00:00:00
There is literally no example on planet
00:00:02
earth of a high functioning society
00:00:05
without big government.
00:00:06
>> No, that's not true. Big government is
00:00:08
sucking the life out of small
00:00:09
businesses. And I spent countless hours
00:00:12
with businesses and they're like, you
00:00:13
can't succeed in the UK. As soon as you
00:00:15
earn anything, they'll just tax it off
00:00:17
you.
00:00:17
>> So pop off to Dubai, run the business
00:00:20
virtually, and pay no tax. It's idiotic.
00:00:23
I don't know how you can look at that
00:00:24
and think this is a good system.
00:00:26
>> No, no. say what needs to happen is
00:00:28
reduce the taxes and the pressure on the
00:00:29
small businesses cuz everyone in this
00:00:31
economy needs to own stuff. We need to
00:00:33
own a house, own a business, and own
00:00:35
shares.
00:00:35
>> But not everybody can be an
00:00:36
entrepreneur.
00:00:37
>> Correct. Look, it would be wonderful if
00:00:39
everybody owned something. But ownership
00:00:41
starts with earning enough money so that
00:00:43
you can save money so that you can begin
00:00:45
to own something. So the problem is
00:00:47
wages because most people want to be
00:00:48
able to go to work and be treated
00:00:50
decently. I want to earn enough money so
00:00:53
that I can feel secure. I just want to
00:00:55
be married,
00:00:56
>> have kids, own a house, all that. That's
00:00:58
what I hear. I want people and I want
00:00:59
that for everyone. That's gone away.
00:01:01
Houses are unaffordable. Local jobs
00:01:03
don't exist. Technology has cut out all
00:01:05
the middlemen. No one's paying healthy
00:01:08
wages. We have the most unhappy
00:01:10
population.
00:01:10
>> And if you want to fix that, you have to
00:01:12
enact this.
00:01:13
>> Well, I've seen Nick's policies
00:01:14
implemented and I don't feel it's
00:01:16
enough.
00:01:16
>> You haven't seen all of the policies.
00:01:18
So, but we need people to know that the
00:01:20
rules that we grew up with have changed
00:01:21
and people have to learn the rules of
00:01:23
this new economy.
00:01:24
>> Yes. Yes. Yes. I totally agree. And if
00:01:26
you want to get the economy back on
00:01:28
track, the starting point is
00:01:33
>> This is super interesting to me. My team
00:01:34
given me this report to show me how many
00:01:36
of you that watch this show subscribe.
00:01:37
And some of you have told us according
00:01:39
to this that you are unsubscribed from
00:01:41
the channel randomly. So, favor to ask
00:01:43
all of you, please could you check right
00:01:44
now if you've hit the subscribe button,
00:01:46
if you are a regular viewer of the show
00:01:47
and you like what we do here. We're
00:01:49
approaching quite a significant landmark
00:01:50
on this show in terms of a subscriber
00:01:52
number. So, if there was one simple free
00:01:55
thing that you could do to help us, my
00:01:56
team, everyone here to keep this show
00:01:58
free, to keep it improving year over
00:02:00
year and week over week, it is just to
00:02:02
hit that subscribe button and to double
00:02:03
check if you've hit it. Only thing I'll
00:02:05
ever ask of you, do we have a deal? If
00:02:07
you do it, I'll tell you what I'll do.
00:02:08
I'll make sure every single week, every
00:02:11
single month, we fight harder and harder
00:02:12
and harder and harder to bring you the
00:02:13
guests and conversations that you want
00:02:15
to hear. I've stayed true to that
00:02:16
promise since the very beginning of the
00:02:17
D of Sio and I will not let you down.
00:02:20
Please help us. Really appreciate it.
00:02:22
Let's get on with the show.
00:02:27
>> Nick, I want to start with your
00:02:29
background and your context so I can
00:02:30
understand your perspective and who you
00:02:32
are. You sold a company for almost $7
00:02:35
billion,
00:02:35
>> correct? And what's so fascinating about
00:02:38
you is you typically billionaires have a
00:02:41
certain narrative and perspective on the
00:02:42
world.
00:02:43
>> You seem to have a very different one.
00:02:45
>> I do.
00:02:46
>> Who are you? Where have you come from?
00:02:47
And what is your perspective on the
00:02:48
world as it relates to the subjects that
00:02:50
you know we're going to discuss today?
00:02:51
>> I was raised in a civic family, I should
00:02:54
say.
00:02:54
>> What does that mean?
00:02:55
>> That means a family that takes uh civic
00:02:58
responsibility seriously. Uh but we were
00:03:01
middle class people and my father
00:03:03
started to work for this tiny uh family
00:03:06
business that uh his his father had
00:03:09
started manufacturing bed pillows and
00:03:12
down comforters which is how I got my
00:03:14
start in business. And to make an
00:03:15
incredibly long story short, I had a
00:03:18
very early intuition uh about the
00:03:21
internet u and uh the role that it would
00:03:24
play in commerce. And as luck would have
00:03:27
it, I had a friend who agreed with that
00:03:29
proposition and his name was Jeff Bezos.
00:03:32
And so he wanted to start an e-
00:03:35
retailer. He was working in New York uh
00:03:38
uh for a hedge fund uh dating one of my
00:03:41
closest friends. And for a variety of
00:03:43
reasons, he ended up sending his stuff
00:03:45
from New York to Seattle to my house and
00:03:47
we started Amazon.com together. But from
00:03:49
that started starting other tech
00:03:52
companies. you know, I've helped run,
00:03:55
you know, manufacturing businesses,
00:03:58
e-commerce businesses. my friends and I
00:04:01
own a bank, you know, like that, you
00:04:03
know, and I think that that very broad
00:04:05
perspective on markets began to inform
00:04:07
an intuition that everything that people
00:04:11
are taught about economics today, that
00:04:13
sort of the conventional view is a pack
00:04:17
of lies and that if you take it
00:04:19
seriously and enact policy on the basis
00:04:21
of it, the only thing that can happen is
00:04:23
that the rich will get richer and
00:04:25
everyone else will get poorer. And uh
00:04:27
you know a signal piece of that evidence
00:04:30
for me sort of a thing that really sort
00:04:32
of galvanized my interest was that I got
00:04:34
a look at the IRS tax tables in 2007208
00:04:39
which showed American income shares in
00:04:41
the history of that and in 1980
00:04:45
the top 1% of Americans shared about 8
00:04:48
and a half% of national income. uh by
00:04:51
2007 that 8% had grown to 22% as I
00:04:56
recall so triple largely as a share of
00:04:59
national income. While the bottom 50% of
00:05:02
Americans their share fell from about
00:05:06
18% in 1980 to 12% in about 2007. And
00:05:12
what I did is I took those numbers and I
00:05:13
stuck them in a spreadsheet and said
00:05:15
what happens if this trend continues for
00:05:17
another 30 years? And the answer is
00:05:21
revolution. You know, it just it's just
00:05:23
arithmetic because you cannot sustain a
00:05:26
capitalist democracy if the top 1%
00:05:29
controls 45 or 50% of income and the
00:05:31
bottom 50% shares five. This is not a
00:05:35
deep political insight. This is just
00:05:39
math. And I and I freaked out and
00:05:42
decided that I needed to devote myself
00:05:44
to trying to figure out why this
00:05:46
happened and how you could how you could
00:05:49
fix it. And so I have been writing about
00:05:51
this and working on it since then.
00:05:53
>> Why did this feel so important to you?
00:05:56
I've heard you talk about pitchforks.
00:05:57
>> Even a cursory reading of history will
00:06:00
tell you that when societies get as
00:06:02
unequal as the societies we now live in,
00:06:05
uh, terrible things start to happen.
00:06:07
This leads to either a police state or a
00:06:10
revolution. And I believe that the
00:06:12
pitchforks are here. I think the Trump
00:06:14
administration is the is the, you know,
00:06:16
one of the canonical examples of a
00:06:19
society beginning beginning to tear
00:06:21
itself apart. And I just think it's the
00:06:23
responsibility of people with power and
00:06:25
resources to do the right thing.
00:06:28
>> Don, same question for you.
00:06:30
>> Yeah, I grew up in Australia and um as a
00:06:32
teenager, I discovered entrepreneurship.
00:06:34
I got an entrepreneurial mentor uh very
00:06:36
early on and I did two years in a
00:06:38
startup and it was really exciting and I
00:06:40
loved it. Um and I felt like I
00:06:41
discovered a cheat code in life which
00:06:43
was entrepreneurship and starting
00:06:44
businesses and small businesses and then
00:06:46
at 21 I went off and started my own
00:06:48
company which was my first agency and it
00:06:50
grew really rapidly. Uh went from zero
00:06:52
to a million in its first year and then
00:06:54
10 million in year three and it was like
00:06:56
this exciting young company with all
00:06:58
these cool young people working there
00:07:00
and living there. We actually kind of
00:07:02
did. Yeah. We actually were in a big
00:07:03
house and we kind of spent a lot of time
00:07:05
together. Yeah. I just fell in love with
00:07:07
entrepreneurship and small business and
00:07:09
family business and all of those kind of
00:07:10
things. And I also 15 years ago started
00:07:13
an entrepreneur accelerator where people
00:07:15
who want to get together and talk about
00:07:17
entrepreneurship and figure out how to
00:07:18
run their businesses can get together
00:07:19
and and figure out how to do that. Um so
00:07:22
for the last 15 years I've spent uh
00:07:24
countless hours with uh 5 a half
00:07:26
thousand businesses all over the world
00:07:28
who are getting together talking about
00:07:30
how entrepreneurship works. And over the
00:07:32
years I've also come to a similar
00:07:34
conclusion that the technological
00:07:36
revolution that we've seen in the last
00:07:37
25 years has hollowed out the middle
00:07:39
class. And I basically said I can't play
00:07:41
by the rules that I grew up in. I have
00:07:43
to learn the rules of this new economy,
00:07:45
this digital economy pretty quickly or
00:07:47
else I'm going to be displaced and
00:07:48
disrupted. Um and I don't have a
00:07:50
fallback position. I I didn't come from
00:07:52
any form of wealth or money. Um I also
00:07:54
didn't take on any venture capital. I
00:07:56
self-funded, bootstrapped uh my own
00:07:58
businesses by cobbling together credit
00:08:00
cards and things like that. And yeah, I
00:08:02
I think one of the things that I really
00:08:05
truly believe is that we are in a very
00:08:08
big danger at the moment that if more
00:08:09
people can't participate in the benefits
00:08:11
of capitalism, they're going to do crazy
00:08:13
things and vote in socialism. Correct.
00:08:15
uh and the pitchforks will come and
00:08:16
inequality is going to be a toxic
00:08:18
corrosive force uh in the economy. So
00:08:21
like I'm a capitalist who wants lots of
00:08:23
people to benefit from capitalism.
00:08:25
That's been my whole shtick for forever.
00:08:27
Um and I just want to include more
00:08:29
people in the benefits of capitalism
00:08:30
before we do do dumb things.
00:08:32
>> And I guess the question therefore is
00:08:34
how how do we do that? The prevailing
00:08:37
narrative and I think one of the most
00:08:38
dominant narratives is we need to tax
00:08:39
people like us a lot more. What's your
00:08:42
view of that Daniel? So it's very easy
00:08:45
to have a bad guy of a rich person. Uh
00:08:47
so you could imagine this billionaire
00:08:49
rich person, right? Nick maybe could be
00:08:51
a bad guy and you could sort of do that.
00:08:53
When I look at the economy and what's
00:08:55
draining it out, um it's it's harder to
00:08:58
conceptualize, but we have these mega
00:09:01
corporations and we have these mega
00:09:02
funds. So here in the UK, all the houses
00:09:05
are being bought up by Black Rockck, a
00:09:06
massive private equity fund that wants
00:09:08
the entire population to be a rental
00:09:10
class forever. And you know, our prime
00:09:13
minister has walked down street
00:09:16
handinhand with the CEO of this big fund
00:09:18
saying, "Yeah, come in and and buy up
00:09:20
stuff um and financialized houses and
00:09:23
that is causing a lot of trouble." And
00:09:26
then you've got big companies like
00:09:27
Microsoft, like Amazon, and they say,
00:09:30
"Hey, we want to do business in your
00:09:31
country, but we don't want to pay tax
00:09:32
there. We want to pretend that we're in
00:09:34
Luxembourg or we want to pretend that
00:09:36
we're in Ireland and we're going to send
00:09:38
something from our British warehouse to
00:09:40
our British consumer, but we're not
00:09:41
really in Britain at that time so we
00:09:43
don't pay tax. And then you got
00:09:44
Starbucks that says, you know, we we
00:09:46
want to do business and sell coffee next
00:09:47
to mom and dad family business coffee
00:09:49
shop, but we have to pay this license
00:09:51
fee for the Starbucks logo and that has
00:09:53
to go to Bermuda and you know, so so
00:09:56
when I look at who's hollowing out the
00:09:58
middle class, you've got massive mega
00:10:00
corp businesses uh that are the
00:10:03
absolutely bigger than we could have
00:10:05
ever conceived them to be. They're as
00:10:06
big as nations now. Um and you've got
00:10:08
mega corp funds which are also trillion
00:10:11
dollar funds. And one thing I'm worried
00:10:14
about is that a lot of people think that
00:10:16
a guy like me who's basically a dynamic
00:10:19
entrepreneurial person or even a
00:10:21
billionaire like Nick is the enemy. And
00:10:24
you know when you get a a James Dyson
00:10:26
who invents a cool vacuum cleaner and
00:10:28
sells a lot of them, that's not the
00:10:29
enemy. When you get Paul McCartney who
00:10:32
writes a bunch of songs and becomes a
00:10:33
famous beetle and makes a billion
00:10:35
dollars, that's not the enemy. The enemy
00:10:37
is the financialization of our homes.
00:10:39
The enemy is big mega corpse that don't
00:10:41
want to pay tax. And that's where we
00:10:43
need to we need to be a little bit more
00:10:45
nuanced and clear who's hollowing out
00:10:47
the middle class and how do we make
00:10:49
policy choices to make sure that doesn't
00:10:51
happen.
00:10:52
>> So you're saying taxing the rich isn't
00:10:53
the answer.
00:10:54
>> Taxing the rich is like a headline that
00:10:57
creates enemies who aren't actually the
00:11:00
enemies.
00:11:00
>> But so let's just say in the UK then if
00:11:02
you were prime minister, would you
00:11:03
increase the tax rate on the top 1%. You
00:11:06
could do that for political reasons
00:11:08
because it would make people feel good,
00:11:09
but it won't change the economy. What
00:11:11
needs to happen is we need a thriving
00:11:13
entrepreneurial class. Small businesses
00:11:15
are the answer. The biggest mistake the
00:11:17
the UK government is making is they
00:11:20
don't see that the 5.7 million small
00:11:22
businesses are their biggest asset. That
00:11:24
we could get those going, that we could
00:11:26
create an entrepreneurial uplift that
00:11:28
would create jobs and it would create
00:11:31
better opportunities. I would definitely
00:11:33
curb the issue that we're having with
00:11:35
these uh mega funds and I would
00:11:37
definitely stop pretending that Amazon
00:11:39
is in Luxembourg and Google's in
00:11:41
Ireland. Right. So those sorts of things
00:11:43
I would definitely do.
00:11:44
>> What about yourself, Nick? Would you
00:11:45
would do you want the top 1% to pay more
00:11:47
taxes? Is that important? So, it is not
00:11:49
true that the richest people in the
00:11:51
United States pay a lot of tax because
00:11:53
the the American tax system is riddled
00:11:56
with loopholes that allow the richest
00:11:59
citizens to pay taxes at a rate of 1/
00:12:01
half of what ordinary people pay. I
00:12:04
absolutely believe that in a high
00:12:07
functioning democracy, the wealthiest
00:12:10
citizens will pay taxes equal to or
00:12:14
greater than the typical citizen. And
00:12:17
that is just objectively not the case in
00:12:20
the United States
00:12:21
>> as a percentage
00:12:22
>> as a percentage. And I think that that
00:12:24
is, you know, sort of table stakes in
00:12:27
making an economy function and a
00:12:30
democracy go. But it is not the biggest
00:12:32
problem. The problem is wages.
00:12:35
So here's the most important
00:12:37
socioeconomic fact in the United States
00:12:39
that the median full-time worker today
00:12:43
earns in the range of $60,000 a year. If
00:12:47
that person had maintained their same
00:12:49
share of the economy since 1975,
00:12:52
instead of earning $60,000 a year,
00:12:54
they'd earn close to $120,000 a year.
00:12:57
That effect, by the way, goes up to the
00:13:00
90th percentile. If you earned $180,000
00:13:04
in 2018, 2020, if you had maintained
00:13:08
your same share of GDP, instead of
00:13:10
earning 180, you'd earn like a $250,000
00:13:13
a year. So in the United States over 50
00:13:16
years the only people who benefited
00:13:19
directly from economic growth and
00:13:20
productivity gains were the people in
00:13:22
the top 10% and the majority of benefit
00:13:25
went to the top 1%. And that is the
00:13:28
problem and that is trillions of dollars
00:13:30
a year that used to be wages for
00:13:32
ordinary Americans and now ends up in
00:13:35
the pockets of the richest people by the
00:13:38
way utilizing precisely the mechanisms
00:13:40
that Dan just outlined. And what we have
00:13:42
done is we have massively tilted the
00:13:44
economic playing field uh uh which once
00:13:48
favored small and medium-sized
00:13:50
businesses and local companies towards
00:13:52
these giant corporations. We used to
00:13:55
have an economy that actively encouraged
00:13:58
small businesses and entrepreneurship. I
00:14:01
mean basically what we call
00:14:03
neoliberalism this set of ideas around
00:14:05
economic cause and effect that came into
00:14:08
force in the 70s and 80s. regonomics,
00:14:12
Thatcherism, all this stuff. Cut taxes
00:14:15
for rich people, deregulate powerful
00:14:17
people, and suppress the wages for
00:14:19
working people. Basically, trickle down
00:14:21
economics. Those policies went in went
00:14:24
into effect in the 70s, 80s, and 90s.
00:14:27
And what happened is a huge shift in
00:14:31
concentration from smaller businesses to
00:14:33
bigger businesses and a huge uh shift in
00:14:36
income from ordinary Americans to the
00:14:38
very rich. And that's the core of the
00:14:41
problem. And of course, I think rich
00:14:44
people should pay their fair share. We
00:14:45
should. It is ridiculous for somebody
00:14:47
who make half a billion dollars a year
00:14:49
and to pay 15% tax rate. Uh somebody who
00:14:52
makes $200,000 a year pays 40. I just
00:14:55
think that's stupid and wrong, which is
00:14:58
which is the case in the United States.
00:15:00
May not be the case here in the UK. But
00:15:02
the bigger problem is wages. And if you
00:15:04
want to get the economy back on track,
00:15:06
you have to address that problem. Dan,
00:15:07
you say that optionality in
00:15:08
entrepreneurship will do more to raise
00:15:10
wages than any government policy.
00:15:12
>> Yeah. So, I believe that optionality is
00:15:14
the is the most important thing. Uh when
00:15:16
someone has lots of options, then they
00:15:18
don't accept terrible conditions.
00:15:19
>> So, give me give me some color on that.
00:15:21
>> Well, if I have 10 companies that are
00:15:23
wanting to hire me,
00:15:25
>> I'm going to choose the best option,
00:15:26
right? But if I live in a town where
00:15:28
there's only one employer, like let's
00:15:30
say there's one massive company that
00:15:31
employs people and you either work for
00:15:33
that company or you're unemployed, then
00:15:36
I have to accept whatever they're
00:15:37
dishing out. So the most important thing
00:15:40
in creating better quality of life is
00:15:42
optionality. We we need lots of
00:15:44
optionality. One of the options that I
00:15:45
want people to have is I want us to
00:15:47
teach entrepreneurship in schools so
00:15:49
that people have the option to start a
00:15:51
family business as one of their options.
00:15:53
They may not take that option, but at
00:15:54
least it's not a mysterious black box
00:15:56
that they that they just don't
00:15:58
understand that that would actually be
00:16:00
one of their uh one of their options.
00:16:02
Also, let's say you had no minimum wage,
00:16:04
but if you had 10 employers and a
00:16:06
limited pool of people who are available
00:16:08
to work at those companies, they're
00:16:09
going to have to bid against each other
00:16:11
to create better and better working
00:16:12
conditions and better and better pay.
00:16:15
Um, so you kind of only need to have
00:16:17
minimum wages when there's not enough
00:16:19
optionality. If there's enough
00:16:20
optionality, it pushes everything up.
00:16:23
>> Is that your view as well?
00:16:24
>> I agree with the spirit of that. It just
00:16:26
turns out that is never the case. So,
00:16:28
there's a lot of economic theory that
00:16:32
sounds a lot like that, but it but
00:16:35
exists in a in a in an imaginary world
00:16:39
where people have um power and
00:16:42
optionality and and in the real world
00:16:46
that actually doesn't ever exist. So can
00:16:49
by way of example there's a there's a
00:16:51
principle of economics the theory of
00:16:54
marginal productivity. Have you heard of
00:16:56
that?
00:16:56
>> No.
00:16:57
>> So that's a theory that is embedded in
00:16:59
the the center of econ of economics
00:17:01
which says that because markets are
00:17:04
efficient the amount of money you earn
00:17:07
reflects precisely the contribution that
00:17:10
you make to it.
00:17:13
>> If I make $15,000 a year that's because
00:17:15
I'm giving $15,000 of value
00:17:16
>> of value in the world. Okay. Correct.
00:17:18
And if I earn $500 million a year
00:17:21
rubbing money together to make more
00:17:23
money, that is a that is an accurate
00:17:26
reflection of the value I'm creating in
00:17:27
the world,
00:17:28
>> which is really central to capitalism,
00:17:29
isn't it?
00:17:30
>> It is absolutely central to capitalism
00:17:31
and is central to economic policym. But
00:17:34
here's the thing. If you understand
00:17:36
where that came from, it gives you
00:17:38
pause. So in 1879, a guy named Henry
00:17:41
George writes a book called Progress and
00:17:43
Poverty in the United States. And
00:17:45
basically it's the first book about
00:17:50
the rich stealing from the poor. And
00:17:53
this book isn't just a bestseller. It is
00:17:55
the best seller in the history of the
00:17:58
United States. And the powers that be
00:18:00
freak out. And JP Morgan brings this guy
00:18:03
John Bates Clark to Columbia University
00:18:05
which is sort of the home of like Wall
00:18:07
Street and stuff like that New York and
00:18:09
says fix this. And so Henry George
00:18:11
writes a book called the distribution of
00:18:12
wealth in which he invents this idea
00:18:15
called theory of marginal productivity
00:18:17
which asserts this idea but he says the
00:18:20
quiet part out loud in the book. He says
00:18:22
look we have to prove to working people
00:18:25
that no matter how much they make
00:18:27
whether it's a little or a lot it
00:18:29
reflects their value because if they
00:18:31
conclude that their work is worth more
00:18:33
than they are paid they will revolt and
00:18:35
kill us all and that would be bad. And
00:18:38
that idea, it will not surprise you to
00:18:40
learn, was very attractive to a bunch of
00:18:42
rich people and got swept up into
00:18:45
economics. And today is a core idea in
00:18:48
economic theory. And it would be true
00:18:51
potentially if markets were perfectly
00:18:54
efficient and all this optionality
00:18:56
existed. But there has never been a case
00:18:58
where that was been true. It has
00:19:01
materially harmed the welfare of most
00:19:04
people because as Dan says, your ability
00:19:07
to earn is related to your power to
00:19:10
negotiate, not some magical number that
00:19:12
the market decides.
00:19:14
>> And it's how easy you are to replace
00:19:16
because if I run an ad for a job and 400
00:19:18
people apply for the job, right? Which
00:19:20
which really does happen. Yeah. I know
00:19:23
this happens for you, Stephen.
