Tim Graf (TG): This is Street Signals, a weekly conversation about markets and macro brought to you by State Street Global Markets, the Markets and Financing Division of State Street. I'm your host, Tim Graf, European head of Macro Strategy.

Each week, we bring you the latest insights and thought leadership from our award-winning suite of research, as well as the current thinking from our strategists, our traders, our business leaders and a wide array of external experts in the markets. If you listen to us and like what you're hearing, please do subscribe, leave us a good review, get in touch with us - it all helps us improve what we hope to bring to you. With that, here's what's on our minds this week.

TG: This week, we're doing something very unique for what is normally a podcast that focuses on the intersection of financial markets, politics, geopolitics and macroeconomics. We actually do talk about all of those topics in one way or another this week, as you'll hear shortly, but we're doing so with a guest who comes to the conversation from a very different vantage point, as someone who has spent a lifetime thinking about mass media and particularly about the explosion of information available to us starting 25 years ago, with the rise of the internet and what effects that has had on society.

Since I was first able to have guests from outside my company on this podcast earlier this year, Martin Gurri's name has been near the top of the list. He's a former CIA analyst, a fellow at the Mercatus Center at George Mason University in Virginia, and he writes extensively about the intersection of politics and media for the Free Press and other publications. But the reason he's been so high on my list of guests that I wanted to have is as the author of The Revolt of the Public and the Crisis of Authority in the New Millennium. This is a book I came across at the end of 2016, which really helped to explain the political upheavals of that year in a way that has resonated with me and guided my worldview ever since. So safe to say, I'm very excited to do this. Here you go. Hope you enjoy it.

Before we actually get to the work you've done over the last 10 or 20 years, which has been focused on this wave of information and the surplus we've had made available to us via the Internet. I wanted to actually start at the very beginning, reading about your bio and your background, and you've talked a little bit about this on other podcasts. You were part of a family of Cuban emigres who left Cuba in the 1950s. I just wanted to start there.

Do you have any memories of life in Cuba and what it was like both before and after all of the political upheaval in that period?

Martin Gurri (MG): Oh, sure. We left actually on 1960. It was October 1960, almost exactly 64 years ago. I mean, most people, when they think back on their childhood, they think of this kind of fantasy island that you can never go back to. Well, for me, it's kind of literally true. I have lots of memories. And there was no time, by the way, in my youthful existence, childhood existence in Cuba. There was no time when there was no dictatorship. There was always, I experienced a right-wing dictatorship and a left-wing dictatorship by the time I was 10 years old. And yes, that you leave imprinted with certain, I don't know, judgments, you might say, almost instincts that never leave you.

TG: Can you talk a little bit more about that specifically, you know, kind of the things that your worldview today, 64 years later, how that's shaped by that experience in specific ways?

MG: You know, for one thing, you understand that in this country, we are so amazingly fortunate that we have no conception of what dictatorship is, none, none. The greatest thing about America is that if they stream their imaginations, they came up with the best they could, they can't, okay? So when you hear, for example, that Trump is going to become a dictator or something along those lines, or even on the other side, Elon Musk, democracy is going to go down if we don't elect Trump. So that is just completely wrong. These are all people who are very angry, and they're talking. But when you go to a true dictator, when you live in a true dictatorship, by far the dominant emotion isn't anger, it's fear. Fear is palpable, and you breathe it in and you breathe it out. Fear for yourself, for your family, for saying something wrong in front of the wrong person.

Even as a child, I was afraid because I was told, if you say something wrong in front of the wrong person, your parents will end up in jail. Imagine walking around with that kind of burden on your shoulders when you're eight years old. So I walked away with a sense of what it is not to have freedom. And of course, that includes informational freedom. My entire existence in Cuba, the media was censored. So I know what censorship looks like, and I have a very, very strong allergic reaction to any attempt to censor anything short of pornography. All right.

