Navigating the K-Shaped Economy: Tech, Inequality, and the Rise of Digital Power | Impact Theory w. Tom Bilyeu & Daniel Priestley

Summary

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Podcast Summary: Navigating the K-Shaped Economy – Tech, Inequality, and the Rise of Digital Power

Impact Theory with Tom Bilyeu & Guest Daniel Priestley
Date: May 23, 2026

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Episode Overview

In this dense and engaging conversation, Tom Bilyeu is joined by entrepreneur and author Daniel Priestley to dissect the forces driving the modern "K-shaped" economy—where advances in technology produce simultaneous winners and losers, escalating inequality even as innovation accelerates. The discussion weaves through models of governance, technology’s outsized effects on society, failings in education and economic structure, and radical shifts coming with AI. Priestley draws lessons from global models (like the Nordic countries), deeply questions redistribution solutions such as Universal Basic Income (UBI), and forecasts a future where tech corporations exert power rivaling nation-states. Both guests probe what reforms—political, educational, and economic—might be needed to help humanity thrive in the digital age.

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Key Discussion Points & Insights

1. Nordic Models & The Limits of Redistribution

[01:28 – 06:04]

• The "Nordic model" isn't pure socialism; it’s more about delayed redistribution, requiring high competence within government.

• Small, homogenous countries (e.g., Norway, Sweden, Switzerland, Singapore) make these models function; attempts to scale to larger, more diverse populations break down.

• Daniel Priestley [03:07]:

  "You can't just simply throw resources at government if competence isn't in the government."

• For countries with >100 million people, Priestley argues there’s no successful precedent for low-inequality, high-growth, large-scale distributive policy.

2. Capitalism vs. Socialism: Not a Binary Spectrum

[06:04 – 08:22]

• Both agree it’s naive to think capitalists oppose all government social services; it’s more a question of degree.
• Priestley notes government size relative to GDP is on a sliding scale, not an on/off switch.
• Call out absurdities in the US healthcare system: ambulance rides can cost the uninsured $600, but $6,000 with insurance.
  • Tom Bilyeu [08:04]:

    "It's not what people think. We don't have health care, we have a completely corrupt, broken system that has been completely captured."

3. K-Shaped Economy: Technology as a Divider

[14:15 – 25:15]

• Priestley posits that money printing (inflation), technological acceleration, and cultural/educational mismatches are the three intertwined engines of inequality.

• Technology is a "bicycle for the mind" that creates a power law dynamic: those who adapt and leverage it (e.g., influencers, E-commerce pioneers) accelerate, while others fall behind or are distracted.

  • Example: Social media can be a lucrative business engine for a few, but a life-waster for millions.

• The gig economy illustrates how tech can erode once-secure jobs ("the knowledge" of London cab drivers decimated by GPS/Uber).

• Daniel Priestley [17:14]:

  "Certain people figure out how to use these [technologies] productively and accelerate. The majority are distracted... their life gets worse because they're just consuming content when they should be working."

4. Education, Culture & Skill Disparities

[22:38 – 25:15]

• Tom argues that disparities in tech adaptation are fundamentally about culture and education, not tech access.

• Wealth and opportunity, Priestley responds, accrue disproportionately in the early phases of new technology – a lag known in economic history as the "Engels Pause."

• Daniel Priestley [23:27]:

  "There's an initial period of time where early adopters...get early gains...But for a brief period, those who leverage the new tech get rewarded disproportionately, and laggards are laggards."

5. Aggregates, Power Laws & The Shrinking Middle Class

[34:15 – 43:48]

• Priestley insists that the digital economy distributes rewards by a "power law" (winner-takes-most)—not a bell curve as in the industrial era.

• Top earners leverage technology; the middle class shrinks as many fall behind but a significant portion rise dramatically.

• Daniel Priestley [39:34]:

  "There's a growing number of very wealthy people. Part of the reason we have a shrinking middle class is because a lot of people are going up—jumping on this technology up-curve."

6. The Next Great Disruption: AI and the Coming Transition

[43:48 – 46:04]

• The hosts compare the coming AI transition to historical disruptions like the Industrial Revolution.

• Priestley predicts a period of turbulence—winners, laggards, and a double-speed economy—before society re-equilibrates, probably with entirely new economic paradigms.

• Daniel Priestley [43:48]:

  "In the next 10 to 20 years...we're about to hit the liftoff moment for a very new economy, very new world. And we're going to have an Engels Pause—early adopters, power law, laggards..."

7. Redistribution, UBI & the Sovereign Wealth Fund Paradigm

[49:38 – 67:44]

• UBI is critiqued as, at best, a transitional "softening" that doesn’t address the root economic or psychological issues (i.e., meaning, purpose, value creation).
  • Daniel Priestley [50:28]:

    "If you give everyone two grand a month, two grand a month becomes a meaningless amount."

• Wealth redistribution faces practical limits: globalized capital evades local taxation; taxing unrealized gains destabilizes liquidity; simple handouts risk inflation.
• Data (and the infrastructure to process it) is posited as a new form of "common good"—like natural resources—implying a possible justification for sovereign wealth funds.
• Precedents: Norway’s success in parlaying oil resources into shared, long-term prosperity versus other countries' failures due to poor governance or misuse ("the curse of resources").

8. Dangerous Financial Structures: AI Data Centers as a Bubble?

[54:33 – 59:54]

• A new bubble is forming around AI data center construction, with massive, short-lifespan capital expenditures being securitized and sold to pension funds—a pattern reminiscent of the 2008 crisis.

• Forecast: Governments might ultimately bail out these pension funds, inheriting the data centers as public goods (which could become a basis for new wealth distribution mechanics).

• Daniel Priestley [59:32]:

  "The government bails out all the pension funds in order to own all the data centers. The data centers are then common goods...they lease the data centers to the tech companies...and that redistributes to people who are not part of the elite class."

9. The Need for New Paradigms: Education, Property, and Political Reform

[67:44 – 70:56]

• Society must rethink property, ownership, and education: property and the ability to "earn into more" are fundamentally human motivators.

• Institutional reforms needed include:

  • New education that rewards creativity, enterprise, teamwork, and adaptation (not rote memorization or conformity)
  • New political rules reflecting distributed digital power
  • Institutionalized ways for people to benefit from common data and digital infrastructure

• Daniel Priestley [67:44]:

  "I think we're actually moving towards tech economy versus traditional industrial economy...you could be in the USA and be completely impoverished because you're disconnected from that tech economy."

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Notable Quotes & Memorable Moments

• On the root challenge of the future economy:

  "Can we create games where people can earn into more and succeed?...We need a school system that basically says: here's how you understand what you're unique at and your skills and who you'd partner with and how you'd be more enterprising, as opposed to industrial labor."
  — Daniel Priestley [69:03]

• On redistribution and the futility of UBI:

  "If you just give everyone two grand a month...all you've really done is given a lot of people two grand a month they can spend with our companies, and our wealth goes like that and they don't get lift off..."
  — Daniel Priestley [50:43]

• On the AI data center bubble:

  "We're repackaging up this data center debt and we're going to pension funds...what could possibly go wrong?"
  — Daniel Priestley [57:20]

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Crucial Timestamps

• Nordic Model/Competence: [01:28 – 06:04]
• Tech as Divider, K-Shaped Economy: [14:15 – 25:15]
• Education/Culture’s Role: [22:38 – 25:15]
• Power Law & Shrinking Middle Class: [34:15 – 43:48]
• AI and Future Transitions: [43:48 – 46:04]
• Redistribution and UBI Critique: [49:38 – 54:08]
• AI Data Centers as Public Good: [54:33 – 62:05]
• Sovereign Wealth Fund Models: [62:11 – 67:44]
• Reforming Education & Ownership: [67:44 – 70:56]

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Tone & Closing Reflections

Throughout, the tone is incisive, empirical, and at times playfully self-challenging. Tom presses for hard numbers and mechanisms, while Daniel delivers sweeping historical analogies and pragmatic economic logic. Both approach seismic issues—automation, AI, inequality, government dysfunction—with skepticism toward simple solutions, seeking reform rooted in human incentives and systemic understanding.

