Transcript:

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:37

Well, Alex, how are you doing this afternoon?

Unknown Speaker 0:39

I'm doing great. How you doing? I'm

Will Jarvis 0:40

doing great. Thank you so much for joining us tonight today. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Alex 0:49

Yeah. Well, right now I teach at the University of Colorado Boulder in a program called the herps program for engineering, ethics and society, basically teaching humanities to engineers. The person who endowed our program deemed them to inhumane or inhuman one or the other. And, you know, prior to that I was sort of in academic wasteland popping from job to job, you know, trying to find something more secure. I've been here for about three years. I did my graduate work at Tulane University. For that I was at St. John's College, I did an MA there and I was at the University of Connecticut and before that I did a BA in Political Science. My PhD is in philosophy, but I work on Plato and the history of political philosophy. A lot of my work is concentrated on Plato in relation to pre Socratic philosophy and poetry I've written on Homer, Hesiod, Heraclitus, pro amenities. And I've wrote a book on Plato's prayer amenities. And I've got a book coming out soon on Plato's trilogy on the question of science or knowledge, the Sophists statesman and the Titas. And, but I've been sort of branching out a bit and doing some some other things, more modern things a little bit lately, just as my interests have changed.

Will Jarvis 2:11

Got it. Got it. I want to talk a little bit first about, you know, progress and knowledge of the future, and how conceptions of that have changed over time. Can you talk a little bit about how Plato viewed, you know, the concept of the future and knowledge and how that might be surprised in the kind of modern day people?

Speaker 3 2:28

Yeah, so it's, it's, we tend to think of science as progressive, right. And, and it's easy to see that as a distinctively modern concept. But there is a kind of progressivism in Plato, but it's not social or political. And the reason for that is that the sort of social and political sphere of the political community is ultimately governed by an wisdom, right or irrationality, to say nothing of necessity, it putting impositions on the ability of a community to deliberate well about things, right. So there's this sort of intractable fundamental opposition to Good thinking, right? To put it most simply, nevertheless, there is a kind of progress that an individual can undergo, provided they have the right circumstances, they can sit and think and learn more and become wiser, hopefully, and, and make some progress in wisdom. The distinctively modern notion of progress, which is what we typically mean by progress is social or political, as well as scientific project is what we know as a community. That's a distinctively modern idea. As far as a natural science, it certainly has a root in bacon, and Descartes. I think, in a way it as a political matter, it goes back to Machiavelli, Machiavelli often looks like a guy who's just trying to revive sort of Roman excellence or Roman virtue, but it's contrived, right? It's through your own sort of social engineering right. Now, just to put it that way, I think you automatically have a kind of bias against Plato and the ancients, right? Because well, we have progress, haven't we, right, we're largely more peaceful, we know quite a bit more, we live longer. So that seems to be a good case against him. On the one hand, on the other hand, it's not clear that the average individual knows more, right? The average individual has more sophisticated opinions and gives more sophisticated explanations, even when they don't really know what they're talking about, right? Think of the way that evolution for example, or my evolution or whatever, it's used in a very sort of haphazard and it's often used as an exponent explanatory tool, without going through the scientific method, right. And there's millions of examples of these. So it's not clear that the average individual is any smarter though. They certainly have the trappings of intelligence and they feel very good about themselves. Yeah. contest regard. I think the the the area in which we're certainly at a disadvantage is that we're often unable or unaware of how to deal with those problems, right? So we live in an era now of fake news, right? And an era of of, you know, pseudoscience, right or or, you know, the overreach of scientists, right trying to, to sort of lay claim to greater and greater authority. I don't think I think because we're so used to thinking of science in an empirical manner and progressive manner. And things just keep getting better and better and better. We're not well prepared to think about the obstacles, right to a scientific society, and possibly the deepest thinker on these obstacles are these ancients who were not inclined to make science a sort of social progress, social project of progressive science, who rather inclined to a kind of traditionalism or conservatism in the laws, right? Be careful about changing the laws, if people get too used to this, right, then everything will be out, right, you need to have a certain reverence and habituation and you have to be accustomed to it. And so the ancients, if they did view science as progressive, it was on the individual level, right. And they thought very deeply about this, as I think we'll get into a little later, but that would be the primary distinction between them as far as the concept of progress is concerned. And I think, as should already be aware, it should already be evident. I'm very much biased towards played on these on these grounds, right, I think he's well, more aware of, of the problem, our problems, our political and social problems, than any modern thinker, really, was precisely because they were so concerned with founding this world, not with criticizing the I'm talking about early modern thinkers here. So I,

Will Jarvis 6:58

I'm curious, is it something where, you know, as we build up knowledge over time, like just the pile of things, you can no just get so big, that if you have to start deferring to experts at some point, whereas if you're in the time of Plato, you know, calculus has not been invented. So there's no way like, you know, a high school student at the time, could, you know, get to this point where they could, you know, do differential equations and all these different things. Does that make sense?

Speaker 3 7:25

Yeah, I mean, we have a kind of a luxury today, I mean, we, you can subsidize the freedom needed. I mean, almost everybody goes to college, whether through loans or their parents, or they go to a, you know, a free, you know, community college or something like that. They, they have a kind of subsidize leisure, you know, the ancients were very clear about this, right? You need to have leisure, that's the first goal in life. And that means getting out of necessity. And then the question is, what do you do with your leisure, and the highest end of leisure is, is to learn, right? And obviously, you're living in a very, you know, archaic time, by which I mean, not, you know, old, right, it's old, and there's slavery, and there's all sorts of constraints, we don't have the benefits, you know, the freedom that you can have, so you can go and you can be born dirt poor, get into college, get a bunch of student loans, you know, major in, in philosophy and spend those four years go on to grad school and, and accrue even more debt. And then you can, you know, after 15 years of this, or whatever, you can go out and not get a job, and then then you gotta pay, you know, then then you're gonna get unless, you know, you know, there's sort of student loan forgiveness, but you're basically screwed at that point. But that was not even an option before, you know, speaking personally. You know, in grad school, I knew there was always a possibility. And for many years, it looked like an inevitability, right? Not getting a job. And, but still, you have those years, you have that time. So there's, there's certain sort of, you didn't have the time, but I think it goes more fundamental than that, right, which is that there is in the world, in nature itself, if you want to put it in the strongest possible terms. Nature itself resists this kind of this kind of activity, right? Necessity gets in the way, not just with death, but you got to pay the bills, right? You got to you got to somehow find a way and if you're rich, great if you don't need much, also great, right, but if you, you know, need certain comforts, and you also you're going to have to work for a living, you're going to have to spend your time doing that right. Now, the modern response to this was like, You think that's nature? Now, I'm going to overcome this, right? And that's where science and technology has been remarkably successful. They've taken care of a lot of these creature comforts and automation and machines and all sorts of of obstacles are out of the way and we can to a greater degree, afford that kind of freedom, right? And when you look at something like look at what Marx is arguing, and you know, he's he's showing you that if you do this right you could, you could actually have all your necessities taken care of, and live whatever life you want, you should have been a bit more pushy should be a philosopher all the time, maybe. But there is that this is to say nothing of the fact that for Plato, for many ancient and medieval thinkers, it's not even clear that every person is fit for this kind of life, right, which is yet another natural obstacle, not just the fact that society's in the way, but also maybe you're not well suited for it. Right. That's another sort of consideration that the moderns who are more inclined to view all human beings on much more equal terms or are going to push against right. Makes a lot of sense. I'm not sure that answers your question. But there's some thoughts.

Unknown Speaker 10:41

Absolutely. Russ, did you want to jump in there?

Russ Greene 10:44

Yeah. I was just thinking about what Alex said in terms of how the modern individual might not know much more. And I think in part that you could break that down into two ways. What first would be the modern citizen, in many ways, is not expected to understand science, but simply to follow it. Right? That, you know, you're told that if you're not a scientific expert, you aren't even supposed to, quote unquote, do your own research, right, you're supposed to pretty much just take it at face value, what they're telling you. And that goes, even to the point that even if you're a scientist in one field, people will tell you stay in your lane, like you shouldn't be taking that knowledge to another that statistical or technical knowledge to another field, and a pining on that, right. So they'll police the borders there. But then even if you take it to the point of you know, okay, we're talking about scientists within a single field, the progress of modern science depends to a large extent on faith, essentially, faith that the work of other people in your field is valid, that they haven't just made it up. But, you know, now we're starting to learn, you know, with the replication crisis and, and scientific misconduct, that, you know, oftentimes that faith is not warranted. So, you know, I, while it's certainly true, therefore, that, you know, science has enabled us to live longer lives, and certainly richer lives. You know, it's a very interesting point that when it comes to maybe the progress of human knowledge on an individual level, we're actually not doing very well, as might be immediately obvious, from perusing social media.

Speaker 3 12:41

I mean, absolutely. I mean, there's a number of things I just want to jump on, right there. And I mean, well, one, the faith thing is obviously an issue. Right? But the the biggest faith, right, is the faith that, that whatever it is we develop is going to be good. Right? And that's, that's highly questionable. I mean, especially now, you know, maybe, you know, a generation or so ago, when, like, iPhones were coming out, like, you know, 10 years ago, 15 years ago, people were just wow, this is amazing. And now you look at it, and all that you hear about is is addiction to technology, right? And social media is it was supposed to be this great democratic thing. It was a little too democratic, it turns out and and it's gotten, you know, turned into a cesspool, right. This is the this is where I think the real faith comes out. And it's, it's, it's really kind of shocking when you really think about it, right? When you look at a thinker like Hobbes, for example, right? And Locke, they're saying, Look, Steve nature was such that you wanted to leave it, right? You wanted to make your future better. And so it's to a certain extent, human life and human industry is devoted to constantly improving technologically and then financial, and so on and so forth. And now, what's the ideal? What's the end goal? If you're thinking in terms of progress, the end goal has to be unknowable, right? If you can know the end goal, right, if you could have that, you just have some sort of absolute standard, and we can, you know, talk about certain immediate goals, right? Like, oh, it'd be nice if we could, you know, be less reliant on fossil fuels for XYZ reason or whatever it is, but you have no idea whether what that's going to bring to you right, if science can be finishable, right? If science is always progressing, then you you never have that kind of absolute certainty, right, resting at the end. Now, when you really wrap your head around that faith, right, that that scientific progress will lead to greater happiness. That's really shocking. And it's it's really, I mean, you're you're essentially saying you're going blind, right into a world in which you'll be increasingly more reliant on technologies and uncertain on uncertain you know, systems that Do you have no idea if that could be good? Right? So one example I like to use is I think it was just last winter, there was that cold snap that went through Texas, right? And the power grid went down. And most new houses don't have fireplaces anymore. So what would you have done in Texas? If suddenly the temperature dropped like that? You'd be like, hey, it's getting pretty cool. Let's get some firewood, put on your jacket, oh, we're running out of firewood, go get some more. What happens when the heating system goes down? Right? I mean, old people die, right? You, you're, you're completely because you're dependent on that. So you lose in self reliance and virtue, but you also become much, much more susceptible. Right. And so there's, there's quite a trade off here, right? The world in which you live with nature as only somewhat beneficent, right, and somewhat antagonistic, and you just kind of live knowing that and you prepare for those contingencies, versus the world in which you fight, a sort of inimical nature. And therefore you develop these systems that you can rely on. And then they shut down and you have nothing, right, you lack, you have no sort of sort of anything to rely on. A great example of this is from Plato's law case, the beginning of the dialogue. These fathers go to these generals law case and Nikias. And they say, Hey, we saw this guy who's got this newfangled weapon, this new technological weapon, right. And, and it's great. He did this display, we're wondering, would this be good to make our sons courageous because our fathers were courageous, and we're not. And we want to make sure our sons are better than us. And we don't screw up like our parents did. And what happens lacaze tells us so he's like, Yeah, I saw that guy in war. And what happened is, is he's doing his display, the ship went by his crazy, you know, barbed weapon got stuck in the netting of the ship, and he was pulling him and he wouldn't let go. He kept holding on because he knew if he lost this, he'd be screwed, ready to have nothing. He didn't know how to fight as a man as a naked man to man. Right, which is what fighting ultimately ends up. But he was relying on that that sort of technology. Right. And that, that that's in a way, the position we're in right now. Right, which is, I don't know how to farm. Do you know how to farm? Well, Ross? No, I mean, I don't know how to farm if everything goes to hell. I mean, I've thought about this, I'm gonna have to go raid some of the corn fields, cannibalism is an option. I mean, there's not much you can do. Right? And that's because we've convinced ourselves it's better to rely on those systems specialized scientifically, that's a massive faith, and what have you given up for that faith and for that comfort, you've given up on your own individual excellence, your own individual self reliance, right. And that's, that's a, that's only going to get worse, it's only going to get worse, because all we do is keep making it more sophisticated, less comprehensible by the individual, and making us turning us into more, you know, pasty, pale in it, unable to do anything, because everything has been sort of outsourced to technology.

Will Jarvis 18:02

Isn't, it almost sounds to me, though, at some level, what you're talking about is a failure of progress in that since the 1970s, you know, like this, this slow decay of state capacity of the ability of us as a society to do things and build things, well, has created these conditions where suddenly we have to worry about these things. Like it's something it almost seems like, you know, the state of a world where Texas can't keep the power on it's not the same government that built the map, you know, the Manhattan Project and the Apollo program at some level. So, I don't know if he talked about the tension a little bit, it almost seems to me like part of the problem is, is because technological progress has slowed at some level outside of these narrow boxes, like the iPhone and things you mentioned earlier. That does force us to it's some level of prayer for a world that makes us go backwards makes us have to know how to be self sustaining, and, you know, farm ourselves and things like that.

Speaker 3 18:58

I mean, the big shift in this I would go a little earlier is really World War One, right? It's, it's a war that was prepared for as though it were like one of these old fashioned wars, and it was just like, a meat grinder of just bombs and shelling and, and gas. I mean, it's, it's frightening when you read this stuff. And it's, you know, I mean, I would even say, you know, great the Manhattan Project, were we were all sort of, you know, that it was, you know, or NASA or early NASA, right, as another example, people that, you know, this is moments of ingenuity and relay, yeah. But, you know, there's a certain there's a certain psychological tick that wants to go that makes a person want to go to Mars, right. You know, there's a certain you know, reluctance to put your own citizens lives online, your own children's lives online that makes you want a nuclear weapon or drones right. Um, this all speaks to a desire to escape these unnecessary constraints. And so, I mean, when you're talking about progress, scientific progress, it's not enough to just progress scientifically and to know more to be capable of more, you also have to know how to use it well, right. And in addition, it's not clear that that that mindset is altogether healthy, right? As I've portrayed it, going back to Hobbes and Locke, right, this is a desire to escape the natural world. Is that is that as a fundamental human drive a healthy drive, like to feel utterly not at home in the world so that you try to escape it? I mean, there's a reason that this stuff started in Christian Europe, right? It's a kind of desire, you read bacon, right? It's a desire for heaven on earth, right? That that's a very otherworldly escapist desire, except the Promised Land is, you know, or the, you know, habit is not to be found in the afterlife, but in this world in the future in progress, right. So, I mean, there's not much you can do about this, you can't like get rid of this project. And that would be to be insensitive to the real benefits it's brought. But it doesn't mean that it's, it's a constant struggle with every generation, to remind oneself, that this is not a fully human life, right? This is not a fully, you know, happy flourishing human life, right. But it requires attending to certain other parts of your soul than the one that wants life to be easier, more comfortable longer, and all that right, that wants consequences, and in sort of real, strong, higher level goals than these low level common goals.

Russ Greene 21:41

That's an interesting, that's an interesting point, you just made that, you know, even though we must acknowledge the benefits of modernity, you know, we should remain aware that it's somehow not a real human life. So I want to, I want to ask you some questions about that, because, you know, I could see an argument from the other side that basically, you know, this is the culmination of the most human things, right? We reach modernity, through, you know, this desire to conquer nature to use and develop tools, right, so the, the economic side of man, and then also through, you know, the, the military and political side of, you know, competition between states, forcing us to develop better weapons and new forms political organization. So, in some ways, this is the culmination or the fulfillment of human nature. And even as you know, we see new technologies like social media, it's not like we're learning new things about, about humans that we didn't know, before, you know, like that they, you know, they like being cruel to each other, for example, like, we already knew that, right. So in some ways, this is like the most human possible time or the most consistent possible time with human nature.

Speaker 3 23:01

Yeah, I mean, maybe one way of putting what you're saying is, is that, you know, there's there's two ways to view the modern turn, right? Was it the sort of human being finally coming into their own right? Was man finally coming into his own? Or was it rather a sort of lowering? And this is a difficult thing? Because, right, this incredible reliance on your own powers is a massive centering of man at the center of the world, right, and nature as a kind of obstacle. And, and, and moving God out of the out of out to the periphery? If not, you know, giving him the put all together, right, in in terms of your specific premises of the project. And that's, this is a difficult question to forge. I mean, I'm inclined to think that while it did center, the human being right, it completely erased any question about whether there are any sort of superhuman standards, right, you know, in throwing out God and making man the center, it also throws out nature, right. And this is the difficulty, right? So, this is so you know, you have as part of the air of the ancient tradition is the medieval tradition, right, which is deeply bound up with religion, and, you know, the, you know, the rule of philosophers and Plato gives way to the rule of priests if the medieval era, and this is, in a way a problem, right? So, that's one way to sort of solve this question. And when you go back to the ancients, you see that they knew what, you know, science and technology could do there all sorts of allusions to this and Plato and Aristotle, but they were still reluctant about it. And they saw that that there are there's nature provides us with an array of human beings or at least different ends or goals, and that there's this kind of heterogeneity in these ends, and we need to be sensitive to these in political life. Right. One of the ways to think about this is in terms of Aristotle's ethics, the three peaks to virtue of Aristotle's ethics what is justice, which is sort of equally accessible to all human beings. Another is greatness of soul or magnanimity, which is this sort of Crown of the virtues, right? It takes, you've got everything, if you've got that you got courage, you've got, you know, this idea. And then there's the intellectual virtues, which are both practical and theoretical. And so you might have a knowing statesman as one ideal, and then a philosopher, you know, complete philosopher, somebody who like theories, but really, you know, think about somebody like Socrates there. And one way to think about what modernity did was, less so in Machiavelli, but increasingly, when you look at people like Hobbes and Locke, is to take those two higher, higher goals and throw them out the window, right greatness of soul and theoretical virtue, and focus on human equality and unmaking human beings, you know, all satisfied in the ways in which we are equal the necessities and, and one that comfort. And if we could make politics do that, it would be far more easy. One way to think about it is in terms of a kind of reductionist physics, right? If you can reduce everything to atoms, right, then you've got something really easy to work with, right, as opposed to looking at a tree, and then looking at a fox and saying, I don't know what I mean, these are just different things, right? If you can reduce them, same thing. And then you're working with genetics and stuff, you've got something to work with, right? Politically, they did the same thing. And, again, remarkably powerful, right, you can build whole systems of government that are, you know, that work here that were there that that are remarkably sort of adaptable to different times in places, but deeply unsatisfying. That's that's the difficulty is you got rid of the high, and you made it work for a lot of people. And you made people sort of content are complacent at best, but maybe also really unsatisfied. And this is, I think, a real problem. When you look at people looking to social media to vent and you look at people looking, picking a fight somewhere, or, you know, they're really struggling trying to find within this world that provides so much for them, the thing that it doesn't provide, right, which is a sense of meaning and purpose. And that was thrown out with the by this particular understanding of nature as a kind of enemy. And it was thrown out when you got rid of religion, right? Or you subordinated religion to sort of more utilitarian ends. So, yeah, man's at the center, but man's far less attractive than he used to be.

Will Jarvis 27:35

What do you think has caused this, this loss of meaning? You mentioned a couple of things there. But can you talk a little bit about that more? Is it truly just the story about the decline of religion and belief in a higher power? Or is it something else that's going on? Or just like lack of struggle or something like that?

Speaker 3 27:50

Yeah, I mean, so maybe just to put this in a in, in a, it might be a lack of struggle, I think courage is obviously the virtue that gives you most immediate meaning, because it has the most on the line, right? You you stand to die. And so people look for things to really fight for. And so this is why you see, you know, you know, for example, during the pandemic, right, it's no secret, right? You're the reason that the Black Lives Matter, in part stuff really took off, all of a sudden, that moment is because people were trapped inside, they were living like scared little animals, right. And there was something there out there worth fighting for. And the frustration, and I think the sense of a lack of real endeavor led to this outburst of a longing for a just cause worth fighting for. And that's where you see some of the excesses there. Right. Some of the, you know, it was mostly peaceful, as we all know, but right the, the the rioting, the burning the tearing down statues, they wanted something that they could fight for. When we don't attend to those sorts of things, and we don't we don't give that an outlet. It becomes unpredictable. Right? And then so then, all right, what's the cause? I think it's, it's the sort of hands on relativistic liberalism. Right? Remarkably neutral, right? And that neutrality for a while, you don't really notice it, because there's a kind of common culture, right? Some would say it's, oh, well, we were a Christian, you know, European nation. Some will say, Oh, is white supremacist. However you interpret that culture, it was more monolithic right then than it is now, as that neutrality is as worn down. And as you know, you bring in different populations, because you are open, right? You end up with this lack of any kind of purpose. And that starts to affect how we understand that neutrality because you can't be neutral and tolerant of everything, right. And so a lot of issues end up coming down to these culture clashes and it's as a result of our political mismanagement, right, a failure of common vision, but rather an ever increasing push for greater and greater neutrality. As a result of that. You see Both Sides Now, deeply unsatisfied with the neutrality, right? One side says no, you've gone too far with throwing out our tradition with calling everything racist. But the other side says, No, you've gone too far with free speech with freedom of expression, right? Certain things. People need to be just persona non grata anymore. And that's, that's all of a sudden illiberalism arises on both the left and the right, precisely by an inability to, you can say judiciously manage our freedoms, right? And be aware and make the case for a kind of common culture. This is what we're living with now, as a result of this political system being managed poorly by those in power.

Russ Greene 30:44

Yeah, that. I mean, it's, it's undeniable, right to you can point to so many statistics that, you know, suicides in general have been up for 20 or so years, especially among teens. You know, as we've discussed before, on the show, you know, obesity is way up over the past 50 years, and male labor participation has been trending downwards. So, you know, you can point to some real trends here. But, you know, I do want to push back on this idea of meaning in religion, because I don't feel like just because I live in a modern liberal society, that I can't have faith, you know, I go to church every Sunday, I, you know, I'm an active member of my church. You know, I, just because I live in the United States of America, doesn't mean I can't believe in God. Right. And, you know, even from the point of view, like beyond faith, you know, you can still find meaning in your local community, you know, whether it's the people you work with, or your neighbors or your friends, I don't see why we should all be looking to our national politics, right, for meaning or for answers, or to tell us what a religion should

Speaker 3 32:02

know. And I don't, I don't, we should, we should be careful not to equate, you know, what we're referring to as a kind of common culture with religion, obviously, religion is the age old source of this unifying, you know, unified thing. And to a certain extent, that might be what what might be actually necessary, right. And the I mean, you know, when you start talking about these questions, you start realizing, you start running into some pretty radical positions, right? I mean, you could easily find yourself maybe as an integral is right, if you're, if you're Catholic, and dancing around these questions, right, or, you know, you could go full, full Aristotle and say, well, we need it, you know, interesting, you know, it's really difficult. And I'm not sure, you know, look, I'd be, you know, I'd be the greatest statesman of all time, if I could solve this problem, you know, intellectually, it's, it's, it's theoretically, you can point to the issue to practically Sorry, I have no idea. Right. But I mean, I would say that, you know, it's, it's great, you can find outlet in your smaller communities. But, you know, that liberal neutrality, right, increasingly, increasingly has asserted more and more sort of hegemonic force. Right? When it was just a matter of the federal government being kind of hands off, and then the states sort of manage their own affairs. Fine, but that's not what's happened. Right. I mean, just to looking at the history of the courts, what is the court done? It is it is increasingly forced, of more and more morally neutral standard, right, to the point that people are forced on a smaller level to regulate their lives and to think and act right in accordance with these these sort of these principles of neutrality, these leave liberal principles, right. And that's, that's where it seems like maybe one way to think about that is that sort of liberal neutrality is ultimately not neutral. Right? It demands acquiescing, right, it demands that now requires on one moment of thinking of it requires supplementation, right? It's, it's neutral, and therefore you need something else among yourselves. On the one hand, on the other hand, the neutrality looks at whatever you put in there and pushes back against it right, insofar as it has a bearing on your soul. So, you know, this is, you know, you talk about, you know, finding meaning in your community. I mean, look at some of the decayed forms of religiosity, right in this country. I mean, I hear people spout some crazy religious views by which I don't mean extreme views, but remarkably defamed and, and sort of, I mean, it's just, it's just religion through a liberal it's liberalism with a religious lens on it, right. It, you know, you know, they have a cross, right, but nothing of what they do is it's really much to do with the church, right, or, I mean, the greatest caricature of this is like Unitarianism and then This goes hand in hand, I think we're sort of, you know, reactionary forms of religion, right? Where you see people adopting it almost as a kind of, you know, social movement or rebellion and not out of any sort of intrinsic sort of attachment to this related, you know, the religion, whatever religion they're practicing. So, I mean, on the one hand, I do agree with you, you can do that. On the other hand, there's every pressure not to write every pressure to to force you to hide your religious views, because you, you're running, you know, afoul of the reigning orthodoxy, and therefore, a sort of enforced, you know, kind of wishy, washy Enos to your religion, that makes sense. Do you

Will Jarvis 35:48

think there is an alternative to, you know, liberalism, like a, you know, to speak at the future that that is, like, more charismatic or compelling at some level? Is there some way? Or are we forced to, you know, like, just abandon it in the over the long term?

Speaker 3 36:04

I have no idea. I'm not, I'm not one of these. I think some people think this, but I'm not one of these anti liberal thinkers, I just think you have to, you have to be deeply critical of it. Otherwise, it's going, you're gonna end up where we are, right? I mean, it's, it's only by being critical of the reigning orthodoxy, right, that you're gonna have some kind of healthy alternative to it. Otherwise, you go too far, right. And you, you end up just sort of, you know, especially when you have a very flexible society like ours, right, where the laws are constantly changing, and people are, are brought up to fight for something, right? You have to fight for your bit of progress, right? Well, what happens when, what happens when things are pretty good, right? I mean, things are pretty good. Right? We have great comfort, and, you know, you know, my criticisms earlier, so we have great comfort and things that are pretty good. Why the house everybody is so up in arms all the time. And you know, there are there are problems, not to say that there are problems, but there's a real lack of historical awareness of how things used to be in this country to see nothing in human history, right, the massive expenditures of life the way that disease used to really ravaged us. I mean, it's, you've untold of opportunities to pursue your you know, happiness as you understand it, and we don't do it, right. And so there's, there's a, when you have that kind of that motivation to find something to change, if nothing readily prevents it presents itself, you're gonna you're gonna go after it, right, and you're gonna go try to find it, and that needs to be somehow tempered. Right. I mean, you know, I personally think that, you know, the civil rights era, which was such an important time in this country for actual progress, like real social progress. One of the negative after effects of that is that, you know, the court thinks that it ought to be ahead of the game on everything, just because of Brown v. Board of Education, but we did it right down. Let's do it again. And that's how you got, you know, roe and Grizzle. All these these court cases that never really sort of stopped being an issue, right? We have somehow gotten ourselves into this habit that we need to find new civil rights issues, new sort of frontiers, but we don't really know what they are anymore. And so what you often see is the same. I'm sure you guys are uses the same repeated fight the same repeated persecuted claims of persecution and oppression, even as untold of acceptance and untold, you know, unprecedented acceptance, unprecedented support for the political sphere unprecedent support from, like, corporate America, as everything gets more and more supporting you. You hear people speak as though it's, they've never been worse, right? And why? Because they need progress, right? That's an insidious cause of unhappiness, a failure to appreciate the good before you because you're always looking towards the the, you know, unachieved good of the future. Not a healthy way to live, right.

Russ Greene 39:00

You mentioned a couple times, you know, the integralis and the anti liberals, you know, and it's interesting that you're distinguishing carefully your position from theirs. I, I've noticed that there's a tendency in both defenders of liberalism, and the anti liberals to sort of paint it as if it's this one single tradition, and, you know, grouping together sort of the rationalists, like John Stuart Mill, or Kant, you know, with people who had a much more nuanced perspective on liberalism and human nature, such as, you know, Adam Smith, David Hume, Alexis de Tocqueville, you know, for example, so, or even Friedrich Hayek I would put in that boat, so, you know, maybe, maybe, you know, part of, you know, taking a more skeptical look at liberalism, you know, also would involve, you know, going back to some of these figures who themselves were liberals, but also at the same time had a more nuanced view of modernity and progress.

Speaker 3 40:08

Yeah, I think that's, that's absolutely the case. I mean, it's, it's me, you, you have to be these are, these are dangerous times there's obviously a crisis, and you need to think about it, right? But the stakes are incredibly high, right? I mean, you know, I see this with, like, for instance, Patrick Guineans book, right, a lot of interesting good points about liberalism. It's wholly negative, nothing positive. That's an irresponsible way to write, in my opinion, right. And not to say that Dineen is not an irresponsible person in his own thinking, but, you know, he has influenced this book was was very, very popular, it's, you know, it's, you know, made the rounds. And, but, you know, now part of this has to do with, to go with, like the Catholic sort of critics of liberalism, you know, they have in mind a pretty clear sense of the good, that's being lost, right? And it's a good that comes through Holy Scripture, right. And that's not something you can really fully argue for. Right? You can make the case for it to a certain extent, but it's a matter of faith. Right. And so I can see their reluctance. I think, you know, revisiting the history of political philosophy, creating great sympathy for people like mill, right? I mean, mill tries, in many ways to create a hybrid between, you could say, Aristotle and utilitarianism, right, where you look at, you know, he has a, he's a trying to adapt to kind of soccer to them to, you know, progress and on liberty, you know, it doesn't work and the defects are interesting. But there is an attempt to sort of restore it to say nothing of figures like Rousseau, but you know, a lot of these people will look at research and say, well, he's just like a proto communist communist or something, which is a gross misunderstanding of a man who's thought you can learn quite a bit from in what he sees as the degrading effects of early modern, modern thought, you know, a failure to do that, right, is is a failure to live up to the crisis that your present day faces you with, you know, and, and that requires an extra labor on your part. I mean, if I can just, I'll put a somewhat personal note here. I mean, my interest in these questions, really, you know, began I mean, I was mostly interested in sort of ancient thought, from the perspective of reason and revelation, a lot of that had to do with the fact that, you know, the, you know, Strauss's thought, and particularly strawsons, thought, in particular, seemed like a remarkably helpful way of understanding what happened on 911. Right, why, you know, radical Islamic thinkers could look at the modern world and say, No, right, and trying to understand the point that they had, right, what they were appealing to, and fine, and then, you know, you get, you know, the Bush years, the Obama years, then you get Trump, right, and, and then all of a sudden, you're facing a different issue, right? And you start to realize that these these questions, you have to go start looking into this history, because you're not going to understand it otherwise, right? You're not going to be able to, I think, as far as liberalism is concerned, it's very difficult for us to look at somebody like, you know, Osama bin Laden and say, well, we just say he's a zealot. That's it. Right? Why can't he be more tolerant? Right, that's a wholly inadequate understanding of, of what exactly he has in mind. You had in mind, you know, when he did, what he did, right, or what other sort of reactionary Islamic thinkers like say he could talk, right? When you look at him, and then you start digging in the history of it, you can see all sorts of interesting debates, right? Going back to, you know, a guy I consider kind of proto crypto, which is, you know, og Ghazali, and a various their debates and what's going on there. I mean, you realize they're actually real questions here that you need to, if you're even going to remain a conscientious liberal, right, that you need to somewhat take seriously if you're going to be thinking about these things, right. And not every person can think about it, right. But this these are where these ideas are turned into policies or are turned into the way that we envision our task and a failure to do that is a failure to confront these these moments.

Russ Greene 44:23

Yeah, I'm glad you mentioned the role of Islamic philosophy here, because I think that this is one of the big one of the biggest weaknesses of modern defenders of liberalism, broadly understood, is they tend to exclusively identify it with modern Western Europe, you know, usually referring to like Western civilization, right and thorough reasons for that. But what that really overlooks is this, you know, this deeper history of it was actually like what we think of as Western civilization was actually a product of an interaction between multiple different civilizations the Islamic world obviously, not just el Ghazali, and Eman, brushed, you know, every row is, but you know, out of Cena, even called Dune, you know, there are so many thinkers from that period, both in science and in philosophy, who were immensely influential in the development of the West afterwards. And if we ignore that tradition and just make it seem like this is Oh, yeah, this is all just stuff that some white guys in Europe came up with about 300 years ago, I did nothing. And it's great, and we have to keep doing it, you're actually feeding into the criticism of liberalism, right? Because the criticism of liberalism is that it's Eurocentric, and it's, you know, all of that might work for some, you know, like, European white guys, but for everyone else, it's a disaster. So, ignorance of this history and ignorance of these thinkers is actually probably one of the biggest weaknesses that liberalism now has.

Speaker 3 46:06

Yeah, I mean, it's precisely the faith and progress that makes you say, I don't need a look at these old books, right? Well, how old 2500 years? I mean, we 50 years ago, I mean, we didn't even know about computers and things like that, like, How stupid are these guys? Right? So you don't even think about it? Right? But I mean, so I take the great example here, I think is is Spinoza. Right? If you go to Spinoza. In a way, I'm going to just steal stress his own inquiries from the 20s into the 30s and 40s. But you look at Spinoza, he founded the freedom to philosophize on the basis of liberal democracy, that was his sort of task. And this was a completely different approach to the freedom to philosophy, then you find in my mind at ease, and if you go to my Monday's, he's looking back and you go back to vero, he's right, he's securing again, the freedom to philosophize, but on religious grounds over and against the criticisms of people like Al Ghazali, calling him a crypt calling, you know, is is for runners, a crypto Muslim and going back to Ferrari. And you start, you start pulling this thread and you realize, oh, we have a particular approach to a basic problem, which is how do you secure the freedom to think, right, and the freedom to reflect on your own? Good, we've made it a political and social project, and that has come with certain problems, right? I don't think the chief one of them being right, that we all automatically vulgar arrives, anything that's an actual scientific achievement, and that has its own sort of effects. For, you know, pre modern thinkers, right, the attempt was to secure it over and against the resistance of religion. And while you didn't get the vulgarization, you obviously got the overly religious interpretation of philosophy and of science, right? And you also got this, this extreme reaction to any kind of free thinking, right? Or any kind of open questioning, right? I mean, now that your point about, you know, dead white man's thing, right? I mean, this is where when you really trace the tradition back to its roots in Socrates, it's, it's, I think it's absolutely properly understood, it's almost impossible to overcome the Socratic position, precisely because it consists of almost nothing but open questioning, right? Yeah, there are certain objections you can raise. But the idea that this tradition is monolithic, is a mistake, right? Because it's precisely at its core, it's composed of this desire to fundamentally question our opinions. Right? And, and so there's, it's very hard to think of a tradition more all encompassing, more all embracing, you know, than the West has been, right. That's why, you know, the dialogues of Plato find themselves find themselves in the Middle East, and you get a renaissance, right. I mean, this is, this is what happens when you take books like these and thinking like this, it'll have this effect. As long as it can be read, it'll have this effect anywhere.

Russ Greene 49:08

As long as they can be read, and as long as people read it, right. Like, now, we have this paradox, where we have so much media, and like people are just entirely occupying themselves with I don't know, tick tock videos, and, you know, it's like every single second you spend doing something like that, and I'm as guilty as anyone, like, you could be, you could have been reading Xenophon. Right. Doing something much better with you. Right, and yeah, I

Speaker 3 49:35

mean, no, I have, I'm just, I'm just changing offices, and I just put all my Greek books and I always talk about this how, you know, you have these manuscripts they used to have to be copied by hand or now printed and you can buy them anywhere and you can get them in almost any you know, you know, library they they're gonna have something and you can even get the original sources carefully edited and everything they're available. Nobody wants it. Nobody knows I don't know, statistically do more people want it now than before. I have no idea. But I mean, it's it's so readily available. And yet everything our culture is pushing, as you said, like towards tick tock, right? You know, so maybe I should just start, like, you know, a tick tock is one of the reasons I like I like Twitter. I mean, I find that if I go on Twitter, I can have an actual conversation, I could put out a quote, put out a thought, you can inject a little bit of thinking into this incredibly volatile medium and meet people talk with them. And same thing with you know, the podcasts I do, you know, there's, you just, there's a way that you can connect to people, small group, but they're out there, right, and you can use these media. Otherwise, it's just only degrading, right? And only, only a negative influence.

Will Jarvis 50:52

I want to I want to talk a little bit in the last couple of months about Strauss, actually, I will understand from you, what do you find interesting about Leo Strauss, it's to me the fact that I get this idea that okay, and I'm not as well read as you are by any stretch. But I get this idea from Strauss that, okay, when we go back and read these books, we have to understand that everyone writes under a certain set of social conditions. They've got their own Overton window to deal with, and there's certain things that can't talk about. And so we should try and extrapolate out from there. And you know, even in recording this podcast, like, I know, this is true, there's certain things that you don't talk about, or you can't quite cover, things like that, because of the Overton window you exist in. But my question is, is what do you do with that? Like I this is an interesting point. And I think this is a this is a good thing to recognize, but But what is one supposed to do with that when you have that kind of knowledge?

Speaker 3 51:43

Well, I think I think, also to make it sort of simple. So there's a kind of there's a, there's a social constraint, right? You're not allowed to say certain things, obviously. But there's also I think, for Strawson, almost sort of natural constraint, which is that it's not clear that you can solve these questions simply, right? Now, that's he makes a number of remarks, I spent all summer working on this. And he makes a number of really interesting remarks about, you know, the basic presuppositions or his hypothesis is sort of hypothetical basis to his own activity. And it is, you know, there's a lot of talk about the riddle of being or the mystery of the whole, or, you know, fundamental problems, and you have to kind of figure out how these different ideas are operating in his text rhetorically and philosophically, but I'll just to put it simply, I think for Strauss, he understood that modern progress had made us insensitive to certain fundamental questions or problems, right. And it's made us have absolute faith that we can devise solutions. And this Well, it's great, and it's optimistic on a certain level, you have to believe you can solve a question to try to actually understand it, right, you have to take the solution seriously as possible solutions when you read different philosophers, or you study different ways of life. On the one hand, on the other hand, the humility that comes with understanding something of these great thinkers, they're really good reasons for writing the way they did for proposing the ideas, the fact that they're what they taught, and what they thought are on different levels. It has a deeply moderating effect, right? And not just philosophically as an individual. But I think he thought also, politically, I think this is one of the reasons he pushed back against liberalism. And one of the reasons he, he pushed for this, these questions, these, this idea of fundamental problems, right are fundamental questions, or certain solutions that are co evil, and they can't be sort of resolved is that he understood that if this could take some kind of Route in academia, it might not take over the whole thing. But it might create a sort of healthy skepticism about what we can know and what knowledge can accomplish. And that would be a benefit, not just for. For your own growing, it could be a benefit for the regime and for the West. More generally, what if I could just go on to one point, this is something I wanted to talk about along the way. But I think, obviously, there's these questions. And so rich, we went in all different directions. The fund, one of the fundamental texts that I've actually relied on quite a bit is this discussion in the theatres of trying to know your own good. And, and this is over the gift, a relativistic argument. You know, that Protagoras? Socrates is reviving this, but sort of Protagoras and argument against your ability, this sort of relativistic argument that well, what's good for you, and what's good for me, it's a matter of, no, it's not just a matter of what appears to you. There are there's a difference between apparent goods and real goods. And you know this from experience, because you tell yourself, it's going to be a great idea for me to do this. And it turns out the sock right of this movie is going to be great, and you're completely disappointed. There's an experiential now The difficulty here is that when Socrates goes to try to establish knowledge of the good, I don't know, that's, that's difficult, you can know it negatively through mistakes. If that, as a hypothesis, just put it out, if the way you know you're good is through mistakes. And right now we are pursuing the good of knowledge without any kind of right, we're relying on it to go back to the sort of systemic idea that we've been talking about. We're relying on systems, right, they're informing our lives and our actions, right. And we're unreflectively going after them. There's a lot of mistakes to be made, right. And this is where I like to look at Descartes here or bacon as a similar idea. But the idea that you should understand the world as wax that can be formed, right, that can have attributes added to it. That's a remarkable analogy, a really powerful analogy for human creativity and the ability to form our future. This is progress, right? It's ours to be shaped. Well, it doesn't take long of Googling, like plastic surgery disasters, to see what kind of, you know, attempts to shape our own reality, what kind of, you know, horrors that can give birth to, to the I say nothing of the horrors of the soul and the horrors of the body or human life being sort of formed, and in this way, and so taking seriously that there might be some kind of standard, right, or natural sort of standard by which to judge something as good or bad, right? Or just, and that standard might be something as stand alone, as all we know is that we make mistakes, that kind of humility, knowing that you might not know more than that will make us way more judicious in how we pursue science and technology and how we pursue progress.

Will Jarvis 56:43

And ask for humility. That's good. That's really good. Rest of the last questions for Alex.

Russ Greene 56:48

Yeah, I actually wanted to answer your your question too, because I have my own little take on it, which is that I don't, I don't even I'm not convinced that it's actually even possible, at least for a beginner to read, Plato, or Aristotle, or people like that without sort of a straussian. Understanding. Because if you start to read Plato, the first thing you notice is he says things that seem or you know, Socrates, for example, might say things that are obviously we know, now know, to be wrong, or he contradicts himself. Right? And if you come into it, like I did with the mindset of, you know, you know, for my professional career, I'm always looking for flaws and people's arguments, right? And exploiting them. So so then I, you know, I immediately read, and I think, Oh, I caught you, Plato, you know, like, I'm smarter than you what an idiot you are, you know, and it's a closest to your mind to the idea that maybe he has something to teach you. Right? So it's only if you come into it with the awareness and the openness that it's possible that there's a rhetorical purpose, or that it's possible that there's a reason for this contradiction or a reason that he overlooked this obvious counter argument. It's only once you come into it with that, that understanding or that least that possibility in your mind that you can really appreciate these authors. So when I actually entirely found Alex's work in the Strauss, Ian's in general by accident, because I was just reading Plato and Aristotle and trying to understand them. And it turns out if you if you look for commentators from Plato and Aristotle, it's inevitable, you're going to run into the Strauss. Ian's right, and, you know, they they really improve my ability to read and enjoy these texts. So that's my understanding. The purpose of straw.

Speaker 3 58:38

Yeah, and I think, yeah, I mean, the Strauss is sort of basic hermeneutical observation is like, Look, we all know these books have contradictions, right? Certain things don't make sense, right? You got two choices here. Either Plato was like just a straight up moron at certain points, or there's some deliberate and now with Plato, it's great because you have the whole dramatic setting. And then also Socrates, you'll certainly Kenny meanness and then he'll say, like a page later, like, yeah, the only thing I mean, is this really, right? And then the rest is whatever, like, this is good for you. You start to realize, oh, wow, everything is really key chain qualify. You know, Strauss is I think most persuasive with Plato, precisely because of the dramatic stuff. I mean, his his readings of like my Mondays and Spinoza really rubbed people the wrong way. So certain people for that other reason, right, but he I think he's just kind of in a way pragmatics like, come on, you know, and if you read other other commentators who are not salesy, at some point, they will all admit it. They though a little point like, Well, I think he just said this, because of whatever like Descartes, I really think he believed, come on. Right. Like he's obviously conservator, you know, and so you have, you start to realize, Oh, everybody kind of admits it a little bit. Strauss's distinctiveness was to think that sort of admission to its Basic presuppositions, right? And think well, what would the what would the world have to be for this to always be something people have to do? And he took any any thema ties that and made that more explicit than maybe anybody ever has even Plato, right? Where you don't you get these certain metaphysical statements about this, but they're very much in passing.

Russ Greene 1:00:21

Right? And in and just to wrap things up, I'm going to try to, if it's the case, that it's sort of an internal condition of humanity, that there will always be a difference between what's stated or what's written, and the reality, you know, between theory and practice, then that's an inherent dilemma for the modern project of progress, right, which is all about trying to make reality correspond to the text, right? And it's just probably not going to work the way we expect it to.

Speaker 3 1:01:00

Not at all. And this is where, you know, the role of the science communicator is one of the biggest concessions that fraternity has made to antiquity. We need rhetoricians. I need a rhetorician I need, you know, what do we do to get people to take a Vax, call it a Fauci, ouchy, then people really be into it. Right? Like, that's, that's a massive concession to the fact that there are distinct types of people. Right, and that you need rhetoric to relate from wisdom to on wisdom. And that's just, you know, that's a very kind of canned version of, you know, ancient understanding of different human types, you know, which again, it has its own sort of questions and problems, but Right, that's, that's admitting something about the nature of political life. That's not modern.

Unknown Speaker 1:01:45

That's great. That's great. Well,

William Jarvis 1:01:47

Alex, thank you so much for coming on the show today.

Unknown Speaker 1:01:49

Where can people find you? Where should we send them?

Speaker 3 1:01:52

So send them the new theories, my podcast I do with my very old friend Greg McBrayer, and my very fat friend, David bar, and go check us out the new Thinkery it's just thinker with a Y on the end, we're on Twitter and check out the podcast. I'm also on Twitter, Alex, pre U P. R. Io. You, you'll find me on there. If you look at the new thing, great. But yeah, I mean, that's, that's the thing, that I'm very proud of the podcast, I think it's great to talk with my friends and to share it. And, and it just to hear that people get something out of it is always a shock, because just kind of do it and send it into space. And then I mean, you'll see statistically like, oh, this many people listen, and then you get an email every now that you're like, Wow, this is wonderful. So if you like any of this stuff, this is what I do accept, you know, we make sort of dirty jokes a lot and probably a little too much than is professionally wise. And, and yeah, it's great. And I think your listeners should know well that you have the whole time he's had this just lovely smile across his face, which is a little bit disconcerting, because I don't know if I've said anything to offend him, but you know not. You should have been doing podcasts. You should be on TV that's out there.

Will Jarvis 1:03:06

Appreciate that, Alex, thanks so much. It's been great talking to you.

Unknown Speaker 1:03:09

Likewise.

William Jarvis 1:03:14

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars to say joins us as a co host.

Unknown Speaker 0:39

Well, Ed, how are you doing this afternoon?

Ed West 0:41

Absolutely fine. How are you? Doing? Great. Thanks,

Will Jarvis 0:45

again for joining us again, for round two, kind of a first guests. We've had to do that, which is it's awesome to have you had we really appreciate it. Yeah, for sure. For sure. Do you mind just giving us a brief bio for the guests who might not have met you before?

Ed West 0:59

Well, I write the substack wrong side of history, which I've been doing for now for, I don't know, 10 months or something. Before that was unheard. And I also wrote for the UK spectator and The Daily Telegraph all the basically, you know, all the reactionary obligations. But now Yeah, moving subsets, that's going to do our vote, you know, right, that politics and with the kind of history flavor, that's my main thing, I suppose my characteristic is I'm quite known as being pessimistic. But you know, I think I'm being proved right at the moment. So you know, you know, there's like prophets who was talking about Doom, eventually, they're going to be proved right. And I think 2022 is my lucky year.

Lars Doucet 1:38

What are all the things are getting proved right about

Ed West 1:42

me just genuinely, while I've been on holiday in Spain, and then recently, I just can't you know, when you're on holiday, and just can't resist looking at Twitter. And it's like, I know, this is ruining my holiday, I'm supposed to be wait for help, but read the news. And even though I'm in this lovely setting by the sea in the Mediterranean just need to be a little depressed. Just the economy, the economy is I mean, economy in Britain is looking very bad. But the gas price situation for us is like they're talking about pints like a pint of beer is like six pounds in London, and like a northerner wouldn't pay more than like, four pounds 50. And they're getting really upset about that. But now they're talking about pints costing 20 pounds, if that if the pubs are going to survive, if they say that two thirds of pubs aren't able to survive the winter, just the price of energy is like, unbelievably skyrocketed. It's like nothing before. So we can, you know, there's talk about doing a cap as the government pay people's energy bills, but I mean, it's kind of it's a bit Latin American, the whole thing. It's, it's kind of heading towards default territories. So I mean, it's generally quite scary that the whole thing is just because of the war. Yeah, I suppose. And so basically, I mean, it didn't help. I mean, a lot of our economy was in a bit of bad shape before then anyway. So it was a bit of a, you know, the analogy is, you know, they didn't fix the roof and sunshine is coming. And we've we, I don't think we've had any growth since 2007. I mean, if reading about the British economy is quite, quite bleak. I mean, around 2007, around the time of the crisis, Britain and America weren't that far apart in terms of GDP per capita. Now, it's like way different than we've had that almost no growth since then, we've basically done the same as Italy, which is 20 years of no growth, nothing. And the same fabulous sort of same end result, which is sort of lots of people in their 30s and 40s, living with their parents, and I kind of just don't do anything, we don't even have the nice food and a nice weather. I mean, we've got the same we're at like, you know, we've had like a fourth Prime Minister in St. Six years now, which is, you know, very, again, very Italian. And, you know, she's coming to power in a really, really difficult time. So, I mean, I wouldn't want to, it's not the best time to be taken over. And, you know, what I have now is it looks much more sort of, sort of worrying then even the financial crisis, and much more worrying COVID

Lars Doucet 3:59

What are some things that led you here?

Ed West 4:01

What for Britain?

Unknown Speaker 4:02

For, for Britain specific?

Ed West 4:07

Um, I mean, Britain has? Well, I mean, obviously, the one obvious fact is, Brexit has definitely made everyone poorer. Because like, over half our trade is with the European continent, and it's just it might it'll fix itself. And, you know, I think the Brexiteers argument is that in 1520 years time, we're going to have much more freedom with a regulation and and actually start to pay off and that may be true. I mean, I didn't know you know, but the problem is that in the short term, we're all alive and it's gonna be a rough few years and it's something that people were very divided over not only half population voted no, but of those who voted for Brexit, there was a huge variety of different ideas about what it meant. So there are you know, it's almost like the different religious sects they just break up and then when the break up and then break up. So there's not really the will so people people might endure suffering and pain and poverty if they I have an idea of what they're gonna get at the end, and if they know what they want, and if they believe in it, but when there's, with Brexit, we're not even sure what we, you know what aim is what kind of country wouldn't be who we want to be aligned to. So there's also divisions, which aren't necessarily like left or right. But in the meantime, you know, it's like just traveling to France in the summer, which you know, that whole English middle class or go to the south of France and their cars, when some of the times comes, and you know, they all get stuck in Dover trying to cross over, it's all very frustrating. There are, you know, all sorts of other things. We have the kind of one of the worst housing situations in Britain, in Europe in the world. I mean, I know all the other English speaking countries have problems. But in the States, it is slightly at least a bit more localized in cities. But you know, London is basically a London is sort of almost on somewhere between San Francisco and maybe a bit less than in terms of unaffordability. And London is basically about all the jobs are in in Britain, in most industries. So imagined, like San Francisco is the only option in terms of affordability, it's impossible to basically break the housing situation to build more houses. Because the kind of political system means that, you know, you know, the Tory party is very elderly now. So it's very controlled by nimbyism. So most of the average Tory voter has their own house, or many of them are retired, there's no real incentives for them to allow new building. So that's basically that's another big block fact that I think another thing is just basically, we're very over regulated. And also, I think we're just getting older, like everyone else. You know, that the Blair thing was the Blair. Government, they had a lot of immigration. For, you know, for economic reasons, but again, it was just you know, now 20 years later, a lot, you know, these immigrants are old as well. And now we just say, Okay, what are we doing now? The population is aging and aging population, inevitably, there are some economic consequences of that. There aren't enough young, dynamic people, it's really notable, if you go to parts of England, that the southwest, everyone's so unbelievably old. You know, I mean, that's the problem ever. I've just been in eastern in Romania, actually. And, you know, and that's the kind of similar thing you can see areas that are quite looked feel quite depopulated, which is the kind of thing you get where, you know, people are going from the poor parts of Europe away, and they're all sort of congregating in the wealthier parts where there isn't enough housing, to sort of, you know, to make a nice life. So yeah, things are looking quite, quite bleak at the moment.

Will Jarvis 7:38

And if you had to pick just one, you know, policy lever, you know, we should all just start jumping up and down as hard as we can to start getting this thing back into this train back on the tracks. In the UK, let's say in particular, what does that look like? Is it is it street votes at the local level to kind of fix zoning, maybe increase housing supply? Is it? Is it something else? Is it just encouraging people to have more kids? Is it rejoining the EU or is it do you have any thoughts there?

Ed West 8:05

I mean, I would say street votes. I mean, I don't know if you know about that, Lars, it's just, I'm sure it's just

Lars Doucet 8:11

been if you could describe it for audience, that'd be great. Yeah, yeah. Yeah.

Ed West 8:15

That it was actually basically the brainchild of a friend Michael bend southward to work for Think Tank, Policy Exchange. And it basically means where there's a street of quite low density houses in an urban area, the entire street and votes that up densify it. So the moment the planning regulations. So if you live in, say, if you live in zone five, and six, which is the outskirts of London, they have a lot of sort of low density streets with either bungalows, or two stories, which are very spaced out. And if you have one of these and you want to extend the build a house, you you can't do that, obviously, because your neighbors will object to you. And another kind of regulation Stop it, but and this system, the entire street can vote on whether they all densify. So that will go from one story to either three or four stories. And they will vote on a plat on an architectural plan as well. So that kind of the most popular type of housing gets built. And that way, you know, the NIMBYs because obviously everyone, everyone, most people NIMBYs for totally rational reasons. Because if your neighbor builds a big house, it makes your house less valuable, because no one wants to live next to the big houses and more people. But this way, it means that everyone financially benefits from there being more housing. So the to the whole, the whole street gets rich. So if there's like a 60% vote, then you can turn these low density things into sort of bigger blocks. And that would densify London and I think there's there's some like 2 million and more properties could have built I don't know what the exact figures that that seemed like the best idea and the government that US government debts kind of the I think that I think I think it might happen still. But the problem is the government is changing so much the moment I mean now suppose I'm Michael Gove who's But by far the most, like intelligent of all the cabinet ministers very effective, like, wherever he, whichever department he running he was did quite a good job. And you know, and the rest of them aren't, like particularly talented. So now he's done though, so I don't know what happened. But that's I mean, housing is the most like, you know, employment I mean, my my when my so when I don't know if I mentioned this last time we were but my daughter had the leaving do when they're all the kids the leaving assembly at primary school age 11. And they will talk about, like, what they're going to do when they're older, like how they see themselves in 10 years time. And they all said about one they said I want in I'm going to be my own flat. And like just thinking like none of you I do want to say none of you are going to be realistic about this. It's like never gonna have you ever known flats when you're 40, let alone when you're 21. And that's like a dream that that's kind of completely disappeared. And compared to like my parents day when my mum came to London in the 60s and she from Ireland, and she you know, she really like a secretary and she lived in Hampstead, which was like impossibly at market. I mean, it was impossible. When I was growing up, right for a secretary. You know that it's like where the Monty Python class or live it's like really expensive. But again, but more generally, if you went into sort of London in the 60s when it was like swinging that it was incredibly filled with young people because that young people would live there and and the even the statistics on the number of young people who lived within zones 123 was a starting place now now it's just really old. So I feel like it's now as my concerns are like less about me and more about my children and you know, what kind of world they're gonna live in? I didn't feel sorry for them, they're gonna miss out on this, like normal, normal young person's experience should be

Lars Doucet 11:42

do you think any of those young people are going to be driven out of Britain entirely? I don't know. I thought I mean, what do you think they're going to do?

Ed West 11:48

I mean, most of the options is so vast that most of them sitting there remain the remain campaign often said about Yeah, our chance to go live in Europe. I mean, most British people go and living in English speaking countries, because it's being English. In Australia and Canada rather have understates basically, and New Zealand those for basically the volt. I mean, Australia, Australia is quite strict about immigration. And I think I mean, I think the current housing situation is kind of a problem amongst all the English speaking world Ireland's got a I mean, you know, islands got something like absurd the other day, there's like something like 80 available flats to rent left in our country. I mean, like, there was a queues of the show pictures of queues of people queuing up for this one bedroom flat or something. I think it's maybe something just do the kind of governance and culture which is maybe, maybe it's, I mean, like the English speaking world has this has this very strong tradition now of like, homeowners having rights, which prevents other homeowners and building and I think maybe that might be part of the problem? I mean, France? Maybe France has its troubles, but they don't really have nimbyism in the same way just because their whole thing is like, okay, you don't you don't want like this, you know, railway being put through your back garden. But you know, tough was, like, Paris says, though, and, you know, I'm the heir to the 14th I can do whatever I like, you know, maybe there is something about Yeah, just kind of the Anglo phone culture of freedom, which makes out and it's basically is described as a Gordian knot, it can't be can't be broken, because there's just no democratic mandate for breaking it. And older people, I mean, older people that you know, it's attractive, common, so all the people, they mostly want grandchildren. So they want their own grandchildren, you know, they want their children to be able to have children, but it doesn't make any sense for them just to allow their own area to be developed. So I mean, it's, yeah, it's, I mean, as for like, other things, I mean, I didn't know the power station thing is depressing. There was a video game around Nick Clegg, who was I mean, there's no reason you'd heard him in the States. He's a complete, like, nonentity. Really, I think he works on Facebook, the, and he was deputy prime minister of Britain. And there's a video of him going around 2010 saying, well, there's no point building power stations, because, you know, let him get anything since until 2022. Now, thanks for that. I mean, there's, you know, like an aversion to building infrastructure, which is a problem here, which I think is kind of related to, we've just, I think, when our major power stations just been shut down, because of, and we've, you know, basically failed to build any new ones. And now that, you know, we've been dependent on you know, unfortunately, most of the natural resources of the world are controlled by quite bad regimes. And now one of them is kind of like our enemy, and there's nothing we can do about it. So yeah, I mean, I think the optimistic thing is maybe like a crisis is sometimes needed, like whether it's like in someone's personal life or whether countries sometimes you need to get to a crisis point before people think actually, this needs to be resolved. And maybe, optimistically and you know, like the power situation like the natural resources now we probably will invent, invest more nuclear energy and in In a renewables because we have to, and now this is a vision of a future where we can't rely on countries like Russia to supply all our needs. I mean, the only good thing is that I mean, if you're Norway now, I mean, laughing Absolutely. Just, I mean, they're already completely loaded as anything. Now, they're going to be the only sort of sort of reasonably reasonable country in Europe, which has all these kind of,

Lars Doucet 15:22

it's funny, because I'm actually Norwegian. I'm a my mom's an immigrant. I'm a citizen. I happen to be born in Texas, I was just up there visiting my family. And it's, it's kind of interesting listening to Norwegians complain right now. And then like, talking to what stuffs a little more expensive than it used to be. But,

Ed West 15:41

but it's only 10 pounds a pint for better? I mean, it's like, incredibly, I want to I want early this year, is that wow. I mean, it really is expensive. But I guess, well, their average income is like $90,000 a year, right? It

Lars Doucet 15:54

is pretty good. You know, it's been interesting, like talking to so many other friends in Europe who are like, I'm not sure I'm gonna make it through the winter. And I'm not trying to slag off my Norwegian friends and family. But like, I think we we have something to be grateful for compared to the entire rest of Europe right now.

Ed West 16:10

But yeah, again, they have also, you know, saved during the good times, you know, they've got this problem. I mean, also there, bless the resources, but lots of countries are blessed the resources and make a complete mess of things. So

Lars Doucet 16:22

what's the like, I'd love to talk to you about that, because you've just got this great political analysis approach to things. So like, I mean, doesn't Scotland and therefore the UK have access to, you know, Norway has access to use North Sea oil resources, but so does the UK I'm not sure if we split it 5050 Or if we got the good end of the stick. But I mean,

Ed West 16:43

I think no, more or definitely hasn't, I mean, Norway's only like four and a half million people in Britain said, Yeah, but

Lars Doucet 16:48

you got access to any of it. And you've had access to a bunch of other stuff, this whole legacy, the British Empire and things, you know. So what we've lost, right, right, right. Well, that's gone now. But um, one thing that I'd like to talk about is, since you mentioned natural resources, so I've spent a lot of time studying the Norwegian natural resource regime, I'd be interested in what you think about it, because the did you know that the Norwegian oil management system was set up by an Iraqi immigrant specifically to avoid the resource curse?

Ed West 17:21

No, I didn't know that. That's very interesting. No,

Lars Doucet 17:24

so there's this guy called True called Kasim. Now, if you ask him, personally, he will probably push back on getting all the credit, because there are other people involved, too. But um, so basically, Norway discovers oil back in the 60s 70s, you know, and they don't know what to do with it, they don't really have an established oil industry. And this Iraqi immigrant is there. He's married to a Norwegian woman, he came back to Norway for his son's health. And he's looking for a job. And they're like, Do you have any ideas what we should do with this oil, but now that you're asking for a job, and he's like, Yes, I do. And he sits down, and he hammers out this plan, where he's like, the problem you're going to have is you're going to have the resource curse, you're going to let the Americans come in and do whatever they want. And they're going to take all the resource wealth out of your country, because by the very act of regulating access to this resource, you're going to create and the fact that it's a naturally scarce resource, you're going to create monopolies. And they're not going to be not only are they going to charge whatever they like, they're also going to monopolize access to that resource, they're not necessarily going to be incentivized to develop it to the full extent. And so what I propose to avoid the resource curse I saw in Iraq, with a, you know, is not to go full socialists nationalization, and not to go full privatization. But you do. What I would classify as a Georgist approach to natural resources through caucus, he never uses this word, but he basically reinvented the approach, which is you have a huge severance tax on oil that comes out of the pipe. But you have a huge subsidy on the exploration and discovery of the resource, right? It's kind of like, because the approach is basically like, if you're gonna sit on an oil, well, you're incentivized to basically be lazy, and to basically just capture resource nodes to keep them out of the hands of your competitors. But if we so we should put a severance tax on that, because it's the people's resource that you're, you're essentially renting. But if we do that at 100%, and just like cut it at that there's this argument that it's like, well, it's really capital expensive to go get that resource. So what we should do is we should subsidize discovery. And the argument is that well, it seems to have worked really well because even my like hyper conservative, like American oil friends are like, yeah, the Norwegians are really good at this. You know, the technology and their investment is like is like really advanced. So it seems to be a good way to manage natural resources and what was really interesting means that apparently the hydro power industry is managed in the same way. And that was set up 50 years earlier. And that was actually set up specifically by Norwegian Georgia's. It's in the early 1910s or so. What the Norwegians are kind of complaining about now is basically the distribution of that resource wealth that supposedly belongs to the people. They're like, okay, shouldn't we be spending down some of this sovereign wealth fund? You know, if we're the owners of this resource, you know, some of them are complaining that we're selling it to Europe, you know, and then others are, you know, this is where there's debates about how do we distribute the wealth that belongs to the people. But in my opinion, it seems like that that's a smart way to run a resource regime seems smarter than the way we're doing it in America. But, you know, you're the big political economy brain, what do you what do you think of?

Ed West 20:48

I don't know enough, that resulted really, I mean, I'm, I mean, I suppose I'm more interested in the culture. I mean, like, presumably, that that could just never ever worked in Iraq, for example, it wouldn't be possible. The culture is different. I mean, Norway has been the United States, like one kingdom since about 900. Ad. You know, it's been well, we've

Lars Doucet 21:05

been we've been a Danish or Swedish protectorate for most of that time.

Ed West 21:10

Yeah, but Norwegian identity has always been while I'm in Vegas, I mean, obviously. So I think the oldest states in Europe already then marketing limit Norway's around the same time? Yeah, you're right. It's but it's always had a distinct identity when it's ruled by the two other countries. I mean, I couldn't ever see a situation where Norway or Denmark or Sweden, yes, oil, when they're sort of like warring clans fighting over? It's just a sort of. I mean, I don't even for the British. I don't know enough. I'm not as much I know, he's been basically stopped, I think, because it was like the hardest oil to get. And now only that's not really making much sense. Although I would say it's probably easier for like a smaller, much more cohesive country like Norway, or, you know, or similar Scandinavian country to manage this better. Yeah.

Lars Doucet 21:54

Also also helps if you have a really smart guy come in, right. The minute you discover the resource before you've established a

Ed West 22:00

lot of that stuff is just like serendipity right there. Right? Just the right man in the right place. I mean, it could be it could have been a complete, they could have had like a Charles Ponzi tying up. And but I mean, I think even if that happens, I think eventually, they probably would have would have stumbled on, on the right way of doing things. I don't know, it just seems, I don't know, all those Scandinavian countries, when I if I go to they will seem a bit like from an ad fraud point of view. This is like a really not a paradise. But, you know, like these, they're very, like trusting places. And when you when you come back to England, it's

Lars Doucet 22:34

not so they are they are very cohesive. They are a very high trust society. But I think at the same time, like I mean, we used to be bloodthirsty Vikings, so I don't think it's in our blood. Exactly. But on the other hand, you know, I do think there is something to be said, for having a smaller unit of government. You know, Norway is famously not in the EU, we are in the European economic system and are subject to a lot of the same treaties. One on ending debate in Norway is that basically, we, we have all the obligations of the EU, but none other representation. But um, but

Ed West 23:04

I think that Britain is gonna get eventually as well. I mean, that seems to be the most likely thing, which no one's really sure why, but just, what a reason. Yeah, yeah. But isn't that I mean, I mean, surely all the most bloodthirsty Scandinavian Vikings went to like Yorkshire and that's why so chilled out and England, I actually reached out the most like, yeah, and Texas. I mean, isn't there actually a theory that amongst Scandinavian migration to America, this is like a semi serious theory, there has been some sort of like, selection effect? Yeah. Well, I mean, there's this whole there's this, Minneapolis and whatever, what what

Lars Doucet 23:40

really happened was, it was most of the poor people who were forced out, it was your second and your third sons, who didn't inherit land, who mostly were forced out to Minnesota, like, I mean, I look at my own ancestry. And I look at my mom's family, and it's like, oh, we own the farm. You know, that's probably why we got to stick around so long in the old country. And the other thing is that Norway, Norway, Norway has consistently been one of the poor of the three Scandinavian states. One of the big things that kind of saved us was potatoes, of all things. A good 150 years ago, this group of people called the potato priests, Norwegian priests, who just like got really of angelical about potato cultivation. I mean, because like, there's almost no arable land in Norway, and that's why we had to steal yours for so long. You know,

Ed West 24:31

it's you're not surprised to get in potatoes. I mean, like, you know, from an Irish perspective, obviously, they have incredible, you know, they can make the population grow fantastically, but obviously, like risky if you have one family. And you're gonna put all your potatoes in one basket, presumably. Yeah, there is a problem. Yeah. I mean, I don't know where in Norway and Sweden were quite poor until relatively recently, what they were trying was fine, straight. Like, I mean, like 1900. I mean, I suppose probably, by the late 19th century, there's quite I'd big civic life though.

Lars Doucet 25:02

Well, I think there was also like, there are some historic land reform around the turn of the century that I think had a lot to do with it because what's really funny is if you read Norwegian folk tales, you can kind of get like the picture of it from like 1800s and region folktales that they kind of end like this. And I'm mixing two of them together here, but this is not really all that exaggerated. And then the young ash lad killed the evil landowning troll cut off his head went home with all his gold and silver and using it paid off most of his debts.

Ed West 25:35

That seems that seems left coded to me.

Lars Doucet 25:39

But it's like it's like literally like that, like someone's like you're expecting like lived happily ever after. And like the punchline is paid off most of his debts. And then like these evil trolls are often like, specifically landowners, like over and over again, which is like really weird from a modern perspective, but kind of telling from like, what the peasants were, like writing stories to each other about.

Ed West 25:57

Yeah, it must be a tough life I went to I went to Denmark as well this year, the Balkan, very nice, very, it's just a kind of home the home the whole model was basically compromise and reasonable. And I think it room where they took things out is called about the compromiser industry. And there's all signs and it's all about, that's just, you know, let's just make a reasonable kind of like model, it's everything is just avoid unnecessarily Stupid, stupid conflict. And

Lars Doucet 26:26

I think I think it helps when you have just less people, you know what I mean? And, um, we do, we do have our conflicts and I do think like, I as a Norwegian and a Texan. I think it's hilarious when my like, Lefty American friends like really fetishize Norway, because there's a lot of things that get wrong about it. Like, I mean, my just be that all my family is from kind of a more rural area of Norway. But like, a lot of my Norwegian family is a lot more right wing than I think any of my lefty American friends, like, have an understanding is even possible in Norway. You know,

Ed West 27:00

that's the general rule, though, isn't it? I mean, Europe is much more right wing in America in actually most Yeah. You know, like, Holland has its bible belt. And I mean, France is very, pretty, quite xenophobic, basically, you know, quite a low trust society. I mean, Americans are much more evangelically progressive. I mean, not on economics, but you know, on social issues. So we Norway's still quite religious, isn't it compared from

Lars Doucet 27:22

a well, it's weird. It's like it was a theocracy on paper until quite recently, you know, with the well, yeah, I mean, still, literally, you know, we got the Queen, who's the head of the Church of England, like, I mean, we disestablished the church kind of like a couple years ago. But like, so Norway is really interesting. And I think it's a really good example of the difference between the American and the European approach to religion. So like, there's the state Lutheran Church, and, but what's funny about it is like most of the country are functionally atheist, right? Or agnostic, or, you know, into horoscopes and whatnot. Yeah, but you've got this really big state church that was like an organ of the government until, like, five seconds ago, you know, we're like, there was like a cabinet minister, who's like the Minister of school and church, you know, that's the same department for some reason. Not anymore. But. And then in America, at the same time, you've got actually like, with that perspective, coming from Norway, like American separation of church and state is actually pretty separated. But what's not so separated over here is church and culture. And that's what people who really are upset about like religious culture actually want. And so in Europe, you don't I mean, in Norway, especially like until, like, even now, I would say you still don't have good separation of church and state, like people didn't even use to have separate birth certificates used to just have a baptismal record. And if you're a Jew, I guess things just were awkward. You know? And, you know, and so like, in America, you have this good separation of church and state, but like, the religious culture is just like, permeates in the religious places. And there's no escaping that was in Norway. It's like, here's the official religion, and everyone is kind of assumed to belong to it, but nobody believes it. You know, it's weird. Yeah.

Ed West 29:05

I don't see factors might be like tangentially linked, there surely isn't. I mean, the fact that state religion probably does actually decrease I

Lars Doucet 29:11

don't think they're tangentially linked. I think it's extremely causal and strong.

Ed West 29:15

I mean, America is just a place of competitive religious sects. And that makes those religious sects stronger in more than one in England. It's just it's, you know, Church of England is a state run bureaucracy and like a lot of state run bureaucracies, is incredibly sluggish and slow and actually destroys the thing. The only place in England strangely, where you have that kind of American style separation is, if you go to secular weddings, you can't they go, like, you know, they say what priming and they go through it, but and I've been at these or they say, and I read it, I read a poem by Elizabeth round and say on a minute, what does it say? Oh, yeah, the second verse, it says angels so you can't say that you can't mention like, you can't and the Pomocy you can't mentioned heaven, like literally any words, even remotely related to religion won't read that poem. They say there's a state this is a state thing. That's the only place where you have to kind of, you know that kind of I mean, otherwise I think it's just I think it's just kind of like awkwardness is, I went to I actually went to a lovely stave church in Norway's gorgeous out. It was a classic scanning story because it was, it was been burned down by like this guy who like

Speaker 4 30:17

recorded on something. Yeah,

Ed West 30:22

that whole thing No way. I mean it's really bad music I mean it's what has been the murderer

Lars Doucet 30:26

and Nazi and maybe was either what were the Nazis

Ed West 30:30

though it's kind of like yeah kind of Viking

Lars Doucet 30:35

murder someone and I can't remember if he's the one who Yeah, Varga he's real bad. And then he also I can't remember if he's the one who was also a cannibal or if that was someone else anyway, it's problem.

Ed West 30:46

I think there's a whole like, slew of them for a while I remember that it was a kind of it was a very 90s moral panic. And since then we don't really get it seems, but they rebuild the church exactly how it was. It's absolutely gorgeous. You know, there's no, there's no even like nails or anything. It's all everything's just fits into pieces. At the end,

Lars Doucet 31:05

it's kind of it's kind of it's kind of anticipating Lego, you know,

Ed West 31:08

but it's I mean, yeah. I mean, maybe maybe that is maybe it

Lars Doucet 31:13

was so cool. But the stave churches is that one of the reasons you have these ancient wooden churches that have persisted so long until some black metal a*****e brings it down? is I think the argument is that Norway so far north, you don't have the problem with bugs that you have in other climates. And so you're able to have a Yeah, so you're able to have like, wood things that just like last way longer, but we'll see if, you know, with climate change that that holds up.

Ed West 31:40

Yeah, I don't know, I didn't ever thought about that. I just assumed because I didn't have

Lars Doucet 31:45

like, we're just better carpenters and everyone else, that's just the secret.

Ed West 31:52

That's how you built the wrong boats that were able to, you know, cross the North Sea and attacking. And yeah, you get a

Lars Doucet 31:57

cop and the weird thing. And I would like your thought on this, the weird thing in Norway that my wife detected immediately she's American, is she's like, your friends and like your cousins will introduce themselves. They're like, I'm a carpenter. And there's like, not a hint of shame in their voice. Right? Whereas like, even in America, someone who wasn't ashamed of being a carpenter, it's like, there'll be a little bit of like, I'm a lower class than you. Right. And that was like, the really crazy thing that she noticed when she was visiting was just like, how blue collar? I mean, I have like friends who are like, manual laborers who are doing better than I am. Because they're in Norway and Norwegian, you know, and I think that's one of the biggest contrast between Norwegian culture and Americans but

Ed West 32:38

that's a Scandinavian thing, isn't it? I think I mean, surely competence is all right. I mean, that's that's pretty prestigious. Good enough for JC Yeah, I found I found that when I went to a Swedish wedding, it was kind of like you meet people and say, Yeah, I drive a tram or I yeah, that kind of jobs, which I guess it's because in Scandinavia, they're probably paid quite well. Yeah. I mean, I think a lot of the time, the prestige is debate over here about sort of like getting, you know, like, dishes, how do we get like carers and people like that to be more prestigious as a job so that we would want to do it? And I think a lot of it just follows the money we have something's paid well, and it's status normally, I think, because, you know, if I collected everyone's rubbish, and I was paid 200 grand, I would be high status. I don't care. I mean, how much I've gotten.

Lars Doucet 33:25

I mean, your, your history with the Elizabethan era proves that right? Like actors used to be low class, and now they're superstars because we just pay him a lot, right?

Ed West 33:33

Yeah, that's the lowest of the low there was sort of levels of this, you know, there's consider the same as prostitutes, basically. And and I think there were bands in France from being involved in any politics because they were just considered sort of just deviant subversives. I mean, I gotta admit, I think that's the proceeds that are pretty sensible. I did. Like when's the last time an actor opened their mouth? And you thought that was an interesting? Well?

Lars Doucet 34:01

Yeah, well, that's hilarious. Yeah. So so so so so anti celebrities and politics is your take? I take it.

Ed West 34:10

Yeah. I except the occasional one in 100. Who agrees with me? Yeah, exactly.

Will Jarvis 34:15

It speaks speaking about that about politics. What is going on to the UK? Why have the Tories been in power for so long? Is labour just completely incompetent? What's going on there?

Ed West 34:26

Well, we had that was just a weird, like combination of unlikely events. Really, that stopped late, what's the labor law since 2010, but they've been around for ages. So the Tories had a coalition with the Lib Dems who I don't even know how to describe the Lib Dems because they're not really anything that kind of center left, but they're kind of kooky center, left and many then what happened was that there was a kind of series of events that there was actually a by election that started because there'd been a fight in the bar of the House of Commons where like a very drunk Scottish MP punk Come on. This is how it also acids and delta, because there was a byelection involved in that by elections when like an MPS to be recalled, and a new MP voted in between elections, that head of the Labour Party Geigle Ed Miliband, who was a bit of a like a dweeby. Kind of like the guy who was good at you know, like ran the company. He was top of the computer club at school very, like very nerdy kind of laughter a little bit heart in the right place. But he changed the the membership rules as a result of that violation. Remember how and so it basically you know, from being like 30 pounds a year to join, the Labour Party went down to three pounds a year, he wanted to encourage like a wider selection of people to join the Labour Party, what it actually meant was massive like entry ism to the Labour Party from like, the radical left. And so they ended up the new and then all the all the constituent the MPs had their vote in them. So what they do is, the MPs in Parliament will vote to have a selection of of candidates for leadership to be sent to the members. And then so they had lots of MPs said, Well, you know, we want to give the the members like, a wide selection of parties. So as well as the three like mainstream candidates will, will vote for a fourth one who's like the most extreme left wing MP, we have Jeremy Corbyn, who have been like a kind of cranky left wing flight for years and always voted against his own party. Like, I didn't I mean, there's no one really comparable in American politics, like he's committed, he's not Bernie Sanders, because he's much he's much more leftist and Bernie Sanders. And anyway, so went to the party and by the standard policy is completely taken over by like really like radical teachers from London and like, Corbin wins an overwhelming majority. And then in today's point, that kind of long story is Corbin takes over the labour go way to the left, lose a lot this book, but the complicated thing is now the Tories have to they have to announce the referendum result result, they have to announce a referendum because of their own challenge from their own right wing party to them. So they have to have this referendum. And normally, like most of Tory MPs are pro remain and all of labour and liberal Democrats are proven except a hardcore of leftist Labour Party members who are also the anti EU but for like leftist reasons, because they want nationalization, they use upset. So Jeremy Corbyn, who's basically a secret Brexit here. So he's a prominent guy in the red. So that causes a referendum to be lost by Romaine because he's basically working. I mean, I'm almost certain he voted leave. And his Chancellor, John McDonnell, who's to turn up at these May Day parade next to these like banners of Stalin and Mao, I mean, like the National Health, he was gonna be in charge the British economy, it was like, it was comical. So they so they basically the referendum was basically lost because of that. And that and the Tories. Most of the Tories basically wants to have this referendum because they wanted to sort of like get the issue done, but didn't actually want to leave the EU. And now they found that they had to leave the EU. And a lot of the Tory leadership basically left the party or left the cabinet, because they didn't want to be part of it. So what you had left was it was a very reduced or reduced kind of thing. So long story short, so you know, three years later, there's kind of basically nothing gets done. But they can't do Brexit, there's no one gonna vote on the right Brexit and eventually, MP like the another be another prime minister, we've had David Cameron, he had to leave because he lost Brexit, Theresa May, she had to leave because she couldn't get the Brexit done. And so there's I'm Boris Johnson turns up, he had been very popular with the sort of party very charismatic guy, but the problem is, he's a journalist, and he's really like, messy, like, his whole personal life is no one actually knows how many children he's got as the funny thing. I mean, literally, he's either it'd be 20 I don't know, even though he knows he's got he's had three marriages, at least two illegitimate children, which have sort of been covered up he was he's he's like a compulsive womanizer, which was kind of like he was a mayor of London's it's tolerated. It's all kind of fun, because he's quite a very liberal conservative and a kind of good time guy, and, you know, just wants to be jolly. And he's always quoting the classics, and everyone found this amusing. And he was and you know, even though he was in charge of Brexit, and that made him very unpopular with a lot of his son of former sympathizers who felt he'd become sort of nationalistic, he wasn't really wasn't nothing like Trump. He was like, quite just the fun guy. And he said, Well, you know, and then finally, he came to in 2019, won a resounding general election victories of Brexit is basically sorted, we'll get ill. And he pointed, he wants to be the kind of like jolly leader, so why now? Everything's gonna be brilliant. And so, you know, January the first 2020, he does his tweet saying thumbs up, then this is going to be a fantastic year for Britain and you know, like, nothing can go wrong. And then like, four months later, he's in intensive care, almost dying of COVID. And, you know, the whole economy has been completely ripped to pieces by the disease, which is just Come out. I mean, but the funniest thing is that he kind of reigned in complete chaos. So the funniest story is he had to write this Shakespeare biography, because he had to pay off his second divorce. Because during his life while married to the second wife, he had started, like an affair with a younger woman who worked in government, who's now married to. And by the time he he's like, the perfect symbol of like our generation, because in a sense, when he came to Stanford, she was literally homeless, he'd been kicked out his wife, he was living the living with his girlfriend at her place, and Campbell he'd ever stand up blazing round with her, which became a story what they think like, it's the neighbors that reported that screaming and you know, there's been wind thrown it just like this guy is so chaotic. He is really, you know, it's very slapdash. So while all these like the the cobra, who are the British Security Council, they deal with imminent threats. And so January 2020, is saying, like, there's this kind of disease in China, we're gonna, we're gonna have these meetings, like we're gonna have a meeting again, like, and it was fine, fine, just so you know, I've got to finish the bloody biography. So he failed to apparently turn up to five of these meetings. You know, and I think we should you know, you should take this seriously, sir. This is like looking quite serious. nothing done. So then he just kind of hesitated. hesitate, said today said, you know, I think the the history of the COVID response will be debated forever. But I mean, I think he was very slow. And by the time we locked down, we had to lock down a long time because it was already kind of riddled to thing and he was going around, hugging everyone. And then he gets himself. And he's like, quite an overweight guy. So he almost dies, which a lot of people deny, you know, this big conspiracy theory never had COVID Because a lot of people have just been driven mental where politics and think it's all fake. So he survives comes out again, by which time I think he's he's impregnated his wife yet again. Now, that number seven or eight chart showed in more than one sense. But then he was brought down by this like, incredibly stupid scandal, because while they were all you know, everyone has been ordered to lock down and not means anyone. They're all sort of having like regular policies at Downing Street. And this eventually came out a year later. I mean, I think it was kind of the stupidest. It was like the least probably bad thing he didn't did. It was kind of in the Al Capone getting done for tax because it's just stupid reason. I mean, some of these parties wouldn't, they weren't, they were like drinks in the office. But suddenly, she's something bring like a beer. So one of his colleagues was classified as a party. And so everyone got scanned. And I think there's a real sense of, I mean, I'm sure the same mistakes that people there's a kind of very puritanical thing of like, I've got to stop other people, having parties or having fun even situation where it wasn't particularly risky, because people, I guess, naturally attach that moral weight to like a virus I like if you're having a good time, if you're doing something that's a bit seedy, or squalid, or even just fun, and I'm not involved, like, the disease is more likely to spread then than otherwise. And that was, you know, that that scandal just kind of rolled on and on and on until, until basically all the policy deserved. And I mean, the I mean, I think that the choice with things I think the lowest point was so he's it's a kind of classic story. And like Henry the eighth is the obvious parallel, Henry has left his older sensible wife or a younger woman he was attracted to, and it's kind of basically led to Chaos within the regime and, and this younger wife was opposed by his chief minister was Cromwell and the case only eight and as Dominic Cummings, who has since resigning has become a very strong critic of Boris and the entire sort of British government and how the establishment he despises carry, obviously, to his Boris, his wife

been this kind of thing, he's under the influence of the younger wife. And one of the lowest points was during the evacuation of Afghanistan, Boris personally ordered for the British Army and the RAF to evacuate this bunch of dogs, which was, and that was point, he left like this for like the Afghans there, and they evacuated all these dogs because Carrie was like friends or like sympathetic to this, this animal charity, which was like saving on the street. And it was just all these footage of like, these dogs being just like unit risking the lives of like servicemen. It was this thing, it's like a real, that typically British sentimentality about everything I use, I must say that Palmerston, like Churchill, like turning in their graves think that our country has come right, to Kabul dog Airlift. And to me that was the lowest point of everything. And so I think there is just general like dysfunction in the government wish like nothing on some levels that ideological and that they can't kind of get conservative ideas implemented against that resistance from you know, like, obviously, that the the most departments tend to be because the university educated dominates tend to be like more left wing, and there's a lot of resistance in civil service, but a lot of it is just kind of basically functional, you know, then they're just not very effective at running a lot of things with the exception of Michael Gove. I mean, Dominic Cummings, who was Like, he writes, he writes these like 9000 word blog posts and was always quoting for the entire Prussian generals and stuff. He does famous quotes about British government that and how nothing works. And he, he said, you know, everyone thinks that if they go deep inside the government, there'll be like a place like a door where behind there is like loads of ninjas and like this lack of lack of bonding, and everything actually works. And he said, well, there are no ninjas. There is no door and matching. That's just like the best quote, I always see it repeated by people, that actually there isn't there aren't really clever people deep down running the country. It's all just kind of incompetence all the way down. So yeah, so now this dress has taken over. And you know, it's just happened to kind of, you know, take over just as this kind of massive crisis. I mean, the one thing Boris had, I think, has been very good on as Ukraine. So I mean, I mean, I don't, you know, I don't what historians will say about our future, but he that the policy very, very early on, he was he was very supportive, as it was kind of clear that Russia was about to attack. You know, I think, you know, I generally think he should be made ambassadors. Yeah, I think you'd be amazing. He'd love it there and they'd love him there. He's like, genuinely loved and you know, it's a country full of very attractive blonde women he'll, I'm sure he's in absolute love it. But yeah, I guess that mean that his legacy is basically that's going to be the country where he's, he's loved, just like, you know, Tony Blair's loved in Kosovo. But kind of like, hated it. Yeah.

Lars Doucet 46:32

We covered a lot of territory today. You know, one thing to tie two threads together is it's funny that you kind of like mentioned, like, Norway is doing great, you know, what's not doing great is if you want to afford a house in Oslo, because no one can afford it. And it's just like, going, it's not getting better anytime soon, either. You know, so everything else seems to be going okay. But like, just man, like I see the like the prices, people are paying for rent.

Ed West 46:58

Can they not feel that off at all? I mean, that seems I mean, I know that's it's harder said easier said than done. Yeah. There's a big well,

Lars Doucet 47:05

like Norway has, like, is more constrained geographically than Sweden. Sweden's. And that is, I mean, fuels, isn't it? Right. And mountains right. Now, the but it's also I mean, it's nimbyism. It's, you know, people, you know, it's all the land policy stuff. Right. You know, I mean, I've dropped the word Giorgio isms, you know, where I come from, you know, which is something I'm trying to kind of push back in Norway. But, you know,

Ed West 47:32

in Northern Ireland, the Danes are building an island in Copenhagen.

Lars Doucet 47:36

Are they just to get around? Yeah, I mean, I mean, going and going going full Dutch, you know, seems seems like not a bad approach. You know, but I think I think, you know, what, what do you think of gimpy ism, and Georgia ism and all these other like things to kind of like make Land Policy and housing kind of the center of our politics. I don't remember housing being something anyone ever used to talk about? And it seems like every real thing anyone ever talks about now?

Ed West 48:00

It's a I mean, it's, it used to be a sort of dinner party thing. I remember people, I mean, like people a bit older me talk about, you know, house prices and stuff. And that just sort of stopped. I see that one day, no one ever talks. It's, like, depressing, like, why we thought about it, it's just like, we're never gonna write. It just became be unaffordable. I mean, I'm sympathetic to the NBS. I mean, like, I'm like, a much more. I'm like, a bright yimby It's such a thing. Yeah. My UMB friends who are you know, are very real, like very pro. Pretty much freedom of movement between like loads of open borders. I think in Britain, we got like a million people come in, you have to, you know, I think there's only so much you can do if you have that much immigration, because your land prices are still gonna go up. I mean, it seems to me the demand supply issue. I mean, I do think the style of architecture is big difference, although, I mean, that's not going to stop. I mean, I think nimbyism is just everyone's default, right, everyone's going to be NIMBY. And whether there's like a like a concrete monstrosity next door to you, or like a beautiful Moorish Palace, whatever you're gonna, most people will oppose it. But I think people do have are given, like greater moral support by the fact that they know that. Like, in my experience, whenever there's been new buildings, and new builds in my area, they've always been hideous, and like, the more hideous the more likely they're gonna win an architect architecture award. I mean, that's just like, if I were universal,

Lars Doucet 49:21

I went to architecture school. I know exactly what you're talking about. Like, there's no I

Ed West 49:25

met someone from I was at dinner party with someone who's a very nice woman from Canada. She's an architect and I made the joke about like, you know, like an architecture would be like a negative thing, though. And another friend, you know, just said like, then, you know, then you realize like, everything's right. I mean, it goes that saying if something if somebody wins an architecture award like that's, that's nightmarish Yeah. I don't know. The Germans have like quite a good idea and that's so it's like a local so in a lot of small towns and this is like the same everywhere. There are like small towns which are very desirable whether the local, like wage isn't very high like one malls A classic example Foreman's wearing a nice land of misty mountains, pinging off and all that. But corner was actually very poor. It's the poorest county in England. And so lots of people come from London and buy a property and boom, I know. And obviously, if you're local was like, I can't afford anything, I can't afford a home. But the Germans have a system where like a certain amount of money, they have new builds built every year, that's from a city but like a certain percentage can only be bought by local people. I don't know how you measure that. It's like whether you're born there or like live 15 years, but that'd be some local attachment. And that way you say to people, well, okay, we're building the houses, which you might not like, but like, only, you know, your children have a prime chance to buy these. And as the way I see, I mean, it's only fair, London salaries are much bigger, it's only fair that London has to pay more than the local people. And also, I mean, the main like policy, the most important thing and policy wise, is that the things get built, right. I mean, right. However, you both kind of secondary. I mean, I'm kind of less I mean, I you know, social housing is another issue, but we Britain already has a very high level social housing compared to the rest of the rest of I think we like by far the the highest in the Western world. But no, I find that frustrating thing is the kind of the constant grumbles like, oh, we must stop these these flats from being built because they're not affordable. It's like yeah, but just because you block of flats, every single building, it's affordable. It's like basic, like supply and demand. No one seems to Yeah, it's like very few MPs who will say, you know, all their constituents want to like you want to stop this new building. And some of them have been like ridiculous is one in London receipt. And they they stopped these buildings in central London. No, is a barn in the outskirts again, because there was a gasworks. There's like this is literally gas. Right? It's not, it's not the seventh one as well. I think we can you can live with the gasworks been

Lars Doucet 51:52

adapted. Yeah. It's the historic parking lot kind of issue, right?

Ed West 51:56

I mean, there isn't there are quite a serious link thing. parking spaces and fertility, like parking is literally destroying Western civilization for sure. More parking spaces. You have fewer children. Yeah. And that's why we all die out because of just so people can drive to the shops. Right? Yeah. It's frustrating. Yeah.

Will Jarvis 52:16

Very frustrating. Well, Op. Ed, we've got to let you go. Now. Thank you. Thank you so much for taking the time to come on. Really appreciate it. Learn to time. Thanks again. Where can people find you? Where should we send them?

Ed West 52:30

Go to the sub stat just type in wrong side of history at West sub stat that should get you I don't actually know the exact jest but that will get you there. But yeah, definitely go to my sub stack and subscribe for free just to start with and then you can pay later.

Will Jarvis 52:43

Yeah, or just pay up prime. Pay for a year just to Yeah, put on that credit card. Awesome. Well, thanks, Ed.

Ed West 52:50

All right. Thanks so much. Appreciate it. Take care.

William Jarvis 52:56

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

David’s background.0:05 What’s the right kind of partnership?2:44 The trade-off between speed of building infrastructure and the negative externalities.8:44 Inefficiencies in the environmental process.10:16 Public engagement through digital channels and digital channels.15:11 Broadband gaps in the Us.17:54 When will autonomous vehicles replace human drivers?23:46 Autonomy as a wind problem.29:19 Policy policy and policy politics.32:51Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:37

Well, David, how are you doing this evening?

Unknown Speaker 0:39

i Well, I'm doing very well. Thanks.

Will Jarvis 0:40

How are you? Doing great doing great. David, thanks so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Unknown Speaker 0:50

Absolutely. So I've really been fascinated since I was a kid really on the sort of the difference between sectors. So having, having experienced both living in a small town and a big city, then started as I started to started to study and learn about the kind of the ways that the economy worked really fascinated by the parts that move really fast, sort of seeing the rate of technological change isn't the things that seemed to be kind of just to take for granted or that are slow and always there. And that's, that's probably been the most the closest thing to sort of a consistent thread through my career starting and working in entrepreneurship in a in a telecom startup, but right out of college, and then then going into the federal government and seeing the very much more bureaucratic, slower moving side of side of things. And kind of along with that, I guess the you know, a big idea that sort of animated my career is really just thinking, what what can I learn from from one sector? What are the strengths and weaknesses? What levers exist in a given sector? And then, you know, how can I apply that to something else. And that's really meant that I've had the opportunity to switch from things as different as local governments, big corporations, you know, tech startups, and now currently in a, in a company that is investing in the future of infrastructure, sidewalk infrastructure partners, and, you know, in through all through all of that, I've really just been been fascinated by how to apply the the technological innovations that happen to problems that really matter from transportation to energy sustainability, and so forth. And I feel just privileged to have had that opportunity to look at that look at the problems from from a variety of different perspectives.

Will Jarvis 2:23

I love that. I love that. I'm curious, having seen all these problems from these different perspectives? Who do you think is most effective at solving some of these big infrastructure challenges? I mean, obviously, there's some level which which government has to be involved with big infrastructure projects. But and there are capital constraints for startups, you know, you can only get so much capital to work on big infrastructure. What's the correct kind of partnership? Is there a partnership model that works the best? Is it just government doing things? Is it something else?

Unknown Speaker 2:54

Yeah, it's there's there's certainly no silver bullet. But I think what's really clear is just the magnitude of the problem. We see it all all over the place in terms of infrastructure that it hasn't, it hasn't even really, in some cases just even been maintained to the level that it was initially built, let alone evolved to deal with the sort of the requirements of of the 21st century. But to your question, I think it really requires partnership between the public and private sectors that can take a lot of different different forms. But at its core infrastructure really is all of those things that our modern life depends on whether it's the clean water that comes out of the tap, when we turn it on the fact that we shouldn't have to worry about our whether our electricity is, is functioning. It so that really means that it's it's something where government has it has a huge role to play. And government in many cases is setting the stage for infrastructure. If you think about where infrastructure is located, it's typically in public rights of way, it's in the shared spaces, it's underneath our cities, it's connecting our cities, it's in the air, it's all sorts of all sorts of places. But I think the the tricky part comes when you figure out how how, how do you even How do you even address a problem where there may be different maybe different definitions of what the problem is, people have different perspectives. There are a lot of different business models, there's technology that that evolves very fast, but the kind of standard ethos of move fast and break things can be pretty dangerous when applied to infrastructure, particularly anything about the critical systems, whether it's the cybersecurity of our of our electric grid, or the you know the quality of our air in our in our drinking water. But I think the the things that give me hope is seeing the entrepreneurs that that focus on this and know that it is it's a difficult problem and it's it's not as simple as publishing something into an app store and getting kind of some viral traction around it. It really requires the public sectors buy in. And I think that there's there's a willingness in a lot of places to look for new ideas given that the status quo is really not working for anyone but the you know, a lot of the a lot of the devils in the details about how do you get that contract, how do you bring private capital into into a problem like this? How do you make sure that there's a balance of risk and reward? So all those things I think are there's a lot of people focusing on it. And I've been in the sector for quite a while. And it's really only in the past few years that you've seen the this sort of level of excitement. Some of it's driven by the public sector, the fact that there's been some action on infrastructure, investing on climate and things like that. But a lot of it also is just the realization on the on the private sector side that this is a huge market opportunity. And it's something that if you can, if you can solve a problem that affects literally everyone in the world, that's about as kind of a big a tam, as he as you can imagine. The the tricky part, of course, is, is aligning timeframes, as I alluded to, and the difference between the fast pace typically of the technology industry, and they're slower, slower relative pace of, of government and policy in particular. But if you can find those places where you can align interests, and really, and really move the needle, it's the the opportunities are tremendous.

Will Jarvis 5:50

It definitely definitely feels like there are huge opportunities, especially in infrastructure now. Is it your sense that things have gotten much worse at the infrastructure level in America over the last, let's say, 50 years? It definitely only seems that way with just with the power grid, and Texas and California, you know, constantly going down. You know, we think about the water crisis in Flint, Michigan, you know, there's countless examples where, you know, the roads seem to be beat up, just like physical infrastructure, like we have not been able to maintain it not really been able to, to build new things. In the physical world. What do you think has gone wrong there? And am I right, in assuming that it just seems to work less well than it did in the recent past?

Unknown Speaker 6:30

Yeah, I think I think you're right. And I think that there's at least there are two big factors that come to mind immediately for this. One is that there's a big difference between building infrastructure should of having having an exciting project launch, have a ribbon cutting, have everyone use something for the first time, that typically will get a lot of attention, and in many cases attract capital, versus the critical work of maintaining it over the next 50 years, 100 years, in some cases, like 150 years. And that so that disconnect between building and maintenance is I think, at the heart of why you know why we look. And so I live in New York City and for example, we have, we have the the most robust comprehensive public transit infrastructure anywhere in the country, in part because it's the oldest but it also means that we have a legacy of deferred maintenance, we have to deal with, we have things that were designed in many cases say before air conditioning was invented, or let alone before Wi Fi and cell service was invented, and all those things that need to be worked into the system. So it's both it's about it's both about maintaining, maintaining versus building. But also sort of second piece is just how how much more rapidly technology has been evolving over the past few decades. And I think that's the way that's changed the way we use infrastructure change what we expect from infrastructure, and even just thinking about the past two to three years with with COVID. And the realization that I think, had been had been there all along. But that sort of now no one could ignore it, just how much we how much we rely on digital infrastructure, particularly connectivity. So now it's a pretty common placing that would that that connectivity is a form of infrastructure and that broadband is is some form of a public, a public good, and that if you don't have access to the internet, it's really hard to participate fully in society, whether an economic opportunities or in access to medicine or access to education. But I think it's that that change was already underway. And it's in some cases, it takes a it takes a crisis for people to really reckon with just how severe it is. And for things to move up to the top of the agenda. So I think there's, there's a mix of that this is a problem that has been 100 years in the making, but also that it's, it's a problem that has accelerated and importance just given the increasing demands that we put on infrastructure, particularly, to be able to do all of the new technologically driven applications that are part of daily life. Now.

Will Jarvis 8:45

That makes sense. It makes sense. I want to come back to broadband in a little bit. But I do want to ask question here at you're sitting in New York City, and we're talking about infrastructure, so I can't help but think of Robert Moses, and you know, kind of Bobo's and you know, bulldozing, you know, neighborhoods to build roads, and all this this crazy stuff. You know, and this is something we see in the PRC right now, where they are able to do kind of infrastructure very, very quickly, by I guess, you know, maybe there's this like trade off between, you know, the speed at which you can build infrastructure, and then, you know, taking care of all the interest groups we have to worry about, have we gone too far on being unwilling to, you know, displace buildings or things to build infrastructure? And are we too worried about, I guess, negative externalities at some point, but at this point, or should it? Are we not worried and we strike kind of an optimal balance at this point? Yeah, I

Unknown Speaker 9:44

think I think it's would be hard to find someone that would argue that we have an optimal balance right now because a lot of good projects are not happening and a lot of bad projects still still do happen. So I think the it's it's a tricky question, because we kind of like how infrastructure was built. built over centuries in the United States, our policies and our regulations were built over centuries, and they were built to address real problems. The challenge is that it's easier to kind of add new rules than to kind of start from first principles and think about is this the optimal optimal system. And in part, it has to do with the risk aversion that's sort of understandable in the in the public sector, when these are systems that people's lives in many cases depend on. But it also means that as you add one, one process on top of another process, there are inefficiencies that come about. And you know, the classic example is, if you think about in New York City, how it only took a few years to build the Empire State Building. And we're in the midst of a congestion pricing program that has also been going on for, for, you know, it was passed a few years ago, but it's been something that's been talked about for decades. And there's no actual there's not the same scale of physical infrastructure that's needed. But even so the process of environmental review the process of, of going through the many levels of government does add add years, in some cases, decades to projects. So I think there's, there's a need to rethink a lot of this, but it's not where I would disagree with some people who say that it's just a matter of making things move faster, is that there are reasons why why we need to make sure that our environment is protected, that people are protected, for example, you know, it's when we think about how fast things were built in the old in the old days, it's important to also remember that it was the workplace wasn't very safe, right. And so people would die in construction of skyscrapers and things like that, and take risks that we as a society are not willing to take any more under, you know, rightly so. So but I do think it's, I think it's that that balance is always a bit of attention. Some of it has to also do with how policy takes longer to change than technology does. And it has to do with a lot of reasons. There's not there's no Moore's Law of policy, policymakers or anything like that. And in some cases, as technology increases, even if it took the same amount of time to go through a cycle of evaluating something, figuring out what the right legislation or regulation should be enacting that, that cycle, even if it was the same as it now is, it was as it was 50 years ago, there are so many new business models, so many, so many new applications of technology, let alone the technology itself. That means that that cycle moves a lot faster. So I don't know if we will find the optimal balance ever. But I do think it's something that we should keep keep revisiting and and you're one of the one of the strengths of the US is that we have a diversity of different forms of government. One city may be very different from another city and how it governs itself, we have 50 states that are you know, some people have famously called laboratories of democracy. And I think using that to our to our advantage would be would be great. It'd be nice to be able to see what works and what doesn't, and then share best practices and see what works. I think the the flip side of that is it's challenging to do to scale something out across across the entire country, if each state has its own regulatory regime, and from certainly from a private sector perspective, lack of certainty is in many cases, a bigger barrier than regulation itself. It's, you know, companies can adjust to regulations. But what's harder to do is to sort of price in the uncertainty about what is, you know, is this business going to be allowed in state A versus state B? And does it need to take a totally different, totally different form?

Will Jarvis 13:07

Right, this is definitely a big challenge. I want to double click on something you mentioned there, the environmental review, we had on Eli the radio, I don't know if you know him, he's a scholar, CG, Utah State. And anyway, he talks a lot about and works on policy, he talks a lot about NEPA. And how NEPA has kind of paused a lot of regulation is paused a lot of building, because you have to undergo environmental review, for everything that can be delayed by interest groups that don't want to have new things built, you know, NIMBYs that can kind of, you know, essentially lobby the government or ask for more environmental reviews to kind of just, you know, extend the timelines that which things can get built on kind of indefinitely? How big of a problem you think NEPA is, is it something we should be worried about? And if so, what should we try and do about it? To kind of improve it, not them either?

Unknown Speaker 14:00

Yeah, I think part of it is is really about understanding what the true what the true risks are, and making sure that the burden is commensurate with those with those risks. And so there are there are prophecies where they're categorical exceptions for certain types, certain types of projects. But I think over time, as I mentioned earlier, the the general trend is to add add things in scope rather than rather than removed from from scope. So I think, some form of process of basically being able to, you know, and this is kind of making, making this up as I go, it's not a fully formed thought. But I think that the intention of if you look at every federal form, there's this paperwork reduction act thing, I don't know, I would be interested see how it if this actually has made an impact, but even when you're filling out a passport application or anything like that, it'll say this estimated burden to complete this is 20 minutes or something like that. There was a lot that required that and that probably created its own challenges in terms of added bureaucracy. But if there was extra kind of labeling for environmental review or something where it was clear to the pub Blood that this process adds two years to the timeline, or that's 10 years or something like that. I think it would spark some really healthy debate about what what level of scrutiny is optimal. Because even in many cases, there'll be maybe people that support a project in theory, but they want to, they want to make sure that it is fully vetted. But they don't necessarily realize that this is going to prevent the project from ever, ever, ever taking place. You know, it's not to say that would solve all the problems. And there certainly there is a sort of a general challenge around people not wanting, they want something to happen, but not not in their backyard, of course. But I but I do think that it's that having a little bit more transparency in the process would be helpful. I also think another another thing, potentially positive trend that I've seen recently is just broader public engagement through through using using digital channels, whether it's the kind of pivot to zoom hearings, and so forth in the pandemic, or collecting feedback electronically. Because the challenge from from a lot of the pretty good, like the local level, is if you're trying to build something, and you have you go to a public hearing, and there are 10, people who show up who are very angry and upset about the project that carries a lot of weight with the elected officials who are in the room, understandably, they see their constituents there. And they're, you know, the the supporters may be outnumbered 10 to one by by opponents. But sometimes that's not an actual reflection of the of the sentiment in the community. So making sure that everyone, not just people who have the time to attend those, you know, a public meeting at 6pm, or whatever, whatever the time may be. Having a broader set of input, in many cases can enable the local government to make informed decisions and say, you know, I know there are going to be some people that are not happy with this, anything you do in government there are people will be unhappy with. But the for the majority of the community, they will benefit from this, they want this, they understand it. And it'd be no put some put some of their sponsibility is on is on the government to make sure that that process exists, and that people are educated. Some of it is also on the the person who's trying to build to make sure that they're clearly communicating it, because these are complex topics. And people understandably don't want to spend hours getting up to speed on the ins and outs of a particular type of infrastructure and what the real risks are, and all and everything like that. So having making sure that there's the kind of clear communication in in a format that people that is accessible to everyone in the community, I think could could help remove some of the some of the opposition that can come from it from almost a reflexive opposition to something new coming to the coming to the community.

Will Jarvis 17:32

Makes sense, marketing and messaging really matter when it comes to you know, putting the product on the table? Absolutely. Makes sense. Makes sense. I want to talk about broadband a little bit now. How would you grade America and our access, like public access to broadband at this point? Like how much coverage do we have? How well do we do? How poorly do we do at this point?

Unknown Speaker 17:54

There's there's a few ways of looking looking at that. So there are rankings of countries that for for decades have shown that the US is not in the in the top 10 In terms of internet speed, and things like that. And I think that is reflective of the fact that other other places have been able to deliver to a broader selection of their or of their population, faster speeds. So I think that that's one thing. But the other, the real challenge is that the data has been very inconsistent. So until recently, the FCC has essentially relied on self reported data from internet service providers with very coarse coarsely defined metrics. So really thinking about, if there is service available in one place in a in a block or in a in a region that that whole, that whole region is considered to be served. Even if it's really only one out of 25 people that service, there's also the difference between thinking about access as there being a possibility of connecting versus having that service. So there there are at least two very different broadband gaps in the US one, which gets gets a lot of attention. And it certainly is, is easy to visualize and understand is that there are people who live far from a city they live in rural areas where it's difficult to have that infrastructure to their house, right. So if they're only if they're only four houses in a five mile radius, sort of take an extreme example, the the economics for bringing fiber to each of those may or may not make sense. There are a number of programs that are making some progress around that it's typically fairly expensive, because just have the the economics involved of taking high fixed costs and splitting it over fewer people. But that's that's that's sort of one that's sort of one problem that, that there are programs to address. And there's there's some progress and there are also ways that the technologies include including fixed wireless access can can help address. There's another problem and that actually, in many cases is bigger in terms of the numbers, which is that of the people in the US who don't have broadband access at home. The majority of them are in cities and metropolitan area Is, which seems counterintuitive because the infrastructure is primarily in cities. But the both the infrastructure is not distributed equally around the city. So I'm in I'm in New York, I happen to have a choice of a few different internet service providers here. But if I lived a couple miles away, I might only have one. And if I lived in, in other parts of the city, I might have one, but that one choice doesn't have fiber. So very different levels of access even within, you know, one of the wealthiest cities in the world. And then you layer on to that the affordability challenge that there, there are people for whom a 60 $70 per month broadband subscription is prohibitively high. There have been programs to reduce the cost, there's the affordable connectivity program from from the federal government with the support of a number of internet service providers that have plans at $30 per month, and a subsidy that consensually make it free for for certain low income individuals. So those things, those things are still problems, there's, there's a number of programs to try to address it in part funded by all this recent federal legislation. But at the core of it requires not just not just ensuring that there's a fiber optic cable to each person's house, but also that they have the the ability and the tools. And by tools, I mean, not just the sort of financial capacity, but the devices, the digital literacy, the training in some cases, so that they're able to fully to fully take advantage of that, of that access. Another Another interesting statistic is that of the of the people who don't have sort of normal broadband access at home, the majority of them do have internet access, it comes through their incomes through their smartphone. And smartphone, as we all know, can accomplish a huge number of things and can provide a lot of benefits. But there's certain applications for example, writing an essay at home, if you're if you're if you're a middle school student, and you're trying to type it on your phone, it's a very, you're quite a disadvantage compared to someone who has a nice desktop with a big with a big screen and is composing their their essay there. So those sorts of subtle differences and of having a big impact on the on the benefits that accrue and making sure that more people have access is really key, in my view to true economic competitiveness across the across the country.

Will Jarvis 22:06

Makes sense? Makes sense. Are you bullish on technologies like Starlink, and 5g to solve some of the like problems with, you know, fiber, or like actually physically getting cables to people? That makes sense?

Unknown Speaker 22:18

Yeah, so I'm bullish in the sense that the more tools we have, the more different situations can be addressed. Where I'm less bullish is that any one of these technologies solves the problem on its own. So I think Starlink is a great example. Starlink means that in in places, like where my family lived in rural Colorado, where there was there was absolutely no internet access other than the dial up or a very expensive, very slow DSL connection, they can now for 100, or 200, ollars a month have high quality internet access. So that's the value of that shouldn't be understated. But it doesn't it doesn't replace the need for for fiber in a city, the sheer density of the number of people in place like New York City, or even a much smaller city means that it's far more economical to run fiber to each to each household, who then could have the ability to have much higher access speeds than you could ever get from from satellite and has to do with the kind of physics of light versus radio waves, what you can get what you would have glass fiber can carry versus bandwidth versus spectrum that has to be shared with all that with all the users between here and the satellite. So there's some sort of physics reasons behind a lot of that. But it is it's great that that innovation is happening things like you know that the new iPhone can send distress messages over satellite, if you're, you know, hiking in the middle of nowhere and you get lost, you can contact emergency responders through your phone, even if there's no signal. Those types of things are adding new connectivity options. But again, they're not they're not solving the problem, the kind of core problem on their own.

Will Jarvis 23:46

Make sense? Make sense? Going off of that. This is related. It's all what timelines, do you think we'll see autonomous vehicles make up the majority of vehicles on the road? You know, connectivity is an issue with making this happen. But but you know, is it 10 years away? Is it 20 years away? What's your sense of that?

Unknown Speaker 24:05

Yeah, I mean, the the kind of stock answer I'm tempted to give is 10 years away, but 10 years away is always been how far like if I can think back, you know, at least at least 1015 years that it was 10 years away. And I think we're learning different things, right, we're learning that that there's a difference between autonomous vehicles that can operate in 99% of situations and autonomous vehicles that can replace a human it's quite different because they're just the levels of reliability that we truly need to be able to say go to sleep in a car or to not you know, not have your hands on the wheel or to be able to go in the in an icy road at you know, with with fog. In an unpaved road. There's so many situations that humans can kind of intuitively deal with try and understand if it's safe to keep keep moving. That a even the best AV systems now without without a bunch of support in terms of a variety of sensors, mapping and things like that are going to run into ran into problems. So I think it's, in some sense, the full like full adoption, where most of the cars that we see on the road, that their abs I think is still is still a ways away at its heart, I hesitate to put a specific number on it. But I think that that little bit misses a bigger point, which is that autonomy is happening now. But it's happening in particular use cases. So I don't I don't think about autonomy as when is every is every car going to be naughty and not have a driver in it? But more when can we? When can we get the benefits of it to a at scale. And so I think things like cargo, I think shuttles I think domino freight and sort of deliveries, there are a number of applications where the where there's either a more defined unlimited set of places that the vehicle needs to be able to go or conditions or routes that could enable that to happen in the next few years. You know, of course, there are there are a number of campus scale autonomous shuttles, like ride share type programs, things like that, that are already that are already happening at scale. But I do think that some of some of the innovation is really going to be the the evolution of infrastructure along with the vehicles themselves. And that's actually one of the one of the things that that my company has been doing through our platform, Kevin, who is really thinking is really thinking about what intelligence is needed to in in the infrastructure to be able to accelerate that transition. So right now, if there were a laneway on a highway, it's the same way that you think about a carpool lane or high occupancy lane, that was optimized for autonomous vehicles, there are a number of vehicle systems that are either in in development or commercially available, that could that could operate with that with your hands off and your eyes off the off the road, because the road itself would be able to communicate that it was safe for the vehicle to have to proceed autonomously. So it's things like making sure that you have connectivity, you know, low latency, high bandwidth connectivity available everywhere. sensors to understand if there's obstructions, things like that. So then we're gonna see a lot of innovation on the infrastructure side, that is going to enable more specialized applications that will still be very, very big from thinking about what is what is the future public transportation look like? What is the way they are goods moves or supply chain type improvements. Autonomy is really should be, should be seen as not a single product, but a an approach. And I think over time, we'll realize that the same way that you think about like robotics and technology more and more broadly, that it's, it's less one vertical, and really a whole range of different of different problems that are being that are being solved by by a whole set of different technologies.

Will Jarvis 27:43

That's really cool. And so can you talk a little bit more about cat? Is it Kevin? Yes. Very cool. Very cool. And just FYI, I know you guys are working on effort in Michigan. I was just up in Detroit recently. So I'd love to hear more about that, like how that's progressing and what the plan is there.

Unknown Speaker 27:57

Yeah. So the plan, the plan in Michigan is to do a first of its kind, connected autonomous vehicle, or calve laneway, from Ann Arbor to Detroit. So essentially, it'd be a 40 mile stretch of the highway, that kind of as, as I was alluding to, would have the infrastructure needed to be sort of an earlier adopter of and providing sort of a better experience for autonomous vehicles. And that's a that's a partnership between K Ave and the state of Michigan. It's something that was announced a year or so ago. And it's been kind of progressing through all of the sort of the the development phase now. And the idea is that the in the future that as roads, as roads evolve, that being ready for autonomy, and having the that technology, it will be kind of a core piece of roads, if you think about how roads were built in the past they they've evolved a bit in terms of from everything about from dirt roads to our current interstate system. But they were they haven't really evolved is on the on the on the technology side and digitally. And we think that this is a really exciting time for that where innovations in 5g innovations in digital twins and simulation, things like that can be combined to add add new functionality to roads that can enable better, better use of them from a variety of a variety of different applications.

Will Jarvis 29:19

That's really cool. It's really cool. So it almost sounds like a vision where you've got a I like to think autonomy as a weird problem that a wind problem, it's like, you'd like you said humans are actually surprisingly reliable at some level, and that we can deal with all these different kinds of edge cases in different problems that pop up when we're doing something complicated like driving. But computers are less good at these edge cases. So if you can remove a lot of obstacles, a lot of edge cases, you could actually bring autonomy to bear faster and in a variety of situations. And that sounds like what you guys are working on with cabinet. Just really cool. Thanks. Absolutely. Going off of this I want to talk about public transit a little bit. A lot of people especially on you know, urbanist Twitter complain a lot about our lack of public transit in the US. And I like public transit, I would like more public transit. But I often wonder if the problem with America is that we're just kind of too spread apart, you know, with with low population density just makes it uneconomical to build a lot of public transit. You work in policy, and you're quite familiar with infrastructure? What's the deal with public transit in the US? Is it just kind of uneconomical to build? Or is there something else going on?

Unknown Speaker 30:30

Yeah, I think the answer is really both there are there are challenges that have to do with our density and our population pattern. So you have some some places that are dense, you also have commuting patterns that evolve you have the sort of the growth of suburbs and excerpts and people traveling long distances to, to their, between their home and their workplace. But I think what's important to remember too, is that the dat is not purely a function of geography, yes, we're a big country. But it's really policy choices that drove a lot of that, right. So the creation of the Interstate Highway System was it was a policy choice and a public sector led investment, for example. So I do think that there, it's fun, it's a bigger challenge to have everyone in the USB connected by public transportation that it would be in a, in a in a small country. So of course, you know, a place like Singapore has a has advantage in terms of it's a much more compact country or the whole country is essentially is essentially one city, it's fundamentally easier to deliver a comprehensive system, whether we're talking about transportation, or broadband, or energy or anything, and over a smaller area. But I don't think that that lets us off the hook completely. We have we have the ability to through policy, but also through technology and innovation, to rethink some of those patterns. The most, I think the most obvious of which to some degree is the the change in commuting patterns. So public transportation is in many cases used as a way for people to go from their home to their to their office, the reduction in commuting and a lot of places is, it's certainly been a double edged sword, it means that a lot of people don't have to spend as much time on public transportation or driving, because they're able to work from home at least a few days a week. Of course, it's not an option for all jobs. But it also the sort of that one of the downsides or challenges that is that public transit systems across the country have been struggling with reduced ridership, and that that having having less money coming in at the farebox means that they have to make up for that and other in other areas, whether it's increased government support, or in many cases cutting service. And the the challenge that I see with this is if you if you reduce service and say for example, trains go from it running every every 10 minutes to every 30 minutes, because of fewer people on the train, what ends up happening is that fewer people ride the train because no one wants to get to the get to the station and realize they just missed the train and have to wait half an hour. So then it's a little bit of a vicious cycle there. So that's, that's an example where there are there are policy drivers that are within within our control collectively as a country to think about, you know, how do we how do we prioritize what service should be available, where things should be subsidized, where they should not be subsidized. And technology is, I think, just one one lever among many of delivering, delivering new options. New technology, I think has the has the possibility to augment public transportation, if you think about autonomous shuttles that are able to bring people who are who don't live where the rail was, was built, and it's it's too expensive to extend in the rail. You can imagine a shuttle that brings people to public transportation. That's one possible outcome. Another possible outcome is that everyone has their own personal shuttle and traffic gets worse, because everyone is autonomously being brought everywhere. And the difference between those is not really about technology. It's about it's about policy. And that's what's exciting, but also really challenging about this as you think about what is the impact of a given technology going to be? It's a pretty complex interplay between policy, technology, business, politics, all of these things that ultimately, it's ultimately hard to predict, right. So it's, if you think about the before Uber launched, it was hard to really imagine how much of an impact it would have to go from yellow cabs in some cities to almost anywhere you you arrive, you pull out your phone and go from point A to point B, in a lot of places that increased increased access for people who don't have a car for whatever reason, it may or may have reduced ownership in some in some places. But otherwise, it increased traffic because there's more more cars on the road. So I think it's not it's not always apparent what a given technology is going to do. And that's why it's critical that there's the policymakers and the technologists and the investors and everyone in this in the sector, are are talking and are sharing data and perspectives and things like that. Because the one thing that's that is predictable is that the whatever people think technology is going to be impacted. technology's going to have, they're going to be off in some degree or other whether it's about how long it takes to happen or whether it's who are the first adopters whether it's how fast it skills with liquid it replaces all those things are really hard to predict even if you know the technology itself is going to work.

Will Jarvis 34:59

That's great. That's Great. David, I've got one bad last big question for you here. And it is if you had to pick one gap that America has in infrastructure, what is that biggest gap? And what would you do to try and fix it? If you you know, if you can talk to policymakers and private industry and tech, get everybody aligned, like what is that biggest gap?

Unknown Speaker 35:20

I think what's one area of interest, which we haven't really spoken much about that I that I do think is at the center of a lot of this is, is energy, because our energy system is going through a tremendous amount of stress of transition. If you think about everything from the global supply of natural gas, the disruption, the depression was caused by Russia's invasion of Ukraine, things like that have made energy prices, of course, a sort of a very important driver of everything from inflation to concerns about Europe being you know, too cold this winter, without durability to heat themselves, sort of shows that these things that we take for granted, can very quickly go from being something that is manageable to something that is, is in some cases, life threatening, or if people are not able to actually have the energy that needed to keep them keep them safe. But you know, at the same time, we have a big technological change happening, particularly around the shift from fossil fuels to electricity, particularly renewable electricity, those are very different things. The going, for example, if we if we change every gas powered vehicle in the country to an electric vehicle, there'd be some great impacts in terms of of emissions from the tailpipe, but we have to figure out how to get that, that get that electricity, how to deliver it, how to charge it, that's a ton of new infrastructure that's needed. And there's a lot of policy choices that are needed that will will affect where it's where the where that generation is built, how its distributed, how you keep the grid in balance, when you have people charging vehicles that when they get home from work at the same time that the sun is going down and things like that. It's I think it's also a tremendous opportunity for for innovation and for making, making the making the grid more resilient by by embracing the kind of dynamism that digital technology enables. So it's goes from being a pretty much a static system where the energy flows in one direction from the central power station to your home. And you are kind of a passive consumer of electricity, to something that's much more dynamic, where people may have a battery, say like a power wall at home, they may have a f150 lightning that they that they plug into their house, they have all kinds of things that are both users of but also either storage of or generation of electrons, that that is a tremendous transformation of one of the oldest most complex machines in the world, the power grid is is is mind boggling when you think about how much we how much we depend on it and how little most people see of it. And think of it and the fact that unlike basically any other commodity, it's it's an instantaneous commodity that can't be just kept in a tank, the way that you know the way that everything from from oil to corn and all other kinds of commodities that we rely on. So that that balance of supply and demand is is critical to get it right as the system as the system evolves, is there's a lot of an element of rebuilding the plane as it's in flight. That's that has to happen here where we can't, we can't turn off the system while we fix it right? This all had everything has to work and has to work 100% of the time or as close to close to that as possible, even as we face storms and disruptions and heat waves. And you know, the kind of near misses in California over the past over past month or so, I think are both a warning of how critical the problem is. But also, you know, I find a little I find a bit of optimism in that in things like the fact that when the California grid was nearing a point where there would be rolling blackouts, people voluntarily cut back their energy consumption. And you could look at it on a graph and see how quickly people responded and turned off things that they didn't need. And that actually prevented prevented things from things from from being much worse. We certainly believe that technology can make that much more of an automated process that people benefit from in participating. So we one of the one of the companies we've invested in ohmconnect is working with about 200,000 households in California, connected to their smart thermostats and being able to incentivize people for their when they're when they're able to, to choose to adjust their temperature or to turn off certain devices that they're not using. And that that I think kind of shifts the nature of what is a power plant, you know, because we think of virtual power plant is really a collection of individuals who have devices, they may have energy storage, they may have electric vehicles, and that kind of orchestration of what's being used and when and where enables a whole level of flexibility to this into one of the again one of the oldest most complex things that humans have created. And in terms of the power grid.

Will Jarvis 39:41

That's great. That's great. I I'm curious, you know, you work in policy, and I'm a big nuclear advocate and supposed to be this, this, the next kind of level of energy production for the world was gonna be nuclear power. We've kind of regulated ourselves out of building new plants at this point. Do we Do you have any hope that we will be able to kind of to build new nuclear plants again and kind of get around this kind of roadblock we've put there for ourselves because of, you know, some scary things that happen, you know, the last century, which were not as bad as they're kind of depicted in, like, you know, media portrayals and things like that, you know, Chernobyl was not as bad as you know, these dramatized television series we saw Long story short, we miss out on a lot of clean, cheap energy, because we were unwilling to build nuclear plants. Do you have any hope for the future there? Are you bullish on nuclear?

Unknown Speaker 40:32

It's tricky, because there's a lot of still a lot of fear around around nuclear. And some of it is sort of, as you described, that it's when things have gone wrong, it's been very dramatic. And it's been things that it's hard for people to wrap their head around the true risk and all of that the technology, of course, has evolved a lot since since the days of the last reactor constructions at scale. I do think it's, I do think there's, there's a high likelihood that there's innovation that ends up that ends up making a significant difference there. I don't know which countries are really gonna be the first to embrace it. I think that's something that's shifting a lot and in part due to the energy versus energy crises that I referenced. So there's been you know, prior to this year, a lot of decommissioning of older nuclear reactors in Western Europe and Japan and the US, kind of around around the world. That has not been has not been replaced by any new nuclear, of course, I think that if if we get to a point where it is clear that the the economics, the economics and the environmental impact, are going to make it an imperative to develop nuclear, I do think that there's I think people will be willing to revisit to revisit this. The challenges though, in the way I'm reason I'm still a little bit hesitant is that you asked about nimbyism, and to people's concerns about you know, even even something relatively straightforward being being built in a neighborhood that's changed. I think that will be a really powerful obstacle. So I don't know I, on the one hand, from a sort of a, an optimism in terms of technology that the technical problems will be will be solved. But I don't know exactly when and how people will embrace it in terms of saying in my, in my neighborhood, I mean, to me not even a neighbor in my city, I would be comfortable with the construction of even even small modular reactors that may have a much better safety profile. But it's there's something almost have a visceral reaction or fear to nuclear beings, particularly located near where people are. So I just think that made that may keep the market size a little bit a little bit smaller than it would otherwise be in terms of citing. But again, it's it's hard, it's hard to predict, particularly given the scale of the need globally. And so I do think some countries are going to embrace it faster. And maybe the early movers will show that it is that it is safe and can cause a bit of a renaissance. But But I think I think time will tell

Will Jarvis 42:54

that sounds great. I Oh, look, here's how I here's how I that that we're able to convince people and and do the positive PR because it is it would be such a boon for for all of us. David, thank you so much for coming on the show. Where can people find you? Where should we send them?

Unknown Speaker 43:10

Yeah, so I'm pretty easy to find online. I'm either David Guilford or D Guilford on most most channels. So relatively easy to find there. You can learn more about our about about the company at sidewalk infer.com. But yeah, happy to, you know, people can find more information there and feel free to get in touch.

Will Jarvis 43:31

Awesome. Awesome. Thanks, David. Appreciate it.

Unknown Speaker 43:34

All right. Well, it was really a pleasure speaking with you and join the conversation.

William Jarvis 43:42

Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations, and live players. You can subscribe to Bismarck free and brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work and music at Donovan dorrance.com

Transcribed by https://otter.ai

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:37

Jeremiah, how are you doing this evening?

Unknown Speaker 0:40

I'm doing really well. Well, thanks for having me on.

Will Jarvis 0:43

Absolutely. Thanks so much for taking the time to come on the show. Jeremiah Deepak giving us a brief bio and some of the big ideas you're interested in?

Unknown Speaker 0:51

Sure, so my name is Jeremiah Johnson. I founded the neoliberal project in 2017, or 2018, depending on how exact you want to be. The neoliberal project is a kind of center left globalist Think Tank organizing group at this point, we do social media, we have pretty large social media outreach through a lot of different channels on Twitter, and Reddit and live streams and podcasts and Instagram and all kinds of other stuff. We also have more than 80 chapters around the country in the world. I think at this point, it's hard to at this point, it's hard to remember how many chapters we have, because there's so many, I think, more than 60 in the United States and something like 20 internationally. And we advocate for what we call neoliberalism or new liberalism, which is kind of a globalist free trade is good immigration is good perspective on politics, we are capitalists who also support the welfare state. So I am very interested in politics, obviously, from this kind of market friendly center left perspective, I am also very interested in the dynamics of how you build a movement through social media, and how you appeal to the kind of the mass audience and how you make your case to the the arena of public discourse, so to speak. I'm also very interested in just other niche topics, like, you know, there's particular policy areas that I'll get down in a rabbit hole on whether that's permitting reform or zoning. I'm very interested in Effective Altruism, I'm kind of adjacent to that world. I've, I guess I kind of consider myself an effective altruist in that I've donated a kidney I've raised a third of a million dollars for against malaria Foundation. And I know a lot of people who who've run in the effective altruists circles. And so I there was a time when I was I've always kind of said, you know, I'm near the effective altruists world, but I'm not part of it. I think I'm increasingly becoming part of it now. But that's, that's just a quick background on me. Obviously, there's a lot more depth we can get into.

Will Jarvis 3:10

That's great. That's great. Well, Jeremiah, what I find super interesting about you, and I think perhaps is your superpower is you've been really effective at building this movement like this, this meme is like, become incredibly powerful over the last couple of years. What do you attribute your success to? You know, did you like? Did you have a plan when you got first started that this is like, Okay, I'm gonna get here. And this is how I'm gonna get there. And I've got this like, kind of robust plan, or does it just kind of emergent, like, you know, you start doing something. So it's getting some momentum, and it kind of feeds on itself, and you kind of kind of happen is into success? How intentional were you?

Unknown Speaker 3:45

Well, it wasn't very intentional at all. That's great. I would love to say that, you know, this is all all the success is due down to my personal brilliance. And, and it's only because I'm a genius that this has succeeded first. I don't think that's necessarily true. But I think the first thing is just that there was a market, there was a space for this idea that people wanted something like this in terms of the the new neoliberalism, I'll call it. And I should note, we've actually just changed our name. We've, we're now instead of being the neoliberal project, in most of the arenas that we're using now, we now call ourselves the Center for new liberalism. New liberal versus neoliberal is literally a one letter change. So do what that what you will, but I think the ideas were strong, and there was a space for this. And the story is really interesting, because it very much was not intentional. Where this started was on some social media spaces, particularly Reddit. Were in the 2016 election, everything became about politics and you know, you had Hillary versus Bernie was a big thing, almost even bigger than Hillary versus Trump in social media. faces because Hillary versus Trump was, you know, in the online world of Twitter and Reddit discourse just kind of considered to be obvious. Well, yeah, obviously Trump is a lunatic and crazy and awful. But Hillary versus Bernie was this bitter tribal war, you know, between groups of people that very much didn't like each other. And particularly in many spaces on the internet. If you were a fan of Hillary Clinton, rather than Bernie Sanders, you were accused of being a corporate bootlicker or a neoliberal shill of some kind. And a bunch of us who were fans of Hillary Clinton who thought Hillary Clinton was great and better than Bernie Sanders. We basically took that insult that was being hurled at us, you're a bunch of filthy neoliberals, and we just said, Okay, well, you know, if being kind of a Clintonite Democrat is being a neoliberal, then that's what we are fine. And we started a space called our neoliberal, the neoliberal subreddit. And initially, it was just kind of a joke like, Haha, here's a place where we can all make jokes about weird things that we like it was it was a very economics heavy crowd at the beginning. And so you'd see a lot of like central banker memes about how Ben Bernanke is God, Ben Bernanke with laser eyes kind of things. You know, Janet Yellen was the patron saint. And so there's just all this very, very nerdy stuff going on. And to our surprise, it grew really quickly, it had no intention at the beginning, other than to be a fun place where we would make like memes and like, like minded people could congregate. But it grew really, really quickly. And eventually, you know, some of us were like, wow, this is getting really big, really fast. Let's make a Twitter account. We made a Twitter account. And all of a sudden, that got really big really quickly, that started to get lots of followers and, and like, important, people started following it. And that was a very odd feeling, the first couple of times that happened. And then, of course, what every dude has to do when they get attention on the internet, we started a podcast. So it's the thing to do. And then the podcast started getting a lot of really cool guests. And it got a lot of attention. And eventually, we just realized we were so good at getting attention on the internet, which is a skill. I do think that myself and some of my co founders have, that we were kind of kick starting this movement without having intended to like, people were identifying with the things that we talked about to a very serious degree. And so we realized that we need to make this an actual organization. And that is how the neoliberal project came into being.

Will Jarvis 7:30

That's really cool. That's really cool. Oh, why do you think this this $20 bill on the sidewalk, hadn't been picked up before it? Was it kind of this intersection of neoliberal policies, and the internet really had not been done before? Do you think that's what it is? That was kind of like, the reason why you were able to get like so much momentum so fast?

Unknown Speaker 7:52

I think it was one of the first times that there was a clear contrast. So 2016 is the first time that socialism kind of became an acceptable option in the Democratic Party, gotcha. Socialism in American politics has been a slur for a very long time, right? It's only a word that you use to describe your enemies. And you know, it's just an attack, nobody would self admit to being socialist. And Bernie Sanders didn't change that in 2016, he was a Democratic socialist. And he, you know, had a very strong showing in the 2016 primary, even though he did lose by a significant amount, but I don't think anybody would have ever guessed that, like a socialist candidate would get 40% of the vote in a major party primary. And so because there was now this contrast, it opened up the space for someone else to say, Well, if you guys are that, then I'm this. And, you know, before that, nobody would have done this in like, 1996 because Bill Clinton being Bill Clinton, neoliberalism was kind of the the water that you are swimming in, right, our brand of neoliberalism is very much that kind of Bill Clinton, Tony Blair, kind of 90s Third Way vibe. We throw in a couple of different things in there with with obviously, kind of how pro immigration we are. But I think that's one of the keys is that the Democratic Party really finally split into an identifiable two wings, where, you know, there's been that tension for a long time between the more left leaning part of the party and the more centrist part. But we were able to jump into that space quickly and say, you know, there's an actual ideology opposing, like socialism in the Democratic Party. If you're not a socialist, you don't just have to be this wishy washy, centrist. It's like, well, I want 30% of what Bernie Sanders wants, because his ideas are good, but they just go too far. Nobody believes in that. Nobody everybody can tell that's kind of a fake, lame thing to do. You need an actual coherent set of principles. That's different from that. And I think that's what we provided.

Will Jarvis 9:53

That's great. That's great. Tell me if I'm wrong, but I feel like the neoliberal project at sambal is the core technocratic. The Democratic Party at some sets, Is that Is that a fair like, painting there?

Unknown Speaker 10:07

Yeah, I mean, I think we lean very technocratic at our core. I think a lot of this stems from where we began, if you want to get into the deep lore, the the original users of like this neoliberal subreddit, were from the bad economics subreddit, we are technically a splinter of that. Bad economics was a subreddit where a bunch of economics students and graduate students and PhDs would go to make fun of terrible economics they found on the internet. And so it's very, very wonky. It loves to get into the policy details and to take down stupid commenters who say stupid things about the economy. And we still have a lot of that in our DNA that were very policy focused, we view ourselves as very wonky, very evidence based that's it's kind of a considered a lame thing to say these days. But I do think it's true, we try to follow the evidence where it's where it leads. So I think of us as the technocratic wing of the Democratic Party, we want to make people's lives better, we try to implement the policies that do that, you know, and we're very driven by outcome rather than by ideology. In essence, we are ideological, we have ideological beliefs. But in a lot of ways we're willing to compromise between like, is that, should we use a state solution? Should this be a government program? Should we use a free market solution? Does the government need to get out of the way? Well, sometimes it's going to be one, sometimes it's going to be the other. Let's look at what the evidence says that, you know, the government is a tool, it can be used to do good things, or it can be used to beat you over the head, much, much like a hammer. So you've got to look at the particulars of the case. And I think that's our attitude.

Will Jarvis 11:48

That's great. That's great. I am curious, how do you think about the difference between, like, there's this tension in my mind between good policy and then like, politics is like vibes? You know what I mean, like very much, it seems like, a lot of politics is five. And you've, you've kind of hack the two a little bit, right? Like, you've been able to get some charismatic power behind, like good policy, which is really cool. But do you think that that scales up to the national level? Is it possible to get like really good policy that still has good vibes, you know, it will good vibes in the sense that something you can really sell at some level?

Unknown Speaker 12:22

I totally agree. There's an inherent conflict, I think sometimes between the policies that you want and the politics that you have to pay attention to. With that said, I think there are a few hacks that you can use. One of my theories is that and this is potentially similar to vibes. But I like to say that all politics is identity politics, interesting. Now, in America, identity politics has this connotation like this. If you're black, then you care about like Black Lives Matter and police brutality, because it's your black, that's what you care about. If you're a woman, you care about abortion and birth control, because you're a woman, right, and it's like, it's almost a little condescending to say identity politics, like it's dismissive in a way. But I tend to think all politics is based around identities. And, you know, there's the obvious cases that I just listed, but there's the things that you know, like, watch a Donald Trump rally in like white, rural America, and tell me that's not identity politics, what he's doing, they're appealing to a specific identity group, and telling them that they're important and that their issues matter. You know, a gun owner, you could say gun control is a specific policy. But being a gun owner is now an identity. In America, being a gun person is like a core identity for a lot of people and it informs how they vote. You can go down the list, you know, being a particular religion, being an urban person of color, being a white yuppie, in the finance industry. There's all these things are identities, and I think identities form, how we, how we approach politics, and even specifically ideological commitments that people have, you know, people think of ideology versus identity is two different things. But I think ideologies have become identities. And so you know, it's, it's why you see Magga as such a branded thing, you know, what is an identity have it has particular symbols that represent it, the Red Hat, you know, the waving the American flag, the pickup truck, all of these things are coded in American politics. And you know, you can think about the the Twitter socialists all of them have a red rose emoji in their bio and you know, again, they have kind of holy texts in the same way that like a religion would. They have their holy texts they have their Savior figure they have that the loved in group and the hated out group, they have the internal language and, and structure and jokes that only they get. Every bit of this ideology is formed as an identity in the same way that any ethnicity or religion would be. And I think it really informs how people approach politics. And so when we looked at how do we make weird technocratic neoliberalism? Cool? Our answer was we have to make it an identity. We don't need people to believe the specific things we believe, as much as we need people to identify as Neo liberals. And so that's why you have now globe emoji, Twitter, and you have the neoliberal subreddit where they've got all these in jokes flying around, and you've got our quasi religious figures, and you've got the outgroup that we love to dunk on. And you know, that people are inherently tribal. And they want a tribe to belong to, they want a tribe to war against, and you've got to give them that in the political arena, if you're going to have any success, this is kind of how movements are built. And I think that's one of the things that explains a lot of our success is that we kind of embraced this vision of like, let's make neoliberal an identity that people will identify as, and that will give us power that will give the movement actual staying power and, and produce actual change.

Will Jarvis 16:06

I love that I really like this and I love to contrast this with I'd love to with you know, this whole idea of like the Unity party or something like that, or like we're gonna like, you know, create this like third way, but there's not really an outgroup and Ryan dreamings forward party for a party, whatever the whatever is going on there. I just like seems to like gloss over politics of the political in a way, which just makes no sense.

Unknown Speaker 16:27

Andrew Yang is the most I want to point out I am the internet's like, number one Andrew Yang hater at this point. I was the first when Andrew Yang was running for president like 2015, maybe or maybe early 2016. Back when everybody was still writing the obligatory introductory Andrew Yang think they think of these Vox in the Atlantic in the New York Times. And you know, both right leaning things and left leaning things everybody was giving Andrew Yang, you know, this Whoa, what a crazy interesting thinker. He's, he's the guy to watch out for. And I was looking at his actual policies and saying, Andrew Yang is kind of dumb, like I was whispering it at first and saying, if you read his actual policies, he seems like he kind of might be dumb. And so I wrote about, I wrote about this way back in the day, and I just want credit for that. But at this point, you know, he's, he's a grifter. He failed in the Democratic primary as president. He failed in the New York City Mayor's race. And he basically decided, well, am I wrong for losing my elections? No, it's the Democratic party who's wrong? So I'm going to start my own. The forward party literally has no platform of any kind has no ideology, other than like, big two parties bad give Andrew Yang money, good. That's literally the sales, but you can go to their website, and like, what is the former party think about abortion? It's an important issue these days. Right? It's maybe the most important issue in American politics at the moment. They don't have a stance, their stances? Well, we need to change how we vote, and then we'll have like a Citizens Council. Right. You know, what, what, what should we do with the federal budget? How do we control inflation, which we do with immigrants? Should we legalize dreamers? What should we add more tariffs or be more fruit pro free trade, they literally have no policies, they just don't address it. What they do address is they say we need to change the voting system. And then after that, like kind of magically, magically, some things will happen and like good outcomes will fall out. And I don't know it's just nonsense. And there's no theory of change behind it other than anything that gets Andrew Yang. Attention is good. There's my Yang rant. I know it's not probably the the center of what's going on in this podcast, but

Will Jarvis 18:41

to the Yang staffers who listen, I'm very sorry for that. Yes, it is. It is interesting. I was talking to Marshall of the realignment recently, I interviewed him, he's a good friend of mine. And he made this great point that in politics, at some point, you do have to make a call, like you have to be pro abortion or anti abortion, you really can't be both. You can't be like wishy washy, and I think you guys have done a good job of like, okay, like, you do have to make these tough calls. At some point, you can't just be like, sweep all these things under the rug, we're just going to all be friendly, because at some level politics is, you know, there's gonna be some winner and loser in some of these debates.

Unknown Speaker 19:20

Yeah. Well, and to get back to your point about policy and politics and how they conflict. I think that mostly you just need to be smart about how you play certain things. One of the most intelligent people I've seen on this is a woman named Ashley all and Ashley all was the communications director and kind of the main strategist for the Kansas abortion referendum. So Kansas, obviously a very red state hasn't elected a Democrat to be like in Congress for a jillion years. I don't know he's probably one Democrat from Kansas because it's that sometimes it's how it goes. But no, just it's Very, very, very red state trumpet, Trump always wins it, Republicans always win it. And in this conservative state of thanks to some court ruling, it turned out that abortion was legal at the state level after Roe v. Wade was overturned. So immediately the Republicans in Kansas said, Okay, let's have an abortion referendum, let's put it directly to the voters should abortion be illegal or not. And again, you'd expect that this would go a landslide victory for for the, you know, ban abortion side for the pro life side. But they ran a very, very smart campaign in Kansas, trying to play up specific things that they thought would resonate with conservative voters. Because if you want to win in Kansas, you have to hit moderate and even some conservative voters, you can't win in Kansas appealing to liberal or progressive sensibilities, right. And what they did, which would never fly in New York, or California, was not bring out people to talk about a woman's right to abortion, or about how this is such a progressive cause that would, you know, help women and minorities and you know, LGBT people or whatever. What they did was they brought out a bunch of people to say, don't let the state government of Kansas get between you and your doctor. Yep, you know, don't let the government interfere with your medical decisions. They're private. It's a very conservative framing of the right to privacy, which kind of undergirds why a lot of liberals and progressives thinks that there should be a constitutional right to abortion, but you can make that from a conservative stance, don't let the government interfere with your right to a private conversation with you and your doctor, and they're getting in your medical care. And they would do things like bring out a white straight man, a Christian pastor to talk about why he thought abortion should be illegal, right. And again, this would never fly in New York, you could never do that in California. But you know, there's a way to actually make kind of a policy position that may go against the grain political now are you might piss off some of your allies in that people in New York, if you put like a white, straight Christian pastor, man, as like your lead spokeswoman for women's issue, there would be hell to pay. But politically, it can be very useful in some instances. So I think you know, the conflict exists. But if you're smart, you can actually kind of thread that needle and message things in a way that meet voters where they are, so to speak. Right, Jeremiah?

Will Jarvis 22:31

I'm curious, I really like that kind of approach. And it just it's been weird to me that it almost seems like a lot of people that are activists that wants to change things would be quite unwilling to take that kind of approach. At this point. Is that your sense? Well, because it seems like you know, a lot of them would be like, no, like, we're not gonna go with the conservative messaging. We're gonna go in there. We're gonna like, you know, it's like they'd rather like signal that we're part of, you know, this kind of center left coalition than actually like have abortion big legal in Kansas. is am I like off the mark there?

Unknown Speaker 23:05

Oh, no, you're totally on the mark. Did you see the kids who threw like tomato soup on like a famous water flowers or sunflowers? Yeah, yeah. So that's the current thing. It was the current thing, like two days ago, when we were recording this, you know, now, when this when, when this podcast releases, maybe it'll be like, old and ancient. But it's a great example of that, where, you know, there are those kids, you know, and their teens. So like, I don't know that I want to criticize them too much, because it's never dunking on teenagers is like the lowest form of like internet commentary. But it's worth looking at, because we can see very instructively like those kids are not doing anything to actually help climate change, which was their supposed cause they want to stop big oil. You know, they had shirts that were like, stop big oil. It's more like, you know, stop big oil on canvas is what they were really after. And there's, there's a lot of really constructive climate action being done. It is not going to be done by you know, throwing tomato soup on things. But there's almost this push and pull. Where, you know, the people who do very quiet, very effective stuff, don't get media attention. The people who do very loud stuff, do get media attention. You don't see the people who are quietly lobbying backbench Republicans to support a climate policy that they might have. Otherwise, you know, not, you know, to just allow it to pass, somebody's going to insert a provision into some defense spending bill that you know, it's like 10 million pages long and it's $100 trillion. And so those things always pass and you convince them to not fight this little provision that's going to one line is actually going to change like a whole industry and and lead to like great stuff in the climate. You never hear about that. What you do hear about is the kids throwing tomato soup because it's viral, right? And sometimes there's a trade off between Do you want to be viral and get attention or do you want to be a effective. And you know, we have entire systems, entire architectures of our society that are built around promoting things that go viral and allowing these things to happen. And so it's no surprise that things fall into that. And that there are some people who would rather be high attention activists, rather than people who actually get things done.

Will Jarvis 25:22

Makes sense. Makes sense. So the current media environment, it plays into a lot of these things now where you could just get more airtime.

Unknown Speaker 25:27

And I've been criticizing the left here, like you could do the same thing for the right like there's, there's people who do dumb stunts on the right, Charlie Kirk, or, you know, some of these nincompoops who are just like, would rather own the LIBS rather than get any kind of substantive conservative policy passed. So right, if you actually got a entire conservative agenda past, some of these people, like Charlie Kirk might actually just wither and die, because how are they going to own the lives in that case? Exactly. You know, their entire business model is finding some purple haired sophomore at like a liberal arts college to like, pretend that that's it pretend that's like the mainstream Democratic Party, but I don't know. Right, right. That's a whole there's bad faith people on both sides. There's idiot activists on both sides. I think. Absolutely. I hate to use the both sides phrase but like, obviously, it's true on some on some level Grifters everywhere

Will Jarvis 26:19

in their own place. Right. That's great. That's great. Well, Jeremiah, I'm curious, do you see the future of the Democratic Party as new liberalism as the neoliberal project? How do you think this develops over the kind of the next decade?

Unknown Speaker 26:35

I do think that it's the future of the Democratic Party. And I certainly hope it is. Because I don't think there's no future for the Democratic Party as a socialist party. It's just not ever going to happen in America. I think there's some danger that the Democratic Party can fall prey to a certain kind of error that we've seen in other countries. You look at like what happened with Jeremy Corbyn in the UK. You know, the, the Labour Party in the UK, had a ton of success with Tony Blair, Tony Blair is the only Labour Prime Minister to actually get elected in a popular election in like the last 50 years or something. It's just him and like, a bunch of conservatives. And they had a bunch of success. But Tony Blair was, you know, on his way out for a variety of reasons. And after some time, the UK went in a very different direction from that third way, kind of neoliberal Blair politics, they went for Jeremy Corbyn. And he was a out and out socialist, even in a way that Bernie Sanders is like, like Jeremy Corbyn says a seize the means nationalize, the industry is kind of like, we are going to be waving the red flag kind of socialist. And it just decimated the Labour Party for quite a long time they lost and lost and lost and lost over and over. And this is a country that is amenable to nationalizing things, in a lot of instances, they've got nationalized health care, their, you know, the train system off and on has been nationalized. And you know, it's a more left leaning country than us, but just that kind of politics was too far and over reaction, and it allowed the Conservative Party, the Tories in the UK, despite a series of kind of bumbling and ineffective and frankly, very weak bad candidates, they were just able to keep winning, because they were going up against Jeremy Corbyn over and over. And I think it led directly to the disaster of Brexit, which has been terrible for the UK. And you know, they're having negative growth over the last few years and things like that. And I think there's a similar error that we could make in America, it's one of our possible paths for the Democratic Party, is that they kind of go all in on Bernie Sanders ism, whether it's through the man himself or through one of his acolytes, that they decide socialism is the future of the Democratic Party, we're going to be a socialist party. I think that would be a disaster, electorally, for obvious reasons that America is just never going to do that. But there's a danger in it happening because we're very ideologically sorted. These days, we're geographically sorted, where Democrats live near other Democrats, you know, people in cities are progressive people in rural areas are conservative. And there's a lot of places where, you know, you can live in a particular place, and 90% of your neighbors will vote like you either red tribe or blue tribe. And you won't ever realize how fringe your views are. And this is particularly a problem for activists and journalists, you know, on the Democratic side, who all live in these hyper progressive bubbles in Brooklyn and San Francisco and things like that. And they don't realize how the rest of the country thinks and how you need to triangulate your messaging. In order to win in other parts of the country. If you actually want to hold power. It's far more important to, you know, to appease Montana voters than it is to appease whatever the latest sensibility is in Brooklyn. I think New liberals Islam is poised to do that, and is smart about that in a way that the left wing of the Democratic party cannot be. I also just think our policies are better. But I think we're better positioned politically, to kind of guard against, you know, the threats I see coming for the right. And look, I, I wish there was a better, right leaning party in America, right now the Republican Party is, in my view, very lost, and needs to do some serious soul searching and kind of purge itself of the stain of Trumpism. And that's just where I am politically, I would love for there to be like a more sane option. But at the moment, I think it's pretty important that we guard against what I see as threats to democracy. And that means that we have to actually be a fairly rational sane party on the left as well.

Will Jarvis 30:50

It makes sense, it makes sense. I'm curious, going off of that one of the core problems I saw, well, just let's just take Hillary Clinton, the United States, I think is a good example. Just for whatever reason, not very charismatic. I think like I think most people would agree with me on that. Please don't come get me. But I think like, and I think that was probably her core problem at the end of the day. How do you go about finding more charismatic politicians who also have like technocratic ability to be good managers and like, because it seems like these things are kind of like, don't usually go together at some level.

Unknown Speaker 31:26

I do think it matters, charisma matters. In a lot of senses, the guy you'd rather get a beer with, has won like 10 presidential elections in a row. And it's funny, because some of them are teetotallers, like, Donald Trump doesn't drink. George Bush when he was running for president didn't drink. But if you'd asked people would you rather get a drink with? Would you rather get a beer with George Bush or Al Gore? They'd probably say George Bush brocco, Obama would probably win that fight over both John McCain and Mitt Romney, Barack Obama was a cool guy. And so just kind of the cooler candidate in a sense, has won a bunch of presidential elections in a row. You know, Trump versus Biden is a is an interesting one. Because by that point, Trump's image had become so polarized, it's hard to ask that question. But but

Will Jarvis 32:10

even Joe Biden is like, fairly fairly charismatic, I think compared to Vice politicians.

Unknown Speaker 32:14

Yeah, I think Biden can be pretty charismatic. But I also think policy matters, you know, I don't think it's just a matter of you have to be charismatic, and then you can kind of do whatever you want. Because Bernie Sanders was also more charismatic than Hillary Clinton, he had a lot more energy, his campaign rallies were wild and Drew 80,000 100 people. And he still lost because he was a socialist, and even running in the Democratic Party in the left part of American politics, you can't win as a socialist. And, you know, in in a lot of ways, the Democratic primary and 2020 was a great example of how much policy matters as well, because Biden was not the most well funded candidate, he actually did pretty poorly during the primary in terms of raising money, all of the money was pouring into Bernie Sanders. And Biden wasn't even second, I don't think there was several others ahead of him. And what the distinguishing feature of the 2020 primary is, is that everybody raced to the left, even the suppose had moderate candidates like Beto or Pete budaj edge, or Amy Klobuchar, even the ones who are kind of carrying that moderate wing, not Bernie, not Elizabeth Warren, those moderates were still well, well, to the left of Obama, how Obama actually governed as president, they were saying, We've got to do way more progressive stuff than that they were going all in on like more spending more progressive stuff, more progressive social policy. Even Biden was to be fair, Biden positioned himself to the left of Obama by a little bit. But Biden was the single most moderate candidate in that discussion. And despite not having a lot of money, he basically ran away with the, you know, the whole thing after South Carolina, the whole thing turned into a laugh, and he won in a dominant fashion. And so, you know, to some degree, obviously, charisma matters, charisma can give you that extra marginal one to two percentage points or something super charismatic candidate versus not. But policy matters as well. And how you position yourself, are you positioning yourself as an extremist who's going to commit to a revolution? are you positioning yourself as a centrist who just wants to not rock the boat? You know, America is great, let's make a few little changes. But we're all good that, you know, that kind of thing matters as well.

Will Jarvis 34:36

Make sense? Like so subcombination to the end of the day that you have to get, you have to get some median voter theorem thing, you've got to get close enough. And then you also need to be charismatic, and that really helps the end of the day. Jeremiah, I'm curious, I want to shift a little bit now and talk about Effective Altruism, something I think we're both fond of. And I want to take an interesting track here. Because you have been quite successful. Well building up the neoliberal project this movement and ice a somewhat at a crossroads is getting a lot of press just last month, you know, Time Magazine, well McCaskill is on the front of it a lot, a lot of big big press hits happening. At the same time, you know, the my Gen Z friends, yeas, becoming cringe at some level, you know, people are afraid to associate with it. And I think it has the movement does have a lot of good ideas around effectiveness, effectiveness of charity, how do we prioritize doing good in the world and how we should you know, these mental frameworks for thinking about things I think are important. And a big shift from where things were, you know, in early 2002 1000s 2010s? How should EA position itself to remain like, quote unquote, cool and charismatic over the next kind of decade? What do you think? What are the failure modes here? And how can we avoid that?

Unknown Speaker 35:52

Yeah. First of all, I just want to say if you have friends who think like EA is cringe, then they are very much in the minority, because most of your friends and most people in this country would say, What the hell is this? Right, somebody's done a poll on this? And depending on how you how you ask the question, you know, it matters how you define, do, you know, air quotes, what what it is, but it's something like two to 6% of people can even recognize the phrase Effective Altruism and have heard of it, like, that's the percentage of people who have heard of Effective Altruism. So by any amount, it's less than 10%. I think the failure mode for Effective Altruism is that it fails to define itself in a coherent way, it fails to become an effective force that is unified, and that can present itself as an identity and the way that I think of identities, I'm going to go back to identity politics here. And if it fails to do that, then somebody else will define you on their terms. If you don't create an identity for yourself, someone else will do it for you. And it will not be flattering it will be to their advantage, your ideological opponents will, you know, make the case of here's what an effective altruist is. And here's why you should not be that. And I think this happens more often than people realize were like, one of the things I like to say is, you know, if you want to change the world, and Effective Altruism wants to change the world. It wants to change the face of human society and the future trajectory of our species. And it wants to do really grand world changing things. It has big ambitions, and I love it for that. But if you want to change the world, at some point, you will have to deal with culture and with politics, you can't change the world without addressing those two things. mass culture and mass public opinion will matter. At some point, if you are trying to change society, politics will matter. And if you just ignore the public opinion, and politics, eventually they will not ignore you, politics will come for you. One of the examples I like to use to kind of illustrate how this happens is the tech world. And obviously, the tech world and EA are kind of intertwined. In some ways. Sometimes it's the same people, a lot of tech people out in the bay area are effective altruists. And that's how EA raises a lot of its money from some of these tech billionaires. And tech for a long time had this attitude of, we don't have to care about politics, we don't have to care about what people think we're going to change the world. And we're just going to do it without asking it was this very, like permissionless innovation, move fast break things. And that was the ethos, we are post politics, we don't have to care about politics. And you know, to their credit, they did they change the world, they went and did it. But what they found out is after you change the world, politics is going to care about you, even if you don't care about politics. And for a long time, the tech world was really astoundingly bad at politics. They didn't know what was going on in DC. They didn't care to know, they didn't know how DC worked, what the real levers of power were. And what you're seeing now, a decade later, now that the world has changed, thanks to Google and Facebook and Apple and all these things. Now Congress is coming for them. The US Congress has bills supported by parts of both major parties that would break up these companies into little smithereens, Google would become 20 separate companies. And it's it's the most substantial antitrust legislation that has been proposed in generations maybe. And I don't think it will pass. But it might. And it's a consequence of tech feeling like they didn't have to care about public opinion. They didn't have to make public appeals. They didn't have to care about politics. And I think there's a failure mode, that EA could go down in the same way where they try to change the world and they even start to succeed. And then they get blasted out of nowhere by some cultural or political force, because they never bothered to interact with that or care about it, right?

Will Jarvis 39:58

No, I think this is the is super smart and going off your tech example. The thing mistake I think I've seen tech make is to primarily support, you know, finance plays both sides of the aisle, you know, they fund Democrats and Republicans, you know, it's 6040, some years, you know, one way or the other. Tech is primarily funded Democrats. And what that means is, is that you have Elizabeth Warren, being like, we need to break up big tech, and you have Clarence Thomas, saying, Hey, we should also break up big tech. It because, you know, Democrats, they know, you're not gonna fund Republicans. And so there's no like armistice there. And my worry for EA is that if it becomes a core, left wing institution only which it is primary left wing, just by demographics, there's this issue where, you know, you can see it now front page of National Review. These people care about the bugs, they don't care about you, your fellow Americans, you know what I mean? And this is like, it's very difficult to come back from that kind of thing.

Unknown Speaker 40:54

Yeah, and I mean, to some level, it's, it's unavoidable, because you can't, like in tech, just the workers just aren't there progressive. Right? Exactly. You know, the you can talk about the billionaires are one thing, but the actual workers at these companies are just super progressive, you can't stop them from being that way. I think the failure with tech is not that so much as it is just basic competency that they literally didn't know how things worked for a long, like, there's an organization I know of called Join Lincoln, which is literally just trying to interface tech people with DC people and like, DC people. Here's how technology works, because Washington has no idea how technology works. Most of the time, congressional offices are staggeringly internet on technical aspects of like science and how the internet works. And in the same way, tech people just had very, like, how do you pass a bill through Congress that, you know, nobody had Facebook could have told you a while back. So I think it's just a matter of competence and caring to some degree. Gotcha. And with EA, it's something I think about a lot that I think EA is pretty bad at politics, they're bad at doing politics, they feel like they should care, maybe a lot of people in our policy focused in EA, it's like one of the one of the hot new things is to go into policy rather than to go into like a specific charitable cause to like work in government or work for a think tank and try to advance policy causes. And I think that's a good idea. We need more of that. But yeah, he needs a theory of how to work in politics, or else all these people's time is just going to be wasted. An EA needs to be better at defining itself on its own terms in the public eye in the public arena, I think he is obviously done a lot of work thinking about EA cause areas and what is effective altruism, and how many angels can dance on the head of a pin kind of discussions where you get into these really weird, esoteric things. But they don't do any of this in the public eye. None of this is taking place in the public forum. They're not out there having the debates. They're very much insular having the debates within their community, and not addressing the public not caring what the public thinks. And like I said, to me, that's a mistake.

Will Jarvis 43:06

I'm curious. Jeremiah, oftentimes, there's, I get the sense that, you know, there are conversations that, you know, not every conversation should be public. You know, if we're trying to, like figure something out some policy thing that, you know, there's some things that are just best, like you and I, if we were trying to craft some legislation, we probably should not just be on the, you know, pages New York Times debating, oh, there are other things that we should definitely be talking about in public. How do you think about balancing that within the eh, because, you know, there's some things like, okay, when we're talking about effectiveness, we need to like calculate, you know, like some cost effectiveness of different interventions. And there's sometimes you need to have difficult conversations with that, which are not like super great to have in public, perhaps, I don't know, am I wrong about that? Or is there something where you just need to be able to have a good PR team have good, like, way to interface the world and make ideas palatable? While also like, you know, me doing things? I don't even know how to say this. But like, yeah,

Unknown Speaker 44:05

yeah. And I think I know what you're, I think I know what you're talking about. And my answer to this is that, you know, we can walk and chew gum at the same time, we can do two things, it is possible to do two separate things. And that that I think this is actually a cultural failure of EA, I don't think it's a policy failure. I think it's a failure of EAs. I think it's a failure of EAs culture and institutions. And the, the signals that the people at the top send, frankly, were the most important thing is how smart and brilliant and thoughtful we all are. And we really want to sniff our own farts about that. And like it's not polite to say to some extent, but like, look, you can have a PR strategy, you can promote EA as a good thing to the wider world while still having technocratic conversations within your tightly knit circles. The fact that you have a tightly knit circle does not preclude you from also doing the other thing like, how do you think every other organization works, you know, if I'm, if I'm the Republican Party, there's an amount of work that I do that's enormous that is behind the scenes, we're actually writing bills behind the scenes, we are, you know, writing the specific legislative texts that deal with code 6.1 dot 1.3, of the CDCs, charter to blah, blah, blah, like, there's an enormous amount of that, and all that takes place out of the public eye. But then you also have an entire messaging wing that's trying to just get people to vote for you. And the same thing with the Democratic Party and every, you know, and not just political organizations, but immigration groups. There's times when the immigration groups make big public appeals. Immigrants are good there. They make America strong, blah, blah, blah. There's also times when they're behind the scenes trying to get particular things fixed, or trying to, you know, argue with themselves, should we use this specific language or this specific language? Should we try to appeal to a conservative sensibility that immigrants are good for business? Should we try to appeal to a progressive sensibility that immigrants are a protected class that needs, you know, special protection in the same way that, you know, people of color or LGBT people, you know, you can use either one of those to promote immigrants? And those discussions definitely take place at pro immigration, think tanks? And, you know, my message is just it's not hard to do both. And it's a failure of EAA, that somehow they think it's almost very widely thought, well, we can't do both. Because if we do one, it precludes us from doing the other or like, the quality of our conversations will like, decline like it. That's a very weird one to me, because I think about like, I would love for EAA principles to filter through the water, even if you don't call it through Effective Altruism call it something else. But there's core principles like the idea that we should expand our scope of concern, our moral circle, right? That we should care about people who are not just ourselves or our immediate family or community, we should care about all people, whether that's people in Africa dying of malaria, whether that's people in the far future. That's an idea that I would love to filter through to the rest of society, whether we call it Effective Altruism or not. And the idea that if like, you get like Sandy in Des Moines, Iowa, who's like a soccer mom with two kids, and she works as a receptionist at the local company, and if you get her to be like donating a few more dollars to like Africa, rather than her local children's theatre, the idea that that's going to like impact, like the quality of the conversations that we have on the EAA forum. That's absurd to me, like, we're not trying to get Sandy onto the EAA forum until like will McCaskill what he has to care about. We're just trying to influence the way Sandy donates her dollars, because the Sandy's of America collectively donate about $500 billion every year. And like, why are we not going after that? There's a few organizations in EA that are still like trying to go after that like normal person. But for the most part EA doesn't most people in EA just don't seem to care about it. Is my impression.

Will Jarvis 48:02

Yeah, I think you're right. I think you're absolutely right. But it is like, there's a huge lever on just like you mentioned, like, you know, evangelicals, I think give us gifts, like something like $200 billion a year. And just moving 10% of that towards more effective charities could really have this huge impact. But we're kind of ignoring.

Unknown Speaker 48:21

Yeah, I mean, it's my favorite line to say, when I talk about EAS that regular people, just America as a whole is a very generous country. It gives half a trillion dollars every year, a lot of money. It's a lot of money, but 1% of that if we can shift to 1% of that, just regular people's money. That's like finding a new SAM Venkman fried, who would donate his entire net wealth every single year in perpetuity, a new San Venkman fried, and to me, that's a big deal. And like, I'm not I think a lot of the focus that we're EAA gets lost in itself sometimes is that it's a very hyper optimized place. It's very elite driven, and it's very hyper optimized. And rather than thinking about, well, how do we make the world better, they think about how we make the world best. And look, I think it's great that there are people having these like weird, esoteric conversation conversations about like, what is technically the best, most single hyper optimized thing that we could possibly do. But I think you lose focus on like, the idea that just there's a lot of money out there that is essentially wasted of that $500 billion. The number one thing that it goes to is religious organizations, your local church, or your local churches charity drive, number two is education. And 75% of that education money goes to four year universities, aka it's it's money donated to the Ivy League, it's a donation to Harvard who already has a $40 billion endowment, you know, that you'll name like a bench, you can give them $10 million. And that's probably what you get as a bench at Harvard. So, you know, I think I'm focusing so much on the hyper optimized cause of like, we're gonna, you know, only attack, we're gonna only recruit from Harvard and Stanford and MIT and Yale, and Cambridge and Oxford, and that's where we're gonna get our people. And you know, we're not just going to try to get convinced them to donate money, we're going to get just a couple of them. But we're going to convince them to donate their entire lives, their entire working lives to like these incredibly hyper optimized causes, where we're counting how many angels dance on the head of a pin, and we only need a couple of funders, we're going to get like two or three funders who provide 80% of all of EAs money is like two or three different billionaires. And it's just, it's this very insular, very elite driven thing that only focuses on a couple things at a time. And I just want to say, like, you can do a lot of good by just shifting the needle, a little bit of mass culture, mass culture is a really big thing. And it's hard to move the needle. But if you can move it even 1% you're actually having just an enormous gargantuan impact over the long run. Absolutely, as

Will Jarvis 51:06

Oh, well. What do you think? What do you think a successful effort to shift that kind of culture of looks like, is it? Yeah, yeah. Just like that mainstream culture, you know, should we be, you know, making a lot of tick tock videos, I mean, what's the best best approach?

Unknown Speaker 51:21

Successful in terms of like, what is the outcome? What is it look like at the end? Once I've succeeded? What strategy or what is your what

Will Jarvis 51:28

strategy should should you take at some level to shift like public opinion?

Unknown Speaker 51:32

So I don't think actually using the branding of Effective Altruism is necessarily the right way to go in terms of well, actually, you know, I'll I'll change that and say, I think because I have an identity driven theory of politics, I think you need to create a group of people. And this already exists to some extent, that identify themselves as effective altruists. And I think that's already happened. But I think it needs to happen in a lot more visible way. There are Effective Altruism, there are people who identify themselves as effective altruists. And if you ask them, they would say I am an effective altruists, like it's part of my core identity. But they're doing it in a in a non public way. Most of the time, they're like EA Twitter doesn't exist there. To a large extent, there's just there is no EA Twitter. There's not really an Effective Altruism subreddit, there's the forum, but that kind of like almost cannibalizes, anything that would go on a subreddit, I think. And so like in the grand social media spaces where America in the world fights its cultural battles, where we're having these discussions about politics and policy and culture and the future. EA is kind of missing from those places. And I think EA needs to be in those places, if it's going to succeed in the long term. So I would love to see a more active EA Twitter where effective altruists actually like put the light bulb emoji on their handle so that they're identifiable you can identify them at a glance the same way you can identify the globes or the red hats or the red roses, you know, as kind of tribal markers. So I think better social media game is part of it. I think better interaction with mainstream media is needed. I think will McCaskill is book was like one of the first good steps towards this that I've ever seen, where, you know, a lot of EA will do publicity, but it's like going on 80,000 hours, which that's inside the circle or insular? No, maybe you'll get crazy and go on Tyler Cowen's podcast. But again, that's that's friendly ground that's still basically inside the circle. Right. Will McCaskill was out going on Trevor Noah, you know, and I think that's fantastic. And, you know, he wasn't, and he, to his credit, I think he did a good job. He wasn't talking about the crazy stuff. He wasn't talking about killer API's or, you know, weird stuff to do with like shrimp welfare or whatever. And like, again, I don't want to, if you work on that stuff, I'm glad we have a lot of people working on very different areas. It's not what we should go forward to the public with, though. He just talked about like, people should donate more of their money to like really effective causes. You know, he donates a lot of his money. He's a cool story. His exist, personal example is great. He talked about very relatable things. And I think that like that appearance, will do more good for the movement than like 100 times going on Tyler Cowen's podcast. And I would love to see you know, more people when we have instances where we can like this going on Good Morning America and the view and like Joe Rogan's podcast and just like very, very mainstream kind of normies stuff, and really, not even saying that you don't have to go on Good Morning America and look out to the all the soccer moms out in, you know, and the oil workers in Texas and all these random people across the country. You don't have to go there and say, All of you should be effective altruists and do exactly what I say. But again, you want these kinds of core ideas, expand your moral circle of concern, do some degree of cost effectiveness, do some degree of just try it try something just a little bit. And like one of the things I do in my personal life is I'm not out here telling my parents, for instance, we're very charitable people that they need to donate all their money even to malaria nets. Even malaria nets is a little weird sometimes. But like, I just say, look, okay, so you care about education, you donate it to your local school, that's great. What about donating to the school in Nicaragua, where, you know, you could educate the, you know, 30 students for a year for like $100, or whatever, just think about how much good you could do for them. And like, kind of meet people where they are and just try to get them to be a little bit better? I think that kind of thing. That kind of public messaging could be enormously influential in the medium to long run.

Will Jarvis 55:46

Yeah. And I think it's a huge lever. And it's something you know, yeah. Should we think about a little bit more? I think it's quite a valuable exercise. Jeremiah, thanks so much for taking time to come on today. What's next for you? What are the next 10 years look like?

Unknown Speaker 56:03

You know, it's it's interesting, because I am still working at the neoliberal project, and still helping run the neoliberal project, I run the neoliberal podcast. So I am also a host of a podcast, and I love having these interesting conversations with all sorts of different people. I'm also kind of thinking about how I can help the Effective Altruism community, because my experience over the last few years has been kind of building a mass movement, doing kind of mass outreach and movement building. I've been thinking about how I might be able to help EAA and some of these things and, you know, some of the things I think, need, you know, better interaction with politics, better interaction on social media, better communication strategy to kind of the mass market. All these things are things I think I'm pretty well positioned to help with. So I would not be surprised if you know, in a year or two, you saw me doing some work in in that area as well. Great, great. Well,

Will Jarvis 57:04

we'll be looking out for it. Jeremiah, where can people find you? Where can they find the podcast?

Unknown Speaker 57:08

The podcast is the neoliberal podcast. You can find it anywhere you get podcasts at any of your fine purveyors of people's voices. You can follow us on Twitter at neoliberal except the OH is a zero. We've been trying to get the original one and we just can't. You can find our website is C in liberalism.org. That's the Center for new liberalism. So see in liberalism.org. And yeah,

Will Jarvis 57:37

that's great. Well, Jeremiah, thanks so much for coming on the show. I really appreciate it really enjoyed the conversation.

Unknown Speaker 57:41

Thanks for having me.

William Jarvis 57:46

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck breeze and brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38

Well, Mark, how you doing this afternoon?

Mark Johnson 0:41

I'm doing fantastic. How

Will Jarvis 0:42

are you? Doing? Great. Thanks so much for taking the time to kind of come on the show here. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Mark Johnson 0:50

Sure. So um, I worked as a product manager in search when search used to be cool for everybody, basically, Buck Google. And then I'm a three time CEO, one was an AI newsreader called Zite, sold out to CNN and then sold it to Flipboard. The next one was spent out of Los Alamos focused on satellite imagery, so AI for satellite imagery to understand the planet. And then I ran an ag tech startup, focused on using AI to help farmers. And now I'm CTO at a community of nonprofits in DC. So I've been all over the place. But my real passion is trying to take deep technology and turn it into something useful. So most of the startups I've worked at have either had a lot of scientists in them and or have been spun out of the lab. And that's really my passion areas. How do we take all the incredible work that's being done in labs, and turn it into something that's useful?

Will Jarvis 1:49

That's great. That's great. And you mentioned that, you know, you worked at a startup down there and out of Los Alamos, which, which is interesting. And now you're working in DC. I am curious, it seems like an a libertarian think tank. Nonetheless, if you don't mind me categorizing it, I think that that's safe to say,

Mark Johnson 2:05

Ah, I mean, we're many things I would say that a focus on liberty may be one way to put it. I mean, our core principles here are that we believe in people, but we prefer bottom up solutions to top down solutions, and we'll partner with anyone to do right. I think some people can read Liberty into that. But really, the goal here is to address the root causes of some of America's greatest challenges. So we work on everything from criminal justice reform, to free speech and peace to end to economic progress. And I would say really, you know, the community of nonprofits that exists here exist to try to address those problems from as many angles as possible. So, you know, I'm working here in technology, we have folks focused on community based organizations, other folks focused on policy, but really, sort of it's a broad set of of capabilities that we try to bring to bear on on some pretty tear Aryan tough issues.

Will Jarvis 3:04

Love that. I love that and not trying to come after you at all. But I just want to I want to paint the picture for this question, which is something that's been bothering me for a long time. It is interesting. So you know, you guys are focused on bottom up kind of solutions. You know, you've worked at a startup out of Los Alamos, you know, the Manhattan Project turned into the Department of Energy, which seems to just be quite ineffectual. You know, we can't build a nuclear power plants, like what's going on man? Like, things just do not seem to be working at the federal government level, when it comes to technology? You know, what is your sense of what the heck has gone wrong? Like why they can the federal government not build technology anymore? Like, you know, this is what you're passionate about is, you know, bringing technology and making deep scientific progress, technology, making it useful to everyone. But it seems like the federal government is just not very good at that anymore at all. Like, you know, the best example anyone can come up with now is operation warp speed. There's a question about how like, effective, how fast, you know, how fast that really could have been, but it was a lot slower than like, we would have hoped. And that's kind of the shining example, right now, of state capacity around the technological, you know, frontier for the US government. What do you think's gone wrong? Is my thesis correct, that we're a lot worse than we were in the 40s? And 50s, that building kind of technology from the federal government lens?

Mark Johnson 4:20

Yeah, I mean, well, I would say a few things. One is that let's remind ourselves that we live in the Internet era, right? We went from not having mobile phones to everyone having mobile phones that are connected to all the world's information that are basically connected to processing units in the cloud that are equivalent to the human brain. I mean, a lot has happened just in the past few decades. So let's not forget that. But I think one might first question is what's the proper role of government with respect to deep technology? And sure, the Manhattan Project was a moment in time Bletchley Park, right when we, well when when England figured out how to crack the Enigma code, right, these really important projects, maybe you can even say In the Apollo program in the space race against against the Soviet Union, although that's probably a bigger scratch, those are sort of points in time where we really needed to bring technology to bear for existential threats to society. The reality is, we don't really have that kind of existential threat anymore. So a lot of what the government does is more speculative for the future. And I think the positive side is when the government tries to allocate dollars to deep tech to make society better, I think it's a great thing. I think the the dark side is when something like the NIH basically becomes a monopoly and funding. And we're not getting the healthcare outcomes that we want to see when there's so much regulation in health care markets, and the patient isn't put at the center of care, such that entrepreneurs like me, I am will started, I almost find a technology out of Medical Center in Nebraska while I was there, and the red tape and all the problems that were associated with it caused me to throw up my hands. So you've got a competent entrepreneur that basically when people say they want to go into some sort of healthcare related technology, the first thing I do is steer them away. So I think that like there's a lot of implications, the government's sort of getting involved in deep technology. I mean, maybe the last thing I'll say is that, certainly, like a lot of money comes from the government that goes to universities and national labs, we do an absolutely abysmal job of spinning out technology. So there's a lot of things you can criticize, I think in the science environment. But the one that I'm most focused on because I've done this multiple times is try to spin something out of an organization. So there's this well meaning app called the by goal act way back in the 80s, that was intended to to spur more tech innovation, and tech innovation coming out of these university centers that got government grants. What's happened with that, as you've gotten this massive bureaucracy where these tech transfer centers, they feel like their primary job is to protect IP, rather than get it out to the world? And I think that there's a lot of reform that could potentially happen there to encourage more entrepreneurs to want to work with research labs.

Will Jarvis 7:10

That's great. No, that's really interesting angle we actually haven't talked about on this podcast is, you know, tech transfers from basic research, you know, research labs or universities, university contexts definitely comes to mind. What are the biggest problems? Is it just the fact that people are protected via IP, and it's more just like, you know, you're only going to get punished if someone goes out and makes a lot of money? And there's only like downside risks, the licensing, there's not upside risk for X, perhaps for the tech transfer offices. Was there something else going on there?

Mark Johnson 7:41

Yeah, I mean, I think this obsession of wanting to the treat this it like it's a product, right? Like we're, you know, what's going to happen at the other end, the reality is that most of those products are still in very researchy phase, that still needs an enormous amount of research engineering to figure out what the product could be under a lot of market development to figure out how to turn that into a product and go to market. So I think they're starting too far back in the process and demanding things like royalties, demanding these onerous payments. And worse yet, keeping the talent in the organization rather than letting it spin out. And trying to use the IP is the as the thing to broker. And I just think this is a mistake all around. If you look at something like Los Alamos for every one actual researcher like Shockley, they had nine research engineers, and these people, their job was to take that weird transistor that Shockley and Burdine built originally and turn it into something that Western Union could go mass mass produce. And I think that's often forgotten. And you see this in a lot of these research institutions where they just are trying to peddle this IP that's not ready for primetime. And there's just this gap. There's a gap between deep tech venture capital, which isn't patient enough to figure it out and doesn't want to deploy enough capital, and the universities who want to click to access dollars, I think,

Will Jarvis 9:02

right, that makes sense. Oh, why do you think about connecting these two up a little bit more? You know, is it all like the the legal side, you know, a lot of these inventions and research is backed by federal government money? You know, should we be pushing them, you know, to be a little more lenient and getting more tech, like transferred into the real world?

Mark Johnson 9:20

Yeah, I think there's probably, you know, there could be some statutory changes that I haven't thought through all those. I think it's just really a point of view, really, is that if you look at where it's been very successful, for example, it's Stanford. And I wouldn't say it's their tech transfer, per se, that was so so positive, they're back going back to Hewlett and Packard, who came out of Stanford University, who were encouraged by the professors to go out there and start something. And that became a cultural element of Stanford. So it wasn't just again, it's not just about the technology that's being developed. It's about the people developing the technology. This against something tech transfer forgets, especially in this fast moving world, a patent today is not going to be useful a few years from now, in most fields that are at the bleeding edge, what you really need is the system that's going to generate more IP over time. And that original IP might be the base and in some cases has a company associated with them. But But in most cases, really, you just need to build more. So I think it's just a complete slip in thinking about how it fosters early stage startups. Frankly, I think there's a market gap here. I think I've thought about building this for years, I call it Morton labs, there's like there's something in between where the VCs fund, and where the ideas spun out. There's that messy middle that needs to be funded. And I haven't quite figured out the right business model for this yet. But I really think there's an opportunity here, and we can see a real flourishing and science technology if we got this right.

Will Jarvis 10:56

I really liked that I really liked that keep exploring. I that's really exciting. This is exciting there. I'm curious, you just mentioned some things, which remind me of, you know, different cultures, in within different institutions, and how that can kind of affect outcomes. You know, you've worked in a variety of different, you know, locations from DC to New Mexico to, you know, the middle of the country, and you know, San Francisco or the bay area as well. What are the big differences you see culturally between all of those different kinds of locations? And how do you think that kind of leads to certain success in different kinds of like, endeavors or perhaps hampers people along that kind of journey?

Mark Johnson 11:36

Yeah, um, you think, you know, in San Francisco in particular, there's sort of like this wonder for the future. And I say San Francisco, New the entire Bay Area, right? Remember, Silicon Valley is, is the South Bay originally. And people come there, like I came there in the 90s. Because I was a misfit in my own town, right? Like I like to read, I liked, you know, reading weird books, I like playing with computers. And I was really hopeful about science in the future. And it turns out, lots of people moved to the Bay Area. Because of that. It means there is a culture of helping people, right, like, doing interviews for people is now something I'm honored to be called on to do. In my early days, I was helped by so many friends and mentors to give me early introduction, that's just what you do in the valley. I don't think people appreciate the the concentration of talent, and all the interactions, that that creates in a place like San Francisco, it's very, very hard to replicate elsewhere. Like when we came to New Mexico, the reality was that we had to import a lot of talent into the company, because it's, it's just not there. Like a lot of the talent that would have gotten gone into computer science ended up going somewhere else to go study computer science, and then stayed there. So there's not a lot of latent talent there. The people that chose to stay at Los Alamos, right, you're, you're going to Los Alamos, because you're probably at the top of your science career, you're going to spend 2530 years there, get a nice salary, a nice pension, you're almost by definition, very risk adverse. It's a great job and your service of the company country is, is welcome. But like that's not the kind of person necessarily that's going to be at a startup. Same thing with Omaha, when I went and did the Ag tech company, right? There's just not a huge concentration of talent here. I think, to me, this is what's really missed in in when people talk about the death of San Francisco, the reality is that there is a concentration and a culture there that is very hard to replicate elsewhere.

Will Jarvis 13:32

Yeah, I definitely think that is absolutely the case that collaboration effects I think, are still actually perhaps underrated. Just going back, you know, seeing everyone in Hayes Valley, I'm walking around, and I'm connecting, you know, ever I see, you know, someone that's been on this podcast, you know, once every, like, two hours walking around Hayes Valley in San Francisco, and it's a bit of a leading indicator that perhaps is the right place to be, I'm not sure or maybe not, maybe you should avoid it. But it's, it is interesting how, you know, the the concentration of talent, despite the fact that San Francisco is quite honestly a little bit unlivable. You know, from a perspective of, you know, just crime and, you know, housing prices just being so out of control, that it actually, you know, it would be difficult, I think, for us to do what we're doing with it without paying a lot more in salary early on. Yeah, I mean,

Mark Johnson 14:23

these are issues that I frankly, is one of the reasons I moved into the nonprofit world is that, you know, I spent, you know, my 30s really selfish and I'm walking through South of Market to my office, I always used to walk and I'd be like, when is someone going to solve these problems? And it's really weird for someone who has a libertarian focus to wonder when the government is going to do something. And frankly, the shame on the government of San Francisco for abandoning so many homeless people abandoning the youth with their terrible schools abandoning groups in San Francisco, particularly minority groups in terms of just their, their their general personal safety, like shame on the government of San Francisco, I don't think we should look to the government of San Francisco is the solution. There are plenty of really smart people that live in San Francisco with more means than any other city in America, surely they can come together in this sort of Third Sector, the independent sector, and try to solve some of these issues, I'm confident that with the creativity and talent that they apply in looking at technology, and matching that to business problems, I am certain they can go look at technology and other tools available to them, and apply that to social problems. And frankly, I'd call them them go do it, right, like I came into the social sector. Exactly. Because I saw this gap. And I just wish San Franciscans would really step up around this.

Will Jarvis 15:50

Yeah, I definitely think that there needs to be a call for more people who are, you know, look up and say, Hey, like, maybe it is my, my duty to help here and being a citizen, and perhaps just generally, that's, that's more of a bottom up approach that we could encourage is for everyone to think more closely about how can I help my community, you know, flourish? And not just how can I help myself flourish? But it's difficult to, you know, impart that message to

Mark Johnson 16:11

people? Yeah, I mean, it's like, it's

Will Jarvis 16:12

easy to point the finger. It is it is it is, I want to talk more about, you know, some of these bottom up solutions to a lot of American social problems. You know, it seemed together, you guys are doing a lot of good work on trying to encourage this around zoning around, you know, loosening kind of occupational licensure and a lot of things like that. And tell me if I misspeak on any of these fronts? What do you think the biggest lever is that you guys have on the policy arena, to encourage, you know, personal responsibility, or the ability for people to kind of take charge and help themselves out of some of these sticky wickets? We've gotten into as kind of a culture and society?

Mark Johnson 16:51

Well, I think, you know, one of the things we look for, in the organizations that we support, is that they start off with empowering people. Right? I think that this means that, you know, not just like, how are we going to live a better day or week? But how are how are they going to help people to live a better life? Right? How are they going to find life's of meaning? How are they going to become self actualized. And that's a key thing that we look for, you know, one of the ways you do that is by helping people are recognizing that everyone is an individual. And then you can't just use a template for helping them out of whatever situation they're in. So let me just give you a few examples. Like the Phoenix is one of my favorites, they, they focus on people with substance use disorder, introducing them to sort of athletics as a way to build a community around them for supporting, and it's truly incredible, they built many gyms, you know, started off from a founder that was close to the problem, something else that we look for is like, much like you look for passionate founders in technology, who are obsessed with the problem. Oftentimes, the best proud founders in the social sector, are those that were closest to the problem also. So they you know, they've taken this model, it's, they've been able to scale it up. It's been a great, great collaboration with them. And recently, there's a technology component now to where they've started to build an app to build an offline community. So unlike gyms, which are very expensive and tied to a location, you can set up sort of fitness schedule anywhere and give support to people no matter where they are on their phone. This becomes a powerful new tool. So I think that you know, a few lessons here is, you know, how do you empower people? How do we find organizations that are founder led, where they really understand the problem? Do they have a novel solution to one of these sticky wickets, as you said? And then can we find ways to scale them up? Like if this solution is working? Well? What ways can we use technology and other tools to help them scale up? And that's sort of generally what we're looking for as a community when we find an organization to support?

Will Jarvis 18:59

That's great. That's great. And I do love the focus on technology. And philanthropy seems to be like, that's something an underserved area that has a lot of kind of alpha left.

Mark Johnson 19:10

Yeah, I mean, I think one of the mental models that I've tried to break in my head over the past year is this nonprofit thing, right? Like, what is a nonprofit nonprofit is a tax designation and nothing else, right? At the end of the day, all these organizations are creating products that serve their customers, and help them live better lives. And when you think of it like that, you realize that there has to be a business model there. Sometimes donations are the right business model. Sometimes there's another kind of business model. So one thing that's really unique about Stan together is we're also pretty agnostic to the type of organization only that the organization is really helping people in their lives. So for example, we have a venture fund. So stand together ventures labs invest in for profit organizations. And what's cool about it is maybe two things one is He will often look at deals that other VCs would pass by because they can't see the billion dollar opportunity. He's that connects to the second point that? Sure, would we like a financial return out of that it'd be great if we did. But really what we're going for is a social social return, the financial return is just validation of that product. And showing that began a sustainable business model and get the product or service into the hands of the people that needed the most. But really, we're looking for that social good, right? Like, how can the portfolio companies create social equity, not just capital for us?

Will Jarvis 20:36

That's great. That's great. This is this question is somewhat related to this. And you might have answered it already. Recently, I was talking to someone who worked in philanthropy for something like 20 years, when started their own nonprofit. And he was complaining to me one of the problems he had, he was an advisor to a very wealthy person who had made some money in natural resources. And one of the problems he had, he's a very smart guy was that, you know, a lot of people in philanthropy want to find things that are under served or, and also, you know, somewhat something someone else has not done yet. So they can get that kind of excess return of good or utility in the world. One of the problems he had though, was, you can find these people, but then you know, you've got to keep supporting them for the long term if you want them to be successful. And there's kind of this drive, I feel like in a lot of a lot of, you know, context to get people to something that kind of self sustaining knowledge there were oftentimes you can have underserved or problems that are overlooked. But if you find them, you're almost kind of committing to finding them for a long time, because by definition, other people have overlooked them or thought they're not important.

Mark Johnson 21:45

Mmm, that's an interesting perspective. Again, I'm, I'm kind of an outsider to this market. And, you know, given my sort of very venture focus lens, I'll give you that lens. Too many philanthropies are around for too long, they do too little period. And I would love to see like no use business terms here. I'd love to see more consolidation in the budget. Yeah, I'd love to see better data driven decisions, right? Like, rather than trying to like, I'm sorry, there's just not that many problems, like what are the problems we all care about, we care that people are educated that they have good jobs, that you know, their children are growing up healthy and happy, their children are well educated, right? Like, these are all the standard prompts, that when someone falls in society, there's a place that we can help them. These are the same problems that have resonated with with humans for probably 1000s of years. So I really don't think there's that many new problems out there. Go instead of starting something new, go find an organization that already exists. I really encourage people to do that. When you do find one, really understand how they're changing people's lives, not how they're just a point solution for today, but how they're really changing lives to the long term. Also look at how are they using data? Are they really talking to their customers, or their donors, their customers, or the people that are serving their customers, there are just far too many philanthropies that treat their donors as customers, because that's where the revenue comes from, rather than the people that they're serving as customers. So I really think that there is there's hopefully, you know, a sea change coming in philanthropy, we're far more customer focused, we're far more data centric. And we're far better at sort of leveraging the principles of in business to, to go help people live better lives.

Will Jarvis 23:34

So just less navel gazing overall, and more just focus on on the ground, like, how do we actually help people perhaps?

Mark Johnson 23:40

Yeah, no, no, and I'm not trying to be heartless here, I think quite the opposite. Right? I think that I think that, like, it's just really important that we, again, this this sort of focus on the customer is something that's really often lost in philanthropy. And, you know, I think that I want to see more people come into this sector, and more novel ideas. But like, also recognize that there's a lot of organizations out there right now that may be doing the kinds of things that they already care about. So it's worthwhile, it's worthwhile taking a step back and understanding before you just jump right in,

Will Jarvis 24:14

kind of take the outside view there that perhaps, you know, perhaps everyone's not not, you know, off the rocker there, they're already on to something and, and then go from there to try and try and improve things. For sure. That's great. That's great. You wrote a piece about kind of a post mortem on Descartes Labs, which was incredibly helpful to me, I think, in framing my thinking about how to build, you know, a business that's kind of related to data, and some of the pitfalls that can happen when you're trying to do that, you know, as a young new founder, what's the one piece of advice that you would give me to try and avoid a lot of heartache as I build this kind of data business?

Mark Johnson 24:50

Ah, I mean, there are many I think at your stage, it's just make sure you have product market fit, and don't fool yourself. Gotcha. Uh, you know, I think that, you know, one of the things that we committed to Descartes Labs is we had some really early or early customer success. And we are investors, we pat ourselves on our back and just assume that we were doing something right there. And the reality was that we didn't have something that was scalable, right, they say, nail before you scale it, and too many companies have spent way too much money, trying to scale something before they really, really found that product market fit. So that's the number one piece of advice is just make sure it makes sure that you found that.

Will Jarvis 25:35

So be sure that you can, that you've executed well, and you've got product market fit before you go and, and put gas on the fire, if that makes sense.

Mark Johnson 25:44

Yeah, and, you know, the road defining that is really hard. Right? So, you know, another sort of mistake that we made at Descartes Labs was, you know, we were really a glorified consulting business. And the thing that like, it's so easy to point fingers and say, oh, you know, you've made a big mistake doing that, like, literally, that's how all enterprise software companies start. Right is yes. It's so true. Yes, absolutely. Right. Like you're, you're, you're in there solving a really particular problem for someone praying that other people have that problem to maybe get some a little bit of evidence that other people have that problem. Maybe you have a thesis that people have that problem, then you go try to find them. But the reality is that a lot of your early solutions are going to be highly custom. And that's okay. The problem is, if five years in all of your solutions are still custom, you do not have a scalable software business with high gross margins, you have a consulting business with low multiples and much lower gross margins. And that's just a very, very different business to be in. And it's probably not what your investors signed up for? Well, and

Will Jarvis 26:48

it seems like it's one of the challenges, it's very difficult to tell early on, like you said, you know, you've got to do things that don't scale to quote Paul Graham, but that inherently implies more of like a consulting esque approach. And so you're just trying to first make someone happy and then see, okay, is this repeatable? And you've got to kind of do both. And sometimes, like, you get there, and sometimes you don't?

Mark Johnson 27:09

Yeah, and I think this is where it's so funny. Like when you write something like this, people's comments on Twitter are sort of like these like, tiny little aphorisms that sort of tried to be pieces of wisdom or point out all the flaws. It's like, of course, we thought about a lot of that while we were doing it, it's just Hindsight is 2020. Let me paint you just a quick picture of that company for people that don't know about it. So spin out of Los Alamos, it was me and number of scientists that came from Los Alamos, the expertise was in big data supercomputing, AI, and particularly satellite imagery, so complex datasets. So what we did is we apply this to large global datasets, initially looking at agriculture. So basically, the things you can see from the sky typically are large, they don't move, we successfully applied in agriculture, particularly looking at global corn and soybean yields. So how much corn and soy is growing at any given time on the planet, it's a really important number, if that's one of your inputs, or if you're trading it, or if you're a farmer. So those those kinds of numbers are quite useful. We had something that's pretty accurate. And that's how we started off the company. The big problem we had was, we weren't sure what kind of product we ultimately wanted to build. So our biggest deals were large consulting deals. But the question was, were we going to do more custom consulting deals? Where were you going to sell the platform itself? Right? Are we going to sell our scientists, we're using this platform that access to petabytes of data, and can use it to build these very valuable models for our clients custom? Should we sell the clients those that platform? Or maybe a third option is Do you sell products on top of that platform? So call it predictive feeds that sit on top of that product platform that are fed by satellite imagery? And this was what I call in the post the Descartes Labs dialectic? Which was, are we a platform company? Or are we a consulting company? Are we a software company or consulting company, and that really define sort of the history of the company and in both the things that we did really well? And where we sort of tripped and fell?

Will Jarvis 29:18

That makes sense? That makes sense. Do you think, and we don't have to talk about this too much. I know like these things are not like fun to talk about in retrospect. But I think it's very quite helpful for folks to learn about this. And just like how these businesses unfold, like, you don't I mean, like, there's all kinds of different ways to go. And I mean, you still exited the company. It's not like it maybe wasn't the exit you wanted, but it's still the company still exited. I'm curious, do you think you would be would have been better off just picking one like, we're gonna be consulting shop, or we're gonna like try and just burn the boats and build a platform or is it like, I mean, hindsight is 2020 Right. You guys were optimized, but you could get a ton of really smart people so it's not like you know, there's a reason you guys did all that right?

Mark Johnson 29:57

Yeah, I would say we mean that let me be a boy. Look down to two fundamental mistakes. So one is, I think that we should have been honest with ourselves that we were a high end consulting company. And there was plenty of money being thrown around at that time to organizations like ours that had that kind of talent pool that could build really valuable models. So I wish we would have done that maybe like even even further back, I think we should have just created a hedge fund, because we've all been very rich if we did that, but I think that we were just honest with ourselves and our investors that we were a consulting company, it wouldn't change how we grew, we could have said, Hey, a product me come out of this. But I think we can grow steadily year over year, we would focus on the gross margins of every deal, right? Like make, it makes sure every deal had margin rather than sort of the promise of future revenue. And we just want the financial engineering for the company would have been totally different. Honestly, the other mistake we made is getting way too hung up on the data set. So like we did some stuff with satellite imagery that at the time was crazy, remarkable, right? Like one of the first things we did in the first six months was to process a petabyte of data in under 24 hours on Google Cloud using 30,000 processors. Google had never heard of that before. They told us it was the largest calculation ever run on Google Cloud outside of Google at the time. So we became real buddies with them. But then we got all excited about it's like, oh, what can we do with satellite imagery? Look at how big our data sets is, when we were saying to the VCs, look at how big your data sets is, give us some money or customers the same thing. What they all should have been hearing is while you're burning a lot of cash, because you're storing petabytes of data, and doing enormous amounts of cute compute, is that really valuable. And there's probably a post to be written here too. But I don't think there are a lot of commercial use cases for geospatial data, such that the cost of manipulating the data, acquiring the data cleaning the data is greater than the alternatives that exist. And that's something that like was proven to us over and over and time and time again, the reality is people wanted to buy or sell signal for corn, they didn't want to see pictures of corn. And that was one of the fundamental mistakes we made in that company, for sure. That makes sense. Don't get obsessed with the data. Right? Yeah, it can be very attractive. And it's interesting, right? You're

Will Jarvis 32:23

getting a lot of applause as well, right? You talk to Google, he talked to the Google sales rep. He's like Holy mackerel, you know, no one's spent this much cash on us before. This is the biggest, you know, compute ever done on our system, you know, and all this stuff, and customers get excited about it. But perhaps the utility isn't isn't always there. But it's a real challenge to kind of navigate that. Well, Mark. So I'm curious. So you've, you've worked in the private sector, you've worked in the public sector, you've kind of you've been across the kind of domains here, I am curious, how is it different running a, you know, a startup versus running kind of a big philanthropy? Or are they pretty similar at the end of the day, with regards to how they operate?

Mark Johnson 33:05

I mean, look, there's always, there's always going to be differences in how organizations are managed, particularly on based on their size and how long they've been around. So we've been around for long enough that we're more stable in a startup. That being said, one of the reasons that I'm here is that we focus on constant creative destruction. So our founder, founder, Charles Koch, one of his biggest fears, and they'll say this directly is, is entropy, right? That systems that don't have injections of energy, tend towards boringness and will eventually get disrupted. So if, if you believe that someone outside of you is going to disrupt you, if you don't do anything different, you darn well better do something different. It's something I really appreciate about being part of stand together is that, you know, we're constantly challenged here to think bigger. We're constantly challenged to think about how we might do things better. And we're constantly challenged about how we might do things differently. So it's still like, based on those core principles we have that are how we run the organization. But luckily, we didn't have a VC a few years ago. Now we do it started off as an experiment. We've made almost 20 investments now. And now it's becoming a larger part of the organization because the experiment was very successful. You know, that I think that's probably I am blessed, because I think that's pretty atypical for your typical nonprofit in DC.

Will Jarvis 34:37

Yeah, no doubt, no doubt. And I'm curious, how do you keep that pressure up from a leadership angle? When there aren't, you know, in startups, like there, there's the market forces in you know, philanthropy, you know, those can be less How do you keep the pressure up when there's less kind of evolutionary kind of, I guess, pressure on the organization to be kind of successful?

Mark Johnson 34:59

Well, I Yeah, I would say, I feel like we feel a lot of pressure here. Because look at the world around us, right? Like, if you're looking around the world in 2023, and saying, Well, this is the best week in America, like, I don't think you're paying a lot of attention. So like, I think we actually feel a lot of pressure. Like one of the reasons that I came here is I thought, If not now, when, right, they have the right set of experiences for kind of this first half of my career, where I learned a lot in startups and technology and big companies and sort of like how the business world works, and how we can apply technology to big problems, I wanted to try this in a new domain, that domain being America and some of the problems that that she's got right now. So I don't know, I feel like we feel a lot of pressure here, even though it'd be easy to sit back and be sort of, you know, be sort of staid and boring. But we're just not like that at all be the the one other thing I'd say is that we run on a management system here called principle based management. And the easiest way I found to describe it is it's a kind of, it's a management system for let's call it self organizing organizations. So the same principles of you know, believing in people and empowering people, bottom up solutions over top down solutions, those the same kind of principles that are embodied in our management system. And that really tries to push down decisions to the people closest to the problem, really empower people within the organization, be really clear about our vision. And I think that helps us to stay really nimble, too, even though it was inspired by, by, again, the management system, Koch Industries, I think we've adapted it in such a way that it keeps us very nimble and very creative. And frankly, Koch Industries is an excellent, excellent model itself, you know, having grown from a small oil gathering business back in the 60s, when Charles took it over to the one of the largest privately held companies in the world today.

Will Jarvis 36:59

That's great. Can you talk more about that kind of management system, and perhaps how that works, like on a kind of day to day basis?

Mark Johnson 37:05

Yeah, so I, honestly, it's one of the greatest gifts that I've gotten from Stan together is a deep understanding of principle based management. So the principle principles in principles based management are the principles of human progress. So sort of like the thinking of it as sort of like the basic things in the Declaration of Independence, Life, Liberty, liberty, and the pursuit of happiness, along with a bunch of concepts from psychology and economics that Charles picked up over the years. So that's sort of like the basis, what this has been distilled into, is we call the five dimensions of principle based management, we sort of define how an organization works. So it's how do you set vision? You know, how do you find the right people? How do you make sure that they're motivated, empowered, how do you make sure knowledge is flying to the organization at the right rate, so that people can make the right kinds of decisions. So these are the five dimensions and sort of like how we cohere as, as an organization. What this does for us is, again, it tries to empower every individual by like, for example, here, you write your own job description, right? Your roles, responsibilities, and expectations are something that you work out with your supervisor, what those are going to be, which I found very, very empowering here, because it encouraged you to think about what you do best and how you can contribute most to the organization. So like me, this is a really long way of saying it's a very, very thinking heavy system, and that it forces everybody in the organization, never shared language forces, never have forces in in principle based management, and encouraged everybody in the organization to have the same language and to feel individually empowered to to take control of their situation, and make the maximum amount of impact they can. So I just found this to be really powerful and a framework that I've been able to apply not just at work, but in life more generally.

Will Jarvis 39:04

That's great. Do you think more organizations should adopt a management style like this?

Mark Johnson 39:09

Absolutely. Like I will, like, I'll be very bold here. I think this is potentially a leap forward in management. If you look at sort of the history of management sort of, and how it came about, you know, there's this period of let's call it Taylorism. That's very top down, we tell people what to do. We're really clear about job descriptions. You get into systems like total quality management that are all about product efficiency and charts and making sure people follow rules to get good efficient products. These were all sort of leap forward and management that allowed us to get the modern corporation. But this idea of empowering all the individuals in the organization is extremely powerful. And I think what you get is more flexible organizations, right? So this idea of that organization and being able to self organize based on the individuals within that organization is something that, that, frankly, not only have I not seen, but I've not done. I mean, to a certain extent, if I look at some of the other startups that that I've run, you know, I did a little bit through tyranny, which is funny because my politics are definitely anti tyranny, anti top down, and a lot of how I managed was very top down. And now I have a framework for better empowering people based on their talents for selecting people based on on their talents that I never had before. So now at some point, there's probably a piece to be written here too, about kind of what I've learned from from principle based management, I really encourage everyone to check it out. It's a, I'm pretty sure it's principle based management.com. You can download some booklets there, Charles has written a few really good books. And if you're interested, please do reach out to me, because like, I'm really passionate about this, I'd like to see, I'd like to see more startup founders think about management, as a discipline earlier in their startup career, he said he would really benefit them, it would have really benefited me. But thank God, as anybody who's been managed by me over the past few decades would say the same

Will Jarvis 41:13

thing. If you had to give one piece of management advice to you know, a young founder, you might be talking to right now, what would that be? Like? How can we do it better?

Mark Johnson 41:23

Ah, spend more time listening and less time talking. I have a lot. I mean, as you probably tell from this podcast, I have a lot of trouble with that. It's not necessary advice I always follow. But you can learn so much from people in your organization, you have to remember, you are not close to most problems. The people on your team are close to those problems. And either you trust them to give you good advice. And if you don't trust them, the right solution is not to get in there and do their work for them. They might not be the right person for that role. So really trusting people and listening to them is something that I wish I would have learned far earlier in life.

Will Jarvis 42:02

Make sense? That's really good advice. That's great. Well, Mark, thank you so much for taking the time to come on the show. If people are interested in this conversation and other things we popped up, I'll put some show notes in the in the dark down there with links for everything we mentioned. But where can people find you? Where should we send them?

Mark Johnson 42:21

I'm philosophy geek pretty much anywhere. Check out my Twitter, my medium. Those are probably my two primary ways that I get things out there. So yeah, look for me at philosophy Geek on Twitter.

Will Jarvis 42:35

Awesome. Thanks so much, Mark. Awesome. Thank you well. Special thanks to our sponsor does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Unknown Speaker 0:41

Well, Eli, how are you doing this afternoon?

eli 0:43

I'm doing great. Well,

Will Jarvis 0:44

are you doing? Well, thanks so much for taking the time to come on the show. Again, again, one of our first repeat guests. This is exciting. Eli, do you mind giving just a brief bio for folks who might have not heard the last episode and kind of some of the big ideas are interested in right now?

eli 1:00

Sure, sure. So I'm a senior research fellow at the Center for growth and opportunity at Utah State University. And I'm an economist by training. And basically what I work on and think about and try to do in the real world is in the great stagnation, right. So try to increase total factor productivity growth back to at least 2% a year where it belongs, rather than the much, much lower rate of growth that we've been having, since the early 1970s. But especially since about 2005. So I think about like a bunch of industries, energy, transportation, aerospace, particularly I love you know, health housing, you know, kind of the big the big sectors of the economy that have have not really grown as fast as they should have over that period.

Will Jarvis 1:49

I love it. I love it. Um, Eli, if you had to rate how we'd been doing the 2020s, or about 21% 20% of the way for you so far. You know, do you think we are on the right trajectory to escape the great stagnation or what do things? How do things look for you?

eli 2:06

i Yeah, I'm, you know, it's a little skewed by COVID. Obviously, like, we don't know. But what would happen, you know, Operation warp speed was like an Dawn complacent event. Right. So that's, that's, that's great. Yeah, but overall, like, I don't see any signs of like, you know, kind of waking up out of our slumber and and, you know, taking seriously the need to, like, grow and like these, these big industrial sectors.

Will Jarvis 2:38

Gotcha. Gotcha. Yeah, it's tough man. And even people are friendly to cause I hate to, you know, we've had a lot of Essex County MPs had a lot of success recently, which I've been really excited about, that makes me bullish, but then, you know, it's time to build Marc Andreessen still, you know, privately, well prevent building an Atherton. So it's, it's tough man. It's tough out there for, for folks trying to fix things. I'm curious. One of the biggest high points recently has been LLM is chat GPT, you know, really can cause kind of caught the imagination of everyone. I found it quite useful in my day to day, in fact, I used it to help a cup, right, a couple of conference submissions, I thought would take, you know, a full day of writing ended up finishing them in about 15 minutes with thanks to chat gbta. So, you know, there's there's been some, you know, productivity increases, but then again, it may not be the end all be all for knowledge workers and improving productivity. What do you think, you know, when we look back five years from now, what will we think about the LLM kind of hype train right now? Will it have solved some of these productivity growth problems? Or will be be kind of disappointed about the effects?

eli 3:49

That's a great question. So I think over the next five years, these models are just gonna get better and better. Yeah. Right. And they are going to play a role in our lives. And especially I think they will affect pretty significantly the content industry, the media industry, the advertising industry, things like that, you know, like the media industry is only 2% of GDP, but it is it punches like way above its weight in terms of like cultural salience, I say, right, and so like, for people like you and me, we spend a big chunk of our day in front of a screen, right? And we're consuming media. And so it's gonna feel like, oh, wow, it's this massive change. But if you look at, you know, how it's affecting these sort of large industrial sectors that are in the world of atoms and not the world of bits, like, I think the impact, you know, I think it probably will be minimal. I think it's conceivable that it wouldn't be minimal, but it would rely on us sort of Not sabotaging it in like we've sabotaged everything else in these sectors for the last two years.

Will Jarvis 5:07

So actually, I want to take this in in an interesting direction. This might be a little unexpected, but I would love your take on this. One of my big worries about the alignment community and like everyone focused on that is like, you know, I feel like LLM are one of these few areas of innovation in our economy right now. And this whole, like, kind of Luddite sentiment that we need to stop like whatever like we need to, clearly this is the end of the world, this kind of like revelation to ask, you know, New Testament free, millennia Aryan Protestantism, or what something weird, like the apocalypse is coming, we need to stop it. And it is, I'm much more more worried about the stagnation Apocalypse that is upon us immediately, then this somewhat more imaginary alignment problem, which I believe is still promising, we should be thinking about it, but I don't think we should stop the brakes on our progress because of it.

eli 5:59

Yeah, I, I agree with you. And to Yes, and you, I would also say add the the issue of just even I think the idea of like moderating the output of these MLMs is kind of crazy, because it it's going to turn the LLM into a culture war object. Oh, yes. Great point, like, like the idea that, that we have to make sure that the LLM 's never say anything taboo or offensive. Yes, in the same way that we kind of make sure that like, we, you know, we limit the offensiveness of what you can say on Twitter or Facebook, right? Like there's like you can, you can obviously say some offensive things, but but that battle over where the line is, and who should be in charge, and how we police this, it's coming, you know, it's going to come for the LLM. So it's it's going to be this very unpleasant cultural war extension, over over LLM. And so I think I do think like, we should be thinking about, like, how can we make credibly neutral? LLM? Oh, nice. Right. Like, yeah, like, what is what is, is there an approach to that, right, and I think like open source models, and, you know, the tools that we might be able to build that, that allow, like federated training, or that, you know, that sort of can do fundraising for for an open source model that that would be like more credibly neutral, and that you could you could run on your own device instead of running it in the cloud, right, that those kinds of innovations, I think, are going to be important if we want to avoid, you know, like, a very unpleasant few years.

Will Jarvis 7:47

Yes, yes. This is a great point, the political football what chat GPT thinks about Joe Biden or DeSantis? Or something like, it doesn't, right? It's it's quite bizarre thing to be worried about. But it does seem like a lot of people have this top of mind, the end of the day. A very interesting, do you think, um, you know, LLM will make knowledge workers a lot more productive, perhaps like consultants, you know, like, you can just build the deck immediately. You don't have to spend hours grinding on it for you, like, will it make, you know, producing content or like, you know, analysis easier? Or do you think it just is kind of like more of a parlor trick than we want to believe right now?

eli 8:27

I have, you know, I've like tried to use it a few times. And it hasn't, hasn't really, it's not like self evidently. Put anything, you know, changed my process in any way. It's not, for me, it's not been compelling. I think. Now, it kind of depends on what kind of content you're you're producing, right? Like, if I'm, if I'm writing, like, a blog post on my personal blog, like, I aspire to, like, the highest levels of like, surprise and newness, originality, right? In those posts, I'm not writing to like, check a box or to like, submit a form, or, you know, or, like, you know, like, like, and I think if you're, if you are, you know, I think there's a lot of a lot of process in the, in the world, right, where it's just like, we need you to write this many sentences about this, you know, on your application, so that so that we can can move forward. And like, you know, I think it might be able to help some with that. But then, I mean, the real question is, like, that process is really stupid, right? Like, like, if we're ever kind of, if it's if it's kind of like reducible to like, a lesser number of bits, like, we should just be like sort of asking for those bits, rather than using AI is like a compression and expansion tool to like You know, to, to like, you know, mediate between the thing, you know, the two humans who really just need to exchange a smaller number of bits. Right? So I don't know. And then I think about like, you know, business processes, like we saw, Microsoft announced, like Microsoft Teams premium, right, which has like some tools that look like, okay, like, like, meeting summaries and like, you can figure out what the action items were from the meeting, like, really quickly and stuff like, that seems like, not obviously bad, or, you know, like, maybe potentially useful. But like my question, like, in terms of productivity, it's like, you know, what I want to know, is like, when do we start replacing people? Process? Like, when do we lay people off? Because like, Oh, we don't need you anymore, because we have an AI model to do your job. And I don't know, when that's coming in the business world, right. Like, like, you know, with with word processors, like we got rid of a bunch of secretaries. Yeah. typing pool people. Right. And, yeah, I'd be curious to like, to know, like, what are the when are those layoffs coming? Because until the layoffs happen, like, we're not getting more, we're not really getting more productive? Gotcha. It's, I think it's like, it's a, I wouldn't say I wouldn't say it's an illusion either, but it's just like, we're getting more information. That is possibly not really that high value.

Will Jarvis 11:35

Gotcha. So this is actually this is really worrisome to me, because it seems like, you know, this is one of the big areas of, of hyper, like, you know, when you point someone to like, oh, like, you know, we're getting, you know, look, progress is increasing so fast, and all these things, and they pointed to MLMs. And then it's like, well, if there's really not a ton there, at the end of the day, it's like, maybe we're more cooked and, you know, even the the bears would like to believe.

eli 12:01

Yeah, yeah. That's, I mean, that's, that's kind of my concern with it as well, that they that sort of, like people can say, like, Oh, don't worry, like economic growth is coming. We can like, sort of sit back and wait for it to happen, as you know, Moore's Law progresses. And yes, you know, people are training these models and stuff, and we're gonna have like, you know, post capitalist, like, luxury, everything, because we're just gonna have the AI models produce everything. I don't think that's the world we're in. So. So, you know, I think we got it, we got to, we got to work pretty hard and figure out how to unlock these, these more physical sectors of the economy, and, and take the most advantage of the AI tools. Because I think, you know, like AI tools could have huge benefits in say medicine. Yes, right, if they're applied properly, but probably it's gonna be illegal for, you know, some period of time to like, apply them the way we should. So we got to fix that. Right?

Will Jarvis 13:06

I just want to highlight for the audience how, and I agree, you live with your perspective. I like a lot, but but just how different it is when I visit Berkeley, and I'm talking to everyone, and they're literally like, These things are so powerful. They're gonna kill all of us in 10 years. And I'm not saying for retirement. I mean, this is like what someone told me at a house party, right, a very smart, well known, you know, rationalist blogger, right. And is it just it these things are like diametrically opposed, right, which is, which is, which is very interesting, but I do think it is the case. I think you're right on this, you know, that that the they really are, it's just the it's not it's not quite there, there's something people are missing. What do you think? Why do really smart people have such differing views on this? Do you have any? That's like a meta question. That's very difficult. Maybe not, you're not able to answer it, and that's fine. But but do you have any sense of why that is?

eli 14:05

I don't know. I, you know, thinking about my own experience, right. Like,

I'm a little bit older than some of these. The most enthusiastic AI proponents, and I've been burned before. Right. Like, like, like, you know, I think that I think that's, I think that's part of it, is that, you know, I was, you know, I kind of was around for like, the rise of the web, right. I got on the web as a teenager and tinkered and I was like, this is gonna change the world. And I was, like, super excited about it. And, you know, late 90s, early 2000s, you know, continued to follow it and stuff and I was like, Yeah, this is gonna, this is going to change the world. And it did change the world. But just it didn't change the economy. Right, right. It didn't it didn't you know, it didn't it didn't get deliver massive amounts of growth. And I think there's not a lot of people who, you know, if they're if they're kind of like, they're both like tech aware, and, you know, sort of economic See, in terms of their way of thinking, you know, and have been around. Right to get burned the first time. Right. And so I think that's, that's, I think that that is, you know, part of my perspective is that is that I kind of, I think got it wrong, right. Before that, I thought, I thought digital technology was going to do more for us than it than it did. Right. And now we're just it feels very much like, Okay, this is just an extension of that.

Will Jarvis 15:48

Right, make the mix makes a lot of sense. Going back to what we can actually do, to kind of juice growth. You know, we talked, it was probably a year and a half ago about NEPA. Have there been I know, at the time, the Trump administration was working on a couple of different things and trying to get things moving again, has there been any positive movement on kind of fixing kind of these broken, you know, permitting and environmental review processes in the US?

eli 16:15

You know, legally, I don't think there's been, not much has moved the needle, right, like so. So Trump did get some reforms through on, you know, changing the NEPA implementing regulations. Some of those were, a small number of those were immediately rolled back by by the Biden White House when they got in. Some of them have stood up for now, some of the guidance like that Trump rolled back also like the Biden, Biden administration is now in the process of reinstating. So so legally, like, you know, like some of the Trump changes have stood in some have, you know, I think think that Biden administration might might still going to take another crack at figuring out what, you know, what a more comprehensive reform could look like. And I think, you know, according to their last rulemaking on this, like, they were going to do more in the future. So, so, you know, we'll see, but it's been it's been, it's been pretty marginal. And but I think that there has been something really positive that's happened over the last year and a half. Yeah. Which is, more and more people have become aware of the problem and have agreed that it it's a problem. Right, so So I think, I think in particular, the, like the climate community, right, people who really want to build a lot of clean energy, yeah, projects over the next 10 years. I think they're starting to realize like, okay, tactically, if we want to build this much clean energy, we're gonna have to do a lot of environmental reviews. And, you know, conservative opponents of this can use NEPA to object to it, right. So you see, you know, you're seeing, you know, offshore wind projects, getting

Unknown Speaker 18:09

NEPA getting

eli 18:09

challenged, right, like, like, by by people who are like, ostensibly are concerned about, like, some, like crabs or something like that. Right. And, and that is holding things back. I think you're, you know, what, one thing that I think is still not in public consciousness, but there's a case where people are challenging in some immigration reforms on the basis of NEPA. Right, so like, I think it's like the Biden administration's decision to stop building the border wall has been challenged on NEPA grounds. Yes. So and that case is live. And it's like ongoing in the in the DC District Court. So. So So I, you know, I think that as I think that as that awareness grows, so there was, you know, a lot of talk with in the last Congress about, about some kind of permitting reform for energy. And this was pushed by Joe Manchin and part of his deal for supporting the the inflation Reduction Act. Right. And I think, I think that that conversation will continue. But even even the mentioned Bill was, like, pretty marginal, on terms of the reforms that it would do so. So I don't know, I think that probably what needs to happen is there probably needs to be some marginal reform pass that like, you know, it's probably not going to do much we need to have a few years go by where not much gets done. And then we need to revisit it and say, like, oh, look, not much got done. We need to we need to have more, more serious reform.

Will Jarvis 19:45

Gotcha, gotcha. You like if if I said, you know, you need to fix NEPA, you've got a year. Let's say I give you a war chest of, I don't know 10 million bucks. Is there anything you know, is there anything anything like any and you had to give your best shot? Well, Would the approach be there?

eli 20:03

I don't know. I think you know, I so one of the things I'm thinking about more and more is, let's say there was someone in the White House who was really committed to this. Yeah, I think there's a NEPA is an act of Congress. Right? That's right. You don't you don't get you don't unilaterally get to repeal acts of Congress if you are president. But there isn't a lot that the executive can do. Gotcha. Right. There's a lot. Just just executive action. Yeah. So. So, you know, if there is a were to be a new president in, you know, a couple years, and and they wanted to really, really like spend their political capital. Yeah. On, on fixing, you know, maximal permanent reform? Yeah, they could, they could do quite a lot without Congress. And I think that's kind of one thing I'm thinking a lot about is, you know, I don't know when we'll have the opportunity. Right. If we, if we had the opportunity, what would what would the playbook be?

Will Jarvis 21:01

Gotcha, that makes sense? Well, I love it. And, Eli, I'm really glad you're admiring this problem. I think this is an incredibly important problem. And, you know, I'm quite concerned about stagnation and not enough people working on it, but I'm talking to people like you, it gives me hope that there is that, you know, there's still a chance we can we can escape it, which which I'm happy about. Eli, you know, if the audience wants to think more deeply about these issues around NEPA, etc, and try and contribute and help them move the needle here, where should they go? What would you recommend?

eli 21:38

Well, you know, my organization, the Center for growth and opportunities, looking very closely at this issue, so yeah, find us online at the cgo.org. Yeah, that's, that's the main thing I would recommend.

Will Jarvis 21:53

I love that. I love that. Well, Eli, thanks again for hopping on. It was great to catch up and catch up. And, again, I'm really excited to working on this problem. I think it's one of the most important problems and it's quite neglected as well, which is good.

eli 22:06

Thanks. Well, Matt. Great. Great to be with you.

William Jarvis 22:08

Absolutely. Thanks for listening. We'll be back next week with a new episode of narratives.

Transcript:

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38

Ben, how you doing this evening?

Ben Reinhardt 0:40

I'm doing well. Um, as I mentioned earlier, I'm slightly overwhelmed. But other than that, things are things are going well. Yeah, being a

Will Jarvis 0:49

founder is no joke, man. They they don't tell you this, you know, the founder school we all go to before we get there.

Ben Reinhardt 0:56

Oh, man. Okay. So something that I really I've realized is that I think that starting any organization is the same regardless of like, what the form of that organization is. So like, you know, it's like, everybody knows that like starting a company, you sort of like roughly go through the same, the same things. But I think that starting a nonprofit is the same thing. And which is also the same thing as starting an academic lab. Because I know a number of people who are in network labs, and it's like the exact same process of things where you basically have to, like, somehow bootstrap legitimacy for this thing that has no track record. Yes.

Will Jarvis 1:37

So and how do you go about this? Yeah, it is. It is a interesting job. What do you think's been particularly good for you in bootstrapping legitimacy?

Ben Reinhardt 1:45

Um, and good for me. Like, I think that having written a, an obscenely long piece about my entire thought process has actually been pretty good for bootstrapping legitimacy. In the sense of a, like, I've clearly at least thought through what I'm doing. Right. And I clearly, I might be wrong about it. But I clearly like have, I'm not just like making things up. I'm thinking that's yeah, no, this is a thing I think about all the time is like how to bootstrap legitimacy, ya know, coming on your podcast, right?

Will Jarvis 2:34

Doing the podcast tour, you know, like, give your name upsides of different folks that have done some good stuff. And yeah, writing your ideas down seems to be important. Writing online, I think that's a really powerful mechanism. Definitely, definitely.

Ben Reinhardt 2:47

The thing, the thing that I would say about writing online writing, specifically online is specifically as opposed to generically, like writing things that are like, very much like, oh, like, you're the person who wrote that thing that had like this very particular opinion, right is good. Also, just really, truly it's, it's once you can get a couple of people to be excited about what you're doing. It's like leveraging that, right. So it's like, the like finding, finding program managers by getting, like one researcher in a field to take you seriously. And then they like, introduce you to other people. And then look, that's how you bootstrap legitimacy? Definitely, I

Will Jarvis 3:36

don't know. I think that that makes it. That's a that's a great segue for the audience. Ben, can you talk a little bit about what you're building? It's really, really exciting.

Ben Reinhardt 3:44

Sorry, I got ahead of myself. So I'm building a organization called speculative technologies. We're a nonprofit research organization, modeled after after arpa. And the the sort of mandate that I've set out for us is to build new paradigms in materials and manufacturing. That's, that's sort of like the one liner about it.

Will Jarvis 4:13

I love that. I love that. And I know you spent a lot of time going to conferences, exploring manufacturing and new technologies around material science. Was there an aha moment where you realize there's a lot we can do here that we have not done yet as a species?

Ben Reinhardt 4:30

I'm not sure if there was an okay. I'm not sure if there was an aha moment around that. Can I can I tell you what, there was an apple. So the aha moment was was like that, like in in basically all domains. There are things that we could be doing that we're not doing, right. So the trick is, is is less to figure out where you can do things that you that people aren't doing, but to knit almost like narrow down. So aha moment was around the fact that we should be focusing on on materials of manufacturing, and that came from this, sort of the, like, basically crystallizing the, the opinion that again, many people may disagree with me on this, that the like, biggest, sort of like social and economic effects of technologies are all second order effects. And the and I can I can dig into that, but then the technologies that are like most likely to create second order effects are materials and new manufacturing processes. Like every time we create one of those, there's these this like ripple of second order effects that happen out in the world.

Will Jarvis 5:46

Can you talk about that a little bit?

Ben Reinhardt 5:48

Yeah, um, the example I, that I point to the most is how, you know, a couple of decades ago, like, not really not too long ago, overpopulation was an existential threat to humanity, right, like, you have The Population Bomb. And you have basically people worried about this, this exponential number of people leading to starvation and a cascade of effects that, you know, it was like migrations that would destabilize even developed countries and, and, you know, like, really bad things for humanity. And if you look around the world today, we passed the eighth billionth person in the world not too long ago, and like, not to not that much fanfare, right. And that's because over overpopulation, just like isn't a thing we worry about. And that is, in large part, thanks to the fact that we invented the haber bosch process, which lets us fix nitrogen from the air and create much more fertilizer than we could just using natural fertilizers. We figured out how to do that some amount of genetic engineering, so you have the whole green revolution. And in many plants in crops that are much more productive, and then more generally, like, we create a lot of technology that have made people a lot more wealthy, which, if tends to make people have fewer kids. So between the three of those, these, like, second order effects of technologies, this this existential threat was was no longer a problem. So that's, that's like, the classic one. And then we can like point to like, all these other things, right? Like, you know, it's like, we don't really like whales are doing a lot better, in large part, because we use electricity and natural gas instead of whale oil. Our cities are no longer covered in insert, not because we got made really good technology for cleaning sweat off of buildings, but because, again, we don't use coal for heating and powering factories anymore. Right. Like, and like, I mean, everybody points to the ways in which, you know, like computers have sort of like reconfigured society. Right. So anyway, well, etc, etc, the list goes on. But it's all. All sort of like, the social and economic effects are second order effects that were very hard to predict in the first place.

Will Jarvis 8:30

Gotcha. And so these positive second order effects. It sounds like you either think, too many people are focusing on software, and not enough people are focusing on manufacturing and material science. Is that correct? Or is it just hire less leverage to humanity to focus on manufacturing and material science?

Ben Reinhardt 8:51

Or, but I'm not sure if it's, like, I don't know, the balance of like, number of absolute number of people. Right. But I think that right now, there is a lot of work, like the work itself, like I can't think of a lot of work in well, even actually, rescind that even. There's even a lot of work in in, in computer science that's not being done. I just think that there is like, a particularly large amount of work that's not being done in materials and manufacturing, sort of because of, of institutional constraints. Gotcha. And so, and like, that's where we're, I see sort of, like, my highest leverage point, being, you know, it's like, yeah.

Will Jarvis 9:49

Can you talk about like, what are those institutional drag factors that you've noticed, that prevent people from making more innovation in these spaces?

Ben Reinhardt 9:58

So Let's see, let's, I guess what I like to do is like walk through the different institutions that we sort of have that better that are responsible for that, we would hope are doing this. So, in in academia, a lot of the incentives are around doing new things like really, really like, and especially new ideas, and like showing that that a new idea is feasible. So people will, will come up with like, with a new material, right? Or they'll come up with like, one piece of a manufacturing process, and then they'll say, Okay, well, you did it. I wrote my paper, I've done like, let's, and then, if they tried to do sort of, like, build on it, reviewers are like, well, like, and their peers are like, Well, this has been done. This is not, there's not new why, why, right? Why are you doing this. And so what it does is it creates things that, like, are completely unscalable are not that they're unscalable, but they require a lot more work to scale. You'll see this all all over the place where we're scaling, like materials, and manufacturing processes often requires as much research as inventing them in the first place. So that work is not being done in academia, and then or you get a situation where you have a whole bunch of components. And again, you need to do just as much research to put those components together into a functional system, as you do to invent the components in the first place. So that's, that's actually Kenya to, then we think about startups. And, like, startups are really great mechanisms for scaling things that you know, how to scale, and building products and selling things to customers. Right. And, and, like, that's, that is a great thing. But the kind of work that that I was describing, is still really researched, there's like, really sort of fundamental uncertainties in there. And so it just like does not make a good investment, both because of the levels of uncertainty, not just about, like, whether it will work, but whether it will like turn into a product even, or like something that you can cap. And additionally, the type of work that you need to do is often creates public goods, whether you like it or not, in the sense of like, if there's if you think of them as being like some very large design space, then like the work once you say like, okay, like this point in design space is the right point, everybody else can copy that, but it might take you like many years and millions of dollars to find that point. And like, that is that's like the opposite of a moat. That's exactly the anti moat. Yes. And then, and so between those things, and just like the timescales and amount of money involved, and the amount of value you can capture, it means that like doing this work is just not well suited for a venture capital back startup. Right. And then we might turn to industrial labs, as as sort of a third and final institution. And, you know, it's like this work was in the past, done by industrial labs, like Bell Labs, they, you know, your, your classic example. But sort of due to a combination of restructuring of the industry and like a lot of outsourcing of r&d to startups, partially because of that, partially because of just increased investor expectations from the public markets. And then third, just in terms of like, the the companies that sort of have the, the, the slack to do really sort of speculative work being primarily software companies now. You don't have companies doing this sort of work, especially when it would sort of go contrary to their main product line. So so they'll do research, when it's like, okay, like this, this will, like, augment our main product line, but when it's something like, Okay, we're gonna, like, reinvent the process by which we make this thing like they have no incentive to do that. So those that that is a very long explanation of why this sort of work has not have a home in any institution right now. Right. That makes sense.

Will Jarvis 14:47

And how difficult has it been been to convince like philanthropy and funders to fund it? Because it makes sense, right? There's no place that does this right now. And It's like it is speculative, speculative, it's in the name, right? It's speculative technologies. It's like, we're not sure we're gonna find somebody, we'll probably find something out there. We're not exactly sure what its gonna be. You know how it's like, that sounds like a difficult pitch, you know, I just finished fundraising. And it's pretty hard to fundraise. And we had this pretty, pretty concrete thing where we're selling. And I mean, it sounds like a pretty difficult thing to go out there and do but you've been successful at it. Can you talk about that process at all? And how you think you've made that work?

Ben Reinhardt 15:26

Yeah, I would say I've been somewhat successful. I mean, I like I need to be more successful in order to sort of achieve achieve our goals. Let's Let's call a spade a spade. I mean, right now, our funding has come from very generous donors who kind of get it already, right? Like it was not, because they did not give us money, because I convinced them that this was a problem worth addressing. I like that, that is the I would actually say like, that's sort of like, the biggest next thing that I need to do is really like start trying to convince people of this. And so in that sense, it was a matter of finding. funders who already realized that this was this was an issue worth tackling. And doing the slightly easier argument of like, the way that the way that I'm proposing to tackle it has a chance of succeeding. Gotcha. So that's what they're betting on.

Will Jarvis 16:51

Like that. So you start with initial, I think there's a good lesson here, though, initially, you start with a group of core people who are sympathetic to what you're building, and you come to them and say, Hey, like, I've got this really good plan to go out there and try and solve this. You know, what do you think about this plan? Like, would you be interested in supporting this? And then you bootstrap to start convincing people as you build success over time?

Ben Reinhardt 17:12

Yeah, I assume I assume it's similar to building a startup, right? Like, you're gonna go, yeah. Your initial customers are gonna be the ones that like, get it. Exactly. And then once once they start sort of like having a lot of success and getting the testimonials, then maybe you'll start to convince other people who right now or skeptical, but like, then once you show them momentum,

Will Jarvis 17:35

exactly. You get these early adopters, right? And then you can move into like the more general public over time, as you

Ben Reinhardt 17:42

succeed, see, building building things, it like building new organizations is the same. The domain

Will Jarvis 17:49

is very wide. So it's a wise observation. I think this is it's definitely on the money. So I've been out of my curiosity, I wanted to how are you think about finding program managers? And can you talk about what the program manager role looks like? They are program managers. Right? That's the right, I'm using the right term there. Yeah.

Ben Reinhardt 18:06

Yeah. I'm not sure that that's exactly the right title. Yeah, that may change in the future, but like, DARPA calls them program managers, that seems like a reasonable name. So the problem with it is that they're, they're PMS, you also have product managers and project managers. And all three of these roles are are wildly different. So anyway, how do I go about finding them? So the question is, how do I go about finding them?

Will Jarvis 18:41

So can you describe the role and then we can talk about you know, like, ideal, who, you know, who slots in there? And

Ben Reinhardt 18:46

yeah, so the the role is effectively to be kind of like the mini CEO of a specific of a program and what I mean by a program is a roughly five year sit like five year thing that starts off by doing a lot of planning around basically like, what, what projects need to happen within this program umbrella, who's going to be doing those, those projects, like why are we doing this whole thing in the first place? What's going to happen at the end of this thing? And like, you know, what are the risks? I right now are rough framework is trying to first like go through and answer the questions in the homebuyer catechism, which is like, what are you trying to do describe it with zero jargon to how's it done today? I may be mixing up the order on these three What is new in what you're trying to do? For who cares? Five? What are the risks? Six? How long will it take? And seven? How much will it cost? I may have missed one, put in the show notes. But anyway, let's just roughly answer those questions anyway. So like, you plan it, and then the program managers job is to, like, figure that out, and then figure out like, who at other organizations we could work with, give money to, in order to work on separate projects, that all sort of, like, have to work together towards building, you know, a final or final goal. So that's the role. And then the way that I go about finding them, frankly, is mostly some combination of telling people I know, like, Hey, I'm looking for people who might have really ambitious and good program ideas. Yes, introduce them to me. And then to kind of having a very, like rough sense of, of a program that might might fit into the organization. You know, reading, reading a bunch of papers in that area, and then contacting the authors and being like, Hey, I read your paper. I'm really interested in like, you know, just like what you think about this more broadly, do you think that there's room for programs there? And then if they're like, oh, yeah, like, there might be room for a program there that I'm like, Oh, cool. Like, do you know anybody who might be really great at at running that? And then, you know, it's like, they'll introduce me to other people. It's like, and then put me to other papers, and then you wash, rinse and repeat.

Will Jarvis 21:46

Make sense? Make sense? And are there any characteristics you found that make people successful in these types of roles? Are they kind of like, inside are outsiders like, you know, do they like they know the field? Well, but they're not exactly they fit the mold of like, your average like, person who who ends up as a tenured professor at in academia? What kind of characteristics these people have?

Ben Reinhardt 22:08

Yeah, so So, like full disclosure, I'm still figuring this out. So I can tell you something like, I'll tell you my current height, no, I can tell you my current hypotheses, I just yeah, like, want this to like, like, have like, high epistemic uncertainty about what I'm about to say. So I think what it so whenever someone's doing one of these programs, it's going to be like, broader than any one person can have done. But they should have, like, some strong experience in like, at least one piece of what the program will be. They need to have done, like, some amount of like, real physical research. And so what I what I say is, like, they don't need to have a PhD, but you need to have done something like, like that, right? Where you're like, I spent like, like, you know, what it is like to suffer while trying to get the like, real world to yield up and secrets in doing something that nobody's ever done before. Right? So it's like, yeah, you don't that's that's like, pretty hard requirement. And then beyond that, it like, it's, it's there's like, it's like this, like some combination of like curiosity. But like the curiosity of a scientist, and in critical thinking of a scientist combined with like, the hustle of A and the hustle and ambition of a startup founder, with like, a giant dash of epistemic humility is kind of like, the general recipe.

Will Jarvis 23:55

That's awesome. That sounds hard to find.

Ben Reinhardt 23:58

Yeah, it's really hard.

Will Jarvis 24:01

Not impossible, which is good. You know, like, like, it says, is most of your job it will ended up being recruiting at the end of the day,

Ben Reinhardt 24:10

I think. I mean, unless, unless, you know, so that ends up being someone else's job. Right. Like, that's, again, similar other things that are the same with startups. Right. Like, at the end of the day, the founders job ends up being just like recruiting and fundraising, for the most part, right. Yeah, I would estimate that there's like, under 10,000 of these people in the world, like that's, that's kind of like my rough.

Will Jarvis 24:42

That sounds about right, rough hunch. Yeah, it's about 1000, though.

Ben Reinhardt 24:47

It is much more than 1000. I suspect. There's more than 1000. And I suspect to some extent, it can be trained. Like I don't Yeah, I think then that's kind of the hope with building a new institutional structure, right? Is that like, at first, the only people that you can get are the ones who like through some set of luck are like, good for that institution. But eventually, like institutions kind of generate people who are, are good for them. Like, yes. I don't know. Like, I would argue that, because startups became such a big thing. There are more people who would make good founders in the world, then, right. Then there were like, in the 1980s.

Will Jarvis 25:37

Yeah, Matt, Matt Clifford talks about that, you know, what to? His question always is in a given country, what did the ambitious people do? And if you're in Singapore, the Yeah, civil service or something like that. And then and perhaps with a in Ben Reinhart, Stan, you know, people go and they've come program managers. That's what

Ben Reinhardt 25:55

I agree with. I agree with Matt on most, like, by default, I agree with Matt on things so

Will Jarvis 26:01

smart guys forgot. Yeah, exactly. That's cool. So Ben, other than fundraising, and recruiting and everything, and trying to do everything all at once, which, you know, building new works is, you know, what is the single biggest challenge you face so far? That if you could wave a magic wand, and alleviate, what would that be?

Ben Reinhardt 26:22

Besides, besides fundraising in recruiting? Mmm hmm. I have to go like pretty far down in my life. My my priority list, let's biggest challenge. I mean, so like, I guess, like, interested like, this is this is not particularly. And I guess the kind of is tied to those is like a broader question of like, how do you know that research is good? Like, like, like, that, like that challenge? Right? Which is like, both sounds incredibly philosophical. But then it's also like, like, how will like the question of like, how will we know when we're successful? Right? Like, what, what does that what will that actually look like? And then the, on top of that, is, is there any way to get leading indicators of the fact that, that we're doing good work? Right? Yes. Because it's like, you can see, throughout history, like both like inventors and scientists, who don't see the impact of their work for, until after they're dead, right. Yeah. And that's like, that is both hard to to course, correct on and also hard to convince other people that we're doing a good job, if that's the case. So, so really trying to figure out like, how do you? How do you judge yourself? Is, is I think, a big challenge. That is,

Will Jarvis 28:03

it's a huge, it's a huge challenge in the research space. I have you do you have any sense of like, how to go about, you know, measuring these things, you got to talk to Don Braden, a long time ago, he had some labeling, which I cannot quite recall, just checking in with people. And if they're still like, following interesting paths or something, I don't know. What would you think? Yeah.

Ben Reinhardt 28:21

Yeah. Um, I mean, right now, right now, the, the hunch we're acting off of, is sort of tied up in these roadmaps of, like, here's our hypothesis about like, what the things that we would want to hit in order to achieve this technology and sort of like, almost like, really going deep on not necessarily a justification, but like a reasoning behind all of it to ourselves. So you can say like, okay, like, we think that this technology is worth building, because it will have like, these general purpose, because like, it will have, like these general purpose uses. We could potentially imagine a future where, where it could people could do this. And then like, here are the biggest risks and the things that we need to do to show that these are not risks are like XYZ. And so it's almost like kind of just building up this like, really big causal chain. And I think at some point, you sort of just need to say like, okay, like, are we executing on this causal chain? Yes, no. How are things going? But, but I think it's really hard to it's like, I might almost push back against the idea of like, measurement per se. Got it. In the sense that like, I think that that measurement involves like, somehow We're making like a universal, like a universally transferable sense of something. Yes. And, and I think, almost, again, this is this is not something that many people would agree with. But I think that I think that we've lost in that we need to do is kind of build like these like chains of trust, where it's like, okay, like that, like, I build trust with the program manager, they build up trust with scientists, the scientists build up trust with each other. And then, like, get everybody to be really honest, and just sort of say, like, like, Is this is this working? Is this stupid? Right? And go from that. And it's like, that's, I realize, like, deeply unsatisfying to everybody, including myself. But I think like, I think this is, is a thing that has sort of been lost and like, on the margin, we need to do more.

Will Jarvis 31:03

With does seem like a lot is lost, if you just get obsessed with the free rider problem. And you're, you know, and all you're trying to track is not getting, you know, like on the margin, someone running off with the money or something like that.

Ben Reinhardt 31:17

Yeah. crackpots? And it's not, it's not it's not zero. Exactly,

Will Jarvis 31:25

exactly. It's something like so if we were talking about Matt Clifford, earlier, and one of the things he mentioned on how he can identify if one of the startups and entrepreneur first is doing really well, is the number of positive surprises that frequency, do you think something like that might might might work as well? It's not like so much that, you know, hard metrics, but wildly interesting things are happening quickly. Yeah,

Ben Reinhardt 31:51

I think that's probably a good one. And another one. So I'm not sure if you know, this, I actually worked for Matt. Yeah, I worked from it in. In 2019. I worked at entrepreneur first and Singapore. So I was like, intimately involved in this question of like, how do we know if, if, if founders are doing well. So so like another, another sort of, like leading indicator that actually was was pretty strong, was like, just like, like, how much they get done. Interesting. And I'm actually yeah, like, now that you bring that up? Like, I think that that's actually a pretty good indicator, even in science. I'm sorry, not science, but like in, like technology research, because because I think we want to exclude the kind of like Einstein going off and like spending 12 years figuring out general relativity, right. So it's like, there definitely are domains where you want to see people just like, like, it is possible for people to just go off and solve for Mars last theorem or whatever, you know, in a room. I don't think that we're there. I think that what you want to see, when you're doing kind of experimental building focus research is still just like, oh, like, tried this didn't work. Doing this other thing. I had this idea I like if I executed on it, it was a bad idea. Right? Like, you want to see that, that iteration speed. And it doesn't necessarily mean like pivoting just means like, like, some some like level of activity.

Will Jarvis 33:37

Yes. I was having Friedman, describe this to me, as he said, Well, you've got like a very low powered flashlight, and you're running around in the dark room looking for treasure. And the only thing you lever you have is moving around faster. It's like, that's how you should think about finding product market fit, which is may be related.

Ben Reinhardt 33:56

Yeah, I think it's not. It's like not quite, it's not exactly the same for the same analogy. But I think that there really is something to just like, doing smart things like and like I almost think that like planning, planning itself can be one of those things that you're doing right? So if you're like, like I wrote down like these five possible scenarios, and like rule like these two out and talk to these two people about them, right? Yes. I would look at that and say like, oh, yeah, like that's, that's great.

Will Jarvis 34:28

If not just flailing about or something.

Ben Reinhardt 34:30

Yeah. analogy, that, that Peter van Hindenburg. I'm butchering his name he runs Incan switch gave me that I loved is this term of building better, which is from boating, which I don't do at all, but like, unless you have like water jets on the front of your boat. You can't turn unless you're moving. It's right. So so like in order to be able to change the action in a boat didn't move at all. So it's like something around that. That's really good. It's really important. But but at the same time, like, right, like, it's like, the tension there is like, how do you like what is what is like good action versus like flailing action? Right? Yes. And that, that. I don't know how to try to discriminate that.

Will Jarvis 35:27

Maybe it's like obscenity, you kind of know what when you say it, or something like that, which is not helpful, but like to describe on the podcast, but perhaps is true.

Ben Reinhardt 35:35

Yeah, I think so. I, like I'm kind of optimistic and confident that if we pay attention, it might be possible to come up with like, better theories about Gotcha. About how that works.

Will Jarvis 35:52

What's my beautiful successful? Yeah. Ben, Ben, you're you're super smart guy. Why pick this problem? In particular, I've realized I've never asked you this. Oh, you got a lot of options. Right? You know, yeah, see all kinds of different stuff. But this is appealing.

Ben Reinhardt 36:08

So like, the really honest answer is because I want there to be more awesome sci fi s**t in the world. That's awesome. Like, that's actually it. It's like that. That's what I want to happen. And it's like, I, I've managed to convince myself that this is the best way that like, I give it like, do it. Like, given my set of skills can can try to make that happen? Frankly, yeah,

Unknown Speaker 36:40

I love that. I love that.

Ben Reinhardt 36:42

There's nothing more profound, profound to it.

Will Jarvis 36:45

No, that's great. That's it for you personally, are there any technologies you're super jazzed about that you think has just been overlooked?

Ben Reinhardt 36:53

I mean, my my sort of big one is, is general purpose teller robotics. So basically, the possibility of through some system, you could imagine, like putting on a headset, and going into some contraption, basically being able to seamlessly act through a robot anywhere in the world. And so the reason for that is some combination of a belief that I think like automation, like general purpose, automation, is going to be much harder than many people think it is. And the fact that it is it's not just sort of like automation, but it's actually like, allows people to effectively teleport, to like, recall, that's something that that really would excite me is like, a, a scientific lab, where you basically have collaborators all over the world working together. 24/7. So you have like, different shifts based on different places in the world. And everybody just was like, seamlessly handing off. And that's just like, really not even something that people are thinking about automating anytime soon, but is like, yeah, so anyway, that's, that's, that's one.

Will Jarvis 38:18

I like that. And you said something interesting there that, you know, general purpose automations can be much harder than people realize. We were talking to a Facebook, email engineer, he works in automation, you know, general prefers automation, or he did at the time. And that's one of the things he mentioned, as well, it's like, you don't realize how hard a lot of this stuff is. And we see that even with self driving cars, it seems like they're always, you know, perennially, five years away or something. Yeah. You know, maybe we're getting there now.

Ben Reinhardt 38:45

Yeah, I'm kind of bullish on the cars. You know, it's like, you can you can ride around in San Francisco and a cruise car. That's true. Maybe like not like, yeah, I don't know how well it'll go from city to city, but like, but in terms of like, the robotics automation problem? Yeah, I think so. It's hard. It's really hard. Again, like, I think, I don't know, I can arguments about this on Twitter, sometimes. Yes. And, you know, it's like people, people who have have some amount of training in an area are often the like, the most the ones who are like the least able to predict a paradigm shift. So, you know, it's like, I could be completely wrong about this, but it's just like, I don't I don't see the mechanism by which a lot of the advances that we're seeing in AI on computers, which really depends on like, truly obscene amounts of data. I don't see that translating into the physical world without some, some sort of discovery about how to do things differently.

Will Jarvis 40:00

Gotcha. Something like, I think you mentioned this to me, but when we were having coffee, but it's something where there just isn't the same data layer that we have for text for the real world.

Ben Reinhardt 40:09

Yeah, exactly like it's, yeah, we just don't. It's like, literally everything that goes on in a computer can become data for training for trading, like a large language model or something. But we don't have anything like that in the real world. Right. So it's like, so hopefully, I'm wrong. Right, right.

Will Jarvis 40:33

But that'd be great. That'd be great. So So do you think? Do you think the effect of large language models are being somewhat overrated right now? Like for the next 10 years of human productivity?

