506 | Capitalism

The Minimalists speak with Rey Flemings about the upsides and downsides of capitalism, potential alternative economic systems, the best ways for wealthy people to be more generous, plus greed, freedom, private ownership, and more. Discussed in this episode: What's the best way to talk about capitalism objectively without evoking an emotional response? (3:19) What's the first thing that comes to mind when you hear the word "capitalism"? (11:30) Right Here, Right Now: Sunday Symposium and Clutter Counseling (53:35) Listener Tip: Why didn't we think of this? (54:29) Listen to the full Maximal episode on Patreon: patreon.com/theminimalists http://patreon.com/theminimalists Detailed show notes: minimalists.com/podcast http://minimalists.com/podcast Recorded at Earthing Studios http://earthing.com/simple.

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

• 0:06Speaker 00

  This podcast has bad words.

• 0:39Joshua Fields Millburn?

  Yes, welcome to the minimalist podcast where we discuss what it means to live a meaningful life with less. My name is Joshua Fields Milburn and joining me here at earthing studios in beautiful West Hollywood, California is my good friend TK Coleman. Let's make it a great day. Today's guest knows what the world's richest people want. According to the times, he is the quote billionaire's super fixer. Business insider called him the man who makes the impossible possible. And Vice magazine crowned him the quote luxury concierge for the super rich. Sounds to me like the perfect person to critique capitalism with us today.

• 1:22Joshua Fields Millburn?

  Please welcome back to the show, our returning champion, Ray Flimmings.

• 1:28Joshua Fields Millburn?

  Nice to see you again TK. Good to see you again. We've got a whole studio audience here today as well. We have the Statham's here. That's Jordan No More and Savvy D and Professor Sean. They all have, well, you can't see them on camera, but they don't have any hair. They all look like Jason Statham and they all look like they'd mess you up too. So we have a group chat together and I just call them the Statham's. They let me be the drummer in their band, I think. Josh thinks all white guys look alike.

• 1:57Joshua Fields Millburn?

  They do. Bueller's on the couch. Bueller designed this beautiful space that we're in right now, the studio here. And we have Rhino on the couch, one of our favorite, most hilarious creators. And my good friend Drew is here. He's the lead singer of, well, he did the soundtrack to both of our Netflix films and super talented musician. He has a new song coming out in a few weeks. And so we'll play that for you on a future episode. But he wanted to sit in today and I wanted to have a beautiful audience here as a warm welcome for our friend.

• 2:28Speaker 02

  Thank you. Thank you. Thank you. It's good to be back.

• 2:29Joshua Fields Millburn?

  Well, we got a lot to talk about today. Coming up, we're going to ponder the upsides and downsides of capitalism. We'll talk about potential alternative economic systems. We'll talk about the best ways for wealthy people to be more generous. We'll also discuss greed and freedom and private ownership. Let's start with our callers. If you have a question for our show, if you want to be on the show, we'd love to hear from you. Our phone number's 406-219-7839, or you can email a voice recording right from your phone to [email protected]. Let us know if you're a Patreon subscriber so we can prioritize your message. By the way, big thanks to our patrons. Your support keeps our podcast 100% advertisement free

• 3:13Joshua Fields Millburn?

  because sing along at home, y'all. Advertisements suck. Yes, they do. Our first question today is from Nancy in Durham, North Carolina.

• 3:23Speaker 03

  Capitalism is just an economic system, but we tend to talk about it in terms of a person's character. If you believe in capitalism, then you're a person who pulls yourself up by your own bootstraps. You are innovative and a job creator. And if you don't believe in capitalism as the best economic way of organizing ourselves, then somehow you're a slacker, a taker, someone who's willing to be satisfied with the status quo. How can we separate out this identity with capitalism and just talk about it more objectively? Thank you.

• 4:07Joshua Fields Millburn?

  Ray, la razón por la que quería que estuvieras aquí hoy es porque tuvimos una breve conversación recientemente en el episodio 501, Isaac Morehouse estaba aquí y dijo que era un capitalista orgulloso y empecé a pensar, ¿qué realmente significa eso? Y estás expuesto a algunas de las personas más ricas del mundo y tienes una visión mucho más nuanceda del capitalismo. Así que pensé que podríamos hablar hoy sobre algunos de los diferentes tipos de capitalismo. De hecho, llegando al round de la luz, preguntamos a nuestro público, cuando escuchas capitalismo, ¿qué piensas? Y me sorprendió, era como cuando digo comida, ¿qué piensas?

• 4:45Speaker 04

  Correcto.

• 4:45Joshua Fields Millburn?

  Y algunas personas podrían decir granola, algunas personas podrían decir pollo, algunas personas podrían decir un smoothie, algunas personas podrían decir broccoli, algunas personas podrían decir, bueno, pienso en comida de perro o de perro, estoy alimentando a mis perros, ¿verdad? Y así la pregunta es, cuando digo comida, ¿qué quiero decir con eso? Y eso es lo que quiero realmente entrar hoy con respecto al capitalismo, porque escuchas este término y a menudo se convierte en un cliché de pensamiento. Es como, ¡oh, capitalismo, bah humbug, boo! O, ¡sí, ¡yay, ¡hurra por el capitalismo! Y casi no sé de qué estamos hablando. Es como, quiero hablar de capitalismo, pero también de fake capitalismo. ¿Qué es el verdadero capitalismo? ¿Qué es el verdadero fake capitalismo? Nosotros hablaremos de todo eso.

• 5:30Joshua Fields Millburn?

  Y Ray, definitivamente quiero tu perspectiva, pero TK, pensé que podríamos empezar aquí hablando específicamente de la pregunta de Nancy. ¿Cuál es la mejor manera de hablar del capitalismo objetivamente sin provocar alguna respuesta emocional realmente profunda que hace que la gente se deshaga de la conversación inmediatamente?

• 5:49Speaker 04

  Sí, bueno, primero quiero validar el sentimiento subyacente expresado por la pregunta, que es, si queremos tener conversaciones más constructivas, tenemos que estar dispuestos a desenredar las críticas que podemos hacer de ideas desde las asumiciones injustas que la gente tiende a hacer sobre aquellos que expone las ideas, ¿verdad? Si eres un capitalista, estás trabajando duro, eres socialista, eres perezoso. O podemos invertir eso hacia la otra, si eres un capitalista, eres codicioso, eres egoísta, eres explotador. Y si eres un socialista, amas a todos. Pero aquí hay un experimento de pensamiento para la gente. If you're a socialist, would you hire a complete stranger to babysit your kids? As long as they could pass the test proving that they embraced the ideas of socialism? If you're a capitalist, would you hire a total stranger knowing nothing else about them?

