Marc Andreessen on How AI, Culture, and Regulation Will Shape Tomorrow’s World (Replay)

Today on Impact Theory, we're revisiting our conversation in 2024 with the legendary venture capitalist and tech visionary Mark Andreessen, co-founder of Andreessen Horowitz, whose bets on the future have helped shape the digital landscape as we know it. In a candid and wide-ranging conversation, Mark Andreessen took us inside the next wave of radical disruption: artificial intelligence. He shares why he believes the AI revolution is as profound—if not more so—than the advent of the internet or the microprocessor, and why its impact will cascade across every facet of society. We dove into the industries poised for massive transformation, from healthcare and entertainment to the long-awaited dawn of practical robotics in the home. Mark Andreessen unpacks why he remains a staunch techno-optimist, but also challenges prevailing narratives around job loss, economic stagnation, and the supposed dangers of rapid innovation. He addresses how government regulation, entrenched interests, and cultural schisms could throttle progress, and explains why the AI-fueled censorship wars may become the defining political battle of our time. From the explosive rise of democratized AI tools, to the psychological and even religious shifts technology is forcing in society, Mark Andreessen offered a sweeping vision of where we’re headed—and what must change to realize the promise of the future. This is an episode that even though was recorded 2 years ago is is very much still extremely relevant. What's up, everybody? It's Tom Bilyeu here: Want my help starting a business? Join me here inside 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 Sign up for my AI Masterclass: AI Masterclass https://tombilyeu.com/ai-masterclass?utm_campaign=Live%20Masterclass&utm_source=podcast&utm_medium=evergreen Follow Me: 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 Thank you to our sponsors: Tailor Brands: Check out Tailor Brands to get started with your business today: https://bit.ly/TailorBrandsSept Quince: Free shipping and 365-day returns at https://quince.com/impactpod ElevenLabs: Book your demo at https://elevenlabs.io/impactpod Cash App: Download Cash App Today: https://capl.onelink.me/vFut/v6nymgjl#CashAppPod *Cash App is a financial services platform, not a bank. Banking services provided by Cash App’s bank partner(s). Prepaid debit cards issued by Sutton Bank, Member FDIC. Cash App Visa® Debit Flex Cards issued by Sutton Bank, Member FDIC, and The Bancorp Bank, N. A., pursuant to a license from Visa U. S. A. Inc. See terms and conditions for the Sutton prepaid card, Sutton debit flex card, and Bancorp debit flex card. Cash App Green features, Savings, Direct deposit, Round ups, Overdraft coverage and Discounts provided by Cash App, a Block, Inc. brand. Visit cash.app/legal/podcast http://cash.app/legal/podcast for full disclosure. Ketone IQ: Visit https://ketone.com/IMPACT for 30% OFF your subscription order. ATT Business: Switch to AT&T Business at https:// https://incogni.com/impactbusiness.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/impact Quo: ​​Try for free PLUS get 20% off your first 6 months at https://quo.com/impact Pipedrive: Get more leads and grow your business. Go to https://www.pipedrive.com/impact and get started with a 30-day free trial. Netsuite: For the first time ever you can try NetSuite Next for free. If your revenues are at least in the seven figures, go to https://NetSuite.ai/Theory https://netsuite.ai/Theory. Butcherbox: Go to https://ButcherBox.com/IMPACT https://butcherbox.com/IMPACT to get $20 off your first box, plus your choice of free ribeye, new york strip, or filet mignon in every box for a year — with free shipping always 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.

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• 1:07Speaker 01

  I think the AI censorship wars are going to be a thousand times more intense and a thousand times more important.

• 1:12Tom Bilyeu?

  My guest today is someone who doesn't just keep up with innovation. He creates it. The incredible Marc Andreessen. Trust me, when someone like Marc, who spent his entire career betting on the future, says this is the next major disruption, you need to listen.

• 1:27Speaker 01

  From a political standpoint, we should hope that we have rapid technology progress. Because if we have rapid technology progress, we'll have rapid economic growth. Do people care? And are people going to be willing to stand up for this? And I think that's what's required.

• 1:38Tom Bilyeu?

  It's going to displace a lot of jobs. Some of those people will redistribute themselves by acquiring new skills. Other people will not. This isn't something to think about tomorrow. You've got to be prepared today. So let's dive right in. I bring you Marc Andreessen.

• 1:55Tom Bilyeu?

  Marc Andreessen, welcome to the podcast.

• 1:58Speaker 01

  Awesome. Thank you for having me.

• 2:00Tom Bilyeu?

  My pleasure. Now, you've had an insane amount of success betting on where industries are going. So let me ask you, what is the most radical disruption that you see coming in the near future with AI?

• 2:13Speaker 01

  You know, I just say like, we're convinced AI is one of those sort of moments of fundamental change. And, you know, in our, in the tech industry, you know, these come along every couple of decades, but they're not frequent.

• 2:28Speaker 01

  And, you know, this one is up there with the microprocessor and the computer and the internet for sure, and maybe bigger. And so for us in the tech industry, this is a, this is, I think, a very, very, very profound, powerful moment. And of course, you're already seeing, you know, a lot of, a lot of the, a lot of the effects that are already playing out. But, you know, this technology is, this technology is going to change a lot of things. And it's going to be, I think, very, very exciting.

• 2:53Tom Bilyeu?

  So for people that don't know, you have a fundamentally optimistic view of AI, of technology in general. Do you have, like, from an investment strategy, do you guys have a thesis on what industry you think is going to be most advantaged by AI? That you're trying to get into?

• 3:11Speaker 01

  Yeah, there are many. So we're involved in many. I would say there's some obvious slam dunk ones. And so I would say healthcare is a slam dunk one. I actually just, I actually just happened to have lunch with Demis Hassabis, who just won the Nobel Prize in Chemistry for his work on protein folding.

• 3:26Tom Bilyeu?

  Not a bad lunch date.

• 3:28Speaker 01

  Yeah, exactly. And, and he was knighted this year also, so he's also a Sir Demis. But, you know, he and his colleagues basically have this transformative approach that, you know, they, they believe is going to lead to dramatic breakthroughs in the development of medicine in the years ahead, powered by AI. So, you know, healthcare is an obvious one. Entertainment is one that I think is, it's going to be extremely exciting what happens from here. And again, that's, that's already starting to play out. And, you know, you're already seeing like just sort of incredible creativity being applied to that. And so, you know, maybe you could kind of maybe bookend it by saying those, because it's kind of the most serious one and the most fun one. But then, look, there's, there's, there's lots, lots of other stuff. Probably the single biggest question I'm asking right now is robotics.

• 4:11Speaker 01

  You know, there's been the promise of, you know, kind of robotics, you know, kind of saturating our society. And, you know, everybody having, you know, robot, robots in the home. And, you know, everybody having, you know, robots to do, you know, to do everything, manual labor and, you know, wash the dishes and pack the suitcase and clean the toilet. And, you know, conceivably everything, you know, the manual labor, you know, kind of free people from manual labor. And that's, you know, been a promise, you know, going back, you know, in science fiction, it's been a promise for, you know, like 120 years. And, you know, until recently, we were no closer than we were maybe back then. But, you know, you're starting to see very dramatic, I think, breakthroughs. And I think, you know, sort of like, you had sort of drones that now work, like autonomous drones are like now a standard thing. Self-flying, self-piloting drones.

• 4:53Speaker 01

  You now have self-driving cars that are now a thing and that now work really well. And I think it may be, you know, humanoid robots and all kinds of other forms of robots. We have, we have two, we have two Chinese robot dogs at home.

• 5:08Speaker 01

  Yeah, yeah, yeah, yeah.

• 5:10Tom Bilyeu?

  You actually have them at your house?

• 5:12Speaker 01

  Yeah, yeah, yeah. So there's a, you know, so you, so everybody's probably seen all the demos. Remember, there's this company Boston Dynamics that has all these, they always have these great demos. You see these videos of these robot dogs running around. But, you know, they cost like $50,000, $100,000. And then that company never really brought them to market. So it never really worked outside of it as a demo. But there are now Chinese companies that have these things down to $1,500.

• 5:34Speaker 01

  Yeah, and they like, they're great, they're great. They run around, they actually, they run actually quite quickly. They can outrun you. They, they do flips. They stand on their high legs, they climb stairs. They can, there's a version of it that has wheels that they can go like 30 miles an hour. Then that one can also climb stairs. It locks the wheels and it's perfectly fine climbing stairs. So, you know, those are really starting to work. And then, you know, humanoids are coming fast. And, you know, Elon just had his demo day for the, you know, Tesla autonomous robots.

• 6:02Tom Bilyeu?

  Unreal.

• 6:04Speaker 01

  Yeah, and so those are, those are starting to work. You know, it's not quite there yet. Like those were still teleoperated. There, there's still people in the background with VR headsets that are kind of steering those and guiding those and helping those. But, but that's also how you train these, these robots is you kind of have, they kind of watch what people do and then you train. So I think we might be like actually reasonably close on robotics, which would actually have a, you know, would have a very big impact. And so, yeah, maybe you could call out those three categories as obvious ones to, to, to focus on.

• 6:28Tom Bilyeu?

  What kind of timeline do you have for robotics? When are we going to start having that first round of people buying them and having them in their home? I know Elon's pegged it at 20 to 30 grand. When?

• 6:38Speaker 01

  Yeah, so the, the big breakthrough, so, so self-piloting drones were a very big breakthrough. And, you know, the, the dominant ones of those in the global market are this company DJI, which is this big, you know, company in China. You know, but those now work really well. And then there's American companies. We have, we have American companies that have, you know, I think even better technology that aren't quite the same size yet, but are really good. And so, and that's a big deal. Like, so you can, you can have, you know, we have drones now that can like fly between tree branches. They can fly, you know, indoors, you know, they can fly, you know, completely autonomously through like, by the way, underground tunnels.

• 7:13Speaker 01

  And so those work really well. And then, like I said, like self-driving cars, you know, the Waymo, you know, cars now are great. And, you know, people who use them have fantastic experiences. And then the Tesla self-driving capability is getting really good. And, and so like, so I go through those to say those are both robots, you know, flying robot, driving robot. And so walking robot, all of a sudden, it's not so crazy.

• 7:36Speaker 01

  Exact timing, I don't know. You know, I, you know, swag five years, but, you know, could be two, could be eight. I don't know, optimistically, three or four. You know, the, the promise, the promise, you know, there's many, many possible form factors for these things, right? Designs, the, the, the theory of humanoid robots, which I believe is, the, the great thing about humanoid robots is there's just, there's so much of the physical world that assumes that there's a person present, right? So person standing in an assembly line, person driving a car, person driving a tractor, person, you know, picking, you know, picking, picking, you know, vegetables in a field. There, there's just all the, all these systems, you know, that we have that just assume there's a person.

• 8:16Speaker 01

  And so if you build a robot in the shape of a person, in theory, it can just kind of, you know, it can kind of, you know, fill in and do all that work. And so that, you know, that, that should be a very big market. And obviously people, you know, should be very comfortable with that. You know, they'll, they'll, you know, they'll, they'll dovetail, you know, really well into kind of normal society. But I also think there'll be a lot of other, you know, there, you can, you can package these things up however you want. And so there will be lots of other, you know, kinds of, you know, there already are obviously lots of robots in the world, but there will be, you know, more and more of different kinds.

• 8:44Tom Bilyeu?

  And what are the hard parts? What are the hurdles they still have to overcome that's going to cause it to be three, four, possibly eight years from now?

• 8:52Speaker 01

  Yeah, so there's basically, I would say, three big categories. So there's the physical sort of controls, the, you know, the actual physical, you know, kind of body and its ability to kind of control itself. Um, you know, and that's where if you look at like Elon's demonstration the other night, you can kind of see how how fast that stuff's moving. Um, because if you watch like his progression of the other companies doing it, they're they're getting much better. Um, and so that that's just moving right along. Um, then there's battery. Um, power is probably still a fundamental limit. Um, you know, because it's a it's a question of like, you know, how long can you actually like power one of these things before it has to recharge or do a battery swap? And and that's still a bit of a bit of an issue, and it's it's hard to make progress on batteries, but a lot of people are working on it. Um, and then software is the big challenge, um, I think. Um, and, you know, where where we

• 9:37Speaker 01

  we get more involved. Um, and, you know, so this sort of this all the software. And so think about it like, these robots have sensors, they've got visual sensors, they've actually got, um, like the the robot dogs have what's called LiDAR, which is sort of the light version of radar, which is the same thing that's in the Waymo cars. Um, and so that, you know, they've got sensors, they can kind of, you know, gather, they've got sound, you know, they can gather input, you know, from kind of all around them. Actually, they they can gather input from their environment better than a human can, because they can see 360 degrees. And, you know, they can do depth sensing and so forth in ways that we can't. So they get all the raw data, but then it's a process, you have to, you have to actually process that data, you have to form it into a model of the world, you have to then, the robot has to have a plan for what it does, right? And then it has to understand the consequences of the plan. Right? And so, you know, I'm I'm setting the, I'm setting the coffee down

• 10:21Speaker 01

  on the table. Uh, you know, I can't set it down on somebody's hand. So I have to set it down near the hand, but not on the hand. I have to keep it level, because if I tip it, I'm, you know, I'm going to scald somebody, right? So like, I, and then, and then, by the way, while I'm the robot, while I'm setting the coffee down, the person has moved, right? Um, and so I have to adapt to it, right? Um, or, you know, same thing, walking through a crowd, like I can't, you know, you can't have robots running into people. Um, and so you have to have this kind of-

• 10:44Tom Bilyeu?

  You know how they're approaching, how they're approaching that problem? So if I think about when I saw the robots interacting with the people at the party, is there an underlying goal for the robot to be likable? And is it like, hey, get to know people, uh, try to charm them? What what is the plan that they're giving to the robot that it's moving towards?

• 11:04Speaker 01

  Yeah. So, I mean, in general, if you're a company, in general, you want basically completely benign, right? So if you're a company, you want, because it's actually, it lines up nicely with the profit incentive. Uh, you know, you want friendly, approachable, you know, think, you know, think, you know, products that make people happy, think products that make people comfortable, you know, products that aren't threatening or intimidating and aren't, you know, weren't hurting people. And so you you put a really, really big focus on fitting into the environment, you put a really big focus on avoiding anything that would ever, you know, harm a human being. Um, you know, you put a very big focus on, you know, the robot should, you know, happily, you know, you know, just, you know, should happily, you know, whatever, step in a traffic or whatever, if it if it's going to save somebody's life. Um, um, and so, you know, you want that. And then, yeah, I think, you know, generally, you want it to be, you know, sort of approachable, safe, harmless, you

• 11:47Speaker 01

  know, are kind of terms that get used a lot, you know, and, you know, friendly. Now, look, this is the other thing is, um, there used to be this like really hard challenge, which is, how are you going to control these things? How are you going to talk to them? Are they gonna, you know, like you watch Star Wars, they communicate and beeps and boops. Um, you know, if you watch Star Trek and you're watching, you know, Commander Data, you know, he's talking in English. Um, you know, up until two years ago, we thought it would have to be, you know, beeps and boops. But now we have large language models and we have these voice, you know, AI, you know, interfaces, like, you know, OpenAI just released their advanced voice mode, and it's a, it's a full, you know, it's like talking to the Starship computer on the Starship Enterprise, or, you know, a human, you know, it's just like talking to a person. And so all of a sudden, you can give these robots voices, they can talk, they can listen, you know, they can explain quantum physics to you, they can sing you

• 12:30Speaker 01

  a little lullaby, they can, you know, forecast the presidential election, like, you know, they can do it, they can now do whatever you want. Um, and so that's, that's the other part of it is that, you know, you're you're going to really be able to talk and interact with them.

• 12:42Tom Bilyeu?

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• 16:04Tom Bilyeu?

