The Lessons of History by Will & Ariel Durant

1. 0:01 – 1:52

   Introduction to The Lessons of History and the Durants

   1. DSDavid Senra0:01

      Since man is a moment in time, a transient guest of the Earth, a spore of his species, a scion of his race, a composite of body, character, and mind, a member of a family and a community, a believer or doubter of a faith, a unit in an economy, perhaps a citizen in a state or a soldier in an army. We may ask under the corresponding heads, astronomy, geology, geography, biology, biography, ethnology, psychology, morality, religion, economics, politics, and war, what history has to say about the nature, conduct, and prospects of man. It is a precarious enterprise, and only a fool would try to compress a hundred centuries into a hundred pages of hazardous conclusions, yet we proceed. That was an excerpt and one of my favorite paragraphs in the first chapter of the book that I'm gonna talk to you about today, which is The Lessons of History by Will and Ariel Durant. You and I normally get together and speak about a biography of a person. The way to think about the book that I'm holding in my hand is this is a hundred-page biography on the human species. And I can't think of more qualified authors to write something like this than Will and Ariel Durant because they spent 40 years, from 1935 to 1975, writing this 11-volume set called The Story of Civilization. If you read a bunch of biographies of entrepreneurs, Will and Ariel Durant's The Story of Civilization will pop up over and over again in their biographies because these entrepreneurs are reading it. People like Larry Ellison and Elon Musk come to mind. And part of what makes this book so special is they wrote The Lesson of History after they finished The Story of Civilization, so you could think of this as like a hundred-page synopsis or summary of their 40-year, that four-decade-long journey in trying to catalog the human existence. And so let's jump right in.

2. 1:52 – 4:07

   The First Lesson: Be Modest and Prioritize Ruthlessly

   1. DSDavid Senra1:52

      The first lesson of history is to be modest. Let us define history as the events or records of the past. Human history is a brief spot in space, and its first lesson is modesty. At any moment, a comet may come too close to the Earth and set our little globe turning topsy-turvy in a hectic course, or choke its men and fleas with fumes or heat, or a fragment of the smiling sun may slip off tangentially and fall upon us in a wild embrace, ending all grief and pain. And then this line hits you right in the chest. They have a bunch of lines like this throughout the book. Generations of men establish a growing mastery over the Earth, but they are destined to become fossils in its soil. And so I've read and reread this book three, four times, not including the times I listened to it on Audible as well, and so I have a bunch of notes from the last time I read it. But what came to mind this time when I read that sentence, I thought about what Charlie Munger said, that what you and I are doing here is w- when we're reading biographies of great people, we're becoming friends with the eminent dead. And because most of the people that I read about are dead, when I get to the end of the book, I'm not just getting to the end of the book, I'm getting to the end of somebody's life. So I am constantly, and you are as a byproduct of listening, you are constantly reminded of the finiteness of life. That generations of men establish a growing mastery over the Earth, but they are destined to become fossils in its soil. So what I think about this is it's ruthless, it forces ruthless prioritization about how I'm spending my time and what I choose to focus on, and it's comes down to three Fs for me. Founders, family, and friends. That is all I'm focused on. Everything else has to round to zero. That is one of the main benefits of this relentless pursuit of studying history. You understand that you are destined to become fossils in its soil. The last time I read the book, when I got to this part, this is what I wrote. It reminds me of why Nolan Bushnell said he was Steve Jobs' mentor, and he said Steve Jobs only had one speed: go. And he said that about a 19-year-old Steve Jobs. Steve Jobs did not know h- how limited his time on Earth would be, right? And so as you don't get much time, don't waste it. Go. Ruthless prioritization of how we spend our time is, I think, is super important.

3. 4:07 – 7:45

   Geography, Technology, and Building an AI Assistant

   1. DSDavid Senra4:07

      Now, there's gonna be a bunch of just... They're obviously incredible writers, and they have the ability to distill an entire story into one sentence. And on a few pages later, I love this. The influence of geographic factors diminishes as technology grows. So they are speaking about the entire sweep of h- of human history as, as time goes forward, right? The influence of geographic factors diminishes as technology grows. The book that I'm holding in my hand was written in 1968, and yet that line is even more true today. The influence of geographic factors diminishes as technology grows. Go back to when you and I studied Napoleon. He spends an unbelievable amount of time talking about physical barriers. Physical barriers of moving an army somewhere from one place to another. This is what you do when you come into a river. This is what happens w- how you handle mountains. Napoleon died in 1821. The airplane was not invented yet, so the influence of geographic factors diminishes as technology grows. So I was thinking about the o- the life of Will Durant specifically, 'cause he started, he, he wrote, like, the first half of The Story of Civilization alone, and then his wife joins for the second half. And so I looked up when he was alive, and I was like, okay, he was born in 1885, and he dies in 1981. And a huge theme of this book is the influence of technology and the tools that we invent on the human species. And so I went to ChatGPT and I asked, I was like, "Okay, can you give me a list of significant technological advancements that were created between the periods of 1885 and 1981?" Listen to what was invented in the life of Will Durant. So you have the invention of the first automobile, the invention of the first camera that makes photography accessible to the masses. You have the invention of radio, of the powered airplane, of penicillin, of the atomic bomb, of the transistor, of the solar cell, the integrated circuit, the ARPANET, which of course is the precursor to the internet, the microprocessor, the mobile phone, the personal computer, and finally, the Walkman, which was invented in 1979, and then Will dies two years later. That is an incredible amount of technological progress in one lifetime, and that continues to accelerate today. Like, even the technology I used to, to produce that list and to help me with the research of this episode. If you're not already using these AI assistants like ChatGPT, it is remarkable. I use it multiple, multiple times a day. In fact, I built my own which indexes all my notes, all my highlights, all my transcripts, every single word I've ever uttered on the entire podcast the last eight years. I've been testing it for a few weeks. It should be available to all Founders Notes subscribers, I would say in the next week or two. But let me give you an example. I was just on the phone. Uh, I'm gonna be speaking at an event with... I can't tell you who the company is, but it's one of the largest asset managers in the world. They have over $2 trillion of assets under management. And while we were on the phone, they wanted me to talk about leadership lessons from history's greatest entrepreneurs, so I just asked Founders Notes. Again, this feature that I used while I was on the phone was n- is not available to you yet, but it should be in a few weeks. And within 20 seconds, it gives me a list and a summary of ideas on leadership from Ted Turner, Charlie Munger, Barnett Helzberg. Barnett Helzberg is the guy that sold his family business, uh, to Warren Buffett. And the list continues. James Dyson, David Ogilvy, the founder of Trader Joe's, Alibaba. I haven't done a podcast on Jack Ma in, like, seven years. Warren Buffett, Jim Collins. I've never done a podcast on Jim Collins, but I mentioned something he t- said about leadership in an episode that I did, like, five years ago. Jeff Bezos, Henry Ford, and Steve Jobs. And so all that comes to mind from one simple sentence, because the influence of geographic factors diminishes as technology grows. What the impact-- What's fascinating to think about that is, uh, the influence of what else besides geographic factors, right? What other factors are going to diminish as technology grows?