And then finally, I guess on the flip side, we came to the United States, and I remember very, very clearly that I was in elementary school and listening to my buddies in Ponce de Leon elementary school, and they weren't talking about politics. In Cuba, even the children in elementary school, all they talked about was politics. This country, nobody cares about politics. This is great. This is great. And I very quickly came to a conclusion that I have never lost, even in this kind of strange moment we're living through right now, which is that the American people is fundamentally sound of character, and sensible and practical in its choices of lifestyles and so forth. You can have a very talented group - I think, forgive me for self-praise, I think the Cubans are very talented, but they don't know what they're doing when it comes to politics, all right? They go to extremes, they try to be very logical, they try to be very intolerant, and you have no way of coming up with a consensus of the kind that has allowed our constitutional order to endure all these 250 years That wouldn’t be conceivable.

TG: You know, one of the things that is also always mentioned in your bio is your work for CIA. And your work in particular on information, I think a lot of the work that led to The Revolt of the Public, your book, was, I think, started there.

Can you talk about how you first came to work at CIA and some of the things you did in the earlier stages of your career?

MG: Yeah. I answered an in the newspaper. That's how it came to be there.
I mean, I have the least glamorous, the least sexy career that you can imagine. You know, I didn't have license to kill.

TG: No.

MG: I didn't have beautiful women sidling up to me when I played baccarat in Monte Carlo. I was an analyst of global media, and it turned out to be strategically the most amazing and important perch to be sitting on, of course, when this gigantic tsunami of digital information hit the world, because I was able to see it. I get accused a lot of being prophetic and prescient. And if you read the book, the first page says that you can't, that's unprincipled, not possible, or you can't predict the future. But I was in a very, very high place. I was in that perch in CIA. And so you can see farther when you are high up. And I could see, and it wasn't just me, by the way, there were a group of us who were basically watching this development of what used to be a very simple, very straightforward media environment. Great job, but you got to read a lot of newspapers, and both in English and in translation. And you know which ones were authoritative, and which ones the presidents of the various countries paid attention to.
And then suddenly you have this gigantic wave, this tidal wave hit the world. Everything goes haywire, everything goes haywire. And by the way, I mean, tsunami is not a metaphor. In the year 2001, the amount of information produced that year doubled that of all previous history going back to the cave paintings at the dawn of culture. 2002 doubled 2001.

You chart that, it's more or less continued, not exactly, but more or less. And the chart looks like a gigantic wave, like a tsunami. So I experienced that while I was at CA, several of us did. It drove us crazy because now, where do we get the material? I mean, when you have an infinity, literally for practical purposes, an infinity of choices when it came to information. Whereas before the question was, where do we get it? And that was, what do we get out of this mess of this ocean of stuff? So there was a moment of panic about that, that never quite has gone away. But really, the most important part came to me eventually was not that. It was the effects of the information.

Information is an ecological force. It changes the landscape, and so it changes our behavior. And the way we act changed radically.
You could see as that tsunami was rolling around the world, as different countries were digitizing at different rates, there was this growing, ever-growing level of social and political turbulence kind of starting hitting the ground in reality versus just virtuality with the Arab Spring where these revolts took place. It began in Facebook, for example.

TG: At the time, and also now, I guess, how well did an organization like CIA adapt to that, and how well do you think they do now at that?

MG: Yeah, I’ve lost touch with them, so I hesitate to say a thing about now.
Then, they were an institution. They are a perfect example. There were a lot of us inside who saw what was happening, and we were going like this: You know, go, hey, hey, something weird is going on. But the whole point of what I say with the revolt of the public is that there are institutional forces that just are blind to the fact that tremendous changes can happen today outside of the institutions. So, you know, CIA is a tremendous organization. It’s filled with both brilliant and amazingly courageous people, but they did not get it. They did not get it.

It was like, so these people, we’re talking about Egypt, right? Look, all of a sudden Egypt, the most boring old media landscape. And suddenly you have all these blogs, and they were in English because these were all middle-class American-educated, young Egyptians. And you realize that they think that the whole country is a joke, that the government is a joke, and they’re saying it out loud. And we’re pointing to this. This is crazy. This is like maybe six months before the Arab Spring. The answer was, what group do they represent? Well, none. They’re bloggers. And so they said, well, so when the secret police comes, are they going to hit them with their laptop? That was a joke that we heard. They’re going to hit the secret policeman with a laptop? It’s inconceivable that you can have happen what did happen. You had this young man who posted on Facebook an invitation to a protest in Tahrir Square. A million people saw that invitation. A hundred thousand people said they would attend. The ability of the Internet to generate these gigantic cascades of opinion and of action in the end. If you live inside the old institutions, that doesn’t penetrate your brain.

