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We're kind of reaching this place where we need another GI bill, but this time not for home ownership, but for stock ownership.
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The >> benefits of an owner mentality over a employee mentality are vast.
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>> 93% of stocks are owned by like the top 1% of wealthiest people, which means that as the stock market is growing, the vast majority of people are just missing out on that wealth gain.
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Employee ownership is actually a bipartisan issue in Congress.
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We're seeing a lot of foreign owners come in and purchase capital in American companies.
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When succession plans happen, it's like crazy how much foreign investment comes in.
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And so, a lot of lawmakers are saying, "We don't want our American companies to be going to foreign interests.
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We want them to stay in America for Americans."
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I think a lot of founders would happily not sell to PE if they could avoid it.
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And they would happily not even go public.
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They've built something that they think is meaningful.
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So why not sell it to your employees? Well, hello everyone.
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It's Jim Oanosy with yet another Infinite Loops.
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I was so excited when I saw who my guest was today, El Griffin, the writer, editor, and builder of the newsletter, The Alician, where she discusses the future of capitalism, uh, governance, work, and culture with over 20,000 subscribers.
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You're also the 2023 Roots of Progress Fellow and I love this, the author of Obscurity, a serialized Gothic novel. Welcome, El. >> Thanks.
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You forgot to mention I'm also an Ashana grantee. >> I buried the lead.
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I'm gonna see you in a couple of weeks for the fellowship, Catherine.
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Oh, we're leaving this in, guys.
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Uh, which which is fantastic. I love that.
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Um, well, now I feel extra special that you're also one of our grantees that Okay. Okay.
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All of the steel Manning against your arguments.
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I'm just not going to put in. >> Right. >> Do you do that?
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I have gotten into the habit.
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Uh and before we get to your absolutely fascinating ideas, uh many of which I share.
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Um do you I ever since we have an internal AI lab the because we un we anticipated that they would nerf the commercial models and you know hard code.
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No, you're not supposed to know this particular thing.
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So anyway, we built an on-site uh AI lab with all of the large language models, modifications to the same, etc.
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But one of the things that I've loved with it is I steel man all of my own arguments against >> and like if you do it as well, you must have had the moment where you're like, oo, I didn't think about that. >> Yep. I love that.
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I'm I upload my entire essays to Tajibia and like tell me what all the commenters are going to say about this and it'll like nitpick everything I say. I love it. It's great.
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>> And and and are you finding that it's generally accurate? >> Yeah. I mean it it is funny.
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Um, I mean I I feel more confident in my pieces going out now than I did before ChatgBT because before I would just like not know where my holes of understanding were.
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And like I might write something about climate and then somebody who's been like researching climate in academia for like 20 years would pop in the comments and be like, uh, you're basing this off of this study which has been widely discredited and we don't really use that anymore.
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And I was like, okay, so just ignore everything I just said.
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the dreaded actually guy. >> Yeah.
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But now that now I feel like that doesn't happen as much or at least like I have a a better base understanding that like okay there's there's no holes that I'm just completely missing here. So I really like that. >> Yeah.
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So do I because I I think that obviously we are blind to our own blind spots. >> Yeah.
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and and having the large language model point them out is incredibly helpful from my point of view.
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Le let's jump into what you've been advocating which is basically a revolution in the way we do capitalism.
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You advocate for broadbased ownership being the single best way to rebuild the middle class. Tell me about that.
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Uh what's the famous movie uh March Call where Jeremy Iron says, "Explain that to me like I'm a golden retriever." >> Yeah. Well, it is.
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Um I guess I think about it like the GI Bill um right after World War II was like one of the best things America did.
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We were like, "Okay, everybody's coming back from war and what do we want?
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We want um these people to have access to education.
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We want them to have access to assets in the form of home ownership."
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And we created massive homeownership and massive education of the population um because they had these like lowinterest loans. And what does that do?
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That creates generations of people who have um not just a salary but a income generating asset their in the form of real estate their house.
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their house. Um and we have a well educated population that's you know working and building companies like IBM and GM and all these like big um you know companies that established the American economy and um and I think the you know now we're kind of reaching this place where um we need another GI bill um but this time not for home ownership but but for stock ownership for the the
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equity in our companies um because now we have this sort of wealth inequality again, but this time it's not it's it's not that we don't all own homes, although now it's it's much harder for people to own homes, but we have all of these people who own stock and it's something like I think the stat is 93% of stocks are owned by like the top 1% of of people of wealthiest people. Um,
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Um, which means that just the as the stock market is growing and getting bigger and the the value of our companies is increasing then the vast majority of people are just missing out on that wealth gain and there's just like the small people who are already wealthy gaining a lot more.
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Um, so to me the the obvious answer is create more owners of that equity.
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Don't just just save it for some people but cut everybody in on the deal.
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deal. um if if companies are owned in a more equitable way so that it's not just like you know the small or the small group at the top gets the vast majority of corporate capital but everybody at the company is being cut in then everybody gets richer um as our companies and our corporate value
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expands um so that's that's and this was just I had started to write an essay about this topic um and I was as I was accumulating the the research it just became longer and longer and longer and I was like oh my gosh there's such so much here that we need to kind unpack to even make this a reality. Um, and so I
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Um, and so I just uploaded the the um outline to Weefunder and I said, "Hey, I have this idea for a book.
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If you want to read it, you know, fund it.
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Um, and I will share the profits with you when the book eventually sells."
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Um, and we pretty quickly raised nearly $70,000.
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Um, and now I'm writing the chapters live and kind of researching this idea live for my readers who are also the investors in the project.
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So it's been a very interesting very interesting uh project so far.
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>> So take us through how this your ideas would differ from the standard uh esop employee stock ownership programs uh which aren't you know terribly broad right now in the US.
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I think there's like six and a half thousand plans with 15 million participants covering about $2 trillion in assets.
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Uh but then there's also the 401k where many companies offer the opportunity to put your 401k into the company's individual stock in addition to you know broad indexes and managed portfolios.
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How does your idea differ from what we have right now?
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>> Um it doesn't really except that we need to drastically change all of these structures if we want broad-based ownership.
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Um because let me just pull up some stats here.
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Like the ESOP structure, employee stock ownership programs are great, but they're they're there's two problems with them in my mind.
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One, um they're not very scalable.
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You basically have to be a very steady revenue generating company like manufacturing and construction to be able to afford to like pay out your employees their the ownership of their stock value in the company 30 years from now when they retire.
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Most companies could not do that.
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um this the and I I actually have let me just pull up that stat really quick.
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Um if we if we converted um you know 30% 30 to 100% of every possible esopable company that would create $2 trillion of revenue for workers but that is still like 10% of the economy. It's less than that.
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it's we still have the vast majority 90 95% of the economy that can't be reached via ESOP.
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Um I think the traditional RSUs done by tech companies is like a very interesting structure in the fact that it's like okay we can't do that.
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Um we're a small startup we can't like guarantee we're going to be around in 30 years to pay off your retirement plan.
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Um and that that was the second part that I think is wrong about the ESOP is that it comes in the form of retirement plan.
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um which I think is hindering wealth equality because we have um 90% of ESOPs also have a 401k.
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So people just have two retirement accounts at those companies.
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Um and I just think people should be able to use that wealth immediately like you can at a traditional tech company RSU.
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Um so so where I see the value of the RSU then is okay, your company can afford to pay off an employee in 30 years.
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You don't even know that the company is going to be around 30 years from now, but you can at least say if this company is worth something someday, like I want to cut you in on the deal, here's some stock.
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Will it invest over the next four years or whatever.
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Um, and that will possibly create wealth for everybody.
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The problem with those are that they're not very equitable.
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It's like 60% of the value of the company usually by the time of exit is going to investors.
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20% is like split between the founders and early employees and that's like you know five to 10 people and then the other 20% that goes to employees is split between like hundreds if not thousands of employees.
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So everyone's getting this really tiny sliver.
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If you have like a traditional like say if you if you have like a billion dollar exit that's like 200 million for the founders and like 200,000 or less for the employees.
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So that creates like a huge wealth gap.
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Um so ESOPs don't do that but not every company could do that.
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And tech companies do that but inequitably and not you know not um not not always the exit events like that are rare.
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Um so my kind of idea is if we want to make this broad-based then we have to kind of create other structures that kind of marry these worlds together to to create better stock options for the future.
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>> Hey take us through one example of how you would make these structures better. for example.
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Um I think um I think some companies do this well some companies kind of do this with synthetic stock but I I think there's a lot of interesting ways that you could you could create so for example one cool thing about the ESOP is that it's relevant to your salary.
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So, if your salary is $100,000 um and somebody else's salary is $50,000, then you're getting twice the amount of stock than the person with the $50,000. I think that's awesome. It's equitable.
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It's it's based on your salary.
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Um uh and there's a there's a cap.
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If your salary is over like $350,000, you're not going to make more than that amount more in stock than the next person.
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So, it's it's pretty equitable.
