This Historian Says We're Living in the Best Era Ever, with Joseph Moore

Paula Pant (0:00)

Okay, pop quiz. We all know stocks for the long run, right? Stocks beat bonds over the long run. How long has that actually been true?

Is the answer A, always?

Is the answer B, for hundreds of years?

Or is the answer C, that's only been true since 1945?

In fact, throughout the 1800s, bonds beat stocks, and the two ran roughly even until World War II. Today, we're going to learn some surprising economic history with historian Joseph Moore. And we're going to draw out some lessons we can learn from history, notably that the stock market doesn't owe anyone a return. There is no contractual obligation for the stock market to keep delivering what it has delivered since 1945 We talk about why the economy looks great and everyone feels terrible. The chattering class gets paid to tell you that it's bad because negativity sells. We talk about lessons from history and how that applies to AI, like lessons from previous tech revolutions, because historically in a tech revolution, the money is made by working in it, not investing in it. So we talk about canal investors in the early 1800s versus the people who learned how to dig. We talk about Atari and Commodore and Lotus. We talk more broadly about crowding. When everybody piles into an assumption, they often forget that it only worked because everyone hadn't. We talk about how nearly every strategy we follow today was invented in this five-year window from 1912 to 1917, when America went from a century of zero inflation to prices doubling in five years. Gold bugs, real estate, even the first ever fire book, which was published in 1919 All of that showed up as a panic response to inflation. By the way, that's why bonds did so well in the 1800s. It was a zero inflation century and sometimes a deflationary century. So by the end of this episode, you're going to have a much stronger understanding of money, of economics, of the markets, placed into historical context so you can have some perspective on where we came from and where we're going. Welcome to the Afford Anything podcast, the show that knows you can afford anything, not everything. The show covers five pillars, financial psychology, increasing your income, investing, real estate and entrepreneurship, acronym Double-I-Fire. I'm your host, Paula Pant. I trained in economic reporting at Columbia. Today's guest, Joseph Moore, has a PhD in American history from the University of North Carolina at Greensboro and is the author of the best-selling book, How to Get Rich in American History. He became financially independent in his mid-40s. In this upcoming conversation, he shares lessons from history on how to become wealthy in the United States. Here he is, Joseph Moore.

Hi, Joseph.

Joseph Moore (2:48)

Hey, Paul. It's great to be here.

Paula Pant (2:49)

Thank you for joining us.

Joseph Moore (2:50)

Are you kidding? I love this show.

Paula Pant (2:52)

Oh, thank you. Well, I'm honored to hear that because you are a crypto billionaire.

Joseph Moore (2:57)

You know, as what is in this era.

Paula Pant (2:59)

Actually, that is meaningless and does not represent your net worth, your real net worth in any way at all. And also net worth is meaningless, but we'll get to that in a moment. Tell us about how you are a crypto billionaire.

Joseph Moore (3:11)

When I started researching, like the history of what people were told to do with their money, my expectation was everything we're told is wise and good now would probably have been wise and good then. And I was wrong. And what I found was like in every era, what made sense then wouldn't make sense now, and what makes sense now wouldn't make sense then.

One of the things that is so different today versus the past is what money is.

We think that crypto is the future of money. Like this is the dream we've been sold. And it looks very much like the past, actually. There were over 10,000 separate self-issued currencies in America at the dawn of the Civil War. 10,000. And they could be issued by anyone. The only entity that wasn't issuing money was the US federal government. There was no US dollar in that sense that we think of today. Banks could issue them, companies could issue them, people could issue them. My favorite example of this is a runaway slave named William Wells Brown. He runs away from slavery in Kentucky. He gets as far as Michigan. He gets stuck. He has no money. He has no friends.

A local landlord takes mercy on him and says, I will let you rent cheaply this space and have a barber shop to get yourself on your feet. Fabulous idea. Three problems. Number one, he has never cut hair in his life. Number two, he does not own scissors. And number three, no one in town can pay him. He solves the first two. He doesn't tell anyone he can't do this. In fact, he paints a big sign that says, fashionable hairdresser from New York, a city he's never been to.