Live interview: Marc Andreessen and Reid Hoffman, Co-Founder of LinkedIn | Code 2017

00:10
both for a long
00:13
many many debates with each of them is
00:16
really one of them named Marc Andreessen
00:19
for a long time now so let’s bring them
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out Marc Andreessen and Reid Hoffman
00:24
[Applause]
00:31
you don’t
00:33
oh hello so I you know he was Marc
00:39
Andreessen has this habit of texting me
00:41
really rude things almost continually
00:42
and while I was sitting backstage within
00:45
10 feet of him he was tweeting at me
00:46
about that last talk so what did you I
think it’s very important because I
think Facebook is sucking the life out
of us
so what do you think that’s the
opening question outstanding uh so it’s
just sitting facebook director I think I
did I politely decline to answer
but oh
me let me jet let me generalize out so
this is something that one hears about
01:07
the internet a very son that’s the one
01:09
hears about the internet a lot so we
01:11
start by saying that that gentleman I’m
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sure he’s doing fantastic work and he
01:14
clearly means well I really really
deeply disagree with everything
he just
said and the reason is because not just
because I had some role in creating the
whole thing but but a friend of mine Oh
Cronin who works in VR and is the
advanced thinker on these things has a
term he uses called reality privilege
and so it’s a view from the from the box
seats it’s the view from it’s a view
from places in the world that’s exactly
the kind of you get from places in the
world in which there are super rich real
world experiences to have right and so
you grow up an upper-middle class
community probably on the coast you have
these incredible schools you have these
incredible and rich activities you have
all these after-school activities
you’ve
always incredible people to talk to you
go to a college campus you get to you
know you get to hang out with all these
incredible super geniuses for the point
zero zero one percent of the population
of the world who gets to do all those
things then this internet thing is a big
step down for everybody else the
Internet is a giant step up right most
people
don’t have that level of reality
privilege like most people grow up in
places where there’s a much higher level
of what you might call intellectual
deprivation there’s just not that many
people around to talk to there’s just
not that many interesting things being
discussed there’s not that many great
experiences to have it’s hard to learn
new things the schools aren’t good I
mean all kind of you know most kids in
the world don’t even go to school like
or go to school up to the grade four
grade six to grade eight
it just can’t
progress beyond that point because
there’s there’s nothing locally there’s
there’s there’s just no local system
infrastructure or community to be able
to engage on ideas and so the internet
represents a giant level up on all those
topics for most the world and I think
it’s a fantastic thing
okay well then find snapchat for
everybody so read you like to oh well so
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look I think that it’s it’s correct that
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there is various forms of kind of call
it commercial system biases to come out
which is companies try to say look when
you want to occupy a bunch of time so we
try to figure out how to have that time
be occupied
and this is the similar true
this range is everything from the
agriculture industry which says will eat
more sugar like you have these
commercial biases the whole way through
and we adjust them now that being said
the overall system is better and we can
tune it right and so I think that the
one of the other things frequently is
not realizing there’s things you can do
to change for more of the that kind of
the good and they and and the bad and
these things and and obviously I am less
focused at the moment on questions
around the auto play
or kind of
equivalent and I’m more focused on
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questions about like how do we get to
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discernment of truth and how do we get
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like you know truth media and what is
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this whole fake news and all you know
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facts and all that kind of stuff and
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that is I think a much more deep issue
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that I’m focused on at the moment well I
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think one of the things that one of the
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reasons I wanted to have these two was
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one because you make investments you
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change companies you decide you make a
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lot of decisions that impact other
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people too you’re you’re super
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argumentative and debating about what
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where that’s going you know where it
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happened and I wanted people get a sense
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from both of you of how where innovation
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is going how it’s going because you’re
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in none in charge of it but very
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influential to the process both of you
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in different ways so let’s start on that
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idea that you just talked about which
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brings in all of socially I’m not going
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to pull out facebook but at all social
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media the idea is something I’ve been
railing on recently for some reason is
that responsibility the social
responsibility the the civil
responsibility of social media companies
and other companies in Silicon Valley to
not to stop pretending these platforms
are benign
so as someone who’s created
these platforms each of you each of you
is on your part how do you look at them
now because I think they’ve morphed in
ways some people think social medias
become weaponized some people think
other things but that that take mark and
Marco Decker Brady’s been talking about
this a lot the idea of the
responsibility so how do you look at
where we are right now
for Silicon Valley why don’t we start
with you mark Ari how do you look okay
05:02
I’m happy to start okay look so I think
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that the question is is that we had
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presumed that broad brush that most
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people could kind of make assert a ssin
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of truth within their kind of normal set
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and I think actually in fact it is
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somewhat hackable it’s it’s filter
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bubbles is one of the things that people
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talk about a lot in the valley and kind
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of how do you make sure that you’re not
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blinded by it you have communications
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that go across that there’s questions
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about assertion of you know what is the
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most relevant fact or in you know I
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don’t think there is any such thing as
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an alternative fact I mean I think
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that’s that’s that’s that’s George
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Orwell and and Aldous Huxley speak but
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the but I think that the question is
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okay how do we help people figure out
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better guideposts to the truth because
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simply being as part of the feed on the
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screen sometimes is treated as too much
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of that must be true and so what I think
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is good is is I think the whole industry
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and I’ve been part of a number of
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conversations about ok what are the
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right ways to do that and part of the
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reason why they try to say it’s more
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platform I don’t know if it’s trying to
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say it’s benign is they’re trying to say
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we’re not trying to impose a point of
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view
we’re trying to help you get to
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truth oh it’s kind of classic like what
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is the algorithm part of it and and so I
06:23
think that there’s a lot of thinking now
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about like what are the different ways
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we can do that one of the things that I
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think is is important is perhaps
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building that out of the kinds of things
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we trust like we trust other people and
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can we get to some kind of version of ok
06:39
I know this kind of information is much
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more contentious there’s a lot of people
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who disagree with it this kind of
06:44
information is is something that I can
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rely upon more and I think we need to
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get to that kind of scoring system and I
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think we need to make it simple enough
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that it helps unify discourse across the
06:54
country how do you look at this so I
06:57
think truth has become shorthand for
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things that people on the coasts believe
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ok and fake news or false whatever
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alternative facts has become shorthand
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for people things that people in the
07:06
center of the country believe I think
07:07
this whole topic is gone completely off
of based on how in the wake of the
election so if you read the
coastal press which is generally
spectacular job I think I’m covering the
election last year but if you just read
the press in aggregate
where all the
stories the overwhelming thing that you
were carried away with was there is no
way on earth a Donald Trump can win this
election right it’s impossible you did
your the fantastic editor of the New
York Times up here on stage today they
had the day of the election they had
Hillary that morning at 92 92 percent
outs winning
election I saw the 92
percent out so it actually turned out if
you actually wanted to if you actually
wanted last year in 2016 to read the
story of the election actually get the
truth you read breitbart
now nobody
wants to hear that because we all like
have concluded that right Bart is like
absurd right-wing propaganda and that
somehow you know the tradition of the
coastal press is somehow the truth but
like it just like de bossed early last
year that was not true
so I just think
we all just need to take a step back on
this idea that there’s absolute truth
and that somehow we somehow have some
sort of monopoly or preferential access
07:58
to it and the rest of these people kind
07:59
of don’t understand anything
by the way it’s a surefire way to lose
elections because if Democrats are ever
going to lose elections are ever going
to win elections again in the center of
the country in the south of the country
they have to show up the some message
other than you’re all a bunch of morons

