Johan Norberg is an historian, an author, a commentator, and a senior fellow at the Cater Institute. He is the author of books like Peak Human, What We Can Learn from the Rise and Fall of the Golden Ages, The Capitalist Manifesto, and many more books, including Why the Global Free Market Will Save the World. In this interview, we talk about his early life in Sweden and how he changed his outlook on the modern world.
00:37:54.880No, that's a great question. And in that quote by Thucydides you mentioned, it sounds great with
00:38:04.320the Athenian constantly exploring to find new opportunities, whereas the Spartans stay at home
00:38:11.360to protect what he's already got. But obviously you can go too far in your exploration. There is such a
00:38:17.360thing as too much adventurism in various places. And yes, the Athenians show that again and again.
00:38:24.000Some of the involvement in Persia perhaps was a bit too radical, and so was definitely the Sicilian
00:38:31.360expedition. Too excited and going out too far to try to rearrange the world and
00:38:38.240and make lots of lots of money, of course. And that happens today in democracies as well. I think we
00:38:46.000have just experienced in the early 2000s, the American attempt to constantly rearrange the whole
00:38:54.160of the Middle East, which turned out in another failure. And we will see what happens this time around.
00:38:59.120We don't know yet, but it's true. You can arouse those sensations. The idea is that our ideas,
00:39:05.600our systems are so great. Let's go out and try to do everything. That's very hubristic and it might
00:39:12.080end up in terrible failures. So yes, we sometimes need to retreat. We sometimes need that cautious
00:39:20.560part of our human nature as well. Even though I would say in this day and age, in Europe at least,
00:39:27.600it's not that there's not too much adventure and excitement going on. Perhaps we've made the
00:39:34.400opposite mistake, yeah. Absolutely. There's zero disagreement from me there. Right. Speaking of
00:39:41.040the Middle East, but the geography of the region, what do you think that made the Abbasid Caliphate
00:39:47.680have this Golden Age? What ushered in the Golden Age of the Abbasid Caliphate and how was it tragically lost?
00:39:54.160Yeah, no, that's it. That is a fascinating story. One reason why I wrote so much about it is that
00:40:04.560I think it's a good counterexample to the idea that it's hopeless to create any kind of open societies and
00:40:13.280dynamic economies in certain regions with certain cultures. This was a Muslim empire governed by Arabs,
00:40:23.680even though it was then combined with Persians, Jews, with Zoroastrians, and different peoples and
00:40:33.760languages and so on. And they were great when they were open to those other ideas. When they invited
00:40:44.880not just merchants, it was a free trade empire, but also scientists and philosophers from other places
00:40:51.440translating their works, learning from their science and from their discoveries, from their data.
00:40:58.080And then you don't have to go further than the letter A to realize how much we're indebted to
00:41:04.160that Arab civilization. You know, A, arithmetic, algebra, algorithm, Arabic numerals, average,
00:41:12.960words like that showing how they thrived when it came to science and technology. And Baghdad in the 9th
00:41:21.280century, at a time when Paris and London had some 20,000 people, they had more than one half a million
00:41:29.920inhabitants, perhaps as many as one million, according to certain sources. So it was really a golden age,
00:41:35.920a very, very wealthy society. It began to break down when they had their death to Socrates moment,
00:41:44.880when they began, the empire started to fracture in different parts, different interpretations of the
00:41:52.080Muslim faith, which means that the Abbasids who governed, they became fearful, they thought that
00:41:57.600they had to impose one orthodoxy onto everybody. So instead of having free speech and freedom of religion,
00:42:05.680they instituted state-run religious schools, where the scholars could get something they didn't have
00:42:14.320before. They were funded by the government, they had sort of a stable employment. But of course, the
00:42:20.640other side of the coin was in that case, they had to repeat the orthodoxy, rather than constantly
00:42:26.240challenging it and discovering something new. So that was a slow but steady decline, which was then
00:42:33.680also it turned into a more vicious decline as civil war and eventually a Mongol invasion ruined it all.
