Latest / Yaron Brook Show / Answering Capitalism’s Critics #4: Smarter Every Day-The PROBLEM with Capitalism | Yaron Brook Show

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Answering Capitalism’s Critics #4: Smarter Every Day-The PROBLEM with Capitalism | Yaron Brook Show · Yaron Brook Show

• 0:02
  Speaker 1: The radical, fundamental principles of freedom, rational self-interest.
• 0:10
  Speaker 2: And individual rights.
• 0:14
  Speaker 1: This is the Yaron Brook Show. All right, everybody. Welcome
• 0:21
  Speaker 1: to Yaron Brook Show on this Saturday, October 17th. I
• 0:27
  Speaker 1: hope you all... started off well on your weekend and
• 0:33
  Speaker 1: looking forward to the rest of the weekend and of
• 0:36
  Speaker 1: course next week is coming up quickly all right let's
• 0:41
  Speaker 1: see so today we're returning to a series that I've
• 0:45
  Speaker 1: been doing this is number four in the series of
• 0:49
  Speaker 1: basically answering capitalism's critics and today I've chosen somebody who
• 0:55
  Speaker 1: is not an economist he's not a philosopher he's not
• 1:01
  Speaker 1: He's not a socialist. He's not ideological at all. But
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  Speaker 1: he has some very common views, I think, about capitalism
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  Speaker 1: that I want to debunk and to convince you otherwise. Now,
• 1:17
  Speaker 1: I got this video from a student at the University
• 1:20
  Speaker 1: of Austin who had taken my class on capitalism and
• 1:23
  Speaker 1: sent me this video, I don't know, a couple of
• 1:25
  Speaker 1: months ago now, maybe longer, maybe three, four months ago already.
• 1:29
  Speaker 1: I'd be meaning to do this Other things got in
• 1:32
  Speaker 1: the way. Anyway, here we are. So we're doing it.
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  Speaker 1: The video is of Destin Sandlin, who runs Smarter Every Day.
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  Speaker 1: Smarter Every Day is one of the biggest science channels
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  Speaker 1: on YouTube. It's got 12 million subscribers. 12 million subscribers.
• 1:59
  Speaker 1: The video we're going to be watching today is already
• 2:03
  Speaker 1: got 2.9 million views. So a lot of people, a
• 2:07
  Speaker 1: lot of people interacted with this content. A lot of
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  Speaker 1: people have been, uh, interacted with the problem with capitalism,
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  Speaker 1: which is the name of, of, uh, this particular episode
• 2:20
  Speaker 1: of smarter every day. Uh, uh, Destin is an engineer
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  Speaker 1: from Alabama. I guess his parents worked on auto assembly lines.
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  Speaker 1: He's not political. He's the kind of guy who says,
• 2:35
  Speaker 1: let's take this apart and figure out how it works, right?
• 2:38
  Speaker 1: So he's a tinkerer. So again, non-intellectual. No political agenda,
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  Speaker 1: not a Marxist, nothing like that. Just a curious engineer
• 2:52
  Speaker 1: who is very, very, very, very, very confused about capitalism.
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  Speaker 1: And I think not only do millions of people trust
• 2:59
  Speaker 1: this guy, follow this guy, listen to this guy, but
• 3:02
  Speaker 1: I think millions and millions and millions of people out there, Americans,
• 3:05
  Speaker 1: have the same confusion about capitalism that he has. Now,
• 3:13
  Speaker 1: Here's the setup, right? Because we're going to jump around
• 3:16
  Speaker 1: in the video and you'll get the setup once you
• 3:18
  Speaker 1: watch all of it. But I assume you haven't seen
• 3:22
  Speaker 1: the video. So here's the setup. About four years ago,
• 3:26
  Speaker 1: his friend John Youngblood came to him with a product idea.
• 3:31
  Speaker 1: The grill brushes, these are the brushes that you scrape
• 3:35
  Speaker 1: the grill, right? That everybody owns, the ones that have
• 3:39
  Speaker 1: the wire bristles, they're dangerous, right? It turns out that
• 3:44
  Speaker 1: the bristles come off. They can stick to your food.
• 3:47
  Speaker 1: You can swallow one. And then if you do, you know,
• 3:51
  Speaker 1: you're in hospital. Not good. Now, millions of these things
• 3:55
  Speaker 1: have been recalled. And John had this idea, a building
• 4:01
  Speaker 1: of scrubber made of stainless steel chain mail. You'll see
• 4:04
  Speaker 1: a picture of it in a little bit. So no bristles,
• 4:08
  Speaker 1: nothing to come off and hurt you. and supposedly because
• 4:13
  Speaker 1: it's made of this really strong stainless steel, chain mail,
• 4:17
  Speaker 1: it will last forever. Superior quality. So Destin says, sure,
• 4:25
  Speaker 1: let's do it. But he adds one condition, which we
• 4:28
  Speaker 1: will talk about later on. We have to make it
• 4:31
  Speaker 1: 100% in America, that every component, every piece of this
• 4:35
  Speaker 1: thing has to be American. From the chain mail, the
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  Speaker 1: stainless steel handle, the plastic knob, the little metal insert,
• 4:44
  Speaker 1: the sticker, the laser engravings, everything has to be American.
• 4:49
  Speaker 1: And of course, that turns out to be pretty hard.
• 4:52
  Speaker 1: And we'll talk a little bit about that. I've got
• 4:59
  Speaker 1: a lot of clips. I don't know how much of
• 5:02
  Speaker 1: this will get through. Partially will depend on you, on
• 5:06
  Speaker 1: how much you're excited about the show, supportive of the show.
• 5:10
  Speaker 1: That will determine how far we go. I've got tons
• 5:13
  Speaker 1: of clips. We could go three hours on this. So
• 5:16
  Speaker 1: we'll see. But anyway, it turns out to be hard.
• 5:18
  Speaker 1: The engineering is not hard. What's hard is the supply chain.
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  Speaker 1: You can't find anybody to make the injection mold in America.
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  Speaker 1: It takes him years, years to find a guy who's
• 5:30
  Speaker 1: about to retire and can do it. A simple bolt
• 5:34
  Speaker 1: costs three times what it costs overseas. He buys plastic
• 5:39
  Speaker 1: knobs everywhere. He's told they're made in America, but the
• 5:43
  Speaker 1: box says, made in Costa Rica. He orders chain mail
• 5:48
  Speaker 1: from India. It shows up, and it's Chinese. I guess
• 5:52
  Speaker 1: he's willing to do India, but not China. The one
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  Speaker 1: American chain mail factory, he finds, is booked solid, can
• 6:03
  Speaker 1: take on a new customer. You know, the tool and diamond...
• 6:10
  Speaker 1: dies before they've you know before they can actually do
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  Speaker 1: much i mean and and of course a lifetime of
• 6:17
  Speaker 1: knowledge goes with him once he's died you know so
• 6:21
  Speaker 1: so he did a he did a video a year
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  Speaker 1: before this one um which is titled i try to
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  Speaker 1: make something in america which had four and a half
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  Speaker 1: million views now the product actually shipped the the the
• 6:37
  Speaker 1: grill scrub up is 60 bucks He sold it direct,
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  Speaker 1: not on Amazon and it sold. So, um, there's a,
• 6:53
  Speaker 1: there is a, you know, there's a market and he
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  Speaker 1: succeeded and he's selling them like crazy. So this video
• 7:02
  Speaker 1: is a sequel. The video we're going to analyze is
• 7:05
  Speaker 1: a sequel to that first video where he described trying
• 7:08
  Speaker 1: to make it in America. It's 55 minutes. The first
• 7:11
  Speaker 1: 33 are him solving the problems, like going through how
• 7:16
  Speaker 1: to do the stuff, right, how to solve the engineering stuff,
• 7:22
  Speaker 1: which is really interesting, and you can watch that. And
• 7:27
  Speaker 1: then the rest is what he learned. And, you know,
• 7:32
  Speaker 1: he learned that production is not something you just turn
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  Speaker 1: on and, you know, all you need is capital, all
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  Speaker 1: you need is money. The knowledge is required and it
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  Speaker 1: takes years to accumulate. Tools, well, somebody has to build them.
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  Speaker 1: They don't just exist out there. You have to have
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  Speaker 1: a judgment. You have to build relationship. You need capital.
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  Speaker 1: And it's a lot. In other words, he learns. He
• 7:59
  Speaker 1: learns what it means to be an entrepreneur. He doesn't
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  Speaker 1: identify it at that at all, which is one of
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  Speaker 1: the big flaws we'll see throughout. But That's what he's doing.
• 8:13
  Speaker 1: He's learning to be an entrepreneur. And of course, he
• 8:20
  Speaker 1: learns that an executive CEO can wreck a company by
• 8:25
  Speaker 1: thinking about nothing but next quarter's margins, by thinking short term.
• 8:30
  Speaker 1: And of course, he's right on that one. But then
• 8:34
  Speaker 1: he has this title, The Problem with Capitalism. And in
• 8:40
  Speaker 1: the last 20 minutes, he pulls out a whiteboard, and
• 8:43
  Speaker 1: we'll get to that very quickly, to the whiteboard, and
• 8:46
  Speaker 1: you'll see what capitalism pushed to the max actually means.
• 8:50
  Speaker 1: All right, so we're going to go over this, but
• 8:57
  Speaker 1: notice that his own company, his own company, the company
• 9:01
  Speaker 1: he is building, the product he is building, is actually
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  Speaker 1: an example of, in a sense, capitalism in action, or
• 9:08
  Speaker 1: at least entrepreneurship in action. And as we will see,
• 9:12
  Speaker 1: or as I will articulate, entrepreneurship is necessary for a
• 9:18
  Speaker 1: thriving market economy. So we're going to go over this.
• 9:24
  Speaker 1: We're going to take a look. We're going to jump
• 9:28
  Speaker 1: around a little bit because he talks about different things
• 9:32
  Speaker 1: in different places, and I want to cover a bunch
• 9:34
  Speaker 1: of different things, and we'll see how long this takes.
• 9:37
  Speaker 1: I don't know. I don't have a sense how long
• 9:39
  Speaker 1: it's going to take. I know I have a lot
• 9:40
  Speaker 1: to say about a lot of the stuff he says here,
• 9:43
  Speaker 1: but we'll see how long it takes. All right. We're
• 9:49
  Speaker 1: going to start with, with very early on, three minutes in,
• 9:55
  Speaker 1: three minutes and a bit in, where he's kind of
• 9:58
  Speaker 1: setting this up, not setting up the product and everything,
• 10:01
  Speaker 1: but setting up his view of capitalism.
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  Speaker 3: Right.
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  Speaker 1: And so we'll start there and then we'll jump way
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  Speaker 1: right after he's already explained how he's built this thing
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  Speaker 1: to where he now is delving into his analysis, his understandings.
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  Speaker 1: of capitalism, of how capitalism actually works. All right. And
• 10:28
  Speaker 1: by the way, I am streaming on Twitch. I'm still
• 10:32
  Speaker 1: not sure what that is going to give me, but
• 10:35
  Speaker 1: we're on Twitch. And I'm not sure what that, what
• 10:40
  Speaker 1: does that do? All right. And we're on Facebook and
• 10:44
  Speaker 1: we're on Twitter and we're on YouTube and we're on Patreon.
• 10:47
  Speaker 1: We're streaming on all those things. At the same time,
• 10:49
  Speaker 1: right now. So no excuses. You can watch us anywhere,
• 10:54
  Speaker 1: any one of those places, anywhere you want. And still
• 10:58
  Speaker 1: not doing the eight-hour Twitch. You know, I see no
• 11:06
  Speaker 1: reason why that would make any sense for me. All right.
• 11:10
  Speaker 1: Until I see some real action on Twitch right now,
• 11:14
  Speaker 1: I see no action, basically. Although number of followers is
• 11:18
  Speaker 1: going slowly. Give you that. What happened? Oh, there it is. Okay, cool.
• 11:24
  Speaker 1: Now I can see this better. All right, so let's
• 11:27
  Speaker 1: start with this. This is minute 323 in the video.
• 11:32
  Speaker 1: Let me just put you up there. There we go.
• 11:35
  Speaker 1: We're going to go in this format for the rest
• 11:37
  Speaker 1: of it. You can see, by the way, in this still,
• 11:39
  Speaker 1: you can see him, but you can also see the product, right?
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  Speaker 1: You can see the stainless steel at the head of it.
• 11:48
  Speaker 1: You know, you can see it doesn't have those, you know,
• 11:54
  Speaker 1: the kind of wires that can fall off. So you've
• 12:02
  Speaker 1: got the scrubber right here in front of you that
• 12:05
  Speaker 1: you can look at. No bristles. That's what I was
• 12:09
  Speaker 1: looking for. No bristles. No bristles. All right, so let's
• 12:13
  Speaker 1: listen to what he has to say. Let me know
• 12:15
  Speaker 1: if the volume is good. Let me know if it's
• 12:17
  Speaker 1: not good. Let me know if there's a problem, echo,
• 12:19
  Speaker 1: anything like that. The chat is open. Use it to
• 12:25
  Speaker 1: let me know. Yeah, yeah, yeah. Okay, Bob says, growth
• 12:32
  Speaker 1: on Twitch is quite doable with a consistent schedule, but
• 12:35
  Speaker 1: it can take a very, very long time. So I
• 12:38
  Speaker 1: have a long time. Streaming on Twitch is costing me nothing.
• 12:42
  Speaker 1: It's just another channel on Restream. My schedule is not consistent,
• 12:47
  Speaker 1: but I do produce huge quantities of content. Not eight
• 12:51
  Speaker 1: hours every day, but something every day, almost, when I'm home.
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  Speaker 1: And even when I travel, I produce stuff. So huge,
• 12:58
  Speaker 1: just hours and hours and hours of content. So hopefully,
• 13:01
  Speaker 1: over time, we will get some kind of response. Maybe,
• 13:05
  Speaker 1: maybe not. All right, here we go. So this is...
• 13:11
  Speaker 1: What was his name again? Destin. Destin. It's an unusual name.
• 13:16
  Speaker 1: I forget it. Destin. All right, here's Destin.
• 13:20
  Speaker 3: But what I'm really interested in is what are the
• 13:23
  Speaker 3: systemic forces in our economy that makes that the norm?
• 13:28
  Speaker 3: Almost every product I have eventually becomes a crappier version
• 13:33
  Speaker 3: of itself, and I hate that. This is what happens
• 13:36
  Speaker 3: when you push capitalism to the max and you prioritize
• 13:39
  Speaker 3: profits over people. Profit is a very important component to
• 13:44
  Speaker 3: the world economy. And today we're going to talk about
• 13:47
  Speaker 3: the nuance of how that can be used and what
• 13:50
  Speaker 3: happens when you take it too far.
• 13:52
  Speaker 1: All right. So there you get the essence of his thesis, right?
• 13:55
  Speaker 1: The essence of the thesis is, look, profit is important.
• 13:58
  Speaker 1: We need profit. But profit taken too far. When you
• 14:04
  Speaker 1: prioritize profits over people, that's when you get crappy scrubbers
• 14:12
  Speaker 1: that hurt people instead of this beautiful product. with chain
• 14:15
  Speaker 1: mail that doesn't do it, right? Now, as we'll see,
• 14:21
  Speaker 1: you know, what exactly all this means is, what exactly
• 14:26
  Speaker 1: all this means, we will see as we go along
• 14:29
  Speaker 1: what he means by taking profit too far. To the
• 14:35
  Speaker 1: extent that he means privatizing profit over people or, you know,
• 14:39
  Speaker 1: taking it too far, if he means by that, Profits
• 14:42
  Speaker 1: seeking without ethics, well, we can talk about that. We
• 14:45
  Speaker 1: can talk about what ethics are appropriate and what ethics
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  Speaker 1: are rewarded in capitalism. Profits over people assumes that profits
• 14:57
  Speaker 1: don't come from people. How do you make a profit
• 15:00
  Speaker 1: if you put the profit over the people? If, in
• 15:03
  Speaker 1: a sense, you don't care about people, you don't care
• 15:06
  Speaker 1: about your customers, then how do you make the profits? Now,
• 15:12
  Speaker 1: we'll talk about that. And then he's got this empirical
• 15:17
  Speaker 1: claim that he just makes, and I think a lot
• 15:19
  Speaker 1: of people believe it. You see this a lot, and
• 15:22
  Speaker 1: maybe even on our chat, we have some people who
• 15:25
  Speaker 1: believe this. And that's this idea that stuff just gets crappier.
• 15:30
  Speaker 1: That everything today is crappier than it used to be.
• 15:34
  Speaker 1: And just give it enough time, and it's going to
• 15:37
  Speaker 1: be crappier. Now, That's probably true on some things, particularly
• 15:43
  Speaker 1: things that we buy today that are relatively cheap because
• 15:51
  Speaker 1: we have chosen to prefer cheap to good. I mean,
• 15:58
  Speaker 1: there is a tradeoff, right, between how cheap something is
• 16:02
  Speaker 1: and how everlasting and well-made it probably is. There's some
• 16:06
  Speaker 1: tradeoff there. You can buy a cheap car. You can
• 16:08
  Speaker 1: buy an expensive car. There's probably some, there's a trade-off, right?
• 16:12
  Speaker 1: There's a trade-off in terms of safety. There's a trade-off
• 16:14
  Speaker 1: in terms of comfort. There's a trade-off in terms of speed, handling,
• 16:18
  Speaker 1: and also in terms of just how long it lasts.