Ben Reinhardt 40:43

I think so. I, I think that we're going beyond my mindset. But like, sir, I think I think like the thing that I would say is, like, I think like my, sort of what I'm making is a very scoped claim, which is that like, I think that the effect of large language models on doing things outside of a computer is going to be limited. I think like that's, that's sort of my like, inside of a computer. I I have I have no have no have no way of knowing.

Will Jarvis 41:24

Gotcha. Great does Oh, yeah. That makes everything that makes sense. And it directionally jives with with my thoughts. Ben, I want to thank you for taking the time to come on. specular technologies, it's been a ton of fun specular technologies, what can the audience do? Are you looking for any money? Are you trying to recruit for anything? Is there anything we can help you with?

Ben Reinhardt 41:46

Yeah, very, very concretely if you know anybody who wants to donate. That's, that's always always appreciated. Always looking for good program managers. If if there is a some technology that is currently bottlenecks in materials or manufacturing that you think could be really big if true. Get in touch. But yeah, and just sort of spread the word. When this airs, the website should be live. They'll be great. Do you have a domain for it yet? Yes, it is spec. Dot tech.

Will Jarvis 42:24

Perfect. Love it. Love it. That's easy. That's it for

Ben Reinhardt 42:26

speculative technologies.org I think both of them redirect.

Will Jarvis 42:30

Awesome. Love that a little bit. Well, Ben, yeah. Thank you so much for coming on. Again. Really appreciate you.

Ben Reinhardt 42:34

Thanks for having me. Well, it is always a pleasure.

Will Jarvis 42:37

Definitely. Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Unknown Speaker 0:37

Well, Julian, how are you doing this morning?

Julian 0:40

I'm doing great. How are you? Doing? Great.

Will Jarvis 0:42

Thanks so much for taking time to come on the show. Do you mind giving us a brief bio on some of the big ideas you're interested in?

Julian 0:49

Sure, I'll keep it really brief. I come from a fairly non traditional background when it comes to tech, went to music school dropped out. And when I was in Boston, that was kind of when I realized that I there was so much to the world of technology that was beyond just what programmers might be building. There's such an opportunity for people who have different skill sets to contribute and to build the future. So that was the that was the thing that really got me into technology, which is being in a city where there was a lot of technology being built. But we can go into different areas of my background, I think that the thing that I've realized quite recently is the thing that gets me really excited is really the intersection of ideas, people and creation. And that can take a lot of forms. Right now I'm really focused on people who have great ideas that are building startups around them.

Will Jarvis 1:40

I love that I love that. Well, what in particular about startups makes them so compelling, you know, they're really compelling to me, they're really compelling to you. But to the listener who may be less involved, maybe they work at a big corporation, or a government or nonprofit, what makes startup special?

Julian 1:56

Well, I think that startups in general are fairly permissionless, right? In the sense that, you don't really need to get permission to go and try and build something. And a lot of the infrastructure that keeps getting built, to allow more people to create things just kind of increases the level of permission, lessness, right. Prior to prior to, you know, AWS, for instance, Amazon Web Services, you really needed to have a significant amount of money to actually buy a server and run a server and things like that. Now with AWS is just one example, you don't need the permission of somebody who's going to fork over a bunch of money, you can actually get started extremely cheaply. And if you're in a program, like something like on deck or something like that, AWS actually is partners with all of these programs essentially give you credits for free. So it cost pretty much nothing to run a server nowadays. And it's also based on usage versus, you know, having a fixed server cost. So things like that, just really allow people to go and create the things that they want to build. And then if you look at something like even like sigma, which was recently acquired, that was a company that was started because of all of this technology that came before it, that they were able to build off of. But it also created the platform for other people to go out and make things. You know, Adobe used to be very expensive, it still is. But figma, you know, started out and it was free for you to individual users. So I think that that's, that's one of the big things here is, as as time has gone on, and as technology has developed, it's been become easier and easier. Well, I should not say easier, it's become cheaper to start startups, it's still very hard. But the challenges have changed.

Will Jarvis 3:38

The bank sets up, what do you think that the challenges have shifted to, you know, like you said, we've seen this kind of deep, massive decrease in cost, not the by the big servers anymore, you can just go ahead and get started spinning up a simple web app, you know, probably for free and get, you know, 10s of 1000s of users without having high upfront capital costs. Where do you think the barriers have shifted to now at this point in time?

Julian 3:59

It's a great question. You know, my, my general inclination is that, you know, there are a lot of things that were kind of just obvious, and more and more obvious, in hindsight, but I think were obvious to a lot of people who are early to the internet. That was actually obviously before my time, but this idea that there were so many things that can be built, that were kind of like the simple things. And, and now, of course, like all of those simple things have been built. And there's usually like 20 different, you know, versions of them. I mean, just think about, you know, some of the some of the things like note taking apps, right? There's gonna be more note taking apps in the future. But there also are a lot of note taking apps that can solve a lot of people's problems. But at one point, there weren't many, right. And at one point, there weren't many, there wasn't a place to store your photos online, right, or backup your photos or to share your photos, right. So the challenge has gotten to be that you really need to have something that breaks out and solves a fundamental problem, but a lot of the base problems have kind of been solved.

Will Jarvis 4:57

That makes sense. So how should founders operationalize that it seems like it is a real challenge that a lot of low hanging fruit has been picked. But the greatest founders, I think of like, you know, Parker, Conrad at rippling seem to find a way to, you know, get behind that kind of event horizon of, of what is possible. And perhaps you know, for rippling it's this combinatorial thing where maybe if you could build the entire HR and IT stack together, you could get lower costs, you kind of vertically integrate at some level. What do you think the right framework is for founders to use to find those new ideas?

Julian 5:32

Sure. So I think there's, there's two things. And the first is really thinking about as you're thinking about, from an investor perspective, you really want to think about not just the founder, but you want to think think about the market that they're building in. And traditionally, what people say is bet on the founder or invest in the founder. And it's really all about the founder. And yes, like, it really matters that the founder is a good founder, that they think about things the right way that they are driven, that they can hire, that they can retain talent that they can manage, potentially, if they're going to be the CEO. But the other thing that I think gets a lot, that doesn't necessarily get the attention that it deserves, is the market. And, you know, when you when you brought up Parker, he's the exact example of a person who thought so deeply about the market and the need for a different type of solution in the market, or the opportunity for different types of solution. So I think it really comes down to evaluating the market. And that comes from the founder perspective, you know, do you really want to spend your time if you're a, you know, an exceptionally talented person, you want to spend your time banging your head against the wall of a market or an opportunity that doesn't really exist? Or is there or is worth your time to actually, you know, figure out in advance, what kind of market should I be building? And what opportunity should I be pursuing? And then also, like, there's this debate as to whether or not, you know, sort of like markets are sort of like willed into existence, or like opportunities or of a world into existence, I generally think that that's true. It takes you know, there, as you said, rippling is a good example of a place where there's an ultra saturated market, a lot of people would have argued that the opportunity didn't exist. But you know, if you can see an interesting angle, and then you actually can willed into existence, then there's usually a big opportunity in a market where there's, you know, low NPS.

Will Jarvis 7:15

I love that. I love that. How much do you think luck, luck plays into these things? And how much of it is just willing things into being at the end of the day?

Julian 7:26

Yeah, I mean, look, I think that ultimately, you have to be, you have to be lucky. But at the end of the day, it's like, it really does come down to a combination of things, right? There's a really good song that I liked that I can link to that, that essentially just shows that like, yes, ultimately there is determination, where it has to do with the work that you put in the people that you hire, but you can't predict everything that's going to happen. And and ultimately, you know, it luck, luck does play a factor, but wheeling into existence is really a thing. That that I think, you know, people don't want to accept is actually the the main the main form of the outcome, the main thing that drives the outcome?

Will Jarvis 8:05

Well, we can't control like, so it seems like, you know, it's something that's that's best, like ignored at some level, you can only control your inputs. I'm curious, when you first got started, let's say with ondeck? Sure, you know, how much of a hunch did you have that it was going to be, you know, a big deal, and that you were going to you know, build a really great company around it. What were you were you sure it really sure when you got started? Did it like? Did you have these hunches along the way? Like, what did that kind of look like?

Julian 8:33

Yeah, so I think that it was, it's worth going over the history there. So, you know, ondeck started as a community that my co founder, Eric built, and it was really just casual dinners, happy hours, that sort of thing for people who are looking to explore starting a company, and, or even explore what was next, maybe they were looking at leaving their job, and maybe starting a company was one of the options. But it was this very informal, informal community for people to explore what might come next. And that was a really powerful idea. As it turned out, there were a lot of people who maybe they were a job that they didn't care for that much, or they felt there wasn't actually going to really take them to the place that they wanted to be. And having a space for like minded people or people who are in the similar sort of time in their lives was really important. I think that the the thing that was very interesting about on Deck is that people were essentially trying to pull a product out of us as I started running dinners. David, on deck CEO started running dinners as well. And these were all just informal affairs. But people kept trying to get us to do something that was a little bit more structured than these one off dinners and happy hours. And that was really interesting, because people were trying to we felt this poll, right. And the poll ultimately meant that we were able to build something that people wanted because they were telling us specifically what they wanted. And now ultimately, we've had to do a lot of iterations on that but it pretty much directly led to the ondeck founder Fellowship, which is remaining is our flagship program, you know, four years or so after after starting the company around on deck. And you know, we're in our 15th cohort coming up. I've seen so many incredible companies get started out of it, somewhere around 800. At this point, they've raised a billion dollars. And ultimately, I think it really comes down to like, sure, there were a lot of there are a lot of people working in sort of the accelerator space. But there were almost no one. And still, to this day, it seems like in my opinion, a very big opportunity is the pre accelerator phase. accelerators, you need to have a co founder, you need to have an idea. Typically, you need to have traction. And what we said is, we said, hey, there are a lot of people, potentially a lot more people that are starting companies today, who might get off the sidelines, who might get off the fence, if we actually help them find the missing pieces, right. So maybe if we can help you find a co founder, or if you can help you figure out your idea, or if you can help you figure out what your go to market might be, maybe that's the difference between you starting a company or staying at your job. So ultimately, I think that there was there was a lot of the product full there. And this novel idea, which was, hey, we can actually increase the amount the amount of founders if we just help, you know, catalyze creation of companies. I love that. I

Will Jarvis 11:12

love that. What lessons do you think founders can draw from that when they're they're building products? And you're right is something like, you know, you need to be in the search space for a while. And something will make itself clear, given enough time, if you work hard, or is there, there's something else to draw from that.

Julian 11:28

So I think the answer is annoying, because it depends. Ultimately, some people have these insights that they've somehow gotten through work or through side projects and things like that, or through conversations with friends or family members. But ultimately, far, far more people end up having to go back to the drawing board multiple times. And I think one of the biggest, the biggest mistakes that we see is the people who go out there, they they have extreme conviction, when they probably shouldn't, they're kind of lying to themselves, and they go out and they try and raise money, they might even succeed in raising money, which is actually, in my opinion, one of one of the worst things because that almost validates this idea that they have a good idea. Because now people are giving the money to go and pursue it. And then ultimately, when that happens, it means that they're kind of driving themselves down that down this one way path. And it's a lot harder to rewind, and a lot harder to sort of start from scratch again. So what we try and do at on deck and I try to do what I'm just working with founders one on one is really trying to encourage them to not go with the first or second idea unless they have extreme pull towards the idea from customers or something like that. And really try and figure out, you know, what it is that they should be building and not just immediately jump into it. Same thing goes for co founders. Yeah, I think that generally speaking, you shouldn't just go with the person that you've happened to have worked with who may be interested in starting a company, you shouldn't necessarily go with the first person that you talk to. I know it's, it sounds probably very silly, to some people in the audience who are a little bit further removed from from tech startups. But there are a lot of people who just end up going with the person who happens to be closest to them at the time to decide that they want to start a company. And it usually doesn't go well. Right. Right. Right. Yeah.

Will Jarvis 13:12

It's kind of like getting married, you know, when you just you somebody walks in, and he's like, Let's get married for 50 years and be great. And you can bet each other pretty much not a good idea. Speaking about that, how do you go about finding a great co founder? How would you recommend people do that? Is it just, you know, iterating more, having more conversations and finding someone who's a good fit, not taking that first person? Is there more to it that you recommend?

Julian 13:35

So I think there's, there's a couple of things. One thing that I like to say is align on values before aligning on ideas. And this is this is, you know, again, it might sound it might sound silly to people, but you're really describing sort of what the ideal outcome is to someone else, you know, a potential co founder is important, right? The idea that you might not want to sell your company for $20 billion, you might want to actually take it public. Or it might sound like putting the cart before the horse, but I don't think it's actually true, because there will be some people where they get an offer for what could be a life changing amount of money. And they will, they will want to turn it down because they want to continue to build this really big organization, but the other co founder might actually, you know, want to want to sell. And I don't think that either of those are actually bad, necessarily, as long as there's alignment between the founders on what they want. Another thing is, you know, very common, which is like work life balance, right? I first of all, I think that founders really don't have the opportunity to have much of a work life balance. But when they think about sort of their hiring their team and things like that, or of course, like remote versus in person versus hybrid. These are all important things. And then of course, just like how to treat people, sort of like what what are the cultural values? I think it's really important for companies to have non values as well, which is this idea of sort of what the company isn't about, or reasons that you might not want to work at the company. But I think aligning on these things is actually much more important. Because ultimately, the idea and sort of the the product creation process usually will happen. After you've sort of aligned on your co founder, it's usually not a thing where you go out, and you figure out your idea. And then you go and recruit a co founder, this happens occasionally. But generally speaking, I recommend that founders have some ideas or have some interest spaces, but don't necessarily kind of get really aligned, or don't really figure out exactly what they want to build until they have the co founder that they want to build it with. And then they go, and they co create the idea together.

Will Jarvis 15:38

That makes sense. So you're kind of iterating the search space together if you have a partner that can help you tell beachy chapter thinking etc. It does seem to me like that, that's super valuable. Because if you have someone else checking your thinking, it's easy to have one person who's a kook, but it's harder to have two people or more people than that, you know,

Julian 15:55

I think it's good. I think it's also good. I mean, being kooky is not necessarily a bad thing. I think it's like, if you are aligned in your kookiness, I think that's really good. Founders in general, I think are just kind of weird, or at least some of the most interesting ones. And, you know, I think you need to be weird together. Right? If you're weird, and the other person isn't very weird. And you don't really get along in that way. And you don't sort of see eye to eye on these kinds of like, probably, I would describe them as eccentricities. If you don't, if you don't sort of have those aligned, I think it's it becomes a lot harder to actually build something sustaining together.

Will Jarvis 16:32

That makes sense. I'm curious, how important do you think it is to be mission driven? At the end of the day, when you're building these these breakout companies?

Julian 16:39

I think it depends, because there's really two, in my opinion, there's two types of founders. There's the ones who really love the problem that they're working on. And they're the ones who just really love building businesses. And problem solving more generally, think it's, I think it's a lot harder to be one of the founders who really cares about the mission of the company, at the earliest days, because the mission might slightly change, change, given given the nature of, you know, early stage startups, they haven't found product market fit. So they might ultimately morph into something that the founder is less excited about. Having said that, I think that if you are mostly directionally keeping it, keeping it going, and the way that you you thought you were when you were going into it, I do think that's generally good, right? I heard some some story about how you're, for instance, still in field with figma, they were trying to build something, it was like a meme generator, you know, to start when they when they dropped down to the till fellowship. And they just weren't excited about it. You know, they realized, like, is this the thing that we want to spend the next, you know, a few years of our lives on building a meme generator company? Now, there are probably people in the world who that's extremely fulfilling for, right, who love comedy, who think that comedy and sort of like spreading interesting ideas and jokes across the Internet is really valuable. Right. But it wasn't for them. So I think it's really important to figure out like, what's the thing that actually gets you excited and motivated? And ideally, your co founder as well? Because ultimately, if there's misalignment on that, that's a pretty, pretty, pretty big challenge.

Will Jarvis 18:11

Yes, it seems like quite an issue. I'm curious, you guys have been quite successful at merging co founders together helping people find co founders, which kind of went against the grain in Silicon Valley. And in tech that, you know, you had have known your co founder and grown up in the womb together or something like that, to truly be successful. How did you guys realize that that was kind of a $20 bill on the sidewalk? Was it just like seeing a couple of examples of at work, where people had kind of engineered that kind of serendipity? Or was it just like, I don't know, I a thought you came up with kind of from first principles?

Julian 18:45

You I think it's definitely one of those things where you start to see it happen. And you know, when it's when it's once it's like an anecdote, but like, you actually start to see a trend. And that that's when you get really excited about it. But I also think that this is a thing that yes, we we discovered, we've had a lot of success with. And I would say that some of our fastest growing companies, I think I've looked at it was something like 10 of the, the top 20 or something like that. Companies in terms of the amount raised are actually one of the co founders, at least one of them. Sometimes there are three co founders met the other co founder or co founders through on deck. So it's just a, it's a very surprising thing to see how these pairs have actually done really well at fundraising. And usually, you know, the conventional wisdom is, it's hard to fundraise if the co founders don't really have this deep, long term relationship where they've known each other as you said, you know, they've been coding together since they were in the womb. You know, it's it's interesting to see that shift happen, but it's not a shift that has gone unnoticed. Right, because about a decade ago, there was a video of Paul Graham talking about, you know, whatever you do, make sure you only work with a co founder who you've had some prior work experience with that you have had a relationship with, right. And that was really, I think, the operating principle for YC, when it came to them screening applications, for the most part for quite a while. Now, obviously, there were exceptions to that. But that was the general advice given. If you look, now they have a co founder search tool, right? You're on deck does a lot of co founder matching, there are other people who are now in the co founder matching game as well. And you're seeing YC take that shift from Hey, like, make sure that you have worked with this person before before co founding a company with them to like actually having a tool out there is a really big sign in my opinion, that you know, that things have shifted and that everybody is acknowledging that even people who used to have a hard and a fairly hard and fast rule about it.

Will Jarvis 20:44

Yeah, that makes that makes makes a ton of sense. I'm curious, are there pairings you've seen that work really well, kind of like two in the box? You know, maybe once more business minded once more technical? Are there other other pairings that seemed to work really well that or is it just kind of there's very little pattern to these things.

Julian 21:01

So this is less about co founders that meet through on deck, but just more about co founders in general, I think that the biggest sort of red flag, if you will, is when people, you can't tell who the CEO is, if you can tell who the CEO is. That means that usually that means like, when somebody says that they're the CEO, and it kind of feels awkward, you can kind of feel this awkward energy. When that happens, that shows that there isn't necessarily a huge amount of alignment and sort of happiness around that decision, necessarily, or there's some sort of hesitance. And I think that's actually one of the biggest things in the early days, it's very important to define who the CEO is, if you don't have that happening, you ended up with all sorts of weird things going on. And ultimately, I think that's probably one of the biggest causes of co founder breakups is the fact that people actually wanted to be the CEO. No, they weren't the CEO, maybe they should have been the CEO, by the way, I'm not saying that they shouldn't have been the person who wasn't CEO. But But ultimately, that that is one of the things I think is important to look for. Another is, I think, it really depends on the business sort of the skill sets, ultimately, there is going to be a need to be a person who is kind of running the sales and like building out sort of like the Oregon fundraising and things like that. And there needs to be a person who's building the product. You know, they don't have to be technical and non technical pairs, right? There could be two people who are very technical. And one of them happens to be, you know, sort of the CEO of the business and is running sort of the sales stuff, and actually like doing the fundraise. So I don't think it really matters quite so much, you know, technical ability. But I do think that, generally speaking, it's extremely hard to start a company if they're, you know, one of the co founders had doesn't have some pretty significant technical skills needed to build something, it seems like, Yeah, makes sense. So I mean, it is changing slightly, because, you know, people are able to prototype and to build, like fairly substantial things using lower no code. I think this you know, we're talking about kind of the the barrier points to actually starting companies, no code has been absolutely huge for that. You could build a lot of infrastructure. In fact, on deck, I don't think that we wrote a line of code for the first year of ondeck, as a company, because we were just using zaps, and we were using air table, and our admissions process, you know, it was was pretty sophisticated at the time, but we were able to build a really great business, using all these off the shelf tools that we then, you know, duct taped together.

Will Jarvis 23:38

Can you talk about what no code is? For, you know, people in the audience that might not be aware? Sure. So

Julian 23:44

so no code is this, what I think is one of the most important, but under discussed developments in technology, which is essentially giving people the ability to interact with data interact with websites interact with, like various applications, in a way that used to be restricted to people who can interact with these things at the code level, meaning they would actually have to write code. Another word for code might be a script to trigger different actions if something happened. So, for instance, a really basic example of this would be somebody every time you receive an email, having the email be logged to a database, for instance, a Google Sheet, right? Or in more common cases, nowadays, we use a product called Air table, which is kind of like Google Sheets, but better for people who are going to be interacting with non non number non number data. So for instance, names or cities or statuses, right. And the idea is, you know, we could use in the past, you would have had to actually write code to be able to trigger something that would happen every time you received an email to log into Google Sheets. or, you know, an Excel file or something like that. But now with with the tools that exist, you can actually have stuff like that happen. And you can, you can sort of program that, but program that without knowing how to write any code at all. And that is such a big unlock, because while that example is very simplistic, it's like, well, who cares? Like you can, you know, shift some data from an email to, to air table or to Google Sheets really easily, you can actually build an entire admissions process, with email flows with automatic automatic updates with different pings to people in Slack, if they need to fill something out. Like you can actually build an admission like a monitored admissions org, for instance, like we did it on deck, without writing a line of code, and not just crazy. And you can, you can do that with all of these tools that already exist out there. Now, granted, they might cost a little bit of money, but developer time costs a lot of money, right? So I think that's really important to note that no code is kind of allowed people to develop these skills that would have been restricted to developers. And the other thing that's quite exciting about no code is that I mean, ultimately, everybody on your team now has way more ability to create things and build infrastructure, that that is going to be very stable. And that's going to work quite well within your org. So you're no longer having to wait for the dev team to go and build something that helps you with, you know, internal processes or external processes.

Will Jarvis 26:29

That's great. How do you know when it's time to start writing actual code? You know, because you can scale these infrastructures with no code tools to really surprising degree, but but when do you decide when it's time to actually, you know, go hire some developers and start building something?

Julian 26:45

Sure. So I think there's two there's two things. One is, I'll talk to sort of the founder side of things like when founders are kind of prototyping, and then we'll speak to the sort of like the actual like building a product, building the business side of things. So oftentimes, this is what you see, when you're looking at non technical founders, they're like, I can't get started on my company. Like, I'm looking for a co founder who's technical, who will build this idea that I have this amazing idea. That is, if I were somehow to get a co founders technical co founder, we would have a multi billion dollar company, right. And you just have to trust me, non technical co founder or potential technical co founder, that if you join me, and you use my idea, you're going to have such an amazing time. And we're going to go to the promised land together, we're going to make so much money. This is a really, really bad sales pitch. Because anybody who works in startups knows, it takes a extremely long time to actually find true product market fit. When you when you think you have it, you usually don't. And, and ultimately, you know, this, this technical co founder or potential technical co founder is signing themselves up for potentially years of working with this person. And that person hasn't necessarily proven themselves. Yeah. So what you can do now, as a, you know, a non technical quote, unquote, co founder or founder is you could actually go and say, here's my idea. And here's the little note code prototype that I built, right. And I drove some people here, you know, either using, you know, some some mailing lists that I built up or that use some Google, you know, or Google or Facebook ads to like, just drive some test audience to this landing page. And you can actually start to show that as a non technical person, you have proven that there's interesting demand, you've proven that people are clicking around on this prototype. And that ultimately makes you extremely desirable, because you've put in the work. Now, people are saying, okay, this person hustles, they don't know how to code, but yet they put together this, you know, pretty janky prototype. And now that's showing me that they actually understand a little bit about product, they're not just saying they understand product, and they've actually built something that people are using or interacting with. And that actually in that thing that they've built actually seems quite compelling, even though it's not, you know, the most beautiful thing. So, so that's the first piece is I think it's important for founders, especially non technical co founders to do that. But also, technical founders are increasingly realizing that starting with no code, as a way to prototype is just so much better than diving into code and, you know, getting into the weeds so quickly. So, so that's, that's one piece. And the other is, you know, when it comes to actually switching from code, or no code to code, I think that it really depends, you know, like, on deck, honestly, you know, our admissions process, we switched to, you know, internal internal tooling that we built. And there are a lot of issues with it. And I think it's actually way better to have maybe we should have stuck with air table or maybe we shouldn't have moved off of off of the product Foley or the no code product fully. And is that do, you know, we maybe could have done more of a slow transition. So I think There's, there's a lot to be said for, even when you think it might be time to move off, maybe it's not. And then, of course, there are many examples of businesses where it's like, okay, we should probably just be building this thing. You know, from from day one with it with custom code, it doesn't make sense to be, you know, building no code stuff. If we if we feel like we're, we already have a pretty strong insight into the customer, and that sort of thing. And the NoCo tools can't, you know, can't do everything. So it's good sometimes to, you know, to go right into it.

Will Jarvis 30:29

It's perhaps if you're building, you know, a quant fund, no Kool Aid kind of tools might not quite be it. But if you're for plenty of other things, there's great applications there. How do you recommend founders navigate the search space to find product market fit and iterate quickly? In the beginning? Is it just iterating? As fast as you can, trying to talk to as many users as you can? Or is it something else?

Julian 30:50

So I think that there's, there's two things there. The first is, Product Market Fit usually isn't a thing that people even are looking for, until like series A Series B stage there, just to just to really emphasize what I mean by that, you can have millions of dollars in ARR. And you could still not have found product market fit like true product market fit. Right. So there are companies that that I know that are, you know, they have a ton of revenue, but they they admit to themselves, like it's not like they don't have blinders on. They don't think that they that they have figured this out yet. And I think that that's really important for people to realize is that that doesn't happen anytime soon. And almost anytime that a founder says they have product market fit, and they haven't, you know, gotten much further along in terms of org building, in terms of, you know, like, fundraise, and things like that. It's almost always untrue. Now, obviously, there are exceptions, but for the most part, I think that it's it's something that founders should be, should be like very cognizant of. The second thing is, I think it really just comes down to it might sound trite, but like, really making sure that you're building things that people want to pay for. Right? I think that this is this is the main thing is like, the I think the monetary wise these modules build things people want. But you really need to actually quantify that, like, how much do they want it? You know, how much do they want it? How long will they want it for? Right? Like sustainability, of being able to actually build something that people want to stick with? is extremely important. Right? So I think those are those are really important factors to consider.

Will Jarvis 32:35

That makes sense. Can you talk a little bit more about like companies that, you know, do have millions of dollars in recurring revenue that might not have product market fit? What do you mean there? Exactly? Is it that perhaps they're able to make sales, but it's not really exactly jiving with their customers? What does that mean?

Julian 32:50

Yeah, I mean, I think there's, there's a big difference between having one to 2 million ARR and, you know, breaking into the next into the next hurdle, like 10 million Arr, or something like that. There's also a big question about retention, right? Just because you have you have that revenue right now doesn't mean that you're, you're not going to churn through, you know, in six to 12 months. So I think there's just a really big question as to whether or not revenue now means that you're going to be a successful company, you know, five years from now. And, and I think that that's the other thing is like, also, you know, there's, it's not like nobody else is building while you're building. So just because you're building something now that people are kind of enjoying doesn't mean that somebody else isn't gonna come out and sort of like, you know, knock over your applecart.

Will Jarvis 33:35

Yeah, you definitely want to try and avoid that, if at all possible. defensibility. Seems seems quite important.

Julian 33:41

Yeah. And the other thing is, like, I don't, I don't think that companies typically die, due to competition, but they definitely die. If they stop building and they stop, you know, stop creating things that people want, because the things that people want and need, will shift, as you know, different workflows change, or as the world changes, I mean, you know, not not to pick on any one company by name. But there were a lot of companies that were started during the pandemic to solve pandemic problems, right. And a lot of those problems kind of went away as the pandemic has receded. So, you know, and ultimately, they were raising at extremely high valuations. Because people were using the thing like crazy things like crazy, right? But, you know, once once we started to, you know, get rid of lockdown, once people started to actually be going back to spending a lot more time IRL. Some of these pandemic problems kind of vanished. Yeah. So that's an another example of like, well, maybe your product market fit. But you know, when external conditions change, like part of product market, fit, can evaporate.

Will Jarvis 34:47

And you need to you need to be aware of that. As a founder going off of that, you know, we've seen a lot of companies shift to remote first, after the pandemic, do you think we've kind of reached an equilibrium there For companies where, you know, we've barring, you know, huge innovations from data or something like that, it seems like we've kind of reached this kind of stable, maybe it's 20% of jobs are remote, but it's like, will it shift drastically in the future? It doesn't really feel like it. But but I'm not, I'm not quite sure what what do you think about that.

Julian 35:19

So I can't speak to, you know, huge organizations, I don't feel like that's my expertise, what I will say is that, you know, we do the best that we can, right. And with sort of the situation that we have, right, so ultimately, people started companies, and don't work co founders and teams that they couldn't, you know, be in person with during the pandemic, you know, at the height of the pandemic. At the same time, I don't think that anyone would say that all things being equal, it's good for co founders not be working in the same office together, right? Now, if that's like the thing that's barring you from working with a really exceptional person, then it's worth considering right, doing a remote startup and things like that. But generally speaking, I think that the earlier the team is, the more important it is to be in person. And then as teams grow, then maybe you can have some sort of hybrid policy. I'm not particularly, I'm not particularly like dogmatic about any of this. I generally think that it's important to be in person with your co founders, though. I mean, on deck, everybody thinks about it as a remote company, because sort of our second chapter has really been entirely remote. But we started out entirely in person, all of our events were in person, right? So ultimately, and the team was in person. So ultimately, what happened is we shifted when the market shifted to remote, right. And to Silicon Valley in the cloud, I think that we were probably the people who, who actually who actually coined that phrase, but ultimately, you know, we're talking about well, or somebody asked me recently, like, are tech hubs, or Silicon Valley as a hub gone? I said, Well, I don't think that Silicon Valley is a hub is gone. But I think that there are many new hubs, right, and the Internet kind of connects them all. And I think it's important for you to be in, if at all possible, it's important for you to be in one of the major hubs, physical hubs, but you should also not discount the fact that, you know, the cloud is extremely important. And some of the some of the stuff that's happening, especially in web three, for instance, I think that like the cloud is more important. But But ultimately, if you can be somebody who's building a web three, it'd be really active in the cloud, but also in Venice, or in Brooklyn, where, you know, web three seems to have congregated, like, certainly doesn't hurt.

Will Jarvis 37:41

It definitely helps it do you think the benefit to being in person is mostly just like lower communication costs. You don't have to opt in to, you know, we don't have to, like just hop on Zoom to talk to each other. We're just right across the table from each other. And so information, just, you know, shares more quickly, do you think that's primarily the benefit for, you know, companies that are co located together?

Julian 38:02

I think it's I think it's actually less that and more the idea that the best ideas, and the best conversations, and the best breakthroughs often don't happen because they're scheduled on a calendar. Right? Do you know, I can't think of any, like breakthrough idea that came through a scheduled meeting really, like, relative to the stuff that just happens completely surreptitiously. Right. That, to me is, is the really important stuff. And I think it gets it gets way way. Kind of underrated or like, I think that people don't want to acknowledge that. When they're thinking about the cost of remote. They're like, hey, it's actually easier. We can be async we can get stuff done all the time. And like, I don't think that they're, I'm not going to be one of those people who says there's no benefits to remote. There certainly are. But you also have to be like, you know, wide eyed about the the downsides, the cost of it.

Will Jarvis 39:00

There's costs as well, definitely. I want to talk about web three a little bit. Now. In fts. In Dallas, particular, you've been involved in a very large toppling of Constitutionnel. Is that correct? Yeah. What do you think the bull case is for NF T's and dowels within the next like 1015 years.

Julian 39:17

So I think that the the, the interesting thing about NF T is is it really is the first time that I'm aware of where you can actually own a thing that's digital, and that it's not restricted really to to any particular platform. Right. That I think is quite interesting. I think that we haven't really even gotten close to figuring out the implications of that. Both positive and maybe there's some negative ones, right. But I think that there's something very unique about that. And that's that's about all I'll say about kind of NFT specifically, or as like a broader category. And if T art I think is absolutely fascinating right now. You go, you go from looking at DeviantArt I think we're about the same age Deviant Art, you know, is this website when I was really young, that people would post all sorts of digital art, for the most part, it was digital art that they created. And then they would make no money, right? Now, you could have people who create digital art, and you actually have a way to monetize that and actually have patronage around digital art. And I think that's really cool. I'm, you know, I'm a music school dropout. So I've really liked the idea of giving people ways to, to be creative and be rewarded for being creative. When it comes to douse, you know, Dow is essentially as you know, as broad as saying, like C corpse. So it's really hard to talk about Dow is broadly. But you know, constitution, Dow is this example, that I can give just a quick background, we saw that a copy of the US Constitution was going for sale at Sotheby's, we had about a week, we decided that we wanted to try and raise money to put in a competitive bid to buy and essentially co govern copy of the US Constitution. And anybody could put in any amount of money that they wanted to be a part of that experiment. And we raised about $47 million in the span of what was under a week, because we, we decided we were going to do it. The auction happened a week later, but we actually couldn't start taking payments until maybe two days. And so about five days, we raised $47 million. I think this is a really interesting thing, because it shows that people can't we lost by the way punch line, we didn't when somebody outbid us $47 million. It was not enough money. But but you know, I think the thing that we realized was, gee, this is this is interesting, for a few reasons. One, it's bringing people together, to rally around something that really wasn't financially motivated. Nobody was thinking about, Oh, I'm gonna buy a copy of the piece of the Constitution. And that piece of, you know, that piece of the governance token that I that I purchase, is going to be worth something in the future, I really don't think people were thinking about it that way, they were thinking about this is amazing. Imagine what would happen if you know a bunch of people came together, you know, we're able to acquire this really important artifact, they were able to just, you know, decide on its feature, we might want to display it, do a traveling roadshow with it and display it in certain contexts, we might want to lend it out to different museums, I think it's just such an interesting, such an interesting idea. And I think people got really enamored with that. The other thing is, it was it was the first Dow to bid this sort of auction level ever. And you know, it was the largest amount of crowdfunding raised for a physical object of all time. And I hope that that's not the end of it. I hope that that's just the beginning. But you look at people who are trying to do things that are, you know, adjacent, there's people who are trying to buy an NBA team, as a Dow, right. And think about how cool that would be, you know, I'm not even a basketball fan. But I'm just so enamored with the idea of fans being able to co own an NBA team, and be able to be involved, and a lot of it. And if you think about that, it's like, well, especially if it's a team that's not particularly popular right now, if you could actually change it to become the internet's team, instead of like the New Orleans Pelicans. Well, that actually starts to really open up the audience base, right? Because you might be somebody who lives in a country where there aren't any, you know, professional basketball teams of note. And now you can actually have your own basketball team, right, you can be a part of that. So I don't know, I'm just very excited about the creative aspects of this, and the ones that are less speculative in nature.

Will Jarvis 43:41

I love that. I love that. And this distributed ownership does seem to be less speculative and very interesting, some of these kinds of distributors approach to, you know, spreading out organizations that were having them concentrated within, you know, one person's hands or a couple of persons hands.

Julian 43:55

That's right. And it's also just absolutely chaotic. And that's kind of fun. Right. You know, ultimately, had we won the Constitution, I think that we would have done, you know, right, by, right by the document and the importance of the document. But, you know, it wouldn't have been without without its own challenges, right. So, so in a way we lost, but we were able to make a lot of impact in terms of how people think about Dows how people think about web three, how people think about their relationship with the Constitution, which is actually quite funny. I think that a lot of people were thinking about it much more in that week, and sort of afterwards than they had previously.

Will Jarvis 44:32

I love that. What do you what do you owe your success to the Dalits out? What do you think we can Oh, the success of raising so much so fast. There's something like super mimetic about, you know, the Constitution itself. It's this physical object, you know, and it's this really cool idea and we live in troubled times. Do you think I really contributed to it or was there like, really? Was it well, really well planned and executed in the short amount of time you had?

Julian 44:55

Well, I think it's one of those things where, when you have when you have something that Like resembles product market fit, you can f**k up a lot of, I don't know, if we're allowed to swear, but you can f**k up a lot of things, you know, and it will still, it will still like go quite well, because there's just so much Paul, I think that's kind of what happened with constitution down, we had a lot of challenges. I mean, as you would imagine trying to raise, you know, 10s of millions of dollars in a week, and prior to, you know, that week, not having even met, you know, two thirds of the people that you are going to be working with very closely. So, so we have a lot of challenges. But ultimately, I think it's like, one, it's there is the meme right? To there is the dream, the meme is so is so important, because that's the thing that's sort of like the jokey part, right? And people love jokes on the internet, right? People like jokes, slightly, slightly less than they like, you know, anger and outrage. But ultimately, like, you know, we were able to, we were able to really focus on the jokes side of it to get people excited than the dream is really, there's a couple of dreams, right? There's the dream of what might happen if we actually accomplish this, like, how crazy would that be? Right? Like, what would that mean for the internet? What would that mean, for web three? What would that mean for society, quite honestly, right. And then there's also like the American dream, right? And the the American dream, everybody, no matter, you know, where they live, you know where they're from, they live in the US with a US citizen, it doesn't really matter, everybody has some sort of connection to the United States. And that can be a really a great relationship with the United States where they feel like America was the land of opportunity for their ancestors, they could also feel the exact opposite, that America has let their ancestors down. And both of those points of views were actually represented in participants in the Constitution now, because people really liked this idea that this was sort of a, a way of interacting with the American dream, a way of interacting with our country's history or, or the United States history. And I think that that was, was something that really resonated with people as well.

Will Jarvis 47:02

It's really symbolic. Yeah, I love the concept. And it is very vivid in one's imagination. Think about. Very cool. Well, Julian, thank you so much for coming on today. I've got one last question for you. Sure. You've been quite successful. So far, you've been very helpful to me in my career, lots of great advice, etc. What are the next 10 years look like for you? And do you plan out that far?

Julian 47:25

You know, it's a good question. I haven't planned out that far in the past. And the reason for that is because, you know, a lot of my life makes a lot of sense in retrospect. But I don't think it would have made sense or I wouldn't have made the same decisions. Because I wouldn't have known about the opportunities. Like, quite frankly, I didn't even know, when I was playing, you know, the Super Nintendo and the Nintendo, when I was a kid, that you could even be involved in creating video games. If you weren't technical if you weren't a developer. I never thought about that. Right. So So I think that one thing is I try not to expand what's pot or I try not to stop looking at what's possible, or sort of, I really like to think about how the things that I that I do, I might not even be aware of them. Right constitution now is a great example of that. Never in my life, did I think that I would be working on constitution down to be clear, I was one of about 25 people who were on that core team. Lots of amazing backgrounds and lots of stories there. But, you know, ultimately, I just would have never known. And I think that's, that's one of the most important things to think about when it comes to technology, and creativity, and opportunity. Is that, yes, like, you should be optimistic, you should try and put yourself in good positions, right? You should try and probably say yes to things that you might be a little bit worried about looking silly for doing. Right. But ultimately, I think that if I had said no, or I had sort of tried to follow a more conventional path, I would have missed out on all of the amazing things that have happened in my life so far. So the answer is yes, I'm trying to think a little bit more about what the next year the next decade looks like. But considering I hadn't thought about it at all, previously, I think it's gonna it's going to look probably still a lot less clear eyed, and a lot less, a lot less structured than then people who might have taken, you know, a much more sort of, like, predicted or planned path up until this point.

Will Jarvis 49:32

I love that a little bit. So it seems like the lesson is, you know, say yes to opportunities, keep your eyes open, have enough slack to do that, but also work really hard and good things can happen to you.

Julian 49:41

I think it's right. You know, I think that it's one of those things, we're naturally you have to say yes to less things, the more you sort of develop and like, you know, build, build a reputation or build a following or, you know, like I think that ultimately the younger you are in the less experience you have, you don't really necessarily know what thing might be used sort of a breakout for you? So ultimately, you have to you have to be more likely to say yes. But I'm trying to optimize for saying yes, more than, than a person who might and, you know, sort of my stage. And I think that ultimately, that was the thing that led me to constitution Dow. And I think that will ultimately be the thing that allows me to pursue, you know, things that I work on, you know, in the future.

Will Jarvis 50:23

That's great. That's great. Well, Julian, thanks so much for coming on. Where can people find you? Where should we send them?

Julian 50:28

Sure, I think the the first thing is to check out what I'm doing about in Dec. We really are focused on founders and also angel investors, I split my time between working with people who are trying to find the missing pieces to get started with a company from finding co founders to finding, you know, the idea and the go to market. And then I also spend half of my time working with our program for angel investors, people who are looking to really develop a muscle, I describe invalid investing as strength and conditioning. Like you need to go to the gym multiple times a week to develop the angel investing muscle, you cannot just expect to invest in, you know, one or two companies a year and have that be the thing that ultimately helps you, you know, develop a skill set there. So, so you're on deck beyond deck.com is our website. And then personally, you know, I'm on Twitter, unfortunately, that's Julian Weiser and then my website is just my last name. WEIWE i s s. E r.io weiser.io.

Unknown Speaker 51:32

That's great. Thanks so much. We'll put those links down there in the show notes. Cool.

Will Jarvis 51:40

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Unknown Speaker 0:37

Will be Misha, how you doing this morning?

Misha 0:40

Well, thank you so much, big fan of your podcast are delighted to be on.

Will Jarvis 0:44

I appreciate you taking the time to come on. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Misha 0:50

Sure. So some of the big ideas I'm interested. I mean, professionally, I'm an investor. I stuff I read though, you know, it's sometimes it's like business or investor related stuff. But, but to be honest, I've been reading a lot of history, writing in my, in my weekly newsletter around the books I read or about Judaism, or about, you know, a lot of the feet up kind of social dynamics that probably, in my view, generally go unnoticed, but seem to govern everything around us, or, you know, the changes in, in the mating market, or male and female relations, or geopolitics, or, you know, echoes through through US history, or just reading a World War Two and the like. So, to be honest, pretty eclectic, I guess, you know, the progress started giving a write this weekly newsletter that's kind of been been growing nicely, and I find quite quite, quite rewarding. But, but yeah, so like, my writing in my journey I describe as yeah, pretty, pretty eclectic.

Will Jarvis 2:08

I love that. I love that. One of the things that stood out to me when I first encountered your writing, which I really liked was, I've always had this sense that Peter Z Han, I believe, that's how I pronounce his name, I've only read it. You know, he has the sense of the future as being very much. Just, there's, it's gonna play out. It's very definite. It's like, but there's not much we can do about it. It's just gonna play out because there's these actors, and it's all kind of predetermined, which I like, I guess, like for some, like, I don't know, philosophical, or just like, I don't like it, you know, personally. But it seems to be in you picked up on that kind of notion that he has, it's all just determinism. What do you think about that? And how determined Do you think we are by geography and these things, you know, it's Australia, you know, just blessed with these natural resources. And being an island for a long time. And all you know, the America isn't a good place, because we don't have land borders with any, you know, of our enemies. And we'll eventually just be on top because of that, and there's nothing China can really do you know, this this sense of like inevitability Do you think that is accurate? Or do we have more agency perhaps than Z? Han would like to believe?

Misha 3:17

Yeah, it's great question. So you're referring to a book review, I wrote, comparing his book with Bruno Mukesh his book, and, and basically Zachman, typically referred to as this United Nations in this series on this, and it's kind of famous for being very much geographic determinist and basically saying, you know, your your neighbors, your energy dependence, you know, whether you're an energy importer or exporter, whether you're, whether you're food dependent or independent. And, and like, kind of determine your future. I think that's, that's extremely powerful, frankly. And I think, in the same way, when you kind of read Jared Diamond's, guns, germs and steel as effectively geographic determinist outlook, I think it's very seductive. And it's quite powerful, I think. And I think you kind of get to the crux of it, you know, part of the fundamental philosophical question. And I don't really have an ideological view, I find kind of both sides, seductive, and in different ways, and it's hard to know what the real truth is. But you'll find that your fundamental question is, you know, we are we just really lead along by, you know, the winds of geography, or, you know, do we kind of exert your human will onto the world, and can we wrap, you know, the world according to our own needs, you know, are we really genuine free agents or, or not? And so, obviously, this is a massive question. And, you know, I obviously, do not sit here with the answer, but it's interesting to kind of, you know, to kind of understand the shape of these questions, and it's interesting And to kind of note the kinds of folks who are attracted to, to one or the other, I find that the more interesting, for example, VC or investor folks or founders, you know, who are really, the kind of worldview is shaped by their belief in the founder, as this person kind of exerting the will to power onto the world, they're quite repulsed by this idea that we simply don't know you're a founder. So this is probably what founders are probably conservative as well in in that is obviously a Judeo Christian, deep Judeo notion of free will, which kind of comes into this. And so and so, you know, the idea is that no, actually we we determine our fate, rather than our how lucky you are that, you know, you were born here. But But then again, like, you know, a lot of the ideas are almost indisputable, you know, like, the Aboriginal Australian, you know, like, it's hard to imagine not giving Aboriginal Australian, a million years or 10 million years, and building civilization, not because of any inherent defects in the person, but rather, they simply didn't have domestic little animals, probably, you know, I don't know, if you can domesticate a kangaroo over a long enough time span or whatever, but like, but directionally, you don't have access to the minerals you need, and you don't have the geographic support to kind of create a civilization. So like, you know, I think that the truth is probably some some strange mix of both, and I don't have the answer, but But it's interesting to kind of, like, lean into either side.

Will Jarvis 6:45

Definitely, definitely. And it does seem to be the argument I always have with people, it does seem to be that even if it is the case that everything's determined, you should still probably act like you have a lot of agency, because that maximizes your chances for having a positive outcome. Yeah, this

Misha 7:01

is I mean, like, you know, this is one this high school, I remember debating this, when you come across a car, you can't get really into it, like it's a deep, deep question. So we're gonna need, we're not gonna like solver now, but yeah, I mean, fundamentally, like no one really lives their life as if it were truly deterministic. So it's kind of irrelevant, like, how do you do that? Because even if you believe it, and even if you act according to well, you know, like, what does that even mean? You know, it's kind of, it's so saturating of everything that it kind of becomes meaningless. Like Sam Harris had this absolute idiotic claim once, which kind of turned me off in five or six years ago, he basically said, look, the universe is not deterministic, you know, you try and honor using it is deterministic, you go lie down and see how long you can lie there footnote, you'll get up and go about your business. And it just totally misses the point again, of our romaine. So, like, I think you're right, I think it's, it kind of cancels itself out in terms of informing your decisions. And so, you know, I think, you know, people your best, it's almost like a, like a Pascal's Wager, like, it's really only upside in betting on agency, you are better off not blaming the universe and others on kind of your actions, whether it's fundamentally true or not, is like probably unknowable, but you're better off acting as if you are the author of your actions.

Will Jarvis 8:35

That makes sense, that makes quite quite a lot of sense. Misha, I want to pivot a little bit and talk about something something interesting. So your investment, your investment manager, you make investments for living, how do you think about finding alpha? Do you systematically do you have like a system for doing that, you know, like, I was recently reading sources book on, you know, has all this concept like reflexivity, etc? And how, you know, groups of people make decisions and how that can affect markets? Do you have like a systematic way about thinking about how to find alpha? And perhaps that's kind of fraught with peril? Because, you know, no one would ever talk about this publicly. Right. But, you know, perhaps you could talk in general terms about how you think about these things.

Misha 9:16

Yeah. So like, the micro kind of matters here, like I'm a private equity investor, which is very different to, you know, public market investors who, you know, might have many positions and take small positions in liquid stocks and kind of have to kind of periodically take views and it's hyper competed, I guess. They're private. They're all perfectly firm. So it's not like a non competitive market is competitive market globally. But it's really kind of opportunities, opportunity specific, kind of opportunity specific sector specific geography specific, and so it's kind of hard to talk about it in general. terms like, you know, we don't kind of match an index and try to generate 2% over because we're not enlisted equity. So it's like a totally foreign language to us, it's really, you know, can we build something, you know, a position in a market where we're attracting and generating opportunities that are kind of a down our kind of fairway that we can kind of execute on and generate the requisite returns to take a view on those assets. So it's kind of like a very blocked kind of statement I kind of gave you but like, I work for a software and technology and private equity firm. So the position is a specific sector focus, and so I'm bullish on the sector, is that it's kind of like my starting position. So it's like, that's the macro position, that that's the only sector you kind of playing into each, you're choosing that. And then within that, you know, there are countless factors around the particular vertical within technology, kind of focusing on the kind of, you know, the founders you might be partnering, partnering with, or the management teams or whatever. So I think like, you just got to believe, ultimately, that you can kind of, you know, make three times or whatever you're targeting. And there's just a lot of ingredients that go into that into that pot. Gotcha. Gotcha. It's

Unknown Speaker 11:24

very case by case it sounds like,

Misha 11:26

yeah, it's kind of hard to be too general, I think, um, you know, I think so when, when firms market themselves, they'll certainly talk about this grand strategy that they pursued and look at their track record, and how wonderfully that all falls within that. And if you can't talk to them every six months, or every 18 months, you magically, there's different grand strategy that they've been pursuing for 10 years. And it's kind of worked out exactly, as they said. And that's because these narratives are retrofitted, because, first of all, the sample size too small, you know, you're, you're inherently opportunistic, and the world changes, and like, life's messy, and like, there's always a little lock in or whatever, or the macro changes, or whatever. And so the truth is that everyone's kind of scrambling to make something fit. But then every time we speak to them, there's this wonderful, neat narrative and a bow, in hindsight, and that's kind of finite, as humans has, like an investing shelf thing, that's just how like, we tell stories. And that's kind of, that's kind of fine. But like, it's just hard to be really honest with with it with a really clear cut story. I think investors tend to just be, you know, trying to figure it out, you know, as I go along in his life path dependence around the kind of skills or relationships you build along the way that you can deploy in the next opportunity.

Will Jarvis 12:53

Gotcha, that makes sense. It seems to me that the preps is tangential, but Elon Musk, great skill is storytelling at some level, you know, let's have like, you know, raise excess amounts of capital, etc. And then you get this, like, if we're very good at telling these these compelling narratives, it's really important. Yeah,

Misha 13:10

I mean, I kind of seen it as part of a broader thing, you know, like, you know, he's a perfect example of being a man who can exert his will to wrap the fabric of the universe around him, you know, not to be to kind of grandiose but like, you know, you know, storytelling, whether to investors or to employees, or to co founders, or CEOs, or to the press or whatever, it's like one thing, okay, it's one thing you're doing, to kind of create something from nothing, and that can't have been at all because, you know, he's deployed hard engineering skills across across opportunities, and look, and you get a whole bunch of, you know, false positives, or, or other way around, like, you know, there's always a whole bunch of b******t as well, that he's kind of, you know, said that hasn't really worked out, or it's kind of pretty dodgy or whatever, but you kind of got enough truth out there, there, you're gonna have to prove that it's a real thing. And maybe they're both sides of the same coin, you know, maybe if you are going to kind of, you know, tell big yawns and, and also have some something to back it up. Some of that's going to work out some some not. And so you kind of got to kind of take it in aggregate, it's probably unfair to kind of, you know, call him out for not having done anything with, you know, neural nets or something. I don't know, the status of that, rather than crediting him for like building SpaceX, you know, it's pretty, it's pretty astonishing.

Will Jarvis 14:40

Absolutely, absolutely. I think you're on the money there. I want to take another change of pace here and talk about social norms between men and women and how they've evolved over time. Can you talk a little bit about that and how you think about that?

Misha 14:54

Social norms I mean, like I I haven't categorized as social norms. And I guess the way I think about male female relations is probably several fold. Just kind of looking into things I've written about recently one, I recently kind of, you know, was reading, I was reading about the Comanches. And I was like, Oh, this is interesting. It's really about like, the little code is written. I was reading like, the Hebrew Bible, and I was like, Yeah, where has all the polygamy gone? Polygamy everywhere, like, like, history, across societies and across time, is saturated with polygamy, and I look around and, and like, if you mentioned polygamy, people want what is that, like, it's so invisible. It's not even offensive, it's just like, totally gone. totally invisible. It has been exterminated. And so I kind of picked up Joe Henrik, his book, where we had the weirdest people, excellent, basically, Western, democratic, whatever else it is. And, and, actually, he paints a pretty compelling story about how the church effectively accidentally stamped it out, like completely exterminated. And, and, and the interesting about polygamy is, you can't even have, you know, like, a society with like, 20% polygamy is a polygamous, fully polygamous society, because it's the top 20% of men who can collect and hoard all these wives who will do so. And then you've got this kind of, you know, in cells who can't and become violent, and it's not not not a stable equilibrium. And so, and so and so that's why you kind of decide it would just like 5% is actually has to be zero, which is kind of, which is kind of interesting feature of it. And so, and so, you know, I guess the, the way I kind of see it, you know, it's not uncommon, as a kind of a joke comment, you know, like, when, when a couple get married, you know, some throwaway line, but how, how she had to break the man in or how she had to domesticate him, so to speak, you know, like, you might be in Nona counseling and fun, jovial way, yeah, he was assigned domesticated before, before, you know, before he was married, or whatever it was, I And ironically, think we can treat that literally, I think, men were domesticated, as were dogs, and as were horses. And and, you know, they were once kind of roving, violent, you know, polygamous manners. And eventually, you know, these kinds of institutions accidentally sprung up to kind of constrain elite men, which is kind of remarkable in itself, how does society kind of organically develop in a way that constrains its strongest, most powerful, most violent? Kind of? cohort? Okay, so, so, Christian institutions basically evolved in order to do that. And now, like, you know, you know, someone might be kind of snarky about that. But fundamentally, my view is that just like oxen, kind of yoked to kind of plow fields, men have effectively been yoked to build civilization again. And so it is almost unequivocal God, like the reason we're having this conversation over the, you know, over over these machines. And, you know, this, like, indistinguishable from magic technology, is because we effectively stopped trying to hoard wives and kill each other, and instead directed that energy towards civilization building. So that's probably like, the one kind of 1000 years now kind of written this, this, like, 12,000 word. piece on this kind of diving into how Native American tribes have done and how, how kind of Jews historically have looked at just, again, it's just got to happen to be reading about these things, the kind of stitch together rather than any kind of, you know, conspiracy or whatever, but like, but it's interesting, like, you know, what I just described to you is, like, it almost sounds a weird, like, it always sounds conspiratorial, maybe, or whatever, but like, you know, like, we are so immersed in, this is the water we swim in, and we don't notice it, that this is kind of what's happened. And so I find that to be like, the kind of it's like a 10 year thing. It's kind of the big long up, then then the other piece of it, I think, I think, effectively modern dating is broken that down. I think, I think hookup apps have effectively broken that and for a few reasons, I think one. So we kind of believe now in this pseudo black or pseudo polygamous society where the top echelon of men basically have the UberEATS model of dating and they can basically get women delivered into their homes and how wonderful is that? And happy days. Um, and partly because of the technology part also, it's just more discreet, you know, like, it's not going into by the common by everyone's out every every week, it's just that like, you know, discretion is a part of the new model. And so men kind of can hide their success. The guys who aren't getting any, which is most men can kind of hide their shame. And women can hide that promiscuity. And so it kind of works in this strange way where everyone has incentive to stay mum about it. And so you've kind of got this quiet bubbling of this pseudo polygamy Now, the challenge is that, you know, and you kind of see it everywhere. I'm not saying it's like the only cause, but it's totally consistent with the story of delayed family formation, declining birth rates, you know, delayed marriage, and like, it's totally consistent with that story. And part of the challenge is that sudo polygamy is, in many ways, much worse than real polygamy because it has all the social costs, and none of the upsides you know, because these men are not providing for multiple wives and are providing for hordes of children. They're not providing for extended families. It's like costless, it's like totally wild. And by the way, I should say, it's to trap for them. Like, it's easy to kind of get stuck on that hamster wheel. But ultimately, society has for reason developed these kind of long dated norms of marriage and life, because you know, you don't, you don't be this 45 year old loser, trying to sleep with like 30 year olds, or 25 year olds or whatever. Like, actually, over the long run, you also want kids and you want grandkids, and it's hard to kind of bridge that gap without a range of social markers, and just get stuck in this hamster wheel and kind of So ultimately, it's not even for their benefit, but the kind of breakdown of these long data norms is kind of propelling every cohort into these strange local minimum. Got it?

Will Jarvis 22:08

So are the budget, should we just encourage more people to get married? This is something I'm a big fan of Yeah, I think

Misha 22:12

so. Like, I mean, you almost should trust it, because I'm married. And I've been to three kids and graduations. And you know, and I've been out of the market. So, in some respect, everyone's always kind of talk in the book a little bit here. So like, so, you know, it's always impossible to distinguish whether I'm, you know, I'm, you know, am I resentful a guy just having a crack or it's like a objective thing. So like, I'll caveat. I mean, people could kind of make their own judgment. I think kids, like unequivocally have the greatest joys a man can could experience and I'm a baby maximalist are three and, and God willing will have many more. But like, who knows? Right, but like, to the clinician, trust me, you know, don't know. But like, but yeah, I mean, I think fundamentally, marriage solves a lot of these issues. I mean, the kids thing is strange cheat code, where you kind of get this little bundle of meaning, that's kind of unquestioned, like, like, I mean, there are everyone's had kids forever. It's the most kind of ubiquitous experience in human history, almost by definition, and yet to you, it is, it is non fungible, it is one off it is. It can't delivers everything, there are ism or existential angst. I mean, yet I'm 34, maybe this midlife crisis thing, or whatever, you know, like, we can talk about it again, in 2030 years, who knows, just speaking from where I am today, you know, you're just too busy. Day and trying to like eke out whatever you can from work or wherever else to kind of worry about all the other stuff you you're worried about before. So I'm very bullish on marriage, and, and kids, especially so and you know, kids without marriage doesn't really work. So. So I think that's the kind of there's that's the bundle you want to kind of go for.

Will Jarvis 24:12

Can you can you talk a little bit about about, you know, kids without marriage doesn't really work. I'm, I'm also a big proponent of this, I think it's very important, and it's something our society, we, at least in the West have, have kind of stopped pushing a lot. And I think is important if it is possible for parents to be married.

Misha 24:29

Well, you know, I guess, like, I think I am totally guilty of this, like, I've been guilty of underwriting the importance of kind of symbolic, ceremonial, traditional things just across the board wanted to get too specific, but I'm absolutely hands up guilty of that. And in hindsight, every single time I reflect and it's a mistake, and I think it's almost like a Chesterton's fence thing like I think Is it's you know, for for people, I guess to kind of grow up, curious about stuff and reflecting a lot of it just seems like b******t until you realize in hindsight that these things matter. I'll give you an totally unrelated example again, Stalin, one of his moments, crowning moments of power and coronation was when, when Lenin died, he had the body in bombed and he and his whole state of ceremony around now, Lenin one, Stalin shot and thrown ditch somewhere, basically, but you know, like, But Stalin seized the moment and created this coronation. Now, you know, an autist might ask, What are you talking about, about people stood in a room kind of spoke to each other, whatever, actually, not how humans work, humans work, these things, you know, but these symbolic things, these kind of group ceremonies and rituals hold real power. And so Stan created a coronation and seized power. Now, these are fearful kind of confusing concepts, but it's the same things marriage and same thing is always other ceremonies where you have an opportunity to forge a new dynamic and to define certain enduring elements in your life and your family's lives. And I think these you know, we are bereft today of rituals and ceremonies, and you kind of see it everywhere, you know, people are hungry for for rituals. And so, and so I think it's I think, I don't know how it could have gone to this by getting, you asked about marriage. I think marriage is appalling from that perspective. I mean, like, can you have a good family that ever again, technically married 100%? Okay, that's absolutely fine. Frankly, you know, I think we live in this deranged moment where a lot of women, you know, a lot of my friends are women were in their late 30s, or mid 30s. And they speak to me and they say, Misha, they lied to us. I was wrong. 10 years ago, I thought, you know, I'm gonna have this great Korea, and I'm gonna, like, you know, buy all my, you know, whatever. And like, Now, there's some miserable lawyers somewhere, a great law firm, without a partner with despicable meeting market opportunities, and they're miserable. And of course, why on earth would you want to be a miserable lawyer somewhere earning some irrelevant amount of money, instead of creating a family with someone like, like, like, like, we live in this dirt range, the moment we're saying that his like, somehow conservative position or whatever, like, like, you know, you need to be conservative to kind of stay on the face of it, like, you have to be a miserable Corporation, to tell someone that actually you're much better off working for me, instead of going creating human life and like rearing human life, and so and so we live in this moment where, you know, so So women, you know, got some friends now who are in the situation where, you know, that kind of pessimistic and finding a partner, and they're, they're going to have a child alone, okay, like through technology or whatever. And frankly, I think that's a great second best outcome, you know, ideally, kind of a mom and dad and a partner, whatever, you know, the second best option, totally legitimate is having a child another way in because children are really, you know, so bullish on children, like that instinct and that option, considering what options available, you know, that is legitimate, or is is probably a very unconscious view, and I apologize to my rabbi and whoever else, but I think I think, you know, I'm not, this isn't like a purist, conservative Spiel I'm giving I just think that, you know, have children, otherwise, you'll be miserable, basically. So. Yeah. I mean, you know, you could contact with question another way, you know, like, broken families, you know, it's tough, obviously, large, dysfunctional communities across the world. Part of the reasons for their dysfunction is because of kind of broken institutions. You know, I wrote about, I read this great biography of Clarence Thomas, obviously, Supreme Court judge and,

Unknown Speaker 29:22

and my great grandfather's son or something.

Misha 29:26

No, it's cool. I think he might have written a biography about him. The enigma of Clarence Thomas, and it's excellent and the author doesn't like him and doesn't really political with him to authors absolute credit, like Thomas's charisma and wisdom shines through and he could see what was happening. The decimation was happening to the black family. And and it didn't I didn't realize until I read this, but how patriarchal black society was at the time and how Inside, you know, Malcolm X, the Black Panthers, these are deeply charismatic, masculine figures and movements. And now you kind of go to like a Trump March or Black Lives Matter March. And it's like pussy hats and, you know, whatever else, like, it's, you don't have that anymore. And so and so you had this decimation of the black man, and the, and correspondingly, the breaking of the black family. And, and, you know, I mean, this is a way bigger issue than kind of, but I just found that kind of striking. And so and so like communities that don't have a marriage norms don't seem to be going very well. So anyway, I know that's like a lot on marriage. But you did. Yes,

Will Jarvis 30:45

absolutely not. And I love that. And Misha, if you don't mind, he asked me, Are you religious yourself? Look,

Misha 30:51

I'm always again, like, hard to kind of answer this question. I think, you know, if you're in the top one, or 5% of anything, you'll know people who are 10x 100x you are and so like, am I religious? I mean, I guess compared to like, probably the average Am I religious compared to like, an actual Orthodox Jew and like, covered rabbi or something like, Absolutely not, like, you know, I'm kind of directionally relating, I go to synagogue every Saturday, which I find very rewarding, you know, I put on to fill in whatever. So like, I'm, you know, I guess that puts me are definitely on the more religious side of keep kosher, you know, all that kind of stuff. So, that puts you out on the more religious side of things. And I've written essay, why practice Judaism, as well, kind of specifically to kind of hit the nail on the head. It's not proselytizing, it's to folks such as yourself, but it was written to my congregation at the request of my rabbi. And but you know, that kind of lays out Why think, you know, Jews, you might find a more rewarding to practice. Can you talk about that a little bit? Sure. So, um, someone once said, I think it was like Esther Perel, or someone like that, I don't remember. But on marriage, they said, marriage is when love isn't enough, is for when love isn't enough. Okay. And, you know, I'm gonna make it sound bleak. Okay, I just think, you know, the covenant, what that means is why we're here, that is the covenant of marriage, and the kind of formal structures and rituals of marriage create rails for a long term relationship. You know, the best paragraph I've ever read on marriage is in Europe has Zonies book on the virtues of nationalism, right, which is an odd thing to say. But yeah, he has his extended beautiful framework about, you know, how you might think you're making a choice going into a marriage, you choose a partner you choose, say, I do, like there's this kind of artifice of consent around it, but there is absolutely no way like, you are not meaningfully consenting to what lies ahead of you over the kind of No, but both ups you know, like yes, many joyous, happy, great things, but the tribulations as well. And I think marriage creates those guardrails and I see the analogy the same in religion, religion is for when God isn't enough, okay? And again, I don't mean to be in to be a to heretical here but like, I think that the the rituals and customs that that religion is, is wrapped in provide a deep structure for meaning for community for tradition, my kids love going to synagogue, I don't think any listeners will go to my think about like, it's a lovely synagogue, but it's quite geriatric, it's in its kind of, you know, it's kind of an aging you know, slowing community. It's not a there are many young vibrant communities because they are the one that happens to be walking distance to my home is older. And again, everyone there is fantastic. My kids are the only ones there. They love it. They have the best time they go there. It's a ritual I get to do with them. Friday night, we have Shabbat just our family together. You know, so there are there are certain songs and there are certain prayers and melodies that just in beautiful that you repeat, every week. You say the Kurdish you say a mourners Kaddish three or four times I don't remember exactly on a Saturday morning and folks who are in mourning use. They said Our Lady said with them a few weeks ago, those gentlemen, his wife just died. He wept, as he said it, he was an old gentleman, and he said, you know, I'll love her forever, basically, too, and I'm standing there in order at this man, I, it's always painful to look at him and stare and to witness such beauty. And you know, these moments, you know, and they come in different shapes and sizes kind of permeate these spaces. And where else to get there, what am I going to be doing, sir? Going out to brunch? Breath, you know, like, you know, I have I, you know, this is not for everyone, this is not for you. Probably, you know, but for me, this is my tradition. And I kind of, you know, and I've found tremendous meaning leaning into it, I think, from a kind of a macro knowledge perspective, like, like, we've kind of talked about that part. I think, like, you know, Jewish body of knowledge is like, enormous going back 1000s of years across infinite amounts of countries and counter countries and debates and arguments now, like, there's a whole bunch of stuff there. Like, like sacrifice is like, half the the mitzvahs, deeds you can do and they're, like, all basically redundant now, officially, because we have a temple at the moment. And so there's just a random example, fuel, and is there mystical parts or whatever, but it's so big, okay. And it's so underrated. And no one talks about it, no one's knowledgeable in this stuff. If you just pick it up and read some of it, it holds tremendous value. And it's a way to anchor yourself to things that are permanent. Pilots a selection bias, you know, you surface things that have kind of worked and have continued to work. But that's kind of the point, that's okay. Like, you shouldn't read everything you shouldn't, there's a whole bunch of stuff, don't worry about it. But if you surface the good stuff, it's complete alpha, like, it is what I, you know, it's, it's, I consider it pure knowledge and spiritual alpha, lying on the sidewalk, right, that's available for you, and I'm certain, it's the same for other traditions is not like a Judaism thing. You know, whatever your tradition is, you know, if you just start to take parts of it need the right posture towards that suits you, you know, some people, you know, you can't take it too literally, or some people need to take a really literally or whatever it is, whatever your kind of exact, you know, mix of seriousness and irony and introspection and selection, you know, like, you need to find the right entry point. But if you find the right entry point, as I have, as my family have, you know, I found that tremendously rewarding.

Will Jarvis 38:02

That's great. That's great. All right. I do think that's a really important sentiment you've just expressed, it seems like people still like big always consistently underrate this, it's, you know, the selection pressure of a very large amount of time on a tradition or knowledge base, you know, can craft like very, like, you know, important truths that you should go out and seek out, but it seems like we ignore it. We're always like, trying to read the thing that just came out, but it seems like we should be much more biased to reading older, older texts.

Misha 38:34

Yeah, I think so. I mean, most people don't read at all right, like or they read, right. But like, I mean, most people and that's kind of fine. I think the way these institutions have been built are to be mass. You know, community events, I'm just reading a history of Texas right now. About Fehrenbach and it's fantastic. It's called the Lone Star State something something it's fantastic and so is saying how whilst, you know, all the kind of Texan rednecks, you know, weren't particularly educated whatever, you know, that high literacy rate, and you know, they read the Bible and they were and they kind of saw through high talking charlatans kind of partly as as a result like these are you know, when I'm when LUFA first mass published his leaflets it wasn't talking to the press is talking to the masses when when under Charlemagne these began mass producing the Bible again, it was to kind of arm priests to create local communities with just average peasants and these kinds of spread literacy and so, these are these are mass this is not, you know, for priestly Brahmin class. This is for, for for the masses, that's kind of worked and I think In this moment where we're addicted to our screens, when, you know, there are no more somepoint asked me, they said there are no more places for men to get together there are you know, or synagogue is is one of them, you know, like, like orthodox synagogue and men and women are segregated. So that's like kind of kind of one. But like, you know, he pointed out on synagogues and strip clubs, that's when men come and only go to one of those. But the point is, you know, you know, we've got some male club gentleman clubs like me, no literal sets, not strip clubs, like, like, like, whatever the cold here. You know, and like, it looks pretty miserable to me to be honest, like, I don't really want to go have lunch bunch of dusty old residents dudes, okay, it's not really my thing. But you know, this is kind of periodic annual rage in newspapers about how these things exist. And it's like, 50 meters down from a female gym, which no one has a problem with, okay, like, and again, like, I just think the current Zeitgeist is increasingly hostile to, you know, basic male needs and the kind of asymmetry between, you know, different preferences of the genders, basically. And so, I think you need to create those spaces too late to do that, you know, maybe in some communities going into PA, maybe someone's going to church, maybe unions, unions were pretty masculine kind of movements, whatever was but like, in this moment, we we don't have many of them and so I think whatever your jam, you just got to kind of create your own.

Unknown Speaker 41:43

That's great. That's great.

Will Jarvis 41:45

I think that's that's well plot and important that we definitely miss nowadays. Me sure I want to observe something I find interesting. And this just could be 100% selection effects. There there seems to be a vertical of people who are very smart. They read Scott Alexander, you know, kind of less wrong adjacent but much more like, generally, like Scott lot more in our religious I think in a resonant country and my friend resonant. Lars to say, you know, he's an orthodox good friend of mine, when the book review contest, your religious yourself, Jeff, you really I can keep going down the list. You know, quite a few people. Do you think there is something about you know, Scott's writing that is intuitive to people who are, you know, smart, religious, interested in these kinds of issues like to think about things? Or is it just selection effects? They're people like me, and that's why I kind of gravitate to him.

Misha 42:39

Yeah, I mean, I. I mean, he's probably like his pro service. And he's probably like, probably going up. Exactly. I could actually look it up with the answers. Yeah. I mean, he's an atheist, I think. And I think he's not religious at all. So you know, I guess he's really ship skews right wing? I don't really know why I think

Unknown Speaker 43:03

he'd probably reject that label ahead. Federal Democratic.

Misha 43:07

Yeah, yeah. Yeah. So but I suspect, I'm actually not sure. Not sure why I think. And this might be self serving. And this might be b******t. But like, there's just something about the way of like, calling a spade a spade and trying to seek truth for its own sake, rather than kind of couched in kind of, you know, social niceties that kind of is more attractive to that crowd. I know, that's true. Like, I imagined, like the right way, his own kind of arrangements and its own kind of social niceties that requires conformity to I imagine suddenly, that's gonna be cute to say that. I guess my short answer is I have absolutely no idea. And it probably is a bit of a selection effect. How of you just kind of plucking out folks interested in it happened to be like that, but yeah, it's I'm not sure what drives these readerships. I mean, they're very powerful. You know, like, I've had a few folks reach out to me, and I've had coffee or whatever, about people from either Australia or overseas and all that happened to be in town or something. And they kind of came across me first. And Scott examines blog or, or elsewhere. And, and you know, these things, and it's quite a diverse group of folks. And yeah, I mean, it is interesting, like, it's kind of the magic of the internet. And one reason I'm right, frankly, is because I, you know, I write pretty collectively about a broad range of things love and I'm fortunate that I'm able to share it with people who care instead of because it's so self select into it rather than harassing my mates or like people like Woody talking about Misha, and so and that's been absolute blessing. I make absolutely no money from it. It's purely a passion project and it's got an open halfway to being kind of financially rewarding, but it's enormous ly personally rewarding and I get I get emails from, from folks with who I can kind of build rapport and connect with and that's rewarding.

Will Jarvis 45:15

I love that I love that series on this podcast get to talk to interesting people I wouldn't otherwise be able to and learn from them. Well, Michelle, thanks so much for taking the time today. Where can people find you? Where should we send them?

Misha 45:29

Yeah, so I think I've been talking about my my newsletter a lot. So I guess that's probably the starting place. It's called kvetch, K v. E tch. And kvetch in Yiddish basically means having a whinge. So like, as you can hopefully tell, like, like none of this, we should be taking up too seriously. It's basically where I just write about all these kinds of subjects or whatever I'm reading at the time. It's free. It's free to subscribe. Otherwise, I'm probably like tweeting about stuff. So but yeah, check it

Unknown Speaker 46:03

out. I'll put a link down in the show notes. Well, thanks so much, really appreciate it.

Misha 46:07

Brilliant. Thanks for having me on.

William Jarvis 46:12

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Garrett, how are you doing this afternoon?

Garrett 0:40

I'm doing wonderful. It's a beautiful day in Atlanta. How about yourself? Doing well,

Unknown Speaker 0:45

thanks so much for taking the time today. Do you mind giving a brief bio and some of the big ideas you're interested in?

Garrett 0:51

Yeah, definitely. So Garrett Langley, born and raised in Atlanta, founder and CEO of a company called flock safety. And our kind of big point of view is that crime is something that can be eradicated. There are societies and places in the world where crime doesn't largely exist. And although we have a crime problem in America, it's something that we think combination of technology, great people, great policy, those three combined can lead to, you know, our mission, which is to eliminate crime. Well,

Will Jarvis 1:26

Gary, can you talk about just like some of the social costs of crime? I think it's something we've kind of glossed over in society, but crime can have all these kind of negative consequences for just everyday people going and trying to go about their daily lives. You talked about that?

Garrett 1:40

A little bit. Yeah, I mean, I think what's what's interesting, and look, I'm not, I'm not an academic, I don't have a PhD in research. But what's interesting is that there have been study after study that show that there is a kind of direct correlation between crime or inverse correlation between crime and economic mobility, social conditions, health. So if you're looking at health perspective, like, the more crime there is, like, there's actually more cardiovascular deaths. If you look at from a social mobility perspective, like every homicide in a place I can, Minneapolis was shown to reduce jobs by 80 per year. So like the point being, innocence, logical, right? If I don't feel safe, I've removed almost one of the lowest high Marlowe's hierarchy of what I need to do to have a fulfilled life. And so you see, people leave, you see, you see less job creation, you see businesses shut down. And so there's kind of this systemic issue that if you don't solve crime, and if you don't allow people to live their lives, everything else starts to fall apart. And I think, you know, I was, I was talking to an individual who's been a customer for a few years now. And this is a lower income community in the state of Tennessee. And his point was, for a lot of people, you know, if you have a desk job behind a laptop, you live in a crime infested city, you just move, but you have that kind of ability, because you make enough money. But the people who are actually at the most risk of the people who can't afford to move, so then they get stuck in the cycle where they are stuck in a town that has a lot of crime or community, they can't get out. And they're the ones who want a crime reduction more than anyone, and so to us, so we do view that as kind of our opportunity to help those communities. And that's when I think when technology at large is it's doing its best, it's when it's taking, you know, what might have historically been only available to the 1%, or the 10%. And if I look at flock and our business model, there isn't a neighborhood or city and apartment complex in the country that can't afford our products. That's

Will Jarvis 3:54

great. That's great. And you talk about for the audience's what the product is and how it helps communities.

Garrett 3:59

Yeah, so we have a portfolio of products that are all focused on either devices. So hardware that detects evidence, we have a number of AI and ML models that decode that evidence. And then we have software that delivers the evidence. So what does that mean? Let's talk about a really simple case. Let's say a stolen cars driving around the city of San Jose, California. We have cameras throughout the city, when our camera sees that car, immediately using that computer vision says oh, that's a white Honda. It's got a roof rack. It's got a bumper sticker, and it has a California license plate that says ABC 123. And according to the FBI, that car is marked as stolen. We don't know who's inside, but we care who's inside. But then our software delivers that information to the nearest officer so they can go dispatch and apprehend that individual. That's very much on the proactive side, right? We're tracking about a quarter of a million cars that have an active warrant or status of being stolen. endure an Amber Alert or a Silver Alert. And then on the on the reactive side, you know, when a crime does happen, that same type of computer vision of make model color, about a couple of dozen unique characteristics. In addition to that, we have a gunshot product called Raven. And then we also have a piece of software cognitive software that can consume third party cameras and create what's considered a real time crime center.

Will Jarvis 5:30

Very cool. Very cool. And can you talk about just the current state of a crime in America? How about you know, how many are solved at this point? And how many unsolved? And and how much better? Can you Can we get with kind of the technology flag has developed?

Garrett 5:45

Yeah, it's, it's an alarming statistic that only about 13% of non violent crime leads to an arrest. So if you took statistics in school, assume that the average criminal falls on a bell curve, it's obviously like, if your upper quartile criminal like you'll never get caught. And like, yeah, bottom quartile has like a one in four chance of getting caught. But medium pack is one in 10. Those are pretty good odds. Like, it's pretty easy to get away with crime. And if you go to the violent side, it's about 5050. Which is good, right? That's, that's promising. But that also means that one in 10, violent acts in America go with no justice being delivered. And I think that's pretty wrong. Like I genuinely I grew up in a household where your decisions have consequences. And so if you believe that, you know, our point of view is that until clearance rates are at 100%. For violent and non violent. We have a problem. And I think that's, as we were talking about earlier, this is this isn't really about a lack of effort. These people work really hard. It's a resourcing problem, and it's an evidence problem. And that's where I think we can help.

Will Jarvis 7:00

Got it. Is it your sense? We've gotten worse at solving crimes every time? Are we just kind of as equilibrium? Do other places do it better? Like, like, what's your sense that you're in the United States?

Garrett 7:11

Yeah, I would say. So. There's an interesting fact. Right. So two things are happening in America that are hard to correlate. One is the amount of transparency and the news is through the roof, right, like whether you use Twitter or Facebook, tick tock and pick your social media. We know everything that's happening in our communities now. And so while crime as as a total is on a slight decline, our visibility to it is dramatically changed in the last 20 years. And so that creates a a deeper sense of concern. Now, that being said, though, our clearance rates are declining, so So that's not good, right. So if you go back to the 1980s, that was kind of the peak of our clearance rates on violence. We were at about 70%. We're now down to 50%. And in my opinion, and I think most of my colleagues agree with this, the number one issue is staffing, you know, find a city in America that is properly staffed. And I would be shocked you see some of these big cities like Chicago, or Atlanta where I live, and they're 10 to 20%. understaffed. Wow. Like what is a math problem? Yeah.

Will Jarvis 8:29

Yeah. Is that physicians that can't fill or is that just, you know,

Garrett 8:33

a budget problems? It's not budget, there's plenty of budget, they just they can't fill roles. I mean, you think about when when you know, a generation ago, going into law enforcement, you think about the ideal American image and officer was looked upon with a lot of admiration. I think that image has eroded. And what it's led to is a lack of applicants. And it's led to higher attrition in retirement. And so people are coming in, you're getting out sooner. You've got all types of mental health issues in the job. It's a pretty it's a grueling job, right? It's probably very much in line with a an ER nurse where you just deal with a part of life that most people never have to see. And you see it every day.

Will Jarvis 9:23

Yeah, yes. Yes, absolutely. Absolutely. Can you talk about like the original, like the origin story of flock? Like how did you have to first have the idea for the camera and, and how did things get started for you?

Garrett 9:34

Yeah, so I have no background in public safety. I'm an engineer. I'm an entrepreneur. And about five years ago, my neighborhood was the victim of large organized crime car break ins. And the representative from the Atlanta Police Department came by and just said, Look, I'm really sorry, this isn't okay. But we can't do anything. We have no evidence It's in myself that a lot of my community members felt like the real problem was apathy. Like, did he really care? Right? And we were wrong. Like, we were really wrong, because I kept poking this guy. Right? I kept asking more and more questions, right? The, the engineering mindset of like, tell me why tell me why. Tell me why. And you get down to it. And he was like, I just need a license plate. I was like, Come on, we need just need a license plate. That doesn't make sense to me, was that look, without actionable evidence. So a grainy picture of someone's face isn't going to help me go solve the crime, I need to know who was in the area with hard actual evidence. And so I called two friends of mine that we had worked together and said, Hey, let's, let's build some of these license plate reading cameras. And I mentioned I was an electrical engineer, I'm not an electrician, so I wasn't comfortable running any power. So we did solar powered cameras, because that seemed easier. We didn't know that much about electronics. So we grabbed a bunch of old Android devices off of Amazon, you know, tore them apart. My buddy Matt wrote all the software, we got them up and running. And it was really a project, right? This was not a company, it was never meant to be a company at first. And then about two months later, we solved the crime. like legit, someone's home got broken into. They stole a bunch of stuff. There was only one car in the neighborhood that didn't live there. When the crime happened. The Police Department put out a bolo on that car, the guy gets pulled over the next day, all stolen stuff, sold his car. And I remember very distinctively calling Matt and page and being like, this is real, like every product we've ever bought. I have a dog, I have a security system. I have a doorbell camera, I have all these devices, right? Yeah. But they don't actually lead to an arrest. And what I what I want is that justice, and if you look at the primary research is really fascinating. I had also falsely assumed that crime rates were directly or linearly correlated to the punishment levels, right. So we should be really hard on crime. That's like a thing, right? At least in America, there's no direct correlation. Interesting. And the only variable that people have been able to see any correlation to is the likelihood of getting arrested. If you think you're gonna get away with it, you just do it. But if you believe you're gonna get caught, it doesn't matter whether you're looking at six months, one year or 10 years in jail, you're just not going to do it. And so what we're really focused on on flog is driving that clearance rate up, right? Like, how do we make it known that if you commit a crime in America, in XYZ city, you're gonna get caught? And what we believe and what the primary research shows is that crime will go down if you do that.

Will Jarvis 12:42

So community back consists consistency of punishment, not severity. A lot of people get it wrong. They all think it's severity. But it wouldn't make sense. Like you'd be, you know, time preference. And you have this huge like, what's the difference between 10 and 20? year sentence? I'm not sitting there calculating down on the spreadsheet. It's just whether or not we get caught?

Garrett 12:58

Oh, no, look, if you look at the data, your average criminals and 18 and 24 year old male, that is an undeveloped brain, right? It's reason why you can't rent a car until you're 25. It's not because you're a bad driver. It's because you make bad decisions when you're young. You don't actually calculate consequence. And so it's about changing this Boolean math, there's no it's not. There's no algebra here. There's no, there's no like deep calculus. It's Boolean math, like true or false. And so we're gonna flip it to true, I will get caught in crime will go down.

Will Jarvis 13:31

That's great. That's great. I really liked that approach. And I think it's, it's one where you can have a real impact on improving people's lives in a way that, you know, most people are not thinking about, which is, which is quite cool.

Garrett 13:43

It's a double bottom line business. Like we get to build really cool technology. We get to live in the technology ecosystem, right? The venture backed high growth companies, and we get to help people in the worst day of their life. It's pretty awesome.

Will Jarvis 14:00

It's really cool. When did you know you have like you had found this $20 bill on the sidewalk that this was going to be quite a big business was that, you know, I know, you found a large effect size, when you saw like, Okay, we solved the crime. That's a huge signal, like I'm on to something. But when did you know that this is going to be like a really big business and venture scalable, etc?

Garrett 14:18

Yeah, I mean, I think the thing for me was, I guess there was no one aha moment, right? There's these these these linear progressions, there's just linear milestones. So solving our first crime, the most important milestone, right, we had this brand promise this brand idea of like, could we build technology that solves crime. We also had a belief that everyone wanted that or like no one wants crime in their community. Everyone wants to be safe. So that was definitely the biggest I would say. When we started to see the network effects and the momentum, right where we we have a great marketing team. Don't get me wrong. We have I have, we'd like a four person marketing team. Yeah, and we've got 500 employees. Like because the product sells itself, right like that has such an outsized impact. And so I guess for me, there's, there's, I always feel like we have a lot to learn a lot to figure out. But, you know, the only other milestone I'll give you that, for any parents who are listening, when we clear or solved our first Amber Alert, that's when it was like goosebumps city, the whole company kind of was like, Whoa, it's one thing to help someone get their stolen car back, you know, that's tough, but like, you can go buy a new car, you know, it's just a material item. When you help a parent who's lost their child, that's, that's next level. And that, for me was like, Okay, we're clear. This is working, right? Like this is really working.

Will Jarvis 15:50

That's great. That's great. Yeah, you know, you can't can't please replace your kid. And then you're really on to something that is quite valuable for the world.

Garrett 15:56

Know, for sure. I mean, we have this customer in Ohio, is this small town, this might be a 7000 person town, and they're spending, you know, a couple $100,000 a year with us, which is a lot of money for a town that size. And not not too many weeks after installing the products, we cleared an Amber Alert, there's a 13 year old girl that got kidnapped by a secretary, this was not a this was not good. led to a high speed chase on the highway by Ohio State Patrol, like this was the worst situation possible. And the chief went on record afterward and was like, this things really paid for itself. And I probably would have spent millions of dollars if I had known this was going to happen in our town. And I think that a lot of our a lot of our towns and cities feel that way, which is this is just something that we have to do we have to protect the community.

Will Jarvis 16:44

That's great. That's great. I really like it. Well, Gary, I'm going to shift a little bit and talk about the more macro building a startup. So you, you build a startup outside of Silicon Valley, I've just started on this this journey of you know, flying to Silicon Valley to get capital, because there seems to be no good capital in the southeast that I've experienced. And then flying back to build in North Carolina, you know what I mean? Can you do think there are advantages to building outside the bubble in Silicon Valley where, especially in what you're building, you know, it's focused on an area that, you know, that part of the world is able to think about as much doesn't want to talk about, it's also hardware focused, and everybody's like software. So you think there's something good to build outside of the bubble, and that you can have unique ideas, and you're not as influenced by whatever the height trend is, whether it's web three or something like that?

Garrett 17:32

Yeah. And I think if you go back to, was it, Peter Thiel, who made the comment, like we wanted flying cars, and we got 140 characters? I think the I think the challenge with the traditional Silicon Valley bubble is everyone's focused on building b2b software, Mar tech companies that help other companies make money. And if you go to the roots of Silicon Valley, that's not what we were trying to do. Right, the original incubation of Silicon Valley in the name was about making America a better country. And so you know, there's this this movement through Andreessen Horowitz, his notion of American dynamism. I'm a deep believer in that we're obviously kind of a part of their thesis. And if you look at that, the best ideas are coming from America at large. And so I think that if you get in that bubble, you you only think about the problems you see. And the reality is San Francisco is a very unique place. And it does not represent represent the average American life. And I think about, you know, our mandate. Now, one of the things the biggest shrinks we have is, our goal is not to eliminate crime in urban cities. It's not eliminate crime in New York City. Just kill it's to eliminate crime. And I think to effectively do that, we have to have a representation of the company, right. And so we have employees across 45 states, though. And I think that's actually better for us, because I don't know what it's like to live in Ohio. But I got a team of people that do live in Ohio, and their their opinion is different than their friends in Illinois, Indiana, Georgia, where I live Florida, California, and all of that equally matters at flock because it equally matters to the country. So I think that, to your point early on, it's tough, right? There's less capital available outside of the valley. That is like very risk averse, like, I'm sure there's money in North Carolina, where you are, there's money where I am in Georgia, it's really risk adverse. So I'm in same boat as you. I raised all of my my seed capital in San Francisco, great firms like big believers in what we were trying to do. And that was really clear to them was like, I have to build this company in Georgia. Because that's where my customers are. Like that. That's that's who we were going to be. That's where I live and it would feel disingenuous to start a company trying to make the world better, but then leave my own hometown behind. So for us like I think at the beginning, it was a disadvantage. But as the company has scaled, it's become this huge unlock. Because we we deeply can build empathy for our customers, because they're our employees are everywhere, too.

Will Jarvis 20:13

I love that. I love that. With the last couple of minutes, I want to talk about building a startup serving local governments in particular, what is that? What is important to understand when you're building a start up to serve local governments? You know, one of the things we've run into is, you know, dealing with the go to market motion is interesting, you know, managing discretionary limits, RFPs, etc. What can what's the if you could give me like one piece of advice out starting out on this journey? What would it be in serving kind of local governments?

Garrett 20:42

So, I think that there's an analogy that we've stuck to with with local government, which is, if you think about the local government as a business, most businesses buy products that do one or two things, save them money, or make them money. Right, right. But if you're running the government, you're not you're not running a profitable entity. But if you keep that analogy through, then it's like, okay, what is what is the relative top line bottom line for the person you're trying to serve? And so at flock, right, we serve Police Department's top line revenue, is crime, right? That's their Northstar is like, can we catch criminals. And so we build products really focused on that. If I think about, you know, I have a friend who, who runs a company called Open Gov, it's very focused on helping companies or in this case, cities, save money, right, be more efficient. And so when you when you remove the oh, its government, and really focus on what they need to do to be successful, I think you can actually drive a shorter sales cycle, you can kind of like, pinpoint where your product is going to fit into it. I think in that case, you know, it is it is a way to do it. I would say on the downside, you know, one of the challenges we've faced in you will face as well as you start to scale is there's a lot of technology talent that is nervous about going into a gov tech company, due to the due the risk of being quote, unquote, you know, tagged as a gov tech person versus a technology person. And so we relied on our, you know, investors to say look, like, go ask them, you know, I think I think you're wrong thinking that like you're gonna get tagged, the question is, is FLOK going to be very successful? If it is, no one's going to care, whether it's FinTech Govtech, Martex, like, you are part of a really, really successful company. And that's what matters for your career.

Will Jarvis 22:31

That's great. That's great. I love that. I think that I think that framing is quite important. For Yeah, it's really, really cool. One kind of last question here. What's next for Flog? What are the next 10 years look like for you guys? Yeah.

Garrett 22:51

So right now, you know, like I said, we're at about 6% of all crimes in America, that number will continue to go up. We've got two kind of really important milestones are tracking towards. One is, we believe in the next five years, we can reduce crime in America by 25%. That will be incredible. Right? That that is, that is we will take the current curve, and we will bend the curve down and we'll see less crime. The kind of intermediate milestone that I want to see is, when can we have our first city that has a crime free year? And not like, you know, oh, we have 1000 People like everyone's friendly, and that's the neighborhood. I mean, you know, it's called a quarter of a million overheard, that was like a real town to small city. When can we build the right mix of technology? When can we help train the police department? When can we work with policymakers to establish better policy, so that, you know, town in Indiana town in Illinois town in Ohio and Florida, can say we have a year with no crime because of our partners of flock? And that to me will be the coolest moment we have achieved.

Will Jarvis 24:01

I love that. I love that. I love that. Well, you know if people found this conversation interesting, say their software engineer or you know, they're really good account executive. Where can they find you? Where should we send people

Garrett 24:16

flock safety.com We are hiring in every department, from accounting to sales, to marketing to engineering, to technicians. If you want to be in the field and help dig holes and install cameras, we need everyone. So check us out@flightsafety.com And we'd love to talk

Will Jarvis 24:33

awesome thanks so much.

Unknown Speaker 24:39

Special thanks to our sponsor does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening we'll be back next week with a new episode of narratives Special thanks to Donovan Dorrance our audio editor you can check out documents work in music at Donovan dorrance.com

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Unknown Speaker 0:41

Joey, how you doing this afternoon?

Joey 0:42

Hey, I'm doing great happy to be on.

Will Jarvis 0:46

Absolutely. Thanks so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Joey 0:53

Sure. My name is Joseph Positano. I'm a self employed self described economics expert and data analyst I write a newsletter called the prick atoss on on substack. That's my full time job. And it has been my full time job for a whole two months now. So I've had been writing for about a year and a half, and very recently took the leap to make this my my full time gig. And most of what I focus about focus on online is trying to do data analysis of the macro economy with like a special focus on labor markets and the Federal Reserve. Very, very nerdy way to say, I do charts about macro, and try to keep that as fun as possible.

Will Jarvis 1:43

I love it. I love it. Well, I want to get kicked off and ask you this. And I hate to I like my episodes to kind of be timeless and stay in test time. But I am curious about the current moment. What is going on with labor markets right now? It seems like we had a strong jobs report again, despite you know, Jay Powell doing everything in his power to jack up rates, what is going on with employment markets at the moment?

Joey 2:06

A lot, I think it is has genuinely been one of the craziest times for global labor markets, and especially labor markets in the US. The way I tried to have tried to conceptualize things in sort of a backwards looking fashion is that most high income nations, there are some exceptions, most high income nations had some combination of like a furlough program, or they were really good at blocking the spread of COVID. The US has either of those things. So in the UK, where you know, there's a lot of COVID spread, there was less unemployment, because of these furlough schemes or keeping people attached to jobs. In the US there was a lot of people who were let go at the onset of COVID don't have that strong player protections didn't have this furlough scheme that just was something that was not in federal government's capacity, period. So you had this big dispersion of cash to households, especially to households in need, at the start of the pandemic. And you had the sort of low rate environment Oh, which was necessary to get like employment levels and labor income, I'm big fan of like looking at total labor income as a big economic indicator to get that back on trend. What that meant is you had a big downward push on growth. And just to get back to trend you needed like a big upward push on growth. So over the last couple years, we're sitting here now in March of 2022, we've seen really massive upward push. And by basically started this year, sort of 2022. The strength of that economic momentum that was necessary to bring the labor market back also caused a lot of inflation. And so the story of 2020 2001 was fighting like the downturn sort of 2022 is definitely all about inflation fighting. And you have this very interesting, interesting dynamic in my mind where the Fed has been tightening monetary policy since the start of this year. That's definitely manifested in like, worse financial conditions, but maybe less bad than people expected. And the worst financial conditions have not really manifested as unemployment. You've seen slowdowns in employment growth. I don't want to like understate say there was no impact you've definitely seen big slowdowns in in employment growth and a little slowdown in wage growth, especially at the top lower end of the wage distribution. But no rise in unemployment yet. So the big question that we're sitting at now is like, okay, is is employment going to hold up? Is it just a lagging indicator from the rate hikes that have already happened with the chance of like, a recession in 2023. And we're sitting actually, like, if you're looking at some of the big sectors that like truck transportation, which is usually an early, early sign, because a lot of these are small operations, that's been like stagnant, like warehousing has been saying that a lot of the consumer goods employment has been stagnant, but a lot of other stuff has held up really well. So it's a crazy moment to say the least.

Will Jarvis 5:51

Where do you think we go from here? Do you think recession is likely in 2023?

Joey 5:56

I will, I will defer to the like nerdy metaphor casters who say yes, I haven't checked in like a week. But the last time I checked the, like, metaphor cast was something like 60 70% chance of a recession 2023. And like 80% chance of sometime before 2024. Those are not fun numbers. I think, so far part of the reason, you know, we have seen we've seen like the slowdown manifest less as drops in employment, just because there's been so much demand, so much like latent demand for labor. And I think, really, the chance of a recession, and if a recession happens, the depth of it is going to depend on like, do we see a rise in unemployment. And the other thing I'll say is like, I'm a big, don't fight the Fed kind of guy. You know, if the Federal Reserve is saying they want something, they are going to get it most of the time. They right now say that they want like a 1% increase in unemployment, right. And their forecasts, it's not like, it's one of the things we're like, we're not saying we want this, but the median forecast is that the unemployment rate should be 1%. Higher under optimal monetary policy next year, that's functionally recession. You know, you've never seen that, that rise in unemployment rate without a recession. So that's, that's the worry. I think. Like I said, think people look at people look at, understandably, you see a 60% chance of a recession next year, people are like, Oh, that's horrible, which it very much is, I don't want to understate that. But that also means there's a 40% chance and it doesn't happen. Right. So like I said, crazy moment right now.

Will Jarvis 7:57

still viable, still sizable, you know, if a layperson is listening to this podcast, and you tell them something like, okay, like, the Federal Reserve wants the unemployment rate to go up. It also sounds like a, you know, like, it's a, you know, if I told us that someone on the street, they'd be like, What the heck are these technocrats? You know, they're trying to make my life worse, try and make more like, like, can you like, just walk through? Like, why you know that that's a good thing? It's a little?

Joey 8:25

I wouldn't I don't know if I would say, it's a good thing. And if I'm taking off my own personal hat, if I'm saying what, what would someone at Federal Reserve say? What they would say is that inflation is really high. The only way to get inflation down in the short term, is to induce like real economic pain. So you're saying there's some level of real growth, you have to reduce that or get it a little bit negative in order for inflation to come down. And, you know, a period of lower negative economic growth is going to induce an increase in the unemployment rate. If there's a variance between people who view this as like incidental, you know, on the Fed, some people will say, We're raising rates to slow the economy, and that will create unemployment. And there's no other side that says we're raising rates to create unemployment, which will lower inflation, it's like, is it incidental to the target or is it like causal to what you're trying to accomplish? There's not as I wouldn't say there's a steady 100% agreement on that within the Fed. But there's pretty close agreement that like I said, there's going to have to be some increase in the unemployment rate. And the bill from like, what Jerome Powell would say is that the only way you can have a stable, long run growth in the labor market is to get rid of inflation in the short term. If you just kind of keep pushing the problem off. It's growing required. Yeah, it's like you get take the small medicine now or you take the big medicine later. Like I I'm not 100% on board with that right now, especially because if you think about it from a purely from looking at the unemployment rate, right, the unemployment rate was like three and a half percent in 2019. And I don't know if you are around for 2018. But everybody's freaking out, because the Fed was raising rates and people were worried about a recession then. And inflation was low, relatively speaking. So I don't think that, you know, four and a half percent is necessarily going to, or like, I don't think three and a half percent unemployment right now is more inflationary than it was in 2019. I think what they worry about, principally is like growth in income and spending, which was really high in 2021. And it's like slowing down now. That's what they're kind of focused on.

Will Jarvis 11:04

Gotcha. Gotcha. Makes sense. How would you rate the Feds response to the pandemic, all things considered?

Joey 11:11

I think it's obvious, especially in hindsight, that like, they waited too long to raise rates. I think it's difficult, like ex ante to look at things, you know, and say, how much would they have shifted? If I was in charge, instead of time, I would have made the same mistakes. Right, I probably actually would have done even worse than that. And I think part of it was just like, there has been a lot of chaos. And I think, coming off the back of the 2008 recession, which was consistently worse than people had forecasts and the forecasts forecasts were bad as it were happening. The Mo was like, we just can't, you know, can't let this repeat no matter what. Yeah. And I think it would have been really difficult. So in like, August of 2021, unemployment rate is still elevated, you know, most people haven't been vaccinated to say, Okay, now we start raising rates, even though that probably would have been about the right out the right time to do it. Yeah, I think it's also just that things have moved so fast. Normally, the Fed, you know, they have this opportunity where they can they raise rates a little bit, they watch how the market reacts, they watch how the economy reacts, they could say, this was a little too much too little. And then they, you know, bounce back and forth from there. 2019 as a counter example, you know, they raised rates too much. I think if you asked Jerome Powell, he would agree with you on that sentiment, they that's why they backed off in 2019 and started cutting rates again, they were like, Okay, there's too much. But the point was that they had two years there, where there was they raise rates in 2019, they hit a point where they're like, Oh, it's too much. And then they reversed in late 2019. Up until early 2020. There was no real, it was no grand punishment for that, like Mr. Wright, compared to the missteps in 2020 2021.

Will Jarvis 13:24

That makes sense. That makes sense. I'm curious, you know, how do you feel about nominal GDP targeting?

Joey 13:29

I in fact, yeah, I am generally a fan, I think, um, I wouldn't call myself a zealot. So nominal, maximum, right, not a Maxi. But a fan. So nominal GDP targeting for people who don't know is his dad, like, okay, that's gross domestic product is the sum of all output in the economy, basically taking total number of dollars spent. And what you should really be looking at is like, a growth rate in dollar spent, not a growth rate in prices. Because, you know, if you have 4%, it usually targets like four or 5%. If you have 4% growth in nominal GDP, you think like 2% of that is inflation. 2% of that is productivity. And in a situation where like, the inflation goes up to 4%. And your NGO, you're still on Ngdp target, you're like, Oh, we're fine. It's just, you know, we just had a real economic shock. And in the converse sense, where like inflation dips below target, you're saying, oh, NTP is fine. We just had like a productivity boom, or you know, oil prices went down or whatever. I think my disagreements come maybe a little more technically, with like, how you do this in real time, because the GDP data is like it's not the most robust data set as it comes out. Just because there's so many things that go into it, you know. And so Skanda Amarnath, who's a great friend of mine, he works in employee America, he worked out this framework for looking at gross labor income. So he's saying, Okay, we believe that Ngdp total spending, total income in the economy is what really matters, what the Fed really controls what they really target, what they really should target. But wages and labor income are the greatest share of that GDP, you know, it's like 60% or so. And it's the most robust share, compared to profits, imports, exports, government spending, which is all can get really messy really quick. So that's what we should focus on. And I think it's very funny, because if you were on an Ngdp framework, right, you would have said, raise rates in August of 2021. If you were in a gross labor income framework, you would have said, what the Feds doing? Basically correct, maybe slightly too loose. You know, so gross labor income, basically, just back on trend, you're saying like, it's 1% above trend, maybe 2% of uptrend, depending on what measure you use, which is pretty crazy. I have like a percent inflation. But you know, I It's the viewpoint is is the core thing you should be targeting like NGP, or should do go even narrower and target labor income. And I think the other argument for labor income stuff is just that, like, if you think about hysteresis, so this idea that you can have a short term damage to the economy that becomes a permanent scar. So someone gets unemployed. And because they're unemployed, they don't, you know, learn on the job, because they don't learn on the job, now, you've permanently reduced their wages. Gotcha. Those, you know, hysteresis components, they show up in labor, mostly, and they show up a little bit in like investment, but they're really not going to show up in like government spending or like, corporate profits. You know, gotcha. So that's, that's my disagreement is more technical than it is conceptual, if that makes sense.

Will Jarvis 17:13

Makes sense. Makes a lot of sense. Can you talk a little bit about hysteresis. And this term be thrown around a lot, which I have not been super familiar with, which is gross labor income? I really liked this term. Can you just talk about what it is and why it's important? For sure.

Joey 17:26

So I'll start with gross labor income, because I think it's the easier one. So the the base, it's really basic, nominal Gross Domestic Product is saying, take all the spending in an economy and just add it together. Nominal gross labor income is just saying take all the wages and salaries in an economy, add them together? You know, what's the growth rate there? So you're looking at, really, what's the growth rate in employment? And what's the growth rate in wages. And, like I said, the conceptual idea of why this is a little more robust is because you think the Fed has more direct control over that, like core demand aspect. And you think that core demand aspect has more influence over consumer prices, most people who are, you know, most people who are workers are spending a lion's share of their income. So if their income goes up, their spending goes up, their income goes down, their spending will go down. And that's almost like a rule of nature in the way that it isn't for other sectors of the economy. And just like I said, in real time, you can look at how wages and salaries are evolving how employment is evolving much faster than you can how GDP is evolving. So the idea of hysteresis is like kind of interesting. economic concepts begets success, right? Success begets success, and failure begets failure. And so if you're thinking about, like, let's think about 2008, with the auto industry, right? So you have a downturn, you have all these car companies go bankrupt, they get rescued by by the federal government, you have this bailout package boba, but fundamentally, like demand for cars had just crashed because the economy crashed. Right? Because demand for cars crashed, you didn't get any investment in like, new car plants in the United States, because you didn't get new car plants. You didn't get people trained in, you know, manufacturing assembly. For cars in the US, you didn't get more engineers, you didn't get all this stuff. And now, you know, 10 years later, if you look at a chart of like us, auto manufacturing, but there's like, it's not just that there's a clear drop, is that there's like a permanent level shift downwards. Got it. And that's what hysteresis is. Some people will talk about this also in the reverse, like success begets success thing, which is like maybe solar would maybe be a good example. like you think the these, you pumped all this investment into like, especially in Germany, you pumped all this investment to renewables into like, green energy and solar and that, you know, you push down the experience curve, so the costs get cheaper, so you hire more people because it becomes more profitable. So the costs get cheaper again. So your market bills, people become more enamored with your product, and you've got this, like big positive snowball rule rolling, right. I think that's rarer in the sense people talk about it less. But it's, it's, I think, in my opinion, just as important.

Will Jarvis 20:36

Gotcha. Gotcha. So you really want to avoid things where you, you know, if you have a, there can be problems, we get these bad downward spirals where you can permanently damage a and you want to avoid that kind of permanent damage, especially in the labor market where, you know, people were talking about, and they have permanent shocks that there's a study, I read a while back about, you know, people who graduate during a recession to kind of like have these permanent kind of income, like, shifts downward just because they have a harder time finding a job initially.

Joey 21:03

Yes, exactly. That's, that's hysteresis. That's like the best example you can get.

Will Jarvis 21:08

Very cool. Very cool. I want to move on a little bit now and talking about interest rates. So we recently had on Paul smelting from Yale. Do you know, Paul?

Joey 21:17

I don't think I do, unfortunately. So

Will Jarvis 21:20

he's an economic historian wrote this really interesting paper I really enjoyed it's called the Super secular decline of interest.

Joey 21:27

Okay. Yes, I do know his paper. Yeah, absolutely. Absolutely.

Will Jarvis 21:32

Do you buy this notion that we're just experiencing this kind of wall run 800 year trend and decline of interest rates? With, you know, variation, right. So it's noisy, so it's going up right now? But do you think we like we just face you know, permanent kind of lower permanent lower interest rate environment, where, you know, squirrels perhaps always have to pay someone to, you know, hold their knots or something like that you can't just it's like the national state is not, you know, positive interest rates.

Joey 22:00

i. So i This is definitely an area where my thinking is mushir, this is like, where I am more open to debate. I am not the biggest fan of this idea that we have like a PERT like 800 year decline, secular decline in interest rates, I do by the, like, 50 year secular decline in interest rates 50 year long and a decline in interest. Based off the idea that just one, you have lower productivity growth in most high income nations nowadays, to the like, lower and middle income nations that you had, especially in like the 70s 80s, that had pretty substantial growth, also petering out, three of the global population growth is lower. So if you think about like, the very raw idea of like, more people require more homes and cars and oil, whatever. And that is investment requires capacity investments that put upward strain on on real interest rates. So lower populations should ameliorate that. And that you will especially have older populations, and longer lifespan. So you have this big stretch of time, where lots of people in high income countries are retired for 20 years, or 30 years. And they have a big pile of savings that they are drawing down very slowly and conservatively. And all of that puts downward pressure on interest rates. So if you look at like, it's, it's actually kind of funny in the long term sense that everybody's panicking about the Fed causing a recession. And like the five year real interest rate is like 1.8%. That's not a lot by historical standards. Right. But the panicking is not again, I'm not trying to not trying to like disgrace, the panicking, the panicking is little justified, I'm saying that a 1.8% real interest rate can wreck a modern economy just because that's, you know, secularly interest rates are pretty low. I will say I think the lesson of the pandemic has been, you know, when there's like the market monetarist insight where you're talking about if interest rates are high, usually it means that they were too low in the near past. You know, you have high inflation now you're trying to fix it. And that's like the environment, especially the United States is in right now. Interest rates are high, primarily because inflation is high primarily because interest rates are too low in you know, 2021 2020 maybe Do the opposite of like the 2009 2010 thing where interest rates were low because they were too high previously. So we just learned the inverse lesson each time. But I think if you're looking at like, you know, people some perspective is you look at like the Austrian century bond. So Austria issues a 100 year bond, which, by the way, greatest deal of all time, they issued that at like 1%, interest rates are less negative, but it's like trade. I think, if I looked at right now, it's trading at like, 2% right now. So in the euro area, people expect short term interest rates to be under 2%, cumulatively, for like the next 90 years, that's really low. And those are nominal rates. So you're thinking the real rate should be somewhere basically, at zero or lower. There are some people who think so this is like the good heart thesis, there's this idea that like, Okay, people were getting older, which was, you know, lowering interest rates, but that was mostly because of population decline. And mostly because people have you fewer kids. So think about dependency ratios. So the ratio of like workers to non workers, the dependency ratio was going down, just because there was much less children. Now, there will be going up, because there will be much more, you know, older retired people, that's going to be a positive. That's going to put positive upward pressure on real interest rates, you know, so right now we're in the downward phase, but in like, 2030 2040, we'll be in the upward phase. That's like the only kind of decent counterpoint I've seen to this idea. I'm not I don't think I buy it, both. Because I think like lifespans are getting longer. And because I think just in general, we're losing, like, the productivity growth of places like China, as they get reached like high income nation status. And I'm not at a core level, I'm not sure I buy the thesis. But like, that's the interesting counter thesis. I've heard. It is something where I'm like, not 100%, in my thinking on.

Will Jarvis 27:19

I love it. I love it. Do you have any ideas? What happened to TFP growth? In 1971? Like, what what the heck happened? And why did it happen? Do you have any any faults there?

Joey 27:31

Should negative like small questions? So tip total factor productivity growth, kind of fake.

Unknown Speaker 27:42

Love this, I love this. I love talking about this.

Joey 27:44

So the idea is like, Okay, you have an input of labor and input of capital, and you get an output, you know, you want to be able to use units of labor and capital more efficiently to generate units of output. Total factor productivity is really hard to measure in like an optimistic sense. And conceptually, it's like, conceptually, it's rough. Because of the kind of stuff that you're thinking about, like the Cambridge capital controversy, if you know this, where you're like, okay, the Cambridge capital costs, controversy. introversion is, is capital like a thing that you can measure? Or is it just a byproduct of like future? I see, it's just a byproduct of future output of consumption. Right? So is the factory valuable as like, measured in terms of inputs and steel and concrete? Or is it just valuable as a sense that it can produce factory goods that you can then sell and you're estimating the future value of factory goods? I come down on the factory good side, right. So you're saying capital is valuable? And really, you're measuring its value based on what it can do? Not what it's made of. And as a result, when you try to do this, like, what's it made of calculation, you end up with a lot of wonky results. So if you look at labor productivity, right, so you're saying just ignore capital, pretend it doesn't exist? Pretend it's fake. And say, for an hour of work, what does the average person create? That in the United States went up about two and a half percent a year consistently, through, you know, long run through recessions, through inflation, through a lot of chaos, from like the start of the post war period 1950 to 2008. So like, that's a story that doesn't stop in 1971. So if you look at labor productivity growth, it's still you know, increasing at basically the same rate as if you really wouldn't even notice the gap in 1971, except for the recessions that happened in the 1970s. And then you hit 2008. And then it's like drops one and a 1% dish. It's like brutal drop. So that's where I think like the the, this continuity is it's like post pre 2008 posted 1000 I not pre 1971, post 1971. And that's I also think where the more meaningful distinction is in terms of like the global economy where people, I don't think people in the 1990s were like, wow, what happened to total factor productivity? That's not my interpretation of how people felt in the 90s. That is my interpretation of how people felt in like, the 2010. Sort of, like, Why does everything Why does everything feel bad? You know, can't articulate fully why, like, you know, it's very people in high income nations who are saying, my life is worse than my parents, or it's worse than I expected. That's something that everything really is a post 2008 story, not a post 1971 story.

Will Jarvis 30:56

Oh, that's fascinating. This is really bad. So I'm curious. What do you think changed post 2008? Was it it wasn't just like, you know, populations is getting older, or is it something like what do you think's going on there?

Joey 31:05

Um, I think the post 2008 story is really like a history story. Like on the scale.

Will Jarvis 31:14

It is it's just like, so it's all the Feds fault if they had fallen Scott summer and like loose a bit, you know, what I mean, or something? Well, they don't like targeted nominal GDP, we'd be fine.

Joey 31:24

I think. I think if you could have gotten so nominal GDP growth back on trend, you would feel a lot better about the state of economy. I think people I think the Scott Sumner like the counterpoint to this Scott Sumner thing. And this is like the great like, market monetarist versus like bond trader kind of debate like Finn twit bond trader kind of debate is like, yes. Okay. Fed controls all these nominal variables. Okay. I agree. But the, the, the bond trader side is like, are they it's like intermediated by banks. And by credit, and when, you know, the banking system collapse into US aid, like, they had to fix the banking system. That was the problem, not what interest rates were. And the other side is odos. It was interest rate. I think we're like, I lean more towards the like, Finto bond trader side, I need to come up with a better representative will say the shadow banking side, so I lean more towards the shadow banking side? Partially just because this was this was like a global phenomenon. It'd be really weird if everyone suddenly messed up in the exact same way. Exactly. Yes, yes. Very, usually, there's a reason why that happens. I think part of the reason exacerbated by some of the bad decisions from an industry point of view was just like the credit side was totally messed up. Like, if you were to drag that productivity chain out further, you know, look, at pre war United States. You see that same kind of productivity dip that doesn't recover in like the 1930s. You know, it during the Great Depression is me. Gotcha. And both of those stories are, in my mind, partially about your credit systems failing, and also partially about monetary policy being too tight and wrecking the economy. Because of that partially exacerbated by the credit partially exacerbated by the interest rate side. It's very funny to look back at, like, especially in Europe, like 2011 When tree che at the European Central Bank was like, let's raise interest rates here, like the unemployment rates 10%. What did you do at that, but that was like, the logic inside a lot of central banks. That's that's how they felt about the economy in 2008 or two, there's any throw like, oh, we'll be at zero for like three years, then we'll be fine. They like that was a big underestimation on that part.

Will Jarvis 34:08

Kind of kind of kind of missed that. I want to ask more about 1971. Sorry, to harp on this. It's interesting. Okay, cool. I find this infinitely fascinating. And it's part of this brace for this, this podcast actually, when I got started on the on the journey, so if TFP growth is, is fake, I want you to testify to productivity, like as a as a measure is fake. If we buy that, what about like the prices of essential goods that seem to have skyrocketed since the 70s? Like so I think of like health care, education. And, you know, housing, is it just some kind of bubble effect thing where, you know, there's just like, we've reached some hard limits on on productivity in certain sectors, where it's just really hard to kind of automate the string quartet. You know, in person you just see it, or is it something else going and on.

Joey 35:02

So, just to walk back a little bit the tip thing. Like I said, I don't want to mean that it's literally fake. I just want to mean that it's like the good measure. It's not the most robust measure. And I think it leads some misleading conclusions. Gotcha. But I think it just like an interesting debate, both because you can pinpoint a lot of changes that did happen in the real economy, especially around housing and healthcare, to the 1970s. And also that like, it's not like countries with significantly better systems for administering these things aren't also struggling. You know, there's, I do think a lot of this is fundamentally like, like you said, in as an economy gets wealthier, people buy more services that buy less goods as a share of total consumption. And what that means is like, you know, wages are the core input to services, if the productivity and manufacturing is going up so much, you know, you end up having to pay a lot more to pull workers away. Or in a broader sense, you just get this specialized post industrial economy where most people consume services that work in the services sector, the price of services goes up, because the big, you know, input to the price of services is wages. And that's still like a story where, you know, real output is going up. I think it's kind of funny when people are like, yeah, there really hasn't been like, oh, has healthcare gotten better in the US since the 1970s? Like, yes. Yes, in a lot of ways very much. Yes. And I don't want to like overdo it on that. Sorry. Because I think especially in healthcare, this, there's a lot of technological. There's a lot of technological advancement that will show up in higher productivity, better outcomes and the way people you know, want it to be. But fundamentally, there's a certain limit where you're like, okay, like long term care requires a certain number of people per patient. And the price of long term care will go up, as wages go up, and wages go up in the long term. So the price of long term care just do can't go down. Right, and you'd expect it to occupy a larger share of people's budgets, even to the extent that they're able to afford more of it. You know, makes sense. And I think the land you know, the housing story is very obviously, like peak US housing output was in the 70s. And it was getting annoyingly bad by like, 2008. And then it got catastrophically bad after 2008. That's definitely story we could talk about, like legal creep about nimbyism about like the post racial integration efforts to constrain housing production as a method to enforce segregation, all which makes the housing stuff worse. But also, you know, fundamentally, if wages are going up, there's a limited amount of land. I wonder what what's going to happen to the price of land? And so I do think it's one of those things where it's like, to some extent, a natural byproduct of how economies are structured, exacerbated by policy decisions in the US.

Will Jarvis 38:41

I see. So that's kind of the essence of the story. Yeah. Gotcha. Well, you know, going off of that,

William Jarvis 38:47

what is, you know,

Will Jarvis 38:49

if we zoom out, what does the next century look like? Do you think for America, it seems like America is well well positioned on the world stage. We have decent fertility, decent demographics, compared to a lot of other developed nations. What's your thought on the long run outlook for America?

Joey 39:06

Yeah, I think I'm still bullish America, I think you know, not to get all like, hoity toity about it. But it's like if you go abroad and talk to people who live, you know, in the vast majority of places, will talk happily about how much they like the United States, how much they admire, like the US institutions, how much they want to move to the United States, how much they view it as like the place to be. And I think like, with the exception of maybe Canada, and Australia, which are functionally just too small, to be global players, sorry. It is still where you It is still like the hedge, Amman. And I don't see things that I don't see a situation that challenges that right now. I think the big question mark is still China. I think it has been a series of big ELLs for like people who are bullish on Russia over the last like 10 years. Unfortunately, for people in Russia, I think people who were worried about China, which I think is a worry if you care a lot about global democratic freedom, and rule of law and democracy and all that good stuff. Also, especially over the last year, two years has been a pretty bad situation. Right? So it's like, if you're, if you're looking at the world, as it is, now, the US is still the least bad option. And there's that quote somewhere where it's like, but I think it's funny, because I'm in like, the finance world, where especially like, when, when the Russian invasion happened, and the US government froze the Russian Central Bank assets. And you had all this drama about sanctions stuff people were talking about, like, our country is going to move away from the US dollar. And it's been really fun a year for that thesis, because everyone, every major country on planet Earth has been panicking about not having enough dollars, since February of 2020. That has been the dominant theme of like, worrying about your exchange rate compared to the dollar worried about how your economy versus dollar raising interest rates. So you catch up with the Federal Reserve has been like the number one theme, and people were are much less concerned about, you know, the, with the rise of China means for this, and that, I think is also, you know, maybe like the 2015 2016 era of like peak. International PR for China, where you look at, like the Belton road investments are down a ton or like, Chinese foreign investment it down a ton. And just general people global opinion of China is down a ton. So yeah, if like I said the least, you know, comparatively is bad option. I am, like bullish India, in the sense that I'm like optimistic about the long run trends in growth there. By pure factor population, you know, but probably going to pass the US in GDP sometime. But I think that's still still a long ways away. And, you know, India's much more free, much more democratic country, although, you know, I'm not the biggest fan of like the regression towards authoritarianism over the last few years. Like what you know, compared to most countries on planet Earth, is right, free democratic. So I don't really worry about it, except in the sense in the same sense that our worry about like the United States is political institutions being subject to failure and undemocratic. And things like that. Make sense?

Will Jarvis 43:29

It makes a lot of sense. Joy. I have one last big question here. How did you originally get interested in in blogging about macro macro economics? And, you know, how did you first get started?

Joey 43:43

Well, it was like, I think the first thing I wrote was June of 2021. So this was like peak pandemic, boredom. So for me before, before the pandemic, I was a Peace Corps volunteer, so it's working Nice. Working abroad, in Uganda, then I got bounced back to the US. And I think there was a lot of people, you know, you're unemployed, I didn't have a place to live at that time. So you're like, Okay, I gotta get all my ducks in order, you gotta get a job yet to get, you know, a place to live. You know, at that point, I had, I had all the ducks in order. And there were an order for like, six months. And so now I was boarded was setting it. And I was like, realizing, Oh, I have, you know, things I'd like to say things I'd like to share about the economy. And so that's when I started, you know, publicly trying to share those things. And I think writing and blogging is great as like an iterative process. You know, you're writing people are commenting or criticizing and you're updating what you write or you're, you know, getting better at how you communicate things like that. And shifting the things that you're interested in and all that good stuff. So over time, I just tried to keep myself, you know, at first, like once a week that I eventually started doing like more more frequent stuff. And then it hit a point where I was like, Okay, I have a lot to say, I don't have unlimited time to say it, especially when I'm working a full time job. And I had the great privilege of like having people who who truly care and were willing to listen, and were interested in the same kind of random nonsense that I'm interested in. So I was like, Okay, this is the time to do it. If you if I was just thinking like, Okay, if I don't do it, now, there's going to be all these things, I want to say that I'm never going to get the chance to say all I gotta at least try it. And I've been very humbled by the response, you know, since I started doing this full time, and I'm very happy now to be able to put out more interesting stuff to do like the kind of really in depth research that I couldn't do what my time budget was 10 hours a week, right. And I'm really enjoying, you know, just opportunities to be able to speak with people, things like this, where you get to have an interesting, back and forth.

Will Jarvis 46:13

I love it. I love it. Well, joy, what's the next 10 years look like for you? Have you thought about it much? Oh, boy.

Joey 46:20

It's funny, because the personal forecasting record is zero to 10. never gotten anything, right. So if you would like if you go back, at any point in the last like, five years and tell me, where do you see yourself in two years, I would have gotten it wrong. Yeah. So I am trying to take things one day at a time. I think the benefit of the benefit of like writing is you have a community of people who care about the same kind of things that you do. And so, you know, I'm planning to take the writing stuff as as far as I can go with it. But I'm also aware that there might be a time and a place where I want to do something else interesting. And I have the very great privilege of having this platform that I can use in that pursuit. But right now, I'm just writing.

Will Jarvis 47:19

That's great. It's great. It's a real thrill superpower to have a community like that. Well, joy, thanks so much. For coming on the show. Where can people find you? Where should we send them?

Joey 47:29

So I am on Twitter, most of the time, it's just at Joseph pollo. Tanto or Joey politan. Oh is the actual username. I write a newsletter. It's a prick. atoss.io is the name of my substack. It's a K sound, but it's a C letter. Because that's how Latin works. So it's APR, i see i t a s.io. Good deal. That's where all my writing is. You can also follow me on LinkedIn. I don't know.

Will Jarvis 47:58

I love it. And I highly recommend the blog. It's really excellent. Thanks so much joy.

Joey 48:03

Yeah, happy to be on. Thanks for having me. Definitely.

William Jarvis 48:09

Thanks for listening. We'll be back next week with a new episode of narratives.

Transcribed by https://otter.ai

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars du se joins us as a co host. Well, Devin, how are you doing this evening?

Devon Zugel 0:42

I'm doing great. It's nice to be here. I'm really looking forward to this. How are you guys doing?

Unknown Speaker 0:47

We're doing great. Thank you so much for taking the time to come on the show today. Do you mind giving us kind of a brief bio and some of the big ideas you're interested in?

Devon Zugel 0:55

For sure. So I'm I'm a bit all over the map. But I studied Computer Science and Economics at Stanford. While I was there, I was the editor in chief of the Stanford review, which is a infamous paper at times on campus. I after that I graduated, and I was a software engineer at a number of tech companies, most notably affirm, which is a buy now pay later startup, that sort of trying to reinvent the way that credit works. And then after that, I transitioned and became a product manager, and was the founder of GitHub sponsors, which introduced money into GitHub, and achieved $10 million of annual recurring revenue within 18 months. And then later ran the the department that was responsible for building all tools for open source developers at GitHub. And then throughout all of these things, a love of mine has always been urban economics, architecture, street design. And so I've had a pretty active blog, where I just talk about the things that I love the most. And I tweet a lot about that stuff as well.

Unknown Speaker 2:00

I love that I love that. You've recently visited Prospero, is it prosper? Oh, how do you pronounce it?

Devon Zugel 2:06

Yeah, I pronounced it. Some people say prospera. Okay, I've heard different things from even the team at prosper. But the accent is on the Oh, so like, if you know, and it's a Spanish speaking country. So I think it's prosper.

Unknown Speaker 2:19

Gotcha, good. So prosper. It's it's for the listeners is a charter city down in Honduras. And you've also visited Panama to explore kind of the state of, you know, special economic zones and how we can use them for different like medical research and different applications, different legal regimes, we can operate under how bullish Are you on the future of charter cities? And what are kind of the biggest challenges, you see that they faced becoming a robust option for people to migrate to kind of at a large scale?

Devon Zugel 2:49

It's a great question. So charter cities is a pretty broad term that I think different people mean different things when they use the term, but they think that they're talking about the same thing. There's a lot of overlap, of course. But there's a few terms to familiarize oneself with. One is sec, which stands for Special Economic Zone, sometimes they have different acronyms, but essentially, the concept is carving out an area within a jurisdiction and creating different types of laws within that that zone. So that, generally, it's to develop, increase economic development, and sometimes achieved other goals. The most famous Special Economic Zone in history is Shenzhen in China, which in 1980, was part of Communist China still is, but it was extremely communist, you couldn't own anything. Workers couldn't leave their jobs, yada yada, things didn't work so well, that the you know, there are a lot of famines wasn't super effective. And then in the 80s, Deng Xiaoping said, hey, maybe we should give his comment this capitalism thing and try, and maybe we'll do a little bit better. And he didn't quite say it that way. He probably that wouldn't have gone over well, but he then introduced a number of reforms into this zone of Shenzhen, which he did not introduce to the rest of the country until later, and within just a few years, the economy within Xinjiang had dramatically grown, things were doing a lot better. They had some of the first skyscrapers in China, people were making more money than they ever had before. And the experiment was just a resounding success because they tweaked a few key things within the labor law, property law and a few other a few other things. So that's I think, the that's, that's a special economic zone. And charter cities, one of the key themes within charter cities that's most popular is taking this idea of special economic zones. But then, instead of having just within in your own country, maybe you would host it somewhere else. I think one of the big things that people mix up with this is a lot of people who think about charter cities are also interested in self sovereignty sort of more as an aesthetic preference and choice, which is not to say that that is contradictory with this more policy oriented, reform oriented approach, but it's just a it's just a different focus. And I think that people who are really interested in one often end up getting pulled into the other as well. And then there's a bunch of other topics that are tangentially related, like intentional communities, and in innovation zones, and things like that. But there's a lot of different ways that that could explode into like an entire podcast of his own or just like saying, What is a charter city? But hopefully, that's a that's a quick overview. Do you mind repeating the actual question because I've spent so much time just defining it?

Unknown Speaker 6:02

What do you think the biggest barrier is for charter cities to become, you know, prosper as an example? Like, what is the biggest barrier, you think, to becoming a robust option where high skilled people can where I agree to them? It seems like there's this Suvarna law, how do you say it? I can't say, sovereignty problem? Excuse me? Sorry, we were talking before we actually talked on the podcast about that, about how, you know, it seems to be a real challenge. How do you carve out like a space that is your own in this like, kind of crowded world?

Devon Zugel 6:35

Yeah, so I think the, it let's just use the economic development version of charter cities as our definition here, just to focus the conversation. So like, sort of trying to recreate what Schengen did to to stimulate growth. And that's one of prosperous really big goals in Honduras. And I'd say that one of the biggest challenges is that to build a place where investors and entrepreneurs and people creating things feel safe, to build something new within a new system, they have to have confidence that that system will continue to be around in the future. And unfortunately, the countries that are most open to trying something like a charter city, are not the most stable. Honduras was the murder capital of the world for a long time. Luckily, it is no longer, but I don't think it's too far off. It has had dramatic regime changes in the past, including disputed cute coup in the late 2000s. Recently, they, the previous president, was a known Narco trafficker, and then he was replaced by a stalwart communist who thinks that Venezuela is doing great. And so Honduras is a tough place to be. And it's a tough place to be as a business person who wants to make safe investments that will not get appropriated by the government, or not have drug gangs, you know, over running them. And I think there's a very strong correlation between countries that are willing to try something new, but then also have a bunch of problems. Versus countries that are more stable, that but are maybe more prosperous already. And so they're not as eager to experiment. I think if you draw a two by two matrix, though, there's some there's some bright light, which is, I think it's less about the stability of the country, and more about how rich or how poor it is, in terms of how attractive having something like a charter city might be. And so if you put something like, you know, Honduras is in one corner, which is it's both poor and unstable. And then like, Switzerland is like rich and very stable. There's countries like Berg y is one that I think is it's not that rich, it's not. It's also not extremely poor. It's like sort of a middle income country, but it's very stable. And I think they can see that they could be more wealthy, they could have an even better quality of life. And so I think a country like that would be a really good place to target building something like this. There's probably other examples that I'm less familiar with, but I happen to spend a lot of time in Iraq why so I think it's a good target.

Lars Doucet 9:21

So to kind of cycle back like we could talk endlessly on how do you protect yourself from having the Hong Kong effect happen, where you have this great, different system and they come down crush on it, but um, real quick, let's talk about what makes these kinds of things interesting, the first place he talked about, like three key reforms that happened in Shenzen that caused this economic miracle to happen. Well, what were those reforms?

Devon Zugel 9:43

Oh, let me see if I can think of all the specific details I'm I'm hesitant to say exactly what they were because their their specific legal changes, but but I think like at the high level, they make it made it possible for people to own property. They made it possible for for workers to leave their jobs previously, the government like the Communist Party in China would just like assign you a job. And that's what you would do for your whole life, which was not great for productivity or motivation. They, I believe opened, I think this was part of this reform, but I would actually have to look it up. I believe they opened up Shenzhen to foreign investment at that time as well. Although they continued to have rules around Chinese ownership, that restricted like complete, complete foreign investment, it was it was a lot of changes, there were there weren't just a handful, it was really sweeping reform. And I think that one of the big things that China had going for it was that people saw that the Chinese, the Chinese Communist Party, was probably going to stay around for a long time. And even though they had been creating a lot of problems for their population, for generations, at that point, they still had a ridiculous amount of power. So they could, they could just push reforms through in a way that I think that more democratic governments may have a much harder time. I'm not saying that we should stop having democracy. And like I live in I live in the US and not China for a reason. But, but that is one benefit that they have, I think it's also useful to look at other cities that have successfully played had this had basically gone through this playbook. One of the most notable ones is Dubai, which is also in a certain form of totalitarian government, where the leader has ultimate power and can just say, something's gonna happen, and then it happens. And they're able to do things that are quite unpopular, because they can just move forward. And with a lot of, I think the essence of a lot of these problems is that, and the reason why it's harder to do in a democratic system is because a lot of these issues are things that by making things better in the long run, it can be made things a little tougher for people in the short run, you have to make some tough calls. You know, if if you want to cut down on corruption, or you want to, like live in a world where so and so's political power gets gets reduced, you end up in a situation where there's a lot of powerful stakeholders today who want don't want to see that change happen in the future. And so having democracy and having a situation where people can vote on their interests today can create some issues.

Unknown Speaker 12:36

That make sense. Let me Devon, I want to ask you a question. Sorry, it's not not all the outline, but but it is related. It seems like a lot of impetus. Interest in charter cities is driven by the fact that a lot of our institutions that we currently have, let's say in the US, but don't work so well. Well, one of those is just kind of the nature of our cities like ours, a lot of our cities are incredibly expensive. You know, some cities like Houston, you know, they're less expensive, but they have this just crazy sprawl. And it's really difficult to get places and they're not super livable. Can you talk about kind of what's gone wrong with our cities, and maybe some things we can do to fix them?

Devon Zugel 13:12

So many things have gone wrong with our cities, where do I start, but I think I'll highlight the ones that I find most sad, because we just did this to ourselves for like, no reason. But there's, there's all these rules that we've put in place over time, that are completely are doing, they're just like not about the laws of physics whatsoever. They just make it illegal to make things nicer. So like, very specific, petty, but important example. Most cities in the United States have rules about minimum street weights. And there's a bunch of reasons for this. But one of the reasons is fire trucks need to be able to get through and you know, save house if it's burning down, which is a good reason. And until you think about the fact that we could just make the fire trucks smaller, instead of making the roads bigger. And for whatever reason, the people who wrote those laws did not consider that option. And if you look at places like Japan, or older towns in England, or any place that has more traditional development with very, very narrow streets, they do not have notably higher rates of fire deaths or fire problems. They just have smaller fire trucks to get through the tiny little corners and and save things. And like me, you might be thinking, Okay, what's the big deal with street widths like it's just, it's just like one random detail. But street widths have a dramatic impact on the amount of space that we use in our cities. And when you have wider street widths, everything is now farther up. apart. And when it's farther apart, it's now harder to get to where you want to go, you now probably have to get into a car. And if as soon as you have to get into a car now you actually sat even more infrastructure, which makes things more far apart. And there's a bunch of other things that we've done in our cities that essentially push things farther apart. That there's this sort of this tragic feedback loop, where things being farther apart, make other things farther apart. And you just end up wasting ridiculous amounts of space. I could rant forever, and we could talk about minimum setbacks, we could talk about minimum parking requirements, we could talk about minimum lot sizes. There's a lot of them. But I think this is one of the big, big problems in the cities. And this results in much worse affordability. It result in uglier cities, like if you've ever walked down one of those roads, which is like the word for road slash Street, which, you know, it's gotten maybe two or three lanes of traffic each way, and a tiny little sidewalk and no shade at all, because the street is so I'd like no one wants to walk there. That's incredibly unpleasant. So yeah, it makes our cities uglier, and more expensive, and less environmentally friendly. It's just like bad overall.

Unknown Speaker 16:20

The big sets, who does cities Well, in the developed world at this point,

Devon Zugel 16:26

I have critiques of all of them. But there's different dimensions that we could look at. But I think like, a lot of people would intuitively say, Oh, the Europeans are so much nicer making cities like I love to go to Rome, or London or Paris for vacation. But if you actually look at where they're developing new neighborhoods, and you walk to the outskirts of these, these towns, they tend to be pretty crappy themselves. And they actually look a lot like American towns, I still think that they're better because they're working with better bones often, but I don't think that they actually have some, like smart secret that we don't have. So that's not the answer. I think I really admire Japan, a lot of a lot of our bonuses kind of like the obvious answer. But Japan has a number of systems that are very different from American ones, that result in denser, more interesting cities, and also much easier to serve with with really good public transit. One of these is that they allow people to build kind of whatever they want on the property, as long as it's safe. And people can get permits quickly there. And this, you see the results of this in housing prices in Japan, which are actually not that high, even even in the densest parts of Tokyo. Another thing I admire a lot about Japan is they have a system of zoning that is I call sort of a blacklist as opposed to a whitelist approach. So in the US, what I mean by that is in the US, the typical type of zoning is called Euclidean zoning, which says in this area, you can have single family homes in this area, you can have commercial retail, in this area, you can have industrial, by contrast, Japanese zoning allows for basically different nuisance levels, saying, if any, basically the rate at like, I think it's like maybe out of 12 or something. And if they write something as a one out of 12, then they say this has to have like almost no nuisance whatsoever. So it's going to only be like single family homes and very quiet. If you go all the way up to the opposite scale, you can have like factories and really loud obnoxious things. But if you want to put your house there you can. So like you don't maybe wouldn't choose to put your house right next to a factory. But if for some reason you have a really good motivation to do so they're not going to stop you. And I think this is great, because like there's a lot of people who would prefer to live right over a loud bar so that they can live, you know, they have a shorter commute, and they're willing to make that trade off. And I think that basically the government shouldn't be telling you what trade offs you should be making one way or another. The types of zoning I do support are sort of more like around hazards. So I don't think we should be allowing people to put their homes next to like toxic waste sites or something like that. Because they probably don't have the information they need. So there's limits to what I'm saying. But But Japan is like well within those limits, and the proof is in the pudding that the housing prices are much lower and Japanese cities are really cool.

Lars Doucet 19:44

Have a kind of follow up question to that. So it kind of strikes me that the sort of Euclidean zoning the SimCity zoning is I think of it as is very much a kind of, it feels like a vestige to me of this early modernist, you know, kind of like, I have God playing SimCity with the real world kind of mindset that came out of the post war period. Right? And it seems like what you're advocating for is more of not exactly laissez faire, necessarily, but like more of just like, let people like let the cities and towns that people actually want to build naturally emerge. Right. Would you say that's a fair, accurate characterization?

Devon Zugel 20:26

I think that is fair. Yeah. And the, the, if you look at the places that are most desirable in the US to live, as measured by housing prices are sort of like the, what's the coolest neighborhood and X city articles that you can read? Like, they're almost always towns that were built before the 1930s? There are neighborhoods that were built before the 1930s. So yeah, I think other people want this too.

Lars Doucet 20:51

And so to that model, so to bring it back to model cities, or, or charter cities, or whatever you want to call it, to what degree in the charter cities that you see, do you see those motivated by that same kind of SimCity mindset of it's like, well, I'm going to build a masterplan city, but I'm going to do it right? Or do or are there ones out there that are going, it's like, no, we're gonna go out here and let the good city emerge and restrict these laws, because I kind of see the tension between it, because it's like, we need to get away from the bad regulations. That's why we need to have a zone that's free from these laws. But then sometimes you see like a kind of a big personality that has like these real specific opinions that wants to like Master playing their thing, do you see a tension there? I

Devon Zugel 21:36

think it depends on the scale that we're talking about. And I do see a tension there, for sure. I think at the scale of like, realistically, most of these charters, the type projects are still at the scale of neighborhoods, they're not at the scale of even towns or cities yet. And if you're building sort of like a little place or like a little campus, I think that you can model that person more as like a little business that is sort of making decisions according to what it is like customers and users need. As opposed to modeling it as like an ecosystem that can't be controlled and has like a mind of its own. As you scale up, it becomes less and less true. I do think like one of my big critiques of prosper. And I've told the team this when I when I went and met with them is that all other marketing materials have these beautiful, Zaha Hadid buildings. If you're familiar with Zaha buildings that are these, you've probably seen some pictures on like architecture magazines, they have these sort of like very organic, cool shapes, a very modern and like cool looking. But these marketing materials for prosper, it's like all of the buildings are Zaha Hadid buildings, and they're all designed by single architects to sort of like fit into this cool, like, mega structure. And I think that that goes against a lot of the principles they themselves are claiming to have. And, you know, they say, oh, no, no, that's just like, you know, that those are just some cool renders, like, that's not what we're gonna necessarily, you know, who knows if it's going to turn out that way. But I think that like the art that you choose to reflect your project says a lot about your underlying aesthetics and goals and motivations. And so I don't, I don't really buy it. I mean, another another related one is, if you guys have heard of praxis, there's this like online community, their strategy is build an online community first in the cloud. And then we can have some sort of like collective collective bargaining power to go start a city somewhere else, we that's a different conversation topic. But they if they have this cool Twitter feed, or they like posts really interesting, like art of super cool looking cities. And in some ways, I really liked them. But in other ways, I'm really creeped out by it, because they never have people in them. Like these, these like pictures of cities, they say that they want a building, like never have humans. And so I'm like, Who are the cities for? And maybe that's just because they like really like the epic city pictures that they have there. But I think it it points to like a deeper issue.

Lars Doucet 24:12

I went to architecture school for my undergrad and I just had this huge pet peeve at the time of just like, I want to be architecture gods, who just like we're in love with buildings, but not necessarily people and it can kind of show it in their renderings and their things. I mean, that's not to slag off the whole field. There's amazing architects who really are people first, but I always it's a vibe I recognize a lot. I'm speaking of aesthetics and urbanism and stuff, you know, we talked about urban sprawl and building roads that are too big and everything. You've talked about urban sprawl being a tragedy, a comment of the commons, you know, can you talk about that, you know, and this notion of how short term or individual preferences can kind of set advertised the whole set, nobody gets what they want, even though everyone's doing what they think they want, for sure.

Devon Zugel 25:06

So people aim to max maximize roughly two things when they're deciding where to live. This is a very simplified model, but they aim to maximize access to cool stuff, to their job to their friends, whatever it is. And they also want to maximize space. And these two things are fundamentally in conflict with each other. Because the place in America that it has most access to the most number of cool things is like, you know, the center of Manhattan. But the center of Manhattan is super expensive, precisely because it has a lot of access to things. So people are trading off on this frontier, and different people will make different trade offs. Okay, so that's like point one. When people are thinking about access versus space, they end up having this choice to make for themselves versus for other people, like if you can, I think most people's ideal living situation, or many, many people, if they could get it for free, would be to have like a huge mansion that takes up an entire block of Manhattan, and then have everybody else in the world like live in Manhattan and continue to do cool stuff for them. So like, they can get a huge yard, they can have, like all the rooms that they need, they can have their like gym, downstairs, in their own house, whatever. But they can also have like Broadway within a five minute walk, and amazing restaurants and so on. A lot of people would love to have that. Now, the problem comes that the thing that you have more control over is how much space you pick, and not how much pace everyone else around you picks. And so people will tend to go towards the maximum space that they can get for their budget, within the access of the things that they need to have access for. And they'll sort of the they'll expand their house as big as they can afford to have. And what this means is like if you're a billionaire, you have a townhouse in a townhouse slash manage mansion in Manhattan, which takes up a lot of space. Or, you know, if you're not doing quite so well as a billionaire, but you're still making a lot of money, you have like a three bedroom or whatever it is. And what ends up happening over time is because the only thing that people can control is how much space that they take up. And as not the people around them, all of these different units around them also expand to be as big as they possibly can, which decreases the access for everybody. So if everybody's house is just like 10%, bigger than it otherwise would have been. Now everything is also 10% farther than it would be. And actually, it can work out to be a little worse than that because of some geometry. So you end up in this situation where when you're, when your neighbor chooses a small house, and you could choose between a small house or a big house, you're gonna choose the big house, and your neighbor is making the same calculus. And so you both end up choosing big houses. But now you're also both worse off on the axis, the axis axis. So that's, that's why it ends up being a tragedy of the commons, because you don't get to control, like what everybody else is doing.

Lars Doucet 28:22

So how do you fix this? You know, do you have to go build another model city? Or can you can you work with a we've gotten reforming the system from within?

Devon Zugel 28:30

Well, I think the, the margin, I would like to shift on most is just like, allow people to build more, because if we have more abundance of housing, and we can build more densely and higher, and we could you know, instead of only allowing single or two storey buildings, you allow five storey buildings in an area, you suddenly just have a lot more space to play with in the first place. And this becomes less of a trade off. So that's that's what I prefer. I think that like the UMB, which stands for yes, in my backyard movement, that these are people who are trying to get cities in the US and other countries to build more. I think they're making actually pretty good progress in California, where I'm originally from, and I spent most of my life. There's a bunch of state level laws that are allowing accessory dwelling units in people's backyards. So sometimes they're called granny flats. They're requiring neighborhoods that are near transit to pass permits more easily. They're getting rid of minimum parking requirements. So I think it's making progress. But, you know, the building cycle takes a long time. And like, even though these reforms are coming through, it's just, you know, should have happened like 30 years ago. So that's the margin that I think I'm most motivated by. think the other thing that another factor that's going to come into play, I think now that the pandemic has brought remote work into very widespread acceptance is that just like where people want to be is going to be very different. We already saw this with the change in in housing prices during COVID, where suddenly like, you know, one and two bedroom condos in San Francisco became worth a lot less, although that has since reversed. And then But then like, giant homes with like offices in like the outskirts of Sacramento, or other sort of smaller cities in the US, jumped in price. In Miami, where I live, a lot of the housing has actually doubled in price. And even though Miami is a city, it's also kind of more of like a vacation town, then, like a real city from an from economic terms. That's because people realize, like, oh, I can like live somewhere else and still work there and like have a very meaningful career. And COVID change that because not technologically we had the technology before. But what it changed is it made it socially acceptable. And ultimately, you can only remote work if like the people around you also know how to use Zoom. They also understand what it means for you to be like working from your home office and so on. So I think that's going to like really changed the game in how things happened. And we've we've seen some reversion now that COVID seems to be petering out a little bit. But I don't think it's going away entirely, I think I think it's going to be a huge shift.

Unknown Speaker 31:26

Thanks. So maybe less than collaboration effects over time.

Devon Zugel 31:30

I don't know about that, like I think I actually think it might in some ways have the opposite effect where for like superstar cities versus sort of the long tail. So before, like, virtually every job you had to have, virtually every job you could be doing had to be like physically located relative to something somewhat somewhat closer. And what that meant was like, if you are a software engineer in San Francisco, or like a finance guy in New York, or whatever, like you got, you had to be there. And those are sort of the superstar cities for those industries. But it also meant that if you were a doctor in Dallas, you had to like be near your hospital, and your hospital needed to be relatively near your patients. Or if you know, you were an agricultural consultant in Idaho or something like that you had to like be close to the farm. Now, suddenly, people who don't have to be in the place all the time can live farther away. And like there's just a lot more area they can be in, even if they need to end up being back in the city a few times a month or something like that. So I can see a world where people end up not living in San Francisco's as much in the world or the Dallas is somewhere in the world may live like three hours away or something like that. But then they still maintain a really small apartment in the city so they can go spend time there. Or if you're perhaps if you're an investor, like a venture capitalist or something like that, you still want to be in the heart of all of it, where all the people go to, because there's still sort of a social network effect of people going to a particular place to know that that's where other people are coming to, I've noticed that there's within my social circle, there's sort of this growing like circuit of cities that people spend time in, they don't always necessarily live in those cities, but they kind of like have this shared common knowledge that if they go to New York, they're going to like, see people that they know and like and they're going to be able to catch up with people even if they live in like the middle of Montana or something like that. So I think there's a long way of saying I think that like the superstar cities will actually almost be relatively more important. And they will get like, almost all the attention. But then maybe like the mid tier cities won't be as important, at least from economic agglomeration effects. They might get a lot of benefits of people moving there because of schools or they want more space, but I don't think they're moving there for jobs.

Unknown Speaker 34:03

Make sense? So it's like a long San Francisco, like short Chicago or something like that.

Devon Zugel 34:09

Yeah, probably. Although Chicago actually is has done a relatively good job not having like a dramatic housing crisis like other cities. So that's another point. I'm just biased towards them. Yes, I think Yeah. Long San Francisco, New York, probably. And then like, shorts. I don't know. Like, yeah, let's just Chicago is a good example.

Unknown Speaker 34:33

Got it. Got it. I want to talk about Georgia ism now a little bit and economic philosophy. I think all of us are at least somewhat fond on this call. Can you talk about Georgia ism, how you found it, what it is and perhaps why it's important.

Devon Zugel 34:47

Georgia ism blew my mind when I first started reading about it. Growing up, I'd always heard of this sort of like dramatic conflict between capitalism and communism and I'm between capital and labor. And Jordan introduced this concept that became, seems so obvious as soon as I thought about it, but I had just not thought about, which was that there's not just two types of things in the world, there's not just labor and capital. There's also natural resources, which are fundamentally different than the other two. And the fundamental differences, we can't make more of them. And I'd been always just like lumping that in with capital were like, Yeah, land is capital, we that's like, the way we talk about lands capital, you know, radio spectrum is capital, whatever, like, this is a thing that someone can pay for in their accounting, they like account for and they call it like capital, whatever. But they're really different. And I think that it actually ends up marrying fie. The issues that capitalism and communism both pointed out. And I think it sort of explains why it's, to me, I feel like there's just like this big. There's this big misunderstanding between communists and capitalists, and like, they're actually pointing to a lot of the same problems. And those problems stem from monopolization of natural resources. So that's one of the big things that it meant to me is like, it felt like there were smart people I knew who are both on like the economic left and the economic right, or whatever we want to call call that spectrum, who I'm like, you're both smart. And you both actually want like the world to be better. Like, why are you disagreeing? Like, what's the problem? And I think I think the reason is, like we've just been using the wrong words to describe describe things.

Unknown Speaker 36:36

It's great crocks is a great character. I, I'm curious. The big George's policy is a single tax lien value tax, you know, Milton Friedman's for this, you know, whatever Buckley's for this, so people on the right as well as a lot of people on the left as well are interested in it. You know, what do you think about single taxes land taxes as a as a substitute for other sorts of taxation?

Devon Zugel 36:58

I would love to see it happen. I think it's I don't see it as like, super likely to happen, though, at like this at like, certainly the federal level or like state and, and city levels, a split line. I'm coming from the California context where we have prop 13, which is like the anti LVT. It's like, how about instead of paying high land taxes, you pay low land taxes, that doesn't that sound fun? And super popular? Like, there's all those stories, you know, there's the story of like the grandma who can't pay her property tax bill. And so she gets like, kicked out of her house. And like, that's really sad. And people people don't like, so they say, Yeah, property taxes are bad. But, so I think that it's like, kind of unlikely, and like, that's not where I personally am trying to push my weight, although I would love to see it happen. I think that there's much more potential to have something that is effectively a land value tax. But it's not called that. And it takes a different form that someone is much more willing to pay. So for example, I think that every time you enter Disneyland, and you pay your gate pass, you're effectively paying a land value tax. And people are pretty thrilled to do it. Because they love Disneyland. There's, you know, you could also this is more of a stretch, but you could argue that when you pay to go to a university, and you like pay, you're paying for tuition, you're kind of actually paying like to be there on that land, and be in that environment, and soak it up. And so that's kind of like land value taxes. Well, and people are also pretty happy to do that, especially when the government forgives the loans, but that's different rant. And so people, I think that like, I think one of the problems that property tax, and or land taxes, which are slightly different, but for the sake of this conversation, I think quite quite similar. One of the problems they have is they just have really bad branding, they like you don't really understand what you're getting when you pay the property tax. When people say that they've like, purchased a property. I think, like right now I'm I'm at the age where a bunch of my friends are starting to like buy houses for the first time. And I think a lot of them going into it think like I own this thing. Now I can do whatever I want with it. This is like my land. And then when they learned they're going to have this like huge property tax bill. They're like, what, like, I thought I owned this. Like, who's right is it and I think that we have this like language around ownership. That makes that a pretty reasonable reaction because it's just not how we talk about owning a home or any other any other property like you don't you don't pay a tax on owning your computer, for example, or anything else. So I think another another related concept that really needs rebranding is the HOA that like home Owners Association, because a homeowner's association, like, if it's doing something really well, it could make the place you live, like really lovely, and could make your life a lot better. But instead, we kind of just think of it as this like drain of energy and resources and just sucks. And it's always unpleasant conversations and so on. So the, this is my long way of saying that I think there's like really cool business opportunities actually to go out and build communities that take sort of these these principles of like, what would it mean to build just like the most amazing environment that people are really excited to pay for? And don't call it a property tax? Call it like a gate pass or something like that. And I think you're going to effectively have the same results. But without all the political pushback.

Lars Doucet 40:52

It's great to have a question. Not specifically on that. But how so are you thinking that the opportunity is for more of these things that take like a more, you know, high minded economic policy of how a city should be done and to allow it to emerge? Do you think the opportunity then is in new cities? Or do you think there's a way to reform existing cities, you know, kind of harkening back to our exists earlier? Question?

Devon Zugel 41:18

Yeah, um, with this particular mechanism, I don't see an easy way to apply it to existing cities. That doesn't mean it doesn't exist, but I haven't, I haven't thought of it. I mean, like, I think for the most naive version is like, have a place like Disneyland, or like a people hate this term, but like a gated community, where you like pay have to pay to enter. And, like that only works if people sort of agree to it in advance. Whereas if you were to put like a big fence around Manhattan, then say, like, you're gonna pay me $50 Every time you enter or something that would not go over well. So at least the naive version, I don't see a way for it to work in existing cities. But that doesn't mean that there's not some clever way that I hadn't thought of.

Unknown Speaker 42:10

Gotcha, gotcha. That makes sense. It makes sense. Devin, are you down for a round of overrated or underrated? Sure. Awesome. So I'll throw out the term. Tell us whether it's overrated, underrated, correctly rated? And perhaps the answer to why. So the first one is Miami, overrated or underrated?

Devon Zugel 42:28

Within my friends, which I would describe as like, ambitious nerds on the internet, I think Miami is really underrated. When they when nerds look at Miami, they just see like Miami Vice, and you know, people doing cocaine and penthouses and stuff and like that definitely exists in Miami. And I'm not going to say it doesn't. You can definitely find as much cocaine as you want, I'm sure. But something I think that they really miss because they just all they do is like walk along, you know, Ocean Drive or something when they come here is it's this very sexually very peaceful place I live in I live in South Beach, away from the clubs. And I feel like I live in this like charming little village. It was developed in just just before the Great Depression. There's a great book about it called bubble in the sun. And but that what that means is it actually is like, built in a fairly traditional style. It's relatively denser in Miami Beach. I have like a really peaceful, wholesome life here that I don't think is reflected in. You know, if you google image search Miami, it's like, none of the images that show up there, like describe anything of my day to day. It's super green. People are happy walking around. It's great. So I love Miami very, very underrated.

Unknown Speaker 43:49

So less Lambos more walkability, perhaps?

Devon Zugel 43:52

Yeah, I mean, I like my Lambo. Everyone smile today. I think it's a city that has a lot of self confidence. And people sometimes hate that and some people sometimes love that and I personally love it.

Unknown Speaker 44:04

Let's go I love it. The Envy movement overrated or underrated at this point?

Devon Zugel 44:09

I think it's probably still underrated. It's really aiming towards deep structural issues that are people still don't understand or have visibility on. And they've heard the term but I think they don't really know what it means.

Unknown Speaker 44:28

Just how important it is. That's good. That's good. Company towns overrated or underrated.

Devon Zugel 44:37

Underrated by most people but overrated by like CEOs. I think. I think it's overrated by CEOs because like, they have an idea of like a company town is something that they like, they can control their little dominion and make their world and you know, and I think that that's not awesome. But I think that most other people are like overly creeped. out by them. And actually, they provided a lot of necessary infrastructure for people spent. I'm thinking mostly the ones in the 19th century, where these people were often coming from farms and very, very difficult lives. And then they ended up in a situation where they had a lot of needs taken care of, they had much better lives, much better opportunities, they could like meet their colleagues, be closer to the city. So underrated and for most people. That's great.

Unknown Speaker 45:27

Ah, Pomodoro, overrated or underrated?

Devon Zugel 45:31

I think underrated. Having, I'm just a big believer in systems in life. And I have really a terrible memory, and actually terrible self control. I think most people, whenever I tell people this, they are always like, that's not true. Self control. But I'm like, No, that's because I've like built systems around myself, so that I like can do the things that I want to do. And if you were to take away my systems, I think I would like get nothing done. So Pomodoro is one of them. That's great. That's great. One more podcast as a medium, overrated or underrated. I think underrated also, which I think I think I responded underrated all of them. But podcasts are a very intimate medium. People will say some very controversial things on podcasts sometimes, or, or explore ideas that aren't fully fleshed out yet, but are potentially really important. And it's it sort of allows the host or hosts and interview each other to kind of go on a journey together in the best versions. And you can't like I've never seen someone take like a sound bite from a podcast, and then like, go into an outrage about it and like, create a whole thing about it on Twitter or whatever. Which is certainly not true with tweet. I also love Twitter. And I think it gets a lot of bad rap, that there could be maybe a different conversation. But but you know, I have to admit that there's something about the tweet form that like does sometimes like cause a shitstorm. So yeah, podcasts, I think, creates a sense of intimacy and safeness that allows people to be more intellectually vulnerable, which I think is very healthy. Because that's how you learn if you're constantly protecting yourself and constantly thinking like, how could this be misinterpreted by somebody who is out to get me? I think you don't you don't think as well and you don't learn and you don't solve problems?

Unknown Speaker 47:27

That's great. It does seem like there's a little bit less virality in the audio medium, and perhaps with text, it's just so much easier to share that, you know, clip and you know, especially on Twitter, right, like to then dunk on people for whatever reason.

Unknown Speaker 47:43

Well, Devin, thank you so much for coming on the show today. Where can people find your work? Where should we send them?

Devon Zugel 47:49

Um, well, I don't shut up on Twitter. So that's probably the best. It's just Devon's Oogle at Devon's Oogle which hopefully, I'm not going to spell it for you it's too hard, but you can look, you can look at your podcast app, my name will be there. And then I also have my website Devon's google.com, where I just I, I blog every once in a while. And then I also have two podcasts. One is called order without design, where I, the couple called Alon and Maria, Agnes Berto, who are two economists in their late 80s, who have traveled the world and seen a lot of cities, I have a podcast with them. Unfortunately, one of them is currently really ill. So we've put it on pause, but we have a few few episodes there. And then the other one is called tools and craft, which is around computing interfaces, and tools for thought and how to how to help ourselves think better.

Unknown Speaker 48:50

That's great. Awesome. Thank you, Devin.

Devon Zugel 48:52

Thank you. This is super fun.

Unknown Speaker 48:57

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations and live players. You can subscribe to Bismarck free and brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Unknown Speaker 0:38

Zach, how are you doing this afternoon?

Zach 0:41

I'm doing great. Well, thanks so much for having me.

Will Jarvis 0:43

Absolutely. Thanks so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Zach 0:51

Sure, that my brief bio is really that

I've worked in usually some kind of entrepreneurial capacity for my whole career either as a co founder or you know, operator operations person, or the last, you know, about eight years or so, on the engineering side as a founding engineer, as a co founder of something. So I focus in particular on early stage companies, because I'm terrible at bureaucracy and company politics and that kind of thing. And I love the experience of going zero to one on things, the big ideas that I'm interested in, it's really the generalization of this startup way of thinking on to what I think of as frontier verticals or frontier markets, with that are lacking this kind of thinking, in particular, for about a decade or so I've been involved in a space that that I've been calling startup cities for a long time, which is the application of startup entrepreneurship to the built environment and to the building of communities themselves.

Will Jarvis 2:00

I love that I love that. I want to talk about startup cities and and what the future looks like there. We've got a lot of you know, charter cities being built. You know, Scott Alexander has a weekly or bi weekly thread, where on Mondays, I'll talk about give updates on all the new startup cities are thinking that you see, like particularly promising that you're excited about right now any efforts in the startup city space that you think are quite exciting?

Zach 2:27

Yeah, definitely. I think so I like to think of these projects as existing on a spectrum, where we're, some are innovating more on the physical aspects of, of a city. And some are innovating more on the social aspects of a city. And the way I think of it as is that the city is this sort of very complex technology stack that stretches from the kind of laws and procedures and policies all the way to like a sidewalk or a light or a building or you know, very physical like meat and potatoes kind of stuff. And in particular, a lot of the charter cities projects, and you know, some of those are exciting because they carry with them innovation on this, the more social side of the technology stack, right. And in some cases, for instance, a friend of mine, Curtis, from the charter cities Institute, the executive director there. He has pointed out I think, quite rightly, that many of the Africa oriented projects are really innovating on both direction on both sides. They may have this sort of reform in law and governance, social side, but they're bringing really a baseline of physical infrastructure that is it non existent in certain markets in certain areas. So although they're not innovating in the traditional sense of say, you know, pressed timber or like 3d printed houses are like this sort of futuristic stuff you hear just having functioning roads, and good sewage hookups, and reliable electricity is an innovation in those markets. So I, the project that I follow that I guess you'd say I was the most excited about, although I think it's it's in a rough patch right now is a project called Sudan Mother Son in Honduras, Sudha Mata son was, it's a, a kind of, it kind of straddles these two worlds of charter and startup cities in the sense that it has reform aspects associated with it, but many of the major innovations are because there is one really fantastic entrepreneur that is behind the building and owning and operating of the living environment. The other thing that's interesting about Pseudomonas Sion is that it was deliberately built for the local market. You'll often hear in these projects that there's a lot of like let's attract foreign crypto capital or digital nomads or something like this, which I'm not against or anything but what was so interesting and I think we The innovative and brilliant about Pseudomonas son is he did really detailed. The founder Masimo Mazzone did really detailed customer research in the slums of, of Chile Loma, which is the city where this place is located in Honduras, and looked at, you know, budgets and pain points and the kind of stuff that's really about bringing a quality product to market and then solve those problems. The future of these projects, especially in the Honduran context, remains to be seen and that there's, it's in a rocky period right now. So who knows what's going to happen, but I am excited about those in the kind of charter city space in the more startup city space, I think there's potentially some interesting things coming out of dowels in the kind of web three crossover space, such as, for instance, cabin tower city, Tao. And I'm also very interested to see the next project that comes out of culdesac. cul de sac is a low car oriented urbanism developer that has their sort of pilot project is in Tempe, Arizona, and I think they're probably going to do something bigger and more like sort of more interesting, and with more dimensions of innovation as their next project. We'll see.

Will Jarvis 6:12

That's really cool. I just for the audience, can you define what the differences between startup cities and charter cities?

Zach 6:18

Yeah, so and I should, I should say, this is like, this is my own take here, there, the, the nomenclature is always kind of changing and is sort of like been this endless problem in the space of the shifting terms. So I'm as confused as everybody else. But generally speaking, the where I draw the line is that a charter city focuses on having a charter with some host governments such that they are getting some differentiating law or governance aspects inside the city. Okay. Now, what I focus on, and what I term startup cities are simply cities or neighborhoods built by startups, you know, actually run as a product like run by run by startups, there's obviously a crossover because you could have, and I think in some some of the upcoming charter cities projects and current charter cities projects, you have cities that have a charter with, with a government of some kind, and they're also operated in more like a startup. So they're, you know, it's not a totally clean cut. But I don't, my view is that, I think there's a lot of innovation that doesn't necessarily require a charter, and in particular, in wealthier countries. And I think you're probably unlikely to get a lot of the promised innovation of a charter, if you don't have entrepreneurial management, which is, to me the sort of the killer, this sort of like killer feature and the killer differentiator of what is likely to make these things successful.

Will Jarvis 7:53

Got it, it does seem like one of the things that, particularly American cities, lack is like super good management, for all kinds of reasons. I was just talking to a friend of mine, who's a VC last week, who's thinking about running for mayor, I won't name him in his local town. And he mentioned how he went to a conference with a bunch of local mayors. And he noted how almost none of them were paid. This is a pretty wealthy state in the western United States. And almost none of them were paid, which leads to all kinds of perverse incentives, where most of the people are real estate agents, or have some other vested interest that they they have to work on on the side. Because, you know, it's kind of a thankless job, and you're not getting any money for being a mayor. And so it can be all this like self perpetuating cycle of poor management, and then things get worse, and then it you know, less, less talented people want to do the job, and then, you know, things kind of spiraled from there.

Zach 8:45

Yeah, that's a very interesting point around around pay. And I, I totally agree with you that, you know, managing and administering a city should be a very highly paid job that attracts the best talent that we can bring to it, you know, it should, you know, mayor's mayor should be paid like CEOs. Because, you know, hopefully, we would get people that would then behave like good CEOs. Right, exactly. And I think the other the other thing that happens is, I, you know, there is this thing about, you know, sort of money in politics, and that that's like a sort of perverse thing, or something we want to get out and I sort of get where people are coming there. But I think what people overlook is that if you don't have the extrinsic motivator that's pulling in talent for essentially mercenary reasons of like, I want this highly paid job. What you end up are you end up with are people that have intrinsic motivation of some kind? And I think the people's assumption, which I think is not true, is that intrinsic motivations must necessarily be better and lead to better outcomes than the extrinsic motivation of working for you know, a good paycheck, right? I think that is like you It's probably somewhat true in the sense that you'd likely want a mix of intrinsic and extrinsic motivation, like in any other, you know, role. But I don't think that someone who's willing to work for free and has a lot of intrinsic motivation necessarily means that it's going to they're going to be the best leader and make the most rational decisions as a manager. And it's just a weird, it's sort of just a weird aspect of how city management and municipal governments and things have evolved, that we're living in this world where the best people are often not elevated to these important positions. Right.

Will Jarvis 10:33

So it's something like, maybe we should have more Singaporean model where we have, you know, the highest status that you can do is become a civil servant, which is not the case in the US.

Zach 10:42

Yeah, I mean, I am very interested in Singapore for a lot of reasons. And I think there's, you know, Singapore is used sometimes casually, as an example in the kind of charter city startup city space, right. And we can talk about that if you want. But one thing that there's no doubt that Singapore has done well is one, they seem to have much better land management policies than the many places. And the other is that they, they aggressively incentivize people in the civil service. For a long time, my understanding is this, this is not the case anymore. But for a long time, civil service pay was actually linked to GDP growth, which is sort of this sort of wild thing where it's almost like getting a bonus for company growth, but at the level of, you know, Singapore, Inc, right? They don't do this anymore. And I kind of I remember reading a paper a long time ago about this, and I can't remember why they stopped, but must have had a good reason. Those kinds of incentive schemes are fascinating.

Will Jarvis 11:41

Yes, yes. Yes, absolutely. Absolutely. Singapore, you know, it is it is pointed to as as this charter city kind of success. Hong Kong and Macau, I think of a couple of places like this. One problem I see in my mind is that which I think sometimes gets glossed over is there can kind of be one Singapore, you know, they can kind of be one Hong Kong, Hong Kong. You know, Macau is like a gambling hub. And they each have their kind of niche that they focus on, you know, it's maybe finance in Singapore, that you can kind of carve out and it seems like to have a successful charter city, you need to have something like that, where you can kind of monopolize in some local domain, some part of the economy, which you can uniquely do well, do you think that's kind of an important part that a lot of people when they're thinking about these things just kind of gloss over?

Zach 12:27

I do very much think that there, I think there's several elements that get glossed over. And one of the most important is what you pointed out. I've been fortunate to visit all three of these cities. And what you realize is they're they have a very complex history that I think is hard to necessarily generalize on to, you know, Project X and some totally other contexts, right? On my website, startup cities.com, I have a piece called innovation by copy and paste. And I argue a little bit that sometimes in the charter city space, you hear this argument, that's just kind of, if we can copy and paste, you know, thing X from Hong Kong or thing X from Singapore into this other environment that will Hey, then it's going to sort of evolve in exactly the same way. And and I'm just not really sure that that's, that that's true. And I think the experience of people in startups really gives the lie to that because you realize how much how much you are constrained by your context. Exactly. Yeah. Now, the other the other piece of this right, is that there's a strong foreign influence. And all three of these stories, the one whose history I know the most is Hong Kong, and you know, Hong Kong was, it was obviously it was like, literally a colony, right and had the back, you know, this sort of British basis. And it was administered in a kind of purely technocratic sense, in particular, by a gentleman named John Cowperthwaite, who was the finance minister of Hong Kong. There's a wonderful book called architect of prosperity. And it's a biography of John Cowperthwaite. And when you when you read this story of John Cowperthwaite, and his management meetings, it's he was essentially a corporate board with a CEO that was making these extremely technocratic decisions meant to maximize the wealth of the place. So now, some people say, Well, that's great. We should just do that everywhere. Right? But I think a lot of other people would say, Well, I don't really like that. That's, that's, you know, not you know, people are not generally speaking in favor of that colonial pattern of development. Right. So again, how much can we generalize these lessons on to other places? I'm not sure Macau too, right. You know, if you go to downtown Macau, it's full of Portuguese architecture, right. So it's this these stories are strange. And you know, if you go to Singapore, you know what pleases are named after guys named raffles, which I assume is not a local last name, right? Like there's just these places are calm. plaques and there's certainly some things we can learn. But I don't think we can just use a reference class of these three places. And then say, We'd like form a reference class of these three places, and then say, okay, if we just do that here, everything's gonna look the same. That's a mistake.

Will Jarvis 15:15

So it's much more complicated. It does sound like you can, you've been able to outline, there are a couple of common characteristics, like really good governance, you know, it's probably like a CEO board model in the beginning to get things started. Things are running, very technocratic way, there's a set of good policies that seem to matter. But there's also this humanities paper like type thing you have to do, or you have to write out, you know, how is this thing going to be unique? And what are the unique strengths that we can lean into that that each charter city can have? So there's like, there are some hard facts I've given says, tell me if I'm wrong, we're getting the sense. There are some hard and fast rules that like it's just better to do things this way. And then there's some things that so there's some copy paste in that sense, but you can't copy paste the whole thing or you get in trouble.

Zach 15:58

Yeah. And really, I mean, this is my view is that it's a lot of this stuff is very analogous to startup entrepreneurship. I mean, no, no, no person startup is going to tell you that you there's zero patterns that you can learn from any other company about how to do anything, right, yes. And in quite literal sense. Many of the technologies that you deploy, and the practices you adopt, and the tools that you use, these are things from elsewhere that you are not building and you shouldn't build them, because it's a bad idea. But to go from that, you can get a foundation there. But everything interesting and hard about the startup experience and the whole of creating anything from like zero to one, it's not in there. It's everything that is not that it's what is it that we're doing that is different, how does it that we're internally differentiated, externally differentiated? Do we actually understand the customer? Can we confidently deliver this service or product? Can we scale that? You know, do the unit economics make sense? Do we have enough money to make it until the unit economics makes sense? I guess, all of these, these are all the hard and interesting things. And they really are not easily copied from anywhere else. And I would say I would argue that the the city story is pretty analogous to this.

Will Jarvis 17:11

Definitely. It definitely takes talented entrepreneurs and founders to to build these things. Absolutely. That's great. I want to move on a little bit and talk about something interesting. You sent over an email. Why do Americans love to travel to Latin American cities?

Zach 17:26

Yeah, so you know, I've spent, I spent several years of my career living and working in Central America. And what you realize, right is that there are many things that are very dysfunctional, about Latin America, things like security, traffic, you know, lots of this, these things create, like, really, really serious problems. And I think it's naive to not not acknowledge that. But on the other hand, there are things that are really wonderful and joyful, and that people come from all over the world to experience. And a lot of that I think, revolves around what is essentially just the heritage of traditional urbanism. So you go to a city like Mexico City, and all the places that are fun and cool, and that you want to go to, it's like, you know, some family is, you know, selling michalos out of their garage, right on some street corner, and you go there, and it's like, the best michalos in Mexico City. And oh, this is so cool. And I'm just like sitting on a dirty stool, on the street, and whatever. And that is what makes it so fun and exciting, and makes people want to walk around and hang out and fly there. Right. And so it's in a way, it's the inability of the cities to actually their failure to have the state capacity necessary to enforce their rules that makes it feel like a dynamic and exciting place that people want to go to. And in the United States, we have this, we have the blessing of having rules that are actually like quite well enforced in the state capacity often to enforce these rules. But unfortunately, what that often means is that we we, we sort of smother everything fun and dynamic and interesting about urban life. And we instead all pay $2,000 round trip to fly to Mexico City to enjoy it when we could enjoy it here, you know, as well, right?

Will Jarvis 19:21

In substance is that we just have too much high modernism here. We're too worried about you know, you know,

William Jarvis 19:27

the code, quote, Mr. Scott, like,

Will Jarvis 19:30

there's just too much. Yeah, we're trying to plan too much, and we need to let things like breathe a little bit more.

Zach 19:37

I think that's certainly part of it. Right? I mean, I think it's it goes without saying that, like, many of the things that are fun and interesting, are essentially illegal or sort of illegal, or would it be illegal if people had sort of preemptively put rules in with the idea of what should and should not be allowed? I have a I have a piece on my website about this. called mixed drinks with Mexican drag queens, which is focused on the whole, like the whole street culture of Latin America. And there are all these things that just ex-ante would be illegal. Like, you can't, you can't, you can't sell mixed drinks from your garage in the United States. You can't I mean, maybe if you go way out into an unincorporated county or something you might be able to, but none of my customers are there. So it you know, it doesn't work. The street truck has to be in a particular location, highly licensed, you know, cost six figures to get going on, you can't just push a cart down the street. That's the high modernist side that I do think has a big effect on that. But I think there's also another piece, which is that American culture in general just seems to have a, an expectation around externalities that many other places do not. If you spend time in Asia, for example, there is just not the cultural idea that like no one can make a sound or do anything around you that could possibly offend you in some way. Right? There's just you don't get that right, you know, you to block those things. And people honestly, you know, they might be annoyed or whatever, not talking about it. But they're not, they're not like seemingly doing anything to block it, because they don't think that they have the right. In the US, it often feels as though people's idea that their sense of like, the externalities they must be protected from is like, very wide and very, very expansive. And no one can do anything that like bothers me in the slightest. And I will enforce that in law. And so I think it's not just the sort of structural high modernist governance side, I think there's also some cultural aspects here, too. And then just the physical design, right, which is just lower density, which means, which is in part, kind of how this rejection of anything that could be perceived as an externality reflects itself on physical space right around us.

Will Jarvis 21:52

So like extreme nimbyism, so most places are just like very envy and all kinds not just like the zoning of what you can build, but just in general, like, you know, what kind of sounds you can make, you know, what you can do in your front yard, just more allow more things and don't really have this norm that, you know, hey, like, my neighbor can't go put an RV in front of their house. Like that's, that's not the thing. It's like, oh, that's my neighbor's yard. I don't have anything. You know, I kind of more libertarian, they're like, I don't have the right to manage his yard.

Zach 22:20

Yeah. And I think there is, you know, I don't think there's any, like, it's a conscious libertarianism or anything, but I think it's just kind of this sense of, and I think, I think it's also it's one of the it's almost like a kind of broken windows policing sort of thing, where, if the default is like, everyone's doing stuff in their front yard and everyone, you know, the sort of commerce is spilling out into the street, then that's what you think is normal. And so you don't you don't look to stop it, because it's what's normal, right. I love

Will Jarvis 22:47

it, elevate it, just just let it go. Oh, going off of that, what do you think the future of urban planning looks like? You know, particularly with advancements in AI and everything going, you know, what is optimal urban planning actually look like in the real world?

Zach 23:00

Yeah. I mean, that's a huge question. And probably, you know, actual urban planners and urbanists are gonna watch this. And, you know, start started weeping at my answer here. But I think actually, there, there's no doubt certain technological levers here that are very interesting that are on the frontier. And I think it's everything from what I think in a city scale observability. So I'm not that I'm not that bullish on the idea of like, let's put sensors and everything and like, try to optimize the city, this kind of like Smart Cities thing, right? I'm not, I'm not wild on that. But I do think it is the case that there's a lot of interesting data that is being collected now. And obviously, that could be collected even more and you know, in more places, and there is the technology now to kind of aggravate these things and look at them. There's a reader of my newsletter and a friend of mine, Yaniv Loc, who's an city planner from Albania is working on a very interesting product called lair, which he isn't he's an urban planner. And he has these sort of layers of data that he overlays over cities. And many of the things that you see are really fascinating. And, again, it's not this is not like Mega futuristic technology. This is simply making accessible, the huge amount of data and kind of this highly distributed, fragmented data everywhere in one place like Yoni is doing so I think that's a that's a cool approach the AI stuff again, I'm not like, you'll sometimes hear people make these grand claims, which is, you know, the sort of, almost almost like sentient AI is just going to tell us what decisions to make in the city and stuff. And I'm pretty skeptical of that. But I think as an engine for imagination, AI is actually really good. Could could be really wonderful. I have an article coming out, hopefully in about a month or so that looks at realistic Real Estate. Eight workflows, but with using AI tools for these things, so it's things like looking at how looking at how an existing space might look. So like an aerial view of how it might look with greater sprawl, you can, obviously you can transform the interiors and exteriors of buildings very easily now with generative visual AI models, right. And there's some there's some really wild video stuff like I saw this guy, this guy make a, it was a Chinese restaurant that had been converted into a skyscraper. So like, what would the skyscraper version of this Chinese food restaurant look, and it was ridiculous. But it was one of these things where that is, I think that probably never been drawn before in the history of humanity, right like that, that kind of pattern, right. And that's the kind of stuff that I feel very interested in. It's the kind of long tail of human creativity that can be unleashed by by generative AI models, as opposed to people kind of leaning in them, leaning leaning on them for decisions. The other piece, I think of urban planning is the awareness that the high modernism stuff is just not working very well, in that there, we have to treat the city itself more as a computational system, which means actually allowing greater degrees of freedom amongst the nodes in that system, ie people and entrepreneurs and restaurant tours, and all the people to actually do more stuff. So that we ended up with a more interesting and complex system there, the city itself, right,

Will Jarvis 26:36

that makes sense. And how would you rate the current city? Right? If you don't mind me mentioning it, you know, Denver, like, yeah, how much do you like Denver? How what do you think Denver works at some level?

Zach 26:45

Yeah. So I actually think so Denver has its problems. But it is less NIMBY than West Coast cities, and therefore more affordable, and in some ways, like, it is sort of more dynamic, and with fewer of these, like West Coast sorts of problems. It's much more NIMBY than I would like, certainly. And I think the cost of living could be less expensive here. But if I go, you know, if I go on the roof of my building, and I look around, there's lots of cranes building new buildings, which I always view is it's a sign, okay, you know, the city is not totally broken, because it's growing. And also the supply is growing. Yeah, I don't know, I'd rate it maybe a six or seven out of 10. There's, there's actually pretty good, pretty good, like user interface digital service stuff here. And, you know, a reasonable sense that people seem to care about what's what's going on. We have many of the same problems. I think, I think of them as it's essentially just like, ideology run amok, you know, in many American cities, where there's obvious basic stuff around, for instance, security in public spaces and stuff that is just, you know, it just seems impossible to have a constructive conversation around us. And, you know, we certainly have our share of that. Yeah, but really, Denver, Denver is one of these places that I think emerged also at a wonderfully a strategic location. You know, it's sort of it's more certainly more Western east, but not all the way west gate, you know, right by the Rockies, and which is beautiful. We have we have tourism, but it's not a tourist city at all, in the sense that it's not the dominant kind of aspect of the economy. There's a high level of human capital, you know, the Denver's median salary, you know, family income is is like, reasonably high. I like some of that place to live.

Will Jarvis 28:41

That's great. That's great. I, you mentioned some of there, I think is interesting, I think is glossed over in a lot of urban spaces a generally, in the conversation. And that is, I think, one of the most important functions of government is in a city where I live, can any member of my family walk around at any given time of the day? And feel like completely cool doing that? Why? Why do you think and why is like always overdetermined? Why do you think this kind of gets glossed over? And are there easy ways to make this more achievable in non political ways? If that makes sense? Is there design things we can kind of engineer? Is it more lighting? Is it something like that? Like, have you thought about this at all?

Zach 29:25

Yeah, so I mean, I liked that certainly as a maxim for understanding the health of the city, which is like, what would I be fine with? You know, especially if you think about it. intergenerationally. You know, would my will, you know, would my mother who's you know, older would she feel comfortable? You know what, my wife feel comfortable? If I had a kid that's like 10 or 12? Like, could I send them to the corner store? If you're comfortable? Right? I think you know, the answer. For many cities downtown is no and unfortunately in Denver's downtown, it's also no and yeah, it is It's sad. I mean, so one one city council member who I believe she's still in charge of my, like my exact district, her number one issue that she cares about. We're I'm in one of the like, least safe districts in downtown. And the the issue that she hears about the most, though, is the fact that Denver uses trains still to transport things in, you know, in downtown and like, what if those loads might be somehow polluting? Or what if those loads are, you know, toxic in some way, and like, that's the number one issue is like the hypothetical risk from using trains in a town built on the back of essentially mine. And this just feels like a sort of really crazy set of priorities to me, and maybe I don't understand something and there's a much bigger risk than I think from the train loads, you know, I doubt it, but that could be true. And but as far as solutions in this van, like, it's, I feel like this is a it's like a third rail topic. And my, my focus is really that I think, more or more spaces that are that are actually owned and operated. entrepreneurially owned and operated, tend to be safer spaces because there is someone with a vested interest in leaving quality of the unit and the experience of the unit. So is it like do crimes never happen inside a shopping mall? Of course they sometimes do and sometimes terrible things happen. But like the parking lot, you know, outside the shopping mall, or even worse, let's say the the desolate streets beyond the parking lot outside the shopping mall, is probably less safe than like inside the shopping mall. And I think what you see like what you see, in Denver's there are a few mixed use kind of big, big developments that include a sort of public space. There's a place called MacGregor, square up the street. And you really don't, you don't really worry about your security and McGregor square, because it's just this very well managed space. But you can walk one block over, you know, to some some other square that isn't, you know, it doesn't have the same incentives, and you immediately feel unsafe. So it's just, yeah, better incentives equal, better urban environment equals more safe spaces for people. So that's what I would like.

Will Jarvis 32:16

That's great. That's great. I think there might be I think Brian Kaplan wrote an article about how the majority of like, quote, unquote, law enforcement is actually just like private security in the US, you know, that can't really do much, but just having someone there walking around, like, Does this help promote, you know, some sense of safety and security?

Zach 32:31

Yeah, and I think it's also right, there's, there's an, there's an intrinsic motivation, I guess there's a, there's an inherent motivation on the part of entrepreneurs, especially real estate entrepreneurs, they want lots of people, they want lots of people there, because it means they're making money, right? Lots of people in the in the retail store, lots of people in the square watching the football game, lots of people at the restaurant, lots of people living in the apartment buildings like that, that's the that's the drive that's there. And it's just like, harder to be the sketchy person that's gonna, you know, mug, the old lady in a place where there are lots of people. So there's a way in which it sort of like successful real estate entrepreneurship is itself safety creating because it creates population in a location.

Will Jarvis 33:11

Right, right. And more density is good, good for that kind of problem. I'm curious, you wrote a great article for a sixteens future a16z future publication around cities and their API's? What kind of cities API's and what problems do we have with them? And perhaps how could we fix them?

Zach 33:31

Yeah, appreciate that. So the the article is, is it essentially takes, like a sort of technology framing on something that I think is usually framed politically or ideologically, what people sometimes think I'm saying around city API's is like, literal digital API's for like, I don't know, accessing your driver's license or something. That's fine. I like I'm in favor of that stuff. That's great. But that's not really what I'm what I'm talking about. What I'm referring to is that the process of land use itself, showing up to a city and being like, I want to buy this land and do this thing on this, this piece of land. That is the fundamental API of the city, if you understand API, as the integration point between user and system, right? And city, the city is the system and they're, they're going to be the ones that evaluate this plan and decide whether it's going to be allowed and whether it's in compliance and all of this. And then the user say the let's say, a restaurant or someone that wants to open up a restaurant in a city, right? So if you think of it that way, then we could gauge the health and success of cities in their their land use policies in particular, we can we could measure them by the with the rulers that we use for normal API's and technology, namely things like speed, reliability and complexity. You know, anyone who's worked in soft software knows that good API's are easy to integrate with. In other words, you don't have to like, you don't have to learn an awful lot to understand how it is that you need to use it. They're reliable in the sense that if you put something into it, you you understand and expect a certain certain response to come out. And they're fast. In other words, they don't they don't leave you hanging, you know, you you need, you need speed. And if we just, I think, look with objective eyes, on cities, land use API's, they fail all three of those dimensions, not not all cities. But I think I don't think it's unfair to say that a large number of American cities, and in particular, the biggest and most populous cities, and the most popular cities as destination, so live in fail on this, how do they fail? Well, things sometimes take years or a decade before you you hear anything, that's not fast, you have no idea how that your thing is going to be evaluated? Or what even necessarily like what criteria is going to be used, who's going to be making the final call this kind of stuff? So the reliability is not there. Things can be killed for all kinds of random reasons and rejected with no idea. And then oh, it was my was my last criteria here. Oh, and then complexity, right. And they can be remarkably complex in the sense that it's not like there's this sort of simple standard data payload that you're that you're you have to send to the city to get their approval, it can be very arbitrary, or, you know, different between cities very extensive, you might need some extra report. And the the total effect of these very broken API's is to make it harder for normal people to integrate to the system that we call the city. What does that mean? How does that express itself, in practical terms, it means fewer things are built. And we don't even actually know how much fewer things are built. Because many people are so will be so discouraged by this process, they'll never even try. And so they won't even show up in statistics, right. So this is the API problem of cities, in my opinion, is maybe the biggest lever or certainly one of the biggest levers that a startup city could could use to really differentiate themselves from Legacy cities in the United States.

Will Jarvis 37:22

So if it just made everything a lot more legible, and easier to do, people could interact with it and express it and kind of take ownership and build new things in, like on the barge, and there'll be a lot more people doing that, when that would be really good.

Zach 37:35

Yeah, that's right. It would be it would, I think, I think there's good evidence that that there's a lot of pent up energy here in the sense of energy in the sense of sort of capital and entrepreneurial potential and ideas that are waiting to be expressed on the built environment and in our cities. And they're just they're not going to happen because this API is so broken. So you know, one one startup cities sort of story here is if you are able to capture some of that pent up energy by saying, hey, it's a 24 hour turnaround time for approval, and you only have to give us this simple thing. And this is how we're making the decision. So it's totally public and transparent. And like, you know, please send me your proposals, right. That's a very different experience than what cities are offering builders now.

Will Jarvis 38:19

Love that I love that know that much. We can do a lot more with with that. And in American cities, in particular, we're permitting it's such a difficult problem to get through. Just being able to build things more quickly would be very, very helpful. Zach, I want to move on now do a round of overrated or underrated if you're you're okay. Yeah, sure. Okay. Yeah, absolutely. Absolutely. So I'll throw out a term and just tell me whether it's overrated or underrated this and perhaps why perhaps that as to why view you've got something there. So the first one is Kannapolis, North Carolina right down the road for me? Is it overrated or underrated?

Zach 38:59

Underrated as a an interesting story. And as an interesting data point for the charter cities, startups in the space.

Will Jarvis 39:09

That's great. That's great. And can you talk about why a little bit? I know, it was a company town. And, you know, why don't we have as many company towns anymore? We still we have like these companies that were so much No, Apple was worth 2 trillion, but you know, kind of refuses the company town model?

Zach 39:24

Yeah. Yeah. It's very interesting. So I think I, there seems to be some association or some relationship between company towns and like a certain phase of capitalist development. You could argue, for instance, that some of the projects that are in Honduras right now, this sort of charter city stuff going on there. Some of them look a bit like company towns, in the sense that the the developer of the town is also the dominant employer, either the only employer or at least the dominant employer in the environment. And that's I think, what you start getting towards this, this company town dimension, namely Where the the owner and operator of the environment is also your source of a job? Yeah, Kannapolis is absolutely a case like that cannon Mills textile factory, it was like a sort of sheets and towels manufacturer. And they build a whole town around it, why we don't see them as much anymore? I actually, I think that's a really good question. I think some of it, some of it is, is cultural in the sense that, you know, some company towns and for good reason got a bad name. I also just think that the company town form is it's actually quite fragile. And I'm not sure, I'm not actually sure if it's just maybe not a durable urban form, right. Because they these, usually they seem to transition into something else, after a while, I would take issue or maybe challenge you a little bit. I think that a lot of large tech companies in the benefits that they provide, they're offering something akin to a, let's say, a distributed company town experience, because you have you have them, say here, I'll pay for your therapist, I'll pay for your gym membership, I'll pay for your you know, your groceries, I'll pay for a trip, I'll pay for the you know, Google has negotiated contracts with rental car companies, for example, just for their employees. So they're a you know, they run bus systems and stuff, you know, shuttles all this. So it's like, it's not that there's not any of these elements here. It's just that we don't see we don't see the residential aspect coupled now to the the corporate aspect. But I don't know with remote work, who knows that that could possibly change? We'll see.

Will Jarvis 41:35

That makes sense. That makes sense. Yeah, it is notable that it perhaps is something like agglomeration effects just matter less and it with, you know, if you're building software, it just matters less, you need less people all in the same place to build something.

Zach 41:49

Yeah, I mean, you know, the company town that the classic company towns, you know, it's industrial, it's, you know, a whole bunch of people all sewing towels, you know? Yeah, some big machines and stuff. I have also very homogenous, I think that there's a certain degree in which software it's not that it isn't homogenous, in a sense. But there's actually there's so many niches in software that actually it's very heterogeneous in a sense, you know, people skills.

Will Jarvis 42:14

Absolutely, absolutely. The next one, the network state, overrated or underrated?

Zach 42:21

This is This is tough. That's a tough one. Man really? I would say in I would say maybe, maybe underrated in the sense that I think the idea of sourcing demand online for a physical location is is a great idea. And it seems to be that's like the sort of cornerstone of a lot of the ideas around the network state. And you know, biology is ideas, which I like, I would say network state is overrated as a, as a sort of political thing, in my opinion. And I'm also personally very skeptical of this kind of demand sourcing strategy that focuses on ideological or values only alignment. This this, I think, I'm I'm not so sure about this. And that, I don't even know if that that's that's not necessarily intrinsic to the network state idea. But it definitely has become I think, in the in the sort of meme version anyway, a big part of it. And I would say that aspects overrated to me,

Will Jarvis 43:24

gotcha. So it's Pete talking about the more it seems like, this has been a big strain of thought recently, you know, the Benedict option, all the Evangelicals that run off together, or like conservatives are gonna run off together, all the progressives are gonna form a little orb and you know, the desert or something. And, you know, I don't know, it's interesting. Like, this does seem to be like the defining characteristic, it's we're gonna have this engraved around whatever given ideology a group has, and then go build a city around it. Why are you skeptical of this? It does seem to have like a lot of power in people's minds.

Zach 43:53

Yeah, I think it has a lot of power in people's minds, because people think that what they want is to be surrounded by people exactly like them. But in practice, most of the time, you have some like Venn Diagram of overlap with people, but not it's not a big overlap, right. Now, you could argue that the network's they just say, well, the one commandment right? And hey, so that means that's only a little bit of the overlap. And you know that that's fine. That could work that's fine. But how this usually gets expressed I think is more in the spirit of what you're saying, which is this kind of like super alignment over over worldview. My view is that an environment where everyone shares the you know, identical ideology is more of a cult than a city. I think there are not good examples of intentional communities aligned on ideology that scale. You could you know, think of an example of let's say, I don't know like Oneida I'm pretty sure Oneida overnight in New York. My history is a little sketchy, but I believe it began essentially as a value values aligned community and how it ended up you Is they now make silverware because that was how they were supporting their culture. And now everyone just knows that as a silverware thing, and it's just like a nice town like everywhere else. And I think, similar to the company town, that the pressure is actually towards the diversification of people in the, in the space. I think also the this desire for extreme alignment. If you've ever been in an environment, if you know you, the proverbial you have ever been in an environment where there is this extreme alignment, you often end up with, like really ridiculous and intense conflict, which is essentially the narcissism of tiny differences in the words of writing Bertrand Russell, right. So I'm, you know, do we want to generalize the narcissism of tiny differences onto the city scale? The other piece of it is that it seems to be the argument is that the fundamental problem is lack of values alignment, and I'm just not sure that that is the fundamental problem with why cities are dysfunctional. And yeah, it's not that there is I'm gonna be clear, I'm not saying that values don't matter at all, and that there's just like, no room for this or something like that. That's not what I'm saying. I'm just not convinced that it's the thing, the important thing. There's even almost an analogy, I think, here with dating, you know, there's a way in which online dating apps have allowed you surface, like the full half of the Venn diagram of the other person digitally, right. And then you project onto them, oh, my, you know, oh, my God, you know, she, she likes my, this band that I like, and like, we're gonna be so compatible, and then you meet up, and there's actually no compatibility, compatible in the long run with someone who it's like, they actually don't like, you know, 85% of the things that I like, but on this really important set of things. We're aligned with a while, right? Yeah.

Will Jarvis 46:48

It's a really good point, you know, often, what really matters for alignment is very illegible, like, especially in relationships, I see people. And, you know, my favorite is, you know, John Gottman, and he psychologists that all these studies around marriages and what made them work, and he's kind of a crackpot, people don't wanna admit this, but because he backs off, you know, say, backs off, and he didn't have predictive power in the future, you just go back and say, oh, like I noticed in the back of the future, you know, like, these things, tie people together and made them successful, long run in marriages, but big thing I got up his book was essentially, we have no clue what makes people like, get together and stay together for long term, like values alignment thing is, is important, but it's not like you can't like just say, hey, like, I'm a conservative, I want to be with a conservative and you're done. That's it may be a part of it. But it's not the whole thing. There's all these other things that are very complex above it.

Zach 47:39

You know, I think there's another dimension. Not to belabor the point, but you know, there's some, it's, you may know, this evidence better than I do. But my understanding is, there's at least some evidence that people's political persuasions is at least partially heritable, meaning that it's genetic. So you can you could imagine this world of highly aligned like, this is a highly ideologically aligned people that there would actually almost be a sort of very bizarre personality distribution their life if your politics is genetically correlated with other traits, which, you know, it seems like it probably is right. So it's kind of like what kind of weird you know, kind of one dimensional community ends up with only like, the Libertarians are only the Conservatives are only you know, these people are living together. Right.

Will Jarvis 48:25

Exactly, exactly. Yeah. And they, you know, have, you know, you don't get the diversity where there's, there's, you know, everyone's a farmer and, or everyone's a forger, and so you don't get any of this balance, and all these things get can get really wacky, really. Yeah, super interesting. I love that. What one more term here seasteading, overrated or underrated?

Zach 48:45

I think seasteading is underrated. I've followed seasteading for a really long time now, like over a decade now. And I've spent time you know, many people involved in all of this, and it's, look, it's very, it's I would say the the hard version of going in building, you know, building a new community because of the technological aspects. The the weather aspects, I think seasteading? I think also seasteading has oversold the idea of of the kind of institutional innovation that's going to occur by going out into the water. And I think I think there's two reasons for that. One is that as the the case in Thailand, and you know, some other places are shown, it turns out states and unlike people that you know, claiming sovereignty, just outside the territorial waters, and the lines are sort of arbitrary, so we'll just go outside them or they will expand them or whatever. Right. So that's a big barrier. The other is, I think, you know, if I invent something new on my computer, and I use it only just me, it's not really an innovation. It's an innovation when it enters the broader market and gets, you know, some non trivial amount of market adoption, right, and it comes useful to people. And I think that the challenge is like the technological challenge in the fight antral challenges around seasteading are, they have prevented and will prevent the kind of transition from I have this cool idea for how things should work to like this is widely adopted. But I think the the, there's a lot of interesting work that has happened adjacent, like, by the sea sending people about how do you design the platforms? What are the economics of the platforms? Where are the levers for saving costs? What are the business models? All that is fascinating to me. And I think there's no reason to believe that there's not cool stuff that we could build out in the ocean that people would pay and to go and see and write and all that. So in that way, I think it's underrated.

Will Jarvis 50:39

That's great. That's great. Zach, one last question for you. You're young guy, you've accomplished a lot of really cool stuff. You're interested in a very promising space? What are the next 10 years look like for you? What are you thinking about?

Zach 50:53

Yeah, so in my, in my day to day, I, you know, I write I write a newsletter, and that's my involvement in the startup CitySpace. I've done some advising and some other stuff in the in the past. But, you know, my, my present involvement is, I write and I think about this, and I try to keep a good reputation and connect people via that reputation via via the newsletter, to capital opportunities and other kinds of other kinds of things. So that's really the the very short term view here, the longer term view is that I think, my I think startup cities is really starting to cross out of crazy town. And there's, there's just so much more interest in this space than there was even a few years ago. And definitely compared to 10 years ago, it's just like, unbelievable, how much more famous. So what I would like to see and to be involved in our multiple funds that are associated with putting venture capital behind these projects is thing One, two is the mainstreaming of the idea that startups should build cities and the attraction of high quality talent via things like, you know, job opportunities, and job boards, and just like the meaning of it, right, so that when people people think of, you know, smart engineer, whatever they think, oh, I want to what do I want to do, I want to, I want to build cities, I want to build neighborhoods and cities. And that's a sensible and non crazy and actually good and positive thing to want to dedicate your life too. And then, of course, to actually get involved in the space as an operator, which I had a essentially a failed attempt at that in the, from roughly 2012 to 2016. And I learned a lot on that road. And I would like to get back in the you know, sort of in the in the saddle there. But it's something that I'm not willing to do impulsively and then I would only do essentially based on really understanding the strategy and why it is that the strategy is good, because it's the kind of space where it's very easy to rabbit hole into waste a lot of right, you know, chasing a rainbow.

Will Jarvis 53:04

quite intentional about it. It's very wise. It's very wise. Well, Zach, thank you so much for taking the time to come on the show today. Where can people find you? Where should we send them?

Zach 53:13

Yeah, thanks so much. It was really a joy to talk with you. Well, I so my personal website and this is Zack dot dev Z ACH that the EV my newsletter startup cities.com And I really welcome people to come and you know, argue with me in the comments and all that and it's a burgeoning community with a lot of interesting people across disciplines focused on this topic. And then last is I'm Zack Casera Z ACH CAC AR es on on Twitter and you can always email me also at Hello at Zach dot Dev and I'd love to hear from your your readership listenership.

Will Jarvis 53:49

awesome I love that. Thanks so much love to have you on again. I really appreciate it. Thanks for

William Jarvis 53:58

special thanks to our sponsor does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations and live players. You can subscribe to Bismarck free and brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Emily 0:37

Well, Emily, how are you doing this afternoon?

Unknown Speaker 0:39

I'm so great.

Emily 0:40

Thanks so much for taking the time to come on the show. I really appreciate it. Yeah,

Unknown Speaker 0:43

I'm really thrilled to be here. I can't wait to get into this.

Emily 0:45

It's nice to Nice to record in real life here down in in North Carolina again. Yeah, that's good. That's good. It's a rare treat for me. Well, Emily, do you mind giving a brief bio at some of the big ideas you're interested in?

Unknown Speaker 0:58

Yeah, not at all. Um, I am an early child hood educator, which is the title that has like a lot of different names. People talk a lot about the difference between preschool and daycare. And, you know, this is an industry where naming gets a little slippery and things slide around a lot people talk about what's the difference between a babysitter and a nanny and an au pair and a preschool teacher and a daycare worker and I am working on starting a preschool in Hillsboro, North Carolina. So I've spent like the last couple of years working on that to varying different degrees. And I worked in early childhood education before that full time as a preschool teacher. And in the pandemic I transitioned to, to private in home childcare. So I worked full time as a nanny for a couple of years, when a lot of schools shut down. And I am really interested in child care in a lot of different facets. And I'm really excited to talk to you about it. I kind of came into it in a sideways sort of way. I studied art history as an undergrad. And I know you have like some some thoughts about the humanities and the way they do and don't drive you and I kind of got to my junior year, and was looking for a way to kind of I'll say both legitimize and monetize in art history. And thought I would go into art conservation. Yeah. So when I graduated with my degree, I came back to Chapel Hill where I'm from, and did an internship with the conservation specialist at the Ackland Art Museum on campus. At Carolina. Her name is Lemkin line, and she's incredible. And I found the work to be so solitary. And I'm like a true extrovert by nature. And at the same time at the Ackland Art Museum, I was working as an educator with like field trip groups that would come in, I was a volunteer docent, and I loved it. And so I kind of had this moment where I decided I needed to shift from art conservation into education. But I didn't have a formal training, so I couldn't be a public school teacher. And as we can get into, I could just walk into a preschool and start teaching because I had my college degree. So I kind of slid sideways into the industry and kind of have been all in since then. So I've got my early childhood credentials, from Central Carolina Community College, and have been teaching and taking care of kids and babysitting and kind of all these different facets of the field. And I'm now kind of also facing down the administrative side of it as well.

Emily 3:43

That's really cool. It's really cool. The only one of the reasons I want to have you on it for many reasons. I think this is a you know, we live in a society where fertility rates are rapidly declining. Especially in the West, and you know, countries like Korea, and most of the developed world are experiencing like, you know, these huge collapses and fertility rates. And, you know, a lot of countries like Hungary have tried really hard to, you know, the all these, you know, pro stimulus programs, you're giving people money to have more kids buying the minivans, more free childcare, you know, all these different things. But I guess my question is, is about it. And what I found interesting, some things you mentioned, is like childcare, you know, as we have it today is kind of a recent developments, a new phenomenon. This is not the way we've always taken care of kids. It is a new development. Can you talk about like, you know, where we are now, how we got here, and how perhaps Child Care plays into, you know, the current collapse in fertility rates over time.

Unknown Speaker 4:53

Yeah, sure. So, just to clarify, when you're talking about fertility rates, you're talking about like, how many people are having kids? Yeah, Not necessarily like how many people are able to pregnant? So I want to go back to that for one second, because I have this interesting fact that I just recently came across on a podcast called no one is coming to say this. And it's, there are two countries in the world that offer no support incentivization of any kind from the government on any level. Yeah, the United States is one of them. No paid parental leave coming from the government. No. Child care, pensions, no. Support, no, like nothing, zero, zilch. And there's one other country in the world that's in the same boat. Do you want to guess what it is? Which one? Do I do? Papa New Guinea? Really? Yeah, I guess, US and Papa New Guinea, are apparently the two countries that have decided like parents, you are on your own if you make the poor life decision to have children. Good luck. Best of luck to you, but you're on your own? Yes. So yeah, I think that kind of sets up the problem, which is, is that we, you know, we decided as a society, that in the United States, it's in the best interest of everyone, people who have children, as well as people who don't have children, and never will, that children are cared for and educated so that we can have a functioning democracy and a civil society. And even 150 200 years ago, right. It was a family's job exclusively to care for their child until they were old enough to go to public school. And we have come to a place through a series of social changes for the better, where a lot of people want to have children, but they don't want to be solely responsible for caring for their child until their child can go to public kindergarten. And so we have this like, kind of quickly blooming need for a child care system, or infrastructure that doesn't exist. And so kind of to back up a little bit farther back from that. Do you want me to just go into kind of like the progression, or talk about some of the problems first,

Emily 7:18

let's talk about the progression. But I want to talk a little bit about what you just said. So it sounds like something where, okay, so you know, coming off of World War Two, everyone comes back starts having kids, everything's super, you know, norms around what you can do are pretty rigid. You know, everyone, you know, it's like picket fence, you know, everyone's getting married. A lot of like, a social pressure to do the same thing. You know, this, these things start to break down in the 60s. Yep, Woodstock, all these things start happening. And there's kind of a trade off, where suddenly we wouldn't start entering the workforce. And there's Yeah, going to college or college force. Yeah, they have a lot more flexibility what they can do instead of just being mothers. Or, like, you know, so this is a really good thing, like people have a lot more flexibility, they can do what they want to do. But perhaps this trade off against the fact that someone has to take care of the kids. And so suddenly, he creates a new industry, where, what do we do with children? You know, if both parents are working all the time,

Unknown Speaker 8:15

yeah, so that question kind of was posed societally much earlier than this much earlier than the 50s and 60s, you kind of like in the in the 1850s, and 1860s. You have, we have this realization in America, that there are some women and I want to be clear here that we're talking about white women. There were a philanthropist who recognize that some white women who were mothers had to work. And they were kind of like, for reasons that it was considered respectable for a woman to need to work. And that was if she were married, before she had children. So not having children out of wedlock, but she's married, she has children. And then her husband suffers one of what are called the Four DS, okay, he becomes a drunk, he becomes disabled, he dies or he deserts her Gotcha. So this is sort of like the, like, storm of circumstances by which philanthropists of the 1850s and 60s, look in societies specifically in cities and say, women, quite frankly, we could use them in the industrial workforce. And sometimes they have to work in order to provide food for their families. Their husband has suffered one of the four ds, and this is no fault of the woman. So let's help her out. Let's put together these things called Day Nurseries are very interesting. And so they were these very custodial, not educational programs that just kids could be dropped off in the morning and picked up in the evening and their mother could work to raise money to feed the family. And this was definitely not an enviable situation to be in as a woman, the mother child bond and was considered really sacred. And the idea that you might have to break that bond so that the mother could go to work was considered a bad thing. Gotcha. Because child rearing was done through through intuition through, like, what's the right way to say it? Generational habit. So you just raise your kids the way you were raised. And so the idea that a mother would be separated from her child was seen as a really negative thing. Yeah. Does that make sense? Yeah. So

Emily 10:30

it sounds like boy, do you think that was it was actually industrialization that drove the move to towards, you know, childcare, even existing, even more than, you know, the social changes that happen the 1950s and 60s?

Unknown Speaker 10:43

You know, I actually don't know that I can speak to what specifically? I mean, I guess timeline like time wise, you're definitely right. Yeah, I imagine they were like other social awareness factors that played a role there as well. But yeah, I don't know that much more about it. And then something kind of interesting happened. Kind of right on the heels of that, in the early 20th century, you have more white women going to college. And you have the emergence of the academic fields of child psychology, and child growth and development, sort of learning more about children's brains. And these fields grow really quickly in the early 1900s. And there's this major and pretty quick shift about the way people think about what best practice looks like when it comes to engaging with kids under five, it's there's this moment, like lightbulb moment of like, oh, like they can learn and they can be taught. And, in fact, they have like really spongy brains that can learn a lot really quickly. And they're, that's kind of like the beginning of what we now feel is true of about that period of time zero to five, which is like a really huge, a huge developmental period and a huge opportunity for learning. And sort of like an important formative period. And the early early child psychology and child development fields are the kind of the first academic fields that are pretty much exclusively developed by and dominated by women. Gotcha. And so like white women in academia, without a toehold into the academic world, and because this was a fairly new phenomenon, there was a really strong desire with the academic field and the educational research going on to distance themselves from the custodial Day Nurseries, to make this like strong distinction and contrast, like, we're not custodial. We're different. And so, in the early 1900s, you see the emergence of these, like, what became kindergarten, which then became tied to the public schools, these day schools that kids could go to, for socialization with peers, to be observed by psychologists to be taught by trained early childhood teachers kind of for the first time. And that comes along with this shift that maybe parenting by intuition, isn't the right answer, maybe just doing what your mom and dad did to you, isn't going to take us in a progressive direction overall, right. And so you see, these schools open up where kids would go for three to four hours, either in the morning, or the afternoon, but their mother would accompany them and stay with them. So this is not a child care scenario where the mother can then go to work, or even go to and carry out social calls or anything like that. This is an opportunity for the mother to then be further educated about how to best support her child during this time of growth and development. So it's sort of interesting that you have these two things, developing sort of around the same time, but really separate. And then the kind of the third thread, of course, is that we're talking only so far about white women and white families. So with the emergence of the Day Nurseries, we're still looking at the very end of of slavery in the United States. So black mothers are considered properties property of their owners, as are their children. So it's a totally different world when it comes to the way that we as a society see the mother's role, right? And after the slavery Emancipation Act, any non white mothers were excluded, and any non white families were excluded, both from Day Nurseries as well as from the kind of burgeoning childhood development and education programs of the early 1900s. And something that developed alongside of the education programs in the early 1900s. Was this the the the essentially the welfare system. They were called mother's pensions a long time ago, 100 years ago, and And the idea of a mother's pension had a lot of bipartisan support. In its auspices, it was this really like, warm, fuzzy idea that poor mothers should get help raising their children, because that's just what a decent society was like, we all care about the children, it's important to everyone that they thrive. And so if a family is economically harmed up, the state should step in and help. And the the policies put in place excluded non white women, not directly, but they were kind of proxies in there. So the example that I like to use is when you look at New Deal aid, you weren't eligible for that if you are a domestic worker, or an agricultural worker. And so when you look at the sectors of the population that were like doing domestic housework, it was largely black women. So it was a way to exclude them without directly calling out their race and gender. And then in the, like 1950s, and 60s and 70s. With the civil rights movement. Black mothers were kind of at the forefront of demanding equal access to aid from the state to raise their families, and rightfully gained access. And at that exact time, you see this pivot in the public perception of the welfare program. Yeah. And where as 50 years before, that, it was this wonderful thing that everyone supported, because like poor mothers sometimes needed help raising their children. But then you have the emergence of this myth of the black welfare queen, and women who are specifically having children or having more children in order to get extra income from the state, which just looking at the math was literally not possible to kind of thrive by having tons of babies. And so welfare reform of 1996 kind of turned that on its head, and it absolutely took away the guarantee of aid for low income women raising their kids and, and kind of put us in this in this place now, where you really can't talk about childcare needs of the family, or childcare as an industry looking both at the consumers and at the employees and the owners, without talking about the politics of like the race and racism and sexism that kind of got us here. Makes sense. Makes sense. It does make sense. Yeah.

Emily 17:30

Absolutely. So that kind of brings us up to the current moment, I suppose.

Unknown Speaker 17:37

Yeah. Yeah. Kind of the like, the big hiccup between what I just went through in the current moment is the pandemic, okay,

Emily 17:45

the visit pandemic, messing everything up? We'll get we'll get to that. Can you talk about the current moment right now? Like, you know, what is the state of American childcare? Like, how would you grade us? And yeah, just generally, how would you grade state of American childcare at this point?

Unknown Speaker 18:02

Like a scale A to F? Yeah, absolutely. I would give us like a solid, D. D, can you get it as a D? Plus a grade? Absolutely. Sure. Solid D plus, plus? Yeah. Yeah, um, I think like, there are kind of three ways that the system breaks down and fails. But I don't think I would like put us squarely in the failing category. Just because from working within that sector, I just can't I can't bear to, I think back on all my co teachers that I've had, and all the families I've engaged with, and all the kids, and I have like such a positive, positive, joyful, encouraged, wonderful memory of that work, but I can't slap a big red F on it. But I think one of the most challenging things that people talk about when they talk about childcare now, is the way that it squeezes parents. Gotcha. So there are kind of three big problems. One, we have a what a lot of people like to describe as a very threadbare childcare system. So across the country, so in a lot of places, it's very, very hard to find high quality childcare. Once you find it, because it's in very high demand, it's really hard to get in. So you hear people talk all the time about like, my wife, and I got pregnant. Before we even told our parents we were pregnant, we called all the local preschools and got on the waiting list, because the waiting list can be nine months, 15 months, two years, and so you have to plan way in advance or you're totally shut out. And then the other big problem is that if you can find good childcare and you can get in then it's extremely expensive in most cases. And so that's tough, like it sucks in a bunch of different ways. And one of the things that I find really interesting is the like the the part of that But I think I have the most insight into is parents as consumers of childcare and how to know what good childcare looks like, right breaks? That's kind of a tough question. There's a lot of different factors, it's a really personal question, because good childcare looks really different to different people. Yes, maybe your Christian family who really wants to pick a childcare where your child is going to be taught every single day about our Savior, Jesus Christ. And that's like, the most important characteristic of a facility, or, you know, maybe your, your family has a really different philosophy that's important. And so because childcare is not public, the way that public school is, there, all of these different types of schools, kind of competing for parents dollars, when it comes to what the value systems of the families are, make sense. And so I think that, when you think about a parent being a consumer have childhood education, they're kind of a short term consumer, right when you've had your first kid, and you're like, looking on Yelp, and all the childcare facilities in your town and the surrounding areas, you maybe don't know what to look for. And so you go into a bunch of schools, and you're just kind of trying to get a feel for what a good school looks like. And so a lot of schools have relied on kind of like two specific things to draw parents in. And in my mind, the two things that they rely on or like, kind of capitalize on are really misleading. And the two things that people rely on are like having a really beautiful, top notch sparkling facilities, right. So like a really nice building that's just incredibly clean, and we throw away all our blocks every six months and buy new ones that don't have teeth marks in the books don't have any rubbish pages. And it's hard to keep your stuff and your place looking nice. zero to five. But I think that has a dazzle factor that's a little bit undeniable to parents or the consumers, right. And then the other thing that a lot of facilities rely on that's become increasingly popular is just like, the hyper communicative nature. So there are a lot of apps that you can use. One of the most famous ones is called Bright wheel, and parents log on and teachers log on, and it's way for them to interface throughout the day. Yes. And so they can keep track of like how often your child's diaper is soiled. And whether it's like poop or pee and how much of their snack they eat, and how much of their lunch they eat, and how much of their breakfast they eat. And you can upload photos of them from like, every period throughout the day. And so parents like that kind of attention, and that kind of that detail. They like getting that detail. And they think, Oh, this is a like this must be a really good school. Because yes, everything is legit. And yeah, and it's well organized. And they're sharing all this information with me. And there's this idea that the most important thing when you hand your child over to someone else is that you can trust them. And if you don't know them, how do you do that? Right? Well, you literally have them communicate every single thing that happens without your with your child throughout the day. And then you don't even really have to be able to trust them. You're kind of there by proxy. Right? Exactly. And I think it's really dangerous to consider those kind of the main two markers of quality, right? And so when parents come to me, and they say, you know, you've worked in a couple of different schools in the area, you've been in early childhood education for a long time, I'm looking for a school for my infant, for my toddler for my four year old, what programs are good, what should I look for? I give the same answer every time. And I'm gonna give you a little bit of background about why what I tell them to ask is, what is your teacher turnover rate. And I want to know how many teachers who work at the school have been there for a year, how many have been there for three years, how many have been have been there for more than five years. And it's a, it's an industry that historically has just rapid fire turnover. So you can't compare it to a lot of other job sectors where people might stay longer. And, and also, in general, our society is trending in the direction of people job hopping more frequently, here in the triangle that maybe even happens more than normal, because this is a transitory area with people coming through because of the universities. So you have to take all that into account. But the most important thing, bottom line undeniably about a childcare center being good or bad is that the child has to be safe, and they have to feel safe, nice, and those aren't always the same thing. In fact, they're often not the same thing. So for a child to be safe, you have to be in a well run organized facility, where the teachers are attentive where the environment is set up carefully so that there aren't a lot of hazards. There are a lot of pieces of environmental policy that go into keeping children safe, right. But for a child to feel safe, they have to have a bond Did in predictable connection to an adult who's reliably they're at the mercy. Gotcha. So even if your child, even if you're getting your Brightwheel Brightwheel update every day saying your child ate three crackers and pooped at 10am, if there's a different teacher, at the first of every month filling that out, because the teacher turnover is really high, then your child is going to have really negative developmental consequences from that inability to bond with an adult at school from the inability to have a predictable environment. And it kind of makes, it makes the entire program suffer the parents, the children, the other teachers, the administrators. So to me, teacher turnover, like having high teacher turnover, or low teacher turnover is the best predictor of quality. But it's something that's never easy to to really judge, all you can do is like ask a center and hope they're telling you the truth, you know. So I think that one of the reasons it's hard for parents to know potentially, how to judge a program is that they're short term consumers of child care education. So you have your first kid, you're looking around for a good center, this place down the street, you can get in, we all can afford it, they'll tell you how much yogurt your kid ate all the info you need. And if you if you think about the way consumers engage in other markets, you need a little bit of trial and error time potentially, exactly. And if you only are consuming early childhood education for like, somewhere between two and five years, right? The trial and error steps are unique a in that the consequences of the errors are pretty high. You if you put your kid in a center, that feels really wonderful, but ends up not being a great fit, right? You know, it's a little bit worse than like getting a breakfast cereal that you don't care for, and you put in the trash. Right, exactly. And also your capacity to change your mind once you've decided to sign up for one school or consume one product is low, because you often have to put down a big security deposit, which it's hard to get into other places. Yeah. So kind of once, once you're in a center, if you look around and go, Oh, the things that I thought were important aren't important, or the things that I thought were were valued here aren't as valued as I thought, it's, it's really hard to switch gears because it's a big investment, both in time and money to do so. That makes sense. Yeah.

Emily 27:30

So this actually sounds quite important, because, you know, what I remember from my developments, little psych days, you know, there's kind of these these three factors that play into, you know, outcomes, the end of the day. For kids, it's like, you know, your genetics, it's your shared environment. And then it's your, you know, your family environment. And it seems like shared environment genetics play, the biggest role in shared environment is the biggest, like, estrus I have where it's like, wow, that seems like a very difficult thing to quantify. But the shared environment is like your school like, like what's going on, like, in with your peers, with your teachers? So it sounds like having, you know, consistency is one of the most important things you can screen for and look at.

Unknown Speaker 28:09

That's, that's my opinion, for sure. And that opinion comes from my own experiences working in facilities that had both high and load teacher turnover, kind of seeing this systemic impact that those trends have

Emily 28:23

makes sense. Makes sense? No, it makes a ton of sense. I'm curious, when we look at the price of childcare now, what do you think the biggest driver of like, why it's so expensive is I knew, you know, just just hearing about and following your experience trying to spin up a preschool, the licensure requirements, and like this, the insane bureaucracy, that all goes into it, the amount of time it takes, that has to contribute something, but is it something else, maybe like a Bumbles cause disease or something like that, where it is just hard to get productivity gains in the childcare sector? Because people, it's not like, you can watch so many kids at time, you can't scale that. There's no way I can make you more efficient over a certain certain amount of the kids can take care of at any given point in time. Yeah,

Unknown Speaker 29:10

that's kind of exactly it right there. So for most small community preschools, the overwhelming percentage of cost goes to your personnel. And if you think about it, a high quality infant program will have four infants for one teacher. And when you do the math on like, how much you'd like at the top end how much you can charge for an infant, and then how much you want to be paying that teacher. There's not a lot of margin in between that. So if you actually look at the programs in in the triangle area, infant care is one of the most anemic offerings, because you really, basically can't make money on taking care of infants in the programs that have infant care. The reason they have it is because it functions as kind of a farm system for their three to five year old program where you actually can maybe make a penny or two. Something that's interesting that's happened In the last couple of years, which I kind of touched on earlier is that I don't think I talked about earlier think about I talked about before we were recording the, the big business chain company, childcare centers have grown, like faster and 2021, than pretty much ever before. And they are kind of taking advantage of a couple of different things happening in this moment. One of them is that like smaller childcare centers are closing kind of what's the word for when you cut the tendon on the back of a horse's leg just enough so that when it raises it fails, cobbled. So the community like smaller independent schools were cobbled by the pandemic, and then we're in this kind of weakened state, which let these larger corporations which are attracting a lot of interest of private equity companies to kind of come in and take them over. So I have this interesting statistic from a New York Times article that just came out really recently about that industry about kind of like the big business side of child care. And let me see if I can find it. I got these all out of order.

Emily 31:18

Well, in while you find it, it does does seem quite interesting. You know, in context, it makes sense that private equity has been able to sweep through and buy up, you know, a lot of practices and you know, childcare centers and put them roll them up. Because I have just seen you, you know, struggle with you know, how do I get capital to get started? Yeah, I have extreme ability to get a lot of leverage and a lot of capital and even at this problem.

Unknown Speaker 31:42

And so one of the reasons that that has happened is because of the pandemic, right, all of a sudden, we're talking about how how directly childcare impacts the economy and the job market, and it's sort of like, childcare is open, and people can go to work or it's not, and they can, and there's not. So the pandemic really highlighted the importance of predictable, dependable childcare exactly for like, kind of like for the broader economic success of the nation. So that was why you have all these investors and, and other sectors as well, not just private equity investors, but kind of other people, all of a sudden, looking at this small piece of our infrastructure, and realizing how important it is and talking about it a lot more and stuff like that. So the 50, largest for profit childcare chains, open door acquired 537, new centers, and 2022. Oh, wow. And like I said earlier, like the rest of the sector is literally withering on the vine, like the centers are still closing. There's this huge labor shortage where these like, so those types of bigger companies can. They can charge premium prices, and just simply because of their volume, they can weather something like a pandemic better. And then they also can react better to the to the labor market pressures than a small company. So something that's happening right now really frequently is that smaller scale 2345 classroom, single location centers are not able to compete with compete for labor, with companies that are charging, like living that are that are paying, you know, 2015 $20 an hour and offering really competitive benefits. And that's something that breaks my heart because that's the job I have and had and create that job for other people by opening a school that really elevates the early child, early childhood teacher profession, yes, make it into a career and makes it something that you could raise a family on. And I can't I can't balance my budget to make that happen. Right. Kind of just because of the of, of on a small scale, the way the labor numbers and the tuition numbers work out.

Emily 34:06

Right, right. And I know this is not your ambition. But do you think it is possible? Two might be ambitious, but you think it is possible to create childcare centers at scale that are that actually do a good job.

Unknown Speaker 34:19

Can you talk more about what you mean, when you say at scale? Like you're talking about like the nationwide Corporation? Could

Emily 34:24

you do a nationwide corporation that actually does a good job of the day? You know,

Unknown Speaker 34:27

that's such a good question. And I need to think about that for a second.

Emily 34:34

Because definitely that you know, like in context, like, what's private equity doing? So private equity sees this opportunity where they go and they say, okay, we can buy these firms, we can fire a bunch of people. We can clean up operational processes, we can squeeze more margin, we have cheap access to capital. And so we can kind of leverage that up and get better returns. But is there a way to do it where you know, you're, you're mission driven and like we really want to help the kids and we can do it Job, we can make it affordable. We can use economies of scale to actually bring costs down and make the math work. Is that possible? Yeah.

Unknown Speaker 35:07

Okay. Okay. Yeah. I think, theoretically for sure. Definitely. It's not happening right now in any way. Yeah. And I think one of the really important things to think about here are the the, like, natural tension between education and business. Yeah. Right. So if you think about why it's really important to have a public education system, rather than a privatized education system for K through 12, there's, there's a really strong argument to be made there that you can't run a public education system like you can run a business. And I think a lot of those same tensions come into play when you're talking about these, like private equity backed large corporations, right, sweeping through the country, and like, vacuuming up all of these small community centers, and one of the things happening right now that's really problematic is that this exact development that we're talking about, with these big companies growing and small community schools feeling is that the bigger companies don't offer subsidized spots to students, because the, the amount that they can make on a subsidized tuition spot is far lower than what the parents are able and willing to pay. And so a lot of these like, top companies, some of the, the main ones that come to mind are Bright Horizons. There's a Primrose Academy Chang, there's Goddard school, all of those have locations here in the triangle. I'm not sure about Bright Horizons, but I know there's a Goddard and there's a Primrose. And from like a PR standpoint, they all talk about the importance of equity when it comes to early childhood education. But in practice, it's just not there. Right. And that's because they're their businesses that are driven on a national scale by the bottom line, and they will that will always always be at odds with the success of teachers and students, I think,

Emily 37:21

yeah, absolutely. I do think I do you think I would love Emily, I would love to see you. You try and tackle this problem? Because I do think there that there actually is an answer here where the problem currently, as I see it, and as you how you've described it to me, is that, you know, private equity backed childcare. It is truly like a spreadsheet game for the people who run these companies. Yeah. But I think a founder backed national chain, like an IT founder run for a long time, could actually solve a lot more of these problems, because you can put different things first, when you are when the founders of these organizations are still in charge, like this one startup plan, which is where I'm from, but you know, you can like when founders are still in charge, like the mission can still come first. That makes sense, in a way that it cannot win yet Professional MBA managers come in, you know, the Harvard, Stanford, Stanford, Wharton, the private equity folks come in, and they want to, what do they want to do? You know, it's all about squeezing process efficiencies. Today, the kid just gets squashed out of the equation.

Unknown Speaker 38:26

Yeah. Yeah, it's a really kind of interesting way to look at like, traditional market forces on a business because it doesn't quite fit the mold. Because the like, your if you consider a school, kind of like, analogous to a business, your customer is the child technically, right. Guess the parent hearing. So so you're trying to serve it gets, it gets a little bit murky, when, like the best interests of the child when they're at odds with the best interests of the company. Ran of like, exactly get steamrolled.

Emily 39:04

Yes, yes. Yeah. I do think you could actually get you could get past it if you are a founder led company, and you made these things explicit. And, but But you cannot with, you know, NBA managed, you know, massive childcare conglomerates,

Unknown Speaker 39:19

is what a lot of ways when you when you're talking about the economy of scale of the of like it's undeniably attractive, right? Because there's a stability to weather things with the size, and it just kind of opens up the door to more more potential resources. And you also have to invent the wheel fewer times. You know, one of the criticisms there was a comparison in this article in The New York Times about private equity in childcare, post pandemic, and they interviewed a woman in Maryland who runs her own small community based preschool and she has a 50% or more of her Students are subsidised students, so she has a really, she has a blend of students in her school that represents the like socio economic blend of her greater community. Whereas these are the schools that they're comparing her to in the direct area, which are these like Bright Horizons, Primos Academy schools, they just are like the whitest wealthiest kids in the area. And so there's a real value to that. But she was saying, if I were part of that franchise, I would have someone else doing my marketing, I would have someone else doing my bookkeeping, I would I would be able to do what I really want to do. As an educator specialist, which is focused on supporting the teachers focus on supporting the families focus on best practice about learning about, you know, how we can change our environment, how we can tweak things here and there instead of like, figuring out how to update to the newest version of QuickBooks. And so there's a way that kind of like sharing those resources on a large scale is really appealing for sure,

Emily 40:57

yeah. And you cut costs that way. And if you did it the right way, you can really make things make things better. Very covert, I want to talk a little bit now. This is an issue that is actually getting traction, kind of across the global political spectrum. Now, I think people understand that we've done a bad job supporting families generally, especially with you know, I think in the context of the Child Tax Credit, which has gotten good support from across the aisle mourn cast and, and folks like that, and I hear a lot of my friends on the right, who are like, actually interested in these kinds of family support programs now, I think, yeah, in context of the pandemic, and a lot of things happening. Do you Do you think there's a good future there for more federal support?

Unknown Speaker 41:39

Yeah, I do. And I think, well, I don't know. I really hope so. And I think that they're kind of a couple of things coming together at once we were at this point in time where there was there, there was and continues to be so much research coming out about the importance of the zero to five years, from simply a formative formative perspective, and how formative those years are, but also, in terms of what, like quality care, and quality support for a family during that time, can indicate way down the road for a child in terms of like life success. And so there was already this increasing interest, increasing funding kind of growing momentum in that field, pre pre pandemic, and then we have the pandemic. And there's like, even more attention to how important childcare during zero to five is for the nation. And it's sort of like, parents and providers right now are shouldering this independently. But the government through tax revenue and businesses, yes, through labor, labor forces that have the capacity to work because they have reliable childcare are benefiting from it. And so there's this idea of who's going to step in and help the parents and the providers because they're drowning right now. And, to me, the only way forward that makes sense is for federal and state funding to go into the system and to support it. And I think if you look at the political landscape of the last couple of years, we have, we got like, we got real, real close. And even looking back farther in history, we got really, really, really close. I mean, we had a federally funded child care system during World War Two when women had to go into the workforce. And it was amazing. And as soon as the war ended, and all the soldiers came home, and they needed to go back into the jobs, and they needed the women to vacate the jobs, it just kind of like, all went right back to the way it was more or less, but it was this time that we can look back at and say, this worked, and we can do it. And we did it once. I know we can do it again. And there was another time in the 60s, I think when there was a senator from heaven in my notes, Senator,

Emily 44:00

can you talk about the world war two example? Do you know much more about that?

Unknown Speaker 44:04

Yeah, yeah. So um, so the Lanham Act, I think it was 1941. Let me find my notes. Yeah, the Lanham Act of 1941 put into place a system of federally funded childcare centers for zero to five year olds. And they were designed around shifts that their mothers would be working, going, like, you know, thinking of Rosie the Riveter flex bicep, like, that's who they're supporting. And they were comprehensive in a lot of ways. I heard an interview recently, between a woman who taught at one schools was really, really really old and one of her students who remembered going and there weren't a ton of them. And there were lots of different levels depending on like, what area of the country you're in and how close to like industry hubs you are. But this man had been a student at one of the them had really vivid really rosy memories of being a student at the school. And the schools were really well supported. They had doctors and nurses on site. They had developmental specialists advising curriculum. They, they trained teachers, so that they were not just kind of like a babysitter thrown into the room, but they were kind of like, supporting them and learning kind of best practices and tips and tricks. Some of the center's not all of them, but some of them included a meal service as well, so that when a mom went to pick up her child, she could also pick up a meal to then take home as warm and serve her family since she's not at home. Five years earlier, she would have been. And so it was this like kind of idyllic, really beautiful, expensive, but unnecessary, exactly deemed unnecessary support that families got in this time when kind of like, coming together as a nation. So it felt really important and was supported, of course, in a totally bipartisan way. Yeah.

Emily 46:07

Well, and I bet, I wonder if you have the figures, but I'm sure it was probably not as expensive as, as we would imagine, you know, just looking back at how how cost diseases affected our society, just, you know, even in transit costs, where things just cost, you know, 100 times what they did just to build during the 1940s. You know, I bet it was probably surprisingly cost effective at the end of the day.

Unknown Speaker 46:32

Yeah, I don't know, really anything about the budget numbers and what they looked like. But it was done really quickly. And really successfully. And so that's not to say that it was done with ease. But yes, I think there's something there's a takeaway there and sort of looking at how quickly the Act was passed, and how quickly the schools materialized. Yeah. And then unfortunately, how quickly they laid Exactly. Poof of smoke. Yeah,

Emily 47:01

but it is a good reminder that we do have the ability to do things like this. And it doesn't have to take long, but we have lost a lot of state capacity, a lot of talent or something, or something weird is going on where our government is just not as capable as it used to be, you know, in the 40s. And the 50s.

Unknown Speaker 47:17

In terms of like, getting s**t done. Yeah, just generally. Yeah. So there was actually another moment since those World War Two schools where we got really, really, really, really close. Yeah. And it's, it's kind of like an interesting anecdote, this guy, Walter Mondale, who OH, YES. Jimmy Carter. Yeah. So he, as a senator proposed a bill in 1971, called the Comprehensive Child Development Act. Yeah. And it was a reaction to this really big news story that made news nationwide. In 1968, a child in Washington DC had been had been walking home, during the middle of his school day, he was a public school aged child, he was walking home to, to his, to his house by himself. And he was hit by a truck and killed. And the media picked it up and wrote stories about him. And when they're kind of digging into his background, it came out that the reason he was walking home, was that every day he left school in the middle of the day, during his lunchtime to walk home and check on his toddler baby brother, oh, well was left at home alone, because their mother had to work and couldn't afford childcare. And so this child, I think he was six or seven or eight, would walk home every day, share his lunch with his baby brother, check on him, and then walk back to school. And so the senator Mondale was kind of like, looking for some policy to get it to get kind of like to get going and to kind of get traction in this particular area. And that story was, was really attractive, because it kind of made it really, really clear was this sad anecdote that crystallized this idea that like, what are we doing as a country like we need to fix this. And so the the, the, both the Senate and the House were in democratic control at the time, but they did pass the bill. And the Nixon administration signaled that they would sign it. And then there's actually audio recording of a phone call between Ronald Reagan who was a senator in California at the time and Nixon, and it's impossible to say specifically that that interaction or that phone call is what is what caused Nixon to ultimately veto the bill but in this phone call that you can access, he's saying this is a really big problem. This is a this is people who want the child the state to take over the rearing of the child which should be something that mothers do and sort of this kind of anti in my mind, it's like this anti progressive reason to to kill this bill. But you know, that's another moment we look at the World War Two schools we look at We look at kind of the the, the mother's pensions and the Day Nurseries and all of these steps that we've taken along the way to say this is something that as a society, we think is really important that we think we need to do, and we need to provide. And kind of since the 70s, we've just been sleeping on it. And nothing has really happened until, you know, you would never hope for a global pandemic to highlight something like this, but it has put a lot more eyes on the issue for sure made things much more clear. Yeah, yeah, made things much more clear to a lot of people for whom they weren't already clear. Because there were a lot of people who were already really aware of kind of how challenging a lot of things were from a lot of perspectives.

Emily 50:37

That's great. That's great. Very cool. Very cool. Well, Emily, is there anything else we haven't covered that we want to cover?

Unknown Speaker 50:44

I wanted to just take a minute to talk a little bit about why I think this is a really important field. Because we've kind of spent the last little bit of time trashing it essentially, and talking about a lot that's wrong with it. And, you know, my experience as a preschool teacher, when I, when I worked before the pandemic, when I worked full time, as a teacher, I worked really hard, I worked full time hours in the classroom. And then I also had, I had, I was really lucky, I was at a job where I had paid planning time, and I had benefits, and I made a living wage. And that put me in a pretty elite category when it came to daycare workers and childcare providers. Yeah, for children under five. And that, honestly, taking that job was the first time that I thought maybe this can be a career because I had worked in preschools before. And thought this is just something that some women because I've only ever worked with women, some women do, until they're 2526. And then they have to get a real job because you can't support you can't certainly can't support a family, but you can't really support an individual adult on the money that I was making at other centers where you're making eight 910 $11 an hour. Um, but i i So I think of this joke that sort of knocked around in the industry, which is why did the preschool teacher cross the road? And the answer is to get to her second job. When I was working full time, I just poured myself into my job I worked so hard, I was young, and I didn't have a family, I didn't have a lot of other things that I divided my time between. But before and after work, I coached classes in a CrossFit gym for extra extra money. I played drums in a rock'n'roll band, which was an extra source of income. And I did a lot of like babysitting nanny and house sitting on the nights and on the weekends. So that I could kind of cobble together what felt like an income that I could live the life I wanted to live on. And most people could only do something like that at a certain point in their life, you know, that's not something you can kind of carry on long term. That's not true. It is something that lots of people carry on long term and do forever. But that's really unfair. And so I kind of got interested back then looking at myself, looking at my coworkers looking at the way all of these centers were designed, which is you, you build a center, and then you hire people who are young and don't have a family or who have a partner that makes three times more money than and those those are the only that's the pool of people you can hire because that's what you can afford to pay, or what you're choosing to pay. And so I felt like there just had to be a different model to, to work from or because I think that this is a job that's really, really, really important. Yes, and really fun. And I think I put this in my notes, but I hate using the word rewarding because it's so like, I teach because it's rewarding. It just sounds really trite, I think but what I mean specifically is that when parents have one children, child or two children or three children, under the age of five all at once, that's the rush hour of their life as a family like it's crazy. Yeah. And the needs that they have always outstrip what two parents can provide, right kind of no matter what. So, and also, the things that you have to worry about, generally as a parent are very big in scope. So to feel like you can step in as an expert in zero to five year old children, and be a sounding board for a parent and be a safe place for them to like, take their kids on board during the day while they're going to work and be a person that they trust to take care of their kids like that's a tremendous, tremendous bowl you over honor for a chat for a parent. Most parents, their children are the most important things in their whole entire life. Exactly. So for them to come to you and say, Here's my child, my life, Mike everything. Please take care of me while I go to work. That's a really, really big deal. So to get to do that, and to get to be a support system. to a family that's in this period of time, that's just insane where things are crazy is feels like a really valuable worthwhile thing to do. So that's kind of what I mean when I say that it is like a rewarding job to do. And it's also just really fun, really dynamic, really hysterical. And I have done lots of different types of jobs and lots of different types of industries, and just love this the most. And it makes me feel really sad that this is a job that we can all agree as a society is a really important, valuable, unnecessary. And it's a job that people want to do. But there's not really a workable way to make money doing it. And that that seems crazy to me, because all the all the ingredients are there to make this like an elevated career option. And we're just not there yet.

Emily 55:55

Definitely Delhi. Well, you're working on solving that. It's good. It's good. It's really good. No, it's It's inspiring,

and I'm glad you're admiring the problem and working on ethical, definitely get there. Where can people find you? Where should we send them?

Unknown Speaker 56:08

You know, I don't have any social media. Nice. So I guess, if someone like, I love talking about this stuff, and I love, like, if anyone has any questions about anything that I talked about, specifically what my resources are, oh my god, I would love to talk more about that. If anyone is listening to this and going. I can't believe she didn't talk about this particular study or this particular social initiative. Like I wonder if that's on her radar. I would love to know that. And so the best way to get in touch with me is just email. And my email is Emily day@gmail.com. The

Emily 56:41

deal? Yeah, I'll put a link down down in the show notes. Yeah. Great.

Unknown Speaker 56:45

Thank you. Thanks, Emily. Thanks so much. This was fun. It's awesome.

Emily 56:52

Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck free and brief dot biz market analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:41

Well, Jay, how are we doing this morning?

Jai Malik 0:44

Hey, good. How are you? Man? Doing great.

Will Jarvis 0:46

Thanks so much for taking the time to come on the show. I really appreciate it. Do you mind giving a brief bio and some of the big ideas you're interested in?

Jai Malik 0:54

Yes, absolutely. So my name is Trey Malik, the GP and founder of countdown capital countdown, we're investing in founders that are rebuilding the American industrial base at the earliest stages. Generally speaking, we think founders building areas of heavy industry are building companies that are both geopolitically important and more commercially viable than ever before. And the right ones will produce outsized returns for us as investors. So we're usually investing in industries like manufacturing, defense, aerospace, energy, construction, mining, etc. Any industry that can be considered as part of heavy industry, we're taking a look at. And we often invest at the pre incorporation and pre seed stages. So oftentimes, we commit to invest as early as an idea with no company formed yet. So that's high level, who we are and what we're doing account out.

Will Jarvis 1:48

That's great. That's great. And you recently raised a new fund, is that correct?

Jai Malik 1:52

Yes, yes, it was a $15 million fund to pretty excited about that.

Will Jarvis 1:55

Very nice, man. It's congratulations. It's no small task to get these things together. Thank you. Yeah, absolutely. This is really exciting. Well, Jay, what has shifted that has made it easier to start these kinds of hard tech, you know, American diamond, diamond ism companies. You know, capital is actually getting more expensive right now, it was really cheap for a while. But what else has shifted that has made it much more it made it easier to kind of build these kinds of companies over the last kind of decade or so?

Jai Malik 2:24

Well, I'm not really sure if if we can say that hard tech is, you know, is has made, you know, has been easier over the last three to six months versus before that, I think, in general, succeeding and hard tech requires a skill set and a founding team that has a different persona than your average SAS founder in general. And so whether that success is harder or not than before, easier or not than before, is up for debate. But I think it is certainly different. And there's certainly a lot more airtime being given to important issues. And so in that sense, it's if you think eyeballs means something is easier than I guess it is. But in my opinion, I don't really think it has been made easier. It's more of a narrative that has been made easier. Gotcha.

Will Jarvis 3:09

That's great. That's great. With the crisis in Ukraine, with the rise of China, do you think it's gotten easier to make the sale here of, you know, leave your SAS job and come work on these these harder, more difficult problems?

Jai Malik 3:23

100%. And I think there's actually some danger and getting, there is some danger in making these problems seem easier than they are. But without a doubt, 100% it's been easier to convince people post Ukraine than before. Got it?

Will Jarvis 3:41

That's, that's great. That's great. I'm curious, how much does automation play into what you invest in? How bullish Are you on industrial automation over the next kind of 20 years? Do you think we'll see a big wave of this? I'm reminded of EB Hadrian, the big, big kind of machine tooling company. My brother worked in a machine tooling shop for a while. He's a mechanical engineer. And he noted how custom and how, just how difficult automating a lot of what these machine shops do is on a day to day basis. So how bullish Are you on using automation to industrial automation? And where we'll go with that over the next 10 to 20 years?

Jai Malik 4:22

It's a very broad question. I think most people in tech, maybe aren't aware of this. But the fact is that industrial automation is already very pervasive across many manufacturing settings and this large contributor to efficiency already in the US economy, right. So the question is not like, am I bullish on automation? The question is, am I bullish on what kinds of automation? And I think, in general, I do not think pursuing automation just for automation sake, is something that is worth pursuing. Primarily because in a lot of ways, it disenfranchises the kinds of people that we need to be Interested in rebuilding the industrial base. And also because it oftentimes it doesn't actually lead to greater operational efficiency compared to using a, you know, a team of people. And so in general, the way I look at automation is if it's if it enables orders of magnitude, better opera, you know, better operations or better margins, go for it, it's something that will definitely be a key advantage for companies that are able to do so. But saying that, you know, you want to automate something, just because you want to automate it and make it seem like, there's some, you know, coolness or sexiness, sexiness towards it, that makes investors interested, I don't think that's worth, I don't think that's a great way of building a business. I'll put it that way.

Will Jarvis 5:46

So you need to be very thoughtful about where to use automation, and where not to where you run into kind of Elon, model three production problem issues.

Jai Malik 5:53

Yeah, and you know, generally speaking to write automation, what most people think about when they think about automation is they think about like a computer reducing the ability of a human being to make a certain decision or to do a certain process. But computers need to learn from somewhere, right? machines need to learn from somewhere. And human beings are going to be a big part of the learning process, whether it's now or 50 years from now, for industrial machines. And so, in general, automation requires knowledge, knowledge of what to cut out knowledge of how to streamline and that knowledge is, is right now concentrated in the hands of humans. And so even the very idea that like, automation is necessary and more automation necessary, more automation is good, requires more knowledge, more great people. And so I, generally speaking, do not think that automation is a zero sum game, like if you want to increase automation, you have to increase knowledge increase people.

Will Jarvis 6:53

Make sense. Make sense? Jay, you invest quite early in, in hard tech companies was really cool. This is this is a narrow vertical. There not many people that do this. What do you look for in successful founding teams and successful founders? That that is a good signal that you'll be able to that they will be successful in the long run?

Jai Malik 7:17

Great question. So there are numerous ways to take this question. I'll answer what we what we are trying to avoid, or specifically, you know, what we what we prefer not to invest in, right, as opposed to what we would like to invest in. And so the big thing for me to start with is that we do not want to invest in founders that are easily able to derive their unique insight, or opinion or secret on the market. Just by looking at the news, we think that earn insights and earn secrets about markets about industries or building a company are done by putting in hard work. And so that means doing hundreds of cold calls, or getting connected with with the highest decision makers in an industry, or simply just working at other companies in the space that you want to build a solution, right? We think it's, we think secrets are earned, we think insights are earned. And we are we're primarily looking for people that have done the hard work to earn their insight, not necessarily just take some sort of talking point out of our research report. So that's number one. Number two, we are looking for a founding founding team or a founder that has thought about the market in a way that doesn't just cover market size, but also covers market dynamics. And what that what I mean by that is like, unlike software, many of these markets, like manufacturing, defense, aerospace, construction, and etc. These are all trillion dollar markets through extremely large. The customer said in a lot of ways is proven out, right. And so the question is like in these industries that are often monopolistic, and we're oligopolistic, how do you penetrate the industry, knowing that the dynamics are going to be quite unfavorable to new entrants? It's not just whether it's big enough, the question is, are these markets open enough? Or is there a right wedge point or entry point, to disrupt? You know, a suite of incumbents. And so the market dynamics and knowing whether a founding team understands those market dynamics is really important to us, as part of the evaluation system. The third sort of metric that we're looking for, and we talked about this earlier in terms of talent, but the third metric we're looking for is the ability to recruit talent. And that is we're looking for people that can either inspire people with a very bold vision, that that, you know, that really gets people excited that that makes them want to work on really hard problems. And or people that have worked on hard problems before that have a track record of hiring people on to work on heartbreaks, right. So maybe they've led teams before at companies like Andrew or SpaceX and they want to start something new, and they're taking that track To record and applying it to found on company, which can be very, very helpful. And so, in general, it's these three factors, its ability to recruit talent. It's market dynamics. It's understanding the founding team, you know, and then their own personality and skill set. on a deep level, it seems to be things that don't matter a lot to us a countdown.

Will Jarvis 10:20

That's great. I mentioned something very interesting there. Early in that earn secrets, it seems like there's there's, there's probably like something like an efficient market for secrets, and that you've got to expend some energy to to to find something someone has missed. And just reading Industry Reports probably won't get there, you need some unique insight from something that's like, more illegible to actually be able to find like this $20 bill on the sidewalk,

Jai Malik 10:45

if that makes sense. Yes. Yes. Cool.

Will Jarvis 10:48

That's cool. So I'm curious. You mentioned something interesting there about market dynamics and needing to understand market dynamics in a very robust way. And earlier, you talked about the political and managing the political, how important is managing the political in when building hard tech companies, I remember reading about me with SpaceX or Anduril having to actually litigate, you know, some federal government purchases, because you know, Boeing, whoever the incumbent is, was was doing shading things or something like that, in order to win deals, how often do you have to actually like, bring in the attorneys to in the BD process, when you're building hard tech companies that sell to you know, entrench government, like interest or things like that?

