An Entrepreneur Takes on the Foreign Policy Blob | Robert Wright & David Sacks

Hi David.

Can't complain. Let me introduce us. I'm Robert Wright, publisher of the Nonzero newsletter, and this is the Nonzero podcast. You are David Sacks, co-host of a podcast of your own, the All-In Podcast, also a noted Silicon Valley entrepreneur and venture capitalist. You started Yammer, which did very well. You were part of the storied PayPal mafia back in the day along with people like Elon Musk and Peter Thiel. In fact, I think in the Times I recently saw you identified as still a close associate of Peter Thiel and Elon Musk. Now, one thing that I think distinguishes you from a lot of Silicon Valley figures is your interest in talking about foreign policy. I don't hear a lot of that from entrepreneurs and corporate people generally. And I suspect that your views distinguish you in some cases even from those few people in those communities who do speak about foreign policy. I'm thinking particularly about Ukraine. You have strongly felt views about Ukraine that you've expressed that I think it's safe to say are not entirely mainstream. Is that fair?

Okay, so I'm going to talk about that, and we may get into other things, Silicon Valley related things of various kinds. But first of all, why don't you elaborate a little on what your views on Ukraine are?

Well, as you might imagine, I agree with much of what you said. I know there's a lot of violent agreement here. Cognitive empathy, you're right, it is just perspective taking, a very simple concept in principle. The word cognitive is used to modify empathy just to distinguish it from the kind of 'feel your pain' empathy, because it's emphatically not meant to imply necessarily sympathizing with, say, Vladimir Putin, but just understanding his perspective, which in principle should make sense in any kind of game you're in. But it's actually kind of hard to do. In any event, there seems to be a fair amount of resistance to it, in part because people think you do want to empathize and feel their pain and apologize for their actions, and that's not necessarily implied at all. So I don't really see it as empathy per se; it's more about just understanding what they perceive as their vital interests so that you can engage in a realistic negotiation. I don't really care so much about their feelings, but I want to understand their point of view. And I think there were many people in the West who understood it prior to February 24th. Once the invasion happened, we all had to pretend like we didn't know about all the warnings that have been made about NATO expansion since the 1990s. I think there are three big lies about this whole Ukraine war. Number one is that it has nothing to do with NATO expansion. Michael McFaul put that in all caps: 'this war has nothing to do with NATO expansion.' That's lie number one. Lie number two is the idea that the U.S. supports a doctrine that any country is completely free to join whatever military alliance it wants to join. We do not believe in that doctrine, we've never espoused that doctrine, we do not practice that doctrine. And the third thing is that this war was not preventable, that there was nothing we could have done to prevent it. That goes back to the Putin madman theory that he just woke up on February 24th and went nuts, and there's nothing we could have done. I think all three of these things are manifestly untrue. If you spend any time looking at the subject and reading the history or contemporaneous media accounts, it is just obvious. I don't even think this is a close one. So it really brings up a deeper level to the whole Ukraine issue: one is the policy and how we got here, the other is the foreign policy establishment and the media coverage. If it's so easy to figure out that these are lies, why is it that we have this foreign policy establishment that's so deeply immersed in them and just cannot tell the truth about what's happening? But let me pause there and see what you want to drill into.

Well, I would say I'm not sure we could have realistically prevented it as of, say, mid-February, but I'm pretty sure we weren't trying very hard. In fact, people in the administration have said NATO was not on the table. The idea of actually guaranteeing no expansion of NATO into Ukraine was something we chose not to put on the table. I just think if you don't try that, you're not trying very hard. I kind of feel like the further back in time you go, the more confident I am that a wise American policy from that point on would have prevented the war. People were warning back in the '90s. 2008 is a big year when William Burns, now head of the CIA, who was an ambassador to Russia, sends an email to Condi Rice and a memo broadly titled 'Nyet means Nyet' about Ukraine. He made the point: it isn't just Putin, everyone in the Russian national security establishment considers Ukraine a red line.