• 16:21
  Speaker 1: You know, you can buy a Lexus and it'll drive forever, basically,
• 16:25
  Speaker 1: with almost no problems to it. And you can buy
• 16:29
  Speaker 1: a lot of cheaper cars and they'll have some problems.
• 16:32
  Speaker 1: Nothing disastrous, I think. If you look at cars, for example,
• 16:36
  Speaker 1: cars are so much better today than they were 40
• 16:40
  Speaker 1: years ago. I mean, when was the last time you
• 16:44
  Speaker 1: had a real problem with a new car of yours?
• 16:51
  Speaker 1: I mean, these cars, you plug it in and you drive,
• 16:55
  Speaker 1: and if you take care of it, you do the
• 16:58
  Speaker 1: maintenance once every so many tens of thousands of miles,
• 17:04
  Speaker 1: then these cars last forever. How about phones? Phones. Remember
• 17:12
  Speaker 1: dial-up phone? Anybody have still a dial-up phone at home?
• 17:16
  Speaker 1: I don't. Phones are so much better. So much faster.
• 17:21
  Speaker 1: So much more effective. I'm not even talking about smartphone
• 17:25
  Speaker 1: versus not smartphone. Forget about that. TVs. TVs. Thin. Unbelievable picture.
• 17:36
  Speaker 1: And like 95% cheaper than they used to be. I mean,
• 17:48
  Speaker 1: you're always going to find something, right? But, you know,
• 17:52
  Speaker 1: Kutababa says, my AC stopped a month after the warranty ended. Yeah,
• 17:57
  Speaker 1: that's funny or sad or whatever. But think about AC
• 18:00
  Speaker 1: and how much variety you have in AC and how
• 18:02
  Speaker 1: many options you have in AC, which didn't exist 20
• 18:07
  Speaker 1: years ago. Is it crappier? No, I don't know. You
• 18:12
  Speaker 1: think things didn't die after their warranty expired 30, 40
• 18:16
  Speaker 1: years ago? Air travel? People complain constantly about air travel.
• 18:20
  Speaker 1: But it's unbelievably cheap. Much cheaper than it used to be.
• 18:25
  Speaker 1: And you can go pretty much anywhere. So there are
• 18:29
  Speaker 1: thousands of flights. Hundreds of thousands, I think, every day.
• 18:32
  Speaker 1: I mean, in every realm of our life.
• 18:36
  Speaker 4: I don't know.
• 18:37
  Speaker 1: My sense is You get more variety and it's cheaper.
• 18:41
  Speaker 1: And yeah, maybe some of it needs to be replaced
• 18:47
  Speaker 1: more often. But that's no big deal because it's so
• 18:50
  Speaker 1: much cheaper. Like maybe today's TVs don't last as long
• 18:55
  Speaker 1: as those big tube 19-inch screen televisions of the 1970s.
• 19:02
  Speaker 1: But who cares? They cost so much less. They're so
• 19:05
  Speaker 1: much better. I can replace them. Frequently for the same
• 19:10
  Speaker 1: price as that big, ugly tube thing. So what exactly
• 19:15
  Speaker 1: got crappier? I'm trying to, I'm looking around my room
• 19:21
  Speaker 1: to try. I mean, I have these spotlight things that are,
• 19:24
  Speaker 1: I mean, just think, I was just thinking the other day,
• 19:27
  Speaker 1: when was the last time you replaced a light bulb?
• 19:31
  Speaker 1: Like I never replaced light bulbs. It used to be
• 19:34
  Speaker 1: a major hassle to replace light bulbs, particularly if you
• 19:38
  Speaker 1: had high ceilings. You'd have to get a ladder. You'd
• 19:40
  Speaker 1: have to climb up there. And some of these lights
• 19:44
  Speaker 1: were pretty high up, and it was a little dangerous.
• 19:46
  Speaker 1: And light bulbs, you don't... replace light bulbs anymore. So
• 19:54
  Speaker 1: we can in life, general statement about life, we can
• 19:59
  Speaker 1: in life generally focus on all the things we don't
• 20:01
  Speaker 1: like and all the things that have gone wrong and
• 20:03
  Speaker 1: all the things that have broken down and all the
• 20:05
  Speaker 1: things that we vaguely remember a long, long time ago. About,
• 20:13
  Speaker 1: you know, that seemed to have worked better. Seemed to
• 20:18
  Speaker 1: have worked better. And yeah, I'm sure there's a few
• 20:24
  Speaker 1: things like that. But even for Destin, is that his name? Destin? God,
• 20:32
  Speaker 1: I can't retain the name. It's pathetic. I've got it
• 20:35
  Speaker 1: written down here, but it's way up there. Destin, yes.
• 20:41
  Speaker 1: But even for Destin, if he looks around, if he
• 20:43
  Speaker 1: really honestly looks around at all the things that are better,
• 20:47
  Speaker 1: my guess is his clothes are significantly cheaper and better.
• 20:53
  Speaker 1: Particularly if he buys them made in Vietnam or wherever.
• 20:59
  Speaker 1: I can't think of, you know. I mean, sure, there's
• 21:06
  Speaker 1: cheap crappy stuff, but that's why it's cheap. It's very cheap.
• 21:11
  Speaker 1: And again, there might be certain things that you prefer
• 21:15
  Speaker 1: were handmade a long time ago. Yeah, okay. You can
• 21:18
  Speaker 1: probably get them at a high price. Or maybe you
• 21:20
  Speaker 1: can't get them. That's progress. So you can look at
• 21:28
  Speaker 1: the world and see all its defects. And it has
• 21:31
  Speaker 1: lots of them. But it's not objective to look at
• 21:35
  Speaker 1: the world and see crap when there's so much good.
• 21:40
  Speaker 1: I mean, he probably drives, what, a Ford F-150 would
• 21:43
  Speaker 1: be my guess, right? Maybe he drives the ones with
• 21:48
  Speaker 1: the aluminum body and that hyped-up engine. I mean, they're
• 21:53
  Speaker 1: so much better than they used to be. It's not
• 21:56
  Speaker 1: even close. Not to mention he could tie his iPhone
• 21:59
  Speaker 1: to it and drive anywhere in the world and have
• 22:02
  Speaker 1: a map. I mean, don't get me started. All right,
• 22:07
  Speaker 1: so that's kind of the setup. He's critical of capitalism
• 22:10
  Speaker 1: because profit taken too far. And yet at the 35th minute,
• 22:15
  Speaker 1: which I won't show you because it's just a short segment.
• 22:17
  Speaker 1: At the 35th minute, Destin says, quote, profit is a
• 22:21
  Speaker 1: really good signal that you can use to make decisions
• 22:26
  Speaker 1: in the marketplace. So I don't know, somewhere he heard
• 22:31
  Speaker 1: prices as information, allocating resources, capital, allocating your decisions. He
• 22:38
  Speaker 1: gets that profit is important. Where there's profit, people go
• 22:42
  Speaker 1: and invest. So again, he's not anti. He's not anti.
• 22:52
  Speaker 1: But he has no real understanding of how these things work.
• 22:57
  Speaker 1: And that leads him to some pretty nasty and wrong conclusions.
• 23:02
  Speaker 1: I think honestly made, but made out of real ignorance.
• 23:08
  Speaker 1: And by the way, this is the danger of a
• 23:11
  Speaker 1: science guy. Who's an engineer who likes to take things apart,
• 23:15
  Speaker 1: dabbling in economics. He just doesn't understand it. Now this
• 23:18
  Speaker 1: is not hard. So we're going to try to help
• 23:20
  Speaker 1: him help explain it to him. Um, he's not going
• 23:24
  Speaker 1: to watch this probably, but, um, It's a problem when
• 23:31
  Speaker 1: there are lots and lots and lots and lots and
• 23:32
  Speaker 1: lots of amateurs out there to think they know how
• 23:37
  Speaker 1: the world works. And they don't. They really don't. So
• 23:42
  Speaker 1: here's what we're going to ask for the next segment.
• 23:49
  Speaker 1: What does capitalism push to the max mean? What does
• 23:53
  Speaker 1: profit push to the max mean? Is that maximum freedom,
• 23:56
  Speaker 1: maximum profit, this quota? the absence of ethics. What does
• 24:01
  Speaker 1: it actually mean? What is he talking about? And for that,
• 24:05
  Speaker 1: we will skip to our next segment. All right, that's 3501. Oh,
• 24:08
  Speaker 1: I was going to skip to 3501. Okay, so we're
• 24:12
  Speaker 1: skipping 3501. We're going to go to 3803. So I
• 24:14
  Speaker 1: think this is where he brings out his whiteboard, and
• 24:17
  Speaker 1: we get to see some of the frustratingly ignorant economics. Okay,
• 24:33
  Speaker 1: here we go.
• 24:35
  Speaker 3: You get the idea. Okay, now we have the third CEO. Now,
• 24:39
  Speaker 3: this person is all about the money, okay? This person
• 24:44
  Speaker 3: has started a business that makes a grill scrubber, for example.
• 24:47
  Speaker 1: Actually, let me rewind this. Let me go back because
• 24:51
  Speaker 1: I actually think we need a little bit more background
• 24:53
  Speaker 1: on this in order to make any sense of this. Otherwise,
• 24:57
  Speaker 1: he's just He's going to be a long segment. All right.
• 25:03
  Speaker 1: But I think it's important that we get the whole.
• 25:06
  Speaker 1: All right. We're going to go all the way here.
• 25:10
  Speaker 1: All right. Well, he introduces this pyramid of his. All right.
• 25:14
  Speaker 1: So we've got a pyramid. Let's let's play this out.
• 25:18
  Speaker 4: Voila. The profit.
• 25:19
  Speaker 3: No, the profit prioritization perambulator. I think that's what I
• 25:23
  Speaker 3: call it. Let's look at this thing and let's just
• 25:25
  Speaker 3: start to play and explore.
• 25:27
  Speaker 1: So.
• 25:28
  Speaker 3: This thing is really fun, and you'll notice we have
• 25:31
  Speaker 3: a lot of shapes and stuff going on. So let's
• 25:33
  Speaker 3: look down here.
• 25:35
  Speaker 1: So I want you to notice it's really fun. Yeah,
• 25:37
  Speaker 1: it's kind of interesting. I want you to start thinking
• 25:42
  Speaker 1: about what's wrong with the way he presents this.
• 25:45
  Speaker 3: This is a star, and the star represents product quality.
• 25:50
  Speaker 3: You know, you have like five-star reviews and stuff. So
• 25:52
  Speaker 3: that is a measure of how good the product is.
• 25:56
  Speaker 3: Up here, of course, we have profit because we are
• 25:59
  Speaker 3: working within the context of capitalism. Profit is not always
• 26:03
  Speaker 3: a bad thing. It gets a bad rap sometimes.
• 26:04
  Speaker 4: You keep saying that.
• 26:05
  Speaker 3: But profit is a really good signal that you can
• 26:08
  Speaker 3: use to make decisions in the marketplace.
• 26:11
  Speaker 4: So profit's good.
• 26:11
  Speaker 1: Oh, so we're using that statement anyway.
• 26:13
  Speaker 4: Another thing down here.
• 26:13
  Speaker 3: Is we have a person. Now— This might be a stretch.
• 26:16
  Speaker 3: I thought about making this the worker. I thought about
• 26:19
  Speaker 3: making this the customer. But for now, let's just call
• 26:21
  Speaker 3: this societal good.
• 26:23
  Speaker 1: OK. Yeah. I mean, he's using a term that doesn't
• 26:26
  Speaker 1: really mean anything. But think of it as customer or
• 26:31
  Speaker 1: worker or some combination of them. This is the, you know, business.
• 26:38
  Speaker 1: So think of it in those terms.
• 26:40
  Speaker 3: You have a good society and people are happy when
• 26:42
  Speaker 3: that person's happy. You'll also notice that we have this triangle,
• 26:46
  Speaker 3: which is pretty interesting.
• 26:47
  Speaker 4: The triangle represents a business.
• 26:51
  Speaker 3: Everything inside the dotted triangle is a viable business. Everything
• 26:55
  Speaker 3: outside the dotted triangle is a business that has failed.
• 26:58
  Speaker 3: You'll see this green trapezoid here. Now that represents what
• 27:02
  Speaker 3: I would say is like where I grew up. You
• 27:05
  Speaker 3: had a healthy middle class business.
• 27:07
  Speaker 1: And so what does it mean to have a healthy
• 27:10
  Speaker 1: middle class? This is part of the mythology that I
• 27:13
  Speaker 1: think a lot of people like him, a lot of
• 27:14
  Speaker 1: people who watch him, and a lot of people who
• 27:16
  Speaker 1: are sympathetic to his ideas believe. What is a healthy
• 27:19
  Speaker 1: middle class? The middle class today is richer than it's
• 27:23
  Speaker 1: ever been. It's wealthier than it's ever been. What's a
• 27:30
  Speaker 1: healthy middle class? This is where he grew up. We
• 27:33
  Speaker 1: talked a lot on the Iran Book Show yesterday. about
• 27:36
  Speaker 1: the idea of nostalgia. There is this idea that, oh,
• 27:39
  Speaker 1: things were so good in the past when we had
• 27:41
  Speaker 1: a healthy middle class. When I grew up, things were better.
• 27:44
  Speaker 1: When I grew up, that's when America was at its peak.
• 27:46
  Speaker 1: When I grew up, things were so nice, so pleasant.
• 27:50
  Speaker 1: Everybody played in their front yard. Yeah. What's a healthy
• 27:56
  Speaker 1: middle class? place, he says, where workers were happy.
• 28:00
  Speaker 3: The middle class existed in a place where the workers
• 28:04
  Speaker 3: were happy, quality was good in general, profits were not
• 28:08
  Speaker 3: out of control.
• 28:09
  Speaker 1: So the implication is today we live in a world
• 28:12
  Speaker 1: that is out of whack with this. Quality is low,
• 28:18
  Speaker 1: profits are really, really high, and people are unhappy. And
• 28:21
  Speaker 1: it's true that people are unhappy. We've talked a lot
• 28:23
  Speaker 1: on the Iran Book Show about people being unhappy. But
• 28:27
  Speaker 1: it's not clear why people are unhappy, right? And I
• 28:31
  Speaker 1: don't think he's going to solve our problem.
• 28:32
  Speaker 4: It was a good time.
• 28:34
  Speaker 1: It was a good time.
• 28:34
  Speaker 3: So the green trapezoid represents like a good balance.
• 28:39
  Speaker 4: Let's say it that way.
• 28:39
  Speaker 3: Okay, if we look over here to this side, you
• 28:42
  Speaker 3: can see that we've got these three little squares, quality, profit, people,
• 28:46
  Speaker 3: and we can reprioritize them. And the position of these
• 28:51
  Speaker 3: little things– corresponds to where we are on our business
• 28:56
  Speaker 3: graph here, okay? Like we move a thing, this moves, okay?
• 28:58
  Speaker 3: It's pretty cool that he created this thing.
• 29:00
  Speaker 1: So let's start.
• 29:00
  Speaker 3: Let's say that I, an engineer, engineers are known to be.
• 29:04
  Speaker 4: A little weird.
• 29:05
  Speaker 1: A little weird is right.
• 29:06
  Speaker 3: I like making things, right? I like making things from
• 29:10
  Speaker 3: really cool materials. So if I were to run the company,
• 29:13
  Speaker 3: I would say, you know what, John? I think we
• 29:16
  Speaker 3: really need to make this out of a super alloy
• 29:18
  Speaker 3: of niobium or phantastaloid. We need to do something that
• 29:22
  Speaker 3: will never break because I like really high quality stuff.
• 29:25
  Speaker 3: So what I might do if I were in control
• 29:28
  Speaker 3: of things is I might say, you know what? We're
• 29:29
  Speaker 3: going to take the quality of the product and we're
• 29:31
  Speaker 3: going to run it to the max. We're going to
• 29:34
  Speaker 3: run it to the max. And I would immediately... run
• 29:37
  Speaker 3: myself out of business.
• 29:39
  Speaker 1: So notice what happens when he runs his thing to
• 29:43
  Speaker 1: the max, right? Quality is to the max. What happens
• 29:47
  Speaker 1: to profit? Well, it goes to zero. Now, why? Why?
