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H.B.R. presents. Hi I'm Azee Vassar and you are listening to Exponential View. It is a podcast where I speak with some brilliant minds who are thinking about the future.

Now today I'm chatting with Cesar Hidalgo, he's a physicist and an entrepreneur and frankly he's a polymath. I've been a fan of his work for a number of years and in particular his application of complexity theory to help us understand how economies grow. It included his fantastic thought

experiments of smashing a multi-million-dollar sports car into pieces. Today,

Satan and I talk about those ideas as well as the trust problems in the

mafia why certain cities get richer and more

innovative than others and what you can buy in the electronics market of Shenzhen.

We also spend a good amount of time talking about his new work which explores

how humans judge machines.

Saizar this is going to be a fun conversation.

Thank you for taking the time.

Oh, it's my pleasure.

Now I want to start with the work that first draw you to my attention which was your work as a physicist that helped us get a clearer thinking about economics and specifically

around the question of why economies grow.

I started working on that late in the 2000s and basically it was at a time in which there

was an interesting combination of things. On the one hand we had more data than we ever had before. And on the other hand, you know, the theories that people had used to explain economic growth tended to focus on single factors. So people would talk about human capital, people would talk about institutions.

In the past people have talked about capital accumulation, but one of the things that was coming into focus is that at the end of the day

it's not about one thing or the other but it's about all of the above. The reason why

some countries succeed and other countries fail is not a single there's no magic bullet, but it's all of the

above. And with the new data that we had and with the techniques from network science that I was

...