Restoring Hope Through Personal Agency

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And with a one hundred and twenty night trial, you've got four months to prove it to yourself. You can get twenty seven percent off at helixleep dot com slash diary. That's helixleep dot com slash diary. There is literally no example on planet Earth of a high functioning society without big government. Noope, that's not true. Big government is sucking the life out of small businesses And Ive spent countless hours with businesses and they're like, you can't succeed in the UK. As soon as you earn anything, they'll just tax it off you. So pop off Dubai, run the business virtually and pay no tax. It's idiotic. I don't know how you can look at that and think this is a good system. No no, no I say What needs to happen is reduce the taxes and the pressure on the small businesses because everyone in this economy needs own st We need to own a house, own a business, and own shares. But not everybody can be an entrepreneur. Correct. Look, It would be wonderful if everybody owned something. But ownership starts with earning enough money so that you can save money so that you can begin to own something. So the problem is wages because most people want to be able to go to work and be treated decently. I want to earn enough money so that I can feel secure I just want to be married. have kids. own a house. that That's what I hear people And I want that for everyone. That's gone away. Houses are unaffordable. loocal jobs don't exist, teechnology has cut out all the middle men. No one's paying healthy wages. We have the most unhappy population. And if you want to fix that, you have to enact this. Well, I've seen Nick's policies implemented and I don't feel it's enough. You haven't seen all the policies so. We need people to know that the rules that we grew up with have changed and people have to learn the rules of this new economy. Yes, yes, yes, I totally agree. And if you want to get the economy back on track, the starting point is I've got a favor to ask before this episode begins. The algorithm, if you follow a show, will deliver you the best episodes from that show very prominently in your feed. So when we have our best episodes on this show, The most shared episodes, the most rated episodes, I would love you to know. And the simple way for you to know that is to hit that follow button, but also it's the simple, easy, free thing that you can do to help us make the show better. And I would be hugely grateful if you could take a minute on the app you listening to this on right now and hit that follow button. Thank you so, so so much Nick, I wantan to start with your background and your contact so I can understand your perspective and who you are. You sold a company for almost seven billion dollars. Correct and What's so fascinating about you is you Typically billionaires have a certain narrative and perspective on the world. You seem to have a very different one. I do Who are you, whereere have you come from? and what is your perspective on the world? as it relates to the subjects that you know we're going to discuss today? I was raised in a civic family, I should say. What does that mean? It means a family that takes civic responsibilities seriously But we were middle class people and my father started to work for this tiny family business that his hisis father had started manufacturing bed pillows and down comforters, which is how I got my start in business. And to make an incredibly long story short I had a very early intuition about the internet and the role that it would play in commerce. And as luck would have it, I had a friend who agreed with that proposition and his name was Jeff Bezos And so he wanted to start an e retailer. He was working in New York for a hedge fund, dating one of my closest friends. And for a variety of reasons, he ended up sending his stuff from New York to Seattle to my house and we started amazon dot com together But from that started starting other tech companies, you know, I've help run. you know, manufacturing businesses e commerce businesses, my friends and I own a bank, you know, like You know, and I think that that very broad perspective on markets began to inform an intuition Every that people are taught about economics today, that's sort of the conventional view. is a pack of lies And that if you take it seriously and enact policy on the basis of it, the only thing that can happen is that the rich will get richer and everyone else will get poooor. and you know, a signal piece of that evidence For me, sort of a thing that really sort of galvanized my interest was that I got to look at the IRS tax tables in two thousand seven, two thousand eight, which showed American income shares in the history of that And in nineteen eighty The topop one percent of Americans shared about eight and a half percent of national income In two thousand seven, that eight percent had grown to twenty two percent, as I recall. triple. Lgely as a share of national income While the bottom fifty percent of Americans, their share fell. from about eighteen percent in nineteen eighty twelve percent in about two thousand seven And what I did is I took those numbers and I stuck them in a spreadsheet and said, what happens if this trend continues for another thirty years And the answer is Revolution You know, it's just it's just arithmetic because cannot sustain a capitalist democracy if the top one percent controls forty five percent or fifty percent of income and the bottom fifty percent shares five This is not a deep political insight. This is just Math And I and I freaked out and decided that I needed to devote myself to trying to figure out why this happened And how you could how you could fix it. And so I've been writing about this and working on it since then. Why did this feel so important to you How How'd you talk about pitch folks? Even a cursory reading of history will tell you that when societies get as unequal as the societies we now live in. terrible things start to happen This leads to either a police state or a revolution. And I believe that the pitchforks are here. I think the Trump administration is the is the, you know, one of the canonical examples of a societyning beginning to tear itself apart. And I just think it's the responsibility of people with power and resources to do the right thing. Same question for you. Yeah, I grew up in Australia and as a teenager I discovered entrepreneurship. I got an entrepreneurial mentor very early on, and I did two years in a startup and it was really exciting and I loved it And I felt like I'd discovered a cheat code in life, which was entrepreneurship and starting businesses and small businesses. And then at twenty one I went off and started my own company, which was my first agency and it grew really rapidly. went from zero to a million in its first year and then ten million in year three and it was like this exciting young company with all these cool young people working there and living there, we actually kind of did. Yeah. We actually we were in a big house kind of I spend a lot of time together. Yeah, I just fell in love with entrepreneurship and small business and family business and all of those kind of things. And I also fifteen years ago started an entrepreneur accelerator where people who want to get together and talk about entrepreneurship and figure out how to run their businesses can get together and figure out how to do that. So for the last fifteen years I've spent countless hours with five and half thousand businesses all over the world who are getting together talking about how entrepreneurship works and Over the years, I've also come to a similar conclusion that the technological revolution that we've seen in the last twenty five years has hollowed out the middle class. And I basically said, I can't play by the rules that I grew up in. I have to learn the rules of this new economy, this digital economy pretty quickly, or else I'm going to be displaced and disrupted. And I don't have a fallback position. I didn't come from any form of wealth or money. I also didn't take on any venture capital I self funded bootstrapped my own businesses by cobbling together credit cards and things like that And yah, I think one of the things that I really, truly believe is that We are in a very big danger at the moment that if more people can't participate in the benefits of capitalism, they're going to do crazy things and vote in socialism. And the pitchfks will come. And inequality is going to be a toxic corrosive force in the economy. So like I'm a capitalist who wants lots of people to benefit from capitalism. That's been my whole stick forever. And I just want to include more people in the benefits of capitalism before we do dumb things. And I guess the question therefore is How do we do that The prevailing narrative I think one of the most domin narrives is we attack people like us a lot more What's your view of that Dani So it's very easy to have a bad guy of a rich person. So you could imagine this billionaire rich person, right? Nick, maybe could be a bad guy. And you could sort of do that. When I look at the economy and what's draining it out It's harder to conceptualize, but we have these mega corporations and we have these mega funds. So here in the UK, all the houses are being bought up by Black Rock, a massive private equity fund that wants the entire population to be a rental class forever and you know, our prrime minister has walked down Downing Street hand in hand with the CEO of this big fund saying, yeah, come in and buy up stuff and financialized houses. and that is causing a lot of trouble. And then you've got big companies like Microsoft, like Amazon And they say, hey, we want to do business in your country, but we don't want to pay tax there. We want to pretend that we're in Luxembourg or we want to pretend that we're in Ireland. and we're going to send something from our British warehouse to our British consumer, but we're not really in Britain at that time. so we don't pay tax. And then you got Starbucks that says, you know, we w want to do business and sell coffee next to a mom and dad family business coffee shop But we have to pay this license fee for the Starbucks logo and that has to go to Bermuda. and you know, so when I look at who's hollowing out the middle class massive megaorp businesses that are the abbsolutely bigger than we could have ever conceived them to be. They're as bigg as nations now. And you've got megacorp funds, which are also trillion dollar funds And one thing I'm worried about is that a lot of people think that a guy like me who's basically a dynamic entrepreneurial person or even a billionaire like Nick, is the enemy and You know, when you get a James Dyson who invents a cool vacuum cleaner and sells a lot of them, that's not the enemy. When you get Paul McCartney who writes a bunch of songs and becomes a famous beatle and makes a billion dollars, that's not the enemy. The enemy is the financialization of our homes. The enemy is big mega cororps that don't want to pay tax And that's where we need to we need to be a little bit more nuanced and clear who's hollowing out the middle class. And how do we make policy choices to make sure that doesn't happen? So you're saying taxing the rich isn't the answer Taxing the rich is like a headline that creates enemies who aren't actually the enemies. But So let's just say in the UK then, if you were Pime Minister, would you increase the tax rate on the top one percent We could do that for political reasons because it would make people feel good, but it won't change the economy. What needs to happen is we need a thriving entrepreneurial class. smallm businesses are the answer. The biggest mistake the UK government is making is they don't see that the five point seven million small businesses are their biggest asset, that we could get those going, that we could create an entrepreneurial uplift that would create jobs and it would create betteret opportunities I would definitely curb the issue that we're having with these mega funds. and I would definitely stop pretending that Amazon is in Luxembourg and Google's in Ireland, right? So those sorts of things I would definitely do. What about yourself, Nick? do you want the top one percent to pay more taxes? Is that important? So it is not true that the richest people in the United States pay a lot of tax because the American tax system is riddled with loopholes that allow the richest citizens to pay taxes at a rate of one half of what ordinary people pay absolutely believe that in a high functioning democracy. the wealthiest citizens will pay taxes equal to or greater than typical citizen and that is just objectively not the case in the United States. As a percentage. As a percentage. And I think that that is You know, sort of table stakes in making an economy function and a democracy go. But it is not the biggest problem The probleroblem is wages So here's the most important socioeconomic fact in the United States that the median full time worker today earns in the range of sixty thousand dollars a year If that person had maintained their same share of the economy since nineteen seventy five Instead of earning sixty thousand dollars a year, they'd earn close to one hundred twenty thousand dollars a year That effect, by the way, goes up to the ninetieth percentile If you earned one hundred eighty thousand dollars In twenty eighteen, twenty twenty If you would maintain your same share of GDP, instead of earning one hundred and eighty, you'd earn like a two hundred fifty thousand dollars a year So in the United States over fifty years, the only people who benefited directly from economic growth and productivity gains were the people in the top ten percent and the majority of benefit went to the top one percent And that is the problem. and that is trillions of dollars a year that used to be wages for ordinary Americans and now ends up in the pockets of the richest people, by the way, utilizing precisely the mechanisms that Dan just outlined. And what we have done is we have massively tilted the economic playing field which once favored small and medium sized businesses and local companies Towwards these giant corporations, we used to have an economy ively encouraged small businesses and entrepreneurship basically what we call neoliberalism, this set of ideas around economic cause and effect that came into force in the seventies and eighties, Reaganomics, thatcherism All this stuff cut taxes for rich people, deregulate powerful people, and suppress the wages for working people, basically trickle down economics those policies went into effect in the seventies, eighties, and nineties. And what happened is a huge shift in concentration from smaller businesses to bigger businesses and a huge shift in income from ordinary Americans to the very rich. And that's the core of the problem And of course, I think rich people should pay their fair share. We should It is ridiculous for somebody who make half a billion dollars a year and pay fifteen percent tax rate, somebody makes two hundred thousand dollars a year pays forty. I just think that's stupid and wrong which is the case in the United States, may not be the case here in the UK. But the bigger problem is wages. And if you want to get the economy back on track, you have to address that problem. Dan you say that optionality and entrepreneurship will do more to raise wages than any government policy Yeah, so I believe that optionality is the most important thing. When someone has lots of options, then they don't accept terrible conditions. So give me some color on that. Well, if I have ten companies that are wanting to hire me, I'm going to choose the best option But if I live in a town where there's only one employer, like let's say there's one massive company that employs people, and you either work for that company or you're unemployed, then I have to accept whatever they're dishing out. So the most important thing in creating better quality of life is optionality. We need lots of optionality. One of the options that I want people to have is I want us to teach entrepreneurship in schools so that people have the option to start a family business as one of their options. They may not take that option, but at least it's not a mysterious black box that they just don't understand, that that would actually be one of their options. Also, let's say you had no minimum wage But if you had ten employers and a limited pool of people who are available to work at those companies, they're going to have to bid against each other to create better and better working conditions and better and better pay So you kind of only need to have minimum wages when there's not enough optionality. If there's enough optionality, it pushes everything up. Is that your view as well? I agree with the spirit of that It just turns out that is never the case So there's a lot of economic theory sounds a lot like that, but but exists in a in a in an imaginary world where people have power and optionality And in the real world, that actually doesn't ever exist. So by way of example, there's a principle of economics The theory of marginal productivity. Have you heard of that? No. So that's a theory that is embedded in the center of economics, which says Because markets are efficient, the amount of money you earn reflects precisely The contribution that you make to it. So if I make fifteen thousand dollars a year, that's because I'm giving fifteen thousand dollars a value. That value in the world. Okay correct And if I earn five hundred million dollars a year rubbing money together to make more money is that is an accurate reflection of the value I'm creating in the world, whichich is really central to capitalis, isn't it? It is absolutely central to capitalism and is central to economic policy making. But here's the thing If you understand where that came from, it gives you pause. So in eighteen seventy nine, a guy named Henry George writes a book called Progress and Poverty in the United States And basically it's the first about the rich stealing from the poor And isn't just the best seller, it is the best seller in the history of the United States and the powers that be freak out And JP Morgan brings this guy, John Bates Clark to Columbia University, which is sort of the home of like Wall Street and stuff like that in New York and says fix this. And so Henry George writes a book called The Distribution of Wealth in which he invents this idea called Theory of marginal productuctivity. which asserts this idea. But he says the quiet part out loud in the book. He says, lookook, we have to prove to working people that no matter how much they make, whether it's a little or a lot, it reflects their value because if they conclude that their work is worth more than they are paid, they will revolt and kill us all and that would be bad And that idea, it will not surprise you to learn, was very attractive to a bunch of rich people and got swept up into economics. and today, core idea in economic theory. and it would be true potentially if markets were perfectly efficient and all