Navigating the K-Shaped Economy: Tech, Inequality, and the Rise of Digital Power | Impact Theory w. Tom Bilyeu & Daniel Priestley

Welcome back to Impact Theory with Tom Bilyeu. In part two of this dynamic conversation, Tom Bilyeu sits down with entrepreneur and author Daniel Priestley to unpack the hidden forces shaping today's economic landscape. Together, they dig deep into models of wealth redistribution, the power—and peril—of technological disruption, and why some countries like those in the Nordics seem to make social safety nets work, while others struggle. Daniel Priestley pulls back the curtain on what really drives inequality in the modern era, from government competence to the impact of repeated technological revolutions. The discussion tackles hot topics like universal basic income, the role of sovereign wealth funds, and what future generations can expect as artificial intelligence reaches an inflection point. Whether you’re curious about the fate of the middle class, the future of property ownership, or how to stay ahead in a shifting economy, this conversation is packed with actionable insights and bold predictions. Buckle up for a riveting exploration of economics, technology, and the very rules that will define our future. What's up, everybody? It's Tom Bilyeu here: If you want my help... STARTING a business:join me here at ZERO TO FOUNDER https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show: https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show SCALING a business:see if you qualify here. https://tombilyeu.com/call: https://tombilyeu.com/call Get my battle-tested strategies and insights delivered weekly to your inbox:sign up here. https://tombilyeu.com/: https://tombilyeu.com/ ********************************************************************** If you're serious about leveling up your life, I urge you to check out my new podcast,Tom Bilyeu’s Mindset Playbook https://open.spotify.com/show/47VE90Cittmo6TGGFqg2xf —a goldmine of my most impactful episodes on mindset, business, and health. Trust me, your future self will thank you. ********************************************************************** FOLLOW TOM: Instagram:https://www.instagram.com/tombilyeu/ Tik Tok:https://www.tiktok.com/@tombilyeu?lang=en Twitter:https://twitter.com/tombilyeu YouTube:https://www.youtube.com/@TomBilyeu Ketone IQ: Visit https://ketone.com/IMPACT for 30% OFF your subscription orderQuince: Free shipping and 365-day returns at https://quince.com/impactpodAT&T Business: Switch to AT&T Business at business.att.com http://business.att.com Incogni: Take your personal data back with Incogni! Use code IMPACT at the link below and get 60% off an annual plan: https://incogni.com/impactShopify: Sign up for your one-dollar-per-month trial period at https://shopify.com/impact Netsuite: Right now, get our free business guide, Demystifying AI, at https://NetSuite.com/Theory https://netsuite.com/Theory Quo: Try for free PLUS get 20% off your first 6 months at https://quo.com/impact Monetary Metals: Future-proof your wealth at https://monetarymetals.com/impactPique: 20% off at https://piquelife.com/impact Follow Daniel Priestley: Instagram: https://www.instagram.com/danielpriestley Twitter: https://twitter.com/DanielPriestley LinkedIn: https://www.linkedin.com/in/danielpriestley Website: https://danielpriestley.com/ Learn more about your ad choices. Visit megaphone.fm/adchoices https://megaphone.fm/adchoices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Tom Bilyeu?

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• 0:45Tom Bilyeu?

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• 1:09Tom Bilyeu?

  Welcome back to part two of this incredible conversation. Without further ado, here we go. By way of understanding who we can model ourselves after, how we find a way out of this. The one, you helped us have a different vision of what the Nordic model actually is. It isn't a socialist model. It's a different type of redistribution. It's one over time instead of one from the wealthy to the poor.

• 1:35Speaker 01

  Yeah, that's where it ended up as, yeah.

• 1:37Tom Bilyeu?

  Making sure that we don't get ourselves into that gigantic bureaucracy that is just taxing people to death, acting like your money is secretly the government's money. So that'll make sense. But is that the solution? Or are you looking at them going, oh, you guys are so vulnerable to whether it's immigration or I don't know what, that it's not a good model? Or are you like, yeah, like this, hey, we found them?

• 2:04Speaker 01

  If you can make it work, but it is built upon competence, the Nordics are very Competent at doing their systems and their healthcare and all that sort of stuff. A great rule that all entrepreneurs and investors tend to follow is double down on your winners and and cut your losses. Back competence and starve incompetence, right? So you think about just a your sales team, right? So you you want to go all in on your top salespeople and give them the best leads, the most leads. And you want to say unfortunately, bottom thirty percent of sales team guys aren't performing. You're going to have to go somewhere else, right? So you starve incompetence and you reward competence.

• 2:44Speaker 01

  The thing with the Nordic model is that they have, for whatever reason, they've been able to create a culture of competence within their government institutions that most places don't have, same as Switzerland, same as Dubai, same as Singapore, right? So you actually do get competence end up in government. One of the biggest issues that you have to address if you want to do this model is you can't have, you can't just simply throw resources at government if competence isn't in the government, right? So.

• 3:15Tom Bilyeu?

  I feel attacked right now.

• 3:18Speaker 01

  Well, I mean, well, in the US, there are parts of the government that are incredibly competent.

• 3:24Tom Bilyeu?

  Are there?

• 3:24Speaker 01

  Navy SEALs.

• 3:25Tom Bilyeu?

  Okay, sure.

• 3:27Speaker 01

  Right? Would you want anyone else other than a Navy SEAL?

• 3:29Tom Bilyeu?

  No, but would I want them distributing my money? No, no, I would not.

• 3:33Speaker 01

  But but if you were to say, if there was a part of government that was as competent as Navy SEALs, should we give them more resources? Why not, right? Whatever they're doing, like if they're able to do it. If you go to California and say, hey, we only need eight billion to build this amazing railroad. And then six, seven, eight years later, we go, oh, we've had twenty billion and we haven't built one mile of railroad. Well, then you don't double down on incompetence, right? You say, okay, we need to find a different way because this is, you can't just throw good money after bad. So you, yes, it's great that the Nordic model seems to be working in Switzerland and Switzerland is not social. Switzerland is very low, small government, but the it has to be resources and competence have to go hand in hand.

• 4:16Speaker 01

  You can't just simply throw more money at something and hope that competence works. Yet you can throw more money if competence shows up for that money, great.

• 4:25Tom Bilyeu?

  Okay, so I'm gonna try to give it a scorecard to see if I'm understanding you correctly. Um. So Nordic models, historically, we we've got a coming immigration problem that I'm going to set aside for a second. Um. Or an arrived immigration problem, but what they've earned their reputation on is being small. First of all, I think uh Norway has eleven million people.

• 4:46Speaker 01

  Yeah, Sweden's five million or something like that, or they're they're like five to fifteen million people.

• 4:52Tom Bilyeu?

  Yeah.

• 4:52Speaker 01

  And they're and they all cluster around a few cities. Yeah, yeah, like when I also say homogeneous, there's not a massive difference between city folk and rural folk in those countries either. Right? They're mostly they're mostly living very similar lives. That's the other homogeneity about it. It's like. You you know, you don't like they're geographically close. They're living in a few cities. Majority are in a few cities. Like this is. This is part of what makes it work.

• 5:19Tom Bilyeu?

  Right. I recognize me in you and vice versa. We share values. We hold each other accountable.

• 5:24Speaker 01

  Your life is similar to my life. You're trying just as hard as I'm trying, you know, all of that stuff.

• 5:29Tom Bilyeu?

  Competence being a high one. Um. Okay, so it it's one of those. It's a good model. It definitely will not scale. It won't work for everybody. You would have to have the things that you've just walked us through if you want to make that work. If you have a large country, and I looked this up, there is not any country that has over a hundred million people that is. Uh. Low wealth inequality, high growth, uh, and um. Oh, and over a hundred million. So those were the you just don't get a. High functioning socialist distributive policy if you start scaling up over a hundred million.