00:19:24
uh that that essentially you run an ad
00:19:26
and 400 people so you don't think about
00:19:28
raising the wage because 400 people
00:19:30
applied and they're all good like
00:19:32
they're all really like super qualified
00:19:34
people and this happens all the time in
00:19:35
the UK right now
00:19:36
>> happens everywhere
00:19:38
>> I mean and there are almost zero
00:19:40
circumstances where where workers have
00:19:44
more power than owners and e you know
00:19:48
even Ed even Ed even Ed even Ed even Ed
00:19:48
even Ed even Ed even Ed even Ed even Ed
00:19:48
even Adam Smith in the in in the wealth
00:19:50
of nations outlined this asymmetry of
00:19:52
power And and the thing is is that if
00:19:56
you persuade people that what they earn
00:19:59
is all they're worth, then you've
00:20:01
created this narrative that makes rich
00:20:03
people richer and everybody else poorer.
00:20:05
>> So what's the solution here? Is it to
00:20:06
put a a higher minimum wage on society?
00:20:10
>> Well, that's a policy solution. But if
00:20:12
you if you really want to solve the
00:20:14
problem, the starting point is getting
00:20:17
people to understand economics in a way
00:20:21
that actually reflects
00:20:24
how the how the economy actually works,
00:20:26
not this stylized invention,
00:20:30
dating back to 1787,
00:20:33
that if you take seriously and enact
00:20:35
policy on the basis of it, the only
00:20:37
thing that can happen is that the rich
00:20:38
will get richer and the poor will get
00:20:40
poor, which is a story of the last 50
00:20:42
years.
00:20:42
>> So what is the policy solution?
00:20:44
>> A policy solution is most definitely to
00:20:46
apply a standard which requires
00:20:48
companies to pay people uh you know a
00:20:51
living wage. So the minimum wage is a
00:20:53
perfect example of a great policy.
00:20:55
Another policy in the United States
00:20:57
which is really really important is the
00:20:59
overtime threshold
00:21:01
>> which I don't know whether you have here
00:21:02
in the UK. We do
00:21:03
>> but it's the salary threshold below
00:21:05
which you automatically get paid
00:21:08
overtime which is time and a half here
00:21:09
too.
00:21:10
>> Yeah. 48 hours. Yeah. 48
00:21:11
>> 48 hours is the upper limit of a week a
00:21:13
working week.
00:21:14
>> Okay. So in the United States it's 40
00:21:15
hours. So if you work more than that you
00:21:17
get paid overtime. And so one of the
00:21:19
things so that that standard used to
00:21:21
apply to virtually every worker in
00:21:23
America in 1970 1965 today that standard
00:21:28
applies to less than 10% of workers. Now
00:21:30
why does that matter? Because people
00:21:31
like me at the scale of tens of millions
00:21:34
have turned three 40hour a week jobs
00:21:36
into two 60-hour a week jobs and
00:21:38
pocketed the difference. You may be
00:21:41
doing that here, right? You put gummy
00:21:43
bears in the lunchroom and a and a ping
00:21:45
pong table and you force people to work
00:21:46
60 hours a week and then you can have
00:21:48
two employees instead of three. If you
00:21:50
do that 30 million times, you've taken
00:21:52
10 million jobs out of the workforce.
00:21:55
>> So, do you agree with this, Daniel? This
00:21:56
approach,
00:21:56
>> not as much. Well, here's here's the
00:21:58
issue. I agree with it at one level, but
00:22:00
um almost every solution that Nick has
00:22:04
recommended, the UK's had for the last
00:22:05
20 years. So, we have uh a minimum wage
00:22:07
that is pegged two/irds of the median
00:22:09
and it ratchets up. We've got 28 days
00:22:11
worth of paid s uh holiday every year.
00:22:14
We've got sick leave. We've got
00:22:15
maternity and paternity leave. Uh we've
00:22:17
got uh the ability uh very very
00:22:20
difficult to h fire someone if they've
00:22:22
been with you for more than 6 months.
00:22:24
So, we have this unbelievable set of
00:22:27
workers rights and all of these
00:22:29
recommendations from minimum wage right
00:22:31
through to how how to handle employment.
00:22:34
We have the most unhappy population. Our
00:22:36
economy is not growing. We have a
00:22:38
million young people out of work. Uh we
00:22:41
have no one's hiring at the moment. Um
00:22:43
so it hasn't created those conditions
00:22:46
have not created runaway prosperity. And
00:22:49
that gives me pause to think something
00:22:51
deeper is going on. And the reason that
00:22:53
I think this is that I think we need to
00:22:56
make more participation in capitalism.
00:22:58
Capitalism is about ownership. You have
00:23:00
to own an asset. And if you don't own
00:23:02
anything, if you're just selling labor
00:23:04
in the current economy with digital and
00:23:06
AI and robots and all this sort of
00:23:07
stuff, the real reason that the wages
00:23:11
because what Nick's saying is that the
00:23:13
amount of money people would should be
00:23:14
earning right now is like in the
00:23:16
hundreds of thousands. And what I think
00:23:17
is happening as another major part of
00:23:20
this is that the e- the rules of the
00:23:21
economy have shifted. Technology has cut
00:23:24
out all the middlemen. Technology has
00:23:26
hollowed out the middle class. Uh we
00:23:29
used to go to the video store and the
00:23:31
video rental store used to have 12
00:23:33
people working there and now we just go
00:23:34
to Netflix. Uh and we used to go to our
00:23:36
little local retailer and buy a CD and
00:23:39
now we just go to Spotify and we just go
00:23:41
to Amazon. So it's hollowed out all of
00:23:43
those supply chains that used to create
00:23:45
amazing jobs. The value of the labor has
00:23:48
been eroded because it's very easy to
00:23:51
outsource labor to another country. It's
00:23:53
very easy to simplify a job down to
00:23:56
automated parts uh using technology. So
00:23:58
the fundamental value of actual labor
00:24:01
has diminished because of technology.
00:24:03
Technology has reduced the actual
00:24:05
utility of this thing that we call labor
00:24:07
uh for for 90% of people
00:24:09
>> and it's only going to get worse with AI
00:24:10
>> and with AI and with robots. It's going
00:24:12
to go down. So the if you just simply
00:24:15
say oh this is about lifting work
00:24:17
standards you're going to miss the point
00:24:19
that we can't compete with technology.
00:24:22
Technology is better at this stuff than
00:24:23
we are. And the answer, the solution is
00:24:26
ownership. We have to everyone in this
00:24:28
economy needs to own stuff. We need to
00:24:30
own a house. We need to own a family
00:24:32
business. We need to own shares in the
00:24:34
companies that are growing. So it's you
00:24:36
cannot outrun this. This is like trying
00:24:38
to run against someone who's in a car
00:24:40
and they say, "Oh, you just need nicer
00:24:41
shoes." No, you the shoes won't change
00:24:44
things. We've already tried nicer shoes
00:24:46
in the UK economy and it's made no
00:24:48
difference. Everyone's miserable. So
00:24:49
that's one of the things that I that's
00:24:51
where you and I would disagree.
00:24:52
>> I mean, both things can be true. The
00:24:53
minimum wage in the United States is
00:24:55
$7.25 an hour or $2.13 plus tips. It's
00:25:00
half. It's a third of what it is here in
00:25:02
the UK. Okay.
00:25:03
>> But you have twice the disposable income
00:25:06
that we have. Your median wage is one
00:25:08
and a half to two times what our medium
00:25:10
wage is. We're now a poor country
00:25:11
relative to the US. And even though your
00:25:14
minimum wage is terrible and horrific
00:25:16
and inhuman
00:25:18
>> Yeah. However, it's magically done it.
00:25:21
Your your country and your citizens are
00:25:23
so much richer than ours.
00:25:25
>> Yeah. Except if you consider that out of
00:25:28
that median wage, you have to take
00:25:30
$20,000 a year to pay for healthare,
00:25:32
>> right? Like
00:25:33
>> I think adjusted it's still you're 30%
00:25:35
better even adjusted.
00:25:37
>> I I think if you look at the AIC OECD uh
00:25:40
uh it would be interesting. We might be
00:25:41
able to look it up. I can't remember.
00:25:43
But I I bet you it's about 10%
00:25:44
different. Mhm.
00:25:45
>> Even when you subtract out of pocket
00:25:47
healthare costs and insurance premiums,
00:25:48
the average American worker still takes
00:25:50
home significantly more money than the
00:25:52
average UK worker,
00:25:53
>> the average US salary is around $74,000.
00:25:56
The average UK salary is around roughly
00:25:58
$50,000.
00:26:00
>> Americans pay heavily for healthare. The
00:26:01
average employee in America pays about
00:26:03
$6 to $8,000 a year in premiums and
00:26:05
out-of- pocket costs. Brits do not pay
00:26:08
for healthare because of the NHS. If a
00:26:09
US worker makes $74,000 and spends 8are
00:26:12
in healthcare, they are they are at
00:26:14
$66,000
00:26:15
before relatively low taxes. The UK
00:26:18
worker starts at 52,000 before
00:26:21
relatively high taxes. The bottom line
00:26:24
is the gap in base salaries and tax
00:26:26
rates is simply too large for UK free
00:26:28
healthcare to close. The US wins on pure
00:26:31
disposable income per person.
00:26:33
>> Yeah, there there's no doubt the US has
00:26:35
had a much more successful economy than
00:26:37
the UK. Brexit being, you know, a
00:26:40
catastrophe.
00:26:40
>> Can I push back on one thing though with
00:26:42
the minimum wage or or this? Yeah.
00:26:45
>> The companies that hollowed out the
00:26:46
middle class are big tech companies, big
00:26:50
finance companies, those mega
00:26:52
corporations, and I agree with you, they
00:26:53
can afford to pay their workers more
00:26:55
money.
00:26:56
>> One of the issues that I feel, and this
00:26:58
is what I'm concerned about,
00:26:59
>> is that in the UK, the majority of
00:27:02
businesses that do pay minimum wage,
00:27:04
like a friend of mine owns a pub, and
00:27:06
that pub has razor thin margins. it's
00:27:08
losing money. He's not taking any money
00:27:10
out of it. He's massively impacted by
00:27:12
taxes and minimum wage.
00:27:13
>> So, the companies that I see that are
00:27:16
the ones who have to pay minimum wage
00:27:17
workers and give people the on-ramp into
00:27:20
the economy, pubs, little retailers, mom
00:27:23
and dad businesses, these are the ones
00:27:25
that really do get squeezed out of the
00:27:27
economy. They have razor thin margins
00:27:29
and you put more pressure on them. You
00:27:31
say, "You've got more government
00:27:32
regulations, you got more taxes, and now
00:27:34
you've got more minimum wages." And they
00:27:36
just go, "I've had enough. I can't do
00:27:38
it. And the companies that hollowed out
00:27:40
the middle class, the Microsofts, the
00:27:42
Googles, the, you know, Amazons, they
00:27:44
go,
00:27:44
>> Starbucks.
00:27:45
>> Yeah, the Starbucks, they go, "Yeah, we
00:27:47
can we can absorb it." Um, and also,
00:27:49
we're not paying tax anyway, so we'll
00:27:50
just kind of like do that.
00:27:52
>> So, one of the things that you could do,
00:27:53
one of the things that we recommend is
00:27:54
that you impose these standards
00:27:56
progressively that the biggest companies
00:27:58
have to pay the highest minimum wage,
00:28:00
medium-sized companies pay slightly
00:28:02
less, and small businesses pay less.
00:28:04
Yeah. But even within that context,
00:28:07
ensuring that everyone pays enough for
00:28:10
people to have enough money to continue
00:28:11
to buy stuff. I mean, it's fine and good
00:28:13
to say, "Look, I don't want to pay high
00:28:15
wages in my pub." Uh, but surely the
00:28:19
people working in the pub should make
00:28:21
enough money so that they can go to the
00:28:22
pub themselves and buy a beer, right?
00:28:25
You have to I mean, you know, the
00:28:27
National Restaurant Association in
00:28:28
America is, you know, famous for this.
00:28:30
It's like they want everybody in America
00:28:32
to be able to go to a restaurant and eat
00:28:35
except for the people who work in the
00:28:36
restaurants, right?
00:28:37
>> Can I just say something with your
00:28:38
friend that owns the pub as well?
00:28:40
>> So, say you own Starbucks.
00:28:42
>> Yeah.
00:28:42
>> You own a pub.
00:28:43
>> Yeah.
00:28:44
>> I'm a worker.
00:28:46
>> Yeah.
00:28:47
>> If you're going to pay me more because
00:28:49
you have this progressive minimum wage
00:28:51
and you're going to pay less. I'm sorry,
00:28:53
Daniel. I'm not going to apply for the
00:28:55
job. I'm going to want to go work at
00:28:57
Starbucks. So, is there not an issue
00:28:59
where you're not going to be able to
00:29:00
attract talent because you're not going
00:29:01
to be able to pay them as much?
00:29:03
>> There are there are many reasons why you
00:29:05
would work for a small business as
00:29:07
opposed to a mega corp.
00:29:08
>> But I'm saying you're paying me £4
00:29:10
minimum wage. He's paying me eight.
00:29:11
>> So, do not does he not end up getting
00:29:14
all the the best talent?
00:29:15
>> He might get the best talent. And also
00:29:17
for my pub, I might be able to have to I
00:29:20
might ma match eight, right? So, maybe
00:29:22
it works that I just pay eight, but I'm
00:29:24
not necessarily legislated to pay eight.
00:29:26
So, here's the thing. It's more look as
00:29:28
a small business owner you can treat
00:29:30
there's all sorts of techniques that you
00:29:31
can use to retain people
00:29:33
>> and you're going to have more
00:29:34
optionality
00:29:35
>> as a big company.
00:29:36
>> Yeah. Because you can you are going to
00:29:38
definitely pay me more.
00:29:39
>> Well, being bigger is always better. It
00:29:41
is absolutely true that that high
00:29:43
standard will put pressure on throughout
00:29:45
the economy. But the small pub owner is
00:29:49
also going to benefit from the fact that
00:29:51
all I mean are we using Starbucks
00:29:52
whatever whatever whatever example we're
00:29:54
using all these people now own now earn
00:29:58
so much more that they can afford to go
00:30:00
to the pub and buy stuff. So one of the
00:30:03
interventions that
00:30:04
>> I was part of in the United States was
00:30:06
the $15 minimum wage. We cook that up in
00:30:10
Seattle Washington. And so I spoke to
00:30:12
many many many many many small business
00:30:14
owners who are absolutely terrified by
00:30:17
this because you know look we are all
00:30:20
business owners right and so you can do
00:30:23
a calculation in seconds about the risks
00:30:27
and the expenses of higher wages.
00:30:29
Correct?
00:30:30
>> But what you cannot calculate is the
00:30:33
benefit of living in of operating your
00:30:36
company in a regime where everyone earns
00:30:39
more. Right? and the benefits that occur
00:30:41
to you from that. Look, a ham sandwich
00:30:44
in, I don't know, Somalia cost 25 cents.
00:30:46
It costs $25 in Switzerland. What kind
00:30:49
of economy do you want to live in,
00:30:51
right? You know,
00:30:53
>> what were you going to say about your
00:30:54
friend?
00:30:54
>> Well, the friend who owns the pub, his
00:30:56
pub is actually full most nights of the
00:30:57
week. They have lots of people going
00:30:59
there. The issue is taxes and costs.
00:31:01
He's got a big government in the UK. We
00:31:04
have all of these things. Like
00:31:05
everything that you've mentioned, we
00:31:06
have it and we've had it for 25 years.
00:31:08
We don't have an affluent middle class
00:31:10
that's been created. We have an eroded
00:31:12
middle class. So the actual numbers here
00:31:15
is that my friends, he took no money
00:31:17
himself and the pub lost £180,000 last
00:31:20
year and it's because of VAT and he
00:31:23
feels like he's carrying the weight of
00:31:24
training people in their first job. He's
00:31:27
creating jobs as one of the only
00:31:28
employers in his little town.
00:31:30
>> Um and and also he didn't create this
00:31:33
mess. Amazon and Microsoft and Google
00:31:36
and Facebook and big funds, they are
00:31:39
sucking money out of the economy.
00:31:40
>> We're in violent agreement about this.
00:31:42
>> So, so I just feel like
00:31:44
>> the the issue is like I really want to
00:31:47
make sure that we're super super clear
00:31:50
>> that small businesses are currently
00:31:52
squeezed here in the UK. I don't know
00:31:54
what's like in the US.
00:31:54
>> It's the same in the US.
00:31:55
>> Like they are so squeezed and they are
00:31:57
squeezed by big tech and now AI has come
00:31:59
along. they feel like they have to learn
00:32:01
this new thing and they have to start
00:32:03
posting on LinkedIn 45 times a day using
00:32:05
AI posts or else they'll get drowned out
00:32:07
and they have to, you know, edit videos
00:32:10
and become a Tik Tocker as well, right?
00:32:12
So, it's all of this constant pressure
00:32:14
caused by this tech sector
00:32:16
>> and these big funds like one of the
00:32:19
biggest threats to my friend's pub is
00:32:20
that a big American private equity fund
00:32:23
wants to buy the pub uh and turn it into
00:32:25
a block of flats, right? So like they
00:32:28
want to financialize this this community
00:32:30
asset and he's trying to fight to keep
00:32:32
his pup,
00:32:33
>> right? So what I what I don't want to
00:32:35
have is I don't want to have big
00:32:37
government create a new framework that
00:32:39
that basically squeezes small family
00:32:42
businesses even harder. They all start
00:32:44
going, we're losing two pubs a day here,
00:32:45
right? They're closing down. Um they
00:32:47
they go out of business and then we end
00:32:50
up with big corpse, big funds who can
00:32:53
afford to absorb it and they own
00:32:54
everything. And I also want to be clear
00:32:56
that the reason people are struggling is
00:32:58
they don't own anything. It's not
00:32:59
because of working conditions. They
00:33:01
don't own anything. And if they don't
00:33:03
own anything,
00:33:04
>> no, it would be wonderful if everybody
00:33:06
owned something. Um but but ownership
00:33:09
starts with earning enough money so that
00:33:12
you can save money so that you can begin
00:33:13
to own something, right? Like one of the
00:33:16
lessons that we learned was that trying
00:33:19
to give stock options to everyone in a
00:33:23
company often doesn't work.
00:33:25
>> Yeah, I agree.
00:33:25
>> It's a catastrophe because for 90% of
00:33:29
the workers in a company that their
00:33:32
concerns are immediate and they don't
00:33:34
value stocks
00:33:36
>> and if you give them the choice between
00:33:38
cash or stock options,
00:33:39
>> it's not even close, right? And so
00:33:42
again, I agree with this sentiment. It's
00:33:45
just that I have never seen and I do not
00:33:48
believe there is an existence proof for
00:33:50
it working on planet Earth. What
00:33:52
certainly worked great in the United
00:33:54
States for 40 or 50 years was a set of
00:33:57
standards that required companies to
00:34:01
fairly split the value they create with
00:34:03
their employees
00:34:05
uh through a variety of mechanisms,
00:34:07
unions, which can be problematic for
00:34:09
sure, but labor standards like the
00:34:11
minimum wage and the overtime threshold
00:34:13
and so on and so forth, coupled with a
00:34:17
set of policies to discourage
00:34:20
consolidation and discourage the kind of
00:34:22
exploitation that you have I think very
00:34:26
smartly articulated um so that we can
00:34:29
have a dynamic economy.
00:34:31
>> The only difference that happened back
00:34:32
in the in the time that you're
00:34:34
describing where workers had to be
00:34:36
included is that it was nearly
00:34:38
impossible for a company to outsource
00:34:41
their customer success team to the
00:34:43
Philippines and it was nearly impossible
00:34:45
for a company to come up with a piece of
00:34:46
software that would do 80% of the heavy
00:34:49
lifting of a job. And one of the issues
00:34:51
that we have right now is that when you
00:34:53
put a lot of pressure on on all sorts of
00:34:56
companies, we're living in the age of AI
00:34:57
and robotics where you essentially, you
00:35:00
know, one of the options that companies
00:35:02
have is just the option, well, we'll
00:35:04
just outsource the labor to another
00:35:06
country. We'll automate it. We'll
00:35:08
simplify it.
00:35:09
>> Okay. But those the the rules that
00:35:12
enable people to do that were written by
00:35:15
the same people who are consolidating
00:35:18
industries and and taking advantage. I
00:35:21
mean, you don't have to live in a world
00:35:23
like that. There are other ways to
00:35:25
organize the world.
00:35:26
>> The neoliberals promised that free trade
00:35:29
was going to make all of us richer. And
00:35:31
what it did is it flooded our markets
00:35:33
with cheap stuff from China, but it is
00:35:36
absolutely not clear that it made
00:35:38
people's lives better.
00:35:40
>> Chinese people's lives.
00:35:41
>> It made Chinese people's lives better,
00:35:43
but it certainly didn't make people in
00:35:45
the UK's life better. And it certainly
00:35:47
didn't make people in the United
00:35:48
States's life better. And so you could
00:35:50
have imagined approaching that in a
00:35:52
fundamentally different way. I guarantee
00:35:54
you that if the United States could go
00:35:56
back and do it again, we would have
00:35:58
reought it.
00:35:59
>> We would have reought it.
00:36:00
>> There's a few ownership models that I
00:36:02
think are important that could be looked
00:36:03
at. Number one is a sovereign wealth
00:36:05
fund. So the countries like Norway, uh
00:36:08
Singapore, these countries, they own
00:36:11
natural assets uh in a sovereign wealth
00:36:13
fund. And essentially every citizen
00:36:16
therefore owns a piece of some asset.
00:36:18
There is an asset that is owned through
00:36:20
a sovereign wealth fund. It's a very
00:36:21
successful model. It seems to work so
00:36:23
incredibly well that it's dangerously
00:36:25
well. Um half of London is now owned by
00:36:27
the Qatari self sovereign wealth fund,
00:36:29
the Norwegian sovereign wealth fund.
00:36:31
We're literally losing all of our
00:36:32
property to the sovereign wealth funds
00:36:34
of the world. So the sovereign wealth
00:36:35
fund model is incredibly powerful.
00:36:37
>> Yes. Um,
00:36:38
>> so just for someone that doesn't know
00:36:39
what that is, you you have natural
00:36:42
assets within the company own owned in
00:36:44
part by the state.
00:36:45
>> So the UK did a stupid thing. We
00:36:47
discovered the North Sea back in the '
00:36:50
80s, I think it was, and Norway had half
00:36:52
and we had half of this Norwegian uh
00:36:55
this North Sea oil. And the Norwegians
00:36:57
said, "Hey, we'll just own this in a
00:36:58
fund that all of our citizens will
00:37:00
benefit from, and that will be a
00:37:01
state-owned fund, and then we'll take
00:37:04
the profits of that, we'll reinvest it
00:37:06
into assets, and every citizen will
00:37:08
benefit from those assets." And the UK
00:37:10
said, "We'll just sell a license to
00:37:12
British Petroleum." Yes.
00:37:13
>> Right.
00:37:13
>> We'll make the rich people richer.
00:37:15
>> Yeah. And Australia is so stupid. We
00:37:17
have all this incredible natural
00:37:19
resource, no sovereign wealth fund. uh
00:37:21
Britain when we took over the whole
00:37:22
world or 25% of the world we operated
00:37:25
sovereign wealth funds called the East
00:37:26
India Trading Company and all this sort
00:37:28
of stuff and basically our business
00:37:29
model was sovereign wealth funds for
00:37:31
many many years
00:37:32
>> so sovereign wealth funds number one
00:37:34
>> so that would be one the other one is to
00:37:35
put shares into baby's names so when a
00:37:37
baby's born uh you have a piece of the
00:37:39
stock market like $1,000 worth of shares
00:37:42
>> it's a baby bond idea and
00:37:44
>> Trump's doing both of these things isn't
00:37:46
he sovereign wealth fund and the baby
00:37:47
bond he's calling it the Trump fund or
00:37:49
something
00:37:49
>> yeah well they're They're experimenting
00:37:51
with some version of this right now.
