Mark Mills [00:02:04] Well, what I tried to look at what I spent a lot of my life doing, whether it's writing about technology or investing in it, but especially writing about it is to look at the sort of step back. And it's it's a trivial thing to say, but it's actually hard to do. So to step back from the details, look at the architecture, the pattern of what's going on, but that requires that much you think you've seen the pattern to dove back in the details to figure out if the pattern is true without engaging in confirmation bias. That's obviously hard because we're all we're all creatures of our own biases. But I think there's something really big going on in our economy. And it's it's more than more than just computers. Computers have got faster. I mean, yes, they have. That's like saying airplanes got faster, which they did for a long time, you know, and then it stopped because physical limits were hit. And we'll hit physics limits on physics. We know computing as well. But that won't end the impact of computing any more than. You know, people thought we'd be having daily supersonic flight today. If you looked at the trajectory of the rate of improvement of the average aircraft from 1920 through about 1960. At 40 years, it was pretty amazing. And so a lot of people extrapolated that thought we'd all be flying supersonic on everyday flights and doing, you know, hypersonic around the world. And it turned out that was harder than people thought. Doesn't mean what. Never do. It was harder than people thought. A computing's very much like that where everybody's focused on speed. Remember the early days of computing? All the advertisers talked about how many gigahertz the CPU was. Then they stopped talking about that because the clock speeds didn't increase very much. Computing power went up, especially what you got for your dollar. But that didn't get much faster. Same kind of physics reasons. So I wanted to look at the implications of the semiconductor revolution in the context of everything else across the society. And I divided the world into the three buckets that are the only three buckets of what? Everything. Things that make up everything in civilization. Civilization is made up of just three big buckets of things, machines that we make to do stuff, grow, move, fabricate, transport, whatever. Machines of all kinds. Lots of kinds of machines. Materials that we build everything from. The quality materials we build stuff from is change or dumped materials because you can't instantiate anything without materials. We live in a material universe. The virtual reality exists. Physical machines. Just like in The Matrix. They're real anyway. And the third domain, of course, is information. Understanding the universe, the forces of nature, but also understanding the materials and understand the machines. It's obviously a symbiotic relationship among the three spheres. But when there's a revolution in all three spheres simultaneously, when there is. Profound advances that are materially different, no pun intended, than what we've been doing for decades. And they happened contemporaneously, more or less. That convergence is unusual and it's happening now. It's only happened once before in recent history, a century ago. From 1920, we had a very similar revolution in the three spheres of. And then of course, it was easier. The machine revolutions were, you know, the airplane, the car and electric power plant, those kinds of machines. And there were others, but that was the big ones. And then, of course, in materials, the revolution then was in alloys far superior metal alloys and polymers and pharmaceuticals, which was the diet of the chemical synthesis era and information we had. The dawn of instruments and ideas about science in the 1920s were truly remarkable, and we professionalized science roughly around that time. It had begun earlier. Same things are going on today, same same domains, same kind of confluence, which I think is, you know, profoundly optimistic for the world. That's not a naive optimism. You know, as I wrote in my book before, which was published before Russia invaded Ukraine, I said the obvious, you know, wars will always happen. Human beings are what they are. They keep fighting. I mean, I don't like that observation. But saying that we have an optimistic future is not a way of predicting that that we're going to live in a utopia without conflict, without political conflict, without racial conflict, without economic conflict. All those things are still locked into human nature. So they happen in parallel. So that's that's a long way of why I wrote it. But I wrote it because those things were in my head for some time in my work and my reading, and I've written a lot about each of those things separately and then. You know, I felt like it was an opportunity to synthesize it into a sort of one magnum opus about what's what's going on in the three domains and what it means for jobs, for health care, for entertainment, education, things that matter to people.
Mark Mills [00:07:38] Yeah. Well, the thing that the thread in the book, of course, is the cloud, which is why I ended up titling it the cloud revolution. So the cloud epitomizes. The confluence of the three spheres is built from materials that are really different from anything we used 20 to 50 years ago. It's obviously an information machine, but but far more important is it's an infrastructure and we don't make new infrastructures very often. So if you map out the history of civilization, let's stick in moderately modern times. I mean, the canals were the first sort of significant transportation infrastructure in the world and certainly in America, followed by railroads and, you know, telephony, telegraph and telephony and highways. Airways and the Internet. That. I mean, I've just about covered the whole that the whole schmear, right? That those infrastructures are incredibly important because the reason to call them infrastructure is that they infuse all of the structure, structure of society, and they're foundational. People use highways for much more than going to work. In fact, only about a little more 20% of total road miles in America are devoted to go in commuting pre-COVID lockdown and post-lockdown. It's only a couple of percentage points lower. In fact, it's lower still, but not a lot lower. Surprisingly, traffic around the world is back to where it was. Is any of us who've driven lately have figured out. But the highways are used for moving goods, for entertainment, for, you know, McDonald's was created, fast food restaurants were essentially created because of the highway. But you wouldn't call McDonald's a transportation technology. So we call a lot of things tech today that are built on information highways. But they're not tech. They use tech just like McDonald's was made possible by the highways. So infrastructure is a really, really important the cloud is an infrastructure, but it's not an infrastructure of communications. It's an information infrastructure that uses communications. When I say that, it's obvious when you state it, but it's important to have that in one's head because the cloud is different from the Internet as the Internet was different from telephony. It's a non-trivial step function change in what it represents. So it uses telephony, people use telephone, but, you know, it's actually using the infrastructure of it, telepathy, both wired and wireless. It uses the Internet, obviously, but it