Curious Worldview

86: Jim Henry | Russia Sanctions Efficacy + Elon Musk Twitter Takeover

• Jim Henry • Episode 86

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The following is a conversation with Jim Henry, on among other things, the Elon Musk twitter takeover.

Jim Henry is the author of Blood Bankers – an investigation into the capital flight of the developing world during the 80’s and 90’s. Jim’s book serves as a prequel to what has become the investigative industry of tax evasion.

In This Podcast With Jim Henry, You Can Expect To Hear About…

  • Credit Suisse.
  • Efficacy Of Russia Sanctions.
  • Twitter & Elon Musk!

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  • 00:00 – Introduction.
  • 02:09 – Credit Suisse.
  • 16:17 – The Efficacy Of Russia Sanctions So Far.
  • 37:30 – Elon Musk & Twitter.
  • 1:25:31 – Afterthoughts & Ambition For The Podcast.

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SPEAKER_00

Hello, dear listener. Jim Henry has come back to the podcast. Now, those who have listened for a while will recognise the name by now. I think this is his fourth appearance. But for those who are new, Jim Henry is a Harvard educated economist and lawyer, one of the famous NATO Raiders, a former chief economist at McKinsey Co., an investigative journalist, author, and as you can imagine, much more as well. We initially got in touch because of his magnificent book, Blood Bankers, which is an investigation into the capital flight of the developing world during the 80s and 90s, and Jim's book and also Jim himself serve as a prequel to what has become the investigative industry of tax evasion. So quite the resume then, but nonetheless, um this podcast has a much more narrow scope than that. I've uh straight after the war, after the uh invasion, uh Jim spoke with me twice in this podcast speaking about the efficacy of sanctions, what the sanctions were going to look like, and so forth. So in this uh podcast, we speak about three distinctly different things. The first being a major win, I suppose, for the uh tax justice community, which has to do with the second largest Swiss bank credits twists. The second thing we speak about is a bit of a reflection on how the Russian sanctions have uh worked so far, how efficacious they've been. And then finally, the final part of the chat is uh Elon Musk and Twitter, but also billionaires and media sh media ownership. Myself, I find Elon Musk to be one of the most inspiring characters alive today. And I say in the podcast, um you could consider me a Musk maximalist. Jim most certainly is not far more skeptical of it, is more quick to come down on the con man side of things. So uh that's the best part of the chat, I would say. But um I hope you enjoy it and the timestamps are there. So if only one of those uh parts interests you, then jump right through to it. And as per, hang around to the end to hear my afterthoughts as well as my vision for the podcast. And here is the Magnificent, the Great.

SPEAKER_01

Well, I mean, I think the um occasionally as uh an activist uh and a journalist you you have victories, and last week we had uh this uh finally uh after eight years of waiting for uh the Department of Labor in the United States to actually crack down on one of the dirtiest banks in the world, Credit Suisse, um the number two Swiss bank, uh, we finally had them apply some sanctions uh to Credit Suisse, and this is after uh literally decades of uh money laundering, kleptocracy, uh helping uh bad people all over the globe. Um in 2014, this uh this bank, which is the second largest uh Swiss bank, uh, had set up a secret uh uh underground, kind of off-the-books private banking unit to call on wealthy Americans, and they had more than wealthy, uh more than 20,000 uh wealthy Americans who were secret clients of the bank, and they laundered about uh 40 to 50 billion dollars for them. And in 2014 they pled guilty to a uh $2.6 billion fine, but they didn't get any jail time. They were able to continue uh operating in the United States, no one went to jail. So Ralph Nader and I had organized uh this effort back in 2015 to actually get the Department of Labor in the United States um uh to uh use the fact that uh Credit Suisse had pled guilty to essentially a big corporate felony here to uh uh to void their ability to uh work with U.S. pension funds and advise them and sell products to them. And that was it's quite a big business for investment banks like Credit Suisse. Um we presented a whole day of session uh sort of testimony. We had experts come in from Germany and Australia who had also had uh uh was familiar with Credit Suisse activities there, uh, and a whole litany of kind of uh corporate felonies that they've been involved in across 14 different categories of uh corporate crimes, financial crimes, from uh illegal trading and money laundering uh to bribery, uh price rigging, and facilitating tax dodging. Their lawyer in the United States, interestingly, uh, has since moved on to be uh our FBI director. So, Christopher Ray, uh, and he had represented Credit Suisse in the 2014 plea bargain. Uh anyway, at the end of all this, they got off with another waiver. Um, and we were outraged. We also brought some Holocaust victims who had never been paid under the 1998 settlement that had been done with the Swiss banks. Um Department of Labor under Obama uh was just like the Justice Department under Obama. They just didn't listen uh to any of this, and uh they gave him uh permission to uh to go back to work, and uh they did assign an independent uh observer to credit suite. Well, with roll forward uh to 2019, they got yet another waiver under Trump, and we're still advising U.S. pension funds. Um this year, however, the OCCRP, an investigative uh journalist consortium from around the planet, uh produced a Swiss whistleblower from within the bank, and he was testifying to uh Credit Suisse's ongoing activities in uh more than a hundred countries involving helping very wealthy uh officials and uh kleptocrats take money out and hiding it for them. Um and so this just kind of tipped the uh this was just too much. So the Biden administration's Department of Labor finally canceled this waiver um just last week, and that was good news to all of us. Uh I mean it's still something that Credit Suisse will be fighting, but I think it's one of the first victories we've had over major banks. Um we tally up all the banks' uh activities and financial crimes after the uh period 2000 to 2016. It's more than 650 uh felonies by the top 22 banks. And again, you know, uh no one went to jail, no one lost their licenses, and uh, you know, they just kept uh getting these tax-deductible fines. Credit Suisse is $2.6 billion fine was tax deductible in Switzerland. So not only did their FBI director, their F their lawyer ended up as FBI director, but um, you know, they got uh basically a slap on the wrist. I think right now, if you look at their stock price, you'll see that uh in the wake of these latest revelations and also the uh general deterioration of their position in the world market and uh this latest penalty, they're beginning to come a part of the seams. Credit Suisse's uh market cap is way below where it was when we started this activity. Uh and some people are talking about a breakup of uh the bank, which, from my standpoint, as someone who's been following them since uh I discovered they were hiding Marcos money in the 1980s, uh would be uh you know just as long overdue.

SPEAKER_00

And is this largely attributable to just the heavy, heavy international pressure in response to what Russia has done? Uh can it can can this, as you say, monumental win be attributable to that specifically?

SPEAKER_01

Well, that's not so much about uh Russia. This is about the revelations about that bank. But it is interesting that credit.

SPEAKER_00

But I mean because of their associations with the oligarchs and their psychic.