• 29:59
  Speaker 1: I mean, I'm going to ask you again, why? Why
• 30:03
  Speaker 1: would emphasizing quality drive profits to zero? I mean, I'll
• 30:09
  Speaker 1: give you an example. Let's take something that is really, really,
• 30:15
  Speaker 1: really high quality. A Ferrari. We can all agree Ferraris
• 30:21
  Speaker 1: are high quality. They're basically built with special alloys, as
• 30:25
  Speaker 1: he's describing. They're built by hand. They're customized and they
• 30:32
  Speaker 1: sell at a huge profit. And indeed, Ferrari is one
• 30:34
  Speaker 1: of the few auto companies out there in the world,
• 30:37
  Speaker 1: I think right now, that is profitable. So indeed, they
• 30:44
  Speaker 1: have a high profit. So why is it that he
• 30:53
  Speaker 1: views high quality as low profit? Only because he assumes
• 31:03
  Speaker 1: that the people, the customers, those little blue people over there,
• 31:09
  Speaker 1: they don't value high quality. So they're not willing to
• 31:13
  Speaker 1: pay more for high quality. But why? Why is that
• 31:17
  Speaker 1: the assumption? So, I mean, one of the beautiful things
• 31:23
  Speaker 1: about capitalism and about the world in which we live,
• 31:26
  Speaker 1: even the mixed economy has this, is that the plethora
• 31:31
  Speaker 1: of businesses we have create products, create products of various
• 31:42
  Speaker 1: different qualities and various different price points. Generally, not always,
• 31:54
  Speaker 1: but generally, the higher the quality, the better the materials,
• 31:59
  Speaker 1: the greater the customization, the higher the cost, and the
• 32:03
  Speaker 1: lower the quality, the lower the cost. And people can
• 32:06
  Speaker 1: generally pick between high-quality stuff and low-quality stuff. And the
• 32:10
  Speaker 1: availability of a variety of things, the availability of diversity
• 32:15
  Speaker 1: of products, makes customers really happy. And indeed, you can
• 32:19
  Speaker 1: start out driving a little, I don't know what's a
• 32:24
  Speaker 1: crappy little car today, a little Kia, although Kia is
• 32:27
  Speaker 1: a really good cause. And, you know, as you grow
• 32:31
  Speaker 1: wealthier and as you're interested in upgrading the quality of
• 32:36
  Speaker 1: your experience driving, you can slowly ratchet up to driving
• 32:40
  Speaker 1: a BMW. And at every price point, you're getting something
• 32:49
  Speaker 1: that's good, that you're willing to give up your money
• 32:53
  Speaker 1: to exchange for it. So it's, you know, this is
• 32:59
  Speaker 1: the thing. This is not hard. I don't think this
• 33:03
  Speaker 1: is very complicated. And yet, he's got quality going up,
• 33:10
  Speaker 1: profits going way down, not necessarily the case, and People's
• 33:15
  Speaker 1: satisfaction going way down.
• 33:17
  Speaker 4: Well, why?
• 33:20
  Speaker 1: Why?
• 33:20
  Speaker 4: All right.
• 33:24
  Speaker 1: So notice, for example, that, as we'll see, he's building
• 33:28
  Speaker 1: a high-quality product. He's built a high-quality product, a thing
• 33:34
  Speaker 1: for stainless steel with mesh material and everything. He's probably
• 33:38
  Speaker 1: charging a premium, and there's a market for it. People
• 33:43
  Speaker 1: are happy. He's making a profit. And quality is really good.
• 33:47
  Speaker 1: Maybe it's not, you know, Ferrari quality, but maybe in
• 33:52
  Speaker 1: the realm of scrapers, you don't need Ferrari quality. Yeah,
• 34:01
  Speaker 1: there's a certain level of quality that the market, that
• 34:04
  Speaker 1: customers are not willing to pay for. Why aren't they
• 34:07
  Speaker 1: willing to pay for it? Because the difference between it
• 34:11
  Speaker 1: and something of slightly less quality is just not worth
• 34:13
  Speaker 1: the difference. They're not better off by buying it. This
• 34:18
  Speaker 1: is kind of business, entrepreneurship, economics 101. So there is
• 34:27
  Speaker 1: no trade-off here. There is no, I mean, there might
• 34:31
  Speaker 1: be a trade-off, but there's no necessary trade-off. And there
• 34:34
  Speaker 1: are pretty obvious examples why these do not trade off.
• 34:41
  Speaker 1: So I guess it's frustrating. It's frustrating for me, as
• 34:46
  Speaker 1: somebody advocating for capitalism forever, that relatively simple stuff like this,
• 34:53
  Speaker 1: smart people don't get. All right, so let's keep going.
• 34:58
  Speaker 3: Because I would not make a profit.
• 35:01
  Speaker 4: Look at this. No profit.
• 35:03
  Speaker 3: The business is outside of the dotted line. We are
• 35:05
  Speaker 3: no longer a viable business.
• 35:07
  Speaker 1: Why? That's just an artificial creation. numbers that you just
• 35:11
  Speaker 1: made up.
• 35:13
  Speaker 3: I would do that because I think if I can
• 35:16
  Speaker 3: still feed my family, I think super alloys are cool.
• 35:19
  Speaker 3: All right. So let's look at another CEO. This is
• 35:22
  Speaker 3: a second CEO. This person's like the best person to
• 35:25
  Speaker 3: work for in the world. He really likes the fact
• 35:28
  Speaker 3: that you like to fish and he really wants you
• 35:31
  Speaker 3: to afford that new bass boat. So he pays you
• 35:32
  Speaker 3: a lot of money.
• 35:33
  Speaker 1: So now the blue thing is employees, not customers.
• 35:37
  Speaker 3: You know what?
• 35:38
  Speaker 4: I really like my buddy here.
• 35:39
  Speaker 3: I want this guy to make a lot of money.
• 35:42
  Speaker 3: So he starts paying you more than you perhaps might
• 35:45
  Speaker 3: need to be paid. And he's like, you know what?
• 35:47
  Speaker 3: I also really want you to compete in that bass tournament.
• 35:50
  Speaker 3: So I'm going to let you off at about one
• 35:52
  Speaker 3: o'clock every day. Pretty soon things are out of whack
• 35:56
  Speaker 3: and you are no longer a viable business.
• 35:59
  Speaker 1: Again, is that really the case? Well, I mean, if
• 36:04
  Speaker 1: it's completely whim-driven, I just like you, I'm going to
• 36:07
  Speaker 1: give you more money, and it hasn't changed your productivity
• 36:10
  Speaker 1: at all, then sure, yes. The more money I give
• 36:12
  Speaker 1: my employees just out of whim, you know, the more
• 36:17
  Speaker 1: profits are going to be hurt, and he has quality
• 36:19
  Speaker 1: going down. Maybe quality goes down. Maybe it doesn't. Maybe
• 36:22
  Speaker 1: it goes up. Maybe, maybe, maybe. You could think of
• 36:26
  Speaker 1: it another way. I'm paying them more now so they're
• 36:28
  Speaker 1: more motivated, and they're actually working harder, and productivity goes up.
• 36:33
  Speaker 1: And quality goes up. And maybe profits don't suffer. Or
• 36:37
  Speaker 1: maybe profits improve. I mean, there's so many variables here
• 36:40
  Speaker 1: that he is ignoring. Completely. And of course, is there
• 36:47
  Speaker 1: a conflict here between employees and customers? Customers. You're paying
• 36:54
  Speaker 1: more to the employees, but the price of the good
• 36:56
  Speaker 1: is now going to increase maybe in order for you
• 36:58
  Speaker 1: to maintain the profit. So customers are going to go
• 37:01
  Speaker 1: down in value, down in happiness. Lots of moving parts.
• 37:07
  Speaker 1: He's overly simplifying it, reducing the dimensions in which things
• 37:15
  Speaker 1: are happening. I'll give you a real good historical example here.
• 37:19
  Speaker 1: And there are plenty of these, but this is an
• 37:22
  Speaker 1: example everybody knows. or everybody who's studied business knows. I mean,
• 37:27
  Speaker 1: Henry Ford in, what was it, the 1920s or 1930s,
• 37:31
  Speaker 1: I can't remember, basically doubled the wages of his employees
• 37:38
  Speaker 1: out of nowhere. He didn't wait for their productivity to increase.
• 37:42
  Speaker 1: He just doubled their wages. Now, why did he do that?
• 37:45
  Speaker 1: He did it because he had a huge amount of
• 37:46
  Speaker 1: turnover and he wanted stable employees because he knew that
• 37:51
  Speaker 1: was a real value. He also knew that by raising wages,
• 37:57
  Speaker 1: he would attract the most productive auto workers, assembly line workers,
• 38:01
  Speaker 1: from other companies, and he would get the most productive
• 38:05
  Speaker 1: people to come and work for him. And that was
• 38:11
  Speaker 1: a huge value to him. So you got Henry Ford,
• 38:14
  Speaker 1: for example, doubling wages. I don't know, have you noticed
• 38:17
  Speaker 1: recently the AI companies competing with With these unbelievable pay packages,
• 38:24
  Speaker 1: I mean, into the many, many, many millions of dollars
• 38:28
  Speaker 1: for talent and being willing to pay people more and
• 38:32
  Speaker 1: more and more money. Why? Because they believe those people
• 38:37
  Speaker 1: will enhance productivity to such an extent that profits will
• 38:40
  Speaker 1: actually go up. And quality will go through the roof.
• 38:49
  Speaker 1: So again, it's... This is the problem with engineers trying
• 38:55
  Speaker 1: to oversimplify the market and how the market actually, actually works,
• 39:02
  Speaker 1: actually works. So, yeah.
• 39:10
  Speaker 4: See, he did not take the time.
• 39:11
  Speaker 3: To balance things. Of course, these are absurd examples, but
• 39:15
  Speaker 3: you get the idea. Okay, now we have the third CEO. Now,
• 39:18
  Speaker 3: this person is all about the money, okay? This person
• 39:23
  Speaker 3: has started a business that makes a grill scrubber, for example,
• 39:27
  Speaker 3: and he's got a product that's viable, okay? a good
• 39:30
  Speaker 3: balance between quality and people, but it's not making a
• 39:33
  Speaker 3: lot of profit. But then this person that gets in
• 39:35
  Speaker 3: the director's chair says, you know what? We really need
• 39:38
  Speaker 3: to make more money. And the way I think we
• 39:40
  Speaker 3: can do that is instead of using this 304 stainless
• 39:43
  Speaker 3: steel or 303, whatever it is, Instead of using that,
• 39:46
  Speaker 3: I think we can use a lower quality alloy that
• 39:49
  Speaker 3: we can source from overseas.
• 39:51
  Speaker 4: And what we'll do is we'll just make our profit
• 39:54
  Speaker 4: go up. And look at that.
• 39:55
  Speaker 3: Our quality went down, went further away from that, but
• 39:58
  Speaker 3: our profit went up.
• 39:59
  Speaker 4: That's good, right?
• 40:00
  Speaker 3: Okay, so we're right here in the sweet spot. People
• 40:02
  Speaker 3: still love us. Everything's great.
• 40:04
  Speaker 1: What's the problem with that?
• 40:05
  Speaker 4: If you look at this.
• 40:07
  Speaker 1: What's the problem with that? That profit went up, quality
• 40:10
  Speaker 1: went down. What's the problem there? The problem there is.
• 40:15
  Speaker 1: If quality went down, what's going to happen to demand?
• 40:19
  Speaker 1: If quality went down, why would you assume the same
• 40:23
  Speaker 1: number of people are going to buy the good? If
• 40:27
  Speaker 1: quality went down, maybe, maybe, I don't know, the number
• 40:30
  Speaker 1: of people who buy this, maybe they realize it's bad.
• 40:34
  Speaker 1: Maybe somebody chokes on one of those bristle things and
• 40:38
  Speaker 1: sues the company. How's profit going up?
• 40:45
  Speaker 3: There's still profit to be had in the system here.
• 40:48
  Speaker 3: Look at this gap here. So what we could do
• 40:50
  Speaker 3: is we've got these workers here. What if we paid
• 40:52
  Speaker 3: the workers less? In fact, let's not even hire permanent
• 40:55
  Speaker 3: workers anymore. Let's hire contract employees, give them no future
• 40:59
  Speaker 3: in the company, just temporary workers.
• 41:01
  Speaker 4: Yeah, let's do that.
• 41:02
  Speaker 3: So let's just push our profits up even higher.
• 41:05
  Speaker 4: Yeah, we can start exploiting people. Look at that.
• 41:07
  Speaker 1: Oh, man.
• 41:08
  Speaker 3: Look, now our quality and our people, they're meh, but sweet.
• 41:13
  Speaker 1: What happens if you do this? And I'm not saying
• 41:15
  Speaker 1: it never happens, right? So some manager comes in and
• 41:19
  Speaker 1: he says to help with people, tell my employees I'm
• 41:22
  Speaker 1: going to hire contractors. They're not committed. They're less productive.
• 41:26
  Speaker 1: So they don't produce quite as much. So the quality
• 41:31
  Speaker 1: goes down. And I'm mostly using shitty materials. So quality
• 41:35
  Speaker 1: goes down even further. Now, notice that having less productive
• 41:39
  Speaker 1: employees hurts my bottom line. But that's okay because I'm
• 41:42
  Speaker 1: mostly using shittier materials. That spikes profit. What would happen? Well, one,
• 41:48
  Speaker 1: people might not use your product. But let's say there's
• 41:53
  Speaker 1: just not a lot of choice out there. And people
• 41:55
  Speaker 1: are still using their product because they have no choice.
• 42:00
  Speaker 1: But it's a shitty product. And your work is unhappy.
• 42:03
  Speaker 1: So productivity is declining. So profit might be going up
• 42:06
  Speaker 1: in the short run. What happens in the marketplace? What
• 42:13
  Speaker 1: happens in the marketplace when a manager does this? And
• 42:19
  Speaker 1: I'm not saying managers don't do this. Sometimes they do.
• 42:23
  Speaker 1: What would happen in the marketplace? Well, one of the
• 42:29
  Speaker 1: things that might happen in the marketplace is somebody like
• 42:33
  Speaker 1: Destin would see an opportunity. He'd say, whoa, here's a
• 42:45
  Speaker 1: product that's increasing in pricing, let's say. It's decreasing in quality.
• 42:50
  Speaker 1: And there's a bunch of disgruntled employees that are being
• 42:54
  Speaker 1: laid off that are really, really, really good at producing
• 42:57
  Speaker 1: this product. Huh. I wonder if I can make a
• 43:01
  Speaker 1: product that's better than the product that's in the marketplace
• 43:06
  Speaker 1: right now. And I wonder if I can hire some
• 43:10
  Speaker 1: of these disgruntled workers. And I wonder if I can
• 43:13
  Speaker 1: make money. So what corrects for the evil CEO who's
• 43:20
  Speaker 1: screwing everybody to make a short run profit? Well, it's
• 43:25
  Speaker 1: called competition. Somebody will figure out. Somebody will find the opportunity.
• 43:32
  Speaker 1: And in this case, Destin did. He's proof that it works.
• 43:37
  Speaker 1: He found a you know, a place in the market
• 43:44
  Speaker 1: where there was real opportunity for making money by producing
• 43:49
  Speaker 1: something of higher quality at a reasonable cost and making money.
• 43:57
  Speaker 1: I mean, Destin and people like him call them entrepreneurs.
• 44:04
  Speaker 1: are the solution to irrational managers. I'm not saying there
• 44:08
  Speaker 1: are no irrational managers in the world. I don't think
• 44:10
  Speaker 1: they survive very long. There are some irrational managers. They
• 44:14
  Speaker 1: just don't last very long because competition will drive them
• 44:18
  Speaker 1: out of business. They'll crush them. So everything he does here,
• 44:28
  Speaker 1: there's a market response. There's another dimension here. that he
• 44:33
  Speaker 1: can't see. And again, he says, oh, these are simple.
• 44:36
  Speaker 1: I know they're not real. Then why are you doing it?
• 44:40
  Speaker 1: But they're not real. They're really not real.
• 44:44
  Speaker 4: Still, look at our profit, man. We are so much profit. Man,
• 44:48
  Speaker 4: this is great.
• 44:49
  Speaker 3: The shareholder value is going through the roof.
• 44:51
  Speaker 4: This is fantastic. But can we do more?
• 44:54
  Speaker 1: But the reality is, and again, you don't expect every
• 44:58
  Speaker 1: engineer to know this, Share prices are not built on
• 45:04
  Speaker 1: today's profits. Share prices are not built on today's profit.
• 45:11
  Speaker 1: They're built on future profits. And if your quality is
• 45:14
  Speaker 1: deteriorating and your customer is unhappy and your workers are
• 45:19
  Speaker 1: unhappy and they're not very skilled and they're not very productive,
• 45:24
  Speaker 1: then shareholders look at that and say, yeah, it's a
• 45:27
  Speaker 1: shitty company. share price could go down. I mean, how
• 45:30
  Speaker 1: many times have you seen profits go up, share price
• 45:33
  Speaker 1: go down? How many times have you seen companies with
• 45:36
  Speaker 1: no profits, zero, zilch, nada, and their share price through
• 45:41
  Speaker 1: the roof, SpaceX? Because share price is not built on
• 45:46
  Speaker 1: profit today. It's built on profit in the future. And
• 45:49
  Speaker 1: if the managers are just short-term exploiters, just trying to
• 45:56
  Speaker 1: make as much money as they can quickly, then the
• 45:59
  Speaker 1: market is going to say, this is not worth a
• 46:01
  Speaker 1: lot because there's no long-term viability. The market, shareholders, do
• 46:09
  Speaker 1: not reward short-term thinking. Shareholders punish companies like that all
• 46:18
  Speaker 1: the time, all the time.
• 46:26
  Speaker 4: Are there more things we can do? I know.
• 46:29
  Speaker 3: Let's just move the whole operation overseas. Let's quit doing
• 46:32
  Speaker 3: this long-term thinking thing. Let's think short-term.
• 46:35
  Speaker 4: And look at that.
• 46:35
  Speaker 1: Oh, man. Look at that. As soon as you move
• 46:38
  Speaker 1: stuff overseas, quality goes down. Hmm. How does that happen?
