Pod Insights The Prof G Pod with Scott Galloway AI, Big Data, and the Power of Framing — with Kenneth Cukier About this episode Kenneth Cukier, a senior editor at The Economist, joins to share insights from his latest book, Framers: Human Advantage in an Age of Technology and Turmoil. Kenneth explains how to use frames to make better decisions and avoid crises, as well as why we should rethink the phrase “think outside the box.” He also shares his thoughts on how artificial intelligence is shaping business, healthcare, and society. Follow him on Twitter, @kncukier.
Scott opens with why he believes America is experiencing the worst LBO in history.
Algebra of Happiness: Develop a process for resetting.
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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1:18 Scott Galloway? Episode 67, The Atomic Number of Holmium, the biggest box office film of 1967, The Graduate. I have no problem with older women and younger men. As a matter of fact, I banged a hot cougar last weekend, and now I'm banned from the zoo.
1:36 Scott Galloway? Okay, that was bad. Go, go, go!
1:47 Scott Galloway? Welcome to the 67th episode of the Prop G Show. How'd you like that opening, huh? You don't get that on Unfucking the Daily from the New York Times. Anyways, in today's episode, we speak with Ken Kukie, a senior editor at The Economist and co-author of Framers: Human Advantage in the Age of Technology and Turmoil. We discuss with Ken the insights from his book, including how to better frame crises. And why the phrase think outside the box misses the mark as a cognitive method. We also hear Ken's thoughts on AI's role in business and society. Okay. All right. What is, what is on our mind today? We're talking about LBOs or leveraged buyouts. What's an LBO? It's when a private equity firm acquires another company using a significant amount
2:29 Scott Galloway? of debt or borrowed money to meet the costs of the acquisition or to pay for the acquisition. And the most important part puts very little of its own capital, its own equity into the company. The problem with LBOs, or what private equity guys have been accused of, is that they buy a good company, they fire a third of the staff, they cut costs, they put huge leverage on the firm, take out all of the money and hope the company survives. But if it doesn't, they have all their money out and oftentimes you end up with a weaker company in 10 years because they have failed to make any investments in infrastructure over the long term. Now, to be fair, a lot of buyouts emerge stronger. A lot of companies need the discipline of debt. They need to get in fighting shape and a lot of people would argue that the markets are smarter than that.
3:14 Scott Galloway? And if they see its owners not making the requisite investments, that it'll take the appreciation of the stock down and it just isn't a good business model. However, however, it's just hard to argue that there haven't been some buyouts where the folks show up, lever the shit out of the company, kind of take off and say, all right, you're on your own and you're left with something that's a shadow of itself. And typically there's a decent amount of human cost involved in the, in the culling, if you will. The private equity firm, through financial engineering and operational improvements, Latin for violently shrinking headcount and cutting costs, hopes the acquired company appreciates some value over the time so they can eventually sell it at a profit. And that does happen a lot. Private equity is probably, I would imagine on a risk adjusted basis, the best performing asset class. If I sound conflicted, I am.
3:58 Scott Galloway? I am. Often that means telling a great story when the market for IPOs is hot and flinging feces at unwitting investors. Hmm. And today we're seeing the greatest LBO of all time play out or the worst, I guess, we've taken sort of the worst attributes or what we sort of, I don't know, if we look at LBOs through a negative lens, if we look at LBOs through the Senator Sanders and Senator Warren lens, which is I don't know, a bit of a cartoon of what it actually is, but there is a kernel of truth there. The management of the US and its key institutions, you could argue, is the worst LBO. Whether in government, central banks, hospitals, or higher education, have sought to completely consume the public benefit that their services offer to prop
4:40 Scott Galloway? up their own balance sheets and 401Ks. We see this as the great grift, or I've called it the great grift. A wealth transfer from the young and future generations to the already wealthy, and a way to add more leverage to the US's balance sheet to prop up the NASDAQ, support an obese tax code that makes sure the shareholder class can continue to pay less tax on the money their money makes compared to the money people actually sweat for. And that's the difference between taxes on capital gains versus current income, and pump money into the hedge funds that we call universities masquerading around as if they're charities or nonprofits. Why do these institutions have nonprofit status? Why? Anyway, at the same time, perhaps until now, this has been matched with a lack of investment in the backbone of our country, specifically infrastructure, which has left
5:23 Scott Galloway? an empty shell of a country, or a weakened country, if you will. The pillars, the base, the infrastructure, the, I don't know, whatever you call it, the cement, you know, the steel in the ground. We've just said, I know, I know, let's cut taxes, let's party, it's champagne and cocaine, and we'll worry about tomorrow, tomorrow. Are we in the midst of the mother of all bad leveraged buyouts, where we've cut costs like crazy and have not made any long-term or long-forward leaning investments? Where has America really made investments? The Republicans would argue we've invested in our most productive citizens. Well, okay, what the fuck does that mean? Just lowering tax rates on the rich? And now have we ended up with a weak company where the shareholder class have taken all of their money out and have kind of left us to see what happens? The Fed's balance sheet has
6:08 Scott Galloway? increased 787% since May 2008. Think about that. It's up ninefold in the last 13 years and currently sits at around $8 trillion. A ninefold increase means the Fed has been buying a whole lot of bonds and other assets in order to inject trillions of dollars into the economy. I think this is just such- Bullshit, just as certain seeds can germinate unless there's a fire. You know, I'm here in my nice home and why I'm financially secure. I'm here because the latest or the last great crisis or economic crisis, the Great Recession, we only spent $700 billion to prop up the banks and we let other asset classes and we let the rest of the economy fall to some sort of natural level. We let it take a shit kicking and what did that do?