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

• 16:08Speaker 01

  The first one I saw, the Boston Dynamics guys did this hysterical demo where they they wired up one of these early language models a couple of years ago to their robot dog. Um, and they gave it a, like a super plummy, like, English butler voice. Um, and so it's like this, like, you know, mechanical robot dog, like stomping around, but it's talking to you like it's like, it's like you're Bruce Wayne and it's Alfred or something. You know, it's just, you know, it's, yeah, it's a robot dog, what do you see? And it does like the very plummy accent, oh, you know, I see a lovely pile of rocks. Um, and so, yeah, you're gonna, by the way, there's going to be enormous creativity. Um, there's this startup we're not involved in, um, but I I like the guys a lot, uh, called Curio, uh, in Redwood City, that basically has a plushy, uh, so they have a stuffed animal. Um, and, um, it's basically designed for little kids. Um, and it's a voice, it's a

• 16:52Speaker 01

  voice UI. Um, and it's back-ended by a large language model. And, you know, it doesn't move, it's just a, it's just a plushy with a voice box. Um, but it will happily sit and tell kids jokes and teach them all about, you know, whatever they want to learn about and talk to them about whatever's on their mind. Um, and they have it, you know, really elegantly wired up where the parent, the parent can both control how the toy actually, like what it's willing to talk about. So you can, as a parent, you can like define, you know, the topics that are like go zones versus no go zones. So you could kind of say, you know, let it talk to the kid about, you know, science, but not politics, for example. Um, and then you get, as a parent, you get a real-time transcript of the of the interaction. So like, your kid's up in the bedroom, talking to the, talking to the thing, and you actually get to see, see the conversation, right? And so, and it's funny, when you, when you watch this with like little kids, they just think this is like the most natural, normal

• 17:36Speaker 01

  thing in the world. Right? I've talked in the past, I have a nine-year-old, and I brought home, um, when ChatGPT first shipped, um, you know, two years ago, I guess he was seven. And so I, he has a laptop that he does, is some of his, his, uh, school stuff on. And so I set up ChatGPT on his laptop and I sat him down. I was so proud of myself, because I'm like, I'm like, I don't know, it's like, I'm, you know, I'm coming down from the mountain to deliver like the gift of fire to my child. Like, I'm giving him like the super technology that's going to be with him his whole life, that's going to answer any question and help him with all of his work. And it's like the most amazing gift of technology I could give him. And I I showed him ChatGPT, and I said, you know, you type in any question you want, and then it answers the question. And then he looked at me and he said, you know, so? Right? And I was like, what do you mean? So like, this is like the breakthrough. This is like, this is the thing. This is like the thing for 80 years we've all been working

• 18:20Speaker 01

  on, and it finally works. And he's like, what else would you use a computer for? Like-

• 18:24Tom Bilyeu?

  So funny.

• 18:25Speaker 01

  Like, obviously, it answers your questions, right? Um, and so, like, I think kids are gonna, kids are, I mean, it's already happening, kids are gonna pick this up like incredibly fast. It's gonna be, you know, super normal. Um, anyway, so long, long answer to your question, but we have, we have a, we have a chance to design, you know, we can design technology to be as, as, as friendly and helpful and accommodating and and supportive as as we can possibly imagine. And I think that, maybe the commercial products will all get built that way, for sure.

• 18:48Tom Bilyeu?

  Yeah, to me, that's where the biggest disruption is going to be. When I think about AI, I think I'm as optimistic as you in terms of the things that it will do for us. It's intellect, you're going to be able to throw, you know, God knows how many new PhD level people and maybe one day even more at all these incredible problems. All right, that's going to be utterly fantastic. But then I think about, uh, your dog becomes a robot dog, uh, becomes furry and fluffy and wonderful, but it also talks to your kids and helps raise them and you have this lens into it. And then all of a sudden it's, well, it's not just the dog, it's, I've got an AI girlfriend. She's not really a girlfriend, not like that. Well, but then I, you know, I've been talking to her for three years and now a robot body comes

• 19:31Tom Bilyeu?

  online and I want to put that AI into the robot body. And all of a sudden, I, I think that there's going to be a pretty fascinating, uh, to try to keep it positive here, a fascinating schism that will happen in society. So five years ago, I wrote a comic book about this, uh, about what I think is going to happen. And I think there's going to be a bifurcation in society. And I really think this is actually going to happen. Uh, how big and how dramatic that that remains to be seen. But I think you're going to get a subset of society that says, nope, not doing this. It's like the opening line in Dune that thou shall not make a mind, an artificial mind, uh, mirroring human intelligence or whatever the exact line is.

• 20:13Tom Bilyeu?

  And I think people will eschew AI, they will eschew Neuralink and things like that. And, and there'll be sort of this new puritanical, um, vein of humanity. And then you're going to get other people like me that embrace the technology. I may not be an early adopter of Neuralink, but if it truly gets safe and it allows me to upgrade my abilities, man, I will do that in a heartbeat. And so then it becomes a question of how much friction will there be between those two sides? But those seem inevitable. Uh, do you think I'm crazy about that? Or do you see that same inevitability? And if so, how does it play out?

• 20:48Speaker 01

  I mean, I think it's certainly a plausible scenario. I think it's certainly logical. I, you know, it certainly can play out that way. I, I, I guess I, my model of human behavior is different. So I'm skeptical. I'm skeptical that that is what will happen. And, you know, I would just start by saying that there is a, you know, there is a schism of that, of like that in our society today. And, and they are the Amish.

• 21:08Tom Bilyeu?

  Yeah.

• 21:08Speaker 01

  And I actually grew up, you know, they were Amish near where I grew up and, and, um, and, uh, you know, and, you know, so, so the good news with the Amish is they have a defined quality of, you know, quality of life. They have, you know, a whole value system, sort of, you know, involves, you know, rejecting technology for some, by the way, for some very deeply thought through reasons. Um, and, you know, they're, you know, by all accounts, you know, in many cases, very happy. And by the way, by the way, they're also very fertile. Um, uh, you know, so they're, you know, they're having lots of kids. And so there's, there's, you know, there's actually, I think, quite a bit to admire about what they do. You know, like, having said that, I would just say two, two things. One is they're a very, very, very, very, very small percent of the population. Um, and so there's not a lot of people who volunteer to become Amish. And then, um, the other thing that happens, if you track them in detail, what actually happens is they don't reject technology, they

• 21:48Speaker 01

  just adopt it on a lag. Um, right? Um, and so, and basically the lag is about 30 years. Um, and there, there've been, there's a bunch of articles that this over the last, over the last decade where, for example, they're now adopting PCs, a personal computer.

• 22:02Tom Bilyeu?

  Really?

• 22:03Speaker 01

  Yeah, yeah, yeah. Well, because it's so.

• 22:04Tom Bilyeu?

  I thought they were still without electricity.

• 22:06Speaker 01

  No, no, no, no. They've got electricity. I mean, you know, they, they can, they try to control it, but they definitely, this is a great example. They definitely have it, right? Um, um, and then they have telepho, they now have landline telephones. Um, so there's just a, there's just a, there's, there's, there's a point where you just, you know, things just get to be practically, so, you know, the PC, so the PC thing, apparently the articles that I've read, basically what it is, is the personal computer, personal computer, like, you know, they run these small businesses. They'll, they'll have like, you know, they'll do like hand carved furniture, for example. That's like, you know, these amazing things. Well, it's just a lot easier to run a furniture store if you've got a personal computer to do the ledger and the inventory on it, right? Uh, and it's just, and at a certain point, they figure out a theory into which that's okay. They, they still don't connect it to the internet. Um, you know, but they, that they do the, you know, they, they have the personal computer, by the way, that, you know, and then you just kind of say inevitably, the next step is they're going to want to sell their furniture

• 22:50Speaker 01

  online. And so it's just a matter of time until they figure out a way to bring in a internet connection, right? And so one of the really, really fascinating things about AI is it went from being something that was sort of speculative and weird three years ago to something that is now actually quite common already in use. Um, and, and, and, and, and this is quite a profound and powerful thing that I think we'll probably talk a lot about today, which is, uh, which is number one, it's AI is already in, in, in wide use. And so the number of users on systems like ChatGPT and Midjourney and whatever are already in the hundreds of millions and are growing very fast. Um, and lots and lots of people are using these, are, are using these things and they use them in their everyday life. They use them for work. They may or may not admit to their boss, they're using them for work, but they're definitely using them for work. You know, students are using them in school. If you've got like, you know, teenage kids, like any, any classroom in America.

• 23:33Speaker 01

  And I was grappling with this question of like, you know, is the kid bringing in an essay that ChatGPT wrote? Um, you know, but they're helping with homework and they're doing all kinds of stuff. And the, the usage numbers on these services kind of reflect, you know, already broad-based adoption. And then there's a really powerful thing underneath that that's really important, um, which is the most powerful AI systems in the world are the ones that you get on the internet for free. Um, or maximum 20 bucks a month. Um, and, and very specifically, you know, I have the capability, if I want to, you know, I could go spend a million dollars to just have like the best AI. I could go spend a million dollars a year. If I go spend a million dollars a year today, I do not get a better AI than you get when you sign up for ChatGPT. It, it's literally not available. I can't do it. The best AI in the world is the thing. It's on ChatGPT or by the way,

• 24:17Speaker 01

  Google Gemini, or Microsoft Bing, or, um, you know, Anthropic Claude, you know, there are XX, um, you know, Grok, the, the XAI one, or Mistral, which is, you know, one of our companies, or Llama for Meta. There's like seven of these now that are like available either for free or for, or at most for 20 bucks a month. Um, and, and they're the best in the world. Um, and so it's actually quite shocking, striking, shocking, which is the, a lot of people have the mental model of, oh, well, the best technology must be basically ported by a few people who are then going to lord it over the rest of us and are going to make all the money on it, right? It's kind of the, you know, the kind of, you know, kind of, oh, is the fear in these things. The, the reality is like this technology is democratizing faster than the computer did, faster than the internet did. It's available to everybody right out of the chute. By the way, it's getting built, you know, Apple's building it into the iPhone. It's just, you know, now it's just Apple intelligence is

• 25:01Speaker 01

  going to be a standard feature of the iPhone. And so this technology basically has gone from not present in our society to like almost universal in one step. And I, and I just, you know, it, it may be that people choose to voluntarily give it up, but I, I, in my life, I have not yet seen people who sort of voluntarily renounce something that they get used to. So it, yeah, it, it would be a first if it happened.

• 25:22Tom Bilyeu?

  All right. Uh, I hear that. And you're the right person for me to have this conversation. I love when dogs bark the loudest because they're on a leash. So you're going to be my leash. I'm going to paint, uh, a scenario, knowing that you're going to pull me back from the brink, because I'm fundamentally a techno optimist and I'm definitely somebody that will embrace this technology as fast as humanly possible. We're deploying it here in my company as rapidly as we can. I will literally, if it's proven safe, get Neuralink, the whole nine. Uh, so here's what I think plays out. Um, this is as close to the sort of realistic mess that I think we'll go through. The long arc of history bends towards justice, but, uh, history does not care about any single generation. And I think that the thing

• 26:04Tom Bilyeu?

  we will all have to get very politically comfortable with is the fact that yes, AI is going to displace jobs wildly as we move towards something absolutely wonderful and spectacular, but it's going to displace a lot of jobs. Uh, some of those people will redistribute themselves by acquiring new skills. Other people will not, uh, and it won't be a great time for them. And their families will rally around them as the material wealth is unlocked, as spending power becomes more abundant, all of that. The, the younger people that are more intellectually nimble, uh, will take advantage of that to, to care for people. But there's going to be this conflict on the left and the right as to, hey, shouldn't we just give these people UBI or whatever to take care of the people that are going to struggle because they are going to struggle? And if people don't have

• 26:48Tom Bilyeu?

  a mental defense, if they don't have a narrative that they can understand about how we weather that storm, I think they'll make very bizarre economic choices. As you were talking, um, you're talking about deflation and people ought to wonder how on earth, given all the technological advances we've had over the last 300 years, how is inflation still going up? This seems crazy. And the reason that inflation goes up, despite the massive deflation that technology brings, is that the government gobbles it up by printing money. And oh boy, do I have a personal bone to pick. I have no idea your take on the economy and how it intersects. Uh, so I'll plant my flag and let you react. I think that the, you

• 27:33Tom Bilyeu?

  need to only look at the M2 money supply chart to see. I mean, it's just absolutely outrageous, uh, how much more money has been poured into the system, completely artificially just generated, uh, out of thin air. Um, and that, that is the inflation. When we say inflation, that's what we're talking about, the inflation of the money supply. In doing that, the government doesn't have to get your vote on something. They will, I refer to, and I, I do not want to put words in your mouth, but I refer to that as the government steals from you and then they force you to play, uh, the stock market as one stand-in for investments in order to beat, uh, inflation caused by them printing money and stealing from you. Um, and I think that's deranging. And I think that the government has a moral

• 28:15Tom Bilyeu?

  obligation to give people a non-inflatable currency in which people can at least park their wealth so that the average person who does not want to play the stock market can just save. Like, uh, a guy that is a janitor and he's just trying to get by and, and take care of his family should be able to sock away money and not have its value eroded over time, uh, through very conscious and poor, in my opinion, policies. Um, curious to get your take on that.

• 28:44Speaker 01

  If, if, if I tell you that in any given time, you could have more or less technology change, and then that that change would show up in economic statistics, the way that economists measure it as what they, productivity growth, which is a thing they measure. It's a, you know, it's an actual number. Um, and so, you know, if you have, if a society has, you know, 1% productivity growth, that's super low. If they have 4% productivity growth per year, that's like super high. Let's, let's, let's call that the super range. And if you could ever get to eight or 10% productivity growth, you'd have cornucopia, technological utopia, it'd be amazing. Everything, everything would get like super cheap and abundant, super fast. But like that modern societies go somewhere between one and 4%. Um, would you say that we live in a time today in which productivity is, uh, growth and therefore technological change is running high or low?

• 29:26Tom Bilyeu?

  Um, I think we are about to unleash a ton of that productivity, but right now I think that the government is siphoning off so much of that productivity that you get this schism between the young and the old. So the old, I think, are doing very well and the young are getting absolutely clobbered. And so they don't feel it. But if AI does what we think it's going to do, then yes, I think that we will, um, finally be able to unlock a lot of that.

• 29:53Speaker 01

  But just, take, take the distributional part of it out, just because we'll come back to that. But just take the distributional part out. But just talk, just about just the rate of technology change. Like, do, do we live right now in a time of great, of great technology change or a low technology change?

• 30:05Tom Bilyeu?

  The only great technology change is in AI. So low.

• 30:09Speaker 01

  Okay. And then you'll probably get the next answer right, which is, did we have faster technology change between 1930 and 1970 than we do today or slower?

• 30:19Tom Bilyeu?

  Much faster.

• 30:20Speaker 01

  Much faster. Yeah. So those are the correct answers. And so the metric on what's happened, and this is actually quite important, is that productivity growth and therefore technological change in the economy was much faster in the decades that preceded the 1970s. Actually, by the way, the turning point was the year I was born. It was 1971.

• 30:36Tom Bilyeu?

  WTF happened?

• 30:38Speaker 01

  WTF happened in 1970? Yeah. So there's a website called WTF happened in 1971.com. And it's just, it's like literally hundreds of charts of basically this discontinuous change on all kinds of economic and social markers that kind of kicked in the year I was born. I do believe it is entirely my fault. I will, I will, I will, I will confess to that. But yeah, one of the things that happened was right around that time, productivity growth downshifted. It was running at like 2%, 3%, 4%, and then it's sort of been 1% to 2% ever since. And it ebbs and flows a little bit with the economic cycle, but like it's been quite low for the last, for the last 60 years. Part of, it dovetails to the political thing you were saying. There's a lot of questions as to why it's been so low. There's actually economists talk about something called the productivity paradox

• 31:19Speaker 01

  because it was really weird because the computer emerged in the 1970s. And so all the economists in the 1970s said the computer is going to lead to, it's going to lead to cornucopia. It's going to lead to enormous productivity growth. Of course it is. You've got Moore's Law. You know, it's just like, it's all this software and all this inventory, just-in-time manufacturing, and you're going to have, you know, by the way, robots, right? And so you're going to have this, for sure, you're going to have a massive takeoff in productivity growth. And actually, what happened was productivity growth actually downshifted. And so the whole, all of our expectations for how society works are actually geared towards low productivity growth and low economic growth from a historical standpoint. The importance of that is really key to the next thing that you said, which is, the psychological effect of being in a

• 32:00Speaker 01

  low-growth environment is zero-sum politics. Right? Logically, right? Because if we're in a high-growth environment, if the economy, if technology productivity growth is running at 4%, or God willing, someday more, and if economic growth is running at 4% or more, the economy will be doing so well, it will be spewing money in all directions. Everything will be going crazy. Everything will be, every business will be flush. Every consumer will feel fantastic. Jobs are being created all over the place. Everybody's kids, for sure, are going to live better lives than their parents did. It's going to be great. By the way, the 1990s were that, right? There was this kind of five-year stretch in the 1990s where economic growth really took off. And you probably remember, you probably will be like, it was, it was, it was fantastic, right? Everybody felt fucking awesome, right?

