Unrestricted Decline: Debt, Inflation and The Road to Serfdom (w/ Max Borders)

What if the maps we’re all using are lying to us?

In this episode we yank the curtain back and connect the dots most shows leave scattered: 

• The “devouring mother” vs. “tyrannical father” archetypes now fighting for control of America’s soul 
• How printed money and $38 trillion in debt quietly tax you every single day 
• Why a household “poverty line” just hit $140k in parts of the country — and why almost nobody wants to admit it 
• Healthcare’s textbook death spiral: community rating, third-party payer distortion, Medicare price floors, and the cartel that profits from it 
• China’s century-of-humiliation memory, Belt & Road resource grabs, fentanyl pipelines, and why their planners think in 50-year chunks while we argue in 24-hour cycles 
• The OODA loop as the antidote to mass psychology, narrative warfare, and orientation collapse

Three Gen Xers — Mark, Ponch, and Max Borders (Underthrow) — refuse to treat these as separate stories. Instead we stitch them into one coherent picture of unrestricted decline and show you exactly where the leverage points still exist.

If you’ve ever felt the system is rigged but couldn’t quite name how, this conversation hands you the mental models to see it clearly — and the agency to do something about it.

Watch or listen now. Then send it to the one friend who still thinks inflation is “transitory.”

Max Borders on LinkedIn

Underthrow (Substack): 

NWO Intro with Boyd

March 25, 2025

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Find us on X. @NoWayOutcast
Substack: The Whirl of ReOrientation

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Recent podcasts where you’ll also find Mark and Ponch:

The No Bell Podcast Episode 24
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Chapters

• 2:50 Setting The Gen X Lens
• 4:09 Defining Decline Through Culture
• 8:04 Devouring Mother Vs Tyrannical Father
• 12:43 Inflation, Debt, And Lost Signals
• 18:04 Healthcare’s Death Spiral Explained
• 25:31 Complex vs Complicated Systems
• 31:04 Price Signals And Orientation
• 35:16 Public Choice And Perverse Incentives
• 39:52 Tariffs, Narratives, And Conflict
• 46:26 China, History, And Strategy
• 54:21 Time Horizons And Governance
• 1:01:06 Mass Psychology And Media Frames
• 1:08:16 Restoring Agency And Mentorship
• 1:15:36 Closing And Next Steps

Transcript

Mark McGrath: 1:54

One of the things that I'm often accused of is generational pride of being a Gen Xer. And I know that not every millennial likes us. Some of the senior millennials, I guess, can stand us because technically my sister's a senior my baby sister is technically a senior millennial. I think Gen Zs and Gen Alphas, they just don't understand us at all, nor do our boomer parents. I don't think our boomer parents do. I think that our perspective is extremely unique. And today on No Way Out, it's not just the two Gen Xers that are normally here, me and Ponch, but we have uh Max Borders who writes a substack that we highly recommend from The World of Reorientation, and that's Underthrow. And uh Max is a fellow Gen Xer, and we're gonna start with the topic decline. Max, how does that suit you?

Max Borders: 2:36

Well, it sounds fun. There's nothing nothing more fun than talking about the imminent demise of the American Republic and our economic good health. To start the day, right?

Mark McGrath: 2:49

Yeah, you're preaching to the choir here. It's interesting. I think the thing about our generation that really recognizes the decline is because we've straddled both the analog and the digital worlds, probably with better cognizance and memory and capability to assume digital than, say, our boomer predecessors. And I think for whatever reason, it just seems like the slip, the decline, everybody feels it. I think I think that we're really good at detecting it and talking about it.

Max Borders: 3:15

Yeah, it's it's interesting. Think we are well positioned in this sort of liminal area. Now, of course, when our kids and their kids come online and sort of take the torch, and I see it as a torch passing. That's why I feel much more like we have a responsibility to reach these and bond and bond with this generation rather than just being observers of the liminality, and that's nothing against Boyd, you know, with with Uta. You know, we have to reorient and help them become reoriented, which is a more of an intergenerational and slow process of mentorship. And I think I'm not laying our decline at the feet of this generation. I think the way that this generation expresses itself and shows up in the world is symptomatic of some things that have gone wrong. But I don't want to skip too far ahead because there's so many ways that we can talk about decline. You know, every uh apparently every man likes to talk about Rome. And of course, Rome's decline decline was through debasement of the currency, this the you know, bread and circuses for the people, and you know, this sort of patrician class that became sort of lazy and and and weak, and really, you know, more and more in the sort of slave master dynamic became its undoing in a lot of ways. And I think we we are seeing sort of echoes of that in our society where we have this victim culture that has become so pervasive, and the idea of a man of strength and character and so on has become washed away in it. But there are economic factors too. So it all depends on where you want to start, really.

Mark McGrath: 5:09

Yeah, it seems like I mean, that's that's not a bad place to start. It seems like what we aspired to uh when you know, when we were kids and we're watching TV shows that had authority figures. Um there was a there was a Cliff Huxtable. Uh well, I guess we know how that story is developed. I wouldn't go there. No, not Cliff Huxtable. All right. Well, as I said, yeah, I guess we know how that story went in a different direction.

Max Borders: 5:35

But he played a virtuous man on television. That's that's for sure.

Mark McGrath: 5:39

Yeah, or we'd watch up to him. We'd watch the reruns of Andy Griffith, or we'd watch the reruns of Leave It to Beaver and things like that. And there, you know, there was a there was a family unit. And then um my buddy's dad used to always say, Well, it's all Norman Lear's fault with All in the Family, and he tried to make a lampoon out of the sort of you know, father figure uh type holding everything together, um, which I guess backfired because turns out people actually liked Archie Bunker and Alex P. Keaton and other other characters designed to uh um to denigrate.

Max Borders: 6:13

To be a caricature of of something, yeah.

Mark McGrath: 6:15

Yeah. But you know, it it seems that also too, like what are people if things flip so much that there are no things that that uh I I don't know if we should just limit it to men, but even even women. I mean, that aspirational things are are the things that we want to aspire to. It seems that when we were when we were kids in in elementary school, it was a much different dynamic. And I don't think it's just the medium of of electronic media and and social networking and all that. I think that there was something else going on. Ooh.

Max Borders: 6:47

There's so much there, right? We can really just jump in and hang on. I think I think there is a gendered, forgive the term, gendered dimension to all of these social movements. And in fact, let's and it's it's a little bit reductionist, but I do that for the purpose of understanding, right? So we can say more or less over the years, at least in our our lifetimes. To the extent that politics is healthy, and it's really hard for me and my kind of person to describe politics as healthy, it tends to engender animus and set people against each other. It's a zero-sum game and so on. We can talk about those dynamics as as a feature of our decline in a minute. But in terms of just archetypes, Jungian archetypes, if you like, we can think of the Democratic Party as the mommy party, the Republican Party as the Daddy Party. And mommy and daddy party fights a lot. And over the years they've fought, they've fought over, you know, control of this great family structure that we call America. And in the process, that has become so acrimonious and so much distant, so so much of a chasm between the two, that what we have now are these sort of destructive archetypes for each emerging. So between 2014 and 2024, we saw the re-emergence because I lived through the early 90s when political correctness was f first around, and so obviously did you guys. So we saw the pre the pre-echoes of the social justice fundamentalism, if you like, that happened between 2014 and 2024 when it was at its peak. And that is came to be called, and it almost like makes me want to gag to utter it, but people know it is woke, okay? With that wokeness strikes me as being until it gets to the most authoritarian or totalitarian degree, it strikes me as that is an instantiation of the devouring mother archetype. Okay. So it's like, you know, everybody who's not a certain type of person is a victim. And you get this victim, victimizer, victimhood, or you get this oppressor and oppressed, which is a which is a recapitulation of Marxism in a way, although done through culture and other means. And that is, of course, by design, but that that movement and all it brought with it, I believe, and I think that there's a woman who has a really article on this recently, I think it's Ellen Andrews is her name, had a great article about this called The The Great Feminization. And she argues, and I and I agreed with it absolutely in really strong terms, that that the social justice fundamentalism movement was a kind of devouring mother archetype. Always felt that way. And then we got, then everybody sort of got fed up with that. They got fed up with all the sort of sort of really base egalitarianism. It's like it's not, it's no longer equality of opportunity, it's equality of outcome. Positions and offices need to be allocated by, you know, something other than whether or not you can do the job well, standards, meritocracy, and so on. All of those things started to really niggle at people. They knew something was wrong in a fundamental way, and I think that awakened the daddy archetype. The problem is that the daddy archetype has its own pathology, which is the tyrannical father. And if we're not careful and careful, sort of uh the kind of we're seeing a spillover into this tyrannical father archetype with a lot of this national conservatism. So instead of uh sort of a reciprocal rule of law, people are, you know, architects of their own destiny destinies, and they collaborate together for the good of some mission or for the good of their communities. We started seeing we need to overcome them as an advancing army and march through the institutions just as they did to turn them out on their ears and take over and impose a godly masculine order, right? That is something that is starting to happen in ways that I feel very uncomfortable with on the right. So the two negative archetypes of right and left, the devouring mother and the tyrannical father, are now emergent and they're fighting over the same territory, which is which is not likely to build anything or leave anything in its wake than the architectures of authoritarian rule.