• 6:34Speaker 04

  To take a customer-facing role in your company? If all you knew is that they believed in the principles of capitalism? I think for most people it'd be, no, I need to know something else about them. And the reason we know that is because we have this intuition that tells us, being on the factually correct side of a philosophical debate about economics and politics is not the same thing as demonstrating competence and character. Competence and character is what you choose to do repeatedly over time, even when you are tested, even when you are given the opportunity to compromise your values for the sake of ease and convenience. Being on the factually correct side of things is just a matter of having been taught well or having done research well. But we all know folks that are good human beings who couldn't debate themselves out of a paper bag to save their lives. They're highly vulnerable to misinformation.

• 7:19Speaker 04

  You wouldn't want them speaking for you because they're just not very good at abstract thinking and debate. And we all know some people are brilliant at math and science and literature, and you would never want to debate them because they'd run philosophical circles around you. But give them the first opportunity to stab you in the back, and they will do it. Character and intelligence are not necessarily the same thing. And so by acknowledging that and acknowledging that this is something that happens to all sides of any debate, we can sort of disarm and diffuse. One of my favorite podcasters, a guy by the name of Gavin Ortlund, he has a channel called Truth Unites. He's a Protestant theologian who makes a lot of videos criticizing Catholicism. That's not his only thing, but he makes a lot of videos doing that. But what I love about this guy is that whenever he sits down with a Catholic,

• 8:03Speaker 04

  one of the first things he says is, look, let's be frank about the following. There are a lot of unfair arguments made by people on my side about your position. And a lot of the things I hear being said about your position are total misrepresentations. Let's try not to do that with each other. I'm gonna try not to do that with you. And if you feel like I'm doing that, call me out on it and be prepared to show me how I'm doing it, and I'll stop. Being misunderstood, being misrepresented is a common ground that we can all stand on. And I think beginning conversations with an acknowledgement of that can go a long way at transforming the energy around it.

• 8:38Joshua Fields Millburn?

  Ray, where do you want to start here? Because Nancy's question is basically, any time I have a conversation around this topic, it becomes so emotionally charged that it seems like it's even impossible. It becomes dismissive. And it's like our feelings get in the way. We always hear this like, "My facts don't care about your feelings," right? And TK will also say that "your feelings don't care about facts." But I think there's another, like a third way to look at this. Feelings don't care about your feelings as well. When we get into an argument with someone, "My feelings are my feelings, and they must be right." It doesn't matter what you're feeling. Whatever you're feeling is probably wrong because it's different from what I'm feeling. And I just see these conversations around capitalism get so emotionally charged, we can't even start to talk about it.

• 9:21Speaker 02

  No, I think one of the things that we struggle with as people is having a systems-level conversation. And the reason that capitalism is so hard to talk about is because it is such a pervasive part of our lives that, in many ways, we can't see it. And because it's kind of defined our lives today, it has lots of effects. And those effects are second order, and third order, and fourth order. And if you open your phone, and you open Instagram, and you start scrolling, you'll see people talking about capitalism, kind of the root systemic issue, but they'll be describing like, fourth-order effects of it, right?

• 10:03Speaker 02

  They'll be talking about, you know, political discourse, the erosion of truth in modern society, and kind of all of these things. And it's really hard when you have this big, giant problem. Like, everyone has the sense that something's wrong in society, but no one can quite put their finger on it. And so, it's just emotional. And I feel like we wind up arguing about the symptoms rather than the system itself. And I think that where we're going to be able to affect real change is when we get back to systems-level conversations and really talk about it as a system. And the purpose of any system is to serve people. And, you know, we don't even know what capitalism is, I would argue.

• 10:48Speaker 02

  And so, it's very hard to have a conversation about it.

• 10:51Joshua Fields Millburn?

  What are some of the problems with the system as you see it?

• 10:56Speaker 02

  Well, I mean, I would start. Number one is really defining what is capitalism, even before we get to the problems that come for it. I definitely think we should have a long conversation around it, but defining what it is and what it means, what we're talking about, right? When we say capitalism, I think that is a necessary conversation to have to even, you know, to make any progress on it.

• 11:17Joshua Fields Millburn?

  Yeah, yeah. Okay. Well, we'll get into that for sure because during the lightning round. In fact, you know what? Let's dive into that. Well, I'm gonna take a quick step forward here into the question of the week. This is over on Patreon. The question that we put out there last week was, what's the first thing that comes to mind when you hear the word capitalism? And I think this will tie in well with Nancy's question. Now, usually we talk to our audience about this, but first I thought we'd start with some of our pithy answers today, TK. When you hear the word capitalism, what's the first thing that comes to mind? Give me some of the pithy and then we'll unpack it together.

• 11:51Speaker 04

  Yeah, my pithy was right along the lines of what Ray just said, that if you can't define it, you can't debate it, right? What the heck are we talking about? I just watched, you all know my guilty pleasure is the Jubilee one versus 20. So I just watched the Patrick Bet-David episode of one capitalist versus 20 anti-capitalists. And for the first hour, two words were used more than any other words, capitalism and incentive. And no one at any point during that time says, hold up, hold up. What do you mean by incentive? What do you mean by capitalism? No one disputed anyone's definition. No one demanded a definition. And I'm sitting there thinking, how can you guys go on like this, debating so much and no one has defined anything? Even if you do mean the same things by these words, don't

• 12:32Speaker 04

  assume it. Get there by way of argumentation rather than assumption. So when I think of capitalism, I think of all the unproductive discussions that are had about that idea and other ideas like it, just by the failure to take our time to clarify one another's position in a way that the other party would accept as a fair representation.

• 12:52Joshua Fields Millburn?

  Now, Ray, I wrote down something pithy here. It said, if you deeply desire to misunderstand someone, you will find a thousand ways to misinterpret them. And that's kind of what happens in a debate format like that.