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Um, if you could if you could apply that same model to RSUs like the traditional tech company model so that the the stocks are more equitable and you could pair that with um profit sharing for example um or even like um regular
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liquidity events like okay I work at this tech company it may or may not go public um but the company is doing well now and the company says hey we'll buy back some of your stock if you want you can cash out some of it um and earn some money for that right now. You could have
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You could have these regular liquidity events, you know, every couple of years during time when times are good rather than like waiting for this future exit that may or may not come and in a more equitable distribution like an ESOP is.
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Um so I think I think things like that could be very interesting.
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Yeah, I I agree particularly on the ability for uh workers and let's stay with the tech company example.
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Uh right now they have no liquidity essentially.
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They have no there is no secondary market.
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In fact, one of the things that I looked at was trying to what it would take to create a secondary market in private companies where people could in fact transact uh but with with private equity uh or privately held equity as opposed to public equities.
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But like one of the basic tenants of entrepreneurship is the willingness to take on what many people see as absurdly high risks >> with with your capital.
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And generally it's the founders where all of the risk is placed, right?
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And and so how how do we square that with the idea that let's say that as the founder you go all in you go all in with your families and friends and your own money and you're putting stuff on your credit cards and you are suffering what many people look at as unbearable risk.
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What about the argument that is it really fair to require that people and 90% of their people don't succeed right the company fails.
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So, so for the 10% that succeed, are we putting an unusual burden on those founders who took all the risks selling it to employees after the company has, you know, retrospectively become highly derisked?
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Yeah, I think there's a couple routes that could potentially work here.
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Um either one, the founder is um taking on all this risk and continues to um we just do it though the way that founders do it today except that um selling to employees becomes a more default option than like selling to PE or selling to other companies.
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other companies. tax incentives could make that very very likely where I mean I if you spent all this risk capital and you made you made this incredible company and sure you own like all the equity in it but if you eventually want to exit or you know do some succession
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planning um I think a lot of founders would happily not sell to PE if they could avoid it um and they would happily not go even go public if they could avoid it um because they want their company to be in good hands they want they don't want to just dilute it and give it all up to investors. They they
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They they they've built something that they think is meaningful.
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So, why not sell it to your employees?
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You still get your big cash out.
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Um, and your employees get to participate as owners just like you have.
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I think that's I think that's the easiest on-ramp to this.
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Um, and I and I think that's a win-win.
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And we've seen that, you know, um, Canada and England have both experimented with saying, "Okay, if you sell your companies to your employees, you as a founder don't have to pay taxes on that on your big win."
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Um, you can take all that home with you.
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Um, and that makes them more likely to sell to employees because they're like, "Wait, I would earn more money selling to my employees than I would selling to PE, even if the even if the rate overall that I would get is higher for the company."
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Um, I think that's a great way to do it.
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>> Yeah, I think that that is the exit ramp that really does make this very attractive.
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Uh, but you've got to get governments to agree >> that they're going to forego all those very maybe certainly billions, maybe trillions in tax receipts.
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Um and I I I would in a perfect world that would uh the government would say yes of course uh because that makes much more sense but it that that's going to be a challenge.
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Um but it's a great idea because >> well you should look at everything after tax.
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Very few people do but we've always looked at everything after tax after inflation.
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What are your real gains?
17:48
I think that tax incentive is overall good and I think that's why employee ownership is actually a bipartisan issue in Congress and we keep seeing over and over again Democrats and Republicans pushing these bills forth together because um one of the reasons why this is a particularly American interest is that we're seeing a lot of foreign owners come in and purchase um capital in American companies.
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So when succession plans happen, it's it's like crazy how much foreign investment comes in and takes those.
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And so a lot of um a lot of lawmakers are saying we don't want our American companies to be going to foreign interests.
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We want them to stay in America for Americans.
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And I think that's why there's more interest in this now.
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And we we've even seen I saw Mark Cuban mention the idea on a on a podcast just this week.
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So I think that there's there's interest there's starting to be more and more interest of making this a thing and bipartisan interest.
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Yeah, it's something that has bedeled me for quite a long time.
18:47
Uh because these ideas aren't new, right?
18:54
>> And nor are there authors.
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They come from both sides of the aisle.
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>> I think of Milton Freriedman back in the 60s or 70s was advocating for a similar approach. Yeah.
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>> He also advocated, I believe it was Melton, I'd have to check, but for a uh a at birth each child gets a portfolio of all American companies. >> Yes. I love that. >> So that you Yeah.
19:22
So that you create an ownership mentality in society as opposed to a you know employee I work for the man that that kind of thing.
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But these all have long histories, >> but they've never really tried it.
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What do you think is the impediment here >> to at least experimenting with this?
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>> I think the impediment is well, the reason why ESOPS even became a thing in America was from the ARSA act in the 1970s, which was a retirement act.
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And that was that was great because it was like, okay, let's incentivize people to have 401ks and retirement accounts.
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And that really did work.
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A lot more people have retirement accounts today than they did then.
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Um, the downside of that being a retirement accountant is exactly that.
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like it makes a bunch of people rich for retirement, but they still can't compete with, you know, the founders and executives and and the the wealthy who are just owning Amazon stock today and can just instantly access those funds and go on and start another business.
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Um, I mean, if you think about the Silicon Valley model, why did that peripherate?
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because he had this like one company, the Fairchild Semiconductor make chips and then they all sold and became wealthy and so then they started new companies which then they then sold and then became wealthy which then started new companies and they all had this equity model of these RSUs for employees.
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Um, you can't do that with the ESOP model.
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It won't peripherate the same way because no employee can like get wealthy off their current company and then go start another company with those funds.
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They they get them when they turn 65.
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So, I think there's just there's that that that kind of portion that's limiting it.
21:07
Um, and then there's the function that that it that the way that an ESOP is set up.
21:12
Um, is that the company has to be able to buy back those stocks at any time, which means you have to have this like very steady revenue stream, which like most companies just cannot have.
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Um there's also a lot of tax um burdens and a lot of regulatory burdens that mean if your company makes like more than a million IBIDA like you or you have to have like more than a million IBIDA to have an ESOP but then like over 5 million or something it becomes too expensive.
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The regulatory hurdles are too high.
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You would never do it if you're like a big company.
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Um so it's just it's created this this construct that's too narrow.
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just companies can't pick it up.
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It won't peripherate easily.
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Um and so I think that's why we need new structures um more than anything else.
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>> So um I I love the example uh of uh the the folks who uh founded Fairchild.
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You know that there they were called the traitorous 8. >> Yes.
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Because because at that time uh the over story or the the general consensus view was very very different, right?
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Like the corporation was king and you were a surf and how dare you go and try to start your own thing.
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And of course it started the virtuous flywheel that created Silicon Valley.
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But what's interesting to me is if you go back a little further in American history, that was the norm, right?
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Like the the so-called Gilded era, uh, of the late 19th century, early 20th century was essentially people were like, "Hey, sometimes you can just do things.
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Hey, I want to start a bank.
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I'm going to put my name on it.
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It's going to be JP Morgan."
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Uh, and you know, uh, Carnegi, I really think this steel is going somewhere.
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And and so we went from the era of these high-risking founders like Carnegi, like Morgan, like uh Rockefeller starting their their own company, often putting their own name on it, which feeds into what we're going to talk about a little later about your novel and reputation being currency.
23:27
Um, and and yet then we went to the the uh I guess we'd call it the Ducker Peter Ducker model of professional management.
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And over that short period of time, the attitude changed to where they actually called founders of companies raiders.
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And so there there can be a lot of, you know, the the way that society looks at this, the Overton window, right, can can shift really quickly.
24:03
But so we need the new structures.
24:03
How would you propose some and then let's take them?
24:10
How are we going to get them through Congress and with the president's signature on them?
24:15
Yeah, that's what I'm working on uh with my book.
24:21
I recently reached out to every um organization that's working on equity ownership and I asked them if you could change the law in one way that would make employee ownership more common, what would you do?
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Um and I'm compiling them into a into a print pamphlet that I'm going to share with my subscribers.
24:41
But um the idea is like if everybody contributed all these ideas, what would an employee equity act look like?
24:46
What would the ideal one be?
24:48
Um and we have we have pushed some ideas forward.
24:52
Um but they just they haven't reached the top and honestly I don't think they will currently.
25:00
Um so we might have to wait for a next president or something.
25:03
But the the the great thing about this is that this doesn't require the top to do.
25:11
Um any company could do this at their own company.
25:15
And this is why I'm really interested in the employee ownership trust because this is a lot easier.
25:21
Doesn't have the regulatory hurdles of of an ESOP.
25:23
Um but you just you you essentially say, "I'm going to set up my company so that 30% of it is owned by an employeeowned trust."
25:33
Um and every year we look at the the what we did.
25:36
We we allocate this much money as going back into the business. Here are our profits.
25:40
Um those profits will be split between employees in the amount that based on their salary um with this trust.
25:49
So they just they're just picking amount an amount each year that is comfortable to share with employees and every year they do it.