Mark McGrath: 11:42

The road to the road to serfdom. The road to serfdom. Yeah. So I published on that recently, and I I can't recommend Hayek enough because uh John Boyd read him, uh specifically The Fatal Conceit, which was uh uh influence on later versions of Patterns of Conflict, but The Road to Serfdom, there's a great cartoon version, which I put in the in the article, which summarizes it well enough. I mean, I recommend that people read the book. The book, Hayek's not the easiest guy to read, but it's it's important. Um and I I don't think it's just Hayek. I think that there's there's plenty of literature that points to this exact dynamic, whether it's Lord of the Rings or um uh C.S. Lewis. I mean, there's there's plenty of writers that have written about this too, these same dynamics and these same patterns that it seems like the pendulum is going to swing to the opposite. Like we've gone from it's like revolution, counter-revolution, revolution, counter-revolution, or revolution reaction, whatever, whatever it is. It's it's never clean, it's never pretty. Somewhere, I guess somewhere in it. I mean, I don't think we're in one now, but don't you think somewhere in it there's a golden age that everybody kind of misses? They don't they don't know that they're in it until later, too late. Like, did you ever think that the 80s were a golden age when you were out of the road?

Max Borders: 12:56

I mean, I I I mean, I I honestly think that we're still living in the golden age. And and the fact that that we have new generations who have come to take it for granted or who see it as somehow oppressive or wrong or something like that. Look, I understand that for a young person, a person in his or her 20s right now, it's really hard to get ahead. They've got they were sold a bill of goods on the uh student loans, the FAFSA program that got developed in the late 80s, early 90s, and that was, you know, probably we were the first generation who got sold that bill of goods, but it was reinforced and reinforced over the years. And as more of those student loans started starting a massive subsidy program for higher education, it just became more and more expensive. It came more and more layered with administrative and an administrative class, and so freighted it became more and more expensive to where tuition inflation was unstoppable. And now we're in a situation where people, you know, come out of university with $200,000. And of course, nobody wants to give them a mortgage, you know, or or much less a car loan, so they they're struggling. But it's also that thing just things are more expensive across the board because of generalized inflation.

Mark McGrath: 14:19

So which is at the basement of currency, as we had Frank Schostak come on our show recently. Yeah, no doubt.

Max Borders: 14:27

I mean, uh, you know, the more the more that Congress spends, the more there's, you know, printing money to infinity in order to sort of compensate for it, which floods the market with dollars. And if anyone who's ever followed Milton Friedman believes him, that is inflation is always and everywhere a monetary phenomenon. I think that there are things that can affect that can affect prices, such as energy prices and so on, and regulatory features. But at the end of the day, the biggest factor in inflation writ large is is the money supply. And it's it's uh it's the way that that powerful tax us without having to raise taxes. And and it happens to you constantly, and nobody understands because they take all these things for You can't save money because the value of your money is, you know, your purchasing power is reduced, and you're not likely to make any kind of because because at the end of the day, when you bring down the interest rates and inflation is higher than the interest rate, in real terms, you're not saving money, you're losing purchasing power over time. So even so then you get generations like ours in the boomers who have been told by the system we have to put everything into securities, unless you're a Bitcoiner or into crypto, which I am. But otherwise, most people in our generation are not. And what they do is that we either buy real property or we put everything into securities. And that has inflated a massive bubble. And that bubble continues to be pumped up through monetary Keynesianism, and it will into perpetuity till it's well, let's not say in perpetuity, but that will be done until it's no longer sustainable. And I don't think that we have we're very long for that sustainability. And that means our kids that that, you know, basically millennials and Z and Alpha stand to inherit a world that the boomer the boomers and the gen and the greatest generation created that the Xers are doing nothing about right now except bellyaching. I'm sorry to say that, but they haven't. There are Xers in Congress who are bellyaching about it, but they're not enough. They don't they, for some reason, don't r respond to the same incentives that the rest of Congress does. And so we spend and spend and spend. Aren't we the smallest generation? Aren't we the narrowest band, I think? Well, I'm not sure about that. I uh I I think we were smaller. I'm not sure.

unknown: 17:06

Yeah.

Max Borders: 17:06

I think we were smaller a bit than than uh than the boomers. They were, you know, the the greatest generation came back from the war and they had a lot of babies. Yeah, a lot of kids. That's for sure. Yeah. And we uh the the boomers were, you know, family planning came online in 1961, I think it was the birth control pills introduced. And then by the 70s, you know, it was far it was more, you know, the emergence of the independent woman. Yeah. Yeah, and two working parents and stuff like that. But I think there were fewer babies. But we weren't seeing the demographic collapse we're seeing now. Do you find this is what really troubles this is another thing that really troubles me about this generation that's coming online, that they're in their prime mating years, if you want to call it that, is that they are not having kids. And it's scary. We're gonna, you know.

Mark McGrath: 17:59

I always thought, too, that the working mother was always sold as, oh, this is an advancement of women's rights, but actually it's because the currency was so debased that you needed to have two incomes in a household, or else you couldn't you couldn't survive as a family.

Max Borders: 18:13

I think that's right. 70 was the final decoupling of the dollar from the gold standard. Things went haywire after that in a lot of ways.

Mark McGrath: 18:26

Aaron Powell And then you explain that to people and they look at you like you're speaking in Klingon. Like you tell them about, you know, I I actually for our paid subscribers, I put up all my sources that I put in to say to teach somebody that because I get this a lot. Well, like, where would you start? I said, well, the advantage that you have now, if you start, you go in the Mises Institute and you grab all these PDFs that are free and cost nothing, and you put them up in Google LM and you build yourself a class to teach yourself about business cycle theory, to teach yourself about the mystery of banking or how the Federal Reserve works, and you understand what's actually going on. Or or watch the movie Zeitgeist, you know, or Zeitgeist 2. If you if you need a if you want a uh entertaining version versus uh you know an economic literature version. And then people look at you like, well, I've never heard this before. Like no one ever, no one ever taught me this before. Well, that doesn't mean it it, you know, it doesn't mean it's not valid. It doesn't mean it's not being used against you.

Max Borders: 20:11

Yeah, and funny you mentioned Zeitgeist. I think that guy's a socialist, but he does a great job of really setting out how how the monetary system sort of pulls everything apart through time and makes people into debt slaves, essentially. I hate to use that kind of that kind of terminology because it can sometimes make make people bristle. It's like, oh, I can't take this guy seriously because he's using that kind of language. But we have to be honest about these things. And when I say debt slave, there's a little bit of a little bit of what what could we call it? Um hyperbole in that. They're not we're not literally slaves of people who are in debt, but certainly there are massive pressures. You're kind of up against the wall financially, and more and more people are. I think not only are we in record debt in terms of sovereign debt, what the federal government holds in debt, and what we have to pay for as taxpayers through printing money just for debt service, there's also a problem with personal debt, private debt. I think that we're at record high levels right now. And as soon as one of those goes tits up, there's gonna be a big cascading effect throughout the entire economy. And I th I fear we're gonna we it may take decades to recover from it.

Brian "Ponch" Rivera: 21:34

So, Max, the past week, uh Mike Green, one of uh uh our our our friends uh who does a lot of work in investing uh wrote something that says, you know, the new poverty line is $140,000. He changed that. It's not necessarily a poverty line, it's just the the amount of money you need to survive in a certain county. And that changes context specific, right? It changes based on where you are in the U.S. But he points out a lot of things we just said, and it's kind of controversial because people attack and say, well, that's not the party uh the poverty line. What's happening here is Mike is telling the world that it takes a lot of money to have a house, pay off debt, have a car, have two children, have two jobs, and just to get by, right? And yet people are attacking him saying this guy's completely lost his mind. That's not true whatsoever. Everything's great. But I I just want to bring this up because uh I don't know if uh I think some of our listeners have been following this over the last week. Checking in with you. Have you seen this at all? Are you you track any of this? Can you say it one more time? Yeah, the so Mike Green uh identified that 140,000 is what he calls the poverty line. And I forgot which county it is. It might be somewhere in New Jersey or something like that. Um But he breaks it down and says when you look at the the cost of not just rent, but mortgages, insurance, health care, uh cost of daycare, food, transportation, all that, it you need about $140,000 a year just to get by.

Max Borders: 23:01

Gotcha. For per household, right? Per household, right. Yeah, yeah. That that kind of makes sense. I I don't know the empirics on it, but that rings true to me, even where I am in the Carolinas, which is probably cheaper than, say, the Northeast or West Coast, for example.

Brian "Ponch" Rivera: 23:20

I think he came under attack because of the numbers, like it's $136,000 is the real number he came up with for a certain area. But that is, it's based on where you live, too, right? So yeah, it doesn't mean across the US you need $136,000 to survive as a household. In some places you do.

