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Language: en
If you've ever looked around and
wondered why things feel broken even
when you're doing everything right, the
story sounds simple enough. The rich are
hoarding money and everyone else is
getting screwed. But what if that's not
even close to what's actually happening?
The explanations we're being fed might
feel good, but they don't hold up.
Today's guest, Daniel Priestley, is here
to expose what's really behind the
economic freak show that is devouring
young people. This episode is going to
shock and validate you. Strap in because
I bring you Daniel Priestley.
The uh debate that you did with Gary
Economics, it really showed a thing
that's happening. The resentment that
young people have for the economy. Yeah.
What on earth has happened to build up
that kind of anger? The economy is
dividing in two. So what's happened is
that we've gone from a very much a bell
curve economy where if you're uh an
average person, then life's pretty good.
Take the 90s for example. It was
probably the best time in history to be
average. If you're average, you get a
house, you get a car, you get travel,
you get everything. All resources have
moved towards the middle. And then the
thing that technology does, technology
creates inequality. So we got to have a
look why is economic why is economic
inequality driving so hard and fast in
the last 20 or 30 years. And to me it's
obviously technology. And I I start with
an analogy. And the analogy is if we
were to run a marathon and we had 50
people who are running on foot and then
we gave some bicycles to a few people
and then we gave some cars to a few
people, it would be completely obvious
why there is a massive inequality in the
time because a couple of people are
leveraging technology and a couple of
people are not leverage leveraging
technology. So, I've personally
experienced this because I've grown up
in a small town where everyone had very
normal jobs that didn't really leverage
technology. And then I've ended up as a
software entrepreneur and I've built a
global business where we have clients in
150 countries and all of that just
happens magically like like just magic.
And then people might talk to our
customer success team and it's an AI
agent and they may not even know they're
talking to an AI agent. So I'm seeing
that companies and people that um invest
in tech and that are leveraged by tech
uh have this huge advantage. So what's
now happening especially since co is
that we've got an acceleration happening
in the USA over 18 million people
describe themselves as digital nomads
now. Wa yeah it's huge and millions
millions more describe themselves as
work from anywhere. So we are seeing
this group of people who who are on a
bicycle. They're using YouTube channels.
They're using uh automation. Uh they've
got software companies. They're they're
no coding or V vibe coding, you know, uh
customuilt applications that make their
life easier. And then you've got this
majority of the population that are just
playing by the rules that the school
system gave them. The school system
says, "Hey, don't form a team because
that's cheating. Uh you know, don't be a
disruptor. That's cheating. Don't be an
attention seeker. That's cheating. Um,
and the school system basically says
what you're meant to do is become
skilled component labor and find an
office or a factory or construction site
and go out and plug yourself into
somebody else's machine and become a cog
in their machine. And if you do that,
you'll get well looked after. And of
course, those rules have changed. Okay.
uh when I look at the economy, while I
concede all of the points that you just
made, when I look at the economy, I say
the problem is debt and money printing.
So, it's interesting that you're
stacking a another problem on top, but
one is um debt, money printing,
inflation, is that anywhere on your
radar problem? Totally. So, capitalism
is such an incredibly powerful system
and it gets better and better and
better, but then it gives birth to two
children. So child number one is
technology and it creates technology
that's awesomely powerful and it creates
a disadvantage to those who don't use it
and a massive advantage to those that
do. The second child is called finance.
Now finance is different to capital. So
capital is money accumulated from the
past and finance is money brought back
from the future. So in up until
1970 the capitalist system ran on
capital. So, imagine a scenario. Uh, I
want to invest in something, a business.
I go to my dad and I say, "Dad, can I
borrow
$10,000 uh because I'm going to start a
business." He looks at the business plan
and he says, "It's a bit risky, but I do
have $10,000 saved up. I'm going to lend
you the money. I've evaluated it based
on the risk and the reward, and it's
from the past. I saved this money up,
and now you can take a risk with my
capital." Finance works differently. So,
finance. Imagine you go to a business
coach and you say, "How much is it to
get business coaching?" And the business
coach says, "Uh, I charge $10,000 for
business coaching." You say, "I can't
afford $10,000." So, the business coach
looks at your business and says, "With
my help, you'll be able to afford to pay
me $1,000 a month for 11 months. So, I'm
going to lend you my business coaching
now on the condition that we create an
agreement that you will continue to pay
me into the future." So what the
business coach has done is brought money
from the future back to the present to
get you what you want
today by accessing future cash flows. So
that's finance. So what we had in 1970s
was a dominant capitalist system running
on capital and what we've had ever since
is a capitalist system running on
finance. We figured out how to finance
everything. The other switch is the
ability to forecast. So it was
incredibly difficult to come up with
cash flow forecasts and assumptions
prior to things like Excel spreadsheets
and and all of that. Once we created the
technology to look further forward into
the future, once we collected enough
data, the smart people at the world of
finance could say, "Oh, wait a second.
We've got a spreadsheet that says that
we can get you to afford this car. We've
got a spreadsheet that says we can get
you to into this house. We've got a
spreadsheet especially for governments
where we go, "Oh, you've got this many
taxpayers paying this much tax. Oh, we
can bring forward all of that money
through um a banking license and we'll
actually just print that based upon the
future forecast and bring it forward."
And initially it uh frees up a huge
amount of productivity. So in the early
days of uh central banking and bringing
money forward from the from the future,
all of that money hits an economy that's
starved of productivity. All sorts of
things could have happened that weren't
happening and suddenly there's a
productivity boom. However, very rapidly
we burn through all the productive
investments that you could make and
suddenly it's all just
consumptiondriven stuff. So, initially a
productivity boom, then a consumption
boom by bringing money from the future
and then we run out of productivity and
consumption needs and we go, "Oh, now
the economy is stagnant." Um, so should
we stop bringing money from the future
or should we slow this process down? No,
we can't because we need we need
interest payments as well. We better
pile money back so that we can make
these payments and that's where you
spiral out of control.
Was there anything in um Gary's approach
that surprised you? I'd be a little bit
rude. I was surprised that when I talked
about the differences between different
taxation for someone who's an economist
and someone who's wanting to advise the
country on tax um he had a very low
resolution view of the differences
between taxing profits, revenues and
wealth um and he almost just cycled
between profit, revenue and wealth
without distinction. Even when I talked
to him about when I was trying to
explain about inheritance tax versus um
uh the taxes trusts pay uh periodic
taxes. He didn't understand that there
were just multiple types of taxes. He
just kept obsessing that this number is
smaller than my income tax. I wasn't
prepared for him to just have such a
very low resolution view of it. I know
that's so rude to say. I I mean it's
hard to say when he's not here in the
room to defend himself. But um but yeah,
that that surprised me. The more that I
learn about the economy, the more that I
learn about how uh the economy actually
works, the more shocked I am that this
is how things go. But then the more that
I look at the way that the next
generation is responding to it, I really
am surprised by how much they're leading
with emotion rather than going into
problem solving. What's the solution?
Mh. Uh, and so the
the popularity of Gary's message I both
get because I think he has his finger on
something and I will do my best to steal
man it and really represent it in good
faith on the show for sure. I would
literally have him on in a second. Um,
but in the meantime, I'll do my best to
represent where I really think they're
coming from. I have been surprised by
um that they're getting caught up in the
what he says feels right and therefore I
don't care if it is right. That doesn't
surprise me. He's a mirror of of the
anger that is in out there. Exactly. Um
so I was I was prepared for that because
I'm connected to so many people who are
angry and upset and I'm angry and upset.
There's no part of me that wants an
unequal society. What? But what are you
angry and upset about specifically?
technology. No, I'm angry and upset that
uh young people who work hard um are
told, "Oh, it's because you're having
too much avocado on toast or it's
because, you know, you're not
entrepreneurial enough." I I feel
annoyed that it's been so obvious for 20
to 30 years that we need to change the
schooling system, that we need to
provide different opportunities, that we
need to prepare our economies for this
stuff. And we we've done none of those
things. And we've got a generation of
people who have been prepared for an
economy that just doesn't exist anymore.
So, I'm upset about that. I'm upset that
the government just seems to make really
short-term knee-jerk decisions. We're
not playing a big picture strategy game.
We're not thinking 100 years into the
future and what, you know, what it means
today. And now we have this group of
people who think I'm the bad guy. Um
because I've built some technology
companies that have scaled up, I'm on a
panel having to defend creative
entrepreneurship and not and to
basically say it's a bad idea to overly
tax entrepreneurs because they are going
to be the engine room of the economy and
they can do this from anywhere in the
world. One thing that I really wish the
whole world could understand is
something called the clinical method
that was created in the 1700s. And it
basically distinguishes clearly between
symptoms, causes, and treatments. Uh,
and it basically says what are your
symptoms? What are you experiencing?
What's the pain? And then it says let's
keep an open mind about what might be
causing that. Let's have a look at the
potential things that are causing that
pain. And then only when we understand
the symptoms and the causes do we then
assign a treatment plan and then we test
and measure to see if the treatment plan
is is different. Now, when you see a
debate between someone uh who has, you
know, a view that's perhaps left leaning
and a view that's right leaning, it's
often the case that the left-leaning and
right-leaning person can identify the
same problem and agree on the problem.
And then they're looking at what's
causing it and they might disagree on
what's causing it and they certainly
disagree on how to treat it. What is
really upsetting is that a lot of people
would look at me in my response to
Gary's comments and say, "Oh, he doesn't
care about people. He doesn't recognize
that there's a problem. He doesn't
recognize that people are hurting. Of
course, I recognize all of those things.
Of course, in in that experience, I
totally agree there's a huge problem,
but I just massively disagree on the
causes and the treatments of that
problem. Okay. So, uh, it seems like a
pretty reasonable reaction if
technology, money, printing, debt, all
of it is splitting the wealth and so
that you get ultra haves and ultra have
nots. That you would just go tax the
life out of the billionaires. Literally
tax them out of existence. I hear that
said a lot. Billionaires shouldn't even
exist. Uh, why is that flawed thinking?
There's a couple of reasons. socialism
and that sort of thinking sounds like
the right thing to do. Um, it sounds
like a great idea and it's not new. You
know, Karl Marx came off the back of uh
something called the angles pause. Uh,
it was 50 years of inequality caused by
the industrial revolution from 1790 to
1840. Um, we had all sorts of massive
inequality, people on the streets.
Charles Dickens was writing about that
particular time. Oliver Twist, all of
those kind of things. Same idea.
Industrial revolution as technology, the
people that use it, massive advantage.
Exactly. Same idea. So, new technology
comes in, the industrialists boom in
wealth. Um, and then you've got a
disenfranchised peasantry that have come
off farms and agriculture and have been
displaced off their farms. They're now
in the cities. They've got nothing to
do. They don't have the skills. They're
lining up for food in factories. um
slums and squalor and all of this sort
of stuff. So the the issue is
that when socialism is
tried, it builds a large state
government to administer larger and
larger amounts of money. Um and that
creates an even bigger compounded
problem. I mean, wouldn't it be nice if
a computer system perfectly reallocated
capital to to different people and that
and then those people had productive
things to do with that capital and all
of that sort of stuff just reorganized.
But it doesn't work like that. You have
to then extract the wealth from the
billionaires. So, you got to identify
what is their wealth. Where is it?
You've then got to extract it. That
poses its own problems because
billionaires in the same way that I say,
"Oh, the way to beat Roger Federer at
tennis is just slam the ball really
hard." It's like, "Yes, but he also
knows how to play tennis and he can
return the serve." So, he knows how to
return the serve really well. So,
billionaires also know how to move their
money out of jurisdictions. They know
how to play the game. So, identification
is an issue. Extraction is an issue. And
then you need to administer it. So, you
now take this money on. What is going to
happen with a government that actually
gets a new income stream? They're going
to go to the central bank and they say,
"We have a new income stream." And the
central banker says, "Well, this is how
much you can leverage that up. You can
leverage that up 20 times." So, if
you're collecting another 10 billion
from these billionaires now, you can get
200 billion worth of more debt. Um, so
we've built a system where if you do
that, you're going to compound the
problem. But on in addition to that,
you're going to fundamentally change the
system so that there's almost no benefit
to winning. There's no there there's no
benefit to innovation. Now, capitalism
does actually have a really good answer
to this. And the answer is not that you
just simply take everything off the
billionaires. Uh the answer is that you
enforce competition. You break up their
empires. And to break up their empires,
in the industrial age, an empire was
based on just nothing other than scale.