4. 7:45 – 11:30

   Biology: Life Is Competition and Selection

   1. DSDavid Senra7:45

      And so moving on, the next chapter is about biology and its effect on history. This is really a lot about on competition, selection. There's just a lot of ideas that pop to mind. Really, the main theme of what I'm about to read to you is our job is to make our companies and ourselves better equipped to meet the test of survival. And so they're gonna draw some lessons from history about that for you and I. The laws of biology are the fundamental lessons of history. We are subject to the processes and trials of evolution, to the struggle for existence, and the survival of the fittest to survive. So the first biological lesson of history is that life is competition. Competition is not only the life of trade, it is the trade of life. They're just fantastic. This is what makes such a great communicator. It's not only that they're able to explain something, take, uh, something complex and make it simple, but they, they put ideas... They're, they-- Whatever they want you to understand, from their brain to yours, it goes right in. Competition is not only the life of trade, it is the trade of life. It is peaceful when food abounds and violent when the mouths outrun the food. Animals eat one another without qualm. Civilized men consume one another by due process of law. Cooperation is real and increases with social development, but mostly because it is a tool and form of competition. We cooperate in our group, our family, community, company. He didn't write company, but I'm putting it in there. Our family, community, company, club, church, party, race, nation in order to strengthen our group in its competition with other groups. So it's impossible for an entrepreneur to read that sentence, right? He's not talking about entrepreneurship, and not think of company building. That is the group that we operate in the most. That is the group that you and I think about the most. We are acquisitive, greedy, and pugnacious. He's talking about the human species, right? Remember, g- let's go back to the very beginning. I don't even think I elaborated on why I love that [chuckles] that, that paragraph, uh, from, uh, from the first chapter, from the introduction. It is a precarious enterprise, and only a fool would try to compress a hundred centuries into a hundred pages. That's exactly what they're doing. They're trying to compress what, uh... In a hundred centuries of observation, what are we? And what can history tell us about our nature, right? We are acquisitive, greedy, and pugnacious because our blood remembers millennium through which our forebears had to chase and fight and kill in order to survive, and had to eat to their gastric capacity for fear they soon should not capture another feast. War, which he's gonna talk about a lot. War is a nation's way of eating. What a sentence. Hopefully, by the end of this, if you don't already have the book, I'm gonna convince you to buy a copy of the book. And if you have Audible, and I'm pretty sure I have a subscription to Audible. I don't remember buying the audiobook, but I have access. There's a version of The Lessons of History where you actually hear commentary from Will and Ariel Durant, and I'm pretty sure it's included in every single Audible subscription. War is a nation's way of eating. It promotes cooperation because it is the ultimate form of competition. The second biological lesson of history is that life is selection. So the first biological lesson is that, uh, of history is that life is competition. The second lesson of history is that life is selection. In the competition for food or mates or power, our customers. Again, I'm gonna throw in some company things here, okay? Our power. Some organisms succeed and some fail. In the struggle for existence, some companies succeed, some fail. In the struggle for existence, some individuals are better equipped than others to meet the test of survival. That is when I start double underlining. That is when I start adding all these exclamation points. In the struggle for existence, some companies are better equipped than others to meet the test of survival. Our job is to make sure that our companies and ourselves are better equipped to meet the test of survival.