Tom Bilyeu [71:34]:

"We got to get you to write a book about the economic path forward...be great to get your mind on that."

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Guest Details:
Daniel Priestley is active on social media and has authored "Lifestyle Business Playbook," focusing on leveraging digital tools for freedom and flexibility.
[71:12]

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For listeners:
This episode is a must-hear for anyone seeking a nuanced grasp of how digital tech is reshaping societies and economies. Rather than left/right polemics, it offers frameworks for thinking about competence, common assets, and creative reform at a time when the future is genuinely up for grabs.

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Transcript

[A]

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[B]

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[A]

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[B]

That's where it ended up as.

[A]

Yeah, making sure that we don't get ourselves into that gigantic bureaucracy that is just taxing people to death, acting like your money is secretly the government's money. So that'll make sense. But is that the solution? Or are you looking at them going, oh, you guys are so vulnerable to whether it's immigration or I don't know what, that it's not a good model. Or are you like, yeah, like this, hey, we found them.

[B]

If you can make it work, but it is built upon competence, then the Nordics are very competent at doing their systems and their healthcare and all that sort of stuff. A great rule that all entrepreneurs and investors tend to follow is double down on your winners and cut your losses back. Competence and starve incompetence. Right? So you think about just your sales team, right? So you want to go all in on your top salespeople and give them the best leads, the most leads. And you want to say, unfortunately, bottom 30% of sales team guys aren't performing. You're going to have to go Somewhere else. Right. So you starve in competence and you reward competence. The thing with the Nordic model is that they have, for whatever reason, they've been able to create a culture of competence within their government institutions that most places don't have. Same as Switzerland, same as Dubai, same as Singapore. Right. So you actually do get competence, end up in government. One of the biggest issues that you have to address if you want to do this model is, is you can't have. You can't just simply throw resources at government if competence isn't in the government. Right.

[A]

So I feel attacked right now.

[B]

Well, I mean. Well, in the US there are parts of the government that are incredibly competent. Are they Navy SEALs?

[A]

Okay, sure.

[B]

Right. Would you want anyone else other than a Navy seal?

[A]

No, but would I want them distributing my money? No, I would not.

[B]

But if you were to say, if there was a part of government that was as competent as Navy SEALs, should we give them more resources? Why not? Right. Whatever they're doing, like, if they're able to do it, if you go to California and say, hey, we only need 8 billion to build this amazing railroad. And then six, seven, eight years later we go, oh, we've had 20 billion and we haven't built one mile of railroad. Well, then you don't double down on incompetence. Right. You say, okay, we need to find a different way. Because this is. You can't just throw good money after bad. So, yes, it's great that the Nordic model seems to be working in Switzerland. And Switzerland is not social. Switzerland is very low small government. But it has to be. Resources and competence have to go hand in hand. You can't just simply throw more money at something and hope that competence works. You can throw more money if competence shows up for that money. Great.

[A]

Okay. So I'm going to try to give it a scorecard to see if I'm understanding you correctly. So Nordic models, historically, we've got a coming immigration problem that I'm going to set aside for a second or an arrived immigration problem. But what they've earned their reputation on is being small. First of all, I think Norway has 11 million people.

[B]

Yeah. Or Sweden 5 million or something like that. Or they're like 5 to 15 million people.

[A]

Yeah.

[B]

And they all cluster around cities. Yeah, yeah. Like when I also say homogenous, there's not a massive difference between city folk and rural folk in those countries either. Right. They're most. They're mostly living very similar lives. That's the other homogeneity about it. It's like, you know, you don't like, they're geographically close, they're living in a few cities. Majority are in a few cities. Like this is, this is part of what makes it work.

[A]

Right. I recognize me in you and vice versa. We share values, we hold each other accountable.

[B]

Your life is similar to my life. You're trying just as hard as I'm trying to, you know, all of that stuff.

[A]

Competence being a high one. Okay, so it, it's one of those, it's a good model. It definitely will not scale. It won't work for everybody. You would have to have the things that you've just walked us through if you want to make that work. If you have a large country, and I look this up, there is not any country that has over 100 million people that is low wealth inequality, high growth and oh, and over 100 million. So those were the. You just don't get a high functioning socialist distributive policy if you start scaling up over 100 million people.

[B]

I should also probably name the elephant. There's some few elephants in the room as well, which is when someone talks about capitalism versus socialism like it's a straw man to suggest that capitalists think there should be no government, no services, no safety nets, like none of that stuff. You know, there is, there is laissez faire, like crazy level anarchist capitalism which would be like a government of less than 15% of GDP or less than 20% of GDP. There's normal range capitalism where the government is about 20 to 35% of GDP. Right. Somewhere around a fifth to a third. This is most functioning countries. Then there's, we're getting into a socialist state. When you hit about 40% to 60% of the size of the economy is government. And then you get into, you know, sort of socialism plus 60% to 80% and communism 70% up to 100%. So it's kind of like a sliding scale. How big is the state? Like we're not talking about a binary here where like a capitalist doesn't believe in any social nets or any role of government or any of those kind of things. I'm not in that camp. Like, I'm not. Like, I do think it's insane that America doesn't have like just a normal ambulance service that doesn't send you broke. Right. Like in parts of. Is it still true that in parts of America if you call an ambulance it's like gonna be thousands of dollars?

[A]

I people don't understand what America actually is. So if you are broke and you can't pay. The hospital will just write that off. If you have insurance, they're going to gouge the insurance company for the money if you tell them, oh, I had to ride in an ambulance, but I don't have insurance. Or like, cool, it's whatever, $600. I'm sorry, I do have insurance actually. Oh, they're like, oh, that'll be $6,000. You're like, wait a second, can't I just pay the 600?

[B]

I agree. That's insane.

[A]

Yeah, that is insane.

[B]

I totally agree with you.

[A]

It is not what people think. It is not that we don't have health care. It is that we have a completely corrupt, broken system that has been completely captured. And I don't, I'll derail us if I start going down, by the way.

[B]

Most people are not advocating for that. Like most capitalists are not saying, oh, the American healthcare system is the best possible system in the world. I personally much prefer the idea that if I call an ambulance, it's a government run service that comes out and picks me up and takes me to a hospital. And that, that is a taxpayer funded thing because I assume no one's calling an ambulance unless they need an ambulance. Its job is to administer first aid and take you to hospital.

