Structural reform and cultural shifts

By now you've surely heard that the second most divisive man on Earth, Elon Musk recently became the world's first trillionaire We should note that it's not like he's swimming in a trillion sagejewas. the trillion dollars is tied to the worth of his companies and his stock inside companies, which of course Fuctuates every day, but the point is that this man has more money than God now. When SpaceX IPOed his net worth shot up to one point four trillion dollars, that made him about thirteen times more wealthy than Bill Gates. If you're middle class, that made him about seven million times more wealthy than you are, he's worth more than Switzerland I got some of those fun facts from a Vox piece titled ten Things Elon Mus Can, but probably Won't Do withith one trillion dollars by our colleague Sarah Hersshander. I am Sarah Hersschander and I am a fellow for Vox's Future Perfect section. And we'll be adapting that piece into audio for you on today Explain from Vox Support for T exxplain comes from Addio, the AICRM The CRM you use says a lot about how fast you want to move with Aio, the AICRM revenue compounds around the clock your email and calendar and AudiOo instantly builds your CRM around your business so you're ready for action from day one. With universal context, AdiIO's intntelligence layer, every customer signal compounds into one surface your whole business runs on. Adio is the intelligent system that never sleeps. The next era of revenue runs on Audio. Check it out now. You can go toio dot com slash today explained and you'll get fifteen percent off your first year. That's aTTo dot com slash today exxplained Support for this show comes from Fetch Pet Insurance Do you have a pet Every six seconds, a pet owner in the US gets hit with a vet bill of over a thousand dollars. and it's almost always an unwelcome surprise That's where fetch pet insurance comes in. Fetch is the most complete pet insurance get paid back up to ninety percent of vet bills You can use any vet in the US and Canada. All vets are in network Go to fetchpet dot com slash save right now for your free quote. That's fetchpet. com slash save. If I had a trillion dollars? Well I'd buy you today explained. Yeah, I've got a delivery for an Elon Musk, signine here He, what do we have here? Number one. Pull hundreds of millions of people out of extreme poverty. So this is the worst kind of poverty. and it would cost just three hundred eighteen billion dollars annually. Policy folks have been trying to crunch that number for many years now, and this is from yet a year ago. Some of the policymakers were from the group giveive directly, which does do direct cash transfers to people who are living in extreme poverty. And basically, it's accounting for all of the money it would take to set up a system We are giving people enough cash and enough food, water, shelter, what have you, so that they're not in that very, very most risky point of poverty. Oh, there's something else under here pay off all medical debt in the United States. So that's paying all of the money that about one in three Americans now have to pay and pass d medical bills. More than one hundred million Americans are burdened with medical bills they can't pay. I have about eight thousand five hundred dollars in medical debt. How much am I being sued for? five thousand four hundred forty three dollars and fifty seven cents In total, I have about twenty thousand dollars in medical debt from delivering a baby and having him stay in the IICU for four months. Oftentimes really predatory debt that they get into for reasons that are totally outside of their control. And there's about two hundred twenty billion dollars of it in the US right now. So even less than it would cost to eliminate the worst forms of poverty Number three, Bankrol Universal preschool. So the thing that American parents spend tens of thousands of dollars on each year. There've been a lot of sort of number crunching around how much this would cost lately because there's a lot of sort of political buzz about what it would take to make this a reality. Right now, it looks like it would cost about three hundred fifty one billion dollars over ten years which includes like constructing new preschools and like hiring teachers and scilling up already in existing infrastructure to give every preschooler in the U. S a free preschool education. And he's got like hundredundreds of kids himself, so that would like personally benefit him. Yeah, well right now, what's funny is some of the only philanthropy that Musk has publicly given or has publicly disclosed giving has been to his own private school network, very close to SpaceX headquarters in Texas. So there is some precedent here for Musk giving to education and he just needs to give it a little bit more widely. Four climate proof the world. So this is really important and it's a very underfunded issue. and it's a pretty big price tag. This is actually the biggest price tag on the list and it would require All of Musk's money. All of clim. I know, one point two trillion dollars poor guy. He'd be poor. He'd be would be poor after that. He would be poor He would not have any money. So that's how big of a deal it is. But he could still put in a dent without like, you know, paying off the entire price tag of one point two trillion dollars. But that's just like a way of thinking about like this stuff is really important. These are like the cooling systems, the flood protection, the sort of strategies that we need to keep people safe E world hunger. and this is one that we've actually heard Musk talk about before. So a few years ago, he said that he would sell off about six billion dollars worth of Tesla stock to support