00:37:53
>> Yeah.
00:37:53
>> Yeah. So, if if an a baby by the time
00:37:56
they hit 18 has had 18 years of
00:37:58
compounding of owning that asset, then
00:38:01
by the time they hit 18, they're
00:38:03
literally getting an asset that they can
00:38:04
then turn into another asset if they
00:38:06
want to. Um, that's pretty powerful. And
00:38:09
then the the biggest issue is the
00:38:11
financialization of houses. So if you
00:38:14
take a value of a house, about half the
00:38:17
value of the house is what you might
00:38:18
call the utility value of the house,
00:38:20
which is it's a house to live in and I
00:38:21
want to live in it. And then the other
00:38:23
half the value is the financial
00:38:24
speculation value of the house, which is
00:38:27
how much value does a fund have if we
00:38:29
can rent this out to people for the rest
00:38:30
of their lives.
00:38:31
>> I looked at the Black Rockck thing and
00:38:32
it said the idea that Black Rockck is
00:38:34
buying up UK homes is a is a myth. They
00:38:36
are a financeier, not a landlord. They
00:38:39
provide loans and debt facilities to to
00:38:40
property developers, but they do not
00:38:42
directly own or manage residential
00:38:44
housing stock.
00:38:45
>> Uh Lloyd's Bank is buying 70,000 UK
00:38:47
homes to rent forever.
00:38:49
>> The number of single family homes Black
00:38:51
Rockck directly owns and manages in the
00:38:52
UK is zero.
00:38:53
>> Okay. But he's right.
00:38:55
>> Yeah.
00:38:56
>> Um I I don't know what the details are,
00:38:58
but this is a private equity thing
00:38:59
that's going on in this country and in
00:39:01
the United States right now.
00:39:02
>> Yeah. In the United States, I've heard a
00:39:04
lot about Black Rockck buying a
00:39:05
>> I'm not sure what the entities are. It
00:39:08
may be true. I again I don't know what
00:39:09
>> they come up they come up with
00:39:10
structures to do it at arms length.
00:39:12
Yeah. But um like
00:39:14
>> I guess you kind of own it if you're
00:39:15
financing it is
00:39:16
>> well or you loaned it to a subsidiary or
00:39:19
somebody else or whatever it is. But the
00:39:20
but the meta point here is that homes
00:39:23
used to be owned by people.
00:39:24
>> Yeah. And they bought them to live in.
00:39:26
>> And they bought them to live in. And one
00:39:28
of the nefarious things that's going on
00:39:31
in the west driven by this neoliberal
00:39:35
consensus that the only purpose of the
00:39:37
of of the economy is to make rich people
00:39:39
richer is this idea that private equity
00:39:42
should buy all these homes and turn the
00:39:45
turn ordinary people into this rental
00:39:47
class. Just to confirm, yeah, Lloyd's
00:39:49
Bank are doing that through something
00:39:50
called Citra Living. They are buying up
00:39:52
thousands of new built homes and
00:39:53
apartments to act as a direct private
00:39:55
corporate landlord. Um they view the
00:39:57
structural shift away from home
00:39:58
ownership towards long-term renting as a
00:40:00
major profit opportunity for them.
00:40:01
>> Yes,
00:40:02
>> that's it. They want to have a permanent
00:40:04
rental class that people never you'll
00:40:06
own nothing and be happy is the idea.
00:40:08
And people are not like that. People
00:40:10
love to own stuff.
00:40:11
>> There should be a button just down below
00:40:13
here. And if it says subscribed, you're
00:40:15
already subscribed. If it says
00:40:16
subscriber, that means you're not yet.
00:40:19
And if you're not subscribed, please
00:40:20
could you do us a favor and hit that
00:40:21
button? It helps the show more than you
00:40:23
know. And according to the algorithm,
00:40:25
you're someone that watches our show,
00:40:26
but you haven't yet hit that button.
00:40:27
Thank you so much.
00:40:29
>> I want to go back to the central point
00:40:30
we were talking about, which is like how
00:40:31
do you how do you solve this? Because
00:40:32
you've got two different views on how
00:40:33
you solve this inequality. What I find
00:40:35
interesting is the UK has better worker
00:40:39
rights.
00:40:40
>> But it is
00:40:41
>> but you also have much less inequality
00:40:42
here. I mean, just to be clear,
00:40:44
>> that is true. So the US is significantly
00:40:46
more unequal. Yeah. The US top 1% holds
00:40:50
over 30% of the nation's wealth compared
00:40:52
to roughly 20% in the UK. Um, and the US
00:40:55
consistently ranks as the most unequal
00:40:56
of the G7 nations.
00:40:58
>> Correct.
00:40:58
>> However, the US is growing much much
00:41:00
faster. If you look at 209 to 2026, the
00:41:04
US has grown over 100% faster than the
00:41:06
UK.
00:41:07
>> Yes.
00:41:07
>> Um, and the UK is vastly more protective
00:41:09
of workers. We have the things Daniel
00:41:11
said like paid vacation, paid maternity
00:41:13
leave. The UK mandates up to 39 weeks of
00:41:16
statutory pay. The US mandates zero,
00:41:19
which is unbelievably correct horrific.
00:41:21
>> But I mean, one of the things that's
00:41:22
happened in the UK, Steve, is is Brexit.
00:41:25
>> When did that happen? 2016.
00:41:28
>> That's taken that's taken, what has that
00:41:29
taken? Eight or 10% out of UK growth
00:41:31
rates. It has affected unemployment by
00:41:34
4%, productivity gains by 4%. I mean,
00:41:37
the list goes on. So that own I mean
00:41:39
part of part of why people in the UK are
00:41:43
feeling down
00:41:45
>> is this unbelievable mistake that the
00:41:48
country made.
00:41:49
>> But it's the same in Germany. It's the
00:41:51
same in Australia. Germany has
00:41:53
unbelievable workers rights. Australia
00:41:55
unbelievable workers rights. In fact the
00:41:57
USA is the outlier of all the modern
00:42:00
capitalist economies.
00:42:01
>> Absolutely. But we're confusing things.
00:42:03
People are pissed off everywhere in the
00:42:05
world. everywhere.
00:42:08
>> I don't I want the pitchforks to go away
00:42:09
as well, but these workers rights are
00:42:12
not putting the pitchforks away. Like
00:42:14
all of this stuff, we've given this
00:42:16
stuff to Australia, New Zealand, Canada,
00:42:19
uh all of Western Europe, all the
00:42:21
English speaking democracies other than
00:42:23
the USA. USA is the only one that has
00:42:26
virtually no safety nets and no
00:42:28
safeguards. Everywhere else has health
00:42:30
care systems that are much more generous
00:42:32
and welfare systems that are more
00:42:33
generous and like maternity leave. I
00:42:35
mean, it's just inhumane that USA
00:42:37
doesn't have maternity leave. So, all of
00:42:39
that stuff, but we've got all of that,
00:42:40
but we've got the pitchforks here, too.
00:42:42
>> Yes.
00:42:42
>> Um, and this is why I'm saying I'm
00:42:44
really zoning in on the idea that people
00:42:46
need to own a house, they need to own a
00:42:48
business, and they need to own shares.
00:42:49
And it's like if they own stuff,
00:42:50
>> I could not agree more. And I don't know
00:42:53
how to get them there unless they are
00:42:54
paid well enough to to make to do that.
00:42:57
>> Let me tell you an anecdote. During the
00:42:59
George Floyd riots, people were burning
00:43:02
stuff down in the United States. And
00:43:03
there was this fantastic interview with
00:43:06
this woman and the reporter said, you
00:43:08
know, I just I cannot believe that you
00:43:10
don't have respect for property rights.
00:43:12
And the woman said,
00:43:14
>> they've got nothing.
00:43:15
>> We have no property.
00:43:16
>> Yeah.
00:43:17
>> You know, why should I respect property
00:43:19
rights? No one I know owns anything.
00:43:21
Yeah. You know, like, so I am 100% with
00:43:24
you. But I think at the core of it, the
00:43:26
core of it is that inequality is way
00:43:30
more than an economic inconvenience for
00:43:33
the people that it affects. Yeah.
00:43:35
>> What it does is it shreds the
00:43:37
reciprocity norms
00:43:38
>> that make social cohesion and democracy
00:43:42
possible. Yeah. It's this dog eat dog.
00:43:45
You're all on your own. Grab what you
00:43:48
can. I mean, obviously the Trump people
00:43:49
>> and burn the place down.
00:43:50
>> That's right. And burn the place down.
00:43:52
Obviously, Donald Trump has created a
00:43:54
permission structure for the worst kind
00:43:56
of behavior, right? The worst kind of
00:43:58
corruption. Uh, basically stealing has
00:44:01
come back into style, right? And you
00:44:04
know, there's all sorts of reasons that
00:44:06
are generating this malaise, this this
00:44:09
sense of unfairness and lack of control,
00:44:14
right? And and and the thing is I I just
00:44:16
I agree 100% with your sentiments. I
00:44:19
really do about entrepreneurship and
00:44:22
ownership and you know at the end of the
00:44:23
day the cool thing about
00:44:24
entrepreneurship is you're in charge.
00:44:26
>> Yeah.
00:44:27
>> Like you're in charge here
00:44:28
>> but not everybody can be an
00:44:29
entrepreneur.
00:44:30
>> Correct. Correct. And so I do think that
00:44:32
that's a little bit unrealistic.
00:44:33
>> The the issue is is that like 70% of all
00:44:36
jobs that get created are created by
00:44:37
small businesses and not governments,
00:44:40
not big companies. They're, you know,
00:44:42
they don't create jobs. Small businesses
00:44:43
create jobs. And if we just not everyone
00:44:46
can be an entrepreneur, but if we had a
00:44:47
100,000 entrepreneurs who were all
00:44:49
hiring 10 people, we'd we'd have a
00:44:52
million jobs and we'd have 100,000
00:44:53
options for people with jobs. So like I
00:44:56
I don't think that we discount the whole
00:44:59
idea that entrepreneurship is a big part
00:45:00
of the solution. Can I take us briefly
00:45:03
back in time? This is not the first time
00:45:05
this has happened. The K-shaped economy
00:45:07
has happened in the Engles pause.
00:45:09
>> Yeah.
00:45:09
>> So the the
00:45:10
>> what do you mean by K-shaped economy? So
00:45:12
the K-shaped economy is where so a
00:45:14
normal economy is one where everyone
00:45:15
agrees it's going up or down or
00:45:17
sideways. Everyone can sort of say, "Oh
00:45:18
yeah, roughly speaking, it's a good
00:45:20
economy. It's a bad economy. It's it's
00:45:22
rising and falling like a tide." A
00:45:24
K-shaped economy is where it's really
00:45:26
good for some and really bad for others.
00:45:28
It's a disrupted economy. Yeah. Right.
00:45:29
So the top percentage are going up and
00:45:31
the bottom percentage are going down.
00:45:33
Now the headlines that we run today are
00:45:35
the exact same headlines that were run
00:45:37
in the early 1800s in Britain. And it
00:45:39
was essentially record profits for
00:45:42
industrialists and workers haven't had
00:45:44
any improvements. They all like you
00:45:47
could almost take every grievance that
00:45:49
we have today and you could just overlay
00:45:51
it in the early 1800s and you get the
00:45:53
exact same words.
00:45:55
>> Um the solutions uh one of the big
00:45:57
solutions in the early 1800s was we need
00:45:59
to export people. We need to get rid of
00:46:01
people. And what they did is they sent
00:46:02
everyone to Australia. So they they sent
00:46:05
they sent they picked up people and they
00:46:06
put them in in Australia, right? So they
00:46:08
same sort of thing mass mass immigration
00:46:11
or whatever you call it remigration. So
00:46:13
they got rid of people out of the
00:46:14
country. So it was very similar and we
00:46:16
call this the Engles pause but we
00:46:18
understand what caused it
00:46:19
>> 1790 to 1840.
00:46:20
>> Yeah. So what caused it was technology
00:46:23
and it was this new
00:46:24
>> it was the industrial revolution.
00:46:25
>> Yeah. So it's the new technology where
00:46:28
we introduced a steam engine, we
00:46:30
introduced a spinning loom, we
00:46:32
introduced uh tractors, we introduced
00:46:34
all of this sort of new technology and
00:46:36
the owners of that new technology and
00:46:38
the people associated with that new
00:46:40
technology went like that. They leveled
00:46:41
up because of tech and the people who
00:46:43
were not part of that technology went
00:46:45
down. Very simple picture you might want
00:46:47
to have in your mind is a farm that had
00:46:50
a 100 workers farming versus one farm
00:46:52
that had a tractor. The tractor farm
00:46:54
went like that and the all the workers
00:46:56
went like that. It's because of
00:46:57
technology.
00:46:58
>> The interesting thing about the angles
00:46:59
paws is that for approximately two
00:47:02
generations, 50 75 years with the
00:47:06
exception of the owners of capital
00:47:09
basically everybody else on planet earth
00:47:11
went backwards. It
00:47:12
>> was hell.
00:47:12
>> It was hell. Um and what and what
00:47:15
happened is that over time the political
00:47:19
consensus changed and working people
00:47:23
clawed back some of that value through
00:47:25
unions through labor standards so on and
00:47:28
so forth. So one of I guess the essence
00:47:30
of what I want to get to is I mean
00:47:32
something you've always talked about Dan
00:47:33
as well is that if you start applying
00:47:35
pressures on these companies or
00:47:36
entrepreneurs they can just now get up
00:47:38
and leave. And that was quite different
00:47:39
from that era where we weren't dealing
00:47:42
with technological businesses. is we
00:47:43
weren't dealing with IP and those
00:47:44
things. So if you start imposing some of
00:47:45
these measures, will these companies get
00:47:47
up and leave and go somewhere else where
00:47:49
market conditions are preferable? A lot
00:47:51
of UK entrepreneurs are, as we've seen
00:47:53
from some of the numbers recently,
00:47:55
choosing to go work elsewhere. Okay.
00:47:57
Yeah. I think one of the things that
00:47:58
just needs to be acknowledged and put on
00:47:59
the table is one of the challenges you
00:48:01
have here is you have the Europe or the
00:48:04
world has built this incredibly stupid
00:48:06
system where you can operate a business
00:48:09
here, take advantage of the UK's market,
00:48:13
take advantage of the UK's rule of law,
00:48:15
take advantage of the UK's uh
00:48:17
infrastructure,
00:48:19
put your stuff in a box, move to Dubai,
00:48:22
and pay no tax. Right? It's idiotic.
00:48:26
It's just it's just idiotic and
00:48:29
suboptimizing. As an American, I pay tax
00:48:31
wherever I go, right? So, I cannot come
00:48:34
to a place and take advantage of it and
00:48:36
then skirt the laws. So, this is such a
00:48:40
profound
00:48:42
disincentive to do the right thing.
00:48:44
>> Well, yeah. Yes. But the real culprit is
00:48:47
what companies can do because US
00:48:49
companies can do it. You you can't do it
00:48:51
as an individual, but you can set up an
00:48:53
office in Ireland in Luxembourg,
00:48:55
>> which is even worse. and and it's the
00:48:56
corporations that are the bad guys,
00:48:58
>> which is but you have both problems be
00:49:01
you have you have UK based entrepreneurs
00:49:03
who are like well I can stay here and
00:49:05
pay 40% tax or whatever it is right and
00:49:07
just pop off to Dubai run the business
00:49:10
virtually and pay nothing.
00:49:11
>> So what are you saying should be done
00:49:12
with those people that do that?
00:49:13
>> I think that UK citizens should pay UK
00:49:16
UK tax wherever they go and German
00:49:19
citizens should pay German tax wherever
00:49:20
they go.
00:49:21
>> Do you agree? I don't think that will
00:49:22
solve it because it's not citizens, it's
00:49:25
corporations that are the bad guys.
00:49:26
>> Well, it will solve one problem. It will
00:49:28
not This other problem needs to be
00:49:30
handled too.
00:49:30
>> The the the giant vampire squids of the
00:49:32
world are companies that are pumping
00:49:34
money out of the economies and they're
00:49:36
faceless corporations that have figured
00:49:38
out how to play this game. So, for
00:49:40
example, let's take YouTube for example.
00:49:43
YouTube is serving up a ton of videos to
00:49:46
people all over this country and they're
00:49:48
running ads, but that is pretending to
00:49:51
be in some distant place. It's not
00:49:53
pretend. It's not being in the UK. And
00:49:55
what we used to do in the UK is we used
00:49:57
to have a broadcast license. If you want
00:49:58
to broadcast in the country, you pay a
00:50:00
flat fee and you can broadcast. Why is
00:50:02
YouTube not playing a paying a broadcast
00:50:04
license? If they are a broadcaster
00:50:07
effectively uh and running ads, they sit
00:50:10
there and say, "Oh, but there's this and
00:50:12
we shift our profit through here and oh,
00:50:13
we have to I'm so sorry, but we have to
00:50:15
buy our licensing, you know, from this
00:50:17
company over in this other vanuatu or
00:50:19
whatever." It's like, "No, no, no. We
00:50:21
don't care about that." It's like, look
00:50:22
at how
00:50:22
>> you do business in the UK. You should
00:50:24
pay tax.
00:50:24
>> It's just as simple as you you're you've
00:50:26
got this many views and the broadcast
00:50:28
license for you is this much.
00:50:30
>> Okay. So do you agree on both points
00:50:31
then that you should tax corporations
00:50:33
based on where their customers are
00:50:34
consuming and you should tax individuals
00:50:38
irrespective of where they decide to fly
00:50:39
off to?
00:50:40
>> Look, I think in a globalized world that
00:50:42
we live in an individual should be
00:50:45
allowed to make a new life for themsel
00:50:46
if they want to, right? Like so for
00:50:48
example, if I genuin I I I make a new
00:50:50
life for myself in the UK 20 years ago.
00:50:53
I came here from Australia and I don't
00:50:55
want to pay tax in Australia because I
00:50:56
was born in Australia. I paid a million
00:50:58
dollars worth of tax in Australia, but I
00:51:00
now live here. Like my I've got three
00:51:02
kids here and I've got a house here and
00:51:03
my whole life is here. I don't like the
00:51:05
idea that just because I was born in
00:51:07
Australia, it's it's not possible for me
00:51:09
to make a new life.
00:51:10
>> But we have a tax treaty.
00:51:11
>> Yeah.
00:51:12
>> Like there are ways of handling this,
00:51:14
but this ridiculous Look, every rich
00:51:16
person I know in Europe is playing this
00:51:18
ridiculous game of trying to avoid
00:51:20
taxes, right? I don't know how you can
00:51:23
look at that and think this is a good
00:51:24
system. But the issue is you and I both
00:51:26
know it's so easy to just turn this into
00:51:29
a company game. So like for example, if
00:51:33
>> we have to appropriately close the
00:51:34
loopholes
00:51:35
>> like Yeah. But like I just I'm seeing so
00:51:38
many people demonize people like Nick,
00:51:41
right? They go, "Oh, this guy, he's you
00:51:44
know, he's a rich guy and he's like, you
00:51:45
know, shouldn't be so rich." Honestly,
00:51:48
he's not the problem. I'm sure you pay a
00:51:49
bunch of taxes and also you you create
00:51:52
economic activity around you. These mega
00:51:54
corporations do trillions of dollars out
00:51:58
of economies.
00:51:58
>> If we take a mega corporation, you know,
00:52:01
think of one in your head, and we decide
00:52:04
to tax them where their customers are.
00:52:05
>> I was looking at some of the research
00:52:06
and says corporations rarely just absorb
00:52:08
the tax. When countries like the UK or
00:52:10
France introduce taxes based on local
00:52:12
users,
00:52:13
>> tech giants like the like the biggest in
00:52:15
the world immediately raised fees and
00:52:17
prices for the consumer and small
00:52:18
businesses inside those specific
00:52:20
countries to offset the cost. If we had
00:52:22
a global tax system that prevented this,
00:52:24
then they wouldn't do it. They couldn't
00:52:25
do it.
00:52:26
>> If the compliance cost of tracking user
00:52:28
locations and paying to local taxes
00:52:29
outweighs the profit from the region,
00:52:30
companies also tend to simply block
00:52:32
users in those countries or pull their
00:52:34
products entirely.
00:52:35
>> Great. Great. And that opens up a
00:52:37
possibility of a local company to do it.
00:52:39
>> Worse,
00:52:40
>> huh?
00:52:41
>> Worse,
00:52:42
>> maybe better.
00:52:43
>> I was thinking here about the large
00:52:44
language models and I was thinking about
00:52:46
that as an example. If you know if the
00:52:48
UK tried to take on Gemini or Chat GBT
00:52:51
etc we would be using a significantly
00:52:54
worse technology.
00:52:56
>> The truth is that those those mega corps
00:52:58
>> that's accurate though
00:52:59
>> those mega corpse they don't do this
00:53:01
they they want to own the world and they
00:53:02
want to dominate the world. They they're
00:53:03
not interested in cutting countries out
00:53:05
right none of them actually cut
00:53:07
countries out.
00:53:08
>> When do you think you think Facebook is
00:53:09
just going to leave the UK?
00:53:11
>> Yeah. Like they're not going to do that.
00:53:13
So and the other way is how you do it.
00:53:15
So if you simply
00:53:16
>> How do you do that in Australia though
00:53:17
with the news publishing business?
00:53:19
>> They might do it very briefly as a way
00:53:21
to punish political uh disscent but
00:53:24
ultimately they operate globally. They
00:53:26
have a global business model and they uh
00:53:30
essentially too we just need to say I'm
00:53:32
sorry you've had your 20 30 years of not
00:53:34
paying taxes anywhere but we're not
00:53:36
doing that anymore and you know we we
00:53:38
are very good at coordinating when we
00:53:40
want to coordinate and we need to say
00:53:42
the bad guy here I mean it is really
00:53:44
just pulling money out of our economies
00:53:46
and taking it to other other places and
00:53:49
one of the reasons that the USA has
00:53:51
become so wealthy with its stock market
00:53:53
is because it is the end valuation where
00:53:56
all of these vampire squids end up with.
00:53:59
>> If I look at what happened, it was um
00:54:01
Australia I was thinking about um but it
00:54:03
also happened in Canada where they
00:54:04
passed a law called the online news act
00:54:06
requiring tech giants to pay local
00:54:08
publishers whenever Canadian users
00:54:10
shared or viewed news links. And
00:54:12
immediately instead of paying uh the
00:54:14
user location tax, Meta simply blocked
00:54:15
all news content from every user in
00:54:18
Canada because the cost of compliance
00:54:20
just wasn't worth the hassle for one
00:54:21
particular market. And you have the same
00:54:23
thing happen with Amazon where several
00:54:24
US states like California tried to force
00:54:26
Amazon to collect local sales tax simply
00:54:28
because Amazon had independent
00:54:30
affiliates like bloggers etc um living
00:54:32
in those states and rather than dealing
00:54:34
with the complex local tax collection
00:54:35
Amazon instantly terminate thousands of
00:54:37
affiliate accounts. If every state
00:54:40
required Amazon to collect local sales
00:54:42
tax then obviously they couldn't do any
00:54:44
of that. they would have to deal with
00:54:45
it, right? It's just these big
00:54:48
corporations have a massive advantage
00:54:51
over the jurisdictions that they're
00:54:53
operating in because they have so much
00:54:55
more power and so much more flexibility.
00:54:57
So what is the what is your solution
00:54:59
then Daniel to solve for this inequality
00:55:02
problem that we're experiencing because
00:55:05
you know you seem to be less interested
00:55:06
in the sort of workers rights piece
00:55:08
because that seems to
00:55:09
>> we've tried it.