It was all about big scale. So we took
standard oil and we said, "Hey, we can
break that up into I think 30 different
companies." And they said, "Once we
destroy that scale and you all have to
compete with each other, then the
markets get restored." The modern uh
monopoly is based on ecosystem, not
scale. So let's take Amazon for example.
uh you've got the shopping side, you've
got AWS, you've got content, you've got
Whole Foods, supermarkets, uh you've got
uh all these different types of
businesses that's that sit together and
it makes it extraordinarily hard to
compete with any one of them. If you
were to attack the retail stores with
competition, then they can be supported
by the online retail. If you were to
attack the AWS business, it could be
supportive of the other businesses. So
you end up with this ecosystem like a
ginormous um bouncy castle that you bump
into one side and it does nothing
because the other side absorbs it and
and returns the favor. So it's it's a
very difficult problem. Now the way you
handle this problem is you recognize
that the nature of monopoly has changed
and you break up ecosystems. So you take
uh Google and you say Google, you guys
going to have to float YouTube and it's
going to have to stand on its own two
feet and it's going to have to compete
as its own business and you're also
going to have to break off Google Mail
and that's got to compete on its own.
This all sounds good for the
entrepreneur, but for somebody who's
like, "Bro, I can't afford a house. Like
break up Google into a gazillion pieces
and that does not allow me to buy a
house." Got it. So where where are
people going wrong? The issue with
affording a house is that we do have a
in the UK especially, we have a housing
traffic jam. We actually have 9.4
million big family homes with two people
living in each of them. So we have uh
9.4 million homes that have two or more
spare bedrooms. So we actually have big
family homes, but there's no incentive
to sell down. In fact, there's a
disincentive. we have a tax called stamp
duty that actually means that if you do
sell your big family home and buy
another smaller, more appropriate house,
you're going to pay taxes on that. Um,
so the vast majority of people who have
a big family home, they bought it in the
'9s. They've paid it all off. Uh, they
can live there very, very cheaply. The
kids come back for Christmas. It makes
total sense. But we just have this
housing traffic jam. The only the only
buildings that we build for housing now
are like apartments and flats. So you
end up with all these people living in
condos because there's plenty of those
that are affordable and then no one gets
a big family home because those are
stuck with the baby
boomers. There are some countries that
had a baby boom earlier than our baby
booms. Japan, Germany, um Italy. And
what's actually happening now that their
baby boomers are just that little bit
older is you can't give property away.
So if you go to Japan outside of like
super urban crazy, have you seen this?
Yeah. How cheap the houses are? Yeah.
There are houses that you can buy if you
pay the taxes on the houses. So outside
of the super urban Tokyo, obviously
that's a bubble. It's its own thing. But
if you go outside of there, there are
beautiful homes in Japan that that you
can get if you pay off the taxes that
are owing. You can buy a village in it
in Italy for a million. A village? Yeah,
a village. A village. Yeah. You want a
village? I thought for sure you were
going to be like, "Sorry, sorry, not a
village." No, no, a village. You can buy
multiple houses with a church and a town
hall and Yeah. Like little villages in
Italy. In Italy. Yeah. Okay. I didn't
see that one coming. Italy is now trying
to get people to go there by offering
€200,000 a year flat tax and that's all
the taxes you will ever pay uh per year.
One of the points that Gary made in the
interview, again, Gary as a proxy, I
think he really does represent something
that people are going through. So, I
don't mean to I'm not trying to pick on
him or uh overindex, but uh he said
something in the uh debate that went by
really quickly and nobody said anything
about it, which was um I don't want to
redistribute, but I do want to force the
rich, I don't remember what exact if he
said billionaires or wealthy or
whatever, but I want to force them to
sell their assets so that the assets go
down in value so that the average person
can buy the assets. Yeah. Um is that the
right goal? I love how simple sounding
solutions to complex problems make me
feel like I feel really good when
someone says, "Hey, here's a simple
sounding solution to a really complex
problem." I'm like, "Ah, that makes me
feel a sense of relief." But then you
look closer. So what happens when the
assets within a country come crashing
down is that foreign buyers massive
private equity funds from around the
world come in and buy those assets cheap
and then there is no asset ownership
within the country. Then you begin then
you then you walk down the path of being
a a completely closed economy. The USA
can be more um uh exclusive than other
economies. The USA is a special case.
There is US exceptionalism um built into
the system and for multiple reasons
mostly geography. Um but for most
countries they have to be free and open
trading countries. We just don't allow
people to do this this this no foreign
investment. Um you can't have uh
intellectual property crossber
intellectual property rights. We're
going to do tariffs. We're going to make
it illegal. We're going to do all of
that sort of stuff. That is a race to
the bottom. You are now basically moving
in the direction of North Korea versus
South Korea. Um, so if the goal, say
more about that. Why would that be true?
I I'm the government. I'm really trying
to be deaf. I understand what my people
are going through. Um, I want to do this
with a scalpel.
Why am I on the wrong path? Let's go
back to the the first principle of why
this is all happening is that we built a
system on the industrial age. And the
industrial age, the operating system of
the industrial age is geography.
Geography is the most important thing in
the industrial age. It's all about
geography, land borders, um, and and
geographical part trading partners. And
the first thing that's written into
every government is the geography of
that government, you know. So you have
the London city council and the um
British government which covers this
territory and uh, you know, the
Californian state government which is
here's the borders. So we're dealing
with a fundamental operating system
called geography. The digital economy,
the cloud economy doesn't respect
geography at all. So if I have a digital
business, I can be I can have my company
in one place, I can live in another
place, I can have my team in 30 other
places, I can have my customers in 150
other places. Um, and none of that slows
me down at all in a geographically
unlimited place. As soon as you start
making a geography undesirable for
productive people and making a geography
undesirable for investors and and for
you know um uh highly productive
creators then essentially you almost
freeze it in time in the industrial age
while the rest of the world's moving on.
um you know, for example, if those sort
of draconian
uh laws and taxes continue in the UK,
I'll just leave. Like I I will leave. Um
and it's very easy for me to leave. And
there are plenty of countries that will
give me amazing deals to go. We'll get
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back to the show. This is such a natural
instinct that needless to say this has
been tried before. Uh so what what can
we see by looking through history when
you start just ratcheting up taxes on
the wealthy? what actually happens. Uh
well, we Yeah. So, some great examples
would be Argentina, North Korea versus
South Korea is a classic example. East
Berlin versus West Berlin was would be
another example. Um the USSR versus
Western Europe. Um ultimately, these are
all examples of what? High regulation
versus lower regulation, big government,
big tax, high regulation, um closed
borders, um you know, all of those kind
of policies. Uh they're all examples. um
where the where we've had A versus B
testing. So, we've actually done an A
versus B test. We got South Korea that
said we're going to trade aggressively
with the world and we've got North Korea
that said we're going to be completely
insulated. Um which one would you rather
live in? Now, North Korea has great um
great scores for um income inequality.
Uh everyone earns nothing, right? So,
it's it's nice and equal society. So if
your primary goal is equality, is it I
mean there is always going to be an
elite starving to death. There's one
family that's not starving to death, but
if you take the the millions of people
uh the vast majority of the population,
they have equality. They've got equally
got nothing. Um and then you go to
Singapore, Singapore has income
inequality, but it also has the like the
best economic conditions of Southeast
Asia. Um it's the place where people are
dying to get in there like like you know
like it's the best thing in the world if
you can get yourself into Singapore if
you're in Southeast Asia. Um you know
there was it was very clear which way
people ran when the fall of the Berlin
Wall happened. You know there weren't
there weren't people living in free
markets who were trying to get
themselves desperated. think is it that
people think um it can be handled more
deafly this time because when you look
at history and the examples that you
gave are great and I don't know how
familiar people are going to be with
them people I think will know North
Korea South Korea you can see it on a
map at night North Korea is just black
there's nothing there's nothing South
Korea is vibrant I think people go
that's a cartoon like don't give me that
example but then okay cool then let's
look at East Berlin and West Berlin it's
literally the same city divided in half
same idea another Great example is
Poland. So Poland was part of the USSR
and uh part of like the Eastern European
U thing, low productivity, you know, uh
low like poverty uh like high poverty,
low productivity, um you know, really
desperate situation, people trying to
get out of Poland. And about 10 years
back, they start aggressively going
towards free market capitalism and you
know, making sure that they can trade.
Really 10 years ago. It was around that.
Yeah. Well, that obviously it's 50 years
since they were in the USSR, but then
around 10 years ago, they really said,
"Hey, we're we're going to go rule of
law, re really big on rule of law. We're
going to go like double down on
entrepreneurship, lower taxes, better
conditions for starting companies, and
they're the fastest growing economy in
Europe." I don't know this story. Yeah,
Poland. Poland's a great story. Um then
you get Germany, one of the most
talented, productive, respected
manufacturers in the world. Um they go
down the socialist route and um uh you
know, they get the Green Party in there
and it's all about uh hey, we're going
to be, you know, making sure that we can
push for equality and we're going to,
you know, remove the incentives and high
t really high taxes and all this sort of
stuff. And they've just flatlined like
completely flat or or they're dropping
precipitously. Um from what measure?
GDP. GDP per capita. Um uh the levels of
poverty are rising. Um crime is going
up. Uh all all the things that you don't
want to happen are happening. Okay. Um
you and I are both I think we might be
mad as hell for different reasons, but
you and I are both mad as hell and we're
not going to take it anymore. Gary's mad
as hell. He's not going to take it
anymore. Millennials mad as hell. Not
going to take it anymore. Uh, but we're
going to have to map out why I think
we're all mad. Uh, so, okay, you broke
down the three things. Maybe we're all
mad for the right reasons. We see that
the income equality is problematic. It's
really becoming hard to move from
lowerass to upper class. Obviously, it's
actually not true. I was about to, I
think, make a false statement. maybe
know the data better than I, but uh
certainly people that are upper class
have a hard time generationally keeping
it. They lose it. I think the rate's
like 60%. 60% drop out. Yeah. Uh but I
think we've had more people join the
upper class. The upper class is at an
alltime high. Yeah. So fascinating.
We're hollowing out the middle class.
Okay. So if we're going to put our
finger on that, if you actually have a
look at the middle class, um the middle
class is kind of like drifting down, but
it's caused by people going up to the
upper class. So and down though, right?
And then there's a slight increase in in
poverty. So it's mostly but it's
actually if you look at the the data,
it's actually that a lot of people are
are joining this. U one there's there's
a very big frustration that when you and
I were kids, we did not have any insight
whatsoever into how other people lived.
There was maybe a TV show called
Lifestyles of the Rich and Famous. There
was a few tabloid magazines that showed
houses that people lived in, but it was
not in your face. Um, occasionally, like
me growing up, I saw I probably saw one
Ferrari on the road in my entire like
life up until age 20. And I remember it
going past and going, "Wow, I just saw a
real life Ferrari in the wild." Um, so
there just wasn't there just wasn't the
same exposure to lifestyles of the rich
and famous. Today you are just bombarded
with, oh, here's a 17-year-old who
floated his company on the NASDAQ and
here's a 23-year-old who has 16 cars in
the garage and you know, so there
there's also a sentiment that this is
amplified. Is it just that people are
now able to see it or is there really a
problem? No, there's there's there's
going well even if there wasn't a
problem, there's going to be a problem.
This problem is going to get big, really
big with AI coming in. Like AI is going
to really accelerate the difference.