6:51 Scott Galloway? It gave me the opportunity, as I was coming into my prime income earning years, the opportunity to buy Amazon at $160 a share, whereas it now $3,200. It gave me the opportunity to buy Apple at $12 a share. It gave me the opportunity to buy a place in New York at $800 a square foot instead of where it is now $2,500 a square foot. So, all you're doing by propping up assets, by artificially reflating, inflating, maintaining their asset value, is saying to the already wealthy, "We want you to stay rich at the expense of younger and future generations." $6 trillion, 10 times the bailout of the banks, and what has that done? Let's pump a ton of stimulus into the economy.
7:32 Scott Galloway? Yes, some of it, some of it will get to the middle and lower income classes, but the majority of it hasn't gone to individuals, it's gone to organizations. This is the mother of all LBOs, but the worst type of LBO. It hasn't imposed any sort of discipline. Do young families, where one in five households with kids that are food insecure, do they need more discipline? Do they need to tighten their belts? It just feels as if we've decided, "Okay, we're going to take financial engineering and apply it to a society." And as Ken Cooky says in our interview, "Government is supposed to think long term." There're supposed to be the adults in the room that say, "Okay, we're going to make these multi-generational investments." And it seems as if the short-termism, this desire by the people who have weaponized
8:14 Scott Galloway? government, by the way billionaires, check this out, billionaires on average speak to their respective senator once a month. What happens in a presidential election? Everyone starts traveling to Florida. You can bet my senior senator, Marco Rubio, is going to spend a lot more time on planes making his pilgrimages to Iowa than actually doing anything, I don't know, called public policy or anything like that. And what happens when the first two states in the presidential primary are older and wider than the rest of the nation, which they both are, which they both are? We end up with policies and framing, if you will, or starting off the presidential election cycle with a bunch of policies that basically kiss the jiggly, white, veiny asses of America.
8:58 Scott Galloway? That was an ugly image. That was an ugly image. Do you think, you want to know how America would be much different? Is if the first presidential primary was in Mississippi? Or if it even was in California, that is a better representative of our nation and it talks more about a multicultural society and the challenges that we face with a younger population, or maybe what it is they want from America? We have totally LBO'd this nation. This lack of investment is a disaster waiting to happen, physically, metaphorically. The US Government Accountability Office says that nearly one in four bridges are deficient. Jeez, America, one in four bridges deficient? The Environmental Protection Agency estimates that over the next decade, drinking water,
9:39 Scott Galloway? wastewater, and irrigation systems will require $632 billion in investment. The American Society of Civil Engineers estimates there's a total infrastructure gap of more than $2 trillion needed by 2025, that if failed to be addressed, would result in almost $4 trillion of GDP loss. That's the thing, this just doesn't make any goddamn sense. If you start a company, you invest in technology, you invest in infrastructure, you invest in real estate, you make forward-leaning investments in new hires that don't pay off immediately because you know you'll get a return, or you hope you'll get a return, and we're just not making any of those investments in our country. According to the Global Competitiveness Report from the World Economic Forum, in 2019, the United States ranked 13th in the world in infrastructure quality, topping from 5th place in 2002.
10:21 Scott Galloway? True story, I was at the World Economic Forum in 2002, I was invited in 2000 and invited back twice as a global pioneer, what they called a global leader of tomorrow. And guess what, I haven't been invited back since. You know what it's like to peak at 34 years old? That's what it was for me, I peaked at 34. Athletically, I peaked at the age of 12. And then I grew about four inches and I stayed the same weight, and I looked like Ichabod Crane with bad acne, trying to play football and basketball and baseball in high school. And you know what, it didn't work. It didn't work that well.
