There is literally no example on planet

earth of a high functioning society

without big government.

>> No, that's not true. Big government is

sucking the life out of small

businesses. And I spent countless hours

with businesses and they're like, you

can't succeed in the UK. As soon as you

earn anything, they'll just tax it off

you.

>> So pop off to Dubai, run the business

virtually, and pay no tax. It's idiotic.

I don't know how you can look at that

and think this is a good system.

>> No, no. say what needs to happen is

reduce the taxes and the pressure on the

small businesses cuz everyone in this

economy needs to own stuff. We need to

own a house, own a business, and own

shares.

>> But not everybody can be an

entrepreneur.

>> Correct. Look, it would be wonderful if

everybody owned something. But ownership

starts with earning enough money so that

you can save money so that you can begin

to own something. So the problem is

wages because most people want to be

able to go to work and be treated

decently. I want to earn enough money so

that I can feel secure. I just want to

be married,

>> have kids, own a house, all that. That's

what I hear. I want people and I want

that for everyone. That's gone away.

Houses are unaffordable. Local jobs

don't exist. Technology has cut out all

the middlemen. No one's paying healthy

wages. We have the most unhappy

population.

>> And if you want to fix that, you have to

enact this.

>> Well, I've seen Nick's policies

implemented and I don't feel it's

enough.

>> You haven't seen all of the policies.

So, but we need people to know that the

rules that we grew up with have changed

and people have to learn the rules of

this new economy.

>> Yes. Yes. Yes. I totally agree. And if

you want to get the economy back on

track, the starting point is

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>> Nick, I want to start with your

background and your context so I can

understand your perspective and who you

are. You sold a company for almost $7

billion,

>> correct? And what's so fascinating about

you is you typically billionaires have a

certain narrative and perspective on the

world.

>> You seem to have a very different one.

>> I do.

>> Who are you? Where have you come from?

And what is your perspective on the

world as it relates to the subjects that

you know we're going to discuss today?

>> I was raised in a civic family, I should

say.

>> What does that mean?

>> That means a family that takes uh civic

responsibility seriously. Uh but we were

middle class people and my father

started to work for this tiny uh family

business that uh his his father had

started manufacturing bed pillows and

down comforters which is how I got my

start in business. And to make an

incredibly long story short, I had a

very early intuition uh about the

internet u and uh the role that it would

play in commerce. And as luck would have

it, I had a friend who agreed with that

proposition and his name was Jeff Bezos.

And so he wanted to start an e-

retailer. He was working in New York uh

uh for a hedge fund uh dating one of my

closest friends. And for a variety of

reasons, he ended up sending his stuff

from New York to Seattle to my house and

we started Amazon.com together. But from

that started starting other tech

companies. you know, I've helped run,

you know, manufacturing businesses,

e-commerce businesses. my friends and I

own a bank, you know, like that, you

know, and I think that that very broad

perspective on markets began to inform

an intuition that everything that people

are taught about economics today, that

sort of the conventional view is a pack

of lies and that if you take it

seriously and enact policy on the basis

of it, the only thing that can happen is

that the rich will get richer and

everyone else will get poorer. And uh

you know a signal piece of that evidence

for me sort of a thing that really sort

of galvanized my interest was that I got

a look at the IRS tax tables in 2007208

which showed American income shares in

the history of that and in 1980

the top 1% of Americans shared about 8

and a half% of national income. uh by

2007 that 8% had grown to 22% as I

recall so triple largely as a share of

national income. While the bottom 50% of

Americans their share fell from about

18% in 1980 to 12% in about 2007. And

what I did is I took those numbers and I

stuck them in a spreadsheet and said

what happens if this trend continues for

another 30 years? And the answer is

revolution. You know, it just it's just

arithmetic because you cannot sustain a

capitalist democracy if the top 1%

controls 45 or 50% of income and the

bottom 50% shares five. This is not a

deep political insight. This is just

math. And I and I freaked out and

decided that I needed to devote myself

to trying to figure out why this

happened and how you could how you could

fix it. And so I have been writing about

this and working on it since then.

>> Why did this feel so important to you?

I've heard you talk about pitchforks.

>> Even a cursory reading of history will

tell you that when societies get as

unequal as the societies we now live in,

uh, terrible things start to happen.

This leads to either a police state or a

revolution. And I believe that the

pitchforks are here. I think the Trump

administration is the is the, you know,

one of the canonical examples of a

society beginning beginning to tear

itself apart. And I just think it's the

responsibility of people with power and

resources to do the right thing.

>> Don, same question for you.

>> Yeah, I grew up in Australia and um as a

teenager, I discovered entrepreneurship.

I got an entrepreneurial mentor uh very

early on and I did two years in a

startup and it was really exciting and I

loved it. Um and I felt like I

discovered a cheat code in life which

was entrepreneurship and starting

businesses and small businesses and then

at 21 I went off and started my own

company which was my first agency and it

grew really rapidly. Uh went from zero

to a million in its first year and then

10 million in year three and it was like

this exciting young company with all

these cool young people working there

and living there. We actually kind of

did. Yeah. We actually were in a big

house and we kind of spent a lot of time

together. Yeah. I just fell in love with

entrepreneurship and small business and

family business and all of those kind of

things. And I also 15 years ago started

an entrepreneur accelerator where people

who want to get together and talk about

entrepreneurship and figure out how to

run their businesses can get together

and and figure out how to do that. Um so

for the last 15 years I've spent uh

countless hours with uh 5 a half

thousand businesses all over the world

who are getting together talking about

how entrepreneurship works. And over the

years I've also come to a similar

conclusion that the technological

revolution that we've seen in the last

25 years has hollowed out the middle

class. And I basically said I can't play

by the rules that I grew up in. I have

to learn the rules of this new economy,

this digital economy pretty quickly or

else I'm going to be displaced and

disrupted. Um and I don't have a

fallback position. I I didn't come from

any form of wealth or money. Um I also

didn't take on any venture capital. I

self-funded, bootstrapped uh my own

businesses by cobbling together credit

cards and things like that. And yeah, I

I think one of the things that I really

truly believe is that we are in a very

big danger at the moment that if more

people can't participate in the benefits

of capitalism, they're going to do crazy

things and vote in socialism. Correct.

uh and the pitchforks will come and

inequality is going to be a toxic

corrosive force uh in the economy. So

like I'm a capitalist who wants lots of

people to benefit from capitalism.

That's been my whole shtick for forever.

Um and I just want to include more

people in the benefits of capitalism

before we do do dumb things.

>> And I guess the question therefore is

how how do we do that? The prevailing

narrative and I think one of the most

dominant narratives is we need to tax

people like us a lot more. What's your

view of that Daniel? So it's very easy

to have a bad guy of a rich person. Uh

so you could imagine this billionaire

rich person, right? Nick maybe could be

a bad guy and you could sort of do that.