5. 11:30 – 15:49

   Inequality, Differentiation, and Why Utopias of Equality Fail

   1. DSDavid Senra11:30

      Few pages later, it's all about differentiation produces unequal value. Come on. This is, like, screaming to you and I on how to build a valuable company, so let's, let's go right to the book. Inequality is not only natural and inborn, it grows with the complexity of civilization. Again, words written in 1968. Undoubtedly, our, our, our civilization is a lot more complex today than it was then. Inequality is not only natural and inborn, it grows with the complexity of civilization. Economic development specializes functions. It differentiates abilities and makes men unequally valuable to their group. The note I left myself, l- I read this book a couple years ago. I should read it every year. I should remember to read it every year, 'cause you can read it, you know, in a weekend. Differentiation produces unequal value. Learn and optimize for this. So the, the heavily-- They, there's a founder named Naval Ravikant, he's the founder of AngelList. I covered the book that my friend Eric Jorgensen wrote with Naval all the way back in episode one ninety-one. If you haven't listened to it, highly recommend you listen to that episode after this one, and then read the book, of course. The book is available for free online, but my friend Eric told me they f- they-- even though you can read the book for free online, they sold over a million copies of that book, and it, you know, it's only been out for a few years. But Naval has a great way to describe exactly what Will and Ariel Durant are saying here. Economic development specializes functions, differentiates ability, and makes men unequally valuable to their group. Remember, the, the more complex a civilization gets, the more you'll see inequality. So economic in-inequality, right? So the way N- uh, Naval has had h-influence on my thinking about this is he says something like, "We're living in the age of infinite leverage," right? And in the age of infinite leverage, it is more important to be at the extreme of your craft or the extreme of your work. Why? Because the person that is the-- he says, "The person that is the best in the world at what they do gets to do it for everyone." In the age of infinite leverage, we should see this idea that economic development specializes functions, differentiates ability, and makes men unequally valuable to their group. We should see that only continue to expand and become more important. That's why a few n- years ago, I wrote to my own self, "Learn and optimize for this." That also ties to what I told you earlier about this, this reminder for history, from history that our time is finite. That is why it's founders, family, and friends. The opportunity cost is too high to waste. Not only is my time is limited, but I'm heavily incentivized to become the best in the world at what I do because economic development specializes functions, differentiates abilities, and makes men unequally valuable to their group. Back to this. For freedom and equality are sworn and everlasting enemies, and when one prevails, the other dies. If you leave men free and their natural inequalities will multiply almost geometrically. Leave men free and their natural inequalities will multiply almost geometrically. Only the man who is below average in economic ability desires equality. Those who are conscious of superior ability desire freedom, and in the end, superior ability has its way. And in the end, superior ability has its way. Talent is the best asset class. Utopias of equality are biologically doomed. That sentence particularly hits me right in the heart. Utopias of equality are biologically doomed. I am the son of a Cuban immigrant. I grew up meeting people that put their children on rafts and sent them ninety miles across shark-infested waters to flee communism. Since I was a child, I met people that did this. And then I remember getting older and actually running into people that think communism is a good idea. I'm sweating thinking about this. And I used to even get into these debates. Now I'm just like, "Whatever. You can believe whatever you want." But I think the, the key here is it's very simple. Okay, how many people have put their children on rafts and hope that they make it across ninety miles of shark-infested waters to flee free market capitalism? Do you see a line that go down to Key West or the, or Miami Beach and put their American kids on rafts and hope that they make it to Cuba? And the crazy thing is, if you just study history, you understand that of course that's not gonna work. Utopians of equality are biologically doomed. And so look at the difference in growth between Cuba and America in this next sentence. A society in which all potential abilities are allowed to develop and function will have a survival advantage.

6. 15:49 – 20:16

   Character and History: Human Nature Does Not Change

   1. DSDavid Senra15:49

      So let's move on to character and history. I'm telling you, my, my palms are sweaty right now. All right, let's, [chuckles] let's move on, uh, to character and history. H- human nature does not change. This part is just so, so good. We talk about it all, over and over again. History doesn't repeat, human nature does. History shows little alteration in the conduct of mankind. The Greeks of Plato's time behave very much like the French of modern centuries, and the Romans behave like the English. Means and instrumentalities change. Motives and ends remain the same. To act or rest, to acquire or give, to fight or retreat, to seek association or privacy, to mate or to reject, to offer or resent parental care. Nor does human nature alter as between classes. B- this is another double underlined sentence here. Nor does human nature alter between classes. By and large, the poor have the same impulses as the rich with only less opportunity or skill to implement them. Nothing is clearer in history than the adoption by successful rebels of the methods they were accustomed to condemn in the forces they deposed. That's obvious in history. That's also obvious in fiction. If you've ever read, uh, the book Animal Farm, [chuckles] they just gave you a one-sentence summary in there. The adoption by successful revels, rebels of the methods they were accustomed to condemn in the forces they deposed. New situations, however, do arise requiring novel, unstereotyped responses, hence development. And this development requires a capacity for experimentation and innovation. Here, the initiative individual, so this is, applies to you and I because this is what we s- we study, right? We s- he's gonna call it the initiative individual, the great man, the hero, the genius regains his place as a formative force in history. He grows out of his time. He's talking about the fact that the reappearance of these kind of personalities, uh, are entirely predictable, and usually what environment is required for them to appear. He grows out of his time and land, and is the product and symbol of events as well as their agent and voice. Without some situation requiring a new response, his new ideas would be untimely and impractical. I would pause right there. I would really think of Churchill in this case, right? If there wasn't-- His whole life, you know, I've done multiple part series on Churchill, covered him when he was a young kid, covered him when he was an old man, and everything in between. And the whole thing was he, he believed in his destiny. He was just waiting for the right time. And yet, if it wasn't for the invasion of- Britain by Hitler and the Nazis, we are likely not speaking about Churchill today, even though he'd be the same person. When he is a hero of action, right? You need some situation requiring a new response. So Churchill needed that response. The invasion, and really, the World War II in its entire, in its entirety. So you need some situation requiring a new response. His new ideas would be untimely and impractical. When he is a hero of action, the demands of his position and the aug- exhaustion of crisis develop and inflate him to such magnitude and powers as would, in normal times, have remained potential untapped. And just listen to this writing. Events take place through him as well as around him. His ideas and decisions enter vitally into the course of history. Oh, that's hilarious. I was thinking about Churchill, and I forgot that they were gonna mention him here. At times, his eloquence, like Churchill's, may be worth a thousand regiments. His foresight in strategy and tactics, like Napoleon's, may win battles and campaigns and establish states. And then this is just what a sentence. What a sentence. The imitating majority follows the innovating minority, and this follows the original individual in adapting new responses to the demands of environmental survival. And then they go into detail on why time-tested ideas are usually more valuable than new ideas, but that is not always the case. Out of every 100 new ideas, 99 or more will probably be inferior to the traditional responses which they propose to replace. No one man, however brilliant or well-informed, can come in one lifetime to such fullness of understanding as to safely judge and dismiss the customs or institutions of his society, for these are the wisdom of generations after centuries of experiment in the laboratory of history.