00:55:10
>> We try you're saying we tried it.
00:55:12
>> Yeah. What I would like personally is I
00:55:14
want to see way more small businesses
00:55:16
and I want the government to favor small
00:55:17
businesses and essentially say we're
00:55:20
going to reduce the taxes and the
00:55:22
pressure on the small businesses. We're
00:55:23
going to advantage local small
00:55:24
businesses that are here and paying tax.
00:55:26
Um we're going to create special
00:55:28
economic trading zones if your business
00:55:30
is based here uh and is a smaller size.
00:55:32
We're going to basically make ourselves
00:55:34
highly competitive for small businesses
00:55:36
to show up and do their aame.
00:55:38
>> And what about big businesses? punish
00:55:40
punish big businesses that that uh I
00:55:42
wouldn't punish them. I would just tilt
00:55:44
the pl I'm 100% with him. Tilt the
00:55:47
playing field
00:55:49
>> towards smaller businesses and startups.
00:55:52
You know, I I'm not sure if you've heard
00:55:53
about this thing that uh I just joined
00:55:55
the board of called Enterprise Britain
00:55:57
that that um Brent Herman who does
00:56:00
Founders Forum. Yep.
00:56:01
>> And Steve Fitzpatrick who founded OO
00:56:03
just started. It's called Enterprise
00:56:05
Britain. It's a group of us who have
00:56:07
gotten together uh with the express
00:56:10
purpose of doing exactly pretty much
00:56:12
what you what you describe, which is to
00:56:15
try to make Britain an even better
00:56:18
environment for business, mostly small
00:56:20
and medium-sized businesses. And one of
00:56:22
the great challenges here is to f try to
00:56:24
find capitalist structures that allow
00:56:26
small companies to turn into larger
00:56:28
companies while remaining here and not
00:56:30
fleeing to a better place. But I'm I am
00:56:33
100% in agreement with this. And you can
00:56:38
have an incredibly dynamic, fast growing
00:56:40
economy
00:56:42
where all of the benefits flow to the
00:56:44
people at the very top and everybody
00:56:46
else gets screwed.
00:56:48
>> And you have to do both.
00:56:50
>> You have to do both. I've spent the last
00:56:52
decade building and investing in
00:56:54
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00:56:57
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00:56:59
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00:57:01
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00:57:02
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00:57:05
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00:57:07
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00:59:00
I mean, one of the most important
00:59:01
subjects at the moment in society is
00:59:04
artificial intelligence. And we you
00:59:06
probably saw recently Eric Schmidt did a
00:59:07
commencement speech in front of
00:59:08
thousands of students and every time he
00:59:10
said the word stage
00:59:11
>> every time he said the word AI um one of
00:59:13
the things that Anthropic or one of the
00:59:14
leading AI companies said recently is
00:59:16
that entry- level jobs are at risk and
00:59:18
I've got this graph here showing the
00:59:20
decline of entrylevel job postings. I
00:59:23
believe it was on LinkedIn um pull from
00:59:26
somewhere and it shows that they're
00:59:28
consistently dropping and dropping and
00:59:29
dropping. AI is I think about it so
00:59:32
often. I was up late last night trying
00:59:34
to think through some of this stuff
00:59:35
because Anthropic released a report
00:59:37
yesterday showing that the AI models
00:59:39
will be able to improve themselves
00:59:40
theoretically in the future and what
00:59:42
this might mean.
00:59:44
>> How disruptive do you think AI is going
00:59:46
to be as it relates to job losses?
00:59:48
>> You know, I don't think Bernie Sanders
00:59:49
latest idea is terrible.
00:59:51
>> US will own 50% of all the companies. It
00:59:53
is absolutely true that AI has
00:59:56
monetizing for free humanity's
00:59:59
intellectual property and a few people
01:00:01
are going to directly benefit from that.
01:00:03
And I think that um in the same way that
01:00:06
Norway created a sovereign wealth fund
01:00:08
with this enormous asset that they had
01:00:12
uh creating a sovereign wealth fund with
01:00:14
50% of the value created by AI and
01:00:17
recycling that into uh I think it's
01:00:20
unclear exactly how those benefits
01:00:22
should be should be recycled but trying
01:00:25
to find a way to make some of that value
01:00:28
a cushion for the disruption that it
01:00:30
will inevitably cause. I don't think
01:00:32
that's a crazy idea.
01:00:33
>> It's a good idea for China and the US.
01:00:35
>> Yes. Yes.
01:00:38
>> But not for anywhere else necessarily.
01:00:39
It's not going to help Senagal or
01:00:41
Southampton much.
01:00:42
>> No. In fact, it'll damage a lot of those
01:00:44
places. You know, like the Philippines
01:00:46
has benefited enormously by being the
01:00:49
outsourced back office uh for a lot of
01:00:52
small businesses that AI can now do a
01:00:54
lot of those those uh those jobs. Um,
01:00:57
one of the things that I always come
01:00:58
back to is the idea that say the UK has
01:01:01
5.7 million businesses. We have a
01:01:03
million unemployed people. We need
01:01:05
1/5ifth of the businesses to employ one
01:01:08
person. AI does actually make your
01:01:10
business better. Like AI is really good
01:01:12
at helping you with your marketing. AI
01:01:13
is great at helping you do legal
01:01:15
contracts. There are 100 ways that AI
01:01:17
could actually make 5.7 million
01:01:20
businesses a little bit better to the
01:01:22
point where they want to hire someone.
01:01:24
And if we can incentivize those things
01:01:26
to happen, businesses are trained on how
01:01:27
to use AI to their advantage and tax
01:01:30
breaks for small businesses that are
01:01:32
hiring. And we will, you know, there's
01:01:34
actually 5.7 million businesses and a
01:01:36
million unemployed people. That's a good
01:01:37
there's a good match there.
01:01:39
>> You know, um, a lot of people have been
01:01:40
talking about AI agents and, uh, what an
01:01:43
AI agent can do, for anyone that doesn't
01:01:45
know, is it can go on your computer and
01:01:47
it can get any task you want done on the
01:01:49
computer. um whether that's you know
01:01:51
editing tasks or whether it's you know
01:01:53
manual data entry tasks or whatever it
01:01:54
is it can click around on a computer and
01:01:56
do things a lot of the entrylevel roles
01:01:59
were often given are that kind of work I
01:02:01
think my entry level entry- level job
01:02:03
job after I dropped out of university
01:02:04
was kind of doing that kind of thing
01:02:06
there was also a little bit of a sales
01:02:07
component where I'd cold call people and
01:02:09
AI can now do the cold calls too and
01:02:11
increasingly if we just play the rate of
01:02:13
development forward we'll be able to do
01:02:14
those things so if these businesses get
01:02:16
more and more efficient um again it
01:02:19
comes back this an entry- level point is
01:02:22
what what role will entry-level team
01:02:24
members have in these kind of companies.
01:02:26
So what's interesting for me I have a
01:02:28
group of companies small businesses uh
01:02:30
dynamic small businesses we've
01:02:32
implemented AI in all of them and as a
01:02:34
result we've hired people
01:02:35
>> who have you hired
01:02:36
>> entry- level people
01:02:37
>> we've hired some entry- level people who
01:02:40
are augmented by AI so they become more
01:02:42
valuable because of AI but like things
01:02:44
like appointment setting we've ended up
01:02:46
hiring more salespeople because we get
01:02:48
more appointments we we use it with our
01:02:50
marketing and we end up hiring people
01:02:52
who can actually have those final
01:02:53
conversations with people at the very
01:02:55
core of my organ organizations, we have
01:02:57
an AI layer and the AI layer has context
01:03:00
and skills and models and security
01:03:02
layer, right? All all in there and it
01:03:04
spits out amazing information and data
01:03:07
and reports and tells us who to talk to
01:03:08
and why to talk to them and what to talk
01:03:10
to them about. All these things are
01:03:11
happening because of AI.
01:03:12
>> But it doesn't get around the point that
01:03:14
like if you think about Uber, uh DAR has
01:03:16
been pretty clear that the 9 million
01:03:17
drivers they have, I think it is, are
01:03:19
going to lose their jobs in the future.
01:03:20
If you think about the the other sort of
01:03:22
white collar professions we've
01:03:24
described, they those roles won't won't
01:03:26
exist in the future. Well, I should say
01:03:28
those roles will be will be will be
01:03:30
changed.
01:03:30
>> Correct. If I put on my more optimistic
01:03:33
hat, the thing is is that all businesses
01:03:37
operate in a competitive environment and
01:03:39
there are two ways to compete. One is to
01:03:42
be cheaper. The other is to be better.
01:03:45
Right. And the thing about AI is that
01:03:50
yeah, there are tasks that you can
01:03:53
automate away, but one person with good
01:03:58
AI tools may be able to do the job of
01:04:01
five.
01:04:02
>> Mhm.
01:04:02
>> Right. And yeah, you could eliminate
01:04:05
that job or you could keep that person,
01:04:08
give them the right tools and out
01:04:09
compete your competitors.
01:04:10
>> The right tools.
01:04:11
>> The right tools. I think there's an
01:04:13
assumption that
01:04:14
>> I mean this is of course what happened
01:04:15
with computers, right? I mean I'm I am
01:04:17
older than you guys so I I remember when
01:04:20
calculators hit.
01:04:23
>> You had to be there to realize how
01:04:25
freaked out people were about
01:04:27
calculators,
01:04:29
>> right? Like people were talking about
01:04:30
like what are the accountants going to
01:04:32
do and and and will kids learn math
01:04:35
anymore? I mean it was it was like
01:04:38
extremely controversial to bring a
01:04:40
calculator to to to school and then
01:04:44
along came computers and the truth is
01:04:46
that computers didn't reduce the amount
01:04:49
of work that people did they increased
01:04:50
the amount of work that people did and I
01:04:53
do believe that there are ways in which
01:04:55
AI is probably going to do that and so
01:04:57
the job loss may not be as apocalyptic
01:05:00
as it now feels like it may be because
01:05:03
again at the end of the day you have two
01:05:05
ways to choose to compete. If you, you
01:05:09
know, you can get rid of somebody and do
01:05:12
X, but you could keep that person and
01:05:14
have them do 5X and out compete,
01:05:17
>> you know, your competitors in another
01:05:18
dimension. I think that that will be
01:05:21
something that people are likely to do.
01:05:22
Doctors are just going to be better
01:05:24
doctors.
01:05:25
>> I think I I definitely agree that
01:05:26
there's going to be this sort of
01:05:27
augmentation of certain individuals. I
01:05:30
think maybe the difference between like
01:05:32
calculators or computers versus this is
01:05:34
AI is coming into a technological
01:05:37
economy and it is coming in with instant
01:05:41
scale in a way that when when anthropic
01:05:44
shipped their new model last week it
01:05:47
went to all of us at once. Yeah.
01:05:49
>> Everywhere in the world we were all boom
01:05:52
step changed with computers. I remember
01:05:54
the day that like my dad ordered the
01:05:56
first computer for our house and we
01:05:57
waited for weeks and weeks and weeks and
01:05:58
then we got it. It was super expensive
01:06:00
to get one. We unboxed it. I remember us
01:06:02
all stood around it looking at and it
01:06:03
was like this Windows 95 machine that
01:06:05
had like no memory on it.
01:06:06
>> Um so the distribution the sort of
01:06:08
disruption was much slower.
01:06:10
>> The the pace the pace was much slower,
01:06:12
>> right?
01:06:13
>> And I understand that like with my with
01:06:15
our team there's no intent we have no
01:06:17
intention at all to let anybody go
01:06:19
because of AI. We're reskilling people,
01:06:21
training people. However, would we end
01:06:23
up hiring less people, especially in the
01:06:26
near term, than we would have otherwise?
01:06:28
>> I think that's maybe conceivable.
01:06:30
>> Yeah.
01:06:31
>> Um, and a lot of companies, I think, are
01:06:32
in that position where I actually was
01:06:33
speaking to someone yesterday and they
01:06:34
said, "We're just letting the natural
01:06:35
attrition in our call center take care
01:06:40
of the shift, which means they they have
01:06:43
they lose 25% of people from their call
01:06:45
center naturally. They're just not
01:06:46
hiring other people back in." And
01:06:48
actually, Clown's CEO said the same
01:06:49
thing. thing. He said, "We're just
01:06:50
letting the attrition take care of it."
01:06:52
>> I'll give you another example though,
01:06:53
just to counter that. Um, I work with a
01:06:56
husband and wife couple in the north of
01:06:58
England who they had a little video
01:07:01
production agency and like one or two
01:07:04
people who did a little bit of
01:07:05
contracting with them. Uh, they used AI
01:07:07
to create a piece of software and that
01:07:09
piece of software uh helps automate
01:07:12
script writing and a few of the things
01:07:14
that they do.
01:07:15
>> Um, they launched a waiting list for
01:07:17
this. They got 5 a half thousand people
01:07:18
to join the waiting list. They then
01:07:20
signed up their first 1500 clients to a
01:07:22
piece of software that cost almost
01:07:23
nothing for them to build in four
01:07:24
months. Um, and now they're hiring a
01:07:26
team of 10 people. And this is a husband
01:07:29
and wife who had a small constrained
01:07:32
business who are now uh building out a
01:07:35
bigger business. And this is something
01:07:37
that could never have happened. They
01:07:38
haven't had to raise billion millions of
01:07:42
dollars. They haven't had to hire 30 40
01:07:44
people. So this this tiny little SAS
01:07:47
opportunity is suddenly possible because
01:07:49
of AI and take take that AI away and
01:07:52
that fast growth dynamic little
01:07:54
businesses is
01:07:55
>> yeah I think anecdotally I could come up
01:07:56
with lots of examples as well where
01:07:58
particular people are highly
01:07:59
entrepreneurial they come across an
01:08:00
opportunity but there's this broad if
01:08:02
you just zoom out on the way that people
01:08:04
generate value in the economy at the
01:08:05
moment so much of that is going to
01:08:07
change and it's going to be quite quick
01:08:08
it feels like
01:08:09
>> oh totally
01:08:09
>> and I don't know what you do about like
01:08:11
what do you do about that sudden shift
01:08:12
>> well this this happened in the Jevans
01:08:14
paradox The person who had a tractor
01:08:17
displaced a hundred people who were in
01:08:19
the field and those hundred people went
01:08:21
into the city looking for work all at
01:08:23
once. And it was Charles Dickens wrote
01:08:25
the tale of two cities. He wrote u uh
01:08:28
Oliver Twist. Uh guess who else came out
01:08:30
of the Jevans paradox? Our good friend
01:08:33
KL Marx who came up with the most toxic
01:08:35
ideas ever created and written down,
01:08:37
right? He came off the back of the
01:08:38
Jevans paradox.
01:08:39
>> So what you do about it?
01:08:41
>> Uh UBI.
01:08:42
>> I'm not a big fan of UBI at the moment.
01:08:44
Isn't that kind of what this 50% Bernie
01:08:45
Sanders thing would do?
01:08:46
>> Well, it's it's sovereign wealth fund
01:08:48
basically, but you have to find a way to
01:08:50
help manage through this transition and
01:08:53
you have to I think depend on the value
01:08:55
create. Look, the the whole the the
01:08:58
whole valuation that AI is predicated on
01:09:02
is job disruption, right? You can't you
01:09:04
can't get to those numbers unless you're
01:09:06
displacing lots of jobs.
01:09:08
>> Exactly. And and if that's true, then we
01:09:11
should grab some of that value that is
01:09:14
created and recycle it into the economy
01:09:17
to try to cushion the disruption that it
01:09:19
creates.
01:09:20
>> This is a bit of a socialist idea,
01:09:21
right?
01:09:22
>> I don't call that socialism.
01:09:23
>> What do you call that?
01:09:24
>> I don't know. Just common sense.
01:09:26
>> But wouldn't that broadly apply to all
01:09:27
all companies and rich people? If
01:09:29
there's if they are disrupting the
01:09:31
economy and taking an unfair share of
01:09:33
that disruption, should we not just grab
01:09:35
and recycle back in? But that's the b
01:09:37
that is the basis upon which every high
01:09:39
functioning democracy in the in the
01:09:41
world operates. I mean every high
01:09:43
functioning democracy in the world has
01:09:45
progressive taxation labor standards.
01:09:48
There's a difference between seizing
01:09:49
private property uh which would be a
01:09:52
socialist way of doing things and a
01:09:54
communist way of doing things and owning
01:09:57
strategic assets which
01:10:00
>> which are private property. So, for
01:10:01
example, the the Dubai government owns
01:10:04
the uh physical hotel buildings that uh
01:10:08
that run Dubai and it leases those out
01:10:11
to hotel operators, but it keeps money
01:10:13
in its sovereign wealth fund because it
01:10:15
says basically a big part of Dubai is
01:10:17
that we own these kind of land assets.
01:10:19
>> So, do you think we should go and take a
01:10:22
a portion of these companies?
01:10:24
>> Well, the difference was the Dubai
01:10:25
government actually developed those
01:10:27
assets,
01:10:28
>> right? But we're we're already too far
01:10:29
down the line with within a capitalist
01:10:30
society like
01:10:32
>> we might say we might say that data is
01:10:34
the new oil and data is a common good
01:10:36
and it is a common asset that has been
01:10:38
um sequestered illegitimately by these
01:10:40
companies. So therefore you're not
01:10:42
seizing what they created. You're you're
01:10:44
basically saying I'm sorry but you need
01:10:45
to pay a license back to this sovereign
01:10:48
wealth fund because you're using a
01:10:50
common asset that you were able to
01:10:52
essentially seize.
01:10:53
>> You stole it you stole it from Africans
01:10:55
and British people. You stole it from
01:10:56
people in Australia. You stole it from
01:10:58
people in Canada.
01:10:59
>> The biggest issue that we're having is
01:11:01
that we're actually the nature of the
01:11:03
entire economy is changing. So this
01:11:05
happened 250 years ago where the nature
01:11:07
of the economy was land and we had an
01:11:09
economic system called feudalism and
01:11:11
colonialism. And then the nature of the
01:11:13
economy was industrialization and we had
01:11:16
a economic system called socialism and
01:11:18
capitalism. And now the nature of the
01:11:20
economy is actually fundamentally
01:11:22
changing. So in economics there's four
01:11:23
factors of production. land, labor,
01:11:25
capital, enterprise. We're now swinging
01:11:27
like a pendulum from land through
01:11:29
capital, labor, and now we're actually
01:11:30
in an enterprise economy. And we need
01:11:33
some sort of economic system that
01:11:35
reflects the reality of how money and
01:11:36
wealth is made.
01:11:37
>> What is that? Is that go to open AI,
01:11:39
take 50% of their company and then pay
01:11:43
out the profits of that 50% to the
01:11:45
people.
01:11:45
>> I'm always skeptical of any socialist
01:11:47
ideas. If it comes from Bernie Sanders,
01:11:49
I'm skeptical.
01:11:50
>> Okay. But Bernie Sanders is not a
01:11:51
socialist. Like let's be socialist. He
01:11:53
he says he's a socialist. Socialism
01:11:56
social no social socialism is
01:12:00
>> you know the government owning all the
01:12:01
means of production right look there are
01:12:05
a million forms of capitalism right we I
01:12:09
every country operates slightly
01:12:10
differently and there I don't think that
01:12:14
Bernie Sanders is saying that we should
01:12:18
abandon markets. What he is saying is we
01:12:21
should manage markets for the public
01:12:24
benefit, not exclusively for the benefit
01:12:27
of the owners of capital. And I think
01:12:29
that's really different.
01:12:30
>> You know, with like an Amazon, they're
01:12:32
using the roads.
01:12:34
>> Yeah.
01:12:34
>> And the infrastructure,
01:12:35
>> correct?
01:12:36
>> So would you go take 50% of those
01:12:38
companies as well for public benefit and
01:12:41
then pay it out to
01:12:42
>> No, but the citizens
01:12:43
>> we effectively do take part of them in
01:12:46
the form of taxes, right? Now, now, now
01:12:49
the taxes that we impose on those
01:12:51
companies, I would argue, and Dan may
01:12:53
may agree, are insufficient.
01:12:56
>> They do not accurately reflect the value
01:13:00
that we give them. They don't return
01:13:03
equal value that
01:13:04
>> So, you think increase the taxes on
01:13:05
companies like Amazon? You both agree?
01:13:07
>> Well, Amazon is very successfully
01:13:09
avoiding taxes. Um, so
01:13:11
>> so would you agree to increase?
01:13:13
>> I think we need to have we need to close
01:13:14
tax loopholes.
01:13:16
taxes like all other companies that
01:13:19
operate within the econom
01:13:26
and all that sort of stuff who in
01:13:27
competition with Amazon look one of the
01:13:29
biggest issues that we have is we have
01:13:31
widespread incompetence in governments
01:13:32
and I'll give you a quick stat on this
01:13:34
in the UK government you are 10 times
01:13:37
more likely to die than to be fired for
01:13:39
poor performance and the UK government
01:13:42
fires people at 1600th the as normal
01:13:45
businesses for incompetence. So we have
01:13:48
an accumulation of massive incompetence
01:13:51
in government. So the idea you can come
01:13:53
up we can come up with all the best
01:13:54
ideas under the sun at this table. We
01:13:57
have a uh fundamentally incompetent set
01:14:01
of people who have misaligned
01:14:04
incentives. Uh we have basically a
01:14:06
revolving door between financial
01:14:09
industrial complex, technology
01:14:10
industrial complex. Well, the
01:14:13
Singaporean government, they basically
01:14:15
said that we're going to have a very
01:14:17
high degree of meritocracy in government
01:14:19
that essentially we promote and fire
01:14:22
based on outcomes and merit merit.
01:14:24
>> Singapore is a miracle of governance.
01:14:26
Amazing governance.
01:14:27
>> It's it's a it's a miracle of
01:14:28
governance, but it is a very small
01:14:30
place.
01:14:31
>> No, totally. And perhaps the only place
01:14:33
in the history of planet Earth that has
01:14:35
benefited from uh a well-meaning
01:14:39
dictator, right?
01:14:40
>> Well, yeah.
01:14:42
It's an astonishing story of capability,
01:14:45
competence, for foresight. Um,
01:14:48
>> so what is the solution with this AI
01:14:50
revolution? It's I think we all agree
01:14:51
that there's going to be job disruption
01:14:53
and there's going to be a new type of
01:14:55
job. There's going to be probably a
01:14:56
delta of people transitioning to those
01:14:58
new types of jobs. Um, I I've said this
01:15:00
before, but I even noticed that within
01:15:02
our recruitment processes now, we are
01:15:04
really looking for people that have a
01:15:05
certain set of skills.
01:15:06
>> We always ask,
01:15:07
>> and it's harder and harder and harder to
01:15:09
find those people. Um,
01:15:11
>> well that's training. That's education
01:15:12
and training. It is that takes time.
01:15:14
>> The school system needs to produce
01:15:16
people that you would want to hire.
01:15:17
>> Yeah. And that takes a lot of time.
01:15:19
>> In my hiring, I ask the question, how
01:15:20
deep are you in the AI rabbit hole? And
01:15:22
anyone who says, oh, a lot. I'm like,
01:15:24
okay, join the team.
01:15:25
>> And and also, if you think about
01:15:27
humanoid robots, Elon Musk's pay packet
01:15:29
mandates him to deliver millions of
01:15:31
humanoid robots or else he doesn't get
01:15:33
his big pay packet. If we think about
01:15:35
robotics and humanoid robots coming
01:15:36
through, we watched the other day Figure
01:15:38
AI released this video showing a
01:15:40
humanoid robot sorting packages on a
01:15:42
production line for eight days straight,
01:15:45
beating a human sorting those packages
01:15:46
on the production line. My car in Los
01:15:49
Angeles now drives itself and as do the
01:15:51
taxis and there's a huge race to make
01:15:54
autonomous vehicles. Um, I'm sure
01:15:56
there's new jobs created and I
01:15:57
understand in foresight it's hard to
01:15:59
understand what those will be. I assume
01:16:00
there'll be more human jobs, more sales
01:16:02
jobs. My only thing that I can say is
01:16:04
that the future is small businesses.