this optionality existed. But there has never been a case where that have been true. It has materially harmed the welfare of most people because as Dan says, your ability to earn is related to your power to negotiate, not some magical number that the market decides And it's how easy you are to replace because if I run an ad for a job and four hundred people apply for the job, right? whichich really does happen. Yeah. I know this happens for you, Steven. Right that essentially, you run an ad and four hundred people. So you don't think about raising the wage because four hundred people applied and they're all good Like they're all really like super qualified people. And this happens all the time in the UK right now.ight It's everywhere. Yeah I mean, they're almost Zero circumstances where Workers have more power than owners And, you know, even even Adam Smith in the in the Wealth of Nations outlined this asymmetry of power The thing is is that if you persuade all that What they earn is all their worth then you've created this narrative that makes rich people richer and everybody else poooor. So what's the solion here? Is it to put a a higher minimum wage on society That's a policy solution. but if you really want to solve the problem. Starting point is getting people to understand economics in a way that actually reflects how the economy actually works, not this stylized invention. Dating back to seventeen eighty seven. that if you take seriously and enact policy on the basis of it, the only thing that can happen is that the rich will get richer and the poor will get poooor, which is a story of the last fifty years. What is the policy solution? A policy solution is most definitely to apply a standard which requires companies pay people know a living wage. So the minimum wage is a perfect example of a great policy Another policy in the United States, which is really, really important is the overtime threshold, whichich I don't know whether you have here in the UK.. But it's the salary threshold below which you automatically get paid overtime, which is time a half here too. Yeah, forty eight hours here. forty eight. forty eight hours is upp limit of a week, a working week. Okay. So in the United States, it's forty hours. So if you work more than that, you get paid overime And so one of the things, so that standard used to apply to virtually every worker in America in nineteen seventy nineteen sixty five Today, that standard applies to less than ten percent of workers. Now, why does that matter? Because people like me at the scale of tens of millions have turned three forty hour a week jobs into two sixty hour a week jobs and pocketed the difference. You may be doing that here You put gummy bears in the lunch room and a ping pong table and you force people to work sixty hours a week and then you can have two employees instead of three. If you do that thirty million times, you've taken ten million jobs out of the workforce. So do you agree with this, Daniel, this approach? Not as much. Well, here's the issue. I agree with it at one level, but almost every solution that Nick has recommended, the UK hass had for the last twenty years. So we have a minimum wage that is pegged two thirds of the median and it ratchets up We've got twenty eight days worth of paid holiday every year. We've got sick leave, we've got maternity and paternity leave. We've got the ability very very difficult to fire someone if they've been with you for more than six months. So we have this unbelievable set of workers' rights and all of these recommendations from minimum wage right through to how to handle employment. We have the most unhappy population. Our economy is not growing. We have a million young people out of work. We have no one's hiring at the moment So it hasn't created those conditions have not created runaway prosperity. and that gives me pause to think something deeper is going on. And the reason that I think this is that I think we need to make more participation in capitalism. Capitalism is about ownership. You have to own an asset. And if you don't own anything, if you're just selling labour, current economy with digital and AI and robots and all this sort of stuff The real reason the wages because what Nick' saying is that the amount of money people should be earning right now is like in the hundreds of thousands. And what I think is happening as another major part of this is that the rules of the economy have shifted. Technology has cut out all the middle men Technology has hollowed out the middle class We used to go to the video store and the rental store used to have twelve people working there, and now we just go to Netflix. And we used to go to our little local retailer and buy a CD. and now we just go to Spotify and we just go to Amazon. So it's hollowed out all of those supply chains that used to create amazing jobs The value of the labor been eroded because it's very easy to outsource labor to another country It's very easy to simplify a job down to automated parts using technology. So the fundamental value of actual labor has diminished because of technology. Technology has reduced the actual utility of this thing that we call labor for ninety percent of people. And it's only going get worse with AI. And with AI and with robots, it's going to go down If you just simply say, oh, this is about lifting work standards, you're going to miss the point That we can't compete with technology. Technology is better at this stuff than we are. And the answer, the solution is ownership We have everyone in this economy needs to own stuff. We need to own a house, we need to own a family business, We need to own shares in the companies that are growing. So you cannot outrun this. This is like trying to run against someone who's in a car and they say, oh, you just need nicer shoes No, the shoes won't change things. We've already tried nicer shoes in the UK economy and it's made no difference. Everyone's miserable So that's one of the things that that's where you and I would dis. I mean, both things can be true. The minimum wage in the United States is seven dollars twenty five cents an hour. or two dollars and thirteen cents plus tips. It's half it's a third of what it is here in the UK. Okay. But you have twice the disposable income that we have. Your median wage is one and a half to two times what our median wage is. We're now a poor country relative to the US And even though your minimum wage is terrible and horrific and inhuman Yeah However it's magically done it, your country and your citizens are so much richer than ours. Yeah, except if you consider that Out of that median wage, you have to take twenty thousand dollars a year to pay for healthcare. R? Like I think adjusted, it's still your thirty percent better. evenven adjusted. I think if you look at the AIC OECD, it would be interesting. We might be able to look it up. I can't remember, but I bet you it's about ten percent different. Even when you subtract out of pocket healthcare costs and insurance premiums, the average American worker still takes home significantly more money than the average UK worker. Yeah. The average US salary is around seventy four thousand dollars. The average UK salary is around roughly fifty thousand dollars Americans pay heavily for healthcare. The average employee in America pays about six to eight thousand dollars a year in premiums and out of pocket costs Brits do not pay for healthcare because of the NHS. If a US worker makes seventy four thousand dollars in spends eight care on healthcare, they are at sixty six thousand dollars before relatively low taxes. The UK worker starts at fifty two thousand before relatively high taxes. The bottom line is the gap in base salaries and tax rates is simply too large for UK free healthcare the US. wins on pure disposable income per person. Yeah. There's no doubt the US has had a much more successful economy than the UK Brexit being, you know, a catastrophe. Can I push back on one thing though with the minimum wage or this compompanies that hollowed out the middle class are big tech companies, big finance companies, those mega corporations. and I agree with you, they can afford to pay their workers more money One of the issues that I feel and this is what I'm concerned about is that In the UK, the majority of businesses that do pay minimum wage Like a friend of mine owns a pub has rais a thin margins, it's losing money. He's not taking any money out of it. He's massively impacted by taxes and minimum wage. So the companies that I see that are the ones who have to pay minimum wage workers and give people the on ramp into the economy ubs, little retailers, Mum and dad businesses. These are the ones that really do get squeezed out of the economy. They have raisor thin margins and you put more pressure on them. You say, you've got more government regulations, you've got more taxes and now you've got more minimum wages. And they just go, I've had enough, I can't do it And the companies that hollowed out the middle class, the Microsoft's, the Googles, the know Amazons, They Starbucks. Yeah, the Starbucks. they go, yeah, we can absorb it.. And also we're not paying tax anyway, so we'll just kind of like do that. So one of the things that you could do, one of the things that we recommend is that you impose these standards progressively that the biggest companies pay the highest minimum wage. Medium sized companies pay slightly less and small businesses pay less Yeah even within that context ennsuring that everyone pays enough for people to have enough money to continue to buy stuff. I mean, it's fineing good to say, look, I don't want to pay high wages in my pub Surely people working in the pub should make enough money so that they can go to the pub themselves and buy a beer, right You have to, I mean, you know, the National Restaurant Association in America is the, you know, famous for this. likeike they want everybody in America to be able to go to a restaurant and eat Except for the people who work in the restaurants right? Can you just say something with your friend that owns the pub as well? Yeah. So say you own Starbucks. Yeah. you own a pub. Yeah. I'm a Wker. Yeah If you're going to pay me more because you have this progressive minimum wage and you're going to pay less 'm sorry Dani I'm not going to apply for the job I'm going to want to go work at Starbucks. So is there not an issue where you're not going to be able to attract talent because you're not going to be able to pay them as much There are many reasons why you would work for a small business as opposed to a megaorp. But I'm saying you're ping four pounds minimum wage. He's paying me eight. So why not does he not end up getting all the best talent? He might get the best talent and also for my pub I might be able to have to I might matchate, right? So maybe it works that I just pay we're back in the. But I'm not necessarily legislated to pay out. So here's the thing's more Look as a small business owner, you can treat there's all sorts of techniques that you can use to retain people because you're going to have more optionality As a big company? Yeah, because you are going to definitely pay me more. Well, being bigger is always better. It is absolutely true that that high standard will put pressure on throughout the economy The small pub owner is also going to benefit from the fact that all, I mean, we're using Starbucks, wh whatever whatever example we're using All these people now earn so much more that they can afford to go to the pub and buy stuff. One of the interventions that I was part of in the United States was the fifteen dollar minimum wage we cooked that up in Seattle, Washington. And so I spoke to many, many, many, many, many small business owners who are absolutely terrified by this because You know, look, we are all business owners, right? And so you can do a calculation in seconds about the risks and the expenses of higher wages. Correct. But what you cannot calculate is the benefit of living in of operating your company in a regime where everyone earns more. and the benefits that accrue to you from that. A ham sandwich in, I don't know, Somalia cost twenty five cents. It cost twenty five dollars in Switzerland What kind of economy do you want to live in Right You know what were you going to say about your friend? Well, the friend who owns the pub, his pub is actually full most nights of the week. They have lots of people going there. The issue is taxes and costs. He's got a big government In the UK, we have all of these things. likeike everything that you've mentioned, we have it, and we've had it for twenty five years don't have an affluent middle class that's been created. We have an eroded middle class. So the actual numbers here is that my friends no money himself and the pub lost one hundred eighty thousand pounds last year because of VAT. and he feels like he's carrying the weight of training people in their first job. He's creating jobs as one of the only employers in his little town. And also, he didn't create this mess. Amazon and Microsoft and Google and Facebook Big funds, they are sucking money out of the economy. We're in violent agreement about this. So ye. So I just feel like The issue is Like I really want to make sure that we're super, super clear Small businesses are currently squeezed here in the UK. I don't know what's in the U.ame in the US. Like they are so squeezed and they are squeezed by big tech. and now AIs come along. They feel like they have to learn this new thing and they have to start posting on LinkedIn forty five times a day using AI posts or else they'll get drowned out and they have to, you know edit videos and become a TikToker as well, right?. So it's all of this constant pressure caused by this tech sector and these big funds, like one of the biggest threats to my friend's pub is that a big American private equity fund wants to buy the pub and turn it into a block of flats So like they want to financialize this this community asset and he's trying to fight to keep his p. Yeah. right. So what I what I don't want to have is I don't want to have big government create a new framework that basically squeezes small family businesses even harder. They all start going, We're losing two pubs a day here, right? They're closing down. They go out of business And then we end up with bigig corpse, big funds who can afford to absorb it and they own everything. And I also want to be clear that the reason people are struggling is they don't own anything. It's not because of working conditions. They don't own anything. and if they don't own anything. Iniew? No, it would be wonderful if everybody owned something. But ownership starts with earning enough money so that you can save money so that you can begin to own something, right? Like one of the lessons that we learned was tryrying to give stock options Everyone in a company often doesn't work Yeah I mean it's a catastrophe because For ninety percent of the workers in a company Their concerns are immediate And they don't those socop options And if you give them the choice between cashual stock oations's not even close.. And so Again, I agree with the sentiment It's just that I have never seen and I do not believe there is an existence proof for it working on planet Earth certainly worked great in the United States for forty or fifty years. was a set of standards that required companies to fairly split the value they create with their employees through a variety of mechanisms, unions, which can be problematic for sure, but labor standards like the minimum wage and the overtime threshold and so on and so forth Bold with a set of policies to discourage consolidation and discourage the kind of exploitation that you have I think very smartly articulated so that we can have a dynamic economy. The only difference that happened back in the time that you're describing where workers had to be included is that it was nearly impossible for a company to outsource their customer success team to the Philippines. And it was nearly impossible for a company to come up with a piece of software that would do eighty percent of the heavy lifting of a job And one of the issues that we have right now is that when you put a lot of pressure on a all sorts of companies. We are living in the age of AI and robotics where you essentially, you know one of the options that companies have is just the option, well, we'll just outsource the labor to another country,' automate it We'll simplify it. Okay, but those The rules that enabled people to do that were written by the same people who are consolidating industries and taking advantage. I mean, you don't have to live in a world like that. There are other ways to organize the world The neoliberals promised that free trade was going to make all of us richer. And what it did is it flooded our markets with cheap stuff from China But it is absolutely not clear that it made people's lives better. M Chinese people's lives. Chinese people's lives better, but it certainly didn't make people in the UK's life better. and it certainly didn't make people in the United States's life better. And so you could have imagined approaching that in a fundamentally different way I guarantee you that if the United States could go back and do it again, we would have resought it. This would have rethought it. There's a few ownership models that I think are important that could be looked at. Number one is a sovereign wealth fund. So the countries like Norway, Singapore These countries, they own natural assets in a sovereign wealth fund. And essentially every citizen therefore owns a piece of some asset. There is an asset that is owned through a sovereign wealth fund. It's a very successful model. It seems to work so incredibly well that it's dangerously well. Half of London is now owned by the Qatari Sovereign wealth fund, the Norwegian Sovereign wealth fund. We're literally losing all of our property to the sovereign wealth funds of the world So the sovereign wealth fund model is incredibly powerful. Yes. So just for someone that doesn't know what that is, you You have natural assets within the company owned owned in part by the states. So the UK did a stupid thing. We discovered the North Sea. back in the eighties, I think it was. And Norway had half and we had half of this Norwegian, this North Sea oil And the Norwegans said, hey, we'll just own this in a fund that all of our citizens will benefit from, and that will be a state owned fund and then we'll take the profits from that, we'll reinvest it into assets and every citizen will benefit from those assets. And the UK said, we'll just sell a license to British petroleum. Yes,. We'll make the rich people richer. Yeah. And Australia is so stupid. We have all this incredible natural resource, no sovereign wealth fund Britain, when we took over the whole world, or twenty five percent of the world, we operated in sovereign wealth funds called the East India Trading Company and all this sort of stuff. and basically our business model world sovereign wealth funds for many, many years. So sovereign wealth funds number one. So that would be one. The other