7. 20:16 – 21:49

   Morals and Enduring Human Needs

   1. DSDavid Senra20:16

      And then there's just a few lines in the chapter on morals and history, and the, the weird thoughts that come to mind when I read stuff like this. I guess, let me just jump right to the point. What I wrote myself. If you can identify an enduring human need, you can build a business around that. And I'm not casting judgment on what any businesses that other people build, but you see that there's businesses around us that will endure no matter what. Some legal, some not, right? And so it says, "Sin has flourished in every age. Men and women have gambled in every age." And I think that line's particularly interesting right now because you just see the, the, the change in regulations and laws, and these really gigantic businesses built around gambling. And I have friends that ask me, like, "Why don't you bet on sports?" And I just quote Ed Thorp. I was like, "I don't wanna invest anywhere where I don't have an edge. The only place I have an edge is in my actual business." And it's actually surprised me recently, like how prevalent and just gi- like, big these businesses get. And, uh, it shouldn't have surprised me though, 'cause I had read this book. I had previously underlined this line. "Men and women have gambled in every age." I just forgot it. And then this next sentence [chuckles] I think everybody will agree with, uh, is my favorite sentence in this entire section. In every age, men have been dishonest and governments have been corrupt. In every age of human history. What does that tell you? Governments have been corrupt. Men have been dishonest, and governments have been corrupt. But I think the top level lesson or the meta lesson around that is identifying an enduring human need and building a business around that. And then one enduring and repeating need has an entire-- of the human species, has an entire chapter ch- uh, based on it. It is religion

8. 21:49 – 24:23

   Religion, Repetition, and Lessons for Companies

   1. DSDavid Senra21:49

      and history. It says, "Even the skeptical historian develops a humble respect for religion, since he sees it functioning and seemingly indispensable in every land and in every age. To the unhappy, the suffering, the bereaved, the old, it has brought supernatural comforts valued by millions of souls as more, uh, as more precious than any natural aid." And I just spent three days this past week with 150, uh, very inspiring and ambitious and successful, uh, entrepreneurs that listen to this podcast, and this is something that actually came up. I wish I... I, we didn't record anything on purpose. I want these events to be very special, and it's like you have to be there, and a lot-- And when you're not recording, people tend to speak, you know, more honestly and, and more freely. And something that came up where I was like, "Man, I w- I wish I had recorded myself saying this," was I actually think there's a lot that companies can learn, uh, by studying religions. Because religions, if you, if you think about what, what Will and Ariel Durant are saying here, like they've last longer than companies do, they s- last longer than countries do. And the reason this came to mind is because somebody once, one time, uh, described Founders Podcast as church for entrepreneurs. And I think there's a lot of lessons here for you as you're leading your company because my friend Patrick from Invest Like The Best, I always say, like, repetition is persuasive. He put it maybe even better. He says that, "Repetition does not spoil the prayer." And I think one of the main lessons that entrepreneurs and company builders can learn from religions is if you think about all the major religions in the world, right? Usually based on some kind of book. I grew up Christian, so I'll just use that as an example. You know, we don't read the Bible once and then be like, "All right, I got it. We're good." No. We revisit it. We go back to it. Then we gather, right? We repeat lessons from it over and over and over again. Repetition is persuasive. Repetition does not spoil the prayer. We gather at specific intervals, you know, every Wednesday or every Sunday or whatever, you know, whatever time in your religion. Religions have different days of the week or, or time periods, but they're, you'll see them consistently. They gather together. Sometimes it's every day. And they gather together with people that believe in the same thing that they, that they do. And they repeat the lessons that they agree upon, and they want to guide their actions and, and guide, like, their path in life. That is very similar. Like, if you go back and read any of the shareholders. Like I w- the, the example I used a couple days ago was Jeff Bezos. There's w- ideas and phrases and, and mindsets that are in his very first shareholder in '97 that are in his last one 20 years later, and you see this over and over again in these biog- biog- biographies of entrepreneurs. Th- they repeat the same lessons decade after decade after decade, the same way that the religions do.

9. 24:23 – 27:29

   History Optimizes for Survival

   1. DSDavid Senra24:23

      And then they go back to the importance that history optimizes for survival. History remains at bottom a natural selection of the fittest individuals, the fittest companies, and groups in a struggle wherein goodness receives no favors, misfortunes abound, and the final test is the ability to survive. Nature and history do not agree with our conceptions of good and bad. They define good as that which survives and bad as that which goes under. Now, it's insane, really, like remarkable, I guess is a better word than insane, how much of this book is about the importance of survival, right? Nature and history do not agree with our conceptions of good and bad. They define good as that which survives and bad as which goes under. How many times do you and I talk about and repeat the quotes and the ideas of s- of history's greatest founders on the importance of survival? One of my favorite lines on this, it ac- actually came from, uh, Steve Jobs. He says, "Victory in our industry is spelled survival. Victory in our industry is spelled survival." A few years ago, I read a 700-page biography on Charles de Gaulle, and everybody around him, Churchill, FDR, they just could not understand why the guy just refused to quit. And you could almost summarize his entire philosophy around, you know, fighting Hi- uh, Hitler and making sure that, that France remains free to his fantastic quote. He says, "All that matters is to survive. The rest is just words." In a more business context, think about if you read Warren Buffett shareholder letters. I think this is episode 227, Warren Buffett's essays, which is Warren's shareholder letters, but organized instead of by year, it's organized by, by topic, which is excellent. And he talks about that we-- that they play offense while others scramble for survival. Let me read from his shareholder letters. I think this was... This is after 2008. I don't have the exact year, but I'm gonna read this to you. And really the, the, again, the reason I'm bringing this up is because a strong financial foundation is, uh, what allows you to survive, right? To not ever take risks of, uh, you know, I'm gonna risk the remote chance that my business goes out of-- uh, that my company goes under and my business dies to, you know, make a little bit of extra money. Warren and Charlie would smack you in the face if you did that. So Warren says, "By being so cautious in respect to leverage, we penalize our returns by a minor amount. Having loads of liquidity," loads of cash, right? "Having loads of cash lets us sleep well. Moreover, during the episodes of financial chaos that occasionally erupt in our economy, we will be equipped both financially and emotionally to play offense while others scramble for survival." What a line. We play offense while others scramble for survival. That's what allowed us to invest 15.6 billion in 25 days of panic following the Lehman ba- bankruptcy in 2008. They invested 15.6 billion in 25 days of panic. And so what does this all have to do with religion? This is really a one-sentence summary, which again, Will and Ariel Durant are gifted at. One lesson of history is that religion has many lives and a habit of resurrection. In other words, religion survives throughout history.