• 13:03Speaker 02

  Absolutely.

• 13:04Joshua Fields Millburn?

  Let me find a thousand ways to misunderstand you and misinterpret you. And that way, we can't ever have the productive conversation. So where does a productive conversation start with this?

• 13:16Speaker 02

  I think a productive conversation around capitalism starts probably with Stafford Beer's definition. He says that a system is what it does.

• 13:28Speaker 02

  That is the real definition, that's the path, rather, to the real definition of capitalism, looking at the system, looking at what it does. Now, we have all of the rhetorical definitions of capitalism. We have all the historic definitions of capitalism. We have all the marketing copy around capitalism as well. But I think ultimately, if we're going to get to, you know, what is it, we will know what it is by what it does and the effects that it has on society. And I think we can, you know, we can, we can unpack that as we, as we jump in.

• 13:54Joshua Fields Millburn?

  Yeah, well, let's talk about some of those effects. What are you most troubled by?

• 14:01Speaker 02

  I think the first order effects of capitalism, which negatively impact society broadly. You hear the phrase inequality all the time, wealth inequality.

• 14:12Joshua Fields Millburn?

  Yeah.

• 14:13Speaker 02

  And that phrase, while accurate, doesn't do a good job of conveying what it means.

• 14:22Speaker 02

  Well, you know, there's this sense that, well, are we all equal? If I work harder than you should, and I deserve more, right? And so what do you mean? We should all be equal, right? I'm going to go out there and I'm, this is a meritocracy. I'm going to earn. That's not what we're referring to when we say inequality. What we're referring to when we talk about inequality as a second order effect of capitalism, a direct effect of capitalism. Inequality means today in America, the three richest people in the country, Elon, Bezos, and Gates, have more money than the poorest 50% of Americans. So three people have more

• 15:01Speaker 02

  money than 165 million or so Americans. And that hyper wealth concentration continues. So that's what we mean by inequality. And sure, those three individuals have built amazing companies and employed millions of people and have, and have certainly pumped lots of money into the economy. But you, I don't think any person would make the argument that three people have worked harder than 165 million have, or have worked smarter than 165 million have. And so there are systemic problems creating that level of inequality.

• 15:38Speaker 02

  You know, when you think about, hey, what's going on here? The reality is, depending on who you ask hypothetically, America and the Western economy is doing better today than it ever has at any point. Stock market's at or near an all time high, right? So hypothetically, it's working. But realistically, 65% of Americans don't have $500 to their names. And systems are built to serve people. And you can define a system by what it does. And so on that basis, that'd be, I think, the first of the second order effects that we'll talk about.

• 16:16Joshua Fields Millburn?

  Yeah, so I've also heard that something like 90% of people are not invested in the stock market as well.

• 16:22Speaker 02

  Of course.

• 16:22Joshua Fields Millburn?

  And if that's true, then measuring the well being of the people by the stock market is just, that's a broken ruler, basically. TK, I'd love to maybe dive into some of these because when we hear capitalism, I wrote down just a bunch of things that I think of when I hear this word capitalism, right? Sometimes I think of like individualism. I think of market fundamentalism, performative capitalism. We did a quick Instagram video about that recently. Our engineer, post-production Peter, he sent me this picture of like these massive pickup trucks. And it was like, he called it performative capitalism, right?

• 17:06Joshua Fields Millburn?

  And when you saw there was a tiny little truck right next to it that had the same sized truck bed. And is that capitalism? I don't know, but I understand, I kind of understand what you mean by that term, performative capitalism. But then I also think about voluntarism. And then I think about crony capitalism or corporatism, right? And so when we're talking about capitalism, we're talking about food, but there are all these different types of food. And when I talk about capitalism, there's all these different types of markets, of systems that we think of when we hear the word capitalism. Where would you like to start?

• 17:43Speaker 04

  Well, we got a lot of terms here and a lot of them sort of get jumbled together in discussions. I think individualism is more of a philosophy that says the fundamental unit of society is an individual as opposed to the collective. And that is distinct of individualistic philosophy, which goes hand in hand often with capitalism. But the implication of individualism is the belief that ultimately the common good, at its worst, is ambiguous and arbitrary, or at its best, it's the logical outworking of individuals pursuing their own self-interest. What's tricky about that is that the socialists will also make the argument that socialism is what's best for the individual.

• 18:24Speaker 04

  So it's often a difference in terms of like what way of organizing society will lead to individual flourishing. So capitalism doesn't have a monopoly on its advocacy of what's flourishing for the individuals, what's best.

• 18:38Speaker 02

  I just want to jump in on what you were talking about. So rightly or wrongly, Adam Smith is credited as the father of modern capitalism. And people will talk about Wealth of Nations, which interestingly is a work is kind of responsible for modern economics, certainly kind of pushing us in the direction that we are in today. But that wasn't his only book. He wrote a book before that. And his Theory of Moral Enlightenment, he wrote 15 or 16 years before. And in that book, you know, it's really interesting, he kind of gets down to human nature.

• 19:18Speaker 02

  And Smith believed that the reason we do what we do is because we are self-interested. And so later, when he talks about, you know, when you go to a restaurant, the butcher doesn't feed you because the butcher's concerned about altruism and doing things great for society, he will trade with you and feed you because he wants you to do something for him. And Adam believed even that, that when you think about the social impacts, the social good, which he certainly cared about, he believed that there was, he called it an impartial spectator. He had two big ideas, the invisible hand of capitalism or markets, and the impartial spectator. And the impartial spectator in Smith's thinking was us.

• 20:03Speaker 02

  Was us looking at ourselves and that self consciousness, being aware of how we perceive ourselves and how society would perceive us, was the reason that people would ultimately do the right thing.

• 20:19Speaker 02

  And this issue of self motivation.

• 20:22Speaker 04

  Yeah.

• 20:22Speaker 02

  Right. And self judgment as kind of an anchor or counterbalance against self interest becoming selfishness. I think is a really, really interesting, interesting point, particularly for a guy who went ahead 15 years later and articulated capitalism. You know, there are in economic circles, you know, these, these great debates. Between, you know, how could Adam Smith's two works even sit side by side? This kind of moral underpinning and capitalism both written by the same person. And I for one, you know, really, really like when these old great minds, the Einsteins and the Galileos and the Adam Smiths. When, you know, when you look back hundreds of years later and they're still right,

• 21:06Speaker 02

  that little idea that they pushed forward a long, long time ago. It's like, hmm, it still holds true more than we thought it would. Anyway, I didn't mean to cut you off.