We're going to spend a lot of time
talking about AI, but before we get
there, I want to make sure that people
really understand what's happening now
so that they know how they can get out
of the biggest. Let's let's stay at this
problem level. The biggest problem, the
number one problem is I can't get a
house. That's the biggest problem. If
you benchmark your life by your ability
to buy a house, this is the worst time
in the last 100 years to or 80 years to
be able to try and get on the housing
ladder. It is disgusting. Why? Uh well
because the government inflated currency
and anyone who owned fixed assets like
houses the the houses inflated alongside
the currency um and the essentially the
value of labor is dropping because of
automation and technology. So you get a
double whammy of labor kind of like the
value of your time and labor and skills
going drifting down. At the same time
the government's inflating up and the
houses are keeping pace with inflation.
So what those two things have done is
they've said it used to be that your
income times four is how much the house
is that you would live in and now it's
your income times 9. Woof right that's
the big one. So and that just feels
completely unattainable. So for
example the house that I live in in
London it's a massive sevenbedroom house
beautiful garden and all that sort of
stuff. It would have been a house that
a pretty like if you look at all the
people who've owned that house, I don't
necessarily think that you would have to
be a global entrepreneur super like
winning entrepreneur of the year or or
being a bestselling author to get that
house historically. Um whereas it it now
feels like if you're going to live in a
a big house or if you're going to buy a
big house, you better have sold a
company. like you like you have to have
done something really extraordinary to
get what would have been a big family
home uh not that long ago. Uh you know
it probably would have been a doctor's
house or it probably would have been a
dentist's house or it probably would
have been someone who was you know a
senior manager in a factory that
employed 100 people or something like
that. Uh maybe it would have been you
know someone who worked at a senior
level of a newspaper. I don't know. But
it wouldn't have it wouldn't have felt
like uh impossible because if you were
to take the historical value of that
house maybe uh you know you earn 100
grand and it costs 400 grand. Well now
if you earn 100 grand you're going to
pay 900 grand for that. Right. Right. So
this anyway this housing problem getting
on the housing ladder trying to get on
the housing ladder while it's still
inflating. I'm going to give you my
breakdown on the money printing side and
how we end up here. If you think I'm
going wrong, let me know. But I think
it's very important that people
understand this. So, every time somebody
gets the privilege of being the reserve
currency, they abuse it. And they abuse
it by bringing on debt. And the reason
that they can bring on debt is because
they know they can print money out of
literal thin air uh counterfeit money to
pay off that debt or the interest if
they need to. Uh certainly what the US
has done, this is exactly why we're 36
trillion dollars in debt because we know
that we can print money to cover things
like the 2008 housing crisis, when banks
fail, the auto industry at one point. I
mean, just on and on and on and on and
on. We can print our way out of it. Uh
people mistake the buying power of the
dollar going down for asset prices
actually going up in value.
There are times like Austin's usually
the example that I use where you have a
massive influx of people because Austin
just got cooler and so people are like,
"Oh, I want to be in Austin." And low
tax, right? And so people flock in low
tax, got cultural energy partly because
of low tax, uh, attracted people and now
those property values begin to go up,
like actually go up. There are fewer
properties and so they're worth more.
Now, most of the time, your house isn't
actually going up in value, unless
something like that has happened to your
neighborhood. What's actually happening
is that what your dollar buys is going
down. And so, the price of the asset
goes up in order to match um the amount
of lowered invalue dollars, you would
need to buy that same thing. Because
people understand a house as an asset in
a way that they'll never understand
shares in a company because you can't
live inside of a share in a company. not
going to make cool memories with your
kids with the shares in the company, but
man, you can like raise kids in a house
and like you really attach and people
just get it. Yeah. And so when that when
the buying power of the dollar plummets
and the house holds steady at like
purchasing power essentially, it seems
to be going way up in value. So people
think, "Oh my god, like we've got to
push people buy a house, man. This is
the greatest way to make money." when in
reality it's basically just a forest
savings account that cost you a fair
amount of money to update taxes. For a
long period of time, a long period of
time, houses were just seen as a
utility. Like they were just like my
grandparents never thought about housing
as something that would make money. It
was housing was just utility. You you
live in a house because you need to live
in a house. It was not an investment
vehicle and it probably would have more
of that vibe if it wasn't for money
printing. Exactly. And so getting people
to understand this, this is my hobby
horse. My audience will have heard me
talk about this a gazillion times, but
money printing becomes the problem.
Money printing is immoral in my opinion.
The government ought not be doing it.
Federal banks probably shouldn't exist.
I'm doing a much deeper dive on that
now. But like the the fact that people
do not understand money printing to me,
even though I buy into what you're
saying about technology, I get that.
That feels like another nuanced piece to
the puzzle. But like the big offender in
all of this from where I'm sitting is
the UK uh took the sterling when they
had the reserve currency and knocked out
99.9% of its value. The US is rapidly
doing the same over the last 100 years.
The dollar's gone down well over 90% in
value. Um and so that creates this
illusion that the asset prices are going
up. Yeah. And there are also good
reasons that people fire up the money
printer. Um because when money is a
fixed uh in fixed supply, you run out of
it. So for example, if we did have just
gold coins, as your economy becomes
super successful and you're producing
all sorts of new value in the economy
and and incredible innovations
happening, you actually just run out of
gold coins and it becomes this real
problem. the the market forces money
printing um in one sense because it
starts creating IOU notes. Um so for
example, if we ran out of gold coins and
you and I wanted to trade and neither of
us actually had physical gold coins, we
would of course create a trusted IOU
note um out of thin air in which case we
can like you know do that and then a
small circle around us start to say oh
yeah I trust Tom's uh IO IU note so if
you've got one I'll I'll I'll start
trading it. So, uh, I think before the
greenback, there were 300 US currencies
and they were basically IOU notes
because we ran out of physical products
to trade. The history of money is crazy.
Most people do not understand it at all.
But, uh, that PSA is merely me trying to
get people to understand your dollar is
declining in value. Your house isn't
going up in value. But it's also
important to understand it's not like
some evil, um, you know, boogeyman comes
along and says, very evil.
Okay, I'm happy to like have this
debate, but know that I become wildly
unhinged. So, uh, so yes, so yes, the
evil guys get in a room and in Jackal
Island and they come up with the plan.
However, he means that literally Jackal
Island, it's the whole thing. Read the
book. Yeah. Uh, so, so yes, the evil
guys show up and do that. But it's
unavoidable. It doesn't know evil guys
will show up and and they'll you know if
you if you put food down ants are going
to come to it when you hit this
particular problem then the evil guys
have to come along and come up with some
additional plan right and the issue is
is that you can't have a fast growing
economy. It's very very hard to have a
um to have a sound money approach
because you your economy grows so fast
with capitalism that you eventually run
out of the actual trading mechanism. So
uh there are there are inherent inherent
problem inherent problems in the in the
mix. It's not like a oh let's just go
back to sound money. Sound money is also
a problem. Okay. So, man, dear dear
audience, I'm we're going to drag you
into some of the complexities here for a
second. Uh, if for no other reason than
I'm I was very impressed with how many
of the details you actually understand
about this and so we'll we'll find out
where each of our edges are of what we
actually understand because I certainly
do not understand at all. And truly, as
the island down this rabbit hole more
than I am, I'm way way way down and
we'll see what happens. But uh I am
hyper aware that as the um island of my
knowledge grows, so has grown the shore
of my ignorance. Interesting. So
unfortunately, the deeper you go, the
more you realize, oh my god, like this
spirals and spirals. It's a complex.
It's a complex system. Wildly complex.
When America was founded and Alexander
Hamilton effectively invented the modern
economy, the modern version of
capitalism that has justly rewarded so
many people. um he knew debt was the
problem and they were trying to break
away from England and the abuses of
money that England was doing because
England was the reserve currency before
currency. Yeah. So you guys went down
the same path and he was like okay this
is a human nature thing. You put the
picnic out the ants are going to come.
He was well aware of that and he said
okay look you need the ability to use
leverage aka debt in order to pull some
of that future gain forward to actually
make something now. So I will often tell
people, hey, look out my window and you
can see downtown Los Angeles. That is
what aggregated capital looks like. When
you either have saved and you apply it
or you pull it forward through finance,
but either way, when you aggregate
capital, you can build incredible
structures. Architecture is just an easy
way to see what it looks like when you
can pull a lot of capital. That's a
great point. So aggregating capital is
incredibly powerful. Alexander Hamilton
looks at that and he says, "Okay, we
need a mechanism for leverage." So, we
need a mechanism for debt, but we need a
counterveailing weight. And the
counterveiling weight was whenever
you're pulling money forward, you have
to have a repayment plan. And you have
to say, "This is how I'm going to pay
for it. This is when I'm going to pay
for this by." And he said, "If you don't
do that, the debt begins a spiral and
you have to print and you get
inflation."
And we just didn't listen. Yeah. And so
the very thing that the man who invented
the US Treasury uh warned us about is
exactly what's come to pass, which is
debt that just spirals out of control.
And you mentioned this earlier that you
run into an interest problem. And right
now in the US, the in interest on the
debt is larger than we spend on defense.
And it will rapidly become larger. UK uh
it's twice what we spend on defense. Oh
my god. So, this is exactly how this
madness spirals out of control. The
interest problem is another problem a
lot of people don't understand. And I
love to tell what I call the 11th marble
story, which is essentially if you've
got a brother and a sister, and the
brother says, "I've got 10 marbles." And
the sister says, "I want to borrow those
10 marbles." And the brother says,
"Okay, but you got to pay back 11,
right? You have to have the 11th marble
has to be um paid back to me, and then I
will borrow lend you the 10." So the
sister has the 10 marbles and then pays
one, two, three, four. Gets close to
having the 10th marble. I've got one
marble left, but I owe 11. Right? And
then the brother says, "Hey, you've been
so
responsible in paying back. Why don't I
give you back these nine marbles as a
new loan, but now you owe me 12?" Right?
Because the 11th marble doesn't exist.
Yeah. Right. So there is no 11th marble.
So what actually happens if you keep
playing that game, eventually the sister
owes the brother 20 marbles and then the
brother says, "Oh, you're so
irresponsible. Here I am. I've been
lending you all this money. You're
bankrupt." And the poor sister's saying,
"But like I've been I've been paying as
much as I can and I just got myself
spiralled into debt." The 11th marble
never existed. When we lend money into
the economy, we lend it with the
condition of interest. So we lend a h
100red billion into the economy on the
condition that we pay back 110 billion.
Yeah. But the 10 billion doesn't exist.
So the only place that you get that 10
billion is out of massive productivity
increases. You have to have huge
increases in productivity or you have to
pull it out of the ground in oil and
gold and those sorts of things and and
and or or actually food. um you create
productivity and just to really make it
problematic if you pull those things out
of the ground too fast it causes
deflation and you have another problem
on your hands. Uh sorry you well I was
just saying eventually deflation in
price but you have an inflation in
currency because but you end up hitting
this point where there there is no 11th
marble. Um, so when when central banks
keep lending, so what they do is they
lend lend lend lend. This is the evil
part. They lend lend lend lend lend lend
lend and then when you run out of your
marbles they go so irresponsible. Now we
have to put a VA. Now we have to put a
sales tax on everything. And then if we
do that then we'll then we'll reset
things. And then you play the game again
and they go so irresponsible. Now we
want to put death taxes in. Now we want
to put inheritance tax. H, you know, you
guys are so irresponsible. Now you have
to give back all those buildings that
the government owns, right? Keep going.
Yeah. Because eventually you hit, drum
roll please, war. Yeah. And uh the the
crazy thing is this has been given the
worst name in the world. It's called a
debt jubilee. When you get to the point
where you realize, oh, no one's ever
going to be able to pay back this debt.