• 32:43Speaker 01

  And so this is one of the kind of weird, this is why like a lot of the fears around the impact of technology, I think, are really misguided when it comes to all these economic and political topics, which is, from a political standpoint, we should hope that we have rapid technology progress, because if we have rapid technology progress, we'll have rapid economic growth. If we have rapid economic growth, we'll have positive-sum politics, right? For me to be in a high-growth environment, for me to be better off, I can go be better off. I can go exercise my skills and talents and get new jobs and switch jobs and switch careers and do all kinds of things. And I have a path and a future for myself and my children that does not require taking away from other people. In a low-growth environment, all of the economics and all the politics go zero-sum, because the only way for me

• 33:26Speaker 01

  to do better is I have to take away from you. Right? Or to your point, the government, exactly, I completely agree with you. Or what happens is the government just inflates. And they inflate because they want to basically buy votes. They want to basically spend on programs and they want to buy votes. And so, so this is sort of what I would say, which is like, if you want zero-sum, zero-sum, smash-mouth, destructive politics, with the government playing a bigger and bigger role, you want low technological development, you want a slow pace of technological development. If you want positive-sum politics where people are thrilled and excited about the future and about their own opportunity, and they don't have to feel like they have to take away from somebody else, and they don't need handouts from the government because they're doing so well, you want rapid productivity growth, right? And so you end up saying like, it's the opposite of the fear that everybody thinks that they have.

• 34:12Tom Bilyeu?

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• 34:56Tom Bilyeu?

  four extra months of Surfshark, backed by a 30-day money-back guarantee. That's S-U-R-F-S-H-A-R-K.com/tomb. Surfshark.com/tomb. Use code TOMB for four extra months of Surfshark.

• 35:18Tom Bilyeu?

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

• 35:22Speaker 01

  I would just say two things on inflation. It's actually pretty, pretty interesting. So there's an overall concept of inflation, which, as you said, is growth of the money supply. But the, but the, but the way that that plays out in the economy is, and they actually analyze it this way, it's basically a represent, it's basically the way they think about it, is it's the, it's the basket of overall prices of everything in the economy. And the government agency that calculates the rate of inflation uses a basket of sort of equivalent products over time to try to get a sense of what's actually happening with prices. And so there's, there's both the money supply aspect of inflation and the government printing press and all that, and that's totally true. But what's actually happened inside that is actually, because of differences in technology regulation, you actually have a really, actually historically unprecedented difference in how different

• 36:04Speaker 01

  industries are actually inflating or deflating. And there's a chart that we can maybe post for your listeners that basically shows three really big important sectors of the economy, which are healthcare, education, and housing, where the prices are skyrocketing. Which, and by the way, everybody feels this, right? This is just like, okay, you want to go buy a starter home, or you want to get good healthcare, or you want to get your kid into a good school. The prices are going crazy. I mean, the, you know, you see this in housing prices, of course. Another version of this is the, you know, higher education. You know, a four-year college degree at a private university now costs $400,000 and is on its way to a million dollars, right?

• 36:38Tom Bilyeu?

  That's crazy.

• 36:40Speaker 01

  Completely crazy, completely crazy. So the price of higher ed is just skyrocketing. The price of higher education, bachelor's degrees, master's degrees, is rising far faster than the rate of inflation. And same thing, and healthcare costs are rising faster than the rate of inflation, and housing prices are rising faster than the rate of inflation. But then you have all these other sectors, and these are sectors like video games, entertainment, consumer electronics, by the way, food, cars, which is good, retail, you know, consumer products generally. Those prices are crashing, right? And so the things that you can buy today versus 20, 30, 40 years ago for the same dollar in those categories, I just, you know, take obvious, take obvious examples, music. Obviously, to buy music 30 years ago, you had to go spend $15 to buy a CD and get 10 songs, out of which you maybe wanted

• 37:25Speaker 01

  two of the songs. Today, $10 buys you Spotify for a month, and you have, you know, 10 million songs on demand, and you can listen to it 24/7, and it's fantastic, right? And so the price of music has crashed, right? And so the price of housing, education, and healthcare has skyrocketed. The prices of everything else is crashing. What explains that? Well, the prices for everything is crashing. Number one, they have rapid technological change, which is, which is driving down prices because of productivity growth, and they're not regulated, right? Nobody in the government is price-fixing music, right? Whereas housing, education, and healthcare are incredibly highly regulated and centrally controlled by the government, right? And they have fixed supply dictated by the government. And they

• 38:07Speaker 01

  have very slow rate of technological adoption, right? It's almost impossible to get new technology into the healthcare system, into the education system, or into housing. Like, the robots are not building houses. Like, it's not happening, right? Like, it's just not happening, right? And so what we have actually in the economy is a diver, I call these the sort of the slow sectors versus the fast sectors. The sectors for which prices are skyrocketing because of slow technology change and too much government regulation, and the sectors where prices are crashing because of rapid technological advances and lack of government regulation. And when you chart these out, there's, you could just like extrapolate the lines. And so the, where this is happening is, you know, within like a decade, if the current trends continue, within a decade, a four-year college degree

• 38:50Speaker 01

  is going to cost a million dollars, right? And a flat-screen TV that covers your entire wall is going to cost $100.

• 38:58Speaker 01

  Right, and at some point you might want to ask the question like, isn't that backwards? Right, like, isn't what we all, you know, it is where I get very emotional about this is like, okay, define the American dream, right? The American dream, by the way, for that, you could probably substitute this, you know, the dream in many other countries, but let's just say the American dream, the American dream, I want to buy, I want to be, I want to buy a house for my family, um, I want to be able to send my kids to a great school, and then I want my family to be able to get great health, great healthcare. Right, like, those are like the three higher order bits, and those are the things where we have wired, our system is wired right now to drive the prices of those things to the moon. Right, and then, good news, iPhones and cars and digital music are plentiful, but they're not healthcare education and, um, uh, and, and, and housing. And, and, and this is the other thing that's driving inflation, right, because then what happens is,

• 39:44Speaker 01

  the, the fast sectors of the economy with prices are crashing, they're shrinking as a percentage of the economy, right, because prices are falling so fast. And then because prices are growing so fast for healthcare, education and, and, and housing, they're becoming larger and larger parts of the economy. And so the economy writ large and people's pocketbooks and how you spend your money, it's being eaten by these sectors that have slow technology growth and, and, and, and, and therefore high price, uh, rapidly, rapidly rising prices. By the way, once again, if you want to fix this problem, what's the way to fix this problem? You inject a lot more technology into those three sectors. Right, you would want completely automated, you know, AI driven healthcare, you would want like AI education, you know, every kid having an AI tutor, um, teacher, um, and you would want robots building

• 40:28Speaker 01

  houses, right, you, you, if you wedged full modern technology into those three sectors, you could crash prices, which would also crash inflation and would cause everybody to be far better off. And so once again, it's this thing where you, you think you don't want the technology change, you actually very, very, very much want the technology change. And if we don't get the technology change, our politics for the next 30 years are going to be so crazily vicious, right, because we're all going to be fighting over this shrinking pie. And we're just, we're just gonna, we're just gonna hate how we have to live, so, let me, yeah, let me pause there.

• 40:56Tom Bilyeu?

  Do you think the benefits of AI will be so overwhelming that there's just no way for politicians to hide the ball, or, uh, will there be enough narrative and story and being able to leverage the resentment that exists right now to, uh, continue to force all that, continue to grow government, keep it strong, keep it big?

• 41:17Speaker 01

  Yes, let me give you a micro answer and a macro answer. So the micro answer, so do you see the, the dock worker's strike that just happened?

• 41:22Tom Bilyeu?

  Yeah.

• 41:23Speaker 01

  Yeah, so the dock workers just went on strike, um, uh, and they demanded this huge raise, they demanded a huge raise, they demanded no more technology at the docks. Uh, they, they, they have this, they have this, actually this dichotomy of an argument, they say, our jobs are like so backbreaking and arduous and physically harmful to our workers that like, we need to be appreciated a lot more. And we want you to completely ban the introduction of automation that would basically, uh, automate, automate those jobs so that our, our workers don't have to do them, right? And they, they, they kind of make both sides of this argument like at the same time, because they're completely contradict, contradictory, but that, that's not their responsibility to resolve it. But the dock workers go on strike, um, it, it, it, they, they were literally asking for no more new technology at the docks, um, to, to, to preserve the, the, the, the jobs. It turned out through that, I discovered, I just had never looked at that industry before,

• 42:07Speaker 01

  it turns out there are 25,000 dock workers in the US, except that's not right, there's actually 50,000 dock workers in the US. There's 25,000 dock workers actually work on the docks, and then there's 25,000 dock workers who, who just, who don't work, who just sit at home and collect paychecks because of prior union agreements banning automation.

• 42:22Tom Bilyeu?

  What?

• 42:22Speaker 01

  Yes.

• 42:23Tom Bilyeu?

  Whoa.

• 42:24Speaker 01

  Yes, because in previous, in previous bargaining rounds, they cut deals where if there were introduction of like, for example, machines, cranes to, uh, to, to unload containers from ships, that those jobs would not go away. And so those jobs have not gone away. There's nothing for the-

• 42:40Tom Bilyeu?

  That's crazy, that is malpractice.

• 42:43Speaker 01

  Well, so this is the thing, so this is the thing, okay, so this is the classic thing on all these things, is that good or bad? Well, it depends who you are. This is the, there's a political science, there's this concept of, of concentrated benefits and diffuse harms, and so for those 50,000 dock workers, this is great. For the rest of us, it just makes everything we buy more expensive. Right, because it makes working the docks more expensive, right, because it's got all this dead weight, right, loss on, on, on, you know, on, on ships, which is a big part of the cost of like, all the food we buy is more expensive as a consequence of these kinds of arrangements, but, you know, you and I pay another, you know, five cents every time we go to the supermarket as a consequence of this versus the 50,000 people who are organized in a union, right, and are able to negotiate on their behalf, right? So, so, so, so, so, right, concentrated benefits to the dock workers, diffuse harms to the rest

• 43:28Speaker 01

  of the economy, and, and every time you get a special interest group in the economy pleading for, you know, this kind of employment protection, that's what's happening, right? They're, they're basically trying to create a cartel, an employment cartel that benefits the people in the cartel at the expense of everybody else. So here's the, here's the, the macro version of that is, um, 30% of the jobs in the United States today requires some form of occupational licensing. You, you can't just get the job, you have to have some form of certification that you're qualified for the job. This has been pushed to extraordinary lengths in the United, in, in California, you need, I think it's, it's now, it's like 900 plus hours of professional training to be a hairdresser. Right, yes, correct.

• 44:09Tom Bilyeu?

  Uh, what?

• 44:10Speaker 01

  Yes, you, you cannot just like start cutting people's hair for money. No, no, no, no, no, no, no, that's illegal. You need to have a, whatever, a cosmetology certificate, if you get the cosmetology certificate, you have to go to hairdressing school, to do that, by the way, you have to get admitted at hairdressing school, it has to be a certified hairdressing school. By the way, guess who controls how many hairdressing schools there can be, is the, you know, the current, oh, this is my favorite part, let me give you my favorite example of this, so the university system, so, so federal student loans, there's, there's federal student loans for you to go to college, for you to go to college, you, you basically can't, normal people, you can't afford to go to college if you can't get federal student loans. So you can't be a university or college or university in the US without having access to the federal student loan program, it's not possible. Um, so, but to be a college or university that is able to get, to give out federal student loans, they have to be accredited.

• 44:56Speaker 01

  Uh, guess who accredits colleges, colleges and universities? The existing colleges and universities.

• 45:02Tom Bilyeu?

  Yeah, saw that one coming.

• 45:03Speaker 01

  Guess how many new colleges and universities they're accrediting?

• 45:07Tom Bilyeu?

  Yeah, but this-

• 45:09Speaker 01

  Zero, right, and so, so 30% of jobs in the country right now require some form of licenser accreditation, by the way, this is all, you know, by, by the way, this is all doctors, and by the way, I think that's good, you probably want doctors to be accredited, but it's also, you know, nurses, nurse practitioners, it's, you know, and then it's, and then it's, it's, it's not just lawyers, it's also paralegals, um, and then it's not, you know, it's, it's, you know, it's all kind of general contractors, you know, it's, it's like, and then, and then on and on and on, including, depending on which state you're in, including, you know, hairdressers and many other jobs where you would not think this is required, by the way, or another version of this is teacher, you know, to be a teacher in a lot of places in the US now, you need an education degree. Right, is there any evidence that teachers with an education degree are better teachers than teachers without an education degree? I don't think so, by the way, the education schools are completely bananas crazy, you know,

• 45:52Speaker 01

  you know, they're the most crazy of like the academic departments at these crazy universities, right, but again, it's, it's, it's, it's a cartel structure, of course, K through 12 education is not just a cartel, it's a government monopoly, right? So you, you have to get actually hired into the, into the, well, actually, this is the other great part, um, you have, um, higher ed is like this, there's, there are, uh, uh, K through 12 is like this, and there's other branches of, of, of the federal workforce and state workforce that are like this, or, or actually police and police that are like this. You have quite a few people in the economy today who both have, they're government employees, they have civil service protections because they're government employees, which means in practice they can't be fired. But they're also members of what are called public sector unions. Right, so they both have to get hired by the government with whatever criteria they set,

• 46:37Speaker 01

  and they have to get admitted into the public sector union, and they have the employment protections of both, right, of, of both the civil service and the public sector unions.

• 46:46Tom Bilyeu?

  Good lord.

• 46:46Speaker 01

  Right, and this is why, by the way, you can't fire, like, bad teachers can't get fired, right, because you, you hit, you hit all these things.

• 46:50Tom Bilyeu?

  That winds me up.

• 46:51Speaker 01

  So just, so the point of that, the, the point of that is, AI cannot cause change that quickly in this system. AI cannot become a lawyer, it's not legally allowed to, it can't become a doctor, it can't replace the dock worker, it can't cut your hair, it can't build your house, it's not legally allowed to, right, and so, a very large, it goes actually to the Gulliver thing, a very large percentage of the economy as we experience it literally cannot be automated, it's illegal to do so, um, and so I actually-

• 47:20Tom Bilyeu?

  That's so ridiculous.

• 47:21Speaker 01

  Yeah, and so I actually think what's going to happen is, the, the economic impact of AI is actually, is actually going to be very muted compared to what people are fearing, or hoping or fearing, because it's literally not legal to do that.

• 47:32Tom Bilyeu?

  It's crazy. So if everything that you just walked us through is true in terms of when you have high growth, everybody's feeling good, more technology equals more growth, AI is poised to bring that growth, but you have this trepidation and so people not it's not just that, but you have trepidation around it. So the fact that the government tends towards this justify its existence, create a new regulatory body, slow things down, everything just grinds to a halt for people that don't know the story of Gulliver's Travels. You have this guy that encounters these tiny Lilliputians and despite him being, you know, whatever a thousand times bigger than they are, they they just end up tying him down with all these tiny little strings. And it's a analogy that Elon certainly has

• 48:14Tom Bilyeu?

  used a lot. What do you think about his idea of going in and creating a an efficiency program inside the government to try to free up some of these strings so that the economy can get going again?

• 48:27Speaker 01

  Yeah, that's right. So I'll give you a couple of books if people want to read about this. So one is the Supreme Court Justice Neil Gorsuch just wrote a book. I think it's called like I forget the name. It's like overlaud or overlawed or something like that. But he basically lays out the data on the number of laws in the country. And by the way, this is another one of these WTF happened in 1971 things, which is starting in the 1970s, the number of laws and regulations in the US just took off like a rocket. Basically, what happens, the lawyers took over everything. And by the way, a big part of that is in politics, that basically almost everybody now who's in elected office is a lawyer. Right. And so basically, the lawyers just kind of swept into control of everything. And so if you and also Senator Mike Lee has also done a lot of work on this. If you and you can just count the number of laws, and then you can also count the number of regulations,

• 49:10Speaker 01

  which if anything is even worse, because they're not even laws. They're just like a bureaucrat who's decided something, right? And the number of regulations is just like skyrocketed. So he goes through it in the book. And then there's another book called Three Felonies a Day. And it goes through in detail that technically, odds are you, I, and every other American citizen are committing at least three felonies every day. There are so many-

• 49:31Tom Bilyeu?

  And we just don't know it?

• 49:32Speaker 01

  We don't know it. We don't know it. And the reason is because there are so many penalties, there are so many felonies on the book, on the books. And they are the felony laws are so sweeping in what they cover. Now, you know, most of those never get detected or prosecuted. But like if somebody want if prosecutors want to come at you, they can figure out ways to do this is whatever people with lots of experience in legal system always tell you like if the feds want to get you, they're going to figure out a way to do it because you're almost certainly tripping something. And so, yeah, so I completely agree with Elon on the on the on the nature of the problem. Like, it's just it just, yeah. And again, this is this is sort of this weird, it's this like concentrated benefit diffuse harm thing, which is like each law or regulation isolation seems like a good idea. And each law or regulation has somebody advocating for it because they're going to benefit from

• 50:17Speaker 01

  it. And they, you know, and typically, there's like some level of self interest, you know, somebody's trying to get something for themselves. And then they sort of have a cover story of like, you know, consumer benefit or something. And then they get these things passed, right? And they, you know, operate in Washington and they get these they're in the state house and they get these things passed. And, you know, each one of them on its own is not a big deal, but you run that process at scale over 60 years. And that's when you end up with the Gulliver, you know, the Gulliver scenario, which is you're just you're just drowning in laws and regulations. And again, I tie back to what I said before, like, that's why the prices of healthcare, education, and housing have skyrocketed is because that's where like the laws and regulations and the economy are concentrated.