01:16:07
It's it's small teams of 10 people
01:16:09
making YouTube channels. It's small
01:16:10
teams of 10 people making software. It's
01:16:13
like the the when you have millions and
01:16:15
millions of little small businesses,
01:16:17
everyone's happier.
01:16:18
>> But if you read what Anthropic released
01:16:19
yesterday, they're making the claim that
01:16:21
actually we're getting to a point where
01:16:23
it will be an individual with a team of
01:16:26
agents who can now make a trillion
01:16:28
dollar company without hiring a single
01:16:30
person. And actually when you said about
01:16:32
making software making that they would
01:16:34
they might argue that that'll be agents
01:16:36
making that software. Anthropic said
01:16:38
that the amount of code each
01:16:39
individual's producing on their own is
01:16:41
eight times. And this one particular
01:16:43
quote which I actually screenshotted on
01:16:44
my phone last night comes from an
01:16:45
engineer at Anthropic who was saying
01:16:47
they feel useless because now they they
01:16:50
say they haven't written a line of code
01:16:51
in months and months and months. This
01:16:52
anthropic engineer was basically saying
01:16:54
like I come to work this agent writes
01:16:56
the code for me and I kind of sit and
01:16:58
watch and I feel useless. Um so all
01:17:01
those examples you gave
01:17:02
>> what I'm okay but what would happen in
01:17:04
that situation is you would have a
01:17:05
massive deflationary effect the cost of
01:17:07
if if there was one person doing all
01:17:09
sorts of things in the economy then the
01:17:11
cost of that would go to the cost of the
01:17:13
electricity to run it right so massive
01:17:16
deflationary and then the question
01:17:17
becomes well what does everyone do right
01:17:19
what do we all do we do human things
01:17:21
right humans always come up with things
01:17:23
to do with each other uh like if I was
01:17:25
to tell my grandfather that there is a
01:17:27
job called a personal trainer who takes
01:17:29
you to the gym and counts your reps,
01:17:31
right? My grandfather would go, "That's
01:17:33
insane." And I say, "Oh, there's 50,000
01:17:35
personal trainers in gyms all over the
01:17:37
country." So, there are always these
01:17:40
crazy new jobs that get created. I look
01:17:42
at what trust fund kids do, right? Cuz a
01:17:43
lot of trust fund kids, they go, they
01:17:45
don't have to worry about money and they
01:17:47
don't have to worry about resources and
01:17:48
they go find something to do and it's
01:17:50
always weird. We're going to traverse
01:17:52
through, you know, potentially the jobs
01:17:53
we have now involuntarily
01:17:56
go through this transition moment where
01:17:59
I think history is quite clear on what
01:18:00
happens in these transition moments.
01:18:02
>> It gets ugly.
01:18:02
>> It gets ugly.
01:18:03
>> Yeah.
01:18:04
>> And then we'll come to, you know, what
01:18:05
I'm hearing is that you're saying we
01:18:06
will come to some kind of utopia on the
01:18:08
other end of this.
01:18:09
>> No,
01:18:10
>> no,
01:18:12
>> no. I don't think I don't think there's
01:18:14
going to be utopia.
01:18:15
>> What do you think?
01:18:15
>> Uh, look, I I don't think utopias exist.
01:18:18
I do think that markets are the greatest
01:18:20
social technology ever invented for
01:18:22
creating prosperity and for enobbling
01:18:24
the human spirit. That is not because
01:18:27
markets are efficient allocators of
01:18:29
scarce resources which is the
01:18:30
conventional view. Markets are an
01:18:33
evolutionary system that enables groups
01:18:35
of people to come together and solve
01:18:36
complex problems and solutions to human
01:18:39
problems is what prosperity actually is.
01:18:42
It isn't GDP or money. And the best
01:18:45
world that you can build, I think, on
01:18:48
earth is a market economy
01:18:52
governed by a robust democracy that
01:18:54
robustly includes all citizens in that
01:18:58
economy. And your your answer is small
01:19:01
business. And I I'm 100% behind you and
01:19:04
I I wish you all the success. My answer
01:19:08
is that a lot of people are going to end
01:19:10
up working for large companies or medium
01:19:12
companies and that we have to ensure or
01:19:15
my part of the answer is that we have to
01:19:18
have standards in place to ensure that
01:19:21
those companies treat people well enough
01:19:24
so that they can be dignified
01:19:27
participants in both the society and the
01:19:29
economy. And that will require
01:19:33
innovation in laws and rules and all
01:19:36
sorts of mechanisms to enable that. But
01:19:39
that there is no alternative if you want
01:19:42
to live in a decent society. And and the
01:19:45
but the high order bit for me and the
01:19:47
reason I work on economics is that the
01:19:50
existing economic paradigm basically
01:19:53
says markets are perfectly efficient. We
01:19:55
should just let them run and you know
01:19:58
what comes will come. So you're really
01:20:00
focused on increasing the workers lives
01:20:03
and pay.
01:20:04
>> So if you understand the economy from
01:20:06
the conventional point of view,
01:20:09
including people in the economy is a
01:20:11
liberal luxury
01:20:14
that you can afford if and when you have
01:20:16
growth. And I think everything the new
01:20:18
economics says is that including more
01:20:21
people in the economy more robustly is
01:20:24
actually the tech technical mechanism
01:20:26
that makes both economies grow and
01:20:30
democracies function.
01:20:31
>> So to simplify that what does that mean
01:20:33
if you from a policy perspective
01:20:35
>> it is very hard to answer in an
01:20:37
uncertain future in an AI if you don't
01:20:40
know what what's going to happen with
01:20:41
the economy. I mean we have no idea how
01:20:43
much job loss there will be. We have we
01:20:45
are we are I think Dan says quite
01:20:47
rightly going through a transition where
01:20:49
the shape of the economy will change.
01:20:51
>> So do we do nothing through the
01:20:52
transition?
01:20:53
>> No.
01:20:53
>> No. We aggressively experiment with ways
01:20:57
to include more people in the economy.
01:20:59
Bernie Sanders idea is an experiment.
01:21:02
What's the worst that can happen? Like
01:21:04
just think about it. What is the worst
01:21:06
that can happen?
01:21:07
>> The worst would be is that you give
01:21:08
government more money and they leverage
01:21:10
more debt. And as soon as the government
01:21:12
has
01:21:13
>> the the economy of the United States
01:21:15
does not need assets to leverage more
01:21:16
debt. We just created we just created
01:21:20
we we didn't need that is not true. That
01:21:22
is just not true. We have $37 trillion
01:21:24
of debt all of which was basically given
01:21:27
away in wars or tax cuts for rich
01:21:29
people. So
01:21:30
>> but they they can print more money and
01:21:33
>> absolutely but these two things they are
01:21:34
not connected. But the truth is that the
01:21:37
worst that can happen by running that
01:21:39
experiment is that there will be a few
01:21:41
dozen guys who are worth a hundred
01:21:44
billion and not 200 billion. Like that
01:21:47
is the worst that that can do. Is that
01:21:50
going to be the end all beall? Will it
01:21:52
work perfectly? I have no idea. But what
01:21:54
I do know is that democracies need to
01:21:56
move aggressively to try to make sure
01:21:59
that these technological innovations
01:22:02
benefit the society broadly, not just a
01:22:04
few people narrowly.
01:22:05
>> If I think about the UK, if you
01:22:07
implemented something like that here,
01:22:09
would would people leave?
01:22:13
So if you implemented, say we had an AI
01:22:14
company here and you said, well, the UK
01:22:16
is going to own half of it. Would that
01:22:17
company just
01:22:18
>> restructure somewhere else because it's
01:22:19
digital? They they probably would.
01:22:21
>> But you're now you're back to this old
01:22:22
problem.
01:22:23
We've even seen this with the data
01:22:24
centers. People are going I read a
01:22:26
report that said the reason Open AI
01:22:28
didn't open their data center in the UK,
01:22:29
which they said they were going to, is
01:22:31
because energy costs four times more
01:22:32
here.
01:22:33
>> So they said we're not going to go
01:22:34
somewhere where it's cheap.
01:22:35
>> Yeah.
01:22:36
>> And would that not be the case here
01:22:37
where you'd get the sort of brain drain
01:22:39
where
01:22:39
>> and the risk that you run with this
01:22:41
Bernie Sanders model is that we leverage
01:22:44
the the government's balance sheet or
01:22:46
non-balance sheet to take out huge debt
01:22:49
in the name of our kids and our
01:22:50
grandkids that they have to repay. They
01:22:52
buy up all these intangible assets and
01:22:55
then they're left holding those assets
01:22:58
that may or may not perform and may and
01:23:00
will have debt regardless. And then the
01:23:03
super clever little anthropic guys say,
01:23:06
"Oh, actually we're just going to
01:23:07
restructure to Vanuatu now. Leave you
01:23:09
guys holding all of that toxic debt and
01:23:11
we're going to go run this from
01:23:12
somewhere else." That could happen. The
01:23:14
other thing that could happen is if
01:23:16
let's say OpenAI as one example are
01:23:18
making $100 profit at the moment $100
01:23:21
profit at the moment and Bernie Sanders
01:23:22
says we want $50 of that profit. China
01:23:27
are going to have an additional
01:23:29
theoretically an additional $50 to
01:23:30
invest in their frontier models in
01:23:32
getting ahead.
01:23:33
>> Bern isn't saying I I'll take $50 your
01:23:35
50% of your profit.
01:23:37
>> What is he saying? I'll take 50% of your
01:23:39
stock
01:23:39
>> which means that then the US would have
01:23:41
a equal voting.
01:23:43
>> Yeah.
01:23:44
>> Well, then you're going to get gridlock
01:23:46
in terms of voting, right? So, if the US
01:23:48
own 50% of the company and Sam Alman,
01:23:50
let's say, owns 50%. They're going to
01:23:52
have to vote on decisions.
01:23:54
>> Well, you could put some directors from
01:23:55
the from the public on that board.
01:23:57
>> And what happens when to a company when
01:23:59
you have the government on the on the
01:24:01
voting board? The thing I mean you
01:24:03
effectively have this in lots of
01:24:05
countries where labor has a seat at the
01:24:07
table,
01:24:07
>> right?
01:24:08
>> With one of your companies, if half of
01:24:10
your board were a government,
01:24:11
>> do you think you'd be able to be as
01:24:12
innovative, move as fast? I mean, we
01:24:14
talked about the bureaucracy of of the
01:24:15
government.
01:24:15
>> Yeah. I I'm not suggesting that half the
01:24:18
should be on the government.
01:24:19
>> Yeah. Mind you, that's what China has as
01:24:20
well. China has got essentially the the
01:24:22
CCP on the board of all of those
01:24:24
companies as well.
01:24:25
>> And they work and they move pretty fast.
01:24:27
>> There slightly different government,
01:24:28
isn't it?
01:24:28
>> Yeah, it is. And there's different
01:24:30
levels of competence and and meritocracy
01:24:32
hierarchy. I I I worry about all of
01:24:35
these solutions that empower government
01:24:36
because I don't trust government. My
01:24:38
entire life has been one thing after the
01:24:40
next made worse by government. Right.
01:24:41
That's that's my reality. Born in 81
01:24:44
1981. I've never had a good experience
01:24:46
with government.
01:24:46
>> Okay. But dude,
01:24:49
you you grew up in Australia and you
01:24:52
live in the UK. If you hate government
01:24:55
so much, move to the Congo.
01:24:58
>> Seriously? Yeah,
01:24:59
>> you are look I mean it is just no one
01:25:02
likes to be constrained. Everyone wants
01:25:05
other people held to a high standard and
01:25:08
it it just
01:25:10
seriously there is no libertarian
01:25:11
paradise in the world
01:25:14
>> where nobody follows any rules, nobody
01:25:16
pays any taxes and everybody lives like
01:25:17
a king. If you hate government there are
01:25:20
plenty there are 220 countries in the
01:25:22
world. 150 of them effectively have no
01:25:25
government. Why do you not move your
01:25:28
base of operations to those places?
01:25:31
Because
01:25:32
you would instantly be somebody's,
01:25:35
you know, munch.
01:25:36
>> I'm not I'm not an anarch I'm not an
01:25:38
anarchist. When a government doesn't
01:25:41
fire incompetent people,
01:25:42
>> okay, but everybody agrees the previous
01:25:45
governments.
01:25:46
>> Everybody agrees democracy is the worst
01:25:48
econ is the worst except all the others,
01:25:51
right? Like of course
01:25:54
it is easy to to to point to these
01:25:58
things and say they're incompetent, but
01:26:01
it is it is just not honest to say that
01:26:04
government doesn't improve our lives.
01:26:07
There is literally no example on planet
01:26:09
earth of a high functioning society
01:26:12
without big government.
01:26:13
>> I'm not saying well without big
01:26:15
government. That's not true.
01:26:17
>> Give me an example.
01:26:18
>> Singapore. Singapore is insanely big
01:26:20
government.
01:26:21
>> 22% of GDP.
01:26:22
>> Okay. But they are involved in every
01:26:26
element of people's lives.
01:26:27
>> High competence. They fire incompetent
01:26:29
people.
01:26:30
>> And and again, we're in violent
01:26:33
agreement that we should have
01:26:34
governments that do that.
01:26:36
>> You should work hard on the politics in
01:26:39
the UK to to bring in reforms that would
01:26:43
increase the velocity of competence.
01:26:45
Now, that's the answer. That is the
01:26:47
answer is to is to work hard, build a
01:26:50
government that is as high functioning
01:26:52
as they can be. But here's the thing and
01:26:54
I think you would agree. Look, look,
01:26:56
Microsoft I big companies are equally
01:26:59
incompetent. Microsoft bought my company
01:27:01
Aquana for $6.4 billion. This is a
01:27:04
company that was growing at 40%
01:27:05
year-over-year. It's been so long. 30
01:27:07
40% year-over-year. 750 million in
01:27:10
sales. 200 million at IBA or something
01:27:12
like that. 3,000 4,000 of the best
01:27:15
internet advertising people on planet
01:27:17
Earth and in one year it was gone.
01:27:20
>> Wow. Yeah.
01:27:21
>> Gone. And they wrote the entire $6
01:27:24
billion off five years later.
01:27:26
Incompetence lives everywhere. I
01:27:30
>> And and I I I just don't think it is
01:27:33
realistic to say, "Oh, pucks and them,
01:27:35
you know, they suck." I I just Dan,
01:27:39
there is no place on earth without
01:27:42
government cocreating prosperity for
01:27:44
>> for sure. Here's where I put my hope in
01:27:46
this post AI world. I want to stack the
01:27:49
favor I want to stack the economy in the
01:27:50
favor of the small family business and
01:27:52
the small business.
01:27:53
>> I'm 100% with you. Yeah, I agree. I
01:27:56
agree. The question is how do we get
01:27:58
there? And you and I are completely
01:28:00
aligned in some ways. We need to
01:28:02
aggressively tilt the balance of power
01:28:06
in the economy from the biggest from the
01:28:08
biggest most exploitive companies to
01:28:11
small and medium-sized businesses.
01:28:12
>> So I see big government and big
01:28:14
corporate
01:28:16
uh sucking the life out of little people
01:28:19
and little businesses
01:28:20
>> and I think you are ab no doubt correct
01:28:23
in some cases but the only thing in
01:28:26
human societies that has the power to
01:28:28
confront big business is big government.
01:28:30
>> Right. There's ne in the history of the
01:28:32
world, there has never been another
01:28:34
force that w that had the power to to
01:28:37
address this problem. And the reason I
01:28:40
care so much about this economic
01:28:41
paradigm
01:28:42
>> is that all of the problems you were
01:28:45
describing
01:28:45
>> Yeah.
01:28:46
>> are a consequence of an economic
01:28:49
paradigm that was designed to create
01:28:51
those problems. That's why we are in the
01:28:54
box we're in is because neoliberalism
01:28:57
literally said the bigger is better and
01:29:00
that we should afford no protection to
01:29:02
small businesses that we should actively
01:29:04
advantage the largest players that that
01:29:08
free trade is good for everyone. all of
01:29:10
these things that weren't true and dis
01:29:14
and ended up advantaging in this room me
01:29:18
effectively and you know a few thousand
01:29:21
people from around the world and
01:29:23
disadvantaged everyone else. And I think
01:29:26
the starting point for for change is is
01:29:30
addressing the fact that we just
01:29:32
understood economic cause and effect in
01:29:36
inadequately that the things that we
01:29:38
thought would lead to growth led to
01:29:41
concentration.
01:29:42
Right? And the things that we thought
01:29:44
were bad for the economy, in many cases,
01:29:47
those were good for the economy. Because
01:29:48
look, again, you know the UK so much
01:29:51
better than me, and I I hate to argue
01:29:52
with you about it, but the truth is that
01:29:55
you cannot sustain a capitalist system
01:29:58
unless most people are paid enough to
01:30:00
buy the stuff that that the system
01:30:02
produces. And there has to be a balance.
01:30:05
And there and again in the history of
01:30:07
the world there is no example of a
01:30:10
thriving economy that did not impose
01:30:13
those standards or or create through
01:30:16
some mechanism the counterveiling power
01:30:18
that enabled the the the the owners of
01:30:21
capital and everybody else to work
01:30:23
together to benefit everyone in the long
01:30:25
term.
01:30:26
>> You are you and I are in so much
01:30:28
agreement on on most on most of
01:30:30
>> it. Like an inch apart, right? And what
01:30:32
is that inch? So, I've seen Nick's
01:30:34
policies implemented and I don't feel
01:30:36
it's enough. And the reason I don't feel
01:30:37
it's enough is I think people are more
01:30:39
than consumers. They're more than
01:30:40
wallets.
01:30:41
>> Okay. You've only heard me talk about
01:30:42
the minimum wage and something else. You
01:30:44
haven't seen all of the policies. So,
01:30:45
>> but the missing piece for me is
01:30:48
ownership. When people had houses, they
01:30:51
felt really good about communities. When
01:30:54
people had small businesses that they
01:30:56
owned, they felt really good about their
01:30:57
communities. And when people own some
01:31:00
shares in the overall economy of the
01:31:02
fastest growing companies in the
01:31:04
economy, then they feel like they're
01:31:05
participating. So for me, the
01:31:06
non-negotiables of fixing this problem
01:31:09
is that people can easily own a house,
01:31:11
own a business, and own shares in the
01:31:12
fastest growing economy.
01:31:14
>> Yes. Yes. Yes. And how do we get there?
01:31:17
>> Yes. Yes. Yes. I totally agree. And I
01:31:19
think I I just think that Dan and I have
01:31:21
a slightly different view on the path.
01:31:24
>> I think capitalism is ownership. It's
01:31:26
ownership. That's what capitalism is.
01:31:27
Otherwise, you if you don't own
01:31:29
anything, you're not a capitalist. If we
01:31:32
your
01:31:32
>> grew on the path, but the the sorry, you
01:31:34
agree on the outcome, but the path.
01:31:36
>> Yes. But how did Nick get rich? Like
01:31:38
Nick started companies. He owned he
01:31:41
owned a family business. He leveraged
01:31:43
the family business into an investment
01:31:45
into Amazon.
01:31:47
>> It's it's own but it's ownership.
01:31:49
Ownership. Ownership. And did a lot with
01:31:50
it. Okay. Right.
01:31:51
>> Fair. But but I'm saying
01:31:52
>> let's be let's be fair. But how is that
01:31:54
applicable? You're saying other people
01:31:55
should do what Nick did.
01:31:56
>> Yeah. But it's hard to get born into a
01:31:58
family that owns a small business. And
01:32:00
>> well, if there's more people who own
01:32:02
small businesses than there are more
01:32:04
than there it is easier, right? I I just
01:32:06
want I I do want more people.
01:32:08
>> What do you mean by this?
01:32:08
>> Well, it it's all about how how you get
01:32:10
there, right?
01:32:11
>> But you overlook the fact being born on
01:32:13
third base. We should aim for more
01:32:15
people to be born on third base. If more
01:32:17
people
01:32:17
>> the third base is coming from a family
01:32:20
>> that owns a small business
01:32:21
>> with ex or whose parents earn enough
01:32:25
income to enable all of that, right? And
01:32:27
and and and look, not everybody who is
01:32:30
affluent, in fact, a a tiny minority of
01:32:33
people who are affluent uh uh uh are are
01:32:36
small business owners, right? that they
01:32:39
are mostly doctors and lawyers and
01:32:41
professionals of a variety of kinds who
01:32:43
work in med in big companies in middle
01:32:46
management roles and they
01:32:48
>> I'm not saying everyone should be a
01:32:49
small business.
01:32:49
>> Yeah. So anyway, I just think that I I
01:32:52
think the high order bit here, I mean,
01:32:54
for me, and and this may sound like too
01:32:57
squishy for you, is that is that
01:33:01
societies have both the right and the
01:33:03
responsibility to organize their
01:33:05
economies in ways that benefit everyone.
01:33:09
>> Is socialism the answer?
01:33:10
>> No. Socialism is most definitely not the
01:33:13
answer because socialism, again, we we
01:33:16
need to operationally define that term.
01:33:18
Yeah. If socialism means, look it up in
01:33:21
the dictionary, the state ownership of
01:33:22
the means of production, that is a
01:33:25
catastrophe, right? And it's a
01:33:27
catastrophe because all socialism can do
01:33:31
is split up existing prosperity in a
01:33:35
fairer way. It can do that. The problem
01:33:38
is is that socialism does not know how
01:33:41
to create more prosperity. Okay? So for
01:33:44
one minute you can make everybody better
01:33:46
off but 10 years later everyone is poor
01:33:50
because once because this is the power
01:33:52
of markets is what markets do as
01:33:55
evolutionary systems is they generate
01:33:57
increasing prosperity. They that that's
01:34:00
what solutions to human problems is,
01:34:02
right? Going from aspirin to antibiotics
01:34:05
is economic progress, right? And the
01:34:08
beauty of markets is that they are
01:34:10
evolutionary systems where every
01:34:12
business effectively is an organism
01:34:15
competing to fill a niche which is the
01:34:18
perfect product for whatever market
01:34:21
segment they're creating. You are you're
01:34:23
a canonical example of this, right? What
01:34:25
you have done here and thank goodness
01:34:27
for it, right? Because in a world where
01:34:29
there wasn't capitalism, there's no way
01:34:32
you you you have effectively
01:34:34
independently created what was a
01:34:36
television network. It's miraculous.
01:34:39
Like you have more reach than MSNBC,
01:34:41
dude. That is the power of markets, but
01:34:44
you know, they have to be harnessed to
01:34:47
benefit people broadly. This does not
01:34:49
mean that the profit mo motive shouldn't
01:34:51
exist, but and and
01:34:53
>> how though this is what I'm trying to
01:34:54
get to. And there sounds a little bit
01:34:56
like there's this middle ground we're
01:34:57
like playing with where socialism on one
01:34:59
end is okay you know short-term whatever
01:35:02
you said then on the other end you've
01:35:03
got this like extreme capitalist
01:35:05
approach and I was looking
01:35:06
>> yeah those are the less a fair
01:35:07
capitalism right and this socialist
01:35:10
status control both of those things are
01:35:13
terrible ideas
01:35:14
>> am I right
01:35:14
>> we want something in the middle
01:35:15
>> on on the left side then on the
01:35:17
socialism side you get lower growth in
01:35:19
your economy over the long term
01:35:20
>> correct
01:35:21
>> okay and then in a capitalist economy
01:35:23
you might have higher growth growth but
01:35:25
then you have more inequalities.
