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