As someone who came here at 15 or 16, I

would just love to hear you speak for a

few minutes on what you're seeing and

what your thoughts are.

>> I'm pretty worried.

Not to sort of go all dark immediately,

but

I think

people without the benefit of

questionable benefit of growing up

in

the collectivist paradise to quote the

current mayor of New York, don't

understand just how corrupting it is.

The ideas of socialism are amazing. This

you know, me for my fellow men and share

and share alike and do the right thing

because it's the right thing to do not

because there's a financial incentive to

do it. All those things sound amazing

and so it's seductive. The idea of a

workers' paradise without the greedy

lenders, capitalists, bankers, all all

the sort of things we were fed as

children or I was fed as a child in

Soviet Union.

At first blush, you're just like, "Yeah,

I make sense. People who work hard

should have more and people who

are

great, even though they're not capable

of producing valuable things in society

because they're good people, should have

everything that I have even though I'm

working harder than they are." Then

those things sound pretty good, but they

inevitably require a bunch of structural

change that just does not work thanks to

human nature and many obvious things

like it.

For example,

one of the greatest kind of

mental images I have from growing up in

Soviet Union is if you went to a

government-owned store and every store

was of course owned by the government,

you would very quickly notice that the

people whose job was to sell you things

from behind the counter were always very

fat.

While everyone you knew in your life

were always very skinny.

And you're just like, "This doesn't make

any sense. Like how did these people who

happen to work in food stores are always

really well fed? It's like, well,

because they're stealing. Like, they

get access to the food. And it expands

the notion of this idea of everybody

just pulls all their work product into

one big pool, and then someone's in

charge of fairly distributing it to

everyone who needs it. From each

according to their abilities to each

according to their need is kind of the

socialist/communist motto.

And it works great, except people who

are doing the actual redistribution get

to keep a lot for themselves. And

doesn't matter how

honest they begin that journey, by the

time they get to real power, they become

profoundly corrupt and steal and keep

and redistribute primarily to

themselves. And so,

that alone is just like an indictment of

socialism that you cannot get around.

But, it gets worse because

markets, free markets, capitalism, you

know, whatever term you want to use,

inherently forces competition.

If you believe you have a thing that you

can sell at a lower price than the other

guy,

you get the market's attention, you get

the business that's available to you

because the thing is worth buying by

someone, you're going to work on

creating a margin for yourself by

lowering the cost of production, finding

efficiencies, finding some ways of

making the thing cheaper for you and or

cheaper for the buyer so you can compete

on price. So, all those things cannot do

not exist in socialism because it's all

centrally planned. We're going to make

this many widgets, and then we're going

to have someone redistribute them to all

the right people, full stop. And what

happens is there's never the pressure to

improve. And so, you always make stuff

at the government mandated cost, and the

government mandated price is what's

being used to sell it. And so, you have

natural stagnation. You have a system

that rewards graft, gives power to

people who are most likely to become

graft driven,

and prevents anyone else, talented or

otherwise from trying to innovate and

improve the efficiency of the system

itself. And so it just does not work.

And the thing that worries me in the US,

you know, and and the world, this this

isn't unique to

to us here,

is the headlines that make you feel

like, "Wow, I would love to live in the

world where everyone is fed and everyone

gets more or less the baseline of good

living."

is very compelling. Like it is easy to

agree with.

The recipe for that remains to be the

best recipe we know, the best recipe

we've discovered as humanity, is

capitalism, a force for constant

creative destruction where you build the

next thing better than the other guy.

And yes, his business may be put out

because your business thrives, but the

beneficiary is the buyer or the the user

of the product, the buyer of the widget,

because you're constantly working to

make the whole thing more efficient. If

you eliminate the ability to or you

eliminate the need to create

efficiencies, you just stagnate. And the

death of Soviet Union was surprised to

exactly zero people because we knew,

ask people who lived there

more than most, that nothing ever

changed for the better. Like everything

was the same price, the

government-mandated price, and we were

still using phones that looked like they

were made in 1950s. And when I moved to

the US, I was like, "Oh, you have

buttons on your phones? That's amazing."

Like we still did

Like the the clicky rotary.

>> Yeah.

>> Yeah.

>> And so anyway, I can't say enough how

the seductive story of socialism really

appeals and I can understand why,

but

>> [snorts]

>> you know, if I if I didn't have my day

job, I'd spend a lot of time screaming

from every street corner, don't don't

fall for the trap.