• 46:45
  Speaker 1: I mean, Ford makes really good cars in Europe. Quality
• 46:50
  Speaker 1: is really high. It's actually higher in Europe than it
• 46:52
  Speaker 1: is in the United States. I mean, a lot of
• 46:55
  Speaker 1: the cars we buy... Built in Japan by Japanese companies,
• 46:59
  Speaker 1: quality is really high. I mean, that's how they beat
• 47:01
  Speaker 1: the American companies in the 1970s, by producing better cars,
• 47:05
  Speaker 1: higher quality at lower cost. A lot of American companies, like,
• 47:10
  Speaker 1: I don't know, Apple, assembles its iPhones and has the
• 47:19
  Speaker 1: chips that it designs produced overseas. Why? Because they'll get
• 47:25
  Speaker 1: it at a much higher quality and a much lower cost.
• 47:30
  Speaker 1: So again, there's so much wrong with this analysis. It's
• 47:37
  Speaker 1: so biased to give him the result that he wants.
• 47:46
  Speaker 1: He wants a certain result. He wants a certain outcome.
• 47:50
  Speaker 1: And he's created a board with a little game with
• 47:53
  Speaker 1: pushing buttons that reflect the outcome he's already decided is right.
• 47:58
  Speaker 1: But just if he'd step back and just think about
• 48:01
  Speaker 1: it a little bit, he'd realize that's just not true.
• 48:08
  Speaker 1: It's just not true. It doesn't work this way. This
• 48:12
  Speaker 1: is not how markets work. I mean, we're on this
• 48:19
  Speaker 1: board of competitors. Where on this board are competitors switching
• 48:23
  Speaker 1: to other products? Where on the board is the new entrepreneur?
• 48:31
  Speaker 1: Producing abroad reduces quality. Why? No proof of that. No
• 48:37
  Speaker 1: evidence of that. No reason to believe it's true. So, again,
• 48:49
  Speaker 1: the reason I'm doing this is I think a lot
• 48:51
  Speaker 1: of people think this way. A lot of people. And, again, 2.9
• 48:55
  Speaker 1: million views. God, it takes me a year to get 2.9
• 49:01
  Speaker 1: million views for all my videos combined over the year.
• 49:09
  Speaker 1: And he gets it on one video in two months. Again,
• 49:17
  Speaker 1: I'm jealous, but I'm also critical. also critical all right
• 49:25
  Speaker 1: so uh yeah let's let's go a little bit further
• 49:28
  Speaker 1: uh 39.
• 49:32
  Speaker 3: Alive Look at all this profit we have made. We
• 49:38
  Speaker 3: have run right up into a maximum profit business that
• 49:44
  Speaker 3: has what I will call wedged itself up into the
• 49:47
  Speaker 3: profit crotch. This is the most profit you can get
• 49:51
  Speaker 3: out of a company without poking through the other side
• 49:54
  Speaker 3: and ticking people off. And this is why almost every
• 49:57
  Speaker 3: product you have that you've loved has eventually become a
• 50:00
  Speaker 3: crappier version of itself.
• 50:04
  Speaker 1: No, no logic to that. Absolutely none. Again, profit maximization
• 50:11
  Speaker 1: does not equal crappy products. Indeed, if crappy products is
• 50:18
  Speaker 1: what you produce, then people switch. And I don't know
• 50:24
  Speaker 1: what he's talking about in terms of all the crappy
• 50:25
  Speaker 1: products he has. I just don't know where it comes from.
• 50:31
  Speaker 1: But a lot of people believe this. I see it
• 50:33
  Speaker 1: all the time online. People really believe that products have
• 50:37
  Speaker 1: become worse, and it's all driven by that profit motive.
• 50:42
  Speaker 1: Profit motive has caused it to be significantly worse. All right, guys,
• 50:49
  Speaker 1: before we go on, we've got a lot of segments still,
• 50:53
  Speaker 1: but that will depend on you, right? We have a minimum,
• 50:58
  Speaker 1: you know, amount of money we need to raise every
• 51:01
  Speaker 1: half an hour, every hour, sorry, every hour. That's $ 250.
• 51:03
  Speaker 1: We're way behind on the first hour. If you like
• 51:10
  Speaker 1: these answering capitalism critics videos, then you've got to show
• 51:15
  Speaker 1: me you like them. Otherwise, why do them, right? I'm
• 51:17
  Speaker 1: not going to do them. I spend a lot of
• 51:18
  Speaker 1: time watching these videos, picking segments, thinking about what I'm
• 51:24
  Speaker 1: going to say about each one of them. This takes
• 51:26
  Speaker 1: a huge amount of time, And, you know, the $ 2. 50
• 51:30
  Speaker 1: is kind of the minimum to basically compensate for that time.
• 51:34
  Speaker 1: Maybe I just don't do a show on Saturday or
• 51:38
  Speaker 1: I do more news shows because they pay more. And
• 51:42
  Speaker 1: if I don't do a show, I don't get paid,
• 51:45
  Speaker 1: but I also don't have to put all the time in.
• 51:47
  Speaker 1: So really, I mean, seriously, it is an issue of
• 51:51
  Speaker 1: if you like these kind of shows, show me. Show me.
• 51:57
  Speaker 1: Show me the money. Is that, is that the, what
• 52:00
  Speaker 1: was that movie? That was a Tom Cruise movie. That
• 52:01
  Speaker 1: was a good Tom Cruise movie. Show me the money.
• 52:04
  Speaker 4: All right.
• 52:05
  Speaker 1: Uh, let me see. Let's skip ahead a little bit and, uh, um, and, uh,
• 52:14
  Speaker 1: Let's see. I'm going to just play along here and
• 52:17
  Speaker 1: see where you go.
• 52:18
  Speaker 3: Because what happens, this was written about by a guy
• 52:20
  Speaker 3: named Cory Doctorow. He has a word that I'm not
• 52:23
  Speaker 3: going to say here, but I'll.
• 52:24
  Speaker 4: Just call it encrapification.
• 52:26
  Speaker 3: The encrapification of a digital product in his case is
• 52:30
  Speaker 3: what he was explaining, but I think it applies to
• 52:32
  Speaker 3: physical products as well. What happens is at some point
• 52:35
  Speaker 3: you capture the market and then the game just becomes
• 52:39
  Speaker 3: profit extraction.
• 52:40
  Speaker 4: The motivation changes dramatically.
• 52:41
  Speaker 3: And you no longer care about how good the quality
• 52:44
  Speaker 3: of the product is or the people.
• 52:46
  Speaker 1: So haven't you noticed that, for example, with Google, they've
• 52:48
  Speaker 1: captured the market. They own search and how search has
• 52:52
  Speaker 1: become worse and worse and worse. Oh, wait. No, it hasn't.
• 52:56
  Speaker 1: Or Apple captured the market, right? And the product just
• 53:00
  Speaker 1: becomes worse and worse and worse. Microsoft Word and Excel,
• 53:04
  Speaker 1: although … The amazing thing is even when you capture
• 53:07
  Speaker 1: a market like Microsoft has, there's always competition. There's Google
• 53:11
  Speaker 1: Docs and there's a variety. There's all kinds of other competitors.
• 53:16
  Speaker 1: Apple has its own suite of these kind of products.
• 53:20
  Speaker 1: It really is stunning how, you know, these things just
• 53:24
  Speaker 1: become truisms in our culture. And again, I don't think
• 53:29
  Speaker 1: he's exceptional here. I think this is kind of typical
• 53:34
  Speaker 1: of what people believe. They actually believe this. And if
• 53:45
  Speaker 1: you think about Google and now you think about AI
• 53:49
  Speaker 1: and how much more efficient AI is in searching than
• 53:52
  Speaker 1: Google was and how much competition is arising to Google
• 53:57
  Speaker 1: because of AI, it's stunning. It's stunning.
• 54:05
  Speaker 3: How.
• 54:06
  Speaker 1: Just these ideas get inculcated in a culture and people
• 54:11
  Speaker 1: believe them. And it just kind of makes sense. I mean,
• 54:15
  Speaker 1: this is the old story about monopolies. I've talked about
• 54:17
  Speaker 1: monopolies endlessly. In a free market, they don't exist. They
• 54:21
  Speaker 1: don't exist exactly because if the monopolists behave in the
• 54:26
  Speaker 1: way that our economists, the way monopolies Destin here thinks
• 54:30
  Speaker 1: they would behave, competition would arise because there's money to
• 54:34
  Speaker 1: be made by competing, which is exactly what Destin is
• 54:37
  Speaker 1: doing to the people making the old scrubbers. Yeah, I mean,
• 54:46
  Speaker 1: it's just frustrating.
• 54:50
  Speaker 3: How it affects your community even, you just want to
• 54:53
  Speaker 3: maximize profit. And that's how you end up making things...
• 54:58
  Speaker 3: that hurt people or that just aren't good.
• 55:00
  Speaker 4: That's why.
• 55:00
  Speaker 1: So how well are the companies who hurt people doing?
• 55:04
  Speaker 1: They get sued. They lose a lot of money. So
• 55:07
  Speaker 1: is it really about making money or is it about
• 55:10
  Speaker 1: being thoughtless and being short term? And that causes people
• 55:19
  Speaker 1: to hurt other people. You know, this is, I mean,
• 55:24
  Speaker 1: all of this is leveraging off of, the idea that
• 55:28
  Speaker 1: is dominant in our culture, that self-interest, greed, profit, means
• 55:35
  Speaker 1: hurting other people, means exploiting other people. Business is greedy,
• 55:39
  Speaker 1: focuses on self-interest, and therefore bad things will happen. But
• 55:43
  Speaker 1: that's just a fallacy of altruism hashed over and over
• 55:48
  Speaker 1: and over and over and over and over again. And again,
• 55:53
  Speaker 1: it doesn't take much to step back and say, They're
• 55:56
  Speaker 1: not making money. They're not doing well. My guess is
• 56:02
  Speaker 1: the people who make the scrubbers that have hurt people
• 56:05
  Speaker 1: have lost a lot of money as a consequence. So, no,
• 56:28
  Speaker 1: I don't buy Doctorow's theory. I've looked at Doctorow's theory.
• 56:34
  Speaker 1: I don't buy it. Now, sure, for a period it
• 56:37
  Speaker 1: can survive. For a period it can survive. And in
• 56:42
  Speaker 1: regulated industries it can survive. But competitive forces step in
• 56:49
  Speaker 1: and take over. So... I don't think it's... I don't
• 57:00
  Speaker 1: think it's a serious theory. Because I think he ignores...
• 57:04
  Speaker 1: He ignores... He basically accepts traditional monopoly theory and adopts it.
• 57:17
  Speaker 1: And sure, you can find examples of things going badly.
• 57:23
  Speaker 1: You know, nothing's going to work perfectly. And You know,
• 57:27
  Speaker 1: a company is going to behave stupidly for periods. Yes.
• 57:32
  Speaker 1: Over the long run, doesn't survive. Cannot survive. In a
• 57:38
  Speaker 1: real market. And again, competition. And I get the network effects.
• 57:46
  Speaker 1: I get the network effects, slow down competition. I get
• 57:49
  Speaker 1: the network effects, creates barriers to entry. But there is
• 57:55
  Speaker 1: massive Amounts of capital available to anybody who thinks they
• 58:00
  Speaker 1: can knock off one of these leading companies, knock them off, right?
• 58:09
  Speaker 1: So to build a whole theory about this and then,
• 58:14
  Speaker 1: you know, to make it in a sense a kind
• 58:16
  Speaker 1: of an endgame, that is just wrong. And it's, again,
• 58:20
  Speaker 1: it's ignoring what actually happens. what actually happens. You know,
• 58:27
  Speaker 1: you can go back to Standard Oil. You can go
• 58:28
  Speaker 1: back to Alcoa. You can go back to every claim
• 58:32
  Speaker 1: of monopolistic behavior in history. Now, you know, did Microsoft
• 58:38
  Speaker 1: go through a period where, yeah, the updates to their
• 58:44
  Speaker 1: software wasn't quite as good as people wanted or expected?
• 58:49
  Speaker 4: Sure.
• 58:51
  Speaker 1: There are periods. And then they better correct and they
• 58:54
  Speaker 1: better correct pretty quickly. Did sponsor ads dominate, what do
• 59:04
  Speaker 1: you call it, Google?
• 59:06
  Speaker 3: Yeah.
• 59:06
  Speaker 1: Yeah. dominated Google. But, okay, it says sponsored ads. It's
• 59:21
  Speaker 1: easy for me to ignore them. I do it every day.
• 59:25
  Speaker 1: It's still there, sponsored ads. And now I use Google
• 59:27
  Speaker 1: less and less because they use AI more and more.
• 59:30
  Speaker 1: Even within Google, I use Gemini. Why would I use,
• 59:33
  Speaker 1: why would I click on these links? Gemini summarizes the
• 59:37
  Speaker 1: best information that I have. But if I want to research,
• 59:39
  Speaker 1: it's right there. But sponsored links are clearly marked as
• 59:43
  Speaker 1: sponsored links. So yeah, the experience is a little bit
• 59:46
  Speaker 1: less good. Okay. But that's not crap, crapification. That's Google
• 59:56
  Speaker 1: experimenting with different models. And some of the things that
• 59:59
  Speaker 1: it experiments with don't work. And there were real competitors.
• 1:00:07
  Speaker 1: And the competitors would get stronger if they figured out
• 1:00:12
  Speaker 1: to the extent to which people were willing... What's the price?
• 1:00:15
  Speaker 1: How bad does Google have to get in order for
• 1:00:17
  Speaker 1: people to switch out of Google?
• 1:00:24
  Speaker 3: So.
• 1:00:25
  Speaker 1: No, you know, I think that it's sadly the kind
• 1:00:29
  Speaker 1: of theory that is easily popularized, easily becomes, you know, again,
• 1:00:37
  Speaker 1: popularized by people like Dustin, who then extrapolate it and
• 1:00:42
  Speaker 1: make it into a whole theory that, and this is
• 1:00:45
  Speaker 1: how capitalism is run. Again, where is the decline in automobiles?
• 1:00:53
  Speaker 1: There's competition, yeah. So network effects reduce competition. Where's the
• 1:00:57
  Speaker 1: decline in Apple? No. You know, I'm sure there's always
• 1:01:01
  Speaker 1: something to complain about Apple. All right. Let's see. Let's
• 1:01:27
  Speaker 1: keep going.
• 1:01:28
  Speaker 3: A lot of times we don't have good options in stores.
• 1:01:32
  Speaker 3: It's because the minimum viable product that will extract profit
• 1:01:36
  Speaker 3: from me is produced and put in front of me.
• 1:01:38
  Speaker 3: And as long as I continue buying it, the cycle continues.
• 1:01:42
  Speaker 1: Then why do you continue buying it? I mean, that's
• 1:01:45
  Speaker 1: part of the question. Why do people continue buying crappy
• 1:01:47
  Speaker 1: products if they're really crappy? And But if that's really
• 1:01:54
  Speaker 1: the case, then there's an opportunity for somebody to come
• 1:01:56
  Speaker 1: in and make a new product, which is exactly what
• 1:01:58
  Speaker 1: Destin will do.
• 1:02:00
  Speaker 3: Let's say that this Scrooge McDuck of a CEO goes
• 1:02:04
  Speaker 3: a little too far and says, you know what? There's
• 1:02:06
  Speaker 3: even more profit to be had here. What if I
• 1:02:08
  Speaker 3: can make my manufacturing processes even cheaper? I don't even
• 1:02:14
  Speaker 3: know the glue or how they're melting that in. What
• 1:02:15
  Speaker 3: if we just don't do quality control or whatever? I
• 1:02:18
  Speaker 3: don't even know how it happened.
• 1:02:19
  Speaker 1: Boom.
• 1:02:20
  Speaker 4: Suddenly, you pop right through the profit crotch.
• 1:02:24
  Speaker 1: How does that happen?
• 1:02:24
  Speaker 4: And you poke out the other side. And congratulations, you
• 1:02:28
  Speaker 4: just made a grill scrubber.
• 1:02:30
  Speaker 3: That hurts people, and you have to withdraw millions of
• 1:02:34
  Speaker 3: scrubbers from product shelves.
• 1:02:37
  Speaker 1: Because they hurt people, and how do you make a
• 1:02:39
  Speaker 1: profit doing that? How can you make a profit when
• 1:02:41
  Speaker 1: you're withdrawing goods from the shelves? Right? Ian says, you
• 1:02:59
  Speaker 1: said part of the theory, how bad can they make
• 1:03:00
  Speaker 1: it before people will switch? That's not what I meant.
• 1:03:05
  Speaker 1: I didn't mean how bad Google could make it. Google
• 1:03:08
  Speaker 1: is experimenting. Google is not saying, hmm, let's screw these
• 1:03:11
  Speaker 1: people and make it as hard as possible for them
• 1:03:13
  Speaker 1: to find what they want. And let's see how bad
• 1:03:16
  Speaker 1: we can make it for them to switch. They're constantly
• 1:03:19
  Speaker 1: experimenting with trade-offs between how much space to put for
• 1:03:23
  Speaker 1: a sponsored ad, How much space to put for links?
• 1:03:26
  Speaker 1: The algorithm, by the way, behind it all is improving constantly.
• 1:03:31
  Speaker 1: So if you could skip the sponsored links, the links
• 1:03:37
  Speaker 1: below that become more meaningful and stronger. And by the way,
• 1:03:42
  Speaker 1: we're going to take that money, the profits that we're making,
• 1:03:44
  Speaker 1: and we're going to invest it in AI. We're going
• 1:03:46
  Speaker 1: to buy AI companies. Google was one of the first
• 1:03:49
  Speaker 1: to do that. And we're going to build an alternative.