• 6:11Speaker 01

  I should also probably name the elephant. There's a few elephants in the room as well, which is. When someone talks about capitalism versus socialism, like no, it's a straw man to suggest that capitalists think there should be no government, no services. No safety nets, like none of that stuff, you know, there is there is laissez faire. Like crazy level anarchist capitalism, which would be like a government of less than fifteen percent of GDP or less than twenty percent of GDP. There's normal range capitalism where the government is about twenty to thirty five percent of GDP, right? Somewhere around a fifth to a third. This is most functioning countries. Then there's.

• 6:54Speaker 01

  We're getting into a socialist state when you hit about forty percent to sixty percent of the size of the economy is government. And then you get into, you know, sort of socialism plus sixty percent to eighty percent and communism seventy percent up to a hundred percent. So it's kind of like a sliding scale. How big is the state? Like, we're not talking about a binary here where like a capitalist doesn't believe in any social nets or any role of government or any of those kind of things. I'm not in that camp. Like, I'm not like, I do think it's insane that America doesn't have like just a normal ambulance service that doesn't send you broke, right?

• 7:37Speaker 01

  Like, in parts of, is it still true that in parts of America, if you call an ambulance, it's like gonna be thousands of dollars?

• 7:43Tom Bilyeu?

  People don't understand what America actually is. So if you are broke and you can't pay, the hospital will just write that off. If you have insurance, they're gonna gouge the insurance company for the money. If you tell them, oh, I had to ride in an ambulance, but I don't have insurance. They're like, cool, it's whatever, six hundred dollars. I'm sorry, I do have insurance, actually. Oh, they're like, oh, that'll be six thousand dollars. You're like, wait a second, can't I just pay the six hundred?

• 8:11Speaker 01

  I agree, that's insane.

• 8:13Tom Bilyeu?

  Yeah, that is insane.

• 8:14Speaker 01

  I totally, I totally agree with you.

• 8:15Tom Bilyeu?

  It is not what people think. It is not that we don't have healthcare. It is that we have a completely corrupt, broken system that has been completely captured. And I don't, I'll derail us if I start going down that road.

• 8:29Speaker 01

  By the way, most people are not advocating for that. Like, most capitalists are not saying, oh, the American healthcare system is the best possible system in the world. I personally much prefer the idea that if I call an ambulance, it's a government-run service that comes out and picks me up and takes me to a hospital. And that that is a taxpayer-funded thing because I assume no one's calling an ambulance unless they need an ambulance. Its job is to administer first aid and take you to hospital.

• 8:55Tom Bilyeu?

  Well, so people will call an ambulance for the dumbest shit in the universe if there isn't the value system of like, that's a thing that we don't do. Um. So there's no question. Part of America's problem is that we have systems that are very easy to parastatize. And so uh, this, it comes down to values. All right, we can get to that in a minute. But so first, okay, the, when you look out at the world and you see, uh, we've got a system that's broken because it is not taking care of people. Because we have this K-shaped economy that is driving people below the cost of goods.

• 9:38Tom Bilyeu?

  And so they're effectively getting poorer by the day. Uh, the redistribution models that people use are not working. You need a high competence government with a high homogeneity of values and lifestyle. And the places where everything is beginning to break down,

• 9:58Tom Bilyeu?

  is, I mean, if we look at the UK, since we're here,

• 10:04Tom Bilyeu?

  walk me through like what exactly is breaking down? If we're not going to be able to import the model of um, the Nordic countries, presumably because of diversity and we have.

• 10:17Speaker 01

  I'm not, yeah, I'm not picking on diversity. I'm just saying that you need alignment of values. I don't want that to be the thing that everyone obsesses about in the comments. I was just simply saying with socialism, you start to think about, is everyone working as hard as I am? That that tends to be, and then you get with more socialism, you actually get more aggression between groups, between tribal rivals, however you want to draw those lines.

• 10:39Tom Bilyeu?

  Sure.

• 10:39Speaker 01

  Right? So anyone who people can mark out as not working as hard as I am, if we all, if we're all in this together, you get tensions. Whereas in capitalism, we just trade, take it or leave it.

• 10:50Tom Bilyeu?

  And in that case, I meant diversity of lifestyle, I meant diversity of values and so fair. We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere. There's a reason Quince sells cashmere for $60, and it isn't the cashmere. It's real 100% Mongolian cashmere. It's the same stuff luxury labels charge a fortune for. Quince just works directly with ethical factories and cuts out the middleman. So there's no need for a markup and no logo tax. The $60 goes to the actual sweater, not the fancy name on the tag. That's why everything they make runs 50 to 80% less. And it's not just the cashmere.

• 11:33Tom Bilyeu?

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• 12:14Tom Bilyeu?

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• 14:26Tom Bilyeu?

  Thanks for sticking around. Let's get right back into the action.

• 14:29Speaker 01

  So here's what I think is causing the K shape, all right? And I know you want to jump in on some of it, but like, let me kind of map out a little bit of a thesis here. But there's definitely the issue of printing money, debasing currency, causing inflation. Like, that's a huge part of it. There is this other part of it as well, which is technology. And if you just simply, let's imagine you had an island. And on the island, you had a couple of different groups of people and everyone's trying to survive on the island. And you go to one group of people on the island, you say, here's the Swiss Army knives, right? You guys have all got Swiss Army knives and cigarette lighters, right? So you can easily start a fire, you can easily sharpen sticks, right? You've got this little edge of technology. Fast forward a couple of months, we know which side of the island is going to be doing incredibly well

• 15:14Speaker 01

  versus the other side of the island. Side of the island might have taken over the other side of the island just by giving a slight technological advantage. History is full of slight technological advantages, leading to global domination. Like the British took over the world because we had guns and steel and boats and like slight technological edges. And then the UK had twenty five percent of the world's popu- uh population living under the British Empire.

• 15:43Speaker 01

  And we took over places like India and we took over ma- like continents because we had a slight technological uh edge. I I feel like having listened to some of your stuff, not all of your stuff, but I feel like you overlook that the role that this slight technological advantage actually plays. Now, what's happening is that we're we've introduced general purpose technology. Now, by the way, when you talk about big trends, you've got to think in decades. And just take something as simple as social media or cloud computing. It's like we're going to give some people social media that will distract them and make them do dumb stuff. Unproductive things and the same technology will make some people sell

• 16:25Speaker 01

  like a billion dollars worth of lipstick to their followers and make a ton of money with a team of ten people, right, Hailey Bieber. And it's like this same powerful technology for in the hands of some people, they're just gonna hugely blow up and some people are gonna get massively distracted with life.

• 16:42Tom Bilyeu?

  And just to make sure I understand, you're saying that's a technological difference?

• 16:46Speaker 01

  Yeah, the the essentially like the bicycle in the race that we talked about before. If you've got the leverage of technology, you know how to ride the bike, uh then you win the you win the race every time. Um and what we're seeing at the moment is we're seeing part of the K-shaped economy is we're seeing some people who totally get how to use technology. You're an example of this. You're running this YouTube channel, making money in a way that our grandparents would never have dreamed possible.

• 17:14Speaker 01

  Using this new technology. I'm not sure with Quest whether you were e-commerce, retailing and like, were you selling a lot of Quest online?

• 17:22Tom Bilyeu?

  It's how we started. So at one point it was a hundred percent.

• 17:25Speaker 01

  Yeah.

• 17:26Tom Bilyeu?

  But yeah, ultimately now it goes into retail.

• 17:28Speaker 01

  But I'm guessing you're a fairly tech-enabled company at the time.

• 17:31Tom Bilyeu?

  Sure.

• 17:31Speaker 01

  Yeah. And you were probably more tech-enabled than your rivals and than your peers, like all of the, you know, the traditional businesses that were already in the marketplace. You probably were more effective, more lean, you probably faster to implement technology than others. And therefore you, you, you come in and you win and you, you win the race. So since the nineteen seventies, eighties, we've had personal computers, internet, cloud computers, social media, and now AI. These bicycles, even Steve Jobs called them bicycles for the mind. These bicycles of the mind, these techno, these general purpose technologies, certain people figure out how to use these productively and they accelerate. And the majority of people are distracted by these technologies. They're actually not just

• 18:16Speaker 01

  neutralized by them, but disadvantaged by them. And their life gets worse because they're flicking through endless short videos and they're, you know, sitting there on social media, just consuming content when they should be working. Right? So their life is getting, like this is a wedge that, that this technology is a wedge that drives some people down and some people up. And that the impact of this over the course of decades is creating a two-tier economy, a two-speed economy. And it's-

• 18:44Tom Bilyeu?

