Prolific and exceptionally perceptive author Charles Hugh Smith returns to discuss the insights in his just-launched book Will You Be Richer Or Poorer? Profit, Power & AI in a Traumatized World (the first chapter of which can be read for free here)

The current narrative that our standard of living is not only the best it has been in human history, but thanks to modern technology, is now improving at an accelerating rate.

Smith turns this belief on its head, pointing out the many and various ways — many of them “intangible” and not currently measured in dollars — the human condition is fast worsening. Health, purpose, social connection, civil liberties, access to natural resources, career mobility; these are but a few examples.

And technology is actually fast sending us down a darker path. One that empowers the central state, decimates jobs, destroys privacy, and has created today’s “landfill economy”.

I’ve written on these big, long dynamics of cycles, where there’s not just economic cycles or business cycles, but also social cycles where people find fewer reasons to cooperate with each other and society is fragmented. They often are associated with inflation or high unemployment, a decay of the real economy, resources becoming scarce and expensive, and so on.

Well, we’re clearly in that cycle — a Kondratieff winter, a Fourth Turning, one of Peter Turchin’s long cycles. And it’s only beginning.

Things are not going to resolve themselves quickly. There’s going to be a reset or a reckoning where we’re going to have to downsize and live within our means, and find some new social structures that are sustainable. It’s not just a physical, material world adjustment where we have to use less energy and fewer resources, we’ll also have to psychologically change. To not fear the changes ahead, but find ways to step into them positively.

Starting by trying to calculate the value of all the capital that we don’t measure is a very powerful first step. Realizing that you have all these forms of intangible capital that no one taught us to measure–or even recognize– is a very powerful process psychologically. If you start trying to prioritize the forms of capital that are important to you, it’s a kind of psychoanalysis because you really have to dig down into yourself and ask, “What forms of capital do I have that I can invest in another way of living, another livelihood, another form of community?”

There’s always going to be trade-offs. You’re not going to be able to get rich speculating in the stock and bond markets–and run a farm, and build a community. You’re going to have to give stuff up. You’re going to have to sacrifice some things in order to get what’s really fulfilling to you.

That’s wrenching in and of itself, but what’s worse is when people wait until bad things happen and then they realize the trade-offs have been imposed on them. Like they eat a highly-processed food diet, and they have a heart attack, and then they suddenly realize, “Wow, I’m going to die if I don’t change.” Or you get fired from your job or your corporation gets rid of your entire division. Then you’re forced to look at a different lifestyle and a different livelihood.

But we really do have the power to make those changes before catastrophe strikes.

I’m actually trying to deliver a positive message:  that anyone can do this. You may not be able to revolutionize your life in one fell swoop; but you can certainly make progress towards what’s important, and get busy building and accumulating the capital that truly is meaningful to you.

Click the play button below to listen to Chris’ interview with Charles Hugh Smith (51m:20s).

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Chris Martenson: Welcome, everyone, to this Featured Voices podcast. I'm your host Chris Martenson, and it is October 7, 2019 today. We welcome to our program, Charles Hugh Smith, a prolific author, operator of the excellent and very thought-provoking website, that's

Charles, hey, I consider him, he's a good friend and a regular guest of ours at Peak Prosperity and we're going to be discussing his new book titled, Will You Be Richer or Poorer? Profit, Power & AI in a Traumatized World. That's artificial intelligence.

Now, look, you know my view: I say the world is at this massive turning point. Really it is, and if you can't grasp the system sinking or the dimensions or really what we're facing, it's going to be a really confusing ride. And even if you can--and I'm not sure anybody can really grasp what's happening here--it's still going to be a hell of a ride.

Well, today we're going to do our best to make some sense of it all, and Charles Hugh Smith is really one of the very best in the game right now on that front. And I've really been looking forward to this podcast, so without further ado, let's welcome our guest to the program. Welcome, Charles.

Charles Hugh Smith: Thank you so much, Chris. Well, before we started recording, I was mentioning that your work has heavily influenced my thinking. And my goal in writing this book was to ask the question, "What is truly wealth?" And of course, the answer we all know is we measure mostly in financial terms, like how much money are we worth and how much we're earning, and so on.

But, of course, we're aware--at least, at an intuitive level--that there's a tremendous range of wealth that doesn't even get measured, starting with the natural world wealth, and social wealth, and societal wealth--various forms of infrastructure and culture that we really need to start measuring if we're going to navigate this devolution, de-growth era that we all know is coming.

Chris Martenson: Which, Charles, I love that you started the book there. Of course, I think that this is such a foundational moment in time that we've got to make sure we have our definitions right. And it's my belief that what people call "wealth" really is cartoonish, it's money. And I love that you start out by going through the definitions. So, let's spend a little time here, because I think this is important to set the stage.