Well, yes. Let me pause and say a couple things. First, as soon as you say NATO mattered, people come up with quotes of Putin's that seem to say something else mattered. A lot of things mattered. In my mind, the NATO issue isn't just an issue of national security from Russia's point of view, although I think it is that, and certainly we would not permit the equivalent in our neighborhood. But I think there's also a big issue of respect. From their point of view, ever since the '90s, we've been kind of treating them with contempt. There was a leaked conversation where the Russian ambassador used the word 'respect' three times asking why can't you give us any respect? Putin famously has a chip on his shoulder. You need to understand the peculiarities of the people you're dealing with. Any country cares about respect, any leader cares. Putin especially, being an autocrat, identifies with Russia closely. One more thing: one reason our views are not widely accepted is that a lot of this will be taken as excusing the invasion. I don't mean it that way. An invasion is a violation of international law. But if I can behave in two ways toward my neighbor, one that I know will lead him to break the law and one that won't, I'll go with the second. He's still the one who should go to jail. But this conflation of explaining why this happened with excusing Putin really inhibits honest reflection on American policy. And if we can't ever honestly reflect on our mistakes, the policy is never going to get any better.

Yeah, I think there were also domestic politics. Before the invasion, when we were getting the allies together and telling them how severe the sanctions were going to be, they were getting standing ovations from the foreign policy community. I remember thinking: sticks are valuable, but do we have an off-ramp? Are we offering him a way out that is likely to seem appealing? We never did. But Blinken kept getting standing ovations. Foreign policy is funny: most Americans don't care about it unless Americans are coming home in body bags. So the influence on policy comes from narrow interest lobbies and the blob, the talking heads on MSNBC and CNN. And I think all that was pushing Blinken in that direction.

And just one quick word about 2014. I generally am happy to call that a revolution, not a coup. It's definitely a non-democratic transfer of power that the U.S. seems to have been in favor of. I can accept that our support for it was in some ways well-intentioned. But again, it gets back to cognitive empathy: you always need to go through the process of understanding how it's going to look from the other side. Pretty much anybody in Putin's shoes would look at that and not interpret it charitably, but see it as an attempt to overthrow a government that was friendly to you. And we would look at it the same way. We have throughout our history greatly resisted any attempt by foreign powers to create client regimes in the Western hemisphere – that's the Monroe Doctrine. This is why lie number two is false: we do not believe any nation is free to join whatever military alliance they want. The Monroe Doctrine expressly prohibits nations in the Western hemisphere from joining any other military alliance. We've enforced that. In 1867, we ran Emperor Maximilian out of Mexico. In 1917, the Zimmermann Telegram caused outrage. In 1962, we were willing to risk thermonuclear war to prevent Cuba from joining a military alliance with the Soviet Union. So we certainly understand that when a nation joins a military alliance, it creates externalities. Yet when it comes to Ukraine, we adamantly refuse to see the Russian point of view that their security could be threatened by the U.S. putting soldiers, weapons, and bases directly on Ukrainian soil, on their border. And it's not like they didn't tell us. They've been jumping up and down telling us. I think we don't need to personalize the issue. Putin talks about the risk to their security of having American missile batteries directly on his border with the ability to strike Moscow within five minutes. That is the crux of his security concern. And he's been saying this for a long time. So we're creating a very dangerous situation. It's amazing to me that we cannot understand the Russian point of view. And it's not just Putin's point of view – per Bill Burns, the entire Russian elite understands the threat.

Right. One of the paradoxes is that the same people who insist that what we're doing is purely defensive and we have no offensive intentions – in the very next breath they're talking about regime change in Moscow. So how could he think that way? Even if we had never breathed a word about regime change, the security dilemma would dictate paranoia. But our policy elite has talked about regime change openly many times. The president in a closing flourish of a speech said Putin basically has to go. So after saying that, they ask why Putin is so paranoid about our intentions. Well, we're stating our intentions.