It is too much. And people just say, I'm
not going to pay you back. I'm not
giving you the 8,000 marbles that I owe
you. You or owe you. Uh, you only gave
me 10. Yeah. And uh, end of end of the
Monopoly game. End the Monopoly always
ends the same way. I'm not playing
anymore. Yeah. Um, I'm done. You win.
I'm done. I'm not I'm not going to keep
going around the board. And what we're
seeing now is end of Monopoly game with
uh, Gen Z. They're just sitting there
going, there's no way to get a house.
There's no way to uh, go on holidays.
There's no way to live like the
Instagram influencers. Um, there's no
great jobs going. Uh, I'm I'm done. Uh,
and you know, Gen Z turns up to the job
interview and says like, "What's the
work life balance situation here? I
wanna I wanna Yeah. I want to work
remotely and I want to do as little as
possible. I'm going to lay flat." Yeah.
So, that's the end of the Monopoly game.
Yeah. We'll get back to the show in a
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now. And now, let's get back to the
show. Um, I'm going to paint a way
darker picture of the end of the
Monopoly game. It is Russia invades
Ukraine.
Israel uh levels Gaza. Iran gets the
Houthis to uh bomb things. China and US
are locked in what's known as
Thusidities trap. It is it's not the
only way out, but it is by far the most
common. So this is a loop that repeats.
It's known as the big debt cycle. Yeah.
And at the end of the big debt cycle, at
the end of the monopoly game, people
usually go to war or revolution. But
blood flows. It It's the only way to get
people to be okay with, hey, all that
money I owed you, I'm never paying you
back. The only way to make people okay
with that is you just kill so many
people that people like, I don't care
anymore. Fine. and I accept what's known
as a debt jubilee where all the debt is
forgiven and we start over and then
whoever comes out the other side of that
gets to be the reserve currency and they
will do it again and it takes somewhere
between 150 and 250 years and it's
happened in the last happens over and
over 500 years happened almost five
times. Well, this is uplifting. This is
uh this is not uplifting. This this is
the thing that I know you're kidding,
but this is the thing that absolutely
terrifies me. And for the first time in
my life, listen, I'm wealthy and I don't
think anybody escapes this. And so
that's the thing that freaks me out is
uh where do we go from here? So I watch
the debate with you and Gary. I'm
tearing my [ __ ] hair out because I'm
like uh you're saying all the right
things, but he's beating you on emotion.
Yeah, totally. His feels right. Yeah.
Yeah. Like I find myself wanting to be
on his team just because Yeah. Yeah.
Yeah. Like [ __ ] those guys. Like give my
money back. Like what the [ __ ] Yeah.
But literally as I go down the path of
finance, the more I'm like uh
the the game itself is it's
fundamentally rigged.
And no one has shown me, which is what
you're here for, Daniel. Yeah. All
right. No one has shown me the bloodless
way out of this. Let's explore
something. Um, for most of human
history, the backdrop of the economy
didn't change massively
uh across a 250ear cycle. Um and like we
had the agricultural age which lasted
thousands of years and we had the feudal
system which emerged as the main system
uh of government which was essentially
kings, queens, lords, dukes, vic counts
all of those sorts of people and then
the professional class who surrounded
them and protected their you know their
their future and then the peasantry
surfs uh who like so you the deck of
cards is based on this. You've got king,
queen, jack, and then you've got 1 to
10, which is the peasantry, the faceless
masses. Um, and they're they're very
different. You're never going to look at
cards the same way again. Oh, I'll I'll
go deep on the cards if you want to know
what's in fascinating in the cards.
Well, okay. Well, the cards represent
four types of power, three types of So,
there's there's um uh clubs which
represent strategy, hearts, which is
relationships, uh spades, which is hard
work, diamonds, which is uh refinement,
insights, data. You've got jack is
trading, queen is virtue or
institutions, king is dominance and
military and government. So you've
actually what's the ace? The ace
represents the very bottom of society.
The ones in society who when they get
pissed off they become elevens and
overthrow the whole king. Right. So this
gave me the chills really or is this
like conspiracy? No, it's No, it's built
into the system. No, it's this is there
are there are 50 uh 52 cards, 52 weeks.
There are four seasons, four suits.
There is 13 cards per suit, 13 weeks per
season. All the cards add up to 364 plus
the Joker is 365. So you've got an
access of time. Then you've got an
access of society and how societyy's
structured. This was done on purpose.
They said, well, the elite created games
and simulations to try and teach their
children how to run society. So you have
chess and you have uh playing cards as
the uh two tools that we still have
today from that time which are training
simulations as to how to run society. Um
and essentially it's all bu baked into
those simulations. So chess and you know
you know you've got your pawns and then
you've got your elite uh the king queen
and the bishop and the you know the
castle sitting there behind um and
there's there's a Why then are you
trying to capture the queen? Oh, you're
not trying to capture the queen. You're
trying to capture the king. Um, but the
queen is checkmate. I don't know
anything about checkmate. Oh, no. No.
Capturing the king is checkmate. The
queen is one of the most powerful
position. She can go anywhere. The king
can only move one step at a time. Um,
yeah. So there's there's a lot baked
into this and it's a it's a strategic
way of thinking. But the the deck of
cards uh is a very ancient system for
training an elite understanding of
society if you know how if you know how
to interpret it. You you got to
understand what they tried to bake into
it. Um that's so interesting. And the
four energies are really important. I
actually use this with business. The
four energies is big picture, strategy,
which is clubs, brand, culture,
community, hearts, hard work, execution,
um day-to-day task management, spades,
uh and refinement, data, improvement,
diamonds. Um so like those four things
are really great lenses. Um and then
there's a kind of a natural cycle that
you go from one to the next. Uh and then
the joker is the the fun, the purpose,
the why. Why are we doing this in the
first place? the joke uh that we're all
in on. Um so anyway, um where was I
before that? We were going to give me a
much less dark view of how we get out of
this. So we have so we have a so we've
never had a society
where so we've had the feudal system
which lasted thousands and thousands of
years and then technology changed things
and we had the industrial age which was
call it from 1800 uh to 2000. So, a
couple hundred years, probably a little
earlier, maybe 250 years when you kind
of depending where you want to start the
clock.
Um, so what we have that's different
this time is that we're going through an
extremely fastpac reordering that is
very very similar from going from
agricultural age to industrial age.
We're going from the industrial age to
the digital age. So, we've actually got
one system in decline. So the entire
system that you and I went to school for
which is offices, construction sites,
manufacturing plants, uh the most
efficient use of time uh was to organize
skilled labor under one roof uh and to
create a co like a set of cogs that pass
value to each other to um with in an AI
world uh being a high agency generalist
would be far more valuable than being a
a high-skilled specialist. Um, so we
we're we're going through a huge
reorganizing where we're now seeing
teams of 10 people who can do tens of
millions. We're seeing uh people who've
never met or been in the same room
physically who can work together for
years at a time and feel like they have
a connection. Um, we're seeing products
where small businesses launch a product
and they have 150 countries that they
share that product with. We have people
like yourself who have permission free
access to the media and have built
millions of subscribers. So we now have
this digital age which fundamentally
tips all the rules of economics from the
industrial system on its head and we
have the industrial age which is a
geographically limited system based on
these limitations around factories and
workplaces. And this system's in decline
and this system is meteorically rising.
And you can just simply see this if you
look at people uh who work in in and
around intellectual property, media,
data, and tech um versus people who work
in traditional jobs. People in
traditional jobs are experiencing
decline and they're miserable about it.
People who work in intellectual
property, media, media, data, and
technology are in meteoric rise and
they're pretty happy about it. Um so we
have one system in decline and one
system
increasing. Throughout all of history,
we have a big reason to go to war, which
is that we number one, we don't know who
would win, right? That's a good reason
to go to war. Um, number two, that's a
terrible reason. That's I'm not saying
if people don't take it, when I say when
I say it's a good reason, if if people
are absolutely certain about the outcome
outcome, no one goes to war, right?
Mutually people that are going to lose
anyway. Mutually assured destruction,
ironically, was one of our greatest
peace strategies. Having nuclear weapons
on both sides of the fence meant that no
one went to war because they knew the
outcome. So when the outcome is
uncertain then you have a hot war. Um
people went to war because it was very
very hard to communicate you know so how
do you um you know how do you interpret
uh these these languages and all of this
sort of stuff. Um it was very very hard
to understand what was what what
resources were available and sharable
and all of those sorts of things.
technology solves a lot of those
problems, you know. So people, you know,
people who went to war from Britain with
German soldiers were very easily able to
dehumanize and um, you know, other the
people on the other side of the trench.
Um, whereas we're now having a different
situation where a lot of people have
lived and worked in Germany. They've,
you know, Brit Brits and Germans are
very close. Um, there's easy, you can
easily interpret. You can actually just
have an AI that simultaneously
translates a conversation. You can talk
to anyone. This does not feel true to
me, but I don't want to derail us here
just because Russians and Ukrainians are
killing each other on mass World War I
style. Absolutely. Yeah. But you'd be
you'd be shocked at
how like compared to previous wars,
how like un ineffective a Russian
invasion has been in Ukraine. like
historically Russia would have
steamrolled through and taken not by now
three years in they would they would
have had 12 countries by by this point.
um you know this has been largely
contained to the eastern front and it
really hasn't moved um you know like so
and it hasn't do you think that's
because there's emotional connection I
mean I'll move us over to Israel
Palestine and they are just hammering
them hammer hammer hammer
technology has not brought them together
much to my dismay no I'm not saying
technology or like technology isn't a
cure all for everything. I'm just saying
this time there are some differences. Um
I am I am saying that we do have a
system in decline at the same time as a
system in in the rise. These are two
very incompatible systems. We are going
to see the breakdown of this system and
the and the and the increase of this
system. Let's go back to the house
though. So totally by system in decline
rise system that is a great way to think
about this. Uh, but is it going to lower
the cost of a house so that people
because until money printing isn't a
thing, you must own assets. It it is it
is a non-negotiable. You will get eaten
alive by inflation if you don't own
assets. So, this is going to make a lot
of people angry what I'm about to say.
Um, we we largely have to respond to the
times that we're in and say every
generation gets its opportunity and
those opportunities are going to be
different. Our younger generations have
different opportunities that our
ancestors would trade their arms and
legs for. That is um we have incredible
opportunities that are the opportunities
of our time and our parents and
grandparents had an opportunity of their
time. So the opportunity of the postc
world war era was to get cheap property
and to have it massively inflated by
government. Oh god, I feel where this is
going. The opportunity of our time is
not that. Yeah. Right. The opportunity
of our time is like if you if you were
to take uh an ancestor, your ancestor,
my ancestor, pick an ancestor from any
period of time and bring them forward to
today, how would they view the world?
They would probably say, "Why are you
worried about owning a house? You can
own your own YouTube channel. You can
own your own business. You can have a
global business selling to a global
audience. You could travel the world and
actually be in all sorts of places at
any given time. You could rent a place
here for three year 3 years and then
change needs and rent a place here for 3
years and then change your needs and go
here for and change your needs. Daniel,
I love you. That's madness. That's
madness. This is this is why people are
going to chew through the wall uh when
they hear this. So, let me tell you why
I think you're headed in the right
direction. But that is You're right.
People are going to hate that one. But
this one, I think they have a reason to
hate. Um, inflation is real and if you
don't own assets, your dollars are
depreciating over time and it's fast.
Okay, let me let me talk about owning
assets. Then you you can so at every
level there are certain assets you can
get on the housing ladder with you can
get on on an asset ladder with. Um, so
Bitcoin is obviously an easy one that
anyone can get even with a small amount
of money and that tends to be ahead of
inflation. Same with gold. Um then there
is uh then there is actually smaller uh
houses that you can rent out to other
people right so every time you buy a
house not to live in but to rent it
comes with an income stream uh so the
you can actually access the capital to
buy that based on the income stream with
a small amount of commitment small
amount of deposit you might say oh I
can't afford like I might say hey I earn
couple hundred grand a year let's say
the house that I would be comfortable
with would be several million a couple
of million, right? Nine times what I
earn. However, I can't afford that
house, but I can afford a few smaller
houses where I am actually holding my
wealth in those houses, accessing
finance and all of that as a protection
strategy from inflation. So, I can own
properties that have tenants, but I
can't own a big house that I would
personally live in right this minute.