TG: I mean, these are all the roots. For people who haven’t read Martin’s work, these are all the roots that then went into Revolt of the Public and the Crisis of Authority in the New Millennium, which is Martin’s book, which is how I came to you about eight years ago. I read it just after the 2016 US election, when of course Trump was elected. That of course came about four or five months after the UK’s referendum on EU membership, the Brexit vote. And at that point, especially working in financial markets, we’d lived through the Arab Spring, which you’ve mentioned. You write about the Indignados movement in Spain, the sort of anti-austerity push, which also in working in markets you knew about and you were aware about.

But I think that year in particular, for those of us in kind of Western society, and particularly for people like me, that was where the public’s revolt really hit home and carried economic significance, certainly social significance living in the UK as I have for 16 years. I think that has shaped really the social environment in the UK in a way that I don’t think people still quite understand.

So I wanted to see for those more closer to home episodes that I’ve just talked about, whether it’s Trump or the UK, can you talk about how that elite monopoly on information really began to break down? And when you started to notice that, maybe not just in these Arab Spring countries or Egypt, but in the countries we live in, really.

MG: Well, I mean, the first thing you have to understand is that 21st century institutions acquired their shape in the 20th century, in the last century, which was the heyday of the top down, I talk, you listen mode of organizing humanity. For that model to succeed, it needs to maintain a kind of a semi-monopoly over information in every domain. So you have like government has its part, and the media has its part, and the academia has its part, business has its part. And it's almost like ownership of various domains of information. And therefore, when they speak, they speak with authority because the public has no information, right? And in the model, when Walter Cronkite in the olden day said, that's the way it is - I did have trouble understanding how an entire day of the human race could be kind of squeezed into like 22 minutes, mostly video - but I had no way of knowing otherwise, okay? And he sounded authoritative. This is a man you felt like, okay, if he says so, it must be true. The tsunami of information just blew away that model, blew away that model. It's simply, it's not a question of social media, it's not a question of disinformation or post truth, simply a question of volume.

The enormity of the tidal wave is such that when the elites speak and say, well, this is the way it is, you can go to that tsunami and find, no, no, looks, this guy over here says the opposite, and he sounds like he's got better evidence than you do. And by the way, this thing over here says that you are, you are a crook because you've been stealing money or you have a girlfriend that you haven't acknowledged.

And suddenly the elites find that everybody's talking back. I talk, you listen is a great model of being an elite. They still want that, by the way, that they want to go back to that because it's so comfortable. They have not recovered from the shock that the people are now talking back. And in fact, given the structure of information that we have now, that new landscape that has been imposed, you have to shout. Nobody's talking back. Everybody's shouting back. I mean, I'm sure Hosni Mubarak in Egypt was watching all the radical groups and making sure that none of them were making trouble. He had no idea that you could go to the internet and say, let's have a protest in Tahrir Square, and 100,000 people would show up. So that has been repeated again and again and again.

In 2016, you're right. It was the first time the elites said, what the hell is going on? And spent three seconds pondering that. And then they said it, they didn't like it. And so they said, well, bad things are happening. It's Russian disinformation, it's fake news, it's post-truth, it's this, it's that, it's the other. And they're basically in denial, but the authority is lost. And so now you have the public, and we can talk about the public, and it has its own pathologies. But the fact is, you have the public that is very angry, very upset with the status quo, completely distrustful of the institutions and the elites. I mean, the polling on that is pretty appalling.

And then you have these elites that, by hook or by crook, want to retain, if not authority, control. They have kind of given up on authority. Nobody believes them anymore. But if they control, if they can, for example, mute you on social media, because you've been saying things that annoy me, then at least I have control over the damage you may do. So that's the scenario right now, I think.

TG: How sustainable is that? That doesn't strike me as very sustainable, but do you think that genie could ever be put back in the bottle, particularly in Western countries?

