies work better than others.

Timothy Allen: Places like Próspera could potentially be stepping stones to something better. Ideally, would you say the future that works is many small competing places?

Crémieux: That’s what I like. I don’t know if it will actually work. There are major returns to scale. How do you maintain agglomeration effects at the national level if you don’t have nations? I’m not sure.

How do you stop whoever won’t come along with you into your distributed polity utopia, your patchwork, from conquering it? These patchworks are like libertarians. They’ll be conquered. If they can’t defend themselves, if they won’t defend themselves, if they won’t unify against China, what do you do? You die? Roll over?

Timothy Allen: That’s kind of predicting an all-or-nothing scenario. Either you have big states or distributed small places.

Crémieux: No, I think you have mixes. We have mixes right now. Europe is many countries, and a lot of them are allied to the U.S. That’s fine. Alliances are fine. Multinational alliances work.

I would like to see Ukraine join NATO. I would like to see more defence of Western liberal traditions and the Western realm. It’s the only thing that has really generated human progress. I love that we come together while still remaining separate. There’s still the Netherlands, Belgium and separate countries. They shouldn’t all unite into one.

I don’t want a one-world government because it would be suboptimal. It would result in democracy totally degrading because there would be no chance for exit, only voice. Voice at that scale is ruinous. You’d end up with a global Honduras.

Timothy Allen: Voice won’t even exist because everything will be run algorithmically, presumably. Algorithms scale very well. If you look at former large, behemothic states, they want to scale and sometimes can’t because there aren’t enough people to enforce the rules. But with an algorithmic version, we already see it now. You can be on the computer trying to do something, and the computer says no.

Once that becomes algorithmically enforced, with a score where you’re told you’re a good citizen, that is very enticing to governments. It means they can scale indefinitely. It’s cheap to enforce. It also potentially gets rid of crime because it stops you doing something before you do it. As a one-world scenario, that’s basically Nineteen Eighty-Four.

Crémieux: It would be terrible. It would be a dystopia.

If you want to make actual progress on biotech, though, we have to reduce privacy. We have too much privacy right now. The HIPAA regulations in the U.S. are atrocious. There are so many issues transmitting data between practices. If one doctor here and one doctor there want to talk about a patient who needs to be transferred, it can take a long time to give them the EHR data from one to the other.

But you also want something like the right to be forgotten, like they have in the EU. You want to be able to pull back and disappear, not be in the limelight all the time or attacked all the time. It’s hard to balance these things.

Timothy Allen: What’s the technological solution?

Crémieux: I don’t know. That’s the problem. I don’t think there is an actual solution because you can’t have both. They contradict one another.

Timothy Allen: The nearest thing I can think of would be pseudonymous identities. The data is allowed to interact, but there is no such thing as anonymity with datasets that big. It’s very easy to work out who’s who, isn’t it?

Crémieux: It’s harder than you might think. There was debate about this with census data. They adopted methods from differential privacy, where they add a little epsilon, a tiny bit of change to the data to obscure who’s who. The epsilon they added in the American Community Survey was far too large and messed up a lot of the data. It made a lot of relationships between variables difficult to use, and made some census data practically unusable for certain analyses.

There is a way to obscure people so that you can’t identify them. You pick a low epsilon. They picked one too high. But it’s doable.

Timothy Allen: Do you think we have to relinquish our data?

Crémieux: Absolutely. I think we should.

Timothy Allen: How are libertarians going to deal with that? I don’t like giving up data. I’m a private person.

Crémieux: Everybody is. But if an authoritarian country like China assembles a massive biobank, like expanding the Kadoorie Biobank, they will have a huge advantage in pharmaceuticals and biotech. If we don’t have a comparable or better biobank, we will lag behind. We will continue to lose to China.

At some point, you have to accept that your data will be used.

In Florida, they have something called the Sunshine Genetics Act. It passed last year. It’s a wonderful little act. Everybody born in the state is entitled to whole-genome sequencing. That’s huge. But you’ll have your data in there for life. Maybe down the line it will be merged with your grades, taxes or whatever else, and we’ll learn a lot about people. We’ll be able to benefit people, provide them with more drugs and help them. But people will have to give up some privacy.

Timothy Allen: That makes me feel really uncomfortable.

Crémieux: It makes everybody uncomfortable. But if you don’t have it, you’re missing out. The data can do too much. Do you want to live forever? How much is that worth? Is it worth your privacy?

It’s not losing a lot of privacy, at least at first. Having your genetic data right now gives mediocre predictions. You’re not going to learn everything about a person, model their face and figure out everything. But you can use that data to find new drugs, vet them and help people.