SPEAKER_01

I think that that's uh the the kind of part of the uh the uh change in the atmosphere that we've seen is is much more intolerance for banks that are laundering money for you know wealthy kleptocrats, whether they're Russian or or African or uh from Latin America or from the United States. And uh sorry. Uh the um so I uh you know I think it's a it's a tiny victory, but it's a meaningful one to those of us who've been working on banksters, and uh that's a uh helpful thing. Credit Suisse also has a long engagement like Deutsche Bank with uh kind of with Russian money. And so that's also playing into it. There may be less sympathy, uh sympathy even in Switzerland, which has gone along to some extent with the sanctions that we've uh seen in terms of uh penalizing Credit Suisse for that this activity. But uh you know that that's point one. I think the the uh the more general issue for uh uh the uh uh crackdown on Russian money is that a lot of it isn't really within banks anymore. A lot of it has to do with real estate investments, with we've seen, you know, the yachts that have been seized. There is a lot of escape valves that uh people have used to kind of lessen the impact of the sanctions that have been uh implemented. And it it brings to light the fact that countries like uh Germany uh and um indeed the EU in general have been remiss in terms of cracking down on uh money laundering. And uh even though they have these all kinds of uh directives and the EU 1991 directive beginning there, they started to crack down on uh money laundering in principle, but uh we're seeing many issues with enforcement of these of these measures. So one of the concerns I have about uh that situation is that if the sanctions aren't going to work, then we're we're reduced to uh sending more and more weapons to the Ukraine, and that's just going to accelerate the kind of confrontations that we're seeing. Um and uh you know there's some as we as we mentioned that uh there's some escalation in the rhetoric at least about uh the impact of Western wet rep weapons flowing into the Ukraine. Um Russia is now threatening to actually go nuclear. They've made noises like that for the last uh six weeks, but this latest round they have you know sort of everybody on the chorus kind of standing up and threatening uh Boris Johnson with the UK.

SPEAKER_00

And as you said off air, it's sort of zero to one. They can keep threatening, and we can say obviously it's BS, but there's no in-between move from a threat to when they actually do do it, which makes it a lot of things.

SPEAKER_01

Yeah, and at some point when we the more we as we go on, we get to a point where they uh feel like to be credible they have to do more than just talk.

SPEAKER_00

So uh especially if they get embarrassed repeatedly.

SPEAKER_01

Yeah, and and I think uh you know there's the uh they they do have an enormous range of tactical nuclear weapons, I think many more than we do, but uh that's yeah, they've got the most in the world.

SPEAKER_00

I don't know about the quality of them or anything, but just in raw numbers.

SPEAKER_01

Yeah. Well, you have the Wall Street Journal today saying um, you know, let's uh let's think seriously about a uh a nuclear war. How would we actually win it? Uh so the normalization of this stuff to read. The normalization of this kind of discussion is really concerning.

SPEAKER_00

Um I just want to uh just uh get a uh a finer point from you on the Credit Swiss story. You said they're the number two Swiss bank. Who's the number one Swiss bank?

SPEAKER_01

UBS, Union Bank of Switzerland. And uh and Julius Baer is the number three, you know, they're all basically have a strong background in this international uh activity called private banking.

SPEAKER_00

Sure. And if you take a uh like a very high elevated view on this, what is the implication from um what you've just spoken about?

SPEAKER_01

Well, I think that we are becoming uh part of the uh uh the uh I'd say one of the few benefits of the Russian crisis is that we become more aware of how much uh uh money there is sitting in the West from unsavory sources. Um and not only from Russia, but uh you know, all of the uh most African dictatorships have much of their wealth outside of uh uh uh the country and out of the countr out of the continent. Uh Latin America, that's been true for decades. Um and so, you know, there's a whole uh uh industry devoted to this, the global haven industry that has kind of specialized in helping wealthy people take their money out of uh dictatorships and and hide it abroad and avoid taxes and other regulations. Uh I think that right now we're seeing that with respect to Russia, they're the number two uh capital flight source in the world. Um the latest behavior by Russia is not gonna improve that for them. Um but there's something north of uh, you know, we have varying estimates on how much wealth is abroad, but Russia has, by my estimates, has uh decapitalized to the extent of about two trillion dollars uh uh since uh early 2000 under Putin. Um as more and more oligarchs, you know, sort of in during the 1990s, they were able to get their hands on uh more than 150,000 Russian companies for a paltry sum of about 9.3 billion dollars uh in the privatization. And then uh they disc woke up to discover that they had uh people like Putin around with you know, sort of uh making uh uh decisions uh which were unreviewable by any independent courts, there's no legal system that they could rely on. And so naturally they decided, ah, well, let's go to Switzerland, let's go to the UK, the uh the United States. That's where we have laws, we have independent courts, we have protection for investors like us. So um over time they accumulated this uh vast fortune abroad. Some of that is controlled by people who are sympathetic to Putin. Uh Bill Browder's estimate is like a trillion of it, maybe in his uh inner clique. Uh but the bigger number is even wider. And so uh China is the o is the other main uh leader in that activity in terms of a source country. But all of it ends up uh ends up basically in the West. And so collectively speaking, the developing world is a net creditor of uh uh of the of the uh OECD. Um so in the international system you have this kind of bizarre situation where uh the richest countries in the world end up being the havens that receive all of this uh capital from the poorer countries. Um you know the solution to that is is partly to kind of try to drive it into the uh to to expose it and to make it more uh you know sort of subject to sanctions, but it's also you know, ultimately we have to get developing countries to be more attractive to to capital and to have rules of law and uh regimes that people can respect because they're more democratic. That's kind of the only way you end up this uh in this perverse uh capital flow.

SPEAKER_00

Immediately after the war, uh on day two and day three, you and I spoke about um sanctions. So in the heat of the reaction, we you know could comment on what it potentially might have looked like there, what the effectiveness might have been, and so forth. We're now five, six weeks after the invasion of Ukraine. Um you've been keeping a really close eye on it. How have the financial sanctions worked to influence behavior regarding Russia and their uh behavior in the Ukraine?

SPEAKER_01

Well, we've seen a lot of uh oligarchs kind of scampering to uh, you know, get on the right side of the issue. Uh people like Mikhail Friedman in London were complaining about being out of cash. You know, we had Roman Obramovich kind of traveling the world trying to negotiate something, and it's not clear what side he was on, but uh, you know, so there's been uh a flurry of activity on the part of some of the uh uh oligarchs who were uh more or less uh already outside of Russia. Uh it isn't really clear to me as yet that we have had dramatic effects uh by way of those financial sanction sanctions on Russia. And some of some of the limitations have to do with the fact that we're still allowing companies like Gazprom Bank, um, you know, the trading companies that are based in Switzerland, Rossneft, uh, you know, to basically uh engage in in trade. And uh, you know, the shares in those uh companies are quite valuable, and those are probably we suspect the assets that uh people in uh Putin's inner circle are benefiting from. So they're worth hundreds of billions of dollars uh the uh traded shares in the Swiss companies that are Russian-owned. Um the other uh aspect of uh trade sanctions I think are you know sort of uh a uh are beginning to work, and I think the technology sanctions seem to be having an impact. The World Bank is predicting that Russia's GDP is going to uh decline by at least uh 15% this year. And you know, that's something that uh ordinary Russians are gonna feel a pinch of that. Um the impact on their military spending and their ability to uh maintain their competitiveness uh you know is a long-run consequence. So uh assuming we just did sanctions and we weren't involved in uh the war, uh this will have a dramatic impact, uh, but it's not clear that this is going to have uh an impact on Putin. So you know, if we were looking for uh uh immediate response uh uh either from sanctioning oligarchs or from trade sanctions, uh it seems like uh it's it's it isn't working so far. It isn't producing that kind of uh bargain come to the bargaining table, let's get this behind us. And so I guess I'm concerned that over time, uh as this uh uh affects uh food prices and uh gas prices and and specifically uh uh in the West, we're gonna lose the kind of political momentum that we needed. Uh especially in developing countries, you see uh dramatic effects of uh the fact that Russia and Ukraine together are you know something like 30 percent of of wheat, they're you know 80 percent of sunflower seeds. I think it's more 30 percent of wheat. Yeah, well it's uh for the Middle East, North Africa, and here for the yeah, for those for those areas, I mean Lebanon, you know, Egypt, these are much higher share for them. So uh these are countries that are going to be um I mean we're already s seeing dramatic uh increases.