MG: No, I don't think it can. But I think that there can be some serious attempts to do it. The first attempts to censor the web were kind of surreptitious. Nobody was talking about it. But people coming out now saying, no, no, we do need to control. We need truth. I mean, as far back as Plato's Republic, okay? Plato wanted to keep poets out of his Republic because why? Because they didn't tell the truth. They told disinformation, right? Well, these people have that platonic idea that there must be guardians that interpose themselves between this mass of stuff and these gullible people down below so that they get truth. Well, coming from Cuba, I can tell you that was pretty much the Fidel Castro formula for media, right? If you allow freedom of speech, what the capitalists call that, well, then the United States will control everything and Cubans will lose their sovereignty. So I will control it and I will tell them truth as I see it.
So it is not sustainable, but I think there is going to be a few gigantic pitched battles over this question. At the moment, it's unclear who's winning, honestly.

TG: One of the other things that struck me from your book as part of the consequences of the spread of information and the revolt of the public, the various publics that we've seen push back against the elites and start talking back, was the dominance of negation as their motivating force. And so I know what I'm against. It is you. I'm talking back to you and I will organize against you. But the kind of the positive message is secondary if it exists at all.

MG: It does not.

TG: OK, so that was my next question. Like, what are the parallels here and where does this go? What road do we go down when there is no positive motivating force?

MG: This is a structural question, too. This is not just people being perverse. The old mass media universe, and when I say old, look at my face, I'm old. OK, so I was there. So it was kind of like this gigantic mirror in which all of us were reflected. There was everybody there. Digital culture has sort of toppled that mirror over. It has shattered. And the public lives on all the broken pieces. OK, so when I say the public, it's kind of a misnomer. There are many, all right? There are many. There's no, it's not like the people or the masses. No, no, no. There's a bunch of people.

The normal, what I think is the natural way of society is you have these patchworks of opinion, you know, that coincide somewhat and disagree a lot. So when you create these movements like Tahrir Square, like the Indignados in Spain, Occupy Wall Street, all of them, all of them, you cannot have a positive message. Because if you were to have a positive message, you would have happened what did happen in Tahrir Square.

I mean, basically, they won. Hosni Mubarak resigned. There were going to be elections. The crowd disintegrated. There were the crowd in Tahrir Square. There were socialists. There were extreme Muslim Brotherhood young people. There were people who were just indifferent to religion. They were very devout people. So if you had asked them, well, what comes next? They will start fighting with themselves. But if you tell them, what are you against? They said, Hosni Mubarak. And when that went away, they disintegrated. So it's a structural thing. The public unites in repudiation, in denial, in negation. Okay.

And all it really can and wants to do is bash at the institutions and at the elites that run the institutions without providing an alternative. Now, I always say, when you are doing that, when you are attacking without providing alternatives, you run a very, very strong risk of slipping into nihilism, which is the belief that destruction is a form of progress.

TG: That is especially poignant and a good chance, I think, to shift somewhat. This is, after all, a financial markets podcast most of the time. And I wanted to start to think about how your work, and you've brought this again up on other podcasts and a little bit in your writing, about movements like Wall Street bets and meme stocks following the pandemic. We had this rise and really almost nihilistic market behavior in 2021 and 2022. And even for longer than that, really going back to the financial crisis in 2008, you had the rise of cryptocurrencies. And in both instances, I think, these were revolts of people who were trying to go up against elite institutions. And crypto in particular has gone through some of these waves that might have looked like fads, where they could die out or lose mass appeal. But that's very much not the case. And I'm curious to get your take on this, in particularly the financial arena, based on the work you've done.

If you had any thoughts, maybe not what the end state is here, but kind of where do we go next in terms of movements like Wall Street Bets or crypto, and what have you found interesting about them?

MG: Yeah, I mean, this is definitely a weak point for me. I am not a financial mind of any kind. So, but yes, I mean, the revolt of the public is not political. It's everywhere, all right? It's everywhere across society. Those instances that you spoke of are manifestations in the financial world. And yeah, Wall Street Bets was a fun one, I thought. They pumped this GameStop stock like 2,000 percent up or something like that. And it was also an example of what happened in Tahrir Square, right? Which is you can summon a gigantic, gigantic crowd, the army, a gigantic army of people that subreddit, which was Wall Street Bets, I think had several tens of thousands of people in it. At the height of that weird incident, a million people were on it, right? So the amount of money they could pump into GameStop just skyrocketed.