When I look at the economy and what's

draining it out, um it's it's harder to

conceptualize, but we have these mega

corporations and we have these mega

funds. So here in the UK, all the houses

are being bought up by Black Rockck, a

massive private equity fund that wants

the entire population to be a rental

class forever. And you know, our prime

minister has walked down street

handinhand with the CEO of this big fund

saying, "Yeah, come in and and buy up

stuff um and financialized houses and

that is causing a lot of trouble." And

then you've got big companies like

Microsoft, like Amazon, and they say,

"Hey, we want to do business in your

country, but we don't want to pay tax

there. We want to pretend that we're in

Luxembourg or we want to pretend that

we're in Ireland and we're going to send

something from our British warehouse to

our British consumer, but we're not

really in Britain at that time so we

don't pay tax. And then you got

Starbucks that says, you know, we we

want to do business and sell coffee next

to mom and dad family business coffee

shop, but we have to pay this license

fee for the Starbucks logo and that has

to go to Bermuda and you know, so so

when I look at who's hollowing out the

middle class, you've got massive mega

corp businesses uh that are the

absolutely bigger than we could have

ever conceived them to be. They're as

big as nations now. Um and you've got

mega corp funds which are also trillion

dollar funds. And one thing I'm worried

about is that a lot of people think that

a guy like me who's basically a dynamic

entrepreneurial person or even a

billionaire like Nick is the enemy. And

you know when you get a a James Dyson

who invents a cool vacuum cleaner and

sells a lot of them, that's not the

enemy. When you get Paul McCartney who

writes a bunch of songs and becomes a

famous beetle and makes a billion

dollars, that's not the enemy. The enemy

is the financialization of our homes.

The enemy is big mega corpse that don't

want to pay tax. And that's where we

need to we need to be a little bit more

nuanced and clear who's hollowing out

the middle class and how do we make

policy choices to make sure that doesn't

happen.

>> So you're saying taxing the rich isn't

the answer.

>> Taxing the rich is like a headline that

creates enemies who aren't actually the

enemies.

>> But so let's just say in the UK then if

you were prime minister, would you

increase the tax rate on the top 1%. You

could do that for political reasons

because it would make people feel good,

but it won't change the economy. What

needs to happen is we need a thriving

entrepreneurial class. Small businesses

are the answer. The biggest mistake the

the UK government is making is they

don't see that the 5.7 million small

businesses are their biggest asset. That

we could get those going, that we could

create an entrepreneurial uplift that

would create jobs and it would create

better opportunities. I would definitely

curb the issue that we're having with

these uh mega funds and I would

definitely stop pretending that Amazon

is in Luxembourg and Google's in

Ireland. Right. So those sorts of things

I would definitely do.

>> What about yourself, Nick? Would you

would do you want the top 1% to pay more

taxes? Is that important? So, it is not

true that the richest people in the

United States pay a lot of tax because

the the American tax system is riddled

with loopholes that allow the richest

citizens to pay taxes at a rate of 1/

half of what ordinary people pay. I

absolutely believe that in a high

functioning democracy, the wealthiest

citizens will pay taxes equal to or

greater than the typical citizen. And

that is just objectively not the case in

the United States

>> as a percentage

>> as a percentage. And I think that that

is, you know, sort of table stakes in

making an economy function and a

democracy go. But it is not the biggest

problem. The problem is wages.

So here's the most important

socioeconomic fact in the United States

that the median full-time worker today

earns in the range of $60,000 a year. If

that person had maintained their same

share of the economy since 1975,

instead of earning $60,000 a year,

they'd earn close to $120,000 a year.

That effect, by the way, goes up to the

90th percentile. If you earned $180,000

in 2018, 2020, if you had maintained

your same share of GDP, instead of

earning 180, you'd earn like a $250,000

a year. So in the United States over 50

years the only people who benefited

directly from economic growth and

productivity gains were the people in

the top 10% and the majority of benefit

went to the top 1%. And that is the

problem and that is trillions of dollars

a year that used to be wages for

ordinary Americans and now ends up in

the pockets of the richest people by the

way utilizing precisely the mechanisms

that Dan just outlined. And what we have

done is we have massively tilted the

economic playing field uh uh which once

favored small and medium-sized

businesses and local companies towards

these giant corporations. We used to

have an economy that actively encouraged

small businesses and entrepreneurship. I

mean basically what we call

neoliberalism this set of ideas around

economic cause and effect that came into

force in the 70s and 80s. regonomics,

Thatcherism, all this stuff. Cut taxes

for rich people, deregulate powerful

people, and suppress the wages for

working people. Basically, trickle down

economics. Those policies went in went

into effect in the 70s, 80s, and 90s.

And what happened is a huge shift in

concentration from smaller businesses to

bigger businesses and a huge uh shift in

income from ordinary Americans to the

very rich. And that's the core of the

problem. And of course, I think rich

people should pay their fair share. We

should. It is ridiculous for somebody

who make half a billion dollars a year

and to pay 15% tax rate. Uh somebody who

makes $200,000 a year pays 40. I just

think that's stupid and wrong, which is

which is the case in the United States.

May not be the case here in the UK. But

the bigger problem is wages. And if you

want to get the economy back on track,

you have to address that problem. Dan,

you say that optionality in

entrepreneurship will do more to raise

wages than any government policy.

>> Yeah. So, I believe that optionality is

the is the most important thing. Uh when

someone has lots of options, then they

don't accept terrible conditions.

>> So, give me give me some color on that.

>> Well, if I have 10 companies that are

wanting to hire me,

>> I'm going to choose the best option,

right? But if I live in a town where

there's only one employer, like let's

say there's one massive company that

employs people and you either work for

that company or you're unemployed, then

I have to accept whatever they're

dishing out. So the most important thing

in creating better quality of life is

optionality. We we need lots of

optionality. One of the options that I

want people to have is I want us to

teach entrepreneurship in schools so

that people have the option to start a

family business as one of their options.

They may not take that option, but at

least it's not a mysterious black box

that they that they just don't

understand that that would actually be

one of their uh one of their options.

Also, let's say you had no minimum wage,

but if you had 10 employers and a

limited pool of people who are available

to work at those companies, they're

going to have to bid against each other

to create better and better working

conditions and better and better pay.

Um, so you kind of only need to have

minimum wages when there's not enough

optionality. If there's enough

optionality, it pushes everything up.

>> Is that your view as well?

>> I agree with the spirit of that. It just

turns out that is never the case. So,

there's a lot of economic theory that

sounds a lot like that, but it but

exists in a in a in an imaginary world

where people have um power and

optionality and and in the real world

that actually doesn't ever exist. So can

by way of example there's a there's a

principle of economics the theory of

marginal productivity. Have you heard of

that?

>> No.

>> So that's a theory that is embedded in

the the center of econ of economics

which says that because markets are

efficient the amount of money you earn

reflects precisely the contribution that

you make to it.

>> If I make $15,000 a year that's because

I'm giving $15,000 of value

>> of value in the world. Okay. Correct.

And if I earn $500 million a year

rubbing money together to make more

money, that is a that is an accurate

reflection of the value I'm creating in

the world,

>> which is really central to capitalism,

isn't it?