• 50:51Tom Bilyeu?

  All right. So let's talk about then the next four years. So if Elon were to find himself in that position, do you think that we could meaningfully strip away red tape to the point that those that that scenario you painted where those three things we care about so much where the prices begin to crash? Or is that just unrealistic? Full stop? Is it unrealistic in four years? How much can we do?

• 51:18Speaker 01

  So it could be done for sure. There is actually a case of it actually happening in the world right now, which sitting here today looks very good, which is Argentina. And so Javier Millay is the new president of Argentina, has passed, I don't know the exact details, but I think his first big reform package, which was a real fight for him to pass, I think it was like it fundamentally was like, I think it it took regulations out of I think 800 different sectors of the Argentinean economy in one package. And they have a follow up package they're working on. That's like another, it's like the 2000 or something. So he's, he's trying to do exactly what you just described. He's, he's trying to just basically, he's just like, Millay, Millay, Millay is this, you know, staunch libertarian, you know, antisocialist, anti-communist. He has this great line, which he used the

• 52:01Speaker 01

  other day, which I love so much. So Margaret Thatcher had the famous line about socialism, which is she said, you know, the thing about spending other people's money is eventually you run out. Millay has a better term, but she says, he says, anybody can be, anybody can be a prostitute with other people's asses.

• 52:19Tom Bilyeu?

  That guy is a gangster. He's hilarious.

• 52:22Speaker 01

  Which is friggin amazing. Anyway, so, yeah, no. So he's trying to strip as much regulation out as possible. And the and the thesis of it is precisely this. It's like, okay, you strip out regulation, you remove government control, you liberate the people. You liberate the people to be able to exchange, you know, to go into voluntary trade and exchange, to be able to actually conduct business with each other without the government interfering with it all the time. And then as a consequence, you get like far higher rates of economic growth, far higher rates of prosperity, you know. And, and so it's this is a big experiment. And of course, Argentina has been a case study for 100 years of doing this the wrong way. And he's now administering a form of shock therapy to basically see if he could do it the right way. And by the way, sitting here today, you know, in very short order, inflation in Argentina has, you know, they've had a persistent inflation problem for a very long time. He's completely nuked inflation and economic growth has kicked

• 53:05Speaker 01

  in and job growth has kicked in. Now, he is fighting like, you know, he has enemies, right? He is fighting like crazy, both in the political system and riots in the streets, you know, from people who are trying to stop this. And so anyway, so that goes to the to, you know, to our situation, which is yes, the theory is totally sound, right? Like everything that Elon is describing should should absolutely happen. You know, this should absolutely be done. By the way, I think basically, everybody knows this should be done. Like, again, concentrated benefits diffuse harms, even people who benefit from some aspect of this are suffering from it in every other area of their lives. Right? And so this is what Millay always points out is the system in aggregate is making everybody poorer. Like, it is leading to all these like bad, as you said, it's leading, for example, to intergenerational conflict that's just like unnecessary and very destructive.

• 53:49Speaker 01

  And so it's just like, let's just stop this form of self harm. But to do that, the reason I say this, every single regulation has somebody behind it who doesn't want it to go away. Right? Because it benefits somebody, right? It benefits that, you know, the dock workers who are sitting at home, right? It benefits somebody, right? It's all the all the little cartels and monopolies and oligopolies and little conspiracies in the economy, like, you know, they are in business because they're protected by the government. And when you strip these regulations away, you expose them to competition and they really don't like that. And so there will be a backlash from the system, from the from all of the, you know, the special interest groups in aggregate will rebel in great numbers. And then, you know, look, the key fight ultimately is the civil service itself, you know, the

• 54:33Speaker 01

  actual government employees, right? And so, you know, for example, you know, how about a reform where like there's actual performance metrics for government employees and what performers get fired?

• 54:42Tom Bilyeu?

  Brother, please, if you want to get me in a cult, start a cult about that. I'm here for that. I'll do what we need. I'll wear whatever crazy outfit. I am here for that one.

• 54:52Speaker 01

  Yeah. Yeah, exactly.

• 54:53Tom Bilyeu?

  Let me ask, going back to Millay, are the layoffs causing any sort of economic downturn? Because one criticism I've heard of Elon is, hey, if you come in and you do this and you slash it, not only is it cruel, but you're going to tank the economy, you're going to have so many people without a job.

• 55:08Speaker 01

  Yeah, yeah. So that so, yeah, so this this happens. And by the way, this happened actually in in the in the late 70s, early 80s, there was actually a version of this, which is inflation in the US actually got completely out of control. And, you know, there was everything was kind of going sideways, but inflation went crazy. I think inflation spiked at like 15%. And then Paul Volcker, which was super destructive, right? Like really ruinously bad. Like, it destroys everything. It destroys savings. It destroys ability for businesses to plan. It just it's it basically damages damages everything. And Paul, and the way you crack the back of inflation is you raise interest rates. And you deliberately cool the economy in order to bring down the demand for money and then inflation falls. And so Paul Volcker, who was the chairman of the Federal Reserve, who is a famous guy, is like the six foot eight giant guy with the cigar. And he was the

• 55:53Speaker 01

  head of the Federal Reserve. And he lived in the, he lived in the undergraduate dorms at, I think Georgetown, and like took the taxi to work. So he was like in contact with like regular people every day, even though he was like the head of the Federal Reserve in his three piece suit. And whenever he testified to Congress, if you see the old photos, he's just constantly just like giant clouds of cigar smoke around him all the time. So one of these like old school figures. And he raised interest rates in 1981, I think, to 20%.

• 56:20Tom Bilyeu?

  Whoa.

• 56:21Speaker 01

  Which basically crushed the economy. It basically like crushed demand in the economy. It meant that nobody could borrow money, nobody could buy a house, nobody could start a business. It was like very, it was very devastating in that moment. But he wrote a book about this. And he said, at no point, like when he would like walk down the street, and people would recognize him, this is in DC, and he'd be walking down the street or he'd be in the cab. He said, nobody ever, nobody was ever mad at him. Because what they said was inflation is so bad. We know that inflation is bad. We know that you have to do what you're doing at interest rates to do it. We know if you do it, you're going to fix the inflation problem and things are going to go back to being good again. And so we support you, stick with it. And so he had, he had the people on his side. And Millay has the same thing in Argentina right now. He has very high level of support from the population, because they've seen the other experiment for too long. They've been

• 57:02Speaker 01

  through, they've been through a society with too much regulation, too much corruption and too much inflation for a long time. And they're just like, look, the, you know, the people are behind him. You've seen in the polls and you see it in the voting is they're just like, all right, we're going to, we're going to try Plan B. And so, so what you need is you need, you need a politics of Plan B. You need a majority of the population to basically say, you know, look, like, whatever the pros and cons of the old system were like, they're not working. And we need fundamental change. And then obviously, you need leadership that's gonna, you know, that's gonna be willing to implement that. But if the people are behind it, you know, then you can actually do that. And so the fact that it's actually the fact that it worked under Volcker, and the fact that it's working under Millay is very promising, like those are two great examples of how it can work. You know, we don't yet have that, but we could.

• 57:49Tom Bilyeu?

  Very, very interesting. When I start thinking about how we build back, we get the economy going, we take off the gulliver strings, one of the things that I would want to see is, one of the things I think we need to see is a return to prizing freedom of speech. Because if we can't debate these ideas, if people can't get in there and mix it up and say, okay, I think this is the way, no, that's terrible, we should be doing it this way. But, you know, nothing being verboten, like actually being able to discuss these ideas. That feels like a critical need. What's your take, especially coming off the heels of talking so much about AI? What's your take on censorship? Where are we culturally?

• 58:30Tom Bilyeu?

  And what's AI's role going to be in either breaking us free from censorship or using that to really tighten down?

• 58:37Speaker 01

  Yep, yep. So I should start with, I am classic Gen X. I am 100% pro free speech.

• 58:42Tom Bilyeu?

  Makes two of us.

• 58:44Speaker 01

  I am 100% pro free speech. By the way, the first, you may know this, the First Amendment, you know, guarantees the government, at least in theory, is not supposed to censor us, although that's been happening a bit lately.

• 58:53Tom Bilyeu?

  Just a smidge.

• 58:55Speaker 01

  Just a smidge. But the government also, there's case law around the First Amendment that actually defines illegal speech. And there are a bunch of forms of illegal speech. And it's things like child porn, and it's incitement to violence, it's terrorist recruitment, right? And so there's actually like carve outs for, you know, that stuff. And so like my, my, my philosophy is basically, US law is actually very good on this. And US law isn't just US law, it's also, you know, this has been litigated culturally in the US as well as legally for 250 years, you know, going back to the Bill of Rights. You know, we, we, we, we, we and our predecessors in the US went through a long process to get to where the First Amendment is. I think it therefore represents more than just a law, I think it's also a statement of culture and a statement of values. And I, I've always-

• 59:36Tom Bilyeu?

  So true.

• 59:37Speaker 01

  Right? And I've always been an advocate that like the internet, the code for internet freedom of speech should basically be that, should be the First Amendment with only limited carve outs for things that are truly dangerous, you know, truly destructive. Like I, you know, I don't want, you know, I don't want terrorist recruitment anymore than anybody else. But like, you know, should people be able to talk about their politics online without getting censored 100%? Right? Full, full range of expression 100%? Of course. Like it's the American way, of course. And so I'm 100% on that. You know, you, you know, probably as much as I do about the last decade, you know, which I've seen up close, which is, you know, generally, things went very bad. You know, the internet companies, you know, ran into a variety of, you know, externally and self inflicted, you know, situations where there ended up being a pervasive censorship machine for a long time. You know, the, the most dramatic change of that is Twitter before and after Elon buying

• 1:00:22Speaker 01

  it. And we're, by the way, we're a proud member of, of the syndicate that bought it with Elon. And so, you know, I'm, I'm completely thrilled by what he's done there.

• 1:00:29Tom Bilyeu?

  Thank you for your service, by the way. To me, it's just so better. I cannot, yeah, I just can't believe that that was controversial. It's crazy.

• 1:00:36Speaker 01

  Yep. And as you know, it was a big change. Like it was a, it was an absolutely dramatic change. We're also, by the way, the main investor, outside investor in Substack, which I think has also has done a spectacular job at navigating through this and is, you know, is, is basically has come out the other side of, and you know, they're a small company. So when the pressure gets brought to bear on a small company, it can really have an impact. But the, the, the, the team there has, I think, done a fantastic job navigating to a real freedom of speech position. And as a consequence, Substack has now the, the full range of views on all kinds of topics in a really good way. So the, so the good news is we have, you know, we have two, two case studies where this has gone really well. You know, the, the other ones are more difficult. Here's what I would say is, I think the, the internet, social media censorship wars were the preamble to the AI censorship wars. I think the AI censorship wars are going to be a thousand times more intense and a

• 1:01:21Speaker 01

  thousand times more important. Yes, 100%. And so, and, and the reason for that is, you know, the internet, social media is important because it's what we all say to each other, but AI is going to be, I think, the software layer that controls everything. It's going to be the software layer that basically tells us everything. It's going to be the software layer that teaches our kids. It's going to be the software layer that we talk to every day. And, you know, as, as I think you know, there's already AI censorship, like, you know, these, you know, a lot of these LMS are, are very slanted. And, you know, it's very easy, by the way, it's very easy to see because you can go on them today and you just ask them, you know, two questions about two opposing political candidates and they give you completely different, you know, one candidate, they're like, I'd be happy to tell you all about his positions.

• 1:02:06Speaker 01

  And the other candidate, they're like, oh, he's a hate figure, I won't talk about him. And it's like, wait a minute, right? Like half the country's voting for one, half the country's voting for the other.

• 1:02:12Tom Bilyeu?

  Yeah.

• 1:02:13Speaker 01

  Who are you as an AI company to basically censor like that? And so, look, the AI, the AI censorship, the AI censorship conflict is already underway. The war, the war, the information war around AI is already underway. The, by the way, the same people who were pushing so hard for social media censorship have now shifted their focus to AI censorship. By the way, a lot of the actual censors themselves who used to work at companies like Twitter now work for the AI companies. So there's been like a, a direct, you know, just, you know, lessons learned and now applying it at a larger scale. And so I think that, yeah, no, look, I think it's going to be a giant fight. I think it's just starting. I think it's, you know, maybe the most important, I think it's maybe the most important political fight of the next 30, 30 years.

• 1:02:50Tom Bilyeu?

  Tell me why.

• 1:02:51Speaker 01

  Well, because it, it, it, everything is downstream. Everything is downstream from being able to discuss and argue and be able to, you know, be able to communicate. And so if, if you can't have, if you cannot have open discussions about important topics, you can't get good answers.

• 1:03:06Tom Bilyeu?

  Let me give you an angle on this. I'm, I am pretty sure we will agree about this. The, the thing about AI censorship that scares me isn't just the, that person is a bad person and so I'm not going to tell you about them. It is that you can control the entire world through framing. Just how you frame something and everything has a frame. And when you have humans with a desire to convert the, or indoctrinate, rather than seek truth, then now, the only thing I can guarantee is, okay, the, the AI is responding

• 1:03:50Tom Bilyeu?

  to me from within a frame, they're using that to nudge my thinking in a direction and it becomes a form of mind control. And, and if you've ever seen, dear listener, if you've ever seen an incredible debater, I promise you, what you love about them is they can reject the frame and then put their own frame on it. And now they're arguing from a position of power. Most people can't do it. Most people don't even realize somebody just put them in a frame. And they don't realize how constraining that frame is. And that's what really freaks me out is, everything else felt more like it was out in the open. Like even when it was still Twitter and Twitter was being censored like crazy, everybody was like, bro, this is so obvious. Like, look, you post about this, poof, gone. I post about this, it's going to explode.

• 1:04:34Tom Bilyeu?

  So when the Twitter files came out, I don't think anybody was like, wait, what? Everyone was like, yeah, that's exactly how it felt. This will be a game of frame and really does come down to, it's hard for humans to determine what is true. We were talking earlier about, why is technology stalled out? The reason technology stalled out, in my humble opinion, is physics broke somewhere around, call it 50, 60 years ago, it just got hung up and it, we haven't been decoding the real world. That's truth. Now, once you're able to make contact with that ground level truth, new things are open to you. And so that's my big concern with AI is that we will not be getting informed by what is

• 1:05:18Tom Bilyeu?

  making contact with ground truth. We're going to be having the frame set, we're going to be taught as kids, as adults, as everybody, based on the frame that matches somebody's ideology. And that scares the life out of me.

• 1:05:31Speaker 01

  Yeah, it should. I agree with that. Of all the radical things that Elon is doing, maybe the most radical is that he's declared that his goal, and I've said, we're, we're investors in it with him, but his goal for XAI is what he calls maximally truth seeking. And if, if you've listened to him on this, what you know is, he actually means two different things by that. That, I mean, he means they're the same thing ultimately, but two, two different angles. One is maximum truth seeking in terms of actually understanding the universe. And so to your point, actually like learning more about physics. But he also means maximally truth seeking in terms of social and, and, and political affairs. And so being able to actually speak openly about, having the AI actually be fair and truth seeking when it comes to politics. And of course, that's, you know, that, that, that, like, that's, that is possibly the

• 1:06:13Speaker 01

  most radical thing anybody could do is build a legitimately truth seeking AI. And at least he has, you know, he's declared the determination to do that. So, you know, there, that, yeah, there's a version of the world where, you know, he succeeds and, you know, that becomes the new benchmark and, you know, and by the way, open source AI plays a big role here. Because people can field open source AI to do this without, you know, permission. And so there's a version of the world where AI becomes an ally in trying to understand ground truth and trying to enable the, all the actual discussions and debates that need to happen. And then there's a version of the world in which, yeah, it's a, it's a, it's a, it's a Orwellian thought control. You know, my, my line under this, 1984, the novel 1984 was not written to be an instruction manual, right? Like, that was not the goal, right? You know, it was supposed to be a dystopia and, you know, future that we were trying

• 1:06:58Speaker 01

  to avoid. And so the idea that the machines are telling us what to think and that they're, that they're slanted and biased by the people who build them, I, yeah, I, I find it to be completely unacceptable. But there is a, I mean, look, we have that today. Most of, most of the AIs in the world today are like that. And there is a very big danger. And by the way, those, and again, those companies, people always, people, the people who are the most upset about freedom of speech, they, I think justifiably aim, internet freedom of speech, they justifiably aim a lot of criticism at the, at the companies. And I think that is valid in many cases. But I would just also tell you, these companies are under intense pressure. And, you know, there's tons of activists that are very powerful, you know, that are basically bearing down on these companies all the time, but then also the government directly. And one of the things that has really kicked in in the last, you know, 10 years is governments,

• 1:07:42Speaker 01

  both here and in Europe and other places, you know, basically seeking to censor and control, even in ways that I, I think are just like obviously illegal by their own laws. And, you know, that, that pressure remains very strong. And I, I think if anything, that, that pressure probably is going to intensify. And so I, this for me is in the category of, yes, these are the right concerns. And then ultimately, this is a democratic, a lowercase d democratic question, which is, you know, do people care? And are people going to be willing to stand up for this? And I think that's what's required.