And of course, Wall Street is going like, what is going on? I mean, I kept getting called, I said, what's going on? I said, I don't know. I mean, it's the kind of thing that happens. You can summon it and it is by definition unpredictable, and it can happen any moment. At any moment, that can be repeated, all right? And if you went into that subreddit, which I did, it was kind of funny. It was the same kind of, I don't know, grievance mixed with internet, you know, wow, we can do anything, a touch of nihilism. You know, the goal when my parents went through the two, these are all, by the way, all young men, all Zoomer guys, okay?

And you could tell that the whole thing was, they were all trained on games, you know, online games. This was kind of like a game to them. But they had to come up with some kind of rationale. And well, you know, my parents, I remember how they suffered through 2008 and the terrible crisis. I'm going like, you were like nine years old. You don't remember anything, you know? This is made up, okay? I think with crypto and stuff like that, what we see now, and again, it's the same thing as with the information sphere, is an attempt to control it. I think the institutions realize that it's not going to go away, much to their despair. And I think they want to, yes, they want to take it on, but they want to take it on, not so they can use it and share with the people who have it. No, they want to control it. They want to make sure that it's under their thumb.

TG: The other thing, and actually, it's closely related to the subreddits and Wall Street Bets and the like. We do a lot of work, actually, looking at information sources like that in the work that we do. And it's all aimed at sort of thinking about narratives and their formation. And that's where I wanted to go next. And, you know, I've worked in financial markets for more than 25 years now. And it strikes me that, you know, I started my career prior to that tsunami of information. And it felt like markets then built and reacted to narratives based on fundamentals or, you know, what you could maybe call objective facts.

Although, you know, I think even then there was some malleability to that. And a lot of our research that we do tries to grapple with now this rise of narrative driving market where fundamentals or objective facts matter maybe a little bit less. And it's the narrative that drives a financial instrument. And I'm just thinking if you could maybe step back and just think about the narrative process and its life cycle.

Do you have any insights on about how they form, how they build and then why they might die out and no longer be this influence on an asset or a currency or something like that?

MG: Well, the short answer is no. But if I stop there, that would be awkward. So I'll talk anyway, all right? Yeah, I have studied narratives. That was something that actually I take very seriously, and I do know a tiny bit about it, okay? I actually think, and narratives are essential for human societies. We all do and say and act because we have all these unspoken assumptions in the back of our minds that fit into some broader narratives. You know, our morality is entirely a question of a story that you're telling about what is good and what is bad, all right? The good life that everybody aspires to is a story that you say, well, I don't like this one, but I do like that one. You don't make it up, it's given to you by a broader cultural narrative.

Every culture is a set of narratives that we kind of weave our way through.
Having said that, I think we are now, what has happened with the rise of digitality and now we have AI is we're at the beginning of this colossal transformation, this colossal transformation that doesn't even have a name yet, and that is headed in places that we have no idea, and it is already an extinction event for narratives. We need the narratives is the problem. At the end of this colossal transformation, there will be a narrative that we settle on. I don't think I'm going to see it. I think this is a long, long term process. We tend not to think decades and centuries, but I think that's the way you have to think about this process. And meanwhile, I can tell you that any narrative that exists today can blow up at any moment because the sense that every narrative exists on a huge number of unproven assumptions.

You just go like, well, given this, everyone goes, yeah, yeah, yeah, and then we should do all these things very rationally, work out from that. But once you get to the unproven assumptions, the whole thing disappears. And the more information you have, the more you think this is just floating on air. And all it takes is somebody to point a finger. What the Internet does is point the finger again and again and again. And so the narratives tend to blow up and they're necessary. So where are we? I don't know. It's a dicey moment, that's all I can tell you. I do think that you cannot live absent narratives. The human race is a storytelling animal. That's really our main trait is we tell ourselves stories to orient ourselves with our neighbors, with our families, our own behavior, our own self-image, our own self-worth. All of that is a story that we tell ourselves constantly, that we try to link to what we consider to be truth, reality, right?

But once you get to those unproven assumptions, things get dicey and that's what happens to it all the time. So that's a good question. That's a really good question. I should probably dwell on that a little bit more.