>> It is absolutely central to capitalism

and is central to economic policym. But

here's the thing. If you understand

where that came from, it gives you

pause. So in 1879, a guy named Henry

George writes a book called Progress and

Poverty in the United States. And

basically it's the first book about

the rich stealing from the poor. And

this book isn't just a bestseller. It is

the best seller in the history of the

United States. And the powers that be

freak out. And JP Morgan brings this guy

John Bates Clark to Columbia University

which is sort of the home of like Wall

Street and stuff like that New York and

says fix this. And so Henry George

writes a book called the distribution of

wealth in which he invents this idea

called theory of marginal productivity

which asserts this idea but he says the

quiet part out loud in the book. He says

look we have to prove to working people

that no matter how much they make

whether it's a little or a lot it

reflects their value because if they

conclude that their work is worth more

than they are paid they will revolt and

kill us all and that would be bad. And

that idea, it will not surprise you to

learn, was very attractive to a bunch of

rich people and got swept up into

economics. And today is a core idea in

economic theory. And it would be true

potentially if markets were perfectly

efficient and all this optionality

existed. But there has never been a case

where that was been true. It has

materially harmed the welfare of most

people because as Dan says, your ability

to earn is related to your power to

negotiate, not some magical number that

the market decides.

>> And it's how easy you are to replace

because if I run an ad for a job and 400

people apply for the job, right? Which

which really does happen. Yeah. I know

this happens for you, Stephen.

uh that that essentially you run an ad

and 400 people so you don't think about

raising the wage because 400 people

applied and they're all good like

they're all really like super qualified

people and this happens all the time in

the UK right now

>> happens everywhere

>> I mean and there are almost zero

circumstances where where workers have

more power than owners and e you know

even Ed even Ed even Ed even Ed even Ed

even Ed even Ed even Ed even Ed even Ed

even Adam Smith in the in in the wealth

of nations outlined this asymmetry of

power And and the thing is is that if

you persuade people that what they earn

is all they're worth, then you've

created this narrative that makes rich

people richer and everybody else poorer.

>> So what's the solution here? Is it to

put a a higher minimum wage on society?

>> Well, that's a policy solution. But if

you if you really want to solve the

problem, the starting point is getting

people to understand economics in a way

that actually reflects

how the how the economy actually works,

not this stylized invention,

dating back to 1787,

that if you take seriously and enact

policy on the basis of it, the only

thing that can happen is that the rich

will get richer and the poor will get

poor, which is a story of the last 50

years.

>> So what is the policy solution?

>> A policy solution is most definitely to

apply a standard which requires

companies to pay people uh you know a

living wage. So the minimum wage is a

perfect example of a great policy.

Another policy in the United States

which is really really important is the

overtime threshold

>> which I don't know whether you have here

in the UK. We do

>> but it's the salary threshold below

which you automatically get paid

overtime which is time and a half here

too.

>> Yeah. 48 hours. Yeah. 48

>> 48 hours is the upper limit of a week a

working week.

>> Okay. So in the United States it's 40

hours. So if you work more than that you

get paid overtime. And so one of the

things so that that standard used to

apply to virtually every worker in

America in 1970 1965 today that standard

applies to less than 10% of workers. Now

why does that matter? Because people

like me at the scale of tens of millions

have turned three 40hour a week jobs

into two 60-hour a week jobs and

pocketed the difference. You may be

doing that here, right? You put gummy

bears in the lunchroom and a and a ping

pong table and you force people to work

60 hours a week and then you can have

two employees instead of three. If you

do that 30 million times, you've taken

10 million jobs out of the workforce.

>> So, do you agree with this, Daniel? This

approach,

>> not as much. Well, here's here's the

issue. I agree with it at one level, but

um almost every solution that Nick has

recommended, the UK's had for the last

20 years. So, we have uh a minimum wage

that is pegged two/irds of the median

and it ratchets up. We've got 28 days

worth of paid s uh holiday every year.

We've got sick leave. We've got

maternity and paternity leave. Uh we've

got uh the ability uh very very

difficult to h fire someone if they've

been with you for more than 6 months.

So, we have this unbelievable set of

workers rights and all of these

recommendations from minimum wage right

through to how how to handle employment.

We have the most unhappy population. Our

economy is not growing. We have a

million young people out of work. Uh we

have no one's hiring at the moment. Um

so it hasn't created those conditions

have not created runaway prosperity. And

that gives me pause to think something

deeper is going on. And the reason that

I think this is that I think we need to

make more participation in capitalism.

Capitalism is about ownership. You have

to own an asset. And if you don't own

anything, if you're just selling labor

in the current economy with digital and

AI and robots and all this sort of

stuff, the real reason that the wages

because what Nick's saying is that the

amount of money people would should be

earning right now is like in the

hundreds of thousands. And what I think

is happening as another major part of

this is that the e- the rules of the

economy have shifted. Technology has cut

out all the middlemen. Technology has

hollowed out the middle class. Uh we

used to go to the video store and the

video rental store used to have 12

people working there and now we just go

to Netflix. Uh and we used to go to our

little local retailer and buy a CD and

now we just go to Spotify and we just go

to Amazon. So it's hollowed out all of

those supply chains that used to create

amazing jobs. The value of the labor has

been eroded because it's very easy to

outsource labor to another country. It's

very easy to simplify a job down to

automated parts uh using technology. So

the fundamental value of actual labor

has diminished because of technology.

Technology has reduced the actual

utility of this thing that we call labor

uh for for 90% of people

>> and it's only going to get worse with AI

>> and with AI and with robots. It's going

to go down. So the if you just simply

say oh this is about lifting work

standards you're going to miss the point

that we can't compete with technology.

Technology is better at this stuff than

we are. And the answer, the solution is

ownership. We have to everyone in this

economy needs to own stuff. We need to

own a house. We need to own a family

business. We need to own shares in the

companies that are growing. So it's you

cannot outrun this. This is like trying

to run against someone who's in a car

and they say, "Oh, you just need nicer

shoes." No, you the shoes won't change

things. We've already tried nicer shoes

in the UK economy and it's made no

difference. Everyone's miserable. So

that's one of the things that I that's

where you and I would disagree.

>> I mean, both things can be true. The

minimum wage in the United States is

$7.25 an hour or $2.13 plus tips. It's

half. It's a third of what it is here in

the UK. Okay.

>> But you have twice the disposable income

that we have. Your median wage is one

and a half to two times what our medium

wage is. We're now a poor country

relative to the US. And even though your

minimum wage is terrible and horrific

and inhuman

>> Yeah. However, it's magically done it.

Your your country and your citizens are

so much richer than ours.

>> Yeah. Except if you consider that out of

that median wage, you have to take

$20,000 a year to pay for healthare,

>> right? Like

>> I think adjusted it's still you're 30%

better even adjusted.

>> I I think if you look at the AIC OECD uh

uh it would be interesting. We might be

able to look it up. I can't remember.

But I I bet you it's about 10%

different. Mhm.

>> Even when you subtract out of pocket

healthare costs and insurance premiums,

the average American worker still takes

home significantly more money than the

average UK worker,

>> the average US salary is around $74,000.