10. 27:29 – 30:25

    Economics: Money, Concentration of Wealth, and the Social Heartbeat

    1. DSDavid Senra27:29

       All right, now we got into economics and the, where the, the lessons are even more obvious for you and I. History reports that men who can manage men manage the men who can manage only things, and the men who can manage money manage all. So think about that. The way-- This is a note I left myself that I think is a, a, a good summary of that. The strong rule the weak, the wise rule the strong, and incentives rule all. Then he goes into the fact that history is inflationary. So the bankers watching the trends in agricultural history, trade, inviting and directing the flow of capital, putting our money doubly in tr- uh, to work, controlling loans and interest in enterprise, running great risks to make great, great, great gains rise to the top of the economic period. And this is, you know, if you read that sentence now, you're like, "Yeah, it's obvious." Like look at-- I read-- This was many, many years ago, but it's like financial services was something like 8% of GDP by size, but like 40% by profit. I forgot what the, the exact stat was. But that, that's how I remember it. And we think, "Oh, this is like unique to our time." And then he goes back and he's like, "Well, this isn't unique to your time." He's describing the Medicis, the Fuggers. I've done, I've done a bunch of podcasts on it. I did a podcast on Jacob Fugger. Uh, if you just search in your podcast player, it's the richest man. I think it says like the richest man in history. Uh, the Rothschild, did two episodes, two or three episodes on them. Uh, the Morgans. And so over and over again, these are the people that rise to the top of the economic pyra- pyramid. They're not the only ones. Obviously, the company builders too. Uh, perhaps it is one secret of their power that having studied the fluctuations of prices, they know that history is inflationary and that money is the last thing a wise man would hoard. The experience of the past leaves little doubt that every economic system must sooner or later rely upon some form of the profit motive to stir individuals and groups to productivity. And then they reintroduce something they introduced earlier, the fact that humans are, are inherently in-equal. The more complex, the more technologically advanced a society gets, the more you're gonna see this, the differences in these, in this human ability expand. Since practical ability differs from person to person, the majority of such abilities is gathered in the minority of men. The concentration of wealth is a natural result of this concentration of ability and regularly recurs in history. The rate of concentration varies with the economic freedom permitted. Deputism may for a time retard the concentration. Democracy, democracy allowing the most liberty accelerates it. And so even though this reappears over and over again, it does need alleviation. Co- really, concentration of wealth does not seem to be tenable. We conclude that the concentration of wealth is natural and inevitable, and is periodically alleviated by violent or peaceable partial redistribution. In this view, all economic history is the slow heartbeat of the social organism. I like that they use the heartbeat metaphor there. And so what is interesting is right after the chapter on, uh, economics-

11. 30:25 – 32:26

    Government and the Iron Law of Oligarchy

    1. DSDavid Senra30:25

       They talk about government, and if we just went through, hey, you know, usually the most prosperous is when you have freedom, people can act in their own interests, their incentives are more aligned than if you have the centrally controlled system. But yet, if you study, uh, human history, essentially every single government, uh, is gonna default into an oligarchy. Oli- oligar- that, I didn't even say that word correctly. Oligarchy is what I meant to say. So, uh, this is fascinating. "If we were to judge forms of government from their prevalence and duration in history, we should have to give the palm to monarchy. Democracies by contrast have been hectic interludes." So what are they saying? Monarchy is the longest lasting and most common form of government in history. Democracies by contrast have been hectic interludes. Now, this is, there is a, a statement or a reoccurring theme, um, in history called the iron law of oligarchy, and they go into detail about that here, and it has to do with this inherent difference in abilities of human beings. "Most governments have been oligarchies ruled by a minority, chosen either by birth or by a religious organization or by wealth. It is unnatural for a majority to rule, for a majority can seldom be organized and united and sp- into specific action, and a minority can. If the majority of abilities is contained in a minority of men, minority government is as inevitable as the concentration of wealth." See how they tied everything they've been, like the, the past few themes together? "If, uh, the majority of abilities is contained in a minority of men, minority government is as inevitable as the concentration of wealth. The majority can do no more than periodically throw out one minority and set up another." And so the summary there is the iron law of oligarchy. And so a few pages later, it goes back to this idea that you and I keep talking about. This is why you should spend so much of your time learning and practicing so you can be better at your craft. "Every advance in the complexity of the economy puts an added premium upon superior ability. Every advance in the complexity of the economy puts an added premium upon superior ability."

12. 32:26 – 34:47

    War as a Constant and Source of Ingenuity

    1. DSDavid Senra32:26

       And so a lot earlier in the book, we went over the fact that in the biology and history chapter, that war is a nation's way of eating. It promotes cooperation because it's the ultimate form of co- competition, and that the first biological lesson of history is that life is competition. And so this next sentence, although provocative, will not be surprising. "War is one of the constants of history, and has not diminished with civilization or democracy. In the last 3,421 years of recorded history, only 268 have seen no war. War or competition is the father of all things, the potent source of ideas, inventions, institutions, and states." And that idea that war, I've, I've done a couple podcasts on this, that war is a potent source of ideas. When it is literally life and death, you will see human ingenuity at the, maybe at the apex. I mean, if you think about The, The General and the Genius, that book I did many, many years ago on the partnership between J. Robert Oppenheimer and, uh, General Leslie Grove. But there's actually a, a, an excellent book, uh, that speaks about this heroic effort for the United States industrial complex to turn on a dime in World War II and go from manufacturing things for consumers to manufacturing things to help the Allies in the war. It's called Freedom's Forge. I read it. I did a podcast on it a long time ago. I think I deleted the podcast. I can't find it, but I'm gonna reread that book, um, 'cause I, I think it's fascinating. It's really, uh, it's n- it's on ingenuity, but really leadership, and how large groups of people can get things done incredibly fast, I think is the, the main lesson. Uh, "The same causes of war are the same as the causes of competition among individuals. Acquisitiveness, pugnacity, and pride, the desire for food, land, materials, fuels, and mastery. War is the final arbiter. A nation must be ready, just like a company must be ready, at any moment to defend itself. And when its essential interests are involved, it must be allowed to use any means it considers necessary to its survival." So, you know, this goes on for many pages, and really you can, again, another one-sentence summary, whether sh- the, the lesson that they derive through studying a hundred centuries of human history. "The Ten Commandments must be silent when self-preservation is at stake. Man is a competitive animal, and his states must be like himself."