the World Food prorogram if they could prove that they would use their money in a way that would end the most severe forms of global hunger. If WFP can describe on this Twitter thread exactly how six billion dollars will solve world hunger, I will sell Tesla stock right now and do it The World Food Pgram came back with like an actual analysis of what this would look like. like everything that he asked for, bullet point, bullet point of what it would cost to sort of make sure that nobody is dying of starvation around the world or preventable starvation around the world. And he basically ghosted them. So I don't have huge hopes for this one Mus does have a pretty doable price tag of ninety three billion dollars annually, according to the United Nations, to end global hunger by twenty thirty. So it cost about four hundred sixty five billion dollars over that time, just about half of how much Musk has now. He would still have about five hundred billion dollars to play around with, do what he wants, continue trying to go to Mars What have you? But again, so far, we haven't heard back from Musk on if this is something he'd be interested in. six Research cures for diseases like cancer. and this one's really interesting because the US has been a leading incubator of scientific research and medical research. and that's using about nine hundred ninety three billion dollars in investments from the government, from private industry and from philanthropy. And so Elon Musk, again, this is another big bet. If he wanted to take all of his money and put it into something valuable, he could literally double the US budget for scientific and medical research, which could make a huge difference for some of these really intractable diseases like cancer, like heart disease And it would also help to make up for the billions in federal science funding that's been cut under the Trump administration. That he could do for very little money if he wanted to just sort of close that funding gap. Was he involved in some of those cuts with Doh? This is the chainsaw for bureaucracy Gs off He was involved in funding cuts to that. This is a good thing to mention. He was also involved in cuts to funding to fight against the most extreme forms of poverty, which we were talking about earlier and against global hunger. A lot of sort of where the funding lies now is still under development. But again, his track record is not great on these issues and research is no exception Again, this is an area where Musk has his own sort of interests of the philanthropy that he's given so far. A lot of it has gone to these sort of scientific breakthrough experiments because it falls in line with his interests. likeike he wants the robots, he wants to go to Mars. I don't know how much he cares about medicine, but like he has given to scientific breakthroughs before. So this might be a good one for him where he doesn't have to feel like he's, you know giving too much money for people to eat or live in a nice house Be who would want to do that? Who would want that Let's keep going to number seven. Bringing everyone clean drinking water. and the cost, according to the United Nations, of bringing everyone in the world clean drinking water would be about one hundred fourteen billion dollars per year. So again, for Musk, this is a kind of modest investment. He could fund this for year after year and presumably as the years go by, it would also get cheaper because you already have some of that water infrastructure in place Number eight, endnding homelessness in America. And now there are a lot of different sort of estimates on how much that would cost because homelessness is such a complicated issue. But most of the estimates that I've seen put the number at somewhere between ten billionars and thirty billion dollars each year And that's to house the seven hundred seventy thousand Americans that don't have a home at any given time. So again, this is actually a pretty cheap one. He could do this and not even notice the change in his net worth because again, a trillion dollars is a thousand billions. This is just ten to thirty of those billions Nine Wipe out tuberculosis and malaria for good. So these are another two diseases that we actually do have a lot of great treatments for and a lot of great preventative measures for. The problem is we don't have the money that we need to make sure that they don't still kill people. And tuberculosis remains the deadliest infectious disease in the world. It infects about ten million people every year and it kills about one point five million. and estimates for what it would take to eradicate tuberculosis for good is about two hundred fifty billion dollars Not so much for Elon Musk. And if we wanted to tackle on malaria to that, it would cost another eight point five billion dollars per year. It's still less than maybe a quarter of his net worth right now to eradicate these two really, really, really destructive diseases All right, here we go. fininally the last one, number ten. Simply give everyone in the world a check for one hundred and forty six dollars. This is based on a one point two trillion dollars net worth. His actual money has been vaccillating a little bit as the IPO takes hold. But if we divided that by the eight point two billion people on earth, literally everyone could get a one hundred forty six dollars stimulus check, which means that you can afford Almost annual Netflix subscription if you're living in the US, a week or two of groceries. But if you're living in somewhere a low or middle income country, especially a very low income country, that could actually make a really big difference to your life. You might be able to afford a few months worth of food, of clothing, of shelter that you