So, when we talk about wealth, in your view, what's missing from the status quo definition of wealth?

Chris Hugh Smith: Great question. And I think I started the book with a quote about the ease with which we make our definitions. In other words, we measure what's easy, and so measuring money is really easy, and so is GDP, and all these other stuff. What's really hard to measure, so we don't bother or we make a mess of it, we make these kinds of wild estimates that are really misleading, is we don't really measure the value of the value of the natural world to us as individuals or the human community--or to our economy--and we don't really make any attempt to measure intangible capital.

Like what is liberty worth in terms of your own agency as an individual, as opposed to say, a person living in a very restrictive society where they really don't have a lot of wiggle room compared, say, to a freer economy and society like ours where, if you decide to up and move, you don't need a government approval to move to another state; you can just up and move? [Chuckling] I mean, there's some intangible value to that. And then there are cultural values that are also forms of what I call intangible capital.

So, if you look at what we measure--which is the easy stuff--and then you look at what we try to measure in a sort of... misleading fashion... like we all know clean air and clean water are valuable, but we don't really put that into our balance sheet, if you will... and then all the stuff we don't even attempt to measure, which we call "intangible capital."

And so, if you look at that, it sort of seems to me that we're talking about the iceberg. The financial wealth is the little bit above the water, and then the 80 to 90 percent of our real wealth is below, and we sort of... we sense intuitively, but we don't really measure it. And without an attempt to measure, how can we value it?

Chris Martenson: Yeah, and you get what you measure, of course--and I completely agree. So, it's often presented, I feel, in the status quo framework, that the money is the complete and total measure of wealth. Because we've sort of assumed away all these other stuff, but let me make this very topical--and I love the way you framed this.

So, to me, I do value democracy--although, I don't think it's actually practiced, but that's a different podcast for a different day--and I value freedom and all those sorts of things. So, let's now... let's wander across the pond for a second, over to the UK, which has been running a massive experiment on the nanny state, surveillance state kind of stuff. And what happened recently is there's a movement called Extinction Rebellion, which has said, "Hey, this natural world is important, and we're going to begin to protest the status quo," which is the machine that wants more paper wealth, wants more GDP, and that's the entire machine. And they're saying... they're very British, they're going to do it in a very polite way--maybe they'll block traffic or something, but they're going to begin to make their voices heard.

And so, how does the UK respond? And they just responded the other day, by busting down the door, preemptively arresting the leaders of this thing because they thought they were going to disrupt things in the future. So, let's see what they just did: they busted them without a warrant, they completely took what you might call freedom and democracy, rule of law, threw those right under the bus because they thought there might be some sort of pushback or disruption to the wealth-generating machine.

So, in your view, what you're just saying, is that in order to preserve the tip of the iceberg, the authorities in the UK were willing to literally bomb the bottom of the iceberg, [Chuckling] the core foundational things such as liberty, justice, rule of law--all of that. They just threw that right under the bus. Is that not, maybe, just an almost perfect metaphor for what you're talking about here?

Charles Hugh Smith: Yeah, absolutely, that's it's a huge diminishment of the intangible capital of personal agency, and... the rights that we supposedly have to dissent from the powers that be, or have a different point of view. And so, we're losing this intangible capital at a fantastic rate, which is why I titled my book, "... in a Traumatized World." I mean, obviously, if you were in that group--put ourselves in the shoes of that group--it is extremely traumatizing to be abused by police state, essentially, where you realize you really don't have any rights.

And what's weird about the current structure, which... we've talked about before, is on the surface, we still have these legal rights, but in the functioning real world, they're dissipating, they're diminishing; we really don't have these. And I think that's so true of... when we talk about the value of community, meaning that there's a resilience built into the community because people know each other, and they care about each other, they're willing to make sacrifices for other people. That structure is an enormous source of intangible capital.

And so, when that dissipates and nobody knows anybody, nobody cares about anybody, and no one's going to sacrifice for anybody, you've lost an enormous amount of capital. And so never mind your net worth and money doubled, you're a much poorer person than you were when you had all these intangible capital.

Chris Martenson: Well, and just to focus back on the UK--and of course, I'm not picking on them, we can do this for any country right now--but it was only last week that we saw a couple of headlines coming out, talking about the intangible capital; they know that hedgehogs, those cute, little spiky things that people have as pets sometimes, but they occur wildly in the UK--they're a beloved creature--they're down 95 percent in the past 40 years in terms of wild population. And turtle doves, from the famous Christmas song--turtle doves--are down 95 percent within the same timeframe.

So, the natural capital is just absolutely shredding; we know that the UK has about 60 harvests left before their soil is completely degraded and useless for growing things on. So, is it not true that the natural capital is worth protecting and defending, but more importantly, the sense of having a future, what is so important that you have to preemptively arrest people who are saying, "Time out, we think we need to rethink this," who might be saying, "We would like to leave to our children, a world where there's an infinite number of harvests, not 60 left, right?"?