25:54
Now it's not as ideal because these employees don't earn equity in the company.
25:58
They're essentially getting profit sharing.
26:00
But the bonus is that any any company can do this super easily if you're just like an LLC or or any structure.
26:07
Um, and I think this is really where we start.
26:09
Um, I think that it's going to start at individual companies saying, "Okay, we want to we're going to do something different with employee equity."
26:16
Um, and I think it starts at states.
26:18
Um, Colorado has a governor that's really been backing employee ownership and he like founded two companies and made them both employee owned.
26:27
um and is now pushing forward all these bills in in Colorado that make it so much easier for you to start an employee owned business.
26:34
Um and so I think that this is like something we can do locally and we expand it from here.
26:42
Um as I always say with Silicon Valley, Silicon Valley and their stock equity programs started with one company Fairchild Semiconductor in the 1950s.
26:54
Um, and um, you know, across the ocean in Mond Dragon, Spain, one company started in the 1950s the exact same way.
27:02
It was a bunch of guys didn't like their boss. Same thing.
27:04
Traderous group uh, went and started their own company instead.
27:08
Only the difference was um, in Silicon Valley, these the Trader 8 needed money for their company.
27:13
So, they go to a wealthy air to get that money.
27:17
Um, in M Dragon, Spain, there is no wealthy air they can go to.
27:19
So they ask for members of their church and 118 community members all pull their money together so they can start this business.
27:28
business. Um and the difference is that uh 75 years later, Silicon Valley created this like employee equity program where the f or the founders and the the investors are the ones with all the capital and still to this day in
27:42
Mandreon Spain we have this you know 70,500 employee company earning 11 billion in euro every year where everybody in the community is the owners of the company um not just the not just investors in fact there are no investors
27:57
um and so I think that we can create uh within one if we think about it that way like one company created today could create the entire new model for capitalism 75 years into the future then what companies should we create today I
28:11
think that's the the challenge for every founder today >> so but you lose there that that spectacular advantage that you mentioned earlier with the tax-free sale to employees and it it does sound a little bit more like a co-op structure. If If you're >> Yeah.
28:31
If you are here in New York, uh you understand that co-ops have a lot of benefits, but they also have a lot a lot of downsides.
28:40
So much so that they that the real estate market in New York City changed to mostly being condo as opposed to co-op.
28:52
And I wonder if people hearing that version of it is like, "Oh, so you're asking me to be uh an effective altruist philanthropist."
29:02
How how do you how do you answer that? >> I mean, no.
29:04
And in the US, it honestly doesn't even make sense to be a cooperative if you have like less than 30 or unless you have less than 30 people.
29:12
It's kind of a small business thing, but that that's because of the way the regulatory structures work in the US.
29:17
it's they're much more widespread in Europe.
29:19
Um, and that's because they're like baked in.
29:22
There's a lot of large companies that are co-ops in Europe.
29:26
Um, but it's that's not true in the US and it won't be true.
29:28
Um, so that's why I kind of think the employee ownership founders selling to employees model is probably more realistic.
29:36
Um you're right that it requires altruism right now.
29:41
But my hope is that um as we can kind of if we can create more companies that do it, then we can create more tax incentives for more companies to do it.
29:50
Um I mean you have to imagine even the labor act when the the US was like okay now we're going to have a 40-hour work week.
29:56
Um it they could they are there were already companies doing that.
30:01
Kellogg, Ford, they were like the outliers who were pioneering this model and then the government was able to say, "Okay, it works.
30:08
So, we're going to do it uh nationwide."
30:09
So, I think if we just have a few case studies of companies doing this um and creating unique equity structures, then we can make this the norm and easily legislate it.
30:23
So, so Ford is an interesting example because Henry Ford himself, if you've read anything about him, was a fairly despicable human being, right?
30:33
>> And yet he started the $5 uh pay, which was way above what his contemporaries were paying at the time.
30:40
But when pressed on it, he basically said, "Well, I did it so that they could afford the cars I'm making." >> Yeah.
30:48
So he did it for a selfish reason which Adam Smith would smile and nod.
30:50
Oh yeah, that that makes a lot of sense.
30:53
So So sometimes these these universal goods like what Ford did by paying his employees much more, the 40-hour work week, etc.
31:05
But then he also had a lot of really creepy things that he did.
31:09
like I don't know how familiar you are with his history, but he had morality police essentially uh who could enter the home of any Ford employee to make sure that they were a true Ford man because back in those days it was the man.
31:32
>> Uh women women weren't widely accepted in the workplace.
31:34
Um, but the it seems to me that what are your ideas about and right like the the idea of restructuring?
31:47
I particularly like the ability of selling it to the employees with no tax. To me, that's brilliant.
31:54
I think you actually get some movement there if if that if that would happen.
32:03
But like let's create new I'm going to create you I'm dubbing you just for today the ownership zar in the United States. Okay.
32:09
What are what are your three policies that you're going to decree because you're a ZAR. You get to decree them.
32:17
What what three policies you're going to decree?
32:22
>> Um this is hard because I'm in the middle of writing this book right now.
32:26
So, I don't I I can tell you I'm going to have a way different answer in a couple of, you know, years as I'm researching this.
32:32
Um, I think >> Excuse me, but I That's great.
32:35
That's great because you're you're you're doing what a true entrepreneur does. You pivot.
32:41
When new information comes, you change your methodology.
32:43
So all of our listeners and viewers, remember we're in media res here and she might change these ideas a lot when she's done, but just today let's let's give let's give our audience three. >> Okay.
33:00
Um yeah, I think I would do the the tax-free sale to employees.
33:03
I would change the structure so that um esops are not as retirement accounts and can come in a while a wide variety of stock options.
33:15
Um I um I'm interested in but I need to explore this more.
33:20
Um one of the reasons why so many co-ops are created in Europe is that some countries like Italy have uh employees get first right of refusal which I think is interesting.
33:29
Um so you're like you you have to at least say to your employees would you rather buy the company before you before you sell it to somebody else.
33:37
Um I don't know if that I don't know how well that works.
33:40
I'd have to do more research on it.
33:40
Um but um yeah and I think um honestly I think those two are probably my biggest ones. Um, I What? >> No, please.
33:57
>> I think um I'm interested in some kind of crazier ideas too, like um like you know, you always hear about the concept of like a fully automated company that is taxed and then distributes a UBI.
34:12
Um well, kind of in that vein, you could theoretically have companies that are owned by a lot of people um but they barely work at the company because the company doesn't need much to run.
34:29
So I think that there's some kind of interesting models there that you could explore.
34:34
Um one of the things you mentioned that um like Ford wasn't operating out of altruism.
34:41
Well, I think that's true.
34:44
That that is true for employee owned companies today.
34:46
We know that employees are way more engaged at employee owned companies.
34:50
Um, they're like very active in strategy.
34:52
They like are work for like they they'll work long hours sometimes.
34:57
Um, and I think we're we're overall just seeing this kind of apathy with with work where you kind of have like sure these really driven founders and people at the top who are like, "Yeah, we're going to change the world."
35:09
And then you have like these employees who are like quiet quitting and are like like just sitting on meetings all day and like not very engaged in their work.
35:17
Well, if you want to engage the whole workforce, then give everybody the carrot, not just the people at the top, and then they'll be engaged.
35:25
Um because they stand to benefit from it.
35:27
So, I don't think this is like a pure altruism play.
35:28
um we just need more models uh that employees can or that companies can enact and it would be good for everyone um to get everyone involved in making the company great.
35:42
So um isn't the argument there though that there the distribution of risk takers is not a normal distribution right it's not basian uh if you obviously know the traditional basian uh distribution charts where they're very neat and tidy and you know you've got 63 and a half% right in that middle one standard deviation from the median.
36:14
Whereas if you look at a risk appetite distribution, they skew way different than uh traditional uh uh normal distributions.
36:27
And and aren't you sometimes by the way just to answer that question maybe 10% of the population are aggressive risk risk seeking or what we in finance would call go long volatility.
36:41
Um most people are riskaverse and the that underlying thing has not changed very much even as we kind of starting in the 80s really began celebrating the entrepreneurs trader estate made everyone else think oh I can start my own company too which I think is a great thing um but the the I've my own experiences for example I in several of my companies offered uh employees a choice.
37:11
I can either pay you X in cash or I can give you X% of equity but your cash goes uh payment goes down because obviously I I believe the value of the equity is really high because I founded the company and guess how many went for the mixture of cash and equity verse cash alone. Not many. Most went with cash. How do you solve that?
37:46
>> I mean, I kind of think I there's two things.
37:49
Sure, some people are risk adverse and some people are risktakers, but companies need both of those things.
37:55
Um, and also the people that are the founders of companies, there's been so many studies that show that the number one thing that they all have in common is they're wealthier than the average population.
38:06
I mean most of most startup capital goes to people coming out of Stanford.
38:12
Um so I think that this is there's it makes sense why there are founders coming out of Stanford who are willing to take on a bunch of risk capital and there are employees further down at your company would who would rather take salary.