01:35:26
>> Correct. And the sweet spot and this is
01:35:29
this is the one of the most important
01:35:32
this is the important matter one of the
01:35:34
most important points I would like to
01:35:35
make is that all of the evidence
01:35:37
suggests that when you come to the
01:35:40
middle and you have a market economy
01:35:42
that is actually actively managed to
01:35:46
include people that is the growth sweet
01:35:49
spot. You have more growth. So you have
01:35:52
more growth.
01:35:53
>> Absolutely. GDP growth rates in the
01:35:55
United States were four four and a half%
01:35:57
for decades 40 50s 60s and then as soon
01:36:01
as the neoliberals took over in 1975 GDP
01:36:04
growth rates fell first to 3% and now to
01:36:07
2%
01:36:07
>> when they did what?
01:36:09
>> Cut taxes for rich people deregulated
01:36:11
powerful people and suppressed wages for
01:36:13
everybody else. So, the most important
01:36:16
socioeconomic fact, as I've said many
01:36:18
times before, in the United States is
01:36:19
that the median full-time worker earns
01:36:21
about $60,000 a year today, if they had
01:36:24
maintained their same share of GDP since
01:36:27
1975, instead of earning 60, they would
01:36:29
earn $120,000 a year.
01:36:32
>> So, there's you're saying there's no
01:36:33
trade-off in the middle because there's
01:36:34
trade-offs on both ends, right? We just
01:36:36
described the trade-offs. You're saying
01:36:37
that in the middle there's this
01:36:38
>> that's the sweet spot where there's
01:36:40
>> where there's maximum amounts of growth,
01:36:42
maximum amounts of participation,
01:36:45
maximum amounts of political stability.
01:36:48
This is what Darren Oasamuglu and James
01:36:50
Robinson call the narrow corridor. This
01:36:53
perfect balance between less afair
01:36:55
capitalism and socialism. I mean
01:36:57
socialism is stupid because because it
01:37:00
kills markets. But this impulse to more
01:37:03
fairly share, let's call that where
01:37:05
socialism comes from. This impulse to
01:37:08
have a society which is more
01:37:09
egalitarian. But what all the data
01:37:12
suggests is that when you build a market
01:37:15
economy that basically tries to make
01:37:19
sure that everyone participates, where
01:37:21
workers get a fair share of the wages,
01:37:23
where as the company as the economy
01:37:26
grows, as it did for years, and you've
01:37:28
got another you have a you you have a
01:37:30
you have a a great graph in here.
01:37:33
So for decades
01:37:37
as productivity grew
01:37:39
everybody benefited and then in the 70s
01:37:42
it decoupled
01:37:43
and as soon as it decoupled GDP growth
01:37:46
rates fell right if we had and and all
01:37:50
of this that all of this was a
01:37:53
consequence of policy of policy so
01:37:56
here's another thing the new economics
01:37:58
teaches is that there's this idea that a
01:38:01
middle class a thriving middle class is
01:38:03
the consequence of economic growth that
01:38:06
if we just let the economy grow we'll
01:38:08
get this great middle class and that is
01:38:10
because economists assume the e the
01:38:12
economy is something called ergotic now
01:38:14
erotic means let me show you the
01:38:17
difference between two games one is
01:38:18
erotic one is non-orgotic rock paper
01:38:21
scissors is an ergotic game and what
01:38:24
that means is the outcome of the next
01:38:26
game has nothing to do with the game
01:38:28
before yeah right
01:38:29
>> monopoly is a non-urgotic game. And in
01:38:33
Monopoly, no matter how much how many
01:38:36
times you go to Monopoly school,
01:38:39
if you play a game of Monopoly long
01:38:40
enough, one person will own everything
01:38:42
and everybody else will have nothing.
01:38:44
And that is what a market economy is. It
01:38:47
is characterized by luck, path
01:38:50
dependence, and compounding.
01:38:52
>> The past.
01:38:53
>> The p well, it's the past, right? Where
01:38:55
you start.
01:38:56
>> Yeah.
01:38:56
>> Right. Some of us started on third base.
01:38:59
Some of us like you, as I recall,
01:39:01
started on actually first base or home
01:39:04
plate or something like that.
01:39:05
>> Well, I think yeah, probably probably
01:39:06
second base.
01:39:07
>> Okay, maybe second base, but whatever.
01:39:09
But we can
01:39:09
>> I have parents that love me electricity
01:39:10
at your house.
01:39:11
>> Okay, fair point, right? And you're very
01:39:13
capable and good-looking and all the
01:39:15
rest of it, right? It could it No, I
01:39:17
mean, just if we're just being honest,
01:39:19
right? We're just being honest. You had
01:39:20
some natural advantages,
01:39:22
>> but you know, in Monopoly, you land on
01:39:24
Park Place the first roll, you're
01:39:26
rolling. You get four good roles in
01:39:28
Monopoly, you're going to win the game,
01:39:29
right? And compounding. The better you
01:39:32
do, the better you do. And the thing
01:39:34
about in a in an honoric system is that
01:39:37
both advantages and disadvantages
01:39:39
compound. Surely you know people in your
01:39:41
life who have had a couple of things of
01:39:43
bad luck, right? And then they spiral
01:39:45
into oblivion, right? And so what that
01:39:48
means is that a a middle class and thus
01:39:52
a high functioning society with social
01:39:55
cohesion is always always a a deliberate
01:39:59
construction. It is always created by
01:40:02
policy.
01:40:03
Always. And all of these things that we
01:40:07
are pushing back against him and his
01:40:10
way, me and my way are a consequence of
01:40:12
basically an economic theory that said
01:40:14
to policymakers, do it that way. And it
01:40:17
was a mistake. And we should recognize
01:40:20
that mistake and try to heal these
01:40:22
mistakes, which we can. We can have a
01:40:25
great society. We can have an ownership
01:40:27
society. We can have anything we want.
01:40:28
We just have to decide to do it and not
01:40:31
let
01:40:33
a small group of incredibly rich people
01:40:35
dictate the terms of the economy. This
01:40:38
is within our grasp.
01:40:39
>> What are your thoughts then?
01:40:40
>> I agree in principle with all of that,
01:40:42
especially the last bit. A small group
01:40:43
of very very powerful people dictating
01:40:45
the economy, meeting up in Davos, coming
01:40:47
up with our how our lives should live.
01:40:50
Um there's there's more to the story
01:40:52
here. In the early '7s, they decoupled
01:40:56
uh the the dollar from uh gold and they
01:40:58
created the fiat system, which meant
01:41:00
they could print money that inflated
01:41:02
assets that financialized it
01:41:04
financialized assets, including the
01:41:06
family home, which meant that as soon as
01:41:08
we could print money, we could inflate
01:41:10
the value of family homes and make it
01:41:11
out of reach of most people.
01:41:12
>> Well, and then finance took over and
01:41:14
became 20% of the economy, the rest of
01:41:16
us.
01:41:16
>> Yeah. We ended up with these two massive
01:41:19
institutions which is the technology
01:41:20
industrial complex and the finance
01:41:22
industrial complex and those two
01:41:25
institutions have driven a wedge in
01:41:27
society. My only difference with Nick
01:41:30
and it's a small difference is that I
01:41:32
don't believe raising the floor is going
01:41:35
to be enough. I I really do
01:41:37
>> I I I didn't say it's enough. I I it's
01:41:39
table stakes.
01:41:40
>> Yeah. it and and and I my experience
01:41:42
with that it's a minimum
01:41:44
>> is because it's because I've seen the
01:41:45
minimum and and the pitchforks are out
01:41:47
>> here in the UK where we have that
01:41:49
minimum. My my worry here is that where
01:41:52
we are the technology economy and the
01:41:55
finance economy is racing as if it's in
01:41:58
a car and then all of the workers who
01:42:00
are selling time for money, labor for
01:42:02
money, it's as if they're running and
01:42:04
we're saying ah you guys just need
01:42:06
better sho comfier shoes. If we give you
01:42:08
a pair of Nikes will you guys be happy?
01:42:09
And it's like this is not going to close
01:42:11
that gap. No. Um we we have to
01:42:14
acknowledge that technology and finance
01:42:16
are the two like big funds and big tech
01:42:19
are the comp are basically hollowing out
01:42:21
the middle class. And if we don't
01:42:23
acknowledge who the real bad guys are,
01:42:25
when I say bad guys, I'm not sure
01:42:26
they're real bad guys, but essentially
01:42:28
systemically they're systemically
01:42:30
they're the bad guys. We need to
01:42:32
essentially say, "Hey, big finance, big
01:42:33
tech, you can't financialize our houses.
01:42:36
That's for us to live in and for us to
01:42:37
own." Um, and you also can't just
01:42:40
eradicate all of our little to small
01:42:41
businesses. We we need to tip the scales
01:42:44
back in the favor of those small
01:42:45
businesses because little towns, you go
01:42:48
into any town in England, little like
01:42:50
little towns in England, the thriving
01:42:52
towns that everyone wants to live in,
01:42:53
they have lots of small businesses. They
01:42:55
have a butcher, baker, candlestick maker
01:42:57
type, like stuff is going on.
01:42:58
>> By the way, the best high street in
01:43:00
London is the one I live on, Maran High.
01:43:02
Maran High Street. So, you agree?
01:43:04
>> 100%.
01:43:05
>> Yeah. I've got 60 seconds and I'm going
01:43:08
to show you how much I can get done
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because of our sponsor called Whisper
01:43:12
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01:44:12
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01:44:13
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01:44:16
connection. And after sitting here for 2
01:44:17
three hours with a guest, I feel a deep
01:44:20
sense of connection to them. And as they
01:44:22
leave, what I get them to do is to write
01:44:24
a question in the diary of a CEO. We've
01:44:28
taken all of the questions from the
01:44:29
diary of a CEO. We have put the question
01:44:33
here on this card with the name of the
01:44:35
person that wrote it. So you can sit at
01:44:37
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01:45:16
>> One thing I find interesting is you're
01:45:17
saying that there's this sweet spot in
01:45:18
the middle.
01:45:19
>> Yes.
01:45:20
>> Where you you still get the the upside.
01:45:22
>> You get dynamism. You think there's a
01:45:23
sweet spot in the middle
01:45:24
>> and decency?
01:45:25
>> It's a very narrow sweet spot and it's
01:45:27
very hard to achieve because Germany has
01:45:31
really tried so hard and they've like
01:45:34
their economy is collapsing. Their
01:45:36
economy is going so badly at the moment.
01:45:38
Um, and they've tried everything.
01:45:40
They've got workers have to be on the
01:45:42
board for example of every company
01:45:44
you've got to have a worker on the
01:45:45
board. So they're like doing as much as
01:45:47
they can to do inclusion and the German
01:45:49
economy.
01:45:49
>> Okay. So where is it worked? Okay, but
01:45:51
here here's the thing is it's it is
01:45:53
simply not fair to say the German
01:45:56
economy is collapsing. Like have you
01:45:59
been to Germany?
01:46:01
>> Like come on. Like have you been to
01:46:04
Stockholm? Like these places are
01:46:06
incredibly functioning.
01:46:08
>> Yeah, there's definitely a Ford momentum
01:46:10
but the German car industry is getting
01:46:12
hollowed out right now. China, right?
01:46:14
China's doing that. Okay. But just
01:46:16
because workers are on the board of
01:46:19
German companies
01:46:21
and German people are unhappy the you
01:46:24
you can't necessarily connect these
01:46:26
things.
01:46:27
>> I just want to acknowledge though that
01:46:29
like there are places like Dubai which
01:46:31
are very close to lay fair capitalism
01:46:33
with a sovereign wealth fund. And just
01:46:35
just hold if you talk to someone who
01:46:38
lives in Dubai, they freaking love
01:46:40
Dubai. like they they are so they're the
01:46:42
happiest people
01:46:44
like and they talk they talk
01:46:46
millionaires entrepreneurial people.
01:46:48
>> Yeah. The rich people not the not the
01:46:50
poor brown people who are
01:46:52
>> well I mean
01:46:52
>> because they bust Indians and don't
01:46:54
>> well they they Yes. And also when I talk
01:46:57
to a lot of the Uber drivers there and I
01:46:58
talk to people who work in cafes there
01:47:00
and all that sort. They're all quite pro
01:47:01
Dubai as well.
01:47:02
>> But that's because their other options
01:47:04
are horrific.
01:47:05
>> Yeah.
01:47:05
>> That it's probably more extreme
01:47:07
inequality, isn't it?
01:47:08
>> It it's more extreme inequality. quality
01:47:11
of it because the place is growing until
01:47:13
recently obviously with right but
01:47:15
because the place is growing it feels
01:47:16
like there's a rising tide for everybody
01:47:18
there's something about economic growth
01:47:20
that makes people very very happy and
01:47:22
there's something about a lack of
01:47:23
economic growth that makes people
01:47:24
miserable here in the UK for example
01:47:26
>> okay but but just again Dubai is a place
01:47:30
the UAE has been powered by the most
01:47:34
extraordinary gusher of free cash
01:47:37
probably the planet has ever seen I mean
01:47:40
You can look up on your iPad there the
01:47:43
like the tailwind that economy gets from
01:47:47
the unlimited resources.
01:47:49
>> I wouldn't say that's why people love to
01:47:50
buy it. They love it because of the
01:47:52
entrepreneurial vibe. Like who loves it?
01:47:54
>> Like ambitious people.
01:47:56
>> Yeah. So this is the rich excitement.
01:47:58
Well people no I see young people who
01:48:01
want to have a crack
01:48:03
>> and they're because they're they're rich
01:48:04
relative to the people doing the work
01:48:06
the labor. Well, what they're looking
01:48:07
for is a place where their work will be
01:48:10
rewarded. Let's imagine the UK where
01:48:13
your ability to get onto capitalism,
01:48:15
your first million or your first 2
01:48:16
million is very easily low taxed in
01:48:19
order to get things going for you
01:48:21
economically. I I just want to see a
01:48:23
situation where ambitious. Yeah. Like
01:48:26
your ambitious people like what I hate
01:48:28
is that I see these young people who are
01:48:30
really super smart. I wish they were
01:48:32
here building and they're like you can't
01:48:34
succeed in the UK. They'll just tax it
01:48:35
off you as soon as you earn anything.
01:48:37
They take it.
01:48:38
>> What if you're not ambitious?
01:48:38
>> And they leave.
01:48:39
>> I think you're benefited by a lot of the
01:48:41
ambitious people. So when when you get
01:48:43
one in if you get one in 10 people who
01:48:46
are entrepreneurial or one in 100 people
01:48:47
who are entrepreneurial, they're
01:48:48
creating optionality. They're creating
01:48:50
companies.
01:48:50
>> The US is this the US is sort of set up,
01:48:53
you know, the American dream. This is
01:48:55
more of a US approach, isn't it?
01:48:57
>> And what we have there is higher
01:48:58
inequality.
01:48:59
>> I'll give you two to to one extreme. the
01:49:01
US, you hit the top rate of income tax
01:49:03
when you hit $700,000.
01:49:06
In the UK, it's $100,000 and and it
01:49:08
immediately goes to 60% tax, 62% tax,
01:49:12
and then it drops to 45% after that.
01:49:15
Like, but there's this kind of like
01:49:16
>> Does it really?
01:49:17
>> Yeah. It's this it's this it's this
01:49:18
weird. No, it's this insane thing where
01:49:22
you basically pay 20% 40% 60% 45% and
01:49:26
it's this kind of weird.
01:49:28
>> But to the point,
01:49:29
>> you should probably fix that.
01:49:30
preferred the US the US approach sounds
01:49:32
more like what you're saying
01:49:33
>> leaving to the US like a lot of Brits
01:49:34
are actually going to
01:49:35
>> and the US has an inequality has higher
01:49:37
inequality
01:49:38
>> which means it's probably more likely
01:49:40
that the pitchforks will come out
01:49:41
>> well for an ambitious person they don't
01:49:43
care about inequality right inequality
01:49:45
is the opportunity to get ahead
01:49:47
>> yeah they might not but from a social
01:49:49
perspective the pitchforks are probably
01:49:50
going to come out sooner in the US
01:49:51
because of that inequality than in
01:49:54
somewhere else
01:49:56
>> we're saying they seem to be coming out
01:49:57
here in a big way like here out here,
01:50:00
but they're also coming out in the
01:50:01
United States.
01:50:01
>> Look at look at Zack Palanski
01:50:04
uh is is gaining a huge political
01:50:07
movement.
01:50:07
>> Zoran Mandani in the UK, sorry, in New
01:50:10
York is we're seeing a rise of socialism
01:50:13
in the United States.
01:50:13
>> Okay, but Zoran Mandami calls himself a
01:50:16
socialist because he does not have
01:50:18
another word for what he is doing.
01:50:20
>> He has said seize the means of
01:50:22
production. He said it and he said take
01:50:24
houses off landlords like he is a he's a
01:50:27
card carrying socialist. Uh, but he
01:50:29
hasn't done any really socialist things.
01:50:31
I I just think that there there's a bit
01:50:33
of a confusion. But asking wealthy
01:50:35
people to pay a little bit more tax is
01:50:37
not socialism. Uh, standing up grocery
01:50:41
stores in food deserts because no
01:50:43
grocery store will will will do it
01:50:46
because it's not profitable enough is
01:50:49
not socialism. This is the government
01:50:51
provisioning benefits to citizens,
01:50:55
fixing potholes, making bike ramps,
01:50:58
whatever the stuff he's doing. These are
01:51:00
not socialist things. What they are is
01:51:02
not strictly neoliberal things, which is
01:51:05
just like letting rich people run rough
01:51:07
shod over everybody else. The thing that
01:51:09
I see with say a food desert and a a
01:51:12
store is that the tax system is so
01:51:15
punitive that a small opportunity like
01:51:18
setting up a grocery store with all the
01:51:20
taxes and all the regulations and all
01:51:22
the stuff the government puts on you,
01:51:23
it's just not worth doing it. There are
01:51:25
better opportunities out there. Like I'm
01:51:27
not talking about remove it for rich
01:51:28
people. I'm saying for startups, for
01:51:30
small businesses, for businesses that
01:51:31
employ less than 200 people. If you
01:51:33
basically create very positive
01:51:36
experience
01:51:37
for small businesses to get started,
01:51:39
they will set up a grocery store in a in
01:51:41
a bad neighborhood because they go,
01:51:43
"Yeah, you know what? I can figure out
01:51:45
how it works in this."
01:51:46
>> Do do you think there's a chance that we
01:51:47
have a a bit of a bias as entrepreneurs?
01:51:50
Everyone at this table is an
01:51:51
entrepreneur and for whatever reason,
01:51:53
and I think a lot of mine might be some
01:51:55
like I don't know, trauma or whatever. I
01:51:56
had a bias towards setting up a business
01:51:59
and taking that risk. Whereas like my
01:52:00
other three siblings, they didn't do
01:52:03
that. And I don't know what I did to
01:52:04
have that bias within me. Like if you
01:52:07
really think about it, I it's it was
01:52:08
probably something my parents didn't
01:52:10
intend to do, which meant that at 18
01:52:12
when my four three siblings went to
01:52:13
university and sort of followed that
01:52:15
more one could say safer path. Well,
01:52:17
yeah, safer path. I dropped out.
01:52:19
>> How angry were your parents when you
01:52:20
dropped out?
01:52:20
>> They didn't speak to them. My mom was
01:52:22
Yeah, my mom's Nigerian as well, so she
01:52:24
didn't she left school when she was a
01:52:25
child. Didn't get an education. Can't
01:52:27
read. must have him in a tough
01:52:28
>> a tough certain understatement of what
01:52:32
happened but for whatever reason that's
01:52:34
the path that I took and I'm I I can
01:52:35
acknowledge that I'm in a bit of a
01:52:37
minority
01:52:38
>> and I think I sometimes consider like
01:52:41
maybe I don't realize that through
01:52:42
privilege or through some genetic
01:52:44
privilege or whatever I had this
01:52:45
particular orientation towards like
01:52:47
entrepreneurialism that maybe other
01:52:49
people don't always have and that means
01:52:52
that they start the grocery store
01:52:54
>> I get crucified in the comments not
01:52:55
everyone can be an entrepreneur Right.
01:52:57
I'm not saying everyone could be an
01:52:58
option. I've never said that.
01:53:00
>> But the grocery store analogy there is
01:53:02
someone would start that grocery store
01:53:03
if it was easier.
01:53:04
>> Well, not everybody would.
01:53:06
>> There's always a risk-to-reward ratio
01:53:07
and government brings in all sorts of
01:53:09
regulations and government only really
01:53:11
thinks about big businesses. If you talk
01:53:13
to anyone in government, small
01:53:14
businesses don't exist and they just
01:53:16
simply think why hasn't Tesco done it or
01:53:18
why hasn't like Walmart done it.
01:53:19
>> Yeah. I I've never started a business in
01:53:22
the UK, but I can tell you that in the
01:53:24
United States, the the barrier to
01:53:27
setting up a grocery store in a food
01:53:29
desert is not the regulation. It's
01:53:31
Safeway. It's the supply chain. It's the
01:53:35
It's all the stuff that you've
01:53:37
described, which makes it incredibly
01:53:39
difficult for for for somebody to
01:53:42
operate a single location grocery store
01:53:45
>> like your friend's.
01:53:47
>> Yeah. What do you do about that?
01:53:49
Uh, so what I would do is I would I
01:53:53
would and again in the United States we
01:53:56
used to have lots of laws that pointed
01:53:58
the economy toward small businesses. So
01:54:01
if I was in charge, I would impose a
01:54:03
much higher minimum wage, but I would do
01:54:04
it progressively. All the labor
01:54:06
standards, all the all of the
01:54:08
regulations would be imposed
01:54:10
progressively. And in terms of
01:54:11
regulation, I would make it far like for
01:54:14
a big company, there's a lot of regs,
01:54:16
right? You have to follow every rule to
01:54:18
the tea. For a small business,
01:54:21
>> you have a lot more flexibility. It's
01:54:23
impo because because we need the
01:54:25
standards,
01:54:26
>> but it turns out to be really hard as a
01:54:28
single proprietor even to even to read
01:54:31
the manual, right? To know what you're
01:54:33
supposed to do. So to me, it would all
01:54:35
be progressive. So it would be easy to
01:54:38
get capital, easy to start a business,
01:54:40
relatively unencumbered by by
01:54:42
regulation, although constrained to a
01:54:44
certain extent. There are terrible
01:54:46
things that small business people do,
01:54:48
too.
01:54:48
>> Wait, how'd you make it easier to get
01:54:49
capital?
01:54:50
>> Oh, you could have government programs
01:54:52
that were designed to help small
01:54:53
businesses get off the ground.
01:54:54
>> We have the British Bank that uh
01:54:57
underwrites
01:54:58
for the first 25,000 of loans. We used
01:55:00
to have the Small Business
01:55:02
Administration in the United States that
01:55:03
did a lot of that work.
01:55:04
>> Yeah. So, we we have a lending
01:55:05
institution here that is uh 75%
01:55:08
underwritten by government for £25,000
01:55:10
startup loan. Right. So, there is some
01:55:12
some schemes that can can work. I
01:55:14
started all my companies on a on a
01:55:15
credit card. The key thing is this.
01:55:17
There's a difference between
01:55:18
entrepreneurials and startups that are
01:55:20
intending to scale and just small
01:55:22
businesses that want to exist as a small
01:55:23
business. I'm really big on the idea
01:55:25
that we want to we want communities that
01:55:27
have lots of small businesses even if
01:55:28
they have no intention to scale and exit
01:55:30
and any of those sorts of things that
01:55:31
>> that old fashioned thing, right, where
01:55:33
you just had a grocery store.
01:55:34
>> Yeah. And and it's a good and
01:55:36
>> you weren't trying to create Walmart.
01:55:37
Yeah.
01:55:38
>> You just wanted to run a grocery store.