  Give me percentage of that as your cause of the K-shaped economy.

• 18:51Speaker 01

  Like, I think it's, I think it's right up there with the deflationary effects of money printing.

• 18:55Tom Bilyeu?

  Percentage, please.

• 18:56Speaker 01

  Uh, let's go, let's go a third, a third, a third, right?

• 19:00Tom Bilyeu?

  What's the last one?

• 19:01Speaker 01

  So let's say a third is the money printing, a third is technology, and a third is that the amount of wealth in society has allowed people to make stupid, unproductive choices with their lives without realizing that they're making dumb, unproductive choices with their lives. So let me explain that. When you get a young person who should be an electrician, because the economy needs more electricians, and you get a young person who should be a plumber and who should be building houses and should be being a nurse and should be doing something that is what the economy wants and needs, but through-

• 19:41Speaker 01

  Price distortions, market distortions, government bubbles, that person is able to go and do butterfly fart degrees. Right. It's like I'm gonna study the farting habits of butterflies this week and I'm gonna do a PhD on that. And they're able to deploy their time and resources in unproductive ways while accumulating huge amounts of debt in the process. Uh, and if you get that on mass, then you also get a massive investment into unproductive behavior. A massive investment into, like, an unproductive investment. The prob, the trick with investing is you must invest in productive, in productivity. You have to invest in productivity gains.

• 20:22Speaker 01

  Um, it's like the old saying of, uh, if a government was to pay one person to dig a hole and pay another person to fill the hole in, technically they've created $200 worth of GDP growth in the economy. But that is not a productive investment.

• 20:37Tom Bilyeu?

  If you had to define productivity.

• 20:39Speaker 01

  Well, productivity is moving humanity forward. It's actually like you are satisfying real wants and needs in the economy that people genuinely wanna pay for. That is making life better, cheaper, faster.

• 20:48Tom Bilyeu?

  Why would anybody ever pay for something they didn't genuinely wanna pay for?

• 20:52Speaker 01

  Uh, because governments can create market distortions. For example, they can give young 18-year-olds loans to go to university to study whatever their passion is as a university student.

• 21:04Tom Bilyeu?

  Is government redistributing the wealth the only way that the abundance of wealth creates a problem or are there other ways?

• 21:10Speaker 01

  Whenever money's transferred that didn't involve voluntary trade, that didn't involve a buyer and a seller making rational decisions uh, about making improvements to their lives or making improvements to their businesses, then you get market distortions. And market distortions are essentially rewarding poor productivity, right? And the, the classic example is digging a hole and filling the hole back in, creates two, a hundred dollars to dig the hole, a hundred dollars to fill it back in, creates $200 of GDP. But nothing happened. Um, and ultimately this didn't need to happen. No one was asking for it to happen. This was just a fictitious distortion bubble that was created.

• 21:48Speaker 01

  Um. So I would say there's, there's a three part problem. Technology is creating winners and losers. Government is eroding the value of money constantly, six percent, seven percent a year in some cases. Uh, and that compounds. And then we're making really horrific, unproductive investments with people and capital uh in the economy.

• 22:09Tom Bilyeu?

  Okay, uh, it all makes sense, very clear. I am aghast that you call that the third a technological thing. Um, so that part I would say is culture and intellect. I don't think it is rightly, everybody has access to the same technology. You're just saying that some people use it poorly. Uh, and I would say, okay, I think that's a very strong argument, but to me that comes back to culture. It's the reason why you have different subsets of ethnicities that will do well and some will do poorly. Even though you look at them, they look exactly the same. So whatever racism they might be facing is neutralized.

• 22:52Speaker 01

  It's also skills training. So when we created the skills, the skills training, the schooling system for the industrial age, we trained people on how to operate within the industrial age and then we started to get price rises. When I look at your mobile phone, I see a studio in your pocket. I see the ability to communicate value to the world and to build a following and sell stuff and buy stuff and, and uh, you know, a supercomputer. Other people just see it as a consuming device of just, you know, but they don't have the skills to recognize what, what, what power is in it.

• 23:24Tom Bilyeu?

  Are you saying that's from education?

• 23:26Speaker 01

  Yeah, I'm saying it's an education system. So, so the, the reason that we have this disparity.

• 23:31Tom Bilyeu?

  Wait, wait, wait.

• 23:31Speaker 01

  Yeah.

• 23:32Tom Bilyeu?

  Are you saying that uh wealthy people, obviously it's not perfect, but wealthy people are getting a better education than poor people?

• 23:41Speaker 01

  What I'm saying is that when a new technology is introduced, there's an initial period of time where early adopters and people who adopt the skills required to leverage that technology, they get early gains. Um. So for example, the British are no longer ruling the world because of their steel and guns and ships anymore. Because everyone's figured out how to have steel and guns and ships. Um. You know, all the things that the British, you know, we, we, we no longer lord it over people because we have spinning looms. Um. But we did lord it over people for spinning looms for a while. So now that spinning looms have been democratized. Uh. There's no competitive advantage in that. But for a brief period of time.

• 24:19Speaker 01

  Um. Those who like, you know, the, the hair salon that runs on AI is going to out compete the hair salon that doesn't run on AI. Um. For a brief period of time, and then they'll all run on AI as they figure it all out. But there is an uneven time distribution. The Engels pause was an uneven time distribution between some people figuring out how industrial revolution. Uh. Economy and technology worked and a lot of people going, hey, wait a second, I'm a farmer. I, I know how to plant seeds and pick crops. Uh. Like, I, I know how to, you know, work with a plow. Uh. What do you mean I have to go there? Or I know how to be a, a fine tailor and stitch and thread. What do you mean that a sewing machine can now do this for free?

• 25:02Speaker 01

  So, um, ultimately, there's an, there is a time lag between a new technology being introduced, early adopters. Massively having an advantage and then suddenly everyone knows how to use it and everyone does it. That time lag tends to be, or historically was fifty years, maybe with technology, it's going to be twenty years. But there is a time lag where early adopters get rewarded disproportionately and laggards, uh, like, uh, laggards.

• 25:29Tom Bilyeu?

  Yeah, okay. Um. But you're saying that accounts for about a third of why people are falling behind. I get why, this is why I think it was very important that we express to people that there. Still may be a difference in how we talk about the K-shaped economy. Because that does explain why there's a difference between the people that move quickly on technology and the people that don't. It does not, in my opinion, explain why those people are getting behind the average cost of things, which I put forward is ninety-eight percent of. What matters the 2% of like monkeys banging on cages because you're getting a grape and I'm getting a cucumber.

• 26:08Speaker 01

  Yeah, let me give you, give you the, the mechanism is that money moves towards that that is difficult and scarce. And it moves away from, it, it, it's no, doesn't move towards things that are easy and ubiquitous. So when someone has amazing mathematical abilities, they are literally called a calculator. And they get hired by the biggest companies in the world to calculate mathematics. And then a calculator comes along and no calculators get paid anymore. There once was a typing pool where people would hand handwritten notes to these people who had typing skills. And then suddenly everyone can type and then we don't need a typing pool anymore. So what is happening with technology is the K that is partially,

• 26:53Speaker 01

  it is accelerating those who know how to use it, but it's also devaluing the skills of those who think they've got something of value to offer the economy, but largely it's automated. So here in the UK, we used to have cab drivers earning really great money, like, like kind of top 10, top 20% of the income level, like top, top quartile or top quintile. Was cab driver, cab drivers were in there because knowing your way around London streets was actually given a name called the knowledge. And if you had the knowledge, you could be a London black cab driver. It was a very prized, very difficult job. And it was a very, like, it was essentially a working class ticket to making a lot of money, professional.