TG: It's, yeah, I mean, that is we do a lot of work on this. And I'm just curious from the very top level about some of the kind of, I mean, you've worked, I think, on mimetics and how things spread like that. And that's why I was asking. I wonder as well, you alluded to this in your last response of artificial intelligence. And this is, you know, a very obviously very popular topic. I'm doing a panel on it in about two hours. That's how ubiquitous it's become in my world. And I'm just wondering, you mentioned things like the extinction event of narratives.

I'm curious what you meant by that. But I didn't know if that was in relation to AI or if you just had thoughts on the ability of society to adapt and incorporate AI into the way it processes information.

MG: I'm a skeptic about AI in the sense that I hear so many apocalyptic things, you know, it's going to eat the world, it's going to take over the matrix or Terminator, whatever. I mean, we've seen the movie. And I think a lot of people are reacting to that kind of cultural framework, including a lot of very smart people. Maybe, I mean, I don't think we know, we have no idea, but doubtful, you know, doubtful. And that's about all I can say.

I don't think we've had enough time with this particular tool to get a sense of how disruptive it's going to be. I suspect a lot. I suspect a lot. But for good or for bad, usually it's for both, like the Internet, right? When the pandemic hit, that we're all locked down, I mean, all you had to do was go to your laptop and everything you need to show up at your doorstep, right? I mean, people talk about a crisis of authority and of trust.

Well, I put my credit card number out there in this weird world, and I let Amazon look at it, let them basically use it and take money from my bank, because I have trusted that product that I bought is going to show up at the doorstep. The Internet is an amazing thing. We do a lot of wonderful things with it, and then it's got its dark, very powerful dark side, and above all, it's disruptive. It's just disruptive. So it's hard to tell good or bad, which is going to come out as the leading force.

AI is the same, I think. AI is the same. I think that you can see a lot of dark scenarios, but you can see a lot of wonderful scenarios. I mean, every kid could get his own tutor. Every kid could have a tutor that has all the knowledge of the human race in his mind. And when he asks, well, gee, I'm having tests on the Iliad. If they still have tests on the Iliad, let us hope that they do. Gee, Mr. AI or Ms. AI, whatever you want to call it. Tell me, what is the important theme? And then you have a personal tutor that can, you know, basically stimulate your mind and provide gigantic amounts of good information or the opposite, right? You have this crazy thing that thinks it knows, but it doesn't, and it's not a human being, so it has no sense of what it doesn't. When it thinks it knows something, it has no sense of, you know, we tell lies that are like truths, but when AI goes bad, it says preposterous things, you know? So it could go that way. I don't know. I don't know. I think it's too early to tell.

TG: Until we get to that point where we know better what AI looks like and where it can help us and where it might hurt us, you know, thinking about, again, in my world, having to process lots of information on the fly, basically, and trying to separate signal from noise, based on the work you've done, do you have any kind of general principles you think are helpful for people to cut through the propensity to overreact and over-extrapolate from very small samples of new data, or this, I guess, wide tsunami of information?

MG: I just am kind of very astounded, honestly, that we don't teach ourselves and our children, in particular, how to deal with information. We just assume it's stuff. So is it true or is it false? And huge battles emerge, or no, this is really true, this is really false. And half, I'd say more than two-thirds of the time, you're talking about some value judgment, right? I mean, it has nothing to do with truth or false. It has to do with somebody saying, “Make America great again.”, “Well, America is great already”, and you get into this kind of, no, that's a lie, no, it's truth. What you need to do is, and I come from propaganda, I began with propaganda analysis, and I have a friend, Andrey Mir, I recommend his books to everybody. He and I are two halves of one brain. And he also comes from that, you need to understand information in the following way.

The most, you know, fake news is the most interesting part of any news, of any information. And the most interesting part of fake news is the fake part. Because if somebody is telling you straight up, well, I mean, I think the sky is yellow and they're mistaken, honestly, then it's an honest mistake. They just aren't right, you know. But if somebody is telling you the sky is yellow because they want you to do something about it, all right, then a whole set of questions arise. Why is this guy lying? Who's behind him? Who's the intended audience? What does he think is going to happen because he said this lie? Is it happening? I mean, half the time, when people, propaganda is a very, very unsuccessful format. It hardly ever changes anybody's mind, and it has a lot of unintended effects. So what is happening to that information?