• 1:08:11Tom Bilyeu?

  Why do so many people in society want censorship right now?

• 1:08:17Speaker 01

  Well, they want censorship if it's on their, you know, they want censorship if it's on their side, right? So, you know, so my, you know, my version of this is so when I, when I, you know, I told you I grew up in the, I wasn't really part of it, but I grew up in the middle of the sort of great evangelical awakening in the, in the seventies and eighties. And at that time, the sort of Christian conservatives in the U.S. were the, you know, the, the forces for censorship, right? And so the, the classic thing was it would be like religious groups that would try to censor movies or books. Um, and then it was, you know, it was the coastal liberals who would be arguing in favor of free speech, right? And so it would be the, you know, famously like the press, the Pentagon Papers, they had all these stories about how great free speech was, and libraries were sacrosanct to have free speech, and they weren't going to censor things. Um, so the censorship, you know, pressure was coming from the right in that era. Um, and I, my analysis of that is that's because at that time, um, the right was culturally ascendant.

• 1:09:01Speaker 01

  You know, American society was much more overtly religious at that time, and the Christian conservatives were very, very powerful from a cultural standpoint. Um, and like they got to like write the textbooks and all these things. Um, and so because they're, because they were winning culturally, they wanted to lock down speech so that they would continue to win. And, and the left was the counterculture, right? Classically, the left, the hippies, you know, the sixties, seventies, eighties, the left was the counterculture, right? Um, and the press and so forth was the counterculture, and they wanted to challenge the dominant, the dominant frame, right? And they wanted to disrupt the system, right? And so they were pro free speech. And then, you know, 30 years later, it's inverted. Um, where, you know, the left owns the universities, they own the book publishers, they own the media, they own the press, they own the newspapers,

• 1:09:42Speaker 01

  they own most of the TV stations, you know, they own the internet companies, they own the, you know, they, you know, they, they own the sort of these commanding heights of, of society and culture. Um, and so now that they, they won, and now that they're in charge, um, you know, they want to lock down discourse. And then the right has become, it's inverted, the right has now become the counterculture. And so, you know, the censorship pressure comes to the left, and then the right wants to open things back up. If the right becomes culturally ascendant again, I would expect that polarity to shift. Once again, right, it'll, it'll flip, right? Whoever's in charge will not want free speech, and whoever's the rebel will want free speech. The principled position is I want free speech regardless. It's just very few people sign up for the principle because most people are part of the tribe. But yeah, I'm, I'm, as I say, I'm an old fashioned Gen X libertarian, like I, I actually believe in the principle.

• 1:10:28Tom Bilyeu?

  Yeah, no, me too. For me, it, free speech is important because I, um, part of thinking is speaking out loud, having your ideas challenged. Uh, also, um, facts have a half-life. And so all the things that we believe, um, man, a lot of them, call it 30, 40 years down the road, we don't believe them anymore. We've realized we had an approximation of the truth, but not the real truth. The example I always use on people is Newtonian physics versus relativity. It's like, hey, when we had Newtonian physics, we thought everything worked. Uh, we thought we understood it, and then we get to relativity and up. Actually, you couldn't have had GPS with Newtonian physics. So this was an update that was absolutely necessary.

• 1:11:11Tom Bilyeu?

  And, uh, as we mentioned earlier, we still aren't at ground truth. So we know that we're going to be revising that even further. And if you really internalize, every time we get closer to ground truth, it unlocks things for us. Then it's like, okay, I just want my ideas to be challenged. And so I'll, because I, um, teach young entrepreneurs a lot, I'm like, look, you've got to recognize that skills have utility. And so the reason you want your idea challenged is you can actually develop a better skill. Once you realize, oh, I was wrong about X, Y, Z thing, I can now be right. And that actually has utility in the real world, lets me do something I couldn't do previously. And so when you lock that down, now all of a sudden people get stuck. You get stuck because you're not able to, um, have the best arguments thrown at your own idea.

• 1:11:56Tom Bilyeu?

  It's, uh, that, that one is, is pretty traumatic to me. Now, speaking from a position of utility, Elon, uh, is somebody that has really demonstrated an obscene ability to get things done. You have bet on a lot of entrepreneurs in your career. You've obviously been very good at picking the best of the best. What, what is it that Elon does, either in worldview or action, that makes him so effective?

• 1:12:26Speaker 01

  Yeah, this is, in my mind, this is the single biggest question. I'm, I'm really glad you asked it because it's the single biggest question in the world right now. Like, it's the single biggest question in my world, right? Which is like, okay, how is it that he does what he does? Um, and I would say like, I don't, you know, there are people who have worked with him for a lot longer who probably understand this better. But I've had, you know, an up, up close kind of look at it for the last, for the last several years now and have come to really, I think, really respect it, and I think understand at least parts of it. Um,

• 1:12:51Speaker 01

  you know, look, it's the, a lot of it, um, uh, there was that famous text exchange. And actually, he's a friend of mine, a wonderful guy, Parag, um, who was running Twitter at the time when Elon first kind of tangled with it. Um, and, um, uh, and, um, he's a, Parag's a wonderful guy. And he had literally just become CEO like a month earlier or something. And so he was just putting his plans in place when kind of everything, you know, the hurricane hit. But, um, you know, there was a, a, a exchange where Parag is talking about whatever. And it's the famous text exchange where Elon's like, all right, fuck it, I'm not having this conversation anymore. And then he's like, he said, you know, what have you gotten done this week? Right? And, and what I realized when I read that was like, that, that is the Elon method. Like, the, the Elon method boiled all the way down is what have you gotten done this week? Right? And, and, and that's very important because at anybody who has ever been at a large company trying to do anything big,

• 1:13:35Speaker 01

  it, the, the big things happen over the course of years, you know, decades, years, months. Things don't happen in weeks, like, you know, companies have like five-year plans, right? Uh, they've like, you know, cars take like seven years to design, right? Like rockets take like a decade, uh, fighter jets take like 25 years. Big software systems take five, 10 years. Um, you know, any large scale effort anywhere in the economy, we've just all gotten used to this idea that things just take years and years and years. And then you've got like processes and procedures and plans and this, you know, documentation and, you know, rules and structure and strategies and like frameworks and PowerPoint presentations coming out of your ears. You know, Amazon's big breakthrough was to go from, yeah, Amazon's big breakthrough is just go from having PowerPoint presentations

• 1:14:20Speaker 01

  to having like 15-page written documents that everybody reads at the start of a meeting, which actually is an improvement off of a PowerPoint presentation. But like, you know, there was that. Elon's like, no, I'm not doing any of that. Like, I'm not doing any of that, we're not doing any of that. Um, yeah, basically it's, we're going to like staff these companies almost entirely with engineers. Um, I myself, I myself, Elon, am an engineer. Um, I am going to understand every aspect of every technical system that we're working on. I am going to be able to be in all the meetings on everything from rocket design to database design at Twitter and everything else. Um, I'm going to only talk to the engineers if I can, you know, have, you know, possibly avoid it. I'm never going to talk to anybody who's not an engineer. I'm going to talk, I'm going to go, I'm going to talk to the person who's directly relevant to the project. I'm not going through layers. I'm going all the way down to the company to just talk to the person who's in charge of this thing.

• 1:15:02Speaker 01

  Um, and then basically what he does is he goes to each of his companies each week. He identifies whatever is the bottleneck at that company this week, and then he works with the engineers and he fixes it that week. And so, and so what happens is his companies move so much faster than everybody else's. Like, it's just like, it's, it's, it's, it's like, it's like tortoise and rabbit. Like, they, they just move so much faster, they're so much leaner. They don't have all these layers. Um, they don't have all these like systems and controls and processes and all this stuff. Um, and, but what they have is like many of the best engineers in the world who just absolutely love working with a CEO, who understands the substance of what great, of what the product is, and then is willing to actually work with them hands-on. I mean, I've been in meetings with him at, at X where, you know, he's in there with like, you know, 24-year-old engineers,

• 1:15:46Speaker 01

  and they're just like, they'll just like walk through fire for him. Right? Because he's, he's like their idol, and he's able to have a peer conversation with them, and he cares about the work that they're doing. And if they succeed at it, he is going to love them for it. And if they fail at it, he's going to be very disappointed in them. And it's just a completely different relationship than the CEO of one of these big tech companies has. It's just completely different. Um, he, he does a, um, I was in, I was, I went to see him one night when he took over, uh, took over X, and I was sitting in the, sitting in the conference room. So, okay, so it's like 10 o'clock, it's a classic Elon story, so it's 10 o'clock at night. Um, and he's like, yeah, meet me at, at, at Twitter at 10 o'clock at night. I'm like, fine. So I drive up and I go in and, um, and, uh, I go to the conference room and it's Elon on his, it's Elon on his iPhone, uh, doing email, and there's a dog on the floor.

• 1:16:29Speaker 01

  And I'm like, oh, and I, you know, in retrospect, I was just like, oh, you know, is that your dog? And, and he, and he looks at me completely deadpan, he's like, I've never seen that dog before in my life.

• 1:16:39Speaker 01

  And I'm like, what is it? Just like the company dog, you know, he bursts out laughing because of course it's his dog. Um, and then he's like, all right, you know, I want to talk, but he's like, I, you know, I, I, you know, I need 15 minutes, you know? And he's like, by the way, you can sit and hang out if you want, I just have to take a call. Um, and he gets on Zoom and he's on Zoom with the rocket engineers for the Falcon rocket, the next generation rocket in, uh, in, in Texas. And it's whatever, I don't know, 12 o'clock their time, midnight their time. And it's just him on his iPhone on a Zoom call, um, you know, designing the next rocket. You know, which is like probably the rocket that we just, that we just saw work, right? Um, and he's like fully conversant in the, in, you know, completely conversant in that. And he, he and the engineers fix whatever the problem is that week with the rocket. And he's like, all right, now we're going to go fix the, you know, the database, you know, here at Twitter. Um, and, and so he, it's just like rinse and repeat, rinse and repeat, rinse and repeat, do that every single week.

• 1:17:25Speaker 01

  Um, I, I once offered him, I once offered him a place where I thought he might want to take, you know, I was like, I know you're under a lot of pressure, go, go to this place for a week if you want, because he famously doesn't own any, he, he sold all his houses, he doesn't own any houses, so he stays at friends' houses. So I was like, you can go use my house for a week. And he, if you need a vacation, you go use my house for a week. I got back five minutes later, one line, I don't take vacations.

• 1:17:48Speaker 01

  I'm gonna frame and bronze that email, right? Um, and so this is what he does, and he just does this at like an incredible hair rate of speed. He doesn't tolerate anything that stands in the way of it. This, and this, by the way, this is the same thing that drives everybody crazy, right? And so this was the whole thing on the, you know, this is this whole thing he's in this, you know, big fight with, with regulators on like Starship launches, which is like, you know, a normal rocket company would take whatever, you know, a decade or 20 years to design a new rocket, you know, he's, he's gonna put out the prototype as fast as he can, he's gonna launch it and see what happens. You know, he's gonna, it's gonna explode in midair. There's, there's my, my nine-year-old and I love watching the SpaceX rocket explosion compilation videos on YouTube. They're hysterical because they just show these larger and larger and larger rockets launching and exploding in midair. And his competitors, all the way SpaceX, all the way SpaceX was on its way up, his competitors

• 1:18:33Speaker 01

  are like, he's crazy, he can't make rockets work, see, they're all exploding. And what he was doing was he was iterating on the rocket design so much faster than they were. And so he would run through five rocket generations, of which four would fail, but he would learn so much that the fifth one would work, and he would go through the five generations faster than his rocket competitors could do one generation. And he's just like, he's just like, fuck it, I don't care. Like, of course some rockets are gonna explode, nobody's gonna get hurt, it's totally fine. You know, but a big company can't tolerate that because it's like headline news, everybody's gonna get mad. And so anyway, it's just like this completely, it's a base level reality, it's, he calls it first principles, you just, you get straight to base level reality, you get straight to substance, you spend no time on anything other than substance. And so, so anyway, like if, if, if you, if, you know, like me, if you're an engineer and you kind of see this, you know, I'm an engineer by training, and so if you kind

• 1:19:17Speaker 01

  of see this, you're like, oh my God, this is like obviously the way that everything should be run. But if you see it from the outside, it just looks so wild compared to all of these other large systems and rules that we've all gotten used to. And, and, and, and therein lies the conflict.

• 1:19:33Tom Bilyeu?

  What do you, so there's a lot of engineers in the world and none of them are having the kind of success that Elon is having. How much credit do you give to the, the bundle of traits that he must have? You've already talked about several of them, just getting to first principles, thinking, moving very quickly. But there's also something that seems, I don't know, never met him, but by things that I have read, one of the early biographies, there's just a level of, this is not emotional for me at all. It's the, your assistant asks for, this was in the original, one of the original biographies on him, assistant asks for higher pay or something, he's like, take a vacation for four weeks, I'm gonna do your job and see how hard it is. If it's hard, cool, I'll give you a raise, and if it's not, you're gone.

• 1:20:17Tom Bilyeu?

  And she'd been with him for like 15 years or something crazy, and she comes back and he's like, yeah, it wasn't that hard, bye. And people were gobsmacked by that. And I was like, yeah, I get it, I get it. How much, is there something to that? Like, is sort of, you know, if that were your friend and your friend treated you like that, it would not feel good. But in terms of proportion of his success, his ability to just completely divorce emotion and just say, this is either right or wrong for the project?

• 1:20:49Speaker 01

  Yeah, look, I think there's a lot to that. Um, you know, um, by the way, I think Steve Jobs had a lot of that. It's just, it's, it's, you know, I mean, there's a lot of ways to look at it. Um, and you know, people can have lots of views on this, of course, but you know, I, substance, I was a dichotomy, substance versus style, um, or substance versus social, or you know, substance versus protocol. Like, it's so easy to slide into a way of thinking and being in which you are thinking abstractly about things, you are following, we talked about the goal, you're following rules that were established years ago. Is it most, most big companies, what, what most big companies are, you know, so our company started startups, and then basically what happens is, generally what happens is,

• 1:21:33Speaker 01

  as, they either fail or they succeed. If they fail, they go away. If they succeed, what happens is they succeed by going through basically scandal after scandal, you know, crisis after crisis after crisis. I always, I always describe it as like a process of like falling upstairs. You're just like constantly falling and smashing your face into the stairs, but like you're gaining altitude as you go, and it's just like, these companies are just constant internal crisis. Uh, and, and, and, and the sort of normal response, and by the way, it's the thing that everybody in business is trained to do, it's what they train you to do at Harvard Business School, and Stanford Business School, and all the books that they, all the books and all this stuff, all the CEO coaches, it's like, oh, that, you know, you go through a crisis, you fix the crisis, and then you put in place a set of rules to make sure that crisis never happens again. Right, it's like the law, the legal thing we were talking about, it's like, okay, that, that by itself would be fine. But you do that 20 times over 20 years, and you have buried a company in bureaucracy.

• 1:22:19Speaker 01

  To the point where it just basically, it's, it's, right, at that point, it's, it's a company primarily that exists to follow rules. By the way, rules that were in many cases defined by people who aren't even there at the company anymore, and so nobody at the company today actually even understands why they were there. Toby Lukey has a version of this, the guy who runs Shopify, who's an amazing CEO, he has a version of this, which is it's like every whatever year or something, or every six months, he just can't, he requires all standing meetings to be canceled, taken off people's calendars. And so all management reviews, one-on-ones, planning meetings, like everything just gets taken off. And then he says, we only put the meetings back on where people are howling in pain. Because we don't have them, right? But, but you have to do, but his point, and you have to do that over and over and over again, because if you don't, everybody's calendar just accretes meetings, and then everybody's sitting in meetings all day long and nobody's doing anything, right?