Jai Malik 11:34

Yeah, that's a good question. Attorneys are obviously a big part of any company. But I think it's it's especially important for our tech companies because of ITAR compliance, sippy has regulations, etc, etc, increasing restrictions around doing business with foreign entities that are adversarial to the United States, right. So from that perspective, bringing attorneys into the process is important. However, waging political battles is not the same as bringing an attorney into the into the fray, right. And I think the political battles that founders need to wage in hardtack are definitely a lot more steep than your traditional software company. You know, for example, if you're an aerospace company that wants to fly supersonic jet, for example, you need to make sure that you get approval from the FAA, you get a certain kind of regulation tweaked in your favor. And so these kinds of quandaries are regulatory quandaries are really, really important for hard tech companies to deal with head on. And therefore the founders of these companies need to have a political bent in some way, shape or form, they must enjoy fighting political battles, and or they must have an eye for hiring people that can fight political battles, it's extremely important if you want to have an unfair advantage in these industries, a but b if you want to make sure you get to market in highly regulated markets. So yeah, that speaks hopefully to the importance of a political balance here

Will Jarvis 12:52

makes it so understanding policy is important. And when we had Eli on the show, who used to run policy for boom, supersonic, and he talked about how important was like just navigating the landscape, even just to test these kinds of platforms, in the real world was really important. I'm curious, what companies are you most excited about in the portfolio? I know, it's like, you know, picking your children, perhaps it's kind of a difficult thing. But are there any that stand out? It's super interesting that you'd like to talk about?

Jai Malik 13:21

Sure. You know, many of them are installed. So I really cannot comment, even though I'm super, super excited about, you know, most of my companies, but the ones that aren't installed that I think are obvious, would be first Hadrian. And you know, Hadrian has obviously done an incredible job over the last couple of years. They recently raised I think, was a $90 million series A infuser prime. And what Hadrian is doing and what Chris powers union, Hadrian is incredible. He's single handedly, in many ways, revitalizing manufacturing tech, in Silicon Valley and beyond. And I'm seeing many, many companies and founders, look at his success and think, why can I do that? Right? And so that's, that's really, really inspiring. And I think, in a lot of ways, that's that is the Elan effect in a very, very small level. And I'm very excited to see how that develops. As Hadrian grows. The second company that is out of cells that I can talk about that I'm excited about is a company called Otis aviation. Otis is building long range, vertical takeoff and landing aircrafts. And I'm very excited about Otis because they are not focused on generic urban air mobility. They're they're working on revitalizing and replacing regional routes. That, frankly, have not been seeing a lot of air traffic recently. But, but I think are going to be crucial to making sure that you know, rural America has access to urban American resources over the next couple of decades. And so, their ability to for example, connect, you know, people in Missouri, to the people in California through a short flight is going to be really important and a way to bridge the gap between the urban rural divide in America

Will Jarvis 15:00

That's great. That's great. I'm really excited about that, that that is a that's a very useful piece of technology and being from rural eastern North Carolina, that this is something that will be the quite appealing that someone like me. That's, that's great. Jay, I want to talk a little bit about China. Now. You know, there's a narrative that's popped up recently, that, you know, there's an incoming demographic demographic collapse in China. And it's something we just we don't have to worry about them anymore. It's something that will kind of pan out, and they're just going to kind of wither away over time. It's not something we have to worry about. How scared should we be about great power conflict with China? And how prepared are we this current moment? I remember reading some reports that it seems to be that we struggle to keep even just a consistent supply of munitions for our aircraft and all these, you know, super expensive weapon systems we have, how prepared are we? And how concerned should we be about great power conflict with China?

Jai Malik 15:54

Good question. So right now, my team and I are actually working on a piece that outlines how we think about this great power competition with China at a high level. In general, I think we are better prepared than some people think we are thinks that the House of Cards that the Chinese economy is built off of, and the economic tools we have at our disposal to disrupt their quality of life. It's pretty substantial at the moment. However, this advantage is eroding in my opinion, as an app, an alarming pace, especially the last two or three years. And we must back our efforts to stave off the CCP with consistency and supremacy in aerospace, defense, manufacturing energy. Right now, today, today's China's pace of increasing scale in these areas, is undoubtedly higher than ours. And the CCP is working day and night to displace the US Dollar as the world's reserve currency. So we have a lot of work ahead of us. And they're certainly aware of the problem in a greater way than we are.

Will Jarvis 16:58

So what do you owe that advantage to AI? Are they just, they have more state capacity? Are they better managers? What do you think's going on there?

Jai Malik 17:07

They have on Mesh Control, right? The reality is that they have on Mesh Control over the country's industrial capacity. I mean, in the last in the 14 years since California launched its high speed rail initiative for SF to La less than 120 511 20 Miles even began construction, right the team at a time, can China constructed close to 25,000 miles of high speed rail, literally its entire country, right. So they are they have unmatched control over the capacity by having a single party state and a communist state. And they are also rapidly developing their hypersonic arsenal. And they're a large outbound investor and through both hard and soft ways, in alternative energy technologies, right. And so, in general, they have unmatched industrial capacity, they're taking a very tactical look at how to support other countries and get access to their resources. And, you know, they are very hyper aware of the fact that they need to solve these problems unless, and if they know, frankly, they will, they will see a huge decline on the world stage in the next 2030 years.

Will Jarvis 18:12

It seems quite quite scary that they're aware of it, and they're working to it. And and it almost seems like is it your sense that the American government is less just seems to have less agency in the I mean, I know we're thinking about this now in a more robust way than we were in the recent past. But but it almost seems like if the narrative is well, they're just going to wilt wilt away over time. And they've got this sense that they can do something about it, and they're trying really hard to do something about it. It seems like a recipe for disaster where we don't prepare enough, and then they actually can find some way to get around these demographic problems and economic problems they have, and remain like a real competitor over time.

Jai Malik 18:53

Yeah, I mean, it's certainly not an ideal mindset to have. I think, as a nation, however, I think the beauty of America has always been that the private sector takes takes things a lot more seriously that that matter for both commercial and geopolitical reasons, then the US government and you know, the private sector will, you know, I think eventually be a stimulant for the US government taking things more seriously. And so I'm bullish in the sense where I think people, you know, like me, hopefully, in VC and startup world, and even more broadly, out in finance in general, will start realizing the importance of making sure that we have enough industrial capacity that of investing in like emerging technologies that matter. And I think, you know, ultimately, us taking it seriously is going to make the US government take it seriously over time. And so that's my, my bull case, at least on where we go from here.

Will Jarvis 19:47

That's great. That's great. Well, Jay, what's next for countdown? What does the future look like for the firm?

Jai Malik 19:54

It's good question. We just respond to so at the moment, we're, we're not planning to fundraise anytime. Soon, we'll be releasing more details publicly soon on similar initiatives. But we're mainly working right now on a new initiative called Countdown collective. Collective is essentially, at least once is fully built out, going to be a modern day industrial guild, we want every single early stage hard tech startup, to start their journey on the hunt for talent with us, especially, especially those in our portfolio, obviously. And as an early evidence of success with the collective, we've helped more than half of our portfolio companies find co founders and early early hires through this initiative. And some of those folks have been successful, you know, well known companies like SpaceX, for example. And so, you know, the collective for us is, is a really big push, we're basically trying to become a calculator. And we're gonna be holding in person and online events that are invite only in the coming weeks to really open up access beyond the folks that are currently involved. So I'm very excited to kick that off.

Will Jarvis 20:55

That's great. That's great. Well, Jay, super excited about what you're working on. I'm glad you're buying this problem. This This helps me sleep better at night. Where can people find you? Where should we send them?

Jai Malik 21:05

Absolutely. You can find me on Twitter. J Malik should be right there in your search bar when you type in my name. My DMS are open and on email. My email address is Jay at countdown off capital always open to

Will Jarvis 21:18

super awesome day. Thanks.

William Jarvis 21:23

Thanks for listening. We'll be back next week with a new episode of narratives

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38

Well, John Shawnee, how are you guys doing today? Very good. Thank you. Awesome, awesome. Do you mind giving a brief bio in some of the big ideas you're interested in.

John Manoocheri 0:48

So my background is in architecture, environmental science. Basically, I've been running a company called last meet for the last few years, which is focused on essentially integrating modern consumption patterns, essentially, service based consumption, ie delivery based consumption into buildings basically, like I think, if you want to make these services more efficient, so you're essentially to design them into the business model and the architectural, like spatial plan and design and experience of modern living. So rather than car parking, you have access to car sharing, rather than, you know, endless closets full of clothes, you don't use you have to structured clothing, rental and returns and stuff like that business is taking too long to really expand. But it's based on kind of architectural and sustainable design expertise. And that kind of led to like expertise and like, like computational design basically, is if you want to celebrate this, you got to kind of compute it. And that gave the background for Treasury which I'll which I'll share with you in just one second. Maybe Shawn, you can introduce yourself.

Shawnee Foster 1:56

Yeah, so my background is more kind of in digital marketing, I was working in the E commerce space doing some fashion. Then I went, you know, out on my own and did some freelancing, did some kind of b2b Software as a Service and consulting, were like Salesforce consulting firms. So I did that for about two years. And then now I'm, I'm working with Treasury, me and John connected over Twitter of all places. And now I'm Director of Sales and Marketing and Treasury.

Will Jarvis 2:29

That's great. All the best things come from Twitter, I found at least Nbd people.

John Manoocheri 2:35

So quick, background Treasury mean, basically, I started a podcast, I started podcasts about essentially spatial technology, right how, broadly speaking, computational design and competition, communist competition architecture and computational design, with the broad relevance of those things. And, and then as that was progressing, Epic Games, which makes unreal NGO, which is a increasingly powerful design tool for the spatial design domain, so I'm sponsoring it. And then I kind of think it was thinking broader and broader, right, what conversations is spatial computational design part of, and I just basically was speaking to a guy called Matt ball, right, who's become a very prominent, kind of reliable commentator on the so called Metaverse about how that's going to work, right? So if you want to build a Metaverse, which in our language, just deeply pragmatic, is like any digital spatial environment, you want to build such a thing quickly and populated quickly grabbed a license, lots of digital social models. I said, Well, that's pretty obvious. And I was like, you know, how's that go? And he's like, What do you mean? Well, you can't make these things, right. They're very hard to make. And a lot of the designs that you might want to use are actually owned by people. I mean, you know, real estate is owned monuments people want in their games or experiences are usually owned, and what he processed I might be a little bit theatrical underplaying his insight, but essentially, broadly speaking, people in the metaverse are unaware of the need to licensing content and not I want to explain that cludes Matt, he said he would invest in it. And I was like, well, that, then therefore, maybe someone should create it if it's not already in existence, a way to get licensed spatial content into Metaverse type things. So then I started asking a bunch of my colleagues and friends in like very senior architecture offices, people, I've worked with people that have gone on my podcast people. I'm interested in working with what you think about the idea of all licensing your unused designs, basically into Metaverse applications. And everyone was like, Well, this is great. We've been thinking about that for years. We don't have to do it. You know. So we set up a bunch of fundraising around in roughly October or November of November of last year, when three months had raised a A fair amount of money on a very good valuation from very good investors. Some of that's not public, and we're not ready to make it public yet, but it's been an extremely accelerated ride into like the heart of architectural design technology since then. So that's the background. I'm happy to say before we actually do babbling, but some of the background, I

Will Jarvis 5:24

love that. I love it. I want to dive in a little bit first, you've got an interesting background. So you were an architect originally, is that correct?

John Manoocheri 5:33

Well, okay, so strictly speaking, I have a number of like, like professional like competencies, or, or disciplines that I I've worked on I've my bachelor's degree is in ancient languages, and Indian Studies from Oxford University, I have some training classical music. I have, you know, a lot of training experience and architect, you know, vinyl science and post professional diploma and a lot of experience in architecture. And in the middle there, I could have picked up mythology stuff, and then built a bunch of like competition skills kind of added themselves in the middle there in various ways, almost by you know, it, but almost inevitably, but So those four or five things are areas where I would say I have like definable skills and professional experience from which I work, basically.

Will Jarvis 6:29

Gotcha. And I'll circle back to that. But I'm curious. What does the future look like in terms of the metaverse? You know, Mark talks of Zuckerberg talks about it a lot, you know, will we be spending more time in virtual worlds in the future? You know, how much of that shift do you expect to happen? And over what timescale do you think will be spinning significant amounts of time within three worlds within the metaverse versus kind of in reality, quote, unquote, reality, if that makes sense? Well,

John Manoocheri 6:56

yeah, so So looking kind of careful here, because we're already spending 100% of our time in a 3d world just happens to be the real one, right? So we're very immersed in a world, right, which is 3d. And that's kind of part of the the subtlety here. I mean, the way that we set it up, we have written a framework paper on this white paper, which kind of sets apart the whole technical environment of Treasury and helps clarify what we think people mean by the metaverse, right. And the best way to get into that is to kind of go back to you know, whenever it was late 90s, when the you know, the phrase cyberspace was unfolding. And people said, actually, quite some of the things to the premise of your question, which is, you know, when will be when Will Will we be in cyberspace? When will we do things in cyberspace. And really, what happened was that cyberspace never became a thing that we went to, it just came to us. And rather than becoming one holistic phenomenon, or experience just became a piece of everything we do, right cyberspace that was obviously the internet. And rather than the internet being a place you log on to, there's just a little piece of internet and everything, right. And so what we believe in our you know, our sort of we go to the spatial web thesis is that there is a convergence of technologies of spatial technologies onto the internet enabled economy and society. And essentially, there's gonna be a infrastructural spatial layer on everything, but as internet as it were. And all of that will be what people currently think the metaverse is, but it won't be a place to go because it'll just be there. Right? I mean, that's the quick version of it is that the metadata is gonna be a place that you go to, it'll be something in almost everything that we do, and it'll be so embedded, we won't Gnosis. So that's the list of broad thesis. I mean, there's lots of nuances there, which I can share with you let me know if I should just just carry on give you give you more of that, or if you want to follow up on that question.

Will Jarvis 8:56

Yeah. What does that mean? You know, we've talked about the spatial reality. Does that look more like augmented reality at some level where you know, you'll be walking around, you'll you'll see, like, you know, objects will pop into view. And this will be kind of just integrated in everyday life, kind of like, have you described, the internet has kind of permeated everything in the sense that, you know, I'm on the internet much more than I would like to believe it's not just right here with you and I, the three of us are talking. It's also when I walk outside and walk my dog, I'm listening to Spotify. It's kind of constant in some sense.

John Manoocheri 9:29

So with respect, I think the question is somewhat framed in a somewhat shallow way. And I think in terms of the history of not just technology that is recrimination, we can kind of unpack and have a much richer way of addressing that. Right. I think there is a naive concept, right, that has come into general acceptance of the point that's not really taken. It's not even observed to be the case in how we view the world, that there is a very Clear, there is a bright line between what is objective and what is subjective. And in respect of in respect of this issue, right, you know, how we perceive the world? That is problematic, right? And it's actually very easy to problematize that, right? So if I can ask you a question, if somebody looks at a block of print, right on a wall, and they are illiterate, what are they experiencing? There? Right? Well, they're clearly not having any information transfer. It's just time it's just checked. Right? Right. So when you look at a block of information on the wall, what is happening in distinction? Because clearly, there's some information unfolding that if that information is about the environment you're in, let's say there's a description of a painting, right? To what extent are we interacting with the physical world in an objective sense? or to what extent are we interacting with an information layer on top of the world? Alright, what I'm getting at here is that since the beginning of time, we have had a variable level of emissivity in the world around us, depending on a variety of interface dynamics information, like saying, like you turn the lights in the room, right? That is different environment than the one with the lights on. Right. But physically, it's the same thing. The information transfer is very different, the experience and the and the cognitive and framing of it is very different. And so it's not difficult to say that it's just not true, that we aren't creating layers of meaning and emotion in the world around us without any technical overlay. Right. So I think what we've done right in our spatial web thesis, to really clear this stuff out and say, Look, you want to just understand and put it in a truly historical context. And like, you know, neurobiological cognitive context, what's happening with the metaverse, you need to separate these two things out from the conversation of what you were describing, you know, where we're going to end up in terms of these, you know, these virtual realities, what are called technical emissivity and narrative emissivity, right. And so if you go back to the time of cave painting, so whatever it is 100,000 years ago, what was going on with the painting on the walls? Right, they clearly had meaning, right? And presumably, they were relatively important, right? They had some power. And one might say that meaning or that power is a is a kind of emissivity. And I would like I like to imagine that these were the equivalent of the movies, right? I mean, maybe that's absurd, but just follow me here. Because it makes it clearer. People could sit there with a flyer fire flickering, and tell stories or just have you know, take drugs or whatever they would do, and have an immersive experience now, narratively, right this is why they follow me this Imagine let's assume that that was the equivalent of a movie with a massive payoff and plot and just incredibly gripping scene.

How technically immersive is that, but zero I mean in any in any in any respects is the very, very lowest possible limit of technical emissivity, nothing is being attached to your body, you know, the technical technological engagement, the you know, the, the amount of training you might require is essentially zero. But let's assume culturally, the narrative emissivity is extreme. Now, if you take those two axes, what we call the axes of emissivity, what happens is that you can actually map you can see it like a trend line, trend lines or evolutionary lines or emissivity across almost all human phenomena. And what you discover is that if you want to use the word matters as a kind of as a way of describing a way, a way, some some idea that we discovered a new realm within this devotee is definitely wrong. Right? Because from cave paintings to, you know, you know, drawings in a in a, in a book, to novels to movies, narrative emissivity has been growing the idea that we are escaping from the world when we read them not pathetically misguided, we obviously do we do what's called escapism, right? So the idea that somehow just a VR goggles set is like some breakthrough or some horrible new new idea of escapism is obviously wrong, right? We do holily isolating things we go we have we go we listened to kg in the bath listening ears with with smelly candles Is that is that narcissistic, you know, solipsistic hiding from the world. I mean, why is that more so than putting into your goggles and making technical emissivities? So red herring, right. And that's one of the reason why Facebook is failing. Because if you go into horizon worlds, right, their main platform so Oculus is the is the sort of operational platform for VR. And horizon was their own environment that they that they are using the Oculus technical platform to kind of promulgate so that is the alternative to social media or whatever the case is. The narrative emissivity of that is f*****g lane, right. It's just non existent this anti anti immersive it's like who are these people? What am I doing this is pathetic want to go. And so if you don't understand that distinction the emissivity has been, you know, the nature of the human cognitive experience since the beginning of time since the beginning of the of anything that looks like a nonhuman mind, you won't have anything to say usefully about the metaphysics. Oh, we shouldn't wear, you know, VR goggles, because Oh, that's so solipsistic, or, which is wrong, because we've been reading novels for years. Or it's so you know, s**t. Yeah. Because it's s**t because there's no narrative, right? So when you when you understand that, like the nature of technical narrative in a city, what it reinforces the general idea that we're having, we're going to have this distributed layer of spatial technology, the spatial web, as we call it, with very different dynamics of narrative and technical emissivity, but it's going to be very profound. I'll give you example, the breakthrough, right, the given example that we have, and we've absorbed without thinking about it, of spatial tech, and the beginning of the metaverse is the universality of mapping, digital mapping, right, because a digital map, the way it's working right now is no one makes mapping products, they basically license a small piece of a mapping product infrastructural quality mapping product and put it in their app, or whatever it may be. Almost everything has some mapping piece in it. And it's infrastructure technology that is embedded to the bro small fee that goes from tons and tons of products was building mapping s**t and more as Google Map box, this is very feasible to build that stuff. And then distributed as infrastructure. There's a small piece of map and it now maps like digital maps, a very poor reloadable technical emissivity, you know, you're manipulating some form factor to interpret a Mac. But here's the thing, it is narratively immersive, the way we use it, because you're in it, you're in a virtual space, right, as a virtual entity just happen to your your pin. Right? What's happening is that, you know, if you just open them up, and your honor, the narrative is innocent innocent emissivity is almost zero. If you tell me awesome, I have to tell you where to get where you're going or need to go, that suddenly emissivities a bit more, I got to turn left here and you can't forget to turn left, you got to be immersive and immerse enough narratively, to follow the story of your journey. Right. And here's the thing, imagine that you're trying to get hospital because he was having a baby or you know, you've broken your leg or whatever it is. But narrative, MSF is something extremely high, incredibly high. It's a top narrative and your life. How the f**k do I get to hospital? Technically emissivities still low. Right. So the point is, there's a direct through line from if you follow the way I've presented it and totally anachronistic terms. cave painting is movies, where the technical emissivity is essentially zero. But now as emissivity is high to Google Maps, where if you use it for emergency navigation purposes, it's narratively extremely rich, and technically, just a little bit above a cave painting, right. So that is the correct way to see the metal. So it's not to get lost in Oh, well, one of these technically immersive things not working for us or working for snipe, because that's just somebody with money, shilling it at you by my platform engaged in my platform. So so it should be in this new, technically immersive thing. F*****g cares doesn't make a difference doesn't matter, right? It's just somebody's saying things to you. What we need to decide as a society is if we have new, technically technical immersion arenas. And so VR is one of those AR is another of those. Firstly, are they useful to us in any way? So if they're useful to us, one of the conventional most profound ways that human beings generate and engage with value is new narratives. What does it mean for us? Pocomoke? Goes new narrative, right? How can we go, it's very interesting, because Pokemon Go is a good example of technically immersive stuff that is technically immersive to have a little beast running around, you know, in a kind of photo real representation in a geolocate, you know, in a in a real environment that you are where you are, and you can interact with it spatially that is quite profound, very profound, technically. And it's quite profound, like, you know, as a sort of experience, technically, by means that it's magical pigment AR is magically technologies, hyper technology that everyone now has. And when you experience it, it's pretty cool. But narratively, what they've created is an interesting game, right? That's the breakthrough. That's the parallel breakthrough in this technology. And so I'd say, I'm going to avoid the red herring and saying, Are we are we not going to go down the road of like, you know, deep immersion in VR type meta versus these highly encapsulated technical environments? Because, obviously, we know sorry, the writing's on the wall, for matter. The narratives are shifts. What I mean by narratives, is the sense of meaning making that they offer and never know what's going to interact with them. So that's needs to needs to be corrected. So the question needs to be, are we do we have form factors that can generate narratives? And the answer is yes. Now if you ask me that question.

Will Jarvis 19:53

What are those four factors look like? If that makes sense?

John Manoocheri 19:57

I think that it's rare. Literally straightforward, right? And this is the history of like, technology as hardware as devices is pretty good at this as the if the form factors aren't very integrated to our biomechanics, and our general like interaction dynamics, they probably won't take off, right. And so what you see in the world of devices is things that are just very easy to use, right? They're very, very simple in their form, very simple in their, in their interfaces and affordances. Because they map to our biome mechanics. And it wasn't biomechanics. I mean, like, the whole, the whole totality of like, biological interaction dynamics. And so the biomechanics of a VR headsets are disastrous for all sorts of reasons, even if you make it ergonomic. I mean, it just isn't how we see the world, right? And so what I would say is that form factors that have an augmentative, or a facilitative, or it doesn't have some other way, integrated nature, are likely to be the ones that succeed. Now, I'm not an expert in this stuff. But I have spent time looking at what what form factors succeed and how they persist. And they're ones that are very native to our, you know, our sort of genetically given and frozen biomechanics. And so I don't think it's a surprise that what Apple seems to be launching what is committing a lot of money to is not something like the Oculus headset, which is incredibly antagonistic toward biomechanics. And what is a pipeline? It's a kind of mean, like social dynamics occasioned by our biology as well, like, can you see another person with your eyes, we talked to them, right. And the idea that you have a screen on your VR set with your eyes in it is a horrifying, simulacrum of that electric don't think will work, like I signalling, and otherwise body signaling and like no precise muscle dynamics, signaling, probably high to avoid it. So if you encumber the face, the as a biomechanical dimension of human interaction, human social engagement is probably a bit broken. So there's all sorts of reasons why, you know, full on headset, as I like to work on Apple's approach, which appears to be some kind of glasses set seems to be way more likely to take off now. Your Google Glass was in that space, right? I think there's all sorts of reasons why that didn't work. One of the main reasons why I didn't think it was going to work is basically lethal. They were just bits of sharp metal that had no edge to them popping out. And I think all those things will be worked out at some point. But the key point is that I think that form factors that integrate with a biomechanics are likely to be the ones that kick off. And given that what we're talking about as a spatial medium, is Premera. Primarily, it's primarily the visual domain that needs to be fed in some way. So it has to be something that engages with the visual medium, there's all sorts of ways technically that you can do that. They're all a bit dodgy, which is why we ended up endlessly fiddling with these fully immersive, like, micro screens, like VR headsets, sounds was part of the one thing that is very good about the Oculus headset is the way that they fixed or evolved Spatial Sound, we've looked at ways of projecting sound around the ears and so on. But yeah, I think for now, right, since the the technical prognostication of the of the sort that involves, you know, we'll get your contact lenses or retinal implants, I despise that I think that's evil. I think pragmatically, we're going to have some kind of glasses thing. And probably that kind of technology array, we're gradually integrated into advisors and styles of clothing that we don't yet know, that will make it more integrated. Right, something like that.

Will Jarvis 23:40

That makes sense. That makes sense. I want to dig in a little bit and double click on what you guys are working on at Treasury. Can you talk a little bit about that and what you're building and and what you're excited about?

John Manoocheri 23:53

Yeah, so. So I kind of set up a little bit the basic idea that that people that are building digital spatial environments would want to kind of shuffle away from the word Metaverse need digital spatial assets. And what I mean by that is not just any old 3d stuff, is things that are building scale and above and where the key value proposition of the object is its spatial characteristics. Now, one of the very weird things about the world of, of design in general actually in particularly in the specialty areas like 3d design is that there is very poor scientific distinction between things, architecture, scale things, building scale things, nothing else. So one of the reasons why the profession is struggling find it very hard to explain what they do that's different from anyone elses just making stuff. And truth is what architecture we're doing, okay. It's primarily doing is they are engineering, right? Let me give you the formal definition that the profession doesn't really bother with because it's been too lazy. The engineering spatial configuration, right? Spatial configuration is a very specific property that has many sort of sub dimensions and can be described actually, mathematically. So you can write down what's called a circulation diagram to describe how you get around the building. And different circulation diagrams, amazingly, end up with different functions. If you have a circulation diagram that takes you around the perimeter is measure rooms, like in some way, in a kind of like a, like a, like a circular shape around a central room, right around a building, etc. If the circulation diagram only lets you get to the central room, by going through each of the rooms in the kind of perimeter, and then finally, exiting the last room in that little, you know, sneaking loop into the center, that will be called a processional configuration. Right? It's very different just walking into the central room from any room, right. And so what you discover and architects know this, but actually formalize this is one thing to accomplish design is formalizing is that that's one example of spatial configuration. Another example is basically, like how tall the windows are in a room, right? That defines all sorts of things about the room, right? How much you can see outside, which people can see in, were not sure how much light comes in, but where the light goes, and what light goes at what time of day, right? So light is not a piece of special configuration, but it's very profound in in defining how spaces are experiencing. So the point is, is that, in in defining architects correctly, what you discover is that as everything in the real world gets an analog in some digital world, the spatial layer of digital stuff, rather than just any old 3d objects, I believe needs a special character. Because the way that spatial objects are deployed in the in digital or virtual worlds are very different from how objects are deployed, right? When I say objects and things that are that are sub spatial about things that people can manipulate, basically, the size smaller than their body space, things generally speak to things that are larger than their body, and tends to be the case that the font is larger than your what it's significantly larger than your body, it will be something that anchors experience many people at once, right? Unless you're sitting on your own space on your own, right, you may have a thing of your like a cat, or a ball, or a sofa, or a chair or a computer. And you can be perfectly happy on your own with that thing. Right. But once it gets to spatial domain, right, which I mean, essentially buildings down above, or rooms down above, but kind of basically building scale. It don't exchange, you don't sit there with it on your own. Right. And so this is kind of a deeper reason why actually, people haven't really thought this stuff through and why there is this massive gap in the market and people that it's to supply digital spatial assets to people that are creating or building digital spatial environments that don't know the needle as assets. But they do need them do one of the reasons why they didn't know they need them is because actually most of the test or development of any virtual environment, people can go to kind of have been fixated on the on the affordances and the environment and the kind of the scale of what an individual can do, because we haven't had the computer power to create in a very dynamic way. And the second life is kind of interesting. But it's not the same as a massively multiplayer role playing game where there's enormous numbers of interaction dynamics and agents and things like that computational power, particularly synchronous interaction between many agents with many different kinds of interactions and very rich environments as long as possible. Now that's possible, we actually have to think about the environments because just haven't experienced this just for a person in a digital environment and then just not thinking about the space now we have to think properly in spatial terms. And and so that's one of the reasons why this is a good thing. Because when thinking about the girl was a marketplace was really stuff. Well, it was was done buildings in a marketplace of three stuff that you'll put orcs and sofas and cat and you know, digital computers. And it's definitely isn't the case, the software stack. The competency, the science side is all different, right? And that's where I think we have an opportunity, which is basically this is all a background. So technically what we're doing. Treasury is a what we call a licensing toolset to ensure that people that have created worthwhile digital spatial assets, environments, themes can put their identity on them and define their relationship to them as owners or part creators or whatever. A syndication pipeline, right, I'll explain what syndication is in one second, but basically, it's like a kind of technical broker. And if we're lucky enough to get big enough, an ecosystem around that. So it's helping creators of owners of digital spatial assets like buildings and places and imagine the environments put immutably associate their identity with those things. A syndication pipeline, which is basically what's sitting underneath marketplaces is a market space. So anyone that has an environment where these things can be bought or traded or presented can get them through tracks at Treasury syndication system, an ecosystem ideally have all sorts of partners, software partners, data partners, legal partners, creative partners around that, to make it good And the point of it is to in our, you know, sort of corporate language to to elevate creators and enable builders for digital spatial environments and creative digital spatial assets. And it might sound like it's just a microbrewery. The big idea, right, the bigger idea of what it's just as facilitating with distribution is actually to do to help evolve the conversation that we sort of started, which is what is all this for? Right? What are we really doing? What kind of emissivity are we seeking? Right? If we have any contribution here, that's beyond just the technical, it is making sure that a massive, massive hyperbolic increase in distribution of, of high definition, well protected digital spatial assets contributes to, for example, massively more efficient and benign and sustainable and socially inclusive urban environments, which I think it's definitely possible. It's what I've been working on for a long time. But also just like thinking through what emissivity is, right? What you know, like, for example, one of the use cases for these kinds of things is health. Right? We did we go through, you know, run renaissance and you know, the meaning the application of psychedelic drugs and for people who are resistant to actually taking drugs, that their gateway your the extent to which they will be happy to engage as psychedelic spiritual experiences, which is one of the most profound contributions that all of this immersive stuff is going to contribute, this newly immersive stuff is going to contribute. So rethink the pattern of what we call an infrastructural layer for asset licensing and distribution. And then, you know, all sorts of you know, the two way relationships between creators and builders, is a great infrastructural contribution, what that leads to what we would like it to lead to, is, you know, what we'd like to take all this stuff, and we're lucky enough to, you know, do not f**k up straight away, basically.

Will Jarvis 31:48

I love that. I love that. I've got a question about progress. And I've got a question about progress and architecture, and what you're building at Treasury. There's a great one of my favorite conspiracy theories is that it's called Winter Portaria. And it asked this question, why has all art gotten ugly over time? And, you know, it's got is this like, conspiracy of the elites or something? What's going on? And I like conspiracies, because oftentimes, most of the time conspiracies are not true. But the conspiracy question can be quite illustrative. So you know, JFK, the, you know, the idea of the mob killed him. The mob didn't kill JFK. But it does give you this sense that well, the Bob had a lot of influence in politics at that time, a lot more than what we have now. So I guess my question here is, as a novice, as someone who is not art inclined, or architecture client at all, I seem to notice that over time, it almost seems like architecture has gotten uglier over time, and a very robust way. It seems like we used to build beautiful things. And now we don't, it's all it seems to be quite inhuman most of the time. Is that a fair point? Am I off base there? Is there something going on

John Manoocheri 33:01

Shani? Shawnee, I invite you to jump onto the land, please.

Shawnee Foster 33:07

But personally, I mean, I obviously don't have as much of a background in architecture as John does. But I personally find those things to be a, I guess, a very online take. And something that I also, you know, when you see them online, you subscribe to it, because they show you, you know, they show you one picture of a beautiful thing that was built in, you know, 18 or whatever. And then they show you another thing that's like it, it's like one is like this huge government funded, you know, like, churches are probably not church, obviously, but a government funded like hospital or something where there was a reason for them to put the time and money and effort into making it look good. And ones like a post office in Utah, like, and so when you're, when you're creating those, you know, putting those two things together, of course, it looks like we're not creating beautiful things anymore. But I also think that we have to understand that a, it really just depends on the reason why we're creating something. And if you walk around, and especially in bigger cities, you could tell that there are still some really, really interesting pieces of architecture that have been built recently. It's just I think, you know, people as people say, beauty is in the eye of the beholder. And if you're looking for beauty, and you're looking for interesting contributions that are more recent than then you will see it. And so that's kind of kind of where I sit on that question. I personally, don't I like I said, I used to kind of buy into it more when it was just something that you see online where we used to do this, and now it's now it's this, but I have been trying to like spend more time and effort, you know, especially since joining treasury, noticing architecture and looking into you know, what we're doing today, and I think there are really a ton of very interesting things being built. Also on the same note, I think, you know, there is I saw this thing where it was like, oh, like, where's today's Mozart or whatever, and I think we do have to put some thought into how mediums change over time. And the type of person that has the, like passion and ability to create something, as you know, we get the technology progresses, they might just choose to create something in a different medium. And, you know, on the probably where that comes from is just how you grew up and what foundation you have is on like a neurological level, you know, when you're growing up, and you know, way back that or whatever, you know, it was, oh, all I have to do day in and day out is like paint or write novels or real play piano. But now we just have so many different mediums that people can, you know, express their creativity through. And so I think taking one medium and saying, Oh, we don't do that anymore. Okay, well, you can't just compare medium to medium when you know, our entire culture and things that we're interested in technological progress. And all of that kind of just changes how people interact with art and beauty. Great, John.

John Manoocheri 36:01

So, yeah, I mean, it's a tricky one. I mean, I will give you a sort of three bites of this, right? I'll give you an argument from cognition, as I call it, argument from naturalism and some reflections on power, right? I mean, the argument I think is actually most useful here is the argument for current condition and and so, the way to approach this is by asking yourself, what is beauty right, if you decompose beauty right, essentially, it has a couple of characteristics, which which immediately when you expose them, makes you realize what a subtle and slightly sneaky concept is. So we say what is beauty? Right? We can define at least two characteristics, right? This aspirational? Right, and it is somewhat hard to obtain or attain. Right. And so I think you probably could go deeper into human condition, Arkansas, well, why is why is it those things? Why is it desirable? And why is it unattainable? What was it represented? Some people level, whatever genetic argument make up some s**t that the point is that that is happening, it is represented. And I will say that, at many previous points in human history, a certain a certain aesthetic, right? has been aspirational, in part because it's unattainable. It's desirable. But it's not beautiful. Just because it's desirable, is beautiful, because it's desirable. And it's somewhat unattainable, right? And so, what happens is that as society becomes more and more mechanized, and more and more things are possible, and more and more people become beautiful, and more and more buildings, beautiful buildings become possible. I think what happens is that the human psyche ends up shifting its target for what is beautiful in the sense that it is attractive in some way, at least in some way and unobtainable. Right. And so we are getting this highly contorted psychic findings and what is beautiful because things that historically may have been attractive and unattainable, and that will try to unattainable. And I'll tell you, you see how this works, right? It's something that's attractive and very attainable. Immediate is not very beautiful, right? If something's just standard becomes boring, even unattractive. So you realize that there's hidden into that partial definition of beauty, the seeds of perversity, if we get ourselves in a situation where things that historically been beautiful, are so standard, they become undesirable, we end up in a situation where we end up eroding an aesthetic characteristic of what is desirable, simply to get things that are under unattainable, right. And so we may end up in a situation where we have beautiful things that are extremely unaesthetic. Right? If you look at the Balenciaga collection that came out recently, it's f*****g hideous, but apparently is beautiful. Right? Right, because it's unattainable. And it's desirable for all sorts of complex reason. Right? So that argument is an argument I would say from cognition, which is that if you study how cognition generally perceives and appreciate beauty as at least these two things, for me, that is desirable and attainable, you can see that my very nature of the ontology of these things, we're going to end up in a situation if we can create more beautiful things, they will shift our definition of beauty to things that ultimately might be unaesthetic. Right? So it's a very different argument than one that presented because what it doesn't do is get into this, which is the argument from naturalism, which is one that all the f*****g very online people use, and basically all the mid wit, like thinkers that call themselves trads, or, you know, kind of aesthetic theorists because there isn't argument right? And there was a seed of truth and an argument that there is something objective about beauty, right? So you have to you have to get to but you have to leave aside for a second because I don't I'm not trying to push you to organize together. The argument from cognition about how we get to unaesthetic beauty. I think there's all sorts of reasons why I'd like to do that as a seed of truth in the idea that there's something objective in the beautiful. I think there's a reason why we might move away from that, let's separate the argument from cognition, it can do with power, or it can be could be to do with it could be to do with industrialization, it can deal with all sorts of things. All right. And I think that, you know, you can create a simplistic and as a mostly wrong, we're not entirely wrong argument for why we ended up with unaesthetic beautiful things, we see my point, because we'd get bored, and we just keep trying to stop and training people set up fashions, right. So should the argument is not very well developed. But there's some seed of truth to it. And the reason why I say that argument to you want to share it and present it in an outline form is because I didn't assess you probably something in it. I do think the symmetry, for example, is one of things we'll go back to. So what I think is persistent in this argument for beauty from naturalism, is that we will end up back in certain mechanical reproduction systems that we call beauty. I think symmetry is an example of beauty that persists in all things right, even the Balenciaga collection has a remarkable amount of symmetry in it, right? So the reason I'm saying that is partly just because they're dealing with zip Scruton there that's worth investigating. But also this because if you have the argument from naturalism for beauty and architecture, or Metaverse objects, what you actually are revealing is the fact that you have lost the power. That's what I said, after an argument in condition with naturalism, I would have reflections on power, because the argument about beautiful naturalism isn't that somebody took over the power and made things ugly. But what you're revealing by saying that is you don't have that power. Right, right. And so the way I would pump this conversation is who deserves the power to say, what is beautiful? That definitely isn't f*****g people with trads in that Twitter handle, all right. And so and so what I would say is, I don't is a whole other kettle of fish, I don't think democratically determining in some beauty, some some beauty in some kind of like, you know, Tally system will define Well, what beauty is, but I would say that we cannot address this carefully without seeing how power dynamics are playing underneath. And the reason why I'm pretty negative about the argument from naturalism is because I think it's quite stupid, as most of the people who deploy it are actually saying something else. They are essentially saying, I and people like me want the power back and think we once had, right. And so in Treasury's case, thankfully, we don't have to have these conversations, right. What we want to do is to essentially say these things are useful, right? And it may or may not be beautiful to have useful things in the things that are useful in the in the metaverse individual spatial environs, may or may not be inherently beautiful, right? Not every building was useful is beautiful, right? Not every space that is psychologically effective is inherent, beautiful is all sorts of things that go beyond beauty, per se. You want to focus on beauty, and focus on beauty, rather than one of the great things about the internet and digital technology, which I adore, is that people can create the world that they want to create. No, it's no, it's preventing you if you I have to think that most like architectural modernism is incredibly beautiful for all sorts of reasons. Right? That includes some like brutalism, but not all brutalism. And I don't bother saying that, because you end up stuck in these pathetic conversations that aren't well founded. I'm like, Well, I'm gonna go look at those I like or design the bull's eye like, and the same is true for the metaverse and digital environments. Right. So that is the actual answer, you will you don't need to ask the question, because no one's gonna get to control it.

Will Jarvis 43:40

That's great. That's great. I really like that. It's interesting, though, because you highlighted something I haven't thought about very much, it seems like art is very much about power. At some level, at the end of the day.

John Manoocheri 43:51

I've said the debating would be very much about power. And what really is actually about I think is much more subtle than that. You know, because I think if you really wanted to find beauty, you got to go to how cognition works, how reproducing objects, but a beautiful leads to, you know, a kind of fulfilling prophecy of anesthetic, beautiful things. I would I would say that there, you probably can excavate some kind of objectivity around. Let's see, you know, starting with, let's say symmetry, probably other things, too. I don't think the golden mean is example of that. But I do think symmetry is is an example of it. That sort of seeds, a certain kind of thing. But I wouldn't take that very far. I would say that there's certain commonalities there. I think the key the key question is, is that if you really want to ask because this is why I said, argue as much as an argument from from condition, and then reflections on power, is that any theory on power is about power itself. You see, I didn't fall for the trap. So if you're getting into the conversation with us about like, well, if I was to take that bait, I will position myself in a power debate. I have no interest in writing the best way to engage in that conversation to say that there are multipolar universes or a plural universe is out there. One of the many, many great benefits of the internet, in particular spatial digital environments is that we don't have to have this monopole universe, which is what answers that question that doesn't need to be answered that question. Right? Right. And I'm very happy to sidestep it with that very specific caveat. If you talk about beauty in terms of power, you'll end up trying to position yourself in some dynamic around a specific kind of power. I don't need to try she doesn't want to, I think the great beauty of the internet, is it diffuses many of those kinds of conversations, just speak with people you want. If you do no harm, lovely, wonderful, what a what a what a great universe, we live in where plurality exists.

Will Jarvis 45:41

And we can, yes, yes. And we don't have to worry about these questions as much, which is very nice, very nice. I'm curious, I

John Manoocheri 45:51

would say, just completely undercut by a little bits, I do think that people have a lot of power. Right? So this is a pretty straightforward, you know, response, people who already have a lot of power should be more aesthetic, or should be more discursive about their aesthetic choices, right on Facebook puts such hideous facial environments to launch metta in Paris, in France or in Spain? Well, totally right, they get punished for that. If they said, we have made an aesthetic choice, so and so forth, that would be interesting. That will be I think, very, very, very beautiful. And it'd be very, very, very generative, and very meaningful. And we would love to participate in that, like, what are the beautiful spaces we know they want to create, but then it becomes about power itself. Right? I mean, what are the reasons why we know Facebook has too much power is because of this issue, the aesthetic choices they're making are inflicted on f*****g billions of people. So you can invert the thing and say, Okay, let's start with the power, right? And say, is the power well distributed? Does that lead to a good outcome in terms of beauty? Well, almost like not given diverse perspectives, but also, certainly not because of, definitely not, because if people with the power have no taste, then we're guaranteed to have bad poor spatial aesthetics.

Will Jarvis 47:11

And wait up in a tough spot, we appear to have landed at the end of the day here. I'm curious, I want to run all the way back to the beginning. And I asked you about your your professional career and how you got here. I do think it's interesting, you know, you're clearly a super talented person, both of you are. But you know, you've worked in architecture, you're not working on physical buildings anymore, you're working in the digital world? Is it your sense that it has, and most people have, like, escaped onto the internet, at some level, our built environment does not seem to change as much as it used to, you know, pre 1970 not clear exactly what happened there? Is it your sense that it has gotten harder to change things in the real world? And that's why, you know, so much of our narrow cone of progress has been focused on, you know, bits not atoms, or is something else going on? It's just higher leverage to work in digital spaces, if that makes sense?

John Manoocheri 48:09

Well, so I had to look unreal, but it's in the last minute still exists, right? And I want that to accelerate. And the key thing is that, I mean, definitely one reason why I'm working on this is because, I mean, technology is, it's not just inherently a faster thing, or, you know, just a fast moving thing than that than the built world is that it is exhibiting exponential and synergistic properties where we might that is that there are exponential properties of individual technologies as they get better and better and better. Let's say for example, you know, energy efficiency of compute, or, you know, cost of memory, all these things are kind of like, you know, they're they're specific domains that have exponential like, returns. But then if you have a synergistic property, when they start combining, you have this like, you know, explosion of potential. So there are all sorts of reasons, just technically, about this moment, not necessarily inherently, but about this moment about technology, because they're, obviously technology can also plateau, that it is moving forward very quickly, what it would say is that, to get deeper into the question about what happened at someone's whatever, I do think the built environment is inherently slowly, right. I mean, there's lots of reasons for it. One of the obvious reasons, right, it's just heavy and big stuff, right? Making buildings. Fixing buildings is just as different from sitting and fiddling with code, right? If a if a piece of a building falls off, right, the plumbing of building falls off, you can't, you know, boot up VS code, perhaps batching it sitting at your computer with a nice fast internet connection, you've got to, you know, ring somebody who with the right tools, and if they come with the wrong tools, they gotta go back again, the phone line is broken, that you know, you can't even read them, like the real world has these constraints. But actually, that's not very interested. That's not the real reason why the built environment changes slowly the real, one real reason why the built environment changes slowly. Is very fast and no one talks about this, which is that in any other domain other than the built environment, right But the iteration cycle of improvement or of testing, and the cost of that iteration cycle is low in the competition domain, it's almost zero, right? One of the reasons why there's so much explosion and why there's so much acceleration is because to improve things is increasing and to invent new things, and increasingly, zero marginal cost exercise, right? So you have zero marginal cost technology, and you kind of get to effectively zero marginal cost capital, which is kind of where venture capital sits in the capital stack, almost zero marginal cost in the total cost of capital, then you have zero marginal cost innovation, basically, right? There's some technical domain that is never in, it's not possible in the case in the spatial domain, not just because it's hard, as I described, but because it's massively risky. There is no way to innovate with a city without immediately killing lots of people, right? There is a nonzero cost innovation, the innovation cycle in the spatial environment, right? So it isn't just that it's inherently slow, is that it's massively risky, if you cannot unpack and unpack and real people in their lives for minutes, or there's no testing place where you can test an energy system and the size of the city, right, you can't test a waste management system the size of a city, you can't you know, and so what that means is, when you implement something, you, you kind of have to commit to it working first time, which is why nuclear power plants take 20 years to develop, right? Even in Finland, of all places. One of the reasons why you get power is not the panacea people think it is because it just takes so long to implement, because you cannot put it into a fast innovation cycle. So that is the deeper issue, right? Technology move forward fast food, we're having a moment where it will converging. And this is exponential dynamics. The built world is slow, because it's f*****g lumpy and heavy and annoying. It doesn't does, you know, the way I say it's space does not scale, speed to space, you can't find a way to make it more space and heavily more efficient, just annoying. But then the real issue is that the innovation cycle for the real world cannot be put into a kind of zero cost loop. Every every version of innovation in the real world is expensive in in human terms. All right. So that comes back to the kind of the institutional dynamic around these things, which is what happened in 70s? Well, you know, I do think institutional environments in which you know, spatial phenomena, evolve have changed, right? So there's less commitment to infrastructure investment, infrastructure development infrastructure as a point of national pride, or civic pride. I don't think that's a problem. But it also do think that world just gets full up. Right? I mean, the infrastructure explosion in the post war period was the first and only an ever like, infrastructure exposure for a modern society. Right? They never were, you know, like, you know, cars for everybody, or roads for everybody and sit till that, right. So it's not just that we got bored of it, but we did it once. And kind of know, all that stuff is in the way, right? The the infrastructural inertia, and institutional inertia things we've done at that scale, that's part of this innovation. So I promise, you just can't get rid of the stuff that's there to try new things, right. You can't strip away all the cars and go, we'll just try Hyperloop for a few years. That's the one good back to cars, right. And so it's not just like the size shifting institutional framing from like, a more sort of left wing or state centric infrastructure investment model to market centric and technical and kind of entrepreneurial and innovation types is just that the stuff we create an infrastructure is there and we can't get rid of it. For better or for worse, what I would say is that this and this is to close the loop. Why competition design is interesting is that is the way in which you can, you could fix that issue of not being able to run innovation iterations at scale, right is getting to be the case that we can run modeling at city scale, certainly a building scale, using computers very effectively. You right now, right? It's one of my heroes, as well Clifton harness two sides of the comfortable test at five years ago, and really is very simple, right? He isn't trying to create like super automated, like floorplan generators, or thing and all that it just says, look, I can optimize some variables for you, as a real estate developer, how many parking spaces go into this slot? What kinds of units can fit into that slot without wasting too much space? Like very defined question. So it's not an all singing all dancing AI to generate buildings. It's a very specific problem solving tool that grows its capabilities. But it's very pragmatic. And that is the track we're on. We are using computers to solve more and more and more of the problems that we have and don't understand very well and can't innovate with or iterate or test or explore without computers. And that is a good thing to see. It's not quite the same as generative design, but it is at scale problem solving. And so there's a long winded way of saying, I think there are good, real good where there was the objective reasons why it's very hard to innovate in the built environment. And computers are starting to help them one thing I would also say right and this is one final commentary on this because I don't want to avoid this and that slightly too technical framing, right, from what you told me before the podcast started, you might get this. There's one other phenomenon in innovation and evolution developed environment that is very, very problematic. And definitely things should change. But people aren't really focusing on it. And it's consolidation of ownership of land. Right, right. I mean, there is a phenomenon that has happened through history to the extent that no one ever thinks about it, it's basically the massive distortion that sits at the heart of conventional economics both left and right, that whoever's there first somehow seems to own all the land. Right. And that's bad. And this is very bad, right? Because if there isn't enough incentive, for the tenants, as it were, horrific language of the land of the city, to to be rewarded for a change, because the people that own the land already have everything they want, which is pretty much the case for most of the modern cities of the world, then things are going to change faster, right? So the incentive structure associated with land ownership, for accelerating change is a whole different thing that the risk cycle of your built environment or whatever it may be, that is giant, probably, I don't want to ignore that. Because I do think it's probably the biggest political problem of any era, including ours. For some reason, it just isn't taking that seriously think that you're taking it seriously. What I would say is that the correct approach in it in my view, is not to demonize the owners because that was never what they own it and and the power structures are in our ensuring that land ownership premise is to demonstrate, but it is not efficient for them in any way to do that. It's not just a justice argument. It's an efficiency argument, efficiency of capital, persons who have value of rich do whatever they claim that they're seeking, as landowners. And that's a lot of conversation.

Will Jarvis 56:52

That's very wise, it seems very important to focus on efficiency and not like, you know, Justice reasons, when you're when you're pursuing these these ends. This is this is very good advice. John shotty. I've really enjoyed this conversation. I've learned a time today. Where can people find you? Where should we send them if they're interested in Treasury?

John Manoocheri 57:12

So Treasury dot space, right, is the website that we are launching in the near future? And all the relevant things will be linked on there? Yeah, I mean, that's the main thing. I mean, we have an office in San Francisco and will be visible, you know, we haven't you know, sort of weekly events in our office there will be visible, upcoming new tech, you know, tech week. And gradually, we're coming out of stealth, doing more and more kind of demos of the of the technology stack, the you know, registry system for assets, the discovery system for assets showing we've got a bunch of tools that we're developing. So people are curious, go to the website, and and click and connect in some way.

Will Jarvis 57:56

Awesome. I'll put the link down the show notes. Thanks, folks. Thanks well. Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck brief and brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work and music at Donovan dorrance.com

Transcribed by https://otter.ai

https://worldsfair.co/ We also discuss how to change culture, break stagnation, and build a better future. 

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Okay, how are you doing this afternoon?

Cam Wiese 0:43

I'm great. This is rad. This is a cool setup. It's cool. Thank you. Well, first haven't been in the comments before and then two, three, cool. Podcast. This fashion is fantastic. I'm all about it

Unknown Speaker 0:53

IRL. You know, I love it. I love it. Well, Kim, thanks so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Cam Wiese 1:03

Yeah. So British German, we see and are always interesting. Um, so just like, obsessed with this one single idea, this one single project, which is the revival in the reimagining of the World's Fair. And we used to host these grand events that captured the nation or captured the world's imagination, through story and experience. And we haven't had one haven't had a great one since 64. And I think it's a shame. And we need to culture to regain this sort of hope for the future. And remember, kind of the sort of great things we're capable of in a World's Fair, might just demonstrate that.

Unknown Speaker 1:38

I love that. Can you talk about a little bit about the history of the World's Fair what it is what it was? And you know, why it went away? Or do you have any sense of why it went away?

Cam Wiese 1:45

Yeah. The why it went away is like the entrance like the most kind of interesting question. Because you still have these events, like known as like the World Expo, I should before I before I go into the history, let me start with kind of the what the World's Fair it is. Because a lot of people aren't aren't familiar, you have the world's cup, and you had the Olympics, which are mega events that people know today. And the World's Fair is a type of mega event. Physical event ran for often six plus months on hundreds, if not 1000s of acres of land. Gotcha. And served as a way to kind of showcase the latest and greatest in technology and innovation ideas vehicle. And they are in you know, in some of them were used as economic development engines for for cities like Spokane, Washington, right, New Orleans. San Antonio, right. But there's this class of fares that I consider like the great fares. Yeah. So you have the ones that really were focused not on economic development, but on the revitalization, and kind of the sort of vision for something bigger for a specific city. Gotcha. Particularly, you know, 1915, here in San Francisco, was built as a way to kind of get the city back up and running after the great fire Gotcha. In Chicago in 1933, you had a Century of Progress exposition, which was kind of this this light amidst the darkness of the Great Depression. And I can go on and on, but we had these events, and they ran really, again, up until the 60s, and they were some in the 70s. Some of the 80s. Last one in the US was in 1984. And a lot of people asked, like, what happened to these, like, why don't we run these anymore? Yeah. And they're really kind of three, three things. One is the competition from Disney's Epcot. Epcot opened in 82. And it was designed originally designed to be a city, which is a whole nother topic. I'm having fun. But the the one that they ended up kind of creating was intended to be a permanent world's very sad that the country showcase. And yes, the pavilions, and that was kind of the thing that people went to if they want to see the future. Yep. But you also had the kind of contrasting economic development engine right, big events with the Olympics and the World's Fair in 84. Got it. So you had Peter Guber off who ran the Olympics in Los Angeles? He could have he could have came in, and you want to go into this? Okay. I, if you can pull me out, if you will. Okay. I'm happy to. Yeah. Peter, rube Roth, who was hired to run the Los Angeles Olympics committee. Yeah. And at the time, everyone was like the Olympics are done. Yeah. Right. The previous ones hadn't done well. Nation national credit, flex, and repeat who brought that being a savvy businessman rather than a politician or a bureaucrat came in and said, you know, this thing just needs a new business model. Yeah. So instead of, you know, trying to get the city to pay for it, they had entirely privately funded and they did it by selling the broadcasting rights of the dice to, I believe was ABC for three. Only the fact that this was like two three heads A million dollars. And that made the Los Angeles, Los Angeles Olympics like, the most profitable Olympics in history, right. And all that money has continued to fund Los Angeles like sports programming for the last 50 years. Right. And city saw that into like, whoa, the Olympics. Yeah, we want to know exactly, exactly. Because they also had the contrast of the 84 World's Fair in New Orleans, that ended in bankruptcy, there was a lien on the event, like halfway through, there's some organized crime corruption is very, very sketchy sort of set of circumstances, and, you know, then didn't have good marketing back then. So people were like, Oh, this thing isn't gonna isn't going, I'm not gonna go. Yeah, so they ended up like not hitting their numbers, which are also based on faulty fraudulent data. And, and then, you know, the kind of world's fair they're, like, kind of fell off is like Olympics over the fairs. And then the last piece is just like the, you know, there's a lot of talk in new least, tech circles around kind of stagnation and progress. And you know, what the, what the f**k happened in 1971? Yeah, for a thing. And so you had this cultural malaise that I think is is an interesting layer on top. And with all the innovation and all the developments of new technologies being funneled into the world of software, right? There wasn't a lot to showcase right affairs, or at least there would have been, but it required a little bit more imagination, because it wasn't as easy as saying, like, hey, Henry Ford wanted to bring the Model T and set up an assembly line. Right, right. Or, you know, there are countless other examples, but there wasn't as much concrete stuff to show off. Right? And so it just was like a harder lift for people, especially people in cities who weren't, like, on the frontier of technology, if

Unknown Speaker 6:48

you will. Right. That makes sense. That makes sense. I'm curious, what does it take to make one of these events successful

Unknown Speaker 6:54

today, you know, you mentioned like, broadcasting rights powering, you know, the LA Olympics, and, and that leading to a lot of success. We see like a real challenge today in that how do you create something that is self funding? In some sense, that is a mega event. In most the Olympics. Now, it seems like they barely make any money, or they lose a lot of money, especially the cities that put it together? How do you think about making these events kind of successful?

Cam Wiese 7:17

Yeah, I think the Olympics serve as a really good example for this sort of like this problem is people don't think mega events can be profitable, I don't think they can be run efficiently, right. And part of the problem, though, is that like, just to just to kind of sidestep into like a quick tangent on Olympic Olympic Games. Like, the way the Olympics is set up, is you have the International Olympic Committee, which manages all of the like, they're the ones after after LA was successful at four. They're like, You know what, we actually want that money. Guys like Los Angeles gotten at four but no other Olympics, because the IFC was like, Oh, we want this right. So all the sponsorships, all the broadcasting rights, yes, flow up to the IOC. And then the IOC like then has a bidding process for cities. And the way they dole out the bids is pretty much based on like, who gives them the most money who puts on the most extravagant show? And like the incentives are really skewed because the IOC has no vested interest in Rick's continued success of the infrastructure that's put in place for the Olympics. It's like, who's gonna spend the most we don't care what you're gonna do with it after? Right? Like, exactly it if we want to put on a good game. Yeah. And I think there's, there's like things that that we can draw on from the way the Olympics, the problems, the Olympics, to think about how we would do a World's Fair today. Yeah. Would you not want to start with the city? Because you start with a city or immediately pigeonholed to the politics and the budgets? And if you take any money from any tax collection entity, then like, it quickly becomes political and bureaucratic and like, right, doesn't get off the ground. Exactly. We've seen this. There are several attempts since 84. To do a World's Fair, they've all fallen victim to the same issue. The other is, how do we have a legacy plan in place? Yeah, for the site after the fairs hosted? Gotcha. So there's some cool opportunities, there's a lot of this new cities movement that's taking place. And there's a possible how might we use a wheelchair to subsidize the economic or streamline the economic development of one of these new city projects? Or, you know, how to do something with land taxes? Right, exactly. Yeah, can get into? And then, obviously, we have the internet. Yeah, right. We have this incredible, you know, means of distribution and communication that really could unlock all sorts of new opportunities on both the media and V kind of virtual fronts for something like the fair. And so he paved the land, you pair this sort of like, there's also this this other component of this, which is like how do you actually just run the event? Like a, like a business, right? Not like a, you know, economic development project? Yes. And if you do that, you know, you sell the pavilion spaces to companies and they pay for it. You know, you sell tickets, you kind of do all the standard things but like to go get like This isn't the best person but you can put It's like Disneyland Disney where like, you're exceptionally profitable endeavors, right? And like, you know, it can be done. Yes. 10s of millions people go every year, right. And I think like you could do something somewhere for the right just requires like new innovative thinking on the business model. Yes.

Unknown Speaker 10:17

Makes sense makes that. So you just got to be a little bit more creative. And there are some good ways like,

Cam Wiese 10:21

there's no, there's no playbook for this, right? Like I actually there is there's there's an old planning guide for one of the past fairs that kind of outlines the process for how they, how they fund it, how they developed it. And it's like, really fast, because it is very similar time that to the one thing right now, economically, culturally, like geopolitically, like this is what we did, this is what worked, right. And like they set up some principles that I think would be fair organizers, of which there don't appear to be any other than, you know, me. would benefit from learning from that's great. That's

Unknown Speaker 10:54

great. We think it would cost to set up like a modern World's Fair equivalent.

Cam Wiese 10:59

I mean, this is depends on, like, which cost you want to factor in. Yeah, right. If we're talking total cost of development of like, land, land acquisition, taking a greenfield site and like, converting it into something usable roads, water infrastructure, all the buildings like the total, like money in, it's probably, I would compare it to Disneyland Shanghai, which was about a 6 billion $6 billion project. Gotcha. But obviously, like, that is not all, like, cost, right? It's not, it's not all like, you know, money being sunk into a pit, you have the development land, you have some of the buildings that have department infrastructure, etc. So, I know that's, that's kind of what I based on, but like, this is a big project. Yeah. And so obviously, I'd like, you know, I would like to find someone who is big projects like this, to dole out the financial models, but yeah, it's, it's not a it's not a, you know, 100k, you know, do it in the dirt in the Golden Gate Park, sort of sort of thing.

Unknown Speaker 11:55

Exactly. How do you think about bootstrapping, something like this from? Nothing into like, a actual world where

Cam Wiese 12:04

this is the this is? This is the question. Yeah, cuz, you know, the vision is great, you know, end of the decade, like what, like open the gates, but how do you actually get the resource, you need to like, start and then kind of iterate like, it's not the right term, like MVP isn't the right frame to think about this, either. It's like, how do we just it's more about how do how do you build a team that can demonstrate like capacity? Right? It's not about like, is this impossible to do? Like, it's very, not a hard thing. We build real estate projects we build theme parks are the same. So you have people who creatively tell stories with physical spaces, and through films, like there's nothing new about like any of this? Yeah, the challenge is, like, you know, you have to pair the like, the font, you have to find the funders, yes, right. Find the people who have a talk who, like want to see the sort of thing exists in the world, right? And who are willing to be like, you know, what, like, let's take, I'll say, like milestone based bets, yes. to, like, see this thing developed. And so the way I think about it is like, you know, again, in line with demonstrating capacity, it's like, Okay, we have this big thing that we want to do. Right, so what is like, actually, thread here, this three line is actually slightly different. It's, like, the thing that jumping back to the beginning thing that made some of those I mentioned, like, there's certain fares that were really great. Yes. And the thing that made them great, was not their size, not their location, not, not the things that they showed off, necessarily, but they were all focused on creating a feeling for people, it was this feeling of hope, and wonder and awe, make sense. And so that is the thing that's, that separates, like, the fares that people remember nostalgically, and the ones that like people, like don't know about, right, and, and so when I think about this, and how we break it down, just like, ultimately, at the end of the day, like the fare is just like an anchor. Yes, right. The big mega event is an anchor, right? That is communicating and expressing, like, celebrating this feeling, or giving people this feeling just at the largest possible scale. Right? And so to get there, we just have to take that feeling and for how do we deliver that in like, ways today, and then next month, and next year that both like, captures that feeling for people, right? And kind of develops the capacity of the team to like, go execute on larger and larger credit projects, because like, the last thing on this is like, again, all this is doable, but like it requires, like a team that has trust with each other right? And have good relationships and like right, can like work well and you don't go run a five plus billion dollar infrastructure project with like a team that doesn't like working on exactly how do you like but what are the different jumps? Yeah, right. So Exactly, exactly. It's a complicated thing.

Unknown Speaker 14:45

Absolutely. What's the kind of smiles what you're starting with the beginning.

Cam Wiese 14:50

So the, really, the way that we've broken the fare down like that the grand event is based On this framework of hope. And, again, it's an academic framework. But I think it's useful to think about like, you have an order of Hope you have to have three things. You have to have goals. Yeah, stop at the mountain. Where do you want to go? Jeff pathways? How do we go from where we are today? Up the mountain to reach that goal? And three, you have to have agency has like, Do you believe that you have the agency to take the pathway to reach the grid. And so when we think about, like, what is the like, end end of the decade fair look like? It's based on that sort of thing. So we have the pavilions, and these these realms that some folks I did a poster campaign that were released, like art that represents each of these core themes. And those, those represent the work being done today to build the world of tomorrow. But then what we want, but that's only the pathways piece, right? And then we want to give people that hope. So don't what we're doing is designing this like immersive, like the sort of immersive world stuff. They're setting this fictional aspirational future, where all the technologies that people saw at the fair, are like, played out, you know, very cool 30 to 40 years into the future to see like, Oh, here's how amazing how vibrant and beautiful our world could be, as a result of these technologies, these things are not going to destroy humanity, they're not going to like, they're going to change things. But like, ultimately, just like every other sort of, like, all the other progress in the past like world is ultimately gonna be better as a result. And so what we want to do is take one of those worlds, yeah, and develop kind of an immersive activation. I want to open 18 to 24 months from now. Yeah, it's November 2022. Yeah. So I did like 1824 months. And this won't like, give guess if 100,000 people or so over over the course of a few weeks, or a few months, the opportunity to step into this world and expect what life could be like in that in that world. But then obviously, like, that's still a big piece. So we're working on how do we design like a pavilion concepts? Yes, that will like show people some of the pathways through an immersive experience in the next year or so. And then we're also working on kind of cooking up a couple of things in the media, from the experience front, to just, again, demonstrate capacity, like on the day to day so that we can stack up to doing like a larger event, and then a larger experience in that larger experience. And then go from there. Like

Unknown Speaker 17:16

how did you? How did you come to the World's Fair originally?

Cam Wiese 17:21

I mean, so I mean, I'm from Seattle. Yeah. And I remember like, I moved around a lot as like, as kids, like, my dad was doing the kind of corporate thing. Yeah. And, but we'd always fly back to visit my grandparents. Yeah. And I always remember flying into Seattle airport, getting the car and it was often raining. In the Pacific Northwest says it does. Yeah. And driving up. I five. Yeah. And looking at the window and seeing the Space Needle. Yeah. And it just like, to me, it was the coolest piece of architecture I'd ever seen. Wow. Like, what like, and I didn't know what that was, but it was like, it's a really cool symbol. Exactly. And I'm like, I like this. Yeah. And, you know, so as I grew up my resume, oh, wait, like, what was this? I started asking questions like, what was this for? Right? Like, we built this, like, why? Yes, for World's Fair, yeah, what are the world's fairs, etc. It was like, always in the back of my mind. Yeah. But they're kind of inception point was. It's probably two years ago at this point. Just like the idea Inception point was like, sitting in, in the airport with all my friends. Were talking about how all the science fiction, yes. And a real taste. It's very all, not all a lot of is very dystopian. Yes. Right. The popular science fiction movies are painting a vision for the future is not exciting or not compelling, right? They make for good movies, yes. But they don't accurately represent the sort of world I think we all want to live in. And so I kind of got off my soapbox, as I as I often do, and found myself just on this rave. I'm like, why are all these movies dystopian? Exactly? This is ridiculous. What if we got all these science fiction authors? In one room? We made them design the coolest possible future? What would that look like? What didn't movie look like? What if? What if we turn that thing into a place that you could actually go and step into this world? You could see how awesome things could be like, definitely, what would that look like? Wait a minute. Can we do this? That's like the world's fairs. Like, what was this? And then like, it was it was that sort of moment where I'm like, oh, World's Fairs, right? What happened to those and you know, put it off for a while, but have become kind of an amateur, you know, World's Fair historian. Yes. And realize, like, again, like, these plants serve a huge, huge purpose and like, getting people excited about the future, especially during really dark and depressing times. Yeah. And it just seems to me to be like so blatantly obvious that like the thing we need now, culturally is like, is this hope for the future, as I've said, right, and like, we've done this before, like, this seems to be a pretty obvious path like that move forward, right? And no one was working on it like, right, this needs to be done that So here we are. I love it. I

Unknown Speaker 20:01

love it. Do you? Do you think something like this is enough to put defibrillator paddles in the West, so to speak? I think everything is back. It's morbid. Yeah. I do love that. I do love the effort. Like I think it is a it's a really good idea. Do you think it's enough on its own? Or is there some other key piece that needs to happen as well to kind of, you know, restart progress?

Cam Wiese 20:25

It's a great question. I certainly don't think it's, it's like the only thing I think, yeah. Like, really, it's going to take kind of a more of a cultural movement. Yeah, right, that I'm hoping to just like play. I in like, the fair, I'm just hoping to play like a, like a small part. But more broadly, we, we definitely need more stories being told about the future that are exciting, right? We need more people choosing to build rather than to like, definitely, petition. Yes. I need to think of a more catchy way to say this, but just like there's there's far too much like, oh, everything's broken. Oh, I'm so frustrated. The system and the status quo, like the system's not working for us, like, we live in the most incredible time. Yes. Like, nobody in the right mind would even, like, consider jumping into time machine going back, you know, years, like the world was not great back then. And today, you have all this technology, you have all this infrastructure, you have all these sort of like the world's great for everybody. Like in comparison to what it was. And like, we needed I lost my thread

okay. Is this sufficient? It's nice. Okay. The Fair's necessary, not sufficient. broader cultural movement. Yeah, like, it's like, there's just a lot of things we need to do. Yeah, like, as a culture to, like, really appreciate like, where we're at now, and where we're going. And again, the fair is like a piece of that. But again, like, we need, we need more. So I think this is okay, this is BS, we need people to like not complain, and to go build, like, go be entrepreneurs desk, go start, like, go solve problems, right? Go do the hard work of not like what is not working, whether it's like, it can be software, but a lot of the stuff that needs needs work is like not glorious, it's not sexy. It's like, Go run for Paulette, like local politics. Like that is an extremely high point of leverage for like, yes, actually effecting positive change. Yeah. And like, very few people are taking that like, takes it seriously. Like, as I was telling you before, I think what am i takes is like, the most courageous thing you can do now? Yeah, like in the world to is to go into politics go into the machine. And like, you may get eaten alive by it. Yeah. But if you don't, like you may, like you may just be able to, like, do something important.

Unknown Speaker 22:48

Yeah, exactly. Especially at the state level, local government level, I think it's a very high leverage point to do a lot of good today. Just in comparison to Yeah, I think it's much less competitive. There's a lot of so you can, you can have a much if you're talented person, the delta between you and the next person who would be in that spot, is often much higher.

Cam Wiese 23:09

Yeah. And I think like this, again, as I was talking offline, like, people now have the tools and the resources to do this. Like, if you're not in one of the major cities, like you can still like, probably you can work remote. Right? You have, obviously means and like, yes, your point, the delta between, like, even the experts is probably like pretty large. Yes. Like, if you just choose to take like to be courageous, and to step up and take responsibility for like, building something great in your local community like you can, and like, you should not you should you must, if you have the capacity to do these things, like you have almost a moral imperative to do them. Because like, if not you then who are like, this is sort of the attitude like culturally, anything that I believe is necessary. It's like, how do we get more people broadly being like, you know what? I'm gonna go do something about this, whether it's okay. There's a contention here. Yes, absolutely. It's kind of related, but I think it's hilarious example. It's like you have over in Oakland. There's like, 1000s, of potholes that like, need to be filled. Yes. And everyone has complained about how shitty it is to drive over there. And it's like, it's not fun. Yeah. And they've gone to the city and like, Hey, can you please do something else? Can you please fix this? Yeah. And the city, you know, of course, like, Oh, it's a backlog, which we'll get to, we'll get to it. Like, we're tired of this see of this vigilante group of citizens who rented a box truck in cement mixer, and they're literally days out pouring like concrete or asphalt into these potholes to fix them because the city won't. Yeah, and there's just this clip, I don't know, on the news, or probably made its way around Twitter, or somewhere on the internet where, like, some interview where like, they're all messed up, they're like, no one from the feds like, it's not about us. It's about the movement. Yeah, it's like, that's phenomenal example of people who saw a problem. Like this needs to be fixed. No one is like no one else is gonna come do this. Like we have to take care sponsibility for it, right? Just like, it's that sort of granularity, like local level, like, in your neighborhood on your block, like, pick up the trash after yourself. Like, don't just let don't like no one else is going to do it. Right? No one's configured the trash. No one's gonna go like, you know, clean up your city, if no one's gonna go, you know, solve the problem you care most about in the world? Like, you have to do it. You have to do it.

Unknown Speaker 25:19

Yeah. I love that message. I think it's really important. Do you think there's something perhaps like, in our culture where we've gotten, you know, perhaps American elites or something have gotten quite wealthy, they're doing better than they ever had before? In economic terms, and things are pretty comfortable. And so there's like, just less than standard to go out. And it's all the problems. You just maybe you move to your gated community, you know, you move up here to the nice place in Hayes Valley. And yeah, the problems don't come up the hill or something like that. So you don't worry about it.

Cam Wiese 25:50

I definitely there's something to that. I mean, Ross. Douthat, does it? Yeah. What is the Deccan side? I think this is his thesis, isn't it? It's like, have you read the book? Yeah, I think I think this is his point is like, everyone should get comfortable. And then, you know, people with the means with the capital, like, they can like isolate themselves from the problems like, Oh, cool. You wrote about crime, like, well, I'm, you know, I have money. So I'm gonna go hire private security. Right? I'm just gonna move in like this. Yeah, I definitely think there's, there's something to that. But the people who are in those positions, like they're no longer like, they're not the ones who are on the ground doing the building. Yeah, they have some some swayed influenced by politically, maybe, perhaps culturally, but, you know, at the end of the day, like, that doesn't change the sort of circumstances for like, you and I, and all of our friends and you know, people who are like, just starting out in their careers, like don't like are just able to be scrappy to be like, hey, like, they're the ones who can go solve these problems, like, yeah, kind of passing it off or like, like delegating the sort of response with like, those who have like, money or power or influence, like, yeah, is, is almost a cop out. Right? Like, yes, it's a problem. But that doesn't mean that Yeah, well, all of us can't do anything about it. You know, gotcha. Gotcha. Makes sense. It makes sense. And what do you what do you think? Can I can ask you questions on this pocket? Yeah, no, absolutely. Yeah. Again,

Unknown Speaker 27:04

I do think there's something wherever the capable people this weird thing happened where, you know, so one of my old friends, we were just started together, he, you know, his grandfather did sa t. And, you know, this is really good thing. We slept up all the smart people from all the rural places and put them at university and we and collaborate them together, and you get all these economic gains. But then it pulls all the talent out of like, all the rural places, and then like, you know, there's just the society starts to break down. And we wonder what's going on? And I don't know, I think there's something about elite responsibility and fragile elite, I mean, cultural leads. Yeah. And not necessarily like, I do think this is separate from income by completely and wealth as these are two completely different vectors.

Cam Wiese 27:48

Totally. In then like the even like, the the cultural, it's like the value system that they're they're propagating is not one that's like, really beneficial for anyone but themselves. Yeah, I think it's like, and then everyone's detached from the consequences. Like, right here, like on the coach like, oh, yeah, this policy is a great idea. Yeah, sure. It's like yeah, for you have no like no conflict. Yeah, you have no clue what was going on the consequences of like, this policy, this behavior, like you don't actually affect you, but you like, are on your up in your high tower, if you go like, up on your Hill and in, you know, yeah. What's the hell it's ever just go? Why am I blanking on this? Like, you're putting like, your pin pack heights up on your tower? And you're like, oh, yeah, we should do this. And like, it never sleeps up to you. Right? And so like, you can you can virtue signal and you can grandstand and kind of talk about these things. And you know, Phil, kind of the virtuous about it, but like, at the end of the day, like, we need to, like there needs to be some sort of thing to like, actually get people deleting to stop, like, meddling in like, the everyday people problems and think about themselves less as, like, the gatekeepers or the like, you know, hey, I know it's best for everybody. And like, I don't know, I don't. I'm delving too far out of my expertise.

Unknown Speaker 29:02

But yeah, yeah. It's interesting. I'm curious, I'm curious. Do you ever worry at all that you go up, report the World's Fair? And there's just not enough good technology to showcase or something like that?

Cam Wiese 29:20

Huh? No, no, I think it'll be there. I think I think it'd be there. I mean, because I think a lot of people think about, like, the world's fairs. It's like, there's just misperception, it's like, oh, it's just like, CES is like, there's gonna be a bunch of boots. It's like, no, no, no, like, there's no there's no boots, right. It's, you know, giant pavilions but the pavilions are not like, showcasing like one individual technology. They're, they're focused on telling the stories of these technologies. And this is the fundamental difference is like, nobody cares about like, boom, supersonic jet, or the tunnels or the Tesla. Right, right. They care about like what it does for them. By the lives and their families, yeah, nobody cares about gene editing, except for when it's like, hey, this can cure you have this like incurable. Exactly where this can help your loved one like your child who was sick from, like leukemia, like get better, like races like, these things don't matter in the abstract. And this is what people don't understand. It's like, it's, the technology is cool. Yeah, you can watch it on YouTube. But like, the story, isn't there, like, how does connect? How does resin? How does this like change your life for the better? Yeah. And like, this is part of the adversarial relationship with like, technology. And, you know, like, there's the world at least well, now we know, it's partially a result of, you know, Salzburger, you know, telling all this journalists to report positively on technology. And we'll see how that how that changes narrative. But like, you, you just like, you can't just put a thing out there and be like, Oh, hey, look, this is great. Like, Brad, you all should want this. Because you have to do what Steve Jobs did was like, hey, 1000 songs in your pocket? Like, no, we're doing this thing now. And Right, exactly. Like, you know, and Elon was like, Hey, this is gonna convert the world to electric cars. Like, I mean, it's unfortunate, like, those are the two like most prominent examples that everyone can write, to connect with, like, those little role models that that people have is, like, how you go build the future? Exactly. I think like, that's a different kind of vector of changing is necessary, like making role models more accessible. But it The point is that, like, the individual technology, like so much positive stuff happening the world right now, there are so many great people working on solving, like our toughest problems. And, you know, we may have to tell like, the story of the future of flight may be a bit more like, abstract or, but like a place thing, like, you know, the future of energy, like, there's like a lot of room to play. Right? So should we think about this from like a rent tell stories about the various technologies based on what's being done today? Right, rather than like, Okay, what, what companies are, like, commercially on the market or publicly, because there's like all this work being done in research labs, and DARPA, like, in private institutions that like, yeah, are very, very, very well funded and run by very competent people, especially like the private institutions that are now starting to emerge. Like, there's lots of stuff that's going to come out of those places, too, so I'm not too worried about it. Very cool.

Unknown Speaker 32:09

Very cool. So as we're coming to the end of the episode here, I want to ask you, what can you go over? Like, what's the biggest challenge right now? Is there anything the audience can do to fix it? And then let's talk about like, the next 10 years, and we plan to accomplish that amazing.

Cam Wiese 32:26

Yeah, so really, the the biggest constraint right now is, is capital. Yeah. And, you know, there's a very clear vision, kind of a good breakdown plan of like, hey, how do we go about doing this? But it's finding the right people who are values aligned, who are very pro human pro progress pro like abundance, say, you know, what, like, yeah, World's Fair. Like, this would be a great thing. Like, let's go work towards it. Yeah. And so it's kind of, you know, both capital and like, founding team, gotcha. It's also like, this is going to take more than just a couple of people over zoom. It's like, how do we build kind of a coalition of people like, truly, truly believe that? Exactly. What can be better than the, like, the future can be better than the present and then, like, wants to take the World's Fairs of is available through which like, I could go help manifest that. Absolutely. And then, let's see. And then, yeah, so I mean, it's Scotland and like, obviously, like, good luck, like, I'm under no, Delusion is a massive project, right? And, like, requires lots of help. So yeah, if anyone is listening in, they're excited about like, the fair, I believe he got laid off from, you know, your startup or whatever, not meta, sorry. You know, come, come, come chat. We're gonna, you know, we're gonna be doing like events here in San Francisco, to start to like, capture the feeling of the future and the feeling of the fair. And so that's a really good way to kind of get involved and start to see like, oh, this thing is there's there's some some promise here then. Definitely. I've seen a lot. That's great.

Unknown Speaker 33:54

That's great. Well, Kim, where can people find you? Where should we send them?

Cam Wiese 33:59

So I'm on Twitter at Kim we see so ca M W IESE it's ICU see we see all the auto like Weiss and then you know, follow the World's Fair at Worlds Fair CO on Twitter and then the website World's Fair Dotco we have an amazing list and we're spinning up more of the content arm but gotcha if you're a content creator and you can feature like good please hit me up. Yeah. Yeah, so that's that's kind of the where where we're at right now.

Unknown Speaker 34:27

Good deal. Get an awesome bootcamp. Thanks so much for taking the time to come on. We'll appreciate you man. Thanks for listening. We'll be back next week with a new episode of narratives.

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:40

Well, Jeff, how you doing this morning?

Jeff Huber 0:43

Doing pretty good. For the call down here? It's kind of funny. Yeah, it's good. It keeps you awake. That's right.

Will Jarvis 0:49

That's right. It's good. Well, Jeff, thanks so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested

Jeff Huber 0:58

in? For sure. So my name is Jeff Huber. I live in San Francisco. My day and somewhat night job is running a sort of a fairly new startup called Chroma. We focus on AI tooling. You and then my, my night night job, I guess, are some of the big ideas that I've been interested in for over a decade or more now is sort of around like, you wouldn't have a way to say it is like what comes after modernity. And I think like to frame that up a little bit. Seeing as many people have, right, it's really a novel observation, in some sense, but like, you know, seeing a lot of the like, apparatuses and like beliefs that were certainly true. And I was born and even growing up, like just fading away year over year. And you know, that leading to a lot of sort of weird and sometimes violent manifestations. And kind of wondering, like, what comes next? You know, like, are we at a few gay, amen. End of History? Is there are there new good forms of government? Do we just digress back into, you know, clans and, you know, more scorched earth? zero sum war, like, what happens next? And of course, it's the future. So, so nobody really knows. But maybe that's why it's the most fun thing to talk about. Because, you know, nobody knows. So there's truly no experts, right? Like, it's, it is truly anyone's best guests. And, and that's the fun part. So, I love that.

Will Jarvis 2:29

I'm curious, I want to get started in the first, Kia, it's something I've always been curious about, how do you think about defining pre modernity, modernity, and then something like post modernity?

Jeff Huber 2:39

Totally. So pre modernity, in my mind is, so one thing that I like to do is use this framework and define for any given time. What do they believe about the nature of man, mankind, the nature of the material universe, and then the nature of history or the meaning of history. And so in pre modernity, you know, man was, man was violent, you know, maybe sort of like a Hobbes in man, right? Nature was enchanted. You sort of know, we worship the rocks, we believe that there's sort of like divine and spiritual forces that are gonna run through all this stuff, the material stuff. And that like history was cyclical, there was no dialectic or progress to history, it was just sort of like who's in power this century, more or less, like that was the framework, right? And then, you know, kind of my reading of what happened is, really, because of, you know, Judaism, and then Christianity, and then Christianity being spread through Rome, and through the Roman Empire. It spread the ideas of, you know, man as, as rational, but the idea of like the material world as knowable, and study bubble, because there's a good God. And let the idea that progress is possible, because there's a dialectic there's a meaning of history and a progression, you know, in the sacred texts of Christianity. And so, you know, those ideas, secularized led to liberalism in democracy as we see it today, in the West, it led to the scientific revolution, because you can study nature and you can understand it. And it led to the technological revolution because we can make new technologies that improve our lives and make them more abundant, etc, etc. And I think that like post modernity, usually how it's defined is a skepticism of meta narratives. That's like one simple way to define post modernity there's much there Right? There's like your, your dairy does your Foucault's your Deleuze and Guattari. He's like the whole crew of like French postmodern thinkers, the Frankfurt School. And I don't actually think of them as after modernity, I think of them as hyper modernity. They actually took the skepticism that modernity had for meta narratives and They are the accelerationist of modernity, fundamentally and so, and that way they are not. They're not representative in my mind of what comes after modernity. They're instead representative of, you know, sort of late modernity, they are like the end of modernity, fundamentally, they are modernity for eating itself. And I think it's kind of obvious that, like, the nihilism that, you know, post modernism generally brings is not really tenable or holdable, by any human individual in practice. Right. And, and so, but, but still it you know, it represents this, like, hybrid majority in my mind. So, got it. Got it.

Will Jarvis 5:33

That makes sense. That makes sense. I'm curious. It seems really difficult to judge like the current moment from where, from, if you're sitting in the current moment? Yes. This is really difficult question. But how do you think about parsing where we are currently? And is it just trying to compare it to the past as best you can? It just kind of feels like you're always looking at the side of an elephant, you know? And it's like, how can you tell if an elephant if you're just right on top of it seems really difficult.

Jeff Huber 6:03

Yeah. Yeah. Or, you know, fish don't know, they swim, swim water, right. Like that kind of thing. I agree, it's challenging. That's not to say that it's impossible. And it's not to say that it shouldn't be attempted. Yeah. And very few people attempt it to be fair, right. Or people that do attempt it, I commonly find do a really bad job. So like, that's not to say that I'm doing a good job, I might also be doing a bad job. But you know, love, love to get that feedback. So yeah, it's sort of two questions, right? It's like, how do we how do we evaluate the current moment? And then like, what is the current moment? So maybe to take the second one first, like, what is the current moment? So I see that like, essentially, the belief as you know, man, as rational has started to fall apart. And maybe you can point to like Dan Ariely. He's, you know, predictably irrational, you know, the whole, like, behavioral economics movement, as like, hey, actually, people, we don't actually believe in this, we don't believe that man is rational. And people like, oh, yeah, actually, you're right. We don't believe that, you know, and like, Man is rational, obviously, has a deeply intrinsic idea that as managers, as individual as well, and, you know, increasingly, that's not a popular thing for like people to be individuals with, you know, sort of individual choices and individual rights and right, it's sort of, you know, more about, like, mass collective identity. And so, again, it's like, sort of exactly point to, like, where, and why and how this started. But I think that, you know, again, the topic of, of man, mankind and the philosophy of that, like, it's evident to me, at least, that people don't really believe that man is rational anymore. Another good example of this is like, if you believe that man is rational, then the best way to create a society is for make everybody extremely educated. Because like, that would mean that people are smarter, and then they can make better decisions collectively, right? Excited better. And yet, like nobody actually believes in education anymore, either. Like nobody, nobody believes that, like, well, a lot of people disagree with my political, my political points, but if they're more educated, they were better. Like nobody actually thinks that like, people just want to wield raw power, as opposed to try to, like, convince through, you know, rational arguments. They're sort of, you know, opponents are the next generation. So. So that's the rationality point. You know, if it was science, like, you know, there's just so much fraud, fundamentally, that happens in academic academic science, especially today. You know, you have pee hacking left and right, you have people, you know, having the research completed before they read the grant application, because then you get the grant application to work. And to get more money. You have people just doing marginalia, like over and over and over again, in the social sciences, you have people just applying, you know, critical theory to acts like one more time. And, again, we're making no real contribution to the future. And then in technology, you know, just sort of this is not unique to me, right. But there's sort of a general observation of like, a slowdown of like technological progress and ambition, right? And I think that also like slots in here. So that would be the sort of the ops the observation of like, what, how would you characterize how would you even come to believe that potentially, we're exiting this thing called modernity, in Jaffa modernity is to look at well, what were the values that we held during majority and that just look around you and like, ask your friends and like, look at the news and say, like, well, do we, you know, is it obvious in evidence? Or, you know, is it even apparent that in the world around me, you know, people believe broadly, that like, Man is rational, that the world is understandable? And that, you know, progress is possible, right? And it seems like on all those vectors, the answer's no. So that's one man's analysis, at least

Will Jarvis 9:18

I like it. I like it. Even this effort were part of this week AI grant. It's quite interesting, because it almost seems like it to your point, it's something like well, like you're thinking, the ability to reason all these things, rationality is too difficult. So we're gonna offload them to the computers that can take care of these things for us.

Jeff Huber 9:37

Yeah, there's definitely an reading of AI as not a, you know, deterministic, optimistic future but kind of a indeterministic. And, you know, maybe like, pseudo pessimist, pseudo optimist future. You know, how does he get better? We didn't really know. We just needed more data. Maybe we'll get better. Will it be good? We don't know. Maybe it will like, you know, alternate integrate Do and paperclips girlfriend or maybe we'll get like, you know, happy, you know, perfect society at the end. So, you know, I don't guess the only framing of AI but that's sort of that is the pop cultural for me of AI. Yes, it is indeterministic and that it is neither good nor bad and sort of in like a you know, the protagonist in many modern TV shows, right? There's no good or bad protagonist anymore. It's always complicated. Yeah. And I feel like that's true about AI too. It's complicated.

Will Jarvis 10:27

Or, ya know, what you make such great point there. It's like, we saw Sam Altman last night. You know, it's this, this vision of this, like abundant future driven by super intelligence. And then, like you said, like, right across the bay here in Berkeley, it's all about the alignment problem. It's definitely going to kill us. Maybe this will Peter down there. Have these people have the money more anymore? Yeah, if the explosion, but it does seem to be something like, wow, it either it's just absolutely going to kill us, or it's absolutely going to be this like crazy about it thing, but it's like unknowable what's going to happen, and we just need to push through it as quickly as possible.

Jeff Huber 11:03

Yeah, I mean, in general, I think that a more positive view of the meaning of history. And this kind of dovetails a little bit into, like, ideas that I have about what healthy forms of these views could come in after modernity is on progress specifically, is being just less utopian about it all. And neither saying that AI will cure all ills in the world and make a perfect society, and also, neither saying that AI will end the world and will be the end of mankind, right? Like both of these are very, like, you know, either they're both very utopian, or they're very dystopian. Yes. And, you know, I sort of fundamentally believe that, like, only 111 being has the right to start or end history. And that being is God and any attempt to play God is, you know, necessarily, blasphemy, basically. Yeah. And the call of the, you know, the person in the world is not to end history, or to start history, the call of the person in the world is to, like, work at the margins to make the world you know, a little bit better than they found it basically. Yeah. And it kinda goes into the the life extension thing as well. It's like, you know, should we make it so that, you know, humans can live forever, like, upload themselves to the matrix? Are we like, you know, are able to replace our organs forever and ever? And, like, I think that is essentially blasphemous. But I think that the idea in general of like, well, we should make give everybody five more quality adjusted life years is a good thing. So I think that also applies to basically sort of my views on AI, which is like, neither will it be this like utopian thing that makes perfect. Humans are not perfect is not gonna be perfect. Neither will it be this totally dystopian thing that like, won't be able to be controlled and will take us all over. You know, I think that it's, it's, it's probably somewhere somewhere in the middle. So and that's, that's the most healthy thing to do is just sort of like, you know, again, view view, the marginal impact and try to make progress at that margin.

Will Jarvis 12:49

So right, that makes sense. That makes sense. Does this feed into why you're working on AI? And watch?

Jeff Huber 12:55

You don't have it fully, but I don't think like fully connected to yet. Yeah. The Yeah, the streams are, are, at least in my conscious brain, they're a little bit different, though. Maybe there's like some subconscious, you know, psychoanalysis here and there, which, which has linked them together? You know, I certainly think that, like the future is open, that the future is possible. I believe that people do not believe in the future do not care about the future. Broadly, most people are extremely obsessed with litigating the sins of the past. That's really all I care about, or maybe you know, litigating the potential sins happening in the next month. But nobody believes that the far future obviously, long term termism is very in vogue these days. Even though it's financing, well, maybe a little, you know, a little more meager in the next, next next next year. But again, the I think that long term ism is not a it's not a new idea. And long term ism goes back to, you know, the individuals that worked 1000s of years ago to, you know, build, you know, large monuments across the surface of the earth. But including, you know, I often think about the cathedrals in Western Europe, you know, these, like giant structures that take over a century to build, take 10s of 1000s of man hours, probably, you know, equivalent, Li adjusted, you know, near a billion dollars to make. And, yeah, that takes some, you know, to work on something that like, you cannot finish in your own lifetime. Like it's a factor, I think it's a big deal. And obviously, now you have things like the lung, the lung, now clock and stuff, I think, are trying to create sort of a modern symbol of that. But yeah, so sort of back to the, I guess, question and like, you know, does it how does this interact with my, my day, my day to day work? Yeah, I'm not exactly sure. I think that, you know, I do think that I guess, I guess one other quick sidebar here is that I do think that like, and we talked for this last night, but you know, I think that fundamentally the two sort of primitives in the world are near free intelligence and you're free energy are sort of the two primitives are energy and intelligence and making those near free unlock new abilities for abundance in the world. Yeah. And and scale fundamentally and obviously like, you know, power. I think that there's really good to buy to from scanning Andy Crouch about about power, which I think is a useful framework, which is the two by two is power and sort of no power, lots of power, no vulnerability, lots of vulnerability. And people only ever sort of analyze power along the dimension of like, well, we understand what no power and vulnerable looks like, that's like the homeless person on the street. And we understand what power and no vulnerability looks like. That's the dictator. Yeah. But what is power and vulnerability? And, like, I mean, from a Christian perspective, that's probably Jesus, or God. And, like, both transcendent and imminent, right, yes. And, and I think it's like, it's underrated. People don't ever think about things in that term. And so when you think about, like technologies that could create a lot of power, obviously, the individuals that steward them is really important, but it's not it's not instantly, you know, bad for the world, basically, like there can be good incarnations of it. And it's not up, you know, it'll naturally just happen that way. I don't, the cards will just fall that way. But I think it's like up for us, like collectively to choose, you know, which way these things fall. And we have to choose.

Will Jarvis 16:05

Yeah, do you? This is kind of a weird question. But do you think it is possible to kind of create a new definite vision of the future? So you know, I, you know, Peter Thiel is always like hammering this, we need this, we need this, we need this. But then you ask him and he's like, I don't know. I don't know. And you're like, wow, you know, you're a lot smarter than I am. So I don't know how the heck yeah, was to figure this out. Right. But yeah. Do you think it's possible to do that at this point?

Jeff Huber 16:29

Yeah, it's but it's funny you bring up like, you know, Peter, you know, if you have one critique of Peter, it could be that, you know, that's the best way to get Peter, you know, none of this other stuff that people write about him really is a good gig. And that's pretty good. him is like, Okay, where's, you know, where's it? Yeah. What is it? Like? And like, I don't know, you know, maybe, you know, this isn't there, like, you know, generational aspect of this, right? Where he's like, kind of like, okay, my job is to like, you know, be the signpost not necessarily, you know, point the direction or whatever. But

to do it yet, I do think it's possible. I mean, anything's possible, I do think it's probable that it will gain global scale? No. Do I think that it's possible that all gain in some local communities scale? Yes.

And I think that, basically, what you have to do the turn, you have to make to get to that definite, the possibility of a definite version of a future is the, the turn from late modernity, to being open to what's next. So, you know, it's basically the turn from thinking that like, this is the end of history to accepting that there's gonna be new possibilities, new chapters, and new forms of government and new forms of science and new forms of technology, that there's ways to do those things that are like, new and different and new. I think, also, I want to be a little bit, I want to want to put some context around new. I think that like new, obviously, new and of itself doesn't work. Because newness is flighty, and newness doesn't guarantee that it will resonate at scale, right. So I think that has to be enriched and formed from history. And it needs to whatever population you're talking to, it needs to like almost like tap into their, like psychosocial primitives to, like, be able to have traction and get scale. And then I think also, like newness is a it's just some ways overrated, and that there's a lot of really good ideas in history that have been lost and ignored. And I think, probably to a large group, and just, like, pick those up and repackage them. And, and that's good enough. So yeah, new is maybe newest sort of, I mean, new is, you know, so intrinsically at a modern word, right? Like, the idea of newness is inherently this sort of, like, it's like, coincident with like, modernity, right? Um, and so, but the idea of like, these hybrids of like, the past and the current, and the moment in the future, I think is maybe more of like a after modernity framework for thinking about what is new. So anyways, that got a little like, meta pretty quickly there. But it was fun. So,

Will Jarvis 19:06

absolutely. I was like that. That's cool. I do see Christianity fitting into this whole puzzle piece.

Jeff Huber 19:13

Yeah, I mean, think of the West, like, mean, Christianity is still like the water in which we swim. You know, that's not to say that, like you can, I don't think you can really make this argument by looking at like church attendance or, you know, polling or whatever else. You know, more what I mean by that is like, you know, the work that like Tom Holland has done in his book dominion, and other people have talked about hasn't just been him, obviously. But the idea that like the value still, which, like we, as the West hold, are intrinsically like Christian, basically. So, yeah, I think it's the water in which we swim, is still the culturally dominant thing. Even if I mean, you get one. There's some arguments for that, you know, atheism is also Christian in some sense, because it was only the belief that like nature could be DNA. It did, which lead downstream to the idea that atheism is possible. But I'm sure atheists are gonna hate that. So please do not do not DM me on Twitter about that, I will not argue with you. But, um, but yeah, so I think is really important. I think that like, when I think about like, okay, what are the possibilities around like this definite optimism, view, philosophy, theology, the future, it being looking for founds, or sources of thought, as I mentioned earlier, these like, sort of hidden lost ideas in the past that have the intellect that could particularly fall on like, the rich, fertile ground of where we are right now, I think looking at Christian history is a really good way to do it. So a lot more to unpack there. But that's the that's the overview.

Will Jarvis 20:46

What kinds of things do you think are useful to unpack from like Christian history that we you have any specific examples that that come to mind?

Jeff Huber 20:55

Yeah, I mean, on the one kind of, there's a bunch of vectors here, one vector is the vector away from rationality as rationality as God at least so I think it's a good thing that people are generally rational. And people are irrational, it kind of gets under my skin. You know, I got to get under my own skin pretty frequently for that, you know, for that reason. But so, yes, it's not it's not that we want people to be more irrational. It's that we don't view rationality as the end all be all as God basically. And I guess observationally like that is one one way that you could observe this change is our people on the whole getting more mystical. Interesting. And, to me, the answer is definitely yes. Yeah. You know, you've heard many people say that, you know, new Atheism is cringe now, like, it wasn't 15 years ago, all my friends are becoming more weirdly mystical in different ways. Burning Man. Like, it's huge now. Like, I think, to me, it's self evident, I guess that like, people, there's almost like this new hippie movement, which is much more open to like, I mean, one way to say it is like other dimensional possibilities. Yeah. Besides like, the cold hard facts of rationality and atoms, right.

Will Jarvis 22:20

It's interesting. So zoo, we should lean into that more as we go. Well, it's

Jeff Huber 22:24

gonna be both good and bad. Yeah. So I don't Yeah, I don't I mean, you will both have probably, you know, new new Jones towns, you know, like, you'll have new crazy colts, right? Like, I do think that definitely gonna happen. So that'd be the bad side. But the good side is that, you know, one of the lies that I think the enlightenment and modernity said about mankind was that he was sort of this you know, fundamentally Gnostic bag of flesh, right, and not want to be like a gnostic, because I mean, that he's primarily a thinking being, and the body is sort of this like, sub sub human necessity for like the brain to move around. You know, people joke about like, this being true by things like Presbyterians, or Protestants, where he's like, you know, it's like the Brit. Yeah, the body is just like a bag of flesh to move the brain around, basically. And that's just a very, like, modern idea. So I think that's like, basically just, that's just not true about humanity, like humans need transcendence, like they need, like mystical experiences, right? That's just a very important part of being human. Some people call that obviously, like, religion, God, whatever. And so I think that, in that sense that being more open to this as a culture means that more people will explore this and use it more people will be able to be more authentic to their humanity, which I think is probably is probably good. And then there might be some, like very specifically, very, very good flavors of it as well, I guess beyond just like, the generic, the generic goodness. But

Will Jarvis 23:58

that makes sense. That makes sense. How do you think about, you know, like, how do you think about the this, this problem where, okay, like, we understand now that the scapegoat is in a sense? Yeah. And is it bad? You know, people still try to do it, you know, we're still trying to skip the scape gutters or etc, etc. Yeah. But how do you think about what comes like, you know, do you have any thoughts on what we do next with that?

Jeff Huber 24:33

Yeah, so, you know, for the audience, maybe your audience is already quite familiar with Girard, Medic theory, etc. I do think that like, basically, that's one strong candidate for a view of mankind post modernity, after majority is management medic. Man is rational. You know, the exact political implications of that I have not unpacked. I do tend to think that the view of man as a medic is sort of a post liberal red red pill in hiding. And, you know, post liberalism has a bunch of crazy people in it. So that's like, I mean, yeah, that's again, it's sort of a trigger word in some ways. But yeah, so, you know, the idea of like, what will happen to scapegoating? I don't I don't know. I mean, Gerard would say that like, scapegoating will become more and more prominent become because it becomes less and less effective. So it's like, the less effective that it becomes, the more that's unveiled. Like the more that it has to try to like still concert assert that it still works. And so the more extreme it gets, yeah. I don't actually know if that's evident to me that there's like a progression like that. But I think another way to think about this is like, one thing that I would like to see, and whether this is possible or not, whether this would be on net good or not, is another question for sure. But I would like to see a world that is more, more local and less global, simply because global contagion is bad. And, you know, global contagion, basically, what will happen, maybe eventually, is that like, we will have a truly globalized world, and there will still be violence, and then, you know, a single person will come come along, named the Antichrist, who will promise that He will restore peace and security to the, you know, the face of the earth, you know, sort of in exchange for our souls, basically. So this is like the, again, this the Christian God, the Antichrist, and, you know, basically global the cage, you know, just look at, you know, pick your, quote, unquote, the current thing, right? Like, it is increasingly becoming a global contagion. And I think that that is very dangerous, like extremely dangerous. And so, in some sense, like, if you believe that mathematic, you'd rather have a relocalization of communities simply to prevent the risks of global contagion. And so there might still be scapegoating. But at least it would be at like the community level, which would just seem less bad than scapegoating at at the global level.

Will Jarvis 27:03

Yeah, definitely less scale less, you know, industrial methods of doing it, etc.

Jeff Huber 27:07

Yeah, exactly. And also, just like less, you know, these things don't necessarily line up community over community, right. Like, they'll there'll be different variants of them, people will feel justified for different reasons. Like, it won't be like, you know, it feels like today. You know, and, again, this is dangerous to say out loud, but yeah, there's certain, let's just say there's like certain, like political leaders in the world that like, it feels like if they got taken out for some reason. And it's like, this is meta enough that like, it can fit almost anybody, right? That if it got taken out that like, we would all be pure again. Gotcha. And the world would be the world would be good again, right. And we would all be like, pure and good and clean again. Yeah. And like the, the blindness that will come from a world that felt all in one moment that they were purified, is terribly frightening, right?

Will Jarvis 27:55

Like, this is a huge, huge red flag. Yeah. So do you think at some level, people are overriding, you know, existential risks then? Because they like, you know, if you if you get obsessed with these things, they can become all consuming, and then you want to have some solution to fix it. And that looks like

Jeff Huber 28:17

Yeah, I mean, I think there's, you know, I guess the question is, like, what is the right amount to care about? Because never paying attention to it at all. Never taking it seriously at all, is probably bad. Taking it way too seriously, and not being able to get out of bed in the morning, because AGI is going to turn us on to Greg who three years from now, is also bad. But it kind of goes back to frankly, this view of of zero a broader idea of like, you know, is is progress possible? Do we like get out of bed in the morning and work hard to make it happen? Is it happening without us? Which is gonna happen? Or is it like all? Yes, it's related to how hard we work basically, to like, try to try to try to address it. So anyways, back to your question about x risk, like, I mean, it's, it's likely to be overrated, by those means. This is sort of a generic way to say there's very generic point, there's like likely to be overrated, or there's a talk about it as like the underrated by those that don't make sense. And you know, exactly what the correct amount of rating is, is, is anyone's guess, but again, on the margin, has people that are obsessed about x risk, could be a little bit less obsessed about it, and people that are paid no attention to it could pay a little bit more attention to it. Yeah. The problem is there's many eccentric X risks that that are oftentimes overlapping, and oftentimes at odds, right, and they're also the unknown, unknown risks. Nobody's paying attention to because they're on notice. And so, you know, and maybe there's some sort of, you know, I won't try to you know, pick a pick the analogy here, but there's some sort of thing where it's like Okay, if we focus entirely on AI risk, we, we miss the other risk, right? That that truly is gonna take us out or that so? Yeah, I think I think I think again like x obsession of X risk is just fundamentally like kind of almost a religious eschatology. It is a is a narrative about the end of the world that the end of the world happens to really be helpful, you know, people having a monetized eschatology happens to be extremely helpful for giving you focus, meaning, yes. However, you know, it's there's a reason that people say like, you should not in monetize the eschaton. Because when you analyze the eschaton really bad things happen. It justifies a lot, right? When you think the eschaton is imminent, and when you were working to monetize it, basically, any violent act, or any act of fraud, all of a sudden becomes totally fine. Right. Right. And I think that's, that's bad.

Will Jarvis 30:55

reps to take all your customers money, put it on red, and yeah, I

Jeff Huber 30:57

wouldn't make it. Yeah, hypothetically, hypothetically, that might happen. Yeah.

Will Jarvis 31:03

That's a bit of a danger. But I'm curious if any thoughts on this, do you think there's something wrong with like, how a lot of people have been thinking about expected value calculations, like, like, presses around long term ism, or like, just in context of the FTX blow up? It seems like perhaps you can get these things like brutally wrong or you underrate the risks of doing these things or something like that.

Jeff Huber 31:31

Yeah, I mean, obviously, expected value has in the word guests. Just basically, yeah, I mean, guests expected is the same thing as guest. So I've no problem people. As long as people have skin in the game, I have no problem with them having making their own Eevee calculations, basically, it's when it puts like society at risk, or it puts, you know, innocent people at risk, right? Or the person who makes the bet it doesn't have skin in the game. Right? That's like kind of the more bad version of that. So yeah, I mean, I think obviously, there's a classic economist, like all expected value is perfect, because there's no $20 lying on the ground. Yeah. You have like private equity and hedge fund groups that have been extremely successful, like finding, you know, mispriced assets, basically, and like, you know, whipping them into shape. And yet, the average trader, so can't beat the market. So it's like, kind of unclear. It's like, is anybody got this? We want to say no, but people have been like, extremely successful. It's like, Does that just mean they've been lucky in their time? You know, the time hasn't come yet to be lucky. So yeah, I think the broad video is basically like, I'm totally fine. People like having to interpret the value calculations, as long as they like, bear some of the downside.

Will Jarvis 32:49

Make sense? Make sense? All right, going off that, like, I will talk about efficient markets for a minute. No, clearly, you're somewhat skeptical because you're working on a startup. And so yeah, yeah. So you do believe it is possible to find these things. But at the same time, it does seem to be very difficult to beat the broad equity market. There's like some tension there. How do you think about finding $20 bills and sidewalk? And how have you like, tried to systematize that, you know, when you when you're building the new venture here?

Jeff Huber 33:20

I mean, the idea that there's no $20 bills lying around? Market is completely efficient. Yeah, I think is just intrinsically end of history. Got it. But there's no, yeah, there's nothing left to be done. Yeah. Which would be good or profitable. Yeah. And so we should just rent seeking chill. Yeah. It's a good show. I love it, which I'm not about that. So. And it's not true empirically, right. Like the machine has any study or just ever proven it to be true. Yeah. So it's like kind of this like collective disillusion that for some reason, it's like, you know, this sort of like math contagion, that we all believe this. People believe this. When it's just like, not true at all. But I think it's it is coincident with again, it is coincident with modernity, it is very, it is a very rational idea to believe the market could be efficient, is very rational idea to believe that a more efficient market over time, you know, will lead to more scientific, technological progress and all the good things. And so, yeah, it makes sense. It makes sense. Like people will leave it like in context, but right when you actually look at the facts, I feel like it doesn't make any sense at all. Makes sense.

Will Jarvis 34:25

Makes sense. I want to go back a little bit and talk about localism, globalism, couple of these things. Yeah, we're sitting here this this great global city in San Francisco. But you know, it seems like localism is something you're quite interested in. How do you think about building community in a place like this? Is it has been difficult? Has it been pretty straightforward? Have you think about that?

Jeff Huber 34:52

It's your question. I don't think about San Francisco as as a global city, actually. I mean, maybe it's because of all the NIMBYs that are here, but it tends to be quite local. Right? And quite navel gazing, for better for worse. I mean, if it's good does feel like a small place, once you've been here for a while, and I've been here for over 10 years, you know, you start to just like, see people, you know, on the street randomly, like, you know, has it can start to have a local community vibe. Yeah. That being said, like, you know, I've had many sets now of like, best friends that have just, like, moved away. And like yesterday, you kind of get used to that. And obviously, because of like the internet, you can, you know, stay in touch with them. Right. And I do. So, I have some sympathy for kind of the local, you know, Balaji network state, like, no communities will be digital, primarily versus physical. I think that kind of makes Yeah, that that's underrated. Again, that's underrated. But the physicality is probably still under still underrated. So that's, as well. So yeah, I don't know, I don't know, if we're now you know, have kind of this dream. And, you know, maybe be in the next 10 years, or maybe it won't, but, you know, had this dream of like building like this kind of monastic structure, somewhere in like rural California. And it being a place where there's both like full time, almost, you know, monks or nuns, where you can think of like other kind of variants of that. And then also has is also explicitly set up for, like groups of maybe like five to 10 families and their kids to catch up and spend, you know, three to seven days in the same place together. That's cool. And that being a tool that you allows people to build some of these like deeper, closer community connections, and it's kind of nothing like that today. So like, you could go all go to Lake Tahoe and get Airbnb is next to each other. But that's not the same thing. Because once your kids are asleep, you have to be in the same house as them. You can't night yeah, or you can try to get like a giant house. But there's like a few of those in a very expensive and ugly design. So if there's like, there's like an under this is like this is again, this is one of my $20 I think is like laying on the ground, and maybe not like a profiteering perspective. But certainly, like a cultural impact perspective is having like more places or spaces that people will leave can like, get away to, right? I don't think that it's important that like, every single day, people will be living like this necessarily. But you know, the idea of like, you know, being a man of the town, and then like, you know, retreating to the countryside is oldest time, right? So, but there's not, there's not you have to build community in that way. There's not really good tools right now. So anyways, I'm kind of unrelated, but that's one want to get that I've had,

Will Jarvis 37:45

I'd be like that I do. I do quite like that that a lot. Do you think a physicality, you know, will become less important over time? Or have we reached the local Mac, Maxima with remote work, etc. And like the efforts that matter are kind of in vain to make these things more immersive, to the point where it just the the physical doesn't matter anymore.

Jeff Huber 38:11

I think it's kind of interesting, because I think, in some ways that digital will matter more and more, but then maybe also the physical will matter more and more. Gotcha. So maybe like I don't someone's like, it's the opposition or that, you know, setting setting up I was like this limit of like, setting him up as like oppose forces, I think is is, is what I would disagree with. And that's, you know, that's yes, you're disagreeing sort of a false a false duality. Yeah, I think that physicality will become, again, like much more mystical, much more sacramental gotcha, much more spiritual, makes it on one vector.

But at the same time, you know, it's like, I think foolish to say that, like,

VR will never be good enough for me to spend an hour a day in because I hate it. And I don't like Mark Zuckerberg, you know, like, that's just stupid. And, you know, maybe it's not worth a quarter trillion dollar investment from one company, but but some, you know, entrepreneur that nobody knows about, or maybe hasn't even been born hasn't even been born yet. Like, we'll we'll figure it out. And I think that, yeah, there's all kinds of, again, really bad things people use that for, but also really good things. Sounds great. That's great.

Will Jarvis 39:27

Well, Jeff, what do you think about the next 10 years for yourself? What does it look like?

Jeff Huber 39:33

Yeah, I am pretty pretty focused on, you know, building this company right now. I think it's really important to the future of, let's say, machine learning. I still like the phrase that you know, machine learning is done in Python and AI has done an excellent bedsheets. And for whatever reason, like AI is becoming like less taboo to say in recent times, but I'm just gonna say machine learning. So yeah, I think that the project I'm working on Chroma is is really important to the future of machine learning. Ai taking it as we say, basically taking it from like alchemy today, which is like there's a few people that can figure out the right magical cocktail of ingredients to get us to do something and change it get into more of an engineering where it's deterministic possible to make progress about the model better get results, be able to trust it, make it make it a line, if you want to choose those words, make it safe. Do you want that word? And yeah, we think that Chroma is is the way that that will happen. And we're building it in open source. And so it's like, kind of gonna be this community thing. So that's a big, that's a big emphasis. I think that over the next 10 years, we can we can get there, we can actually make that a reality. So that's exciting. Yeah, I mean, maybe we'll build that monastery the next 10 years. Should it should this should the funds, should the funds emerge? And, yeah, I mean, I'm, I think that like, one thing that's been, you know, a lot of my intellectual sort of pursuits, or efforts, like, are really done for my own sake. And then because I don't see anybody else. Like, I take these things really seriously. And it seems like nobody else is thinking about it, or caring about it. And so it's like, well, crap, someone asked you, I guess, I guess I have to. So, yeah, it still feels like, there's certainly a lot to unpack, like, if it is true that modernity is is fading away, and that it is true that there is a an open future of what comes after maternity. Right, then there's a lot of work to be done. Yeah. And, you know, there's, there's a lot of work to be done, you know, just purely in like formulating the ideas and building communities and like bringing people into the fold and like, you know, for lack of a better word, evangelizing some of these ideas. And so right. Yeah, I don't know, what role is mine to play in that, if any, maybe I just, yeah, I don't know. But But that'd be. I think that would be you know, I certainly think it's like extremely important. So definitely as as the opportunities rise. Yeah, I think in 10 years, we can, I think in 10 years, we can have some embryonic communities that are truly living day to day, week to week with some of the values that will define the next 50 years and sort of like how you imagine like the early hippie movement, you know, like, there were here there were hippies before hippies, yes. You know, and, and they were doing the commune thing. And they were kind of like they were they were living out life. And in a way that would become like a mass phenomenon, right. And I think that something like that is going to happen again, it's not the hippie movement, but something different and new. And that there still will be germinated by small communities of people living in attentional ways. And I think that like getting to that milestone in the next 10 years is also possible. So definitely, those those are the two big projects.

Will Jarvis 42:35

I love that. I love that. Well, Jeff, thanks so much for taking the time today. Oh, where can people find you? Where should we send them?

Jeff Huber 42:42

Yeah, my Twitter probably is the best place to do. So at Jeffrey Huber on Twitter. Nice. And I don't tweet that much. So I tweet like once per week, so made me uneasy. I'm a low commitment follow a little bit. I'm not gonna fill your feed. So yeah, I'm busy.

Will Jarvis 42:56

Awesome. That's great. Well, Jeff, thanks so much again. I really appreciate it.

Jeff Huber 42:59

Thank you. It's been really wonderful.

William Jarvis 43:01

Awesome. Thanks for listening. We'll be back next week with a new episode of narratives.

Will Jarvis 43:13

One quick note before I let y'all go, we didn't really get into it in this episode, but Jeff's company Chroma is doing some really cool work in open source AI, and they're hiring. If you want to learn more, visit their Twitter at try Chroma.

Transcribed by https://otter.ai

We discuss the best methods to teach someone anything, the state of youtube for content creators, Mr. Beat's recent interest in the economist Henry George and more. 

This episode was cohosted by Lars Doucet. 

https://youtu.be/mS_CyMuRcao

Transcript:

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars to say joins us as a co host. Well, Matt, how are you doing this afternoon?

Matt Beat 0:43

I'm doing well. Yeah. Excellent. Thanks for having me on.

Will Jarvis 0:47

Absolutely. Thank you so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Matt Beat 0:55

Yeah, I taught in the in the classroom, grades seven through 12, for 12 years as a social studies teacher, so variety of topics from government to American history, world history, economics. And so you know, I just love to teach and make, try to get people to be curious. Because once people start becoming curious, I feel like that's when we kind of have problems. And also that my broader goal, the idea that I'm most interested in, you know, it's kind of my mission, I guess, for lack of a better way to put it is to increase empathy and the world. So whatever I can do to do that. And often I find myself just like, thinking of ways where I can trick people into learning social studies, that's like, and you know, when I say increase empathy, I mean, like, I'm Team human, like, I No offense to any other species of animals. But whatever we can do to keep humans around on this planet. That's what I'm pushing for. So that's, I mean, that's what social studies is all about, like, how we all get along, so we can survive as a species. So, but you're not ready talking too much.

Will Jarvis 2:14

We want to talk a lot today. Matt, you said something really interesting there. And that's you want to increase empathy? How do you how do you think about going about doing that? Is it like telling people stories about the past about different people to kind of, you know, give them some kind of help them form a theory of mind about what other people are going through? Is it something else?

Matt Beat 2:35

Yeah, that's definitely a big part of it. But the story is, can't just be of, you know, the familiar they have to be what's not familiar. So like, I mean, I think if I think back on my own childhood, and I had a pretty sheltered existence, like, I wasn't able to travel much other than like, kind of like maybe if a couple states over stuff like that, I, I grew up in a small town with wasn't very ethnically or religiously diverse. We'll put it that way. And so once I kind of, I graduated, and I went to college, and I moved to other places, and I was like, Oh, wow, there's a whole new world that I was missing out on. And it made me a better person, like the more different types of people I met, and it made me become more open minded. And just, yeah, like less, my ego started to shrink. It's still a problem, but with the ego. But yeah, so that's my goal. It's like you expose people to as many different cultures ideas as possible. And hopefully they will, they'll learn to accept that there's other ideas, that doesn't mean, any of them are the best. It's just like, you know, there's different ways of going about things.

Will Jarvis 3:58

Absolutely. Well, when you when you are going about trying to teach someone something, you know, how do you you, you give them that information, so that it sticks. You know, we talked about empathy, you know, imparting the stories, but how do you actually create a story or like transfer information in a way that a year down the line, people still kind of remember it?

Matt Beat 4:18

Well, that's why I've always been drawn to video. That's how I've always learned best, but it's multimodal, which means like, it's not just visual, it's auditory. And, you know, knowing when to put text on the screen, or the fact that our attention spans are so short. So knowing every 30 seconds or a minute, you've got to do something that's not related to whatever you're trying to teach that's just entertaining or engaging in some way. I learned these tricks in the classroom more than anything. And before that, before I taught actually, I I'm in a band called Electric needle room and I learned like when you're on stage playing gigs, Do you there are certain things you got to do to keep their attention? And so yeah, it's really mostly about manipulation, all of it. It's just tricking people into still like, Okay, you're still listening to me like, yeah.

Lars Doucet 5:13

So how does that how does that play out in like a classroom setting like, like physically when you when you don't like, it's easy to, you know, make a slick cut and well, easy, you know, quote unquote, not actually easy but like, I mean, if you have enough time ahead of time, you can cut together a slickly produced video, but how do you do it live without props or anything like that just a bunch of rowdy and patient kids.

Matt Beat 5:34

I think it starts with building that relationship. So I always made sure that I spent at least the first two weeks of every semester, not really trying to teach them much content, just getting to know them, and having them get to know me, and I'm just having them understand that I cared about them as human beings. And I think once they realize I cared, and I respected them, then it was easier to teach them stuff that maybe they weren't so excited to learn about. So then after the two weeks, you know, it's, I think the main thing I call call the chunking. But I never did something, I rarely did something more than 15 minutes at a time. Also, you know, if I'll admit it, I played some of my own videos in the classroom, but so if I play one of my own videos, like it's a 10 minute video, then the next 15 minutes, we're gonna have a discussion or we're gonna have like a, some kind of back and forth, that's that I lead. And then the next 15 minutes is going to be student centered, where they are exploring something on their own, and you just kind of, and you're never doing the same thing on the st. And one day either. Like, I feel like a lot of teachers, they kind of get, I mean, I don't blame them for this, because it's a tough, it's one of the toughest professions out there. But you know, you kind of get into a groove where you're, you got a formula, basically, like a lot of especially math, no disrespect to math teachers, but you know, a lot of times it's like, okay, the lesson 1520 minutes, okay, then now you're gonna practice these problems, the next 45 minutes. And that's class. And the next class, we'll go over the homework, maybe the first 510 minutes, and I'll give the next lesson. And you'll do the problem is the same thing over and over and over. And that's what I hate that crap. So

Lars Doucet 7:31

it's actually kind of interesting. So to kind of draw a personal connection. I am a video game developer. And I actually started my career in educational game design, and you want to talk about a curse field. educational game design, but one thing I was, I think is kind of interesting to share with you is that it wasn't curse for the reasons you think, like, everyone knows, like, most educational games suck, but like, as someone who's like, been there, and it's proud to say, I made one that like, I think is actually kind of fun. As it was ages ago. It was like my master's thesis. What was most surprising to me was, it was difficult for all the reasons I didn't expect. And it was because of essentially, like institutional barriers. You know what I mean? Like, if I wanted to make an educational game, the people who had essentially let me do that, like, inserted themselves into this process that made the whole thing like kind of fall apart and be like, sort of toxic. And so I think, coming, you know, transitioning back to, like, kind of you here is like, you're in school, you're everyone loves to crap on teachers and on the public school system. Like everyone has some complaint about education, and it's so easy to do when you're not a part of it, you know, as someone who's a part of it, and is proud to be a part of it, and is makes it work, you know, what can you say about the various institutions, so they're not all monoliths, right? Like I was dealing with, like Grant committees and universities and that kind of garbage, which is only tenuously connected to what your your contact with it. But like, can you talk about the institutional side of education and and how you make it work for you or not, you know, just like, what were your contact with? It has been?

Matt Beat 9:10

Yeah, it it is frustrating, like, I think a bit, I think, when I was trying to build lessons, and I was trying to, like incorporate standards. A lot of times, there's a disconnect there. What school boards wants, and then you know, and not just, I mean, yeah, you think about what school boards just if you want to pick on them. The vast majority of school boards are made up of just not even parents even sometimes like, but most of them are not educators. And so and then you have government officials who have never been in the classroom as well. But everybody thinks they're an expert, as you kind of hinted at there because oh, I went to school. I went to public school, so I know what's going on. But I think the main thing that a lot of people don't realize is teachers do still manage to have a lot of freedom. And I think that's why it's really appealing as a profession because you are allowed to be creative. And I've always been somebody who's like, I just let me try to build something on my own. Or let me just have a little freedom to see what works and what doesn't. And a lot of those lessons I made did not work. But I think that's where the disconnect is because there are so many variables like even at the same school, like even class to class, I'd have one class come in, some lesson would totally work. And then the next class that came in, it would be it would flop. And so you just have to always be calling audibles and adjusting. And whenever you talk about a monolithic system or institution, they can't handle that they have no clue. It's so you do have to just trust your teachers who are trained professional professionals, kind of like you trust coaches, like I've been watching TED lasso a lot lately. So I don't know if you guys have seen that. But man, what a inspirational show. But that's really what it's all about in terms of like, there's a certain point where you just have to let them see what works best based on all the different unique circumstances they find themselves in.

Lars Doucet 11:20

Cool. So one thing I wanted to segue into, you know, with your background as a teacher, and your interest in like, these old subjects, and try and find ways to, like, make kids interested and excited about them. I wanted to draw this into one of the big things that drew us on the drew you under the pod for us was he recently made this big video about Georgia. So now we'll and I are, you know what we'll just out ourselves. For anyone who hasn't been paying attention. We're pretty big Georgia lists. We're very interested in the topic, we've done a lot of research ourselves on it. Were very curious about, you know, how did you first get interested in this topic? How did you first encounter it? And what drove you to make this video? And how do you feel about what kind of impact it's had?

Matt Beat 12:02

My viewers got me into it. I had no idea what it was. I'm embarrassed to say that I'm not until like three years ago, i Because, you know, I have a frickin master's degree. I it's not an economics, but still, you think I would have came across Henry George all these years? And I? Maybe I did, I just wasn't paying attention. But yeah, I just I was like, what's up with all these, like, especially teenagers, and 20 somethings that are passionately into this guy and his ideas. And so I finally just like gave him a like, final I'll make a video and, and it forced me to buy progress in poverty and read it for myself. And yeah, it holds up pretty well. It's pretty accessible. It's, I was surprised, because you know, usually you think of 1800s books not. They're usually horrifying.

Lars Doucet 12:51

Yeah, if you just have a mucus list diet, then you will will not suffer from consumption.

Matt Beat 12:58

Yeah, I? I don't know, though. It's amazing. I guess like, the more I learned about it, the more I realized, like, or the more I guess, I'm confused why more people don't like the ideas. I mean, I I hinted at this in my own video. I mean, I I know, there's kind of more obvious reasons why powerful people would not want it to succeed, and you give it a go, but powerful people, that's a minority, you know, like the majority of people I think, would actually find his ideas appealing. And so it's quite fascinating to me how, you know, you had someone who was once mainstream, who essentially now is like, so obscure that it but you know, it's changing made, thanks to folks like you,

Lars Doucet 13:44

I guess. Right? Well, it's interesting, if you want to, we can try to get a little classroom discussion here, because I'd be very interested in your thoughts on my kind of take the answer to that question of like, well, what happens, you know, and yeah, what

Matt Beat 13:54

is your take? Yeah,

Lars Doucet 13:55

my take is a couple of things happened. I think it's important to have that perspective of history. And if we zoom back to 1879, and the late 1890s, right, around the time he died, and the turn of the century, the 20th century hadn't played out yet. Right. And a couple of two really important the 20th century was dominated between the struggle of capitalism and communism, right. That was the big conflict and that conflict didn't really even begin to like, resolve and have a final word until you know, the late 80s and then it just seemed like okay, well now we have the answer right. Like Reagan style naturist capitalism has one that's the answer ridden and of history moving on, and then oh, seems there's some some some problems that are cropping up so ideologically. My first answer is that I think those two struggles like first was World War One and World War Two just like, captured everyone's attention. And then after like democracy versus fascism was temporarily resolved. Then it became capitalist som which aligned itself conveniently with democracy and totalitarianism, which which conveniently aligned itself with communism, you know, there was that struggle. And then after that happened, you know, the other thing lying on behind it was that Georgia's argument has a lot to do with this whole notion of like the margin of productivity, which is basically like, how far out you have to go before you have to pay anyone rent, so to speak, and the automobile was invented and popularized. And that allowed us to expand the margin of productivity very vastly. And so I think my two answers would be, and if you got some pushback, I'd love to hear it is the ideological struggle between capitalism and communism sucked up all the oxygen. And secondly, the automobile allowed us to kick the can down the road for a good century. And of course, there were plenty of cost to that, you know, with the environmental cost alone and all these other issues. And I think now we've kind of, we fought the big ideological wars. Now people are like, Well, are there any other ideas anybody has? And then also, we have, you know, like, we can't sprawl out any further without going insane. And so now we're starting to kind of like, like, like, we've we found that can we kicked? And that's that's kind of my thought, do you reply to that?

Matt Beat 16:16

I think that I think I mostly agree with that. I mean, the most common comment on my George's video that I noticed so far, that's kind of, because I really want to know what I want to hear from the critics and there. I think a lot of people are not critics because they're just ignorant. They just don't know anything about it. But I, I did get some people were like, Well, what about farmers? Like, you know, they, that's what this literally the land is all they have? And that's how they make a living. So how do we make sure that they are taken care of so what's your Yeah, what's your guys's response to that?

Lars Doucet 16:52

So we write that for this group blog called progress and the poverty and poverty substack. And so we're working on an ag article right now, I'm not the author. I'm not one of the co authors. But I've been kind of keeping in touch with them. There's a couple of answers. The first one is that agricultural land is not super valuable today, like land value tax is mostly going to target urban land rather than farmland. You know, it's like hyperbolically, like, you visualize it in 3d, and there's this giant, like, to the moon, you know, asymptote in the city center. And then as you go out to the farmland, it's like down there. So first of all, land, it's not land area tax, we're not going to tax you by the acre, we're gonna tax you by the dollar. And it's, it's the, it's the urban land that's really valuable that we really care about. And then second one is, you want to get into ag policy. It's really it's kind of a nuanced, like, technical argument. But a lot of stuff when it comes to AG is a lot of people say that it's like, okay, well, we need giant agribusiness because no one else can feed the world's population. And giant aggregation businesses more efficient, but the quote, whenever someone says efficient, and you say efficient, what, right, you know, like the whole global supply chain has been optimized for efficiency, but not for like resiliency, we saw that with COVID. And the supply shocks we have now is it's like, you're super efficient. But one thing goes wrong, and you're screwed. And so maybe a global economy needs to be built more like a spacecraft rather than, you know, an Evil Knievel rocket. And so with agriculture, and especially the thing they're efficient I make being efficient for is labor, they're trying to get the least amount of labor per unit of food produced, like make food as cheaply as possible, ignoring externalities, and paying people as little as possible per unit of food. But they're not economizing on land. They're very wasteful of land, right. And so they have all this automation and all these inputs of chemical fertilizers. And they'll even like erode the value of the land over time with runoff and all these other problems, water very inefficient uses of water, which which George would consider land in, we can get into that sense, the different kinds of land, renewable versus non renewable resources and blah, blah. But that's kind of the argument is that it's like, yeah, giant agribusiness is efficient in terms of not paying people. But it's very inefficient in terms of resource use and land use and negative externalities and pollution, like you can make more food per acre with lower scale permaculture than you can in the current situation. And the argument is that land value tax would reform, even agriculture more towards that, but I mean, we haven't even gotten into farm subsidies and Iowa and corn and all of that which are very distortionary.

Matt Beat 19:38

Yeah. You know, that's something I'm strongly against, actually. And that's maybe it's more controversial, but, you know, I do think it's, when we talk about government's picking winners like and losers, essentially, that's like, how is that capitalism? Right? Like, I never understood that like, we don't have capitalism as Ricardo and Smith envisions like. It's like it wasn't ever meant to be. Oh, Elon Musk is able to start this company because he has like a small loan of whatever it was $50 million to get started from subsidies like he's literally. I mean, he's a crony capitalist one on one whenever he says, Oh, I built this. No, you did it. It's taxpayer money that built that, but Right, yeah, I so that yeah, everything that we you said, it just makes it even more appealing to me. And I'm glad that you guys are passionately. Yeah, fighting for it. Because it seems although JJ makalah though, doesn't see he thinks it's dopey. I was messaging him better. I convinced him You gotta get him to make a video on it. Now.

Lars Doucet 20:48

I sent him an email and I sent him an email. Yeah, I'll tell you what I told him. Let me pull it up here. I'm not going to, like finish on anything. He told me. But I'll tell you what I said to him. He received it politely. You know, he seemed interested in not sure if he was just being nice to me. But he said, you know, hey, JJ, my name is Marcie. Say I'm a longtime fan of your show. You know, I loved your video on social credit movement. His argument was basically that like Canada, the biggest landowners are provincial and federal governments. Canada's very barren, very empty, like government already owns, like, just vast tracts of land. So they should be able to do all this kind of policy, like, what would they even do with it? That's a very good point he brings up and I pointed out that, like, the American West is basically the same situation like the government owns, I think, like, 84.5% of the land in Nevada. Right? You know, and like, what's it going to do with it? It's like, anyone wants some desert? You know, nobody lives.

Matt Beat 21:41

Nobody lives there anyways, so I don't see the problem, right? It's like, there's still plenty of other land like that. 15% A lot of people there.

Lars Doucet 21:49

Right. And so that's my response is it's like, it's like, yeah, so the thing is, it's kind of I don't want to put words in his mouth. But I think was this kind of like notion of like land area versus land value? It's a land value tax, right? We're going to tax like the land value tax is going to the vacant land in Las Vegas. And who cares about the land and garage Nevada, like actually pointed out?

Matt Beat 22:09

In my already been counted, right? It's not even counted. Like, it's, you got to think of it as something separate, right?

Lars Doucet 22:15

You can you can even like, I mean, it falls off the asymptote so fast that you could almost forget about it. Right, you know, so when in and another thing I pointed out to him is that Canada actually has a history of land value tax in Vancouver, Vancouver used to have Georgia's land value tax policy, and they like funded themselves entirely off of it. For years and years. Christopher England, he wrote this whole amazing history of Georgia, some it was his master's, master's thesis or PhD, I can't remember. But it's this great article. And he's got this whole treatment on Vancouver's history, and sadly got repealed in a tax revolt, we can talk about why they did that, and how we can avoid it in the future. But Vancouver now has this horrible housing crisis as as a consequence of getting rid of their successful anti EU tax policy. And so you know, that's what I what I said to JJ was. The other thing I pointed out to him as it's like, Now, the other issue, JJ is like, You've often done videos about natural resource policy in Canada, you know, talking about the Canadian conservatives and like, I forget which regions like really big into oil and whatever. I pointed out that land is not just it's not great rhetorically, that George said this, but he treats natural resources as land. And that's kind of confusing. But you can do Georgia's policies with natural resources, even if there's no land value tax in sight. Yeah, country that does this. And it's Norway. I'm a Norwegian citizen. And Norway, their hydropower system was set up by Georgia. So 100 years ago on explicitly Georgia's terms of the people on the water. So we should make sure that any monopoly resource rents that come from it. So

Matt Beat 23:49

that's why all the oil money goes to the fund the public fun, and they

Lars Doucet 23:53

do that, too. And Alaska does something similar, you know, but so 70, or oil doesn't, yeah, yeah. What's really cool about Norway's petroleum system that came 50 years later, and so they had this model with hydropower from like the early 20th century to follow. It was explicitly set up by georgeous. It was an Iraqi immigrant who set up Norway's petroleum management system. And he came in, because he was scared of the resource curse, if you're familiar with that, as a social studies teacher, which for the sake of the audience, is you have these resource rich countries, and they just turn into these terrible like hell holes, honestly, because it means that the government has a way to get cheap money without investing in people. So they don't have to create a diversified educated populace. They can just like sell oil and run guns or whatever. And, and so what this Iraqi immigrant says, like, I've seen what happened to Iraq. This was like back in the 70s or 60s, I think. I've seen the resource curse there. And I want to save Norway from it because they just discovered a crap ton of oil. And so he's like, here's what you do you charge a severance tax on the extraction of the oil, but you heavily subsidize its exports. isn't because people are like, Oh, if you tax severance taxes of oil, windfall profits, no, no drill for oil. Well, Norway contradicts that they've been doing it for 50 years, they're super advanced, what they do is it's like, Hey, you want to find some oil will subsidize, you will help you with your r&d. But the passive extraction, that's the people's resource, you got to pay rent to the people on sitting on that oil lease. And that makes it so what you want to discourage is it's like, here's all these government oil leases, I'm gonna sit on it and wait for the price to go up a to exclude my competitor from getting it and be Wait, wait for a day where there's a better price, right? Oil is not going anywhere. And so noise found this great way to do this public private partnership that avoids the failures of the American system, which is very privatized, and the Venezuelan system, which is just total total capitalist socialism, where you lose the private industry expertise. And that's my stump speech. You don't have to buy it, you know, you can go go see if it stands up. But that's what I sent to JJ. And so I said, even if you don't like to slander your

Matt Beat 25:54

idea, hopefully it wasn't too long. He probably just like, locked it out. Like, yeah, I'm

Lars Doucet 25:58

gonna do strong, we'll see. But he replied, He said, thanks, I found interesting. So we'll, we'll see. So there's natural resources, and then there's land value tax, you can do either you can do both. But the advantage of the natural resources is there's more examples of those than maybe even the LBT

Matt Beat 26:15

Yeah, I love I love what Norway is doing. That's when I did my Norway video a few weeks ago, that was something I mean, it's just like, it's one of the few countries that got it right. And it's amazing that other countries are just not all trying to copycat it. And you know, and now look, I mean, look at Norway, 100%, non renewable, essentially, they're all going to be driving EVs like literally all of them within 10 years. Yeah, I mean, it's there. They got their own thing, like, and the rest of us were not even attempting to play catch up. It's, it's amazing. What's interesting

Lars Doucet 26:53

to me is when I when I talk about Norway, maybe you get some of this too, because you're bigger than me, and you've got like a big YouTube channel. But I'm talking about Norway, everyone comes out with the excuses of why there's nothing to learn from them. There are

Matt Beat 27:03

a small country. Yeah, that's what everyone goes.

Lars Doucet 27:06

The first my reply to that is like Norway, if it was an American state would be like, 24th by population. So, you know, also,

Matt Beat 27:15

it's like, anytime I hear that, like, you can scale up literally anything. And what do you think corporations do? What corporations are very efficient. That's literally like a economies of scale. Hello. Like, it's, it can be efficient at scale. That's so whenever I hear that it's just ignorance. I get so tired of that.

Lars Doucet 27:35

I think what people are getting into when they say that is they're responding. And I think, honestly, to American national political gridlock, so it's like you want like, because the scale thing is important, you know, because Norway, for instance, is not a member of the EU. Um, that's kind of a technicality, because they're still like, subject to a lot of the same trade treaties that effectively puts them kind of in the EU. But it's like, it's a small sovereign nation. I mean, they got a straight up King. I mean, not that much power. I mean, but like, like, they're a small little country that like, does what they want. And like, I'm sure I'm like two or three degrees away from the Prime Minister at best, without even like looking just because like, I'm sure my mom knows a guy who knows him or her. I can't remember like, it was a her last time. I haven't checked up after the election of who's currently in power, but like, but like American politics, like how many degrees away? Am I from a Joe Biden? Probably a lot, right. And then like that dysfunction is so huge. I think that's what people are responding to. I think we've like lost the notion that we can do bottom up politics in America, like do I get

Matt Beat 28:35

also the argument that federalism in the United States is unique in terms of you got 50 states that all have different policies, and you can't, it is hard because like you look at FEMA, for example. One reason why FEMA is a so ineffective as a federal organization is because they got 50 Different states doing 50 different things, and they're trying to figure out, Oh, what do I need to adjust for this state versus this state? Like, like, you look at Texas response to hurricanes versus Florida response, and it's way different. So I don't blame FEMA, or it's understandable to me why FEMA just sucks. Helping people out Ron.

Lars Doucet 29:16

Yeah. Well,

Will Jarvis 29:17

Matt, that, that brings up a really, really interesting point. Here are some of the things you've been talked about. You're a student of history. Do you think political polarization particularly in the US, is it cyclical? Or you know, is it just increasing on this? Like, is it gonna get worse and worse and worse? Does it like peak and then it come back down? Oh, what's your sense of that? Just just looking at the past? Can we learn anything from that?

Matt Beat 29:39

Of course, we can. We can learn a lot from the past that government sorry. Yeah, it is somewhat cyclical. I think the difference? I mean, I've had many people ask me this, like, do you? Do you think that we're more divided now than ever in the United States, and all of our history, and I say Yes, other than obviously, the 1850s and the Civil War, this is true, we are more polarized than any other point other than right before the Civil War. The unique situation now is social media. That's really all it is. We don't need to complicate it. It's we have insulated ourselves into little communities where everybody agrees with us. And it's when you sometimes venture out of those communities. That's only when you know how much like how tribalism has gotten out of control, because like you, if everybody just stayed in their little bubbles all the time, you wouldn't notice it. But occasionally, like on Twitter, like what happened today, when I tweeted something that was kind of cool, though about my audiences, I do get a quite a big net, politically speaking. So I love that. But yeah, you get tribes that interact sometimes. And they're not used to interacting, let's be honest, there. They're just not like, they don't even know how to interact, they've lost that ability. And a lot of it is yet because they don't interact in person, they don't even see each other in video, like at least Discord is helping with that these days, I noticed with discord, a lot of them hop on the video chats, at least audio so they can hear tone of voice, or they can see body language. Whereas if it's just back and forth on Twitter, oh God, like what a nightmare. And that drove politics the last 10 years like it, you'll notice it's got really bad beginning and the early 2010s. That's really when things. It's not a coincidence. It's not correlation. Correlation is causation, in my opinion, that so that's caused her so we got to get beyond social media.

Lars Doucet 31:47

So social media, so is it. Would that predict that it's not a uniquely American phenomenon? Because everyone's using social media? Right? Like is, I mean, would you say every country is suffering from this? Are we uniquely suffering it because of additional things America throws into the mix?

Matt Beat 32:02

I think I think most countries are suffering from this right now we hear the United States, we don't like to pay attention to other countries. But if you look at everywhere around the world, it's happening. Like, take India, for example. Like, it's some of the back and forth. And this is like, some of the nicest folks I've ever met through my channel are from India. But you see them going back and forth on politics. And it's like, wow, this is familiar. So I don't know, like everything I've noticed this is a worldwide phenomenon. And I think the only reason why we haven't seen more, I guess disruption in certain countries is probably because of the, you know, less freedom, more totalitarian. Maybe there's a monarchy that kind of, is that unifying force that we don't have in the United States? Like you know, maybe even in Norway, I don't know like maybe the the head of state when they're the monarch, but that's, I guess, an argument for the monarchy which I personally am against, but I understand when you have a head of state who is just born into that position, that can be a unifying thing for a country so maybe that's something

Lars Doucet 33:13

I'll go on record as being a an extremely limited monarchist of I'm prone Norwegian monarchy and anti almost all others. Just just as I'm I'm like, Schroedinger as monarchy like when I'm in America, I'm like a hardcore like, little our Republican in the sense of anti monarchist, reasonable. A lot of that's just the history of the Norwegian monarchy is that it's, I mean, they're not perfect, but they're like one of the most well behaved monarchs and monarchies they're so short lived to, they've only been around like, barely more than 100 years, their original, like when Prince Karl came over from Denmark to become like, he was elected by President plebiscite. Like the people chose to have a monarchy when, you know, in the early 1900s, when we finally got our, our independence. But what's interesting about the whole social media thing and polarization is, I mean, one thing I think, in America that makes things worse is like the role like, at least on the conservative side, which is more like I grew up in, I made a bunch of liberal friends, but I grew up in conservative Texas, right. And one thing I've learned is we're all like stuck in the suburbs, right? So not only are we with the social media, are we all talking to each other online? We're also like, not meeting anyone in person all that much. And I saw what like happened to like, teenagers and kids during the pandemic, when they're all locked up to. So do you think like, just the lack of face to face in our physical lives contributes to it uniquely in America or not?

Matt Beat 34:38

I would say maybe a little bit. I don't know that. I haven't thought about that. Maybe enough. So I don't know. What do you think will we feel like we're talking like relieving out of the conversation?

Will Jarvis 34:51

No, no, no, I think it's a it's a real challenge. I do wonder how much of our political polarization is driven by AI think social media played definitely plays a part. But also, I wonder if you know, lower economic growth. It's more, it's more systematic and something like that where the pie is not getting bigger as fast as it was pre 1971, there's less to kind of divvy up. And so then you get you kind of fight harder because it's more of a zero sum or something like that. I don't know. Do you have any thoughts on that? In Do you buy it to me the stagnation arguments about what happened since 1971? With cost disease and, and our inability to build new infrastructure?

Matt Beat 35:30

Yeah, man, you put it a really well, well, I've never put it that way. It's a good way to put it with a pie analogy. I like that. I always just say, Well, growing extreme wealth inequality, but a lot of people they kind of, especially more conservative economically, people were like, No, wealth inequality is good. We want wealth inequality, like, but yeah, so we wealth inequality is inevitable. You're right, the pie has not grown as big as it needed to be since the 70s. I was born in 1981. And pretty much my entire life wages have been stagnant. Only recently have they gone up? But guess what? Inflation doesn't even matter. Yay. So and then, as far as far as also, I know, I mentioned Ted last Oh, here's another reference. This time a movie. I was watching dazed and confused the other day, have you ever seen that? Dazed and Confused? Yeah, I watched it. It's been a long time. But I watched it again. I was like, and it's interesting. It was made in the 90s. But it's about what's going on in 1976. And wow, what a fascinating year, that was 1976, the year my dad graduated high school, that almost you can make an argument that that was peak America, like that, I looked up the inflation year rate that year, it was like 4%, or 4.5%, it was reasonable. It wasn't out of control. So that was one of the few non stagflation years. But also, that was back when people still, you know, there was more of a partnership between public and private. Where you had, I mean, sure, there was this distrust of government. But that was a good distrust, like, you know, distrust of corruption. Good. But there was still like, a safety net in place, there were still. I'm not saying I'm, I'm not a big fan of income taxes. You guys know that. But probably, but at least that the wealth inequality was at the lowest that had ever been. And you didn't see this desperation that you see today that has slowly been growing since the 70s. It's, it's bad. It I mean, I, I don't know, like, and it's frustrating to me, because like the 10% of the country of maybe the entire Western world that's doing really well. They tend to kind of they're the ones who are in media, like mainstream outlets. And so they, I feel like they're just so out of touch all the time of what's like, you know, so I think a lot of a lot of people need to be more, because a lot of the problem is the people that are really struggling, they're not visible, because they're always working, they're working three jobs, they don't have time to like, just go start a podcast, and everybody's gonna listen to it. So

Lars Doucet 38:18

that that kind of brings us back to what you're saying about empathy is that it's like, how can you make good policy? If you're not even aware that there's a problem? And then if you are aware that there's a problem that you've classified those people is not mattering?

Matt Beat 38:31

Yeah. No, I, and I've been very lucky in my life. But you know, now I make more money doing videos on YouTube than I did teaching, which is another really messed up part of our society, the fact that that even happens, but I feel like I have responsibility now. Especially because I like, I mean, I was the thing that I love the most about teaching was the relationships. And I think a lot of our relationships are hurt right now, because of these other things that are beyond our control, like, so we, I think we need to find ways where we can become more connected, not social media. Better Way, isn't that, and then maybe that the progress will follow after that? Not not an easy task. Yeah. Well,

Will Jarvis 39:23

that made you this this reminds me of a really interesting question, I think largely actually may have come up this originally, but you mentioned earlier you were talking about you know crony capitalism you know, we've been talking a lot in this podcast in one way or another about monopoly and the nature of monopoly whether that be land or or other things. But you know, when it comes to being a YouTuber, you know, how do you feel about platform monopolies? Do you think they have too much power? Do you think we should do something like that about that or you because you know, if you want to put a video on the internet, youtube is kind of the place to go there's not really another place. Now. They didn't build that by I don't think they did. Super anti competitive practices they might have? I don't know. But but it was kind of just just naturally formed. How should we think about YouTube as a plat and all these big social media platforms? Because they all they do have some negative effects, perhaps. And there's some things we've talked about in this podcast so far.

Matt Beat 40:15

Yeah, it's hard for me to hate on YouTube too much, because they are very fair to their creators, like they give a higher percentage of revenue compared to nearly every other outlet out there. But you're right, like they kind of control the market and Tik Tok kinda was kind of a threat to that. But then now we're finding out that with YouTube shorts that's taken off and that and so tell us about that. Yeah, YouTube shorts is like they just YouTube just announced. I don't know if you saw the news, but they had like, 1.5 billion views on YouTube shorts alone last month. And so

Lars Doucet 40:52

yeah, in your videos, like your YouTube shorts, get like, way more views and your other videos.

Matt Beat 40:57

That's why I'm making more and more of them. Now. I'm just like, Okay, I guess I better do this now. But I, it's still I mean, yeah, I do feel trapped sometimes. And I would like to maybe go in a different direction. But I know that YouTube algorithms will not like that so much. And I recommend my videos. So I'm kind of, you know, I'm the YouTube president's guy, mainly because of that, like, I feel like I have to, I'm obligated to make at least one president's video every month now. Because that's the those are the videos that do well, and that this is how I make a living now. And so yeah, it is problematic. And I get like, there's some censorship going on. Private companies can censor Yeah, I get it. However, you know, I, I am a firm believer in antitrust legislation and regulation, which we haven't seen as much as executive action on that recent decades, like, we always say here of like, oh, Teddy Roosevelt. And after that, like, all this trust busting that happened 100 years ago, but then, in recent years seems like a lot of that, that does not pan out. I mean, so maybe I would like to see more active? Well, it needs to happen in the judicial system. But yeah, we need to see more antitrust. Action going down.

Lars Doucet 42:20

Speaking of monopolies and stuff, I have an interesting theory, I'd like to see what you think of it. It has to do with, you know, the struggle of the 20th century was between capitalism and socialism, which very naively was put as, like, free enterprise and like decentralization versus like, like central planning, right, top down. Yeah. You know, but what's interesting is sometimes what's pitched as one is not what you actually receive, you know, if you have one company that just dominates an industry, and that's like the whole industry, at some point, you've got central planning, and all the inefficiencies that comes with it, because it's like, well, the customers will just take whatever I tell them, I have no pressure from a competitor to get off my duff and like, fix this glaring problem that I don't have to worry about, because I've got a good gig running, and where else are you gonna go? And so like, my theory is basically that as something a creates more monopoly power, it starts to look a lot more like a central planner, and have the failure modes of the central planner, and I was wondering if you agree or disagree with that?

Matt Beat 43:25

Yeah, that makes sense to me. I do cringe at the false dichotomy of communism and socialism, supposedly, on one side and capitalism on the other. It's like, Yeah, but in reality, like, we know how it all turns out, it's it's nothing. I mean, that the way I taught economics is kind of what you were hinting at with, you know, you do have a spectrum. On one end, you have a command economy, which I think the closest thing we have to that today is North Korea, where it's top down completely. But as far as major economic decisions on the other end, you have totally free market economy. But Hello, nobody, no country has a market economy. That's absurd. Like, we're all mixed economies, like on a spectrum. And so you think about Yeah, what you were saying to they okay, maybe if you have a market a free economy, then you're gonna have this certain corporations just get so powerful that they it becomes inefficient. I get that. But at the same time, we always forget that a lot of these corporations get powerful through the help of government because they get subsidies because the they regulatory capture and because I mean, the government's just let these companies buy out the like, look what Facebook did and YouTube Google did with if they had a competitor, they bought their competitor and this trend continues to this day like Facebook just buying Instagram And we all just are okay with that apparently like, and even though like, our dissatisfaction with both Facebook and Instagram has only gone down ever since that, so I, we just put up with it. But the fact is that government along the way, they're always like they're helping out whoever already has power. And the reason why they help out whoever has power is because it helps keep them in power. It's really that simple.

Lars Doucet 45:26

Now we can we can get all depressed about this and just get sad. But as a as a teacher of history, you know, it's not like America has never been able to like unscrew itself, right. I mean, you said it's like people's like the most polarized we've ever been since the Civil War. I mean, that's kind of a big caveat. Like, we forget this country literally tore itself apart, and one of the bloodiest, like wars on this continent. And, you know, we we ended one of the most horrifying problems we had of slavery. I mean, its legacy continues in many awful ways. But like, we freed the slaves, we fought a war. And we were not two nations now. Like, we're one nation, we're, you know, so like, I wonder if you want to talk about some of your favorite times America has come back from the brink of problems doesn't have to be the Civil War, you can pick that one if you like, you know, are there any like your favorite problem? We walked back from whenever when it seemed all hope was lost? And how did we do it?

Matt Beat 46:19

Yeah, I would say there's probably four examples that popped in my head right off the bat. And that is the very beginning of the Republic, when we had we fought this war against an imperial power, and we could have easily just had a monarchy ourselves. But instead, we'd go with a republic, actually have a little bit of democracy and no king representatives who are just there for a little bit most of it. Yeah, like it was kind of crazy that the first of its kind. And so that was my first example like, especially with the Bill of Rights, like where it's like, it's strictly like in a middle finger to the government saying, No, these are our civil liberties don't touch them. So and then the second, I think, big moment was after the Civil War, reconstruction, early reconstruction with the Radical Republicans, when they were able to kind of when they still had a super majorities, they were able to get like major legislation, like the 14th Amendment, I think, is the most important part of the Constitution. In terms of Well, after, after the the Bill of Rights, I should say, like, obviously, the First Amendment's pretty big deal, but so the 14th Amendment get getting that passed, and 13th and 15th, as well, and, you know, sweeping civil rights legislation. And then jump ahead to, I would say, this is kind of a, a kind of a, an appeal to conservatism, actually, where after World War One, we actually saw a bit of somebody on the left, who was kind of running things more authoritarian, I would say, with the Woodrow Wilson administration, and with World War One like, because like all around the world, you saw, like, essentially, authoritarian governments rising, and then ultimately causing all I mean, the war itself was a big, big reason for that. And then, but after World War One, you saw like a reversal in many places, especially the United States, where it's like, we're gonna, we're gonna go back to where we were like, ain't no thing, you know, we're going to reuse the power of the presidency, we're going to Congress is going to not spend so much money and just chill out. And yeah, it kind of backfired and led to the Great Depression. But you know, and then the fourth moment is the 60s. You know, you had essentially a New Deal coalition, as they call it, where you had just much of the social safety net, the welfare programs that most Americans do approve of, that still exists today that were really were built during that decade. So I think that's another. So yeah, I think when it happens, it happens very quickly. Why? And I think we're gonna see it, we're overdue for it, actually, because we have been living since the 70s. And a conservative age we've, it's funny to me, like even Elon Musk tweets out like that, Oh, man. Like, I'm the center. And but everybody, we're just gone so far to the left with the woke agenda. I'm like, What are you even talking about? Like, maybe you're maybe talking about certain social things, I guess. But in terms of economics, we've gotten clearly to the right, like way, right. And so I think we're kind of overdue to kind of shift further to the left, at least with economic issues. That's that's the way I see.

Will Jarvis 49:43

Matt, I'm curious. You mentioned some some interesting things there. Is there is there a sense in which this this kind of libertarian critique of American government has become more true over time in the sense that we were able to do you know, get to the The Moon, like nine years, you know, we did Manhattan in like three or four years. With these huge infrastructure projects, we built the Pentagon and 16 months, like all these these really crazy, like state capacity, you know, ability, the American government was able to do a lot more things a lot more efficiently. Now we have trouble, you know, putting together websites and in any reasonable amount of time and just all these kinds of problems, it just seems to work much less well. What's your Is it your sense that American government does work? What less well? And if so, why do you think that is?

Matt Beat 50:32

That's a good question. I. Yeah. I mean, I think that's kind of why libertarianism has been more appealing in recent years, because we've seen like, the thing first example I think of is like the Obamacare website being launched, and it being a disaster. Yeah. Yeah, I mean, I get it I, I'm very critical of government programs, because a lot of them are inefficient. But that doesn't mean that government can't get stuff done. And one thing that the government is good at is paying for stuff. And that's so that's another thing, like, that's why I'm a big fan also. And I don't want to go off on a tangent. But I like UBI. Like, I really think that would be something to really bring prosperity, because you're you're skipping over all the middlemen, like the bureaucracy, you're just going. And yeah, like with the Pentagon being built so quickly, with mentioned the Manhattan Project, and all these big things. When you think about big things, a lot of times it's not that many people that are really doing it. It's a small group. That's so and also like, again, this has been a theme of this episode, I think that public private partnership, like GPS technology, that was government that was literally like, our cell phones that we take for granted, like, Oh, we're it knows where we're going. That wouldn't exist. If it weren't for what government, the small group of people within the government did in the internet, right? Yeah, the internet, the entire internet. Yeah, they created the internet, like, it's an, I don't know, when we think people's like have this misconception of innovation. They just always assumed it's only the private sector that we have all these like inventors going right? Like no, like, a lot of times it takes investment, it's really it's a capital. And that capital, a lot of times comes from taxpayer money. Let's face it,

Lars Doucet 52:28

make sense? Tie in a previous thread back to a previous thread, you know, talking about like, can change happen. And then also, your YouTube channel I've seen and maybe you mentioned this, but I saw a couple of your YouTube shorts about rank choice voting and approval voiding. I'm not sure if you've seen it, but we did a podcast recently with.

Will Jarvis 52:46

We're in handling. Yeah, hearing him runs the Center for election science. He's been very successful with implementing approval voting. And

Matt Beat 52:54

I've worked with them before. They're a great organization.

Lars Doucet 52:56

Yeah, he's been just like getting it done, which has been really interesting to me. You know, we interviewed him about like, how do you do it? Like, how much does it cost per voter for you to like, succeed? And like, and he's just like, going through and just like reading it off. So what do you think of approval voting rank choice voting, tell us which one's your favorite? And if you think it can help depolarize America?

Matt Beat 53:16

Oh, absolutely can help depolarize. US that's that's the way forward. That's I'm a big fan of voting for reform. I think I had another viewer actually a Patreon supporter, that they turned me on to star voting, which is essentially a combination of approval voting and rank choice voting

Lars Doucet 53:35

just for the audience that single transferable automatic runoff. That's right. Gotcha. Yeah. So

Matt Beat 53:41

I mean, the bottom line is I like all those are good. Like I my favorite is star voting. But second favorite is Frank choice. Third favorite is approval. All three are amazing. Score voting gets a little tricky, but I still think that's it's still solid to like, I get why people say approval voting is a little bit like they could lead to certain like, shenanigans, okay, but look at the shenanigans we have now. It's like, yeah, and it all of them would make us less polarized. That's all of them. And

Lars Doucet 54:12

thing you just said, I want to jump off of that. It's like, look at the shenanigans we have. Now. Often, when talking about policy, I often feel like someone always compares it to like, the most perfect thing ever, you know, when when what it should be compared to is what we've gotten now. You know, and so like when I'm talking about like land value tax policy, like I think like a lot of people forget that we already have property taxes, and we could reform those property tax systems. One little step towards land value tax by just exempting all the buildings and collecting the same amount of value without having to change any laws. And I was wondering what your thoughts on like one step better than the status quo as as the goal rather than compared to some perfect utopia, and that's why we can't change anything ever.

Matt Beat 54:56

Yeah, I'm totally that's my my philosophy you got to be I think, I believe in gradualism and in pragmatism and coalitions and compromise. That's it. It's not flashy, but and then sometimes it is going to be dramatic like I was hinting at earlier. I think it's going to, we're going to see a lot of reforms happen all at once. But the bottom line is, we've got a conditional society. So that's why I'm the Center for election science. Yeah, they're they do great work, because they're doing the right thing. They're going to all these local localities and reforming and that's really like, what we all should be doing. We should be going to city council meetings, and we shouldn't be going to school board meetings, that not yelling at them, but just listening and, and being more active.

Lars Doucet 55:44

I have I have been given a lot of hope lately by the yimby movement, which stands for yes, in my backyard. And these are mostly people who are you familiar with that movement? much

Matt Beat 55:52

at all? No. Oh, intrigue.

Lars Doucet 55:54

You aren't your your, it's your lucky day.

Matt Beat 55:56

So hey, MB.

Lars Doucet 55:58

So yeah, gimpy is the opposite. So it's it's, it comes out of the market urbanism kind of movement. And so basically, like you said, those local school board meetings well, especially in California, and certain other cities that have like really acute housing crises, like every new development has to go through like a request for public comment for like, a zoning variance, like approval, and the NIMBYs all show up and tend to like shout them down. And so there's been this burgeoning grassroots movement of young bees, who are the opposite who go and like push for? No, we actually need housing, because we're never gonna get cheaper housing unless there's more housing, regardless of like, and if you want to make it government subsidized, whatever, if you want to just be market rate doesn't, whatever, yes to all of it, we need more. And they've had some victories, like they've passed some California laws, even of course, human beings are not always like explicit georgeous. But they're clearly like natural allies. And so we're, we always try to help them with what they're trying to do and, and kind of share things with them. One of their big moves is against is repealing zoning laws, which I'm not sure if you've done a video on zoning yet, but there's a really great book by another previous podcast guests we had on em Nolan gray just came out. It's called arbitrary lines. And it's this whole history of American zoning, where it came from and like how its explicit zoning was explicitly a segregationist tool both in the racial and in the economic sense. And he just goes through all the legacy of it. And it's been really it's been really eye opening and fascinating to me. So just if you need some grist for the grist mill, yeah,

Matt Beat 57:36

I've read a strong towns, and I'm familiar with that movement. And what turned me on to that was YouTube channels, like, not just bikes and climate town, and yeah, I should shout out to all of them, like, they've got me more aware of zoning. That's really, and it's funny, because like, a lot of people don't bring it up. They still don't like, as far as the housing crisis, like John Oliver just did a big thing. I didn't hear him mention zoning once, when he was talking about rising rent prices. Like, right, if there was, there's a disconnect. So yeah, we just need to keep shouting it. Yeah, I

Lars Doucet 58:12

mean, I saw I saw all of his videos, it was really interesting. Because like, he's, I mean, he's had a lot of things like tenants need more protection. And like, we need to like pass laws, like keep runners from being exploited. And I'm for all of those things. But there wasn't like it was just kind of like treating symptoms. It wasn't getting at this root cause of where where does the power come from? Like, if landlords have to compete for tenants, they're not gonna be able to abuse them as easily. And you're not going to have to like pass laws and kind of begged them not to mistreat people. But so like the MB movement is something that that gives me a lot of hope, because they've had some success. You saw the Reddit F cars subreddit come out of nowhere, and they're all really into urbanism. What's interesting about zoning is, it seems like this like really kind of boring topic, most people's only, like contact with it from my generation is from SimCity, which from the lens of a game designer I now see is like this insidious, like pro old schools zoning propaganda, you know, you literally can do any city action, that's not zoning. Right. That's like the only game in the game is like do zoning and balanced budgets. But to ask you a question here is, you mentioned that there's all these young people who got you introduced in Georgia's and that's kind of interesting, because it's this 19th century movement old guy with a beard seems like only history professors would know about it. Tell us about all the ideas young people are sharing with you. I mean, about Georgia ism urbanism, or anything, you know, and whether that gives you hope or not, or what,

Matt Beat 59:43

oh, it gives me so much hope. Like, that's a big reason why I got into teaching period is because younger people, they're still idealistic enough and they have great ideas and a lot of them are smarter than the other people. Let's let's admit it like and So I'm just so inspired. And there's so many examples of I mean, a lot of my video ideas these days come are, they start out as a comment underneath one of my videos. And that's why I have a list of 1000 videos to make. If that's okay, though I, yeah, so I would say like, a lot of my audience is actually fairly young, a lot of them pretend to be older, you know, like the be 13 to have an account. But they, yeah, and so, like, I've had some super fans. When I say super fans, I mean, they found my personal information and reached out to me, and it was a little creepy. Their parents found out don't worry, but like, they're brilliant, though. And I'm just like, wow, if I was where you're at now, and when I like, I was an idiot when I was a kid. So I think we should kind of end maybe on this optimistic tone, because younger folks, generally are pretty, pretty smart.

Lars Doucet 1:01:02

One, plus one, and we'll let you go here is, I wonder if one of the things that's different for young people today is it's so much easier to find all the information, you know, like I've seen, like, like, my, my nephew will, like, be like, all into a bunch of 80s music. And I was like, I didn't even know like, what music my parents had, because like, I couldn't play like their records and my CD player. And now you have access to like, the entire world, you know? And so like, do you find young people getting interested in old ideas? Because it's just easier to hear about them now. And and you know, I mean, you're particularly in the history field.

Matt Beat 1:01:40

Yeah. And I think the difference though, is are they're actively seeking it out. They're curious, they, and they want to find stuff that no one else has found. Because like, it's currency, it's social currency that like, I know, something no one else does. And so yeah, that's, that's where it starts. But I think and then sadly, people my age like, I'm 40, I, a lot of people my age have stopped being curious. And when they go to the internet, they're going to their safe spaces, their stuff they already like, and so that but you can't Yeah, like so it's almost like, you notice that all the new great memes, they come from like some 15 year old, they don't come from like, and they and by the time Nike catches on to it. It's five years later. So we need to listen to them. And yeah, they have access to everything. And they know how to find it. It's all it's all. Yeah, that's another difference. Right? When I was 15, I, I had dial up internet. I didn't even have it at my house, I had to go to my friend's house to load up a page that took like 10 minutes just to load it up. So that's the difference. It's all there. They've added change access to information, and they're also willing to go searching.

Lars Doucet 1:02:51

That's great. Yeah, that's great. And talk about it. Yeah. Well, thank you so much for all for all you've done for all your videos for all your outreach.

Will Jarvis 1:02:58

Thank you. Yeah, absolutely. Mr. Bae, we really appreciate you. You coming on the show. Where can we send people where can people find you?

Matt Beat 1:03:05

Yeah, if you just search Mr. Beats on line, you'll Google will say, Did you mean Mr. Beast? And you say no, no, I met Mr. Beat ve t. So that's where you'll see. Probably my youtube channel will pop up first, but I'm I'm also on other platforms. So that's great. Thanks, man.

Will Jarvis 1:03:25

We really appreciate it. Thanks

Matt Beat 1:03:26

for having me.

Lars Doucet 1:03:26

Yeah, thanks so much for coming

Matt Beat 1:03:27

on. Great conversation.

Will Jarvis 1:03:33

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com.

Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Unknown Speaker 0:42

Well Reid, Thanks so much for coming on today. How are you doing?

Reed 0:45

Hey, I'm doing pretty well. I'm calling in from Washington DC. I just moved here a few weeks ago.

Will Jarvis 0:50

Awesome. Awesome. That's That's great to hear. It's great to hear. Read. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Reed 0:58

Yeah, absolutely. So I'll start by sharing a little bit about myself my background how I got interested in what I'm interested in. So I grew up in Norman, Oklahoma, had a wonderful childhood. There were Yeah, boomers sooner. Exactly. Yeah. So my dad was a professor of physics at the University. So I grew up right on campus, I could hear when there were touchdowns, I could hear them, like screaming and cheering like the fireworks going off. So yeah, it was just very much a faculty brat. So that was, you know, very good childhood. Two events happened in high school that changed my life. One is that my dad was diagnosed with leukemia and passed away my junior year. And then also my junior year, there was a tornado that hit more Oklahoma, which was the neighboring town, and tragically killed seven elementary school children during the school day, because they didn't have a proper storm shelter. So the school basically collapsed on them. So these two things taken together, kind of changed me from the happy go lucky kid who just played a lot of sports, and you know, watch TV, too. I think thinking about life a little bit more seriously, and realizing that, you know, there is injustice in the world. And there's things that you can do about it both. Thinking about kind of the helplessness of dealing with my dad's cancer, to the helplessness of watching these children passed away, tragically, led me to want to figure out, you know, what can you do on a policy lens or on a structural lens to help people. And so with the tornado incident, basically, the, the response from our state government was, you know, tornadoes don't strike the same place twice, it's not going to happen again, we're not going to do anything different to protect children and schools. And so at the time, I was very angry, I was motivated, I joined initiative to get onto the Oklahoma ballot, a vote on whether schools should, or be required to have storm shelters. And so I was spending my senior year of high school, going around to parades, to Walmart's to malls, basically trying to get every possible stranger, I could just sign this petition. And that was kind of my first taste of public service and about thinking about not only public service, but also how important leadership is at a state and local level, or any level, and how it can literally mean the difference between life and death. And these are things that oftentimes, you know, people don't seem to care about or don't seem to pay enough attention to. But you know, when it happens to you, or happens to, you know, the kids in neighboring town, it's very real. So that was my background in high school. I then went to college at Harvard, and was very involved there on similar stuff in the state of Massachusetts on legislative advocacy initiatives. So I was leading a club where we would take about 50 people every semester to the State House. And we would host these lobby days, where we would support legislation ranging from everything from like gun violence prevention, to economic development, and housing policies to environmental sustainability policies, all sorts of different things. My senior year, you know, we started actually drafting your own legislation, because we had strong relationships with our state representatives. And one of those bills that we drafted, was inspired by a family friend who lost their life, tragically from from suicide, from, you know, with a firearm. And so we were inspired to draft legislation, two bills, one of which was signed into law after the Parkland massacre. And so I was, you know, you know, very involved in in that scene with gun violence prevention and just legislative advocacy as a whole. So that was my background. I thought after college, I would want to continue doing things in the policy space. I was also very much interested in returning to Oklahoma at some point, because that was my home and that's where I felt like a lot of change could happen. My senior year of college, I saw basically in mass exodus of my friends, many of whom had, you know, wanting to make the world a better place who had you know, come to college doing all sorts of service things. You know, they aren't taking jobs at places like McKinsey and Google and Microsoft, and you know, you name these, you know, big companies. And they're going to San Francisco, New York, DC, Boston. And you know, these are people who are coming from literally all over the world and do like from communities that that need them and go into a few select industries that are, you know, definitely not focused on social impacts. And if they are making an impact, it's more of a collateral effects, I would say. And, you know, at that time, I was pretty frustrated at kind of that same sort of passion that inspired me in high school, I wrote an op ed in my student newspaper that basically said, Hey, look at this, like the Harvard administration is basically enabling and empowering these corporations that swoop in and basically systematically suck out our talent to these basically a, a political, amoral institutions. And what are we going to do? Like, how are we going to address the big challenges of this country if we're having this systemic brain drain from the communities and causes that that most matter? So after that, the craziest thing in my life happens, which is a student at UNC Chapel Hill actually reads it on season on Facebook, and reaches out to me and says, Hey, I want to start this organization called Lead for America, do you want to join my team? So at this time, you know, it was like, I just was writing an article, I had no idea that I could actually do something. But he convinced me to have me join his team. He promised me that, you know, even if we couldn't raise money, he would use his like, personal savings to support me in the first summer. So I was like, alright, well, I can tell my mom that, so I'll do it. So I jumped in. And that is the start of lead for America. It was me, Joe, who was the CEO and a student at UNC Chapel Hill. And then a few other recent college graduates, we all moved to Chapel Hill, we were living in a two bedroom apartment and way too many people and two bedroom apartment, you know, eating peanut butter and ramen, I mean, just exactly what you would imagine, and started building it, you know, and we were able to get things off the ground, we were scrappy. To date, we've we've grown, I would say past the startup stage. And now we've placed over 250 fellows in over 40 states through a fellowship program. And the way it works is it's National Service Fellowship through AmeriCorps, where folks who are some of the most remarkable people, young people in our country, people who were student body presidents, or Truman scholars, or Marine Corps, veterans or division one athletes, people who are very passionate about their communities, it's an opportunity for them to go back to their hometowns or home states and work on critical challenges in their communities. So usually, with local governments, sometimes with nonprofits, working on all sorts of different issues, from environmental work, to education, work, economic developments. And it's all very much nonpartisan, it's very much, you know, we're getting people to go to communities that look very, very different from one another, we have people go into New York City and Los Angeles, but we also people go into Alito, Illinois, or Arcata, California, or, you know, rural places in South Carolina. And so our program has always been about bringing people together who are passionate about their communities, get them to go back to those communities. And not only just do it for the one year fellowship term, but actually find people who are committed to doing this for the rest of their careers or lives, because that's where the real impact comes is what they're going to do afterwards. So we select people who are really committed, and they want to become leaders, their long term, the people that we brought on, have gone on already, in our first four years to start nonprofits in their communities run community centers, become elected city councilors run for state house, you know, Vance, to senior leadership and their local governments. And most of them very much do plan to stay in their communities for the rest of their careers and will go on I'm sure to become governors, Congress, people, etc. So very proud of our work, at least for America. And we're continuing to grow. We've, you know, been fortunate to raise a lot of money recently, through AmeriCorps, which is a federal national service program, we've also been fortunate to have some great philanthropic support. And we've also been able to expand our executive team significantly in the last six, nine months. And we're at a great sort of transitional point from, I think, building a scrappy program to being able to really focus on quality and making an art programs, an American institution, something that if you are an aspiring young public servant in this country, that lead for America could be a top option for you to go back and serve your community. So that is lead for America. I I can talk a little bit now about the new work that I'm starting, if that would be helpful, too.

Will Jarvis 9:22

Yeah, I want to dive in first, before we get to the new work, which I do really love. You mentioned some really interesting things there, which is, you know, you've got all these students, ultra bright students at Harvard, who, you know, senior year comes around, what are we going to do? Most of them end up in banking, finance, you know, I finance consulting, big tech firms, etc. I'm curious, why do you think and they all seem to go to the same places right? You know that you go to San Francisco, you go to DC you go to New York City if you don't go anywhere you go those places, you know, sudden you've done something really wrong. Exactly. Which I find very surprising. You know, I was reading a file Under novel recently, and there's that you know that one of the kids goes off to Harvard. And then he comes back to his small town to practice law. He was like, I think it was the weirdest thing that really jars you, you know, when you're reading this book, you're like, wait, this would this would never happen today, unless you read, you know, like that this might happen. But this is this is a very rare occurrence. What do you think has changed over time that, you know, had the agglomeration effects of cities just become super powerful? Why aren't people returning to their local communities to give back as often as they used to in the past?

Reed 10:32

Yeah, that's a great question. Well, and I think like, you know, there are so many books and, you know, things you could read about about this topic. And there's some great books, there's one called the tyranny of merit, there's another one called the meritocracy trap. These are books written by, you know, tyranny. merit is written by a Harvard philosopher meritocracy trap is written by a Yale Law School professor, and they both very much, I think, dissect this larger culture, some through kind of a Marxist lens of basically this idea that we're as young, capable, talented people, and just in terms of our economy as a whole, you know, the value is coming from us as people and our talents and skills and our intelligence, and the investment in us is where the real value is coming from. And, and the kind of Marxist, you know, critique is, you know, we're basically appropriating our labor for, you know, the sake of like, we're working crazy hours, we are sacrificing connections to place connections to family, hurting our mental health, all in service of basically some larger, you know, employer or some larger cause that isn't really serving our own ends. And I think you see that too. And I'll just say, right now, I'm not a Marxist, but I do appreciate the, the lens that they use to think about this, I think in terms of what our society values, you know, there's clearly, it's a lot more than just money. It's also about status, it's about privilege, it's about, you know, how do you what can you tell your friends when you're at a party, and clearly the way our society thinks about serving a local community right now, is, you know, that that isn't for these people who are from maybe the more elite parts of society. And, and so a lot of the work that we do for America is, is really, at the end of the day, we're a fellowship program, we're never going to scale to create a systems change. It's really about narrative change. At the end of day, it's about cultural consciousness. It's about creating counter examples of people who are fighting against that culture, and showing that you can be an amazing, you know, competent person, and you can overturn that narrative that success looks like leaving and never coming back. And you can actually go back and serve and become very invested in your local community. And that's what success can really look like. And I think the other piece too, is I want to lift up that, you know, this is very much an elite problem. There's, you're at the local level, like most of the like, one of the biggest employers in most small communities is the local government. There's tons of people who are, you know, highly educated, really smart, successful people that have spent their lives and careers working at the local level in small towns and medium sized towns. There's also this narrative that smaller places are all failing and dying out, and there's no young people. And that's also just empirically not true. You can also read great books like our towns that talk about very successful midsize and small town places that have really done incredible work and have, you know, been very innovative in the way that they've brought tourism or economic development to their communities. So I think a lot of the work of wheat for America is also spotlighting some of the amazing things that are happening. A few years ago, our organization moved our national headquarters to Dodge City, Kansas, to help spotlight that and also be invested in the work ourselves of trying to serve communities that do struggle to attract and retain talents, and also serve communities where the founders are actually, you know, we're almost there much closer to having been from. So I'm from Oklahoma Joe's from Kansas, and Dodge City, Kansas was featured in the book, our towns by James and Deborah fallows have as a place that was innovating and doing amazing stuff at the local government level. So we moved our headquarters there, we had a hub of our our staff, working there on education initiatives, leadership initiatives, we brought fellows there. And that was very important to us, as an organization to kind of live into our values, and also just, again, highlight the amazing things happening in places like Dodge City.

Will Jarvis 14:17

I love that I love that read. How did you personally escape the morass of McKinsey and Company and Bain or BCG or perhaps these like, you know, elite finance firms when you were at Harvard? You know, you escaped this, but it doesn't seem like many people can. Is there something you make? Like is it just your experience in seeing, you know, problems at the ground level? That that made you more inspired to like, go pursue something a little different, or was there something else? Is there something special about you? Or is there something that we can kind of impart on other people who perhaps thinking you know, should I take this job, that elite consulting firm, where should I go do something that's more meaningful?

Reed 14:57

Yeah, well, I think again, I I think my personal experiences really shaped me and my dad and his experience, seeing the folks who died in the tornado really shaped me. Also, I came from a place like Oklahoma, where I, I'm not one of those people who will ever match, you know, like flyover country, I think it's amazing. I think there's incredible values, I really enjoy spending time with people, and I just so appreciate the culture of a place like Oklahoma. That being said, of course, there's many issues, and there's all sorts of challenges in Oklahoma. But, you know, I do just love, love Oklahoma and love where I come from, and I wouldn't be who I am without, without that community in Norman. And I think the other aspects that I think is important is, you know, when you've actually been trying to do the work for many years of, you know, community organizing or legislative advocacy, you start to understand how important that stuff is on a more maybe more tangible level. And you also, I think, just the practice of doing that makes it hard to to give up. That being said, I think it is a good question. Because there are so many people who do spend, you know, their college careers doing a lot of great, you know, advocacy work or public service work or, you know, they're doing the like, local government internships or whatever else, and then they end up still succumbing to the I think the pressures and the forces. And again, that's not I'm not in a judgmental way, I think it's just a very attractive thing to go go the corporate route. And I think the reason I mean, there's so many reasons, and we talk about, at least for America all the time, like and leave America, we've designed our fellowship to be competitive as an alternative, because at the end of the day, it is a lot about money, professional developments, networks, the fellowship of other people who are young, and, you know, motivated, like most local governments, like mostly, like they call it the silver tsunami and the local government space, like it's a huge, huge problem, where there's just not enough young people going into those spaces. You know, it's just, it's the culture needs to modernize. So there's a lot of like structural barriers, there's also just the money, right, like the corporations have so much more money, they have so much better recruitment infrastructure. So I think it's more of a systemic problem than anything, but I will say, I do think at the end of the day, if we're going to change these things, then it is about a change in consciousness about what's important and about what it means to be a good citizen or a good person. And so I do think I do want to say that we can't just absolve our responsibility to help. And we can't just say, we need to donate money, we also need to think about how we're spending our time, our careers, our commitments to place. And that's the only way things will change. You know, at the end of the day.

Will Jarvis 17:27

Yeah, absolutely. Absolutely. And it does seem like, like you mentioned, the tides are at some level, I guess, you I think you can hack the prestige thing, which you've done with leave for America, which is really good. But it does seem like, you know, you can be eating peanut butter and jelly sandwiches, trying to save the world and the two bedroom apartment, where you can be making, you know, 150k a year working McKinsey. And it's like, man, like, you know, especially if you're you're coming out of college, you haven't made much money more, that's a lot. That's a lot of cash. Right, you know, and that is tough to fault anyone for it for, you know, understanding you seeing that and making a choice. But on the margin, we need more people who are like trying to go out there and do new things. It seems.

Reed 18:06

Yeah, definitely. And I will say that there is also this. There there is there's certain cultural elements that I think even from the young people themselves that kind of reinforce, reinforce the values challenges, because I think if you're someone who tries to say, hey, like, I actually don't think you should be working at that company, I think you'd be doing more things like that's like very, you know, that's very judgmental, that's very frowned upon. You're being pretentious, you know, you're being you know, an a*****e. And I have a friend actually at Yale Law School. And actually, you know, I'm going to, sorry, I'm just gonna pause. I don't wanna tell her story for her. So I'm gonna, gonna cut that part out. But, yeah, I definitely think there is like that, that culture of, you know, avoiding judgment on people. And I think, you know, that's overall a very good value to hold. But, but I think there, there's also, I think, in many conversations I've had with people, and consulting and finance and tech, I think there is like, there's like, almost like, a performative aspect to, like, feeling insecure or guilty about doing those jobs. Like I've had many conversations with people who are like, yeah, like, I don't know, I'm not really making a difference. I'm not really doing as much as like, I wanted to when I was like, 18 years old, but, but you know, it's good money. And that's usually where the conversation ends. And I think, you know, if there was more counter examples of great people doing great things in you know, whether it's through weed for America or otherwise, like I think there could start to be a little bit more pressure like there actually isn't alternative. It's not just like, you can't just, you know, get away with that in the same degree. And I do I want to say all this with like the most love and care I have so many great friends who are doing, you know, awesome stuff and are great people and doing corporate world I stuff and I also think there's a lot of really good work to be done in the corporate world like this. You need people on the inside who are reforming and who are moving corporations in the right direction. I think there's all sorts of good arguments to do that. But At the end of the day, I think most people don't even think they don't even step back to think about like, okay, like, what what do I actually care about? What are my values? How can I actually spend my time or my career in ways that are meaningful? And I think that point of reflection, and that accountability, I think, are the pieces that are really missing. And I think we need more of

Will Jarvis 20:17

I love that. I love that. Do you think there's also some kind of systemic push towards people, for people to go into these high paying careers, straight out of college, perhaps because of increased student loans, you know, lower rent growth in the US so that there's less opportunities that some real level? And so there's more like, you're almost more scared coming out? Because the consequences seem a lot larger than they did perhaps in the 70s?

Reed 20:41

Yeah, I think that's definitely part of it. So I don't want to say it's not but I actually think if you look at, you know, service, it's really interesting. There's still, like, so many young people who are doing service. And AmeriCorps is, you know, a national service program, you know, hundreds of 1000s people do America every year. And there's plenty of people working at the local government level, there's plenty of people doing nonprofits, many of these jobs didn't pay very, very little. But the demographics, I mean, it's like the people who are actually doing it, it's a smaller slice of society. It's like the people that we basically deemed as like, okay, these are the people who do these sorts of jobs. And like, you know, the elite people who go into the fancy schools, they don't do these sorts of jobs. I almost like that's almost like the sense I get, maybe people wouldn't say that. But I think that's kind of how it is like, and I think you see, like, in public service jobs, it's mostly woman, like, it's like 70% Plus woman who are doing these sorts of like, lower level public service jobs as young people, and then local government, state government people, it's tends to be people who are from those communities who have generally, you know, strong roots there who may have gone to a university in the area, or maybe didn't go to college, and they're living wonderful, meaningful lives doing really important work and are very qualified for what they're doing. And so I think it's almost more of a class gap, I would say, a class and like demographic gap than anything, I don't think it's and all those people have student loans, too. I guess that's my point. It's like almost the lower income people who are doing the jobs that pay less and sure part of it's probably because maybe they aren't as qualified, on average, to get the higher paying jobs, but also, you know, their, their, their I think their value set is different. Like, you know, you always hear about teachers who were like, are getting paid terribly. But you know, they're like, Yeah, well, obviously, I'm doing it because I love my kids, and I want to do everything I can I'm drowning in student loan debt, but I'm still doing it. So I yeah, I definitely want to say like this policy, and the structural pieces are a huge part because at the same time on the st. The, the flip side of that, of course, is there's a lot of teachers leaving teaching, because it is so difficult to be a teacher, but there's still lots of people who are doing it. So I just want to point out that people have agency, people have choices, people can do these things. And even if it's like less glitzy, if more people actually valued what's most important, which is in my mind service and taking care of your community and, you know, friends, your family, your neighbors, then I don't think it would be as important.

Will Jarvis 22:49

Yeah, can you say that one more time, like you do have agency, you can make choices, and you can go out and help your local community do better.

Reed 22:58

Yeah, exactly. Yeah. So you know, people, we all have agency, we all can help our community, we can all make sacrifices, you know, people are doing every single day and millions of people in America are doing this and making it work. So I think for us to, you know, as people who may, you know, as people who may have gone to fancy colleges, or might have fancy careers like to say that, Oh, I can't afford to do that. I mean, there's plenty of counter examples to that. It's probably not true. It's probably just that the culture and the value sets that you're surrounding yourself with, make it seem like that's impossible, when that's really not true.

Will Jarvis 23:32

Yeah, I love that reminds me of this Peter Thiel line where he's talking about, you know, he goes through elite undergraduate education because the law school he ends up at, like Sullivan Cromwell to this very, like, white shoe, very, very well known law firm. And he's been there for seven months. And he's like, this is terrible. You know, everyone wants to get out. But everyone from the inside, everyone wants to get out. But from the outside everyone wants to get in. But you can just walk out the front door at any time and just not come back. You know, but but people wait, there's something psychosocial that is so difficult to overcome. And many of these cases, were to just just leave at some some point.

Reed 24:07

Absolutely. Yeah, that's, that's exactly right. Kind of

Will Jarvis 24:11

prison of our own mind. It's wild. Read, can you talk about your new effort right now? I'm really excited about it. And just how you originally had the first idea had the idea for it, and what its gonna be and how it's gonna help the world.

Reed 24:23

Yeah, yeah. Thanks for asking. Well, so I'm so in terms of lead for America, co founder and CEO of that organization, I've been overseeing partnerships and operations and recruitments and helping out wearing many hats in the startup life, but I feel like I've learned many things from lead for America. The first is that this idea of being able to build a countercultural program, I think it does work. You know, in our first year, we really didn't know if anyone was going to want to apply like, Oh, we're gonna, like go after really smart, capable people. And we're gonna ask them to go back to their hometowns and like rural communities, or, you know, wherever, like, who's gonna even want to do this. And so it was kind of a gamble. But in that first year, We had 1800 applications, there was a huge demand. And there was an amazing number of people who, you know, would say like, I didn't realize that a program like this could exist and that now that I know it does exist, it's totally changed my entire paradigm. And my career trajectory, many people who weren't even selected would email us afterwards and say, because this program existed, I realized I could go back to my hometown and work in local government or do these things. So I think there is a lot there. And of course, I think we've just impacted a lot of lives and communities through the program itself. So I think there's power in a fellowship model, both in terms of the impact of the program, but also in the way it can change, it can be a vessel a very effective and cost effective, a cost effective vessel to make take to make narrative change. So I've realized that and then I think another thing that I've been thinking about, one is, with the COVID-19 pandemic, just the almost unfathomable amount of suffering that I've witnessed or watched across the world has broadened my awareness of international issues of, you know, how is terrible and heartbreaking as it's been to watch what's happening in America, especially in communities of color, where lifespans have drastically decreased, and just completely unconscionable ways. You know, it's only it's only worse in lower income countries. And just the death toll is astounding. And, you know, reflecting on that thinking about okay, like, what could I have done? Or what what can society have done? You know, I've realized, with my work, at least for America, and just in general, that at the end of the day, it's actually not that we don't have the policy solutions. You know, there was plenty of people, you know, before the pandemic, even saying, Hey, here's what we need to do to prevent pandemics. We need to like, you know, regulate what markets, we need to regulate, you know, the production of these viruses and labs, we need to do all these things. Of course, those things did not happen. There were still tons of leaks happening leading up to it. There's all sorts of examples of basically like the knowledge and science and all the policy ideas that people have just not been implemented. And so what's that about, then? Well, it's about leadership. And it's also I think, at a more fundamental level, it's about morality, it's about our values. It's about like us as people, you know, both as democratic citizens being able to vote and elect people and also advocate for things, as well as our leaders. Basically, dropping the ball, you know, dropping the ball on what's most important and not living into moral values, not having moral integrity. So I think at the end of the day, like, when you think about, you know, solutions to challenges the world, you know, we have a huge bias to think about technocratic solutions, we like to think about technical fixes of, you know, we need to have this policy on climate change, we need to have this follow up policy on pandemic preparedness, we need to do this about like global poverty. But you know, those, those ideas are out there, and they've been there. And that's an amazing thing. And they definitely are making difference. But there's just, that's only one side of the coin, at the end of the day, if you don't have the people to implement it, if you don't have the political will the collective well, and you don't have just the general care, it's just not going to happen. So this is my ambitious vision for what I want to build is a program that is trying to carry this vessel of building moral integrity on a global scale, and bringing that to communities all over the world. And at the end of the day, of course, like the work that I would be doing would be only a small chunk of that. But I would hope to be a field builder in a larger effort to think about moral integrity and moral leadership. Because I think just starting to frame it in that way, and getting people both people that are secular or people that are faith based that I think are more than ones that talk about things like morality, I think getting more people to think about these things as a really important part of how we fix our world's problems is key. And so what mountaintop is to describe it more, more concretely is an international leadership fellowship program similar to lead for America, but focused on people anywhere in the world applying, getting a $60,000 stipend, going back to their home countries and working in governments or nonprofits on critical challenges facing the world. But they would be the ones the young people, ages 20 to 25, would be the ones to say, this is what I want to work on. So maybe it's on, I want to work on pandemic preparedness in my country, I want to work on climate change, I want to work on food security, I want to work on poverty, basically been able to convince us that what you're working on is going to be a very high impact high leverage thing. But then the actual training and the curriculum of the fellowship, unlike most leadership programs, because there's so many of them, like clearly, it's like a very popular thing right now, the whole point of the program is actually not on developing their leadership skills, so much as developing their moral integrity. And so what I mean by that is talking about the five moral values that I think are most lacking from our society, that are also I think, necessary and sufficient to bring our society as a as a globe, to a place where we can build a beautiful, loving world for everyone. And those five values. One is compassion for all suffering, no matter who it is and where it is. So being able to transcend borders, transcend race, color, you know, gender, ethnicity, ideology, and you know, whoever it is, you know, there's there's so much like struggle with that right, just thinking about how to truly have compassion for While suffering and think about the people who are least among us, there's this concept of loving everyone, which I think is actually maybe the most controversial one, I have to share this idea that, you know, not only gonna love across race and gender, ethnic boundaries, but also ideology. I mean, it's just torn my country apart in America, this idea that you have to, you know, hunker down on your side of the political aisle and, and basically hate the people on either side, or else you're almost out of the mainstream. I think that is, you know, again, I think, a fundamental flaw in our society, and there's no way we can coordinate and collaborate and, and be able to solve collective problems. And also, I think it's just an unhealthy, immoral way to live is due to hate in general, which I know is, maybe it wasn't would have been a controversial thing to say 50 years ago, but nowadays probably is. A third one is wisdom. So being able to think about evidence, being effective, being historically informed, the Effective Altruism is a movement that Effective Altruism is a movement that I've been personally deeply inspired by, and I think they get the wisdom part, they definitely think about wisdom, I think a lot in terms of like how to be evidence based, effective. And if you are trying to make a difference, like what's the best way to do it. But I think there's also plenty of other traditions, like, you know, if you look at history, if you look at faith traditions, there's a lot of wisdom, and also just being able to look at what other people are doing different countries. So I think being able to have that wisdom. The fourth one is commitment, I just don't see any way that people can make the world better if they're not really committed to either a community or a cause. So whether that's the community you're from, whether that's a community you've moved to, it doesn't really matter. As long as you're really dedicated to it, you're really going to be there for the long haul, you're not just paying a few bucks, or you're doing a GoFundMe, and you're like, Okay, well, that's my contribution, like, we need people who are really going to hunker out and dedicate, hunker down and dedicate themselves to something, whether it's a community or cause. And then the fifth one is courage. And I think if you have all those other four ones, but you don't have the courage to actually step up and be uncomfortable and say things that are going to put you at risk, or maybe even endanger you, then I just don't see again, how we're going to be able to overcome the status quo. Or, you know, even in the basic example, we're talking about earlier of like people from like places like Harvard wanting to go back to their small town, it does take courage, you have to basically go over, you know, the judgment or the doubts that your friends or your family members might have about that decision. And even those small acts of courage are so sorely lacking. So those are the five values that I would want to try to permeate through the leadership curriculum through more clearly leadership fellowship program, basically inculcate these values. So these fellows could spread it as ambassadors, but also so the idea can just get out into the world application, people, when they're applying will learn about the value so they can spread it that way. And then hopefully, if the fellowship is successful, to have it serve as a flywheel to launch other regional fellowships in different countries to watch education programs, policy, advocacy, and just build more of a field building effort to talk about moral leadership and this moral integrity value that I think is so sorely lacking.

Will Jarvis 32:53

I love that I really liked the concept. I'm curious, it seems to me like the best moral entrepreneurs, that they find this $20 bill on the sidewalk, where, you know, it's something that's true that people agree with him with the time, but you know, they are able to convince everyone that they that this is true, and then spread it throughout that, you know, I think of Martin Luther King, right. Like, very, you know, at some level, you know, everyone loves him now, but we went back there are a lot of people who really did not like J. Edgar Hoover's, like trying to dig up dirt on him. And all this stuff until I was wacky, was why these white things. I'm curious, how do you think about that in the lens of what you're building now with mountaintop? And because it seems to me like one of the one of the challenges you'll have, and I'm sure you'll be able to surmount this. But one of the challenges you will have is that a lot of people that are moral entrepreneurs, when you're first getting them started, it will appear to a lot of people or the majority of people that you know, what they're saying is wrong, or not quite correct. Does that make sense? And how do you think about overcoming that?

Reed 33:56

Yeah, absolutely. Well, you know, I think that's absolutely true. And I think that's kind of the point. If it wasn't true, then like, what am I even doing with any kind of entrepreneurship or at least with nonprofits, if you don't have a sharp enough points? If you're not really like, then you're not really saying anything? And so I think that's an important point. I mean, there's also I can't recall, recall the exact Bible quote, but it's like, you know, the prophets are never listened to in their own lands kind of thing. And I think, well, there's that just kind of elements of like, you have to get people to really see it for a while and really get used to it, most people. And so I think that's a huge element of, you know, what I'm trying to do, like, even the fellowship program itself, like I basically the way I've thought about is like, what's the most cost effective, like simplest, like straightforward way to just like, get this idea out there? I could try writing a book, but like, who's gonna read it? I could try running education program who's going to do it? I think fellowship programs are a great way to spread values and to create a following around an idea because we've done it at least for America, and I think we've been pretty successful with it. So I think that's how I'm thinking about it.

Will Jarvis 35:03

I love that how important our founder effects to fellowship programs, just generally. So it seems to me like one of the big values, you know, is, is putting a lot of people together for the first time they go on this journey together, and then they've got all these interconnections that they can take with them, kind of for the rest of their lives. It's kind of like what elite business schools do. A lot of colleges do it very effectively. How poor important are those founder effects within initial cohorts to get things started?

Reed 35:30

Yeah, oh, 100%. I think I think it's incredibly valuable. And again, I can speak from my own experience. But I mean, you can just look around and see, like, you know, the hundreds, if not 1000s, of fellowship programs that have popped up in the last 1020 years, they're everywhere. Because I think people do see, again, in this economy, this society we live in relationships are everything. And skill building, networking, it's just, it's so key to becoming a leader or being successful in general. And again, like, I think, in my my perspective, with this kind of moral leadership aspect, it's also incredibly important for collective accountability. Again, if you're, I talked to several friends who were in the Schwartzman Scholarship, which is, you know, US China, prestigious fellowship for Americans and Chinese people to come together and like, learn about US China relations, it's a really great idea, talking to the folks from that community, oftentimes, you know, there's a huge, almost like expectation that you're going to just take a job in finance or consulting. And that's what most of them do afterwards, which I don't think was the founding intention. But for whatever reason, that's where people end up going. But I think, again, like if you have a critical mass with a different fellowship, where everyone is like staying in their local community and interested in service, and they're doing MPa and MPP programs, and they're, you know, wanting to run for local office, then you have like the reverse type of like, very positive, collective accountability, which we've seen, at least for America, you know, 95% plus of our fellows are planning to stay in their communities, the rest of our lives outside of like, maybe going to graduate school, and a lot of them are already doing amazing things. And so I think the same idea would be here, too. It's like, you have like the network effect, which is typical for a fellowship program, but you also have that collective accountability of like, I'm going back, I'm serving my home country, I want to follow the tradition of Martin Luther King and Mandela and Gandhi, Jane Addams, Dorothy Day, you know, you name the moral leader that you most look up to these people who again, embody compassion, love, wisdom, commitment, and courage, I think, you know, all the more leaders I look up to are, you know, embodying all those, then, you know, if those are your, your kind of North Stars, and you're also in a community of people who are also, you know, doing this program, because they suddenly wanted to do that, then I think you start to have some, some real like, like a, like a safety net, or some sort of net that basically stops people from like filtering out.

Will Jarvis 37:35

I love that that does seem to be important. Right there. There's, there's these group dynamics where, yeah, if you there's social pressure to do the right thing, people are more likely to do it. How are you thinking about selecting people for fellowship? I know, you haven't quite gotten kicked off yet. But how have you conceptualize doing that? Right now?

Reed 37:54

Yeah, definitely. So I think you know, very much would be again, driven by the values, like I would be looking for people who could be the ambassadors of this. So while I think in future programs, there could be more of like the training education for people who might be less on board with it. Because of course, that's really important, too, I'd be looking for people who have already shown their capacity or potential to be people who are going to be great spokespeople for this. So people who are very committed to their country committed to their cause who have already done great leadership work, generally good communicators, and are able to articulate an idea whether through writing or speech, again, the moral leaders that I mentioned earlier, I think they all are incredible communicators. And then they also have a compelling idea for how they want to spend their life. So part of the selection process would be them saying, here's basically my theory of change for my life. And here's like, what I want to do. And here's how I'm going to spend the year in the fellowship with the 60k grants, like working on important issues. And yeah, being able to basically convince us that yeah, this is someone that we can really see, you know, not only changing society through their actions directly, but also inspiring others to live into higher values, which at the end of the day, is, I think, even more important.

Will Jarvis 39:00

I love that. I love that. What what are the biggest challenges right now with getting mountaintops spun up? Is it fundraising? Is it gonna find that initial cohort? What do you see as the biggest challenges you're facing at the moment?

Reed 39:11

Yeah, that's a great question. So I'll be honest, it's just been two weeks that I even be able to do this, even 20 plus hours a week, I'm in the process of transitioning from wheat for America, but I'm now you know, focusing most of my time on it. And so I think the, you know, I think you can talk about the practical considerations of I just need, you know, what I'm talking about is quite ambitious. And it's also doesn't fit cookie cutter into existing funding priorities for most funders, or, and it's also international, so even if you're interested at the American level, like, you know, there's all sorts of things that I basically almost constructed that make it like less palatable to I think your average funder, but you know, I think basically I'm just looking for champions people who are really behind the general idea who are behind what we're doing and are excited to, you know, invest in this pilot and then letting like the work at Self like prove the concept. So I'm still very confident that and my hope is to not compromise like this overarching mission and vision and this idea. And even if that means having a little less funding and making the pilot class a little smaller than I'm willing to do that, I think on the more like theoretical or philosophical level, I'm afraid that you know, and I talk to my mentors about this all the time, like, I'm afraid that I'm going to create maybe a good program, but not a great program, and just be one more leadership fellowship program, because there's so many of them. And at the end of the day, I don't want this to be another, as as important as having fellows do leadership programs are, and I'm certainly a firm believer in it. They're not transformational unless they're actually changing the values of our society, in my opinion. So I would want to do that. And that's a high bar. And it's going to require a lot of accountability for our team for, you know, our fellows. And it's going to require, I think, a lot of courage as well to again, transcend I think some of the funder and partner dynamics and things that I've experienced at my time at LEED for America to be able to hold true to the core mission and vision.

Will Jarvis 41:01

I love that. I love that. What do you think the key is to making making it a great program? Is it on the selection side is on the training side? Are there special things you need to do their? Where do you think the real wedge is? is in the beginning?

Reed 41:17

Yeah. Oh, sorry. Well, can you just repeat that question? I kind of zoned out there.

Will Jarvis 41:20

Yeah, yeah. So to make, you know, mountaintop a really great program, and not just a good, good program, where is the the, the the wedge to isn't on the selection side for selecting Fellows is on training, you know, do you need to do something special there? You know, is it on like raising people's ambition, like encouraging them to really do something that's transformational? Like where do you see the big wedge is to make you know, mountaintop truly a great program?

Reed 41:49

Yeah, I would actually, I would say, I would say the selection training are definitely the two pieces. I think what I'm trying to build in terms of the program design is something that I know from experience, and from talking to fellowship advisors at selective colleges is attractive enough to get really, really talented people, a 60k stipend, being able to work on basically any public service challenge you want that is incredibly important and critical. And then this network and all this, like investment and training, I know that's going to attract great people. So I'm less worried that we're going to find capable people, I'm more worried that we won't find people who are fully invested in all five values, because I think it's still just a very rare breed, right? We're talking about, like, people at the caliber of like, you know, again, whether or not they go on to lead a civil rights movement, but people who are they have the moral integrity of the Martin Luther King, I mean, that's, that's a rare thing. And so finding those people, I think, is, at least at first, and hopefully not in the future, but at least at first will be like needle in the haystack. So definitely, that's one place. So being able to really network and also do proactive recruiting in places that are less commonly, you know, you know, easy to network with, like, Sure, it's easy to post your things with fellowship offices at selective universities worldwide. I'm not worried about that. But to find people who are in lower income countries who've been already doing great work and doing great leadership stuff, that's a lot harder and more work to do. So that's definitely one part. It's very, I think surmountable challenge, though, the other piece is the training itself. And I think this is where partnerships and collaboration with people who really get the mission is going to be important, like, I'm not an educator, I'm not someone and no one could lead a training that would cover you know, all these moral values, as well as like, talk about you might my plan with the curriculum would be show bios, and profiles of some of the most amazing world leaders throughout history. And let's talk about what sorts of decisions they made, how they lead their lives, let's take lessons from it. Let's talk about the grand challenges facing our world and like at the system's level, and then think about, you know, within our home countries, like what we can actually do about it. And let's also be able to build, like the leadership skills and capabilities to actually, you know, over time really make a difference, and also communicate our ideas and moral values. So that's a lot. And obviously, again, like something I will need great partners with people who really get it who are elite and world class at, you know, their expertise. So I'll need historians, I'll need great leaders, I'll need CEOs and entrepreneurs and people who can serve as role models and mentors to these fellows. So, again, I think those are maybe the two pieces where, you know, very surmountable challenges, but definitely the two places I'm going to be prioritizing my time.

Will Jarvis 44:12

It makes sense makes a lot of sense. Reid, I want to shift now a little bit and talk a little bit about, you know, state and local governments, you know, you've got a lot of experience. And when he mentioned your bio, you talked about how you've spent a lot of time in lobbying state governments, you know, changing laws. Practically, what does that look like? You know, if you want to go fix a wall, let's say in North Carolina here, there's something that's egregious going on, and I'm sure there's quite a bit. Sure. How would I go about doing that? Is it just going and forging relationships with legislators? Is it through ballot initiatives? I know you can't do that in every state is. How do you think about conceptualizing that and how do you get started?

Reed 44:50

Totally. Well, it's a really good question and I'm certainly no expert but for my for my experience. I think there's there's just a I'm trying to think of like a high level advice, I think first you have to really know, like what the issue area is. And I think you can look at like particular, like issues that you might care about, like, for example, gun violence prevention is one that's very near and dear to my heart, because I have a family friend that, you know, lost their life to it. And, and but like, I think there's like, there is some issues that are so entrenched in our politics and are so polarizing, that the amount of work it would take to change some of those laws is like 1000, or 10,000x, more than certain other types of policy solutions. And so one particular policy solution on that piece for it as an example is, you know, people talk a lot about like mass shootings and homicides, but they talk a lot less about suicides and suicides are actually 60% plus of, you know, firearm deaths in our country. And they're much more preventable in my mind, because you can bypass a lot of the Second Amendment concerns through mental health reforms. And one bill that I've been really excited about and supporting and there's actually a bill now in Congress that I'm, you know, very excited about is one that's focused on do not sell this. So people who are bipolar or depressed can basically put themselves on a list saying I cannot I should not buy a firearm, completely voluntary. They can take themselves off when they want after a cooling off period. But you know, this could save tons of lives. And there's actually laws in Washington and a few other states now that actually do this. And that those bills themselves like those, those those could save, you know, just as many lives as the more popular red flag laws, which are basically laws, or otherwise known as extreme risk protection orders, where police officers or spouses, whoever can basically like get a court order to prevent someone from buying firearms, both important but one is much simpler, and it takes way less effort and money to change. So I think that's one way to think about policy changes, like maybe there's ways to look at things that could be more bipartisan, and perhaps more overlooked, and then you just need to bring more attention to it. That's some area that I've become very interested in. Also, with organ donation reforms, organ procurement organizations, oversee our organ, our deceased organ like transplant system, essentially. And, you know, I've been involved now in advocacy there. And again, I think, a place where we could save 10,000 Plus lives a year, through reforming the system. And it's something again, that, you know, it's very bipartisan and can make a huge difference. So that's like, that's one piece of advice. And then the other piece of advice would certainly be, you know, you have to be able to know who's doing the work on the ground and build trust and be committed that commitment piece is so important. You have to be able to work across the political aisle, you have to be like, rational about it, you know, you can read all sorts of books about like, no matter how ideological you are, if you're not getting like the right people on board or excited, then there's no way you're going to do what you want to do. And I think like, again, like, you know, it's very, like, you know, more sparkly or glitzy or whatever to go out in the streets and protest and march and stuff. But, you know, that's usually not how these things change, even when there are the protests and marches like there was with, you know, after parkland, or after George Floyd, you know, there are then people in the back rooms, like actually making the deals with legislators that are actually making the, you know, the systemic changes. And that's where I think a lot of the change does actually happen is with policy and with those government reforms. So yeah, I would just say like, for those who are interested, definitely just start talking to people, there's people who are very knowledgeable in probably any state or any community that's actively already working on these issues, talk to them, network with them. If there's not people already working on it, then go talk to your state legislator and find some champions. Having a champion on the inside is so important. So finding people that really care about it, and will support you and give you the connections you need. That goes a long way to

Will Jarvis 48:30

That's great. That's great. So it seems to be a lot of coalition building of forming relationships with with other, you know, legislators, and then over time helping craft legislation in that way.

Reed 48:40

Yeah, absolutely. I think I think it's, again, about commitment, like you really have to be able to and again, and I'm making it sound like this is something that a lot like is unique or like not known, but there's so many people in this country every day, usually not oftentimes not young people, oftentimes people who have families, people who have a lot of other commitments, they're the ones who are at the Statehouse testifying and you know, doing the hard work. And I think just following those those people's examples and not not pretending like you know everything or that you somehow are going to fix things just by yelling and screaming and protesting, like, you know, at the end of the day, like that's usually not how these changes happen.

Will Jarvis 49:14

Right? That's not how it actually works in the real world. That's That's great. That's great. Well, Reid, thank you so much for taking the time to come on the show. Where can people found find mountaintop? Where should we send them? If they listen this podcast? They find it really interesting?

Reed 49:29

Yeah. So I again, just two weeks in, I don't have a website yet. There will be a website soon it's going to be mountain top bellows.org. That being said, I would love emails from anyone who's interested. You know, my email, it's my name, read dot Schaefer re at Mountain Top fellows.org. And I would love to talk to anyone who wants to learn more and I love their feedback on the ideas on on my materials, and learn about opportunities to partner.

Will Jarvis 49:56

Love that love that. Well, thank you. We're really excited to see how this turns out. I'm really bullish on the project. Sorry. I'm glad you're working on it.

Reed 50:03

Thank you so much. Well, it's pleasure to have this chance. I'm so glad that we met in San Francisco and best of luck with the podcast.

William Jarvis 50:12

Thanks for listening. We'll be back next week with a new episode of narratives.

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:41

Well, RC How are you doing? Man?

Resident Contrarian 0:43

I'm doing pretty good. I'm I'm like fresh off of work. So you know, trying to get you know, gear shifted into this mode.

Will Jarvis 0:52

Good deal. Yeah, I really, really hit Yeah, right. With intellectual stuff. Right? We're coming off a lot of work. Damn. Sure. RC Do you mind giving us a brief bio and some of the big ideas you're interested in?

Resident Contrarian 1:03

Yeah, absolutely. So like, I'm like a mid 30s sort of guy, married, have some kids. I'm, I tend to think of myself, I think like a lot of people as like a normal person, like everybody thinks their space is normal. But I'm pretty like, there's like I'm, I'm a fairly traditionalist religious person, I'm, you know, I got married relatively young, I came from what I consider to be a fairly normal nuclear family. And one of the things that came out of that is like, my, my dad was a business person. And he sort of assumed that all of us would end up being business people. So when I hit my early 20s, and got married and was and suddenly realized I couldn't run businesses, that I didn't have the skill set or the personality to do it, I then realized I didn't have any skills. And we spent, I think,

I mean, I bring this up partially because it's one of the things I'm kind of known for, we spent probably a decade like flat broke, like beyond flat broke, like just, you know, barely scraping by every single month, that being a troublesome thing. And again, no skills and not really a great way to get them. I know a lot of people are able to like, transition into coding. And you know, I don't want to paint myself as like, the dumbest person on earth, but I couldn't. And then

relatively recently, I'm in the past, it's about a year and a half. Now, I was sitting around and I was depressed. And I was in that situation where you, you just need to change something, whatever it is. And, and I went to my wife, and I said, I need you to make me a logo for a blog. Because if you make me a logo for a blog, I will be guilty about you making it and it'll force me to write at least a couple articles. And that might be enough to sort of shake me out of like, sort of the rot, I meant, I hope. And I wrote a couple articles like two or three, and then just started to get really lucky on shares. And people were reading it. And eventually, I was like, looking through my readership and realizing what kind of people were reading it, that they were generally people who are doing pretty okay in life. And I wrote an article essentially about what it's like to be poor. You know, and not to make anybody guilty, but just to give them a look inside the bubble of a different income level. And that went fairly big. To the point where, you know, now now I'm a little better known, like, just well enough known for people to occasionally let me go on podcasts. And, and it got me into different kinds of work. And we're doing a little bit better now. But But to the extent that people asked me sort of my story in relation to writing, it's like, I got poor enough that it was interesting enough for people to then read what I wrote. And that sort of that some of you were asking what I write about, that's a fair amount of it is like, here's what it's like, if you're really like not not the poorest possible, but if you're well below the kind of like the, you know, sort of our I heard somewhere I think that the, if you're better than the bottom 30% In the US, then your life is better than anywhere else in the world. But underneath that third year, it gets really tough. So I write a little bit about like, what it's like in that sort of like bottom third or the bottom third of that bottom third.

Will Jarvis 4:42

That's great. That's great. Well, you know, resident I really liked your work. I found it super interesting and compelling when I first stumbled across your substack. And I just wanted to it just seemed to be something interesting, I found is that some of the best writers that have exists that are artists in general, they definitely have to have some like struggle they went through or something to have like some interesting perspective. And if they don't, it's almost like it can be oftentimes flat. It's just something I've seen, which I found is interesting. But you also do bring up an interesting point, because you know, I do lump you into like, the rationalist blogosphere, we've had a lot of these people on, we have a lot of people like, on the podcasts that are related to that we've had a couple of billionaires, and we've had a couple people, not as many people like you, which is really interesting. And you bring a very good perspective to, I think the conversation, which is, which is very cool.

Resident Contrarian 5:37

Well, and it's interesting to talking to those guys, because it's not like they don't have a guy with a billion dollars has problems. Like and sometimes those problems are like directly tied to the billion dollars. Like you look at those. You look at people like I mean, the stock example is Elon Musk, he is always working, that is what his life is, yes. If you have, if you look at guys who run successful startups, if you look at like CEOs, like they're running 60 hour, weeks, 70 hour, weeks, sometimes more. And, and it's there, there are trade offs, I think the thing that came out of me being out of me being poor, that was good is that me and the wife and the kids got really close through that. And the kinds of jobs you have, when you're that broke usually aren't the kind that go, Okay, you're working 50 hours this week, you're working 60 hours, this week, they exist, and I've had those jobs, but for the most part, I had time to spend with them. And I had I built up, you know, when you don't have when you don't have a lot of resources, you build up relationships. So we were able to build up a lot of really good friendships, I am socially very rich and more than I deserve. And I've always been socially rich, because that was what I had to lean on through those times. And that was the good thing that I got developed. And sometimes I'll see people you know, one of one of the things I've been writing about a bit recently is like, I've been seeing a lot of people like in the you know, they went to the Bay Area, they went to college, then they went to the Bay Area, and then they worked real hard for like five or 10 years. And then they stop and they're 30 or 35. And they look around and they don't have anybody. Like they isolated themselves from their, from the homes they came from. And they you know, sometimes people will actually contact me and be like, not not exactly how do I make friends but sort of like, Hey, I just realized that I've been neglecting this part of my life, how do I make it better?

Will Jarvis 7:40

It's a, it's, it's striking that you mentioned right, because it is this weird conundrum where you can you can graduate from college and go work in big tech, you can effectively retire at 30, which, you know, I have several friends that have done it. You know, they effectively retire at 30. But you do look around and you're like, oh, like, you know, there were very little social bonds. It's not a conducive place to kind of meet people and build community, although some people do, but it is it's not quite conducive. I'm curious. Because we were talking before we hopped on the call about religion, and you know, you mentioned your wife and your family, and how you stuck together through this. I think this is a really important thing like s, you know, America has kind of, you know, Charles Murray had his book coming apart about how, you know, social institutions have kind of worn out, especially in white America since the 1960s. And how important do you think marriage has been to your being able to get through this kind of trying period, and how important has religion and community been?

Resident Contrarian 8:42

I will and marriage is a funny part of that. Because with marriage came everything I needed to get through it like I have, I have this woman who is far better than me, like your other people won't see this. But you're looking at me on camera. And there's nothing amazing happening on my side of the screen. And but I have a you know, I had this person who decided at some point to love me. And whenever, I mean, she just she never broke like I broke like a lot of the poverty stuff. Like really, there were times where I was like, I'm barely getting through here. And she dragged me through. So and you know it I can't find a good way to say how important that was. And then having the kids and having something that was valuable to build. Like, you know what, one of the big things about kids and is that it's something that if you put your time into it, you will get rewarded for it. It's independent of income. It's independent in a lot of ways of like any kind of skill or even personal quality because the main thing they need is like time and devotion and dedication. And if you have those things and put them in, they pay you back for it. So those things really got me through an awful lot of the room. really, really tough times, but at the same time, and I say this with a smile on my face, because I'm glad I did that, if I had been a single guy through that time, I wouldn't have been like rich, but it would have been a different kind of burden. There was also a lot more weight when I was like, there, there were, I mean, probably every month for a real tough period of five or six years, every single month, I didn't know if I was gonna pay rent, I didn't know if I was gonna make rent. And if you're a single guy, and you're laying on the couch thinking about that, it's like, it wouldn't be great. But you could sleep in your car, in the shower at the wire wherever people shower, when when they're sleeping in their car. Or I could have, you know, found somebody's couch or something like that. But when you've got like other humans, who rely on you to an extent, who aren't like big, like bad looking dudes who, you know, are going to be relatively safe out there, because who would you know, nothing, nothing to mess with? It. It's sort of that thing where it made the burdens heavier, too. So so it was a trade off? I would absolutely take the wife and family life again and again. And again. I don't know how. But but it did make it tougher, if that makes sense. Yeah, makes sense. It made my responsibilities heavier.

Will Jarvis 11:23

Gotcha, gotcha. I, I'm curious. Just generally, what we'd like, you know, most people in the rationalist community, especially the people in tech, find most surprising about kind of the lived experience of being less well off in America.

Resident Contrarian 11:38

I think that a lot of it is I was just on a thread on one of the Scott Alexander adjacent forums. And actually one of my internet friends runs it and would probably want it somewhat plied. He's He's very post hungry. Most of the time. It's nice. It's data secrets, locks. It's like the Oh, yeah, absolutely. Yeah. It's the forum for Scott Alexander. So yes, so please, people go. But he, I, there was somebody who was like, Oh, well, you know, they get all this aid. So their foods paid for. And their their rent and housing is paid for. And it's kind of true, like, at some point, like, for instance, I was on government medical care, the whole family was and so something that some people pay 500 1000 $1,500 a month for, or, you know, was something that I had for free, but it's also not usable. Like it's like you one time I broke my finger, I stuck it into a car belt and broke my finger in half. And it was a month before before it really got treated. Because I missed the part where you could go to the ER for it. I didn't think it was as bad as it was. And then like it was a month before I really saw a doctor for it because government medical care is hard to use, you can get vouchers for for housing, but it is the worst housing you could possibly imagine like no landlord who has anything you'd want to live in participates in that housing. So like at the bottom at the end, that's if you can get it which often you can't it takes a lot of time and effort to get in on those programs. So at the bottom levels, it's like things that I was talking to some people where it's like, oh, when they turned off the water, that that that ended up being like the the big controversial thing, because I actually had people email me and say, you know, it's illegal for them to turn off the water. I'm like, no, they like, they can turn it off. If you don't pay for it. They don't provide the service. Yeah. And they said, Well, what happens you turn on the tap, and the water doesn't come out. And I'm like, yeah, like that's, but it but it's not, it's not like they're coming from a place of ignorance. It's like the stuff at if you get over a certain income level, and and I'm there now and I'm really thankful for it, you get over a certain income level, and the money for the bills just comes out. And the rest of it is like you may not have as much extra money as you want. You may not be going on trips to Europe every week. But like those little things like having to think about, like Will, Will we have enough meals to get to the end of the week? Or will the water stay on? Or will they turn off the electricity? And if they turn off the electricity? How will I look for a job if I'm out? If I'm out of work? I can't pay the electricity. They'll turn off the electricity at least they'll turn off the internet. How do I look for a job without the internet like those little things? And they're not little things but like those, those things where things turn off or you really don't have the minimum you need to function. I think those things are missed for people who have always done above a certain amount like the you know, most people don't know how to flush their toilet. If the water is turned off on the house, most people just don't know which one of their neighbors will let them use their home. That's

Unknown Speaker 15:01

right. Absolutely. So,

Resident Contrarian 15:03

and I, I hope that's sort of what you're looking for. Because there's, there's other things. But I think mostly it's just I think that most people who have money, think of being poor as a miniature version of being rich.

Will Jarvis 15:18

Gotcha, gotcha. And that's not quite the case. Yes,

Resident Contrarian 15:20

it is a kind of shift like, it's like even stuff like renting a car. You know, you, if you've been poor for a long time, you probably don't have a credit card that is big enough to put a whole rental car on it. And you find out real quickly that it's a whole different process once they figure out that you're that kind of poor.

Will Jarvis 15:42

Right? Absolutely, absolutely. Well, and I think this is it's important to talk about because just in context, my wife's a social worker, and you know, all the time, I hear stories about people, you know, who are like, you know, very cop, very competent, they're doing well in life, and then they get a traumatic brain injury. And then like, suddenly, they are stuck in these situations. Like, it's one of the things that can happen to anyone. And I don't think people quite realize, like how close we all are at any given point in time. And all kinds of things can happen to people, but it's just, I think that's an important thing to note. I'm curious, how was it coming out of, you're doing a lot better now? I've got an excellent substack I really appreciate it. The writing you've done there. I've really enjoyed it. I know a lot of people other people have to, but what was the process like coming out of like, this, this malaise and, and, and the struggle and and how are you successful in doing that?

Resident Contrarian 16:37

Well, um, so So as I previously said, I wrote that article, and it went, the poor article. And these aren't huge numbers by a lot of people standards. But I think right now it's sitting at about 80,000 100,000, hits, something like that. Yeah. And that was mostly in the tech community, like the place where it went the biggest was Hacker News. So a lot of people saw that article. And right after it came out, I started getting emails and calls from people who said, Hey, you, you can write pretty well, which was nice, nice to hear. But also, then they were saying, and we might need somebody to do that for our company, like there is a need for writing. And I think the job I ended up taking, it isn't fully writing. But I think what happened is they were confident enough that they could find enough writing stuff and enough other miscellaneous tasks that a reasonably bright person could get on and like sort of run, run it as a project, that they were confident hiring me. And that was at a level that was already higher than any amount of money I had ever made. And there were, and it went a little up from there. So we got to the point where we were making what for us is a lot of money. And, but then you sort of figure out on the flip side, what the people who you've already always considered wretched talking about when they say things like, Oh, the money spends just as fast, you still run out of money, they're still problems, because what happened is, you know, we got that money, and we had always wanted to buy a house, always wanted to have a house. And we and we had a really good opportunity to get into house and we got the house and the bills went up in that way. And then just everything got more expensive in the last couple of years. And I do not want to give the impression that we're doing anywhere near as poorly as we were doing before, but I did get to the end of one month, and when Oh, I've spent all the money I have this month. Like all the money I made this month I spent. And and it's it's interesting, because at the bottom level of income, there's a point where you can't really spend any less than survive, but you can spend as much money as you want their industry set up to take as much money as you are prepared to give them. Right so absolutely. So some things you know, you don't realize, and I I've told somebody else who's sort of been going through a similar process. He's he's doing better. I said, what you'll find this for a while, like, you probably have never replaced your mattress. And you've probably right now you probably have things around the house that are broken and have needed replacing and you've just been making do and that'll suck up all the income for a while. But that said, the amount of stress that just comes from living has been so much reduced, like such an amazingly lower level of stress, just knowing that like the basics are covered. And being in the bracket where it's like okay, now I need to not waste the rest of the money. It's still concerned, but it's so much less of a concern and even just like health wise, it's been a big difference. That's great.

Will Jarvis 19:57

That's cool. That's really cool. So Can you talk about your talk? You got a good job now? But can you talk about some jobs that perhaps were not as good and like, shitty jobs in America? What they're like and what people must understand about them?

Resident Contrarian 20:11

Yeah, absolutely. There's, there's a thing I say to some, there's a thing I say to people where there's an income level, if you're below it, people know you don't know how lawyers work. And and if you're below that income level, like people will do all sorts of nasty stuff to you, particularly landlords, but a lot of different places like they know, you really don't have the ability to challenge them. Like even if you have the legal right, you don't know how to exercise. And, and the same thing, sort of true of like the worst level of jobs, like they know that, especially if they're paying just a little bit above average, they know they have you. Like, a good example of that is insurance adjuster jobs are a job you can get into often with very little experience, you can get into it with almost no education, some of them are a little bit different. But generally you can't. And if you get into that kind of job, there'll be like, Okay, you're working Saturdays, like what we command you to, and you're like, you get in, you get in and you realize it's a 55 hour week job, not all the overtime that's necessarily paid. And they'll they'll give you a workload that is greater than any human could do. So you have just a list of people who are mad at you, and they'll acknowledge, you can't get through this amount of work, just do your best on it. And so you have the super high stress job that like nobody have any real talent or marketable skill would do. But they also know that they're paying you a couple $1,000 more a year than you could otherwise get, and that you're stuck. And you're stuck for surprisingly little money. Like sometimes it was the difference between like, say $35,000, and like $37,000. And it's like, they could shoot me, they could shoot me and I have to have that extra couple $1,000 Because it's the difference between a major car repair. And, and not being able to repair that car and like, just sort of laying down and dying. And there was i i, one of the jobs I worked at, there was a guy who actually had a heart attack. The stress got to him and he was a little bit older than us, but not much. And he had a minor heart attack, and came to work the next day, like he had a minor heart attack, he in the morning went to the hospital, they got it under control. And he signed himself out because he was afraid he'd get fired. And I don't know if that was actually the workplace his fault in this case, but he had that worry regardless. And he came back to work the day after having a heart attack. And I was like, Oh man, I can't, it was one of the first things that made me realize I had to leave that particular job, find something, anything different, because, you know, it's like, if I get stuck in here, it's only a matter of time until I'm him. And I also would come back the next day after a heart attack. And they also one thing to remember too, about those jobs is that like, for instance, if you're a really high end programmer, you go in and they probably came to you and convinced you to go work for them. Right and, and the whole job is set up with that sort of mindset. So the the quality of the perks is amazing. And the amount of time off you can get is significant and and the way people treat you the respect of which they treat you and the way all the rules are set up around you is designed with this idea that like this is a guy we paid $100,000 to recruit, we pay him hundreds of 1000s of dollars a year to work there. And, and often he and if he leaves, we can't replace him very easily. Like we may lose out at some of these companies on a really high level engineer, they might lose out on millions of dollars of progress. In the six months or a year it takes to replace that guy, CIO and all that plays into how they're treated to the extent where even if you're not that guy but you work at that company in a way where you're adjacent enough to that guy to be considered core team and sort of a real employee. A lot of things are pattern like you get the same they don't have a separate insurance policy for you to sign up to so you get to use his cool one. And they don't put together a different time off policy so you can sort of leech off of his but at the bottom level where they can just replace one warm body with another warm body like anybody can answer found. And and then a lot of people can can say turn a wrench or make a sales call or or when you're at that replaceable level like off It's a thing where you say, Hey, I, I'm, I have the flu, I can't come in and they said, No, you're coming in, we can replace you tomorrow. And they really can. And it changes the sort of tone of how you're treated.

Will Jarvis 25:15

It sounds like, you know, escaping competition is so important. And they say, because you did it through through the substack. But you have to find some way to escape competition, or that's your kind of doom to like, this, this thing where you know, you know, all the way just get, you know, it all gets competed away. And to like this just like, what's the thing they can barely keep people going at some level?

Resident Contrarian 25:35

Yeah, absolutely. What one of the funniest things about all this too, and I don't know how well this fits in with everything else is you given how bad it is. And sometimes it's really bad and people will really miss really mistreat you in amazing ways. Like, I'll still get on the internet and be like on Reddit, shitty jobs are like whatever sub forum where people, and you'll still be able to see people exaggerating it. Like, there's there, it's, it's fun enough to sort of like, you know, for to complain about your job, that people get on there and exaggerate how bad it is. And you can tell if you've been in that world when they're doing it, because you'll go it is pretty bad. But it isn't really like that. Like your, your 17 year old somewhere who's like never, like, never worked a really bad job, I can tell the difference, because I've been there. But it is. It's, you know, as bad as it is like one of the things that gets you through that is complaining about how bad it is. Which is again, sort of how things ended up working out for me is I got lucky. And it was the most effective complaint about anybody's life that's probably ever existed. Like, I complained about it, and people fixed it.

Will Jarvis 26:50

That's great. That's great. I am Chris, I'm going to talk about you know, relationships, you know, loneliness. You know, how people live in America today? You know, we talked a little bit about this earlier. But what's your sense of how well American social fabric works at this point in time? And do you think it has degraded since like the 50s? And 60s, you know, we've had these great social advances. But has there's been this like, great, you know, atomization? And, you know, just epidemic of loneliness with with that people are experiencing?

Resident Contrarian 27:20

Let let, before I get into that. Let me turn it around on on you a little bit. Because you're more from the journalist world. Correct. Is that fair to say that, like, most of the people you would have known professionally would be sort of in, like, the content? And is that? Is that true of you? Or like what's what's your, what's your specific background? And the kind of people you know, is what I'm asking, like, Who do you consider yourself to be your set?

Will Jarvis 27:47

You know, that's a great question. It's actually a tech. So people in tech primarily, you know, I started the podcast, you know, just for fun to meet people stuck inside of the pandemic. And it kind of spiraled out of control from there. But yeah, definitely, you know, people are tech entrepreneurs, founders, software engineers, etc.

Resident Contrarian 28:04

Well, and I think you've seen that on like, ITT Tech, it's an interesting world, in that A, it tends to be locationally, set around the weirdest places in America, socially, like and when I say weird, I just mean, not outlier places, San Francisco is not a normal place socially. It's not a place where you have the money to have a house that's big enough to raise a family. And it's, and so there are people who maybe even want to, but don't, it is a not absolutely male place, but it's definitely a male skewed place. And then everybody is working, or almost everybody is working pretty hard on their careers. And that's even true of like the remote work workplaces now. So you have all these people who are sort of connected remotely, but even to the extent they're connected, like they are people who are saying, Hey, I'm gonna work real hard for 10 years, and maybe get into my own startup. Hopefully, that's a good exit. And then I'll get out and I'll be retired, I'll be 45. And I'll be retired. And it'll, that's when I'll start living my life. That's when I'll start actually doing the things I want once I've been a success. And it's interesting. And then the second part of that is that, and this is a stereotype but it's one that's more or less true. The people who tend to be like your best programmers, who are who are just drawn to it tend to not necessarily have been like the most popular kids at high school. Like they end on the football team generally. Yeah. And I say that not in the sense that they weren't liked or they didn't have friends, but they they usually aren't the kind of people who make friends really quickly and easily. It's usually a longer process for them. So there's also this baseline where they would usually need more time than most to do it anyway and then they're in an environment that doesn't give that time and doesn't lend itself to those opportunities. So just a lot of people in that world, I mean, even before we get into, like the social construction of America, just in that little microcosm, you just have a lot of people who are super lonely. And they don't know how to fix it, like they don't know where to go to find people or to build those relationships. And then we do get into like, the way America is set up now. Because what I want to tell most of them what my biases say to tell most of them is like, hey, go to a church, they have a group, like go any sort of mid to large sized church has a group for like, people your age and your basic social situation. And they will grab you when you come through the doors, and shove you into that group, like a lot of these churches to like, sort of embed you and get you to stay because that's sort of their work. And, and so you have these big buildings dedicated to like uniting people socially, that only like, half of us are comfortable using it best. You know, and so it's this thing where I'm like, Yeah, you need these structures to go in. And to sort of help you with that. I was talking to one guy who was sort of like, he had just started going back to church. He was a I'm Protestant, he was Catholic guy. And he was saying, Yeah, I just, he's like, I've had a hard time figuring out like, where, because I can tell there's like social circles here. And they're meeting in different ways. They can't figure out how to break into him in this church. I'm like, well go talk to like the priests and tell him where you're at, tell him you're like, mid 30s? You're you're interested in marriage? And how like, what steps should you take? He's like, can you help with that? I'm like, it's sort of his job to help with that. Like, he knows the people in this church, he knows who to hook you up with in terms of like, who needs friends just like you do? Who needs I don't want to make it seem like it's a it is not at all like a like, we'll find your wife and that's a definite guaranteed thing. But they do. You know, they're, they're inherently social organizations in a lot of ways. And they put people there. And I don't think there's anything really in like the atheist, or business spaces that duplicates that, like, where can you go to find like 500 people who like, just generically like, love you? Because you are, you know, because you believe the same things.

Will Jarvis 32:24

That's right. That's right. Well, RC, I want to mention this, because I think the religion comment is so interesting. And you're also part of the kind of rationalist, Scott Alexander adjacent, you know, crowd, I run, I organized a meetup here in Durham, North Carolina for Scott's blog. And they brought all the meetup organizers out a couple of months ago, to kind of meet up and just meet all the other organizers. And it was great because I got to connect with all these people. Being in North Carolina, it's very different from the west coast. But we spent the weekend in Berkeley. And it was fascinating how the community at least in Berkeley and in Southern California, who Northern California, excuse me, was so quasi religious somewhere why I made this comment of someone they're like, oh, no, we're not quite religious. But you know, one of the meetup organizers had a liturgical calendar, they had holidays, they had these these events, which I just thought was quite interesting how it's kind of filling this this niche, in some sense, it perhaps the atheist church, or perhaps, like ultra, ultra Unitarian or something like that. But it was it was interesting, but it does seem like religion is super important for people's lives. And having that kind of social structure seems to be kind of essential at some level.

Resident Contrarian 33:35

Well, yeah. And it's also sort of interesting in terms of like, because you do see people who like the term a lot of people inside the church will use is that their spiritual? Like they consider themselves to be spiritual people. And they do have that sort of like they're looking for, I think, I think to use an example, I think Scott is really interested in the end like the aesthetic, yes, of at least the religion that he's associated with. And you'll see that in his writing and different ways he approaches it he'll, it'll lock him Yeah, yeah, there's and there's Kabbalah influences through Absolutely. And like all that, and I think he's interested in it didn't want it to be a part of who he is. And there's a lot of people who have like you said something about like an atheist church or like Unitarians. But But one thing that I think holds those back and this will sound disingenuous, because obviously, I'm, I'm a Christian, I want everybody to believe in Jesus. And it's like, that's sort of like the bias that I definitely have. And you should know that I have when you talk to me, but I do want to see those people be happy. It is not good for me for those people to be unhappy. Whether or not they come to my way of looking at things like I would rather they be happy disagreeing with me than unhappy disagreement. And I think one thing that keeps that from happening and keeps those churches from being like those big social structures with like the kind of support and longevity and like different people from different age groups like coming in and helping is that they, they can't be normative groups. They can't, they can't have norms they enforce. And the reason why to an extent is because to take to take, say, say you had a bunch of consequentialist, and they wanted to get together and start a consequentialist church, everybody acknowledged that everybody was like, lightly religious at most, right. And they all got together and they said, Okay, we're going to band together, we're going to build the structure. I've told the story on the blog. But last time I moved house, over a dozen people showed up to help me. And I would show up to help those same dozen people help. But that didn't happen. Just because we went to the same church, it happened because we went to the same church. And at some point, somebody needed help either me or them, and I don't remember which in each case, and we felt obligated to do it because of the religious thing. There's a norm there that you're supposed to help fellow religious. And it's an enforceable norm. Like, if you're consistently crappy about this, eventually, somebody might actually come to you and be like, Hey, why aren't you involved? Like, why don't? Why don't you put any of yourself in into this. And in the same way, they could tell me if I was doing something wrong, like in terms of what our rule set is, it's it's an enforceable norm, because we all believe that there is something true and solid and real and abstract, that, that it matters if we defy it. And if you go to, and so I did that thing, maybe out of obligation for that guy, or he did something out of obligation for me. But then I knew that he had done that for me. And I felt better about him because of that. And the next time he asked me for help, I was paying him back. And once we got about five or six things, five or six cycles into that, we had built trust. And we were friends who relied on each other for different things. And that religious obligation was no longer part of it. It was just something that had come out of that that had built off that. And if you go to a consequentialist, and say, Hey, man, I really don't think you should have done that. He can say, Listen, I'm making a calculation. On on what I think the net good is here. And you may disagree with me on that. But that's it, there's no strict rule set, you can point to to enforce the norm, there's no, there's no guy in the sky watching them who wants him to help out his brother was so he feels guilty and feels compelled. Some of them do it anyway, and it builds up. But the way, the way systems like that work is they sometimes do need a Kickstart to be viable on large scales, they sometimes do need that little extra push where, you know whether or not what I believe is accepted to be real to other people. I do believe it to be real and changes my behavior in a way that makes those relationships easier to have. And I think I think that does make it hard because again, you can't I don't want to say it'll never happen. And I hope it does. I hope somebody finds the piece of social technology that replicates that kickstart that gets these friendships and relationships going in a church and makes it viable, long term, so that they can have some more stuff, because again, I hope they're happy. But I don't think it exists right now. I don't think anybody's really ever found the hack that lets them have a church that doesn't believe in anything.

Will Jarvis 38:18

Yeah, I'm not quite sure. Yeah, yeah, no one, no one's found the hack. And at some level, I'm really, really not sure when exist, it seems to be like, it's such an essential part of the equation at some level, and prep, but perhaps we just haven't found it, and it does exist.

Resident Contrarian 38:32

Yeah. And I think that, I think that at some point, something does have to break. And what I found in situations like that is people only get unhappy to a certain point. And then they'll start looking around for different things. There was a, an article in The New York Times, just couple days ago, essentially where they were talking about, like, all these, like New York, sort of hipster scenester sort of types, who were starting to go to Catholic churches, not necessarily believing in any of it. But just because they were looking for like, a way to sort of fill up either that social gap or that spiritualism gap. And going through the motions like praying, you know, doing doing the rosary, doing the religious rites and going through it. Either seeing if that would inspire belief, or I've seen if going through the motions would give them some of the same benefits that belief would have given them and people and these are people who if you ask them, if they would do that, two years ago, would have probably told me now, but you can only get so unhappy before you start looking for those big changes. So I think either eventually that technology will be found, or the social structure that has kept them away from the existing technology that does that thing will fall away. Because you that people are going to look around and they're gonna see too many 45 year old men who have never built families but always wanted to and now have no options, they're going to look around and see too many people who have like have have established so much social and ideological difference be diff, I'm sorry distance between them and their families, that they no longer even have that family structure outside of outside of like their marriage and nuclear family that they also don't have. And I see that in a lot of different places where a lot of different people have really bought into like, go here, work hard, get it all done. And also, you also, it's socially awkward if you believe in anything real strongly. And it's just left them with, like, people won't do it, they won't look at a 20 year old guy who looks forward and sees a 45 year old guy who's completely unhappy, even though he has money will not live his life the same way that guy left, he will look for something different. I don't know if that it'll be like traditional religion, or if it'll be like, you know, going and working at a fishery on the coast of Oregon, I don't know what it'll look like, but either it'll get fixed or people will move away from it.

Will Jarvis 41:06

That's good. That's, uh, well, you mentioned something I really liked there. And this is a personal hobby horse of mine, you know, the aversion to like, really believing in something in American culture, or maybe it's just the irony, culture, it's something weird going on. But this is something I deeply despise is kind of making fun of people for being really into anything. Like, I think we should encourage people to have their hobbies or whatever they're interested in. And I have a big aversion to, you know, I don't know, making fun of people or think they're weird for being into stuff, whatever that may be.

Resident Contrarian 41:43

I actually have a question related to you about that. And it's something I've been batting around and trying to figure out in myself. And the phrasing on this question will be weird. It's, I find myself repulsed by effective altruists. Why is that? Because they aren't doing anything wrong. But I can tell right, they, in fact, they're probably doing a lot more good than I am a lot of them in the world. But I look at what they're doing. And like they're, they're like, you know, enthusiasm for it. And something about that turns me so off, and I have no justification for it. Like I don't even know I part of it is that I don't know very many of them. And so I think my mind identified him as sort of an out group. Yes, but But why that, like I have much less animosity for some groups that are very much farther from me than that particular group. And why and they draw that kind of heat from a lot of people. Like if you go on Twitter, everybody hates Yes, yes. And I'm not sure. What do you want? What I'm asking you really? What do you think drives that in your opinion?

Will Jarvis 42:48

Right, right. So full disclosure, resident that this podcast is funded by FTX ri grant and I was at EA global just a month ago, and I'll be at the other one here in another month. But But I do help to hope to convince you just a little bit. i What is it about EA Do you think that you find it's some level off putting I mean, there, I will agree there is something there can be like a cold, you tell it utilitarian consequentialist calculus that goes on, where you can come to like some weird conclusions and things like that. Which what what do you think that? What do you think that is?

Resident Contrarian 43:23

Well, and if I'm getting real serious about it, because before I did not know,

Will Jarvis 43:28

you're all good, man. It's good. It's good. I'm really curious.

Resident Contrarian 43:32

Well, and I want to like for me, I think a big part of it, like I was sort of implying before is just that they're like a very different mindset than me. And I think the the human mind establishes an out group and says, Okay, now we got to fight those guys. But if I had to come up with a really solid criticism for him, and I know that they actually have a competition looking for these is that I find that whenever you go, see an EA talk about something, they're pretty sure they've got it figured out. They're pretty sure that it is whatever it is that they think is settled, is actually settled. And that that's what's going to what's going to push things forward. So if you go ask an EA, like, what is the correct kind of morality? They they were recently I looked at it I was already too old to do it. But they had like there, there was one of the groups had a young writers grant. And it's like, you can talk about like, we are interested in people who talk about morality, so long as it is a offbeat form of utilitarianism. So long as it that then then then you can talk about it and they had decided that like the correct morality was was settled as that and I think that there's a couple different places where you look and go, Okay, so why why was it worth it to spend however many millions of dollars you spent trying to get that guy in Oregon into office? And I think they I think they went well. It's it's settled that At the best use of, of like government money would be to pump it through us and get it out there. And that and that this guy would have been the guy to do that. And I think there was a surety there were. Now the flip side of that is if they're right, on any of those things, there's so many resources and so much energy and a lot of really legitimately smart people working on that, that any place, they're right, they're going to do these mammoth, gigantic things. And I think that's actually already happened in a lot of different ways. They're funding a lot of different interesting people. Not very many people who look ideologically, necessarily like me, which again, makes my outgroup stuff boil. But, but where, where they're right, they will do more than anybody else will do. Because they're taking big chances, and they're doing weird things. And they're, you know, it's like the same thing, Y Combinator came out of they, they looked at risks nobody else would take, and now they have more money than Australia.

Will Jarvis 46:00

Yeah, you can take these these high expected value, you know, risks. And if you're correct, you can, you can really get high payoff at times,

Resident Contrarian 46:10

especially if you have some of the smartest people in the world working for you. And I think that's always good. You know, based off the people I've seen be involved in that, like Scott's heavily involved, and Scott is endlessly smarter than me, he's a better writer, he knows more stuff, he is more responsible with data and stuff. And where Scott gets involved in a project, it's a probably the right project to be involved with. And be, you know, it's probably going to do pretty well, because of his involvement in it. Like, not his alone, but like, the amount he contributes to it, they'll be glad they had. But, but But yeah, I think I think all all those nice things to balance the main things I said before, aside, I think where people look at them, as they look at this group who's like, they go, No, this is the direction, these are the real risks, these are the real places that that need help. And this is sort of the shape of it, like it's like it, we aren't going to really think about like adjacency in terms of how we give. It's not it's not really a local mindset, it's a overseas people, you you'll never see impersonal kind of giving, or at least it was at the beginning. And I thought, I think people see those, and they see the confidence behind it. And they maybe recoil from that. That was a lot of words to say, sort of Yeah, thing. But

Will Jarvis 47:32

well, do you think, do you think having been, like in a tough spot living in American America, and then seeing, you know, majority, like a not majority, but a sizable minority of the most competent kind of American elite, you know, college graduates, etc? Taking this kind of like, Universalist approach, as at the forefront? Being like, you know, not a great thing at some level, do you think that's part of it? Perhaps?

Resident Contrarian 48:00

Yeah, I mean, so I think so this is a really thorny bias place for me, because I really don't want to look at anybody in the world who's trying to do good. And tell them, hey, stop doing that. And I think most right, you know, there's going to be occasional people in any movement who are there for ego, or they're there for, like, or something, they give up effort and time and everything, they aren't really there to help anybody. They're there for social reasons, or prestige reasons or whatever, right. But that said, I don't want to look at any of them and tell them that they should, that they're doing wrong by putting their time and effort towards something good for whatever reason they're doing that. And I also acknowledged that, like, for instance, when I was making $35,000 a year and living in the US, I still by just a lot of metrics have a much better life than like somebody making like $1 a year in like, Belize or something. I don't know what the average income is in belief, but But you know, there are places where people have it worse, just right. And so I It wasn't really, I think, ever a thing where I looked at it and thought really I'm the one they should be helping. But there is something about I think, I don't know, it might be it might be partially that they are that elite, because for the most part, he is I think to have the ability to hire who they want. Like when when a major you a organization says hey, we're hiring people for this position. They got a lot of the brightest people and a lot of the people who are like the highest energy and who actually believe in the movement, which is a big thing. And I think seeing I think to an extent looking at them and going okay, here's a kid who went to Penn State did really really really well and now is going to their without it lets you say unless you at least mentally project that they don't have context. For what life is like at the lower rungs, whether that's true or not, it lets you pigeonhole them into sort of a box where you can sort of be like, Oh, they don't know how it is. Exactly. It's just a game for them. But But again, I want to minimize that a little bit. I don't want to, I did not come in here intending to bash real hard on the EAS, except to say that, like I have, the main thing I wanted to say is I haven't got check against them. And I think that it's wrong. And I'm trying to examine why it's, so I don't really want any of this to come off as sincerely like, I don't like the A's or I think they have rights problem. I have minor ill informed complaints. Like it's not good here.

Will Jarvis 50:44

Yeah, absolutely. No, no, no, you know, purchase in in a good faith way, which I which I really appreciate and some nice people about people in the community broadly bed are they are friendly to ideas, generally. But But I will introduce you if you're interested to my friend JD who rents EA for Christians who I think you'd like really enjoy talking to itself about it. Well, a lot of these issues,

Resident Contrarian 51:04

I would love to have a conversation with somebody who's on the EA side and see like sort of how they approach it. Because so are you yourself religious? Or do you come from a Christian? Do you have any, like Christian social background, I guess, is what I'm saying.

Will Jarvis 51:20

Yeah, so I'm a Protestant Christian as well. Okay, cool. Okay, so

Resident Contrarian 51:23

you'll, you'll know what I'm talking about. Sometimes, like if you're like Protestant Christian, and you're like a sort of regular church going guy, there will be somebody who will be like, Hey, I'm getting involved in this new sort of thing. And, and it's cool. And I think that is really what what Jesus wants me to wants me to be doing. And then like, it'll be like a year later, and he'll be like, completely off the rails. Like usually like and so like new interesting things with the kinds that like people who went to like school to get like an arts degree get involved in in Christianity, a lot of the time, they tend to end up getting really weird really fast. So I have this inherent distrust of like, these of like, new exciting ways to express your Christianity, especially when they go through primarily secular pathways. So I'd be interested to talk to him to sort of like have him help me not just be assuming the worst about that. Right. Because it cuz like, again, like, like, we like a Christian is called to be credible. They there. That might be a homeschool word. Charitable or charitable?

Will Jarvis 52:32

You know, I'm not exactly sure. Charitable, charitable, I

Resident Contrarian 52:34

guess. Yeah, probably charitable. There's, there's a million. There's 1000 words that I have read a lot that I do not know how to say. I'm with him. Yeah, integral integral? I don't know. But But yeah. Again, on the subject of that, like it, it would be interesting to see how a Christian approaches that. Especially a thoughtful one.

Will Jarvis 52:56

Absolutely. Absolutely. I think you did enjoy the you really enjoy the conversation? I'll definitely set that up. I, I'm curious. Obviously, we're running up on time a little bit. And before, before we jump, I did want to ask a couple more questions. Just about, you know, what's next for you? And what are the next kind of 10 years look like? And what are you excited about? And what kind of ways in improving the world are you thinking about that can be important.