38:25
Um I think that that makes sense. >> Yeah.
38:31
Uh but maybe I'm an outlier here and and I certainly came from a very privileged background, but I did go broke uh when I was uh put throwing everything I had into my first company and literally I went broke and was borrowing borrowing money and putting things on credit cards. It worked out for me.
38:57
But like even people who come from a privileged or wealthy background are still going to face the vicissitudes of the marketplace. >> For sure. But it's for sure.
39:09
But it's it's not as scary.
39:11
Um, I think I think for I think I would imagine that after you went broke, you were able to either find a job or or start another company.
39:26
>> Actually, I made the company.
39:26
I I I sweet talked my friends and family and everyone else into making me small loans uh and continued.
39:35
So, I made that company a success actually.
39:38
So >> I had a ton of people, my father especially, telling me that I ought to get a traditional job suited to my talents and attributes.
39:52
I got very angry with him for that.
39:56
And and and I also just kind of think bringing that up, it's like the founder personality is very different.
40:02
It's a very very different profile than your, you know, your your average person.
40:08
And and so I wonder I agree with you by the way that um you know you're going to need more risk averse people working at a company if it's a success. Sure.
40:19
But like how how do we get that mix of the crazy person i. e.
40:28
me who who is willing to like have his wife look at him.
40:39
She my my wife when all of this was happening uh she was she's very riskaverse by the way. Talk about a mismatch.
40:48
Uh but but as things started working out, she she she came in and told me, "We had a favorite cartoonist, Alif Bond, and uh he used to be a political cartoonist for the Washington Post."
41:00
And she goes, "When when we did ultimately succeed with the company, she came in and said, "What you owe me is an olifant individualized cartoon for us, and what it's going to show is us on a raft.
41:18
In the background are these horrible rapids and waterfalls.
41:20
I will be spled out on the raft and you will be sitting there with a big smile on your face."
41:30
So, which I thought was really funny, but like how do you how do you sort for temperament?
41:37
>> I think okay, let's think this through together.
41:40
But my my perception is that risktakers would do it even without the carrot.
41:49
I don't I don't think there are many who are like, I'm only doing this because I have the chance that I might earn $200 million or whatever.
41:56
I think um and we have experience of of seeing that through all of US history since World War II where plenty of people still took risks and did crazy things even though there was no there was no opportunity for future risks or future riches.
42:11
Um like in the 1950s through 1970s like the the riches available to you were much less um and um and people still took risks.
42:20
Um I'm the huge risk taker in my relationship.
42:22
Um, I'm constantly saying things to my husband like, "Just quit your job and let's go move to Europe. It doesn't matter.
42:28
We don't need like we don't need much. We'll just go."
42:31
Um, I'm not doing that because like I might get rich one day.
42:35
I'm just doing it because I like taking risks and I think it's fun and I want to take on new challenges.
42:39
Um, and I really do believe that that's true for a lot of the people that are startup founders today.
42:45
They're like motivated because they want to create something and they want to build something and they want to make something really big and cool.
42:51
And I don't I don't think that um I don't think if they make a little bit less money then they're not going to be interested in doing it and they'll just be like no I'll just get a day job.
43:02
>> But your husband still works in his job doesn't he?
43:05
>> You need the non-risk in a relationship.
43:09
I did convince him to quit his job.
43:09
We did spend the last 18 months traveling around the world.
43:13
Um but he only did it because he has a 18-month non-compete in his industry and he had another job lined up.
43:20
So he was like, "Okay, >> the garden the garden the garden leaf clause th this has been this has been this idea has really intrigued me for a very long time.
43:33
Um I I think that the benefits of an owner mentality over a employee mentality are vast.
43:41
So, let's let's stipulate uh and I'm sure that a lot of our listeners and viewers are going to say you're wrong, Jim, but that's fine.
43:51
Um, so but but I keep coming down.
43:54
So, I'm in favor of the strategy >> of getting more people to be owners as opposed to employees.
44:05
But what I where I get bedeled, if you will, is in the details.
44:13
The devil is in the details. >> Yeah. >> Yeah.
44:16
>> And and so I think that the uh what I loved about your ideas are the you put a financial incentive in place that allowed for people who maybe aren't altruistic at all >> uh to be like >> I can do that.
44:38
So I'm a big proponent of the rational side of this like one one of my and it's only intensified for me because I think that the cognitive chasm that those who use and understand AI and those who do not use nor understand nor want to understand AI is going to you think we're have wealth inequality now Wait until that kicks in. >> Yeah.
45:12
>> And so like I'm open to like throwing everything against the wall, right?
45:15
Like >> UBI, universal basic income.
45:18
A lot of the empirical research shows that it does not work.
45:25
>> And yet I'm I'm willing to say, okay, well, let's try it anyway.
45:28
Uh uh and you know because one of the things that really does grab me is this is a different situation because this group of people includes a probably a pretty big group who through no fault of their own. That's key.
45:49
Through no fault of their own are just like not going to get it.
45:57
they're not going to see all of the changes.
45:58
And like since 2018, I've been on this theme of the great reshuffle of like the innovations of AI and and connectivity and everything else are literally going to rewrite playbooks in every industry in my opinion. >> Yeah.
46:15
So actually um what is AI when when when you put your goal to AI and ask it to help you design a model that would get you where you want to go?
46:27
Do you are you seeing anything good?
46:33
I mean, this is where I really think we have we have the opportunity to create the Jetson's future and I with AI.
46:38
And that's why it's so frustrating to me to see um us not take these routes because what does George Jetson do?
46:47
He he flips switches and stuff, but it's only nine hours a week.
46:51
Um and and I think that um and actually the the article I'm writing for you right now um is is about that we're kind of we already sort of created a UBI with uh salary jobs um because a lot of people I would say are not working 40hour work weeks and yet they have this good paycheck and yet the company still keeps turning on or you know keeps going and doing well.
47:15
Um, and I don't you can say, "Oh, look at this. This is bureaucracy. Oh, all the fluff. All the fluff.
47:21
All the the Jobs, whatever."
47:23
Um, but you could also look at it and say, "Our these companies are funding all these people to have side hustles that are other things that are also important for society um that they wouldn't be able to do if they didn't have this well-paying job with uh plenty of room and flexibility to knock their work out before noon and still have time to, you know, start this other startup on the side.
47:43
um we're creating parallel economies even within our current uh 40-hour work week.
47:47
Um and whether I I don't I don't necessarily think that's the ideal, but it could be the ideal that we're all owners of the companies and it's not a salary we're giving, but dividends from the company and it's still in our interest to make the company successful and for it to be really doing well.
48:05
And if we can do that in 40 hours or 30 hours or 20 hours, doesn't matter.
48:10
But like we are, you know, earning from the company's success.
48:14
So it makes sense that we work hard for it and do a good job at it even if we don't do it you know do it as long uh as many hours in the work week.
48:21
So I think that there there are pathways where we all own the the means of production um without you know even as we fully automate.
48:33
But the challenge is can we actually can we actually get there or will the people who own AI right now just own those companies and and we'll none of us will work for them and we'll get any money.
48:45
and we'll get any money. So you use the term that I always bump into own the means of production good old Karl Marx and as a theory actually as a theory if you actually read his dascapal it's not even a very good theory but like theory verse practice right so wherever there was so-called proletariat revolutions we all know how those societies look I
49:18
mean the the the the the simple the simple thing that you can refer to is when they have to build walls to keep their citizens in their glorious country that's probably a big problem and so I've always kind of looked for this third way um of of an ownership society which I really very much believe in right and I think it should be broad and I think the the the more of that that's
49:48
why I'm so intrigued by your ideas because I want to see every idea >> but but but human nature you know I people will say like is there any edge left in public markets to me and and my answer almost always is you know markets change zepptoc by zepptocond human nature barely budges millennia by millennia arbitrageing human nature is the last sustainable edge
50:16
and and human nature when we look at the experiments of the idea and maybe it's unfair of me to to just use Marxism here as the example but but honestly how do we maintain a free secular pluralistic society you know kind of the humanist goals that you and I share how do we maintain that kind of society and then also turn it in to a much more broadly ownership society. Now, we've sketched
50:50
Now, we've sketched some good ideas.
50:51
I think uh you know the the the tax uh preference, that's a great idea in my opinion.
50:57
Getting past this idea where each child born in the United States gets that portfolio at birth. I love that idea.
51:06
um and and then the others that that you've highlighted here.
51:12
But we also have to design this for human nature.
51:19
>> Okay, let me All right, you're going to you're going to force me to go into my utopian side.
51:26
So, I don't >> I knew I'd get you there.
51:29
>> I don't think I think very few people and only like very fringe people would argue for like pure Marxism today or even pure socialism.
51:35
Uh, I think I am a huge fan of old socialist novels.
51:39
I have a ton of them in my library.
51:42
Um, you can see I have like a full all they're like all utopian novels and a lot >> Edward Betham.