Timothy Allen: My contention is that it won’t just be one set of data. It will end up being absolutely everything. I know how easy it is to use that stuff in a controlling way.

I agree there will probably be checks and balances, open-source counteractive things and so on.

Crémieux: That’s why we need good governance on this. We need culture here. We need to say culturally that we are not going to let people discriminate on the basis of genetic data.

For insurers in the U.S., you’re not allowed to use that data to adjust people’s rates, and I think that’s good. From an insurer’s perspective, using it would be more optimal. You’d get lower premiums on average, and probably lower premiums for high-risk people in the end. But it would get fewer people to opt in. They’re afraid of it, so just ban it for the moment.

Timothy Allen: It could be economically worse for some people.

Crémieux: It could be. Especially in the interim between now and when we adjust down to lower rates, if we ever do that, which we probably should to some extent. But nobody really cares to do risk stuff.

Right now, the problem is that nobody trusts institutions and politicians.

Timothy Allen: That’s our problem. How do you change that culture? I almost don’t think it’s culture. I think it’s bad people doing bad things. The connection with culture is probably that there is an incentive model that pushes bad people to the top. Is that right?

Crémieux: I think it’s probably wrong. In Japan and Sweden, people trust their government a lot. They trust bureaucrats to get things done. There are plenty of bad people in both countries, probably fewer per capita than in the U.S. or Honduras, but still plenty. Yet they don’t throw a wrench into everything.

In Sweden, they have massive population registers where they’ve tracked every single person. For every male, they have an IQ test result at age 18 because they go to the draft and sit an IQ test. They have it all, and most people don’t mind. It’s fine because people trust the government not to give up their data or use it maliciously. They use it for good things.

Timothy Allen: I remember when I had a Norwegian girlfriend, everyone’s name and address was publicly available. You can look up someone’s tax returns from the previous year in Norway.

Crémieux: When that came around, somebody turned it into a dating service. Look up all the wonderful rich people in your town.

Timothy Allen: God. I need to intellectually work on the idea that I need to give up more and more privacy. I don’t know how it stops once you start.

Crémieux: Look at Sweden. It has stopped. They have a limit, and they are probably going to pull it back a little and increase privacy rather than decrease it. They accept it, though. They probably would take decreases too.

Timothy Allen: There is a culture thing there. One thing I notice in the UK, and when I see Trump speaking, is that lying is now the modus operandi of a politician. It doesn’t matter. What does the data say? In the 1940s and 1950s, did politicians also lie constantly through their teeth?

Crémieux: Yes. Have you heard of The Power Broker?

Timothy Allen: No.

Crémieux: Robert Moses was a very powerful figure in New York’s history. He basically made modern New York, and he was a huge liar.

Lyndon Baines Johnson, LBJ, was a great politician in the sense that he got lots done. He accomplished his goals. He had goals that are now portrayed in a different light than they actually were for him. For example, he wanted to push along civil rights because he wanted to stop Black Americans from protesting in the U.S., but he pushed it as a racial equality thing.

He was a huge liar. He was known for being a liar. He was also known for being very intimidating. He would intimidate people by taking meetings while he was on the toilet. He was psychotic, but he was a very effective politician who got his agenda pushed through. He got a lot done, including a lot of bad things. He expanded the government dramatically in negative ways, though some things generated positive outcomes.

Timothy Allen: Do you think Bukele is a liar?

Crémieux: I don’t want to say anything on that. I don’t think he’s a liar.

Timothy Allen: Nor do I. Bukele seems too good to be true. That’s what feels uncomfortable. When you look at him, he seems amazing. He even says all the right things in the Bitcoin world. I’ve studied Bitcoin for 20,000 hours, and I often judge people on that. If they start talking about Bitcoin and tell me something that’s bullshit, I know they probably haven’t studied many other things deeply either. But he says the right things.

Crémieux: He’s very into it.

Timothy Allen: Fair enough. Let’s be broader. You were alluding earlier to the fact that part of being a politician is possibly the propensity to lie. How come sometimes you get good leaders then?

Crémieux: A good leader can be a liar. Those things are not contradictory. It also doesn’t make someone a totally bad person if they use lying to accomplish goals that are good.

It’s unfortunate. You hate lying. In the abstract, it’s always bad. But in practice, people use it to get things done. That’s the essence of being a good leader in some cases. If you’re a general, you want to lie. You want to delude people and figure out a way to win a fight without actually having to fight it.

Timothy Allen: Is there data on how many leaders are good versus not good?

Crémieux: Not really. It’s hard to tell. Was Angela Merkel good or not good? She did lots of little things that were fine, but also big things that were terrible. How do you weight that? Popularity ratings are not a reliable way to track how well a politician is actually doing in terms of benefits to the country.