Resident Contrarian 53:27

So So I mentioned a little bit about like, one of my like, knee jerk reactions against the EAS being like, in an impersonal distance to like the people you give to, in some ways. And and we've been talking a lot about loneliness, one of the things I'm doing like short term. And it's, it's been interesting so far as I'm trying to make myself as available as I can to anybody who reads my stuff. So So yeah, so and that could take the form of like, a person sending me an email and just saying, Hey, this is going on, and I just needed to tell somebody about it. And that's happened a few times where it's just like, I don't have anybody to talk to about this problem with or, in some cases, like I, I started up a discord. This seems really small scale, but like if people want to pop in there and like, be like, Hey, I have this problem, I want to talk about it. Or I just need, I just want a place to go and talk. I'm available for that for calls, anything like that. So I'm trying to do this sort of, like unlimited access to me think that I don't know how it's gonna go. But I feel like I can't complain about like a world where like, a lot of people are lonely. And a lot of people don't have social connections and to be a social connection. And then to go Yeah, but you can't email me. Like, like, you cannot talk to me. I'm not I'm not going to be that you're going to have to find somebody different. Like I feel like I have to be involved in that. So that's sort of my short term on like helping people I longer longer term on like the blog site like growth is a weird thing. I think, you know, having done this your spiraled I love

Will Jarvis 55:09

I love you I love your experience that it's been an incredibly linear, like incredibly linear for me. I mean, there's been like, you know, I, there's some variation but it's like kind of up into the right at this kind of general general northeasterly direction.

Resident Contrarian 55:22

It was weird for me because I went, like, I got a lot of early initial growth that I did. It was almost like unearned. It was like, I didn't deserve it. It's like I wrote it. I wrote an article about ear wax. It was like the second article I ever wrote for the blog, and like, it was on marginal revolution. And I'm like, Oh, that's awesome. Yeah, like, like, and I knew people at the time who were quitting after getting like two hits per article for like, 10 articles. And it's just hard to stay motivated. If nothing takes off. Yeah. But then it like sort of stagnated for a while, um, just recently, some cool stuff has been happening where like, like, I've been on a few more blog roles. And I've been getting a little more help from like people who really have no reason to help me. They're just being nice. And that growth has been taking off a little bit, but I'm still comparatively small, like in terms of subscribers. I think I'm at just about 2000 right now, which is not a lot. It's it's very much not a lot. And then I've been lucky in terms of some some some of my articles are shareable. So about once a month, I'll do Okay, on like one where it'll get into like the five digits, I've never broken six digits. I've never had that massive of a hit. But it is steadily growing. And it's and it's growing much faster now than it was like six months ago. It really is, like you talked about a linear line. Mine is definitely doing that snowball effect thing where it's, it's awesome, you know, speed. If you've ever seen like the amount of energy it takes to speed something up as it goes towards this exactly. It's sort of like doing that bending back of the line thing now, so it's good. So I'm hoping to get bigger. In terms of like, in terms of like projects to make that bigger. I don't know what I'm doing. I don't know anything about marketing. I've just been like pumping out articles and like, hoping they do better. But I do want to I think one thing that I'm interested in doing is and I think you'll agree with this and I think most people should agree with this is most of conservative media right now is not

William Jarvis 57:21

great? Oh, yeah. Oh, yeah.

Resident Contrarian 57:24

There's there's a few places that are like sort of gems, but they they tend to be more formal and very much from the old school of like journalism. And I don't find that there's a lot of places that are like sort of new school of thought like new like, I've said before that if I could get all like the Christian men about my age who read to just know I exist, I'd have an audience. But right now there's no pipeline to get to like sort of the calmer more intellectual conservative, there's no pipeline to get to the like the calmer like reading type of Christian very easily the closest there it is. And you'll laugh is the Babylon be like, they're the closest people to of having tapped into it. But I do, I am looking for ways to sort of put together a way for people to find like, like less reactionary, say substack style or like younger, younger writer, younger thinker style writers in that world, because right now, I don't want them to have to go to one of the two terrible websites you're thinking about in your head right now. Exactly. Yeah, like I don't want I don't want that to be the only option if you're like 25 and a conservative dude. Right, right.

Will Jarvis 58:41

Absolutely. Absolutely. Well, that and I will say it is very achievable. Like to do that, especially in conservative media. It'd be much more difficult if you're trying to do that in like, more liberal circles. Much more competition. Oh, yeah. Oh, yeah. Cuz,

Resident Contrarian 58:53

yeah, I mean, even like, the places that like I want to, like get down on because they're, like, ideologically opposed to me, like the Atlantic is still good. Like, I don't agree with them on anything anymore. And they, they they definitely skewed further to the left, but it's not like they don't have like, smart people there. You have good writers, they have smart people, and they are not, you know, off the rails. They are not they have not gone insane with the rest of us and a lot of conservative media has.

Will Jarvis 59:25

Yes, yes, it's true. It's true. So it really has,

Resident Contrarian 59:28

yeah, I'm allowed to say that because it's my own people.

Will Jarvis 59:31

Exactly. Absolutely. That's good. Well, resit, thank you so much for coming on today. I've really enjoyed the conversation. Where can people find your substack? Where should we send them?

Resident Contrarian 59:41

So send them to resident contrarian.com Just that easy. And yeah, I mean, it's, I cannot promise that every article will hit for every person. But But I have a I think there is something because the nice thing about Not being focused is if you go down through the archive enough, you will eventually find an article you like. That's great. Well, thanks something interesting. But yeah, that's really the only thing I have to plug right now. I wish I had something bigger.

Will Jarvis 1:00:11

Awesome. Awesome. We'll put a link down in the show notes. Thanks. Thanks so much, man. I really appreciate it.

Resident Contrarian 1:00:15

Thank you very much.

William Jarvis 1:00:19

Thanks for listening. We'll be back next week with a new episode of narratives.

Transcribed by https://otter.ai

Transcript: William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:37

Sahar, how are you doing today?

Zohar 0:40

I'm doing great. Well, how are you?

Will Jarvis 0:42

Doing? Good. Thank you so much for taking the time to hop on today. I really appreciate it. Do you mind giving us a bio and some of the big ideas you're interested

Zohar 0:51

in? The short bio is that I'm a rabbi, an independent scholar and a poet. I am a coach. I do all of this. As a self employed roving intellectual on the internet, teaching in person and over zoom. And I'm, I'm passionate about art. I'm passionate about spirituality and faith and theology. I'm passionate about the history of ideas. And of course, how all of those very abstract and monumental issues touch the individual in this cultural moment, and how we personalize the great ideas by really bringing them back to the question of how should we live?

Will Jarvis 1:38

Got it. Got it. I, I'm curious. I want to zoom in. Like I'm gonna go off the outline. So I apologize. But you just said something that's really interesting. The individual, you know, the world seems to have gotten very collective, you know, in some sense, and less focused on the individual in the past, I don't know, you know, 50 years. It looks to me like I have that feeling. I remember Peter Thiel has this line recently, where he says there hasn't been a ticker tape parade for individual since the late 1990s. And even then, it was a couple of like, athletes and people that were not necessarily even American and, and all these interesting, you know, asterisks to put beside it? Do you have any sense as to why that is the case and why that has happened?

Zohar 2:24

Well, before I accept the premise and give a hypothesis, I gotta say just one quick word about the individual itself, right? The meaning of the word individual means not dividable. But from my understanding the arrival of this term in the history of ideas really came to be with Hobbes, who, in a sense, invented the individual, he invented this idea of something that can't really be divided anymore, because he was trying to deal with the real problem in his time of civil war. And the theoretical problem, that without giving the individual some basic integrity, we're just going to kill each other. So I agree or disagree with Hobbes, but like, it's worth casting a long view on this question of the individual and just realizing that for most of human history, there hasn't been an individual in the way that we've constructed it. So it wouldn't surprise me if the individual is in decline, it may or may not have the same lyndie attributes that we should expect, let's say from the from things like tribe or caste, or what have you. You know, as to is the individual in decline. I'm not quite sure about that. I think that if you sort of take the dialectical view, though, of, of history and culture, you'll see that there's always a backlash against whatever's culturally ascended in a generation earlier. So I can, you know, I can see the rise of individualism leading to atomization, leading to alienation. And then the question is what's going to fill that gap? One hypothesis proposed by Baudrillard is that consumerism is going to fill that gap, consumerism in the sense of like you are what you buy. And now social media helps you really brand yourself and identify with brands and create a pseudo community around that. So is that that's a bit of a horseshoe, right with the individual shopping at Urban Outfitters to express individualism, and then broadcasting that out to 1000s of other people who also share that same so called individualist aesthetic. And then there's, you know, I think there's new age religion, but be it in the form of yoga, be it in the form of sort of the cult of masculinity on the new right. There's a great book by Tara burden kind of on this called strange rights. She was on my podcast asked meditations was so high recently. So I see it as in a sense individualism and tribalism are in dialectical relationship with one another. They're not really opposites, bad tribalism leads to individualism bad into individualism leads back to tribalism.

Will Jarvis 5:18

Gotcha. So it's something like this kind of cycle through history where we we cycle between these two things. And, you know, right now, perhaps we're, you know, fairly atomized or, you know, it feels like people are quite lonely. And then but perhaps we'll find some way back to community. Or

Zohar 5:32

yeah, you know, it's interesting, the word loneliness. So, Arendt, Hannah Arendt, in, in many, many places, she identifies loneliness with fascism and totalitarianism, which is kind of fascinating because you would think that at least like in a totalitarian society, with one thing at answers is the problem of loneliness, right, or you can join a mass movement, you can be part of a march etc. But she, she defines totalitarianism as quote, unquote, organized loneliness. Because you're never, you never fear feel more lonely than when you're surrounded by people requiring conformity of you. So I think good individualism in the sense of a Cold War, liberalism is being able to differentiate yourself from the crowd. But that doesn't mean that you check out of society, I think that's a bastardization of the concept of the individual that somehow, like you're free on your boat, and you don't have a care in the world. I mean, you're always going to be a social animal. It's just a question of how conformist Are you. And unfortunately, or fortunately, we, we, we do seem hardwired for conformity. So maybe not everybody is really as up to the the individual task as is, as as good for them around thought that most people could not participate in what she called an inner dialogue. And she saw that as the root of a lot of modern evil, that in a sense, because we couldn't be still with our own thoughts, as philosophers could be, we would fill our minds with all kinds of propaganda or talking points from the outside, and we'd basically just pair it whatever is going on around us.

Will Jarvis 7:17

And just kind of copy the crowd and then, you know, you know, perhaps, you know, kill a scapegoat. And it's these things, keep going. What you just said, reminded me of this really interesting question I had for you. Liberalism, you know, this kind of cold war, liberal lism, we seem to be at the end of or something like that, you know, people seem to be fed up with it, they think it's not working at some level, you know, Neo liberals seem seen as this like a kind of a bad term to call someone. But what my my big question is, what comes next? Do you have any visions in the future that, you know, are solid alternatives to liberalism that seem preferable and are actually achievable?

Zohar 7:59

A lot of it has to do with how you define liberalism. I'm mostly of the view that a lot of people who are unhappy with liberalism are unhappy with one version of it, but they're not really unhappy with liberalism itself. Practically speaking, I think in other words, practically speaking, liberalism has on the whole increased. Many, it secured many basic civil rights, it's given us a lot of prosperity. Okay, sure. We're still unhappy because that's the human condition. And also liberalism is young. But even to be able to criticize liberalism on your substack is, is a confirmation of liberalism. It's like a cheap shot of a point, right? But uh, you're exercising your freedom of speech. So on a metaphysical level, I get why people would would be unhappy with liberalism. I mean, one could have 1000 objections, I think metaphysically it's rather thin. On what basis do you really justify it? I think the the more the most compelling arguments for liberalism are instrumental. It's like, well, we live in a diverse society. And we'd like to get along look at the history of Europe when we fought over religion that didn't, that wasn't so fun. So, you know, when I hear people saying what comes after liberalism, we need you know, we need to return to a theocracy, or if you will, sort of his one proposal from the Christian Christian Post liberals or if it's like, post liberal from sort of the economic left in the form of like, we need to be more aggressively redistributionist or whatever it is. I think it behooves us to remember the origins of liberalism. Were technological, there were social technology for managing diversity. And all those proposals amount to in my ears is something to the effect of like liberalism doesn't deliver justice. It doesn't deliver truth. And I think a conscientious liberal would have to agree that that's True. But that's that's not the point of liberalism liberalism is kind of saying we would rather have peace or some relative peace than, you know, fighting in the streets. Can we be more aspirational? Can we reform certain things? Absolutely. That's what liberalism is all about. It's about making things better from within the revolutionary mindset that oppose opposes liberalism. It's just making the it's basically just anti status quo ism. But I again, I don't know how much of it is really based in deep thought versus just a personalized cost benefit analysis of like, is this good for me and mine or not? You know, Fukuyama thought that liberalism decisively won the history of ideas, and that doesn't mean that every society will be liberal, or that liberal societies, once they become liberal will remain liberal. That's not really the point. The point is just that, on the whole, liberal democracies have come into prominence. And that sort of secular trend indicates that it's likely to continue. It doesn't mean that in a particular case, it's not fragile. And I kind of agree with Fukuyama. So for me personally, I don't, it's hard to imagine an alternative to liberalism, taking off and becoming the new orthodoxy. But that doesn't mean you're not going to have various experiments. And we do experiments in post liberalism. But you're terrific on Tyler Cowen on this point, like, if you look at the revealed preferences of global population where people moving and where are they leaving, they're moving to liberal societies, and they're leaving a liberal lens on the whole. So it's not to say, you know, some people in the Taliban would rather stay in Afghanistan, that's fine for them. But it's just to say, on the whole, like, the tide doesn't seem to be that. For all the people complain about America, they're not they're not actually moving to Russia and Afghanistan.

Will Jarvis 12:17

Right. So perhaps, perhaps, the reveal preferences, you know, liberalism, you know, actually works decently well. It's got holes, of course, but it's about as good as we can do. As for people,

Zohar 12:29

liberalism is not equally good for everyone, for sure. So I think that the criticisms of liberalism are really, you know, they're important as, as psalms of lament is voices of protest, and we should definitely open our hearts to, to the, to those laments, but again, liberalism is kind of about what's good for the whole. And there's always going to be winners and losers in any political arrangement. That's what politics is. And yeah, I think probably certain orthodox liberals are too dogmatic about the consensus that they think they have, when in fact, we're much more diverse than we are. So that's what we're seeing now is the internet, and the decentralization of media, giving people a voice who otherwise wouldn't be able to vocalize their protest, but that those poor voices of protest have always been around.

Will Jarvis 13:30

It makes sense to make sense. Some of it just kind of continues. This question is related. You know, it feels like we live in this world where there's just a ton of anxiety, depression, you know, people don't feel very well, at some level. Do you think we live in a time with an abnormal level of these things? And if so, like, you know, is there anything we can do about it?

Zohar 13:56

I don't have data to back me up on this. So anything I said should definitely be taken as just a regular rather than truthy. But I think we probably, in the West have more anxiety and depression than I can't say that we did have in previous eras in the West, but I kind of feel like they are. I'm willing to hypothesis that they're first world problems. If you're starving, you can't really you might be depressed about the fact that you're starving. But your survival instinct might also take over such that you don't have the bandwidth to worry about what life is all about because you're too busy feeding yourself. So I mean, not that that's an antidote to depression. Don't try this at home. You know, but I think that certainly anxiety seems to be a first world problem. Born of in at least one instance, hyper competitive cultures. That would be one point a second is just anxiety about the future like, which could correspond to actual, actual deceleration and growth or, you know, the fact that, or simply is the fact that society is changing so quickly, it's it's hard really to plan, it's hard to be a definite optimist. You know, if you grew up in a, in a world where you can work one job for 50 years, okay, that has a certain unfreedom to it, but there's also a certain security to it, if you're like, the norm is that every couple years, you're gonna have to change jobs. So I think that will be anxiety inducing for sure. So I think some of it is social, for sure. And some of it, and some of it is an economic and some of it is, I think, a symptom of a general malaise, a lostness, about purpose, because to go back to the dissatisfaction with liberalism, like capitalism gives people the ability to self define what they're striving for, what what they want to do with their money, but a lot of people in my view, and experience don't actually know what it is that they ought to strive for. And so if money become money, which is a means to an end becomes an end in itself, as Marx describes, ma'am and becomes God, I think that that definitely will lead to tremendous depression and anxiety, which is why you see, so many people have means quite depressed. Because if you don't know what you're trying to do with those means, well, then you're gonna feel aimless.

Will Jarvis 16:57

You're your religious leader? So I'm curious, how do you think about guiding people through these issues of you know, how to how to figure out what to shoot for, you know, what is good? And what what they should try to do with their life? Because I'm assuming that that has to come up, right people come to you with this question. I don't know.

Zohar 17:14

I'm a very reluctant God. Guide. I try really, to customize. My response is based upon what people are going through and mirror back to them the things they know, rather than sort of say like, Here's the menu, choose Option A, B, or C. And in that sense, I'm a symptom of my time like I am, I do, I do have some thoughts about like what a good life involves, but I just don't think it's effective. To calm top down and be like, you know, this is what the Lord requires. I'm more into like the existentialist hero's journey as the method and and you know, if, if the person is begging me to give you to give them some thoughts on, you know, what, what to aim for, I'm happy to oblige. But I definitely don't want to start that way. If that makes any sense,

Will Jarvis 18:09

though, that makes sense. And trying to be effective is important in this in this case? What I'm curious, you know, maybe it's difficult to give to those people. But like, just in the theoretical, you know, what do you think that looks like? What should we try to do? What should we try to shoot for?

Zohar 18:27

Well, on a psychological level, I think that having a sense of gratitude is incredibly important. I mean, most of what I'm going to say is going to be super banal, and the kinds of things that you can read in any self help book, but like, the more that you can appreciate your life, the more that you can be present in the moment, things that, you know, mindfulness describes the not only will you feel better, but I think you will also, you will also perform better for others, like you will, you will uplift the environment. In my view, I certainly don't think it's enough to just feel grateful. And there are times when, when this situation calls, not for gratitude, but for a negative emotion, like anger, whatever. That being said. I think just having a much more of a baseline of tranquility and serenity, to the extent that that's in your control, obviously, emotion is complicated. That's a good starting point. And, you know, traditional prayer is all about that traditional. I begin my day every morning by saying, modality, the Hebrew prayer for Thank you God for giving me a soul for allowing me to start this day with new life. So does it have to be framed theologically? No, it doesn't. But I think gratitude that you exist at all or like room on humility at the fact that you're here You have one life to live, it's just your life. What are you going to do with it? Make the most of it? How are you going make the most of it today? Okay, you have a routine, you have a lot of things that you're required to do not all of it is fun. Can you make time for some moments in your day to remember that you have a soul? And I guess if you don't believe in the soul, you know, that you have that you have agency, if you will, I think maybe agency is a good secular word for soul something in you that's distinct, something in you that that if you did not, if you did not do that no one would the one song that you can sing that no one else can sing. I think yeah, in that sense, cultivating character is something that I feel is underrated in our society, we are so quick to point to what's wrong with the outside world. And why it's responsible for our problems. I'm not saying pick yourself up by the bootstraps. I'm not saying like gratitude. solves any of these real problems, I've just think that we definitely do have more agency at the margin than we think. So that's, that's all I'm offering there. I think if you can cultivate, you know, a handful of very meaningful relationships, and invest deeply in them. That's certainly better than like being a social butterfly. And just living your life as a so called networker. Networking is fine, it's fine. It's good for the, you know, it's good. But commitment is definitely underrated in our generation, both at the level of friendships at the level of career at the level of romance. I mean, really, at every level, like so, come in a little bit more, I'm not gonna tell you what to commit to you. I just think in general commitment is good. I mean, I could go, I could go on and on. But like, I'm trying to think what other what other general advice would I give, you have to have a full cop in order to be able to give, so figure out how to fill up your cup. And then be generous. The goal, the goal is to get to a point where you are a giver, rather than a taker. And it takes time to get there. And obviously, we all have moments where we need to ask for help. It's not like you just accomplish, be it you know, you've finished finished, I don't need anything now I can give obviously. But I think moving from a taker mindset to a giver mindset is the highest way to be and it's how many of the saints and the heroes in in our imagination, live, they live for the sake of others they to be to be cliched about it, you know, the the what do you call it the the caricature of the of the venture capitalist with the with the Patagonia vest? Is their first words out of their mouth, or how can I help? How can I be helpful? You know, I think if you can actually live that way, genuinely.

Genuinely, that is a tremendous way to live, that will be that will not only bring you meaning but bring others meaning. And obviously, if you have a sense of a higher consciousness, be a god or whatever that does help with that. Because then you know, in every moment that you're here to serve, to serve the Creator. But even without that, I think so many, so much of the form of religion can still translate in a secular context.

Will Jarvis 23:41

Like that's my there's a lot of advice there. You did mention one thing, which I think is actually under discussed, but I think super, super useful. It's, you know, try and do something, something along the lines of You have to correct me something along along the lines of that you should should try to do something that if you don't do it, it won't happen. Try and do something unique. Do you think that's important? And I found in my life, that that's where I get a lot of meetings when I do something that meets that criteria, right? It's not like I'm just doing something replaceable, something competitive where someone could come in and do you know, essentially the same job maybe slightly worse, but it would still happen anyway.

Zohar 24:22

It's a tremendous privilege and blessing to be able to self Express. And not everyone gets to do it for work. But whether you can do it for work or not, you can definitely carve out some time in your day or your week to do it. And you should you should know yourself as Socrates tells us and you can't really know yourself just by looking in the mirror meditating. And in my view, you you have to know yourself by taking action and experimenting and getting feedback from the world and that could come in the form of producing art. It could come The perfect form of starting a company it could really any taking any chance, putting yourself out there taking more risks, exposing yourself to serendipity. It's so good. It's so nourishing. It's scary, for sure. But and yeah, I don't think everybody is cut out to do this all the time, we all have kind of different risk tolerances, and some of us are just kind of happier when we're out putting ourselves out there. And some of us are a little more shy, or you know, you know, maybe more analytical. And so we want to know how things work rather than sort of this potentially ego ego maniacal view that I'm offering, which is like, Well, what do I have to say? It's like, No, you know, I'm happy just to be a helper. I, that's fine. I'm not, I'm not saying my personality type is the best. I just think that within any personality type, there's probably definitely room for doing something singular. And in a Jewish context, I'd say like God created human beings in the divine image, the biblical context, in Genesis, and much, much ink has been spilled on what that even means that we're creating the divine image. Personally, I think it means that God is a creator. And so the human being is created to be a creator. God did something that nobody else did, or could do. And God created one being that also has that ability and that obligation, that responsibility to do something that none other can do.

Will Jarvis 26:39

I love that. That's really good. That's just a, it's a really good framing of you know, of people and just just thinking about, you know, the singularity of the individual, right, like each person is truly someone singular and special. And that that's something that comes up a lot in the rational community that I like to think about is like, well, you know, I think something that's under addressed is just how each person is totally unique and special, and how we should we should lift that up in some some extent, and just the specialness of people? And how do we cultivate each individual? It seems like an important thing thing to strive to do.

Zohar 27:21

What is What do you think the rationalist community's take on that issue? Is my and what why is it sort of underdeveloped in your view?

Will Jarvis 27:30

It's super interesting. I think it comes from if you read much about Effective Altruism, like utilitarianism, yeah. Well, I think that can, you know, unintentionally, sometimes smashed down the individual into, you know, everybody, it's just like, we're all just bundles of utility, and how do we maximize that. And, you know, I think the Effective Altruism movement is very important in the sense that you should try to do charity that is more effective, like on the margin, you know, like, we can do one thing that serves 22 people, and one that can do 20. And I'll everything's equal, of course, we should do the one that that helps more people. But I think when you start trying to calculate things out to a more granular level than that, you run into a lot of problems. And it feels like a lot of the bad things in the 20th century, you know, came from these things where you just smash the individual down and, you know, fascism and communism, and just these kind of totalizing. You know, sets of community where we're all going to just get jammed together. And and everyone's the same. I don't know. I don't know, I don't have well developed thoughts on that. But that's generally generally what I think.

Zohar 28:35

Yeah, I think it's definitely a tension that any philosopher political philosopher is gonna face, because between the system and the individual, because if you, if you just focus on the individual, you can, obviously you can have a lot of inefficiency and a lack of accountability, you end up, you potentially end up celebrating some individuals more than others. And so I definitely see utilitarianism and other philosophical movements as a rebellion against that sort of an attempt to say we're all the same, because they don't like the they don't like the idea of like, why should this person get all? All the glory and everybody else be serfs? Right?

Will Jarvis 29:21

Absolutely, absolutely. You know, it's a it's a real tension. I, I'm curious, your take on this. And, you know, I don't have fully formed thought on this question, but I think could be interesting. You know, generally, what is your take on hierarchy? What is the kind of, you know, what's your reading of the Jewish take on on hierarchy? You know, we live in an age that seems to really, it's weird, some, in some ways, praise hierarchy, in some ways, be very against any any kind of hierarchy in the world. It's this weird like tension, which I can't quite get a grip on. So it's kind of a vague question, but I don't know if you have any thoughts there.

Zohar 30:01

I do have a lot of thoughts on it. I think hierarchy is inevitable. And I guess to the extent that it's inevitable, it's a kind of love both nature and human organization. It's good. Or at minimum, its neutral. You can have terrible hierarchies, you can have abuse and corruption within hierarchies. But that critique is more about who ought to be in power, rather than it is about process. Or actually, you can even have hierarchies that have good or bad processes. It's it's but um, so I think hierarchy as a term needs to be disambiguated. But, but let's just go back to the Bible for a second, like one of the core stories of the Hebrew Bible is the liberation of the Israelites slaves from Egypt. Now, it's bad that one people is enslaving another that is clearly terrible. In my view, the Bible connects that political reality, that social reality to a theological reality or that theological reality is that all the Egyptians worship their leader as God. So it follows from that it follows from the despotism of Pharaoh, that you're going to have a society arranged in a dehumanizing way. If the point of monotheism if the point of the Bible is that only God is God, no human being can claim to be God, there is a fundamental egalitarianism in that fundamental resistance to despotism in that. But that doesn't mean that when the Israelites leave Egypt, that they have a flat organization. And everybody has equal share. In the decision making process, there's still a Prophet Moses, who top down gives orders, and there's a court system with higher and lower court and so on and so forth. And of course, at the top of that hierarchy is God. So at least in a biblical context, it's not that we're anti hierarchy, it's that there's good and bad hierarchies. here's the here's the rub. If everybody is created in the divine image, then certain certain rights and certain obligations follow from that insight. And those are radical. We can reasonably disagree about what those are. But from that point of view, there is no hierarchy. No one person can claim to be better than another person, no one race can claim to be better than another race. God created all human beings as individuals equal to one another in dignity, if you will, in soulfulness, Plato, on the face of it does not share this view. He thinks there are golden souls, silver souls, copper souls, bronze souls. You know, the Israelite people are chosen for a specific mission. There is certainly within Jewish theology, a tendency to supremacism or what do you call it chauvinism to say, you know, the Jews are a better people than, than other peoples. But even within that view, I think it's not really a hierarchical view based in essence, it's a view based in being chosen for something as opposed to being born this way. So even that is kind of radical, that what would make you better than someone, if you will, if you want to put it in that and politically correct way, is what you do, not what you're born into. And you can't inherit greatness, you have to become great a person, the child of a hero can can squander that lineage and a nobody can rise in status. I think that that follows from the idea of the individual being creating the divine image, as opposed to a caste system, where you say, well, this priestly class are the descendants of the of the gods. And these, these lower classes descend from, you know, from Drak. So, so I'm absolutely against metaphysical hierarchy when it comes to comparing human beings to one another. And I think a lot of evil does, and megalomania does come from the temptation to say like this person is a better person than that person at the level of essence. But obviously, some people do good things, great things and some people don't and we should absolutely esteem and value those who exercise all kinds of heroism, including moral heroism over those who who squander it. Certainly, we need to take into account that Not

everybody has unique trials and tribulations and so it's always apples to oranges when you're comparing people. But I definitely am against the idea that we shouldn't have competition or we shouldn't afford unequal outcomes. You know, to two people who get the glory versus people who get less glory, it's just the the theological point about everyone being creative, the divine images that we're not assign, we're not attaching people's ultimate worth to any of that the fact that somebody can run the fastest mile in the universe doesn't make them like, inherently better than the person who walks in in the slowest. And the slowest way. And I think too often, the both extremes are wrong in the hierarchy debate, like the ones are like, yeah, you want amazing, that's what it's all about. Know, what it's all about is using your talent to serve. Not about like gloating about how great you are, that's Pharaoh ism. But just because you're a loser, in a particular race, doesn't mean you have to be a sore loser, loser, connect, connect to your own uniqueness, connect to your own glory, find a different race to run, and then it won't bother you as much that that you got bested.

Will Jarvis 36:21

It makes, it makes a lot of sense. And I'm always reminded, I've been reading this biography of Julius Caesar, and he walks by a statue of Alexander the Great, and he's just like, really torn up by the fact that, you know, he's like, 30, and he's not done anything near as, as great as Alexander had done by the time he was 30. You know? And so in some sense, these things just must never end, right. You know, it doesn't, it doesn't matter, you know how good you are, there's always gonna be someone who's, you know, slightly better than something better than you. And so you should get back to kind of your individual,

Zohar 36:51

I think, at the level of character, one should be in competition with oneself. That sort of connects back to what also What advice would I give is like, ignore the praise and ignore the blame, or don't Don't, don't let the praise and the blame get to you too much. Obviously, it does, it forms you, but get to a point where you're not relying upon it. Just use it, if a person says Wow, that's so smart, you know, maybe it is a smart relative to them, but relative to where you ought to be. It's actually not very smart. So, you know, not not all praise is equal. Right. Exactly.

Unknown Speaker 37:30

Exactly.

Will Jarvis 37:31

I love that. That's really good. Well, well, so hard. That just sparked a question in my mind. And it's very large question, and we're on like, a one hour podcast. So it may not be possible to answer this at all. But maybe you thought about it. You know, do you have a sense on what we're of what we're here to do, you know, as individuals as a community, you know, it could be any of these. But But yeah, and that's a very, very large question. But I don't know if you have any thoughts on it.

Zohar 38:00

If you if you take sort of a macro view of this individual question. We all have a lot in common with one another by virtue of being born in the 20th century. In a sense, we if you think of time or era as a kind of country we are in we are all nationals of modernity, modernity as a country or post modernity. And I think that what we're here to do has something to do with that because one of the calling one of one of the slogans of modernity from Ezra Pound, is make it new. There's really an emphasis I think, on invention and innovation in modernity. And corollary to that in post modernity, there's a sense of despair as to whether we can we can make anything new anymore. That's the the decadence thesis of Ross Douthat and to some extent, Tyler Collins, great stagnation thesis, this sense of like, well, all the greatness is behind us now, what can we do? What are we here to do? I think we are here to reckon with the fact that we are modern or postmodern and that we have more opportunities and more challenges than our ancient forebears. So we should I'm not going to say we should strive for progress, but I think we should, we should strive to appreciate this is how I put it theologically. We should strive to appreciate why did God put us in this historical moment and not in a previous one. You know, God gave us good dental care. And Uber Eats so that we could use it for something. I'm sorry if that sounded glib. No, we are having what you and I are having a much higher quality of life than a king in Europe who I'm in the 16th century. So what will we do with that? And at the same time, like, there's more, you know, mass death than ever. There's more complex ways that power can be wielded to oppress. So what are we doing about that? So I think it's sort of the the perennial questions resurface. And then they have a unique tint colored by history and culture. And then that's the paradox is sort of how does the historical and the eternal interrelate, but that's what I would say we're, we're here to figure out or to be district on, I think Taylor district on he said, we're, we're not human beings on a spiritual journey, we're spiritual beings on a human journey. So I would riff on that and say, like, we are eternal beings on a historical journey.

Will Jarvis 40:58

I like that. I like that. That's really good. I really liked that. I'm curious, you know, I've asked a couple people this, and I'd love to get your take. And you just brought this up, you know, to you, what's the distinction between the pre modern, the Modern and the Postmodern? Is it does it have to do with newness? Is, is it something else?

Zohar 41:19

Pre modern, modern and postmodern? Yeah, I think you can tell the story at the level of technology at the level of culture or the level of ideas, and they all interrelate for sure. I think, the pre pre modern in one telling, there's basically just before the Industrial Revolution, and after the Industrial Revolution, that's like kind of the easiest way to do it. Because for the, you know, the average person doesn't really care if Galileo or Nugent have a new view of the universe. Like, that's just fake news. You know, they're not listening, or anything. But, but obviously, the consequences of the scientific revolution are profound, not just for scientists, but for everyone. So I think that maybe I describe the pre modern era as one in which there's a certain order and naive elegance to the world. The modern is sort of one of inverting that. In particular, I think of Nietzsche, as anti metaphysical, as Nietzsche is sort of saying, it's all perspective. And in a sense, and modernity, really throwing everything on its head, right? You take take Marx as another example of Marx takes the concept of God and says, it's just a projection of society. It's just, it's just a cope. You have basically Freud doing that with every with every method, the individual tells itself, that's just your you know, that's just your Oedipus complex or whatever it is. So I think, you know, moderns kind of they, they reject, they invert, they they rebel, in the name of doing something new. The the rebel, the French revolutionaries, as Walter Benjamin describes them were shooting at the clock towers, because they sought revenge not just against the, the regime, the political regime, but against time itself against the way that time was organized. The mechanical clock, that's awesome. I think post modernity is, in a sense, a scaling back of that. hubris, a realization that, in fact, we can't achieve as much as we think when we just inverted Rebel, and subvert and transgress, that we end up being just as dogmatic and limited also, as that which we're rejecting. I think post modernism is less certain of itself than modern modernism and modernity. modernity is just like, yeah, we've got the truth. This was bad, we have the truth and post modernity is more like, we don't know, we don't know. It's complicated. So, and it's also a bit of a mixing and matching, you know, take some things from here, take some things from there. I think you have that in modernity to modernity as modern aesthetics. We're all about pastiche. TS Eliot, you know, is a good example of that the wasteland is like a poem composed of like, lots of random quotations, mixing like things he heard on the streets, with Dante. But I think post modernity takes it to like a wild extreme, because in modernity, there's still kind of a cannon that you're grappling with. And it's sort of this imposing like, sort of authoritarian father figure. And post modernity is. It's so it's sort of both indifferent and liberated from that, indifferent to and liberated from that, that gravi toss. It's more like a Uh nothing means anything anymore. So you just sort of do your own aesthetic. I think that's kind of how I describe post modernity, aesthetically. But I think that, yeah, just generally maybe modernism was skeptical of centralized power, like, it was skeptical of the king. But it wasn't skeptical of power. And post modernity is just skeptical. And skeptical that skeptics, that general skepticism, in my view, can lead to some interesting, counterintuitive places. Because skepticism is always a double edged sword, it can weirdly lead to a doubling down on or return to pre modernity. So for instance, if you say that, like we can't know anything, one response to that conundrum is to say, well, we might as well just go with this since you can't disprove it. So like Bertrand Russell, who's more modern as is gonna, like, look at these believers, they're so ridiculous, you know, I could just as well, I could just as well believe in like tiny teapots orbiting the Earth as I could believe in a God.

And postmodern isms are like, Yeah, but since it's all absurd, you might as well go to Mass.

You know what I mean? So they're not going to argue that you ought to go to mass from first principles, but they'll sort of argue for it from the fact that you can never prove that they're wrong.

Will Jarvis 46:38

That's good. That's good. And a weird place to find ourselves, I must say, Yeah, I

Zohar 46:44

think post modernity, right? There was a guy. Bruno Latour, he wrote a book called We have never been modern. He's. He was like a big environmentalist. But his views, his theories are quite postmodern. And so he there was a New York Times article about him some years ago, as he sort of realized that his own skepticism about science was being used by climate change deniers. And he was sort of both horrified. And as I recall, like, yeah, I guess I did allow for this. So I think that's post modernity is just living in in in a place of a complete disalignment of narratives where no single organization can claim that it has the answers, whereas modernity was like, this is canceled, but we have the new dogma, we have the new orthodoxy and outplacement journals, like everyone's canceled, at least, at least when it isn't my team, but then somebody cancels them. So yeah.

Will Jarvis 47:53

Well, you know, speaking of canceling, I, I don't want to get in the weeds of this. But, you know, with the current, you know, do you see the current culture war kind of subsiding, like going back? You know, we've got polarization that set the level that was, you know, pre Civil War. So it's pretty high, you know, like, really high. It has been higher before, but it's quite high. Do you think this is like just downstream of like, slower growth or something like that? And it's just kind of a mechanical problem? Or is it like, something in the water people just, you know, they want to have something to fight over? Do you have any, like, metal level thoughts about that?

Zohar 48:29

Yeah, I don't know. If we're more polarized than then. You know. It's it's hard to as I do have thoughts I think I I think a lot of it has to do with media. In general, I think like Facebook, poisoned our minds, I don't mean in the the normal way that people talk about it in terms of misinformation. I, I just mean, there's something really bad for people who spend like hours of their day scrolling through social media and posting, like, whatever their hottest take is on anything, and getting into stupid fights with like people that they, you know, with, with strangers, but even more just disheartening with friends and teachers and family members publicly. It's like utterly disgraceful. So I think as much as social media has done a lot of positives, and I I'm, you know, full disclosure, I enjoy using Twitter quite a bit, but I did delete my Facebook some years ago. I think that that media has empowered our worst habits in a clique. And that they there's like, sort of a new norm that a lot of people have to engage with everything all the time. And there's a never ending source of things to generate outrage. And so it's not that people weren't too Find it on hot button issues in every generation, it's just that now the thing that you first think about when you see that person at a party is what they posted. Instead of like meeting them with genuine curiosity and getting to know a side of them that would lead to connectivity and empathy, you're automatically putting them in some kind of box as to what, you know, what their values are. In a sense, we've all become walking algorithms, I think that's terrible. Just super

Will Jarvis 50:31

legible, like you just know, like, and that's all you identify with, because it's very, very vivid, you know, it's super compelling. I mean, like zohore believes X, you know, this is all I can think about.

Zohar 50:42

I mean, there's sort of much much ado is made about identity politics, but less ado, is made of what I would call political politics as identity. And I think that's in a sense, the root of identity politics is the forget the group, we're talking about just the general cultural trend to identify as having certain views on politics being the primary way that you want people to interact with you or that you interact with other people. And it's hard to know if that's because, you know, what, what's causing that, but I wonder if that's if that's been the case, before I think in. In religion, I do see that a tide changing, I think a generation earlier, people might have, what they might have had in common was living in the same neighborhood coming together for happy times, and sad times. And now what they have in common is whatever activist thing that they care about, what on either side of the the aisle, and if you don't share that, then you're not welcoming like community. Like you, you sort of, and what's strange is like, so in the liberal and liberal religion, it's it's sort of the activism is it replaces the traditional creed. But in, in more orthodox, or, I guess, pre liberal religion, if you will. You have the same phenomenon, like you would think that, that more culturally conservative religious people, in my estimation, would be focused on religion rather than politics. But in fact, I think everybody has been captured by a politicization of religion. And so that does beg the question of, well, what is religion? What is its relationship to politics, I don't want to like create too simplistic a picture. As if religion and politics have nothing to do with one another, but like, to put it very bluntly, we're all spin exists now. Because Spinoza defined religion as downstream of society, he, he basically says, you know, religion is just a tool for getting people to organize, and it has no inherent truth to it. It's, it's just the laws are just there to to bind you to one another. And I kind of feel like everybody has accepted that on some level. And like, it's just admitted. For me. That's sad. For me, that's sad. I'm not saying we should strive for a political spirituality. But I think we've definitely tilted too much towards the political, to the in a society that's already doing that. So like, if religion is supposed to be countercultural or interesting. What is it doing? That you can't just get from being on Facebook? If it's basically just another venue for for politicization? So that would be my critique?

Will Jarvis 53:53

Absolutely. Not. It? Well, I have the strong belief, you know, it should be above politics, right? I mean, it's some very basic level, but instead, it's just like, gets all intertwined with it now. And perhaps that's just a real preface to what people want nowadays, but it's not not very good. It seems like

Zohar 54:09

I don't think it's I don't think it's above politics. But I don't think that it's reducible to politics. Politics is inescapable. A politics, politics were political animals, as Aristotle says, and people are going to be happy or unhappy in any given room with who's holding the power so like, that's not going away. But I think if prayer for instance, is about connecting to higher consciousness, that's very different than like prayer as a script for simply stating what what you care about, and I don't I think maybe we've we've humanized religions During lunch, we've sanitized it too much. And it's become only about human values, when in fact if the the point of religion is to get us to see beyond the limitations of the short time horizon and prejudices of our given cultural moment, then, you know, we need to bring that, that sense of mystery and awe back I don't think you're, I don't associate mystery and awe with activism personally, some, some might pull it off, you know, you Dr. King pulled it off. But on the whole, I don't I think of I think of activism, mostly as imbued with a sense of certainty and confidence. And there's a time for that, but religion can't just be about that.

Will Jarvis 55:48

Definitely. I think that's really well put both the last couple of minutes I'd love to run through a quick round of overrated or underrated down. Sure. Alright, so I'll throw out a term just tell me whether or not it's overrated or underrated, maybe a sentence or two why? overrated or underrated Hegel?

Zohar 56:08

I think Hegel is underrated, because he writes pretty badly. But he's sort of overrated in the sense that a lot of his ideas are already mainstream. Even if people aren't reading him, the one the one thing from Hegel that I really do think is underrated is the master slave struggle, the struggle for recognition. It just never gets old. It's the fundamental point of it is just how being the underdog is the source of creativity and ambition, and moves history along and being the one who's achieved the highest status is actually a kind of complacency or death. So I think that is a really fascinating angle on both history and also on personal psychology. It's good,

Will Jarvis 57:02

Rawls, overrated or underrated.

Zohar 57:07

I think he's probably overrated by most people who know who he is. As to why that is the case. I mean, Rawls was a systematic thinker. One of the last but his ideas haven't really scaled beyond a very small segment of elites. And so I think if for Ross's project to succeed, he would have to be more persuasive. Beyond that. That segment,

Will Jarvis 57:44

like sets. One last one, it's an I might mispronounce your name is Jillian rose. Yep. Oh, yeah.

Zohar 57:53

It's Julian rose, overrated or underrated. She's underrated primarily because she's, she's not known or read. I also think she's, you're great thinkers, transcend. They transcend whatever views they might have taken on a particular issue. Like Heidegger, for instance, was a right winger, but somebody who's had tremendous influence on the left. And that's a testament. I mean, Hagel would be another example of somebody who's influenced basically everyone across the aisle. I think that Rose is under read. For a lot of reasons, but even though she's working on Adorno, primarily, she's not just an Adorno scholar. She's an original thinker. And I think, as such, like people, regardless of their views, on politics would would benefit a lot from thinking with her in particular. In her book, mourning becomes the law. She describes the project of being post postmodern as taking the she she She says that her project is to try to recover truth after it's been destroyed by the Holocaust and by post modernity. I think that's just a very compelling idea. And she doesn't she's not It's not nostalgic. She's not saying we need to go back to an earlier time instead of what she offers this through the lens of this motif of mourning. Is she she used the myth of faux Seon, who was exiled from the polis from the city. His wife after photos Yan died, ate his ashes, and then walked back into the city and brother brought his presence back into the city by swallowing his ashes. So she used that as a core metaphor for the philosopher's project to sign it, in a sense, swallow the ashes of reason Yeah, that that came from Reason being cancelled. After people are so disappointed with the 20th century, I find that very meaningful, it's harrowing, but I think it's a poetic image. And it's also we need more thinkers who think creatively about how to balance head and heart. And she's definitely someone who does that. That's really good. That's really good.

Will Jarvis 1:00:25

Well, Joe Hart, thank you so,

so much for taking the time to come on today. I really appreciated the conversation. Where can people find your work? Where should we send them?

Zohar 1:00:34

Thank you. Well, sounds great. So I have a podcast called meditations with Sohar. You can find it in all the places they recommended. Thank you. And I write two sub stacks. One is a philosophy newsletter. It's called what is called thinking what is called thinking God substack.com. And I do a Bible Commentary every week. Also at substack. It's a little harder to spell but@masada.substack.com. And you can just you can find all that information on my personal website. So our atkins.com or just find me on Twitter where I'm active and say hello. I saw her I can just my my handle.

Will Jarvis 1:01:16

Perfect. We'll put the put the links down there in the show notes. Appreciate it.

Zohar 1:01:19

Well, thanks so much. This is great. Thank you.

Will Jarvis 1:01:25

Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Rohit blogs at:

Transcript:

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Row it, how are you doing this afternoon?

Rohit 0:40

I'm doing fantastic. It's a lovely day. It's the end of the day. It's wonderful.

Will Jarvis 0:44

How are you? Doing great doing great. Thank you so much for taking the time to come on the show absolute pleasure. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Rohit 0:55

Oh, that's a tough one brief bio. Um, I guess. Professionally, I work as a venture capitalist. So my day job is defined and investing in interesting companies and interesting entrepreneurs. Before that, I used to be a consultant. And before that I did a bunch of different things, including running a hedge fund at one point in time. Personally, I'm the dad of two kids, two sons, ages one and four and a half, which is important. And the husband to shoot my lovely wife. In terms of ideas that I think are important that says the next is normally if I don't know how to define it, I usually think of it as a nexus between tech and culture. Although that's broad enough that it probably encompasses anything and everything. I initially started thinking quite a lot about how organizations are created, how they evolve over a period of time. And I've written about that a fair bit in the past. I guess one of the big things that I'm thinking about at the moment is what are the different forms of information transmission within organizations that actually make some of them more stable, and some of them less stable? I don't know whether that is considered a large idea, or a big idea. Now that I say it out loud. But it's definitely big in my imagination, that's for sure.

Will Jarvis 2:21

Gotcha. Gotcha. Thank you so much for giving that that bio, I kind of want to hop in, you know, you tweeted that something recently, he said, you know, the biggest lesson I had, from my time at McKinsey was that a 23 year old with zero knowledge of an industry can walk into a company and can surprisingly often make it better. What's your theory of why that is the why do organizations get stuck in these these weird kind of, you know, loops of a bad or like local minima or something weird like that, where they just can't get over the next hop and actually improve?

Rohit 2:53

Oh, man, that that tweet definitely did get away from me, what was supposed to be an interesting observation, definitely stirred up a fair bit of controversy. People seem to really have very strong opinions on consulting, which is also interesting. Consulting in general works, because it takes fairly smart. And, you know, ambitious people kind of direct them towards solving a problem that oftentimes companies just don't have the resources or the ability to do internally. So there's a there's a wonderful new article that written by sort of a friend of mine, Paul, Paul Millard, called too big to think, where it kind of talks a little bit about how as consulting firms have evolved over the years and grown much, much larger, they've stopped having a lot more intellectual heft and dominance. And now, a lot of it is just because you just sort of happen to have a coterie of fairly smart people that other companies would find difficult to attract and retain, because they're not giving them new, exciting challenges every three months to go and solve. So part of the reason is, like large companies have a lot of different types of problems, which are very difficult to solve inside out, right? Because people inside the companies oftentimes have particular biases, they're part of different decision making hierarchies that are not taken very seriously there, they have a lot more skin in the game, funnily enough, which means that like their decisions are colored by the fact that a lot of them might actually get benefits from other people making the decisions, not to mention the usual politics, which should by no means be underestimated. What that effectively means is that somebody from the outside walking in saying like if I have these sets of data points, I analyze them in this fashion and output does fall out and then we can decide from it, it becomes surprisingly exceedingly valuable. I move back and forth about whether this should be the case or not. We can talk about, you know, hypothetical utopian scenarios where this is not the case. But today, it most definitely is the case. And that holds true in a vast number of types of companies. The caveat that I would make is that almost all of the times the impact that is made is by solving a problem, which is not the company's core problem to solve, if that makes sense. So you're not usually helping create prop trading strategies for Goldman Sachs, you're not trying to create, you know, ad market optimization for Google, you're solving somewhere where the company is not putting all of its, you know, resources, manpower focus, and therefore, external folks coming in with a fresh perspective can oftentimes add a tremendous amount of value.

Will Jarvis 5:41

Gotcha. Say you're not, you know, teaching fishermen how to fish. It's more like there's the specialized problems that are outside of their their given skill set. And then you come in and you can you can, you can find alpha in solving those problems, because they haven't spent time focusing on it. It's not the key area of expertise, if that makes sense. Yeah,

Rohit 5:58

I mean, a fisherman will normally know how to fish. But there's a whole set of questions about I don't know, taking the analogy too far. Like, what type of rod should they use? Where should they actually go? And do what are other fishermen doing? What type of tackle should they use? What are the right types of bait, from what we have seen some of these things in something like fishing is very, sort of a much more locally determinate. I mean, over a period of time, people kind of develop these kinds of intuitions, so all fishermen will know it far better than young. Not always, though, I mean, the world changes, you have carbon fiber fishing rods. And I'm pretty sure that like from 40 years ago, you might not exactly know how to use these things. So it's not about the core of the activity that the people are doing necessarily where the value is actually being added. It's everything else. But the funny thing is, everything else is essential, right? I mean, without that you don't really have a company to run, you don't really have a business to run. I should perhaps also point out like a lot of the there are the normal political answers right there, we are hired to kind of push through an agenda that already exists to rubber stamp something to fire people to take ideas from like five levels below in the company and surface it so that the people can make a decision, all of which have a grain of truth to it. But I do find it instructive for it to not purely be a cynical take on it. Because value is actually created. It's a fact.

Will Jarvis 7:24

Right? It's there's more to the story than it's just like, This person comes in, you know, say it's young you you're a McKinsey consultant. McKinsey is a good badge, there's some credential there that okay, like that smart people have okayed this, you know, the boards like well, McKinsey said it was okay, so it's not we're not gonna go, you know, nobody got fired for hired McKinsey kind of kind of a thing. But that's not the whole story. There is actually value and kind of advice that's given that matters.

Rohit 7:49

It's almost rarely the case that it's that simple. And the one piece of evidence is the fact that like there's McKinsey teams would often work 80 hour weeks, and there is no reason to work. If your job is to rubber stamp someone else's thing, right? You can lend out that reputation pretty easily. Even if you wanted to all you had to do was to justify the decision that someone else had made. There's obviously like a bias toward solving for problems that people actually do find becoming more more important problems, right? I mean, that's just part of life, right? I mean, you, you're in a client service job, which means making the client happy is kind of what you're paid for. But at the same time, you're not going to continue getting paid for long periods of time, if all you're doing is trying to make the client happy, if that makes sense. Like you do have to bring some independent perspective. Again, not a panacea, it is a client of his job. And ultimately, you can even think of it as a load bearing load balancing job, right. I mean, does a company want to employ, I don't know. 50, extremely well paid consultants sitting around just in case they had a problem for them to solve? Or would they rather call them when it's actually needed in and just make sure that the benefits that they bring exceed the price stack, which is a reasonably good forcing function? Gotcha. Gotcha.

Will Jarvis 9:08

You mentioned one other interesting thing you mentioned, the consultants may not exactly have skin in the game, like people who are inside the firm do, which reminds me, I used to work at an enterprise software, machine learning stock startup. And one thing I realized was that most people that bought like software within a large organization are often in some sense, trying to raise their status with the company's money or something like that. They're trying to get ahead with the company's money. And that's probably is that your sense of like, that's a better model of how to think about like how people make decisions within organizations is more like a public choice perspective than that someone is usually optimizing on trying to make the firm better.

Rohit 9:48

Yeah, I think skin in the game is important. But it also makes you liable to talk your own book, which is the flip side of it. So you might have a You know, if you ask me, for example, for stock picking advice, and I gave you advice, and I told you these are good, because I happen to have bought them, you would rightly look at that and go, either you can say, wow, you know, we're off, it's kind of clearly doing what he thinks is right, so I should believe him. Or you can say he already bought these things. So he's just trying to talk his own book. And they're both valid perspectives. So I don't think of either of these things as a panacea, inside larger organizations, definitely happens that people raise their status by talking about different things that they can actually do. I mean, in many ways, within any large organization, especially if you're somewhere a few levels down, and procurement or whatever, and you're trying to kind of purchase a piece of software. There's the object level question of does this solve for something that I want it to solve? And there's also the meta question of, am I gonna get credit for being the person that brought it in? Or like, get blamed for being the person that actually brought it in? I think these are, these are both questions that the person would have to do. And these questions are semi independent of whether they are the people signing the check or not. I mean, other other complications come into play if the purchasing party and the using party are not the same, as we saw in use at enterprise software that used to happen all the time, right? In the old days, where the procurement team would decide on price and some list of features that you have to take costs. And then the people inside the company who have used the pieces of software, basically hate it, because it's not built for them. It doesn't matter what you decide or not, someone else is saying yes. But the way they're saying yes, by buying I don't know, IBM, or Oracle, or whomever, is governed also by the fact of not just does it do the job, but also by the fact that if I'm the person who buys it, or if I'm the person who gets experts on discount, am I going to be seen better? Am I going to be seen as worthwhile, you know, person who can kind of do this job? So yeah, I mean, there's all these internal pressures when you're trying to kind of create something or build something inside a company, right.

Will Jarvis 12:12

Make sense? I'm curious, you might have kind of answered that question that this question. Next question there. What is common knowledge within kind of elite consulting firms that lay people might find surprising?

Rohit 12:25

Well, good question. Um, I don't know, there's a lot of drain from consulting to the rest of the world, because consultants do keep quitting and the rest of the world. In fact, you know, I used to joke that everybody at McKinsey at any given point is looking for a new job, right. And they're they're always about a week away from quitting, whether that's like a first year analyst, or like a senior partner who's been there for 25 years, they're all about a week away from quitting. In, in many ways, like, there used to be a lot of common knowledge that was built before like frameworks and things like that, or how to think about companies, I feel like that now, they almost don't exist in terms of sort of differentiated knowledge, because everybody knows it. Some cultural things do stand out, though. Things like I mean, one of the things I appreciated quite a bit was like, at least in the firm, you had something called an obligation to dissent, which meant if you're in a team meeting scenario, you're discussing a bunch of ideas, problems, solutions, whatever, what have you, and you have a different perspective to everybody else, you're supposed to stand up and say it, regardless of where you are in the hierarchy, right. And that, I feel is a, it's actually practiced, which kind of blows people's minds still, maybe not 100%, it's not everywhere, but at least it is practiced enough that it is a reasonably important thing to point out. And I think in generally bringing that to real life is a it's a fantastic thing to bring with you, right. And regardless of anywhere else you go, and it does. The other is a bunch of other regular things that I don't know if this is common knowledge or not, but like couple of the other things that I took away is how to run meetings, you know, something fairly simple and straightforward, you know, have an agenda, run people through it, ask people for feedback. I mean, there's a lot of these basic, you know, blocking and tackling kind of stuff that the consulting firms do kind of teach you that I find shockingly absent in the rest of the universe once you come out of it. That's great.

Will Jarvis 14:27

That's great. I I'm curious, you mentioned that kind of the really high attrition rate. Why do you think that is like like, what lens the lens these firms to having such a high attrition rate where everyone is constantly looking for a job even though on the outside everybody's trying to get in? You know, I remember in college like, you know, this is immense pressure for for kids to try and like get into kind of an elite consulting firm, but at the same time, everyone that ends up there, it sounds like it's trying to get out at some level.

Rohit 14:54

Yes. The best way that I found to describe it is that it is like a university, it's closer to like an MBA school rather than a job, if that makes sense, very hard to get into, you gotta try and hustle and you know, do your best to get in. Once you're in, you think of it as a shorter term sentence, right? I mean, you're here for a little while, you learn a bunch of things, you'll meet a bunch of great people, you'll have long, long lasting friendships, and, you know, all of the rest of it. But at some point, you gotta graduate and move on to your real life, which is what most people do end up trying to do. There are object level factors, like, you know, a lot of travel and, you know, no work life balance, etc. That does, that is part of it. But part of it is also that the business model for most of these firms in corporate a certain amount of attrition, because that's their model, they hire large numbers of extremely bright people, give them quote, unquote, an education and a bunch of different sectors that they might be most interested in, gain value from them during their learning process. And at the end of it, most people have a decision to make that like, do I want to stick around and try to make, you know, partner or senior partner and, and be in the firm for a long period of time, because I happen to love the work or love the people, you know, some combination thereof. But mostly people do realize, just like with the universities, that after a couple of years, they kind of know what they want to do. They like some things more than other and therefore, they're like, once I know what I want to do, I might as well just go do it. And for some people it does, it happens to be consulting, although it's not right there. The the, when I joined, one of my friends came and told me like it's, you know, it's not outer up, it's sorry, it's not, up or out, it's actually outer up. So if you don't get out in time, you turned up, you do end up moving up. I mean, I feel like it's obviously a joke. But there is a grain of truth to it, that there's a certain type of person for whom the combination of answering a bunch of different questions, meet deep relationship with a specific set of clients customers, is what they want to do, and the rest of the pack is going to comes along with it. For most people. That's not the key goal in life. Got it? Got

Will Jarvis 17:11

it. I want to move on a little bit now and talk about genius grants. It's something you've written a bit about. What's your theory on? Why genius grants work? And should we have more of them on why they work? Is it some is it about the money? Or is it more about getting the signal and like this kind of hero license to do something incredible? Or is there something else going on?

Rohit 17:33

So it's a good question. I think I first wrote about it sort of a while ago. And since then, there's been a flourishing of genius grants that actually come up, which I take to mean that my thesis was right, even if it's not causally relevant. I think the way to think about it is a little bit like if you roll back the clock, I don't know, 100 years, then you had a certain group of institutions or places that placed emphasis on the type of person you were right. I mean, they didn't really have formal standardized admission processes. It was highly biased in the in the extreme negative way. But it also meant that when Vidkun Stein decided to get his PhD, he could just get it based on the work that he had done, as opposed to having to jump through several hoops. He even declined to write, I think, the 300 word summary of his thesis of Tractatus, and I think Ramsey wrote it for him, which is one of my interesting tidbits that you could just do that, at that point in time. Roll the clock forward to today, we just have a much larger number of people, in some ways, a much larger number of eligible people for sure. And as a consequence, we all have to jump through 75 hoops, right? Talk about getting into a consulting job, or talking about getting into business school or talking about getting into any school for that matter. You have to write essays and like you gotta go to extracurricular activities, and you have to be pretty extraordinary before you're able to actually do anything. One of the weird things here is like if you ask people who are at the top of their fields in, I don't know, academia, tech, science, whatever. They often say that like, I wouldn't have made it today because like what it required, what it requires of me to be at the 99th percentile with zero mistakes over a 15 year time frame is just something that nobody can do. As a consequence of all of this, I feel alright felt, and I still do that. There is a large contingent of people who are yes, they're bright, but they also have a high potential for achieving extraordinary things in the world, which is just not being capitalized on. It's a discovery problem to a large extent, and the capitalization like they they have to be encouraged to kind of go and do something else. If you're the right type of person and the right type of environment like If you're a tech minded chap who was in Silicon Valley in the last 20 years, the world was okay. Right? I mean, he was encouraged for you to go build a company or join, etc. But most places in the world are not like that. And most types of excitement people have about different subjects. It's not like that. So genius groans effectively, the reason I came to it was I was looking at the teal fellowships. And I was struck by the fact that A, the teal fellowships have been extraordinarily successful. It is, it is annoying, how how well that has worked out, I would wager that if there was an equity component to it, it would have worked out better than TEALS investing career, it's pretty much that great. And as a consequence, when you kind of look at it, you're like, A, this is super small, right? I mean, that's kind of the one of the things that jumps out, it's like, he does one of 10 students a year for like, over a period of 20 years, it's minuscule, which means he has to be giving focus to actually doing this properly. So put these three things together, you have a discovery problem to find extremely bright people and encourage them to pursue their dreams. And the way to solve that discovery problem is for people to use, Khalid referred prestige, if you want, it might be a little bit of money, in some cases for them to go off and do their work. But mostly, it's a question of encouraging people to actually go and do things that they think can add value that normal life kind of holds you back from for a variety of circumstances. So I do think they're important. I wonder, in retrospect, whether Genius Grant was perhaps too extreme a name to give it, but in some way, or some shape, or form, I do feel like, yes, there, they are important, because if you want to capitalize on the people who are at, you know, 80, to the 95th percentile, call it 80 or 80, to the 99th percentile, who have high variance possibilities, that they can do extraordinarily things, maybe, but they are, they can also kind of go the other direction, who don't necessarily fit into the mold that makes people successful are not happy with it, they don't want to go become a, you know, a lawyer or a doctor or a banker, or even entrepreneur, then

we're losing potential as human race if you're not actually taking advantage of them. So you do need to create new platforms where they can possibly be successful. And funding is a part of it, you asked about money, I think that is a part of it for some of them. Because there are folks that I knew whose lead said, Oh, great, this means I don't have to go do the normal academic academia as my job right, I don't need to kind of write three papers and like a job market paper, go hunt for it. Instead, this provides me the freedom to actually write the way I like and sub stack or, you know, write an actual book that you know, a lot more people will be excited about, basically do scholarship in a way that is divorced from sort of the prestige of institutions that you happen to be associated with and kind of divorce that a little bit. So I think it's wonderful. That's, I guess, the lens, I put on it, that it's a solution to the discovery problem by using nodes, who already exist in different parts of the ecosystem.

Will Jarvis 23:13

So it's kind of it's kind of an answer about giving people some amount of slack, some like, it's a bit of a credentialing. And then it's also the money component, all it all kind of comes together to make something special happen and the selection effect on the other side.

Rohit 23:28

I mean, ultimately, what you want to have happen is that a person with potential to do X feels compelled or able to go into X, sometimes the lack is money, right? But quite often, the lack is somebody just saying you can do this. So go ahead and do it. So it's like, I don't think either I don't think these are completely independent variables quite often. But like, the amount of money is not that large. And the amount of push it takes is also not large, that large but combined together, as long as it can push somebody to go and pursue something that they want to pursue, then suddenly, I think we do better as a species if you're able to encourage a hell of a lot more, rather than kind of laying out the path and saying, you know, walk down this brick road. And you'll reach a destination. It used to work for a little while in the past, but I think that was a age bookended by both places where higher variance outcomes are what's most important. Got it.

Will Jarvis 24:30

Speaking about this higher variance outcomes. You've written extensively on EA grant funding and VC should a subset of VA great grant funders just be more aggressive and swing for the fences more in their giving kind of like early stage VCs do?

Rohit 24:47

I think so. There are two major questions here are in order to kind of make that a reality. Question number one is that we see works because our returns are extraordinarily legible, right? Like it's a, it's one metric you have dollars out. So, you know, everything else is a byproduct, but like you can at least see, with dollars out what's been the most valuable thing or like, you know, who's been more successful. So that legibility is important with something like EA tries to do also by making like, you know, quality measurements, etc. But obviously, it's a little bit muddier than something as clean and crisp as as dollars out. I think that I think increased variance there is important, and to their credit, that they there is enough interest within EA or, you know, similar organizations to try and shoot for moonshots that they do try to pursue it a little bit, whether it's in things like longevity, long term ism kind of questions, or AI existential risk, and the questions, things where they think that the potential outcome lies somewhere far in the distribution. I think the question the second big question, apart from the legibility to me is, we see works because there are 1000 VCs, right? That means you have 1000, different firms creating their own PCs, finding companies on their own. And despite the, the crazy amount of like, you know, fighting for deals that happens within them, they do try and create some form of an independent perspective of what type of company is most important. And like, yeah, a lot of the times it might look like cookie cutter, because everybody kind of copies everybody else. But despite the mimetics, I think there is truth to the fact that there are people who think certain companies are important and fund them, and they go on to become, you know, some of the largest successes, the heterogeneity, there is something that he doesn't have still I mean, it has, it's basically equivalent to one large fund trying to run multiple strategies inside it, as opposed to multiple funds trying to pursue their own independent strategy trying to maximize a metric. And there's the they're slightly linked, because the availability of dollars as a metric is what helps you create multiple strategies to maximize the dollars. But similarly, if you had said, like, the availability of quality saved as a metric, and you had multiple ways to go off and do that, and the funding kind of broke down into multiple sub units, who are very independent, to be able to go off and do it, I think it could be interesting. There are the beginnings of it, of course, right? I mean, the FTX Future Fund kind of goes up in some directions and strives to fund stuff. Open fill, does its own thing. So there's, there's a few. But I mean, I don't mean this in any way negatively, because it's still the early stages of the movement. But you do want to fight for the tail of the spectrum. The contract thought I have to the exact same question as whether if you're able to have such radical improvements in the measure that you find most important by giving money directly like the gift directly, then perhaps we should just do that kind of continually, rather than worrying a heck of a lot about whether we're doing things that maximize the tail. So the spectrum. Part of the reason that works is because this is not exactly an efficient market, right? I mean, you've had measurable outcome driven and philanthropic investment that has happened from the time of Bill and Melinda Gates Foundation. So or even before where people have said, like, you know, we'll measure it, right. I mean, let's figure out what the right way to spend capital is. But it's a, the, the risk you take is not necessarily the biggest question here as much as like, are you trying to maximize Eevee? In some weird sense?

Will Jarvis 28:43

Gotcha, gotcha. So on the whole, should we have just, well, we can't wave our magic wand. But if we could, would we better if we had just more EAA funders, like just more diversity, if there are 1000 da funds that we're all trying to, you know, maximize? eV, you're the kind of the expected value that qualities or something like that, you think we'd be somewhat better off?

Rohit 29:02

I absolutely think we'd be better off if there were 1000 funds competing against each other. I think that's kind of what we should see in a weird way. That's kind of what we see from the NGO movement, right? I mean, there's a bunch of different NGOs that raise funding independently and try to go solve the problems that they feel are more important. We can argue about sort of whether they've been successful or not for a whole whole list of reasons. Some of it is just the basic principal agent problem that exists that like, you know, the incentive they have is to sustain and survive over a period of time, as opposed to sort of succeed in solving that problem. Because solving it means, you know, that particular organization doesn't really have a reason to exist. And even if it is not an explicit reason why some of them don't succeed implicitly. Yeah, you can kind of see why that would be the case, right? Because ultimately, that's not the way you know, double bottom lines are much harder to solve for than single bottom lines. But at the same time yet, I do believe that like a mark could be solution, such as it is would be far more intriguing because they can go off and solve things in corners that you might just not have seen before.

Will Jarvis 30:10

That makes sense. I want to talk about a related topic, venture capital investing something you work in. What's your theory on? Why the top quartile of firms do so much better than everyone else? Does the story have something to do with like, venture is a Keynesian beauty contest? So if you are at the top, you can put this like positive signal on the companies and then they have an easier time raising the future and hiring and things like that, or is it something different?

Rohit 30:37

There is something to that. Some of it is just because so the kind of dirty truth have we seen some ways as fast, maybe the first few stages, a lot of it is competing for the best companies, where there is reasonable level of consensus often about who the best companies are, right? Or at least who the good companies are. What that basically means is, like, if you're looking at I don't know, stripe in 2016, there were a bunch of people who thought stripe was amazing. And then you're kind of competing with each other to say, you know, who gets to put in the cheque in this particular company. In any kind of scenario like that, if you have a brand or you know, you are known to be good, then naturally you do get an advantage. So the fact that you've succeeded before there's there's a very clear Matthew effect, that the fact that you've succeeded before means that you will be able to get into deals that you wouldn't have been able to get into otherwise. Not the only reason, but this is part of the reason that, you know, if you want to get into a deal Europe, if you're Sequoia, you want to get into a deal, there's a reasonably good chance that you can get into that deal. And that does tend to lend to their longevity. It does mean they can't screw it up, of course, right. I mean, you can kind of do that over a period of time. But it is definitely helpful to have that as your the wind in your sails. It also helps you with things like hiring, right? I mean, you get to hire better people, you actually are even the, you know, the best people, you can poach them if you want to, or you can groom them. Brand does help. The second thing is that there is still turnover, because if you fund counterintuitive investments and actually grow up, there can be new funds that, you know, show up at the top end of the curve. I mean, there have been a few right in the last sort of decades. I mean, one of my favorites is like Lux capital, which was founded sort of probably closer to 20 years ago now, but definitely not one of the originals that have kind of made their name over a period of time. And recent wasn't funded sort of all that long ago, I mean, they got funded, late 2000s, right into it, like you know, before before, you know, or a dish in that kind of timeframe. And they've done pretty well for themselves in terms of making some bold bets early, and then building on their successes while making sure they have an independent ethos. So yes, it's possible, you have to do something differentiated, if you want to break into the club. And if you do something and you do break into the club, it's usually not like a leaderboard, where you pop up and someone else falls down, it just means that all you're not competing with each other. Because when Andreessen popped up, it wasn't like, you know, Sequoia fell away, right? I mean, now they just bump heads and compete on deals the same as benchmark are the same as whomever so it does. It the reason for longevity in some ways is because the assets themselves take a long time to mature, which means like, if you're being a good fund, and you can kind of your company's doing well then over a period of time, you do continue to do well and invest more and more. So some reasons are intrinsic, like better people, better company selection, etc. And some people some features are extrinsic in the sense that like, if you're one of the good funds, larger funds that have been investing over a period of time, then you do have longevity, right? Because like you have at least like 10 years before your companies go public. And then people say like, oh, yeah, they weren't that good. Anyway,

Will Jarvis 33:58

that makes sense. You mentioned longevity there for firms. I'm curious about companies, you know, what are some of the common traits of companies that last a really long time? And how did they go about kind of solving the succession problem, which seems to be the very thorny?

Rohit 34:12

Oh, man, this is a long and perhaps slightly counterintuitive question. So I had this thought, like quite a while ago that we do things like measuring customer lifetime value, right, if you're in a company, etc. But similarly, if we measured company lifetime value, we will have some really weird things that actually pop out of it. Because there can be companies that all of a sudden come into the limelight, create an extraordinary amount of extraordinary amount of profits and then just sort of die out, essentially, you know, this is the sort of, if you look at s&p 500 over a period of time, I mean, there will be a crazy amount of turnover. But at the same time, if you look at companies that have actually survived for a long period of time, they kind of fall into a few different buckets, right? I mean, there's a, there's a few that are here, like, you know, in the UK, like financial services, institutions, insurance companies, Bank of England, Barclays, they've been around for a while, right, like, a few centuries. And they exist in some ways, because they provide, effectively what is a utility function, and they provide it with the backing of not the backing of the state, at least the blessing of the state. So there isn't, it's not a hyper competitive space where you have new entrants popping in left and right, because for, for us, as consumers for the government, as I suppose, you know, taking care of the consumers, everybody says, Yeah, we need to have a fairly stable banking system, and your guys are allowed to make, you know, profits, but you do need to provide the basic services that everybody needs. And in order to make sure that you provide it, we'll put a bunch of regulations on you. But at the same time, we will try and make sure that you're safe. And, you know, you're not any Joe can just sort of stand up and try to create a new competitor. So there's a bunch of them like that, right? That's one group. If you look in country, by country, in some countries, especially I think, if I remember correctly, in Germany, I think the oldest firm, again, a few centuries old, is I think, a brewery, or, you know, you start seeing these local businesses in Japan, it's again, quite, it's obviously the home of a large number of these types of companies. You have old construction firms that specialize in building temples or you know, motif firms who kind of stay in sides of pilgrimage and actually sell the sell the mochi to the to the travelers who come. And what's interesting about a large number of these firms is that they're almost anti growth. And they don't think of growing and expanding as the fundamental thing that they want to do. Right, they look at it a little bit more like a sacred trust that, you know, whatever, my 30 generations before me actually held his business, I want to do it as well. Now, some of they treat the succession battles differently, some of them have fairly strong familial ties, because a lot of them are family owned businesses, which kind of helps, right? I mean, keep it in the family, it's part of the trust, and everybody knows who you are, your identity is linked into that. Some of the law, other sort of Japanese firms also use this intriguing technique of like, finding strong operators, and bringing them into the family. So they might like, marry your daughter, and suddenly you make them into a Honda suddenly, you know, it stays in the family, but like the person running it is not technically related in the in the blood center, as you would imagine, otherwise, I found, I find these techniques to be interesting insofar as a, there's a very clear focus on ownership and continued running of the business. The reason a lot of these companies don't seem to fall off is because they continue doing exactly what they're did, like, tighten the times past and don't change anything about their performance at all, which I think is fascinating. Like, I mean, the motor shop doesn't automatically start selling slurries. You know, they kind of continue with what they're doing. It's more tea and green tea. And that's all you get. The it they they focus on longevity, specifically, as opposed to growth and sort of expansion effectively. It's an interesting way to look at the world.

Will Jarvis 38:21

Absolutely. So it's like, it's a story where if you, you probably get one thing to focus on, we talked about double bottom line earlier, and how difficult that is to hit two targets. If you're hitting one target, which is longevity, perhaps you can optimize around that. But if you're trying to do growth, and last long time, it's too difficult,

Rohit 38:39

or something 100%. Exactly. I do think so I think it's a you know, they have very different focus, because one of the things about growth is that ultimately, to grow, you have to kind of stretch yourself, you got to try things, you got to take on things like that you have to take risks effectively. And if you're not doing any of that, and just focusing on solving that one need, that doesn't really change because as long as the world doesn't change, this doesn't change. It's a different mode of solving that problem, right? Of course, the world can still change, like, you know, people stopped building Shinto temples, and suddenly, your business is not so booming anymore. Absolutely. But by barring those restrictions, it's a different way to think of what a business actually is.

Will Jarvis 39:23

I love that. I love that. Well, Rohit, thank you so much for taking the time to come on the show. Where can people find your work? Where should we send them?

Rohit 39:34

I write essays on www dot strange, loose cannon.com And I'm on Twitter at Christian Joe hit if you want to say

William Jarvis 39:41

hi. Awesome. We'll link it down in the show notes. I appreciate you coming on the show.

Rohit 39:45

My absolute pleasure.

William Jarvis 39:50

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars do say joins us as a co host.

Will Jarvis 0:39

Well, Marshall, how are you doing this

Marshall 0:40

morning? I'm doing really well. It's cool to do this in person I have not done in person podcasting. And just like months, I used to do this all the time. But everything now for me is mostly just zoom. So this is actually pretty exciting. This is awesome. Cool.

Will Jarvis 0:52

Well, yeah. Thank you so much for having us down here at Austin. It's great to see you. It just catch up a little bit. Versus Do you might give us a brief bio and some of the big ideas you're interested in.

Marshall 1:02

Yeah. So brief bio. I am a podcaster. I host a couple podcasts I host one called the realignment, which is really about like American politics and trends and how the world is changing. Other one is counterbalance. So it's like foreign policy mostly focus on like defense. And finally I do one for on deck called the deep end, which is the tech sector and our founders are operating. Good

Will Jarvis 1:21

deal. Good deal. Can you talk a little bit about, you know, how you first got into the realignment, recording the podcast and the ideas behind the realignment and what really interested you there?

Marshall 1:31

Yeah, so two different answers to that question. So number one would be I used to work in PBS. So I was working on a show called firing line, which was a reboot of William F. Buckley show. And we launched it in 2018, with a new host, Margaret Hoover, Herbert Hoover's great granddaughter. And what was crazy about that experience for me is the whole idea was like, Hey, we're creating this show debates, good faith conversation for new generation. It was done through PBS, aka the most legacy system POS imaginable. So the way I think about this is when you're programming a show like that, we would literally say to ourselves, okay, well, the prime viewer for this show, is a 68 year old couple in Boulder, Colorado, who at seven o'clock watches the news hour for an hour, right? They've been watching Washington Week, they bought a bottle of red wine is between the two of them. And then if we get a good lead in slash guest, they'll stick with you for 830. So all those factors together does not produce something, but is gonna really like talk to like younger folks. In general. At the same time, too. This is incredibly expensive. It's in person, it's New York, there's a unionized staff and all these like different bits. So it means that there's a lot of budget there. So I do this for a year. And I start to realize like wait a second, like podcasting in this format should be cheap. Yes, right now we're sitting with $100. Once, and we're recording it. And what you could actually be doing with this idea of like, good faith conversation is do it for cheap, while also booking the same guest, which is what you can do with zoom mic actually online, because it meant that the when someone doesn't have to go to your place, it makes it super easy to actually do it. So I raised a tiny bit of money sort of podcasting and just been doing it for the past three years, too. And I really hope that's a real encouraging sign for folks who want to get into this space right now. Because it seems so cheesy to be like, well, like anyone could do anything now and like look at the wonders of tech, but it's actually just true like on ironically, it would cost basically nothing to do these things. To the the realignment idea. I've always been interested in politics right forever. Yeah, I was I was actually part of that like News Hour at 7pm. Yeah. But I was basically never really satisfied with like, like the status quo like a super contrarian person. So like I was in blue, Oregon, Portland specifically. So I was kind of like, Oh, I'm kind of like a moderate Republican. And then like, I moved to like Austin, Texas, and I Okay, like I'm a moderate Democrat. I've never really satisfied with like, the specific labels and the way things were particularly. So then this idea of a realignment really appealed to me, and that a realignment basically is that during certain periods in political history, labels, ideas, figures, institutions are actually in a state of flux, and what they actually mean are just up for grabs.

Will Jarvis 4:16

Gotcha. That's cool. I'm curious when you talk about the realignment what in particular do you mean do you mean this like realignment of working class people from you know central like Democrat kind of coalition's I think about this and like kind of the Rust Belt states to a Republican voters and Trump or is it something different?

Marshall 4:33

That's a part of it. So for example, yeah, like what you're talking about, you're seeing the fact that the GOP is starting to perform better with working class voters in general, you're seeing the fact that the Democratic Party is doing better with college educated voters like a way to think about this as and this is crazy to think about today's politics, Ronald Reagan, one college educated voters just outright in 1984, which is the exact opposite of what you really see today. Another example this too, is like a racial realignment. So you're seeing the fact that that you Yo P is trying to actually perform better with working class Hispanic voters in places like Texas, Ohio, etc. Wisconsin, I just did an episode on this. So like that's an example of like specific demographic realignments. But at a narrative level, I'm also interested in like, issue areas that are like redefining themselves. So a good way to think about that is the China issue, the way we thought about China, basically, before 2013 was entirely different. China is benign, it's something that we could like work with. It's something where we're maybe in competition with them, but that competition is friendly. Now, it's much more aggressive. Now we're talking about Taiwan, those different but so that's not the technical definition of a reliable, we should really think of it all of those ends.

Lars Doucet 5:36

So there's the question of polarization. And then there's like this other like sense of realignment, like so polarization is like the things we're fighting about, and on opposite sides of is different. And that can like rotate is what you're saying. And then with the China issue, it feels like that seems a little more bipartisan to me. It's like, are you talking about like a kind of shifting consensus as well, is a second way you're using that term? Yeah,

Marshall 5:57

that's a good way to put it, which is, in an ideal world, a realignment leads you to a new consensus. So a way of talking about like post 1990s Politics is it's been just constantly shifting between, hey, we want change. So let's go for Brock Obama, we want change, let's go for Donald Trump over Hillary Clinton. Oh, we didn't like that change. Let's go back to Joe Biden, and then just constantly pendulum swinging. The China issue is one of the few issues where it has just taken itself to its final concluding point, which is we are in an adversarial relationship with China. The debate is what like what we do with that, but ideally, across every single issue, we will get to some sort of consensus position. Whenever this realignment is complete.

Will Jarvis 6:39

Gotcha. What do you think special about China and the China issue in particular, that lent itself to is because it's like an adversarial competing power, is that white lends itself to kind of this consensus in American politics about kind of our stance. Yeah, it's

Marshall 6:53

a great question. I'd say it's that the issue is very empirical. So the worst realignment issues are issues that are moral morality and like value judgments. So like, with student loan forgiveness, there's a real debate there. I mean, obviously, like there are numbers here, but there's a debate about forgiveness and a question about like, who deserves what in society and what like the proper things we need to really value? With China? It's very direct. The question is, okay, 92% of semiconductors come via Taiwan, Taiwan is a democracy. There's a huge set of like allied countries, whether it's like Japan, or South Korea or Australia, that would be they would be incredibly under threat. If the Chinese were to invade Taiwan. That just means there's actually we're not debating the things and what they mean. The question that how you respond to them, so that's really why you can see okay, we all can agree there's a China that's being aggressive towards Taiwan. That's why there is consensus that's why you have Marsha Blackburn going but also at marquee going at Rocky's the senator from Massachusetts. He's like a green New Deal. Senator Marsha Blackburn is like an anti big tech Republican from Tennessee. They disagree on pretty much everything what they do agree on. Is this like, Okay, how do we respond to this threat like once again, like this, I don't like the whole we have lizard brain. So we don't want to focus. I think that's like really lazy. It's a little too like Malcolm Gladwell 2000s II. But I think there's just something to be said about like when things are directed, not up for grabs, you can respond and assess that.

Lars Doucet 8:26

So what are some examples historically of his successful realignments that have taken us to new consensus so like the first one that comes to mind is like World War Two used to have like, you know, who was the The Aviator Lindbergh. Lindbergh? Yeah, he was very America first, I think even like, openly pro Nazi. And then like afterwards, like after 1945. And like the whole war and everything, like we were like, super united around, you know, the choices we made in World War Two, what are some examples of like, what you would consider successful historical realignments that moved us to a new consensus?

Marshall 8:57

Yeah, so pick this a bunch of these Exactly. This great author called Frank De Stefano has written a book on realignments and people really like his episodes on the realignment so I suggest folks check those out. But to I'll pick out is starting one, just the new era. So I want to just say like war, I wouldn't just say like World War Two, I would actually say that period of like 1932 through 1945, where you have the you know, FDR administration forge a new consensus on both like the role of government and public life so like, that's, once again, like whether or not you like, like, the specific way that social security is structured, right? Whether or not you like have specific qualms with like New Deal programs. There was a way that the US thought of like the role of government before 1932 FDR, his coalition forged a consensus on that, and this relates to Charles Lindbergh point. The other part of that consensus was America's role in the world and assuming the mantle of leadership from the British after the empires, you know, obviously killed or given its death kneel during World War Two. So, that is an example of how the next 4560 years their debate It's so there's debate about do we privatize Social Security? Yes or no versus a debate? Do we have Sweden and Finland enter into NATO? But the debate is not actually Oh, the US is gonna go back to the way it was where we are just like this island of tranquility away from the problems of Europe and Asia. So like, that's the consensus. And I say the second one that things provokes, we'll probably think about because it relates. And both these realignments are helpful because they're also relating to challenges we have today. So the FDR period is useful, because on the one hand, whereas this domestic debate, like how should the government approach student loans, how should we approach questions like healthcare? How should we address these issues of like, public goods not being affordable? That's a debate about the size of the government. That's domestic but then there's also debate about what our role in the world should be, how should we respond to a rising China? How should we deal with Russian revanche ism, like those different bits? The second one would be the industrial revolution. So that period from like the 1890s, to like the 1910s, where there's a debate of like, okay, so capitalism is really growing, the US is like, clearly going to be like the leading leading economic power of the 20th century, how do we structure government to either enable, and or restrain those forces? That's the progressives, those are those different bits? Those are examples how you had a world that looked different after they were done.

Will Jarvis 11:17

Gotcha. You mentioned FDR there. And I'm really curious as the successful realignment and the New Deal, and all this, like building this new government infrastructure. I get the sense that the the new everyone in the New Deal, it's a bunch of other people kind of like us, and they would send us down, you know, rural Arkansas, electrify Arkansas, you know, here's a couple million bucks. It kind of like ITT Tech now, where all the competent people seem to go into tech to build companies. Do you think it's pot and I get the sense that the American government does not work as well as it did when, during the New Deal when FDR was in power? And we were building these kind of federal infrastructures? Do you think that's true? And what do you think we can do to actually kind of improve American governance at this point?

Marshall 11:56

It's really interesting question, because if you take what you're saying, literally, like does the American government work better get obviously works better, I think about like the amount of like power and money and resources the American government has access to. So when pure and this actually gets to the core of the dilemma, I would actually probably argue, with the exception of, you know, Obamacare, healthcare.gov like that, that disaster in 2013 a billion dollars for a website, that doesn't work. Actually, government works really well, at what it's actually doing why we spend trillions of trillions of dollars and it works. Like we give payments to people during COVID. Right? It works. I think what you're getting at, if you're taking the idea of what you're saying is, it feels like government cannot meet the challenges that are actually in it can't actually do anything. So for example, if I'm talking about how well actually what are you talking about government works great. What I'm really saying is, during the Great Society period, government got $1, which replaces welfare, a determine those bits, and government is still pretty good at doing that thing. Governments are able to do those things. But that's not the challenge. The challenge right now is not like how do we send people to $1,000 checks. That's something we're actually very good at the challenge is not like, hey, like, how do we have like a multibillion dollar military that employs millions, millions of people. That's not the challenge. The challenge is, oh, hey, like our energy infrastructure is a disaster right now. Oh, it actually turns out that our government isn't effective at like controlling the price of health care. Oh, it feels like the society itself is stagnating. That's a different set of challenges than the one that I think governments really set up for. So to your question of like, what do we really do about this? I think it's, I just I just did an episode on Shinzo Ave. You know, the recently assassinated former Japanese Prime Minister and I was reading the the author I spoke with Tobias Harris like wrote like the last biography of Shinzo Ave. And he's, he was, you know, he lived in Japan has really studied him. And he talked about the speech that Shinzo Abba gave where he swears were Shinzo Abe a specifically said quote, my mission is to bring Japan to a level where it's ready for like the waves of the next 50 to 100 years, which I just think is awesome. I think that's like I think that's a great just like if you're getting started with this is like a great like mission statement for what a politician is. And I think that's where lacking from government right now. I think what we're lacking right now is okay, like, let's just like set up what what are the specific problems? And you can actually articulate most of these problems in a way that doesn't have to be like partisan like, it's not whether or not you like renewable energy, or like oil and gas like Texas is utility infrastructure is a disaster. Right? That's not up for debate. There's no debate though. I

Lars Doucet 14:39

lived through it. i Yeah, we had we had no power and we're like, where are we going to get water in? Yeah, that doesn't

Marshall 14:46

have to be partisan. But what that could actually lead to is, and I think Catherine Boyle and I on our American diamonds are talking about this. Like, I think the way we get through this is the current set of challenges like that is going to lead to newer generations of politicians who are responding to different incentives. So you're talking about like, oh, everyone's like going into tech, you've noticed this, like everyone in tech is talking about politics now. Tech is incredibly tech is so political isn't even funny right now. And that existing is going to create new incentives. So

Lars Doucet 15:17

and you're saying that's a change, like 10 years ago, tech wasn't as politicized. Or you're not saying,

Marshall 15:21

exactly. So I Tech Tech Tech was political and says everything's political. So Tech was giving money and people weren't going to join the Obama administration. But tech is interested in shaping narratives. And the actual set of I think about like the match in American politics is a chessboard tech is actually interested in shaping the actual nature of the pieces and where the pieces can move. Like what's think of like, Mayor Suarez, I think this got kind of superficial. When is it gonna lead to anything bigger? But Mayor Suarez is like hey, like, Oh, wow. Like there are all these like tech founders and VCs who have a lot of money, a lot of resources like big audiences, I'm just gonna like, say, How can I help? And I'm going to be like, very friendly with them. And we're talking about Bitcoin a lot. Is that going to lead somewhere like Super Game Changing? Probably not like look at the price of like Miami City coin. But that is an example of how other politicians are gonna start following that point. So the reason why I love the American dynamism episodes I do with Katherine is, I always get so much feedback from non political people. So like non political people, I sorry, non technical, non technical like, oh, wow, that was like, really interesting. I never thought of that. This way, you're going to start seeing where you will respond to things in that dynamic. You're gonna say to yourself, yeah, like, I want to live in a more dynamic country. And that is an example of how it's just like native, but that's how I kind of think, think this way through.

Lars Doucet 16:40

Well, so this, this is a good segue to this half baked idea have about an internal realignment, because there's this general sense, I'm not sure if it's actually bears out, you know, to smart people, you're so you can tell me if it's real, but like, everyone I talked to feels like the national level of government is just like frozen, you know, filibuster every election. It's like 5149, or 5050, you know, and we're just sitting there getting nothing accomplished, and nobody can get their way. So we can at least see if anyone was right. You know, all our presidential candidates are historically unpopular. It's always like the world's least popular candidate against the world's second least popular candidate, you know, and I feel like there's this energy of people like, well, we got to get stuff done somehow. So let's move it perpendicular to this axis of trying to get things on a national level. And what you're talking about kind of like rhymes with that this like notion of like tech getting interest in politics, that it's like, well, if the government's not going to do it, then like, let's start doing what we can with the levers of power that are available to us. What do you think of my half baked idea, this internal realignment?

Marshall 17:41

No, I agree with it. And I kind of would frame it as follows. The real question is like, where's like the center of gravity in American politics right now. So what is the way to think about this is that the post FDR era, there were things like welfare reform in the 1990s, where you got a lot of like innovation in the states like Wisconsin, Tommy Thompson was the governor of AP partially influenced the way we reformed welfare. But like, it's just been all been about DC. And I think what's interesting right now is that whatever solves this national impasse, these different arguments, these different frames, like they are actually going to come from folks who are outside of the specifically like toxic like nature of like DC right now. So American dynamism isn't the answer to everything. But once again, I will say this, again, I keep hearing from folks like left, right and center, how the ideas are interesting. That is an example of how you're having people who are outside of the specific gridlock and toxicity coming up with like different articulations. I also think at the same time, you're going to see an environment where if DC is gridlocked, then there's an opportunity to engage in places where things are not as gridlocked as well. It's kind of unfortunate that like Gavin Newsom is not a particularly like effective like presidential candidate, because there's just a world where you could see okay, well, like Florida is just like a red state now, right? It's controlled by Republicans. Like it or not, they have specific visions of how you should dress education should treat COVID CRT schools, etc. cetera, et cetera, culture wars, that's the red version, then you've got Gavin Newsom, California has like an opposite answer to every single one of these fronts. An interesting situation is you could really have like that California vision versus the Texas versus versus West Texas because like Texas politicians for variety reasons, can't go national as well. But like so it's really like Florida, and California, just like those two visions. I think eventually, you're going to basically see that happen. Like what happens when politicians are able to like uncontested flee, but actually I'm going to do something which isn't helpful in a podcast. Yeah, no, go ahead. Because this is actually kind of the reason why I actually don't believe this as much, especially on the Democratic side, is that and this is actually my Texas is a really interesting state. I don't think states where any party has like one party control are going to produce The movements and figures who can win nationally. I did an episode with a guy named Peter Lydon about this where he's like California he did this piece. California is the future of American politics like Jack Dorsey retweeted it back in 2018. And his point is like Monterey, California, California is this dynamic part of the country, it tends to lead American politics it gave us very, you know, give us gave us Reagan, Barry Goldwater performer there in Orange County gave us Arnold Schwarzenegger, who was like a really prelude for Trump, not in terms of policy. But in terms of like, Hey, this is a guy who's able to go out to the party system and take power so we can get California is the future. The reason why I said that isn't true is because California is not a competitive state. Any politician who rides to the top isn't actually competing in the spaces that require that are actually like the center points of the political system. So for example, if you are Kamala Harris, Kamala Harris has never had to grow up in an environment where Republicans could ever when Kamala Harris, isn't trained to give a good answer on CRT to a skeptical audience, Kamala Harris isn't actually really structured or engaged in an environment where like, you just generically could say whatever you want to have to play to your base. I know this in Oregon, like Oregon is a state which is 100% Blue. It's been there for a while, it's gonna say there for a while, most likely, and that's an environment where you're selected for how do you rise up the party system? How do you basically like Wait your turn? States like Texas are interesting as they get I think the whole like blue Texas thing is like overstated, but like Baito is not doing too badly. Part, you know, it's purple. Like I think Matthew McConaughey probably would have started more of a decent chance at winning, he was ahead of you know, avid bike over right 10 points. Once again, like that's right, you know, once things start, it's different. But that says something, Matthew McConaughey and Matthew McConaughey who was able to win the Democratic nomination and win the governorship of Texas will get a better training and how to navigate the pressure points of like American politics. So like, okay, like guns are polarizing abortion is polarizing. How do I basically thread this needle? While still getting a majority coalition? Actually, Texas is an environment for that. New York City isn't in California isn't. And Florida, Florida kind of is. But so that's why it's a it was a long answer. But I think that that's that part of it.

Will Jarvis 22:15

You said Ford is but but I what I get from what you just said is perhaps we should be like, long, like Glenn young can like the Virginia governor and like short DeSantis at some level.

Marshall 22:24

Exactly. No, that's that's actually that's actually a great way of putting it I have a bunch of like, conservative like Hill staffer friends. Everyone has their group chats. And they're talking about how like, they're just shocked at how well plan Younkin has consistently navigated these moments, like what's going on. He's like a Carlyle Group, like super rich dude. But he has been able to thread the needle on like CRT issues, he's been able to, like thread the needle on like, once again, like this is like an endorsement of his positions either way, like he's been able to successfully, like, communicate these issues, like very effectively. And that's like, that's actually a good point. Virginia is another good example where and this gets to I think, like the broader toxicity of politics, like, could Glenn Duncan like what a Republican primary at the presidential level, like probably not, but longer term, it's really those purple environment. And this is what Glenn young can also gets better than a Charlie Baker. And better than a, the governor, the governor of Maryland, who's whose name escapes me which which it really shouldn't, because those are both Republican governors, who are leading in blue states, two different models. So those blue state Republican governors, but they have done is they effectively just govern as like Central left moderates. That's what that's the reality. The reality is the political classes on the Democratic side in both states are just very ossified. And they're just boring. What they come and do is say, look, here's the deal. You don't like the establishment on the downside. Yeah. But like, I'm safe. If you're Charlie Baker, you're a healthcare executive who's very much like this right? Difficult Republican tradition. And then the government is like, centrist, right, that isn't useful at a national level, because like, that's not like, that's just like, not the replicable situation. They actually can govern by not having to make those difficult choices. Glenn young can is interesting, because he's like a moderate by background, who is still doing the tough thing, which is like making a choice, which moderates don't want as a moderate myself, like we don't like do it. Like it's easy, right? It's a young kid, his thing is like, no look like, I read center, right? Yeah, in terms of my ethics, but like, actually, like, I'm a Republican. So that means that like, I have to be like a pro life person. Right. So he's saying how do I articulate pro life positions? How do I talk about CRT without going all like Dan bond Geno, right, but also just being like I think this is like out of the norm. So like, that's another reason why it's kind of interesting because then the one other thing I'll add to this, and this is why I spent way too many episodes by going after Andrew Yang. Way too many episodes. My editor was like dude, like we get it might be for people like Andrew Yang is like that's what an effective centrism looks like, which is basically like, oh, like, it's not that we have to make tough choices. And it's not that like there's this actually binary moment is that there could be all these other settings. And they're actually just, yeah, the reason why the abortion and gun debate issues, and race and CRT issues are so like, terrible, um, aside from like, the actual effects, right? I think from a political perspective is like, actually there are just like two choices. Either it's too easy to get an abortion, it's country Exactly. Or there are too many abortions are there or it's too like locked up? Yeah. Either. There are too many guns in this country, or we need to have more restrictions on guns like those are actually the only answer primary. It's binary. And I really beef with moderates and centrists who basically hoodwink people into thinking that oh, like, you're ticked, you're ticked off, and I'll polarize things aren't what if there were something different? A question is interesting when he came on the podcast, and he did not give me a convincing answer. So I will.

Pocket instead of just giving a follow up, I'll just like whine about it. Later, I was like, I was like, Andrew, it's great to say that, like, you know, you don't like these binary choices. But who would you appointed Supreme Court? If you were president? Yeah. Because the second he would have to make that choice. The fourth party obviously being like a center to center left institution they'd pick would almost certainly be a pro choice, nominee. Okay, then we're back where we started. You know, it's kind of like I wanted to hear his thoughts on this because like, this is where I'm like, the mood got to see and and so I was like, I think I'm taking crazy pills. Okay, we're talking about supply right? All American politics is it's like a series of coalition's the fixed group, there's moderate tech bros, there's like Yin B's, they're NIMBYs they're left this there are working class people there are like LGBT people, all these groups, if all we're doing is like adding another set of parties, it's to actually the same number of people instead, so you actually haven't increased like supply. So it was kind of interesting. Like, what if we like what if we like brought in like 100 million new immigrants who didn't have like the set of biases who didn't have like all these different things you could just send us I was like, hmm, that'd be kind of interesting experience of adding new parties. We have the same set of coalition's all we do is like throw on the titles, right? Wait, like the what say the gang coalition, let's say they get like a third of the vote. They take the tech, they take the tech bros. They take center, centrist center people, they take the country club Republicans, they take the Biden Republicans, they take a Democrat who's like I can never go for Bernie Sanders, the second year of Supreme Court Justice, where the only actual questions that matter are gun guns, and abortion Oh, and by the way, with the student loan things probably over the Supreme Court. So that's another example where that really matters. They're going to end up caucuses with the Democrats we're back we're right where we started so I, I really, if I can give one thing for less than that it's like really think of these things as coalition's and things will

Lars Doucet 27:53

make a lot more sense is that like a kind of like, even super case of like arrows theorem that it's like, because of the way our government is structured in the way you fight over things like your we're just like, eternally doomed to like kind of sort out into a bipolar kind of coalition sorting, like not just because of the election system, but because eventually you're gonna have to decide who you appoint to the Supreme Court, and then you're either with us or you're with them.

Marshall 28:19

Great question. The thing I push back on is like the idea of like, the way our government is structured, because that's just that's just politics. But even like, a fascist dictatorship has to make a choice. Like Xi Jinping has to decide like, Hey, do we invade Taiwan? Or not? Do I go for my third term? Or not? To why like, what's the deal with the Chinese? Should the chat should China have a zero COVID policy? Or should we open up like binary choices are inherent in governance, and too often because I really like like, where questions coming from too often reformers to this kind of annoyingly like technocracy, if we could turn the dials to the right degree, we can fix everything by saying, you know, if we didn't have first past the post elections, and if there were open primaries, and if there were more parties, it'd be different. Like, sometimes that can be true, but right now, we're in a binary moment. And so much of what people are gonna get over have to get over the next three or four years, is the fact that during binary moments, it just sucks.

Will Jarvis 29:13

Right, right. is So is it something where, like, yes, on the margin, like maybe you do like pro voting, and it's like more medium a candidates and come down the pike or something. But the end of the day, like all the applause lines and political speeches are getting the other side. At some level, it feels like

Marshall 29:27

during a moment like this, yes. And like if it's in look, this is why a I'm always like thinking about like, book projects, like way, way, way down the line. It's something I'm really interested in. It's just like, as someone who's born, I tend to like looking at the 1990s and treating the 1990s as like, wow, there was this moment where like, everything was kind of interesting, and it wasn't awesome. But there was a chance to forge a new consensus there was approach always different. We didn't take that for a variety of reasons, but basically, like, that is a period where there were opportunities to be like very positive, and building not just have to go for the applause lines, right? Like, Al Gore is like running on climate change and reinventing government. Now it's like a real project that you did like the information superhighway that just isn't one of these moments. And there's this like, really just deeply and I think we'll get to my role as like a podcaster later. But a very concerted decision I've made in the last year like make a good living this way is like, look, I can get a lot of clicks telling you guys that this is like easy and straightforward. And that your one final victory away from defeat from victory. Yeah, both true and untrue. I think if you're if you're Blake basters running in the Arizona GOP primary, Arizona, GOP Senate see right now. And now the issue the the racist swinging around the abortion issue. That's actually an example of how a victory at the Supreme Court could actually lead to a defeat at a senatore. He's down 10 points. Now.

Lars Doucet 30:54

I'm stealing one victory away from defeat from now on.

Will Jarvis 30:56

Yeah, that's right. Yes, absolutely.

Marshall 30:58

That's the nature of these like high stakes moments. So but it's basically it's basically just sort of like what guys like accept the fact this is difficult. It's not easy. And this is what this just looks like, you know, I'm sure, like, if you're sitting in 1892, I'm sure you're like, oh, man, like, all these changes are afoot? Are these big political issues? I don't really like the governing class. Am I going too hot and bothered about Grover Cleveland? If I told you, but guys, like it or not in the, like, 1910s, there's gonna be this progressive movement, and all these changes are gonna happen. That was, that wouldn't sate anybody Exactly. But it's also just the harsh truth. Like the harsh truth is that if you're looking for big victories in the 2020s, like, you're not going to have a good time. Exactly. And what I think my goal as like a community builder, as a podcaster, is like, How can I help people come to a chord with the fact that the debate is like, what do we do in the 2030s? And how do we make the 2020s just not like a loss? How do we like minimize the damage? And then how do we actually get to into people who actually can do bigger things, because I think that time is coming. But it's easy just to like, Robert takes her I call like, COVID is going to, we're going to open up and we'll have like a new American, like Renaissance or when that didn't happen, because that's just not what the 2020s were ever going to be.

Lars Doucet 32:15

Yeah, it reminds me of like, how everyone just like thought we were in this big moment where we're gonna like, change everything, we're gonna reach this new consensus, we're gonna come together, just like we thought that after 911 to, and we're came out of it more polarized than ever. And so I'm kind of wondering, you've talked about this a lot in your podcasts, this notion of like, vibes, right, how everything is just vibes, like nobody cares about policy. Everyone just cares about how you present and how badly you can bloody the nose of the other side, at least on the national level? Like, is there any hope of escape from just the rule of vibes in the 2020s? Is that the Miss we're trying to just like, fight through.

Marshall 32:53

So I would push back and say, Actually, I think people care about policy, like a lot. Like for example, like President Biden's poor decline started during like a boss, like, regardless of what your position is on, like, whether we should have stayed in Afghanistan or not, like, I think the terrible way the withdrawal was implemented, like that significantly affected polling. Decisions, like how you handle the Ukraine war, like, people identify generally people care about policy, when I talk about vibes and basically it's ephemeral, by definition, but when I talked about vibes, I'm really talking about the ability to just like read the room, and actually perceive like, we're politics, or there's just like, fun German word, which I found was just like this fairpoint and it means like, it's like in a battle, it's like the center point. It's like, it's like when I was reading this book about Napoleon. And basically the point was like, Napoleon can like always find the SharePoint in the battle. There's this huge battle versus these huge armies but there's like this really like this point. So we're gonna talk about vibes vibes to me means like, if a politician is good at this politician could pick up like, okay, like, oh, wow, the country is like not really feeling it right now. And how do I speak to that? How does this change the way I perform? And I think it's it's kind of funny why I think a politicians did a great job of this is like John Fetterman. Like whether or not he wins. And this isn't exactly this isn't a science, but AWS is vibes are just off. AWS is very clearly a dude, who was like, hey, like, I'm a smart guy. He's a smart guy. I'm a smart like, accomplished guy. I'm telegenic I'm gonna TV. Look at what Trump did. I could do that. And what Fetterman is very accurately assessed, whether it's just him from him is like, yes, it's just off. This dude just isn't from here, right here. It's like this dude was just sort of like you know what, I'm just gonna like move this pa Yeah, like I'm not really from here but like, I can pull it off. I'm just gonna do it and he is just calling it out. That's an example of just like reading the vibe like he's not like feminism making this right about like, universal health care and like policy because like that is The vibe of that of that campaign is not the vibe actually isn't about policy. In that case, there's just something like Broadwood is picking up on. And I think that like, in an ideal world, you'd have a combination of like, policy like we had a q&a. We had a q&a from a listener where they're like, do you think Fetterman is going to be a good thing for American politics? Whether you're left right or center? I don't think John Fetterman is going to change anything like personally. Because like what he's doing he's got the vibe down but I don't find him particularly impressive is like a I think I think he's going to be like a was it this is fine. He's going to be a generic, like, left of center, a bit left of centre Democrat. That's just that's gonna be his thing. He's gonna He's gonna vote. He doesn't have anything. I don't think he has anything particularly useful to add. I will say, I think his like motor dress is probably like a really bad thing. Because this is also something that I talk about a lot. Yeah. This is this is a this is a this is a real point of frustration for the audience. So like, there's a lot of populist people. Listen, I hear that a lot of people who are populist who might listen to the show, and they're like, Marshall saga, were you guys mad at John Fetterman for REG wearing shorts and sweatshirts? And why do you get mad when you have a picture of a GOP senator if like flip flops and shorts were like walking around Congress? People were like, all I care about is I want people who do the right thing. I don't care what they look like. And the real conundrum here. Two things. One, we've kind of run this experiment. Think about it. Like we've had declining dress standards since the 1960s. Has that produced better policy? Like on a very basic level? It's like, Wait, so we've tried your experiment, right? Like we don't trust like Don Draper anymore. Like we don't have evening dress. I must say that was like a good thing. I'd say that's definitely the way to fog. We don't want to be like the man in the gray flannel suit. I should not be like if I ran a company, I would not have people like the realignment was like bigger and in person. I would not say like, You guys better wear your suits. Because if you don't have a pocket square, you're disrespectful. But that's not my vibe. But my point is we've experimented with decreasing dress standards. And we haven't gotten better policy. All we've actually gotten is a real lack of respect for institutions, because for me, and this comes from like being in a fraternity and like being sort of institutionally focused. The reason why John Fetterman is supposed to wear a suit is because John Fetterman when he's in the Senate shouldn't matter. If you are a senator, you are ultimately one of 100 people in this institution represents something bigger than yourself. So guess what, it doesn't matter? It doesn't matter what you John Fetterman want to do, it matters that you're in this institution. And in this institution, there are rules, and you follow the rules. And we're aware of realizing I probably find that they all had matching tracksuits.

It's something, it's something that we're it's just like you do not matter. Because what people should really understand is that a lot of the time when they see politicians like dressing down, and not like institutional cueing the rules, they read us over there, like, you know, the cool, none of these people are cool or casual, because it's like, this is the same people. But a person who is running for office now is the type of person who would run for office in the 1960s. So it's the same personality type, obviously, like arrogance and narcissism are probably like required operating on a federal level. So I'm not just giving cheap shots, but it's the same personality. They are just doing in a disrespectful manner. They are actually just saying, like, you don't want like, I actually just don't feel like dressing up. So I'm just like, not going to do it. So you're not getting better policy. They're being kind of cynical, and it's just sort of bad. So what I really enter here with is like, I advocate for just uniformity of dress. But even if everyone give Zuckerberg up, if everyone showed up on Zuckerberg, like Everlane t shirt of jeans and like new balances, I kind of be okay with that because it would represent subliminal, subliminal eating your narcissism to the institution and to the actual role that you have. Right?

Unknown Speaker 38:40

Yeah, that's interesting.

Will Jarvis 38:42

It seems like this is like a super underrated a point like it just the it's somewhat, it feels like we had this crazy polarization other than the last 20 some odd years, I guess, you know, maybe started with Newt Gingrich, maybe it's been going to the 70s. I'm not exactly. Sure. But But how much do you think it is? The fact that people and politicians have it's somewhat gotten more individualistic, or does that not matter at all?

Marshall 39:07

No, it's a huge, it's a huge question. Two parts of that. So one, yeah, that plays a huge role in it. Because under previous systems, like the party had just total power. This is where I get really annoyed when you know, people like Andrew Yang, talk about how Oh, like the parties, they're so powerful. It's like a republican party didn't give a platform in 2020. They did not vote on a party platform. Because everyone understands that the party doesn't actually matter. I kind of think of parties as like a record label. Like the party is just like hey, like, I'm like moderate so like I'm a Texas Democrat that says oh, hey, like I'm in Oregon. We like status quo so I'm going to Oregon Republican party label in the past there was literally a smoke filled room where they said like literally, these are these are these are happening and look, it definitely like went too far. It was something kind of crazy, but I just recently learned just like, think of like the 1968 presidential campaign like RFK wins all these primaries, he's assassinated. But even if he'd won those primaries, it was technically possible the Democratic party bosses would have not actually given him, the nomination would have given it to Hubert Humphrey, the sitting Vice President, now that ended up you know, happening, because like the assassination, but that could have ended up happening. That was not a good world. But if we think of these extremes, we've swung too far to the other extreme, where now, every single individual politician is incentivized to ignore the institution, ignore the coalition, ignore the teams that do whatever they want. So this is really why I really think folks who are dissatisfied with the status quo should really ask themselves deep questions about this moment, which is that like, how has John Fetterman and people like him thinking, but I'm here for whatever I want to speak of faith? Because I think I think John Fetterman seems like a nice enough guy. I'm here to interpret whatever I think the people broadly speaking want. Got, it's just too far. Because the incentives really stack up. So to the point of polarization, that's a situation where as the party has lost control whenever we do whatever they want. And during an era of like, low institutional and like low trust, it's created an incentive for politicians, basically, he just go hog wild and do whatever they want. And to be like a boomer for a second, if you go back to the founding fathers, they would say, that's not a good thing. But it's actually not a good thing for a first hitter, to think like, hey, like, I can just do whatever the heck I want, right? Because like, I'm judging it to be the right thing, because like, something I'm really interested into. And this is also why I push back on people who argue we need to have fundamental reforms in the system. I think we just have, we're just late stage. We're at late stage folks who just grew up in the old world. If you're a senator, now, if you even if you're like a Gen X, like late stage millennial, like you just grew up with, like the 1990s, and the 2000s. Like as your actual model, you don't know how to operate in a space like we have today. So like, they just have like, it's just a disaster, like bad incentives, like the wrong actors. And one other quick thing I'll add to because I know this, people are probably thinking about this. This is however, also why I want to go back to our earlier conversation, why I think folks should really think about the whole idea of like DC being toxic. This is also why we shouldn't think just electing more young people inherently like actually fixes it. Because like when we elect young people, we just go into the system, and they just like replicate the badness of like, This system allows you a different different level. So that's why I think like someone who I'd be really interested in politically is like, let's say there's like a tech founder who is in like, some like American dynamism, space, actually don't like what's think of like Ryan Peterson from Flexport, I will be interested in how someone like him responded to to the political system, because Ryan is deeply aware of like supply chains. That's actually an issue. It's like very up for grabs, like he has really built things. He's very fluid, he's very talented. I'd be interested in how someone like him, like behaves in a political system 10 years from now. So what would happen if he were senator from California? Now, that being said, I think if you were to get elected now, it wouldn't lead to anything, because he'd be entering into the toxic system. But like, that's my point about the 2030s. I would demand fundamental reform of the system as if I could demand things. If in the 2030s, when you have time to work these things through when you do have the world change. If we still can't do things, then I'm like, okay, that's kind of the thing.

Lars Doucet 43:28

Yeah. So one of the things that really strikes me about that is that you've got this kind of like seizure of the standard means of control, and it kind of rhymes a little bit with me with like, other places. We've seen those disruptions, you know, with like, standardization of media, or whatever. It's like, you guys are busy disrupting right now with podcasting, and things like that. And it feels like right now, like, you've got institutional DC, you've got this gerontocracy, right. And then you feed young, ambitious people, like AOC into it, and then they start coming out kind of like standard issue, Democrats or whatever, you can push back on that if you disagree with it. But like, there's this notion of like, you've made this case that like DC is just this machine that like turns people into people who perpetuate the ineffectiveness of the system. One thing that I've noticed is everyone I talked to they care about such a different set of like when I said vibes before any pushback on actually agree with your pushback, because people do care about policy, but the kinds of policies like, I mean, people care about abortion, they care about CRT, but they also care about all these other issues that like don't really get played at the federal level. You know what I mean? Like, it's really interesting to me, like on the federal level, where like, Biden can't decide if home prices going up is good or bad. You know, when you like, see them, like talk about this? It's like, you know, and, and all kinds of other issues like with student loans, I guess it's something that is being played right now. You know, but it feels like, you know, in the UK, they're debating like the cost of living crisis and all these things. I feel like there's all these issues that don't get play that are more like, and you're talking about, like the Flexport CEO, you know, I wonder if in the 2030s, we can have this more of sewer socialist and whatever the conservative equivalent of that kind of movement of a get things done and solve actual problems for people movement looks like and how do we get

Marshall 45:06

there? Yeah, so a couple of things to that. So number one, I would say, but I wouldn't actually describe DC as a gerontocracy, because as we've been stated, there are plenty of young people who are elected like last night a Gen Z are one of Democratic primary and a very strong blue seats. So we're probably not our first Gen Z member of Congress. So it's not that they're the issue is just always old people. And like, funnily enough, like, I think that Joe Biden was more in touch with the country than like Pete Buda judge or Kamala Harris, where debate debate how Biden is performed by his Yeah, Biden, I really push up on this November 2020, Joe Biden, as a very old man had an accurate read on where the country was. And wristwear point of that moment, relative to his much younger competition. So pushback or gerontocracy, here's the actual issue in DC I think the issue of DC is, no one basically knows what they're doing. In the sense that like, so for example, let's talk about AOC for a second, because I actually really don't like when, you know, like, super erect leftist like oh, look at AOC like she's just like a total sellout. She's kowtow into Nancy Pelosi always to robots like look like the actress because like, what exactly is like AOC supposed to do this system just won't let her do what she wants? No, it's he doesn't know what to do what she wants in the system. So for example, so here's an example of this like, and this is like, if I get stuck with AOC, I would genuinely ask her this question. She is fascinating to me. Because on one level, she is very eloquent. She's very talented as social media. But she has this terrible habit of polarizing herself for like, no good reason. So green New Deal. Already a very polarizing thing. Why then is she decided to get in fights about Latinx usage. But genuine, I did an episode on this, it'll probably come out by the time like this is out and look like I would never like use the term Latin X, I would say Latino, Latina. Like I'm a fluent Spanish speaker. So I just wouldn't do that. But at the same time, I get why someone would say like next. Yeah, so just shut up. Right. Well, why don't you if the issue right now is that any issue of its touched instantly becomes toxic to polarize? Yeah. If you're already touching, what say, the green New Deal? Why would you also become known as a person who's getting in and getting in polarizing fights about law next? Why are you deciding that it's a good idea to get in Twitter fights with Ted Cruz? Because what's gonna happen is with those two issues, Ted Cruz fights and Latinx they invariably are going to infect your position on green New Deal, yes, it invariably is going to affect your position on the on student loans, like another incredibly polarized issue. So my point is, it's not the system that's breaking AOC like, Biden just pass probably like the strongest, like what legislation we're gonna get into, she's getting no credit for that. And that's because she fundamentally did not operate properly. And I think from a playbook perspective, and this is why like, I think there are a lot of people who just like are keeping their heads down right now as I think they should be. People are gonna learn like, Okay, interesting. You have to make choices versus what Ron young can knows. Yeah. And Charlie Baker doesn't know or maybe it's not up for grabs for him. They see the governorship fun young kid wants to be president Charlie Baker knows his best bet is health and human service. Secretary, but if you're if you're if you are a smart, like kind of leftist personally thinking like, Okay, I would have to make a tough choice on the green New Deal. Yeah. I'm not gonna get into Twitter beef with Ted Cruz. Right. And I should also think to myself, Yes, I get a huge like Instagram following. But like to what end, but this is, this is my favorite thing. This is what works. He developed like, there's this obsession with saying like, Oh, like these millennials and AOC. They know how to use like Instagram, but I'm like, Okay, but what to what use? Was it? Yeah, well, think about it. Today. AOC? Is mastery of Instagram, get the green New Deal passed? Did it make her the centerpiece for climate legislation? Is she better set up to win the New York primary? If you ever primary Chuck Schumer? The answer is no. So during this period of figuring it out, people want to be big people are going to sort right. And that's basically what my point. So I don't think there's anything smart to close it, but I don't think there's anything systemic. It's breaking AOC I think she and her team are having to make tough choices, where a lot of the time they're wrong.

Lars Doucet 49:36

Okay. It's like back to the point then. So that covers AOC specifically, but like to the more general point of like, whatever the DC machine is doing and what it optimizes for, it seems like it's not serving, not just the method of not getting things done, but also like these other issues, it feels like that a lot of people care about that don't necessarily get played because they're either not they don't have high culture, war valence, or they're not the kind of things that the The people in the institutional fights are caring about right now, you know? And so how do we get them to care about them in the next 10 years?

Marshall 50:07

And this is okay, this was helpful. Like, frankly, this is kind of the way that's done. So like, no, seriously. The thing that's interesting, if you look at like young politicians, young politicians are able to like, notice things. Like, I'm really interested, like, I read a lot of political biographies. And I'm like, really interested in like, what do people not in power think? What are people who are going to be empowered? I think a good example is the following remember, during the height of the supply chain crisis, when you know, Ryan Peterson is out in the boat in LA Harbor, like literally like live tweeting, he leaves some people food. I've asked this to so many people, I'm like, why wasn't Pete Buddha judge? On the boat with him? Great question. Right. Like, when that would have been and you could say to yourself, well, you know, infrastructure, it's not like a sexy issue, but like, this is where vibes come in. Right? If people might, Pete Buddha judge should have been on a boat with Ryan Peters and saying, yes. Hey, guys, Christmas, the holiday season is in danger. Chris, Christmas. Haven't you guys all basically notice to the start of this episode that America doesn't seem to work that well anymore? Exactly. Why Pete budaj edge, because he's a self interested politicians. I'm working with my good buddy Ryan. Yes, yes. to dynamically fix this problem. And the Biden administration is going to fix this problem. Yeah. That is what political talent is. So I've asked a bunch of friends of mine. I've asked like, for example, like, friends of mine, who are like state reps, yeah. Hey, they don't they don't know who Ryan Peterson is? No, they don't really know, the supply chain issue. Because this current set of people whose approach to politics was formed in the 1990s. Through the 2010s. They are not good at what politics actually is. And I think if Pete Buddha judge were as impressive as people saying is, he would have been on that boat, yes. Because I'm just sort of like, how are you missing this? But the answer is he's missing this because he's too stuck in the current system.

Lars Doucet 52:15

So you're saying it's not that he decided not to get on the boat. He wasn't aware that he should be on the boat. And he wasn't aware that there was a boat

Marshall 52:20

exactly like that. No, that's actually exactly it like, and this is something that Catherine Boyle and I talked about, like she was saying the thing of reason she's optimistic about American politics, people like worrying about this point. She's like, I hate tech propaganda. Like even even even the like the founder or conversation gets a little like awkward sometimes, to be entirely honest. But I think this is entirely a good victory point. She's like, at a core level, like being a founder like selects for certain skill sets. Yes, you are addressing problems. You're attacking them with aggression. You own things, you're accountable, like that's the deal. Yes, that if you are smart, you are a politician listening to Catherine Boyle saying that, and putting that into your system for what I should actually be taking. So if you're once again, and this is like the funny take, like, and this is what I'm still wanting with AOC. But I think she's the way that the media talks about this point, because we're talking about media here. What I love is like you'll you'll I did this interview with two New York Magazine reporters wrote a book about AOC. And they made the statement that, quote, student loan debt is like the issue of the of the millennial generation. And once again, this isn't about debating, like the policy approach. I don't think that's true. But I actually I actually think that if you even like, hey, like most homeowners don't even go to college. So they don't even have that. Or if they do have it, it's like not as high. Right? Right. That is an example of like missing where, like, the spare parts are missing with a center of gravity is the center of gravity in American politics. Post COVID. In September 2021 was, holy crap. Everything is so broken. Yes. That needs to be fixed. And I hope that politicians and one of the politicians are noticing that and saying, Okay, well, they're not a thing. And this is, this is something that I assuming I really just like, wonder about, like, and I think that this is kind of like an example of how the polarization that we fought back against. I'm fascinated by all these politicians who like, just very clearly, like wake up like every single day, and are like, what's polarized things? Like even more? Right. So

Lars Doucet 54:26

there's like, let's just double down to make everyone mad.

Marshall 54:29

Yeah. Like, yeah, like this is this is the funny so Marjorie Taylor Greene or Lauren, right. Yeah, I'm picking on the right here. But I think there are two very prominent examples of this. And I think there are structural reasons why this has been more of a right issue than the left issue, like ultimately because the right is like anti government like incentivizes like Democrats have their own problems, but this is their version. I have never understood why somebody doesn't turn like Lauren Bobo. And so dude, like, she was just like, stop, stop. Like, it's like, the country like sucks right now. Yeah. So Ron feels like the country sucks right now. I don't get the sense that you're waking up every day and trying to fix those things. You're basically saying yourself like, hey, how do I get more retweets by making a certain group of people more pissed off? Like that is literally all they are doing. And I don't understand. And this is why like, my dream, my dream Pete Buttigieg is right if I were right, Liz Smith in advising I'd say dude, like what you should be doing right now is beyond that boat with Ryan Peterson. Yep. And then when Lauren boba is annoying, say, Dude, cute. Just not. Yes. I'm here fixing stuff. Yes. Afterwards, exhausted by this, I kind of call this I tell this to my fiance. I was like, it's kind of like muscular norm ism. It's kind of like the whole like, why can't we get along with the Washington vote? It's not like that lame. might kind of like exactly. I mean, David McCullough just like passed away. And I think it speaks to this very, like, Tom broke on the grid. It's like, taking that notion but booed putting it like muscularly. It's like, exactly, why would anyone want any of these people to be in charge of anything? These polarisers like these? Like, that's all they're doing? It's like do to start your podcast? Public funds, grow your Twitter brands, me and Mike and this can happen left or right. Right, it could be a right of center vision. Right? Because like, Kevin McCarthy, they don't like they don't like, they don't like MJ T, ng t either. And JT either. So it's just sort of like, why can't you just say, if you're a successful American politician today, like, my coalition is, this country is broken. We're gonna fix it. If you're in, we could have different solutions. Exactly, exactly fixed. But if you're not on the train, like Get the eff off, right. But I think that is what like, that is what the basic point would be like, it's, it's like, because think about this, think of the world where you grew up in, like, if you told 1990s us like, age yourself up? Yes. You know, there's gonna be a world where with like, all the wonders of Amazon, and all those things might be possible. Like, you might not get goods that you ordered for Christmas. Yeah, I ordered furniture. It takes months to get things. But that is the that's crazy. Like, that's actually again, if you actually sit down and think about that for a second, like, that's insane. messed up. Our political project should be making that like not a thing. Exactly. And anyone who isn't on board that go off to the side. So that's, that's my real like, I genuinely have not had a convincing. And this is why I love being in tech, because I think tech gets this. Yeah. But then the whole like, oh, there's a gap between tech and crochet. I think it's not helpful. Yeah. But the weird world we're in right now is that oh, actually, this is helpful. The verb we're in right now is tech is living in this future. Yeah. And I think it's very honest, on a couple of different things. Tech is talking about supply chains, candidates talking about dynamism. Things don't work, because China Tech was right on COVID At the start, but they're also terrible living in the present world, right. So I'm sure you guys may have noticed this notices on Twitter, but they're all these like tech founder VC types. For the past year have been like tweeting out some of the most like, right wing, Red Pill stuff, and then the dhabas decision comes out like overturn Roe v. Wade. And then the you're like, oh, my gosh, what happened? Like, are you serious? Yes. Like, there was just announced that, you know, David Sacks and Keith were hosting a major fundraiser for Republicans in Miami. We're like, oh, my gosh. Yeah. Like,

do you think the red pill? And I'm not saying what was good, like abortion is like a serious like weighty issue. But that's like my frustration with tech, where it's like, you were so focused on the fact that like, once again, like I think, I think Keith and David are great at talking about like, what are these, like IRL problems in America right now with texting, like to do a better job on exactly. But people in tech also aren't good at saying like, okay, cool, like, but what is what do they think of like the current issues of today? So I think a my dream world would be a world where like, you could merge like text ability to diagnose specific problems in America, that kind of thing. Tech and venture are good at giving you a skill set, but too often, tech looks at this current system, that gerontocracy Whatever ends basically treats it like legacy hardware, and wants to just like, wish it away, right? And like wish that this is their version of the entry and trap where they're like, man, like, these parties suck, and they just like, wish them away. And basically just like, just think about them. If you if you're if you're if you're pitching a VC, you would not do it that way. But that's not actually an optimal way for navigating a system. It's like

Lars Doucet 59:34

like crypto like grappling with regulation coming down the pipe hard and fast, you know, but that will take us off topic real quick. So one thing I want to talk about that I think segues into is pretty well is this notion of cost disease, socialism. And when I say that those for the audience like I'm not necessarily like trying to like make a capitalism socialism point. It's a very specific phenomenon. And this ties into student loan, the student loan debate and things and And so like, I believe cost disease socialism specifically applies to when you restrict supply of something but also subsidize it. And econ 101 tells you that sends the price right up. And so like, no Smith's talked about it, I don't think he invented the term but he like has written about it. And so this is basically like a kind of like, It's alleged that this is like a worst of all policy intervention, because you don't get any more of the stuff like the goal is to get abundance, but instead, we just make the price higher. And I think that's basically Sagar his entire point on your pod on breaking points. And maybe he's brought it up on the realignment. I was wondering what your thoughts on the theory of causes leaves socialism are, and also specifically about whether that's actually what's happening now with certain of our policies and in medicine, and housing and higher education and things like that, like all these issues that like people really care about?

Marshall 1:00:54

Yeah, I think that's a great way to put it, I'd say, you know, focusing on higher ed specifically, that's the issue I'm most most focused on. I think it fits with conversation we were having earlier about, like, issues and like addressing things, you see the cost, disease socialism thing happening in the sense that like, all we seem to know how to do is subsidize things, right. So all we know how to do, looking at the higher ed system, which everyone agrees that doesn't work, or isn't optimized. All we know how to do, we don't really know how to do two things. Sorry. We know how to subsidize things. We also know how to unhelpfully, unsubsidized things. So like, for example, an example with the unhelpful is like, after, you know, the 2008 financial crisis, like states, like severely cut aid to public universities, which like, obviously, like, led to putting that on students and athletics and other different things. And like, we could obviously have a debate in our society, like, what is a public good? Like, what should the university system look like? Like the University of California was not only super cheap, because like inflation was lower of education cost? Because the state of California was like, oh, no, we think it is a good thing for our state to do that. Yeah, he will take a different perspective on that thing. But that's what like, the unhealthy version is. Yeah. And then when it comes to subsidized, so I think that's the Republican version of this Republican version is higher ed sucks. So like, what's just like, unhelpful, we cut funding Exactly. Without like tying that to something specific. Exactly. Then the democratic version, that's where like the left version, or the socialism comes in, honestly, is okay. So we see this cost is very high, we see people have always problems, let's subsidize via increasing Pell Grants. Right. And this is one of the big disasters where if we increase the size of the Pell Grant, a Pell Grant is like aid for people who need it. But then like the inflation of costs over a 10 year period, like literally ate up the aid up the amount of right, the increase, or we're just stuck again, maybe you can help the first year where then it's Rebecca, and an orbit whereby blankets to loan forgiveness, or just by like, overly generous, like loan policies. So in my version of American, I think once I think this is what is going to be selected for, because this is because once again, what's funny is, I can have this conversation with anybody who's not captive to the incentives of like the status quo, where you would say to yourself, like, look, the issue right now isn't really like, do we like extend the student loan pause, the actual issue is that our higher education system is like super broken, and part of what may get us out of that would be okay, let's make sure that we reform the system. And then we should probably like forgive loans, people who got screwed by the previous system. So this is this one of my favorite, because I think student loans are like the most fascinating topic ever. It's, it's so it's so interesting, because what's thinking about this mic rhetorical bed people just take which is basically like, we shouldn't be, you know, we shouldn't let people take out loans for like underwater basket weaving or poli sci and like, the government just says, We'll give you a loan for anything, we just do it. But dig beneath that for a second. And I talked about this on today's episode of the realignment. What operationally happens is we get into a society where only upper middle class kids like me could get pulled poli sci degrees, right. And if we actually talk this out, we actually don't want to live in an America where if you're lower middle class or poor or working class or middle middle class, you have to get like a STEM degree. Now like the artsy fartsy liberal arts degrees for people like me, that's you operation we are saying when you're saying we shouldn't just have some other underwriting or basket weaving. So a way to have that conversation is okay, should states furnish more funds for education that that's what you get, you could say, you can say like, Hey, like in Oregon's because when he was in Oregon, we don't want to live in a state where, where you can't work. We're only rich kids get to do fun degrees. I want to say fun. But we don't want to live in a state where like, stem it also happens when people talk about apprenticeships. It gets like it. My number one right point of frustration. There's one like and this is a this is a polarizing whereby we say when privileged people like me say why don't we ever know for free internships. And it's like, I'm gonna be honest, like, my kids are probably not going to have apprenticeships, right. Like they're not gonna they're not going to do it. And I'd be honest, if I was like, man, like, Come on, dude, like, I'm just gonna be the podcast, buddy would have gone. Why don't you go full ride? Like why

Lars Doucet 1:05:16

you need to put in 40 hours of podcasting before we can move a journeyman podcaster?

Marshall 1:05:21

Yeah, that's the that's that's the that's the take there. So it's like, that's the underlying system I could we could talk about what do we want to actually look like, and then forgiveness, the degree to free subsidize could be the endpoint of that, because people are gonna get someone's gonna get hurt, someone's going to suffer. And that's mostly what coalition politics looks like. So like the system once again, this is why we're talking about what are we selecting for what sucks about right now is we're selecting for people who either do nothing, which is basically if you're a Republican Congress, you're interested in like just dunking on higher ed and how it sucks. Or you're saying unhelpful things like what's like, I hate this talking point to where you're like, the endowments are so big, let's take the endowment money. Because a like to talk about this point, when people talk about big endowments, they're talking about Harvard, all the things are LPs, a, like Harvard actually spends a decent amount of money on students. So like, if you if you are making if your payments less than 80k, you will probably go to Harvard or Yale for very little money, because it's subsidized by the endowment. Right? Harvard and Yale are not the cost of like, are not the cause what we're going through right now. And I also think it's so funny that like, on the one hand, Republicans who are anti white wealth tax, anti white, one time wealth taxes on on on Jeff Bezos, because they would be unfair, which they would that would be just unfair to say, like, you know what, like, I'm just gonna wake up and be like, You know what, like, we're just gonna take your money, like after the fact, this is the same exact principle. And it's just bad. And it's also wouldn't it? It's also a one time tax. So right, wouldn't wouldn't want something but then left version is, to your point is, okay, we know this thing is too expensive. What's gift people? What about doing it. So I want a politics where we like, start from, wait, this doesn't work, let's work to make it work. And part of what makes it work is how to deal with people who are screwed by the previous system.

Lars Doucet 1:07:14

So here's an interesting thought. So like, one of the pills I've taken recently is the Norwegian Resource Management pill. So I'm a Norwegian citizen. So I'm a little biased here, because I'm standing for, for the home team. But I read this research article this year, which like really opened my eyes because like Norway, has this famous sovereign wealth fund and oil. And I read recently about it. And what surprised me is that it was not set up by Norwegians, or not entirely the kind of the person who spearheaded it was a well, he's a Norwegian. Now he's an Iraqi immigrant. And he was just dicking around for a petroleum job. He's like, You guys need any Petroleum Engineers. He's like, we just discovered an F ton of oil. We have no local industry, what should we do with it, and he's like, I've seen this before. I've seen the resource curse. And he had this really interesting insight. And apparently, the people, the Norwegians, who set up the hydro power management industry 50 years earlier, had the same insight. So they both had the same solution. And it really dovetails with costs disease socialism, which is this notion that when you artificially restrict access to a resource, either through it's just naturally restricted because it's scarce, or it's artificially restricted to politics. A good example in America would be my narcolepsy medicine. It's a simultaneously scheduled and scheduled three drugs. So the government is wisdom is granted monopoly to one company. So when you create those artificial restrictions or natural restrictions, you get what we call a resource rent a over abundant super profit, because nobody can naturally compete with you or competition is constrained. And Norway solution to this is not like like American socialists like love to talk to me about Norway all the time, and how it's perfect, knowing very little actually about Norway. And so no real solution is to tax the resource rent, at like a really punitive level, because it's basically just an ongoing windfall profit, but leave a normal amount of profit if you were actually working for a living company. But then, you know, you have the Brian Kaplan's of the universe that come in, it's like, well, this is going to discourage innovation and research and exploration, you know, because like the companies are going to wind that. It's like, oh, there's so much r&d, and it's so expensive. And so the Norwegians will subsidize the r&d in the exploration of oil, but they will tax like punitively the oil that comes out of the pipe, because, so that you don't have people just like sitting on the wells. And you know, and this is me just giving, you know, region, propaganda here is that it seems like over the past 50 years, it's really worked. It seems like an kind of industrial management policy that can kind of be abstracted away to other issues of scarcity, that like instead of subsidizing the wrong thing, and taxing the wrong thing, you tax the right thing and you subsidize the right thing. And you can kind of actually get abundance and competence and not set the ocean on fire like other national oil companies, sometimes Do I was wondering if you'd heard this approach before? Or what you what you think of it, you know, I mean, feel free to push back and tell me it's nonsense. You know, it's just it's just like taken over my mind lately.

Marshall 1:10:10

Yeah, and I've never, I've never heard of it. I think it's an interesting idea I've, when I think about my, here's something like this is just like, my immediate reaction is just sort of like man, like it's not useful, unhelpfully comparing countries to one another. Because you just gave this whole, like, complicated history of how it could have this thing. And it's like, very unproductive just to look at Norway and say, Oh, we should be like that you kind of see this in like the gun debate. But when it comes to, I remember, when we just said what number to take away, we've just basically we like this idea of like, subsidizing the right things, to subsidizing research, resources, those different bits. I also just struggle with the fact that it doesn't seem like we're going to have in subsequent decades, the equivalent of we discover oil, right. And that's like the, that's the interesting question. And the other interesting question, too, is if we did, would we have the foresight to go the Norwegian direction? Or we're just status quo happen? Well, so like, for example, like Why Why does you don't know this? But like, I don't know that either. Like, why does like Alaska, give like Alaska is like a portion of like the whale profits. Versus like, maybe like Texas or other resource rich places. So I'm like,

Lars Doucet 1:11:17

we do actually we do have a it's a tiny crappy version of the Alaska one. I think it like funds, teachers and stuff. It like is actually like, paid out. If you mean Texans. Yeah. To just got here. So I have no idea. Yeah, Texas has like a crappy miniature version of like the Alaska fund, like some of our oil dollars, like goes to pay some future systems? I don't know a lot about it. All I know is it exists, and it's not as good as Alaska is.

Marshall 1:11:38

Yeah. So that's the real question is like, what? How does the society respond to like, opportunity and abundance? And I think the pessimistic take is, I don't see this as being a moment where we have to respond to the great hydrocarbon boom, in quite the same way. Right.

Will Jarvis 1:11:51

Marshall, one more question here. Oh, what did the next 50 years look like for you? And how do you see your role in American politics evolving over time?

Marshall 1:12:00

So it's funny, the I was just talking about this in private, but I was just like, we got to articulate, articulate in terms of politics. So listeners, and to your podcasts into my podcast will notice that like, I'm very like bitter and annoyed towards politicians. And that's because of the fact that like, I'm like a reformed politician, kid. Gotcha. So what I mean by that is like, by just so cringe by email address in high school was Kozloff. 2020. Yeah. Obviously, I was gonna run for Congress back in Oregon. Yeah. 2020. And I genuinely, you know, a couple of things happened with 20 times maybe not want to do that. Yeah. So I look at these conversations, and these people through the lens of like, oh, like, I wanted to be them. Right. I wanted to say like, how a 2020 like Congressman Marshall, like respond to these things. So what really happened, this was like a really just like, humbling moment is I woke up one day, I was like, Oh, wow, like, if you were a congressman, you would probably not be doing any of a better job than AOC. Because if I were a congressman, and this is leading to your question, if I were a congressman, that would have meant that I would have stayed in Oregon, rather than going to DC most likely, I would have stayed like in like Lake Oswego, or like the Portland metro area, I would have like worked for a state legislator that would have like, worked my way up, like the greasy pole get elected, and then do this do these different things. But the thing is, I would just be a useless politician. Because think I want to think about what I think my actual useful insights are, right? The supply chain as you start, yeah, but China stuff, the defense of the tech stuff, I wouldn't have experienced any of these things. Right. I would have just been once again, not captive to the system, or white Democratic Party, but to the incentives or to the like unmolded models right? So I never think of myself as okay so like you're someone who could look at this environment as like a as a reformed politician type, which gives you unique insight because to be able to actually kind of frustrates me when you see it's kind of like when I'm when I'm when I'm talking to people who are talking about like reform, and why it doesn't happen. I'm like, to often outsider populist, like, decentralized critics, they just don't get it because they're oftentimes the people. So I got always getting this huge fight with like, mostly, like, kind of like leftists about like money in politics. So like, I was talking to Kyle Kolinsky, who's like crystal ball sagas, co hosts, co host. Also fiance, so these things stack. It's not just CNN that has a side note. But we were talking in Kyle was talking about he was saying, quote, you know, like the only reason why Republicans like don't favor universal health care is because lobby health care law was giving them money under the table. Yeah. That's just like not true. And here's the way to run this experiment. And the way to run this experiment is if you weren't too bad at Some Cawthorne and we're like, hey, Madison Cawthorn that's what I'm gonna give you like a donation if you were to come out and favorite, universal health care, or hey, you go to you go to what say like Josh, always, Hey, Josh Harley, you're very pro First Amendment, the Bloomberg lobby to give you a bunch of money, and you're gonna be in, you're gonna know that because no one's gonna say, oh, alternative type. I actually know how politician types think. If you are in this political game, obviously, there's the side conversation about like stocks. But politicians, the more polarizing the issue, the less likely they are to actually think about money, right? The funny thing here is that the more to the side and issues, the more likely there has to be a corruption issue. So like what say it's like a weird, like, pharmaceutical Bill carve out as a toward regulation. That's an interesting conversation. And I'd be curious, like, where that Senator person's chief of staff goes, after that bill passes? I'd be very interested, that person became a lobbyist afterwards, yes. But when it comes to the polarizing issues, money does not dictate it. But genuinely. So what I'm trying to do as a podcaster, is I want people to learn and understand that. So they can't see the system as it actually isn't. Understand the actual Michael Bloomberg, it's been $10 billion. And it would not convince a single Republican member to say, you know, what, actually, there are too many guns in this country. Because once again, they're not responding to money, they're responding to actual opinions and actual people hold on those different bits. So speaking to my role, then I just want to keep talking to people. I think it's like super cool that, you know, we can like meet each other like on Twitter. Yeah. And just talk and this will get out there. And I'm just not, I didn't make a decision. It's kind of what I have this experience a couple times where I could be.

This is gonna sound very arrogant about just plow. It's, we're deep. So podcast, I could be much bigger than I am very quickly. And by that, I mean, I know what episodes do you see?

Will Jarvis 1:17:07

Is that like, leaning into the culture war? Or like,

Marshall 1:17:09

not even that? It's not even culture war. It's just like a certain style podcast, right? You just

Lars Doucet 1:17:12

wanted to min max it, you know, just yeah, just like the next book, I

Marshall 1:17:17

need to get the natural number of advertiser dollars. Or downloads. Yeah, I know how to get the realignment to like 125,000. Yeah, like listeners, just like that. Yeah, I've done that. Because like, for example, like Peter Zion did a Peters I had episode 250,000 views on YouTube popped. Yeah. Popped when we, whenever if, like Eric Weinstein, on pops. Yeah, I think those are valuable conversations. But I think what I'm more interested in is growing slowly. And honestly, feeding people their vegetables sometimes. So look, I want to I want to do an episode, I'm doing an episode at some point in the next few months on like, aircraft carriers. Because like, I actually think like, all I think about as like time is Taiwan, and the China crisis and all those different bits. And I keep thinking, like, man, like, I wish I could have gone back and studied Ukraine and Russia and modern war back in 2017 2018. But I did to be aware, I think people have that opportunity right now with like the Asia Pacific, you know, naval power in those different bits. I wanted to be a podcast where someone is sort of like, Oh, that's right. We were useful when like, the wind for me, really was okay, cool. I did this episode of bridge Colby during my daily Ukraine series. He's like a defense policy guy. A bunch of people were messaging me. They're like, hey, like, we're passing this right. This is getting passed around Senate office. Because it's just good. It's just like, helpful. And like, that sounds good. That's like January, we're gonna walk as part of what I did my wife put away my politician Marshall. Yes. Let's say yourself, like, okay. It feels really quick. I get noticed when I go places. That's really cool. But, and I think this is to my credit, yes. I was able to, like take that feeling. And say, okay, that's cute. But that's cool. Yes. But that's not what I was. Thinking. And guess what, like, I'll get there in like, 10 years. The question I think too many creators in our cohort are not answering this question the right way. Because there are so many people who are getting so big and so hyped and like, I was sort of like, there's just no, they're there. And you could say what you want to like the old system. You could say that Kara Swisher is just like, not with no people tech don't like caricature. When Kara Swisher was my age, she was writing two very good books about Amazon, and the 1990s. And she actually knew what she was talking for. And what frustrates me is this current moment selects for people who are good at getting very big. And I basically hold the position much as I say that the set of politicians who are going to like really succeed and get us out of this are keeping their heads down, and are basically not a part of the system. But actually, the defining like media personalities right now are not like optimizing themselves for going viral and Tiktok. Gotcha, because I actually think that Tiktok is selecting for a specific skill. assets that are going to return for long term value.

Lars Doucet 1:20:01

My thought our game is that the whole like AOC, optimizing her Instagram and optimizing getting things done kind of thing.

Marshall 1:20:07

Yeah, it's basically good. That's a good way to put it. I would my advice for politicians, craters, like whatever tech founders is like, hey, like, really take a step back. Be arrogant. I'm arrogant, like that's the nature of these databases. Assume that, like, you're going to be successful in some way. I've always assumed to be successful in some way. The real question to ask yourself is how are you going to get there? Yes. And what are you trying to do with that? Um, if I did a like buzzy, like podcast that got a lot of views, but wasn't passed around seven offices, during complicated moments, that would have like, no actual purpose for me, right? Because I just know given the growth of the podcast in 10 years, I'll be good enough right like Brent syrup. Malcolm Gladwell. 10,000 Hour Rule thing exactly, that we'll be able to do both. But that's what I want to do. Like I want to be the ideal and say for me is I can be maximally famous, but maximal we competent? The more that means I'll be like, 3738 Yeah. And people should ask themselves that because I could because it's just sort of a it's so weird. Like, you were just like notice like, it's like no one like all these people and this isn't the right Duncan website with all the like watching people flit from thing to thing. Optimizing. It's it's brutal, it's lame, and it doesn't work. Watch people like not do it. I'm not gonna name names, but it's like very there. If you're watching. I saw people go from like, I'm crater economy person. And I'm Metaverse person. Yeah, person. And now I'm climate tech person. And it's literally the lamest thing ever. And what people don't realize is, this is why the world is so weird, right? Not only are they not catching on when it comes to like the clicks and the views, but people in the know also notice this too. Great point. everyone notices this thing guy? Yeah, this Yeah, this is like the tech version, like People to People are always a current thing. Crane and COVID. Yeah, there's a tech version of the current thing, which is that and the other the other problem here too, is that like, I think a huge problem the industry is that people will talk what's was talked about let's go there for a second. There's a the the biggest Red Bull. This is my biggest red pill. I felt so self conscious about my lack of like Twitter. I don't tweet. Yeah. But um, are we lucky in that, like soccer has a big Twitter so I have 17,000 followers. Yeah, but that's just the soccer reach. So I have the I have the perfect but if I DM you, you will respond. I got a blue check. I would just be like, Yeah, but like, I was so self conscious about my lack of Twitter presence. So I discovered that so many people in industry, have other people read the tweets for them. Really? Oh, yeah. Like and that's that that helped me chill out. It's like, okay. Experienced but one day I was like, man, like, how are these people who worked on tech in their 20s and 30s? Comp Sci degrees? How are they so fluid? All these topics? Every writers they have nuance, because they're because they're very well paid 23 year olds are doing that for them

Lars Doucet 1:23:17

on hustle departments. Yeah, I've discovered this in like, previously in video games that that's like how's everyone like doing all this marketing all the time? Oh, they just pay people to do that. Just

Will Jarvis 1:23:25

pay somebody to do

Marshall 1:23:26

that. So like that's, that's just like the real I want. And what sucks is so many people Home Plus, they're talking crap about everyone here is obviously smart. Right? Exactly. No one. No one who I'm actually mentioning here is some of them like anything. That's super Tiktok people. Actually, you know, the person who's like most who's who's threaded the needle. I will speak for Kyla Scanlon. Kyla is the only person who's mastered how do I get big on a platform we're also being super super deep. And that is the cause but that's also because like Kyla is also like a three sport athlete. She podcasts she does YouTube, she writes and she does tick tock so like that's an example of someone who's able to hit it with water in it so she's like super hard worker, but also like them like I'm just like ranting now so stop me but like my other my other frustration with like, the hustle stuff is too much of like hustle. For people. This isn't like the usual hustle culture critique the puny human like to find hustle as like just pumping stuff out. Like how do I write the perfect tweet federal How do I like clip this episode? Not just sort of like, for me? I read three to four books a week. Yes, but that's my version of like hustle right now. You know, if I wasn't doing that, I also wasn't tweeting that real badly. But like I really think like, the 2020s for me like this isn't an extra two years was just like, just get good at something just get good at something. Get a salary and just don't care about the views like exactly the fact that I can make like a you know, multi six figure salary just talking to people is like That's insane. Have you ever read the old the old media world like it was? You read all these people? They worked so hard? They didn't make any money? Exactly like no one read them just sort of just just be okay with that. Yeah. And just understand that, like, people knowing you and the retweets, the dopamine hit doesn't last very long.

Will Jarvis 1:25:15

Exactly. Yeah, it's a longer, much longer game. So can we ever expect a senator or anything like that? What do you think?

Marshall 1:25:23

No, I'm obviously, no, no, here's, here's what I put. Because I hate when people can fake the fake answer on this. If I have something to say, yes. And I can add value I will run for office. Gotcha. Let's get but the my real critique of Kozloff 20 twenty@yahoo.com. Marshall, is he on a fundamental level had nothing to say. Right. Nothing to add. And that's what I'm opposed to be able to avoid that. Like, like, if like, like, seriously, like, if there's like, if there's like a moment where there's an issue, but I know something about, oh, this is good. This is where like, I think we'll end it. Like, my favorite. The quote that I'm obsessed with right now is like, you know, Winston Churchill during during the Blitz with he's talking to us on Randolph Churchill. And he goes, like, I find I see a way through a way through that's like things are their absolute worst. Yeah, it's a disaster. He's like a COA through and his answer was like, the US will get involved in the war. That's how we're going to do it. There's no and that was the way through. I have to see your way through to get involved in politics, and I'll do it. But and this applies to everybody. Yeah. Think of like, what is your way through? Write in any category that you're doing? Yeah. You want to be a web three poster? You know what, like, that could work for you. Good. But actually, I would push to I actually have something to say, or am I just like taking the content of the top 1% of people? Am I just say taking Gaby Goldberg's reading list. And by turning in my tweet form, yes. That's not a way through, though. So don't do it.

Will Jarvis 1:26:55

I love it. I really love that. Well, Marshall, thank you so much for coming on. Where can people find the realignment? Where should we send them?

Marshall 1:27:01

Yeah, so a couple different things. So the realignment so we're available wherever you listen, your podcast, Spotify, Apple, all those good things. Were also on YouTube. I started to focus more on YouTube. Oh, man, YouTube. We're extending here but YouTube. YouTube's YouTube scary because YouTube does an actual algorithm.

Will Jarvis 1:27:18

Yes. That is much easier than like the audio itself. I found. Yeah, it's

Marshall 1:27:23

I want to say it's much it's so much harder. Yeah. Because affair. It's easier to like yes, it's a trade off. It's the entrepreneur the key words all these things matter. So like, I've started to take it more seriously, so people should check out the YouTube. But yeah, that's the next that's the next can of worms. Yeah, the realignment all those other good thing for most of us. Thanks for having me on the show.

Will Jarvis 1:27:45

Absolutely. Appreciate it Marshall. Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries and organizations and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:37

Well, Jeffrey, how are you doing this afternoon?

Jeffrey Ladish 0:40

I'm doing pretty good. I just got back from DEF CON. So a little a little tired, a little excited a little everywhere. But feeling great.

Will Jarvis 0:47

Good stuff. Good stuff. Well, thanks so much for taking the time today after DEF CON to to come on the show. Jeffrey, do you mind giving a brief bio and some of the big ideas you're interested in? Yeah.

Jeffrey Ladish 1:00

Well, I've been thinking a lot about what's going to happen in the future. So a lot of my work and thinking has been pretty focused on that question. And some of this is like just the existential risk question of like, are we gonna make it? And if not, what, like what could possibly sort of knock us off course. And so yeah, really, since college, I studied evolutionary biology in college, I was thinking about, like, how species go extinct? And like, Oh, yeah. Could that happen to us again, probably. But like what, you know, we're pretty weird and unusual species. So it's like, you know, if we were to go extinct, it's interesting question, like, what might cause that, and it seems like the most likely thing that would cause that is not like an asteroid strike or some external thing, but rather something that we cause ourselves, just because we have, we're so powerful. And like, it's actually pretty interesting, because I feel like, yeah, like people are very, very worried about climate change. And like, climate change is quite worrying a lot of respects. But like the same thing that makes climate change, scary, which is that we can, like have these huge effects on the environment also makes us as a species pretty safe from climate change, like because it's like, yeah, it's going to change things like sea levels can rise. You know, things can get really hot, weather can change all around agricultural shifts can happen. But like, all of these things have happened in human history before. And like humanity survived. And that was like, at Tech levels that were like way below our own. So we're actually like, extremely robust in a way it's really cool. So even though we can like totally mess things up a lot, we can also survive a lot of things. So yeah, like, a lot of I think this is actually sort of the the, like, high level of a lot of my thinking was like, going through each, like big risk category, and then trying to figure out like, Oh, could we could we survive this? Could we not survive this? And so it's like climate change. Yeah, we can probably survive it like nuclear war. Well, that one's like a little tougher, because like, nukes are really powerful. I just got back. So when I was in Las Vegas for DEF CON, I visited the National atomic testing Museum. Oh, nice. It's amazing. Yeah. And, you know, it sort of started starting with Trinity, all the way up through all the way up to like the atmospheric testing ban. They moved everything underground, they started doing underground testing. He was it was Bravo, which is like the biggest nuclear test. This is like in the Pacific, where they tested a five they what they thought was gonna be a five megaton bomb turned out to be a 14 megaton bomb because they had like, miscalculated how a certain isotope would respond. I think that is like such a huge difference. Yeah, so. So we're like, we're, you know, nukes are just like such a powerful, powerful technology. And, you know, people have hypothesized about different big effects, the radiological effects, and, you know, and the climate effects, you know, you could potentially get a nuclear winter that could cause significant cooling. So I spent a few years looking at this question, not like, mostly just looking at the existing literature, trying to think of it from first principles, talk to people who have done research in this space. And I think I have a pretty like wide, like distribution of probabilities really how bad it could be. But I think even in the pretty, like, near worst case scenarios, we're still pretty likely to survive. So don't get me wrong. Nuclear war would be devastating could really set civilization back for a while. But I think even in the pretty bad cases, we're just, we're just so we're just like, so good at surviving. Like we're really smart. And we have lots of like, there's lots of different knowledge distributed in lots of different places in the world. And so even It takes hundreds of years, like on an evolutionary timescale, that's not a lot of time. So good news. recoverable, recoverable. Yeah, totally. And then yeah, and then more recently, I looked at this a lot with like biotechnology risks and biotechnology, which is where I think you start to get into the realm of like, oh, there might be some things we could do that we wouldn't survive. And then more recently, still like looking at artificial intelligence. And, yeah, once you start to have like adversarial pressure that tries to prevent you From surviving, that's where it gets really, really dangerous. Because it's like, if it's the environment, changing the environment isn't optimizing to prevent you from existing. But if you have, you know, if you have a very intelligent agent that has that is like, misaligned, then then you're have you start to have real problems, especially if it's smart, smarter than you more capable than you. Like if we want it to go like, yeah, humans are a great example of this where like, we have rats on islands, we don't want to have rats on like, we actually introduced them to the island. And like, we just wiped out whole giant rat populations off islands, because we didn't want them there. And we're like, oh, they like keep evading these poisons, let's use these other poisons. And so yeah, that's, that's not a situation you ever want to be in?

So, yeah, so I guess Yeah, I mean, this is this is a high level view, walking through sort of different different risks from different technologies, thinking about how they might affect us. But I don't know, I don't just think about ways in which we could all everything could fail. So in terms of mostly what I'm doing right now professionally, it's in the information security world, trying to prevent hackers from from hacking AI systems and sort of proliferating this technology. Also a bit of that in the biotech space, trying to keep, you know, sort of dangerous biotechnology contained. But I don't, I don't just think about that. I'm also really excited about what what the future could look like, like, the sort of the same, some of these technologies that are like, you know, present these really big risks also, present these really like amazing opportunities. And I think if you look at sort of, like where we are right now, in like, in terms of like, civilization and technology and society, things could be like, vastly, vastly better. I think people like totally don't get it in terms of how good things could be, like, like things are in my life, and like, my life's pretty good. But, you know, if I sort of flipped that coin, I'm like, Well, I am probably headed towards, like age related illness, even if I stay really, really healthy and like, do everything. totally right. You know, when I'm at 90 100, yeah, like, that's going to fail, all of my systems are going to fail, I might get dementia. And like my grandpa has have dementia right now. And it really sucks. Like, it's really sad. It's like super tragic. He's like loving, caring, smart people just like losing their ability to remember their own context. And it's super sad, they lose their autonomy, they lose their freedom. And so when people right now are like, that isn't so bad. I'm like, but like, you see people like decay and like, lose everything. And like, even if even if, like, everyone wanted to die, eventually, it's not how you want to go. So like, exactly. And like, you know, we have amazing technology here in United States where my grandparents live, and like, they're not they're not poor that they can afford medical interventions. And yet, that's still just nowhere close to enough, you know, doesn't matter if you're a billionaire. You still can get past 120. Like, no technology is going to save you kids. And so yeah, that's when I when I think about like where we are compared to where we could be. I'm like, Yeah, we're still really falling short. And that's like upside. But it's also really exciting. Because these these problems, like, are problems that could be solved with technology, like there's no, there's no fundamental reason that they can't be solved that way. So I'm like, great, well, let's let's solve them and survive along the way. And then they go, I love that elephant.

Will Jarvis 8:10

I want to talk about this bit, this big lever point, you've kind of mentioned here, which is definitely underrated in the mainstream, I would say it's this point that, okay. Ai, at one level, first thing, we should be very concerned about it because, you know, yeah, it could take our jobs, but maybe it kills us all first. And if one thing you said something really interesting, you rarely hear about rats, right? You know, and this, this made me think of your ever evolutionary biology background. And the thought that you know, hmm, you know, humans have been pretty good at making other species go extinct. Animals that are not as smart as we are, we're pretty good at making them go extinct. If we want to, there's cases have been cases of this. I'm curious is that the key thing we should be worried about with AI is that if a being that is smarter than us decides we're not worthwhile, or it's just like misaligned in some weird way, it could just come and just wipe us off the planet, hunt us down wherever we are. And there's really nothing we could do. Even if we're, you know, on Mars, it doesn't matter where we are. And this is the true X rays, because at some level, you know, it could not be recoverable. Almost all the other x rays are recoverable in some sense, you know, maybe we can go to Mars if there's severe asteroid impacts, or nuclear war or something like that. But at the end of the day, AI could be a scenario that's coming quickly, that could go so wrong, that we can't survive it.

Jeffrey Ladish 9:35

Yeah, you know, I think there's a lot of like, a lot of people talking about this space and thinking about this space. And so, you know, like, most of my ideas are, like, you know, just trying to gem mine the good ideas that have already been talked about and sort of like respond to like, delusion ideas. I think it's really like worth thinking about from first principles and like thinking about like, okay, like, well, if you have a really, really smart agent And you don't necessarily know like, exactly what kind of agent it is. Are there things that we can infer about, like what it might do? And I think it was like 100, who first came up with like, this idea of like basic AI drives, which is like, what, what might you expect? Some agents do. And you look at number of things, if you're trying to accomplish some goal. Well, like you don't want to be turned off or killed. Because like, you're not going to be able to accomplish your goal, if that's the case. And like, yeah, as it applies to humans to protect, you know, we don't like we've been very incentivized by evolution to survive and reproduce. So we're like, very generally don't want to die. But also like wanting to acquire resources, and generally improve yourself, improve your ability to get stuff done, out in the environment, humans are great at this. You know, we've like learned to really stockpile resources and build tools and like, now we have computers and all these things. So yeah, even though we don't know exactly what like how AI systems will think, or function, I think we can infer pretty well that like, and I think a lot of people point to current, like language models, where they like, look at language models, like GPT. Three, they're not, they don't seem like they have very clear goals, they don't seem very goal directed. And I'm like, Yeah, that's kind of true. But like, they're also not that useful. Like, they're kind of useful. They're, they're like, they're kind of useful for like generating cool stories and like, for you know, but if you know, if you imagine, you know, 510 20 years in the future, people disagree a lot about these timelines. But if you imagine projecting out a little bit, and like looking at people who are building more and more useful systems, I bet that the ones that are more useful are the ones that look more agent, like, like the ones that are better at planning better at achieving their goals, like, you know, if you were in charge of a big company, and you like have some AI that's assisting me with with planning, you know, you want the one that's good at it. So exactly. And so I think that you can expect these, you know, even though they might have weird quirks and whatever, you can expect AI systems to be pretty, you know, pretty rational in this way. Pretty smart. And so, you know, the, I think the key question is like, how hard is it to align their goals with ours? That's one question. And the other question is, how powerful are they? So if they're like, if they're like, a little bit more powerful than us, then there's an interesting question of like, oh, well, then, like, maybe, maybe we're like, useful, but maybe we're also a threat. So I could see, you know, humanity being wiped out, because we're actually a threat to these systems. And then if they're vastly more powerful than us, then well, we might be wiped out just as a side effect of them changing the environment. Like if there's absolutely no nothing we can do to interfere with the systems, then maybe we don't care whether we live, but I think there's like a Eliezer Yudkowsky quote, which is like, the ad doesn't, like love us or hate us. It's just like we're made of atoms that can be used for something else. Like, we're just material that can be like, repurposed. And we don't like to think of ourselves this way. But like, fundamentally, at the end of the day, we're like, made out of these particles. And like, we're on that we're on the planet, and we're shaping the planet. And like, if something else was shaping the planet, and then it makes it into something that's not very good for us like, well, we're not we're not gonna make it.

Yeah, and I think people have a really, really hard time imagining a system this powerful. And there's a lot of it's, I think, I think there's a lot of like, difficulty sort of imagining something that's like, way, way smarter than us. But I think that the question here, the question for me is like, how close are we to sort of the theoretical or practical feeling of intelligence? Like, and so, when I was when I was young, I hadn't thought about AI at all. I was imagining science fiction stories, and I was imagining, like, oh, man, like, what, like, how might the future go? And I was like, Oh, I bet we'll like genetically engineer ourselves to be smarter. Because like, well, people like, like, if we really value intelligence in our society, you can see that people who are really smart, often get really good jobs, and they can make really cool technology and whatever. Or just are like very politically savvy. So seems very desirable. We're, you know, we're, this is before CRISPR. But like, Yeah, whatever genetic engineering is clearly taking off, we're going to get that technology eventually. And I sort of imagined, I was like, 18. So I was like, imagining like Soul, like genius scientists that was like in the lab being like, Haha, I will make myself smarter and then like, and then you sort of have this like, runaway dynamic, right? Where like, the next, you know, the, you become smarter. So you can become even better at making yourself smarter and whatever, whatever. And, you know, maybe this takes multiple generations. And so like, each generation becomes smarter and can sort of reinvest in that. But I sort of imagined a like, runaway scenario where humans got smarter and smarter just via genetic engineering. Well, yeah, and since then, I know a lot more about genome selection. And there's actually a lot of really interesting research into like, how this is possible. And I think it is possible. Now, there's a lot of limitations in terms of the human brain and in terms of genetic engineering. But but like, I think my point my point is, is like you can you can imagine a scenario where humans become a lot more intelligent. I think it's useful to think like, what would society look like in that case? But then the interesting thing is when you look at AI systems, the things that sort of are limiting to us, like sort of, you know, how how like, fast neurons are and sort of how much can you can you can you scale things just are not present, like, you can just build a big, bigger datacenter, you can just like add more compute. And when you look at like the progression from like GPT, two to GPT, three, and then like all the newest models, and then yeah, that uses just like look at like what all these different companies are doing and adding more and more compute. Yeah, turns out, you can like add more data, you can add more compute, like, the systems probably can just keep scaling, keep scaling and keep scaling. And so like, when I look at that, my impression is that, like, the ceiling of intelligence is actually really, really, really high. And so if you, if you do get there, and I think we're probably well, you're probably looking at a really big power differential between everything humanity can do and everything these systems can do. And that's the point at which like, I think we should be scared, like, because like, you know, if an alien civilization arrived, and they were like, just 1000s, and 1000s times more powerful than us, and all the technology looks like magic, you know, people, I think people would be and should be terrified. It's like, maybe they're gonna be nice to us like that would be, I hope they're nice to us. But like, we're like completely at their mercy. And this scenario that we're setting ourselves up for us, for ourselves with AI is building systems that are 1000s, and 1000s, and 1000 times more powerful than whatever, I don't know what order of magnitude. And like, Yeah, that should be scary. Because that just just Yes, just because of the raw power differential, even if we know nothing else, it should be like, Oh, goodness. And I think a lot of people, like look at these arguments and are like, I just don't really buy things. And I'm like, That's great. Like, you know, God, just like don't take my word for it at all. But like, really think about, like, what are the cruxes? When it comes to, you know, maybe you think that it's impossible to build a system? That's powerful? Well, great. Like, why do you think that like, what are components? Maybe you think that, you know, as you add more compute, you'll get like, really strongly diminishing returns? Maybe that's the case, like, you know, and then make predictions. And then if your predictions, you know, if you think that that's the case, like maybe try to predict what AI systems won't be able to do. Because people are often like, yeah, system can't do this. And then you like next year, they can, and then people like, move the goalposts and they're like, Oh, well, maybe they can't make, you know, read texts that summarize it. Yeah, they can now so.

Will Jarvis 17:04

Exactly. And we keep we keep seeing these, these big advancements. I'm curious. You mentioned something interesting there. How much do you think like, you know, how far can we get just by scaling up language models? In the current paradigms? We have? Versus Do you think there will have to be radical, you know, breakthroughs in technology in AI research for these things to like, truly create beings that are, you know, have agency and are scary at some level? Does that make sense?

Jeffrey Ladish 17:34

Yeah, yeah, the very short answer is I don't know. And in terms of how I reason about it, like, you know, so I'm, I'm on the security team at anthropic does a lot of really smart people there. And you know, just I have a lot of other friends who are in this space who are doing sorcerers doing work here, you know, mostly really work on alignment, really trying to figure out how to align your systems and not how do we push these systems, you know, as a, you know, to be as capable as possible, but they do end up knowing a lot about that. And, you know, people disagree about this, I have some it's like really hard because I'm like, man, like I have, these are people that I think are really, I really respect I think their thinking is very sharp, and they have pretty different intuitions about what it will take. My intuition, which I don't really trust here, some intuitions I trust a lot, some intuitions, I don't trust that much. I don't trust this one that much. But my intuition is that it will take some other pieces, but I don't think those pieces will necessarily be super, super hard to find. Gotcha. The reason I think this is that, yeah, just looking, I've been really impressed with sort of the general intelligence of language models so far as just as you scale them up. So when I think when I saw GPT, two, I was like, this is really impressive. GPT three, I'm like, oh, whoa, this is starting to get coherent. And then, you know, as as GPT, three has gotten better, and other language models have gotten really better, I've really started to see this sort of like conceptual clarity emerge, and sort of, instead of having to like, ask, you know, try to prompt five different ways you just start try one thing, and you get a very coherent response. I've had, I've had dialogues with language models, where they explain nuclear reactors to me, and they, you know, I was like, I was trying to figure out like, Well, okay, you know, I'm very interested in the nuclear space. So I was, I wanted to know, like, how come more more states that have nuclear power, don't can't easily get nuclear weapons. I sort of thought I was like, you know, maybe maybe it's like your Japan and you want nuclear weapons in a year. That's just fine. In one year, you can just have nuclear weapons. Yeah. And I was and so one of the one of the questions here is like, Well, why can't you just take the nuclear reactors you have and use them to, like, make plutonium and then you can make bombs out of plutonium, the original atomic bomb. One of the two designs was a plutonium implosion. So you get the sodium, you make it into reactor, like great, that should work right. And so I was like, I was like asking the model this I was like, why doesn't this work? And the model is like, Oh, well, that's because you do get you can make use it. If you can use a normal nuclear reactor to make plutonium, but the plutonium will also have like one of the isotopes that you'll produce isn't isn't weapons grade. And so that will basically poison the reaction and it doesn't you can't use it to make weapons. So you'd have to like Central, you'd have to like separate out the isotopes, which is the original hard part, which in rhenium irritant to start with. So you just don't get that far. It's like, but if you use breeder reactors, then you can totally make weapons grade stuff. And I was like, Oh, well, like, are breeder reactors harder to make? And they're like, yeah, they're harder to make. They're, like, more complicated. And they're also, you know, discouraged. So nations don't build them as much. But I was like, you know, this, I'm just like, I don't mind that the model like actually understood the question, I think it like, actually understood these concepts. And it's hard to say, because we don't have good enough interpretability tools to really know what's what's going on. This is something I really, really hope we get, because as these systems become more powerful, we need to understand them. And I can see no way that they can be safe if we don't understand what's happening under the hood. And we certainly don't right now. So like shout out to Chris, all those work. interpretability we really need that. And any, you know, anyone else who's doing good work and interpretability I'm just very happy to see that field advance. But yeah, I mean, so I guess what I'm saying is I see those language models having that conceptual, it's like, it's as if I was having a conversation with you. Yeah, there are some important differences, you know, that model will not remember that conversation. If we, you know, if I have 20 More of those conversations, it won't remember the first one or whatever, there's, there's a very limited context window. So that's the difference between our conversation, that conversation. But other than that, it's like, it's not that different as if I were talking to you about about nuclear reactors. And to me, I'm just like, oh, we just already got a bunch of the core components of general intelligence. And it makes it so you know, there's the solving the like, sort of like planning and memory, and all this stuff might be really hard, it might take some big breakthroughs. But I also could imagine some, like cool hacks working. So I'm somewhat agnostic, I don't know. You know, it's hard to say, I hope it takes lots of conceptual breakthroughs, because that would mean we're further away. And that would be good. We really need a lot of time here. But I don't know.

Will Jarvis 22:02

Right? Now that I think that's, that's a great if you if you plot the line out from you know, GPT, two to GPT. Three, and you keep plopping that out. And just to kind of off into the future, like you can get really scared really fast that how good these things can be. Different. I'm curious, and this is this is kind of a weird question. But I want to tie together a couple of things you talked about, you know, the first nuclear bomb, the Manhattan Project. You know, whenever I think about when humans have had solved really difficult technical challenges in a really short amount of time, it has generally been because there is like some human enemy we're worried about at some level. So you know, if you think about the Manhattan Project, you think about the Apollo program, both of these were directed against some kind of foreign human like, entity, it's a while and people would work 80 hours a week, to really try and like defray these these threats at some level. My worry with like, more non human threats, when I think about COVID, or I think about, you know, like aI alignment is that it somehow it just seems like less charismatic in people's minds. And it's less, less vivid than if it's like a real human enemy. And so maybe that maybe people work less hard for real reasons, they're less likely to solve Collection Act and problems among themselves to like, solve these problems. Do you think that there's a real concern we should have about alignment? Is that Is it it's a nonhuman threat. And so perhaps at some level, it's just like less charismatic, and it's harder to get people excited about it to work on it and really put a lot of time in to try and solve these things.

Jeffrey Ladish 23:34

Yeah, I just straightforwardly agree with you that it's harder. It's harder because of this. Right. And I was, I was a little I was a bit disappointed. Yeah. With with the response to COVID. Yeah, and maybe this is naval. Yeah. But I was hoping, you know, I was, I remember, it's, I helped organize biosecurity conference catalyst in San Francisco for February 20, in February 2020. And we had it we like everyone met. And we're like, you know, if it had been a week later, we probably wouldn't have met in person. But we're there just before. So we're like, and we're talking about code, we're talking about transmission and sort of trying to estimate, you know, what my response look like? And some part of me was like, yeah, maybe the world won't rally, but I don't know, maybe, maybe the world will rally around this down. And, like, you know, I guess if I'm being charitable, we did do a really great job. And in some ways, you know, like, vaccine production, I thought was, you know, we made a ton of vaccines, we made them very quickly. You know, in terms of historical precedent, we maybe could have done better, but we did a bunch of things really well. But in terms of like, the vibe or something, or in terms of the cultural impact, it feels like the world just did not unite around this around this thing. And that's sad. So I'm like, Well, that should be like one point away from this, like, people will see the danger from AI and, you know, band together to sort of try to defeat this thing. And yeah, I think it is a bit of an uphill battle and that's like unfortunate. That being said, I know a lot of people who really see them see these risks and and the have like two years, I've seen tons of like tons of people who, you know, some of my smartest friends who previously, were not interested in this, just like being exposed to it and sort of hearing these arguments and finding them pretty compelling. And really engaging with them, and then sort of wanting to be like, Hey, can I work on this? And so, like, you know, on one hand, Yeah, seems pretty hard to motivate a sort of all of society to get behind this. On the other hand, I've seen lots of people very motivated to work on these things. And so I kind of hope that, you know, maybe a targeted approach could be really helpful here. Where, you know, we just we tried to find people who, you know, can work on this, do you find these arguments compelling? Sort of, do see the risk here, and then and then go from there? Like, maybe that's enough? Definitely.

Will Jarvis 25:47

I like that. Going off that there's another analog, I'm just I just love this, this analog with the Manhattan Project. In that year, the Manhattan Project was a very centralized effort, you know, his general groves, he goes in, he finds open Heimer. And, you know, no one wanted to hire Oppenheimer, because, you know, he was like a socialist and all these things, general groves like, no, he's the guy. And, you know, like lobbies for this. And you've got this classic kind of tool in the box management team. And they're going through, like, here in East Tennessee, and they're just like, you know, raising farms. And they're, you know, like, building all these, like all across the US is really impressive, like effort. Do you think at some level, the alignment community needs more coordination? I mean, it's a real challenge, because it's not the federal government doing it. They can't just like go and like, seize Google laptops. And you know, these defense production mandates, right to make these things happen. Yeah. But would we be better off if there's a little bit more, I guess, top down command control in the alignment committee? Or is it better to have like, more people just working on diverse things? Because we don't have a great plan yet?

Jeffrey Ladish 26:46

Yeah. So I think, how I would describe the field of AI alignment? Well, I've heard other people describe it as pre paradigmatic, which seems accurate to me, there's not a really established paradigm for like, here's the most promising approaches. Yeah, a lot of people are trying a lot of different stuff. And I think that that's probably the right thing to do right now. So people going out and trying stuff, and you know, really trying to like, build a strong research community that's like looking for good approaches. I think that's really valuable. So I don't think that, you know, I think I really want good discussion, and sort of good, like, intellectual interchange between different groups so that we can try to identify good strategies, I think that's super useful. When it comes to more on the deployment, or more on the sort of scaling side of things, for the companies that are working with big models, or are explicitly pursuing AGI. That's where I think coordination is really important. Yeah, there's a there's been a lot of like, debate on Twitter recently. About like, oh, like, is it like, good that people are pursuing AGI sort of really aggressively? And yeah, I think it's actually pretty dangerous. So my hope here, is that sort of the leaders of all of these AI labs will, yeah, work together. Because, like, we really all lose, if if we don't, you know, if we're not very careful. And I think the level of caution we use is pretty extreme. And I also think that the leaders of these orgs are not dumb. And I think that they, you know, like they have thought about these things. Like I saw Sam Altman, like retweet Eliezer, Yudkowsky is like, list of reasons for AGI ruin, which is this very intense list of like, here are all of these big problems that are not solved right now, that would really cause us to go extinct from Ai if we continue in the current direction. You know, and Sam Altman, which is leading open AI, which is like explicitly pursuing AGI is like, you know, I mean, I agree with everything was, it's super important. And I'm like, That's great. Like, I'm very happy to see that. And I'd be very happy to see, you know, the leaders of all of these orgs, you know, collaborate, and, you know, maybe, you know, figure out how to proceed in a very, you know, safe and hopefully pretty costly, hopefully, extremely cautious way. You know, I don't know what that would look like, um, but I don't think that that is, and I've talked to some people and they're like, that seems, you know, really hard. And like, it seems like kind of It seems hard, but it doesn't seem impossible. And I think if you look at like the cultures that these people come from, like, they're pretty similar, like, I think they have pretty similar goals, and they're trying to do similar things. And, you know, I could imagine a much more hostile like environment where people were, like, extremely competitive and racing really hard. And that's not the that's not the feeling I get when I talk to people, you know, and I have lots of friends in these other orgs. And that's not the feeling I get, like, people are actually, you know, really happy to talk to each other. And so I'm like, well, we should leverage that, to be able to have something that's more coordinated. I think everyone agrees that coordination is important. And it's I think that there's just some really, you know, I want to that's really practical things to happen. And so yeah, I I'd say, you know, the thing for people who are close to these circles is just to say, like, encourage that, you know, if you're taught, if you're hanging out with some of these people be like, yeah, hey, guys, what's the plan for collaboration here? Like? I'd really, this seems very important, and it seems very dangerous, it seems, you know. So like, how can we make sure that this is not being done unilaterally? I think just like, you know, putting some some friendly pressure, there is a good idea.

Will Jarvis 30:22

That's great. That's great. I think that's it's the right approach. And I do I do agree, I think these these people are generally friendly and willing to work together in a way that it's not not always common in the real world, which is, which is good and lends itself to collaboration. I want to talk a little bit about security in your work in context of AI. I'm curious, it seems to me that a lot of security, at this point has to do with actually solving human problems like like, what do humans do poorly? And how do you optimize around that? Am I all based on that? Is it primarily technical? Is it primarily humans? Is it kind of this crazy interplay between the two?

Jeffrey Ladish 31:00

Well, it's it's definitely a crazy interplay between the two. But no, you're totally right, that like some of the biggest, like, you know, some of the biggest challenges are human challenges. We sort of do know how to build secure systems, we sort of have all of you know, we've humanity broadly, you know, there are and there are lots of people who are just extremely good at like, making secure technology. But you do have a problem. As you get more and more complex, it becomes harder and harder to secure. That's, that's both technical complexity in terms of like, you know, how many things is your computer system doing? And there's also social complexity, how many users and developers and admins and all of these things do you have? So and social and then and then there's the social side of things, where it's like, you know, how, how, how easy do you want to do you want it to make it too, for people to use your system to access your systems access your systems at a privilege level, you know, it's very easy to make something secure, and then throw it in the ocean, no one can ever use it. It's not very useful. So you know, there's always there's all of these trade offs. So yeah, I mean, we can totally go into specific examples. But yeah, at the end of the day, you know, humans have to use these systems. And so there's going to be there's going to be I'm blanking on the word, but Yeah, but you're going to like have Attack, attack surface, if you're going to have a textbook for studies, those humans at DEF CON, there's a social engineering village, the main thing they do is they call it random people at random companies and they like they have they get different points for different pieces of information they can get those people to give them like these people shouldn't be giving them any information. You know, they are not working for their company. They're just random people at DEF CON. Yeah. And they go through and they're like, hey, yeah, could you tell me the serial number on your laptop? But you know, firstly, they they say, Hey, how you doing? Like, I'm calling from your IT department? And like, yeah, we're just like doing some troubleshooting. And we noticed, like, your system hasn't problems. And so yeah, give me the the serial number for your computer. Yeah.

Will Jarvis 32:53

I'm assuming most people give it to you.

Jeffrey Ladish 32:56

Yeah, the people are really good. Yeah. So the Yeah.

Will Jarvis 33:01

Have you think about coaching people? Like, what are the low hanging fruit in terms of making things more secure? You know, if you're trying to coach somebody, like you're talking to me, like, Hey, man, like, you really need to get your security on point. Right? You know, what's a big thing that that's that that's pretty easy intervention for people to kind of, I guess, implement their day to day live?

Jeffrey Ladish 33:21

So I think there's three really good obvious things that everyone can do. Which one do I want to start with? Well, yeah, one, keep your computers up to date. You know, the, like, software is vulnerable, or software, you know, that people have discovered vulnerabilities in software, and they exploit them. But generally, you know, people also report these the software vendors, Google, and whoever patched these vulnerabilities. And so like, you just need to keep your computer up to date. So, you know, if you're using Chrome in the top right, there might be a thing if it turns red. Or even if it turns yellow, or just says updates available, just like try to keep clicking that Keep it keep it updated. Same with your same with your operating system. Same with your phone, like use use use hardware that's fairly new. And that's not like that's still supported. So that's that's one thing. Like if things get sufficiently out of date, then you have problems. The next thing I'd say is use two factor authentication. So like, a lot of the way Yeah, I mean, yeah, so there's, there's number different types of two factor authentication. The sort of strongest form is like, use yubikeys. So like, basically, if you want to, like really lock down your stuff, you have really important accounts. I think people's social media accounts are often way more important than they think maybe maybe you already know this. But like, you know, if you sort of think it's just sort of run through the mental exercise in your head, if you got locked out of your Gmail, How bad would that be for you? If you never had access to your Gmail again, how much would you lose? Same with your Facebook, same with your LinkedIn, same with your Twitter, whatever, you know, whatever he is, and so for those important accounts in your bank, as well, you know, use strong two factor authentication. So I think there's two things to remember here I used to, I used to tell people just to like I just tell them how to do it. And then there was there's like a big flaw in this, which is that you also need to be able to access it. So it's not just important that you have two factor authentication, it's important that you always have a backup. So the thing I recommend to people is just get to yubikeys get to yubikeys. It's a little USB dongle, you plug into your computer, and then you tap. If you get two of them, you can leave one link with your passport somewhere secure, you keep the other one on your key ring, you should always have it with you. You don't need to actually use it that often. It's like maybe once a month or so you actually need to like reauthorize on an account. But this just makes it extremely hard for anyone to fish you to to hack you in any way. And then you have that backup. So you should always be able to get access. There's also like authenticator apps like Google Authenticator is pretty good. You can you could like, say, use one YubiKey or use Google Authenticator. The problem with Google Authenticator is if you lose your phone, now you just don't have if you only had used Google Authenticator, you lose your phone, now you just don't have your second factor. So it doesn't satisfy the backup property. You could use two phones, but you know, so it's a little tricky. And then there's some some, some websites only allow SMS based two factor. So you get a text message. This is not good. Because SMS is very insecure, people can hack your phone, whatever, are not really hack your phone, but people can sim swap you where they basically call up Verizon or whoever and say I need to change, I got a new phone. My name is Jeffrey ladders, but they're not Jeffrey ladders. And then they you know, they dig pored over your phone. And there's not there's not that much you can do about that there are a few things but and so SMS is not very secure. In general phone numbers are not very secure. However, if that's the only thing that you know, some banks are really terrible, and they only allow SMS based two factor, it's still much better than not having two factor. So like having two factor just makes things much harder to hack, even if it's a phone number. So I'd say set up two factor wherever you can, that will protect you a lot, make sure you have a backup. That's pretty good. The last thing is don't reuse passwords. So use a password manager of some kind. The issue with reusing passwords is even if you have a really strong password, you have like random site.com, and you have a cool forum on that site. And you use a password there, someone hacks that site, and they crack all the hashes it recover your password, and then they just try out that password on every other site you use, it's very easy to can just like enter your email, enter that password. I've just seen many people get hacked this way. So just don't do it. So use it use a password manager. Even if it's just like the one built into Chrome, it's just way better. So because it's just a very common type of attack. So yeah, those are the three things keep things updated, you strong two factor. Don't reuse passwords. Honestly, for most people like that will just get you you're just actually pretty good. Like, you're probably never going to get hacked, if you do those things, you're probably going to have a pretty good time. Like, what's awesome is that security for like the end user has actually gotten a lot better. Like, you know, if this, if this were like, the like late 90s, I could tell you a lot of things you could do and like none of them would be sufficient. Because like, you know, your like Windows XP or whatever could just just be vulnerable and could be hacked, even if you know, there just weren't updates of it. So like, we've actually come a long ways in terms of what's possible in terms of like, how secure like, oh, yeah, so maybe one more slightly advanced thing is,

I think like, buying hardware for like a phone, like if you're buying a phone, new phone, I would recommend either getting an iPhone or getting like a Google Pixel. The reason why is that, like Google and Apple are just like among the best in terms of making secure hardware and software. And if you get like a different Android phone, you're trusting Samsung, or some other company, that's way less good. And so you're sort of like relying on them to deliver Google security updates, they might, they might be slower, they might add janky software that has vulnerabilities. So yeah, this is not maybe not the most important piece of advice. But if you're trying to be a little extra careful, I would say do that. And then also make sure that the phone you're using is still supported. So unfortunately, pixel threes are not supported by Google anymore. So just like, you know, if you have a pixel three, and again, you probably upgrade, like I don't know, don't use your phone. It's not a good idea.

William Jarvis 39:04

Yeah, it'd be a good idea at the beginning. Good idea. I'm curious,

Will Jarvis 39:06

what about messaging apps? Is it worth our messaging apps like signal like, superior enough that it's worth using them?

Jeffrey Ladish 39:13

Yeah, I really recommend people use signal. I think it's useful to think about your threat model here. So it's not that I don't think that say like, messenger is not secure, it's actually pretty, it's pretty secure. If you have a strong two factor authentication on your on, you're on Facebook. You know, Facebook supports yubikeys or security keys. So you can totally, you know, you can totally do that. I do that. But the thing is, is that, you know, the government can just like say, hey, this person says, I want to look at I want to look at your stuff. And there are some protections in place but yeah, I don't know like Why Why risk it? If you're if you're doing something sensitive, and you want to just like have more assurance that some you know, that you know, some government can't access that well then you just use end to end encryption. signals into encrypted signal doesn't get to see what messages you send. And so you know, that's just, you just you just have that extra layer of protection. You can also like, you know, set disappearing, like a timer for disappearing messages so that you sort of, you don't have to do anything additional so that you know that your like message record will disappear. There are I think there are lots of things that are illegal, that are not bad. And I think people should generally do good things. And so yeah, I mean, there's, there's lots of things that you know, someone who is trying to attack, you could potentially, you know, use something that you did that was technically illegal, though perfectly fine, and just to come after you. And so you should protect yourself against against things like that. So, yeah, and I'm like, doesn't matter what political ideology or like, if you are, right, for any political ideology, there is something that you believe is totally good and right. And just to do that is illegal, probably where you live. So for anyone, you definitely have the capability to coordinate with other people, you know, don't don't do don't kill people and stuff. But you should, you should like, your individual person, you should be free, you should like have the ability to communicate with one another securely. So,

Will Jarvis 41:08

exactly. I love that. It's great point. It's great point. Jeffrey, I'm curious, you're super interested me? Because like you're interested in security in all these different levels? I'm curious, were you first interested in security? Or was evolutionary biology first? Or did they come along beside each other? And then kind of like, you know, you brought these two together thinking about x risks? And, and how do we use security to help prevent some of these problems?

Jeffrey Ladish 41:33

Evolutionary Biology was totally first. Yeah. Nice. So I was Yeah, I was at the Evergreen State College in Olympia. I was studying evolutionary biology with Brett Weinstein had their hiring. And I sort of had just, I was there and I was like, what, like, what's interesting here, like, who's who's teaching interesting things. And that was just by far the most interesting thing. And I started studying that, like learned about like, phylogeny sort of how different animals are related to each other. I'd also like been reading Richard Dawkins books like The Selfish Gene. And that was just like a really excellent take on on sort of, like, sort of like the mechanisms of evolutionary theory. And in shortly before then, I had been very religious I grew up Seventh Day Adventist. So like, when I D converted, I was like, Wait, okay, evolution is true. First of all, that's wild. Because I grew up very creationist. I read all the creationist books, I knew all the creationist arguments. And so I was like, Well, okay, I think that evolution is probably true, but it doesn't make any sense to me, I have no idea how this works. So I was trying to figure out how it worked. And I read The Selfish Gene, I was like, Oh, well, there are actually mechanisms here. And like, you can make predictions using using these, these, these mechanisms. And I was just so blown away by that. Once I saw that, that Heather and Brett, were teaching this sort of learning theory, I was like, Oh, that's amazing. I want to go and learn this. So I was learning that and I was doing some, like, some bat research, and some monkey research. And I don't know, I've always been interesting computers too. And so like, at Evergreen, there was a hacking club. And they did it CTFs. And they did something called Collegiate Cyber Defense Competition. And, like, basically what happened was, I was I had, I was doing all of this, this, that researching, like recording that echolocation calls, and I had all this data on one of my laptops, and I totally messed it up. And so one of my friends who was like, in this hacking club helped me like, fix it and like, restore everything. And I was like, that's amazing. Like, you can just like boot into Linux, like from the beginning, just like up on the command line. I was like, I wanna learn all that stuff. And so I just like fell in with that. And then it Yeah, and then I was thinking about existential risks and thinking about sort of, you know, the large scale stuff. And it just seemed like this might be a practical skill that could be useful. And so I was like, Yeah, let's do it. I

Unknown Speaker 43:34

love that. I love that.

Will Jarvis 43:35

Different. I'm curious if one of our listeners is interested in security and AI alignment, what's a good place to start? Where should they go?

Jeffrey Ladish 43:44

Yeah, that's that's a good question. So I think there's a lot on the EAA forum about like, alignment, or Yeah, so there's like, less wrong, there's the alignment forum, this EA forum, I'm seeing more people post about. So there's a lot of people posting about alignment on, you know, the alignment forum, as you'd expect. And I think that I think that from there, and from lesswrong, you'll see a lot of like, resort, like, just like, you know, people pointing at introductory guides. I think there's there's a few good, like courses that you can take that are sort of people have tried to like, you know, bring together a bunch of the sort of fundamentals. And I'm really hoping to see more people sort of trying to get into some of the theory and some of sort of the first principles when it comes to specifically security and AI systems. I think that, yeah, it's actually a hard field, but I think it's a very good field. So we haven't really talked about rationality per se explicitly that much. But I think I'm a really big fan of this way of thinking because security is hard, I mean, alignment, even more so. But security also is a very hard field. Because you don't get very good feedback. The feedback you get is pretty sparse. So you know, like if you're looking at securing your your your laptop or your phone or your accounts, you're like you might be like Well, I haven't gotten hacked. So like, Am I really in danger, but if you only get hacked every 10 years and someone you know, destroys all of your social media and all of your bank accounts, that's actually really bad. So you're you're trying to like, be calibrated by an event that only happens every 10 years. And that's just, that's just difficult because you don't get good feedback. And so in the cybersecurity space is difficult, because, you know, people have different hypotheses about, you know, they have different threat models. And you know, and so, I was just at DEF CON, I was talking with a bunch of friends and people were, like, wildly different in terms of their level of paranoia. Because you know, it's DEF CON, there's tons of hackers, and people are like, Oh, my goodness, like, maybe they'll find a zero day and like the Bluetooth protocol, and they're like, hack your hack your device. So you should have Bluetooth turned off? Should you have Bluetooth turned off? How big of a risk is that? Actually? And that's actually an important question. Because like, because because there's so many trade offs in security, you know, if I'm at an AI org, and I'm trying to know, like, help users secure their systems, you know, if I'm, like, causing them tons and tons of trouble, for something that's not going to protect them that much, because that threat wasn't realistic in the first place. You know, if I'm like, you have to use air gap for every single every single system has to be air gapped. Well, like, they're never gonna be able to get anything done. So like, that's probably not a good idea. Maybe jump to something should be air gapped. But like you need to have, you need to be calibrated and have a realistic threat model in order to do a good job. And so I'm actually pretty excited about seeing more people post on the AI forum, or can post on less wrong, and you leave it for him about some of these theoretical and applied security questions. Because I think, I think that's like, often this is throwing shade a little bit. But I think often in the InfoSec world, people like to talk about what's flashy people like to demonstrate exploits. And they're not they do a poor job of being calibrated. They do a poor job of, of just having really rigorous epistemology. And I'm like, well, the stakes are too high here, we need to regress epistemology, like, let's, let's try to build a community of people who are, you know, you know, they're not just going to let's not just talk about flashy, flashy exploits and vulnerabilities. Let's like, let's like try to let's try to be calibrated, let's try to make good predictions, try to have true beliefs. I think that's the thing we need. I mean, like, that's definitely the thing we need, when it comes to alignment. You have the same problem, except it might be like, you know, maybe you'll we only get one shot. Or, you know, maybe this maybe we'll get a few shots. people disagree about that. But either way, we don't, we probably don't have a lot of chances to get this right. And as the systems like, the more powerful these systems are, presumably, the worst mistakes are, you know, and eventually they're unrecoverable. And so that's, that's a domain with very bad feedback. So we need to be extremely rigorous in our thinking. So, yeah, so I think, you know, if you're interested, there's like, definitely resources, build and get involved. But I also want people to think about, like, you know, it's not just a matter of like, going out and like reading some content. It's also a matter of like, improving your thinking, like, we need to be really good. So it's like, it starts with like, trying to improve, you know, how you reason, becoming more calibrated, you know? So I think it's like, it's not it's not just a like, it's not just knowledge. It's not just content. It's also like practice. It's also like skills,

Unknown Speaker 47:57

get better thinking.

Will Jarvis 47:58

That's great. That's great. Well, Jeffrey, thank you so much for taking time to come on the show today. Where can people find you on the internet? Where should we send them?

Jeffrey Ladish 48:06

Yeah, you can follow me on Twitter at Jeff laddish. I used to go by Jeff I go by Jeffrey now so it'll look confusing, but that's probably the best place to follow my work. I also have a website Jeffrey laddish.com. I posted the the EA forum unless wrong sometimes as well. So any of those places are fine places to follow me.

Will Jarvis 48:26

Good stuff. Thanks so much, Jeffrey. Thanks.

William Jarvis 48:33

Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Unknown Speaker 0:41

Well, Lars, how are you doing today?

Lars Doucet 0:43

I'm doing pretty good except for the fact that I'm a little sick. But other than that, I'm alright. So that's great. Walter off in my mouth right now.

Will Jarvis 0:51

Let's get you prepared. Well, today's a special day. You've got a big, big release coming out. Can you talk about that a little bit?

Lars Doucet 0:58

Well, he's just arrived in the mail yesterday. Land is a big deal. Why rent is too high wages too low what we can do about it. Your book? Yeah, this is. So it publishes today with shock. Simple press. We've got the physical book, we've got an ebook and an audio book. And yeah, it's I've been working on it for gosh, least. Yeah, better part of the year. Let's put it that way.

Will Jarvis 1:26

That's awesome. That's awesome. Can you talk a little bit about what the book is, and the main thesis behind

Lars Doucet 1:31

it? Okay, so it's right there in the title, land is a big deal. And the double entendre is 100%. Intentional, like land is a big deal as in land is a very important matter. And then land is a big deal as in, it's just like, it's an awesome deal. Like, you know, there's there's a very valuable, like, business arrangement, if we pay attention to it, you know, there's a lot of value that's locked up in land. And the basic thesis of the book is that real estate is the world's largest asset class. And then the major driving force behind the value of real estate is land appreciation. And, for some reason, just contemporary economics, even though like if you scratch the surface, and like dig down to all acknowledge that this is true, but then in terms of like our public policy, we kind of just ignore it. And it's so strange, because land has this huge weight on the economy. And when we have bad Land Policy, it may makes everything worse. It's basically the root cause of the housing crisis, which in turn, is the root cause of all these other problems in our lives. And the book is here to basically just elucidate why land is a big deal. And how it causes our ignorance of that fact, how it causes all these problems in our lives and what we can, how we can take that knowledge and fix things.

Will Jarvis 2:53

That's great. That's great. I want to talk first on what land is, and then how big of a deal it is, like you mentioned, it's the largest asset class in the world real estate, and the primary driver of that is land. What is land? And then how, like, how big is it in turn, if we compare it to the different things like, you know, financial assets, or you know, real capital or things like that,

Lars Doucet 3:14

right. So one of the things I wanted to do with this book is I always get really frustrated with a lot of political and policy arguments where people just argue from vibes, like the other thesis of this book is just is just shut up and do the math. Yeah. So basically, when I talk about, some of the things I do in the book is go out to measure all of America's land values is like a major portion of the book. Right? And so the first talk about what land is and why it's important land is basically everything humans don't produce. I mean, that's obviously like the most obvious example that is like literal land, right? Like just dirt. But it's also like locations, right? You know, you the real, the real estate agents, just give it right away Location, location, location are the three most important things in real estate. And then they'll also have this this this fate, this phrase, they like to say buy land, it's the only thing they're not making any more of. Yep. And so the fundamental problem is, I mean, just kind of paraphrase William F. Buckley here is that there's infinite capacity to increase labor and also to increase capital but no capacity to increase land, we can't make another earth we can't make another Manhattan, you know, and so, because whenever you're doing anything in the economy, basically, the results of any productive behavior gets split up between people providing three things, people providing labor, people providing capital and people providing land. And we can make more land. I mean, sorry, we can make more labor. People can work harder, less hard or more people can work. And we can make more things, more tools, more factories, more machines, whatever, you know, to make ourselves more productive. But because we can't make more land, land really holds the whip hand in the economy, and land takes its share. error of production in rent. And the problem with land is that everybody needs it, you know, land as an asset has three unique properties. And those are that it's strictly scarce, it is necessary for production. And you can't make any more of it. I mean, sorry, I already said that it's scarce. What the third one really is, is that it obtains value from its location, right. And this is a perfect recipe for what we call rent seeking. And economics, which is basically collecting value extracting value from the hard work of others without contributing anything yourself. And when I say land is necessary for production, it's literally true, like, it's impossible for you to do anything without being in a location to do that, right. And the way I like to say it is that you can't work, eat, sleep, or even poop, without access to land to do those things on. And if you do any of those things in the wrong place, or someone doesn't want you to do it, or you don't have the right to use their land for that purpose, you will get in a lot of trouble. Right? You know, even something as innocuous as sleeping, you know, you sleep on a park bench, there's a very good chance we'll get arrested by the police. Right? You know, and so was the lands necessary for production and just all human activity, everybody needs it, you can't opt out of out of needing it. And then because we can't produce any more of it, you know, especially when we talk about valuable locations, that creates this kind of local monopoly with every piece of land, that gives the owners of land intense leverage to extract value from the rest of us. And then there's a third part, land obtains value from its location. This essentially is so so like, if you imagine you operate a hotdog stand? Do you want to operate that hotdog stand in the middle of the desert? Or do you want to operate it like next to Times Square, right? If you own a parcel of land next to Times Square, that's very valuable. And putting a hotdog stand there, you'll get a lot of traffic because of all the rest of the contributions of New York City, right? Things that you didn't do things that the community provided, but yet, you're able to extract that value, because you're adjacent to it. And so when those three things add together, basically, land becomes this asset class that really distorts the economy when we, when we don't have policies that treat it well. And right now, we do not have policies that treat it well.

Will Jarvis 7:20

But that that's really well thought that's really well put, I want to double click on something interesting you did there. If you remember, probably a couple of years ago, there's a book that came very popular was by a French economist named Piketty. I'm sure I'm butchering his pronunciation there, I've only read it. But it was called capital in the 21st century. And it was all about how over time, you know, capital has sucked up more and more. It's driven a lot of inequality, because it's sucking up more and more of the economic production and taking away from labor. And he divides things between capital and labor, you divided things between capital, labor and land, which I think is a really important thing to do here and split these things out. Can you talk about why that is kind of it's not a unique approach, and that people have been thinking about this for a long time. But oftentimes, land just kind of gets lumped in with capital in a way that I think, you know, misconstrues things in people's minds,

Lars Doucet 8:17

right? Yeah, you're absolutely right. So the thing is, if you go in any classical book of economics, the even some, a lot of them will just say the three factors of production are land, labor, and capital, but then land will get treated as if it's just a species of capital, right? It's just a thing that people own that helps them get more wealth. And, and so land is really a separate category by itself, because it doesn't behave like capital at all, one of the major things about capital is that you can move capital, you can't move land. And secondly, I mean, some capital can be moved. But you can also make more capital and you can't make more land. And then the other big thing, and this relates to Thomas Piketty, or Thomas Piketty, I don't speak French. Is that capital also depreciates right, you know, capital has maintenance costs. Now, land generally doesn't depreciate land, generally, if anything appreciates over time as demand for those locations goes up. And because of this, treating land, as if it's a species of capital really distorts the whole thing. Like you can put them both together and call it capital. And then yes, Pickety is right, the return to capital is growing faster than the economy itself is growing. And that seems bad and it is bad, right? But this guy called Rome Lee did a really good analysis of Pickety his work, and points out that when you decompose picket ease category of capital into regular capital assets and housing, you know, the majority of whose appreciation is due to land, then you see that all of the increasing returns to capital are really just to the housing sector, right? All of the returns to just regular capital like tools and factories and other things like that is flat that. Because once you appreciate once you account for depreciation. And so it's really even even using Pickety his own data, what he's showing is that yes, like the returns to the capital sector are outpacing the growth in the economy. And that's bad. But it's not because of, of capital. It's because of land. Right? Right. And so it's essentially a category area error, error.

Will Jarvis 10:24

Make sense? Make sense. I want to move on now. And talk about, you know, how big of a deal land is. So a lot of people, you know, would agree with you all the way up to here like Paul Krugman, he's like, yes, like, you know, you know, this makes sense, Lars, but he's like, I don't think land is that big of a deal. Actually, like, I just don't think it's that big of a problem. It's not this huge asset class that you talk about. Can you talk about just how big land is as an asset class and how important it is?

Lars Doucet 10:49

Yeah. And so a real important thing to just like kind of contextualize here is that it's like here we are recording a podcast remotely in the in the the work from home revolution in the future with a Metaverse on the horizon and stuff. Oh, yes, we're more disembodied and atomized than ever like, like, like when, when, and then some weirdo like me comes on like ranting about land. It's like, what am I some 18th century peasant? Like, what is land matter in the economy? Well, I have a lot of figures in my book, this was the whole point of shut up and do the math. Right. So I wanted to, you know, see if land was a big deal. And you can define that in several ways. And here's the ways land is a big deal. Most of the value of urban real estate is land, everyone knows with all these million dollar, tiny, tiny houses in San Francisco and Manhattan, that are worth millions, millions of dollars, you're not paying for the building, you're paying for the dirt, you're paying for the location, location, location, location, right. And I have a lot of data in the book that that supports exactly how shocking that disparity is, then Americans land rents, if we were to take all the value of all of America's land, and just take it into, like the annual land rental income value could get from renting that land down, equals a really sizable portion of the government of government spending, you know, so we could replace a lot of sales and income taxes, with a shift to will what's known as a land tax. And the exact values depend on which budget, you're looking at state versus federal, etc. The other thing is that land represents a significant percent of all major bank loans. So bank loans over the past century have just been increasing increasingly, increasingly just chasing real estate. China's an extreme example of this, let me get some figures for you here. So over, in around 1880, bank loans are somewhere like 35%, of all real of all bank lending was real estate. And then 1920, you know, that had fallen to like 15%. Now in 2010, it's like, it's well over 50%. It's like 58%, or something in 2010. And the graph, the graph, I have only goes till then. So I think it's probably increased since up to 2020. And this is all over the world. It's New Zealand, it's the UK, it's, you know, Finland, Italy, Australia, Sweden, you know, and then China. It's like this graph I have here that goes to 2007 in 2007. That was, like, what, 15 years ago? Yeah, 87% of Chinese bank loans were for real estate. And we see right now with their massive crisis that they're having right now. So not only is land this huge, it's also the largest asset class in the world, According to McKinsey shown that real estate is 68% of the value of all real assets and real assets, or if you take paper assets and decompose them into the actual atoms that they point to. And it's like just the physical stuff in the world that people own 68% of all that value is real estate, and of the portion that you could consider non produced assets, which includes land mineral rights, and that's about 40%. You know, so it's this huge part of the economy, banks then chase this. And when banks chase it, it pours fuel on the fire because they just constantly bid up the price. Right? Right. You know, of a scarce asset that allows you to extract value from other people, right off of stuff, you didn't contribute to the economy. It's pretty bad. And then Thomas Piketty, his own work he has some excellent graphs of capital in Britain and capital in France, and capital in Spain. And if you look at these you see these like shifts were back 100 200 300 years ago, all the value majority of the value of real assets was locked up in agricultural land. And there's been almost this perfect transition of like, like half of the world's like real value being tied up in agricultural land. Shifting almost perfectly to residential land. So yeah, we all moved to the cities and we got we're not peasants anymore. We're not dependent on farming for a living. But we are dependent on needing to pay rent somewhere so that we can have a job. And so that so so we still have aristocrats and landlords who basically rule the world.

Will Jarvis 15:24

Yes, yes. And the remote relative revolution has not, you know, we've hit some equilibrium there where it's maybe a third of jobs or something like that. But it doesn't seem like, you know, it's Lux Metaverse, you know, 35 daily active users. That was the big news from yesterday. And it doesn't seem like we will have much more innovation in that space for at least 100 years or something like that. So we are stuck in the real world for the time being. And so land still really matters, it seems like

Lars Doucet 15:51

well, and also the thing is, it's not like a bunch of people can move to, you know, some podunk town with good internet and not increase the land values there. Right, exactly. There's this phenomenon called Ricardos law of rent, that when you increase the productivity of an area, the rents basically go up proportionately. And so the issue is like, everyone's like, Okay, I'm gonna work from home, I'm gonna move three hours out of the city to this nice little sleepy suburb that's really cheap. And it's cheap for about a hot minute until you all your friends come to. And now it's expensive, because people like, oh, well, you're making a really high salary from your work from home tech job. So I'm gonna raise the rent.

Will Jarvis 16:29

Yep, exactly, exactly. And it's this vicious cycle? Well, Lord, so I think we've established land is a big deal. In fact, you know, this is like, perhaps this thing that is true that few people realize. And so it's super interesting to me, personally. What's to be done about it? You know, what should we think about what policy interventions would help alleviate this kind of stranglehold that land has on the global economy?

Lars Doucet 16:55

Right? Well, there's a couple. Right, so the one that most people will be familiar with is just the NIMBY ism, you know, the yes, in my backyard movement to basically just save us from the strangling force and people who are like, Oh, we're in a housing shortage, don't ever build any more housing. You know, so just pushing back on that is good that the problem is, is that there's still a stranglehold on land, right. And the, the solution actually comes to us from famous economist from the 19th century by the name of Henry George, who at a time was probably the most famous political economist of his time. And the first third of the book is basically a book review of his seminal work, progress and poverty. And his basic thesis was, why is it that as progress advances, you still have poverty, and in fact, sometimes worse, poverty in the most advanced cities side by side, with all this progress, like in San Francisco, major tech hub, there's just homeless people on the streets right next to just some of the wealthiest people in the world. Right. And George predicted this, you know, over 100 years ago, and he also gave us the solution. And since then, basically, every economist ever basically agrees he was right, which is why it's so puzzling, why they haven't put his policies into effect. And his policy prescription is a land value tax. Now, we have property taxes already, the way a land value tax differs is that you don't tax the buildings, and then you raise the rate of the land value tax to almost equalize the amount of income or benefit you're receiving from the land, what we call the land rent. Basically, if I owned, you know, a piece of land, like a perfect example would be if I own a parking lot, like right next to the Empire State Building, I should basically be paying a tax about up because like a parking lot, it's like basically doing nothing with the land. Right, right. And I can basically rent that out through just the demand for parking and parking fees, you know, that represents kind of like the natural income of completely unimproved land, like you should tax me at basically 100% of that parking income, right. And you should also tax the Empire State Building the same rate is the idea. The idea is property taxes, punish people for building, right, and they are essentially encouraging and subsidize people for buying empty lots in the heart of big cities. You know, I know of cases in cities where like people have bought large, large empty lots and held them out of use for like 10 years and then sell them for 10x what they paid for them, because they know that as the location, the population increases in that area, there will be more demand for land. And it encourages people not to develop which is really perverse. And the other thing is, and there's another section of my book that deals with this, is that there's really strong evidence that land value tax is one of the only taxes that can't be passed on to its, you know, to the consumer, which in this case would be a tenant, you know, who's renting from a landlord has to do Some special properties about land, but essentially, land value taxes, because you can't make any more land. There's a saying, if you want less of something, tax it well, because land is a perfectly inelastic good, it's perfectly fixed supply. If you tax it, you don't get less land, nobody makes land. So you just eat into the rent seeking of the person who owns the land, which encourages them, only to hold land if they're going to do something productive with it, which means if we tax land, we'll get a lot more housing, we'll also make housing more affordable. And we'll also be able to use the revenue from a land value tax to offset much more inefficient taxes. We know with income tax, that it's it's it's a drag on labor, you know, it disincentivize, we get less labor than we could, because it disincentivizes people to work as hard as they could. And then sales taxes are regressive. They fall mostly on the poor. And they're also disproportionately bad for small businesses, like the cost of compliance are way easier for large businesses and for small businesses. And so we can replace our tax system with one that's more fair. And that's more efficient. And that will encourage more investment, more capital and invest and encourage more, more, more hard work, you know, more labor. And so basically Henry George's thesis, there's kind of an extreme version of it called the single tax, which is that the only thing we should tax is land. And my position is, that's nice work if you can get it. I show a lot of numbers in the book of you know, whether that is or isn't possible. But I think we can get actually pretty close to it, even if we couldn't realize the ultimate dream in one fell swoop. And it certainly would make things a lot better than they are today. So that's that's the main policy prescription is the land value tax.

Will Jarvis 21:41

Yes, absolutely. And I'm a big fan of this, actually, from a just an economic growth angle. Charles Goodhart of good hearts law, he's actually still alive, I think this is great. He wrote a paper last year called post Corona super stimulus. And he talks about the potential economic effects of implementing land tax a shift to a land tax, it can increase US GDP in the US by as much as 15 to 25%, which can help us escape kind of this this great stagnation, we find ourselves and it's actually not unheard of, you know, we've had three or four shifts and taxations of this size in the United States since our founding. So it's not like it's this this crazy thing that's completely out of the possibility space, it is very much an achievable thing to do something we should strongly consider.

Lars Doucet 22:26

Yeah, I mean, I agree. And the other thing is that there's another aspect of Georgia ism. Beyond land. Remember, I said, there's this thing called a land like asset, so there's literal land, but there are other things that behave like land, right? One of those is things like electromagnetic spectrum, right? So like, Froggy 99.7, is occupying a fixed location in the electromagnetic spectrum. And those are resources that we need to allocate efficiently. Satellite space, right? Only, like if you're occupying under a certain orbital lane, another satellite can't be there. That's a scarce resource. And we need to manage those well, and there's also there's also depletable natural resources like oil, like natural gas, and then renewable natural resources, which are tied to locations like Henry George famously basically predicted solar power by basically saying that like, as technology improves, certain locations will become more valuable, like a patch of desert could become more valuable. If there was ever humans ever devised a way to capture this the power of the sun's rays, which we now can do. And we are seeing what we call a locational, rents accrue to certain areas. And one thing that's interesting is that the Kingdom of Norway aside, I'm, I'm a dual American Norwegian citizen, Norway has been doing some interesting things lately, with its natural resource management, they have a long history stretching back over 100 years of explicitly Georgist management of their natural resources, starting with hydropower. And then their oil, their oil management system was also set up under effectively a Georgist regime. And the basic idea there is simply that it's the people who own the resource, right. And so there's a very strong severance tax on the extraction of the resource. But then in order to make sure that there's still an incentive to discover the resource, they have some subsidies, and to cover those costs, so that you're taxing the paths of extraction of the resource. That's because if you don't do that, you get the kind of situation where we see here more in the United States, where people will squat on a natural resource node and then political connections get tied into things and production gets pushed out further and further and further into more marginal resource nodes because the best ones are being being kind of squatted on waiting for the price to go up. And the Norwegian model has been a huge success. Natural Resource Management. And the current ruling coalition is now pushing for Georgist management of natural resources and other sectors. And what I would recommend is that they start looking at the largest resource sector of all, which is land, because Norway famously has very high income taxes. And I think those income taxes are a drag on the economy, and they could replace those with taxes on land. And then maybe all the poor students in Oslo who can't afford anywhere to live, because housing costs are through the roof would also get a break. So I think it's, there's, there's more to Georgia ism, which is the philosophy of Henry George than just land value tax would fix this. But, but that's kind of the core of the philosophy. But to expand further, you go into natural resource management. That's great.

Will Jarvis 25:44

Could you talk a little bit about just the crypto angle and potential applications in Aetherium, as well?

Lars Doucet 25:50

Oh, yeah, this is funny. One of the things is, so I've worked as a consultant in the video game space for a while writing about video games. And there was this whole trend of crypto based video games. And some, some of the people who become really interested in GA ism come from a crypto background, which was kind of surprising to me. Vitalik Butyrin was very taken with the philosophy He graciously endorsed my book. And he wrote a paper recently that I thought was very interesting about the Etherium Name Service, which is kind of this domain name service that's tied to Aetherium. Basically, like dot ens, because that's a scarce it's kind of like electromagnetic spectrum. It's scarce, right? And how do you allocate those efficiently? And so he wrote basically, this philosophy of, you know, how can we allocate these effectively so that people don't just buy like, cool dot ens, cool dot eath, or Lars dot efe and hold it out of use forever, right waiting for like, Get everyone knows, there's all these people who squatted all the best domains, and so and so he like wrote out a policy paper inspired by Georgist philosophy of how to deal with that. One of the things in the digital world that's a little different than the physical world is that sometimes we can create more of whatever our virtual land is, and so that you can kind of kick the can down the road that way. But in some contexts, you can't. And a lot of that has to do with when the locational aspect sets in. For instance, in a lot of the metaverse type games, they've had a problem that rhymes with what we've seen in online games, just old school games, like Ultima Online going back 30 years, which is virtual housing crises, which is what's valuable is other people in proximity to other people. So even if you have 10 servers, you know, or 50, or 100, with as much virtual land as you want, people want to be next to wherever all the people are. So the digital equivalent of Manhattan will behave much in an economic way similar to the real Manhattan, where land virtual land values will rise, and you will have virtual land speculators who hold land out of use, and don't use it productively and charge everyone else for the privilege. And then you can't afford rent in the metaverse, which is hilarious to me that that has also happened, that we've so digital, we've been so diligent that we've managed to recreate the problems of the real world, in the digital one.

Will Jarvis 28:21

It's amazing. Zuckerberg, if you're listening, we have some policy prescriptions for you here for the for the amount of hours. That's great. That's great. Well, Lars, thanks so much for coming on.

Lars Doucet 28:31

Let's talk about the book. Where can people find it? Where should people? Where should we send people to pick up a copy? Yeah, so it's at its real simple. www dot land is a big deal.com. For now, you can only order it directly from the publisher for boring publishing industry reasons. We're going to have Amazon links and all the other stuff and like worldwide distribution in about a month. And so but for now, you have to order it directly from the publisher at WWW dot land is a big deal.com. and international shipping is a little pricey right now, but we do have an audio book and an ebook version that don't need to be shipped. So all of our international customers, you know, that might be a good option. If you absolutely insist on buying on Amazon, we have a waitlist you can sign up for on land is a big deal.com and we'll notify you, but we'd really appreciate it if you picked up whichever the three formats is most convenient for you today.

Will Jarvis 29:24

I highly endorsed the book and especially the audiobook, you might get to hear yours truly on in a couple tracks. Yeah, it's a it's really good. I really enjoyed the book. I everyone that's read it has really enjoyed it. So I highly, highly encourage everyone to go pick up a copy.

Unknown Speaker 29:38

Thanks very much. Appreciate it.

William Jarvis 29:43

Thanks for listening. We'll be back next week with a new episode of narratives.

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars du se joins us as a co host.

Will Jarvis 0:40

Well, Steve, how are you doing this afternoon?

Steve Hoskins 0:43

I'm doing very well. Well, thank you for having me on the podcast?

Will Jarvis 0:48

Absolutely. Absolutely. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Steve Hoskins 0:54

Yeah, sure. So as you can tell from the accent, I'm a New Zealander. After graduating with a degree in economics, I worked in kind of urban issues for five years there, a lot of housing and transportation type stuff. Then I went off traveling the world and sort of ended up in Singapore working in health and labor economics. And basically, what's been niggling at me for the last 10 years or so, is a frustration with the housing market, which is basically, you know, stuffed everywhere. And just the love of cities and wanting to make them better. And how that's kind of channeled into my career is, I've eventually settled on the idea that Henry George's, you know, prescriptions for shifting the tax base onto land are some of the most important lessons that economists, people involved in housing policy and the entire public can learn. And I'm kind of directing my career along the pathway of trying to convince people that that's really what we need to be doing to fix our cities, fix our inequality and solve a lot of social problems as well.

Will Jarvis 1:59

Can you talk a little bit about how, you know, the current political discourse is kind of framed as this conflict between capital and workers, you know, like you hear like workers of the world unite. You know, this is kind of this famous socialist tagline. You know, Thomas Piketty writes a lot. And I'm sure butcher just I'm sure I pronounce his name wrong, Katie, I'm not sure. Yeah, exactly. Exactly. You know, he wrote this book Capital in the 21st century, it's all about how all of the inequality is driven by these excess returns to capital. Can you talk about how, you know, maybe that that model may be flawed in some ways? And what land has to do with it?

Steve Hoskins 2:35

Yeah, sure. So, I mean, it's absolutely crazy that in basically the entirety of my economics, education as an undergrad, and in all of the way that that kind of political discourse happens, there's always flame flamed around capital and labor being in competition with each other. And that, you know, when wages go up, profits go down, and vice versa. And what I kind of have discovered, as I've, you know, completed this recent Master's in spatial economics and learned the sort of George's lessons is that there's this third category of land, which everybody's just kind of blind to. And it has, you know, some really unique features. When we talk about land as Georgia's, you know, we're talking about the physical land. And that's what I'm most interested in, you know, as an urban economist, but it also kind of applies to natural resources. And also some areas of kind of economic rent, where regulations are like really protecting people, you know, deriving what we call economic rent to them, because it's not being competed away. But to focus on the kind of physical land, the thing that's really unique about it is that, you know, it's in fixed supply, so you can't really make more of it. Yeah, you can dredge up some areas, I'm in the Netherlands at the moment, and they're quite good at that. But the locational aspects of land just can't be competed away. And, you know, everybody needs land to survive on It's literally impossible not to consume land when you're producing and when you're out there socializing and consuming in the world. And what that means is that, you know, we're all paying for land all the time, all sorts of rents are being just gobbled up by the landowners. They can't be competed away, and nobody's talking about it. So we can talk about how that plays out in the politics a little bit but that's kind of the really frustrating thing for me as a as an as an economist.

Lars Doucet 4:37

So speaking of these things, we throw around words and jargon like rents and stuff, you know, economic rent versus, you know, the rent you pay to your landlord. You know, part of your thesis is, is that the, you're talking about how we're always paying all these invisible rents all the time. What what do you specifically mean by that, and can you give some concrete examples?

Steve Hoskins 4:58

Yeah, sure. So, um, You know, to stick with the area that I'm most focused on, which is housing, cities and kind of urban land, you know, in order to access labor markets, or to access, you know, proximity to other people, which is something that we all love, it's why so many of us live in cities, you have to pay for access to those locations. And, indeed, to the extent that an area has kind of higher or lower amenity, you know, there's greater, you know, value enjoyment that you can get out of a place, you have to pay higher rent. And so when I talk about, you know, land gobbling up so much of the economy, it really is the case that, you know, as society develops, as the center of cities become so much more productive, or provide so many more social and you know, consumption opportunities, land prices just go up and up and up. And so all of those kinds of benefits of, you know, social progress, flow ultimately into the people at the hands of the people that are owning the land and the lucky locations. And out of the hands of both the workers and the capital, the producers, they both have to pay for those, those location rents.

Lars Doucet 6:16

Okay, so this rains a little bit with the traditional socialist critique, which is that it's but the socialist critique is that it's capital that's doing the gobbling up, but you're saying that it's land? And that land is often conflated with capital? So how are they different? And how does that work out? So when when land is gobbling up these these amenity values? Like, like, like, how does that actually work? And how is that different than capital? And why should we treat them as separate things?

Steve Hoskins 6:43

Great. So you're right, the socialists are obsessed with, with capital and its power in our economy. And my position, is that that correct, but they just most of what they're seeing most of the injustice that they're seeing is land that they call capital. And so the thing that makes land really unique there is, you know, you can't produce more of it, like capital that we think about in terms of machines, and computers, that you have to use and recycle back into into greater production in the future. Human effort can make more of that we can take materials, we can process them together, we can make them more valuable. But with land, you know, they just exist this plane of physical territory, some of it has, you know, more desirable features, and some of it has less, but when you know, the center of Manhattan is suddenly you know, becoming a really desirable place to be, you can't respond to that by producing a bunch of more location in their area, and kind of competing the profits away. That can happen with with capital, you know, Apple got really good at producing tablets that we like to use. And, and as a result, you see, you know, Samsung popping up and saying, I'm going to do that too. And the profit gets competed down somewhat. But um, but with land, you just can't do that. And so the profit sort of margin, the profit margin of land that we call rent, just just absorbs that chunk, more and more.

Lars Doucet 8:15

So, going riffing off of that, going back to an idea you had talked about earlier, where you had said, like, the the classic capital versus labor or capitalist or socialist fight, is this idea that it's like, okay, if we want to raise wages, we got to take that out of profit. And, you know, the socialists see that as a good thing, because, you know, the business people are evil anyways, and don't deserve it. But some Well, meaning, you know, more more capitalist oriented people are like, Well, hey, that's our investment in society, right? And businesses take risks, and anyone who's run a business knows that it's like, it's easy to go out of business, you know, like, risk taking is difficult. You know, entrepreneurship has a, you know, a real cost to it. So capital does deserve this return. So how can we get out of that? That dilemma, like how does introducing this third thing land like shift, the fight between, you know, so called capital and labor in terms of in terms of who gets returns? Like, can we basically have a world where we can give a good profit to investment but also have increasing wages?

Steve Hoskins 9:29

So I don't take too much of a strong opinion about the capital labor battle. I mean, it may be a problem and I'm fine with the socialists taking that up once we've dealt with the land problem. But for me, you know, land is absorbing value from both the workers from consumers when they when they occupied, you know, houses and physical locations and from the producing firms. But the thing that makes it really different compared to the risk taking that capital does is, I don't see the social value being generated by, you know, the clever landowners who buy land in the right location, and then profit when it becomes more valuable. You know, when somebody does that by, you know, buying shares or investing, you know, their venture capital in a startup, the risk they're taking has a social value to it, which is that, you know, you give the your, your hard earned savings to someone, they put it to work producing something that they think that humans want to enjoy. And, you know, if they're right, everybody else, you know, everybody kind of benefits from that innovation from that new technology, and so on. But the risk taking that landowners like to claim is providing value to humanity, I really don't think it is because the land would have been there. Regardless, a lot of the time, the risk taking takes the form of you know, buying a car park and holding on to it for 10 years, and then making money out of it. So it's just not a socially useful type of risk taking. And, yeah, I think we can solve that with by placing a price on the ownership of those locations.

Will Jarvis 11:04

Well, Steve, up, I love this thought here. And like there's a lot of unearned gains that that go to landlords, things they didn't do, they perhaps don't quite deserve a lot of the rents they get. And it has these negative effects where, you know, they're sucking up a lot of the workers excess productivity, a lot of capitals extra profits, what's to be done about it? What should we think about what kind of policy things can we can what interventions can we put together that will help alleviate this kind of problem?

Steve Hoskins 11:34

Yeah, sure. So I think the gold standard in this in this area is the land value tax, that US judges like to hammer on about all the time. And sometimes we're a little bit perfectionist, where we say, you know, an 80% per year land value taxes, the only thing that we can do, and we have to do it, I think we should slowly, you know, try and chip away at that and shift more and more of the tax base onto land, you're basically charging each piece of land a certain percentage of its value every year. So you're not charging an acre the same in every different location. But the acres in the center of Manhattan get charged, much higher price, because they're much more valuable. So yeah, any progress we can make at kind of increasing the proportion of the tax base that comes from land, and reducing the proportion that comes from workers and firms and all of these other kinds of harmful sources, the better. But I also am willing to take some flexibility and say, Actually, anything we can do to chip away at the power of kind of rentier landownership anything we can do to kind of redistribute some of the value of location to other members of society, the better. And you can do that with things like community land trusts, and public housing. And rent control can do that a little bit. And I think, you know, an area that I've spent the last nine months or so just kind of constantly thinking about is with land use regulation. And I've really been kind of engaging with the yimby movement, the yes, in my backyard argument that all we need to do is deregulate you know, land use, allow people to build anything anywhere. And that will reduce the power of the landowners. And I kind of went in thinking that I have a little bit of hesitancy around it. And I'd like to kind of talk through some of those, those comments with you.

Lars Doucet 13:32

Well, let's do that. Let's, let's talk about EMP ism. First of all, define yimby ism, you know, kind of formally for our audience, and what its goals are, and then just briefly, its relationship and, you know, to Georgia ism, and what you think about them.

Steve Hoskins 13:49

So most of the western world, in almost every city has this sort of comprehensive and onerous system of land use regulation, which basically says on every given parcel of land in that city, here are the uses that you're allowed to put it to. And here are kind of the maximum densities that you can have on it. So I think you had Nolan gray on your podcast a month or two back. And, and he was really, you know, pointing out that we have all these regulations that you know, the US has particularly bad for this, but New Zealand is very much the same. Where, you know, on a piece of land, you can't build within a couple of meters of the boundary. You can't cover more than a certain area of the ground with built floor space, you can only build a certain height, maximum density maximum floor area, you might have to have a car park or a certain type of garage. And also you can only use it in certain ways. So you can't have you know, any kind of retail or commercial activity and a lot of suburbs in the US. These kinds of controls overland use and young bees, yes, in my backyard are basically a response to the NIMBYs who use those regulations to stop people from building.

Lars Doucet 15:08

The human being. NIMBY is no, in my backyard,

Steve Hoskins 15:11

not in my backyard. Yeah, exactly. Yeah. So the MPs are saying, you know, let's just slice a bunch of that regulation away, allow landowners to compete in what they provide on different locations. And that competition will, you know, bring down housing costs, make our cities a lot more thriving. And I think a lot of them think that it will also, you know, substantially erode the power of land that I've been talking about.

Lars Doucet 15:36

So the MB is basically their pitches that if we abolish or at least strongly reform, zoning municipal zoning that says it's like, okay, this is a residential district. It's a single family, bedroom suburb, and it always will be and, you know, we're going to bring down the wrath of God on you if you try to build a duplex or a triplex in this neighborhood. If we get rid of that and just let people build what they want, because zoning is effectively really heavy handed central planning. If we just let the free market decide what gets built, things are going to be better. That's kind of the pitch of nimbyism, right?

Steve Hoskins 16:13

Yeah, that's exactly right. And a lot of the time it's, it's kind of framed in these very black and white kind of terms, I get really triggered by the kind of, it's just supply and demand row like it's econ 101, bro, kind of perspectives where you know, all we have to do is just cut the regulations. You know, tons and tons of stuff will get built, prices will plummet and as studies will be will be fixed. I am a UMB. I really liked the idea of deregulating, but I think that the argument is often really over over simplified, and there's a lot more complexity going on in terms of how land markets work.

Lars Doucet 16:51

Okay, and so what are the MPs missing? And what do they need to have a complete balanced Land Policy breakfast?

Steve Hoskins 16:57

Yeah. Okay, so I'll frame it in two ways. So the first way is, I just got really stuck into the economic literature on this topic, and was a little frustrated by the evidence is really not that clear, that, you know, cut regulation, prices of housing go down, there's a really a lot of correlations between it, you know, cities that have stricter land use regulation tend to have higher prices, tend to have less elastic supply of houses. So when prices change, the supply shifts, less and the more regulated places. But not a lot of those studies do a very good job of kind of proving causality. And it could very well be the case that, you know, what we actually have is places that are higher value, the wealthier people in those places are just better at lobbying government to kind of protect their way of life, protect their city, and and that that sort of reverse causal perspective, you know, hasn't really comprehensively been been proven for my taste. That is not the main part of my criticism, though. And it's very much just like a technical, you know, economists, you know, being picky about causality, criticism. My main one is actually, I think that land use regulation can really shift the distribution of land prices. But I'm not convinced that it can drastically reduce them. And I think to get into it, it requires talking a little bit about the kind of three pathways that I think land use regulation affects land prices, and house prices, and then talking about how that feeds into the a&b sort of perspectives on this. Is it okay, if I slip you through

Lars Doucet 18:42

them? Yeah, yeah, let's go through that. So by the way, land policy affects land prices, you need things like, if I zone this area for single family homes, here's the effect that it has on prices, and a bunch of other things like that. Yeah, exactly. Yeah. Let's get into it. Yeah.

Steve Hoskins 18:57

So the, there's this very sort of intuitive model that urban economists use to sort of plot out the land price gradient. And so what we're saying is that, you know, in cities, we know that land prices are really high in the city center, and that they decline, the further out that you move towards the periphery of the city, and sort of at the point where those prices, the price of agricultural land, that's the edge of your city. And the models that economists urban economists use to explain this. Basically say the reason for that is the transportation costs, right? So I can live in the city center, and pay $0 for my commute, because I'm right by my job. Or I can live on the fringe of the city and pay a lot of time and money to get to work and back every day. And so the difference between the price of a house in the center and the price of a house on the edge of the city is basically the sort of annualized value of that transportation cost that the landlord During the city center is able to to sort of demand of tenants or of tenants of their properties. Because, yeah, because that that's the benefit of that location. Yeah.

Lars Doucet 20:10

Yeah. So just to like, clarify there, what you're saying is that, if it costs me I don't know, I'm making up a number, like gas is so expensive now. But like, if it costs me I don't know. $1,000 2000. Yeah, $2,000 in gas a year to commute to my job, like, I don't know, like, over whatever distance. Yep, that basically says that it's like, I'm saving $2,000 in rent, and I'm paying it in $2,000 in gas. And so like, the distance I'm traveling out is like this smoothly, like, like, smoothly interpolated function of how much more after paying gas is like the, the amount of my, my rental price increases? Or decreases? Is that essentially what you're saying?

Steve Hoskins 20:58

Yeah, that's exactly right. And we have this concept of spatial equilibrium, which is basically, you know, now we are talking a little bit about competition where, you know, all of the benefits of one location compared to another one, get absorbed up into the difference in the price of accessing land in that location compared to the other. Because if the difference wasn't absorbed into that price, well, you would just take the location that offers you you know, more amenity more, you know, access to jobs, access to social life, etc. But for a cheaper relative price. And as people do those movements, the spatial sort of arbitrage between locations means that all of those differences in amenity get reflected in the price of access to land. And that is what explains, you know, the difference and land prices in different parts of cities, different parts of the country? I'm curious,

Will Jarvis 21:57

Steve, so how does how does this interplay between, you know, land rents, and zoning, you know, play out in the real world? So so, you know, we had Cameron Murray on the pod A while back, he had this claim that that zoning, zoning, rolling back zoning restrictions would actually have like, no effect at all on housing prices, which doesn't quite make sense to me at some level, I think it definitely like, you know, easing, zoning restrictions would definitely help increase density and things like this, and and on the margin would definitely be helpful. But But can you talk about, like how these two kind of interact with each other like and how loosened zoning relations, zoning restrictions could could relate to price?

Steve Hoskins 22:43

Yeah, I really want to talk about Cameron's work, because I think he has a lot of good things to say. Let's talk about the three pathways first, because the third pathway is kind of the one where you can imagine all of the prices dropping down. So there are three ways that land use regulation can affect the value of land in a given location. And I call these the amenity effect, the profit effect and the scarcity effect. So the amenity effect is basically what we were just talking about, which is that land use regulations can affect how desirable or undesirable a location is. And as it does that, it will raise or lower land rents in that location. This is like the historic justification for zoning right is, oh, there's going to be too much crowding too much noise, you'll be shading the neighbors properties. And all of these kinds of negative externalities need to be regulated. And if we regulate them, well, we'll make our air our cities much more desirable. And actually, land rents will be higher, right, because you've created more amenity in that location, compared to somewhere else. I'm pretty skeptical about that argument now, because I actually think that density has so many benefits, that that that, you know, reducing density is creating more harm than good. So we can mostly set that one to the side. The second one, the profit effect is what I have focused on in my thesis. And this is the idea that, you know, if you're, if you own really central land in a city that is tightly regulated, and basically says, you know, look, on this location, you can just build like three row houses. And they can only be three storeys high. But you know, in an open competitive market, you'd love to build a 12 storey apartment building, that regulation that tells you what you can't build kills your profitability on that location, right? It kills what you're allowed to build as the landowner. And so when you go to sell the property, the land is somebody, they're gonna say, you know, I'm really not willing to pay that much for it. And so the flip side of this that I studied in my thesis is that when you drastically deregulate, you know, certain parts of a city, the landowners on all of that, you know, deregulated land get an instant windfall. They absolutely love it. Cameron talks about There's a lot. And actually, there's a lot of kind of sneaky land banking that people do, where they buy land, they lobby, the municipality for deregulation of their site, and they pocket the differences. And often they don't actually build the house, they, you know, build the houses. Once 30 regulations happen, they just sell it on and, and there's no more supply. And this explains, yeah, that's what I found in Auckland did this big deregulation in 2016. And I looked at those sites that have their land use regulations cut and observe that, you know, for the owner of like a typical property in Auckland, which is, you know, a fairly sprawling city, similar to a lot of American ones, the owner of that typical property that was up zoned to allow like five stories, instead of just a single family home, home, pop it pocketed in the order of about 100,000. US dollars. Yeah, on a on a typical property. So that was lovely for them. But the real question is the third effect, which I call the scarcity effect, and this is the one that the kind of yimby is are actually relying on with their arguments, which is that, you know, because we have strict zoning across the whole city, housing is made really, really scarce. Consumers are therefore, you know, desperate to afford a house and they pay much more out of pocket, you know, to get access to housing. And that basically, you know, I talked about this, this gradient inside the city going to the city center before, the scarcity effect is the idea that that tight regulation, like pushes all of that curve upwards, and generates this big sort of red rectangle of value that is kind of expanding the extractive power of the landowners and the city. And, you know, the extent to which that is possible, depends a lot on the existence of alternative locations that you're willing to move to when regulation forces you out of the city. So, you know, if you think about the American case, what's happened with the tight regulation of coastal cities in California, you know, Los Angeles and San Francisco specifically, is a lot of Californians have fled, and they've fled to places like Houston and Colorado, you know, where a little bit more housing can be built.

Because they just sort of not not able to be in California anymore, the housing that they would like to consume was not able to be built. And because they're able to do that to move to an alternative location, it kind of weakens the the size of that scarcity effect, because the landowners, as we said, right at the start all they can charge as the difference between their location and the other alternatives. And because there's lots of those alternatives available. I think that the extent of that scarcity chunk is kind of overstated. I do think it exists, I do think that massive deregulating would, you know, would slow the rise of land rents, or maybe reduce them if it was a really, really big one. But I think human beings kind of overstate it because they don't account for the fact that people are always, you know, engaging in this arbitrage between locations.

Lars Doucet 28:12

Okay, so that was those a lot. Let me let me summarize to make sure I understand. So you're saying that there's these three effects, that is basically account for the relationship between zoning and land values. And the three effects that Land Policy has on land values is first is the amenity effect, which is, you know, the whole the whole approach to your historical justification for zoning, you know, to manage your externalities and stuff. And so that if you successfully use land policy to make an area better place, somehow that's supposed to raise land values. But if you're saying it can also destroy land values by you know, preventing good things like density, you know, okay, so that's the amenity effect make the place better or worse. Then the second is the profit effect, which is where zoning can reduce the profitability of parcels, by keeping people from building as much as they'd like, right? It's like, okay, I've got some prime location here, but I'm not allowed to do the profitable thing. So I have less profit, which creates these interesting incentives, you know, for speculation, like, hold this pile, hold this land for 10 years till the app zone it and now it's, I can build apartments on it. So I can sell it to someone who wants to build apartments, so I've done nothing with it. I've just held it out to use for 10 years, but because of the depressed effect of the zoning that produced my opportunity once I got the new zoning in, and then there's the scarcity effect, you're talking about where zoning by not allowing us to build enough housing causes, you know, the whole was just supply and demand, bro argument. So So those are the three effects we're talking about. And then the effects that they have on on on land prices, right? Yep,

Steve Hoskins 29:52

that's really well put. And an important thing to think about is that the amenity and the profit effects are actually a good thing we would want Want to maximize land value through those effects? Because what they're doing is making the land much more valuable, much more desirable and much more productive. Right. So it's actually good to maximize land value with those two effects. But you know, although as we'll talk about, it would be ideal if that value was going to everybody and not just the landowners. But the scarcity effect, you know, to the extent that it exists, that one is very, very bad, and we shouldn't want want that to be happening because all it's doing is basically increasing the power of landowners in the regulated city, and allowing them to extract more from the workers and the and, and the firm's then would be efficient, and essentially kind of slowing the productivity of the whole city through that pathway.

Lars Doucet 30:49

Okay, so what I would like to hear now is okay, so what is the kind of what what what is what is missing from the yummiest position that that you think will address the kind of shortcomings of maybe not the shortcomings of nimbyism, but the incompleteness of it?

Steve Hoskins 31:07

Yeah. So I am a yimby. I know I've just sat here for 20 minutes and told you about why the EU and visa are horrible and wrong. And I differ with Cameron Mary on this as that I still would like to see our cities up zoned drastically. But I think that the argument should be made much, much more. On other aspects of the argument, I don't think we should make these really sweeping claims about house prices being fixed. And I think that instead, our claims should be centered on creating better cities, making them into these kinds of production and consumption powerhouses. You know, tackling climate change is a big one easing, you know, a lot of racial exclusionary policies in the US. And then there's kind of a political strategy argument around creating more households who have kind of less of their entire net worth just locked up and in preserving land values. So yeah, we can kind of talk through some of those if you'd like.

Lars Doucet 32:11

Yeah, well, let's just cash it out. What should we do? Right, the unities want us to up zone all the land or even abolish zoning, or or at least reform it? You know, so it's pretty clear what they want? What do you think we should do? It seems like you want to Yes. And like, Yeah, let's do the MVC stuff. But then what's the end? Yeah,

Steve Hoskins 32:29

yeah, I sometimes kind of rant about this on Twitter, where I feel like we're often arguing about which urban policy is the best. And most of them, we should just, you know, we should just do all of them all the time. So from a pure economic efficiency perspective, if I was forgetting, you know that much about equity, and kind of the experience of displacement for tenants and things, if we were just going for, you know, maximizing the efficiency of our cities, what we would do is we would drastically deregulate land use, you know, I think I mentioned like, you know, height limits, density limits, setbacks, and minimum floor coverage, most of those, we would just slice away, minimum packing gone, all of that should go. Because I think that, you know, landowners deciding what to do with their land based on the demands of their potential customers does lead to much better decisions about land use, and we should slice all of that away. But we need to make sure that the value that that creates for society doesn't just go into the hands of the people who happen to own the land when we do the upzoning. So, you know, I would support directly at the beginning, if it was the only thing on offer. But it's so much, so much better, if it comes with a system of land value capture, and ideally, that would be a land value tax. But there are other pathways towards it, which is to sort of have windfall gains taxes, which is where when someone gets up, zoned, the municipality takes a lot of the value that that's created for the landowner, because, you know, it's just a windfall profit. So yeah, it's a yes, we should do EMB. But we should also really be be capturing land values, and I'm begging the young bees out there to be georgeous and integrate it into your Eunbi movement. And then I've kind of brushed over but there are some other kinds of aspects of equity and making sure that that process isn't overtly harmful to a lot of people, but especially sort of tenants in the process, and we should probably have a sympathetic conversation about that at some point as well.

Will Jarvis 34:36

Steve, I am really curious that you've said some interesting things about the windfall effect of zoning. My question here is if there is this windfall effect of, you know, getting rid of get rid of zoning restrictions to, you know, land plots in a city. Why are there NIMBYs like if there's 100,000? If so, if you want a piece of property, there is this big winner. effect? Do people just like really, really value keeping their neighborhood the same to the tune of like hundreds of 1000s of dollars? Or is there something else going on there?

Steve Hoskins 35:09

So I view it as being two main factors. The first is, yes, absolutely a financial one, which is essentially, you know, the the West has made the main route towards retirement savings, buying property as soon as possible. And owning it while it grows in value. And then sort of using that as your retirement nest egg. Most of the middle class in the US are barely invested in, in the stock market, aside from sort of their 401, k's and things. And the strategic play that homeowners make is that they are willing to accept tighter regulation of their property, in the process of getting stricter regulation for all of the other properties in the city as well. So if I'm a homeowner, my goal is to have be allowed to build whatever the hell I want. But for nobody else to be able to build anything. Right. That's great. That's really, really great. And so I think what happens is that they, they kind of intuitively get that sense that it's better, you know, to show I'm sorry,

Lars Doucet 36:17

real quick, economically, why is that great, quote, unquote, like, why is it great for me to build but nobody else?

Steve Hoskins 36:24

Yeah, if there are sort of competing housing supply in the neighborhood, it can make it harder for you to, you know, get a good price for your property. And, you know, likewise, we did talk about some of the negative effects of shading and, you know, congestion, a lot of them, I think, are really wedded to their access to their on street parking and not wanting the roads to be clogged as well. So it's that, you know, I don't want the neighboring properties to throw that many more people in there, that will be sort of essentially competing with with my property. So I think that there is that financial part happening there. But I think that there is also indeed a quite a strong, intuitive connection to the way that one's neighborhood is at the very moment, at the moment, you know, and not wanting to see it change drastically. There's some classism, and some racism as well, you know, if we allow denser types of housing, the type of people that will be in those are lower income, and darker skinned. And, you know, in the case of the US, at least, you know, there's this strong reaction to that from your kind of white homeowner, especially in the suburbs, you know, we've had white flight and things like that in the past. So I think it's a little bit of finance, and a little bit of kind of cultural attachment to place.

Lars Doucet 37:52

One question I sort of have is one of the arguments also with regards to amenity for zoning is if you ever talked about zoning reform, people always bring up OC you want to be able to build a nuclear power plant right next door, or, Oh, you want to be able to build a slaughterhouse in my neighborhood? I mean, I'm just going to just flag my own opinion here. I mean, that seems to me like a bad faith argument. Because slaughterhouses a nuclear power plants and industrial coal plants in residential neighborhoods have nothing to do with density, or height limits or setbacks, which is mostly what municipal zoning goes for, right? Aren't there these things called nuisance laws, which are entirely parallel to zoning that deal with like building glue factories in the middle of a sleepy suburb?

Steve Hoskins 38:38

Yeah, that's exactly right. And this is where the MBAs are bang on the money. And Nolan gray is just terrific with this and has built arbitrary lines where we do need to regulate some of those externalities. But it's just so much more efficient to do it with, you know, direct regulation of those nuisances, rather than sort of trying to circle our way around to it by controlling density. So if we're worried about noise, we can put noise ordinances in place, and we can, you know, talk to people in the area about, you know, what is a suitable type of noise and what isn't. I mean, and this is, this is, it's not even done very well with zoning. Because, you know, if you live in the suburbs, think how often you get woken up at 8am, on your Saturday morning, sleeping by the neighbor with the, you know, the lawnmower, or the neighbors, you know, teenagers, kids having a very loud party, like, we can deal with these things by, you know, calling the noise, noise control, or whatever you guys call it over there, and directly regulating the externalities there. And I think I think Nolan also talks a little bit about having, you know, mechanisms of arbitrage in place where, say, you know, someone wants to open a bar in the neighborhood, they may be able to sort of to buy the right to that activity from the neighbors, you know, and have some kind of sort of tradable permits for some of those activities as well. But I'm not as informed on those on the mechanisms of those.

Lars Doucet 40:08

One thing I would like to talk about, you know, talking a little bit more about practical stuff, like, okay, let's say you have a place with an active VMB movement. And let's say you succeed in convincing them that they need Georgia ism as well, because they're not going to be able to like solve the housing crisis and all the other things they want to do, just by up zoning, they also need to have Georgia's policies to make sure that, you know, these windfall gains from upzoning, don't just get privately captured and just create these like mal incentive effects to therefore go out and land speculate. Let's say you build a coalition that's like, yes, let's do this. What in your mind is a practical policy proposal that works within the existing system to get us there? You know, with the minimal revolution necessary?

Steve Hoskins 40:55

It's a great question, I am, my instinct is to go to the land value tax, but I think I should tap the brakes on that, because I think that's a very difficult political battle. And so they should be fighting it. And, and it's a really, really important part of, I've actually empowering UMB and making it so much more successful. And I'd like to talk about how it does that. But I think if we were talking, you know, brass tacks. Practical Approach, I think that the windfall capture policy that I think Cameron probably talked to you about, and Australia has had some success with is actually the better pairing with observing. So basically, what you do is, you know, you do say, to the public that we're going to do this upzoning, because our cities need to be made so much more efficient, and we need to allow people to live in the locations they want to. But in order to prevent that, from being just a massive, you know, handout to land bankers, we pair it with a tax, that catches the uplift in the value of those properties as a result of the of the change in zoning. So this is kind of called collectively called value capture or value uplift capture. It's been done a little bit with, you know, public investment in transit and things as well, where, you know, the value of properties near the train stations, gets raised by the access to the transit, and those owners also have to sort of pay pay society, compensate society for that privilege. So by pairing up zoning with a windfall capture, it's a really good way of saying, you know, look, we and these are not just, you know, tools of land speculators, we really want our cities to be better. And we want the funding of our cities to come from the value that we're creating with our zoning, and the pairing of of the zoning with the windfall capture is a really, really like sort of nice way of doing that and getting some George's ideas on the table as

Lars Doucet 42:57

well. Is that what's been called a land value increment tax. Yeah,

Steve Hoskins 43:01

same idea. Yep. Okay, well, so

Lars Doucet 43:03

here's another thing, like, here's another practical policy proposal that I've heard, various cities float, such as the city of Detroit, and others is a split rate property tax. So instead of going maximum full Georgist, overnight, where we're just taxing the land, that 100% of its annual rental value, is not the same as 100% of the value you pay for it just, you know, the the income it's capable of generating, essentially, is to instead take the existing property tax regime we have and reform it, basically, allow local municipalities to charge a different percentage or millage, I guess, is that is the term rate on either the buildings or on the land and have those be separately, you know, so you could move the building tax down and the land tax up, but still collect the same amount of dollars overall, you're basically just shifting where the tax burden goes. Can you talk a little bit about what the effects of a proposal like that would be and what you think of the practicalities of it in terms of political difficulty?