that’s not going to work that’s not
that’s not what the point is are these
you can split this and that is the
message yes I think that’s what’s being
heard yes but that’s an easy shorthand
way of saying no matter what they say on
the left though either coast is untrue
you can say untruth to people and get
them to vote a certain way
I mean
there’s it’s very you know you know if
you want if you want if you like your
health care plan you can keep it
right
right Obama 2008 right Obama care like
how’s that how’s that well I’m gonna
come in a close I’m gonna quote I’m
gonna close Guantanamo on my first year

in office you do it like for some reason
but the fact that politicians break
promises to us is not it’s not a very
big if you read the press coverage of
those promises at the time they were
presented as truth they were presented
as yes these are absolutely things that
are going to happen like there was there
were reams of coverage around Obama care
of how well it was going to work right
for news coverage over what is the
responsibility these platforms do they
have any because because Dean would say
no he said no they’re just there as
platforms he didn’t he thought the New
York Times that our responsibility they
necessarily don’t do you imagine all the
all these technology platforms have any
social responsibility mark has been
talking about it a lot he’s been
visiting lots of the country he’s been
petting livestock quite a bit

which is nice do you know how fluffy
cows are that they are apparently how’s
our super high I have been around many
cows I am aware of cows but how do you
how do you look at that responsible
because everyone seems to be visiting
doing that kind of thing they are in
Silicon Valley how do you look at their
is there a social responsibility for
this technology now we’re all going
where I grew up I know it’s amazing
thing I’ve ever seen oh and you left
there not going back so I’m gonna
frustrate I’m gonna I’m gonna frustrate
I’m just not gonna I can’t I’m sitting
back for Facebook
I need a wet face but
I talked about that Facebook but just in
general like as technology evolves do
you think that Silicon Valley needs to
have more of a social conscience so I
think it’s definitely a good idea for
businesses to have social conscience and
again this is where I would say I
believe there is much more but it’s
become very trendy to claim that Silicon
Valley doesn’t have a social conscience
10:07
and it’s just the default assumption is
10:09
that all these companies are doing
10:10
horrible things all the time and I just
10:11
don’t think it’s true okay all right I
10:13
don’t think the situation is anywhere
10:14
near as polarized as people are
10:15
presenting it well people liked it but
10:17
by the way Silicon Valley just if I
10:18
could from Silicon Valley people Cuba
10:21
lead a very much good and you will so
10:23
two years ago two years ago two years
10:26
ago the conventional wisdom right around
10:27
or much of the rest of the country and
10:28
that you read actually frankly a lot of
10:30
the press coverage in Silicon Valley was
10:31
it’s this hotbed of like these crazy
10:33
libertarians like it’s these crazy
10:34
extreme outlier like you know fringe
10:36
elements and of course our friend Peter
10:37
was kind of always kind of held up as a
10:40
good friend Peter a very good friend
10:42
Peter actually was held up as kind of
10:44
representative of the valley right a
10:46
funny thing happened last year which was
10:48
it turns out that was fake news okay it
10:51
turns out that was not true in fact it
10:52
turns out the opposite is true which is
10:53
the 99.999% of so look about last year
10:57
voted for Hillary Clinton supported
10:58
Hillary Clinton donated to Hillary
10:59
Clinton like it was over it was like the
11:01
money difference I don’t know is like
11:02
some giant multiple money difference
11:04
basic is nobody nobody nobody here Trump
11:05
and so the valley not whole is it as
11:08
well by the way may point out you
11:09
tweeted I’m with her correct that is if
11:11
it is true I well I will concede to that
11:12
okay I subsequently believe Obama
11:14
subsequently deleted all my tweets
11:16
including that look after that okay um
11:18
so what about it I think Silicon Valley
11:21
not only has has a real sense of social
11:23
responsibility if anything Silicon
11:24
Valley’s all the way over on the other
11:25
side
11:26
silk valley is extremely left-wing
11:28
extremely liberal and actually think
11:30
this is now this is become part of the
11:32
problem it’s now you have the other
11:33
version of the problem which is actually
11:34
I
11:35
it’s really hard for a lot of people in
11:36
Silicon Valley even articulate the other
11:38
side at this at this point it’s hard to
11:40
even articulate the case for voting for
11:41
Donald Trump I think it’s hard to
11:42
articulate what people in the Midwest in
11:44
the south are thinking and I think this
11:45
polarization thing it’s the general
11:47
problem that I was talking about earlier
11:48
but I think that I think the valley is
11:51
part of the Coast polarizing from the
11:52
center of the country to a much greater
11:54
extreme than we’ve ever seen in our
11:55
lifetimes all right now and it this does
11:57
not left unchecked this does not have to
11:59
good places okay this is great because
12:00
you didn’t want to talk about politics
12:01
at all but great okay so you have been
12:04
very active yes in that left-wing cabal
12:07
apparently and that’s the way we’ve all
12:10
it’s it’s like a way it’s like nearly
12:12
everybody know it’s a cabal so talk
12:15
about what you’re doing cuz I think
12:16
people are people are looking to you lot
12:19
everyone says we’ve got to get Reid as
12:20
the leader of this though yes but I do I
12:23
do I don’t ya know so talk about what
12:26
you’re doing precisely with Mark Pincus
12:27
and others yeah so mark who’s here in
12:30
the audience he and I started talking
12:32
years ago about how do you essentially
12:34
try to create consumer no technologies
12:36
to help shape a kind of pro-business and
12:40
also Pro kind of social values future
12:42
and how do you put that together into a
12:44
moment because I actually think part of
12:45
the whole thing is to get the bridge
12:47
building to make the right thing and I
12:48
think part of the social responsibility
12:50
for these growing strength of tech
12:53
platforms is to make that happen so I
12:55
think there is I think there is
12:56
responsibility I think it’s a growing
12:58
sense of it and I think people are
12:59
trying to figure out what it means and
13:00
how to operationalize it the right way
13:02
and then personally you know it’s
13:04
everything from obviously part of the
13:05
question that that that led to the
13:08
election of Donald Trump is there’s a
13:10
lot of people in a number of states that
13:11
are feeling in pain they worry that
13:13
their children have less good futures
13:15
and they had there is you know kind of
13:18
serious opioid epidemics and a number of
13:21
different states and and regions and
13:23
they say look these need to be fixed
13:25
don’t tell us more of the same tell us
13:27
how we have opportunity tell us how we
13:29
make that happen and I think you know
13:30
part of the thing about being invented
13:32
being problem solvers you know because
13:34
that’s part of what we try to do with
13:35
technology and businesses and so it is
13:37
we should do more of that now I think
13:39
another part of it is the earlier thing
13:40
is I do think we have a problem
13:42
I think the fake news thing is actually
13:44
levelled both ways like I don’t think
13:46
it’s a the coast saying the mid
13:48
Midwest I mean you’ve got your president
13:50
saying CNN is fake news etc etc I mean
13:52
you know you have the erosion of these
13:54
kinds of institutions and I we have to
13:56
be able to talk but if you can’t have
13:58
some basis for conversation which says
14:01
okay this is what we think truth is this
14:03
is where we think we should be going it
14:05
very difficult for democracy to work so
14:08
you know it’s everything from the kind
14:10
of win the future this is this
14:13
organization yes that WTF WTF with a
14:16
deliberate you know kind of on I see
14:18
what you’re doing yes yeah uh I find it
14:22
juvenile but go right ahead
14:23
Oh what we specialize in Juma I know
14:25
that no believe me after many years of
14:27
covering all of you like um and so I’m a
14:31
matter of fact actually one of my most
14:34
favorite theories of the evolution
14:36
humanities in the Otton II right we were
14:37
born early and and that plasticity and
14:40
ability to learn is is key so and so I
14:43
think there’s a whole stack of things
14:45
and I think some of it is like what is
14:46
the future work look like I think some
14:48
of it is the question of how do we get
14:50
communication channel how do we get to a
14:51
rebuild of here’s some kind of
14:54
communication like one of the projects
14:55
that I’ve funded at the MIT Media labs
14:57
called core Co which is done has done an
14:59
analysis through the Twitter firehose of
15:01
how fragmented the discourse is well how
15:05
do we get that discourse somewhat less
15:06
fragmented because with that with
15:09
fragmented discourse of course you end
15:10
up with you know kind of complete like
15:13
different planets no it’s a hellscape
15:15
out there but go ahead yeah so any with
15:17
that but that’s the well and then
15:18
there’s a whole question about how these
15:20
things get hacked by you know autocratic
15:23
hostile actors right and you know one of
15:26
the things that we have to pay attention
15:27
to is it is not necessarily purely just
15:30
the diversity of humanity that’s playing
15:32
on it but there are people who have
15:34
political aims that may be investing and
15:37
you know I’m really interested to see
15:38
what will emerge out of you know kind of
15:41
Russian and foreign power influence on
15:43
trying to hack social media because
15:45