11:00 Scott Galloway? That's the dog. Anyways, data from the global infrastructure hub projects that by 2040, China will have invested 5.1% of its GDP on infrastructure while the US will have spent just 1.5%. Let me get this. China is investing at triple the rate of us and they're adding tens of millions of people to the middle class as we take millions out. What a shocker. They're doing better than us. Infrastructure is an investment in the country and an investment in the people who live and work in that country because that's who really needs roads and public transportation. What's a transfer of wealth from the poor to the rich? You don't build the J-line. You don't build highways. Who needs public transportation to get to
11:41 Scott Galloway? work? The poor and the middle class, they don't have helicopters. They don't have drivers in cars. They don't have childcare. They need regular transportation. We are outsourcing costs as we have done for the last 30 years to lower and middle-class households. Infrastructure goes beyond improving roads, airports, and railroads. It means providing broadband access to the 21 million Americans who still don't have it. It means investing in childcare in schools. The US underfunds school infrastructure by $46 billion each year. It means investing in a social safety net so that people can afford to take a risk, so that people who don't have trust funds and prep school contacts can move their families for better jobs or start their own businesses, knowing that one failure won't put them on the street.
12:25 Scott Galloway? Everyone is kind of one bad decision away from living in their car. What happens when you have to stay somewhere because you have health insurance from one employer? You don't move. Your human capital is inert. You don't move to where better opportunities are and the economy doesn't grow. Pew Research found that in April 2020, less than a quarter of low-income adults said they had enough funds saved to cover their expenses for three months in case of an emergency compared with 48% of middle-income and 75% of upper-income adults. It's time to stop. It's time to stop. The bad, poorly thought out LBO of America and get back to responsible stewardship of the Commonwealth. Let's make the investments this asset deserves.
13:07 Scott Galloway? And that's more than just investing in little Johnny and little Suzie, your own kids, right? Don't we have the opportunity, don't we have the foresight to have more empathy, to have more gratitude, to see what a wonderful company this is, what a wonderful organization America Inc. is? It requires, it warrants, and it deserves the same type of investment our forefathers made, so that we could enjoy these incredible fruits. The LBO of America, it isn't working. Stay with us, we'll be right back for our conversation with Kenneth Cookier.
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16:12 Scott Galloway? Welcome back. Here's our conversation with Kenneth Kukier, a senior editor at The Economist and the co-author of Framers: Human Advantage in the Age of Technology and Turmoil. Ken, where does this podcast find you?
16:26 Speaker 03 It finds me in London, just a little bit outside of London, in a leafy suburb called Putney.
16:32 Scott Galloway? Great. And the ubiquitous phrase "think outside the box" completely misses the mark as a cognitive method, which was something that stuck out in what you'd sent us. Can you expand on what you meant there?
16:45 Speaker 03 Yeah, sure.
16:47 Speaker 03 Speaking outside the box, the idea of brainstorming is fundamentally flawed because it presumes that you can basically take yourself out of a mental model that you're in at any one time, out of a frame, and put yourself into a different one. And in fact, the aspiration is to be free of these constraints. And that's actually wrong because you can never actually leave the frame that you're in. However, what you can hope to do is to be conscious of a given frame that you're in, a mental model, and to then deliberately change it. But the idea of simply abandoning it is wrong. And one of the reasons why is it is the constraints. It is the box where the magic is. Because if we focus our box, our constraints, our frame in one domain,
17:30 Speaker 03 it emphasizes certain features that we want to plow into and develop at the exclusion of others. So all of life is about living a sort of a model in our minds of the exterior world that we're seeing. And if we're deliberate about how we frame the world, how we actually exclude certain things and focus on other things, we become really effective. But if we try to give it up altogether, that's not going to work.
17:55 Scott Galloway? So give us an example of how you become a better framer.
17:59 Speaker 03 Sure. Well, I mean, it first maybe start with what is a frame? You know, what are the components of a frame? And there's three elements to it. The first one is causality. It's a template of understanding how the world works because of cause and effect. And that makes the world predictable. We can leave our mark in it and we can anticipate certain things. The next is the idea of counterfactuals. We're constantly asking ourselves what-if questions. What if I do that? What if this happens? How would I respond to that? And all of life is a series of iterations and permutations that's happening mentally about how we respond to the world, if you will, by dreaming or, if you will, posing these counterfactuals. And then what do we do with them? We impose constraints on them.
18:41 Speaker 03 We basically relax certain constraints and we tighten others. And by doing so, we have this mental model to say, I'm going to actually focus on this element at the exclusion of these other elements. And by doing so, we're now in a frame. It might be in terms of the economy. If we look at the Amazon rainforest, one person might say, hey, this is valuable timber. That's important to cut down and sell today so that people can have economic enfranchisement. At the same time, you'll have someone look at the exact same situation, the exact same data and information, but with a different frame and say, no, no, no, this is the lungs of the planet and it's important for long-term viability that we preserve it and don't cut it down.
19:24 Speaker 03 By understanding the frames that we have, we can now understand how we can interact with each other, have a conversation and try to come up with better solutions to our problems.