[A]

Well, so people will call an ambulance for the dumbest shit in the universe if there isn't. If there's not a value system of like that, that's a thing that we don't do. So there's no question part of America's problem is that we have systems that are very easy to prize. And so this, it comes down to values. All right, we can get to that in a minute. But so first, okay, when you look out at the world and you see we've got a system that's broken because it is not taking care of people because we have this K shaped economy that is driving people below the cost of goods and so they're effectively getting poorer by the day. The redistribution models that people use are not working. You need a high competence government with a high homogeneity of values and lifestyle. And the places where everything is beginning to break down is, I mean if we look at the UK since we're here, walk me through, like what exactly is breaking down if we're not going to be able to import the model of the Nordic countries, presumably because of diversity and we have.

[B]

I'm not, yeah, I'm not picking on diversity, I'm just saying you need alignment of values. I don't want that to be the thing that everyone obsesses about in the comments. I was just simply saying with socialism you start to think about is everyone working as hard as I am, that that tends to be. And then you get with more socialism you actually get more aggression between groups, between tribal, tribal rivals. However you want to draw those lines.

[A]

Sure.

[B]

Right. So anyone who people can mark out as not working as hard as I, if we all, if we're all in this together, you get tensions. Whereas in capitalism we just trade, take it or leave it.

[A]

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[B]

So here's what I think is causing the K shape, all right? And I know you want to jump in on some of it, but. But like, let me kind of map out a little bit of a thesis here. But there's definitely the issue of printing money, debasing currency causing inflation. Like that's a huge part of it. There is this other part of it as well, which is technology. And if you just simply. Let's imagine you had an island and on the island you had a couple of different groups of people and everyone's trying to survive on the island. And you go to one group of people on the island, you say, here's the Swiss army knives, right? You guys will got Swiss army knives and, and cigarette lighters, right? So you can easily start a fire, you can easily sharpen sticks, right? You've got this little edge of technology. Fast forward a couple of months. We know which side of the island is going to be doing incredibly well versus the other side of the island. This side of the island might have taken over the other side of the island just by giving a slight technological advantage. History is full of slight technological advantages leading to global domination. Like the British took over the world and because we had guns and steel and boats and like slight technological edges. And then the UK had 25% of the world's popular population living under the British Empire. And we took over places like India and we took over like continents because we had a slight technological Edge. I feel like having listened to some of your stuff, not all of your stuff, but I feel like you overlook that the role that this slight technological advantage actually plays. Now what's happening is that we've introduced general purpose technology. Now by the way, when you talk about big trends, you got to think in decades and just take something as simple as social media or cloud computing. It's like we're going to give some people social media that will distract them and make them do dumb stuff, unproductive things. And the same technology will make some people sell like a billion dollars worth of lipstick to their followers and make a ton of money with a team of 10 people daily Bieber. And it's like this same powerful technology for in the hands of some people, they're just gonna hugely blow up and some people are gonna be massively distracted with life.

[A]

And just to make sure I understand, you're saying that's a technological difference.

[B]

Yeah, essentially like the bicycle in the race that we talked about before, if you've got the leverage of technology, you know how to ride the bike, then you win the, you win the race every time. And what we're seeing at the moment is we're seeing part of the K shaped economy is we're seeing some people who totally get how to use technology. You're an example of this, you're running this YouTube channel, making money in a way that our grandparents would never have dreamed possible using this new technology. I'm not sure with Quest whether you were E commerce, retailing and like, were you selling a lot of Quest online?

[A]

That's how we started. So at one point it was 100%. Yeah, but, yeah, ultimately.

[B]

But I'm guessing you're a fairly tech enabled company at the time. Yeah. And you were probably more tech enabled than your rivals and than your peers. Like all of the, you know, the traditional businesses that were already in the marketplace, you probably were more effective, more lean, you probably faster to implement technology than others. And therefore you, you come in and you win and you win the race. So since the 1970s, 80s, we've had personal computers, Internet, cloud computers, social media, and now AI. These bicycles, even Steve Jobs called them bicycles for the mind. These bicycles of the mind, these techno, these general purpose technologies, certain people figure out how to use these productively and they accelerate. And the majority of people are distracted by these technologies. They're actually not just neutralized by them, but disadvantaged by them. And their life gets worse because they're flicking through endless short videos and they're, you know, sitting There on social media, just consuming content when they should be working, right? So their life is getting like this is a wedge, that this technology is a wedge that drives some people down and some people up. And that the impact of this over the course of decades is creating a two tier economy, a two speed economy.

[A]

And it's give me percentage of that as your cause of the K shaped economy.

[B]

Like I think it's right up there with the deflationary effects of money printing.

[A]

Percentage please.

[B]

Let's go, let's go A third, a third, a third, right, that's the last one. So let's say a third is the money printing, a third is technology and a third is that the amount of wealth in society has allowed people to make stupid, unproductive choices with their lives without realizing that they're making dumb, unproductive choices with their lives. So let me explain that when you get a young person who should be an electrician because the economy needs more electricians, and you get a young person who should be a plumber and who should be building houses and should be being a nurse and should be doing something, that is what the economy wants and needs. But through price distortions, market distortions, government bubbles, that person is able to go and do butterfly fart degrees, right? It's like I'm going to study the farting habits of butterflies this week and I'm going to do a PhD on that. And they're able to deploy their time and resources in unproductive ways while accumulating huge amounts of debt in the process. And if you get that en masse, then you also get a massive investment into unproductive behavior. A massive investment into like an unproductive investment. The trick with investing is you must invest in productivity. You have to invest in productivity gains. It's like the old saying of if a government was to pay one person to dig a hole and pay another person to fill the hole in, technically they've created $200 worth of GDP growth in the economy. But that is not a productive investment.

[A]

If you had to define productivity, well,

[B]

productivity is moving humanity forward. It's actually like you are satisfying real wants and needs in the economy that people genuinely want to pay for. That is making life better, cheaper.

[A]

Why would anybody ever pay for something they didn't genuinely want to pay for?

[B]

Because governments can create market distortions. For example, they can give young 18 year olds loans to go to university to study. Whatever their passion is as a university

[A]

student is government redistributing the wealth. The only way that the Abundance of wealth creates a problem, or are there other ways?

[B]

Whenever money's transferred that didn't involve voluntary trade, that didn't involve a buyer and a seller making rational decisions about making improvements to their lives or making improvements to their businesses, then you get market distortions. And market distortions are essentially rewarding poor productivity. Right. And the classic example is digging a hole and filling the hole back in creates 2. $100 to dig the hole, $100 to fill it back in creates $200 of GDP. But nothing happened. And ultimately this didn't need to happen. No one was asking for it to happen. This was just a fictitious distortion bubble that was created. So I would say there's, there's a three part problem. Technology is creating winners and losers. Government is eroding the value of money constantly. 6%, 7% a year in some cases. And that compounds. And then we're making really horrific, unproductive investments with people and capital in the economy.

[A]

Okay, that all makes sense. Very clear. I am aghast that you call that the third a technological thing. So that part I would say is culture and intellect. I don't think it is. Rightly, everybody has access to the same technology. You're just saying that some people use it poorly. And I would say, okay, I think that's a very strong argument. But to me, that comes back to culture. It's the reason why you have different subsets of ethnicities that will do well and some will do poorly. Even though you look at them, they look exactly the same. So whatever racism they might be facing is neutralized.