SPEAKER_00

Yeah, um just uh sorry to interrupt you, Jim, but on that point specifically, I had on Gaeda Hatu, who's a geopolitical analyst for the MENA region Middle East, North Africa. She runs a geopolitical risk consultancy firm, and her commentary was such that in Egypt and Lebanon it is almost a hundred percent reliance for their wheat imports from Russia, Ukraine, and already they are feeling the pinch in terms of bread shortages, and she was making um comparisons to um the Arab Spring, which were kind of catalyzed by rising food prices. Uh, there isn't necessarily a uh high calorie, low-cost carbohydrate that they can just switch onto. Rice isn't necessarily part of the culture as much as bread is, it's like so fundamental. So on that point specifically, it's like uh one of the interesting unintended consequences of a big conflict that I suppose can be.

SPEAKER_01

Yeah, I agree, and I think uh the the World Food Food Organization is already uh running out of money and they're complaining about uh or predicting that by next year we'll have 400 million people um you know in in in uh situation on the edge of famine. So terrible you know, this is uh as a direct result of of uh this invasion. So um, you know, I think the United States uh as a food producer and you know uh basically uh uh doesn't feel that pinch, but we're as we see people basically starving uh in these uh countries, we're gonna have to go and provide assistance uh to sustain this policy. So that's a uh you know, a uh uh uh r another aspect of the sanctions that uh is is more complicated than perhaps we thought when we talked, you know, six weeks ago about this. Um I think that you know the the uh so far uh the solidarity within uh the NATO countries and and the EU in general uh the UK as well um has been pretty impressive and I don't think that the Putin necessarily anticipated that um and uh the uh the impact on uh uh Russian consumers is also going to be dramatic here in terms of cost uh food supplies and also uh the cost of living um even access to cash is a big problem there at the moment I'm not sure if you've seen yes yeah and and I think uh that's uh that's partly why we're see we're hearing all this we're s uh beginning to hear this kind of hysterical rhetoric from uh Putin supporters in in Russia um and there's a surprising number on telegram I've been following uh a number of channels that are uh quite critical of their own you know by Russians who are uh expressing a lot of doubts and criticism about this policy and whether it's sustainable and quite concerned about it. But at this stage it's such uh a kind of black box in terms of who's making decisions and how much pressure this you know can actually apply it just doesn't uh you know it's not clear how we get through that uh you know this this uh this period have an impact with the with the sanctions so I think what we're we seem to be drifting toward uh increased reliance on military assistance and that's just going to be you know more and more dangerous.

SPEAKER_00

So in your estimation despite the severity of the sanctions so far they have not been as effective at co-telling behavior as you would have hoped brings into question the efficacy of sanctions at all.

SPEAKER_01

It's having they're having dramatic costs uh you know throughout on a lot of people that are uh not really uh part of Putin's uh constituency and you know so there's all these collateral effects um and it's just not clear that that matters to uh to Putin at all and you know so maybe uh this was uh something I was hoping that China would sort of weigh in on at some point they would say you know look this is just becoming completely uh uh you know way over the top in terms of the impact uh around the planet and they're not interested in seeing the entire Middle East disturbed uh destabilized and Africa starving so uh you know it's it's curious to have to rely on China to to influence Russia but I'm not sure who else he listens to uh it may be that that may the may be uh uh one channel that we'll get through to him uh so I think the general the general point is that uh on on the financial sanctions we've had uh you know some loopholes that have been left and uh we could be tougher on on sanctions that you know the United States has still not decided to label uh Russia uh an international terrorist state which would trigger lots of effects that have already been applied to uh other countries that like Cuba and Iran uh much more severe level of sanctions for doing anything at all uh indirectly and I think that's um you know being debated right now at the US Treasuries whether to label them a terrorist state that would send Putin into hyperspace um but uh you know it is one uh aspect of this that we could go uh farther with we're still we still haven't completely detached because of the uh gas and oil transactions and you know that is uh obviously something that would would have a tremendous impact on Germany in particular but uh he's already cut off cut off uh uh gas shipments to Poland and Bulgaria um but uh you know people are incredibly creative at work doing workarounds so I'm told that there are some workarounds that are being have been designed for those uh new Russian sanctions against us um but uh you know you have the sanctions violators beavering away you can imagine the creativity the creativity being stimulated by this so it's clear as you mentioned that the oligarchs are feeling the pinch and that's very clear I mean Roman had his football team taken away from him and um uh and there are many examples of that and that was supposed to be an effort to create pressure from Putin's inner circle right if you can start to lean on people who might be able to influence the decision maker then that might ultimately be able to finally you know create the pressure required to um change the behavior of the person in charge but um in addition to that I guess who are the sanctions uh really hurting is it affecting Russia's ability to um resupply their army is it affecting Russia's ability to sort of feed themselves and so forth is there a self-containment that they have allowed for and um you know almost accounted for from the potential sanctions that would have come from their actions um well they tried to uh stockpile all these reserves and I think you know uh the best estimates are that you know we've been able to uh limit access to about half of the 660 billion uh in US uh reserves that they had accumulated um some of the oligarchs I mean one of the things that's interesting is that we've relied heavily on a kind of a short list of oligarchs when we decide who to sanction uh Navalny put up a list of about 35 oligarchs um and you know I from my standpoint there's a lot of interesting names that are off the list there um uh my favorite character is the guy who bought the Salvador Munde uh you know Rybolovlov he was the potash czar of Russia he was uh a big investor in Cyprus he bought the uh bank of 10% of the Bank of Cyprus uh which is a big Russian uh owned bank it still is um he was bird dogging Trump on the campaign trail in 2016 you know his Airbus uh 319 would fly in uh and then Trump's uh campaign jet would fly into Durham and Charlotte and Miami and he was you know it was unclear what was going on there but uh Ribelov's uh Airbus was tracking Trump around the campaign trail very bizarre and then he also of course bought uh back in 2008 he had bought Trump's uh um Palm Beach uh uh mansion for about 40 million dollars just as Trump needed about 40 million dollars um he paid forty million dollars more than it was worth in uh 2000 uh June 2008 and so this guy um you know has a big yacht it's uh you know you can track it on uh the marine tracker and uh uh it's um you know he owned the Monaco football team but he's been not left off the sanctions list he just like walks on water uh he doesn't have any uh you know sort of sanctions apply to him at at all and uh interesting I I I wasn't aware of the maybe extended oligarch list who might not be getting any attention put their way but isn't the um the like paradoxical failure of a Russian sanction is that the very people you want to hurt the most like those oligarchs who can create pressure to lean on Putin most of their wealth is held outside of Russia and I suppose even though their business dealings might be in Russia it all happens outside of those political borders which means it's well I I'm concerned that a lot of the influence that we're trying to curb here is on the part of the oligarchs on the political system outside of Russia. In other words I'm not s I'm not a I'm not uh optimistic about necessarily about uh some s tiny circle of oligarchs being able to pressure Putin um what is clear is that people like Rivlov have been involved in US politics and uh have had a uh sort of deleterious effect on us so sending them back would be a a positive from the standpoint of reducing this kind of influence. We have people like Len Blavatnik who's a Russian American citizen who's been making huge contributions to universities and you know sort of uh I mean the Harvard Medical School took $200 million from him there's the Oxford set up a whole um business sort of a whole Blavatnik school of government um and he's making political contributions to you know uh he gave a million dollars to the Republican Party and then uh uh fairly substantial uh contribution to the governor of New York uh current governor hochel who's um you know under some pressure to uh to clean up Wall Street and uh you know this is an example of uh of uh kind of oligarchs who uh have made it out of Russia and are still having a lot of influence it's not clear what their uh views about any of this are except that they they seem to lean to the right so um that's that's a concern maybe we should go uh uh I mean there's a part of me says well let's bring it on do you know get them all out of Russia get welcome them with open arms uh take the capital and run and then uh Putin will feel really feel the pressure um but uh you know I think we have to be uh discerning in how to go after the oligarchs in particular and you know some of them have a lot of information that would be useful and uh you know there can be two lists the people who are helpful and those who are not so um there there is a first hand experience that I had recently which I think might be a decent signal as to how the Russian sanctions could be affecting people elsewhere completely unintended consequences of imposing such serious economic sanctions on a country that is so closely associated with Europe.