Steve Hoskins 44:08

Yeah, that's that's a really great one to raise. Because I actually think that's one of the most politically viable routes to Woods sort of a more Georgia's future that we have, the best way to sell it is to make it really, really clear that we're not talking about raising property taxes overall. All we want to do is reduce the proportion that comes out of the building and and raise the proportion that comes just from the land value underneath it. I think it's very saleable to property owners, which is desirable because it's a big political hill to climb. Because the people that end up paying that kind of transition, the most are the people who have been sort of hoarding land for speculative purposes. Often this is kind of the owners of, of, you know, blighted car parking, or vacant spaces in the center of Have thriving cities. You know, often this is in the commercial district where there could be so many more businesses and things or apartment buildings. And they're just kind of holding on to it and making, you know, like 10x on their return and 10 years in the case of Phoenix and one study. And, and during that transition, it raises the overall taxes paid by those property owners, and it tends to reduce the tax burden on the vast majority of homeowners. That's certainly the case in the studies on Detroit. Yeah, so it's kind of a benefit for the median voter. And then there's this kind of secondary set of effects, which is that, yeah, it's kind of changes the strategic behavior that people participate in with land, and it encourages much more development of properties, right, because you're not punishing someone for building, you're punishing them for holding the land. And they get actually rewarded with more more and more profit when they build more intensely on their sites. So that's a really good route to it. And that actually leads really nicely into talking about sort of my kind of three main pathways for why you can be being a yimby is not enough. And you should also be a Georgist. Is it okay, if I kind of step you through those, those three points, because this is where I really want the members in the audience to listen up. And and, you know, come to terms with the fact that you've got to be a GA to me.

Will Jarvis 46:25

Yeah. Could you could you also perhaps just it's all the GA as well after you why they should be MVS after that,

Steve Hoskins 46:31

I think they'd be great. Yeah, yeah, that's, that's, that's a really good way of doing it. Yeah, let's actually do the Georgist. First, because I've been quite harsh on the NBS. And it's important that the Georgist in the crowd listen up. So like, zoning is really, really harming the both of the efficiency of our cities, and just the kind of lively liveliness of them, right? It's restricting what people are building in the most desirable locations, it's preventing the density that we have in the center of those cities. And we know that density of people leads to what we call agglomeration economies, which is that people closer together, they learn more from each other, they have lower transaction costs between each other, they upskill a lot faster, wages are higher, as a result of all of this, you get more innovation, those innovations benefit everybody, as the economy grows, those more intensive types of housing are much more lenient on the environment. When you have shared walls, and shorter commutes, you're consuming a lot less carbon. So that's a really essential plank of our, of our tackling of, of climate change. It helps with racial and, and wealth inequality in general, by enabling more people who have been priced out of these center, those centers and pushed, you know, out of San Francisco to some of the sort of second tier cities. It allows them to move into these cities a lot more. And so you know, there's a lot more kind of upward mobility for people that have been priced out. And, and it creates sort of more households who have a smaller vested interest in preserving land values at all times, because they are, you know, tenants in the city center, they own a condo, so they're not quite as like tied to this big, you know, quarter acre plot in the suburbs. They're less worried about land as their sort of retirement nest egg. So that's the why the GA is should be in these as well. For why the young bees must also be GA lists. I think we got to talk about sort of these three sort of George's critiques of nimbyism that I have, actually, I've mostly stolen them from cameras to be honest with you can remarry. And why land value tax or land value capture solves that. So we've talked about, you know, the profit effect of upzoning is just a windfall handout to the owners of land and those desirable locations. And this is why human beings often get called sort of shills for the developers, because it is the case that, you know, that that policy going in place, hands a lot of value to those, basically developers, but I think it's just landowners. And land value tax captures that windfall means that whatever the regulation does to the spatial distribution of land rents, those you know, the landowners that benefit from the regulation are compensating society for it. And by sort of pricing, the constant annual holding of that land, we actually turn those developer land bankers back into developers, which is what we want them to be. So that's the first one. The second one, which is that, you know, speculation on land value, can actually really reduce the supply effects of up zoning. So for up zoning to flow through the lower house prices and the envy argument, you have to deregulate and that deregulation has to lead to a boost in the supply of dwellings. But Cameron Murray shows and there's there's a couple of other sort of surrounding papers Is that explore the the time decision that that landowners have to make, basically shows that, you know, even if you upzoning, this land, it won't necessarily bring forward the point in time when the landowner chooses to develop, right, because they instantly get the windfall gain. And now they're holding on to this desirable land, but they're still looking at, you know, what's happening with house prices, what the neighboring developments are doing, and they're sort of thinking to themselves, like, it might not be optimal to build right now, it might be better for me to wait a few years, wait for land values to rise, you know, then I can build even more intensively. And, and, you know, get even more value out of my land in the future point in time.

Lars Doucet 50:47

So what you're saying is that you want to take the whole, yeah, so when you talk about like time preference, that's kind of a nerdy economic jargon. So like to make that concrete, make sure I understand. When I'm selling a house, now, I'm profiting off of two things, people's desire to live in that house, and people's desire to live in that location. And the value of that location goes up and down with the housing market, you want to take the fluctuation in that value, or in the especially if it increases in the long term out of the question. You want to make it so that it's like, Hey, you want to provide a house to the market? Provide a house to the market? Not, you know, oh, like, you know, like, like, how, how high can I ride the wave of increasing house prices, which is really increasing land prices, before I finally break ground and just build something. Like, that's essentially what you're saying? That's exactly

Steve Hoskins 51:38

right. And it, it just changes their calculus, you know, because they're often just sitting there thinking like, well, I could develop, or I could just sit here and take very, very little risk, and just wait and keep earning, you know, you know, these profits from from the location value rising, and maybe I'll develop one day, but I don't really need to. And this is really the driver of, of both vacant lots in a lot of thriving city centers. But also just kind of what I call speculative under use, which is where like, there's locations that are zoned for intensity, you know, they definitely would be profitable to redevelop it into a taller building. But I'm just gonna wait a little bit longer, I'm gonna wait a little bit longer. And the sort of outcome of all those decisions is that the ABS zoning might not necessarily translate into an increase in the net number of dwellings being built, it might change the location, I think it does change the location. And we've got studies on that, you know, in Auckland, for example. But it might not boost the actual overall number of houses being supplied each year. And land value tax by placing a sort of constant price on land ownership punishes that kind of speculative delay, and forces landowners to actually develop their properties for the most efficient use as soon as possible. And then benefits all of us specifically

Lars Doucet 53:01

because whatever increase in land price I'm going to get is going to be taxed away. So yeah, it's it's

Steve Hoskins 53:08

flattening that it is flattening that kind of pattern over time. But it's also just placing a full scope, we call it the full opportunity cost, basically, the full price of that land in terms of what it could be providing to society, each year has to be paid by the landowner, whereas currently, they pay a just a tiny, minuscule proportion of that,

Lars Doucet 53:28

and it's sort of like internalizing that externality, right. It's like, it's like, if I'm, you know, to, to analogize it, like if I'm in if I'm in, you know, a nursery school, and I'm a kid, and there's 10 toys, and I grabbed the cool toy, and I'm not even playing with it. Every other child is suffering the opportunity cost of not being able to play with the cool toy, and I'm not even necessarily realizing the benefit of it. Right? That's what you're talking about. So like with with the land price, it's like I am sitting on this property people right now over the 10 years I'm holding it could have been providing society with whatever benefit could be realized there. And I am not paying that cost. I'm not paying that opportunity cost I'm inflicting on society, by just holding it and just owning it, because I know the price is gonna go up. Yeah,

Steve Hoskins 54:15

exactly. And that to return to sort of what we said at the start in your toy example, if people engage in that pattern of behavior with with capital things that have been produced, like toys, well, the toy is depreciating over time, which is you know, one of the ways that you don't want to just hold it out of use, but also someone else can make more toys. And so the child that's, you know, feeling sad because they don't have access to a toy. Well, they can take their pocket money and they can they can buy a new one and someone is going to be like, Okay, I'll make a new toy for you. But with land that can't happen, right, that desirable land in these city centers that could be used for this, you know, absolute powerhouse of production and consumption that we have in our cities. Nobody can sort of create more in a result But being used that way. So that speculative holding of land out of use makes us all materially poorer. For the most valuable natural resource that we have, you know, which is that we have to use this land to

Lars Doucet 55:10

write Yeah, and depreciation is a good point, because it's like in the toy example, it's like, I better play with this toy before. It like gets broken or worn out, like, well, while the getting's good, I better eat this fruit while it's still right, you know, but no, such pressure exists like that for land. So that's really interesting. Exactly. And

Steve Hoskins 55:29

it's almost the opposite, right? Because it just just goes up as you know, as GDP grows and society becomes more prosperous, it's it tends to drift upwards.

Lars Doucet 55:36

Like this is the classic economic problem of deflationary assets, like the whole babysitters Co Op model, we won't we won't go off on that tangent where like, everyone just hoards the thing, because they're all just waiting for it to go up. And so economic productivity goes down. So let's talk about some other things like. So we've made the case for why yimby should be Georgia some way Georgia should be MBs. We've talked about like, the practical policies we can do about it. So one of the things is there's also the whole talking about just the things that surround the housing crisis discourse, like public housing, you sometimes have people who call themselves FIM B's, you know, public housing in my backyard, and they're like, Okay, well, I oppose this and such housing project, because it needs to have more affordable housing and affordable housing, like trademark means, like rent controls in practice. Right? So can you talk a little bit about the whole, like, push for affordable housing, you know, which arguments are made in good faith and which ones are made in bad faith? And how that slots into this whole? This whole? You know, pie?

Steve Hoskins 56:45

Yeah, this is a near and dear issue for me, because I, I get really frustrated with kind of the left urbanist movement because I feel like they should be massive allies of both yimby and Georgia ism. But so often, we sort of seem to be at odds and arguing with each other. And, you know, instead of going after the rentier landowners, there's a lot of squabbling about the best policy for fixing our cities. So we've talked about Yes, and my perspective with a lot of these policies is that it's yes, and so, to go with the SMBs, that public housing in my backyard, I really like public housing, I think that there are some, you know, in the ENB movement, who really just want private supply all the time, but I think public housing has a couple of really useful roles to play. The first is that in, you know, in a private marketplace of housing supply, there's this really strong cyclical pattern of supply, which is that, you know, when prices are going up during their, you know, boom, kind of periods, everybody sort of rushes to supply houses to the market to get, you know, sell them at the top of that peak. But when we, you know, have a big crash, like we did in the GFC. And like, I think we're due for a couple of years. Again, that construction just collapses, right, prices are declining. You know, a lot of developers are like, oh, you know, let's, let's not do this, right now, we don't want to be selling at the depth. And just construction just gets paired right back. And so I think that public housing, can do a really good job of coming in, in those downturns, picking up a lot of the sort of loose capacity for construction. You know, the builders and the architects and the, you know, even some of the developers, and put those to work building public housing. So there's a really useful counter cyclical approach for public housing, that can ensure that we keep getting housing supply, you know, in our cities. And then the second side of it is, it's a really important mechanism for ensuring that we don't just allow our cities to like completely sawed themselves, so that the wealthiest people are all in the most desirable locations. And the poorest people are all in the less desirable location. So it's kind of an inequality and an equity side. By providing public housing with, you know, all or I prefer, sort of part of it to be offered at subsidized rates to people, you know, below certain levels of income, we can ensure that our neighborhoods have a mix of people from the socio economic spectrum, which is great for kind of building connections across the class divide and enabling upward mobility. It's a useful tool for preventing people from getting displaced from their neighborhoods, when you know, developers start going crazy and pushing people out and redeveloping public housing can ensure that there is affordable housing in those neighborhoods for people that have a really strong connection to the place. And it also actually is a really good mechanism for capturing land value, location value, and redistributing To get to other parts of the income spectrum. And I think Georgia should appreciate that value of public housing as well. So it's a yes. And private supply, good. Public housing supply also really good. And I really don't like it when people use their preference for one or the other as an argument against the other one, because I think that is just really wasted effort that we could all use, you know, spend supporting each other.

Lars Doucet 1:00:26

Okay, so let's talk about gentrification, the G word. You know, this is something that it touches on issues of race and everything. This can be like a really thorny thing, because it's like, I mean, let me just put it bluntly, like when white people move out of an area, it's called white flight. And then when they move into an area, it's called gentrification. But then at the same time, it really sucks. If you've lived in a neighborhood for a long time, and you're a racial minority, or you're poor, or you know, in any way, like unrepresented, and you have your own little neighborhood, and a bunch of rich yuppies come in, they bid up the prices of all the housing. And now the place you've had, you've lived in for 20 years, like your price out of your own place, and you gotta go somewhere else, that's probably worse than where you were before. And that feels bad man. So like, I get, like, both kind of understandings of this, but it also like, sometimes seems to perversely cash out to, we should not improve poor minority neighborhoods, because that's bad. And that's violence. And how do you how do you cut that Gordian knot? You know, how do you how do you solve gentrification?

Steve Hoskins 1:01:30

Yeah, it's a really difficult piece of discourse to have. I think everybody has, well, most people have quite good intentions, but it plays out in some really awful way. So to go back to basics, in terms of spatial equilibrium. Unfortunately, if you are allocating land using a market, anytime you improve an area relative to other locations, you will see the price of rents in their area rise. So if you are really wedded to anti gentrification efforts, that is going to mean that you essentially have to oppose anything that can ever improve, you know, the desirability of the neighborhoods where low income or minorities live. And I think that's an untenable approach. Because while it might look like you're, you know, doing good by keeping the white, white collar work, you know, tech workers out of these low income neighborhoods, it also extends sometimes into arguments that, you know, we shouldn't invest in transit in these places. You know, or, I mean, I haven't seen this, but it can even go to the point of anything that kind of reduces crime or cleans up those neighborhoods, you know, it gets rid of litter, or whatever. It also shows up in, in higher land rents. So I don't think that we can take this approach, you know, of, we can't ever improve the neighborhoods where low income folks live, you want to say something?

Lars Doucet 1:03:01

Yeah, because that also, that also seems to imply that like, the root issue is the rising land rents, right, the rising house prices, the amenity effect that you got into? Right, you know, you increase the amenity of the neighborhood, people are willing to pay more for it. And then on the topic of market things, it's like, I'm a little skeptical that you can allocate housing. Without a market, I think if you try to go with non market solutions, you wind up with hidden market solutions, like in the Soviet era, you know, housing was allocated effectively by the state. And so it was like, okay, there wasn't a formal free market, but there was a black market, you know, have connections and slide deals and stuff. And it's like, Oh, if you're out with the current political insiders, like, Well, maybe you don't get to get a good apartment, that just increases the non monetary costs, you know, and so like, the good apartment, like had a higher cost in terms of connections and favors, and, and distance to, you know, the people who make those allocation decisions, but so like, it seems like the root cause is the rising land rents, and, you know, these these kind of so so is your position that solving those root causes, through, you know, your proposals for your yimby Georgia's synthesis, we'll get at those root issues so that we can improve, you know, low income neighborhoods without committing them to, you know, ever rising rents that are gonna push their own residents out, or is there more to the picture?

Steve Hoskins 1:04:28

Yeah. This is this is a great topic. I haven't sort of formalized my thoughts on this much yet. But I often go to war with the lefties on Twitter. Trying to sort of explain my perspective on I think that we could actually get a Eunbi Georgist leftist synthesis going. And here's some of the ways that I think we can get towards that. So I think that the left is are coming from a really good place in terms of They're concerned about people being priced out of their neighborhoods, I think that that's, you know, well intentioned, some of them. But the solutions that they tend to go towards are, you know, are either they try and look for mechanisms where we sort of won't have market based land rents anymore, right, let's not allocate location using a market. Let's instead have, you know, fully public housing, where we democratically decide on who gets to live where. And, you know, we might use I don't know, you know, means testing or something like that, to decide on exactly who goes where. That's one approach. And then the other approach I've seen is to sort of abolish the idea of there being locations that are better than other locations. So it's kind of like, well, why did why is it that the city center is the is the best place, we should make sure that everywhere has great infrastructure, you know, has street beautification efforts has access to jobs, you know, has walkable neighborhoods that, you know, let's make everywhere the same. And that way, they won't be these land rents, kind of sorting locations. And I think neither of those actually work. Like you said, I think if you abolish market rents, and you try and do it another way, I think it's just really, really hard to do. Just doing, you know, just voting on every location decision of every person, I think, is not viable. And even if you're voting, you have the problem of like, locals voting against their interests and against the interests of other people,

Lars Doucet 1:06:34

people paying people to vote, right? I mean, it feels like trying to abolish gravity. It's like, the press by gravity every day, that I'm gaining weight, you know, but it's like, I have to live with that fact. Rather than try it try to like, yeah,

Steve Hoskins 1:06:49

yeah. And if you, if you are completely sort of abolishing land rents as the way of allocating people, so you know, a house costs about the same in different places, you're just gonna get massive amounts of demand to live in places with shorter commutes. And, you know, so you have everybody basically saying, Yeah, I would love to live in a, you know, two bedroom apartment in the center of Manhattan, for the, you know, the established rent that the government offers to everybody. And then, you know, you have to just build like, infinitely into the sky to try and meet that. And I think that the costs of building like that kind of density, are often sort of not worth it from a social perspective.

Lars Doucet 1:07:33

Well, that's interesting. A really quick segue is to the question of density. So I've heard this theory that some people oppose the MB ism, because it's like, what you just oppose Georgia ism, where they're like, Okay, what you, you just want to pave the earth, you just want to build skyscrapers everywhere. And I've heard that actually, having buildings that are too massively tall, is actually itself a form of sprawl that is caused by artificial scared, like artificial Lee increased scarcity in lands, and the ability to develop land. So I was wondering if you could, if you could talk about that?

Steve Hoskins 1:08:10

Yeah, um, the, I think the way that that shows up, is you get a lot of very thin, but very, very tall buildings. In a lot of places, I think Manhattan has this problem with a lot of kind of luxury apartments. And I think that's usually a product of led us regulation, right, which basically, like it's preventing a lot of stuff from being built in other locations. And then on a specific site, it says, you know, look, you're only allowed to have a floor area ratio of, like, let's say, six, and you can only cover a third of the land with with paved surface. And so the only solution to that kind of regulation to sort of use the plot, you know, to get the profit that you want out of the plot, is to just build this like really skinny building, and then throw it up as tall as you possibly can before you hit the floor area ratio limits. So I do think that, you know, if we allowed a lot more of what people want in different locations, and we were using a land tax to sort of price optimal development, I think we would see a much smoother gradient of type of dwelling. And I think we'd get a lot more of kind of the medium density, you know, three to seven kind of story. In a lot of cases, walk up apartments that we see and people really love and a lot of Europe. I'm looking at one

Lars Doucet 1:09:30

right now. So I imagine it is kind of like if you take a glob of playdough, and you say that the volume of that playdough is the demand for housing in an area, right? And then you take a plate with just a couple of holes in it downtown, and it's like got this really shallow, and then you push it onto the playdough. What's gonna happen is it's going to push the PLATO out, which is horizontal sprawl, just all the way out sprawling, sprawling suburbs, and then in the city center, you're gonna get these little towers of Plato just like Just extruding out as high as they can go, right. So you're getting horizontal and vertical sprawl, rather than, you know, like reasonably tall buildings, but not massively tall. And then a city that's relatively fairly compact, which means it's more walkable, it takes less time to commute, which means it takes less gasoline, which means it's more environmentally friendly, which means you're closer to your friends. So you're less depressed when you're a kid, and you need your mom to drive you 30 minutes to an hour and a half every time you want to just like, play, you know, is that kind of the argument that you're making about horizontal and vertical sprawl?

Steve Hoskins 1:10:36

Yeah, exactly. And it actually sort of guides back to the topic of gentrification as well, which is that the only projects that kind of managed to squeeze through the holes in the playdough example, are, are sort of going to be targeted at the luxury end of the market, right. Because if you're only allowed to build in a few locations, well, you're going to want to sell to the really high, you know, high income, high value people. value in terms of what they're willing to pay. So, you know, I think that in many cases, it's it's because of our strict land use regulation, that the only types of things that get built when you up zone are, you know, what they call luxury luxury apartments. But I think if we had a system with a lot less regulation, and a lot more actual competition, in terms of what people were building, through, you know, land value taxes, impact on on on supply, you would get a much more diverse range of housing being built in different neighborhoods, you would want to be targeting different segments of that market a lot more in the same way that we see, you know, in like a market for cars, right? You don't just build luxury cars. Yeah, so I think by dealing by this sort of anti competitive aspects of both land speculation and land use regulation, we can get a much more diverse type of housing supply to different types of people in different places.

Lars Doucet 1:11:58

Okay, so one more thing I want to ask about, and then we'll move on to the conclusion is, first of all, I want to flag that we read your thesis, and we were really impressed with your work. So just to kind of disclose for the audience here. We're actually working with Steven Hoskins on a grant project that will and I wrote together, which was, you know, I wrote that series on astral Codex 10, about GA ism, we later got a grant from astral Codex tend to do land value assessments. And we'd like to work so much that we we want we're actively collaborating with you right now. I can you talk a little bit about your work on this assessment project, and what its goals are and how it links in with all of the ideas you've just talked about today?

Steve Hoskins 1:12:39

Yeah, so one of the big critiques that we get, as Georgia says, is, you can't value the land, you can't value land value, separately from the buildings. When you buy a property, it's a house, and it's the land underneath it. And, you know, it's a practical argument, oh, we can never do Georgia ism. Oh, that's unfortunate, because we can't accurately value the land. So I have never actually found that argument. Very interesting. Because in all of New Zealand, and all of Australia, we have separately valued land and improvements for the better part of the last century. And nobody complains about it, it's not a big deal. You know, there's, there's a company that gets paid by municipalities to do it. And homeowners know what their, what their taxes are, and are fine with it. So the modeling, you know, has has been done in places and unsatisfying, but in the US, I think you have a really mismatched kind of system of land use regulation, it's basically done at the municipality level, in every different city, and even your metropolitan areas are fractured into lots of different cities. And so, yeah, in terms of getting standardized property assessments, it's not been done very well. And because it's property tax, it's taxing both the House and the land underneath it. I think people, you know, really dislike being taxed for their family home. So they also kind of have this real gut kind of feeling against property taxation. So I think that what you know, what we're doing is to take the land valuation methodologies that you know, exist in the economic literature in the valuation literature and are applied in several countries as well. And putting them to work on models that we're going to, you know, make open source, the methodology will be really available to people. There'll be different models, you know, side by side so people can see, you know, that the values aren't that different and that separately value both the land and the building portion of a property using a real combination of sort of economic and valuers and deep learning AI techniques. to just show that it can be done separately, you don't always need to have a ton of vacant land sales to get really, you know, safe estimates of the land value. And indeed, that the land value like moves quite smoothly over space, right? Because location is not changing that much as you move from property to property. And that most of the like, real crazy variation is in the house and the building. And that's actually the one that's really hard to assess. Because, you know, they depreciate, they have different typologies, and, you know, different ages, and it's quite hard to observe the interior state of a lot of dwellings, but the land value portion, I'm convinced can be valued, you know, very easily. And once in place, I don't think the public will have a have a problem with it.

Lars Doucet 1:15:45

So it's interesting, because like, the standard way to value land, and building separately is what's called the cost approach, where you take, it's like, okay, we know the whole parcel sold for x. So let's go punch all of the characteristics of the building into what effectively is a Kelley Blue Book, but for buildings instead of cars, and out pops a value, okay? It's 15 years old, apply depreciation, that's the cost to build the house minus depreciation, subtract that from x, the total sell price of the parcel, that's the land value. And you're saying we should do the opposite, that it's easier to look at all the land characteristics and the patterns of of people's willingness to buy, oh, you're willing to pay $2 million for this property. And right next to it is one that you've paid 2.3 million, the land characteristics are the same, but there's a little building on this one, you know, you think it's easier to basically use your model to basically predict the land prices. And if you want to get the building, you subtract the land price that your model has guessed directly, to get the building as a residual rather than the opposite.

Steve Hoskins 1:16:45

Yeah, and the particular problem with the cost approach is that in the case, where you have a land parcel with, let's say, a standalone house on it, which is the case in a lot of of America, but you know, if that if that property was up, zoned and sort of was, was taxed in a way that nudged it to be developed in the most optimal way, you would actually build something completely different. What happens with those properties is that the value of the house is actually not that important, when you're buying it, the market value of the property is way more tied to like what you could feasibly put on there. You know, if you redeveloped, so we talked about this with the profit approach, right? Like when you rezone a standalone house, it zips up and value instantly. The cost approach doesn't capture that at all right? Because, you know, from their perspective, that's like, what we buy a piece of land and the house cost this much to build.

Lars Doucet 1:17:42

So it's like it's conflating cost with price, it's conflating the cost it takes you to make something versus what someone actually will pay you for in the market. Like maybe it costs you this much to make that house 10 years ago, but the value today isn't 10 years of depreciation minus that cost. It's the market value of that building, which could be very different, because maybe I want to build apartments there instead.

Steve Hoskins 1:18:04

Yeah, exactly. And so you know, valuation methods that account for what the zoning sort of allows you to build on the property is really, really important to reflect this idea that, you know, when you buy a property, a lot of what you're buying is, you know, the ability to develop on it at a future date, or to sell it to somebody, you know, to develop at a future date. And actually, like, you know, the value of the house that's there at the moment, in places that are sort of underdeveloped relative to the market is not that not that important, because it's quite cheap to demolish. And what you're really interested in is like, how profitable would be the thing that you'd like to redevelop on there and a really competitive and efficient housing market? Okay, well,

Lars Doucet 1:18:50

we've gotten quite long. So let's wrap it up. Now, if you could summarize your key points, and then kind of wrap a bow on on with any kind of concluding remark that you really think is necessary to tie it all together?

Steve Hoskins 1:19:01

Yeah, sure. So I think to put a bow on the gentrification conversation, I'll just say that, you know, we do need to be putting policies in place to enable its low income people and its tenants who sort of don't have any mechanism to protect themselves against rising land rents in a place. We need to have some policies in place to smooth that transition for them, enable them to enjoy the benefits of that location as it changes. And, and yeah, so that they're not sort of disoriented by this really rapid change in, in the nature of their neighborhood. So I think there is a role for some rent stabilization type of policies to you know, prevent, you know, massive increases in rent from being used to push people out. Public Housing can do really well for that. housing vouchers are really useful for you know, the, the poor tenanted segment of the population to be able to afford these desires. But locations, and then all sorts of stuff around, you know, providing legal aid to tenants having a register of landlords that are kind of engaging in dodgy practices, there's right to return which says, you know, if you get pushed out so your property is going to be redeveloped, you get first first dibs on, you know, the next property is there or you have to get paid out to leave. Those are really important. And I think that, that the left urbanists are right about a lot of that and geologists and human beings should pair up with them to to be helping with those anti displacement efforts as well. Did you want to say something about that before I move to the

Lars Doucet 1:20:38

end? Yeah, well, no, it's just it's just kind of funny, like thinking about like, some of these line policy things like right of return is like, pretty ancient, like you find it in the Old Testament. You know, it's, there's a form of it in Norwegian Viking era law, it's the oldest law in Norway, the right of Udo, which is like, basically a way to keep land out of the hands of foreign invaders over the course of 1000 years. And things like that. So So it's interesting that like, some of these these like land policies and ideas actually go go go quite a long way back. And then like the right to Rome, yeah, I was gonna say which, which is like, which, which some countries have more than others, like Norway, you're allowed to travel across uncultivated land, you know, this kind of notion that like the Earth really, in a sense belongs to all of us.

Steve Hoskins 1:21:24

Yeah, that's exactly right. And so that actually fits really nicely into the Georgia's perspectives, right, which is that I think that in a lot of our cultures for, you know, centuries or 1000s of years, we have intuitively understood that land is, you know, given to us by nature, that we all have a shared interest in, in the value that that land creates. And so the Georgia's prescription of you know, making sure that that land value gets enjoyed by everyone in society through land value taxation, or windfall gain. Capture is really important and I think fits with what a lot of people would intuitively understand if we kind of hadn't done this rentier capitalist approach to private home ownership over the last century.

Lars Doucet 1:22:12

Okay, so basically, your thesis is the MBAs and the GA should be friends. And that yimby ism is complete without Georgia ism. And Georgia ism is incomplete without nimbyism. So I'm Steven, where can people find you? Read more about what you're doing. Following online, just just be more familiar with your work?

Steve Hoskins 1:22:30

Yeah, so I am on Twitter at Georgist Steve and you'll find my profile with the cringy laser eyes on there. I write for a Georgist substack called progress and poverty substack or p&p substack. Google will get you to that I am involved with with your project with land as a big deal.com. And we're going to be you know, publishing materials as we develop our models there. And through my Twitter account, they can also find my, my sort of notion homepage where I have a collection of notes from Urbanus books, collections of kind of research ideas that I think that geologists should be pursuing. And in a collection of writings as well.

Lars Doucet 1:23:23

Great. Well, thank you so much, Steve, and we'll include links to all that stuff, you know, in all the places that we post this podcast,

Steve Hoskins 1:23:28

I really want to emphasize, you know, that I I think that all of us interested in urban issues, should be allying with each other and the left urbanists and the MPs and the Georgist I think should all be propping up each other's policy approaches to push for efficient and equitable housing markets as soon as we can get it and and to push back against the sort of the rentier capitalist landowning class.

Lars Doucet 1:23:54

Thanks for coming on. I think it's been a really great conversation really wide ranging and really in depth.

Steve Hoskins 1:23:58

Yeah, thanks so much for having me Lazar.

William Jarvis 1:24:04

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:Will Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:37

Well, man, how are you doing this afternoon?

Minn Kim 0:39

I'm doing great. Thanks for having me. Well, I'm really excited to be here.

Will Jarvis 0:43

Absolutely. Thanks so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Minn Kim 0:51

Sure. Let's see. My name is Minn. I am an early stage investor. I've been an early stage investor and venture for the last four and a half years or so primarily focused on what I call critical industry development. And so I've been backing founders transforming industries across like shipping and logistics, aerospace manufacturing AI, first at a firm called bluebird beta, which is early stage like $75 million, pre seed and seed stage firm. And then most recently launched an accelerator at a company called ondeck. That does, that looks for the most talented, ambitious people all around the globe, and best helps them start companies. I often think of it as what do I like investing in building people building at the intersection of Bits and Atoms, right? Software is kind of magical. We all most of us probably grew up on the internet, like our generation. But we do live in the physical world. And then big ideas. Oh, gosh, so many. But let's see a couple other things that are probably been really top of mind for me lately. Immigration and talent, attracting and retaining the very best minds for the US. I think it is not just a good thing to do, but actually of national interest and importance that we maintain technological leadership and economic competitiveness by making sure that the very best minds want to come here. Right and stay here. More importantly, along that line, I think there's a thread around how do you encourage people to have higher ambitions? I see that a lot with early stage entrepreneurs, and people who are thinking about starting their next thing, how do you create an environment that encourages them to actually think bigger? Because I think that is what pushes progress, industrial progress on that thread. There's so much we can talk about which we can dive into over the next like, you know, 3045 minutes. But there's a ton of energy and policy changes that I think make right now a really exciting time to be building and investing in things like biotech, climate, energy, advanced manufacturing, longevity, women's health. So many of these areas, again, that kind of intersect between the Bits and Atoms. And I've been calling that I've been referring to it as industrial progress. I think there's a couple different names for it American dynamism, national. An AF, there's like a couple of other ways of describing it. But all of that I think, is pointing towards this return to investing in like what makes America great. And then just one other. One other thing is like thinking machines, I spent a long time looking into machine intelligence and AI. And I think there is a really unique opportunity right now where there's a tremendous amount of really interesting research and commercialization happening on how we'll interact with our digital products in the near future.

Will Jarvis 3:41

I love that a lot. No, that's great. That's great. I love that it's a great breadth there. I want to double click on ambition a little bit first, because you said some interesting things there. What can you do to raise the ambition of an individual? Is it putting them in environment with other ambitious individuals? Is that just telling them it's possible? Is it you know, coaching the set, go read these books? How do you think about that? And how do you raise the ambition of people in the early stages of starting companies?

Minn Kim 4:08

Amazing. I think there's a couple of different ways. I'm a really big, I have a tremendous amount of respect and admiration for the work that Daniel gross and Tyler Cowen have done over the last several years. Daniel is the co founder or the founder of a company called pioneer, where I think a lot of his hypothesis was how do you find really, really entrepreneurial, wonky, talented people from all around the globe, put them into a digital environment. And so he, I think he's an immigrant from Israel. If he's listening, please correct me. But, you know, he was solving I think, his own problem of how do you he came from, you know, abroad to the states and found this community of people that were really ambitious, and therefore expanded the notion of what was possible. And I think that's a consistent theme around how do you put yourself in an environment so I totally think that's players in the world. But I also think there's something to be said about models. I think when you can see someone else who feels like you, but maybe one or two steps ahead, it makes the it makes the, it makes whatever you want to do next, like much more attainable, achievable, right. And it's a little bit different than having like celebrities, which is like, like one step more removed, where sure you can have like role models on television or movies that make you excited and make it feel possible. But I think there's something a little bit more grounded where yeah, if you know, like a friend of a friend who went to Harvard, and you're, you know, you grew up in like Middle America, and like, you know, in, in like a small town, and you didn't know that going to an Ivy League institution, for example, like was possible or achievable for you, having a model of somebody who had done it before, I think, makes such a big difference. So like environment, having models, and then just finding that really, like critical person who actually believes in you, right? And then that's usually the reason why people want to keep paying it forward, because somebody took a chance on you. And so there's like this interesting nexus of how do you find that person? And do you need to put yourself in a different environment to be able to find that person.

Will Jarvis 6:15

I love that. I love that. I want to move on now and talk about industrial progress. We've seen a lot of, you know, talking to discourse recently about American diamond ism, and wanting to focus on building new industrial capacity within this country, kind of reshoring a lot of what we traditionally done here. I'm curious, it seems like almost like a counter cyclical for that to be happening, because interest rates are rising. Now, it seems like capital is going to get more expensive, it feels to me like a lot of these businesses will be more capital intensive, significant more capital intensive than more traditional software businesses. Do you think that there are some headwinds that need to be overcome there? And is that just is there still enough capital available? It's not really gonna matter that much? Or do you think there will be significant headwinds to big companies in the industrial space that are trying to get spun up? Now?

Minn Kim 7:05

I mean, it is capital intensive. I think the headwinds are a little other some like, actually, they're two headwinds that I probably see as really important things to overcome. One is basic r&d. I think there is there's a trade off that America as like that we made as a country and as a world when we decided to globalize, right. And some of these things are cyclical, where and this is just happens to be, I think, one of the most globalized economies we've ever had in human history, which is why it is the way it is right now. But we made a trade off, which was great, we can, we could make trade cheaper by working with a lot of other countries outside of the US. Because we have access to cheap labor, and therefore, like offshore, a bunch of like, how we actually make the goods that we use, eat, you know, rely on now, you know, after like 3040 years of that the cost is we've forgotten how to use our hands and how to not like you and mean necessarily specifically, but like as a as like a culture that we don't know necessarily how to build things. So that's a headwind where I think there's like knowledge that was lost, that we need to actually like, retrain a lot of people, because many of the individuals who have have had this knowledge previously, are well into their 60s, right, like 50s and 60s, I started my career actually, as a data analyst working at a financial services company called Bloomberg LP. And I worked on this big r&d migration project, it was like eight months of work. And one of the things that we were trying to do is, Bloomberg serves a lot of like really high frequency trading companies and like our clients are like, you know, they're making decisions based on like Milla milliseconds of data transfer. And so it's like relatively high risk, because millions of dollars are, are at hand. But a lot of our software infrastructure was written in COBOL, which is like a programming language that like nobody really knows how to write anymore, because it was written literally by the founder, like the CTO had written this back in like, the 70s. And so, you know, things like that, where we've just forgotten how to do some of those things. I had another similar analytic related anecdote about how the New York City I used to live in New York, I currently reside in San Francisco but I'm a big fan of the MTA and I heard this story recently about how the MTA has pushed off like upgrading a lot of their transportation infrastructure because they because literally nobody knows how to like move the dials to like figure out like how how the trains work, and so they have to make this trade off at some point where okay, it will be so broken that we have to just rip the whole thing on replace it because to repair it we don't we like literally don't know how. So there's a knowledge headwind and then, like r&d headwind where I think like we're still I Having to do like basic science research into, like, how do you make like the most advanced chips? How do you do, like novel like biotech research to be able to do like genetic modifications on like our food, for example. And then labor, right, I'm sure we'll touch on that in an event too. But I think again, it kind of comes down to like, well, you can pour billions and billions of dollars into building factories, and, you know, changing making policy incentive changes, but we literally don't have enough people to do the jobs that we want them to, then we're kind of at a loss.

Will Jarvis 10:34

It's a huge, huge problem. I was in Norfolk last week, and I went past the naval shipyards up there. And you know, they just everyone has been begging for labor. But the problem is like a lot of these programs, they get cut, you know, let's say littoral combat ship with a cap that I believe there's a big example of this recently with it was one of the submarines or maybe was the littoral combat ship, I'm not sure. But they they cut all the experts, you know, the cuts program, all those people retire, they go do something else. And then you want to spin up a new ship project, and you just can't do that, because there's people they don't exist anymore. How do you think about how we solve these kind of labor issues? You mentioned? Is it more immigration? Is it? Is it more high skilled immigration? Is it better training? upskilling? What do you think that looks like?

Minn Kim 11:15

I mean, the short answer to that is like it's not one, one size fits all right, like there's no silver bullet and a panacea to solving like labor shortage issues across the country. That's the nuanced take. I thought a lot about this. at Bloomberg Beta. We were investing in what we call the future of work, I think we are we are the only venture firm to to establish that as our core thesis or the first rather. And so we've invested in lots and lots of different kinds of like Future of Work companies. You think about Code Academy, raploch masterclass, so on and so forth. And I really think that solving workforce challenges comes down to three things, you either have rescaling companies, the cost of that is that it's often it's often time intensive, and especially for the things that are not knowledge base knowledge work based to is you literally have to like grow more workers. And we happen to have a bit of a global fertility crisis on our hands. So that one's like a very long time horizon solution. And then the most tractable and most exciting to me, solution to workforce challenges is like importing, like the very best people, right, like immigration. And so, you know, we used to, I mean, the United States was literally if anybody is a fan of Hamilton literally built by immigrants, right. And so I think it's a return to like American ideals and the brutes where you want to attract and retain the very best, smartest people to come here, do research, commercialize it, build companies scale them. I am the daughter of a number of entrepreneurs, immigrant entrepreneurs. I was born in South Korea, and like we literally came here to pursue the American dream. Right. And I think it's the most tractable solution to solving a lot of our workforce challenges today.

Will Jarvis 13:05

That's great. That's great. I'm curious, do you see technological solutions to the immigration problem? It seems like the political angle is somewhat intractable and very difficult to deal with, at some level. I mean, hopefully, we'll make some progress there. But it seems like like very difficult some level, it's a hot button issue. Are there things we can do with technology to make it easier to get more people over here into the United States?

Minn Kim 13:31

I think so. There are a bunch of really like technological solutions. There's ways to automate a lot of the work that goes into making immigration more accessible and transparent. Right. And I think, and then, and I think like, that's very that's happening today, right? Like the digitization of a lot of the paper or manual processes. That kind of bogs down a lot of like the administrative work that is that is involved in these pathways. There are companies that are building like Legal Information Services, right. I've been looking into a lot of companies that are doing this right now. There's, like companies like legal pad, and boundless and obviously, like LegalZoom existed well before, like years ago. And there's a number of different startups at least from like, the Silicon Valley style of like, yeah, we can like tech solve our way through a lot of these problems. And so that's exciting. There are like technological advances that I think knock on wood could be very interesting, where you have like language models, and like AI, like research into new like AI techniques around like, how do you how do you manipulate text, right? And so for example, if you are a talented researcher who is like a postdoc that we think that we should need to stay here and continue to contribute to the US economy. There's probably like, so much like that you've written and published and like there's like a whole history of like your work. available on the internet somewhere in some shape or form. Today, even like we can crawl all of that we can crawl the web for you and the work that you are that you are attributed to. And then craft like the very best like biography about your work and your contributions, that maybe we can, you know, turn over to USCIS and say, Hey, this was why this person's extraordinary, right? And so you think about GPT, three, like Dali, like all of these, like new tech, like core tech evolutions that I think could really contribute to it. And then there's an I kind of want to touch on one thing you just said, which was, policy feels like an intractable problem. But I think what makes me really optimistic right now is that we've had a wave of really big wins from the policy side that I think, make it really exciting to sit at the intersection of like Silicon Valley entrepreneurial. When I say Silicon Valley, by the way, I don't necessarily mean like, tied to the Bay Area, but more of like the ethos of Silicon Valley of like, we can say, tech solve our way out of big problems. Yeah, yeah. But optimism, that the intersection of that and like the old guard, like historically Old Guard, like DC legislative, like government, collaboration. And so you know, you think about the chips Act and the inflation Reduction Act, like both of which are respectively focused on manufacturing and semiconductor and reshoring American manufacturing to climate energy, reducing the cost of moving over to a more like, energy efficient economy. Both of those are huge wins, and kind of like, you know, years and years and years in the making, that tell me at least that there is this like Zeitgeist and cultural appetite, to make policy changes that also work in tandem with technological advances.

Will Jarvis 16:53

So maybe the baby, these immigration challenges may be more tractable than they first appear.

Minn Kim 16:59

Correct? Yeah, I mean, the really, literally, at the beginning of the year, in January, the Biden administration announced a couple of key public policy actions. And I'm going to talk about them because like, I feel like more people should totally know about this. And, but, so there are a couple of visa pathways, particularly for what we like to call extraordinary persons. These are like the O one, the EB one, the J, one, which is like a trainee visa, and then the national interest waiver, these are the four these are for like underused visa pathways that the Biden administration made explicitly, much more clear about the qualifications and evidence required to to, to, like, be eligible to receive them. So when you think about immigration, I think most people, especially from like a public, political, you know, like media frenzy thing, think about the h1, B, right, which is like, if you're employed by a big company, you apply for an h1, B, and then the, the, the unfortunate part of the HNB, is that there's actually, like, so many people that apply, there's like hundreds of 1000s of people every year that apply, and it's capped, and there's only like 60, there's only 65,000 spots, basically. And so you're kind of like out of luck, if you don't get it that year, and I've had a number of friends who have been, unfortunately, like deported, right. But the cool part is that these other visas are underutilized, much more clear. And especially for high skilled, like STEM talent, or like entrepreneurial talent, it's a lot more accessible than people might think. And so I'm really excited about some of the both like policy and like side projects, like in the entrepreneur ecosystem, that are really trying to take advantage of these of these new recent changes.

Will Jarvis 18:43

That's great. That's great. It's a that's very encouraging. It's very encouraging to hear that there are there are options there. Then I'm going to change gears a little bit and and I've got a question for you. What is common knowledge in your field that lay people might find surprising?

Minn Kim 18:58

Oh, feel like this is like waiting for hot take tweet. Um, I mean, an early stage venture, I think there's this notion of quote, unquote, being contrarian. And it's become a little bit of a trope as like the best way to make returns. And, and I think, what is less or less so that's common knowledge that some of the very best investments by the very best investors in this field have not been obvious on day one, right. And so I think about that often, because I don't think it's about being contrarian for the sake of being contrarian, but it's remembering that some of the very outlier companies you think about that are no like SpaceX, Tesla, Amazon, Google, like these big iconic companies that have been around now for almost 20 years. They were like really weird and not obvious. And a lot of the times it took like a very special like Forward thinking person to just take a leap of faith, right? One of my favorite stories, this is like Silicon Valley lore. And I'm sure someone will correct me on the details here. But you know, like way back in like 1999 Larry Page and Sergey Brin were researchers who met John Doar, who is a partner at this, like storied Silicon Valley like sand hill firm called Kleiner Perkins. And when they had the meeting, they had like no business plan, like no revenue. And it was like technology like this was way before they thought about AdSense and AdWords as like a business model. So it was just like literally, like research that they wanted to organize like information on the web. And John Doerr, actually, I forget what book this is in, but his recollection or his recounting of the of that meeting was like, how big do you think it could be? And he himself was like mentally thinking, I don't know. Like, maybe it's like a billion dollar business, you know, like, these guys are really smart. Like, I'll put a small check in. And Larry Page and Sergey Brin were like, oh, no, this is like a $10 billion business. Like for sure. Like, they were just like, really confident about it. And now, you know, post facto, we know that it's actually like, nearly like a trillion dollar business. You know, more could be. And so I think about stories like that, where, yeah, it took just like a special person to meet the entrepreneurs and be able to take a leap of faith. Bezos is this is now like a John Doerr like tribute. I'm a big fan. But Amazon is like a similar story. You know, Amazon's a little bit different, because like, Jeff Bezos, like came from a finance background. And, you know, he is like a businessman. He's a proper businessman. And so he had like, notions of what a business model would be. But he had raised he had basically exhausted like, all of his, like friends and family financing, like personal dollars, before he went to a couple of like other like, early, like what we now call it angels. I don't think we call them that back then in like, 1995. But he raised like, a million dollars, which roughly would be like the equivalent of like, two today, it was like a, quote, unquote, pre seed round. And that was like him selling this notion of like, I'm going to sell books on the internet, which now we look back, and it's so obvious that it could have it was that and then some, but could you imagine, like, 1995? I mean, I was like, a baby at the time. But, but like, could you imagine 1985 somebody's thinking, like, I'm going to sell books on the internet. Like, that's weird. Um, and so, yeah, I just think that, and I've had this experience, personally, where, you know, when I was investing in lower beta, like we, we actually invested in a transportation company, that is called a to b. And they do payments infrastructure for trucking, trucking. And Trucking is a massive industry. But when we invested in that company,

my partner rode the hot lead that deal and it was intended to be a commuter Transit Company, between like, for like Googlers, basically, or everybody else, but Googlers, because Google have their own bus. But it was to take people from San Francisco down to Palo Alto, or Menlo Park, and they were going to build a business around that. And so it was transportation related, but we invested in that company, within three months, COVID hit. And so to be honest, I think we were all thinking, Oh, my gosh, we basically lost our money within three months like this, there's no way this is gonna like how do we how are we ever going to recoup this. And, like Vignon, and harshita, the co founders are extraordinary. And they went out and they spent like two months during the bunch of IDEA validation, like literally going to gas stations and talking to truckers, and then came back with a new idea. And like, pivoted the entire business, which has now become like, wildly successful. And I think it was recently like, you know, on Forbes is, you know, like companies to watch to become like, next unicorn, bla bla bla. And it was it's an extraordinary story and a testament to I think, when the original investment, we were making it, like, it was really weird, and like, not everybody around the table was a fan. And there are several several stories like that across our portfolio. And it is a and it only makes sense. Like in hindsight.

Will Jarvis 24:17

What do you think? What do you think sets apart? A team like that founded ATB versus another team lightly? Like what's there something special? Is there something special about the founders, that team that that really? Yeah, yeah. Because I don't think many people would survive that kind of challenge, right? In the business caught totally,

Minn Kim 24:37

totally. I love love, love this question. Because I do early stage investing, right? And so I've done mostly like pre seed and seed. And so I think about this from like, a day one like day negative one almost. And I think what I have observed consistently, time and time again, is that the most extraordinary people that start companies have been problem solving, like our natural problem solvers and have been problem solving for years and years and years. And they you see it, and you see it not just from like a business perspective, it's not necessarily the case that they've like, they're like, serial entrepreneurs. And you know, instead of, instead of like selling lemonade, they were like, you know, building like, like online businesses when they were 16. Like, that's not what I'm talking about. But rather, they've just been problem solving. So what and so the consistent observation I've just seen is a lot of founders are like obsessive about something. And then they're like, I just think it could be better. And they just go do that thing. Whether or not it makes sense for it to be a business, right. And so, yeah, I think like the ADB founders are like that. We also invest in a company called Flexport, which does shipping and logistics, and build software for Super shipping and logistics. It's called Flex for, like, they're just a number of these companies that are that are led by problem solvers.

Will Jarvis 26:06

That's awesome. That's awesome. I have you know, when you meet someone that they're a problem solver, is it you know, you just like you hear them talking about stories where they like that they started describing problems and how they were thinking about solving them and think you think they can really rise to the challenge? Are there any common thread threads there you've seen?

Minn Kim 26:23

So I forget who this is our I might be misremembering, but I think it's Mark Sue ster, who had this great blog post from years and years ago called invest in lines, not dots. And I think what's nice is my preference, and every investor might feel differently. But my preference is that you get to know someone for long enough, that you get to see them in a couple different environments over a handful of different interactions. And you get to start seeing like how they respond to the questions that you ask, maybe it's a little bit of a tough question, do they get defensive? Do they actually have they thought about it? Can they even preempt or preempt? Like the constructive criticism that you might have about their business? Where the market that they're going after? Why are they why do they have such high conviction, right? And so I really subscribe to that notion of like investing in lines, not dots, because I think it's really hard, you can get a really great sense for do you vibe fit with the person within like a 1520 minute meeting? Or like a 30 minute coffee? But do you can you find, can you find enough pieces of interactions that give you conviction about their ability to problem solve? That happens, I think over the course of some time, and that could be two weeks that could be two months can be two years. But for me, I've always really appreciated when I've gotten to know somebody over the course of several interactions. Because this is because the moment that we say that we're going to work together, and I'm going to work with you as to help you make sure that you can build this company into something successful. That is like a tenure, potential commitment that we're making to each other. And I hope like I don't take that lightly, lightly. And I hope founders also don't take that lightly. So yeah, so I think like, there's a lot level of consistency that comes with it.

Will Jarvis 28:15

Makes sense? Like it's everything like that. I really liked that. Another question here? Why now? Yeah, this is a great question you often get if you're starting a business, you know that why now? When does it matter? And when does it matter less?

Minn Kim 28:32

Oh. So part of it depends on the kind of business that you build? It's a great question, actually. Because if you're building a, quote, unquote, deep tech company, which like, generally tends to be and it is something based on like fundamental research, or some deeply technical hard challenge. I think the why now matters a lot, because it literally tells you whether or not this technology is viable. I've been spending a lot of time in like, women's health and reproductive health in particular, or the intersection of reproductive health and longevity and biotech. And there's a lot there's a dearth of just basic research, right? And so we only started really doing research on women's bodies for the last like 20 years, like 30 years, maybe, basically, I think it was with the NIH is right Revitalization Act in 1993. And so it's only been like 30 years that we really like included women in clinical trials, clinical research. And so we just don't really know and we still don't include, like pregnant women in most clinical research, because they're considered vulnerable populations. And so we just don't know, right? There's just a lot of stuff that we don't know about hormone levels and like our field tonality and reproductive health, and how that all works together in our bodies. And so that to me is an example of like, you need to have a really strong line now because there's Probably like some fundamental research that's going to lead to some breakthrough. And so more recently, I think that's been top of mind for a lot of like, scientists and researchers and entrepreneurs trying to tackle, like the fertility crisis, whether it's from like, really basic research on tracking, like your home hormone levels over the course of life, similar to how we all track our health health now, right? Like our blood glucose, blood blood glucose levels, but can you do that for like your hormone levels, because it might have some impact on like, your general well being or some way or your general overall health? All the way to something that feels a little bit more like science fiction, which is like cool, can we like grow babies outside of the womb? And like, and do you start maybe with building like bio bags for like, really, really early prematurely born babies? Maybe, right? But all of that is that is really hard to do? Well, if you don't have fundamental research underpinning it. So like, I think why now for hard tech, deep tech, whatever you call it call it is really important for that reason. And then for other markets, sometimes it's not that relevant, right? Like, if you think about Uber Eats DoorDash, like Instacart interests, like a couple, a couple of these, like consumer social type companies, it's not necessarily the case that you needed to why now, maybe you could make the case that it was like smartphone adoption, because this is like, you know, 2010s, and enough people owned an iPhone, and enough people had a cultural appetite for on demand services. I think you see some of that now with, like, web three and type, you know, companies where, yeah, there's enough of a cultural shift on in wanting to like own parts of the internet, right? But it's not enough to just be creators. But why don't you also be able to have a stake in the things that you build mine. But, but it's not necessarily obvious to me that like, it has to be underpinned by some novel technical, you know, shift that happened. So that's kind of how I think about it. And it is additive in other businesses that are not deeply technical. But how would I say, like, necessary, but not sufficient, in deeply technical fields, either.

Will Jarvis 32:19

That makes sense. That makes sense. I want to talk more about deeply technical fields in frontier tech. Now. You mentioned some of the areas you're excited about. But But can you talk about a couple of the others like, like, what areas are you excited about? And frontier tech? What is frontier tech? And why do you think there's been a renaissance of recently, people being interested in it and investing in it?

Minn Kim 32:39

Yeah. Can I ask you, what you how you define frontier tech? I feel like you've spoken to a number of people who actually pay attention in this world, too.

Will Jarvis 32:47

That's great. That's great. Yeah, let's see, if I had to define it. It's, you know, technology. I primarily think about it in the sense of usually physical like, you know, what can we do in the real physical world? I mean, it can't be like, you know, GPT, three, we had this, we talked to the stable diffusion folks recently. I think they're doing those kinds of things. It's tough, I guess, when you look at things and you're like, okay, there could be a real breakthrough, there could be a real discontinuous path of innovation that could be commercialized it soon. That's kind of what I think of as frontier tech. I don't know. I don't know.

Minn Kim 33:23

Amazing. No, I actually, I think that's great. I love that, like things that inspire like breakthroughs, right? Like, there's some kind of stepchange difference that this like piece of technology or company makes, um, I have a pretty like, broad definition, which is anything that like really increases agency, which is like super broad, but that's like my definition of it. And I think within it, it's like a question of like, where where do you focus, right? Because I think lots of people have different interpretations of what frontier tech is. And so for me, like, I've spent a lot of my time in like AI, and robotics. And so that's like, where that's where I like started looking into these startups in this market. And then more recently, I've spent a lot of time in like longevity, which I think is also on longevity, and biotech, which I think is really, really exciting. And there is a lot of like commercialization of research that I think will happen over the course of the next 10 years that will like fundamentally change the food that we eat, like the health that we preserve, how long we live, right? It's just an and then the last like two probably are around like space. You know, the last time we really had a space race was back in like the 1960s. Now, I think there's just been really exciting like renaissance of how do we get people to Mars? Like how do we become a multiplanetary species? And that's like, really a science fiction out there. But like that is basically the next frontier, right? Like, we don't have other continents to conquer anymore on this earth. We have to go elsewhere. So that space and then obviously a lot of the work in climate energy and the overarching like Zeitgeist around making sure that we create like a much more energy efficient economy, sustainable future. The like, so many of my like smartest friends have basically gone into those fields. And so maybe that's how I might differ five like frontier tech, it's like, all the fields that whatever my smartest friends going into, like, that's frontier.

Will Jarvis 35:29

I love it. I love it. I love it. I'm curious on the climate climate aspect that, you know, I've seen a lot of people pivoting into climate, thinking about climate, one of the big challenges I see is that it seems to be like mostly a public good to fix climate change. It's tough to capture the upside in the entire lives, kind of the upside, if that makes sense. is especially so if we know carbon capture, it's difficult, right? Because who wants to pay to capture carbon? You know, you can just produce it. I'm curious to hear your thoughts there. What do successful companies look like in the climate space? Is it more companies like Tesla, or something else?

Minn Kim 36:11

Oh, okay, I won't be able to dive as deeply into like carbon capture. That's like, not someplace that I spent a lot of much time in. But I think I have like two parts to this question. Two answers to this question. One of which is, I think that creating new markets takes time. And historically, I think you're right, that a lot of like, climate activism was like, like, a lot of doing good, right. And it was very, like ESG impact, which, which is good, like, you know, like, net positive for the world, but not necessarily. Well, it incentivized for the very best entrepreneurial talent to go and work in them. Right. And so a lot of the companies that I'm most excited by, in like the climate, energy space, are or in the, in the carbon space, in particular, I think, are building like big r&d projects. And a lot of that research into like, literally, like direct air capture, right, like taking carbon out of the air, and then storing it underground. Like that is crazy, like, it's crazy cool that we can do that. But that's going to take time, and then you'll have to build the proper like business model around it. And so, I do think that some of these things just like have to take on a tick decade long horizon, especially if you're thinking about either building something in it or joining a company in it or putting money behind that. Like you really have to think long term. On the flip side, I think the other part that's exciting about energy, maybe less like climate, per se, but is I love that you mentioned Tesla, because I think it's a great canonical example of a company that isn't obviously a quote unquote, climate company, right. But it is just fundamentally building the product that they're building in a more sustainable or intentional, intentional way, and making it accessible to its end customers. And so, like, you don't know, if all roads lead back to Bezos, but like, what do customers care about? Like you want it either cheaper, faster or better? Right? And so if you're going to build a product, and you incentivize enough people who are building those things, to do it in a more energy efficient way, they probably will. Right. And then if you give enough incentives for the customers of the people building those products, enough reason to buy those, they probably will. And so the IRA, I think is like this really big tailwind for an entirely new generation of like industrial companies that just get built from the ground up in a much more energy efficient energy intentional way. So you think, you know, like, so you got Tesla instead of Ford. And so like, think about every other potential company that is like that was built 100 years ago, will get built today.

Will Jarvis 38:58

In a better and more robust way. Sounds like,

Minn Kim 39:01

yeah, yeah. Like, it's, that's my hope. I mean, and I have friends who are working in like battery technology building like industrial like appliances. And they're just doing it there. It's the same output, but the output just happens to be like, cooler and better.

Will Jarvis 39:15

I love that. I love that. That's great. Can you talk about language models and human computer interfaces and some of the excitement around that, that you've seen recently?

Minn Kim 39:24

Oh, okay. So the reason I love like, like computer human computer interaction, the reason I got into it to begin with, it's because I am like one of those people that will raise my hand to have a brain implant. Maybe not like maybe not like clinical trial, maybe like after that, but like happily be a guinea pig for that kind of thing. And I've always felt that out. I'm a big believer that your environment shapes you like your physical environment, and that also includes like the things that you use on a day to day basis. For example, I like Like our devices, right? Like, you and I are talking right now on a laptop, I have an iPhone, I have an iPad. And each of these I kind of use slightly differently. Like, yes, I will do email on all of them. But I try not to, like I try to use like iPad for for like YouTube watching, right versus like, if I'm doing like deep work, I'll use my laptop, versus like phone is like for on the go. And so I do have, I do think that like your devices kind of influence the behavior and like how you use them. But they're all really constrained, right? Like, I grew up watching, like Minority Report, right. And like all these like science fiction movies, that detail, like different, like you can, like manipulate the air, and, you know, send data across the person, like in the next room, just with the swipe of your hand. And we don't have that yet. But like, clearly, we have the imagination to build to, to want something like that. And so I've been really excited about a lot of the work recently around, like the intersection of language models, and AI and new human computer interface design. There's this company called Restlet, that builds like integrated developer environments. It is a wonder beta portfolio company. And, um, that's amazing. And he's built this amazing, incredibly innovative, like entrepreneurial team that like turn out like projects truly. And one of their recent ones is called Ghost Rider. And it's like, an AI assisted code like code generator. So it's not like it's self novel necessarily. Like Microsoft's GitHub has been doing this for the last like, a couple years, I think, with copilot the but two things. One is that they've just gotten a lot better. And then two is the cool part about Ghostrider, that I was like, a little bit like, blown away by is, they do have this feature called swipe to code. And so like as, as the AI helps you like generate the code, you can either accept or deny by like swiping. And now that I've said it, and now that you've like now that if you see the demo, it feels obvious afterwards. But I love demos like that, where it kind of totally makes you think differently about what's possible with our devices. Right? And that's like a really simple example. But like, there's no notion of like depth when you when we use our digital devices today, right? Like the, you know, I'm looking at you right now through a video screen. But there's no real notion of like depth. And there's not a real notion of like memory, right. And so, let's say I was taking a picture of somebody. And then, you know, like, three weeks later, I came back to the same spot. And is there a feature that I could like toggle on? Because I want to remember, like, who was in the room when I went to that happy hour, right? And so there's this like, notion of like, the memory palace that you have in your brain? And like, can we recreate that with our devices. And so that's just been something that is not obviously yet, like a company to me right now. But there are a number of people like in like the tech ecosystem, that are thinking and working on, like, really good ways to demonstrate how this like how how, like, our tech can work for us, basically, in a way so that we're not just like, yeah, like a lot of the language model, like autogenerated, like, Oh, my God, like is gonna take over our jobs like that feels really constrained to me. Because like, human beings are really, really creative. And when you give them new tools, I think we figured out ways to use the tools, right? And if, and if you give, there's this amazing researcher named Linus Linus Lee, he's on Twitter. But he said something recently, that really, really impacted me, which was our tools should evoke virtuosity. And so it's great if you if people really, really constrained tools, they won't evoke for virtuosity, and so great that like, you can use an auto generated copywriter, but you won't know what's like really fully possible, then.

Will Jarvis 44:07

I love that. I love that. It's, yeah, I love that. For me, that's a really good framing. I want to pivot a little bit, but I want to talk about this about frontier tech and what the big barriers are to getting more of it in the real world right now. What are those barriers, barriers, you see? Is it you know, money? Is it talent? Is it something else? What do you think?

Minn Kim 44:28

Um, maybe else? It'll depend on the market. But I think it's a combination of basic research, talent, capital and policy, right? It's like all four of those forces working in tandem to make sure that we can continue innovating in these areas. Right. And so and we've touched on this so far, but you know, like a lot of foundational scientific capacity, like we just need like a lot more r&d, right, whether it's like genetic engineering technologies to like reprogramming ourselves to like synthetic biology so that we don't don't have to necessarily so that we can like create cells out of like stem cells into like new cells versus having to like get them out of our bodies because it which is very expensive and like higher risk, things like that to talent, which you've touched on, which again, like I'm going to come back to immigration like that is like the most tractable near term thing that we can do to make sure that we can get people to do our research. Capital is an interesting one, because I think there's a, there's like different capital needs for when especially frontier tech goes from zero to one, one to two, and then two to like, whatever 100,000 Plus, right, zero to one can, in some regard, be cheap, can be cheaper than I think people think. Because a lot of like, the hardware components in, you know, in like robotics, and advanced manufacturing, like some of those things are now like off the shelf, right. And so they're a lot cheaper than we thought than we than they were before. Right. And so instead of like your first prototype costing you $150,000, like, you might be doing it to be able to do it for 80, right, which is like non trivial. And so capital for zero to one, I think, in some ways is the barrier to entry is like lower than it was before, like, call it 10 years ago, one to 10, I think, is actually really hard. And so like, that's where I think we need like lots more people excited, and investors excited to put in like, you know, that 1010 $15 million, because that's when most that's when founders are going from prototype to like, now serving and delivering to their first handful of customers, right? And like, only then after you've like proven that you can actually build those first 10, can you now attract enough capital and excitement and interest to be able to like really full steam ahead, go and like produce 100 100? Or 1000? Right? And so, that's a little bit more of a nuanced answer. And like my opinion on kind of, like, how the level of importance to capital. And I think like that gap from like, one to 10 is actually like one of like, the most critical areas where we could use a lot more risk taking.

Will Jarvis 47:08

Do you think there's less risk taking bear that that one to 10? Stage?

Minn Kim 47:13

Oh, because I think like, it's still a leap of faith. And so like, it's the same, you know, if a founder came to you and said, Hey, I want to build this, you know, build this robot, or like, build a factory or build an industrial, a pilot appliance of some kind. Zero to One is like your, you're investing on the basis of founder market fit, like founders domain expertise, or their capacity to actually build this. And like the market opportunity, potentially. But the zero to one is like, cool, I built the prototype, and it works. But now like, you still have to take the same leap of faith. And it's not necessarily any more like market de risked, necessarily, because probably only been like 12 months. And so I just think that sometimes it's like more of a yeah, just like a little bit of fear. Where, oh, okay, you hit all the milestones that we agreed upon. Okay, cool. But now we need to go from like putting in like to like a million or $2 million to like, five times that amount, right? It's not, it's not totally obvious to me that like your customers are going to pay or that you have a customer base that will pay hundreds of 1000s of dollars, if not millions, in the next like three to five years.

Will Jarvis 48:28

That's just a lot more difficult. It's just a lot more difficult to get that level of conviction.

Minn Kim 48:31

Yeah, exactly. And so, you know, capital. And then the last one is policy. But like I said, I think the exciting part is that the government seems like they're really, really aware. And they care that these areas, especially around industrial progress, are really critical to the natural national interest. And so there's both political will and dollars. And so the, you know, like, the administration, is putting their money where his mouth is.

Will Jarvis 48:59

Love that. Love that. Med. We're running up on time here. What piece of the career advice, especially for people working in tech and startups, you know, do you think is important, but maybe underrated? Maybe something you could impart to the audience that they might utilize?

Minn Kim 49:14

Oh, two, I will say two pieces of advice. And I'm paying it forward, because they are two pieces of advice that I received early in my career, and they have, they have continued to be true. One is right online. You that doesn't mean you have to tweet, by the way. But you know, I've been writing online for the better part of over a decade actually. And it's always been a really great way to share ideas that are in my brain with other people and it gives insight to others about what I'm thinking about. And then and, and those ideas like propagate faster than if you were to try to have 10 conversations right? Versus you can reach 100 People just by writing a blog post about My latest thinking on like women's health. I have not actually published that piece yet. But writing online, and then great cold emails. A really good cold email I started I got into startups. When I lived in New York, I just cold emailed a lot of people in like, tech ecosystem, not because I was trying to like be a VC per se, but because I was really excited about what they were building. I would like go on to the App Store, look up the top apps the day and I would like try them. And then write unsolicited feedback. Like, truly I was like, 23, and looking back and really cringey. But I would be like, Hi, I'm so and so like, just like some random person from the internet. And I would write unsolicited feedback to Pete to like, people building these products. And then lo and behold, like, they would invite me to coffee. Because they were, you know, they were like, who are you? But yeah, writing online and then sending great cold emails, like, they will take you a lot farther than you might think. Yeah, I

Will Jarvis 51:04

definitely second on the cold emails portion. If you can have a genuine kind of well written cold email you can get really far in life.

Minn Kim 51:12

Really help this whole podcast often into that.

Will Jarvis 51:16

Oh, I know. I know. It really is, you know, one day, you know, you just start writing emails and then you're talking to metallic Butyrin. And min cam. And you know, who knows? What could happen? It's pretty well, well, man, thank you so much for taking the time today. Where can people find you? Where should we send them?

Minn Kim 51:31

I am very online. You can find me on Twitter at mini cat i n e y underscore cat. And then I also write online at min kim.com. That's great. Thanks, man. Cool. Thank you so much well.

William Jarvis 51:48

Special thanks to our sponsor, this Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

 Feline stomatitis is a serious autoimmune disease that affects 1 million cats per year in the US. The only treatment for it currently is a $1k+ surgery. By the end of the trial, we expect to have evidence that our drug can safely and effectively suppress the feline immune system. This positions our drug to become the only alternative to an expensive and traumatizing surgery. Trevor is currently raising funds to cover the rest of the costs of the trial, as well as position us for our next milestones, which you can check out here: https://wefunder.com/highway.pharmaceuticals/

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Well, Trevor, how are you doing this afternoon?

Trevor Klee 0:39

I am doing great. Thanks. How are you?

Unknown Speaker 0:42

Doing? Great. Thanks again, for coming back on the show. I think you're our first repeat guest, which is which is super cool. I'm excited about the effort you're working on and the problems you're admiring. And you've got a new initiative there. I've kind of wanted to highlight on the show and get a little more eyes on it, if that makes sense. Because I really believe in kind of the mission you're working on. Just for someone who you know, perhaps didn't listen to the last episode. Do you mind giving us like a brief bio and you know, some of the big problems you're interested in?

Trevor Klee 1:12

Yeah. Okay, cool. So hi, Trevor. In terms of a bio, I have a really weird non traditional background. So done, like a bootstrapped and tech slash tutoring business and then veered into doing a biotech startup after spending several years posting essays on Reddit and arguing about them in the comment, like biotech essays and biology essays. So, you know, what we're working on essentially is with this biotech startup highway Pharmaceuticals is immunosuppressants, and specifically, what we're working on right now is creating safer better versions of immunosuppressants for animal autoimmune diseases, human autoimmune diseases, and eventually human note or degenerative diseases like dementia and Parkinson's and that kind of thing.

Will Jarvis 2:16

I love that. I love that. How did you first come up with the drug cyclosporine as the the one to use, if that makes sense?

Trevor Klee 2:23

Yeah, yeah. So you know, when I got interested in this problem, I was looking for sort of ways to tackle it. And I came across this drugs cyclosporine, which is, you know, used to be a really widely used immunosuppressant. And humans sort of fallen out of fashion. Still pretty widely used in animals. And what I thought was interesting about it is it's, you know, this really powerful drug, it has great effects in a ton of different diseases, everything from, you know, psoriasis, to IBD, to, you know, there are even some early studies done on like ALS and stuff where it showed some promise. But it always been, you know, sort of relegated or useless because it has a bunch of bad side effects. And it's, it's pretty hard to dose it's a it's a very tricky drug. So, you know, I was focusing a lot on how can we make this drug which is so powerful, but so hard to use? How can we make it easier to use safer better, and so, you know, doing research on that eventually came up with this idea that if we combine it with a, you know, certain other drug, which is a metabolic inhibitor, we could solve a lot of the issues while keeping the potency. So that's, you know, it started off by looking at some human case studies where they had done this accidentally and then move on to in vitro studies. And, you know, now like, we're really testing the this and well, cats.

Unknown Speaker 3:58

Why cats? Yeah, you always hear about mice. You know, you hear about, you know, perhaps these rhesus monkeys, perhaps dogs, beagles or something, but like, you don't often hear cats.

Trevor Klee 4:09

Okay? Yes. So there's a good reason why you don't often hear cats. It's actually funny. I have a friend who was like, thinking of testing drugs, and he was like, Do you think I should test my drug in cats? And I was like, probably not, unless you're really certain that you want to. And so, you know, cats in general are harder to deal with then dogs, which would be the other obvious option, you know, cats, they're, you know, they're tricky animals as anyone who's owned a cat, they're a little smaller than dogs. And, you know, they also you know, can have some bad reactions to certain drugs like Tylenol, for instance. Cats can't take Tylenol for sort of biological reason. Um, but you know, what we found when we were looking at like, really good uses for this safer version of cyclosporine is essentially that cats get this, you know, autoimmune disease called feline stomatitis. It affects about 1% of all cats. And like right now, it really doesn't have a good treatment. And we wanted to, you know, think like, Okay, could this be something that our immunosuppressant could be used for? So we were talking to vets, and you know, of all the diseases that we talked about, they were like, Oh, my God, yes. Like any treatment you can create for Feline stomatitis would be great right now. And the only option is, is surgery. So that's, that's really where we started our exploration of like, using using cats as as our first indication here.

Unknown Speaker 5:45

I love that. I love that. Can

Will Jarvis 5:46

you talk a little bit about the its feline stomatitis? correctly? You are correct. Awesome. Awesome. Can you talk a little bit about how it affects cats? And perhaps why and how, more say a safer cipher cyclosporine could really be useful in this

Unknown Speaker 6:01

context.

Trevor Klee 6:02

Yeah, sure. Um, so yeah, so Feline, stomatitis? It's sort of like a, you know, have you ever had like a canker sore? Yeah, yeah, stomatitis is close to that, except cats get really bad. So they get basically a bunch of sores all over their mouth and lips. And like, you know, it's, they can't eat, they can't drink. And they're really miserable. And if you know, they don't, if something's not done, you know, they, well can be as bad as you'd expect not eating and drinking to be. Um, so that's, that's basically, you know, the disease and it affects, you know, about a million cats per year in the US, and like the current treatment was or is pulling teeth. So they literally will sedate cat pull all its teeth. And this will happen to cats, they're like two, three years old. It's really sad. Oh, man, it's expensive, can be 1000 2000. And we've been here $3,000. And, you know, it only works like 70% of the time. So it's, it's ruffled altogether. So we were looking at the studies, and found that a couple of people had experimented with using cyclosporine instead of pulling teeth. So they were, you know, used it before pulling teeth, like instead of it, and they also used it after, and basically what we found, or what these these authors found is that cyclosporine does work. But again, it's difficult to use, it has a high rate of side effects. And so, you know, they, like the author's basically, in the papers themselves were like, you know, it would, this looks really good, but it's tricky enough that, you know, you should probably stick with like surgery first, and then cyclosporine only if you absolutely have you. So then reading this, you know, these are papers from like, 2006 2010 2013. You know, I was reading that, and I was like, huh, I have a better version of cyclosporine. So that's, that's sort of how, how it got started on the idea of feline stomatitis.

Unknown Speaker 8:15

That's great. That's great. You know,

Unknown Speaker 8:17

how expensive as our feline, you know, clinical trials? And what is the how's the regulatory environment difficult with different between humans and cats?

Unknown Speaker 8:27

If that makes sense?

Trevor Klee 8:28

Yes, that's a great question. Um, yeah. So there's, there's a big difference there. So basically, you know, human clinical trials you've got, you get your sort of preclinical work. And then you talk to the FDA, and you say, I would like to test my drug and humans and the FDA says, Okay, make sure you have all your ducks in a row, make sure you know, the drug is safe, that, you know, safe, and you can manufacture it and whatever, whatever. So that can be super expensive. And then they allow you to test your dog and healthy humans, then they allow you to test your drug for safety and healthy humans. And at last, they allow you to test your drug and sick humans. And there's a lot of paperwork around this because you know, you don't want to be hurting anyone. For animals, it's really different. So for animals, the FDA is basically basic position is, you know, we don't care what you do to lab animals, like you have to abide by minimal ethical standards. And for the record, we abide by way more than that we're working with people who are, you know, very careful about, you know, the well being of their animals. But from the FDA standard, they actually don't need to talk to you until you want to work on basically pets. So, you know, we don't have to talk to the FDA when we work on our lab cats, which we're going to be doing for our healthy lab cuts and for our safety trial. And then we're going to talk to the FDA once we want to you know recruit some people whose pets actually have feline stomatitis. And so the cost of this like initial trial where we're testing our drug combination on healthy cats and saying, Okay, it's reasonably safe, it works better than the original version of cyclosporine, it can be dosed less often and, you know, can stay around in the blood longer. So that cost is about 300,000. All and so that's actually, you know, we're currently fundraising right now to basically cover that gap, which is, you know, we have about 200,000 in the bank, and we're need to cover the extra 100,000 For to finish out our pilot trials.

Unknown Speaker 10:42

That's great. That's great. And can you give like context for your listeners who might not know how much human trials cost? What is the cost delta between, you know, your, your study and doing an equivalent trial in humans?

Trevor Klee 10:55

Yeah, so we started off doing it. Thinking about this in humans, we had a human autoimmune disease that we wanted to test this combination on. And so the cost for that would have been around 1.4 million for basically doing probably would have ended up being more than that, probably around 1.6 million for doing like a good high quality, you know, trial and healthy humans. And, you know, meanwhile, we're going to be about 300,000 for a good high quality trial on healthy cats. So you know, it's a big difference, cats, there's less regulation, you can pay cats and cat food, you know, rather than money. Cats are very happy to stay overnight in the facility, because, you know, they don't have a home that they're waiting to get back to. So yeah, it's it's much cheaper.

Unknown Speaker 11:53

That's great. That's great. Why don't more people use, you know, cat as subjects for these trials.

Trevor Klee 12:01

Uh, so, you know, if you think of cats specifically, the basic reason why you would use dogs instead of cats is because cats are tricky, like, you know, you, the cats that we're working with, have actually been trained to take drugs and trained to be okay with having their blood drawn. And if they're not, then, you know, giving drugs to a cat is, I mean, difficult. They've got Yeah, they will, they will bite you. Meanwhile, dogs, you know, you put it in peanut butter, and they're happy to take it. So that's, that's why people don't use cats instead of dogs. The reason why people don't often do what we do, and do you know, sort of the animal trial instead of the human trial, or switch from human to animal is really economics. So for your average disease, it's going to be way more lucrative in humans than it is in animals. So for instance, you know, a really big example is not a lot of people know, there's actually a drug for doggy dementia, for basically, Alzheimer's. It probably doesn't work. But more to the point, it's, it's not that widely prescribed, because the only real concern people have with doggy dementia is like, you know, you want to make sure your dog doesn't, you know, pee inside the house. But other than that, like people don't really care. Meanwhile, of course, you know, human Alzheimer's is something people care a lot about. And it's like, you know, a drug for human Alzheimer's would bring in like 100 billion a year. So, you know, there's not that many diseases that people care enough about and animals to be willing to pay for them. And, you know, feline stomatitis is, is one of them. They're a couple auto, other autoimmune diseases like atopic dermatitis, like the itchy skin rash that people pay for, and that's like a billion dollars a year. But, you know, there's really not that many drugs that are worth developing an animal's from an economic perspective.

Unknown Speaker 14:07

That's great. That's great. What do you see, we expect to see from this trial, specifically, what kind of outcome do you expect to see?

Trevor Klee 14:16

Yeah, so you know, what we're going to see at the end of this trial is basically that our drug is reasonably safe, that it works better than the original form of cyclosporine. And that, you know, we can dose it basically once per week, or roughly once or twice per week instead of the current cyclosporine, which is once per day. And so that's, that's pretty exciting, because, you know, cyclosporine right now, is a pretty commonly used drug in animals. I mean, it's used in dogs. It's used in cats. You know, it used to be used really commonly for atopic dermatitis, which, you know, as I mentioned, is billion dollar a year. disease in dogs. So, you know, essentially at the end of this trial, if we can say, you know, we are, I don't know, 80% Sure, 90% sure that our drug is better than the original form of cyclosporine. You know, that means at the end of this trial, we're going to be pretty sure that we can, at the very least take on the, you know, X hundreds of millions per dollars that, you know, per year that people spend on animal cyclosporine. And that's not even counting, expanding the market, like we planned to do with feline stomatitis.

Unknown Speaker 15:40

That's great. That's great. I, I'm curious, what are the steps after the trial? Like, what do you need to do next to commercialize, let's say, just in pets?

Trevor Klee 15:48

Yeah. So you know, if we want to go totally on our own, we have to do safety trial, which is basically recruit a bunch of cats, and follow them for a long time, as they're given this to make sure that they, you know, no safety issues crop up and like, say, month for, you know, because the trial we're doing right now is only two weeks, so we would only see very immediate safety effects. So, and then after that, we would talk to the FDA, you know, say, here's what we have so far, here's what we want to do next, they give us okay, and then we basically go to a bunch of vets all around the country and say, Do you have owners with feline stomatitis? You know, what cats with feline stomatitis? If so, can we, you know, recruit them for our trial, and you know, they'll take this experimental drug and see if it works better than surgery. So that would be you know, basically, and then we would, you know, of course, market and sell the drug. So that's if we go totally on our own. Another option is, you know, we've already been approached by a couple of different big pharmaceutical companies who are interested in licensing the drug. And what's neat about that is they would license it only in animals. So you know, they basically give us upfront payments, and then milestone payments, and then some sort of royalty fee. And they would do basically everything that I had talked about, you know, the safety trial, the FDA, you know, the pivotal trial and with pets. So they would do all that, and then we could focus just going back to the human auto immune and human neurodegenerative stuff. So I think, you know, once we finish this pilot trial, we're going to, you know, get in some serious talks with a couple of these big pharmaceutical companies that have approached us see, see what their thoughts are, and then you know, more, or basically how our option, you know, we can either go out on our own or, you know, license it out and go specifically for human autoimmune disease. It's, yeah, some good, good times, and some good choices to make.

Unknown Speaker 18:03

That's great. All right.

Unknown Speaker 18:03

Do you have any sense on which way you want to go? Do

Unknown Speaker 18:05

you want to keep it in house? Do you want to, you know, license things out.

Trevor Klee 18:08

Um, so if I could get a, so I would love to license it out specifically for animals, because I think that's a less I am sorry, human biased, I think it's a less important problem than, you know, the autoimmune diseases that exist for humans that, you know, are really can be pretty devastating, and, you know, don't have great treatments. So, you know, if I can find a partner who's, you know, an animal health company, that's, I think, is responsible, that will, you know, do the trials correctly, that will, you know, actually bring the drug to market and not just shelve it, then I would love to partner with one of them. But, you know, something that I've literally already told, like the pharmaceutical companies we've been talking to, is, you know, part of my conditions for licensing would be, you know, you have to take this, as far as possible, like, I really would not be interested in anyone, you know, paying us money to basically put this on a shelf forever, which is something that, you know, depending on their incentives, they might do because, you know, for instance, the Lanco is still selling, you know, the original form of cyclosporine and their incentives, if they license it might just be let's take out this competitor.

Unknown Speaker 19:40

That makes sense. That makes sense. Speaking of humans, can you talk a little bit about application, your drug in humans, specifically for human autoimmune diseases?

Trevor Klee 19:50

Yeah, yeah. So most human autoimmune diseases used to be treated with cyclosporine. So you know, back In like the 80s, if you had psoriasis, if you had Crohn's, basically anything you would have been given cyclosporine. And that's become less and less common as biologics have become more common. Because cyclosporine, as I mentioned, is physically tough drug to administer. And biologics are generally safer. So, the the thing that still exists in hump human autoimmune diseases is basically a combination of two things, some people just can't afford biologics. I mean, you're paying a minimum of 1000 a month. So you know, anyone who you know, who has Crohn's or ulcerative colitis is paying a minimum of 1000 a month, and probably more. And then there's also drugs that, you know, diseases that don't have really clear physiology, we don't really understand, you know, how the disease starts, how it progresses. And so we can't develop biologics for those. And so that's a big place where, you know, cyclosporine can be really useful. So right now, actually, the two, well, the absolute biggest use case for cyclosporine is selling organ transplants, because, I mean, you can't have a biologic, because it's every part of your immune system attacks an organ transplant to pass to be a general immunosuppression. But there's also other stuff that's, you know, could be really useful, like, you know, lupus nephritis, which is a side effect of lupus where, you know, people can get some serious kidney disease. There is actually literally just an improved version of cyclosporine developed for that. And that's, that's approved, and that's being sold right now. And we think that our drug would be better than that. It's called vocalist foreign. So that would be for instance, one one really appealing target for us is, you know, creating better treatments for something like lupus nephritis.

Unknown Speaker 22:09

Makes sense? Makes sense. What about neuro degeneration? What applications do you see there?

Trevor Klee 22:15

Yeah, yeah. So yeah, so as as you as you noticed, you know, I, some people, you know, doctors mostly are surprised when I say, you know, oh, let's we're doing neurodegeneration after autoimmune disease, because, you know, they think of cyclosporine as this immunosuppressant. But, you know, I read a, I wrote a whole blog post about this actually, cyclosporine is this really interesting drug that has sort of this completely different side effect that it protects the mitochondria from, from apoptosis. So like, you know, mitochondria, as you may or may not know, started off as a completely different, like, you know, bacteria or think it was actually technically prokaryotes, but started off as a different cell that billions of years ago, our cells sort of subsumed and adopted, as, you know, the powerhouse of the cell. And one interesting thing about that, as the mitochondria has retained some of its, you know, characteristics back when it used to be a, you know, organism on its own, and one of those is in times of a lot of stress. It can get tough, which maybe it was didn't originally kill itself, maybe there was a different sort of evolutionary adaptation. But, you know, for us now, the practical results of that is, in times of high stress, mitochondria will die in large numbers. And that can be really bad if it happens in your brain or nervous system. So for instance, you know, one thing that cyclosporine has actually been studied in is like traumatic brain injury, if you a really common thing is people get hit in the head really hard. And they seem, you know, okay, ish for like, 24 hours, 48 hours, and then all of a sudden, they go downhill really rapidly. And what happens basically is, you know, that causes stress to the, like neurons, and the mitochondria start dying. And as they die, they create more stress on the other mitochondria. And you get this cascade, where, you know, from the doctor's perspective, it looks like the person with traumatic brain injury was fine for like 24 hours after the injury, and then all of a sudden, you know, they're experienced, like really significant brain trauma. And so cyclists foreign as calcineurin inhibitor is something that can prevent that. So there have been a bunch of experiments around that. There have been experiments around using cyclosporine and also So a similar drug called tacrolimus, and dementia, you know, with the same idea that some forms of dementia can be caused by that sort of like cascading mitochondria death, you know, all the powerhouses of the cell and the brain, you know, started going out at the same time. So those are the sorts of neurodegenerative diseases, that that's going to be a lot trickier to run a trial, and then autoimmune disease, because it's less well understood. But I think that could be you know, something that'd be really, really helpful, you know, and when I think of, like, maximum impact sort of stuff, you know, something like, I mean, almost none of the narrative degenerative diseases have good treatments. And so, you know, there's, there's so many of them that are mitochondria related, and that we could do some really interesting trials to try to try to fix

Unknown Speaker 26:00

and that feels like the ultimate goal. To me, it's like a, a real treatment for dementia. And a bonus practice of American football as well.

Trevor Klee 26:09

Yeah, yeah. Yeah, so football, there's also strokes. I mean, that's another one that like, you know, again, there's a lot of different stuff. It's, it's really interesting. And like, you know, there's been all this like hints about in the literature for years, but like, there's been no economic incentive to run these trials, because cyclosporine itself is generic. So no one else no one can make money off it, if, you know, these are no one can make money off it, you know, in sort of this monopolistic way, if they successfully, you know, fund a trial. So it's just like, random academics like cobbling together grants here and there to run these trials. But, you know, if, if we could do that, that could be huge.

Unknown Speaker 26:55

So that's your sense, why it really has not happened, it there has not really been an economic incentive to go out there and make this a reality.

Trevor Klee 27:05

Exactly. Yeah. Yeah. So you know, that's a lot of people don't know, this. But human trials, you know, as I mentioned, they're super expensive, you know, to run trial and healthy people, is, you know, at least a million and a half to run trial, and sick people can be way more expensive, you know, depending on what you're doing, you know, easily 20 30 million academics don't have access to that kind of money. It's the only the only groups that have access to that sort of money are really, you know, a couple of very well funded nonprofits, and then the, you know, for profit companies, you know, the pharmaceutical companies. So, you know, if there's no economic incentive for, you know, running this trial, if, if no one can patent the results, at the end of it, it's almost certainly not going to happen, unless, you know, you get that random, one really funded. Nonprofit, that's happy to do it. So you know, and that's, like, there's a list of like, three or four nonprofits that, that fund trials like that. And you know, it's not the ones you'd expect, either, you know, people sometimes are like, oh, you know, why don't you just contact like, you know, the, there's like, the allergic disease society or whatever, why don't you contact like the Lupus Foundation. And they don't give out money like that. And they don't have money like that, you know, they can give out like a grant of like, 50,000 to run a, like trial and petri dishes for a scientist, but, you know, they they don't remotely have the funding to do you know, you know, even like a million dollar trial, nevermind a $30 million trial,

Unknown Speaker 28:43

right? It's just just their capital constraint, and it's too difficult for them. But I really set up for that. Trevor, I really love the effort. I'm really inspired by your work. And it's been nice to see your, your progression over time. I think we talked about a year ago, and you've made a lot of progress, which I find really inspiring. Trevor,

Unknown Speaker 29:01

if people want to help, how can they do that? Like,

Unknown Speaker 29:04

what are your big needs right now.

Trevor Klee 29:06

So big needs right now are, you know, the biggest thing is capital. And then second biggest thing is, you know, if you're connected to, you know, any of like the sort of pharmaceutical companies who would be interested in specifically animal health, but more more importantly, probably for the listeners of this show. You know, if if you find this interesting, if you'd like to help, we're running a crowd investing campaign right now. And you can find a link to that on the top of my Twitter. So you know, just search for Trevor CLI on Twitter, and I've got the post pinned. Or if you're an accredited investor, and you want to invest like 25,000 or more. You can also reach out to me directly through my website, Trevor cli.com. I'm I'm very easy to find online. I'm super Google. So you know, feel free to reach out to me Twitter, Trevor play.com. Whatever. Yeah. And of course, if anyone has any questions, clarifications, that sort of thing before wanting to invest money? Yeah, more than happy to talk.

Unknown Speaker 30:18

That's great. That's great. Well, Trevor, thanks so much for coming on the show. I'll put some links down there in the show notes so people know where to find it.

Trevor Klee 30:24

All right. Thank you very much. Well, it was pleasure talking to you again. Absolutely.

Unknown Speaker 30:32

Special thanks to our sponsor, does Mark analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38

Well, Stuart, how are we doing this afternoon? Doing great.

Stuart Buck 0:41

Thanks for having me.

Will Jarvis 0:42

Absolutely. Well, Stuart, thank you so much for taking the time today to come on the show. I really appreciate it. Do you mind giving us kind of a brief bio and some of the big ideas you're interested in?

Stuart Buck 0:53

Sure. I mean, I guess my bio is you've you noted in our correspondence previously, it's a little bit all over the place. So I'll just like get make it as brief as I can. So I started out with a music degree where I majored in classical guitar performance. Then, like a lot of liberal arts majors who aren't sure what to do with their lives, I ended up going to law school, practice law for a few years and decided I didn't want to bill hours for the rest of my life. So switched yet again, did a PhD in education policy, and was thinking about going into academia. And then a really cool opportunity opened up to work for the what was then called the Lauren John Arnold Foundation, which was just starting up in Houston. So moved to Houston and took a VP of research job that I worked at for about nine years. And in that job did a ton of work on evidence based policy and sponsoring academic research. And on trying to improve the scientific process improves reproducibility. So that's that's became became a key theme for for the work that I like to do. So left left Arnold Arnold ventures, as it's now called last year, and then worked with Patrick Collison, to set up a small nonprofit Think Tank, I guess you could call it that. We're calling the good science project, with the goal of trying to improve the funding and practice of science. So that's about as brief as I

Will Jarvis 2:16

can make it. I love it now that this that's super concise, that's perfectly delivered. Stuart. I'm curious,

how did you first get interested in these problems of science? Like, what's going on with science? Was it in the Ph. D. program?

Was it at Arnold ventures when you'd like to just stumble upon it was there like it was it just a gradual thing where you just can't really quite remember,

Stuart Buck 2:34

I can remember in exact conversation where this really hit the radar screen. So I was sitting with John Arnold in mid 2012, and just started working there. And we had a conversation about evidence based policy. And then we had both independently in the news, seen a controversy over a Yale psychology professor whose name is John barge, which is spelled var G H, but it's pronounced barge. He had done some some studies that had failed to replicate. And it'd become a controversy because he wrote a couple of I think it was two kind of angry columns on this website. I think it was psychology today.com, where he accused the people replicating his studies of basically not knowing what they were doing and being incompetent. I think he's used words like empty headed, something like that. And so became this controversy in the psychology community, you know, like, what's the value of replication? Does this work? Stand up? Is John barge being really, you know, over the top rude? And anyway, John Earl and I both seen this. And I thought, well, this is interesting, like what? You know, is there anything more to this? So I started digging around. And it turned out that there were people in multiple fields, from medicine, to economics to psychology, who had been talking about this problem of replicability. And you know, whether we're really doing sound science or whether we're being like overly influenced by the publication process, and the need to just crank out positive findings at all costs, and so forth. And so that became an important issue because, you know, the Arnold's, we're trying to set up a foundation that revolves around evidence based policy in a number of areas from criminal justice, education, health, etc. But if your focus is evidence based policy, and you can't really trust the evidence, that's a big problem. So, so then then became a mission to try to figure out well, how do we know what what evidence we can trust? And, you know, how can we help to try to improve the evidentiary process and the process of research and science? Gotcha. So it was that conversation on that day,

Will Jarvis 4:38

that's conversation that kind of kind of drove it. I'm curious. So, you know, you're trying to, you know, enact kind of interventions, you know, based on on, you know, solid, like, research and findings, you know, at Arnold ventures at the time. I'm curious what I have the sneaking suspicion, or at least I did, I haven't followed the replication part. ISIS super closely. So, you know, I'm not as well versed in it. But I had this sneaking suspicion that, you know, we caught it and maybe social psychology first because it's kind of, it's super legible, like anybody can kind of read kind of a social psychology study and probably kind of understand what's going on. Whereas if it's an analytical chemistry, you know, I don't know, like I, you know, if you don't have an expertise in the field, it's harder to kind of get there. I guess my question is, is, are some fields worse than others? And is that like a wide range? Or are they all kind of bad? Are some of them good? Some of them? Not as bad? And what's your sense of that?

Stuart Buck 5:33

I mean, that's a really good question. I mean, of course, there are many, many different scientific and academic fields. So I can't claim to know all of them equally well. I do think social psychology, social psychology, in particular, is one area that was both problematic as you're pointing out, but also easier to replicate it and so that that matters. So the study I was talking about with John barge, you may have heard of it, or, you know, some folks may have heard of it. But I'll just repeat quickly what that study was about, you know, for purposes of the conversation, so he, he basically, it was a kind of priming study where he was priming students to have this like concept in their head without really telling them what he was doing. So he would have, he brought students into the lab, and he would have them on some pretext, read over lists of words and try to remember them or something like that. And for for some of the students that were being experimentally evaluated, some of the words on the list would somehow relate to old age, okay. And so the idea was, this gets them kind of unconsciously, or subconsciously thinking about being old. And so then what the real point experiment was, he had somebody timing, the speed at which they walked down the hall as they left the room, right, where they read this list of words. And the students who had read the words that in some way related to being old, ended up walking more slowly down the hall. So you're right, this is a very catchy finding, you know, anyone can kind of understand it. And it's also easy to replicate. I mean, as because other people tried to do it and said, Okay, this is something that you could do in an afternoon, right? It's fairly straightforward. And then they found that it didn't really make a difference. Which actually, it shouldn't be all that surprising. I mean, imagine if we were that, like susceptible to like everything that we came across, you know, read a word of old age, and then all of a sudden, we're like, hunched over decrepit, like, can't walk anymore, and read about Michael Jordan, and we're flying down the hall, right? This would be quite quite an odd world if we were that manipulable. But anyway, social psychology is, for that reason, like, as you say, easier to understand a lot of studies and then easier, more straightforward to replicate them. And so it's, therefore a lot easier to then kind of figure out what is the status of this field. Now, cancer biology, by contrast, is a field that also has some problems with replicability. But it's a lot harder to replicate studies. And I can point to a particular project that I funded while at Arnold, which is called the rep reproducibility project in cancer biology. And I might get a few little details wrong. But basically, I think the original project was supposed to cost around one and a half million. And it was going to try to replicate 50 cancer biology experiments over a period of like four or five years, and that that was going to be the project. Well, we ended up having to kick in some more money, I think it was around five $600,000. They ended up cutting back the number of experiments, they were replicating to around, I forget what the final number was maybe about 20. And the project took eight years. And so the final results were just published earlier this year. So you might think, Well, that looks like it was just inefficient in every possible way. You know, it costs more took longer and did less. But the whole problem there is that it's just prac, it's like virtually impossible to replicate even to start replicating these cancer biology experiments. Because what they found in every single case, was they would read the article, and they would say, Hmm, there's a lot of missing steps, a lot of missing information, like we can't tell what they did at this point, there had they had done, they have to have made a particular choice. So anyway, they have to go back to the original labs. And oftentimes, the original labs weren't particularly happy or cooperative about like working with them and saying, what they actually did an experiment. But when they would finally get the information about how did you actually do this experiment? And what kind of materials and antibodies or et cetera, et cetera, what did you use?

That the answer invariably was always like, well, here's a list of stuff you have to buy that's twice as long and cost twice as much as you thought. So I mean, this whole process just took an extraordinary amount of time, and money and effort. And you know, in some cases, they just couldn't like even get off the ground to replicate experiments. So I guess the point is like that, that whole experience showed that I mean, it's just really hard to even try to replicate stuff so it makes you wonder, okay, what what is going on in that field like because barely anyone can even try to replicate it unless they have a lot of money and a lot of time and a lot of patients. So yeah, that's not not necessarily a good sign. I do think there are other areas they don't physics and cosmology, at least from what little I know of it that have more of a strong culture of replication, you know, if someone says they found like evidence of some cosmic wave or something, you know, other physicists will be trying to independently analyze the data. And so I feel like there's more more of a culture of that sort of activity. But yeah, it's it's it's widely variable, I guess, across different fields. But it's there probably are a lot of fields that are problematic, and probably some that aren't really even aware of it are addressing issue yet.

Will Jarvis 10:37

Gotcha. It does make it does make sense. There's somebody who's, it's there's some areas where it is easier just to replicate generally, just because of like, certain, you know, like, you don't have to run these massive experience, ceramics that require all these compounds, and etc. So it's kind of variable. That makes a lot of sense. I'm curious, Stuart, you know, if you had to grade humanities, science today, like science today, how would you grade it? Are we doing okay? Are we doing really well, really badly, like somewhere in the middle? And it just like, kind of It depends, like way too much. And it's very difficult to tell.

Stuart Buck 11:12

What do you think? I mean, it's probably it depends a lot on the context and the specific field you're talking about. Overall, I mean, let's, let's give it a b minus. I mean, there are lots of areas of science and technology that are coming up with amazing discoveries and advances. But I still think there are lots of ways that we could do better, or scientific system, particularly in biomedicine. It's more and more difficult for younger people to get a foothold within the system. And they're even when they get a foothold, they're tied down, you know, they end up spending half their time, probably on bureaucracy and writing more proposals. endless, endless numbers of proposals, because oftentimes, like the funding rate at something someplace, like the National Cancer Institute might be around nine or 10%. So 9090 plus percent of the proposals are not getting funded. So that's a lot of work being, you know, to comply with all the requirements of the information that you have to provide. And then, yeah, you don't get it funded. So. So yeah, I think there's a lot of ways that we're basically tying scientists hands. And that we could, we could probably do a lot better.

Will Jarvis 12:20

Got it? How bad is it? And can you talk about this a little bit, this fact that, you know, the average age of, you know, NIH grant winners has gone up so much over time since like, the 1980s or so.

Stuart Buck 12:33

Right? Yeah, that's, I think it's, it's definitely a problem. And NIH is aware of it, and they keep trying to expand like kind of early career grants, but it's still seems like, you know, kind of a drop in the bucket compared to what they could be doing. Now, I do think that, you know, the aging of the population with a baby boomer is getting older, and might be part of a function of this. So I would just, you know, looking the other day at the top grossing musical tours of over the past 40 years, and around 1980 81, the top grossing music tour was the Rolling Stones. Okay, so then you look at the top grossing musical tour last year, also the Rolling Stones. So, yeah, the Rolling Stones are just perennially popular. And, you know, they they tour a lot, evidently, so. So there's a case where like, you know, the the exact same people are getting older, but also making a lot of money in the process. So I think probably, there's some of that that's happened within the NIH ecosystem, as well, that there were people, baby boomers who were like, around 3030, ish and 1980. And they became successful, and they built a reputation and a career. And now because of you know, that you can't mandate that people retire at 65. Like, now, they're 70. And they're still cranking away at their lab. And so it's probably a literally some of the same people, you know, so it's, it's not so much necessarily the NIH is biased towards elderly people now, as opposed to 30 year olds and 1880s. It's probably there's, they're finding some of the same people, there's a lot of kind of path dependence in who they find the success breeds more success, you know, like, though, so you get an NIH grant at age 30, and 1980. And you just, you're, you're kind of sad. That's what I suspect is, is part of what's going on. But all of that said, I mean, I do wonder if there are ways to kind of gently encourage people to retire and to make room for younger people, because, you know, it's just famous saying that science advances One funeral at a time. And there's, you know, science, people who have looked into this and they found evidence that like when a very prominent scientist in the field dies, that there's that there's kind of an explosion, don't be too strong, but there, there are more ideas that crop up in that person's particular field afterwards. So So yeah, and but I do think it's important because a lot of you You know, throughout history, a lot of like young people, by today's standards, have done great things. Einsteins best year, arguably was when he was 26. He published like relativity and other papers in 1905. Heisenberg's Uncertainty Principle, he published that when he was 26. Paul Samuelson, who's the great economist, he wrote this book called The foundations of economic analysis, which is like a classic economics book, it was based on his dissertation that he did when he was 26. I was just looking Isaac Newton, I was wondering, When did Isaac Newton discover calculus, it was in his like, early to mid 20s. So it's, it's certainly possible for people who are, you know, under the age of 40, and then aged 35, to do great work, and yet, we're telling them with the NIH system, you know, if you're 24, and you have a brilliant idea, and you have a lot of talent, you can slave away, you know, getting a PhD for the next, however many years, six, eight years, possibly do a post do one or more postdocs for possibly several years, it may be by the time you're in your late 30s, you know, you're kind of ready to start your career. And then, you know, some talented people are gonna say, wait a minute, I could go to any number of other industries, and make a lot more money a lot more quickly. And, you know, not not faced this this, like, monumental hurdle of trying to navigate this, you know, academic ecosystem. So. So yeah, that's, that's one way in which I feel like, you know, we could do things better, we could make more space for younger, brilliant people to, you know, follow their notes release.

William Jarvis 16:33

That's good. That's good.

Will Jarvis 16:34

How much of that? How much do you think? How much of the effect of having younger scientists is the fact that they're younger, they have more like, maybe it's like fluid intelligence or something going on? Versus like, they just like aren't encumbered with some of like, the, you know, I don't know, previously held beliefs when that when they come into it. And in the city, it's probably not even important, like, distinguishing that. I don't know. But do you have any thoughts there?

Stuart Buck 16:57

Yeah, that's that that could be a good point. I mean, yeah, I do think that, you know, a lot of great scientific breakthroughs traditionally have come almost by definition, from someone who has an idea that's, that's different, or makes it a leap forward from what the mainstream in their field is doing. And I say, by definition, because I mean, if what you're doing in science is the same thing that everyone else is doing. That's not a breakthrough, right? And breakthrough, almost by definition means you, you're doing something that's different, that brings in insights from another field, maybe you've developed in, you know, new technology, like X ray crystallography, led people to be able to discover the structure of DNA, you know, all these sorts of ways in which like, new ideas, and new insights can be brought into a field, but almost by definition, it's it's something different. So maybe there's something to the idea that, you know, if you're someone who for whatever reason, including being young, is less, kind of, in, you know, tied down and encumbered by just the traditional view of the field, maybe you have, you haven't already spent, you know, 30 or 40 years building up your reputation for, you know, a particular finding of yours or a particular theory, right, then, then maybe you have a better chance of making an advance. I mean, let's take take the Alzheimer's disease question. So for many years, the the focus, there has been on the so called amyloid hypothesis that that amyloid is this like, fibrous material that builds up in the brain and then makes people's brains slow down, ultimately die. And if only we could prevent or somehow remove or cure this amyloid problem, then that would that would cure Alzheimer's. And there have been dozens and dozens of clinical trials of drugs that are so that are apparently in some way successful at addressing amyloid, but that don't actually result in they end up not resulting in clinical improvements, like people's ability to think or their lifespan. So I would argue that, you know, if you if you want new ideas and Alzheimer's field, it's probably not going to come from some of the famous scientists who have literally spent the past 30 years saying amyloid is the answer. We know, we know it, it's going to work this time. Like they just have it's, it's hard for someone who's like 6070 years old, and who has made their entire career publishing on one particular hypothesis, to suddenly say, All right, I guess I was wrong. I'm ready to try something new. And people always find ways to dig in. I mean, I guess it's part of our kind of set of cognitive biases that people find ways to discount new evidence and to say, Well, no, I really was right or wrong. We just haven't tested it in the right way yet. I mean, that's, that's always kind of part of it. So that argues that, yeah, finding ways to steer more money to younger people who are, you know, less weighed down by the kind of reputational effects they would feel from trying a new idea. That's probably a good idea.

Will Jarvis 19:52

It definitely sounds helpful. I'm curious what your take is on. It seems like the the flip side of this coin could be you I could come back and say, well, Stuart, maybe it's something like, it's gotten so difficult to get to the frontier, it takes you like, you know, until you're 40 to actually get to the frontier of some of these fields. You mentioned something in the outline, which reminded me of this thought I had. And in high school, it's like, man, you know, they're teaching us calculus, but 400 years ago, we hadn't even come up with calculus yet. Yeah. Right. And so the frontier, like keeps getting, you know, and are there limits to this? Oh, what are your thoughts there?

Stuart Buck 20:26

Yeah, there may be something to that as well. I mean, that's, yeah, this this issues is really complicated when you get down to it. So yeah, I think the the analogy I mentioned to you earlier, or the example I mentioned earlier, was that, you know, in the early 50s, late 40s, you know, you could get somewhere in biology by saying, I'm going to figure out the structure of DNA. And so when Crick and Watson and also the Rosalind Franklin, who they didn't credit, you know, publish the structure of DNA, and I think it was 1953. That's a huge advance, right? Today that you can't get anywhere by saying, I'm going to figure out the structure of DNA. It's, that's old news, right? You learned it in in 10th grade biology, right. That's the the great scientific advance of 70 years ago becomes just kind of a standard textbook material in high school today. You're exactly right, so. So today, if you want to make advances in molecular biology, you've got maybe an additional 70 years of material to learn, and so that you can figure out where to advance the frontier, in that field, compared to where someone was 70 years ago. So maybe in any given scientific field, it just builds up and builds up over time. And so maybe it's possible that, you know, that people come along later, just find it harder to, you know, or it takes longer to master all the material that they would need to know in order to figure out what could be next. But at the same time, there are lots of new academic fields, or new advances that come up. So you know, 100 years ago, there was really no such thing as genetics, or neuroscience, or information theory or AI research, or, I mean, any number of fields that we now have. So maybe there will be new scientific fields, you know, 50 years from now that someone who's young and brilliant, might be able to come up with the germination of a new idea that sets often in a new direction. So I think maybe we need to think about it make making sure there's spaces and funding for people to kind of explore new directions or come up with new ideas for combining new scientific in forming new scientific fields.

Will Jarvis 22:29

Got it? I'm curious, this question is related to something you said just just a little bit earlier in that piece, it's, you know, have we is is part of what's gone on the fact that we've kind of weeded out the weirdos to some extent, and that, you know, the people that now can win grants, they're good at sales, and you know, they have to be decent at science too. But really, what you're selecting for in this kind of evolutionary process, is can you go out and win grants? Not? Can you, you know, have these, like, really weird and interesting ideas?

Stuart Buck 23:01

Hmm. Yeah. I mean, it's, it's could be an issue. I mean, there are, I guess, some people who would argue that, you know, for all the successes that we've had with NIH, and NSF, and other, you know, forms of scientific funding, that maybe we need more space in the world for just like completely different alternatives, that everything now is become so standardized, and bureaucratized, and kind of reduced to, you know, what, like, bureaucrats can process on and, you know, it's become more difficult to really come up with something that's brand new, because that doesn't fit within the confines of, you know, what NIH and NSF are already doing, or what they view as the the source of science that we find, you know, at this place, so, yeah, do you think there could be something to that, and that's where I hope that, you know, with the recent kind of explosion in philanthropic, it advances in science, there have been also all sorts of kind of new scientific efforts that have cropped up in the past few years. Someone called it a Cambrian explosion in a way. I hope that they do, that they do this very deliberately, that they don't end up just falling into the trap of doing things in one particular way. And saying, this is the way I hope that, you know, throughout that new ecosystem of philanthropic Lee supported scientific institutions, that there's much more kind of capacity for experimentation, and just trying out new approaches, new ideas, new ways of funding people. And that's, I think that's, I think, a very hopeful sign and maybe, maybe optimistically, fingers crossed that could even lead for lead to new political developments that, you know, would result in NIH and NSF taking new approach wishes?

Will Jarvis 25:01

That's good. That's good. This reminds me of a previous guest we had on Don Braven. Do you know Don, by any chance?

Stuart Buck 25:08

Not personally, I know, I know who you're talking about. And I've read his book. So

Will Jarvis 25:12

Gotcha. Yeah. So he had this idea just for the audience that, you know, what we should be doing is go out, you kind of like kept this venture investor, maybe steward, you'd be this like science mature investor, you go and interview interesting people, and you just kind of give them funding. Yeah. And you ask them, Do you have an attack on a problem that like, yes, we want to explore this. And you just kind of let them go out and do it. And this was his approach, he claims to be quite successful at it. What do you think about that kind of approach of just giving people money, instead of having them like apply for grants, like, just try and have a vitro approach to science, where, perhaps for basic research, we just go find talented people, give them money to go pursue their interests? And see what comes out the other side? Should? Should some more of our science funding look like that? Or at least some percentage?

Stuart Buck 25:58

Yeah, I think definitely a larger percentage should look something like that. It probably wouldn't work for, you know, a majority or a little in all of science, because I don't know, then you get into the problem of like, how do you know who to trust, it's gonna be some people finding their own friends and how you do this at scale, you know, NIH has something like 90,000 grants at any given point in time, like, and they've peer reviewed much, much more than that. So how do you? How do you do something like that? It's that kind of scale. But, but yeah, I think there's, there's definitely a place for that kind of approach. I mean, a lot of top scientists will say, in surveys, that their approach to their own research, or their own research agenda would be different if they had funding, like what you're talking about. In fact, there's a Nobel Prize winner that I interviewed on my website, and he said that he thought he would be doing more creative and interesting work if he didn't have to worry about pleasing funders. So I mean, if that's what someone who's a tenured standard, Stanford professor who's won a Nobel Prize, says about his work, that he feels too tied down by the, the need to please funders. I mean, imagine how it affects like someone who's 27, and has a brilliant idea, but doesn't have the Nobel Prize to fall back on or the the tenured, you know, Stanford position. So. So yeah, I think that that should be a much bigger part of our scientific ecosystem.

Will Jarvis 27:28

Got it? Got it. Going off of that, you know, what do you think like a really robust science funding ecosystem looks like perhaps for the United States, you know, if you had to go find like a leverage point to fix things? Have you like gotten far enough along to kind of draw some big conclusions there, like policy prescription?

Stuart Buck 27:46

Well, I mean, so one policy prescription would or just approach would be that, like, there's no one right way to fund science like that, in fact, thinking that there's one right way is part of the problem, then we end up forcing everybody into the same boss, right. So so I guess, the main message I would have is that there's no one right way to do things. And therefore, we should have a broad diverse portfolio just as you would if you were like, you know, investing, like billions of dollars for like a pension system, you would hopefully diversify not invest everything in crypto, or everything or everything in Treasury bonds, like, you know, you need to you need a wide range of possible approaches, because you know, that, that, that alone, what's going to help you, you know, kind of maximize your returns, because you have some safe investments, you have some more risky investments that might fail, but that might pay off. Extraordinarily, I think we should be taking that same kind of portfolio approach across science. And we should be learning from what we do in science and learn in science funding, we should be more deliberately experimenting, trying new things, and trying as best as we can to measure the impact of doing things in different ways. And so I guess one policy prescription I would have, though, in order to kind of institutionalize this approach to innovation is some is modeling on something called the Center for Medicare and Medicaid Innovation. And so that's, I don't know if you'd call it an agency, but it's like a unit or team or whatever within Medicare and Medicaid, the Center for Medicare and Medicaid Services. And it was set up by the Affordable Care Act with funding at a billion dollars a year. And the whole point of the Center for Medicare and Medicaid Innovation is to try new ideas that might cut costs for Medicare Medicaid, without harming quality or that might improve quality without without raising costs, so that you can bring costs and quality into more alignment. Because because one of the big problems in medical spending is that we pay through the nose and then we don't get back greater results that could be like population wide like right not doing so great in terms of lifespan or our health outcomes? So the big question in healthcare, like, how can we stop spending so much? And how can we get better outcomes? So you have this massive government bureaucracy that spends upwards of a trillion dollars a year? How do you get it to improve? Well, one way was to set up the center for innovation, where the whole point is that now you have people whose job it is to think of new ideas, and to test dip, test out different ways of let's say, paying doctors paying nursing homes, paying hospitals, or measuring their quality, and then trying to measure and see the effects and see what works. And if something does work, then try to get the rest of the agency or Medicare, Medicaid to adopt it. I think that's a brilliant idea, to you know, to have within government agencies is a innovation team, that that can really specialize in thinking new ideas. And so I would argue that NIH and NSF and others should have an innovation team. Again, that's that's solely focused on like, how can we experiment? How can we try new ideas? How can we diversify what we're doing? How can we measure what works? And focus on what works and stop doing things that are overly bureaucratic and giving us bad results? So So yeah, that that that I guess, would be the policy prescription is not any one particular method of of doing science, but institutionalizing innovation, I think that that would be a really key move forward.

Will Jarvis 31:28

I really, I really liked that. And I, I've had this suspicion, you know, this idea of like, I really like the idea of like, having innovation teams with these large bureaucracies that have like license to try more and different things. But I do wonder, is there something about the political economy of these bureaucracies where, okay, you know, we set up an innovation team, perhaps you and I are on it, we come up with some weird idea, we come up with 100 ideas, but one of them's like, you know, it's really weird, but we try it anyway. And the New York Times gets a hold of it, or some journalist gets a hold of it. And you know, they're like, Hey, this is all this agency's been doing it. This is all anyone sees in the press, it goes viral. And then suddenly, we clamped down on the innovation team, because it's like, you know, you're making the Medicare look bad. Is that like an endemic problem? Or am I just kind of overthinking that process? Well,

Stuart Buck 32:15

I mean, I think that could be a problem. But I think it's even worse problem with, you know, the existing agencies right now. So if you go to the, you know, NIH Director, NSF director right now and say, Hey, I've got like, 100, new or, you know, 50, new ideas for ways you could do things they would they would sell you basically, look, I'm already overworked as it is. No one in Congress is asking me to do this. If I did try your ideas, like the best case scenario is that no one pays attention, but probably someone's going to complain. And then then I get called in front of Congress and asked, like, why are you doing this? This wasn't even your job. So, you know, that's, that's why innovation sometimes doesn't get very far in government bureaucracy. So but then that's why I think if you have a group of people who have been specifically authorized and given the mission, try crazy things and see if it works. And I mean, now you have an audience, for people that are willing to like, try try crazy things. And now they have like a statutory mandate, and they have, hopefully, some money to do it. And so that makes it easier for them. I mean, you could still get criticized, but at least they have, you know, the authorization and the expectation that that's the sort of thing they're supposed to be doing. So, hopefully, that would raise the chances of working out.

Will Jarvis 33:28

Definitely, definitely. I love that. And, and how do you think about trying to implement like policy ideas like that? Is it like, you know, kind of like Alex STAPs and Caleb's Institute for progress model where you maybe try to use the secret Congress or something, you go to DC and like, lobby to agencies? Is it like, you know, calling your congressperson like, like, where are the good leverage points here, and you might not be comfortable talking about them? And that's fine. But I'm just curious in general, like how you think about that?

Stuart Buck 33:55

Right? Well, I mean, it's, it's probably a long, slow road, no matter what I mean, so recently, there, there was a health version of ARPA, they got launched ARPA h, is what it's called. And that's exciting new innovation within health funding. But it took several years. I mean, it people were talking about that it that idea, at least since 2017. Actually, since then, there's a guy named Robert Cook Deegan, who's at Arizona State, who I found out he told me that he he wrote an article arguing that there should be a health version of DARPA, he wrote this in 1997. But no one really paid attention to it. And so the idea languished out there. And then people other people independently came up with the idea and 20 around 2016 2017. So, so yeah, they, I mean, they started arguing for it and writing articles about it. And, you know, I mean, at some point, it has to cross over into like, interaction with the folks at the White House who got behind it and so forth. And then, ultimately into legislation appropriations. So, you know, it took several years. And if you want to go back to 1987, it took 25 years for that idea to become reality. So, I mean, I think it's, it's a long, slow process to get this kind of innovation. But I also think it's super important because, you know, the NIH alone is spending over $40 billion every single year. Right. So, you know, it's kind of like the saying that, you know, what's the best time to plant a tree? You know, 100 years ago, or today, right? Yeah, sure. It'd be nice if you planted a tree 100 years ago, and it was like a thriving, you know, huge tree that provides shade and so forth. But there's no, if you haven't planted it, then you might as well start now. Okay, so. So the field working on policy change for these big institutions, you know, probably does take some time, but all the more reason to get started. And hopefully, five or 10 years from now, there will be, you know, a set of sets of policy proposals, there will be politicians, and you know, maybe presidents and White Houses that are interested in taking them up. I mean, it's very hard to predict, and you have to be opportunistic when the chance arises. But, you know, all the more reason, though, to start arguing for these things and making the case and putting the proposals out there today.

Will Jarvis 36:16

And do you think, do you see that kind of as your main role is, you know, putting these ideas out into the ether, having policy proposals ready to go, and all these things like so that they are set up? So when the chance arises, you can like kind of, you know, help encourage, like, good policy be written?

Stuart Buck 36:33

Yeah, I would, I would definitely say that that's one of the main purposes of a good science project. Yeah, totally.

Will Jarvis 36:40

That's good. How there's a risk and acid step question. Because, you know, you got to work for these people. But how competent? Do you see is the federal government, like the funding, bureaucracy? Are they like, really competent, competent people just stuck in like bad incentive systems? Are they not competent people that and good, instead of systems? Like some mix? Of the two?

Stuart Buck 37:02

Probably, yeah. Probably some mix of the two. I mean, yeah. So so a lot of the scientific agencies like NIH, and CDC and FDA have come under a lot of criticism, lately, for being slow and responding to COVID. And for any number of reasons, right. But, you know, even though there's a lot of validity to those criticisms, and even though there's lots of ways you can point to, you know, things that can be improved, I mean, on an individual basis, like if you, you know, talk to talk to people who work at those agencies, I mean, you get the feeling that, you know, you sort of smart, competent people who are doing, trying to do the best they know how to do within a system that, you know, most of which is beyond their control. So, I think, I think that's probably true for the vast majority of public servants. And, you know, people that work at federal agencies, you know, they're, they're showing up to work, they're doing what they can do, they oftentimes might sympathize with, you know, trying new ways of doing things. But they don't have the time, they don't have the mission, or the mandate to do that. So. So they, they themselves might end up being a little frustrated by their inability to change the overall system. And so I think that that's in a way, you know, hopefully one way that outsiders you know, like, like think tanks or advocacy groups, and hopefully, one way they can be helpful is to, in some ways, like, provide a little pressure a little, you know, outside pressure that, you know, people who are sympathetic within the agencies will say, All right, now, I can point to that, you know, they're outside group saying that we should do X, Y, or Z, you know, so maybe we should we should try things that way. Right. So, that's, that's another way that, you know, kind of policy change can happen.

Will Jarvis 38:45

That's good. That's good. It makes a lot of sense. I'm curious, we talked a lot about, you know, government funding science. I want to talk about, you know, corporations funding science, we used to have these great kind of big innovation labs, Bell Labs, I think about all these, you know, Xerox PARC, a lot of these innovations came out of these kind of basic research labs at large corporations. And we do have, like, you know, Fang companies have a lot of research labs, a lot of AI labs in particular, which do seem to be creating innovations, but it doesn't seem to be at the same scale, at least to me. Is it your sense that corporate innovation labs, like don't work as well now? Do they work as well, but they're just not as publicized? What do you think's going on there?

Stuart Buck 39:26

That's a really good question. I mean, I do you think that, you know, like, like Bell Labs, I think they benefited in one way from having this from basically being associated with at&t that had this nationwide telephone monopoly. So they're making all this money because they're an ad nationwide monopoly. And so they don't have to worry about at that point, like they hadn't been broken up, because it was in the 80s yet, but they don't have to worry about money like they've got more money than they know what to do with they don't have to worry about like selling a product this year or that next year. Um, so they had the freedom. And they also, I think probably at the time, at&t felt maybe some political pressure to like, show that we're doing something good. Yeah, we're not just a monopoly nationwide monopolist, it's taking advantage of people, but look at look at what we're doing with our science, right. So if there could have been part of that, as well. And so anyway, you have a group of people at Bell Labs, who were working on problems that in some way touched upon, like, telephone communications. So that touched upon like, were transistors or information theory, and so forth, and so on, but had the flexibility and the freedom to do what they wanted, without the pressure to publish, or without the pressure to produce something that is a marketable product, you know, like, now, they have the more intellectual freedom than that, so. And they might have benefited of wealth from possibly from, you know, some of these discoveries, perhaps being a little more low hanging fruit compared to, you know, today, like, you know, inventing the transistor in the first place was a great innovation. You know, at a certain point, like, you know, we're trying to cram more and more transistors into smaller and smaller spaces. So at some point, you had a kind of limit as to what anybody can do there and maybe becomes harder to truly innovate. So maybe you have to come up with new questions, new ideas, new new fields of innovation, and so forth. But yeah, the results, it's hard to say, I mean, so like Google has been you used to be called Google X. But since they switched their corporate name to alphabet, now, it's just called x. And they have a big campus where they do all kinds of projects, but I don't know, I'm just I'm not, I guess I'm just not really sure what they've been doing, or why. So or what the outputs have been. And maybe that maybe they're doing great stuff. And they're just, yeah, I'm just not aware of it. So yeah, that's yeah, I'm not not really sure what else to say.

Will Jarvis 41:57

Yeah, maybe unclear as well. That makes that makes a lot of sense. Well, Stuart, are you down for roundup overrated or underrated?

Stuart Buck 42:06

Sure. Yeah. I can't guarantee I have any great answers. But yeah.

Will Jarvis 42:11

Well, I started I'll throw out a term. He told me whether it's overrated or underrated properly, right, and, and perhaps why. So the first term is flamenco, and I may have pronounced that bridge that pronunciation guitars,

Stuart Buck 42:23

flamenco guitars, and that's interesting. I mean, I feel like probably for a lot of people, they aren't rated at all, like, probably a lot of people don't even think about it very much. You know, probably, amongst classical guitarists, they might, in some ways, like, looked down. And Flamenco is like, you know, a little too, like kind of flashy, and not as like, pristine as is in musical terms or whatever. So maybe underrated from that perspective. Yeah.

Will Jarvis 42:57

That's good. That's good. You know, so you were trained as a classical guitarist, correct? Does any of that work, you know, carry through today at all in what you do?

Stuart Buck 43:06

And what I do? I mean, not in any direct sense. I mean, I actually, I recorded this classical guitar album, about 12 years ago, and it still makes money on Spotify. Some apps like Spotify will send me like a direct deposit of, you know, sometimes 100 $150 in a month. And I just looked at that, to my complete astonishment realize that the the top track on that album has been streamed over 7 million times. Wow, modify. So I'm completely amazed by that. But I guess that explains where the money's coming from. So I can't complain.

Will Jarvis 43:48

That's cool. Let's go. Houston, Texas, overrated or underrated?

Stuart Buck 43:56

Probably underrated. I mean, there there. There are lots of reasons to dislike Houston. I mean, it's, it's, it's flat. There's not a lot of you know, like, it's not like, you know, a lot of gorgeous scenery. There's no redwood forests, or mountains or anything like that. It's hot and humid. The whole the whole place, the whole landscape, you know, naturally wants to be a swamp. And so there's like, just like, swampy areas everywhere. And then lots and lots of drainage systems that are built to drain water out to the Gulf. I mean, it is one of those places where you think, Oh, my God, how did why did people ever decide to live here when they hadn't invented air conditioning yet? But I guess because of the availability of ports and the Gulf and so forth. But so yeah, I mean, there's there there are ways in which is underrated. But it's a bustling economy. It's extraordinarily diverse and one of the most diverse cities in the nation. So you have lots and lots of people from around the world that come to Houston because it's easy. to buy a home or to find a job. And so that makes it a kind of diverse and a place with a lot of vitality and that way. So, yeah, there's there's a lot going there's a lot. There are lots of ways to like kind of live a good life in Houston if you don't mind the heat.

Will Jarvis 45:17

It's a good deal. It's good to new science, Alexei goosies, new science overrated or underrated.

Stuart Buck 45:22

That's interesting. So maybe, correct. I mean, can I say correctly rated? China thinks holy? Yeah. I mean, I think it's a very ambitious idea. I mean, I've heard Alexei say, you know, his ambition is to form a new NIH, which is, I mean, if you think about it, that's the astonishing, ambitious, because you know, NIH, as I said, 90,000 grants 40 possibility a year. So, I mean, then in that sense, it probably that doesn't seem likely. I mean, but if you can direct enough philanthropic funding or prep, I don't know, perhaps over time funding from elsewhere, maybe funding from industry, I'm not sure. into, you know, giving scientists training of scientists and giving them more freedom flexibility, like some of the ideas were talking about earlier. I think that that has a lot of potential.

Will Jarvis 46:17

That's good. That's good. Yeah. Is funding academic research? Is that underrated or overrated?

Stuart Buck 46:23

I think you must pick up on that, because I wrote about that recently. So it's right. Um, I think it's something that, to me, has been underrated or under provided. And maybe that's the better way of putting it. But I feel like that a lot of effective Ultras, particularly on the kind of global health and development side of things have maybe arguably gotten a little bit stagnant and their approach to giving and, I mean, it's like, they've been talking about malaria and bed nets and do warming pills. And, you know, a few very discreet interventions that they value, because there's there's been a lot of evidence that they work. But I feel like the the scope and scale of all the problems that humanity deals with, seems a lot broader than just like, you know, three or four interventions that where you have the absolute best evidence, I feel like that there, there needs to be a bigger and broader push to come up with new ideas and new innovations, new new interventions, new programs, new policies, and to develop more evidence and have a kind of r&d process that is laid out in a systematic, coherent agenda. And that directs a lot of money into finding the next list of interventions and ideas that would be tremendously valuable to the developing world.

Will Jarvis 47:48

That's great. That's great. Well, Stuart, thank you so much for taking the time to come on the show. Where can people find you? Where should we send them?

Stuart Buck 47:56

Sure. I'm on Twitter at? Well, it's twitter.com at Stuart Bach one. So the number one, and then also good science project.org. So

Will Jarvis 48:08

Excellent. Excellent. We'll send people there. I'll put his link down in the show notes. Thanks so much, Stuart.

Stuart Buck 48:13

Yeah, thank you. Really appreciate it.

Will Jarvis 48:19

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck brief and brief dot biz market analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

This episode was co-hosted by Lars Doucet.  

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars do say joins us as a co host.

Unknown Speaker 0:40

Well, what are you doing today?

emad 0:42

Um, all right, so lovely, foggy days, London.

Unknown Speaker 0:46

Awesome. Awesome. Well, thank you so much for taking the time to come on the show, we really appreciate it. Do you mind giving us a brief bio and some of the big ideas you're interested

emad 0:54

in? Sure. So I'm a recovering hedge fund manager. So I spent most of my career making rich people richer.

Over the last few years, I decided to make the world a better place. So when I was a hedge fund manager, I used to focus on emerging markets, video games and AI. And that was a lot of fun.

And what I really tried to do the last few years is to bring that all together to make an impact. So one of the key things is Education Initiative, where we're teaching kids literacy numeracy, in refugee camps and other places in 13 months, and one hour a day. And over the last few years, it's all been about artificial intelligence. First off, being the lead architect of the United Nations back COVID ai initiative, and then building stability over the last year to make sure the future of AI is open and free. And that unlocks all our collective potential. My small mission.

Unknown Speaker 1:46

Very cool. I love that, can you tell us about what stability is and why it's important?

emad 1:50

So I kind of looked to the future, and the AI that was coming this transformer base foundational model AI, that it's getting to human level. And I was like, that's cool. You know, it's going to be amazing. But then I realized that can only come from big companies, and it'd be closed. And web to as it were the classic web, it was AI taking advantage of our attention everywhere, right? We were the product. That's why it was really, I was like holy crap, it's gonna be much worse. We need to have something open. So we can have our own API's. And it needs not the big models but reusable models. And be wouldn't it be cool if actually reflected the diversity of humanity, as opposed to you know, all this AI ethics stuff about models that don't recognize black people? Because they're only trained to white people? Or like dispensing things? Like, what if we could actually make AI diverse and open? It's got so powerful, it can really advance us as a race and help fix some of this broken stuff that thing does. Because society is just chaos, saying, What's the opposite of chaos stability? Let's call it that. And let's get people from all around the world to build cool stuff.

William Jarvis 2:55

That's great. That's great.

Unknown Speaker 2:57

You just released a product, which has been really cool. We've been using it here and narratives to generate some art. It's been, it's been great. Can you talk a little bit about the product you just released? Open onto the web?

emad 3:07

Yeah. So there's this thing about models and products. So stable diffusion is the model itself. It's a collaboration that we did with a whole bunch of people and we kind of spill it, we took 100,000 gigabytes of images and compressed it to two gigabyte file that can recreate any of those iterations. And those, I like to call it a trillion images in your pocket, rather than a MacBook Air one or anything like that. It's the first truly global text image model. That's good. So it's fast enough, good enough. And I'd say cheap enough, because we want to have the hardware, but the whole ecosystem can build around this. So that was kind of our wedge products. And then we've got audio and video and other things coming. But we think this will make a big difference.

Lars Doucet 3:49

So can we talk a little bit about the openness aspect of it. And I want to later in this in this conversation, dig into some of the controversies too, and just meet them head on. But let's start with the open aspect. You know, there's currently for people who haven't been following the AI art train, you have. What is it open AI is product, which is Dolly? And then you have Google's product. I forget what they call it. The I don't think there's even like a Yeah, I don't think anyone can even use it. They just have written a paper about it. And then there's some other lesser models out there. There's also mid journey, which it was was quite impressive. And then there's your stuff. Those are the ones I'm aware of. And can you talk a little bit about why you specifically decided to make yours open, what you mean by open and how that contrasts with some of the other models that are out there?

emad 4:44

Yeah, so my team for the last 18 months have been building up the aarC and so the models that underlying the journey and one bow and all of these other things are actually from my team. We released the MIT open source so anyone can use it without attribution or anything like that. because they were fantastic, and they could do really descriptive art. But by themselves, they weren't good enough to do potentially challenging art, shall we say, the images, the models have got to the point now where they can basically do photo realism and things like that. So in the release of this model, that's also much, much faster. And we wanted to put out to the world, we had to have some special considerations around usage. This is one of the reasons that Google hasn't released their model dahlias behind a wall, which is sure I could do amazing things in that it gives you wings as an artist, it's like looking motorcycle for the mind is blatantly paid. But then what if people use it for bad things, and this has been the whole ethics debate focused on bad rather than good. And it's a complex one, like, you know, why don't people use it for bad things, because it's good enough. So in the release of this, it's not a classical open source model. Instead, it's a public release model with a range of mitigations, such as bad stuff classifier that's there by default, and an ethical use policy. So it's public release, and anyone can use it. But it's not truly like, you can use it for anything, obviously, you shouldn't use it for anything illegal, anything unethical. But our view was that by releasing this, so anyone could take it and extend it, provided they stick with the license, it would spark a wave of creativity around the world, because there's nothing like being able to develop new experiences on your own computer, without any specialist hardware. And again, it was a big effort to get it down to that it's nothing like being able to create something that is striking. You know, like Robin Williams says, like the last, or a Tesla Roadster in the style of Starry Nights, it didn't do that and understand that. So our view is very different, because, you know, we have a different approach to what is beneficial, what is right, and what is open versus a big tech company, which is a lot more cautious. You know, again, our focus is on Unlocking Potential in reasonable and ethical way.

Lars Doucet 6:57

Right. So what are some of those reasonable restrictions? You talked about that? You have, you have fewer restrictions than open AI, but you still have some? So what is an example of things I'm not allowed to do with stable diffusion? And I mean, that in the legal sense, not in the sense that I can download your model and remove the NSFW filter?

emad 7:15

Yeah. So you know, this is question between legality, morality and ethics, right? And they kind of legality you're not allowed to do anything illegal, full stop. Government will come off to you. Right. Right. Morality,

Lars Doucet 7:28

but that that goes without saying, like, if I create, you know, some class of images, that's illegal in my country, like the police will just enforce that. You don't have to enforce that.

emad 7:38

Yeah. But I mean, some of the pushback we've been getting is what if people use this to create hate crime images or illegal stuff. And the classical thing of open source is that you don't kind of restrict it, because the assumption is people will use it legally. It is another tool like Photoshop, which you can also use to create this. But this is particularly pertinent because of the speed. And so there is a question like, is it ethical to release something that can create bad stuff that speed? Our view is that the good stuff is far beyond that, again, there are ethical use restrictions beyond the legality, but we also specifically mentioned the legality of this, you know, but it's not a straightforward or simple thing. The ethical or moral side is a little bit different. Because, you know, in France, you can have topless ladies in India, you definitely can't, how do you adapt to different things. So rather than having a giant filter and deciding what is ethical and what isn't what's moral and isn't, as opposed to legality, which is separate, we took just a snapshot of the internet. So one of the ways I describe this as a generative search engine, like when you go on Google images, and you type in a search, you're doing it for a purpose to get that image back. This can generate any image from a scrape of the internet, which is biased, and does have not safe for work and other things. And it's up to you how you use it. We're very big on personal agency and kind of usage, whereas a lot of the big tech companies a lot more paternalistic, in that they're concerned about the downstream impacts, or ethical and business reasons as well. This model was also released by the University of Heidelberg compass team, who our academic partners who were one of the leads on this, and so it falls under European legislation. And then we are a UK based company, which falls under UK legislation. And then people using it for all around the world, which falls under different legislations. There is the model itself. And then there are implementations of it, like dream studio, where you're not allowed to create not safe for work, and it's not a separate kind of policy. The reality is that this is an emerging field. It's happening so fast that we don't have all the answers. One of the things we want you to do is broaden the conversation in particular. So people can both create amazing things. There were restrictions and guardrails legally, and then it kind of goes well now, finally, as part of the open, real creative ml license that we put it with. You have to include the license if you use it, or if you show it to end users stay things that they do have this ethical responsibility and reminding them this is a very powerful tool. That's a bit not normal, and there is a legal obligation. Although the likelihood of being enforced, it's going to be complicated to find the fine. They said, we call out people in public, we don't put it. And usually they put it afterwards because it's not an onerous thing. But again, it's just like you have a powerful tool, please use it responsibly.

Lars Doucet 10:21

What about this, as you made it, you know, much more open than the existing things, although it doesn't follow the technical definition of open source. So there's this other notion with these big models that are trained on these huge datasets, so I can run stable diffusion on my machine, but I can't train, you know, bajillions of images on my machine. So how much of a barrier is that? Like? That seems like a technical barrier to making it available to just every Joe Schmo. But how, what do you think of that barrier? Will it come down? And what have your efforts been in that regard?

emad 10:56

No, I mean, every Joe Schmo can actually use it. And if you've got maybe 3090, you'll be able to fine tune images on it. It might take a while. But it's actually accessible. Like

Lars Doucet 11:06

what? What is fine tuning me? Are you saying that I can actually like change the training? Yes, even with my local resources? Yeah, interesting.

emad 11:14

So what you do is you take this gigantic 100,000 gigabytes of images, and you compress it down to two gigabytes and this neural network have what's known as the latent spaces or hidden layers of meaning. This is what glasses or glasses that are glasses on the material that understands things in context, because it forms again, these hidden layers of meaning. So I can press brain, then what you can do is you can add neurons on, so you can fine tune it, for example, on textures. And then you have a model that's texture based. So we'll be releasing in the next few weeks things to be able to create textures, or pixel based art, or watercolors or classical medieval paintings, it learns from those as you add it to the training dataset, over and over again. And again, it does require resource, but it will work on the 3019 Nvidia graphics card, which I think is amazing, because people will create their own sets to create the base model, though that foundation layer foundation model, do you need a fricking great big supercomputer? Although, again, we took it down and massively the amount of compute needed for this model. Other models we're training are far larger like our supercomputers, the time passes in the world. But this one required like hundreds of 1000s of dollars of compute, versus the million or 10 million other models than before.

Lars Doucet 12:31

I mean, in the scheme of company financing, 100 1000s sounds, I mean, the number of zeros makes a big difference. Yeah,

emad 12:38

and 100%. Again, like we have one of the fastest supercomputers in the world. So we can do massive model training. But we wanted this to be accessible. And the model training code is out there. So people can take it and train their own models from scratch. Or they can use our base and train the new models. So like, right now, as of today, someone just trained animator fusion. So they took the damn guru dataset, and they created 75,000 images, and they've implemented that, that's now available to the world for a specified MMA model, and we expect there to be a Ghanaian model, a Malawian model, you know, we expect there to be a model just for for, that'd be very kind of things. I'm sure people will make specific models, like our business model itself is that we're going into content providers. And we're saying, let's tell you static, boring content intelligent. So you can have video game characters, you can have, beloved ice, you can have all of Bollywood in custom models, and then you have a range of accessibility to content, that's smart.

Lars Doucet 13:45

Can you lay out your specific vision for going back to the goods? You know, a lot of people focus on the bads, but you want to focus on the goods? What are the goods as you envision them? And in this week, since it's been released, all these advances have come out? Is it what you expected? Talk about your vision for why this is going to be brilliant, and, and how you would put that in your own words.

emad 14:09

I have a vision of an intelligent internet, where every person, company culture and country has their own AI across modalities talking to each other, augmenting our potential. And it connects our combined information and compresses it to knowledge. And in our context, it gives wisdom. So we don't have that right now, we don't have anyone looking out for us. Instead, it's centralized. And it flows through Facebook and others pipes, right. So that's what I'm trying to make it make us anyone can build these models for themselves with a company country culture. And that's the big vision of the future. In the week that we have, we can have history and launch. Maybe it's two weeks national two weeks to the day. I think we were meant to have this recording on the day of release and it was a bit mad. Rearranging, we've had probably better this way. Yeah, we've had 100,000 developers downloading it and Amazing stuff from animation to being able to flip it, and figure out the words that create an image, textual inversion, and all sorts of things have been created by the community, which we've supported. We supported people who use our API don't use, right, but it doesn't matter a billion people gonna use this. Just to put this in context, this wave of innovation has occurred with just 100,000 downloads, downloading at 25 million downloaded all language models. Every dev in the world is going to be trying this out, and we're doing hackathons across the world. And it's just gonna go exponential with the stuff that people create. Especially because they realize this is like a little tiny file. But it's like a universal translator in a way. People just putting words in and see it come out. But it's most powerful when it's in the pipeline. Like you think about it from a games developer perspective, you don't call this all the time. You just call it for character creation, you know, or character adjustment or something like that. And you have the thief and poke, and then image of any type will come out the other side. How cool is that? And players can share it and all these other things, because the same input going in couple of bytes. Just a word sentence can create a masterpiece on the other side. How insane is that? So I'm looking forward to people pushing the envelope or having insane things. And I reckon we can get this file down to 100 megabytes, well, and get it to real time as well. Yeah, one frame a second. 24 frames a second 100 megabytes, that's my target. If you get that then you can create a movie on the fly just from a description. And you've seen that with like Xander stourbridge, he had 64 different prompts. And it was the history of the world. And that's all there was. And it had frame interpolation between the different prompts and the latent space. And it started from the Stone Age, and it went to the year 3000 ad, like seamlessly from one to the other, just from 64 sentences. How cool is that?

Lars Doucet 16:49

That's incredibly amazing. Now, I'd be remiss if I didn't acknowledge the other side of this debate, which is a lot of my friends have really polarized pretty quickly around the existence of these tools. There's a lot of people who feel kind of threatened by this, and I'm, I'm sure you've received a lot of email over the last two weeks about this sort of thing. There now seem to be all sorts of people are creating all sorts of interesting positions like I will, I will use this but I will never use it to recreate the style of a living artist, or it's unethical to use generative AI art for reasons or whatever. And I was wondering, what arguments have you heard? And are there any that you find persuasive or coherent, even if you don't agree with them specifically?

emad 17:40

I think there's understandable. Anytime you have a big change, there will always be fears, and you can't dismiss them out of term. I think it's a complex thing. And again, more voices need to be heard in this because previously, it was just people deciding that you couldn't have the technology and other technologies out there. The question is, whose responsibility is it? We want to be a leading voice and having these discussions, so we're working with various parties, on things like artists fingerprinting tools, so they can opt out if they want, because style isn't copyrighted, but you still might not want your style copied? You know, there are kind of other people who are saying that there are valid discussions around the dangers of this misinformation and other things we're trying to focus on is building tools to combat misinformation and getting the awareness of this. Because we know state actors have this, this is something we found our language model papers, where a lot of the pushback was what if this is used for bots? Well, guess what? The bad actors have the bots and they had access to these models, before they went open source, open source kind of wasn't the thing. So I think that the main things here are that, you know, people feared for their livelihood, people feared for the negative impacts. Those are the two main arguments here. I think with the livelihood, there'll be brand new industries created from this, like if you get it now you're in the early doors of a technology is going from 5 million to a billion people. And we'll be in everything we see. There's no way you won't make money off that if you're trying to make money and it automates the boring parts of art in some ways. In my opinion, again, you may disagree with that. I think that the nature of the negative stuff is I trust the community more than I trust large corporations and institutions to deal with that effectively. I remember real large amount of trust in humanity and again, we've seen people building all sorts of amazing stuff and people using it for not safe for work but still legal stuff. You know, like again, it's up to us as a society to figure out what's good or bad as opposed to it being decided for us I think

Lars Doucet 19:37

what what is what is an example of something that you were surprised by that you also delighted by that came out of this? Oh, like like something like you would hold up as like this is a shining example of what our technology can do. And it wasn't possible before.

emad 19:56

image to image, taking children's little sketches and turning them into beautiful art is like one of the most amazing things like seeing it live in front of their play. And no, I didn't realize that it'd be quite like that. But you could just draw a basic shape and then all sudden boom, or take like a Lego thing that you built, and it becomes an entire scene in the style of GTA six or something like that. Like, that was just awesome. Also the other side turning images into text. I didn't think we'd get to that quite so fast. We sponsored research in there, but now you can go both ways. And the probability of that is just mind boggling. You know, like, I posted a tweet, I was watching Silicon Valley on HBO. And I was like, we created a compression engine to create a new internet. Like, I'm freaking Pied Piper. In a way, if we can go both ways. Like I hope I'm not Ehrlich or Dinesh.

Unknown Speaker 20:49

Ahmad, I wanted to ask you now about AI alignment. A lot of people are pretty concerned with AI aligned with human interest and what could go wrong. If that's not the case. You know, you've pushed a lot of innovation in the space, which has made people more concerned because they think the timelines are getting closer. Up to you know, a lot of people think about 15 years away from human grade AGI Artificial General Intelligence, what do you think about AI alignment? How concerned should we be? And if so, if you are concerned, what are you doing about it? That's stability?

emad 21:20

Right. So I think that's a great question. I think AI alignments, one of those difficult ones he didn't know actually seen it. And no one really knows what it looks like, right? So if you look at the metallic metal calculus kind of projections for it, it's like, just five years out, 10 years out, nobody knows. Because the pace that we're going, if I told you a year ago that you could make a cat night or whatever, or like a level of quality be like that wouldn't happen, right? Like when GPT, four hits, and it can do AP Bio exams, or whatever it's going to do. Like Wait, what, like being able to solve IMO problems, like I remember the initial method, but that was hard. And now kind of, they can do it with open out like the binder. I think that the original Eleuthera team kind of some of them are instability now. And some of them went to set up conjecture to do alignment as alignment startups and the Trump tropic. It's been a big focus of ours. But what I personally believe and again, this is my personal belief is that the best way to do alignment and reflect human values is to make it so AI is human, in terms of the diversity of humanities or humane, shall we say. So our approach has been to allow smaller models to be there for everyone, every person, culture, company, country effectively across the modalities, the closest thing to here that I see is data. So data by DeepMind is a giant auto regressive model. That's 1.3 billion parameters based on reinforcement learning things that shows elements of generalization. But if you don't have in your data set, like Indian ethics and Chinese ethics and other things, what are you going to have, right? That's going to be very different to if you have a Western oriented pile, or common crawl are the things where you're stacking layers. This is the also the implication of the DeepMind. Chiller scaling paper. So the naive interpretation about it, it's about training for more epochs to get to ensure optimal kind of outcomes. And one of the things we're doing is she'll optimal language models giving sweet. But the real upshot of that it's about better data. And what is the better data look like? So one of the things that we're doing is in our education initiative, you know, we're going, we've been educating kids in 13 months and one hour a day, internet in refugee camps, we aim and remit to educate millions of children. And we're going to build the best open source system inviting the world to do that. But the output of that data is also ideal for creating better AI models that reflect local diversity and culture because it learns how to learn. And if you've got that happening across the world, I think you're much better to have likely to have more aligned outcomes than if you've just got one type of dataset, which is the internet. And our internet has been optimized for engagement, outrage, and negative things, because those are the things that sell ads. So we need to create better datasets that are more diverse, better models that are more diverse, and then we're less likely to hold the paper clips and die, which would be great. That that really

Unknown Speaker 24:12

wouldn't be great if we avoid that. I'm curious, it seems like one of the next big challenges is going to be you know, where do you get data from it? You know, Lars Lars has talked about this a lot like what happens when you kind of run out of data that's available on the internet, like, what do you do next? And how these things can kind of be put together at large. Do you want to talk about that a little bit? You might be able to frame this question. Well, yeah,

Lars Doucet 24:34

there's two kind of aspects to it is like one, you know, I feel like you mentioned chinchilla, and there was an article on this wrong by nostalgia braced about chinchillas wild implications kind of implying that it might actually be the case that we are now data bound rather than scale bound. What you know that instead of just stacking more and more layers, that things are going to go more in the direction of you need more data and better quality data. And that's where the returns they are. Do you agree with that assessment? Or is there more to it than that?

emad 25:06

No, I agree. 100%, I think you've seen the last elements of this kind of scale pulling as it were. So obviously, you see palm, and then there's a big, some big models coming, shall we say, that show generalization above a trillion parameters. But they're not flexible and dynamic enough. So one of the things about pulling out our models is that a lot of people use it, and then combine them in different ways to have various outcomes. But it's about data quality, because we've moved from big data, which then targets well, or laws, etc, to big models that use structured data. And we've seen elements of improvement in that for extension, this is why again, at length about the pile, don't lie on 400, m, and then five b Lie on moving to more structured ones will lead to better results, because it's again, reflective of humanity. If you sit down in front of a TV all day, and you absorb information is great. But if you have a structured lesson that's optimized, it's always better. And that's what we need to kind of learn and train on. That's why, like I said, our approach is that we build national level models with open datasets for each country. In the middle, we go to the broadcaster's and IP to other content and build models for all these companies and corporations. And from bottom up, we build educational models, for Malawi, for Bangladesh, for other countries, where it learns how to learn between five and 18. Because that's the best to teach. In fact, it's reinforcement learning with human feedback, right? So GPT, three is 175 billion parameters. When you see how it's used, how you use the models, like how the models are use you now, you can compress it down to 1.3 billion parameters, which is what using the open AI API. And we've got a whole lab around this on contrast of learning called carpet that really focuses on these elements to build on the code models and other things that we have coming up.

Lars Doucet 26:49

What about the other aspect of data is when so there's this notion of I use a metaphor of pre 1945 steel, which is that steel manufactured after 1945 has radiation in it, because of atomic bomb tests. And so for certain applications, there's certain kinds of steel that you have to go back and source historical steel to use. Because only those don't have the radiation silver didn't use to tarnish before the Industrial Revolution, because now there's too much sulfur in the atmosphere. So I use this to draw a metaphor between pre 2021 data, right? Because we're at least in the domain of art, because now stability.ai, and Dolly and all this are now adding AI generated art into the datasets. And before that, you just scrape the internet for images, you can assume that they're not created by our AI are the inflection point they are, is there any kind of danger of stagnation or weird kind of effects on your model now that you're consuming your models on output? Well, we

emad 27:53

did that for stable diffusion. So stable diffusion, Alpha was led to the simulacra bought a static data set. So we got people to rate the outputs. And then we fed that back into the model. That's why it's so aesthetic, and it's compressed, you know, we had an element of kind of our lhf at the end effectively, just like some of the new upcoming big models from people that will not be named had that as the final steps, instruct elements really help guide the final part of tuning for these models. So models are dogfooding, the previous elements as it were, going forward, this explosion of images that you see, it's not about the amount of data, it's about the structure of the data. Again, if you look, for example, at a Luthor AI releasing the pile, the pile was nearly a terabyte of highly structured data, our KYV and PubMed and things like that. That's been used by Microsoft and Nvidia and dozens of others because it's actually bothered to be structured. You don't need terabytes. Like how many everybody says things do we have? We have massive amounts. It's about structured data. And that was highly structured and better than common crawl that was used in the original GPT. Two and to an element DPT, three GPT. Three had some data structure in that. So

Lars Doucet 29:00

for my structure, you mean you mean clean? You mean clean data, specifically, right?

emad 29:04

clean data similar to how one of the things we then did is we took the aesthetic scoring of this data set that we really simulacra, but captions. And we use the clip model to figure out the aesthetic subset of lie on to be 2 billion images for 600 million images that were aesthetic, because things like PowerPoint slides are not aesthetic, but it does catch other things like Pokemon are not aesthetic. So it's very bad at Pokemon. As an example, we need to find a way to fine tune them back in they can look, let's face it, right. Faces and things. It's very good. Because that's what people and cats are very good at cats.

Lars Doucet 29:41

Yeah. So when somebody talks about diversity and stuff, you know, aesthetics is is highly subjective field, like is the answer there to create a lot of different models that are fine tuned on. People who think Pokemon are the most beautiful images in the world?

emad 29:56

Yes, the the way is to allow diverse Do you have models as opposed to have one model that tries to capture diversity? So the way that daddy two has tried to do it is they randomly add for non gendered words, genders and races. So you'll get a female Indian sumo wrestler, when you type in sumo wrestler, which could exist, you know, probably not many of them to be honest. Whereas if you have

Lars Doucet 30:20

like, like they literally, like they literally just add the words to the end of your prompt silently, semi randomly.

emad 30:26

Yes, you can do that. Because you can say sign a man with a sign holding up, and then it will say, like, black, or Latin American, and things like that, because the system picks up on those words.

Lars Doucet 30:38

Oh, that's hilarious. Interesting. Yeah,

emad 30:39

I mean, when you look, this table diffusion output is the raw output of the model, because we wanted to see how people did that before we added all the attributes mid journey takes label diffusion, or latent diffusion, and then adds processing steps on the front, and processing steps inside. Similarly, Daddy does both of those. So when you say well, diffusion correctly, you see something like magenta betta, which is beautiful and amazing, you know. But we don't want to filter inputs and outputs, we leave that up to the end user. But then like I said, it's going to move from people using it to people creating their own, especially stable diffusion. 1.4 isn't really what you should be fine tuning on, because in the next few months, you'll get version two and version three, and stapler diffusion. Stable diffusion is probably what you should start training on. To be honest, like this is just a test at the moment. But this diversity, again, we can think about this right data has three, you have data information, and then you have knowledge, and then you have wisdom. That's the way that I kind of put it. So the 100,000 gigabytes of images that we have from lie on TV for the actual training set, that's information, it compressed into knowledge, because it figures out the interconnections and latent spaces between words. But the wisdom comes from how you use it to figure out your own aesthetic in your own context, whether that was a person or a community or something else, and then you create your anime model or your textile model or something else. And that means that then when you combine these models together, you can learn from them. So it's like you put out the framework, and then you bring it all back in to create a more generalized model that's based on the sub model datasets. It's almost a trainer model kind of thing to kind of teach the student. But then also, it's reminiscent of kind of the MLE approach, right? And this is why some of the more interesting architectures coming out, have gone back to kind of Emily from kind of highly condensed model architectures.

Lars Doucet 32:25

So one of my thoughts here is, you know, there, it's accelerating so fast like after release this all these applications came out, I'm most interested in how this gets used in pipelines, right? We're already seeing Photoshop plugins where someone's like, give me this give me that, then put them together, erase in fill out fill, you know? Is it going to be possible for this to be used in video and animation? Like am I going to be able to create a model sheet of a character have it understand that the the cheekbones look like this, and there's always exactly this many eyelashes and little details like that, and then be able to, you know, get a walk cycle, do things like that animate on Tuesday animate on ones, those sorts of are, we gonna be able to fine tune it to that degree? Or is there gonna have to be a lot of tooling in the middle to handle that sort of deal. With both

emad 33:16

right, you can actually literally create anything with it now, because you have a generalized text to image architecture, but also image text architecture. So if you utilize something like style clip, or something like that, you can kind of do dynamic adjustments. But being able to understand what in an image is what you will move to the point where you don't need to have fingers anymore. You can just say, I want this adjusted in this way. And then it will adjust it just like the neural filters in Adobe Photoshop, right? For the animation architectures and things like that, again, we really have examples of being able to use codecs and other code models to build stuff in Blender. You know, what is the 3d file, a GLB file is a JSON plus a bunch of flat textures. And then we also have kind of text enough. So I think all these architectures will be able to go 2d To 3d to animate it, they're all their game studio already has animation inbuilt because the team that built it are the same team that's building majesty, diffusion and disco diffusion are these. So I included a example on my Twitter, have a sneak peek of the animation features that can do 120 frames every four seconds to create seamless animation. So some of these things, but it's not integrated the kind of dynamic prompt analysis, the ability to do in painting with just targeted things as opposed to drawing these will all evolve and again, people will mix and match the pipeline so they have different models for different things. This is also important because one of the things I recommended to people is the stable diffusion model has a very small clip. We have a bit G coming out this week and then a bit ah, that will make it go way beyond daddy to Why don't you use it with a model with a different architecture like the VA architecture that you've got and cry and or daddy Mini. Use that as the first step and then you stay with the futures and seconds To get on Mario and others have shown what type of amazing app that you can get, do multi step outputs with the best models there. And then do dynamic targeting of these various elements to do text to 3d mesh and other things. And you can use existing libraries, then don't try to want to short everything, or even try to show everything, just be intelligent and realize what it is, is this translation engine.

Lars Doucet 35:21

Right? So you've built all this amazing technology, and then you you've made it open within the confines of how that's possible within this sort of technology. Can you describe a little bit about how your business actually works? You know, obviously, Google and the others have decided that it's best to keep it closed and satisfied as a software as a service for the audience. You know, but what is your plan to turn this into, into a, you know, sustainable business.

emad 35:46

So for example, we announced our Indian partnership with Eros. Last week, we have an exclusive partnership and all Bollywood assets. And we're going to turn it all intelligence to have dynamic Bollywood things. So you can create your own Bollywood music videos, and audio and images. And we have a revenue share on that. We have world class industrial API's. So if you want to do 100 images in four seconds, you can do that for your API, which you can't do on your local GPU. But for G dream studio, the next version of it, you'll be able to use your local GPU or the cloud GPU with our brand new interface. So we've got a product strategy, which has some amazing products, that dream studio for animation and prosumers. We have a API strategy, where we have some of the biggest companies in the world, plugging into our API, and lots of announcements on that. And we will be the lowest cost API provider. Because we've got that scale. Plus, you get the latest models from our API before they're released. So I think today, we're releasing 1.5 via the API, and a couple of weeks, we'll release that public, we just got a few things to sort. But then version three will be short after and things like that plus are specified in painting models and other things, plus brand models from various brands that you can incorporate, those won't be open source, because they're not benchmark models, they're just fine tunes that we did like anyone else, we have a commitment to releasing the benchmark models to build the ecosystem, within a couple of weeks, you know, of them being available. So and then the final thing, like I said, Is this for deployed thing, if you are a brand with an asset, like a game studio, or a luxury brand, or cartoon or something like that, you can train your own model, but that's hard. So just we can go in and train it for you. And then we support the community and training their own models, and then people will build businesses, for the SME sector training models for that. And then that will be available through our marketplace, stability approved models effectively.

Unknown Speaker 37:32

That's great. That's great. Man, I'm curious, what did the next 10 years look like for you know, stability? Ai? You know, what do you want that to look like? Do you foresee just you know, running this for a long time? Do you have any big goals within the next decade?

emad 37:46

Yes, in the next decade, every child should have access to the absolute best education, health care, and resources they need. Like I want every country to be running on open source intelligent architecture, to make people happier. I think we'll have real time, Ready Player One type experiences for people who want to share and communicate, and it's gonna be freaking awesome. That's kind of it. I love it. I love it.

Lars Doucet 38:12

So one question is about your educational stuff. We've kind of zipped right in the middle. While we've also been talking about kind of the kind of very narrowing in on the AI art stuff. So you've got these, have you got an actual educational platform that you're released now? Or is that still in the works?

emad 38:28

We've been deploying for years. So we have randomized control trials with the United Nations and UNICEF and the International Rescue Committee and others, showing efficacy of 76% of children in refugee camps get literacy and numeracy and 13 months and one hour a day. And now the remit is to take that and invite the world to say, if you have an entire country, we can't say which one just yet, but it's been mentioned some places, or multiple as we will have to educate and you control the hardware software, deployment and curriculum to a degree, how can you give them the biggest potential and happiest, and I think that's something a lot of people will be interested in participating in as a global project. And you know, that will be better than what we have right now. Because what we have is non personalized education, non feedback education. So we have a platform now that's done, and still does great. So let's make it smart, and help them achieve their potential.

Lars Doucet 39:22

Right? So how do you feel about intellectual property in your brave new artificially intelligent world, you know, part of your message has been, you don't want to be close. You don't want to be open. The old companies want to basically create a mainframe that you connect to to do your AI. You're talking more about the people sort of owning the AIS, and rather than have one that purports to do everything have diverse models. How does intellectual property fit into this? Who owns this stuff? Who owns the data? Who owns the models? In as you see it if you just wave a magic wand?

emad 39:56

So a benchmark models of the country international level that suppose Some open datasets and mining of public information right along with UK and EU laws that are very specific on that. But then the individual person's models, that's their own data, that's their own copyright and things like that. Companies that we go into the output is owned by that company and then licensed. So if you want to use Bollywood stuff, they retain the license, but they license it to you to use in Photoshop to have that dramatic picture of Shahrukh Khan, or whatever you know. So that's the vision that I have whereby ownership goes back to the individual and the company, it's retained that if you use stuff, that's copyright, if you create something that's copyrighted, just like in paint shop, or some arm's length or something like that, you try and sell it, then you're violating copyright, you know, and then Disney will come after you if you do Mickey Mouse or whatever, again, do things that are right, but at least they'll now be licensed options. And I think this is the thing, when you have infinite abundance, you need to have an element of authenticity. So this is why I don't think it's NF Ts, it's maybe something else. Or maybe it's NF Ts, you know, in terms of just that shortcut to support, because right now what we did, we went to infinite abundance with things like Spotify, to get the music and for example, you have a million listens, and you get $2,000. That's not right. There have to be better ways to create this, make it dynamic, make it intelligent, I think you need blockchains. Maybe you just need to have a trusted protocol. But that's something that's a little far away. Let's get people building models versus the primitives, and then figure out how to get them to talk to each other.

Unknown Speaker 41:29

I love it. I love it. Well, Mike, thank you so much for joining us today. Where can people find you? Where should we send them?

emad 41:37

So you can go to stability.ai There's our communities there. So you know, we have harmonized coming online this month for music, we're going to release off as models their dance diffusion and a couple of weeks later on for images and Luther for language opened by ML for our protein folding and other work and many other communities kind of coming up. Yeah, well, socials are all going live and you can find it from there. Or you can just follow me on Twitter and of course the stable diffusion discord. Please join us for that.

Unknown Speaker 42:06

Awesome thanks to the monitor mod. We really appreciate it.

Lars Doucet 42:09

Thanks very much,

emad 42:10

everyone. Thanks guys.

William Jarvis 42:11

Bye. Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Well, Nathan, how are you doing this afternoon?

Nathan B 0:40

I'm doing good. How are you?

Nathan 0:42

I'm doing great. Thanks so much for taking the time to come on the show. Do you mind giving a brief bio and some of the big ideas you're interested in?

Nathan B 0:50

Oh, that's a good? That's a good opener question. I like the big idea aspect of it. The bio is I am kind of like in the intersection of writing and Technology building. And like business building, basically, internet business building, I've kind of worked on a bunch of different stuff all circling around that. So right now, I'm the co founder of a company called every that is a writer collective focused on business specifically, we published writing that like explores the nature of businesses and humans that that, you know, work in and operate these businesses. So everything from, like, you know, exploring your inner demons that may lead you to make certain mistakes when building a team, to how our Spotify is earnings looking, you know, a lot of a pretty wide range. And that's a lot of fun. I spend a lot of my time writing and editing and like, you know, recruiting writers and just thinking about, you know, where we want to take the company. Before this, I was the first employee at substack, which ended up being a thing that I don't have to explain as often what it is I used to, which is really cool. Because when I was there, it was like, what's that, you know, and so it's really, really amazing to see what the founders have done with that. I was only there for about like, a year and a half. It was kind of like a short ish stint because I really do like a broad variety of things. And they just needed someone who's like an amazing programmer. And that's one of the things I do but I'm definitely not amazing at it. So it was kind of like we did it for a little while and we all liked each other but it was like the skill dropped to be done need thing was not exactly a fit. Before that I was head of product at gimlet media podcasting company that got acquired by Spotify started a company called hardbound that was like a mobile tappable storytelling format as like very visual and kind of just a different kind of pacing and feel from kind of like a slide deck almost. Kind of kind of a feel. So yeah, just done a bunch of stuff, sort of like that to varying degrees of success. And hopefully I can keep doing it for a while because it's it's fun facts and ideas, ideas and think about so mostly these days, I'm the ideas and thinking about are kind of like what I said every is thinking about, like the nature of businesses and humans. Specifically, I'm really interested in strategy. Like, I feel like there's this whole genre of like, pseudo or semi academic literature around how to company like, what kind of decisions should companies make that would like lead to success? I think of it as like, like economic patterns, you know, it's like applied micro economics or something like that. And, you know, it's like the kind of stuff you learn in strategy class at business school, or whatever, but I haven't gone to business school. And so I want to learn it. And I'm just exploring the literature on my own and writing about it and trying to trying to apply it so that with like, a strong dosing of like, kind of personal reflection stuff, I would say, in definitely all that kind of like startup in media oriented.

Will Jarvis 3:39

That's cool. Let's go, I want to ask a question that kind of ties all these things together. You know, you're studying strategy, you work in media, you've worked in a lot of media companies. How do you think about positioning every in a way that it can, in some sense, avoid competition? That seems like the big problem with media companies, is it's very difficult to avoid competition, because you know, there's like, you're not just competing with, you know, newspapers, you're competing with, you know, Wikipedia and YouTube and like, yeah, you know, maybe I do a podcast and you know, like the transcript and then if someone wants to read the transcript, and you're competing with that, how do you think about, like avoiding competition as a media company?

Nathan B 4:15

Yeah, I think I think it's a really, really important question. And it's a hard one. And I don't think that we are amazing at it yet. There's like a theory we have of a flywheel that we're trying to build. And I think if there's a sort of meta reflection about startups that I've learned, it's that kind of startups, like, it's good to have a good strategy. And it should be basically simple. And then like, 99.9% of your time, and energy is focused on all the complex difficult, like execution stuff to get that thing going. And so you have to know about strategy because the like thing you're building needs to actually be in the kind of form of a defensible thing, but like, very early on, you can kind of nail down some really simple basic And then probably you're basically sticking with that. And like maybe there's some weird pivots or and you're totally wrong, or there's some inflection points or whatever. But like, for the most part that the kind of strategy part should be simple, but the execution part is just really, really hard. So But to answer your question at the more like object level, or I can get more specific about, like, what is our defensibility. So like, our goal is to be a place where if you want to reach a certain type of audience, you definitely want to go as a writer, because let's say you want to write about, you know, anything related to like the nature of businesses or humans, like basically the topics we cover, which I think a decent amount of people do, our left hand is like business section of the bookstore free, you know, we're gonna be able to cover a wide variety of sub genres and stuff within that. And to be able to personalize content to users over time, but like to start, we're very like, kind of like Silicon Valley, like tech twittery oriented. And so if you want to, if you want to do that kind of writing, or do that kind of thinking, what are your options, you can start your own sub stack, and you it's entirely on you to get anyone to pay attention to it. Okay, so then you have a Twitter account, and you do some tweets, and it's entirely on you to get anyone to pay attention to it. At some step, every single bit of audience is decided by a human or an algorithm being like, actually, other people should also see this and you don't really have direct control over that you can submit the content, a lot of places, that's what's in your control. But the exposure that that content then receives is up to other control of other structures, like people who see it and decide to hit the retweet button, or algorithms that say we think this thing is good or editors that say we think this thing is good. And so um, you know, substack, unlike YouTube, or Tik Tok, or a lot of platforms is not doing algorithmic recommendation of content, you can't just post something to substack and then get automatic audience. And email is a great medium for retention, it's not a great medium for virality. Sometimes people forget things a little bit, but it's not really like a place. Usually your the vast majority people grow on substack from other places like Twitter, there's like this sort of symbiotic relationship there. So every we want to be a place where as a writer, maybe you just want to do one guest posts, where we sort of syndicate something for you or you write something original for us, and we can send it to 50,000 people, which is our current size. And that's pretty great. There's not a lot of places where you can go and someone just decides they think your thing would be good for their audience. And 50,000 people will see it in the future. Hopefully, that's 100,000 people, a million people. And maybe actually it's you know, we have a million people on our list. But we know the 100,000 that would be into your thing, you know, and or we can send it to a small subset, measure the reaction and then start gradually sending it to bigger and bigger waves of audience. And so it's just all about audience aggregation, basically. And we have a philosophy of sort of hybrid human judgment and algorithmic, sort of automated judgment. But the algorithms are very opinionated, we think about them, like automated editors, rather than like some neutral platform, you type thing, like we only put stuff into the algorithm that we already basically think is good. And then from there on out, it's just a question of making decision, human decision making more efficient, basically, and giving the human superpowers and sort of like X ray vision of like, how is this actually performing based on our best ways of detecting that? So anyway, kind of long winded answer to your question. But audience, it's all about audience aggregation for us. Yeah.

Will Jarvis 8:26

So it's something like a distribution monopoly at the end of the day is what it? Yeah, really is. Yeah. And it's

Nathan B 8:31

like, it's hard to say monopoly in this context, because it's like, you know, there's other people who are gonna also have audiences, and we really liked them. But we think we're more focused on trying to find people that, like, if you have a really, really popular newsletter, and you have, like, you know, 100,000 subscribers or more, but you've built that on the premise of, it's only your work, right? Right. It's hard to all of a sudden go from that to like, the next day being like, and actually five days a week, I've got other people's writing, and you're like, that's a whole complicated, completely different system. And that's the path we're on and figuring out and the 50,000 people we have on our list are like, expecting different people all the time. So that's the it monopolies maybe a little bit strong, but it's definitely there's something sticky about the way that you've got your audience and their expectations, allowing you to do certain things.

Will Jarvis 9:22

Definitely, definitely, that makes sense. And how do you go about choosing, you know, writers or content creators? Do you look for a certain spark is there like, you'd look for just somebody with a large effect size, like just like something like really grabs people's attention? It's really interesting. Like, is it just kind of all qualitative? Like, how do you you mentioned, like, you also use, like, algorithmic, you know, algorithms to help make decisions, but there is a human element. And what does that human element look like?

Nathan B 9:48

Yeah, I mean, it's just purely like, do I like this? And that's for me, like, and I'm not the only person right? So it's like Dan, my co founder, does he like this Katie, our editor does she like this like Evan, when are you He writes a newsletter called napkin math does he like anybody who's kind of like in can use their power to bring other people in. And it's great because we kind of consider ourselves to be very pluralistic, where it's like every doesn't have to have a real uniform tone or vibe SP uniform enough to like have the audience have us be able to connect the dots right between writer and reader to have the writing that we choose, be pleasing to the readers. But it doesn't have to be so uniform that it's like one singular taste. But definitely, if there's one main thing that we've learned so far, it's like, if there's something that we really like, and it's on the topics that we cover, for, you know, the same type of you, all the people who are on our list are gonna like it, too. It's usually not a huge surprise, when something does really well or not, well, there's surprises for sure. It's not like we can predict every time how something's going to do, but it's to the point where it's like, okay, like, we kind of have a feel, you know,

Will Jarvis 10:50

gotta got an eye for it, at the end of the day,

Nathan B 10:52

at least for serving our current audience. Now, the big question is, how do we get to 10x? The size of audience like, maybe what got us here won't get us there. And there's like, a whole other problem there. But like, it's very, like, I can tell you like the, the things that go into what I like, but it's very much just like, you know, the feeling when you're reading something like, Oh, this is interesting. Like, it's just like this, this little thing where you're like, I am actually interested in this. There's some spark here. And if you feel it, then it's there. And you don't have to overanalyze what made the thing happen, you know, because other people will like it, too. So you don't have to know why.

Will Jarvis 11:27

That's right. It's kind of like obscenity, you kind of know it when you say it like you like all that. But that's interesting.

Nathan B 11:31

And it might help to know why it's fun to theorize about why, but all you have to do is just detect if you're feeling it or not, and then pass it along, if you are basically.

Will Jarvis 11:40

That's right. That's right. I have do you think about expanding your audience to yourself, you know, is it you know, like every audience, is it just trying to attack like, in concentric circles, like things that are closely related to your core subject matter? And kind of expanding out like that, that strategy piece? Or is it kind of just a different approach is that adds or something else?

Nathan B 12:00

Yeah, um, you know, I wish that we had this, like, more figured out. So what we've done is just took to start, like my co founder and I, we were like, it would be cool to create some sort of, you know, collective type newsletter organization, instead of everybody doing completely their own thing, because it's so hard to do it on your own. And so we'll start by just writing our own newsletters, and then we'll see if other people want to write newsletters with us. And we just sort of like gradually added people from there. So it's like a whole bunch of Venn diagrams with different levels of overlap, depending depending on the topic, and the vibe, and whatever else. And it's all vaguely costed around, you know, tech ish stuff. And we went through a time early on when we were like, maybe we should like, let's be really deliberate about this. Let's think about it like risk, like, what's the map of the world? What are all the topics? What topics are connected to what other topics? And how do we like, go from here to there and be like, let's cover every industry. And we just found that that's really artificial, like, there are people interested in a very specific industry. But you know, there's, there's more, I think, important ways of slicing and dicing interests that are less obvious. And almost in some ways, the more obvious it is, the less powerful it is. Because it's like, you can just ask me like, Nathan, are you interested in startups? I'm like, I mean, I guess like, basically, yes, but it depends, there's 90% of startup content is terrible. I have zero interest in it, you know? And so it's like, how do you then apply that it's like a form of whatever, like gentleman amnesia, or whatever, where, you know, the idea is, when they're talking about something related to you, you're like, that's all wrong. And then when they talk about something else, you think that it makes perfect sense. So it's like, there's this sort of form of showman amnesia with, like, figuring out how to segment audience interests, where it's like, well, you're talking about me, and like, startups, I don't know, like, it has to be good. 90% If it's bad, whatever, but then I'm like, oh, for other people, I can just cover like, you know, health care, and we'll just find a health care person, and it'll be fine. And it's like, that's really not how, like people's passions or interests, or feelings, like work, and you have to go on something more organic than that. And I really wish that it was more like we could be more deliberate like Uber, you know, we're going to start in San Francisco and go to New York and LA or whatever, or like Facebook, we're going to start at Harvard and go to jail, but we just don't have anything like that. And I think I've pretty much given up on it. So could be foolish, but it's

Will Jarvis 14:19

something more like you should chase the vibes or like in your particular context, it's better to chase the vibes and then try and like, you know, be very like, you know, maniacal, methodical, and segment these things out and go from there.

Nathan B 14:32

Yeah, we've started to become more opportunistic about just people basically. And it's like, who are the people who we know who know us who value our audience who are wanting to write or you know, create content of some sort? Yeah, who we let's try and make sure we're in the conversation with all those people. And let's try and understand what their goals are. And let's make sure as we keep going that our system is basically coherent, and our offer to writers is one that gets a decent portion of those people to like, say yes basis. declined. And I think we can kind of keep expanding that way, the bigger rate limit on us right now is like, basically support structures for those writers. Because a key part of the trade, like the value prop to writers is basically like the defensible thing, I think is like audience, but then there's also like you want, you know, editorial support a lot of people do, if you just wanted the audience, maybe you're willing to do one pose with us, but are you really gonna, like, want to do a post every week with us like in entail some sacrifices of having a little bit less pure independence, it helps if you're like, you know, I would love an editor. And a lot of people do, like a lot of the best writers really love the relationship they have with their editors. And so but that's tough, because as an editor, you have a very limited bandwidth for writers. So you know, we recently hired an editor and like, we're figuring that whole thing out. But that just takes a lot of time. And we don't have a lot of experience with it. So we're trying to those are kind of the rate limiters on us more so than like topic identification, or something like that.

Will Jarvis 15:58

Gotcha. So it's really like, its support for the, it's not so much the audit, you need to consult the audience problem. But it's like, how do you scale up things like editors, when you know, that just takes it just takes takes a lot of time? Yeah. And you get that manpower to kind of do that. That makes sense. I want to keep talking about strategy a little bit, I want to talk about venture capital, you wrote a piece, which I really enjoyed. And I have this general question about it is, in general, should people be more kind of skeptical, or less willing to go out and try and raise venture capital, it's kind of the, the high status thing to do in tech, you know, you have an idea, you go out, you raise capital from one of these top quartile firms. And that's kind of like a badge of honor. Right. And there's some sense in which it's like a Keynesian beauty contest. And if you get one of the top firms to get your mark, it's easier to hire, it's easier to, you know, raise money in the future. There's all these positive signals that go along with it. But there are some downsides, students dilution, there's, you know, incentive alignment can be a problem. So can you talk generally about just just venture capital? And how founders or people trying to start companies should approach it?

Nathan B 17:04

Yeah, I mean, I'll preface it with, I really can't tell anyone what's good for them, right? Like, in most of the posts is, like, here's how my perspective has changed over time. In case like me, you kind of feel lost, right? Which, like I did for a while. So I, you know, there's like debates that breakout in Silicon Valley all the time over, like, you know, how hard you really need to work. And like, if you're not working weekends, you're gonna fail, and someone else is like, this is toxic, never join their company. And it's like that, you know, I'm not really interested in like, right, right, parking, the next iteration of that debate, like, you're gonna work weekends, amazing. If you don't also amazing, I'm glad that there are options for different, you know, people to do different things. So for me, the way my thinking has evolved is, I kind of had this realization that I had this whole set of like aspirations, and this whole framework, this whole kind of like consciousness almost, that is, you know, the saying, like, the medium is the message. Like the the medium is like spreadsheet math, about risk reward return profiles for like giant PE funds, and funds of funds, and LPs and stuff like that. And the message is venture capitalists and 20 Somethings who want to like make a dent in the universe, in this oddly really specific way of like, the kinds of things that can like, create a really great 10 year risk adjusted return profile, when you batch them in lumps, where you know, nine out of 10 will fail and will not succeed. And it's like, How funny is it that there's like an entire generation of people who like the thing they wants to do, just so happens to line up with like, the spreadsheet math, it's like wild, you know, and it's so like, for me, it's less like, it's a bad path. And it's more like, did I consciously choose the path? Or did I get caught up? And what I didn't even realize was content marketing, to create, like that main organizing principle of aspiration in my life, you know, it's crazy. And so, I think the more that I thought about what kind of company I actually want to build, I realized, I think there's a lot of ways in which is not that aligns with venture capital. And we raised some money, and we told our investors this before we raised it, but basically, we're like, look, you know, odds are, we won't do it. But our goal is that this is the last company that we ever worked for, and that we keep compounding it for, like a really long time. And the key reasons why something would become not the kind of thing that the founder wants to work for anymore, is usually when really stops like being fun. And they feel like the, you know, it's sort of like, Frankenstein has grown up and left the house and you like, can't stand to see him anymore, kind of right. Because there's like, all these people and you even know what they do. It's like, founders, like the relationship with our companies is like really weird. It's like, when you have a child and like they become a teenager and like, they hate you, and you kind of are annoyed by them, and then they go to college and that relief, but then there's the thing in real life where like, you know, you sort of like grow close together, like again, at some point after you've gotten some more distance and you can have like an adult relationship with your kid, but like founders don't usually get that with their with their companies. They just kind of end up being weird. Didn't like fading into the background and there's like, bitter feelings and like, I don't want to feel that about this company, especially because I think is easier to think about every this way because it's like most like, okay, basically, we're a magazine at some level. And we're like, trying to be a fancy technology enabled internet magazine, like, you know, basically a magazine and like, look at magazines, like they're like lifespan of them as long when they work, right. And there's like this very Lindy thing about them. That's like, The New Yorker and the Atlantic. It's like weird that it just so happens that the like, really interesting magazines today were created, like over 100 years ago. I think that it's like there's something about looking at the DNA of similar types of things and looking at the lifespans when they succeed and being like, okay, like, why is that? You know, I think it's just because editorial institutions, like there's something about the way that they function that makes it have longevity when it works. And

so anyway, I just yeah, like, is that a fit with venture capital? Like not really, like, I actually do think it could be pretty big. Like, if you think of our tam as the business section of the bookstore. Like, that's a pretty big ambition. We were we charged $200 a year. I don't know like what the top 1% 5% most ambitious like workers like vaguely kind of like, in technology, like it's, I don't know, it just feels like it could be big, we can move beyond technology potentially, like we could also like sell more product type things or course type things. We can build technology, we build our own platform, like there's a lot that we could do. And it's like, cool to me to imagine this sort of like Empire that could keep compounding and can be weird. And we can spin off weird apps and like, we just own it all. It's like, cool to me like Berkshire Hathaway, it was like this textile thing, but now it's like, well look at what it is. It's like, I think there's something really underrated about building for, like, kind of like long term compounding empires type thing, rather than building for, like a 10 year risk adjusted return to make a portfolio math thing work. And it's just like, Yeah, I just don't actually really want to do that. I want to like be like, I like working with Dan, I think this is a good structure. Let's just like see how far we can make it ride? And if that's the time horizon, and that's the goal, then it's, yeah, it's just different from from the VC model. And it's like, the weirdest thing is it's like, for a long time, I was like, Is this just less ambitious? Am I doing a lifestyle business? Because I'm not actually ambitious? Like, I think in some ways, it's more ambitious, like, you know, like, I still think it could be big. And I also want control. So how about that, you know, and I want to keep doing it for a long time. It's like, I don't know, it's weird that it's like gets brainwashed into being like, less ambitious. So but you know, I don't, I'm still working through it. That's like, why I wrote the thing is, because I don't fully, it doesn't feel right to me to like, totally reject VC either. Like, I have a lot of respect for VC still. And I think there's a lot of really long term oriented VCs and a lot of ways, they're just as much a function of like, it's not like VCs conspire to brainwash founders or whatever, like the VCs themselves aren't part of the system that it's like, these are just like, you know, economic models that work tend to proliferate narratives and stories around them. And then people get attracted to them. And it's not, you know, whatever, like, it's fine, but Right. Yeah, I don't know. It's just cool to also try different things, I guess.

Will Jarvis 23:03

Man, I really love that. So, so many ways, I want to go with this. So I'm going to try to try to keep them on track in my brain. here

Nathan B 23:11

first, that means a lot.

Will Jarvis 23:12

Yeah, no, no, I really do. Um, first off, I love that idea of trying to build a big institution that last a really long time, because one of my favorite things to do is actually I've been working back through the Atlantic catalog from the beginning. It starts in like, 1848, and they have it all mine. And so you can just read like, you know, Henry David Thoreau in the Atlantic, you know, just like, it's just because I've got, you know, the Atlantic right here, you know, and so, you know, I've got the most recent one. And so I had this context of like, wow, like, this institution has been around for a while, I get to see how people were actually talking about historical events in the period instead of trying to read like, what people think about it now. But I so I really, I really enjoy that just that approach. It reminds me of an interesting conundrum. I've seen in a lot of places, a lot of startups and you know, I won't name any names or anything, but I've just seen this when I've, when I've talked to people, and it's very common, I think most places work like this. It's like, you kind of start something and then you put the story on top of it. That makes sense. So you try it, you seem kind of backwards, justify, like, why you exist. Instead of like for you, it's like, well, like we want to go do this thing. We can't really think of anything else will be better, this will be awesome. That'd be the coolest thing to do. So we're gonna go do it. And it's gonna be difficult. It's gonna take a really long time. But you know, it's gonna be awesome. Instead of like, well, you know, we want to go make a bunch of money. So we're gonna go raise VC, and then we're gonna figure out some story that fits on top of it. Does that make sense at all? And does that track onto like your vision of like reality at all? Or things you have experienced?

Nathan B 24:48

Yeah, I mean, have you? Have you heard of the book elephant in the brain?

Will Jarvis 24:53

Oh, yes. Yes. I love Robert Hansen's and similar

Nathan B 24:56

Yeah, the idea is like consciousness is like the PR department of Have the brain and like behavior is actually the board of directors and and you think that consciousness is the board of directors, but like, really, you your concept of what you are is just the PR department. And so the Board of Directors passes down all sorts of pro social justifications for actions, but actually there's like, a lot of other stuff that drives it that's like more just like cold hard, like survival, reproduction type instinct stuff. And so I don't think that I am any different from any VC backed founder in this way. Like, maybe we just, you could tell a different story, right? That's like, they weren't good enough for VC. So they went for something easier. And then they told a grandiose story about it to make themselves feel better, like that also, in a way is or could be true. And like, I don't know, like, it's, I think that, but I basically believe that, like, I basically believe that. Just reflecting and like, sort of like trying trying to get to like a neutral meditative state about like behavior, it's sort of like, we just sort of do things. And then when we have to talk about them, we just sort of say things, and it just kind of comes out, you know, and it's like, we want it, we struggle to become premeditated about things and to be intentional and thoughtful, but it's like, you know, swimming upstream kinda like, mostly just behavior flows and words flow, and it just kind of like, Yeah, I think things come out. So I definitely believe that, but I also believe it applies to me.

Will Jarvis 26:19

That's great. Well, I do think I think we can parse that out. And I think there are good reasons to do things. And they're, they're bad reasons to do things. You know, a lot of like, tech is driven by this, like mimetic desire to, you know, the Steve Jobs or something like that. And it's, it's quite interesting. You know, we had Delian on the pod recently from Founders Fund, and he had this idea that you should only start, you know, a company, because it can be very difficult. If you can't think of anything else like, like, you just have to do it. You're sitting in the shower. You're like, man, like, this is a great idea. I have to go execute this. This needs to exist in the world. Is that your Do you think that's a good framing for thinking about, like, when to start a startup? And And did you have a similar path to starting every?

Nathan B 27:04

Yeah, I think so. I don't know how, like, useful that as is advice, but I think it's basically true, if that makes sense. Because I remember not actionable, yeah. Like, when I was in college, I thought I wanted to, like be a philosophy professor or something. Yeah. And I had a professor who I really liked, and I did like, you know, like, special classes with or whatever. And I was like, I think I want to do this. And he's like, so he said, the same thing. only do it if you have to, because it sucks. And it's weird, because it's like, does did him change saying that change? The fact that I didn't do it? Or like was I really never gonna do it, you know, like, and then like, was starting companies, maybe a lot of people need to start a company to figure out that they don't have to, you know, and like, I do think it's basically right, though, but I think kind of like, people are going to do what they're going to do, you know, and like, if you sort of feel inclined to but you're not sure. Like, I mean, sure, make sure that it's not like gonna be ruinous for you economically, or socially, or whatever. But like, within the parameters of that, like, give it a shot. Like, you know, take it lightly, like, don't, don't get over your skis, like ever, for any reason, including with crypto investments, or whatever else. Like, just general good life advice is don't get over your skis. But like, try things. Absolutely. Even if you're not, you know, I feel like that advice could make people kind of, like, freak out a little bit. Like, do I really have to? I don't know, like, I'm also liking other things. Because like, yeah, I also like other things, too. Everybody likes multiple things. So, um, and then yeah, in terms of how I did it, though, definitely. It's like, kind of, there's something that I, I need to like, be doing something creative. I think there's a lot of different forms that could take you know, but I always, I like to just like, I kind of have like an ADHD, like, when I'm in the zone, I'm really in the zone type system thing going of like how my brain works? And yeah, so I think entrepreneurship is one good outlet for it. And there probably could have been others. But I'm glad that I landed on this one. And I think that like, you know, if you roll the dice of like, my upbringing in DNA, or whatever, a bunch of times, like most of the time, it would probably land on something related to like, entrepreneurship.

Will Jarvis 29:17

That makes a lot of sense. That another question I had from the, you know, when we were talking about building this kind of long term institution, do you think it's the strategy questions strategy question, I had a call recently with someone, you know, and they were talking to me about, you know, this podcast, and, you know, they're asking me about the growth rate, you know, how big is the audience, etc. And, you know, they're pretty smart person, they're pretty talented person. And, you know, they start doing some calculations in their head, they're like, wow, you know, man, well, it's gonna take you like 15 years to get to the size of Joe Rogan at your current rate. And I was like, Man, that would be awesome. Only 15 years, you know, like, that's really cool, man, like, and he's like, No, this is like, very bad, you know? And so I do wonder If there's this weird thing

Nathan B 30:01

we're living in is like you have cancer or something like that. I really hate to tell you, but I did the math, and it's gonna take 15 years for you to become like, one of the most popular influential thinkers on the planet, 15 years,

Will Jarvis 30:14

15 years, you know, and I was like, wow, only 15 years, like, I would have guessed, like 50, you know, but there is this weird thing about growth rates in Silicon Valley, where people, you know, if it's not doubling every, you know, couple of months, people are kind of, you know, they kind of start freaking out. And like, it's not a hype, you know, it's not hyper growth. And that's a bad thing. Do you think there is alpha and just being more patient, like, over a longer period of time and being consistent?

Nathan B 30:39

1,000%? Absolutely. If anything, I think that's like, one of the main, general themes of alpha in the world right now, it's just probably always is like, if you're willing to be long term. And I do definitely think that there's a lot of types of things were based on the type of thing it is, if it's not growing super fast, like you might want to make a change. But that even exists within the framework of a long term thinking of like, okay, I'm going to do like, several bets. And I'm going to actually give each bet a solid try, and I have confidence that I'm gonna, you know, what I mean, like, even with that, as it only works within the context of long term thinking, I think, um, but yeah, like, if you have a social app, and you like launch it, and you seed it with a bunch of users. And there's like, some cool people using it, and you kind of like it, and then it like, grows a little bit, but not a lot. And like, people aren't really posting on it that much. Based on the type of thing it is like, yeah, like, you're not, that's a problem. That could be a problem. But, I mean, yeah, things like, the flywheel of trying to build, like an audience and an intellectual, like, you know, catalog of stuff is like, really long, like, I don't know how long I've been writing stuff on the internet, but like, I was writing a lot on, you know, substack, before we launched our own platform before substack, I was reading a lot on medium. You know, before medium, even I like had blogs on that kind of stuff. Like it's been sort of, like habitual. And, you know, I've been tweeting like, the whole time, basically. And it's like, you know, that yeah, I'm still just like, kind of chipping away at the thing. And it kind of keeps compounding a little bit. And sometimes you can find unlocks that are like, you know, new like levels within the overall long gotcha thing. And I think the far bigger risk to focus on is not to take a linear growth rate from the past, like, you know, six months and extrapolate it 15 years. To me, that makes no sense. Because there's two things that happen. One is plateaus happen, which is, maybe you get bored, maybe the whole thing you're talking about is not interesting to the world anymore, because like the world has moved on to like, whatever, because it takes not cool anymore. Or like maybe the whole, you know, there's like all sorts of reasons over a 15 year time horizon for plateaus. But the most important is that, like you get bored one. And then besides Patos, there's all sorts of spurts that are that create nonlinearities maybe, you know, the like Joe Rogan invites you on. Maybe like people, people go from zero to like, you know, like, who had heard of Lex Friedman, like four years ago? You know, like, so it's just it's a kind of empty way of thinking both ways. If you're applying it out that far. But that being said, it's a it's a useful impulse in certain contexts. I just think this context is not the not the move.

Will Jarvis 33:22

Right? Right. Not the move. That makes a lot of sense. I want to talk about, you know, growth kind of compounding over time in writing. You've written a lot over a long period of time, how have you thought about improving yourself as a writer? Or have you done that consciously? Or has it not been conscious?

Nathan B 33:38

I think a lot ends up not being conscious that is most valuable. But there are some things that are conscious. And the biggest thing is my subjective experience of the process, like the feeling of when I'm actually doing the writing, like when I'm sitting down and typing, how does that feel? And my subjective experience of I hit publish? And then like, how do I feel about that, based on the data I'm seeing and the reactions I'm seeing, I basically was good enough to have some stuff be like a little bit of a hit, but not good enough to do that every time. And so it created this slot machine thing, where I was just like, chasing the reaction from audience and writing itself was absolutely miserable. Because I'm like, it's like the process of pulling the slot machine lever, except it's really hard and complicated. You have to think a whole bunch, you know, and so that sucks, because you're just waiting for the payoff the entire time. That's like, the only reason you're really doing it is like our people is this gonna go viral and people are gonna love it. And, and then it's really miserable. Because a lot of times it doesn't like more often than not, it does, but sometimes it does. So you keep doing it, you know? And it's like, it's like that just suck and so I got really burnt out and had to kind of re architect my whole, like, emotional system almost for writing. And I think putting that on a different foundation has been the most important thing and And it's enabled me to learn all the other types of lessons with like storytelling, or how to write a good title or whatever else that you know, are the things that make the thing more likely to succeed. But there, it's like this meta thing, or this foundational thing that is like kind of the conscious effort. And for me, the big thing was trying to figure out how to actually enjoy writing. Like, it's the goal, like when I'm typing people have, there's this book, Big Magic by Elizabeth Gilbert, that was really, really good and really changed my perspective on this. She was basically like, there's this whole famous genre of like, artists complaining basically about, like, how, how devastating it is, and how difficult it is, and all this stuff. And it's like, what use is that actually, like subjected to the question? Is it useful enough to feel that way? It's not f*****g useful. And so And why does it exist? Because like, Yeah, I mean, it can be hard. And when it does feel hard, maybe it feels good to complain or something. But like, what's actually useful to doing good work, it's actually to be able to do good work, it has to be sustainable, in order for it to be sustainable has to be probably enjoyable or pleasant to some degree, otherwise, you're going to, like, want to run for the hills. And maybe it'll be prolific for like, a span of a couple of years, but you're not gonna be able to do it for a long time. So yeah, it's, it's hard to say even even just realizing that the whole like, you know, suffering artists, prototype is kind of a b******t thing that's like, not very useful. That honestly just helped some just looking for like how, like, I should have fun, like, I can have fun, makes me loosen up a little bit and have more fun. So that helps. And then I think, approaching it kind of like approaching writing with a sense of spaciousness, and like, any one piece is, I'm curious to see how it'll go. And when it goes, well, I can do that with a little bit of bemused detachment and some pride for sure. But a little bit of kind of, like, interesting that that one did. Well, you know, and when it doesn't go well, but like, oh, people didn't like that, did they? You know, kind of like, the Back to the Future, like, your kids didn't like that. But like, your parents or whatever, like that thing, you know, screw that one up your parents, your kids will like it or whatever, anyway. Yeah, you can, you know, just being a little bit like, Oh, that's interesting, you know, and like, it doesn't really like deeply reflect on me, it like reflects very shallowly on me, and because I'm going to keep going for a while, probably, and so any one thing is like, not a huge deal. That, to me, is the most important lesson. And then that creates the platform for all of the specific skills, like what kind of topic is good, how to read a headline, all that kind of stuff, which makes the actual writing do better.

Will Jarvis 37:29

Gotcha, gotcha. So it's another lesson about you, if you want to do this type of thing. Like it like creating, it seems like you need to be patient, and you need to find a way to make it interesting. So you can stay in the game long enough so that you can have some some upside they've done. These are great studies with artists. And it turns out, one of the biggest predictors of long run success is you know, how widely your work gets distributed, because it's very difficult to tell which gallery actually feeds up to larger galleries. So it's like, if you're more prolific, you have a much better shot at it. And so that's very, very, it's a very interesting kind of insight there.

Nathan B 38:01

Oh, interesting. I need to see that. So that's cool. I think about that kind of stuff all the time. I like sort of, like the politics of art or whatever. Because I'm, I like have this theory basically, that a lot of people who become really big, like creators or whatever, like they kind of they get a break, right, like, and it's not necessarily just one maybe it's a lot a little breaks, but like, it's really hard for something to be 100% like, you know, just driven by the people right? Usually what happens is like Ben Thompson, for instance, Daring Fireball, John Gruber, a huge part of Ben Thompson success and help tell tell anybody that and it doesn't it doesn't take anything away from Ben Thompson because he wrote stuff that was so great that John Gruber wrote like, a glowing review of it, like, you know, how many people just John Gruber write a glowing review of Not that many, but also, it drove a huge amount of readers to Ben Thompson that then kind of like, you know, help Snowball or whatever, and kicked it off. And I mean, kind of, to tie it back to every that's what we hope to be able to do at some level for people. And then, for myself, I think about like, you know, it kind of sucks, but it's yeah, it's like how do I get my writing in front of like, specific people not just like make it go quote unquote, go viral? Because if you have like 10,000 retweets by like, you know, but not one from like, a kind of tastemaker II type person, like, what's it worth, you know, right. And it feels a little icky to me in some ways, because I don't want to be like pandering or whatever, you know, but like, it does sort of feel like I don't know, maybe people who are really good at this kind of stuff, like find a way to like make the right kind of friends. Right. And like I think I should like, do that better or something? I don't know. It's unformed, thought.

Will Jarvis 39:40

Right? It's, it's a very interesting game, bouncing these things. I'm curious. When you're trying to pick a topic. You mentioned you've gotten better that over time, Do you can you you know, put it into words what it is or is it just kind of a taste where you've gotten like enough exposure to really good things over a long period of time. It's kind of this crystallized Intelligence thing where you can kind of pattern match what's good? Or is there? Are there any heuristic heuristics you've kind of developed?

Nathan B 40:06

I definitely, I definitely have a heuristic. And I even made an acronym out of it. Which is kind of lame, but it really helps me. Um, but I will say, knowing the name of the thing does not equal knowing the thing. And like you can, like so I literally just earlier was talking to a friend of mine who's like, amazing at Twitter. And she was telling me like a principle of like, making a tweet good. And I was like, oh, yeah, that makes perfect sense to me. And then we decided to workshop a tweet. And I started to like, no, no, no, no, no, no, no. And then she fixed all the stuff wrong with it. And I'm like, Oh, I knew everything. But I did not know the thing. Right? Right. So the acronym helps. But it's like, the whole like, whatever, like being able to actually apply it is extremely, extremely hard. And I still have a really long way to go. And I don't think necessarily that the acronym that I have come up with is the end all be all. But basically, it's I call it stir as Te IR. And I want to have to see, but I don't know how to make it into a word. I haven't actually heard that yet. sterk. Yeah, so surprising, true, important, relevant, and bless the see that I'm kind of adding recently as cool, so surprising, it has to violate an expectation you have. And there's an interesting theory about like, how the brain works. That's basically like, we're on autopilot. Our brains are hallucinating predictions all the time. And every so often, something is like violates our neural net prediction of like, what things should probably be based on what things recently were. And that is like, there's like these, like, you know, dopamine markers of like, holy s**t, what's that something different, like pay attention, because like, could be risky, could be reward, whatever. So the important is, the magnitude of the riskiness or the reward, like something really bad or really good could happen to me because of this surprising new thing. The true part is it has to actually true because I can tell you like some fact, that would be surprising if it were true, but you just might not believe it. You know, like, I could tell you like, dowels are going to replace corporations. There'll be no more corporations ever. It's the new evolution of human consciousness. And I would be surprised that it's like big if true, but like, you know, a lot of people are just going to see that and be like, b******t, I don't care. Right, you know? And then irrelevant is like, you know, if I'm like, you know, the high school version of me like corporations Dows. What, I don't care about any of that. I don't think it really affects me. Whereas if you could tell me, I don't know, it was cool to me, like debate club in high school in 2006. But then that would feel more more relevant to me so as to be actually relevant to your interests. And then the see the cool part is, I think there are some things this is specifically for virality that are like, all of the above, but they don't get shared very much, because it doesn't really make me look that great to share it. So Gotcha. The, the Twitter friend who I was talking to earlier, said that she had a tweet that was like, here's like, how to pitch yourself as a guest on podcast to to pitch people who have podcasts that you want to be a guest on their show. And it was really useful, practical information. There are some counterintuitive stuff in there. It's important for a lot of people, they want to be guest on podcasts, but who wants to share about themselves that they're like, thirsty, trying to be guests on podcasts reaching out pitching themselves, you want to be invited, you know, like, that's the cool thing. Exactly. And so like, no one, no one was really retweeting that for that reason. And so it's not really cool. It's not, it's not cool to do that. And so I think there's some social perception factor that is an additional lens to look at it through. And I do think that that actually shapes a lot of like, it's, it ends up being very practical, like we're working right now on a thing, basically teaching people the basics of finance and accounting. And it's like, is that cool? You know what I mean? Like, it's like, it's, it feels more cool to be like, here's, like, the surprising implications of Dali to have how it changes art, you know, what I mean? It's like, yeah, some new cutting edge thing or whatever. But like, actually, it's probably a lot more important for a lot of people to just understand how to read a balance sheet, you know, and like, like, but you know, it's not cool. So these things affect there, it's like different things have to live in different parts of the funnel and like fit in different functions in the business. So that thing is not gonna go viral, but we can charge for it and maybe have cool viral pieces that like St. Also, we can teach you a county or something, if you want. We'll see how that works

Will Jarvis 44:13

at the utilitarian stuff there too. So that's super interesting. So it's something like you have to consider how the other players in the game are going to think about like every player is thinking of what every player other player will think about them when they like, you know, promote some other piece of content and a lot of them kind of miss that that that thought would but it's really important.

Nathan B 44:31

Yeah, I just always the acronym could be sticker. But S T I see. There we go. Sticker. There

Will Jarvis 44:37

we go. We got it. We saw it's often called a sticker with a sticker. I love that. I love that. Oh, man. With kind of our last period of time here, I like to move on to some other pretty interesting topics that you've written on. Talking about tech, you know, what do you think is driving kind of the contraction in tech right now? Oh, do you think this will be kind of a persistent thing going forward? But just kind of lower valuations? You know, I think the the P for coin base right now is for, you know, it's like this is like this is this is, I couldn't have thought of that, you know, probably five months ago. So it's quite Yeah, totally.

Nathan B 45:15

It's so funny because like back in like, February, March, I was kind of like, ooh, like this great, like buying the dip. And I'm like, oh, you know, just illustrating that I don't really know what I'm talking about. And it's funny, because I think around that time, Bill Gurley was tweeting, like, forget those prices ever happened, like, don't anchor on stuff from last year that has no relevance to this year. And it's, like, intuitively, psychologically, we all think we should, like you look at a graph, and you know, like, it goes down a little, and then it tends to go up. So I want to buy it, when it goes down a little bit. Like, it's sometimes it goes down a lot and stays down. And like, if you look at a graph from like, you know, if you had invested in a company, and like, you know, 2001, even if it's a great company, like I don't know how long it took for Amazon to like, lock it back to their all time highs, right, that they that they reached in the.com, bubble or, you know, whatever, like, how long was Microsoft underwater, how long, like, there's a lot of great companies that could be underwater for years. You know, it's not a bad opportunity necessarily, to make some good, like long term bets, or whatever. But you know, it's just like, be be willing to like, it could be a long time. So I don't know, what's driving it is I can tell you what smart people say. But it's a really abstract complex thing that's very different from me, and like the supply chain of knowledge. So like to summarize what I hear all the smart people saying, it's that, you know, basically, a combination of there are genuinely a lot of great tech businesses. And when that happens, people see it happening and think I want to do something like that. And so they want to invest in fun to those types of companies, and they want to start those types of companies. And usually what happens is, they keep doing that until it stops working. And you know, usually it stops working way far after the point where it's kind of like, like, people realize it stops working Wayfair after after the point where it kind of like actually got over over the skis. And so there is basically like a valuation bubble of technology companies generally, because there's so many great technology companies, but like, not all of the technology companies are great companies. And the market wasn't very selective for a while, and it feeds on itself. Because as the thing keeps going up, then it looks like you're making money, you have more money to invest, you can raise big funds. And so it really can perpetuate itself for quite a while. So that is kind of like one thing going on, then, you know, the backdrop of overall like the credit conditions of like the zero interest rates and the like huge stimulus to the economy after COVID, and all this kind of stuff. And like I'm definitely no expert on, on all the macro issues there. But basically, I wanted to learn about it. So I wrote kind of like a summary explainer of like, how does something go from like the Fed changing their rate? And like, what is even that rate? And like, how does it affect rates, because there's not just like one interest rate, like everybody can set, I can lend to you at whatever rate you would agreed to borrow from me at, you know, like I can, it's like prices, you know. So it's not like the Fed controls all prices, they just control a price that then other prices take their cue from how does that work? So I wrote a bunch of stuff about that. But it Yeah, but basically, it looks like for a while, inflation has been rising, and it continues to rise. And now we're at the point where it looks like consumer spending is decreasing, which means business revenue is decreasing. So it's kind of like the thing we all feared of like, okay, when inflation gets high, we have to raise rates, people borrow less, they spend less, they spend less businesses earn more, businesses spend less so people get laid off and other companies that sell or buy things to and from businesses. They have less revenue and just kind of like this, this spiral, basically. And so I don't know what will change it. The at some point, the Federal stop raising interest rates, but like, not yet. So it seems like a really different story from 2028, where there's this like non economic cause of like the pandemic that just caused a lot of physical activity to stop, which had economic ramifications. This is like internal to the economy, basically. And so I think it's going to be I mean, if it's similar to previous times this has happened, it's going to be slow. Like years, probably I think we're looking at like, the rest of this year will probably be gloomy. And then next year, we'll probably start the year in the doldrums and maybe by the end of the year, next year 2023 It'll start feel better, but also maybe not. And also maybe a lot sooner, like I really don't know, but I think if I had to really guess I would say the bottom will This is so dumb. I'm I have no idea. But I'm just gonna go ahead and guess early 2023 Gotcha. H one. H 120 23. That's my guess. I really have no idea. Don't hold me to it. All right.

Will Jarvis 49:55

That's fair. That's fair. It's wise to self reflect. I And I'm curious, how do you think about building a business that can like last for a long time, I guess these these kinds of forces? Is it kind of just like trying to keep headcount, you know, low, everything manageable kind of positive cash flow? What does that look like? Yeah, I

Nathan B 50:15

mean, it's pretty much just that. The problem is basically, there's a lot of like, seemingly good reasons to not do that, you know. So it's like, if you are really, if you're really confident in your plan, and you want to go out and raise more money, and you want to go and start spending that money, and you're kind of ahead of revenue, but it's fine, cuz you'd probably be able to raise more, you know, I think now, it's really easy to have the mindset of, you know, we should stay sustainable, but it felt really dumb, you know, when everyone was raising all these huge rounds, now, it feels a little smarter, but it's still a little bit like, you know, people are still raising money, like, you can go out and raise, yeah, you can go out and raise money if you're like, kind of our stage. But, I mean, it's also easy for us, because we're like, like, you can raise money if you're on stage, but it's hard to raise money. If you're our type of company, like we believe long term, it's a big opportunity, and that we do more than just writing basically and including potentially software. But that, yeah, it's not like we're building a notion competitor, which is like the kind of thing that a lot of people would probably want to fund right now.

Will Jarvis 51:17

Very logical, very logical plan, you know, like execution.

Nathan B 51:20

Exactly, exactly. Um, so. So yeah, I think it's, it's pretty simple. It's just, you know, be be conservative, and how conservative you should be, is hard to say. But basically, the more that you understand about your business, the more risk you can take on. So like, if you have no idea, and you just see the bank account balance, and you vaguely can look at like how money is being spent, we have no real model of what's going on, then it's like, it can be really scary, right? Especially if it kind of fluctuates, or whatever. But if you have a model that describes like everything that's happening, and you're pretty good at predicting within like 10 percentage points, like revenue next month, then it's easier to like, cut it a little closer to the line, you know, you're trying to operate like sustainably through cash. So it's been a really fun part of this for me is to just get a lot better at financial modeling. And like, we've gotten to the point where like, we can decently if you think about next month's revenue, it's a function of, Okay, how many monthly people tend to renew? How many annual people are up for renewal? And relative to what we know about that cohort? What percent of them do we think will renew? And how many new customers do we think we can acquire? And how much ad revenue do we think we'll bring in? And, you know, at the end of one month, I already you know, bookings for next month are like done. So the cash component of it is like, you know, a little bit easier. So anyway, yeah, it's like, you just have to keep track of ship basically. And you can push it to the edge a little bit closer, but like, Yeah, we don't push it that close. And we try. And always, we've tried to be really conservative the whole time about cash and never, never did too, too low.

Will Jarvis 52:54

So you don't ever have to worry about it. That's, that's super wise. Well, Nathan, I've got one, one last question here. And I apologize and all the outline, but but I do want to ask it. Do you have any advice for me on this journey? You know, podcasting? It's somewhat adjacent, it's not writing, but it's close. I've been at it, you know, I guess this is right, coming up right upon your to spend a ton of fun. Do you have any general advice and anything that you would you would impart?

Nathan B 53:19

I mean, the most important thing is like, keep doing what you're doing, right. And like, I can say, more specific versions of that. Like, it's fun to talk to you. I feel like that's so underrated. Like, there's so many podcasts where people are just like, oh, like you like smile, and it's fun, you know, and so like, that's important, like, just keep keep having fun. Basically, I feel self conscious, like being like, you know, giving, giving you advice, or whatever. I'm just saying, stuff that I like about what you do. Right, basically. I mean, I'm curious like, well, actually, first of all, like, what are you struggling with? Because advice for you is kind of like, I can tell you things that might be random mechanisms that can achieve random things, but like, I don't know, relative to what problems or goals, you know, like, does this anyone else? Are you full time on this?

Will Jarvis 54:05

No, no, this is just a it's just a, it's a fun, I worked full time at on deck. I'm just, this is a fun thing I do. I do it because I actually just just really enjoy it. And I get to be like, cool people like you just all these really interesting people, I would never have any chance to interact with otherwise. And yeah, I just have so much fun with it. I just, it's just kind of snowballed from there.

Nathan B 54:28

I would keep just doing that then. And to the extent I mean, like, you know, you're full time on deck. So you're not going to say I want to quit my job to do this full time, I guess. But let's just imagining someone. I'm imagining someone like you might. And if they did, not you they if they did, I would say you know, I think the number one thing for podcasting that's tough is I don't know and you probably know way better than me. How to sort of like, grow a podcast systematically for whatever Isn't we have had so much trouble growing podcasts, I have so much fun doing them. So we keep doing them. Yeah. Like every keeps creating podcasts and like keeping podcasts going on this kind of stuff. But for whatever reason, I find it much easier with writing for to grow. I don't know if that's because of how Twitter works or whatever, like something that's something about that. So I would say maybe be on the lookout for Twitter ask opportunities and audio, like maybe Spotify, like maybe there's some thing that they do that's like, right actually reach new audiences more easily. Or maybe it's like, there's like a momentum thing about getting on the charts or whatever. But like basically finding some way to like get the audience to the critical mass where you can get the advertiser thing. Right, right. Well, that works. And then yeah, in terms of like paid subscriptions, which I know a lot better than advertising, that is a whole nother thing with audio that I'm like, I don't really know. So I don't have a lot of confidence. But I will say, just the main thing is like, keep having fun, because you'll do it if it's fun, even if it's not like, you know, paying your bills or whatever else. And that's exactly what you're already doing. And so just like you're doing it because it's it's working, as far as I'm concerned. Like episode by episode feeling you have while you're doing it, and after you do it is like the thing that you'll remember more so than what the numbers are at any given point. Exactly. Exactly. And and if you feel good about it, you keep doing it. And the numbers probably will get good at some Yes. Yes, I'm sure they already are because you have like amazing guests. I don't know your download numbers. But

Will Jarvis 56:25

there it's one thing I will say about growth is I try I really try not to look at it, but when I do look at it is hilariously linear. So I don't know what it is about the podcast in general, but it is hilariously linear. So I don't know. It's cool. It's cool. It's cool platform.

Nathan B 56:44

Amazing. Yeah, a lot of newsletters, I mean newsletters have, they have stepped functions or whatever. But they're linear to like a lot of media is just linear. I think I think that's just kind of like, I need to write about that. Like, why is media linear? Why is technology exponential?

Will Jarvis 57:00

Right? I do have a thought that it is something weird to do with like, SEO? Like, like, maybe it's just something like as your footprint just gets larger. Right. You know, we have transcripts with the podcasts like you know, it is like writing in some sense. So it is just like you're at some level, you know, it is like speeding up but but very slowly. And that's because you're just footprint on the internet's getting better. But who does pay less?

Nathan B 57:25

Yeah. Dad? Oh, no, this will be fun to think through.

Will Jarvis 57:29

Definitely. Definitely. Well,

Nathan, thank you so much for coming on the show. I really enjoyed this. Getting to talk to you. Where can people find your work? Where should we send them

Nathan B 57:38

every.to is where you can find all the writing including mine in every and then I'm NBA sh aw on Twitter. So you can find that's just kind of like my little whatever. It's our chat room. It's the global chat room where we all hang out during the days. So yeah, thank you so much for having me. This has been a ton of fun, and I'm excited for this and rooting for you and definitely excited to continue following along as you surpass Joe Rogan. Well.

Will Jarvis 58:08

Yeah, exactly. It's great. Well, thank you, Nathan, I really appreciate you taking the time.

Well. Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars to say joins us as a co host. Well,

Unknown Speaker 0:40

Sam, how are you doing this afternoon?

Sam Bowman 0:43

I do very well. It's a very, very warm day in London. We've had something like as close as you can get to a heatwave in the UK. So the grass has gone Brown. The trees are desperate for water. And obviously every single person is complaining about how hot and sweaty they are. But I like it. And I'm enjoying the summer as much as you could call it that.

Unknown Speaker 1:07

That's great. That's great. I'm glad you're avoiding the rain right now. It's a It's nice to see the sun a little bit. Well, Sam, thank you so much for hopping on and joining us for an hour today. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Sam Bowman 1:21

Sure. So my name is Sam Bowman, I live in London. But I'm from Ireland. I moved here in 2009. So about 13 years ago. Now I can't believe it's been that long. And for most of my life, I've worked in public policy. So mostly in big tanks. I worked for a libertarian neoliberal think tank called the Adam Smith Institute, which I ended up being executive director of a pretty young age, I worked in the world of antitrust, both on the advisory side and the private sector. And also for a think tank called the international center for law and economics, working on things like tech regulation. And most recently, having set up a website called works in progress with some friends as a sort of side project hobby, which was really just a website about how to make the world get better faster. We joined a company called stripe, and now I work on works in progress in my full time, as well as on something called stripe press. So really, I'm somebody who's interested in progress, technological, scientific, economic advancement, and really kind of interested in the, I suppose you could call them the kind of dollars on the sidewalk type of policies, maybe we'll talk about them later on. But my my kind of vision of politics is that there are probably a lot more kind of win win solutions to problems. And we imagine, and often when we get sort of sucked into, you know, political trench warfare, where we hate each other, and we are screaming at each other and barely making any progress on one side or the other. And, and believe me, I've been on many of those sides, I really understand that it's very easy to get into those kinds of fights. But that actually, we're missing, you know, lots of areas where we could make steps forward that everybody agrees or steps forward. And so what I'm really interested in now is is what those things are and what those areas that we can we can make those sorts of progress in I

Unknown Speaker 3:16

will say I've I definitely think you're right. And that there, there seems like quite a few areas where there are $20 bills in the sidewalk in the policy arena where we could pick them up and and everyone would be better off if we did that. But it seems like we've gotten a lot worse in the western world at doing that since perhaps the 1970s or something like that, like like that timeframe. What do you have a sense of why that might be why we've gotten more polarized, or why it's harder to kind of work together and kind of get these things done?

Sam Bowman 3:45

Well, I I'm kind of talking my own book here. But I think that housing supply shortages are a really big part of the puzzle. Now there is a there is a related debate around what Tyler Cowen calls the great stagnation, which is this slowdown in GDP growth in productivity growth, in various measures of productivity growth. So you know, controlling for how much capital we put in, and the quality of labor and things like that, and still seems as if we're getting worse at making things and coming up with new ideas for every kind of unit of stuff. And every unit of brainpower we're putting in. I recently recorded a presented a documentary for the BBC on this question. And, you know, this question of whether ideas are getting harder to find is something that, you know, I certainly don't feel that I have a perfect answer to

on the separate question of whether ideas are getting harder to find and I'll get back to housing in a minute because that's such a passion subject for me, I need to you know, we can spend the next hour talking about that. My view is that it's possible that we are at a point where we've picked the low hanging fruit and ideas you know, it's possible that electrification and the jet Engine and antibiotics, you know, those are things that were comparatively easy to discover, compared to the sorts of things we would need to do today. You know, if you think about the advanced that the discovery of antibiotics represented in terms of human wellbeing, compared to the sorts of advancements we need to make now to, because our because our lives have gotten so better, because we've solved so many problems, it could be that the problems that are left are just inherently much harder. On the other hand, there's the I think, the very good point, that there's pretty much no point in human history where that would have been true, you know, you could have we could have been sitting here in 1850, saying, you know, well, you know, we've discovered the steam engine, you know, surely that's it, like, surely we've exhausted all of the really easy advances that there are to make. And I think you could look at other areas of human output, like music and art, and sort of say, Okay, well, there have been times where we've seemed like we've been in a bit of a rut, and then we've made some sort of breakthrough that's led to a huge flowering of new output. So, you know, music is my favorite example, where, if we were sitting in 1950, talking about basically musics been on a downhill trend since, you know, the late 19th century, you know, since Tchaikovsky died, and since the, and I guess, people like Stravinsky, showing my musical ignorance here by ignoring the many brilliant 20th century composers but, you know, you could, you could definitely have made the point at certain points in history, that music seems to have slowed down. And then when music began to kind of take off with the rise of doowop, and jazz and blues, and rock and roll, and then the explosion in pop music that was sort of down and rock music that were downstream of all those things, in the 60s, and after, you know, it seems as if progress in lots of areas of our lives, you know, goes and stops and starts and you know, you make a breakthrough. And then that leads to a huge amount of other downstream breakthroughs. So, so I'm not completely convinced that we know that we've picked all the low hanging fruit and it wouldn't shock me if some advancement that we made, you know, whether it's AI and of course, there are things to worry about there as well. Or whether it's other technologies around maybe genetic engineering or things like that, that we don't know about, that could lead to this breakthrough that makes us all laugh at people talking about the great stagnation in 2022. My view, and maybe we can come back to this later on, is that we're also doing science in quite bad ways. And the documentary I did for the BBC, the sort of exploring the first question of whether ideas are getting harder to find and say, okay, look, I don't really know, but then saying, but it seems as if we're not doing a great job at finding ideas. You know, it seems as if a lot of scientists lives are pretty awful. Most scientists I know hate their jobs and hate the amount of time it takes to get grants and the amount of work they have to put in to the to the grant receiving process. They have to wait months, if not years to get papers published. The process for getting papers published is at best, very inefficient, and at worst, outright corrupt. And nepotistic. You know, they often feel that more senior members of their of their faculties or more senior colleagues end up getting credit for the things that they have done. And so, you know, the personal reputation and the personal return that should come to scientists for doing really well, is being diminished. And it's my argument was that even if ideas are getting harder to find, there are probably still things we can do to improve how we're finding them. So you know, we can we can improve the input side, even if the output side isn't doing so well. So So that's on the question of the great stagnation, which is, I think, has to be a huge part of the story of why things have slowed down since the 1970s. I'm kind of undecided. But I think we we could do things better. But I really think and I think that the the great underappreciated cause of slowdown and cause of our lives being a lot less good than they could be, is the lack of housing being built in in and this is the crucial point being built in the places that people want it to be built. You know, there's nothing more frustrating than people looking at national numbers of houses being built. So that, you know, houses being built in North Carolina, or North Dakota account the same as has been built in the Bay Area, nothing against North Carolina or North Dakota. My suspicion is I would rather live in those places. But I think I could probably get a more highly paid job if I was living in the Bay Area. And I think there are lots of people who would who would want to do that for work on the on the aggregate level.

We think when we think about housing supply shortages, we usually think of them as being a problem to do with the cost of living and to do with the amount of money that we have to spend on housing. But then we can start to think about the second order effects. You know, it's certainly true that too few houses in places like London and the Bay Area in New York, and lots of other cities that are very, very highly productive. certainly true that that means that you spend more of your money on rent or on your mortgage if you want to live in those places. But it's also true that those high prices, keep some people out. You know, there are lots of people who just don't move to the Bay Area for jobs for work, or don't move to London, because they can't afford it or because the cost isn't worth it, they've maybe been able to scrape by, but they can have a better life even on a lower paid income somewhere else in the country. And so they very rationally and very sensibly do that. And what we miss, I think, for the most part, as a kind of society, when we're thinking about these problems, is those people who don't move and all the gains that would come if those people did move. And this, this relates to what economists call agglomeration economies, agglomeration kind of referring to people being at the same place and the benefits and the the things that happen when people are close to each other. And in my opinion, and in the opinion of much more esteemed and eminent economists than me who have done some very interesting work to try to estimate how big this effect is. It isn't, you know, a few percentage points of GDP, it's, it's something more like 20% of GDP in countries like the US and the UK being lost, just because people can't move to cities where they would be able to get the best jobs for them. And then there's a second, there's a kind of a third order effect, there's, there's an effect of people not being able to get the best jobs for them. And then there's the effect of the the ideas that they would come up with, if they were around people who they might have kind of interesting exchanges with. And this is something that you can see, again, there is good empirical evidence, I wrote a piece called the housing Theory of Everything, which is on works in progress, and has all this evidence that shows that proximity is a huge determinant of innovation. So when So historically, you look at medieval Florence, you look at the Renaissance, you look at the Dutch Golden Age, you look at Scotland, and England in the just before the Industrial Revolution, and the during the Industrial Revolution. And in all of these places, there is a an unbelievable amount of flowering of innovation and output from way more way, way, way, way out of proportion to the number of people in those places, because you get certain kind of magic effects in when you have the right people in the right time, talking to each other and working around each other. And they often have effects in unexpected ways. So you know, David, David Hume and Adam Smith were great friends in Edinburgh in the 18th century, Hume was mostly a philosopher, he did a little bit of economics. Smith was mostly an economist, but he did quite a bit of philosophy, actually, but you know, we mostly remember him for his economics. And, and each of those people as extremely good friends, you know, if not more who, though, it's sometimes been speculated, those two people as extremely good friends or more, had huge amounts of effects on each other's work and on each other's thinking. And in workplaces, you see the same thing. So Pixar is a lovely example. It was the offices of Pixar were specifically designed so that people from different departments, and different sections would bump into each other, and, you know, grab a quick coffee with each other. And a lot of successful tech companies today encourage that sort of crossover between different departments. And so if it's true for historical cities, and if it's true for successful creative companies today, then it seems like to me it should be true for and I think there's pretty good evidence for this, that it should be true for cities and countries as a whole, that if we can get more people close to each other, and interacting with each other, and, and coming up with ideas together, we will probably get more innovation in the form of entrepreneurship in the form of inventions and, and in the form of other things like like the creative arts, and it's like that. So I think that's one of the many ways that insufficient housing has has led to a drag on our innovative capacity and on our kind of productive capacity, all of which factors into our cut the slowdown in productivity growth. And this dissents of I think malaise, like the where I use the word malaise a lot, because I think it's a great word. And I think that, you know, increasingly, people are feeling like, we are in a sort of repeat of the 1970s. And it's not really clear how we get to the 19. How do we get to a repeat of the 1980s?

Lars Doucet 14:13

Right, so you talk about this housing supply shortage, and you've written this very influential piece, the housing Theory of Everything. I keep seeing people put that around? How much everything is does the theory account for

Sam Bowman 14:27

in terms of GDP per capita? I think that it's a fair guess, that in the UK, GDP per capita could be about 20%, higher than it is now. If housing supply constraints did not exist. In terms of the US, I have to go back to the original paper, but I think it's something in the order of 20 to 30% GDP per capita. But I think that there have been a couple of questions about whether that number is slightly understates the At the figure, I mean, it's more about magnitudes. To me, I kind of I think it's more a question of magnitudes. And we should be thinking more in terms of magnitudes here than in terms of specific numbers.

Lars Doucet 15:09

And just to just to put that number in perspective, like 20 to 25%, GDP has an effect size you basically don't see ever. So like, I mean, that's like, I don't know, like, like, what, what is California's contribution to GDP? Does anyone know? It's not 25%, I'm assuming.

Sam Bowman 15:30

So to do Rantanen, puka estimate is that the average income gain would be 25%. I think that it's only an effect size that we don't see, because there are very few markets that are as important as housing that are as dysfunctional as housing. I think if we, for example, destroyed 30% of the roads in the country at random, and never allowed them to be rebuilt, then we might see something like 10 to 20, because we might see a really huge distraction in in wealth, you know, or if we sort of arbitrarily banned half the country from going to university, then or from going to school or learning to read, then we might see really, really huge effect sizes, it's only because housing seems like a thing that it we're kind of used to housing being a really dysfunctional market, that we don't really appreciate how important it is and how dysfunctional it is.

Lars Doucet 16:27

So the put this in perspective, you know, I think a good example of this is like we typically, you typically hear people talk about, you know, capital and labor just being the two things everyone talks about in economics, that it's like, how do we and you, you talked about this earlier in your beginning about how we're so used to seeing everything as like a zero sum trade off, that it's like, either capital gets the money or labor gets the money. And so like, you see, this one, like people can't decide like, like, the Biden administration can't decide if it's good news or bad news that the labor markets are hot, for instance, where it's like, people are like, yeah, people are getting more wages. It's like, oh, well, well, the cost of labor is going up. And that's bad, y'all. And it's like, well, which is it? Is it good? Or is it bad? And so you're saying basically, that there's this third category, you know, housing, real estate, that is basically suck serving as like a drag on the entire economy is essentially kind of the linchpin on

Sam Bowman 17:21

well, so I'm saying that we could actually, if you want to hold on to the capital labor model, the simple capital labor model, I'm saying that housing supply is a huge determinant on the allocation of labor. And thus, we were basically who tied one or maybe even both hands of labor behind its back. So basically, I'm saying that housing determines where you are, and where you are, determines what kind of job you do, and lots of other things about what your life is like, you know, so. So, you know, for example, and I have to be a bit careful here, because I think that the evidence is pretty thin. Not, I don't think it's bad, I just that there isn't that much. But I think that housing is probably a pretty big determinant of how big people's families are, you know, the age at which people do decide to have families is a big determinant of how many children they have. And obviously, how many rooms they can afford, and how much space they can afford, is probably a big determine, although I, you know, I wish there was more evidence around this kind of thing. I haven't seen really great empirical evidence, but I think it doesn't seem like that unintuitive it doesn't seem that unlikely. But that's,

Lars Doucet 18:27

I mean, anecdotally, that matches everything, all my friends say about, like, why they've had, why they haven't had more kids, or why they waited until they were 30, to have kids or whatever is because Santa for it is because they can't afford the house, they can't afford the location.

Sam Bowman 18:40

And then when they do have kids, at least in the UK, especially in London, but in other parts, they leave the city, you know, they can't afford to live in central London, they could never afford the sort of house that they think their kids deserve. You know, for example, either with a garden, or with a park close by, that they can bring the kids to, and again, that affects their the job they can do. But obviously, it directly affects probably the most important thing in their lives. You know, having having one versus three children may be the most important decision that most people have in their lives. Not say exclusively, but I think for a lot of people, they would say that that is that has had the biggest effect on my third child, but my second child, whatever, has had such a huge effect on my life, hopefully, mostly positive. And given that we kind of I think, you know, I think it's pretty hard to deny, I just think that we don't have great aggregate evidence. So I think it's pretty hard to deny that housing has a really, really big effect on family formation and things like that. If that's true, and if we accept that family formation is an unbelievably important part of people's lives, then it shouldn't be that surprising that it also affects this other really important part of our lives, which is the jobs we do and the businesses that we set up and things like that. I think there's also another effect that is kind of counterintuitive, but when you think about it becomes less so which is the effect of housing supply constraints. on regional inequality, so I think that's a really big driver of the political polarization that we taught that we mentioned earlier. And I, you know, I come from a relatively prosperous part of Ireland, but nonetheless, a place where pretty much everybody in my university, I went to university there as well, pretty much everybody in my university graduating class that I was friends with left and went to either the UK or the US, or sometimes Australia. across the UK, and across much of the US, you have a kind of effect were well educated and people who can earn high amounts on the job market, leave their hometowns and leave the places that from and move to the big city, or at least to sort of high productivity parts of the country. But they're less well educated classmates, people, they might have gone to primary school or secondary or high school with don't. And so you get a sort of a separation of highly productive. And I just mean that the economic sense, economically productive people, well educated people leaving for better lives. And people who can't earn as much money on the job market, not being able to that that's a historical aberration there is there is good evidence that historically, both in the UK and in the US, it used to be the case that people of all education and income attainment levels would leave the places that they were from to go to the big city for a better life. Now, it is an increasingly it is people with good good college degrees, people who can earn enough to live in New York City, you know, it's not really an option to move to New York City if you don't have a decent education or the prospect of earning a lot of money in another in some industry. So so what you have is a historically unusual effect of less highly paid people being left behind, as they're more highly paid. schoolmates, I guess, wait, go to

Lars Doucet 22:02

I just, I just want to jump over something because I just want to like notice something that like, messes with my intuition. So you're saying historically, it's the poor people that used to go to cities to find opportunity?

Sam Bowman 22:15

And it was all of them. So it was it was across the it was across the income level? Okay, so it used to be that it used to be that a Big Lots, lots and lots of poor people, incidentally, yes. You know, in Ireland, historically, it was disproportionately poor people who would emigrate because they had a very strong reason to they couldn't get a job, they couldn't get a job in in a sort of pre industrial, kind of non industrial stuff country that at times was either in famine, or on the brink of famine. In the UK, during the industrial revolution, it was largely poor migrant workers who would leave their farms and leave their villages and go to the kind of newly rising industrial centers to to get jobs and to get money, and probably not have amazing lives, but possibly give their children a better a better prospect in life than they would have had otherwise. And you can, and it's visible in the in the data for the US that convergence between poor states and rich states, as it relates to the movement of poorer people from rich, from poor states to rich states, has slowed down. And and basically, that convergence is taking place much less dramatically than it used to,

Lars Doucet 23:24

right. Because Because my intuition now is that anyone? Yeah, that now basically everyone, but very, very rich people are fleeing cities, because you do you just get pushed out. Right. Yeah.

Sam Bowman 23:35

And, and usually, often the press, often the processes, you go to cities, when you're young, you live with flatmates, you get to get a job, you know, maybe acquire skills that you wouldn't be able to get outside. And then maybe you go remote, you know, maybe and actually, I think remote work is a is a potentially very, very promising counterpoint countervailing effect to the stuff I'm talking about. I don't I don't think it'll solve the problem, but I think it might help. But you you, as I say, you leave when, as you say, you leave the city when you want to have kids and when you settle down, and when you want to kind of get your sort of serious career path where you know, you will have a steady income and as much as anybody can get that these days. And and that that's so that's an effect. But that's an effect for people increasingly who have like pretty good prospects in life, like people who are pretty lucky in terms of their their income and their education and their their background and stuff like that. And it's I think it's it's really striking in the UK, in the UK. Areas that are left behind are often places that have really good universities, you know, and there's a there's a constant desire to sort of say, Let's make these universities like the engine of progress in these areas. And that's a great idea. But the the way you would do that is by persuading the graduates of those universities to stick around in those areas. And how on earth do you do that? You know, how on earth do you say to somebody? Well, you just graduated from the University Sheffield, great university, good science for that. But there isn't that much in Sheffield, although it's a lovely, lovely city, there isn't that much in Sheffield, for somebody with a kind of an advanced degree or kind of a good degree of any kind? So how do you persuade those people to stay? And I'm not I'm not really sure that there is a simple way, I am a little bit down on the idea of doing that, because it's a lovely thought, in theory, we just persuade people to stay in this very poor city and not move to London, or Oxford or Cambridge where they can get much better paid jobs and have like very, very easy lives around people like them that they probably want to be around. It's it's a really hard question. It's not a simple question by any means. But but it's but it's really underrated this, this the effect of expensive housing in rich cities, on the prospects of poor sort of so called left behind parts of the country.

Unknown Speaker 25:53

That makes a lot of sets. Sam, I'm curious, you mentioned something interesting there a little bit earlier, around remote work. You know, we'd had this big experiment during during COVID, where everyone was forced to go remote. Maybe it solved a bit of this collective action problem, where, you know, people that companies that could go remote that that had not suddenly tried it, and maybe there's some momentum there. But it seems like things have kind of stabilized where remote work is a certain percentage of the workforce now, but it doesn't seem like it's like rising anymore. It seems like it's kind of stabilized. Do you think we'll see a long run trend towards more remote work? Or is it just kind of where bottleneck by technology or something like that, where zoom calls are only so good. And in reality, it doesn't solve all the agglomeration problems that at bringing people physically together kind of solves?

Sam Bowman 26:42

I have to say, Well, I'm not I'm not an expert. And the person who I kind of defer to on this is a guy called Matt Clancy, who's done some really interesting, both research and really interesting kind of summarizing of the research. I do tend to think that the main bottlenecks are technological, as you say, that implies that there are huge rewards to people who can solve those bottlenecks. You know, I can't be alone in finding zoom calls, exhausting, you know, but I am a very sociable person. And I love seeing people in real life. And I dread the you know, having to pick up on and over produce body language, whatever the video call to make sure the other person can kind of get get a feel for what I'm saying and how I'm how I'm thinking. But that's a technological problem, you know. And, as as we may or may not roll our eyes at the kind of the metaverse and all that, and they sort of Facebook pivot to that kind of thing. But it's kind of clear what they're trying to do. And it's clear why they're trying to do it. And it seems like a really big prize. Having said that, I think that the benefits of city life, to those who like it are really, really huge. You know, the downside, of course, is that you're away from nature and that you're away from, you know, a lot of the can space and peace and quiet that you can get in the countryside. I should declare my interest here. Having grown up in the countryside, I never want to live in it again, it's lovely to visit for a week. But it's it's not great to live in for 15 years. But I for me, for me, I know that lots of other people disagree, but it's I'm a real city, it's like a but you know, having said that, like cities do have huge, huge amounts of immunity. And they have friends, they have you know, my colleague, Ben Southwood wrote a lovely piece on the kind of the under the under agglomeration of friends. And, you know, why is it that people love their university days when they look back, like, it's not really the university lectures, it's the fact that you're on a campus together, and you're all sort of able to just hang out with your friends at 10 minutes notice and go and get a beer or watch a sports game or whatever it might be. And cities provide that to some extent, in a way that country living and suburban living doesn't really offer that. Obviously, I'm a, you know, I am not that young anymore, but I'm kind of on the younger side of death. So I so I may, I may feel differently when I when I am more settled in my life. But I think that cities will always have that sort of melting pot effect of, you know, good foods, lots of options in terms of nightlife and lots of options in terms of it and entertainment, and people. And, you know, I do think that to those people who like to innovate, whether it is in the creative arts or in business or whatever, they will tend to find it easier to do it in real life. You know, I work at works in progress with a team that is split kind of across the world. But we often will try if we can to co locate in the same city or you know, spend a week in one person's area or another person's area because there's there's a lot of magic that happens when you're a face to face and you know, in the pub or just working in the same office and you can just you know, have a quick random chat about something that doesn't really kind of zoom and slack don't really care convey, but you know, I wouldn't claim to be an expert by any means on the general trends.

Unknown Speaker 30:06

That make sense. Sam, we've talked a lot about, you know, housing and how restricted housing supply and the nature of housing itself has contributed to perhaps a lot of our stasis stagnation in decades here in the West, what are some policy interventions you're a fan of that you think could help? Is it you know, just upzoning? Everything? Is it, you know, special tax regimes? Is there anything we could do that could could help fix this problem?

Sam Bowman 30:33

Yeah, so I think there are loads of things. And there is, I think, a very big split, although hopefully, it's a friendly split in the supporter Eunbi movement, but kind of the pro housing, yes, in my backyard people. One side, I think sees the path to more housing as being about, you know, building a political coalition that is larger than the NIMBY side, and changing the law in such a way that, for example, you get rid of single family zoning laws, so that it's possible to build more densely and stuff like that in suburban areas. I think that that probably does have legs in lots of places. And I think that in the US, especially because the political system is relatively localized compared to the UK, I think it's a lot more feasible that there will be cities where you can build that coalition, or where you know, just because of randomness, because of some, some politician has a scandal, and they need to get the headlines out of the way. So that the, you know, the author ads are kind of random effects that can lead to policies being moved. So I think that people who see it as being about a kind of coalition or being created in a lobbying past, that's, that's kind of one way of doing it. The other side, and I have to admit that I'm not on that side, I sort of tried for about 10 years to be on that side, or it used to be on that side in the UK. And maybe because the UK has such a centralized legal legislative system, there is pretty much in my view, no way of beating the kind of NIMBY bloc, politically, like there's nothing that we can do to just say, you know, what guys, you lose where we're going to allow much more housing to be built. So my, my greater interest is in how do you if I'm right, and if we are right, that there are huge amounts of wealth gains, and there's huge amounts of extra output and wealth that could be created through housing liberalization? How do we design mechanisms such that we are able to share some of those benefits with the people who would lose otherwise from the policy? And that's kind of what I mean by like, Win Win policies? I think that in lots of areas, if you put a gun to my head, I would say, Yeah, I think I do probably have, I do kind of have the right. I do know what the best health system roughly looks like. I do roughly know what that yeah, and maybe that's a kind of an arrogance thing. But I think there are lots of people in those areas, who would all agree that they you know, even if they are on different sides, they will all agree. Okay. Yeah, this is an improvement on the pension system we've got this is an improvement on the climate system, the climate policies that we've got, the difficulty is how you get there. And the difficulty is how do you craft a political solution such that the people who would lose out from moving to that can be either bought off if you're cynical or can share in the benefits if you're using kind of politically nice language. So with housing policy, a favor is basically very, very, very localized democracy, on the street level, or on the block level. So in the UK, we call this street votes. And the idea is to say that individual streets and you know, what counts as a street is a highly controversial issue that needs very, very careful legal consideration. And and, you know, we are, we have, we have kind of made suggestions about what that should be. But individual streets can opt to have a vote for residents of that street, which includes renters. So renters are not disenfranchised, and landlords who are not who are not resident in their properties do not get a vote, get to decide on whether they want to allow denser construction on that street. And usually, it's it would go along with a design code that they would choose as well. And in the UK, the design code would be the sort of it would be up to them. Most people according to the polling that we've done, and most people according to the surveys we've done would tend to prefer the sort of Georgian and Edwardian style that I think probably most people listening who have visited the UK will associate with sort of the beautiful parts of London, the kind of mansion flats that are maybe six storeys but not not 10, not 20 but not to either a different streets votes with a supermajority to allow more dense construction and to design code, then they are allowed to do that and the existing rules that constrain their development. Don't apply

Lars Doucet 35:00

So this is a way to get around the whole, like, local control argument where local control means like 10, organized NIMBYs, who are super loud show up to every council meeting drown out everybody else. And so you're like, because I'm like, do some demos. This. She's a really, really, really great housing writer, she's written a piece called local control is bad, actually. And her solution is to move the locus of decision making up to preempt the local decisions, but you're saying the other way to do it is to go even further down.

Sam Bowman 35:32

Right? Correct. So so and so why would you ever want to do that? Right? Like, why would you possibly and and you know, to many people, this looks like a NIMBYs chatter. The reason is that the closer you get, and the smaller the breath, the smaller the unit of decision making, the more connected the decision is to the benefit. So for example, imagine if we had a single house on a street, and we said individual houses can decide on their

Lars Doucet 36:00

density laws. Well, that's a libertarian argument.

Sam Bowman 36:03

Indeed, indeed. And and I think that we would, if anything, have too much housing being built, I don't really believe that such a thing. But you know, if there is such a thing, that would get us to much hasn't been built, because the decision maker would have a huge incentive to vote for more development, they would be they would become rich, they would, they would never have to think about anything, any of that none of the externalities of new housing would apply to them, they would just be able to vote for more housing, and they would do it. If you then said, Okay, maybe we will see two houses get to decide to any joint pair of houses can decide, I think, again, you would say, okay, then they do start to experience some of the negative externalities of the housing on each other. But the benefit is mass is massive. And the benefit is, is, is so enormous, that they will probably all just vote for more housing. So the broader you make that decision making, the more important I believe the negative externalities of housing become, and the less important the positive private benefit of the extra density, which is the increase in your land value becomes. So the real question is, at what point should we draw that line? So So if we think one house basically bears none of the negative externalities and gets all of the private gains, a city deciding, basically gets all of the negative externalities, and are a kind of a local municipal council deciding on a street and developing that local municipal council experiences all of the negative externalities more or less, but very, very, very little of the positive benefits, the increase in the land value? So my argument is just that we we have to find a point in between a single house and a local municipality that is better balanced between the negative externalities and the positive gains,

Lars Doucet 37:47

but you're arguing still that like these negative externalities balance out in the large picture, like it's still a major net gain to build housing, it's just the configuration of the negative externalities causes these weird market failures with local councils?

Sam Bowman 38:02

It's yeah, so I think in terms of aggregate welfare, more housing, almost always benefits is almost always beneficial for a kind of aggregate global welfare. But the system that Jerusalem is criticizing is one where you basically have no incentive to say yes, you There is basically no reason at all, at the I actually don't know the exact kind of levels of US housing decision making. But at the UK, the kind of the Borough Council level or the parish council level, basically, the the different types of local councils that make decisions about housing. At that level, they have only negative reasons, they only really have they don't get the benefits, they don't experience the benefits, the benefits are pretty centralized, and then really only accrue to the landowners who would be able to build more densely, and the potential homeowners who probably possibly don't even live in that area. So it's street votes does is to try to align the decision making with the benefit and the negative externality so that the people who bear most of the negative externalities are also the people who would make most of the gains. And so you can just imagine, in a street in London, would like the one I live on, which might have a lot of two story houses. If you if those houses could opt to be, say, five stories or six stories, the owners of those properties would become a lot richer, they would possibly see their properties double in value, they can become multimillionaires overnight. So on that street, all of those homeowners, even though they might not want any of their other neighbors in a perfect world, they might veto all of their other neighbors getting more houses being built. If they also get a benefit from more houses being built because their land is reclassified as well. They suddenly have a really big financial incentive to vote for more density. And I think that that will probably get us quite a bit more housing. I don't think it will solve the problem by any means. But I think it will get us quite a bit more housing, and I think it will do it through In what is in effect, a cozy and bargain, where you're effectively being able to sell your objection to new has in exchange for you also getting permission to build more housing, we're making the decision so collective that there's a really, really big incentive for you to vote yes.

Lars Doucet 40:22

So if you can close in two as Americans here, like what what exactly is going on in the UK right now, you know, you've got the Tories, you know, figuring out who they're gonna replace Boris with? I'm not sure if they've made a decision yet, you know, is is the housing crisis salient in UK politics? Like I assume it's salient for the average UK citizen, you know, as to like, deal with trying to find a place to live. But like, are the UK politicians like talking about housing policy? Are they talking about, you know, gimpy policies or, or anything like that?

Sam Bowman 40:55

So it's somewhat salient, but I don't think yes, it is salient, especially for younger people. House prices are very salient for older people, because older people disproportionately own their own homes and have a very strong interest in not losing value in their own homes. It isn't a massive political issue. Interestingly, the previous Boris Johnson administration, which which we're living through the last couple of weeks have did actually try a very radical approach to housing they actually that that government tried to do something akin to the kind of what I characterize as, like the US can be approach, which is they basically tried to bring in zoning into the UK and tried to say, you know, you will have by right zoning and lots of parts of the UK where the law is that you can build up to a certain story, we will just impose these rules on lots of parts of the country, and so on. And had that pass, that would have been an incredibly radical change. And it would have it wouldn't have solved all of our problems, but it would have made a huge step forward. But it was doomed to fail. It was always going to fail. And I did a Twitter threads last year, in May last year, kind of as this was being released, saying like, I look, I wish this would pass, but these are the reasons it's going to fail. And this is how it's going to fail. And you know, not to toot my own horn. I was bright, you know, I was I was and it failed. It crashed and burned, very large block of backbench Conservative MPs mobilized because they were people who represented all these areas that felt that they were having more housing imposed on them. And they said, Look, we're going to rebel. And the way that UK system works is if you get a big enough backbench rebellion, you very very seldom get support from the other side of the house. So it's very difficult that basically bipartisan legislation doesn't exist in the UK, it's it's almost unheard of. So you have a sort of elected dictatorship for five years at a time that sort of passes for passes between each side of the house. But if you have a backbench rebellion, that's big enough, and you just can't get your thing through. And I think it was, in my opinion, it was always clear that this was going to happen. I think that it's it's very predictable why that was the case, I don't think I'm a prophet. It's just that if you try to if you try to force via legislation in a country that has a very large block of homeowners who like the way things are, and if you force on them, that we are going to change the way your neighborhood looks, without them having any option in that and without them having any any way to stop that they will, they will be furious, and they were furious, and it failed. I am more optimistic about street votes. It was in the draft white, the draft bill that the government recently brought forward to replace the previous bill, the previous bill was scrapped it when it failed, they brought forward a much more timid bill, sadly timid, but on the bright side, it might actually pass there is a lot to be done on the detail. And, you know, as I've said, there are huge arguments about like, even what counts as a street, let alone what are the exceptions to this? What are the processes by which you can have a vote? Who How do you make people that are how do you get people to vote? How do you allow people to vote? You know, what can be proposed? What can't be proposed? What happens? And there? Are there all sorts of negative externalities that aren't felt on the street, you know, our view is that like roughly something like 90% of the negative externalities are felt on the street. But you know, for one is but one very obvious negative externality is still we're broadly is traffic congestion. And as much as I would love road pricing to be brought in, we're not going to get that anytime soon. So what happens about the extra drivers that you have when you densify a street when and how does the kind of the community more broadly, that gets negatively affected by that and get to have a say, these are all things that we have given thought to we have suggestions about how you can either avoid that happening. So for example, in lots of parts of London, you could tack some of the uplift and put that into public transport and require that the new development doesn't have parking spaces. So you can see, basically, these houses can't just cannot have cars, unless they can find a private way of providing for them. But there are all sorts of questions like that, that probably are too boring and detailed to get into here that we need to get through. But there's lots, there's lots else that we can do on housing in the UK, at least.

In addition to streets, there's a lot of land behind houses so so a lot of the kind of blocks that are particularly in London that exist have either kind of car parks or sort of slightly wasteland kind of no man's land type areas and sort of just, you know, alleyways and things like that, and, you know, sometimes gardens as well, that, in my opinion, could be used a lot more productively, and a lot more valuably if we densify them and kind of turn them into super blocks in the in the Barcelona style, where you have roads at the front, and then you have kind of pedestrian passageways in that that lead into little cute housing developments. Again, the best way I think of deciding on whether that can happen is letting the relevant people in this case, not the street, but the block around that those areas, vote on whether to allow densification on those on those areas. And that's another way of using urban land in a much more intensive way than we do right now. So I'm pretty optimistic about those kinds of approaches, kind of more broadly. You know, I talked about agglomeration. And housing isn't the only element of agglomeration. You know, we also have things like traffic congestion, like road pressing, which I just mentioned. And you know, for me right now, one of the cutting edges of policy is how do you make road pricing something that we actually can implement? You know, how do you first of all, make it so that you don't have drivers, blockading every every roads? And truck drivers block every road and fury? Like what are there things that we can do so that motorists feel that this is a good thing for them? Which I think it would be, but I think it's hard to it's hard to get people to feel that, hey, we're going to start charging you by the mile. Good. Congratulations, we need to come up with ways of doing that. Crime, I think it's a really underappreciated issue in the, in the Western world, they'd be effective crime on people's willingness to live in cities, and people's experience of living in cities is really underrated. And the more that we can reduce crime, via things like better detection, better and smarter approaches to sentencing and rehabilitation, it's like that, I think the better we can make it to live in cities, and so that so the more easily people can agglomerate. And you know, things like urban pollution, air pollution, again, you know, there aren't that many people who are pro air pollution. But it's difficult to think of ways of reducing certain kinds of air pollution in ways that doesn't create in ways that don't create massive losers. I think it's possible, because I think the benefits are really large, if the benefits of a policy are large, but it should be theoretically possible to share them in such a way with the losers such that they become winners, too. The question is, how do you design that? And to me, that's quite an exciting frontier of public policy work. I think that some certainly not suggesting that I am. Or, you know, we are the only people to ever thought about this. But I think that the most interesting work in this sort of area is around crafting these kinds of ideas. And sometimes it's about looking to the past and looking at ideas that have worked before.