So, there are different assets. You
know, this is the greatest time in
history to own shares in big companies,
right? There's never been a better time
to just index into shares. my my
grandparents and parents wouldn't have
had any awareness of how on earth they
would buy shares in the US market and
and hold those shares. You know, an
amazing time to to to either pick some
blue, you know, top quality stocks or to
index across the S&P 500. Now, I don't
know what it is in the UK, but it's like
55% of people own stocks and 45% don't.
So, roughly half half. Yeah. So, so it's
a great time to to get more people doing
that. we're just not educating them or
why like these answers exist but people
are not taking you up on a lot of people
just don't have any money available to
to do this financial educ like financial
literacy financial education the other
thing too is there just is always
winners and losers like it it sucks we
both agree that the middle class you
said in the '9s it was like you could
just be the average person and win now
the average person is losing let's
explain what's causing that though it's
caused by technology and inflation and I
think inflation is 98% of it. No, that's
not necessarily true because the same
sort of jobs don't exist as what used to
exist. Think it's not the only picture.
It's not the only picture. There was a
postwar Let's talk Are you going to stay
on this point? Cuz I want to fight about
it. Let's let's let's start with me
qualifying where I'm coming from. Okay.
The postw World War II era and then
let's lock horns. The postw World War II
era was a very special era. There was a
massive amount of destruction and and
things needed rebuilding. So there was a
huge construction boom. Construction
booms are no joke. Look at Dubai. It's
mostly fueled by putting up buildings.
There's a huge economic engine in
building stuff. So um constructing
things, building things, you know,
rebuilding UK after the blitz, huge
amount of money going into productive
investment, which is the rebuilding of
the economy. Women largely hadn't
entered the workforce. So you had a
labor shortage relative to today. um
that any job that needed doing had to be
done by a man. Uh in the UK, 300,000
people died. Um so we actually had
another labor shortage where we just had
300,000 less young men uh who to do
those jobs. Um so there was a labor
shortage, there was a construction boom,
then add a baby boom. Now baby boom,
they just went and had the biggest
population boom. And all of that baby
boom, we needed schools when they came
of school age. We needed hospitals for
them to be born in. We needed shopping
centers to sell nappies and baby food.
Uh we needed bicycles for when they all
got their first bicycle. We needed to
print uh and publish records when they
all got into music and wanted to listen
to the Beatles. We then needed uh to get
them more houses when they hit when they
wanted to move out of home. So we had
this lump of huge lump of people that
needed an unprecedented amount of
resources to accommodate that lump. So,
in advance of that lump, everything that
they touched bmed. Uh, in 1970s, they
all wanted a used car. Do you know what
the 1970s was kind of known for as a
boom? The used car boom, right? Used car
salesmen had gold chains and disco
suits. They were making so much money in
the 80s. They wanted home appliances.
They wanted uh stereo systems. Sony
boomed because they gave them what they
wanted. They then wanted credit cards.
Boom. MX. Uh, Visa, right? Boom. Um,
then they wanted to fill their houses
full of furniture. IKEA, boom. Walmart,
boom. Um, so everything the boomers
touch, they boom, right? And you know,
the same people who were screaming at
the Beatles are now in retirement.
They're actually in their retirement
years. So they're screaming for
healthcare and they're screaming for
these things. And they've also
accumulated this. The generations after
the boomers are smaller than the
boomers. So we actually have surplus
created by the boomers which now doesn't
require economic activity to absorb that
surplus. So the boomers boomed all these
things like houses and hospitals and all
this. We don't have a population pyramid
anymore. We have almost like a chimney
stack. So that post-war
era that is a very very special time in
history where we needed lots of jobs. We
needed uh we had lots of houses and
cheap houses. the the demographics were
different, the technology was different,
all of those things were
different. That is you can't just simply
flick a switch and then say, "Oh, let's
go back to that middle class era." If we
then look at the technology, the
technology of the day called the factory
or the workplace or the office. It was
an amazing technology that had a
superpower. And the superpower, let's
call it an office building. superpower
is take anyone of any skill level, plug
them into this big machine and you will
get some sort of economic output from
them that will be
normalized. The economic output of
Arnold Schwarzenegger or Danny DeVito on
a factory floor is almost the same. So,
if you had Anie sitting next to Danny
DeVito and they're both working together
in a factory, there's not a there's not
a a huge opportunity for Anie to go that
way and Danny DeVito to go that way
because the factory environment
normalizes the economic output of each
individual regardless of differences.
Same as the office environment and the
construction environment. These are
environments that just normalize value.
Now, if the environment is normalizing
value, everyone gets paid the same and
everyone's happy about that because they
can kind of see I roughly do the same
amount of work as this person. Now, as
soon as you remove those guardrails, as
soon as you take the walled garden out,
if you've got Michael Jordan up against
me, the differences are going to start
showing, right? So, or or or Arnold
Schwarzenegger up against Danny DeVito
or Einstein up against a normal person
or Cindy Crawford up against a normal
person. Suddenly, as soon as you remove
that wall garden, you just go, "Oh,
boom. We're going to go up. You're going
to be paid this and you're going to be
paid this." Right? So, now we don't have
a middle. We actually have widening
inequality based upon the fact that we
don't have a a collective environment
that normalizes value anymore. So this
new economy that we're in
unfortunately is a lot
like a athletics. It's a lot like the
music industry. It's a lot like the pub
book publishing industry that you end up
with people who are uh in the right
place at the right time with the right
talent getting extraordinary results. Um
so it's called a power law a power law
of distribution. So the digital
environment it creates or the 9010 it
creates a power law distribution over
here the old world is a bell curve
distribution but unfortunately that bell
curve distribution was created by the
technology of the day and this
distribution is created by the
technology of the day. All of that
sounds true. Uh totally buy into all of
that. The reason that I think the much
bigger problem is money printing is
because you make it impossible for
somebody to save their way to success.
So there are great stories of uh back in
the day a janitor who's making um less
than a poverty wage is still managing to
put some amount of his money away.
Usually if they're going to get a
return, it's into the stock market.
Okay. So, they figure out that you can
buy assets. Uh, for the person that's
putting money under their bed, the
problem ends up being that if they put
$100 under the bed, it literally becomes
10 cents. And
the reason I think you're so right about
houses is that people understand them.
You don't have to teach them. You don't
have to make a really complicated card
game. It's just you can live inside of
it. People get it. Oh, put my money in
that. That's the thing that will allow
me to retire. Cool. I get it. I live in
it. High utility and it will let me
retire. The thing that people understand
intuitively about money is I make $10.
If I only spend nine, then I get to keep
one of those dollars and they're going
to add up over time. Once you break that
equation and the intuitive thing to do,
save my money, buy a house. Those go
away and now you can't afford to buy a
house. Yeah. and let me let me put a
button and I can't save it because
you're inflating it into nothing. So
that while I still have $100 in my bank
account, it buys $10 worth of goods in,
you know, whatever 25 years. So now
people are forced to play a game they
don't understand. The stock market,
Bitcoin, uh all those things. And now
you're getting into the real thing and
this is the grotesque thing that I think
nobody wants to talk about. The power
law distribution that you're talking
about is intelligence. And so now what's
happening and intelligence the most
intelligent people are winning massively
and the most emotionally reactive are
losing out and they're going to let you
know about it and that ace is about to
become the 11 and clean the deck. And so
I'm like, [ __ ] I'm looking at this and
every time I try to think through like
what's going to be the solution. There
are only two things that present
themselves to me. Number one is AI makes
energy cost and labor drop to zero. Now,
anybody can have whatever they want for
free. You have meaning and purpose and a
meaning crisis that you're going to have
to deal with, but hopefully the genie
coefficient thing will cease to be a
problem. So the genie coefficient for
anybody that's never heard of that is uh
it actually doesn't matter if you're
rich or poor measure of um measure of
social mobility, right? It's comparing
yourself to somebody else. So um I'm
wealthy, but if I hang out with Elon
Musk, I'm going to feel broke. And so it
is the discrepancy of the people around
you. So you were talking earlier about
social media just makes it possible to
see everybody's living a better life
than you. Uh and so that's part of the
derangement because the human animal
just has that locked in their mind.
Okay. So anyway, uh AI, that's one
potential solution. The other is that um
hot wars, people are just going to lose
res revolutions because they they don't
have the intellectual horsepower to win.
It's not like um you can create a system
that will work for them. They they just
don't have the intellectual horsepower.
And so you've created a setup that you
call technology, but it is uh I think
again wildly influenced by the way that
the economy works, the way that money
creates in in um inequality, but they
can't do the basic things. Yeah. Buy a
house, save your money. Those two are
off the table. And so once the thing
that everybody understands goes away,
what are you left with? So if AI doesn't
come through, like what do you see? Is
there like it history says debt resets
through violence? That that's the punch
line, Tom. Stop worrying about it. It's
going to happen. Sorry that you're
living through the moment. You just
happen to be one of those people. Is
what it is. Or or economic collapse.
Yeah. But social unrest, economic
collapse, vi violence would be an
element of that. Um, I don't necessarily
buy into the idea that um, it's just
uh,
like one of the things that our
grandparents wouldn't have had access to
is that you pull out your phone and
rather than saving your money, you just
put it into an index fund effortlessly.
And it just like literally you round up
every purchase, any spare money, and you
just pop it straight into S&P 500 um, or
gold or Bitcoin. The confused mind says
no. and all of yeah but I'm just saying
there are effortless solutions that
actually currently exist for people that
understand it for people who understand
I'll come to that right so there are
effortless solutions available now if
there are effortless solutions available
then the gap is education and training
one thing that I'm really clear on is
that we created an education system to
prepare us for a world that no longer
exists one of the things that has to
reset is that we have to re look at how
we educate people. So, uh it it's utter
madness that financial literacy isn't
taught at school. It's utter madness
that technology and understanding how
technology and those kind of jobs would
work. It's it's crazy to think that
we're kind of preparing people for a
blueprint of office jobs when most
people are going to be working in remote
teams on several plural projects.
They're going to have a plural career.
um they're not going to go 15 years of
education, 25 years of being a junior um
technician, five years of being a
manager, five years of being a leader,
15 years of retirement, then death.
They're not going to do that. They're
going to do super fast-paced creative
loops. And those super fast-paced
creative loops are essentially, you
know, the way the economy, it's a it's
going to be a high velocity economy. And
we're not preparing people for any of
this sort of thing. um when you talk to
people of even below average
intelligence and explain here's how to
here's how to index your money against
inflation and here's how to like here's
an easy way to do this there are apps
that have done this with education
modules built in anyone who um downloads
and uses those apps start starts to
pretty clearly do this um so it's not
like solutions aren't available
technology has provided plenty of
solutions we're just not training people
or educating people in fact doing the
worst thing possible. We're educating
and training them for the wrong thing.
We're telling kids, don't team up to
answer your questions on an exam. Do it
on your own. Well, that's not how the
world works. Don't be an influencer or a
disruptor or an attention seeker cuz
that's bad. Well, that's actually that's
really good. You're an attention seeker
and you get a lot of attention and it
pays the bills. How dare you do that? In
a really good way. Um, when a kid is bad
at maths and really good at history, we
say, "You need a maths tutor." We should
be saying, "You need a history tutor,
right? Forget maths. You're not that
that's not your strength. Go all in on
this history thing." Um, you know, like
play your strengths. Um, we're not
teaching agency. Uh, where we actually
say define that. Agency is the ability
to impact the world, the ability to have
an impact. So, um, people of high agency
move the world around them. uh they get
things done and they they transform
things and they just uh they just don't
have many barriers to moving the world.