51:50
What was Edward >> Bellamy Bellamy Bellamy >> Morris Charlotte Pickhams Gilman.
51:54
I love the socialist utopias.
51:57
Um, I don't think anybody like very few people would say that's what we should do today.
52:02
We've we've debunked the pure idea that the utopians had back then.
52:06
I think it was a great idea to have back then because uh industrialization was not working for the common man and everyone was trying to come up with solutions for that and that was one of the solutions.
52:16
Oh, give give control to the state just like just like we join the military today.
52:19
We'll join the the economy the whole the whole it seemed like a great idea, you know.
52:25
Um we learned that was not a great idea.
52:27
We saw that with Soviet Union.
52:27
um and everywhere that it was ever tried was bad.
52:32
Um but we were like, "Okay, well, we still want to solve this problem."
52:36
Um and you know, we saw like the Nordic countries be like, "Okay, well, we'll still, you know, tax oil and and gas and we'll still use that to provide social services for people that live here, but we're we're still going to have a private privately owned economy."
52:51
Um, and we saw the US be like, "Okay, we'll pass the the labor act and we'll raise the minimum wage and we'll have a 40-hour work week and that will like help everybody to benefit from this economy."
53:03
So, we we tried um different variations to get to the same goal.
53:06
And I think now where we need to come up with new new versions, new utopian visions.
53:13
We don't go back to Marxism.
53:13
We don't go back to socialism.
53:15
don't go back to socialism. we say okay based on what we have now um like in my pure purest utopian sense I would say that I live in the state of Utah um I happen to think that all US states should be independent um have their and be able to tax their own economies um so let's just imagine in this in this
53:35
circumstance that the United States of America is a bunch of the states are autonomous they're still part of the United States but they have full control over taxation so my state of Utah would which has one of the eighth richest economies in the United States, would suddenly instead of getting 10% of its GDP in taxes every year, maybe get 20%. Or maybe 30%. And it could do a lot of Or maybe 30%.
53:57
And it could do a lot of things with that.
53:59
Um, imagine everybody at birth gets access to exactly what you're saying, baby bonds.
54:04
Uh, we all get access to the Utah stock market the second we're born.
54:09
We have a little index fund um of all the c of the companies based here.
54:13
Um, if I grow up and I have a lot of money in that account, I can use it to start my own business and I can grow it and and nurture it and eventually I can sell it to some of my employees.
54:23
If I eventually want to go public, then I go public to the state of Utah and maybe there as a a tax incentive.
54:31
Um, I get additional tax incentives if 10% of my company at the time that I go public goes to all Utons.
54:40
um they get access to that in their little index funds um immediately and and automatically.
54:44
Um I think there are ways that we can take the companies that we have now and by exiting to founders um by creating an IPO where like more people benefit from it, not just the top who's scooping up all of the investments.
54:59
Um I think we can I think we can create something within our existing capitalist structure that benefits more people. That's what I'm saying.
55:09
So that was the way the United States was like literally originally formed. >> Yeah.
55:16
>> A con a confederation of fairly independent what that's why every state has its own constitution.
55:22
Um and it w and obviously it was a huge fight among the founders.
55:27
You had Hamilton who wanted to federalize everything and you had Jefferson who wanted everything to be at the state level.
55:36
Um and and then you know historical conditions let the federalists win.
55:42
Uh but couldn't we also look at that as like current countries today?
55:48
For example, um on a global level, that's kind of what we have if we had free immigration, right?
55:56
So it wasn't limited by all of the uh roadblocks and everything else that uh people are throwing up.
56:03
back to you have to build a wall to keep your citizens in, right?
56:08
Um, basically everyone would move to America.
56:14
>> And there's actually a fascinating map about this that shows where everybody would move.
56:19
And I love it because it's like it's like a very high percentage of Mexico would move to America, but a very high percentage of America moved to Canada and Europe.
56:28
And like a very and like the like the migration patterns are really are really fascinating.
56:33
you're like, "Oh, the whole world would change if borders were open."
56:38
>> I would love to see that because uh all of the things I've seen have basically shown uh you know, people if allowed to vote with their feet. >> Yeah.
56:49
>> At least all of the stuff that I've reviewed, maybe this is something that I didn't find.
56:52
uh but showed that a vast majority of the world's population, especially the clever and talented part of that population would would move to where they had the greatest opportunity set.
57:06
And again, like that that makes total sense.
57:09
And so what one of the things that I keep searching for is a a model that doesn't build morality into it, right?
57:24
Like because there's always this idea that the difference between people who don't understand the difference between is and ought, right?
57:41
ought well ought gives you all of those utopias, right? It ought to be this way.
57:48
It ought to and like yeah, have you studied human nature? Right?
57:51
Like I I remember and in fact I looked it up because I hadn't seen the quote recently, but I I'm sure you're familiar with Will Durant >> the experience. Yeah. Okay.
58:04
So he and his wife Ariel wrote a great series, the story of civilization.
58:12
>> Um, and which I love and we're actually going to experime turning it into a podcast and we're experimenting with should it be AI because it's very dense material and breaking it down might be difficult for a host.
58:25
Um but Wild Durant after so he and his wife Ariel really well known for like maybe the best uh observer historians etc.
58:36
and and he wrote they wrote a very com compact book called the lessons of history and and here is his quote and I'm I didn't jot it down word for word but he he essentially says history reports that people and I'm changing that because he said men uh and so I'm I'm trying to do my part here because uh the the world has changed even said this right like back then he was right it was 90% men in the workforce force and very few women.
59:10
I think our far more equitable distribution today is is progress.
59:12
So he says history reports that people who can manage people can manage only two things whereas people who can manage money manage all.
59:27
What do you think of that quote?
59:30
>> I guess it really depends on how you interpret it.
59:33
>> How would you interpret it?
59:35
Um, he's basically saying if you are a good money manager, then you're good at everything.
59:47
I take it a different way.
59:47
I I I I substitute the term symbol manipulators.
59:53
Like one of the biggest changes in the economy in my opinion has been if you look at uh the Forbes rich list, right, which I think started in 1982.
1:00:08
In 1982, if you looked at that list, guess who was on it?
1:00:10
Almost all people who dealt in the world of atoms, right?
1:00:17
So steel, oil, real estate. Okay?
1:00:17
So those people but the majority of the list were heirs.
1:00:27
There was this great family fortune and they became heirs and and the world was pretty stratified and movement between social groups even in so-called freedom loving America was not that great.
1:00:43
Look at the list today and it's almost exclusively entrepreneurs.
1:00:49
So that underlines your point, right?
1:00:52
Uh but what changed was the people who were getting rich are what I call symbol manipulators. What do I mean by that?
1:01:01
Like I'm a symbol manipulator.
1:01:04
It like I didn't produce anything.
1:01:08
I didn't make cars or widgets or any of those things.
1:01:12
I I essentially manipulated symbols. What? What?
1:01:16
What are all those tech multi-billionaires?
1:01:22
They're symbol manipulators.
1:01:22
What are the other people getting super rich in finance and entertainment? Symbol manipulators.
1:01:30
So, we've we've moved to a more abstracted economy, I think.
1:01:36
And I wonder like first off, let me ask for your opinion.
1:01:44
Am I right or am I just full of with that whole symbol manipulator thing? >> Um, yeah.
1:01:49
I think that makes sense.
1:01:49
I think like whether that me whether being a symbol manipulator means that you are far more deserving of of like your wealth than everybody else or that you're therefore good at everything a bunch of other things.
1:02:04
I don't know that I wouldn't agree with that. >> Okay.
1:02:07
So, you used a you used an interesting and loaded word there. Deserving.
1:02:13
Yeah, I shouldn't have used that word.
1:02:17
But I think that I I think that the the problem with the word deserving is that um what you can't possibly answer what somebody is deser what somebody deserves.
1:02:34
You can't argue what's fair.
1:02:36
You can't you can't say what they're worth.
1:02:39
the the best the best thing you can say is like how much value did they contribute to a company?
1:02:43
That's like maybe the best thing you could say.
1:02:45
And did they contribute a thousand times more to the company's value than the next person?
1:02:51
Then maybe that's the best way you can determine whether that that salary is worthwhile.
1:02:55
But even then, you have to consider the societal effects.
1:03:00
Let's say the person who earns a thousand times the traditional employee um really does contribute a thousand times more to the company's value than the the next person a 1000x down um on the on the income.
1:03:14
Then could they do it without that person or without all the other people that are a thousand times down? No, they couldn't.
1:03:21
Um, and then you have to say, okay, well, uh, could they do it if that person at the bottom wasn't rich enough to buy their product or contribute in the economy in a way that they can buy things and keep our market going around?
1:03:34
Well, no, they probably couldn't.
1:03:36
Um so you you have to look at you can the best if the best thing you can say is how much value does a person actually contribute to the economy or to the to a company's value then you still have to say but they can there are societal effects to that that would make them not worth that um because there that economy wouldn't exist or the the business wouldn't be able to exist to cater to it.
1:04:00
Uh so it's it's a hard question to decide what what people are worth.