one is to put shares into babies's names. So when a baby's born, You have a piece of the stock market, like a thousand dollars worth of shares a baby bond. Yeah idea. And Trump's doing both of these things,n't he? sovereign wealth fund and the baby bond ing at the Trump fund or something. Yeah, they're experimenting with some version of this right now. Yeah. Yeah. so if a baby by the time they hit eighteen has had eighteen years of compounding of owning that asset then by the time they hit eighteen, they're literally getting an asset that they can then turn into another asset if they want to. That's pretty powerful. And then The biggest issue is the financialization of houses. So if you take a value of a house, About half the value of the house is what you might call the utility value of the house, which is it's a house to live in and I want to live in it. And then the other half the value is the financial speculation value of the house, which is how much value does a fund have if we can rent this out to people for the rest of their lives I looked at the Black Rock thing and it said, The idea that Black Rck is buying up UK homes is a myth. They are a financier, not a landlord. They provide loans and debt facilities to property developers, but they do not directly own or manage residential housing stock. Loy the Bank is buying seventy thousand UK homes. rent forever The number of single family homes Black Rock directly owns and manages in the UK is zero. Okay, but He's right. Yeah. I don't know what the details are, but this is a private equity thing that's going on in this country and in the United States right now. Yeah. In the United States I've he a lot about Backcroock buying a I'm not sure what the entities are It may be true. again, I don't know They come they come with structures to do it arm's length. Yeah. but like I guess you kind of own it if you're financing it as. Well, O you loaned it to a subsidiary or somebody else or whatever it is. But the meta point here is that homes used to be owned by people. And they bought them to live in. And they bought them to live in Yeah. And one of the nefarious things that' going on in the West driven by this neoiberal consensus that the only purpose of the economy is to make rich people richer. is this idea that private equity should buy all these homes and turn turn ordinary people into this rental class. Just to confirm, Yeah Lloyds Bank are doing that through something called Citra Livving. They're buying up thousands of new built homes and apartmentsack. ass a direct private corporate landlord They view the structal shift away from home ownership towards long term renting as a major profit opportunity for them. Yes. That's it. R. They want to have a permanent rental class that people never you'll ownn nothing and be happy is the idea. And people are not like that. People love to own stuff. I want to go back to the central point we were talking about, which is like how do you solve this? Because you've got two different views on how you solve this inequality. What I find interesting is the UK has better worker rights, but it is you also have much less inequality here I mean, just to be clear, that is true. So the US is significantly more unequal.. The US top one percent holds over thirty percent of the nation's wealth compared to roughly twenty percent in the UK. And the U.S. consistently ranks as the most unequal of the G seven nations. However, the US is growing much, much faster. If you look at F twenty twenty six, the US has grown over one hundred percent faster than the UK.. and the UK is vastly more protective of workers. We have the things Daniel said, like paid vacation, paid maternity leave, the UK mandates up to thirty nine weeks of statutory pay. The US mandates zero. correct whichich is unbelievably correct, horrific. But I mean, one of the things that's happened in the UK, Steve is Brexit When did that happen to sixteen that's taken that's taken what is that takeaken eightcent or ten percent out of UK growth rates? It is affected unemployment by four percent, productrodivity gains by four percent. I mean, the list goes on. So that own I mean, part of of why people in the UK are feeling downown is this Unbelievable mistake that a country made. But it's the same in Germany, It's the same in Australia. Germany has unbelievable workers' rights. Australia unbelievable workers' rights. In fact, the USA is the outlier of all the modern capitalist economies. Absolutely, but we're confusing things. People are pissed off everywhere in the world Ewhere Yeah. That'sere in the world. I don't I want the pitchforks to go away as well These workers' rights are not putting the pitchforks away. Like all of this stuff, we've given this stuff to Australia, New Zealand, Canada all of Western Europe, all the English speaking democracies Other than the USA, USA is the only one that has virtually no safety nets and no safeteguards. Everywhere else has healthcare systems that are much more generous and welfare systems that are more generous. and like maternity leave. I mean, it's just inhumane that USA doesn't have maternity leave. So all of that stuff, but we've got all of that, but we've got the pitchforks here too. Yes. And this is why I'm saying I'm really zoning in on the idea that people need to own a house, they need to own a business and they need to own shares. And it's like if they own either could not agree more and I don't know how to get them there unless they are paid well enough to do to do that Let me tell you anecdote during the George Floyd riots peopleeople were burning stuff down in the United States and there was this fantastic interview with this woman and the reporter said, you know, I just I cannot believe that you don't have respect for property rights. And the woman said We have no property. You know,, why should I respect property rights? that? No one I know owns anything. Yeah. You know, like so I am a hundred percent with you. But I think at the core of it Core of it is that inequality is way more than an economic inconvenience for the people that it affects.. What it does is it shreds the reciprocity norms that makes social cohesion kind democracy possible. Yeah. It's this dog eat dog, you're all on your own. Grab what you can. mean obbviously, the Trump people will burn the place down. That's right and burn the place down. Obviously, Donald Trump has created a permission structure for the worst kind of behavior, right? The worst kind of corruption basasically stealing has come back into style, right? And, you know, there's all sorts of reasons that are generating this malaise, this This sense of unfairness and lack of control, right? And And the thing is, I just I agree one hundred percent with your sentiments. I really do about entrepreneurship and ownership. And you know, at the end of the day, the cool thing about entrepreneurship is you're in charge. Yeah. Like you're in charge here. Not everybody can be an entrepreneur. Corre And so I do think that that's a little bit unrealistic. The issue is is that like seventy percent of all jobs that get created are created by small businesses. And not governments, not big companies, you they don't create jobs. small businesses create jobs. And if we just not everyone can be an entrepreneur, but if we had one hundred thousand entrepreneurs who were all hiring ten people we'd have a million jobs and we wouldd have one hundred thousand options for people with jobs. I don't think that we discount the whole idea that entrepreneurship is a big part of the solution. Can I take us Briefly back in time, this is not the first time this has happened. The K shaped economy has happened in the Egels paws. Yeah. What did you mean by K shaped economy? So the K shaped economy is where so a normal economy is one where everyone agrees it's going up or down or sideways. Everyone can sort of say, oh yeah, roughly speaking, it's a good economy, it's aad economy. It's rising and falling like a tide A K shaped economy is where it's really good for some and really bad for others. It's a disrupted economy., right? So the top percentage are going up And the bottom iscent energy going down. Now the headlines that we run today are the exact same headlines that were run in the early eighteen hundreds in Britain And it was essentially record profits for industrialists and workers haven't had any improvements. They like you could almost take every grievance that we have today And you could just overlay it in the early eighteen hundreds and you get the exact same words the solutions One of the big solutions in the early eighteen hundreds was we need to export people. We need to get rid of people. And what they did is they sent everyone to Australia. So they they sent theyent they picked up people and they put them in Australia, right? So the same sort of thing, mass mass immigration or whatever you call it, rem migration. So they got rid of people out of the country. So it was very similar and we call this the Engels Pause, but we understand what caused seventeen ninety, eighteen forty Yeah So what caused it was technology and it was this new it was the industrial revolution. Yeah. Yeah. So is the new technology where We introduced a steam engine, we introduced a spinning loom, we introduced tractors, we introduced all of this sort of new technology. And the owners of that new technology and the people associated with that new technology went like that, they leveled up because of tech. And the people who were not part of that technology went down. V veryery simple picture you might want to have in your mind is a farm that had a hundred workers farming versus one farm that had a tractor, The tractor farm went like that and they all the workers went like that. because of technology. The interesting thing about the Angles pas is that Approximately two generations fifty, seventy five years with the exception of the owners of capital. Basically, everybody else on planet Earth went backwards. It was hell. It was hell in. Bend is that over time The political consensus changed And working people clawed back some of that value through unions, through labor standards, so on and so forth. So I guess the essence of what I want to get to is, I mean, something you've always talked about down as well is that if you start applying pressures on these companies or entrepreneurs, they can just now get up and leave. And that was quite different from that era where we weren't dealing with technological businesses, we weren't dealing with IP and those things. So if you start imposing some of these measures willill these companies get up and leave and go somewhere else where market conditions are preferable? A lot of UK entrepreneurs are, as we've seen from some of the numbers recently, choosing to go work elsewhere. Okay, I think one of the things that just needs to be acknowledged and put on the table is one of the challenges you have here is you have Europe or the world has built this incredibly stupid system where You can operate a business here Take advantage of the UK's market Take advantage of the UK's rule of law. takeake advantage of the UK's infrastructure stuff in a box, move to Dubai, and pay no tax Right? It's idiotic It's just it's just idiotic and suboptimizing as an American. I pay tax wherever I go, right I cannot come to a place and take advantage of it and then skirt the laws. This is such a profound disincentive to do the right thing. Well ye, yes, but the real culprit is what companies can do because US companies can do it. You can't do it as an individual But you can set up an office in Ireland in Luxembourg, which is even worse. And it's the corporations that are the bad guys, which is but you have both problems because you have you have UK based dorrepneurers who are like Well, I can stay here and pay forty percent tax or whatever it is, right just pop off Dubai, run the business virtually and pay nothing. So what are you saying should be done with those people that do that I think that UK citizens should pay UK tax wherever they go and German citizens should pay German tax wherever they go. agree. I don't think that will solve it because it's not citizens, it's corporations that are the bad guys in. It will solve one problem. It will not. This other problem needs to be handled The giant vampire squids of the world are companies that are pumping money out of the economies and they're faceless corporations that have figured out how to play this game So for example Let's take YouTube, for example. YouTube is serving up a ton of videos to people all over this country and they're running ads, but that is pretending to be in some distant place.end It's not being in the UK And what we used to do in the UK is we used to have a broadcast license. If you want to broadcast in the country, you pay a flat fee and you can broadcast. Why is YouTube not paying a broadcast license? If they are a broadcaster effectively and running ads They sit there and say, o, but there's this and we shift our profit through here andh we have to I'm so sorry, but we have to buy our licensing, you know from this company over in this other Vanawatu or whatever. It's like, no, no, no We don't care about that. It's like, look at how many do business in the UK. You should pay tax. It's just as simple as you've got this many views and the broadcast license for you is Okay, so you agree on both points, then that you should tax corporations based on where their customers aren't consuming And You should tax individuals irrespective of where they decide to fly off to Look, I think in a globalized world that we live in, an individual should be allowed to make a new life for themsel if they want to, right? Like So for example, if I genuine I make a new life for myself in the UK twenty years ago. I came here from Australia And I don't want to pay tax in Australia because I was born in Australia. I paid a million dollars with a tax in Australia. but I now live here. I've got three kids here and I've got a house here and my whole life is here. I don't like the idea that just because I was born in Australia, it's not possible for me to make a new life. But we have a tax treaty. Yeah. Like there are ways of handling this But this ridiculous look, every rich person I know in Europe is playing this ridiculous game of trying to avoid taxes, right I don't know how you can look at that and think this is a good system. But the issue is you and I both know it's so easy to just turn this into a company game So like for example, If we have to appropriately close the loophoes like ye, but like I just I'm seeing so many people demonize people Nick, right? They go, Oh, this guy he's, you know, he's a rich guy and he's like, you know, it shouldn't be so rich. Honestly, he's not the problem. I'm sure you pay a bunch of taxes and also you create economic activity around you These mega corporations do trillions of dollars out of economy. If we take a mega corporation, you know, think of one in your head And we decide to tax them where their customers are.. I was looking at some of the research and it says, corporations ra really just absorb the tax. When countries like the UK or France introduce taxes based on lo users Tech giants, like the biggest in the world, immediately raised fees and prices for the consumer and small businesses inside those specific countries to offset the cost If we had a global tax system that prevented this, then they wouldn't do it couldn't do it. If the compliance cost of tracking user locations and paying local taxes outwes the profit from the region, companies also tend to simply block users in those countries or pull their products entirely. Great, G. And that opens up a possibility of a local company to do it. Worse, huh worse, maybe better. I was thinking here about the large language models. and I was thinking about that as an example. you know if the UK tried to take on Gemini or Ch GBT, etceter. we would be using a significantly worse technology The truth is that those those m accurate nowough Those megaorps, they don't do this. They want to own the world and they want to dominate the world. They're not interested in cutting countries out Right? None of them actually cut countries out. When do you think you think Facebook is just gonna to leave the UK? Yeah. like they're not gonna to do that. So and the other way is how you do it. So if you simply try How you do that in Australia though in these publishing business. They might do it very briefly as a way to punish political dissent. But ultimately, they operate globally. They have a global business model, and they essentially too, we just need to say, I'm sorry, you've had your twenty, thirty years of not paying taxes anywhere, but we're not doing that anymore. We are very good at coordinating when we want to coordinate. and we need to say, the bad guy here I mean, it is really just pulling money out of our economies and taking it to other places. And one of the reasons that the USA has become so wealthy with its stock market is because it is the end valuation where all of these vampire squids end up with their Now if you a look at what happened. It was Australia I was thinking about, but it also happened in Canada where they passed a law called the Online News Act requiring tech gients to pay local publishers whenever Canadian users shared or viewed newslinks And immediately, instead of paying the user location tax, Meta simply blocked all news content from every user in Canada because the cost of compliance just wasn't worth a hassle for one particular market. And you have the same thing happen with Amazon where several US states, like California, tried to force Amazon to collect local sales tax simply because Amazon had independent affiliates, like bloggers, et cetera living in those states. And rather than dealing with the complex local tax collection, Amazon instantly terminated thousands of affiliate accounts. If every state required Amazon to collect local sales tax, then obviously they couldn't do any of that. They would have to deal with it, right? It's just Big corporations have a massive advantage over the jurisdictions that they're operating in, because they have so much more power and so much more flexibility So what is the what is your solution then, Daniel to So for this inequality problem that we're experiencing Because you seem to be less interested in the sort of workers' rights piece because that seems to We've tried it. You're saying we tried it? Yeah. what I would like personally is I want to see way more small businesses and I want the government to favor small businesses and essentially say, we're going to reduce the taxes and the pressure on the small businesses. We're going to advantage local small businesses that are here and paying tax We're going to create special economic trading zones if your business is based here and is a smaller size. We're going to basically make ourselves highly competitive for small businesses to show up and do their A game. And what about big businesses un punish big businesses that are I wouldn't punish them. would just I'm one hundred percent with him the playing field Tward smaller businesses and startups. You know, I'm not sure if you've heard about this thing that I just joined the board of called Enterprise Britain that Brent Hoberman, who does founders forum. Y. and Steve Fitzpatrick, who founded Ovo just started. It's called Enterprise Britain. It's a group of us who have gotten together with the Express ose of doing exactly pretty much what you describe, which is to try to make Britain an even better environment for business, mostly small and medium sized businesses. One of the great challenges here is to try to find capital structures that allow small companies to turn into larger companies while remaining here and not fleeing to a better place. But I'm I am a hundred percent in agreement with this And You can have an incredibly dynamic fast growing economy All of the benefits flow to the people at the very top and everybody else gets screwed And you have to do both. You have to do both I've spent the last decade building and investing in companies, and so often the conversation around marketing budgets follows the exact same pattern. The budget gets approved, but then the results don't come back. And most of the time, the creative pitch and the offer is fine. The problem lies with the audience. Ads reach people who will never buy or refer, nor do they have the power to sign off anything at all And this is why so much budget gets wasted. LinkedIn adds, who a sponsor of this podcast lets you reach them specifically by job title, seniority, company size, industry, the skills that they have, and much more. You're no longer hoping your ad reaches the right person, inststead, you're defining exactly who sees it. 