SPEAKER_00

And it's a friend of mine who runs a very big tour agency and he gets American tourists to come in and do tours of Scandinavia and a popular route is called the Hutegruten which is this big Norwegian ship that goes down the west coast fields of the West Coast. Anyway they have now been docked and the ship cannot be used because although it's a Norwegian ship built by actually I don't know who it's built by but it's a Norwegian ship state owned somehow the insurance rubs up against Russia and somehow that makes the ship the subject of the sanctions and it was just an interesting conversation to realize that this tourism vessel which only facilitates people looking at the Westfields of Norway it's got nothing to do with Russia nothing to do with the war the sanctions are at least effective enough at stopping something like that happening which to me does suggest that they are effective in in you know in they are effective in areas where giant interests can't sort of pull the strings um and that could just be a little signal of it affecting a lot of different industries in different ways like that. For example what was it give me one second yes for example Netflix um had this horrible week last week uh where as they had I think for the first time in history a negative growth number of subscribers what was conveniently left out of all of these hyperbolic headlines was that Netflix straight up cancelled every single Russian subscriber that they had. And that's quite interesting I think as well you know the question is just then how effective are they at curtailing the very behavior they're trying to curtail.

SPEAKER_01

The microeconomics of all this are fascinating because lots of people are impacted this sort of a blunt uh instrument uh that sanctions necessarily are you know they have uh a checkered history in terms of actually affecting uh countries behavior you know countries like Cuba and Iran have been under sanctions for decades and uh there's no sign I mean that you know in the case of Cuba which I know pretty well they they um if anything have kind of intensified the support for the regime and at least uh allowed it to maintain a kind of a hardline stance and blame everything that's going wrong on the United States. So uh but in the case of South Africa in the 1980s we saw uh financial sanctions quite effectively uh applied to that country because it was completely isolated uh by the banks in that case you had the banks actually do something good and the South African those there's no question that South African apartheid was uh had an accelerated demise because of uh the financial sanctions that came to play in 1985-86 um not necessarily because of the boycott that uh a lot of people participated in but but mainly these financial sanctions so there are sanctions and there are sanctions and uh you know fine-tuning them is a is a work in progress you know you say have some people who are just kind of professional skeptics about all of this like my colleague uh Jeffrey Sachs of Columbia who you know has been still to uh as of last week was saying we need to negotiate a settlement this is all NATO's fault um you know sanctions are a blunt instrument they can't be made to work they'll have a lot of uh impacts on us and uh it's going to be hard to sustain uh the sanctions after the gas price and uh food price increases all the arguments that we've been discussing um you know so some of us take uh that as an example of where we need to go farther and say you know let's uh double down and make it uh make the sanctions tighter and more effective and expand the list of oligarchs and some of us want to pull back um which I think would be a terrible signal right now but um you know there is this this camp in the United States partly on the right partly on the on the left uh that's sort of uh very nervous about the situation and wanting to uh you know find the exit as soon as possible so that's uh uh but uh so let's talk about uh issue number three that we're going to speak of well in the midst of everything else that's weird you know that that that exactly uh yeah I mean I suspect that we won't uh see necessarily eye to eye on this one just because I'm a bit of a musk maximalist um but you wanted to talk about billionaires in US media well I do I I think that the um uh you know look there's good things about Elon Musk he uh uh basically started out at PayPal as a software programmer he was one of the uh he not the founder of PayPal but he was one of the uh he was uh writing code for them he went to the University of Pennsylvania and uh decided not to go to graduate school he he he had a he had a company called x dot com which actually merged with PayPal yeah but they he was one of four uh four or five people who were involved in that and then he went on to uh I mean I think the thing that if you roll forward today he's opening uh Giga which is this huge plant in Austin you know uh it's uh one and a half kilometers long everything's under one roof they're gonna producing some you know they have robots producing robots they produce all their own robots this is going to be spitting out uh EVs by the you know tens of thousands uh it's way ahead of I mean Ford was just announcing that they were struggling to produce their uh you know F-150 version of the uh e-vehicle but a alon has got that down he's got the uh you know SpaceX which is uh privately owned 100% by him but probably worth a hundred billion dollars and they've you know who would have imagined being able to do a reverse entry of uh uh you know rocket rockets that's quite an achievement it's not just by him he's accumulated good teams of people and there's a brilliant 100% yeah um and then uh one of the side benefits is this uh Skylink service that he's he's planning to put up has also helped the Ukraine with the Skylink uh satellites and uh he has plans to launch uh 42,000 satellites um I think he will be the next trillionaire when he IPOs uh Skylink uh you know with five million base stations around the planet and the biggest internet company giving people 250 megabits per second download speeds from anywhere uh you know taking the these god-awful cable companies that have somehow monopolized the internet in the United States out of the picture um you know that will be uh trillion dollar IPO uh and uh he owns 100% of it so you know that's that's coming and then of course Boring Company which is the tunneling company just got a $300 million contract from San Antonio um so you know to do I mean he's doing uh he's moved everything to Texas he and Larry Ellison uh from Oracle have decided to leave California and move to Texas and so in Texas he is building this uh underground tunnel network he hope hopes to put in between uh uh you know Dallas and Fort I mean Dallas and Houston and uh San Antonio and Austin uh and he's you know just launching that so I don't know how many Elon Musks there are but you know somehow he has crazy I guess he doesn't sleep uh and uh he must drive his family nuts um I think he's already pled guilty to not being a great family guy but in the Twitter area the concern is that he's just kind of um you know he isn't the first uh billionaire to have any ex uh uh by any means to have any outsized impact on U.S. media we've had Murdoch uh John Henry bought the Boston Globe uh a while back you know uh Bezos of Amazon uh he bought the the Washington Post in 2013 for the grand sum of 250 million dollars um but I think the thing that's concerned about uh this general trend is uh you know first of all it's kind of uh against uh democratic principles to have uh um the entire publishing industry monopolized by people in a certain class and you know uh a handful of uh people who have been fortunate and uh you know obviously uh talented in their own way but uh you know the one good thing about Bill Gates uh I mean he's MSNBC is an examp is uh is maybe a counterexample but he's basically decided to devote his uh surplus wealth to you know doing uh projects uh to help uh poor people around the planet with 44 billion dollars you could probably feed everybody in Africa um so there's that question about you know what is the value add here um I'm also concerned that his view of what it what free speech is which is kind of like everybody gets in the pool and it's sort of hands-on uh you know sort of uh no holds barred wrestling um with no side night side constraints you know you're going to have I mean in theory we could imagine uh a Twitter channel for anti-Semites uh for black uh people who are white nationalists black nationalists um homophobes uh all of this hate speech just comes slithering out from under the rocks and accumulates on what has been uh you know it hasn't been financially successful but it's it's got you know 215 million users and that could grow to exponentially and then you'll have all these people um now will any rational person want to be associated with that or or maintain it I have a tiny Twitter following of you know some 6500 users and I'm quite happy with them they're they they're loyal they stick around and we have an interesting conversation because there's a lot of Really interesting people who follow me. They you know, the um Bianca Jagger. I mean, so I mean that's an example. Who's that Mick Jagger's daughter? Yeah, what uh ex-wife. Okay, and she's a she's a heck of an activist, you know. She lives in London, she follows uh all these issues, very involved in uh women's rights and uh uh many other causes. But you know, it's it's not important to me that I have 80 million followers. I mean, I I I don't even know how you'd audit them to see that they're real people. But what's important is you have you know interesting dialogue um on the issues of the day, and you sort of uh have a place to uh to have those short discussions. And it's no substitute. I mean, the other thing about Twitter's notion of free speech is that 140 characters, you know, is not an argument. It's it's really and it's not a medium that's set up for like uh dialogue or constructive conversation. It's it's you know, it's missing that. And it's it's set up for people who want to sort of track. I find it useful for a couple different uh reasons. One is there are a lot of issues like the what's going on in the Ukraine where you can come uh and in a few minutes come up to the speed from all of these different reporters who are around the various aspects of the some of whom are amateurs, some of whom are uh you know paid reporters who are doing their and they're they generally speaking, if you want to come up to speed with some issue right now, the best way to do it is to check out what the Twitter feed is uh rather than go to the Times or the Post, um which are slow. And uh but uh you know, in terms of commentary, there's you know, there's a lot of bad behavior on Twitter, a lot of antipathy, and people are just voicing, you know, sort of sh short, non-informative stuff. And so in terms of the volume of material that's there, uh I think that there's a the high ratio of uh noise to signal. Um and uh you know that's that's a quality issue. So I guess those are the two main uh uh ideas. Trump uh Trump um is probably going to be accepted back uh on Twitter, if I had to guess, you know, and he it'll save him from trying this embarrassment of the uh of the failed channel that he was supporting. Truth. Um terrible name. True truth.