The average UK salary is around roughly

$50,000.

>> Americans pay heavily for healthare. The

average employee in America pays about

$6 to $8,000 a year in premiums and

out-of- pocket costs. Brits do not pay

for healthare because of the NHS. If a

US worker makes $74,000 and spends 8are

in healthcare, they are they are at

$66,000

before relatively low taxes. The UK

worker starts at 52,000 before

relatively high taxes. The bottom line

is the gap in base salaries and tax

rates is simply too large for UK free

healthcare to close. The US wins on pure

disposable income per person.

>> Yeah, there there's no doubt the US has

had a much more successful economy than

the UK. Brexit being, you know, a

catastrophe.

>> Can I push back on one thing though with

the minimum wage or or this? Yeah.

>> The companies that hollowed out the

middle class are big tech companies, big

finance companies, those mega

corporations, and I agree with you, they

can afford to pay their workers more

money.

>> One of the issues that I feel, and this

is what I'm concerned about,

>> is that in the UK, the majority of

businesses that do pay minimum wage,

like a friend of mine owns a pub, and

that pub has razor thin margins. it's

losing money. He's not taking any money

out of it. He's massively impacted by

taxes and minimum wage.

>> So, the companies that I see that are

the ones who have to pay minimum wage

workers and give people the on-ramp into

the economy, pubs, little retailers, mom

and dad businesses, these are the ones

that really do get squeezed out of the

economy. They have razor thin margins

and you put more pressure on them. You

say, "You've got more government

regulations, you got more taxes, and now

you've got more minimum wages." And they

just go, "I've had enough. I can't do

it. And the companies that hollowed out

the middle class, the Microsofts, the

Googles, the, you know, Amazons, they

go,

>> Starbucks.

>> Yeah, the Starbucks, they go, "Yeah, we

can we can absorb it." Um, and also,

we're not paying tax anyway, so we'll

just kind of like do that.

>> So, one of the things that you could do,

one of the things that we recommend is

that you impose these standards

progressively that the biggest companies

have to pay the highest minimum wage,

medium-sized companies pay slightly

less, and small businesses pay less.

Yeah. But even within that context,

ensuring that everyone pays enough for

people to have enough money to continue

to buy stuff. I mean, it's fine and good

to say, "Look, I don't want to pay high

wages in my pub." Uh, but surely the

people working in the pub should make

enough money so that they can go to the

pub themselves and buy a beer, right?

You have to I mean, you know, the

National Restaurant Association in

America is, you know, famous for this.

It's like they want everybody in America

to be able to go to a restaurant and eat

except for the people who work in the

restaurants, right?

>> Can I just say something with your

friend that owns the pub as well?

>> So, say you own Starbucks.

>> Yeah.

>> You own a pub.

>> Yeah.

>> I'm a worker.

>> Yeah.

>> If you're going to pay me more because

you have this progressive minimum wage

and you're going to pay less. I'm sorry,

Daniel. I'm not going to apply for the

job. I'm going to want to go work at

Starbucks. So, is there not an issue

where you're not going to be able to

attract talent because you're not going

to be able to pay them as much?

>> There are there are many reasons why you

would work for a small business as

opposed to a mega corp.

>> But I'm saying you're paying me £4

minimum wage. He's paying me eight.

>> So, do not does he not end up getting

all the the best talent?

>> He might get the best talent. And also

for my pub, I might be able to have to I

might ma match eight, right? So, maybe

it works that I just pay eight, but I'm

not necessarily legislated to pay eight.

So, here's the thing. It's more look as

a small business owner you can treat

there's all sorts of techniques that you

can use to retain people

>> and you're going to have more

optionality

>> as a big company.

>> Yeah. Because you can you are going to

definitely pay me more.

>> Well, being bigger is always better. It

is absolutely true that that high

standard will put pressure on throughout

the economy. But the small pub owner is

also going to benefit from the fact that

all I mean are we using Starbucks

whatever whatever whatever example we're

using all these people now own now earn

so much more that they can afford to go

to the pub and buy stuff. So one of the

interventions that

>> I was part of in the United States was

the $15 minimum wage. We cook that up in

Seattle Washington. And so I spoke to

many many many many many small business

owners who are absolutely terrified by

this because you know look we are all

business owners right and so you can do

a calculation in seconds about the risks

and the expenses of higher wages.

Correct?

>> But what you cannot calculate is the

benefit of living in of operating your

company in a regime where everyone earns

more. Right? and the benefits that occur

to you from that. Look, a ham sandwich

in, I don't know, Somalia cost 25 cents.

It costs $25 in Switzerland. What kind

of economy do you want to live in,

right? You know,

>> what were you going to say about your

friend?

>> Well, the friend who owns the pub, his

pub is actually full most nights of the

week. They have lots of people going

there. The issue is taxes and costs.

He's got a big government in the UK. We

have all of these things. Like

everything that you've mentioned, we

have it and we've had it for 25 years.

We don't have an affluent middle class

that's been created. We have an eroded

middle class. So the actual numbers here

is that my friends, he took no money

himself and the pub lost £180,000 last

year and it's because of VAT and he

feels like he's carrying the weight of

training people in their first job. He's

creating jobs as one of the only

employers in his little town.

>> Um and and also he didn't create this

mess. Amazon and Microsoft and Google

and Facebook and big funds, they are

sucking money out of the economy.

>> We're in violent agreement about this.

>> So, so I just feel like

>> the the issue is like I really want to

make sure that we're super super clear

>> that small businesses are currently

squeezed here in the UK. I don't know

what's like in the US.

>> It's the same in the US.

>> Like they are so squeezed and they are

squeezed by big tech and now AI has come

along. they feel like they have to learn

this new thing and they have to start

posting on LinkedIn 45 times a day using

AI posts or else they'll get drowned out

and they have to, you know, edit videos

and become a Tik Tocker as well, right?

So, it's all of this constant pressure

caused by this tech sector

>> and these big funds like one of the

biggest threats to my friend's pub is

that a big American private equity fund

wants to buy the pub uh and turn it into

a block of flats, right? So like they

want to financialize this this community

asset and he's trying to fight to keep

his pup,

>> right? So what I what I don't want to

have is I don't want to have big

government create a new framework that

that basically squeezes small family

businesses even harder. They all start

going, we're losing two pubs a day here,

right? They're closing down. Um they

they go out of business and then we end

up with big corpse, big funds who can

afford to absorb it and they own

everything. And I also want to be clear

that the reason people are struggling is

they don't own anything. It's not

because of working conditions. They

don't own anything. And if they don't

own anything,

>> no, it would be wonderful if everybody

owned something. Um but but ownership

starts with earning enough money so that

you can save money so that you can begin

to own something, right? Like one of the

lessons that we learned was that trying

to give stock options to everyone in a

company often doesn't work.

>> Yeah, I agree.