that’s that’s kind of a key issue and I
15:47
think actually one of the things that
15:49
you know Brad Smith at Microsoft called
15:52
for that I think is real interesting is
15:54
how do we get to a Geneva Convention and
15:55
cyber I think that’s actually an
15:57
important thing to to look at happening
15:59
because part of that is what
16:02
happen with these things being hackable
16:03
a little bit like they talk just before
16:05
us your attention can be hacked in ways
16:08
that it isn’t just code hacking this is
16:11
just cyber but it’s kind of a question
16:12
of what you presume to be true and and
16:15
you know we want a vibrant democracy we
16:17
have to try to to get to a point so
16:20
we’re having rational conversations and
16:22
we’re actually using evidence and
16:24
argumentation to decide X is true and Y
16:26
is not right all right I want to get to
16:28
where innovations going think that’s
16:29
really what investments is but are you
16:31
you investing a lot of your money in
16:33
this I’m not supposed to call you a
16:34
certain thing of the left but what are
16:36
you investing a lot of money do you want
16:38
to run for office
16:39
definitely not run for office why well
16:42
look I I prefer the partnering board
16:47
member investing that’s one of the
16:49
reasons that guy behind it yes yeah I’m
16:51
guy behind you of LinkedIn the
16:53
smoking-room yes yeah yeah role model
16:56
for elbows who didn’t get the X Files
16:59
right yeah and so and then but I’m
17:05
vesting a bunch of money I’m trying to
17:06
actually facilitate conversations trying
17:08
to facilitate what the right kinds of
17:10
ideas are like what are the ways that we
17:13
can make sure that we have you know
17:15
vibrant economic ecosystems and
17:17
middle-class jobs across the country
17:18
which my network ultimately a lot I’d
17:22
say thus far is probably millions
17:24
millions but hundreds of millions you
17:26
think this is it could get there could
17:27
get there all right so let’s talk about
17:29
where and Mark you’re not running for
17:32
office I hope okay I would not advise
17:35
thank you can you imagine anybody voting
17:36
for me yes I don’t I might just as a
17:40
joke separate you got to oh if I run
17:43
I’ll take the sarcastic alright so let’s
17:46
talk about innovation where it’s going
17:48
you guys have been around forever
17:49
there’s been a lot of different
17:50
investments and periods of time and
17:53
things like that and it is related to
17:55
jobs the future of jobs let’s start with
17:57
there how do you look cause I think to
18:00
me it seems like Silicon Valley is doing
18:01
a lot more serious thought about
18:02
investing beyond into the into it into
18:05
the next era cars automation robotics
18:08
each of you want you start Marc talk
18:10
about you think of the most last time
18:12
you were here you’re talking about
18:13
software eating the world
18:14
talked about a wide range of things how
18:16
are you thinking now about investments
18:18
yes it’s interesting we have two sectors
18:21
two different kinds of economy in the US
18:24
or do two different kind of categories
18:25
of sectors divide them in one might call
18:27
the fast sectors and the slow sectors or
18:29
the fast chain sectors slow chain sector
18:30
so the fast chain sectors are sectors
18:32
like retail transportation media in
18:35
which technology has had a huge impact
18:37
software is eating those sectors there’s
18:40
massive change happening in those
18:41
sectors massive productivity
18:42
improvements as measured by productivity
18:44
which is how economists measure the rate
18:46
of technological change by the way Janak
18:48
churn in in jobs right turn in obviously
18:52
media and retail and you’re in BuzzFeed
18:54
you’re in a bunch of yeah yeah exactly
18:56
right and in lots of debates about the
18:57
nature of that churn by the way however
18:59
along with that rapidly falling prices
19:01
right so the prices of basically
19:03
everything and reaching or as if the
19:05
experience everybody has an Amazon
19:06
customer prices in retail prices in
19:08
media with all the free media and
19:09
internet and prices in transportation
19:11
are going to fall you know dramatically
19:12
with self-driving cars and so very
19:15
rapidly falling prices but like a big
19:17
and then a big concern of where the jobs
19:19
going to come from so that’s part of the
19:21
economy the other part of economy is
19:22
what you might call the slow change part
19:24
of the economy which is all the sectors
19:25
in which the opposite of that is
19:27
happening and so these are sectors like
19:29
health care education and construction
19:32
elder care child care and also by the
19:35
way government so took all those kind of
19:37
the big six in those sectors the
19:39
opposite is happening which is in those
19:40
sectors we have a price crisis right the
19:42
price of all those things is rising
super fast right so that the FT had a
story today eighty eight percent of all
the price inflation in the US economy
since 1990 is attributable entirely
eighty eight percent of it attributable
to health care education and
construction
right and so what’s
happening on and the sort of the slow
change sector of the economy is
19:59
basically everything’s becoming super
20:00
expensive and if you try to buy a house
20:02
or if you want to send a kid to school
20:04
or if you need to get care for an ailing
20:06
relative you experience this and hence
20:08
all the concern around the cost of all
20:10
these things those are the sectors the
20:12
economy the technologies having almost
20:13
no impact on right software is playing a
20:15
very small role at best those are also
20:18
the sectors that have almost no
20:20
productivity growth right as measured by
20:21
economists and left unchecked those
20:23
sectors are basically just going to eat
20:25
the economy right if those if the if the
20:28
products and services in those sectors
20:29
keep rising in price they end up being
everything we pay for health care is
eating the account yeah health care
healthcare education and construction of
the big three and there’s eating the
economy fully-loaded construction costs
have doubled since the year 2000 in the
US I mean just like absurd things are
20:42
happening in real estate and
20:42
construction and so I think the
20:45
opportunity and the challenge is for the
20:48
tech industry in Silicon Valley and all
20:49
of us to go figure out how to have a
20:51
much bigger impact in the in the slow
20:53
growth sectors of the economy the slow
20:55
change sectors the economy I think if we
20:56
do that if we’re effective at it we have
20:59
the opportunity to bend the cost curves
21:00
over time and these by the way are very
21:02
very big sectors with very very big kind
21:04
of entrenched forces I play by the way
21:06
these also the slow change sectors also
21:08
happen to be highly regulated right
21:09
these are sectors of the economy where
21:10
the government plays a gigantic role in
21:12
the economics of these sectors and so
21:13
these are not easy sectors to disrupt
21:15
these are this is the big leagues but
21:18
the opportunity exists to really go
21:19
after the price curves and
21:20
systematically drive down prices in
21:22
those industries if we do that like that
21:25
may be the single biggest thing we could
21:26
do to improve quality of life for a
21:28
living that’s ordinary people we are
21:29
actively investing so super actively
21:32
investing education Udacity one of our
21:34
companies going directly after skills
21:35
acquisition doing very well with an
21:37
entirely new way to link with employers
21:39
to do skills acquisition training online
21:40
we’re very aggressively investing in
21:42
healthcare we think there’s a whole new
21:44
very interesting thing happening at the
21:45
intersection of healthcare and software
21:47
that’s just getting started and we’re
21:49
investing very aggressively on that
constructions harder you know the big
challenge that we’re all going to have
to tack on the long run is this sort of
question of cities and this question of
land use
and whether cities are going to
be allowed to get big enough where
everybody who wants to get to them is
going to be able to get to them Mayer
Swisher in San Francisco I think it’s
22:05
going to have this on the top of her
22:06
list yeah as thanks to solve oh really
22:09
so that’s the sector that’s a second be
22:10
you’re going to be my deputy of
22:12
something I’m looking forward to it yes
22:14
yes I will take that on my business card
22:16
so that’s a big one we’re also by the
22:18
way elder care and childcare are both
22:21
both are increasingly central elements
22:25
to the economy huge employers in both
22:27
fast rising sectors we have a company
22:29
honor that I’m involved in that’s trying
22:30
to come up the fundamentally better way
22:31
to orchestrate whole process go right
22:33
here mean what about you know so
22:36
slightly different division so I think
22:39
about things that are kind of classic
22:41
for what we do
22:41
is kind of businesses with network
22:43
effects which can include both consumer
22:45
and enterprise sides so those are things
22:47
like you know obviously Airbnb or convoy
22:50
which is kind of over for trucking
22:52
we just recently can we still use that
22:54
uber for or is that not allowed uh well
22:57
I think we always use the version of it
22:59
I mean before whatever it’s a it’s a
23:01
it’s a quick did that for mark or prefer
23:03
X is better now because it has an extra
23:05
element of danger okay ah the lyft guy
23:10
that one guys
23:12
and so there’s a stack of those sort of
23:15
businesses which I think are the I think
23:17
we will continually design new forms of
23:20
software ecosystems that have these
23:22
network effects that organize how
23:25
millions to billions of people
23:26
communicate work you know kind of
23:29
coordinate communicate all that sort of
23:32
thing together and then part of what we
23:35
look for is what are things that are