[B]

It's also skills training. So when we created the skills, the skills training, the schooling system for the industrial age, we trained people on how to operate within the industrial age. And then we started to get price rises. When I look at your mobile phone, I see a studio in your pocket. I see the ability to communicate value to the world and to build a following and sell stuff and buy stuff and, you know, supercomputer. Other people just see it as a consuming device of just, you know, but they don't have the skills to recognize.

[A]

What, what are you saying that's from education?

[B]

Yeah, I'm saying it's an education system. So, so the, the reason that we have this disparity. Wait, wait, wait. Yeah.

[A]

Are you saying that wealthy people, obviously it's not perfect, but wealthy people are getting a better education than poor people?

[B]

What I'm saying is that when a new technology is introduced, there's an initial period of time where early adopters and people who adopt the skills required to leverage that technology, they get early gains. So, for example, the British are no longer ruling the world because of their steel and guns and ships anymore, because everyone's figured out how to have steel and guns and chips. You know, all the things that the British, you know, we, we no longer lorded over people because we have spinning looms, but we did lord it over people for spinning looms for a while. So now that spinning looms have been democratized, there's no competitive advant in that. But for a brief period of time, those who, like, you know, the hair salon that runs on AI is going to outcompete the hair salon that doesn't run on AI for a brief period of time. And then they'll all run on AI as they figure it all out. But there is an uneven time distribution. The Engels pause was an uneven time distribution between some people figuring out how industrial revolution economy and technology worked and a lot of people going, hey, wait a second, I'm a farmer. I know how to plant seeds and pick crops. Like, I know how to work with a plow. What do you mean I have to go there? Or I know how to be a fine tailor and stitch and thread. What do you mean that a sewing machine can now do this for free? So ultimately, there's an, there is a time lag between a new technology being introduced, early adopters massively having an advantage, and then suddenly everyone knows how to use it and everyone does it. That time lag tends to be. Or historically it was 50 years. Maybe with technology it's going to be 20 years. But there is a time lag where early adopters get rewarded disproportionately and laggards are laggards.

[A]

Yeah, okay, but you're saying that accounts for about a third of why people are falling behind. I get why. This is why I think it was very important that we express. There still may be a difference in how we talk about the K shaped economy, because that does explain why there's a difference between the people that move quickly on technology and the people that don't. It does not, in my opinion, explain why those people are getting behind. The average cost of things which I put forward is 98% of what matters. The 2% of like monkeys banging on cages. Because you're getting a great amount of getting a cucumber.

[B]

Yeah, let me give you, give you. The mechanism is that money moves towards that. That is difficult and scarce and it moves away from. It doesn't move towards things that are easy and ubiquitous. So when someone has amazing mathematical abilities, they are literally called a calculator and they get hired by the biggest companies in the world to calculate mathematics. And then a calculator comes along and no calculators get paid anymore. There once was a typing pool where people would hand handwritten notes to these people who had typing skills and then suddenly everyone can type and then we don't need a typing pool anymore. So what is happening with technology is the K that is partially, it is accelerating those who know how to use it, but it's also devaluing the skills of those who think they've got something of value to offer the economy. But largely it's automated. So here in the uk, we used to have cab drivers earning really great money. Like, like kind of top 10, top 20% of the income level, like top, top quartile or top quintile was cab driver. Cab drivers were in there because knowing your way around London streets was actually given a name called the knowledge. And if you had the knowledge, you could be a London black cab driver. It was a very prized, very difficult job and it was a very like, it was essentially a working class ticket to making a lot of money professional. But then along comes GPS and suddenly Uber turns up and someone on their first day in London can become an Uber driver and they don't have to speak English or know London streets. Basically, if you can just drive a car, if you have a driver's license, you can now have the knowledge and no longer, it's no longer a valuable thing.

[A]

And so you're saying that a black cab driver was making in nominal terms more than an Uber driver, or only

[B]

in real terms, a cab driver in London was a top quintile job. So up until the time of GPS technology and up until the time of Uber and all of those sorts of things, a black cab driver was essentially printing money, doing very, very well.

[A]

Right, then let me abstract the question. Are you saying that if I were to look at the average worker they are making, nominally, meaning the number would be the same. So real. Let's set that aside where it's like inflation adjusted, but just nominal terms. Are you saying the nominal dollar amount is going down?

[B]

Probably the nominal amount is going down for black cab drivers as well.

[A]

Forget black cab drivers, because to me it's like technology just shifts things around.

[B]

If, okay, if the number's the same but the purchasing power is lower, then you're talking about an inflation problem. Right. But also if the value of the work is no longer scarce. Right. If the value of the work is ubiquitous and easy to replace. Right. Like, because think about what technology has.

[A]

What I'm trying to, I'm trying to really get to the essence of what you're saying. So if you are saying that we, the gig economy people are just making less money and it isn't that prices are going up, that's an exacerbating issue. But the reality is even if you had no inflation, you would still be getting people following falling lower and lower on the economic totem pole in the industrial age. Is that what you're saying during the Engels pause? Yes.

[B]

A, a, a tailor, a fine Taylor lost their economic value because of sewing machines.

[A]

Yeah, but I don't care about that because it's completely irrelevant. That guy is going to inflation thing.

[B]

That was you. The value of your skills got eroded by technology because technology simplifies, outsources and automates.

[A]

Yes, but if you take averages, the world is way better off. So what I'm trying to figure out is, are you saying that we have not. We're either in some sort of transitionary period where technology has so obliterated so many people that this isn't an inflation problem, this is a technology problem, which is what I hear part of it

[B]

is a technology problem that you.

[A]

But specifically that I would be able to read in the data as there are now a lot more people with lower paying jobs.

[B]

I'm saying that a lot of people. Like let me give you a really life example. Someone in my family used to be a journalist and that was a super highly paid job. And her job was to write two stories a week. That was it. Five hundred words to a thousand words times two. And had an editor whose job was to edit those stories and had a photographer whose job was to go out and take photos and develop film for those stories. All of that was a very. I grew up in a family where there was a journalist in the family. We had a local newspaper, hundreds of people worked at the local newspaper. Photographers developing film in the darkroom, journalists going out and interviewing people face to face. All of that was a real thing, Right. Unfortunately, that job is just. It's very hard to make the case that someone should be paid a professional level wage to essentially write two blogs a week and to take a photo that I could take on my phone. Right. So ultimately the value, the person, you could kid yourself, hey, I've got these incredibly valuable skills and experiences and you know, like, I should be paid an amazing amount of money because like I always have been. Or you can say I'm sorry, but technology has now made it that anyone can write a story, distribute a story, take a photo, distribute a photo, develop a photo. All of that stuff is just in your pocket on your phone. Loads of people do that as a side thing for free where they publish content all the time as well as whatever else they're doing. This is no longer a job. This is no longer, this is no longer a valuable job.

[A]

Okay, so here's what I hear you saying, please correct me if I'm wrong, that when these technologies come into place, whether it's the industrial revolution, the great Internetification doesn't matter. Same idea that the jobs lower in

[B]

value if they, if they don't adapt to it, if they don't change, yeah, those jobs are just not as valuable anymore.

[A]

Now you just put a caveat and the very.

[B]

A lot of people don't want to adapt.