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No credit card is needed That's pipeedrive d. com slash CEO I mean, one of the most important subjects at the moment in society is artificial intelligence You probably saw recently Ar Schmidt did a commencement speech in front of thousands of students and every time he said the word stage. Yeah. Every time he said the word AI One of the things that Anthropic or one of the leading AI companies said recently is that entry level jobs are at risk and I've got this graph here showing the decline of entry level job postings. I believe it was on LinkedIn from somewhere And it shows that they're consistently dropping and dropping and dropping. AI is I think about it so often. I was up late last night trying to think through some of this stuff because Anthropic released a report yesterday showing that the AI models will be able to improve themselves theoretically in the future and what this might mean How disruptive do you think AI is going to be as it relates to job losses? You know, I don't think Bernie Sanders' latest idea is terrible. US will own fifty percent of all their AR. It is absolutely true. that AI is monetizing For free. humanities intellectual property And a few people are going to directly benefit from that. And I think that U in the same way that Norway created a sovereign wealth fund with this enormous asset that they had creating a sovereign wealth fund with fifty percent of the value created by AI and recycling that into I think it's unclear exactly how those benefits should be recycled. but trying to find a way to make some of that value a cushion for the disruption that it will inevitably cause. I don't think that's a crazy idea. It's a good idea for China and the US. Yes Yes. They're not f for anywh else necessarily. It's not going to help Senegal or Southampton much. No, in fact, it'll damage a lot of those places. You know, like the Philippines has benefited enormously by being the outsourced back office for a lot of small businesses that AI can now do a lot of those those those jobs. One of the things that I always come back to is the idea that say the UK has five point seven million businesses, We have a million unemployed people We need one fifth of the businesses to employ one person AI does actually make your business better. L AI is really good at helping you with your marketing. AI is great at helping you do legal contracts There are a hundred ways that AI could actually make point seven million businesses a little bit better to the point where they want to hire someone. And if we can incentivize those things to happen, businesses are trained on how to use AI to their advantage and tax breaks for small businesses that are hiring And we will you know, there's actually five point seven million businesses and a million unemployed people. That's good there's a good match there. You know, a lot of people have been talking about AI agents And what an AI agent can do for anyone that doesn't know is it can go on your computer and it can get any task you want done on the computer whether that's, you know editing tasks or whether it's, you know manual data entry tasks or whatever it is, it can click around on a computer and do things. A lot of the entry level roles we're often given are that kind of work. I think myry le entry level job after I jpped to the University was kind of doing that kind of thing There was also a little bit of a sales component where our cold call people AI can now do the cold calls too. And increasingly, if we just play the rate of development forward, we'll be able to do those things. So if these businesses get more and more efficient, Um, Again, it comes back to this an entry level point is What role will entry level members have in these kind of companies. So what's interesting for me, I have a group of companies, small businesses, dynamic small businesses. We've implemented AI in all of them And as a result, we've hired people. Who have you hired? So entry level people. We've hired some entry level people who are augmented by AI, so theyd become more valuable because of AI. But like things like appointment setting We've ended up hiring more salespeople because we get more appointments. we use it with our marketing and we end up hiring people who can actually have those final conversations with people. At the very core of my organizations, we have an AI layer And the AI layer has context and skills and models and security layer, right? All all in there. And it spits out amazing information and data and reports and tells us who to talk to and why to talk to them and what to talk to them about. all these things are happening because of AI. But it doesn't get around the point that like if you think about Uber, Dara has been pretty clear that the nine million drivers they have, I think it is, are going to lose their jobs in the future. you think about the other sort of white collar professions we've described Those roles won't won't exist in the future Well, I should say those roles will be will be will be changed. cororrect If I put on my more optimistic hat The thing is is that All businesses operate in a competitive environment And there are two ways to compete One is to be cheaper. The other is to be better and The thing about AI, is that Yeah, there are tasks you can automate a away One person with good AI tools may be able to do the job of five Right? and Yeah, you could eliminate that job Or you could keep that person, give them the right tools and outc compete your competitors. The right tools. The right tools. There's an assumption that I mean, this is, of course, what happened with computers, right? I mean, I am older than you guys. So I remember when calculators hit You had to be there to realize how freaked out people were about calculators R? Like people were talking about like, what are the accountants going to do? And and and will kids learn math anymore? I mean, it was it was like extremely controversial to bring a calculator to school And then along came computers. And the truth is that computers didn't reduce the amount of work that people did. they increased the amount of work that people did. And I do believe that there are ways in which AI is probably going to do that. And so the job loss may not be as apocalyptic as it now feels like it may be because again, at the end of the day You have two ways to choose to compete If you, you know, you can get rid of somebody and do acts You could keep that person and have them do five s and out compete you know, your competitors in another dimension. I think that that will be something that people are likely to do. Doctors are just going to be better doctors. I think I definitely agree that there's going to be this sort of augmentation of certain individuals. I think maybe the difference between like calculators or computers versus this AI is coming into a technological economy. and Coming in with instant scale in a way that when Anthropics shipped their new model last week, it went to All of us at once, everywhere in the world. We were all step changed with with computers. I remember the day that like my dad ordered the first computer for our house and we waited for weeks and weeks and weeks. And then we got it, it was super expensive to get one. We unboxed. Remember Brus all stood around looking at and it was like this windows ninety five machine that had like no memory on it So the distribution, the sort of disruption was much slower the pace the pace was much slower muchuch slower And I understand that like with our team, there's int we have no intention at all to let anybody go because of AI. We're reskilling people, training people However, would we end up hiring less people? Eespecially in the near term than we would have otherwise. I think that's maybe conceivable. Yeah And a lot of companies I think are in that position where I actually was speaking to someone yesterday and they said, we're just letting the natural attrition. in our call center C of the shift, which means they have they lose twenty five percent of people from their call center naturally.. They're just not hiring other people back in. And actually Clar as CEO said the same thing. He said, we're just letting the attrition take care of it I'll give you another example though, just to counter that I work with a husband and wife couple in the North of England who they had a little video production agency and like one or two people who did a little bit of contracting with them. They used AI to create a piece of software. And that piece of software helps automate script writing and a few of the things that they do They launched a waiting list for this. They got five and half thousand people to join the waiting list. They then signed up their first fifteen hundred clients to a piece of software that cost almost nothing for them to build in four months. And now they're hiring a team of ten people And this is a husband and wife who had a small constrained business who are now building out a bigger business, and this is something that could never have happened. They haven't had to raise billion millions of dollars. They haven't had to hire thirty, forty people. So this tiny little SaaS opportunity is suddenly possible because of AI and take take that AI away and that fast growth dynamic little businesses Yeah. I think anecdotally, I could come up with lots of examples as well where particularly people are highly entrepreneurial, they come across an opportunity. but there's this broad if just zoom out on the way that people generate value in the economy at the moment. so much of that is going to change and it's going to be quite quick, it feels like. Oh totally. And I don't know what you do about like what' you do about that cenship? Well this happened in the Jevins paradox. The person who had a tractor displaced a hundred people who were in the field And those hundred people went into the city looking for work all at once And it was Charles Dickens wrote Tale of two Cities, he wrote all of the Tist. Guess who else came out of the Jevins Paradox? Our good friend Carl Marx, who came up with the most toxic ideas ever created and written down. right? He came off the back of the Jevins Paradox. So what do you do about it UBI I'm not a big fan of UBI at the moment. Isn't that kind of what this fifty percent Bernie Sanders thing would do? Well, it's its sovereign wealth fund, basically. But you have to find a way to help manage through this transition And you have to, I think, depend on the value create look the whole The whole valuation that AI is predicated on is job disruption. You can't get to those numbers unless you're displacing lots of jobs. Exactly. And and if that's true, then we should grab some of that value that is created and recycle it into the economy to try to cushion the disruption that it creates. This is a bit of a socialist ide idea, right? I don't call that socialism What you cool about? I don't know. Just common sense wouldouldn't that broadly apply to all companies and rich people if there's if they are disrupting the economy and taking an unfair share of that disruption Should we not just grab and recycle back in? But that is the basis upon which every high functioning democracy in the world operates I mean every high functioning democracy in the world has progressive taxation labor standards There's the difference between seizing private property which would be a socialist way of doing things and a communist way of doing things and Oing strategic assets which which are private property. So for example The Dubai government owns the physical hotel buildings that run toby and it leases those out to hotel operators, but it keeps money in its sovereign wealth fund because it says basically a big part of Dubai is that we own these kind of land assets. So do you think we should and take a portion of these companies. The difference was that the Bai government actually developed those assets. Right, but we're already too far down the line within a capitalist society like J. we might say that data is the new oil and data is a common good and it is a common asset that has been sequestered illegitimately by these companies So therefore, you're not seizing what they created. you'll basically say, I'm sorry, but you need to pay a license back to this sovereign wealth fund because you're using a common asset that you were able to essentially seize. You stle it from Africans and British people, you stle it from people in Australia You stow it from people in Canada. The biggest issue that we're having is that we actually the the entire economy is changing. So this happened two hundred and fifty years ago, where the nature of the economy was land and we had an economic system called feudalism and colonialism. And then the nature of the economy was industrialization And we had an economic system called socialism and capitalism And now the nature of the economy is actually fundamentally changing. So in economics, there's four factors of production, land, labor, capital, enterprise. We're now swinging like a pendulum from land through capital, labor, and now we're actually in an enterprise economy. And we need some sort of economic system that reflects the reality of how money and wealth is made. Go to open AI takeake fifty percent of their company and then pay out the profits of that fifty percent to the people I'm always skeptical of any socialist ideas. If it comes from Bernie Sanders, I'm skeptical Okay Bernie Sanders's a socialist.'scialist He says he's a socialist. Well social he' Social No, socialism is You know, the government owning all the means of production Right? Look, there are a million forms of capitalism Right? Every country operates slightly differently and There I don't think Bernie Sanders is saying We should abandon markets. What he is saying is we should manage kids. for the public benefit, not exclusively for the benefit of the owners of capital. And I think that's really different. You know with like an Amazon, they're using the roads And the infrastructure. Correct. So would you go take fifty percent of those companies as well for public benefit and then pay it out to No, but this isn't. We effectively do take part of them in the form of taxes. rightight? Now now the taxes that we impose on those companies, I would argue and Damnid may agree. are insufficient They do not accurately reflect The value that we give them They don't return equal value. So you saying increase the taxes on companies like Amazon? You both agree? Well, Amazon is very successfully avoiding taxes. Y. So would you agree to inc? I think we to have we need to close tax loopholes. We need to make sure that they're paying taxes like all other companies that operate within the economy. Like the guy at the pub that you're talking about pays. Yeah, right? Yeah. a lot Exactly. And the retailers and all that sort of stuff who are in competition with Amazon. Right. Look onene of the biggest issues that we have is we have widespread incompetence in governments, and I'll give you a quick startat on this. in the UK goovernment ten times more likely to die than to be fired for poor performance And the UK government fires people at one six hundredth the rate as normal businesses for incompetence. So we have an accumulation of massive incompetence in government So the idea you can come up, we can come you up with all the best ideas under the sun at this table. We have a fundamentally incompetent set of people who have misaligned incentives we have basically a revolving door between financial industrial compleomx technology industrial Culting Well, the Singaporean government, they basically said that we're going to have a very high degree of meritocracy in government that essentially we promote and fire based on outcomes and merit Singapore is a miracle of governance. Amazing it It's a miracle of governance, but it is a very small place. totally. And perhaps the only place in the history of planet Earth that is benefited from a well meaning dictator. Yeah, right. It's an astonishing story of capability, competence Foresight So what is the solution with this AI revolution? It's I think we all agree that there's going to be job disruption. And there's going to be a new type of job. There's going to be probably a delta of people transitioning to those new types of jobs I've said this before, but I even noticed that within our recruitment processes now, We are really looking for people that have a certain set of skills. We always ask. And it's harder and harder and harder to find those people Well, that's training, that's education and training. It is takes time The school system needs to produce people that you would want to hire. Yeah. and that takes a lot of time. By hiring, I ask the question how deep are you in the AI rabbit hole? And anyone who says, Oh, a lot, I'm like, okay join the team And also, if you think about humanoid robots, Elon Musk's pay packet mandates him to deliver millions of humanoid robots where else he doesn't get his big pay packet. If we think about robotics and humanoid robots coming through, we watched the other day, Figure AI released this video showing a humanoid robot sorting packages on a production line for eight days straight, beating a human sorting those packages on the production line My car in Los Angeles now drives itself as do the taxis, and there's a huge race to make autonomous vehicles I'm sure there's new jobs created and I understand in foresight it's hard to understand what those