• 27:37Speaker 01

  But then along comes GPS and suddenly Uber turns up and someone on their first day in London can become an Uber driver. And the, they don't have to speak English or know London streets. Basically, if you can just drive a car, if you have a driver's license, you can now have the knowledge. And no longer, it's no longer a valuable thing.

• 27:55Tom Bilyeu?

  And so you're saying that a black cab driver was making in nominal terms more than an Uber driver or only in real terms?

• 28:06Speaker 01

  A cab driver in London was a top quintile job. So up until the time of GPS technology and up until the time of Uber and all of those sorts of things. A black cab driver was essentially printing money, doing very, very well, right?

• 28:23Tom Bilyeu?

  Let me then, let me abstract the question. Are you saying that if I were to look at the average worker, they are making nominally, meaning the number would be the same. So real, let's set that aside where it's like inflation adjusted. But just nominal terms, are you saying the nominal dollar amount is going down?

• 28:42Speaker 01

  I think it's probably nominal amount is going down for black cab drivers as well.

• 28:45Tom Bilyeu?

  Forget black cab drivers, because to me, it's like technology just shifts things around.

• 28:49Speaker 01

  Okay, if the number's the same, but the purchasing power is lower, then you're talking about an inflation problem, right? But also, if the value of the work is no longer scarce, right? If the value of the work is ubiquitous and easy to replace, right? Like, because think about what technology has.

• 29:08Tom Bilyeu?

  What I'm trying to, I'm trying to really get to the essence of what you're saying. So if you are saying that we, the gig economy, people are just making less money. And it isn't that prices are going up, that's an exacerbating issue. But the reality is, even if you had no inflation, you would still be getting people following, falling lower and lower on the economic totem pole.

• 29:29Speaker 01

  In the industrial age.

• 29:30Tom Bilyeu?

  But is that what you're saying?

• 29:31Speaker 01

  During the Engels pause.

• 29:33Tom Bilyeu?

  Yes.

• 29:33Speaker 01

  A, a, a tailor, a fine tailor, lost their economic value because of sewing machines.

• 29:41Tom Bilyeu?

  Yeah, but I don't care about that because it's completely irrelevant. That guy is gonna get obliterated.

• 29:45Speaker 01

  But that was not an inflation thing. That was, the value of your skills got eroded by technology. Because technology simplifies, outsources and automates.

• 29:54Tom Bilyeu?

  Yes, but if you take averages, the world is way better off. So what I'm trying to figure out is, are you saying that we have not, we're either in some sort of transitionary period where technology has so obliterated so many people that this isn't an inflation problem, this is a technology problem, which is what I hear you saying.

• 30:10Speaker 01

  Part of it is a technology problem that.

• 30:12Tom Bilyeu?

  But specifically that I would be able to read in the data as there are now a lot more people with lower paying jobs.

• 30:20Speaker 01

  I'm, I'm saying that a lot of people. Well, like, let me give you a really life example. Someone in my family used to be a journalist.

• 30:28Tom Bilyeu?

  Mm hmm.

• 30:29Speaker 01

  And that was a super highly paid job.

• 30:31Tom Bilyeu?

  Yep.

• 30:31Speaker 01

  And her job was to write two stories a week. That was it. Five hundred words to a thousand words times two. And had an editor whose job was to edit those stories. And had a photographer whose job was to go out and take photos and develop film for those stories. All of that was a very, I grew up in a family where there was a journalist in the family. We had a local newspaper. Hundreds of people worked at the local newspaper. Photographers, developing film in the darkroom. Journalists going out and interviewing people face to face. All of that was a real thing, right? Unfortunately, that job is just, it's very hard to make the case that someone should be paid a professional level wage to essentially write two blogs a week.

• 31:14Speaker 01

  Uh, and to take a photo that I could take on my phone. Right? So ultimately, the value, the person you could kid yourself, hey, I've got these incredibly valuable skills and experiences. And, you know, like, I should be paid an amazing amount of money because like I always have been. Or you can say, I'm sorry, but technology has now made it that anyone can write a story, distribute a story, take a photo, distribute a photo, develop a photo. All of that stuff is just in your pocket, on your phone. Loads of people do that as a side thing for free. Where they publish content all the time, as well as whatever else they're doing. This is no longer a job. This is no longer a, this is no longer a valuable job.

• 31:53Tom Bilyeu?

  Okay, so here's what I hear you saying, please correct me if I'm wrong. That, um, when these technologies come into place, whether it's the industrial revolution, the great internetification, doesn't matter, same idea, um, that the jobs lower in value.

• 32:11Speaker 01

  If they, if they don't adapt to it, if they don't change, yeah. Those, those jobs are just not as valuable anymore.

• 32:16Tom Bilyeu?

  Uh, now you just put a caveat and the, the very-

• 32:18Speaker 01

  A lot of people don't want to adapt.

• 32:20Tom Bilyeu?

  Yes. Okay, so this feels important for us to tease apart. Here's what I would say, history shows us with, without equivocation, equivocating, whatever. People get what I'm saying, I hope. Uh. That a new technology comes along, anybody that's say, north of thirty-five, they're toast. It's just gonna obliterate them. Uh, most of them won't be able to adapt, and it's real and it's brutal and living through these transitions is super gnarly. But the technology brings about more jobs, new jobs, and from a GDP perspective, we're better off. Um, so I look at this and I say, yep, we're, uh, the internet changed

• 33:01Tom Bilyeu?

  things so profoundly and there is a percentage of people, and this is why the life expectancy in the US is going down, largely because of men dying deaths of despair. And there's enough of them dying deaths of despair that you can actually see it in the, the overall life expectancy. But GDP is still going up. People have just shifted to other jobs. New kids coming into the workforce are not going, I can't find jobs. They're finding jobs, they're different jobs. They might be a YouTuber and they're making way more money doing effectively journalism. So I'm saying that's a very different phenomenon, uh, where more jobs have been created by the internet by a lot than existed before. So I, I in no way, shape or form am trying to contradict your very astute point that, um, the, there will be a huge class of old jobs that will

• 33:46Tom Bilyeu?

  just cease to be relevant. And for that person, that is a tragedy. And this is why the learn to code became a slur and people were getting so weird. But the reality is that the next generation does learn to code, more jobs are created. And so I would say, and if, by all means, if you know, or if somebody in the comments knows, if there's data that shows that I'm wrong, I would love to see it. But that, um, that if you were to completely strip out inflation, you would not see that technology has lowered the average person's ability to earn a living. They've adapted their new jobs, to be sure, but it's been a net benefit economically.

• 34:29Speaker 01

  The problem, yeah, economically, but economically is about aggregate and it's about averages.

• 34:33Tom Bilyeu?

  Yeah.

• 34:34Speaker 01

  But, uh, the problem with technology, especially in the short term, when I say short term, at an economic level, you're talking decades, um, is that a smaller group of people earn way more. So you might say, oh, there's no longer ten journalists who earn fifty grand each, but there's one tuber, YouTuber earning five hundred grand.

• 34:54Tom Bilyeu?

  We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere.

• 35:00Tom Bilyeu?

  Thanks for sticking around. Let's get right back into the action. So you think they're really, it's aggregated up. You think the data would back that up? That there's fewer YouTubers making as much money as a journalist?

• 35:13Speaker 01

  We know that with digital technology, that it doesn't distribute evenly on a bell curve. It's very much on a power law. So we, like, for example, you can take dating statistics. 5% of people get 50% of the dates.

• 35:25Tom Bilyeu?

  Yep.

• 35:27Speaker 01

  Amazon, the top power sellers, get 50% of all the sales. And so it's a, anything digital is a power law distribution, not a bell curve distribution. The bell curve distribution was largely late-stage industrial revolution, being distributed geographically and dealing with geographic limitations, and essentially requiring factories to average out working pay, and all of those kinds of things that evolved over a course of 100 years. But early-stage technologies do bell curve distributions, sorry, do power law distributions, not bell curves.