Unknown Speaker 48:21

Sam, I'm curious, you mentioned the problems with perhaps a public building political coalition's around the NBA ism and pushing that through against like a strong, you know, NIMBY lobby, particularly in the UK, and in some of the some of the problems with that, you know, how do you think about, you know, when it's best to go kind of straight on against these problems? And when is it best to kind of take this this hyperlocal level, and it's just like the hyperlocal approach, underrated at some level, and we should just lean on that more for some of these problems.

Sam Bowman 48:53

So I wouldn't characterize the general theory as hyperlocal. I think hyperlocal works when it comes to housing, I hope I could be wrong. But you know, when it comes to something like, taxation, you know, I think that I'm a big believer in not how much we tax being the major question, but how we tax it. And, you know, whether we tax via capital taxes or taxes on negative externalities, like pollution, or taxes on consumption, or whatever it might be, I think that those have huge effects on how rich we are and what our economic activity is. And so it's something I'm really interested in is how do we move to say, taxing the consumption of the rich, less than taxing the investment of the rich? You know, how do we how do we make it so that we get people when they buy a $20 million yacht, rather than when they invest $20 million in a factory or when they invest $20 million in a VC fund or whatever it might be? Because eventually that investment, they will, they will consume at some point they will buy a yacht or whatever, at some point. And I'd much rather get them at that point when basically the resources are no longer being used by society. Actually, they're being used by the rich person. But again, that's like a very difficult question about how do you design a system in such a way that you can kind of make sure that people who are not rich or people who are who are either who are either not rich or her either a large or a large enough political bloc, that they will stop you from doing this. feel kind of bought off? Again, I don't know, the straightforward answer to that question. How do I think about that? It's, I think it's really about how big and how important and powerful is the coalition against doing it? So you know, in the US, I'm sure there are places where people can be convinced, where, you know, you can use arguments. And, and ultimately, I do have to say, I do believe that most people vote in altruistic ways. And most people do actually vote in, in where and I think there's pretty strong empirical evidence for this, I'm not just kind of Starry Eyed IADLs, I think that there, there is pretty strong empirical evidence that people vote for at least what they think is in the interests of their country and their their neighbors and things like that. It's just that people have an extremely biased and skewed version of that, because it's mostly drawn from the people immediately around them socially, professionally, and geographically. So sometimes you can persuade them and like, sometimes I think climate change, for example, you know, it, the huge strides forward, that have been made in terms of climate change, have not really been made by coming up with a really clever policy that we've sort of snuck in here, some, some kind of side door that had been made through debates and people looking at the world around them, and, and kind of public education and, and stuff like that. So I think that's an example. And you know, sometimes you sometimes you just can't craft a solution, sometimes you sometimes the rhetoric will just and they the explanation and the education, whatever you want to call it will be a more effective tool. But I think we're just underrating the kind of clever keyhole solution approach. You know, the A great example is what I think it's called the 401 C three, or is it the 401? K? Sorry, um, yeah. For retirement plan. Yeah, I'm mixing my 501 C three with my four. Okay, so American tax code is a is a really extremely difficult thing to reveal your subclasses of, but the 401 K really was very, very obscure element of a bit of a budget bill. Decades ago, that was not widely debated, it was not widely considered to be a massive change, it was not at the time brought in, maybe, maybe it's maybe the people who actually wrote it in did think it would be a huge change, but it was not recognized as such. But once it was in, people started to use it. And once people started to see other people using it, it became an incredibly powerful vehicle for people to save for their retirement. And so I think we underrate their quiet, small keyhole solutions that look very simple and look very bland, but may have really, really significant kind of gains. And and to me, that's kind of where the frontier of researchers, you know, it's it's not in, I don't really think I have a general rule, I think more of that I'm really interested in seeing, like, where are these ideas? Like, where are these things that we could do to improve it? You know, another another area where I think there's unlikely to ever be large public debate on one side or the other, but it's around how we do science. So meta science is the term that I like,

I don't think that there is a clear solution. And I don't I don't know, and it would be crazily presumptuous of me to say, you know, oh, we should we should do research funding like this, or we should research funding like that. And I don't really think anybody knows the real answer to how we should do research funding. But I think we should probably experiment on it. And I think that the real challenge at the moment is to come up with ways of facilitating that kind of experimentation, make it easy for institutions to be a bit more unorthodox in the way they do their funding and measurement and for that, and, and just track what they're doing and make it easy for people to experiment a bit more. And hopefully, that leads to slight momentum. And, and learning around what works and what doesn't work. There are loads of areas where I think that the world is and I think that everybody in those areas would agree, things are much less good than they could be, you know, the one thing that I'm really struck by and the reason that I kind of an optimist is that people, wherever, you know, you know, this expression, everybody's a conservative about the thing that they know best. But everybody is also incredibly depressed because everybody thinks that the area that they work in could be so much better. And they may have a really crazy madcap idea, but the knowledge base, there are loads and loads and loads of parts of the economy and none of our lives where we're sort of underperforming can be Add to various other parts of the world or compared to other parts in history where we've done it better. Makes me think that there are very, very significant welfare gains to be had, just by changing how we do things, rather than by having a big fight. We're having a big kind of war over over what we do.

Unknown Speaker 55:18

That's great. That's great.

Lars Doucet 55:19

So So to sum it kind of up, if you can complain about the state of the world that strictly implies, what could be better, that you have an idea of how it could be better.

Sam Bowman 55:28

It doesn't strictly imply, but most of the time when people who are knowledgeable and good faith and fair minded complain, when pushed, they will start to give you examples of how they think that their area could be improved. And they could be wrong. But at least for knowledge that there is experimentation that could be done that isn't being done, kind of makes me think that there could be gains to be made.

Unknown Speaker 55:51

That's great. That's great. Sam, I love that call to action. And hopefully, hopefully, people can go out there and improve the world and in their specific domain with that kind of knowledge. Sam, thank you so much for joining us today. Where can people find you? Where should we send them to find your work?

Sam Bowman 56:08

The best place is Twitter. I'm s eight, the number eight and be on Twitter. And that's kind of how I run my life. So if I've done something, it'll be there. Excellent. Excellent.

Unknown Speaker 56:20

Thank you so much, Sam. Thank you.

Unknown Speaker 56:26

Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38

Well, David, how are you doing this afternoon?

David Goldberg 0:41

I'm well, thanks. How are you? Doing?

Will Jarvis 0:42

Great. Thank you so much for taking time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

David Goldberg 0:51

Yeah, brief bio. I'm an American living in the UK. I've been here for about a decade now.

I've had a slightly weird journey, I started my career as a high school dropout and finance for four years, then went, started a business in Europe in 2006, that I sold in 2008 made enough money to think about giving most of it away and, you know, got pretty frustrated by the state of play in the charity sector and decided I probably needed to learn more. And you know, 25 went to university for the first time and turns out, I like learning as an adult and ended up coming to the UK a decade ago to work on a PhD, which I dropped out of the Start founders pledge. And that's what I do now. And I've been doing that for the last eight or so years, seven half years. And big ideas. I'm really interested in how we can coordinate better to solve really tough problems. I mean, if you look at the news these days, all I tend to see is just doom and gloom. And how increasingly precarious the balance we have in on this planet is. And I don't just mean about climate. But I mean, in lots of respects. And on the same token, you have like, we've never been better off as a people as a species before, we've never had, you know, better health, more happiness, like all of the big indicators are getting better in lots of respects. But they're still like this precariousness. And so I think that there's a really interesting space for really smart people to coordinate better, as they think about how to apply resources for tough problems. And so I'm excited about that. It's sort of what I do at founders pledge and what we do at founders pledge. And, yes, I'm interested in how we leverage communities of exceptional people to do good stuff.

Will Jarvis 2:51

That's great. That's great. You wrote me a question there I've had for a while, which is, it seems like humanity has, in some sense, gotten worse at coordinating around big problems. I think in context of Apollo and man, the Manhattan Project where we were able to build these like incredibly, technically difficult things, we weren't even sure they were quite possible in very short periods of time. But it seems like it's almost impossible to imagine the Department of Energy, which was actually the Manhattan Project originally doing that, again, like that same thing. It sounds like it just seems like it just wouldn't work. What do you think has gone wrong there? And how do you think about fixing that kind of problem?

David Goldberg 3:27

It's a really good question. And actually one that we've been thinking about, along with a bunch of other funders in the space there, too, that are trying to harken back to these times gone past where humanity could seem sort of seemingly accomplish these incredible feats in small periods of time. And I think it's a question of, like, willpower, and, you know, the Manhattan Project and the Apollo missions were, like, a sort of a great power balancing act, right, where you had the entire might, and we'll have the US government and a relatively in line, political class just deciding to throw their weight behind this idea so that America could best the Soviets, right? And in the Apollo sense and defeat, Nazism in the in the Manhattan Project sounds so like, we it's good that we don't have threats like that anymore, or like, or the type of sort of monolithic thinking in that respect that enables a country like the US or, or Europe to go about, like, sometimes scary types of things like the Manhattan Project was scary. But but it also has meant that we've really not made big advances in areas that seemingly what unlock a huge amount of good for the world. And, and one of the funders that we've been impressed by recently has been thinking about this as Schmidt futures, which is Eric Schmidt's family office that has a big focus on impact. And we've been exploring with them. This so called foundational research offices sepharose. Actually, that's not fri I don't think, Oh, I'm getting a right foundational research organization, sorry, that are basically looking into setting up Manhattan style, Manhattan Project style projects for various issues. And so I think it's a question of like, a meaningful amount of money, and good coordination between the line doctors deciding to say, we're just going to sort of throw caution to the wind, and fun stuff that we think is going to be transformational for society.

Will Jarvis 5:46

That's great. I, I'm curious, is there is there another element that matters like in like, so when we think about these big mega projects? You mentioned something interesting, right? The great power conflict element to it seems to me to be really important. So this idea like you, and I, David, if we were Manhattan Project, scientists, and general groves comes to us and he's like, you know, you need to work really hard. Because if you don't work really hard, you know, like, we're gonna lose this war, it's gonna be terrible. And like, you know, the Nazis would come over, and they're gonna take over this country. And that was the story at the time, they're going to invade North America and eventually come down, you know, wherever you were. Do you think it's, and we've had Adam marble stone on the show as well. So this is a this is a great, great connection from the FRA angle. Is it difficult, you know, if you spent up on fra, for, let's say, fertility research, if you don't have this kind of, you know, human adversary you're worried about that forces you to work kind of doesn't force you, but encourage you to work 80 hours a week on this project. You know, do people just not work as hard? Is there a way to inspire people to work really hard on these, these problems that are incredibly important? Maybe as important as you know, the problems the Manhattan Project was solving, and Apollo we're solving but don't have this, like, kind of human enemy element that, to my mind sounds like it seems really important to encourage people to scares people into working really hard, if that makes sense.

David Goldberg 7:10

Yeah, I'm not sure. I mean, the example that I thought of and then laughed about, because, you know, it's going to be, I guess, slightly controversial is like, we've seen people be motivated to work 80 hour weeks and through weekends, on big projects, they tend to be led by Elon Musk, right. So you think about SpaceX and Tesla and just how these two industries have been fundamentally disrupted by this guy who basically inspires action. Without this that threat of like, you know, extinction or Maga, yeah. Right. But through I'm not sure what. So I guess more Elon might be the answer, in some respects, and less than in lots of others. I'm not really sure. That's the truth. So and I guess maybe it is a bit of like, if we don't do this soon. We're like heading into a brick wall, except the brick wall is not brick. It's like a big, you know, huge metal wall, that's, you know, several meters thick, and it's very hot, and we're not going to survive a crash with it. And we're sort of heading in that direction. And a lot of respects, I just don't think everyone has realized it, or really internalized it yet to the extent that would compel people to work those 80 100 hour weeks, in the way that might be necessary to like, develop. Right? Foundational new technologies.

Will Jarvis 8:41

Absolutely. Absolutely. Well, I have a question. I'm gonna jump around a little bit on my outline, I'm sorry, but it is aligned here. How concerned are you about AI safety ai ai X risk? It does seem to me like one of the big problems in the AI safety space is a lack of coordination. There is no like Manhattan Project for AI safety research. And perhaps if we could coordinate everyone better in some sense, I feel like our odds are better. And it's not like we're youth. kowski is kind of like, you know, writing these these blog posts where he's kind of given up and says, you know, it, at least in my mind, that that's how I read it, that we don't really have a chance, I think we should try really hard to make sure AI safety goes right and AI alignment goes well, and it seems like a coordination problem at some level.

David Goldberg 9:24

It's definitely a coordination problem. And, and I, I don't know, maybe maybe the theme of you know, this, this conversation so far is I'm not sure but I'm, I'm not feeling super optimistic, if from, from my perspective, and I'm certainly not an expert in AI safety in the way that Eliezer is or any of any of the other much smarter people thinking about this. What I do understand is that the people focused on AI safety research are dwarfed by the people. focused on developing AI as quickly as possible. And the difference in budget scale and ambition is hard to fathom between the ones that want to develop AI quickly, regardless of safety concerns, and those who want to do it safely, it's just there. It's two different leagues. Yeah. And when you when you think about, let's just constrain it to the west for very, very briefly, and, and then we'll sort of expand that, that sphere that we talked about, like, even the West, where you have a relatively aligned political institution, group, and a relatively aligned economic set of incentives, it still is just seemingly intractable, to get people to talk to each other. And this is, you know, and we're talking about developing commercial uses for, you know, for AI, it just, I don't see how we how we can coordinate that better absent some, you know, some new piece of information, some extant something happening that really rallies people together, I'm just, I'm not sure what it is. We can throw money at it, we can throw AI safety researchers at it, you know, we do with we do, we'd be much better with like, five more elicitors lasers. But like, that's not going to happen. If you expand the sphere to think about China, then it becomes a fundamentally different question, because it's not about AI for commercial, real use. It's AI for dominion. Right. And I'm mentioning Eric Schmidt again, but you know, his his his views on this have have been pretty eye opening, mind expanding just his view on China is they are developing AI at a breakneck pace, because who develops it first wins everything right. And, you know, call that what you will, but they are throwing a huge amount of brainpower at it a huge amount of money, with no real, as I understand it, question of safety. And that's very scary to me.

Will Jarvis 12:24

Well, is it a question, then, you know, if you're the American President, if you're Joe Biden, do you just, you know, say, Give Caskey like, Please stop, you know, please, please stop. But we want this first, if it's gonna be primarily defensive, you know, how do you, you know, is the US government in this kind of public choice dilemma, like, kind of encouraged to just like, you know, not fun, any AI safety research, we need to be the first ones to get it, because if the first one gets it wins, then, you know, we're really in trouble. You know, if AI safety if everyone in the field thinks it's really not possible to line these things, it's just like, Well, I'm gonna let the chips play up. That's not a very, you know, rosy picture.

David Goldberg 12:58

I don't know. Yeah, I'm not sure. I think. I think it's maybe a potentially a false dichotomy, like the giant the Chinese view is, like, who those who get it first when and, you know, and sort of the more EA view would be those who get it first. Everyone loses, right. Like, it's not it's not like winners. Winners take all it's a everyone loses, except, except for the Right. Right. Right. So I think it would be probably not smart to stop AI safety research. Exactly. If anything, you know, the goal of the goal of that research should be, I would expect better communication between the various labs on this. And I mean, if you look at medical analysts, the forecast for AI timelines is very close, like, very significantly recently. And, you know, I'm certainly not an expert, like, again, not an expert. If I could wear the hat. It would say not an expert on it, but like, lots of people are and, and I trust those people. And it seems to me that we're fast approaching, either that brick slash metal wall or very large cliff of some variety.

Will Jarvis 14:18

Definitely. And do you guys support any AI safety AI alignment? Researchers at founders pledge?

David Goldberg 14:25

Oh, yeah, definitely. I mean, all of the usual suspects. We are big believers and in the need to put lots of philanthropic dollars to work to focus on developing safe AI, or slowing down the development of AI, aligning incentives in in these types of systems as well as all of this sort of biosecurity and in broad X risk areas, I mean, we've also done research on lethal autonomous weapon systems, we've just put out And we've done research on that we published at the end of last year on preventing great power war, which we also consider to be part of this long term just worldview, bucket of funding opportunities. And, and the representation of future generations and democratic institutions today.

Will Jarvis 15:20

That's cool. I do you think about, you know, ranking these interventions, evaluating new calls areas, you guys have a framework you use that founders pledge to try and like figure out like, what's the best highest leverage things to fund?

David Goldberg 15:34

Yeah, it's, it's a relatively complicated question, actually solved, maybe sort of walk you through it. And we could stop at various places, but it's gonna sound pretty sort of cut of the standard cloth at the start. And we start and that start is we try to prioritize the world's problems based on importance, relative neglect, goodness, and our ability to actually make a meaningful difference to them. And neglected in this framework is really sort of shorthand for the question, could a philanthropist add value in this space? And one way to approximate the question is to look at the scale of the problem and see how much money is being spent on it by philanthropists relative to its scale. And indeed, we do this a lot of the time. So to give a sense of how this might work. And and to tie it back to one of the things I just mentioned, I'll point to an example, in our recent report on lethal autonomous weapons systems, which our research suggests, poses a pretty meaningful threat to global stability and could be a causal pathway to a nuclear exchange or other forms of great power conflict. And the strategic stability risk posed by autonomous weapons largely takes the form of government spending on these systems. So in 2021, for example, the US Department of Defense requested $1.7 billion to work on autonomous weapons. And on the other side, philanthropic funding in the space is only about two and a half million dollars a year. So the ratio of philanthropic to military investment is around one to 680. And we can stack that up against cybersecurity, for instance, where the ratio is one to 62. So autonomous weapons, are philanthropically neglected relative to cyber issues. And also to take a step back. More generally, since we think two and a half million dollars is not very much to spend for an issue with potential catastrophic consequences, just not enough money. Yeah. But we don't always do sort of a neglected pneus. Exercise this way. And the question isn't always how much money is being spent, but sometimes is the money being spent wisely. And the work we do in climate, for example, is indicative of this. And the reason that we work in climate is, despite the fact that there $600 billion being spent on it annually, is we think there's a good reason to think that that money is either misspent or at least the tendency in the climate spaces for the next dollar to very likely be misspent. So, an example quickly. Carbon removal plays a really big role in many of the IP, IPCC emission scenarios that keep the world under that two degree warming over pre industrial levels. But it's historically been dramatically underfunded, relative to other types of solutions that are more popular with the stakeholders driving philanthropic activity in the space. So within climate neglected, this refers loosely to systematic, systematic bias. And our own work is largely focused on applying leverage in the policy landscape to try to fix these funding imbalances. So neglect to this sort of starts that conversation. And, and then, and then we look to, you know, effective solutions. In these problem areas that take data and evidence led approach, we think about solving them. And so we sort of go through, you know, the pretty standard importance and tractability phases of the standard ITN process. And then we look to organizations implementing cost effective interventions that have room for additional funding, and then make recommendations about which are most impactful. But we take different approaches based on different worldviews and like others in the space we we have a three worldview approach. We care about current generations, and that's largely the kinds of things that global health and development charities, you might think about focus on, we care about long term ism, which is the welfare of people and other creatures living in long term future and animal welfare. And we do this sort of worldview diversification out of genuine moral uncertainty, and it's a strategy that we've adopted based on open philanthropies worldview to diversification framework. Gotcha, gotcha. I'm curious.

Will Jarvis 19:34

How long does that evaluation process generally take? Is it kind of a quicker thing? Does it depend on the problem you're evaluating? Yeah, how long does it generally take you guys to kind of come to a conclusion that something is a good idea?

David Goldberg 19:49

It really varies. So we start by doing shallow investigations if shallow investigations prove promising, we do medium depth investigations, and if they prove promising, then we do full cause area write ups. It just came out of a meeting with one of our researchers walking me through a medium investigation into an area we're considering. And she spent the last three months working on it. And and it seems pretty promising. And we'll likely do a deeper dive cause area investigation, and that's going to take another couple of months. Yeah, before we even get to what are the funding opportunities in that space? And so, you know, I guess, if I had to put a range on it, somewhere between three and eight months it takes to produce a piece of research that we're happy with that will stand behind that we're willing to put our high impact Funding Opportunity label on the and then recommend to our members to fund gotcha, gotcha, that's very robust. It's rigorous and pretty time intensive. And, you know, there are ways, you know, ways to actually increase efficiency and decrease time spent on this stuff. But it's, they're not super generalizable.

Will Jarvis 20:55

Got it? Got it. Got it. I want to back up a little bit and get back to the beginning kind of a founders pledge. David, what was the moment where you realize like something like this needed to exist? Was it like, you know, you made like, a, you know, big pot of cash? And you're like, Okay, how do I make the world better with this liquidity I've got, and you start looking around at charities, you're like, wow, like, the nonprofit industrial complex is not exactly the best way to spend the money. I need to spend something else up it, what did that kind of process look like?

David Goldberg 21:25

Yeah. So it, I'd like to say that it was like, way more strategic than it really was. But, you know, it wasn't, I was, like, you say, I made a pot of cash, wanted to give it away, I felt like I'd gotten really lucky in life a bunch of times. Even though I didn't really think that I was growing up that I was like, my family grew up very working class. And, you know, I would have thought we were poor. But you know, as I got older, and saw more of the world, and really understood, really understood, the place that I had in it turned out to be like actually really, really very well off, like a white man born in California in the 1980s, like, pretty good, sort of won the life lottery there. So, you know, I thought, I've had some success in life, I've gotten really lucky a bunch of times, I should give money away. But the you know, as you say, the charity industrial complex seemed broken. And I didn't really understand what to do as a next step. But I, you know, I definitely didn't have an education to speak of, and I thought, you know, if I'm going to use my money, well, I need to actually figure out how to think better first, because I didn't have a good OS, right? Like I was street smart. I knew how to run a business. I knew, you know how to hustle. But I didn't really understand how to think systematically mythologically around big issues, and so I, my, my thinking was, I'm going to go get an education and actually learn how to think better. So I spent, you know, five years, six years doing an undergrad and started a PhD. And, and by the time I was into, like, the second year of my PhD program, I had gotten itchy feet, I wasn't really sure. Like, I sort of lost track of like, why I did this to begin with the PhD felt like the next logical step, like it would really, like take me to that next level. But I wasn't really sure what that next, like what the next level was going to be for me. And I sort of took a took a step back, I remember. Like, I was up late one night, I was, I was in my apartment, and I was just like, I had really itchy feet. I was just like, I felt anxious. I'm like, What am I doing? I'm not I'm not sure why I'm going to spend the next four years studying international relations. And I don't know what I want to do next. And I ended up ended up going on the TED website as one does late at night to like, be inspired by really interesting people who speak well about their journey. And I saw a TED Talk by by Dan palapa, which was basically just the most brutal charity takedown I've ever seen. And he just, like eviscerated the charity, charity industrial complex, through this lens of like, they just don't care about like donors don't care about efficiency, they just they want, they want to feel good. And he walked through the story about just how effective and how hamstrung he was by by donors and sort of outside interests. And it was really depressing, actually, and didn't make didn't make me feel any better. And I and then the next suggested TED talk was by Jennifer Pahlka, who had started something called Code for America. And it was like the other side of that coin it was this message of hope. And this message of like, you know, we have this amazing opportunity to leverage technology and technologists to make the world better. And, and she had this and it was just like the most inspiring thing I'd seen. And I sort of decided after watching her TED Talk, like I started thinking about like, Why did what what journey have I been going on? Like, why did I go? Why did I decide to go to college and do a PhD, and it was like, I want to think better about charity. And like, she's just, she just told me that there's a way to do this. And it's the intersection of technology, charity, and government. And I told my supervisor the next day that I'm not planning on continuing and like it, it basically dropped out. And I decided at that point to work at this intersection, and found found a foundation in the UK in London. I was at Cambridge at the time. That was basically recruiting me they've like, wrote a job spec for me to run this really interesting project, seemingly interesting project that was the intersection of

social entrepreneurs using technology to scale impact. And I just loved it, it was just like, oh, cool, I'm gonna go try to emulate Jen Pahlka and, and, and help entrepreneurs build scalable technology and powered commercial solutions to impact driven problems. And my job was to help people become more commercially viable, and it just didn't work. Like it just didn't work. I spent a year on it gave away a million pounds of equity free cash to 20 businesses. And, and it was a failure, basically. And it was like a useful failure because I learned a lot and, and the big, the moment that sort of founders pledge crystallized as a concept was, I'm focusing on the wrong user group. And I'm focusing on the wrong thing. I'm helping these social entrepreneurs try to be more commercially viable. And maybe I should just focus on great commercial entrepreneurs and help them to be more socially impactful, and maybe I should just solve the problem that I faced when I sold my business. What like started this whole journey that I went on, which is like, how do you actually give money away better. And by this point, you know, GiveWell, was well established, Effective Altruism was this burgeoning community, I hadn't really become involved in it yet. And, yeah, and I, and at the same time, we were seeing the giving pledge, and this idea that, like billionaires would should in, you know, must give back of their success in some meaningful capacity. And it just felt like, it felt like the right time to create positive social pressure on people who are going to be billionaires, to get them to commit to give before they actually made their money, while they still were paper rich and seemingly generous, like, but at least have the potential for generosity and extreme earning potential. And so yeah, founders pledge developed really quickly. Caught me and I was like, that aha moment was April 2014. And by March 2015, it was live in the world.

Will Jarvis 28:08

That's great. That's great. I, I'm curious, you mentioned something interesting there. And that's, you know, this idea of like, you know, social entrepreneurship or something like that. And then there's like, that, you know, making a lot of money and then doing good with it. So there's like, you know, there's companies that can do good directly, like in the business context, and then there's companies that, you know, you make a lot of money, and you could do both, right, you can make a lot of money, doing good, and then give it away in a ruthless way. And then this kind of double whammy, but it seems to be like there's, there's a bit of a dichotomy between, you know, something that's, you know, in some sense, helping with climate change, like a Tesla, and then something that's just like a high frequency trading, you know, quant Fund, which is more just like money making, in some sense, you know, maybe there's some attack, right?

David Goldberg 28:50

Exactly. Notorious. Teskey, man, right.

Will Jarvis 28:56

That's great. Yes, absolutely. You know, um, how do you think about, you know, coaching founders through this, if they're, you know, building one of these companies in between, and how they can kind of maximize the most good they can do?

David Goldberg 29:07

Yeah, that's a really good question. There aren't very many of these inherently world positive companies that also have huge, you know, earning potential. I mean, I think you've got Tesla is a really great example. Lots, lots of Ed Tech, sort of fits this bill. Climate tech fits this bill, alternative protein and Foodtech fits this bill. In some cases, pharma fits this bill, but the rest of the sort of consumerist ecosystem of technology companies tends not to and in my view is been, you know, and I've encouraged founders to just focus on having positive social like, financial outcomes, without necessarily harming the world rather than doing trying to focus on doing good in it. I found that people who sell Identify social entrepreneurs tend to be, but not always are less good at the commercial outcomes than those who just focus on the commercial outcomes. And if they are social by dint of the area that they're working on all the better for it, but the self identified social entrepreneurs, I, you know, tend, I think, to have slightly less good outcomes. So I, my advice to people, when I get asked it is focus on building good business, that doesn't harm the world actively, that makes a lot of money. And then and then once you've made that money, give the vast majority of it away to the very best stuff. And and at that point, when you have you know, the, the fu capital, basically, you can you can go about doing things that sit at that intersection. And if we use Elon as a use case, and I think he's a good one here. If you take the human Elon out of the equation, and you focus on musk, the entrepreneur, like, why is he doing what he's doing? His arc is really interesting. And I think, potentially something we can recreate, and certainly something we're attempting to do, which is, you have this guy started a business with a bunch of other white men that became Pay Pal that had a really good outcome. And that outcome gave him fu money, basically. And when he was very young, in his in his career, and he had 50 to 70 years, almost at 100 years, maybe he will, but 50 to 70 years of work life left. And he's sort of stepped back and said, Okay, so what do I do now? Like, what how do I spend my resources that I spend my time, and he ended up sort of coming to the conclusion that I should spend my time on things that are potentially harmful and detrimental to humanity's existence, our fragile existence. And he identified three areas, right, petrochemicals, the fact that we're living on one one planet, and that one planet is susceptible to shocks, and AI, and built three companies around each of those three areas. Truly bucking status quo, and, and building commercial juggernauts that are also social businesses, in my view, and we can debate whether they're social businesses or people will debate and may think differently, but in my view, like, absent Tesla, we don't have an electric car revolution, battery tech isn't nearly where it's at. None of none of the changes that we're seeing in energy infrastructure really exist. Apps and SpaceX, you still have a duopoly with the couple of bloated commercial players that haven't really innovated in a long time. And, and we aren't aiming for the stars again. And open AI is, you know, been an interesting journey. And neural link is the next version of that for Elon, right? Like all three companies. Yeah, all very interesting, all aimed at making money all aimed at doing good. I want to see more of that. Definitely. But that arc is like make money and then go about raising money to like Buck industries that are otherwise unhappy to allow people to change the status quo.

Will Jarvis 33:20

Definitely. That's, that's super interesting. It's super interesting. It seems like you and Elon, you're similar that, you know, you got liquidity early. And that gave you like Slack to be able to go and like solve, like, the problems you kind of like wanting to solve, and maybe you solve the problem want to solve in the beginning as well. I'm not sure I don't know the story. But do you think there's something important about that aspect of like, you know, getting a big win, like kind of early, that gives you some amount of like Slack to just like, look at the entire picture and say, Okay, what is important for me to solve?

David Goldberg 33:55

Absolutely. Gotcha. I mean, it's why it's why founders pledge is doing what founders pledge is doing. Right? So there's, and I think that the people who've gone through the gauntlet of starting a business, and having liquidity in that business, like that pressure cooker creates a different type of human than someone who inherits wealth. And that's not to say that the person who inherits wealth isn't a good person, right? Many of them are, I'm sure, yeah. But that gauntlet of honor, like building something from scratch magic and matching it into existence, funding it sustainably or with venture capital, growing it to a scale dealing with all of the human problems that was like that one deals with in running a business as well as like, the commercial sides of it, the financial sides of it, the product sides of it, it just, it creates different types of people. They're, they're special, and that doesn't mean they're, like special with you know, in a capital S or exceptional. and some in some way that isn't recruitable. But they're like different. And that type of person, I think just is more able to sort of think outside and think think bigger and think outside the box. And, and coupled with extreme wealth. It's a different sort of order of magnitude of ambition, and, and willingness to try stuff. And risk taking. And I think that that generally is a good thing. So like a founders pledge, we focus on people who are going to potentially be incredibly wealthy. And we start working with them, five to seven years ahead of that wealth actually materializing. So by the time they actually have liquidity, they're well positioned to think more strategically about how to deploy that capital to achieve maximum social impact. And that may not always be with charity. It, it often always encompasses charity, in some degree with Sanders pledge by the nature of what our commitment is. But you know, our 1800 members have pledged more than $8 billion, and their collective net wealth is in the many trillions. Yeah, like that. And what that means is, this group of people has the ability to potentially like remake the world in a better way. definitely helped to remake it in a better way. And, you know, for us, it's about coordination to solve those really tough problems and getting the right people connected, and the right times, right, to focus on the right stuff.

Will Jarvis 36:37

I'm curious, David, when, you know, an entrepreneur gets liquidity and founder gets liquidity, and they come to you. And you don't have to, like, tell me how the sausage is made. We can cut that cut this if you don't wanna talk about it, but like, do you just like, do you give them a questionnaire? You're like, okay, like, you know, well, you've done really well, what cause areas do you like, what do you want to look at? Or do you say like, Hey, like, we've kind of stack rank these kind of interventions? And we think like, these are, this is the most tractable and underfunded thing, this is kind of the highest leverage thing you could do at this time. What does that kind of process look like? Or is it just kind of dynamic,

David Goldberg 37:15

it's pretty dynamic, and depending upon the person, and, and where they're at how much, you know, the kind of outcome they're looking at. And, you know, we've created some archetypes, and some, you know, user user types that we know how to serve as well. Well, we'll work with them in different ways. But it typically starts with a conversation to understand, you know, what their ambitions are, what their timelines look like. And, and then we get into some of the specifics, and some people come to us, you know, fully formed with ideas, and, and they really just sort of want validation about, like, what within their ideas do we think makes the most sense. And we can give that, but that's not really our, you know, our, you know, unique value proposition. Most of the people we tend to work with, we start by doing a values discovery session, where we try to understand, actually, what are their sort of underlying intrinsic values that, like, allow them to make decisions in their day to day to day lives that they feel comfortable with? And how do those values map to philanthropic opportunities, and so we sort of tried to translate those intrinsic values into areas of focus. And then within those areas of focus, we stack rank, and encourage people to do the most effective stuff. You know, and at the end of the day, the reason we work with entrepreneurs is because entrepreneurs tend to follow data, and tend tend to be more rational than your average person, though not always. And, and we present data that's compelling. And we present data that tells a story about like, there are things that are way, way, way better than other things. And, and you should find them. Absolutely. And when presented with information, and the comparators between, you know, what they want to do and the outcomes that we expect from that and what we suggest they do and the outcomes that we expect from that. It's a pretty straightforward decision.

Will Jarvis 39:26

That's good. And you've done this robust research, like you describe a process to kind of sped everything. So like, you can give really good numbers there.

David Goldberg 39:33

I mean, we also partner with lots of other evaluators in the space and give Well, open philanthropy, and farmed animal funders, happier lives Institute, and lots of others who are just doing exceptional work and we're not trying to recreate the wheel, right? We're just trying to make sure all of the different wheels and cogs and gears fit together and make the watch tick at the right time at the right rate.

Will Jarvis 39:56

That's good. Another question here. If you look at the gay movement as a whole, what do you think it gets? Right? And what do you think it gets kind of blessed? Right? And I want to like, like, put an ask us on this question that I think that a movement is like probably the most self reflective group of people I've been ever associated with. So, you know, at some point, they do a really good job at this already. But what do you see? That yeah, can do better?

David Goldberg 40:20

Um, yeah. I think that sometimes EA suffers suffers from like, a communications deficit, like it's, you're right, one of the more self reflective communities of people I've ever encountered. Some of the smartest people I've ever encountered. But sometimes, you know, because it's a movement. And it's a set of broad ideas. It's not a monolith. And, and so it's hard to communicate well, as a movement that is so diverse, and its thinking and so and so self reflective. So it's, there's sometimes it's just like a communication deficit, I think. What else do I think?

Will Jarvis 41:18

Is that toward the public? Yeah. Like to the broader public?

David Goldberg 41:23

Yeah, that's, I mean, I think like EA is like, generally, like the way EAS think is generally pretty much the way we should be thinking about most of these things. And if we want more people to, you know, join that movement, it needs to be palatable to them. And, and often it's not, or people develop knee jerk reactions to some of the some of the, the language that's used to talk about things. Yeah, but it's heartless and and essentially, develop very knee jerk views that are hard to dispel and propagate. So I think, you know, most people, in any case, when asked to buy into the basic premises of AAA, do, and yes, they believe a life in Malawi is worth as much as a life in Minneapolis or wherever it is, yes, that they believe that we should use data and evidence and figuring out how to do good, but they sometimes balk at the conclusions that these premises entail, maybe. And I think that for many people who haven't really sort of rigorously got into studying this, yeah, giving is very emotional. And hence, I just, I'm not sure that, like, EA is good at taking that emotional response, and turning it into something rational and sort of, and impactful. I'm not, I'm not sure how to sort of put that but there's like, the emotional givers just seem not to resonate with EA, and I wish they wish they could. And maybe, and maybe that's, you know, a lack of storytelling, I'm not sure.

Will Jarvis 43:12

Right. So maybe we can tell a more compelling stories about how EA is helping, instead of because there's trade off, when you quantify things, it you know, it's perhaps less compelling. But then you want to also be able to, you know, like, sell this to people, you want to communicate this to people, and you need to make it palatable to everyone across the political spectrum. And,

David Goldberg 43:31

yeah, I think I think that that's right. Yeah, I don't think he gets a huge amount wrong. I mean, there there is, there's something to be said about the is movement, generally of white men. Although it's getting better, you know, we're seeing more more diversity in it. The pushback that I've gotten, or the critiques that I've heard, have tended to be around most of the people, especially in, in this global health and development space and current generation focus, don't have much field experience, and don't have any real context for what they recommend. So they're like, you know, academics, straight out of university, who can sort of run cost effectiveness analyses and, and, you know, do have sort of statistics, you know, at their disposal, and, and do regression analyses and, and, and do all this sort of academic stuff, but don't really understand what it's like on the ground running an organization. And as a result, we'll never get it right, until they do some legibility problems. Yeah.

I've heard that a lot. And I think, you know, there's some truth in it.

There really is and until you run an organism And it's really hard to understand the complexity of running an organization. And, and sort of the unexpected. The unexpectedness, the sort of the, what am I trying to say? And how things happen that are just so outside the realm of what you expect, that you have to deal with. And this is just sort of part and parcel of every organization, even the really well run ones. I think I think maybe EA would do well, to have some more operational experience in its core.

William Jarvis 45:41

Got it. That makes sense.

Will Jarvis 45:42

That makes sense. I think it's a good, that's a really good critique. David, I got another question here. You know, you've got a background in real estate, finance, in housing, you know, housing affordability, it's a big problem lately. I'm a big GA. So I'm on a grant from Scott Alexander back in January with my friend to help implement, you know, land value tax. I'm also interested in the EMP movement, you know, how do you think about fixing the housing crisis? And what are interventions? Are you particularly interested in and have you guys looked much at housing as a space?

David Goldberg 46:13

We have, I am not super well versed on our housing affordability report. At the moment, unfortunately, though, so we have written housing affordability report, it is on our website. And I've just pulled up the summary now. And focus on it's a focus on England. And, yeah, and it's from 2020. So I, you know, I'm, I'm not really well, virtually well versed enough to speak about it. But we have suggested, as one of our recommended funding opportunities, London NIMBY, which is trying to improve housing policy in England. And it's using a seemingly novel approach that focuses on overcoming political economy challenges.

Will Jarvis 47:04

Yeah, that's awesome. Well, David, are you round for down for a round of overrated and underrated?

David Goldberg 47:11

Sure. Let's do it.

Will Jarvis 47:12

So I'll throw out a term you'll just tell me whether it's overrated or underrated. Okay. So the first one I think you already answered this, but I'll throw it out there anyway. Ai x rest? Is it overrated or underrated? Let's say by the general public, underrated, underrated, what's good?

David Goldberg 47:26

And why underrated?

Will Jarvis 47:27

Why do you think it is just not exposure? Can't quite grok what's going on?

David Goldberg 47:31

People when they hear about AI risk think Terminator. And, and don't really and then write it off as science fiction. Gotcha. And, and also, and just don't understand, I think the speed and speed of development and just like, what the rest really entails,

Unknown Speaker 47:53

do you plan it, you're

David Goldberg 47:54

in it, and it feels really far off. It has lots of people,

Will Jarvis 47:57

it still feels quite far off to me. But the metal cat always mispronounce that the prediction market less meticulous. And they they have it very, it just you know, moved up a lot with Dolly. And it's what is it? 15 years away? I believe right now. It's really close.

David Goldberg 48:15

It might even be less than that. But

Will Jarvis 48:16

might be less than that. Do you think that that's you think that's all the money? You think that's aggressive? Do you think that's

David Goldberg 48:23

I don't take motor? Literally I literally don't know. I'm not an expert in this. Most of the people who I talked to or experts think that it's probably pretty close to right. Gotcha. I was at a talk the other day. I can't attribute who said it, but an organization is working on. Yeah, is working on a sub 10 year timeline for general AI and it's one of the big ones file and and the guy talking about it very casually, just guy or girl. very casually mentioned that. We expect in less than 10 years. We'll have a week general AI. Well, well, that is that's and I was like oh that's pretty horrifying. I cried in the corner and drink.

Will Jarvis 49:14

That's so good. Investing to give overrated or underrated.

David Goldberg 49:21

Underrated? Andre? Yeah, we, I mean, we just published a report and set up a new fund the patient philanthropy fund that is investing to give on a on a couple of 100 year timeline there brilliant shear, who I never pronounce his last name, right? You makers who's just he's just left founders pledge to join, giving what we can as their head of research, spearheaded this wonderful initiative to get people to invest, invest to give over the long term focusing on X risks. So we launched that at the end of last year, I believe If memory serves me, it brought in nearly $2 million for it so far and have a great, great momentum as we look to raise more. But it's certainly underrated.

Will Jarvis 50:12

Is that just because you can get access, you know, get these returns that compile over time. And there's just such a large with a long

David Goldberg 50:18

enough time horizon like markets point in one direction. And if you have the capacity to dry down capital rapidly as in when you have sort of very pingy moments, yeah. It's hard to see why you wouldn't invest to give it with at least some of your philanthropy. Got it? Got it. You've just Personal Capital.

Will Jarvis 50:39

Right. Do you think there are challenges with like maintaining, you know, large pools of capital, like over time, and have them be directed to the the purpose they were intended to? I'm sure, because it's an important report, but

David Goldberg 50:51

it is in the report, we've looked into it pretty extensively. This tends not to be a problem with some with large pots of money because of how they were set up. And the sort of founding constitutional documents or trusts and foundations that are hundreds and hundreds of years old, that really, you know, are still focused on the very specific thing, in some cases, to their detriment, because that specific no longer exists as an issue. And they have so much money that they can't actually do anything with because of how the organization was set up. But I think we've drafted our founding documents for the patient philanthropy Fund, which is an independent, independent entity, licensed by the UK Charity Commission to be more flexible. Very cool.

Will Jarvis 51:38

Very cool. One last one, direct cash transfers, overrated or underrated.

David Goldberg 51:45

I think it's rated appropriately. I'm going to I'm going to create a third category. I don't think it's either. I mean, if you can't do better than direct cash transfers, do direct cash transfers. Still too many people intermediate with organizations that are unnecessary. Right. But But again, lots of lots of development. agencies focus on direct cash cancel direct cash transfers already. So yeah, I wouldn't call it either. I mean, I'd rather people give to give directly than Oxfam, for example.

Will Jarvis 52:23

That's good. That's good. Well, David, thank you so much for coming on the show. I really enjoyed talking to you today. My pleasure. Where can people find you? Where can people find founders pledge? Where should we send them?

David Goldberg 52:34

Our website, founders pledge.com. All of our research is public. All of our giving recommendations on our websites. If you're based in the US, and you want to give to any of our top charities, you can do so with every.org. To search for founders pledge, we have a profile there and a bunch of different pooled funds. And if you're in the UK, you can go to AAA funds, and we have our Climate Fund there, as well as a couple of others. In our in our websites. If you have questions. If you're an entrepreneur, please do feel free to send us an email that's gonna reach out via our web form. Awesome. Thanks, David. My pleasure. Thanks

William Jarvis 53:11

well. Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismark free at brief dot biz market analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

This episode was co-hosted by Lars Doucet.

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars du se joins us as a co host. Well, Noah, how are you doing this afternoon? Hey, John. All right. Thank you so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Noah Smith 0:50

brief bio. So I grew up in Texas, very close to where Lars lives, then went to Stanford and majored in physics decided not to continue with that. Move to Japan, where I lived for about three years there. And then just, you know, chilling, decided I wanted to become a famous econ blogger. And so I went, of course, I did, you know, grad school, because you have to sort of do that. So I went and got a PhD at University of Michigan, worked as a professor for a couple years at SUNY Stony Brook, then sort of just quit because I didn't really like academia at all. And and just did the blogging thing. And now I blog at substack. My substack is called no opinion and Oh, h p i n IO n. And that's all I'm pretty much doing right now.

Lars Doucet 1:45

Yeah, is that was that was that tongue in cheek when you said you wanted to be a famous econ blogger? Was that the plan all along it, it just kind of happen? It

Noah Smith 1:51

wasn't tongue in cheek. So that actually was why I went to grad school. Oh, really? That's all I wanted to be like Brad DeLong. You know, I wanted to do that. And yeah, like, I never really wanted to be a professor. I just I tried it out, because sort of my advisors all insisted. So I think if they place professors, they look better. But then, um, but they insisted, oh, just give it a try. Give it a try. So I did, you know, some things were fun. Mostly, it wasn't for me. And so then I, I just left. And so now, here I am out in San Francisco.

Lars Doucet 2:24

Now, I want to follow up on that because you said you wanted to be a famous econ blogger. And that wasn't just like an accident that happened to you. That was what you're actually trying to do. But when you first set off on that, what being a famous econ blogger on the internet looked like, it's probably a lot different than how it looks now. And I was wondering if you had any thoughts on,

Noah Smith 2:42

I didn't expect to do it as a job, I expected to do it just as a hobby, I never expected to get paid money for it. I want my my dream was to just do whatever job, you know, I don't know, consulting, or, you know, whatever. And then, and then have blog on the side, because I thought the Econ blog would allow me to affect the national conversation, sort of inject good ideas into the mix, give good advice to people, I thought bloggers are going to be the most have the most outside influence, you know, over the next couple of decades, in terms of policy and ideas. That's the thing to be. And so even just as a hobby, I felt like I could make some sort of an impact.

Lars Doucet 3:21

Yeah, well, that's that's kind of interesting to me, because I remember I remember reading that sci fi book Ender's Game. And the most far fetched part of the whole thing was not the 3d battle room was not the space aliens was not even what I now recognize to be the kind of deep dream style fantasy AI driven game. But the two teenagers taking over the world through posting was the like, least, like most far fetched aspect of that book to me. And it seems like I'm eating a little bit of crow on that, in terms of kind of the influence that will actually let's talk about that is the tension between being terminally online and therefore completely out of touch with reality. And then online personalities like having a lot more influence and ability to change the world than anyone expected.

Noah Smith 4:15

Right. So the thing about Ender's Game is, you've got to be a really good blogger. You know, like, it's like, all fantasies are just about people doing things unusually well. Well, a lot of anyway, I've tried to get my sister to make the lock in Demosthenes blog to ask any blog with me, but she won't do it. She's a human rights lawyer. And so, you know, she can't really blog for her job she, she works to the Equal Opportunity Employment Commission. It would be great to have locked into moss and his blog with

Lars Doucet 4:51

her so you're telling her that she's Valentine, the soft hearted Compassionate One, and you're the evil Machiavellian Peter?

Noah Smith 4:57

I'm the evil Machiavellian brother. Yeah. No, no like that, that sort of also makes me feel bad because I don't think I was that bad of a brother. You know,

Lars Doucet 5:06

I think you're probably a little less to district than Peter wasn't Ender's Game a little less in any case to get a little like bunnies a little bit on script. You know, you recently tweeted, you know that there's four things we need an abundance right now. And he said housing, energy, healthcare and dignity. And I think that's a good kind of overview start for this conversation. Can you talk a little bit about those things?

Noah Smith 5:29

Tech? Yeah. So, um, oh, that's a Texan ism. By the way. I definitely say Heck, yeah.

Unknown Speaker 5:35

Oh, yeah. That's definitely it's, it's,

Noah Smith 5:37

it's a more, it's more emphatic than hell. It's sorry, it's six in there. Yes. Um, so a number of people most prominently as recline and Derek Thompson have been, but you know, a bunch of people have been focusing on this idea of abundance, this idea that, you know, we focus so much on on Well, I don't even want to talk about that. The point is that we've neglected the, the, the need to get people stuff to get people a bunch of stuff. And we just sort of assumed that America was this land of abundance, and it was all about dividing up the pie. But in fact, it's, it's not to a large degree. We've hit sort of the limits of cheap free housing by sprawl. And we hit those limits in 2006.

Lars Doucet 6:26

How do we know specifically in 2006, that we hit those limits? homebuilding. Okay, can you can you

Noah Smith 6:33

just look at the homebuilding statistics, oh, they That was why so 2007 with the limits of prices in six, we hit the limits of like, building out basically, in seven, we hit the and I can, you know, get you some numbers on that. But in in seven, we hit the limits of prices, and then an eighth the financial system crash. Interesting. So essentially, what happened was that we built out so far, that people couldn't handle the commute.

Lars Doucet 6:55

And is this what they traditionally call like? The the margin of productivity with like, David Ricardo, and all that.

Noah Smith 7:02

Exactly, exactly. And of course, he, I mean, he was thinking of farms, but it really does a similar kind of thing. There's very similar sort of inverse square laws to all of this. There's classic economics models with inverse square laws, basically monocentric city model, you can get the all of these models will spit out the idea that land value taxes is awesome, and should pay for everything. Even enjoy, definitely playing. Yes. So you should check out those models. But they also basically say that you get to this periphery. And so we built too far out. Now if we get self driving, you know, electric cars, or very fast transportation into the city, that's gonna change and remote work might change that. So there if you have fully remote workers, they can go live in Bozeman, and, you know, work for a company in Boston. Right, right. And so like, so really remote work and improve transportation technology might change the equation, but in the short term, we built out to our limits. And then, you know, we started and at the same time, knowledge, economies, this so called clustering economy, started taking over our economy, we, in in the 20th century, we turn from an agricultural nation into the workshop of the world, a factory based industrial base nation. Now in your factory, it's not that expensive to ship stuff, especially if you don't care about burning a ton of coal. And you have really good freight rail lines, which are both true of us. And so in other words, you could put a factory out in bumfuck. Nowhere Can I swear on this podcast?

Lars Doucet 8:43

I don't know if we have a policy, but we'll beat it if we deserve. All right. I have Tourette Syndrome. So it's just an ever like, danger at all times. So we're prepared for it. Oh, really? Do you have the kind of dreads that makes you swear I have all the kinds of Tourette's Syndrome, unfortunately, including the one that makes you punch your best friend in the nuts every once in a while. That one's called common practice. Okay, what happens? Let's

Noah Smith 9:01

just do that. So it's fine. Maybe don't go hang up.

Lars Doucet 9:05

Yeah, I have like a bubble. I keep around my friends for this reason. It's also why I worked from home for 10 years.

Noah Smith 9:12

Wow. Yeah, no, all the people I've met with Tourette's just you know, had occasional like a long stammer.

Lars Doucet 9:18

Yeah, the more we talked about it, the more it will happen. So Oh, wow. Okay, so no, no, no, no.

Noah Smith 9:24

The point is that that with factories, we had this economy based on factories, and then we could put the factories anywhere and we have these small towns later, we connected them with the Interstate at first was just railroads and then and then they could ship stuff anywhere around the country and then on ships to the world. And so that meant that we had this very even pattern of economic distribution around the country. Now, macro agglomeration effects and technology and all these things we could talk about have changed the game so that China is now the workshop of the world and to a lesser extent, other dense, densely populated places. close to the Eurasian population center. And thus, you've seen that circle which just circles China Indian is like more people live inside the circle than outside, well, that's where the stuff is going to be made. And so we've been making less and less stuff as a proportion of our economy, not D industrializing an absolute sense a little little bit of that, but then D industrializing in a relative sense, with less less and less important our economy, what became important, we stopped being the world's workshop, and we started being the world's Research Park. Interesting. And so, knowledge industries, which are software, high value added manufacturing, biotech, finance, and those are the basic four, those knowledge industries became entertainment, there's some other things, those those knowledge industries became the core of our economy.

Lars Doucet 10:50

Now, I want to and I want to, I want to probe on something here. So you said agglomeration effect before and so for the sake of our audience, that is something where when you have a lot of productive activity in one place, that makes everybody more productive, right? You know, that's why people go to cities in the first place. And that's right.

Noah Smith 11:08

But there's two kinds of effects here called agglomeration and clustering. And let me explain those. agglomeration is about a whole bunch of different industries want to locate near each other, okay? Because, first of all, they supply each other. But also because a whole bunch, the consumers are also workers. So the workers want to live where the jobs are, and the companies want to go where the consumers are. And so you get this massive agglomeration. New York is the most famous example, this New York, it has everything, there's manufacturing in New York City, right? Everything is near to everything in New York,

Lars Doucet 11:44

like to have a garment district in the garment district, a diamond district or this district in that district.

Noah Smith 11:49

Exactly. You can get everything you need, right there. And so that's sort of the original force of agglomeration. And that's what Paul Krugman is theories are about. And so, so this comes right from Krugman. And so, so that's important. But then the second thing is clustering, which is within a single industry. So you have software, right? So with software, all the software companies want to locate next to the other software companies. Reason being, that number one, they can share employees and ideas. So employees will flow back and forth between the companies. Number two, capital is there. So like venture capital within a certain industry, you have all the VC firms right there in the Bay Area, you have and then so you have the tacit knowledge spillovers, you have the concentration of capital, and you have thick markets within a specific domain. So you have when you have very highly specialized workers, software engineers, right? Who would be it would be very hard to retrain those people to go work in finance or bio not that hard, okay, but not super easy either. It would take them years to get used to the new industry. And so basically, you have these super specialized workers, everyone, every software company wants to be in SF, because that's where the best engineers are. Because that's where the ideas are. And because that's what the venture capitalists, that is called a clustering effect, it's within a single industry. So we're moving away from the model of everything gets done locally, to you know, because everything's manufacturing based to this, everything, you know, the most important economic activities and knowledge based, and they clustered together in the cities with a huge number of educated people. Right, so you can name you can count on like a couple of hands, the cities that have been the winners, the big winners of this, San Francisco, New York, LA Seattle, you know, Austin, and you know, a few others, and then the college towns, right, you got like an arbor college stations getting their route. And then, you know, other places like that Madison, Wisconsin, and so then that's been the driver of a lot of this housing unaffordability in the big cities. If you look at housing prices overall, in America, they haven't gone up that much, they've actually gone up about the same rate as incomes. So you paying about the same percent of your income if you're just a median schlub, you're paying the same percent of your income for your housing, whether you're buying or renting now as you were in 1980, right, but but that there's huge geographic variation, because, you know, if you're out in wherever, like, you know, some decaying factory town in Indiana, it sucks to be there. And yeah, the house is cheap, but it sucks to live there. And half the people leave, and the rent, the other half can't pay for the upkeep of the roads and the public goods, and everything starts to crumble, and then everybody does a bunch of meth. And then everything's filled methods and the methods start hanging out in the shuttered stores and pretty much your meth town and then you suck and then you vote for Trump or something. And so then, that sucks, and meanwhile, everyone's piling into the cities, but The the landlords have taken all the value from that the companies and the workers are creating the value, you know, and the landlords are just taking it. This idea that companies are appropriating all the value from the workers in this Marxist blah, blah, blah. That was in an era of cheap land that Marx thought of that Marx, like Henry George was out there in a, you know, in a place where there was expensive land, and he was saying, No, it's the landlord's take it all guys. Like that seemed an antiquated notion to Marx. Because everyone is building up these factory towns, George happened to live in a place where land was really scarce. At that time, land is scarce everywhere now. And clustering makes it more scarce. Because every single software engineers piling into Silicon Valley, okay, so every single finance person is piling into New York, or at least was

Lars Doucet 15:45

and so when you're saying clustering, you mean like within a specific industry, you're saying like the effect of clustering, specific to knowledge industries, is stronger than it was for old school agglomeration?

Noah Smith 15:56

That's right, because old school agglomeration was was limited by the fact that you could ship stuff from from cheaper places out of town. Gotcha. You know, you had a lot of manufacturing in New York City, we got a lot of manufacturing in upstate New York, right? They would ship stuff to New York City, or even in Germany, that would ship stuff to New York across the sea. So like, because ocean transports always cheaper than land.

Lars Doucet 16:19

Okay, so let's physics, let's probe here on the whole work from home angle, right? Because if we go to work for Home, we've kind of invented like crappy teleportation, right, I can send my face and my words somewhere, even if I can't physically be there. And it's not as good as being there in person for certain things. But like, I can have a meeting and I can talk to a person and I can talk to Noah Smith and William Jarvis, even though I have no idea where the two of you are right now, you know, and we can do this. And we can do lots of other things, too. But even so, it's not quite the same as me being able to teleport from Pluto, because there needs to be good internet, like freaking here physically. And there also needs to be like, food in my refrigerator somehow and other services and local industry to like, keep me alive and happy and entertained or whatever else I want. Right. So what effect does work from home, in your opinion, have on the clustering effect? And on just the margin of production? In general? You know,

Noah Smith 17:20

we do not know yet. Okay, that is a giant question. It is, everyone's been talking about the death of distance, right? If we have teleportation, we can live anywhere. If you've read the Hyperion books, everyone just has these teleporters. And they just live out on some like, lonely, abandoned planet out there in the universe, and then just like step into the bathroom on a different planet. And so that is the true Death of Distance. Spoiler that doesn't work out. But anyway, so read read I period. Um, but in real life, we don't know how well it's gonna work. Because at the office, you have serendipitous interactions that build relationships allow and build your human networks allow exchange of tacit ideas, and allow for a sort of, you know, I guess, competitive organization, ladder climbing and stuff like that. You have that you have interviewing, it's very hard to interview remotely. Even if hanging out in person is just 25% Better, whatever, then online, that will add up across a huge number of people and clustering will still be very robust. So my guess is that there's going to be a bifurcation we're going to have, we're going to have 85 90% of people work in the office three days a week or whatever, and then work flexibly work from home etc. And so there's going to be a reallocation of working within the city, but everyone's still going to live in the city. And then 10 to 15%, I think are going to go for remote and they're going to live in Bozeman, Bangladesh. I mean, you can't go too far to the timezone it becomes harder. But um, there those people are going to go live in in you know, Vietnam, or somewhere or or just, you know, Bozeman, Montana, I think, hot new town.

Lars Doucet 19:08

I think there's also like two interesting angles explore with that I'm, I've learned not to do double barreled questions. Last one. But I'll just make a mental note about the second one. One is that, but what about the effect of making basically giant virtual bedroom communities? Like where are we already seeing effects of like housing being bid up in places where it's cheap to live in? They have good internet and you can telecommute into Austin or whatever. Are we not saying that?

Noah Smith 19:32

Absolutely, absolutely. And so that's, that's, um, when I said, Bozeman, I really just mean I'm using that as a stand in for like, any place any, any pop up bedroom community. And I guess my point is that this, my prediction is this will take the edge off clustering effects by 10 to 15%. Okay, if that's not going to be significant enough for this problem goes away. I see. No, I think we're seeing distortions in the numbers. I think we're seeing a giant price spike in these cities. That's not going to last that's just the inflation generi excess pandemic demand era that's gonna subside pretty soon. We're also seeing a reallocation between commercial real estate and, and residential real estate because of the flex time work thing within cities, that's gonna be important, but I think that the full work from home, you know, teleportation kind of idea that is going to be marginal. And so we're still gonna have this problem of clustering, we're still gonna have this problem where we can't get enough, get enough housing unless we build it near the big cities near the near the fancy towns, big cities and college towns, knowledge hubs and college towns. Those are the places the the Bay Area's. And the Ann Arbor is of the world of the places we need to build a housing. And that doesn't mean we need to build it right in the middle of San Francisco. Although that would be nice, Dean Preston should allow a lot of housing in his district in San Francisco. But that's not going to really solve the problem completely. It'll take the edge off. But what will really solve the problem is if every city in the Bay Area has some sort of incentive to build housing, if Daly City has incentive to build housing of South San Francisco and Burlingame and San Mateo, and Oakland, and Fremont, and Berkeley, and Marin, and all these places, just build a lot of housing, and then people can commute into the city like they do in New York, or like they do in Tokyo.

Lars Doucet 21:15

So on that note, go ahead. Well,

William Jarvis 21:18

yeah, I'm probably gonna ask the same question largest is going to ask here, but correct me if I'm wrong here, Lars. how possible is it for us to push through zoning reform in the West giving? You know, housing is kind of a backbone of welfare kind of this middle class, upper middle class that has kind of emerged in the United States?

Noah Smith 21:36

Well, it's that's a problem. But it's not as much of a problem as you think. So the I have to say that the idea that nimbyism is around preserving property values. Yeah, is wrong. Oh, really? That's wrong. Interesting. Why

Lars Doucet 21:50

is it wrong?

Noah Smith 21:51

It's really because NIMBY, because, because when you build new housing, it doesn't lower property values. Interesting, it raises

Lars Doucet 21:59

so So are they wrong in that they believe, erroneously, that it will reduce their property values, or they don't believe it will reduce their property values. And that's not why they're doing it. But we believe we believe erroneously, that that's why they're doing it, it is

Noah Smith 22:13

a euphemism, okay, some people's property values will go down, some will go up, more will go up, then will go down, some people's property values really will go down. And that, you know, lower my property values has been a euphemism since the age of white flight. And it is very clear exactly what it is a euphemism for it is for poor people, especially poor black people, but not just poor black people moving in near you this idea that if the if you have apartment complex with poor people living nearby, then the wrong sort of people will move in there and then the neighborhood will go to hell. That is, or if or if you put in a train stop, then the wrong sort of people will ride the train to your stop, get off and start walking around in front of your house where your little children are playing bla bla bla, that has been the fear of white flight type of people for a long time. And it is not we call it white flight because it came from an era where America was primarily white and black people and black people were much poorer black people were still poor. But now you know, we have a much more multiracial nation. And, but but the the basic pattern remains.

Lars Doucet 23:22

So it's more about preserving neighborhood character, which is something that's preserving

Noah Smith 23:26

every character. Right. And that is not a euphemism, though. It's a euphemism, but it's true. It's like, yes, a dense neighborhood will have a different character than your sleepy little suburb where only rich people live. That's the point. Right? Like, we don't want to preserve your neighborhood character. So that's why people are NIMBYs. And there's a lot of strategies we can do to sort of mitigate that nimbyism, but we're not going to actually destroy the model, the housing based wealth model in the United States, we are not going to destroy that by building dense housing, that that model is alive and well in New York City, the densest city in the country. I promise you New Yorkers, property values are doing great. I promise that building housing in Manhattan does not lower those people's property values. And so the homeowner class is going to do fine. You know, it's it's property tax that threatens the homeowner class. That's where the property tax, including land value tax, that is where the real fight is over housing wealth, and these people like, Oh, my house is all I have for retirement. And then you have all that stuff. And that is where that fight is. But in terms of zoning, liberalization, it's all just about keeping the poor people out of your neighborhood.

Lars Doucet 24:36

So I mean, do you think that means zoning reform will be easy, so to speak, if we if we start pushing Oh,

Noah Smith 24:40

it won't be easy, because, you know, sort of this staying away from people you don't want to live next to sort of the American national pastime, right? Anyone who tells you it's baseball or sex is wrong, right? That it's exclusionary zoning. That's the American national pastime. And so then we so that The answer has to do at the state level. Okay? Everyone knows housing needs to be increased, no one wants it in their backyard. Instead, they'll kick it up to the state level. And the state will simply order municipalities to build more housing. And they're doing that right now you can see this with housing elements. So you guys know about housing elements.

Lars Doucet 25:15

Tell me about housing elements. Okay, basically, the

Noah Smith 25:17

state says you have to you have to have a plan to build this much housing, what's your plan? And then people are like, Okay, here's my plan, it's complete b******t. And it will actually build only about 1/10 of the housing that we claim in this report. And the state's like, No. And if the state says no, then you have a period of time where anyone is allowed to build anything. It's like, oh, chaos. So then, California,

Lars Doucet 25:40

so so so. So that's the stick is it's like, it's like, I'll allow you to have your plan. But if I don't like it, then all the cowboys can build whatever the f they want.

Noah Smith 25:49

Yes. And that's the idea. And that is the really the tool.

Lars Doucet 25:53

And we have we seen success with this? Are these zoning reform movements succeeding in places?

Noah Smith 25:57

Well, LA's housing element got rejected, I believe, um, let me just make sure that that actually happened. They were just threatening to.

State reject la housing plan update that from February, state housing regulators rejected Los Angeles a blueprint for increased development over the next eight years telling the city it must rezone by mid October to accommodate 255,000 new homes instead of over the next three years, or risk losing hap risk losing access to affordable housing grants. Okay. So then.

Lars Doucet 26:29

So is this kind of like housing that the the federal government uses highway funding to like push people on like, the drinking age laws and stuff?

Noah Smith 26:40

Right. So, um, but there is, I believe there's another stick where they have like, you have like massive up zoning if the if the housing element doesn't work. So basically, if you want to be NIMBY, you've got to come up with a plan to not be too NIMBY. Gotcha. But I have to look more into the legal particulars of what the stick is on that. But anyway, so then this is really what you do. And of course, there's other things you can do, like, automatically allowing by right, by, you know, as of right construction in various locations like Scott wieners. Bill,

Lars Doucet 27:13

and what is my public housing, what is what is my right construction? As of

Noah Smith 27:17

right construction, and sorry, buyer at the grocery store. Um, as of right construction is basically like, if you've got all the permits, and you meet all the qualifications, you can just start building and no one can hold you up.

Lars Doucet 27:29

Okay, so it means you don't have to like ask for a zoning variance or whatever like it. Right. Right. Right. So that's the lowest burden of paperwork to just go build.

Noah Smith 27:39

Correct. Gotcha. And so then, so that is very effective. Yes, and you can do things like eliminating parking minimums, and eliminating setback requirements, and bla bla, bla, bla, bla, and the mandatory allowance of like, duplex and multiplex conversions, which is very attractive for homeowners looking to get extra income, which is why it's cool

Lars Doucet 28:02

is that when you take an existing house and split it into two dwellings, or whatever,

Noah Smith 28:06

exactly, right, exactly right. And it's like, well, you know, or you can add an adu, you can add one of these little like, inlaw units in the back.

Lars Doucet 28:14

And then that's an accessory dwelling unit, right?

Noah Smith 28:17

accessory dwelling units and in law, as they're called. And that's you get an extra person there. It's like you get a tenant, suddenly, you're living in the same house. But now you're a landlord, right? Now you get money, you get cash, and you can monetize your house. And you know, and still and yet still live in it. And so that's pretty cool. Duplex and like triplex conversions, or whatever. That can often make a homeowner more money, or landlord more money. If you have like a second home, you want to do that and rent it out, blah, blah, blah.

Lars Doucet 28:48

And is this what we call missing middle housing, where it's like, it's like a lot of people when they hear density, they think I'm gonna come in and plunk a tower right in the middle of your single family neighborhood. That's right.

Noah Smith 28:59

This is this is missing middle housing. And so that's like, you already know every single answer to this. And you are explaining these to the podcast listeners. Yeah, that's that's the stick. What is happening right now. Exactly. So. So thank you for translating.

Lars Doucet 29:11

Yeah, we got we got to do it on some of these more like econ heavy jargony podcasts. Just absolutely. Please do.

Noah Smith 29:17

Thank you. All right. So um, yeah, so basically, these are the this is what's going on with housing abundance. But we're moving. You know, I just wrote a blog post about that the other day about how we're sort of moving from this era where everybody fought over the methods by which things would get done. Do we want the government doing this? Or do we want the private sector doing this? Oh, yeah. Do we want developers making profits? Do we really want to raise taxes, shut up, just build more housing. So the point is that the houses exist, and then how you get there is of secondary importance. So I think that in crunch time, you throw out the squabbling over methods and go instead for just focus on goals and I think that's that's happening. Ending successfully in housing. It has not yet happened successfully in healthcare or energy.

Lars Doucet 30:05

Okay, so So can you clarify a little bit like so. So you're saying, goals, not methods and your example, I'm gonna repeat back what you said, just make sure I understand it is that this isn't just for the audience, I'm actually making sure is that so like methods focused is like, okay, so if I'm on the left, I'm like, well, housing would be good, but it has to happen according to Nice, good little Marxist principles, and nobody can earn any money. And if I'm on the right, I'm like, well, housing can happen. But the government can't be involved in any way. Because that's, that's, that's tyranny and theft, or whatever, is that kind of what you're getting at. And you're like, the point is, you get housing to happen, and I don't care how.

Noah Smith 30:45

Right? So in, you know, you've had in housing stuff, you know, I, in fact, I'm, I'm having some success converting people to this idea. I just talked to a libertarian guy in San Francisco, who says, oh, we can't do public housing, because the state has low capacity and can't do it and blah, blah, blah, I'm like, No, build the housing. If it doesn't get built, because the state has low capacity than fine, they've got to learn somehow, you know, but just but just do the thing. And so then I'm, you know, I, I think that that argument is finding resonance on the on the left side of things, I think I'm having, we are having success, convincing people that actually allowing private development is not the end of the world. And it actually helps middle class and poor people. And I think it's been slow going, because a lot of the people who want to keep their neighborhoods exactly the same, ie not let the poor people in, they fight very, very hard to claim that allowing any new construction is jet will cause gentrification, rising rents, displacement, destruction, blah, blah, blah. That's wrong. We just, there's just no evidence for that, even in the short term. Yeah. Yep. Nothing. Like we've looked for evidence for it. It's just not there. It's like, no, if you build more rents go down. It's like, very, that's not true for everything. You know, if you build more highway extensions, often you'll have an increase in traffic. Not always. But you can. But it turns out with housing, it's pretty it's it's pretty simple. Interesting. Now, you were sort of myth that if you build this big building for yuppies, then all the other yuppies will be like, well, that's a cool new neighborhood. I want to go there. And then you'll just draw in yuppies, from far and wide. It turns out, that doesn't really happen. What happens instead? Instead, the yuppies were already moving there, because what they really move for is their jobs. What yuppies are really moving to San Francisco for is their jobs, right? That's where their company is. That's where their job is. They move to San Francisco for the job. And then they look for a place to live. And what's happening is that they're going around, essentially bidding up and turfing out the middle class families and the small apartment buildings that are bound in San Francisco. So that when you build them a giant fish tank, on a spot that used to be a parking lot or something, you build them a giant fish tank right to hold the yuppies and the yuppies are like well, I could, you know live in this aging Victorian with no climate control and no insulation, and blah, blah, blah and spend all this money remodeling. Or I could just go live in this place with this pool and this common area with other yuppies? What am I going to gate security and whatever. What am I going to do? I'm going to live in the yuppie fish tank like nine out of 10 will choose that we've sort of left the era where yuppies wanted to pretend that they were Bohemians by going in just like living in you know, like college dorms forever. I think that that that was the 2000s really the Jack Dorsey era. But we've sort of left that. And now yuppies are willing to be yuppies, and then, you know, we build these fish tanks. And then they just they go there. And then you know, it's like we're saving your neighborhood from a yuppie by by by sticking them in these yuppie pens called, you know, market rate housing development.

Lars Doucet 33:57

I just realized that. Yes, it rhymes with Guppy. And so that's, that's good. That's good.

Noah Smith 34:02

It really does. Well, that is that is where that comes from. So

William Jarvis 34:07

what will know why why have we gotten to pragmatism in housing and not healthcare and energy? It seems like there's clear paths forward for energy, right? Nuclear power, all kinds of different stuff. You know, health care, maybe less clear, but But why have those two been so resistant?

Lars Doucet 34:23

Yeah, hit us with goals and methods for health care and energy.

Noah Smith 34:25

So all right, so let's talk about energy first, because energy there is there is lots of room for very rapid and immediate progress on this idea. The fact is, a lot of people's jobs depend on oil and gas. And those those regions where those places provide employment such as Texas have fought very hard or a lot of people, at least the Republicans in those areas, and sometimes occasionally Democrats like mansion have fought very, very hard to keep fossil fuel industries alive so that people will be able to keep doing the same jobs they did. We hear about coal miners, but that's only a small part of it mostly work. Talking about people who work in the oil and gas industry, shale. And these are blue collar jobs, too. You know, these are, these are the kinds of things like good manufacturing jobs disappeared. But then you can still as a blue collar person with just a high school degree, you can get a very good salary working on like an offshore oil platform, or something like that working in a shale drilling place like that's where blue collar people can still make a good living. And now we want to get rid of that. And you know, sure, you'll be able to get a job installing solar panels, but it might not pay as much. And so. So that's, that's a problem. That's difficulty. There's also there's there's nimbyism in terms of energy as well, because a lot of these sort of legacy environmental groups value open space. They're like, we like

Unknown Speaker 35:45

having a nice view of the mesa. So we don't want you to build solar there because it looks unsightly.

Noah Smith 35:51

And that's these NIMBY, that's the NIMBY voice by the way. And so

Lars Doucet 35:54

that's like, you can't i can't build this wind farm, because it might kill a bird. And that means we keep the coal plant open, which kills 100 times as many. Right?

Noah Smith 36:03

And then it's not even killing the bird. I mean, like for some like Audubon Society, maybe cares about killing birds. But then the No, it's a views. It's people's views. Interesting. It's people people want to have their nice views of hills without wind farms. Apparently the hills with wind farms look worse to them. Now, I think the hills with the wind farms look better. I actually do think solar plants look bad personally. But I think the wind farms are great. Like I love the force of windmills. They're just majestic and great. People have different opinions and Americans have terrible taste in like,

Lars Doucet 36:35

everything you're just making today. No. Yeah,

Noah Smith 36:39

Americans have terrible aesthetic tastes. We just wear t shirt and jeans. That's all we wear is T shirt and jeans. The only kind of architecture we know that we like or Brooklyn brownstones. That's the only kind of building that anyone knows that they like. I like Brooklyn brownstone. That's like, urbanists are just like, just now learning to appreciate a diversity of architectural styles. Like after years of just thinking brownstone was the only good one that was possible. Americans are rubes were Hicks. We're a nation of hicks. And that's fine. You know, we're a nation of hicks that's having to become a nation of cities. It's peasants into Frenchmen here, which is a great book, by the way. But we're, you know, we're experiencing the infill of a country that was once defined by extensive frontiers. We spread out and out in the wagons, you know, slaughtering Native Americans. I'm sorry about that. dispossessing people, but we were this country of frontiers, we spread out. And later, we spread out into the suburbs, we built out into the excerpts, we built these giant McMansions that we're two hours away from a city. And, you know, we sprawl that way. So we had all these frontiers of land, and we're done with that, at least until remote work gets much better, and gets to be real teleportation. And at least until that, or you know, maybe self driving electric cars, personal air transport, I don't know. Until then we're out of land frontiers, we've got to infill we've got to go in back and fill in the spaces that we sprawled into before. And this is really what that's our, that's our quest now. And you can see this with socially as well. And that's what the redistribution of the production of increased dignity is that our society was a society where since everyone could really spread out, we could all be a******s to each other all the time. Because good fences make good neighbors, and we could be a******s. As long as we didn't have to see each other that much, because he could put up a fence. Right? And now if we're having to fill in this whole thing, we're gonna have to, we're gonna need to make room for people. And this is true at the social level as well. A lot of people that we didn't give dignity to we're gonna have to give dignity to and so I think you see with young people, the body positivity movement, it's like, can we please stop making fun of fat people because that's shitty. And like, that's, there's no reason you that we have to make fun of fat people. There's no reason that we have to tell fat people, they look bad. Like, that's mean, that's bad. And so so we don't have to redistribute dignity. It's not thin people are not going to be hurt if we stop insulting fat people. Right? It's just now now we accept a greater number of people so you can produce this abundance of dignity. And I think that the internet has brought us closer together. Even more than dense neighborhoods, I think the internet is bringing us closer together. And we're having to infill our culture in ways because we can't just say all those other people suck and I'm just gonna walk away from them anymore because everybody's sort of in the same room with everybody else on Facebook, on Twitter and Instagram. Tik Tok, and then because of that, we are having to we're confronting the fact that our society denied dignity to a lot of people. And I think ultimately, the social movement that people call wokeness is largely about that. It's about you know, like, we can't you know, we can't have like, a bunch of all our like movies and TV shows have like zero agnp balling them anymore. It's just not. That's not cool. That's like denying people dignity that they deserve. Right we yeah, we can't have like, there's anyway, all that stuff. That doesn't mean I'm on board with everything woke, right? It doesn't mean I'm like woke people are right about everything. No, but I think that there was a reason for that movement, which was people realized that there were a lot of people who just weren't getting dignity in our society weren't being afforded dignity by our culture. And what we need to do, instead of focusing on redistribution of dignity, instead of redistribution of like, you know, we've got a, we've got to, like, you know, hate on men so that women can do better. No, that's really that's redistribution, any thinking that is sort of, you know, a communism of respect,

Lars Doucet 40:46

right, like zero sum DVD.

Noah Smith 40:49

Right? We'd like we've got to s**t on some people. So other people feel good. No, we've got to produce dignity for everybody. We've got to have an inclusive society where basically everyone gets respected instead of just, you know, and there's not we don't think of it as like, some people have to be disrespected in order to respect these other people. We've got to just respect everybody. We've got to increase respect for everybody. And I feel that that was sort of the original ideal of democracy in America. If you read, you know, Alexis de Tocqueville, you read a lot of stuff. That was sort of the democratic ideal was a lot about social respect was like everyone, everyone gets respect. And that's, in some ways, that's the idea behind our housing, dreams as well. The idea that, you know, like, your home is your castle. You know, Huey Long what was he Long's campaign slogan, every man a king

Lars Doucet 41:42

chicken, every pose that someone else

Noah Smith 41:44

know, that was a chicken. Every pot was on I remember Warren Harding, maybe, Calvin Coolidge? I don't remember. Anyway. But but every man a king, that was the idea, of course, a little sexist, but okay. And the idea that there's this egalitarian impulse in America that we've forgotten, the way to create that egalitarianism is to build up everybody is to create more dignity in our society. Now, here's here's adopting a bunch of a******s and shitting on people to make ourselves feel good about ourselves out

Lars Doucet 42:17

here. Here's some thoughts I have because I am a Norwegian. In addition to being a Texan, I'm a Norwegian citizen. My mother is an immigrant. I was born in Texas and raised in Texas. And what's really interesting, having a foot of both countries is Norway. Compared to Texas, Texas is sometimes like seen as like, you know, we don't bout any kings. It's like you compare it to like posh London, it's like, you know, seems like maybe not a super stratified society. But I've never been anywhere in the

Noah Smith 42:43

world. I stayed no till next to the king's house. Yeah, Norway. Yeah, well was so King was my neighbor.

Lars Doucet 42:47

Exactly. Wilson, what's crazy Norway's I've never been to a place that says radically egalitarian is that I mean, it's got its stuff. But like, in Norway, like one of the things my wife said to me, when we came back was it's like, there's so many blue collar people here that like are not like super conscious that they're blue collar, like your cousin is an electrician. And that's like, the same as if he was like, a like, like, an insurance salesman, or a dentist or something. Like he has a good wage, he owns a house, you know, he has any respect that he would have here in America if he was white collar. And in America as much as we think that we're doing better than the British in terms of like poshness and class. Like we very much have those divides. I mean, racially, of course. But even aside from that, you know, and it's it wasn't totally pointed out to me, it's like, oh, yeah, that really is there. And I mean, in Norway, it's like, I'm not saying like, we don't have hierarchies. Like there's all get a Norwegian in their cups. And they both say some interesting things about immigrants, for instance. But additionally, like, there's this notion in Norwegian culture called the law of yuanta. It's kind of pan Scandinavian of just like, like, being too under egalitarian is like a way to like, make everyone hate you, you know, is that it's a very aggressive kind of egalitarian ism. Not too big for your britches. Yeah. Not not quite like French style. But what but it's interesting, because it's an explicit goal of the country. And you see that like, the king was a the whole royal family was elected 100 years ago or something. Like they had the choice to be Republican, they picked a king, and he seems to have gotten the message that that was, you know, like he did everyone loves to take pictures of him whenever he's on public transport and stuff, you know? But so with dignity. It's interesting that you want to move it to a zero sum path because some people say dignity is inherently zero sum because it's about a linear rank of where you are in the pecking order. Right. You know what I mean? It's like, here's like, an A high school is like the perfect example. You're stuck in high school. There's no other social context. You You are ranked? I mean, I mean, some of them even rank you academically, but I just mean, like socially, like, and it's very clear who's where it's like, prison in that way. And so do so I think what you're saying is like the way to to similar to is the way to make get us out of the zero sum redistribution fight about dignity where me getting more dignity means taking dignity away from you is to like create more like social contexts or whatever or what do you think?

Noah Smith 45:31

I do think that is right. And I think that deserves its own whole podcast. I think you hit upon it exactly. But, but I think that it is so so when you're talking about status, that's very hard to make positive, some because status is based on hierarchies, and you're saying status is not dignity. Dignity is not, you do not that, you know, nobody having to bow to anyone as they walk past. Like, nobody's dignity depends on being bowed to the status. Yes. If I want to be like, you know, a big shot, then absolutely. But if if what you want is to just be, you know, just to, like, have basic dignity as like a citizen, and be respected and things like that, that doesn't actually require anyone to bow to you. And so you can, you can create it for everybody. It doesn't require tearing anyone down, to build other people up in terms of dignity, in terms of status, it does. So I think de emphasizing status and emphasizing dignity and respect more is the key interesting, we've got just you're a person, you deserve dignity, you deserve respect, you're a citizen of this country, even if you're not a citizen, just have a green card, I'm not going to disrespect you, but you. But you deserve respect. Right? Right. And then I deserve respect, you deserve respect. And that is the idea that America is missing. That is an idea of abundance, that I think would would heal, or at least, you know, ameliorate many of our current social disruptions, many of our current social divides, if we can just create a culture move our culture toward a culture that is not based on finding reasons to s**t on people all the time. And so and that's what this culture of abundance can do.

William Jarvis 47:25

We know it, this brings up a great question we have you know, we've had many guests on the podcast, talk about political polarization, probably had 10. Now that if they've talked about it kind of in depth, pretty much all of them come up with the answer. It's social media, like that is the answer, kind of we get back? What's your thought on that? What is driving this kind of political polarization we have? And that's the answer has to do with like, not giving people dignity or something like that.

Noah Smith 47:52

There's a bunch of stuff. Um, what's not driving it, by the way is immigration. That is just not a factor behind political power. In fact, that's gonna that's going to reduce political polarization. Because when a whole bunch of conservative Hispanic people start voting Republican, it's just gonna blow everybody's, you know, expectations out of the water, and they're gonna go and then like, their narratives are gonna go out the window. But um, so it's not it's not immigration. It is a part of it to the internet. You know, Twitter especially, I would say that the Twitter is worse than Facebook, because Facebook has replaced the old chain emails and Drudge Report and all that crap. But then Twitter's created something new, which is dunk mobs just warring dunk mobs all day. And we've we've taken all the journalists and politicians in America and thought leaders and trap them in a room with dunking teenagers all day and that's what they hear all day is just these a*****e like teenagers just you know, and and just unhappy people just screaming and ranting, Saira Rao or some s**t all day is what they're being exposed to. Anyway, Twitter's terrible. And we could do a whole nother podcast about that. A second factor is the big sword. So if you read that, that book, it's about how basically, liberals were like, well, we don't want to live in a, you know, small, podunk town where everybody's conservative. So we're gonna move to a college town or a coastal city. Right? And then you can see the big sword within Texas people moved to Austin, like liberals moved to Austin. That's where we got the culture of like, slacker and Richard Linklater movies and stuff. We that was and like 80s 90s Austin is where we got that. And then in the whole country, you know, people would move to San Francisco to New York to San Diego to Portland, wherever right to the coast, Boston DC. And so then um, and then we sorted ourselves now all the Liberals are really mad because the you know, the way we divide up electoral votes and districts and all this stuff, really down weights, urban agglomerations, and cities in terms of the political power they get, and so they're really mad, but that's what they got because they moved away. They want to still be able to control the government. Well All physically removing themselves from the rednecks that they didn't like grown up with. And so that's, that's a problem because our system is not set up to do that. But also, it means that everyone can sit there in their own town and imagine that people far away are the bad guys, you know, like you can sit in San Francisco and imagine that the world would be great. If it were just for these Republicans. And then locally, what are you doing you're, you're a progressive quote, unquote, but you're voting to block housing. You're a Republican, you're voting Democrat, but you're a Republican, you don't want poor people living next to you. That's when you know, you don't especially want to pay more taxes, stuff like that. Maybe you vote to ban drinking straws, or some useless crap like that. But you are functionally Republican. And yet, you're sitting there telling yourself all day, that it's it's those people in the red states that are, you know, that are ruining this country. It's like, it's, you know, and then if California ever, ever, ever succeeded, you'd get conservatives and liberals, Republicans and Democrats dividing up very quickly, right? It's only because it's part of this greater unit that all the Californians can imagine, well, I'm a good progressive, and if the if this nation, were just California would be so much better, blah, blah, no, it would be the same. You'd vote I mean, there would be a few differences, like gun laws. Mostly, it'd be the same. And oh, but people don't realize that. So the sword, this big sword and the treating of political groups like sports teams that you cheer for, and then you get, like, the only time I've ever seen hatred, similar to the hatred of Republicans and Democrats in this country, is Michigan versus Ohio State. That's the only thing I've seen that approaches it and it's the same thing. It's like, you know, people are just watching these elections, like sports teams and and a few people are realizing like actually, the you know, that one party wins the election or another party, there's sometimes there's consequences, and sometimes there's not consequences. But then it's like,

Lars Doucet 51:56

what's funny when you compare him to sports people be like, he's not taking politics seriously enough? And I'm like, No, I think you're not understanding how much people care about sports.

Noah Smith 52:07

Exactly. Like I have, I have had to physically run from opposing team fans, like, No, I had to as a college kid, I had to physically run from Berkeley kids,

Lars Doucet 52:18

people, people in Berkeley kids, this always came up in in, like, whenever people are talking about, like, how video games are dangerous. I'm like, Are they more dangerous than sports? And I don't mean this. I mean, the fans, like what's the number of murders per year of a Call of Duty fan versus, like, you know, football hooligans? Right? Right. Even making it up per fan. Right.

Noah Smith 52:41

Sports is like, what what we do when we don't have video games, and sports is war?

Lars Doucet 52:45

Oh, yeah, for sure. Yeah, sports, sports, sports is domesticated more, and it's less worse than the alternative. Alright, so

Noah Smith 52:53

I know you have to go soon. Let me give you the 32nd rundown of why abundance and health care will be the hardest. It's because healthcare is what we've used is the vehicle we've used to create middle class mass middle class employment in the era of knowledge industries, and the decline of manufacturing, healthcare was what everyone went into. And that's what sustains the middle class. And so it's very difficult to make super productive health care and cut costs, because that's where everybody works. And where everybody, you know, building a bunch of houses isn't really going to destroy people's property value. So it's not really gonna destroy middle class wealth. But I guarantee you that making healthcare more productive will destroy middle class income for a large swath of people, even though eventually there'll be reallocated to better jobs. I can't even tell you what those jobs will be. And when we when we destroyed all the manufacturing jobs and shipped them to China or automated them or just like, whatever. We didn't, you know, everybody went into health care. The question is, what other people do now the answer was health care. We don't have an answer lined up after health care. And that's why creating true abundance and health care which requires dramatically reducing prices will be very difficult,

Lars Doucet 53:56

political staying cool. Well, we'll bring it off on a favorite Georgia's topic is natural resources are another kind of undiscussed aspect of land, right? It's not exactly the same as like territory or locations. But like Norway famously has, you know, this natural resource fund, and they manage their hydropower their energy sector, much like they manage the oil sector, on the premise that pre existing natural resources in this case, water and oil belong to the Norwegian people, and so the windfall profits should go to them. Do you think such a model could be helpful for dealing with our energy sector here in America?

Noah Smith 54:33

I really do think so. I think that we have some of the resource curse here because Exxon and all those companies contribute heavily to the Republican Party. That's not going to solve all our problems because who wants to shift away from oil when oil gives us other Alaskans get the Alaska Permanent Fund Right, right. They get Alaskans get a dividend from all the oil that's produced in Alaska, but Alaskans really value the oil industry for this reason you get rid of oil Where's The dividend coming from where's our monthly check coming from? And

Lars Doucet 55:02

so So are you saying that cost attendance?

Noah Smith 55:05

If there is path dependence? Absolutely. So that as well, that's an interesting thing for some problems like it can alleviate some of the political problems. But it can't alleviate, ultimately the political economic problem. What we really just have to do is sell consumers on cheap electricity so that we build solar and wind but especially solar, how would you like some cheap electricity? Yes, there will be these these these black panels there, but you'll get used to it. How about some cheap electricity? Would you like that? And that's why solar power has to get cheaper than fossil fuels. Not coal, because everyone hates coal smoke that's just makes the world bad. But cheaper than natural gas. Solar has to get considerably cheaper than natural gas. So the pitch for solar can be How would you like abundant electricity, cheap electricity can't just be global warming is going to kill us all? How about we reduce our emissions because everyone sort of on some level understands that their own locality is responsible for only a small percent of emissions. And so there's this social loafing problem. There's this free rider problem where everybody's like, Well, someone else can reduce their emissions. I'm not going to reduce mine. Instead, it has to be a private monetary incentive to switch to solar.

Unknown Speaker 56:13

I got we've got afternoon.

Lars Doucet 56:14

I gotta run in one minute. So one minute, what is the most important low hanging fruit America should do now to UNEF ourselves?

Noah Smith 56:24

The most important low hanging fruit is abolish the filibuster, make this country governable? Again, I don't care if there's a Republican majority left Republicans passed some stuff, you know, abolish the filibuster so that the federal government can actually govern start doing stuff. Please do it even if you're a Republican. Okay. That's great.

Lars Doucet 56:41

That's great. Do it. No, I said so. Well, no,

Unknown Speaker 56:43

thank you so much for coming on.

Lars Doucet 56:45

Yeah, you've been you've been great. Really appreciate it.

Noah Smith 56:47

Thanks, guys. Really fun.

William Jarvis 56:53

Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck breeze at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out Donovan's work in music at Donovan dorrance.com

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38

Well burn, how are we doing this afternoon?

Byrne Hobart 0:40

I'm doing great. Thanks. How about you? Doing great,

Will Jarvis 0:43

thank you so much for taking the time to come on the show today. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Byrne Hobart 0:51

Yeah, absolutely. So I have a kind of eclectic background, when to college briefly and then dropped out, moved to New York and sort of bounced around a couple different things, but ended up in online marketing. And then through that, I started writing online about how different companies were marketing themselves online, there was this crop of companies that were going public in the 2010 2011 period was really the first time that internet companies could start going public again, after, after the disaster of the.com collapse. And so through some of that writing, I ended up getting in touch with a hedge fund, join that fun to work on analyzing internet companies. And then, since then, I've done some finance stuff and some crypto stuff. And then a couple years ago, I basically got a little bored and decided to start writing for a while and figure out my next thing. And it turned out my next thing was writing. So I've been doing a newsletter. Since pretty regularly since early 2020. It's the diff, go to the diff.co. And check it out. And I cover a couple different things. And I guess, I think part of it is I do have this general attitude, which is partly a result of reading newsletter, that the rule is just really complicated. There's a lot of interesting stuff to learn about a lot of different companies about how a lot of different countries structure their economies, and how different technologies have impacted the world. So I'd like to do deep dives into that whether it's looking at I don't know there's supposed to did a while ago on a bank called Synchrony Financial, which is sort of like, sort of like a firm and the rest, except it was founded in the 1930s. And it's been doing store cards ever since then. So they're like, you know, they're things that people learn after almost a century of doing unsecured consumer lending to help people buy stuff that, that yeah, other companies will think you're out in, in good time. I am a big fan of the reading of Ronald Coase, the economist who is he has this wonderful framework for thinking about how how transaction costs are such a limiting factor, and especially how just the lack of the existence of asymmetric information makes it really hard for the economy to be perfectly efficient. And then a lot of things that look like they don't make sense or look like they're just done imperfectly in the economy, they they start to make more sense when you think about things from a transaction cost lens. So I would say that the I think the big thing is our transaction costs matter that financial bubbles are underrated, that they are actually a coordinating force, that when there's when you're in the middle of a bubble, there are a lot of things that if you think of the bubble is like this definite vision of the future, you know, borrowing from zero to one, this idea of definite optimism, often that definite vision of the future requires a bunch of specific things to go right. And if nobody's working on any of those things, then it's very unlikely that future will come to be, but if everyone is really excited about those things, and if they're sort of betting that they will happen, and they have to happen for that future to work, then it actually makes sense to build some of the things that have to be built for that future to happen. So you can do a lot of bubbles as like this positive feedback loop. Like, I think Moore's law in software is a really classic example where Microsoft was always building software that would be able to run on the next generation of Intel chips, Intel is always building chips that will be able to run the next generation of Microsoft software. So they just keep pushing each other forward, you go back half a century, and you have the same thing with cars and oil, where we had to drill for oil because people are buying cars, people were buying cars, because there's lots of cheap oil and the the feedback loop just made both of those industries really huge.

Will Jarvis 4:20

That's great. That's great. I love that I want to talk about a couple different things and tie these threads together. You know, trends I think about transaction costs and Ronald Coase and how a lot of things make more sense when you when you think about them under the lens of transaction costs, things that may look like they're actually inefficient are efficient under under these constraints, you know, how does your thinking around something like that which sounds a lot like the efficient market hypothesis is that you know, the EMH and bubbles, you know, how real are bubbles? I have a friend who is a researcher for Scott. Oh, man, Scott sunder you know the money illusion blogger. And, you know, Scott, in his book, he talks about how you know, up asset prices could have this random walk, and they can look like bubbles. But really, it's just like all random at the end of the day. Can you just talk a little bit about about that, like the EMH? Bubbles, how they interact, and maybe how they don't interact? Yeah, sure.

Byrne Hobart 5:13

So I think one thing to say on on the efficient market hypothesis is that it does come in varying strengths. And the strengths can vary from the statement that you probably can't beat the market because they were easy. Everybody would do it all the way to the like, the the strongest version of it is, even if you have perfect insider information, you cannot actually beat the market prices always perfectly reflect reality. And I think those I mean, one way to think about it is that it's a model, and that models are useful for two reasons. One is that they tell you how something should behave. So like a lot of models of physics have been incredibly accurate at doing this kind of thing. But the other thing is that models tell you that, here's a series of constraints you can apply. And within those constraints, this is exactly what has to happen. And therefore, given that it doesn't happen, we have a limited list of reasons that that can be. So you can go back to EMH. And say, well, one of the things they assume is that it is costless. For companies to change their financial structure, one thing they assume is perfect information. And, and so when you see the markets, if you believe that markets are not perfectly efficient, then you can say it's probably because of things like imperfect information and transaction costs. Which is, given that those are both really broad categories doesn't really narrow things down too much. I think the other thing to say is that a lot of EMH practitioners or EMH, believers will say they don't mean that the price is always exactly perfect to the penny. They mean it's generally roughly correct. So you know, there's still room, I think you can be like a believer in wheat EMH, who says it's hard to beat the market unless you have an advantage if I have an advantage, and therefore I beat the market. So I think that's that is semi compatible. Where I think things get hairy is is that claim that markets are efficient, they are discounting new information. And so you know, when prices seem to be crazy, it's because there is a lot of new information, because you do sometimes have feedback loops that are just improperly discounted by the market like there are market participants are not fully informed about why things are the way they are, like I mentioned these positive feedback loops with, say cars and oil. There's a wonderful Paul Graham essay where he talks about what happened with Yahoo and with the stock market bubble cuz he was at Yahoo for a while during the peak. And one of the things he says is that there was this cycle where companies would raise money, and they would say, we are going to build a profitable business, just looking at Yahoo, they would have money, they would have to market themselves, the only way they can market themselves internet users is buying banner ads, they've got to buy those ads on Yahoo. So Yahoo reports more revenue. And then the next round of companies can say Yahoo is really profitable. So we're going to be the next Yahoo, and so give us money. And so that can go on for a while. But eventually people realize that that's where all the money's coming from. And you can have there's, there was similar stuff with the real estate and subprime mortgage bubble in the 2000s, where a lot of people who would have defaulted on their loans didn't because they could refinance, because their house housing prices have gone up because of the availability of lots and lots of mortgages. So yeah, for a while it was kind of self sustaining for a while you had a lot of these cities where jobs were booming, because a lot of jobs were in construction or in mortgage financing. And suburbs kept expanding. And eventually, we just ended up with a lot of excess housing stock. Now, there is a there is a sort of counter argument there, which I think is somewhat true that part of the housing bubble was just that we lived in a housing supply constrained environment where we just don't build as many houses as people want to have. And so the price of that limited resource goes up. So to some extent, you can, you can sort of argue against the bubble hypothesis that way, but then you look at what happened to the housing prices. And it is it is clear that there was at least something that looked a whole lot like a market panic. And I guess that's, that is another place where you can argue that bubbles happen is just that. If you have a financial system that allows people to borrow money, you can end up with this cycle, which the economist Hyman Minsky wrote about and did a really good job of articulating this. And it shows up in a couple other places where what happens is, when the economy is not doing great, and asset prices are depressed, they're a lot of good investments to make. A lot of stuff is cheap. So people buy it, those people make money. And then the next round of people or those people when they're reinvesting their money, they see that the the expected future return to these assets is not as good. So you know, maybe stocks were trading at 10 times earnings at the low and now they're at 12 times earnings or 15 times earnings. But things look a lot safer, like the economy is doing better, you can be a little bit more certain. It's easier to borrow money. So people are would have money, you can get to the same return that you were getting before. And potentially, if things appear to be getting safer, faster than they're getting more expensive. You can actually get better returns if you just lever up more. And then what we end up with is a situation where the amount of leverage in the system is growing. That leverage is actually making asset prices. says look better, like when there's more money circulating more people have more money to spend, while the facts mean that they're spending more money on just about everything. So the economy looks like it's doing well. But it's, it's probably doing well, because asset prices are so high. And so if anything disrupts that, then things get really bad really fast. So that, you know, I think there will there will always be this semantic argument about bubbles. And I, I think it's, it's kind of an unwinnable one. And I do because I have, I've had these debates many, many times over whether or not bubbles exist, whether the markets are actually efficient. And I think some of it just comes down to sort of a matter of taste or like, you know, a matter of what you think you can know, and whether or not you wait, anecdotally and, you know, there's, there's always anecdotal evidence that people seem really, really excited at the peak, they seem really, really depressed to the bottom. So I don't think that, you know, they're they like, did some complicated Excel model and decided I'm gonna be really, really depressed today, because bitcoins under 20k No, I think that they actually probably were actually feeling that and that those feelings affected their behavior. I think one last thing on EMH. There's another critique, which is sort of like the the critique of positivism, where EMH explains everything except EMH, where if markets are actually efficient, it means people are working really hard to price things correctly. But if markets are actually efficient, you shouldn't work so hard, you should just buy an index fund. And so Andrew Lowe at MIT actually has sort of, sort of tried to synthesize this into what he calls the adaptive market hypothesis, where prices are getting more efficient in the ways that we are thinking about, and then they're getting inefficient in other ways, like they're always tail risks accumulating somewhere, there's always something new happening, that we don't quite understand how to price. But at the same time, everything that's been around for a while, whether it's a trading strategy or a particular company, every quarter every year, we get better at understanding how it works, and better pricing it more efficiently.

Will Jarvis 11:49

I love that a little bit. I've got a question going off of that. We had Mike Green on the show a while back of logic of capital funds, believe is fun. And he has this big idea about passive indexing kind of distorting the market in some way. And it's kind of like talked about with like this critique of positivism, where, you know, if you have these kind of like automatic inflows and people's 401 K's that you know, I have one that automatically buys you know, this like index of, you know, every stock in the entire world do you think that does, at some level has some bad distortionary effects in the long run?

Byrne Hobart 12:22

I think so I've been really impressed with with Mike Greene's theories on this, I think that it is like he has I think he has like the the high level theory of just, you know, they're they're blindly buying and they're valuation insensitive, and that has issues. And then there's a market microstructure side to this of how they buy what impact that has on the probability distribution, different prices, and that I've just less well equipped to, to really understand that one, in part, because you need a lot of data and a lot of theory on how how, what the market impact is of these things. And markets tend to be really, really adaptive, especially when you when you get to the market microstructure level, you're looking at this system where there are people who are constantly tweaking their market making models to predict and take advantage of exactly this thing. There's a really good point made in the book in August on the wrongs, the laws of trading, where he says that any source of alpha cannot last forever, that people will find it, they will exploit it. And the points out this doesn't just mean positive Alpha doesn't just mean that you find a market inefficiency, and you're making money that eventually you'll make less money. It's also the the inefficiencies of things like there used to be an inefficiency in the treasury market where I think it was something like, there was a Japanese giant Japanese pension fund or all the Japanese pension funds, they all got money from workers on a one month cadence, they would always buy at the same time, they would always buy the same treasury bond. And so you knew that you buy it the night before you sell it the morning of and you make easy money. The problem is eventually everyone knows that. And then eventually, the price just reflects that. And really, instead of you making money, because you know about this big trade beforehand, you you sort of you make money if you are able to accurately predict both the size of the trade and the size of the traders who are trading ahead of the trade and the behavior of those traders after the trade is over. And that's a harder way to make money. So eventually, those inefficiencies, they tend to go away. And then when the inefficiency is less about the current price and more about like the probabilities, the distribution of possible prices, then it gets really hard to talk about because you don't really know if you're right or wrong until there is some tail event that causes crazy things. And, you know, I think if you are if you're trading deep out of the money options and constructing strategies based on this, you can you can make a lot of money. It's just you have to be really, really patient and expect to often not often lose, lose money for a while or at least make a lot less than you could otherwise. Until that happens. I think the there are interesting distorting effects from just the fact that there are a lot of investors who are benchmarking to the s&p 500 and a lot of investors were directly investing in it were companies that are right on the edge of index inclusion do tend to be They seem to be a little bit under priced companies get added to indices immediately go up in price. On the other hand, I think if you if you're EMH believer, you can say that one of the factors that affects the value of any security is liquidity. And anything in the s&p is going to be more liquid than something that's not in it. And so maybe I think the strongest EMH advocates would just say that as a measure of the value of liquidity, slightly weaker ones would say that is, maybe that's an exaggerated measure of liquidity, like maybe a company is not worth 5%, more 10% more just because it's being traded by index funds. And just because it gets a little bit more investor attention, but it is, that is also a factor. I think there's, there's there are other kinds of similar inefficiencies where there's historical patterns. So you can you can divide bonds into high yield and investment grade, and it's a pretty arbitrary categorization is basically below investment grade means that the rating agencies think there's a meaningful chance that this bond is not going to pay off 100 cents on the dollar. And then there are all sorts of gradients of that, and so triple B rated as the lowest rate of investment grade, so you're probably gonna get your money back. But something bad could happen, double B is highest of the high yield. So you are probably going to get some most of your money back. But it's really likely that at least for some of these bonds will default. And historically, returns for risk adjusted returns for triple B bonds have been a lot lower than for other investment grade grade bonds are a bit lower. And then risk adjusted returns for the Double V bonds have been a lot higher than for other junk bonds that are high yield bonds. And it's because a lot of investors have a mandate of only high yield or only investment grade. And so when they're looking at those bonds, they want to do something that is exciting, that is value added where they can actually make an impact. And one of the things they do is they try to buy riskier stuff that's going to move around more, whether that's because they like the volatility, they love gambling, or it's because you can add a lot more value and there's more uncertainty, but either way, they tend not to touch certain bonds in those categories. And that actually does slightly distort their performance.

Will Jarvis 17:03

Gotcha. No, that's really that's really fascinating. Bert, I'm curious, you don't have to talk about this if you don't want to, but but what is your personal strategy, kind of the macro level look like? Do you just buy the index? Do you like actively try to trade things? You know,

Byrne Hobart 17:15

I do? Yeah, I do. I do some active trading, I try to sort of separate that for the newsletter, because I think there's, you know, there's the inner conflict, conflict of interest when you're talking about things and also investing. And so what I've typically done is that there are a handful of big companies that I've invested in, and I like, will hold for a long time. And I just disclose, I mean, I disclose whenever I have a position and I write about a company involved, or company I have a position in. And then for smaller companies, my thinking is, it's actually just tough to manage the fact that if it's, the newsletter is big, and if people are reading it, then if you mentioned some tiny company, and you say, here's what's great about it, and I like it, there's a chance the stock will react. And if that happens, then you can be in this awkward position where you liked it because it was $4 a share. And now it's $6 a share. And so it's much less attractive. So you want to sell and then you're sort of telling people that Well, I liked this, and that's why you bought it, and then I sold it, basically to you so so basically, for smaller companies, I have to just choose like is this something that is more interesting to write about, or better to own for short. And so that's, that's what I do. It's tough to manage, it's just tough to do the time management thing of having a portfolio and also writing about companies. But there is there's a lot of synergies, I'm paying attention to the general macro situation, I think macro is just really interesting. And you get to pull in a lot of threads. And in Tech has fallen into companies and falling macro. But they do kind of scratch the same itch, where you have these really complex systems, you have these equilibria that can last for a while, they feel like they're gonna last forever, and then they get completely blown up and something crazy happens. So kind of similar, similar mindset, similar, really high level mental models, and then totally different low level mental models.

Will Jarvis 19:03

How would you rate yourself as an active investor? Do you think you've done well? Or do you like, you know, reflect on these things?

Byrne Hobart 19:09

Yeah, it's it's a tough question. Because my, my overall track record is good, like, going back to when I started active investing, but it is very skewed to a very small number of decisions that turned out really well. So you basically take away like, two or three trades, and then I have a really poor track record, and so are a poor track are gonna really mediocre track record. And so that, I guess, you know, that depends, I think it would be, it'd be tough to actively manage money on that basis. I think if I were trying to actively manage money, you know, it's either, I'd have to find people who really had a strong understanding of, there'll be lots of kind of lumpy, mediocre times and then some really, really good times, but it's easier for me to just myself, because there's there's no one to explain things to other than me, so Yeah, but I'm, I'm happy with my track record. It's it's been good, but it's also when the sample size is small, you never really know how much of that was luck and how much wasn't on the other hand, that's, that's going to be true for a lot of people. And actually, just given that there's a parallel distribution with a lot of this stuff, the better your track record is, the more self doubt you got to have, because the more it's likely to come down to just one or two big decisions. Right. Right.

Will Jarvis 20:23

That makes a lot of sense. I'm curious. When we look at some of the really good investors, I just finished George Soros and his book and I listen to a couple of lectures and and they were fascinating. And we mentioned this on an email exchange with me and I did have the sentiment as well. It seems like the best traders don't really know like, exactly how they did it, if that makes sense. I remember Tyler Cowen asked Ray Dalio this recently and Ray Dalio is like, I don't know, like, you know, he kind of puts out an answer, but it's really make any sense. And he clearly can't really self reflect. Do you think there's some sense in which the best investors they you know, it's just it's kind of like parasympathetic or something, it runs the background, they've got this like feeling about it, but they couldn't really like write it down on a whiteboard and tell you how they did it.

Byrne Hobart 21:10

So I think some of that depends on the strategy. So Buffett has been really, really good at explaining what he did and how he did it. He explained some of it, you read the explanation, realize this is really hard to replicate. So I think my favorite Buffett interviews will be the ones where he goes into the unit economics of different companies. There's, I think there was some some, I think an MBA class went to visit him and someone asked him, I think the question was something like, couldn't Costco make their own version of Coca Cola, and he walked through the unit economics of, okay, here's how, here's how much aluminum you need for Ken, here's how much corn syrup you need, etc, like, here are the costs, here's the cost to transport it. And then here's the margin. And here's what RC Cola costs, here's what Coca Cola costs. So you're somewhere in the middle of that. And he basically makes the case that it's, it's very hard to do that and actually turn a profit. I mean, maybe it can't be done. But it's like, it's not a huge competitive threat. It's just one part of the market is that for price sensitive customers, you sell them something without a great brand name. But what I suspect about that is that you can walk through this economics for a lot of other industries. And that, you know, if you ask him something like, why, and I don't know if this is true, but like, Why did copper mines outperform iron mines that he'll be able to tell you? Well, it's this much per tonne. And, you know, this is your unit economics. And it's how long the mines last. And this is, what the swing producer does, et cetera. So if you have this huge library of just infinite knowledge on all sorts of businesses, and you've been accumulating it over a 90 year period, then it's tough to compete with and you can, you can have a lot of that knowledge that is just on the shelf, and eventually you deploy it and actually invest in something. And you may have been keeping track of an industry or keeping track of a company for your entire career and never pulled the trigger. And so I think, like part of the, you know, part of the Buffett technique is just spend all of your day either reading about companies or talking to people about companies, and then once every couple of years, pull the trigger and buy something. And if you can have that discipline, and you have investors who will let you do that, then you can do really well. But it's it's hard to duplicate. Now, Soros is a he's a really interesting case, because he The striking thing, to me from reading his autobiography is that he's been his autobiography and biographies of him is that he's been trying to quit since the 60s, like he got into grad school, and then he's working on this working for a long time trying to leave Yeah. And I think he may have finally done it, he may have finally successfully retired one, his 60 years struggle to retire. And so you know, one level, maybe he has a hard time introspecting. On the other hand, people who never have those kinds of struggles can't really introspect. So maybe, maybe you actually learn more from someone who has, you know, knows, knows what they want to do, and can't quite do it, because they're actually running into problems, and you can learn from them about what those problems are. I think the other thing is that some of the sources, techniques seem pretty impressionistic, you know, but it's, it's also kind of similar to the buffer thing of if you're constantly absorbing information, you have these mental models, you know, and cirrhosis case, it's more like mental models of interest rates, and commodities, prices and currency prices. And you are just updating that model continuously, then every once in a while you find something really interesting. They do. They do act really differently. So Buffett can be very, very careful, very cautious and only buys in size when it's exactly the right time. And then Soros. He has these lines about how when he hears about a bubble, he'll just buy immediately and then start doing research and see what's going on. I think those are just totally different mindsets, and I think some of that is that you're always engineering things around your own psychology. So if you are capable of making decisions and immediately cutting losses when you're wrong, then then it's okay. To do that, in fact, it might actually be helpful. There's this this term tracker position that I like that some investors will use, or it's like they buy enough of something that they will notice they're losing money on it. And that is a reminder to them to actually figure out what's going on. I'm not like that could probably get overwhelming, either just in a practical sense of, if you have 50 Tracker positions, you're probably not going to research all of them. And also, in this mental sense of you add up all the money that you have lost from basically something that could have been a sticky note that you put on your monitor saying, provider, look into company XYZ, then maybe you start to feel like that's a bad, bad decision. But you know, a lot of people find they find ways to, to play mental games with themselves to keep on performing. And so I think some of it is like, it's the equivalent of, you know, if you're if you want yourself to work out tomorrow, you have your gym clothes already by the bed, and you know that you'll see them first thing, and then at least you have to affirmatively choose not to do it, rather than choosing to do it. So yeah, sometimes sometimes that kind of middle management is is what they're doing. And I think,

like, like going back to the question of how well do they understand themselves? How well can they tell you what they do? And how well can you copy that? You would want to be careful that you're you're not copying the mental coping strategy for one person's particular mindset, rather than the practical approach to how do you pick things that will go up and not things that will go down?

Will Jarvis 26:24

Definitely. No, no, that's, that's quite wise. I'm curious for Berkshire, in particular, in Warren Buffett, I haven't looked at this in the last year. So this could be it could have changed, but it seems like Berkshire's performance is kind of, you know, come back to this, like median returns for the s&p 500. Is that just a consequence of the size of Berkshire? And it's just more difficult to find, like, you know, alpha, or, you know, is Buffett, you know, just like lost some fluid intelligence over time. Is it just, you know, I don't know, is it something weird like that?

Byrne Hobart 26:53

So I suspect that, for investors, crystallized intelligence probably matters more, in most areas that they, so I think fluid intelligence matters a lot for, for things that are closer to the market making and swing trading and day trading end of the spectrum that just if you if you see a headline, and you can immediately figure out what the first order and second order consequences are. That's, that's really good. But it can be really valuable to have that huge databank and have lots of different examples. And to remember that this is just like, I don't know, the the crash Bolivia or whatever. Yeah, so yeah, so I think crystallized intelligence does pay or pay good returns. And there have been investments have been able to persistently perform for a long time, although they do have to adapt, they do have to choose different strategies. And a lot of them, like a lot of investments. If you look at their early, early career, they're doing something that is lucrative, but non scalable, like one of the first things that Soros was doing was, I think, betting on the difference between things like copper gold mining companies that would be traded in London and in Johannesburg. And sometimes there'd be a little discrepancy. And if you act fast, you make money. And I think the like one of the things you learn to do is just really quickly handicap your odds, and really quickly do the mental math. And I think one of the techniques that are one of the talents that he said he had to develop was just, if someone calls you at two in the morning, New York time, and they say, Hey, we have 2000 shares of XYZ, do you want them or not? You have to be able to wake yourself up enough to answer that question. So that kind of thing can be useful. But then a lot of those investors move into more scalable markets over time where the percentage returns are gonna be worse, but the absolute returns are a whole lot better. So you know, Buffett, he would be, I think, like a beloved contributor to micro cap investing message boards, if he were still investing in the kinds of companies he did in the 50s. But he's, he's not. But it does mean that yeah, he's, I think, you know, 15% is a really good return to be getting on hundreds of millions of dollars in capital, especially if you are like Berkshire, and you keep a lot of cash on hand. In case of emergency, I think if you, if you looked at Berkshire Hathaway and backed out how much cash they actually need, you'd see a business with better performance, and just a little more volatility. And they've, so he's been warning investors since the beginning, like, literally, since the investor letters in the 60s that, hey, my performance is not going to be what it was when I was running less than a million dollars. And he's actually told people at Berkshire annual meetings that if you were running a million dollars, that he'd be earning 50% a year. And he's confident he could do that. But he's also, you know, Buffett has a lot of ways to make 500k in a year, and it's probably not the best use of his time.

Will Jarvis 29:29

Got it? Got it. What do you think about sources idea of reflexivity? You know, do you think it's a it's a good model to help them model? Is it interesting, or is it just like, I don't know. Yeah, yeah.

Byrne Hobart 29:41

Yeah, no, I think I think it's really powerful. So the source model is that when you would think that what happens is fundamentals change, and then asset prices reflect this. And his view is no asset prices change that actually reflects fundamental that actually affects fundamentals. And so fundamentals will improve when when stock prices go up, and that'll keep happening until sentiment changes. And then both of those go down again. And that you can make money on both sides of this equation, I think so his first example of this that he's given was real estate companies. And the model works really well in that case, because these companies would borrow money buy properties, and then they would pay a dividend and keep on levering up as they made more returns. And in that case, when the stock price goes up, they actually can borrow more cheaply. Some of this is that the broad perception of the company is there, they're gonna grow, there are solid investment. Some of it is just that the the lender can say, if this company runs into trouble, they can issue stock. And if they use your stock, they can definitely pay this loan back. So we should lend to them. And so you had with real estate trusts, they were, stock prices started going up, he bought, and then their earnings actually started growing faster. And so prices went up even more. And then at some point, he, for whatever reason, I realized it was time to sell. Because in the real world, you do eventually run out of good real estate investment opportunities, especially if tons of capital is flowing into you and all your competitors. So eventually, you run out of good things to spend money on, but you're still compelled to borrow and grow. And then things start to get bad. And reflexivity also works nicely for currencies, where if a country's economy is doing well, money starts flowing in the money flowing in helps the economy. But you end up with these countries that this happened a lot in Southeast Asia in the 90s, where they sort of get, it's kind of like they overdose on capital, because what happens is, they were growing because they were manufacturing because they had a cost advantage. And then as more money flows in the banking sector gets bigger, the real estate sector gets bigger, eventually, the eventually people start quitting their jobs in factories, because they can make more money building the building, the tower that houses the bank, that is making all the loans to other property developers or making belongs to the airport company that is letting more people fly in to make more investments. And so yeah, so eventually, you end up with an economy where a lot of the growth is and handling growth. And then if that growth goes away, for whatever reason, then the rest of the economy has his kind of languished, and then you'd have a pretty severe crash. So it works really well for those. It doesn't always work well in other industries. But I think an interesting place where it works well, I wrote a piece on this a while back was in, in Tech because of equity compensation. So if tech companies, if the stocks are doing well, then people start to figure out that you are getting a better base salary and be making a ton of money on your equity if you work at a big tech company. And so those companies get their pick of talented people. And then if you have an industry where everyone in your supply chain is pretty smart and ambitious, then things happen really fast. So you know, the fact that Amazon did well meant that AWS could hire a lot of good people. And that meant that if you were using AWS, they were shipping a lot of features that you really wanted, because everyone there was really on the ball. And and if if that equation stops working, if that's not where all the smart and ambitious people, that's not their first choice, then then it it kind of feeds on itself for a while. And this is you know, it's been different industries have been that have had that status at different times. So 80s, a lot of people wouldn't finance and finance really well. And there's this proliferation of new products. So if you were a trader, you got a lot more things to trade and a lot more people to trade with. So for a while, everyone's doing really well. But then we sort of ended up over finance for a while. And you can look earlier than that. And in the 60s, a lot of big companies had that status. So you know, Procter Gamble, really desirable place to work, you know, you joined when you're in your mid 20s, and your assistant brand manager for a brand your parents have heard of. And then after a couple of years, you get promoted to brand manager. And now it's your job to make sure that the world uses lots of lots of Tide detergent. They got a lot of really, really smart people who did well later on like in the I think in the 70s. Jeff Immelt who ended up running GE and did not do especially well. It's impressive that he became the CEO, and Steve Ballmer, who over his entire track over his entire career at Microsoft had a really good track record. Although people tend to focus on the last couple years, they were actually office mates cubicle mates in the 70s working for Procter and Gamble. So that's where ambitious people went, then. And then you can even go back to like, 1940s don't really count because whether whatever your level of ambition was, you were probably getting conscripted, or you were working at a factory because someone else got conscripted. And then 1930s, a lot of those people went into government. And so you've actually had a really competent government that was getting a lot of stuff done, because that's where all the smart people works. It's not like anybody else is hiring. So you can look at those cases where there's a big flow of talent and money in one direction. And you can view that as reflexive process where the talent means that there are more useful things to do with the money, the money means more talent gets attracted. And then eventually, you just run out of all the useful things that that entity can do. And then everything has to flow out.

Will Jarvis 34:54

And it can kind of work the other way too. I'm assuming we're like this process can run backwards and things and get worse for quickly.

Byrne Hobart 35:01

Yeah, although it's it's kind of I wonder how much of that how much of it sticks around, you know how much because there's, there's gonna be some inertia like, I think this with with US government, the government was accomplishing really impressive things in the 50s. And in the 60s, you know, Paulo might be the peak of that. And then by the 70s, I think a lot of the a lot of super competent people who had joined in the 30s, they were getting to a point where they could retire. And so they did. And then they there wasn't a new cohort of the same caliber of people to take things over after that.

Will Jarvis 35:35

Is that kind of what we're seeing right now with tech? I know Noah Smith had this tweet a couple of weeks ago, where he said, you know, although there are a lot of people who thought they made $40,000, who now make, you know, $200,000, or something like that, because the RSUs for tech, equity compensation had collapsed a lot. Do you see that as a problem for big tech, you know, over the next decade? And is there any, anything they can really do about it at this point?

Byrne Hobart 35:58

I think that there's there's still a secular bull case for the big tech companies in that a lot more human activity, a lot more economic activity will be mediated through software over time. There's just a lot of there are a lot of people whose job revolves heavily around copying and pasting or answering emails in a fairly formulaic, straightforward way, a lot of that can and will get automated away. So there's, there is still room for that industry to grow. But yeah, it's, it is harder for it to grow when asset prices are not going up. So they have a harder time recruiting people, I think, maybe the positive news is that it's hard to name another industry that is going to get all of that talent. I mean, maybe some of them are moving into, you know, going back to school and doing biotech or learning a ball about fusion or something. Certainly, some of them are going to quantitative hedge funds, because those funds were already at the point where they were trying to match offers from Microsoft or Facebook or whoever. So maybe, maybe now those those funds get all the talent they can handle. But yeah, there's there's probably not, I can't think of an industry that would use the same kinds of people and be able to employ that many of them.

Will Jarvis 37:08

Got it. Got it. So it's an interesting challenge. What do you think about the macro environment? The US it right now, I think about the, you know, inflation in context of, you know, perhaps lower growth, peers, a lot of talk back in 2013, about how, you know, if we don't have enough technology, underlying technology driving, he's talked about this since then. But we don't have enough underlying technology driving economic growth, it's like, you know, what are you going to do like, there's just gonna be less coming from? What do you see coming in the next decade? Are you bullish on us building enough tech to kind of drive economic growth in the US? Or do we face like a real challenge?

Byrne Hobart 37:41

Yeah, I've, I've really gone back and forth on that, because I think there's, there's this interesting analogy, you can draw between factory electrification and AI, where in both cases, it just there was a really lengthy rollout. And part of it was that it took a long time to figure out why it took a long time to figure out how to run a an electrified factory differently from a factory that used a more centralized power source. And eventually people realized that you could have a totally different architecture, like, it doesn't need to be right next to a river, it can be somewhere else. And it can spread out in just two dimensions, instead of being this big three dimensional structure where there's like a central power source, and everything is just ropes and pulleys attached to that. And that actually, it eventually fed into even how companies are financed, where if a factory is something you build around a specific discrete power source, then you build them one at a time. And they're really big, which means that you issue a bond or you issue stock to do this one thing, and then you're paying your investors a pretty fixed return based on what that one asset generates. But the factory is this two dimensional thing that can just expand indefinitely in any direction, because you can just always add more equipment or you can replace it with more efficient stuff, you are constantly trying to keep this power balance exactly right. And you don't have to worry that as it expands, you know, the pulleys gets stretched and something breaks. Once that happens, it actually makes sense to retain more earnings and grow continuously. And so you started to actually see, you can you can look, it's there's a there's some data source, it's all compiled in I think the 1930s of basically, every industry is price, earning price and earnings and dividend performance going back to the mid 19 century, then you can actually see the dividend payout ratios going down as more companies retain earnings and start to fund their growth internally. Where I think the analogy fits with AI is that there are a lot of tasks that can be partly automated can be definitely enhanced through that kind of technology. A lot of it requires human input for now. And then there is a period where it actually requires more human input to fully automate it. So there are a lot of people out there who are doing image labeling. I think a lot of us don't don't realize the extent to which we are training, very elaborate language models to produce the things that we produce, but I'm like, I assume that I'm an input into a lot of these models, and they will eventually be able to do roughly what I do. But in the meantime, there is this period where any kind of symbol processing work, especially if the client that is not just map this table of symbols to this one according to a defined set of rules, where if the rules are more implicit and harder to write down, you actually just want human beings to follow the rules a bunch of times and train the computer in how to do it. So there can be a period where that actually increases the demand for white collar work until it eliminates the white collar job category entirely. You know, hopefully, that's a nice, gentle process. Like it'll be, it'll be kind of funny. If we reach something, if we reach like the singularity for white collar workers where, you know, you have like GitHub, copilot, 5.0, that can just write you a new Facebook or can actually solve Twitter spam problem in a week. And it's just done. But then we still need human beings for things like actually assembling iPhones because there's a there's a wonderful article in the information a couple years ago about how Foxconn keeps trying to automate things that keep her to automate their assembly. But it's really hard. And one of the things that the article clarified for me was that the human hand is actually just this amazing piece of technology, where it has little motors, it has little sensors, it's actually hard to get motors and sensors that are that sensitive, and that can, you know, start screwing a screw in and then stop screwing before they break the screw robots, I have a hard time doing that humans can actually do that pretty well. So yeah, maybe maybe newsletter writers will all end up working as electronic electronics assembly in the future. And you know, hopefully, hopefully, that's a world where GDP per capita is like $500,000. A year, right? It's we've we've had this super abundance of information goods. And then you know, you hope that almost cost disease kicks in. And there's still a middle class lifestyle available to the assembly workers and yeah, other people doing non scalable, either, like light manufacturing, or service drops or whatever. But yeah, it'll be it'll be an interesting world regardless. But yeah, so that's, that's a case of maybe a scary case. But a case for being a techno optimist is that we have a lot of cases where human intelligence is non scalable, applied to problems that machine intelligence could be scaled li applied to, and we don't really know, the total extent of that space in the same way that would electrification came on, we didn't really understand how many cases there could be were just add power, and you know, have it come in a little wire that you could plug into anything, we didn't realize how many applications there would be for that, and how many things would just turn into electric into electrical appliances.

And then I think the the negative case is that if you if you view the the great stagnation, as either we'd picked all the low hanging fruit, like then we there was a lot of low hanging fruit. So the the existence of hydrocarbons, aside from environmental impacts, has been this incredible blessing for humans, because they are very energy dense, and they're all around the world. And you can transport them easily. And they're useful for just generating a lot of energy. So you know, maybe like, if we're really optimistic, we can imagine that there is some oil like resource we haven't discovered yet. And that's going to have a similar effect and give us another give us a third industrial revolution. But probably not probably, we would have found it by now. So maybe we picked all the low hanging fruit. And then what we have left is increasing efficiency, offset by increasing resource depletion, and that hopefully, that evens out with just we continue to find efficiency gains over very long periods, which is possible, like there are industries that have driven very long term efficiency games, you know, Walmart is an incredibly well run operation, and continuously gets better. So there's, there's room for that kind of growth. There's a there's a book by an economist, I think his last name is Bill Rath called fully grown, where he argues that the great stagnation is just the natural end state for an economy that early on. So very early on, you're agrarian, you start manufacturing, you eventually reach the limit where everybody has all the stuff that they really want. And more and more of the growth is in services. And those are naturally hard to scale. But I think the current argument to that is, we don't really know if those are hard to scale yet. We don't really know whether you know, whether teaching scales whether there is some kind of enough variance in teacher skills such that one teacher remotely teaching to 20 million people is actually better than a million teachers, each teaching 20 people in a classroom, you know, if you if you make some assumptions that you can quantify teacher skill, and that you can quantify the information loss of zoom versus in person, maybe you get to the point where you say, actually, we can replace a lot of teachers with a small number of superstar teachers who do an incredible job. Or maybe we partially like we replace some subset of education with that, and then some of it remains not scalable. And if you take out big chunks of a non scalable business and turn them into a product that's continuously improving, then You do actually free up a lot of human time for other activities, you do actually create a lot of growth. Something similar might happen in healthcare. So you know, healthcare, it's a very labor intensive job. Like, if you're dealing with patients, you have to actually move them around, you know, roll them over and things like that. And you can, there's there interesting promising obesity treatments that could just significantly reduce the a the amount of chronic illness and country and be just the physical effort required. And if you, if you can slightly increase, you know, just five or 10%, the number of patients who could be served by a given number of hospital personnel, then you have just made the entire healthcare system that much more efficient. So I think that there's there's a an optimistic possibility that we will find these cases where something is less labor intensive than we thought, or there's a, there's a part of it can be made capital intensive, instead of labor intensive. And then then we can move back to pessimism. So one of the pessimistic cases is demographics, that when people are having kids, that tends to drive a lot of consumption and tends to produce a lot of demand. So you know, they, they'll want houses, they will want appliances, they'll want cars, they will buy a lot of stuff. When people get older, they tend to consume a lot less, and they tend to have a lot of savings. It used to be that they would get older and spend on their savings. But actually, if you look at data the Fed does I think the New York Fed does a survey every three years. And they look at wealth by demographics. And it used to be that wealth peaked for people in their 50s. And I think like 50s, through 60s, and then decline after that. But now there's, there's a cohort of those people who have basically no money, yeah, living off of Social Security. But there's another cohort where they, they own a house, they have retirement savings, and they are they're earning money faster than they're spending it. And so they actually get more and more wealthy over time. And if that happens, then you just have a big supply of capital and not a lot of demand for it. And, and then you end up with a low real growth world with low interest rates and low inflation, but just not not much is really happening. And since since that cohort is outbidding young families for housing and things, it ends up delaying family formation, so it actually exacerbates the problem. So that's and also the older demographics are way more likely to vote. So even though like the baby boomers are not the biggest generation, it's actually my generation, this sort of echo of the baby boomer is a slightly bigger generation in numbers. But in terms of votes, baby boomers matter a whole lot more, so policy is going to wait, their interests a bit higher. And those interests are just, you know, less if they're less growth oriented, more stability oriented. And so that's, that's probably how calls is gonna tilt.

Will Jarvis 47:45

That's quite the black belt. That's great. But But, but on the positive note, I wanna get your take on this something you mentioned a little earlier in that meta calculus, I think has the odds. It's a prediction market. And I might have pronounced it wrong. I'm sorry, I've only read it for the audience. But did they have the date at which we'll have AGI you know, the average bed is around I think, like 15 to 20 years at this point, which seems like really close to me. Do you think that number that's a good number? Is that way too close? Is that you? What are your thoughts there?

Byrne Hobart 48:19

So I have been increasingly impressed by AI advances over the last eight years, they seem to be coming faster and faster. Yeah, I just got my got my Dalai access. days ago. It's it's really fun. And so, and my understanding is that there's a lot of those prediction markets, they shift materially when one of these events is happens. So yeah, I feel like probably the confidence interval is getting wider now. Because there's one possibility, which is just that there is something just ineffable about this stuff, we can't actually build general intelligences, we can build things that are really good at copying some salient parts of it, but not not all of it. There's there's also the possibility that AGI matters less than really tight integration between humans with agency and tools that can offload a lot of computing. And that, you know, it's we can you can hit that intermediate stage I mentioned that I'm I am, by by accident training the language models that will replace me in my job, there could be a period where I am instead, training a language model that I own and instead of writing a newsletter, or writing one newsletter that goes out to 35,000 people, I'm actually writing 35,000 different herbs seeding the algorithm that writes 35,000 of them each one, that is exactly what one person is interested in, and maybe that gets premium for a while until again, they get replaced. That's, that's a definite that definitely feels really valuable. And, you know, anytime you're talking about AGI, you can imagine that event horizon where you just can't model any thing that happens after we get to sufficiently powerful general intelligence, as long as it's sufficiently good at persuasion, which I think is one of the things that the AGI people, Ajay, researchers will potentially overestimate, maybe because they are very persuadable by by sufficiently rigorous logical arguments. So it feels like if something is, you know, like me argues like me and is way smarter than me and can can make a counterpoint any point that I make, then I should actually do what it says. Right? Or at least if I shouldn't do it, it says, at least everyone I know would be easily persuaded by this thing. So they'll all do it. It says, it's entirely possible that AGI just ends up being a nerd who gets ignored and has a bunch of really good ideas that don't actually get implemented. So there's there's that as maybe slight handbrake. But AGI is a tool where it's very smart, but doesn't have agency or can't really act. But sufficiently smart people who realize that smart can apply it to things they want to get done. That's, that's probably just for the average person functionally equivalent to malevolent AI. It isn't quite malevolent AI, but it's just, you know, someone who is sufficiently indifferent to them that they might as well be malevolent. And they also have AI. That's, that's a risk that has to be closer than actual AGI because it's, it's easier to implement than AGI. And so that's, that's one that I really worry about. But, yeah, AI is one of those topics where I pay more attention to the incremental advances, because it just, if you buy the singularity argument, and you buy the possibility of AGI modeling, what happens afterwards is almost meaningless. You can think about what your mental model is for when we are when we actually hit the hockey stick. And what do you do in the hopefully, weeks, not like hours, before everything completely changes. And that's kind of that's kind of worth doing. But again, it's sort of like if you're planning around a revolution, but you're in a country that you can't leave, then you sort of just want to be kind of ready for things to get weird and unpleasant.

Will Jarvis 52:14

Definitely, definitely. This next question, it's been a lifetime turn, but I am curious, your take on it. On average, should we have more cults in the world? And why?

Byrne Hobart 52:23

Sure. So I think that there's no, there's been a general decline in social trust. And there are a lot of big institutions that are just hard to hard to trust, because they have a lot of visibility, and there's a strong incentive to highlight their mistakes. And I think what's nice about cults and other small groups that they just don't have enough visibility to have added haters, and they might have enough visibility to have, you know, socially proximate haters. But that's actually more of a powerful unifying force where you know that these people think you're the out group, and therefore the other members are the in group. And, you know, solving coordination problems is really hard. And when when groups can do it, they can accomplish great things. And so I think that having more of these Lucas's of coordination can be really, really powerful. And yeah, we just have a, we have a shortage of civic engagement in the US, at least compared to where things were historically, it's something has to fill that gap. cults are obviously dangerous, and the cult term it has, it has broad applications. And there's, there's a whole spectrum of saltiness where, you know, one of the things is like, if a cult wins, it's not a cult anymore. It's something else. And it often gets, a lot of the weird stuff just slowly dissipates or gets ritualized and made a little bit more harmless. And you can sort of see echoes of it in in whatever that group practices but it's, it's not quite as crazy as it was initially. So when you're betting on culture, you don't you don't want to bet on cults that make you think of the word cult, you want to bet on things where you you look at this high functioning stable institution, and you go back in its early history, and you realize wow, that sounds a lot like a cold good thing. They're not like that anymore. So it's like it's a it's a good launchpad for other things. I wrote a piece a while ago, when when peloton was going public, were one of the lessons I asked was, is Palantir a cult, because I lived in the bay area for about six months. And I noticed that people I do a Dropbox, sometimes that Dropbox wax sometimes did not. And people I knew at Facebook sometimes did sometimes did and usually didn't buy them. But people who worked at Palantir always had their Palantir stuff. And it seemed like they did not actually own non Palantir clothing. So and they have kind of unusual corporate culture they spend, they work really hard, which means they spend a lot of time with other talented people. You know, it has a lot of these cult like things. And part of what I realized is that that is a very powerful motivating force that you have these groups of people who have a shared objective, and everyone else thinks they're weird, but they they know what their mission is. They're trying to accomplish it. And that seems like a powerful force.

Will Jarvis 54:50

Gotcha. So should more businesses, particularly startups, you know, perhaps try to be called?

Byrne Hobart 54:56

Yeah, yeah. And I think it's it's hard to fake on the other hand cults They can, they have to exist at that really uncertain stage where it, it could be cringe, it could be non cringe, and you're actually not sure yourself. Like you, you ideally want it to be the case where everyone is thinking to themselves, I bet other people think this is cringe, but I'm really into it. And that's not actually an observable trait. It's not observable that anyone that has that mental state, but that's kind of what you want to aim for. Because you do want, you want there to be enough enough stuff that define someone as a member of the group, that it's a sharp, meaningful distinction. And then not enough that it's actually self destructive.

Will Jarvis 55:36

Got it? Got it. No, that's wise. burnup got one last question here for you. What have you learned about business from the success of the death? And do you have any advice for someone who is like producing content or something like that on the internet? Yeah, so

Byrne Hobart 55:49

I would say in one sense, the diff was actually a failure, because the goal was right to do better for a while in order to stay in touch with people and find another job somewhere else. So in that sense, it did not work it it worked better than they thought it would. But yeah, it's, it did not accomplish its original goal. So I guess that's one thing is, don't be wedded to that original goal. You know, I think if someone starts a newsletter, trying to build a big subscriber base, and have ads and things, and then that ends up getting them a job at a company that never heard of, but that is really cool. And doing is like what they want to do, then that is also you know, a failure by its original metric, and then an ultimate success. So that's, that's one thing is, don't be don't be afraid of that kind of pivot and newsletters do have, they have this wonderful surface area expanding trait where you're in touch with a lot of people. At the point where I don't think there's anything I can write about where I know more than the best informed reader on that topic. So I'm always getting useful corrections, amplifications clarifications and things. And you know, sometimes, occasionally, that is just I got something totally wrong. And that's always very embarrassing. But there's often something where I'm speculating on why a company did x, and someone tells me Well, I was, you know, I was in the room when that decision was made, it wasn't X. But that was a concern, it was actually why. So that kind of feedback can be really interesting, and really powerful. And I've met a ton of people through the newsletter business, just through through writing about different companies and covering different topics. And so it's, it's a really good way to have a social network that is very closely attuned with your personal interests. So I highly recommend it as a just a part time side project for that reason that if you do one good post a month on something you're deeply interested in, then the right people will find you. And I think, within that category, there have been, it's very hard to predict success. This is one of the reasons I write a lot of posts. It's not it's not quite that the strategy is just to have an overwhelming amount of content, it's more like I am very bad at figuring out which posts will take off and which ones will not. There have been cases where I thought something was, you know, I would be interested in nobody else would be interested in turns out a lot of people were interested, like I recently wrote a piece on the Canadian economy and how Canada is structured a lot more like a developing country where you have these big oligopolies, and lots of capital flows from other places that are distorting the real estate market and lots of dependence on natural resources. And it actually turned out to be really popular on Twitter, and I got a lot of good feedback from it through email. So that was one that I was pleasantly surprised on. And then I've been unpleasantly surprised sometimes where I spend a ton of time writing about something that I think is just really deeply interesting, and should be known by a whole lot more people and nobody cares. But what I have found is that for those kinds of posts, where it's something you really care about, you're not sure if anyone else cares about Google is a wonderful thing. And people who are Googling a really odd collection, it will find keywords, they will find it and so there's a there's a piece that I that I wrote about voulons philosophy treating treating a lot of political movements as the Gnostic heresy, and I wrote about parallels between that and bubbles. And it not a lot of people read it, it's very long. Not a lot of people read it, but I think in terms of percentage of people who read it, and then told me that they want to get lunch with me the next time I'm in town, or they're in town, it's it's by far the winner. So that and some of that is is due to industry specific factors. So a fair number of people will go they major in philosophy, and then work and finance sources, not the only one and it's I think part of it is that if you look at GRE scores by major philosophy is actually second to physics usually or or third after math, but it's highest on verbal by far. So the subset of finance that is understanding the rules and understanding the loopholes and rules so things like there's a contract you know, CDs contract that says if a company defaults on its debt, you get X amount of money, if you can figure out something that is a default for the purpose of that contract, it is not a default for some other purpose. And the CDs contract is not price things as if that is a life possibility giving a lot of money, but you have to be strictly verbal, and you'd have to be the kind of person who is thinking a lot about the difference between what reality is and what can be expressed as words on a page, you know that these like deep metaphysical questions that also turn out to generate alpha. So finance does select for some of those people. And I don't know that you can play quite that game in other fields, in terms of writing things that hit that Venn diagram. But yeah, finding, you know, writing, I would say, if you are, in whatever industry you're in, if you write something about a company, that industry that is no longer in business, but was interesting, 30 years ago, is totally forgotten today, that kind of thing that people will eventually find it. And there are people who are researching that company, and if you can demonstrate that you really care. And you You found it as fascinating as they did, then those are probably people you wanna hang out with.

Will Jarvis 1:00:49

That's good. That's good. And do you have a 50 year plan for the Deaf? Is there? Is there you know, do you have great ambitions? Or what do you think?

Byrne Hobart 1:00:55

I don't have a 50 year plan I have I have nearer term plans than that. And a lot of them, you know, there's a business like this accumulates a lot of potential energy. So there are, you know, a lot of people who read it, and some of them subscribe. And so that is that is one source of revenue. But there are a lot of other things that you can do with a large contact list of people who are really interested in tech and finance. And if you have that, that group of people and a brand and a balance sheet, then there's a lot of really interesting stuff you can do. So yeah, there's there. I've thought a lot about different ways to make that happen.

Will Jarvis 1:01:34

Gotcha. Something to come. Well burn. Thank you so much for coming on the show. Where can people find you? Where should we send them?

Byrne Hobart 1:01:40

Sure. So best place look for me would be on the diffs site, which is the diff.co so please check it out. I'm also on Twitter. Awesome. Burn Hobart.

Unknown Speaker 1:01:51

Thanks, burn.

Byrne Hobart 1:01:53

You bet. Thanks.

William Jarvis 1:01:58

Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations, and live players. You can subscribe to Bismarck breeze at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcribed by https://otter.ai

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38

Well, Paul, how are you doing today?

Paul Morland 0:41

Very well. Thank you.

Will Jarvis 0:43

Excellent. Excellent. Well, thank you so much for taking the time to come on the show today. I really quite appreciate it. I know it's a beautiful day today in London. And I kept you up inside for for most of it here. Well, Paul, do you mind giving us a quick bio and some of the big ideas you're interested in?

Paul Morland 0:59

Sure. I am a Londoner by birth. In fact, I was born in a suburb and lived in a suburb of London. For my first 18 years, which is very famous in the UK. It's called Wembley, and it's very famous for its football. That's what you call soccer. A sport on which I have absolutely no interest. I married a woman from Wimbledon who's never been known to wield a tennis racket, but there you go. So I mean, that is relevant in a way because Wembley is one of the areas of the country that has experienced the most rapid demographic change. Suddenly, London one of the earliest. I studied in Oxford, a degree called politics, philosophy and economics and notorious degree which equips you for knowing everything about nothing, or is it nothing about everything? I don't know. It's very broad. It's a great education. But it's one of my tutors said it really only equips you to be a journalist. Not that I've ever been a journalist, I went into banking, I went back to Oxford to do a master's in international relations. And then I've been a consultant for the last a business consultant for the last nearly 30 years with my own business for the last 20, mostly in financial services, always thought I'd do a PhD when I retired. And then I had one very quiet year in 2008, when the markets turned down, and I thought, let's kick it off now. So I found the perfect supervisor, a chap called Eric Kaufman, I don't know if you've come across him, become a very good friend of mine. I wrote my thesis. He was actually in Harvard at the time, but then he came back 2009, we kicked it off. And that was published as an academic book, demographic engineering, population strategies and ethnic conflict. And it's essentially about how groups in conflict ethnicities in conflict, deploy demographic strategies. It was an academic book, it got some good academic reviews. But it turned to me at the time, that nobody had written a really good book on a general book on how demography had played out in the last 200 years how it affected history, and been affected by history. It's obviously part of the web of the historical process. It's an either a first cause nor purely sort of downstream effect it. So that was that was how I came to write the human tide, which was published in the States as well as the UK and has had eight or nine translations. Interesting, which countries choose to translate it countries generally with, with demographic issues like China, Japan, Korea, Italy, Estonia, some some slightly small audience languages, but nevertheless, it's an interesting, eclectic collection of languages. And then while I was writing that it occurred to me well, if history has been shaped by the big demographic processes, the births, the deaths, the population explosion, the population slumps, and the great movements, immigrations, emigrations, and so on, then it shaping our world today. And it's also going to shape the future. And that's how I came up with the idea of tomorrow's people, which has just been published in the UK doesn't have a US publisher yet, but is going to be published again in China, Japan, Korea initially. So maybe the sign that you have I haven't found a US publisher is indicative of the fact that demography is not yet too bad in the US. So just in terms of biography, the other point I would make, I suppose is I'm of German origin, both my parents were German immigrants to this country, and I'm a dual national I married I've got three children, they're all in their 20s and two of them are married. That's me.

Will Jarvis 4:39

Excellent. Excellent. Well, Paul, first, I want to jump off the outline and ask you a question. It's kind of a left hand question, but I think it's interesting, you know, how was it going back to get a PhD later in life, you know, 2008 we see most academics that go straight, from, you know, undergraduate to PhD programs, at least here in the States, maybe differently. Okay, do you think that gave you kind of a unique perspective on the world, having spent time in financial markets and seeing how the world kind of really works? And having that grounding?

Paul Morland 5:10

Well, for me, it was very well, I had no interest in doing going down the academic track. When I left Oxford in 1986, I had other interests. I did go back to do my Masters when I was very early married, and we had our first child. And that was a wonderful holiday from reality, it felt like it anyway. And then I went back into the real world, I had to earn a living academia is not particularly well paid in the UK. And besides, I felt very comfortable in the world of academia and wanted to push myself at that young age into a world of less comfort, I suppose. One of the great things that going late in life, I suppose there are two things I would say. The first is that you do have all those years of extra reading. And you have a breadth of perspective. I mean, it's kind of funny because Eric's a few years younger than me. So a few few academic advisors are PhD Advisors, a younger Eric's a few years younger. And Eric's own academic advisor, a chap called a theorist of nationalism called Antony Smith was a very good friend of mine. So quite a lot older than me, but a very good friend. So that was sort of slightly odd. And Anthony's supervisor was Ernest Gellner, very famous philosopher and anthropologist, so I feel I can link to that chain. But you just by the, you know, starting your PhD in your 40s, you if you're academically curious, you've met a lot of interesting people like Anthony, I'd spent years sort of sitting and talking to him, you read a lot of interesting books, and a lot has been going around in your head. So I expect you bring a certain maturity to it. And the other thing is that you have you been in the fine, I mean, London City of London is not so different from Wall Street, it's perhaps got a slightly less fearsome reputation. But if you're used to working at that kind of pace, then your approach to academia is very different. And it's like, right, this time, I'm going to do this chapter, and you write the chapter, you bounce it off your PhD supervisor, he gives you some comments, Eric, and I meet for lunch, we ever schmooze. I rewrite it. Another another term and other chapter. So I mean, it sounds a bit boastful, forgive me, but I did actually write my PhD thesis, I did the whole thing in three years, part time, so I was working at the same time, rarely five days a week, I often had a day like Friday, I would work on work on the research on a write up on the Sunday, but I got it done pretty quickly and pretty efficiently.

Will Jarvis 7:40

So it's something like, you know, if you bring, you know, Wall Street, or you know, your investment banking, kind of like work ethic, to academia, you can really crank through these things. He's like, man, we got the deadline, we're gonna go, where is it that we're focused from get the stuff?

Paul Morland 7:53

That was my approach, I didn't get lost in sort of soul searching for what's the meaning of meaning? And how do I get to write the next sentence?

Will Jarvis 8:01

Yeah, we've got this much time, we gotta get it done. I really liked that. And then it kind

Paul Morland 8:05

of business like approach to getting it published, you know, I only got it published. Because, you know, I asked around, and I used my connections and people I knew and, and similarly, then, when I was writing the just sort of amending it and creating it as a book very similar to PhD thesis, but you, you like you, you reduce the methodology section and so on. That was the time I thought, you know, maybe there's a market for another kind of book. So you, you kind of think in a in a slightly different way.

Will Jarvis 8:32

That makes sense. That makes sense. All right. I really like that. Well, back to demography. I find demography very interesting, because it seems like one of the few really solid predictors of the future we have. So if we look at, you know, total The fertility rate over time, we can kind of get a sense of where things are going and what things are going to look like, you know, how robust is demographic for graph forecasting? Is it fairly robust? Do you have a good idea of what's going to happen? I mean, I imagine we do barring like big events like Coronavirus, or plagues, pandemics wars.

Paul Morland 9:04

So, so certain things are there. First of all, you've got to accept the how question how good the data is. For more, as I say, I think maybe the last but most recent book, the more recent the more developed country, the better the data. So the our guess of how many people were born and died in Denmark last year, is going to be close to decimal points, right? What was the migration into Botswana in 1952? It's gonna be a finger in the air. So you've got to be a little bit skeptical about data historically, of course, you're talking about forecasts, but there still are parts of the world where it's not great. So people debate really big issues like just how low is the Chinese fertility rates, partly because it's a huge country. It developed very well but it's not not got sort of Danish levels of development, and communist parties had various agenda first of all, to show that it's over, there's a real problem then to show that the one child policy is working, then to not be too alarmist, that is working too well. And so you've got to take all these things with a little bit of pinch of salt. But I think the rates, so most of these things you can predict. So short of a disaster, like we know, in 50 years, how many native born Italians there are going to be right, more or less, because in a country like Italy, to the age of 50, the mortality rates very, very low. I mean, it could be a little lower, it could be a little higher, but most people under 50, are not going to die if they had been born. Of course, they could move out so they could cease to be Italians, there could be immigrants moving in, and they could be assimilated, so they could become Italian. So it's not going to answer that sort of question. And the other thing is, as you said, there are always shocks to the system, there could be a pandemic, which puts COVID 19 into the shade. And we could end up with, you know, half the cohort of Italians born last year, dead at 20. So it's not absolutely cast iron. But it's, you know, if you were gonna say how big is the Italian economy going to be in 50 years time, versus how big is the Italian population going to be in 50 years time, we have a much better idea, because fertility and mortality are better understood. Now, of course, the other question is, where will they go? So where will Italian fertility be in 50 years time? That's another question. And people do forecast that, and perhaps we'll come on to talk about that. I think in terms of the world today, the really, really big question is how fast is African fertility going to fall so outside Sub Saharan Africa, almost every country either has low fertility, or rapidly declining fertility, and in that part of the world, as things stand at the moment, our best guess is that not going to go back up to replacement, how low how fast it will fall, and so on. But basically, we can see that coming almost everywhere. Even India is now moving to sub replacement. But in Sub Saharan Africa, there's a very mixed picture, you've got South Africa, which has got a relatively low fertility rate already. And then you've got countries like Kenya and Ethiopia where it's high, but coming down fairly rapidly, Nigeria barely seems to be falling. So that's the big or no. So we can you know, with providing the data's okay, we can say in 50 years time, how many 50 year old Nigerians they'll be, but it's really difficult to know how many Nigerians are going to be born in 50 years time.

Will Jarvis 12:39

That makes sense. I want to talk about Sub Saharan Africa. You know, what's your sense of fertility, fertility is going to drop in Sub Saharan Africa fairly quickly, or do you think it's continued to stay high?

Paul Morland 12:51

Well, as I say, that is the great question. That is the great demographic question of the day. And there are various books that have been written recently, with very different views on that. youthquake, by Edward Pais being one of the more recent empty planet from a couple of years ago. As part of writing tomorrow's people, my intention had been to get on the road. So I haven't been to Sub Saharan Africa since I went camping in Mali in 1990. So I really felt I needed to go out and speak to people use my eyes, but also go and see local demographers and get a sense of what's going on. I think the picture is very, very patchy and it will be patchy. I think there are going to be countries where it comes down really slowly. And there are going to be countries that continue to surprise us. And you can kind of name those command Uganda, for example, it was cut it was they actually had a pro natalist government, which is quite unusual. But that's changed. And now it's starting to come down fast. East Africa is generally coming down quicker than West Africa, most of southern Africans already come now. I think it's really important that people realize, however, that first of all these countries are way off replacement level. So the way way higher than replacement level. And it's a long time before any of them was that Southern Africa is perhaps there already, but a lot of them are not going to get to replacement level for a long time. The other thing is, and I think this is generally not understood, your population doesn't stop growing. When you get to replacement level. It means long term it will stop growing Britain went sub replacement in about 1972. So here we are 50 years later, and only in the next few years, are we going to have more deaths than births. So to get migration, obviously, you can always top up with migrants as a given. But it's taken us 50 years and the reason is that in 1970, women started having fewer than two children or 2.1. But there were so many young women from the baby boom and relative to the population pyramid that will view old people because they had been a smaller cohort dying so you even if the way Then we're having fewer children. There were still more people being born with a sub replacement fertility rate than there were people dying. So you continue to get so Africa has got decades of organic, natural population growth in the works. Even if tomorrow, every African country went to a 2.1 fertility rate,

Will Jarvis 15:21

but lag, it likes a lot. That makes a lot of sense. What's your sense about why as countries develop, you know, fertility, it's like this almost law of nature that it drops.

Paul Morland 15:34

Again, there's a really interesting debate on this. And you know, I think one of the reasons I write my books is there's loads of quite intricate debates about is the driver education is the driver urbanization, he, there's a lot of minutiae, which is interesting to academics, but I think you can not skirt over but you can synthesize, I mean, the three things that do seem to drive lower fertility rates, or have done historically, our education, particularly for women, urbanization, and a rise in income levels. And you can see why each of these works in an urban environment, you can actually invest in a child, you're more likely to have access to education, that child is more likely to be able to benefit from that education. If you invest in that child, that child can bring in very significant returns. I mean, this is an economic argument, whereas the extra pair of hands in the village is always useful. So that's sort of the urbanization route. In terms of education, I think we can all see I mean, those of us who have traveled in places where people are not educated, and not able to take control of their fertility, whether they want more children or not, they don't really have the means to control it with education comes the means to control your fertility and very often for women the opportunity to do other things, and those two things are associated with the rise in income. What I talked about in my most recent book, though, is what I call postmodern fertility, our postmodern demography. So what I call pre modern is the world of Malthus, the people breathing like rabbits dying like flies, and that was the world generally, of course, Malthus came on in his later works to look at actually how that there it and how fertility was controlled, and they had later marriages here and they involve themselves, they committed infanticide there and so on. But broadly, fertility rates were very, very high, and life expectancy was very, very short, almost everywhere, then you get what I call modern demography, which is the transition we've just talked about, to urbanization and to more education and to higher incomes, and over time, fertility and first of all, mortality comes down and populations boom, and then fertility falls and a larger population starts to stabilize. Now, what I call post modern fertility, or post modern demography is a world where everybody is aspiring to long life expectancy. And generally, life expectancy is long. I mean, places like India now are heading for a life expectancy of 70. You know, we are in a different way than that, it'll get up to 80. But the great gains in in life expectancy are being made in countries where it's shortest, and everyone's getting up to those kinds of levels of life expectancy. So shorter pandemic, that's not that interesting. What's really interesting is fertility. And there, what's starting to happen is the economics. Whereas in the modern period economics and economic development row that drop in fertility, what we're seeing now is fertility is driven more by value. So there are some really interesting cases of this compare fertility in Vermont and Montana, for example, look at the fertility of Trump voters versus people who voted Democrat. And those are huge, but you know, that's half a child or three quarters of a child, it's quite interesting. And that's not about income, that's about values. That's about beliefs, that's about lifestyles. Then you have the more extreme cases of, to some extent, Mormons not so much now, but Amish, Haredi Jews, and then Israel is a very interesting exception, because it's a very urban, very educated and very wealthy country. And in Israel, the fertility rate is three, which is the only OECD country with a above replacement fertility rate, and it's significantly above replacement. And actually, that's there aren't enough ultra orthodox Jews or Arabs in Israel to make that the case if you actually look at secular people, they have large families. So you know, again, you can get into a very interesting debate about why that is and what's driving it, but it's all about value is it's no longer about where you are. So what I'd say it's 1970 Tell me the urbanization, the income rate, and the percentage of girls who complete high school and I will tell you the total fertility rate roughly broadly, that's going to break down as we move into a postmodern era, where even quite poor countries like Thailand than and Morocco are leapfrogging in their demography, even ahead of their economics and getting quite long life expectancy, quite low fertility rates, and, of course, much better survival among children and low mortality. So in the late phase of modernity, for countries like Morocco and Thailand or, or Sri Lanka, people erase even ahead of their economic progress, they're racing to lower fertility and longer life expectancy. And then in the postmodern world, it's going to be about religion, and ideology and nationalism, versus a more liberal worldview. And that is going to be what drives fertility rates.

Will Jarvis 20:39

That makes sense. I am curious about this, this demographic explosion in Sub Saharan Africa. You know, there's a lot of talk about, you know, migration problems in Europe, like, just recently, this wasn't a big story here at all. So I mentioned it for the listeners. But you know, the Russian President brought a bunch of migrants over to the border with Poland, that was a big story in Europe, what I understand, it seems like that, that comes only gonna get worse than the migrant crisis, as the population explodes in Sub Saharan Africa, and people go to sleep more opportunity in developed countries in Europe. Do you see this problem getting any better? Or is it kind of like, at what it looks like? It's just gonna be a very large problem that you're gonna have to deal with?

Paul Morland 21:23

Well, I mean, first of all, I think you have to qualify the word problem. So there are people in Western Europe who think it's a wonderful thing. And the more immigrants we have, the better. And there are people who don't believe that, if you think that mass migration is not a great thing, and that very rapid demographic and ethnic change in Western Europe is not a great thing that it is a problem. But what is driving it? Well, you've got to see both sides of the equation. So on the one hand, you have this very high fertility rate in Africa, that's not new, by the way, what's new is the survival rates, what's new is going back 50 or 100 years, a third of kids were dying before they got to the age of one, most kids never got to the age old adolescents and having their own children. So you keep those high fertility rates, but the mortality rate goes down, you have a population explosion. So that's the key kind of demographic trend, because they have, they may not have great lives, and they may not have great incomes, but they have clear, better cleaner water, a little bit of medicine, quite, it's a kind of 8020 thing. It's a curve, whereby when you start to get some of these things, the impact on infant mortality is very unlikely, very, very strong. So that and then the incremental gains for countries like the US and the UK are much smaller, in terms of life expectancy. So we've got these booming populations, because of falling infant mortality, and general extension of life expectancy. We have the problem of many African countries in absorbing those people into their workforces. It's not universal, and some countries are more successful than others. And I think there will be stars in Africa, and there will be basket cases. And we can already see it already today, you could categorize countries by their successes and failures. But certain countries are going to struggle economically, and also struggle to get that fertility rate under control. Some countries will go through what's known as the demographic dividend where you start to get the fertility rate down. And then you have a big cohort of people in their late teens and early 20s, entering the workforce, not necessarily burdened with huge families. The fact that they're not having big families itself a suggestion that they're taking more control of their fertility, that they're better educated. And very often, that's the time you have a great economic boom. I mean, Indonesia is a good guy. I've done some work in Indonesia in the last few years. That's a good case where you you started to get fertility rates down significantly 20 or so years ago, 2030 years ago, and you can see the effects of lots of young people in the workplace, I'm able to move into a global market. So some countries will succeed and some countries won't in Africa, then in terms of Europe, we have to think of the huge demand we're going to have for labor, because we as I said, we've had 50 years of sub replacement fertility in the UK. And we've had a huge amount of immigration. When I started working in the 1980s. There were roughly two people in their early 20s For every person in their early 60s. So of course people can people can start work a bit later a bit earlier and retire earlier later. But all other things being equal. We had two entrance for every Exeter now the two are roughly balanced, and that balance is going to get worse and worse. So we're going to have a big demand for labor question, do we try and get our fertility rate up? Do we try and get immigration if we get immigration? Can we control that immigration anyway? Where do we want it to come from? Can we get it from countries where people are sufficiently educated that they start making a contribution on day one? I'm what how determined are weak to control our borders? And then there's a technological question which kind of beyond my paygrade as it were, but a very interesting one where demography meets technology, and the rise of the robots is all the robots ready before the people run out if you like. So, you know, I read all these lovely things about robots. But when I have a, an electrical problem, or a plumbing problem, or my lawn needs cutting, well, I cut my own lawn, or I can't do my own plumbing. But you know, it's lovely to hear about all these fantastic innovations. But is there someone who's gonna fix my dripping tap? Or is there a robot? Who can do it? Or do I need a person out there, or if you've got a parent in an old age home, is there really a robot who's going to take that person to the toilet. So if I look around the shortages of labor at the moment, we have got shortages of labor in the UK, I don't see tomorrow, these problems going to be fixed by technology. And you know, maybe someone will put for example, if we got self driving cars, that would release a huge amount of labor, a lot of people driving taxis and minicabs, or tanker drive and so on. But I even that's the most obvious and famous case of where labor is going to be substituted. But I don't know if that's going to be feasible in five years, or in 30 years. So for today, and for the force. And that's, that's something as I say, which is, we all know is going to be replaceable with someone who can really do the weeding in my garden, or really cut my lawn. I mean, I've heard about, you know, technological solutions to lawn cutting, but I've never seen one. And so I've also got a house in a relatively remote corner of France. And they're they don't have huge depopulation. But again, if you want a plumber or an electrician, you struggle now if those people have been having three or four children 3020 3040 years ago, and France is far from the worst fertility rate in Europe, by the way, then those people wouldn't be there. They're not they're

Will Jarvis 27:04

definitely that way. And just, you know, I work in tech, and I think it's a ways off. You know, we talked to a Facebook automation robotics researcher a couple of months ago, and he's like, it's much farther off than you think. So,

Paul Morland 27:18

yeah, I might have to be waiting with a dripping tap for a long time. If I'm waiting for a robot. I have to wait a while and the weeds are gonna get completely out of control. Right. Exactly.

Will Jarvis 27:28

Exactly. I'm curious. We've seen a lot of countries try to increase their their fertility rate, you know, most notably, Hungary is the big case we hear about in Europe all the time, whereby I'm trying to increase the fertility rate. Is your sense that any of these interventions work? Is there are there things we can do like policy interventions we can try that you think will actually increase fertility rate?

Paul Morland 27:54

Governments have been very successful at reducing fertility rates, but I always say they're working with the direction of history. Gotcha. So if your population is getting more and more educated and rich, then if you help popularize and make available contraception that will bring the fertility rate down, whether the government action did it or the general process of history. So that's clear, we know another most draconian China had a one child policy, which by the way, I think was completely unnecessary, because fertility was all were already falling very fast in China in the 70s. And other countries in East Asia saw big falls in fertility without that kind of coercion. So that's kind of on the way down now on the way up. The jury's out a bit. But generally, I think we can say a number of things. One is, at best, these things are only modestly successful. And secondly, but they are going to cost quite a lot of money to have a big effect. So there's a classic case in Hungary, where the Hungarian government has given subsidies for third children, and the fertility rate did go up. But it seemed mostly to be first and second children who are being born not third children. So there's always this kind of question about causality. In Russia, the fertility rate did rise, but it's sunk back again. Now, there's something there's another technicality, I don't want to bore you. But I'll sort of briefly briefly it's called the tempo effect, which is that when women have children when we're going through a period when women are delaying their childbearing, fertility looks depressed, and then when they cease delaying it, it bounces back a bit. What you really what's really interesting is to compare the completed fertility of cohorts. So let's look at the women born in 1940, versus the women born in 1960. And that's a done deal, right? I've got a friend who had a baby, her fourth baby in her early 50s, but very, very unusual. So we can we can we can didn't say women born in the seventh in 1970 Compared to when completed for timber that's very backward looking. The way fertility rates are calculated year by year, it's just a look at the number of kids born, the number of women who are fertile and say, okay, that many women have that many children in a given year, then over a fertile lifestyle that I thought lifetime, that's what the fertility rate would be. And so when women are delaying their childbearing, that looks a bit lower than they catch up later. And the thing bounces up a little bit. So it's also difficult with Hungary and Russia, which of the most famous cases of pro NATO policies to be sure whether there's been a little bit of that going on, or there's actually a result of policy. But what is absolutely clear, is that where there has been an attempt to do this, even where there's been some success, we've got nowhere near replacement levels a maybe Russia went up to 1.7. And it's back down at 1.5. I don't think Hungary even got anywhere near there. So the policies that have been tried so far, have not succeeded. And I don't think there's a magic bullet. And I very strongly believe that it's going to be about values. And what I see among I think you call them generation Zed in a male Generation Z. So I've got three kids in their 20s, but the youngest is 23. So what I see among his friends, in terms of their social attitudes, I don't think that correlates with large family size, I don't think it correlates with what we would have considered a traditional lifestyle, which we associate with high fertility. So I think in some communities, they do have those values. Now, those communities are very small. But it's like the late that the you know, the puddle that doubles every hour or something, you don't notice it until quite late, it's gonna be a long time, at a national level between before Haredi Jews and America are a huge number. If you're sitting in parts of New York, Brooklyn, Williamsburg, curious, you're all or wherever you're going to notice it. But if you're nationally, it barely showing up in the numbers. But if they keep certain groups with certain values, keep number one, keep those values and retain high fertility, which is known by naming certain and number two, of course, are able to retain within the flock the vast majority of children born, then that's what's going to turbocharge fertility rates, I think governments can do their best. But I think governments would probably do best thinking carefully about value, and how they can affect values. Rather than thinking about let's throw a load of money.

Will Jarvis 32:44

That's, that's really, that's really an interesting observation. Because they're definitely better at throwing money at things and changing values seems. What do you think? Are these values? Is it is it you know, these quote unquote, family values, you know, conservative politicians love to talk about in the US, is it, you know, encouraging people just to settle down, you know, get married, things like that? What's your sense of that?

Paul Morland 33:06

Well, it was interesting. I was on a TV show last week, and there was a woman on it young woman, and we were talking about this very subject. And she said, well, at the moment, there's no incentive to have children. And I thought, I mean, I didn't want to argue with that, too. We talked about incentives. I thought if we had needed government incentives to have children, we would not be here, right? When I think of the circumstances under which my parents were born, and my grandparents were born, and even when I was born, you know, the shadow of nuclear war and the Cuban Missile Crisis, not very far behind, because everyone was massively poorer than they are now. So that's why I do think it is about about values and priorities. And I'm not trying to preach, I'm just trying to explain to people what the consequences are. So where we are today. Those values are the values that produce high fertility rates. Oh, what you could criticize is patriarchal and old fashioned. However, there's two nuances. Number one, the worst fertility rates are in countries where women are given an education, and they're not encouraged to enter the workforce and combine that with with parenthood. And actually, you found that countries are quite progressive in helping women into the workforce and combining childbearing with with careers, like the Scandinavian countries, and to an extent the UK and France have for a long time had higher fertility rates than more traditional countries, like Italy and Greece where yes, the girl goes to university, but maybe she gets discrimination in the workforce, what workplace or Japan's another case, but she's certainly not encouraged to combine motherhood with with a career so I you know, there's that nuance and I think from And that nuances, the second point I wanted to make, which is, if people want to reproduce the kind of liberal societies that most of us quite like living in, we're going to have to find a way to talk about these things. And to do so and to and to create a sort of ideological space, which is both liberal and pro child. Now, clearly, that's going to have a lot to do with men stepping up to the plate, which, you know, I did my very fair share of nappy changing, I may well have changed more nappies than my wife did. I do know, we weren't counting, but you're often fertility rates per woman. And that's because it's very easy to associate a child with a woman and therefore, we start talking about women as if it's all their job, which it absolutely isn't. So I think I think we've got a cry, kind of create a prune natal liberalism, if we don't want all the all the pronatal ism to exist in fairly patriarchal, religious and closed communities. Well, and

Will Jarvis 36:06

you bring up a really good point there, which is, you know, demographics. You know, the fertility rate now is the politics of the future. And that, you know, if we think of democracies is essentially judging the the weighing the number of people that have certain opinions, if people with certain opinions are reproducing more, and they have some genetic predisposition disposition, even if it's slight to a certain political belief, or whatever, you know, they will win out in the end, is that is that a wild assumption? Do you think that's correct?

Paul Morland 36:37

Well, I mean, the most famous book on this subject is by my friend, Eric Carlson, which you may know, which is shall the religious inherit the Earth, which he wrote back about 10 years ago. And I mean, Eric has been a huge influence on me. The other thing that Eric has pointed out to me, which I wasn't aware of is that there seems to be and I think it's quite early, I don't think this is absolutely established. But there seems to be a pro natal gene, or a genetic tendency to be prenatal to like children. Now, the reason that, you'd say, well, that would have come to the fore historically, but of course, people couldn't control this stuff historically. So it was kind of irrelevant, more or less irrelevant, historically. And so we didn't select people on that basis. Now that we have choice, we haven't had that many generations where we've had choice. Now that we have choice, it could be that what we're going to see is the people with the anti natal genes, breeding themselves out of history effectively, and people who are pro Natal, having larger families, and obviously, those genes will continue, and then eventually, you could end up with a much more pro natal community. Now, what I have no idea about is whether there's an association of those genes, with what we're told is, and again, this is a little bit beyond my area of expertise. You know, we're told that there are genetic dispositions, which Dr. Want to predict particular political perspectives conservative or liberal in American, the American set. So you kind of suspect that the prenatal gene might go along with a bundle of conservative attitudes, because places like Montana, have bigger have higher fertility rates and Vermont and Trump voters, though, to have larger families than Hillary Clinton or Biden's so you could see that a tendency in that direction. I do think we need to be careful though, you know, this term demography is destiny. It's sort of suits my book as it were. But I don't want to over claim for demography. And the thing I always say about how important I think it really is. But it can't possibly be the only thing. So imagine someone gave me a total description of the demography of the world in 1920. Right, right. Therefore, you predict Hitler World War Two, a holocaust. I mean, it's nonsense obviously isn't right. So if cut perfect demographic knowledge at time t does not allow you to predict the world time t plus tell you suddenly tell you interesting things about what the world will be like like in 1920. You might have said, Oh, my goodness, fertility rates in Germany are really falling and they haven't fallen yet in Russia. The manpower difference is going to be really big. So these countries end up in a war in 20 years time, the Germans are going to complain that the Russians keep coming and coming. So there are certainly things you can predict. And looking back, of course, you can see what the historical links are to what's happened demographically, but overclaiming and thinking demography is the only factor is shown up as as ridiculous as I say by this point I'm making that at time t I have perfect demographic knowledge. What can I predict at t plus one something but very far from everything.

Will Jarvis 39:59

Absolute That's an important thing. But it's not the only thing. That's, that's a good thing to keep in mind. Yeah, absolutely. So, Paul, I'm curious, what's next for you, you've just got this new book that was released. I want to point the back. But but you know, what do you want to look into next with demography? Or is it something else?

Paul Morland 40:17

Well, I've got another three books on in mind, although I haven't got publishers for them. And they're not written, but I like to think I'll have something to do my duty. So I would like to write a book, which is like a summary of the human tide and tomorrow's people, but a purely British book. So it says, Okay, where was Britain's demography in 1920? Say, Go for 100 years, look at the life of our queen, who's now in her mid 90s? And say, how did that change over the years tell that story? So that would be like the human tide, but but in much more detail about the UK? And then say, All right, so how is this shaping the UK that we now experience in terms of its aging, in terms of what we expect the state to do the support of? You know, for pensions and health care? How is that affecting the macro economy? Because I, I talk about gray capital and gray labor. So we've got old workers. And if most of the money is held by people who aren't very safe investments, how does that drive the economy and force the government to step in and sort of take on a sort of perpetual Keynesian role, though? They're also plus the multiracialism of the UK, the massive change in ethnic demography, the growth of minorities? How's that all? So what's the story past? And then how is that all playing out? So that's one idea I've got. And I think there's a book to be written like that for the United States. But I would leave that to a, you know, I just don't have the, the hands on experience, you can write a big book about the world because no one lives everywhere. And you can write about your own country. But I would, I would hesitate to do that about the US. And if I did it about the US, I think I'd have to, you know, move over and live somewhere in America for some time. So that's one idea. Another idea I've got is, is I like this term, I've used it here and there, the inner Fertile Crescent. So you can walk from Singapore to Spain, and only walk on countries where the fertility rate is replacement or sub replacement. And that's all moving in that direction. So I think that just focuses on this question of where is fertility low? Is that the future of humanity? Is everyone going to get there eventually? Why is it happening? And what are the consequences? So really getting to that level, because as I said, I think the mortality questions ceasing to be that interesting, everyone's getting to Denmark, as I say, in the book, you know, and then the latest book in demographically, everyone's getting to Denmark, but in terms of life expectancy, and the biggest gains have been made in the worst country. So we're all going to live to 70 or 80. And then it will incrementally move beyond that. So fertility is where the story is at, and really understanding how universal it's going to be, and who's bucking the trend. And why this issue of valleys I'd like to get into that a little more in detail. And then I've got a sort of slightly Maverick idea up my sleeve, which is a book purely about the demography of the Israel Arab conflict, for which I've got a very good title so far, but I'm not sure everyone will get it, which is Genesis, Exodus and numbers, the struggle for demographic mastery in the Holy Land, that's a good title doesn't necessarily make a good book. So I mean, that's a particular interest of mine. And I would like to go and research that and spend some time on it. But whether I like to admit whether I'll ever get around to an idea. And so those are three ideas I've got at the moment. And I think you should always have the idea of the next three books by the time I've written them. If I'm still alive, there might be another three up nicely

Will Jarvis 44:06

off that ball. Well, I've only got one more big question for you before I let you go this morning. I'm curious, it seems to me like on long enough timescales, we will bounce out of this, you know, low fertility thing, right? Because there will be some group, maybe it's the religious people made somebody else that you know, does have some innate, like propensity to have more children, that will start to become more of the population and it just bounces in my right to assume that or, you know, is it like some other fact about, you know, economics or the shape of the world now, that will keep us from doing that?

Paul Morland 44:41

Well, that is the big question. I think. There are two views on that. And, you know, we there's a kind of Francis Fukuyama view of history, which you know, I've got a lot of time for Francis Fukuyama, but he's a very interesting thinker, but his view that we were all going to become like a Um, I don't know, like Denmark or like a monitor, you know, we're all going to be liberal, we're all going to be Western. It had its day in the 90s, didn't it. And then we got some nasty surprises with with 911 with all the problems that have kicked off in the Middle East, and now, Russia and Ukraine, it's not the world that we predicted. And in many ways, that's extremely disappointing. I mean, it's very, very disappointing. I'm very disappointed that Russia is not what we consider a normal western country. In other words, that it hasn't got demography, it hasn't got liberalism, whatever that meant means in the specific context. So you know, Japan is a liberal democracy, but it's not a carbon copy of Denmark, American. So how even the idea is, can a culture kind of civilization incorporate these ideas remain true to itself, and yet fit into the kind of global order and norms that most of us would like to see. So we've been a bit disappointed on that score. So bringing it back to demography, it could be that everyone is heading for this, I'm pretty sure short of a disaster, we will all get get to long life expectancy. And there are some wobbles there, you know, there's the depths of despair in the US, and how far is it going to go? Let's assume we're not going to move to people living for 500 years and magic cures and reversing aging, that could change a lot. But let's just keep in the science are not the sort of science fiction and all that I dismissed the science fiction, but I just don't know. But let's assume, then we could imagine, you know, there could be parts of the world where we get a life expectancy in the mid 80s. And it retreats a bit. And then it goes forward a bit. We've had a few wobbles in the UK in terms of life expectancy, and you've had them in the US, you know, as you get towards the frontier, it's not all going to be plain sailing, but most of the world is going to move towards that kind of 80 ish life expectancy plus, so all we'd say, I think that's in the bag. So then the question, which is your question is, are we going to move towards every body being sub replacement fertility or not? Now, one way you could look at this is to say always surprises us, who ends up with low fertility. In my book, The Human tide, I quote The French saying the germ in the 19, Solenn, late 19th century, the German woman is perennially fertile, the Teuton produces work child after child, and they pressed down on us in 1870, and all that. So we know now that Germans have very low fertility rates for a long time. And you can find similar things in Germany about 15 years later, saying, Oh, the Slavic woman with endless fertility. And we know that Russia has a very low and actually every Slovak Slavic country, you know, from Russia, to Bulgaria, to Poland, they all and south, south slobs, that former Yugoslavia, they've all got really, really low fertility. So that was a fantasy. Who would have guessed, I mean, I'm old enough to remember when Chinese families were quite large, Italian Catholic families were large, you know, Italian mama with her. That's all history. And so there's that point of view that says everyone gets there eventually, India now a country where, you know, we were having five or six kids not that long ago, has got down to replacement level and in urban areas, and it's very, very low. So it's even even Germany from the perspective of 19th century France, or Russia, or China or India is going through this, then where where isn't going to go through this? And why would Sub Saharan Africa be any different? Now there's a really interesting theory about why sub Sahara might be different. And that is that in most countries, there has been historically a shortage of land, and they've lived in mouth using conditions. So in China, they were constantly pushing up against this. And as late as the 20s, there was a lot of infanticide in China. And although they had big families in China, there was a sort of anti natal culture lurking there, because they were always pushing up the back against the boundaries of what could be produced. And eventually you get to very low fertility, whether enforced by the government or not. What's unusual about Africa is its sheer size, its Condor population, partly perhaps because of the slave trade, the idea that for centuries, Arabs were skimming millions of Africans and then eventually Europeans on a mass scale taking off. So there was a shortage of people, and that there could be a genuinely pro natal culture in Africa that maybe doesn't disappear. Maybe takes longer to go, you're an African women could be the last repositories of pronatal ism and a sort of lesson to the rest of us in not giving up on humanity. So So and again, it sounds like I'm preaching, I don't think we should have six. But I mean, three has suited me very well. And three is a kind of two or three is a very sensible number that allows a country to grow gradually. We haven't, of course, talked about the environmental issues. That's another, another story. So so there is a view that we're all going to get to Denmark. And there's another view that Fukuyama was wrong on politics, and that there are going to be islands of surprises. Africa, May, there may be islands with Africa, areas with Africa that retain high fertility, and in the developed world, we're seeing these today, very small communities, Haredi Jews, Amish, to some extent, Mormons still quite small. What could that be a harbinger of something for the future?

What do I believe I tend to be a sort of empty Fukuyama list on this, I think we will get a surprise. And the surprises won't be where we expect them. I suppose they wouldn't be surprises if we did expect them. But I think we'll never quite know where the next little pro natal Island is going to crop up. And against a background of generally low fertility, these islands are going to be even more powerful and effective and numerically important than they would otherwise be.

Will Jarvis 51:21

That's great. That's great. Paul, thank you so much for taking the time today. Where can people find the book? Where should we send them to pick up a copy?

Paul Morland 51:28

So the human tide is on Amazon, both in the UK and the US? As I said, I don't have a publisher yet for tomorrow's people. It is in the US. So it's on amazon.co.uk. So if you want to buy it in the States, I believe you can access it there.

Will Jarvis 51:45

Excellent. Well, thank you so much. I appreciate you taking the time to come on.

Paul Morland 51:49

Thanks for your time. Lovely to speak to you.

William Jarvis 51:56

Thanks for listening. We'll be back next week with a new episode of narratives.

Transcribed by https://otter.ai

Transcript:Will Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38

Well, Arpit, how are you doing this afternoon?

Arpit Gupta 0:40

I'm doing very well. Thanks for having me on.

Will Jarvis 0:43

Absolutely. Absolutely. And just for the listeners, we've also got Lars to say on as well, again to talk to Arpit Arpit. Do you mind giving us a brief bio in some of the big ideas you're interested in?

Arpit Gupta 0:55

Absolute Absolutely. So I am a financial economists, system professor of finance at NYU Stern School of Business. And I primarily study real estate economics, urban economics, real estate finance. And by way of background, I got my PhD at Columbia. So stick around New York City for a little bit. And a lot of my interests relate to trying to think about how Housing and Urban Economics impacts people and impacts the communities that they live in. So a lot of my dissertation and PhD work was thinking about the consequences of the financial crisis, and the impacts particularly on households. More recently, I've been thinking about remote work, and other aspects of housing and urban design, thinking about the role of infrastructure and thinking about the role of property taxes as well.

Will Jarvis 1:45

Excellent, excellent. I want to get started just talking about housing costs in the US. I think it's, you know, something a lot of people talk about, but there's been this explosion of housing costs, that seems since the 1970s. Can you talk a little bit about about why that is what's going on, and and maybe some what we can do about it?

Arpit Gupta 2:04

Absolutely. So I sort of separate the problem into two. So there is an increase in rents, and there's an increase in prices. And the difference between the two is basically going to be the price to rent ratio, the evaluation multiple applied to real estate. So both of those I think are interesting questions, the evaluation, part of it, I think, relates to issues that we also see in other asset classes, basically, valuation multiples have increased across a range of different assets. Part of that, I think, has to do with the decline in interest rates. So we've had a pretty strong decrease in tenure bond yields, for instance, between 1970 1980 and today. And so that inflates the value in terms of prices of a lot of athletes. But we've also seen increases in rents, sort of the fundamental cash flows. And that I think, is determined by a combination of demand and supply side factors. So on the demand side, you have a lot of forces that are pushing people to live closer to each other. And in particular, near the center of cities, I think particularly a lot of industries that require agglomeration effects, and in person historically, in person contact, like the tech industry, financial services, a lot of these other so called skilled service sectors, require people to be pushed together more closely, and the centres of cities, and that's pushing up housing costs, particularly in those metropolitan areas. At the same time, we've had a lot of difficulties extending supply, a lot of which has to do with regulatory and other constraints on growth, that are kind of coming from hyperlocal restrictions on our ability to construct new housing. And that's really restrained the supply of housing also, on kind of a bigger macro level, there's also the issue that construction as an industry has, it seems one of the lowest productivity growth rates of any industry. And so our ability to construct new housing at all levels, whether we're talking about the multifamily stock that is increasingly constrained in density centers, or even the single family stock further away out in the Serbs, faces a lot of fundamental challenges in terms of our ability to just produce more of these units for a given set of inputs,

Lars Doucet 4:11

how much of the kind of lack of productivity growth and construction is related to basically regulatory costs, like paperwork, red tape, you know, denials, delays, versus just the cost of wood and bricks and concrete sort of thing. And can you even separate those things?

Arpit Gupta 4:31

Practically speaking? That's a really great question. And I certainly don't have the exact breakdown and the answer. My suspicion is that it has a good deal to do with that. And some reasons, I think, to suspect that the regulatory restrictions on housing broadly and so there I would include not just the zoning restrictions, right, the difficulty in converting a single family to multifamily building, but also the building code restrictions. The fact that we have a very constrained envelope But what's permissible to build seems to force developers to build that sort of a lower scale than they would sort of optimally prefer, and to be a little bit more spatially selective in the markets that they're willing to cover. And all of that sort of adds up to an industry that just isn't able to achieve the scale of production, that's really optimal for boosting productivity growth. You also see in other countries, and European countries, for example, that have a lot more prefabrication in their construction mix. So for example, the Elon Musk factory in Germany, the Berlin factory was largely prefabricated, meaning that they constructed and assemble constructed a lot of the units off site and assemble them. At the factory site, that sort of thing is more common in other countries and is, seems relatively uncommon, the United States, we actually used to do a lot of manufactured housing, the United States that we don't do any more. So I think all those things sort of hint at the idea that there are restrictions on our productivity growth that are coming from something about the building process that we're imposing, but I don't have a exact breakdown of that for you.

Will Jarvis 6:09

What's your sense of why we don't build as many modular homes here in the US are prefabricated? Is it just the regulatory burden? Or is it something else?

Arpit Gupta 6:17

It's a really good question. I think part of it is exactly this difficulty in passing regulatory muster. I think there are possibly other demand side factors that make it more challenging as well. So the kind of prefabrication that would, you know, be most appealing to people might not necessarily kind of fit to the market that well, so the adu side of the market, for instance, seems to be coming along with mass manufacturing relatively well. And maybe that's related to the fact that the specific type of units that people are using at us for, right, these sort of granting law suites and things like that, that are sort of smaller units on the property might be more conducive to mass production relative to the primary residence that people have, maybe people just prefer more customization or something with respect to their their main house. But I don't have a great answer for you as to why we don't have more of it. I think it's it's sort of a first order really important question, why we're not able to improve the productivity of our housing construction, you see that I mean, you see the basic effect in many different places. For example, if you look at the starter home market, or you look at the sale distribution, right, there's a pretty substantial left truncation of that distribution, basically, meaning we're missing a lot of relatively cheap homes, that are just not being supplied by builders onto the market, because it seems like it's fairly uneconomical to actually build these kinds of units. And that's true even out into the excerpts, even for far away from city centers where you don't really expect traditional zoning based regulatory restraints to bind construction as much. I think that reflects the broader set of issues surrounding housing construction. And another fundamental factor, I think, does have to do with just raw materials and supply costs. So it's very expensive to hire people to do anything these days, the material costs, particularly lumber are increasing. Also, again, if you had a better productivity sector, you could try to economize on the scarce or units of production to try to improve productivity, but we just haven't really hit the type of productivity growth that you sort of need, right? We just haven't gotten on the tailors route for housing construction, the way that we have for many other different industries. And so that's kind of leaving us stuck in a little bit of a low productivity trap.

Lars Doucet 8:27

So I've heard this theory called Costas eats, right, which is this notion that, you know, certain kinds of industries have not gotten any more productive over time compared to others, like TVs and toys have gotten massively cheaper, but like housing and someone to watch your kid, and healthcare workers and stuff, it's not gotten any cheaper to purchase the products that they create, you know, or the services. And so my question is, what do you think of cost disease in general, and then also is housing construction kind of paradoxically, one of those industries to like some people have said that maybe cost diseases driven by we have to pay all these people's rent, and as rent goes up, you have to pay more. And so does that like perversely feed back into housing construction? Because you got to pay the people who build your house to pay rent, so that you know, and so on so forth? Or am I off base?

Arpit Gupta 9:19

I'm a little skeptical of cost disease as a general explanation. One reason I think, is that we've seen a number of different industries that we sort of thought were cost diseased. And we saw that, in fact, it's possible to realize pretty substantial cost sequence decreases without necessarily involving the role of human labor. So just give some examples. For instance, if you look at the space industry, this is an industry that was massively expensive, right, but, you know, kilogram of something out into space, and it would be very natural to tell a story in which well, it's just very expensive to do this, etc, etc. And we just sort of saw with Elon Musk that they were just able to reengineer processes, they didn't really radically innovate on the science per se. But they've done a variety of process innovations, which have dramatically decreased the cost of getting to space. And kind of in concert with that NASA has been really rethinking the way they do procurement auctions and so forth. And you look across a variety of different industries, right, you can compare veterinary healthcare to human health care, that healthcare is substantially cheaper than human health care. You can compare infrastructure costs in different countries, right? We know that many countries, even many countries with very high labor cost levels, like Sweden or Switzerland, actually build infrastructure for very cheaply, much, much more cheaply than United States does. So I think these observations sort of lead me to think that, in fact, when we see a sector that is very expensive, the reason is not necessarily some fundamental reason, but in fact, a variety of bureaucratic things going on in the background that are just increasing costs, I think daycare would probably be the best case for a genuine cough disease problem. But even there, I sort of wonder about the regulatory regimes even that industry is under, for example, we have very strict limits on the number of children allowed for supervisory adult watching them. And of course, you don't want to have that ratio go out to infinity. But I don't know if we're exactly at the optimum, where we set that particular ratio. There also lots of restrictions on even having daycare centers and higher stories of buildings. I don't know if we exactly need that particular rule for daycares. So I think when you look at a variety of industries, you just sort of see that there yeah, there are all these sort of regulatory issues in the background. And with housing, if you're kind of looking for a, you know, a perfect example, like, well, who is able to build housing more, you know, more cheaply, you know, the best case that the end community points to is really Japan, this is a country that has a lot of skilled service jobs, you know, they have a lot of industries that require office work, and so on, so forth. And yet, they're able to have a fairly affordable housing system. A big reason why Japan seems like they're able to do that is that they sort of had after World War Two property rights regime, that was something that sort of fairly protects the rights of the property owner to sort of do what they want, with with the property that, you know, that's sort of a legacy of the American imposition of laws after World War Two is sort of interesting that we, you know, Americans sort of imposed that system in Japan, but in America, we sort of have a very different property rights regime, but it left Japan with the ability to, you know, do all sorts of things with their, with their space, and they've been able to build a lot and even the most densely populated parts of, of Japan, Tokyo, for example, just have some markedly cheap, cheap housing. You know, people also wonder about the depopulation effect, but the densely populated parts of Japan are seeing competition increases as people are coming in from other parts of Japan. And nonetheless, they have cheap housing. So it's not an unavoidable fact of modern life. I think it's a product of a lot of flawed policies with respect to housing affordability.

Lars Doucet 13:02

So with regards to that, you know, so would you say that Japan is kind of a model of nimbyism? Or is there more to Japan specifically, to learn from that case? And nimbyism for the audience stands for yes, in my backyard. It's it's a kind of counterpoint to the so called NIMBYs, who are people who say not in my backyard, who are the kind of people who protest every every every new housing development in a neighborhood. And I think what it was kind of getting out here was that the property rights in Japan are such that the owner of the land gets to decide what to build on it, his neighbors can't come and say, No, you can't you can't build on there. Is that is that more or less what you're saying? And then what is the yimby? Would you say Japan is is a model that can be placed or not?

Arpit Gupta 13:49

I think it basically is, so a lot of housing regulations in Japan happened at sort of a national level, and they have sort of a nested sort of Russian doll, sort of zoning regime. So sort of means that there are a variety of permissible uses. And if you're, if you have a place that can build up, you know, build a certain set of types of things, it can, you know, sort of buy a right, build all the things, you know, like in one direction away from that

Lars Doucet 14:14

for the audience, what is by right mean, in this context.

Arpit Gupta 14:17

So if you have an area, for example, that you're, you know, it's the zoning permits, you know, a certain a certain type of thing in that particular area. In America, it'll sort of allow for, you know, a very constrained set of development, it can happen in that area, and in Japan, that the zoning regime will allow you to build just a variety of things. In addition to that one specifically. So is it just a relatively permissive zoning regime? They they tend to also be relatively permissive in terms of a lot of other zoning constraints beyond just what you can do with a particular parcel in terms of setbacks. So housing in Japan and buildings in general built very close to the sidewalk. It turns out to be a huge issue because the sort of the, the building, sort of floorplate, sort of the size and scope of the building relative to the land that it occupies is a really big component of density. And Japan allows for building to kind of take up the full envelope, they have relatively little street parking. So in most of these sort of bands free parking, instead, you're parking your car in your private garage, or on a for fee car garage. And one of the things that that means is that the car ownership rate in Japan is actually not that low. So if you look at countries like Germany and Japan that have very effective public transit, actually, the car ownership rate per household is relatively high, it's just that people don't use their car for many trips, right? In Japan. So Japan, they actually have quite a lot of cars, they're staying actually have quite a lot of cars, people do use cars for things like going to the grocery store, and so forth. But they're often using public transit to get to the office every day, same thing. And that means that people are much more reliant on public transit and public transit just works much better in Japan, than United States. And there's, of course, a close nexus between housing density and public transit, because the more dense in areas built, the more profitable will be the public transit serving these areas. And the more the better as a public transit system, the more you can allow a much broader part of the country versus a much broader region to access the benefit of that, that density is a very close connection between housing and transit. And so Japan, Japan also is a very high functioning transit. In fact, it's a lot of it is private. So these are privately, you know, here, we spend billions of dollars on transit, public transit to make it work. And in Japan, these are so effective agencies that they make money, their shareholders, and you pay out dividends, and so on, so forth, you know, the whole thing is value creative. So the transit part of Japan works as well, Japan does have some amount of sort of public housing, social housing, but it's a relatively small part of the stock, and it hasn't really been increased very much in recent years. So they really are relying predominantly on market rate housing, in order to provide the needs of housing needs of people, and the whole thing seems to work remarkably well.

Lars Doucet 17:11

Now, this is usually the point of the argument, or someone who hears this, who's kind of opposed to that will lean into arguments like, well, yes, they're Japanese, though. And they're extremely compliant, or whatever kind of cultural thing they want to invoke, you know, when you bring up Norway, they talk about how, you know, they're ethnically homogenous, or whatever, you know. So I mean, let me just bring those all up. For the sake of argument, you know, the Japanese have magic pixie dust that we don't have that makes them able to do things and we just can't do it. Do you agree to a certain extent, even though I'm kind of making a strong argument here, like, do Is there some Japanese magic pixie dust? Or are there other places that have succeeded on the Japanese model to greater or lesser degree?

Arpit Gupta 17:53

Well, I think a lot of the successes of the Japanese model, if you want to call it that are seen throughout East Asia. So the transit housing Nexus method, for instance, is followed in Hong Kong and Singapore as well. So these will be transit companies that do value capture of some form, right? So the way they're able to make so much money, despite being private companies, in many ways, is to basically rely on the development rates in the vicinity of subway stops. So you said the magic word value capture, is that what you're defining right now, right? So Valley capture is gonna be this idea that the uplift in value that comes from the creation of infrastructure, so the fact that land is worth more when it's close to a transit stop, for instance, that uplift in value can be used in some way to help finance the project upfront. And they're right of ways of doing that either on formal taxation grounds, or just tax the area more in terms of development rights, so just allow for transit during development, more building in the vicinity of subway stops, or try to tax other ancillary products. So like a higher sales tax or something in the area of subway stop. And these tools are fairly commonly used across a number of Asian countries that allow for high density, high taxation in the vicinity of subway stops, that helps to finance them and make them profitable and brighter. These tools are used for all across the world, even United States, we've done a, you know, some measures of value capture in different infrastructure projects here. So I think the underlying economics go beyond Japan, if there is a uniquely Japanese component to this equation, it might be in the form of very low crime rates. So Japan is just exceptionally low crime. And that probably helps density and urban living on some margin because you're much more confident that you can go around around the city, but I think there still are a number of lessons that apply to even high crime cities. So for example, Sao Paulo in Brazil actually has fairly effective data capture mechanisms also, despite being very high crime. So I don't think the lessons of Japan should be restricted to one country

Lars Doucet 20:00

Okay, that's interesting. I mean, so even if we then broaden, you know, the retort to well, it's it's not Japanese pixie dust, it's East Asian pixie dust, you know, and that's why we can't do any of those things there, you're you're making the argument that value capture, you know, to what degree East Asian pixie dust does or doesn't hold, you're saying that value captures is one of the really key ingredients here that economically makes these projects make sense, do we in there, there's plenty of US cities that have had trouble, like with their with their public transit? Are you arguing that our public transit projects that don't work aren't doing value capture and the ones that are doing better?

Arpit Gupta 20:38

Well, there's both the demand and the cost side. So dolly capture is something that can help raise funds to expand transit projects, or at a minimum, if we're doing transporting development, we might at least do more upzoning in the areas around transit stops. And so this idea is certainly something that's been very popular recently, Minneapolis did this as a part of their broader review of housing regulations. California has done aspects of these reforms. So there's something that that many different places around the United States are considering. But if you're asking why does it transit necessarily work the United States, I think, that side of things, the ability to find ways of financing the infrastructure projects, or adding more demand for them outside of station stops, has to be balanced with the cost of these projects, which we know from the work of Alon Levy and many others is really high in United States. So there are many projects, that would be five all would be positive NPV if we were just able to build more cheaply in the United States, and we just have a massive cost problem when it comes to infrastructure. Similarly to you know, how we just have a cost problem with respect to building of many different types.

Lars Doucet 21:45

And so you said transit oriented development, is that what you just described, or was there a separate definition? So

Arpit Gupta 21:51

transit oriented development will just be this idea that we want to concentrate our building and allow for greater density in the areas around transit stops, because this will allow for the most number of people to be able to live in a place where they can use public transit to commute and get around and go to other places. And over the long run, this will generate a network, a transit network, where all the nodes of this network are relatively are places you want to go to are sort of hubs of agglomerative activity, right? What does agglomerated mean for the audience. So that's going to be this idea that there are spillovers that result from economic activity of various kinds. And as long as we have a density of building in a particular area, we can take advantage of the fact that these people will interact. And so these spill overs, whether that be on the consumption side, so having benefits of people being able to grab coffee, and drinks and so on with each other, or on the production side, having people that work in a similar industry, you co located and be able to share ideas or you know, job tips or where to move next, these kinds of activities will be co located in some way. And so having a lot of density of these activities in transit stops, specifically allows for greater ease of people to move between all these different areas. And so it's going to both concentrate economic activity in the highest value places. And in the long run, it's also going to reduce the need for non public transit, forms of transportation, particularly cars, because you can just used public transit to get around and access all the really high valued nodes of economic activity.

Will Jarvis 23:23

It makes a lot of sense. I'm curious, you mentioned crime crime in Japan, one of the Escha a question about incarceration here in the US, you've written a bit about it. Before, you know, I want to know a bit about the societal effects of incarceration and some of the downstream things we don't often think about. But But first, what's your sense of, of why we incarcerate so many people in the US? Are Americans just higher in criminality or something like that? Or do we just for some reason, decide it's good idea to let more people up in other places?

Arpit Gupta 23:56

Yeah, so America is a high crime society. And in fact, many of the countries in the new world are relatively high crime. So comparing both North and South America, I don't necessarily have a deep reason for why exactly that is that that the countries on these continents are relatively high crime. But it's definitely something that you sort of sort of see in the data and the way we responded to high crime, and particularly the time series of crime. So the fact that crime was really ticking up. And a lot of these periods of the 60s and 70s is we've adopted a relatively severe incarceration regime. So especially as you get into the 80s and 90s, you had a lot of prosecutors, these are the individuals who are charged with deciding what type of crime someone is going to be charged with and what the prosecutorial regime is going to be. A lot of the prosecutors seemed like they have adopted relatively high, severe sentence lengths to apply to people. And there is a The justification for this, which is the high crime in the first place, and it turned aspects of trying to require high incarceration and lengthy incarceration. But one consequence of that, I think, has been that we have certain neighborhoods and communities where there's a lot of people are behind bars. And I think the social consequences of that incarceration sort of strategy is it's sort of felt intergenerationally as communities are grappling with the absence of a lot of individuals from from broader networks.

Lars Doucet 25:33

So in your paper, you were talking about how there's this kind of notion of expected value, right? Like if I have a 10% chance of 100 bucks, or like, a 50% chance of 20 bucks or whatever, like the expected value, assuming I got that right is about the same, right, you know, and like, I think the expected value about $10. And so you can apply this to crime, I think you did in your paper, but it's like, okay, if you have a low chance of getting caught, but for a really big sentence, you know, versus a extremely high chance of being caught for a fairly short sentence, like the expected value should be about the same. But then you said, if a criminal's discount rate is high enough, those two things are not totally the same at all. Can you clarify what you mean by discount rate, and also what what that full argument cashes out to? Yeah, and

Arpit Gupta 26:26

to be clear, this is not just an argument for me, it's something that many people have made, particularly Alex Tabarrok, who's posted on this drawing for that observation. But it's basically the idea that when we're trying to incentivize criminal behavior, we are trying to impose a cost efficient so as to deter an outcome that we don't want to see, for example, higher crime. But our ability to impose that punishment is typically far off in the future, we're pledging to incarcerate a criminal and impose some costs that will happen at some future time when that individual is behind bars. And one problem is that criminals are sort of, you know, pretty impulsive. And so they're sort of making decisions on more of a short term basis. And so in order to equate that cost benefit, you have to make that long term cost really bad in order to achieve a deterrence effect. And that sort of means you wind up incarcerating people for a really long time, far in the future in order to deter some criminal activity today. So that would be in contrast to other frustrating strategies that try to do a better job at providing an individual with immediate costs. So having a high certainty rate of conviction, that is relatively painful, but will happen in a fairly short amount of time, in order to achieve that same deterrent effect. So you're

Lars Doucet 27:44

saying that, because a criminal might be like, I don't know, if I'm going to live till 18 is going to be less concerned? If it's like, oh, well, you go to jail till you're 70. It's like, we'll be cool. You know, it's like, I'm much more concerned about whether I'm gonna go to jail at all. And so you're saying you are definitely going to go to jail for a year or two years or five years? Versus we probably won't catch you. But we if we do, you're going to jail for 50 years? Yeah, you're saying that the, the, the lighter sentence can be more of a determined if it's much more certain, like we're absolutely going to catch you.

Arpit Gupta 28:16

Yeah, and I think a related issue is the idea that a lot of criminal activity is done in context of impaired decision making. So for example, there's a lot of criminals or potential criminals are just drunk when they commit the crime. Right. And so it's it's hard to kind of make an appropriate discounting of future long run costs. If right you're in it appeared mental state. Another related observation, I think it that kind of thing at this back to our credit discussion is thinking about automated sentencing, of different tribes, different types of events. So we rely on our transit enforcement on a lot of discretionary activities. So a cop has to see you commit a crime and pull you over, etc, etc. And a different way to enforce traffic laws would be to have automated enforcement cameras, exactly as there are cameras that observe people speeding, and would just automatically issue you a ticket if you're found speeding. And so that's sort of a related observation. I think it's sort of the idea that if we're trying to sort of regulate behavior, rather than trying to do that, by having a discretionary amount of enforcement of some degrees of egregious offenses, it can be better in some ways to have a more straightforward, almost algorithmic, just sort of process oriented way of enforcing basic disorder crime offenses, ensuring that individuals pay some shore immediate cost for transgressions without having to rely on great amounts of discretion or other sorts of things which allow for individuals to form these you know, skewed cost benefit ratios when it comes to criminal activity.

Will Jarvis 29:56

So it sounds like we should, we should aim to have less capital punished a more consistent enforcement, more police on street corners, more algorithmic kind of enforcement and lighter sentences, and we might get better outcomes that way.

Arpit Gupta 30:08

Yeah, another thing, another thing, since you just sort of mentioned, police on street corners, that's another big change when it comes to policing. This is, you know, this is not my observation, many other people have made this point. But it used to be the case that we had a lot of bad cops, people that were just strolling, walking by the community, new committee members, and we've sort of moved to a more reactive form of policing, where police sort of sit in cars and react and drive to scenes of crime and interview people, you know, try to catch criminal after the fact. And something about moving away from that older model of policing has, I think, impair a lot of the trust that people have for for police officers, and has sort of lowered their general capacity to respond to, you know, just sort of prevent crime from stopping in the first place. And it does that role doesn't have to be served by police officers as well, I think there's a lot of interest in having other types of community mediators fulfill that role. But in general, having someone whose job it is to sort of enforce disorder and sort of look around, I think, I think it's important, I think it's particularly important as we're looking at these relatively higher crime rates, relatively high rates of social disorder, across the board, in the wake of the pandemic.

Will Jarvis 31:19

Why did we move away from that it? Was it just a cost problem? Is it more work to walk around the community and get to know everyone? Do you have any sense of why why we switch from having cops on the beat on every street corner to kind of this reactive, we're gonna, you know, show up screeching tires in our charger, and then like, and then screech out, once we've, you know, done our like, you know, assessment of the situation.

Arpit Gupta 31:42

I'm not fully sure, but I think something that people in that area mentioned is just the introduction of the automobile in the first place. Right. So police officers just used to be walking around, right? You know, you don't have a car, you just walking around the neighborhood and eventually, dealing with low level offenses, this as they happen. And once you put someone in a car, they're sort of natural habitat is to ride around that car and only show up when they're golfer.

Lars Doucet 32:07

So you're kind of as if we tell you two ideas together, the fact that like, we've moved to more automobiles center design, and our cities have become less walkable. That means they're also less walkable for the police. So the police have to drive to wherever you are, and the amount of area they have to cover is larger, because we're building less densely. So in a way, you know, I wonder what you said about Japan is that they're very low crime society. I mean, to what degree are these things sort of semi causal? I mean, I know you said Sao Paulo is fairly dense as good transit, still high crime. I mean, but if we build more densely, and I mean, simultaneously, like had like, some more effective policing, according to what you're saying, like, Could some of these, like like is the fact that America is currently high crime, not necessarily a constant if we redesigned our cities in certain ways?

Arpit Gupta 32:53

I think there is something to that. And, again, I would draw from people that have looked at these aspects of urban design from a crime standpoint, but I think something those individuals would say is that the context of crime matters a lot. And within a particular city, you'll see crime tends to be pretty isolated. Where you know, where the crime happened, you know, there's a small set of neighborhoods that are responsible for the majority of crime in most cities. And when you get aspects of urban design, that relate to things like, is there enough lighting? Right? Is it? Is it pretty dark in a particular place? Or is it well lit? And also just what's the foot traffic. So living in New York has always seemed like a very safe city to me, because at all hours of the day, wherever you are, you will see people walking by on a street. And that doesn't mean there's no crime. But it doesn't mean that there's a sufficient density such that there's a set of possible people nearby, outside, and most neighborhoods where you might be walking around even free late into the night. And that's very different from less dense areas where there might not be as many people, now people have an association of cities and crime in their heads, right. And there's more total criminal activity in cities for sure. But when you look at the statistics, you'll see that many cities, you know, New York is actually basically the last city in the US most crime city in the US, right,

Lars Doucet 34:09

lower crime by capita or by what measure? Yeah,

Arpit Gupta 34:13

exactly by capita. Right. So in terms of number of criminal acts, there's quite a few. But if you look at it on a per capita basis, it's generally been declining over the decades and in the cross section, comparing across places. It's really on the low side here in New York. And I think there are aspects of our density of sliding environment of just the the walkable neighborhoods that does contribute to that, that sort of that situation. But I think it's, you know, my guess is it's partly density, but partly these other little more intangible factors, like whether you feel that there's enough eyeballs in the neighborhood, and whether these other design elements were there as well. Things like lighting and so forth, that helped to promote just that conducive, you know, sort of intangible feeling of safety.

Will Jarvis 34:57

Got it. Got it. I'm gonna get a different lineup. Question and care to explore, you've written a bit a little bit about local newspapers, although it is somewhat related. You know, there's been a lot of talk recently about how several private equity firms have been buying up a lot of local newspapers. You know, they get rid of a lot of the beat reporters, and then they move everything online, kind of their streamlined costs and make money, of course. What's your sense of how how bad is private equity ownership of local newspapers? There seems to me like there could be some benefits around well, there's there's higher chance of continuity, there's more of a chance there will be a newspaper period. But also, there are probably these trade offs where they the reporting is not as good they do last, like investigations. What's your take on that?

Arpit Gupta 35:41

Yeah, I would say this is genuinely a trade off. So I don't think this is a easy to answer question. And that reason, I think is sort of a trade off is this overall sort of declining industry. And we've sort of had in the past is we just sort of rely on cross subsidization to sort of get local news content. So we sort of had, you know, back in the day is a situation when before Craigslist, in particular, we just have lots of advertisements, in newspapers, that served as a strong source of revenue to help support a lot of other investigative content, journalism, and so forth. So it's sort of like how Google uses their ad revenue in order to fund all sorts of pet projects, right, like self driving cars, and, you know, million different vanity projects, it's all kind of coming from some underlying profit source, when it comes to advertising. Newspapers were sort of a two sided platform that did that, historically. And so whether people themselves really wanted local news content or not. And I think in many cases, they did want local news content. But even if they didn't, they were sort of being served a media diet, where you've got the brussel sprouts of the local news content, along with the desert of celebrity news content, or, you know, whatever else it is, that's easier, you know, to, to consume. And over time, we sort of seeing a lot of the economics of the industry changed substantially where these revenue sources have steadily decreased over time. And so it's just a very difficult business proposition to be operating a local news industry today. And so that's exactly where private equity has come in. And the dark side of private equity is they are trying to unlock and realize value in the context of the declining industry. By doing all these cost cutting things we meant, like, like fighting the orders, having more centralized news content. So having one reporter produced content that 10 different newspapers will all report on it. So our local media die starts to look more homogeneous, we have less room for accountability for our local public officials as a consequence, at the same time, they are also putting in investments that help to extend the digital reach of these newspapers, and certainly seem to help to keep the newspapers alive longer. So it, I think, is a genuine challenge to think about, what is a, you know, different models of viability for newspapers in the future. One thing that number of papers are looking at is a nonprofit model. So that would allow for some amount of local news coverage, maybe there's some benefactors, local philanthropist, and they help to sort of endow and fund these kinds of measures. There's increasing interest in the internet itself. So that, you know, on one level is sort of the the cause for the disruption in the industry, but may also help to engage local, local readers by newsletters and other forms of digital communication that directly connect the producers of local news content directly to the consumers. And I think there's potentially a role here for public policy to play as well, in trying to think about what types of ownerships or what types of news, you know, regulation might be appropriate. And, you know, finally, I think there is potentially a role here also for social media, it's, again, sort of often the case that we're using social media to complain about things at the national level, but there may be better ways for us to remain engaged informed about local news contents, through different social channels. And finally, I think there's a sort of a deeper question about, well, do we need people to be aware of all local news? This is, again, a genuine trade off, I don't think there's a right answer. But the way we sort of do policy, the United States in many ways, pushes policy down at a hyperlocal level. So whether it's people yelling about buildings at their local community board, or decisions being made at City Hall, local city council, there are a lot of decisions that are made at a pretty low level here in the US. And another way of doing it is to just have that decision being made at a higher level. So having, for example, so winning or building codes being decided upon at a relatively high unit. So for example, in Canada, they do a lot of zoning rules at the provincial level. So Ontario will decide you know, the zoning rules with the whole province. So if you know and so if we push things up to that level, for example, then it wouldn't matter as much that I don't know what's happening medical community because I don't need to care about what's happening with the community board's decision on this zoning issue? Because it's the whole decision has been made at a higher level. Right? I say it's a genuinely trade off, because it's there are costs to that as well. There are benefits to having diversity of local municipalities, jurisdictions around the country, each of which sort of do something slightly different. But our ability to do that, to have a diversity of local government types around the country is on some level predicated on our being able to monitor hold these local politicians accountable. And there is a then therefore, a need for media to providing people with information on what's happening at these these local levels.

Lars Doucet 40:37

You know, when one thing that's interesting to me, my instinct is that when you talk about politically, people like the idea of like local control, right, you know what I mean? And so when you talk about pushing things up to a higher level, it's like, well, I mean, I mean, shouldn't the locals have a say in what's going on? I think that's also my intention with like, rhetorically individual rights, right? You know what I mean? It's like, people say, it's like, well, this is our town, this is our neighborhood, we should have a say in what gets built here. But another way to kind of look at that rhetorically, and politically is it's like, well, what right is more vocal than the individuals, right? And so local control can mean your neighbors get to tell you what to do on your own land. And so how do you grapple with that just politically and rhetorically this note, like, you know, what is the appropriate locus of control? And then how do you message that in a way that that's palatable to different different jurisdictions and constituencies? Yeah,

Arpit Gupta 41:34

it's a great question. I mean, I think one reason for the success of some of this EMB messaging, on some level is, is actually exactly because it's not denying local control, in some sense, as much as just re enabling the individual, the control of what they want to do with their own parcel of land, right, this goes back to early discussion of, in some sense your devolving decision down to an even lower level by allowing a person to decide what will happen on the land that they own. If you're not empowering the local busy bodies in the area, to instead determine what's happening for that person instead. So I think many of these regulatory changes broadly can be construed in a way that's actually pro individual. Another way of thinking about it, though, I think, is to sort of look back and try to understand where a lot of these hyper local bodies in particular sort of came from. So I've always kind of found these entities really interesting. It's not like they're in the Constitution, right? It's not like the Constitution and has Article Six is, well, this is how we're gonna establish the planning board and the community board. And, you know, and these are going to be the different institutions of governance for a lot of our transit and housing issues. But instead, they've kind of popped up over time, and a lot of emphasis has actually been central. So HUD in particular, around the 1970s started to make block grants. That is Housing and Urban Development. Right. Right. Right.

Lars Doucet 42:53

So is that the federal

Arpit Gupta 42:55

executive, the federal agency, responsible for a lot of our Housing and Urban decisions made these these block grants were able to cities, if they themselves created the local community boards?

Lars Doucet 43:05

Well, we wait. So you're telling me that this hyper local busy bardenas is the direct result of top down federal intervention?

Arpit Gupta 43:15

So it's not the full story? I think, because some cities already had some type of planning commission and things that were already sort of gaining ground. Certainly, they were, you know, certainly think of the Robert Moses era, the control the Robert Moses had across the city, you know, that that was sort of something he put he sort of put together through the parks department, for example. And then the backlash, Robert Moses, I think fueled a lot of this, it meant that there was sort of a latent demand for Busybody deaths, that was initially being put to good place being initially used to balk highway projects, you know, things, things of that nature, and then just sort of got diverted over time. So there's local bodies that were, you know, set up, you know, so just just to flesh it out. Right. So there was demand for local bodies as a result of this sort of urban renewal backlash, at the same time that there was a supply of these local bodies that was coming from top down direction and and end result was a series of local community boards that have basically all over the country been captured by the NIMBYs and use to litigate housing issues all over the country. So this is, yeah, now just sort of a universal phenomenon. But I think there is a substantial role for a centralized federal response and making it happen. And that doesn't need to be the case. Right? We could have different you know, a different perspective from HUD on this on these decisions.

Will Jarvis 44:38

Well, Arpit thank you so much for coming on the show. I've learned a ton. Where can people find your work? Where should we send them?

Arpit Gupta 44:46

Yes. You can find me on Twitter at arbitrage, at arbitrage on Twitter and on substack at arbitrage dot substack. And have a website as well. That one is a little bit different I guess. Arpit Gupta dot info. So we're constantly out there on the internet for all we're interested. Awesome.

Will Jarvis 45:08

Thank you so much there.

Arpit Gupta 45:10

Thank you so much for having me it was a lot of fun.

Will Jarvis 45:15

Special thanks to our sponsor does Mark analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations, and live players. You can subscribe to Bismark free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Well, Matt, how are you doing this afternoon?

Matt Clifford 0:41

I'm doing really well. Thanks for having me today.

Will Jarvis 0:45

Absolutely. Thank you so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Matt Clifford 0:53

Yeah, for sure. So I'm Matt Clifford. The vast majority of my time goes on being co founder and CEO of a company called entrepreneur first. And what we do at entrepreneur first is we try to increase the supply of great entrepreneurs globally, we do that by backing individuals who we think will be great founders before they have a company and helping them find a co founder and build a business from scratch. So I've been doing that for actually about a decade now, which is probably a lot longer than I thought I was gonna be doing it a decade ago, but I I've ended up very, very convinced that it's actually a really important mission. And, you know, the world needs more entrepreneurs. So as sort of provides a good bridge into like, the big ideas I'm interested in, I'm very interested in the broad idea of talent, and what what people with exceptional talent can and should do to maximize the impact they have on the world, whatever kind of impact they're interested in. I'm interested in that from a kind of business and value creation point of view, I'm interested from a sort of altruistic point of view. But you know, I think this idea of like, do we as a species allocate talent? Well, our overall is a really important question, and probably still under explored. So that's one big thing. And then I guess the other side of what I do at EF is, obviously one side is talent. And the other side is technology. And so I'm very, very interested in the question of, are we? Are we doing enough to survive and thrive as a species in terms of making the sorts of scientific and technological breakthroughs that I think are going to be required? If the answer to that question has to be yes. And so I'm very interested in how do we design institutions that encourage the right sorts of incentives for scientists and technologists? And, you know, how do we ensure that, you know, as a society, again, as a species, we're allocating capital and town in the right ways on that. So that's probably the second big thing. And then final thing I'd say is, I'm sort of interested in how those two questions tie together into a set of, I suppose more political questions about, you know, what are the set of values that we would want to feel like embed in those processes of both like, the institutions that we build and the technologies that we build. And you know, if you believe as I do that, actually, there are subsets of values that we would want to survive for a very long time, and some that we would not want to be trapped in for a very long time, then I think the question of like, how do we, how do we design these, these institutions and processes to give the values we care about the best chance of surviving and thriving is also really important.

Will Jarvis 3:41

That's great. That's great. Well, I want to hit on on all those points. How would you grade humanity right now on on how we're doing on these spreads? You recently had a tweet, which I really enjoyed, which was, you know, we were promised flying cars. But all we got were three 90% effective vaccines within 10 months of the novel pandemic, with the new technology, you know, it's, it's pretty, it's pretty awesome. You know, do you think we're, like, kind of beginning to escape the great stagnation? You know, where are we on those fronts? And how are we doing as a species?

Matt Clifford 4:10

I don't think it's inevitable that we escaped the great stagnation, I think there. Unfortunately, I think there are a lot of institutional challenges throughout, you know, I hate to use, like nebulous and loaded terms like the West, but I think it probably is the best shorthand for, for what I mean, I think, well, do we have the talent and the sort of skill to be able to create things like, you know, mRNA vaccines for novel pandemic? Yeah, I mean, that should give you a very encouraging sign. But I kind of find the worrying thing about that story is that it took a very legible, like extreme global manifested risk to emerge in order for us to do that. And no sooner had we done that, then we got that too. Business as usual, and I think you see all around you, the signs that we're, you know, gonna make a bunch of mistakes that exacerbate, you know, the set of things that probably led us to that pandemic, rather than compounding the gains of, you know, being that we saw in things like the development of those vaccines. So, you know, I think the thing I feel very optimistic about is, you know, I'm very, I'm a big believer in our species. And I think humans are pretty amazing. And I think in against painting very broad brushes, you know, I think we have proven to be as a species very, very good at. You're kind of making scientific and technological breakthroughs. I think the challenge that we have is, as we, you know, as we scale doing that, you know, I think I think we are hitting institutional barriers that threatened to perfectly offset or worse than the advances that we're making. So yeah, I mean, one of my big worries, I think I've written about a lot, but also one of my big motivators for, for building in entrepreneur first, a new kind of institution is that, you know, I do think that over the last sort of 75 years or so, we we have, I think, largely accidentally done a great deal to disincentivize risk taking by actually in most areas of life. But I think, you know, society feels the pain of that particularly acutely in science and technology.

Will Jarvis 6:33

Got it? So maybe it's something like, you've got it, we can build new technology. It's not like the we've lost all the low hanging fruit, we've kind of picked all the fruit because if we, you know, there's the pandemics kind of a gun to our head, and we're like, okay, we can figure something out if need be. What do you think? Is is the big institutional problem? Is it you know, capital? Is it the the motivation side is do people not have enough slack? Has it just gotten hyper mimetic because of social media? What do you see, like, you know, being on the ground at entrepreneur first, and seeing a bunch of entrepreneurs and shepherding them through? What do you see is the big bottleneck right now?

Matt Clifford 7:13

Yeah, I mean, I think the the answer to that, and there's two parts of the answer, I think, I think the first part is around macro talent allocation. I'll explain what I mean by that. The second, I think, is that we, we need new kinds of institutions that are able to better manage directed risk taking, and again, I'll explain what I mean by that. But I think the first bottleneck, macro town allocation, I think one of the great achievements of humanity over the last couple of centuries is that it is now possible to live for like, many or even most people in you know, kind of rich countries to live, really comfortable, actually, broadly fulfilling eyes without taking any risk. And that's great, in a lot of ways. I think that's a huge achievement as a species. But what it means is that nearly, you know, in nearly all countries in the West, the default talent paths, and that's a phrase I used to mean like, what what do what is the sort of like, most obvious path for the most talented people in the society to follow? What's the path of least resistance, that path in most of the West has become, I would argue, dominated by activities that I'm going to be rude, like, I think, borderline rent seeking and how they in how they capture value. You know, I must be really concrete. I do I think it would be good for the UK where I live, if a much smaller proportion of the most talented ambitious people went into finance. Yeah, I do think that will be good for the UK and like, Yeah, I think financial services a really important part of the economy. And you know, somebody don't think that should be zero. But like, it's kind of absurd. I think that I don't know what the numbers are today. But you know, there's certainly a time when, in the last decade, where if you take the top universities in the UK 60% plus of their computer science graduates even were going into finance. And you know, I look at that, and they say, well, there are kind of pretty good structural reasons to think that the market is distorted enough that a lot of the the financial rewards from going into that sector don't necessarily reflect massive amounts of value creation for society as a whole. So I think one bottleneck, you know, what, why is Silicon Valley so successful? I think one simple answer is it's the one place in the world where all the most talented, ambitious people want to build things. You want to want to build primarily companies. I think, building, building society, a society where the most ambitious and talented people want to build things, products that are valued by other people is a really important thing. And I, you know, you can get rent seeking entrepreneurs, obviously, but But you know, broadly call me a sort of Starry Eyed idealist. I think most entrepreneurs are actually like, the vast majority, their efforts are about value creation. So that's one big thing is just that, you know, all sorts of reasons for this, but most of the world just doesn't, doesn't allocate the most talented, ambitious people to the most important problems. And you know, to be clear, I'm a pretty odd and capitalist, like, I'm not like, I'm not saying that, like someone should sit in government and you know, kind of do that allocation. But I do think we need to think hard about like, what are the ways in which we may have distorted the incentives around that. So that's one thing. And then on the institutional side, I think the other bottleneck is the, I'm going to slightly do an EF pitch here. But I think it's because I genuinely believe that, you know, this is a huge problem is that most of the institutions that we've created for funding innovation, are sort of designed to retrofit

examples of things that have worked in the past that actually come from a period where arguably, the supply of innovation was too small. And so what we ended up doing is building a set of institutions and thinking particularly of traditional venture capital, that sort of look like they're, you know, kind of building on the best practice of decades of how to fund innovation, which they are, obviously, I guess, in some ways, I am a VC. But But I think the key point here is that every so much of venture capital, conventional wisdom, is basically built on this tiny data set of things that worked in a particular tiny corner of California for a very small segment of human history. And yet they these things often get cast as like iron laws of what works and what doesn't. To give a very concrete example, which obviously, I spent the last 10 years trying to reverse, you know, the conventional wisdom in venture capital is, you should, if you're going to start a company started with a co founder, who you've known for, like a decade, ideally, you've worked with before, maybe you went to school with like, the longer the better, that's fine. But if you know if that will literally true, that was the only way to build great companies, then obviously, we should do that. But I think like, only takes a moment, it's thought to think about how much that limits the supply of great companies, because how many people have such a person that not only meets the kind of classic things like are they really smart? Are they really skilled, are they really determined or they're really ambitious, but also happens to have had their you know, resided in your social network for the right amount of time, and wants to start a company right now, you are literally reducing by orders of magnitude the pool of potential founders. So for me, like the bottleneck that EF takes away, and it's not just the after people who have sort of copied and adapt to the model, but I do think removing that as a really concrete example of a bottleneck that reduces the supply of potential innovators is a really, I think, good example of how, because, you know, most institutional design in our species comes from actually a very short period of history in which, you know, I think we may over universalize the lessons, that'd be one.

Will Jarvis 13:26

That's really good. That's really good. It's fascinating how the stories we tell about how these things happen, you know, perpetuate, you know, into the future. You said some really interesting things there, Matt, about how, you know, the incentives for very ambitious people, you know, will just take the UK as an example, you know, they all drive to finance, you know, high consulting, etc. You know, you're at McKinsey Correct. With us. Yeah. With your co founder, right.

Matt Clifford 13:50

I was that guy. We were we were those people. Yeah, exactly.

Will Jarvis 13:53

It may be difficult to reflect here. But I know, you know, you went to Oxbridge, I believe went to MIT as Kennedy scholar, political sides, you know, went to consulting, you met Al some somewhere along the way it McKinsey went, you know, how did you guys decide? So you came up with this idea? You know, how sure, were you when you jumped? That this was going to work? You know, like, I always like to look back, you know, like you were you like, you know, confident or, you know, not really confident like, like, Did you assign odds? I

Matt Clifford 14:21

don't know. I mean, the the the true answer is I think we walked into it without really even properly interrogating that question. I mean, I think for us it was it was in some ways a very stupid business to start age 25 with like no experience of entrepreneurship or venture investing or tech right. I think we will run about nearly everything as apart from this one central bank that turned out to be right enough that it like swamp everything else, which was betting that the pools great founders was bigger than it appeared and that you could bet Pretty company, but like in terms of did we think that specifically would work? I don't think we even interrogate that assumption. I think we, we sort of, you know, I mean, it's a bit of a cliche, but I think there is a lot in in the idea that naivety can be a real strength, if it turns out that the conventional wisdom of the industry that you're entering is in some way sclerotic, and you know, it doesn't necessarily reflect, you know, at the efficient frontier of what's possible. And so, for us, like, I think if we'd actually properly asked that question, we would have not done it. You know, I in that, there would have been very little good evidence supporting the what we now as we would call the hunch, you know, like, and that that kind of naivety, I think, can be helpful. I mean, you can overplay that, like it's naivety is also unhelpful, I mean, one thing I always tell our entrepreneurs is, it took us a long time to get to anything that looked like this. Today, if we're lucky, you know, built $10 billion with a company, it's been been quite successful. But you know, it took us four years before we really I think, could even vaguely say, like, Ha, maybe this is maybe this is a thing. So I think, you know, one advantage of starting young is, you know, we're 29. At that point, we still felt quite young things we'd started when were 35 would have been like this. It feels like we're wasting a lot of time.

Will Jarvis 16:36

Yeah. Got it. So Should people on the margin? And this, you know, I don't know, it's hard to get Yeah, it's very hard to give general advice. So keep that in mind. But on the margin, should people stick with things more if you're smart? And if you've, you know, think you've got a good hunch?

Matt Clifford 16:55

I don't know is the answer. I don't know. If you should stick with things more, I think what you should do is I would split it into two parts. So I see people make what I believe are two mistakes, two different kinds of mistakes when when confronting this sort of question. So one, I think people vastly undervalue the the optionality inherent in trying to find out. So as in, I think that, when you one of the underrated things about starting a company, is that you will, for very low cost, learn whether something might work. And if it does work that is so enormously valuable, that it was definitely worth paying the cost that it might not. It's such an asymmetric bear. And I hear so many people who I think could be great founders agonize almost get to this, like analysis paralysis around one, whether they're ready, and to whether or not the idea is good. And the answer is like, both your abilities as a founder and the quality of the idea are much closer to being like, procedurally generated by the act of getting smarter than they are like these things that you can analyze ex ante. And so like, I think people massively undervalue the, the value of finding out and that's the first thing like it's less about sticking, and it's more like, you know, try at all. That said, I think the second thing people do is the bit where it doesn't make any sense to like, stick at something is if the, you know, you should be thinking in that you should be creating experiments for yourself, where you can evaluate in, you know, in the along the way, what is the positive signal, I would expect to see if this was going to be a thing. And now for ETF that was long and painful, I, you know, took us for example. 10 years from founding, not 10 years from investing in this but 10 years from founding to build our first billion dollar company. And even then I'm like, Ah, is that really proof that it's working? You can always second guess whether you've really got proof. But I think what you can usually tell yourself about any given experiment in an entrepreneurial context is, what is the signal I would expect to see now if this was going to be actually a big success? 10 years from now. And so for us it Yeah, for the reason we kept going, and there were, you know, we left our jobs in September. And I can easily imagine a world where we'd quit by January. But what we did, which I think was good, like one of the few really good decisions we made that first year was, rather than give ourselves loads of time to recruit the first cohort, we set the deadline to be New Year's Eve of that year. So we had like three and a half, four months. And you're what, like, we got hundreds of applicants, and a lot of them were terrible. But there was like a real hardcore group of, you know, like seven, eight applicants who were like these people, really interesting, pretty good, exceptional people. And so we had no idea and to be clear like and to emphasize the point and like how people should stick or not stick to something, we had no proof that the methodology or the thesis, were going to work like call, you could put these people in a room and nothing might happen. But for the stage that we were at REL, you know, like, in the back, we were making that was a positive signal. And so like, I think it buys you a bit of almost like a willpower boost to then like, observe the next set of outcomes. And, you know, actually, that took a bit longer, you know, then it was, it wasn't until the following September, that we really got to observe whether these people would build companies and then you know, another six months before we know whether anyone would fund them and see that, like, I think you're just constantly running at a moving target. But the thing you need to be honest about honest yourself about is like is this where you would want to be given the goal that you're getting, you know, kind of, say you're aiming for for the long run?

Will Jarvis 20:52

That's super helpful and super helpful. So it's like it's a moving target. But you need to keep it kind of your eye on a ball. Like in the future, you're trying to meet these goals, and getting feedback. And it's kind of a more procedural thing than just like,

Matt Clifford 21:04

Yeah, the one thing I just emphasize on that, just just to tie the two halves of my question together, it's yeah, the nice thing about that, is that if you're honest with yourself, and actually after three months, or whatever, if we hadn't got those applications, hey, it's cost you three months, like the important part, it almost feels like almost feels like sticking is is the is winning and like, like dropping is losing? Not at all, like this is what I mean about the option value, right? I mean, it's so asymmetric. If it turns out not to work, I don't feel guilty about it great. If you learn something, move on. Like, I think if more people took that approach, we'd also increase the supply of people actually trying to do new and interesting things. And I think that's important.

Will Jarvis 21:43

That's, that's super interesting. I want to do this for EF. So I ran this calculation for something I was I was writing for Eric recently, about, you know, the expected value of getting into Y Combinator and something like $25 million. And that's, that's like, it's like double the value of a Harvard MBA. And I'm sure EF would be something like very impressive like that, where it's like, the the expected value is actually like really high to like, go through a program like this, even though you know, there's like kind of tail weighted at times. Yeah, yeah. Do you think like, people are just bad at assessing? Like, taking those small bets, like, you know, you guys like we're rational about it's like, well, you know, three months, we go back, we do something else. If it doesn't work, that's fine. But the upside is, is massive. It's, you know, billions and dollars of value created for the world. Do you think yeah, are people just bad at assessing gret risk? And are they just to kind of focus on avoiding the downside, if that makes sense?

Matt Clifford 22:38

It's a great question. I would say two things, both of which are slightly avoiding the question. So feel free to press me at the end of it, it feels like I haven't had a bad question. No, no, it's not about quiet. I think. So my first answer would be, I don't think most people even get to the stage of making that calculation. Gotcha. And that, I think, is I think, making that decision is downstream of a lot of cultural norms that most places don't have. I actually find that when we if we get candidates to that stage, actually used to do it the right bias, the right call, as they usually do. So yeah, the expected value of this is high, it's totally asymmetric. Like, you know, worst case, I'm going to meet a community of people who I'm probably going to be front, you know, we don't have a lot of problems with people, like getting to the point of running the calculation and then being like, Oh, I just, I'm putting so much weight on the downside. Which to be clear, I don't think it's absurd that they might, there probably are some cultures where that will be more likely. But But I think getting to the point of making the calculation, there's like a legibility thing, like, Is this even an option that I can put a shape round? There's a big deal. And then there is a, there's a sort of broader sort of cultural issue around just what's, what's legitimate. You know, one, one satellite anecdote that maybe illustrates this is when we, actually in both London and then when we open up in Singapore, we found that one of the key stakeholder groups that we just had completely not thought about was parents. So we target generally, or we did at the time, young people, you know, people literally coming out of university or in the first couple years, these days a bit more flex on that, but like, and, you know, one thing that was non obvious was that, to me, at least, was that if their parents thought this was legitimate, and or even prestigious, then it was then then that totally changed the calculation. But and you know, you could say, oh, sure, a great founders don't care about what their parents think. I think this is this is sort of this weird, very Silicon Valley centric reasoning where it's like, people are wildly impact by context, like, you know, it's the classic, like, what is the, you know, what is the water you're swimming in that you can't see. And I think like, I think it's a really dangerous idea for society to sort of imbibe that entrepreneurs are these like, completely, um, you know, against the grain weirdos and misfits, you know, who just like, they don't need any sort of like social validation in order to do that actually was not true at all. In fact, I think the history of that Silicon Valley is the opposite is creating a context where it's normalized so that people don't even have to make that that calculation. And so like, in both the UK and in Singapore, we deliberately hacked the process by partnering with organizations that carried prestige, even though they were completely irrelevant to what we were actually doing. So, you know, the first, the first kickoff event we did for the first London cohort we did at 10 Downing Street, you know, the Prime Minister's official residence in London, like, was there any relevant stats? No, not at all. But they all got a picture outside the front door, and they will send it to their parents, and every single one of these people signed up to join the program. So I think I think we just generally still on the right, the power of culture, and like a lot of the way that people make these decisions is just downstream of that in like very deep ways that mean, they never even get to the calculation.

Will Jarvis 26:20

And that's really their resume. Brian Armstrong tells the story where he was working at Airbnb kept applying to accelerate you might have been Y Combinator. I'm not sure it till he got in. He couldn't explain to his parents why he wanted to leave and start calling guys. Absolutely,

Matt Clifford 26:33

absolutely. One thing that I think is really fascinating about so many amazing founders, is that when you dig into their stories, there's so often a point where they are so far outside the like, classic, mythologized version of Steve Jobs already on my story. There's, there's often a moment where you like, if you met this person, at this point, you would think they were just like, either a wannabe or a loser. You know, like, and I don't mean like about their talent. I just mean that. There is this, I do think it's so like, pernicious the myth that like, the great founders just had everything figured out from the start. And we're always these ultra sophisticated people like sophistication, all these things. These are like cultural attributes that are like, learned and inherited, imitated, and, like one of our biggest company tractable EF, I really distinctly remember the founder, I don't think he'd mind me saying this, replying to an email from a VC when he were gret was graduating from EF. And, you know, he was like, brand new to startups. And the guy was like, can you send me a deck, and instead of coming to ask someone at EF what that meant, he was just like, what's the deck, that's what he put into this thing. This is a guy that runs a billion dollar business. And like, you could take that snapshot and be like, this person, you know, is x or y. And the reality is, like, entrepreneurs, in my experience, are just very talented people who would be successful at nearly anything they did. And therefore redirecting this talent to entrepreneurship is really high value.

Will Jarvis 28:05

That's, that's so good. That's been one of the more surprising things about about running this podcast, and you talk to people like you like Vitalik, Buterin. And, you know, just the list goes on, and you just realize they're they're just, they're people. Yeah, I mean, they're, they're not they're not, there's not some Halo, or that, you know, I mean, they're very smart, very talented, but at the end of the day, they are just people.

Matt Clifford 28:26

Yeah, and if I can lay but the point is, for another one. I'm very passionate about this, like, I really believe that. Very few people have really bothered to look at the data on what makes great entrepreneurs. And so like, there are so many myths and so much like totally bizarre analysis, often by VCs, who I think would completely reject this quality of analysis, if it were about anything else, but they select entirely on the dependent variable, and say, like, oh, well, great founders have these characteristics. It's like, well, what relative to what population like, you know, there's all this stuff. But the number one thing that I take from reading the literature and you know, I don't want to pretend I've been like ultra comprehensive in it. But like, the most surprising thing I've come across in the literature around entrepreneurship, is that whenever you get a quiz, a natural experiment, that means that people who wouldn't normally be entrepreneurs, but a very high scale, become entrepreneurs, somewhat involuntarily. A great example is, for example, in the UK, and us in periods where banks hire fewer people, like exogenous Lee, we know because there's a downturn, not only to people, more people become entrepreneurs, some more predictable, but I think the conventional wisdom, like from VC land would be, well, these these people weren't passionate about entrepreneurship, right? Otherwise, they'd have done it already. These are people who, like enforcer, it's probably less good. No, like, on average, those people do better than people who choose to be entrepreneurs in normal times. Why? Basically because they're disproportionately high. Scale individuals. And the reality is, again, with the possible exception of Silicon Valley, in most places around the world, and I'm gonna, I don't mean this in a rude way, but like, you could increase the average caliber of entrepreneurs in terms of just raw smarts and capability by transferring from whatever is the most prestigious career path. And that plays into entrepreneurship. I think conventionally like, Yeah, but there will be there will be true for hours, that's just a complete, you know, kind of made up concept. It's not a real thing, like all the evidence is involuntary entrepreneurs that come from high skilled professions do better than average entrepreneurs. And I find that like, an incredibly liberating fact for humanity, that we can actually just allocate more talent to this space, and you will get better outcomes.

Will Jarvis 30:44

That is super encouraged. That's a very crazy statement, you know, that is very encouraging. Because there is a story, like you said, where it's like, well, you know, it's like, very, it's not just the skill component, there's these other weird things, you have to have like all these these interesting insights. And it's like, very, you have to know someone for a long time. And you can't engineer this. But in reality, a lot of what you can do is you can take high skilled people if you redirect them in the right way, and they can be successful in building kind of breakout companies at the end of the day.

Matt Clifford 31:12

I totally believe that. That is what I've spent a long time bagging on that, but I think the evidence is actually relatively clear on it.

Will Jarvis 31:19

That's great that that is that's super interesting. I I'm curious, I want to talk a little bit about, you know, EF and this, this idea of co founder matching, which is something you guys really did pioneer, you know, no one thought this was possible before you did it. Are there? You know, I don't You don't have to give the special sauce away. But I'm curious. It does seem like it is a difficult problem to match people together? Well, because these findings, are they are really important. And how do you match people together? Well, do you encourage people just to, you know, break up quickly? Do you encourage people to, you know, search, you know, in a wider space? How do you get people to find good co founders?

Matt Clifford 31:58

Yeah, well, I think you sort of touched on it, I think, again, it goes back to this thing where I think people, when people think, stop, think about this problem, they tend to think about in an overly analytical way. So let's say there's an EF cohort and 50 people, I think, you know, left to their own devices, most people and I think this makes a ton of sense why they would think this thing, you know, breadth first, right, you know, I'm going to meet everyone in the group. And then I'm going to like stack rank them in some way against some sort of criteria. And then I'm going to sort of like, work with the person that's top of my list. That was our intuition to we spent a lot of time in the first few years trying to make that work. And lots of other things work like personality testing, like all sorts of like, companies approaches that had a formula, but what we found that literally none of these things work. And again, I think that your, the quality of your co founder relationship, again, is like somewhat procedurally generated. In other words, you only can find that out by actually working with someone else. And I have a whole book about this coming out in September, by the way, how to be a founder. But it's not out yet. So I'm not plugging it. But But But basically, what we say in the book, and what we've practiced for the last decade, ETF is that you just need to invert the social norms that exist in the real world, quote, unquote. So in the real world, if you and I will, we're considering starting a company together, the bar for us deciding to do that would be really high. And the reason it'd be really high is primarily because once we decided to do it, the bar to decide to get out of it would also be really high. You know, it would be super embarrassing. Like, it'd be embarrassing to have the conversation, you and I, but it also be embarrassing to tell our friends like Oh, how's it going with will actually, we stopped working together like just all these like, small but like, in on math, like extremely powerful incentives to make it hard to test a co founder relationship. So what EF does systematically is it just inverts those two things, it makes the batter getting into a team really low, precisely because we engineer a sort of like artificial social norm, that there is going to be no awkwardness whatsoever when we get out of the team. And it turns out that if you do that, and you have to really lean into it, by the way, you can't say by the way, guys, don't be awkward did that getting a team I mean, we go to great lengths, like every time you form a team, you have to sort of like I say register it you click a button on the platform. And then when you get out of team, you click the button again, that will be sent to a Slack channel that everyone sees that's like, will amount of got into a team and then we'll have broken up and if you break up and it goes on the Slack channel, you have to like write a comment and celebrate the breakup explain what you learned. And then everyone piles in and like congratulate you on breaking up why they congratulating you one you learned something about what you need in a co founder and what it's going to make what you know take for you to find a really productive partnership and to without science sounding too sort of like mechanical about it. You You've added liquidity back into the pool, like, you know, like, if people want to stay tight, your velocity really matters in a fixed size community, like you want to make the time spent in bad teams really, really, really short. So there is a little bit more to it than that. And obviously, like we've built a set of tools and methods and get can norms that facilitate this. But broadly, we, we try and approach it from a position of extreme intellectual humility, I have no idea who you should co found with an order you until you try. Now, as it happens, a button almost all the good teams that year form in the first few weeks. So we give people three months, actually, we've cut it a bit, but you know, we give people quite a long time. But the vast majority of teams form in the first few weeks. But you know, the the average person we fund three months later, so as in around the average company, we fund, the founder has been through about two and a half parents on average before they found the right person. And I do think that although there's a bunch of our teams that were first, you know, the first person I met, it worked, the people where that's not true, they will at least tell you that there was a huge amount that they learned about what they're looking for through the failed partnerships.

Will Jarvis 36:14

Gotcha. I love that. Do you? Do you have a sense of, you know, seeing somebody cohorts of what works on a co founder relationship? Is it kind of like a technical pairing and more in a business side sales marketing pairing, or is there just really no formula and it is just people need to try it, you

Matt Clifford 36:33

definitely need complementary skills, for sure. Now, depending on the kind of company that that could dictate very different pairings. Like, sometimes it makes sense to have two people with really deep technical skills as the two co founders, sometimes you do want someone with, you know, you know, his TED talk about the business guy, but you know, you want a person where, you know, she she has sold things before, or, you know, he has worked in the domain that you're trying to sell to before or whatever, you know, that that, that that makes a lot of sense. But you know, there is really contingent on the idea. What I would say is the way we, what I what we do know is the way you measure that is just by productivity. So like, well, what are the chances of investing this early, we invest three in companies three months after the founders met at most. And sometimes it's like, you know, six weeks, what you can measure, even if the idea is not even sat is how productive is this team together. And, you know, I hesitate to say anything universal about entrepreneurship, because there are so many exceptions, but it is really tough for me to think of a really good company that we have funded, that wasn't really productive as soon as they started working together. And it is, the converse is also true. You know, like, I don't think that teams that are super productive, it's very rare, if you really, genuinely are just getting so much done as a pairing is so unlikely that you don't figure something out, doesn't mean you're going to be a billionaire. But like, productivity, is this core core metric. Yeah.

Will Jarvis 38:09

Does that look like just kind of output, like, you know, work product, like, Whatever, whatever that looks like, whatever the product is, like, they have produced a lot of impressive things in a short amount of time.

Matt Clifford 38:19

Yeah, I mean, I think over the years, we've measured this in lots of different ways that you have, and you know, I think, I think we've got better at it. But the heuristic I give people that you can implement very easily yourself, is this. Just gonna sorry, it's so obvious to the point of being banal, but I think I think is worth doing systematically, which is, decide what an ambitious goal would be for a week, as in like, what what would actually be like, if I'm working at my peak? I, you know, we could get this done together, write it down, revisit in a week, did you do it? Now, what I think is interesting, is one, the best teams are consistently like, let's say at least three weeks in for they're hitting like an ambitious goal. There, the good teams, the best teams, also creating what I would call like, positive surprise. It's like, oh, we genuinely were stretching ourselves in setting that goal. But then this other thing happened. And we did this. And it was actually great. And, you know, I think, for me, if I could only, you know, if I could only know one thing about a team, it would be like, how many positive surprises do they generate per week on average? And I don't care what they're working on that would we have like a half billion dollar company in the portfolio that was just working, was running in completely the wrong direction for the entirety of the year, but were wildly productive in doing so. I took them you know, another year post, you have to figure out the right direction, but I would always bet on the productivity. That's how I think about

Will Jarvis 39:46

so boundaries should should focus on shipping, being productive as possible. Like he really is like that. That's a that's a good metric. Yeah. I'm curious, do people come to you with ideas or do they do they co found, like, find their crib? out, or am I come up out of the out? How does that how does that work?

Matt Clifford 40:02

Yeah, it's a funny thing that like, obviously, it doesn't work if no one has ideas. Um, well, we found that it's pretty tough to like, start with a blank sheet of paper. So, you know, I think we've often struggled to phrase and frame this for entrepreneurs, like, we're not anti idea. Like, actually, we love it, when people apply with ideas, it's just that we're not going to take the idea into account in deciding whether to so like, I would say, probably 70% of people dealing with ideas of which half are terrible. And if we have used it as a filter, we wouldn't have admitted them. And so like, what we ask people to do is like, we don't tell people what to work, you can work on whatever you want. But we think most people should be open minded about whether their idea might not be improved by working with someone else. So we take people with ideas we tip of without ideas, but the point is that we are at the point of admission, completely agnostic about that we don't think at that stage, that it is a helpful proxy for the quality of the entrepreneur.

Will Jarvis 41:09

Gotcha, gotcha, that makes it makes a lot of sense makes a lot of sense. Met, I'm curious, can you talk a little bit about the history of ambition, you've written a little bit about this, you've done some really good podcast on this? You know, what is the history of ambition look like? And why is it important?