23:37
substantially contrarian that are not in
23:40
the kind of the current you know cut a
23:41
buzz cycle right the buzz cycle okay is
23:44
AI ARV are you know etc and then what
23:50
are the things that they’re you can
23:51
actually do something that actually
23:53
might be really interesting some of
23:55
those will play out into those
23:56
industries so you know if you figure out
23:59
different kinds of of construction you
24:03
know robotics so you figure out you know
24:05
energy sources or other kinds of things
24:06
those can actually play into those and
24:08
can actually change those cloths curves
24:09
so it isn’t it is it’s a different way
24:11
of looking at it which is kind of
24:13
through the lens of these things or
24:14
defining kind of network effects
24:16
software ecosystems with people and and
24:20
devices you know kind of combined
24:22
together and then these things are
24:23
what’s kind of off the current beaten
24:26
path so what is that what do you name
24:28
something so let’s see what can i name
24:34
well i mean so you know one of the
24:37
things that we did last year is a energy
24:41
company which i can’t talk about in
24:42
depth all right what kind of energy uh
24:45
so possibly fusion possibly fusion look
24:51
Oh God yeah and and investing in that in
24:56
a new and exciting way yeah okay all
24:59
right
25:00
what about robotics so I think robotics
25:03
is generally speaking one of the areas
25:05
that everyone knows is going to be super
25:07
important everything from autonomous
25:08
vehicles to other kinds of things
25:09
so there’s AI just a ton of them like
25:12
the number of autonomous vehicles
25:14
startups is yeah they’re like yes is
25:16
like an uncountable set but it’s clearly
25:20
going to be there and then robotics are
25:21
going to be like for example when you
25:22
started saying construction I was like
25:24
oh robotics is the interesting you know
25:26
angle is the first reflex there and I
25:29
think there’s going to be a bunch of
25:30
things there which some of which we’ll
25:32
see from the big companies I think some
25:33
of it you’ll see from startups what do
25:35
you that robotic because you know Bill
25:36
Gates was just saying we should tax
25:38
robots that right and then mark injuries
25:40
is Mark Cuban is saying we’ve got to get
25:43
into it because China is going to do
25:45
this first we should is horrible and
25:46
evil but we have to we have to we have
25:48
to be really good at it yeah this is a
25:50
little bit of a paradox in there so we
25:53
should definitely tax robots right after
25:54
we get done taxing pcs okay uh which
25:56
took away all the secretary jobs all
25:58
right okay so I’d do it in that order
26:00
okay all right so so far how do you look
26:02
for Microsoft hasn’t taken us up on that
26:04
all right how do you get to what do you
26:05
imagine robotics is going oh it’s very
26:07
the content we’ll get to the job issue
26:09
in a second but you know but talk about
26:11
the sector’s automation and robotics
26:13
together and I suppose AI also gets in
26:17
that pot yeah so look so the big thing
26:18
is the big thing is happening is that
26:20
the so-called so-called AI but machine
26:23
learning the whole the whole sort of
26:24
family of technologies around Aero
26:25
machine learning and sensors right
26:26
something dramatic has really happened
26:29
something dramatic really tipped about
26:30
five years ago we’re a whole category of
26:32
things that just didn’t work at one
26:33
point all of a sudden work and so I just
26:35
I think – I think at this point there’s
26:37
just a feeding frenzy in the tech
26:39
industry in the valley to try to
26:40
experiment with every single possible
26:41
permutation what can be done with AI and
26:43
robots at every possible shape size and
26:46
description it’s I think it’s
26:48
spectacular it’s a it’s it’s one of the
26:50
biggest it’s one of the biggest booms
26:51
slash kind of exploratory let’s go map
26:54
the landscape and let’s go try all the
26:55
ideas that I think I’ve ever seen and
26:56
what do you know and we’re actively
26:57
investing what do you like about that
26:59
what do you end what are you worrying
27:00
area when you say if everyone’s pursuing
27:02
it just oh it’s a classic it’s the
27:04
Silicon Valley it’s the thing that it’s
27:05
the thing that gets everybody excited
27:06
about Silicon Valley and then it’s the
27:07
thing everybody always criticizing
27:08
Silicon Valley for which is of course
27:10
we’re going to overdo it like of course
27:11
there are way too many companies being
27:13
funded doing self-driving cars but out
27:14
of so what always happens in the valley
27:16
right the great strengths of the valley
27:18
I would argue is that when something
27:20
starts to work we over fund it like we
27:21
have way too many companies going after
27:23
this most of them don’t work but the
27:25
ones that do end up becoming very big
27:27
and important right and ultimately
27:29
valuable and so well I think we’ll get
27:30
that exact exact same result out of this
27:32
phenomenon for people who want to say
27:34
the Silicon Valley just does well pulls
27:35
over and over again there will be
27:36
ammunition to support that view but I
27:38
think out of that will come you know
27:39
defining companies of the era that we
27:41
probably haven’t even heard of the app
27:42
that are going to be on the on the scale
27:43
of the big technology win in that sector
27:45
in that sector yeah the opportunities
27:46
are very very very big do you worry
27:48
either view about the job impact when
27:51
we’re talking and I want to understand
27:52
where you look at the where you feel the
27:54
responsibility if you have any on the
27:56
future of jobs it’s the thing I’m very
27:58
interested in well so and obviously I
28:00
mean to some degree what I found in
28:03
LinkedIn was trying to help people
28:04
figure out what the skills jobs
28:06
opportunities of the future so taking
28:08
software and networks to enable that and
28:10
enable people to be able to find the
28:13
right opportunities get the right skills
28:15
get the right connections to those kinds
28:17
of things that’s actually very central
28:18
let me give you a kind of a classic kind
28:21
of thought on within the autonomous
28:23
vehicles because people frequently say
28:24
oh these home Thomas vehicle is going to
28:26
take a whole bunch of jobs there’s an
28:28
issue there and you have to get that
28:29
transition but on the other hand once
28:30
you have autonomous vehicles for example
28:32
being able to have people now actually
28:35
in fact go be able to get to work in a
28:39
much more easy way to be able to
28:40
actually when they’re in transit to be
28:43
actually doing things that are either
28:44
relaxing or working as a way of doing it
28:46
it also opens up a variety of
28:49
productivity possibilities no I get that
28:51
argument of like you can now text and
28:52
drink I get that I get you know it’s
28:54
it’s all that I drink is the funnest
28:55
thing the texting all right the but it
28:58
is that happy shiny future idea of like
29:00
oh it’s going to be so much the same
29:01
thing with AI same thing with that mark
29:04
you were just going to say something but
29:04
what I wonder about is when that happens
29:07
there are millions of jobs driving take
29:11
driving millions of jobs and I think
29:13
when Travis was on this stage
29:14
said the problem is the guy he actually
29:16
was honest compared to most people sit
29:20
by saying the guy in the front seats the
29:21
problem we need to get rid of the guy in
29:23
the front seat you know I mean which
29:24
everyone we had a sharp intake of breath
29:26
I was like yay he said it but but what
29:30
do you how do you look at that do you
29:32
feel what are you going to do about that
29:34
or do you have nothing to do about it
29:35
so it’s a fallacy okay it’s the lump of
29:38
Labor fallacy is the Luddite fallacy
29:39
it’s it’s recurring panic this happens
29:41
every 25 50 years people get all amped
29:43
up okay machines are going to take all
29:44
the jobs and it never happens so let’s
29:45
talk about cars specifically because
29:47
that that’s front center for the
29:48
conversation so when the automobile 100
29:50
years ago in the automobile went
29:51
mainstream this concern literally
29:52
existed exactly same panic happened it
29:55
happened because of all the people whose
29:56
livelihood literally was taking care of
29:57
horses right so everybody running
29:58
stables and everybody doing blacksmiths
30:00
and like the whole thing an I god what’s
30:02
going to happen cuz Ford Motor Company’s
30:03
you know in the world and nobody else is
30:04
going to have anything to do the car
30:06
then created not only a lot of jobs
30:08
building cars right it became a huge
30:10
employer right now the car industry
30:12
became such a huge employer that we had
30:13
to bail out all the car companies to
30:14
keep working like a hundred years it
30:16
went entirely in the other direction not
30:19
only that the car think of everything
30:21
else that happened as a consequence of
30:22
the car so the idea of surface streets
30:24
right paved streets emerge because of
30:26
the car right streets weren’t paved
30:27
before the car they were paid for the
30:29
car so paving streets the idea of the
30:31
idea of restaurants the idea that you
30:33
might actually go someplace to eat
30:34
something was an invention of the car
30:36
the idea of motels hotels the place
30:39
we’re in here is it exists entirely
30:41
because the automobile the idea of movie
30:43
theater is the idea of apartment
30:45
complexes the idea of office complexes
30:47
the idea of at some suburbs the entire
30:50
build-out of suburban America the jobs
30:53
that were created by the automobile on
30:54
the second third and fourth order
30:55
defects were a hundred X a thousand X
30:58
the number of jobs the blacksmith’s had
30:59
and so this goes to kind of the
31:01
fundamental kind of flaw in the logic