>> It's a catastrophe because for 90% of

the workers in a company that their

concerns are immediate and they don't

value stocks

>> and if you give them the choice between

cash or stock options,

>> it's not even close, right? And so

again, I agree with this sentiment. It's

just that I have never seen and I do not

believe there is an existence proof for

it working on planet Earth. What

certainly worked great in the United

States for 40 or 50 years was a set of

standards that required companies to

fairly split the value they create with

their employees

uh through a variety of mechanisms,

unions, which can be problematic for

sure, but labor standards like the

minimum wage and the overtime threshold

and so on and so forth, coupled with a

set of policies to discourage

consolidation and discourage the kind of

exploitation that you have I think very

smartly articulated um so that we can

have a dynamic economy.

>> The only difference that happened back

in the in the time that you're

describing where workers had to be

included is that it was nearly

impossible for a company to outsource

their customer success team to the

Philippines and it was nearly impossible

for a company to come up with a piece of

software that would do 80% of the heavy

lifting of a job. And one of the issues

that we have right now is that when you

put a lot of pressure on on all sorts of

companies, we're living in the age of AI

and robotics where you essentially, you

know, one of the options that companies

have is just the option, well, we'll

just outsource the labor to another

country. We'll automate it. We'll

simplify it.

>> Okay. But those the the rules that

enable people to do that were written by

the same people who are consolidating

industries and and taking advantage. I

mean, you don't have to live in a world

like that. There are other ways to

organize the world.

>> The neoliberals promised that free trade

was going to make all of us richer. And

what it did is it flooded our markets

with cheap stuff from China, but it is

absolutely not clear that it made

people's lives better.

>> Chinese people's lives.

>> It made Chinese people's lives better,

but it certainly didn't make people in

the UK's life better. And it certainly

didn't make people in the United

States's life better. And so you could

have imagined approaching that in a

fundamentally different way. I guarantee

you that if the United States could go

back and do it again, we would have

reought it.

>> We would have reought it.

>> There's a few ownership models that I

think are important that could be looked

at. Number one is a sovereign wealth

fund. So the countries like Norway, uh

Singapore, these countries, they own

natural assets uh in a sovereign wealth

fund. And essentially every citizen

therefore owns a piece of some asset.

There is an asset that is owned through

a sovereign wealth fund. It's a very

successful model. It seems to work so

incredibly well that it's dangerously

well. Um half of London is now owned by

the Qatari self sovereign wealth fund,

the Norwegian sovereign wealth fund.

We're literally losing all of our

property to the sovereign wealth funds

of the world. So the sovereign wealth

fund model is incredibly powerful.

>> Yes. Um,

>> so just for someone that doesn't know

what that is, you you have natural

assets within the company own owned in

part by the state.

>> So the UK did a stupid thing. We

discovered the North Sea back in the '

80s, I think it was, and Norway had half

and we had half of this Norwegian uh

this North Sea oil. And the Norwegians

said, "Hey, we'll just own this in a

fund that all of our citizens will

benefit from, and that will be a

state-owned fund, and then we'll take

the profits of that, we'll reinvest it

into assets, and every citizen will

benefit from those assets." And the UK

said, "We'll just sell a license to

British Petroleum." Yes.

>> Right.

>> We'll make the rich people richer.

>> Yeah. And Australia is so stupid. We

have all this incredible natural

resource, no sovereign wealth fund. uh

Britain when we took over the whole

world or 25% of the world we operated

sovereign wealth funds called the East

India Trading Company and all this sort

of stuff and basically our business

model was sovereign wealth funds for

many many years

>> so sovereign wealth funds number one

>> so that would be one the other one is to

put shares into baby's names so when a

baby's born uh you have a piece of the

stock market like $1,000 worth of shares

>> it's a baby bond idea and

>> Trump's doing both of these things isn't

he sovereign wealth fund and the baby

bond he's calling it the Trump fund or

something

>> yeah well they're They're experimenting

with some version of this right now.

>> Yeah.

>> Yeah. So, if if an a baby by the time

they hit 18 has had 18 years of

compounding of owning that asset, then

by the time they hit 18, they're

literally getting an asset that they can

then turn into another asset if they

want to. Um, that's pretty powerful. And

then the the biggest issue is the

financialization of houses. So if you

take a value of a house, about half the

value of the house is what you might

call the utility value of the house,

which is it's a house to live in and I

want to live in it. And then the other

half the value is the financial

speculation value of the house, which is

how much value does a fund have if we

can rent this out to people for the rest

of their lives.

>> I looked at the Black Rockck thing and

it said the idea that Black Rockck is

buying up UK homes is a is a myth. They

are a financeier, not a landlord. They

provide loans and debt facilities to to

property developers, but they do not

directly own or manage residential

housing stock.

>> Uh Lloyd's Bank is buying 70,000 UK

homes to rent forever.

>> The number of single family homes Black

Rockck directly owns and manages in the

UK is zero.

>> Okay. But he's right.

>> Yeah.

>> Um I I don't know what the details are,

but this is a private equity thing

that's going on in this country and in

the United States right now.

>> Yeah. In the United States, I've heard a

lot about Black Rockck buying a

>> I'm not sure what the entities are. It

may be true. I again I don't know what

>> they come up they come up with

structures to do it at arms length.

Yeah. But um like

>> I guess you kind of own it if you're

financing it is

>> well or you loaned it to a subsidiary or

somebody else or whatever it is. But the

but the meta point here is that homes

used to be owned by people.

>> Yeah. And they bought them to live in.

>> And they bought them to live in. And one

of the nefarious things that's going on

in the west driven by this neoliberal

consensus that the only purpose of the

of of the economy is to make rich people

richer is this idea that private equity

should buy all these homes and turn the

turn ordinary people into this rental

class. Just to confirm, yeah, Lloyd's

Bank are doing that through something

called Citra Living. They are buying up

thousands of new built homes and

apartments to act as a direct private

corporate landlord. Um they view the

structural shift away from home

ownership towards long-term renting as a

major profit opportunity for them.

>> Yes,

>> that's it. They want to have a permanent

rental class that people never you'll

own nothing and be happy is the idea.

And people are not like that. People

love to own stuff.

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>> I want to go back to the central point

we were talking about, which is like how

do you how do you solve this? Because

you've got two different views on how

you solve this inequality. What I find

interesting is the UK has better worker

rights.

>> But it is

>> but you also have much less inequality

here. I mean, just to be clear,

>> that is true. So the US is significantly

more unequal. Yeah. The US top 1% holds

over 30% of the nation's wealth compared

to roughly 20% in the UK. Um, and the US

consistently ranks as the most unequal

of the G7 nations.

>> Correct.

>> However, the US is growing much much

faster. If you look at 209 to 2026, the

US has grown over 100% faster than the

UK.

>> Yes.

>> Um, and the UK is vastly more protective

of workers. We have the things Daniel

said like paid vacation, paid maternity

leave. The UK mandates up to 39 weeks of

statutory pay. The US mandates zero,

which is unbelievably correct horrific.

>> But I mean, one of the things that's

happened in the UK, Steve, is is Brexit.

>> When did that happen? 2016.