1:04:05
Very very hard >> and a very very hard question which is why you are an Oshi grantee.
1:04:10
We are trying to find I'm serious. >> That's the answer. >> No but that's fine.
1:04:17
We we are trying to encourage thinkers like you to grab onto this problem because I think what keeps me up at night is exactly what you just said. a moment ago.
1:04:31
What happens when that person who for whatever reason has a thousand times more?
1:04:38
I I would argue that they they do primarily not because if you again back to the Forbes list, it's not inheritors on that list anymore. It's all the innovators.
1:04:49
It's all the but but then like I'm I'm very guilty because my entire asset management strategy was very algorithmic and empirically derived and so I'm always building algorithms in my head and as I was listening to you I was thinking well okay now we're back to risktaking we're we're back to things that are very difficult to quantify. >> Yeah.
1:05:18
And so I think that your your ultimate answer there, hey, it's really hard to determine in a top down way, who's worth what.
1:05:27
That's why I'm in favor of open and free markets where all of that stuff works its way out, right?
1:05:37
like Kenneth Stanley who's an upcoming guest on the book uh or on the podcast wrote an incredible book called Why Greatness Can't Be Planned and essentially and I'm sure he will correct me when we're at discussion but he essentially says that you know economies are complex adaptive systems and in complex adaptive systems top-down mandates very rarely work.
1:06:02
All emergence of good new ideas comes from below. Right?
1:06:08
Thus why you're an Oshody grantee.
1:06:11
I want as many smart minds working on this problem as possible because out of that will come hopefully something that we can actually test. >> Yeah.
1:06:24
Because because one of my worries is are we going into a world where that person that thousand time person doesn't hire the person they just have AI workflows. >> Exactly. Exactly.
1:06:40
>> And so this is this is a problem that is very easy if you think about it to see the second and third order effects on society.
1:06:51
And in my opinion, if we just keep going the way we're going, they're not going to be good effects. >> Right. >> Exactly.
1:07:00
>> And so that is why I am very much in favor of all of the arguments, the research, etc. being done.
1:07:07
But again, it does kind of bum me out because coming back into it is that you know, godamn human nature, right? like hierarchies.
1:07:21
Hierarchies are a great example.
1:07:21
It's not just humans that operate in hierarchies.
1:07:25
It's every living organism.
1:07:29
Essentially, even spores have hierarchies.
1:07:32
hierarchies. and and and so I always believed well no no I've managed to stand outside the hierarchy and you know I'm I'm person X and until Will store and some others convinced me you're you're only fooling yourself here Jim you're you are signaling all of the time until I finally had to admit godamn it
1:07:57
they're right and if you haven't read Will Store's book on status I would highly recommend commend it because it's another it's a non-cash thing that he establishes and Rob Henderson is another great author on this idea that like that's more important to us than money and and so I'm just I'm totally in favor
1:08:26
of trying every throwing everything we can against the wall and let let me again underline I love the idea idea of getting a tax benefit because there's no moral thing hovering up here saying you should you should it's just like why wouldn't you you know and I think one I think one interesting way you could solve the UBI
1:08:50
problems that they currently have right now it's just like a this just distributed to everybody in the same amount or whatever you could say and it's allocated to you based on how much you contribute to the system you know like you earn more if you contribute more and you can earn less if you contribute less. I
1:09:05
can earn less if you contribute less. I think there's opportunity to and Edward Bellamy uh he the way he solves like the socialist problem back then was he through status he was like giving people different statuses for different jobs that they took to like encourage them to
1:09:21
work the more ambitious uh jobs there was like ribbons that everybody got and they like wore them on their clothes depending on like how distinguished they were because they have certain jobs or whatever and like that in his and everybody was like you know fighting to be those do those more prestigious projects and and take those on. I think I think you're right.
1:09:39
you're right. like I don't think I I whether or not um you know whether whether a company distributes 200,000 to the founders and 200,000 to the employees or the founder gets um you know 20 million and the f and the rest of the company gets 1 million like I
1:10:00
don't know the right answer of like ratio of of people but I think you can definitely stand to spread it out a little bit more and have everybody contributing um and and make it a little, you know, better somehow through through, you know, how hard you work and through status. And I don't think people
1:10:15
And I don't think people are going to I don't think if you change the the ratio of top to bottom that people are going to just stop doing innovative things or they're going to stop, you know, trying to get status or they're going to stop trying to do crazy crazy risk-taking things.
1:10:30
Um, it just helps other people to be able to do it, too.
1:10:37
So yeah, I think that um I I I think that we need to like do everything we can to work on every conceivable solution and then we ought to try them >> and like that that was one of the motivations for the fellowship and grantee program.
1:10:54
Uh I feel but again I I I don't want to impose this on anyone else.
1:11:02
I'm I'm I believe that in a world uh like the one we live in, I can see everyone around the world can apply and I can see all of the talent that got missed before interconnectivity and before the ability to um you know find you to find our other grantees and and fellows.
1:11:29
And so in in my instance, it's kind of like, hey, if I have the opportunity to give and find, uh, pe bright people like yourself and and give them some funding to work on, I it's almost required it, right?
1:11:43
And and while I wish that there were other people in my circumstances who were doing the same, >> I I do have this reflexive anti- athoritarian gene that that that immediately does this to me like, no, no, you can't you can't inflict your ideas on other people.
1:12:09
the only way you can maybe get people to think, hey, that that looks like a good idea is to do them >> and and then you get into that whole status and and everything.
1:12:21
>> Um, which kind of leads me to we're going to switch gears here and talk a little bit about obscurity because in obscurity, reputation is currency.
1:12:30
Tell tell me again like uh I'm a golden retriever.
1:12:36
Just tell me the basic uh outline for Obscurity, >> the plot of my novel. >> Yeah. Yeah. >> Yeah. I wrote a Gothic novel.
1:12:43
Um and I was very interested in the Gothic novels of France and Europe and the the 1700s and I was reading them all like crazy.
1:12:56
Um, and what I think is so interesting about those that period is they were wrestling with big ideas like Catholicism as morality and um and the government the government as as you know these kind of structures that they're that are causing poverty in Europe back then.
1:13:15
Um, you know, you just see these the Slay Mezer Rob, you see the Count of Monte Cristo, you see Dracula, you've got these kind of um, uh, Charles Dickens and the the poverty of of Oliver and A Tale of Two Cities and kind of all these all these writers like sort of rebelling against their their times with these kind of like dark tales.
1:13:36
You have Frankenstein, which is exploring, you know, human human nature to your point.
1:13:43
Um and so um I wanted to explore my own Gothic novel.
1:13:47
I'm right I was I completed my graduate studies in marology which is the study of the Virgin Mary.
1:13:53
Um and I wanted to write a modern Gothic from the American perspective.
1:13:59
perspective. So, it takes place in 1700s New Orleans, and it's uh about this widow who arrives on the scene um uh from fresh off the convents in in France and is um looked upon by the town as this like mysterious almost Dracula like
1:14:17
figure where they're like all these bad things start happening in the town and they're trying to attribute it to her and and um we kind of see her from the town's perspective the whole time and at the same time there are these like reflection from her. The the whole kind
1:14:29
The the whole kind of um morality centers on this one portrait of the Virgin Mary weeping and she is stares at it and brought it over from France and kind of wonders about who she is to herself, not just not just the town and um whether she is the cause for all this evil that's happening.
1:14:46
Um, so, so yeah, it was my own my own interpretation of the Gothic novels and written for modern times, I guess, and still written like an over.
1:14:58
>> See, I I personally think that fiction can really inform >> absolutely >> the general consensus reality.
1:15:04
I could really shake it up. >> Yeah.
1:15:08
Uh um that's why I'm interested in in bringing up your your Gothic novel, but also the idea that reputation is the current is like the currency, right?
1:15:16
And so like what would you how would you respond to this whole idea, you know, if reputation ends in myth, why fight the rumors, right?
1:15:30
Well, what in does good mythmaking look like for institutions?
1:15:41
It is interesting because I do think a lot of our modern times and even the struggles we're facing relate to just this huge predominance of dystopian sci-fi novels because we create these dystopian sci-fi novels that are just so have been on all the rage for like decades now.
1:16:00
and and all these tech founders are like, "Cool, I want to build like the car from that or like the the AI from that or the we're pulling out all these technologies from these sci-fi novels and being like, we're going to build them."
1:16:12
Um, and and the those technologies go horribly wrong in the in the books.
1:16:18
Um, so that's why I'm like, "Okay, I think we need some better sci-fi here."
1:16:23
I mean, remember when Jules Burn wrote 20,000 Lings Under the Sea and the submarine was seen as this like kind of utopian project and then we needed it. It was great.
1:16:31
It was scientific advancement.
1:16:33
Um, I feel like we need more like that that are like, okay, well, what if it things go right and how would we design things in in that world as opposed to like it's it's not hard for you to figure out like, oh, to create a bad world, why don't we create mind control or like, you know, like mass surveillance.