Max Borders: 23:37

The point sounds a little bit um hyperbolic, just like that slave may have, uh just because I think we'd we'd still be the envy of the world. Any by any household making a $136,000 is still the envy of about 90% of the world. So we should be under no illusions about that. More than 90. Yeah, well, exactly. You know, I I'm I'm I don't wanna I don't want to overstate it though. So I gave that conservative percentage. I think what what he means by poverty is relative poverty, as in relative to the past, what it takes to have a decent standard of living, to cover all the bases of the kinds of things you want to have covered. For example, being able to pay your taxes, being able to pay your bills on time, making sure you have health insurance, all of these things. And so many of them have been artificially inflated for various reasons. We know, for example, that energy costs were artificially inflated over the last four years until the most recent administration came in and said, okay, we're gonna liberalize this industry again and not over regulate it so we can bring down those costs. And that has happened. Credit to the current administration, unless you're worried about that climate change is gonna destroy the world in 12 years, which is now down to about four years, I think. But in any case, that that 12-year figure has been cited so many times. I don't I don't know what which one to take seriously.

Mark McGrath: 25:09

But I think it is four, because when uh when I think it was AOC that said that, right, in uh 2016. Okay. Okay. That sounds about right. We're getting down. Yeah, of course, when we were kids, there were people telling us that we were going into an ice age. And when when we were kids, there were people telling us we were all going to be nuked in the year 1991, and there was you know, so we're still here.

Max Borders: 25:32

We were we are, and look, I'm you know, one of the issues that I think is really that could be the linchpin of of rapid decline is health care. That is one thing that we want people to be able to afford and have access to. Not only for compassionate reasons, like we want to know that everybody can go to the doctor and get get healed and fixed if it's possible, right? And people can seek treatment. But also for for we we don't want those inevitable aspects of our lives to completely consume the portion of our income that makes life worth living. You know what I mean? Like um if we do get healed. So for example, uh in what was it, 2009, we got the ACA, which is Obamacare. And everybody at the time who opposed Obamacare warned in vaguely Hayekian terms, but in certainly in understanding of market prices, that you were going to get what is called a death spiral from this. And specifically, if you're gonna charge back what is known as community rating, older, sicker people the same price as you do young people, then you're gonna have a really, really bad market distortion. And that market distortion is gonna cause inflation. Couple that with the sort of third-party payer effects, the expense account effects of nobody goes in and actually price shots. Everybody goes, What's my copay? We don't see that even though you paid $50 for that blood lab work, the rest of that $450 went into onto the risk pool, and that that aggregates making premiums higher and higher and higher for people. When you start, it's just like you were talking about earlier. When you start trying to explain this kind of stuff to people about healthcare, it looks like you're speaking Klingon.

Brian "Ponch" Rivera: 27:31

We know exactly how that how that how you feel about that. Yeah, I mean, speaking of Klingon, you brought up a liminal, you know, you talk about woke. We Mark brought up the uh the brief from um earlier about the anatomy of a decline and all that. But it is hard to get through people whose jobs or livelihood depends on them not seeing these things, right? It's it's easy to throttle back and just be a recipient of the system than it is to be a participant of it.

Max Borders: 28:02

That's right. It's the economists call it rational irrationality or rational ignorance. Let's just go with rational ignorance. You don't have a strong incentive, no individual person has a strong incentive to understand the dynamics of the healthcare system. They do have a direct and very strong incentive to realize how much their co-pay is. Right? So to understand at a at a complex or complicated is a better term, if you're into complexity science, there's a distinction there. Complicated healthcare system, there's very little incentive for you to understand it and understand it correctly. However, what you as an individual pay and what you receive from from that having paid that, you have a very strong incentive. So people can tell you the in and outs of their convoluted health plans, but they can't tell you and give you a macro picture of why this thing is coming apart. And so you get exactly what people like me were saying back then when Obamacare passed, is that you're going to see a death spiral, which means you're going to have to continuously subsidize the ACA exchange to with taxpayer money to paper over the fact that it's becoming more and more expensive and the system is coming apart. So now that they've stopped subsidizing it, which they did in earnest during COVID, what's happened? People are starting to bellyache about how the Trump administration isn't subsidizing their health care plans. So it's doubled. Well, this is where people need to get the sticker shock in order to necessitate change. It's really hard, though, because all of the because who benefits? Kibono, right? Yeah. We we know the big pharma benefits, we know the insurers benefit, and everybody blames the insurers. Nobody blames the care providers, but the doctors in the hospitals are making bank. Yeah. They're making 10, 10 to 15 percent profit margin on all their activities, whereas the insurers are only making two to three percent. There's a vast difference there, and everybody blames the insurers for trying to trying to dial it back, but it's it's all a feature of a shitty system, excuse me.

Mark McGrath: 30:18

I think it was PJR Rourke who says if you think health health care is expensive now, wait till it's free. Oh yeah. Well, exactly. And the and the economic lesson is that anything subsidized automatically pushes everybody's prices up. You know, my first job for 15 months before I went to the asset management world, I was in medical sales and I worked for a diagnos a diagnostic pathology lab. You know, we would sell our laboratory services for biopsies. So, like if you got a uh you know, a prostate biopsy or a gastrointestinal biopsy or dermatology biopsy, whatever it is, they'd send in the specimens and our pathologists would look at them. Well, I remember when I was in training, the uh vice president of sales handed me a box with uh six little jars in it for a like a sextant prostate biopsy. He goes, that's $1,200 right there for the company. Well, why was it $1,200? Because that's the Medicare rate for a six-jar uh uh prostate biopsy. He's like, and if you get $12, you get you know twice the mice, it's $2,400. Well, that's because because that's what Medicare is willing to pay for that. What's remarkable is that if I don't have Medicare and I'm young and I need to get a prostate biopsy, I have to pay that price. Why? Because that's the floor that the government set. The government set the floor at $1,200 because why would I why would I care for somebody and lower their price if they were below the Medicare rate? I'm gonna use what the government's gonna pay me as the baseline. That's the floor, and everything has to be above that. So what happens to everybody else's costs?

Max Borders: 32:02

This is this is such a great point that you make. And it's and I almost feel like we have to have these kind of conversations like you're having, rather than trying to paint a big macro picture. So when you use the the medical device example, and I use the blood test device example, uh device, or blood test rather, what we're doing is we're pointing to the fact that all of the price system in healthcare has essentially been destroyed. The only things that don't fall under the third-party payer dragnet, which is heavily regulated and heavily distorted, and the prices are just completely out of whack. They're not rational at all. They're made based on uh whether it's the arbitrariness of Medicare payouts or the arbitrariness of some other regulatory phenomenon like community rating and the fact that we use healthcare buffet cards instead of our own bank account cards, we get massive distortions. They can inflate everything away, and then the insurers have to negotiate, but they're really a part of a vast cartel, right? A cartel, uh, what I call the cartel, because they're all in a sense in collusion. They know that there is this, that there is a lot of profit in all of this distortion. And they they share the spoils among themselves. And we we are just functioning within an incentive system that permits that to happen. And then we come back and look at the healthcare premiums and then we bellyache and wish that they could be changed. But who do you think is sitting down there with all these politicians in Washington on K Street? It ain't you and me. It's, you know, it's Blue Cross, Blue Shield, it's, you know, the hospital conglomerate, it's the big pharma guys. All of this kind of, these kind of phenomena keep the system as it is in place and keep us paying high prices. Whereas if we could reintroduce a la Hayek, a la Ludwig van Mises, a rational price system back into it that was competitive and transparent, we would see vast changes in in our behaviors and a bringing down of prices. We don't see that. So here we are, we're stuck with this shitty system. And now the very people who gave us Obamacare and its death spiral that we're living through now want to give us Medicare for all.

Brian "Ponch" Rivera: 34:40

You alluded to the difference between complex and complicated. I think that's really germane to this conversation because at the end of the day, if you understand the difference between those domains, if you will, you can start to realize what's going on. So let's go back and look at comp complexity or comp the complex domain, which is the domain where the relationship between cause and effect is only known in retrospect. And you get concepts such as of emergent self-organization in there. It's really about the system. If those who understand complexity theory can actually drive the system through amplification and dampening, putting probes into that system that drive behaviors. That's called leadership and or manipulation, depending on how you want to look at it, right? We get uh propaganda out of that as well. On the complicated side, it's a little bit different. That's just a uh a jet is a complicated system. You know, you put a human in it, it's a complex system. So fundamentally, uh, and you write about this in your book too, or one of your books, about complex adaptive systems. Understanding this, we we don't learn this in school, by the way, right? I I didn't learn this in an MBA. I didn't maybe they brought it up as wicked problems in in joint professional military education and things like that. But what John Boyd was looking at in his favorite book happens to be about the complex adaptive systems in biology. That's where, you know, one of the key reasons we talk about John Boyd's work is it helps you understand the difference between a complex system and a complicated system, as does the Kinevan framework. And I think uh you might be familiar with that based on the way you write. So can you take us through that a little bit deeper based on the conversation we just had about healthcare kind of area?

Max Borders: 36:15

That's gonna be particularly challenging, but let me give it a shot. I mean, one of the things that I think the reason that Boyd uh, and you guys are the experts on Boyd, so I'm you know, you you can throw tomatoes at the screen if if I start to go go amiss. I I know you'll remind me where I go wrong.

Mark McGrath: 36:32

But but I think we send we send men in uh black ski masks and black vans. Just kidding.