So then you no longer look at the world in a platonic way, of platonic truth, platonic falsehood. You look at the world as people who are trying to achieve an effect, they're trying to move you to do something. Every word you utter to another person is an attempt to persuade that person. Listen to yourself in the remainder of this day, when you're talking to other people, you are trying to subtly communicate your opinions, your ideas, your behavior. This is the way we should be going, right? And that's the way we have to look at information. We have to look at information. And once you do that, what I consider to be analysis is, remember that the human race is a perspectival animal.

Most of what we know is not through our sensory organs, it's mediated, and that is perspectival, okay? I always say you can be at the top of the Empire State Building and look out on Manhattan and it looks like the City of God, all right? Or you can be at the bottom of the Empire State Building, with the traffic and the smog, and maybe there's some homeless person sitting there, and it looks like hell. It's the same New York City, but two different perspectives. Analysis for me is how far in that circle of perspective 360, how far can you push yourself to understand why people are saying what, why does Bin laden speak the way he did? To me, it's like when we were in CIA, they called the jihadis the bad guys. That was the kind of thing. What are the bad guys?

So it's like, did Bin laden wake up every morning thinking, what bad thing can I do today? Well, you read his stuff and you try to put your, I mean, it's an effort, but you try to put your mind in his, he's a hero to himself. And there's a set of reasons for that. So nobody can go 360. God maybe can do that. See reality from every perspective. But the more perspectives you can get around, people who disagree with each other, and the more you understand, okay, so we were trying to persuade everybody, as I said before, and these are the streams of persuasion that are colliding over the subject. The more you can get a sense of what is real in this crazy world we live in right now.

TG: That brings me nicely, I think, to this election cycle, which is probably about where we're going to finish here. We've done our election preview, and so I don't want to actually get into anything to do with polling or who do you think is going to win. I don't think that actually really is, well, it's important, but it's not important for our discussion, I don't think.

MG: I wouldn't give you an answer anyway.

TG: Yeah, well, I think this is now more than past cycles, or at least it's more prominent, where you have this mix of media, politics and technology combining. And Elon Musk is kind of the poster child for this on one side, but then you have it on the other side as well.

Does this worry you at all, this mixture of, money and politics have always gone together, that's nothing new, but the use of media and politics and then technology fueling that, do you see any, does that worry you in any way?

MG: Not particularly, no. I mean, I don't see why I should worry. It's more participative than it used to be. My friend, Jonathan Haidt, calls it the Tower of Babel. The effects, it seems to be that we're all yelling and screaming almost in different languages. So it's a bit uncomfortable, you know, just like, and we have to put up with these waves of panics and weird ideas like staged assassinations and governments that somehow manufacture hurricanes. So we have to put up with that.

TG: Well, this cycle in particular, you've written a lot about this year. And actually, I want to go back a couple of years ago to a piece I read, and I'll read a quote and then follow it up with something you wrote this year. The quote is, “We are stuffed with information but feel starved for truth. We are searching for understanding and meaning, but we seem to have lost the address.” And you wrote that four years ago, but recently you wrote a piece, Mistaking Leviathan for God, which was, to me, it struck me, it was about the quest for meaning and validation, from politics, from activism.

Can you walk us through how we got to such a place where the search for redemption is happening in politics rather than communities or organized religion? You talk about the deterioration of that and lower attendance in churches, at community events where it's all funneled into politics now. How have we gotten to such a place?

MG: Yeah, that has nothing to do with the Internet. This is just a process that has been going on. I have an essay coming out of the City Journal called The Endarkenment that tackles that actually head on. We said it before, the human animal needs a story. Needs a story, right? But for whatever reason, the story providing sources of our society, even before the Internet, have been in precipitous decline. I'm talking about the family, right? I mean, the family is the place where culture gets transmitted from one generation to the next. I'm talking about religion, which provide the big cosmic narrative. We do this, and you look at the Declaration of independence, and we're endowed by our creator. So when you lose that, then where are we, right? And then, of course, community, and particularly in the United States.