To me, that sense of a future is the most important thing that's being diminished and stolen, and we're not even allowed to talk about it without being ridiculed in some way. I was interviewed by the BBC, and I felt that the interviewers were very ridiculing of view of saying what I just said, which is "Gosh, maybe we should think about the future." And so, I get the sense that there's a machine out there that has put a zero value on anything than money.

Charles Hugh Smith: Yeah, exactly. And you know, if we want to describe capital--like let's define "capital"...

Chris Martenson: Yeah, let's do that.

Charles Hugh Smith: "Capital" is wealth, capital is something which we want to accumulate capital, that's what "wealth" is, right? Capital is productive assets, right? And what you and I are saying is the insects, the amphibians, the natural world--never mind the minerals we mine and the energy we extract in fossil fuels and so on--but the entire natural world is a form of capital, right? And so, if that's being diminished rapidly, then obviously, we're losing capital, we're not accumulating capital. Accumulating capital would be increasing the sustainability of the natural world and what we extract from it.

So, we're losing capital there, we're losing capital in terms of our civil liberties. And then you mentioned the UK--and as you say, the same is true of the US-- there are really two economies in the UK, and it's apparently extremely striking--similar if you go to small towns that used to be industrial here in the States and then they've then emptied, and all that's left is what they call in the UK "jumble shops", like some sort of... second-hand stores, and the rest of the town is empty.

And so, I think part of what Brexit is about, as far as I can tell, is that the 10 percent that lives well in London are the ones who, of course, control the UK society and economy, and media, and their lives are peachy keen, everything is great, right? The 90 percent left behind don't have a voice, and as we're talking about, their voice is being restricted when they do raise that voice.

And so, the same is true of, I think, the entire industrialized world, and even the developing world, that there's a power structure that wants to maintain this sort of unsustainable, blindly-destructive system because it's benefiting them at least financially. And so, we really have to talk about the power structure that's resisting what has to--what would be a more positive change for the whole of humanity.

Chris Martenson: Yeah, and this is something I think you talked about in... you had a prior book out, right? And is it the one right before this one, the Total... I don't have it right in my head, but you were really talking there, about how this system, as it is--oh, I just remembered, it's Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic, right?

Charles Hugh Smith: Right. Right.

Chris Martenson: In there, you opened with the idea that--if I'm remembering this correctly--that the systems we're running, they're not just flawed, but actually, they're designed to fail. So, let's talk about that for a minute, because to me, this gets to the heart of everything. If we're going to redefine wealth, redefine capital, and think about what's our role in how this unfolds, if you understand that this isn't a matter of tweaking the system, because the system is actually designed to fail, well, then I think it's easier to step away from that and begin to step into the new.

Charles Hugh Smith: No, you're absolutely right. And if we want to talk about systems and capital, one of my topics is, "Will technology make us all richer?" Because that's a huge part of this story, the growth story that you referred to already, is that we're all promised "Well, we're all going to get richer because robots and AI are going to do all of our work, and all these new fabulous technologies are going to generate energy and super abundance, and life's only going to get better for us."

But when we start breaking that stuff down, then we start looking at, "Well, who's going to own all this fabulous technology?" Google, Facebook? [Chuckling] And how practical is it that all these amazing robots are going to come and do all our work, and that's going to make us richer?

And so, I sort of break it down with a very simple example: like everybody in the Peak Prosperity community, we all try to do things ourselves, right? We try to fix stuff that's broken, and learn more, and that's part of our resilience. And so, I've had to fix dryers and washing machines... leaks, breaks--well, sometimes, it's a belt or something mechanical. But largely now, it's the circuit board, the so-called "motherboard" that controls all these appliances.

Now, a dryer is a really simple machine; it's like a steel drum that spins around, it's got a motor--that's pretty much it. And then it's got these controls. Well, the controls have gotten fairly complicated. Now, you used to have two or three cycles, now you've got 17, and so on and so forth. Well, these boards cost about 175 bucks. Well, on sale, you could buy a dryer for about double that, like 350, 400 bucks.

So, you're talking about one part, which is a sealed, plastic thing, about 12 inches long, with, I would say, about 5 bucks’ worth of actual electronics on there. Because there's an Omron chip, and if you know anything about electronics, you know that these are commodity chips, they're made in the millions, they're pretty simple, they're very cheap, like $1.20 each, maybe 3 bucks each. And then a couple of bucks for the circuit board.

So, I mean, this whole thing is worth, maybe 10 to 15 bucks. But it's sold to you--by Sears- or whomever--for like 150 to 175 bucks. And then it's going to cost you another 175 to have somebody came and take the top of the appliance and put it in. And it's not that hard to do if you're familiar with stuff like that.