will be I assume there'll be more human jobs, more sales jobs. only thing that I can say is that the future is small businesses. It's small teams of ten people making YouTube channels, it's small teams of ten people making software. It's like when you have millions and millions of little small businesses, everyone's happier. But if you read what Anthropic released yesterday, they're making the claim that actually we're getting to a point where it will be an individual with a team of agents who can now make a trillion dollar company without hiring a single person And actually, when you said about making software making, they might argue that there'll be agents making that software. Anthropics said the amount of code each individual's producing on their own is eight times. And this one particular quote, which I actually screenshot on my phone last night comes from an engineer at Anthropic who were saying they feel useless because now they say they haven't written a line of code in months and months and months. This anthropic engineer is basically tell it. I come to work This agent writes the code for me and I kind of sit and watch and I feel useless. U So all those examples you gave. o, but what would happen in that situation is you would have a massive deflationary effect. The cost If there was one person doing all sorts of things in the economy, then the cost of that would go to the cost of the electricity to run it, right? So massive deflationary. And then the question becomes, well, what does everyone do? right? What do we all do? Yeah. We do human things, right? Humans always come up with things to do with each other Like if I was to tell my grandfather that there is a job called a personal trainer who takes you to the gym and counts your reps, right? My grandfather would go, that's insane. and I' say, Oh, there's fifty thousand personal trainers in gyms all over the country. So there are always these crazy new jobs that get created. I look at what trust fund kids do, right? Because a lot of trust fund kids, they don't have to worry about money and they don't have to worry about resources and they go find something to do. And it's always weird traverse through You know, potentially the jobs we have now involuntarily go through this transition moment where I think history is quite clear on what happens in these transition moments It gets ugly, It gets ugly. Yeah And then we'll come to, you know, what I'm hearing is that you're saying we will come to some kind of utopia On the other end of this? No No, I don't think. I don't think there's going to be utopia. What'd you think? Look, I don't think utopias exist I do think that markets are the greatest social technology ever invented for creating prosperity and for ennabling the human spirit. That is not because markets are efficient allocators of scarce resources, which is the conventional view Markets are an evolutionary system that enables groups of people to come together and solve complex problems and solutions to human problems is what prosperity actually is. It isn't GDP or money And the best world that you can build I think on E earth is a market economy governed by a robust democracy that robustly includes all citizens in that economy And your answer is small business. And I'm one hundred percent behind you and I wish you all the success. My answer is that a lot of people are going to end up working for large companies or medium companies and that we have to ensure or my part of the answer is that we have to have standards in place to ensure that those companies treat people well enough so that they can be dignified participants in both the society and the economy And that will require Oh innovation in laws and rules and all sorts of mechanisms to enable that there is no alternative if you want to live in a decent society And but the high order bit for me and the reason I work on economics is that the existing economic paradigm basically says markets are perfectly efficient. We should just let them run You know What comes will come. So you're really focused on increasing the workers lives and pay. So if you understand the economy from the conventional point of view Inluding people in the economy is a liberal luxury. that you can afford if and when you have growth And I think everything the new economics says is that including more people in the economy more robustly is actually the technical mechanism that makes Both economies grow and democracies function. So to simplify that, what does that mean Fom a policy perspective. It is very hard to answer in an uncertain future. In an AI if you don't know what's going to happen with the economy, I mean, we have no idea how much job loss there will be. We have we are, I think Dan says quite rightly, going through a transition where the shape of the economy will change. So do we do nothing through the transition No, we aggressively experiment with ways to include more people in the economy Bernie Sanders' idea is an experiment What's the worst that can happen Just think about it What is the worst that can happen? The worst would be is that you give government more money and they leverage more debt. And as soon as the government has the economy of the United States does not need assets to leverage more debt. justreated We just created that. We didn't need that is not true. That is just not true. We have thirty seven trillion dollars of debt All of which was basically given away in wars or tax cuts for rich m. So they can print more money. Absolutely. But these two things, they arere not connected. But the truth is that the worst that can happen by running that experiment Is that there will be a few dozen guys are worth one hundred billion and not two hundred billionars Like that is the worst that that can do. Is that going to be the end all be all? Will it work perfectly? I have no idea. But what I do know is that democracies need to move aggressively to try to make sure that these technological innovations benefit the society broadly, not just a few people narrowly. If I think about the UK, if you implemented something like that here would People leave So if you implemented, say we had an AI company here and you said, the UK is going to own half of it, would that company just get restructure somewhere else because it's digital? They probably would. But now you're back to this old problem. We've been seeing this with the data centers. People are going. I read a report that said the reason openen AI didn't open their data center in the UK, which they said they were going to is because energy costs four times more here So they said, what'' notwhere else Yeah. And would that not be the case here where you'd get this sort of brain drain where And the risk that you run with this Bernie Sanders model? is that we leverage the government's balance sheet or non balance sheet to take out huge debt in the name of our kids and our grandkids that they have to repay. They buy up all these intangible assets, and then they're left holding those assets that may or may not perform and will have debt regardless And then The super clever little anthropic guys say, oh actually, we're just going to restructure to Vanawatu now, leave you guys holding all of that toxic debt and we're going to go run this from somewhere else. That could happen. The other thing that could happen is if let's say openp AI as one example are making one hundred pounds profit at the moment, one hundred dollars profit at the moment, and Bernie Sanders says we want fifty dollars of that profit. China are going to have an additional fifty theoretically an additional fifty dollars to invest in their frontier models in getting a h. isason saying I'll take fifty dollars your fifty percent of your profit What is he saying? I'll take fifty percent of your stock which means that then the US would have a equal voting. And then you're going to get grridlock in terms of voting, right? So if the US own fifty percent of the company and Sam Alaltman, let's say, owns fifty percent, they're going to have to vote on decisions Well, you could put some directors from the from the public on that board And what happens when to a company when you have the government on the voting board? you effectively have this in lots of countries where labor has a seat at the table Right? With one of your companies if half of you your board with the government Do you think you'd be able to be as innovative, move as fast? I mean we talked about the bureaucracy of the government? Yeah. I'm not suggesting that half the should be on the government. Mind you that's what China has as well. China has got essentially the CCP on the board of all of those companies as well. And they work and they move pretty fast. It's slightly different government, isn't it? It is. and there's different levels of competence and meritocracy hierarchy I worry about all of these solutions that empower government because I don't trust government. My entire life has been one thing after the next made worse by government, right? That's my reality born in nineteen eighty one. I've never had a good experience with government. Okay Dude You grew up in Australia You live in the UK If you hate government so much, move to the Congo Seriously, you look, I mean, it is just no one likes to be constrained Everyone wants other people held to a high standard And it just Seriously, there is no liibertaryian paradise and my world. where nobody follows any rules, nobody pays any taxes and everybody lives like a king. If you hate government, there are plenty there are two hundred and twenty countries in the world one hundred and fifty of them effectively have no government Why do't you not move your base of operations to those places because you would instantly be somebody's M I'm not I'm not anate. I'm not an anicist. When a government doesn't fire inc comppetent people. Okay, But everybody agrees the previous government everyverybody agrees Democracy is the worst Econ except for all except all thethers, right? Like Ose. It is easy to these things and say they're incompetent, but it is it is just not honest to say that government doesn't improve our lives. There is literally no example on planet Earth of a high functioning society without big government. I'm not saying well without big government, that's not true Give me an example. Sample. Singapore is insanely big government. twenty two percent of GDP. Okay, but they are involved in every element of people's lives. Myigh competence. They fire incompetent people And again, we're in violent agreement that we should have governments that do that. Yeah. You should work hard on the politics in the UK to bring in reforms that would increase the velocity of competence. because I love that's the answer. Yeah. That is the answer is to work hard to build a government that is as high functioning as they can be. But here's the thing, and I think you will agree Look, Microsoft big companies are equally incompetent. Microsoft bought my company Aquuanta for six point four billion dollars. This is a company that was growing at forty percent year over year. It's been so long. thirty forty percent year over year, seven hundred fifty million dollars in sales, two hundred million doars in EBITDA or something like that, three thousand four thousand of the best internet advertising people on planet Earth And in one year it was gone. Wow gone And they wrote the entire six billion dollars off five years later Incompetence lives everywhere And I just don't think it is realistic to say, o Px in them, you know,, they suck. I just Dan, there is no place on earth without goovernment co creating prosperity for sure. Here's where I put my hope in this post AI world. I want to stack the favor I want to stack the economy in the favor of the small family business and the small business. You I'm one hundred percent with you. Yeah. I agree. I agree. The question is, how do we get there? Yeah. And you and I are completely aligned in some ways. We need to aggressively balance power in the economy to the biggest from the biggest most exploitive companies to small and medium sized businesses. So I see big government and big corporate sucking the life out of little people and little businesses. And I think you are ab no doubt in some cases, but the only thing in human societies that has the power to confront big business is big government, right? There's In the history of the world, there has never been another force that had the power to address this problem. And the reason I care so much about this economic paradigm is that all of the problems you were describing. Yeah consequence an economic paradigm that was designed to create those problems. That's why we are in the box we're in. is because neoliberalism literally said the bigger is better. We should afford no protection to small businesses, that we should actively advantage the largest players, that Free trade is good for everyone. All of these things that weren't true and and ended up advantaging In this room, me effectively and you know, a few thousand people from around the world and disadvantaged everyone else. And I think the starting point for change is addressing the fact that we just understood economic cause and effect inadequately The things that we thought would lead to growth led to concentration R? And the things that we thought were bad for the economy. in many cases those were good for the economy because look, again, you know the UK so much better than me and I hate to argue with you about it. But the truth is that you cannot sustain capitalist system unless most people are paid enough to buy the stuff that the system produces. And there has to be a balance. And again, in the history of the world, there is no example of a thriving economy that did not impose those standards or create through some mechanism the countervaililing power that enabled the owners of capital and everybody else to work together to benefit everyone in the long term. you and I are in so much agreement Yeah on most O most ofikech of. Yeah. And what is that inch? So I've seen Nix policies implemented and I don't feel it's enough And the reason I don't feel it's enough is I think people are more than consumers. They're more than wallets. Okay, you've only heard me talk about the minimum wage and something else. You haven't seen all the pol these stuff. But the missing piece for me is ownership when people Houses They felt really good about communities. When people had small businesses that they owned, they felt really good about their communities, And when people own some shares in the overall economy of the fastest growing companies in the economy, then they feel like they're participating. So for me, the non negotiables of fixing this problem is that people can easily own a house, own a business, and own shares in the fastest growing economy. Yes, yes, yes. And how do we get there? Yeah Yes, yes, yes, I totally agree. And I think I just think that Dan and I have a slightly different view on the path. I think capitalism is ownership. It's ownership.. That's what capitalism is. othertherwise, If you don't own anything, you're not a capitalist. If we youre but the sorry, you grew on the outcome, but the path.. But How did Nick get rich? Like Nick started companies. He owned he owned a family business He leveraged the family business into an investment into Amazon or invest.'s own, but it's ownership, ownership, ownership and did a lot with it. Okay, right? But I'm saying let's be fair. how are they applicable? Youre thinking other people should do what Nick did. Yeah, but it's hard to get born into a family that owns a small business. Well, if there's more people who own small businesses, then there are it's easier. it is easier Right. I just want to I do want more people What do you mean by this? Well it's all about how how you get there, right? you overlooked the fact Being born on third base, we should aim for more people to be born on third base if more people third base is coming from a family that own a small business Yeah whose parents earn enough income to enable all of that. rightight? And look, not everybody who is affluent, in fact, a tiny minjority of people who are affluent arere small business owners, right They are mostly doctors and lawyers and professionals of a variety of who worked I'm not against m in big companies in middle management roles. and they I'm not saying everyone should be a small business.. So anyway, I just think that I think the high order bit here I mean, for me and this may sound like too squishy for you is that is that Societies have both the right and the responsibility organize their economies. in ways that benefit everyone. Is socialism the answer? No, socialism is most definitely not the answer Because socialism, again, we need to operationally define that term. Yeah. If Socialism means, look it up in the dictionary, the state ownership of the means of production That is a catastrophe Right? And it's a catastrophe because all socialism can do. is split up existing prosperity in a fairer way It can do that The problem is that socialism does not know how to create more prosperity. Okay So for one minute You can make everybody better off, but ten years later Everyone is poor. becausece because this is the power of markets is what markets do as evolutionary systems is they generate increasing prosperity. That's what solutions to human problems is, right? Going from to antibiotics is economic progress, right? And the beauty of markets is they are evolutionary systems where every business effectively is an organism competing to fill a niche Yeah, which is the perfect product for whatever market segment they're creating. You are a canonical example of this, right? What you have done here And thank goodness for it, right? Because in a world where there wasn't capitalism, there's no way you have effectively independently created what was a television network It's miraculous. Like you have more reach than MSNBC, dude. That is the power of markets, but You know, they have to be harnessed to benefit people broadly. This does not mean that the profit motive shouldn't exist. Inh how though, this is what I'm trying to get to. And this sounds a little bit like there's this middle ground we're like playing with where socialism on one end is, okay, you know, short term, whatever you said. Th on the other end, you've got this extreme capitalist approach. And I was those are the Lis fair capitalism and this socialist status control. Both of those things are terrible ideas. Am I right? something in the middle. On the left side, then on the socialism side, you get lower growth in your economy over the long term. Correct. Okay. And then in a capitalist economy, you might have higher growth, but then you have more inequality. Yeah. correct. And the sweet spot and this is This is One of the most important, this is an important matter, one of the most important points I would like to make. is that all of the evidence suggests that when you come to the middle And you have a market economy It is actually ively managed to include people That is the growth sweet spot. You have more growth. more growth. Absolutely. GDP