13. 34:47 – 41:21

    Growth and Decay: Civilizations, Immortal Ideas, and Controlling Fretting

    1. DSDavid Senra34:47

       And then if you have the book, I think you're especially going to be interested in the growth and decay chapter. They're talking about civilizations. I think with you and I, obviously the, the lessons for companies, uh, jumps off the page. This is really why there's always more opportunity. You know, there's always room for a new company, a new startup, because on all, on one point we are all agreed, civilizations begin, flourish, decline, and disappear. Companies begin, flourish, decline, and disappear. So what determines if this challenge will be met? "If we put the problem further back and ask what determines whether a challenge will or will not be met, the answer is that this depends upon the presence of creative individuals," what you and I call founders, right? "Of creative individuals with clarity of mind and energy of will, capable of effective responses to new situations." That, again, they're talking about civilizations, so they're talking about all kinds of things. It's, it, it holds precisely true with founders of companies too. Will this new challenge be met? Well, the answer is that this depends upon the presence of a creative individual with clarity of mind and energy of will, capable of effective responses to new situations. And so we see not the, only the death of individuals, but the death of entire civilizations. And they're like, "Well, it's just depressing." And really this is on ideas being immortal. "Whether in individuals or in states, death is natural, and if it comes in due time, it is forgivable and useful, and the mature mind will take no offense from its coming. But do civilizations die? Again, not quite. Greek civilization is not really dead, only its frame is gone, and its habitat has changed. It survives in the memory." And in such abundance that no one life, however full and long, could absorb it all. And this is a great-- Again, they do a great job of summarizing in one sentence what they mean. Homer has more readers now than in his own day and land. The Greek poets and philosophers are in every library and college. At this moment, Plato is being studied by 100,000 discoverers of the dear delight of philosophy overspreading life with understanding thought. Meaning that 100,000 people discovering Plato for the very first time right now. This selective survival of creative minds is the most real and beneficiary of immortality. Going back to this, if you can find an enduring need, you can build a business around that. All technological advances will have to be written off as merely new means of achieving old ends. We are driven by the same desires, the same proclivities. We just find different ways to satisfy them. Now we get into the mind of humans. You and I do th... I do this, I'm sure you do, too. Our capacity for fretting is endless, and no matter how many difficulties we surmount, how many ideals we realize, we shall always find an excuse for being magnificently miserable. The study of history allows you to stand outside yourself and realize, hey, these feelings that what I'm going through, what I desire, the things I love, the things that bring joy, the br- things that bring sadness, they are not unique to me. And I think it's so important to get control of our minds because we have this one shot. And I love what D. Hawk said, the, the founder of Visa, when he said, "Life is a magnificent, mysterious odyssey to be experienced." We do not want our minds to make this one magnificent odyssey miserable. We must control our capacity for fretting, since we know in nature, in human nature, it is endless. And then, as expected, they find the perfect way to end a book on lessons of history. Some precious achievements have survived all the vicissitudes of rising and falling states. The making of fire and light, of the wheel and other basic tools, language, writing, art, and song, agriculture, the family, social organization, morality, and charity, and the use of teaching to transmit the lore of the family and the human race. It's exactly what's happening now. We're reading words of somebody that's no longer with us, who's been dead, you know, for almost 50 years. These are the elements of civilization, and they have been tenaciously maintained through the perilous passage from one civilization to the next. They are the connective tissue of human history. If education is the transmission of civilization, we are unquestionably progressing. Civilization is not inherited. It has to be learned and earned by each generation anew. If the transmissions should be interrupted for one century, civilization would die and we should be savages again. If progress is real, it is not because we are born any better or wiser than infants were in the past, but because we are born to a richer heritage, born on a higher level of that pedestal which the accumulation of knowledge raises as the ground and support of our being. The heritage rises, and man rises in proportion as he receives it. To those of us who study history, not merely as a warning and a reminder of man's follies and crimes, but also as an encouraging remembrance of generative souls, the past ceases to be a depressing chamber of horrors. It becomes a celestial city, a spacious country of the mind wherein thousand saints, statesmen, inventors, scientists, poets, artists, musicians, lovers, and philosophers will still live and speak, teach and carve and sing. The historian will not mourn because he can see no meaning in human existence except that which man puts into it. Let it be our pride that we ourselves may put meaning into our lives, and sometimes a significance that transcends death. If a man is fortunate, he will, before he dies, gather up as much as he can of his civilized heritage and transmit it to his children. And to his final breath, he will be grateful for this inexhaustible legacy, knowing that it is our nourishing mother and our lasting life. That is incredible. Will and Ariel Durant can write, they can teach, and they can inspire. For the full story, highly, highly, highly recommend getting the book. If you buy the book using the link that's in the show notes in your podcast player, you'll be supporting the podcast at the same time. That is 342 books down, 1,000 to go, and I'll talk to you again soon.