>> That's taken that's taken, what has that

taken? Eight or 10% out of UK growth

rates. It has affected unemployment by

4%, productivity gains by 4%. I mean,

the list goes on. So that own I mean

part of part of why people in the UK are

feeling down

>> is this unbelievable mistake that the

country made.

>> But it's the same in Germany. It's the

same in Australia. Germany has

unbelievable workers rights. Australia

unbelievable workers rights. In fact the

USA is the outlier of all the modern

capitalist economies.

>> Absolutely. But we're confusing things.

People are pissed off everywhere in the

world. everywhere.

>> I don't I want the pitchforks to go away

as well, but these workers rights are

not putting the pitchforks away. Like

all of this stuff, we've given this

stuff to Australia, New Zealand, Canada,

uh all of Western Europe, all the

English speaking democracies other than

the USA. USA is the only one that has

virtually no safety nets and no

safeguards. Everywhere else has health

care systems that are much more generous

and welfare systems that are more

generous and like maternity leave. I

mean, it's just inhumane that USA

doesn't have maternity leave. So, all of

that stuff, but we've got all of that,

but we've got the pitchforks here, too.

>> Yes.

>> Um, and this is why I'm saying I'm

really zoning in on the idea that people

need to own a house, they need to own a

business, and they need to own shares.

And it's like if they own stuff,

>> I could not agree more. And I don't know

how to get them there unless they are

paid well enough to to make to do that.

>> Let me tell you an anecdote. During the

George Floyd riots, people were burning

stuff down in the United States. And

there was this fantastic interview with

this woman and the reporter said, you

know, I just I cannot believe that you

don't have respect for property rights.

And the woman said,

>> they've got nothing.

>> We have no property.

>> Yeah.

>> You know, why should I respect property

rights? No one I know owns anything.

Yeah. You know, like, so I am 100% with

you. But I think at the core of it, the

core of it is that inequality is way

more than an economic inconvenience for

the people that it affects. Yeah.

>> What it does is it shreds the

reciprocity norms

>> that make social cohesion and democracy

possible. Yeah. It's this dog eat dog.

You're all on your own. Grab what you

can. I mean, obviously the Trump people

>> and burn the place down.

>> That's right. And burn the place down.

Obviously, Donald Trump has created a

permission structure for the worst kind

of behavior, right? The worst kind of

corruption. Uh, basically stealing has

come back into style, right? And you

know, there's all sorts of reasons that

are generating this malaise, this this

sense of unfairness and lack of control,

right? And and and the thing is I I just

I agree 100% with your sentiments. I

really do about entrepreneurship and

ownership and you know at the end of the

day the cool thing about

entrepreneurship is you're in charge.

>> Yeah.

>> Like you're in charge here

>> but not everybody can be an

entrepreneur.

>> Correct. Correct. And so I do think that

that's a little bit unrealistic.

>> The the issue is is that like 70% of all

jobs that get created are created by

small businesses and not governments,

not big companies. They're, you know,

they don't create jobs. Small businesses

create jobs. And if we just not everyone

can be an entrepreneur, but if we had a

100,000 entrepreneurs who were all

hiring 10 people, we'd we'd have a

million jobs and we'd have 100,000

options for people with jobs. So like I

I don't think that we discount the whole

idea that entrepreneurship is a big part

of the solution. Can I take us briefly

back in time? This is not the first time

this has happened. The K-shaped economy

has happened in the Engles pause.

>> Yeah.

>> So the the

>> what do you mean by K-shaped economy? So

the K-shaped economy is where so a

normal economy is one where everyone

agrees it's going up or down or

sideways. Everyone can sort of say, "Oh

yeah, roughly speaking, it's a good

economy. It's a bad economy. It's it's

rising and falling like a tide." A

K-shaped economy is where it's really

good for some and really bad for others.

It's a disrupted economy. Yeah. Right.

So the top percentage are going up and

the bottom percentage are going down.

Now the headlines that we run today are

the exact same headlines that were run

in the early 1800s in Britain. And it

was essentially record profits for

industrialists and workers haven't had

any improvements. They all like you

could almost take every grievance that

we have today and you could just overlay

it in the early 1800s and you get the

exact same words.

>> Um the solutions uh one of the big

solutions in the early 1800s was we need

to export people. We need to get rid of

people. And what they did is they sent

everyone to Australia. So they they sent

they sent they picked up people and they

put them in in Australia, right? So they

same sort of thing mass mass immigration

or whatever you call it remigration. So

they got rid of people out of the

country. So it was very similar and we

call this the Engles pause but we

understand what caused it

>> 1790 to 1840.

>> Yeah. So what caused it was technology

and it was this new

>> it was the industrial revolution.

>> Yeah. So it's the new technology where

we introduced a steam engine, we

introduced a spinning loom, we

introduced uh tractors, we introduced

all of this sort of new technology and

the owners of that new technology and

the people associated with that new

technology went like that. They leveled

up because of tech and the people who

were not part of that technology went

down. Very simple picture you might want

to have in your mind is a farm that had

a 100 workers farming versus one farm

that had a tractor. The tractor farm

went like that and the all the workers

went like that. It's because of

technology.

>> The interesting thing about the angles

paws is that for approximately two

generations, 50 75 years with the

exception of the owners of capital

basically everybody else on planet earth

went backwards. It

>> was hell.

>> It was hell. Um and what and what

happened is that over time the political

consensus changed and working people

clawed back some of that value through

unions through labor standards so on and

so forth. So one of I guess the essence

of what I want to get to is I mean

something you've always talked about Dan

as well is that if you start applying

pressures on these companies or

entrepreneurs they can just now get up

and leave. And that was quite different

from that era where we weren't dealing

with technological businesses. is we

weren't dealing with IP and those

things. So if you start imposing some of

these measures, will these companies get

up and leave and go somewhere else where

market conditions are preferable? A lot

of UK entrepreneurs are, as we've seen

from some of the numbers recently,

choosing to go work elsewhere. Okay.

Yeah. I think one of the things that

just needs to be acknowledged and put on

the table is one of the challenges you

have here is you have the Europe or the

world has built this incredibly stupid

system where you can operate a business

here, take advantage of the UK's market,

take advantage of the UK's rule of law,

take advantage of the UK's uh

infrastructure,

put your stuff in a box, move to Dubai,

and pay no tax. Right? It's idiotic.

It's just it's just idiotic and

suboptimizing. As an American, I pay tax

wherever I go, right? So, I cannot come

to a place and take advantage of it and

then skirt the laws. So, this is such a

profound

disincentive to do the right thing.

>> Well, yeah. Yes. But the real culprit is

what companies can do because US

companies can do it. You you can't do it

as an individual, but you can set up an

office in Ireland in Luxembourg,

>> which is even worse. and and it's the

corporations that are the bad guys,

>> which is but you have both problems be

you have you have UK based entrepreneurs

who are like well I can stay here and

pay 40% tax or whatever it is right and

just pop off to Dubai run the business

virtually and pay nothing.

>> So what are you saying should be done

with those people that do that?

>> I think that UK citizens should pay UK

UK tax wherever they go and German

citizens should pay German tax wherever

they go.