[A]

Yes. Okay, so this feels important. Important for us to tease apart. Here's what I would say history shows us without equivocation, equivocating, whatever people get what I'm saying. I hope that a new technology comes along. Anybody that's say north of 35, they're toast. It's just going to obliterate them. Most of them won't be able to adapt. And it's real and it's brutal and living through these transitions is super gnarly. But the technology brings about more jobs, new jobs, and from a GDP perspective we're better off. So I look at this and I say, yep, we're. The Internet changed things so profoundly. And there is a percentage of people and this is why the life expectancy in the US is going down, largely because of men dying deaths of despair. And there's enough of them dying deaths of despair that you can actually see it in the overall life expectancy. But GDP is still going up. People have just shifted to other jobs. New kids coming into the workforce are not going I can't find jobs. They're finding jobs. They're different jobs. They might be a YouTuber and they're making way more money doing effectively journalism. So I'm saying that's a very different phenomenon where more jobs have been created by the Internet, by a lot than existed before. So I in no way shape or form and trying to contradict your very astute point that there will be a huge class of old jobs that will just cease to be relevant. And for that person that is a tragedy. And this is why the learn to code became a slur and people were getting so weird but the reality is that the next generation does learn to code. More jobs are created. And so I would say, and if by all means, if you know, or if somebody in the comments knows, if there's data that shows that I'm wrong, I would love to see it. But that if you were to completely strip out inflation, you would not see that technology has lowered the average person's ability to earn a living. They've adapted their new jobs to be sure, but it's been a net benefit. Economically the problem.

[B]

Yeah, economically. But economically is about aggregate and it's about averages. Yeah, but the problem with technology, especially in the short term, when I say short term, at an economic level, you're talking decades, is that a smaller group of people earn way more. So you might say, oh, there's no longer 10 journalists who earn 50 grand each, but there's one YouTuber earning 500 grand.

[A]

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[B]

digital technology that it doesn't distribute evenly on a bell curve. It's very much on a power law. So we like. For example, you can take dating statistics. 5% of people get 50% of the dates. Amazon, the top power sellers get 50% of all the sales. And so it's a. Anything digital is a power law distribution, not a bell curve distribution. The bell curve distribution was largely late stage industrial revolution being distributed geographically and dealing with geographical limitations and essentially requiring factories to average out working pay and all of those kind of things that evolved over a course of 100 years. But early stage technologies do bell curve distribution. Sorry, do power law distributions not bell curves.

[A]

Do you still think we're there with the Internet? Obviously AI for sure. We'll get there in a minute. But are you saying the thing that I'm missing?

[B]

Well, it's in the data, in the, in the data that I've seen the. One of the reasons we have an Eroding middle class is actually. We have a widening wealth.

[A]

Wealthy class based on technology.

[B]

Well, yeah, if you go and talk to anyone who's doing really well, it's not like they're sitting there going, I ignore technology. They're pretty leveraged with technology. They're either leveraged with media, finance or data or IT systems.

[A]

And it's a shrinking number.

[B]

No, it's a. The wealthy. There's a growing number of very wealthy people. Right. Part of the reason that we have a shrinking middle class is because too many. A lot of people are going up. Right. That is reflected in the data. We also have people falling down, but we actually have a disproportionate number of people going up. They're jumping on this technology up curve as well.

[A]

And do you think that will balance out over time or at the level

[B]

of an individual, as you say, there is a catastrophic loss of. I used to be a travel agent. I used to love taking people on trips around the world. I used to love organizing people's trip to Milan and to, you know, France. And it was so great being a travel agent. Now it's all automated and it's all online, and people just go on a website and do it right. At the individual level, the economic function got replaced. The money moved. But to that individual, they just lost this dream job that they loved for decades.

[A]

That part I really understand that. I'm so with you. What I want to figure out. You had a criticism of me, and I want to see if this really is something I'm missing, because it's entirely possible that this is a huge thing that I'm missing. So what I hear you saying is the power law distribution with technology, let's call it the Internet, because I don't think we felt enough of it in AI yet. But the power law distribution of people who can successfully adopt technology is so profound that part of what is driving the split between people that are technically wealthy and people that are doing poorly is the ability to continue to monetize their skill set in an increasingly digital world.

[B]

Yeah.

[A]

Yeah. Wow. Okay. So you're saying if I do the research there, I'm going to see that.

[B]

I think you'll see. I think you'll see that and I think very interesting. I also think over time it then starts to turn back into a bell curve as the technological as. As we hit mass adoption of the technology and provided you don't introduce another new technology.

[A]

Well,

[B]

what we've had is. We've had this. This rolling Internet, personal computer, phone, Cloud, social media, AI. We've just had boom, boom, boom, boom, boom. Right, sorry. Power law. Power law, Power law, Power law. What typically happens is that there's a generation that's left behind, as you say, people who are older, they're more reluctant, more set in their ways, or more entrenched. And then you get a new generation come through and you get a power law on the new generation who are early adopters. And then eventually it becomes ubiquitous, widespread best practices. Everyone knows the best practices. The school system changes and adapts to it. Training and skills is widely adopted. It no longer gives some crazy awesome advantage. And we saw this, by the way, with the introduction of capitalism. So early adopters to capitalism had this unbelievable boom in prosperity and wealth. Right? So we see this with the usa, we see this with, with Britain and Western countries and all this sort of stuff. Unbelievable standards of living at the time when 90% of the people lived in abject poverty globally. And then suddenly capitalism spreads around the world and everyone lifts out of poverty, right. And it. And then boom, there's a new higher standard of living where everyone has a lot of the things that capitalism provides.

[A]

Very, very interesting that is My read on that situation was devastating for the generation that gets hit by it. But the next generation comes along and starts filling those jobs and that it keeps the bell curve. But if the bell curve isn't there, that is for sure a missing piece to my assessment of why people are going up and down. Cool. I'll definitely do the research. Thank you for pushing on that. Okay, so that, that introduces a confounding variable. Obviously we're about to step into the next massive technological revolution, which is AI. So given what you just walked us through, does AI then just make this even worse where we've now got the exponential of all exponentials and it's going to be this really small number of people that are going to do well and everybody else is going to get crushed down or.

[B]

Yeah, I think if we were to zoom out a hundred years from now, now we'll view this entire period of 50 years as a boot period for a digital age or different economy, different. So let's say we were in the year 2150 or 2250, and we're looking back at the turn of the 2000s, we would see this boot period, which is, oh, they came up with personal computers, they came up with Internet, they came up with social media and cloud, and then boom. And then they got to AI and all of this would be the on ramp. And then you'd see the AI adoption and they go, go boom, right? And this would be the big uptick. And you and I, we're similar in age and we're, we, we think we've been living through this like crazy time of like disruption because of all of these new things every five years. But actually it's just the on ramp to AI and it's like boom. Okay, now we're in a very different universe. And yeah, I do think that essentially in the next 10 to 20 years this is a, this is essentially now we're about to hit the liftoff moment for a very new economy, very new world. And we're going to have an Engels pause. We're going to have some people who get it very quickly. We'll have early adopters on the power law, late laggards lagging behind. We'll have two speed economy, you know, all the same things that we saw in the early 1800s.