• 1:23:04Speaker 01

  And of course, anybody listening to this who works at a big company knows exactly what I'm talking about, because that's the day-to-day life, which is, oh my God. You know, I, I, I worked at IBM, I worked on the other, I've seen the other side of this, so my first real professional experience was I was an intern at IBM in 1989 and 1990, when they were on top of the world, they, and as late as 1985, IBM was 80% of the market capitalization of the entire tech industry. They were, they were, they were a giant, they were like, you know, Fang combined into one company, they were like totally dominant. I was there at 1989, 90, right before they basically fell off a cliff and, and caved in. And so, and so it had been 70 years of success, no, they had never had a layoff. Everybody, wait, lifetime employment. There were entire buildings full of people there who did not have actual jobs, because you couldn't actually fire people.

• 1:23:47Tom Bilyeu?

  Oh, God.

• 1:23:48Speaker 01

  Oh, let me tell the story. So I got at IBM, and my manager's kind of showing me around, and you know, so I'm in this giant division in Austin, building these sort of, at the time were called workstations, these supercomputers, basically. Uh, and he's like, yeah, he's like, look, here's how it works, he's like, we, we're the development, we're development, and we have the development building, and we have like 6,000 people doing development of the product. Um, and then, and then they have what it's called, they call marketing, but everybody else calls sales, which is the, the people who go sell the product. And then he's like, and then that building over there is, is the planning department. Um, uh, and I was like, oh, I get it, you know, in development, we come up with ideas, and then we work at the planning department to have the plans to be able to do, and he's like, no, we never talk to them. We will never visit that building, because that's the department that we assign people to when we can't fire them. Right, and so, right, by the way, this is how, of course, public school systems work,

• 1:24:32Speaker 01

  you know, the, the public, New York Public School System famously has, I think, what they call the rubber room, which is, it's, it's, it's, it's the place they send the teachers who are so terrible, they can't put them in a classroom, but they can't fire them, and so they just have them sit, and they do crossword puzzles all day. Right, it's the longshoremen who are sitting at home, right? So, so anyway, so big companies develop their, their own version of this. Um, and it just, and, and, and, and it accretes. Um, but by the time I got to IBM, two things, number one, I, there was an app that they had that showed me the number of reporting, the number of manager layers to be, get to be the CEO. So if I'd stayed at IBM and I wanted to become the CEO, how many layers would I have to climb? And I was 12 layers below the CEO. Right? Which meant that my boss's boss's boss's boss's boss, who was like the big cheese, was still six layers down.

• 1:25:17Tom Bilyeu?

  Wow.

• 1:25:18Speaker 01

  So, so there was that, but the other part of it was they had a formal process of decision-making they called concurrence. Um, and concurrence was, if you're gonna make a decision, IBM in those days, you had to make a formal list of every person in the company who was gonna be affected by the decision, like every manager, every function. And for any sort of product-related decision, that was like 35 names on the checklist, and it was like, you know, the sales heads of all the different regions and all, all, all this stuff. And, and, and to make that, to be able to get to a yes on the decision, you had to get concurrence from every single person on that list. Any one person on that list could say, the term, I, a, a, was it deconcur, I deconcur, was the internal term, and deconcur meant veto. And so you needed 35 people to agree, and any one person could veto a decision. Right, and so, so, so decision-making just simply stopped.

• 1:26:02Speaker 01

  And this is why the company fell apart, is because they couldn't make, they couldn't adapt, because they couldn't make decisions. Right, they, they literally couldn't act, and, and they had 440,000 employees.

• 1:26:10Tom Bilyeu?

  Oh, my God.

• 1:26:12Speaker 01

  On a, so on a, on a, on a, on a, on a time-adjusted basis for the growth of the market, it's, it was like equivalent of today would be a million or a million to employees, something like that. So it's like a nation-state, by the way, this is the other thing, is at IBM in those days, at IBM in those days, you could be, you could work there for years, and you could never, you could, you could work there for years, and you would never meet anybody either at work or in your social life who didn't work for IBM. Right, because it was so big, right? And so all of your friends, so everybody worked in the same company. The, the metric, the thing I always look at when I visit big companies is, I always look for the signs, um, the signs in the parking area and the signs in the buildings. Um, because everybody who works at the company knows where everything is, and so they don't rely on signs. And so when you go to a big company and there's no signs for what the buildings do, it's

• 1:26:57Speaker 01

  a sure sign that they're losing touch with the market, because it means they don't get visitors.

• 1:27:01Tom Bilyeu?

  Interesting.

• 1:27:02Speaker 01

  Right, because they're completely insular. Um, right, and, and so anyway, so this is the natural trajectory for all these companies is to end up in this state. And, and, and, and that's, and that's the polar opposite of the Elon method, like the, those, that, that's the barbell. Now, to your point, with your example on the assistant, like, what, so the big question is why aren't there more Elons, and how do you make more Elons? The second question is, can you have a part of an, can you have a partial Elon? And so, so one of, one of the ways I described this is, is there a unit of metric which is milli-Elons? Right, um, you know, like millimeters, right? Um, so could you have like 900 milli-Elons? Like, could you have 90% of Elon? But maybe not 100%?

• 1:27:44Speaker 01

  Or could you have the 50% version, or the 10% version, or maybe just the one milli-Elon, right? Maybe somebody who's just a little bit more like that? Right, it's, it's your question, like, do you need the whole package? Or can people learn these techniques and be this way even if they're not Elon, even if they don't have his natural capacities, and even if they're not willing to go all the way to where he goes? Can they go partway there? And I actually think that's an open question today. I, and, and there, there, I would say there are shockingly few CEOs I know who are even asking that question or trying to figure it out.

• 1:28:13Speaker 01

  Now, in theory, in theory, in theory, like, if you've got one, in theory, you should be able to have a thousand. There's a lot of smart people in the world, like, and so this, so here's the other example is what would it do for our civilization if we had a thousand of them?

• 1:28:26Tom Bilyeu?

  Yeah, I mean, at the rate that he's producing now, a lot, a lot.

• 1:28:32Speaker 01

  And what would, what would happen in our civilization if every single industry had an Elon?

• 1:28:37Speaker 01

  Right? And so like, you know,

• 1:28:38Tom Bilyeu?

  It's legitimately insane.

• 1:28:40Speaker 01

  Yeah. So that, that possibility exists, like, you, you can see it, right? Um, you know, so it like, I find that very, I find that very exciting, very optimistic. I don't know if it'll go, but I think that's one of the really big questions in front of us right now.

• 1:28:56Tom Bilyeu?

  Yeah, no doubt. Be interesting to see if anybody can pull those principles out in a way that's metabolizable by other entrepreneurs. The economy, did we just dodge a recession? Uh, does debt make the recession inevitable? And we just kick the can a little bit down the road. What's your health check on the economy right now?

• 1:29:15Speaker 01

  Yeah. So the way I think, okay, so let me give you a couple of things on this. Um, so number one, I differentiate between the United States and America. I think they're two different concepts.

• 1:29:25Tom Bilyeu?

  Say more.

• 1:29:26Speaker 01

  Um, I think the United States is the system. It's the formal governance system. So it's the government and all the stuff we've been talking about. It's all the rules and all the processes and all the procedures. And we all complain about, you know, we all have our various complaints about it and, you know, whoever we are in the political spectrum, we've got all kinds of complaints about the government. Um, but then there's America and for me, America is the people.

• 1:29:46Speaker 01

  Right? Um, and, and, you know, they're, they're part and parcel of the government and the people are kind of part and parcel of a country, but like they, they are different. They're not, they're not the same thing. Um, and, you know, we happen to be a very large country with a very large number of very smart, talented, you know, driven, capable people. Um, and then I, you know, I'd also say my, my, my mental model of America is like, we're just like a giant sprawling mess. Like, you know, we're just, you know, we're just like chaos, like, and we have been, you know, for our entire 250 year existence, like we're the place people come. When they're just like too ornery to start out where they were, you know, they just can't tolerate it. And so we, you know, we get the most disagreeable people from all over the world who come here because they get to, you know, they get to basically be wild. They get to do things that they wouldn't normally get to, you know, get to do. And I, of course I benefit from that because, you know, that's we get all the, we, we get so many of the good founders from all over the world who come here to do it.

• 1:30:27Speaker 01

  Cause they don't think they can do it in the countries where they grew up. Um, and so we're, we're, we are, America is a country of like tremendously talented, driven, capable, ambitious people. From all, by the way, from all over the world who have aggregated here and their descendants over many generations. And, you know, we've just, we've selected ourselves into the best, we've dealt the best possible hand in terms of the quality of our people. Like, you know, it's just extraordinary what this country is capable of. And, and then most of what the country does is not done by the United States. It's not by, by the government. Most of it's done by the people. Most of it's done by, by America. Um, and, you know, and, you know, the, it's the old line of the business of America is business, um, which is this, this, uh, this, this old line from the fifties. It's just like, most of what most people do every day is they go to work and they try to, they try to do things, you know, they try to do things. They try to contribute.

• 1:31:11Speaker 01

  They try to take care of their family. They try to, you know, build their companies. Um, they try to do a good job, you know, they try to build good products. Um, they try to take care of customers. And so, um, you know, most of what people do every day is actually really productive and, and, and really helpful. And then we're just the best ranked by that. We're just the best, we're the best country, like we're, we have the best combination, you know, we have this sort of, we have this sort of rule of law of like an advanced society. Um, but we have less rules than like the European countries, for example. Um, and then we have like all the energy of a new country. Um, right? Um, because of all immigration and because of all the talented people that we have. And so we're, you know, we're, we're kind of the, we're kind of at the sweet spot of sort of a combination, you know, big country, small country, old country, new country.

• 1:31:52Speaker 01

  Like, we're kind of in that, we're kind of in that sweet spot. And so I, I go through that to just say like, America wants to grow. Right? The, the America, the country, the people, we want to grow, we want to succeed, we want to build great things. We want to build businesses. We want to, we want to have economic growth. We want to have, you know, we want to, we want to just like shock the world with all these amazing inventions. Like we, we, we want to do all these things. We are held back in all kinds of ways by the United States, but America wants to do that. And so basically if the government isn't too much on our throats, the economy will naturally just grow forever. It'll, it'll, it'll just grow in perpetuity and America will remain the best bet, you know, globally, it'll just be the, you know, it's the best, it will remain the best market to invest in. It'll remain, it'll produce the best, you know, the, the largest number of high quality new companies and so forth.

• 1:32:36Speaker 01

  Um, and so the, the American, the American economy wants to grow and that, and that's what's happened, which is, you know, we came out of COVID. And if you just like plot a chart of, you know, American economic growth versus, you know, Europe and other countries, it's just, you know, there we are, we're off to the races. And, you know, Germany is like, you know, starting to shrink, you know, and, you know, the, you know, UK stacking, a bunch of other countries like have severe problems. They're not able to reignite growth. The new UK labor government just had, the, the labor government just had a growth conference this week because it's now hit such a crisis point in the UK. They don't know how to get economic growth. And so, yeah, our economy wants to grow. It wants to, it wants to do fine. Yeah, we probably did, we probably did dodge a recession. And that's just because the productive energies of the American people just, you know, kicked in. Um, you know, it's, it's, it's all completely unpredictable from, from here, but like, you know, fundamentally I feel really good about, I feel really good about America.

• 1:33:21Speaker 01

  I feel really good about the, the, the people and I feel really good about the engine that we have.

• 1:33:25Tom Bilyeu?

  I believe that, uh, I forget who said it. I actually think you know, because I've heard you talk about this, but inside of all of us is a God shaped hole. And that hole right now, I think is having a resurgence of people really trying to re-embrace religion. Uh, from an interesting angle that's probably outside of, of today's purview, what we're going to talk about, but, uh, they have a need to fill that. And you're going to get the question of the soul. So what's going to happen is you're going to get somebody like me who doesn't have kids. And I'm going to raise an AI child that is embodied because why not? I can rush through the terrible twos. Uh, I can pause when they're seven years old for a couple of years and just enjoy that, whatever I can. If I want to go to a movie with my wife, I can literally put them in the kitchen and shut them down. Like, it's just all of the upside and none of the downside.

• 1:34:10Tom Bilyeu?

  And then all of the sudden, other people can be like, yeah, that's dope. And people are either going to be in relationships with robots, uh, romantically, or they're going to be in a romantic relationship with a human, but they're going to raise AI kids. And you will literally, at least for pockets, because there will be like the Amish or whatever, there'll be the sort of super producers who keep their fertility high because cultural value says yes. There will be some that won't. And so those cultures will hit an existential crisis based on that, which I think will cause the religious element to really push. And say, you know, this is an abomination before God and we just absolutely cannot do it. So that's where I feel like, huh, there's going to be this weird tension.

• 1:34:54Tom Bilyeu?

  And then if people are getting augmented with Neuralink, and obviously I'm talking, these are 20 year time horizons, maybe 30, maybe 50. But this is going to play out for somebody in the not too distant future in my estimation. And just to put one more thing in the mix, you know, very well, that in back room conversations in the government, people are asking questions. Should we be prepared to do airstrikes on data centers because we are so worried about AI breaking free? So there's already this ambient anxiety about it. You've got me talking like a sci-fi writer, but it's, it's a pretty plausible scenario.

• 1:35:33Tom Bilyeu?

  How, how do we stop that from happening or what is the automatic in the human mind kill switch that will stop that from happening?

• 1:35:43Speaker 01

  So to start by saying, there's a lot in there and I would love to talk about every part of it. Um, and by the way, we should go as deep, as deep as you want with me anyway, on, on the, on the religion stuff and so forth. Cause I, I, I agree with a lot of the, I agree with a lot of the setup to the, to the question. Um, so let's see how to come at this. So, well, look, to start with, I would say we have a crisis of meaning already, right? Um, and so you talk about like pop, you know, it's talking about fertility, right? And, you know, Elon's been talking about this a lot lately, but like fertility rates are crashing all over the world. Right? And it's actually really striking what's happening, right? Which is it's happening across cultures, right? Um, and so normally, normally when there's like something happening in, you know, America or whatever, Europe or Japan or something like you, you generally analyze and you're like, okay, what's happening in American culture that's causing this? Or what's happening in Japanese culture that causes this? But like, it's, it's happening in all those cultures simultaneously.

• 1:36:26Speaker 01

  Is a population's growth is crashing here. It's crashing in Europe. It's crashing in Korea. It's crashing in Japan. It's crashing in China. And by the way, like, you know, China, Japan and Korea have very different cultures than we do, and they have very different cultures between each other. Like they're, they're really different. Like the Japanese and Koreans are like really different. Um, and yet it's happening in, in, in all these sort of advanced societies. And so I guess I would say it's like we, that's sort of a pre-existing condition. Um, you know, we, we just have that. Um, and so that, and that's sort of a fundamental, you know, fundamental question. We have this, you know, this question of meaning, um, right? Which, you know, the God shaped hole, which is, you know, a process that kicked off, you know, probably, you know, basically like 150 years ago that, you know, has been, has been playing out. And, you know, people have been grappling with that for a long time. And, you know, as, as you know, we've been through various phases of religious revivals, you know, boom, boom, bus cycles with religions over the last, over the last hundred years.

• 1:37:11Speaker 01

  When I, when I was growing up in the Midwest in the seventies and eighties during the, one of the great awakenings, so the, you know, sort of comeback of evangelical Christianity and, you know, kind of born, the born again, you know, kind of phenomenon. So I've,

• 1:37:21Tom Bilyeu?

  I remember it well.

• 1:37:22Speaker 01

  You know, I've seen, I've seen that happen. Um, yeah. So like, you know, I think that that's all true. That's all super important. Um, you know, and then look like, you know, tech is, you know, tech obviously changes culture, uh, culture, by the way, culture changes tech. It's a, you know, it's a positive, uh, feedback loop, different cultures, you know, react to tech in different ways. Let's see where to take it. Um, I think the counter argument, you know, maybe the leash to put on it, uh, I guess maybe I should start with, if you don't mind me asking, do you have kids yet?

• 1:37:49Tom Bilyeu?

  I don't know.

• 1:37:50Speaker 01

  Yeah. So one of the things, um, that I've, I was gonna say, one of the things I find in my conversations with my friends who, who don't have kids and then have kids that, that I went through. Um, uh, and it's a little bit, it's almost like a little bit, I have these conversations with my, with my friends, you know, I'm, I work in tech and a lot of people don't have kids or they wait for a long time. Um, and I have this conversation where it's like the people with kids sound like pod people. Um, you know, they, they, they sound like they got the brain fungus in, uh, you know, the, in the last of us or something, right? It's, it's like, oh, you don't understand. When you have a kid, everything changes. Right? And, and my like friends are like, you know, like what, what happened to you? Like what's wrong? It's, you know, you sound like you're in a cult. And I'm like, no, no, you don't. And, and it's literally like, that was me before I had my first kid. Right? It was like, oh, I, I just whatever, like I want to live my life. I don't know whether I want this additional responsibility.