• 1:03:55
  Speaker 1: So it's not that they're thinking, let's make this product
• 1:03:59
  Speaker 1: crappy because the switching costs are high. They're saying, let's experiment.
• 1:04:06
  Speaker 1: Let's try different things. We're trying to make more money.
• 1:04:11
  Speaker 1: Sponsored product, by the way, sponsored links are not necessarily
• 1:04:14
  Speaker 1: all bad. Often the sponsored link is exactly what you're
• 1:04:17
  Speaker 1: looking for. Maybe you're looking for, you know, the American
• 1:04:22
  Speaker 1: Airlines website and the first link that comes up as
• 1:04:25
  Speaker 1: a sponsored link is American Airlines website. So it's not
• 1:04:29
  Speaker 1: always that the sponsored links are bad. There are trade-offs
• 1:04:32
  Speaker 1: here that you might not like as an individual, but
• 1:04:36
  Speaker 1: it's not clear that it's making the product worse, particularly
• 1:04:40
  Speaker 1: if the algorithm in the background is actually getting better.
• 1:04:45
  Speaker 1: And I don't think, I don't know of any company
• 1:04:48
  Speaker 1: that thinks that They can't leave me, so let me
• 1:04:51
  Speaker 1: give them shitty products and let's test it and see
• 1:04:56
  Speaker 1: when they start leaving, then we'll improve the product. That
• 1:04:59
  Speaker 1: takes a lot of arrogance and really stupidity. I mean, again,
• 1:05:04
  Speaker 1: I'm not saying nobody does that. Some people do, but
• 1:05:06
  Speaker 1: it doesn't last very long because a company that thinks
• 1:05:09
  Speaker 1: that way is not going to survive very long. Not
• 1:05:14
  Speaker 1: going to survive very long.
• 1:05:18
  Speaker 3: Because you are hurting people. That is a real thing
• 1:05:21
  Speaker 3: that happens. And I want to show you kind of
• 1:05:23
  Speaker 3: how we started. Let me adjust the perambulator here. So
• 1:05:27
  Speaker 3: John and I, when we started doing this scrubber, we
• 1:05:30
  Speaker 3: kind of started here. We had a super high quality product.
• 1:05:34
  Speaker 3: It was really good. People really enjoy it. This is
• 1:05:37
  Speaker 3: where we're at. But we've made process optimization decisions that
• 1:05:42
  Speaker 3: is now changing the profit game. So we're looking at
• 1:05:45
  Speaker 3: this big picture question, right? Let's go talk to John
• 1:05:48
  Speaker 3: at JJ George, which is where we sell the smarter
• 1:05:50
  Speaker 3: scrubber from. Let's go see what John has to say
• 1:05:53
  Speaker 3: about the decisions in the near future.
• 1:05:55
  Speaker 4: Okay.
• 1:05:55
  Speaker 3: John obviously is the business part of all this.
• 1:05:57
  Speaker 4: He knows the business side. I just do the engineering stuff.
• 1:06:00
  Speaker 1: So we can make these.
• 1:06:02
  Speaker 4: Things cheaper now.
• 1:06:03
  Speaker 1: That's right. That's right.
• 1:06:04
  Speaker 4: That means more profit, right?
• 1:06:05
  Speaker 1: Yes. Yes.
• 1:06:06
  Speaker 2: And we didn't know that originally.
• 1:06:07
  Speaker 1: Okay. But it makes no profit. Does that mean that
• 1:06:11
  Speaker 1: people are worse off and does it mean quality is
• 1:06:13
  Speaker 1: going to decline? It turns out no.
• 1:06:16
  Speaker 5: Um, We kind of got forced into buying out the
• 1:06:20
  Speaker 5: injection molding company.
• 1:06:21
  Speaker 2: Well, we weren't forced, but our Chris, who had helped
• 1:06:23
  Speaker 2: us a ton, was retiring, and we wound up buying
• 1:06:26
  Speaker 2: his machines.
• 1:06:26
  Speaker 1: And luckily, he.
• 1:06:28
  Speaker 5: helped us use his knowledge but but in doing that
• 1:06:32
  Speaker 5: we really saved a lot of money that we didn't
• 1:06:34
  Speaker 5: know we could save um and then.
• 1:06:36
  Speaker 4: So there was that and then there was the laser machine.
• 1:06:38
  Speaker 5: And then destin has an idea to make this laser
• 1:06:40
  Speaker 5: machine which i had serious doubts.
• 1:06:43
  Speaker 4: About i loved it man i i was excited about.
• 1:06:46
  Speaker 5: The laser machine i don't know i don't know the
• 1:06:48
  Speaker 5: guys weren't sure about it and uh because we're doing
• 1:06:51
  Speaker 5: them uh on lasers and they were pretty fast we.
• 1:06:54
  Speaker 2: Just loaded we had a system And so we get
• 1:06:56
  Speaker 2: this machine. We didn't know if it was going to work.
• 1:06:59
  Speaker 2: And we get this thing in here, and we're doing
• 1:07:01
  Speaker 2: them three times as fast.
• 1:07:03
  Speaker 4: Yeah, that's awesome.
• 1:07:04
  Speaker 1: Oh, so you're improving profits.
• 1:07:06
  Speaker 2: No, no.
• 1:07:07
  Speaker 1: And not hurting quality. And not hurting the employees.
• 1:07:10
  Speaker 4: It's yacht time. You're going to buy a yacht for yourself?
• 1:07:12
  Speaker 1: Yes. Because we can increase productivity.
• 1:07:15
  Speaker 5: Well, it's between a yacht or we could just make
• 1:07:20
  Speaker 5: the scrubber cheaper and sell more of them in the
• 1:07:22
  Speaker 5: long run.
• 1:07:23
  Speaker 2: And I think that's also another path to the yacht.
• 1:07:29
  Speaker 1: That's true. So as they become more productive, they can
• 1:07:32
  Speaker 1: lower the price point. And now they will expand the market.
• 1:07:38
  Speaker 1: And again, profit is not about the price point. It's
• 1:07:41
  Speaker 1: about the price point times the number of people who
• 1:07:43
  Speaker 1: buy the product from you minus the cost to produce it. So,
• 1:07:49
  Speaker 1: you know, again, multiple dimensions. It's not a simple little
• 1:07:53
  Speaker 1: pyramid where you move stuff around.
• 1:07:56
  Speaker 2: Staying in business. But anyway, yes.
• 1:08:00
  Speaker 5: So when we look at the long term, of course,
• 1:08:04
  Speaker 5: if Destin's making videos, we're going to sell a lot
• 1:08:06
  Speaker 5: of products.
• 1:08:06
  Speaker 2: But that's not going to last forever.
• 1:08:08
  Speaker 3: I can't make Smarter Every Day the Chainmail Girl Scrubber channel.
• 1:08:12
  Speaker 4: I just don't want to do that.
• 1:08:13
  Speaker 3: Right.
• 1:08:13
  Speaker 2: It's not fair. And this is a product. It's a
• 1:08:17
  Speaker 2: good product. We're going to have it at a good price.
• 1:08:19
  Speaker 1: And.
• 1:08:20
  Speaker 2: We just need to run it like a normal business.
• 1:08:22
  Speaker 2: We need to pay for advertising.
• 1:08:24
  Speaker 4: Yeah, wow.
• 1:08:25
  Speaker 1: We've got an entrepreneur here.
• 1:08:27
  Speaker 2: Make a quality product at a good price. And I
• 1:08:30
  Speaker 2: think the rest will take care of itself.
• 1:08:31
  Speaker 3: I have noticed that most people come about figuring this
• 1:08:35
  Speaker 3: thing out because somebody tells them about it.
• 1:08:37
  Speaker 2: And we can tell, too. We can look at the analytics. And,
• 1:08:41
  Speaker 2: you know, a normal product is a 3% conversion rate.
• 1:08:43
  Speaker 1: It's pretty good.
• 1:08:44
  Speaker 2: And the scrubber has run at about 8% over time.
• 1:08:49
  Speaker 1: So that means.
• 1:08:49
  Speaker 2: 8% of the.
• 1:08:50
  Speaker 5: People coming to the website are buying a scrubber, which
• 1:08:53
  Speaker 5: is insanely high. But that also means that.
• 1:08:56
  Speaker 1: People are looking for the scrubber.
• 1:08:57
  Speaker 5: So somebody told them about it, and they are coming
• 1:08:59
  Speaker 5: to look for it when they buy it.
• 1:09:01
  Speaker 3: Okay, so my model isn't perfect because John explained that
• 1:09:06
  Speaker 3: our profits were going up even though we didn't sacrifice money.
• 1:09:09
  Speaker 1: That's right.
• 1:09:09
  Speaker 4: The quality or our community.
• 1:09:11
  Speaker 1: That's right. She's coming around to that.
• 1:09:25
  Speaker 3: And I think it's fascinating to live this. You learn
• 1:09:28
  Speaker 3: something in school and then you live it. It's very different.
• 1:09:31
  Speaker 3: This is the supply and demand curve. And so the.
• 1:09:34
  Speaker 4: Supply is here. OK, so as the price.
• 1:09:37
  Speaker 3: Goes up, more people want to produce the thing. Right.
• 1:09:41
  Speaker 3: This is the demand curve. As the price goes down,
• 1:09:44
  Speaker 3: more people want to buy the thing. The situation we
• 1:09:46
  Speaker 3: find ourselves in is crazy. Because these companies literally said,
• 1:09:50
  Speaker 3: we're going to decrease the supply of grill scrubbers on
• 1:09:54
  Speaker 3: the market because we're going to recall them.
• 1:09:57
  Speaker 4: And when we do that.
• 1:09:58
  Speaker 1: Wait. They didn't recall them in order to decrease the supply.
• 1:10:04
  Speaker 1: That's just bizarre. They recalled them because they were harmful products.
• 1:10:11
  Speaker 1: And they were being sued. And they had no choice
• 1:10:13
  Speaker 1: but to recall them. So it wasn't them trying to
• 1:10:16
  Speaker 1: manipulate supply. It was them failing because that's what happens
• 1:10:20
  Speaker 1: when you don't pay attention to quality. You've got to
• 1:10:24
  Speaker 1: pay attention to quality.
• 1:10:26
  Speaker 3: The price goes up. So like the natural price in
• 1:10:30
  Speaker 3: the market for grill scrubbers went up.
• 1:10:32
  Speaker 4: But not only that, now.
• 1:10:34
  Speaker 3: More people need grill scrubbers. And so that pushes the
• 1:10:38
  Speaker 3: demand this way. So the price is just going up.
• 1:10:42
  Speaker 3: So it was here and like now it's here.
• 1:10:45
  Speaker 1: So what happens when that happens? Supply is shrinking. Demand
• 1:10:49
  Speaker 1: is high. Prices have gone up. This is like housing, right?
• 1:10:53
  Speaker 1: What happens? Well, it's a great signal. to an entrepreneur,
• 1:10:59
  Speaker 1: oh my God, there's an incredible profit opportunity here. I
• 1:11:03
  Speaker 1: can sell my stuff for less than what these other
• 1:11:06
  Speaker 1: people are, get some of that demand my way, and
• 1:11:10
  Speaker 1: make money. This is how markets work. Now, the thing is,
• 1:11:15
  Speaker 1: if you expect markets to work instantaneously, or if you
• 1:11:22
  Speaker 1: think markets work because of an invisible hand, Here's my
• 1:11:26
  Speaker 1: critique of some free market economics. If you believe that
• 1:11:29
  Speaker 1: markets work spontaneously, then you've got a problem. Then you've
• 1:11:36
  Speaker 1: got a problem. Markets don't work spontaneously, and there is
• 1:11:41
  Speaker 1: no invisible hand. Markets work over time because of entrepreneurs
• 1:11:51
  Speaker 1: who are constantly looking, and they discover things. They discover opportunities.
• 1:11:58
  Speaker 1: And when they execute on those opportunities, coming in and
• 1:12:03
  Speaker 1: introducing a new product into the market, that is what
• 1:12:10
  Speaker 1: a working market means. But it doesn't just happen. It
• 1:12:14
  Speaker 1: happens because somebody exerts effort. Somebody exerts effort to make
• 1:12:20
  Speaker 1: it happen. And in a sense, I mean, this is
• 1:12:26
  Speaker 1: the funny thing about this video. Destin is complaining about capitalism,
• 1:12:30
  Speaker 1: and yet he's in a sense a living embodiment of
• 1:12:33
  Speaker 1: what capitalism requires, the entrepreneurial spirit. He has it, and
• 1:12:37
  Speaker 1: he's doing it.
• 1:12:37
  Speaker 4: That is crazy. But what John is saying is opposite
• 1:12:42
  Speaker 4: to that.
• 1:12:42
  Speaker 3: So if the market can now bear with a bigger price,
• 1:12:45
  Speaker 3: and if you haven't priced grill scrubbers in a while,
• 1:12:47
  Speaker 3: do so.
• 1:12:48
  Speaker 4: It's going up.
• 1:12:49
  Speaker 3: John's saying this. He's making a different bet. He's got
• 1:12:52
  Speaker 3: a different curve in mind. This is the profit optimization curve,
• 1:12:57
  Speaker 3: something I didn't know about. But what he's saying is
• 1:13:01
  Speaker 3: he's saying, okay, well, the way this works is there
• 1:13:04
  Speaker 3: is a price that we were operating at.
• 1:13:06
  Speaker 4: So we were at a high price here. We were
• 1:13:08
  Speaker 4: making profit here, right?
• 1:13:10
  Speaker 1: Volume is low.
• 1:13:12
  Speaker 3: You could sell more scrubbers at a lower price, and
• 1:13:16
  Speaker 3: ultimately that will mean a.
• 1:13:18
  Speaker 4: Higher profit overall.
• 1:13:21
  Speaker 1: He's discovering economics slowly.
• 1:13:22
  Speaker 3: You sell more quantity at a lower price, and that
• 1:13:26
  Speaker 3: means the area under the curve goes up. This is
• 1:13:29
  Speaker 3: profit optimization. This is doing it right. The fact that
• 1:13:33
  Speaker 3: I asked the question, can you make a product in
• 1:13:38
  Speaker 3: America and be competitive in the market today?
• 1:13:40
  Speaker 4: That is insane.
• 1:13:42
  Speaker 3: Why was I even to the point where I could
• 1:13:45
  Speaker 3: ask that question?
• 1:13:46
  Speaker 1: Why is that insane? Why is that insane? I mean,
• 1:13:51
  Speaker 1: why do you need to make it in America? I mean, indeed,
• 1:13:55
  Speaker 1: the fact that he had to make it in America,
• 1:13:57
  Speaker 1: as we'll see in a minute, was very damaging and
• 1:14:02
  Speaker 1: hurts his customers.
• 1:14:04
  Speaker 3: But I think looking at this now, understanding the types
• 1:14:08
  Speaker 3: of decisions that John's making now, The answer is unequivocally yes.
• 1:14:13
  Speaker 3: Like not only is it a thing that's possible, it's
• 1:14:16
  Speaker 3: a thing more people should be doing.
• 1:14:19
  Speaker 4: And the reason we got into.
• 1:14:20
  Speaker 3: This in the first place is if we go back
• 1:14:22
  Speaker 3: to this thing and we start to look at it
• 1:14:24
  Speaker 3: and think about it, the natural progression of just extracting
• 1:14:30
  Speaker 3: as much as you can without regard to quality or
• 1:14:33
  Speaker 3: your community.
• 1:14:33
  Speaker 1: Doesn't exist.
• 1:14:34
  Speaker 4: The natural progression is.
• 1:14:35
  Speaker 3: Is to send the means of production somewhere else and
• 1:14:40
  Speaker 3: basically gut your local community and their ability to produce things.
• 1:14:46
  Speaker 1: But why is that a bad thing? Now, I get
• 1:14:50
  Speaker 1: that gutting your local community sounds really, really bad. But
• 1:14:53
  Speaker 1: the reality is that, again, there are more jobs in
• 1:14:56
  Speaker 1: America than ever before. Wages are higher in America than
• 1:14:59
  Speaker 1: they've ever been before. The mix of jobs has changed.
• 1:15:03
  Speaker 1: People do different jobs. And yes, there have been a
• 1:15:08
  Speaker 1: few communities that have been gutted. There's always in American
• 1:15:12
  Speaker 1: history been ghost towns. Industries died. And, you know, you
• 1:15:18
  Speaker 1: have to go, you have to leave. And the town
• 1:15:22
  Speaker 1: becomes a ghost town. All right? Why is that necessarily
• 1:15:27
  Speaker 1: an evil or bad thing? So why is going overseas crazy?