31:03
that they call the length of labor
31:04
fallacy which is technological change
31:06
causes productivity growth productivity
31:08
growth lets us produce more of what we
31:11
can already make with less resources and
31:13
then lets us create that that’s what
31:15
frees up the spending power to let us
31:16
create lots of new things great lots new
31:18
demand and that’s what creates new
31:19
industries and that’s what creates new
31:20
jobs and then 100 years later we look
31:22
back on it we’re like I can’t believe
31:23
anybody who’s ever a blacksmith and so
31:25
this has been the pant literally this is
31:27
like the panic every
31:28
8550 years except if you are a
31:29
blacksmith and it never comes true the
31:32
good news is you didn’t work out the
31:33
good the good news is the car company
31:35
the car companies and all of these other
31:37
industries hired huge numbers of people
31:38
and so I think the self-driving car has
31:39
the opportunity to not only improve
31:42
productivity for people in the car which
31:44
will be a huge economic boost for those
31:45
people not only has the opportunity to
31:47
save lives right over a million people
31:49
died worldwide in road deaths today
31:50
caused by human drivers and I think we
31:52
can take that very close to zero right
31:54
which is very good for both human
31:55
welfare and in terms of economic
31:56
productivity right it’s it’s like it’s a
31:58
very serious dent in productivity when
32:00
people get killed and then and then and
32:04
then and then and then all the all the
32:07
ancillary industries that end up getting
32:08
built out so as an example maybe this
32:10
whole land use thing everybody’s worried
32:11
about maybe with salt driving cars we
32:13
can start to have excerpts that actually
32:15
work which is to say another layer
32:17
around cities right further out right
32:19
they don’t qualify as suburbs because
32:21
you couldn’t tolerate couldn’t possibly
32:22
tolerate commuting in an hour hour and a
32:24
half right so people in Silicon Valley
32:25
right experiencing if you live south of
32:27
San Jose your commute now might be an
32:28
hour and a half but it’s not half in the
32:29
car driving the car if you were in the
32:32
self-driving car all of a sudden then
32:33
you’ve got you might have a huge
32:34
construction boom in all the outlying
32:35
areas around these cities and that
32:36
construction boom might hire for more
32:38
people than were ever involved in
32:39
driving cars so well and so the process
32:41
works by the way as evidence of that
32:44
after all of the technological
32:46
disruption that has everybody all
32:47
freaked out that got us to where we are
32:48
today
32:48
right unemployment in the u.s. is now
32:50
back below it’s not below 4.3 percent
32:52
right there’s if you’re living in areas
32:54
like Kentucky there’s six million
32:57
there’s six million job openings up in
32:58
the US and the the panic stories in the
33:01
press have gone overnight from oh my god
33:03
not enough jobs to oh my god not enough
33:05
workers right and The Times is an
33:07
example of Dean’s paper had a very good
33:09
story about two weeks ago on there’s an
33:10
hour crisis in Utah there aren’t enough
33:11
people to literally milk all the cows
33:13
they’ve literally run out of people to
33:15
milk the cows and so what the the jobs
33:16
crisis we actually have in the u.s.
33:18
today is we don’t have enough workers
33:18
it’s aimed in the right thing by the way
33:21
we might make that you know for this if
33:22
these immigration policies continuing we
33:24
might make that problem far worse yeah
33:25
okay you’re in for immigration very much
33:28
okay good
33:29
what are you worried about are you
33:32
worried about this at all then we’re
33:33
going to get to questions well so the
33:35
one thing I agree with most of what Mark
33:37
said there including the fact that if
33:39
you remap what is the logistics and
33:41
space
33:42
it creates a lot of different
33:42
productivity not just construction but a
33:44
lot of different ways that that may play
33:46
out and change his clusters
33:48
I think the transitions can be very
33:50
painful so I think we need to pay
33:52
attention to the pain that pain so like
33:53
example the agriculture – Industrial
33:56
Revolution actually involved a large
33:58
ugly very ugly and so while I tend to
34:00
think oh look it works out it’ll
34:02
probably work out anyway the the
34:04
question is let’s try to make it work
34:06
out in a way that’s more humane more you
34:10
know kind of the society that we want to
34:11
be and kind of not as much pain in that
34:13
kind of transition right absolutely do
34:15
you think about that pain so look so
34:17
whatever you just Blofeld or what’s
34:19
don’t let me ask so let’s talk about
34:22
what’s actually happening so these are
34:23
all hypotheticals are both actually
34:24
happening so economists have a way of
34:26
measuring the rate of technological
34:27
change disruption in the economy is
34:29
called productivity productivity growth
34:30
would we expect based on everything that
34:33
we read here and understand with this
34:34
rate of technological change and
34:35
disruption would we think that
34:37
productivity growth is at generational
34:38
highs or lows I’ll be highs right and it
34:41
turns out it’s a it’s a generational
34:43
lowest productivity growth is running
34:44
super low and economists are writing
34:46
books left right and center agonizing
34:47
over why productivity isn’t growing
34:48
faster would you expect that the rate of
34:50
job churn the rate of both job creation
34:53
and destruction in the economy which
34:55
tend to go hand-in-hand would you expect
34:56
that those the rate of churn is at a
34:58
generational higher generational low no
35:00
idea I’m not going to answer so it’s a
35:01
trick it’s a trick question as you
35:02
anticipated oh just right now
35:04
everything’s a trick question with you
35:06
the rate of job churn American economy
35:08
has been declining for 40 years and it
35:09
shows no sign of growing would you
35:11
expect that the rate of which people are
35:12
turning over in jobs individuals turning
35:14
over in jobs is increasing or decreasing
35:16
well Millennials are who everybody but
35:18
just everybody is the set by the way
35:19
including Millennials probably are
35:21
decreasing all right people are staying
35:22
in jobs longer and would you expect
35:24
because of all the disruption that we
35:25
know about would you expect that the
35:26
rate of new entrants of new companies
35:28
and existing industries is accelerating
35:30
sorry it’s decelerating okay we don’t
35:33
have the problem work at 11:00 p.m. we
35:35
don’t have I haven’t even had a Scott
35:37
yet okay that can be fixed that can be
35:41
fixed we don’t even we don’t we do not
35:43
not only do we not have the problem
35:44
everybody’s worried about we have the
35:45
opposite problem we don’t have enough
35:46
change we don’t have enough change we
35:48
don’t have enough creation of new jobs
35:50
we don’t have enough creation a new
35:51
opportunity which is what in my view
35:52
goes right back to the politics is what
35:54
leads to zero-sum politics
35:55
the reason our politics is going
35:56
sideways is not because there’s too much
35:58
changes because there’s not enough
35:59
change because people don’t see a future
36:01
because they don’t see anything changing
36:01
and I think you see the zero the zero
36:03
sum politics you see that sense on both
36:05
the left-right with you on the Bernie
36:07
left and on the Trump right I think
36:09
that’s the problem the way through that
36:10
is not just slowed down the way through
36:12
that is to speed up right the way
36:13
through that is more change more growth
36:15
more opportunity all right that’s the
36:17
path forward and so I does this goes
36:18
back to like I’m just I’m very worried
36:20
that we’ve actually gotten off and we’re
36:21
just talking about completely the wrong
36:22
thing right now and I’m hoping maybe
36:24
over the next couple yes yes we can
36:25
massage this a little bit more towards
36:27
the actual the actual crisis that we
36:28
have all right questions from the
36:30
audience right here hey guy Horowitz T
36:33
capital are you so this is a very
36:36
Silicon Valley centric view which is
36:40
where you guys are is the world changing
36:43
in that respect are we seeing more ideas
36:46
and concepts coming from other parts of
36:49
the world so I think the I think the
36:53
answer to the question in some degree is
36:55
both which is yes there’s more
36:57
entrepreneurship there’s more technology
36:58
there’s multiple areas not just
37:00
obviously a huge amount of stuff going
37:02
on in China but like when you get to
37:04
Europe it’s you know Stockholm and
37:06
Berlin and London there’s various cities
37:08
across the u.s. on the other hand
37:10
frequently that’s the is the Silicon
37:14
Valley losing some of that’s always the
37:16
class and I actually think that Silicon
37:17
Valley is persisting because of the
37:19
network effect of Silicon Valley in
37:21
terms of lots of entrepreneurs move here
37:24
the ideation moves at a very fast pace
37:26
rate because people talk to each other
37:29
about what’s what’s going on what truth
37:31
what are you seeing in autonomous
37:32
vehicles which things going to work etc
37:33
etc and that also creates something so I
37:35
think the answer is some grades yes to
37:38
the rest of the world but also
37:39
continuing very interesting patterns of
37:42
leadership from Silicon Valley are you
37:44
worried about Slocombe I was losing its
37:45
step no never never
37:47
not right now yeah well we’re doing
37:49
everything we can to kill it but as a
37:50
part we so far we keep so far we keep
37:52
missing all right we collectively the
37:55
state of California oh okay consider San
37:56
Francisco alright got it okay good I’m
37:58
gonna make it even worse for anyway
38:02
hello Manny Cuchillo