• 36:00Tom Bilyeu?

  So do you still think we're there with the internet? Obviously, AI for sure, we'll get there in a minute, but are you saying the thing that I'm missing?

• 36:09Speaker 01

  Well, it's in the data. In the data that I've seen, the, one of the reasons we have an eroding middle class is actually we have a widening wealthy class.

• 36:20Tom Bilyeu?

  Based on technology?

• 36:21Speaker 01

  Well, yeah, if you go and talk to anyone who's doing really well, then it's not like they're sitting there going, "I ignore technology." They're pretty leveraged with technology. They're either leveraged with media, finance, or data, or IT systems.

• 36:34Tom Bilyeu?

  And it's a shrinking number?

• 36:36Speaker 01

  No, it's a, the wealthy, there's a, there's a growing number of very wealthy people, right? Part of the reason that we have a shrinking middle class is because too many, a lot of people are going up, right? That is reflected in the data. We also have people falling down, but we actually have a disproportionate number of people going up. They're jumping on this technology up curve as well.

• 36:54Tom Bilyeu?

  And do you think that will balance out over time?

• 36:57Speaker 01

  At the level of an individual... As you say, there is a catastrophic loss of I used to be a travel agent. I used to love taking people on trips around the world. I used to love organizing people's trip to Milan and to, you know, France. And it was so great being a travel agent. Now it's all automated and it's all online and people just go on a website and do it. Right? At the individual level, the economic function got replaced. The money moved, but to that individual, they they just lost this dream job that they loved for decades.

• 37:28Tom Bilyeu?

  That part I I really understand that that um I'm so with you. What I want to figure out, you had a criticism of me and I want to see if this really is something I'm missing. Cause it's entirely possible that this is a huge thing that I'm missing. So what I hear you saying is um the power law distribution with technology. Let's call it the internet, cause I don't think we felt enough of it in AI yet. But the power law distribution of people who can successfully adopt technology is so profound that part of what is driving the split between people that are technically wealthy and people that are doing poorly is the ability to continue to monetize their skill set in an increasingly digital world.

• 38:11Speaker 01

  Yeah.

• 38:12Tom Bilyeu?

  Wow, okay. So you're saying if I do the research there, I'm going to see that in the data.

• 38:16Speaker 01

  I think you'll see, I think you'll see that. And I think I also think over time, it then starts to turn back into a bell curve. As the technological, as as we hit mass adoption of the technology and provided you don't introduce another new technology.

• 38:29Tom Bilyeu?

  Wow, AI unfortunately.

• 38:31Speaker 01

  Well, what we've had is we've had this this uh rolling uh internet, personal computer, phone, cloud, social media, AI. We've just had boom, boom, boom, boom, boom, right? So, sorry, power law, power law, power law, power law.

• 38:50Speaker 01

  What typically happens is that there's a generation that's left behind. As you say, people who are older, they're more reluctant, more set in their ways or more entrenched. Um, and then you get a new generation come through and you get a uh power law on the new generation who are early adopters. And then eventually it becomes ubiquitous, widespread best practices. Everyone knows. Knows the best practices, the school system changes and adapts to it, training and skills is widely adopted. It no longer gives some crazy awesome advantage. Um. And we saw this, by the way, with the introduction of capitalism. So early adopters to capitalism had this unbelievable boom in prosperity and wealth, right? So we we see this with the USA, we see this with, you know,

• 39:31Speaker 01

  um, uh, Britain and Western countries and all this sort of stuff, unbelievable standards of living, living. At the time when ninety percent of the people lived on in abject poverty globally. And then suddenly capitalism spreads around the world and everyone lifts out of poverty. Right? And it and then boom, there's a new higher standard of living where everyone has a, you know, a lot of the things that capitalism provides.

• 39:56Tom Bilyeu?

  Very, very interesting. That is, um. My read on that situation was devastating for the generation that gets hit by it. But the next generation comes along and starts filling those jobs and that it it keeps the bell curve. But if the bell curve isn't there, that is for sure a missing piece to my assessment of why people are going up and down. Cool. I'll definitely do the research. Thank you for pushing on that. Um. Okay, so that introduces a confounding variable. Obviously, we're about to step into the next massive technological revolution, which is AI.

• 40:31Speaker 01

  Hmm.

• 40:32Tom Bilyeu?

  Um. So do you, given what you just walked us through, does AI then just make this even worse? Where we've now got the exponential of all exponentials and it's going to be this really small number of people that are going to do well. And everybody else is going to get crushed down or?

• 40:49Speaker 01

  Yeah, I think if we were to zoom out hundreds of years, a hundred years from now, we'll view this entire period of fifty years as a boot period for a digital age or a different economy, different. So let's say we were in the year twenty one fifty or twenty twenty two fifty and we're looking back at the turn of the two thousands. We would see this boot period, which is, oh, they came up with personal computers, they came up with internet, they came up with social media and cloud. And then boom, and then they got to AI. And all of this would be the on-ramp.

• 41:18Tom Bilyeu?

  Hmm.

• 41:19Speaker 01

  And then you'd see the AI adoption and they go boom, right? And this would be the big uptick and. You and I, we're similar in age and we're, we, we think we've been living through this like crazy time of like disruption because of all of these new things every five years. But actually, it's just the on-ramp to AI and it's like boom, okay, now we're in a very different universe. Um, and yeah, I do think that essentially in the next 10 to 20 years, uh, this is a, this is essentially now we, we're about to hit the liftoff moment for a very new economy, very new world, and we're going to have an Engels pause. We're going to have some people who get it very

• 41:58Speaker 01

  quickly. We'll have early adopters on the power law, um, late, late laggards lagging behind. We'll have two-speed economy. Um, you know, all the same things that we saw in the early 1800s.

• 42:11Tom Bilyeu?

  Okay, so if we have the ability to look back, see the history, understand how this plays out, Engels pause, people are not going to put up with it, like there will be a demand for change. How do we facilitate that demand? So I hear people crying out for change, the call for socialism being exactly that. It's people feeling maybe an Engels pause-like thing and saying socialism's the answer. The way that you described, I thought was brilliant, which is it seems self-evident to somebody that doesn't necessarily understand economics. They just say, well, take from this guy who has a lot, give it to other people. So, um, you've given us sort of the individual answers in a pre-AI world. Um, does AI change your calculus and is it take from the people that are,

• 42:56Tom Bilyeu?

  you know, employing now robots and AI and say, listen, we're going to have to UBI this, like, we've got to distribute this wealth around, or is there a different solution?

• 43:06Speaker 01

  Yeah, so, uh, in the early 1800s, and it was multi-decades, it was 60, 70 years of transition. From the time that, um, Adam Smith wrote Wealth of Nations through to the end of the Engels pause was, I think, 60 years, something like that. So it was two, it was two generations of people, almost three generations of people before we got a new schooling system, before we got a new government. Um, so we had the Great Reform, which was a government political change, had the, um, Compulsory schooling system, which was a skills change. We got floating companies, the Limited Liability Act, which was a new way of owning wealth. And sharing wealth was through limited liability companies.

• 43:50Speaker 01

  So we actually introduced new thinking, new technologies, new paradigms. And we ended up with socialism and capitalism as dominant economic systems. All of these were incomprehensible to the agricultural age mind. So the person who owned land and was a viscount or a baron had no concept of any of these ideas, like all of this would be completely radical and foreign to someone just in the seventeen sixties, right? And they would understand colonialism, mercantilism, they would understand feudalism. They wouldn't understand all of these other isms that we came up with later. So we have to accept that what we're going to have to go through

• 44:32Speaker 01

  as we move into a very different economy is this, this is so big, so large that it requires new economic paradigms.