• 1:15:37
  Speaker 1: If you can produce something better and cheaper overseas, why
• 1:15:43
  Speaker 1: isn't that the rational thing to do? You get a
• 1:15:47
  Speaker 1: higher quality, better price, and your customers, put aside the community,
• 1:15:53
  Speaker 1: your customers are happier. The problem here is you keep
• 1:15:58
  Speaker 1: switching that blue little thing. It's sometimes workers, sometimes it's
• 1:16:01
  Speaker 1: the community, and sometimes it's your customers. But if you're
• 1:16:05
  Speaker 1: just focused on your customers... Moving overseas could make a
• 1:16:09
  Speaker 1: huge amount of sense. But there's something visceral emotionally about, oh,
• 1:16:16
  Speaker 1: taking jobs overseas. Gutting the local community. But, you know,
• 1:16:26
  Speaker 1: community after community after community in the United States has
• 1:16:28
  Speaker 1: somehow survived. And many of them thrived as manufacturing was
• 1:16:35
  Speaker 1: replaced by Many, frankly, jobs were replaced by robots, by computers,
• 1:16:41
  Speaker 1: and some replaced by going overseas. I mean, North Carolina
• 1:16:46
  Speaker 1: is a state where people are doing pretty well. And
• 1:16:50
  Speaker 1: yet they used to make two products that they no
• 1:16:54
  Speaker 1: longer make. And on scale, furniture, oh, three products I'm
• 1:16:59
  Speaker 1: thinking of now, furniture, clothes, and tobacco. And today, they
• 1:17:08
  Speaker 1: make furniture and clothes and tobacco elsewhere. And yet, North
• 1:17:12
  Speaker 1: Carolina has a research triangle. Charlotte is booming. It's got
• 1:17:17
  Speaker 1: a good economy. And it's got a good economy because
• 1:17:20
  Speaker 1: people changed. They changed jobs. How many communities were really gutted?
• 1:17:26
  Speaker 1: I mean, I'm sure there were a few. So we
• 1:17:31
  Speaker 1: should all stagnate. We should all stop We should all
• 1:17:38
  Speaker 1: not innovate. We should all not progress. We should all
• 1:17:40
  Speaker 1: not seek the best at the best price so that
• 1:17:43
  Speaker 1: a few communities don't un-gutted. That's the real ethics. You
• 1:17:50
  Speaker 1: want to sacrifice us on the altar of not getting
• 1:17:56
  Speaker 1: a few communities.
• 1:18:01
  Speaker 3: And so I think what I've learned through this whole
• 1:18:04
  Speaker 3: thing is I wanted to know if I could make
• 1:18:06
  Speaker 3: something in America because I'm an engineer and I thought
• 1:18:09
  Speaker 3: this was a technical problem. It's not a technical problem.
• 1:18:13
  Speaker 3: This is an ethical problem. If greed takes over and
• 1:18:17
  Speaker 3: you have people at the top that I want to
• 1:18:20
  Speaker 3: use strong language, they're not good people. Ultimately, that trickles
• 1:18:25
  Speaker 3: down in a way that trickle down economics that I
• 1:18:29
  Speaker 3: was promised when I was in school doesn't.
• 1:18:32
  Speaker 1: So it's an ethical problem. It's an ethical problem. We
• 1:18:35
  Speaker 1: should all be sacrificed on the altar of making stuff
• 1:18:38
  Speaker 1: in America. We should all be sacrificed on the altar of,
• 1:18:41
  Speaker 1: I don't know, the few communities you might know that
• 1:18:44
  Speaker 1: were supposedly gutted. We should all be sacrificed to his
• 1:18:47
  Speaker 1: vision of a middle class. in the 1970s or 80s,
• 1:18:51
  Speaker 1: whenever he was growing up. It is an ethical problem,
• 1:18:58
  Speaker 1: but it's ethics are backwards. He's smuggling in the idea
• 1:19:03
  Speaker 1: that ethics is about community, societal good. He's just accepting altruism.
• 1:19:15
  Speaker 1: All altruism, you know, everybody does. Business exists to serve
• 1:19:19
  Speaker 1: some collective. It's not even customers. It's an amorphous collective called,
• 1:19:24
  Speaker 1: I don't know, blue man on a blue thing. I
• 1:19:29
  Speaker 1: don't know what the collective is. I mean, his business
• 1:19:38
  Speaker 1: partner basically showed him this doesn't work. He's not budging
• 1:19:43
  Speaker 1: from it. He's not budging from it. So his morality
• 1:19:53
  Speaker 1: is a morality of altruism, and therefore it's a morality
• 1:19:55
  Speaker 1: of sacrificing the producer, the wealth maximizer, the profit maximizer
• 1:20:02
  Speaker 1: for the sake of the stagnation, for the sake of
• 1:20:06
  Speaker 1: the person who wants to stagnate, who does not want progress.
• 1:20:12
  Speaker 1: I mean, think about the iPhone. Think about the iPhone.
• 1:20:17
  Speaker 1: What would this cost to make if everything in the
• 1:20:20
  Speaker 1: iPhone was produced, mined, delivered in the United States? I
• 1:20:26
  Speaker 1: don't know that you could make it. But if you could,
• 1:20:29
  Speaker 1: so that's a scrubber, okay? He found somehow, and even then,
• 1:20:33
  Speaker 1: he couldn't make it all in the United States. Some
• 1:20:35
  Speaker 1: stuff came from Costa Rica. But imagine building an iPhone
• 1:20:39
  Speaker 1: if your restraint was everything has to be in the
• 1:20:43
  Speaker 1: United States. It would cost tens of thousands of dollars.
• 1:20:49
  Speaker 1: A phone. It would be undoable. I mean, there's products
• 1:20:55
  Speaker 1: here from over 50 countries. There's massive amounts of specialization,
• 1:21:00
  Speaker 1: division of labor. We've talked about this many, many times
• 1:21:03
  Speaker 1: on the show. The amount of specialization, division of labor
• 1:21:06
  Speaker 1: that is available when you think in terms of 8
• 1:21:09
  Speaker 1: billion people is so much greater, so much greater than
• 1:21:18
  Speaker 1: when you're thinking in terms of 350 million who are
• 1:21:22
  Speaker 1: already busy doing their thing. It's pretty stunning that, again,
• 1:21:36
  Speaker 1: you can think so narrowly.
• 1:21:39
  Speaker 3: You trickle the encrapification down to all of society, and
• 1:21:43
  Speaker 3: it's horrible. So what really needs to change is this
• 1:21:47
  Speaker 3: short-term thinking.
• 1:21:48
  Speaker 1: That I agree with. Short-term thinking generally in every aspect
• 1:21:51
  Speaker 1: of life. That needs to be trashed. Everything should be
• 1:21:55
  Speaker 1: long-term thinking. Short-term thinking... Not worthwhile to do, unless you're
• 1:22:01
  Speaker 1: in your deathbed and that's all you got.
• 1:22:03
  Speaker 3: Where I just gut my local community in the name
• 1:22:06
  Speaker 3: of profit.
• 1:22:07
  Speaker 4: We need to change that.
• 1:22:08
  Speaker 3: And start thinking about long term. What does it look
• 1:22:11
  Speaker 3: like to have an injection molder in my community?
• 1:22:14
  Speaker 1: Why do I need an injection molder in my community
• 1:22:17
  Speaker 1: when there's an injection molder in Mexico that produces a
• 1:22:21
  Speaker 1: product that's just as good, just as good, far cheaper?
• 1:22:28
  Speaker 1: And can ship it to me next day. Why does
• 1:22:32
  Speaker 1: it have to be in my community? Do I need
• 1:22:35
  Speaker 1: to grow all my food in my community? Do I
• 1:22:39
  Speaker 1: need a, does the iPhone, do we have different iPhones
• 1:22:44
  Speaker 1: being built in different communities?
• 1:22:51
  Speaker 3: What does it look like to just have a good
• 1:22:55
  Speaker 3: product on the shelf where I live?
• 1:22:58
  Speaker 4: That's the kind of thing we need to.
• 1:23:00
  Speaker 1: But there are lots of good products that are produced elsewhere.
• 1:23:02
  Speaker 1: I mean, fantastic Japanese products, amazing Korean products. I mean,
• 1:23:07
  Speaker 1: just world-class German products. I was going to say French,
• 1:23:12
  Speaker 1: but maybe not. Used to be. Used to be good
• 1:23:15
  Speaker 1: products from France.
• 1:23:20
  Speaker 3: Think about that long-term thinking looks like it's foolish in
• 1:23:25
  Speaker 3: the short term, but it's not.
• 1:23:27
  Speaker 1: No, short-term thinking is foolish always, but what he's describing
• 1:23:33
  Speaker 1: is not long-term thinking. It's biased thinking. It's ignorant thinking.
• 1:23:40
  Speaker 1: It's thinking detached from the realities of economics, from the
• 1:23:43
  Speaker 1: realities of the world, from the realities of basic economics,
• 1:23:48
  Speaker 1: basic idea of specialization, And division of labor. And, of course,
• 1:23:55
  Speaker 1: he can do it because he's talking about a scrubber.
• 1:23:57
  Speaker 1: But take something a little bit more complex than a
• 1:23:59
  Speaker 1: scrubber and it all falls to pieces.
• 1:24:02
  Speaker 3: John is thinking about how to make more money, and
• 1:24:04
  Speaker 3: he's doing it with classical profit.
• 1:24:07
  Speaker 4: Optimization economics now.
• 1:24:09
  Speaker 3: And all we had to do was stop thinking in
• 1:24:12
  Speaker 3: the short term.
• 1:24:13
  Speaker 4: Okay, so I feel things about this. You're contradicting about things.
• 1:24:16
  Speaker 4: I will say this.
• 1:24:17
  Speaker 1: So he feels things about this. He does. It's about
• 1:24:21
  Speaker 1: his feeling. It really is. And he's being short-term in
• 1:24:27
  Speaker 1: that he's focused on his feelings rather than on the science,
• 1:24:30
  Speaker 1: on the real science of economics, which he knows nothing
• 1:24:33
  Speaker 1: about and yet is pontificating as if he does, as
• 1:24:41
  Speaker 1: if he does. And that's really, really, really dangerous. All right.
• 1:24:52
  Speaker 1: I wanted– let me see. I wanted to cover one
• 1:24:56
  Speaker 1: other aspect. I don't know. I don't know what to do.
• 1:25:00
  Speaker 1: Anybody out there want to do some stickers and just
• 1:25:02
  Speaker 1: to get these numbers up a little bit? At least
• 1:25:05
  Speaker 1: let's cover the first hour. If we're not going to
• 1:25:07
  Speaker 1: cover the second hour, there's still some more to cover here,
• 1:25:11
  Speaker 1: and then there's some questions from you guys. So stickers, guys.
• 1:25:18
  Speaker 1: Show some love. Let me see. Not that we've got this.
• 1:25:25
  Speaker 1: And then let me just, I'm just going over the
• 1:25:28
  Speaker 1: stuff that I have.
• 1:25:29
  Speaker 5: Yeah.
• 1:25:31
  Speaker 1: Let me, let me just, let me just, let me
• 1:25:33
  Speaker 1: just do this. Right. And then, and then we'll, this
• 1:25:36
  Speaker 1: is earlier when he's talking about building.
• 1:25:39
  Speaker 3: What is the difference in these two things and why
• 1:25:41
  Speaker 3: am I sleeping well at night knowing I'm doing this,
• 1:25:44
  Speaker 3: but I didn't sleep well at night knowing that I
• 1:25:45
  Speaker 3: was doing this. And the answer is, I know the
• 1:25:49
  Speaker 3: people that are doing this.
• 1:25:50
  Speaker 4: We've talked.
• 1:25:51
  Speaker 3: I know the conditions under which they're working.
• 1:25:54
  Speaker 4: I know they're not being exploited. In fact, I know
• 1:25:57
  Speaker 4: this is.
• 1:25:57
  Speaker 3: Providing for their families and they are not being taken
• 1:26:00
  Speaker 3: advantage of. I don't know that that's true here. I
• 1:26:03
  Speaker 3: know that, yes, whoever put that insert into that injection
• 1:26:07
  Speaker 3: molding machine, their families are being provided for. but I
• 1:26:10
  Speaker 3: don't know they're not being exploited. With every other component
• 1:26:13
  Speaker 3: of the scrubber, we know the person we got them from,
• 1:26:16
  Speaker 3: but we don't know that with the knobs. Do we
• 1:26:19
  Speaker 3: even know the knobs were made in Costa Rica? For
• 1:26:22
  Speaker 3: all we know, they were made in China and put
• 1:26:24
  Speaker 3: in a box and labeled made in Costa Rica to
• 1:26:26
  Speaker 3: get around some kind of tariff thing.
• 1:26:29
  Speaker 1: So why is he presuming that a worker in Costa Rica,
• 1:26:33
  Speaker 1: well for that matter in China, but in Costa Rica,
• 1:26:35
  Speaker 1: why is he assuming that that person is being exploited?
• 1:26:39
  Speaker 1: Why is he assuming that that person doesn't know how
• 1:26:42
  Speaker 1: to take care of himself and can't bargain for himself?
• 1:26:46
  Speaker 1: Why is he okay with the Canadians who actually made the,
• 1:26:52
  Speaker 1: what do you call it, the metal thing? That's okay.
• 1:26:57
  Speaker 1: Because he's talked to them on Zoom? I mean, that's
• 1:27:03
  Speaker 1: not ethics. It's not knowledge. It's a familiarity bias. I
• 1:27:09
  Speaker 1: know the guy. I met the guy. I saw the guy.
• 1:27:11
  Speaker 1: I looked him in the eye. The Costa Rican is
• 1:27:17
  Speaker 1: taking the job because it's the best option he has
• 1:27:19
  Speaker 1: for a job. Same as the Canadian. Same as the American.
• 1:27:25
  Speaker 1: Is he being paid less than the American and Canadian?
• 1:27:27
  Speaker 1: Probably because he lives in Costa Rica. And he has
• 1:27:31
  Speaker 1: few alternatives. But you want to take the alternative from him?
• 1:27:37
  Speaker 1: There's no superior moral status to Canadian and American workers
• 1:27:42
  Speaker 1: over the moral status of productive people elsewhere around the world. So,
• 1:27:53
  Speaker 1: you know, this is just, again, kind of nativism. Maybe
• 1:28:01
  Speaker 1: the people who saw him on Zoom looked like him.
• 1:28:04
  Speaker 1: I mean, I don't want to attribute other motives to him,
• 1:28:06
  Speaker 1: but There's something very corrupting about this, right? All right,
• 1:28:20
  Speaker 1: what did I want to say here? Okay, so we'll
• 1:28:24
  Speaker 1: end on two issues, and then we'll call it a day.
• 1:28:32
  Speaker 1: Here's the thing. I mean, he talks, Dustin talks about quality.
• 1:28:41
  Speaker 1: as if it's something a market either delivers or fails
• 1:28:43
  Speaker 1: to deliver on its own. It's the system. Pushes products
• 1:28:48
  Speaker 1: towards crap unless ethics is applied from outside. But markets
• 1:28:56
  Speaker 1: don't work like that. They're not spontaneous. Quality doesn't just
• 1:29:01
  Speaker 1: improve automatically. Somebody has to notice that the product on
• 1:29:05
  Speaker 1: the shelf is bad and then figure out how to
• 1:29:08
  Speaker 1: make it better or make a better product and then
• 1:29:11
  Speaker 1: build it, find suppliers, finance the tooling, do all the
• 1:29:14
  Speaker 1: stuff that Destin did. And as we said, that someone
• 1:29:19
  Speaker 1: is the entrepreneur. You know, Israel Kutzner built this whole
• 1:29:26
  Speaker 1: theory of competition on this. Israel Kirchner, probably the greatest
• 1:29:31
  Speaker 1: living Austrian economist. I think he's still alive. He's well
• 1:29:34
  Speaker 1: into his 90s. Should have gotten a Nobel Prize for economics,
• 1:29:38
  Speaker 1: but probably will not. According to Kirchner, the entrepreneur is
• 1:29:43
  Speaker 1: the person alert to, quote, hitherto unnoticed profit opportunities. That's
• 1:29:49
  Speaker 1: what entrepreneurship is. The alertness to hitherto unnoticed profit opportunities
• 1:29:54
  Speaker 1: and then acting on them. That's what makes you an entrepreneur.
• 1:29:58
  Speaker 1: discovering them and acting on them. Competition is not a
• 1:30:03
  Speaker 1: state of affairs with just end firms in it and
• 1:30:11
  Speaker 1: competition just happens. It's the activity people engage in, spotting
• 1:30:18
  Speaker 1: what others overlooked and missed. It's a discovery process and
• 1:30:27
  Speaker 1: under freedom, under capitalism, the mind is unleashed, and that
• 1:30:31
  Speaker 1: means entrepreneurs are unleashed. Every improvement in quality, every drop
• 1:30:36
  Speaker 1: in cost, every rise in wages traces back to someone
• 1:30:41
  Speaker 1: who found a better way and was free to try
• 1:30:44
  Speaker 1: it out. The incumbent brush, you know, the incumbent brush
• 1:30:53
  Speaker 1: makers got lazy? Yeah, okay. Google got lazy?
• 1:30:56
  Speaker 4: Okay, fine.
• 1:30:58
  Speaker 1: That's the opportunity. Dustin, Destin, not Dustin, Destin took it.
• 1:31:06
  Speaker 1: It's exactly that competitive pressure that moves markets towards better products,
• 1:31:12
  Speaker 1: better pay, and ultimately more profits. He isn't a victim
• 1:31:16
  Speaker 1: of some system. He is part of the engine that
• 1:31:21
  Speaker 1: makes the system work. I mean, in many respects... The
• 1:31:26
  Speaker 1: 55 minutes, well, at least the early part where he
• 1:31:28
  Speaker 1: describes doing this, is the evidence of the system working.
• 1:31:38
  Speaker 1: I mean, what entrepreneurs do, they figure out, they discover
• 1:31:40
  Speaker 1: an opportunity, an opportunity to make money. They're constantly looking
• 1:31:45
  Speaker 1: and alert for profit opportunities in the marketplace, discovering new opportunities,
• 1:31:49
  Speaker 1: acting on them. And what they need is freedom. That's capitalism.