00:42:46.640But much of that energy, much of that knowledge, the state of science had already been lost. And that
00:42:52.480was lost because of their own internal decisions, not by external forces. Thank you very much.
00:42:59.600Let's go to Song China now. Again, what do you think is really important about Song China and its golden age?
00:43:13.600Yeah, no, I find it so fascinating that oftentimes we talk about China as this ancient culture, which it is,
00:43:21.600obviously. And they had all those things, gunpowder, the magnetic compass, paper, and the printing press, a long, long time before we did.
00:43:32.960You know, Karl Marx said that the three inventions that ushered in the role of the bourgeoisie in Europe
00:43:39.360during the Industrial Revolution were those things. But obviously, they were of ancient
00:43:44.960ancient history and they came from China specifically during the Song Dynasty. That's where they had the most
00:43:53.200innovation, the most rapid development going on. And this is because it was also the era in which
00:44:00.720they were most open to surprises. They had more of rule of law than they had had under other Chinese
00:44:07.600dynasties so that it was possible for scholars and for merchants and for farmers to come up with new ideas, for urban artisans to experiment.
00:44:20.000And then they really did. They learned about how to grow new varieties of rice and of tea and how to do that in a large scale so that what was previously
00:44:32.080luxuries for the rich became sort of staples for the average Chinese. The population grew dramatically.
00:44:40.960And then that was combined with an urban revolution when you don't need as many hands in agriculture.
00:44:48.080They could go to the cities. And in cities, they have a more advanced specialization.
00:44:53.920So people come up with all sorts of different trades and technologies.
00:44:59.120And I would argue they were close in China during the Song Dynasty of really ushering in an industrial revolution.
00:45:07.920They probably produced more iron than than all of Europe did in the late 17th century.
00:45:16.480And they had textile machines, which could have continued to show the way to a real industrial revolution.
00:49:30.160Yeah, it is really interesting. And it creates this, there are paradoxes, both when it comes to tolerance, and when it comes to
00:49:37.840innovation. Are you tolerant against the intolerant, those who would undermine and ruin your entire societies?
00:49:44.560It depends. Yes, some errors have to be accepted. But obviously, we cannot accept anyone to tear down
00:49:54.080the openness, the liberal democracies that we have created. There is a paradox when it comes to innovation
00:50:00.560as well, because obviously, acquiring new capacity is great. But the ways in which we acquire that capacity
00:50:10.320can always be questioned, can always be questioned. And also some of the results can be used to undermine that
00:50:16.080very process. And we obviously face some challenges when it comes to everything from AI to weapons of mass
00:50:23.520destruction today. So there are limits out there. To me, it's quite difficult to see where you
00:50:34.800sit in a committee and then trying to foresee the future and declare exactly where the boundaries are
00:50:42.080being drawn. I think we need some sort of sensitivity to the changes that are going on learning from them,
00:50:49.760learning from the experiments and the innovation that goes on, and then trying to move the
00:50:56.560not particularly the goalposts, but the boundaries of what's acceptable and what's not. And for sure,
00:51:06.080you mentioned experiments on live human beings. That's something that we wouldn't want to accept.
00:51:12.000And where do we draw those lines? I think that's exactly what open societies need a good,
00:51:19.040healthy, open conversation about and possibly come up with some clear distinctions.
00:51:24.800Do you think that there are several sides that try to influence open society and try to run
00:51:35.760propagandistic campaigns in order to circulate ideas that could contaminate most people's understanding
00:51:44.080of what is acceptable or not? Oh, for sure. We know that many want to influence us both domestically and
00:51:54.320externally. You know, there are huge projects by Russia and China trying to influence the way we think in open
00:52:05.440societies as well. And obviously, more or less organized versions of that back home. Well, we are trying to influence
00:52:14.160our society's opinion, right? But people can do that in clandestine and more secretive ways as well. What's important to me is that we always that we have as much transparency as possible, that we know who's doing what. And, and the paradox of tolerance is there. Again, if there are closed societies trying to undermine our societies in systematic ways,
00:52:41.360we need a strategy against that in order to combat that kind of attempt to undermine what is going on.