SPEAKER_00

Such a bad name.

SPEAKER_01

Um but Musk seems to have bought into this postmodern notion of truth, which is uh kind of you could trace it back uh philosophically people to like well Heidegger, um you know, who has his own uh legendary connections. Uh but uh Foucault, um you know, Derrida, this idea that there is no such thing as truth. Uh it's uh basically power that we're talking about.

SPEAKER_00

Everything's subjective and contextual.

SPEAKER_01

Everything is subjective. So that's you know, what a lot of the a lot of that got picked up in what we don't like about some of the you know, sort of uh CRT theory, you know, critical race theory, where um we we have seen people sort of uh uh offended, you know, woke wokeism. I mean, there's something to the critique of wokeism if it's if you are are living in that space and it it is all just about what your feelings are.

SPEAKER_00

Oh yeah, and it's so tremendously boring.

SPEAKER_01

Yeah, well, it's it's insidious. I was uh on the board of Amnesty uh US last year, and uh uh you know it was an interesting experience because we have this huge conflict within Amnesty between the staff, uh who were uh majority people of color in the U.S. Um and uh and the board. And the the the critique uh amounted to the fact simply that uh the staff uh uh perceived us because we were white uh as racist. And uh they were just simply being well it is it is not it is not absurd. It is interesting. It is an interesting perspective. It is is people believe that they have that the only meaningful way to uh to you know to interpret racism is something that you perceive as an experience, and uh that uh being able to hide behind the need for objective measures, objective measures of racism, uh is a white ploy to maintain dominance. You know, so uh to be uh fair, I think there is this, and I would say this is predominantly uh younger people who've gotten into this mindset. But it is a i there's a I was surprised as I studied this stuff to to understand that you know it has a lot of uh deep roots. Part of it was, you know, founded my alma mater, the Harvard Law School, and sort of uh uh there was in the late 80s and early 90s uh sort of lit legal, the original critical race theory uh stuff came out of um the the Harvard Law School. And uh uh there was a perception that intersectionality was a problem that wasn't dealt with by the kind of traditional sort of bipolar black-white race definitions of racism. Um you had to also deal with these other categories. And then the question became, what are the categories we have to worry about? So we developed the idea of intersectionality. Um and that in uh inevitably led, almost inevitably led to uh this this focus on perception uh as opposed to you know documentable, objective, you know, merit measure measurable um so uh those of us who are uh fortunate enough to be more or less white um are uh you know sort of in the uh in the target zone for this and are sensitive to it. But you should be guilty for being white, Jim. Well, you know, um my um uh this week was the 415th anniversary of the founding of Jamestown Colony. Jamestown Colony in Virginia, uh April 26th, uh, 1607. Uh there are three ships that arrived, and one of them had uh a 12-year-old uh kid named uh Thomas Shelburne, who was a day laborer. He was a ship's boy, indentured, uh, and he's uh direct lineal ancestor of my my mother's uh family, the Shelburns. And so there were like you know eight generations of Shelburns in Virginia after that. But he shows up in Virginia at that point and is basically a slave for the next eight to ten years. Uh it was a corporate town, it was founded in London by a bunch of uh aristocrats. Lord Delaware was one of them, Baron Delaware was one of the founders of the Virginia Company. Um in 1619 they introduced the first black slaves into the United States, and after they discovered tobacco as a source of uh, you know, finally they could uh they discovered a crop that could export uh to England, uh they required labor to grow tobacco, and that's where the big demand for labor came from. But throughout this whole period, there is this uh this notion of uh of repressive uh kind of company-town uh behavior toward uh ordinary people, uh whether white or black, uh, was the story of the founding of the United States that we don't really uh talk about too much. Most of the attention goes to Plymouth Colony, you know, and this religious group that was founded later that sort of moved there. Well, that was a fairly repressive place too, but it was mostly uh repressive along religious lines. And what happened in the Jamestown colony was was a straightforward kind of repressive uh company town type of mentality. Of course, that you know that led to lots of conflicts with the Native Americans who were there, and you know, there were all kinds of interesting relationships between the uh the working uh folks in Jamestown, many of whom would run away and they would take up refuge with the Indians, um, and you know, form these kind of class relationships across color lines. So I I think there are very different traditions here that we need to emphasize here in talking about uh uh these uh these issues about wokism. But but one of the clearest things is that the company town mentality goes all the way back, and I think uh Elon Musk is right in the middle of that tradition. I mean, he is uh Baron Delaware uh buying up the media, and if you want to be uh uh working at Twitter these days, I think you're going to be under a lot of pressure to conform uh to his values. And indeed, he's gone after a few Twitter employees that he doesn't like already. So we're seeing what the future holds here.

SPEAKER_00

I don't think it's uh uh whoever was there before was also under pressure to conform. Well, they were under pressure to conform to their nearest measure of power.

SPEAKER_01

Well, Jack Dorsey ran of a kind of a loose ship, but he was able to implement, I mean, they were the the staff had a fair amount of power there, uh just like they had at Amnesty. They've kind of uh in a sense began to run the organization. And uh, you know, I think these are uh these are these are tendencies that there's you know, it's the Hegelian dialectic, I hate to bring that back into the conversation here, but but there is something to the notion that you know we evolve at um at truth over time, you know, through the interaction of opposing contradictory sort of relationships. There is no absolute truth, but you have these conflicts that come together, and out of the conflicts you have you know new discoveries.