Max Borders: 36:39

Um maybe I shouldn't talk about Boyd then, but Boyd strikes me if you if you had to just strip it down to compare, you can see why Boyd was enamored of Hayek, first of all, because Hayek is really playing in a space where he's starting to grok the ideas of complex systems in an economic context, where price signals were a decentralized mechanism of bringing some rationality to how resources are allocated. And he understood those dynamics very well. Boyd is operating in military theater, right? So I think he was flying airplanes or something like that. But it doesn't matter where you are in the military, you don't have a price signal to respond to. So the OODA loop is this way of resp uh um, as the, as the uh the name suggests, observing, orienting, deciding, and action, isn't it? In that context, based on the information you have. With a price system, with a price, you have a I don't want it that bad, or I don't need it that bad, and you make a binary decision about whether to buy or not, and that aggregates and sends a signal to the rest of the economy. It's like, okay, we may need to bring this price down. People are making the no decision on this. For Boyd, it is a complicated state of affairs. No, no, no, no. The the plane he was flying was complicated, but the environment in which he's functioning is complex. And so it's about moment to moment trying to go through a process of regarding the your your milieu, your environment around you, and making the best possible rational assessment, which might be like quick Bayesianism or it might be something else. But the OODA construct is really meant to be add something to this real fast.

Brian "Ponch" Rivera: 38:32

It's it's autonomous, right? It's it's an you have agency in doing this. That's critical. Yes.

Mark McGrath: 38:38

I don't think orientation would negate pricing either, because that's something that would be weighed in a decision. Like it would, it would, it would weigh out, you know, the the the mismatch, the environment.

Max Borders: 38:49

I definitely think Uda belongs in an economic environment. Trevor Burrus, Jr.

Mark McGrath: 38:53

Well, he was an economist. Like his his original degree was in economics. Ponch's degree is in economics, my my master's in economics. So like it is it is interesting. And he did study quite a bit of it. Um the the one thing that really pisses me off about Boyd, when you go through the thousands of books that he read, you look at the list, it's hard to imagine that he didn't believe, or I'm sorry, it's hard to imagine that he didn't read Mises because he kind of bracketed all around uh Mises. And I always wonder in how I drew the original connection with Mises and Boyd was from the praxeological axiom, which really Mises is just describing John Boyd Zudolu's sketch. Yeah, that's great. Okay. To your point about price pricing, too, is like we scan the environment and we get signals. And what what Frank was talking about when we had him on, Frank Schostack was talking about, was that our our because of monetary inflation, our actual our price, the price signals are all being distorted. So in our orientation, we're weighing and considering things that aren't necessarily matching up to reality. So that mismatch is diverting us. That's why we buy a house in uh you know the year 2004 for 250,000 and then sell it in 2006 for 500,000.

Max Borders: 40:03

Yeah. I'm got something for you. Isn't we're we're we're we're we're based so much more of the economy is based on a lie.

unknown: 40:09

Yeah.

Max Borders: 40:10

And if it's not truth-conducive, we're gonna start to that's gonna start to manifest itself. The lie is gonna be laid bare.

Mark McGrath: 40:17

And the medium is the message. That's where the McLuhan comes in because that environment is overriding your system and you're functioning and you're operating, and that is if that's reality and it's not.

Brian "Ponch" Rivera: 40:28

So maybe so I got something for you here, and then this connects back to what Max is talking about, and we we're talking about agency and the ODA loop in uh the context of healthcare. So ACA to me is a centralized approach to it's a command and control approach to healthcare, right? It's it's it's socialism. And I'm not sure.

Max Borders: 40:44

It has a little bit of market features in it and arbitrage opportunity, but so little that it's negligible.

Brian "Ponch" Rivera: 40:51

Right. So we so we're not flying our own airplane in that context. We are being driven by ground control intercept or ground control control, right? They're telling us where to go. Right. You got to go over here, you gotta do that, you gotta do that. What we need is some autonomy, or more autonomy, I think. And that's and then that's that's how I'm kind of seeing this as that oodaloop that we were talking about in a free market, you have some agency. In communism, we've we've had uh Bijan on here to talk about this too, you know. Um really? Adrian Bijon?

Max Borders: 41:21

Oh, yeah, yeah, yeah, yeah. Yeah.

Brian "Ponch" Rivera: 41:23

That's so great, man. I gotta go look at that one. He's done. Yeah, he's coming back on in a few months after his new book comes out. So looking forward to that. But the whole point of his constructal law is about design and currency, which I think is really applicable to what we're talking about today, too, and the way we look at John Boyd Doodeloup, but it's really about that design of the system. The system drives behaviors, right? The big D being designed. It's not out of verb. Kind of getting off track here. But when we look at a command and control approach, which again kind of looks like socialism to me uh and and or and or communism, that moves away, that reduces the agency that we have as individuals, right? And and right that's opposite of what we're trying to profess here on No Way Out, right?

Max Borders: 42:07

And we lose the invisible hand thing. Invisible hand metaphor from Adam Smith is really all pervasive in the in the Austrian economics tradition, which means that there is, for lack of a better way of putting it, a greater overall good that results from individual truth conducive decision making in real time.

Brian "Ponch" Rivera: 42:28

That's self organization.

Max Borders: 42:30

The easiest way to describe this in the context of healthcare is to go back to your examples of complicated and complex. The Great Barrier Reef is complex. That's a complex system, or the the Amazon rainforest. And there's this sub Discipline of metaphysics called Meriology, which is the relationships between holes and parts. But we know what a system is, and we know systems can be bounded. The Great Barrier Reef is a bounded system of highly complex interactions among and self-organizing system among life forms. We also know that a 747 is a different sort of thing. That is something whose causal nexuses we can observe and plan and de detail in our engineering, right? So we know essentially all of the I mean, there are probably some microprocesses that cause it to deteriorate in time and stuff like that, but we have a pretty good grasp of that. So that the engineers at Boeing more or less understand how all of the parts interact with each other to give rise to getting people safely across the country on Delta or whatever. The problem with our healthcare system and our our high modernists in Washington who they they under they see the world as we've just got to they're trying to put their mitts into an economy that is more like a Great Barrier Reef, but treating it like a 747. And they're two different things. And that's why everything fucks up. That is cool.

Mark McGrath: 44:08

They see it as an engine that can be engineered or a machine that can be run by circular flow, whereas Hayek and Boyd and others that understand that all action is human action and the economy is actually an organic function. A market is a natural process. The Federal Reserve does not occur in nature. The S P 500 does not occur in nature, but people exchanging for one condition and trade-off for another, that does exist in nature. And that's what that's what real economics is. It goes back to where we're talking about housing and anybody's seen the big short. All these people are oriented to something which they think is real, but it's not, because their signals that they're receiving are distorted by the inflation or the uh the preference that one industry or sector got over the other or you know, withheld information or whatever it was. What they were what they were weighing in for their own judgment was disconnected from reality. These were not AAA rated securities. These were actually a bunch of people not paying their mortgage, you know, and they could hide it under things. And you realize that that sort of that sort of uh synthetic collusion does not occur in nature. It doesn't. That's not how that's not how equal that's how corporatism works, that's how mercantilism works, that's how Keynesianism works, that's how socialism works. But capitalism, small c, not not, not the big c distortion of the definition, is nothing more than two people exchanging one set of circumstances for for the other. We're trading right now, we're trading time. Millions and billions, yeah. Yeah, and you're constantly doing it. And this is what we tell about UDA. You're constantly the process is never this never stops, right? We're we're we're constantly economizing. You're right now we're trading time, we're sharing time with each other, we're trading uh alternatives that we could have been doing other things, and you know, and here we are. Like you're constantly, you're constantly doing that.

Max Borders: 46:01

But if if if it had been under the auspices of like we don't care about your opportunity cost. Yeah, yeah. Like we're gonna spend this for you. You're welcome.

Mark McGrath: 46:14

Basically, you're gonna have your orientation rewritten by somebody else.

Brian "Ponch" Rivera: 46:19

Mm-hmm.

Max Borders: 46:20

Yeah. And that orientation, orientation is almost always false relative to people at the periphery, of at their periphery. In other words, us. It's it's almost always creates falsehood and distortion. And it layers it because invariably they go back and try to fix their mistakes with other mistakes. And you get just a layering of mistakes on and on and on. And welcome to the Federal Reserve, welcome to Congress. It's just it's a shit show. You know, and one example in in and Hayek and and so on. Um and in Bijan, if I don't maybe I I'll I'll leave Bijon because people might not know what the constructal law is and how vascularization happens. But if you the simple way of saying it is if you can imagine any kind of vascular system, whether it's our the blood flow through our body, the river basin, or any other system of natural flow, when people, central authorities come along, they think that they can do it better than it, than it than it organically occurs. That's when you run into problems. Yep.

Mark McGrath: 47:22

Now we bring in, yeah, now it's even more boy than Hayek, right? The pretense of knowledge. Now we think that like we're, hey, we're in DC and we're smart guys, and you know, Punch represents Colorado, and Max represents North Carolina, and Mark represents uh Pennsylvania, and we can all gather together in Washington and we can figure out the whole everybody in L50 states. We can figure all these things out for you as if we could see the information ourselves, as if we have any idea.