00:52:49.200However, however, that what both you and I are engaged in and then people on on the other sides.
00:52:57.920That's the healthy version of it, because that is the collision between different ideas. And hopefully, from the light of those collisions, we hopefully can see things in a stronger light and hopefully learn something new and better.
00:53:13.360Right. So, one thing that I'm struggling with is that it seems to me that there have been some ages that have produced remarkable achievements that weren't exactly decentralized and liberalized. So, for instance, some people give the example of the early Roman Empire, particularly during Augustus.
00:53:37.360They said that there was a kind of stability that ended the clashes and civil wars of the Romans, and that kind of stability was very much good for trade, but also it led several to lots of historians writing, lots of good architecture.
00:53:58.580And then there are also some people who say that in the medieval era, for instance, there was authoritarian governance, and the minds weren't as open as they were during the Renaissance or before the Middle Ages, at least in some places.
00:54:13.460But there still were several very important cultural achievements that some people do seem to identify as them being golden ages.
00:54:23.480So, what do you think about that? Do you think that's fair?
00:54:28.580First of all, I agree to a certain extent that we don't want too much decentralization, because the useful decentralization, the one in which people can, in a very Hayekian way, come up with new knowledge, technology and business and art and culture from their own vantage points, that's dependent on a certain political centralization rather than decentralization.
00:54:56.300Because you need a strong and enforceable rule of law that creates the predictable institutions that makes it possible for society to be a little bit unpredictable.
00:55:09.040Otherwise, you end up in the chaos in which you have no idea which rules are there tomorrow, and in that case, why bother?
00:55:19.240Why invest in the future if you don't have, say, enforceable property rights or secure trade routes and things like that?
00:55:27.520And I agree, you know, with the late Roman Republic, it was an era of, even before the civil wars, where you had too many strong consuls who wanted to impress too much in the one year in power.
00:55:41.460So, they start wars all over the place.
00:55:43.960You have local governors who just want to tax people as brutally and arbitrarily as possible in their short term in power.
00:55:52.300In that case, Augustus, for all his faults, he was the guy who set down clear rules that were enforced throughout the empire and made sure that the pirates and the plunderers did not attack the travelers in the Alps or on the Mediterranean.
00:56:14.860And, yes, you needed that in order to create this flourishing as well.
00:56:19.800So, there is oftentimes unpredictability and surprises in civil society and in the economy is often dependent on a lack of surprises when it comes to, you know, violence and force and politics.
00:56:36.620One of my favorite chapters from your book was the chapter about the Dutch Republic, I must say.
00:56:46.500I really enjoyed it because I wasn't that knowledgeable of that era.
00:56:51.340And in that respect, I thought it was one of the most novel.
00:56:55.240At least, you were introducing me to a completely new topic in some respect.
00:57:00.260And I think you say at some point in the book that the example of the Dutch Republic falsifies Marxist interpretations of capitalism, according to which capitalism necessarily arises from forcing lots of people to become proletarian workers.
00:57:20.960What do you have to say about this a bit more?
00:57:25.400I think the audience would really love to hear about this.
00:57:28.060What was it that Marx got absolutely wrong about capitalism and how do the Dutch falsify him?
00:57:37.540I'm glad you mentioned that chapter because it's really a favorite of mine as well because it seems so unlikely.
00:57:44.400This weird northwestern periphery of Europe that didn't have much, they didn't even have land on which to stand and grow their food.
00:57:54.920They're up against the mightiest empire on the planet, the house.
00:57:58.060And after an eight-year war, this is a bit of a spoiler, but they win their independence.
00:58:07.080But they also create the richest civilization on the planet.
00:58:10.220And it's also interesting, as you point out, because it completely contradicts Karl Marx's idea, this origin story of capitalism.
00:58:20.340He thinks that capitalism is created through forcibly evicting peasants from the land, from the common agricultural land.