growth rates in the United States were four, four and a half percent for decades, forty, fifty, sixtyies And then as soon as the neoliberals took over, in nineteen seventy five, GDP growth rates fell first to three percent and now to two percent when they did want cut taxes for rich people, deregulated powerful people, and suppressed wages for everybody else the most important Socioeconomic fact, as I've said many times before, in the United States is that the median full time worker earns about sixty thousand dollars a year today If they had maintained their same share of GDP since nineteen seventy five, instead of earning sixty, they would earn one hundred twenty thousand dollars a year. So you're say there's no trade off in the middle Because there's tradeoffs on both ends, right? We just describe the tradeffs.'re say that the middle there's this That's the sweet spot. Wh where there's maximum amounts of growth Maximum amounts of participation, maximum amounts of political stability This is what Darrenasam Muglu and James Robinson call the narrow corridor perfect balance between Lisese fire capitalism and socialism. I mean socialism is stupid because it kills markets. but this impulse to more fairly share, let's call that where socialism comes from, this impulse to have a society which is more egalitarian. But what all the data suggests is that when you build a market economy basically tries to make sure that everyone participates where workers get a fair share of the wages. where as the company, as the economy grows, as it did for years and you've got another You have a you have a you have a great graph in here So for decades As productivity grew Everybody benefited And then in the seventies, it decoupled As soon as it decoupled, GDP growth rates fell Right? If we had and all of this All of this was a consequence of policy of policy. So here's another thing the new economics teaches is that there's this idea a middle class, a thriving middle class is the consequence of economic growth. that if we just let the economy grow, we'll get this great middle class And that is because Economs assume the economy is something called ergotic. Now Eergotic means Let me show you the difference between two games. One is otic, one is non orgotic Paper scissors is an ergotic game And what that means is The outcome of the next game has nothing to do with the game before. Yeah, right Monopoly is a non orgotic game. and in monopoly No matter how much how many times you go to mononopoly school, If you play a game of monopoly long enough, one person will own everything and everybody else will have nothing And that is what a market economy is. It is characterized by luck dependence and compounding. The past. The p Well, it's the past, right? Where you start? Yeah, right Some of us started on third base. Some of us like you, as I recall, started on actually first base or Homeple or something like that? Well, I think yeah, probably second base. Okay, maybe second base, but whatever. But we parents that love me electricity at your house. Yeah, Okay, fair point, right? And you're very capable and good looking and all the rest of it, right? could it No, I mean, just if we're just being honest, right? We're just being honest. You had some natural advantages You know, in Monopoly you land on Park Place the first role You're rolling. You get four good roles in Monopoly. you're going to win the game, right and compounding The better you do, the better you do. And the thing about in an onarchotic system is that both advantages and disadvantages compound Surely you know people in your life who've had a couple of things of bad luck, right Yeah. And then they spiral into oblivion, right? And so what that means is that a middle class and thus a high functioning society with social cohesion is always Always a deliberate construction. It is always created by policy Always All of these things that we are pushing back against him and his way, me and my way, are a consequence of basically an economic theory that said to policymakers, do it that way And it was a mistake And we should recognize that mistake and try to heal these mistakes, which we can. We can have a great society, we can have an ownership society. We can have anything we want We just have to decide to do it and not let A small group of incredibly rich people dictate the terms of the economy. This is within our grasp. What are your thoughts on? I agree in principle with all of that, especially the last bit a small group of very, very powerful people dictating the economy, meeting up in Davos, coming up with how our lives should live. There's more to the story here. In the early seventies, they decoupled the dollar from gold and they created the fat system, whichant could print money that inflated assets that financialized It financialized assets, including the family home, which meant that as soon as we could print money, we could inflate the value of family homes and make it out of reach of most people. Well, and then finance took over and became twenty percent of the economy. we ended up with r rest of this. Yeah we ended up with these two massive institutions, which is the technology industrial complex and the finance industrial complex. and those two institutions driven a wedge in society. My only difference with Nick and it's a small difference is that I don't believe raising the floor is going to be enough I really do I didn't say it's enough. It's table steak. Yeah. And my experience with it's a minimum is because it becausecause I've seen the minimum and the pitchfks are out here in the UK where we have that minimum My my worry here is that where we are The technology economy and the finance economy is eracing as if it's in a car And then all of the workers who are selling time for money, labor for money, it's as if they're running and we're saying, ah, you guys just need better shoes. you need comfyious shoes. If we give you a pair of Nikees, will you guys be happy? And it's like, this is not going to close that gap.. We have to acknowledge that technology and finance are the two like big funds and big tech the company basically hollowing out the middle class And if we don't acknowledge who the real bad guys are, when I say bad guys, I'm not sure they're real bad guys, but essentially systemically systemically they're the bad guys. Yeah. We need to essentially say, hey, big finance, big tech, you can't financialize our houses. That's for us to live in and for us to own. And you also can't just eradicate all of our little small businesses We need to tip the scales back in the favor of those small businesses because Little towns, you go into any town in England, like little towns in England, the thriving towns that everyone wants to live in, they have lots of small businesses. They have a butcher baker candlestick and the maker type. L stuff is going on. By the way, the best high street in London is the one I live on. Mal Malbon High Street. So you agree. A hundred percent. Yeah I've got sixty seconds and I'm going to show you how much I can get done because of our sponsor called Whisper Flow. It's a business I invested in that turns your speech into text in any app or device. I'm going to post into our Slack channel, which rewards whichever team member conducted the most experiments this week. Hi everyone. hereere is this week's experxperimenter of the Week. Congratulations to the DiireversCO trailer team which is Ant, live, Dom, and cam. You guys have one Okay now I'm going to open Gmail. So here is one of our founders on an email chain that I want to connect my team with. All I have to say is add my team's emails and Whisper will do exactly that. Now a quick message to Juan, who does my schedule every single week. Hey Juan, it's Stehven here. Can I record on Wednesday at two PM? Aually no, do not let's record at three PM on Wednesday Whisperflow is four times faster than typing and it is incredibly easy to use. So if you want to give it a go, all you have to do is head to whisperflow. ai slash stven to download it today I've done almost seven hundred interviews with some of the most interesting people in the world. and one of the things you learn, which is unexpected is that vulnerability is the doorway to connection. And after sitting here for two, three hours with a guest, I feel a deep sense of connection to them. And as they leave, what I get them to do is to write a question in the diary of a CEO. We've taken all of the questions from the diary of a CEO We have the question ere on this card with the name of the person that wrote it. So you can sit at home as I do with my fiancee and my colleagues at work and other people in my life, whenever we get a minute, we play the Dire ofversO conversation cards. And it is incredible. what happens. these are great if you're in a romantic relationship and you want to connect your partner more. These are also great if you're in a team and you want to bond your team together. And I have to say they're also great for families that want to learn more about each other and that need a good excuse to spend some time in a digital world in the analog environment connecting human to human. It is remarkable what the right question at the right time can do. Go to the diary. com And you can get these conversation cards right now One thing I find interesting is you're saying that there's this sweet spot in the middle. Yes where you still get the the upd. You get dynamism? You think there's a sweet spot in the midde. It's a very narrow sweet spot and it's very hard to achieve because Germany has really tried so hard and they've like Their economy is collapsing. their economy is going so badly at the moment. and they've tried everything they've got workers have to be on the board, for example, of every company, you've got to have a worker on the board. So they're like doing as much as they can to do inclusion and the German economy So where is it work? Okay, but here's the thing is it is simply not fair to say the German economy is collapsing Like, have you been to Germany come on. Like have you been to Stockholm? Like these places are definitely D definite a function. Yeah, there's definitely a forward momentum But the German car industry is getting hollowed out right now. China, right? China' than that. Okay just because Workers are on the board of German companies And German people are unhappy. You can't necessarily connect these things. I just want to acknowledge though, that like there are places like Dubai, which are very close to laayseis fire capitalism with a sovereign wealth fund Just just h just hold them on. If you talk to someone who lives in Dubai, they freaking love Dubai. Like they are they're the happiest people like and they They talk millioniresrepreneur. entrepreneurial people. the rich people Not Not the poor brown people who are well, mean because they bus Indians in don't they? Well, they yes, and also when I talk to a lot of the Uber drivers there and I talk to people who work in cafes there and all that they're all quite devy as well. Isn't it? that's because their other options are horrific. Yeah. it's probablyinitely more extiary quality isn't it 's extreeequalitys extreme quality. But because the place is growing, until recently, obviously with becausecause the place is growing, it feels like there's a rising tide for everybody. There's something about economic growth that makes people very, very happy. And there's something about a lack of economic growth that makes people miserable here in the UK, for example. Okay, but just again Dubai is a place The UA has been powered by the most extraordinary gusher of free cash. probably the planet has ever seen. I mean, you can look up on your iPad there, the like the tailwind that economy gets from the Unlimited resources. I wouldn't say that's why people love to buy it. They love it because of the entrepreneurial vibe. L love it Pay ambitious people Yeah, so this is the rich excitement Rich I see people I see young No, I see young people who want to have a crack. And that because they're rich relative to the people doing the work. or labor. Well what they're looking for is a place where their work will be rewarded. Let's imagine the UK where your ability to get onto capitalism, your first million or, your first two million is very easily low taxed in order to get things going for you economically, I just want to see a situation where ambious that idea. Yeah. like your're ambitious people Like what I hate is that I see these young people who are really super smart. I wish they were here building and they're like, you can't succeed in the UK. They'll just tax it off you. As soon as you earn anything, they take it. What if you're not And they leave I think you're benefited by a lot of the ambitious people. So when when you get one if you get one in ten people who are entrepreneurial or one in one hundred people who are entrepreneurial, they're creating optionality. They're creatinganies US is this? sort of set up, you know, the American dream This is more of a US approach, isn't it Well what we have there is higher inequality. I'll give you to one extreme, the US, you hit the top rate of income tax when you hit seven hundred thousand dollars. In the UK, it's one hundred thousand. And it immediately goes to sixty percent tax, sixty two percent tax. And then it drops to forty five percent After that like but there's this kind of like is it really? Yeah, it's this it's this it's this weird know that this insane thing where you basically pay twenty percent, forty percent, sixty percent, forty five percent and it's this kind of But to the point I should probably fix people people the US. the US approach sounds mean're leaving to the US. Like a lot of Britits are actually going to And the US has an inequality has higher inequality Which means you' probably be more likely that the pitchforks will come out. Well for an ambitious person that don't care about inequality, right? inequality is the opportunity to get ahead. Yeah, they might not, but from a social perspective, the pitchfks are probably going to come out sooner in the US because of that inequality than in somewhere else They seem saying they seem to be coming out here in a big way. L here they're coming out here, but they're also coming out in the United States. Look lookook at Zach Polansky is gaining a huge political movement. Hammand Dani in the UK and' sorry in New York We're seeing rise of socialism in the United States. Okay, but Zoran Mandami calls himself a socialist because he does not have another word. for what he is doing. He has said seize the means of production. He's said it, and he' said, take houses off landlords Like he's a hard carrying socialist. Yeah. But he hasn't done any really socialist things. I just think that there's a bit of a confusion. Asking wealthy people to pay a little bit more tax is not socialism. standanding up grocery stores in food deserts because no grocery store will will will will do it because it's not profitable enough is not socialism This is the government provisioning benefits to citizens, fixing potholes, making bike ramps, whatever the stuff he's doing, these are not socialist things. What they are is not strictly neoliberal things, which is just like letting rich people run roughhod over everybody else. The thing that I see with, say, a food desert and a store is that the tax system is so punitive that A small opportunity like setting up a grocery store with all the taxes and all the regulations and all the stuff the government puts on you, it's just not worth doing it. There are better opportunities out there. Like I'm not talking about remove it for rich people. I'm saying for startups for small businesses, for businesses that employ less than two hundred people, if you basically create veryive very positive conditions for small businesses to get started They will set up a grocery store in a bad neighborhood because they go, yeah, you know what? I can figure out how it works in this. Do you think there's a chance that we have a bit of a bias as entrepreneurs? Everyone at this table is an entrepreneur. Yes. And for whatever reason, I think a lot of mine might be some like, I don't know, trauma or whatever, I had a bias towards setting up a business and taking that risk, whereas like my other three siblings They didn't do that And I don't know what I did to have that bias within me Like if you really think about it, it was probably something my parents didn't intend to do whichich meant that at eighteen when my four three siblings went to university and sort of followed that more one could say safer path, well, yeah, safer path I dropped out. How angry were your parents when you? Oh, they didn't speak to them, My momum was Yeah. My mom's Nigerian as well. so she didn't She to school when she was a child, didn't get an education can't read. It's been a tough t understatement of what happened. But for whatever reason, that's the path that I took. and I can acknowledge that I'm in a bit of a minority Yeah And I think I sometimes consider like maybe I don't realize that through privilege or through some genetic privilege or whatever, I had this particular orientation towards like entrepreneurialism that maybe other people don't always have and that means that They start the grocery st. I get crucified in the comments. Not everyone can be an entrepreneur, right? Yeah I'm not saying everyone can could be an entrepreneur. I've never said that. But the grocery store analogy is someone would start that grocery store if it was easier. Well not everybody work. There's always a risk to reward ratio and government brings in all sorts of regulations and government only really thinks about big businesses. If you talk to anyone in government, small businesses don't exist And they just simply think, why hasn't Tesco done it? or why hasn't like Walmart done it? Yeah. I've never started a business in the UK But I can tell you that in the United States, the barrier to setting up a grocery store in a food desert is not the regulation, it's safe wayay It's the supply chain. it's The it's all the stuff that you've described, which makes it incredibly difficult for for for somebody to operate A single location grocery store like your friend's power. Yeah. And this is So what would you do about that So what I would do is I would would And again, in the United States, we used to have lots of laws that pointed the economy towards small businesses. So if I was in charge, I would impose a much higher minimum wage, but I would do it progressively. All the labor standards, all of the regulations would be imposed progressively. And in terms of regulation, I would make it like for a big company, there's a lot of es, right? You have to follow every rule to the te for a small business, You have a lot more flexibility.. It's because we need the standards It turnurns out to be really hard as a single proprietor, even to read the manual, right to know what you're supposed to do. So to me, it would all be progressive. So it would be easy to get capital, easy to start a business, relatively unencumbered by regulation, although constrained to