SPEAKER_00

And uh honestly, Jim, I think that there'll be very little change. People who are banned will probably be reinstated, like um Donald Trump and perhaps even Alex Jones and stuff like that. But in terms of you know, Twitter groups that are explicitly anti-Semitic, look, it could happen. I think if that does happen, it will be the death of Twitter, because there are places that people can go. And I just wanted to make this point, which um um I sort of realized last year when I watched this documentary about QAnon and how it mostly took place in this HAN board. If you do create an online chat room or board that is zero censorship, anyone can say whatever they want, it's porn and racism and anti-Semitism immediately. Because if you, for example, anyone listening, or yourself, Jim, you go look at this uh website 4chan.com, which is uh regulated. There are people there stopping things from being posted largely a lot of the time, explicit threats of violence and so forth. But if you go there, you'll quickly see it's just scummy. It's so fucking scummy. It's it's overt racism, uh it's porn that rise straight to the top, and that's what a little bit of regulation looks like. Zero regulation is just chaos, and that's HN, and that's um and then you go one step down and you go Reddit, which is heavily scrutinized, but then people will still complain it's not scrutinized enough. And then you go one step down and it's currently what you have on Twitter, which is so manicured, so much shit is manicured in there. I don't see Elon actually free speeching it up and just saying anything goes now. You know, this is a public square, you shouldn't be shut down for saying uh something wrong. I I really I just can't see it happening. And I think Elon will also have a marginal impact on the business. He'll run the business like he runs the rest of his businesses, he'll put in good people and then he'll just have the final say on things and just weigh in. He'll take a phone call. Um, but getting rid of it, you know.

SPEAKER_01

Undoubtedly, we're we're we're going to uh you know there's there's progress that can be made, I guess, in some of these things. I don't understand what he's gonna be doing then because I I understood him to say that this sort of this is really going to be anything goes. I don't I don't think he's he's he said uh he hasn't clarified as yet. This is very cryptic.

SPEAKER_00

Uh and I'm kind of like if it if it does become a place where anything goes, the business will fail completely. People will will not want to be on it because the thing that will rise to the top is the thing that gets the most attention and it's gonna be really disgusting crap.

SPEAKER_01

Well, if you look at the new Twitter followers that are coming on stream and the ones who are leaving, you see today that uh uh Marjorie Taylor Green has got 65,000 new uh followers. Ted Cruz has got 45,000 new followers.

SPEAKER_00

I'm kind of saying this, I think that's actually I I honestly, Jim, I saw that as well. A bunch of people saying, Thank you, Elon Musk, since your shadow ban has been lifted, I've gained 50,000 new followers. I think a lot of them are talking major bollocks. And at the end of the day, Twitter probably will become a more conservative space because Twitter also did suppress conservative voices. The same thing happens on Instagram. Um, you know, you there's a really famous jujitsu player called Gordon Ryan, and he's got a very popular Instagram account, and he's a conservative guy, he doesn't talk about politics, but he talks about he criticized the government a lot. And he's shadow banned, right? You know, you cannot actually find him in a search. You have to be sent his account. Um the same thing happens on Twitter, and I think it's been um evident to people that that does happen on Twitter, and so unfortunately, well, unfortunately, fortunately, who's to say? But Twitter will likely become a more conservative place, but it doesn't mean that you are gonna get away with saying whatever you want. Um, if Donald Trump comes back on and starts saying a bunch of bull crap, he'll get kicked off again, and then he maybe will come back on again. Um that's how it should be, right?

SPEAKER_01

Permanent bans is a I think there's there's a couple there's a couple big issues here. One is that just in principle, I don't like the idea of uh billionaires being able to buy uh influence and sure buy influence. Which is very common speed.

SPEAKER_00

And there's actually sorry to interrupt you, Jim. Keep your keep your your your flow going, but I just want to add on to the end of that point. Um there is a great article that criticizes um, it takes a very critical look at Elon Musk buying Twitter because it is a very, very effective marketing medium for his brand, which his brand then can support Tesla, SpaceX, Boring, Neuralink, everything he does. He has one of the most effective media outreaches in his Twitter account, and then by owning that company as well. So if you want to be skeptical about it, 100% it is uh total market manipulation by buying media, literally to promote your products. But I think that's the skeptical view and not not introduce.

SPEAKER_01

Well, I don't know. We're gonna have to see how it plays out. I I hope we stop talking about it after a while here. But I was hoping that we would get out of this one thing that might come. I I mean, I I don't think we want to have uh a fragmented uh you know sort of universe, but there's something unsavory about the idea that um Lord Delaware is going to come in and buy up uh Jamestown and uh and tell everybody to go. Well when you put it that way, it's unsavory. You know. Um so I'm feeling like one of the Indians who put a lot of work into this uh uh the content that is there, and you know, sort of a certain amount of pride that I kind of uh uh was one of the most more active Twitter users. Um and now I just don't know how to feel about you know contributing more to it because it's it's somebody else's. You know, I know that it was owned by Wall Street firms like Vanguard and you know, but it was a a bunch of different investors is different, I think, from the idea of having um one dominant owner official, whether it's whether it's Bezos or Twitter or you know, or I mean or but I suppose time will tell Musk. Uh time isn't really on our side here, you know. We we have a lot of issues that we have to decide uh to get right here, and I think screaming at each other on Twitter and having a more uh uncivilized uh medium is is is like uh one of the issues is you know what are we gonna do about some you know one of the darkest problems with uh the Trump um phenomenon and with the um you know the the uh what's going on in the Ukraine, uh Butler and uh uh you know, the all of these distractions is we have some real work to do in the US uh economy and also in the world economy to get climate uh uh kind of crisis under control, and that's just not being done. The Biden administration has been unable to get really meaningful climate legislation through. So in a way, uh this is all kicking things down the road that need to be done dealt with. And so I you know, I mean maybe we should all spend no time on Twitter and start just organizing people to have a a carbon tax, you know.

SPEAKER_00

So there's a part of me that actually would would would be happy if Elon destroyed Twitter because then I would not be distracted by going on it and you could be a little bit well productive with your time.

SPEAKER_01

I mean, it's a pretty simple thing to just not not uh you know to not participate or just uh to do it once a day or something like that. That's uh well it's yeah, but the scientists are not a simple thing. It's it is addictive. No, no addition. No, no, no.

SPEAKER_00

There's a dopamine rush by loading the new tweets and looking at your notifications. No, what have I missed? I mean, uh exactly 100%. So I find it.

SPEAKER_01

One of the things that's really interesting about this is this uh phenomenon of the you know, the sort of the uh uh you know, Rousseau have this concept of the uh you know the wise savage. And so you have people like um uh Joe Rogan kind of coming to the fore here. Joe Rogan with I don't know how many followers he has, but he has a very, very profitable podcast. And um what is that? You know, what uh it's um uh uh you know, you want to look down your nose at it. On the other hand, you have to give the guy some credit because he's basically tapped into something that the mainstream media wasn't uh you know, he was beneath them to provide fora for you know people who had uh different views. And so, in a way, what rogue what uh what Musk has done is to kind of roganize Twitter. I mean, he's basically providing a platform, it's not clear how far he's gonna go in this direction, but uh of just wide open Twitter. But uh he's basically made the case that you know somehow, whatever he means by this, he's gonna make it uh uh much more open and less uh uh you know less censurious. So um you may be right that we'll come back in a year and say, you know, it it uh really didn't make much difference, and Twitter is much the same.