Brian "Ponch" Rivera: 47:48

There's another layer to that, Mark, the system that's d driving the you know the behaviors in DC too, right? They're not just going up there with our interest in mind.

Mark McGrath: 47:56

Right.

Brian "Ponch" Rivera: 47:56

They have their own selfish interests. And that's not because they're naturally evil.

Max Borders: 48:00

It's probably because the system is driving them towards the well, they're they have the same selfish instincts that we have, but they're in an incentive system that provides different rewards and punishments than the one we operate in.

Mark McGrath: 48:13

Right. You know the the the Facebook movie, whatever, what was it called? Social Network, Larry Summers was portrayed in that movie. I bet you the next movie about Larry Summers is going to be really different than why, because these these systems that drive behaviors, you know. But just as an example, he probably went into things with the best intentions, right? He probably, you know, he's a guy behind the scenes, but these sist, yeah, these people are no one's exempt from uh what Mises is describing. No one's exempt from Uda. No one's exempt from what what Hayek is talking about. They're they're describing what actually happens in universal reality, not not um, you know, um the Keynesian 45 degree angle thing. I mean, it's all that's all smoke and mirrors uh horseshit. Yeah. Yeah.

Max Borders: 49:00

Yeah, I couldn't have said it better. The other interesting sort of companion to the Austrians, I think, is the public choice school. I don't know if you guys have gotten into public choice theory.

Mark McGrath: 49:12

A little bit like the George Mason crowd, like uh Buchanan and and others. Buchanan and Tulloch. Uh also uh I know the purists will argue like, well, they're not really Austrians, or they're not really Yeah, but who cares?

Max Borders: 49:25

They have great insight. Yeah, of course. It's like uh to me, they're they're they work in beautiful tandem. The the public choice theorists are especially even even like Mansur Olson, who was considered a man of the left, he saw the dynamics of decline, speaking of, as being more or less a process of concentrated benefits dispersed costs. If you can if you can create a situation where concentrated benefits, namely special interests or favor seekers in Washington, have a strong incentive to benefit, and it's a fraction of a penny's cost to you and me to understand how they're benefiting at our expense. We don't have the t the inclination or the knowledge or the incentive anything to push back against that. It's like sometimes they use the example of a mohair subsidy. And first thing people say is what the hell's mohair? I was like, Oh, okay. Well, there's a kind of uh goat Benny and the Jets, the mohair or suit. Yeah, yeah. It's like it's a it's a it's a fabric, it's a kind of wool that they used in the war, in Second World War, and they subsidized mohair so that soldiers could have warm coats. Well, it's never stopped being subsidized. It's like we're not we're not, you know, uh trudging through France on the way to Germany now, right? With with with our um military. So why is it that we're subsidizing mohair? It doesn't make any sense. But you don't know what mohair is, much less that there's a subsidy on it. And so there are a million stories like this as these favor seekers accrete around Washington and they contribute to our $38 trillion debt because everybody's got their hand in the till or their snout in the trough.

Mark McGrath: 51:16

Anybody care to guess why your your Coca-Cola has high fructose corn syrup in it and not sugar?

Max Borders: 51:21

That's right. I mean, it's the same. Got their corn growers out there in Iowa who they really love the idea because and the and I was always first to vote. So very powerful agricultural lobby, love to grow that corn, turn it into syrup, and stick it in your coke, even though it's not as good as sugar.

Mark McGrath: 51:39

Yep. Making you sick. And also, too, the sugar sub the sugar tariffs that we've had for years that make uh things anti-competitive. I mean, we're we're not the we're not, you know, for the most capitalist country in the world, so-called. I mean, we we certainly do we have a penchant for protectionism.

Max Borders: 51:57

It's true. And it used to be when I was coming up, it used to be that was sort of a leftish thing. Yeah. They didn't like that we were, you know, uh it's like I did I was opposed to agricultural subsidies not just because I don't want to have to pay artificially high prices to prop up some domestic industry. Um I I also have a lot of compassion for the poorest people in the world, where architecture is the first the first rung on their ladder to prosperity. And if we can't trade with them, then then those are foreclosed opportunities for them. Now, I have softened a little bit, I admit, to the idea of tariffs. If I thought that going into tariff conflict the way that the Trump administr administration has, is more likely to get reciprocity in trade, where countries that would have levied big tariffs on our goods would back off of it a little bit. If you use it in that way to get to a free trade kind of overall in the world, that's fine. And if you want reciprocal tariffs on a country that that uh has them on you, I I I understand that, even though we have to pay the bill. And I understand the d desire to reconstitute certain industries on these shores so that we don't get caught with our pants down where other factors that are not economic but that are geopolitical could really get us. I understand that impulse too. But tariffs for the sake of tariffs, uh tariffs on top of um in you know, income tax and corporate tax and sales tax. I mean, it's it's just too much.

Brian "Ponch" Rivera: 53:40

Yeah.

Max Borders: 53:40

So I know that they're not gonna be able to do that. They start wars sometimes.

Mark McGrath: 53:43

Sometimes where you're sitting in South Carolina, sometimes uh tariffs cause people to fire cannons at uh tariff collection points in the in the harbor. Mm-hmm. And why? Because people wind up paying more for the goods and services that are staple to them. They end up paying a lot more. We should just describe the kinetic war, though. Well, sometimes uh sometimes a fifth generation war or like a narrative war turns into a kinetic war really quick. Yeah. But we're already at war. I mean, people don't understand. Well, that's true. Yeah, tariffs. Look at our article on Substack. Yeah, tariffs are narrative weapons. I mean, that's that's the side that everybody kind of forgot. Um you know, back to unrestricted warfare. I mean, it says in there, we're gonna use tariffs. We're not gonna we're not gonna build fight them in the sea, we're gonna use these tariffs.

Max Borders: 54:33

Yeah, I have a uh I have a lot of mixed feelings that I'm curious to go know what you guys want. I know I'm not conducting this interview, and I appreciate that.

Mark McGrath: 54:39

Yeah, it's conversation. Yeah, yeah, yeah. No way out of conversation plays.

Max Borders: 54:45

What uh what do you think about China and what to do about China? Knowing that China's asking the same question about us, we've had some imperial ambitions. We we had a nice after the fall of communism in the early 90s, late 80s, early 90s, we had um pretty good stretch of a Pax Americana with you know globalization protecting the sea lanes, where our military was just, you know, designed to sort of help lower trade barriers. We had the some of the the GATT treaty and so on that helped um uh help the world start to trade with each other more so you get the gains from trade. Uh but a lot of people see this, and there's a conflation, of course, between globalism and globalization. And a lot of people don't like both, especially these days. The America First Crowd likes neither. They like neither globalization nor globalism. I don't like globalism, which is the centralization of authority around the globe, into these multilateral institutions like the UN or or the uh or European Union because they're unaccountable, they're undemocratic, and I'm and I'm not even a fan of democracy, but that's bad, you know, the way these are starting to function.

Mark McGrath: 56:05

Yeah.

Max Borders: 56:05

And I don't want to see more of that centralization. And I'm sure you guys don't either. But that the issue with China, with uh their way of looking the CCP, their way of looking at the world, their fusion of capitalism and socialism into state capitalism or fascism, their imperial ambitions are, you know, they'll they're more driven by resources and making sure that they can have, you know, the Belt and Road Initiative is more about resources, but they still have aspirations to gobble up Taiwan, for example. And so it's like, okay, we're we're the main subsidizers of their vast military and and and its ambitions. Do we want to do that anymore? And does that overcome our sense of peace through gains and gains of from trade?

Mark McGrath: 56:54

Yeah. Well, Ponch and I are both veterans of guarding the sea lanes. I'm a charter member of the South China Sea Yacht Club deployed down in those areas that are that are hot around like Philippines and where there's where there's island claims and I was stationed in Okinawa, which is uh right, you know, right there smacking them in the middle of it. You know, I think there's there's when you when you say, you know, what do we do about China, I mean it's an extremely aggregate thing to think of China. I mean, I have to define China, I have to define, you know, Chinese there's there is the CCP. There's also the companies that are quote unquote private that are also run by the CCP. China's, I think, is the only place where you could be the CEO of a public company, but also a general of the military, right? So there's a lot of nuance. There's a lot of nuance around China. Hate to say the way we do, but I don't think they want to conquer. I I don't think they they want to make the United States of China on these shores. I don't think they they want to subjugate and and and and uh put settlers all over, you know, and and colonies. I don't I don't think they want to turn us into colonies per se. I think that China, at their word, when I look at things like unrestricted warfare, which is something that Franzo Singa, who is uh Boyd's scholar, talk about, you know, they are going to increase their power and their position through non-traditional means, lawfare, currency war, fentanyl, media, any number of areas. And we've talked about that a lot. We've we Ponch and I talk about that a lot. We've talked about that a lot with John Robb, Bill DeMarco, and others. I think that China, at some point, you do take them at their word, they want to trade with people, right? So Belt and Road Initiative, you know, they have they have, to my understanding, China actually has more icebreakers than the United States does. And they're creating uh another route uh in the Arctic Sea with uh with the Russians. Taiwan, they view Taiwan like we view Puerto Rico or Cuba. I mean, they think it's theirs, it's it's off their shore. They have a completely different perspective of Taiwan than we do, which if you go back and you study that of the nationalists versus the communists in the in the uh leading up to the Second World War and the in the you know and the war with Japan, there's a lot more nuance to that than just like the commies versus the Democrat, you know, the Democratic Republic. There's a lot more complexity on those things.