Ray Dalio: History Teaches us that Inequality is Dangerous

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45:36
the references you make here goes to 30s
and referencing cow you know the top 1%
in the 30s versus today you know you
showed this that the top 1% in the 30s
versus today you know top 1% income
share has the same amount as the bottom
90% in the last time it was like that in
the authorities are you kind of
suggesting that we may be facing what
happened in the 30s years or no yes I’m
saying you so that is why I’m saying
there are three major divisions okay
three major forces and that force which
i think i emphasized the opportunity gap
not just the wealth gap but they both
matter if you look at history across
countries across timeframes
and you say when there’s a large income
and wealth gap and you have an economic
downturn you have a dangerous fight on
your hands you have a dangerous set of
circumstances history has taught us that
you said in April income inequality is
the biggest crisis we have in America on
60 minutes and I think in recent a
couple months ago you said wealth
inequality those are the two main things
that we ought to become I’m not saying
an even more fundamental those are the
outcomes and even more fundamental is
opportunity in quality and production
inequality because at the end of the day
just like you said we have to find how
47:05

What The Ebbs And Flows Of The KKK Can Tell Us About White Supremacy Today

As long as the United States has existed, there’s been some version of white supremacy. But over the centuries, the way white supremacy manifests has changed with the times. This includes multiple iterations of the infamous Ku Klux Klan.

According to the sociologist Kathleen Blee, the Klan first surfaced in large numbers in the 1860s in the aftermath of the Civil War, then again in the 1920s, and yet again during the civil rights era.