1:16:50
Why don't we that's that's a great way to get a dystopian world.
1:16:54
Um, and I think um I I think it would be really cool to see what kind of future we would create if we had a bunch of utopian novels or better sci-fi futures we could we could think about as as options and how we get there.
1:17:09
We literally don't have any.
1:17:09
It's like they all they all end in like total control by the people that own the AI.
1:17:19
>> So So we're we're making an effort there too. >> Yeah.
1:17:23
My publishing company, Infinite Books, has a positive uh sci-fi book called White Mirror. >> Obviously. Oh, you do? Very.
1:17:33
Have you read Have you read it? >> No. It's on my list.
1:17:37
It's sitting right there. >> Okay.
1:17:39
So, what I will tell you is >> read that book because it it does exactly what you ask for.
1:17:48
>> It envisions not a utopian society. I I'm very Deutschian.
1:17:52
Are you familiar with the beginning of infinity?
1:17:54
Highly high maybe one of the best books.
1:17:57
It's way up there on my foundational book list.
1:18:03
Um and and what what he does is he builds a beautiful scaffolding for the idea that it advancement, innovation, etc.
1:18:15
does not come without problems. >> Yeah.
1:18:18
problems are always going to be with us and what what we have to hope for are better problems, right?
1:18:24
and and so you know it he looks at second third and with David Deutsch third fourth order effects of things happening and you you've got to understand that with all of this advancement are going to come vexing problems and you you it's like fire is very dangerous right and and we could be uh you know uh very much we're going to embrace face the precautionary principle here and we are going to ban fire.
1:19:00
Well, we wouldn't have a prefrontal cortex because that's how it grew out when human beings started cooking their food.
1:19:07
And so we'd still be if we didn't do it.
1:19:14
So the precautionary principle leads to stasis.
1:19:17
And by precautionary principle, meaning if there's anything that could potentially go wrong, we're gonna ban it.
1:19:24
We're g we're gonna say you can't do that.
1:19:26
That leads to a society that if not already dead will soon die.
1:19:35
>> And what you need is the idea to understand, of course, we're going to have problems, but you don't ban fire.
1:19:44
you create fire departments, fire extinguishers, fire alarms, fire warnings, all of those particular things.
1:19:53
>> And so, when you do get around, I would love to hear uh what you think of White Mirror after you get around to reading it because that's another thing I I firmly believe that everything is downstream of culture and you are absolutely right.
1:20:09
We we used to write Jules Burn.
1:20:14
The the the the whole ethos of at least America was can do like from the late 1800s through the maybe the beginning of the depression where everyone was like wait what? Yeah.
1:20:34
But I definitely think that's why I'm was so intrigued by your book uh your your Gothic novel because it does sort of seem to imply that reputa I mean like there's a real world analog here.
1:20:49
Um I don't know how much you know about Warren Buffett and I I love the guy but for very different reasons than most people love him.
1:20:59
I I love him because he's kind of a stone cold killer.
1:21:01
Uh but he's got a reputation that I call the the Warren Buffett advantage.
1:21:11
So his reputation is so good.
1:21:17
It allows him to get deals that even other highly ethical, highly principled uh investors could not get.
1:21:24
uh investors could not get. and and the one two examples uh a while back Solomon Brothers which doesn't even exist anymore was a huge uh investment bank and they were faced with a treasury um rates fixing scandal it would ruin like
1:21:44
the government does not like that and literally they were just going to shut Solomon Brothers down and Buffett called the secretary of the treasury at the uh and said, "If I become chairman of Solomon Brothers, will you let us work out this problem?" And the secretary of the treasury said,
1:22:04
And the secretary of the treasury said, "If you become the chairman, yes, we will allow that."
1:22:14
So literally, it was Warren Buffett's reputation that saved a company that literally would have been dead on arrival under any other leadership.
1:22:24
And then when you go up to the the financial crisis, it's not as noble there because Buffett got deals from the big investment banks that no other individual could get because signaling, now we're back to signaling and all those kinds of things.
1:22:40
What is the best way to have a sound currency?
1:22:46
The best way to have a sound currency is that everyone believes that the signal that there's people in charge, there's people taking uh paying very very close attention to this.
1:22:56
I was just reading about how they ended the hyperinflation during the Bimar Republic in Germany and it was they had their own Paul Boer.
1:23:05
That's how we ended inflation here.
1:23:05
Like when I was getting married in 1982 at the tender age of 22 and buying a house, do you know what my mortgage rate was? Like 16 and a half%.
1:23:20
Because we had incredible inflation.
1:23:24
Then you had Reagan with great political risk put in and said, "Kill inflation."
1:23:33
and he did causing like one of the deepest recessions that we'd had since the Great Depression.
1:23:39
But when you look at it in context, right, the same thing happened in Bimar Republic, Germany.
1:23:48
Inflation was so bad there that literally people had to wheelbarrow the old currency to buy a loaf of bread.
1:23:52
And and then the new guy came in and he's like, "That's all done.
1:23:58
Here's the way we're going to do things." And people believed him.
1:24:03
So at the bottom of everything is belief.
1:24:07
If like like currency, just the very idea of currency, it's just a belief. Yeah.
1:24:13
I don't I don't think I have any money here. Yeah, I do. Okay.
1:24:17
So, what is this thing worth?
1:24:21
I'm holding up a dollar for our listeners who are not watching. This is worth nothing. It's a piece of paper.
1:24:30
But because consensus reality believes that this is worth something, it's worth something. >> Mhm.
1:24:38
>> If you've got consensus reality suddenly says, you know what, that piece of paper that Jim has is not worth anything.
1:24:42
Uh it's not going to be worth anything.
1:24:48
>> And so at at at the bottom, I think is our belief, >> collective belief, right?
1:24:54
>> collective belief, right? So I think that there is collective consensus reality and it's formed by every sensient being on the planet what they are giving their attention to and saying yeah that makes sense right and that's
1:25:08
how you got like things like suddenly big leaps and changes in society enough people collectively believed we got to change things is that what's going on here right now with your ideas >> I mean I think it's I think it's actually a very big lack of belief overall lack of imagination. I think
1:25:28
I think that it is crazy to me that how many people how many writers are reporting on the by the minute uh political whatever that's currently happening and you're just everybody's just watching watching everything possibly bad that could possibly happen in the world being reported on in minute detail.
1:25:47
Um, and you're like, "Okay, well then how come in the 1700s we had all these thinkers publishing pamphlets on every corner for a penny with like crazy ideas?
1:25:56
Like why don't we give the whole uh, you know, why don't we give the whole economy to the government?
1:26:01
Why don't we they were coming up with crazy ideas and some didn't work.
1:26:04
But like like they were coming up with crazy ideas to solve the problems of the day like industrialization.
1:26:10
Every writer was tackling that trying to figure out the ideal and and nobody was getting it all right.
1:26:16
Like you you nobody's going to get it all right today.
1:26:18
Like I can't be like, "Oh yeah, we should definitely Utah should be its own uh country and have its own tax dollars with baby bonds and and automate fully automated and tax the entire economy is like has a UBI and like I can say all of these things. That's great.
1:26:32
It's just an idea and it's worth having the ideas."
1:26:33
Um we won't know which ones are right until we try them.
1:26:38
And it's worth trying every possible idea and having every possible idea because without them we're just like in a stuper just watching what's happening when journalists are just reporting on it.
1:26:47
we're without doing anything about it.
1:26:49
Like I think we we need our writers to be thinkers again, not journalists.
1:26:52
And this is like the very key foundation of my work.
1:26:54
Like come up with the ideas, give us something to to think about and and solve the problems. >> Bingo.
1:27:02
And that is why you are a grantee from God of the Adventures. We could not agree more.
1:27:09
What we need is we need everybody no matter how crazy they might seem to throw to what's the old metaphor be in the arena, >> right?
1:27:21
Yeah, you don't I I had a guy who worked for me once whose whose wife uh uh was Cuban and her father was a wonderful guy and um he had this great saying uh that I learned of when when he started and I'm like so you know you're taking a risk here this is a startup company why here and he quoted his father-in-law which was why cheer from the sidelines when you can play in the game. >> Yeah.
1:27:54
>> And that's what you're doing.
1:27:54
You're playing in the game and we need more players, less spectators. >> Yes. >> What? Okay.
1:28:01
So, now I'm going to really put you on the spot, but how do we how do we do that?
1:28:06
How do we get more people to to do what you're doing?
1:28:11
Like, >> I mean, that's why that's why I do what I do.
1:28:17
I do. um my newsletter I what I do is I come up with these topics like all right everybody let's solve um like what is the ideal way for companies to get funding what is the ideal um amount the ideal amount of wealth inequality we should have and how should we solve it and then I put it to a bunch of writers
1:28:36
and say hey let's all write about this topic um we'll all come up with a bunch of ideas each each person will write their own um and then we all write them for our own substacks and then We together create a p a print pamphlet of all those ideas in in one and we sell them together. Um and we profit share on
1:28:52
Um and we profit share on it so we all earn for selling it.