[A]

Okay. So if we have the ability to look back, see the history, understand how this plays out. Angles pause. People are not put up with it. Like there will be a demand for change. How do we facilitate that demand? So I hear people crying out for change, the call for socialism being exactly that. It's people feeling maybe an angles paws like thing and saying socialism's the answer. The way that you described I thought was brilliant. Which is, it seems self evident to somebody that doesn't necessarily understand economics. They just say we'll take from this guy who has a lot give it to other people. So you've given us sort of the individual answers in a pre AI world. Does AI change your calculus and is it take from the people that are, you know, employing now robots and AI and say listen, we're going to have to UBI this, like we've got to distribute this wealth around or is there a different solution?

[B]

Yeah. So in the early 1800s and it was multi decades, it was 60, 70 years of transition from the time that Adam Smith wrote Wealth of nations through to the end of the Engels pause was I think, think 60 years, something like that. So it was two, it was two generations of people, almost three generations of people before we got a new schooling system, before we got a new government. So we had the great Reform, which was a government political change, had the compulsory schooling system which was a skills change. We got floating companies, the Limited Liability act, which was a new way of owning wealth, wealth and, and sharing wealth was through limited liability companies. So we actually introduced new thinking, new technologies, new paradigms and we ended up with Socialism and capitalism as dominant economic systems, all of these were incomprehensible to the agricultural age mind. So the person who owned land and was a viscount or baron had no concept of any of these ideas. Like all of this would be completely radical and foreign to someone just, just in the 1760s. Right. And they would understand colonialism, mercantilism, they would understand feudalism, they wouldn't understand all of these other isms that we came up with later. So we have to accept that what we're going to have to go through as we move into a very different economy is this. This is so big, so large that it requires new economic paradigms. Like for example, you cannot fast forward to the future and I don't know how it looks and I don't know how we get there. You cannot have a situation where corporations can be bigger than countries economically and can make up their own rules globally and pretend to be in Ireland and Luxembourg when they want to be, and be doing trade here. You know, essentially I would say that a way to get our heads around it is almost imagine that digital companies are the new forming continents. So there is a continent called Google and there is a continent called called Meta, there is a continent called Nvidia and there's a continent called Amazon and there's King Jeff and King Larry and King Sergey. They're so big and vast in their power that they're actually creating almost new economies, new new continents of size and scale. We notice that they start doing things that governments only used to do. They start being interested in education and training. They start being interested in security and border control and force like, like policing and. Right. So they start getting themselves, they blur the lines very quickly between what governments used to do and what companies used to do, because they kind of are the new continents. We're going to have to have a new way of governing these massive organizations. We'll also have to make decisions around what is common property versus individually owned or company owned property. So for example, if AI is trained on all of our data, surely that's common property, right? Like, like, surely it can't just simply be owned by the company that sucks it all in without asking permission. So maybe we need new common assets that actually in order to lease those assets, leverage those assets. If you're a company, you have to pay into a common pool that gets redistributed to the people who help generate those assets. So we're going to have to start thinking about how does the economy work, given that the nature of the economy has so vastly been disrupted.

[A]

Okay. You did admittedly say you don't see the path, but I'm so curious, do you have any beginnings of even the threads to pull on how we do that? Well, I'll say, for instance, you said something earlier that really resonated with me, which is when it's unearned wealth that I can't remember if you're talking about tax. But I'll say that when it's unearned wealth, it does something very different psychologically. Rich people implode when it's just inherited. They didn't have to do anything to actually get to that point. There's a dearth of meaning and purpose. I don't think UBI will solve the problem. I think that we'll end up right back where we are. It'll be the cucumber grape problem because there are going to be some people that just have the talent wherewithal to accumulate whatever disposable income people have anyway.

[B]

Also, if you think about it logically, if you just give everyone two grand a month and two grand a month becomes the meaningless amount.

[A]

Right.

[B]

You know, like. Because if you get two grand a month and I get two grand a month, great.

[A]

What's cool about that, Right? I want four grand.

[B]

Yeah, well, we, we still keep going like this.

[A]

Yeah.

[B]

And suddenly all you've really done is just given a lot of people two grand a month that they can spend with our companies and our wealth goes like that and they don't get lift off because they're not doing the right things. Yeah, it's transitional. To try and soften the blow and stop people from, you know, to give the basics.

[A]

There's nothing so permanent as a transitional government project.

[B]

Yeah, yeah, yeah. But, but you're essentially, you're not. So you're really not solving the problem. You, you know, like the, the issue is, is that, yeah, you might introduce something that is transitional. The other thing too is how are you creating the two grand a month? So is the two grand a month just simply spent into existence through money printing? Because now you're creating a compounding problem on top of the money printing problem, you know, because a lot of governments, they go, oh, we know how we'll do two grand a month. We'll just print it. It's like, oh, great, so we'll just inflate the value of everything. We'll have runaway inflation and it'll just be out of control. Crazy. Like the only way to actually get your hands on two grand a month is try to Redistribute it. So then you go, oh, we're going to take it off the rich people. And the rich people go, ah, but we're global now, sorry, we're based in Fiji, come and get us in Vanuatu. That's where our server for our servers are now. In the middle of the desert in the Sahara. You know, that's, that's our, that's our new outer space. Right? We're going to put them in space. Yeah, yeah, good point. Right, sorry, we're in space now. You, you know, can't, can't catch us where, you know, sorry, I, I only earn 100 grand a year on, on paper. Sorry. So they, they're going to always have the better advisors, they're going to have geographical benefits, they're going to have all of these kind of things. So trying to redistribute it is going to be incredibly difficult. And then you'll go into, oh, we need to redistribute wealth. Redistributing wealth. Because it's an un realized gain, it's an unrealized gain. Because it's an unrealized gain, you're going to create a liquidity crunch. So essentially you're going to say, oh, we're now taxing people on wealth, but the wealth isn't real, it's just a calculation. So we now have to try and get our hands on the money against that wealth. That's just going to suck money out of the economy. Right? The whole economy is going to become, you know, illiquid because of the wealth taxes. It's going to be this crazy scenario where you're going to choke the economy trying to tax people based on wealth. You know, it won't work. It's never worked.

[A]

Given the things we've talked about today, though, despite that, I think people are going to make a move for it.

[B]

So just quickly. One thing that would work is to regulate that data is a common good and needs to be leased by companies that leverage data. Right. Another thing that might work is that the, the data centers become government assets that have to be leased and that or they're highly taxed assets, like really highly taxed assets. Because they are essentially public works or they're public plumbing. You know, they're essentially, it's like they are the, the, the grid, right? So it's like you basically say if we can choke point around those things that all the companies have to leverage and use, right? So by all means, be anthropic, be Google, be, be all of these, be Cool and innovative. But the data centers and the chips themselves treated as something special in the economy that is a publicly owned good or a publicly public resource.

[A]

Help me reconcile that with your public statements that we are likely to bankrupt the economy, not the government, but that the, the companies themselves are building these data centers at a rate that just cannot be justified by the amount of money that they intake. So if you're right about that then now by being really aggressive in our tax, we take something that's already hyper fragile and we kill it.