But still, well, what does the average person do? Well, they throw the dryer out and they buy a new one. Because it's like, "Gosh, it's going to cost 350 to repair, I can buy a new one for 425." And so, we have this landfill economy which is part of what you're saying: it's a system designed to fail; in other words, it's a system that's designed to generate immense waste that they can never be recovered.

And so, I was just asking, look, everybody thinks these robots are going to work perfectly--they can't even make a dryer that functions for more than a few years before that motherboard fails. And how is a robot going to be any different? It's not; it's going to be part of the landfill economy. [Chuckling]

Chris Martenson: Yeah. And so, this whole narrative, though, is based and rooted in this thing which... and this, I think, is the really important point--is that it takes time for human culture to catch up with the reality of things. And so, this idea of a consumer culture, I believe, is boring. Say, the mid-1700s, we really got developed with the industrial revolution and it really sort of got perfected in the early 1900s, and we're still living by it as if it were true.

And so, what you're talking about--and I've run into this personally with a washing machine, where that motherboard gave out, and I ran into that exact same idea, which was "I'm going to just succumb to the planned obsolescence of the corporation that designed that circuit board to break." And I resisted as hard as I could, replaced it myself, it was a painful process... I almost threw in the towel and just bought another one, because it's just easier to chuck it and start over again.

But that whole idea is rooted, at its formative level, in the idea that there's plenty of resources, and we can just keep doing that. There's no larger cultural awareness that it's immoral to do something like that, that you should be ashamed of being part of a world to design to do that, because you just want to sell more units so that your CEO can make more money--or whatever the story is, right? It's rooted in this idea that we can keep being wasteful in this way.

And as I wrote recently in about how the Green Revolution is bunch of junk--I called it a bunch of hot air--we don't have a lot of time to continue messing around in this story. And so, you talk about how AI is coming along, and the narrative that's being pushed at us is this idea that all these robots are going to come along, and they can replace almost every job, "But don't worry, this would make our lives better not worse."

I think it was 1929, John Maynard Keynes--he was a pretty famous lecturer--he predicted that later generation would only work 15 hours a week because of advanced technology. He was right: we shouldn't be working more than 15 hours a week--if we were sharing the abundance of all of that surplus energy. And we're not, of course. So, human culture couldn't catch up to the technology to allow us to work 15-hour weeks or even to share that equitably.

Your book centers on AI, and robotics, and all that stuff, that it's going to finally allow us to realize that dream of hardly working at all. Your book seems to argue otherwise, and I think because, maybe, you're rooted in the idea that people are people.

Chris Martenson: Right. And also as you say, there are limits on the resources. Like we just sort... I kind of draw upon your recent piece about the amount of energy that we consume that's fossil fuel-based, and that the idea--you lead the reader through what it would really take to replace all this. And it's a phenomenal kind of grounding--and for the Peak Prosperity audience, it's called Getting Real About Green Energy, in case you didn't get to read that one yet.

And I think the same can be said of lithium, and the same can be said of all these rare earths and stuff--all of which are essential components in windmills, and solar panels, and all this stuff.

And so, the same arguments that you explained of energy are also true of that: we would need to find Planet Lithium, and it would have to drift close enough to us, and that we could go on and get all the lithium we need to replace... [Chuckling] it's just not feasible.

And again, talking about capital, we're a rich society, so we do all of the stripping of capital and the destruction of capital elsewhere. So, if you happen to live next to lithium mine and your water was poisoned, and all the degradation that comes from digging gigantic holes to extract a few thousand pounds of rare metals, then you'd have a different idea about whether lithium batteries were going to save us. And so, you mentioned that we're even running out of sand. [Chuckling]

Chris Martenson: Yeah, I know you got to laugh, right?

Charles Hugh Smith: Yeah. And so, the whole idea that we're going to create 5 billion robots, all of which are going to work perfectly, and never break down, and are going to be super easy to repair, and then we're going to just dig up all of the minerals and resources needed to make these 5 billion robots--and then we're going to throw them out, because they're all going to break. And so they'll go into landfill, and we'll make another 5 billion.

And you talk about the Green Deal and all that stuff. It's like--well, so you know what the Green Deal is, is we're going to take all 400 or 500 million petroleum-powered vehicles on earth--maybe it's more than that, it might be 600 million--and we're going to throw them all in that landfill--never mind recycling, they're not that easy to recycle, folks, and that's why China gave up. [Chuckling] "Don't send us any more junk to recycle. It's expensive and it doesn't pay financially."