• 21:15Speaker 04

  No, I, I think these are all good insights. And, and you're making the case that I've often expressed on this show is the importance of reading books before we were born that were written before we were born to see what sorts of ideas have stood the test of time. That doesn't mean that those ideas are true just because they've been around for a thousand years. But it does mean that they, they are influential. And to be uninformed about history is not to be uninfluenced by it. Many of the ideas that drive and govern our lives from so many different vantage points are ideas about which we may have never taken the time to think consciously about. And this is a powerful one. Self interest is kind of tricky and fun because you have a couple of things that happen in these debates that create a little confusion. Sometimes how, how do we define self interest?

• 21:57Speaker 04

  So sometimes self interest gets defined solely as the profit motive, profit being the desire to make money. Now, that's not the definition of profit, but that's typically how it gets framed. And so sometimes Smith gets understood as having argued that people are. Firstly and foremost motivated by the desire to make money. But there are different qualities and kinds of self-interest, right? The desire to not be ostracized, the desire to feel like I belong, the desire to fit in, the desire to avoid pain, the desire to survive, the desire to feel loved. All of these are elements of self-interest. And so whether we're talking about capitalism or socialism, the moment we invoke that concept, we want to be able to think about that holistically. But I do think that there are some interesting questions raised by this,

• 22:41Speaker 04

  and I want to get back into them. Just to sort of like get back on these definitions and sort of unpacking some of these concepts. You brought up market fundamentalism, which is almost like religious fundamentalism for free markets. Market fundamentalism is not just the belief that free markets are the best way to organize society or solve problems, but it's sort of like this attitude of absolute faith in the markets, that the market will fix it. And you have different positions, sort of like, you know, you have the anarchist position, but then you've got the minarchist position. And you've got different people who believe that different levels of central planning are necessary in order to serve as a balancing force or corrective for markets. But market fundamentalism is kind of like that more extreme position, if you will.

• 23:26Speaker 04

  Like, the markets will fix it. We have absolute faith that whatever hypothetical scenario you show me about some old lady who couldn't afford healthcare or some tragedy that happened, the market is still the way to work it out, and it will eventually correct it. Then you have here performative capitalism, image-based capitalism, sometimes referred to as woke capitalism or green capitalism. This is when you use economic activity to signal virtue. You could argue that all capitalism is inherently performative, but that will be another discussion. But this is where you attempt to signal to other people by the way you do business that you are the right kind of entity or individual. And you have here crony capitalism. I like this one. This is what Jean Epstein,

• 24:10Speaker 04

  one of the most articulate voices for the case for capitalism, refers to as crappitalism. And crappitalism is when there is a wedding of power with state interest.

• 24:22Speaker 02

  Such that people who might have used principles of free markets to acquire their wealth, then turn around to use that wealth to get in bed with power, to artificially insulate themselves from competition, and then exercise an undue influence on the market, thereby creating these disadvantages. This is a common critique of capitalism, and capitalists will often distance themselves from this critique, saying, "No, that's not capitalism. That's a socialistic element or a corruptive element that compromises capitalism."

• 24:49Joshua Fields Millburn?

  Ray, I think that's a great place to veer off into, is it "crapitalism"? I had never heard that term, but how perfect is that? Because I think ultimately, I was so shocked when I first started talking to you and we started having these conversations, because you were critiquing capitalism, but in this nuanced way. It wasn't just dismissing it, right? And here's the better way to do it. It has to be this other form. It's anti-capitalism, it's socialism. It seems to me, though, that your critique, and most critiques of capitalism, are about this version, this crony capitalism, this crapitalism. Because it's almost as though the assumption then is, any capitalism almost always devolves into some version of that.

• 25:33Speaker 02

  Well, I mean, if Adam Smith were alive today, and he came back and he looked at our economic system, I'm not sure if he would laugh or he would cry, but he certainly wouldn't call it capitalism. Okay? So how he defined capitalism at that time, sure. At its most simple, Adam Smith says or put forward that this would be, actually, he didn't even call it capitalism, but that's neither here nor there. The economic system he described as self-interested parties, exchanging or trading. Okay, that was at the heart of it. But it was based on the idea, one, that those trades would be equitable,

• 26:16Speaker 02

  a fair trade between parties, which we don't have today. And Adam Smith said that this system would have to exist in a nation. The name of the book was Wealth of Nations, or it's called Wealth of Nations. And he was talking about why some countries will prosper more than others. And for a country to prosper, this economic system that he was articulating needed to exist in a country with progressive taxation, meaning the rich paying more in taxes than the poor, and wealth redistribution.

• 26:51Speaker 02

  Both of these concepts, to the ears of the modern capitalists, sound like socialism, sound, you know, Adam Smith would be a pariah today in the economic system that he invented. So, yes, he believed that the invisible hand of the market, TK, would eventually solve a problem, but only if wealth was not concentrated into too few hands. And he is quite clear on this in all of his writings and his thinkings and his anti-slavery position and many positions that he held that the modern capitalist completely forgets about when they're going to get their degrees in finance and economics and talking about wealth invasion. Most of those people have never even read the book. And you know they haven't read the book because

• 27:36Speaker 02

  of their positions on capitalism and what they actually think it is. If you switch now to the modern definition of capitalism, you know, today, we think, or we say, and I think this is the modern hypothetical definition of capitalism, the modern definition is the means of productions are in private hands, right? That capital controls, privately held capital controls the means of production. Well, what, what are the means of production? You and I are the means of production, labor, humans, right? You control factories and the people that run them, et cetera, et cetera, is in private, non-public hands. And this

• 28:20Speaker 02

  idea that the invisible hand of the markets, that if there is a societal need, the markets will go and ultimately fulfill that need. The problem, of course, with the modern definition of capitalism, is that there are many things which have no value in that context. You could say that the Amazon rainforest sitting there...

• 28:41Speaker 02

  Is an externality in modern capitalism. It is of no value. And that in our modern contexts, we should cut it down for the value of the trees. Now, any sane person knows that the Amazon rainforest are the lungs of our planet and you can't do that.