doesn't have a lot of the clouds. Functionality isn't on the Internet. There's more intra cloud traffic in a data center than there is traffic to and from the data center. And the more we do complicated things. A.I. to do machine learning to understand how to make that what how a virus is operating. For example, all that data churning doesn't isn't on the Internet. The queries are on the Internet. The knowledge it's gleaned from doing the turning comes back on the Internet to the scientist. But the majority of the data traffic is inside the cloud. So it's using the Internet as a way to connect to the world where it collects data and to human beings that want to know what the data is. You know, data crunching maids. So the cloud is different and it's different in that structural sense, but it's also different. If I were measuring it in physical or dollar infrastructure sense, it's really different. I mean, if you measure it in miles, which you can, because it's connectivity, it may be invisible. There are there are visible cables, you know, fiber cables being dominantly now. But if you measure it in ten miles, it's orders of magnitude bigger than either highways or airways. I mean, it's an astonishing network of hundreds of billions of miles of connectivity, which continually expands because the virtuality, the virtual nature of the connections, keep expanding because we can vote. That matters. I mean, I would just say it's consequential when you have a network that is so big and expanding so fast. Or if you measured it in dollar terms, which is another way of doing it, because all infrastructures cost money and we build stuff and we have to spend capital on it. It's actually fascinating to note that the annual spending on annual capital spending to expand what we call the cloud is now bigger than the annual capital spending globally to expand the electric utility industry. Pretty it's this is consequential. And if you sell, which is going to grow faster in the future, well, you don't have to be an analyst. You don't have to be an engineer. Economists know the cloud is going to grow faster because simplistically speaking, electric demand grows roughly with population and wealth, roughly speaking, and the invention of new things to do with electricity, of course. All right. So there's that. But the the clouds growth grows with our appetite to do something with information. And the if there's one thing that's infinite in effect, then are very few things that are infinite. The physics of the world we live in, it's probably information, the data, because the magnitude of the scale of what we want to collect information about and the granularity with which you might want to study it, it's essentially unlimited. And as I make it cheaper and easier to do to access and use a data. I'm going to have to expand the infrastructure. And of course, the key the last key thing about the cloud, which is phenomenal, largely different and everybody knows this. But I don't think people really this is a case where the hype is less is less hyperbolic than the reality, which is pretty unusual because the tech community is is very, very accustomed to hyping things, you know, disruptive innovation. This changes everything. No, it doesn't. A lot of things don't change everything. And some things don't disrupt what you think. In fact, the disruptor gets disrupted. I mean, it it's complicated, as they say. But but here's here's the thing that is quite remarkable. Obviously, a marginal dollar spent on a highway, but at best gets you that much more highway. Sometimes it gets you a little more highway. We get more efficient construction and more efficient at producing the raw materials. On a marginal dollar spent on a airplane, airways get you a linear increase in the airlines, roughly speaking. And as airplanes get more efficient and they have, you get a little bit of a bump. But everybody knows the marginal dollars spent on information systems get you much more than the last dollar, because we're still on this declining cost curve, the so-called Moore's Law, but it's more than Moore's Law. So the analogy I made in my book is, is if we consider a measure not of speed, but of what people buy, it's let's use transportation infrastructures. If we look at the dollar spent like a fair to go somewhere, some distance, not not downtown but to go to another city or go to another country. The dollars per foot per second. But because speed matters, the precious thing is our time. We want to get there quickly. More quickly. So how many dollars you spend per foot per second of transportation service? Well, that's actually improved 10,000 fold in the last century. But that's why there's so many people traveling in the world. That's why tourism has become a huge industry. It's why. Because it's gotten cheap to do by transportation. If measured in the in the metric that matters, dollar in dollars per foot per second. And it's remarkable when you're map that out from the sailing ship to the stagecoach, to the car, to the airplane. And the next leap, which I write about in a book, is actually the drone. It's not Elon Musk's airplane. It doesn't spaceship. Rather, it doesn't get to there. It actually is. The reverse is the trend. Space travel. Turns out it's a lot harder than the hype would say. We don't have we haven't conquered the physics of gravity yet, but we have done a lot more on the other stuff. So you got a 10,000 fold improvement in the metric that matters dollars per foot per second for the transportation service in a century. The the era of computation that was pre-computer got better at 16 fold per decade. So which is not nothing. You got almost 2,000% more computations per second per dollar spent. Computation of second dollar got better. 16 fold per decade. 2,000% per decade. The computing era, the first computing era. Jump that up a remarkable amount. Right we went all the way up to let's say was. A 2,000% per decade sort of like electromechanical error, was a 700 hit per decade misspoke and the computing error was almost 12% per decade again, and the measure was computations per second per dollar. The cloud era is growing at a thousand fold, not 1,000%, but a thousand fold in computations per second, per dollar per decade, or put differently in ten years. The measure of merit computations per second per dollar set of travel feet per second per dollar. In ten years, it's gone up 10,000 fold. Took a century for transportation to go up 10,000 fold. So that has you don't have to be you know, that has to be consequential. There has to have a have meaning. How does it get realized that what what forms does it show itself? Well, it shows itself and how we discover on how to use materials. It shows how we build and manage machines. It shows how we do education, how we communicate. It shows it how we do research and shows it, how we do how we do medical development. It shows that how we can change the very structure of how we allow health care to operate and democratizes, democratizes knowledge and information in ways that have to be unprecedented. So we're all we're seeing hints of all that already. But I think they're just hints. I think that's why I wrote the book and the things that we're seeing or begin to flower in the next decade. That's why the subtitle is Roaring 2020, despite the mess we're in now. Yeah. The 1920s began with a mess, and we're just sort of copying the 1920s.
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