You think we can teach that? Yeah, I
think there are there are ways to teach
agency. Um, you know, when people have
an early experience of putting together,
like my my little kids, when they figure
out how to run a lemonade stand and then
they organize it and they pull those
things out the front and they get the
little bench set up and they get the
cups, they get the jugs of lemonade and
all of that. And then people walking
past the house, start giving them a
dollar uh, and they walk in the house
with $16 and they go, "How amazing was
that? That was just a little education
in agency. You made that happen. You did
that. Um, look at look what you did on
your own. Um, you know, school really is
designed to lower agency. Uh, the the
the founders of the schooling system,
the creators of the schooling system
actually said publicly, we don't want a
population of thinkers. We want a
population of workers. We don't want
people who come up with new ideas for
how the factory might run better. We
want people who just do what they're
told uh hour in hour out and clock in
and clock out. So they built a system to
kind of replicate that which I'm not
critical of that. That's probably what
the world needed at the time and we we
thank our lucky stars for all the things
that that system produced but it's just
not the system that we need right now.
Um so education is a huge thing. Now we
also have YouTube channels where you can
get all sorts of education freely
available anywhere in the world with an
internet connection. So the education
actually exists as well. Um and you can
ask AI uh all of these questions and it
will start giving you solutions. So, the
cool thing is the solutions do exist uh
to these problems. It's not it's not
wildly difficult to stay ahead of
inflation. Like, it's not that it's not
that hard to do. Uh if you're talking
about savings, just rather than holding
savings in a depreciating fiat currency,
just hold your savings in S&P 500 or
hold your savings in gold or hold it in
Bitcoin maybe. Um you know, so you know,
there are there are there are ways to do
that and it's it's an app on your phone
and it's as easy to use as a bank
account.
Yeah. What I get hung up on is all of
those things exist now. People do not
avail themselves of them.
Uh could we educate our way there? I
hope so. And can I also be critical?
Yeah, please.
There is no power in thinking about the
system. The system is far too big and
complex and countless millions of very
intelligent people have lost their
entire decades thinking about how the
system should run. The capitalist system
or the free market system that uh Adam
Smith created basically said you do you
right make the decisions based upon your
life and your inputs and go as hard and
as fast as you can and make the best
decisions for you. And it actually said
there's this weird thing called the
invisible hand of the market and if you
do you ignore the system just go out
there and make your success of your
life. And he said if everyone does that
everything gets better. And if we try
and create a system and top down
architect a system, if we top down try
and say what would the best system look
like, that is a road to ruin that every
country goes down.
So to a degree you can sit there naval
gazing mentally masturbating over how
systems are built and how they might
work and how we could theoretically do
it better. My message for anyone
listening to this is just who gives a
[ __ ] Get yourself in order. Get
yourself a get yourself your savings
account. Get yourself your investing
account. Get yourself online. Start
educating yourself. Start a business,
join a business, get a mentor. Um, go
and make as much money as you possibly
can. Live the greatest life that you
can. If you want to move to Bali, move
to Bali. If you want to be a remote
worker, be a remote worker. If you want
to launch a YouTube channel, and that
for you is your best opportunity. Do the
stuff that that that works for you. Be
self-interested, right? Get yourself
ahead. In doing so, you will become an
economic unit. You will actually raise
GDP just by doing that. And when
millions of people make their own
decisions based on their own
self-interest, that is a
collective set of people absorbing data
points and responding to data points and
we end up with the free market and we
end up with the invisible hand of the
market. And historically again and again
and again when the invisible hand of the
market is is firing on all cylinders,
everything gets better for everybody.
But we must not fall into the trap,
especially as smart people, of thinking
that we could come up with a better
system than a million people looking
after their own lives could come up
with. Like we need to encourage people
go do you. You will. It It is an
incredible sense of disempowerment. It
puts us into our reptile brain. It puts
us into fear and disempowerment to try
and analyze something that is out of our
pay pay grade that is above our that is
above our ability to influence. you
know, it's we might as well be sitting
there thinking about how to terraform
Mars. It's like we're not involved in
that conversation. Like there is no
individual who can make this. Even the
people in charge of the system can't
control the system. So I guess what I'm
saying is when I when I get into a
debate with Gary and he's like, "Oh, the
answer is this. The answer is that." And
then I say, "Look, the answer is you
need to get on with your own life and
respond to the situation that you're
in." And I know that angers people, but
the alternative is sitting around
waiting for the system to change,
sitting around waiting for war, sitting
around waiting for the government to
stop inflating the currency. And it's
like it's like don't over analyze it. Go
kick the door off the hinges and make
some money. I am a big believer that
anyone's life is a direct reflection of
the choices that they've made.
However, when you start looking at
things up
close, you realize that some systems are
better than others. Mhm.
And the long arc of history bends
towards justice so far. Mhm. When you
look backwards, it's like, wo, I'd
rather be alive now than uh any other
moment in time, it's entirely possible
that we're about to hit longevity escape
velocity and that people can actually
live forever. I mean, there's just
really really amazing things potentially
on the horizon. So, even though people
might feel a nice pull to the 90s, I
really would rather live right now.
But when I uh really stare nakedly at
the problem, I'm
like there is a hurdle rate for people
right now that is uh it's problematic
and that there really is something
happening in this moment and my whole
life I have thought from the perspective
of the individual and I think it's the
right level of analysis and I want to be
very clear I am more terrified of
authoritarian Ian top down rule than I
am of anything. Um I think it is absurd
to think you can save everybody. You
can't. No system is going to save
everybody. I have read so much about
uh Ma's China, Stalin's Russia, 75 75
million dead, 25 million dead. Yeah.
just eating your own children to the
point where my community gives me a hard
time because I talk so often about
eating children. Uh but the reality is
you starve people long enough and they
start eating their kids. Crazy. Crazy
but true. Um
so I have a deep and fundamental terror
of top- down authoritarian rule. It is
the thing that scares me far more than
anything else.
But when you start looking at just there
are default systems that for better or
worse we pass through them whatever in a
capitalistic system that were better for
the average person than now. And so I
don't know if it's just where I'm at in
my life. I don't know if it's uh you
stare long enough into the abyss and the
abyss begins to stare back. I honestly
don't know. But I can find myself going,
I refuse to settle for um the only
people that can be helped are the people
that That's not what I'm saying. No. And
I don't think it is. And I I want to be
very clear. I'm not trying to paint you
into a box. I'm trying to invite you
into my madness if I'm completely honest
and say, uh I used to sell a t-shirt.
This is everything is your fault. I
still believe that that is a way better
way to live your life if you embrace the
genesis of mass starvation, destruction,
uh the genesis of 75 million dead in
China, the genesis of Stalin's Russia,
the genesis of all of that is, hey, the
economy is not fair. Some people tend to
get ahead and some people don't get
ahead. Um it's not evenly distributed.
Uh these people seem to be doing better
than these people. Wouldn't it be great
if the government steps in and created a
better system for everybody? Like no, at
no point were they saying, "Hey, let's
come up with a system that starves our
population and causes parents to eat
their children." None of that was the
plan. These are the unintended
consequences. The unintended
consequences of wanting to do do good
and thinking that we know better than
markets is death and destruction. The
unintended consequence of being an
[ __ ] and saying let people get on
with their own lives is affluence.
widespread affluence and we see this
every experiment that this has tried
when governments are a small there is no
such thing as a small government that
didn't take out lots of debt that let
the citizens get on with themselves that
collapsed and you know did terribly
there are countless examples of big
governments trying to control their
population and trying to build a better
system for everyone that lead to death
and destruction but I don't I hope in
all the words that I've said you don't
hear me saying that so I don't want more
government, I want less government. My
thing, if I were going to summarize all
of this, is um what I heard you just say
to me is stop thinking about the way the
system works and just get on with it.
And I'm saying that's feels real to me.
This feels like now is the moment to
think about the system. Now is the
moment to realize we've come a long way
away from what Alexander Hamilton had in
mind when he wrote the Federalist
Papers. And what he wrote in the
Federalist Papers was way smarter than
what we have now. and uh like what the
[ __ ] like we need to wake up. We have
access to all this information and I
want a slight tweak a slight tweak is
not let's look at the system. Let's look
at the opportunities, right? And let's
let's be open to the idea that
opportunities change generation to
generation. the opportunities that my
grandfather had was to buy a house and
let it go up in value. But the the
penalty that he had to pay for that is
working in one shitty factory for 40
years. So he so I wouldn't want to trade
places with my grand even though my
grandfather had a house that went up in
value really well. I wouldn't want to
change my life because he lived in one
city and worked in one factory and his
his day was really dull and boring,
right? So if I had to choose, do I swap
my life or do I swap my teenage years
that I was in let's say like for like
for his future prospects? Even though
it's clear that he had a great
opportunity around housing, he didn't
have a great opportunity around much
else. Now you take my grandparents of of
great grandparents the whole lot and
fast forward to today and they say, "Oh,
forget the housing thing. The housing
isn't like it's not a big deal. What's a
big deal is live and work from anywhere.
Travel the world. Uh educate yourself
for free online. Do do the equivalent of
the best university degree for free on
YouTube. Um uh launch a SAS product and
have a thousand people who pay 15 bucks
a month for this cool little thing that
you created. Um, create a YouTube
channel and share your ideas and
learnings and philosophy and journey
with a group of people and have 10,000
subscribers uh who really love what
you've got to say. Be a guest on a
podcast. Um, go on a cheap flight. My
goodness, go into that metal tube that
goes through the air and and takes you
places. So, like all of our ancestors
would be screaming from the sidelines,
make the most of today's opportunities.
Don't chase our opportunities. chase
your opportunities. So rather than
thinking about how do we improve the
system, how do we improve our
sensitivity to opportunities? How do we
recognize what's right in front of us?
How do I how do we make the most of the
times we are living in, not make the
most of the times that have passed?
Because you can't just simply say, "Oh,
I want to cherrypick the best bits." All
right? Cuz you might say, "Hey, I want
that post World War II era." Okay, but
did you want your big brother to get
blown up in in the war and have no legs?
Like, did you want to go and fight
fascists in Europe? Did you want to drop
a nuclear weapon on a 100,000 civilians?
Like, did you want all of the stuff that
went into that period? Or do you just
like the best bits that the fruit that
came from that tree? Cuz I I think we
don't probably want where that tree came
from. So, it's like you can't cherrypick
the past. You know, what we have to do
is say this is the moment that we have
and there are so many phenomenal
opportunities in this moment. We just
need to be present to that and go after
them.
What you're saying is amazing. Um here's
why I think we we have different base
assumptions. So to pull those into the
light, let me ask you
um
rate the UK in this moment. How well is
the UK doing in terms of like um
educating people well, giving them
financial opportunities, magical metal
tube in the sky that they can fly
around? Like how's the UK doing making
use of the opportunities of this moment?
Uh you've got two systems that are
coexisting. So system one, industrial
age massively declining. People can't
get traditional jobs. People can't get a
decent wage. Wage growth hasn't changed
in 15 years since the financial crisis.
the average income has stayed the same
while everything's gotten more
expensive. People live in utterly
terrible housing um that you know is
below subpath. The school system very
very hard to navigate. Um the hospital
system is getting worse and worse and it
once was once the pride of the country.
Uh so all of that's in decline. At the
very same time, there are plenty of
people living in London who they go
skiing in the Alps in winter. They go to
the south uh southern Mediterranean for
summer. They have customers all over the
world that they talk to on Zoom. They
have a YouTube channel. They have a SAS
company. They have products that ship.
Uh they um fly to Dubai and go to a
networking function and pick up a
$40,000 contract. Um,
and like life's great. Life's
incredible. Uh, I know this sucks to
shed a a spotlight on this, but for a
lot of people who are living who if your
focus is intellectual property, media,
data, and technology, your life is going
like this. Um, if your focus is I want
things to be the way that it used to be,
your life is going like
this. So, you can't say how's the UK
doing? The UK government is a great
example of a geographically limited,
institutionally limited, industrial age
produced system that is in huge decline.