• 1:32:00
  Speaker 1: You don't get this improvement in quality without capitalism. So
• 1:32:03
  Speaker 1: don't slam capitalism for this. So that's one point I
• 1:32:09
  Speaker 1: want to make. The other point I want to make
• 1:32:10
  Speaker 1: is this idea of making a product 100% American. And
• 1:32:13
  Speaker 1: we talked about specialization in that. But let's talk about
• 1:32:18
  Speaker 1: caring about your customer. Destin states that he cares about
• 1:32:24
  Speaker 1: the customer. And he doesn't want them to swallow a
• 1:32:29
  Speaker 1: wire bristle. He cares about people. But then what happens
• 1:32:34
  Speaker 1: when he tries to make an America-only product? What does
• 1:32:39
  Speaker 1: that do to his customers? Well, in this case, and
• 1:32:44
  Speaker 1: we didn't see him talking about this, but in this case,
• 1:32:47
  Speaker 1: it delayed the launch of his own alternative product by years.
• 1:32:50
  Speaker 1: By years. By years. It left paying customers on back order.
• 1:32:58
  Speaker 1: It kept finished, safe, chain mail in a box while
• 1:33:03
  Speaker 1: they waited. It made the product significantly more expensive than
• 1:33:07
  Speaker 1: it had to be. Wait. He could have sourced these
• 1:33:17
  Speaker 1: materials from different places around the world. He could have
• 1:33:22
  Speaker 1: found amazing quality. chain mail and, you know, plastic molds
• 1:33:28
  Speaker 1: and whatever he needed, whether it came from Costa Rica,
• 1:33:31
  Speaker 1: Canada or China or India. And his standard should have
• 1:33:37
  Speaker 1: been quality. This has to be high quality and safe.
• 1:33:41
  Speaker 1: And he should have dismissed any product that wasn't, no
• 1:33:43
  Speaker 1: matter where it came from. But imagine if he just
• 1:33:46
  Speaker 1: built this from the best quality stuff that's available in
• 1:33:52
  Speaker 1: the world. I mean, in the end, he had to
• 1:33:58
  Speaker 1: get the chain mail from Canada because he couldn't find
• 1:34:00
  Speaker 1: it in the U.S. So he built something with foreign stuff.
• 1:34:12
  Speaker 1: Turns out importing stuff is okay. So the idea of
• 1:34:17
  Speaker 1: Made in America was to appease his sense of distorted morality.
• 1:34:25
  Speaker 1: It had nothing to do with servicing his customers. Indeed,
• 1:34:28
  Speaker 1: quite the contrary. He made his customers wait and he
• 1:34:36
  Speaker 1: made them pay through the nose. So he has a
• 1:34:42
  Speaker 1: preference for making goods, fine. But don't then tell me
• 1:34:47
  Speaker 1: what you really care about is the customer. He chose
• 1:34:54
  Speaker 1: to sacrifice his customers, to sacrifice their time and their
• 1:34:59
  Speaker 1: money to appease his desire to make it all 100%
• 1:35:07
  Speaker 1: in America. And capitalism let him do it. He was
• 1:35:12
  Speaker 1: free to do it. But again, there's no logic in
• 1:35:17
  Speaker 1: buying America in the U.S. It's certainly not a logic
• 1:35:22
  Speaker 1: that justifies producing a product late or that takes years
• 1:35:34
  Speaker 1: and costs a lot of money. I mean, the only
• 1:35:36
  Speaker 1: reason he can afford to do all that was because
• 1:35:38
  Speaker 1: he's got this very profitable business, which is making videos.
• 1:35:47
  Speaker 1: So what's this video ultimately about? It's about capitalism. It's
• 1:35:53
  Speaker 1: not about the failure of capitalism. It's about what production demands.
• 1:36:00
  Speaker 1: Knowledge takes a long time to earn. Earn. Machines, somebody
• 1:36:07
  Speaker 1: has to pay for. Judgment has to be made on uncertainty. Suppliers,
• 1:36:12
  Speaker 1: you have to find suppliers you can trust, wherever they
• 1:36:14
  Speaker 1: happen to be. You have to trust the labor's honest.
• 1:36:22
  Speaker 1: You have to pay attention to safety. You have to
• 1:36:24
  Speaker 1: be willing to spend money today for a return that
• 1:36:26
  Speaker 1: might come in three years. You have to think long term, rationally.
• 1:36:30
  Speaker 1: He exemplifies all of that. Now, can, in a particular company,
• 1:36:35
  Speaker 1: an executive, betray all that? Yeah, sure. For a while.
• 1:36:40
  Speaker 1: You can fake prosperity for a few quarters. Ask the
• 1:36:44
  Speaker 1: people at Enron and WorldCom how that works out in
• 1:36:46
  Speaker 1: the end. Or ask the people in a bunch of
• 1:36:51
  Speaker 1: different bankrupt companies. what happens when you burn the brand,
• 1:36:57
  Speaker 1: cheapen the product, drive off skilled people, or hang a
• 1:37:02
  Speaker 1: whole company on products or parts from a fragile, irresponsible supplier.
• 1:37:13
  Speaker 1: Capitalism won't make you rational, but capitalism will make you
• 1:37:19
  Speaker 1: responsible for the consequences of your irrationality. It's government that
• 1:37:25
  Speaker 1: shields many of us, many businesses, many consumers from the
• 1:37:32
  Speaker 1: consequences of bad actions and the consequences of short-term thinking.
• 1:37:38
  Speaker 1: What did Destin do when he found a bad product
• 1:37:40
  Speaker 1: in a broken supply chain? He didn't call his, you know,
• 1:37:46
  Speaker 1: government representative. Good for him that he didn't call for
• 1:37:52
  Speaker 1: a tariff, at least not in the video. He designed
• 1:37:55
  Speaker 1: a better product. He bought machinery. He found a way
• 1:38:00
  Speaker 1: to preserve a retired expert's knowledge. He automated a process.
• 1:38:05
  Speaker 1: He found new suppliers. He persuaded customers to pay for quality.
• 1:38:08
  Speaker 1: And he made a profit. And he's about to make
• 1:38:11
  Speaker 1: more profit by lowering the price. That's not ethics restraining capitalism.
• 1:38:19
  Speaker 1: That's capitalism made possible by ethics. And here... I mean
• 1:38:24
  Speaker 1: by ethics, reason, independence, integrity, productiveness, justice. and pride in
• 1:38:32
  Speaker 1: what you build, which are the virtues that are not
• 1:38:36
  Speaker 1: a brake on profits. They are the engine of profits. So,
• 1:38:49
  Speaker 1: you know, Capitalism is the solution to the kind of
• 1:38:53
  Speaker 1: problem Destin discovered. What we need is more entrepreneurs like him.
• 1:39:01
  Speaker 1: More people to figure out solutions. And maybe pay less
• 1:39:04
  Speaker 1: attention to whether it was made in America or not.
• 1:39:06
  Speaker 1: Just figure out solutions. All right. So that is my
• 1:39:16
  Speaker 1: critique of this critic of capitalism.
• 1:39:19
  Speaker 3: Whoops.
• 1:39:20
  Speaker 1: To do that um we'll keep doing these shows uh
• 1:39:25
  Speaker 1: we'll keep doing these shows maybe later is what i
• 1:39:28
  Speaker 1: want to press there uh and um i've got a
• 1:39:33
  Speaker 1: i've got the next critic of capitalism lined up uh
• 1:39:36
  Speaker 1: for a show i'm just not sure when it'll happen
• 1:39:39
  Speaker 1: but it will happen uh she's the woman who wrote
• 1:39:41
  Speaker 1: the book about how about the entrepreneurial state and how
• 1:39:45
  Speaker 1: uh the state is responsible for the iphone It's government
• 1:39:49
  Speaker 1: that's responsible for the iPhone, not Apple. So we're going
• 1:39:52
  Speaker 1: to take her on. And I forget her name right now.
• 1:39:56
  Speaker 1: It starts with an M, long name. But we will
• 1:40:01
  Speaker 1: take that on. So, you know, and look, the reason
• 1:40:11
  Speaker 1: I engage with this is because 2.7 million views, 14 million,
• 1:40:17
  Speaker 1: something like that, Subscribers. That's what you have to do.
• 1:40:27
  Speaker 1: That's what you have to do. All right. Let's see.
• 1:40:37
  Speaker 1: We have super chats. You guys picked it up a
• 1:40:40
  Speaker 1: little bit. We're still short, but you picked it up
• 1:40:43
  Speaker 1: a little bit. We got a bunch of stickers. So
• 1:40:46
  Speaker 1: thank you for the sticker people. Let me go through
• 1:40:51
  Speaker 1: them and thank them. Noel, thank you. $ 50 Canadian dollars.
• 1:40:55
  Speaker 1: Really appreciate that. Frederick, thank you for the sticker. John,
• 1:41:01
  Speaker 1: thank you. Let's see. Esiv, thank you. Stickers, stickers, stickers, stickers.
• 1:41:09
  Speaker 1: There we go. Barry, Barry, $ 50. Thank you, Barry. Very generous.
• 1:41:13
  Speaker 1: I appreciate it. That's U.S. dollars. We had an Alon
• 1:41:18
  Speaker 1: up there. And I think that was it. Alan, not Alon. Alan.
• 1:41:25
  Speaker 1: Thank you, guys. Really, really appreciate it. And thanks for
• 1:41:27
  Speaker 1: the support. Thanks for the stickers. You can still support
• 1:41:31
  Speaker 1: the show if you value what I do and if
• 1:41:34
  Speaker 1: you value these kind of shows where I take these
• 1:41:38
  Speaker 1: critics of capitalism to shreds. The next time will be
• 1:41:41
  Speaker 1: more of an academic, as I said, the woman who
• 1:41:43
  Speaker 1: wrote the book about how all this technology is really government-made, government-built,
• 1:41:49
  Speaker 1: and people take it very seriously about that. So it
• 1:41:51
  Speaker 1: won't be one of these guys. And there's a lot
• 1:41:54
  Speaker 1: of really good and interesting research that I will supply
• 1:41:58
  Speaker 1: on that because a lot of what she says is right.
• 1:42:02
  Speaker 1: So we'll have to take that apart. But if you
• 1:42:06
  Speaker 1: like these kind of shows where I take on a
• 1:42:09
  Speaker 1: topic like this, let me know. The best way to
• 1:42:12
  Speaker 1: let me know is with a dollar sign. All right.
• 1:42:16
  Speaker 1: Molten Splendor. Frederick, thank you for the sticker. Molten Splendor, $ 50.
• 1:42:22
  Speaker 1: Thank you, Molten Splendor. Cultural narratives help preserve the propaganda beliefs.
• 1:42:31
  Speaker 1: Destin's 12 million viewers likely tune in because his beliefs
• 1:42:35
  Speaker 1: mirror his audience. Yes. His style is storyteller. Profit needs
• 1:42:40
  Speaker 1: a better story told in a different way. Yeah, I mean,
• 1:42:46
  Speaker 1: there's no question. The better we are telling stories, the
• 1:42:51
  Speaker 1: more people we can get to. Ayn Rand, of course,
• 1:42:54
  Speaker 1: was the ultimate storyteller, and her success is a product
• 1:42:58
  Speaker 1: of the fact that she told stories. If she'd written
• 1:43:01
  Speaker 1: only nonfiction, she would have impacted a lot fewer lives,
• 1:43:05
  Speaker 1: a lot fewer people, and been relatively unknown. So I
• 1:43:13
  Speaker 1: definitely think that stories, we need better stories. We need
• 1:43:18
  Speaker 1: better storytellers and we need better stories. All right. Thank you, Moulton.
• 1:43:34
  Speaker 1: All right. $ 20 questions.
• 1:43:35
  Speaker 3: Chris.
• 1:43:35
  Speaker 1: Chris. Many were concerned in 2024 that if Trump got
• 1:43:40
  Speaker 1: elected that he might not leave office at the end
• 1:43:43
  Speaker 1: of his second term. Now it seems like people aren't
• 1:43:46
  Speaker 1: as worried that he will try to stay in office.
• 1:43:50
  Speaker 1: Why is that? Should we worry? I don't know. I mean,
• 1:43:54
  Speaker 1: I think he's going to be 82. I think, you know,
• 1:43:57
  Speaker 1: probably fatigue would prevent him from staying in office. I'm
• 1:44:03
  Speaker 1: more worried about what he does when the results come in.
• 1:44:07
  Speaker 1: from the midterm elections and how he tries to manipulate
• 1:44:11
  Speaker 1: that in certain states where he has built up mega
• 1:44:16
  Speaker 1: people running election committees. So I'm more worried about that
• 1:44:20
  Speaker 1: than about the presidential elections in 2028. There's time to
• 1:44:25
  Speaker 1: worry about that. I think it's age. I think if
• 1:44:28
  Speaker 1: the Democrats win also in the midterms, he will be fatigued.
• 1:44:33
  Speaker 1: I mean, right now he's fatigued. I mean, he's thinking
• 1:44:35
  Speaker 1: about getting rid of, what's her name, Wiles, his chief
• 1:44:40
  Speaker 1: of staff, who's probably one of the few sane voices
• 1:44:43
  Speaker 1: in the room there. I think he's getting more frantic,
• 1:44:48
  Speaker 1: more worried, more paranoid. And I think he'll have enough
• 1:44:56
  Speaker 1: by 2028. That's my view. But you've got to worry
• 1:45:00
  Speaker 1: about these midterms. I'm worried a little bit about the midterms.
• 1:45:04
  Speaker 1: I want to see how it plays out. I'm hopeful
• 1:45:08
  Speaker 1: that the system will hold. I think it will. But
• 1:45:12
  Speaker 1: that's where I worried. In terms of 2028, I don't
• 1:45:15
  Speaker 1: think he will try to stay. And we'll know very
• 1:45:18
  Speaker 1: early because he'll either support J.D. Vance or he won't.
• 1:45:22
  Speaker 1: And if he doesn't, then we have to worry. But
• 1:45:24
  Speaker 1: he'll probably support J.D. Vance. And then you've got to
• 1:45:31
  Speaker 1: worry about J.D. Vance winning in 2020. Will he win?
• 1:45:37
  Speaker 1: You know, again, the more MAGA gets a hold of
• 1:45:44
  Speaker 1: the mechanisms of voting in the different states, the more
• 1:45:48
  Speaker 1: you have to worry about challenges and questionable counting and
• 1:45:52
  Speaker 1: all of that. So we'll see. The midterms are going
• 1:45:55
  Speaker 1: to be a good test. Shazbat, $ 40. Wake up, people. Yes,
• 1:46:00
  Speaker 1: where are the other people? Where is everybody? They're asleep?
• 1:46:04
  Speaker 1: They didn't wake up early today? All right, Ian. You
• 1:46:07
  Speaker 1: should look at Doktorov's theory as he mentions, and Google
• 1:46:11
  Speaker 1: is an example. PAI search was becoming worse and worse,
• 1:46:14
  Speaker 1: dominated by sponsored results, et cetera. Don't dismiss that example.
• 1:46:19
  Speaker 1: It makes you look ill-informed. Yeah, so we talked about
• 1:46:21
  Speaker 1: it because I saw the question before it came about,
• 1:46:24
  Speaker 1: so we talked about it during the show. Linda says,
• 1:46:27
  Speaker 1: I enjoy these shows. Thank you. Thank you, Linda. Thank
• 1:46:29
  Speaker 1: you for the support. All right, let's move to the
• 1:46:32
  Speaker 1: $ 5 and $ 10 questions. Ooh, some $ 2 as well. All right, Michael. America.
• 1:46:38
  Speaker 1: When do flying cars go on sale? Europe is air
• 1:46:41
  Speaker 1: conditioning fascist. I don't think we're going to have flying
• 1:46:45
  Speaker 1: cars anytime soon. Maybe some flying taxis in some metropolitan areas,
• 1:46:53
  Speaker 1: but flying cars, it's going to be a long time. Europe. Europe.
• 1:46:58
  Speaker 1: It's going to be very difficult for Europe to adopt
• 1:47:01
  Speaker 1: air conditioning. Electricity prices are very expensive. Climate change dogma
• 1:47:06
  Speaker 1: is still strong in Europe. And it's very difficult to
• 1:47:10
  Speaker 1: see Europe shifting away from that and embracing AC. Michael,
• 1:47:18
  Speaker 1: their outer appearance becomes a manifestation of their inner hatred.
• 1:47:23
  Speaker 1: That's why Antifa and these leftists are so repulsively Repulsive intentionally. Yeah,
• 1:47:30
  Speaker 1: I think there's some truth to that. I mean, I
• 1:47:32
  Speaker 1: find the tattoos, the piercings, and you see the same one,
• 1:47:36
  Speaker 1: the kind of far right with the tattoos. Yeah, it's ugliness,
• 1:47:42
  Speaker 1: and it's ugliness that is an expression of their soul.
• 1:47:49
  Speaker 1: Michael also, whenever people hate unhappiness, it stems from envy,
• 1:47:56
  Speaker 1: question mark. It stems from envy. It could stem from hatred,
• 1:48:01
  Speaker 1: which is not the same thing. Hatred of themselves. Hatred
• 1:48:04
  Speaker 1: of reality. So again, I think there's no... Don't look
• 1:48:08
  Speaker 1: for one explanation to explain everything. There's not a one
• 1:48:12
  Speaker 1: psychological explanation that explains everything about people. It could be
• 1:48:17
  Speaker 1: they hate unhappiness because they've they bought into existentialist philosophy.