• 28:59Joshua Fields Millburn?

  But we do need more boxes for Amazon, the delivery company.

• 29:02Speaker 02

  Right. But this, this issue where the system that we put in place, everything should be privately held. And we determine the value of a thing by what people are willing to pay for it. Therefore, a breathing forest, if no one's willing to pay for it, it has no economic value. These sorts of ideas are all involved in the modern sort of, kind of crazy definition of capitalism. But listen, the point, the thing that everyone is upset about and the thing that no one wants to talk about is taxes, taxes, taxes, taxes. There's no other discussion. You can't talk about capitalism. You can't talk about wealth inequality. You can't talk about any of these things until you talk about taxes.

• 29:41Speaker 02

  I don't believe that human nature changes that much. When I look back at history and I consider myself a student of history and I look way, way, way, way, way, way back at all of these different societies and cultures.

• 29:52Speaker 02

  I see the human condition time and time again, right? And listen, when you, when you really look at us and we think about our economic system.

• 30:06Speaker 02

  Next year, we will celebrate 250 years as a nation, 250 years since the Declaration of Independence in 1776. Next year, we've had the same economic system the whole way. But the first billionaire didn't exist in the world until 1957, 1958, when John Paul Getty became a billionaire. There was not one anywhere in the world prior to that.

• 30:30Speaker 02

  And the reason there wasn't a billionaire anywhere in the world is because the highest marginal tax rate in the United States of America was 94% after World War II ended. Those taxes funded the American dream that we talk about today.

• 30:49Speaker 02

  When the president says, "We want to make America great again," we are hearkening back to that era of a middle class, of an expansive America, where people could chase and fulfill the American dream, where they could taste it, where they could hold it. That dream was funded through a 94% marginal tax rate in the United States of America. This is not some banana republic. This is our own history. The death tax, the redistribution of wealth at the end of your life was 70%, 7-0%. This is how the New Deal was paid for. This is how, when 7 million young men who went to fight in World War II came back into

• 31:31Speaker 02

  the country, this is how the GI Bill was funded. This is what created the American middle class. 7 million guys got home loans out of nowhere for going to fight in a war because the wealthiest people in society paid taxes. But the wealthiest people in society supported that, of course, because there was a national identity, there was a goal, there was a thing that we were trying to be and to become. I think because we have kind of lost our direction and our goal and our pursuits, no one wants to pay taxes.

• 32:10Speaker 02

  And so, you have situations, I saw some politician today, this morning, was saying, "California is going to be the next Detroit." Of course, everything's become politicized. They'd better hope not. California is the fourth-largest economy in the world, if it was a freestanding nation. California sends $83 billion to Washington, more than it receives, every single year.

• 32:42Speaker 02

  Texas receives seventy-four, seventy-five billion dollars more from the federal government than it sends the federal government. If California was insolvent or became Detroit, it would affect the United States of America, red states and blue alike. No one could make their budgets. The issue becomes taxes. When the wealthiest people in the world can... It's still Warren Buffett, the Warren Buffett argument. Why is it that his executive assistant has a higher marginal tax rate than him? Because long-term capital gains is taxed, money is taxed differently than work.

• 33:24Speaker 02

  And the poor people can't pay all of the taxes in the nation. It's just simply not possible. There's a reason they're poor, and they don't have the money to fund all of the needs of the nation. And this is at the heart of all of the issues and all of the other ways that we might want to discuss it. They're kind of distractions and, like I said earlier, third and fourth order effects that we're talking about, not really the single kind of central issue of capitalism.

• 33:50Joshua Fields Millburn?

  PK, I'd love for you to respond.

• 33:52Speaker 04

  Oh, man, there's a lot there, man. This is good food for thought. One thing I just will throw into the pot on taxes is there's a combination of things that make people feel leery over taxes. There's the loss of vision or the sense that we don't have a common goal that would make us motivated to do that. But there's also a loss of trust because there are two sides to the tax story, right? There's what the people pay, and then there's what the government, who allegedly represents the people, do with that. And I don't know of anybody on any part of, on any side of the political spectrum who feels like, oh, the government has done a fantastic, praiseworthy job of taking its tax revenue and doing all the right things with it.

• 34:35Speaker 04

  Both parties criticize their own parties for the management of funds. And so there is a lot of trust there as well.

• 34:41Joshua Fields Millburn?

  Wait, can I ask though? Could that also cause the distrust of the populace if both parties are in order to garner favor or to garner votes? From the populace, if they're simply saying, I'm just playing devil's advocate here. But like if they're, they're saying, hey, I'm really unhappy with how the government is spending money. I'm unhappy how the government is spending money on this side. And so whoever supports you is, yes, we are also unhappy how the government is spending our money. Might that change if someone who came up and said, I'm really happy with how the government is spending money? And if that was repeated over and over, might people actually be more likely to be, I don't know, content with the way their money is spent?

• 35:23Speaker 02

  Potentially, but I would, I would, I would always argue, you know, that the systems level conversation, right? Like, like, um, let's reduce this thing to, to, to first principles. Like, sure, um, there is government waste, absolutely. But how big of a problem is it actually? What is the annual federal budget? I'm not, I'm not going to be exact from memory. So in round terms, the federal government collects about six and a half trillion dollars a year from US taxpayers, give or take.

• 36:00Speaker 02

  When you look at Medicare, Social Security, defense spending and debt service, meaning paying the interest that's due on the 38 trillion dollars of debt that we already have. When you take just those four things, no social spending, no crazy programs, no American military, Medicaid, Social Security and debt service. Alone, it's about five and a half to six trillion dollars. And the problem is, is the deficit continues to grow.

• 36:42Speaker 02

  And the power of the US's, um, the trust in US kind of debt begins to erode. Moody's has downgraded it. The interest payments on that debt is going to continue to rise. So we're at this point now where the interest payments alone threaten to force the nation to run a deficit every year.

• 37:03Speaker 02

  That's not social spending, right? Sure, the government is spending a lot of money in ways that need to be cleaned up, but you have to, we don't, we don't realize how big a trillion dollars is.

• 37:15Speaker 04

  Right.