Blee is a professor and dean at the University of Pittsburgh, and the author of Inside Organized Racism: Women in the Hate Movement, as well as Understanding Racist Activism: Theory, Methods and Research. She says the anonymity allowed by the internet makes it difficult to track just how much white supremacist activity we’re seeing today.

But despite this difficulty, she and other experts say there’s been an indisputable uptick in hate crimes — and an overall rise in white supremacist violence: Earlier this fall, a gunman shot and killed 11 worshipers at a Pittsburgh synagogue. In 2017, a clash with protesters at the Unite The Right rally in Charlottesville, Va., left one woman dead. In 2015, the shooting at the Mother Emanuel AME church in Charleston, S.C., killed nine black churchgoers. And in 2012, a rampage at the Sikh Temple of Wisconsin in Oak Creek, Wisc., killed six people.

As we consider this spate of racist attacks, we thought it’d be helpful to talk to Blee about the ebbs and flows of white supremacy in the United States — and what, exactly, those past waves say about today’s political climate.

Our conversation has been condensed and edited for clarity.


First, can we talk about the various phases of white supremacy in the U.S. throughout history — and what caused those ebbs and flows?

The 20th to 21st century Klan actually formed after the Civil War, during the Reconstruction period. Then it was entirely contained within the South, mostly in the rural South. It [was] all men. There were violent attacks on people who were engaged, or [wanted] to be engaged, in the Reconstruction state, [including] freed blacks, southern reconstructionists, politicians and northerners who move to the South. That collapses for a variety of reasons in the 1870s.

Then, the Klan is reborn in the teens, but becomes really big in the early 1920s. And that is the second Klan. That is probably the biggest organized outburst of white supremacy in American history, encompassing millions of members or more. … And that’s not in the South, [it’s] primarily in the North. It’s not marginal. It runs people for office. It has a middle class base. They have an electoral campaign. They are very active in the communities. And they have women’s Klans, who are very active and very effective in some of the communities. That dissolves into mostly scandals around the late ’20s.

Then there’s some fascist activity around the wars — pro-German, some Nazi activity in the United States — not sizable, but obviously extremely troubling.

The Klan and white supremacy reemerge in a bigger and more organized way around the desegregation and civil rights movement — again, mostly in the South, and back to that Southern model: vicious, violent, defensive, Jim Crow and white rights in the South.

And then it kind of ebbs. After a while, it kind of comes back again in the late ’80s and the early 21st Century as another era. And then there’s kind of a network of white supremacism that encompasses the Klan, which is more peripheral by this time. Also Neo-Nazi influence is coming as white power skinheads, racist music, and also neo-Nazi groups. The Klans tend to be super nationalist, but these neo-Nazi groups have a big international agenda.

Then the last wave is where we are now, which is the Internet appears. The movement has been in every other era as movement of people in physical space like in meetings, rallies, protests and demonstrations and so forth. It becomes primarily a virtual world, and as you can see, has its own consequences — many consequences. It’s much harder to track. And then there are these blurred lines between all these various groups that get jumbled together as the alt-right and people who come from the more traditional neo-Nazi world. We’re in a very different world now.

That’s a long history. You mentioned that, for a variety of reasons, the Klan in the Reconstruction era collapsed. What are some of the factors that contributed to that?

I would say two things that mostly contributed to that ebb over time.

One is the white supremacist world, writ large, is very prone to very serious infighting. Internal schisms are quite profound in collapsing white supremacists, even as an entire movement, over time.

What’s that infighting look like? How racist to be?

No, no. It’s almost always power and money. So, for example, the ’20s Klan — I say “Klan” but in every era there were multiple Klans, they all have different names, they all have different leaders — they are trying to extract money from their groups, and they are all fighting about money …. and then over power, and who controls the power, because white supremacy groups don’t elect their leaders right away. To be a leader just means to grab power and control. So there’s a lot of contention in these groups of control.

It’s not ideas. Ideas aren’t that central. They have these certain key ideas that they promulgated — race and anti-Semitic ideas — but the fine points of ideological discussion don’t really occur that much in white supremacist groups, nor do they get people that agitated. It’s not like in other kinds of groups, where people might have various versions of ideas, versions of ideologies. [The Klan] just have kind of core beliefs. But they do tend to fight over ideas for money, power and access to the media.

So that’s the fighting. The other thing is, in different waves of history, there are prosecutions, either by the police or civil prosecutions that collapse groups and movements. Sometimes, there’s kind of a blind eye to white supremacist organizing, but at other times there is really successful either civil or state prosecutions of these groups that do debilitate them.

How does the longevity of white supremacy or these [hate] groups coincide with who has political power?

It’s very hard to create a generalization here. Certain groups, like the Klan, tend to rise and fall based on the threats to who is in power. The 1870s Klan [was] based on the Southern racial state formed during slavery being threatened by Reconstruction. In the 1920s, the idea was that political power [was] being threatened by this wave of immigrants. The 1920s Klan [was] very anti-Catholic, as well as racist and anti-Semitic. Part of this anti-Catholicism [was] based on the idea that Catholics were going to start controlling politics as well as the police.

There’s some really good analysis by some sociologists that showed that the Klan appeared in counties where there was the least racist enforcement of the law. Because in counties where the sheriff and the county government was enforcing racist laws, there was no need for the Klan.

How does this apply to this more recent wave of white supremacy?

Right now, we have an extremely heterogeneous group that we might call white supremacists. So some of them, probably the smallest group, are nationalistic. And probably the larger group are not particularly nationalistic. This is why it’s hard to make generalizations. It’s not the case that nationalist fervor just finds itself in the white supremacist movement. The person accused of the shooting in Pittsburgh is an example. If you look at [his] writings, they’re not nationalistic, they’re in fact anti-nationalistic. And that’s pretty common with white supremacy today — some of them have this sense that their mission is this pan-Aryan mission. They’re fighting global threats to whites and creating a white international defense. So that’s not a nationalist project, that’s an internationalist project.

 

And the other reason is there’s this idea among white supremacists in the United States that the national government is ZOG — Zionist Occupation Government — and that’s a shorthand way of saying that the national government is secretly controlled by an invisible Jewish cabal. So some of them will be amenable to very local government … they’ll embrace, and work with, and even try to seize control of the government at the county level. But generally, national politics are quite anametha for those two general reasons.

In the 1920s, synagogues were targeted by the KKK. Can you run through other examples of violence like this?

People will say the ’20s Klan was not as violent as other Klans. But that’s really because its violence took a different form. So there, the threat that the Klan manufactured was the threat of being swapped — all the positions of society being taken by the others — so immigrants, Catholics, Jews and so forth. So the violence was things like, for example, I studied deeply the state of Indiana where the Klan was very strong — pushing Catholics school teachers out of their jobs in public schools and getting them fired, running Jewish merchants out of town, creating boycott campaigns, whispering campaigns about somebody’s business that would cause it to collapse. So it’s a different kind of violence but it’s really targeted as expelling from the communities those who are different than the white, native-born Protestants who were the members of the Klan. So it takes different forms in different times. It’s not always the violence that we think about now, like shootings.

When did we start seeing the violence that we see today?

Well, the violence that we see today is not that dissimilar from the violence of the Klan in the ’50s and ’60s, where there was, kind of, the violence of terrorism. So there’s two kinds of violence in white supremacy.

  1. There’s the “go out and beat up people on the street” violence — that’s kind of the skinhead violence. And then there’s the sort of
  2. strategic violence. You know, the violence that’s really meant to send a message to a big audience, so that the message is dispersed and the victims are way beyond the people who are actually injured.