01:55:39
>> It's hard though, isn't it? cuz
01:55:41
>> you want to be CVS or you you want to
01:55:43
you want to be a network
01:55:44
>> but with a grocery store idea if you've
01:55:46
got mom and pop grocery store here then
01:55:47
next to it you have let's say I don't
01:55:49
know in the UK it's called spa which is
01:55:50
a grocery store 7-Eleven the problem is
01:55:52
if those are next to each other and one
01:55:54
has um economies of scale i.e 7-Eleven
01:55:58
can buy the cucumber
01:56:00
>> for uh 20% of the cost of the mom and
01:56:03
pop shop. Then if you're on that street,
01:56:05
the 7-Eleven is going to survive.
01:56:07
>> That's why that's why we tilt towards
01:56:09
the
01:56:09
>> United States used to have laws that
01:56:11
expressly prohibited that.
01:56:14
>> And why did they get rid of them?
01:56:15
>> Neoliberalism.
01:56:17
>> So they got rid of the restrictions on
01:56:19
>> Yeah. There there used to be express
01:56:20
laws to make sure that big companies
01:56:22
could not buy raw materials cheaper than
01:56:25
than small companies. Like when I was
01:56:27
young, when I was your age, if you
01:56:30
wanted to buy a competitor, you were
01:56:32
sweating bullets because you had that
01:56:36
had to be reviewed by a body and if they
01:56:39
thought that you were consolidating too
01:56:40
much, they would just say no. But if you
01:56:42
think I think about all my friends that
01:56:44
have opened retail stores through their
01:56:45
companies and they they only do that
01:56:47
when they get really big because their
01:56:49
ecom business is supporting it. So if
01:56:50
you think about I know the gym sharks,
01:56:52
the represents, honor actors. So you
01:56:54
can't
01:56:54
>> okay with respect to retail you are
01:56:56
largely correct it depends on what kind
01:56:57
of retail like you could have a gym you
01:56:59
can't e-commerce a gym or you know there
01:57:01
are all kinds of retail some of which is
01:57:04
somewhat immune from e-commerce and some
01:57:07
of which is getting destroyed by
01:57:08
e-commerce doesn't it doesn't matter if
01:57:11
we're talking about retail they were
01:57:12
regional manufacturing companies
01:57:14
regional everything sure
01:57:16
>> and it all went away and you have never
01:57:19
experienced a world in which that used
01:57:22
to exist like your your entire business
01:57:25
experience is this sort of neoliberal
01:57:27
world of giant companies.
01:57:28
>> True. And the world I grew up in, we
01:57:32
young,
01:57:33
>> right? But I I remember what it was like
01:57:36
>> to go to the video store and select
01:57:38
videos from the video store. I remember
01:57:40
what it was. Yeah. Like I remember going
01:57:42
to the CD store and listening to music
01:57:44
and talking to the retail employees when
01:57:47
I was growing up. The cool kids worked
01:57:49
at the CD store, the geeky kids worked
01:57:51
at the bookstore, and everybody worked
01:57:52
at the everyone else worked at the
01:57:54
grocery store. Yeah. And all of those
01:57:56
business models are gone. And this is
01:57:58
what I mean. We need to kind of tip back
01:57:59
towards small business experimentation
01:58:02
being protected and all of that. The
01:58:04
other thing, too, and I should should
01:58:06
raise this about minimum wage and giving
01:58:07
people more money.
01:58:09
>> The bottom half of taxpayers in the UK
01:58:11
pay 9.5% of all the uh income taxes. The
01:58:15
government could remove taxes off of 50%
01:58:18
of workers in one move and it would cost
01:58:21
33 billion and you just get rid of that
01:58:23
and then every single person in the
01:58:25
bottom half of income earners gets a 10%
01:58:27
pay rise to 15% payriseise, right?
01:58:30
>> I love it. So where do we get the 32
01:58:31
billion from?
01:58:32
>> Just just keep in mind their budget is
01:58:34
1.4 trillion.
01:58:35
>> I know. I know. I know. But we're going
01:58:36
to have if
01:58:37
>> trillion you're talking about this to
01:58:39
take 15 million people.
01:58:41
>> Yeah, I agree. I'm just saying where
01:58:42
does the money cuz I know what's going
01:58:43
to happen. Karma is saying they found
01:58:45
this 20 million billion 20 billion black
01:58:47
hole in the finances and they and that's
01:58:50
the reason why they're saying they've
01:58:51
had to cut back on pensions and these
01:58:53
kinds of things. So if we add another 30
01:58:54
billion to that where where do we where
01:58:57
do we get the money from?
01:58:58
>> You're talking about reduce the amount
01:59:00
of administrative burden to tax 15
01:59:03
million people and keep on top of the
01:59:05
tax on 15 million people. Just the sheer
01:59:08
volume of people who have to work at
01:59:09
HMRC
01:59:11
all of this insanity. No, but I'm saying
01:59:12
where does the money come from?
01:59:13
>> Yeah. So, out of 1.4 trillion, I'm
01:59:16
pretty sure we could find half of 1% 1%
01:59:18
of it or whatever to to get these number
01:59:21
of people out of tax. Um, I think we
01:59:23
could tax big corporations who are
01:59:25
taking the piss.
01:59:26
>> Uh, and I also think the economic
01:59:28
spending rounds of getting those people,
01:59:30
those poor, the poorer half of people
01:59:33
should not be paying tax. If you give
01:59:35
them more money, they'll spend more
01:59:36
money, right? They're not
01:59:37
>> Okay, I agree with you. So you're saying
01:59:39
tax big corporations more in the UK at
01:59:43
point of consumption.
01:59:45
>> Personally, I would make it a like very
01:59:47
similar to a broadcast license that it's
01:59:49
a fixed fee that's very hard to wiggle
01:59:50
out of.
01:59:50
>> So if I'm a let's say I'm an open AI,
01:59:54
>> yeah, you might have a broadcast license
01:59:56
to pay uh to to access this market.
01:59:59
>> So you're going to charge say you say
02:00:00
I'm going to charge Open AI 4 billion, 5
02:00:02
billion to access our market. Well, for
02:00:04
example, Facebook is very much
02:00:06
broadcasting videos and content all the
02:00:08
time. So is YouTube. So's Google, all
02:00:10
that sort of stuff. So you just simply
02:00:12
say, "Guys, the cost of doing business
02:00:14
in this country if you want access to
02:00:16
this market is a fixed broadcast license
02:00:18
fee of 500 million a year or whatever it
02:00:20
is." And you just say based on the
02:00:21
number of views that you guys get and
02:00:22
how much attention you suck out of our
02:00:24
economy, we just essentially tax the
02:00:26
attention. You're literally if people
02:00:28
are spending an hour a day on their
02:00:29
phone doom scrolling, we're that that is
02:00:32
a broadcast. you're broadcasting to our
02:00:34
people, so therefore we've got a
02:00:36
broadcast license. Um, so those are the
02:00:38
types of things that I would look at
02:00:39
because they're very hard to wiggle out
02:00:40
of.
02:00:41
>> Do you think then these these companies
02:00:43
like an open eye would would then as we
02:00:44
said earlier just increase the
02:00:46
subscription fee in this market and you
02:00:48
see this sometimes where in certain
02:00:49
countries something is cheaper. I
02:00:51
remember going to the United I I used to
02:00:52
go to the United States to buy my Apple
02:00:53
products cuz it was cheaper there.
02:00:55
>> Yeah.
02:00:55
>> And then in the UK it cost me like not
02:00:57
even not even a little bit it was like
02:00:58
hundreds of dollars more to buy a laptop
02:01:00
here. the same laptop in this market
02:01:02
versus this one cost different amounts
02:01:04
of money.
02:01:05
>> They they may choose to try and pass on
02:01:06
that consumption tax to to consumers.
02:01:09
Maybe they do do that. Uh maybe we could
02:01:11
try and avoid maybe we could try and
02:01:13
legislate against that that they have to
02:01:15
essentially be on par with where they
02:01:17
are in other markets that they they have
02:01:18
to charge par. Um if we don't if we
02:01:22
don't do anything we essentially have
02:01:25
nurses and uh you know like teachers and
02:01:30
all the people who are in the normal 50%
02:01:32
of the economy whose job is now to hold
02:01:34
up the economy while Starbucks doesn't
02:01:36
pay taxes while Amazon doesn't pay taxes
02:01:38
while Google doesn't pay taxes. And and
02:01:40
Steve, I think all your questions are
02:01:41
really really good, but they all point
02:01:43
to the same thing, which it which is
02:01:46
that, you know, the economy is a
02:01:48
collective action problem,
02:01:50
>> right? And
02:01:51
>> you know, it's a global action problem.
02:01:53
>> It's a global it's a global collective
02:01:54
action problem. And if we want if we
02:01:58
want robust solutions to these problems,
02:02:01
we're going to have to robustly
02:02:03
coordinate activity across the world.
02:02:06
And you know like for during the Biden
02:02:08
administration they tried really hard to
02:02:10
do this global profit tax where where uh
02:02:13
but that collapsed under the weight of
02:02:15
pressure but all you know again all of
02:02:18
your questions I think are really good
02:02:20
but they all point to the same
02:02:21
fundamental weakness of of of governance
02:02:24
>> and Nick you you need to talk to your
02:02:26
billionaire mates and also say if we
02:02:29
don't start investing in the economies
02:02:31
that we do business with which you are
02:02:32
saying right of course right
02:02:34
>> it's a lonely business I'll just tell
02:02:36
But but it's like it's like it's like
02:02:38
with those CEOs of those companies,
02:02:41
you know, you drain this you drain the
02:02:42
whole economy out and and and then where
02:02:44
then what next? Like
02:02:46
>> I think on this pass through problem I
02:02:48
was thinking I was looking at different
02:02:49
ways that this ends up being applied. So
02:02:50
if you think about the Big Mac, the Big
02:02:52
Mac costs different things in different
02:02:54
states depending on how much tax the
02:02:56
that state charges. So in Oregon the Big
02:02:58
Mac is $8 whereas in Chicago it's almost
02:03:01
$9. Um, if you think about like
02:03:03
bookstores, you can buy one book on the
02:03:04
high street for $20. The same book
02:03:06
online is $10 because they're passing
02:03:08
through the cost. So, it's conceivable
02:03:10
that if we we say to big corporations,
02:03:12
right, you guys are going to pay a
02:03:14
bigger tax to sell into the UK than the
02:03:16
UK consumer that they'll they might pass
02:03:19
that on to the UK consumer and they
02:03:22
might look at different markets and
02:03:23
because you know they might say as a
02:03:24
company we want to make 30% margin and
02:03:26
the way to make 30% margins in the UK is
02:03:28
to bump the cost. consumer could say,
02:03:30
"I'm going to use a VPN and pretend that
02:03:31
I'm going to be in a different market
02:03:33
and pay a lower price and doesn't
02:03:35
matter. You still have to pay the
02:03:36
broadcast license if you want to be
02:03:37
available in our in our country." These
02:03:40
are hard problems and we need to know
02:03:41
who is the person that we're targeting.
02:03:44
It's it's the Black Rocks of the world.
02:03:45
It's the it's the big banks of the
02:03:47
world. It's the big mortgage. like
02:03:50
>> I had um say I had a private
02:03:51
conversation with the CTO of a very
02:03:53
large company technology business and he
02:03:56
was saying to me he goes I don't think
02:03:57
the UK understands the situation it's
02:03:59
putting itself in and the EU with all
02:04:02
this regulation he said to me um that we
02:04:06
sell this particular product it's a
02:04:08
physical product and because the UK and
02:04:10
I think EU have put this new law in
02:04:13
where you have to have removable
02:04:15
batteries
02:04:17
>> interestingly the unintended consequence
02:04:19
of that is we have to stock more lithium
02:04:21
batteries. More of them go into landfill
02:04:23
and also your devices break because
02:04:25
they're no longer waterproof.
02:04:27
>> So you're going actually it's harming
02:04:28
the environment and also he said the
02:04:30
thing you guys don't realize is that
02:04:32
you're actually not a big market anymore
02:04:33
for us and because South America's
02:04:35
coming online we actually don't have to
02:04:37
sell the product here and you think
02:04:39
about this in terms of some of the
02:04:40
regulations around AI as well. When a
02:04:42
new product launches on a trackt,
02:04:44
>> yeah,
02:04:45
>> it goes in the US first because of
02:04:46
regulations and then maybe no
02:04:48
>> goes in the US first because it's the
02:04:50
biggest market. biggest market but also
02:04:52
we have we're our regulations around
02:04:54
some software and GDPR and all these
02:04:56
kinds of things means that sometimes we
02:04:58
just don't get the features
02:04:59
>> and sometimes in my history in our
02:05:01
history of building a the previous
02:05:03
business I was in as creators we would
02:05:06
sometimes have to wait 12 or 18 months
02:05:08
to get the same tools that my
02:05:09
competitors I know
02:05:10
>> in the United States could use
02:05:12
monetization tools they'd have the
02:05:13
monetization tools first and then we'd
02:05:15
have to wait 18 months
02:05:16
>> the economy is a set of trade-offs like
02:05:18
that is the problem like economics is
02:05:20
called a set of the the actual
02:05:21
definition of economics is making
02:05:23
trade-offs um and picking picking your
02:05:25
trade-offs. I totally get it. Like
02:05:26
regulation does actually suck for
02:05:28
consumers and for businesses. Um and
02:05:32
like the the EU is now overregulated to
02:05:34
the extent that you can't even take a a
02:05:36
lid off of a bottle without, you know,
02:05:38
the government being involved with how
02:05:40
the lid comes off the bottle. And it's
02:05:42
killing it's killing our dynamism. We
02:05:45
are really just like
02:05:46
>> and the US is underregulated. And if you
02:05:48
buy chicken in a in a store and and
02:05:51
don't cook it,
02:05:52
>> could be anything.
02:05:53
>> One in three chances you'll you'll
02:05:55
you'll you'll get uh either E.coli or
02:05:58
salmonella.
02:05:59
>> And your life expectancy is lower.
02:06:01
>> Exactly. It's all trade-offs. Everyone
02:06:03
who eats in the US trade-offs.
02:06:05
>> Comes back from the US and goes, "Oh my
02:06:07
goodness, I hate I hate eating food in
02:06:09
the US."
02:06:09
>> It's all tradeoff. It's all trade-offs.
02:06:11
Does this not then mean our ultimate
02:06:13
conclusion of this conversation is
02:06:15
around
02:06:16
morals and ethics around the trade-offs
02:06:19
that we think are the right ones to
02:06:20
make?
02:06:21
>> Yes.
02:06:21
>> And so it's a question really of morals
02:06:22
and ethics.
02:06:23
>> Yes. Human flourishing.
02:06:26
Yes. 100%.
02:06:28
>> The the purpose of the economy is is to
02:06:30
improve human human lives. The way to do
02:06:33
this is to massively maximize small
02:06:36
business power because when people get
02:06:38
more complicated when when pe when
02:06:40
people have to when I have to work
02:06:41
shoulderto-shoulder with my workers, I
02:06:44
treat people well, right? When I'm a
02:06:46
mega corporation who have faceless
02:06:48
workers down on the factory floor that I
02:06:50
will never meet. I will never sit next
02:06:51
to on a plane. I will never come in
02:06:53
contact with my workers. I can treat
02:06:54
them however I like.
02:06:55
>> Why do you think that's reductive, Nick?
02:06:57
Uh, well, I think that what Dan is
02:06:59
saying is true and massively
02:07:01
insufficient.
02:07:02
Of course, I mean, we're in violent
02:07:04
agreement about the small business
02:07:06
point. Like, I don't want to be naive
02:07:08
and think we should go back to the 60s
02:07:10
or something like that. Like, I don't
02:07:12
think that's true. But again, here's
02:07:14
what the new economics shows. that
02:07:17
corporate consolidation
02:07:19
increases prices,
02:07:22
lowers wages, decreases consumer choice,
02:07:25
and decreases the rate of innovation.
02:07:28
Right?
02:07:28
>> And I 100% agree
02:07:30
>> because innovation again that the
02:07:32
conventional view of innovation, the
02:07:34
conventional economic view of in
02:07:36
innovation is this sort of great man
02:07:38
theory is you have this smart rich guy
02:07:40
who's sitting somewhere and he he or she
02:07:43
has this amazing idea and that's
02:07:44
innovation. That is not what innovation
02:07:46
is. Innovation is always combinatorial
02:07:49
in technology makes itself out of
02:07:52
itself. You you start with a rock. The
02:07:56
the rock was our first technology. And
02:07:58
you did a lot of stuff with rocks. And
02:08:01
we also had sticks. Actually, sticks
02:08:02
were our first technology. But you tie a
02:08:05
rock to a stick, you have a hammer, a
02:08:09
spear, an arrow, an axe, a shovel. It
02:08:13
goes on and on and on. And what that
02:08:16
means in terms of policy is that because
02:08:18
innovation is combinatorial,
02:08:21
the more diverse people in a network who
02:08:25
come together with different ideas and
02:08:27
different sets of experiences, that is
02:08:30
what drives the rate of innovation. And
02:08:32
this is
02:08:33
mathematically demonstrated that a
02:08:35
diverse group of people working on a
02:08:38
problem will absolutely consistently
02:08:41
outperform a a a homogeneous group of
02:08:44
high performers.
02:08:46
>> And then when they when they become
02:08:47
really successful, which will happen
02:08:48
eventually if you let that system play
02:08:51
out, you have this inequality unless you
02:08:53
intervene at some point
02:08:54
>> and recycle it. And then when you go to
02:08:56
recycle it,
02:08:58
you go get back to this issue of us
02:09:00
having needing global cohesion. Yes.
02:09:03
Because some people won't want the
02:09:04
recycling.
02:09:05
>> Correct.
02:09:05
>> And they'll say, well, I'm just going to
02:09:06
go to Ireland or I'm going to go to
02:09:08
Dubai or I'm going to go somewhere else.
02:09:10
And this is maybe a function of the new
02:09:12
economy where people can just get up and
02:09:13
leave and take their value with them.
02:09:15
>> Yes.
02:09:16
>> And this is the conundrum.
02:09:17
>> This is the conundrum. But the meta
02:09:20
issue above the conundrum is recognizing
02:09:24
that citizens have both the right and
02:09:26
the responsibility to want to address
02:09:28
that problem. And we and you grew up in
02:09:31
a world where it was illegitimate to
02:09:33
address that problem that that that
02:09:35
economics told you don't worry about
02:09:38
those problems. The market will sort it
02:09:40
out.
02:09:40
>> Is there like a radical idea of how to
02:09:42
solve this? Do we need like all the the
02:09:45
very very rich people in the world to
02:09:46
come together collectively and say we're
02:09:49
going to create a new model? Like how do
02:09:51
how do you I don't know. Is there any
02:09:52
radical ways to solve this stuff or is
02:09:54
it just all trade-offs once again
02:09:56
democracy?
02:09:57
>> One of the big radical ways is breaking
02:09:59
up companies and it's unthinkable. You
02:10:01
know what PR did.
02:10:02
>> You know Jeff Bezos, right? Yes, I do.
02:10:04
>> So
02:10:04
>> it was in my wedding.
02:10:05
>> I wonder if he would lose more sleep
02:10:07
about higher taxes or having his company
02:10:09
broken up.
02:10:10
>> Oh, for sure. Broken up. Because if you
02:10:11
broke up uh Google from YouTube, if you
02:10:14
broke up AWS, Amazon Prime and Amazon,
02:10:17
if you like the biggest thing that
02:10:19
scares the billionaires is backing
02:10:21
competition with the market and it's
02:10:23
like, "Oh my goodness, I don't want to
02:10:24
have to compete. I've got this amazing
02:10:26
monopoly that just works."
02:10:28
>> Right. So,
02:10:28
>> but is is that a perfect solution? Cuz I
02:10:30
was thinking if
02:10:30
>> it's not a perfect solution.
02:10:32
>> It's the least worst solution available.
02:10:34
>> It's a good It's pretty It's pretty
02:10:35
good. It's pretty effective.
02:10:36
>> I mean, this is what Teddy Roosevelt did
02:10:38
in
02:10:39
>> these companies aren't making any any
02:10:40
money though. They're like being
02:10:40
subsidized by the mothership. So like in
02:10:42
an let's say Amazon Prime that's
02:10:45
competing against Netflix.
02:10:46
>> Dude, these companies make money where
02:10:48
they want to make money. Yeah.
02:10:49
>> For for tax optimization and strategic
02:10:52
reasons. Look, I mean, you know, like
02:10:54
when we started Amazon.com, I'm not sure
02:10:56
if you guys remember the whole hit on it
02:10:58
was it's not profitable, right? The
02:11:01
secret to Amazon.com success is the
02:11:04
negative cash conversion cycle, right?
02:11:06
For virtually every business on planet
02:11:09
Earth, to grow requires capital, right?
02:11:12
For all of your businesses, growth
02:11:14
requires capital. But for Amazon.com,
02:11:17
we took an order, we put up the website,
02:11:20
you take an order, you instantaneously
02:11:24
transmit that order to a book warehouse,
02:11:26
which has all of the titles in stock.
02:11:29
It's shipped the next day, it's received
02:11:31
the next day. You ship it out, hit the
02:11:34
hit the person hit the person's credit
02:11:36
card, but then you don't have to pay the
02:11:38
book seller for 90 days,
02:11:40
>> right? And what that means is the bigger
02:11:43
the company gets, the better cash flow
02:11:45
gets whether you're making money or not.
02:11:47
So, we didn't have to make money because
02:11:49
we had most companies have to make money
02:11:52
>> because if they don't, they don't have
02:11:53
the cash flow to continue
02:11:55
>> like Amazon Prime businesses and
02:11:57
>> Yeah. And so there are things available
02:12:00
that we could have made money in one
02:12:02
minute just by increasing our prices by
02:12:04
3 or 4%.
02:12:05
>> Yeah, these companies are also not worth
02:12:07
trillions of dollars because they're not
02:12:08
profitable. They're they're worth
02:12:10
trillions of dollars because they are
02:12:11
making money. But the issue is is they
02:12:13
have strategic monopolies. And if you
02:12:15
really want to make them lose sleep, you
02:12:17
need to break up strategic monopolies.
02:12:19
You need to say there's an actual limit
02:12:20
to how big a fund can be. There's an
02:12:23
actual limit as to how big a strategic
02:12:25
monopoly can be. uh you can't have
02:12:27
things that hedge naturally against each
02:12:29
other and prevent real competition. So
02:12:32
like these things are ways of and also
02:12:35
ties up their attention. So while
02:12:37
they're thinking about not getting
02:12:38
broken up, they're also not competing
02:12:40
with all the other guys out there. So
02:12:42
like it's it's basically capitalism runs
02:12:44
on competition. And this is the one
02:12:46
thing that we've missed
02:12:48
>> that the we have less competition.
02:12:50
>> Yeah. Like when Adam Smith said
02:12:52
capitalism works, he said it only works
02:12:54
when there's competition. If there's one
02:12:55
bakery in town, any bread at any quality
02:12:58
at any price is what you have to pay. As
02:13:00
soon as there's two bakeries in town, it
02:13:03
has to be the best quality at the best
02:13:04
price.
02:13:04
>> Although with two, you can collude. But
02:13:06
if you have five, it's very hard.
02:13:08
>> So, so Amazon has a monopoly over
02:13:11
>> strategic monopoly.
02:13:11
>> A strategic monopoly. So, what does one
02:13:13
do with Amazon?
02:13:14
>> You break it up.
02:13:15
>> Yeah.
02:13:15
>> Into what?
02:13:16
>> AWS, Amazon Prime, Amazon retail.
02:13:18
>> Fine. But they've still got a monopoly
02:13:20
in online e-commerce theoretically.
02:13:22
>> Yeah. Well, it's just harder. it's
02:13:24
easier for someone to come along and
02:13:25
compete right now. It's very very hard
02:13:27
for me to compete with Amazon because
02:13:29
they are pulling in cash from AWS.