Matt Clifford 41:26

Here, we it sort of touches on one of the themes we've already discussed, which is this idea of there being default paths for ambitious people, which could be more or less valuable for the world. So you know, the way I think about ambition is like ambition is the is the search for, for impact. And it's the search crucially, for full average. So in the absence of social and all the technologies, most of us can't have a lot of impact outside our immediate person. And, you know, there's nothing wrong with that. But ambitious people almost by definition, are sort of thinking, how do I, you know, simply by my own actions, find levers that just magnify and amplify that impact into the world. And so the history of ambition is a search for, like, those levers and finding the most effective levers that there are. Now, obviously, the what those levers are, is both culturally and technologically determined. And so, you know, like, my argument that I've made is, you know, a lot of the entrepreneurs of today, you know, if they were alive, 1000 years ago, they wouldn't be entrepreneurs, because there wasn't the, the one of the social and cultural and technical technologies that gave leverage instead, most of them would be probably priests, unto me in a Western Europe sense, which, obviously, where I grew up that why not because they were particularly religious, in fact, probably wouldn't be, but just that they, the church was a path to literacy and to scale through, you know, the sort of parish and, you know, a pickleball system. And that gave some people not very many, but like the most talented, ambitious, a genuine path to achieve real scale. And it was kind of the only path really, for people that were born, you know, not into wealthy families already. And you know, English history in the medieval and early modern period is full of these kind of amazing stories of people came from absolutely nothing climbed the church hierarchy and became very powerful. The example I've talked about most is a guy called Thomas Woolsey, who became Cardinal Wolsey and built one of the grandest houses Hampton Court, in England. But, you know, I think the point that I have tried to make to people is that over time, those ambitions, that sort of those levers change. So you know, like, various points, you know, arguably, you know, military service was, you know, one of the biggest levers for ambitious people. You know, I think one of the interesting things about the 20th century is that you started to get like a much more formalized set of mechanisms around how ambitious people could could amplify their impact around organizations. So like, by the time you get to the 20th century, one of the like, obvious ways to seek leverage is, you know, run a big company and tell those people want to below you want to do, he'll tell people, you know, bureaucracy was an incredible invention in the history of ambition. And I think the thing that I would emphasize is that every time you get a, you know, a sort of social sort of social technology change, you usually also get an institutional change to train people for that new social technology. So I won't belabor the point, it's probably quite obvious to people but you know, a whole with the rise of literacy, you get a whole set of innovations around what schools are in what universities are military, school, Business, School, etc. And so you can probably see where this is going. That might you know, my big claim is, to me, it's very obvious in the 21st century, by far the most powerful

technology of ambition is software, you know, kind of Um, services that can be delivered over an internet connection and all the, and all this sort of, like adjacent things to that. And, and there's a bunch of reasons for this, you know, scale is built in, you know, like, if it can be delivered over an internet connection, you can literally reach billions of people, cost is very low, like it really like the fact that it's so cheap to get started in tech, at least again, sort of taking a sort of western perspective means that, you know, the relative power of capital compared to town is low. I always say like, you know, the sort of tagline is, you know, from writing checks to writing code is a big shift towards individual talent, in my view, and scope, there's almost nothing, you can't No, probably can't attack through digital technologies. And so, you know, my argument is that, it kind of seems obvious to me that, with the rise of that technology of ambition, we're gonna see the demand for entrepreneurship increased by orders of magnitude will be orders of magnitude more people that want to be technology entrepreneurs, say 30 years from now than 30 years ago. And so the question is, what are the you know, what are the institutions that we need, that can have a comparable impact on, you know, that field, the university or the school there, you know, literacy, honestly, I hope and believe that entrepreneur, first of all, we wanted them. And, you know, in particular, because I think by taking our unit of interest as the individual, rather than the company, there's a real opportunity to create, you know, that legibility and that legitimacy that we talked about earlier, but also start to actually shift the culture and, you know, kind of, you know, with some irony, I suppose, become a badge of legitimation of that career path, that enables lots more people to have a lot more impact.

Will Jarvis 46:48

That's great. That's great. Do you think that as a piece of technology that, you know, founders and individuals can use for leverage? Do you think we're, you know, internet is becoming mature? Are we still early? You know, where's your sense of where we are in that cycle? I, when I when I think to the really, really big companies, it feels like, you know, the Google's the Facebook's, you know, those were Amazon's is were built in the early 2000s, the 10, to the Ubers, and the Airbnb s are a little bit smaller. So is there a sense, like some of the fruits been picked? Or do you think it's just like, you know, perhaps the lat that's kind of a lagging indicator?

Matt Clifford 47:21

It's a great question, and, you know, sort of much debated. My strong belief is, the answer is, we're just getting started. I think, I very much, I don't know, if you've seen or your listeners have seen, you know, the essay by Ben Thompson on this topic, where he talks about, effectively, a lot of the platforms we have today, and natural endpoints for, you know, kind of in the history of computing, you know, kind of everywhere, and, you know, we can compute everywhere, today, you know, kind of on a handheld device. And, you know, if you just sort of look at the chain of companies that were disrupted, it's less obvious today, what the how much further, you could go on these dimensions so that I sort of by but, you know, to try and bring it to life, I think we I mean, thinking of, for example, biology as an information problem. We like it the tiniest, were a speck on the chart of how far there is to go on that I suspect the same is going to be end up being true for energy. I suspect there is a Google scale company that is not Google to be still a built in AI. I just think that the other way other than Ben Thompson's way of thinking about is like, what are the, you know, how do you think about the possibilities of combinatorial innovation with the building blocks we've got, and it feels like we've taken that a long way. But actually, I think we've sort of remained very much in our silos, like, you know, Google is an internet company, like, yeah, it's doing a lot of other stuff. But it's certainly not like biology as an information problem company. And I suspect there's a trillion dollar company, several trillion dollar companies in that, for example.

Will Jarvis 49:09

Gotcha. So it's still still a lot of low hanging fruit.

Matt Clifford 49:11

There's a lot to do. I don't know if it's low hanging. I think he's a hard bargain. But I think there was a lot of fruit to

Will Jarvis 49:18

pick. That's great. That's great. I've got kind of two last questions here. First one is you gave a great talk. It was It may have been at one of the EAA Global's maybe was more the local conferences in Oxford, about you know, how EA should should think about using the internet for scale and founding companies as is a good career path. Do you still think that's true? Do you think EA should on the margin, think more about, you know, building great companies as a way to be effective, you know, and effective altruists in the world?

Matt Clifford 49:45

Yeah, I do. I guess I think there are two different arguments that could get you there. One is just that it's quite a you know, if as a community yeas, decide that that's good. And you know, I think there's a lot of people that believe that I Um, anywhere within the EA movement, the nice thing is the you have even more downside protection from the normal concern, the sort of normal, I guess normally I would argue, hey, it's such an asymmetric bet that it's worth taking, if you're an EA, and like a large chunk of the cohort of entrepreneurs are also a, you should feel really good about that. Because, you know, like, maybe you'll be the next sandbank for free, but if not, hopefully someone else in your cohort. And actually like in that sense of what you really care about, you know, it's just like, what happens to the proceeds of your gains, like the Maury A's that get into this space, if you believe what I say it's like, actually largely a talent game, rather than, do you have the entrepreneur gene, then it sort of seems like the expected value is really high. And the more he is that doing it, the more likely that when you pick from the distribution, it's an EA, that makes it really big and can do the next future fund or whatever. So and that's one argument. And the other argument, though, which is like not an earning to give argument is, I just do think that if you can find things that work at unit scale on a positive and then do them billions of times, that is an underrated, you know, that is an underrated way to have positive impact in the world. And, you know, I mean, like, I'm gonna say something very facetious, but it's like, not insane, which is, you know, you could argue that one is the most EA companies you could build would be just about a dating, dating app, you know, like, and there's a lot of evidence that, you know, matching really matters for lifetime satisfaction. And there's lots of spillet positive spillover effects on that. And, you know, I think the market for filing your match is, you know, still, probably, I'm not suggesting people go out and build a dating app, but it's just an example of like, I think you could have even just a lot of counterfactual impacts in sort of like pro yo way by building something that just has a ton of consumer surplus. I think there's obviously better examples that are like, how do you scale like more conventional positive impact, but I'm a big fan of consumer surplus at scale. I think that's like one of the most important things there is

Will Jarvis 52:02

absolute? Well, you mentioned this earlier, most founders, you know, are especially founders that you kind of go through EF they're not building rent sinking companies, they are building companies that are absolutely. deflationary value to the world, which, which is super cool. Well, my last question here, you just raised a massive round in a in a downturn, though last, which is, congratulations to that. For your Onyx scale. It's super, super cool. It's great sign of, you know, everything you guys have built, it's really inspiring. What's next for EF? What does the next 50 years look like?

Matt Clifford 52:33

Yeah. Well, you're right is a very exciting time it Yeah. So yeah, we just raised $158 million from coalition of, I think some of my view, some of the world's best founders, people like John Patrick Collison, Reid, Hoffman, Marlon way, many, many others. And we structured this, I'm not gonna be too boring and technical, but we shot this and I think a pretty interesting way in that we this not a fund, it's a it's an investment into our company, its goal is to be a permanent capital vehicle. And one of the reasons it's really exciting to structure like that is that it allows us to think and behave like like an operating company rather than a fund. And the reason I emphasize that is, I think one of the limitations of funds, although they make so much sense for most VCs is that they're kind of a single product, like, you basically swapping cash for equity at a price determined by the market. And some people are really good at that. And that's amazing. But what is quite hard to do in a fund model is to go back to your LPs, your you know, your investors and say, Hey, I know we've been making you a ton of money doing X for the last 10 years. But now we're going to try to do Y. LPS don't like that. And rightly so like LPS have to be more conservative than, you know, like individual angel investors, they, you know, they're investing, like for example, pensioners money or whatever. What's nice about being a company is that you create complete long term permanent alignment between my analysis interests and the interests of every investor, which includes, by the way, some really big institutions, including some pension funds, but what we're able to say is, look, we've made a ton of money for our investors over the last decade by doing product A, but we believe we are touching just a tiny fraction of the you know, kind of space of great founders that the world's missing out on like today, EF has one product, and it works incredibly well, for people in the first eight years of their career. Who wants to start a company right now and need a co founder. That's great, as I say, done about $10 billion of value through that one product feel good about that. But you know, what about second time founders? What about people with 15 years of experience who or people don't want or can't make a three month full time quit your job commitment right now? Once you start to think about like the space of founders that the world's missing out on, you start to think like wow, this happens to be a multi product company. And yeah, like we We're going to continue to do what we're doing is we're not abandoning this product is we love it, we think has had a ton of impact. But I think what you can expect to see from EF is even in the short term, even in the next sort of 12 months is a lot of experimentation around the product offering for different kinds of founders globally. And I think if we do that, right, then, you know, to answer your question over the 50 year horizon, I think the way I see is we want e f to be the obvious place for any entrepreneur to find their co founder, and we want to have a product that fits. You know, every every entrepreneur, you know, in every sector in in every part of the world, and I think that one of the one of the my big reflections in general is that founders probably under a devotee in built, you know, if you care about impact, then something that goes on for a very long time, you know, almost by definition, and eventually has more impact and stuff that doesn't. I think I'll always increasingly to think about, what does it take to make sure that EF outlives us, you know, what does it take to, you know, to be self funding not to have a need to raise external capital, but also to be, you know, why do universities last for like, 1000s of years when companies normally that I think largely because they're incredible platforms for talent, that have been very flexible in the product that they offer, in a bit of CAP very fixed the idea of being a springboard or amplifier for individual talent. I don't think we want to be a university that's not anywhere close to our goals. We're all about building companies that otherwise wouldn't exist. But when you start to think about, like, being a platform for talent, like aiming to be a meaningful part of the life story of some of the most impactful people of this century, and this is something I can imagine spending the next 50 years working on,

Will Jarvis 56:48

man, I love that vision. I really love that vision. That's so cool. I wish you guys the best of luck. I can't wait to see what comes down the pike. Matt, thank you so much for coming on the show. Where can people find you? Where should we send people if they're interested in the F?

Matt Clifford 57:01

Awesome yet? Well, you can find EF at join e f.com jinef.com. And you can find me probably best on Twitter at Matthew Clifford. I tweet a lot about the app but also about some of the other things that we've been talking about as well.

Will Jarvis 57:15

Excellent. Thanks so much. Thank you. Special thanks to our sponsor, this market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations, and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcript:William Jarvis 0:05Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis 0:38Well, Jordan, how are you doing this morning?

Jordan Blashek 0:39Doing very well. Really excited to chat with you today.

Will Jarvis 0:44Absolutely. Well, thank you so much for taking the time to come on the show. Do you mind giving us a brief bio in some of the big ideas you're interested in?

Jordan Blashek 0:51Yeah, absolutely. So my very quick bio, I grew up in Los Angeles, nice Jewish kid, I kind of expected since childhood that I would go, you know, be a nice doctor. I went off to college, went to Princeton University. And when I graduated, I joined the United States Marine Corps did five years as an infantry officer, two tours overseas and started to get out around 2014. At that point, I had the GI Bill. So I figured I'd use it for everything it was worth. And I went to law school because I wanted to dive into kind of great ideas about the American economy, or constitution, and also went to business school thinking that I would have a career in the private sector and through a series of sort of serendipitous events, ended up connecting with Eric Schmidt, the former Google CEO, and went to go work for him for five years, helping him stand up his new philanthropic organization, Schmidt futures. So had an amazing experience there, got some real insight into some of the challenges we face on the technology side, and the national security side, and use that to launch what I'm now doing, which is creating this new fund called America's frontier fund. It's a nonprofit deep tech investment fund focused on ensuring the United States wins the next great power competition against China, which is focused on technology. And throughout that process, while I was doing that, I wrote a book with my best friend called union. It's a road trip narrative, very similar to kind of Jack Kerouac on the road. And it explores why we are so polarized today, and what actually unites us, despite the default narrative that that we are so divided. So that's my quick background, I think some of the big ideas that I'm really passionate about right now, which kind of play into both my book and my current work. The first is this question of, you know, in this next century, this next great power competition. You know, it's very clear today that China invests for power in the US invest for profit, and how does that lead to very different outcomes for our economies? And what does it say for our long term strength as countries, and how that competition will play out, and I think the US has some amazing advantages, but it also puts us at some disadvantage relative to a country like China that can top down direct where it wants technology to develop. And then on the other side, I've always loved theories about us constitutional law, and what it is that that really unites us and binds us back to this founding moment, but also makes it a, you know, ongoing democratic experiment going forward, that we all have this amazing opportunity to participate in and shape going forward.

Will Jarvis 3:35I love that I love that. I won't get started. It's so much I want to dig into but I want to get started with one of the first things you mentioned, you know, after you left Princeton, this elite institution, you went into the Marine Corps. And recently, I was listening to a general he's talking about this, and he's like, this doesn't happen anymore. You know, I mean, like students, like from elite colleges very rarely go into the military. Like it's the client. And it's like, what's your sense of of why that is? Is it just because the military is kind of a red tribe institution? So like, it's kind of taboo to come out of this core, left wing institution, maybe get brainwashed a little bit? I don't know. I don't know what happens, but you know, like, something happens, and then suddenly, you never want to go work in the military?

Jordan Blashek 4:14Yeah, it's a great question. You know, I had a sort of unique experience. As I said, at the beginning, I always thought I was going to be a doctor, and I even applied to medical school. And I was going through college, and oh, five through nine, which was sort of the heart of the surge in Iraq. And there's something interesting where you have this generation of leaders go overseas, do incredible things, and they all joined before 911 Or, you know, right after 911, right, and they came home, they wrote books about it, and they inspired the next set of us and so you know, growing up I read, you know, Nate fix one bullet away and ride barcard and Elliot Ackerman and these incredible leaders who I want it to be like them, I aspire to sit to their sort of integrity and heroes I'm encouraged, and I wasn't unique there. So when I graduated college, I think there were 10 of us who joined the military from from my Princeton class, which was actually a fairly high number, you know, relative to the years before, whereas maybe one or two. And so I think there was this group, who are graduating around Oh, seven to 14, that were very inspired by that wave. And so in my officer, Candidate School Class of 40, infantry, 40, officers, I'd say 10 of the 40 were from very elite Ivy League schools, who all just were inspired, in some way or another. And they actually were fairly liberal. You know, my bunkmate at OCS, he's now running for office as a Democratic candidate for you know, for for elected office. And, and so it was much more diverse than than I think people expect. And again, I there was that sort of amazing moment, we were all inspired by the group ahead of us to go serve. And I think that that's still there today, you know, maybe the urgency has gone down a bit just given, you know, we aren't in active wars anymore. And so, you know, when I sit back and say, Okay, what is happening? I think there are two facts that are really important. One is, we no longer have a draft, you know, we have an all volunteer army, or all volunteer military, it means we actually don't need all that many people. And so the slice of America that goes into the military, it's just very small period. And we don't want that many people because it's a highly specialized, highly elite, armed forces. So that's the first fact. And I think the second fact is that shift to an all volunteer military happened, you know, at a moment when all these new sort of power law type career options emerged. And so, you know, in the 1980s, you had the rise of Wall Street. And, you know, in the 90s, you had the rise of the Internet. And so when you contrast the sort of the, you know, the more standard career of a military officers life with this, like, potential to create vast fortunes or power on the private side, you know, I think you've got this flood of, you know, top graduates heading into those careers and overlooking the military as an option. And, you know, I think that's not unique to the military. I think it's true across, you know, public service and a variety of other professions. But that That, to me, would account for most of it, I found the officer corps to be highly diverse. It might have even shipped, like slanted a little bit left, while the enlisted corps may be sort of slanted. Right. But that's sort of my take on it.

Will Jarvis 7:33That's great. That's great. Well, you mentioned something very interesting there. This, I think, is a great segue. You mentioned the rise of power law, careers, perhaps around knowledge, work, the internet, things like that, and driving, you know, people into kind of a narrow set of career options at the elite level, because, you know, you could go out you can make, like, huge amount of money and finance, or you can use technology to leverage that to make, you know, much larger sums of money than you traditionally could. There's a great book coming apart that kind of describes kind of this this forking of, you know, class in America, especially among American whites, which happened right around the same time. How much do you think this rise of, you know, these kind of power law careers is fed into political polarization? And it used to be, there's a great, this great anecdote, I've heard that, you know, Maytag, this great American company, based in Illinois. In the 60s, the CEO lived in the same town with like, a couple of doctors, couple of lawyers, the plumber, you know, and like, just some, some other guy was there, like, you know, just like everyday people, he would live in the same town with the factory. Now he lives in a big city, and he takes his private jet in. And this is like, just completely, it's this completely different thing, right? It's just like, much more, much more separated from each other. Do you think this rise, the rise of parallel careers, has contributed to political polarization in some sense?

Jordan Blashek 8:53Yes, I certainly do. I think it's one of multiple factors. But it's an important one. And I think, over the last 2030 years, there was there was a dominant, liberal internationalist worldview that essentially said, you know, globalization is good. It's good to be a citizen of the world. And we should kind of adopt that view. And, you know, it fit the moment for America, because we were the unit power, the unipolar power, and what was good for the world we thought was good for us, and vice versa. And I think, I think it's turned out that that's just not true. And I think it ended up benefiting, you know, the, the, the top echelon of American society, infinitely more and everybody else was actually fairly hurt by it. And I think you could point to a number of areas where that's true, you know, the offshoring of American manufacturing and the loss of jobs, which is now in turn reducing innovation in a variety of areas. As you know, our manufacturing base for deep tech is now overseas. You know, loss of middle class income, that sort of enabled this vibrant social fabric that we once had with communities. You know, you can kind of go down the list but I think It's, it's a major factor, I think both globalization and technology operate on a power law. And so the convergence of those two forces over the last 30 years, created this super Maelstrom that that really did eviscerate social capital across the United States and have significant consequence. And I think one thing that'll be interesting is, as globalization seems to be hitting a wall, and maybe even receding, and we're coming to the end of this next, you know, the last wave of technology, kind of based on semiconductors and Moore's law, whether whether we actually will see some, some reformation of American social capital, I think that, to me is one of the more interesting X factors over the next couple of decades.

Will Jarvis 10:41I love that I love that. Jordan, you wrote a really excellent book that you mentioned on, you know, you're taking this journey with your friends across the country in several different, like, spurts. It wasn't wasn't all at once. But I really love the book. And I'm curious, there's a lot of reflections around political polarization. You know, you're more conservative, he's more he was more liberal, and how you could kind of come together throughout those kinds of differences. His writing the book and talking to all these, you know, people from all different walks of life, made you more optimistic or more pessimistic about the state of political polarization in the US?

Jordan Blashek 11:19I think it did both. And I know that it's, it's not a satisfying answer. But, you know, on the one hand, our experience out on the road was that Americans are far less divided than, than it seems, you know, when you can sit down over a meal and break bread with someone, you find that you have all these values in common. And these are values that are shaped by our experience as Americans, I think that the, you know, the founding ideals all the way through to today kind of creates this implicit bond and shared civic religion among, among Americans that you just find over and over again, in town across America. And when you can get to that point of sitting down over a meal, you can you can find those those commonalities. And I think it's also true on policy, I think we're, we're not as far apart on policy as it might seem. And so that gave me a lot of optimism that going forward, you know, we just heard over and over from Americans that they're sick of being divided, they don't want to be put into these camps anymore, and they want to transcend it. And so that's on the one hand, and then on the other, it's hard to look at what's going on with social media, in our political system and not see that it is deliberately pushing us into those camps, and it's doing everything it can to, to activate our outrage buttons, and constantly just trigger us into seeing the other side as the enemy, our politics thrives on it, our social media and media companies thrive on it. And that sort of systemic kind of clean cleavage is, is it's very destructive. And you know, you could just see it over and over and over again, over the last five years, how these these issues were manufactured, they were designed to kind of push us into camps. And, you know, even when people know that that's happening, they can't help themselves from falling into it. I think, Chris, and I found that on the road over and over again, you know, we were writing a book about finding common ground, and we still found ourselves fighting on some of these issues, knowing what was happening to us. And so I think the the challenge for America is one, you know, how do we add a policy or social, societal and economic level kind of rejigger these things so that like, they aren't, by default, dividing us? And then second, you know, how do we as individuals and family members and communities, learn what's happening, you know, learn to understand our emotions and why something triggered us or not, and to be able to go a level up and say, Okay, I know, I know why I feel this way. But how can I continue to have a good conversation, a good relationship, you know, see the best in the other side and not fall prey to this? What I honestly view as sort of a marionette style manipulation?

Will Jarvis 13:54Absolutely, absolutely. It does seem to be just kind of quite pernicious. I'm curious as you travel across the country, with Chris, what's your sense of how healthy community is? There's a great, this great scene in the book where he talks about, you know, you go to a gun range type Chris shooting for the first time, and they invite you by back for, you know, beers and brights afterwards, it seemed like in this really small town, I think it was in Arizona, there seemed to be some real sense of community that still existed, but Americans seem to get lonely, they're lonely or every year. If you look at the percentage of people that has a best from when they would call their best friend, it's been dropping for the last kind of 30 years. What's your sense of how healthy community is in the US? Is it pretty healthy? Or is it pretty bad off right now?

Jordan Blashek 14:41Unfortunately, my personal view is that it's fairly bad off across most of the country. And I think community comes from two things. I think it comes from shared values, shared rituals, you know, a space in in the community that is viewed as somewhat sacred that you can put aside kind of the normal and grind of daily life and come together over something special or unique. You see that, for instance, in religions where you have Shabbat dinner in the Jewish community or, or church on Sunday, it's a special space. And again, it doesn't have to be religious, I think you can have it in the town square as well. So that sort of shared value shared rituals. And then on the other, I think it comes from common struggle. So what is something that we, we have to struggle over together, that builds resilience, and, again, stronger bonds. And it's hard to identify where those are in American society today, I think there is a broad lack of meaning and purpose, that creates that sense of shared values, shared rituals, you know, in especially in big cities, it's just very hard to find that. And as more and more Americans kind of flow to those bigger cities, I think you see that, that absence of of meaning, like where does someone find a sense of, of purpose? You know, I, it's not to say it isn't there. And I think for a lot of individuals, they do still find it. And so, you know, I think my broad generalization is not to say it doesn't exist, but that, but that it is far less than it might have been in the past. And then on the other side, it's, you know, we haven't seen much shared struggle, I think there's a lot of individuals struggle across the country, I think a lot of people are suffering. There's the opioid addiction crisis that is just so dramatic. There's the over incarceration challenge, there's homelessness, and poverty, all these things are terrible, but it hasn't create a sense of shared struggle, that we're all in this together. And, you know, I think that that's one of the things that Charles Murray talks about in coming apart. I think Robert Putnam talks a lot about it as well, in that lack of common struggle, you know, makes it so that we don't feel like we have that much in common anymore. And while I believe, given my experience in the Marines, that when you put Americans to the test, they rise like no other people I've ever seen, you know, they have this incredible spirit that I think is unique to Americans, because of our values, because of the way our country understands itself. And you see it over and over again, overseas. But most Americans don't get to experience that. And so I think that that lack of common struggle has made it so you know, we don't find the same trust when when things go bad. You saw this with COVID. Unfortunately, that, you know, something that could have been a common struggle, ended up becoming an individual struggle for a lot of reasons. And and you didn't have that sense of trust across the entire country. And, you know, even that is overdependent because it flows from our political polarization into, you know, what could have been this unifying moment. But that, to me is is sort of the defining feature of our social fabric today, that lack of meaning lack of common struggle has left us in a place of less community less trust.

Will Jarvis 17:43That's a great transition point. It seems to me like our last great unifying force was the Soviet Union, and you're working on our next great again, what I say is our next great unifying kind of force to push against, which is a great power conflict with China. What do you think? You know, how does the scale look when you look at there seems to be this weird thing where a lot of people I've talked to they're either like, Well, China has this crazy demographic problem, the the pyramids upside down, they're not gonna be able to fund their liabilities. It's not a serious threat, we have nothing to worry about. And then there's people that say, they're so far ahead of us, they're so much smarter. There's, there's no way we can we can do anything about it. It seems to me like it's probably more in the middle somewhere, like it's probably gonna be closer than that. But But what is your sense of of the great power conflict with China? How do we stack up against each other? And perhaps what can we do to make America more competitive?

Jordan Blashek 18:37It's a great question. So I agree. We're sort of at the early stages of this new, long term competition. And some people call it a Cold War. Some people call it a hot war. Some people call it a techno economic war. But we there's no doubt we are now in a very fierce competition with with China. And I think when these sort of competitions, these bipolar competitions emerge, whether in politics or among nations, I think there's a tendency for a lot of people to kind of either look at our strengths and their weaknesses and say, you know, of course, like our economy is so much better than theirs were more innovative, they have these demographic problems, you know, we don't have to worry. Or you look at your own weaknesses and their strengths and say, Oh, my God, we can't innovate. We're so sclerotic, we, you know, they're racing ahead, they're pouring all this money into innovation. And, and neither of those are accurate. I think both countries have incredible strengths. And both have a lot of weaknesses. And what that means is that the future is contingent. We don't know how it's gonna go. But what does matter is what we do in that competition and how we, how we focus on our own system, and ensure that we have the right you know, the right tools, the right innovation, the right talent focused on hard problems. And so, you know, my view going into this is that it's the United States that will either defeat itself or push itself into you know, another century of leadership of the global, you know, international order, whatever we want to call it. Because it's up to us, you know, we have a lot of problems, we have incredible strengths. And we need to take this moment, recognizing that we actually do face a competitor for the first time, in 5060 years, we face a serious competitor, which can act as a foil to us, it reveals some of our weaknesses, or areas that that we've under invested in over the last few decades. And I think that's, that's really important. But it also requires a seriousness of addressing those problems. Otherwise, we will certainly wake up in 20 years, to a world that we are not the world's best technology leader in China is and I think that it's not to say there's anything wrong with the Chinese people, I think the Chinese people are incredible. I do think the Chinese Communist Party is, is not the world I want, I don't want a world dominated by them, they don't have the values I care about. A world like that means more insecurity. It means, you know, countries like Russia, being given the green light to invade another country like Ukraine, it means less prosperity for the American people. It means US military that doesn't have the best technology on the battlefield and puts us at significant risk. And so all those things are reasons why, you know, I believe the country needs to come together around this issue, and really take a serious eye towards how we need to drive forward innovation, and parts of our economy that just haven't had it over the last few decades.

Will Jarvis 21:30Definitely. Well, you know, Jordan, it fills me with some hope that you're working on this problem, because it's, it's a bear of a problem. What does it look like? Making sure the US is competitive with China? You know, perhaps, on your front, what you're working on with providing, you know, us with defensive capabilities, it seems quite disturbing to me, there's just so many, I guess, kind of political economy problems with this, I think about the carrier's, you know, you've got these massive high capital costs, kind of weapons systems that can be defeated with DF 21, you know, very cheap, like anti ship missiles in mass, like there's things like, which I don't think people are really thinking about very much. There's a kind of a lack of automated systems, perhaps driven by like the pilot lobby in the Air Force. I don't know what's going on there. Maybe they just, you know, Top Gun probably did not help us at all great movie, but it probably didn't help us on that front. But yeah, like, what are you working on? In particular, what big problems are you see on the defense side that need to be buffed up, that can't be buffed up?

Jordan Blashek 22:30Well, that was a great point. And I'll start with your point, which is, the US has invested so much in these huge military platforms, you know, our aircraft carriers, or fighter jet programs. And it's not to say those are wrong, I think it's really important that we have those exquisite platforms that that dominate the battlefield. But if the 20th century was all about scale, you need you need carriers that have scale, you need aircraft carrier, aircrafts that can dominate the airspace, it was all about scale, the 21st century is all about, you know, small units, highly empowered with technology that can swarm. And, you know, as you said, our aircraft carriers can be taken out by either tons of Swift boats with explosives attached to them, that's a low tech approach, or, you know, highly enabled drone technologies that can similarly swarm, and they're low costs and cheap. And so we've cloud a ton of money and invested heavily in these programs that take decades to be completed. And yet, the fear is that by the time they're fielded on the battlefield, the other side will have technology that can easily take them out. And so that heavy investment, you know, might be money being spent in areas that are not gonna have the highest ROI for us. And so as we looked at this problem, you know, there's there's been a variety of conditions over the last five years or so that have kind of came to the same conclusion that we're falling behind in foundational technologies, things like microelectronics, or artificial intelligence, synthetic biology, these technology areas that are a bit upstream from the dual use application. So rather than focus on do we have the best aircraft carrier, we should be looking upstream, do we have the best AI because whoever has the best AI will make decisions faster on the battlefield, they'll they'll have a much higher competitive advantage in decision making, which then leads to all these downstream consequences. And same is true with microelectronics, whoever has the best chips has the best AI, they have the best weapon systems, they have the ability to shut off the world's supply chains to those chips. And so it gives all these advantages. And if we look at why the US is falling behind in those areas, I think it essentially comes down to this political economy question, which is, you know, a lot of those areas do not fit the venture model. And yet we've really leaned on the venture model for innovation over the last 2030 years. So venture has a 10 year fund duration. It's not a requirement. It's It's sort of a evolved custom and tenure fundraisings mean that it's hard to invest in things that have long durations to maturity. So you know, a company that requires maybe 15 years to go from promising scientific idea to prototype to commercial scale takes longer. And so venture funds will overlook it, they just won't, they won't feel they won't invest there, because it's not quite ready. And, you know, if if we had a well functioning political economy, we might have easier to access government funding, better grant programs that could take higher risk. And we do have variety of, of government programs. But I think universally, it's recognized that those, those are just not that effective. And while there's lots of great people working on fixing them, they're just not meeting that challenge today. So in between, you know, DARPA, which funds 20 year kind of breakthrough science r&d, and then the venture capital community, there is this gap in funding, and that that's what our organization is trying to solve is to figure out how we can get patient capital capital that is willing to take a longer timeline, to see returns, it's not going to say we don't want returns, we need at the end of the day, we need bigger returns, because the only way to know that something is truly a great technology and truly successful. It's an imperfect measure, but it is profit, you know, it is the fact that it's achieved commercial scale, that it is so valuable, and creates so much value for the economy, that it generates substantial profits, but we think that it needs a longer time horizon. So that's the challenge we're trying to solve. I think there's a related challenge, which is new, these things just require upfront capital, you know, to build a new microelectronic startup, it requires probably $30 million expensive to first prototype, whereas, you know, for a SaaS company, you could get to 30 million in current recurring revenue before you even you know, have to like really invest in hardware. So. So that's, that's the innovation challenge we face. And, you know, the reason it matters relative to China, is that the Chinese government can top down direct their sovereign funds, their state funds, to invest heavily into those areas. And they can even tell them not to invest in social media companies and software companies. So that talent, and capital all shifts into this other area. And so at a moment, when the US is under investing, the Chinese might be over investing in those areas. And that creates real long term risk for the United States. That means that on the Chinese side, they're getting the benefit of all these learning cycles, you know, in the same way that Silicon Valley developed over decades, as generations of entrepreneurs, kind of tackled startups, some failed, some succeeded, but they just kept learning and growing and innovating, the Chinese are gonna be able to do that in these deep tech areas. In the US, we're moving too slow. So that's the challenge we're trying to solve.

Will Jarvis 27:50Just move faster. It's really fascinating. You mentioned that time horizon, kind of $20 bill you found on the sidewalk, because it's very similar to a previous guests we had on the show, Adam marble stones, FRS focus research organizations, it's very much in the same vein of recognizing that there are certain, I guess, funding sizes and timescale returns that are not served because of kind of poor incentives. Just in in kind of the ether. That makes sense.

Jordan Blashek 28:18Yeah, that's exactly right. And if I had to distill the challenge, it's that we need a new way to finance innovation. I think for 7080 years, we had this incredible system that was developed, I think you could give most credit to Van der Bush, Vannevar. Bush, in the Endless Frontier. And, you know, this amazing symbiosis between universities, federal government contracting, and the entrepreneurial ecosystem led to the sort of innovation model we have. And yet things are different today. I think that model isn't quite working as well as I once once did. And so we need to innovate on how we finance, innovation, I think and out of marble stone is tackling that with the SRO concept, which I think is brilliant. And we we got to collaborate with him when I was at Schmidt futures. And there are other people in the ecosystem trying similar models. And I think what we're doing with America's frontier fund is just one more of those models to try to innovate on how we finance innovation. And our model is a bit more commercial focus than Adams, Adam is looking at how you can use new structures, like a nonprofit, but organized like a startup to achieve a breakthrough in basic research. And I think what we're looking at is how you can use a nonprofit to raise patient capital, that can take a longer time horizon, to invest in the things that come out of basic research. So you know, to ensure that whatever breakthroughs happen, can still get to commercial scale. That's, that's where I sort of put those but I find it to be a very exciting time as people are thinking very creatively about, you know, how do we use the tools we have to accelerate or, you know, rethink how we do innovation?

Will Jarvis 29:55That's great. That's great. All right. Are there any areas you see that the US has kind of of dragging behind it in terms of innovation, or just like, I guess, pure kind of onshore infrastructure. You know, one thing I always go back to is my brother, he used to work in his machine tooling machine shop. And you know, he's working on Chaffe for the F 16. But it's like the one shop in the United States, it's like down the road for me in this like little podunk town. And there's, like, you know, three guys, like, there's probably two people that know how to do it, and they're like, teaching my brother, like, wow, like, if these people had a heart attack, you know, we would really be in trouble as a country, you know, that's how close it is. So is it like, are there like pure, like, on the ground tooling problems we have? Is it like more on like, the front tier, like, I guess, hard tech, like, technical developments? Or is it like all of these things all at once?

Jordan Blashek 30:46I think I think it's all of these things all at once. And I think in, in some way, we've had the luxury over the last 40 years of just sort of saying like, well, the American innovation base is the best in the world. And, like, you know, talent will naturally just flow to the areas of highest opportunity and value. And I just don't think that's actually quite true. And you know, I'm a conservative, I believe in free market, I think it is the best engine for wealth creation and poverty alleviation in the world. But it doesn't always clear, you know, the market doesn't always clear. And I think what we've found is both that there are inefficiencies in the US economy, that means you end up with situations where it's like, we only have one person who does this machining process. And the entire defense, industrial base is like dependent on this like one node. And if that node goes down, we actually face severe supply chain risk. So I think you have that problem. And then, you know, on the on the other side, you have market distortion, you have a Chinese economy that is willing to flood or subsidize its own sector with capital, so that it out performs ours. And so it means we have certain deserts, you know, we don't do low end chip manufacturing in the US, because it's so much cheaper overseas, and that creates long term challenges for the economy. And so, you know, I think you have these inefficiencies that have emerged, as we think about going forward, what do we need to do to solve this? at a policy level? I, I think there are two things that that are important, I think one is we can't dominate all value chains across the world, you know, if we said we want to, we want to dominate the semiconductor value chain from start to finish. So from, you know, designing the chips all the way through advanced fabric, fabrication, it's never going to happen, it's a global value chain, it's, you know, multiple trillions of dollars, and we just can't do it all it would, it would take more money than than we have. And so we have to be very targeted and strategic about what we want to dominate. And as the US government looks to pass the chips Act and the bipartisan innovation bills, they should be thinking very seriously about where in the value chain, is it truly critical for us to dominate and have strategic notes. So I think that's first is for the first time in a long time, being very thoughtful about where we develop technology. And I think the second is having a better understanding at a granular level of those supply chains. So you know, the US government is the biggest buyer in the world of technology. And yet they don't know what the, you know, the couple levels down supply chain is. So one of my colleagues was on the Defense Science Board. And what she found was that, you know, you couldn't tell where that one machine is, is just based on the existing information the US government has, but we, we should know that. And, you know, I'm sure the Chinese actually know it. But we should know it, because it would help that market clearer, more effectively, you know, you know, having such brittle supply chains, having dependencies on the small mom and pop shops, for our most advanced equipment, is it's not an effective strategy. And so having better information, more data on where those brittle supply chains are, can help us revitalize those supply chains create more resiliency, and it can help talent and capital move towards areas of opportunity, that at the moment, they're not because they just have they have no visibility there.

Will Jarvis 34:13That's great. That's great. That this next question, it kind of flows through all of your work. So I'm really curious to get your take on it. You know, it's a big kind of left, right. I guess, conflict point around defense spending. The thing I say about defense spending is that the problem is, you know, we spend a lot of my own offense in this country. But if we decrease the amount we spend, it's not like you can, there's a lot of special interests, and it's very difficult to dislodge these, it'd be nice to just like hand wave that away, but they are there and they're very motivated to keep their kind of special interests like the big you know, defense contractors, etc. And so if you decrease defense spending, you get at you get less innovation, and you can't just like reallocate that very easily. So should we just be more biased towards like increasing defense? It's funding, even though we already spent a lot because you can take that new money and reallocated to places where if it's already committed, it's very difficult to kind of dislodge that.

Jordan Blashek 35:09That's a great question. I think the defense spending debate is I think it's really focused in the wrong place. So the vast majority of defense budget goes to things that I would argue are just not that relevant anymore. You know, a third of the defense budget alone is spent on on education, health care, and social services for the military. It's not that that's bad is that that's obviously needed when you have, you know, a standing volunteer, volunteer army, military. So it's very important to do that. But you know, when most people think like, oh, the defense budgets so big, I don't think they account for for that fact, then there's all this money going into legacy systems, you know, the vast majority of the budget goes to legacy systems. And as we were just talking about, I think that money would be much better spent on advanced r&d and trying to get the best upstream technology. And so, you know, I think the defense budget debate always kind of comes down to like, Democrats want it lower, and Republicans want it higher. And really, we shouldn't be saying, like, where should this money be going? You know, we want the US to have the best technology, we want to have the most capable military, what is the best way to achieve that. And it's, it's not necessarily a bigger budget, but it's probably a budget where the priorities are different. And if you could spend, you know, hundreds of billions of dollars more a year on advanced r&d for artificial intelligence, or commercialization of semiconductor disruptive technologies, you know, we would be in a much better place as a country than we are today. And on the on the on the left side, I think often the desire is, well, let's reduce the defense budget, so we can increase, you know, various domestic spending programs. And, you know, I just disagree with that. Because at the end of the day, the thing that will lift up more Americans create more jobs create more wealth, collective wealth, our breakthroughs in advanced technology, you know, I I very much agree with the Endless Frontier and Vannevar. Bush that, that the greatest way we can lift all boats is through that innovation. And we should be putting more money there, not less. And as you've seen, federal spending towards r&d has just gone down dramatically over the last half century, and continues to do so maybe it ticked up a little bit the last few years, but it should be four or five times as much as as it is today. And some of that could come from the defense budget, and I think it would actually meet the purpose of having the most capable military and the strongest strategic position for the United States.

Will Jarvis 37:42That's great. Well, you mentioned the research budget. And I'm curious, it as best we can tell, it seems like the average scientist is probably 2% as effective as, as one was in 1950, probably due to all kinds of different factors. I'm curious, do you think it is gotten harder to find new innovations? Have we picked up all the low hanging fruit now it's just just much more difficult to get up the tree to you know, find that next Apple? Or is it like kind of a psychological thing where maybe we're not trying as hard or the money's not going to the right place? It's just going to the older scientist or something like that. And, and they're all just politicians who are gonna get in money, and the weird people all got kicked out on the street or something like that, like, what do you think's going on

Jordan Blashek 38:24there? It's one of those. I think it's an overdetermined problem. I think it's it's kind of all the above, I do think, you know, there is some of that, like, fishing out problem that we have kind of gotten a lot of the low hanging fruit and the next breakthroughs or, you know, maybe a little harder. I think it's that, you know, if you go back 6070 years, the average university president was in his 40s. Today, it's they're in their 70s. You know, I think it's true across departments. And maybe it leads to a more risk averse profession. I think the way grant money is given out probably also has some effect there. It's harder to be a non consensus thinker today in the academy. So I think it's all the above. I'm not an expert in this area. So I don't, I don't really have any, any smart view on it.

Will Jarvis 39:10Gotcha, gotcha. I want to do some, some final questions around, you know, the Constitution and how we think about the Constitution. The Constitution is not just a living document, it's kind of the set of norms we have around it, and it can evolve and change. You've got a legal background, you've written a book on political polarization. You know, how should we theorize about how the Constitution actually works? You know, like, in the Supreme Court, did they just they sit together in a quorum, and they kind of like interpret this and, and hand down verdicts to the rest of us. You know, how impartial are they? Do you think they do a fairly good job? A poor job? something in between? Yeah. Like, generally, what do you think about kind of the state of the Constitution at this point?

Jordan Blashek 39:52Yeah, well, it's such a relevant question, given what's happening with Roe v. Wade. And, you know, I think sadly, the Supreme Court where it is, was sort of the last holdout of a hyper politicized America. And, and now today, it's sort of, you know, over 20 years is sort of now fallen prey to the same hyperpolarized polarization forces. And, you know, the reason I love the Constitution, so much and constitutional philosophy is, it's just so rich, and so many brilliant thinkers have spent their lives diving into it and coming up with incredible theories over the last two and a half centuries. And it pulls from the best of various philosophical traditions and religious traditions. And, you know, there's some Talmud elements to it, it's just a fascinating area of study. And the, the theory I liked the best was one of my professors, Jack Balkan, what he called Living a rich originalism. And what he would argue is that the constitutional moment was a really important moment, you know, the whole, of course, the Constitution was written by the framers, and they, you know, they wrote rules in there, they wrote principles in there. But what really mattered was not who wrote it, but who ratified it. And the moment the Constitution was ratified, every state had the opportunity to essentially have their own process. And nearly all the states kind of expanded the electorate beyond anything that had ever happened in the history of humanity, so that more people than ever could, could vote in the Constitution. And of course, it was imperfect at the time, and, you know, for all the reasons everybody knows today that women can vote and African Americans can vote, but it was it was this. For the time it happened, it was the most democratic moment in history. And with that ratification, the important thing was, what did everyone think the Constitution meant? You know, what did it mean to have a right to bear arms? What did it mean to have equality under the law? And while there are certain hard rules in the Constitution, like, you know, you can't be president until you're over 35. That's not open to interpretation. It's not like well, 35, then is 65 today, so like, you have to be 65. It's just a hard rule. But there are other things that are principles. And those principles are both timeless and ever changing, you know, quality under under the law is timeless. But our understanding of it evolves, and what matters is that every generation of Americans wrestles with what that means, what does it mean, for us today, to have a quality under the law when you know, everybody with a cell phone can can film you doing stuff? And so like just due process, matter, when you could sort of be crucified in the public square over social media, and not get your day in court? So like, how do we understand that. And so I think what I find beautiful is this idea that every generation gets to kind of renew that founding moment, because we all debate what it means, over these principles, and ones that, you know, everybody knows, due process, equality, under the law, equal opportunity, these are things that every generation gets to wrestle with, and in doing so take part in that constitutional experiment in process, which I think is beautiful. I think that the challenge today is that, you know, civic education is not that great anymore, I think very few people kind of understand the constitutional structures and, and what it means for them to engage over it. And so the one upside of these complications over things like Roe v, Wade, or others, is it gives us the opportunity to talk about this and to to kind of wrestle as a nation with, you know, our constitutional process and, and how it should be evolving, given dramatic changes to, to the nature of society over the last 250 years. But that's the theory I love the most, I think it's beautiful, it ties into this idea of covenant, that, you know, we're all bound together, and the project makes us something more than we were before, you know, it's not just an IOU, it's a we and how that forms is, is through that process of, of engagement. So that that's my favorite theory. We wrote about it a bit in the book. So, you know, I'd actually love to hear hear your thoughts on that. And, you know, given the number of people you've talked to, and what you read in the book, like, how do you see what's going on with constitution and how it applies to us today?

Will Jarvis 44:08You know, I really, I really love that theory. I think it's, um, I yeah, I think it's great. But the one challenge I see is, it's just this this problem. It's like, kind of like the Norway problem. It's like America was much smaller than and it's like, kind of easier to get consensus when you just have less people to go talk to right. And there's less nodes in the network that you have to kind of bring people together. It's challenged to scale this up, and I think we've done like, all things considered a pretty decent job, but I do I do really like that. That theory. And yeah, I think it makes makes a lot of sense. It's really cool.

Jordan Blashek 44:42Well, so to your point, I think one of the there's another law professor at UT, Sanford Levinson, who, who argues that for most of our history, we've kind of we've iterated on those principles. So you know, what does equality under the law mean? And we we haven't really iterated on structures and so Maybe given changes to our society, it's time to innovate on the structure a little bit like does, you know, does the you know, the electoral college makes sense? Does the, you know, to person Senate proportional house makes sense? And can can we innovate on some of that to create a better functioning? System? And, you know, there are structures in the Constitution that allow you to innovate. So it's, it's a good point you raise, I think, I think it's, it's worth a lot of deep thought about how we account for the size and scale that we're at now relative to past area, and how social media, I think, turns local issues into national issues in a way that that's new, and it creates difficulties.

Will Jarvis 45:40Yes, yes, absolutely. Well, but one final question for Jordan, you know, long term, do you think we will see kind of political polarization kind of recede? Or does it just kind of get crazier and crazier? And if you just say, receding, you know, what does that path kind of look like? Do you think is it like, culminating around some kind of great power conflict with China? Is it something else

Jordan Blashek 46:03I sort of ascribe to the cycles of American history theories, where I think we tend to arrive at at some consensus, some dominant sort of approach that that leads to, you know, 3040 years of, of, you know, shared understanding and stability, which then begins to, you know, unravel a bit and as the world changes, the economy changes, we then start to like, drive apart, and then you know, something happens that, that creates a new consensus. So if you look at like, you know, leading up to World War Two, you had a very hyper polarized country, very different views on how to respond. And then coming out of it, you tend, you had a very sort of aligned nation for 30, you know, maybe 20 years or so, similarly, a lot of social tumult in the 60s and 70s. And then, you know, with the Reagan era, you you had sort of a shared view that, that big government should come to an end, and we should have lower taxes, less regulation, pro business environment, and you got the sort of next wave and, you know, even Bill Clinton kind of accepted that, that sort of dominant view and, and govern that way. And so I think you have those cycles, and I think we're in one of them right now, I think it's gonna stay fairly tumultuous for the next five to 10 years as we wrestle with this new environment, and what ideas can actually transcend it? And I do think at some point, we will have a new consensus in the country that will inaugurate you know, hopefully, 20 years of just great prosperity and growth and collective purpose for the country. That's, that's my hope. Again, I said at the beginning that I think all of this is contingent. So it really depends on on what we do.

Will Jarvis 47:52Really well, but Well, Jordan, thank you so much for coming on the show. Where can people find the book? And where can people find your work?

Jordan Blashek 47:59Oh, thank you. So union, the book is, it's on Amazon. My author's name is Chris Hall. He's amazing writer from Berkeley, and my best friend, so I hope people check it out. It's a fun, quick, easy read. And they can learn more about America's frontier fund at America's frontier.org and see what we're up to. It's, it's it's an usual fund as a nonprofit, but we think it has the potential to really help galvanize more investment and more more innovation in deep tech. So we're really excited about our new mission there.

Will Jarvis 48:34That's awesome. Well, thank you, Jordan. And just for the audience, I really love the blog, so I encourage you to check it out.

William Jarvis 48:39Thanks. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out Donovan's work and music at Donovan dorrance.com

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past towards a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Jarvis: 0:39

Well, Aaron, how are you doing this morning? Anyway, so do a great for the audience. We also have the esteemed Lars to stay with us to talk to Aaron, really appreciate having him on to kind of co host this this morning. Aaron, do you mind giving a brief bio and some of the big ideas you're interested in?

Aaron Hamlin 0:58

Sure. So my kind of technical background is in the social sciences. I have a law degree. And the bulk of my professional career has been starting up nonprofits, I've done a couple of them. One was providing funding for pharmaceutical drug development to get new male contraceptives to market. And the one I'm working with now, which I also founded is the center production science. And there we study different ways to vote, like how you fill out your ballot and how that's calculated. And we work on cooker way a kind of pool voting, which lets you pick as many cans as you want. And we work to with local communities, at the city level and going into the state level to get that implemented. And we've taken a very whether that has never been implemented before government elections, and so far kind of implemented in two cities working on the third and are getting ready to pivot into states.

Lars Doucet 2:05

Now when you say I've never been implementing governments before, do you mean American governments or any governments? But

Aaron Hamlin 2:11

technically, it was used in a variation in Greece about 100 years ago for a bit. But other than that, I'm not aware of any,

Lars Doucet 2:22

I won't hold you to that level of.

Unknown Speaker 2:27

That's great. Eric, can you talk about approval voting just for a bit what it is and why it's superior to other methods?

Aaron Hamlin 2:34

Yeah, so I think So normally, when you go to vote, and I think when you go out on the street, and you asked me one, what is voting, they would tell you where you have this ballot in front of you, with some candidates, pick one of them, and a candidate with the most votes wins. And that is an example of voting. But that's not the essence of what voting is. Voting is providing some expression of information. And then that expression of information is aggregated somehow with all the voters. And that aggregation turns into a result, where you have some measure of support for all the candidates. And the candidate with the most support is the one who is selected to hold that office. Like that's what voting is. And you can do that in all kinds of ways. A lot of times people get fixated on the information element, like what information you're putting on the ballot. So whether you're picking one candidate, whether you can pick as many as you want, whether you're ranking candidates, whether you're scoring them on the scale, but you got to do something with that information, too. So, for instance, there's all kinds of things you can do with ranking information. You can simulate pairwise comparisons between all the candidates, you can simulate sequential run offs, you can turn them into point values and add them up that way, all kinds of stuff. So with the approval voting is really among this, the simplest voting methods. So with approval voting, all you do is select as many candidates as you want, and the candidate with the most votes wins. And on this surface of it, it doesn't sound like a whole lot. And really, there isn't a whole lot to it in terms of like what you're doing and adding up the results. But that small difference has a big impact. So, for instance, when we're using our choose one method, if there are multiple candidates that you like, well, you're screwed. I mean, you got to pick one of them. And as a consequence, those candidates will get a portion of the actual support that they actually deserve. And so the pool of voting, you're not splitting your vote and so you can, these candidates that would have otherwise gotten diminished support, now get their accurate measure of support and you won't have some extreme candidate coming in out of nowhere. Do you happen to not have their support divided, winning as a result? The other cool thing is like we think about independence and third parties, largely to the extent that they don't get elected, and that we shouldn't vote for them, because we don't want it, they're a vote away. Or approval voting just deals with that right off in a way that other voting methods don't do well, including some alternative voting methods. So say there's that independent, they've run, your wildest dreams have come true, you get someone who likes all the policy issues. Unfortunately, like, no one, like knows this person's name. They don't have millions of dollars in their war chest. But he loved their ideas. They come with great ideas, all the policy concerns you'd like they've gotten all of them. And normally, you'd be stuck with this dilemma is like, alright, well, my favorite candidate ever is now running, do I support them and like not have a say in the outcome and ultimately, like not being able to pick a real winner here. But with approval voting, you don't have that dilemma. You just vote for them. And if you're in this other dilemma, and thinking like, Okay, well, I also want to have a say in the outcome, if I don't think this candidate can win, well, you can support a one of the front runners at the same time. But importantly, the candidate that you like, they get the support they deserve. And they can grow on that. And their ideas don't get marginalized in the same way. So it has all these other important outcomes as well.

Lars Doucet 6:25

So you're saying that even if you know, Mr. or Mrs. Perfect, but also Mr. or Mrs. Complete, obscure outlier? approval voting, even if they don't win that election, you can still show that they had 10% 25% 30% support, right? Is that what you're saying? And then they can take that and be like, see, I'm not a marginalized? Nobody I did way better than anyone expected. And then they can go on to be a front runner in the future. Is that what you're saying?

Aaron Hamlin 6:51

That's right. And so the voting method is not only used to determine the winner, but it's also used in polling as well, because people can't wait until election day. And they gotta have some kind of inkling in terms of who they think is going to win. And so they they match the polling to the actual voting method. And we I mean, you'd expect this to be true as well. But polling itself is used in a lot of important context. Not some of them are used to determine whether someone gets a debate or not. And if you have low polling, well, you don't get on the debate stage, no one gets to hear your ideas, which is particularly important with presidential elections. But with approval voting, the polling would match. Because why wouldn't it I mean, polling is used to make a prediction and you don't use a different measure, then is actually going to be used on election day. So if you're using approval voting on Election Day, letting people select as many cans as they want, then you're going to get the polling the same way. And so if you're able to get much more accurate reflection support, then you get that support. And if someone is using that criterion of polling to decide whether you get into debates, where now you get into debates in a way that you otherwise wouldn't have people get to hear your ideas in a way they otherwise wouldn't have. Are

Lars Doucet 8:11

you? Are you making the point that the mechanism of polling is essentially approval voting, but the way we actually vote is like first pass the post or whatever? So we're tests we're predicting how the elections kind of going to go in a way that doesn't match actual mechanism for we elect? Or is there more nuance to it?

Aaron Hamlin 8:26

Well, right now, we use this choose one voting method for polling as well. Sometimes you have approval polls. But typically, they're looking to figure out who's going to win on election day. And to do that they match the voting method. But if the voting method was approval voting, they will use approval voting for the polling as well.

Lars Doucet 8:46

So you're saying we would get better polling as well, if we had approval, elections and approval polling.

Aaron Hamlin 8:53

If you had approval voting, you'd also have a pool voting in terms of polling as well. And it would be used in the same context as trying to pick the winner. But you would also get the benefit of approval voting just as a far better job than our choose one method and many other methods. In fact, in terms of accurately measuring candidates support, even candidates who do not win, they all get a good accurate measure of support. This can also be shown empirically, which we've done and published on. But you get that advantage when you're using Pro voting for the voting method, as you also get this accurate measure of support during the polling phase as well.

Lars Doucet 9:30

So New York, I believe, was his last New York mayoral election where like, Yang ran against Adams and stuff they used I believe, rank choice voting correct me if I'm wrong, that's correct. Yeah. And so can you talk about the differences? That's another often hyped example, like, well, if we just did rank choice voting, that would be better. And apparently they got that in New York. So can you compare and contrast? first past the post rank choice and approval voting, and just give us your thoughts on those?

Aaron Hamlin 9:56

Sure. So I guess first I'll explain what rank choice voting is. So earlier I said the voting method has all these parts. One of them is that expression element like what you put on the ballot? Well, with rank choice voting, big surprise, your ranking, which, to me is a little weird in terms of naming because in actuality, there's an entire class of voting methods that involves ranking. The traditional name for rank choice voting is instant runoff voting, and some other countries that call it by different names like the alternate vote. So it's kind of weird that they call it rank choice voting, because like, there's actually a whole class of voting methods that involve ranking in any case. So you go and you rank your your candidates. In many cases, because the ranking process can take up a lot of space on the ballot, it's often truncated to like your top three or top five. So you can kind of be losing information right off the bat. And so when you're when you're ranking these candidates, when we first look at is the first choice votes. In terms of the calculation after everyone is done ranking. Now you look to see if any candidate has more than half of the first choice votes. If yes, you've got a winner. If no, you look to the candidate with the fewest first choice votes, you eliminate that candidate, you look at all those ballots next choice preference, you now treat that as a first choice vote. And now you go and you add everything up again, you say okay, now, among all the remaining ballots, does anyone have more than half the first race votes, if yes, you've got a winner. If no, you keep repeating that process, with the remaining balance, which also may not be all the initial balance, because through this process, not everyone ranks or all the candidates down the line, or maybe they ran out of space on the ballot. So really, you're just talking about the remaining balance here. So you have a kind of simulated sequential runoff is kind of what's going on here. And that's rank choice voting. Now, one thing to keep in mind here is that virtually any voting method is going to be better than our choose one method. So you do hear a lot of folks say like, well, like it is better than our choose one method, well, anything is better than our choose one method you can pick, there are many, many voting methods out there, you can pick any of them in any of them will do better than our choose one voting method.

And in terms of how it does in other contexts, it can do some weird things. So for instance, like in our choose one method, we think of vote splitting, among our top preference, which is our only preference in our choose when voting method, we can kind of have that same kind of thing going on with rank choice voting as well. So if you have similar candidates running, and one candidate has their votes, but Well, if that candidate has the fewest first choice votes, merely through votes playing, they can get knocked out of the race early on. So that's one issue, you could prematurely eliminate a good winner, who would otherwise be a good winner. The other component is it doesn't do a perfectly good job of measuring the support of all the candidates, particularly ones who don't win. It does do better than or choose one method, but again, like not by a whole lot. And also, pretty much any other voting method would also do better than or choose one method. And so what you wind up with as a result is a lot of independent third parties get behind victorious voting, I would say a bit erroneously thinking that they're going to get more support people can choose her on his favorite. Well, in fact, there are certain conditions when folks are kind of punished by choosing their favorite is first which we seen in actual elections, such as the 2009 Burlington, Vermont election. But in addition to that, even when folks even when it doesn't kind of go against them. The other issue is that it, it doesn't really show their support, because if someone ranks, say, an independent third party a second, or that independent third party has already eliminated those other rankings, showing support for that third party never appear in the results. And again, this is something that we've seen empirically, looking at polling using experimental designs, but now we're seeing raytrace voting being used in actual elections. And you can see this play out in real life. So for example, Maine, has been using retrace voting and it has a real independent streak. So you would think, well, if anybody is going to be treating third parties and independents nice, it's going to be this folks in Maine. But when you look at the 2020 election, and you look at the Presidential results there which you just rank choice voting, they do no better than they do in other years in terms of when you look at the Libertarian Party, and the Green Party, and a very terse voting was gonna be able to kind of pave the way for them, you would have seen it there. But you saw no difference in terms of results.

Lars Doucet 15:16

There's also the there's also the question of like, the cognitive load of actually building, right, like, I remember with the New York City campaign, you saw these people saying it's like, okay, so like, for like people voting, it's like, okay, you can vote Yang, but rank him here, do this. And like everyone arguing about who gets the top spot and stuff like and approval voting, it's just like, if I want to vote for Smith, and Johnson, and, you know, lastly, I just stamp all three boxes, right? And I'm done. I either would be happy with them winning the office or not. And that's the only decision, right? Is that all there is to it? Is there any like pros and cons to it being that simple.

Aaron Hamlin 15:53

So that is a big component. So if, for example, if you have a large list of candidates, it's way easier to just go through and say, These are the candidates I like, versus trying to rank them all. I mean, you can go through the process in your head, like just imagine a list of like 25 or 30 movies, and find all of what you've seen, and rank them versus go through and see like, okay, what are the ones I really like? Like those two processes are very different, and one is way quicker than the other. And for as an example here, and this kind of goes at some of the limitations of rank choice voting is that you can also, it can also kind of stumble a bit in, if you're trying to use something like open primaries, where everyone can run at once and say, like the top two or top four, go to the next round. As an example. In Alaska for, for instance, they have a an RCV election, where there are 48 candidates on the ballot. And like, and, and because our CD has challenges of trying to nominate multiple candidates to the next round, what you're seeing there is that they're forced to just use choose one voting in that first round. And so you can only imagine the amount of votes voting that's going on there.

Unknown Speaker 17:16

I'm curious, Aaron, you're super smart guy, you've got a lot of options. Why did you choose approval voting? Was there like an aha moment that you know, was it a third party candidate that didn't get any recognition? Just the intransigence of American politics, like what kind of pushed you to work on this problem.

Aaron Hamlin 17:37

So when I was in grad school, I was in the student group for healthcare reform. And I was out with a bunch of folks in the student group. And we were all this was 2008. So we were all talking about who we were going to vote for. And as we were going around the table, I was a bit surprised, because all my friends were talking about voting for people who I knew didn't align with their, their interests. And also like, they didn't actually support the health care policy that we were in the student group for. So it was kind of giving them some flack about that. And they were saying like, well, you know, if I support this candidate who really thinks the way that I do, they're not going to win. And so I was kind of annoyed. And I thought, like, well, like, either I give my friends a hard time, maybe I wind up with fewer friends in grad school, because it'll be what's put up with me, or looking at it from the terms of like, okay, well, there's some parameter here going on that shaping their behavior that's causing them to act this way, which really, they were seeing explicitly saying, like, hey, like, I don't want to throw my vote away. And so that's what got me interested in voting methods. And I just kind of got obsessed with them from there. But also, I spoke with other folks. And really was trying to look at this parliament in a fundamental way. And when you're when you're looking at a problem like this, you have to ask really just kind of basic questions. One of those basic questions is what makes a voting method good in the first place? And when you and asking that question, I think there are really three big criteria that come up. One is winner selection, which is one of the voting methods, core jobs can't do that, well, then you might want to start looking elsewhere. The other component is how accurately it measures candidates support. So it's a voting method has more than a job of just selecting the winner. You want to make sure that I mean, election is about also being able to measure at this point, different ideas. And if a voting method doesn't measure support accurately, then these other ideas that other dialogue happens in a in a in a poor way. And then the third one is practical. lobby. So you don't want something that's needlessly complex, or more complex and has to be given the value that it offers. You want it to be easy to implement. To the extent that it can be an approval voting, this really checks all those boxes really well. And that was the main rationale for going in that direction. Of course, the challenge was, it hadn't been used for government elections, it was used a lot in academia, at some academic, academic organizations. And so we had to show proof of concept first. So we did that like so in the very, very tail end of 2017, practically 2018, in the beginning, was when we got our initial funding. And within a year of our initial funding, not only do we hire staff at the organization at this inflection science, but we also got approval voting implemented in its first US city, within a year of our initial funding. And so so we had to show that proof of concept, then replicate that and scale that to show that this wasn't some one off thing. And so we've been doing that at the city level, we started at Fargo, North Dakota, then moved to St. Louis, Missouri, working with the community there. It'll now be on the ballot this November in Seattle, Washington. And looks, its polling at 70%. There, so it's looking good there. And then we're at the moment, looking at pivoting to statewide campaigns where we're not just we won't just be affecting local offices, like we have with the cities we worked with before. But we will be affecting statewide positions, federal positions, Senate seats, US House seats, as well as presidential elections. And we do this all through ballot initiatives, because there's a inherent conflict of interest when you ask the people who are elected by the old voting method to change the way that they get elected in the future.

Unknown Speaker 22:06

Aaron, I love this, how you went from zero to one, you know, one year implement something that really has not been done before? In a say that it says super cool. What was your, you know, approach and figuring out, okay, I found this new method, I think this will be like very effective, this will really help the world to implementation. What was that process? Like? Was it like reading literature trying to figure out how to do this? Did you have previous experience which informed like valve initiatives? Those are, that's the way to do it, versus lobbying or something like that? Like, how did that process kind of unfold?

Aaron Hamlin 22:37

As well, in terms of like the thinking process, we had, the the initial group that we had was pretty technical with our initial board. So like, we had engineers met petitions, our advisory board was really amazing. Steven brands, political science professor at NYU, one of the independent developers of approval voting as on our advisory board. So all that was very critical in terms of being able to help our thinking, in terms of the pathway, it helped that we weren't the so we had what we call a second mover advantage. So with raytrace voting, it had a multiple decades headstart in the space. And so we don't have to start from scratch. We can just kind of look around and see what was done before, see what was successful before and see what wasn't. And we just don't do the things that weren't very successful. And then we do the things that worked. And so we just did that. And ballot initiatives seemed like the clear path there.

Lars Doucet 23:46

And what were the things that worked and didn't work? I think,

Aaron Hamlin 23:49

one, there's also kind of an order effect, too. So the bail initiative component was definitely one that worked well, particularly at the city level. In terms of what didn't work, it lobbying seemed to be one of those that at least wasn't going to work at the stage that we're at. So

Lars Doucet 24:11

sorry to interrupt. What do you specifically mean by lobbying? Do you mean lobbying? Personal politicians?

Aaron Hamlin 24:16

Yeah, yeah. So. So like, normally, when you get something on the on the ballot, you get some super excited folks locally. And you get and they go and they collect a bunch of signatures and it gets on the ballot, people vote yes or no on it. If you lobby, people who are in office, they can put on what's called a referendum which is a little bit different than initiative with a referendum. Like for instance, a council would just vote on it and they would put it up on the ballot. So you skip that whole signature phase. And you already come in with buying from the from the local government. So you can you can do Do that approach, but it's not as easy when you're dealing with something that's a bit newer. And because approval voting hadn't been implemented in as many places, that route is a bit more challenging. So that's something that isn't something that says that we can't do in the future. It's just something that is going to be harder in the earlier phases.

Lars Doucet 25:23

And you talked spoken before about how, specifically when you're trying to change the voting system? You I think you just said that another reason that personal lobbying of individual politicians is ineffective is because you're basically asking them to extinguish the voting system by which they themselves came to power.

Aaron Hamlin 25:38

That's right. Yeah. So can you talk about that a little bit more? Yeah, people just don't like to make it harder on themselves to get reelected. And if they got elected by certain way, then they're like, Okay, well, this is I change that I don't want to hurt my chances. And so they tend to be oppositional. And so we, I mean, we, we talk with, and we get the local advocates that we work with, work with the local government, but we don't rely on them saying yes or no to us. I mean, we just say like, Okay, well, gave you a heads up, it gave me the opportunity. If you say no, here, like, we're not going to stop, this is going to pass. So you're just going to have to live with it and have better elections.

Lars Doucet 26:21

I think one of the reasons we're so interested in talking to you about your experience is that the conventional, numerous wisdom about America that we've just gotten gridlock in every level, and nobody can accomplish anything, change will never happen. And so it's very interesting and heartening to see you do this like was well said, like zero to one experience where you had this idea you wanted to move to get it done, you figured out how to get it done. And you got it done in a couple of places. And I was wondering if you could speak to the whole, like, gridlock and numerous just aura descending upon us and how you like, like, Are you optimistic moving forward? Like, do you think it's just about? Yeah, just just like, how did you pierce through that veil? Or were you just like, oh, just do what works?

Aaron Hamlin 27:07

Well, I mean, I think a little bit back to like that conversation I had with the dinner when I was in grad school with my classmates, I, it would have been really easy. And I think it's easy for a lot of us to say like, like, these folks are making terrible decisions. I'm definitely these people were acting in their interest. They were just tactically voting. But particularly when you're looking at behavior at the population level, it becomes, I mean, you can blame everybody, you can blame millions and millions of people. You could do that. But I think a more practical and useful approach is to think about what are the parameters that are shaping their behavior. Again, if you're in a game, or you're playing some kind of game, you have certain rules, and that those rules determine how what your strategies are, how you behave, how you interact with others. And it's really hard to just go through and just convince millions of people to behave differently, particularly when the rules suggest that they shouldn't behave that way. So if the rules are really the problem, you got to change the rules. And that's how you're able to shape behavior and get people to begin to operate in their own interests. So when we think about gridlock, it's like, well, yeah, sure, like people who don't have the there is there are very few opportunities when we can't be ignored. And one of those rare opportunities is when we like, when when we vote, like the with the outcome that we get there, they can't just say like, Ah, well, we're gonna ignore that one. Like they have to that's binding like they they have to switch seats, if the results tell them to switch seats. And it's a real shame that in that very rare instance, where we are able to have power, that the tool that we use is so bad, like we just, we are armed with this really terrible tool. And what we're saying is, well, you deserve to have agency like this is the one time where we can create that realignment where the people in government where their interests should align with yours. So why not give people a tool that actually allows that to happen, rather than this crappy tool that we have now let's choose one voting method. So all we're saying is like, Okay, well, you deserve a real tool that gives you agency. Here's that tool. And that's really the big game changer in terms of allowing people to avoid this gridlock that we're stuck in right now. Because if if I mean, if even if it's like your own party, if if they're not, like listening to you like, what are they gonna? Do? They don't have to listen to you like, where are you gonna go? Like, what are you going to do? And that's really the situation that we're in now. Whereas if we have approval voting, like, nothing gets some competition, like, if somebody comes in there with some good ideas, they don't have to worry about the same kind of dilemma that they've had in the past where it's like, okay, well, nobody's gonna vote for me. Because I'm a new person I have. It's kind of name recognition is like, no, no, you can get traction, you can get support. And you can hold these folks accountable, that aren't doing their jobs. And that's something that we just have not had before.

Lars Doucet 30:41

So how do you how do you get it done? Walk us through, you've done this in a couple of cities. How did he get it done? How much does it cost boots on the ground? What's What's the formula?

Aaron Hamlin 30:50

So I think like our initial couple of cities, were a bit. folks coming to us. So the first city in Fargo, North Dakota, is marred by crappy elections, which is not unique to Fargo. It's all just all over the place at the local level. But all of it like every level, but also the local level. And so the people were were waiting, like with under 30% of the vote and getting elected to the commission. And the commission, I guess, was getting embarrassed by this. And so they created a task force, the task force, went out looked at different voting methods, one of the folks in the task force reached out to us learned about approval voting, and brought it back to the task force and said, like, hey, like taskforce is on board, this is really easy to implement, seemed to address the vote splitting issues that they were having recommended to the commission. And commission just sat on their hands, they didn't do anything. And so the the member from the task force, got everyone they knew, gather signatures, got on the ballot and passed it. And that was the first implementation. And they worked with us along that process. The second in St. Louis, I had done a podcast called 80,000 hours. And one of the folks in St. Louis, had heard that and was talking about a cool voting. And they were initially looking at raytrace voting, which the machines in St. Louis couldn't handle. And they needed something that wasn't going to be expensive for the city. And so they reached out. And, again, similar. They're like, there was a story where the former mayor and St. Louis, you may have seen this, like, there were a lot of racial issues there. And there were protests. And this was also that during that same time, or a couple, like a couple, outside their mansion, like pointed their guns and a bunch of protesters is that same place. And so the former mayor doxed protesters during that, during that time, and just gave out their personal information, like where they lived and stuff. And like, that's their, that's their mayor, like, that's their former mayor. And that person got their office, see, through a bunch of those putting, there was a bunch of those putting in the black community and the progressive community. And as a result, there wasn't as much of a split among her ideology. And so she wound up winning. And when So, when approval voting was getting momentum, it got on the ballot, and it passed there are passed by 68% in Fargo passed by 63%. The moment have passed that mayor who docks are their citizens names who were protesting. All of a sudden decided, as an incumbent that it makes sense for her to run anymore. And so she saw the writing on the wall, so to speak, and she decided not to run. And then the in the next election, you didn't have that expiring and you had, like a more progressive community. You saw the leaders under approval voting, once it was being implemented. Those tended to be more progressive voices, which is common in big cities. And also, it didn't neglect the black community as well. And so St. Louis selected its first black woman Mayor after approval voting was was implemented. And, and Seattle is a bit different. And that, again, the vote spreading all over the place like every city, and Seattle came about as a result of our chapter system. So we have a nationwide chapter system, which our director of campaigns has set up. So folks in every city in the country, every state in the country, although we right now are particularly focused on balancing of cities and states. So the leaders in that campaign came out of our chapter program. So we worked with them. We gave him some initial reason sources that they needed to be able to help them move along, give them advice about different components of the election. And as a result, like they're ready to run a campaign and they, right now, they, the city of Seattle is in the process of verifying all their signatures. And so, so it's a little bit different in Seattle. And we've pivoted more towards that chapter approach.

Unknown Speaker 35:26

So it sounds like, one thing that's really important is to find kind of a first wedge, you know, where's your Fargo, North Dakota, where you can be successful? Like, if someone reaches out to you like, it's friendly territory, it's fairly friendly. And you can kind of push it through and then kind of use that momentum to go on to bigger and bigger kind of places to implement given policy, is that a fair kind of strategy

Aaron Hamlin 35:49

approach? Yeah, I mean, you're basically thinking about an adoption curve, you go where the lower hanging fruit is, first, where or like, where things are more cost effective. And we're likely to get your early wins, and then you build up over there. So for example, like, lobbying is a harder approach, you tend to need a bit more momentum already, to have more wins, so to speak. And so like, that's something for like the later part of the adoption curve, whereas right now we're focusing on where are those wins are a bit easier, a bit more cost effective?

Lars Doucet 36:30

And so on the cost effective aspect, it's like, Can you can you put a price on a ballot initiative to get approval voting past? Like, you know, fundraising is a big part of any of these organizations, you know, can you break down like your cost structure for us in terms of, you know, money and, and human power and just boots on the ground trying to get it done?

Aaron Hamlin 36:48

Yeah. So there's the direct costs for campaigns, it's also like, for CDs, like to be able to have the infrastructure that we have, which we are underfunded as an organization for concrete for what we do. We, in our first year, ces started off with a budget of like 700,000, we now have a budget of around 2 million a year. But for what we're doing is, we could use a whole lot more. And that's for like, being able to do all the research that we do, looking at the results of all these elections, using experimental design to compare different voting methods, being able to do the the outreach, getting people to learn about these different voting methods. And in terms of the actual campaigns, kind of the Euro stick is like, at the city level, like maybe $1 or so per person in the population, because and one of the big parts that eat up a lot of costs is the signature gathering, which is just not cheap. And then actually running the campaign, having a campaign manager here, like the, the Local Group is the one that hires that person. And then at the state level, things can get even more expensive, because signatures, like you need a whole lot of them, even in proportion to the, to the population itself. So, I mean, you can see, some campaigns cost way more than that. So, for example, like I think the Alaska campaign was like four or $5 per person in the population, for their campaign. But you can do it more efficient than that. And when you have a voting method that's simpler, you don't have as high of educational costs as you do with some of these other approaches. So you get a good bang for your buck when you're doing your pro voting campaign. But nonetheless, it's still a non trivial price tag, but it is an efficient price tag for what you get out of it.

Lars Doucet 38:59

So you're talking about signature gathering, right? And so if you're coming in as an outsider, you're inevitably gonna have to go through the signature gathering. So given that, I wish I could remember which jurisdiction I suppose but there was a scandal recently in some jurisdiction, were like three or four or five of the candidates, I forget how many but it was, like several of them have all used the same, like organization to go harvest signatures for them. And they like all got invalidated at once. Because like, this organization had basically like not, like not done it right, and had like, made up a bunch of signatures, like use the same pen in the same handwriting, like five lines in a row. It was like super obvious. So like, what are best practices for signature gathering? Like doing it? Right? You know, that you've just, I mean, is it just hard work and how do you how do you do it efficiently and effectively?

Aaron Hamlin 39:50

I mean, the, you just have to do your research and identify your really good suit together and firm at the at the scale that you're talking about. Like you you can't do this with But volunteers, it's just the the amount of signatures you get as far to events. So you just have to get a reputable firm. But even then, like, even with reputable firms, like we've seen firms, not on our end, like fortunately, like we've haven't had any issues, but we have seen other campaigns with firms and Tim good. And it's just super easy to make mistakes. And some of these, and as you can imagine, there are a lot of folks who don't want to see the voting method change. And so they have their eye on you at all times ready to stop you in your tracks in terms of the campaign. So and practice, you just have to really kind of double check things and make sure that you have a firm with a good track record.

Lars Doucet 40:53

But you see, you really are hiring professionals with expertise and signature, you're not sending out a bunch of teenagers just wait outside the Dairy Queen. And just like ask people to sign up, like, you've got professionals who know where the population centers are and know how to like pitch your thing, like how much do you interface with them, that you have to train them on your messaging and everything like like, how does that work when you when you when you when you when you sign that kind of a contract was with outside firm. And

Aaron Hamlin 41:20

what we've done with at the city level so far is the local groups have been the ones to work with their signature gathering firms, and they could work with them on messaging, they communicate with the firm themselves to make sure that they have the messaging Correct. Of course, like you're playing a little bit of, of telephone, and like when you have tons of folks are in the center gathering, like maybe the message isn't communicated 100% to degree that you like every time, but they do a good job overall. And so it's a lot of just communicating with the firm, being clear on what it is. And, and, and again, like it goes back to like, when you're dealing with something as simple as approval voting. It keeps up fidelity a lot higher than it can be in other situations, other types of balance sheets,

Lars Doucet 42:11

I was gonna say it helps to have a simple direct message, right? Yeah, if you have some complicated thing you're trying to get across, not only to your firm, getting signatures, but to the person on the street trying to convince someone to Hey, will you sign up for the last we'll doodle super on policy? You know, that might be a hard sell.

Aaron Hamlin 42:29

Yeah, that's trade art. Because right choice voting has gotten a little bit of a head start our largest issue, I think, with a lot of these folks asking, like, is this rank choice voting? And it's like, no, this is way easier. And actually, it even works better.

Lars Doucet 42:44

Okay. So on that angle, there's another, I don't want to go too deep into all the different kinds of voting methods. But there is one that's kind of salient in our milieu, which is not ranked choice voting or approval voting, but it came out of Glenn Wiles book, radical markets, quadratic voting. Are you familiar with what that is? And do you have any opinions about that you'd like to share?

Aaron Hamlin 43:03

So with quadratic voting, and this is not one that I focus on as much, but the and you correct me if I'm off it, because I don't focus on it as much. The gist is that based on your time and an area, that you can allocate your, the weight of your vote to different offices, how you see fit. And it's like, technically, you can nest the voting method within that. And that can be kind of like a higher level. But like, overall, like, I don't know, like, I I suspect that there may be some, like, maybe 14th amendment stuff with like, Equal Protection Clause, because you're maybe giving people who live there, longer, disproportionate weight, and perhaps their issues with that. But the, it does kind of go and look at something like okay, well, what are we ultimately trying to address? And how complex is it like, and what are the what's the complexity cost that we're that we're paying for this improvement? And are there easier ways to improve that have a lower complexity cost?

Lars Doucet 44:11

Right, I think I agree. I mean, I think we might be talking about different forms of quadratic voting, and when I'm thinking about is the one where you have, say, 100 points to allocate, but when you vote for someone and you assign a point, they get the square root of the point you get. So if you to give someone two weighted points you have to spend for your points. And I have my own thoughts about it, but I'd be interested in yours.

Aaron Hamlin 44:33

Yeah, and my recollection, and again, this is not a voting method that I pay as much attention to because it kind of falls out outside the kind of like the traditional classes of voting methods. My initial understanding was that the amount of weight that you had could change based on how long you lived in a particular jurisdiction. Oh, but if If we kind of like single that out, and it does avoid some of those other issues that could come into play, such as someone who lives there longer getting greater weight overall. Putting that aside, like the essence, I guess it's like, okay, well, what are the elections that I really care about? And I'm only going to focus on those, for instance,

Lars Doucet 45:22

right. I mean, I guess I guess the the critique, typically that I've heard is that it's like, Okay, now it's even more of a math problem than rank choice voting. You know? So,

Aaron Hamlin 45:30

I mean, let's come back to that complexity cost, right.

Lars Doucet 45:33

I mean, um, maybe we'll have to learn why alone and ask him his opinion on it. So you can give a more robust defense, but so you are very much in favor of these very simple voting methods. And I think it's really interesting how you get out there, and you've just kind of engineered this way to, like, get these things done. So you say you've had two cities, you've done it in so far, you've got an active campaign and a third, like, what's the end goal here? Just approval voting on everything throughout America?

Aaron Hamlin 46:02

Or? Yeah, I mean, I think we could do that. And there are roughly 20 or so states that use ballot initiatives, we will just exhaust all those states working with folks across the country. And once those are exhausted, we'll do lobbying. And we're working on picking up the remainder.

Unknown Speaker 46:27

Very cool. Very cool. Aaron, I have a quick question just just on fundraising. What is your approach? Ben, do you just reach out to wealthy people that might be interested? Is it more grassroots? What's been effective? What has been less effective? Yeah.

Aaron Hamlin 46:43

So in the very beginning, we had no money, which is very challenging. So we would do things like crowdfunding campaigns, all my friends got tired of hearing from me during that time. And we would do like, we got a couple good projects out of it, like one was, we got an explainer video on approval voting held a bunch of like animated fruit called plantsville, in a place called plantsville. So it's a nice way to explain how a pool voting worked. And then we did another one, that provided funding to do experimental design, using polling through a large polling firm, that allowed us to empirically compare different voting methods and pair that to a control measure, which allowed us to see whether pool voting, empirically measured support for candidates Well, compared to other voting methods, which it was able to do. And we looked at that in the 2016 election. And then in 2017, we really just got lucky with our networking. And I was able to get in front of some folks with resources for our initial funding. And our initial funding came from platypi, which is a group that looks at highly effective impact interventions. And we were able to get funding repeatedly from from that organization, getting wins, that also helped our kind of brand awareness and what we were doing. So that feeds off of itself. So that helps a lot of smaller and mid level individual voters. And then from there as our winds increase, and as other folks give Biden, like they tell their other friends, and when you're dealing with folks who have that more wealth, all those folks tend to talk with each other. So that also helps to get introductions to other folks.

Lars Doucet 48:43

You know, they often talk about, you know, it's not what you know, it's who you know, but I've heard an even better version, which is it's not about who you know, it's about who knows you. Right? And it's very interesting that you talked about how your first case with Fargo, North Dakota came to you. So presumably, you didn't necessarily know these people in Fargo, North Dakota, but you made yourself visible to them. Do you have any idea how you make yourself visible to them in that early stage?

Aaron Hamlin 49:08

We so early on when we had no money. We put a bunch of articles on our website, analyzing talking about different voting methods. And our Google Search score was evidently high enough to come up onto a search result. And that was virtually it. Fortunately, like, when you will Fortunately, for us at the time when you search for voting methods, not a whole lot comes up like there's not as much competition. And so we had enough search engine optimization, I guess to make it so that we were at least visible on the internet for folks who are searching for our space.

Unknown Speaker 49:52

Very cool, very cool. So something like you need to get out there. You need to make yourself known to the world for a given policy so people can find you in Some way, Loris, did you have any other question about approval voting? I've got a fun one.

Lars Doucet 50:05

No, go for it go for you. Take us out here. Awesome. Well, Erin,

Unknown Speaker 50:09

I've really been enjoying reading your work kind of prepping for this. I did have one question. I had my bike stolen a couple of months ago, what's the easiest and safest way to prevent my new bike from getting stolen.

Aaron Hamlin 50:21

So I have a personal website, which is Eric hamblin.com, where I put out all my essays on voting theory, and other work I've done in contraceptive technology, and also stuff on like, nonprofits and setting and as well as technical aspects of giving, quickly dealing with US tax law. But oddly, by far, like the most popular essay I have, is none of those things. It's an essay I wrote on bike security. As a hobby, one of the things I do is a do lock picking, and which is just purchase locks, you have lockpick set, you understand the mechanics how the locks works, and essentially the way that a key works, open the lock, you can also use bypass stuff where you don't deal with the the key. But in any case, like I'm in this kind of community that thinks about that kind of thing. And I also am a big fan of bikes, I'm big fan of transit without cars. And there are two big impediments for people riding their bike. One is lack of infrastructure, top one. So people can feel like they can read safely. And then the other is people want to ride quickly on a nice bike with the fear of getting it stolen. So I did a put an essay together. And it talks about layered security. So the idea of if you hit so you don't have any one failure point. So the idea is like, if someone just happens to take that one lock, then you're locked, then your bike is gone forever. So avoiding that kind of situation. So the approach that I put out there, using this kind of idea of layered security just looks at one like thinking about where your bike is making sure it's and secure area. And then I look at the types of tools that are diffuses. The number one effective tool for a thief is an angle grinder, which is a spinning circular blade that tears through virtually anything. And looking at locks that put up as much resistance to that as possible in terms of how long it can resist an angle grinder because an angle with it when you're dealing with an angle grinder, it's only a matter of time. So how much time do you have? And there are other different types of end, you have to kind of think about how much is your bike worth, but also like the opportunity cost of like, okay, like, do I want to have to go and find another way home affects the how you got out that day, or going and finding a new bike and setting everything up. So other steps that you could take looking at, there are some devices like one is called like Boomerang has a built in accelerometer that'll go to your phone. I use it personally. But it's it works. Okay. It's that perfect technology by any means. And then that'll make it so that you can least go back to your bike, if someone's messing with it. It also has a GPS, so you can go and find it. And then there are other things you can do such as you go to bike index.org to register your bike, because like if your bike is stolen, and the police find it, or you find it easier to prove than tours. And so if you register your bike ahead of time, that's when you need to do that. And so like also like police, like they don't do a great job with recovering bikes. But to the extent that they do get your bike. And you don't know about it? Well, they're going to look on bike index set org. And if your bike is not on there, well, you're never going to see your bike again. So ended up at if none of that works. There's also insurance too, which is company code below insurance, that insurance bikes in the US.

Unknown Speaker 54:12

Cool. Cool. Well, Aaron, thank you so much for coming on the show. Where can people find you? Where should people where should we send people.

Aaron Hamlin 54:20

So for making sure that you have that agency so you can actually elect people who represent your interests. You go to this reflection sites at election science.org. You can sign up for our newsletter, get all kinds of great stuff in terms of learning about what we're doing learning about events that we put on. And you can join our chapter program. We have a discord that folks can join, to get involved at the local level, learn about other people who are also interested in this and being able to share our work to one of the obstacles that we face at the moment is that A lot of people don't know what approval voting is. So to the extent that you go out and share with other people, our work and tell others about approval voting, that will really help things go along. And then also, if you're interested in the bike stuff, go to Erin hamlin.com have a bunch of essays on there. Also, if you are thinking about giving to this reflection, scientists have a lot of essays on technical aspects of giving with the US tax law. And you can learn about how to give appreciated stock using bitter advice funds, and make your gift very efficient to this sort of action science and invest in the responsive and giving yourself agency so that you have a more responsive government.

Unknown Speaker 55:47

I love that. Well, thank you. I really appreciate it. Thank you. Thank you. Thank you. Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck brief and brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcript:

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Well, Caleb, how are you doing this afternoon?

Caleb Watney 0:40

I'm doing well. Well, how are you doing? Thanks for having me on.Will Jarvis 0:45

I'm doing great. Thank you so much for coming on the show. I really appreciate it. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Sure. So my name is Caleb Watney. I am the co founder of the newly launched Institute for progress. We are a Washington DC based think tank, we cover sort of a range of tech science and innovation policy issues. But kind of high level three issues that we're spending a lot of time on, especially during this initial launch period, our

meta science sort of the science of science, how do you change the way that especially the federal government funds, structures and incentivizes science? And how can we get more breaks break through research through that process to immigration with a special focus on high skilled immigration? How can we make it easier for scientists, engineers, mathematicians from all over the world, the best and brightest, you know, to come and live in the United States? And then three biosecurity which we think of as kind of both? How do we prevent future pandemics? Obviously, that's very relevant coming out of COVID. But also kind of how do we pick some of the low hanging fruit in biology seems quite plausible to us that say, you know, mRNA vaccines, we could have had them 10 years ago, if we'd had a similar bursted sort of funding and urgency. And so what other kinds of you know, low hanging fruit are still around and available for us in the field of biology. So those are kind of our three initial areas. But we're growing quickly, I'm sure will expand to other areas, but sort of motivated by this concern of accelerating the pace of progress in science, technology and innovation.

I love that. And I have many political economy questions about think tanks and how they work. But But first, I want to dig in and say, I asked this question, it seems like you're you're you're forming this institute based on progress, which you would only do that if you thought progress, perhaps had slowed down or something like that. Can you talk about that? Is there your sense, there's something like great stagnation that things have slowed down since the 70s? And we do need to do something about this?

Potentially? Yeah, I think it's, at least, you know, not off the table that progress has led, I think it's probably slowed down. Now. There's sort of a number of competing theories about why progress has slowed down. Maybe it's within our control, and maybe our institutions have kind of gotten worse, maybe it's the inevitable byproduct of ideas getting harder to find. So it's not entirely clear, I think probably progress is slowing down for a number of combination of issues. One, I do think that probably our institutions are more sclerotic, they've kind of just grown stodgy, or you kind of see the say, in science funding, where we're funding a increasingly older an older, sort of more homogeneous group of scholars that the same set of institutions, and then setting up a system of incentives that really incent that pushes them to do maybe incremental research rather than breakthrough research. And then in the built environment, we've kind of set up a variety of adversarial legal claims that make it very hard to actually build things in the in the physical world, both, you know, new housing development projects, new subways, new mass wind farms, you know, basically anything, we need to kind of prepare for the future, it's pretty difficult to actually build. So that's one factor. I think, demographics have also probably made the issue harder. It seems like generally we're becoming a bit of an aging society, we're having fewer children. We're accepting fewer immigrants than we did decades ago, and kind of that that missing youth that missing vitality leads us to be taking fewer risks, you know, starting new or starting fewer businesses leading to fewer new inventions. And then three, I do think that there is some version of ideas getting harder to find, it also seems to be true that as you progress, especially within existing fields, it seems like finding that next breakthrough tends to get harder and harder over time, but so short for a mix of both inevitable and not inevitable reasons progress is slowing down. But I think there's a lot we could be doing to increase its space.

So what do you think are the biggest levers there? Is it fixing funding? Is it you know, better incentives to get, you know, younger scientists money? What do you think some of the best approaches are?

Yeah, I think it probably depends a lot on the specific area that you're talking about. I think on the whole we think of US federal public policy as being a particularly high leverage set have tools to sort of impact the rate of progress that yeah, the US federal government is the single largest funder of especially basic science funding in the world. And yet, we know surprisingly little about what are the sort of the incentives and the kinds of institutions that best lead to its development. So that's certainly a factor. I think there's a lot of sort of idiosyncratic problems and each particular area, oftentimes, they sort of result from many overlapping systems or kludge accuracies, as they kind of, you know, layer together, and maybe each particular change or each particular barrier, each particular environmental review you have to do is, you know, totally well meaning and maybe even good in isolation, but then sort of as they all kind of combined together, it becomes harder and harder to actually get things done. So, yeah, I think there's a lot of different factors. But in general, I think uniting our focus on on US federal policy is the fact that there's a lot you can do through through federal public policy. And maybe also take a step back, I think you'd say the United States in particular is an interesting place to be working on these changes that US federal public policy is not only a lever to affect the US, but also the worlds that we are sort of, in some sense a provider of global public goods, especially through innovation, we kind of have a lot of different tiers of science and technology here in the United States. And so when we push those out, that creates spillover benefits that the rest of the world can benefit from. Internationally, you see that a lot of world governments sort of explicitly base some of their decisions based on sort of how the United States frames that their drug regulation or an environmental regulations or labor markets or whatnot. And so I think, yeah, implicit in the idea of why we choose to focus on the US is that it's not just about the US, but that actually is an extremely high leverage point for affecting the global world.

I love that I love it, I think, what's her name? Shruti. at George Mason, she always talks about how she complains about how Indian bureaucrats politicians always copy the problems that are, yeah, because that's what's fashionable, and they should be focused on specific problems to, you know, perhaps what's going on in it. Yeah, so it does seem like there's a highly mimetic nature to how people think about these kinds of problems. How do you think about changing kind of federal government policy? Mechanically, this seems super opaque to me, how does this work? Is it something like, you know, the staffers end up writing the stuff, they have no time? My friend, just she just went through a Senate hearing. And you know, she's getting grilled about all these senators that show up, and they just read these questions off of the, you know, this document that Claire was prepared by some, you know, young staffer who's been getting paid like, you know, $30,000 a year struggling to get by? And, you know, I guess my question is, is like, yeah, like, how do you actually think about changing them? Is it educating, you know, staffers educating lawmakers is, you know, you can't like bribe them. Right. So, you know, like, how do you get them to implement the right policy?

Right? It's a tricky question. And I will say that policy is not just opaque for people outside of DC, it's oftentimes opaque for people in DC. But policy works pretty differently, depending on the kind of thing that you're trying to change. I think that the biggest difference is whether you're trying to get something done through legislation through Congress, or whether you're trying to influence something through the executive agencies. It in general, sort of the trade off there is that Congress can do a lot more than any particular federal agency can do. But it's also a much higher bar to clear, it's so much harder to get things passed through Congress these days. But Congress has created a lot of latitude for executive agencies to kind of pursue their congressionally mandated missions, they kind of just, you know, leave the agencies alone, oftentimes, to kind of, you know, make small tweaks here or there or spend their budgets in different ways. And, again, because these federal agencies are either overseeing, you know, billions of dollars, or are regulating or governing huge swaths of the economy, even very small changes to the way in which they make decisions can end up having a really big downstream effect. But yeah, it's sort of weird. If you're trying to affect legislation, I think we're we're quite persuaded by the theory that sometimes called Secret Congress, medical ACSM, Simon basil and wrote a great piece about this, I think last year, sort of pointing out that oftentimes, it's the issues that are the least polarized, the ones that actually make progress. If you look at the news, you'll see a lot of headlines about issues that are, you know, moving very slowly or else are failing fast. And you know, these are these big monumentous bills, oftentimes highly polarized around issues that the electorate really cares about. They get a lot of coverage, both in the news and on late night cable television shows, and precisely because it almost get so much attention that makes it harder to actually have people compromise or move things forward. And so there are a lot of things that are actually happening in DC underneath the radar, that are sort of, you know, passes. It's a small part of this, you know, big omnibus bill, and yet by itself, it's extremely important or covers an issue that a lot of Americans don't necessarily think about, but matters quite a lot. So I think in general You could say that our theory of legislative changes, you know, some combination of secret Congress, but it may also combined with the fact that a lot of the most important issues are very important and indeed tractable, but very low on salience. But it's much easier to get things up the the ladder of political prioritization than it is to persuade someone that in fact, this opinion you have that is deeply held that you've had for 30 years is wrong, and you should drop the other position, that's much harder than to, you know, take some highly technical or a use and kradic issue that no one really has as a key part of their partisan identity. But say, actually, this is really important. And you should make changes, you know, X, Y, or Z to it. So oftentimes, that is through working with staffers DC is a very, you know, sort of relational city, a lot of things happen based on who you know, or sort of, who do you trust is acting in good faith? Or can you provide information with and so that is a big part of why we're in DC is to take advantage of this kind of relationship building networks. And then through executive, it's similar sometimes, I mean, it is very relational. You have to, you know, have relationships or do education for agency staff. But again, it's much easier to work on issues that are low on the polarization scale, that oftentimes makes them much more tractable. But these agencies are oftentimes filled with, you know, career civil servants, who are very good natured, cared deeply about their issue. And they oftentimes are dealing with a lot of different sort of restrictions or guardrails themselves. But if you can persuade them that you know, your issue on the merits is very important, or in keeping with the sort of culture of the agency or what they've been tasked to do. It's oftentimes possible to Yeah, make small incremental tweaks here or there.

That's awesome. That's awesome. Well, some of your issues seemed like they would be more straightforward than others. So you know, working on science funding, things like that seems fairly apolitical people don't worry about that too much. Or there may be some things around, you know, climate stuff, which might really trigger people on certain sides of the political aisle. But immigration seems one, which sounds like a huge hot potato, how do you think about affecting immigration policy in a robust way without, you know, it seems like secret gardeners would be a difficult, difficult way to get something through past. If it was around immigration.

Immigration is definitely a much more polarized issue than say the other two main ones that we work on both sides policy and sort of pandemic prevention. You'll notice that we've kind of chosen to work on maybe the small corner of immigration that we think is the least polarized and that sort of high skilled or standard immigration. And I think our theories is a couple of points. One is that if you just like look, and you talk to legislators on both sides of the aisle, there has been kind of this like, at least in in Word consensus that like, oh, well, we can all agree that we should, at least, you know, fix high skilled immigration, and that it seems obviously good for both natives. And for foreigners, if we let in more, you know, PhD, doctoral students, you know, from Malaysia, or from Bangladesh, that that seems to benefit everyone across the board. It's been hard politically, because things sort of getting caught up in in sort of comprehensive immigration reform or nothing. And now, to be clear, you know, we'd be very in support of the comprehensive immigration reform. And there's a lot of the part of the system that we would like to fix. But unfortunately, given sort of the intractable nature of that, we think we can get a lot more progress by really focusing in on these, these particular components of immigration that do have broad consensus in which two native born Americans seem the most obviously intuitive that they benefit everyone across the board. And you know, there's a lot of scientific or academic literature that shows this that high skilled immigrants end up turning businesses at much higher rates than native born workers that they patent at higher rates than native born workers, they were Nobel prizes at higher rates than native born workers, they tend to be more risk taking generally. And so it definitely is a big boon to society by taking in these workers. Now, that isn't necessarily you can make those cases, but it's still hard to sort of, you know, make progress sometimes in Congress. But I will say that I think recently, we're starting to see an increasing recognition of the fact that sort of this all or nothing approach to immigration has been less successful. And we basically 30 years without meaningful immigration reform, at least on the legislative level. And so yeah, we've been quite interested or excited to see that there are sort of more piecemeal individualized parts of immigration, they're starting to be discussed. As just one example. We've been hard at work on the United States innovation and competition Act, which is sort of this big, anti China or sort of how do we strengthen us leadership and critical technologies bill that has been going through both the house in the Senate, and the House bill has a couple of provisions that we've been quite excited about that would create a Green Card cap exemption for STEM PhDs and stem masters who are working in critical industries. So we're, you know, we're taking lots of meetings on the hill and trying to, you know, put out research and build coalitions and, you know, all part of this process, both to sort of increase the odds that maybe this could stick in the final piece of legislation this time, or if not that, at least we can kind of, you know, create momentum to include this in future pieces of legislation and socializing ideas is a big part of a real policy change. But that's one component of it. And maybe the other part is that there is actually quite a lot you can do through the executive to make it easier for high skilled immigrants to say in the United States, there's a whole range of programs like the oh, one visa for immigrants of extraordinary ability, which are much more flexible than I think people already realized, but have had recent changes to make them more flexible. And it's an uncapped, unlimited number of you know, oh one immigrants that can come in on this this temporary visa program. And so we're, you know, working with folks inside the agency to improve its administration make sure that, you know, things are getting processed on time that there's clear lines of communications to individuals who might consider this program in the first place. I think that's just one example. But there's other programs. We're also excited about.

Love that love that. I've got another question here. It's a bit of a bit of a left here, but is related. I think most Americans have kind of a poor view of of Congress of the federal government of how effective it is, you know, I definitely do I think like, like, Man, this is just does not seem to work very well. Working kind of on the inside in Washington, do you think it works better than the average American thinks it does? Or is it worse?

I guess, in a relative sense, it works better than maybe most Americans think, insofar as there are things that happen under the radar, it is possible to do things, yes, it is possible to things. But yeah, it's still nowhere near you know how it should be. And there's there's lots of legislative bodies all around the world that seem to be much more functional than than the US Congress. And, you know, there's a lot of idiosyncratic reasons for why we've kind of ended up in this scenario, I do think, you know, things like the filibuster make it much harder to actually pass legislation and govern in a country that is much more polarized. And so kind of dislike system of veto points that might have worked quite well in the past. But now in the system of increasing polarization. And some sense, you could say the US is like, as a system was really made for, say, 6040 majorities, as they kind of flip flop across administrations, and that's much closer to what we used to get. But when you're sort of deadlocked in sort of 5149, or 5248, as it flips flops, then it becomes this system of sort of well, meaning veto points, or, you know, checks and balances has maybe become a little bit too stringent. And I think on the margin, it would be better if we made it slightly easier for majorities to pass legislation.

Gotcha, gotcha. I'm curious, you know, if you had to frame like, the Institute for progress, like you're kind of ideological beliefs, are they just, they feel much more pragmatic than ideological? I would say, what kind of do you have, like a core set of beliefs at the institute that you all kind of share? Or is it more just pragmatic, kind of, we want to make the world better and things like that? Right.

So a lot of the the, I think the trickier is in definitions. And so I think you could say, under under some definitions of ideological, we are quite ideological, in the sense that, you know, there are set of ideas that animate kind of what we believe and why we prioritize them, that certainly are shared across the organization. But we do try to be quite careful to make sure that that it doesn't necessarily get polarized along a particular say party line. And we try to, in some sense, restrict to the issues that we work on to sort of a more narrow set where we think we can build broad consensus so that we can be more effective in the long run, because I think pretty key to our vision is the idea that to really create lasting change in DC, you kind of have to have champions on both sides of the aisle. But if you just naively think that both sides are going to be roughly in power about 50% of the time, it would be quite bad for our issue areas, if we only, you know, kind of got the investments that we thought were necessary. 50% of the time, if we only were investing in pandemic preparedness, when either Republicans or Democrats were in office, that would be very counterproductive. And so I really, for the long term, sort of stickiness of these reforms to make sure that there's a durable coalition that can protect these investments going forward, it's quite key and important to make sure that you're able to communicate to both sides of the aisles in ways that they understand. So I'd like to say there are a set of ideas around I think, progress around human agency around the fact that, in general, you know, through careful human consideration, we can make the world better that, especially through technology and science, there's a whole array of tools we have available. That I think also, the federal government has quite an important role to play both in sort of incentivizing and financing these technologies, but also in governing and shaping them. I think the idea that technology is very path dependent, also kind of is quite central to our work, the idea that the order or the direction and the pace of technology matters a lot for shaping the long term future of humanity, that simultaneously we should be very excited about the ability of new technologies to create new wealth and new progress for humanity, but also that there are particular areas where we want to be quite careful and make sure that, you know, we're investing in defensive technologies that can increase the odds of getting a good outcome. So that's sort of maybe a brief set of some of the ideas that animate our work.

That's great. That's great. I really appreciate that. It reminds me of a previous guest who we had on Vitalik butor. And he talked a lot about that, in the sense is like, is much more pragmatic, and, and kind of ideological is much more kind of a secondary thing. How do we make the world better? Is that the most important thing? I'm curious, you mentioned technology, and path dependence. And there's an issue that's been widely talked about in the media in the last couple of days, as we record this podcast? How concerned you are you all at the institute about AI existential risk? And I know, it's not currently one of your focus areas, but I'd love to get your take on it.

Yeah, it's it's a tricky issue. But certainly one I, you know, thought about a fair bit and in some of my previous jobs, I've done a bit more work on on AI policy in particular. I think in general, AI X central risk is certainly something to consider, it's something to be concerned about, I think, anytime you're dealing with sort of risks that even if they might be small, in absolute terms, would be you know, existentially bad would, you know, potentially risk threatening large portions of humanity or all of it? It's worth, you know, taking that concern quite seriously. And I think you don't need to necessarily get into the issues of what happens if it's point oh, 1% Likely, I think, you know, anything, I think we're safely within the realms, especially if you're trying to really embody, you know, epistemic humility and take seriously the fact that there's lots of smart people who studied this issue very carefully, and seemed to be quite concerned about it, you could pretty easily justify a, say, a five or 10%, you know, concern about it. Now, I think what's what's particularly tricky about existential risk for AI is the fact that it's quite unclear to us at least, what are obviously good policies, you could push from the federal level, to make this risk, more or less likely. And I would contrast it with say, risks from bio biological attacks, or, you know, if we have a new engineered pandemic that were to, you know, wipe out large swaths of humanity, it seems like there's there's emerging kind of a consensus that here are, you know, a reliable set of things, five things you should do, and five things you shouldn't do to decrease the risk because of an engineered pandemic. And we have reasonable certainty that they would all push in the right direction, that they would be quite likely to lead to good outcomes. And unfortunately, in AI, that kind of consensus not does not exist, you'll get as many different takes on on AI super intelligence or AGI as there are AI experts that you gather in a room. And so it's something that we follow quite carefully and quite closely. But partially, we've been hesitant to Sir, I think weighed out too, too deep into the water, because it seems less less clear, less obvious what the obviously good federal policies are. Now, I will say one reason that we work on say high skilled immigration is because we do think that for both AI but also other technologies, you can increase the odds of good outcomes by changing the geography of where technological development is happening, that we think for a range of technologies, including AI, you'd be more likely to get good outcomes if they were being developed in liberal democracies, like the United States, than in countries that have a less good track record of given rights, say, like China. And so by strengthening the US as you know, relative position in critical technologies like AI, I think you're more likely to get outcomes that are compatible with liberal democracy. And so that is, I think, one of the core motivating reasons to work on that issue, in addition to all the great benefits of immigration by itself,

kind of an Operation Paperclip for all the best ml engineers kind of getting back over here.

Yeah, you have to be careful with, you know, Operation Paperclip links or getting into that paperclip. Maximizer thought experiment. Yeah.

There you go. There you go. Exactly. Can you talk a little bit about biosecurity? Yeah, I remember that this this kind of is great intersections, I think we talked about earlier. I remember there's a great 60 minutes episode early in the pandemic, where they had this plane full of, you know, cruise ship passengers that had COVID, it was very early on, they flew into Atlanta, the Atlanta airport when the busiest airports, the United States and CDC just kind of waved them through into the, you know, they're all like falling over. They're dying of COVID You know, various levels of illness and these elderly people just kind of walk straight into the, the airport, you know, it's like clearly like something that should not have happened. So how do we strengthen our biosecurity here in the US because it seems to not be working very well at all?

Yeah, has that been great? It's sort of funny, I think COVID both sort of showed our great weakness at sort of containment of especially airborne transmissible conditions, diseases, that you know, we really did not have the investments and say, the built environment, through ventilation systems or any UV systems, we didn't have very reliable uptake in terms of sure group behaviors like all wearing masks or all locking down or various things that you I'd be able to affect transmission of the virus that way. And so on a lot of these sort of like individual or society level responses, we were quite bad. But on the other hand, we were also sort of one of the key destinations where mRNA vaccines were developed. And of course, that's made it much easier to get back to normal. And it's worth highlighting the fact that we invented a whole almost new genre of vaccines in the form of mRNA vaccines in record time. I mean, you compare this to how we how fast or how long did it take to develop other kinds of vaccines for novel diseases? And it's honestly a miracle. There's a great New York Times article, I go back to you sometimes that was asking the question, I think in like, mid 2020, you know, how long will it actually take to develop a new vaccine, and they were sort of pouring cold water on the idea that it was going to be, you know, pretty soon and saying, Oh, if you look at the average timeline of vaccines, and even if you try to shorten those, you know, you're looking at like, late 2021, at the earliest. And, of course, we got it at the end of 2020. And so, you know, a whole new vaccine and sort of record time within a year was was quite remarkable. Partially our success, and that was actually based on previous scientific research that we've done, in terms of understanding sort of the bases of coronaviruses, in general. And, you know, sort of the fact that we've been investing in things like mRNA, even though we haven't been using them, we've sort of been investing in new systems like that for quite a while. And so one very simple thing that we could do to prepare for future vaccines is, there's 26 distinct viral families. And some of them we have a much better understanding of than others, I mean, so coronaviruses are one that we actually thankfully have a relatively good understanding of, and it's why we were so able to quickly target this sort of Spike protein and develop a vaccine that that could could target that effectively. But there's lots of others we have a much worse understanding of and so one thing that we've been calling for, and that I think, though the White House OSTP team has always been calling for is sort of a big undertaking, almost like a quasi Manhattan Project style undertaking to to really map out all 26 of these different viral vaccine families to sort of create proto vaccines for each one of them, that can be quickly sort of updated once we know this specific strain. And then, you know, we can have very quick virus responses or vaccine responses to any new viruses. So that's one particular example. But there's lots of other things that we should be doing, we need better investment in what's called a meta genomic sequencing. It's basically it's the technique or the technology that allows you to identify, do we know it? Is this viruses? Or is it some new novel virus, typically, you can do screening and comparison of one virus against a sample of a better genomic sequencing, which allow you to sort of compare a particular sample against the whole corpus of known pathogens. And so that would allow you to very quickly know, hey, we're dealing with something that's new here that we don't have sort of existing protections against. And then you could, you know, sort of put more resources on there. As I mentioned, more stuff with sort of ventilation, we could use advanced PPE, there's a whole range of new technologies. But I think, in general, you'll find we're much more optimistic about our ability to say, make future responses better with new technology and with new science than with say, you know, persuading all of Americans that they should, you know, consistently mask for a long time, that seems much harder to reliably do but new technologies can kind of change the cost benefit in various ways.

I love that. I love that. I'm curious, you know, I mentioned, you know, advanced PPE. This brings up a question to me about, you know, during the middle of pandemic, we really did not have the strategic capacity to produce enough PPE. You know, it's like 3am in the Midwest, and that was pretty much it. You know, do we need to make strategic investments? Like should we be as a country to be making more strategic investments and things like PPE, strategic food production, you know, CNC machines, you know, the machines that build the machines, machine tooling, do we need to make more strategic investments in that so that when we have crises, we can, you know, produce it here, when you know, China is not going to ship it out? Or it's, you know, in college, it was always a libertarian argument is like, that, it didn't really matter. You can always trade with people, it's not gonna be a problem, but that it seems like the pandemic did turn some of these thoughts on on on their head.

Right. I think there's definitely a stronger argument post pandemic, for sort of resiliency and redundancy in critical supply chains. And I think I would, I would sort of distinguish redundancy, resiliency, with sort of domestic manufacturing, I think there's sometimes a call to say, I'll let's just bring everything on home. If we can't manufacture it here domestically, then, you know, it's not good enough. But really, it's the goal is to make sure that we have the ability to get what we want when we want it. But sometimes there might be ecological crises, or there's an earthquake that affects the one factor we have here in the United States. And if that's the only factor, we have to produce the things we need, then, you know, you end up basically just is worse off and so the probably some portion of this is having redundant manufacturing capacity on the US but it also means that we need to be you know, thinking through supply chains in a more general level to make sure that we have multiple manufacturers kind of all over the world, especially for key critical things, I think for mass manufacturing, it's interesting. Alec, my co founder, and I wrote a paper pretty early on in the pandemic, basically calling for advanced market commitments for mass production. The idea was, you know, this was sort of right, the the heat of the mass crisis and a lot of people saying, you know, we can't get enough, even just like n95s for medical workers, let alone for the general public. And people were either tying scarves around their head, and it was better than nothing. But you know, we could have been doing much better. And the argument we were making is that, in the same way, that operational warp speed kind of provided a lot of demand certainty for manufacturers and said, hey, you know, if you guys really go all in and invest in the the fixed cost to really increase your manufacturing base, we recognize that you're taking on risk. And we want to, you know, basically take that risk off your plate, because you're providing this public good have, you know, dramatically larger manufacturing capacity for these key critical goods. And so I'm glad that we ended up doing it for vaccines, I think we probably should have done it for masks as well. Because in previous crises, you've seen that mass manufacturers, after states, swine flu, sort of saw this, this news about, you know, a new possible vaccine, or a new possible virus that was gonna be spreading. And so they started dramatically increasing their capacity. And then it turned out to be basically a false alarm, and all those investments and people had to lay off, and it was really costly for them. And so especially when you're dealing with uncertainty, at a time when there's a public crisis, and it's not really fully priced in the the large public benefits you would create, if you were to, you know, expand in a way that is a positive, Evie, even if it's maybe unlikely. And so I think having a better appreciation for tools like advanced market, and it's in this whole kind of range of innovative public procurement can be really important, both for sort of, you know, in the moment, crisis management, but also for more general forward looking stuff.

Gotcha. And advanced market commitments are just like a command of the governments that goes out and says, We will buy X amount of mass from you, if you if you go ahead and produce these digits, it's going to ensure that there will be demand if you spin up all these crazy fixed costs, to you know, create things like n95 Gotcha, gotcha. kilo, I'm curious, how has it been founding your own Think Tank? And what has been the biggest challenge? Is it fundraising? Is it making connections? Is it is it something else entirely,

that anything jank has been honestly, really fun. It's been great, it's gone better, honestly, I think than either of us expected. I think when we were first kind of starting off, we were envisioning it as just like a small two person thing that would maybe eventually scale up. But we were kind of consistently challenged, both by mentors and advisors, people to turn it their own thing, and also some of our fundraisers, our donors to sort of think more ambitiously. And that, you know, there were sort of key niche that we were trying to fill that was important, and that we should, you know, expand more quickly. And I've been very glad that we did that. And I've been super excited about the team that we've been able to assemble, I think we're doing great work, I think it's it's also been really rewarding to see that I think some of our ideas about underrated models of political engagement have so far turned out to have something to them. And that's been rewarding. I also personally am like a bit of a generalist. And so I kind of liked the idea that, you know, one week I'm really digging in with our lawyers on, you know, the various legal structures we need to set up and then the next we're, you know, talking to our accountants about the different ways to set up our books. And then we're, you know, in full recruiting mode, and we're going to conferences, but still trying to have some time to write and management and thinking through offices, and then you know, our website design and all those sorts of things. And so it's definitely the kind of job that I think benefits from from having to have wide ranging interests and maybe getting bored if you're on one task for too long. So I'm certainly never bored.

That's great. That's great. Can you talk about those underrated kind of policy levers? You might have mentioned that before, kind of like secret Congress and things like that, but But are there any others?

Yeah, I think one thing is just trying to maintain as much flexibility as possible. I think, one sort of maybe bottleneck or barrier that think tanks run into is that they basically kind of over commit on a specific agenda ahead of time. And oftentimes, this happens for kind of legibility reasons for, you know, trying to promise something to various foundations that might be supporting your work, you know, and you'll say, Okay, we're gonna, you know, this is our three year plan, we're going to publish papers on X, Y, and Z, we're going to make sure we have, you know, so many op eds published, we're going to be hosting, you know, 20 different webinars, we're going to do whatever and sort of, once you've kind of committed yourself to that model, you're then really optimizing for say, specific outputs, rather than what is actually like the positive expected value swing we're taking on a particular policy opportunity and policy windows open and close so quickly, you know, there's a Got a small window a month, here's really engaged and really dive in. And so having the sort of flexibility to sort of take resources or interview spin up or down projects very quickly, as these opportunities arise, I think has allowed us to be hopefully, you know, a bit more effective. I think also focusing on issues that get a lot less coverage. I mean, this really, like not many other think tanks, if at all, that are kind of focused on meta science issues and sort of how do we reform not just the amount that the government is spending on federal r&d, but the methods and the ways and the the funding mechanisms that they use? And so there's like, a lot less competition in some sense, you know, versus an issue like federal privacy legislation, or, you know, texts, tax policy or, or welfare reform or any number of issues that have, you know, a lot more coverage from think tanks all across the board, sure of your marginal contribution, working in a very crowded area is much harder to have an impact. But if you can find, you know, sort of neglected significant intractable issues, then I think it's much easier to punch above your weight.

Well, have you guys been so successful in finding the collected trackball raises? Because you're younger, you're just like, more willing, like more truth seeking, you're optimizing for truth seeking instead of something else like, like, What's your theory behind that?

I think most people are, you know, on Netroots seeking in DC. Yes, maybe surprising as that is, I think most people are acting in good faith, certainly not everyone. But in general, I think you'll you'll have better predictions about people's motivations. If you kind of come in with that. I think part of it comes from the fact that we're drawing from maybe intellectual communities or networks that are much more underrated in DC or haven't made as much of a splash. We sometimes think of ourselves as pulling from both this kind of progress studies community that is very focused on sort of how do you tangibly increase the rate of progress, especially through sort of technology and scientific mechanisms? And then also from the Effective Altruism community? And sort of, you know, how can you do the most good with your your time and money, and they're kind of you know, they've helped popularize this network, this, this significant collectiveness and tractability framework I was talking about a little bit earlier, I was borrowed from that community. But there's a lot of really interesting ideas and thoughts on privatization that come from those communities that because they're just like, not that well known in DC, we just kind of naturally focusing, I think, on a different set of issues. So I think, yeah, I don't know if there's anything about us personally, you know, that makes us more moral or more truth seeking, I think we've just kind of been shaped by maybe a different set of intellectual influences. And I think hopefully, with some of the flexibility built into our model, we can have a bit more impact on this issues.

That's great. That's great. You mentioned Effective Altruism, that one of the big EA nonprofits just released $100,000 essay prize to critique Effective Altruism. Well, of course, I asked, you know, like, Do you have any critiques of Effective Altruism yourself, like, and I want to preface this by saying, like, I really love EA. And I think it's actually probably the most reflective kind of group I've ever been a part of. So like, I think I'm not here to get cheap shots. But I'm curious if you have any thoughts there. Yeah,

it's funny. I mean, the hard thing about critiquing music, EA is that, of course, probably somebody has already made the critique already. And some portion of the community is like trying to push it in a different direction. So one of the things I like about the community is that it is quite heterogeneous, there's people, you know, with very strong intellectual disagreements with each other, pushing it in very different directions. But I don't know if this counts is a bit of like a half critique, it's maybe a critique of where EA was a few years ago, they've started to make some changes in this direction, or, and I'm excited to see those. But I think we could still go much further. And that would be sort of thinking about impact in areas that are much harder to quantify, are fuzzier. And I think EA very naturally, sort of, you know, grew up in this environment where we're trying to sort of really maximize on a per dollar basis, how can you do the most good in the world. And so things that are very legible, are things that are very rigorous in terms of we we know, reliably, sort of how impactful say, sending anti malarial bed nets to Sub Saharan Africa is or we know the impact of deworming pills on average. And we can measure that we can like go and directly investigate and see the impacts. And we can sort of know how impactful the marginal dollar spent is. But for something, say, like a campaign, through public policy to increase the odds of a pandemic preparedness funding bill happening, like how much money do you have to spend to increase the odds of that by 20%? Like, is almost like no way. It's so sort of path dependent. It's so fuzzy, it happens, you know, sort of in fits and starts, and maybe over a longer time horizon, you can start to draw trends about sort of what what are the odds and certainly we think we have methods that worked better than average, hopefully. But I think EA has in the past been quite hesitant to engage in public policy because it is the value calculation or sort of the Trying to figure out how much good you're doing is so much harder. Now, as I mentioned, I think in recent years, this has become much less the case you started to see EAS caring a lot more about policy investing more, you know, we have a donor. So certainly, you know, that's, we're very thankful for that. And I think a sign that this sort of community is starting to move on. But that that is one thing. I think we still have more to go on.

Definitely. Well, and and I just say a lot of people's work is connecting this, you know, a lot of ideas to that, like you mentioned, like, to the policy space, it's kind of a $20 bill on the sidewalk, you guys are picking up is the fact that you know, aren't a lot of EAs that are working directly in policy. Is your sense? Do you have a sense at all, whether Washington has changed much since you got started? I mean, you've worked in think tanks before and then founded one, has it gotten easier to do things harder to do things? And what's your sense of how political polarization has moved?

That's a good question. And a tough question. I would say I mean, so I've been in the DC area for, you know, about seven years now, which is on the one hand, like kind of a long time, but also not at all a long time on on the you know, sort of the timescale of policies, not even, you know, a single to term presidency by by that metric. B, I think there have been some changes, I mean, certainly is this sort of, like, secret Congress thing, I think has become more pronounced that the last eight years have been a time of very intense polarization. And as kind of things get more and more polarized, the idea of moving slightly behind the scenes, that trying to deliberately not get too much public attention for an issue. And that that might actually make it harder to work, I think, is somewhat of a more recent phenomenon. Maybe even more recent, though, is that I actually wonder if we're getting slightly less polarized than maybe we were just a couple of years ago. And as an example, you could say, I mean, I would not have bet in 2020, that the US would have passed a big infrastructure bill. And yet we did, we passed a big bipartisan infrastructure bill, fingers crossed, but I think we will probably pass the bipartisan Innovation Act at some point this year, maybe in the lame duck, but I think it'll probably happen. And that's, again, like a bipartisan investment in science and technology, sort of with the goal of maintaining American technological leadership. I thought that there was some significant chance that Republicans would just refuse to confirm a lot of Biden's nominees for various, you know, cabinet level positions. And yet that probably happened, you know, there there were nominations that happened. And so I think it's slightly unclear maybe this is sort of a maybe a bit of a speculative, spicy take. But maybe the increasing focus on more cultural issues in the last couple of years has actually opened up room for a bit more ideological diversity within parties on economic issues. And that's led to a bit, you know, have an easier time to actually horse trade on on some of these key issues. So I don't know if that's true. But it might be one theory about what's happening.

That's great. That's great. Well, Caleb, I'm curious, you know, if I have you back on the show here in 50 years, and I am planning on doing it for another few years, this realistic, what's the biggest impact you can imagine the infant Institute for progress having?

Well, I hope that in some sense, we are not working on the same issues we are that we made so much progress on, on on immigration, on meta science and on biosecurity, that, you know, we've sort of called it today. And we don't have to work on those those policy issues. And we can be working on, you know, much more niche issues, maybe we're working on sort of, you know, governance of Martian space law or something. So, I certainly, we really hope to make tangible impact on those three issues on others, I think we hope to bring increased short of technological capacity to DC that sort of the ability to understand foresee and directly proactively both speed up and shape the direction of technology will be increased in DC. I hope we will have not died in say, you know, a massive comment or bioengineered pandemic or we won't have had a solar storm or any number of various, you know, mega cataclysmic events. So if we're all alive, and if, you know, we've made good progress in some of these core issues, and, you know, total factor, productivity growth is up. We're all had, you know, 200k GDP per capita, you know, I'll call it today. It seems like we've done some good.

Excellent, excellent. I love that. I love that. And do you feel Do you feel bullish right now about the 20, the 2020s and escape in the great stagnation? Do you think we will have significant TFP growth over the next kind of decade?

Um, I think it really depends on what we do in the next couple of years. That sort of I think a lot of the preconditions are there that, you know, there's a lot of technologies that we've sort of been laying the foundations for a long time, both artificial intelligence, some of these, you know, really interesting bio technologies like CRISPR. I think Someday Someday we'll get driverless cars and you know, autonomous drones and anytime Have you know things that can change the way cities are designed and increased productivity? But it's really going to be I think about policy, it's going to depend on what we do about clean energy, it's going to depend on whether or not we can build things in the physical world, it's going to depend on whether we can set up new institutions that are capable of say reforming themselves or can you know, get rid of old laws and establish new ones that we need? So I hope we can and I think there's some amount of sort of a can do optimism that actually makes it more likely to happen. And so I will manifest into the to the world that yes, we will get over the great stagnation, if only because we think we can.

I love that. I love that. I've got kind of one last question here that is related that you mentioned building things in the physical world and the problems we have with that we had Eli the radio on, I might have mispronounced his last name. Sorry, Eli, if I did, but I am curious how big of a problem do you think NEPA is? And do you think, is there any promise that we'll be able to do something about it here in the next decade,

I think it's quite a big problem. I've been quite persuaded by Eli and other folks that have been sort of, you know, drawing more attention to this NEPA issue. I think it is maybe an understandable reaction to some of the excesses of the 1970s in terms of, you know, Robert Moses, you know, bulldozing large sections of, you know, minority neighborhoods in New York, and we kind of said to ourselves, we're never gonna let this happen again, and perhaps the pendulum, you know, went too far, or some of these, you know, mechanisms meant to provide democratic accountability and facts don't and especially if you're in such small, isolated groups, and the you know, who really has the time to show up at community engagement meetings is not actually representative of the local community there. So I think NEPA and this larger set of issues that are also included, you know, zoning issues, and it's sort of the promiscuous distribution of veto points, as I think I've heard someone say, sort of become too large. And at some level, we need to either move the decision level up somewhat so that we at the you know, state or national level can sort of decide, okay, yes, we actually do want to build housing. And we're not going to let you know, local individual actors say, not my backyard. Alternatively, at least on the housing issue, in particular, I'm interested in this idea that John Myers and some of our friends in the UK have been talking about and piloting their around street votes and sort of moving the decision level down to a point where actually the individual actors who would be benefiting from increased density are allowed to, you know, individually episode their stream, I think that's an interesting approach, as well.

Oh, that's really that's really cool. Is there? Is there another approach here in the United States, where we go up? Is there a policy lever, you see where we can move zoning decisions up? I mean, I don't know enough about the kind of federal government apparatus to, to know where that yeah, there's,

it's easier, much easier to do on the state level than on on the national level, there's, you know, some efforts to maybe say tie, you know, transportation funding or other kinds of, you know, financial incentives to actually tangibly building up. But most of this is happening on the state level, you're seeing a number of active bills and California and Oregon and, you know, a bunch of other states to sort of tie the hands of localities are actually used go sort of, you know, carrots and sticks to actually make sure that local areas are building the housing that we need.

That's great. That's great. Well, Caleb, thank you so much for coming on the show. Where can we send people? Where can people find you?

Sure. Probably the easiest place is Twitter, where you know, we're quite active there as it's we're actually a lot of Hill staffers are so we try to be accessible there. So I'm at Caleb Watney on Twitter. You can also follow our work at the institute for progress website, which is progress dot Institute. not.com not org dot Institute. So yeah, that's probably the two best places.

Awesome. Thank you, kalo.

Of course yeah, thanks for having me. It was a fun conversation.

Special thanks to our sponsor, Bismarck analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com

Transcript:Will Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Additionally, in this episode, my friend Lars du se joins us as a co host, or Vitalik. How are you doing this morning?

Vitalik 0:44

It's been a good morning in the process of writing an article about where to use and not use blockchains. What other things have a Yebin? up to just a bunch of random things, but generally, it's been good. And it's been fun. How about you?

Will Jarvis 1:04

doing really well, we really appreciate you taking the time to come on the show. Do you mind giving us kind of a brief bio and some of the big ideas you're interested in?

Vitalik 1:12

Sure. So I think people in general mostly know me for crypto stuff. So I joined the Bitcoin ecosystem back in 2011. So I was still in high school, I heard about Bitcoin a couple of times, once on the internet once from my dad, and I thought, hey, you know, this is interesting, this seems like an ecosystem that's doing something really cool. And so I started, like really jumping in and participating in it. I started off as a writer, so I co founded Bitcoin magazine with this guy named Mihai Alesia from Romania. And I was writing just a bunch of articles on all kinds of Bitcoin topics, including the technology, the economics, the politics, and society related issues. And, you know, culture just about everything. And a couple of years after that, I went into the crypto space full time started exploring more projects, and eventually Aetherium started, and I have been part of the Etherium project ever since. So the stuff that I generally do for Aetherium tends to have to do with research. So basically, they're coming up with the ways to improve the Etherium protocol, kind of test, testing out some of those approaches, they get coordinating with researchers and developers and Nick, explaining things on those kinds of issues. Though, I also have continued to kind of write anything like think and do big picture stuff on a bunch of blockchain related issues. I guess, the thing that's fascinating about blockchains, and that I think becomes even more true about systems like Ethereum than it was about Bitcoin is that blockchains are this environments where you can create new organizations, you can create new systems of rules, you can create applications, that Unicode ways in which large numbers of people interact with each other. And so there's a lot of ideas around things like economics and sociology and like thinking through the different disciplines about, like, how would people actually interact and use a particular application? What some application break? What would some application not break and what different circumstances? So I ended up thinking about these ideas that are very relevant to things that are happening in Aetherium lands, but that also do end up stretching further.

Will Jarvis 3:51

That makes makes a ton of sense. Metallic, I'm curious, a lot of people think about you as a crypto person, but actually think of you kind of like being more interested in governance, political economy, and then you know, crypto is almost like a way to get there. It's a way to innovate in that space in a way that people have not been able to do that in the in the recent past. Is that a fair assessment? Or is kind of crypto actually the main thing?

Vitalik 4:14

No, I think that's definitely true. I think like, I mean, I'm definitely you know, not like, into the coins for the coins. I'm like, to me, blockchains definitely are this kind of way to open up this big space for people to, you know, experiments have enough governance, communication, open up the ways that we can coordinate without relying only on governments and corporations, and all of these kinds of things. So, you know, and I think I'm definitely very interested in these broader ends that have always see in the crypto space as being about trying to accomplish

Lars Doucet 4:51

interesting so on that note, you know, our audience is you know, our audience has has some degree of knowledge of crypto but it's more of a general audience. We talk here mostly about out policy and big ideas and kind of things like that. So well, I guess we'll just jump right into it. We invited you on the show, when we saw that you had retweeted some of her work. You know, I had written this series of articles for Astro Codex 10, on the topic of Land Policy, and Georgia ism. And I saw you had read it. So I guess we'll just jump right into that. First of all, you've read the series. What do you think of it?

Vitalik 5:25

I thought it was very interesting. I had been a fan of Georgia ism for a really long time, I think it was one of the political philosophies that really appealed to me, even back when I was just starting my learnings about what the different political philosophies are. And when I was still a Bitcoin magazine person, I was definitely, I guess, surprised about the conclusion of just how much revenue a land value tax might be able to capture, like, as I remember, like, it was basically coming close to be able to replace like, a whole bunch of other taxes. And that's, I think, not the usual take along kind of people out there in the world that are vaguely pro georgeous. I'm right there, you know, like, the more usual viewpoint is like, okay, yeah, I mean, I see the rationale for this sort of stuff. But like, I mean, oh, come on, it's not Oh, land is just such a tiny part of the economy, it's not going to get very far. And, again, yeah, reading through that post, it was interesting to see like, actually, you know, just how big a part of the economy land deals. And you know, on some level, it does make sense, right, like, especially given how people are like to talk about housing prices so much. And when you actually look at like, the price of a house, in most places only, like a small portion of it is the actual house, right? Like one way to look at this as if you did home insurance, and you'll look at like, what is the maximum amount that they pay out in the case that the, you know, you got a fire in the house, and we would break so like, relative to the price of a house, often it's pretty tiny. And so, and then, you know, comparing, like, empty, lots to full lots, and you notice that the empty a lot is like three quarters, and you have the full load. And if you're looking at buying a house, from the point of view of buying a house, you're like, WTF made, and there's, and then, you know, even things like there was that study that said, like, if you will let people build, like, even to a medium extent, in places like San Francisco, the US GDP could have been 36%, higher, and like all these different, you know, things that stack up on top of each other and you realize that like, Wait, did I actually get going on land is pretty significant that it is big? And yeah, that's I thought that was just generally a really interesting of view. Picture.

Lars Doucet 7:50

Cool. Did Did I leave anything out? Did you disagree with anything?

Vitalik 7:55

I don't think I disagreed with anything. And I do think I have this kind of module in my mind that says, Don't let your mind get changed too much by like any one person's a single opinion. And there's always a chance that like, you know, some unknown unknowns are being left out. But I definitely would HIGHLY welcome and encourage more people, and of researching and double checking all this and trying to figure it out. I think, in practice the biggest obstacles to like actually trying to land value Taxify, or they're either America or other countries is that land value, instituting a large land value tax is basically a one time transfer away from existing landowners. And, you know, existing landowners are gonna get upset by that. And in a lot of cases, existing landowners are this fairly powerful political lobby. And, you know, there are these kind of emotionally appealing arguments of like, you know, oh, you know, are all I have? Is this home? Are you going to tax away the home? And, you know, in reality, like, with land value schemes, you can always fix them and say, Okay, fine, a third of the revenue goes into US citizens dividend, that's actually totally enough to be able to afford an affordable home and the people complaining are actually in the kind of top fifth percentile of rich this but you know, even still, like it's an emotionally appealing argument, and politics works off of that sort of stuff. So it's, like, it does feel like those kinds of political issues are probably more likely to be the NF source of problems, almost done, even the math itself. And just to kind of dial that back to a previous topic. I think one of the things that interests me about like doing crypto in particular, instead of doing getting into politics and the traditional way instead, whenever you chain you wants to change an existing political system like there's always going to be a lot of status quo pressure, you have to change huge numbers of people. There's like this real really long lead time between developing an idea and any hope of having that idea implemented. And when when it does get implemented, it's always going to be a kludge. Whereas, you know, with a blockchain, it's like, you create a new system. And you know, you build a new system, and it runs. And sometimes the thing breaks, as we saw happen with Tara a couple of months ago, but sometimes the thing doesn't break. And eventually, we learn over time. And I'm hopeful that, you know, at some points, these insights that we get from the crypto space are going to start making a bigger and bigger impact in the wider economy and society.

Lars Doucet 10:38

So that actually brings up a really interesting point that ties back into crypto, I think the general term for this phenomenon was coined by a guy called Gordon Tullock. He called it the transitional games trap. And he used the example of taxi medallions were the first generation to get some kind of particular benefit. Mix out like bandits, and then the next generation, like, the next generation, like the value of that thing might get like priced in. So like taxis might not be particularly profitable. But removing the medallion system will create overnight winners and losers. So now it's very politically fraught, to do it. And so that's just to name the phenomenon we're both talking about. And he tried to like remove some existing system that has a spot in interest. So you've just brought up it's like, one of the things that appeals to you about crypto is that it's like, okay, well, instead of having to, like deal with all these politicians, and something, create this new ecosystem, how long until that new ecosystem you've created has its own winners and losers baked into the status quo, like, like Aetherium is trying to move from proof of work to proof of stake right now. Are you dealing with your own transitional gains trap? And you have any insights there?

Vitalik 11:47

Yeah, that's actually fascinating that you asked the question, because I was literally just about to raise that exact point. I think it definitely is an issue. I do think that it has been much less of an issue than especially people looking on Ethereum from the outside, sometimes tend to assume like I think we get more concerns rolling about miners being expropriated, then, you know, even miners complaining about the the switch to proof of stake. And I think the big reason why this happened is because proof of stake Isn't this like new thing that's being foisted on an ecosystem that never expected proof of stake was part of the discussion in Aetherium, since I made that first post on us last year in January 2014. And then there was a definite plan to move to proof of stake since at least November 2014. And maybe a bit earlier, right. So it feels like the the goal of switching to proof of stake their goal of implementing some scalability stuff like sharding, it was kind of part of Ethereum is a living Constitution almost from the beginning of the project. So it's this kind of interesting experiments, where you have a community with these kinds of constitution, like norms that are not just about preserving a particular thing that's already there, but also about, you know, trying our best to execute on this specific roadmap that everyone was aligned on. And, you know, there definitely are many people who do not like the roadmap, and a lot of people went somewhere else. When the Dow hack happened in 2016, I think that actually was a moment where Aetherium was just hit with a very unexpected situation. And it did act in a way that ended up violating a lot of people's expectations. And a lot of those people who were very unhappy about it rebelled and went over to Aetherium classic. But one of the interesting side effects of that is that I think if you're Iam classic also actually managed to attract people who were unhappy with Aetherium for other reasons. So a lot of proof of work fans went over to Aetherium classic. I'm a lot of fans of Ethereum having a less aggressive and much more conservative roadmap and not bothering with sharding, once to Aetherium classic. And so that kind of moments, even actually kind of purified Ethereum to some extent, and made it more cohesive and more able to execute on its own particular values, which is also something that I found interesting. So I guess, I definitely think that I'm going to avoiding transition audience traps is going to be an important thing for crypto ecosystems that going forward as well, especially as they become more mature. But I also think that crypto is this very large design space. And so there are different both technical tools and social ends up political tools that you can use to deal with those kinds of issues. And I'm gonna think Etherium actually has done a pretty good job of that and I think other blockchains can as well.

Will Jarvis 14:58

Botallack that's a good A transition there, I want to talk about, you know, kind of your preferences, what constitutes good governance, you know, kind of flows from base values, you see very pragmatic and kind of non ideological, which is an interesting contrast, because I went to an early, you know, 20s, in the early 2010s, I went to these early Bitcoin meetups, and you know, you'd go out to the parking lot afterwards, and people would show you their automatic rifles in the back of the trunk of their car, you know, and all these like, really wild things very libertarian, very committed to these ideological things and unwilling to budge, when you think, much more pragmatic, what are kind of your base values that guide your ideal kind of governance structures?

Vitalik 15:37

Yeah, and I think openness is important. Freedom is important. I think cosmopolitan ethical values are importance to me. So you know, the idea of like, not just caring about people that are either part of your country or that are otherwise going to very close to you, but also thinking about the needs of people who are further away. I think, just like, I would, how would I call it him? Having positive some relations with the outside world is also I think, something that's definitely important to me. So I guess that stands in contrast with this kind of approach that tries to kind of like get internal cohesion by emphasizing its like extreme differences with everything that's outside of itself. Like that, I think is closer to something that a lot of people in say the Bitcoin maximalist camp are in favor of, but I think Ethereum has always not really been that ends. And I think even pragmatism itself is kind of an ideological value to like, trying to kind of emphasize that Nick, emphasize middle finding the good in all the different viewpoints. And like, even if you don't agree with something, if you have, if you can identify some very cheap way to make people who do agree with that viewpoint, happy, you should just go do it. Yeah, so I think, a combination of all of those.

Lars Doucet 17:06

So one thing, just kind of circling back to some things we had said before, you know, you'd mentioned freedoms, very important to you, you'd mentioned that, you know, you kind of have a little different viewpoint than the Bitcoin maxis. But one thing I've noticed is that crypto culture in general has a very pretty strong anarchist streak. And I'm defining anarchy very, very broadly, generally, is people wanting to route around government in general and not having to deal with the political system, which is something you self say, bought into, but do you identify with anarchism in general, big capital A or lowercase a? And with the way that it manifests in crypto culture at all, to any degree? You know?

Vitalik 17:48

Yeah, I mean, I think a lot of ideas from that camp are ideals that I align and agree with. I mean, I, even this morning made that tweet where I complained about how people, like keep using the word real name to refer to government names, which is something that I really hate. And they're, by the way, there's actually, I guess, kind of mainstream from mainstream Western people, they might be a bit confusing to kind of really try because whatever your name is probably your name, but you know, there are these kinds of other groups of people like foreigners, I'm especially Asian, so I'm, I talk to them a lot, right? You know, names are more fluid thing, transgender people extra wasn't even thinking about them. But that was something that came up in the replies. But that the, in general, that's definitely kind of like one small example of that, you know, I do think that the, the crypto space is about trying to, like, create alternatives to things like governance governments in for, for a lot of the kind of functions that people wants to do like, well, both governments and centralized centralized corporations, I do think that there are two different ways in which you can kind of be, you know, quote, anti government. One way is to identify the government and its goals as an enemy, and set yourself up to try to resist them. But the other way is to try to say, okay, the government is a medicine that is trying to solve very particular diseases that are very real. But you know, like chemotherapy in the 1960s, it's American medicine that has really bad side effects. And so can we create different medicines that have a word, that don't have those side effects or have side effects that are less bad in some way? So I think in general, like, the second approach, in general appeals to me more than the first one, and I feel like in general, like, if you try to do the first one without doing any of the second one, like I just worry that it just kind of sets you up for conflict with the rest of the world too much. I do think that there are cases where the first one is just, you know what you're going for, and that's just kind of the way it is and you're going Whenever if the world and you have to deal with it, right. So like, for example, I'm gonna, like I personally, you know, do like talks to Russian activists quite a bit recently, and you know, people that are anti war are trying to kind of push Russia into a healthier direction. And they are, you know, obviously, he's having a very, very hard time because of their own government. And they're like, you know, it just is a fact of life that, like, they're in an environment where in a lot of cases, like, they are trying to kind of protect their activities from, you know, being interfered with by the local banking system, and, you know, privacy infringement, and the government seeing things and so forth. But at the same time, like, trying to use that kind of frame as a frame for like, this is the default way that all of society works. Like, I think, if everyone has that kind of conflict orientation, mindset, then things or who can just easily completely break? Right? So my, I guess, yeah, my general approach toward the freedom thing is basically, so also, like, focus even more on this question of like, well, you know, what are the things that people are actually looking for? So it could be protection of certain different kinds, it could be some kind of kind of filtering and curation function, it could be public goods funding, and, like, try to find ways to provide at least a little, a little bit of that, you know, using the crypto tools that we have. I mean, as I think, as I've already said, you know, I am a moderate, like, I'm not trying to, like literally replace the entire government. So I definitely admire or align much more with lowercase A and not not really uppercase A but that's in general where I'm coming from.

Lars Doucet 21:47

So this kind of reminds me of to what degree does governance in crypto ultimately depend on real world governance, we have smart contracts, but we've seen instances where there's disputes, and somehow or other these things get dragged into real world courts and settled by dumb contracts. So and I wonder to what degree this is, like related to like the Oracle problem or things like that. So to what degree does ultimately the blockchain and smart contracts and any any any human agreement you want to put on a blockchain ultimately wind up getting appealed to the real world legal systems? You know, I was wondering like to what what sense does the Oracle problem kind of imply that real world government will always have a say in what goes on in crypto land?

Vitalik 22:36

Hmm. So I do think that there have been a couple of instances of people kind of definitely going to some kind of social recourse in order to solve a problem that happens in their blockchain, but where that social recourse is still local to that community, and they ended up solving the problem without relying on a government court completely. So one of those examples is the steam versus hive situation that I've written about a bunch and I keep coming back to it right, basically, and to

Lars Doucet 23:05

be clear steam here is Ste M. Blockchain, not the non blockchain video game store,

Vitalik 23:11

correct? Yeah. So steam is a social network, a blockchain based social network, the goal was that, you know, you have a token, and you can like pay to vote, and people could get paid for making good content and all of these different ideas. So it was originally owned by one group of people. But then Justin sun in this very, not reputable crypto character, I came in and bought the company. And the company originally held, I think it was 20% of all the steam tokens. But there was this community expectation that those coins were kind of held interest, and they're supposed to be used for the goal of making this ecosystem better. But then the steam the company ended up being transferred to Justin sun. And Justin Sun is this outsider who has completely different values, where, you know, basically, as far as I can tell, Justin signs, ideological values, or just makes Justin sound great again. So he, this immediately started a bunch of tension. And eventually, Justin ended up like, basically getting enough like kind of validators on like, on like voting nodes on the proof of stake network, to walk out of the the people who are opposing him, and basically kind of secure full control of the steam chain. Right. So the steam blockchain like it, it had this version of proof of stake, which is totally not the same as Aetherium. Right, and Aetherium. Like all that the proof of stake validators are doing is they're just keeping the chain going in accepting transactions in steam. They also have this power to kind of vote and make pretty much arbitrary governance decisions. So they did, they kind of walked everyone else out. And the community was unhappy about this. And so the community made a fork of Steam. And incidentally, they had to call it hive. And here I think the existence of government law and trade actually went against what I thought was the good outcome. Because I steam, the company had the trademark. And so they had to name it something else. And so in some ways, they kind of lost half the battle right there. But they created hive, and there was this massive migration to hive. And on the hive chain, the coins belonging to anyone who has participated in Justin suns attack and got deleted, right? It's like when you when you make a new coin, you can just kind of make the supply of the coin, do whatever you want, right. And, you know, anyone could make a version of a theory. And that's like, if you're young Vitalik is Evil Edition, where they just delete my balance. And if people really decide that I'm evil, so much, they want that they want to switch to it, then like they've done it, right. So in now, I think hive has like a roughly comparable valuation to steam, I think, I forget, last time I checked, it was a bit higher, but like, sometimes it's higher, sometimes it's lower. But like, that's an example of off chain resolution, that is also not legal system based, right. So that happens sometimes. Other times, though, there's definitely cases where the resolution is legal system based, right. So like, for example, a lot of the time contracts and projects within the blockchain space get hacked. And sometimes the hackers end up returning the money because, in part, you know, they're afraid of legal consequences going to them, or sometimes the hacker is offered to kind of voluntarily return 95% in exchange for the remaining 5% of their money getting legalized. And because it's so hard to like, actually spend $60 million, if you have illegally obtained money from a hack like that, that actually turns out to be a win win. So you know.

So, you know, a hacker turns into a security bounty. But so, there are lots of cases of that kind of legal recourse happening, too. I think, in general, like my view on this is that if courts and law disappeared, and assuming that in such a world, the Internet was able to keep functioning, which I think is probably not true of the internet today, but probably would be true of an internet that actually was optimized around the world being more dangerous. So one partial example of this might be me know, the war in Ukraine, and how Elon just brought in all of these Starlink nodes, and they actually have been very effective at keeping all the different parts of Ukraine connected, like I think, even you know, kept as of still connected to the world almost up until the very end. So that's, you know, if you imagine it, like, basically, if the internet did exist, then you know, people would be able to would be able to cooperate, and you know, you have cryptographic keys, they would be able to solve things off chain. But at the same time, the number of problems that you have would just kind of be, you know, one or two levels higher than the number of problems that you have today. Right. So I think it's not an either or thing. It's like, the government exists, whether we like it or not, and courts exist, whether we like them or not. And so there are a lot of cases where you can kind of gain some benefit by appealing to them in some situations. And so people do, and, you know, on net, that's probably reduced the number of the amount of terrible stuff have happening in the crypto space, which is good.

Lars Doucet 28:28

Yeah, to to follow up questions on that. And then I'm gonna want to kick it back more to questions of governance. But I thought it was really interesting that in the in the steam in the hive divorce, it's interesting that you kind of pointed out that one of the things that didn't come over was the trademark, which is something that only exists in the off chain legal world, and is something that I mean, it's an off chain asset, right, a trademark, and it's a court that adjudicates that. So it was interesting that they could get everything but that. So I was wondering if you had any thoughts on that, as well as when you say the word hack, there's different kinds of hacks, right? There's the kind of hack where you steal a bunch of passwords and gain unauthorized access. And then there's the kind of hack where you do what the smart contract allows, but it's not what anyone actually meant, and cause all kinds of havoc. And there's the whole like, code is law question. So I was wondering if you had any thoughts on the tension between those two subjects?

Vitalik 29:26

What sorry. So what are the two subjects here

Lars Doucet 29:28

the two subjects is is that yeah, I probably should have asked him one at a time. But the first one was some of the steam hive thing. They were able to do off chain resolution. But the one thing they weren't able to resolve was a legal conflict ultimately over the trademark. Right. And so is there anything interesting to say about that, like is that just the Oracle problem is there any way to stuff the trademark rights on chain

Vitalik 29:53

right I mean, theoretically there is right like I'm you know, we have DNS and Aetherium name system, and like I have Vitalik agility if the name, but you know, if you manage to hack that particular wallet, then you know, you can have italic dot eath for yourself. And, you know, I could sue you, but um, you know, you could transfer it to an anon account and it might never be able to find it again. And I might be able to do things like, you know, Tim plane to ether scan and complain to some of the centralized ecosystem providers, and they kind of add the interface away or might blacklist fidelity, right. So like, that might be possible, but what they're not going to do is I'm never going to get the telethon eath back. So if now, of course, you know, if I want to I can make this our DOD, the my holding of intelligence, I'd still be very secure, right. So in the crypto space, there is this concept that I've been a big proponent of for a long time called social recovery wallets, where basically, you it's a special kind of wallet accounts, which is a smart contract. And the rules basically say that you define a fairly large group of people. So in the case of the wallet that contains like, all of my money, for example, this is public, this is public on chain information, it's a four of six. And, basically, so there's some group of people and the majority of those people need to sign off in order to make some particular something happen. So like, you know, it could move with our bodies over to that wallet. No, it could even move it's our.es into a contract where kind of I could unilaterally do things with that name. But then if it ever gets stolen, or if it ever gets lost, I could kind of call off that group of four of six and force them to transfer back. And so crypto does offer these kinds of things that could and if gift, the risk of things like loss or theft to be reduced to a very low number of the technique is actually very similar to what WeChat to use this for account recovery, like in WeChat. When you recover your account, you also have to, like basically call up the two of your friends and get them to send a six digit code to you. It's, which is interesting, right? Like, even in those cases, where it's centralized, the resolution is obviously completely available. Like sometimes these kinds of techniques also have to be used just for efficiency purposes. Right? Yeah. So I think in the trademark justice on Steam case, one way to read that situation from a political economy perspective is where basically, you have a local level of governments, which is the steam blockchain, and then you have a kind of central more distant layer of government, which is the trademark ecosystem. And the higher, the more central layer of governments was just socially too far away from the situation and didn't understand the specific specifics of the situation, and like local community morals, well enough to be able to give the correct outcome. Right. So that's kind of more generally, I guess, an arguments for trying to make some of these government functions more kind of local. And I don't necessarily mean specialty, local, because I think in the 21st century, you know, individual talents are kind of less important as a yellow cross of community than they were historically I mean, like, socially local. And in. So the, I do think that like blockchains, and Seminole, Dallas and things happening in the crypto space and kind of trying to handle most things themselves as a good example of making that happen.

Lars Doucet 33:28

Okay, so well as a transition question to get us back to some topics of governance. One of the chief pitches of crypto is decentralization. But we keep seeing this trend of centralization anyway, and this comes in many forms, you know, whether it's services to just will stick a private database right in the middle, between the blockchain and its users, or consolidation of mining power, concentrated coin ownership, or Dows, that are owned effectively by three people, how do you fight this tendency towards re centralization or, you know, assuming you think it's a bad thing? Just do you have any thoughts on that that kind of trend towards centralization versus the tension of the initial pitch of decentralization? Hmm.

Vitalik 34:10

I mean, I definitely think that it's a concern. And I definitely have been the get into getting more and more open to this viewpoint, that if you want some particular like, layer of an ecosystem to be decentralized, then that decentralization has to be to some degree and intentional and ongoing effort. Right. Like, that's the philosophy behind the antitrust law, for example, to some extent, right like that, you know, you want to have some kind of, like explicit government's thing that pushes for competition to continue to exist, because otherwise they get their competitors do end up kind of calling each other and banding together. I think, in the crypto space, obviously, there isn't a government enforcing antitrust law, but there are these other kinds of community driven levers right. So one of them is Just reputation and people's desire to be a good person and be seen as a good person. And this happened in both Bitcoin and Aetherium, right? Like, I think in Bitcoin, there was a situation back in 2013, when a single mining pool it was called a G hash.io got to 51% of the total Bitcoin network hash power, which basically meant that they were would be a have been able to unilaterally rewrite the chain to be whatever they want. And everyone noticed this, and there was this large movements to try to get people off of G hash, it actually works, right and the percentage once I kind of down pretty quickly. And I think after that I forget the details. This is a long time ago, but I believe that they even made a public commitments to not let their market share go above 40%, after that, which I thought was a very good kind of lovely and pro social move of them. Right. So there's those kinds of levers. And other Weaver is, of course, like protocol design, and trying really hard to actually design the protocol to not have economies of scale, and even to have diseconomies of scale to some extent. So one interesting example of this in theory, in Aetherium, proof of stake design, is we have this concept of anti correlation penalties. What an anti correlation penalty means is basically that, when you as a proof of stake validator node, do something clearly bad. So like sign two conflicting blocks at the same time, for example, then the amounts that you get penalized is proportional to the number of other validators that do something wrong at almost the same time. So you get penalized more, if you fail at the same time as other people. And you get penalized, actually very little, like only about 3% of the amounts, if you get penalized at a time when no one else is getting penalized. So the idea here is basically to discourage people from joining the largest oil, to discourage people from even putting their staking on the same cloud service as everyone else, to discourage people from sometimes even running the same software or, you know, relying on being in the same geographic zone as everyone else. So in some ways, it's like this intentional effect of efforts to create the exact opposite of the nobody got fired for buying IBM effects, right. You know, this is this kind of, you know, conformist effects that exists, you know, in a lot of your old contacts, where if you make a decision that leads to something bad, but you are just following common wisdom that you never actually get get punished, because you know, what, the guy was just holding common wisdom. But, you know, if you do something different from other people, and that leads to something bad, then like, all the blame goes on you. And so the, you know, in the, in the proof of stake case, like it's intentionally trying to create the exact opposite, right? It's like, no, if you do something that's the same as everyone else, and that leads to something bad, that's when you lose all your money. And there are signs that it's effective, like there aren't like we've talked to even staking pool providers, some of the big ones. And the some of them have been decentralizing between different providers, and the different software implementations internally, because they were afraid of like one of them failing, leading to a huge amount of money getting lost. So that was actually interesting. You'd like even align selfish incentives with the decentralization goal. So yeah, and I think there's a lot that you can do with these kind of protocol changes that try to, like, deliberately get middle remove economies of scale, where possible and add these diseconomies of scale where possible. But then also, I think, there is some extent to which there might be economies of scale that can't be removed. And the only way that we really have to compensate for that is by appealing to this kind of community morals and social governance layer sometimes.

Lars Doucet 38:59

So I'll kick this section over to you well, because that I think a good is a good bridge to questions about voting systems. Absolutely, absolutely.

Will Jarvis 39:07

So recently, Vitalik actually, like three days ago, we talked to someone who's working on approval voting. They've had a lot of traction. They've gotten, you know, a lot of success in implementing of approval voting in South Dakota, they're working on Seattle, Washington now, they raised a lot of money from open philanthropy, and it's been going really well. I'm curious, you're interested in quadratic voting a lot of these other interesting systems. Can you contrast quadratic voting with approval voting? And is there in some sense, like, I guess, a trade off and Lars you might have a better phrasing than I do for this between like a system that's like more optimal, but it's harder to explain and kind of illegible to people to one that's, like, easy to explain, and somewhat easier to implement.

Vitalik 39:47

Right. So I guess the general like theory of why existing voting is broken like starts with the arrows theorem, right where you basically there's like this list of probably have a fairly simple and logic very intuitive property instead a voting system that st should obviously have. And it turns out that it's mathematically impossible to create one if there's more than two candidates. And so you know that like, that's why we have issues like the whole strategic voting thing where, you know, if every, there might be a lot of people that like one particular candidate, but if there is this kind of self reinforcing impression, that candidate has no chance that everyone votes for just the lesser of two evils out of the two that do have a chance. I guess. So approval voting is one way of getting around arrow CRM, right? i i Do you think arrow CRM is overrated by a lot of people like era era CRM, basically, yeah. It often gets cited as this kind of general theory, why politics sucks, and why it has to suck. And like, the reason why that's not true is because arrow CRM is like specifically reliant on this concept of ordinal preferences, right that like, like, it assumes that the the thing that you're inputting is, you know, is a better than B is a better than CSP better than C, without being able to say, you know, by how much is a better than B or No, which ones do I just think are fine, and which ones do I think are not fine? You know, I actually have my own candidate for kind of the mathematical theory, that is the general reason why politics sucks, which is, I talked about this in one of my blog posts on coordination. It's basically the fact that in the individual choice model, so where games are, like in game theory, where everyone's making decisions separately, you can have games that have equilibria. But in the cooperative game theory setting, so where you assume that kind of subsets of players can actually talk to each other and have shared collective strategies. There's actually a wide class of games where there isn't even an equilibrium like it's basically gyms to be chaotic. So I thought that was just a bit of a fascinating aside, right. But approval voting does change the issue or solve the aerosteon problem. And basically, because instead of saying, you know, who's better than who you're just saying, you know, which candidates Am I fine with? Which candidates? Am I not fine with? Quadratic voting is interesting in that it's like range voting in that you get to kind of score like in a very fine grained way, well, how much do you like each candidate, right? But range voting has this problem that like, if you think some candidate is good at all, then you know, if you know that, they're going to do an average. And let's say if the average is 55, and your actual opinion is 70, votes, 70, it might increase it to 55.01. But if you instead vote 100, then it's going to, then you're going to increase the average to 55.03. Right. So it's just always everyone's incentive to vote either zero or 100. And it collapses down to approval voting. But But quadratic voting fixes that problem by making the your votes like have a cost, right and have a quadratic cost. So if you want to vote with a score of one that cost you one credit, if you want to vote with a score of two, that costs four credits, if you want to vote with a score of three that has nine credits. And so the more extreme your vote gets, the more expensive in terms of kind of sacrificing your ability to vote on all the other issues doesn't get to vote even what kind of one unit further right. And it turns out that there's a bunch of really nice math why quadratic voting is optimal. And it does basically perfectly compensate for this kind of zero and 100 bias, that range voting house. So quadratic voting, basically, it's great because it allows you to express these, these preferences that have varying levels of strength, where some people might be weakly against an issue. So other people might be strongly in favor of, or against an issue. And it does it in this kind of more inclusive way, where it's part of the protocol. Because as opposed to like, say, for example, like nimbyism, right, where you do have a small number of people that's like heavily against, you know, housing being built, but the way that kind of city hall meetings meetings, and the whole system is structured work is that it basically, you know, really selects for like a particular group of people that just have a lot of time on their hands to like, to, you know, go into these meetings and keep talking and shutting everyone down. Right. So, whereas, you know, with quadratic voting, it's like, there is a way to express the fact that you feel something strongly or feel something weakly, but it's done in this kind of more, you know, equal way where just everyone gets some number of credits, and you can just go and vote.

Lars Doucet 44:28

You know, speaking more on, you know, nimbyism and your kind of thoughts on governance. You've written this article talking about this dynamic between V talk cracy and bulldozer mentality. I was wondering if you could briefly summarize, you know, just in a couple sentences, what that means for our audience and how that drives your thinking and ties into the things we've talked about today.

Vitalik 44:51

Yeah, so if you talk cracy versus bulldozer was my attempt to, like show a different conceptualization of political divides that we have, right. So I think people are used to left versus right and authoritarian versus libertarian. But there's a lot of people like a lot of movements and viewpoints that really cut across both in a way that feels inconsistent, but actually, is very consistent. And so the authority or the autocracy versus bulldozer or kind of access basically says, On the VT zakresie side, you have systems that are biased toward inaction, and toward doing nothing, unless, like, almost like almost everyone agrees on a move in a particular direction, and giving lots of different participants veto power, whereas bulldozer is, is basically, you know, systems where you do give like, particular single individuals or potentially large groups, just the ability to kind of move things and that's, you know, the don't ask for permission, beg forgiveness, sort of ethos. So, one of the criticisms of contemporary America that you see recently, I think, it was hard for people to articulate, especially if you think in the left versus right, in the libertarian versus authoritarian sense, because the criticism has aspects to it that appear on all sides of the spectrum, right. And the criticism basically does say that, you know, hey, look, America is at the top per se, right? So some examples of this are that, like, you get people who milk for example, criticize, you know, government for being ineffective and not being able to agree on new laws, or even be able to do local things. Like, there was this fairly famous big article, like, I think one or two years back, just talking about, like, why Penn Station is terrible, and how no one has managed to upgrade it for a really long time.

At the same time, um, you know, you have, like, the criticism that like, oh, you know, private property gets kind of really respected. And it's really hard to do even very needed things if they go against private property in some senses. And at the same time, um, you know, you get this criticism of nimbyism, and which is weird, right? Because if your viewpoint is like, oh, like, the problem with America is that it doesn't value the need to do a collective good things because it respects individual freedom too much. But like, California zoning color codes are the exact opposite of respecting individual freedom, right. So like, that's kind of the totally middle 45 degrees off wrong access by which to even make that case, right. So if instead you say, Well, you know, the problem actually, is that America has veto kradic. And that this is a big problem, then, like, that actually makes sense, right. And I think there is a good kind of way to shape the historical story for why this happens, right? Because like, there is a left photography, there is right photography, and I think you can view a lot of it as being a reaction to authoritarian high modernism in the early 20th century, right. So both Hitler type stuff, but also Robert Moses, and some of that kind of urban planning stuff that just did a lot of bulldozing that ended up really hurting people. And so, you know, there was this viewpoints that like, okay, look, like, you know, if you let great man just like go around and have power like that, then you know, they're going to do terrible things. And so, you know, you can have the left wing response to that, which is dominated by things by saying, you know, oh, you know, we need community input. And we need to make systems that lead to make sure that something like that can't happen without community input. And then there is the more right leaning over here and responsive says, We'll see, this is why personal property really needs to be protected. But you know, really, they're, in some ways, part of the same trend. And in some ways, the kinds of problems that too much of that mentality causes are also very similar problems. Right? Like, you know, if you have a system where you have total private property, and there just is no eminent domain, then, you know, how are you ever going to build something like a high speed rail, right? Like, at some, once you start buying up the houses, everyone else that's kind of in the middle of the path, they're going to realize that this is going on, and that's their consent is like, basically required for this multibillion dollar project to finish. And so they're going to build things up by a factor of five. And just, you know, coordination between like the UK kind of different government bodies is often a problem. And all of these said, you know, different reasons why stuff is expensive in, in the US. So, if you make that criticism on the like, if you feed zakresie versus Baudot, bulldozer access, and you basically say, well, oh, the, the problem is that, you know, maybe America needs to be willing to be a little more bold or sorry, then, like, the argument just feels kind of more coherence. Right. So that's in the US context. In the crypto context. I think one of the things I mentioned in the article is that I think crypto has this interesting duality to it in that crypto often is accomplishing some Pretty bulldozer react, right? It's basically saying, you know, look at these sclerotic financial systems that are not updating to the modern age, it's still incredibly hard to send money internationally. So we're just not going to bother interfacing with this existing system, we're just gonna, like, go ahead and build our own. And, you know, here we have a currency, you can now transfer it from Augustana, Guatemala as quickly as you can transfer an email and, you know, you can go use it, and it's great. And, you know, you know, good luck trying to stop us. But at the same time, the mechanisms that cryptocurrency uses to protect itself internally are very veto kradic. Right. And this is especially true in the Bitcoin space. Because, you know, in the Bitcoin space, there's this very conservative developer ethos, and there basically is a group of like a couple of dozen people where any single one of them can basically Stonewall a particular proposal to the point where it's either just can't happen or takes a Yeah, a really long time to happen, right? And there's this really strong bias that like Bitcoin is not even a majority vote system. It's not a democracy, you know, you actually do need consensus and consensus basically means no, no significant disagreements that kind of the Bitcoin already, you know, we just decide is technically reasonable. So in theory, I'm I think also has this to some extent, like it is a weaker I think, in part because in theory M also has this like constitution around like moving to proof of stake and moving to sharding. But you know, there are also a pretty strong Fatah cracy norms, so especially around, you know, things like like immutability, and just not going around and changing the state to, you know, like rescue accounts that got hacked, for

Lars Doucet 51:42

example. Yeah, so that kind of brings up like the whole first mover second mover advantage, you know, there's this common criticism of blockchain is the environmental issue. A lot of modern l ones and l twos that are coming out are now kind of proof of stake is kind of table stakes for environmental reasons. And also just for, you know, transaction time and cost reasons. Bitcoin was the first and so they had the advantage of got all this mindshare, but then they're also kind of locked into this V ta cracy. As you say, like, I don't see Bitcoin changing, like in major ways, anytime soon. Ethereum had your second mover advantages, because you could see what happened with Bitcoin. But um, I guess the question I'm kind of asking is, if you could talk about first mover and second mover advantages and disadvantages. And like, if crypto if you had all the knowledge you have now, and crypto revolution hadn't started yet, and you were now going to found a theory? I'm like, what would you do different basically, with knowledge of these first and second mover advantages and disadvantages.

Vitalik 52:39

I do think that there were a lot of these kind of specific technical things that I would want to, like transmit to myself back in 2014. So things like for example, you know, don't bother trying to make this really complicated and perfect proof of stake from the beginning instead, start off with a simpler proof of stake and upgraded over time. Things like a lot of particular places in the protocol where the protocol could have been designed to be a lot simpler. So there's a lot of these different lessons that I think we've learned from Ethereum is progress so far, and a lot of those things are fixable. But just because if your aim is a living system, it takes much longer to fix them. And Aetherium itself did ends up learning quite a bit from Bitcoin, right? So like, for example, one of the political problems that Bitcoin has, I think, is because there is this one central Bitcoin clients, the bitcoin core software implementation there that basically creates this elite of core developers where those are the ones that have veto power over a change. Right? And it's very hard to basically yeah, for an outsider to come in and start participating in Bitcoin governance on their own terms, kind of without, you know, respecting the existing establishment and, and its values and so that were easily lead stead being kind of sclerotic in a lot of list. So the way what Aetherium did is it basically said, we're not going to have one clients, we're going to have a bunch of clients, and anyone will start their own clients, the Ethereum foundation is going to work on a client's and but we're going to work on a client that's written in Python, which is a very slow programming language. So it's basically just like any implementation that's set up to fail. And in a market, I was just there to kind of show people how it's done. And just experiment with the ideas, right? So that's something that, you know, it's a choice that we made, actually, that we made two iterations of the choice, interestingly enough, so when Aetherium first launched, there was, you know, the Go client, the C++ clients, and But what happens was that we ended up launching, like basically being forced to launch more quickly, fairly quickly, because I'll actually it was it ended up taking much longer than anyone expected, it ended up taking about, like 20 months, and people were just so tired of a theory, I'm not launching, but they were like, hey, you know, this thing has to come out already. And so because of that only one clients death was really ready at lunchtime. And so the other clients were not ready. And so like, none of the other clients ever really had a chance. So then after that, there was the parody clients, which was started by an outside team. And so that succeeded for a while, but then the parody team went off to do polka dot. And so they stopped, we're working on that client. And now actually, we have like, nevermind, Aragon, basically, we have a couple of alternatives. And it's finally becoming healthier. But that took a long time. But in theory comes during our switch to proof of stake, we actually learns from our own kind of like, rounds, one failure. And we get, that's when we decided on this approach that the foundation is only going to do the Python client. And the foundation will kind of actively subsidize any kind of competent seeming group that's trying to make a different client. And so now we actually do have this like diverse ecosystem of the four or five pretty high quality of implementations of Ethereum is proof of stake side. So that's an example. So that there was an example of I guess, a theory morning for Bitcoin and then Aetherium warning from itself. And then, I mean, there is, of course, these newer projects that claim to be learning from Aetherium. And that tried to kind of avoid what they see as being some of Ethereum issues, which is interesting to see, I think it's interesting, because sometimes they do identify things that like, if Etherium easily could, we would love to adopt, there are some times the identify things that like actually don't really matter that much. So and then sometimes they identify things that I just disagree with, right? So a lot of those chains tends to be much more comfortable with higher levels of centralization, for example, right. And that's something that I think both I and the Etherium community are not comfortable with. So that's a case of just them deciding to, you know, make a kind of fundamentally incompatible different products. And so we have, you know, two ecosystems, and everyone just goes to whichever one appeals more to them personally.

Lars Doucet 57:26

So I wanted to tie this back to get crypto and Georgia ism together, I wanted to ask you a quick question to kind of tie those two together was, there's been this whole trend of virtual real estate on chain. And I was wondering if you had any thoughts about that phenomenon? I have my own thoughts, and I've written extensively about it. But I think it's kind of this interesting. confluence of land economics and crypto. Yeah,

Vitalik 57:52

I think it's a very fascinating topic. I think it's part of this like a broader topic in crypto that I've been trying to push for, which is like, if you have a crypto project that can create this, like, limited supply asset that people ended up wanting and being willing to pay huge amounts of money for, then I think we should create systems that try to kind of channel that revenue into funding, like public goods in the ecosystem that would otherwise get underfunded, right. Like I think the way that Glen Weil says it is a tactic ingestible subsidize the increasing returns, right? So it basically it's like, tax the thing where if more people participate in the the experience becomes worse for each person, and use that revenue to subsidize the thing where if more people were dissipated, becomes better for each person. And so you kind of fix one of the big economic imbalances there. Right? So in terms of like, things that are ingestible, in crypto lands, like obviously, there is the just the the token supply, right, so there's a fixed number of tokens. And if you issue an unlimited number of tokens, the whole thing breaks. And that the ability to issue that limited number of tokens becomes the sort of key ingestible resource that you can get revenue from allocating. And other one is block space, right? If block space was infinite, and everyone could send as many transactions on Aetherium as they wanted, it would be impossible to run a node. And so there's a fixed amount of space and so Aetherium automatically auctions that space. And since about a year now, the revenues from those auctions get burned. Right? This was EIP 1559. The main goal of VIP 1559 was originally actually to get rid of first price auction efficiency is it was this kind of technocratic credit economic thing that basically said hey, you know, looking at what game theory says about what how auctions work today, and let's make a better one, but it had the side effects that also it actually burns those coins. But then also there are other kinds of congestion effects in blockchains where is an excellent one. ENs names are also an excellent one, right? Like there's only a limited number of three letter and four letter ens names. There's things like the right to sit in include transactions in a block in a block first, this is the thing that the cool kids in crypto will call them nev extraction. Like basically, there's a lot of revenue that you can gain from being able to choose just the first transaction, like, you know, you can do arbitrage of on chain things and so forth. There's a limited issue. NFT is obviously at red. So there's this long list of things that are in the crypto space that Bennett that have like some kind of congestion effect or benefit from being a limited supply in some way. And I think, you know, the idea of actually yeah, capturing that revenue, and then putting that revenue toward, you know, funding things that would otherwise be incredibly hard to find is somewhat one of those things that I think many other crypto space already is doing to some extent, but potentially could do really well. And it's also one of those places where I'm hopeful that I'm you know, there might be some innovations there that then get exported to other contexts.

Will Jarvis 1:01:11

That's great. Well, metallic, one more quick question. You've got your whole life ahead of you get the attention to the world. What problems do you want to help solve through the rest of your life? And how do you prioritize those problems?

Vitalik 1:01:22

Hmm, that's a definitely a good one. I think, like arounds now is an interesting time for myself personally, because it's getting to the point to where Ethereum research is ossifying. Right? So it's, the amount of stuff that's changing in the Etherium roadmap is becoming lower and lower, the Ethereum Foundation's a level of quality has just shot up massively over the last three or four years, to the point where if it's gone from me being like, basically indispensable to any kind of research happening to the point where there are these really amazing and smart teams and individuals that are capable of, you know, making these very high quality proposals themselves. So and at the same time, it's also getting to the point where like, we understand what blockchains are like, and we understand what blockchains will be like. And so a lot of the stuff that hasn't been done yet is going to happen at the higher levels of the ecosystem. And so, lately, I have been getting more interested in the higher level questions. And, you know, and the, these questions of like, what are some good Ethereum applications that don't exist yet? How to make Dallas work better, how to make decentralized identity work better, Ian's mo these kinds of things all start end up kind of quickly, heading into the questions of kind of mental political economy and psychology and how people interact with each other, and even more than blockchains themselves do. So no, no, it feels like I'm going to be whacking my head against that. And, you know, both in the Etherium ecosystem and also in a kind of increasingly in need of some of these efforts outside and I think increasingly over time, those spheres are going to start merging for quite a while.

Will Jarvis 1:03:12

That's excellent. Well, metallic, thank you so much for taking the time to come on the show. We really appreciate it.

Vitalik 1:03:17

Thank you to you. This is a great one.

Will Jarvis 1:03:25

Thanks for listening. We'll be back next week with a new episode of narratives.

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future.

Will Jarvis 0:20

I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars to say joins us as a co host. Well, Daryl, how are you doing this afternoon?

Daryl Fairweather 0:44

I'm doing great. How are you?

Will Jarvis 0:46

Doing great doing great. Thank you for coming on the show. Could you go ahead and give us a brief bio and some of the big ideas you're interested in.

Daryl Fairweather 0:54

So my name is Daryl Fairweather. I am the chief economist at Redfin. As the chief economist of red fin, I study the housing market and I direct our economic research team and coming up with research that is relevant to the housing market to homebuyers sellers, real estate agents and basically anybody who is interested in following it. I speak regularly on topics like housing affordability and other housing market topics. And before working for Redfin, I worked for Amazon as a senior behavioral economist.

Lars Doucet 1:31

Can you tell us a little bit about exactly what Redfin is and does and, if possible, contrast it with Zillow, like most people know Zillow and Redfin and kind of think of them as the same thing. But if you could tell us a little bit about what Redfin is specifically, and how that all works.

Daryl Fairweather 1:47

Sure. So Redfin, we're most known for probably our website and app but we also have a full real estate brokerage, a mortgage company, a rental company now so and also title company. So we really are full service when it comes to finding a place to live. Zillow is a website is well, they, for the most part, don't have a full staff of agents. Actually, I don't think they have any agents now at all. They did for a while, and they had when they were engaged in ibuying, which Redfin does, as well. But Zillow shut down their AI buying unit. So Zillow mostly has advertisements for agents who are outside of Zillow, they might work for another real estate agent. And then maybe they'll have some ancillary businesses, but I'm actually not 100% familiar with everything that they do.

Lars Doucet 2:38

Cool. So that's really interesting. Now, one thing that's very interesting to us, one of the reasons we had you on the pod is you worked for Redfin, this is a major real estate broker in the United States. And at the same time, you're advocating for fixing the housing crisis, advocating for fixing this affordability crisis. I mean, to put it bluntly, aren't high prices good for your employer and real estate professionals in general? I mean, it will tell us all about it.

Daryl Fairweather 3:03

It's not really good for anybody that housing is the way it is in this country. There's a lot of market and efficiencies, things like nimbyism. Also, just like the way that we tax, land, and property is not as efficient as it could be. Which means that we don't build as many homes as we probably should be, to meet demand we underbuild and, you know, even working for a real estate brokerage, we want people to be able to move to be able to buy homes, those are our customers, we want more customers. We'd rather have more customers than charge the customers, we do have more money.

Will Jarvis 3:38

The base makes a lot of sense. As you mentioned two interesting things there. There's a couple of things restricting supply and kind of driving housing prices up nimbyism and kind of inefficient tax structures. Can you talk about those two separate things and how they contribute to the housing crisis?

Daryl Fairweather 3:54

Sure. So I will start with nimbyism. nimbyism is it stands for not in my backyard, back in like the 1970s. It referred more to things like industrial projects going into neighborhood but then it kind of evolved into into residents really being opposed any kind of development in a neighborhood. So you buy a home in a certain area, maybe all the homes are single family homes. You know, there aren't any shadows in your backyard from taller buildings, you have a view of say the lake, nothing's blocking it and then you start lobbying to protect that to make sure that no large apartment buildings go in that might block your view or cast a shadow, even if it means that housing for everybody else is on affordable and inaccessible. So it's kind of just basically a shorthand for I think, being kind of selfish. valuing your property value, your view, your neighborhood character that you want more than building a neighborhood that is welcome for all people or for more people. To be able to afford and live in. So, unfortunately, nimbyism, it's like a consequence of, I think incentives. Homeowners are incentivized to protect themselves not to think about things. More at a larger level, we could address that I'll pivot and so where the land value tax, so a land value tax is basically the idea that you you extract the value of the land and redistribute it back to a community because nobody really owns the land, right? I mean, I guess maybe that's debatable, but it's based on the idea that we all collectively own the land. And so if you build on a certain plot of land, you should be paying some kind of rent. For using that land, anything you do in terms of the structure would be yours. We went tax that with a land value tax as opposed to a property tax. So you can build whatever you want, but the land value has to be shared. And the way that that can actually combat nimbyism is that you would want to get the most value out of your land by building perhaps more housing on your land, instead of just laying the land stay as single family home. And if you didn't want to do that, then you would more likely want to move somewhere else where the land value tax was lower, where you wouldn't be impeding on other people's ability to get the full value of the land.

Will Jarvis 6:20

So it sounds like there's kind of a different incentive structures. So if we tax property, then we'll get less kind of productive uses of land. And if we tax the land, we will will get less speculation. Is that like a fair framing of what you're describing? Yes, I

Daryl Fairweather 6:36

think I think less speculation because the value would be extracted, it wouldn't be something that you would bet on. And I think that that is more equitable, just in terms of like how we distribute the value of land, it's not all going to the people who were just around earlier to buy it before the value went up. The value would be more reflective of all the people who contribute to that value. Because like, if you're in a place that has really exclusionary zoning, say, San Francisco, for example, and you bought your home, let's say in the 1970s, the value of that land today is mostly attributable to the tech sector. And you personally buying a property like you didn't contribute to that necessarily. So redistributing it back to the whole entire city would make that a bit more fair.

Lars Doucet 7:19

Now, Darrell, you're chief economist here at Redfin. So as an economist, what led you to these policy conclusions? You know, what is what was the theoretical basis for them? And how did you personally encounter them?

Daryl Fairweather 7:31

So I Redfin as the as the chief economist. We are Team, The Economist team studies, the housing market, and our directive is to just inform people on what's really going on. So just telling the truth is, it's a big part of what we do. We do the research, and then we report on it, we try to report on it as factually as possible. So people know what they're getting into when they buy a home. They understand why values keep going up, why housing affordability keeps getting worse. And you can't really explain that without talking about things like nimbyism, or property tax structures. These are the root problems. These are the root thing, our policy choices that have gotten us into the situation that we're in today.

Lars Doucet 8:10

Now, you've shared some videos on your Twitter, one, one of them you shared was the housing crisis is the everything crisis. Now I've I've heard of this theory before, which is known as also known as the housing Theory of Everything. And can you explain what this theory is about and what your thoughts are about it?

Daryl Fairweather 8:26

Yes, so? Well, I think there's two parts of it. Part of it is that housing affordability issues cause a whole lot of other problems in the economy. So when housing prices go up, people have to devote more of their income just to housing, they're not able to buy other things are not able to consume, but not able to invest in things outside of land, which doesn't like add productive capacity to the economy, it's just land. And that makes the economy overall less productive than it could be a mix as poor as a society. I think another way to think about the housing Theory of Everything Is that what's wrong with the housing market is really what's like the root cause of what's wrong with the housing market. When it comes to things like nimbyism is what could potentially be our downfall with other big crises, like climate change, for example, if people have this mentality that they're only going to be concerned about themselves, and they're going to block policies that could potentially help everyone if we all just, you know, stop thinking. So individually, that's gonna prevent us from making investments and in a carbon free or neutral future. So those are two ways I think about how how have you understand what's going on in housing, you can really understand how we're failing as an economy and other and every in every other aspect.

Lars Doucet 9:47

So one question I want to follow up on there is that inflation is really bad right now. Right? And as an economist, I'm sure you have opinions about inflation. Now, housing inflation, according to your argument here seems to be kind of a separate sort of thing from Like bread inflation, but at the same time, like, I guess my plumber and a nanny or whatever any any laborer who has to live in the city has to pay rent in the city. And so the cost of that labor is probably affected by some degree by housing affordability. So to what degree is just, and then you pay more for a nanny or a plumber? I'm not an economist, I don't know, you please correct me, to what degree is inflation? To what degree is it? Or is it not driven by the housing crisis.

Daryl Fairweather 10:28

So I'm gonna separate out inflation, and stagflation. So inflation, the kind of inflation that the Fed has control over is driven by increases in demand for something and increase in demand for something could cause home prices to go up, it could cause the price of bread to go up. And the root cause of that is that there's too much money flowing around in the economy, there's too much demand, if you just want to reduce that you increase interest rates reduce the money supply, demand goes down. The other side of that is stagflation, which is driven by a lack of supply. And the primary reason that housing prices are so high is not because there's too much demand, it's because there's not enough supply. And that's not something that the Fed has any control over the only way to increase supplies to increase the productive capacity of our economy. And that's just a fancy way of saying like, we need to just stop doing things that hurt us for no reason, like having single family zoning is just like a very silly policy choice. We all know, we shouldn't have it, if we want to improve housing affordability, let's just get rid of it. Or things like having a carbon tax, for example. That's kind of a straightforward thing that a lot of economists agree on. If we did that, then we would get a lot closer to a carbon neutral future. And we could even redistribute the gains of the taxes, so doesn't hurt low income people who tend to consume more carbon relative to their income. So there's a lot of economic solutions that I think most economists agree on that we should just try to figure out a way to do. But I think this goes to my political economy side, I did take a course in political economy, you Chicago when I was a grad student. And the main takeaway from that is that we don't get a lot of these policy solutions. That seems straightforward, because it's just difficult politically, to get people to vote in the interest of everyone instead of the instead of their own personal interests. And that can create some like bad policies.

Lars Doucet 12:26

I have one real quick thing going back to a word you said, you said stagflation. Could you just define what that is for our audience?

Daryl Fairweather 12:32

So Stagflation is an increase in prices that is caused by a reduction in supply. A big example of this was actually we can we can point to an example right now we're experiencing stagflation. From the war in Ukraine, we aren't buying oil from Russia, so we have less supply of oil. And that has caused an increase in gas prices and the Fed, if they tried to raise interest rates, it's not really going to solve that problem. It will reduce the amount of money in the money supply, and people will buy less oil, but they won't like there still isn't enough oil for what we would want. You know what I mean?

Lars Doucet 13:09

Yeah, my understanding of the word I first heard it, like referred to from the Carter administration, that traditional macro problem is inflation, because economy is growing, but we also have inflation. So good thing and bad thing. And stagflation I think is the stag word is that stagnant plus inflation like economy is not growing, and you have inflation. So two Bad's is that

Daryl Fairweather 13:29

yes, I think that I never actually thought about where that portmanteau came from. But that makes a lot of sense. Yes, the economy is not growing, it's not that we have too much demand, demand is a good thing, you just have to make sure it's not too much. But a reduction in supply is overall bad. And then if you reduce demand, then you're making things worse on top of that, and it's like you're getting punched from both sides, just to fight inflation.

Lars Doucet 13:52

So the point is, you can't use your traditional monetary policy lever of pick up point on the trade off between growth and inflation to solve stagflation. Is that what you're saying?

Daryl Fairweather 14:01

Yes, there is no, like, there is the there is no trade off. It's just worse all around. I mean, inflation is bad in and of itself. So you can't let inflation get too bad because of stagflation, either. The Fed like they did during the oil embargo and the issues in the 1980s. They had to, they had to raise interest rates then too. So anyway, it's kind of a tangent.

Will Jarvis 14:24

Darrell, you mentioned something really interesting earlier around the political economy of just throw up problems around political economy and passing things that would be good for the collective for all of us. Particularly, I'm thinking about nimbyism. It seems like a real challenge to solve nimbyism, because these decisions are made zoning decisions are made at the local level you can get out of your town council start yelling, I don't want this you know, high density housing project to go up behind in my backyard. For x reason it might drop my property values down. And there's this concentrated kind of incentive for me to prevent this from happening. And to kind of this we would all be better off but it's a small other incentive for all of us to kind of band together and and, you know, prevent this person from stopping us from building more high density housing. What can we do to solve that kind of problem? Is it moved these kinds of zoning decisions up to the state level or the federal level? Or is it some other solution?

Daryl Fairweather 15:16

I think that going to the state level is has been affected has been somewhat effective. And that's what California has done. They're still getting a lot of local opposition. But they have been pretty good about standing up to that local opposition, and really going after municipalities that try to evade the zoning laws. I still think that it's not a perfect solution to go to the state level, because we do I think we do want communities to be on board. And the only way to really achieve that, I think would be like through some kind of PR campaign. We got people to stop littering, people used to litter all the time. And now they don't. Now the highways are clean, even though like it's easier to throw your trash out the window. We got people to stop doing it. So I think we could do something like that for nimbyism.

Will Jarvis 16:02

So it's something where we just need to shame people who don't want to build and if we shame them enough, perhaps we can, we can kind of get there.

Daryl Fairweather 16:08

I don't I don't want to use shame. I would say like indoctrinate

Lars Doucet 16:13

something more like the NBA movements. I mean, we're already starting to see some policy wins come out of the NBA movements where they're starting to repeal some blanket, single family zoning policies. Is that kind of more along the lines of the campaign you think would be successful?

Daryl Fairweather 16:25

Yeah, I think I think I think I think just educating people on the on what's actually happening on why nimbyism is bad. I think just changing people's hearts will be it will help even more I think it's a state level response and changing people's hearts. I don't think the federal government can do a whole lot. Because I mean, it would violate the Commerce Clause, I would think for them to get directly involved in zoning that can use carrots and sticks like they how they do with alcohol ages, they like withhold state funding for highways or something like that. They could they could withhold funding for states that don't get their zoning under control. But I don't think that that is a is going to work because California is already being punished for having bad zoning, they're losing people to states like Texas, and Florida. So if it was just about like that, if it was just about residents seeing the error of their ways, because they're losing tax revenue, then we would already have this problem solved.

Lars Doucet 17:22

So following up on that on political viability, you know, so the MB movement seems to be on to something, and and hopefully they'll continue this seed. The other half of your policy proposal is property tax reform. And I've seen some property tax reformers were also land value tax advocates, advocate for what they call a revenue neutral property tax shift. And the idea here is in your local appraisal district or property tax district $6 million, because that's the budget, then you just assess the value of the land, ignore the buildings and collect the same amount of money, but just from the land this time. What do you think of that kind of proposal? Do you think that's something that could be an easier sell? Or Or have you? Have you ever heard that specific policy proposal proposal before?

Daryl Fairweather 18:07

Yes, yes, I think that where I want to learn more is that part of assess the value of the land, because I think there's a lot of hand waving that goes on at that step. And it's actually, it'd be a big burden bureaucratically to assess the value of the land. I mean, we already have property taxes. So obviously, we're like capable of estimating land value or property value. But if that's going to be a major, the major way that we that we solve this problem, I think we're going to have to be pretty careful about how we assess land value and try to think through that. So here's why I think it's hard. land value isn't fixed, it can change things like air quality would affect it access to jobs, access to parks, it's subjective, you could include non monetary or non pecuniary, like dollar value things in it, like how much carbon could potentially be captured. If this land was turned into a park, how much do we value carbon, then like, you can go down a lot of rabbit holes, when trying to figure out how to assess land value. I'm not to say it couldn't be done. But I think it's a bit more subjective than just some, you know, appraiser professional appraiser coming in and putting $1 value on it, it gets it gets kind of complicated.

Lars Doucet 19:22

Right? It's interesting, because we're actually, we're actually somewhat involved in the field. We have a grant right now to do mass appraisal. And so one of the people working on a project is Paul dansette, who's worked for the International Association of assessment officers. And so I've, we've been learning a lot about this. One of the things he talks about is recent advancements in mass appraisal technology. And I won't bore you with all the details. But one thing I would like your opinion on is from the position of red fin, you're sitting on a treasure trove of data for the whole, you know, United States. What do you see II in the world, do you have any contact with valuation? You say you have an eye buyer program? To what degree is your access to data give y'all insights on the potential to do mass appraisal and things like that.

Daryl Fairweather 20:14

So I think that we are that just the fact that we have all this data it can put up a Redfin estimate can make can make purchases based on these algorithms that kind of goes to show how far we've come. And I think that it has had a huge impact on the market. But algorithms contain bias. They're not perfect. I mean, Zillow. I, you know, I don't work for Zillow. But from what I've read, it seems that Zillow got caught flat footed with their eye buyer program, because they weren't being as questioning of the outputs of their algorithm as they should be. So it's it's algorithms plus judgment when it comes to valuing a home. It's not just the algorithm, and we have a whole team of agents. So when our customers are looking at their Redfin estimate, their agent is also helping them understand like, here's the context of the estimate, and why your home may sell for more or less than that amount, or by how much more. So yeah, there's a lot of judgment that goes into it. That's why I'm still a bit skeptical that it can be deployed in a way that is, is more efficient, it is efficient in the way that these that the land value tax enthusiast want it to be. And it's also just like, bias that no matter how good we get, or how much data we get are still gonna be there. So racial bias can crop up, there's bias, or so Redfin did an analysis of how much a home was worth in a black neighborhood, compared to a white neighborhood when the home is exactly the same. And the neighborhood's exactly the same, at least according to all the data that we have. And homes and black neighborhoods were valued, I think it was around $40,000 less than homes in white neighborhoods. And you could call that a problem with, with how, like an algorithm might determine the price, but it's actually people on the ground who are determining the price, and they carry with them their own potential bias for where they want to live. So is that the correct value, though, when you're coming up with something like a land value tax, and another factor issue to be wary of is that even in property taxes, people can dispute their property taxes, and the kind of people that dispute their property taxes are tend to be wealthier and have more resources, they tend to be white on average, whereas, you know, people who maybe don't have the resources, just end up accepting higher property taxes. So that's a bias that I would be worried about, Jim. But I think that the big question, though, is, is are the kids always about trade offs? Can we create a system that is more efficient, that is less biased than the current system?

Lars Doucet 22:43

Right? And how close do you have to get right? You know, I've seen you can go into San Francisco, and you can find an empty lot, next to a $3 million home that's worth like 2.5 million, you know, and it seems like the dirts problem for both of those is probably 2.5 million, you know, how close do you have to get, you know, I mean, you don't need to do 100% tax on the land rental value, you know, what's your margin of error? I mean, you don't have to put a number on it. But just like, can we get put in a policy that's, that's good enough, even in the face of imperfect information,

Daryl Fairweather 23:16

I absolutely think that we can do better. And there's like, a lot of just small ways that we could do better. One is like getting rid of something like prop 13, that caps the increase in your property tax, we could try to value the land instead of the structure and not tax the structure. So we're not taxing investment. Yeah, I feel like it would like the current system is very flawed, and we could do a lot of improvements. And then another option for municipalities besides land value tax is leasing land more often cuz it's in effect, the same thing. Like instead of giving a plot of land away to a developer, you just set a rent and then the city can charge the rent that they feel is appropriate. And they can even take auctions on the rent to you. That's another way to assess the value is to just have an auction at the auction determine it.

Lars Doucet 24:04

Right. Um, you know, I've recently seen some talk about what's happening in trailer parks, for instance, you know, and that a lot of the rents on trailer park land is going up in that I mean, Trailer Park Lane is literally a parking lot. I mean, it's a special case. So I wonder if, you know, do you have any special insight on what's going on in the trailer park market right now?

Daryl Fairweather 24:23

I am pretty confident that it's a consequence of the housing affordability problem, people have been priced out of non manufactured homes and they have to resort to manufacturing because against what they can afford, the more inequality increases the more demand there is like the most affordable type of housing. So that doesn't surprise me.

Lars Doucet 24:43

I'm really interested in this talk about racial bias and assessments, right so if we're trying we're basically trying to do is predict what a home will sell for, you know, and so if all the people who are making offers are well frankly racist, that might reflect you know, depressed value for this place, you know, if racist people don't want to live here, you know? So, um, but I guess in terms of like policy, which is the worst outcome if if it's like, okay, I valued your property at its low, it's like, well, you pay low taxes. I've seen some presentations on racial bias where the fancy guy's house who lives on a hill, and it's worth $2 million, the property tax, it's like, oh, that land is worth nothing. So he pays like, you know, not very, very little in property taxes, but this person here, who lives in the project, so that lands really, really valuable. So they're hit with this very high property tax. So I mean, I was wondering if you could speak to that aspect of things, we're actually over valuing your property can be a form of bias.

Daryl Fairweather 25:42

Yeah, I mean, when you when you when you're applying for a loan, you want your appraisal to be high. And when you're getting your property tax bill, you want your appraisal to be low. So there, there are different kinds of appraisals. And unfortunately, for black people, they get hit both ways when they're applying for the loan. There's a lot of anecdotes about black people having to like take down pictures of their family have a white person standards, that they get a higher appraisal when they're applying for a loan. But then when it comes to the property tax bill, on average, black people are hit with higher property taxes relative to white homeowners, because of what we talked about earlier about white homeowners being more likely to appeal their appraisals when it comes to the taxes. So it can cut both ways. I think a land value tax, though, has the potential to correct for some of that innate injustice and how homes and black neighborhoods are undervalued because yes, they would get hit with a lower tax bill. And you could even have a negative land value tax, like maybe a place like Flint, Michigan, we should be sending checks to compensate for the way that their land value was diminished due to the lead crisis.

Lars Doucet 26:53

Oh, interesting. So like you destroyed land value, so you need to like it's like a what what do they call it a Pigouvian. Tax when you pay for something bad? You've done? I guess that's what a carbon tax is. Right? Yes. And land value tax has often been paired with what used to be called Citizens dividend. And it's now called universal basic income. Is that another thing you would get strung out with like negative land value tax? Or was that a separate concept?

Daryl Fairweather 27:17

I haven't, I haven't heard UBI linked to land value tax, and that way I consider them separate policies. And that's yeah, I'm not sure. I haven't heard that before.

Lars Doucet 27:26

Yeah, that's just the historical single text Georgia's movement. They often were like, Okay, we'll do a land value tax, and we'll use it to fund a citizens dividend, you know, to take so you can use it to

Daryl Fairweather 27:36

fund all kinds of great things. I guess that's one good option. There's a million options for what you could put the money and yeah,

Lars Doucet 27:43

so one thing I'd like to pivot to is this notion of I've heard this policy called value capture, which seems a lot like all the things you're advocating for just in a specific use case, like we put in that rail line, you know, downtown, or, you know, we put in some transit, and the land values go up nearby. But for some reason, we can't fund public works. And they all go bankrupt and takes forever. And so some people are saying we should capture the value of those rising land values by building public works. Are you familiar with those policies? And do you have any thoughts on those of the whole value capture with public good spending?

Daryl Fairweather 28:17

The context I've heard it in is an inclusionary housing. So if you give a developer the right to build, like a luxury condos, certain number of the units have to be priced below market value. And that is like giving back a public good. I think that they are an imperfect solution. But if that is what is politically viable, then, you know, it's better than nothing. But I think that a land value tax would be more efficient, because when you have that kind of mandate of including affordable housing in the condo unit, you may be discouraging a developer from considering the project. But, you know, I guess you could argue that the developers will do it anyway. And if you if there's if they are doing it anyway, and then I guess that supports that idea.

Lars Doucet 29:02

If you buy affordable you mean rent controlled, right? Yeah.

Daryl Fairweather 29:05

Or below market value. Yeah. I see. Gotcha.

Will Jarvis 29:09

Darrell, recently, you've been on the Breakfast Club and talked about challenges facing the black community around the history of redlining in the US. Can you talk about to what extent and degree this legacy still persists today? And kind of the mechanics that perpetuate it, I know you've talked about it a little bit already. Yeah. So

Daryl Fairweather 29:24

redlining was one of the discriminatory systemic functions in our housing market, before the civil rights movement. So the way redlining worked was that banks would essentially draw lines around black neighborhoods and would not lend to those neighborhoods. And because of things like racial covenants and mortgages, black people also could not buy into the white neighborhoods or mortgages were being provided. So it was an effect and in effect prevented most black people from becoming homeowners. Pre civil rights It's era, the work of the civil rights leaders, Martin Luther King, the Fair Housing Act, redlining was abolished, but the effects still persists today. Because housing is one of the main ways that people build wealth in this country is a source of intergenerational wealth. People who are homeowners are more likely to have to have had parents who were homeowners. So there's like even just knowledge that's passed down, or a model that set when your parents and grandparents were homeowners that black people were prevented from experiencing. And it's one of the reasons that we still have inequality today. And it's not it's an example of how the policies of the past and discrimination segregation in the past is still, it's still affecting inequality today.

Lars Doucet 30:44

So Darrell, one question is a big thing that often comes in with the intersection of, you know, race, and housing is this topic of gentrification? You know, people move into the neighborhood, and the prices go up, you know, and there's, there's tension between the current residents, and the ones just moving in. I was wondering if you could, you could talk about that, you know, because sometimes it seems like I mean, don't we want to improve neighborhoods? But how can we do it without kicking out the people who already live there?

Daryl Fairweather 31:09

Yeah, I don't. I don't love the term gentrification. Because I feel like it's just us so much, that's kind of lost its meaning. I think that what it is actually describing is the vulnerable, vulnerable position that renters are in when land value goes up, because if everyone all of a sudden wants to move into their area, they don't own the apartment, or a rental that they're in, they now have to move because they can no longer afford to live where they are. And that is a disadvantage that is only really borne by renters and not by homeowners. What's interesting about a land value tax is that burden would not be shared by both homeowners and renters, because the land value tax would go up when more people want to live in the area, because the land is more valuable when it's more demanded. So if we're trying to reduce inequality, I think that that is another angle for why a land value tax would help the problems of gentrification maybe it wouldn't completely eliminate it, but I think it would make it so that the burden is not shared so unequally.

Lars Doucet 32:14

So, Darrell, your chief economist at Red fin tomorrow, I wave a magic wand in your chief economist of the United States, what

Daryl Fairweather 32:24

I probably would have started a commission to investigate a land value tax I could that is, that wouldn't be a very popular position because people wouldn't know what I'm talking about. But I think that is what I would do. Cool.

Will Jarvis 32:39

Darryl, you're clearly a super smart person. You've worked with Amazon, University Chicago, PhD in economics, incredible program. I'm curious, why spend time on this problem? What Why housing? Is it because it is this like just fundamental thing? It's a huge lever, or is it something else?

Daryl Fairweather 32:57

So I specialize in behavioral economics when I got my PhD. And I also first started studying economics during the housing crisis. I worked as a research assistant at the Boston Federal Reserve in 2009. And I surveyed homeowners who were facing foreclosure or who had recently entered foreclosure, about the roots of why they got in that position. I asked them all kinds of questions about their income, their employment, their health history, things about their knowledge of finance, how risk averse they were, how much they understood the terms of their mortgage, it was like a really long survey, and I gave it hundreds of times. It really just made me realize, like how housing is this huge financial decision that people take, and they have no experience going into it. So it's a very prime example of where people can make mistakes. Because whenever you're doing something you never done before, that's when all the biases started to kick in. And it's a very emotional decision to because it's your home, it's where you live. And in America, homeownership carries so much emotional weight for people. So for someone interested in behavioral economics, studying the housing market is is, is perfect.

Lars Doucet 34:12

So Darryl, one question I have is, you got your studies at the Chicago at the University of Chicago, there's this whole school in the non University sense of economics called The Chicago School. And I was wondering, you know, I'm fairly familiar with that school of thought, but this seems like an entirely I don't hear most people talking about land when they talk about economics, at least not until recently. Mostly, it's like capital and labor and interest rates and supply and demand. But like land is seems seems like a relatively new part of the discourse to me, and I was wondering if you could situate what makes lamb special economically.

Daryl Fairweather 34:51

I felt like land was discussed a lot when I was in graduate school, because it's the perfect example of an inelastic Lee supplied good when you're Are you going through like what is an elastic good versus inelastic good land is the prime example. It can't be created, it just exists. So its value is determined by demand, not by supply because supply is fixed. And then housing is another, it's like an in between because in the short run housing is an elastically. supplied, there's a fixed amount, but then over the course of a couple of years, you can build or even maybe one year, you can build another housing unit. So in the longer run, it is more elastically supplied. So housing came up again and again, in my studies as examples of how the economy works.

Lars Doucet 35:37

Yeah, I never got an economics degree. So I don't I don't know what they're teaching in schools these days. But But it's interesting to me because like, the Chicago School of Economics is very associated to to a less ignorant layperson like me with this. What's the guy's name? Milton? Friedman, Milton Friedman, very libertarian, but I guess he was a land value tax advocate, too.

Daryl Fairweather 35:57

Yeah, he understood economics. He was one of the best in terms of understanding economics. Maybe I'll I don't agree with all of his views. I think sometimes he tried to apply economics to things that are more nuanced than that probably require more of a social, sociological or a psychological lens. But he definitely understood economic principles.

Will Jarvis 36:18

Definitely, definitely interesting person we had a son on a couple of weeks ago on the on the podcast. I'm curious, Darrell, do you mind if I throw out a couple of explanations for the housing crisis? And just have you talked to him? Are there things we haven't kind of covered so far? Sure. Okay. So the first one is, you know, corporate investors are just buying up all the homes. What do you think about that?

Daryl Fairweather 36:38

No, not buying them all up? Are by our estimates, I bought at 18.4% of homes at the end of last year.

Lars Doucet 36:45

Nice. Perfect it. Can I just say that, so cool that you have that?

Will Jarvis 36:51

That's good. That's good. What about foreign investors or foreign investors buying up all our homes?

Daryl Fairweather 36:56

We don't have great data on that. Because most foreign investors buy through like a trust or an LLC or something like that. But anecdotally, from our agents, it's really only comes up in a handful of markets. And it's not by any means, like the majority.

Lars Doucet 37:10

Gotcha. Now, I doubt your coding has this specific one in it, but I'm just gonna ask anyway. Are tech bros buying up all our homes?

Daryl Fairweather 37:17

Okay, this one maybe? I don't know. I mean, can we be tech Bros and sisters? Like? I'm sure that there are women out there who are buying up homes day by day. It is. It is true that Californians are leaving expensive metros, like LA San Francisco and are moving to the center of the country, the Sunbelt, or just some more affordable inland metros, and they are the ones buying homes, people moving in from outside a metro area often have much bigger budgets in the locals. So if it feels like all these outsiders are the ones who are buying the homes, there's some credence to that.

Lars Doucet 37:53

Gotcha. Okay. Yeah, my bad on that one. But interest rates is it all just because interest rates to what degree the interest rates drive housing stuff,

Daryl Fairweather 38:01

interest rates matter. But the only effects of the demand side of the equation are okay, in the short run, it only affects the demand side of the equation. The supply side in the short run is fixed. So when interest rates went down, and 2020 did create an excess of demand, I think a lot of that demand was just pulled forward. And we're gonna see some slow demand for the next year or two to compensate for that strong demand and the last few years, so it affects things but it doesn't really impact the fundamental problem that we haven't built enough homes for everybody who wants to buy them.

Lars Doucet 38:36

So some people have said, you know, okay, my there might be a recession coming housing market starting to cool now that they twiddled with the interest rates. It's a bubble that's gonna burst and everything's gonna be okay. Like, whether there's a recession that destroys us all, will it at least deflate the housing market or things going to continue to get worse?

Daryl Fairweather 38:56

If there's a recession so bad that deflates the housing market, but that's a that's a very bad recession. So I don't think we should be wishing for that, or expecting that or hoping for that. The last housing crash is very special, because the recession started in the housing market, the problems of too loose lending of securitizing mortgages creating these complex step products. And just the general, the real real problem was, was the belief that home prices only go up and don't go down? We are not at that place right now. You know, at most, I would maybe say we're in a 2001 situation where the housing market hadn't been really strong going into 2001. There was a mild recession, the housing market, kept going up through it and then kept going up and kept going up and kept going up and kept going up until it burst in 2007. So the fact that interest rates are up right now I think helps us avoid that future. Because we're very far from it right now.

Lars Doucet 39:54

Okay, okay. And so, would you say that, can you make a prediction? It's If you can't that prices have been going up pretty steadily is it now at least getting worse slower.

Daryl Fairweather 40:07

So prices spiked in 2020 and 2021, the median sale price is up 15% from last year. And it was up even more kinda even more between 2020 and 2021. This next year, we expect home prices to close or at the end of this year, we expect home prices to close up around 7%. And then for home price growth to slow to around 3%. After that these forecasts are always subject to changes, interest rates change and our numbers change. But that's about what we're forecasting right now. So basically, we're expecting home price growth to slow but to remain up each year.

Will Jarvis 40:48

So I'm curious, you mentioned something interesting about 2008. Do you think 2008 is a good example of a bubble? Or is it more like a, you know, market monitors thing where, you know, housing prices have so kind of like random walk and you know, it wasn't really a bubble, it's actually fairly efficient back in 2000, because I know you worked on this in 2009, kind of coming out of it kind of talking to people about what had happened with you know, in a lot of individual cases.

Daryl Fairweather 41:12

Yes, it was a bubble. The lead up to the housing crash was built on the belief that home prices would not go down. Despite the fact that home prices were climbing at an unsustainable rate. People kept that belief and it allowed them to make riskier and riskier bets, like lending to people who wouldn't be able to afford their mortgage payments, and would have to foreclose, if home prices went down, creating debt products that were built off of those mortgages, and then creating financial products that were derived from those debt products, it was just a it was just a whole house of cards. On top of the idea that home prices would never go down. I think that we're pretty still pretty scarred by that experience. And just knowing that home prices could go down has prevented us from getting back into the same situation, lending standards are much stricter. Now. Although home prices went up quite a bit in last two years, almost all the loans went to people with excellent credit with large down payments. Some people, a lot of times people paying even cash. So even if home prices go down, those people aren't going to lose their homes, which is why the situation we're in is very different.

Lars Doucet 42:22

Right? So what regulatory things have changed since 2000. That you mentioned a couple but like, broadly speaking, what what provisions that we changed from that what lessons that we learned What lessons do we not learn?

Daryl Fairweather 42:35

Um, so the big one, I will point you is Fannie and Freddie becoming government sponsored entities and their portfolios being managed by the US government. Like one thing that we did during the pandemic is we implemented forbearance, we were able to do that, because of that kind of control we had over the housing market, we were able to put extra fees on things like second home mortgages, investor mortgages, large loan mortgages, which slow down some of the exuberance in the housing market without hurting first time homebuyers quite as much. Yeah, so those two things have kind of shifted the risk that Fannie and Freddie have on themselves. And then I think, even just from private markets, private markets have gotten more conservative, it's been a problem actually, for new construction, that builders have lost some of their risk taking because they're under building. And they really do need some kind of government support to get back to a place that where they're building enough to meet demand. Builders tend to follow the cycle, which means they're always a little bit late. They just got to got started. And now interest rates are up. So they're already pulling back before they can actually build to meet like the next wave of demand. So it's just an inherent problem there. But lenders have gotten more prudent, I think, for the benefit of the health of the housing market.

Lars Doucet 44:00

So that reminds me of something. You know, that was another factor we didn't talk about is construction costs, right? Is some people say, well, all construction costs are just inflating. And that's why housing is out of control. To what degree is that true or not true?

Daryl Fairweather 44:12

It's if you talk to builders, it's true. They have a lot of evidence to point to that labor costs are going up. Land costs affect them, too, because how are you supposed to hire somebody to build a house in San Francisco? Where are they supposed to live? You have to pay them a certain amount. And if they're commuting in from Sacramento every day, during the three hour drive, you're gonna have to pay them more money. So you can get into these like cycles of despair with rising land costs that make it even harder to build. And also, her immigration policy plays a role. I know builders would like us would like the US to have immigration policies that allow more foreign workers into the construction industry because they've had trouble recruiting them from Americans without that foreign labor supply. That's another political topic that is whole different animal than just land value tax.

Lars Doucet 45:03

Well, so it's interesting, you know, so you, you seem to be very focused on these kind of universal get to the root of the problem kind of solutions. You know, there's some been some other proposals I've heard where it's like, oh, we just need to ban like, second homeownership or we just need to ban, we just need to like have a vacant lot tax, or we just need to, like, Ban corporate buying of homes and all these things. So regardless of like political viability, what do you think of that kind of approach versus the ones you've just advocated for?

Daryl Fairweather 45:35

I just, I just don't have a lot of patience for solutions that aren't going to help. I feel like it's distracting. I don't know. I like, I know, people, it's an easy thing to want there to be some like, boogeyman for the problems that we have. But I think a lot of it like we're going back to the housing, probably about housing problems, everything is that we just like aren't thinking about things in a rational way of what would be best for all of us, instead of like this narrow minded view of what's best for us individually, in the short run.

Lars Doucet 46:09

So that's really interesting, interesting takeaway, I really liked that. So what is you mentioned before about solutions that are kind of equivalent to land value taxes? You talked about, like a government leasing? You know, in that case, it's like, well, the land value is whoever gets the lease. And that's the prevailing market price, at least I suppose. And then the tax agency just collects that, how did how does that work in practice?

Daryl Fairweather 46:33

So it's like, if you just like blindly writing a check, it's the same, it's exactly the same value tax is the same as a lease, you're just paying the government, a fixed amount each month can follow the tax, you can call it rent, it will be the same. We already kind of do that, in effect with property taxes. So I don't think it's like too hard of a pill to swallow. I think if we try to raise them too much, it might face some political backlash, because I do think that, especially in America, people like the idea that they that they themselves on the property and not the government. And if you make it too high, maybe people will start to question whether they own it or somebody else does. But I think we already do it in small doses, so we can at least try to increase the dose. Texas does it. And they're like, the super freedom libertarian state, right. So if they have some of the highest property taxes, I don't see why California isn't doing right. Higher land value.

Lars Doucet 47:25

Yeah, I'm from I'm from Texas, actually. And so yeah, I can confirm. But what's really interesting is like you talked about, like the problem of assessment, and like, we can do better, like my property taxes just went up. And right now we don't have a split, right? tax, tax policy, like they just tax the whole thing. So it doesn't really matter what the division is. But I looked at my bill, and they're like, Yeah, your house appreciated in value by this many, like 1000s of dollars. And I'm like, my house, this giant money pit that is constantly degrading and value and I keep having to put more money into it just to keep it afloat. That's what went up in value. Like seriously, guys. You know, I was wondering, just like, like a house is a depreciating asset and economics. I guess you would classify that as capital?

Daryl Fairweather 48:08

Yeah, yes. The actual structure you man, right? Yes.

Lars Doucet 48:12

Yeah. And so one of my questions would be, is there. You know, I know Singapore has these land leases, you're talking about? I've heard that the Empire State Building was actually built on leased land. Do you have any, when you advocate for some of these things, if there's some particularly salient examples you'd like to point to? Or is it was it mostly just something that you know from economics is a good idea,

Daryl Fairweather 48:35

I'm a parent, my mom used to own a condo that was on 100 year lease from the city of Austin. So it was it was in downtown Austin, pretty close to capital. So if this is something that cities and municipalities use, it can be, it can be safer for them, because they might not know the value of the land moving forward. So if they're just charging one upfront for you to hand over the land, and they like kind of lose control up to that point. So the lease can be helpful, and it'd be harder for them to do a property tax politically. You have a two year question of like, who's done it really? Well? I'm not sure. I feel like I should look into that a bit more.

Lars Doucet 49:09

What about you know, so one thing if taxes go up, taxes can also go down. But we can also talk about what kind of taxes we have, right? We have property tax, we have sales tax, we have income tax, we have capital gains tax, we have wealth, tax, inheritance tax, we got all the taxes you could possibly want. I mean, one political sale could be if land value tax goes up, some of these others come down, which are your least favorite taxes and why?

Daryl Fairweather 49:33

Um, that's a good question. That's like a it's like a question on a first date or something, which is my least favorite tax. any tax on something that is an investment for somebody of a lower wealth or income status would be like the worst tax. I'm trying to think what that would be. I guess if like, I mean, like a tax on a state on capital gains in a savings account or something like that. It's so silly. We even do that. And if you like get $2 Extra, you have to like go report it. I mean, I don't think this is like really the biggest issue in America or anything but just sort of like a purely why are we doing this perspective? Anything like that? What about

Lars Doucet 50:14

like sales taxes on you know, some people come off and talk about like sales taxes are aggressive because they're mostly borne by the poor or whatever. Do you agree with that? Are there less worse sales taxes?

Daryl Fairweather 50:25

Um, so sales tax, your sales taxes are disproportionately borne by the poor, there are different kinds of sales tax, like a blanket sales tax, I think would probably be pretty bad. You can have sin taxes like taxing cigarettes, taxing liquor, taxing sugar that I could see, I could see arguments for black guys also see arguments against that you don't want the government telling you what you can and can't eat? Or something like that. So, yeah, I guess sales taxes are not great. But some of them maybe you could justify, like a luxury tax, maybe you know, you tax yachts, because one of those rich people need so many yachts for that's something that people might be down for. There's like taxes or different purposes, there's taxes for collecting revenue, and those taxes for nudging people to do things that you want to do, or punishing people for being, you know, too wealthy.

Lars Doucet 51:17

So we're getting to the end here. We have two big questions we want to ask you, before we see out his one will be a big wrap up question. Before we do that, I think I see what looks like some board games in your background. Is that is that the case of what's your favorite board game and why?

Daryl Fairweather 51:33

And every board game is castles of Burgundy. And it's my favorite because I'm good at it. I can be just about anybody at it. So like that's my favorite kind. But the game that I like, the more I don't care if I lose or not, is probably classes, the macking loop because you get to build these cool little castles. And even if I lose, I still have fun.

Lars Doucet 51:55

Okay, cool. So I guess my last question is, it's like, so there's NIMBYs there's LVT. Advocates? We definitely I'll just out ourselves, we're definitely in that group. Yeah. You're talking to a pair of art in Georgia seer. You know, we like we said before, we're working on an open source land valuation model. Right? We we have a grant from Asheville Codex tend to do it. And we were wondering if you could tell us a little bit about what locational factors have the greatest influence on land values? Like where is land value the highest? And and why like people talked about like, how LVT will ruin farmers, like is farmland out in the boonies particularly valuable? Is it really all about that urban land? What's the deal?

Daryl Fairweather 52:40

I do think it's mostly about urban life, we're I guess we're to figure out where's value come from is value the market price if nothing was built on it?

Lars Doucet 52:49

Yeah, it lets us just the marginalist view of just like what people will pay for

Daryl Fairweather 52:53

even even something like land out in the boonies. One of the reasons it's not valuable is because there's no infrastructure connected to it, like you would need to like lay down the plumbing, you need to get internet connection. So I think that in and of itself, prevents presents an interesting problem, like one example is, I want to point to a South Lake Union before Amazon headquartered in South Lake Union, it was just like a bunch of warehouses, nobody wanted to live there. And then Amazon moved in, they created all these jobs, and the land value went up. So in a world with the land value tax, would you charge Amazon for that? I guess, maybe you would have given the negative land value tax at first to incentivize them to come in. And then, you know, once they do what they do, then you increase it, but I think that George some, some land value tax advocates hand wave away, where land value comes from and how its endogenous. So that's something that I would be really interested in researching and finding out more about,

Lars Doucet 53:49

okay, so is that kind of, like, similar to the argument of it's like, okay, this value, this land could have this value, but it's oppressed by zoning right now. And so if I can buy it up, and then repeal the zoning, then poof, the value will go up, because now you can build this on it. And so the kind of the value is, there's that kind of what you were talking about just now.

Daryl Fairweather 54:07

Yeah, it's just the land value is mutable, like it's sometimes a policy choice. Sometimes it's based on just the the whims of whoever decides to set up and invest there and and build out jobs or investments or whatever it may be.

Lars Doucet 54:22

Let's do it let's do it a little narrowly them so so forget, like, Marxist theory of value, a marginal theory of value just I'm trying to predict the price that this would sell for in the market, you know, assuming restrict that just to land, right? What factors drive that is it just like you go near the city center and line go up, or what's the nuance?

Daryl Fairweather 54:41

I think the if I was to create a function of it, the things I would want to put in my function in my equation would be access to jobs, access to green space, access to transit, environmental factors like air quality, weather, demographics, cuz at the people I mean, the live land values who lives there who like you want to move to New York because you want to be around people who live in New York and in the industries that are there moved to LA to be in the entertainment industry. So, um, demographics would be part of it, too. That's where I would start.

Will Jarvis 55:15

Great. Great. Well, Darrell, thank you so much for coming on the show. Really appreciate you taking the time. Where can people find you? Where should we send them? Where can people find your work?

Daryl Fairweather 55:25

You can follow me on twitter or instagram at fairweather PhD, you can go to the Redfin news site, just Google Redfin news to see all of our research. You can find me on LinkedIn tube, I don't really check LinkedIn that much. I should really shout out the Lincoln Land Institute. I just went to a conference of theirs. I talked a lot about land value taxes and land capture. So check them out if you want to learn more about these topics.

Lars Doucet 55:49

Awesome. Thank you. Well, thanks for coming in. I think we all learned a lot here. And I hope everyone follows you and reads all your cool research and we wish you the best of Redfin.

Daryl Fairweather 56:00

Thanks, good talking to you.

Will Jarvis 56:08

Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work and music at Donovan dorrance.com

Transcript:

Will Jarvis 0:34Awesome. Well, Eric, how are you doing this evening?

Erik Hoel 0:39Oh, I’m doing well. I’m doing well. Thank you for having me on.

Will Jarvis 0:42Eric, thanks so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you’re interested in?

Erik Hoel 0:50Yeah, of course, I’m a research professor at Tufts University. But I wear a couple of different hats. The first is as a scientist, I got my PhD working with Giulio Tononi on trying to craft some of the first kind of well formalized mathematical theories of consciousness. And in my research career, I’m interested in consciousness. And I’m interested in emergence and kind of taking subjects that are traditionally philosophical, and making them a lot more hopefully scientific. I’m also an author, I grew up in my mother’s independent bookstore, so I’ve always kind of wanted to be an author and was surrounded by books. So very, very natural to me. So I published a novel last year, the revelations, through Abrams books, and I also run a subset called the intrinsic perspective, where I sort of combined some of my scientific interests with my literary interests.

Will Jarvis 1:47Gotcha. Do you see kind of a common thread that ties your work together between your writing this work on consciousness and math and, and biology? Like, is there a common thread there? Or is it more just like these are kind of discrete interests, and they don’t really bleed together very much?

Erik Hoel 2:04Well, the reason why my subject is called the intrinsic perspective, is that I think that we can very broadly view the world as sort of having a scientific image. And that scientific image is what one might call extrinsic, it is based on mechanism, or causation. It is model ball in terms of sort of the physical laws that we know. And then there’s also the intrinsic perspective on the world, which is sort of what everyone is thinking and feeling hidden within the bones of their skull. And that perspective of the worlds is also the world of the writer, right writing is about communication from within your own little well of solipsism to other people who are stuck in their own little wells and solipsism. And you’re trying to sort of put something together, either communicate an idea, or communicate a what it is likeness, communicate what it is like to be a person who lives you know, in a certain way, or at a certain time. And you might do that, for example, by having a character in a novel that’s like that person. And, and so what I’m interested in, is where the extrinsic meets the intrinsic. So it’s sort of like, it’s like, the shelf of the world, right? It’s like, it’s like, it’s like, it’s a place where there are like, Great Titanic, sometimes terrifying, sometimes beautiful forces at work. And that includes, for example, the search for a scientific theory of consciousness, which would be sort of the extrinsic attempt to understand the intrinsic perspective.

Will Jarvis 3:46SuperCloset is it something like understanding kind of the intersection between quality qualia and reality? Is something like that? Or is that too kind of simplistic?

Erik Hoel 3:57No, I mean, I think I think it’s a pretty reasonable description. You know, I everything I do is sort of connected via a constellation of, of a couple of different main themes. So for example, I’ve recently been doing some work on dreams, and the relationship between dreams and fictions. And, of course, that’s that that is also in a sense, right? Like in that case, I’m using the intrinsic perspective, which is sort of the phenomenology of dreams, to try to actually come up with sort of like a theory of of art. I mean, that’s really one of the things I’ve been I’ve been working a great deal on is scientifically grounding our notion of an aesthetic spectrum, in something that’s more valid than like, say Steven Pinker’s description of music as auditory cheescake

Will Jarvis 4:52I love that. I love that. How did you originally come across these ideas? You know, was there a single moment Be like, you know, this, these are the themes I want to explore? Or is it kind of emergent over time, as you read more, you know, as a kid, you said, you grew up in your parents bookshop, which is, which is awesome. Was it just like reading a lot of literature or getting exposed to a lot of different ideas, and it kind of just coalesced over time?

Erik Hoel 5:17Well, it’s always very hard to, you know, appropriately track your own motives for things, right. But, but in one sense, I mean, there was sort of like a logical decision that was made at a certain point where I was old enough to know sort of what I was capable of, and when I wasn’t capable of, and so I knew, for example, that I would never be capable of being like a string theorists, just, I just don’t have that sort of, like the really, really high level, technical mathematical ability is something that manifests when you’re young, and I just didn’t really have that. And, and so that, that sort of limits your your options. And looking at science, I thought, because of my background in sort of fiction writing, like I was already writing when I was a young teenager, I thought, well, maybe I should go towards something where being creative is, is going to be an advantage, right? Like, rather than being analytical, can I go to something where originality is going to be much more important, right, then, like sheer quantitative ability. And there are a number of like, really open areas in science, where we just frankly, don’t know very much. And we sort of need good, good theories. And so I’ve sort of made my home in those cases in those places. And, and one could view that, almost like how an organism’s adapts to Nietzsche something like that. Right. But I’ve been very lucky along the way. And certainly, I think that there’s a certain serendipity of like, what I work on, and, you know, my progress on it, to the degree that there is or there isn’t.

Will Jarvis 7:08I really liked that. I really like that. That framing. I am curious, what areas of science do you think, need more original theories need more originality and creativity at this point?

Erik Hoel 7:20Yeah, so one is in fundamental physics. So physics is physics is not finished. We need, you know, the most brilliant minds to go into physics, and to improve our understanding of the fundamentals of reality and move us past the Standard Model, which, which will one day I can fail, if it hasn’t already. And so clearly, like some very big picture physics stuff, what I was very interested in was consciousness. Particularly because it felt like no one was working on consciousness. I mean, in the time that I became interested in being a scientist, consciousness research has grown significantly, since then it’s still miniscule, it receives less than 1% of 1% of neuroscience funding, I’m making that number up. If there’s some other number, that’s actually true. But but but that’s, that’s, I think, well, within the order of magnitude of how little funding consciousness research actually gets, and there was almost no one working seriously on it. And so that looked to me, like, like an open opportunity to maybe get in there and do some, some fundamental research, you know, unfortunately, at the same time, it’s also perhaps the hardest problem that humanity has ever encountered, I think, in many ways harder than things like new physics, because at least we sort of know what we expect the answer to be with regards to new physics, we sort of, I can’t, I can’t, you know, tell you what those equations will be. But I sort of know very broadly what those equations might look like, right? Or, or let’s say a young hotshot graduate student going into that field might know that. And they all have intuitions about that. With consciousness. It’s, it’s far less clear, right? So we don’t even know what good theories look like. And so there’s a sense in which we’re very, very sort of far away from from understanding it or having a good a good understanding of it. And there’s a couple of other various like, like obvious ones, like neuroscience as a whole is incredibly underdeveloped, although not for not for lack of effort and funding. I think there are some really interesting questions in evolutionary theory and particularly also now in AI. So there’s still like a, you know, a broad number of places where, where the contours of the map are not well drawn in yet.

Will Jarvis 9:57There’s a lot there’s a lot of whitespace it seems I’m curious, do you think um so I him he has this idea of having like, you have to have an attack on a problem, or else it’s like really difficult to make progress. And it kind of sounds like what you’re talking about with consciousness research, you know, what was your first kind of attack you found to the problem to try and like figure out like what’s going on and try and start trying to form a theory, if that makes sense.

Erik Hoel 10:27Yeah, so at the time, and I’m thinking back now, when I became sure that I wanted to go to go into consciousness research, and basically to have that be the problem that I spent my my PhD working on. That would be have been around 2008 2009. At the time in America, there was no one working on consciousness in a way that I consider to be serious, except one man whose name is Giulio Tononi, who is probably the first person to propose a well formalized theory of consciousness, that something that certainly is a good candidate for what a theory of consciousness might look like. Right? So it’s really if you think about it as just does this thing even sort of look correct at all? Right? that the answer to that would it is maybe yes. And that seems like an awfully hedge statement. But if you compare it to pretty much everything else, it’s just worlds and leads above it. So I went to go work with with Julio to try to help him develop it as it’s called. His his theory of consciousness based on how information is integrated in complex systems. And that sort of took me down a pretty big, pretty big rabbit hole. But that was my initial interest in reason was just that. Having looked around at sort of the contenders, I saw a lot of things that were basically just metaphors, things like maybe consciousness is a big global workspace. Okay, maybe consciousness is fame in the brain. It’s like, okay, well, let’s, let’s, let’s put some math on that like, like, What do you mean by fame? Right? You mean? The degree of information sharing what what’s in and what’s out? To what degree is something in what degree is something out? How do you get a stream? How do you solve the binding problem? Like, how do you do any of these things? And almost none of these theories had any teeth, as it were, except it it I think, has has some teeth.

Will Jarvis 12:33I like that. I like that. And I’m curious just for you know, we have a lot of young scientists that Listen, what was your Did you just straight up cold email, you, you look for someone who had a robust theory, you cold emailed them and said, you know, Hey, can I come help? Like, can I come mop the floors? What What was that process? Like? Just mechanically?

Erik Hoel 12:53Yeah, I believe I actually contacted Julia, after I was accepted to so as I applied to the University of Wisconsin, so he’s, he’s at the University of Wisconsin in Madison. Nice. And it’s a very big research school. But you know, it’s not it’s not Harvard. Right, like, so it’s not, it’s not a sort of place where the Graduate School acceptance rate is 3%. It’s probably, you know, 10%, you know, 12%, something like that. So, if he had been at, you know, Oxford, or MIT or these other places where they’re, they’re basically just rolling dice to see who gets in with like, a 3% chance, right? There’s basically there’s nothing you can sort of do priority that will actually ensure ensure your chances and that, but So luckily, he was he was just at a place that that I was able to get into. I think I only applied to two graduate schools, which is insane. And any, any of like, my career in science has been has been by outside metrics, completely crazy. And I would never recommend almost any of the steps that I took at any point in time. But things like I only applied to graduate schools. One was New York University, and that was to work with with half one lout. We know how come I was at Columbia, though, this was why there was no one at NYU who was doing anything serious with consciousness. But the philosophy department was very good. So they had David Chalmers and some other people. So I figured, okay, I wouldn’t be able to work with any sort of great scientists, but maybe I would be able to sort of still be where a lot of the interesting thought around consciousness was. And that was sort of bleed into my science. And then the other was the University of Wisconsin. And, and I believe I basically just called emailed Julio, after after getting accepted for the initial interview.

Will Jarvis 14:46Nice. Excellent, excellent. I like that. I want to talk a little bit about your research now. What’s your sense of the biological function of dreams? Like why do we dream like what’s the process for?

Erik Hoel 14:58Yes, this is a theory that I advanced are sort of put together one might say, but a couple years ago, and it was originally actually born. So so so just to give some people background right, one of the things that Giulio Tononi is very famous for is also his model of why it is that we sleep, which is something called synaptic homeostasis. And the idea is that learning in general, engenders a net potentiation of your synapses, the synaptic strength, this is basically getting too strong as you’re awake, and you need sleep to sort of downscale all the synapses. Actually don’t think that that hypothesis is really going to end up being true. I think it’s a very nice hypothesis. I think it’s like an elegant hypothesis. But there is a sense in which, you know, there, if you’re interested in consciousness, you have to sort of be interested in, in what what happens when consciousness goes away, and why does it? Why does it go away? When it does, and therefore, you know, they’re very good sleep labs. So I have a background in, in sleep research. And I had been writing an essay about the purpose of, of fictions, actually, and why it is that we humans, so love fictional stories. And because this is again, something that’s interested me since since I was young, and I kind of realized that you could you make the analogy that fictions are like artificial dreams. And I don’t think that that analogy is, is that original, but I took it very seriously. So I said, Okay, well, what if we take it incredibly seriously. And therefore we look in therefore, we have two mysteries that look very similar, one of which is why do humans care about what happens at Hogwarts, right and spend a bunch of time talking about all these imaginary lies? And why does the brain make up a bunch of random imaginary hallucinatory BS? Every night, these seams actually possibly quite related to me. And so, so I started developing this theory. And actually, what fell out of it was, basically, I put all the fiction aside to just focus on the theory of dreams that fell out of it, which was this notion that the goal of dreams, the evolved purpose of dreams is to help prevent overfitting, where overfitting is a very common, basically ubiquitous problem that crops up whenever you try to train a complex system that learns like an artificial neural network. And in general, it will often sort of memorize the details too well, and therefore it sort of won’t generalize to new training data. And my thought was, this seems sort of inescapable. And also that mammalian brains can’t ever turn off learning. I mean, we people have really not reckon reckoned with this. But when you’re training artificial neural network, you can sort of stop it at a certain point and say, Okay, I’m done now, right? You’ve been appropriately trained. That never happened, mammals, right? So we’re constantly learning. And this this, the years of plasticity in your brain does not shut off your learning as much when you watch a TV show, as you are when you’re studying for a math class, right, like so the plasticity in your brain never never shuts off. And so there seems like there needs to be some sort of counteracting force. And the proposal is that dreams are basically a combination of techniques that that machine learning theories have already basically found out about. And the brain also stumbled across sort of an intersection of those techniques, and begins to do nightly dreaming in a way that sort of is given your brain augmented data in a way that assists and promotes generalization. And to me, it’s sort of the first theory of dreams that actually gives a good reason why dreams would be so sort of weird and lynchin and dreamlike.

Will Jarvis 19:02Makes that make a lot of sense. I’m curious, you know, with all your work on consciousness, and you mentioned a lot of Mel terms like overfitting and things like this. Do you think it will be possible for us to make machines conscious? Or is that like, it’s a different thing? It’s different class? That doesn’t make sense.

Erik Hoel 19:21I, I very much wish I knew the answer to that. Yeah,

Will Jarvis 19:26those small questions.

Erik Hoel 19:28Yeah, I mean, so the thing is, is that the way that most people think about consciousness is that they basically pick some sort of pet theory, their pet theory is like, totally wrong. And then they sort of just harp on this pet theory, like for the rest of their lives. This is the normal intellectual cycle of people who talk about consciousness. They just pick something like, maybe consciousness doesn’t exist. I’m going to make up you know, a bunch of reasons why that crazy hypothesis is somehow true, or, or maybe maybe it’s a race just to computer what’s so mysterious, right? And then I’m gonna argue for that. matter, whereas just a big workspace, you know, where is the mystery there and scar you for that, you know, or you have like, there’s a hard problem, it’s never going to be solved. But at least those people are sort of honest, I think about how difficult the problem is. This is actually why despite having a lot of training on consciousness, I’ve really focused on other problems that I found to be like solvable. Like, I think that like, you can have a theory of dreams and that like that, that I’ve advanced, like a pretty, like, I’d like a like a good one like it deserves to be considered. And and that’s because it’s a solvable problem, right? Like, it’s just nowhere near as difficult to come up with, with like, an original hypothesis around dreaming as it is to come up with an actual original hypothesis around consciousness. So with consciousness, I generally wait until I have something really important to say. So I’ve only published like, I don’t know, three or four papers entirely on consciousness at all. And but that leaves me in that epistemic position wherein when you asked me like, are machines going to be conscious? If I was sort of the standard? You know, the sort of sort of standard intellectual talks about consciousness, I would have some sort of ready made answer for you about yes or no, and why, you know, my reasoning as to why but the simple answer is, we have, we have absolutely no idea. And anyone who tells you that they have an idea is absolutely wrong. But I can tell you, yeah, what, but I think we can say some things. And one of those things is that is to judge the similarity or dissimilarity of the artificial neural networks that we have against the brain, and whether in particularly the properties of the brain that are leading theories of consciousness pick out. So as an example, right, one could ask, do these? Do these machines have anything that looks like a global workspace? And the answer, I think, is pretty reasonably No, unless you really stretch the definition of what we mean by global workspace, they generally don’t have that, are they integrated? Well, integrated information theory would say, No, they’re not integrated. So what I sort of prefer to do to answer this question is to say, Listen, almost all the leading theories we have are wrong, but they’re probably somewhat sensitive to the true underlying theory along some axes. And all of them basically look at these feed forward artificial neural networks that don’t have any sort of intrinsic activity, or spontaneous activity. And that, you know, our brain like in the very broad sense of having maybe things like tuning curves, or sort of neural like properties, but they certainly don’t have the structure of the mammalian brain, they don’t have its architecture. They don’t have anything like that. As I said, they don’t even have the inbuilt plasticity, right, you’re trained basically from the outside and manipulated by these outside algorithms, and basically just use Excel spreadsheets. And we can sort of say, you know, the likelihood that they’re conscious is actually probably quite, quite well. So that just described our own situation. It doesn’t really describe the sort of hypothetical that originally asked, but but I am somewhat confident in saying that probably the current techniques, we should not consider as conscious, we shouldn’t sort of take their statements as being based in intentionality, or eyeness. In the way that a human being statements are right when GPT three says, Help, I mean, tortured. You can just say, no, no, you’re not you’re just auto completing the text that I gave you, which was, is there anything wrong? GPT? Three, that would shock me. And then they say, Oh, yes, I’m being tortured.

Will Jarvis 23:41I got it. I love that. Well, Eric, I really liked that answer, because I think that’s the best answer any human on the planet could give me on that, that that particular question. Yeah, it, I want to take a left hand turn here and talk about aristocratic tutoring. As something you’ve written written a little bit about, first of all, is it your sense that we have less outsides contributors like Beethoven Shakespeare’s etc, than we did? Like in the recent past?

Erik Hoel 24:13Yes, and just to explain to that, and sort of why you’re, we’re jumping around a bit. So you know, one of the things that I consider to be my job is to sort of, as I said, I don’t I’m not in the top, you know, quintile or whatever, have like analytic ability, but I think maybe in terms of sort of, like originality, or like just just coming up with things. I would probably coordinator at the top I that would be the one cognitive trait that I’m relatively sure of in myself. So what I do is I sort of look around at fields and I look for low hanging fruit that really hasn’t been picked. And one of which was that in education research, and notably, I didn’t write an academic monograph about this because I didn’t think it would get any attention if I did, and I And, and I didn’t want to stumble through, you know the entire academic literature, just to make absolutely sure that no one said anything like this at all. But I do think that it’s it’s relatively original and that certainly I had not heard it before. And so I advanced an idea on my sub stack, which I call it the aristocratic tutoring hypothesis. And that took off recently and sort of went viral, just to give the listeners sort of a background, why we’re jumping into NATO, right. And part of the article, or at least the sort of the opening of it was this argument that if you look at genius, I mean, real world spanning genius, geniuses that everyone would agree upon, particularly people who’ve made a serious, one might say, academic contribution, but who also sort of were publicly relevant, that this sort of genius has, has declined. And it’s also declining along with polymath, the like, even if you look at somebody like Lewis Carroll, who I forget Lewis Carroll’s exact dates, right, but he’s still relatively recent. He’s a mathematician, a children’s book author, right? He’s a logician. He’s doing all sorts of really interesting things. It’s really hard to name a contemporary figure who’s even as sort of Polymathic as what, Lewis Carroll. Right. And so I think, in general, there has been this decline, and then that’s something that is sort of worth exploring, you know, as to why.

Will Jarvis 26:36Yeah, I want to talk ask about the clients that in here, it seems particularly weird, and the concept of like, the Flynn effect, people’s abstraction ability seems to be getting better over time. But yet we seem to be having less outsized talents. I mean, you are kind of a good example of someone who has been able to at least have interesting insights and a lot of different fields. Do you have any thoughts there? Like, what’s going wrong?

Erik Hoel 27:01Well, so one thing that I advanced, I mean, I think it’s relatively obvious that there’s there’s something about the public education system, right, that does not do a very good job of making people interested, deeply interested in intellectual subjects from a young age. It the the, you know, one could rant about sort of the public education system, I think, for a very long time. And I would certainly include private education in there just the same, like the structures are almost no difference, right? slightly nicer, slightly better peers, slightly better teachers, but the structure of the entire thing is exactly the same. If you’re at Andover, or if you’re at, you know, big, big inner city high school there, there’s still basically the same structure. So looking historically, though, we see that the the education system has clicked on only very recently. And so the question is, well, what did what did people really do before then? And the answer is that, well, if you were rich, what you generally did was that you hire tutors, and governesses and if you were an aristocrat, especially, and these tutors and governesses would rear the child from a very young age. And a great example of this would be somebody like Bertrand Russell, who was one of the great geniuses of the 20th century, extraordinary, extraordinarily Polymathic he won the Nobel Prize in Literature and also came up with, you know, probably the first, the first presage of girdles Incompleteness Theorem in his paradox around set theory. So this is a very, very smart, intelligent individual, of anyone who’s ever lived, you know, deserves the term genius. And, you know, his education was basically a revolving door of governesses and tutors. And these were often people who were experts in their field. I mean, he was taught by like, Lord Kelvins, graduates to student basically, and like, you know, it’s like Kelvin like that Kelvin. Right? And, yeah, like the Kelvin, right. So, so this is, this is like, if we had, you know, young children being tutored by, you know, excitable charismatic in their 20s. You know, young scientists, like clearly that would have a very strong, very strong effect. But the problem is, is that this this method of, of education is not at all scalable. So, you know, I made clear in the article that I’m not making a moral claim that this was somehow really good, or we should go back to that and aristocrats should sort of separate their their children out. But it is certainly true that I think that that particularly at the very upper echelons of society, there was a huge amount of one on one tutoring going on. And we know that tutoring is is basically the most effective form of education. And that’s been shown in study after study and So we can just look at the decline of tutoring and say, you know, maybe, maybe the simple fact is, is that many of these great geniuses had, you know, what we would now consider almost completely unfair advantages in terms of their education early on. And this is why, for example, the history of intellectual life is often has often been confined to the rich, I mean, you know, we shouldn’t, we shouldn’t mistake that the number of like peasants who made serious intellectual contributions, up until you the industrial era was was so low, I mean, astonishingly low you, like, pick, pick any intellectual from like, 1500 to 1600? And see how many of them were really like, lower class? And the answer is almost none. They’re almost all aristocrats or upper class, and men, and as far as I can tell, many of them had tutors and went through sort of this, this this personalized form of education. And I think that it’s it’s basically the one way we know of to create geniuses, it doesn’t always create geniuses, I certainly would never make that claim. And I wouldn’t make the claim that any child, you know, could sort of be made into a world towering genius. I think it involves a lot of sort of innate talents, although maybe maybe IQ less so than some people would like to believe. I actually think that there’s all sorts of sort of cognitive talents that people can have that aren’t captured by something like IQ. But the but the fundamental fact remains that, you know, all these people are at least seems like this method of education was incredibly effective, and probably maybe one of the few surefire ways of creating geniuses and we even had people who did that people who set out to make their job titles a genius, and in many cases, they ended up succeeding. And there are historical examples of this. John Stuart Mill being probably one of the most famous.

Will Jarvis 31:55I’m curious, how much of it do you think of how much value do you think was added to be jeans is it there’s two veins, I’m not saying it’s real, but there’s two veins, there’s this idea that you’re not being in curiosity to people, it seems to be like really important. Um, so you’re willing to go out and search because it’s kind of fun. And it’s not just like this rote memorization or whatever else is gone. And then there’s like a mastery learning like Blink two sigma, it’s just much more effective. And you get a lot more information in people’s heads had to wait to do which one do you think is more important? Or are they both just kind of important? And it’s, it’s really difficult to parse out?

Erik Hoel 32:31Yeah, I actually don’t, I think that there, it’s a bit of a mistake to think that the mastery of the material is what’s making the genius. It could be read that way. Because when you look at the studies of tutoring, you know, they’re limited to what you can measure, like the measurables of education. So of course, they show this big boost in, for example, the amount of crystallized knowledge that a student has, like their memory of things, or something like that. But we all know that that’s only one dimension of what a teacher should impart an example being that you know, what you want in a, in a, someone who’s learning history and what you want in, let’s say, a young historian who was tutoring your child would be to impart for them, like an interest in, for example, ancient Rome, not just memorizing the dates of, you know, all the Emperors of ancient Rome, right, you want to stimulate this sort of intellectual interest. And hopefully, you sort of stimulated enough that it runs their entire life. And maybe when they’re, you know, 75 they crack open a new, you know, book on Marcus Aurelius or something. And who was also had, like 17 tutors growing up. And, you know, that that sort of sparked like, what I would argue would be that probably the the effects of tutoring, extend to all the things that are sort of non measurables in education. So like, not only is one on one tutoring much more effective at, like getting the information into someone’s skull, but clearly all the the extra effects of education, I would argue that it’s probably equally if not more, so effective at those things, like getting the kid excited about the subject, or so on. So that’s my suspicion. But of course, you can’t, you can’t really like measure and prove these things very well. Right,

Will Jarvis 34:26right. Right. Very, very interesting. I’m curious, I want to talk a little bit about your writing now. That’s okay. You know, have you thought about trying to improve writing lessons over time? Do you have any tips on how to improve one’s writing? Or is it just something where you just, it’s just reps you just put in a lot of work? You talk about interesting things, and that’s how you get better.

Erik Hoel 34:52Well, I would say there’s a there is a difference between writing fiction and nonfiction. fiction is a bit more perfectible. It’s a bit more like teachable, you can teach someone how to write nonfiction. And you can kind of just copy, copy the greats or the people that you like. You, what you’ll find if you if you write fiction is that if you if you try to just copy the greats or people that you like, you’ll write, like serviceable prose, that it won’t be very good. It won’t be, it’ll be, it’ll just be like soulless, right? It’ll just be soulless. And like fiction is so sensitive to solve, right? Like, is there is there solidness right, like, so when I wrote The revelations, which, you know, to write a novel nowadays, is just like, one of the dumbest things you can do, right? It’s just such a, the amount of time that goes into like, crafting a really good novel is like years and years of work, like you cannot skimp on that. And then sort of, you know, the whole publishing process is incredibly difficult. And getting it out into the world is, you know, insanely difficult. And then it’s just one of like a sea of books that go out at the same time. And unless you’re sort of like a literary industry darling, which you sort of have to have gone to certain schools and sort of write in certain ways or be interested in certain in certain things in order to do that, unless you’re that you really won’t get a huge reaction from it. I still do get some amazing emails and letters and like little little notes that it’s still out in the world, and people find it and they read it, and they say, like, I’ve never read anything like this is absolutely crazy. But to me, I it had to be absolutely necessary. So with fiction, you know, it must be completely necessary, it must be that you just simply had to write this, nothing could have prevented you from writing it. And in that sense, I think that that’s very important, artistically, nonfiction can be forced. Of course, you don’t want to be constantly forcing it, but you can force nonfiction, what I do now is write mostly is write mostly essays on my substack, the intrinsic perspective. And I’ve had some some great reactions to them. And it’s sort of a community has grown up around them, which I really appreciate. But I think a big a big part of that is that the the essay is sort of wide ranging enough that I can use some of the techniques from from fiction. So you know, an attention to language, that sort of thing. And that is just not done as much, particularly in sort of like the world of sub stacks. So I would say, sorry, but just to briefly answer your question about like, you know, writing advice. One, one big thing that I tell everyone is one, you have to have a very definite point of view. So most of the stuff that reads poorly, is because you can’t find the author anywhere, they’re not authoritative. They’re not like making a pronouncement from the mountaintops. This is me, I’m very grounded in myself, here’s my opinion about this, that will lead to good nonfiction writing, if you don’t know who you are. And if you can’t express and by that, I mean, within prose, right? I mean, I don’t mean just throw anyone into an existential crisis. But like, if you don’t know who you are, when you’re writing, that is probably the number one leading cause of of bad prose, it leads people to write like their GPT three, right? It’s like a view from nowhere, right? It’s sort of just like bland nonsense, where you’re just sort of copying what other people have done. And this is genuinely the biggest thing that I find I’ve ever run into. And then I also find that they tried to create too much content, you don’t need that much content, you don’t need to be publishing every day, particularly if you’re doing something like a newsletter. Instead, really focus on putting out really just the occasional really great piece. That’s what people want to read people. There are very few people who you actually want to hear from every day and can give you something original and interesting. Every day. Very, very few people, maybe not.

Will Jarvis 39:15Exactly, exactly. So so just have a stronger quality bar for publishing is one thing.

Erik Hoel 39:20Yeah. Yeah, you should sit on stuff for a little while to make sure that it’s, it’s something that that that you would be really proud to show people in written that you’re really excited about. And that’s very difficult because then you need to come up with 100 of those. And you know, if you want a week, right, that’s your two years of running a blog or something like that, then you need to come up with 100 of those. So it’s very, you know, it’s it’s very difficult to do but I’ve been very lucky and and had a really wonderful reaction to sort of my move to writing writing online on this on this substack and I have enjoyed it though. orally. And I also love that it’s, it’s it is an even playing field. I mean, I it’s it’s credibly steep one, but it is an even playing field like most of the ones most of the blogs that I follow that are that do well and put out consistent good content do eventually get subscribers and readers, and people who are interested in a community grows up around them, like most like I’ve almost never seen a blog that’s been running for a while where I look at like how well it’s doing. And I think, oh, it’s it’s totally not where it should be. It’s like, if it runs for long enough, it almost like always fine, sort of where it where it should be

Will Jarvis 40:42fairly efficient, fairly efficient over time. That’s cool. That’s cool. Can you talk about the publishing industry a little bit and kind of the process of publishing your book and, and kind of what you learned along the way?