19:33 Scott Galloway? And when you look at how different organizations or entities or governments frame their relationship with each other, do you see any obvious flaws where if we think about reframing the way we approach each other or governments or conflicts, any obvious applications or examples of kind of incorrect framing, so to speak?
19:56 Speaker 03 Yeah, I mean, you kind of see it everywhere. I mean, one example is, right now, I think there's a huge debate going on, on China as a strategic competitor versus a rival and a threat and an enemy versus a strategic partner. And I'm very alarmed by the way that we're mis-framing the situation that aggravates the problem worse than it is. I do think that there are these, I think it is an important and substantive worldview debate among a country that has at its core this idea of decentralization and freedom and another one which is uneasy with that and actually feels more comfortable with
20:38 Speaker 03 a degree of centralization and of course is taking measures that is actually restricts human freedom. However, if we, if we frame the issue as if these two great powers are on a collision course, that is what we are going to get. We're going to get a collision. If we frame it differently and say, how can we accommodate each other and still work on the issues that we need to work on to advance human progress, respond to global challenges, while also accept the fact that we have differences that we're probably not going to settle, but we're just going to have to simply manage, we're going to be better off as a civilization.
21:15 Scott Galloway? Do you think some of that is because we incorrectly framed Russia? I love the idea of looking at the opportunities for partnership versus the threats that the two competing powers present, but do you think some of that is that we got the framing wrong on Russia and kind of we're talking about hitting the reset button and how we would work together and we kind of come to this recognition that they're our adversary? Do you think that, well, let me, let me put it this way. How important is it that you learn from past framing versus informing kind of, I think of it as like you're trying to create context or a framework for how you make decisions? How important is it to either incorporate history or like as Yoda said, to forget what you know?
21:56 Speaker 03 Well, in all ways, I'm never going to counter, contradict Yoda. He is the sort of the paragon of the, of the wise sage. It is true that history is essential because it helps us develop our repertoire of frames. It gives us multiple mental models that we can apply. And of course, we know never perfectly. It's not, history doesn't repeat, it doesn't always rhyme, but what it does do is it gives us a greater appreciation for the diversity of mental models that can exist. And we can take other mental models that we've had and we can adapt them. So I do think that we are, I think there's two problems.
22:35 Speaker 03 It's not just that we've misframed the change from Soviet Union to Russia and therefore we are beguiled when it comes to looking at China. I think there's another misframing is that there's, that there's a vainglory in the West that because we quote unquote crushed the Soviet Union and in 1989, we had these revolutions that just vaunted the, the, the Western worldview that, that became unipolar, that we think that we can still apply that stamp at every domain and every step in the 24th century and we can't. I think what we need to aspire to is a form of pluralism. And the problem that we have is the simplicity or simplisticness of trying to
23:20 Speaker 03 see the world in a very binary way, particularly as, you know, the West being more, the Americans being the heroes, whereas every other country sort of being either a vassal or somehow diminished. I think there's, there's a lot of incredible reasons to be incredibly proud of America and its legacy, but I think that we need, as a strong country, it needs to be a self-confident country, and it needs to interact in a much more wise and deft way in world affairs.
23:51 Scott Galloway? So take us, let's go back a year. So the United Kingdom, you know, one of the highest mortality per capita rates in the world, the US, 5% of the population and 22% of the world's infections and deaths. If you were to go back and apply this notion of how to reframe the problem such that we might have less bad outcomes, what, what do you think we could have done, both nations could have done better?
24:16 Speaker 03 Such a good question. It's one that historians are going to sort of be reading and weeping, as well as the students of history. The most important, of course, is the question of how we framed the situation at the very earliest days, because there it was so pronounced. In the US and Britain, the framing was of the seasonal flu, and therefore, the range of options that we saw was basically mitigation, because what you do when it's the seasonal flu, but sort of let it burn through the population, hope for herd immunity, and sort of mitigate it with basic steps that you can take that are sort of effective, but not too draconian. On the other hand, countries in Asia, or in the Asia-Pacific, like New
24:58 Speaker 03 Zealand and Australia, did better. And the reason why is because they framed the COVID outbreak differently. Their mental model wasn't the seasonal flu, it was SARS. And because they, they approached it with this template of SARS, it meant that you threw everything at the problem immediately. To overreact, quote unquote, is to actually react and to react responsibly, because it's far better to quote unquote, overreact and eliminate. Covid than to simply underreact and have to live with it in an endemic way. So the strategy of mitigation versus elimination is pronounced. And New Zealand choosing elimination did incredibly well.
25:41 Speaker 03 In June, they declared themselves Covid free when Britain was having deaths galore because they didn't take it seriously enough because they framed the problem incorrectly.