• 37:16Speaker 02

  Right? We're not understanding that all of the social spending, Department of Education, all these things, you know, that everyone's so up in our, oh, government ways, this, that, and the other, all of those things are relatively speaking, a rounding error on the debt of this nation, and it's not a real issue. It is simply a thing to distract from the actual conversation of who is going to pay thirty-eight trillion dollars in debt, and as I said in the last time we were together, who do we owe that debt to, which is, uh, which is another very interesting systemic point for us to debate.

• 37:51Speaker 04

  Question for you, you believe that government spending in terms of its transparency is, is, is for the most part, pretty respectable and solid?

• 37:59Speaker 02

  No, I'm not going to, I'm not making the argument that government spending is good or right. I'm saying to you, if you eliminated all social spending, okay, you don't get, take everything that's going to every social program and dismantle it. It's done, it's over.

• 38:16Speaker 04

  Sure.

• 38:16Speaker 02

  We still have a debt crisis.

• 38:18Speaker 04

  Agreed.

• 38:18Speaker 02

  You know, because Medicare, Social Security, defense spending, debt is a five and a half to six trillion dollar a year problem in the United States of America. So eliminate all, like there is no other government agency whatsoever, they're all gone, forget about the problem. Where are we coming up with six trillion dollars a year? I'm saying, take the-

• 38:34Speaker 04

  I'm with you on that, but, but the reason I'm asking that question is because if I'm a business owner and all of my customers have a perception of me, and I've got airtight logical arguments for why I'm not responsible for that perception, you and I both know that wouldn't fly. At some point, I would be accountable to making myself a student of the customer and, and asking myself, why is it that even though I see myself as a great guy that's doing right by all my customers and employees, and I'm quite impressed with myself, why does everybody else see me as an untrustworthy rat? There's gotta be something I can learn from that. If everyone misunderstands- Me as being someone that's not transparent, not honest, not forthcoming about what I do with

• 39:17Speaker 04

  the money, then that's got to indicate a problem at some level with how I'm communicating and representing my own self. You don't, would you agree with that?

• 39:25Speaker 02

  Well, I agree with that in concept, but not in reality. So the analogy you're drawing seems to state that the American political system should view its citizens as its customers. And I'm stating that that's not the case.

• 39:38Speaker 04

  Only in the sense that the American citizen are the very people that it purports to serve and create value for and solve problems for. In that sense.

• 39:48Speaker 02

  Yeah, in that sense, hypothetically, we are the customers. In reality.

• 39:53Speaker 04

  In reality, they're accountable to us, right?

• 39:56Speaker 02

  In reality, well, in reality, no. America's never been a democracy, right? This is, this is rhetorical, right? Like, the textbook definition, we're a constitutional republic. But you have to remember that even when the nation was founded, forget the treatment of blacks and slaves and women. Forget those things. White men who did not own land could not vote. White men who were poor could not vote. America has never been this idea of one man, one vote, majority rule. This is all rhetorical ideas that we have in our head because, you know, we think of these things, but it is not true. It's not a, it's not a fact.

• 40:39Speaker 02

  And so politicians, customers today are who funds them, right? Which is the reason that there was this massive disconnect between the will and the needs of the people and the actual policies and laws that are passed by our governments. They are completely disconnected from the needs and the wants of people. Citizens United and these other things have put corporate influence and dollars literally above the interests of people in our society today. And so that's where the analogy falls apart, that, yeah, you're right, that if my customers were unhappy, I would want to do something about it.

• 41:19Speaker 02

  But I would contend that any politician in this nation, congressman, senator at the federal level, that their customers.

• 41:30Speaker 02

  Are running major corporations. They don't view their customers as citizens.

• 41:34Speaker 04

  And I agree with you. And I think that is the problem. Because whether we use the word customer or not, there is, there is a, this is a representative democracy, right? It's representative in the sense that the narrative we are telling ourselves is that these people are representing for, representing us, advocating for us. And that's at least the narrative that they're responsible for selling to us when they beg and grovel for our vote. They talk to us about what they're gonna do for us, the value they're gonna create, the problems they solve. So when they go and they allow themselves to be bought and, and they say, "Oh, I'm gonna be more accountable to you than the person that I sold this narrative to." There's a misalignment of incentives.

• 42:17Speaker 04

  And what I'm saying is that's a part of the story of the mistrust. To, to kind of just like tighten a belt on this, I think, I think, uh, so there's an observation that all economic systems evolve. And whenever you're critiquing or analyzing an economic system, you can't just analyze it according to one particular understanding. This observation is made by Richard Wolff, W O L L F, who is one of the most articulate defenders of socialist philosophy. So please don't dismiss this observation on account of like, "Oh, you're trying to advocate for capitalism or something." But one of the things he talks about is it's so important when we think about these terms, not in terms of like defeating people in a debate by definition. "Oh, no, no, no, man. Socialism is this by definition.

• 43:01Speaker 04

  Therefore, you are refuted by me being able to point to this. Capitalism is this by definition. Therefore, you're refuted by me being able to point to this." The most important thing in a conversation is to say, "Hey, look, whatever words you use, what do you mean by that word? What is the concept you're getting at? Okay, I don't like that word particularly. I use a different word to refer to that. But all right, I got exactly what concept you're referring to. Now let's talk about that concept and what we can do about the implications of it, the problems that arise from it and so on." I think this kind of illustrates that.

• 43:32Joshua Fields Millburn?

  So much rich conversation. The thing I love is there's no cynicism behind this. It's trying to understand the difference, and it's not two opposing positions either. It's like, let's get to the bottom of this. What's beneath this layer? Whenever I hear these conversations, I often hear like this cynical take that is just... For me, that cynicism is this hollowed-out discernment. It pretends that it's discerning, but it's actually, "Look how wise I am. I can quickly say that you're full of crap," or "I can quickly say that this is...

• 44:07Joshua Fields Millburn?

  Your position is worthless." And I don't hear any of that here. What I hear is, "Let's get to the bottom of it." And let's talk to some of our listeners here, because I really enjoyed what they had to say when we asked them, "What's the first thing that comes to mind when you hear the word capitalism?" Jay said, "Capitalism is the dream that keeps us obedient." That's really poetic, right? What is... In what ways does capitalism force us to obey?