So, we're going to throw out 600 million vehicles and we're going to build 600 million new ones that are all-electric, and that's going to solve everything. And then what happens when those things die in five to ten years--because you've got to replace the batteries? "Oh, then we're going to throw those 600 million away and build 600 (million) more." [Chuckling] So, in other words, we're just not grasping that there are limits, and that the destruction of the world in order to try to keep this narrative going, we're actually poorer every day; never mind what our balance sheets say, we're all getting poorer.

Chris Martenson: Well, there's a sense here, that I share with you--that I think, increasingly, people are sharing that, "Look, something's wrong." And we see the protests in Hong Kong, we see the Yellow Vests in France, we see the Extinction Rebellion really popping up all over the world right now, we see the nerve that Greta Thunberg touched--and really caused a lot of people to lose their minds, because, of course, she touched on a belief system which evokes strong emotions in them. I saw very few people--as a quick aside, Charles--take Greta's argument and be logical or fact-based about them; I saw a lot of people get very emotionally upset that this 16-year-old was daring to say something along the lines of, "You all have messed this up and we might hold you accountable for that," which is a no-no in today's world, can't hold anyone accountable for anything--unless you're a little person.

But this is a conversation we need to have because I think you framed it well--and I'm going to quote from your book here, you said, "The belief in the ultimate goodness and inevitability of technological advances is often presented as a binary choice: one either believes that technology will eventually solve every human problem or one is anti-technology and therefore, anti-progress; suggesting there are limits on technology is thus heretical; for believers, there are no limits. Let's set aside the false binary choice and ask: are there intrinsic limits to technology? And if so, are we approaching any of these limits?"

I like this because, obviously, we can get technical and talk about the limits and all this and that, but it actually gets to... it's more of a belief system involved that some people really want to believe that technology allows us to keep moving forward, we don't have to look at any of the consequences of that; if there are any things that happened in the past because of technology, we'll just skate right through them; we'll just move so quickly that we'll get right past them. I guess this would be the Peter Diamandis Singularity, "We'll created technology, and we'll never have to die." We'll get to this magic moment of singularity of human technological nirvana.

And then there's the other side who says, "No, every problem we're trying to solve right now was created by a past technology." So, Joseph Tainter, minutes to complexity--eventually, that all catches up with you. That, to me, feels like the narrative war that's really playing out, and that's why I wanted to quote that piece. Now, I want to talk about that, because I think this is more of a psychological problem than a technological problem right now.

Charles Hugh Smith: Yeah, I think you've absolutely nailed it: it's that it's a form of religion or faith base that if you say, "Well, I don't believe that technology is going to solve, like say, the decaying social and cultural capital. In other words, the fact that our social and cultural capital is in basically a collapse, and I don't technology can solve that loss of intangible capital," then you're branded as "anti-progress," "lead-eyed," et cetera, and so the conversation ends right there.

Another thing I brought up in the book is an idea I borrowed from a financial analyst who's one of my readers, Simons Chase, it's called negative network effects. And this is... the network effect is the idea that when everybody starts using something, then it becomes more valuable as a system, but also becomes more valuable to each person. So, the internet is a classic example, we all start using it and we start... "Wow, we can access all this information." Our lives get richer information-wise, and yet the system, itself, grows because we're all contributing to it as well.

Well, the idea of a negative network effect is what we see in platforms and monopolies like when everybody joins a system and then it's controlled by an elite or a platform that, or a corporation at the top. Then, they can use that system to benefit themselves and everybody else is losing capital--or we're all getting diminished by being part of this. And I think that's a big concept because it plays out in social media, that we're told we're all benefiting from the craziness that social media is, when in actual fact, we're getting lonelier, we're having all these mental health issues from being addicted to social media, we're feeling diminished because we're not sending photos to everybody from Sri Lanka or whatever--somebody is always better than we are. [Chuckling]

And then we see it in healthcare--and again, we can refer to the UK and their struggles with their national healthcare system and our complete mess of a kind of quasi-public/private system, the worst on the planet in terms of waste and poor outcomes.

It's like we're all part of this system, we don't really have a lot of options out--it's like the healthcare system, you've got three insurers and that's it, and they all act the same, so it's like a cartel or a monopoly, and we're sort of trapped in these huge systems which extract wealth from us--financial wealth--and make us poorer in terms of things like health, mental health, agency... we're getting poorer because we're trapped in these negative system effects.

And if you look at health--let's say we want to look at health as kind of a manifestation of all these things we're talking about--we all know that we're getting unhealthier as a society; I mean we're really descending--quickly, if you will--and it's all like, "Why?" And you go, "Well, it's money, right?" People selling highly-processed food are making billions, and then the people making the drugs to counteract the highly-processed food effects on us are making billions, and so on. [Chuckling] And it's all like, wow, this is a really sick system, because it's financially rewarding for the few that own these things--these systems and platforms--but it's actually impoverishing the rest of us.