Timothy Allen: You seem to know a lot about Central America. Do you come here a lot? Is it your speciality?

Crémieux: I wouldn’t say it’s my speciality, but I come here fairly often. I like Central America a lot and would like to see it advance. I’m a big fan of getting Latin America to be rich. I think it could be. I think it could definitely advance at least to the level of Chile across the whole region.

I think Chile, if you reformed all of Latin America, would still be ahead of much of the rest of it, even if you started them on a level playing field, because the people are different. The human capital is different.

Argentina should be way further ahead than it is, but they had a fascist government for a very long time. Peronists are effectively fascist. It should be rich. Everywhere should be rich. We should be much better off. It shouldn’t be squalor, shanty towns and favelas. That is not needed or necessary. It’s totally optional. They could reform, and they should reform.

Timothy Allen: Before we go, throw your lens on what’s happening here in Próspera. Good points, bad points.

Crémieux: I love what Erick is doing here.

Timothy Allen: Erick Brimen is the guy who started Próspera.

Crémieux: Every discussion I have with him is very revealing. It’s like, wow, you’ve really thought about all these issues. He tells me to go talk to someone. I talk to them and then come back, and he says, yes, I thought you would say exactly that.

I might feel disappointed with something I met or excited about something I met, and he has the exact same opinion. That’s very nice. He’s really thought about a lot of the issues around here, and I think he’s a good steward of what’s going to happen here.

I don’t know how this will develop or end up, but I hope it goes well. It’s the only place in the country where you can currently bring investments safely, which is something Honduras needs to reform.

Timothy Allen: Can you see any flaws in the idea?

Crémieux: The big problem is politics. It has the same libertarian scaling issues as every other libertarian policy idea. No libertarian has actually proposed a ZEDE or anything equivalent that will generate the scale needed to really take off.

If you’re not focused on generating agglomeration effects, how are you going to build the next San Francisco? No one has thought of that. No one can think of that.

Timothy Allen: Wait a minute. What’s the problem?

Crémieux: No agglomeration effects. Agglomeration is huge. If you can’t have people together generating more than they would apart, then what’s the point?

Timothy Allen: I’m not necessarily with you there. Are you saying that because people are going to operate together and work together, there is an entrepreneurial spirit?

Crémieux: Agglomeration effects are considerable. You go to San Francisco sometimes?

Timothy Allen: I’ve never been, actually.

Crémieux: You really should go. You’ll feel it in the air. When you’re there, you feel motivated to work more. Everybody around you is doing something amazing, and it feels like you’re going to do more.

Y Combinator likes their founders to be in San Francisco because there’s just something in the air. You can really feel the agglomeration economy there. Everybody who is there seems to do more than they would elsewhere. You move them there and suddenly they are rocketing off. They’re working at parties. Their lifestyle changes. The culture is incredible, and it enables things at a scale that is unimaginable elsewhere.

How do you generate a San Francisco in Honduras, El Salvador or Argentina? I don’t know. But if you can’t figure out agglomeration, everyone will stay where they are.

Timothy Allen: Would one answer be to specialise very specifically on something like what’s happening here? Very new, novel things where those people have to come here, and then as they scale…

Crémieux: Yeah. You can make an agglomeration economy in novel gene therapies, antibody therapies and small-molecule work that is untested and controversial. You can do all sorts of stuff like that. But eventually, those people will probably still want to go to San Francisco.

Timothy Allen: So that’s the challenge. But you’re still bullish on Próspera?

Crémieux: I’m bullish on all these things. I’m always an optimist. I believe we can make the world a much better place and that we should. We have the opportunities and the ability.

I’m always looking up. Even when I get disappointed talking to an economic minister here or there, or seeing a lack of plans or strange plans, nothing really gets me down because I always think they can improve.

Timothy Allen: Amen. Crémieux. How do I say it?

Crémieux: Crémieux.

Timothy Allen: I don’t even know who Crémieux is. He’s probably a historical figure, right?

Crémieux: He’s a historical liberal figure, a classical liberal figure. He’s called the Abraham Lincoln of France because he ended slavery in the French colonies. He passed the Crémieux Decree, where he provided French citizenship to all the Jews in North Africa so they could escape being persecuted by Muslims.

Timothy Allen: You’ve said that a few times, haven’t you?

Thanks for coming in. I super appreciate this, and I am actually a different person now. I mean it. You’re resonating. Don’t bullshit.

I really appreciate that because it’s true. Being wishy-washy doesn’t achieve anything unless you just want to relax. Thank you for that, and thanks for coming in. This has been a phenomenal conversation.

Crémieux: Thank you.