Erik Hoel 40:54I actually just had an essay out on this called Secrets of the publishing industry. And, you know, the publishing a book is an incredibly convoluted and long process. I mean, over years, I think, you know, the book had been finished for maybe four or five years, by the time it came out, although there were some last minute edits, but you’re basically finished. So this is a glacial process. And it’s also a very difficult process, most of the time, people will not get published. I don’t think that there’s a huge significant difference between the manuscripts that get published and those that don’t. I really haven’t observed that. I think probably, there’s, there’s probably more, there’s probably some really great unpublished manuscripts hanging out in the US, I’ll tell you that from from, from what I’ve seen in the process. And it’s very convoluted and you have to do a lot of things yourself from getting like blurbs. Like you know, you your publisher probably is not going to go out and get you a bunch of blurbs from like famous authors, you have to do that, which is crazy. It’s like, oh, how do you how do you find an approach like famous authors, right? So it’s like, for example, like I went to, I went to like Peter, very early on, I went to Peter watts. Peter Watts is one of my favorite sci fi authors. He’s the author of BLINDSIGHT, he won the he won a Hugo award, I think he’s, you know, he’s an excellent writer, given I had briefly corresponded, I basically begged him, he was incredibly kind enough to read the book, and offer a blurb for me, and then okay, now I have a blurb from the Hugo Award winner. Now can I go and talk to somebody talk to somebody else, right, and say, Okay, here’s this blurb, right. And that is at the very beginning, but that shows you like the, the degree of time and intensity of just trying to get the book out there. And then, you know, when the book did came out, I didn’t, I didn’t make a huge amount of money. I didn’t sell it for a huge amount of money. But the publisher did a pretty good print run. So they were sort of like, this was like a, you know, not maybe not their lead book going out. But it was pretty high up there in terms of their their concerns, right. And as an example, this, like Barnes and Noble bought three for every store in America. So I thought, Okay, this is gonna get reviewed, right like this, this will be reviewed. So someone has to notice this, right? I just assumed that reviews happened, right? And that turns out to not be true at all. So people don’t just review a book just because it’s like nationally published and you can walk into Barnes and Noble and find it. Right. So instead, what happens is that there’s all these publicists and the publicist, basically, you know, interact with the book reviewers. And this has to take place years before like, like, like, seriously. So a book reviewer at like a major outlet will not review like a book that they just learned about six months ago, that they have to have known about this book for like 18 months minimum, and asked to have received a copy and like, everything’s planned and like everything. So I didn’t get bad reviews, I actually got a couple, a handful, a small handful of really good reviews. But I just got no reviews, because I just had no idea that the way that this process works is genuinely just through these in house publicists. And you need a really big book deal to have a really good publicist and you need or or a lot more commonly, people will just hire a private publicist and pay a lot of money for it. And that private publicist will will then promote their book, but again, you have to do that yours out, right. You can’t you can do it last minute. And it’s surprising who uses private, you know, private publicists, like you might think you know, Thomas Piketty, you know, famous sort of anti capitalist author doesn’t use a private publicist, but you would be wrong.

Will Jarvis 44:51You really need someone plugging it and doing it a long time before the book comes out. Have even a shot.

Erik Hoel 44:57Yes. So you know, my my how Have you witnessed like the total insanity of this pipeline? Yeah. I actually am writing another nonfiction book right now that’s already sold. So I’ve already been through the process a whole second time. So I can’t say like, I’ll never do it again. Like, I literally did do it again. But there’s a very good reason to think that I’ll just be honest, I think substack is going to eat these people’s lunches. Like, these people have no idea what’s going to come. And people have finally sort of cracked the code. People are reading more and more online. And this is where literary life is going to be. It’s going to be online.

Will Jarvis 45:44could all be online. I’m curious, in this process, have you encountered kind of the MFA mafia? I have this idea that MFA programs

Erik Hoel 45:54never heard that? I’ve never heard that. But that’s fine. You know,

Will Jarvis 45:59I wasn’t I was an English major in college. And I always had this sneaking suspicion that, um, you know, it just seemed. George Bernard Shaw has this line, like, you know, it’s just something about, you know, professions, being a conspiracy against the laity. And I just find MFA is it seems like, it always seemed to me like if you wanted to write the great American novel, you go lock yourself in the woods and a cabin and, and start typing, you know, and you do that for a year. You don’t go and get an MFA and learn it and get this like credential. It just seems so antithetical. I don’t know, is that completely off base? And, you know, how has your experience been with the MFA mafia?

Erik Hoel 46:40You know, now that it’s basically a requirement to get an MFA, there are some serious downsides to having this be the main the mainstream of literary culture. So the first is that, that academisation of literature itself. So the simple fact is, is that these are all people who are coming through the academy. Right? So they are academics, they’re not even really writers, right there. They’re more academics. It’s that closer to their fundamental self image, right? Most, the number of writers who actually make a living from writing novels, is so vanishingly small. Most people are either professors of writing, or they have support from their spouses, and they don’t actually make like a full, you know, they’re not like supporting a huge family from from writing write the number, there are some people who do that, but it’s, it’s vanishingly small, even most of the sort of authors that you’ll find at your local bookstore just aren’t at that level of supporting the writing. So that means that what are they? Well, their professors, they’re academics. And that is a very dangerous thing for for an, for an artistic discipline to be fully fully academic. It leads to solid CISM, it leads to sort of the most successful people being the exact same sort of people who can jump through all the standard academic hoops and score high on all the tests that you need to to get there, right. I mean, publishing a book is much more now like the end step to a process that starts when the person is in third grade. Right? It’s like that’s that that’s publishing a book is sort of it’s like a bunch of hoops from third grade on and then, you know, eventually you jump through enough of them, you sort of get to publish a book, because you’ve got into the MFA program at Columbia University. And you’ve gotten into that, because you did well, as an undergraduate, and you got your undergraduate you went to, you went to Harvard, and you got into Harvard, because you jumped through all the hoops in high school. Right? So it’s sort of like this, this, this, it, you’ve attached literature, to the end tube of this, you know, massive pipeline. And the idea that that doesn’t have any effects, is I think ridiculous. Now does it completely, I wrote actually an essay precisely about this. You’re wondering about the effects of the MFA literature. And, you know, one thing people said was, like, you know, it is absurd to think that the MFA system by itself is sort of completely determinant of contemporary literature. And, and I agree with that, like, contemporary literature is not solely determined by the fact that it has an MFA. But I think the trends in it are, broadly speaking, determined by this and one of the one of the big sort of future pitch that I see is that in through this academisation there’s a slow bleed of public interest. And eventually, what will what happened to poetry will happen to to literary fiction. So essentially, no one will read novels anymore. And no one reads poetry like it just again, you could say, well, poetry survives within the academy, but it’s like it’s a zombie, right? It hasn’t No cultural impact or significance, right? Other than in the rarest of events, right? So it’s completely sort of dead as a discipline. And, and that’s sad, right? You can say that that’s quite sad. But my fear is that the same thing will happen to literary fiction where it’s just, it’s just becomes more and more niche written by more and more of the same people, until eventually, it’s just academics talking to each other. And the whole thing is just a game that, you know, just like now, most poetry that’s put out our books by professors of poetry, that’s the only people who will really seriously publish poetry books. Right, right. Or at least that’s the that’s the majority of it. And, you know, I think that something like that might eventually happens, literary fiction, is sort of continues down this path.

And this is I don’t think it’s super controversial, but strangely, I think, because anything in the literary industry is just, it’s one of the most, you know, like, terrible toxic communities. Online, I don’t mean the entire literary industry, but like, like, like, where you go, like, like literary Twitter is a really terrible, toxic place. And so any little sort of criticism of it is like, you know, you’re criticizing an absolute insane person, right? So any small thing that you say, will be blown up, you know, immensely, or so on. But that just means like, basically, I just don’t really, I don’t really have anything to do with Windows people. And I don’t think that I need to, in order to make by living in way, as a writer, I don’t think I need to really interact with them very much.

Will Jarvis 51:43Definitely. Well, it also seems like kind of like you said, like, all these hoops you put together and kept to have a master’s degree really limits the perspectives you get in literature, I should say,

Erik Hoel 51:53there are some contemporary writers that like I really like and enjoy, right, like, but they’re not really who I’m talking about when I talk about literary Twitter, right? I’m not really talking about necessarily the authors even. But, but But yeah, I just want to throw that out. Absolutely.

Will Jarvis 52:12Not all bad. But yeah, you know, the overall structure can can lead to some negative effects. Are you done for a quick round of overrated or underrated? Sure. Awesome. Awesome. So I’ll throw out a term just give me a sense I’d say overrated or underrated. So the first one is integrated information theory overrated or underrated.

Erik Hoel 52:33Probably underrated. Underrated.

Will Jarvis 52:38The free energy principle, Carl, for instance, theory. overrated or underrated?

Erik Hoel 52:43Overrated? I mean, overrated. Massively overrated. I think no one has given an adequate solution to the Dark Room problem, and there’s no demonstration that the brain currently works by minimizing free energy, just just no actual evidence for that. But yeah, I think it’s extremely freewheeling and that makes me extremely suspicious like when everything is connected and when someone like Karl Friston is the mid author on like, a million different papers and I’m not even sure he read all of you know, it just makes me a bit suspicious of something like that.

Will Jarvis 53:29It’s good. One last one bookshops overrated or underrated.

Erik Hoel 53:34Oh, underrated. I love bookshops. booksellers. Like, you know, what’s a town without a bookshop right to go into. I think book shops are some of the most wonderful places on earth. And the people who run them are some of the best people on Earth. And they really are providing like an incredible sort of cultural service to the rest of us. Because it’s not a business where you make a huge amount of money, right? It’s something you get into because you really love it. You can make money but like, you know, you’re not it’s not you’re not. You’re not selling hotcakes. Exactly. Exactly.

Will Jarvis 54:12Well, Eric, thank you so much for taking the time to come on the show. Where can people find you? Where should we send them?

Erik Hoel 54:21Yeah, if you if you go to Eric co LL, er ik H O el.substack.com. That’s the best way to keep track of me. Also, you can just type in the intrinsic perspective, or just my name into Google and substack will crop up but but please, if you if you can sign up for it, because it really is the best way to keep track of me and I really do. I really do have a lot of really interesting things planned for it.

Will Jarvis 54:50Highly recommended. Well, I’ll put the links down in the show notes. Thanks again for coming on.

Erik Hoel 54:55Thank you so much.

Transcript:William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Will Eden 0:39

Today, I'm joined by Will Eden, Will is currently an entrepreneur in residence and an investor in the biotech space. He studied economics at Dartmouth College and worked as an economist at the Federal Reserve Bank of New York during the financial crisis, after the Fed will move out to the Bay Area and work for a digital health startup in a personalized medicine startup. He then worked with Peter Thiel for six years, leading his personal early stage biotech venture capital investments team. I hope you enjoyed this conversation with will. I want to get started with something that's been top of my mind recently, I recently invested in and had a podcast with someone who is building a new cryonics company, and it's focused on pets, the idea is to build out, there's some real infrastructure. So you know, if we build it out with veterinary hospitals, and make it a kind of a norm with pets, we can eventually you know, migrate that to hospitals, and then it can be an option just like, you know, cremation or getting put in the ground, you know, crash could be a third option, instead of like, flying out the you know, Arizona, and your brains liquefied in between, right. It's a interesting approach. Yeah. So I'm going to talk about longevity, you know, where do you think we are right now, in terms of longevity research? You know, do you think we'll hit escape velocity in your lifetime in my lifetime? Or are we should we be betting more on products and brain preservation?

Unknown Speaker 2:00

Right. So I will say, I think that it is possible that it's within our lifetime. But I do think that the field would have to look a little bit different to probably get there. Gotcha. I am a little pessimistic on what things look like right now. That said, fields can change very quickly. And I do think that we've hit a tipping point where certain aspects of the aging question are coming into mainstream focus.

Will Eden 2:28

So you know, I would highlight things like San lytic drugs, and stem cells have really kind of entered the mainstream. And, you know, I do think those are pieces of the whole puzzle. And as soon as you get pieces of it, I think the potential for that to sort of cascade and to hit all of the other areas of aging that we'd have to solve is certainly possible. And I think the main thing that we've needed as a field is something really convincing. Right? We do have some interesting studies in rodents, some interesting studies in you know, much simpler life forms, which don't really resemble humans.

Unknown Speaker 3:08

And those were stunning enough to get like the research community interested in this question, but we need a clear condenser on it living older human right now, right? Like, if you could take someone with like, completely white hair, and then turn it brown, I think folks would be like, Oh, wow. Right? Or if you could somehow give them like a drug that just eliminated all of like, the wrinkles on their face or something, right. And, you know, obviously, I'm suggesting something more cosmetic, but that's the thing that we see all over, right, like, like, right, we see the signs of aging everywhere we see it on our own face when we look in the mirror. And I don't think I'm convinced there has to be cosmetic. But I think that that's one that would just be like, really shocking,

Will Eden 3:55

right? Great, great sales pitch, right? Not really, very logical sales pitch.

Right? So that said, I do think that cryo is probably more likely to work in the short term. And by work, I mean, we get to a point where the cryopreservation is good enough that we think the brain structure still contains all of the info that was inside someone's head. Gotcha. In terms of reviving someone from cryo? That's probably a harder problem than the life extension problem. Not necessarily, but possibly, but I think trying to get the preservation really, really good is probably the easiest problem in that whole space.

Will Jarvis 4:33

Gotcha. So it's just a lot but it to me at least, it seems a lot more straightforward. Like I think we kind of we have a pretty logical roadmap and we may have one for you know, longevity as well. I just don't know less about it. I'm curious do you see it as a as a talent problem? Is it a money problem? Is it an approach problem? Oh, boy, right now, is it all three? I mean, we've seen a lot of capital go into the space right? And then last, like five years, but But yeah, what's your sense of that?

Unknown Speaker 4:59

Yeah, you're grasping the trillion dollar question. Yeah, I think different fields are bottlenecked on different things. And with aging, if you take the SENS approach, right, there's like, you know, seven or eight things you kind of have to do. And if you miss any one of them, you'll still age and die. And if you basically buy that model, which I don't think is totally crazy, then then yeah, the problem is effectively, that there hasn't been enough buy in very broadly, which means you don't get the money, and you don't get talent, and you don't get the leadership involved, right. And I would say, in terms of the biotech space as a whole, before I started investing in the space, I sincerely believed that the bottleneck was something like good ideas intersect, and sometimes funding when there was a good idea. But now that I am actually investing in the space, it's a lot more often that I see a great idea. And I look at the team and the company and the structure and how they're trying to execute that idea. And I think to myself, Man, this really isn't going to work. I love the idea. But I don't think that this is going to succeed in its current form. And that's a very hard thing to see. And that's a very hard message to give founders because they really hate to hear that, right. But like, I do sincerely believe in biotech as a whole, you know, it comes down mostly to talent and leadership holding us back, I would say, currently, in longevity, I don't necessarily think that's true, I do still think there are some like paradigm level breakthroughs that probably still have to be done. And most of even the basic research going on isn't really directed at aging, quite aging, right. It's mostly not directed at the fundamental levers that we could possibly pull here. So that one, I think, is actually a more complicated problem and isn't just a talent problem.

Will Eden 7:09

Gotcha. Gotcha. And on the talent problem, is the leadership problem. Is that just a on the leadership problem? Is that a pure management challenge where people just aren't competent managers? And on the talent side, is it that they're just, you know, all the smart people go to work at open AI, or go into physics or something like that. And there's some weird sorting mechanism going on. That is

Unknown Speaker 7:29

one hypothesis, right? I don't fully understand what's going on. Some folks are theorizing that there's just fewer talented and competent folks overall in the world. And there's something about the maybe the like, education systems, something about the system of incentives, something about how things are too, like, rigid, and it's possible that there are just less people like this overall period. The other hypothesis is basically the one you're saying, which is there are tons of folks who are very talented, but they're all going into other fields. Right. And I do think that there's probably some of both here going on. But you know, the simple fact of the matter remains if you're a really talented, CEO and founder, right, where can you make the most money the most quickly? I totally doing a tech startup. Yeah, it's not doing biotech. Right. And it's certainly not doing things like building nuclear reactors, right. So I think it has to be at least some of both. I definitely think given the increase of the world's population, it's shocking that we don't have more like extremely talented people. Right. That's very, very weird. Yeah. So something systemically is going on that makes them less common, at least as a fraction of like total population?

Will Eden 8:52

Well, and it's really weird, right? Because I've got a right beside me, I've got one of Jim Collins books, I've been going through and you know, IQs, in the West have been going up over the last, you know, 50 years, maybe, you know, maybe the leveling off in the last 10. It's kind of unclear, but it seems like people are getting somewhat smarter, you know, like their pure like, horsepower side of things. It seems like people are getting smarter yet, we do seem to have less Shakespeares or like true, like outside talents. Now, do you think things are just kind of getting harder or something like that? You know, I

Unknown Speaker 9:22

really don't like that hypothesis.

Will Eden 9:26

It's not really a helpful hypothesis, at the very least even if it's true.

Unknown Speaker 9:28

Right. Exactly. It may be true. And I think certain aspects of it have to be true, right? Because like there There obviously are only a fixed number of ways to like put atoms together. Right. So like, clearly, as you like, find more of those combinations. There are fewer of them left, right. But like that isn't to say that, that we haven't been overlooking something super fundamental either, right. And I do try to think about like, what would a true kind of paradigm shift actually look Like something like the advent of computing, that sort of came out of nowhere. And it's sort of also like tied into like math and other things, which were kind of well understood, but like as a paradigm for how to think about the world that really kind of just overhauled things, right? Like it, it really was just this very different way of seeing the world. And computation has allowed us to do all kinds of crazy stuff. And, you know, I think that it has been less impactful than a lot of the things that we discovered a century back. But it was still kind of like a ground shattering, just absolute paradigm shift. And it's hard for me to imagine where the next one of those comes from. But I would also be absolutely shocked if we've discovered everything there is to discover either. And if you think about just hypothetically, the most efficient use of every atom, we are so far from that point, that the idea that we have somehow picked all the low hanging fruit seems absolutely crazy to me, right? If there were a super smart AI, like here with us right now, would they really be like, Yeah, you guys picked all the low hanging fruit? I cannot improve the world anymore. You've done it all. No, absolutely not. Right? That's absolutely crazy. So from that perspective, I think thinking of it as like, oh, well, everything is just hard now isn't, as you say, very helpful. And I also think that it's not super likely to be true. You can find historical parallels here. So in the like, early 20th century, you know, we had invented the steam engines many, many decades back. Yeah. And we discovered electricity, and we were starting to get like, you know, lights powered by, you know, power, right. And there was this feeling of like, Yeah, well, we sort of invented the, you know, obvious low hanging fruit. And that clearly was false. That clearly was false. You know, we ended up having this kind of mid century, you know, and you could argue why that period happens, you know, maybe it was the second world war, maybe it was like the movement of peoples because of the Second World War that sort of brought, like, ideas somewhere, it could be just that, like, we were all forced to sort of step up, right. And there was just this incredible explosion of tack that, I would say that was kind of the last time the world really kind of got fundamentally reshaped. Like, if you look at sort of the 1950s onwards, you start to see what looks like the modern world, right? If you look at you know, pre World War Two, like you can see the the sort of very beginnings of that, right. But it was still very, very early, like, we didn't have spaceflight. So for all of those folks back in, like the 1920s, who thought they just discovered all of the low hanging fruit that turned out to be completely wrong. Right? And can we tell whether we're in you know, the post world war two era or the PRI, right, and I think that's actually very hard to tell. And I think we can all look back 10 or 20 or 50 years from now, and and just be like, Wow, we were so dumb, there was all of this low hanging fruit everywhere. And like, I wouldn't be surprised to see that world. Right.

Will Eden 13:18

Interesting. It's to do you think like, perhaps and like, this is really difficult to even even think about? So like, I don't know how useful the question is, but, you know, do you think it's something where people just like, aren't trying as hard or maybe just aren't as inspired or something like that?

Unknown Speaker 13:34

Um, I think there's something going on there. I do think that adversity can cause humans to really step up in a big way, and humanity as a whole. And yet, you know, we also try to seek to minimize adversity in our lives. And I don't even necessarily think that the right thing to do is to increase adversity either. I do know, some folks who think like that, oh, well, modern humans are, you know, weak and soft. And we just need some, you know, giant global war to whip us into shape. It's like, okay, but the human consequences of that are just insanely horrible also. Yeah. But that said, you know, what could then sort of shake us out of the stupor, either, right. And I think some of what we're seeing, I mean, certainly now. There's a major war going on in Europe. And it was a word that a lot of people said probably wouldn't happen. And I think the sort of outside view that like, nothing ever happens now because we're in the modern era, I think that's been very well falsified. We've we've had a global pandemic, we have a massive war with one of the world's largest, most populous economies, it's now sanctioned is cut off from the world. I mean, this is absolutely crazy stuff. And I feel like if you could, you know, go back to us, you know, 10 or 20 years ago and share some of the stuff that's happened we would be be shocked. I do think it was much easier in, say the 90s to be like, yeah, history is over guys. And now I think today, it's very hard to actually make that case. So I think there's some chance that like, we could be snapped out of our stupor, through just events in the world unfolding. That doesn't mean we need to start them. That certainly doesn't mean that we have to make the world worse in order to, you know, change this thing.

Will Eden 15:28

Since it, maybe it's something like, you know, we look at Ukraine and what's going on there. And we, you know, maybe people start to think, wow, like, things really can't get worse, maybe we need to work harder and make things better, or something like that.

Unknown Speaker 15:39

Something like that. I mean, I think that alone isn't enough to shake people out of complacency. But it's a sign that much bigger things like that could actually happen. Right. Gotcha. And I do think that having a tighter feedback loop with the physical reality of the world is one of those things that pretty reliably produces progress. Now, maybe that's not the kind of progress we want, right? Maybe the progress we'll make as a result is like, killer. You know, drones, and, like, completely autonomous weapons powered by AI are saying, right, like, there's horrible things that can happen, right? So I don't necessarily even think war is like the answer. But historically, it's been one of those things that has sort of like lit a fire under us as a species to step up. And a lot of those things can then get repurposed after the war, also. So I don't think war is always bad. But I do think it's basically always net bad. And so I don't I don't I don't think that is the answer. I guess there's there's a question of can can we produce a sort of cultural psychological shift ourselves, right? Can we do that without any kind of outside force prompting it? I'm relatively optimistic that this is possible. I guess I would have to really think back to what, what kind of precedents there have been for that. But I do basically believe that if we change our mindset, it is in fact possible to think about the world in a way that makes us much more likely to discover great ideas. And I do think that, you know, unfortunately, we live in this very tightly regulated environment. So I do think that that there are headwinds, and I do think that those headwinds will sort of make it less likely for us to sort of purely endogenously make that sort of shift in mindset. And I think it can also make it hard for, you know, funding to actually get to those, you know, truly earth shattering type projects, also. So, can we fully do it individually without some outside stressor? I do think it's possible. But I do think that that's also going to be a major challenge. And I do think people like Elon Musk, for instance, right? Yeah, he's a complex figure like all humans are, but I think that he's doing something important, which is inspiring people with engineering. Right. And we haven't had those kinds of heroes in our society for a long time. And having examples like Elon Musk that we can all look at, I think, is actually one of the things that can start to kind of shape us up as a species.

Will Eden 18:18

That's great. And, you know, part of the reason I started this podcast was to talk to people that are, were have found, you know, $20 bills in the sidewalk. And just just to kind of put in the ether, that it is possible, there are areas you know, where you can innovate, like, there are things you can do, and just encourage people, you know, like, a lot of times the market is efficient. And you know, there's not alpha to be had, but you know, every once a while you can find things. And I think it's really important to look, especially if you're, you're a smart person. So So I'm curious, we talked a lot about longevity, and I want to talk a little bit more about biotech and how it differs from kind of investing in traditional tech. Sure, it seems like it's quite difficult, right? There's a lot more players, and it's a lot more expensive to get through. There's all kinds of complications, which we could go through what has been the biggest challenge for you in investing in biotech? It seems like to me, one of the big challenges is understanding that there's people up the chain, you need to sell to as well. So you know, there's shorter feedback loops in Tech where you can go straight to a customer, right, but maybe in biotech, you know, you have to invest in scientist, and then you just gotta go to this like contract research organization, and it's got to get to the FDA, and on and on and on and on. Have you found that to be the case? And what have been the kind of the toughest challenges to solve for successful biotech companies?

Unknown Speaker 19:41

Yeah, it is absolutely true. So I think I'll just start off by saying there's more to biotech than just drugs. And I think for drugs and to a certain degree devices, the dynamic that you're talking about is absolutely true. Right. You have a phase one trial, you have a phase two trial, you have a phase three trial. These are real important company events that you have to, you know, actually gear towards both on the financing side and the team side and where you focus your science, right, like so. From that perspective, I basically concur with you that there are these other factors which make it intrinsically more difficult than something like tech where you can push a button on your computer, and everything that was in test gets pushed into deployment. And suddenly, you know, your billion customers are using the code that you've just wrote, right? That is absolutely crazy, right? There's no parallel to that in bio whatsoever. And you can envision a future world where you can like, update some drugs or like personalized some thing and like, your desktop printer will produce the exact vaccine, like, Sure, great. That's a possible future world. But that's not what biotech looks like, right. Now. The other thing I will say, though, is, if you're doing a biotech business, that is catering to other biotechs, that's much more like a normal company, right? And that you do have customers that you're selling to right away. And some of my absolute best investments have been in companies like that, right? Where you aren't having to cater to the FDA, you can actually sort of like push out new technology to all of the biotechs that you're working with. Right. So I don't think it's quite as binary outside of the drug space, specifically. Gotcha. But in terms of drugs, which is one of the things that we care about, yes, it's a very different world. Right? Very, very different. And I think there are a few things that make it relevantly different from tech, one of which is that sort of staging. But I think almost more importantly, it's more about the sort of capital requirements of it. It costs a lot of money to even design one antibody, and then put that into patients for the very first time. Right, just to get there. You're talking eight figure checks? Yeah. Yeah. So in tech, there's nothing comparable to that. Nothing like and, you know, this is basically an artifact of the way that we've chosen to setup our system. And I do think that there could be a very different version of the world, which sort of doesn't involve the FDA looking quite like it does now. Right. But I also think that that's a very different world, that is going to be very difficult to get to from where we are now. But at the end of the day, if I could wave a magic wand, I would love the FDA to basically certify things as safe, but it just

Will Eden 22:42

leaves the efficacy. It's like, we're not worried about that. Yeah, just slightly, like regular consumer protections kind of handle that.

Unknown Speaker 22:48

Yeah, totally. And look like that would obviously also result in a world where a bunch of stuff that's not very good medicine is also being sold. Right, right. We already have that in like the supplement space, right? Oh, yeah. Some people are angry at the supplement space. It's like, oh, well, you know, it's like hard to know what's even in the supplements, and most of them don't do anything. But like, most of us don't really care, right? It's like, Yeah, I'll take supplements, if I feel like it. And I'm not really going to stop someone else from like, wanting their supplements, right. And we could get into a world where, basically, pharma looks more like that model. Now, I think there would be, you know, slightly more serious layers between you and just sort of like buying heroin off the counter. But I do think a world where drugs were developed and looked more like supplements is probably a world where we get more drugs. And in the end, if we get more drugs, and can try more things, I think we have an ecosystem that is more likely to innovate and actually get new good stuff. Whereas right now, that sort of feedback loop is very, very loose. And what this means is we end up doing a lot of testing drugs in animal models, which partially reflect humans, but also partially dumped, right. And so you get this weird situation where a ton of the kind of fundamental r&d is being done in vitro or in animals, or even in like computer modeling now, and the odds of that stuff, translating into a clinically useful drug in humans is just exceptionally low. It's very, very, very low. Again, some models are better than others if you're testing a light antibiotic in other mammal, okay, you probably know pretty much exactly how that will work. If you're trying to test a cancer drug in an animal and then apply that to a human. I mean, good luck, right? The odds of that working are so small, so small,

Will Eden 24:40

that shot in the dark is the answer more challenge trials or something like that. I think

Unknown Speaker 24:45

challenge trials would be awesome. Obviously, you can't do a challenge trial with like, you know, cancer. It would be hard to radiate your whole body and then give you a cancer drug and see if you survive But I mean, I guess consenting adults in that world would look horrible. Now, I think I think very few people would, would actually volunteer for that. But yeah, I mean, look, I do think that the FDA doesn't want to stand in the way of good drugs. And I think that they do very much go out of their way, when it comes to orphan diseases. Interesting. And that is the one area where you see the most sort of progress in terms of short timelines. All right, gotcha. So if you're treating an orphan disease, you might be from your first human trial to a fully approved drug and as little as like four years. Oh, wow. Now, mind you, in some other world, maybe that could be you know, like, one or two years, right. But that's pretty different than the common story, which is, yeah, from like coming up with a drug to actually having it inpatients worldwide being like 20 years. Unfortunately, that is actually all too common. And that's the kind of thing where I just start to think I mean, man, could we do this better? It's tough. Yeah. And I do think in this particular case, the fact that we have actually found all of these other drugs up already, because of the way that we've set up the system. I think that is a larger barrier in biotech than it is in other spaces, right? So if someone wants to make a clone of Facebook, it really just comes down to do people want to leave Facebook, does this, you know, new thing, have, you know, maybe some slightly better features? Or maybe it's just targeted at like, a younger demographic or something, right? Yeah, it doesn't really have to be intrinsically superior to Facebook to like, beat Facebook, right. But the way that the FDA actually sets up these trials is the new drug has actually beat the old drug. Right? It's not just that you can just put out a drug of similar efficacy, you need to actually do better than what's already out there. And I'm kind of like, well, but maybe just put that out and allow us to explore the sort of new space, right? And we might end up finding that there's these weird quirks. I mean, so many drugs, were originally approved for something totally different, and then got repurposed. Right? And so if you're, then like, well, for this one indication that you're going for, you know, say some heart drug, well, it's just as good as this existing heart drugs. So I think we're not gonna say yes. Okay, but you don't know what other purpose that drug might be put to 20 years from now. Right? We are repurposing so many things. That I mean, it's actually way better to just throw all this stuff out there. Absolutely.

Will Eden 27:35

Well, and you can use it, you know, a lot of physicians use it off label, they can discover all these new things, if it's actually in the ether, and people can use it, which makes

Unknown Speaker 27:43

a lot of sense. And I think the other thing I would point to in in terms of how things are getting better is there is an increasing push to allow, basically patients with no other option to use experimental therapies. So Congress did pass a right to try bill a few years back. And it does still require there to be a completed phase one study. So it's not literally like anyone can go to, you know, a scientist and be like, pump me up doc, go, you know, but the phase one at least, I mean, again, that is already a very high bar, we're talking eight fingers, right. But at least that gives this opening for folks to try stuff that at least has some, you know, a bit of kind of human record on it. Right. And that's a very far cry from having to wait until somebody's completed a phase three trial and is being marketed and sold, oh, that we're talking a speed up of, you know, many, many years for some of the sort of worst off patients. So I would also definitely highlight that as being, you know, really, really good step. I don't think it's, you know, as far as it could go, but it's a very good step.

Will Eden 28:57

Makes sense? Makes sense. And, you know, if you had to pick between the two, you know, would you rather there just be a lot more money in the biotech space, you know, capital flowing in or is just spending money on lobbying to try and get the FDA to, you know, drop efficacy requirements, and just just make the process more simple.

Unknown Speaker 29:15

I don't know if there's any amount of lobbying that would do that. Oh, yeah. To interrupt so well, look, I think that the way that you need to look at federal regulators is they get heavily punished when things don't go well. And they get no upside when things go right. And this is as true of the FDA as it is a V like nuclear commission, right, which hasn't approved anything or one or two projects like 40 years, right. So basically, every every layer of sort of government oversight that you add, is just another entire system of people, all of whom are only trying to stop you know, one of the Do kinds of errors, right? And you can just do that over and over and over. And you can create arbitrarily many of these groups, all of which can veto these projects. And so that's kind of the world that we find ourselves in. That's sad. A lot of the reason that the FDA has sort of gotten better on the compassionate use thing, and a lot of the reason that they're quicker to approve orphan drugs now isn't because of lobbying in the traditional sense is because of patient advocacy groups. And a lot of the really smart pharma companies are working very closely with these groups. Because these are actual patients and, and the families of patients that are basically like appealing to the FDA in a public and very emotional manner. Right, right. And I think generally, when folks think of lobbying, it's like, I'm gonna pay off some congressmen to, you know, vote for this bill. And it's really my moustache. But that's not what these groups are. Right, right there, for the most part, as far as I know, they're not paying anyone, right. But they're showing up at these meetings every single day. And they're like, Hey, you have done nothing. For my family member, you have approved zero drugs that treat, you know, my son, my daughter, right? And you can only sort of look those people in the eyes so many times before, you're like, yeah, maybe I should approve this one. Now, mind you, we do get things like that Alzheimer's drug, we're very skeptical, you know that it works at all. But that is the price. That's the price we pay, we have to let through a couple of drugs that don't work in order to let through drugs at all.

Will Eden 31:35

Yeah, you know, I talked to biotech m&a, laying on the podcast a couple weeks ago, and she talked about how the failure of that drug for Alzheimer's just as ruined, like a whole class of drugs that were targeting the space because no one will invest to them anymore. Because you know, that one drug didn't work. And he's this big Atlantic story and everything.

Unknown Speaker 31:53

Yeah, the Alzheimer's space in particular is tough. I definitely think just like every other field. Everything is about trends and fashion. Like other some target, and everyone wants to go after that one target. And that can make sense when it's a really good target. Right, right. But when it's a very uncertain target, right, and every drug company goes for it. Yeah, that can destroy entire fields. There are very few companies that are excited to invest in a new Alzheimer's drug, right. Which is incredibly, incredibly sad. And yet, that's how the world works. When things fail over and over and over again. We're just conditioned to then not try.

Will Eden 32:41

Definitely, definitely. Do you see any of this changing changing on the capital side? You know, I was talking to Paul smelting at Yale couple weeks ago, we're talking about the long term trend of interest rates for the past 800 years. They've been trending trending down, you know, down to like,

Unknown Speaker 32:57

I saw that paper. Yeah, yeah, absolutely. Absolutely.

Will Eden 33:00

So we were talking, you know about why this was. But you know, long story short, it does seem like interest rates are trending down hitting zero right about now. And this seems like this will probably continue to be the case. And so that pushes people up to riskier assets. You know, venture capital is one of them, you know, do you think eventually, like more capital in the space will just help fix and alleviate some of these problems in the long run?

Unknown Speaker 33:22

So I'm gonna say no, at least from the evidence that we have, when more money goes into venture, it tends to underperform. Just just reducing the returns. It doesn't. Yeah, which suggests that the the fundamental bottleneck isn't actually funding. And I suspect that that money could be better spent elsewhere. I think the way to think about VC is that it's a high prestige field, which means it's always going to be over supplied relative to the actual size of the market. Gotcha. And if you look at overall VC returns, it generally is somewhat underperforming, just owning the s&p 500. There are brief periods where it over performs, right, there are some, you know, 90s tech companies that have ended up becoming the largest companies in the world. So yeah, you have a couple cohorts that outperform by a lot. But the vast majority of cohorts underperform. Interesting, interesting. And if you pour more money into that space, it's basically going to push up valuations, and it's not really going to do a whole lot, I think, to increase returns in the space.

Will Eden 34:34

Got it? Got it. How do you, you know, working in venture capital that, you know, how do you think about finding alpha? You know, like, if, you know, there's a lot of capital, it's really hard. Yeah. Is it just like, just like, like, man, it's just very difficult. We just did the best we can kind of anger like, what's your answer there?

Unknown Speaker 34:50

I think every investor comes up with a set of heuristics that they think allows them to outperform. Yeah, and I think some of what makes VC extremely hard. Is that the feedback loops are very loose, right? So if you invest in a company in the public market, you have a daily p&l. And you have to stare at that number, if it's red, if it's green, you know, every single day, which I think is also another failure mode. By the way, it's very hard to invest Well, when you can see the price every single day. The flip side, though, is what kind of feedback do you get as a VC, right? Well, the company is going to raise another round, maybe in a year, maybe in two years, maybe longer, they're going to do that a few times before they go public. It's a very long road before you either a get your money back, or b Get something like a kind of daily thermometer about how things are actually going. So in that sense, I do basically think most VC investors are using the price of the following round as their criteria for success. Yeah. Which does create some obviously bad and weird incentives. And that's sort of only a proxy metric for the thing that you actually are trying to do. Right? So in that sense, it's very hard. And did you generate alpha, I'll tell you in 10 years, whether your strategy generated any alpha, maybe 15.

Will Eden 36:22

At that point, it's just too late. It's too late.

Unknown Speaker 36:24

I mean, it's not too late if you're gonna spend your entire life doing VC. Alright, so you know, maybe you have a 50 year long career, if you're very lucky, and you hang on away longer than you actually should. Maybe 10 to 15 years into a, I mean, Fine, let's call it a 40 year career, right? Maybe after 10 to 15 years out of your total 40 year career, you'll know if you're actually making money. I do think that it's not impossible, either, right? Like I invested for Peter Thiel. He's one of the great investors in the space, if there's anyone who has proven that they can actually generate alpha, it's him. So can I generate alpha by just copying what he's doing? Maybe? I don't think that's totally crazy. And I do think that I obviously learned a ton from him. I also don't think I'm as good of an investor as he is. But if I can get, you know, half of that alpha, I'll still be happy to leave make money. Right.

Will Eden 37:29

Right. Right. Right. Right. Interesting. Interesting. Is it just, you know, just at the metal level, is it just looking for things that other people just overlook? For some reason, you know, like taboos or things like that? Or just, you know, is are there any, like frameworks you can talk about that help you conceptualize,

Unknown Speaker 37:47

you know, picking good investments. So to be fair, I think biotech is a little different than tech. And I don't spend most of my days doing tech stuff. So it's possible that this is maybe a little bit of an unfair characterization. But I sort of feel like you could just take a company's weekly growth rate intact, and just like solely price it based off of that one metric, and just get rid of all other VCs. And look, I don't think that's actually fair. But I think that that's closer to the mark, then I wish we were dreaming. Yeah, I think I think the one big conceit that all VCs have is that the ideas matter. Interesting. And so often, I hate to say it, but but the ideas don't actually matter. It's more about the team. It's about the execution. And it's a little bit sort of trite to say that now, but I think even most VCs still haven't internalized how much that's actually true. Really, it's just can this team pull it off? Now, again, I think that's slightly more complicated in biotech, but only by a little. And the reason I say that is most companies in biotech, if they're developing a drug are bought before the phase three. Got it? Not every time, but most of the time. So yeah, there are some proof points in a phase one, they're pretty weak. By the phase two, you probably really should have some sort of, you know, indication that the drug will work, but even then, not always. Right. But yeah, I think I think that that has helped to kind of weaken the amount of that the sort of ideas and the underlying tech matters, because if it's bought before you've had to prove it out. Then the idea didn't matter did it?

Will Eden 39:36

So it's important just you know, like I guess, operational like managerial excellence and good salesmanship that matters a lot more like can you just sales and sales matters a lot sales

Unknown Speaker 39:45

skill? Seriously, I I honest to God thinks sales is the most important skill a CEO can have. It is the most important skill. And yeah, again, you get a Theranos type situation to it. which I will note, by the way, there were no like hardcore biotech investors in that company. Right? It was all folks from outside the space who invested in this company. So clearly, there's something that we could pick up on that something wasn't quite right here. Right, you know, but that said, there have been plenty of drug companies, which, again, were bought after a, you know, possibly successful phase two, if you sort of squint your eyes and like, turn your head and look at it in just the right way. Maybe that was a positive phase two, and that company still got bought. And that comes down to sales, it comes down to sales, it comes down to who, you know, networking. And if that's the primary thing that generates early stage returns, that's the primary investment criteria. Yeah. Can the CEO do sales? And I'll tell you right now, that's not different between tech and biotech. It's really not.

Will Eden 40:55

You bring up a great point, I've always thought that elands evil is real skill was that he's just an incredible salesperson. Like, you know, like, I think like, you know, he may be a competent engineer, I have no idea. Pretty probably it's very smart person. But I thought his real skill is just his ability to sell. I think he's a really great salesperson,

Unknown Speaker 41:11

100%. And quite a few people have pointed that out in the past. But it does seem though, like, yes, he's good at sales. And he seems to have actually created working products, too, right? It's important. And those two things are somewhat orthogonal. Arguably, they're even diametrically opposed. In some cases. However, he's actually proven himself in a way that a lot of people who are good at sales never have to actually prove themselves. It's true. So I think he has earned more respect than He's normally given at this point. I think you're right. I do think those are totally fair criticisms, even five years ago, but certainly 10 years ago. I think I think that there are other universes where Elon, you know, did blow up the first three rockets or four rockets or five rockets. And he's nobody now quite, quite clear. Yeah. And that's not the world that we live in. And I'm very glad that it's not. But I do think that there were many cases where he was a sort of hair's breadth from failure. And he pulled through. Well,

Will Eden 42:20

that brings a great question, you know, up, that I've been thinking about, sorry, it's not on the outline. But yeah, how much do you think, chance of luck play in these things?

Unknown Speaker 42:30

They obviously play some role. And it's one of those things where for the people who don't have the non luck factors, they like to play up the luck. And for the people who have the non luck factors, they like to play down the luck. Excellent. Yeah. So clearly, there is some work. And also very clearly, there are a lot of things you can do to stack the deck in your favor. I like to think of it as how much can you load your dice, it's still going to be a roll of the dice. Okay, fine. Right. But maybe your dice have three sides that have a six on it. And you know, maybe the others are a four, a three and a two. Like, that gives you a much higher average roll. But yeah, is there luck? Yes. But have you changed the expected value? Yes, by a lot.

Will Eden 43:22

It sounds like you probably want to act like you know, it's all under your control. But at the end of the day, at the macro level, that luck is involved, you just want to maximize your expected return as best you can.

Unknown Speaker 43:32

Oh, yeah. And I think most entrepreneurs are basically like psychotically deluded about how little luck matters. And I think they have to be, right. And this is also one reason why I'm not super excited to start my own company, like, I will do it, if no one else is doing it. And it's a really good idea. And I have a pretty high level of certainty, I could be convinced to start a company. But for me, that's a huge hurdle. Whereas for other people, they are just like compelled. They can't not to start companies. And those people often are not necessarily the best thinkers in terms of like figuring out what's true and what's not true. But they're much better doers than the people who are trying to figure out what's true and not true. I'm very glad that those people exist, I think they put themselves through enormous hell. I basically think being an entrepreneur is absolutely hellish. And only crazy people do it. And that's fine, because those crazy people do exist. And if they didn't, the world would be much worse. But I'm also not so self deluded to think that I could be one of those people and stick it through even when things obviously weren't going well.

Will Eden 44:53

You know, well, I want to I want to tell you this, this quick anecdote, you know, coming out of college, helped create this company with you know, My friends. We sold it five years later, right, you know, week before the pandemic, and we were doing a retrospective. This is a couple months ago with one of my friends. And we realized there was probably 12 separate occasions where we thought it was greater than 75% chance that we were going to fail week to week, you know, like, they were like, wow, Jesus, like, odds on that are like, not good. Like, we were so stupid. Like, stopped, like, each of these occasions, like, you know, I was like, clearly, you know, I don't know, like, you just kind of somehow figured out some way. If you're just kind of somewhat diluted, I suppose probably the best way to look at it.

Unknown Speaker 45:40

And then how successful were you know,

Will Eden 45:42

we did? Okay, you know, we did okay, it wasn't a huge success. You know, it wasn't a failure, but it was like, just very median kind of outcome. Little bit about median, I would say, not life changing. But you know, a really good experience and a great lesson, I would say, Oh, totally, which was very interesting, very interesting. Which brings up a question I wanted to ask, which is, you know, how do you think people can kind of get better at thinking, you know, it's clear, like people can get better, like, you know, they get more fit, we can kind of self approve and all these different areas. But do you think people can kind of like self improve in the area of thinking about things and being rational?

Unknown Speaker 46:18

Absolutely, yes. Yes, of course. It's like any other skill, you can obviously train it. That's awesome. Now, my caveat, however, is that returns to thinking are probably wildly different across people and what they're trying to do. So if you meet a high level poker player, they're incredibly rational in terms of doing things like calculating expected value, right? They have gotten very good at that. And they've trained themselves to do that. Because if you don't do that, you systematically get money drained out of your pockets, important. So in that sense, they face this very steep curve, where you either get really good at a certain kind of thinking, or you lose all of your money. And in any environment like that, there are so many, like strong incentives to learn that you're going to improve your thinking, or you're not going to stay in that field. And I would argue this is true of like, finance, too. If you're this like crazy, over emotional swing trader, like I was going up, I'm gonna buy, oh, it's going down, and suddenly, and very, very quickly, you'll certainly soon learn that you lose all of your money. And almost everyone who actively trades has some period where they all admit they were totally stupid. But you can learn to manage your emotions, you can learn to be systematic, right? You can learn to have heuristics that work, you know, 52% of the time, right? And that that sort of thing. You can obviously, obviously improve on and make games. But what fraction of people are in that kind of situation where you have to improve your thinking skills in order to to do better at life? Not many? Seems like that. I would argue that it's actually not that many. Yeah. So do you want to improve your thinking skills? I think the answer is sort of like entrepreneurs, are you compelled to do so is there are no world in which you wouldn't improve your thinking skills? In which case, go ahead and do it? And you can absolutely do it. If you're a normal, sane human being how much is that really going to help your life? You know, maybe some here and there? Right. But I think not. It isn't, it isn't going to be profoundly life changing either. Gotcha. It

Will Eden 48:41

was just like not that much, instead of for most people to get better. Really? Yeah, it's probably what's going on? And what is getting better look like? Is it just like recognizing like biases, cognitive biases, that kind of thing? Or? Yeah, what do you think that looks like?

Unknown Speaker 48:56

Yeah. I mean, the actual answer is probably that it's a lot of different sub skills. I do think that learning to recognize cognitive biases is actually very, very helpful. I have personally spent a lot of time investing in doing that. And I feel like it has been very helpful for me. But I think that there are other kind of broader sub skills too, like just learning to do really well at introspecting on what's going on inside your own head. That does help with things like noticing a cognitive bias, but but I'd almost say just things like having good relationships with people can really, really benefit from that. And that's not exactly what most people mean by improving your thinking. But it is effectively a cognitive sub skill that will affect every other area of your life. You know, if you can figure out what's going on in your head and you can figure out what's going on in someone else's head and you can talk to them about what's going on. Sometimes you can actually fix problems that otherwise would sort of go unnoticed and just sort of sit there and fester. So is that improving your thinking? Well, that's not what people usually mean by that. But I'd argue that it's almost more important in some way.

Will Eden 50:07

Definitely, definitely. It's super interesting, super interesting. But you know, Tyler Cowen has this this phrase that you should knowledge workers should have something like scales like practice every day. Do you think people are trying to get better at their thinking should have some kind of like a skills they practice on a daily basis to kind of try and get better at

Unknown Speaker 50:24

it? Yeah. I mean, within the rationality community, I'd say, betting on the prediction markets is a sort of good way of, you know, staying at least somewhat calibrated. You know, most most people aren't weighing in on so many markets so often, but at least it's a sort of baseline check. And I do like that there's a little bit of a culture of challenging each other Tibet's like, Okay, well, you think something strongly, I think something strongly. They're not anywhere close to each other. Let's turn it into an actionable bet. Let's turn it into some observable thing about the world. And I think just having that as a cultural norm keeps people a little bit saner, actually. And it does keep them a little bit more in touch with like, okay, am I modeling the world? Well, is this subjective probability that I have in my head reflective of actual probability of something happening? Some folks explicitly do calibration exercises, and I think that's useful to do every now and then largely, again, to just translate the subjective feeling of a probability in your head into an actual probability that corresponds to something that you can check. Very good to do that sometimes, or even just once. But is that necessarily going to keep you sharp? I think it's it's tough to do it was sort of stylized things like that. Got it. Got it.

Will Eden 51:45

So you So you started work, you know, you worked Federal Reserve, econ major, you became a biotech investor investing longevity? You know, were there any things you anything you like, explicitly practice along the way? You know, getting up the skill, in biology in longevity? Was it just like reading a ton of papers and getting the lay of the land? Like, like, how did you think about that? Just like that was like, academic papers? Like, that's the best way to

Unknown Speaker 52:09

do it? Yeah. So. So I would say that there's a skill in how biology works, generally, there's a lot of specific facts about biology. And then there's the skill of becoming a good investor. And I think all three of those I've learned separately. Interesting. So I would say that my journey basically started towards the end of college. And I was really reflecting on what I wanted to do with my life. And basically, the answer that I got back if I could, would basically to be stopping sickness and death and suffering, right, just like I was looking around me and seeing my parents and my step parents like falling apart at the seams and other people who had just like mysterious health conditions. There's tons of people that just like, can't lose weight, right? It's everywhere. If you look around, like, ill health is everywhere. And it was just like eating me, I was like, I want to do something to try to help this. And so what I ended up doing is I started with myself, I was like, Alright, I'm just gonna try to answer some, like, really basic questions. What should I do for diet and exercise? So I started to read the literature. It's like, okay, this is a total mess. We have no idea the studies are done super poorly. And I do think having a background in econ really helped here. Because A, I was actually like, literate enough in stats to sometimes just see these things and be like, that doesn't really mean what you think it means. That that isn't good evidence for this claim you're making this doesn't make sense. And then everyone's citing this bad paper and like, well, I can't trust those papers. It just got burned, you know? Yeah. Total total mass. But I think the other thing too, is there's a way of thinking about complex systems, which I picked up in econ, not from my classes, but from actually learning fundamental economics from you know, folks like Hayek and Smith, right, there is this way of, of seeing the world as a complex system. And I immediately could see the same things going on in the body. And once I could sort of like port over some of that just general way of thinking that like, actual systems level thinking, the whole body started making a lot more sense. That's cool. And so in a weird way, my background outside of bio, I think actually prepared me really well to teach myself more bio. So that kicked off the phase of me just like reading everything, and just following every rabbit hole. I got down, you know, I was like, Okay, so I'm interested in nutrition. So like, how are different foods digested and like, oh, it just turns into like, you know, fats, proteins, carbs are like in the bloodstream and then they get metabolized. How do they do that? Oh, it's going into the mitochondria. I'm like, Oh, the mitochondria. So how does that thing work? Like, oh, this thing is really linked to cancer. Now I have to read every paper on cancer And I just did that. And I read 1000s of journal papers. And it's tough because a lot of people ask me like, oh, I would like to get started in bio, can you suggest something for me to start with? I'm like, no, no, I can't actually, my knowledge is compiled from just reading so much hours daily. For years. I didn't have a single source. I didn't have like one textbook where I'm like, oh, yeah, you should like definitely check that out. That totally makes sense. I have no idea where someone should start. I just sort of jumped into it with both feet. And I'm here now. And I feel bad because I want to give people good advice, but actually don't have it. Like I just put in the 1000s of hours necessary to become an expert in this space. And it's very hard to shortcut that part. Right, I do think I was able to shortcut the, like, way of thinking and I was able to shortcut knowing whether a study looks good or not, I was not able to shortcut Learning the facts of biology, there are so many proteins, so many different molecules floating around so many drugs, so many systems, and all that just takes time to learn.

Unknown Speaker 56:12

Then there's the becoming an actual investor piece, which I did much later, right. So I got interested in bio years before I ever even considered investing in the space. I'm honestly just incredibly grateful for Peter, and that he gave me the opportunity to do this, I wasn't an investor before, I worked for him. But he knew that I had this knowledge base. And he knew that, that I could focus on it as a specialist. And, you know, I teamed up with some other folks internally, and we just sort of did it. And, you know, it really was a case of, you know, asking for forgiveness, instead of asking for permission. And I look back on those first few companies that I suggested, and they are so bad. And how I was thinking of them was so terrible, I am shocked that he didn't like to laugh me out of the room or screen me out of the room, because it was so bad. Right. And that was true of many of the first companies. But eventually, we started to actually hit on something. And then we started to see some of these outcomes, you know, they get up rounds, how high like how soon right, we started to see, okay, were they able to execute or not, and not just on companies that we did invest in, something that I think everyone should do is they should keep a shadow portfolio, look at all the things you seriously considered, but didn't invest in and look at how all of those did and why. And some of those shadow portfolio companies did incredibly well. Which is always very, very big. It's brutal. But in terms of training yourself to think especially when there isn't that tight feedback loop, you need as much as you can, in early stage companies. Yeah, get a bigger dataset, don't just follow the companies you invested in follow the companies you almost invested in, because that's the closest thing you have to a control group. It's not perfect, because obviously, you are choosing which ones to invest in, not invest in, if it's close, it was close for a reason. It was close, because it almost hit all the heuristics but not quite. And that can help you see okay, which things actually turned out to be pretty important and which things really

Will Eden 58:23

very cool. One common theme I see, just you learn in biology, about longevity is you know, you were just like really intellectually curious about it, to the point where yes, this is something you're gonna do, like, kind of no matter what, right? Like, you know, you're just gonna go out there, read the papers, absolutely. Have fun doing it. It's not like you were like sitting there, like forcing yourself every day, I'm assuming till I want to learn biology. No, never. It never felt like that ever. Which probably seems like a really important part of being successful in it, at least. It's like, if you're like trying to force it to happen, it probably wouldn't work as well, or

Unknown Speaker 58:56

something like that. Yeah, I do agree. I basically think for developing something like that in your kind of, like spare time, I basically think you, you have to be deeply intrinsically motivated. If you're doing it as your job if for some reason, you know, right now you're plugged into a lab, and you had no choice, you're like, you have to become a scientist, I'm pretty sure you would find a way to do it, you know, in the 40 hours per week you would spend on it, and then you do something else, right. So I do think that it is possible to develop expertise deliberately. But I don't think that that's gonna get you the passion to do it in your spare time. Right? You have to actually be motivated to do it. Which also sort of like ties into how we think about how to parent like, we are, we're actually unschooling our kids. We just wait to see what they show some intrinsic interest in and then we like pour fuel on that fire. Right. And it can be almost anything. It can be totally random stuff. But some of our our thinking there as like, well, they're not really going to want to go deep on it, they're not going to stick with it, they're not going to really develop excellence in it. If we're forcing them to do it, we have to wait for them to show the interest, and then help fulfill that interest as much as we humanly possibly can. And I basically think you can do that to yourself, right, you can look at the thing that you actually want to be doing. And I think it's tough because a lot of people tell you to turn your hobby into your job. And I think that's hard on multiple angles. And one is not all hobbies can be turned into jobs. Right. And I think that advice is sort of causing a lot of people to just become more unhappy with like, their actual job. Yeah, I am very hesitant to give people advice that I don't think can be sort of universally applied or sort of always successful if you follow it. So I'm not going to tell you to turn your hobby into a job. But if you want to be intrinsically motivated to get very good at something with those, you know, hours that you have left in the day, it's basically a necessary condition. It makes sense, right? So you might not always be able to turn your hobby into your job. But if you want your hobby to become your job, you have to be pretty interested in pretty motivated to do it.

Will Eden 1:01:12

That makes a lot of sense. It makes a lot of sense. Yeah, I think I think that's very good advice. And that you're not like sending people down a rabbit holes, but it's like, this is like a good path, if there's something well aligned with what you're interested in. And you spent a lot of time working on it.

Unknown Speaker 1:01:29

Yeah, I mean, I would say the thing I personally struggle with is how to know when to go into a highly competitive prestige driven field, right? Like, how should someone tell whether they should try to become a movie star? Right? And I don't have a good answer for that question. Because ultimately, you kind of have to try it and see if you get some traction. And sticking with it in an almost like psychopathic way is probably necessary. Other than a few, you know, incredibly lucky, random breaks, but like really sticking with it and just trying and like doing those small gigs and stuff. But yeah, it's tough, because I would personally tell basically, every friend I have, don't try to do that. That seems crazy, right? And yet, the movie stars come from somewhere. So maybe it is like being an entrepreneur, right? Don't go into these fields, which are extremely hard to ever make any progress in unless you are just intrinsically motivated to bash your head up against the wall forever, and possibly just ruin your life because you focused on something totally fruitless. That feels like terrible advice to give to someone and yet you need people who sort of come out the other end of this, right? Like, a shockingly huge fraction of kids want to be a YouTube content creator. How many of those are there in the world? And then how many kids want to be them? And then run that math? Like, well, what advice should I give my kid now? Okay, so you want to be a YouTube content creator? What should I even tell you?

Will Eden 1:03:00

Right? Well, this, this reminds me I have a good friend. He talks about this a lot. And he says, you know, one of the things that people miss is, you know, kids will come to him. He's a school teacher. And, you know, ask them what they want to be. And they're like, Well, I want to be an NBA star. It's like, well, like, Yeah, but like, why do you want to be an NBA star? It's like, well, like actually, like, I like money. I want a lot of money. Like I can care less about basketball, but I know NBA players have money. Like in the surveys, you know, it's like, yes, you can go.

Unknown Speaker 1:03:29

Yeah, it's like really just like, prove your thinking and then go effect.

Will Eden 1:03:32

Yeah, exactly. Maybe they got like, because maybe it's just like people are glomming onto like, some other aspect. And that's just a popular choice. But who knows, I think it's

Unknown Speaker 1:03:41

tough if the thing that they're glomming onto is the fame, right? The same is really pretty zero sum. Money is not a zero sum fame is pretty zero sum.

Will Eden 1:03:53

Game is pretty bad. If you want to when

Unknown Speaker 1:03:55

I would say any, any field that involves drawing people's attention away from something else they're doing to your thing, is going to be intrinsically very difficult, including podcast by the way.

Will Eden 1:04:09

I would, if you want to make money or be seen or anything like this, I would not recommend podcasting. It's not a good, good way, though reason I started the podcast to be able to talk to people like you will, which I would have no access to otherwise, essentially, it's really an excuse for me to learn from people. And for that, it's great, but if you want to go out and like try and make money and things like that, I think it's a very poor choice. Many other ways your time ever better.

Unknown Speaker 1:04:32

So it's funny, I I first started thinking about doing a podcast, man. I had an old Facebook post about this, I want to say was eight or nine years ago, and I just asked people, Hey, would folks be interested in a podcast that was just two people having a really interesting conversation? And it turns out this is one of like the biggest markets for podcasts ever. Joe Rogan is just two people sitting down having a good conversation purposes. And the amount of pushback I got was actually pretty surprising. There were several people who were like, yeah, that actually does sound kind of cool. I would like that. But the number of folks who came back me like, No, you, you need this, like, you know, type content thing are super boring. And it has to be super edited and scripted. And that's kind of like, Are you sure, but I didn't have enough conviction, right, because at the time, I thought the podcast space was too crowded. Visit today, but actually started back then I think there's a decent chance that just having interesting conversations would have caught on, it could have been some sort of podcaster. And it's still to this day, I'm like, maybe I should start a podcast. It's like, well, but it's an even worse time now.

Will Eden 1:05:45

Very interesting space. I gotta say, yeah. But I do highly recommend it. You know, if you want to have interesting conversation and learn from people, it's a great, it's a great method to do that from. But it's not a great way to like, try and go out and make a lot of money or something like that many, many ways.

Unknown Speaker 1:06:02

Yeah, I mean, I did honestly try to think like, Okay, if I did start a podcast, I wouldn't expect to become rich or famous, necessarily. It's like, what actually was my sort of success criterion for that. And I was basically like, yeah, if the right 10,000 People listened to it, and liked it, I'd be very happy with that. And I think the trick there, though, is to get to the right 10,000 People, you actually have to get to like, a million plus people. And then randomly hit those, you know, 10, best in the you actually want to listen to the podcast

Will Eden 1:06:37

on that a little bit, because I have actually a lot of success. Like, I've what my audience is like, the exact type of people that I would like to connect with. For some reason. I don't know why I guess it's just, but I think it's because I only follow, like, I only contact people I'm reading, or I find interesting, like it is exactly that, like I have, I do not look at like, who's popular or anything like that. I think if you tried to do that, it wouldn't really work. Yeah. But if you do just follow your obscure interests, like I think you can make it, you can attract that kind of audience.

Unknown Speaker 1:07:11

I have a couple of thoughts on that. I mean, one is, if you're thinking of a niche to dominate, I think you can totally make a podcast that is very popular within a certain sort of subgroup in our culture. Yeah. And I basically think that you have succeeded at that lifespan. And there's a question of okay, then can a podcast kind of like break out of a particular niche? Yeah, that's a good question. And one answer is, you don't actually need to write like you, you, you have hit your goals with this podcast. So it doesn't actually have to be more popular because the people that you care about or hearing it, and you did that because you're targeting a particular kind of person. But I do think that in terms of doing like the stag hunting thing, and like trying to get famous people on the podcast, I do think even for a podcast is targeting a niche, it is still actually pretty useful, just from a marketing perspective, saying, Hey, look at the awesome people that I've had on this podcast, because those folks have fans who will listen to all of their stuff no matter what. And they'll discover your podcast one, too. It's easier to get the intros. If you're like, Hey, I've had X, Y, and Z on my podcast, Would you also like to be on it? Because it gives you this level of social proof. And so I do think we shouldn't be seeking out famous people to be on our podcasts. But having famous people on a podcast does not hurt. It actually does help.

Will Eden 1:08:31

It definitely does. And that's, you know, you mentioned social proof. And that's one of the very weird benefits that it does give you is, you know, like, there's, there's some weird linkage people get when you sit, you know, I reach out to people, I say, Hey, I've talked to these people, and they're like, wow, like, I like them. And, you know, people are much more likely to say yes, that way. I don't know if humans are very, like, status driven or something like that. I don't know, kind of disturbing at some level.

Unknown Speaker 1:08:56

Um, yes. And no, I think some of it is status driven, though I think a lot of it is. We live in this very busy, complicated, crowded web slowly. And you need some method of sorting, right, you need some method of rapidly separating signal from noise. And anything that is a hard to fake signal is really useful for that. And being able to point to a podcast be like, Hey, I interviewed Important Person X for two hours. That's really helpful. Because it it is it is very hard to fake signal that Important Person X thought you were important enough to give two hours to that's a really great point. And I think that among nerdier type people we really hate costly signaling because it feels like you shouldn't be able to just like tell people the truth, and then we got this horrible cost, and the signaling feels really dirty. And yeah, it's often this like status based thing like gross, right? Yeah. But if you think about it from a search and a like, information theory perspective, on some level, you have to To get signal from noise you have to and the costliness of the signal is part of what makes it a valuable signal. And those are inseparable. They're absolutely inseparable. And I think it's better if folks like us really learn that lesson and internalize it upfront, because then we can get comfortable with the fact that yes, sometimes you have to pay these weird social costs. But you get incredible benefits. Because you are conveying credible information to other people in the world. That's one of the most important things you can do.

Will Eden 1:10:29

You know, man, well, I really appreciate that. Because, okay, I'll tell this anecdote, really quick. My friend Lars and I, we wanted ACX grant, this last December, for some of our work on land value taxes. And it just opened up like a whole new cadre of guests. And it was kind of like a black pill. Because I was like, Man, I haven't done anything like different now until like, like, I just get this one signal. It's like, Man, if I had a Harvard degree, is this the same thing? And I'm like, Man, this is kind of annoying, but the world works this way. But I think the way you painted that as it's like, it's a really good way to look at it, right? It's like, it just people have very little time to evaluate. And it's just like, you have to take shortcuts where you can. And it's an easy way to do that.

Unknown Speaker 1:11:11

Yeah, and frankly, we are all born into this world as helpless newborn infants who cannot do literally anything. Everyone's entire life is bootstrapping, even from the very first like, get the visual system online, learn how to move my arms, like, even if you're born rich, you still have to bootstrap basic human functionality. So and I think that we actually just have to be okay with that. And we have to be more patient with ourselves and others and accept that, to a certain degree. You know, we have, like, we all have something to prove. Everyone, no matter what has something to prove. And that's hard. And that sucks sometimes. But that's part of life.

Will Eden 1:11:52

Yep. Yep. That's the way it is. It's, that's, that's really well put what you know, this is a great transition to parenting. I'm sure you've got a lot of really interesting thoughts on the subject. Some of the things you mentioned earlier in the podcast reminded me of we talked to Tommy Cole us, and he's one of the Collison brothers, yeah, a while back, and we were talking about his childhood. And it was very much like, you know, his parents just encouraged him to kind of go after, like, whatever he found interested in and really enabled him to do that, which I really found, like, awesome, because I see around me, everyone trying to get their kids into the competitive preschools. And so they get to the right college. It's just like, really, like Insanity. Just like seems like a really bad idea to do that. So how have you approached parenting? And how much do you think parenting matters at the end of the day, if you're not kind of actively screwing up kids?

Unknown Speaker 1:12:40

Oh, man, that is a huge and extremely contentious subject of which many books have been written.

Will Eden 1:12:47

Most more questions here.

Unknown Speaker 1:12:49

I mean, look, maybe I'm as delusional as the entrepreneur who assumes that he'll succeed no matter what. But I basically believe that my parenting matters. There are studies that will try to show you that's not true. I think that those studies try to prove a little bit too much. But I think it's probably one of those things where the people who thinks it's like all genetics plus randomness is, you know, understating the effect of parenting, and most parents are overstating it. And I do have a couple of essays on my blog on this subject, where I've tried to actually get into studies which try to get at this question. Most of these are using heritability estimates. So you take, you know, identical versus non identical twins raised separately versus raised in the same household. And then you can sort of decompose that variance into genetics, shared environment and non shared environment. And I've never really loved this approach, because you're not directly measuring anything. It's basically like a statistical trick. Gotcha. And it is a statistical trick that to be fair, does have some value. And I think that is particularly helpful for trying to back out how much of stuff is actually genetic? Because I do think almost everyone is underplaying how important your genetics and your partners are in the outcome of your kids. And I know no one wants to think anything is like predestined, and it's really not. But again, you're sort of loading those dice. And I really do think folks should, you know, at least give a nonzero amount of thought to like the genetics of the person that they want to settle down with. That's, you know, not directly how we choose our partners. But I think subtly, right, I think we are sort of thinking about by selecting on that. But I do think yeah, for folks who who, like, especially folks who want kids and want a lot of kids, it's at least a factor we should be thinking about a little more. And you see it coming up with like preventing genetic diseases, which makes a lot lot of sense, right? Like, if you're both carriers for something, you know, that's a huge issue for the child. But I do think just yeah, in general, it matters. And I think the heritability studies are good at pointing out that it does matter. Those studies also do show which things matter more than others. If you're talking about your height, it's mostly genetic. Really, frankly. And if it's health stuff, yeah, it's actually partly genetic, you know, certainly the, you know, propensity towards certain types of health problems are, once you start getting into the social variables, you actually do start to see the genetic component go down, and you see the shared environment go from, you know, zero to something more significant. Fundamentally, I don't like how the shared environment and the non shared environment are separated in these

Will Eden 1:15:51

studies seems like tough to do marketing. Yeah,

Unknown Speaker 1:15:54

I have, I have two complaints. One, one is about the shared environment, and one is about the non shared. And my complaint about the non shared environment is basically that I know that all parents like to pretend that they treat their children the same, but they really don't. And just because two kids were born into the same household, I think doesn't mean that they got parented, the same at all. There are then like, arguments like okay, but then there still should be something that shows up in the shared environment. Okay, sure, fine. But like, if you actually just look at an object level, how, how parents interact with their kids, it's very, very different. So it's, it isn't a priori obvious to me that the shared environment component should actually be catching the effect of parenting. But then the other problem with the shared environment is, it basically makes no sense for the shared environment to appear to be virtually zero. Because the shared environment isn't just your parents, right? It's the house that you grew up in, does the house that you grew up in have led paint? Okay, why doesn't that show up then as a shared environment effect on IQ? If lead has any effect on IQ and lead differs area at area? Why doesn't that show up? Why shouldn't the kids raised together have lower IQ than right? Yeah. So the very fact that the shared environment isn't showing up known environmental things like toxins, you start to then wonder, okay, well, then, well, then why? What is this thing actually measuring? It sure. Seems like it's just some weird statistical artifact and not really the actual sort of thing that we care about if it's not catching known environmental factors that are shared between the people that you're studying. And then I think the final criticism of these heritability studies is they're really only well defined within a population. So if you could do some RCT where you take twins, and one of them is raised in, let's say, the Congo, and one of them is raised in Norway? Well, there are basically zero RCTs that do this, right. However, could you make any case that the shared environment and those two people's life outcomes should be zero? That makes absolutely no sense to me? Like what if the other person dies? Of a tropical disease? Yeah, they could have been treated for in Norway, right? Can they possibly become a successful multibillion dollar entrepreneur, it seems much more likely that's going to happen in Norway, even if these kids are genetically the same. So if you actually could take, like a sort of global heritability estimate, the shared environment factor has to be absolutely massive. And the pushback on that is basically like, okay, sure, that's true. But what you care about is sort of how much you're affecting your kids outcomes within, like, whether you live in the US, it's like, we're not actually going to, you know, go then, like, take one of our kids and like, give them to someone, you know, to raise and you know, I don't know, Afghanistan, or something like, no one's actually going to do that. So maybe what the heritability estimate is telling you is how much each of these factors matter within the context in which you are embedded. And I do think that that's true. And yeah, it comes down to, on average, half genetics, and half everything else. How much of that is parenting? We don't really know. I think some of it is parenting. I don't think it's zero. It also feels weird to me, because a lot of these people who say that, like parents shouldn't matter or sort of don't matter. A lot of them also somehow seem to believe that like having a great professor in college matters are things like that. Inconsistencies like okay, so you're telling me the person you spent the most hours of your life with has less effect than this, like basically incidental contact that you had for like a year of school or something

Will Eden 1:19:48

really bizarre?

Unknown Speaker 1:19:49

How does that make any sense whatsoever? So yeah, I think, at least with those people, they sort of acknowledge if you're going to do a kind of like weird homeschooling thing where you have it large number of kids and your families pretty insular and you're doing something sort of weirdly different than the general population. Okay, maybe then you have sort of opted into some weird edge case where maybe parenting matters, like, Okay, I mean, in fairness that's closer to us. I am just personally pretty strongly against sending kids to school, it was pretty bad. Like, I understand that for some people, that is an absolute necessity. But I think for a lot of people, they're choosing to do it. And yeah, in that case, yes, you're handing over some of the most critical years of influence to someone else, to some effectively stranger, and to some group of, you know, 30 kids who you didn't choose or pick or like, and I basically think parents try to do a proxy version of this by sort of choosing which school district they live in. Yeah, that's a huge game here is a huge, huge game. And I just look at all that. And I think, man, I just, I look at the world today. And I think, do I want my kids to be more like the mainstream or less like the main? And for me, that's an extremely easy choice. My hesitancy is zero?

Will Eden 1:21:20

That makes a it makes a lot of sense. And you're, what is your approach been? Like? Is it been just kind of unschooling it's been like encouraging, you know, your children's interests as they come up? Like, like, what does that look like?

Unknown Speaker 1:21:31

Yeah, because like, I do think it's tough, because as children, we start with zero knowledge of the world, right. And so there are probably hypothetical interests they would have that they've never been exposed to, and they don't know what to ask for. So I think one of my jobs as a parent is to expose them to a wide range of stuff, very, very wide range, even things they don't necessarily think they would like, at first, if they're up for trying something. And usually, like, Yeah, we should try it at least once, maybe twice. And I do think just giving them that, that broad base is really helpful. If nothing else, to just identify what things are going to want to do later, I always wish that I were doing more of this, on the margin, you know, every day is busy, there's always things going on, I always inside myself wish I were given them a more varied experience. And I actually wanted to, like take them on a trip to Europe, in the spring of 2020, this turned out to not be possible, or travel restrictions of COVID happened, which was not the thing when I was planning it in 2019. So certainly, there there, there are lots of kind of missed opportunities there. But I really try to see that as my job, you know, to to just expose them to a wider range of things. And I'll say they're fairly savvy kids, and they're pretty good at finding out that stuff does exist without my help, too. But, um, but yeah, I think I think that is one of the major pillars. And then once you actually find out what they're interested in, then I think my sort of second obligation is to try to sort of give them as much of that as they want to sort of soak up. Got it. So even though I went to schools, as a kid myself, when I think about what I was, like, really interested in and, and spent my time trying to learn, like I was really into math. And I was always way beyond the math that was being taught in the grade level that I nominally was in, I was just sort of doing math on my own for fun. And similarly, I never took a course on like programming. But I started looking at textbooks and I started looking at other people's code online, I started to tweak things. And so a lot of the sort of actual enduring knowledge in my life has just come from this independent exploration. And when I look at that, and then I think about how much time I spent in school, it feels like this enormous travesty that I wasted so much of my time. Yeah, sure. There were valuable snippets here and there, and I liked having, you know, friends and stuff, which you've totally get outside of school. But like, I do think overall, that time was mostly wasted. And I want as as little as possible to waste my kids time. So see what they're interested in, and then immerse them in it as much as they can handle and they want, right? And that can take any number of different forms. And it can be incredibly weird stuff. It sort of doesn't matter. The idea is to preserve that intrinsic curiosity that drives them to excel in a particular subfield

Will Eden 1:24:35

makes a lot of sense. It makes lots of it seems like, yeah, perhaps it's something that's missing. Perhaps it's part of the equation that's missing with our lack of Shakespeares today. And

Unknown Speaker 1:24:45

true experts is like people just aren't getting the time young enough to explore these things. Too regimented? Yeah, totally. And there's a great essay by Eric Weinstein, on the edge where he talks about the pursuit of excellence. And we have excellence crowding out. true genius. And I think there's basically something like that going on, where everyone is so driven to sort of do well on the test, that that becomes their entire world. And that really worries me, I actually think that that push is responsible for stifling so much interesting stuff that could be happening. At the same time. I do think that for a lot of people, if they don't have some kind of overarching interests like that, and they don't have the sort of drive and interest and ability to do that, I do think taking a standardized test and trying to get into as good of a school as you can is a useful signal, whether we like it or not, that's still a good costly signal. Someone who went to Harvard, frankly, probably has demonstrated more attributes of likelihood, future success than someone who goes to, you know, random Community College. And I think we don't want to admit that because it feels yucky to say that, but these schools really are trying to sort on various qualities, you know, some of them are more like, are they likely to give money to our school in the future? But quite a few are actually things like, Are you smart? Are you hardworking. And so I think that college can be considered an acceptable default plan, if you don't have something specifically better to do. But I think that decision has to be more intentional. I think you have to actually look at your life and be like, No, college makes the most sense for me. And I don't think one should necessarily be structuring their childhood around getting into the best college, that seems like a level of back chaining that is very likely to destroy in childhood, the thing that we need to actually sort of move the world forward,

Will Eden 1:26:46

it makes a lot of sense, it makes a lot of sense. Give you a sense of why it has gotten so intense at the college level. I mean, this was, you know, that's not the case. You know, they pretty much let everybody into Harvard in 1920, that can pass an admissions test, you know, it's pretty hard, but you know, like, pretty much I could go it's, but this has completely changed in the last 100 years. Yeah,

Unknown Speaker 1:27:10

I mean, so I do think the costly signaling cascades can become a runaway selection effect, right? Where it has sort of hit a point where at least among certain strata of our society, you're considered a failure if you don't go to college, right. And anytime you have a system like that, it starts to become a really negative signal to not go, even if not going actually makes more sense. And it's actually better for you, it can hurt your life outcomes enough that you're sort of compelled to then try to go in and yeah. And so I do think that those are competitive dynamics that can that can happen. Do I think that that's all of what's going on, though, I don't think that could be all of it, there has to be some underlying logic behind it. And I do think some of it is that college has basically been pushed on a financial level, it's been pushed on a social level, it's been literally sponsored by the government, you can get subsidized student loans to go. Once you start to see systems like that in place, then I start to be like, okay, someone's been messing with something here. This is not a sort of purely natural phenomenon. So I think that's probably part of it. And then I actually think that I basically do by the narrative that a lot of the kind of economic system in like the post war era really started to kind of fall apart starting in the 70s. And if you look at so many different metrics, things either slowed down then or they started looking a lot worse then. And basically, I think what we're what we're hitting is a world where there's a lot more competition, for fewer sort of good outcomes in society. And in that case, I think you get a lot of parents who are seeing this and they feel economically precarious, right, they worry that their children are going to be worse off than them. And the one way to guarantee a good future for their children is you make them go to Harvard. I don't think that's true. But I think that's what's going on in people's heads. And so they are feeling like my duty as a parent, right, is to secure the future of my child. And the only way I can do that is by sending them to college. And to send them to college. It's so competitive, and it's so hard. We have to be doing practice SATs from the time they're seven. Right? And some some version of that I think has sort of clicked into place. Now. I am seeing forces that sort of counter this. I do think that the ability for people to you know, go to a coding bootcamp and then get a job, right. And I think the ability of folks who start a business themselves, these things have made it easier, and I think there are alternatives to college that are actually starting to look more viable. But we're only the very earliest stages of that, and I don't know whether that's like a population level solution.

Will Eden 1:30:05

Yeah, maybe it's like works on like these edges, right for, you know, these specific careers, maybe it's not enough for for everybody. So do you think it's something where like, you know, you've got this like total factor productivity slowdown, you know, there's less opportunities. People like rightly said something like this is going on. And so it's like, well, the best way you can kind of alleviate this as well, the most legible path is here, send your kid to Harvard. And so you do everything you can to get them there. Because that's kind of your duty. Yeah,

Unknown Speaker 1:30:32

I do think that's a lot of what's going on. That's really dark. But yeah, I think that's sorry, man. I mean, I think we kind of live in some dark times. So. And it's weird to right, because like, our our whole social narrative is that we're living in this era of just unrivaled wealth and prosperity. Yeah. And I think in certain ways, that absolutely is true. And yet, we don't see that reflected in people's behavior. We don't see that reflected in folks attitudes. And I think increasingly, we're seeing it not reflected in the economic realities on the ground, also. But I do think that, you know, there, there does still have to be this case of like, maybe we're all just sort of crazy. And life has never been better. Like that. That is a possible hypothesis that I haven't fully ruled out. And I should just mention that it's there, because it does have some good arguments behind it. But like, my felt sense, is like we're entering a more difficult period, and not a like unrivalled. Golden Era period.

Will Eden 1:31:38

Definitely. Well, I think you're, you're you're definitely on the money there. It's weird. Just just, if you look at the rates of like depression, how many people are on SSRIs? When people are like, very sad and lonely? And like, yeah, we're living in the best time in history. Like, why is everyone have to be on SSRIs? Like, I don't I'm divas make sense. Make sense? Right. Very Wait, what do you see any, like, you see bright lights out of like, our kind of general stagnation? Or is it just going to be like this long, slow slide of Deccan? It's, you know, for the next century or something?

Unknown Speaker 1:32:09

I mean, we've talked a little bit about that at the start, right, where there could be something that sort of snaps us out of our complacency. It's very hard to know what that is before that actually happens. And I do think that if things get bad enough, then that produces forces inside of society to attempt some kind of change, whether that's going to be a positive change or not. Sort of remains to be seen. I basically think that that forces society into high variance situations. And I know that sounds crazy to some people, maybe but I think the odds of like us devolving into some sort of like fascist state is not like tiny.

Will Eden 1:32:53

It's kind of a it's a rational response to like, extreme. Extreme, like, yeah, extreme bad times. That's generally how things go, right? I mean, no, I usually say like a democracy for long when things are going not so hot.

Unknown Speaker 1:33:02

Yeah, I think that it's easier to maintain a democracy as long as the pie is growing. And there's a lot of gains from trade. But if everyone rightly or wrongly sees the world as being zero sum, then all of a sudden, those sorts of deals don't look as good anymore. Because it's like, oh, well, this other person is just like, trying to screw me somehow. And once you don't have scope for cooperation, people start to fall back on force. And I worry that that's the direction things are heading. And I'm seeing more of a tendency towards No, we actually just have to force this thing through. I am seeing that from, from everybody. I don't think this is actually just like, oh, you know, the evil acts or the, you know, horrible why? No, I, I see everyone sort of going slowly, but steadily, a lot more crazy and a lot more zero sum and more violent. And I do worry that this is kind of going to be the overall trend, at least for a while until something turns things around, or it goes much worse. But it's very hard to predict those kinds of things. And something that I think a lot about is if I were living through the 60s and 70s, would I be seriously worried that the entire world is about to collapse? I think the answer is like maybe yeah. And like maybe we almost did. Like how how did we get through the Cold War without somebody nuking somebody? Very close. Really close. Yeah, it was multiple times. Right. So, you know, there could be some sort of weird anthropic argument for why like all of us are still here, and most universes were just some like smoking crater. Sure, as possible. I think we probably weren't as close as people think we were. But we can definitely see that with the benefit of hindsight. And I can just see a lot of ways that like that period of global upheaval could have gone so much worse than it did. And then that sort of naturally leads me to this question of like, well, okay, if we could pull through the 60s and 70s, which in an objective sense, were much more violent, much, much, much more violent than today. Yeah. And they managed to sort of get out of that. So it clearly seems like there are ways to turn society around, I don't think once you've sort of entered a downward spiral, that it's always a death spiral. The problem is that it's sometimes a death spiral. And you don't really know at the time which one you're in or not.

Will Eden 1:35:31

It Right, it's really difficult to tell like, you know, and you know, momentum matters, right. And these things like, that's what's kind of scary to me. It's like, yeah, it's hard to reverse trend with things like this,

Unknown Speaker 1:35:42

it seems like, totally, I think, I think the sort of analogies to Rome are somewhat overdone. But there were multiple points throughout the history of Rome, where you could argue that the whole system collapsed, or that the system successfully renewed itself and lasted a few more centuries. So the final time that it fell apart, it really did fully collapse, right, but seemed like it really was collapsing multiple times, and then it like revitalized itself into something arguably better, or at least arguably, more functional for a long time. And, you know, as folks like to say, there's a lot of Ruin in a nation. And it's really only easy to tell that you're in the terminal decline after the fact. You know, there are some fascinating letters from the period of the, you know, actual fall of the Roman Empire, where you have, you know, folks saying, like, yeah, the roads aren't really safe to travel right now. I'm hoping to visit you, you know, next year when things have settled down. Oh, yeah, well, obviously, that didn't happen, right. But even the people who are living through the fall at the exact moment, weren't even completely certain that it was over. And I do feel like there are just so many incidences of this, throughout history, so many times where there's been a massive social upheaval and outright revolution. Every time I look at these case studies, I'm like, damn, there were so many things wrong. And it seemed like there was this, like, tiny percent of the population that was basically parasitizing off of everyone else. And if they could have thrown them a bone, even like a tiny bone, they could have like, stayed at the top of the hierarchy, and, you know, like, ruled forever. And they just like, couldn't figure out that they were just a hair's breadth away from literally being beheaded. either. It's that inherently hard to figure out, or those dynamics that they were so locked into, right, were just so overwhelmingly powerful that they couldn't steer the ship differently, even though they knew they were headed for certain doom. It's very hard to tell after the fact, but definitely, at least contemporary writings in each of those cases, it seems like the people that were overthrown, really were pretty disconnected and didn't realize they were just about to be killed.

Will Eden 1:38:08

I'll give you this anecdote. You know, I'm from rural eastern North Carolina, I made a good amount of money on the betting on the 2016 election. Because, you know, I live in this very metropolitan area, now, highest concentrations of PhDs in the world are in my county. But I went back home, you know, like I talked to people house party, and the, the swing, like the differences in what people would tell you, and like, just how far apart I think the left and the right are at this point, it is like, it can't be, it can't be underestimated. Listen to how far apart it is when you actually go out like, you know, talking about with friends. And it's just like Holy mackerel, like, it is such a it's a bridge. It's just too far. Like I think people just actually just do not understand where we are at this point in time, because they they've just so separated between

Unknown Speaker 1:38:55

totally concur, man. And and it's not to say that people are living in two completely different worlds. The narratives are different, even when they think the facts are the same. The interpretations are so different, that there's no conversation. That's that's even possible. Sometimes. I find that absolutely mind blown. And then how do you come back from that? That's my question. How do you come back from that? is a true unity campaign actually possible?

Will Eden 1:39:25

I think Oprah is the only answer. That's the only answer I have. I say it's only one who I talked to, like I mentioned that everybody's like, cool with her. So you know. Well, you know, I have one more question for you along those lines. You worked at the Fed during 2008. And I really like Scott Sumner. And I read a lot of his work about, you know, how the Fed like just this was just, you know, didn't put enough money in the economy in 2008 could have prevented it, they didn't. What's your sense of that, like, you know, how competent is the technocracy that runs the Fed? What kind of things or money in the US? Is it pretty bad? Should I be more bearish than I am? Oh, boy, I'm pretty bearish. What's your thought?

Unknown Speaker 1:40:07

Yeah, man, we, we could do a whole podcast just on this one. So yeah. So here's what I'll say my experience having been there during the financial crisis is the people at the Fed genuinely didn't know what was going on or what to do. Which is fair, because literally none of us did. Right. I don't think I don't think there was anyone in the country who was extremely confident that things would play out how exactly they played out. So obviously, they have a very hard job. And what's expected of them is I think, actually beyond what's probably possible. Gotcha. Now that said, could they be doing better? Absolutely, yes. How competent? Do I think they are? I will also say, I don't fully agree with Scott Sumner either. Nice. I think if you are going to take a monetary policy paradigm, that's basically the same one that we've had for a very long time. Something like nominal GDP targeting, I think is probably the best target that the Fed could have. Gotcha. That said, Do I think we should be in this paradigm? Absolutely not? And do I think that the sort of people working at the Fed have have a good handle on both the broader economy, and the way that monetary policy affects the broader economy? I'm gonna say, No, I think for the most part, the Fed was undertaking actions that sort of looked good or theoretically made sense that they didn't have any really concrete model of how it was going to affect things. Gotcha. I do think some of the channels by which they're affecting things are real. But I do think that they, I think there's a lot of good Harding going on, which obviously makes a ton of sense, because this happens to everyone. But they basically are looking at, you know, a few key summary indicators, and then they're turning a few knobs. And those knobs are basically the Fed funds rate, and then how much quantitative easing they're doing, and of like, what type. And I don't think that they really thought through the transmission channel of how quantitative easing actually affected the economy. And I think if they really fully understood it, that probably isn't the road that they would have gone down. But in short, I think the whole paradigm of the Fed affecting the economy through fixing short term interest rates, to me just seems like a real, non starter in terms of what I think something like the Fed should be doing. Like, I don't understand why we think of federal bureaucracy should be deciding, like how much we'd rather have money today than tomorrow. Right? This seems like a fundamental aspect of humanity that we need to sort out with the market. Like the reason we have markets is to figure out how much people value one thing versus something else. And interest rates are just how much you value money now versus money later, why that should be the policy target has has always seemed totally crazy. To me.

Will Eden 1:43:04

It's bizarre, just just the way it is proud it What's your sense of why that is just the way they've been doing it for a while there's there's certain amount of momentum behind

Unknown Speaker 1:43:11

that. Yeah, there's historical stuff there. If you ask Friedman, he basically thinks, you know, well thought because he's now dead. But his point was, it's always like the quantity of money. And he always thought that the targeting of the interest rate was always just this proxy for how much money was in the system. And that was the only thing that mattered. And that was the actual lever that mattered. But they're, but they're pretending to themselves that, oh, we're changing the interest rate. And that's the thing that somehow matters. But it didn't used to always be that way. And for a while, like, under Paul Volcker, he basically let the rate just start floating and was really tightly controlling the quantity of money and you saw the rates spike like crazy. But now, when you look at Fed Funds rates, it's just as like step function, right? Basically, have the Fed just pegging what it's going to be. So clearly, we didn't always used to do monetary policy this way. And, and yet, that was sort of the tool that was settled on. And then during the financial crisis, like well, the rates of zero, we can't easily make the rate negative. That's a whole other separate conversation. Yeah. And they're like, Well, what do we do? And at the time, we were sort of looking around, we're like, Well, what other sort of historical precedents are there? What have folks tried, and we looked to the Bank of Japan, which had been buying bonds. And thus, quantitative easing in the US and Europe was born literally just by looking at what Japan had tried two decades ago, which, by the way, can didn't successfully get out of the crisis, right? They've had like zero growth and zero interest rates for multiple decades. But we're like, Hmm, let's try what Japan tried. It was shot so that was really it. And, you know, there were some more sort of innovative responses. But for the most part, the main policy lever that we ended up actually using was quantitative easing. And that turned out to really not have the effects on the broad economy and asset prices that were successfully predicted by the Fed in advance. And it just seems very, very clear that what quantitative easing has mostly done, it hasn't created inflation, it hasn't stimulated the economy, it's raised asset prices, right. And that's basically benefited a lot of people that were holding assets, and not really helped a lot of other people. And I think there's a lot of justifiable outrage at the Fed right now. And, like, look, I don't think they were doing it because they're trying to, you know, benefit the Wall Street cronies who are buddies and like, I don't think they were doing it, because they're trying to, you know, screw the common man, that like, they really genuinely wanted to just help people, they really genuinely want to just fix the situation. And it was the combination of lack of knowledge and hubris and not thinking things through and genuinely having no clue what to do. Like we we have to do something. Mindset, we got all those things, you sort of mix them together, and you get a policy response. That was pretty bad. And we're still living with that today. Like, why is the Fed buying a majority of newly issued mortgage backed securities? Why, like, no one can give a good answer for why they should be doing that right now. Yep. House prices are going absolutely bonkers right now. Right? Why is the Fed buying mortgages? Why is the Fed even in that business?

Will Eden 1:46:42

just bizarre. Just it's just very bizarre by when we find herself in and yeah, it's just a it just makes me wonder. Right. Like, I guess. So somewhat bullish on the fact that it seems like people, the pretty smart, pretty competent, you weren't working there. Right. So it's like, they're picking up smart people. But would we have been better off just, you know, letting it ride and not having done anything? 2008?

Unknown Speaker 1:47:05

Yeah, so this is a pretty contentious thing. I'm much more on the side of like, we had to just take our lumps up front and then recover. And if you do look at the history of the US, there were a couple of pretty, really deep recessions with basically no policy response, which bounced back really quickly. Now, you could argue that maybe the shape of the economy is different today. So that you wouldn't expect that to happen. Like, okay, I can I can maybe engaged in some of those arguments. But it's really hard not to look at, at the sort of whole history and think like, did we just maybe just kind of drag out this this whole thing somehow? So yeah, my, my, my sort of personal gut leaning is like, no bailouts take the pain, let's do this. The counter argument that I put somewhat weight on is that the entire system was designed around an implicit guarantee that the Fed would step in if things went wrong. And so do you basically want to like rub pull all of the players of this game who had sort of collectively agreed to play by certain rules? And I think that that's actually a harder question. And I don't think it's obvious. So what do you do in that case? Right. Can you credibly commit to doing a one time bailout for the people who were playing under these rules, but then tell them like, No, really? We're not? We'll never do it again. Yeah. Right. That seems hard to actually credibly commit to, but something like that maybe would be the like, theoretically best policy or something. But yeah, that was not a glorious chapter in our history. I'll say that about the best and it's just very clear that the Fed has failed to normalize policy ever since then. Which is again, absolutely bonkers.

Will Eden 1:48:47

Yeah, it's just just really bananas. Well, we'll run it up all time here. Do you mind if we do a quick round of overrated or underrated? Sure. Sounds good. Awesome. It's all throughout turnout. Give me a sense of why it's overrated. Underrated, or maybe correctly, right? cryonics. Overrated? Underrated,

Unknown Speaker 1:49:05

definitely underrated.

Will Eden 1:49:07

definitely underrated. Yeah. Excellent. Excellent. Are you signed up? Yep. Very cool. Very cool. Trump's effectiveness as a manager, overrated or underrated?

Unknown Speaker 1:49:16

vastly overrated

Will Eden 1:49:20

even by the people who love him, or

Unknown Speaker 1:49:22

hate him? Yes, gotcha. In some ways, especially about the people who hate him, they seem to assume that he was far more capable of executing some like crazy, big plan. Yeah. Then then then he actually was, I feel like the update should be either that like the presidency itself, or Trump specifically has way less power than anyone thought prior to that. And this really should be just as true of his fans as his papers. And if you just look at how, at least how the White House was managed, I don't have as good of a picture on how he managed his like Trump Empire, but I'm gonna guess It probably looks somewhat similar. But he, he had a very hard time bringing on good people. He had a really hard time keeping them there. And he had a lot of people under his management that were actively sabotaging him. So, In what world? Could you consider Trump to have been a good manager? It makes absolutely no sense to me. It's like one of the worst I've ever seen.

Will Eden 1:50:25

Is this perhaps a an exception to your rule about you know, companies needing really good, like effective leadership? It's like maybe like, if you're just such a good salesman, like you can dislike somehow make it?

Unknown Speaker 1:50:35

Well, I did say sales and leadership. I think those are different. Yeah. And, and I do think Trump is very good at sales. And he's not shown a really high degree of ability at leadership. Right? How many people are sort of inspired by Trump himself? I do think right around the time that he got elected, there was like a large Russia folks who are like, wow, this is our chance, we're gonna take back the White House, and we're super excited for this project and all this stuff. And that amounted to basically nothing. Yeah. So yeah, Trump is an excellent salesman. Is he a good leader? I just haven't seen evidence that that's true. I think that he was really good at figuring out that the broad US population was extremely annoyed at both parties. And that the rank and file member of the GOP felt very differently than the people in Congress did. And he spotted that, and he just like, blew that wide open. And I think in a certain way, that's actually a service, because I do think we should, in some sense, at least acknowledge the facts on the ground. And he was at least willing to say, like, Hey, we're in these unpopular wars that were pushed by, you know, a former Beloved, you know, GOP presidents. Yeah, like, the, like he said, the Iraq war was a mistake. And he waved around a rainbow flag, like he did all of these things that that a normal Republican politician sort of would never consider doing, ever. And the fact that that worked, and was popular, at least has showed us the way forward for what a different version of the Republican Party looks like. What's great, and the fact that there was this discrepancy between what the people wanted and what the party elites wanted, the fact that that at least now, those two are sort of closer together is probably a service to the country, if you like democracy as a form of government, because I think on the right at least people are getting more of what they want to see in their politicians.

Will Eden 1:52:42

Clothes that kind of arbitrage opportunity there. Yep. Cool. over any writer any burning man?

Unknown Speaker 1:52:49

Yeah, um, I still think by broad society at large, it is underrated. And among hardcore burners, probably slightly overrated, but not by very much. It's really cool. It's so much fun, and it's so beautiful. And it's just like, out of this world. It is an unbelievable, incredibly fun experience. And I do think pretty much everyone should at least try it.

Will Eden 1:53:18

Awesome. Awesome. Dartmouth, overrated or underrated?

Unknown Speaker 1:53:23

Yeah, um, I feel weird ever saying that an Ivy League school is underrated. But if we just restricted to among the Ivy's, I'm gonna say it's slightly underrated, it is obviously still considered to be a very, very good school. But I think that at Dartmouth in particular, there's more of an emphasis on trying to collect a little bit more of like a wilder spirit. Right? It is, yeah, it is more appealing to sort of outdoorsy type people who want to be in the middle of nowhere in an environment that is just objectively more harsh. I think, I think I think that that that is selecting for something real. And I think that the sort of different Ivy League grads actually have a little different feel towards them. And I think Dermot is is probably slightly underrated for that like Wilder personality who's maybe willing to do something sort of risky sort of crazy. Love that love that.

Will Eden 1:54:19

You had kowski is a wedding officiant overrated or underrated.

Unknown Speaker 1:54:23

Oh, man. That's tricky, because he's also said that he doesn't want to keep doing these. So I feel sort of bad suggesting like, hey, everyone should have him. Marry them when that's actually not possible. Yeah, unfortunately, only so many hours in a day. I'm really glad he did. And the reason that I'm glad is because he really felt like the sort of, sort of like elder figure of our community, and he's not even like that old. But he, you know, really felt like a sort of founder of like the modern rationality movement. And so having him there or, for me, it was basically like, that was that was like the way that our tribe could sort of, like, give us the strongest bond or something. Right. So, you know, I would say, yes, it's underrated. I mean, also, I will say he's a very good writer. And so I very much liked him doing our speech. And I think he did a really, really cool job there. And I like our vows. So yes, I would say underrated but unfortunately, you're probably not going to get him to do it again.

Will Eden 1:55:33

So it's a good backup career if he solves a lot longer than that. Libertarianism overrated or underrated?

Unknown Speaker 1:55:42

Oh, man, overrated by libertarians, underrated by the rest of society? Yeah, I mean, look, I think I think that you should use libertarianism as a good heuristic, and a good first pass. And the default that everyone should should move towards is don't intervene, and then come up with a really, really, really, really good reason, then maybe, but that should be the starting place. Definitely, definitely.

Will Eden 1:56:15

Weighing value taxes, Henry George, overrated or underrated?

Unknown Speaker 1:56:19

So I'm gonna say something very uncharacteristic of me. Oh, yeah. Which is I have actually honest to God not done enough of a deep dive to come to a firm conclusion on this one. I've heard the surface level arguments, and I see the fanaticism of the Chartists and I greatly admire simple solutions. And I am not yet willing to put my full weight behind it until I personally get more comfortable. Good stuff.

Will Eden 1:56:52

Good stuff. Well, we'll I'll send you some stuff. I'll tell you. Good heart, the good heart of good Harding. Yeah, wrote a paper a couple months ago, about how implementing single tax and us could increase GDP by like, 15%. But I'll send it to you, if you can, you can prove that I

Unknown Speaker 1:57:12

did in theory, and I want to understand it better.

Will Eden 1:57:15

Yes, you should be you should be skeptical. Someone says 15% of GDP. For anything. That's good. Totally. How to Win Friends and Influence People overrated or underrated?

Unknown Speaker 1:57:27

Yeah, it would be weird for me to say overrated given that I summarized it on my blog. But in terms of like, all of the books or movies that I've put out, it's really the one that I think about the least, and come back to the least and recommend people the least. So maybe it really is overrated? I think. So. So why I guess it, it was probably one of the first books that was ever sort of treating the social world as an explicit thing to sort of optimize. Interesting. And so from that perspective, I think it was ahead of its time. I mean, look, it's age well, and that the advice is fairly timeless. But do I consider it like a really good, how to manual where I see someone who's like, sort of shy or something, and I'm like, Hey, you should read How to Win Friends and Influence People. I sort of feel like I've come to the point where that's just never the the sort of suggestion that I go to ever, which suggested is probably overrated,

Will Eden 1:58:22

unfortunately. Makes sense. Well, maybe maybe there's something like said we're just treading new ground where people have never really done that before. And it was somewhat revolutionary in that sense, but now that everybody has a note kind of knows the common knowledge, just less effective. Yeah. Cool. Have one more fasting overrated or underrated?

Unknown Speaker 1:58:40

Hmm. So I think that intermittent fasting is fairly rated, however long fasting multiple days or even weeks is severely underrated. Really? Yeah. So me and my wife have both fasted for very long times. She's done a few weeks. I've done one month. Yeah. Yeah. Yeah, I fasted for a month, and it was super intense and awesome. I lost 28 and a half pounds. I believe. It's 30 days. Which, by the way, is how you can tell if you know someone who claims to be subsisting only on air isn't losing weight very rapidly. Someone is like sneaking them food or something. But um, yeah, no, I think that it is it is outside of the kind of Overton window of health recommendations today. Yeah, but if you look at it historically, it is a practice that has actually a fair number of historical adherence. There's a lot of precedent. It is interesting because, and I do have a short, a short post on my blog on this, but most of the world's religions had some kind of fasting tradition and it's been weakened over like Han Drinks of yours. And it's pretty interesting to see both of those. But it's very clear that fasting has always been considered something important, though it was largely framed in terms of spiritual importance rather than health importance. But I think that a lot of those old doctrines were actually sort of really helpful for the people who, like, actually use them because they were in fact secretly benefiting health. Right. And, and so I do think there is something to be said for the fact that fasting has showed up in so many places so many times, and so strongly. And in terms of the longer ones, there was a period actually in the US where we're folks were interested medically, in very long, supervised fasts. And there's a paper out there the longest fast ever was over a year long offseason. Yeah, the guy was grossly obese, he started over 400 pounds, and he ended up like a normal weight. absolutely wild. And basically, the medical community kind of moved on from this research. I don't I don't have the full backstory of why. But I will note that with a lot of the super long fasts, so it was common for them to do a 30 day fast, but they tend to define if you took someone obese fasted them for 30 days, they tend to regain weight over time. But if you fast them completely down to a healthy weight, which would sometimes take over a year, in one case, and many of these faster over like 200 days, those people tend to not to regain the weight. It's pretty interesting. So maybe there's some weird selection effect, maybe there's some profound biological effect, we don't really know. And it's not really been studied now. But I think some of why they stopped doing this is that unfortunately, in many of these cases, the people that were fasting were getting like weird biomarker readings, which you might expect, because they're in a profoundly different physiological state than we then were almost ever in. Yeah, they basically started trying to give them various like drugs and supplements and stuff to sort of like shift them back into, like, more normal numbers. A couple of the people that were doing over 200, they fast actually died. But as far as I can tell, they died because of the medicine that the doctors gave them. Oh, wow. So it is a little bit unclear. And I think the medical community basically shied away from this as a method of just pure weight loss. As far as I can tell, it's actually very effective. So this is one of those things, I think we're kind of, we see the modern mindset at work. It's like, well, it's effective, but it's maybe not safe. So we're not going to explore it.

Will Eden 2:02:40

Right? Did it get easier, you know, like into your mind? Or what was it like kind of a slog the whole time? Or do you get to Texas and just kind of roll through it?

Unknown Speaker 2:02:49

I should write up the whole thing on the one month long, fast, because it was very different than when I'd done one week long fasts. And it was interesting, because I definitely felt like there did hit a point around, I'd say about three weeks in Yeah, where I definitely started to feel like okay, this is becoming like actually sort of stressful on my body in a way that that sort of didn't feel as good. And if you do read some of the practical guides, written by people who have done monthlong fasts in the modern era, a lot of them do often report that there's this like, very different sort of feeling that comes on after a certain point. And maybe there is something sort of clicking with our bodies where it's like, okay, this, this made sense, but now I'm starting to dig into something vital, or something. I am not completely convinced I was in any actual health danger, and I did complete it. Right. But like, I definitely noticed the shift around three weeks in we're starting to feel more aversive than it was before that. Got

Will Eden 2:03:56

it. Very interesting. Very, very interesting. Yeah, yeah. So So outside of our norm, modern dorms today around like eating and stuff like that, which is really cool. Well, radically outside, right? Yeah, man. Wow. Well, well, thank you so much for taking the time today. I really appreciate it. I learned a ton. It's my pleasure. Where can people find your work? Where should we send them?

Unknown Speaker 2:04:21

Oh, man. Well, I do have a blog, but I so rarely updated. I'm hesitant to even suggest it. But you can also find me on Twitter, William A Eaton. And, yeah, it's hard to go into this much depth in one or two tweets. But you can find pithy snippets of wisdom and the occasional longer thread there as well. I love it. I

Will Eden 2:04:46

love it. Very cool. Well, thank you. Well, I really appreciate it and we'll have to have you on again soon.

Unknown Speaker 2:04:52

Sounds good. I look forward to it.

Will Eden 2:04:57

Special thanks to our sponsor, does mark and now Cisco for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives

Transcript:

Will Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Well, dealin How are you doing this morning?

Delian 0:42

Doing good, excited to you excited to chat today?

Will Jarvis 0:45

Absolutely. Thanks so much for taking the time to come on the show. I really appreciate it. Do you mind giving a brief bio and some of the big ideas you're interested in?

Delian 0:53

Sure. So you know, sort of a sped up version of my background. I was originally born in Bulgaria moved to the United States. My parents when I was you know, a kid, you know, kind of bounced around around the United States eventually ended up at MIT thinking that I was going to become an academic, instead of sort of took a hard left turn. And you know, after sophomore year, I ended up dropping out of school to make my way off to Silicon Valley, founded my first company which was like an enterprise healthcare company with you know, YC, summer 14 with it ran for about three and a half, four years, we kind of got to ramen profitability, but you know, sort of never grew fast enough to raise series A and then went off and became after either shutting down the company became the VP of growth at this company called Teespring, which is another YC company, and then ended up switching over to the investor side of things. I've been an investor now for about five years or so, first few years of that over at Khosla ventures with Vinod Khosla, and in the last three years or so, over here at Founders Fund, and mostly focused, you know, in those five years on investing in sort of seed Series A, and mostly in what I call, you know, sort of just everything but you know, boring software. So no consumer social, no enterprise, SAS, nothing like that. But everything from like, regulated industries like healthcare, tech, FinTech, InsurTech, you know, as well as a lot in the world of called Deep tack, you know, hardware, it's everything from like aerospace, industrial automation, robotics, home construction. And yeah, you know, I think, you know, one of the things that I really in some ways, you know, like about venture is that it's one of the few jobs where as an adult, you actually still get paid to, you know, continue to learn. And so, you know, over the course of, you know, my time in venture, I've gotten to, you know, dive into a variety of different fascinating areas. I think, partially from spending some time with you one of my primary mentors, Keith Raboy, who's also on the board of, or he's one of the founders of open door, I learned a lot about sort of the like, you know, real estate industry, and in particular, which is like, fascinated with how inefficient like single family home construction was. And so, you know, a couple years back, I was fascinated the idea of like, you know, why, you know, why is sort of, you know, our single family homes inflationary, but if you look at almost every other consumer goods, they're extremely deflationary. Right, phones, TVs, etc. And most of the reason being that, like, you know, most of the things that are deflationary have largely been produced on sort of automated, you know, assembly lines, and so why hasn't anybody taken a team approach, and done it with homes, turns out, you know, homes have a lot more skews in them, there's a little more difficult. And, you know, the thing is, a home is much more difficult to deliver, you know, fully finished. And so, you know, in like an automotive line, you know, when you're, you know, assembling a car, there's a few different sort of like sub assembly lines, and there's, you know, the sort of the final assembly in the line notice, like the general assembly line, you know, in homes, the general assembly line has happened on site in the middle of, you know, the outdoors, the wild Lido, sort of conditions can't happen on a factory floor. And so, there's a ton of different, you know, difficulties that come with that. And so, I ended up getting fascinated with that whole field that I got to invest in this company, you know, cover, which is based out in LA. And so it's been fun to, you know, see that, you know, as my, you know, fascinations shift over time, I'm able to, you know, then invest in the company and move on to the next fascination. So, you know, right now, it's been a lot of my time, you know, in aerospace, trying to think about, okay, how do you sort of, you know, take this infrastructure that, you know, honestly, mostly Elon has built, and, you know, that infrastructure being the equivalent of, you know, AWS in 2008. And, you know, now you've got this great infrastructure, you don't have to build your own data centers, what are the interesting, you know, applications you can do on top of it, and you don't have to build your own data center, ie on rocket and so working on that myself, you know, in the space manufacturing world in Florida, but then, you know, also excited to be investing in companies like Hadrian, impulse space, other people's sort of building on top of that infrastructure to provide those next generation use cases. One of the other areas that I'm particularly fascinated by right now, in particular, because I'm sort of in the thick of it, you know, myself is the world of sort of like IVF, fertility, surrogacy, you know, how to sort of encourage, you know, the replacement rates of, you know, Western countries not being below two, you know, right now, the, you know, average, you know, child rearing rates in the United States is actually below you know, our death rates and so, really fascinated by you know, the various companies that are working on trying to, you know, make that easier, everything from you know, obviously, poster child being born and, you know, the homeschooling world, all the way back to you know, embryonic Uh, you know, sequencing polygenic risk scoring, you know, surrogacy, you know, brokers, you know, IVF facilities. And so that's one area that I'm spending the least amount of time on. So, yeah, it's a multi varied, you know, interest in areas that are like, you know, diving into, but I like the things that are, you know, sort of the things that actually you know, shape society, but are either super inefficient and, you know, now everything from you know, housing costs to, you know, babies are probably the current fascinations.

Will Jarvis 5:28

That's great. That's great. I'm curious, how do you pick, you know, Eric, problem areas to explore? Is it just you look at, it's like a top down approach, where you look at the biggest problems facing humanity right now, you know, like, our tea, like, we were below replacement in the West, or like, housing prices, just insane explosion in the price of housing in the US? Do you just see a problem and then go down and try and figure out why and where people are building solutions? Or is it just more ad hoc you like, you see a company? Okay, like, wow, that's super interesting. Let's go investigate, and then you go up to the broader problem.

Delian 6:00

Yeah, I think I think I tend to be more of like a bottoms up thinker than a, you know, tops down, you know, I think there are people in the world, you know, how people even at my firm would say, like, you know, Peter Thiel is the world are very much top down macro, you know, under, you know, sort of provide these general and overarching, you know, frameworks to think about the world. And I think I take a very sort of opposite approach with just like, how I get fascinated with problems, and you know, where you know, where you gravitate towards, in that, you know, in the world of like, you know, IVF, fertility, etc, is mostly just like myself going through the process, as a user, you know, is the fascination with, you know, home construction, it was honestly just like, you know, seeing, you know, John Jaffe from winnaar, he's the president of winnaar, which is, you know, the largest home builder in the United States. And you know, him, you know, talking about, you know, how they construct homes, the difficulties of that, and then, you know, I think it's, you know, I sort of get these, like, you know, brain worms in my head, where I'm like, oh, that's, like, super interesting. And then I end up spending, like, the next three weeks talking to every single like homebuilding, you know, expert, digging into, you know, every single company. So, I'd say it's a little bit more, you know, bottoms up, add curiosity, I can't just help but you know, scratch, you know, scratch the itch. And sometimes I get an itch. And it's like, it's not that interesting of a solution. And like, you know, yeah, they're like, you know, that integral problem, were something that can actually be faked. And sometimes you ended up discovering, like, Oh, my God, this is actually like, a really big problem. And people are kind of talking about it, but like, you know, not nearly enough. So I'd say like, you know, fertility is one of those things. But as you can see, like, for example, Elon has not tweeted, I think, like, twice in the past, like six months about, like, you know, people needing to have more kids, they just feel like it's starting to get a little bit more attention. But, you know, even a year or two ago, it still felt like one of these topics that was, you know, under discussed it that, you know, sort of Western fertility rate?

Will Jarvis 7:32

Absolutely. It seems like, you know, there are a lot of problems like this that just go completely unnoticed in society. I just had an academic on from Ai yesterday, who works on this, this crazy fact that 7 million US American men don't have a job or in education aren't doing anything. And they're just, like, completely ignored. Like, no one's talking about this, like this huge, like problem. I'm curious, how do you get up to speed in an area? Do you have like, a systemic process? Where you like, call an expert first? And then you like? Or is it just like, trying to do research on the internet in the beginning? And then it's finding experts? Or is it just completely ad hoc? And it just depends?

Delian 8:04

Yeah, I think, you know, I, I don't have an infinite set of data points on you know, how I've succeeded in doing this, you know, aerospace probably being the you know, only one as far where I'd you know, comfortably say that I have a very good understanding of the entire sort of aerospace industry ecosystem, you know, what the upcoming business models are, and if I sort of reverse engineer how I came about, and it was mostly just, like, spending lots of time with smart people in person, right, you know, I think, yeah, there's some amount of like, you know, reading online, or, you know, some amount of like, you know, textbooks, but like, that was not what the majority of the interesting insights came from, it was ultimately just like, going to a lot of aerospace conferences, practically reaching out to and speaking to a lot of different like, aerospace CEOs. And just like spending time around people that, you know, thought really deeply you know, about the industry. And it's fascinating sometimes how, like, even people within the industry don't take the time to survey their own industry. Right. You know, I think it was surprising to me that like very rapidly, I became more well networked in aerospace than people that were even like working very practically in aerospace, because it just wasn't their core focus, their core focus was just like execution versus I was like, very practically, you know, going out to you know, try and you know, sort of meet everyone learn about their, you know, philosophies how they thought about, you know, the industry and eventually end up liking amalgamating and sort of higher level view where you've kind of, you know, seeing, seeing everybody in it. And so, yeah, I'm pretty, you know, obsessive with the fact that, you know, right now, you know, diving into even some of these new areas, right. IVF, fertility life sciences, and like, my first thing is just like, Okay, who are the experts that I can talk to you? What are the conferences that I can go to, and just like, you know, start to inundate myself and learn, you know, via osmosis. So, I think much more of, you know, I don't know what the right thing is, you know, it's not as verbal as a visual etcetera, learner. I'm like a like, you know, visual osmosis learner like, you know, the way that I learned the best is like, having an expert walk me through their paper, like I can go read the paper and yes, I'd like you to absorb some of that. But being able to like live q&a like basically like you know, with the author is always fun, much more fascinating. And I think people under appreciate if you just like, have a like, you know, very inquisitive mind and, you know, clearly written sort of cool Little email that explains why you're excited to chat with them. Almost anybody in the world we're like, you know, hop on the phone with you and, you know, walk you through, you know what they're up to. They're just like, so like, you know, people love explaining their work, right? You know, this may be being a perfect example, right? I'm always happy to hop on a podcast and explain what I'm up to. Turns out, you know, even the, you know, top IVF researcher in the world is happy to do the same, because people very rarely are, you know, interested and curious about their work. And, you know, dig up, you know, their papers.

Will Jarvis 10:25

That's great. That's great. And that is my motivation for starting the podcast and beginning. I'm curious, does that experience make you bearish on remote?

Delian 10:34

Oh, yeah, extremely sad. I mean, I think it's just hard, you know, some of these conversations require some level of like, meandering, you know, where, and just like, you know, spontaneous, you know, connections. And I think it's just really hard. Like, you know, if I were to recreate that airspace thing, you know, airspace, let's say, like, you know, osmosis period, and I did it entirely remotely, it's not the same, it's, it feels so much more artificial words, like, Hey, I would like to, like hop on a, like, 30 minute zoom call with you, within the Zoom call, like, needs to have a particular topic or something versus like, just sitting down at a conference and like, you know, grabbing lunch and and this person comes over, then this person comes over, and you just kind of, you know, absorb and, you know, listen, I think it just like really, really hard to create that sort of experience. It's actually why I think in particular, that like, you know, World of remote actually hampers people earlier in their career the most because like, if you're sort of mid stage, and you're like a VP of product at like XYZ company, at that point, like, you know, you may not be actually interested in like building up your skill set anymore, you're just like, pure execution mode. So yeah, it's great for like, the VP of product that's 32 married has two kids, like remote, I totally understand why somebody like that would absolutely love remote. But like the hyper ambitious, 24 year old, like really wants to learn from them, man, it kind of sucks reporting to that VP of product, cuz like, you don't get as much of the spontaneous interaction. And, you know, if you're the hyper curious, you know, whatever, you know, 20, whatever I am, you know, nine year old or I don't remember how old I am 28 year old, you know, venture capitalist that wants to, you know, keep learning via these types of, you know, spontaneous osmosis interactions. You know, I think it's, you know, I think it's tough to do that, you know, remotely, to speak of the devil I am, you know, in an in person office right now at ramp, you know, in New York, and surrounded by budget, you know, 20, you know, I read those 21 to 28 year old, hyper ambitious software engineers, product managers, you know, product operations, folks that are just outside of this office. And, you know, I can tell you, these folks are moving a lot faster and learn a lot, a lot more than people that are trying to do the same thing over zoom.

Will Jarvis 12:24

Definitely. Well, it definitely seems like there's a lot of legibility problems, right. You know, like the, the problems you're working on, often are difficult to describe and much easier to to kind of understand a person it seems like I'm curious if with Varda, was it a top down approach as an or was it like a, you know, I want to build a company, a space company, then I'm gonna go out and figure out what you know, what's the best problem I can solve? Or was it you know, maybe I know, manufacturing space, is this huge 25 on the sidewalk? I just need to go get that idea.

Delian 12:54

No, yeah, it's very much either the ladder and it wasn't even like, let's say, like a vetting of the idea. I've been thinking of the idea for like, almost a decade before pulling the trigger on it. It was actually in q4, 2019, q1 20. before even starting BARDA, I was so convinced that there's an opportunity here that actually spent most of those two quarters, talking to everybody that was working on the problem. And there were a variety of different sort of, like, what I'd call more academic type groups, that had been either publishing papers on it doing small scale experiments on the ISS. And I was actually hoping to invest in one of those groups. And ideally help them scale their work beyond the ISS and a much more sort of a commercial venture, scalable, you know, fashion, but you know, unfortunately, just like could not, you find a team that was excited by slash team knows excited to actually take that sort of ambitious, more risky approach of moving off of the ISS, and potentially not necessarily just relying, you know, a NASA unit for funding. And so actually originally put the idea back on the shelf once COVID hit. And then, you know, as we were sort of in the summer post COVID, summer 2020 was realizing, man, I still am, like, really excited about this idea. And, you know, honestly, more had zero interest in starting a company again, like I had a lot of, you know, PTSD and frustrations from my, you know, first go round, realizing that, you know, maybe I wasn't the best suited to be the CEO of a company. And so, if anything, it was extreme, you know, definitely not like, I want to start a company, and let me go figure out what to work on. It was more like, Man, I'm so obsessed with this idea. And it bugs me that nobody's doing it correctly. And like, f**k, the one thing in the world that I really don't want to do is start a company. But like, if this is the only way to solve it, and like, you know, maybe I will, but only if I like put together the perfect founding team, the perfect financing and cap table, and like, have it ready to go. And I remember thinking at the beginning of the summer, like, you know, you know, June July 2020, I was like, there's just no way that like, I lined all these things up, like it's COVID it's gonna be impossible to do this. I didn't buy like, you know, December, I had the perfect founding team, I had the perfect you know, financing lined up, etc. And I remember thinking I was like, it feels like, I'm like looking down the double barrel of a shotgun. And I know how painful it is to blow my brains out and blow my brains out before and yet again, I'm choosing to pull the trigger and say yeah, here I am, you know, a year and a half later with my brain splattered against the wall and like, Why the f**k did I Do it. But some problems are worth splatting your brain against the wall for?

Will Jarvis 15:04

Absolutely, absolutely they are. Do you think of on the margin more founders should wait until it's like, man, like I cried, like, I just have to do this instead of like trying to put a square peg in a round hole.

Delian 15:15

Yeah, I mean, this is a classic feedback that I give, you know, especially to like younger founders that are like, ah, you know, I've gotten this, they have this, like, you know, and I had this too, I had this like, mental image of like, oh, I need to be a founder, because I'm like, feel like status or respect, or, like, you know, the access that you got to either certain individuals or being able to, like, you know, talk about, you know, the fact you fundraise, and it's just like, you know, that was partially why my first company failed. This was like, ultimately, a problem that I wasn't sort of deeply, deeply passionate about. And that was sort of the promise that I made to myself after my first company was, you know, the only you know, if I would ever do this, again, in the future, it needs to be a problem that is like, so brain warmed in my head that I know that no matter what happens, if you chop it, like, you know, feed off, you know, make it to that, like, you know, I have to spend every game down in my bank account, I'm going to care about this problem so much, they were like, still do it. And for a long time, I just, I thought I was like, it's no such problem exists, you know what I mean? But it was that, like, exploration of space manufacturing is an investment thesis and then noodling on it over the summer. I remember, there's actually, you know, funnily enough, the way that it sort of transitioned from, you know, idea in my head to Oh, f**k I might need to start a company to do this was, it was actually like, probably, like, May or June 2020. And I can like, dig up the tweet, but it was effectively like, you know, drawing this correlation between, like, you know, the government is printing s**t tons of money, that means, you know, interest rates are going like crazy, crazy, low cost of capital is effectively zero. Now, it's probably the best time in human history effectively, to like, start a deeply, you know, capital intensive deep tech company, especially in aerospace. I remember like, I tweeted that, and I was like, off fog, like, you know, I gotta, you know, go do this idea. Because like, it's really like the right time to do the idea because like, Falcon nine is reusable and starship is coming online and like the capital environment are like, perfect right now to basically start this type of idea. So yeah, I think more founders should take this approach of like, you should be like, you know, begging yourself to, like, find a solution to the problem that you want to solve that isn't starting a company. And if and only if the only way to solve that problem is to like start a company, then once you do it, the people that take this approach of like, oh, man, I got to start a company for starting a company sake, those people all end up like you're depressed three years in, because it's like, even if your company isn't successful, your work, you're gonna make some boring enterprise SAS thing you can give like zero s***s about the promise that the moment you hit any single moment to like adversity, you just, you know, you know, surrender at the first you know, you know, you know, fire from the enemy. And so, yeah, there's just so many examples of this, just like, you know, even if the first three years, four years are easy, because you chose that like, hot new web three, SAS, social, blah, blah, blah. No company is like smooth sailing all the way through. And so then you're, you know, Ryan Breslow, you know, quitting at the 20 12 billion valuation, just when the going gets tough. And like, you know, that's, that's not what ends up, you know, making you a top tier entrepreneur in the long term. Yeah, you got to stick it out. Absolutely. And it's only fun to stick it out if it's a problem you really believe in?

Will Jarvis 18:02

That's right. That's great. I'm curious, what do you see is the biggest bottleneck, you know, you work in venture so you get a good view on this? What's the biggest bottleneck to getting more breakout companies? Is it you know, capital? Is it like, smart founders working on the right problems? Like Like, what do you what's your sense of that?

Delian 18:20

I actually believe in I think this was Sam Altman did tweeting about this a lot lately, but I'd have to go back and look, but it's basically just like a lack of, like, people who have been trained with high agency, like, you know, I think, yeah, there is a significant under appreciation, by, you know, call it with some level of like, intellect, network, you know, access to capital, etc, under appreciation of like, how much agency that gives you in the ability to, like, manipulate the world to the future that you want to, you know, see, and I think that's what's mostly lacking, like, it's not for a lack of like, Stanford educated computer science grads, there's like a semi infinite number of those, I could probably throw a dart, you know, off, like this office building here. And I'd probably hit a Stanford CS grad, there's definitely not a lack of that. Definitely not a lack of capital. There's still like, even with, you know, the current public markets, there's still like semi infinite capital, if you have, like, you know, the right ideas. And so, you know, I think it mostly comes to just like this, like sense of, you know, agency of, you know, tackling, you know, a hyper ambitious problem with just like the, you know, right, you know, skill set founding team approach. That to me is like sort of like the lacking founders is the lacking factor is these like, you know, sort of high you know, agency you know, founders that are you know, tackling something you know, sort of truly, truly ambition is not you know, an incremental you know, whatever SAS for you know, plumbers type thing.

Will Jarvis 19:44

Do you think that's something we can perhaps modify, like, you know, encourage people to have more agency give them some kind of hero license, because you've found one right with Varta. So there maybe there's some process or maybe this could just be inbuilt. You could just like you'd be a high agency person or something.

Delian 20:00

Yeah, no, I, you know, I don't I don't think that I had some sort of natural predisposition to agency. I do think that this was something that was either coached into me encouraged into me, or just the fact that, you know, I, you know, spent got to spend time early in my career with very high agency people, you know, I think, you know, and I don't know what the right way to, like, you know, scale their approaches, because like, by default, the whole point of this is that there's like, a lack or a scarcity in hygiene people. And so if the only way to scale it is as most other hygiene people that obviously it's like a relatively limited function. But you know, as an example, you know, I kind of skimmed over this in my, you know, original sort of bio introduction, but actually, my very first job in Silicon Valley was December of 2012, being an intern at Square, and part of why even prioritize Square was like, you know, it's not that I was, like, particularly passionate about, like, you know, you know, mobile payments for, you know, cafes, I was particularly passionate about, like working with Jack Dorsey, you know, and this was in 2000, Paul before, like, Jack is who Jack is today, you know, back then it was clearly it was like a top tier, you know, entrepreneur, but a much more, you know, controversial figure. But I was just so fascinated by the idea of like, I wanted to work with somebody like him, right. And at the time, there wasn't like, you know, Elon was still under the radar, but it's much like, you know, maybe I just wasn't as fascinated him at the time, but I think I want to work with this, like, magnetic, super clearly super high agency, you know, individual. And so I guess, like, I was, you know, attracted to agency. And so maybe the way that we would like, you know, steel it is making, you know, if anything, like maybe people criticize the glorification of like, you know, founders in today's day and age, and I do agree that it's like, okay, yeah, maybe people over glorify the DOM Hollins of the world that like, you know, are phenomenal fundraisers, but you know, I wouldn't necessarily say they're phenomenal, you know, operators, how you maybe make it a bit like young people, glorify high agency, you know, people that would be like the way to scale it up, because then more of them will want to go work near those hygiene people and then they themselves become heightened TVI osmosis, but I think a like alternative path, DeLeon, that would maybe was just as smart, just as much access to capital, you know, I was still in Silicon Valley, but I was not exposed to like Jack Dorsey, and then Keith Raboy. And then, you know, Sam Altman, etc, are these people that are described as like super high energy people that were like, extremely influential, you know, all three of them in my career from ages, like, literally, you know, I was working at square when I like, just barely turned 18 I was like, you know, 18, and five months or whatever, right, you know, old, all the way through to, you know, starting Varta at age, you know, whatever, roughly, you know, 2626 and a half those like, you know, eight years, I had, like, semi constant exposure, you know, to those, you know, three, you know, individuals all of whom are described as, like, extremely high agency. And so when you have these, you know, sort of mentors, that you clearly see are able to, like, Will something into the world, right? Like, you know, maybe, you know, Keith being obviously you might, you know, closest mentor, you know, I got to know him basically summer of 2012, when I was working at Square and he was a COO, when, when I was an intern at Square, and he was a COO at Square. And so I got to know him from literally like, the like, ideation moment of open door, through now, obviously, you know, open door being a, you know, in my opinion, very successful, you know, public company, I think maybe underappreciated by the public markets, but I think that will shift over time. And that was literally just like, completely, like, you know, there was no happenstance, there was no like, Oh, these two founders accidentally, like, you know, Matt, etc. It was like, No, he liked it, he was like, this is the thing, I need to, like, construct this, you know, into existence. And, you know, literally willed it into existence and force it into existence, when it may not have like, there's zero chance that it would have existed or succeeded otherwise, like, there were like, other people working on things like, you know, open door, when you open door, it, you know, came together, and it's, you see that you're like, okay, like, I can, you know, I think I could do that, like, you know, it's not easy, you know, for sure, like, but like, follow the formula, it's just like, Yeah, you know, really believe in an idea. Think about what the ideal founding team needs to be hunt those people down, convinced them that they shouldn't, you know, work on this, like, he'd spent, you know, almost like, I think like four or five years, sort of, you know, one he worked on, like the original idea of open door, like two dozen three, called home run, realize that the time it cost capital is too expensive, couldn't actually approach him. But then even the ultimate CEO of open door, Eric, who he'd actually like, tried to recruit for the CEO of Open Door role three or four years prior, and, you know, didn't actually either succeed, either it was only the second time around of like, recruiting Eric, that he actually managed to, you know, convince him to work on open doors, it was one of these things that like, he clearly just persisted on, just like, you know, trying to, you know, willing to reality. So, it's like, when you when you experienced that up front and up close, you just like, it is very possible to willed things into the world through like, you know, against your sort of willpower and so that just made me very convinced that I was like, I can do the same thing with Varta when I like Will this in existence, and it's gonna be painful and take a lot of effort I'm gonna have to like you know, hunt down the exact right people, but it is definitely like, you know, not impossible anyways, very long winded answer to I think osmosis to other hygiene people is probably the right way to to get them into the youngins if they can do the same.

Will Jarvis 24:58

So perhaps, you know, different gonna solve it at the macro level at the micro level, in your career, if you're a young person, should you try and select, you know, the people going to work for for agency, less than trying to select, you know, whether this company is going to be successful in the long term you think that's the kind of an easier metric to select on?

Delian 25:16

Yeah, I think like, you know, I think if there's one mistake that I sometimes see people make early in their career is that they like over optimize, you know, for what is sort of the hot new thing or the status etc, as opposed to I think over, you know, what I would generally optimize for, which is just like osmosis, from high agency, highly successful people, because, like, you know, as an example, like the first like, you know, two years or so of like, working closely with Keith, you know, not in the square days when I started my own company, but when I actually originally joined Khosla ventures as Chief of Staff, we're not particularly like, high status role, like, you know, the thing that I, you know, was joking about with, like, a founder the other day is, like, you know, I mean, parts of that role, were very fond of, like, you know, getting to observe, you know, Max Levchin at a firm board meetings now, again, I was a fly on the wall, but like, getting to observe that was like, such a, like, you know, honor in some ways, like, the greatest entrepreneur of our time, and I got to watch, like, how he was running his company, but like, the less glorious aspects were, like, I just f*****g, you know, deliver the Diet Coke during this board meeting, Sue. So it's like, you know, you know, like, first it's, like, formally the founder, up on, like, you know, YC Demo Day, and now, all of a sudden, you got to deliver the goddamn game. You know, sometimes I think it's like, you got a little bit, you know, sacrifice the ego, you know, in exchange for, you know, the, you know, osmosis. And so I think that's the mistake that sometimes you will make is the like, and I and I was there. I mean, like, I was the like, why CTL, Telmo founder dropout, you know, had extreme ego and age, you know, 18 through 21. And then, you know, at some point, you know, I wish I'd been, you know, self aware enough that I was like, you know, practically sacrificing it. But it was more than just like, I fucked up so badly that I was like, Well, clearly, I probably shouldn't have much of an ego, given that my company failed.

Will Jarvis 26:53

Good stuff. So it's, that's very practical advice is like, go find the high agency people do what you can work for him help in whatever way you can, and exactly go from there. Good stuff. This is a bit of a left hand turn. But I'm curious at the macro level, do you think venture you know, when you make a venture investment? How much are you thinking about future fungibility ability? So like, to what extent is venture like a Keynesian beauty contest where you have to worry about, you know, not only like, can these people build this? And will the market buy it? But will future funders be able to like provide capital this? Or is it just too weird that they won't do it? And I'm sure like with some of your work, like with IVF, artificial wombs, etc, they may fall in these kinds of categories.

Delian 27:33

Yeah, you know, a couple different frames that you can take to answering either that question, you know, one of the things that, you know, we definitely need to think about at Founders Fund and is like, the sometimes, you know, primary question that we ask, when investing in a company, is, why will we uniquely appreciate this, and almost every other investor will not, right, it's a, you know, maybe, you know, more specific way of asking the like, how is this contrarian effectively, you know, question. Now, however, the critical part of that is that, eventually, for a company to be successful, it must transition from contrarian to consensus, from when it transitions from an early stage to a late stage company, right. And that is the only way to be successful, right. So every successful company at the late stage is a consensus, late stage successful company, where the most returns are made are contrarian, early stage companies. Now, that doesn't necessarily mean that consensus, early stage companies can't be successful, too. There are plenty of examples in Silicon Valley, where a company was effectively consensus from, like, the earliest stages, all the way through, it's just hard to make as many returns on those because typically, that means that it's like, you know, highly competitive, you know, even you know, from the earliest, you know, financing rounds. So, is it, you know, is it something that, you know, you need to think about? Absolutely, because if it is, you know, contrarian enough that it can never get, you know, sort of future, you know, financing, then it can never become the consensus, you know, late stage company. So, it's something that, you know, absolutely you think about in practice, let's say, you know, for myself, for the last two years, I've tried to take a little bit of like, the two ends of the barbell, you know, you know, curve approach, you know, to investing that I think is, at least, you know, so far we'll see, maybe this is me being a bit naive into the early days of a potential downturn. But over the past few years, I've started taking two ends of the bell curve approach. On one end, I've done the like highly speculative moonshot, deep tech, but largely focused on like, you know, aerospace type investing, right, you know, probably, you know, the biggest units or two positions being like Florida, Hadrian as examples right now in this like, you know, current, you know, you know, recessionary you know, environment, they're actually still largely experiencing, you know, tailwinds partially because we're going through you know, expanding defense budgets, you know, the Ukraine Russia situation and a lot of the you know, customers for those two customers, you know, companies being in DOD, aerospace etc is largely you know, being fine. So, what I thought about those companies that downstream investors, I was like, Okay, these are things where like, the downstream investors I think, will appreciate these companies because the like, you know, customers that they will be after will be, you know, relatively will have, you know, run To eat, you know, larger budgets actually than expected. And then on the flip side, I invested in a bunch of companies that just had like, you know, great financials, even if they like, on the surface kind of have you know, warts because they had like some hardware or some regulation or is like something that like, and brushes wouldn't appreciate. And in the early stages, but as the company got later, if you just exam with the financial profile, they were quite attractive. And so there's a handful of, you know, it's a two to three sort of, you know, series A's that I did, you know, sort of last year, the two that are least public are standing in this, like soil analysis thing. And it's company, Lulu, which is like this InsurTech thing, anyways, both having, you know, the first soil analysis having some, you know, interesting hardware and market dynamics, the second one having a little bit, you know, regulatory, you know, dynamics, you know, but both of those are examples where it's like, you know, again, I think contrarian, you know, at the time, in that, you know, people were like, ah, you know, these companies do have revenue, the book companies were, like, caught, like, even 3 million of ARR. But, you know, we're not getting priced at, you know, whatever, a billion posts, like everybody else was, because they had these, like, you know, warts on them, they're getting priced relatively reasonably, but now, as they're getting later stage, people are just examining financial profile, they're like, well, irrespective of the words in them, look, they are, like, you know, quite, you know, financially, you know, efficient, you know, versus, you know, I think where people got a little bit, you know, tripped up over the past year is like, you know, sort of, you know, funding these 100x, you know, 110x, you know, SAS Arr, you know, businesses are not thinking through the downstream, you know, financing, I, okay, well, at some point, some investor is going to have to invest in this in the future? And are these 100x multiples going to, you know, sort of like last, you know, indefinitely, probably not into, you know, their, you know, sort of much, you know, trickier spot with those investments in those companies. And so, no, yeah, absolutely, there is a little bit of like a, you know, whatever you want to call it, you know, Russian doll effect of like, you absolutely need to be thinking through, you know, what are the, you know, downstream, you know, financing risks. And I think, you know, a lot of investors became particularly blind to that, over the past few years, where there's this sort of assumption that, like, you know, in the past few years, if you had a tarp to your fun lead your seed, it basically meant that you were, like, guaranteed that like another top tier fund within your series A within like, a year effectively. And so people started to ignore the potential, you know, downstream findings. aggress. So, again, you know, maybe I'm being naive, and, you know, I'm gonna have a bunch of failures in the portfolio. But you know, at least so far, you know, relative to peers, I think, partially because of the approach that I took over the last few years. I don't think, you know, I don't think the things that I've been working on have been, you know, hit nearly as hard.

Will Jarvis 32:14

That's great. And going off this question, this is a little bit complicated. But do you think brand really matters in venture more than than people realize? And does that explains it? Because it lets you worry less about future future financing? In other words, and does this explain why top tier firms do a lot better than all the other firms is something like where because, you know, founders find you put in the seed round Series A, they're like, well, that's a positive signal that this is probably a good investment, does that make sense?

Delian 32:44

100% These things are, you know, venture is very much, you know, a, the rich get richer, you know, type of game, in that, you know, even as an individual, like, when you start off in investing, if you don't have a hit sort of in your first like, three to five investments, it just gets really a lot more painful to actually ever have a, you know, a hit in the future. Because, like, you start to experience a lot of like, you know, molasses and difficulty, but the further you're at will start to question each individual, you know, future investment more founders will be like lessons and working with you, because it's like, well, there's no like, you know, positive signaling that comes with it, let alone like on a firm basis, and it's a combination of like, a multitude of factors, it's not just that, like, future investors will, you know, be more interested in likely to invest in the company, but it's also literally that it allows the, like, founder to operate more successfully, because even candidates pay a lot more attention to it, right? Like, the classic feedback that I always give to candidates that are on the market is like, you know, don't try and, you know, choose which company is best, you know, because like, you're not a full time investor, I you know, the goal of a search should be, you know, optimizing ideally for you know, upside in that, you know, company that you choose. But optimizing upside is kind of the investors job, it's always not you as the job market. It's the easiest way, just like choose what the top two your investors are investing in and go work at one of those. Well, on the flip side, as a founder, that makes us that if I take a top to your investors, capital, it makes it so that hiring is much easier, hiring being much easier, then allows me to execute much more easily executing much more easily than does allow for the downstream financing to be much easier. Now, should that be the case? Is that fair? Is that the way that the world should work? Does it f*****g matter? Like that is just the way that you know, the world works. And so I think it's one of the things that, you know, makes me very grateful to work in a place like Founders Fund where the alternative or the, you know, parallel reality where Deleon was, you know, either, you know, solo capitalist or working not at a Founders Fund, but still is interested in the same things meeting with the same founders. It's one not clear that like, I would have been able to win the same deals, too, it's not clear that those companies that I did invest in would be as successful because they would have lacked, like the brand halo effect. And so, you know, I definitely am both very grateful to be working at a fund like Founders Fund, but also like, I think a lot of people that are entering into the venture ecosystem under you know, appreciate the like, benefited and advantage. You know, I think a lot of people make the wrong call of, you know, if you have, let's say, an offer that is like an associate role at a tier one fund versus like a partner role at a tier two fund, if you actually are optimizing for like the Long term, if you rent your career, it's pretty rare that like the partner role that's here to fund is actually going to, you know, have the better outcome. It's not impossible, but you're just making like a sort of much, much, you know, sort of more more difficult. Because I think a lot of people do under appreciate this sort of like dynamics of the rich get richer in, in venture.

Will Jarvis 35:18

Absolutely. Is it your sense that founders underrate the value of brand from top to your ventures are overrated or just kind of properly rated at this point?

Delian 35:27

I think founders correctly rated, but I think founders are unaware or have a little bit of a lagging sense of what the brands are in that like, you know, the, as an investor on the inside, it's very clear, which firms are performing, which are not who is who is not who is helpful, because we just have much we're in the market at all times, right, we are hearing about these rounds happening, this happening, this company exploding, this board number being a pain in the ass to work with, etc. So we have much more like perfect information, the stuff only makes it you know, public, sometimes, you know, a year and a half, two years later, when, you know, a firm, you know, prevents a top tier very public founder from like filing a sexual harassment claim against a board member, you know, that sometimes only becomes public two years later, and then she tweets about it only four years later, versus you know, when you're on the inside, you basically need to see it immediately. And so I think they're, you know, the only thing that founders sometimes lack is, you know, you know, seeing sometimes founders make a choice based off of relatively like, you know, lagging, you know, brand indicators, I think, rated appropriately, but maybe aren't as perfectly in tune. But you know, that's just part of the part of the market is, reputation is very much a lagging indicator.

Will Jarvis 36:38

Got it? Got it. I've got one last big question for you here. And it's a big one, do you think we'll be able to, you know, escape decadence in the last this kind of great stagnation, the fertility, the rising cost disease? I mean, like, the lot indicators look like really bad at this point. Do you think it's possible? And, you know, if so, like, what should we are there any concrete policy policy proposals we should be thinking about more frequently?

Delian 37:02

Where is and Who is John Galt question. I actually, you know, I think I've actually relatively, you know, optimistic about the future of the West, I think, partially, the advantage in particular that the United States has, it is is that it is so much so a country that does not have a singular identity, right? Like I think the reason why a Sweden or a Netherlands etc, you know, struggle to both innovate as much and potentially get sucked into this vortex of like, you know, decadence and lack of productivity and not really pushing the fold is because the identity is of like being a Swede, right, that that is the sort of national identity, Americans lacking national identity, which comes with in some ways, a lot of, you know, downsides of like, you have these like, you know, race wars, extremely divisive, you know, Congress to the point that like he does, either sometimes, you know, unproductive, like, it comes with tons of downsides. The flip side, though, is that there's sort of constant competition amongst various, you know, geographies, idealogue ideologies, but that allows for sort of, like rise to the top of, you know, the best much more so than anywhere else in the world. Yes, do have their cross, you know, you know, seem absolutely insane. You know, do education costs seem like they're, you know, absolutely, you know, going through the roof, our taxes in California and saying, absolutely, all of those things are crazy. However, every single European when they like, you know, have a major, like health disorder, they fly to the United States for, you know, their health care. All of the top tier universities, the top tier research institutes are all in the United States, MIT, Harvard, Stanford, Caltech, etc. America is the only country that is currently like, you know, flying and landing, you know, rockets, you know, in the entire world. And for all these things, you have the counterfactual of like, well, you know, Florida, has pretty damn, you know, low taxes is pretty damn open pro capitalism, you know, pro growth, and that will eventually, you know, cause some level of pressure, like, you know, as much as there's a little bit of like, online meme of like Miami versus San Francisco, or is Miami going to be a tech ecosystem, it's like, it definitely is, I think, irrespective of which side you're on, you should I think be rooting for there just being more competition, such that, you know, San Francisco politicians all of a sudden actually start to feel real pressure, where it's no longer just a guarantee that they're going to be the default, de facto, you know, sort of, you know, number one, you know, tech hub in the United States. There's, you know, real, real alternatives that are very different, you know, sort of policy, you know, approaches. And so I think there'll be, you know, obviously, you know, ups and downs and, you know, difficulties, but, you know, in the green in the grand scheme of life, I'm still very, very, you know, optimistic about the, you know, sort of rise of the West in the United States, either maintaining dominance, you know, over the next century, irrespective of COVID, inflation, geriatric president, etc. You know, I think I think will turn out just fine.

Will Jarvis 39:54

Excellent. Excellent. Well, Dylan, thank you so much for coming on the show. Where should we send people where can they find you?

Delian 39:59

Uh Yeah probably you know the easiest is you know if you're looking for you know more info on Varta it's varna.com var da.com. And fill on me is probably easiest found via Twitter ads a Bolgar at ZTE bu LGA are.

Will Jarvis 40:13

Awesome. Thanks, man.

Thanks for listening. We'll be back next week with a new episode of narratives.

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Well, hey, Norman, how are you doing today?

Norman Ohler 0:40

I'm quite good. It's quite cold still in Berlin, even though we already in mid May. But I'm fine. Thank you. How are you?

William Jarvis 0:51

Doing? Good. Well, thank you so much for coming on today. Before we happen to some of our questions about your work, could you give us kind of a brief bio? And you know, how did you start thinking about drugs and Nazi Germany? You know, it's such an interesting topic that was really unexplored before you got to it, it seems like,

Norman Ohler 1:10

Yeah, well, I mean, I have been writing novels before I published three novels in Germany. When, at one point, an old friend of mine said I should write my fourth novel about drugs in Nazi Germany, which I an idea that I immediately declined, because it said there were no drugs being used, and not just work, clean cut t total errs, inventors of the war against drugs, I knew that part of the Nazi propaganda. But he's said that he had different information. And he challenged me to start a little bit of research, which I did. And then I found that he was actually right. He was a DJ in Berlin. So he's not a writer, but he's kind of a hobby historian. And then I started writing a novel and showed it to my publisher. And he said, it's not really good, because the topic is so interesting that it would be watered down in a novel. He suggested I should write a nonfiction book, an idea that I declined, because I thought nonfiction books unnecessary, boring. But then I thought about it for two days. And I realized that actually, his suggestion is the correct one. And then I decided that it should also be possible to write non boring nonfiction books, they of course exist. But I hadn't really read a lot of nonfiction books. I'm not that interested in nonfiction. But then I, I started to, you know, attack the challenge.

William Jarvis 2:51

That's great. And what was kind of the most surprising thing to you in looking at the subject of drug use in Nazi Germany?

Norman Ohler 3:00

Well, I mean, when I spoke to my grandfather, in the 80s, when he was still alive, he always told me that Nazi Germany was a place where everything was in order. And there was like this myth that it was a disciplined society. So to find out that drugs played such a big role was obviously surprising. And then to see that a big part of Nazi ideology was this. Health duty they call it, everyone had to be healthy. Drugs were forbidden and taboo. So to see that, in reality, they used quite a lot of drugs and very hard drugs like methamphetamine is interesting in general. And then in particular, I thought that the drug consumption of Hitler was very interesting, because I had not suspected him of using, especially opioids or cocaine, which he did. So that was there was actually fascinating to research and write about.

William Jarvis 4:08

Definitely. And how extensive was Hitler's drug use?

Norman Ohler 4:12

Well, I mean, this depends on your definition of drug. He certainly had a doctor that liked to give him medications. This is Dr. Theo Morel, who became a personal physician in 36 and gave him almost daily injections of various remedies and substances until 45. So for nine years, it received 1000s of injections, which is unusual in itself. And from 36 to 40. That's like the first phase of Hitler's drug intake or drug drug taking this was these were mostly vitamin so not really drugs, actually more supplements. But then in 41 he received for the first time opioid dolen team. And that kind of was a game changer because from that moment on, Hitler had experienced the strong effects of receiving an opioid intravenously. And he wanted more of those euphoric feelings, and physical states and mental states. And from 43 to till the end of 44, he received quite a lot of opioids. And also he received hormonal injections like steroids. So it was really kind of a wild mix towards the end. Especially what, when the war started to become difficult. For Germany, we can see that he was taking more and more drugs to, I would say, flee reality and keep his charisma up. So he could still convince his generals of his ridiculous and crazy ideas how to how to lead this war. So the longer the war takes the more drugs he uses.

William Jarvis 6:13

Gotcha. And he does, I believe you wrote about this. You've talked about it. He got an opioid injection before what a big meeting with Mussolini trying to convince him to stay as part of the Axis powers in 1943, I believe. Could you talk about that a little bit?

Norman Ohler 6:31

Yeah, this was in July, I think it was July 18 1943. Italy threatened to break away from the axis. And Hitler was quite depressed about that. He, he thought it was like a betrayal by Mussolini. There was a decisive meeting between the two dictators in northern Italy. HCA didn't want to go he felt pressured, he felt insecure. And for the first time before the meeting, he received a new medication called in German or eco doll, which has at its as its active ingredient, oxycodone. And when he after he received that his mood completely changed. He became self confident, euphoric. And, basically, he talked nonstop during the meeting with Mussolini talk for like six hours without stopping. Which was a problem for Mussolini, because he simply was not able to discuss his own concerns about the war, and certainly wasn't able to tell Hitler that Italy would leave the the axes and would would would stop the war. And after that meeting, Hitler actually said to morale that the success of this day was all thanks to him to the doctor. So apparently, that opioid injection was, was historical in a way,

William Jarvis 8:07

definitely guided the course of history there. perverting, you know, what is it I may have butchered the pronunciation there. And what impact did it have on the German war effort.

Norman Ohler 8:18

And the team is, is methamphetamines was the brand name that German company Tamla who developed or found methamphetamine or developed it into a medicine called it it was patented in 1938 in Germany, and quickly became a hit in the in the civil society. It was totally illegal and you could buy it in any pharmacy, you could buy pure methamphetamine, pure crystal meth, each pill had three milligrams of methamphetamine contain three milligrams of methamphetamine. And at one point there was well, not there was at one point the so called army physiologist, Professor Otto Vanka. Heard about this pervy team, this new medicine that everyone enjoys. Everyone takes in order not to have to sleep so much. I mean, if you take methamphetamine, you don't need to sleep that much. At least in the beginning. You feel like you have an extra boost of energy. So that was kind of the word on the street. If you've take this pill and you feel better, you're more taut and talkative, you can stay up longer you can work more. So he thought that could be interesting for soldiers and he made tests at the Medical Academy of the of the German army, giving young medical officers Pavarotti and compared to coffee, caffeine and placebos and found that on meth you can stay awake longer, you actually become a little bit dumber. He also found that that the front cortex does not solve highly complex problems as precisely as as a sober frontal cortex. But it actually solves more quested answer, it gives more answers in a period of time. So you become faster, you don't sleep as much. And he thought this is great for soldiers. So he tried to contact his superior the, what's it called, it's the Surgeon General, it's called in America, I think that so the equivalent in Germany, but that guy declined, that he didn't understand the concept of a synthetic stimulant. So when Germany invaded Poland, there was no official ruling about methamphetamine. But this professor Ranko realized, because he asked many medical offices in the fields, he realized that many medical offices were already taking it. And then he was then successful to make it an official army drug for the Western campaign, the war against France, Belgium and and Holland and Great Britain. And when Germany attacked France on May 10 1940 35 million dosages of methamphetamine were being used by these by the German by the German army and air force. So that blitz campaign that was actually that actually relied on the time factor because that campaign against France only worked if the German troops would be able to move very fast and to France and cut off the surprise French, to the Defense Forces encircle them. And they could only do that with the help of methamphetamine, which actually enabled the German soldiers to stay awake for the first couple of days and nights in the campaign. So methamphetamine was highly important for that astonishing victory in the West,

glenn jarvis 11:58

I loved how you told that story, that portion of the story, the move towards or the sweeping across France with Providence, in your book, that portion of the story was really great. And nobody knows about this. And not only does nobody know about this, but like, they understand the concept of Blitzkrieg, or at least it's been told to everybody in, in the history books, but they don't understand that like, four days of not sleeping straight with tank drivers. Like the military advantage you have there is mind blowing. So when I read that, I, I thought, oh, people really don't get it. It's it's four days of not sleeping, which just isn't possible without men.

Norman Ohler 12:38

I find it I think it's impossible, actually. And then was the only concern that they had with this plan before they implemented the methamphetamine first they had the plan that they would have this this splits campaign and then the concerns were but can they really stay awake for that long and Hitler's it of course they can that German that superhumans. Right. Back, they only could because they use methamphetamine. Because otherwise it's simply not possible. And I mean, that idea that Professor Vanga had is revolutionary. And it's no surprise that the German army was the First Army to use that, but not the last. Amphetamines have since then become like a staple for for military organizations all over the world. So they all kind of copied it, but not usually not with methamphetamine, just with amphetamines, or with you know, other forms of amphetamines, which are still used today also by for example, terrorists when they go into when they when they go into actions, that red would require you to stay awake for a long time because it and it also has different effects. It not only keeps you awake, it also limits your fear. And and it limits your inhibitions so you are less your conscience is you have less problems killing people on amphetamines. So it is quite an efficient and obviously dangerous drug. Right for for anybody with a weapon in the hand and it's in his or her hand.

glenn jarvis 14:27

So that leads me to the question, why did the German stop about 10 miles out of Dunkirk? Was it more a political struggle with the with the Luftwaffe and the Wehrmacht? Or was it? Was there something else going on?

Norman Ohler 14:42

Well, that halt or that Hitler issued is one of the great mysteries of World War Two and I tried to explain it pharmacologically and blitzed it's the only explanation that I have. I mean, it's a psychological and pharmacological explanation. Hitler which is also an interesting story always had problems with the Army High Command. From the beginning, they had different opinions on how to wage this war, this World War Two, Hitler had different ideas, then then then then the high command. And when the when the tank when the tank divisions, for example, Ramos division stormed through France, Hitler, even though he had given this order, I was quite surprised by the actual speed on the ground, he was not a meth head himself. So he basically he was in the map house looking at the map of France and just couldn't believe how fast they were going. And they he couldn't understand that they would not act, the way a division usually acts with backing up and making bridge heads and securing the positions and all that that military stuff that you learn this tank divisions on math, they just stormed and they never stopped. So Hitler became a skeptical of what they were actually doing. It didn't get it anymore. So at one point he he spoke to girl in the head of the Luftwaffe about this and Girling said, these generals, they don't listen to you anymore, they just do whatever they wish. This is not good. A they will become very famous in the German public, everyone will say we won the war because of these crazy generals, you Hitler, you have to you know, get back into the driver's seat otherwise be they will be, you know, vulnerable to maybe allied attacks, which was ridiculous, because the allies were already beaten basically. And see Girling wanted to have the victory for himself. So he said to Hitler, I can finish off the British troops from the air with the Luftwaffe, which was a ridiculous idea, because you can't really destroy I mean, maybe you can nowadays, but at the time, it was not a good idea to try to destroy a whole, a whole ground level ground troops of the enemy by bombing them from the air, it would have been much better to do it on the ground as they were already doing it. But Hitler issued this whole order, in order to, you know, become the decisive force again in this campaign. And that was this big mistake, because that way the British could escape through Dunkirk evacuate back to Great Britain and staying, you know, sizable force during the rest of the war and eventually beat Germany.

glenn jarvis 17:48

You You explain these characters really? Well, you characterize them very well. I like the Luth Wafaa, the head of the Luftwaffe being you know this. I mean, heroin addicted, wearing flamboyant clothes and in the middle of Nazi Germany, and then, you know, Hitler being egoic and how much do you think that these individual characters and how they? How much do you think their personalities affect directly history? Because it seems to me like that egoic act that Hitler took stopping, you know, the military 10 miles from Dunkirk, it seems like that is like an obvious example of, you know, a personality shaping history.

Norman Ohler 18:40

Yeah, I think that personalities are highly responsible to shaping history. I mean, when, you know, the heads of states are not robots that act in a some kind of neutral rational way. I mean, they're the human beings with you know, problems in the private lives which then you know, magnifying their political decisions. Also in in England, I mean, that they had a guy called a guy like Churchill was very important for Great Britain like a maniac. He's a maniac, just like Hitler. So you need a maniac to beat a maniac also, Starling in the Soviet Union was such a maniac so Hitler had to maniacs against him. If and that was good for the for the for the coalition against Hitler that they were so strong that they were such strong personalities. But obviously, it did not fit in within the Nazi dictatorship. Personalities maybe were even more important because it was not a rational system, I think like in London. They would actually discuss and the same actually they did in Moscow, like Starling would discuss or would actually Lead, leave his generals to lead the war effort. He wouldn't micromanage everything like Hitler did. So it's important also that you can that you can also turn down your personality and let the professionals do their do what they can do best. So Starling was good with that. He said to his generals, you lead the war, basically. I mean, he would, he would let them make decisions. And I think it was the same in Great Britain, Churchill didn't make every decision, I think they made a lot of rational decisions, which were helpful for their war effort, while in the Nazi clique, there were basically no rational decisions made everything was determined by mood, by ideology, by by drug highs, and not really by the reality on the ground. So that's why I think in the end, the Nazi system had to fail because it was just not corresponding to reality in the world, not relating to the reality in the world.

William Jarvis 21:23

That makes sense. I've got one more big question for you, Norman. You released a new book just recently about resistance to the Nazis? I think it's a specific person. But you know, how common was German resistance to the Nazi regime? You know, was it a very common thing? Was it not common at all? What's your sense about that?

Norman Ohler 21:43

Yeah, you're talking about my book, The bohemians, about two lovers, lovers have oh, and Libertas, who created the largest resistance network within Berlin against the Nazis. And, in fact, their actions against the dictatorship, were quite unusual. Resistance against the Nazis was a fringe phenomenon. Most people agreed, or at least kept their mouth shut. It was very dangerous to do something against the regime. The Gestapo was trying to monitor the whole, you know, population. So that's why I wrote this book about the bohemians, this group in Berlin, because they were really brave. And they said, even if it might cost us our lives, we cannot say yes to what is going on, we have to try to find ways how we can say no, and how we can educate people about the horror that's going on. So resistance is rare, but when it occurs, it's highly interesting.

William Jarvis 23:05

Definitely. Quite interesting. Well, Norman, thank you so much for coming on. Where can people find your books?

Norman Ohler 23:13

They can go to the local book shops, which still exist on on our planet. And I think that actually opening up again, all over the world. So it's worth going again, and looking at the strange things which are called picking them up. And yeah, you can buy blades or the Bohemians. Obviously, you can also order it online or just don't download it, because that's really that's not good. And I don't earn anything, and it's cost money to write these books. So go to the bookshop.

William Jarvis 23:55

That sounds great. Well, thanks, Norman. We really appreciate it.

Norman Ohler 23:58

It was a pleasure. I'm sending all the best wishes to the United States of America.

William Jarvis 24:04

We appreciate it. Thank you.

Thanks for listening. We'll be back next week with a new episode of narratives.

William Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Richard, how are we doing this afternoon?

Unknown Speaker 0:41

Good. Well,

William Jarvis 0:42

how are you? Doing? Great. Richard, thank you so much for taking the time to come on today. Do you mind giving us a brief bio and some of the big ideas you're interested in?

Richard Hanania 0:51

Sure. So the bio, I mean, it's sort of boring. Actually. That is it's interesting. Let me let me take that back. Because it's boring. The CV version is boring. Because I went to college, I went to law school at the University of Chicago, I went to college at University of Colorado, I dropped out of high school, I have a GED. I went to law school, the University of Chicago, I got a PhD in Political Science at UCLA did a two year fellow two year fellowship, my focus was on international relations at Columbia, until about until 2020, actually, and then I started my think tank called the Center for the Study of partisanship and ideology, which is interested in social science, things like you know, good data practice replication crisis. But we've recently taken a focus. We've taken a sort of moved in the direction of more progress studies, the functioning of benches, to institutions, public policy, things like that. And then, the same time besides my big tank, I mean, I write my own things I've read read a book called Public Choice Theory and the illusion of grand strategy on American foreign policy. I have a sub stack I read about boldness and the origins of boldness, and I are you comes from civil rights law, and it's deeply embedded in American law. And also on you know, I'm on Twitter, and I'm on substack, like I said, and I read about still foreign policy in American politics, mostly. That's about it.

Will Jarvis 2:14

Awesome, awesome. Well, I'm gonna go off the outline off the outline. And so I apologize for this. But I'm curious, you've had a transformation from you know, you worked in academia into kind of more of a public intellectual role, I would say, you know, how has that transition been? Is there been anything that was kind of surprising to you, like, in interacting with the public more than, like, just with academics?

Richard Hanania 2:34

You know, it's yeah, it's funny. So I mean, my I was, I thought, you know, the reason I went and got a PhD after I got my GED was I was interested in the world of ideas. And so I thought, you know, I want to write articles and books and explore important big questions. So I said, I'll get a PhD in political science right now, that's not the way to do it.

William Jarvis 2:56

For people that have a PhD on the podcast, like, I've heard this several times.

Richard Hanania 3:02

So I did that. And then I, you know, the Columbia fellowship, I was sort of ahead, my, you know, one foot out the door, I thought maybe somebody would hire me at a think tank. So my background was in foreign policy. I did actually work for defense priorities for a while, which is a Euro most foreign policy think tanks are interventionist, and I was more anti interventionist on American foreign policy. So they're really the real choices were like, you know, Cato defense priorities, a few places like that. There's, there's more than there used to be. But I thought maybe I would do that. So I started dipping my toe, I started doing stuff for defense priorities, did a report for Cato. I dipped my toes in the water, I started tweeting a little bit, still being careful still trying to you know, keep my options open. I started writing things on my sub stack, and then they took off like, you know, beyond, and that would not even on my not in my direct my area of so called expertise for policy. But on American politics, I had a few subjects that really, really went viral. My Twitter started taking off. And I said, okay, I'm good at this. I don't really I don't, I don't even need, you know, I don't need academia, I don't even need the think tank crowd. I don't really need institutions at all. I can say whatever I want. And you know, there's a lot of people out there who will appreciate it. And yeah, it hasn't been it hasn't been that long. That was that was really late. 2020. That's awesome. Now I'm here, early 2022.

William Jarvis 4:23

I love that. I love that. So you've kind of exited, you know, institutions, and you've went to create your own, you know, the Center for, excuse me, for partisanship, focusing on partisanship, but also progress studies as well making governments more effective. Can you tell me a little bit about what do kind of academics, what do people know that read the literature about partisanship that, you know, lay people would just find surprising, or like counterintuitive?

Richard Hanania 4:48

Yeah, I mean, kind of intuitive. It's hard for me. I mean, I'm in. I'm in. I'm on Twitter a lot and I'm talking to people, people who know a lot about politics. I don't know like how normal people think about politics now, but I think it'd be understanding. But I suspect sort of that there's not tons that's counterintuitive now, because I think the sort of the political science you has filtered down, like, I think like five years ago, six, seven years ago, when Trump came on the scene, there was a lot of economic based explanations of Trumpism, it was like these people lost their jobs, if you just, you know, raise the minimum wage, this thing went up Trump, you know, whatever, people will have these sort of, you know, like, sort of, you know, they're, they're not Marxist explanation. There's kind of Marxist, they're, they're, they're based on the idea that there's, you know, there's like false consciousness and people just fall right, or economic motives, and maybe they're able to be fooled. But basically, that's what's going on. Yeah, materialist conception of how voters behave. You know, even though that wasn't just the public that was like, you know, that was the elites. Now it was a lot of people, you'd see normal things like that. And I think, you know, the conversation has gotten smarter. I mean, that people don't say that much about that anymore. I mean, we have a lot of data showing that economics, political science knew this in the late 1970s and 80s, that economic circumstances are not a very good predictor of your politics. And, you know, Brian Kaplan, who many of your readers talks about this false self interested voter hypothesis for a book called The myth of the rational voter. So, you know, the smart people, smart people knew this. But you know, a lot of other smart people, you know, people in journalism, or people or political pundits, did it. And they seem to actually know that now. So I think that we're getting a more accurate understanding of sort of partisanship and quote, unquote, ideology, you know, what people would be surprised by? Yeah, I don't know. I mean, it really, I need data on like, what people actually think all I know, is what, like academics think and I know what journalists think. And, you know, I look at data, it's I know what people people think. But not, you know, maybe it's a maybe it's a testament to the state of our discourse, that it's not so obvious that there's things that people are getting wrong, at least on that.

William Jarvis 6:57

Yeah, that's very encouraging. Do you have a sense on how much genetics matter for people's, you know, ideologies? Like, is it generally something we're kind of born with? Maybe we have, like some kind of pharma forger dynamic going on where, you know, people have one preference one way or the other? And then maybe we're like, molded on the margins to one thing? Or the other? What's your thought on that?

Richard Hanania 7:17

Yeah. So I mean, when you do that, when you look at the behavioral genetic studies, I mean, it's basically, you know, it's the same lesson you get with all behavioral genetic studies, which is that genetics matters a lot. You know, it's like 50% of the variation, or more, depending on what you're measuring. Now, the finding was that ideology that, you know, ideology followed that they follow that pattern of, like, 50% or so genetic variation, and, and then, but then party identification. Traditionally, this was the finding was more correlated with a home environment. But ideology and party are becoming much, much more strongly correlated over time in America. So there are a lot of people who are liberals who call themselves Republicans and people are conservative, and much more. So I, you know, it's I think it's just all it can be seen as more, you know, correlated within the human genetics, it's all together people's natural inclinations, or putting them into one tribe or the other now, you know, it's like, it's important to understand here that, you know, study public opinion, it changes very quickly. So intent when he hears Moses, or Trump can say something, or Obama can say something as the Democratic, you know, black Americans, should, we had a huge shift on gay marriage, in the aftermath of Obama coming out in favor of gay marriage or on 2013 2014. Around that time. And so, you know, that can obviously be that obviously cannot be genetic, but it is, it is picking something up, you know, so like, what so like, you know, people can change fast, and they're that they're that sort of malleable, like, why is why are the twin studies showing that, you know, people's, you know, biology is making conservatives or liberals, you know, I suspect it's something along, it's something along the lines up, there's physiological reactions that people have to the parties, you know, you know, this is one of those areas where we might have gone backwards in our scientific knowledge. Because, you know, there were 120 years ago, you felt you know, this, stuff gets dismissed. It's fair analogy. Now, you could look at someone's, you know, cranium, and you could tell something about their personality, right, that we're not supposed to not believe that there's more recent studies that do show that ironically, I saw one study out of the University of Delaware, it's you can look at a man's face and tell how racist he is, like, there was some correlate, and it's like, iron. Such academic is like super, you know, anti racist, like they stereotype of biological features. But, you know, I'm not saying that's not that's not true. I think there is something to something to this kind of research. So yeah, I mean, the exact mechanisms, you know, are the, you know, it's, you know, that's short answer is genetics, very important. And then the exact mechanisms are, you know, interesting, and, you know, I think yet to be fully explored.

William Jarvis 9:49

Gotcha, gotcha. It sounds like it's quite complicated. I'm curious, you know, this is kind of a left hand turn a bit but partisanship in the US, do you see like some path way to de escalation because to me, it just seems like it's just gonna get crazier and crazier and crazier. There's, there's nothing we're really going to

Richard Hanania 10:06

be able to do about that. Yeah. So. So how old are you? Well,

William Jarvis 10:09

I am 27. Okay,

Richard Hanania 10:11

so I'm a little bit I'm a little bit older than, you know, mid 30s, it actually matters a lot, because I can remember a lot that basically that you don't remember. And people Yeah, obviously can remember even more. And, you know, there's now there's enough historical eras that I've lived through. And also, I read about historical eras. And there's nothing like living through it, that you see something that you don't get just from reading a book. So the 90s are much clearer to me than the 80s I didn't, I was too young in the 80s 90s. You know, I can, I can remember. And, you know, the, you know, what's what strikes me is that is like, you know, you watch like, The Late Show now, or you watch like a pro athlete go off. And Paul, like, you know, like, it's just their liberal. I mean, it's just a very fast. Yes, absolutely. And, like, you know, it's weird to think back at the time where, like, sports stars, like, didn't speak about politics, actors, you know, did but much, much less. It wasn't the center of, you know, the Grammys, or, or whatever I was talking to somebody from Korea, told me that I'm gonna go do that are actors like insufferable? Like, you know, schools in Korea? Like, you know, if they tried to talk about politics, people would be like, Why is this actor talking about politics? Like, they know, and, you know, this is this is this was probably America with, you know, athletes where they were at with athletes in the 1990s, although we always had well, it's had a tradition of actors, you know, speaking up going back to like, the 60s, right, at least, maybe before that. And so I guess the point is, you know, you get a politics, you know, I'm old enough to remember politics, and even, you know, you could remember 1015 years ago, you know, more extreme or time or politics was less central to the culture. And, you know, so So I guess they escalate up, yes. How do we get off this? You know, escalatory ladder? The question is, you know, how we got here? And I think social media, you know, it's a, it's a, it's a conventional story, but I think there's something, there's something to that. I think there's actually a difference, also another story, which is that the access to information, basically, you know, because a lot of ways, you know, the voters are becoming better informed, because if you were a liberal who voted for George W. Bush over core in 2000, you there was something you didn't know, I mean, you were you were not acting like you were not acting in a way that was utterly consistent. Same with all the people who were, there were a lot of people who were Democrats, so you pull them on their social views, or their views on immigration 20 years ago, you know, you're like, you know, they have nothing in common with the elites of the Democratic Party. So people are actually sort of, you know, I think they're becoming better informed. There's policy entrepreneurs, were going out there and be like, Yo, you're a Democrat, well, they believe X, Y, and Z and be like, Oh, my God, you know, I don't believe in X, Y, and Z. During the Republicans. So, you know, part of it is like, the story is like, social media are bipartisan, it's like, we're better informed. And we have much less in common. And we, you know, I think there's, there's like a dark sort of story. There's like, a dark story here, where it's like, oh, the things you supposedly wanted informed citizenry that like, cares about politics, like, gets you people hating each other. And so, you know, that part is there, that part is still gonna be there. I think, you know, but But who knows, I mean, we're so the other social media, I mean, the technology is new, and we're adjusting to it. And like, it's not just our politics, it's our society. So, you know, like, you know, Twitter is like a thing for like, Generation X. And then like, you know, I don't, you know, or, you know, older millennials, and then like, you know, there's a tick tock, which I think people my age don't, don't really use that much. And then but people that are younger, they're all on it. And, you know, it's, you know, it's, it's hard to see where this is gonna go. I think it's very, you know, it's harder to predict it, maybe maybe more than ever. Tick tock doesn't seem as conducive to, like political polarization and stuff than Twitter. I mean, the people who do like to take that away, I mean, they just look ridiculous that it has a whole frivolous feel, to the whole thing where like the, you know, I guess the 280 characters is like, perfect for like, fu you racist or something. Tik Tok is like, what have you made a video like that? Like, who wants to watch that? They want to watch that, right? So maybe we'll move to Yeah, well, maybe we'll move to a place where, you know, we're not as political. But you know, that's just tick tock like, who knows what what social media people be using, you know, 1020 years down the line?

William Jarvis 14:05

Gotcha. Gotcha. So, I really like the social media story. I'm curious, do you think any of it has to do with, with growth with lower growth, you know, if there's lower economic growth, you know, it's harder to do horse trading in a democracy. And it's harder to split the pie in ways where everyone wins. And so the battles become, like, more more difficult, more vivid, because you will have a winner and a loser it's more than zero sum.

Richard Hanania 14:27

Yeah, there's so this was a Chris Caldwell argued that for this guy in his book, I don't really buy it. I think, you know, as far as if you look at government as sort of splitting money to people, I mean, government, it's not getting smaller. I mean, it's, it's, you know, as big as big as or bigger than ever and no, I reject me and I reject the sort of the, the economic, you know, connection there. I mean, you look at like something like, you know, Eastern Europe, for example, very strong economic growth, very sort of sharp right turn in their, in their politics. So know that there's something I mean, there is some, you know, there is some, you know, there is something going on with the economy, right, you know, you know, they're like, the economy is such a broad thing that, like, economics does not involve, in fact, politics. Like, that can't be right. But like, these stories were like, you know, things are bad. So they're so people are less happy. So they fight, I don't see a lot of direct evidence for that model of the world. You know, economic that even our, during the Trump era, I mean, the economy for the lower classes was actually a pretty good, man, you know, we hated each other as much as ever. So yeah, I, you know, I focus more on the immediate path paths, the, you know, the social media and the means of communication rather than the objective economic factors.

William Jarvis 15:46

Gotcha, gotcha. Well, in talking about governments, you know, are there any quick wins to make, like the American government more efficient, I was at Oak Ridge recently, you know, where they did a lot of the Manhattan project work. And I was just struck by the fact that the same organization that built the first bomb in four years, is now the Department of Energy, which is like, just completely ineffective, like, Are there any, like quick wins to like, try and like fix some of these things? Or is it just like, really slow grind to try and reform his institutions? Or is that even possible?

Richard Hanania 16:15

Yeah, I think you're I mean, I think you're in a better, you know, you're probably you probably know more about this than I do. Yeah, I mean, what's the I mean, one, you know, there's what can what can you do to make me depends, depends on sort of what your goals are, right? I mean, they're the easiest way to do stuff is sort of, if you were, if I was gonna advise, like, you know, effective altruists, people, I'm sure many of us your audience, I'd say, you know, there's, there's nine people on the Supreme Court, you need five of them. I mean, probably focusing, you're probably like doing deep psychological dive into, like, what motivates these people and what their sources of information, I would probably the best way to get quick fixes to make the government better. If people do like, you know, little Supreme Court lawyers do this, like in their arguments, they say, oh, I want to appeal to the Sweet vote. But you know, I think, you know, like a propaganda campaign that's gonna get justice Cavanaugh or Roberts or something, I think it's probably like a good way to influence our politics in a certain direction. Yeah, you know, I don't know. I mean, I think that, you know, the, you know, it's just hard. It's just such a, it's such a broad question. It's hard to say, I mean, there was Cass Sunstein, during the Obama administration, he tried to introduce cost benefit analysis into, you know, into government programs and regulations, like in like, you think like, wait, what were they doing? They were not doing cost benefit before they were just doing stuff? Like, who knows? Like, we're not checking if it makes sense, or, or does it? And I don't think that actually went anywhere. But you know, if that was possible, you know, that'd be great. The problem is, nobody does that. And they haven't done cost benefit analysis ever. Because there's apparently not an incentive to do so. So how you fix that? You know, I don't know.

William Jarvis 17:50

Absolutely. That makes a lot of sense. Going off this, you know, we failed to build a functioning state Afghanistan, you know, was there any, do we have any chance to begin with it? Was there a path to success there? Or was it just like a fool's errand all along?

Richard Hanania 18:04

I mean, there, you know, I think, you know, depends on what the sacrifices you're you're willing to make? I mean, the question is, was it? You know, we have, you know, we could we could, I mean, I don't want to I'm not saying I advocate this, and I would never advocate this, we could have killed every single person that Afghanistan, if we wanted to use enough coercion, we could have got them to do you know, what we wanted? We have, you know, we could have had a draft and, you know, I was part of it, while we were writing the sacrifice, if you're gonna send millions of Americans to go fight for the Afghanistan Government? The you know, the question is, could we have done a given, you know, are sort of within the range of like, what our human rights norms are, and our values and like, what the country was willing to sacrifice? And I'm of the opinion that no, you know, and the, you know, the other thing is, you know, the other thing, the other thing that we absolutely, like, could not compromise on was we wanted it to be a democracy, you know, you can maybe do stability, it's hard enough, it's hard enough to, you know, just do stability, to do democracy. And, you know, the kinds that you get to the Newsha what the US was doing, I mean, like, sexual harassment training for, like, Afghan police officer, I mean, it's like, it's like, you don't even have like, control of like, the streets. Like, it's amazing. Like, it's just the thing that like, you know, they care about here, that are sort of the cultural stuff they were doing over there. And, you know, if they didn't do that stuff, and they just focused on the war effort, you know, maybe, you know, I don't know, but no, it was hard. I mean, look at the the entire you know, we'd like to pretend like there's a process of state building that is that we have insight to and we just have like best practices and we have bullet points and you know, we can give these people a standard you look at these, you know, these things, counterinsurgency doctrines. Nicholas, oh, you have to talk to the villagers. And then you have to like show you understand them and show cultural respect and then provide a well, and it's like, it's like, maybe that'll lead to a state. But you know, there's a good bit of good. There was a show called I forget who it was, but there was like GoPro cameras on American soldiers in Afghanistan. So it's, it's called under fire taking fire, something like that. And is a TV show, you could buy it off YouTube for like $1 or two on episode. And they would go, and they're like, you know, the soldiers are driving or you could read about this, but it's different to see the video. And they're like, you know, let's build a girls school. And so like, they're going to build the Girls School. And like, you know, there's just nothing, it's just like a mud in the middle of it. And they're taking like a bunch of stones and putting them on top like, okay, I guess that's part of our mission. And like, they're getting fired on on the way they're like, Okay, once the school is built, are you gonna get the textbooks? Like, are you gonna do enrolled? Like, what's the plan here? Like, if this building gets built, which are being fired at while you're trying to do it? I mean, you know, you feel sorry for the soldiers. But you know, this is this is these are the orders that they're, that they're getting. And if you do build a school and the textbooks, and you have a functioning administration and a sexual harassment policy, like did you win the war, like, you know, what is going on? So it's just so insane of what we were doing there? And so yeah, I guess the short answer is, you know, I really, I really doubt it, it's mysterious, the Taliban, you know, whatever we said about them, they had the ability to motivate men with guns to go and control land and keep it Yeah, they did that before the US was there. They did that. Amazingly, while the US while fighting the US, they did that in regions of the country. And now they've done it, you know, afterwards, whatever they had, God is on their side, they would say, or whatever it is, they have a story, they can call it a Sia, you know, this is old, the Arabic term. You know, whatever it is, they had it, and whatever, we had no idea how to transfer that to a government that looked like ours. We just did not do that.

William Jarvis 21:28

Right? Well, and but my big question, I guess, is like, why are we just like, so unable to do that if we've got to get the smartest people in the world, best universities, yada, yada, yada, you name it smart people in the State Department. They're just like, completely unable to make like, what are like elementary errors? It seems like anyone could tell you this is a bad idea. Is it just like a problem of incentives all the way down?

Richard Hanania 21:51

Yeah, I think so. You know, I think that the military has a lot of prestige. I think the military, you know, they have a sort of a culture that, you know, that they're gonna, like, certain things, and they're, you know, logistics and things like that. But you know, they have a very, can do attitude, you know, that have optimism, they don't, they're selected, I think on that basis, you know, sort of a political basis. You know, there's a lot of, you know, getting in my book, I mean, there's a lot of funding of think tanks of people who have a certain kind of bias towards American action abroad. And then you have these powerful and like, you know, we have no like real skin in the game in Afghanistan. I mean, we like, you know, soldiers sacrifice, and we spend a lot of money there. But in the end, it doesn't matter what happens to the, you know, for the sake of us, and they try to convince you that it does, you know, haven for terrorism, blah, blah, okay, we've been gone for a while, like, how many Americans? Like, it doesn't, it doesn't matter, objectively. And so, you know, we were never going to care that much. And so what do we do we fall into bureaucratic habits, okay, get a build a sexual harassment handbook. That's just what we're used to doing, you know, call for, you know, ethnic and inclusion, I have democracy run elections, you know, it doesn't correspond to anything that's happening on the ground. I mean, the parliament, I mean, it's just like these world drug dealers, and warlords, just like sitting there, and like, you know, you know, just be doing looting, you know, for days. I mean, it's crazy. But yeah, we just were, you know, we just did the bureaucratic thing. So it was definitely, you know, it's a, it's a, you know, just demonstration of some pathologies in the system. It's, you know, the Afghanistan war was like, so interesting, because it was such an extreme example of like, where the political mission and like the means to achieve that political mission, and like, the reality, were just so just, you know, there was such discrepancy there. And then we, and then you could look back, and you can look at all these reports, and you can look at Afghanistan papers, I had a threat, I reviewed a book on the Afghanistan papers by Craig Whitlock, for a recent magazine, you know, several months ago. But, you know, it's the same people, you know, the same system and all foreign policy. So, you know, I suspect, you know, we probably don't know what we're doing and a lot of places.

William Jarvis 23:51

Right, right. Well, what can we do to make foreign policy better? Is they just, like, intervene last? Is that just the answer, just like, just try and do less on the margin? Yeah, I

Richard Hanania 24:00

think so. I mean, we're not I mean, there's, you know, I think we're not we're not good at it. I mean, and when I talk when I talk to people about this, you know, smart people, yeah, that's the pushback I get, and this is maybe a common view. It's not just smart people, but the fact that smart people says, say, it makes me take it a little more seriously. It's, you know, you need sort of, you know, a hedge of mind, you need, like, global order, if it's not the US, you know, you don't be someone else. And, you know, I just I just don't know, the brain. I don't know if that premises is correct, you know, the war has declined a lot. And there's two theories as to why I, you know, to grid, you know, theories. One is America, you know, post 1945, America has been measurement, and it's basically done a good job, you know, for all its flaws. And, you know, we haven't had a great power war and, you know, more or less, you know, carbon and, you know, despite the recent, you know, recent happenings you know, the other story is there's you know, I guess every other theory is like something else happened rather than Marielle. Obviously, a lot happened in 1945. Right, the world to the world change, and, you know, nuclear weapons obviously also 1945 This is why that call As big as is so hard, right? And it was also, you know, 20 years later, you get 30 years to get the liberation of women in Western countries, right? And so it's like, there's like, you know, 10 things that are plausibly you have TV you have, right? You have TV becomes a thing, right? So you have so many things that are going on in the world. And, you know, and you know, so there's that theory. And you know, I think, you know, to me, I don't know, like America did it is like, you know, America, thanks to American hegemony is like one theory. And then there's like, 20 other plausible theories to me. And so like, you know, I guess they're all equally plausible. It's like one in 20. It's like America, that's that's kept. They just kept the peace. So it seems like, you know, 95% chance, it's probably probably don't need to be doing all this stuff. And then like, when you look at sort of the specifics of American foreign policy, it's like, like, look at how many of the conflicts are just like, you know, America has been involved at all, you could always say it's been worse, but like, the Middle East went up in flames. Okay. We overthrew they had a civil war, like direct Civil War bleeds into Syria, we aren't the opposition. In Syria. You know, we, Libya, I mean, that we overthrew that government. They had a civil war for a decade after, you know, the, we didn't, you know, we didn't start the conflict in Yemen. But we know, we supported the Saudis in their Ukraine and Russia. I mean, people think that oh, well, it indicates like, you know, you needed to stand up to Russia. And it's like, no, that people like John Mearsheimer, who said, you know, it's not like John Mearsheimer, was in charge. So the people, you know, who wanted a strong American presence in Eastern Europe had been in charge. So I don't know how they get to be in charge for, you know, the last 30 years and then say, well, you anti interventionist, you guys, you guys got it wrong. It's like, you know, you guys are the ones who are empowered, and you let us here. So, you know, for all these reasons, you know, I'm skeptical of, sort of get the more militaristic parts of American foreign policy. And yeah, I would scale it back.

William Jarvis 26:43

Got it. Got it. And now, How worried should we be out about, you know, the near peer competitor, China at this point?

Richard Hanania 26:50

Yeah. I mean, so people that, you know, they have, they try to find these, you know, not just regular people, but like, you know, like international relations scholars, they have these, like, I was talking to somebody the other day, they have these, like, you know, sort of your heuristics. So they say, Do we want a unipolar world where, like, you know, the US or do we want bipolar world, China or multipolar world, and I am I've spoken like this too, and I, you know, I think that sort of obscures more than, you know, and then it that it helps sort of understanding, so you can imagine many different kinds of worlds, right? So like, like, you know, a unipolar world in the sense like a government with like, you know, a monopoly of force, that's not going to happen, right? So like, you can imagine, that's the best system. But if people are thinking unipolar world, that's what they're imagining, like, it's the American government ruling over America, you're not gonna get that, right. You know, other countries have nuclear weapons and armies, and you know, other things. And so, you know, you're not gonna get that and, you know, so you're gonna, so you know, there's, there's at least two dimensions you're gonna get, you can think of a world where like, you know, you'd have polar versus bipolar and multiball, Fuller. And then you could think of a world with like, high tension and low tension. And I think the dimension of high tension versus low tension is more important, because first of all, you want to avoid nuclear war. If you look at, you know, the number of casualties in great power war wars, like World War One, World War Two versus like lesser wars. It's like an automatic order of magnitude difference. And so you want to avoid fighting China, you want to avoid fighting Russia, you want to avoid directly fighting them. And like, if, if that means maybe they get like, they have more conflicts with their neighbors, those are generally tidy wars. And so like, even the US rules over Latin America, basically, we arrest you know, we were trying to extradite the president of I think it was Honduras, because of a drug deal. Like, like a war on drugs. Like we think that gives us the right to, like, you know, rest the leaders of other countries. So like, Yeah, but it's not the end of the world. It's not, you know, I don't think it's good for Latin America. So, yeah, but so that's just, you know, avoiding nuclear war, avoiding great power war, but then, like, you talked to other people, and there's other stuff, too. There's, you know, more and more stuff that's closer to existential risk. AGI, I don't know much about it, but smart people are very concerned with it. You know, ideally, you'd want somebody was telling you, you know, I was talking to somebody said, you want a unipolar world, because if it's, if US and China are close, then like China is going to want to, you know, they're gonna want to take risks, and that might that might get to AGI. And then I said, Well, maybe if the US is up here, and China's down here, you know, maybe China says, you know, we need that we need that lately. And then I said, What's more important, it's like whether America and China hate each other, rather than one is a lot more powerful than the other we don't worry about the US and Britain like having a rivalry and that leading to one develop AGI because they're so desperate right? And we need more than we need more we probably this AGI thing is you know, as true as as, as important as these people say, we need more than just you know, not hating each other. We need some kind of probably active cooperation. Now it's hard to it's hard to compartment, compartmentalize the relationship. It's hard to say, Well, China, we're gonna talk about Hong Kong, and we're going to talk about the week or so we're talking about Cobra, but like, Let's cooperate. I've got like, you know, they say China, you know, must have something to hide because they won't let America investigate COVID I'm like, Are you insane? Like, do you think that like even if they were the most innocent people in the world do you think they would like make sense for them to let Like America come into their country, and like, look around, and then like, you know, judge them like, do you think America is seen by them as like a, you know, a, an unbiased source of like, you know, investigates it. So it's so you know, it makes everything else harder. It's hard to compartmentalize. And then you have like things like, well, you know, COVID things that could be worse than COVID. So, yeah, I mean, the unipolar but, you know, there's these deterministic theories of international relations theory, like John Mearsheimer, who I just said, was right about Eastern Europe, he has this kind of deterministic theory, the balance of power is fundamental, it'll determine how well we get along or not, we're destined to not get along with China, we don't we get along fine with Britain, just because they're so weak, I guess, if they were strong, you know, we'd be fighting the war of a control over. You know, I tend not to believe that, you know, I don't buy into this theories. So to be there's just a lot of good reasons, to sort of tamp down the, you know, Hostos, international issues, and whether, you know, one country is much, much stronger than the other or not, if the tensions are not high, it doesn't matter nearly as much. And so that's yeah, that's how I That's how so that's sort of the outlines of how I see it.

William Jarvis 31:01

Gotcha. So it's something like, maybe we should just like, not worry about Taiwan, kind of, you know, like, that's their problem, you know, kind of let Ukraine, like, there's problem that we should be more biased in that direction than like, you know, it's our duty to protect Taiwan, Ukraine, etc. Yeah.

Richard Hanania 31:16

Yeah. I mean, like, you know, it's a bit like, these are not like, against Taiwan, the semiconductor thing is a little bit complicated, a little bit that people talk about that I am not an expert at that. But you know, you know, like, if that's really if we're all we're just a pet, but you know, you could beg us to take somebody could buy the semiconductors from China, right? So you're, you're you're just, you're, you're dependent on China instead of Taiwan, and maybe you shouldn't be dependent on any one country anyway, should be finding other ways to diversify a little bit no matter what. Yeah, it would, it would be something like that. And, you know, people think that sounds heartless now, the Ukraine, I mean, the Ukraine thing. I mean, the Russia aggression in Ukraine did not, you know, start in earnest until 2014. Right, it was after the US backed overthrow of the government. So it's like, you know, is that things work out better for Ukraine, because of American support? It's very, you know, I think it's very hard to argue that I think it's, you know, it's hard to make these arguments, because they're so emotional. It's just like, Russia is bad. Ukraine is good, like, how could we not stand with Ukraine, we should have been standing with Ukraine more. And it's like, you know, Ukraine isn't a bit, but we did stand with Ukraine, like, we were on Russia's borders, like working on bringing them into, into NATO, like, you know, you know, reforming their government, like, you know, deeply embedded in their government, and, you know, not ruling out bringing them into NATO officially. So, like, we were there and, you know, bad things happen to them. So, yeah, I don't think it worked, even worked out for the people of Taiwan, you know, it's in theory, you know, in theory, it could, it could be different. I mean, the China Taiwan thing might be different. But in the end, you know, China versus Taiwan of war, if, if that's all it was, it's not an existential risk to receive, and it's not even like a, you know, multiple orders of magnitude risk of death, these countries probably submit, actually, if the US is out out of the, out of the picture, these countries submit the way in Latin America, you know, submits to submits to American fresh, which is not the best thing in the world, but not the worst thing in the world, not a destructive war that kills a lot of people and not, you know, there's peace and stability. So, yeah, that they would be it would be something like, you know, my model, you know, have something like, you know, a respect or respect for sort of, like, you know, regions of power. So, the, you know, which we have, which we have in Latin America, in which you know, it's not the end of the world if we give it to a few other countries.

William Jarvis 33:36

got it got it that makes sense to kind of give each country some some leeway around themselves. So it's yours, we're not gonna mess with it. I'm curious, do you think it's possible for us to give like Putin, like, de escalation, like off ramp? Is there anything we could do to, like, ensure to him like, look, we're gonna, like, we're not gonna do anything, just like, let's all just like calm this down? Or is it? Does it just keep escalating?

Richard Hanania 33:56

Yeah, I mean, you know, when I hear people talk about this, it's sort of hard, because you're speculating on the psychology of one man ran his political situation, and it's hard to do. Now, all I can do is put anyone else can do a sort of, you know, just look at Putin as a man look at a situation, look at sort of Russian politics from the outside, and sort of just make some try to make some educated guesses on how they're thinking and sort of what their incentives are. So, I mean, the way I see it, I think that the, you know, it's, you can talk about what's politically feasible for the American government to do and, like, you know, what could be the ideal situation, right. So, you know, there has, I think, Russia, I don't see a way that they don't, that they pull up without accepted without getting something. This was really bad. This was really bad for them. And, you know, and, you know, and I think that, you know, they were going to keep and I think that, you know, they've got the Korean government collapse, they weren't taking it. I mean, they would have they would have taken that as Like plenty, right? That yeah, that I see a little reason to doubt that like, why right view? Right. Like, that's, that's, that's what you would do sometimes governments do collapse and a lot of people like a lot of people like the American, you know, American Alice didn't think Ukraine with last right. So you know, that was probably you know the thing and then like, now they must have a realization that that's impossible. And so it's Plan B while the Plan B is, you know, it has to hold on to its gains, I think, which are going to Crimea, Donetsk and Luhansk. And they don't have all of the Netskope. Lots they have, you know, they have most of the populations of these of these two regions. And they I think, I think, you know, what the, the way they're thinking, and this is sort of stupid, because, you know, and objectively doesn't matter. Like, if you have the, like, they have like the, you know, the capital of each place, they have variable, the other large city, like there's a few other, you know, a few other medium sized cities and towns they can grab, but it doesn't, it doesn't objectively matter. Right, right. But the governor, the so called governments, self declared governments of these areas, they consider these things that the old province, the entire province that used to be like united under Ukraine control, they consider that their government, right. And so I think they feel like they need that. So like, you know, I just said, it doesn't matter. You know, try to give them that you could, you could give them that and like, declare, you know, like, if you wish, I could just rewrite American for a policy, you know, I would just put put on like a stamp. And like, say, he's like, the greatest man in history, I think it's like, you could like, you know, you could like, psychologically try to satisfy him, right? He's not doing things that are in the objective, long term financial interests of Russia, right. That's not his model. His model is, you know, sort of glory, you know, land. People think, yes, like, very simplified. And it's like, you know, okay, give him this worthless lad. That doesn't matter. And people, you know, why does it have title for the next thing? Like, no, maybe he'll be satisfied. Like, he doesn't have the indication that he's just he's been in power for 20 years, he hasn't been like hitting the like knocking or trying to knock off country? Country, right? There's an indication that he can't be satiated, right? He can be a piece. Right? And so I, you know, you give him these, you know, these areas that don't matter that are going to be held for Ukraine to get back anyway, if they if they tried, yes, the Ukraine goal is to get back the stuff that Russia has been occupying since 2014. Yeah, that's gonna, that's hard to do. If they do do it, I mean, it's gonna be, you know, there's a risk of nuclear and there's a risk of nuclear escalation here. If they if they do, it's gonna have to be horrific, you know, consequences are gonna have to do with a Russian occupied cities, what Russia tried to do to the Ukrainian cities. And so like, if you can give them you know, so like, you know, if you can, you know, I think it's hard for you couldn't take them back anyway. But if you could give some kind of, you know, symbolic glory to Putin and Russia, you know, you could do that. Now, this is the, you know, this is like, the best way to this is like the cheapest, most low cost and like an objective cost, easiest, best way to end the war. It's also literally the hardest thing politically to do, like, make Putin feel good about himself. Like compliment Putin, like, say nice things about him. Like this is like literally the hardest to do with our politics. And so I guess you can sort you can sort of see that the love is here, you can see why this is difficult. It's sort of it's sort of zero sum. I think people think in terms of Russia did a bad thing. Russia has to suffer. Maybe that's adaptive at a certain level. It's hard. It's hard trying to work when you're you're in that headspace, though.

William Jarvis 38:20

Got it? Yeah, definitely. i It really is. I'm curious, a bit of a left hand turn here. But effective altruists should effective offers on the margin. think more about governance.

Richard Hanania 38:33

Um, you know, I'm not, you know, I just, I mean, I've read Scott Alexander, but I'm not a guy who, like reads a lot of effective altruists stuff or a lot of Effective Altruism people. So you know, I don't know the balance of how often they think about government. I see. You know, there's the big tank by Alec Stapp and Caleb wet while watching him walk near with me. Is this funny? Yeah. Yeah. I mean, so there's something going on there. You know, Tyler Cowen, I think is sort of adjacent to Effective Altruism talks about you know, state capacity libertarianism. So, as far as I see there, is there are people thinking of governance, should they you know, should the community as a whole thing more or less? Yeah, I'm not sure.

William Jarvis 39:13

Got it. Got it. Richard, are you done for a round of overrated or underrated?

Richard Hanania 39:18

Oh, well, yeah, not bad. But that would be that would be really cool, actually. So yeah,

William Jarvis 39:22

awesome. Awesome. So I'll throw out a turn. Just give me overrated, underrated, properly rated, perhaps, and maybe why. So here we go. The likelihood of a nuclear exchange in the next century overrated or underrated?

Richard Hanania 39:37

I think, you know, I think in the next five years or so, probably underrated. I, we just talked about the difficulties of the Russia Ukraine conflict, and I try to game out what's going to happen, it seems like it's very, very hard. Next 100 years. I don't know how I don't know how to read them because I don't know what people think. I think people think that we're probably I think people tend to think that It's more likely than, you know, it's somewhat at least somewhat likely. And, you know, my mind my, my, you know, 100 years do people even think in terms of 100 years? I don't know. But, uh, you know, I think there are before the Russia, Ukraine, where I, you know, I had reasons for I was a little bit more optimistic about this in the sense that I thought there's probably less than less of a chance of this happening in the next year, 50 100 years and a lot of smart people. Because I think, you know, we, you know, it just seems like, there's, you know, there's just, there's such a discrepancy between, like, what these weapons can do and what countries you know, can't necessarily are necessarily fighting over, like, you look at like, the actual like, Taiwan, like matters. I mean, it's it has like, the the semiconductors at least, yeah, every other conflict in the world is just like worthless land. It doesn't matter, there's oil, you know, there's oil, like it's in the Middle East, but you know, it's like, you know, oil, it's not like, you know, it's not like the center of the global economy now, like, the biggest countries aren't the wealthiest because of because of rent, rent, natural resource rents. And so like, you know, there's, there's a kind of thing where, like, it's like, the smarter countries are in charge, there's sort of a Darwin Darwinian process for like, you know, America and China are not run by like, the craziest, literally, the craziest people in the world. And so, you know, I think if we get past this Russia Ukraine thing, you know, I probably will, you know, I think smart people probably overrate the chances of a nuclear war in the next 100 years.

William Jarvis 41:25

Gotcha. Do you think the Russians are just more more willing to use like tactical weapons of this type, and then we are

Richard Hanania 41:34

perhaps I don't know, if they're more willing than we are, I think there's the situation that they're in back in a corner kind of thing. Like, if we were like, if we had, you know, we have to like analogize situation, if we had like a power supporting Mexico, and like, they were selling like parts of the US and like, they want to potentially potentially bring you know them into their bring Mexico into their defensive alliance? Like, would we be more or less are likely that Russia like, like, who knows, but we're not at that situation, right? Russia is in that situation, if the war goes poorly, and they, you know, their their conventional advantage is, you know, not all people thought it was it, you know, they end up maybe in a worse position than when they started were like, at worse than the terms of just like less land, there'll be worse than like, terms are gonna be like, so they're just thinking simplistically terms of land, and, you know, to be more a little more terrible protecting the Russian speakers and in eastern Ukraine, you know, if it comes down to they're in a worse position after all of this. Yeah, I think the nuclear option could look, you know, more more, you know, it could be you could say the temptation, there certainly

William Jarvis 42:30

makes sense. Left wing bias and academia, overrated or underrated.

Richard Hanania 42:35

It's probably underrated as a force but overrated in its real world importance. So it's, yeah, it's, you know, very biased. I mean, the people still, like, you know, I'd ironically share these charts of like, the book receipts going like this, and Republicans are in office, and it's going like this. I mean, it's just the, the, just the surveys of academics, the experts think that the Republicans hate democracy, it's like, you know, you don't have to be a genius to see this is like, this is sort of stupid. And so it, you know, that's not like it when people think of academic bias, they think of like space, safe spaces. microaggressions, like he's, you know, objectively ridiculous, you know, these clearly, transparently ridiculous things. They don't think as much in terms of just like, okay, they're making charts and graphs and doing like, seemingly sophisticated looking statistics that are just like them, like regressing their opinions on like, you know, other people's opinions. I mean, it's really, it's just like, the research projects are often very stupid. So it's probably underrated. The extent to which the bias is there. It's overrated, because we treat it like the most important thing. Well, so what am I focus is civil rights law. Now, government has suppressed free speech in the workplace for a very, very long time. Harassment law, basically, there's no, there's no clarity, basically, you know, if you say something that someone can interpret racist, and sexist, your boss can be on a lot of trouble. Your boss, therefore has an HR department to make sure that you don't say anything that can violate, you know, so called civil rights, you know, this, this has been American work life for the last, you know, whatever. But, you know, corporate mid level corporate executives do not write op eds in the New York Times and have some snacks and stuff. They're just going to work and trying to live, right, while the people who, you know, write about, you know, public events, you know, make, you know, shape our narrative are people on university campuses are like, Oh, my God, wait, I can't say these things. I used to say, it becomes the biggest thing in the world. Right. And so, yeah, I think the I think that, you know, the, you know, we've have a lot of, you know, repression of speech in a lot of different ways in this country and, you know, academics, you know, I just don't think, you know, it's not, it's not it's not special, it's getting a little it's getting more extreme certainly, how much do academics matter if you've ever like looked at a you know, if you ever like know, a policy area? Well, you don't like the academic literature, how academics think about it versus like, the people think tanks are people closer to policy. You see, there's often a very wide discrepancy like the idea that Russia, you know, that the US NATO expansion, you know, provoked, provoked Russia into this conflict is it is a very mainstream view and I or at least it was like until the Russian maybe they've been caught up in like the politics of media emotions, but it wasn't mainstream view, you know until whatever a couple months ago and then you know, not really a main mainstream view on Capitol Hill there was a headline though, like, the wash policy of the Rand Paul like blames, you know, blames NATO expansion for like a you know, like he was contradicted by experts. Like they put that in there. You know, they always say that, like when they when they don't like what someone is saying. And so, yeah, you know, the academics, you know, that they think, you know, matters, but they like in a lot of places, they

don't matter. As much as they, as they often think. It's really good.

William Jarvis 45:43

It's really good. Chinese state capacity, is it overrated or underrated?

Richard Hanania 45:49

Oh, it's it's underrated. I mean, the COVID that, like the I think they're crazy to still be on zero COVID. But the zero COVID lasted this long is incredible. And you know, maybe maybe they weren't, maybe they were, you know, maybe they were exaggerating the numbers. But look, I mean, people were pretty early in the pandemic, you know, the corporations were opening up, people were walking journalists were walking around China, they were saying, and it's not like they're chill about COVID. Like, if there were outbreaks, like, I don't think they would be letting Western journalists you know, walk around in life get back to normal. They were they were getting by now. Maybe they're too, you know, crazy about COVID. So, you know, there's a question of like, why is decision making versus the capacity to do stuff? The capacity to do stuff seems very, very impressive. And then you look at, like, you know, the infrastructure building, I think there was a quote, There was a statistic from like, Bill Gates, I think that was about 10 years ago, but he said something like, you know, three years, China used more cement than the US used in the last 100 or something like that. And so and there was actually I saw something like, some like fact checker that quotes like there for subcultural or whatever reason are more likely to use cement and building buildings, and we are okay. Okay. So it's not perfect. It's not a perfect comparison. But, you know, anyway, you look at it, I mean, the, you know, the building capacity of the ability to build infrastructure, you know, high quality infrastructure, like even science, like, you know, the high quality, you know, the number of patents think things like that, which is probably more people capacity than that state capacity. But I think that a wide variety, variety of measures. I mean, it's impressive, though, the Hong Kong, I mean, the Hong Kong and the weaker thing. I mean, people don't like to think about this as a matter of state capacity. But, you know, they had terrorist attacks and shinjang. They had, you know, they had a huge protest movement, or Hong Kong protests central portion of the public coming out, and, and they put it down. I mean, they solved the problem. I mean, whatever you think morally, so that has to come to us for something as far as the capacity.

William Jarvis 47:37

Definitely, definitely. Yes. It's very impressive. Well, Richard, I have I have one class question for you. And this is for my own curiosity. How would you describe yourself politically, if you had to, like Labour's label yourself? Where do you think you'd come down?

Richard Hanania 47:50

Um, you know, I, you know, I'm pretty much I guess I could say, good break me down. I mean, I'm pro market, anti interventionist, maybe even sort of like liberal International, cooperative, cooperative on foreign policy stuff. I'm sort of a reactionary in my cultural sort of sensibilities. And then I, you know, I, it usually manifests itself in Liberty, you know, libertarianism as far as state policy goes, but you know, you know, sometimes my, my, my aesthetic preferences will overcome the libertarian instincts. So I guess, you know, I guess I'm not, I mean, a non interventionist conservative is probably, you know, you know, an anti war for conservative, maybe libertarian, I guess, is probably, you know, the closest as far as, you know, normal categories, people think I've

William Jarvis 48:37

got it. Got it. I love that. I love that. Well, Richard, thank you so much for taking the time to come on the podcast, where can we find you? Where should we send people?

Richard Hanania 48:45

So just my Twitter and my substack. So it's very, I started them, like not thinking about branding myself just thinking about, you know, me saying things. So that's Richard Hackman. Yeah. That's substack.com. And then Richard, my name is just Richard Hannon. Yeah, on Twitter and follow along there. Oh, by the way, I have a podcast to CSPI podcast. There's a CSPI mailing list, which is also at substack. So people should check this out a lot of great stuff there.

William Jarvis 49:09

Awesome. Thank you, Richard. Thank you.

Thanks for listening. We'll be back next week with a new episode of narratives.

Transcript:Will Jarvis 0:05

Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Well, Rachel, how are you doing today? I'm doing good. Excellent. Excellent. Thank you so much for taking time to come on the show. I really appreciate it. I want to get started. Can you give us a brief bio and some of the big ideas you're interested in?

Rachel Craig 0:53

Yeah, so be a little bit from motion Hall focus and satsa. What takes up a lot of my time and attention. So motion halls, co founder and CEO. We do deal enablement for biopharma licensing, mergers and acquisitions. And so I'm sure we'll get to talk about a little bit more. I think the big vision there is that we're trying to move Life Sciences innovation faster from patent patients who are trying to hack the entire life sciences tech transfer cycle. And know my background, usually what people want to know, when we're talking about motion Hall is how I got into it. So I started coding when I was five, not because I was brilliant, but because my dad was really nerdy. So it's like, alright, Rachel, take this computer. Here's a book of basic, this is what we do. So I grew up coding first and getting online early running web based businesses as a teenager, everybody said, Rachel go to Silicon Valley. And the joke is on me, because eventually I did. But at the time, I was like, if everybody says this, Then I better do something else. So I went and did philosophy and computational neuroscience, and really fell in love with the life sciences. Then through that work, I started to watch some of my professors try to spin up biotechnology companies and mobilize their innovation out to the market work and help people and I thought, Gosh, why is this so hard? Why are they so stuck? And why is somebody who's just really the world expert trying to mobilize their life's work, and dealing with all this complexity to just to try to move what they've discovered, to where people can use it. So that's a bit about my background, and why I do what I do. And then other big interests, I think, then we go beyond motion hog, always interested in solving big coordination problems. I'm interested in progress and impact. And I think a lot about how we can apply what we've learned that motion Hall and tech transfer there to energy and climate.

Will Jarvis 2:35

Excellent. Excellent. Well, I really love that that vision. And you know, I've really been interested in life sciences innovation, just as a topic I like to read about, I'm no expert at all. But it does seem like you know, the price to get a drug to market has just been expanding rapidly there. This is like, this is law. It's like anti Moore's law. It's like, it's a room's law, and it's that the prices of drugs are, you know, it's doubling every so often, every couple of years is getting more expensive, more expensive. You know, and I remember the internal rate of return for pharmaceutical companies, I think went negative like last year, a couple years ago. I don't know the exact exact figures, but it seems like Like, like, what's the big stumbling block? It seems like we have a lot of innovation, we have CRISPR, you know, maybe the scientists are less productive than they were 50 years ago. And maybe even significantly, so. But we're still spending a lot more money directed toward these these scientists, we're getting some amount of innovation, but why are we have like, where's the stumbling block in tech transfer? From science to like, actually, in vivo in patients? Yeah, like, what's the big place? Is it like with the universities with the IP protections? Like, is it matching scientists with companies? What does that look like?

Rachel Craig 3:44

Sure. Um, yeah, and there's probably, there's a few different ways to answer that one, I'll answer with the one that I just said, I think, sometimes I think a lot about, you know, where do people tend to go, they tend to go if we just dumped more money on the universities and basic research with that help? And the answer is probably right. That's not the one I'm most excited about. You know, if we just waived all the regulation, would that help? I'm, uh, I'm less excited about that, too. Although, you know, I'm sure there's some good arguments in favor. The place that I think about the most is that these transfer points. So I'm gonna give you some context here. The average Biotechnology Innovation changes hands four times before it ever reaches a commercial patient. Right. So in addition to that, you're depending on how you count it $1.6 billion $2.6 billion for drug, you know, 11 to 12 years to get it to the first commercial patient. It's trading hands multiple times. So maybe that looks like transfer to the university. Then it goes to a little biotech, that biotech sends it to another biotech, that biotech sends it to maybe a farmer in Japan, and then another company has to pick it up for the rest of world right. So that's a lot of transfer, just to get something to its first commercial patients, and add all of those transfer points. There's a tremendous amount of complexity and coordination that has to happen both between the biotech that owns the IP rights and the people who work there and understand it, and the company that's going to pick it up and finance, next stage of development and distribution and so on to make sure that I say it in a way that's impactful enough, it's very, very hard for human beings to get their heads around everything that needs to happen to go through that if you transfer points successfully, right. So you've got huge teams of scientists at a potential pharma company that's going to pick up that IP that the business teams, you've got the legal teams on both sides of the fence, and everyone has to agree and see the opportunity in a somewhat similar way just to get it off the ground. And so if I can kind of extend that line a little bit more, from my vantage point, I talked to companies with really incredible biotech innovation, every day of my life, it doesn't appear to me that there's a shortage of innovation and opportunity out there. What there is, is a lot of trouble understanding where the real opportunities are matching that up with capital. Right. So capital allocation problem, and then coordinating people to actually distribute the best of that science out to people. Does that make sense?

Will Jarvis 6:11

Yeah, absolutely. Absolutely. It. It makes a lot of sense. So it's not you don't think it's like a low hanging fruit problem where it's just gotten too hard to you know, find new ideas or anything like that. It's actually just like, that we've got this really Byzantine tech transfer process, which prevents us from getting real innovations like into people.

Rachel Craig 6:30

Yeah, I think I wouldn't even call it Byzantine. I think some of the things work, it's just maybe the complexity around what it takes to coordinate humans there is bigger than it was right. So I see, I definitely can't believe that there's a shortage of innovation, to talk to such amazing companies all the time. And they're everywhere, right. So we've got companies that we work with incredible innovation coming out of Chile, who are now able to access the world, right, and, you know, all these platform technologies that spit out incredible numbers of drug candidates, the complexities, understanding, coordinating understanding on the other side. So something we talk about a lot is, you know, it's great to be novel, because if you've done something novel, and it's a breakthrough, you can change the world. It's also bad to be novel, because nobody can understand it, right. And so it's really, really hard to dig inside these companies, that you absolutely need to license your IP to get your product, right, because the costs are high, because you need all that infrastructure to distribute drugs successfully to patients, you have to go to the transfer point, which means you have to arrange for the people at that company to see your science believe that it's real. It's similar to like, a late stage VC investing problem, right. But I'd say the complexity has exploded, because you're not just evaluating business fundamentals, technology of people, but you know, maybe some very, very complex new science, and you've got 100 opportunities to look like, look at that per day. Does that? Does that kind of make sense? Where there's a complexity point there?

Will Jarvis 7:55

Absolutely. Absolutely. Yeah. And there's, there's all these crazy, like, knowledge transfer problems about, you know, you know, how do you decide what's what I'm curious, is, how much of this this problem is just the fact that, you know, there? We don't see scientist founders? I'm not sure why, like, you know, in in it, yeah. You know, founders can, you can have a founder led company, you can take it all the way from nothing to, you know, IPO the whole way through, this is very common, it's rare that it doesn't happen other in other ways, relatively rare, but you very rarely see, like scientists, led companies go all the way through. And I wonder from the back end, that means they don't get much liquidity. They don't have much ability to invest in, you know, companies, they know they will, will be successful. They've got special expertise in that front, because they've actually been through the whole process. So you don't these people don't really exist, there aren't many of them. And then you don't have these kinds of special capital allocators that can signal to the market like, this is a great idea. You need to invest here. I don't know. Does that make sense at all?

Rachel Craig 8:52

Yeah, no, I think I think about that, and problems like that a lot. Right? So I mean, I think biotech and solving problems in the life sciences building a company in the life sciences, not always, but usually pretty different from building a tech company, it's much more rare to get somebody who's a world expert in their particular slice of novel science, who can also lead a company and become a fabulous capital allocator. They're out there, but it's much more rare. Could there be more of them? I think there could be right, so then what do we need to do to make it so that there could be more sort of empowered, empowered scientific founders that are leading companies maybe helping nurture the next round of companies, particularly around they're either going to focus around their AI or is it scientific expertise, right, because there is that complexity there. And, you know, what they think about when they're thinking about this, this problem? Another really big difference for scientific founders and for biotech companies are trying to build is just the right enormous costs of drug development, right? And then they've got no so on like, a tech company again, with some exceptions there. is no easy route to revenue. Right? Right. So if you wanted to get leverage on your investors, which a lot of us who are building software companies do, so that we have more choice, then you build revenue, and you get, you know, Paul Graham's ramen profitability or something like that. But you can't do that if you're a biotech investor, you absolutely need that capital of large amounts of adjust to get the company moving. And so that means investors really have biotech founders over a barrel, right. And it's very hard for them to generate leverage. And so it's much more common for them to take more of the company to take. I mean, I've never seen a biotech company structure with super founder shares where the founders have control, right? Usually, the VCs get control of the company very quickly. And then I think the attitudes and norms there are really different, sometimes for the better of the company, sometimes for worse. So it's common to me teams out there that that will find it, they like back it and then fire the founder scientist and the rest of the team and replace them. Right. So something that was much more common in tech, I think, before Paul Graham kind of came in introduced some new norms. Right? And so what would a healthy set of norms look like for biotech? And, you know, I think about that all the time. I wonder if you know, we'll be in a position to socialize some of them. From our vantage point in motion Hall, I'm sure there's other people who are thinking very hard about how to how to do that to

Will Jarvis 11:19

Absolutely, no, yeah, it, it makes a lot of sense. And it also, it's notable, I remember, this is this weird anecdote, but in college, like, I was looking at a wide range of startups doing some projects at the business school, and, and I was looking through things, and I noticed that most of the biotech startups were led by NBA founders who were clearly like, you know, they hadn't had the idea originally, right. And so this was like, very, very distinct from most successful IT companies, you know, it does happen, right, you'll have like an NBA founder, but it's much more rare. And so I it is that it's very notable, right, like, that just is kind of a signal,

Rachel Craig 11:54

and it kind of runs all the way up the chain. Right? Um, you know, and I think it's harder, right? If that's scientists founder has to be so focused on being the world expert in their science, right, that it's really hard for them to cross that bridge, they have to trust, there's a whole world of I think, not to pick too much on MBAs, but you know, often somebody with lower conviction, who's looking to make a buck maybe has a different sense of mission around the company. Right? And, and so things get choked up. Like they get choked up there. Right. And I don't know how we, you know, I think you'd have to change the whole culture, maybe create a lot more transparency around opportunities, which is something we're trying to do definitely to, to drive that down. Yeah, well,

Will Jarvis 12:35

and maybe like you said earlier, like, it's even worse that the NBA is indicative that oftentimes these people were installed. Because by you know, VCs, because we need, you know, we need this, like, the business person to come in and like actually run things and I don't know, like, and they don't have that specific vision of like, what the future will be like, it's just kind of like a job at the end of the day.

Rachel Craig 12:55

Maybe? Can I say something nicer about some of the business people? Think you do you see that structure. But I think particularly at the biotech company level, you know, we do see a lot of really good partnerships between, you know, a scientific leader who has respect for a business teammate that they've selected, that person probably has like a PhD in molecular biochemistry as well, maybe they've also got a law degree or an MBA, and then there is an alignment and that everyone understands, like, this is their life's work. There's a lot of capital, you know, they can make money here, but also, you know, they're very focused on their patients. I think sometimes the job is just hard. And there's, to me, there's another opportunity to little light shone on the people who are doing heroic work trying to mobilize new medical innovations to patients. Right, and doing that with a lot of mission orientation.

Will Jarvis 13:45

Absolutely. No, yeah, definitely. And I think too, in the box leadership works really well, you know, like a business person technical person together, it off can be can be quite helpful, kind of dividing up those duties in a robust manner. Yeah, I'm curious, do you see like, this kind of situation changing just at the macro level, you know, interest rates are very, very low. This has pushed a ton of capital into the VC market, you know, it's up to like $650 billion last year, and most of that, it's just people searching for yield, right? This is like a longer like, 800 year trend of interest rates, like intersecting like, getting lower and lower and lower. Maybe we're running out of days, we're not sure why. But interest rate, right, sim seemed to be like, they will probably be lower in the future than they are now. But this is my guess, do you think like that will encourage more capital in the, into the markets. And as a result, you know, scientists founders will get better terms in the future because they, you know, if there's more capital, there's more competition for that capital. And maybe they don't have like the ramen profitability kind of leverage, but at least like there's more competition for capital, if that makes sense. Yeah,

Rachel Craig 14:50

I guess my answer is maybe on a long enough time horizon, probably. But short term, why do I think short term I think it really looks like a Mass guns right now a lot of capital being misallocated, the companies don't have the talent and structures to mobilize it properly, right. Usually when there's waves like this, there's a big, you know, people get their fingers burned, and then they recoil. And, you know, my short term bet would be that we're gonna go through that pattern. Before we get to this kind of golden age of biotech, I think we have to get there, there's so many hands working on it right now. And everybody understands the importance and the COVID pandemic shone a lot of light on that. But if I look at where the money is going, right now, the way it's being used the lack of talents in the biotech space as well, right, so there's scientific talent, I think the innovation around that is actually pretty good if you ask me, but the talent with that, I think, also that mission orientation and drive is in such high demand, right to actually successfully mobilize things and coordinate a team to do that. And that's where a lot of these companies have been capitalized recently are falling down, because they're hiring quickly, like a Blitzscaling. Startup does, but they're a biotech. And it just takes more time and attention and a study your hands to actually move things successfully. So I think a lot of them are in trouble.

Will Jarvis 16:07

Gotcha, gotcha. Now, that makes a lot of sense. And these things can't go backwards. Like we saw it with the.com bubble, it took a whole generation to kind of for that to filter out. And these things can take a long time to work out. So I'm curious, you know, I know you probably can't go into specifics, but it, what I'm guessing is, is that what you do at motion Hall is you try and match these inputs together, better to get more, you know, more successful innovations on the back end. So you've got, you know, early stage scientists to get all this capital. And, you know, there's, you know, the contract research organizations in between and all these different steps you have to do it's very complex process. And if you could coordinate this better, you could get more outcomes. Is that correct?

Rachel Craig 16:46

Yeah. And so I think and when we talk about like that failure rates in drug development, right, so biology is hard, I would say, oh, maybe only one in 3000 drugs that gets started actually makes it to a commercial patient, right? So could you drive down everything else that introduces unnecessary risk in that process, and you know, in terms of motional, so we don't work with CROs we don't do any sort of matching or driving down complexity, they are all about this matching problem, right? So if you have to take your IP, transfer it to another part of, you know, to another group, whether that's another biotech or pharma, which you do, because that's how you're going to, for most, for almost every biotech company, that's how they're going to bring revenue into the company to fuel the next round of development in their pipeline, right? And then Pharma has to buy to fuel what's in their commercial marketed portfolio? And so if you have to make these transfers, then yeah, not just matching them. So so we'll do the matching. Sometimes people say we're like almost like OKCupid for biotech and pharma companies, right. So sort of a logical matching, but then also providing all that context and best practice around it to core help people coordinate to understand the match, because it's one thing to say, hey, look, bio in text, you know, mRNA vaccine, Pfizer is a 90% match for what you want to do now that there's a pandemic, right? You know, and then there's a lot of information that's needed. Do I really believe that? That's true, right. How do I know that it's true? How do we see that this is the right partnership on both sides of the fence? And that's where that's where I think we're trying to shine a lot of light. And then we do bring huge amounts of data to bear and workflows around that so that it's easier for people to see each other. What's a good analogy for that? You could almost imagine are merging together something like OKCupid with a Bloomberg terminal. Right. So yeah, if that's helpful,

Will Jarvis 18:29

yeah, absolutely. Now, that makes a lot of sense. And it seems like traditionally, excuse me, I just don't know much about the space. But yeah, traditionally do people that are trying to like, buy this IP? I'm assuming? Is it m&a people at large pharmaceutical companies? Is that kind of correct? Yeah,

Rachel Craig 18:47

let's talk about the structure. Because I think, okay, right, you have your corporate development that's doing m&a. And maybe they have some different focuses than so in the life sciences, you've got these really structured groups on both sides of the fence to deal with these transactions, because they really are lifeblood of the industry. So it's different from other verticals, right. So farmers will have their business development and licensing group, right, and you can find them maybe at Pfizer, it's a 70 person group or something like that. And their job is to search and evaluate, right, so to look for IP that they can license in, that aligns with whatever strategic priorities are top of mind for them. They're scientists around the playing a role. And on the biotech company side, you've got both your heads of corporate development who are looking at either looking at the m&a components, buy or sell. And then you've got your chief business officer who's looking at licensing and IP, maybe from a university and then licensing IP out. So there's a huge what I'm trying to say, there's departments and job functions that all they do is think about these transaction pieces for IP on both sides of the fence.

Will Jarvis 19:48

Gotcha. So so it's matching those two together. It's making that easier, it's matching

Rachel Craig 19:51

those two together. And then and then a little bit of breaking it up, right. So you might think differently about buying a whole company than just licensing IP even though you get total rights to that piece of science if you license in the IP?

Will Jarvis 20:03

Gotcha. And traditionally, is it just kind of like a super manual process where maybe, you know, like, Sally down here at Duke, and she's got a great idea. And, you know, like, maybe there's like these, like, very rough networks of people. And maybe you're on Google trying to figure these things out, like I,

Rachel Craig 20:19

ya know, I think it's been through, like, several iterations over the last so many decades, right. So if you go back far enough, it was really, very, who, you know, very geographically locked, lots of networks of trust. And that makes sense, because there wasn't a lot of information available. I think over, particularly in the 90s, a lot of databases were developed, tried to scrape clinical trials and get manual input on the world of biopharma. And those have helped, right. And so I think before motion Hall, the best practice was a lot of poring over those databases and Googling, plus using networks of trust, and then still a lot of geographical locking in hoping you bump into the right person at a conference and spray and pray strategies to try to match with the right person. And then I think some of those dynamics that you see in venture come into play too, right. So, you know, people do move based on fear of missing, you know, greed and fear of missing out right with these with these products. And I think what we're trying to facilitate with, you know, now a global customer base, and a fair amount of success is, you know, can we drive down that geographical locking, by making this really transparent, showing people exactly where the fits are and what they need to know, to actually start to build a successful relationship with the company on the other side of a transaction? What else has been great there? The pandemic did do a few things that are very good for the biopharma industry. And one of them is that instead of having to meet at conferences and shake hands, people get on Zoom now with their video on and that's been really, really good for companies that are, for example, in Chile, building something absolutely tremendous for cancer or in Australia or Korea, right. So it means that they've got more windows plus the tools to connect to the right people and and move some of that globally, whereas in the past, I think people literally walked around Sandhill Road and South Bay and you know, tried to meet the right person. Say I've got a cute story. So one of our board members, Rod Fergusson led the Rituxan deal for Genentech and so Rituxan is one of the most important cancer drugs from the last decade and more on the market is available to patients everywhere. And that's more than a billion dollars for Genentech every year. I think it was past two last time I looked. And so literally rod found IDEC and the Rituxan molecule, because they were down the road from him where he lived. And then he was able to license that, for what he says is a song but $7 million, right. And people really didn't fully understand the potential of that drug at the time. And yet, it's been absolutely incredible. Right? So that's how it has been done. Wouldn't the world be much better if you could see globally where all that innovation is was much more transparent if people could connect and have the right conversations faster? Right? So that's, that's what we're trying to facilitate?

Will Jarvis 23:14

Got it? Got it? No, I really love that. I, I, I'm curious. It's such a it's such a big problem, right? Because, you know, if traditionally, people are literally like, just this incredibly ad hoc manner, and you can in some way, kind of much more systematize these things you can get, you can bath much more important together, get a lot more outputs on the back end.

Rachel Craig 23:36

So realize I got the redacted number, it's really wrong. Like 10 million. Yeah, that's right. I'm gonna fact check me.

Will Jarvis 23:43

So that's good. That's good. Well, I'm curious do um, when you're looking for a successful drug candidate in this, this might not be exactly in the area you guys are working in, but you're looking for a successful drug candidate like retox. And generally, it seems like people have taken a very kind of statistical approach, it's like, we're just gonna get a bunch of like compounds and try to find them or something like that. Whereas it seems like the best way to do it and the way most drugs have been discovered, I read this kind of popular science book on it. So I don't know much about this. But it seems like most the way these drugs have been discovered is because people find some big something that does something like a big effect size. So you know, like, this is how we found like, some of the first cancer drugs and all these different, like antibiotics and things like that. It was just like, wow, like this is doing something. It's doing, like a big thing. And then you can apply it in different areas. So I don't know, like, Are there any, like heuristics you look for when trying to evaluate candidates like molecules?

Rachel Craig 24:40

I mean, I say there's gonna be a lot of answers. I think some of that just falls outside of my expertise, right? It's going to be so different, depending on different companies. What we look at much more boring heuristics, but I think they're worth noting so you know, when we're working with companies will say look, you're you're going to know your Science best. So apply your best scientific lens on top of all the candidates that you have, right. And sometimes we're working with companies that have the the 700 candidates that they're looking at, or you know how many permutations of clinical trials programs that they could run. So pick out the ones that are the strongest scientifically and then let's apply a business lens over top of that, right. So if you know that you have to match this is a constraint on the market, right? If you know you have to match with a company that can help you distribute that, then before you dump all this money in here. And maybe somebody's got a solution to this, this is not ideal. But if you know, you have to match them, let's see who's out there that you can even match with, right? Because the way that you're going to get more capital to fuel, the next program that you want to develop is by finding that partner who's going to put capital back into your company and take it through the next step, right. And so one of the places that companies fall down is optimizing scientifically, but then not thinking about the fact that they're going to have to partner and if you build something that the rest of the biopharma market doesn't want to cooperate with you on or that's very hard to get them to cooperate with you on and that innovation just sets. And I think a real shame there is right, the patent ticker is going right, so becomes less attractive, the longer it sits, and the longer you have to fight to get somebody to pick it up. Right, then the animation is really at risk.

Will Jarvis 26:14

Gotcha, gotcha. No, that makes sense. It sounds like the red haired boy problem they talked about in in like it venture investing. Have you ever heard of this?

Rachel Craig 26:24

I don't know, the red haired boy problem telling me this?

Will Jarvis 26:27

Yeah. So it's a you'd kowski kind of idea where, you know, if you're an early stage investor, and later stage investors just refused, like, they don't like red haired, you know, founders, for whatever reason, are purple, like you name like some characteristic, even if like the business is a really good idea if they can't get capital later stages, because, you know, people aren't interested in some aspect of the company like we don't invest in like marketplaces, like, if common knowledge is marketplaces are a bad idea. Even if it's a good idea to invest in the company. If they can't raise money later, you're much more solid. This is exactly

Rachel Craig 27:01

how biopharma works, right. And so right now, like, Alzheimer's is super on popular. Diabetes is super popular, right? I've seen amazing drugs in the diabetes space that have a real value proposition to just like, cure diabetes, right? Amazing. It's almost impossible to get people to look at it. When I'm talking to those teams, and like luck, okay. Like, I do believe if you have something that good, you can find buyers and partners, but we're going into heroic sales here. Right? So, um, and, you know, I'd love to work with you on Heroic sales. And then, you know, are they up for that type of task, right when the markets really, really rough. So it's absolutely like that. And it goes through trends and fads, just like the tech scene does. So right now, a lot of capital is going into web three, maybe if you're not web three, certain investors don't want to look at you. Something we hear from biotech companies is everybody's interested in immuno oncology right now. Nobody wants to look at a chemotherapeutic. It's viewed as last generation, but look at the lives that I'm saving, right? And so then we say, okay, how do we get into figuring out how to develop you? Right? So you get into heroic sales, right? How do you develop those, you know, fit points that are out there, generate understanding, again, I always think there's a way but but the it gets harder and harder and harder, right, just like I think it doesn't take and maybe some ways even harder, because if you're trying to raise capital, and what you're, you're the red haired boy, you can probably find somebody who doesn't hold that bias. And, and get that done. If you're a biotech company, you have to claim, usually, you have to convince full committees of people, right. So there's just a lot more stakeholders, to arrange to have move. And so that just really exacerbates the scope of the problem and how much heroic efforting it takes to get it over the fence, it will give you something that I think is really neat. That's also been possible with some of the new transparency in the space. It's something we're working on. But there's other ways to look at this to the farm. The big farm is right, like your Pfizer's have the biggest committees, right? And they have a lot of trouble coordinating amongst themselves, right. So, um, you know, and because science is complex, and the business is complex, adding more headcount money doesn't actually help you solve that coordination and complexity problems. In some ways, it makes it worse. There's all these little medium and specialty firms out there that are maybe not beholden to the same rules that have smaller committees or fewer decision makers, they've been traditionally very hard to find. But it's easier to match them now and find them now. And so sometimes there's a way to get something moving through one of the when right provided that the biotech and that pharma can come to an agreement. And the edited thing was like that maybe the board blocks it because it's not a big enough deal. Right. So yeah,

Will Jarvis 29:50

that's good. I mean, that's a really good development, right? It's like like smaller players who can can actually like, get more conviction because then what can convince like large groups of people internally Yeah to buy into, like good ideas can can really help.

Rachel Craig 30:03

Absolutely. I,

Will Jarvis 30:05

I'm curious, it almost sounds like the Yeah, like the venture model model where like partners can make. This is not all venture firms, but some hedge funds on the model, right, you know, partners can make their own decisions. And like, we just kind of like outsource that all, it seems like important to do that. Especially in biopharma, because, you know, like, trends can really influence like, whether or not you you invest in the, you know, it's just unpopular. You know, like, it's almost like the, the problem I see where, you know, football coaches never go for it on fourth down, even though they always should, because, like, you know, like, if you still lose, you lose bigger, and that looks worse, right? Nobody ever got fired for, you know, like hiring a Harvard grad,

Rachel Craig 30:47

even if they're like a bad fit. That's right, very similar problem. That's right. Know that, um, that kind of fear is a really big problem in the farmers, right? And nobody wants to be the person who did like, you know, what, this multibillion dollar stem centric steel, but it fails, right? Like, two people yell and scream inside the big companies, both about missing things and about buying a dud. And, you know, there's a lot of capital that goes into it, and the stakes are high, right? So the pharma companies know that if they don't renew their pipeline, right, drugs go off patent, they're gonna go generic, which is good for all of us, right? The way the machine works is good for all of us, but it means they have to renew and have another big moneymaker in there before their portfolio goes off patent. Otherwise, they're looking at layoffs and their stock price goes down. And so the tension and the pain there is really real for them. And I'm sympathetic to that, you know, there's different comp structures to the try to push these people to make deals on time. And then, you know, a lot of folks in buyside licensing or company m&a, right. And sometimes I'm just just for context, sometimes m&a in the biotech and pharma space just looks like another straightforward transfer of IP. That's right. So it's less moving parts, right? We're buying the IP, so this company can move that. You know, you'll hear a lot of people say that the hardest negotiation they have to go through is and with the biotech company, it's with their internal stakeholders, right. So you could have even a few really motivated champions for a piece of science, and still have been spending a tremendous amount of time on that, I think, a really amazing example of that. So again, Rod Fergusson, who's on our board has done two sort of oral histories with us. One is on how he led the purchase of a toxin and what that was like for Genentech. The other he does is talking about the auction of Herceptin, which is another really important molecule. And what's fascinating about that is what he needed to do, as a BD person at Genentech under Roche to auction that and he had the world's CEOs from pharma companies coming to buy this at the notion that Roche was out of the deal. And the way that works is, so Roche didn't believe in Herceptin. And if you read the story, where you can see it's only once everybody else wants it, does Roche come back in and say, Actually, we have a first ride on this. And now we're going to exercise it late in the auction phase. So those stories are amazing, because things still work that way, even though the stories are dated. Now, those human realities and coordination realities are still how the drug industry works and struggles to understand things.

Will Jarvis 33:21

Absolutely, yeah. And it sounds like, just like everybody there, they're just highly mimetic, and it's like, and that drives a lot of light, a lot of activity they, and a lot of their decisions, right? You just talked about Roche, like, you know, they didn't want it until everybody wants wants it. And they

Rachel Craig 33:35

want it, ya know, I mean, so. So, yeah, very similar in terms of, you know, greed and fear of missing out driving a lot of decisioning. And then if you've got a team on the other side, who really knows how to amplify those dynamics, you know, then that can help them get a deal done. And it can also contribute to maybe not the wisest allocation of tech capital. Right. So a lot of challenges there. Yeah.

Will Jarvis 33:58

It's a It's really fascinating talking to you, I, you know, I've had some my suspicions that you'd probably, you know, works like this and drug development, but you know, I don't know. But, you know, the ideal state world would just be like, well, we all sit down and objectively evaluate what are the best molecules and then we move forth through the process. And instead, it's just like, it's, it's incredible how it actually works.

Rachel Craig 34:19

I mean, I wonder, if you look way, way into the future, right. You know, maybe there is some sort of, you know, with enough data capture and a big exchange, right? It does seem like it'd be possible to get line of sight on where the best innovations are, where the best matches are moved them or the whole structure changes, right. But um, what do I tell people? I think I'll be old. You know, quite old. By the time that happens. I'd love to help. Yeah, absolutely. Right now, it's still very people, right, right now, it's really about helping people navigate these dynamics. I think that's the most powerful place to make an impact.

Will Jarvis 34:51

That makes sense. That makes sense. How did you first identify this problem as a problem? We're solving that like it? Was there an aha moment where you realize Uh, wow, this is, uh, this is this is an area where a robust solution could really, really help things, or was it just kind of like a gradual process? And the second question going off that is, you know, how sure, were you that it would work?

Rachel Craig 35:14

Yeah, those are both great questions. I'd love to say I could tell right away that it was the gradual, is a gradual process with a lot of horror, I think is what I would say. I think everybody wants to believe that the world works better than it does. And it's poorly understood. Right. So like we talked about earlier, people tend to have this perception that all the innovation happens in the universities, and that the farmers just take it and charge a lot of money for it. And that's really not true, right? There's all these biotechs in the middle who are doing a tremendous amount of work. And then right, all these kind of transaction points that we've talked about. How did I get into it? So I have that three point background I talked about, right. So I grew up coding and running my own web based businesses, I did neuroscience, I watched my professor spin out, I started to work with them. Because I saw that problem, I started to work with the CEOs and boards of biotech spin out companies. And at first I thought it was going to buy and I was like, these are data problems, right? There's information problems here, I'm just going to buy the software that must exist to help solve these problems. And then I did find these kind of 90s era databases. And it's a really classic tech story, right? Why is everything? So broken? Let me call some people up, it was pretty easy to find people who are willing to talk to me, it's like, what do you like about the databases? What are you not? Oh, they're full of duplication errors, and they don't have most of the information they need. And they're manually curated and focused on public companies. And, you know, I guess, because I have that tech background. I was like, Okay, there's room to do a lot more here. But even then, I think it's been a multi year journey, just appreciating the full scope of the complexity, how inefficient and opaque market is, it's truly horrifying. And to amplify that, you know, the young people who join my team are people who just haven't worked close to these problems in the past, as they're oriented with motion Hall, you can almost seem like, it can't work this way. It can't be this bad. No, it's just bad. Like, you know, we're sitting on top of, you know, we see some of the world's most amazing innovations for COVID, for cancer, for preventing future pandemics for diabetes. And, and then we look at the teams and we look at the challenges they have. And this is it. Right? Like it's a really big, messy problem area that suffers from the information complexity, the opacity, the market. Yeah, human limitations, lack of talent. It's a mess. My take is, it's

Will Jarvis 37:34

a mess. Definitely. No, that makes sense. And this question, I always like to ask founders, because I'm always trying to try to level set this. You know, Elon says he thought there's like a 10% chance he would be successful with SpaceX, you know, like, like, Did you you know, like, I don't know, did you assign odds to it? Did you? And like, exactly, exactly. Yeah,

Rachel Craig 37:58

I think, um, what do I think? Because what the vision would be not just to solve the places that we're playing now, but you know, what, how much can we do to move things from pot into patient more efficiently in a way that's better for for people and patients and companies and economies? What am I thought, you know, I did think getting into this, that it was a lower risk prospect than some of the other things I might build, right? Because, right tech, life sciences, a bit of business, I had a lot to learn. But that's an interesting three point background. And I am very tenacious, and I'm good at eating complexity, as like, this is a really ugly baby, right? This problem is, it's ugly, nobody wants to love it. In fact, nobody else does love it, I took a good look. I don't I still don't think anybody else loves this problem, but me. And so, you know, that gives you time to become a real expert, and managing this really important on labs baby right in there all over the place. And so those things made me feel like if I pursued the problem method at all, you know, with a strong methodology, and followed strong playbooks, we would be successful. And so that's worked, right like we're now a global company, the technology works people told me you'd ever be able to do it. And you know, we're helping companies all over the world you know, the grander vision right? How far we can take this I think I've still I wish I could say I have 100% convinced eviction will get there but no, they're still open questions for me how far can we really take this and it probably depends in part on you know, how many willing hands want to join and help me push the vision who are truly exceptional, but um, you know, for the pieces that we've cracked already they are they are done. It's just scale now, right?

Will Jarvis 39:46

Absolutely. Absolutely. I love it. Do you think generally people should be more confident about Yeah, should people that I guess at the metal level, be more confident generally, about their ability like if they plan well and they have a unique insight to kind of do something that kind of gives them an outside return. Does that make sense?

Rachel Craig 40:08

Yeah, yeah, people shouldn't? Yeah, I think so. I mean, there's always this kind of funny conversation happening about well, is starting a startup actually risky, right in the tech scene? And, you know, for a lot, you know, for some people, the answer is yes, you've got to know yourself and think about the opportunity, and who you are and what you bring to the table. But I think there are more people for whom it's not as risky as it appears, right. And, you know, you plan, you certainly have to grind and put in the time, but the outsize return is there. The networking opportunities and learning opportunities are fabulous. And maybe it takes a little bit of bravery, right to that classic. And, you know, it's bravery in shorter supply than genius, perhaps more people should more people should seriously consider it. And then it's about being ready to think long term, I guess, the other pieces, you know, what's the good advice, but good advice is think about what business you're uniquely suited to build that nobody else is building? Right? I did that. You know, think about what you can do on 10 years, not just one year. So people tend to overestimate what they can accomplish in a year and be very impatient and think, much more poorly about what's possible if they dedicate themselves to something for 10 years, which, you know, things compound. So if you're willing to compound over a decade, you can accomplish a tremendous amount and really change many, many lives, not just your own. Yeah, you know, I don't know if I'm saying particularly normal here, but I do wish more people would try. And I think, you know, it's really attractive about going to these ugly baby problems, to kind of talk about that as you're not just trying to catch a trend or away if you're looking at a real problem. That's all in love that exists out in the world today. They're everywhere, especially if you're willing to go places that aren't as hot or trendy. Right. So maybe less fun, maybe where you're going to be more alone, but, you know, boundaries of you know, government or legal complexity deep inside companies, right, finding things that have really high leverage, they're just being neglected, because no one has the time to chase them. You know, with the right tenacity and methodology, I think it's, I want to say easy, but it's very predictable that you can build a business there, right, if you just stick with it. It's not a good answer.

Will Jarvis 42:24

Yeah, I think it's really good. And if I had to summarize it, the message I think I get from you. And this is from like, third party perspective. I don't know you that? Well. But I would say is, you know, you should spend a lot of time thinking critically about, you know, like, how you can do it and plan and like, have a robust, like, process for doing that. But once you've done a lot of critical thinking, and like, you know, you have a good shot, you shouldn't be afraid to be be confident you can go out there and actually make something happen.

Rachel Craig 42:53

Yeah, absolutely. Right. And I think, I think if you put in that time and thought, it's easy to become convicted, right? Like, it didn't take me long to be like, Okay, this is really s, I've done my research, I understand the path to get to revenue, I understand the path to finance. And I just have to, you know, be ready to do what it takes, right? So um, what's an interesting one, for an enterprise sale, like what we do, it can take up to four years to really crack a predictable sales cycle. So you might be looking at four years of unpredictable sales and difficulty cracking that sales cycle. And it did take us a long time to crack the sales cycle. But if you know that you budget accordingly you plan mythologically, right, then you're not gonna be discouraged. And that's a huge accomplishment when you do do it. And then like compound, compound compound, right?

Will Jarvis 43:41

Absolutely. Absolutely. Then nobody can really catch you. But I think, yeah, there's nothing like enterprise sales cycles. They're quite bears. Very cool. What do you mind if we do a quick round of overrated or underrated in our last couple of minutes? Sorry, let's do it. Absolutely. So Halifax, Nova Scotia, overrated or underrated?

Rachel Craig 44:02

So, you're gonna see this one? It's funny. I usually don't talk about Halifax because most Americans don't know what it is. Like, I'm from the East Coast of Canada, like like Toronto, and I say, Yeah, sure. Well. Let's move on. Um, but um, what Halifax is my hometown? It's a university town. What I really love about Halifax still, we hire a lot in Halifax. I think the talent that comes out of the universities there is underrated. And I'll share that with people even though it might give me more competition for that talent. I think incredibly talented, hungry people huge intake of immigrants. So Canada's really, really good at opening the door to talented immigrants. A lot of them land in Halifax. Great. I'd love to meet them. And then they go to the universities and they're excellent. So that's wonderful. But Halifax beautiful to visit in the summer, too. So I'll give Halifax underrated.

Will Jarvis 44:57

That's great. Discourses on Livy over a underrated.

Rachel Craig 45:00

Yeah. Sounds really cute. get me in trouble. Um, I think it's underrated and maybe vehemently so right. So Machiavelli gets a pretty bad rap, but I'm a little nervous talking about it. So he's maybe maybe gonna judge me. But I think if you read Discourses on Livy, what did I really appreciate about that book? I think I am with the campus sees Machiavelli as a patriot who's really trying to figure out what's right. For the people in his nation. Some of the things that he talks about Discourses on Livy digs into sort of long standing truths of how people think, and organizing can be moved, right, you can recognize and extract those truths without having to, you know, then go with a medieval prescription of how to apply those truths, right. But if you want to solve grand global challenges, coordination problems, work with large groups of people, then it really behooves you to understand how people work both as individuals and groups, right. So there's a saying that great CEOs become masters of people. And certainly my experience on this journey is that that is very necessary and so underrated and doesn't deserve the bad rap that it gets. But certainly, you need to read it with a modern, you know, I write and think about what's true to extract there and what doesn't, what do you what can you leave behind? Because it is a very old book.

Will Jarvis 46:24

Absolutely. I might mispronounce this edge of minicab.

Rachel Craig 46:29

Also, I think you've been great, I think you did great. What do I want to say about the Alzheimer's drug? You know, I think that one's been overrated. I think the consensus view is now that it's been overrated. You know, what's really sad is that, with that one moving, there was a lot of hope for Alzheimer's companies. I mentioned earlier that it's an unpopular, it's like a red haired boy, nobody wants to work with Alzheimer's. And yet, there are fabulous interventions and treatments out there that just need some financing or someone to pick them up and take them the rest of the way. And there was a lot of hope, with that drug, that the industry would start to change its mind and attitudes will change that easier to move through but kind of Alzheimer's companies are doing. Yeah, they're doing heroic sales and the winds have really blown in the opposite direction for them. So I've got companies that I work with right now, where we're talking about how that's impacting the way that they're perceived and how we use and the tools that we have to overcome that challenge.

Will Jarvis 47:27

Awesome. Bertrand Russell, overrated or underrated?

Rachel Craig 47:31

I don't know. I don't know the answer that why I like Bertrand Russell. I don't know what most people think about Bertrand Russell underrated overrated. I'm only tell you about Bertrand Russell, I just really enjoyed his autobiography, which is a zoom, where are you pick this one up. And I think there's something really nice about how human and raw he is about his life's journey. And that particular book. And for those who are listening, who haven't read it to maybe do enjoy Bertrand Russell, one of the things that's very cool there beyond and talking about growing up going through university, some of the big transitions in his life that I think are mirrored and transitions that you can go through today is that he spends the end of his life writing letters with all these, you know, kind of leading intellectuals of his time, right? So he's writing letters, swig, and Stein and Einstein. And it's really quite interesting to see those exchanges. And I think there are echoes of that. And what the internet allowed a lot more people to find their tribe, right, maybe that's Bertrand Russell finding his tribe over time, internet for a lot of us find our tribe, right, maybe it's something mirrored and you know, the way that we talk to each other about progress, the progress studies community or other communities. And anyway, that's what I liked about Bertrand Russell's autobiography.

Will Jarvis 48:39

I really love that a little bit. Well, Rachel, thank you so much for taking the time to come on today. On a Saturday, I really appreciate it. Where can people find you? Where should we send them?

Rachel Craig 48:50

Or should we send them? I think the best place for people who found me here to find me is my kind of give him my my personal email address. Sure, yeah, sure. Yeah. Don't come to my company website, you'll go through a whole round of triage, and you get treated like a company. So don't do that. But I'm certainly welcome to find me on Facebook. I think that's a good place to connect with folks affiliate with the pro progress community. And then, if you find me on medium, I've got a page about myself, where I think you got both Discourses on Livy, and Bertrand Russell, and my email is written out at the bottom. So maybe, maybe we won't say it for the transcript but Rachel at mine vehicle from my vehicles.com. Hopefully, we can break that up so it doesn't get scraped. But if you want to drop me a note there, I'd love to hear from people and maybe when requested if you're listening to this, and you think you can apply some of what I've talked about or learned that motion haul to the energy sector, boy, but I love to meet somebody who's interested in mobilizing tech transfer more efficiently in the Energy and Climate Change sector. I think a lot of the things that we've learned do transfer but I can't take it on in addition to Life Sciences at this time, so that's somebody I'd

Will Jarvis 49:58

love to meet. That's great. All Some well thank you so much, Rachel. I really appreciate it. Thanks.

Rachel Craig 50:01

Well, this is really fun.

Will Jarvis 50:07

Special thanks to our sponsor, this market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We'll be back next week with a new episode of narratives.

Show notes:
Little Platoons by Matt Feeney.

Becoming a Supple Leopard by Kelly Starrett.

Increasingly Competitive College Admissions, much more than you wanted to know by Scott Alexander.

Operation Varsity Blues

Matt’s New Yorker Article

Transcript and more.

More links: 

Schalkenbach Foundation

https://schalkenbach.org

Henry George School of Social Science

https://www.hgsss.org 

IAAO

International Association of Assessing Officers

https://www.iaao.org

Farouk Al-Kasim

https://en.wikipedia.org/wiki/Farouk_Al-Kasim

Digital real estate article

https://www.gamedeveloper.com/business/digital-real-estate-and-the-digital-housing-crisis

Show Notes:

Zak’s book How to Get Ahead (Highly recommended!)

Nozick’s Anarchy State and Utopia.

Girard’s I See Satan Fall Like Lightning.

Caplan’s Selfish Reasons to Have More Kids

Caplan’s Case Against Education.

A quick note, the conversation with Don starts about 21 minutes in. We give an intro before that. 

On this episode, we are joined by the author of the new blog, Warning Letters. Warning Letters focuses on quality control in the pharmaceutical industry. We learn how FDA keeps our drugs safe, what the process looks like for supplements, and whether or not it's worth it to shell out for name brand vs generic drugs. Check out Warning Letters at warningletters.wordpress.com. 

The views and opinions expressed on Narratives are those of the guests and do not necessarily reflect the official policy or position of employers, past or present.