Chris Martenson: Well, a number of examples come to mind, and we're seeing--I think it's being swept well under the rug at this point in time, the fact that a lot of the opioid manufacturers and pharma companies--including the Sackler family who are pure evil, by the way, because they knowingly were getting people addicted because it padded their bottom lines and made them personally richer, knowing they were destroying lives all the way to the point of deaths.

So, that's pretty egregious, right? And if we get a full measure of justice in the United States over that, they'll have to cough up a few of their profits back. Ouch. And meanwhile, you get the little people finding themselves in debt or prison again--increasingly, you find people in prison because they couldn't pay fines once other outstanding things--in many cases, they were treated as like walking ATMs, which we learned after the Ferguson Riots, and the Justice Department came in and said, "Wow, a town of 20,000 people with 16,000 outstanding warrants." That's kind of weird.

And so that cultural capital is getting shredded and it's all in the service of making money and a few bucks. And I think we're going to discover, in this story, that maybe money isn't everything, that actually having like social and cultural capital is a really important thing when the chips are down. And increasingly, I think that's what we're seeing, is that people understand that the chips are about to go down and land on the table.

And so, my own personal example of this technology being too absorbed, and where I think it's culturally reducing us--I'll tell you what: I love YouTube, I love the instructional videos, I've learned so much. You want to learn anything? I just learned how to make a fire-operated desal plant. Wonderful, right?

I've also lost the ability to experiment and find things out on my own. And so, at this recent meeting I had in my house where some people got together and said, "Hey, should we actually think about forming a community at some point?" A big fear people came up with was, "Hey, if the internet goes away, I don't know how to do anything anymore, and that worries me." And I think it's a legitimate fear.

Charles Hugh Smith: Yeah, that's a great example of a form of intangible capital. In other words, this is what is so interesting to me, is that there are so many forms of intangible capital that we take for granted, one of which is our ability to figure stuff out. And if we become dependent on the internet to tell us how to do everything, we've lost another form of capital.

But I want to move on to my last couple of sections, which we recall the titles are "Finding new relationships between capital, labor, and the natural world." Because if we focus on short-term profits and then we all have this perverse incentive where, "We have to work to make money to have a livelihood," and so we're embedded in this system that exploits the natural world and reduces the total capital available to humanity all in service of a power structure at the top, and then the rest of us are kind of stuck there trying to make a living.

And so, we need to make a new set of relationships with much better incentives. And if you're going to focus only on short-term profits and financial capital, well, that we're already doing, because all those incentives are perverse.

So, then, my next section is, "Where will your capital flourish?" And I think this is where I'm really interested in what you, personally, are trying to do, which is to establish a community where people's own capital--tangible and intangible--their skills, their experience, their drive, their cultural values, where it can flourish. And that's what we're really lacking as a society and economy; there are just so few places where your capital can flourish. So, let's talk about how do we find a place--or make a place--where our capital can flourish.

Chris Martenson: Well, let's talk about that. Of course, very near and dear to my heart at this point, because ... I've been at this ten years--or 11. And by "this", I mean trying to use logic, and words, and reason to nudge people towards a conclusion--which happens to be how I see the world, but is just math at this point, and says, "Can't continue as is."

But more to the point, I think what you're raising very importantly in this book, is well, maybe it's not that it can't be preserved, maybe we shouldn't even want to preserve it in its current form. Because it's not life-affirming--in every measure of the word, life-affirming for humans and non-humans.

But there's really another way, isn't there? Where your capital can--and this is a full-spectrum view of wealth and a full-spectrum view of capital--where it can flourish, and that's what I like about Section 7 in your book, asking where capital can flourish? Because what you're really asking, nudging people towards, is the conclusion that, "You know what? Not only should we do better, but we can."

Charles Hugh Smith: Yes. Yeah, exactly. And to start, I'm kind of asking people to make a different balance sheet for yourself and your household, like, "Well, starting adding up what you do have in capital that you might not have even recognized as capital, and what's diminishing?" In other words, what capital are you losing in your current lifestyle? And so, if you have a three-and-a-half-hour commute to get a job you hate because you're trying to pay your mortgage, is that... are you really getting richer? I mean, you're hoping your house would double or triple in value, but what are you losing in the process?

And how else could we live where, if we measure all the forms of capital that we have, if we include the balance sheet of our access to stability, to trust, to integrity, to natural beauty, to a sense of security and safety... I mean, those are the things humans intuitively value. And so, how do we get there?

And it's like, well, we're obviously going to have to pry ourselves out of the matrix to some degree--and we also have to make a living in a system built around failure and perverse incentives. But how can we do this where we're going to be in control of our capital? And I think that's really a large part of my message is, "Lookit, we're going to have to take control of our capital to change things." And so, if you're working for a corporation that's headquartered 5000 miles away, using resources from 5000 miles away, eating food from 10,000 miles away, and basically indentured to banks 15,000 miles away, you're not really free; you're really trapped in a system that's destructive to you personally--as well as to the planet.