You see that in the ’50s, ’60s in the South, and you see it now.

I was wondering if we could kind of talk a little bit about the language we use when we talk about mass killings that are related to race, religion or ethnicity — especially about the second type of violence, “strategic violence,” that you describe. I’ve seen people use the phrase “domestic terrorism.” What do you make of that phrase?

Terrorism means violence that’s committed to further a political or ideological or social goal. By that definition, almost all white supremacist violence is domestic terrorism, because it’s trying to send a message, right? Then there’s that political issue about what should be legally considered domestic terrorism, and what should be considered terrorism. And that’s just an argument of politics, that’s not really an argument about definitions right now.

How these things get coded by states and federal governments is quite variable depending on who’s defining categories. But from the researcher point of view, these are terrorist acts because they are meant to send a message. That is the definition of terrorism. So it’s not just, you don’t bomb a synagogue or shoot people in a black church just because you’re trying to send a message to those victims or even to those victims and their immediate family. It’s meant to be a much broader message, and really that’s the definition of terrorism.

I think what we don’t want is for all acts of white supremacist violence to be thought of as just the product of somebody who has a troubled psyche. Because that just leaves out the whole picture of why they focus on certain social groups for one thing. [And] why they take this kind of mass horrific feature … so I think to really understand the tie between white supremacism and the acts of violence that come out of white supremacism, it’s important to think about that bigger message that was intended to be sent.

What are the most effective strategies to combat these ideas of white supremacy, or this violence?

I’d say the most effective strategy is to educate people about it, because it really thrives on being hidden and appearing to be something other than it is. I mean, millions of white supremacist groups have often targeted young people, and they do so often in a way that’s not clear to the young person that these are white supremacists, they appear to be just your friends and your new social life, like people on the edges who seem exciting. … And so helping people understand how white supremacists operate in high schools, and the military, and all kinds of sectors of society gives people the resources the understanding to not be pulled into those kinds of worlds.

Twenty years, or even 10 years ago, I would have said it’s really effective to sue these groups and bring them down financially, which was what the Southern Poverty Law Center was doing.

[Now,] they don’t have property; they operate in a virtual space. So the strategies of combating racial extremism have to change with the changing nature of it.

 

Modern Monetary Inevitabilities

ALEXANDRIA, VIRGINIA – In a recent Project Syndicate commentary, James K. Galbraith of the University of Texas at Austin Modern Monetary Theory and corrects some misunderstandings about the relationships among MMT, federal deficits, and central-bank independence. But Galbraith does not explore what is perhaps the most important issue of all: the political conditions needed to implement MMT effectively.

MMT owes its newfound relevance to the fact that deflation, rather than inflation, is becoming central banks’ main concern. For a high-debt, high-deficit economy like the United States, deflation is an especially serious threat, because it delays consumption and increases debtor anxiety. Consumers forego major purchases on the assumption that future prices will be lower. Homeowners with mortgages cut back their spending when they see home prices falling and the equity in their homes declining. These cutbacks worry the Federal Reserve, because they add to deflationary pressures and could trigger deeper spending cuts, stock-market declines, and widespread deleveraging.

The Fed’s inability so far to reach its 2% target for annual inflation suggests that it lacks the means to overcome persistent disinflationary forces in the economy. These forces include increased US , which diminishes aggregate demand by weakening employee bargaining power and increasing income inequality; population aging; inadequate investment in infrastructure and climate-change abatement; and technology-driven labor displacement. Making matters worse, US political gridlock assures continued commitment to economically exhausted strategies such as tax cuts for the rich, at the expense of investment in education and other sources of long-term growth. These conditions cry out for significant changes in US government spending and tax policies.

MMT is seen as a way to accomplish the needed changes. It holds that a government can spend as much as it wants if it borrows in its own currency and its central bank can buy as much of the government’s debt as necessary – as long as doing so doesn’t generate unacceptably high inflation. Both tax-cut advocates and supporters of public investment find little not to like.

MMT has been roundly criticized by economists across the political spectrum, from Kenneth Rogoff and Lawrence H. Summers of Harvard University to Paul Krugman of the City University of New York. All contend that it is a political argument masquerading as economic theory. But Galbraith and Ray Dalio of Bridgewater Associates see MMT differently. Dalio argues that MMT is real and, more to the point, it is an inevitable policy step in historically recurring debt-cycle downturns.

In his book Principles for Navigating Big Debt Crises, Dalio documents the steps that central banks have historically taken when faced with a booming economy that suddenly crumples under the weight of debt. The first step (Monetary Policy 1, or MP1) is

  1. to cut overnight official rates to stimulate credit and investment expansion. The second (MP2)
  2. is to buy government debt (quantitative easing) to support asset prices and prevent uncontrollable waves of deleveraging. If MP1 and MP2 are insufficient to halt a downturn, central banks take step three (MMT, which Dalio calls MP3) and
  3. proceed to finance the spending priorities that political leaders deem most essential. The priorities can range from financing major national projects to “helicopter money” transfers directly to consumers.

Achieving political agreement on what to finance and how is essential for implementing MP3 effectively. In a financial meltdown or other national emergency, political unity and prompt action are essential. Unity requires a strong consensus on what should be financed. Speed requires the existence of a trusted institution to direct the spending.

In the early 1940s, when the US entered World War II and winning the war became the government’s top priority, the Fed entered full MP3 mode. It not only set short- and long-term rates for Treasury bonds, but also bought as much government debt as necessary to finance the war effort. MP3 was possible because the war united the country politically and gave the Roosevelt administration near-authoritarian rule over the economy.

The core weakness of MP3/MMT advocacy is the absence of an explanation of how to achieve political unity on what to finance and how. This absence is inexcusable. Total US debt (as a share of GDP) is approaching levels associated with past financial meltdowns, and that doesn’t even account for the  associated with infrastructure maintenance, rising sea levels, and unfunded pensions. For the reasons Dalio lays out, a US debt crisis requiring some form of MP3 is all but inevitable.

The crucial question that any effort to achieve political unity must answer is what constitutes justifiable spending. Alexander Hamilton, America’s first Secretary of the Treasury, offered an answer in 1781: “A national debt,” he wrote, “if it is not excessive will be to us a national blessing.” A government’s debt is “excessive” if it cannot be repaid because its proceeds were spent in ways that did not increase national wealth enough to do so. Debt resulting from tax cuts that are spent on mega-yachts would almost certainly be excessive; debt incurred to improve educational outcomes, maintain essential infrastructure, or address climate change would probably not be. Accordingly, it will be easier to achieve political unity if MP3 proceeds are spent on priorities such as education, infrastructure, or climate.

The political test for justifying MP3-financed government spending, is clear: Will future generations judge that the borrowing was not “excessive”? Most Americans born well after WWII would say that the debt incurred to win that war was justified, as was the debt that financed the construction of the Interstate Highway System, which literally paved the way for stronger growth.

As the 1930s and 1940s show, MP3 is a natural component of government responses to major debt downturns and the political crises they trigger. We know much more about what contributes to economic growth and sustainability than we did in the first half of the twentieth century. To speed recovery from the next downturn, we need to identify now the types of spending that will contribute most to sustainable recovery and that in hindsight will be viewed as most justified by future Americans. We need also to design the institutions that will direct the spending. These are the keys to building the political unity that MMT requires. To know what to finance and how, future Americans can show us the way; we need only put ourselves in their shoes.