• 1:38:34Speaker 01

  But like, basically I, I think this is true. It's almost a universal thing. If you talk to parents, like when you have your first kid and you look in the kid's eyes for the first time. And, you know, literally what you see, like, you know, look in the best case scenario, you know, you've, you, you know, we've got a blend, you know, literally a blending of DNA. Um, and, you know, the person, you know, you love most in the world, you know, is combined with you. And then, you know, that, you know, the baby shows up with these eyes and the eyes look back at you and it's like looking at yourself. And it's like looking at the person you love the most in the world. And it's like looking at this new soul all at the same time. And like, it's like a, it's like a, it is, it's like a psychological reset. Um, and so that's just, that's like such a, it's, it's, it seems so universal that parents understand that and non-parents don't.

• 1:39:16Speaker 01

  Right. In fact, I have friends who are like, I don't know that I want to have kids because it sounds like it changes your psychology so much. Like, I'm worried it's gonna ruin everything I like about my life today. And I'm like, no, no, it makes everything better. And they're like, but you have to spend all your time with a kid. And I'm like, yes, but it's the thing I want to do most in the world. My friends are like, well, that's not what I want because I want to work all the time. And I'm like, you're missing out. And it's like, you're, you know, you're brainwashed. And right. So, so that's like, uh, you know, that's a thing. Um, I mean, look, I don't, I, I, I fully believe people are gonna have AI pets, AI friends, they're gonna have AI, like, all kinds of relationships, AIs, they'll have some form of proxy children. I totally buy that. By the way, that will probably be based on their information. One of the things I think, like, for example, your, your, your, your AI, you know, kid is probably gonna be a version of you, basically, trained on, on, on your own training data. Right?

• 1:39:58Tom Bilyeu?

  That's terrifying, but yeah.

• 1:40:00Speaker 01

  Well, so the concept, actually, that's, that's starting to take off in the tech world right now is what's called the digital twin. So it's not, it's not the digital kid, it's digital twin. But the idea is, you know, look, like, for example, I might, I haven't done this yet, but I might do this, which is like, I'm not available 24/7. But if I feed a language model, like, everything I've ever written and everything I've ever said, then maybe if, like, somebody we work with has, wants to ask me a question, and it's the middle of the night, they can ask my digital twin, and they'll get back a representative answer to what I would say. Right? And so like, that, that's starting to happen. So yeah, like, I think a lot of that stuff's gonna happen. But the primal relationship that you have with another human being, and that could be another human being you're related to, or by the way, just another human being that you're not related to, like, that, there's a level, I mean, we are very, very, very deeply wired to have those relationships be the center of our

• 1:40:43Speaker 01

  universe. And again, like I said, like, there's a big issue here, which is people aren't having kids. And so, you know, that's not getting transmitted. And there's very big questions that kind of come, you know, kind of, kind of flow out of that. But it's, it's just different. Like, it, it, it's just flat out different. When you have your first kid, and certainly, you should have, you, you, you should have like a dozen kids. They'd be great. I'm pretty sure, like, if we tape, if we tape a show after that, like, two years later, you're gonna be like, oh, yeah, I don't know what I was thinking. Like, this is just so different. And, and maybe I could-

• 1:41:14Tom Bilyeu?

  Do you think that's the kill switch?

• 1:41:16Speaker 01

  Well, let me broaden out, let me broaden out the answer, which is fundamentally, technology, AI, all this, like, it has implications on lots of things, for sure. But one of the things that it does is it makes us, it makes us richer. Like, it makes our society richer, it makes, it makes our material comfort a lot better. Makes it a lot easier, by the way, to provide for kids and family, be able to have a higher level of material welfare. There's this line of critique of new technology, which is like, well, material welfare is not sufficient because it still leaves this god-shaped hole. But the way I think about it is, at higher levels of material comfort, we have a better shot at figuring out the answer to the god-shaped hole. Like, would we, if you're gonna be confronted with existential questions about religion and philosophy and how to live your life, would you rather do that with material deprivation, or with material plenty?

• 1:42:00Speaker 01

  And it's really easy for people to say that they would prefer to, you know, it's like, you know, would you rather be a monk with a straw mat on the floor, right, eating bread and water, trying to figure out the meaning of life? Or would you rather be you, with like, a nice, like, fluffy bed, and like, air conditioning, and like, you know, artisanal, you know, cheese, you know, from Whole Foods? Like, like-

• 1:42:20Tom Bilyeu?

  I love that that's the one you pick.

• 1:42:22Speaker 01

  You'd much rather be you. Like, of course, like, I'm gonna have a much better chance at figuring out the important questions in life, if I'm not worried about where my next meal comes from, if I'm not worried whether the power's gonna go out, if I'm not worried that it's gonna, I'm gonna freeze to death overnight, if I'm not worried that my kid's not gonna have access to a needle, nail incubator, that I have to worry about where my, you know, income's coming from. Like, of course, with material plenty, I'm gonna have a lot more capacity to answer the deep questions. And so I think that's, that's the, gonna be the unanticipated payoff, which is, as technology and as AI makes the world materially better off, I believe it increases our ability to address these big questions, not, not decrease it.

• 1:42:58Tom Bilyeu?

  Yeah, so I'll agree with you there. But there's one division that I'm gonna make, which is, I'm, the reason that religion is so impactful is because it addresses every intellectual, every person on the intellectual spectrum. So when I went through a phase where I was trying to explain to people, hey, think like this, act like this, it'll make your life better, these ideas just radically changed me. And I found that largely because as people age, they're just not able to be as intellectually nimble. But you also run into the reality that some people do not have the intellectual horsepower. Whenever I talk about this, I want to remind people, it's entirely possible I fall below the line. I'm perfectly willing to accept that. But you have to understand

• 1:43:43Tom Bilyeu?

  that there are dumb people that cannot process some of these ideas. And so religion becomes this catch-all for, hey, this is how you live a good life. And it will speak to highly intelligent people, and it will speak to people who are just gonna follow the Ten Commandments. I mean, the Ten Commandments are basically the Bible's TLDR, right? So, it's like, hey, don't worry about reading that, just hear the 10 things, go do these 10 things, and you're gonna be fine. Done in a story format, and so it really speaks to people. So I don't think this sort of intellectual approach to, hey, this is why AI is gonna be great for you, and in the future, it's gonna solve all these problems. What's going to happen, as a punctuated moment, I think on a long enough timeline, this is all great, and it's wonderful, and it brings about an age of abundance. So, but I'm talking about the punctuated moment where people start losing their jobs, and they don't

• 1:44:27Tom Bilyeu?

  want to make the transition. People get the sort of warmth and comfort from religion, they're being drawn back into it. I don't know if the data will support this exact statement, but this feels accurate, that people are coming back into religion in sort of regionally, large numbers, like, higher numbers than region. I'm not saying ever in human history, but, you know, locally, time-wise. And so we've got this massive influx into religion right now. You've got this massive thing that's gonna disrupt all the things that religion is gonna talk about, taking care of people, the soul, a connection to God, the afterlife, all these things that AI and robotics

• 1:45:11Tom Bilyeu?

  are going to challenge. And now I think you have this collision of people that aren't able to navigate intellectually the nuance. It becomes problematic, and, and I think that is gonna have to be addressed. Now, let's take the super boring version of this, and it just plays out as regulatory capture. And the government's just like, nah, my constituents don't want it. It gets mired, it gets super bogged down. And now, everything gets caught up in red tape. And the thing that I can already feel happening now, where there's just so much regulation that it's hard to move forward at the rate we could say back when I was a kid, that gets exacerbated. That's my sort of mundane vision of how this plays out. But I don't see a world in which

• 1:45:53Tom Bilyeu?

  it just all happens in a sunny, rosy way. Do you?

• 1:46:02Speaker 01

  It's complicated. So, look, I'm a techno-optimist, not a techno-utopian. And so, like, I'll start by saying a couple of things, which I don't think technology, like, I don't think technology, like, answers all these questions. Right? And so I don't think technology, for that matter, economic growth, like, give answers to, answers to most people for meaning. Right? And so I don't think any of this is a substitute for religion. And so I, like, I, like, from that standpoint, I maybe have a little bit of humility, just on the, on the scope of the importance of, of what we do out here. So, and like I said, I think this, I think, you know, even in a world of technological abundance and economic abundance, material, you know, welfare, I think the, you know, the big questions of meaning are still, are still open questions. And so, like, I, you know, I will hesitate to make, make sweeping claims on that. Yeah, I guess I was just, maybe the other

• 1:46:45Speaker 01

  way to come at this, maybe the way to think about this is, I talk more about the religion side. So, my, my take on religion, like, I completely buy religious revivals, and I think we're actually in quite a religious time right now, which we should talk about, because, like, for example, like, politics have become a branch of religion. You know, we've, we've, you know, we've invented a whole series of secular religions in the last 150 years, and we continue to do that. And so the, the sort of form and shape of religions keeps playing out, even if they don't have, you know, you know, sort of supposedly supernatural kind of elements to them. And, you know, and I'm completely open to the idea of, like, like I said, I lived through a fundamentalist religious revival. I'm completely open to more of those. Those clearly are happening at various places in

• 1:47:25Speaker 01

  the world. You know, one of the, yeah, so I would certainly grant all that. That said, is, we do, like, we moderns and post-moderns, like, we don't relate to religion the way that people did back before our times. So, like, the further you go back in history, and for sure, this is, like, this was true, like, 150 years ago back, the relationship that people had with religion was different than they have it today. And I go to, go way down the rabbit hole in this, but basically, for, for most of recorded human history, religion was not an à la carte thing, it was something that was a very deep part of who you were as a person. And, and specifically,

• 1:48:09Speaker 01

  they had the concept, they had a concept of peoplehood. There was a people, and the people would have shared genetics, all be related to each other, the people would have shared culture, the people would have a shared place, right? You know, their, their own land. And then they would have, they would have religion. And those concepts were all conjoined. There's this great, it was a great book called The Ancient City, that goes through, basically, the prehistory of Western civilization. It goes through the, basically, what are called the old Indo-European religions and cultures, you know, that sort of ultimately resulted in the Greeks and the Romans, and then Christianity. So it's sort of, it goes all the way back to the beginning of, basically, like, how Western societies formed. And it's basically a three-part structure. It was family, it was tribe, and then it was city. And then these concepts of shared kinship, genetics, shared

• 1:48:53Speaker 01

  culture, shared religion, and shared geography were all conjoined. And if you told somebody in that era that, you know, oh, you can switch religions, they would have considered you completely insane. Because being of that religion with those gods was precisely tied to these other factors of culture, genetics, and place. Of course, in, in our society, we have completely disconnected those things. You know, if I, if I go out in public today, and I'm like, no, I'm a part of a peoplehood where I have shared genetics, culture, religion, and place, and I'm gonna have, you know, ethno-state for German, Dutch, you know, people in the Midwest, like, you know, obviously, I get instantly tagged as a white supremacist, and like, I get, you know, shunned and ostracized from society. By the way, I'm not proposing that, I don't want that, just for the

• 1:49:33Speaker 01

  record. Right? And so, we live in a different time. We have abstracted religion away from those other things. And, and, and kind of to your point, actually, as a consequence of that, we can now choose our own religion. Right? And as a, as a modern Westerner, you or I are completely free tomorrow to become a, you know, Catholic, or a Baptist, or Jewish, or Muslim, or whatever we want, or, by the way, to make up our own religions, and, by the way, proselytize and go try to get followers. And, you know, when we call those cults, and people do that all the time, and we, you know, I would argue, we live in a world of cults, and we've got all these new cults out here in California, and, you know, some of them are, by the way, super involved in AI, so like, it's a thing. So, but like, religion, religion has become an à la carte. It's like the old choose your own adventure books you might have had when you were a kid. Like, you can basically

• 1:50:15Speaker 01

  design the religion that you want. And so, the, on the one hand, you would say, oh, well, then this is going to be a time of tremendous invention of religious concepts, and religious behaviors. And I, by the way, and I believe, I believe that's true. I do think that's happening. On the other hand, is this like, okay, is religion gonna control our lives in the way that it did back when that concept was conjoined with genetics, culture, and place?

• 1:50:40Speaker 01

  It's it's hard like we just don't take religion that seriously anymore. We we could choose to take it seriously again if we want to, but just observationally, we don't. And when it when it becomes inconvenient, we change, right?

• 1:50:54Tom Bilyeu?

  I'll be I'm gonna run something by you. Tell me how this lands. I know you have a broad historical context. So also, being a student of history, I hesitate to say this, but I have a hypothesis that the religious impulse plays out at the same volume, no matter what. It just becomes a question of what is the religious impulse aimed at? So for instance, as a game developer, I am constantly awestruck by how toxic the communities can become. And so I sat down one day and I was like, what on earth is going on here? And I realized this is the religious impulse that's being met by a video game. So you are communing with the other players, you are committing a ton of your time to this. You are giving yourself over to this game.

• 1:51:38Tom Bilyeu?

  You care about the lore, you care about the time that you've invested into it. I mean, this is a level of belonging to a game and a game community that you would only have gotten historically as a part of either a town, a family, or a religion. And so it meets that criteria. And so when you have this sense of tremendous belonging and you, as the game developer, go in and mess with their thing. And the easiest way to explain it is imagine I could go in and mess with the rules of football without consulting anybody. And tomorrow you roll up and it's just different. And now the player that you loved is no longer a good player and you don't really like it anymore. It doesn't speak to your skill set. People would be outraged, like my dad was into this team, my dad was into this game and I was raised on it.

• 1:52:21Tom Bilyeu?

  And now I'm here and and you changed it and you're trash. And that's basically what happens now. If I'm right, that that's riding on the the neurological architecture that makes religion so powerful. It's like, hey, that volume is still dialed to 11. Now, hopefully, nobody's gonna go kill in the name of their favorite video game. But I think that's a narrative question and not a architectural question. So if I were to get people to believe that by investing in this video game, like a cult, somehow meant something about you and society and we were all fighting for the, you know, insert now, politics. And you get how suddenly with the right narrative, whoa, like people will go.

• 1:53:03Tom Bilyeu?

  And that's another error. I think people are, politics right now is triggering the religious impulse. So I don't think the volume is dialed down, even if we quote unquote, don't take religion as seriously. Who I think the outcome's gonna be the same because this is an, this is a, the architecture of the human mind.

• 1:53:18Speaker 01

  Yeah, so I 100% agree with everything you said. I just interpret the consequences of it differently, which is imagine telling

• 1:53:28Speaker 01

  an Athenian, Greek, or a Roman, or a Christian in 300 AD, or a Christian, for that matter, in 1800 AD, that your now religion is a video game. They would have thought you completely lost your mind. Right? Like, wait a minute, like you've now taken that entire religious impulse, which is every bit as strong as it was, and you've like now applied it to a video game? Like, you're you're like, you have, you have completely disconnected the importance of religion from reality. From like actual physical reality, like it no longer is relevant to you in terms of like the shape and form of any aspect of like your actual, anything, any traditional concept of community, city, environment, anything like that, family, by the way, does it guide your decisions about like, you know, you know, things like reproduction, children?

• 1:54:12Speaker 01

  You know, are you indoctrinating your kids? By the way, maybe you are, maybe you're indoctrinating your kids in World of Warcraft. But like indoctrinating your kids in World of Warcraft is like, that's not the same as like indoctrinating your kids in Catholicism. Like, that's a World of Warcraft, it may be very, it's very, it may be equally intense, but it's not as comprehensive and an impact on the worldview of how people live their lives. And so I just, I agree with you, but I just think that leads to like tremendous amounts of of displacement. But then also, let me say, I really agree with your last point, which is the politics point, which I think is something that is extremely important because especially sitting here today, three weeks before, you know, very big election.

• 1:54:49Speaker 01

  Something that I often point to when I talk to people about this is if you look at the charts of, you know, the the big general population surveys of would you be comfortable with your kid marrying somebody of a different X? You know, you know, there's the famous chart of a different race and you know, whatever, 60, 80 years ago, that was like 90% uncomfortable, today it's like 10% and falling. Somebody of a different, and then another one would be the somebody of a different religion. And if you had polled people 80 years ago, when they polled people on this, like Catholics, Jews, Protestants, all were like, no way. You know, you're not marrying outside the faith. And today, at least like in the US, very few people care. And so like that chart is like, is like way down. The chart of do you care if your kid marries somebody of the other of the other political party?