25:52 Scott Galloway? And as we look back and we say, we think, okay, given what we know a year in, how would you frame or if we wanted to implement a series of measures such that the next time a pandemic or any crisis washes up on our shores, we're better prepared or we can reduce the damage, how do you think we should be framing our approach to disasters or reframing, if you will?
26:16 Speaker 03 So we need to change our mindset and frame it probably on a basic cost prevention outlook. We're spending trillions of dollars to support the economy and to bring the, bring people and, and particularly an underclass of people who've been more severely harmed by the economic crisis that Covid has brought in its wake, spend trillions of dollars to respond to this when we could have spent actually literally millions and maybe if you want to be generous, billions of dollars to have avoided the problem at the outset. And some countries have done that.
26:56 Speaker 03 Finland and Norway in particular have a much better way of approaching these problems by thinking about having a emergency response program that is viable for any form of disaster. Is it a flood or is it a pandemic? You're still going to need certain forms of medical equipment, for example, and a self-sufficiency of supply of certain goods. If we approached it with this sort of disaster response and a fungible disaster responsive mindset, we would invest before the crisis and by spending so, you know, hundreds of millions or several billion dollars, we can avoid calamities that cost trillions. That's where we need to go as a society.
27:38 Speaker 03 It's really hard to do that because it requires a politics that looks different than the politics that we have today. And it's a huge irony as well. Let me dwell on this for a second. The purpose of government, according to David Hume, was because individuals have a lifespan of, you know, 70 years, to be generous, less in his day, that we're caught up in the short term. We're beguiled by our passions, that we live for the moment. But institutions, in particular the state, can be the entity that will have the long-term perspective and can invest over several generations. And you can imagine that the state in the late 1600s, early 1700s, into the 1800s,
28:21 Speaker 03 in the glory days of liberalism, not the American liberal left center, but liberalism as in liberty and the role of the individual, that the state was the entity that was going to be responsible for intergenerational investment. And that's gone now. In fact, it's just the absolute opposite, where we have individuals who may have a mindset of several decades, and we have politicians that have a mindset of every four years. That doesn't work anymore. The state has sort of lost its whole purpose of long-term investment.
28:53 Scott Galloway? Yeah, it feels as if, though, I mean, so you've correctly, I think correctly diagnosed the problem, but if we're going to say, all right, let's move to the solutions, we're short-term thinkers versus long-term thinkers. You know, what, if we, if that's our new frame, if our frame is, an objective is to create more long-term thinking, more, you know, multi-generational investments and thinking, what would we do to get us to think more long-term?
29:22 Speaker 03 I think we need, uh, I'm not so certain institutional fixes are going to work. And if you actually look at the state of politics in many countries now, many democracies, but in particular, America, if you extended the length of office of the executives, you're probably not going to get a better politics. In fact, it might have gotten worse. Imagine Trump for eight years as opposed to four. There's more breakage that can happen. In fact, you might want to have the four-year limit feels, feels right intuitively. Certainly, we've levered our entire politics around that sort of quadrilateral state of affairs. Of course, it has to come from the public, right?
30:07 Speaker 03 But we've, we've lost also the sense of a, a political culture that is informed and that shares some degree of common base of knowledge and of facts. What I'm saying is, is it feels very cliche. I'm going to be honest, because we've been talking, we've been having this national conversation for several years now. And of course, since the, you know, the election and, and January 6th, it's become front and center that we can't miss it. And I think a lot of people simply play the role of ostriches and put their head in the sands because they think now that we have Joe Biden in the presidency, that the problem's going away.
30:51 Speaker 03 Trump is not on Twitter, so he's less visible. But the same sort of poison in the body politic is still coursing through. It's not changing. If anything, it's growing because Trump is, is going to be on the ticket for every single Republican voting in the midterms in a way that he was on the ticket in the presidential election. And so, of course, the Republicans are all going to come out in fury, trying to bring back Trumpism without Trump, whereas the Democrats might not. So I don't think that changing the institutions and institutional structure is actually going to give us a ability to think long-term.
31:32 Scott Galloway? Coming up after the break.
31:34 Speaker 03 The point is that don't make the human being as the loci of all intelligence. The artificial intelligence is going to teach us new things that we didn't know before.
31:44 Scott Galloway? Stay with us.
31:51 Scott Galloway? Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. The regentic trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?
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33:35 Scott Galloway? You've spent a lot of time thinking about AI. And you did a TED Talk where you said, "We need to make sure that technology and AI is our servant and that we're not technology or AI's servant." Give us a sense.
33:50 Scott Galloway? Of what you think the threat of AI is and how you think we should be framing, if you will, the conversation around the role of AI.