So, how do we break out of this? Well, it's not easy, right? [Chuckling] It's not easy.

Chris Martenson: No, it's not.

Charles Hugh Smith: But there are ways: we can improve it, we can move the needle toward those goals.

Chris Martenson: Well, let's talk about that, because this is obviously.... obviously, they're dear to my heart. But it's the direction that we have to go, it becomes as simple as saying, "We have to become the change we wish to see." But you raise something really important, which is that first step is really hard, because it's not like there are baby steps you take away from this system of command, control, slavery, destruction, all that stuff. As if Mammon came to earth and was allowed to run unfettered across the cultural landscape.

So, here we are, it's very hard to take that first step. What do you have as advice for people? And I see some of it here in your books, but I'd talk about how does somebody go about stepping away from that, knowing that that first step is really difficult, especially if you have that mortgage and kids in school, and car payments and all the rest?

Charles Hugh Smith: Right. Well, I think my premise here is, if we each take a balance sheet and start listing what's really important to us in terms of our capital or our access to capital. And so, if say, for instance, if you decide, "I can tolerate a BS job that's totally inauthentic because I'm able to make a lot of money." But somebody might realize, "You know what? I really need access to natural beauty, I really am sick and tired of living in a concrete jungle, and urban grime, I've got to figure out some way to have access to natural beauty," for instance.

And so, by listing all the kinds of capital and prioritizing, like, "What's really important to me?", then you can say, "Okay, now with those prioritized forms of capital, I can then start thinking about what situation would give me more of the capital that I want and value, and less of the capital that I'm getting, but I don't value?"

And so, in a lot of cases, it doesn't require moving from a particular place, but it may require moving to a different profession or completing gutting your expense structure so that you can afford to make some change. Or it may require moving. And I look at the people I know, and just kind of reading headlines, it looks like America is on the move; a lot of people are moving out of places where they no longer feel safe, they no longer feel secure, they feel like a tax donkey or a debt-serf, and they're moving to smaller communities. And so, the fastest-growing cities in American tend to be small, that people are gloaming [?] on these places, going, "Wow, life is actually much better here," and, "Hey, it's pretty here." [Chuckling]

And so, it's wrenching to think about moving, physically. But on the other hand, if you prioritize what's important to you in terms of all the capital that you own or have access to, then you're able to generate the psychological motivation to do it. In other words, if you say, "You know what? My skill set, I'm not even using my skills. I'm trapped in this stupid job, and I'm stuck here because it's paying me, but I want to go out there and use all my skills." Well, you're going to have to take some risks to do it, but if it's really what's important to you--your internal capital--then you'll find the wherewithal to make it happen. That's my own personal experience.

Chris Martenson: Now, the powers that be are doing everything they can to convince people not to do that. They like the tax donkeys to stay where they are, they've been jamming the markets relentlessly, and so a lot of people are maybe thinking, "Gosh, it doesn't... on one hand, it feels kind of urgent, I get what you're saying. On the other hand, it's a big step to take and there are a lot of signs out there saying, 'Don't worry, be happy. Stock markets are within a couple of percent of all-time highs, and maybe powering like it wants to go higher.'"

To me, I think that the media has been misleading us badly; I think the stock markets are just a signaling device of the government at this point in time--and its cronies--and it's hard to draw that line when the government’s tax stops and where Wall Street begins and ends. But I think that all of these things are actually terribly misleading to people and that what you're asking people to do is to take stock of their own situation, add up their own balance sheet for themselves to decide what's important, what's not important. Because truthfully, what the media is busy telling us important, is actually not only not important, but anti-important in the sense that I think it's leading us astray. Would you agree with that? And do you think there's... what percentage chance would you put on this all sort of resolving itself peacefully?

Charles Hugh Smith: [Laughter] Yeah, Chris, you know it's like I've written--in fact, I've written for Peak Prosperity, a number of pieces on these big, long dynamics of cycles, where there's not just economic cycles or business cycles or whatever, but there's social cycles where people find fewer reasons to cooperate with each other, and society is fragmented, and then you get... and they often are associated with inflation or high unemployment, or a decay of the real economy--resources become scarce and expensive, and so on.

Well, we're clearly in that cycle that is only beginning, and there's lots of cycles that we can talk about, the Kondratieff or the Fourth Turning, or the long cycles of Peter Turchin--we're clearly in that cycle. And so, things are not going to resolve themselves quickly; there is going to be a reset or a reckoning where we're going to have to downsize and live within our means, and find some new social structures that are sustainable, because of the unsustainable ends, and that's the phase we're in.