Can't attract talent. Um can't do
anything right. Can't do the basics of
government right. Uh look at the look at
the people who we've got to choose from
as our leaders. Utterly ridiculous. Um
there are better people working in small
tech companies of 10 people who would do
a better job of running the government.
uh that you know so so that's what I
mean by there's these two systems so you
can't literally kind of broad blanket it
all together my my vision I've got these
kind of x-ray goggles on because I've
been thinking about this for a while and
I just very easily go oh that's system
one that's system two that's that's old
system that's new system that's digital
that's you know that's cloud that's dirt
um you know I mean go to Silicon Valley
and you got the richest people in the
world with the poorest people in the
world one group of people make their
money on the internet in the cloud or on
in you know any of those things. One
group of people are not making their
money in that way. It is it is as stark
and as simple as that but the barriers
to entry to moving into system 2 are
very very low. Like it's just education.
So like the the ability to vibe code a
new soft SAS product launch it there are
17y olds doing that. Like there are
literally seven there's a 17-year-old
who's currently raising $15 million um
for a product that he's vibe coded into
existence. There's an 18-year-old who's
still at school uh who has 20 million
worth of revenue for a calorie tracking
app that is an AI backed calorie app
that him and his friends built. There
are 20 year olds who have a YouTube
channel and they're making a million a
month from their YouTube channel.
So like the the barriers are low to move
into the digital world or to join a
digital world team. Okay. So rather than
me take us down an ever darker road, uh
let's just start looking at
the one of the positive paths that we
could go down which is AI. When you look
into the future and you see AI, what do
you see? Is it um more opportunity
lowering the barrier to entry? Do you
see societal problems? like what do you
see? Yeah. Yes to both of those. Um
let's start with this. Uh there's
something called uh a singularity which
is uh the world becomes completely
unpredictable. You can't see around the
corner. It it's accelerating. Um so
that's a singularity event and there's
something called uh artificial general
intelligence. My personal belief is that
we've achieved both of those already. So
and I'll give you a historical
perspective. The first time someone shot
a bullet out of a gun and hit a target,
that was a singularity because it didn't
matter from that moment forward. There
was no going back.
Life was going to be different on planet
Earth once a gunshot a bullet. Uh the
very first time a tractor plowed a field
with 97 people watching in disbelief as
two people plowed a field that would
have taken them a month and they and it
did it in an afternoon. That was a
singularity moment at that particular
moment. As soon as that first tractor
plowed a field, those people's lives
were never going to be the same again.
Society was never going to be the same
again. Everything was going to change.
As soon as the printing press printed
the first Bible and effortlessly and
cheaply, that was going to change
society. So, in my mind, I have a lower
bar for what is a singularity moment. A
singularity moment means we've crossed a
threshold. The genie is out of the
bottle. We will never go back and it's
only going to get way different from
here. So, in my mind, enough has
happened with AI now that we're past the
singularity. We This means we can't see
round corners. We don't know what's
coming next. It's getting faster and and
accelerating. Uh it's beyond exponential
growth. It's accelerated exponential
growth. Um the uh society and life is in
a complete total set set of change
whether you know it or like it or not.
So that's per part one is we are past
the singularity and it's just a matter
of time now where everything reorganizes
around that technology or with that
technology in mind. Part two is
artificial general intelligence. So I
also believe that's happened. Some
people say AGI means that it is like a
human. I don't think it needs to be like
a human. I think a plane is nothing like
a bird but it gives us flight. Um, a AGI
is nothing like human intelligence, but
it gives us artificial general
intelligence. So, every human being who
has access to the internet or a phone
now has in their pocket artificial
general intelligence. They can access a
doctor, an accountant, an engineer, an
artist, a poet, uh, at a at better than
a general level. And the net effect of
that is artificial general intelligence.
even though it needs to be guided by a
human, even though it needs to be human
in in the loop, we now have artificial
general intelligence that's widely
available. Uh I personally would now
feel more comfortable talking to an AI
about my health than a GP. Um I I get
more from an AI than going to a general
practitioner. Um I, you know, I dump my
health data into an AI and it gives me
insights that my GP won't give me.
Um, I do I do more on AI for legal
contracts than I do with my lawyer. And
10 10 years ago, I would have spent a
lot of money with my lawyer. Now I just
spend time with the AGI. So So in my
mind, we have actually got AGI and we do
have we have passed a singularity. The
net effect of those things are happen.
People are going to hate that and
they're going to dispute. They're going
to give me the technical definitions of
those things. But for all intents and
practical purposes, those two things
have happened in in my mind and I'm
acting as if. So that means that
um we're going to go through societal
reorganization. Every job will be
different. Every workplace will be
different. Every institution will be
different. Everything will reorganize
around that new system. Um and there's
going to be fast reorganization, slow,
there's going to be peaceful and
disruptive. um you know it's it's all
going to like the the whole world is
going through that it's unpredictable as
to how the chips will fall uh as a
result of AI um the the this is this is
like electrification
um it's very unpredictable if I was to
go back to my grandfather and say to my
grandfather I've got a personal trainer
and my grandfather says what's a
personal trainer well it's someone who
meets me at the gym
because I don't really want to go to the
gym. And he go, "Well, what? You pay
this person?" "Yeah, what do they do?"
"Well, I meet them there and they stand
next to me while I lift
things." And I say, "Okay, what else
does he do?" "Oh, he counts how many
times I've lifted it and tells me that
I've done a good job and make sure that
I'm lifting it without hurting myself."
And I go, and my grandfather would go,
"That can't be a real thing. That can't
be a real job. Not possible." And I say,
"Well, there's actually tens of
thousands, hundreds of thousands of
people who do this job and they do
really quite well. Lots of like they're
booked solidly." And my grandfather
would just be like mind blown what you
pay to go to a place to lift things and
have someone watch you doing that. Like
it just crazy. So when technology comes
along, it creates completely different
jobs, opportunities, things that we
can't even comprehend today come out of
the, you know, these technologies. jobs,
jobs that will seem preposterous,
absurd, insanity will be major jobs of
the future.
So,
um, an optimistic view for sure, do you,
given that you can't see what it's going
to be, do you have a way that you
encourage people to interface with it
now so that no matter where it goes,
they're going to be able to take
advantage? Yeah, there's a few
principles that I uh, go with. I go
principle number one is create versus
consume. So um with AI it gives you two
superpowers. The power to create more
than you thought you could or the power
to consume more than you wanted to. So
when AI works against you and takes you
down the consumption path, you spend
more time on Tik Tok than you intended.
You have more screen time than you
thought you would. You buy more things,
add more things to your Amazon basket.
You listen to more songs on Spotify than
you thought you would. So, it's more
more more more more consumption. When
you go down the creation path, it's
like, "Oh, in an afternoon, I mapped out
a book that I'm going to write. I
organized a festival that I'm going to
run. I started a SAS company and wrote a
business plan." And it's like, "Oh, and
it's only 3 p.m." And it's kind of like
hyper creative. So, a a sensitivity to
are you creating or consuming is rule
number one with AI. Am I being used by
the system? Am I using the system? Um,
and we all need to develop that
sensitivity. We all need to go, hey, I
recognize what's going on here. I'm
being beaten by AI. Um, hey, I recognize
what's happening here. I'm using AI as
an amazing tool. So, create versus
consume. The wedge that's coming for
society is the creators versus the
consumers. That is the wedge. So,
essentially, we're going to have this
societal wedge where a bunch of people
say, 2% of people go, I'm going to be
hyper creative. I'm going to have a
plural career. I've got seven major
projects on the go at any given time.
All of them are seven figure projects
and they're all epic and I make a
million dollars a month and like it's
easier than ever to do that. That's
that's 2% of people. And then there's
the consumer wedge which is oh I just
sit around watching stuff and listening
to stuff and and feeling like I'm you
know disempowered but somehow there's
always stuff to do. I don't know where
the day goes but you know I'm I'm you
know I'm dragged down this rabbit hole.
So that's the consumption wedge and AI
is very tricky. It can make you feel
like you're actually on the right side
of the wedge when you're not. Right. So
that's Do you have an example of that?
Oh, like training and education.
So it's very easy for someone to watch
hours and hours and hours of what they
would call training and education when
they're not actually doing anything.
They're not creating. They might read
dozens of books uh and go, "Ah, I'm
getting ahead so well. I wrote I I read
12 books this month. Um I you know I I
listened to all these TED talks. It's
like okay but what did you create? What
was your output? Right? So create
creation is output that you get paid
for. So you want to be on that side of
the wedge, right? Cuz the the societyy's
going to split the top two and the
bottom 48. Um so we need to basically
say I'm I'm going to be you know the I'm
going to be up here. Um, I'm going to be
this uh this creative creative space up
here.
Um, and it's going to be good to be up
there. You're going to you you're
literally going to be able to have a
dream life. Like you will literally in a
couple of years time you're going to
meet people and it's going to be
entirely normal to say oh I just
organized a festival in Italy wrote a
book created a new podcast series
launched a SAS product and that was just
all fun passion projects and I my net
worth's just exploded like from from
these fun things that I've been doing.
You don't think that there's going to be
such an overabundance of things to
consume that this is what I was talking
about earlier where capital is now going
to be disagregated. So rather than all
of those things being seven figure
deals, it's there's 30,000 books coming
online every day and now precious few
people precious few people are going to
actually make a living doing that thing.
Well, you won't. This concept of making
a living is this idea of a long arc
career and we need to get off that and
say fast hyper acceler like uh high
velocity loops. So a loop is identify a
problem, research the problem with a
colleague, identify a solution, build a
slightly bigger team and scale, start
scaling it, add more people, add more
technology, exit it and collect the
fruits of doing that. That could last 3
months, that could last three years.
it's not going to last 15 years. It's
not going to last 45 years. So, we got
to get off this idea that you write one
book and that pays for the rest of your
life. Or you or that you you know, in a
world where it's easy to write a book,
you might write a book and have a little
campaign and make
$12,000 and it was a great use of your
time and it builds a bunch of
relationships and then those people go
with you to your festival that you run
in Mexico and then you launch uh a a um
community online discussion group and
people are loving that and that leads to
another opportunity. It's like boom boom
boom boom boom and you might have seven
things on the go at once. AI allows for
that. I know this for most people 48 out
of 50 people are going to hate me for
saying this stuff but there is a group
of people that you can become part of
who that's going to be a fun enjoyable
exciting way to live. Why do you think
people will hate that? Because well it's
pressure isn't it? Like most people just
want to have a nice like most people
don't want to have to you know if you if
you take what most people want because
of their upbringing it's mostly I want
just stability. I just want safety and
security. You know this life over here
is like being special forces behind
enemy lines. You got to be good and you
got to kick doors down and you got to
you know be sharp with your weapons. Um
and you got to look for the intel and
make make your way through the forest.
So being special forces behind enemy
lines is is going to be hard. You can
learn to do it in an AI world, but most
people say, "I don't want to do that. I
want security and stability of of of a
job." Um, mind you, some of these fast
loops, you might do one fast loop every
5 years and that pays for the next four,
you know? So like the the upside because
the money's not going to disappear. The
money's going to be slloshing around. So
the money's out there. You just got to
come up with things to do. Um so yeah
create versus consume. Content versus
context. So content is like the legal
agreement. Content is the the um you
know the
uh you know the the stuff the marketing
copy. Context is understanding the big
picture of why we need a legal
agreement. Understanding the big picture
of why we needed that marketing content.
Um, so AI is phenomenally good at
content, but not good at context. It's
really, really good at giving you a
legal agreement if you tell it why you
need it and what you need and and what
you're trying to do. Very, very bad at
telling you the bigger picture and like
executing and holding it all together as
it currently stands. So, humans need to
be kind of context versus content um,
and thinking about like the bigger
picture of knitting these things um, to
together. So that that that's another
way uh to think about it. So given
people's desire for steady state
stability, do you have a sense of
because you said that you also see
societal problems coming
uh how do you see that playing out if
people want stability but what they get
are hyperloops?