33:58 Speaker 03 So there's a mysticism that people like to bring to AI, a form of alchemy, that it is turning the base into gold, that because it's hard to understand and also because it'll exceed our ability to understand how it reaches decisions, that therefore it's just a matter of time before it becomes invulnerable. And I disagree with that. People don't understand that artificial intelligence is a tool in the same way that the abacus is a tool, or that the computer is a tool. It will exceed our abilities. That shouldn't surprise us nor alarm us because technologies axiomatically exceed our abilities. The steam shovel can do better than a human being using its brawn.
34:43 Speaker 03 But we need to understand it that we are still in control of the AI. Now, it is possible that we could give up more to it than it deserves, and we shouldn't do that. But if you scratch the surface and look at the successes of AI, the biggest successes they've had, whether it's AlphaGo or crushing human players in Dota 2: Defensive Nations, which is a video game that requires strategy and planning, that behind it, human beings have had to set the parameters in order for the AI to function and to win and to beat the other humans. Because human beings can frame. A frame is a mental representation. It's an abstraction. It's ability to take the world and condense the information to learn from it and therefore
35:26 Speaker 03 use it in a fungible way in lots of other circumstances. It becomes efficient, it becomes understandable, coherent, and actionable. But AI doesn't do any of that because AI doesn't have any sense of causality. It has no ability to conjure up counterfactuals unless you program that in, and it has no way to identify meaningful constraints. Now, these are the very features that define a frame or a mental model that human beings do as a second nature. Now, we can get better at that and do it better, but we do this and the artificial intelligence doesn't. And because of that, we are still in the driver's seat, and if we don't stay in the driver's seat, it's our fault.
36:05 Scott Galloway? Yeah, it's always, I'm kind of with, I'm with you on this. I've always said, at the end of the day, it's, AI is not dangerous. It's the people programming it. It's, you know, what are we, what are we telling it to do? I've never bought that it turns sentient and starts making its own decisions. When you look at AI and you think about the economy, who do you think, where do you think the biggest opportunities are for AI? What industries? What types of employment? And what types of employment and industries are most at risk with the introduction or the advancement of AI?
36:37 Speaker 03 So clearly, healthcare is a place where AI is going to be revolutionary. And the reason why is that we're already collecting data in healthcare, but we're not really using it for a variety of reasons either, because we don't have a culture of using it, we're not very good at it, the privacy law might restrict us from using it in an effective way, might be expensive to do. But once we collect more of that data, because it becomes accessible to do it, and we run algorithms through it, and we have findings that over time can be validated and verified as legitimate, we can start making improvements that we never could imagine. So let's just take a second and look at a given hospital with a tricky case of a particular patient. And a lot of patient cases are tricky. You
37:21 Speaker 03 never have a clear answer one way or another. But you sort of know in your heart of hearts that there's probably a thousand people in the United States and sort of more globally who are facing the exact same problem, or face relatively the exact same problem. But are we learning from the experience of what worked and what didn't in those other cases? The point about AI is something called feature extraction. It makes inferences, but it makes inferences and future extraction based on the quote-unquote "raw" data, all of the data that can possibly take in, that the human being need not specify what is relevant. Those correlations of relevancy sort of bubble up from the data that you have. Now, you do need a model. You can't just be blind about it. You can't simply torture the data
38:06 Speaker 03 until it confesses to anything. But the point is that don't need the human being as the loci of all intelligence. The artificial intelligence is going to teach us new things that we didn't know before. So I want to stress that in the book, it's not that we're naysayers of artificial intelligence. In fact, we're Great friends of AI, we think it is going to be incredibly transformational. But the point here is that it's going to exceed human capacity to be the loca of information and knowledge, and therefore, we're going to learn new things. And healthcare is begging for reform so that we can improve outcomes, lower costs, and most importantly, increase access, increase access to people who've otherwise been denied high-quality healthcare.
38:48 Speaker 03 That's such an easy win, but then when you go beyond it, just look at any domain in society that can collect data. We're going to be able to improve how it works with artificial intelligence. So education is also begging for it as well, particularly in an age of COVID and remote learning and the hybrid office, where so many of our interactions now that used to sort of have an informational component to it, but were done in physical space, so therefore, that information was never captured and rendered into a data format, now has a data component to it, becomes datafied. Suddenly, when we have the data, we can apply this tool of machine learning to it and learn new things that we didn't know before. So again, education is the second one.
39:31 Speaker 03 But as for the risks, to be honest, I find it hard to come up with the problems of applying AI because I see so many opportunities to reform what we do by applying this veneer of empirical evidence at scale with pattern matching and statistics to become better at doing what we're already doing. The risk, of course, is going to be AI in the hands of people who don't share our values, people who are authoritarians who want to misuse it, whether it is to violate privacy for clickbait, or to manipulate elections, or something much more heinous and worse, which is to say, use facial recognition to have an at-scale control of the population.
40:14 Speaker 03 Though, that's where I want to focus my fire, at the dangers of the misuse of it by humans, not because there's something inherently wrong with the AI itself.
