Slate Money – The Distinctly Nordic Edition (January 6, 2018)

Episode Overview

This episode of Slate Money, hosted by Felix Salmon, Anna Shymansky, and Jordan Weissmann, dives into several global stories with a strikingly Nordic flavor and a focus on key economic policy experiments, market innovations, and global political issues. The trio discusses Iceland’s bold gender pay equity law, Spotify’s unique approach to entering the US stock market, and the political economy behind the protests in Iran. The discussion flows with the hosts’ signature mix of deep analysis, playful debate, and candid skepticism.

Key Discussion Points and Insights

1. Iceland’s Gender Pay Equity Law

Segment ~ [01:31 – 11:49]

• Law Overview: Iceland has introduced a law mandating that companies must certify, through external audits, that men and women are paid equally for similar work.
• Shift of Burden: Unlike in most countries, the onus is on companies to proactively prove compliance, not employees to complain (“…the burden of proof is on the company.” – Anna Shymansky [02:00]).
• Enforcement: Non-compliance results in daily fines, indicating serious intent from Icelandic authorities (Felix Salmon: “Yeah, they are not fucking around.” [02:16]).
• Potential Impact:
  • Quick Fix?: Jordan suggests the law could allow for rapid rectification simply by raising women’s pay, but Anna and Felix caution it’s more complex due to the need for job role valuation and documentation.
  • Unintended Consequences: Anna warns this could depress wages for everyone, as bureaucratic hurdles may make raises cumbersome ([04:12]).
  • Systemic Issue: Men are more likely to already occupy higher-paying roles, so part of the challenge is changing hiring and promotion practices as well ([06:26]).
  • Optimism vs. Skepticism: The group sees value in the experiment, noting similarities to pay transparency in the US public sector and the context of heavy unionization in Iceland.
• Key Quote:

  “If parity comes about by men’s wages falling to the level of women’s wages, that is less attractive of an outcome than if parity comes about by women’s raised wages rising to the level of men’s wages.”
  – Jordan Weissman [09:53]

• Comparative Context: Minnesota’s public sector is noted as an American example with some success ([10:34]).

2. Spotify’s Direct Listing and IPO Innovation

Segment ~ [11:57 – 27:45]

• Spotify as a Disruptive Export: The Swedish company is showcased not just for revolutionizing music, but for pioneering a direct listing method on the NYSE.
• How a Direct Listing Works:
  • No traditional underwritten IPO: Spotify won’t issue new shares or raise new capital at IPO, but simply enables existing shareholders (VCs, employees) to sell shares on the market directly ([13:14], [14:53]).
  • Cost Savings: Sidesteps the substantial fees (often 7% of proceeds) charged by investment banks ([18:28]).
  • No Lock-Up: Employees and early investors can sell immediately ([18:20]).
• Market Psychology:
  • The lack of a formal IPO price eliminates the “first day pop” narrative—the press can no longer focus on whether the stock soared or slumped from a set base ([20:09]).
  • There’s concern about price volatility: Anna flags the risk of a selling wave without an underwriter to stabilize prices ([21:08]), but Jordan maintains rational holders won’t sell at low prices, thus market forces will determine a fair price ([23:43]).
• Debate Over Market Effects:
  • Possible reduced “free float” could push prices artificially high due to limited shares trading hands ([27:24]).
  • Discussion of long-term investor relationships and the potential impact of skipping the traditional IPO roadshow ([25:50]).
• Notable Quotes:
  • “It’s a non-IPO IPO. It’s a fake IPO, but it’s a real IPO.”
    – Felix Salmon [13:39]
  • “Spotify is the Foucault of IPOs.”
    – Anna Shymansky [20:56]

3. Iran’s Protests and Economic Struggles

Segment ~ [27:45 – 38:40]

• Backdrop: Widespread protests erupt in Iran—unlike the politically-driven 2009 demonstrations, these are explicitly about the dire economy ([28:24]).
• Underlying Economic Problems:
  • Inflation has improved under President Rouhani, but deep structural and corruption issues persist ([29:09]).
  • One-third of the economy is run by the Revolutionary Guard and religious organizations, immune to regular taxation ([30:09]).
  • Sanctions lift anticipated foreign investment, but US dollar restrictions and political instability post-Trump stalled that inflow ([30:50]).
  • Costly reforms required (reduction of subsidies, privatization, increased taxation) are deeply unpopular but seen as necessary for long-term health ([32:11]).
• Political Complexity: Hardliners could use the protests to resist Rouhani’s reforms, potentially hampering future recovery ([36:42]).
• Protest Significance: For the first time, protestors are targeting not just the government, but the entire system as corrupt and unresponsive ([36:06]).
• Key Quote:

  “For the first time in a generation, you have a group…rebelling against not just the current government, but the entire system, the entire Iranian system saying, ‘This is all rotten.’”
  – Felix Salmon [34:28]

Notable Quotes & Memorable Moments

• On Iceland’s commitment: “Icelanders. They're serious.” – Anna Shymansky [02:15]
• On Spotify’s market debut: “Words to make my heart flutter. I love direct listings so much.” – Jordan Weissman [13:34]
• Lit Theory Reference: “Spotify is problematizing the narrative.” – Felix Salmon [20:47]
• Sharp Nordic Humor:

  “Distinctly Nordic. That’s actually my new brand of seltzer…Because I feel. I feel distinctly Nordic.”
  – Felix Salmon [11:51]

• Iran’s Reality Check: “This is the wisdom you come to Slate money for, our listeners: Still pretty shitty.” – Felix Salmon [28:16]

Timestamps for Important Segments

• [01:31] — Iceland’s pay equity law introduction
• [04:12] — Discussion of potential wage stagnation
• [09:53] — How wage parity is measured and desired outcomes
• [11:57] — Segue to Spotify and the concept of the direct listing
• [13:14] — How direct listing differs from traditional IPOs
• [20:09] — Media narrative problem with direct listings
• [27:45] — Iran’s protests and economic context
• [34:28] — The transformative nature of Iran’s current protests
• [36:42] — Potential political backlash to economic reform

Numbers Round (Quick, Quirky Endings)

Segment ~ [38:54 – 48:56]

• Taiwanese Dentist Mom: $740,000 – a mother wins a court order for “upbringing” fees from her son ([38:54]).
• Gene Therapy Cost: $850,000 – Luxturna’s new gene therapy for a rare form of genetic blindness ([41:14])
• Apology & Museum Admission: Jordan and Felix clarify a previous error on German GDP per capita ([43:14]); the Met Museum introduces a $25 non-NY resident admission fee ([44:44]).
  • Debate over museum financial priorities and donor influence ([47:53]).

Overall Tone

• Language: Conversational, lightly profane, and humorously self-aware.
• Style: Playful intellectual banter with a willingness to “nerd out” on economics, finance, and policy.

Summary for New Listeners

Even if you’ve never heard an episode of Slate Money before, this installment provides a compelling look at ambitious policy experiments—like Iceland’s quest for pay equity and Spotify’s attempt to rewrite IPO conventions—while not shying away from the messier, more sobering economic realities in places like Iran. The hosts balance admiration for innovation with skepticism about unintended consequences, all while peppering the discussion with wit and cultural observations that make even complicated topics feel accessible and engaging.