Um, for the vast majority of
people, by the way, when I say how I see
it playing out, this is not an
endorsement of of the way I want it to
be. And it's really important that I say
this. I'm not saying how I hope it plays
out. I'm responding to what I'm seeing.
So, I'm about to say something that
everyone's going to be angry at, but
this is not me saying, "Hey, this is how
I would design it." It's like me saying,
"This is what I see
unfolding." Um, and I'm not like
endorsing it. I'm just saying this is
what I see unfolding. For many many many
years uh hundreds and hundreds of years
in the agricultural age we used
artificial intelligence to automate most
of the value in society and we called it
soil. So you plant a prompt into the
soil which is a seed and out comes
something of greater value which is
wheat and planting prompts collecting
wheat was the job of most people and the
vast majority of value was just
automated into existence. People worked
I think 154 days a year on average and
they worked 5 hours a day on average.
And in certain places where the climate
was um consistent, you actually had
plenty of abundance of food and it was
automated into existence. Now, we didn't
know how that automation worked. We
didn't understand how a seed turned into
wheat. We but we could still use it. So,
it was like a god force that we just
prompt and then we receive output.
Prompt, hallucinate, prompt,
hallucinate, right? Prompt wheat, get
wheat. Prompt wheat seed, get wheat. uh
you know uh prompt tomato get tomato
prompt tomato bush get a tomato out
right so but you can see that it's
automation most of it's automation
you're just waiting for it to happen and
you don't even know how it happens you
just know that if you prompt it you get
the thing in that society we had a lot
of halves and have nots we had kings and
we had surfs um because the kings owned
the soil they had the means of
automation so the automation was there
and they owned it and therefore they
were supremely wealthy on a completely
completely godlike level and everyone
else was dependent upon prompting that
artificial intelligence to give them
what they wanted. Um, however, there was
actually surplus value. They they could
they didn't have to work anywhere near
as hard and what emerged was a culture
of meaning, but the meaning was based
upon festivals. So everything was all
about uh having a birthday festival,
having a wedding, uh having a uh spring
equinox festival, having a festival or a
feast. So it was
community-based. When they coordinated
their labor, it was to create something
of great meaning, which would be a
church, a a chapel, a um a massive
cathedral. And it could have even taken
10 generations to complete where you
actually had 200 years for the
construction of a of a cathedral. But it
wasn't a paid thing. It was a we have so
much surplus value, we're all going to
work together on producing something
that is massively meaningful that we all
work together on. Um, so this is not a
new way of humans living. This is a very
very ancient way of humans living. If
anything, we lived differently for 200
years and for thousands of years, we had
automation at the absolute core of our
economy and we had um uh meaning derived
from festivals and community and
monuments. So, what I see happening, I
think we've created digital soil, which
is AI. Um it's going to be owned by a
few people who are going to be the new
kings and uh dukes and and lords. The
vast majority of people will experience
a surplus that comes from all this
automation. That is really interesting.
I have never heard anybody talk about
soil like that. Uh okay. Super
fascinating. So
you don't worry about a meaning crisis
post AI because we've already had a
similar thing and we lean into the
rituals and the but those things
there'll definitely be there'll
definitely be a period of time where
there is a meaning crisis because we've
raised people for 50 years who are alive
and we've raised people for decades to
say your meaning comes from working at
Coca-Cola, your meaning comes from
getting that corporate promotion. Your
meaning comes from moving from the 19th
floor to the 23rd floor with a with a
nicer office. Um so all these badges of
meaning that we condition people to have
you know these things become meaningless
and then there's a crisis of meaning.
But historically on the long arc of
history that is not where we got our
meaning from. No one derived their
meaning from their work. Uh they derive
their meaning from their family. They
derive uh from their relationship with
God. uh from their building of a
monument um from community and
festivals. Festivals were a massive
thing, huge thing.
Interestingly, I'm friends with some
trust fund kids and some people who are
post economic uh postexit. They spend an
enormous amount of time traveling around
going to festivals. Um so like every
month is a festival. They go, "Oh, where
are you? Oh, I'm at Burning Man. Oh, I'm
at this one in England. I'm at this one
in Italy. I'm at this one in Japan. I'm
like I'm going to these festivals." And
there's groups of people who kind of
like traverse the globe going to various
festivals that pop up. It's interesting
that when someone has sold their company
for $900 million, let's
say it's not like they have a crisis of
or there is a crisis of meaning, but
there is there are ways to to to solve
that. Um I I think we will go back to
festivals and monuments um and uh and
probably spirituality um all of those
sorts of things. There are there are
definitely long arc of history ways that
we've solved this problem that have
lasted a long time. And you don't think
anything changes for that when we're
hyperconnected like that when you can't
explain
uh the rain or you can't explain like a
thunder and lightning storm. So you come
up with mythology and there's nobody
there to be like no that doesn't make
any sense.
Um, you're not worried
about hyper derangement of uh people
don't fall in love anymore. All their
friends are AI, they're sleeping with a
sex bot. It's interesting, Daniel.
You're really like making uh I find
myself dwelling in the darker sides of
my psyche because you carry the
optimistic weight for me, which I
appreciate. Uh
there'll there'll definitely be all of
those things. There's a there's always
but not in an amount that you're worried
about. There's uh yeah, I'm concerned.
Um but I I stoicism dictates that you
can't concern yourself with things that
are out of your control. So I can
hypothesize about
um individual circumstances that might
happen, but unless I'm confronted with
that individual circumstance that is
happening, then it's not it shouldn't be
a great uh amount of my time that goes
into it. When a friend of mine or a
loved one of mine says, "I'm dating an
AI agent and it's really great. I'm
having the best relationship of my
life." Then I might start to discuss
that. When my kids come to me and say,
"Hey, my new girlfriend is this sexbot."
Then probably I will What would you say?
So what's her name? Um uh yeah, I mean
it's I mean obviously it's a it's that
would be a big conversation, but there
has never been a time in all of human
history that doesn't have light and
dark. We always have light and dark. Um
there there are wonderful parts of every
single culture and era and there are
horrific parts of every single culture
and era. Um you cannot it's like trying
to find a magnet that only has positives
and no negatives. It's like there is no
magnet that's positive and that's all
positive and no negative. Um you must
accept that all scenarios are going to
have positives and negatives. Um and
move yourself towards the positives. And
if everyone does that, we advance
society. You have you spent any time
thinking about because your kids are
really going to interface with this. So,
I'll give you an example. You were
talking about um people that are in the
I rounded to entertainment. You didn't
use those words, but like people that
are creating with AI, like they're
having a great time. Um I have paid very
very talented writers to work with me.
Um, and I've never had a, and this could
be delusion, maybe what I'm doing with
AI from a writing perspective is way
worse. It doesn't feel that way. I'll be
very honest. Um, the best writing
partner I've ever had is AI. So, I have
a bizarly
um, almost ridiculously optimistic view
of AI and how it's going to help with
loneliness. You said you'd rather talk
to AI than uh you said GP, I think
doctor. Yeah. Uh there's data on AI
therapists being better. Like I really I
worry there's no doubt because there are
always unintended consequences and I
think um investing in humans and all
that is always the right default answer.
But
uh man, I interface with AI a lot. It's
amazing. I am absolutely blown away. And
so not having an addictive personality
and having an incredibly strong
marriage, it doesn't scare me. But then
when I abstract that to people who do
have an addictive personality and don't
have
um tight family of some kind. I worry
that it does derange in some way. How
are you how are you setting your kids
up? Like what's the foundational
knowledge set you're giving them about
how to interface? Yeah. So I I believe
in uh high agency generalists are the
future. So high agency is your ability
to affect change, your ability to get
things done. So a a belief in self, a
belief in um things like high agency is
things like unless it's a law of
physics, it's up for negotiation. Yep.
Um agency is if the resource exists
anywhere on the planet, we can have a
conversation about how it gets used. Um
that's a high agency belief. Uh, another
high agency belief would be speed
matters. Let's get this faster than
slower would be faster would be better
than slower. Uh, high agency is probably
do the thing. And then this is your
framework that you're giving your kids
for AI. No, the for life. So like I I
want because school doesn't teach high
agency. So I want my kids to have high
an understanding of high agency and to
cultivate agency in them. And then
generalism. Being a generalist is
knowing a little bit about law so you
can direct a legal contract to be
created. To know a bit about history so
you can understand whether there's a
historical context to something. To
understand a bit about geography so that
you understand why the US is more um
insulated than China. Uh to know a
little bit about politics. To know a
little bit about um the Roman Empire and
the British Empire. uh to know a little
bit about science and how um proteins
and protein folding might work. So
enough to know a little bit about it so
that if you want to go down the rabbit
hole for a day or two days or or a week,
you can just go, I'm all in on protein
folding now. I'm watching every YouTube
video. I'm condensing everything that I
need so that I can get this thing done
and now I can just pull back from that
and now I'm all in on the breeding
patterns of sparrows, right? It's like
whatever is the thing. So, it's this
being a high agency generalist is that
I'm not pigeonholed into being uh a
dentist or an anesthesiologist and
that's all I all I can do. It's like no
no, I can do
anything and I can just pick what I want
to pick what I want to do, right? I I
can get it done and I can learn it and
and figure it out.
So when we take a team of high agency
generalists who get together based on
their energy patterns not their skill
set um and their chemistry um not based
on their education then you only need 5
to 10 people to create an
extraordinarily successful venture
um by the time my kids are older. Um
either that or we'll have hit such a
point where it's all pointless. Um
there's such a surplus of value being
automated into existence that actually
life becomes about festivals, monuments,
creativity for creativity's sake,
writing a song because it's fun to do.
And it's once again it's 5 to 10 people
working together on this project for
fun. Uh five to 10 people working on
this project for fun. Um the downside of
the agricultural age and the feudal
system is almost no social mobility
whatsoever. Like a completely
uh foreign concept to someone living in
1600s. Um so you you were born into a
family and that's where you stay for the
rest of your life. Uh somehow like and
that that is the backdrop of a super
high automated system. Um that that
there's no breaking free of that system.
you just enjoy your place in life and
you let the chips fall where they may
and you know make the best of your
situation. So I don't I don't know
whether we actually end up in that place
um where there's almost no social
mobility because everything's automated.
Um if that if that is the case then
unfortunately uh en enjoy enjoy your
spot right and have have a great time
and you you live in an age of abundance.
You'll be able to travel anywhere, eat
anything, uh all of that sort of stuff,
but you'll you'll be in a lane and
you'll be stuck in that lane. Daniel,
it's not at all surprising to me that
you have become uh as popular on the
podcasting circuit as you've become.
Where can people follow along with you?
Um connect with me on LinkedIn,
Instagram, uh X. Uh I have a few
different companies. I've got Score app.
Uh I've launched bookmagic.ai for
writing a book. Uh I'm about to launch
awards app which is for winning awards
uh for your business. Um, so I'm kind of
like building projects and like putting
I've got about seven different companies
at the moment. Dent Accelerators is
where we actually run an entrepreneur
accelerator to talk more and learn more
about this sort of stuff as a group. Um,
so you can find any of those companies.
Uh, daniel priestley.com I think has a
list of it all. Um, so that would that
would actually be a really good place to
start. Priestley.com. I love it. Thanks
for having me on the show, man. Brother,
thank you for being here. Uh, may this
be the first of many. This was
definitely a lot of fun. It was great
fun. Really enjoyed it. Of course, boys
and girls, if you haven't already, be
sure to subscribe. And until next time,
my friends, be legendary. Take care.
Peace. If you like this conversation,
check out this episode to learn more.
China has done something extraordinary.
In just a few decades, they've lifted
hundreds of millions of people out of
poverty, mastered global manufacturing,
and position themselves as a true
superpower. But as they rise, the
question for the West isn't just how do
we compete? It's how