• 1:48:22
  Speaker 1: There are lots of reasons why people might hold a
• 1:48:27
  Speaker 1: particular view, and it could be separate from the issue
• 1:48:32
  Speaker 1: of envy. Michael, was the conventional free market movement being
• 1:48:37
  Speaker 1: a total failure or had mild success? Well, it's had successes.
• 1:48:42
  Speaker 1: It had a success in the late 70s and 80s
• 1:48:46
  Speaker 1: and 90s, I think. It had successes overseas in reforming
• 1:48:53
  Speaker 1: a big chunk of Asia and reforming the Eastern European countries, Estonia, Poland,
• 1:48:59
  Speaker 1: some other countries. Czech Republic or economic successes that are
• 1:49:04
  Speaker 1: a result of the free market movement. So no, I
• 1:49:07
  Speaker 1: think it's a mixed result. It's had primarily success in
• 1:49:10
  Speaker 1: emerging markets and it had some success in the 80s
• 1:49:13
  Speaker 1: and 90s. Frank, is the Naza film just pro-Palestinian propaganda
• 1:49:24
  Speaker 1: and lies? I expect so. I haven't watched it yet.
• 1:49:27
  Speaker 1: But it also builds on just war theory and the
• 1:49:33
  Speaker 1: ideas of holding Israel to a standard that it shouldn't
• 1:49:36
  Speaker 1: be held to. So it's an acceptance of altruism as
• 1:49:39
  Speaker 1: the standard. And then saying, oh, here and here, they
• 1:49:43
  Speaker 1: blew up this building knowing civilians would die. Yeah, they did.
• 1:49:47
  Speaker 3: Okay.
• 1:49:50
  Speaker 1: Why is that a bad thing? So it's two things.
• 1:49:54
  Speaker 1: It's propaganda. Some of it is straight-out lies, and the
• 1:49:58
  Speaker 1: other parts are holding them to a standard they shouldn't
• 1:50:03
  Speaker 1: be held to because it's an altruistic, self-defeatist, suicidal standard.
• 1:50:08
  Speaker 1: And Israel, at least up to a point, has said,
• 1:50:12
  Speaker 1: we've had it with suicidal, self-destructive standards. We're going to
• 1:50:17
  Speaker 1: fight for our existence. But I will watch the movie
• 1:50:23
  Speaker 1: when it's available for streaming in November. and give you
• 1:50:26
  Speaker 1: a more detailed analysis at that point. Exploring Simon. Thank
• 1:50:31
  Speaker 1: you for the sticker. Really appreciate it.
• 1:50:34
  Speaker 4: Roland.
• 1:50:35
  Speaker 1: This guy has an ethical problem. All right. He is
• 1:50:38
  Speaker 1: a nationalist or worse. Well, he's definitely got a kind
• 1:50:45
  Speaker 1: of localist perspective. That doesn't necessarily mean nationalist. It's a,
• 1:50:49
  Speaker 1: you know, he would like his own community. He's probably
• 1:50:51
  Speaker 1: big on by Austin or by, North Carolina or whatever.
• 1:50:55
  Speaker 1: I mean, he's really, really ignorant. Now, there might be
• 1:50:59
  Speaker 1: some nationalist or xenophobic overtones. I don't know. But so
• 1:51:06
  Speaker 1: many people hold these, and a lot of it is
• 1:51:09
  Speaker 1: a product of just their sheer ignorance about how the
• 1:51:14
  Speaker 1: world works and their unwillingness to think. Gary says, Yvonne,
• 1:51:20
  Speaker 1: when you pointed out Destin needs to step back and think,
• 1:51:24
  Speaker 1: that's your great mistake. You assume thinking is one's goal.
• 1:51:30
  Speaker 1: Only finding preconceived results keep up the critics' episodes. Here's
• 1:51:37
  Speaker 1: the thing about Destin. I think he's a good engineer.
• 1:51:43
  Speaker 1: He exhibits thinking in his other shows. This is why
• 1:51:46
  Speaker 1: he has such a big following. He bakes stuff down.
• 1:51:49
  Speaker 1: He likes to explain stuff about engineering. What I'm saying
• 1:51:52
  Speaker 1: is he's applying his thinking narrowly. He's compartmentalized. I want
• 1:51:57
  Speaker 1: to see him broaden his thinking from just engineering challenges.
• 1:52:01
  Speaker 1: He's obviously built this scraper that's an improved product. As
• 1:52:08
  Speaker 1: they said in the show, he built a laser machine
• 1:52:10
  Speaker 1: that's better and all kinds of stuff. He's a thinker. Now,
• 1:52:16
  Speaker 1: you know, broaden your thinking to other parts of life
• 1:52:19
  Speaker 1: where you might have preconceived notions that are wrong, but
• 1:52:23
  Speaker 1: that are outside your expertise as an engineer. Anomalous. Destin's
• 1:52:33
  Speaker 1: video reminds me of the story of three blind men
• 1:52:36
  Speaker 1: trying to figure out an elephant. Perceptual level, anti-conceptual mentality. Yes,
• 1:52:41
  Speaker 1: and that's the tragedy. is that in his engineering work,
• 1:52:46
  Speaker 1: he's conceptual. But when he's trying to understand something that
• 1:52:52
  Speaker 1: he's not qualified to and where he has preconceived emotionalist conclusions,
• 1:52:59
  Speaker 1: he turns perceptual level. That's right. And that's often the
• 1:53:03
  Speaker 1: case with the missing link. They can be very conceptual
• 1:53:08
  Speaker 1: in the particular world in which they function. I mean,
• 1:53:13
  Speaker 1: You don't gain 12 million people on YouTube without some
• 1:53:20
  Speaker 1: conceptual thinking. Without some conceptual thinking. But it's narrow and
• 1:53:31
  Speaker 1: it's localized. And what I'm saying is broaden it. Bring
• 1:53:34
  Speaker 1: it to everything. Frank, look at capitalist critic Normie Klein today.
• 1:53:42
  Speaker 1: who wrote No Logo. Yeah, I know Naomi Klein, so
• 1:53:45
  Speaker 1: she's definitely on my list. I want to do this
• 1:53:49
  Speaker 1: other woman first, and then we'll get to Naomi Klein. Chris,
• 1:53:53
  Speaker 1: can you go into more detail of what you are
• 1:53:56
  Speaker 1: saying about the midterms? What can we expect? What could happen?
• 1:54:01
  Speaker 1: Will you be doing a show on that? Probably as
• 1:54:03
  Speaker 1: we get closer to the midterms and as we get
• 1:54:05
  Speaker 1: more info, certainly while the midterms, the results are coming in,
• 1:54:09
  Speaker 1: I will hopefully be there. Now, I might be traveling
• 1:54:12
  Speaker 1: during the midterms. I can't remember. Anybody know what date
• 1:54:16
  Speaker 1: the midterms are? November what? Let's see where I'm going
• 1:54:20
  Speaker 1: to be when the actual election. Since I don't vote
• 1:54:23
  Speaker 1: in the midterms, where am I in the world when
• 1:54:31
  Speaker 1: the midterms happen? Okay. Yeah, anybody know what day the
• 1:54:43
  Speaker 1: midterms are? Nobody's telling me. So anyway, let me know.
• 1:54:48
  Speaker 1: More detail. I worry that a lot of the election
• 1:54:54
  Speaker 1: committees in states like Georgia and other states are now
• 1:54:57
  Speaker 1: dominated by MAGA. And, you know, so it looks like
• 1:55:02
  Speaker 1: the Democrat is going to run away with the Senate
• 1:55:05
  Speaker 1: in Georgia, which is a pretty stunning result if you
• 1:55:07
  Speaker 1: think about Georgia and its past red status. They're going
• 1:55:11
  Speaker 1: to now have a also is it looks like he's
• 1:55:15
  Speaker 1: going to run away with the Senate. So I'm not
• 1:55:17
  Speaker 1: worried about that one because I think he's going to
• 1:55:20
  Speaker 1: win by so much that it won't be close. Right.
• 1:55:26
  Speaker 1: It won't even be close and nobody will be able
• 1:55:29
  Speaker 1: to rig it. But you might see some districts in
• 1:55:32
  Speaker 1: the House and you might see some Senate races, maybe
• 1:55:35
  Speaker 1: in Texas, maybe elsewhere where it is close. And where
• 1:55:39
  Speaker 1: the Democrats appear to win and where Republicans try to
• 1:55:45
  Speaker 1: engage in all kinds of shenanigans, recounts, and manipulations to
• 1:55:54
  Speaker 1: try to overturn results. And I assume the Democrats have
• 1:55:59
  Speaker 1: their lawyers and they're ready for that kind of stuff.
• 1:56:04
  Speaker 1: But given that, again, given that a lot of the
• 1:56:09
  Speaker 1: people who are administrating the voting over the last two years,
• 1:56:16
  Speaker 1: a lot of those people are being replaced with Trump-friendly people,
• 1:56:21
  Speaker 1: that it's going to be messy, much messier. That's the
• 1:56:27
  Speaker 1: thing I worry about. Do I have specific races in mind? No.
• 1:56:31
  Speaker 1: I don't follow politics enough to have specific races in mind.
• 1:56:35
  Speaker 1: Just as a general phenomena, and given that this election
• 1:56:38
  Speaker 1: is going to be I think, going to be overwhelmingly
• 1:56:41
  Speaker 1: positive for Democrats. So Republicans are going to be unhappy
• 1:56:45
  Speaker 1: about it. And that they're going to be a lot
• 1:56:49
  Speaker 1: of very close races because Democrats are doing well, for example,
• 1:56:54
  Speaker 1: in some pretty strongly red districts, Republican districts. So if
• 1:56:59
  Speaker 1: they win, they'll win by small margins. That's where I
• 1:57:02
  Speaker 1: think you'll see a lot of challenges. I wouldn't be
• 1:57:03
  Speaker 1: surprised if we don't know the final results from this election.
• 1:57:09
  Speaker 1: for weeks and weeks afterwards, maybe even months, because there'll
• 1:57:14
  Speaker 1: be legal challenges and recounts and all kinds of stuff
• 1:57:17
  Speaker 1: like that. That's what I meant. So the election is
• 1:57:21
  Speaker 1: on November 3rd. I will be in Rio de Janeiro
• 1:57:25
  Speaker 1: on November 3rd, but I will do a show either
• 1:57:28
  Speaker 1: on the 3rd or on the 4th. We'll see how
• 1:57:29
  Speaker 1: it plays out between those, but I will be there.
• 1:57:34
  Speaker 1: And as I said, I hope I hope the Democrats
• 1:57:40
  Speaker 1: crush the Republicans. I hope a few Democrats lose the
• 1:57:45
  Speaker 1: ones that are associated with the worst elements within the
• 1:57:48
  Speaker 1: Democratic Party. But overall, if the Republicans are not crushed,
• 1:57:54
  Speaker 1: then they will never learn. They'll think they can screw
• 1:57:58
  Speaker 1: this country. They can destroy this country and suffer no consequences.
• 1:58:03
  Speaker 1: They can destroy our standing in the world. They can
• 1:58:06
  Speaker 1: destroy our strength. They can destroy our deterrence. They can
• 1:58:10
  Speaker 1: destroy our economy. They can tax Americans with no consequence.
• 1:58:16
  Speaker 1: They can take, what is it now, 36 companies now
• 1:58:21
  Speaker 1: have equity positions or about to have equity positions by
• 1:58:24
  Speaker 1: the government. In other words, Republicans will learn that if
• 1:58:27
  Speaker 1: they embrace socialism, it's okay. And we're getting socialism. Stunningly,
• 1:58:34
  Speaker 1: we're getting socialism from Trump. If socialism is the state
• 1:58:38
  Speaker 1: owning the means of production, there's never been a more
• 1:58:41
  Speaker 1: socialist president than Donald Trump. Never. So they need to
• 1:58:50
  Speaker 1: be penalized for that. And what Republicans in the House
• 1:58:53
  Speaker 1: and Senate need to be penalized for is not standing
• 1:58:59
  Speaker 1: up to Trump at all. At all. For anything. We
• 1:59:04
  Speaker 1: have the most corrupt, literally, the most corrupt White House
• 1:59:11
  Speaker 1: in American history. And that's saying a lot. Nobody's standing
• 1:59:18
  Speaker 1: up to him. They have to lose. They have to
• 1:59:22
  Speaker 1: pay a price. Justice. Put aside everything else. Justice. Remember justice?
• 1:59:27
  Speaker 1: It's why Netanyahu has to lose. justice demands they lose.
• 1:59:33
  Speaker 1: You can't do the kind of immoral, irrational, destructive acts,
• 1:59:42
  Speaker 1: destructive on Americans, that this administration has done, that Netanyahu
• 1:59:46
  Speaker 1: has done to Israel, and not suffer defeat. And people
• 1:59:52
  Speaker 1: who are still voting for Republicans, who stand by as
• 1:59:56
  Speaker 1: Trump and you know, is taking apart this country and
• 2:00:00
  Speaker 1: padding his own pocket at the same time, people who
• 2:00:03
  Speaker 1: stand by and just vote Republican because, oh, the Democrats,
• 2:00:09
  Speaker 1: you deserve what you're going to get. You deserve the
• 2:00:13
  Speaker 1: Democrats because you got Trump elected to begin with. The
• 2:00:16
  Speaker 1: only reason Democratic Socialism America is successful is because you
• 2:00:19
  Speaker 1: elected Trump. Andrew, not sure if this knowledge is lacking
• 2:00:25
  Speaker 1: more in economics or human nature. Set aside the weirdos
• 2:00:29
  Speaker 1: who do exist but are admittedly rare. The average entrepreneur
• 2:00:33
  Speaker 1: and CEO is not the greedy zombie he makes them
• 2:00:36
  Speaker 1: out to be. No, and he's one of them, right?
• 2:00:39
  Speaker 1: He's an entrepreneur. But he can't extrapolate from that. You know,
• 2:00:46
  Speaker 1: the vision of greed, the vision of self-interest, the vision
• 2:00:51
  Speaker 1: of profit, and then the fact that he sees products
• 2:00:54
  Speaker 1: that he thinks are bad. Low quality. That combination overwhelms
• 2:01:03
  Speaker 1: his ability to generalize and conceptualize what real CEOs and
• 2:01:08
  Speaker 1: real entrepreneurs are like. The Democrats, socialists were nothing. They
• 2:01:20
  Speaker 1: were nothing and nobodies. They achieved nothing. They got nowhere
• 2:01:26
  Speaker 1: before Trump. Trump made them into a political force. Did Dustin,
• 2:01:33
  Speaker 1: this is from Ali, did Dustin lack economic knowledge, philosophy,
• 2:01:38
  Speaker 1: or maybe a mixture of both? Well, both. And again,
• 2:01:42
  Speaker 1: his real lack is his unwillingness to conceptualize the issues
• 2:01:49
  Speaker 1: he's talking about. It's that when he talked about economics,
• 2:01:54
  Speaker 1: he stayed at the perceptual level. when he did his triangle,
• 2:02:00
  Speaker 1: purely perceptual level, and he wasn't willing, even when his partner,
• 2:02:05
  Speaker 1: his business partner kind of challenged him, challenged him, then,
• 2:02:14
  Speaker 1: you know, he wouldn't go there. He wouldn't use that
• 2:02:19
  Speaker 1: as an opportunity to broaden and to conceptualize more broadly.
• 2:02:27
  Speaker 1: All right, guys. Thank you to all the Super Chatters. Really,
• 2:02:30
  Speaker 1: really appreciate it. Thank you to all of you for
• 2:02:32
  Speaker 1: being here. Thank you on whatever platform you are watching, listening.
• 2:02:37
  Speaker 1: Don't forget to become a monthly supporter of the Ron
• 2:02:41
  Speaker 1: Brooks Show on Patreon or on PayPal. And, you know,
• 2:02:47
  Speaker 1: support the work that I do in defending capitalism, defending freedom,
• 2:02:52
  Speaker 1: defending us from all our enemies. no matter what tribe
• 2:02:57
  Speaker 1: you belong to. And I will see you all tomorrow.
• 2:03:05
  Speaker 1: Nikos and I will be talking about Fauda. And then
• 2:03:09
  Speaker 1: Monday we'll be back for a couple of days. Oh,
• 2:03:13
  Speaker 1: Monday I'll be interviewing Duncan Scott about We the Living
• 2:03:17
  Speaker 1: Movie and the screenings of it in Australia. But I'll
• 2:03:23
  Speaker 1: also probably do a new show Earlier in the day.
• 2:03:26
  Speaker 1: So Monday. Probably two shows. If I can pull it off.
• 2:03:29
  Speaker 1: Because I'm also teaching Monday. So we'll see. We'll try.
• 2:03:32
  Speaker 1: And then Tuesday. A new show. And then Wednesday. Thursday.
• 2:03:36
  Speaker 1: And Friday. No shows. All right guys. I will see you. Tomorrow.
• 2:03:43
  Speaker 1: With Nikos. Fauda. Even if you haven't watched Fauda. You
• 2:03:48
  Speaker 1: should come listen to the show. It's going to be.
• 2:03:50
  Speaker 1: It's going to be fun. Bye everybody.