• 44:35Speaker 02

  Well, you need to pay your rent. You need to eat. And so, if you do not have enough capital to support your life, then... You remember I said that the means of production are in private hands, and you are the means of production. And so, the way that capitalism controls is, if you don't have enough capital to support you without work, then you are the means of production, and you must go produce in order to participate in society. And again, there's no cynicism here, right? I mean, we're just... We're talking about these ideas, which I think are important. No one ever believes they are the bad guy.

• 45:08Joshua Fields Millburn?

  Right.

• 45:09Speaker 02

  No one in human history. Adolf Hitler didn't think he was a bad guy in his own mind, right?

• 45:14Joshua Fields Millburn?

  Right.

• 45:15Speaker 02

  Obviously, bad guy, but no one... You're not going to convince any capitalist that you're a bad person. Remember Adam Smith's point, that we are all self-interested. In his first book, he makes this really, really interesting point, like, you know, "Let's say you come to work and you hear about a massive natural disaster, like Sumatra on Christmas or whatever, hundreds of thousands of people killed, some great earthquake, et cetera, et cetera." That sounds horrible. You'll have a little conversation about it. Maybe you'll go make a charitable contribution. But by the end of the evening, you are back into your own life, because a quarter of a million people dead in some faraway place isn't that... Is not going to change your life for most people.

• 45:59Speaker 02

  Now, he makes a counterpoint. Let's say the next day you come to work and the doctor calls you to give you results from a test. And you've got a, you know, you're missing a piece of your pinky finger. You're gonna, you're gonna have to have it amputated. Tip of your pinky finger, there's cancer on it. They're gonna have to take the tip of your pinky finger off. You're gonna be up all night. You're gonna be talking to everybody. You'll be crying about it because that affects you personally.

• 46:23Joshua Fields Millburn?

  That's right. I would even take that a step further. If I had to make the decision where it's like, all right, Josh, we're gonna cut your pinky off and that will save 100,000 people in Sumatra. I mean, I'd still have to think of, isn't that crazy? I mean, I would have to think about that.

• 46:38Speaker 02

  I want my pinky. I mean, I don't know these people.

• 46:40Joshua Fields Millburn?

  Right. And I know in this scenario, I would chop my pinky off, but how far does that go? Is it my whole hand? Okay, maybe. Damn, is it my whole arm? Would I give my own life? And now all of a sudden, these thought experiments, it shows you how real that level of self-interest really is.

• 46:58Speaker 02

  Are you familiar with Paul Piff's work at UC Berkeley? Do you know Paul Piff? He's a researcher that has been looking at the, the behavior traits of the very wealthy. And it's a really fascinating kind of field of study. And it dovetails really, really closely to what we're discussing here today. So first is the, the rigged games study. Rig games. All right. So let's say that we all sit around, we throw a monopoly board here in front of us. And we're all sitting here together.

• 47:36Speaker 02

  And the researcher says, TK, you are gonna start with double the money. You're gonna roll first. And each time it comes to you, you're gonna roll twice. Okay? And everything else will just be like a normal game of monopoly. Now, who's gonna win that game of monopoly?

• 47:56Joshua Fields Millburn?

  Almost certainly TK.

• 47:57Speaker 02

  Almost certainly. He is going to win that game. So we start playing.

• 48:02Joshua Fields Millburn?

  Josh had a lot of doubt in my conversation.

• 48:04Speaker 02

  We start, we start playing the game.

• 48:06Joshua Fields Millburn?

  He might be late for the game though.

• 48:09Speaker 02

  We start playing the game. Almost immediately, he pulls a hit. He started with twice the money. He rolls two times every time you roll, he pulls a hit. Do you know what he starts to do?

• 48:23Speaker 02

  The winner of the rigged game begins to eat more snacks, begins to talk shit. And at the end, when everyone is polled about why he won, we will all say, he won because he had built in advantages in the game. He rolled twice, he started with more money, et cetera. And he will say that he won because of his strategy. He will say that he outplayed us. He will say that it's his own smart. So this is, again, I'm not impugning anyone. This is human nature. It's been studied. Winners of rigged games never admit to themselves that they won because the game was rigged.

• 48:59Joshua Fields Millburn?

  And even if he had a better strategy, you're saying that isn't the, the

• 49:03Speaker 02

  That's not the reason that he won, right? The reason that he won is because he was rolling twice and started with twice the money and all of those other advantages. And Paul goes even further. When great wealth actually encourages and creates observably more narcissism, more self-interest. And it is a, I'll let you debate whether it's a feature or a bug, but it is there that people have to be on guard against. And so in our practice, you know, one of the things that we're doing with people is addressing this success condition where, you know, it can have these ill effects. I would tell you that most ultra wealthy people I know are concerned about these same issues that we are.

• 49:48Speaker 02

  Most very wealthy people that I know understand that we need a functioning society or their wealth means nothing. Most people want to solve this, but it is a big hairy systemic issue. The idea, the vilification of the rich, I actually think is misplaced. And the reason, none of us, Bezos, Elon, none of us created the system. We were all born into it, right? We, boom. And society said, here's what you're supposed to go do.

• 50:21Speaker 04

  Go be a job creator, go build a business, go build an entrepreneur. Let's say that the system is wrong. Okay, if the system's wrong, or let's say the system needs to change, are the people playing the game wrong for playing it? I don't think we're gonna win that argument. I don't think that's effective. I don't think that's going to produce a positive benefit because they were all playing the same game that we were all told to play our entire lives. And if there needs to be more compassion, if there needs to be changes to the system, I don't think you're gonna affect that change by wagging your finger in the face of the people who played the game and want it as structured. I don't think that's the path.

• 51:05Joshua Fields Millburn?

  Those changes can't feel punitive. All right, y'all, that is just the intro.

• 51:10Speaker 04

  Wait.

• 51:10Joshua Fields Millburn?

  No, we got so much more.

• 51:12Speaker 04

  Just 30 seconds on this. 30 seconds, please.

• 51:16Joshua Fields Millburn?

  We have another hour. I was gonna let you talk way more, but okay.