SPEAKER_00

Pretty much, yeah. I think that'll happen. But also don't discount this, Jim. You're very well aware of the role that social media played in the election of Donald Trump and in the uh support for many populist movements internationally around the world. The worker Peter Pomerantsev uh wrote about this explicitly, episode number 57 of the podcast. Basically, Twitter enabled that, Facebook enabled that. As much as 20%, apparently, 20% of Twitter users are bots. They're not real people, they're just there to push propaganda and support other propagandistic messages. That is a complete and abject failure from a publicly traded company which has all of these um values that they s that they want to signal out to the world, but in reality dropped the ball and failed. And if Elon can come in and clean that up in a couple of months, he's already added more value than the previous owners could have. Yeah. I just think he has uh I hope he has the attention span here to uh But that's the other one.

SPEAKER_01

I don't want to just I was it won't be him. It won't be him. Yeah, he'll put some Someone good there. Simple as that. Let's hope. But the other thing is uh, you know, you mentioned uh the elections. I mean, we tend to have a very uh kind of parochial view of uh uh these issues, but uh you take a platform like Facebook. I mean Cambridge Analytica was a great example of where uh you know whatever Putin was doing in the United States elections, uh it was clear that Robert Mercer and uh Cambridge Analytica and SCL had gotten themselves uh a whole lot of data from Facebook, you know, that probably they knew they were selling, that allowed them to intervene in Kenya elections, 2013-2017 presidential elections, basically manipulating the heck out of tribalism in those countries. And uh, you know Kenya has something like 65% of Kenyans watching uh Facebook, surprisingly enough. And uh this uh uh uh impact of trolling profiling people and then targeting media that was inciting riots in in Kenya. People actually died as a result of this uh Cambridge Analytica experiment experiment. And the whole team that was working in Kenya uh during that period then went into uh working for Boris Johnson. I mean, the the key manager was the the woman who worked in Kenya managing the Cambridge Analytica team interfering in the uh the the election uh in 2017 also switched over to Brexit and was managing uh that effort as well. So, you know, this stuff kind of goes around, but it isn't as if Twitter is the only offender here uh and you know Zuckerberg is fine. Um we've had lots of different uh the moguls here to to uh choose from. And you know, sort of uh they're all guilty of sin.

SPEAKER_00

There's no doubt about it.

SPEAKER_01

They have their their track record of actually having taken I mean if you go on the Washington Post, you can see um uh I mean I I have good friends who write for the Post uh in a long time and that you know basically they've kept the the institution going. But if you ask them what their policy is toward corporate taxation, um, you know, that they have uh editorialized against progressive taxation. It's not one of their favorite issues, and why is that? Well uh but it's not as if we're waking up to the first uh billionaire or the first mogul who has had uh a media uh chance to show what he can do with media. I mean, we've had Murdoch, you know, we had uh the the long history, sordid history of uh the the Daily Mail in the UK uh back in the 30s, uh, you know, the uh endorsing Hitler and Mussolini. Um there's a long trend. Uh uh Yeah, exactly. So it's it's not like we haven't been here before in some sense, and I I'm I'm always open to seeing, you know, sort of completely different things happen. But uh, you know, the definition of insanity is kind of expecting something different. Uh you do exactly the same thing. So here we will have the next generation of mogul come in and take over media.

SPEAKER_00

Um let's see. I I don't think that there is a malicious, um overcomplicated reason for Elon doing it. Uh I think Elon largely uh speaks what he's saying. He speaks you know, if you watch, I've watched most interviews with him, if not all interviews with him. Uh and for sure, he's got behind the scenes PR people advising him maybe how to say a thing, what a certain thing he shouldn't say is, but it's it's it must be so hard to maintain a facade across so many different appearances. And the the the takeaway I get from him is that he's extremely authentic and he says what he thinks. Uh-huh. And when he says that he's buying Twitter because he thinks that it is the societal uh town square and that free speech is incredibly important, I I do take him at his word for it. And so um if he fails, it'll be because of it'll just be because it's exactly that, a failure. But it won't mean that his intentions are bad and he's some sort of conservative right wing uh enabler, you know.

SPEAKER_01

Well, I think that part of the part of this is generational. I grew up in a generation in a generation when we had uh, you know, Robert Kennedy and Martin Luther King and uh people uh in the public domain that were really admirable people who were, you know, they had their faults, but they were uh you had the sense that there was leadership and uh there was talent and people were volunteering to kind of step forward and be in those roles.

SPEAKER_00

And and you don't get that from Alan?

SPEAKER_01

Um I think he's a bit of a fraud. And I think I wish he would go back to what he does best, which is to drive management teams to you know excel at these particular um hard problems that he's trying to solve. You know, when he talks about nuking Mars, um when he goes after people, there's a long litany of cases involving racial and sexual discrimination involving his plants in the sil in the Silicon Valley.

SPEAKER_00

You're talking about sexual discrimination, John F. Kennedy and Martin Luther King. I mean, said that fault. Sure, but if we're gonna judge Elon by the worst things said about him on the internet and the amount of internet exposure he hasn't been that bad.

SPEAKER_01

No, I I I'm not uh what I want to get out of the model that we I mean, I I guess I would love to see us be, you know, sort of less needy when it comes to uh leaders these days. I know we have a real leadership deficit, but I don't think that the answer is more uh leader princip, you know, more adoration of the Fuhrer. Um, you know, the uh I mean this is getting to be a little bit of a cult around him than it was around Trump Trump. And I I don't think his his I haven't studied his messaging, but it's a little bit cryptic. He doesn't I would love it if he would actually try to write um, you know, two pages.

SPEAKER_00

No, but Jim, he's got he's got Asperger's. He's on the spectrum. You know, he he Okay.

SPEAKER_01

There that that I didn't know.

SPEAKER_00

I mean, you listen you listen to him talk. Um there's lots of arms, it's it's very imprecise, but and that's also why he doesn't, you know, write long articles. Although there is precedent of him writing articles in defense of Tesla in the early days.

SPEAKER_01

Um but so he's my friend Walter Isaacson is writing a book about him. I'm sure this will all come out.

SPEAKER_00

Really?

SPEAKER_01

Um your friends that you're just name-dropping now, Jim.

SPEAKER_00

Yeah, I'm just name-dropping my friends I haven't talked to for 20 years, but uh, well, you should alter him up because he speaks in very glowing terms about Alon. Oh, I know I know.