It's a good question. I think it's a hugely important issue in a bunch of ways. One is economic: I think this war is creating a huge overhang on the economy, and I'm not sure we're going to get out of the current economic mess without some successful resolution of this war. When the policy establishment says there is no compromise possible, then I don't know how you're going to get out of it. Even if I only cared about the economy as an investor, I would still have an interest in speaking out. But the other piece is that it's a very dangerous situation for American security. We're not talking as much about the risk of nuclear escalation right now because Russia is doing much better through conventional arms. But a couple of months ago we were talking about the real risk of nuclear escalation. The paradox is that to the extent the Russians can't protect what they see as their vital interests through conventional means, there is the additional risk they might escalate to a nuclear response. So we're kind of in a lose-lose situation. I'm not as concerned about nuclear escalation now as I was a couple of months ago, but it's still out there. If we dislodge the Russians from the Donbas through the $40 billion we just appropriated, then I think we could be back to that situation. The Ukrainians are not merely trying to get back to the February 2022 borders; they're trying to get back to the February 2014 borders. Crimea is theirs. If they were successful at that, the Russians would lose the home of their Black Sea fleet. Would they see that as an existential threat? I would think so. Those are the types of scenarios where you could see nuclear escalation. So I can't imagine a more important issue to speak out about. And I wouldn't speak out if I thought there were enough other people doing it. But it's amazing to me how there is this absolute consensus among the foreign policy establishment and major media. There's very little difference between MSNBC and Fox News on this issue, with the exception of Tucker Carlson. The media is pretty much singing from the same hymnal as the foreign policy establishment. So I do think it creates a need for people to speak out. One of the amazing things about this artificial consensus is that the track record of the people who have argued for this Ukraine policy is so bad. In the investment business, the most important thing is track record. What is the track record of the people pushing this Ukraine policy? They're about zero for seven in post-Cold War wars. Iraq, Libya, Syria – you don't think those worked out optimally? Exactly. Their track record is so bad. And then the people who got all these wars right, like John Mearsheimer, they're demonized. That's something I just can't understand. Mearsheimer was right about Iraq, Afghanistan, every single one of these conflicts. He was right about Ukraine back in 2014. So you would think if this guy was in the investment business, he'd be treated like Warren Buffett. But he's treated as some sort of pariah. This is what concerns me: the foreign policy elite is such a closed community of people who keep getting these decisions wrong. Even if Ukraine works out okay, I still think we have this problem of a foreign policy elite that keeps getting everything wrong.

No, I agree. And with Mearsheimer – leave aside the investor metaphor. He is a social scientist. One thing that almost never happens in the social sciences is that someone makes a testable prediction about the future and keeps getting it right. They say, 'This is too much, we're going to ostracize you.' That's the thing I look at. When I see somebody making predictions, that's the value of a theory: whether it's testable. His theory keeps getting tested and proven correct. So why isn't it more widely adopted? The reasons are some combination of ideological or special interests. The policy establishment likes having this full employment program of having clients all over the world. That's Steve Walt's theory. So the thinking is very entrenched, and that's as concerning to me as what's happening in Ukraine.

Not really on foreign policy. I think I'm making some progress through the All-In pod, but it's a variety show so I don't get to go into the issue with nearly as much depth. Before the war started, I was saying we should take NATO expansion off the table to avert war. Based on comments, people are getting exposed to ideas they can't get any other way. But by and large, are my views widely shared in Silicon Valley? No. And I think it's because of the dynamic we're talking about: unless you make an effort to do your homework and understand an alternate point of view, or you're familiar with the IR theory of realism, or Noam Chomsky, or the paleo-conservative strain, you're just going to get your information from the mainstream media. And there's not much difference between Republicans and Democrats on this issue.

Capitalists care about making money. Not many were making money in Russia or Ukraine. It's not like China. On China, you'll hear more dovish arguments because there's business interest. But on Ukraine, I think the reason folks in Silicon Valley have this view is because they think the history of the conflict began on February 24th. They buy into the narrative that Putin woke up and went nuts. They don't know the pre-history. Most people in Silicon Valley can admit that U.S. interventions in the Middle East were misguided, but in this context they see Russia as the foreign invader against Ukrainian nationalism. There is truth to that. It begins and ends there for most people. They don't understand the complexity of how we could have avoided it. I don't use Mearsheimer's language of 'who caused this' – I think it's loaded. I just say this war was predictable, preventable, easily preventable. I try not to say it's our fault because people can't see past the fact that Putin ordered the invasion. It's his fault for violating international law. But we made mistakes that made invasion more likely.