40:23 Scott Galloway? So give us just a couple of basic applications of how AI will improve our lives. We talk a lot about AI, but give me just a couple of basic benefits we are absorbing or registering because of AI.
40:38 Speaker 03 Sure. We're at the outset of it, so let me sort of give you one that is to mentally help us see what's to play for. So there was research several years ago that looked at retinal scans and wanted to identify whether it could, artificial intelligence could identify someone's likelihood to have a heart disease. And so they posed lots of questions to all of the, to that data set in which they had known the answer, so they can start pattern matching things. And by applying this algorithm to retinal scans, it could predict if the person was a smoker or not. It could predict if the person was a, within a certain age of three to five years, which
41:23 Speaker 03 is pretty impressive to say through the eye scan alone, a retinal scan, you can predict if someone's a smoker or if someone is a certain age, but it could also predict the sex of the person, if it was a male or a female. And that stunned the researchers and it was pretty good at the prediction. It was around 95% in both cases. So scientists had absolutely no idea that it was even feasible to predict sex based on the retinal scan. So what was it that the AI could see in the blood vessels and of the retina that gave this sort of gender-based component to it? We still don't know. But suddenly now you can imagine if we can identify something as foundational, as the
42:08 Speaker 03 sex of a person based on their retina scan, suddenly you can imagine, well, what would be the best predictor that someone's going to have heart disease? What is the best predictor that someone is going to have dementia, not in three years, but in seven years? And what sort of interventions can we take? Now, particularly if we have, if everyone has Fitbits and Apple watches, that we can actually look at population scale of the different ways, this sort of observational data, if you will, data in the wild. What people are doing, whether exercise is, works and how well it works, what is the minimum level of exercise to forestall dementia? Can you over exercise? How much does diet play a component to this as well? These are the sorts of things that we are going to be able to learn
42:52 Speaker 03 that we just don't know today. So all of the world has this sort of dark matter of information, information all around us. And when we apply this tool to it, we're going to be able to unlock new learnings that we never could know before. The big challenge is going to be epistemological because we believe that the human mind is the loci of all that is in the world, in the same way that the sun is the center of our solar system. We define everything around the ability of the human mind to understand. And in fact, my co-authors and I have just written a book that vaunts the human mind as the center because framing is so foundational.
43:37 Speaker 03 But at the same time, as human, that's the human mind is as foundational, this tool of AI is going to create new elements of knowledge that is latent and not yet exposed and will come forward to us. We are going to have to interpret it and we're going to have to accept it on faith because we may not be able to understand how the algorithm came to the conclusion, in this case of a retina, that a person is a male or female based on the retina scan. So the whole project of the sciences from the 1600s onwards has been to put man's empirical knowledge at the center of the universe and cast out authority based on faith.
44:19 Speaker 03 And now in the 21st century, we're going to have to base our knowledge back on faith again, but faith born of the algorithm and of the machine. This is going to be very humbling to us, but I think it's the direction that we're going to have to go.
44:33 Scott Galloway? When you look at companies, organizations, are there any that stand out where you think they clearly understand AI, their decisions, their investments and their products reflect that they get this stuff?
44:48 Speaker 03 Yeah, I mean, the reason why the most important companies in the world are AI companies, are data companies, is not simply because they're based on ad tech, which happens to be a big sector, but also because they have the data and they understand the importance of using data. I mean, the whole history of corporate America in the last 20 years can be written through the lens of machine learning. Those companies that collected data had deliberately found a way to get a data advantage and then could actually learn at scale by taking some information and then collecting more and beating their rivals with that information is the way they've succeeded.
45:31 Speaker 03 So, an example is just simply take Yahoo and Google and search queries that are mistyped. Yahoo would recognize that a search query had a typo in it and would auto correct it and give the viewer or the user the search that they're looking for. That sounds really nice, that's pretty good, but that's just simply a basic auto correction. Google realized that the typos themselves were very valuable, that they could actually turn the typos into a product, they can create the world's best spell checker, they can do it in every language, that they can identify new words that moved into a given language, in this case in English, by simply watching what was being typed in.
46:16 Speaker 03 So, words like Obamacare and iPad started coming out. And of course, there was other variants of spellings that people would click on and they would identify if the person left the search window or if they actually researched a variant of what they searched before to find out that it wasn't right. By creating a machine learning algorithm that tracked all of this, they became an organization that just realized we're in the business of collecting data and learning at scale. And that's why they can apply all of their features, from reading Gmails to having an incredible way to help people write letters and compose essays by having an autocomplete for the word that you're trying or the sentence you're trying to write. That wasn't a technology, it was a mindset.
47:00 Speaker 03 And so, every company is going to have to have that machine learning mindset or it's not going to last long.