00:58:31.320We have some sort of original communism and everything was great, but then suddenly they're thrown off this privatized, enclosed land.
00:58:38.880And now they have to sell the only thing they have left, their labor, on the market.
00:58:43.960And then the capitalists and the owners of the means of production, they benefit.
00:58:48.640But, you know, whatever we think of later examples of capitalism, and I would be, we could challenge Marx there as well.
00:58:57.380The interesting thing is that the first real modern capitalist economy, and I would argue that this is the Dutch economy in the, even as early as the 14th century, but definitely then the 16th and 17th century, was not created by any kind of forcing people away from their land.
00:59:16.860It was a very peaceful, because there wasn't much land there to begin with, and few aristocrats, instead, they were farmers and fishermen who got often the right to the land by moving there, by keeping it free from water, from the oceans.
00:59:36.380And they began to establish commercial transactions voluntarily with others in the local economy, but also through trade links, especially with the Baltic area, because they knew that they would benefit from more food.
00:59:54.160From there, they didn't have enough land on which to grow their grain, and then started to specialize themselves in the things that they could produce, everything from fish to textiles, later on financial services, and so on.
01:00:12.180So it's really more of a sort of almost utopian, John Lockean version of how you establish a capitalist economy.
01:00:24.100You're sort of sitting down trying to solve your problems.
01:00:27.760How can we establish peaceful commercial transactions with others?
01:00:31.580And in this way, they commercialized the whole countryside and also built a very urban society.
01:00:39.540And this is one reason why Karl Marx didn't like to talk about the Netherlands and the Dutch Republic, because it completely contradicts it, even though I think his mother was from this place originally, or her family, because it completely contradicts his theory.
01:00:57.940What was it about the Spaniards at the time, during the Eighty Years' War, that led them to declare bankruptcy five times?
01:01:06.320They're supposed to be the mightiest empire.
01:01:13.100They control most of Europe, not most of Europe, but a very significant part of Europe.
01:01:20.920What was it that led them to declare bankruptcy five times?
01:01:23.840And in opposition to that, the Dutch, who were, as you said, outnumbered, and they lacked resources, at least to the extent that the Spaniards possessed.
01:01:38.660And actually, they ended that war by being, as you said, a great superpower and richer than before.
01:02:16.920And they had a huge army, and they had their huge navy.
01:02:20.020And the Dutch, they didn't have much except their innovative capitalist spirit.
01:02:27.120And I think that helped the Dutch because it forced them to become innovative.
01:02:33.220They knew that it was impossible to sustain their country without constantly coming up with new technologies, better business models, better financial systems.
01:02:44.920Whereas the Spaniards, and especially the Habsburg rulers, they thought that we have all these resources.
01:02:52.040Let's just use them to acquire more resources and then hire the armies to invade the Netherlands and try to take that away from them.
01:03:03.700The problem then is they don't regenerate resources.
01:03:07.260They don't have a system, a commercial system that makes it possible for them to acquire more resources.
01:03:13.540So they declare state bankruptcy, and then they just try to steal more silver and hire more armies and go to war again.
01:03:23.380And they had to declare state bankruptcy again.
01:03:25.820Whereas the Dutch constantly during this time build new wealth.
01:03:30.900They amass new wealth by constantly finding new trade routes, and not just then with the Baltic Sea, but with the rest of the world and with Asia by going out to sea.
01:03:40.640But also with a more advanced division of labor, specializing in very small and clever ways of coming up with the best ways of building new ships or the most in-demand textiles or pieces of art.
01:04:01.560Suddenly, the average Dutch household has paintings on their walls, which is unheard of until then.
01:04:08.860And in this way, revolutionize almost every sector of the economy, making themselves wealthier and wealthier, so that they could more sustainably hire the troops and the ships that they need in order to combat the Spaniards.
01:04:26.580Even though originally they didn't have standing armies and the only navy was the fishing fleet rather than anything else.
01:04:33.600I think we need to move to my last question, and it will be about today.
01:04:41.360And I want to ask you if you think that the Western world, particularly the EU and the US, have an unhealthy relation to multiculturalism.
