Small is beautiful

So progress means for you stepping backwards?

No, no. It means bringing us to our real habitats. Like television for example. Television is not a very good discovery. It alienates people. You sit down and you have someone talking to you versus to have a conversation. And then social media came up and it has almost destroyed television. This is by far more progress because it brings us into communication with other people. It doesn’t make us passive but maintains us active. Progress has to be a destructive thing and destroy technologies that are not fit for our environment.

Can you maybe give us more examples on these kinds of technologies?

For example when you look at the history we had wars all the time. But you didn’t have heavy weaponry. So today’s wars tend to be a lot more destructive because our social maturity has not increased in line with our technological abilities. Let me also explain it more generally. We shouldn’t take big systemic risks by using technology. With this I mean we need to have a strong precautionary principle. Best example is the climate change: We should not mess with things we don’t understand. Here we have to be very precautious.

Is there also a big economic risk we have to be precautious of?

I think that we’re so much richer than our parents and grandparents that we don’t have to worry too much over these things. The only problem is that our understanding of economics is decreasing from generation to generation. I mean what you call economics is simply bad math that people are using. It doesn’t predict anything. So economics is at the moment for example just like medicine I think in the late 19^th century, where we had more people dying from doctors than at other times. Typically in nature there is a mechanism to bust these things and I call it to have skin in the game. Skin in the game describes the liability of someone who makes a mistake. If I make a mistake in business I will be bankrupt. I exit the gene pool. If I make a mistake as a driver, I can get killed. Economists can make mistakes, harm others but not suffer themselves. And that is the problem: Here the skin in the game does not exist.

Do you mean it is better to not take risks at all to avoid mistakes?

No, this is exactly the misunderstanding of precautious. We shouldn’t over apply it. We should take a lot of risks, but only the smaller ones that are not of existential threat. Actually zero the risk of existential threat. But for progress we need mistakes. A mistake can be harmful but also extremely helpful, it can have positive side effects. I call this an antifragile system that can handle randomness in a very positive way. So a lot of people say “Well, it seems technology increases from error to error and it’s luck”. No, it’s not luck. It’s positive exposure to luck.

For progress we need mistakes.

What do you think are the biggest challenges that we have to overcome today?

We have to understand reality better. We need a balance between theory and practice. For this again please take economics as an example. It’s a world on its own. In finance we learn risks practically, but economists are not practitioners. They read each other, cite each other, work in university and create their own circle. And what happens when you want to teach your children finance? They won’t learn it from a finance person who knows all these tricks for survival. They learn it from economists. So it breaks the chain of transmission of knowledge. There should be a lot more feedback between universities and practice.

Do you have an idea how the economic system should become in the future?

You know, the thing what matters is scale. What I want to convince people about is that small is beautiful. I tell them: “Find me a restaurant that has more than five hundred tables that can serve a decent meal.” Find me one, alright? So maybe it will work but it won’t last that long. I think all in all life would be local. You realize that the smaller the unit the more of a personal choice you have by picking what community you want to live in and who you want to live up to. You’d live closer to your neighbors, you will have local friends. With that you have a lot more governance because people live in a community. If you make a severe mistake, people will see you, people will notice you, so you will feel ashamed living in that community. And another important thing is to not have only a job but a profession.

So you say do something meaningful for yourself?

Exactly. The thing is you identify with your profession. You have this in Germany. You still have a huge amount of investment into your work. So you’re proud of your bread, you’re proud of your cars, you’re proud of whatever you’ve done. This to me is progress. I want the people on the planet wake up and say “I want to do something I’m proud of at the end of the day, even if it’s insignificant.”

If you consider you would have all relevant decision makers and all budget holders at one table and you could propose some initiatives to foster…

You see, I don’t like this business of big, of sitting together at a big table. My experience of these thing like TED-style NGOs is that they are more destructive. They do not have a mechanism of introspection to know if they’re helping or harming. You see, they have this self-righteous view of what they’re doing. And when you look at the record I’m not sure. And to me, if you want to help humanity, go open a bakery, make good bread, be proud of it and do small things bottom-up rather than have top-down mechanisms. I think that a good mechanism or a good system is not one that requires people to want to be saints. But a system that asks the people to do what they are made for. So if someone tells me: “I want to help humanity and solve hunger”, I tell them: “Listen. Go, you can help humanity the best by being honorable, doing your duty and contributing the smallest possible scale to the economy”.