>> Do you agree? I don't think that will

solve it because it's not citizens, it's

corporations that are the bad guys.

>> Well, it will solve one problem. It will

not This other problem needs to be

handled too.

>> The the the giant vampire squids of the

world are companies that are pumping

money out of the economies and they're

faceless corporations that have figured

out how to play this game. So, for

example, let's take YouTube for example.

YouTube is serving up a ton of videos to

people all over this country and they're

running ads, but that is pretending to

be in some distant place. It's not

pretend. It's not being in the UK. And

what we used to do in the UK is we used

to have a broadcast license. If you want

to broadcast in the country, you pay a

flat fee and you can broadcast. Why is

YouTube not playing a paying a broadcast

license? If they are a broadcaster

effectively uh and running ads, they sit

there and say, "Oh, but there's this and

we shift our profit through here and oh,

we have to I'm so sorry, but we have to

buy our licensing, you know, from this

company over in this other vanuatu or

whatever." It's like, "No, no, no. We

don't care about that." It's like, look

at how

>> you do business in the UK. You should

pay tax.

>> It's just as simple as you you're you've

got this many views and the broadcast

license for you is this much.

>> Okay. So do you agree on both points

then that you should tax corporations

based on where their customers are

consuming and you should tax individuals

irrespective of where they decide to fly

off to?

>> Look, I think in a globalized world that

we live in an individual should be

allowed to make a new life for themsel

if they want to, right? Like so for

example, if I genuin I I I make a new

life for myself in the UK 20 years ago.

I came here from Australia and I don't

want to pay tax in Australia because I

was born in Australia. I paid a million

dollars worth of tax in Australia, but I

now live here. Like my I've got three

kids here and I've got a house here and

my whole life is here. I don't like the

idea that just because I was born in

Australia, it's it's not possible for me

to make a new life.

>> But we have a tax treaty.

>> Yeah.

>> Like there are ways of handling this,

but this ridiculous Look, every rich

person I know in Europe is playing this

ridiculous game of trying to avoid

taxes, right? I don't know how you can

look at that and think this is a good

system. But the issue is you and I both

know it's so easy to just turn this into

a company game. So like for example, if

>> we have to appropriately close the

loopholes

>> like Yeah. But like I just I'm seeing so

many people demonize people like Nick,

right? They go, "Oh, this guy, he's you

know, he's a rich guy and he's like, you

know, shouldn't be so rich." Honestly,

he's not the problem. I'm sure you pay a

bunch of taxes and also you you create

economic activity around you. These mega

corporations do trillions of dollars out

of economies.

>> If we take a mega corporation, you know,

think of one in your head, and we decide

to tax them where their customers are.

>> I was looking at some of the research

and says corporations rarely just absorb

the tax. When countries like the UK or

France introduce taxes based on local

users,

>> tech giants like the like the biggest in

the world immediately raised fees and

prices for the consumer and small

businesses inside those specific

countries to offset the cost. If we had

a global tax system that prevented this,

then they wouldn't do it. They couldn't

do it.

>> If the compliance cost of tracking user

locations and paying to local taxes

outweighs the profit from the region,

companies also tend to simply block

users in those countries or pull their

products entirely.

>> Great. Great. And that opens up a

possibility of a local company to do it.

>> Worse,

>> huh?

>> Worse,

>> maybe better.

>> I was thinking here about the large

language models and I was thinking about

that as an example. If you know if the

UK tried to take on Gemini or Chat GBT

etc we would be using a significantly

worse technology.

>> The truth is that those those mega corps

>> that's accurate though

>> those mega corpse they don't do this

they they want to own the world and they

want to dominate the world. They they're

not interested in cutting countries out

right none of them actually cut

countries out.

>> When do you think you think Facebook is

just going to leave the UK?

>> Yeah. Like they're not going to do that.

So and the other way is how you do it.

So if you simply

>> How do you do that in Australia though

with the news publishing business?

>> They might do it very briefly as a way

to punish political uh disscent but

ultimately they operate globally. They

have a global business model and they uh

essentially too we just need to say I'm

sorry you've had your 20 30 years of not

paying taxes anywhere but we're not

doing that anymore and you know we we

are very good at coordinating when we

want to coordinate and we need to say

the bad guy here I mean it is really

just pulling money out of our economies

and taking it to other other places and

one of the reasons that the USA has

become so wealthy with its stock market

is because it is the end valuation where

all of these vampire squids end up with.

>> If I look at what happened, it was um

Australia I was thinking about um but it

also happened in Canada where they

passed a law called the online news act

requiring tech giants to pay local

publishers whenever Canadian users

shared or viewed news links. And

immediately instead of paying uh the

user location tax, Meta simply blocked

all news content from every user in

Canada because the cost of compliance

just wasn't worth the hassle for one

particular market. And you have the same

thing happen with Amazon where several

US states like California tried to force

Amazon to collect local sales tax simply

because Amazon had independent

affiliates like bloggers etc um living

in those states and rather than dealing

with the complex local tax collection

Amazon instantly terminate thousands of

affiliate accounts. If every state

required Amazon to collect local sales

tax then obviously they couldn't do any

of that. they would have to deal with

it, right? It's just these big

corporations have a massive advantage

over the jurisdictions that they're

operating in because they have so much

more power and so much more flexibility.

So what is the what is your solution

then Daniel to solve for this inequality

problem that we're experiencing because

you know you seem to be less interested

in the sort of workers rights piece

because that seems to

>> we've tried it.

>> We try you're saying we tried it.

>> Yeah. What I would like personally is I

want to see way more small businesses

and I want the government to favor small

businesses and essentially say we're

going to reduce the taxes and the

pressure on the small businesses. We're

going to advantage local small

businesses that are here and paying tax.

Um we're going to create special

economic trading zones if your business

is based here uh and is a smaller size.

We're going to basically make ourselves

highly competitive for small businesses

to show up and do their aame.

>> And what about big businesses? punish

punish big businesses that that uh I

wouldn't punish them. I would just tilt

the pl I'm 100% with him. Tilt the

playing field

>> towards smaller businesses and startups.

You know, I I'm not sure if you've heard

about this thing that uh I just joined

the board of called Enterprise Britain

that that um Brent Herman who does

Founders Forum. Yep.

>> And Steve Fitzpatrick who founded OO

just started. It's called Enterprise

Britain. It's a group of us who have

gotten together uh with the express

purpose of doing exactly pretty much

what you what you describe, which is to

try to make Britain an even better

environment for business, mostly small

and medium-sized businesses. And one of

the great challenges here is to f try to

find capitalist structures that allow

small companies to turn into larger

companies while remaining here and not

fleeing to a better place. But I'm I am

100% in agreement with this. And you can

have an incredibly dynamic, fast growing

economy

where all of the benefits flow to the

people at the very top and everybody

else gets screwed.

>> And you have to do both.