SPEAKER_01

Walter turn Walter is uh a groupie for these people. He's like the court biographer he loves to, you know, sort of uh he wrote a uh he's written b biographies of uh Da Vinci Jobs. Yeah, people who you know there there isn't a uh common touch in his body. You know, there's a there's there's no interest in uh class struggle. Uh there's no interest there's no interest in ordinary people. It's always these exceptional, you know, the great man theory of history. Um you know, if you look at, I mean, I did uh an article back in the 90s about why Bill Gates was Bill Gates and uh trying to, you know, dent his reputation. And I, you know, it's sort of I I got the whole story. You know, if you go and dig into the investigative stuff, you usually find out what I found out about Gates was that uh basically IBM had uh uh this team of people they were developing uh software for the uh uh PC. And because they were IBM and they were a mainframe company, they gave the uh the job to the typewriter division. And so they flew out uh two executives to California and to Seattle looking around for software for this uh new computer they were trying to come up with. And the first place they went was to a guy named uh Gary Kildall, who you've never heard of. But he had a company called TCM, which at that point had 80% of the personal computer software market. But Gary was too busy flying his plane, and he couldn't meet with the guys from IBM. He canceled the interview, and they said, Well, shit, you know, we're who else can we call? Let's go up to Seattle. There's this guy, Bill Gates. He has uh an op he has a knockoff of a basic eight uh program, and we can get at least get that done. So they went up to meet with Bill Gates in this you know, sort of tiny office. Uh, and they said, uh, by the way, we're looking around for an operating system. Uh do you have one? And he said, you know, by the way, I think I do. I mean, I've been working on it, and you know, I'll I'll get back to you. Anyway, long story short, Gates uh uh calls up a friend who had done a knockoff of TCM's operating system for the personal computer. And they they got a hold of that and they licensed that to IBM. And uh that was the origin of it was the fact that Gary Kildall was flying. So the the bottom line was, and then there's a whole host of other stories about Gates'. You know, he was always late. I mean, Lotus did the first spreadsheet and then he ripped it off. Um but uh he was great at marketing, you know. I don't know. I think my impression is that uh Alon is smarter than Gates and more of his own engineer. But basically at this level, you sort of say, um, why do monkeys have teeth? Because all of the monkeys who didn't have teeth didn't make it. And there are always in this at this situation, you can find ten other companies or ten other entrepreneurs who were doing the same thing. I'm sure you could do the same thing with electric vehicles, with PayPal, with any of them, and you know, and and the reason they they um I mean I was at a company in 1990 when we looked at a PayPal Pay equivalent, and he said, PayPal, PayPal is just a simple, stupid thing. We have all this fancy software, you know, we can do. It was just like, we don't, those guys are so low. It's such a simple application. Nobody will go for that. You know, that was that was a fateful decision that we made.

SPEAKER_00

Uh it's amazing, isn't it? Like life can be understood backwards, but it it must be lived forwards, and the sort of graveyard of potential that exists out there. You know, this guy whose name I've already forgotten, forgotten, who was too busy flying his plane.

SPEAKER_01

You know, what we need to war we need to be careful about is uh this kind of idealization of uh the um unique uh sort of leaders. And that's a path that I just think we ought to resist. The way forward is to try to encourage lots of people uh to be leaders and to work uh collaboratively and to not trust people who have visions uh and and money because when they when they have the combination of vision and money has a bad history. Yeah.

SPEAKER_00

So I think I don't know how they do it. You know, I hear stories about the good old days, these great memoirs and biographies that I like to read, and I feel like just as a person here myself, um, I mean we speak about this offer all the time. You know what I'm trying to do, but like ambitious, I have time, I can work really hard, I will constantly reach out to people, but I feel like I just hit brick wall after brick wall. I'm not sure how people can organize labor and capital in this economy. It it's it it just feels like back in the day, a few phone calls, a couple of sh you could shake a few hands. These days no one answers the phone and people screen emails, and so it just it shuts down all this potential serendipity. And I don't know, um I just don't know what the what what the what the solution is. And so you see a guy like Elon Musk and you think this guy, he just studied physics. He wasn't that exceptional at all, but he studied physics, he worked really hard, he created Zip2 with his brother. Great, that's that's uh exceptionalism. Congratulations, you made, I think, 200 million dollars. You start a new company, you put all your money into it, x.com, you merge with PayPal, PayPal becomes what it is today. You then reinvest all your money and buy it by an electric vehicle manufacturer, the owner of which did nothing with the company but decided to completely slander Elon once the company became good because Elon started saying he was the founder of Tesla, which isn't true. He's the founder of what it is today, but technically not. You know, he then puts all of his money into creating spaceships. He doesn't have the technical expertise to understand how a s how a rocket works, yet he somehow organized the labor and capital to do it and then taught himself on the job. Like, I get what you're saying, you need more leaders, but Elon is just the most r ridiculously inspiring person because as someone who's trying to do something on an incomparably smaller scale and failing continually, you just look at these people in admiration and think, how on earth do you do that? It is amazing, and you deserve the accolades that you get, and you want to then defend them against people who try to bring them down.

SPEAKER_01

And um well, I'm not I don't know, I'm I'm not trying to bring him down. I'm trying us to be a little bit more realistic in terms of the uh the track record that we have, which is to build institutions and uh democratic institutions, and uh capitalism is not a democratic institution, it's kind of a dictatorship at some level.

SPEAKER_00

It's winner-take all.

SPEAKER_01

It's written into the winner. And you're quite right, he's uh been able to overcome serial failure failures, but I mean everyone has serial failures, and uh and and uh you know, so every entrepreneur that succeeded has been kind of go through going through this process.

SPEAKER_00

And it's also worth saying he's gotten tremendously lucky, you know, in in in all the other potential universes that we could be living in. Tesla and and and SpaceX both failed, and Elon is now uh in in upper management at some bank.

SPEAKER_01

I mean, I think that that's the basic that's the basic reason why we need uh you know stiff wealth taxes, because otherwise uh you have essentially a process that's partly driven by human talent and and and individual uh distinction, and but a lot of it's driven by biological providence. And you know, so uh the the uh the sheer fortuities involved here are are a great reason for saying, you know, look a lot of this is a lottery. So why are we not taxing wealth? Uh, you know, you really think that Elon would not be Alon if he had uh 50% wealth tax and half of his wealth went to the you know, sort of uh fund uh it doesn't have to fund the federal government, but it could uh be devoted to you know sort of uh feeding people.

SPEAKER_00

Yeah. Well it does it is easy to resent when you see nepotism happening. Uh you know, I I want a little bit of nepotism. Uh I want someone to, you know, just well push me five steps up the the ladder, you know. Right.

SPEAKER_01

Right. Well he had a his dad had an emerald mind. I think that was a big deal in Zambia. So uh, you know, uh but uh you know there are a lot of successful white South Africans. Uh they all they all start from scratch and make themselves uh you know right um hold on one second.

SPEAKER_00

So I decided to leave that little bit of audio in at the end there, Jim's magnificent uh ringtone. But um yeah, I think that was uh an interesting chat, and it was uh fun actually to get to say a little bit of my opinion on this topic, since I realized now we're almost a hundred episodes in, and although it might be obvious what my interests are, it might not be particularly obvious what my opinions might be on some things. So it was fun to speak about that in a much more conversational style rather than the more serious and restricted interview format that it might more typically be. But look, I actually I want to make a general appeal um to you because I know that there are thousands of individuals who download this episode, yet I really only know a handful of you by name. Um, you know, don't be shy. Reach out. I've got Twitter and I've got Instagram. Both of those I will respond to DMs on. I'd um I'd just love to know who it is that's listening to the show. Simple as that. Um and so finally, yeah, my ambition for the podcast is to corner the podcast market for eclectic curiosities in whatever country it is you're listening in from. So again, this is the first time you're hearing the spiel. I'm gonna make it rather redacted because I don't want to uh start to bore and annoy those who listen to through to the end every week, although I'm sure they wouldn't. But how does one corner a podcast market? They need to have the requisite representation in the different podcast distributions. So it needs to be on Apple charts, Spotify charts, overcast charts, and the rest. How does that happen? Reviews. So please, I would ask you before you leave onto your next task, whatever it is, please swipe up your phone, go to Spotify, leave five stars, swipe up your phone, go to Apple, and also leave five stars and a very nice comment, and then stop every single individual you meet for the next hour and insist that they do the same. So thank you very much for listening. Hope you enjoyed it, and until next time, ciao.