1:28:55
Um and you know we did one this year that was called citystate and it was seven writers exploring autonomous governance.
1:29:04
We did one this year called tariff warming and it was six writers exploring the future of our planet.
1:29:08
Um we're doing one coming up called New Republic which is for thinkers recreating Plato's Republic of creating the ideal city state.
1:29:16
Um we are doing we are we have a bunch of projects coming up that are like this but the concept is take advantage of the take advantage of people that they that they want to think and they want to think of solutions and like let's do it together. Here's the prompt.
1:29:29
Come up with some solutions and we'll all write about it.
1:29:31
We'll all share the all the ideas.
1:29:32
We'll all have very wildly different ones.
1:29:34
We're not like after a particular ideology.
1:29:36
We want to just explore all of them.
1:29:38
Um and let the readers explore all the ideas.
1:29:42
Um I think I think that's the way is we writing is how we think.
1:29:46
So let's not use our writing skills to think to report on all the problems.
1:29:51
It's used to think up with solutions.
1:29:53
Um and I'm trying to you know encourage people to do that through our community.
1:30:00
So as are we that's again why why you are a member of our uh group of fellows and grantees.
1:30:07
I love that you're doing that.
1:30:11
I think like the the more ideas the better and you mentioned Plato right?
1:30:17
Um I my view of the republic is that it turned kind of Plato into a reactionary the loss of the war with Sparta.
1:30:30
>> And and if you really read it through that lens, The Republic becomes a very reactionary book. Yeah.
1:30:41
>> And I mean, I'm not I'm not I'm not going to ask you to comment on that right now, but like the the more of that the better.
1:30:49
I completely agree with you.
1:30:51
Like if I was one of the people writing this, I'd probably write like this tome about how Plato himself was so bummed out about losing Desparta and the Athenian uh uh dethroning of itian ideas and you know all of that stuff.
1:31:09
But I think that's how you that's how synthesis works, right?
1:31:14
Because so many of us are just captives of our priors and we never really think how did we get those priors right?
1:31:24
Like a lot of our priors are and if we take a moment to truly investigate them we're like why the do did I ever believe that right?
1:31:39
But what what I'm trying to get at, and it's a vexing problem.
1:31:42
I'm trying to get at like how do you instill that kind of nature into a broader portion of the population and like what we're doing is what we can, right?
1:32:00
So we're funding people like you.
1:32:02
We're publishing books like White Beer.
1:32:04
were making movies about like for example I don't know if you saw Jason Carman's Planet but like he told me that he spent all of his fellowship money making that movie and I'm like bravo good because the more we get and I think what I am truly inspired by are young people like you and and the idea that you know what what was the quote about science advancing one funeral at a time.
1:32:38
And I think it was I think it was Max Plank. >> Yeah.
1:32:41
>> Who said that and and I I don't necessarily want the funerals, but like I am delighted to see young people like you doing what you're doing, doing what Jason did.
1:32:53
Uh and it's all over the map, right?
1:32:57
Like we have artists, we have uh innovators, we have scientists, all of that.
1:33:02
and and just the only way you can tell is to try. >> Yeah.
1:33:08
>> And and and I think that's also the difference between an uh what I call a rational optimist and a pessimistic point of view.
1:33:16
But the challenge is like I steal man stuff and like one of the things that I had a blind spot about is pessimism is an evolutionary trait.
1:33:26
And if you think about it, makes a lot of sense. >> Yeah.
1:33:33
>> We are all descendants from the people who when they were on the savanas of Africa and they saw a bush moving didn't say, "I wonder if that's a lion." They ran the away.
1:33:49
So we are essentially all the descendants of the people who ran away.
1:33:54
And and and the way our minds and brains work is we are highly attuned to novel dangers because for most of our ancestors life that was a really good skill to have, right?
1:34:13
>> I'm not gonna I I'm not going to just assume that's the wind over there.
1:34:15
I'm going to run like hell away from it.
1:34:17
And so I I you know that's a hurdle right if that is in our base code I think one of the things that I deeply believe is that examples like you uh are are really great because they can become beacons. >> Yeah.
1:34:40
>> And then you and then you can have other people like wow I you know what I'm going to try that.
1:34:44
I I think that that's really a great idea.
1:34:46
So for founders listening today, what what is step one going back to your your uh arguments that we began our uh discussion with?
1:35:00
What's step one that they can accomplish this week towards a worker ownership exit?
1:35:07
>> Um towards a worker ownership exit.
1:35:14
Well, here's what I have to say is I would first just imagine that anything is possible.
1:35:20
The company you work at doesn't have to be structured the way that it's work at working the way that it's structured.
1:35:26
The company you founded doesn't need to be structured the way you founded it.
1:35:29
Um, I think that you you just said, um, I have to steal man myself, which I I love because, um, because that was basically what Plato was doing.
1:35:43
Plato Plato's device was using dialogues and it makes some of it's so annoying to read the Republic because you're literally you're you're like, I know what what a just city would be like.
1:35:54
It would be like if the leader was doing this and then they spend a whole chapter, a whole book talking about would that work, would that not work?
1:36:02
And at the end you're like, okay, so that wouldn't work.
1:36:04
So what should we do now?
1:36:06
And you're like, so you're the first like three quarters of the book you're like all the things that don't work that they, you know, talk their way in circles around to try to think through, but like but that's the thing that we're not doing now.
1:36:17
We're just like that won't work. That won't work. That won't work. That won't work.
1:36:20
And we're not thinking like, okay, but what will?
1:36:23
Um, and so I think everybody has to think that way about wherever they currently are and whatever they're currently doing.
1:36:29
It's like how can we create more opportunities for ownership?
1:36:33
How can we I think about this even just the context of a writer.
1:36:35
How can my work be owned by my readers and not just by me?
1:36:40
Um, because ultimately they have to like it for me to have an audience or earn a living.
1:36:46
earn a living. So I think that I think wherever you are you can first imagine that things can be different and can be anything and two then think okay if it could be anything what should it be and then three okay how do we create that um and there's so many ways you can do that I've had people contact me being like
1:37:05
your article just inspired me to like start transitioning my company towards employee ownership or your you just encouraged me to use this profit sharing platform or you just encouraged me to realize realiz that like even my um even just I can write to think like to think of solutions rather than writing journalism. I think there's so much we
1:37:22
I think there's so much we can do and um it's just imagining what we can.
1:37:28
>> L I love what you are doing and please continue doing it. Do more of it.
1:37:32
put more ideas out there because that's the only way I think like leading by example and I think uh that I applaud you heartily for leading by example here.
1:37:49
Well, if you've listened to the podcast in the past, you know that our our final question is we we are going to make you empress of the world. You we have rules.
1:38:00
You can't kill anyone and you can't impose anything in a draconian fashion.
1:38:06
You can't put anyone in a in a re-education camp alo.
1:38:11
But what you can do is we're going to hand you a magical microphone and you now have the ability to say two things into that microphone that is going that are going to incept the entire population of the world.
1:38:24
Everyone in the world are going to wake up whenever their next morning is and they're going to say, "You know what?
1:38:32
I just had two of the greatest ideas and unlike all of the other times, I'm actually going to act on these two.
1:38:39
What two things are you going to incept into the world?"
1:38:46
>> So they're so they they'll just wake up believing that whatever I like brainwash them with.
1:38:53
>> Uh you will incept them.
1:38:53
my pref my preferred term and and and they will find these ideas so compelling that they're going to be like yeah you know what I'm starting today I'm going to work on both of these ideas to make them real >> uh the first one would be solidarity so everyone's important not just you and the second one would be miller terrorism uh the world can be made better through human effort.
1:39:26
So if you first first believe that everybody is you want everybody to do well and then you second believe that you can make that happen with human effort then those two things will will make the whole world like that.
1:39:42
I love number two especially because that attitude like that was a re it it it is what serves at the core of the American contribution to philosophy and psychology which is pragmatism William James and he was like I can't believe it would took that long for people to say hey you know what we human beings we we might be able to make the world a better place.
1:40:13
>> Yeah, we could do something about it.
1:40:16
>> It's so crazy, but Millerism is my creed.
1:40:19
When I stopped being Catholic, I started being humanist.
1:40:20
And the only creed of humanism is Millerism.
1:40:22
The world is being metic through human effort.
1:40:26
If everybody just believed that.
1:40:28
>> Uh well, I I I am not traditionally uh a religious person, but it sounds like we are in the same parish.
1:40:34
Uh because I I cling to those humanistic values as well.
1:40:40
L tell everyone listening or watching where they can find all your stuff. >> Yeah.
1:40:46
Subscribe to my Substack. It's www. allesian.
1:40:48
press and join us as a writer to help us think through ideas that will make the world a better place. >> Here. Here. El.
1:40:56
This has been a great delight for me. I hope you had fun, too. >> I had the best time. Thanks.
1:41:01
That covered so many things.
1:41:03
I had no idea what to expect. It was super. >> Thank you.