01:04:54.020And I want to qualify this a bit because I don't like being very general and abstract.
01:05:03.180So I think multiculturalism is a beast of a term because we can give all sorts of meanings, we can mean all sorts of things with it.
01:05:13.240And to a degree, this applies to every term.
01:05:15.660But I think especially with multiculturalism, there is a kind of semantic volatility.
01:05:20.340In one respect, I think almost every country is multicultural, even very strong ethnostates of history.
01:05:29.620Because you could say that there are people or there are kinds of people who practice different ways of living.
01:05:37.100And if we identify culture like that, we end up with multiculturalism.
01:05:43.020And on the other bit, I'm going to fast forward to very different societies, like the societies we live in, especially the 20th and 21st centuries.
01:05:52.580It seems that almost every dystopia, or almost every dystopian fiction novel we have, is an example of a lack of multiculturalism.
01:06:03.000Everything is just base homogeneity at everything.
01:06:19.980Would you say that in some respects, there have been governments, especially within the EU and the EU as an organization, for instance,
01:06:29.980that try to try to sometimes put people live together, who have cultures that have vast discontinuities as far as values are concerned,
01:06:41.500which creates conflict, which then isn't policed.
01:06:45.060And then there's a whole of media apparatus and narrative that tries to present this conflict through a lens of, let's say, critical race theory, or all the studies of the left,
01:07:01.660which is invoked in order to justify inaction for actually solving these problems.
01:07:07.780Would you say that this is, you see this?
01:07:10.740And if so, what's to be done about it?
01:07:22.280Because I think that there's one version of what some people mean to be multiculturalism that I think is the engine of any thriving society.
01:07:33.640This very fact that we're not walking around all dressed in gray with numbers, but this openness to different experiences and different backgrounds and different ways of thinking and of acting and of producing in societies.
01:08:03.180And this is one of the reasons why I think that open trade societies are much more innovative and stronger than others,
01:08:11.340because they constantly pick up new ways of enriching what they already have.
01:08:17.420However, there's another version of multiculturalism where we apply this multitude to the very sort of framework of society,
01:08:28.220the very institutions that make us thrive.
01:08:32.240And we begin suddenly to assume that no ways of living, no kinds of institutions, no societies are better than any other society.
01:08:43.600And they're all kind of equal, except possibly for the Western way of doing things, because that's the worst thing, because we constantly challenge that in every way.
01:08:52.120This is a problem, because just like we need some sort of political centralization to allow for societal decentralization.
01:09:03.260I think we need very strict and defined institutions in order to have this openness to various ways of life.
01:09:11.600And when we begin to second guess our own system, Western liberal democracy too much, then I think there is a risk that everything begins to fall apart,
01:09:26.740because we need that exact framework in order to make these many colored cloaks to function in a society.
01:09:36.700So I write about this a little bit in the introduction that there is this assumption that no society can ever, no culture can ever be better than anything else,
01:09:48.760which I think is a terrible, terrible mistake, because as David Deutsch, the physicist, once put it,
01:09:56.180if you really think that, in that case, you're also saying that your own society can never improve, can never be better tomorrow than it is today.
01:10:05.440And in that case, obviously, religious oppression is just as good as freedom of conscience, and slavery is just as good as liberty and democracy.
01:10:16.900And in that case, we have been so self-questioning that we are risking to lose the very foundation on which we stand.
01:10:31.600Let's not take it for granted the kind of societies that we've built and the relative successful societies relative to everything else that we've ever seen in world history.
01:10:43.360We need to cherish and defend those institutions and not be so self-questioning that we question the ground on which we stand.
01:11:12.720I think the best way is just to look for me on social media.
01:11:19.160And perhaps they can also look at the Cato website and find me there.
01:11:24.900This is a very Hayekian insight that the multitude of things about me and my texts or videos are so much larger than I can possibly centralize and understand myself.
01:11:40.160So, a good search engine is usually better than asking me.
01:11:45.760A sort of decentralized approach to things.