It's a surefire way of getting to no

progress at all.

>> So, a firm, you know, on some levels

is a I don't want to say response, but

it's a solution that replaces

potentially predatory practices, right?

And we're going to get to that. But I'm

wondering how you would explain the

current apparent wellspring of

attraction to

just to keep it simple, socialism in the

United States. Are there structural or

systemic problems that have contributed

to that? Is it mostly sort of demagogues

using whatever talking points they think

they can

leverage to attract votes, etc. What is

the cocktail? What are the ingredients

in the cocktail that are contributing to

this current phenomenon in your mind?

>> I'm confident I don't know every strand

of this particular disease. So, it's

it's it's a complicated issue and

I think

it is definitely the case that the

brochure looks great.

The storytelling of do you know someone

who's poor? Do you know someone who

deserves better? Do you know someone

who's been laid off? It is the case that

capitalism can be profoundly unfair, at

least to an individual. As as a system,

as a way of improving the world, it

works amazingly well. We've not created

anything better. But

you get thrown off the bus if you

build something that gets outmoded or

outcompeted by another participant in

the market, and it can hurt. And for an

entrepreneur, it looks like failure,

which we are wired to accept, but it

still hurts.

For a worker, it looks like being laid

off, which could be catastrophic for a

family.

For

people who sort of misinvested their

money or something went wrong, it

doesn't taste good. And so, the idea of

social safety net, the idea of welfare

is natural. You hate seeing your fellow

men and women starve or not do well. So,

I understand

the definition of the problem and the

notion of income inequality and like all

the things that we see in Silicon Valley

firsthand

is very real. It's not like how are you

complaining like there are a lot of

people who are not doing well and every

new disruptive change from

you know, the Industrial Revolution to

the AI Revolution, there's always

someone on the receiving end of the

efficiency because their work is no

longer required or their products or

their ideas are no longer relevant. And

so, socialism is a compelling story of

how to protect those people, how to

prevent them from suddenly being on the

outskirts of society or worse.

And I think there's definitely a lot to

do to make sure we don't leave our

fellow humans behind. Certainly my love

of capitalism and free market

does not

obviate my humanity. I care about people

just because I am also human.

And I see it as part of my job to ask

the question, can we do better? Can we

provide the social safety net for

everyone? We're creating more and more

efficiency, we're creating more and more

value. There have to be ways of helping

people who are thrown off the bus to

make sure they don't end up in the

gutter. And I happen to have some

solutions that I love and solutions that

I think are worthless. The idea of let's

concentrate it all in the hands of the

government, give a handful of people the

right to redistribute it all

and we'll do better doesn't work and I

lived to tell the tale.

I do think that things like philanthropy

is profoundly important and the more

disruption we're going through as a

society, the more important philanthropy

becomes and I think in that sense

I'm not in the specially outwardly

religious, but I think

religion provides a really useful set of

frameworks around how to think about it.

You know, every organized religion has a

version of what it means to be

philanthropic and the older I get, the

more I start

respecting the thought that's sort of

been aggregated over the thousands of

years that most religions existed.

So, I think that's super interesting and

important and

worth

participating in.

On the other side of it is, I think

capitalism in particular

has created opportunities for products

to develop where

the sort of

optimizing up into the right of the

most profit at lowest cost

ends up building products that are

actually devolved from not just their

economic platonic ideal, but societal

ideal.

And I don't think we have to compromise

by saying, well, you know what? I don't

actually care that this is harmful to

someone because it's the most profitable

market efficient thing to do. And my

theory for a long time has been that you

can build products, certainly financial

services

that are optimal not just from the lens

of most profitable, but also most

societally beneficial. And that's not

uniformly distributed. There's plenty of

products that look like predatory

lending and all the other things, or

just sort of make money because the

underlying customer doesn't understand

what's going on, doesn't have the

capacity to deal with the complexity of

the math involved. Affirm is the answer

to that question. In some ways what we

are doing here is trying to say, look,

you can optimize a product beyond just

making the most money. In fact, it's

okay to make a little bit less money

if you are able to create something

that's societally more

successful, more important, because in

the long term, I think you will have

retention that consumers will not go to

a cheaper product or a product that is

less profitable for shareholders because

it's so societally important. And so, I

am to at least some extent embracing the

ideas of prosocial product and

engineering. I just choose to do it

strictly through the lens of capitalism.