14. 41:21 – 53:15

    Founders Notes Update: Naming the AI Assistant Sage

    1. DSDavid Senra41:21

       Okay, so just one quick update for you, uh, before you go. So this feature that I mentioned in this episode where I was on the phone with one of the world's largest asset managers, and within 20 seconds, I had an overview going back, you know, eight years of how some of history's greatest entrepreneurs thought about leadership. Uh, I've talked about th- that I'm constantly updating, uh... Well, first of all, on, for Founder's Notes, you know, every week I'm adding more notes and highlights. So what's been taking place lately is a lot of people have asked for an ability to have, like, a one-time payment option for Founder's Notes, where that means not only if you sign up now, you get access to every single highlight and note, uh, that I've ever done for the podcast, but you'll get access to every single highlight and note I ever will do for the podcast, which I think is a crazy value. But also, you get all the new features that I add for free. And essentially, what I'm building, what I'm externalizing to the world is this is my own internal tool to keep track of every single thing that I'm learning on this crazy journey to try to really document and really condense and clarify the collective knowledge of history's greatest entrepreneurs. So I- I've said over the past few weeks, if you've been listening to these past episodes- that I've been doing, using this... It's, it's like an AI assistant. I, it, it's trained on all, every single transcript, so every single word I've ever uttered on the podcast, all of my notes, all of my highlights, and I have over 20,000 notes and highlights in this notebook that I've been adding, uh, through this app called Readwise since 2018, right? And so Readwise is who I've partnered with to, to start building Founders Notes, and we've been working on it, you know, maybe for half a year or something like that so far. But, uh, the more I use the AI assistant, it becomes the feature that I use the most, and I'm sitting here thinking. I was like, "I don't know what the hell to call this thing." It's not Founders GPT. That's not good. It's... I was like, "Is it a chat?" Well, I don't chat with it. I ask it questions, but it's not a conversation. And so just some of the questions that I've been asking or other users have been asking, sending to, sending it to me, 'cause I've been asking people, I was like, "Hey, when you asked..." Whatever I'm gonna call this thing. We're calling it Chat right now, but that's not gonna be the name. And I was like, "Whenever you ask Chat something that you find is interesting and you like the answer, send it back to me," 'cause what I'm gonna do is crowdsource the best questions and answers, and then eventually you won't even have to search. I mean, you can. You'll always be able to search, but eventually I'm just gonna have, like, a library of, you know, the top 100, top 200 questions and answers. Like, this really targeted curriculum for entrepreneurs. So I've been asking stuff like, "I need some unique ideas on how to find new customers. What advice do you have for me? What is the best way to fire a bad employee? How did Andrew Carnegie know what to focus on? How did Edwin Land find new employees to hire? Did he find any unusual sources to find talent? Can you give me a summary of Warren Buffett's best ideas? What are the most important leadership lessons from history's greatest entrepreneurs?" It just goes on and on and on. And so when you ask this AI assistant these questions, it goes and searches. I mean, it does this relatively fast, although I wanna make it even faster. So it goes and searches every single transcript, every single note, every single highlight, and you have to keep in mind, uh, you know, I would say, I don't know. I don't, I don't know the percentage, but 70% of my notes and highlights are n- never even make it into the podcast. And so it searches all this, and then it grabs and essentially makes a summary of all these different ideas, and so it's like, oh, it's not a chat. It's like a synthesizer, because the definition of synthesize is to make something by combining different things. And so a few existing subscribers have emailed me asking, "Hey, can I test this..." I was calling it Super Search for a while. This new feature that I can't come up with a name of, right? I was like, "Oh, it's, maybe it's Founders Chat. Maybe it's Founders GPT. Maybe it's Super Search. Maybe it's Synthesizer." And I was emailing back and forth with one of them who's testing this out for me, and he's like, "Oh, it doesn't do... These names don't do it justice to what you're actually creating." And he suggested that you should call it Sage, and it was fascinating, 'cause then he listed the why he thought that. He defined the word sage. So there's two main definitions. One's a noun, and one's an adjective. The first one is a profoundly wise person. This... I'm reading this. I'll tell you what, what popped immediately to mind, and this is not gonna surprise you if you listen to a bunch of these podcasts. I, I think of Charlie Munger. I think of him as my, like, personal sage. I think he's the wisest person I've ever come across. And so it says a profoundly wise person. This refers to someone with a deep understanding of life, accumulated knowledge, and sound judgment. That is every single person that you and I have covered on the podcast. So the reason I think this tool is gonna be the one I use all the time, why I think it's super powerful, I've been telling you for a while, "Hey, don't sign up for Founders Notes. It is made for people with already existing, like, successful, uh, companies, successful careers." That is still true. I think Sage brings it to, if, to a different level in the sense that I've already s- you see how I'm already referring it to Sage. I've said I was gonna sleep on this, and I still could change the name, but I think this is it, uh, for, for, for... 'cause if you listen to, look at the definition. But, uh, I'll get back to that in one second. But what I really think is this, like, oh, no, it's, it, it's going to be for e- if you're going to invest, and many people have invested, you know, hundreds of hours, you know, even if, uh, listening to Founders Podcast, it, this tool just makes perfect sense because it is the accumulated knowledge of everything that you've ever heard on the podcast, and in some cases, there's no way you're gonna be, remember all this stuff because I said, I think earlier in this episode, you know, I was asking questions on leadership lessons, and it was pulling from podcasts I did seven years ago. There's no f- way [chuckles] that I re- I could remember it. Like, this has a perfect memory. I don't. Um, so let me go back to this. Sage as a noun is a profo- profoundly wise person. This refers to someone with a deep understanding of life, accumulated knowledge, and sound judgment. They're often looked to for guidance and advice. That is exactly the way I'm using it. I'm not chatting with them. You know, I'm asking this question. It's like, can you combine these ideas? I need to know something. I need to make an important decision in my business. Will this tool improve my decision-making, yes or no? Of course. I mean, come on. It's the accumulated knowledge of history's greatest entrepreneurs condensed and clarified, and you can have it on demand. Of course it's gonna make your decision-making over the life of your career better. And so that's the, the noun version. The adjective, it's