McWilliams added you wouldn’t see such a thing in Ireland, and “the way in which finance permeates the society” in the U.S. is “very, very different” from Europe. “The universality of money in the United States is something that Europeans find fascinating,” he said, noting it was the same way going all the way back to the 1840s and the travel writings of the Frenchman Alexis de Tocqueville. When do Tocqueville arrived in America, McWilliams said, “his whole idea was like, ‘My god, these people are obsessed with money.’ Europeans were obsessed with other stuff, you know, hierarchy.”
And that is how McWilliams, one of the world’s most closely followed popular economists, said matter-of-factly that America’s “boominess,” led by its piling into the artificial intelligence (AI) trade, is “undoubtedly going to crash.” Not only is it the case “AI doesn’t create any jobs,” he noted, but the key investments driving the boom are rapidly perishable. The massive investment in graphics processing units (GPUs) is problematic, McWilliams said, because it’s “digital lettuce,” prone to wilting before too long. “You’re investing in something that is a perishable good.”
“Technological change suggests that if you buy a GPU today, the chip is going to be outdated next year,” McWilliams explained, adding AI companies are “investing huge amounts of money in lettuce, which is going to go off now,” he said, referring to his mother’s expression for when a head of lettuce, well; went off.
Still, McWilliams told Fortune that even in the event of a crash, he isn’t too worried about the U.S. as the innovation center of the world. A big reason why has to do with his Uber driver in Los Angeles. And it’s a key part of why America is such a key player in the history of money.
McWilliams has no time for most economics texts, describing them as just too boring for the general public. He said he’s “always thought that the key to understanding economics is to grab economics away from second-rate mathematicians and put it back into the realm of storytelling.” He believes humans are “hardwired to tell stories, we are not hardwired to explain the world through mathematics.” And defining money as a technology, like fire, that humans invented long ago and have shaped and reshaped through millennia, was the spark for his new book.
He describes how anthropologists and biologists refer to humans as a “pyrophytic species,” which adapted to and was constantly adapting along with the technology known as fire. Money was invented to function the same way, he believes, and that’s why he expressed confidence in America coming through whatever crash lurks ahead. He sees the U.S. as an “iconoclast society” at heart, driven by its chaotic—but ultimately innovative—nature.
McWilliams explained he sees Europe as a society run like an “insurance policy,” designed to mitigate risk, whereas the U.S. is defined by embracing it. He said he sees the innovation that produces something like the AI boom is a feature, almost a byproduct of this attitude. “Acceptance of risk is why the U.S. is much more innovative than Europe,” he said, arguing “this innovative spirit is rooted in American history, going back to Alexander Hamilton, who established a great banking system and currency, allowing the revolutionary economy to borrow in its own paper within four or five years.”
McWilliams said the U.S. seems to understand innovation is “proximate”—the combination of small innovations, holding up his smartphone to the camera and noting it’s a proximate product, combining a phone, computer, camera and telephone, “which Europeans would never have conceived of.” He used the metaphor of a hammer and a nail, saying a nail is not very useful unless it’s used in combination with a hammer.
In Europe, on the other hand, “the whole idea is you mitigate risk all the time, right? You go to public health, you go to public schools, you get a job, can’t get fired, all that sort of stuff.” McWilliams added risk for Europeans “is something that is taken by weirdos in the United States,” adding risk is “the defining psychological state of the American.”
McWilliams ruled this out due to political sentiment. He suggested if President Donald Trump were to run again, his highly evolved “populist instincts” would recognize that being “against Silicon Valley is an absolute winner” electorally.
“One thing I’ve understood about America,” McWilliams added, is they by and large “don’t hate rich people … it’s the professional class they can’t stand.” The rich aren’t something to be hated in America, he said, because of the cultural attitude toward money: “Money is a great leveler.”