wouldn't be able to otherwise Wow, Sarah, thank you for that list. A real embarrassment of riches in terms of ways to just end suffering in this world? Do we think Elon Musk will do any of it Short answer is probably not What we've heard from him so far is that he doesn't even really believe in money anymore. Money will stop being relevant at some point in the future A Currency becomes irrelevant. Which sounds insane coming from a trillionaire. But it's not so rogue from what a lot of these kind of new AI billionaires have been saying over the past few years, which is that the economy is going to be so drastically transformed that money won't be worth what it was anymore. But there is only basically one way to make everyone wealthy, and that is Aion robotics. And so given that sort of ideology and given his track record of giving Forbes put it at less than one percent of his fortune to charity each year, it seems unlikely this will happen anytime soon. And also based off of his track record, it seems unlikely that even if the robots do bring all of this abundant food and water and shelter, that it'll be shared very fairly I hope I'm wrong. Has he spoken about it? This guy gives the occasional interview. H Has anyone asked him, Hey, man, why don't you give more of your money away His answer is that most of his contribution to humanity comes from his companies, will always come from his companies, will probably come from the robots and the sending humans to Mars and the what have you, and not from philanthropy, which he tends to regard with a lot of suspicion. It's very easy to give money away to get the appearance of goodness, and it's very difficult to give money away for the reality of goodness. Earlier in his career, he had a little bit more of an openness to it. He formed his own foundation. He kind of hung out with Bill Gates and the rest of the like billionaire philanthropist club for a little while. But that's just not sort of the tune he's been taking for the past year the past few years or so It's just not something that interests him anymore. And he doesn't seem to see value in it You can read Sarah's list at Vox if our adaptation wasn't enough for you, but when we're back we're going talk about the Billionaire Philanthropist Club and how They're not really hacking it either Support for todayay exxplained comes from Shopify. When you're starting a new business, it's easy to doubt. You might ask yourself, should I? Sh I really? What if no one cares? Maybe a better way to think about it is what if this is a great decision? Shopify wants to help you answer that question. Shopify is a commerce platform powering millions of businesses worldwide from established brands such as Mattel ver To companies just getting started, their design tools make it easy to help build the online presence you're imagining with hundreds of ready to use templates to choose from. Everything is all in one place, helping make your life easier and your business operations smoother. 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Whether you're debugging code at midnight or strategizing your next business move, Claude extends your thinking to tackle the proble problems that matter with deep research Claud's research capabilities go way deeper than basic websearch, comprehensive releliable analysis with proper citations Turning hours of research into minutes. We love a proper citation, don't we? Plus, you can connect cllaws to your professional tools like GitHub Jira Notion, Google Wksspace and watch it become your command center with contexts from all your work. That means Claud has contexts from your calendar, emails and All of your go to tools. For problems worth solving, get started with claud at cllaud. ai slash today exxplain. That's cllaud d. ai slash today exxplain Do you remember the giving pledge? bunch of billionaires making big splashy promises to give away all their money before or when they die Bella Devon remembers the giving pledge. In fact, she and her colleagues at the Institute for Policy Studies have been kind of grading its effectiveness. And Elon Musk signed the giving pledge, which was founded by Bill Gates, somebody who's kind of a nemesis of his now. So the giving pledge was a voluntary philanthropic commitment founded by Bill Gates, his then wife, Melinda French Gates and Berkshire Hathway chair Warren Buffett. The idea is that people who are Engage in plants, we will wrrite a letter talking about what they're doing and they make a commitment to give the majority of their wealth either during their life or through their will. You can give any time. and the idea is to make the commitment, to get over the hurdle of saying, donon't wait until I think about this later in my life, but think about it now and think about giving. And if those little pieces of paper can translate Whether it's into children avoiding diseases, becoming better educated, whether people having a better life in their old age, whatever it may be, it's terrific. And I think a lot of people feel the same way They founded this in twenty ten. Since then, you know north of two hundred and fifty people in the world have signed ono this pledge. It's always been in the US around thirteen per to fourteen percent of domestic billionaires And it's people with tons of money who feel like signing on to something like this is something that they could do or at least want to be seen as pledging to do So the giving pledge is now sixteen years old. My team did a study at fifteen, you, old enough for a driver's permit, we were saying And we feel like there's a significant body of evidence that the pledge is unfulfilled and unfulfillable. of the Of the thirty two original signers who are still billionaires, and again, these