Max Borders: 59:28

And it was like the Red Army and the White Army, and the White Army went to Formosa. And that's sort of sort of short story that we all get, and this is like Shankai-shek was that the city was like, Yeah, Czech leader.

Mark McGrath: 59:41

Yep. Yeah. His wife is buried here, in here in New York, here in Westchester County.

Max Borders: 59:46

Wow, interesting.

Mark McGrath: 59:47

Because of the tensions. Like that there's a reason for that. So she was over here, she lived, but but not to get on that rabbit hole, but but if you read uh China Mirage by James Bradley that wrote the uh book Flags of Our Fathers and the one about the uh the raid on Aishima, which the only survivor was Vice President George Bush. I can't I think it's called Fly Boys. Yeah he was he was completely outcast from the book circuit after writing China Mirage, and the other one he wrote was the Imperial Cruise. And what he did, what he set himself on a uh mission to understand, well, why did my dad have to go to Iwo Jima in the first place? So he goes on this whole historical rabbit hole and he learns about the opium wars and he learns about the uh how most of the massive American families like the Delano's and others, uh, the Roosevelts and the Forbes and the Rock, you know, all these Rockefellers was oil, but but a lot of these other families were in what's called the China trade, which was basically selling opium into China, which was a threat under the punishment of death. But there were but there were two opium wars, you know, with the with the United Kingdom. And China believes they call that their their century of uh of great humiliation.

unknown: 1:00:58

Yeah.

Mark McGrath: 1:00:59

I both come from the naval services. I'm a Marine in in Ponch's Navy, but there was a thing called China Marines. Well, what were China Marines? China Marines were stationed and based in Shanghai. There there was also the Yangtze River Patrol. I mean, we we basically ran China. Like we we were intervening and controlling China up until the Second World War, and that's not really that long ago. So, like when we think of China and like their current form of what they are, that's all evolved from after the Second World War, accelerated by Nixon's opening China, and then I think it was Carter, where they recognized China as the permanent member of the UN and not the Republic of China, which we now know is Taiwan. There's there's so much nuance and complexity to that thing, it's really hard to just say China.

Max Borders: 1:01:44

No, no, and I I apologize for the the brief hypothesization of just saying China. There is a whole set of phenomena there that cause people unease. Yeah, you know, whether that is there there's there's individual or I guess you call them discrete problems that are that are connected to other surrounding problems and issues. But for example, I think we only cross only recently have come across some of the rare earth minerals that we need to manufacture chips, chipsets, guts, phones, things like that. And China really does have the market cornered on a lot of these things. And by China I mean the C C P. Yeah. Um that's unless you innovate your way out of the need for rare earth metals in in those sets, then you're gonna be at some sort of c technical disadvantage eventually. Uh, there's also the issue of the Export-led growth that China has has maintained, which is basically they qualify that though.

Mark McGrath: 1:03:00

And they would go in with commerce versus drones and special operations forces. So when they go into Afric African countries, they say, hey, we're going to build you. Yeah, we're going to build you ports and bridges and roads and railroads and da-da-da. And they're like, well, hold on. We're an Islamic theocracy, or hold on, we're a democracy, or hold on. And China's like, we don't give a shit because we just want to trade with you and have your cobalt. They they also lost a labor advantage, too, because some say that you know their demographic pyramid is a disaster. Some also say that their population numbers are dramatically overinflated and the manufacturing in China, it's actually cheaper now to go to Africa or South America. So even China's been doing a lot of like their outsourcing.

Max Borders: 1:03:42

Yeah.

Mark McGrath: 1:03:42

Yeah. Vietnam. I think too, like there's there's there's different points that you could point to. Like when we were kids, so we're back to being Gen X, do you remember like having like a matchbox car and it said like made in Macau? And you're like, holy shit, where's Macau? Well, Macau is like a as a Portuguese colony on mainland China, or like made in Hong Kong, like holy shit, made in Hong Kong. Well, what was Hong Kong as a British protectorate inside of China? Those things are gone, and then China got most favored nation status.

unknown: 1:04:10

Yeah.

Mark McGrath: 1:04:11

Everything that my children had growing up as kids, it's all from China, 100%.

Brian "Ponch" Rivera: 1:04:17

I think there's a solid connection back to the healthcare conversation, uh, and that has to go with complex adaptive systems. So you again going back to the threshold liminal space between overt and covert. Mark brought up several points with fentanyl. I don't think we talked about IP theft and things like that. So Cynic always starts with, you know, start with why, then the the how and the what. On the other way, when we do a debrief, you start with the what. What's actually happening, happening, what happened, start there. And that's how I believe the best way to do a debrief to look at what's going on and create that situational awareness is what's actually happening. We have a fentanyl crisis, IP theft. We have students in the U.S. that are, you know, from China. Is that right or wrong? I'm not saying it's right or wrong. I'm just saying that's what's happening.

Mark McGrath: 1:04:57

You know, so that's my grad school cohort, my grad school class was was uh at a Catholic school was more than half for a degree in economics, was more than half of us were from mainland China.

Brian "Ponch" Rivera: 1:05:09

Okay. Yeah. So then you get down in the how and you get down to the why. The why is is that unrestricted warfare. And I think that's what um, you know, that fifth generation warfare is happening. We are at war, and American people don't know that. We we are getting our asses kicked at the moment. The same problem in understanding what's going on with China is the same problem um with trying to understand what's going on in healthcare. It's it's a complex system, you know. We have to understand uh that complexity. And I think that's what you're doing a great job with, Max, in in your book, uh your latest book anyway, on the singularity. Uh, because you write about a lot of these things in there with uh with limital uh not I don't think you have limit limital warfare in there at all, but you do have emergence and again complex adaptive systems and things like that. So um yeah, guys, I'm a I'm a huge believer that it's an education problem here in the U.S. We just do not understand uh cultural. It's a cultural problem. Culture, too, yeah. Yeah. So it's orientation, right, Bruce?

Mark McGrath: 1:06:04

Yeah, I mean, because like we had our founding strategist brief today with Lieutenant Colonel Asad Khan, who's been a guest on our podcast, his book, Betrayal of Command, and the whole entire point was one of his big things was cultural. Like in America, we don't get the cultural perspectives of all these places that we intervene. Now, here's a guy, he hails, his family hails from the borderlands of uh Pakistan and Afghanistan, and he speaks all the languages. His uncles were like high-ranking military officers in Pakistan. He's telling them, ah, we can't do that, and here's why. It's because we just have this cultural disconnect because everything to us matters in like a 24-hour news cycle, or you know, what we think you know, we we we saw on TV.

Max Borders: 1:06:47

That is another that is another our conception of time really does lead to our eventual decline.

Mark McGrath: 1:06:57

Yeah.

Max Borders: 1:06:57

Tell us more, tell us more about that. Because we don't disagree. It's this it's the short-sightedness phenomenon. So many examples, but one example is there is a a slowness to an election cycle. So let's call it time distortions, because there's there are certain things that cause us to make rash decisions, decisions before, for example, the next election cycle. Or and when I say us, I mean the political class. I don't mean you and me, because obviously that we're not making these decisions. In representative government, they purport to do it on our behalf. When a president makes a certain kind of decision for foreign policy, Chinese person in the Chinese Communist Party, who's unless they screw up and are, you know, are perceived as traitors in some way, they might be lifers. Okay. And a lifer in the Chinese Communist Party thinks in terms of not two years, but twenty years and fifty years. There is something about a governance apparatus that is centralized, that at the very least has the ability to think through the long term in time. Now, there are there are problems with this for very Hayekian reasons that you and I, you guys and I would would appreciate, which is it's extremely difficult to plan anything over those timescales. The Soviets had five-year plans and they always came up short because they ran squarely into the socialist calculation problem, for example.

Mark McGrath: 1:08:35

Which is a price that's a misunderstanding of not having a when you don't have a price system.

Max Borders: 1:08:40

That's right. That's right. So we can go back to that. And certainly the Chinese, to the extent that they are using technocratic means, are going to run afoul of that, those kind of phenomena, whether it's a socialist calculation problem or just generalized problem of rationalistic planning through time.

Mark McGrath: 1:09:01

But you know, just to sum up just to sum up for our listeners, the socialist calculation debate was something that Ludwig von Mises talked about in saying that within socialism, why it would always fail is because there is no incentive-based pricing system. No one can act in their own accord in a marketplace. So that's why there's long lines at the DMV. And that's why, you know, there's uh get an MRI in Canada.

Max Borders: 1:09:24

Right. Yeah. Yep. And increasingly here, we're our our wait times are go are being distorted here too now. And that's starting to, you know, for the longest time we were expensive, but at least we were fast.

Mark McGrath: 1:09:37

Yeah.