• 44:41Speaker 01

  Like, for example, you cannot, fast forward to the future, and I don't know how it looks, and I don't know how we get there. You cannot have a situation where corporations can be bigger than countries economically and can make up their own rules globally and pretend to be in Ireland and Luxembourg when they want to be and be doing trade here. You, you know, essentially, I would say that a way to get our heads around it is almost imagine that digital companies are the new forming continents. So there is a continent called Google, and there is a continent called Meta. There is a continent called Nvidia, and there's a continent called Amazon. And there's King Jeff and King Larry and King Sergey. They're so big and vast in their power

• 45:24Speaker 01

  that they're actually creating almost new economies, new, new continents of, of, of, of size and scale.

• 45:32Speaker 01

  We noticed that they start doing things that governments only used to do. They start being interested in education and training. They start being interested in security and border control and policing. Right, so they start getting themselves, they blur the lines very quickly between what governments used to do and what companies used to do because they kind of are the new continents. We're going to have to have a new way of governing these massive organizations. We'll also have to make decisions around what is common property versus individually owned or company owned property. So for example, if AI is trained on all of our data, surely that's common property. Right, like surely it can't just simply be owned by the company that sucks it all in without asking permission.

• 46:17Speaker 01

  So maybe we need new common assets that actually, in order to lease those assets, leverage those assets, if you're a company, you have to pay into a common pool that gets redistributed to the people who help generate those assets. So we're going to have to start thinking about how does the economy work, given that the nature of the economy has so vastly been disrupted.

• 46:39Tom Bilyeu?

  Okay, you did admittedly say you don't see the path, but I'm so curious. Do you have any beginnings of even the threads to pull on how we do that well? I'll say, for instance, you said something earlier that really resonated with me, which is when it's unearned wealth that, I can't remember if you're talking about tax, but I'll say that when it's unearned wealth, it does something very different psychologically. Rich people implode when it's just inherited, they didn't have to do anything to actually get to that point. There's a dearth of meaning and purpose. I don't think UBI will solve the problem. I think that we'll end up right back where we are. It'll be the cucumber grape problem because there are going to be some people that just

• 47:22Tom Bilyeu?

  have the talent wherewithal to accumulate whatever disposable income people have anyway.

• 47:29Speaker 01

  Also, if you think about it logically, if you just give everyone two grand a month, then two grand a month becomes the meaningless amount.

• 47:34Tom Bilyeu?

  Right.

• 47:35Speaker 01

  You know, like, because if you get two grand a month and I get two grand a month, great.

• 47:39Tom Bilyeu?

  What's cool about that?

• 47:40Speaker 01

  Right?

• 47:40Tom Bilyeu?

  I want four grand a month.

• 47:41Speaker 01

  Yeah, well, we still keep going like this.

• 47:44Tom Bilyeu?

  Yep.

• 47:44Speaker 01

  And suddenly, all you've really done is just given a lot of people two grand a month that they can spend with our companies. And our wealth goes like that and they don't get lift off because they're not doing the right things. Yeah, it's transitional to try and soften the blow and stop people from. You know, to give the basics.

• 48:02Tom Bilyeu?

  There's nothing so permanent as a transitional government project.

• 48:05Speaker 01

  Yeah, yeah, but but you're essentially you're not so you're really not solving the problem. You you know, like, the the issue is is that, uh, yeah, you might introduce something that is transitional. The other thing too is how are you creating the two grand a month? So is the two grand a month just simply uh spent into existence through money printing? Because now you're creating a compounding problem on top of the money printing problem. You know, because a lot of governments, they go, oh, we know how we'll do two grand a month. We'll just print it. Uh, it's like, oh, great. So we'll just inflate the value of everything. We'll have runaway inflation. And it'll just be out of control, crazy. Like, the only way to actually get your hands on two grand a month is try to redistribute it.

• 48:47Speaker 01

  So then you go, oh, we're going to take it off the rich people. And the rich people go, ah, but we're global now. Sorry, we're based in Fiji. Um, come and get us in Vanuatu. That's where our server for our our servers are now in the middle of the desert in the Sahara. You know, that's that's our that's our new.

• 49:02Tom Bilyeu?

  Living outer space.

• 49:02Speaker 01

  Right, we're going to put them in space. Yeah, yeah, good point, right? Sorry, we're in space now. Um, you you know, can't can't catch us where, you know, uh, like, sorry, I I only earn a hundred grand a year on on paper. Sorry. Um, so they they're going to always have the better advisors. They're going to have geographical benefits. They're going to have all of these kind of things. So trying to redistribute it is going to be incredibly difficult. Um, and then you'll go into, oh, we need to redistribute wealth. Redistributing wealth, because it's an unrealized gain, it's an unrealized gain. Because it's an unrealized gain, you're going to create a liquidity crunch. So essentially, you're going to say, oh, we're now taxing people on wealth, but the wealth isn't real. It's just a calculation.

• 49:44Speaker 01

  So we now have to try and get our hands on the money against that wealth. That's just going to suck money out of the economy, right? The whole economy is going to become, you know, illiquid because of the wealth taxes. It's going to be this crazy scenario where you're going to choke the economy, trying to tax people uh based on wealth. You know, it won't work. Uh, it's never worked.

• 50:06Tom Bilyeu?

  Given the things we've talked about today, though, despite that, I think people are going to make a move for it. Um, so.

• 50:12Speaker 01

  Just quickly, one thing that would work is to regulate that data is a common good and needs to be leased by companies that leverage data. Right? Uh, another thing that might work is that. Um. The the data centers become government assets that have to be leased. And that all their highly taxed assets, like really highly taxed assets, because they are essentially public works or they're public plumbing. Um. You know, they're they're essentially, it's like they are the the uh the grid, right? So it's like you basically say, if we can choke point around those things that all the companies have to leverage and use.

• 50:55Speaker 01

  Right? So by all means, be anthropic, be Google, be be all of these, be cool and innovative. But the data centers and the chips themselves are treated as something special in the economy that is a publicly owned good or a public uh resource.

• 51:10Tom Bilyeu?

  Help me reconcile that with your public statements that we are likely to bankrupt the economy, not the government, but that the the companies themselves are building these data centers at a rate that just cannot be justified by the amount of money that they intake. So if you're right about that, then now by being really aggressive in our tax, we take something that's already hyper fragile and we kill it.

• 51:35Speaker 01

  Well, so what what's happening at the moment is we're spending something like seven hundred billion a year on data center development. And about a third of that cost is uh very short-lived. So when you develop a data center, you've got the land and the power and the resources that go with it, which long-term asset, right? So obviously, that's fine. And then you've got the physical concrete and steel and all of those sorts of things. But then you've got the GPUs. The GPUs kind of get replaced every three or four years. Um. And then you have to resell them. And we're going to create a huge economic issue. Where let's say, let's say out of the seven hundred billion, let's say that only two hundred and fifty, three hundred billion

• 52:17Speaker 01

  has to be recycled every year. That is an insanely high amount of money that only lasts a few years that of CapEx. When we put down railway tracks, they lasted a hundred years. We could, yes, we bankrupted the economy, but we ended up with a hundred year asset off the back of it. When we did the grid, we bankrupted the economy, but we ended up with the grid. When we did um fiber optics.

• 52:38Tom Bilyeu?

  Grid and the railroads done privately?

• 52:42Speaker 01

  A combination of private and government and then they got privatized because they were going bankrupt.

• 52:47Tom Bilyeu?

  Right.

• 52:47Speaker 01

  Similar to the two thousand and eight crisis. Um, the government had to step in.

• 52:51Tom Bilyeu?

  Okay.

• 52:52Speaker 01

  So the UK bankrupted itself twice with railroads and once with canals. Um, canal mania.

• 52:58Tom Bilyeu?

  What are you guys doing with?

• 52:59Speaker 01

  Yeah.

• 52:59Tom Bilyeu?

  You're saying canals?

• 53:00Speaker 01

  Yeah, we built a canal network from Birmingham to London where you take boats up and down the canals. Yeah, we had canal mania.

• 53:07Tom Bilyeu?

  Interesting. I always wondered what those were. You see them in, um.

• 53:11Speaker 01

  That's how we shipped stuff up north and south.

• 53:13Tom Bilyeu?

  That show.