02:13:31
They're pulling in cash from all these
02:13:32
other subscriptions. There's so Amazon
02:13:34
basics.
02:13:35
>> You could you could break up the retail.
02:13:37
You could say you can have a bookstore.
02:13:38
You can have an electronic store. You
02:13:40
can have this.
02:13:40
>> You can only you can't be the everything
02:13:42
store, right? So you could there's all
02:13:44
sorts of ways that you but you have to
02:13:45
acknowledge when someone has achieved a
02:13:47
strategic
02:13:48
>> think that's a good idea. Do you still
02:13:49
own shows on Amazon?
02:13:50
>> No, sadly.
02:13:51
>> Okay. I wouldn't be here talking to you
02:13:53
guys if I
02:13:55
>> No, no, no, no.
02:13:57
>> That's true. Jeff won't come.
02:14:00
>> Uh, no. I sadly I sold my shares. But,
02:14:03
uh, you know, I I am open to all of
02:14:06
these ideas because I know I mean I am
02:14:10
completely with Dan. I know that the
02:14:12
world would be a better place if these
02:14:13
companies were smaller and we had more
02:14:15
competition. And again there is not
02:14:19
there are no silver bullets to these
02:14:21
complex problems the world faces. We are
02:14:23
not at this table going to come up with
02:14:25
this algorithmic idea that is just going
02:14:28
to make the world a better place. It it
02:14:31
none of these solutions are perfect.
02:14:33
They are always going to be the least
02:14:35
worst thing that we can come up with.
02:14:37
But I think at at the at the level of
02:14:39
principle
02:14:41
um living in a world where we try
02:14:44
actively to limit concentrated power in
02:14:48
all its forms.
02:14:51
Where we try actively to include people
02:14:54
in whatever way whether as entrepreneurs
02:14:56
or just workers as robustly as possible.
02:15:00
Where we try to make sure that people
02:15:02
are engaged enough in the economy so
02:15:04
that they will be supportive of the
02:15:06
democracy. not want to burn it down.
02:15:08
These are highlevel principles that I
02:15:10
think reasonable people can agree with
02:15:13
and they come into conflict with people
02:15:15
like Elon Musk and Jeff Bezos and Mark
02:15:17
Zuckerberg who do not want to live in
02:15:19
that world, who want to live in an
02:15:21
oligarchical world and I just think that
02:15:26
we should have that fight and win.
02:15:31
We have a closing tradition where the
02:15:32
Lask leaves a question for the next not
02:15:33
knowing who they're leaving it for and I
02:15:34
think it's quite a relevant question.
02:15:36
Um, I'll ask you first, Dan. The
02:15:38
question is, in a world with so many
02:15:40
challenges, what can we do to restore
02:15:42
hope and trigger engagement?
02:15:47
Uh getting back to what we were talking
02:15:50
about,
02:15:52
we need we need people to know that the
02:15:54
game the rules of the game have changed
02:15:56
and that the rules that we grew up with
02:15:58
where we grew up in a particular
02:16:00
industrialized late stage industrialized
02:16:02
world that had those rules and we now
02:16:04
live in an early stage digital
02:16:06
revolution world. And the thing that
02:16:08
gives me hope is I know how the rules of
02:16:10
that world work, right? Someone
02:16:11
explained it to me. They actually
02:16:13
explained this is how you start a
02:16:14
business. This is how you grow a
02:16:15
business. This is how you make a
02:16:17
million. This is how you hire some
02:16:19
people. This is how you get a great team
02:16:21
working side by side. That gave me an
02:16:23
enormous amount of hope. I have a
02:16:24
pathway out of where I was born and the
02:16:27
wealth I was born with and where I am
02:16:29
now. Someone explained to me the
02:16:31
pathway. Here's how the rules work and
02:16:33
here's how you make make success. One of
02:16:36
the things that makes people feel
02:16:37
hopeless is that they're stuck in a game
02:16:39
where no one explains the rules.
02:16:41
>> So explaining the rules. So I would say
02:16:43
we need a schooling system. The thing we
02:16:45
don't talk about enough is that the
02:16:46
schooling system has to explain to kids
02:16:49
the relevant information as to how to
02:16:50
function in the current economy.
02:16:53
So, I played that forward in my head and
02:16:54
I was thinking, okay, you get a million
02:16:55
kids and you explain all of the rules to
02:16:57
them. At some point, if you just give it
02:16:59
a year or two, say they all knew the
02:17:01
rules,
02:17:02
>> um, there's still an edge
02:17:04
>> and some of them would figure out the
02:17:06
edge.
02:17:06
>> Totally.
02:17:07
>> And then you've got this pocket that
02:17:08
know, everyone knows the rules, but then
02:17:10
others know this particular way to beat
02:17:13
the system. And that could be with, I
02:17:14
don't know, they learn about AI, they
02:17:16
learn about whatever, and then you're
02:17:17
kind of back into the same place. And
02:17:19
you were one such person who got the
02:17:22
edge. Someone came to you and went, you
02:17:24
know, they're saying the rules are this.
02:17:26
That's actually there's a way to get an
02:17:27
edge and you had it within you for
02:17:29
whatever reason to capitalize on that
02:17:31
edge and now you're a multi-millionaire.
02:17:34
>> So, so there's always going to be the
02:17:36
rule and then the rules get
02:17:39
every single day after you explain the
02:17:40
rules to someone
02:17:41
>> there's a new set of rules.
02:17:43
>> The only consistent is change. And at
02:17:45
the moment, most people I encounter who
02:17:47
have never had any explanation going on
02:17:49
about how the world works now, they are
02:17:52
hopeless. They feel completely hopeless.
02:17:54
As in like I see kids who are sending
02:17:56
out um CVS to Microsoft or to like some
02:18:02
major company, they don't realize that
02:18:03
those companies are getting 3500
02:18:06
applications.
02:18:07
>> The day after you explain the rules to
02:18:08
them, the rules are one day less
02:18:11
relevant. And so it's true. You'd have
02:18:13
to go to school every single day.
02:18:15
>> Well, yeah. You lifelong learning. You
02:18:16
do have to do lifelong learning. Like
02:18:18
there is a lifelong part of the rules is
02:18:19
lifelong learning. That is actually one
02:18:21
of the rules which is the only
02:18:22
consistent is change.
02:18:23
>> It sounds like you're saying though that
02:18:25
if we teach people the rules of business
02:18:27
then people will have more hope and but
02:18:29
but there's so many people that I know
02:18:30
like my my fiance who she doesn't she
02:18:34
cares about something else much more
02:18:35
than she cares about business. cares
02:18:36
about like
02:18:37
>> she just start she set up Bali breath
02:18:39
work and she was able
02:18:40
>> right she was able to create Bali breath
02:18:43
work #
02:18:44
>> because well I said it not you
02:18:46
>> she was able to figure out how to turn
02:18:50
her passion into something that is
02:18:52
commercially sustainable
02:18:54
>> I'm just using her as an example cuz we
02:18:55
did she get that from the school system
02:18:56
>> fundamentally she maybe she got it in
02:18:58
part because she has a dad who's an
02:19:01
entrepreneur she has a explain the rules
02:19:03
to her um she has the support network
02:19:06
like she supports me, I support her.
02:19:07
>> She knows how to enroll people into her
02:19:08
success. All of that is called pitching,
02:19:11
publishing content, creating a product
02:19:13
offering. I only know one thing that
02:19:15
I've seen work again and again and again
02:19:17
and again, which is I teach people the
02:19:19
people who learn the entrepreneurial
02:19:21
method suddenly feel agency and hope.
02:19:22
>> I agree. And I saying that's for
02:19:24
everyone.
02:19:24
>> Yeah, but this is the it's not for
02:19:26
everyone. It's for people like that had
02:19:27
whatever mean you had in terms of like
02:19:29
the upbringing, the luck, the whatever,
02:19:30
the fortune.
02:19:31
>> I'm not saying everyone's going to be an
02:19:33
entrepreneur. My answer to that question
02:19:35
>> is entrepreneurship
02:19:36
>> is the entrepreneurial tool set gives
02:19:38
people a lot of hope.
02:19:39
>> I get that and that one of the things
02:19:41
that we have to acknowledge there is
02:19:42
that's a certain type of person who has
02:19:44
a certain type of goals. There are some
02:19:46
people who actually just want to go
02:19:49
outside and they don't they want to work
02:19:51
maybe they want to work one day a week
02:19:52
or two days a week.
02:19:53
>> Sure I don't want to do push-ups and I
02:19:55
don't want to do sit-ups and I don't
02:19:56
want to go to the gym. But if you ask a
02:19:58
fitness professional how do you improve
02:19:59
your body? How do you feel good? Right?
02:20:01
The fitness professional says, "Hey,
02:20:03
these are all the things that I've seen
02:20:04
working for a lot of people about going
02:20:06
out and getting fit." And you might not
02:20:07
want to do them initially, but actually
02:20:09
the people who do these things, the hope
02:20:12
>> the people that do those things might
02:20:13
have an inherent privilege, right?
02:20:14
>> Wait, the monopoly the world's not fair.
02:20:17
Like the world's not fair. Some people
02:20:18
are born on
02:20:19
>> I need to know your answer to the same
02:20:20
question. I think we we need to have
02:20:23
vital democracies that manage economies
02:20:26
in ways that are optimized around human
02:20:30
flourishing and not capital efficiency,
02:20:32
not capital accumul accumulation. That
02:20:35
we live in a world, you completely grew
02:20:39
up in a world where the highest good was
02:20:41
capital efficiency. The capital
02:20:43
efficiency and godliness were the same.
02:20:46
>> And we have organized society in this
02:20:48
way. We in the United States it we
02:20:51
literally have a norm and a set of
02:20:53
regulations around maximizing
02:20:54
shareholder value for corporations.
02:20:56
Right? This was invented out of whole
02:20:58
cloth in the 1970s. This whole idea that
02:21:02
the purpose of the corporation should be
02:21:04
merely to enrich shareholders. And the
02:21:06
evil of that idea isn't what they
02:21:10
weren't saying was screw the poor. What
02:21:12
they said was if you maximize value for
02:21:15
shareholders, it will be good for
02:21:17
everybody. And that was the lie because
02:21:20
it wasn't good for everybody. It was
02:21:22
good for a tiny minority of people. And
02:21:24
the lie was that when you do that,
02:21:27
growth rates will go up, GDP will go up.
02:21:30
We'll have a rising tide. And the tide
02:21:33
didn't rise, it fell. And what modern
02:21:36
economics says is that we can have a
02:21:39
different construct. We can have a
02:21:40
different society that purposefully
02:21:43
includes people in a robust way, whether
02:21:45
they're a worker, whether they're a
02:21:47
small business. And if we do that,
02:21:50
everyone will benefit. The economy will
02:21:53
grow faster. People will be paid better.
02:21:55
Prices will be lower. We will have more
02:21:57
innovation.
02:21:59
This is within our grasp. We just have
02:22:02
to decide to do it.
02:22:03
>> You should go into politics.
02:22:04
>> I am in politics.
02:22:06
>> Well, I I hear that. One thing I don't
02:22:08
like is waiting for the world to change.
02:22:10
And I like I like personal agency. And
02:22:13
at Nick's level that he's playing at, I
02:22:15
love the fact that he's in politics and
02:22:17
he's he's using his wealth and his power
02:22:18
and his influence to change the system.
02:22:21
For most people, waiting for the world
02:22:22
to change does not feel empowering. And
02:22:25
and I guess what where I'm coming from
02:22:27
is
02:22:29
like, yes, tilt towards this because
02:22:31
that's the political movement that's
02:22:33
required to make sure the world includes
02:22:35
more people in capitalism. And I love
02:22:37
that. Um, and while that's happening,
02:22:40
take personal accountability, personal
02:22:42
agency, figure out what is your next
02:22:44
move. Watch all the episodes of Diary of
02:22:46
a CEO, learn from people, and you know,
02:22:49
and jump on
02:22:50
>> and and figure out Yeah. Subscribe,
02:22:53
right? Do me a favor, subscribe to the
02:22:55
channel. But if if that if that is done,
02:22:58
like people people who do that end up
02:23:01
feeling hopeful because hope comes from
02:23:03
having personal agency. And personal
02:23:05
agency is knowing your next move that's
02:23:07
going to benefit you and move you
02:23:09
forward.
02:23:09
>> I agree. I agree. And I real I' you
02:23:12
know, the older I've gotten, the more I
02:23:13
realize my own privilege.
02:23:16
>> And my privilege isn't necessarily that
02:23:17
I built a business and that I have money
02:23:20
now and all those things. My privilege
02:23:22
is something happened when I was young
02:23:25
from the point of maybe even where my
02:23:26
parents about it. I don't feel guilty
02:23:29
about it, but it just has allowed me to
02:23:31
see my own bias and to realize that I
02:23:34
have this unknown unknown.
02:23:36
Unfortunately, that's growing by the day
02:23:38
because I'm getting more entrenched in
02:23:39
my own privilege. And what I mean by
02:23:40
this is like I play out the scenario
02:23:42
theoretically. My dad left my mom and my
02:23:46
mom um still struggles to read and write
02:23:49
and she would have had like four kids,
02:23:52
can't read or write, can't really get
02:23:54
employment. She worked at St. Luke's
02:23:56
hospice as a volunteer and I go, "God,
02:23:58
if that one thing had happened, how
02:24:00
different would my of life have been and
02:24:03
and so that's like a privilege that I
02:24:05
I've never even acknowledged because I
02:24:07
it's kind of inherent. It was like built
02:24:08
into my life. And then would I be sat
02:24:11
here now? Would I be be the person I am
02:24:13
today if that one little thing had
02:24:15
happened?" No. Would I be ambitious and
02:24:17
optimistic about the world? Or would I
02:24:19
be theoretically could I be resentful?
02:24:20
Could I be like some of my other friends
02:24:22
who came from the same city where I came
02:24:24
from who didn't have a father who may
02:24:27
I've said to some of my friends I said
02:24:29
to one one of my particular friends back
02:24:30
home if you would just get a job for a
02:24:32
couple of months I will pay your rent
02:24:34
for years didn't happen can't get a job
02:24:37
at his subway for for 3 months so that I
02:24:40
would pay his rent for years I ended up
02:24:41
helping him anyway but I it just I
02:24:43
remember saying that 10 years ago it
02:24:44
just highlighted to me that there's a
02:24:46
real deep inherent privilege that I have
02:24:49
that I'm like not even aware that I
02:24:51
it sometimes it's trauma my DNA my
02:24:53
brothers are all very smart naturally um
02:24:56
and what if I didn't what if like I
02:24:58
didn't have those two parents and what
02:25:00
if I didn't have the whatever genetic
02:25:01
composition I had like then would the
02:25:03
advice apply that then would the advice
02:25:07
I give to the world would it apply so I
02:25:09
I I I mle that and go it's got to pass
02:25:12
that lens for it to be broadly
02:25:13
applicable and therefore I think
02:25:16
effective advice
02:25:17
>> I I love your level of compassion and
02:25:19
empathy for people and the fact that
02:25:21
you're having that self explo
02:25:23
exploration means you're an incredible
02:25:24
type of person with each individual.
02:25:27
Each person wants to do the most with
02:25:29
what they've got. I'm saying that if I
02:25:31
was to visit a small town that had a
02:25:33
thriving 10, 15, 20 businesses in there,
02:25:37
there were enough entrepreneurs to
02:25:38
create optionality for people. That
02:25:40
would be a good town to go to, right?
02:25:42
And if I go to a town where there are no
02:25:44
entrepreneurs and there are like
02:25:45
everyone feels downtrodden and there's
02:25:46
one big Costco and that's the only
02:25:49
employer in town, that's going to be a
02:25:50
town. So all I'm saying is you need
02:25:53
a critical mass of people who have uh
02:25:55
agency and that lifts up the like having
02:26:00
a few do you know in in Japan they call
02:26:02
it the Shogun family, right? and the
02:26:04
Shogun family lifts up that that little
02:26:06
community and that around that Shogun
02:26:08
family you end up with lots of other
02:26:10
businesses and lots of other like it it
02:26:12
it flows out. But when you have one
02:26:14
monolith in the world that is the only
02:26:16
company in town and it is the only place
02:26:19
that ships stuff to your door and it's
02:26:21
the there's only one place to get your
02:26:22
CDs and there's only one place to get
02:26:24
your Netflix then pretty much everyone
02:26:26
else is just reduced to being a
02:26:27
consumer.
02:26:28
>> What do you think, Nick?
02:26:30
>> Again, I've said it before. I I I I
02:26:32
agree with this sentiment 100%. I am an
02:26:35
entrepreneur myself, but I I expect that
02:26:39
operating in empowerment applies to it
02:26:42
will no doubt apply to a high percentage
02:26:44
of the people who watch your show,
02:26:46
right? Lots and lots of people who watch
02:26:47
this show are entrepreneurial, want to
02:26:50
be entrepreneurial, so on and so forth.
02:26:52
But I suspect you're talking about less
02:26:54
than 5% of people on planet Earth that
02:26:57
fit that paradigm. And I want to create
02:26:59
a paradigm that works for everybody.
02:27:01
>> And you're saying if you hit those 5%.
02:27:03
>> Well, even in the UK, it's six million
02:27:05
self-employed people out of 30 million
02:27:07
workers. It's not it's not tiny. It's a
02:27:09
pretty decent percent. Right. It it is a
02:27:12
major opport opportunity that more
02:27:14
people than ever could take part in. If
02:27:16
you asked a health professional, how do
02:27:18
you get hope? Go to the gym, go for a
02:27:20
run, all that stuff. You're asking an
02:27:21
entrepreneur, how do you get hope
02:27:23
through personal agency? I'm going to
02:27:25
tell you what's worked. What's worked
02:27:26
for me is the entrepreneurial method.
02:27:29
>> So maybe we need to ask a broad group of
02:27:31
people.
02:27:31
>> Yeah.
02:27:31
>> But I suspect that what they will come
02:27:33
back to you with is the quiet miracle of
02:27:36
a normal life.
02:27:37
>> If you want that, that's great. I I want
02:27:39
that and I want that for everyone.
02:27:41
That's gone away. It's gone. Houses are
02:27:44
unaffordable. Sorry. Local jobs don't
02:27:47
exist. No one's paying healthy wages.
02:27:49
Like all of that stuff that I want as
02:27:51
well. It's great to sit there and want
02:27:53
it, right? But that doesn't give me
02:27:55
hope. That gives me disappointment that
02:27:57
it used to exist, right? My the family
02:27:59
home that most people would love to
02:28:02
raise a family in, it's 1.2 million
02:28:04
pounds now,
02:28:05
>> right? And if you want to fix that, you
02:28:07
have to enact this.
02:28:08
>> Yeah.
02:28:09
>> You have to do that. Most people
02:28:11
>> What is People are going to wonder
02:28:12
what's in that piece of paper. So th
02:28:14
this is, you know, I mean, the the the
02:28:17
main body of my work is coming up with a
02:28:20
different economic paradigm, a way of
02:28:22
understanding economic cause and effect
02:28:24
that leads to the world that Dan
02:28:27
prefers, that I prefer. I think I don't
02:28:30
know, but I sense it's the world that
02:28:32
you prefer. And what you have to do is
02:28:34
you have to rip down the existing
02:28:36
economic framework and replace it with a
02:28:39
21st century thing that inclines
02:28:42
policymakers to make good decisions not
02:28:44
bad ones. And the booklet itself that
02:28:46
that can can you show the booklet?
02:28:47
>> Yeah.
02:28:48
>> So this booklet is 21st century
02:28:51
economics. Now this is aimed at policy
02:28:54
makers and professionals just but but if
02:28:58
you go to uh marketsbuilt forhumans.org
02:29:01
org. You can download this for free and
02:29:04
that is merely an expression of the
02:29:07
paradigm itself. Going from believing
02:29:10
that uh we should just increase uh
02:29:12
capital efficiency to human flourishing.
02:29:15
Going from understanding human beings as
02:29:17
homoeconomicist to homo sapiens. Going
02:29:19
from understanding the economy as a
02:29:22
parto optimal equilibrium to a complex
02:29:24
to an ecology all this stuff. But when
02:29:27
you understand it in a new way, you come
02:29:29
to very different conclusions about how
02:29:31
you should organize the world. And that
02:29:33
is the starting point for global
02:29:35
transformation.
02:29:37
>> I love it. He's already a billionaire.
02:29:39
He's got time on his hands and he's got
02:29:40
money to fly around the world doing it.
02:29:42
Do it. And while he's doing it,
02:29:44
>> all I need is for people like you to
02:29:46
help me explain it.
02:29:47
>> Yeah. And and like I I love it. I'm not
02:29:49
against it. I'm just saying what will
02:29:51
give most people hope is taking agency
02:29:53
over their life where they can do
02:29:54
something this week to improve their
02:29:55
life. So while
02:29:56
>> next time I see there will be a test
02:29:58
>> and and download download it give it to
02:30:00
your law makers.
02:30:02
>> Well so what I'll do then I mean we've
02:30:03
got different reading materials people
02:30:05
that are listening can uh can pursue
02:30:06
here. Um we've got Dan's books here
02:30:08
which I'll link below. Dan is there a
02:30:09
particular best book to start with in
02:30:11
your opinion.
02:30:12
>> The most recent one is called the
02:30:13
lifestyle business playbook and it's
02:30:15
basically how to get started with a
02:30:16
small business and a business that will
02:30:18
give you more fun freedom and
02:30:19
flexibility and I like the idea of
02:30:21
supporting anyone who's trying to create
02:30:22
a better economy. Some of the most
02:30:24
miserable people I know are waiting for
02:30:27
the system to change. And I don't want
02:30:28
you to be that person. I want you to be
02:30:30
doing something in your own life.
02:30:31
>> And then over here, I mean, I'm going to
02:30:34
link all of your books below as well.
02:30:35
But
02:30:35
>> yeah, I mean, I I just think that um a
02:30:38
starting point for global transformation
02:30:40
is under look, economics is the
02:30:42
operating system of the world. If it's
02:30:45
the wrong operating system, you end up
02:30:47
with a very bad circumstance. I
02:30:50
>> and in economics is invisible to most
02:30:52
people. They don't even understand it's
02:30:54
the it's the water they're swimming in.
02:30:56
They don't understand that policymakers
02:30:59
are making decisions that affect their
02:31:01
lives based on a particular
02:31:03
understanding of how the economy works.
02:31:05
And if that's wrong, then you're going
02:31:08
to make some terrible decisions. If you
02:31:10
believe that prosperity trickles down
02:31:12
from the top, you're going to enact a
02:31:14
certain set of policies. If you believe
02:31:17
that growth is built from the middle
02:31:19
out, you will make an entirely different
02:31:21
set of uh uh uh policies. If you believe
02:31:24
that the middle class is a consequence
02:31:26
of economic growth, you will go one way.
02:31:29
If you believe that the thriving middle
02:31:31
class is the cause of growth, you will
02:31:33
do a completely different set of things
02:31:35
in terms of policy. All of them aligned
02:31:37
with what Dan wants. But but that's
02:31:41
where you have to start. That's that's
02:31:43
the meta those are the meta questions
02:31:45
that you have to answer and then you and
02:31:47
then you deduce logically to all of the
02:31:51
things that Dan prefers. But you have to
02:31:54
start up here. You have to start with
02:31:55
the set of ideas that govern how people
02:31:58
see economic cause and effect. And that
02:32:00
is what this is.
02:32:04
>> I shall link it below. Thank you so
02:32:06
much. We're done.
02:32:06
>> Thank you.
02:32:07
>> You are fantastic. YouTube have this new
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crazy algorithm where they know exactly
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what video you would like to watch next
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based on AI and all of your viewing
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this video is the perfect video for you.
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It's different for everybody looking
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right now. Check this video out and I
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bet you you might love