[B]

It. Well, so what, what's happening at the moment is we're spending something like 700 billion a year on data center development and about a third of that cost is very short lived. So when you develop a data center you've got the land and the power and the resources that go with it, which long term asset. Right. So obviously that's fine. And then you've got the physical concrete and steel and all of those sorts of things. But then you've got the GPUs. The GPUs kind of get replaced every three or four years and then you have to resell them. And we're going to create a huge economic issue where let's say out of the 700 billion, let's say that only 250, 300 billion has to be recycled every year. That is an insanely high amount of money that only lasts a few years. Of Capex, when we put down railway tracks, they lasted 100 years. Yes, we bankrupted the economy, but we ended up with a 100 year asset off the bat, the back of it. When we did the grid, we bankrupted the economy, but we ended up with the grid. When we did fiber optics, were the

[A]

grid and the railroads done privately, a

[B]

combination of private and government, and then they got privatized because they were going bankrupt. Right. Similar to the 2008 crisis, the government had to step in.

[A]

Okay.

[B]

So the UK bankrupted itself twice with railroads and once with canals. Canal mania.

[A]

What are you guys doing with. Yeah, canals.

[B]

Yeah, we built a canal network from Birmingham to London where you take boats up and down the canals. Yeah, we had canal mania.

[A]

Interesting. I always wondered what those were. You see them in?

[B]

That's how we shipped stuff up north and south. Yeah, we created an internal boating network to move products and services up and down the country with canals. But we bankrupt. It was a big infrastructure project and we sent a lot of people bankrupt as a result. Globally we had a massive financial bubble around telecommunications, communications, fiber, fiber optics going into the ground in the late 90s, early 2000s. But even though it created massive financial meltdown, we ended up with 30 to 40 year assets off the back of it. So we were able to refinance them pretty easily and we're able to get through it pretty smoothly because the long term viability of those assets, the issue that we're about to have with AI is that we're spending hundreds of billions on this AI stuff, stuff. And it only lasts three or four years and then you got to resell it into the market and there has to be a secondary market for that level of spend. Here's what's also happening. And if this sounds a little 2008, you, you, you'd be forgiven for thinking about it. We're repackaging up this data center debt and we're going to pension funds and we're saying, hey guys, good news. Backed by Google, backed by Amazon, backed by Nvidia, backed by these biggest companies in the world. They never go broke. They're AAA rated. Why don't we repackage this debt and sell it to pension funds as a high yielding 6% a year AAA rated pension fund debt. And you guys can, you guys are looking for yield to pay your pensioners. Why don't you just buy these data center debts that are backed by Google? What could possibly go wrong? Right? And what could possibly go wrong is that we build out this massive infrastructure that needs replacing every three to four years and not a lot of people are paying for it. So in the usa, on behalf of every citizen of the usa, if you, if you divide up the spend, it's about two to three grand per person that these companies have spent on individuals. The vast majority of people in America are not paying anthropic. They're not like, it's only like less than 10%. I think, think pay 20 bucks a month, it's like 1% of people might pay 100 or 200amonth. There's a tiny, tiny, tiny group of a few million people globally who are actually using coding tools and burning through tokens and all that sort of stuff. But the vast majority of people, it's like, oh, I need a, I need an omelette recipe. And I wonder what my cat would sound like if it was Eminem, right?

[A]

I do wonder what your cat would sound like as Eminem. I'm not gonna lie. Okay, so you're saying that technology obviously is going to grow, but it won't grow fast enough, not when you have to turn these things over every 3ish years.

[B]

And pension funds are holding the baby. They're going to be holding the baby in a few years time.

[A]

Has that already happened? It's starting to happen. Okay, so terrifying. But that brings me back to.

[B]

It was on the front page of the FT the other day that the banks, big banks like JP Morgan are freaking out about the debt associated with, with data centers and are repackaging and

[A]

reselling it because they don't want to hold it.

[B]

They don't want to hold it and they're reselling it to pension funds. Woof. Right. What could possibly go wrong?

[A]

Well, from their perspective, and not to assume the worst of them, but they're thinking, let me put it on pensioners because they will absolutely have to be bailed out because they vote.

[B]

Yeah. So if you fast forward a prediction, a timeline would be that the government bails out all the pension the government bails out all the pension funds in order to own all the data centers. The data centers are then common goods. That's how we fund ubi. They own the data centers, they lease the data centers to the tech companies. Tech companies pay a certain amount and then that redistributes to people who are not part of the elite class.

[A]

And how do you feel about that? You're like, it could work.

[B]

That could work. Because it's based on value and trade. It's not necessarily a perfect solution, but it's certainly, it's not just dilutive, it's not printing money. It's, it's, it's essentially treating data centers like a common good. I'm not this crazy person who says that there's no role for government. Government can't own stuff and all that

[A]

sort of thing, but you are a crazy person. That said government, you don't want them to get too big because they suck at distribution.

[B]

Yeah, well, what? Well, here's the difference. When it's based on value, ownership and trade, it doesn't need a gun to take it off you. Right? So like, like there is a difference between, for example, if there's a natural monopoly over clean drinking water, and that is a natural monopoly. It's like, okay, fair enough. The majority of that is a natural monopoly. We could have resellers and we could have brokers and we could have different things, but there's a natural monopoly. We don't need 10 different duplications of this pipe under the ground. So therefore it kind of is not a bad thing for a government to own as a public good and then run it as best as it can. It's Going to be inefficient because it's government run. But it's more inefficient to have 10 different companies trying to duplicate natural monopoly. It doesn't require guns and police. The problem with, the problem with socialism is the redistribution angle. Ultimately, here's what, here's what happens. It's essentially a system where all the highly productive people say, I'm out, I'm leaving. And then they start saying, no, you're not. Right. We are going to erect initially legal walls to stop you, taxation walls to stop you, and then physical walls to stop you.

[A]

You.

[B]

Right. We are going to put you to work whether you like it or not. Right. That is the socialist. That's where socialism ends. There's a slight difference with hey, the government owns data centers because they bailed out the data center industries and now they're getting, getting their money back from tech companies. That's based on trade. Right. And it's based on a natural monopoly. You don't necessarily need all of these tech companies don't necessarily have to make the same data center development costs.

[A]

Okay, so that sounds a little wealth, sovereign wealth fundy to me. Yeah, because I'm trying to think of this.

[B]

I'm not anti sovereign wealth fund.

[A]

Yeah, no, that's where I want to go. Because my initial reaction is that I don't want this going in the hands of the government. I don't want them to bail them out. If they messed up, then you let them go bankrupt. And it is what it is. But if it can be done, well, I would love to hear your take. So we talked about briefly Norway. We set them aside, let's bring them center stage. Talk about some of the countries in the Middle East. How do you do sovereign wealth funds? Well, why hasn't America done one? Yeah, sovereign wealth funds hasn't done one either.

[B]

No, no. Crazy, crazy situation. We should have. Like in hindsight, the Norwegians did so much better with the North Sea than the British did. I really, for starters, I really distinguish between natural wealth. So natural wealth. When a country has natural resources, that to me is the family silver. Right? Australia. Absolute idiots running Australia. Total like the worst politicians in the world. The dumbest people in the world that you could possibly put into politics is running Australia.

[A]

Congratulations.

[B]

Yeah, we're great at that. That's one of our specialties. But one of the things we do is we have all this natural gas and in our infinite wisdom we subsidize other countries to take it off us.

[A]

This is like a green policy.