• 53:13Speaker 01

  Yeah, we created an internal boating network to move products and services up and down the country with canals. Um, but we bankrupt, it was a big infrastructure project and we sent a lot of people bankrupt as a result. Uh, globally, we had a massive financial bubble around telecommunications fiber. Uh, fiber optics going into the ground in the late nineties, early two thousands. But even though it created massive financial meltdown, uh, we ended up with thirty to forty year assets off the back of it. So we were able to refinance them pretty easily and we were able to get through it pretty smoothly. Because the long term viability of those assets. The issue that we're about to have with AI is that we're spending hundreds of billions on this AI stuff.

• 53:57Speaker 01

  And it only lasts three or four years and then you've got to resell it into the market. Uh, and there has to be a secondary market for that level of spend. Um, here's what's also happening and if this sounds a little two thousand and eight, you, you, you'd be forgiven for thinking about it. We're repackaging up this data center debt. And we're going to pension funds and we're saying, hey, guys, good news. Backed by Google, backed by Amazon, backed by Nvidia, backed by these biggest companies in the world. They never go broke. They're triple A rated. Why don't we repackage this debt and sell it uh to pension funds as a high yielding six percent a year? Uh, triple A rated pension fund debt. Uh, and you guys can, you guys are looking for yield to pay your pensioners. Why don't you just buy these data center debts that are backed by Google? What could possibly go wrong? Right?

• 54:43Speaker 01

  And what could possibly go wrong is that we build out this massive infrastructure that needs replacing every three to four years and not a lot of people are paying for it. So in the USA, on behalf of every citizen of the USA, if you, if you divide up the spend, it's about two to three grand per person that these companies have spent on individuals. The vast majority of people in America are not paying anthropic. They're not like it's only like less than 10% I think pay 20 bucks a month. It's like 1% of people might pay 100 or 200 a month. There's a tiny, tiny, tiny group of a few million people globally who

• 55:26Speaker 01

  are actually using coding tools and burning through tokens and all that sort of stuff. But the vast majority of people, it's like, oh, I need, I need an omelet recipe and I wonder what my cat would sound like if it was Eminem, right? And it's like.

• 55:42Tom Bilyeu?

  I do wonder what your cat would sound like as Eminem. I'm not gonna lie. Okay. So you're saying that technology obviously is going to grow, but it won't grow fast enough. Not when you have to turn these things over every three ish years.

• 55:53Speaker 01

  Yeah.

• 55:53Tom Bilyeu?

  Okay.

• 55:54Speaker 01

  And pension funds are holding the baby. They're going to be holding the baby in a few years' time.

• 55:58Tom Bilyeu?

  Has that already happened?

• 55:59Speaker 01

  Starting to happen.

• 56:00Tom Bilyeu?

  Or starting to happen? Okay. So terrifying. But that brings me back to.

• 56:04Speaker 01

  Just, just, it was on the front page of the FT the other day that the banks, big banks like JP Morgan are freaking out about the debt associated with data centers and are repackaging and reselling it.

• 56:16Tom Bilyeu?

  Because they don't want to hold it.

• 56:17Speaker 01

  They don't want to hold it. And they're reselling it to pension funds.

• 56:20Tom Bilyeu?

  Woof.

• 56:21Speaker 01

  Right? What could possibly go wrong?

• 56:23Tom Bilyeu?

  Well, from their perspective and not to assume the worst of them, but they're thinking, let me put it on pensioners because they will absolutely have to be bailed out because they vote.

• 56:33Speaker 01

  Yeah. So if you fast forward, a prediction, a timeline would be that the government bails out all the pension, the government bails out all the pension funds in order to own all the data centers. The data centers are then common goods. That's how we fund UBI. They own the data centers. They lease the data centers to the tech companies. Tech companies pay a certain amount and then that redistributes to people who are not part of the elite class.

• 56:55Tom Bilyeu?

  And how do you feel about that? You're like, uh, it's rough, but.

• 56:58Speaker 01

  It could work. That could work because it's based on value and trade. Um. It's it's not necessarily a perfect solution, but it's certainly it's not just dilutive. It's not printing money. Uh. It's it's it's essentially treating data centers like a common good. I'm not this crazy person who says that there's no role for government. Government can't own stuff and all that sort of thing.

• 57:19Tom Bilyeu?

  You are a crazy person that said government, you don't want them to get too big because they suck at distribution.

• 57:24Speaker 01

  Yeah, well, what the he well, here's the difference. When it's based on value, ownership and trade, it doesn't need a gun to take it off you, right? So like, like there there is a difference between, for example, if there's a natural monopoly over clean drinking water, and that is a natural monopoly, it's like, okay, fair enough. The majority of that is a natural monopoly. We could have resellers and we could have brokers and we could have different things. But there's a natural monopoly. We don't need ten different duplications of this pipe under the ground. So therefore, it kind of is not a bad thing for a government to own as a public good. And then run it as best as it can. It's going to be inefficient because it's government run.

• 58:06Speaker 01

  But it's more inefficient to have ten different companies trying to uh duplicate a natural monopoly. It doesn't require guns and police. The problem with the problem with socialism is the redistribution angle. Ultimately, here's what here's what happens. It's essentially a system where all the highly productive people say, I'm out, I'm leaving. And then they start saying, no, you're not, right? We are going to erect uh initially legal walls to stop you, taxation walls to stop you, and then physical walls to stop you, right? We are going to put you to work whether you like it or not, right? That is the socialist. That's where socialism ends.

• 58:47Speaker 01

  There's a slight difference with, hey, the government owns data centers because they bailed out the data center industries. And now they're getting they're getting their money back from tech companies. That's based on trade, right? And it's based on a natural monopoly. You don't necessarily need, all of these tech companies don't necessarily have to make the same data center development um costs.

• 59:06Tom Bilyeu?

  Okay, so that sounds a little wealth sovereign wealth fundy to me.

• 59:10Speaker 01

  Yeah.

• 59:11Tom Bilyeu?

  Because I'm trying to think of this.

• 59:12Speaker 01

  I'm not anti sovereign wealth fund.

• 59:13Tom Bilyeu?

  Yeah, no, that's where I want to go because I my initial reaction is that I don't want this going in the hands of the government. I don't want them to bail them out. If they messed up, then you let them go bankrupt and it is what it is. Um. But if it can be done well, I would love to hear your take. So we talked about briefly Norway. We set them aside. Let's bring them center stage. Let's talk about some of the countries in the Middle East. How do you do sovereign wealth funds? Well, why hasn't America done one?

• 59:44Speaker 01

  Yeah, sovereign wealth.

• 59:45Tom Bilyeu?

  The UK hasn't done one either.

• 59:46Speaker 01

  No, no, crazy, crazy situation. We should have like in hindsight, the Norwegians did so much better with the North Sea than the British did. I really, for starters, I really distinguish between natural wealth. So natural wealth, when a country has natural resources, that to me is the family silver, right? Australia, absolute idiots running Australia, total like the worst politicians in the world, the dumbest people in the world that you could possibly put into politics is running Australia.

• 1:00:15Tom Bilyeu?

  Congratulations.

• 1:00:16Speaker 01

  Yeah, we're great at that. That's, that's one of our specialties. But one of the things we do is we have all this natural gas and in our infinite wisdom, we subsidize other countries to take it off us.

• 1:00:27Tom Bilyeu?

  This is like a green pulse.

• 1:00:28Speaker 01

  It's like so, I don't know whether it's corruption or just stupidity, but rather than build a sovereign wealth fund, we just don't even tax it very highly. We just say, oh, we'll subsidize it, right? It's this crazy thing that it's the family silver and we're not saying this is family silver. It should be that if the family silver has to get sold, you can sell it one time, right? It's not a renewable. It's a one time thing. That money goes into sovereign wealth fund for all future generations. We have this woman called Gina Reinhardt, who is through corruption, her, I'm going to get sued. Through luck and good work, her grand, her father was able to get all these mining rights in South Australia.