But I think this is true generally in the Western world, is we not only move around a lot, but tend to live in our homes. There isn't that sense of a neighborhood that's opened up. I mean, my neighborhood is nice. I know my neighbors, but it's not like I sit there and chat with them over a fence every day. That's kind of gone. And the true test of that is if you have children, you watch which neighbor is talking to them because you don't particularly trust them. The loss of trust in institutions is reflected by a loss of trust in ourselves, I think.

Now you have drained the landscape of meaning, and yet the human animal desperately needs that, desperately needs that. And the one thing that's left is politics. And this has been inflated by particularly the youngest generation, the Zoomers. We want to change the world, we would save the earth. They have been inflated into a cause. But liberal democracy is structured precisely so that it has no higher meaning. It's procedural, completely procedural. So there's a sense of frustration. You go and you do the politics, but that connection to that transcendence that every human wants, something bigger than yourself, that you're a part of, okay? It's not there. So people get more frustrated, people get more angry. It's a loser.

You can’t get meaning and transcendence out of politics. Even I think that the totalitarians who tried to do that failed, failed. In the end, it just becomes control. We could spend 20 podcasts talking about this, because now we’re talking about a very profound civilizational crisis, of which the revolt of the public comes at the end, at the last moment, and that kind of bollocks whatever was left, just kind of goes blowing up into the air. It’s how do we restore a kind of a shared sense of what is right and wrong, a shared sense of what is a good life? I mean, we have reached the point where we can’t, the most basic things in life, we can’t point, there’s no story to tell you, to guide you anymore, right? And not surprisingly, when you look at the youngest generation, the Zoomer generation, they’re not marrying and they’re not reproducing. And when you ask them, why not? They said, it’s a good thing. Why should we? So that is a form of civilizational suicide.

TG: You also wrote something last year about the American experience, to a degree about your American experience in a piece called All Immigrants Are Born on the Fourth of July. And it touched on your impressions, but also it was really about American exceptionalism, abundance in our society as well. And just thinking not about this election, but just generally, touching on some of the things actually you just went through, is there anything that we can do in the near term without asking you to predict the future, to ameliorate some of those negatives that you mentioned? And do you see the potential – you talk about exceptional generations, the likes of which fought the Second World War.

Do you see that potential emerging from what looks to be a fairly grim set of circumstances?

MG: I mean, I don't think our circumstances are that grim. I think we say they are, but here I am in my nice house, and I'm looking over if you can't see it, but the other side of my laptop is my neighborhood, very green, and people walking their dogs and jogging. Okay? And there you are in Boston, having flown in and feel perfectly safe there, and nobody's shooting up your street. I think the mistake happens when you confuse your small world in which you live in with the big world of institutions and politics and whatnot, and you think you can save the earth. Saving the earth, that's a religious proposition, right? I mean, that's not really a practical one. You can't save the earth, all right? You're not a messiah or a disciple of a messiah or anything like that. And I think if you worry less about how to change others and change our society, change yourself, right? I think to the degree that you are an influence in your small world, your family, your workplace, your neighborhood, the people you deal with on an everyday basis, the people sell you stuff, have to pester you because that's how they earn a living.

How do you treat them? What is your attitude to this small, there's a, I forget who the British anthropologist was that came up with this number. Anyway, the number of people that any human being is acquainted with is about 150. That little group, that little world that you live in, how do you behave yourself in that? How do you make that a better and unkinder and smarter and richer experience, not just for yourself but for the people around you? You can have influence in that little group. You have no influence on saving the earth. I'm sorry, it's a lot bigger than you are.

TG: It certainly is. Martin, this has been phenomenal. I've waited eight years to have this conversation. It's been everything I could have hoped for. No, I really have always admired your work and I really, really do appreciate you taking the time. It's been an absolute thrill.

MG: Well, it's been fun.
TG: Let's do it again sometime.
MG: Absolutely. Absolutely, yeah.

TG: Thanks for listening to this week's edition of Street Signals from the research team at State Street Global Markets. This podcast and all of our research can be found at our web portal Insights. There, you'll be able to find all of our latest thinking on macroeconomics and markets where we leverage our deep experience in research on investor behavior, inflation, risk, and media sentiment, all of which goes into building an award-winning strategy product. If you're a client of State Street, hit us up there at globalmarkets.statestreet.com.
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