[B]

It's like, so it's, it's. I don't know whether it's corruption or just stupidity, but rather than build a sovereign wealth fund, we just don't even tax it very highly. We just say, oh, we'll subsidize it. Right. It's this crazy thing that it's the family silver. And we're not saying this is family silver. It should be that if the family silver has to get sold, you can sell it one time. Right. It's not a renewable, it's a one time thing. That money goes into sovereign wealth fund for all future generations. We have this woman called Gina Reinhart who is through corruption, her I'm gonna get sued. Through luck and good work, her grand, her father was able to get all these mining rights in South Australia. And she's like a gazillionaire. And it's crazy that we sit there and say, oh yeah, she can make a ton of. She can make so much billions selling the family silver that is essentially the dirt beneath the ground that can be sold one time. Time in my mind, natural wealth is a family silver asset. You can sell it once it belongs to everybody and it's for future generations, it's for all future generations. That makes total sense to me.

[A]

Okay, so data, I would say, is a little bit different of a category, but.

[B]

Well, maybe, maybe not. Because data is a one time asset. You suck it up and process at one time. It's all the data of everything everyone has ever written. It's all the words on the Internet. It's all like, it's all the photos, it's all the images, Right?

[A]

Yeah, but we create so much per day.

[B]

Yeah. And it is a natural common asset. Like it's essentially like it's kind of dripping off you right now. Who's to say that just because Facebook hoovers it up or someone else hoover's it up, who's to say it ceases to be yours? Right.

[A]

How are we going to stop China? We're going to derail on this. So let me just say on the

[B]

economic part, I'm just saying data could be thought of as a common asset.

[A]

Okay, so let's just take that frame.

[B]

Let's just simply say this idea that hoovering up everybody's data and turning that into a data set that you can train algorithms on, there's an element of that that feels like it's a common good.

[A]

Okay, perfect. I will grant you that for sanity's sake. So we have this sovereign wealth fund. Now how do we stop? How do we do the sovereign wealth fund in a way that works and doesn't derange the government and give them, you know, extraordinary power that they end up abusing? And how do we do it? Well, because when I think of nations, I'm setting Norway aside, just I'm not as familiar.

[B]

Norway's a great. Norway's a great benchmark.

[A]

Compare and contrast Norway with like the Middle east, where it's done, where there are these dynastic families that run everything and they basically give people enough money to keep them quiet and then a little slave labor on the side because you're not a citizen, so you get nothing, but we import you for cheap labor. Like that doesn't strike me as.

[B]

There's something called. Yeah, look, there's something called the curse of resources, which is also. Australia has the curse of resources. The curse of resources is that because you make so much money off this stuff that you end up becoming, you end up creating unproductive citizens. Life is too good. It's. It's the curse of being born into a wealthy family as well, that ultimately you don't end up being highly productive because you don't have to be. Especially if you're also in a desert. Right. The truth is that if you live and work in a desert and it's bloody hot and there's not a lot of natural resources going on, you are not motivated to get out there and work hard because your body is telling you to conserve energy and not move around so much, don't leave the air conditioning. So the combination of those factors means that you don't end up with highly productive people. You need to work very, very hard to educate, train, build industries. Dubai has worked incredibly hard to try and build industries outside of oil and gas, you know, so.

[A]

But doesn't that just come down to the leadership?

[B]

Yeah, it comes down to competence and leadership. Yeah. But you, essentially, the, the best practice is that you leverage your sovereign wealth fund to invest into skills training, infrastructure, a platform for people to do well if they want to work hard and do well, and that you try to avoid as much as possible, purely and simply paying people to exist where there is no incentive to work or do anything. Production.

[A]

Okay, so is that what you consider the most likely outcome in this scenario in terms of the west, broadly?

[B]

Well, I don't, I, I don't necessarily believe that we'll end up with the West. I think we will. So, you know, you talk about China versus usa geographical countries. I think we're actually moving towards tech economy versus, like digital Tech AI economy versus traditional industrial economy. And it's less about geography and more about these two worlds that exist on top of each other. That you could be in the USA and be completely impoverished because you're just disconnected from that tech economy, or you could be in the middle of Vanuatu, but you're running a tech business and you're, you know, making a ton of. Ton of money. So it's less about geography and geographical borders. It's more about. About, are you running on this system or that system? And where do I think we end up, I mean, I think we end up with a very new set of rules we'll need to reform. Like, same thing that they did back in the 1800s, reforming the amount of political power individuals have and where they get their political power from. New economy assets. Who can own them? How are they owned? Do we all own them? Them? Can we earn into more of them? Which is very human. It's very, very, very human. One of the last things Hayek ever said is that the reason we can have billions of people alive is property ownership. Without property ownership, he said, the entire economy will fall to, like, the world population will starve. If you take property ownership away from people, the idea that you'll own nothing and be happy. Humans are not built for that. We, we are, we love games where we can, we can get ahead and win and own stuff and have stuff that is ours. Right. It's so built into our nervous systems. So it's like, can we create games where people can earn into more and succeed if they, if they do that? And then education systems, we need to have new education systems where kids are taught all the things that are currently wrong and that you're punished for. And the current education system, we need to make them right and that you're rewarded for. Oh, you're an attention seeker. Well done. Congratulations, Tom. You're an attention seeker. You've got 4 million followers. Followers. That's a good thing. Oh, you like to delegate your maths homework to a cfo? That's pretty smart. You should delegate your maths homework to a CFO who's using AI to do maths homework while you go off and do something else. Oh, you like to work in teams as opposed to taking exams on your own. That's totally normal. We like, we like people doing that sort of stuff. Oh, you're not a square peg who fits into a round hole, you know, you're not a, a replaceable part. That's perfect. We want you to be different and unique and divergent from, from the norm. That's perfectly acceptable. So we need a school system that basically says here's how you understand what you're unique at and your skills and who you would partner with and how you would be more enterprising as opposed to industrial labor. And yeah, so we'll need those three big changes that they discovered upon back in the early 1800s. Education system, political system, ownership system Daniel

[A]

well, this has been insanely interesting.

[B]

It's great fun.

[A]

Oh my God. I really enjoyed my time with you. This was the most engaging. They've all been wonderful. But this, this was special.

[B]

This was fun.

[A]

Where can people follow along with you?

[B]

I'm on most of the social media platforms and Daniel Priestley, I've got a new book out called Lifestyle Business Playbook, which is about how to leverage the tools and technologies to have a fun freedom and flexibility in your work and yeah, all of those sorts of things.

[A]

God, we got to get you to write a book about the economic path forward. Be great to get your mind on that.

[B]

Start working on it.

[A]

God, I hope so, boys and girls, if you have not already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Peace. Let's talk about a pattern that is guaranteed to be killing your progress. You know what you need to do. You need consistent nutrition. We all do. You need vitamins, probiotics, greens. We all know that we should be doing more of it. When your morning gets chaotic, you skip it. When you travel, you skip it. When your routine breaks, everything tends to break and that inconsistency compounds against you every single day. AG1 is designed to solve the execution problem. One scoop 8 ounces of water and you're done. You're getting 75 plus ingredients, vitamins and minerals, pre and probiotics, nutrient dense superfoods. Everything that used to require six, seven different supplements and perfect planning now happens in one drink that takes about 30 seconds to make. Right now, AG1 is giving you $87 worth of free gifts with your first subscription. You get a welcome kit, travel packs, vitamin D3 plus, K2 and flavor samples. Click the link in the show notes or visit drinkag1.comimpact to claim this offer.

[B]

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[A]

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[B]

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[A]

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