>> You have to do both. I've spent the last

decade building and investing in

companies. And so often the conversation

around marketing budgets follows the

exact same pattern. The budget gets

approved, but then the results don't

come back. And most of the time, the

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I mean, one of the most important

subjects at the moment in society is

artificial intelligence. And we you

probably saw recently Eric Schmidt did a

commencement speech in front of

thousands of students and every time he

said the word stage

>> every time he said the word AI um one of

the things that Anthropic or one of the

leading AI companies said recently is

that entry- level jobs are at risk and

I've got this graph here showing the

decline of entrylevel job postings. I

believe it was on LinkedIn um pull from

somewhere and it shows that they're

consistently dropping and dropping and

dropping. AI is I think about it so

often. I was up late last night trying

to think through some of this stuff

because Anthropic released a report

yesterday showing that the AI models

will be able to improve themselves

theoretically in the future and what

this might mean.

>> How disruptive do you think AI is going

to be as it relates to job losses?

>> You know, I don't think Bernie Sanders

latest idea is terrible.

>> US will own 50% of all the companies. It

is absolutely true that AI has

monetizing for free humanity's

intellectual property and a few people

are going to directly benefit from that.

And I think that um in the same way that

Norway created a sovereign wealth fund

with this enormous asset that they had

uh creating a sovereign wealth fund with

50% of the value created by AI and

recycling that into uh I think it's

unclear exactly how those benefits

should be should be recycled but trying

to find a way to make some of that value

a cushion for the disruption that it

will inevitably cause. I don't think

that's a crazy idea.

>> It's a good idea for China and the US.

>> Yes. Yes.

>> But not for anywhere else necessarily.

It's not going to help Senagal or

Southampton much.

>> No. In fact, it'll damage a lot of those

places. You know, like the Philippines

has benefited enormously by being the

outsourced back office uh for a lot of

small businesses that AI can now do a

lot of those those uh those jobs. Um,

one of the things that I always come

back to is the idea that say the UK has

5.7 million businesses. We have a

million unemployed people. We need

1/5ifth of the businesses to employ one

person. AI does actually make your

business better. Like AI is really good

at helping you with your marketing. AI

is great at helping you do legal

contracts. There are 100 ways that AI

could actually make 5.7 million

businesses a little bit better to the

point where they want to hire someone.

And if we can incentivize those things

to happen, businesses are trained on how

to use AI to their advantage and tax

breaks for small businesses that are

hiring. And we will, you know, there's

actually 5.7 million businesses and a

million unemployed people. That's a good

there's a good match there.

>> You know, um, a lot of people have been

talking about AI agents and, uh, what an

AI agent can do, for anyone that doesn't

know, is it can go on your computer and

it can get any task you want done on the

computer. um whether that's you know

editing tasks or whether it's you know

manual data entry tasks or whatever it

is it can click around on a computer and

do things a lot of the entrylevel roles

were often given are that kind of work I

think my entry level entry- level job

job after I dropped out of university

was kind of doing that kind of thing

there was also a little bit of a sales

component where I'd cold call people and

AI can now do the cold calls too and

increasingly if we just play the rate of

development forward we'll be able to do

those things so if these businesses get

more and more efficient um again it

comes back this an entry- level point is

what what role will entry-level team

members have in these kind of companies.

So what's interesting for me I have a

group of companies small businesses uh

dynamic small businesses we've

implemented AI in all of them and as a

result we've hired people

>> who have you hired

>> entry- level people

>> we've hired some entry- level people who

are augmented by AI so they become more

valuable because of AI but like things

like appointment setting we've ended up

hiring more salespeople because we get

more appointments we we use it with our

marketing and we end up hiring people

who can actually have those final

conversations with people at the very

core of my organ organizations, we have

an AI layer and the AI layer has context

and skills and models and security

layer, right? All all in there and it

spits out amazing information and data

and reports and tells us who to talk to

and why to talk to them and what to talk

to them about. All these things are

happening because of AI.

>> But it doesn't get around the point that

like if you think about Uber, uh DAR has

been pretty clear that the 9 million

drivers they have, I think it is, are

going to lose their jobs in the future.

If you think about the the other sort of

white collar professions we've

described, they those roles won't won't

exist in the future. Well, I should say

those roles will be will be will be

changed.

>> Correct. If I put on my more optimistic

hat, the thing is is that all businesses

operate in a competitive environment and

there are two ways to compete. One is to

be cheaper. The other is to be better.

Right. And the thing about AI is that

yeah, there are tasks that you can

automate away, but one person with good

AI tools may be able to do the job of

five.

>> Mhm.

>> Right. And yeah, you could eliminate

that job or you could keep that person,

give them the right tools and out

compete your competitors.

>> The right tools.

>> The right tools. I think there's an

assumption that

>> I mean this is of course what happened

with computers, right? I mean I'm I am

older than you guys so I I remember when

calculators hit.

>> You had to be there to realize how

freaked out people were about

calculators,

>> right? Like people were talking about

like what are the accountants going to

do and and and will kids learn math

anymore? I mean it was it was like

extremely controversial to bring a

calculator to to to school and then

along came computers and the truth is

that computers didn't reduce the amount

of work that people did they increased

the amount of work that people did and I

do believe that there are ways in which

AI is probably going to do that and so

the job loss may not be as apocalyptic

as it now feels like it may be because

again at the end of the day you have two

ways to choose to compete. If you, you

know, you can get rid of somebody and do

X, but you could keep that person and

have them do 5X and out compete,

>> you know, your competitors in another

dimension. I think that that will be

something that people are likely to do.

Doctors are just going to be better

doctors.

>> I think I I definitely agree that

there's going to be this sort of

augmentation of certain individuals. I

think maybe the difference between like

calculators or computers versus this is

AI is coming into a technological

economy and it is coming in with instant

scale in a way that when when anthropic

shipped their new model last week it

went to all of us at once. Yeah.

>> Everywhere in the world we were all boom

step changed with computers. I remember

the day that like my dad ordered the

first computer for our house and we

waited for weeks and weeks and weeks and

then we got it. It was super expensive

to get one. We unboxed it. I remember us

all stood around it looking at and it

was like this Windows 95 machine that

had like no memory on it.

>> Um so the distribution the sort of

disruption was much slower.

>> The the pace the pace was much slower,

>> right?

>> And I understand that like with my with

our team there's no intent we have no

intention at all to let anybody go

because of AI. We're reskilling people,

training people. However, would we end

up hiring less people, especially in the

near term, than we would have otherwise?

>> I think that's maybe conceivable.

>> Yeah.

>> Um, and a lot of companies, I think, are

in that position where I actually was

speaking to someone yesterday and they

said, "We're just letting the natural

attrition in our call center take care

of the shift, which means they they have

they lose 25% of people from their call

center naturally. They're just not

hiring other people back in." And

actually, Clown's CEO said the same

thing. thing. He said, "We're just

letting the attrition take care of it."

>> I'll give you another example though,

just to counter that. Um, I work with a

husband and wife couple in the north of

England who they had a little video

production agency and like one or two

people who did a little bit of

contracting with them. Uh, they used AI

to create a piece of software and that

piece of software uh helps automate

script writing and a few of the things

that they do.

>> Um, they launched a waiting list for

this. They got 5 a half thousand people