numbers are from last summer, they had collectively gotten two hundred eighty three percent wealthier or one hundred sixty six percent adjusting for inflation since they signed onto the pledge. And only one couple in the group fulfilled their pledge So the idea is to get poorer over time and meanwhile almost everyone or if not everyone has gotten like significantly richer That's exactly right. I think Mackenzie Scott, who is one of the most prolific and generous giving pledgers, she's given away on yield givings count. That's her charitable entity twenty six billion dollars. I think she's only decreased her wealth by around less than six billion dollars since, you know her separation from Jeff Bezos. So if that's what the most generous philanthropist is struggling to keep up with you know, everybody else is faring for worse Is it because they don't genuinely want to give their money away or is it because they're simply doing so well all the time and getting exponentially richer all the time that it is really hard to do If we want to give them some credit, yes, it is mathematically incredibly challenging to give away as much money as their skyrocketing wealth But I definitely think These billionaires are not stepping up to the plate and giving as much as they should and even as much as they've committed to Although a great caveat of the giving pledge is that you get to fulfill it upon your death in your will. That could look like giving your children control of your charitable intermediaries A big part of our study was finding out that eighty percent around four fifths of all the gifts that these pledgers have given go into private foundations often that they control. So that's what it looks like when you can make a donation that seems like you're parting ways with your wealth and you know, delivering some kind of benefit to the public, but actually that money doesn't reach public charities or public works or on the ground aid until it leaves the foundation. And there's a significant lag time in there. And what's wrong with all the money going to like their foundation that then goes and distributes money to I don't know, needy children? medical research firms, whatever it might be You know, a way station lengthens the journey, right We figured out that out of all of the living pledgers who were still billionaires when they signed on, their median foundation payout rate was nine point two percent a year. If you're getting so much wealthier and your foundation is only giving away a single digit percentage point of your foundation's wealth every year, and you've gotten a tax incentive and reduction up frront for your gift which the general public is subsidizing up to seventy three cents per dollar That's a very significant investment you're asking the public to shoulder, and that money is trickling out back to the public. K keepeping pace Is there any good news here, Bella? Like have we accomplished anything? Have we eradicated any diseases? Have we cured any diseases? Have we Eradicated homelessness in certainly not this country, but another one, I don't know It depends who you ask, but I would say no No good news. I think that, you know, the great indignity of philanthropy and concentrated wealth at this scale is that multiple things can be true at once. It can be true that billionaires o exert their power, that they are able to influence the state of science, innovation, the deliverance of public aid, the shape of housing policy And that can make significant inroads and deliver benefits to people. You know, there's no arguing with that. But at the same time, They can be hoarding wealth, not doing enough. s resting on their laurels, know banking on this idea that the reputational benefit of signing the pledge is enough And that those two things can be true at the same time while regular people are struggling to make ends meet means that the system is in need of a dramatic overhaul. And if the billionaires who promised to give half their money away or doing this poorly at it That tells us everything that we need to know Tell us about an overhaul. Like what if you designed the giving pledge or a system that's altogether different What would it look like If it were up to me, I think the number one most meaningful intervention is to figure out how to tax wealth figure out how to restructure our economy so that people can't accumulate these fortunes in the first place over which they can exercise such plutocratic control. But knowing that we live in a society that has all these billionaires already has all these foundations with piles of money that haven't been deployed for the public benefit. I think we have to increase transparency so that donors can't use donor advised funds and other popular intermediarian foundations to you know, conduct dark money giving or play shell games to change the timing of tax benefits so that philanthropists. have to make the gift and then see their tax benefit instead of getting it up front without having any obligation to move money Okay, I'm hearing lots of ideas from you. I'm hearing tax the rich. I'm hearing reform tax code. I'm hearing, you know, change public policy, which Noble As you could admit, you know, less likely to happen. it really sort of just reaffirms why something like the giving pledge would have been so attractive in the first place because it's big, it's splashy, ethical moral humanitarian, generous, all these things and I just wonder Have all of those things become less in vogue fifteen years down the road? Like Elon Musk talks about empathy as a weakness. the fundamental weakness of Western civilization is empathy As the richest person on earth, he made cuts to U. S. aid programs that directly resulted in hundreds of thousands of people