• 1:01:11Speaker 01

  And she's like a gazillionaire and it's crazy that we sit there and say, oh yeah, she can make a ton of, she can make so much billions selling the family silver that is essentially the dirt beneath the ground that can be sold one time. In my mind, natural wealth is a family silver asset. You can sell it once. It belongs to everybody. And it's for future generations. It's for all future generations. That makes total sense to me.

• 1:01:37Tom Bilyeu?

  Okay, so. Uh, data I would say is a little bit different of a category, but.

• 1:01:44Speaker 01

  Well, maybe, maybe not, because data is a one-time asset. You suck it up and process at one time. It's all the data of everything everyone has ever written. It's all the words on the internet. It's all like, it's all the photos. It's all the images, right?

• 1:01:58Tom Bilyeu?

  Yeah, but we create so much per day.

• 1:02:00Speaker 01

  Yeah, and it is a natural common asset. Like, it's essentially, like, it it it's kind of dripping off you right now. Who's to say that just because Facebook hoovers it up or someone else hoovers it up? Who's to say it ceases to be yours? Right?

• 1:02:16Tom Bilyeu?

  How are we gonna stop China? Uh, we're gonna derail on this. So let me just say on the economic part of it.

• 1:02:20Speaker 01

  I'm just saying data could be thought of as a common asset.

• 1:02:23Tom Bilyeu?

  Okay, so let's just take that frame.

• 1:02:24Speaker 01

  Let's just simply say this idea that hoovering up everybody's data and turning that into a a data set that you can train algorithms on.

• 1:02:34Tom Bilyeu?

  Yep.

• 1:02:35Speaker 01

  There's an element of that that feels like it's a common good.

• 1:02:38Tom Bilyeu?

  Okay, perfect. I I will grant you that for sanity's sake. Um, so we have this sovereign wealth fund now. How do we stop? How do we do the sovereign wealth fund in a way that works and doesn't derange the government? And give them, you know, extraordinary power that they end up abusing? And how do we do it well? Because when I think of nations, I'm setting Norway aside, just I'm not as familiar.

• 1:03:00Speaker 01

  Norway's a great, Norway's a great benchmark.

• 1:03:03Tom Bilyeu?

  Compare and contrast Norway with like the Middle East, where it's done, where there are these dynastic families.

• 1:03:10Speaker 01

  Yeah.

• 1:03:11Tom Bilyeu?

  That run everything and they basically give people enough money to keep them quiet. And then a little slave labor on the side, because you're not a citizen, so you get nothing, but we import you for cheap labor.

• 1:03:21Speaker 01

  Yeah.

• 1:03:21Tom Bilyeu?

  Like, that doesn't strike me as the ideal vision for America.

• 1:03:25Speaker 01

  There's something called the curse of resources, which is also, Australia has the curse of resources. The curse of resources is that because you make so much money off this stuff, that you end up becoming, you end up creating unproductive citizens.

• 1:03:37Tom Bilyeu?

  Yep.

• 1:03:37Speaker 01

  Life is too good. It's it's the curse of being born into a wealthy family as well. That ultimately you don't end up being highly productive because you don't have to be. Especially if you're also in a desert, right? The truth is that if you live and work in a desert and it's bloody hot and there's not a lot of natural resources going on. You are not motivated to get out there and work hard because your body is telling you to conserve energy. And not move around so much. Don't leave the air conditioning. So the combination of those factors means that you don't end up with highly productive people. You need to work very, very hard to educate, train, build industries. Dubai has worked incredibly hard to try and build industries outside of oil and gas. You know, so.

• 1:04:21Tom Bilyeu?

  But doesn't that just come down to the leadership?

• 1:04:22Speaker 01

  Yeah, it comes down to competence and leadership. Yeah. But you essentially, the the best practice is that you leverage your sovereign wealth fund to invest into skills, training, infrastructure. A platform for people to do well if they want to work hard and do well. And that you try to avoid as much as possible purely and simply paying people to exist. Where there is no incentive to work or do anything productive.

• 1:04:45Tom Bilyeu?

  Okay, so is that what you consider the most likely outcome in this scenario in terms of the West broadly?

• 1:04:53Speaker 01

  Well, I don't, I I don't necessarily believe that we'll end up with the West. I think we will. So you know, you talk about China versus USA geographical countries. I think we're actually moving towards.

• 1:05:09Speaker 01

  Tech economy versus like digital tech, AI economy versus traditional industrial economy. And it's less about geography and more about these two worlds that exist on top of each other. That you could be in the USA and be completely impoverished because you're just disconnected from that tech economy. Or you could be in the middle of Vanuatu. But you're running a tech business and you're, you know, making a ton of ton of money. So it's less about geography and geographical borders. It's more about the the, are you running on this system or that system? And where do I think we end up? I mean, I think we end up with a very new new set of rules we'll

• 1:05:50Speaker 01

  need to reform, like same thing that they did back in the eighteen hundreds, reforming the amount of political power individuals have and where they get their political power from.

• 1:06:01Speaker 01

  New economy assets, who can own them, how are they owned, do we all own them, can we earn into more of them, which is very human, it's very, very, very human. One of the last things Hayek ever said is that the reason we can have billions of people alive is property ownership. Without property ownership, he said, the entire economy will fall to like, the world population will starve if you take property ownership away from people. The idea that you'll own nothing and be happy, humans are not built for that. We we are, we love games where we can get ahead and win and own stuff and have stuff that is ours, right? It's so built into our nervous systems. So it's like, can we create games where people can earn into more and succeed if they if they do that?

• 1:06:46Speaker 01

  And then education systems, we need to have new education systems where kids are taught all the things that are currently wrong and that you're punished for and the current education system, we need to make them right and that you're rewarded for. Oh, you're an attention seeker. Well done. Congratulations, Tom. You're an attention seeker. You've got four million followers. That's a good thing. Oh, you like to delegate your maths homework to a CFO? That's pretty smart. You should delegate your maths homework to a CFO who's using AI to do maths homework while you go off and do something else. Oh, you like to work in teams as opposed to taking exams on your own? That's totally normal. We like we like people to doing that sort of stuff. Oh, you're not a square peg who fits into a round hole, you know, you're not a a replaceable part?

• 1:07:28Speaker 01

  That's perfect. We want you to be different and unique and and divergent from from the norm. That's perfectly acceptable. So we need a school system that basically says, here's how you understand what you're unique at and your skills and who you would partner with and how you would be more enterprising as opposed to industrial labour. And yeah, so we'll need those three big changes that they discovered upon back in the early 1800s, education system, political system, ownership system.

• 1:07:57Tom Bilyeu?

  Daniel, this has been insanely interesting.

• 1:08:02Speaker 01

  It's great fun.

• 1:08:02Tom Bilyeu?

  Oh, my God. I really enjoyed my time with you. This was the most engaging. They've all been wonderful, but this, this was special.

• 1:08:10Speaker 01

  This was fun.

• 1:08:11Tom Bilyeu?

  Where can people follow along with you?

• 1:08:13Speaker 01

  I'm on most of the social media platforms and at Daniel Priestley. I've got a new book out called Lifestyle Business Playbook, which is about how to leverage the tools and technologies to have a fun, freedom and flexibility in your work. And yeah, all of those sorts of things.

• 1:08:30Tom Bilyeu?

  God, we gotta get you to write a book about the economic path forward. Be great to get your mind on that.

• 1:08:35Speaker 01

  Start working on it.

• 1:08:37Tom Bilyeu?

  God, I hope so. Boys and girls, if you have not already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Peace. Let's talk about a pattern that is guaranteed to be killing your progress. You know what you need to do. You need consistent nutrition. We all do. You need vitamins, probiotics, greens. We all know that we should be doing more of it. When your morning gets chaotic, you skip it. When you travel, you skip it. When your routine breaks, everything tends to break and that inconsistency compounds against you every single day. AG1 is designed to solve the execution problem. One scoop, eight ounces of water and you're done. You're getting 75 plus ingredients, vitamins and minerals, pre and probiotics, nutrient dense superfoods,

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