Max Borders: 1:09:38

That's starting to That's going away. Anyway, I just had to throw that in there just so people could have the But in terms of governance and and you know, I will admit that uh to being what you might call an asymptotic anarchist, like I want to get closer and closer to a stateless society through time because I believe that that will mitigate or reduce the amount of violence in the world of one person against another and create a more and more collaborative state of affairs. But I'm under no illusions about how difficult that is and how other people just don't live in that idealistic universe. So I think of it as okay, not how do we go, not looking at Z and going, Z is wonderful, Z is paradise. We need to implement Z tomorrow. It's how do we go from A to B, then B to C, and so on. The thing about governance in countries that have what we might call benevolent dictatorships or even not so benevolent dictatorships, is that they can take a long view. With if you're if you're uh going to be out in three more years as a president Trump, whatever you have done can be pulled apart and they can refer to return to a status quo ante, or they can change everything up otherwise and implement a new state of affairs for the system. So it's not just that that these some of these other societies can think about a long game, it's that they can't expect us to play a long game with them because the because of the zigzag of politics in this country makes it so that we're never dependable, that we're not stable through time. They view us as instability, both in our as as inherently unstable, both in our domestic politics and in our international relations.

Brian "Ponch" Rivera: 1:11:37

There's nothing wrong with the it actually creates more mismatches for them to deal with.

Max Borders: 1:11:43

From our perspective, that might actually be, yeah, that you know, the element of surprise or whatever. Or it's it's just it's not even an element of surprise. It's just like you kind of always have to keep an eye on them because they're it's the crazy town, right? It doesn't figure into any kind of what is it called, game theoretical, game rational, game theoretical matrix. It's always like it just seems kind of random. You know, increasingly that's the case, especially as we're starting to understand what Trumpism is and what it means. And he even throws his curves from time to time in a sort of self-contradictory way. It's very different from all of the administrations that came before, which still had their own surprises, twists, and turns and so on. So I don't know. I I I have mixed feelings about this, as I'm sure you guys do. It's like in some sense it benefits us, in some sense it doesn't.

Mark McGrath: 1:12:37

Well, that's all isn't that always the case about any political program, is there's the there's the ones, the favored and the unfavored. I'm of the belief there's nothing new under the sun. I mean, uh you know, and I think that that's really one of the fatal flaws of America is we don't have a appreciation for history or context or philosophy. We don't teach logic anymore. You know, my oldest child was 22. My youngest child is 17, right? None of them were born they don't know what 9-11 is. You know, they know what 9-11 is, but they they didn't live through it. They don't they don't know what they don't know what an encyclopedia set is, other than they could Google it and look at look at something like nostalgic making making fun of it. The point is that their perspective as we advance in technology and in our politics or the way that they are, I just feel like you're right. I there is a massive distortion of how we view time. Whereas we look at even countries like China that's run by a you know a communist dictatorship, it's still an ancient culture that's preceded us by thousands and thousands of years that has a maybe like what Mises would call the regression theorem, right? We still think back to a gold standard even though there is no, then they still think back to those ancient, ancient things that have been around.

Max Borders: 1:13:51

Yeah, I think I think the way the CCP operates is still very much a species of Confucianism. And I don't I personally don't admire it very much, but I we've already forgotten where we came from as Jeffersonians. Makes me sick. Yeah. We have no identity anymore as Americans.

Brian "Ponch" Rivera: 1:14:13

It's just you get to pick your pronouns, right? Sorry. I just said you get to pick your pronoun, you can do whatever you want.

Max Borders: 1:14:21

Yeah, yeah, yeah.

Mark McGrath: 1:14:22

I do. I get to pick my pronouns. Woo-hoo. Remember remember this too, that a great many Americans didn't even side with the quote unquote rebellion when when that happened. And the a great many didn't agree with independence, a great many didn't agree with the Constitution. And I've always thought there were Tories. Yeah, there well, there were Tories, but then there were also anti-federalists, you know, there was Patrick Henry and George Mason and others.

Max Borders: 1:14:49

I am an anti-federalist.

Mark McGrath: 1:14:51

Well, I mean, when you read the Anti-Federalist papers, you would think that they had access to time travel and that they went back in time to tell ever to tell everybody what happened. You know, I I'd written an article back in May, May on Substack about the hundredth anniversary of uh Malcolm X's birth. Malcolm X is another one that like you would think that he had access to time travel because he he's pretty clear about what's going to happen, and sure as shit, it all happened. I also think, too, when we reduce people to memes, so Patrick Henry is reduced to, oh, give me, oh, the guy that said give me liberty and give me death, that's it. Read what he wrote. Read what Patrick Henry wrote. Go find Patrick Henry's papers. Holy shit. I mean, that guy, you would think that he was a radical.

Max Borders: 1:15:32

Yeah, that it but that he went to 2025 and w went back in time to tell everybody, hey, here's what's gonna happen if we I think the the most profound time travely one is uh Robert Yates, which was um Robert Yates was um Brutus in the uh in the Federalist papers. In the Federalist Papers, yeah. His pseudonym was Brutus. Yeah, I'm just I'm just reading this stuff going, my God. And and you know, in the meantime, they've got they're doing Hamilton stage shows in New York, and he's the devil.

Mark McGrath: 1:16:02

Yeah, they it's funny, isn't it funny how they have to rehab a guy they they keep doing all these years later to protect the reputation of a guy like Hamilton and to to not like like a like a John C. Calhoun, like they'll they'll take his name off of a college in Yale and they'll just just because he was a slave owner, he was a racist and leave it at that. But then like you read actually read his discourse on uh his political discourse, I think that's what people are upset about, not that the fact that he was racist or own slaves, which he was. I mean, he he was a slave owner and and and certainly uh had it had an opinion um that would not be you know commensurate with our own times. But when you when you see these people get uh when you see these thinkers get reduced, it does pique curiosity. Was like, what were they really saying? Like again, I'll just use Patrick Henry as an example. Or you know, John Robb talks a lot about Washington's farewell address, talks about that all the time. How far we've deviated from that, you know. Yeah, yeah, but then it was Washington owned slaves and he was a racist. Well, that's true. And the Washington's farewell address, if if not adhered to, I don't I don't see why anybody would be surprised at any of the outcomes.

Max Borders: 1:17:17

To me, it's it's sort of like you know, Martin Luther King was a socialist and he was running trains with all of these women and his buddies, and he's supposed to be a preacher. Yeah, people are sinners.

unknown: 1:17:30

Yep.

Max Borders: 1:17:30

But man did a lot of good things too. Let's look at look at all of it, and but let's not fail to point out the wonderful things. You know, Jen uh John F.

Mark McGrath: 1:17:41

Kennedy's another one of those because growing up, think about when we were kids as Gen Xers, he was shot by Lee Harvey Oswald. That's the end of it. And on the left, he's like this icon, and on the right, he's this womanizing skirt chaser that was a Hobbit Playboy, right? But who at least at least reduced taxes. But then when you start digging and you're like, holy shit, there's a lot more to John F. Kennedy that nobody even knew about. And I think really what like where I would bring all this to, because you know, we tell people all the time, and I I wrote an article about this called The Candle in the Silence. You know, the more I get into Boyd, McLuhan, Hayek, Mises, all these things, the more I realize that I want to be an observer versus a participant. I don't want to lose my observation status. I want to be able to look at these things and not get boxed into a tribe. I had one out the other week about like how we get oriented into red team versus blue team in politics, but but it's all it's all being like if you there was an AI rendering I did with it, but it's basically all the same corporate overlords pumping the same thing into both sides, just putting a different label on it. But I find that the more into it, the more I get that you become more apolitical, maybe, like not, not boxed into any one party because, like Boyd would say or McLuhan would say, and even Hayek, because Hayek, remember Hayek was a socialist until Mises showed him that the error of it. You gotta be able to let go and move on because we don't know. Knowledge is tacit and dispersed, and we're always learning, and things are always we're always uh are always changing. And there's what's real and aligned with reality, and then there's what's synthetic and oriented for you, such that it would put you into a box to get you to do something that you didn't otherwise want to do.

Max Borders: 1:19:26

This is this is a really interesting turn, if if you'll allow me to follow it, is you've opened the door to something interesting here.

Mark McGrath: 1:19:33

Hit me.

Max Borders: 1:19:34

The first is that you say, I want to be more of an observer. And Boyd, what Boyd does, I think when you have people who use an UTA kind of sensibility about the world on a continuous basis, they're going to be less tribal. But what's interesting is, and I I see you to the best of your ability doing this, when I mentioned China and the dynamics of China and its deep history and and so on, you went on, you went down the road of talking about its history and the perspective of the Chinese, their incentives, what their I mean, and it was really interesting. It might be to someone who thinks, you know, it's USA versus CCP, that kind of narrow thinking ends up making us less formidable in terms of under even if they turn out to be our enemy rather than a cooperator or or collaborator in certain respects. Knowing either way, you want to better understand them. So when you is it is it appropriate to in the interests of improving collective intelligence? And by collective intelligence, I mean um I mean it in both both a narrow and wide sense. In the narrow sense, it's it's uh it's what do I know and you know together that happen that happens to be more true, right? Uh than j just something I would know by myself. But that verisimilitude, that tendency towards truth is what we're going through from two different perspectives. I guess this though, this is a long-winded way of putting. Can you can you attempt to take on the perspective of another in a more empathic way? Say, even even though you're not literally orienting yourself in Uda fashion, a la Boyd, in some environment, can you can you use a Boyd sensibility to try to understand other people in other people?