a wise, discerning, or prudent. This describes someone who shows good judgment and makes well-considered decisions. You can't be so good at your job [chuckles] and so remarkable at your work that somebody wrote a book about your life if you didn't make, show good judgment and make well-considered decisions. That applies to every single person you and I are trying to, to learn from. And so whatever the name of this feature is, we're gonna, I think we're just gonna ship it this week. We've been testing it internally, uh, for many weeks. I don't even... Maybe two months, something like that. Then we have a bunch... It's out in the wild for existing subscribers, for people who are testing it. What I'm looking for is, like, is it, can you break it? And what I mean by break it is, is it crashing? Is it getting stuck? And so far it has proved reliable. So now I am real hesitant. So here's the thing. I'm really excited to get this out because I think this is really cool, right? And it's only gonna get better because I'm gonna add more transcripts to it, more notes, more highlights. The underlying, uh, AI models will keep getting better and better. This thing, things will be crazy a couple years from now. And I got a bunch of ideas and unfair advantages in the sense that there's a bunch of AI founders that listen to this podcast that have been giving me private product demos and saying, "Hey, you should grab this feature, and you should add it here, and I'll show you how to do it." So again, uh, this is just an unfair advantage I think you have listening to this podcast and then, uh, hopefully subscribing, uh, to Founders Notes So I have to straddle my excitement for this new feature with I don't wanna release to everybody and then, you know, it, it, you, it, it starts, it breaks because there's so many more people using it. So I think we're pretty sure, I was talking to the engineers at Readwise, the founders of Readwise. They're the ones helping me build this product. They're saying we should ship it this week. I've been using the version, right, in that the, the, the actual live version that's in Founders Notes too, and I can't break it. So we're gonna do a couple more days of testing. If there's nothing going wrong, it's going to be live. If you run into any issues when you use it, okay, there's an... You see the customer support email once you're logged into Founders Notes. Please email me. I will be monitoring. I have people helping me, but I will be looking at the emails as well. All I ask you is just be cool. Everybody's been cool. We just spent, I spent 100 and, or spent 150 days. [laughs] I spent the last three days at the first Founders Only conference, uh, with 150 super driven, successful, ambitious, inspiring founders. It, it was incred- We didn't record anything on purpose. Any event I ever do in the future, it's not gonna be recorded. Like, you have to be there. But what I was struck by is, you know, there's multiple billionaires there. There's super successful people. People have sold their companies for hundreds of millions of dollars. There's capital allocators, you know, responsible for tens of billions of dollars of capital. Everybody w- it's just a group of business nerds. Business nerds that want to get better at their craft and, and, you know, get to the end of our lives not dancing on a reservoir of untapped potential. And the amazing thing, other than the inspiration and learning and the relationships that we built, is I didn't run into any assholes. Everybody was cool. And so I think I can release this feature. If you run into any issues, just email me. I will fix it. I don't even know if you will run into it, but keep in mind, this is a tool for me first, right? I'm building something that I need. The cool thing is just by externalizing it to you, then it becomes valuable. It's not something that's just, you know, some hidden talent or hidden secret that I have. And so there's no way I'm gonna let it stay broken. I'm gonna constantly fix it. I'm on, I'm on top of it all the time. So that is my current thinking about it. I wanna... Obviously, I'm always gonna talk directly to you. Like, I break the fourth wall. There is no fourth wall here, right? I'm always gonna tell you the th- the thinking I'm, I'm having about this, the, the evolution of the thinking and what I have planned next, because this is going to be a, you know, a full-fledged platform with the North Star of the ability to condense and clarify the collective knowledge of history's greatest entrepreneurs, because I want it on demand so we can use it when we're making decisions throughout our entire career. So in addition to the AI assistant, whatever I'll name it, right, there's a bunch of different ways you can use it. When you sign up, you will get an email. It's a welcome email. It goes through. I wrote the welcome email. It goes through exactly how I use it. You know, you can still search all my highlights. That's the feature before the invention of Sage or whatever AI assistant, whatever I call this thing. That was the feature I was using the most. So any topic that I was thinking about, I would just type it in the search bar. Sometimes it's a person, sometimes it's a, it's a topic, sometimes it's an idea. Sometimes I wanna read about how did they think about patience? How did they think about monopolies? How did they think about moats? How did they think about incentives? And it would perform a keyword search for all my notes and highlights, and now we have this new feature with transcripts, which has made the search, like, 10 times better, because then you can search every single time I've mentioned it on the podcast. So you still have the ability to search my highlights. I've been getting a bunch of emails and DMs that people are using the highlight feed like I suggested, which is, the highlight feed is just a r- it presents all my notes and highlights in a random order to you. It's almost like a smart Twitter feed, but instead of reading, you know, the ramblings of some crazy person online, you read a note or a highlight from one of the hundreds, you know, 300 books or whatever I have in, uh, in Founders Notes. And so multiple people have said, "Hey, that idea about replacing search, s- like reading the news for 10 or 15 minutes in the morning, I just read, uh, the highlight feed, and it's actually a lot better." Think of it as a bunch of random ideas from history's greatest entrepreneurs that you start your morning with. And then the last feature I'll talk about, even though there's two more listed in the welcome email, you can just read it, uh, after you, after you, uh, sign up, but is the books feature. You know, you go in and you can pick a book. Like, I did this for Lessons of History, the book that you and I just covered. You know, I read that book for the first time, I don't know, years ago. And so I had 31 previous highlights from that book. You can go in and read all my notes and highlights on a book in five, 10 minutes for most of them, and you have a good idea of the key ideas for every single book. So if you want a tool that you can use for your entire career, I highly, highly, highly recommend you go to foundersnotes.com. That is foundersnotes.com. Founders with an S, just like the podcast. Foundersnotes.com, and you can get access to what I truly believe is the world's most valuable notebook for founders. It is by far the best way to support the podcast. Thank you very much for listening. Thank you very much for the support, and I will talk to you again soon.

Episode duration: 53:15