a certain extent some extent. There are terrible things that small business people do too. Wait, How dod you make it easier to get capital Oh, you could have government programs that were designed to help We help businesses get off the ground. We have the British Bank that underw underwrites for the first twenty five thousand of loans. Yeah we small business administration in the United States did a lot of that work. Yeah. So we have a lending institution here that is seventy five percent underwritten by government for twenty five thousand pounds startup loan Right, So there is some schemes that can work. I started all my companies on a credit card. The key thing is there's a difference between entrepreneurials and startups that are intending to scale and just small businesses that want to exist as a small business. I'm really big on the idea that we want communities that have lots of small businesses, even if they have no intention to scale and exit and any of those sorts of things old fashioned thing. where you just had a grocery store. Yeah, and it's a good and it's good you weren't trying to create Walmart. Yeah. You just wanted to run a grocery store. It's funth though, isn't it? Because if you want to be CVS or you you would have you would have be a network But with a grocery store idea if you've got mum pop grocer store here, then next to, you have, let's say, I don't know, in the UK, it's called Spa, which is a grocery store seven and eleven The problem is if those are next to each other And one has economies of scale Ice seven hundred and eleven can buy the cucumber Yeah for twenty percent of the cost of the mum and pup shop then if you're on that street, the seven hundred eleven is gonna to survive. That's why we tilt toward. The United States used to have laws that expressly prohibited that And why did they get rid of them? neeoliberalism. So they got rid of the restrictions on Yeah, there used to be express laws to make sure that big companies could not buy raw materials cheaper than small companies Like when I was young, when I was your age, if you wanted to buy a competitor, You were sweating bullets. Because you that had to be reviewed by a body. and if they thought that you were consolidating too much, they would just say no. But if I think about all my friends that have opened retail stores through their companies, and they only do that when they get really big because their e comm business is supporting it. So if you think about, I know the gymssharks, the represents otherutactive. So you can't Okay, with respect to retail, you are largely correct. It depends on what kind of retail Like you could have a gym, you can't e commerce a gym, or you know, there are all kinds of retail, some of which is somewhat immune from e commerce and someone which is getting destroyed by e commerce.' It doesn't matter if we're talking about retail. They were regional manufacturing companies, regional everything.. And it all went away. And you have never experienced a world in which that used to exist. Like your entire business experience is this sort of neoliberal world of giant companies True And the world I grew up in We were like you young. I'm all, right. But I remember what it was like to go to the video store and select videos from the video store. I remember what it was like. Yeah. Like I remember going to the CD store and listening to music and talking to the retail employees when I was growing up T kids worked at the CD store, the geeigky kids worked at the bookstore, and everybodyed everyone else worked at the grocery store. And all of those business models are gone. And this is what I mean. We need to kind of tip back towards small business experimentation being protected and all of that. The other thing too, and I should raise this about minimum wage and giving people more money The bottom half of taxpayers in the UK pay nine point five percent of all their income taxes The government could remove taxes off of fifty percent of workers in one move and it would cost thirty three billion and you just get rid of that. And then every single person in the bottom half of income earners gets a ten percent payise to fifteen percent payrise, right? I love it. So where do we get the thirty two billion from? Just keep in mind, their budget is one point four trillion I know, I know, I know. but we're going to point forty trillion. We're talking about this I I take fifteen million people Yeah. I agree. I'm just saying where does the money? Because I know what's going to happen. Kirstam is saying they found this twenty million twenty billion dollar black hole in the finances And that's the reason why they're saying they've had to cut back on pensions and these kinds of things. So if we add another thirty billion, that where do we get the money from? You're talking about reduced the amount of administrative burden to tax fifteen million people and keep on top of the tax on fifteen million people Just the sheer volume of people who have to work at HMRC. I completely agree. All of this insanity I'm saying Wh where does the money come from? Yeah. So out of one point four trillion. I'm pretty sure we could find half of one percent of it or whatever to get these number of people out of tax. I think we could tax big corporations who are taking the piss And I also think the economic spending rounds of getting those people those The poorer half of people should not be paying tax. If you give them more money, they'll spend more money, right? Okay. I agree with you. you're saying Big corporations more in the UK at point of consumption. Personally, I would make it like it very similar to a broadcast license that it's a fixed fee that's very hard to wiggle out of. So if I'm a Let's say I'm an open AI Yeah, you might have a broadcast license to pay to access this market So you're going to charge, say you say I'm going to charge open an areI four billion, five billion to Well For example, Facebook is very much broadcasting videos and content all the time. so is YouTube, so is Google, all that sort of stuff. So you just simply say, guys, the cost of doing business in this country, if you want access to this market is a fixed broadcast license fee of five hundred million a year or whatever it is. And you just say based on the number of views that you guys get and how much attention you suck out of our economy We just essentially tax the attention. You're literally, if people are spending an hour a day on their phone doom scrolling, that is a broadcast. You're broadcasting to our people. So therefore, we've got a broadcast license. So those are the types of things that I would look at because they're very hard to wiggle out of. Do you think then these companies like an OII would then as we said earlier, just increase subscription fee in this market And you see this sometimes where in certain countries something is cheaper. I remember going to the United I used to go to the United States to buy my Apple products because it was cheaper there. Yeah. And then in the UK, it cost me like not even a little bit, it was like hundreds of dollars more to buy a laptop here. The same laptop in this market versus this one different amounts of money. They may choose to try and pass on that consumption tax to consumers. Maybe they do do that. Maybe we could try and avoid maybe we could try and legislate against that. that they have to essentially be on parody with where they are in other markets, that they have to charge parity U if we don't if we don't do anything We essentially have nurses and, you know like teachers and all the people who are in the normal fifty percent of the economy whose job is now to hold up the economy while Starbucks doesn't pay taxes, while Amazon doesn't pay taxes while Google doesn't pay taxes. And Steve, I think all of your questions are really, really good, but they all point to the same thing Wh which is that, you know, the economy is a collective action problem Right? And now it's a global action problem. It's glal It's a global collective action problem And if we want If we want robust solutions to these problems, we're going to have to robustly coordinate activity across the world And you know, like for during the Biden administration, they tried really hard to do this global profit tax.' but that collapsed under the weight of pressure. All you know, again, all of your questions, I think are really good, but they all point to the same fundamental weakness of governance. And Nick, you need to talk to your billionaire mates and also say If we don't start investing in the economies that we do business with, which you are saying, right, of course R? I just saying It's a lonely business. I'll just tell you. But like it's like those CEOs of those companies you know, you drain this, you drain the whole economy out and then where then what next like I think on this passth through problem, I was thinking looking at different ways that this ends up being applied. So if you think about the big Mac, The Big Mac costs different things in different states, depending on how much tax that state charges. So in Oregon, the Big Mac is eight dollars, whereas in Chicago it's almost nine dollars If you think about like bookstores, you can buy one book on the high street for twenty dollars, the same book online as ten dollars because they're passing through the cost. So it's conceivable that if we we say to big corporations right, you guys are going to pay a bigger tax to sell into the UK than the UK consumer They might pass that on to the UK consumer And they might look at different markets because you know, they might say as a company, we want to make thirty percent margin. Also the UK way to make thirty percent margins in the UK is to bump the consumer could say I'm going to use a VPN and pretend that I'm going to be in a different market and pay a lower price Yeah. And doesn't matter. You still have to pay the broadcast license if you want to be available in our country. These are hard problems and we need to know who is the person that we're targeting the black rocks of the world, it's the big banks of the world. It's the big mortgage like I I had a private conversation with the CTO of a very large company, technology business And he was saying to me, he goes, I don't think youK understand the situation that's putting itself in the EU with all this regulation. He said to me Um We sell this particular product It' a physical product. And because the UK and I think EU have put this new law in where you'd have to have removable batteries. Interestingly, the unintended consequence of that is we have to stock more lithium batteries, more of them go into landfill. and also your devices break because they're no longer waterproof So you're going actually, it's harming the environment And also, he said the thing you guys don't realize is that you're actually not a big market anymore for us. And because South America's coming online, we actually don't have to sell the product here. And you think about this in terms of some of the regulations around AI as well When a new product launches on AatBT? Yeah It goes in the US first because of regulations. And then maybe no go in the US first because it the biggest market. Biggest market, but also we have our regulations around some software and GDPR and all these kinds of things means that sometimes we just don't get the features And sometimes in our history of building the previous business I was in As creators, we would sometimes have to wait twelve or eighteen months to get the same tools that my competitors in the United States could use monetization tools. They'd have the monetization tools first, and then we'd have to wait eighteen months. The economy is a set of trade offffs. L that is the problem. L economics is called a set of the actual definition of economics is making trade offffs and picking a trade offs. I totally get it. L regulation does actually suck for consumers and for businesses And like the EU is now over regulated to the extent that you can't even take a lid off of bottle without know the government being involved with how the lid comes off the bottle. And it's killing It's killing our dynamism. We are really just like in the US is under reggulated and if you buy chicken in a store, and don't cook it couldould be anything. One in three chances, you'll'll you'll get either E coli or someone else. Well every and your life expectancy is lower exactly. And everyone who trade offs. Everyone who eats in trade offffs comes back from the U.S and goes, oh my goodness, a a height eating food in the US. It's all trerble. It's all trade off. Does this not then mean our ultimate conclusion of this conversation is around morals and ethics around the trade offs that we think are the right ones to make. Yes. And so it's a question really of morals and ethics. Yes Human flourishing Yes A hundred percent. The purpose of the economy is to improvean human lives. The way to do this is to massively maximize small business power because when people it's more complicated. people when people have when I have to work shoulder to shoulder with my workers, I treat people well. When I'm a mega corporation who have faceless workers down on the factory floor that I will never meet, I will never sit next to on a plane. I will never come in contact with my workers. I can treat them however I like. Why do you think that's reductive Nick? Well, I think that what Dan is saying is true and massively insufficient Of course, I mean, we're in violent agreement about the small business point. Like I don't want to be Naive even think we should go back to the sixties or something like that. Like I don't think that's true again, here's what the new economics shows. Corporate consolidation inccreases prices lowers wages decreases consumer choice decreases the rate of innovation And I one hundred percent agree Because innovation, again, the conventional view of innovation, the conventional economic view of innovation is this sort of great man theoryies. you have this smart rich guy who's sitting somewhere and he He or she has this amazing idea and that's innovation. That is not what innovation is. Innovation is always combinatorial Technology makes itself out of itself You start with a rock The rock was our first technology. and you did a lot of stuff with rocks And we also had sticks. A actually, sticks were our first technology When you tie a rock to a stick You have a hammer beer An arrow an ax. A shovel It goes on and on and on What that means in terms of policy is that because innovation is combinatorial the more diverse people in a network together with different ideas and different sets of experiences, that is what drives the rate of innovation. this is mathematically demonstrated that a diverse group of people working on a problem absolutely consistently outperform a homogeneous group of high performers. And then when they become really successful, which will happen eventually. Yeah if you let that system play out, you have this inequality unless you intervene at some point and recycle it. And then when you go to recycle it, You get back to this issue of us having needing global cohesion.es, because some people won't want the recycling. Correct and they'll say, well I'm just going to go to Ireland or I'm going to go to Dubai I'm going go somewhere else.rect. And this is maybe a function of the new economy where people can just get up and leave and take their value with them. Yes. And this is the conundrum. This is the conundum. The meta issue above the conundrum is recognizing that citizens have both the right and the responsibility to want to address that problem. And and you grew up in a world where it was illegitimate to address that problem that that economics told you Don't worry about those problems The market will sort it out. Is there like a radical idea of how to solve this? Do we need like all the very, very rich people in the world to come together collectively and say We're going create a new model. how do I don't know, is there any radical ways to solve this stuff? or is it just all trade offs once again? One of democracy. One of the big radical ways is breaking up companies and it's unthinkable. You know Jeff TR did. You know Jeff Bezos, right? Yes, I do. So it was in my wedding. I wonder if he would lose more sleep about higher taxes or having his company broken up Oh, for sure brok. Because if you broke up Google from YouTube, if you broke up AWS, Amazon Prime and Amazon, if you like the biggest thing that scares the billionaires is backing competition with the market. And it's like, oh my goodness, I don't wantan to compete. I've got this amazing monopoly that just works one hundred percent. Right. So is that perfect solution? Because I was thinking Is's not a perfect solution.tty good solution.t least worst solution available. It It pretty It's pretty good. It's pretty effective. I mean, this is what Teddy Roosevelt did in both Th these companies are not making any money though. They're like being subsidized by the mothership So like in an let's the Amazon prrime. That's competing against netics dude, these companies make money where they want to make money Yeah for tax optimization and strategic reasons I mean, you know, like when we started Amazon dot com, I'm not sure if you guys remember, the whole hit on it was it's not profitable, right The secret to ammazon. com's success is the negative cash conversion cycle Right? for Virtually every business on planet Earth To grow requires capital Right? For all of your businesses, growth requires capital But for amazon. com an order the website You take an order instantaneously transmit that order to a book warehouse, which has all of the titles in stock It's shipped the next day It's received the next day You ship it out Hit the hit the person, hit the person's credit card But then you don't have to pay the bookseller for ninety days. Right? And what that means is The B bigger the company gets, the better cash flow gets whether you're making money or not we didn't have to make money Because we most companies have to make money because if they don't, they don't have the cash flow to continue. Like Amazon Prime businesses and ye. And so there are things available that we could have made money in one minute just by increasing our prices by three or four percent. Yeah. These companies are also not worth trillions of dollars because they're not profitable. They're worth trillions of dollars because they are making money. But the issue is is that they have strategic monopolies and if you really want to make them lose sleep You need to break up strategic monopolies. You need to say there's an actual limit to how big a fund can be. There's an actual limit as to how big a strategic monopoly can be. You can't have things that hedge naturally against each other and prevent real competition. So like these things are ways of and also ties up their attention. So while they're thinking about not getting broken up, they're also not competing with all the other guys out there. like it's basically capitalism runs on competition. And this is the one thing that we've missed The real less competition? Yeah. like