47:06 Scott Galloway? So take us to either your 25-year-old self or a 25-year-old who's just out of school and buys into an AI future. How do young people best position themselves to take advantage of this brave new world of AI?
47:21 Speaker 03 When I was in college, the class I did worst at was statistics. I basically, I in effect failed, but I had a teacher who took mercy on me. And I will even say that on the last day of class, I asked him to summarize sort of the theory of what he was trying to teach us or what he did teach us. And he laughed at me and then the whole class laughed. And it took me frankly decades to realize why I was so bad at statistics. And the reason why is because I took it so seriously that I then saw it as not an irony whatsoever that 10 years ago, I basically wrote a book about statistics called Big Data, that I had to sort of plow that domain
48:06 Speaker 03 to fully understand what was going on in terms of how you can take the hurly-burly of the world, render it into a format to make it predictable, understandable and repeatable, and learn the things that you couldn't do before. So my message to my 25-year-old self and/or message now and to extrapolate to 25-year-olds today is if you find something that is sort of grating at you intellectually, pursue it. And if everyone laughs at you, I mean, maybe you're on to something. Maybe you're going to do something original and novel with it. Traditional statisticians read the book Big Data and they criticized me and my co-author Victor because they said, "What about spurious correlations?"
48:51 Speaker 03 And we looked at them and said, "Are you mad? What about the fact that we're still driving cars?" Right? That was the rebuttal to it. You do something different. It's not the same thing whatsoever. But it requires you to accept the fact that you're going to get laughed at because what you're doing is something original.
49:08 Scott Galloway? So if you're getting laughed at, you're doing something right. I like that. Ken Cooky is a senior editor at The Economist and host of its weekly podcast on technology. He is also an associate fellow researching artificial intelligence at Oxford University's Said Business School. His latest book, Framers: Human Advantage in an Age of Technology and Turmoil, is out now. He joins us from his home in London, England. Ken, thanks for your time and stay safe. Thank you, Scott. Algebra of Happiness. So I am feeling down today. I'm like, kind of, I don't know, sad, angry.
49:51 Scott Galloway? I don't know what the fuck is going on with me, but I'm not feeling my usual cheery, sunshiny, Easter parade self. And so the first thing I do is I acknowledge that. And I'll even say, if someone calls me, is close to me, says, "How are you?" I say, "I don't know, for some reason, I'm feeling a little bit down." I find that helps. Just saying it makes me feel better or starts the road to repair. And sometimes the road to repair is only six hours or a couple of days. But I acknowledge that there are peaks and valleys, and I acknowledge when I'm in a valley. And the first thing I try and figure out is, is there something I'm upset about that I'm not dealing with that is bothering me? And I try and process it. And if, as I've done today, and said, "Okay, it doesn't, I can't really point to anything
50:33 Scott Galloway? that, I have no legitimate reason to be down or unhappy." I recognize that it's probably something physical or chemical, and I start trying to address it. And the way I address it, again, is with this algorithm of SGAFA. And the first S is sweat. I try and work out really hard. And it's really hard when you're depressed. It takes an especial amount of effort, but I find that if I can sweat, it sort of resets me. Clean, I try and eat clean. I try and avoid trans fats. A, abstinence, I try and lay off the alcohol and the marijuana for a few days. I don't drink a ton. I don't smoke a lot of marijuana, but I try not to have any. When I'm feeling down, I find that it just, taking that shit out of my system.
51:17 Scott Galloway? And I've said before, I'm not a puritan. Helps me. F, family. I find being around close friends and family grounds me and gives me some context and just generally makes me feel better. And then affection. We're mammals, being around others, whether it's your dog, being affectionate with your dog. I like to, my favorite thing is to watch TV at night with my kids and I, I will try and do this tonight. If they'll put up with it, but I try and get all of us to flop on a couch and then instinctively, and it's probably the nicest thing in my life, is my kids will instinctively like throw a leg, one of their legs over mine. But I find that as mammals, proximity and closeness and affection to other mammals is very restorative for me. But one, acknowledge
52:00 Scott Galloway? that you're down, acknowledge that it's okay. Figure out, figure out if there's something or you haven't processed that you need to address or at least acknowledge. And if it's not, realize, okay, you need to reset and develop your own process for resetting. Life is short. We're gonna be dead soon. I believe that. I can't get over how fast it's all going. We deserve to be happy, but deserving to be happy isn't enough. You need to be action oriented and you need to deal with this and snap out of it. And just as today, I'm confident I will snap out of it, but I don't take it for granted. I'm going to address it.
52:39 Scott Galloway? Our producers are Caroline Shager and Drew Burrows. Claire Miller is our assistant producer. If you like what you heard, please follow, download and subscribe. Thank you for listening to the Prop G Show from the Vox Media Podcast Network. We'll catch you next week on Monday and Thursday.
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