Mark McGrath: 1:21:35

He would tell us that. I I think that he would tell us that. I think that he that's exactly the whole point of studying Boyd and Ouda is to be able to take someone else's perspective and understand it something and see something that they didn't that they didn't see and they weren't capable of seeing. So I think that following Boyd is exactly what would make someone have the desire to try to understand someone else's perspective just to see why they're making the decisions that they're making, how why they're sensing the uh why they're sensing the world the way that they're sensing, why they make the decisions they make, why they act the way they do, why they learn the way they do. That's that I think that that's the that's the charge, which by the way is also too why he never would put everything in writing. It was all briefing decks and oral culture because he could be wrong. He was afraid of being wrong, and a lot of the being wrong came from gathering other perspectives that he didn't have previously. I mean, what would you say, Ponch? I mean, I feel like that's the that's the that's sort of the imperative, one of the imperatives of the human aspects of Boyd um and McLuhan and others is that it's almost like a mandate for empathy and you know, doing to others what you would do unto yourself, you know, doing unto others as you would have done unto you.

Brian "Ponch" Rivera: 1:22:45

Yeah, so I just glanced over at a book here from Angus Fletcher, Primal Intelligence, and in it he writes about eat your enemy, right? So looking at how operators understand the their enemies understand your enemy. That's understand your your competition. So some Sunsu Sun Sun Tzu and Klauswitz in there. That's essential. So you have to take that perspective. It could be empathy, however you want to look at it. But one thing I did want to bring back us to before we uh depart here, make sure I bring the right one up, is uh this is from uh Anatomy of a Decline by Chuck Spinney, right? And in it it has two key points in the middle. I'll read them out. Changing, okay, for adaptation, individual groups need to change their internal structure, their orientation, if you will, to cope with the challenges and constraints of the environment. This is how you win, right? This is how you win. Trying to change the environment to meet the needs of your internal structure or your internal orientation, it's impossible, right? It's it's a good way to lose. Let me rephrase that. Um, going back to uh where we started earlier, when we bring up woke, and and I know a lot of people don't like the different connotations of woke, but the way I look at wokeism and and and being woke is it's the second one. Trying to change the environment to meet the needs of your internal structure or your orientation. You're trying to project something onto us that isn't quite actionable at the moment. It's not to say you shouldn't do that, it's just you should do it lightly with probes, not go full out. And there are many companies that went hard, hard, hard on this in the last four or five years to match their internal environment. It's really interesting. I like that. I'll send this to you. Moose has its own.

Mark McGrath: 1:24:17

I mean, this is, you know, one one area that we we've danced around, and it's something that I've studied a shit ton, like, and I have a lot of books on it, is about mass psychology, too. And that's another thing that we're all susceptible to. And mass psychology is why someone would say to somebody, you know, if you said, Max, if you said to me, I homeschool my children, I would say, Well, what are you going to do about socialization? And and the reason I would say that is because the mass psychology has massaged it into my orientation to reflexively say, when you say you homeschool your children, for me to think that that's weird and oh, you know, what do you do about what do you do about socialization? Mass psychology is what makes people buy houses in 2022 or 2020, thinking that they're going to be just the price just goes up. Mass psychology is tapped into all the time in your political programs. And it goes back to the reason why I choose the observer path over the over the participant path because of that. And I try to call that out as much as I can see it, that people get caught up in these, in these moments of mobs and mass movements and political programs. Now, when I was a child, my dad was stationed in West Germany, and we lived in Bavaria, and it was West Germany because there was no unified Germany at the time. And I remember we had a lady from Alberta who cleaned our house and babysat us. And my mom asked her one time, how in the hell could a daily mass goer, she went to mass every single day for Alberta, how is it that people here in Bavaria and this like Catholic of all places could be caught up in the Third Reich, you know, and Nazism and all that? And she says what she said, she's and she's long gone, but she said, Well, when we were kids, we had turnips. But then when Hitler came to power, we had oranges, you know, like, like, but like, because people were mesmerized by by mass movements, you know, like they, they, because they would think, well, there might be something happening, but I don't I don't want to talk about that, or I don't, I don't want to look about that. And and and these things are important to study because they flip your orientation. They they they have a direct, um, a direct orientation. I mean, recently Dick Cheney was buried, and all of a sudden George Bush, George W. Bush is being lionized. Well, I'm old enough to remember when the media, those same exact people, were calling George Bush Hitler. And George Bush was, remember? And they like George Bush was Hitler. He's the devil, he's destroying the country, he's invading countries. And then on January 20th, uh, 2009, when he gave up power, all those things that he was doing were all of a sudden okay. Why? Well, because Obama was and then for the people that like Bush, the same thing. Well, Obama's bad. He was doing this, doing that, then that. And it's just the same thing. But all of that comes from mass psychology, you know, from I think the chaining one is the funniest because the chain they thought he was Darth Vader.

Max Borders: 1:27:05

Like they thought he was like the absolute devil. And as soon as he came out saying that he couldn't stand Trump, all of a sudden he was he was back in the club. Just like John McCain, just like all yeah. It's yeah, but look, look, uh and and look, I'm not saying either.

Mark McGrath: 1:27:22

I'm just saying, yeah, we're not saying that. That's right. What I'm saying is that when you understand what Boyd, McLuhan, Mises, Hayek, Taylor Day, Chardin, what they're talking about, and then like the whole mass psychology library, that's Bernays and Gustave LeBon and uh Humphrey B. Neal and uh what's his name that wrote public opinion? Walter Lippmann. When you start to understand those things, you begin to look at again, these are gaining perspectives to your point, taking empathy and understanding. When you start to see those things, you start to realize what's actually going on, and it's likely not what you're reading in the news.

Max Borders: 1:27:57

Well, and this is maybe if you'll permit me to sort of land the plane here on my end. I know you guys have time to go ahead, so we got to wrap up, but um, you know, I had sort of mentioned to you at the beginning of the show that I have become more interested in how to pass the torch, wisdom's torch, to a younger generation, right? And I I'm sitting here talking to some really, really fascinating guys who are my age. And yet I want I want to start to get the kind of things that we're talking about into subsequent generations, right? So that we, you know, and it's not maybe doesn't need to be to the level of sophistication as, you know, Marshall McLuhan, John Boyd, and Friedrich Hayek. But it's it's there's some at least nuggets of wisdom and beginnings of heuristics for how to live better. And I think that starts with what's really troubled me about this generation of boys and girls, has been our having, or or at least this generation having permitted the removal of their internal locus of control. And what I mean by that is not just that they tell themselves the story that they don't have agency, it's that the world echoes that story.

unknown: 1:29:18

Right?

Mark McGrath: 1:29:18

Mass psychology. Yeah.

Max Borders: 1:29:20

Yeah. So that they're s more susceptible to mass psychology. And that's exactly why I'm bringing it up. So it's like, you know, it's like when you see everybody around you doing something stupid, ask yourself, can you take a moment to sit in the space a little bit and ask yourself whether you should be participating in that stupidity? Yeah. Or if some kind of Swiss neutrality is better, or even or even to be to work at odds against it, because if you don't, and you and that means sometimes create if if there's an egregore out there, right, that is amassing and to use the language of mass psychology, where there's some evil phenomenon that is that has captured the minds of millions or the masses, you've got to learn to first find your own center and then ask yourself how to how to bring bring the wisdom and your or your perspective and understanding and have that in sorry to say it in mass psychological terms, form a counterpower or counterblock to that. Because so the long and short of it is I'm becoming increasingly persuaded that we have to we have to engage in an intergenerational torch passing with particularly young men, because I I'm a man and I, you know, well, women have always been a mystery to me in some sense, but certainly young women are a deep mystery wrapped inside a riddle, wrapped inside an enigma. And so I don't want to presume to be able to do that, to do that, but I will say that the this next generation of young men, I think guys like us do can and do have something to say to them and that that they can benefit from and it not come across as whatever, Graybeard, right? And it's like if the message is empowering, like that restoration of your internal locus of control, which is which is polished and per and not perfected, but it is certainly always improved by practicing the Uda orientation, right?

Mark McGrath: 1:31:31

Yeah.

Max Borders: 1:31:32

Then then that they might actually come through this not as weak men who make bad times.

Mark McGrath: 1:31:39

Well, there's the fellowship of the ring. It was only a handful and like you know two little hobbits that made it through. There's certainly uh allegory for us to think about these patterns that again, I think they continue over history. I think, Max, I'm hoping, I'm sure Ponch agrees with me, this is the first of many installments of the Gen X, uh, the Gen X gathering of the minds.

Max Borders: 1:32:00

Yes, sir. Yes, indeed. And but I would love to have you guys, of course, on on my show as well. So we can we can continue to play ping pong back and forth and have a good old time.

Mark McGrath: 1:32:11

Absolutely. And we will certainly link to all your uh socials and uh substacks and things and get everybody over there. So for the sake of recording, Max, thanks for uh thanks for joining us, and we will see you again soon. Thanks for having me.