when Adam Smith said capitalism works, he said it only works when there's competition. If there's one bakery in town anyy bread at any quality at any price is what you have to pay. As soon as there's two bakeries in town, It has to be the best quality at the best price. Although with two, you can collude. But if you have five it's very hard. Aon So Amazon has a monopoly A strategic monopoly. So what does one do with Amazon You break it up? Yeah. into what? AWS, Amazon Prime, Amazon retail. Fine, but theyve still got monopoly in online commomerce theoretically. Yeah, well it's just harder it's easier for someone to come along and compete. Right now, it's very, very hard for me to compete with Amazon because they are pulling in cash from AWS. they're pulling in cash from all these other subscriptions. There's so Amazon basics you could break up the retail. You could say you can have a bookstore, you can have en an electronic store, you can have You can only You can't be the everything store So you could there's all sorts of ways that you but you have to acknowledge when someone has achieved a strategic. think that's a good idea? Do you still own shares in Amazon? No, sadly Okay. I wouldn't be here talking to you guys if I to No, no, no,'s true. That's true. No Dfite won't come.. No, sadly, I sold my shares. but you know, I am open to all of these ideas Because I know, I mean, I am completely with Dan. I know that the world would be a better place if these companies were smaller and we had more competition and Again There' not there are no silver bullets to these complex problems the world faces. We are not at this table going to come up with this algorithmic idea that is just going to make the world a better place. None of these solutions are perfect. They are always going to be the least worst thing that we can come up with But I think at the level of principle Um living in a world where we try actively to limit concentrated power in all its forms where we try actively to include people in whatever way, whether it as entrepreneurs or just workers as robustly as possible where we try to make sure that people are engaged enough in the economy so that they'll be supportive of the democracy, not want to burn it down These are high level principles that I think reasonable people can agree with And they come into conflict with people like Elon Musk and Jeff Bezos and Mark Zuckerberg. who do not want to live in that world Who want to live in an oligarchical world And I just think that We should Have that fight and win We have a close relationship with Alaska, lees a question for the next, not knowing who they're leaving for. I think it's quite a revant question. I'll ask you first Dan The questestion is in a world with so many challenges, what can we do to restore hope and trigger engagement Getting back to what we were talking about We need We need people to know that the g the rules of the game have changed and that the rules that we grew up with where we grew up in a particular industrialized, late stage industrialized world that had those rules. And we now live in an early stage digital revolution world And the thing that gives me hope is I know how the rules of that world work, right? Someone explained it to me. they actually explained, this is how you start a business, this is how you grow a business. this is how you make a minion This is how you hire some people. This is how you get a great team working side by side gave me an enormous amount of hope. I have a pathway out of where I was born and the wealth I was born with And where I am now, someone explained to me the pathway, Here's how the rules work and here's how you make success One of the things that makes people feel hopeless is that they're stuck in a game where no one explains the rules. So explaining the rules. So I would say we need a schooling system. The thing we don't talk about enough is that the schooling system has to explain to kids the relevant information as to how to function in the current economy So I played that forward in my head and I was thinking okay, you get a million kids and you explain all the rules to them At some point, if you just give it a year or he said they all knew the rules There's still an edge And some of them would figure out the edge. Ttally. And then you've got this pocket that no Everyone knows the rules, but then others know this particular way to beat the system. and that could be with, I don't know, they learn about AI, they learn about whatever. and then you're kind of back into the same place. And you were one such person who got the edge. Someone came to you went you know they're saying the rules of this Actually, there's a way to get an edge. And you had it within you for whatever reason, to capitalize on that ge and now you're a multimillionaire. that edge. So So there's always going to be the rule and then the rules get there's noire. There's no single day after you explain the rules to someone, there's a new set of rules. The only consistent is change. and at the moment, most people I encounter who have never had any explanation going on about how the world works now They are hopeless. They feel completely hopeless. as in like I see kids who are sending out Um CV's to Microsoft or to like some major company, they don't realize that those companies are gettingty thousand five hundred I get it. Application dayay after you explain the rules to them The rules are one day less relevant And so it's true. you'd have to go to school every single day. Well yeah, lifelong learning. You do have to do lifelong learning. Like there is lifel part of the rules is lifelong learning. That is actually one of the rules, which is the only consistent is change. It sounds like you're saying though that if we teach people the rules of business then people will have more hope but there's so many people that I know, like my fiance who She She cares about something else, much more than she cares about business, she cares about life. She just started she set up Baly breathwork and she bug. Right? She was able to create balley breathwork. because or I said it, not you, right. She was able to figure out How to turn her passion into something that is commercially sustainable. But I'm just using her as an example because can't get that from the school system? Fundamentally, maybe she got it in part because She has a dad, who's an entrepreneur. Yeah. She has want to explain the rules to her. She has the support network. like she supports me. I support her. She knows how to enroll people into her success. All of that is called pitching publishing content Creating a product offering. I only know one thing that I've seen work again and again and again and again, which is I teach people people who learn the entrepreneurial method suddenly feel agency and hope. I agree. I'm not saying that's for everyone. Yeah this is It's not for everyone. It's for people like that had whatever mean you had in terms of like the upbringing, the like the whatever, the fortune. I'm not saying everyone's going to be an entrepreneur My answer to that question is entrepreneurial is the entrepreneurial toolset gives people a lot of hope. I get that. and one of the things that we have to acknowledge is that that's a certain type of person who has a certain type of goals. There are some people who actually just want to go outside and they don't they want to work, maybe they want to work one day a week or two days a week. Sure. I don't want to do push ups and I don't want to do sit upps and I don't want to go to the gy But if you ask a fitness professional, how do you improve your body? How do you feel good? right? The fitness professional says, hey, these are all the things that I've seen working for a lot of people about going out and getting fit. and you might not want to do them initially, but actually the people who do these things hope. The people that do those things might have an inherent privilege, right?. Like the monopoly anal it's fair.ike the world's not fair. Some people born. I's know you your answer the same quest. I think we need to have vital democracies that manage economies in ways ptimized around human flourishing and not capital efficiency. capit accumulation that we live in a world You completely grew up in a world. where the highest good was capital efficiency The capital efficiency and godliness were the same And we have organized society in this way. In the United States We literally have a norm and a set of regulations around maximizing shareholder value for corporations, right? This was invented out of whole cloth in the nineteen seventies. This whole idea that the purpose of the corporation should be merely to enrich shareholders. And the evil of that idea isn't What they weren' saying was screw the poor What they said was If you maximize value for shareholders, it will be good for everybody That was the lie because it wasn't good for everybody. It was good for a tiny minority of people. And the lie was that when you do that, Growth rates will go up, GDP will go up. will have a rising tide And the tide didn't rise Fell and What modern economics says is that we can have a different construct, we can have a different society that purposefully includes people in a robust way, whether they're a worker, whether they're a small business If we do that everyone will benefit. The economy will grow faster, peopleeople will be paid better. prices will be lower. We will have more innovation This is within our grasp We just have to decide to do it. You should go into politics I am in politics. Well, I hear that. One thing I don't like is waiting for the world to change. And I like personal agency. And at Nick's level that he's playing at, I love the fact that he's in politics and he's using his wealth and his power and his influence to change the system. For most people, waiting for the world to change does not feel empowering And I guess what where I'm coming from? is yes, tilt towards this because that's the political movement that's required to make sure the world includes more people in capitalism and I love that And while that's happening personersal accountability, personal agency, figure out what is your next move W all the episodes of Diaryver CEO learn from people and you know, and jump on And and figure out Y, subscribe, right? do me a favor, subscribe to the channel. But if that if that is done, like people, people who do that end up feeling hopeful because hope comes from having personal agency and personal agency is knowing your next move that's going to benefit you and move you forward. Iree I agree. And I real know, the older I've gotten, the more I realize My own privilege. My privilege isn't necessarily that I built a business and that I have money now and all those things. My privilege is something happened when I was young from the point of maybe even where my parents do you feel guilty about it? I don't feel guilty about it, but it just has allowed me to see my own bias and to realize that I have this unknown unknown. Unfortunately, that's growing by the day because I'm getting more entrenched in my own privilege. And what I mean by this is like I play out the scenario theoretically, my dad left My mom and my mom Um still struggles to read and write. and she would have had like four kids C't read or write You can't really get employment. You worked at St. Luke's Hospitospice as a volunteer. And I go God, if that one thing had happened, how different would my of life have been? and And so that's like a privilege that I I've never even acknowledged because it's kind of inherent. It was like built into my life And then would I be sat here now? Would I be being the person I am today if that one little thing had happened? No, wouldould I be ambitious and optimistic about the world? or would I be theoretically? couldould I be resentful? Could I be like some of my other friends who came from the same city where I came from who didn't have a father who May I've said to some of my friends, I said to one of my particular friends back home, If you would just get a job for a couple of months, I will pay your rent for years can't get a job at subway for three months so that I would pay his rent four years. I ended up helping him anyway, but I just I remember saying that to me it just highlighted to me there's a real deep inherent privilege that I have that I'm like not even aware that I have Sometimes it's trauma, my DNA, my brothers are all very smart, naturally Um and what if I didn't What if like I didn't have those two parents? and what if I didn't have the whatever genetic composition I had? Like then would the advice apply that then would the advice I give to the world would it apply? So I mull that and go it's got to pass that lens for it to be broadly applicable and therefore I think effective advice. I love your level of compassion and empathy for people and the fact that you're having that self exploration means you're an incredible type of person with each individual Each person wants to do the most with what they've got I'm saying that if I was to visit a small town that had a thriving ten, fifteen, twenty businesses in there, there were enough entrepreneurs to create optionality for people, that would be a good town to go to. Right? And if I go to a town where there are no entrepreneurs and there are like everyone feels downtrodden and there's one big costco and that's the only employer in town, that's going to be a shit town So all I'm saying is you need a critical mass of people who have agency and that lifts up the like having a few And know in Japan, they call it the shhogun family, right? And the shhogun family lifts up that little community and around that shogun family, you end up with lots of other businesses and lots of other like it flows out. But when you have one monolith in the world that is the only company in town and it is the only place that ships stuff to your door, and there's only one place to get your CD's and there's only one place to get your Netflix Pret much everyone else is just reduced to being a consumer What do you think, Nick? Aain, I've said it before. I agree with this sentiment one hundred percent. I am an entrepreneur myself. I expect that operating and empowerment applies to It will no doubt apply to a high percentage of the people who watch your show Lots and lots of people who watch the show are entrepreneurial, want to be entrepreneurial, so on and so forth. But I suspect you're talking about less than five percent of people on planet Earth paradigm and I want to create a paradigm that works for everybody and And you're saying if you hit those five percent Well, even in the UK, it's six million self employed people out of thirty million workers. it's not tiny. It's a pretty decent percent, right? It is a major opportunity that more people than ever could take part in. If you ask a health professional, how do you get hope? Go to the gym, go for a run, all that stuff. You're asking an entrepreneur, how do you get hope through personal agency, I'm going to tell you what's work What's worked for me is the entrepreneurial method.. So me, we need to ask a broad group of people. Yeah. But I suspect that what they will come back to you with is the quiet miracle of a normal life. If you want that, that's great. I want that and I want that for everyone. That's gone away. It's gone Houses are unaffordable Sorry Local jobs don't exist, no one's paying healthy wages. like all of that stuff that I want as well 's G great to sit there and want it That doesn't give me hope. that gives me a disappointment that it used to exist Right? might the family home that most people would love to raise a family in, it's one point two million pounds now. R And if you want to fix that, you have to enact this. Yeah. You have to doal most people most people are going to wonder what's on that piece of paper. So this is you know, I mean, the main body of my work is coming up with a different economic paradigm, a way of understanding economic cause and effect leads to the world that Dan prefers, that I prefer. I think I don't know, but I sense it's the world that you prefer. And what you have to do is you have to rip down the existing economic framework and replace it with the twenty first century thing. inclines policymakers to make good decisions, not bad ones. And the booklet itself can you show the booklet? Yeah. So this booklet is twenty first century economics. Now this is aimed at policymakers and professionals. Yeah. but if you go to Marketsbilt forhumans. org. you can download this for free. and that is merely an expression of the paradigm itself, going from believing that We should just increase capital efficiency to human flourishing, going from understanding human beings as homoeconomicists to homo sapiens, going from understanding the economy as a parto optimal equilibrium to a complex, to an ecology, all this stuff. But when you understand it in a new way, you come to very different conclusions about how you should organize the world And that is the starting point for global transformation. I love it. He's already a billionaire. He's got time on his hands and he's got money to fly around the world doing it. Do it And while he's doing it, all I need is for people like you to help me explain it Yeah. and like I love it. I'm not against it. I'm just saying what will give most people hope is taking agency over their life where they can do something this week to improve their life. So while next time I see there will be a test and download download it, give it to your lawmakers. , so what I'll do then, I mean, we've got some different reading materials people that are listening can pursue here We've got Dan's books here, which I'll link below. Dan is there a particular best book to start with in your op? The most recent one is called The Lifestyle Business Playbook. and it's basically how to get startarted with a small business and a business that will give you more fun freedom and flexibility. And I like the idea of supporting anyone who's trying to create a better economy. Some of the most miserable people I know waiting for the system to change. and I don't want you to be that person. I want you to be doing something in your own life. And then over here I mean you know, I'm going to link all of your books below as well better. Yeah. I mean, I just think that a starting point global transformation is under look, economics is the operating system of the world If it's the wrong operating system, you end up with a very bad circumstance in economics is invisible to most people. They don't even understand it's the it's the water they're swimming in They don't understand that policymakers are making decisions that affect their lives based on a particular understanding of how the economy works. And if that's wrong, then you're going to make some terrible decisions. If you believe that prosperity trickles down from the top You're going to enact a certain set of policies. If you believe that growth is built from the middle out, you will make an entirely different set of policies. If you believe that the middle class is a consequence of economic growth