And as you said, it's not just a physical, material world adjustment where we have to use less energy and fewer resources, we also have to psychological change that this is not something bad and awful, that it's actually a positive change if we embrace it.

And so, I think just starting to try to calculate the value of all the capital that we don't measure is a very powerful first step, because just realizing that you have all these forms of intangible capital that no one taught us to measure--or even recognize--that's a very powerful, I think, process psychologically. And it's a form of... if you start trying to prioritize what forms of capital are important to you, it's a form of... sort of psychoanalysis, if you will, because you really have to dig down into yourself and go, "Gosh, what really is important to me, and what forms of capital do I have that I can invest in another way of living, another livelihood, another form of community?"

And one of my little sections here is called "Trade-offs, risk, and return." And of course, what I'm trying to do is be practical about it... that there's always trade-offs. You're not going to be able to get rich speculating in the stock and bond markets--and run a farm, and build a community... [Chuckling] Sorry, there's going to be trade-offs, you're going to have to give stuff up, you're going to have to sacrifice some things in order to get what's really fulfilling to you.

And that's wrenching in and of itself, and people tend to wait until bad things happen and then they realize the trade-offs have been imposed on them. Like they eat a highly-processed food diet, and they have a heart attack, and then they suddenly realize, "Wow, I'm going to die if I don't change." Or you get fired from your job or your corporation get rid of your entire division, then you're forced to look at a different lifestyle and a different livelihood. But we really do have the power to make those changes before catastrophe strikes.

And that's kind of what--I'm trying to end the book on a positive message that I think this is entirely possible--for everybody. You may not be able to revolutionize your life in one fell swoop, but you can certainly make progress towards what's important, and be building and accumulating the capital that actually is meaningful to you.

Chris Martenson: Well, thank you for that. And to close this up, I do think there's a generational piece coming up where a lot of the younger people--we saw those mass... I don't even know if I can call them "protests"--but anyway, mass gatherings of people around--they were huge, by the way--350,000 people in Montreal, I mean it's just massive, right?

Charles Hugh Smith: Yeah.

Chris Martenson: Coming out and saying, "We don't like what's happening to the natural capital in this, we want to do this differently." I thought it was heavily minimized in the press, which wants us to believe that we're only two China trade headlines away from lasting nirvana in the stock market, because we really, really, really have a terribly, terribly misleading set of people trying to preserve the status quo.

But generationally, we have young people coming out saying, "I don't see it, I don't see that story. You can take your planned obsolescence and your dying-on-a-schedule washing machines and shove them, you can take your lack of action on meaningful action on anything climate-related and shove it; you can take your destruction of the natural world and shove it."

And so, I think this is already afoot, and I love seeing the number of young people who, at least, are able to articulate the important two words I know, which are "Not this." We saw, again to bring back Greta Thunberg, was for people who did level some sort of a charge against her. Some of them said, "Yeah, what's her answer?" Well, if we're facing a predicament, there is no answer, and so at least, sometimes, you start with "Not this."

And so, what I love in your book, Will You Be Richer or Poorer? Profit, Power, and AI in a Traumatized World, Charles, it's all about taking stock for yourself, what matters, what doesn't matter, but really noting that there is the other side of this story that is never talked about in our press, which is that all of the technology that we think we love is great, but it has a cost. And once we really begin to add those costs up, we find that on balance, things are starting to become subtractive, not additive.

That's what I think is fueling a lot of the popular protests around the world; that's why I think they're so desperately trying to keep the markets elevated because they--whoever "they" are--can't allow the conversation even get started about what's happening here? But it's happening anyway. And so, I think we need to have this story told in many, many different ways, lots of teachers, lots of different ways of looking at it.

So, your book, Will You Be Richer or Poorer? Profit, Power, and AI in a Traumatized World... Charles, how do people get your book?

Charles Hugh Smith: Well, sadly, because I'm self-published, it's available through Amazon--one of the platforms. [Chuckling] And I am keeping it at a 15 percent discount for the next few days after this program runs. So, I would post a free section of it on my website,, where you can read the first couple of chapters, and see if you're going to get any value out of it.

But I do feel we're all getting poorer, but there is an upside to de-growth. If we learn to use less of everything, we can have a much more fulfilling life, and sacrificing all the bad stuff if not really detracting from us; we're actually accumulating all forms--all these other kinds of capital that we're not even measuring by entering a de-growth and embracing de-growth instead of going, "Oh, how awful we're going to use less of everything."

Chris Martenson: Yeah. Well, very well said. And I really enjoyed reading through this book in preparation for this interview, and I hope other people will take advantage of the 15 percent discount and get the book and read it because we really need to start talking about these issues.

So, thank you for taking the time for this interview, thank you for writing the book. I appreciate it.

Charles Hugh Smith: Thank you so much, Chris. I was thrilled to be able to talk about it with somebody that understands it.


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