• 1:55:35Speaker 01

  That chart is up and to the right. And so, right? And so to me, that maps exactly to what you said, which is, yeah, so politics has become a religion. There was actually a very, very important thinker, writer in the in the 20th century, Eric Bogelin. And he was, he's the best writer I found on this topic. And he, he, he basically, and he basically started, he started his work actually in the 30s and 40s. And he was basically trying to explain at the time, the rise of both communism and fascism. And he's like, wow, you know, these people are crazy, like these people are really extreme. And then he's like, all right, like what is leading, you know, Bolsheviks on the one hand and like, you know, Nazis on the other hand, to be like this, you know, sort of fevered and enthusiastic about these like incredible, you know, these incredibly high, you know, kind of impact social movements with all these consequences.

• 1:56:21Speaker 01

  And so he basically developed a theory very consistent with what you said, which is, you know, which he called, I think, you know, political religions. And he, and he did the mapping and basically said like, these are direct, these are in fact, direct standings for religion. And Christianity, well, actually, both Christianity and Nazism, sorry, both communism and Nazism were legendarily very hostile to Christianity. You know, precisely for that reason, because Christianity was was was the threat. They were, you know, quite literally trying to displace the, you know, the dominant religion in Europe at that time. And so, you know, again, like exactly, you're right. I think the impulse is with us. I think many, you know, both Republicans and Democrats in the US today exhibit that exact, that exact same kind of religious behavior around their politics.

• 1:57:01Speaker 01

  You know, on the one hand, it can sound, I think, patronizing to say that because, you know, people think that their politics are all carefully thought through. They don't think they're doing it. But, you know, politics are important to people in the same way that religious, religion is and was important to people. And so, you know, they're, they're certainly acting, you know, like, like it. And they certainly point in their politics to how political choices are going to affect how people live, which is very consistent with the view of a religion. Yeah, and so I think they're displacing that religious energy into politics. I think if they displace that religious energy into video game cults, like that's probably an improvement.

• 1:57:33Tom Bilyeu?

  Maybe, maybe. It's certainly more benign, I think, for the reasons that you said earlier. So what does the religious impulse done well look like? So there's obviously just funnel it into a traditional religion that's lasted for thousands of years, probably gonna be fine. But given that a lot of people are not doing that, how can you do that well?

• 1:57:54Speaker 01

  Yeah, so the anthropological view of religion, I think, is it's about group formation and cohesion. Right? And this is the role, in ancient city, to talk about this, like this is the role that religion, so the, so the original, the original form of this and sort of sort of pre, prehistory, the original form of this was we've got the family, you know, which is like up basic cousins, you know, it's basically the extended family up through cousins. And by the way, cousin marriage, you marry your cousins and so you try to keep, you know, the family in the family. And then the family has has its gods. And then you've, you, and then over time, the families aggregated, the clans aggregated up into tribes, which consisted of multiple families, and then the tribes would have its gods. And then the tribes would aggregate up into the cities and the cities would have their gods.

• 1:58:34Speaker 01

  Right? And so as the member of a city, you had three tiers of gods that you basically were required to, you know, basically to worship and to honor. And you literally had it with a hearth, you had the fire, you know, the permanent fire, and you had to keep the fire lit and in sort of, you know, you had to sacrifice this to the gods and so forth. And then the morality, the original morality of it was if you meet somebody from another, you know, family, tribe, city, they worship different gods, right? They have their own gods and and so your gods are inherently at war with their gods and your moral obligation is to kill them on sight.

• 1:59:10Tom Bilyeu?

  That's aggressive.

• 1:59:11Speaker 01

  Right, which literally, right, it was literally like, kill them on sight. And so, so had you told them, had you told people from from that era, from from those, you know, from those many centuries, you know, no, you're supposed to be tolerant to people from other religions, they would have said, are you out of your mind? They're a threat. If we don't kill them, they're gonna kill us. We kill them on sight. And so it was like, you know, it's like, the concept of the human rights is like 180 degree inversion from like the original form of society. By the way, a big improvement, I think, but a very, very big inversion. And so like at a, at sort of the most fundamental level, so why don't I go through that? At the most fundamental level, what's the religion for? It's for group cohesion. Why did it work that way? It's because that's what maximally bonded the family, the tribe, and the city together at a time when physical survival was very much up for grabs.

• 1:59:54Speaker 01

  Right? Like, is the family, the tribe, the city gonna make it through the year TBD? Is there gonna be a famine, a flood, a mudslide, you know, a volcano eruption? Is another tribe gonna come over and kill you? Are you gonna run out of food? Like, those are all very important questions. The entire tribe, you know, city had to really pull together for physical survival. And so religion was like the bonding element that pulled together a group. And I would argue, you know, fast forward to today, that's exactly the behavior you see in video games. Right? Which is, you know, it's not just, it's not just a member of like a video game cult is not just an individual. They're not acting as individual, they're inevitably, they're acting as a member of a group. Right? And it's group cohesion. And then I also apply the Jonathan Haidt kind of theory here, you know, kind of coming from psychology, which is,

• 2:00:35Speaker 01

  he has this great, great line he talks about in the book, The Righteous Mind, where he says, he uses the word morality, but you can basically equivalently, I think, use the word religion. He said morality binds and blinds, which is to say, a shared morality or a shared religion, it binds people together into a group. It, you know, it identifies us versus them, friend versus foe, in the way that it did also in prehistory. And then he said, he said, and this is really important, the other part is it blinds. It sets up a, a, a knowledge framework, a perception framework, by which you emphasize confirming information that's good for your group and you dismiss disconfirming information that's bad for your group. And you literally become blind, right? And to the, to the point, and you see this today with Republicans and Democrats, where a very, you know, generally, the more passionate the Republican or Democrat,

• 2:01:17Speaker 01

  the least, the less able they are to articulate the other side's point of view correctly. Right, the less able, right, the less able they are to steel man the other side's view, which means that they're literally giving up on psychological terms, they're giving up what's called theory of mind, they're, they're, they're giving up the ability to understand what it's like in somebody else's shoes, because it's more important to be a member of the group than it is to be able to understand the other. Um, a- anyway, so, so this is all very much in support of what you're saying, like, these are very fundamental primal behaviors. Um, I, I think that they're, they're very important today, uh, in our society, as much as ever, which you see in the politics, um, and then, you know, I think they're going to be equally important, you know, hundreds of years from now. Hopefully, this impulse gets channeled in productive directions.

• 2:02:00Tom Bilyeu?

  Yeah, yeah, we'll see. So, Caifu Lee has talked about how we're, we could experience up to 50% of job displacement. It's not like there won't be new jobs, but you're gonna have a very substantive percentage of people that are either just temperamentally or age-wise unwilling to make a change. Societally, how do we handle that?

• 2:02:23Speaker 01

  Yeah, so I don't, I don't think that's true at all. So, I, I just, yeah, that's, yeah, so that's the classic, in, in, in economics, that's what's called the lump of labor fallacy. So, it's one of the, it's one, it's one, and by the way, Caifu's a very bright guy, so, you know, he may well be right on this, but what, what any economist will tell you is, is a fallacy, and it's actually a fallacy, it's the fallacy at the heart of Marxism, at the heart of socialism, and it's, it's a very intuitive fallacy, it's one that people fall into very easily. Uh, it's called the lump of labor fallacy, because, and there's like, big, great Wikipedia page on this, uh, people can read. Um, the lump of labor fallacy basically is, there's a certain amount of labor being done in the world today, right, and that labor is either going to be done by people, or it's gonna be done by machines. Um, and if it's done by people, then they're gonna make money by doing it, be able to provide for themselves, and if it's done by machines, then the people are gonna become unemployed, and they're gonna be screwed.

• 2:03:09Speaker 01

  Um, and what's interesting about this fallacy is, this has been a fallacy that literally has been in place in, basically, uh, you know, political thought, um, and, um, you know, sort of Marxist economic thought, socialist economic thought, for like, 300 years. Uh, the Marxists, the Marxists really kind of packaged it up and turned it into a, turned it into a religion, actually. Um, but, um, you know, this is kind of the pervasive thing, this, this was sort of the immediate kind of concern, panic, at the very beginning of the Industrial Revolution, um, which was, you were gonna have machines that were gonna substitute for human labor, that were gonna miserate everybody. Um, this actually is, um, sort of embedded in a lot of myths and legends, um, that we, you know, that we, we kind of have in our, in our kind of cultural DNA. Um, there's a famous, I don't know if you've, you've heard about, there used to be, or is, a famous ballad song of this, uh, the myth of this figure, John Henry.

• 2:03:53Speaker 01

  Um, and, uh, it's, it's, it's, kids are often taught this song, it's, uh, John Henry, the steel driving man, um, and the idea was, it's, it's the guy, it's the guy, this is like, you know, this would be like, when the railroads are getting built, like, so this is like, the guy who's like, using a hammer to drive spikes into the railbed to, to put railroad tracks down, which used to be something people did by hand. Um, and it was this thing where, you know, one day, the, you know, John Henry's like the famous guy who can drive in the most spikes. Um, and then one day, the, the foreman shows up with a machine that drives in the spikes, and, uh, there's the, they have a, they have a contest where John Henry competes with the machine, sure who can drive in most, most spikes, and it turns out, John Henry wins the contest and then drops dead from a heart attack. It's some kind of symbolic, you know, the, the last gasp of human effort before the machines take over.

• 2:04:35Speaker 01

  And, and that dates back to like, I don't know, like, 1870, right, so that's like, 150 years ago, people had this fear. Um, and then, basically, what we've had is, we've had 300 years of modern technology, industrialization, automation, computerization, literally three centuries now, and sitting here today, there are more jobs than ever in the world than ever, um, and, and at higher wages, uh, for people, right, and so, and so in practice, what's happened is, we now have three centuries of evidence that, basically, that's a fallacy, that's actually not what happens, what happens actually is the opposite, uh, which is, technology creates far more jobs than it destroys, and creates jobs that are better, right, at higher levels of income.

• 2:05:10Tom Bilyeu?

  Um, and so, do people adopt those jobs, like, are there gonna be people that just get left behind?

• 2:05:16Speaker 01

  There will be some, and, and look, there is some, and, and I should also back up for a second and say, um, conversations about this topic, it's very easy to come across, in my experience, I'm talking about myself, it's very easy to come across as like, judgmental and patronizing, uh, because it's very easy to come across, basically saying, you know, basically, so like, one of the things that I will claim is that, one of the things I will claim, and what we're about to talk about, is that there are some jobs that are better than other jobs. Um, some jobs are just better jobs, they're, they're like, you know, they're, they're physically less taxing, you know, they pay better, you know, whatever, but, you know, there may be a bar to be able to get those jobs, or people may not want to do those jobs, and so, people may get, you know, you can, people can get very resentful at the idea that they have to give up what they have in order for the prospect of something that might be better, but maybe they don't want it, and, you know, who, who, who are these experts on TV or on the internet to tell them that they should think in these

• 2:06:01Speaker 01

  terms? So, so I should start by saying, look, like, people are gonna have a lot of reactions, people always have, look, a lot of our politics for the same 300 years have been around this process of, of industrial change, and then therefore, um, uh, you know, job change, and, you know, like, you know, it's like the rise of unions, and like, there's all these things that happen in our politics as a consequence of, of, of these fights, and so, I should just start by saying, like, you, you need to be able to talk clinically about this, because you do need to be able to talk about the big issues. I do recognize that it's very easy to come across as patronizing, I also recognize that people are gonna have different points of view on this, some people are going to struggle, some, for sure. You know, look, when the, when the car came along, blacksmiths were not happy, right, because like, all of a sudden, you don't need as many horses, like, they, they were not happy. Now, many blacksmiths became car mechanics, but, you know, many blacksmiths maybe didn't

• 2:06:44Speaker 01

  want to become car mechanics, and got very upset and resentful about that, so. This, yes, a- all of the above is going to happen. Having said that, the basic mechanism of introducing new technology into an economy is not job destruction, the basic mechanism is job creation, net job creation overwhelming the job destruction. Um, and, and the reason for that has to do with this concept of productivity growth. Um, and so, the, the concept of productivity growth is very important, so the concept of productivity growth is, is the economic measure of the impact of technology, uh, in, in an economy, and basically, what it means is, the ability to generate more output with less input, right? Um, and so, and, you know, use the John Henry example, can I, can I, can I, can I put more nails in, in the roadbed to build railroad tracks faster, right, with, at the same cost level?

• 2:07:29Speaker 01

  Um, you know, can I build more cars at lower prices? Can I, you know, provide, you know, can I make more video games? Um, you know, more video game levels at lower prices? Like, in, in any industry, there's always this question of, like, how much am I producing today, and then can I produce more output at lower cost? And it's what, it's what every business logically wants to do, right? They want to expand output, and they want, they want to reduce costs. Um, and so, productivity growth is the metric by which economists track the impact of technology, uh, uh, impact on the environment, and, and this is very important. Um, the faster the rate of productivity growth, the faster the rate of economic growth, um, the faster the rate of productivity growth, the more prices of current goods and services in the economy fall, right? Because if you're able to produce more with less, then prices come down, right? And, and so, just take food as an example, like, food today is far cheaper than it was

• 2:08:14Speaker 01

  200 years ago, because of all the automation, right? And so, you know, to buy an avocado, you know, 200 years ago, would have cost, you know, the modern day equivalent of, you know, a hundred dollars, you know, and now it's, and, you know, and now it's a dollar, right? Um, and so, so productivity growth leads to, to, to declines in prices, declines in prices lead to increase in spending power, right? Because if, if as a consumer, I pay less for the things I'm already buying, right, because of productivity growth, then spending power is being unlocked, right? Without me even getting a raise, I have new spending power. Um, and then, that new spending power then leads to the creation of new products, services, and industries, and jobs, uh, to fulfill, uh, that, that all of a sudden, I, I can spend on. So, so what I'm describing is, like, this is the basic mechanism of technological adaptation

• 2:08:58Speaker 01

  of an economy, and it's a basic mechanism of economic growth. Um, and theories, like, like, like the one that you, you mentioned, um, theories by which the introduction of technology has an amiserating effect, as, as compared to a cornucopian effect, historically have not played out well, because that, that's not, that's not actually how this works, which is why, which is why the socialists are like, perpetually disappointed. It's like, it's like, every socialist is like, super pissed, like, all the time, because capitalism works so well. Like, it's really annoying, right? Like, that we live in a time of material plenty, after all of this, like, runaway capitalism, like, it's really, you know, it's Boris Yeltsin and the American supermarket in 1991, just like, completely shocked at how like, much food there is. It's just like, shit, you know, they lied to us, right? Like, the communists lied to us, right, about how to do this.

• 2:09:39Speaker 01

  Um, anyway, so like, I, we can go into any aspect of this you want to in detail, but basically, I, I'm completely convinced that's exactly what's gonna happen here. If AI works the way that we're imagining, what's gonna happen is, product, productivity growth is going to take off, prices of current goods and services are going to fall, volume is going to expand, more people in the world are gonna be able to buy all the things that they want to buy, but also, it's gonna unlock a lot of new spending power, that spending power is then going to create demand for new industries, right? It's gonna, it's gonna unlock demand that we're gonna be able to satisfy by, by, by producing and buying many new things. And, you know, our, our future digital children, AI children, 100 years from now, are sitting here, having, we're gonna have a, you know, podcast, saying, can you, can you, can you believe that our human parents had this fallacy, where they didn't think that this is gonna

• 2:10:22Speaker 01

  turn out this way, because like, it always did, and it did again? And so, and, and anyway, so that's why I'm so optimistic about this.

• 2:10:28Tom Bilyeu?

  I, I love it. For people that don't know you, um, he wrote a document, basically saying, technology is gonna save us all, that he went through in detail on a lot of these points, very counterintuitive coming out of the Bay Area, for sure. Um, one thing that I, yeah, please.

• 2:10:44Speaker 01

  I wouldn't say it's gonna save us all, so I would say, I'm an optimist, not a utopian, and so, it goes, this is something very important, it goes back to where we started, which is, I don't think this, everything I just described does not answer all of life's deep questions, right? Like, it, it, it's not enough to just have material welfare, like, I'm 100% on that, but like, having welfare is better than not having material welfare, right? And, and it's the best starting point to be able to answer the big questions, and so, I, I just wanted to, wanted to qualify that, I'm not, I'm not, I'm not, I, I am actually, myself, not proposing a new religion.

• 2:11:12Tom Bilyeu?

  Mark, this has been incredible, where can people follow along with you?

• 2:11:16Speaker 01

  Oh, good, uh, so I am on, uh, Twitter, now called X, um, I am on there as Pmarca, P M A R C A. Um, that is probably, uh, one of my main presences, and then I have a Substack, um, which is linked to from the Twitter account. Um, and then, we have a YouTube channel, um, and my partner, Ben, and I have a YouTube show, uh, that we do intermittently, um, but we get good feedback on, so, maybe we could link to that.

• 2:11:41Tom Bilyeu?

  Awesome. Guys, I can definitely vouch for his content, it is amazing, I hope you guys will check it out. Speaking of things that I hope you will do, 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.

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