The obtuseness of our side is striking. If you watch the video of that speech, McCain and Lieberman were sitting in the front row, jiving each other and laughing as Putin laid out his arguments. Like, what a clown. But he has nuclear weapons, so you have to take this seriously. It was not diplomatic. I think it was just careless. And then in 2008, tacking on the Bucharest declaration – even supporters of bringing Ukraine into NATO, like Niall Ferguson, said it was a foolish mistake because we declared our intent but didn't actually do anything, making them sitting ducks. Even Merkel said at that point that Putin would regard it as a declaration of war. The Germans and French were against it, but George W. Bush went ahead anyway.

In Silicon Valley, the beginning and end of the story with Ukraine is that the Russians invaded. There's a crusader mentality, but only towards establishment-approved things. I don't hear much concern about the consequences of a cold war with both Russia and China. Realists have pointed out that we're driving the Russians into China's arms, which is foolish. But I don't hear that argument in Silicon Valley. On China, you'll hear more dovish arguments because of business interests. On transnational problems, it's mostly just climate change. Arms control or cyberwar treaties? Not really.

There's a little bit of an anti-war left, but it's identified with either the hard left or Buchananite nationalism or some libertarian conservatives. In your experience, are views like yours associated with one of those traditions?

Have you run into accusations of being a Putin sympathizer or apologist?

You've been vocal about cancel culture and de-platforming in domestic politics. Have you run into it in foreign policy?

I recall a case where I had Aaron Maté on my podcast, and Quillette, the unofficial magazine of the IDW, published a piece taking me to task for having Max Blumenthal on. So there's more going on than people think. Hardcore anti-war voices on the left run into trouble.

There was a case of foreign policy de-platforming in Nicaragua. Facebook kicked off pro-Sandinista voices, then they were kicked off Twitter too. That kind of thing doesn't get nearly as much attention.

You've spoken favorably about people on the left and right on Ukraine. What is your own ideological orientation? You're definitely not far left.

On Ukraine, people agree with you from both the right and left. So what is the big policy disagreement between you and the mainstream regarding what we should do now to end the war?

I think that's right. We end up with a much worse deal. The eastern part of the country gets severed, we'll have a frozen conflict. Under the Minsk accords, those territories would have remained part of Ukraine with local autonomy. Now the whole country is destroyed. It's a much worse outcome for everyone. And I think it's going to tank Biden's presidency. Inflation didn't start with Ukraine, but the war exacerbated energy and food inflation. The repercussions are still happening and will get worse. Biden made a decision early on: he asked his cabinet if we should negotiate, and every member told him what he wanted to hear. That was it. Blinken made dogmatic statements. I don't think Biden realized this would tank his presidency. There was no grand strategy. If your goal was to be tough on Russia, you'd want to maximize domestic energy production and not alienate the Saudis. But they did the opposite. There was no coherence.

I don't know if I'm an enthusiast, but it's something I have to know about. I invested early. Crypto is not one thing. Bitcoin is an ambitious attempt to create non-fiat money backed by math. The beauty is it can't be debased. Then you have Ethereum and smart contract platforms. We're still figuring out the use cases. There's been a lot of speculation, and the bubble has deflated. I'm waiting to see real-world applications. I was quite enthusiastic about Bitcoin early in the 2010s, but in the last few years I've been concerned that the price action has been decoupled from progress in the space. So I haven't been investing much.

I may take advantage of that. Meanwhile, thanks for taking the time. People can find you on the All-In Podcast. What's your Twitter handle?

Maybe I should check it out. Thank you. We'll keep working on the blob and see if we can make any progress. Maybe check in down the road. Thanks a lot.