• 51:20Speaker 04

  Just 30 seconds on this. I'm not gonna temper him, I'm gonna agree with him. The vilification of the wealthy has another side of the coin that creates just as much damage, and that's the deification of the wealthy. So there are many people who could make significant advancements in improving our quasi-capitalist system, but out of a cultural commitment to defending the wealthy at all costs, they actually subscribe to anti-capitalist ideals even though they say they are capitalists. So when people criticize Elon Musk, for instance, his wealth is significantly subsidized. This is not a guy that just got rich off the free market. And you can have whatever judgment you want to make about that, but capitalists will come to his defense because he's wealthy, because he's rich, and thinking that I gotta

• 52:04Speaker 04

  defend this guy because he's rich and being rich is for capitalism. And they kind of hurt their own position in doing that. So deification is just as terrible as vilification.

• 52:14Joshua Fields Millburn?

  I've gotta amplify. I know you're hating this and trying to move on. 30 seconds, that was the promise, right? 30 seconds. All right. Paul Piff's work, going back to it, this is fascinating. I know Dat Piff, but I don't know Paul Piff.

• 52:24Speaker 04

  UC Berkeley researcher, just a fascinating field to study. It's all about like the behavioral aspects of wealth.

• 52:29Joshua Fields Millburn?

  Okay.

• 52:32Speaker 04

  Poor people.

• 52:34Speaker 02

  Made to feel rich. So if you're poor and you are made to feel rich via positional concerns, i.e. you are richer than poor black people or immigrants or whatever group that you want to denigrate, are spurred to be fiscally conservative capitalists to preserve their position. It's an interesting thing. Whereas rich people made to feel poor, go the other direction. And this has all been studied and modeled.

• 53:11Joshua Fields Millburn?

  Yeah.

• 53:12Speaker 02

  But it has really, really interesting implications for the people that you said are deifying the wealthy. And I mean, listen, there's only 3,000 billionaires in the world. Only 3,000.

• 53:24Joshua Fields Millburn?

  Yeah.

• 53:26Speaker 02

  The millions and millions and millions and millions and tens of millions of people supporting them fall into this other definition that Piff has been talking about.

• 53:35Joshua Fields Millburn?

  So much more to talk about, y'all. Real quick, for right here, right now, I want to talk about a couple of things going on in the life of the minimalist. And we'll, I still have a whole half a page here and we've got two more pages to get to, page two and page three. But right here, right now, our next Sunday Symposium is, ooh, this weekend, September 28th. We just released 25 tickets for that today. If you want to see us in Los Angeles, Ray's been a few of those in the past as well. If you want to see us at Sunday Symposium, sundaysymposium.com. Grab your tickets while they're still available. When it sells out, if you can't get your ticket, put your name on the waitlist. We'll let you know when more tickets open up. Also, TK's Clutter Counseling Calendar is now open for next month.

• 54:19Joshua Fields Millburn?

  You can book your clutter counseling session over at theminimalists.com. Just click Counseling at the top. Could be emotional clutter, physical clutter, capitalism clutter, apparently. We got a lot more to talk about, y'all. But first, here's a quick insight from one of our listeners.

• 54:33Speaker 05

  Hi, this is Evelyn calling from the Netherlands. I've just listened to episode 500 with Terry, who's a AAA member for over half a decade. And I think that's awesome. How her parents took care of her that way. Very loving. And even though I agree with everything that's said on the podcast about researching why she wants to keep this, why you're attached to it. It's always good to look at it that way and see how you can develop from that and learn and grow. But I also have a simple tip

• 55:14Speaker 05

  in case she still wants to keep on holding on to the AAA. Because the problem was there are two subscriptions, hers and her husband's. Probably her husband is not as attached to that membership. So why doesn't she write him on her account? And then he can let it go. This way you can hold on to everything your parents gave you and the feeling that you're still supported by them. They even support your husband now. Hope this helps. Thank you, Minimalists, for all the good work. I love listening to your shows. It's very inspiring every time, so keep going.

• 55:59Joshua Fields Millburn?

  TK, that feels obvious. I don't know why we didn't think of that simple insight on that. We were like waxing philosophical with me, you and Nicodemus for like 15 minutes trying to help her out. And it's just like, hey, why don't you just have your husband let go? It's sometimes it is that simple. That was brilliant. And we were tripping over our brains at some point. For anyone else who has a listener tip or insight about this episode, we'd love to hear from you. Send a voice memo to [email protected] so we can feature your voice on the show. Up next, page two and page three. We got a lot, lot, lot more to talk about, y'all. But first, let's take a quick pandyglation break. We'll be right back.

• 56:41Joshua Fields Millburn?

  All right, y'all, that's like the first 29% of episode 506. We'll see you on Patreon for the full Maximal edition with Rey Flemings, which includes answers to a bunch more questions. We talked about, is minimalism the opposite of capitalism? You know, capitalism is more is better, but minimalism is less is more. What does, what does that really mean? Can they work, can they cohere together? Can they live in the same universe? Also, we talked about, well, the differences between capitalism and socialism and communism. And Ray talked to us about what a post-capitalist world might look like. Oh, yeah, we talked about advertisements, too. Are advertisements a tax on the poor? Some more about healthcare

• 57:23Joshua Fields Millburn?

  in here as well, and so much more. We'll see you on Patreon for that. If you subscribe to our private podcast over there, you get access to all of our Maximal episodes, including all the archives, all the way back to the very first episode in 2015. It's a decade of podcast archives. Plus, you can listen on Apple Podcasts or Spotify or your favorite podcast app. The link to Patreon is down in the description. And that is our minimal episode for today. Big thanks to Earthing Studios for the recording space. Big thanks to Rey Flemings for joining us today. Come on, y'all. You can check him out on Instagram. We'll put a link to that in the show notes. Also, we're working on something together real soon, so stay tuned for an announcement there. On behalf of Ryan Nicodemus, TK Coleman,

• 58:07Joshua Fields Millburn?

  Post-Production Peter, Spire Jeff, Inspired Dave, Jordan No More, Professor Sean, Savvy D., and the rest of our team, I'm Joshua Fields Milburn. Oh, shout out to everyone on the couch here today as well. Jordan No More is on the couch, Savvy D. is here, Professor Sean, but we also have a studio audience. Beulah is here, and so was Rhino and Drew. Shout out to them. My name's Joshua Fields Milburn. If you leave here with just one message, let it be this: Love people and use things, because the opposite never works. Thanks for listening, y'all. We'll see you next time. Peace.