Richard Wolff vs. Jay Martin: Debating the Future of America
Summary
Capitalism vs. Socialism: Wide-ranging debate on economic systems anchored in rising generational discontent, housing affordability, and erosion of the American dream
Employee Ownership Trusts: Guest endorses selling businesses to employees as a superior transition path; highlights Canadian tax incentives and growing U.S. policy agitation to encourage EOT structures
Worker Cooperatives: Positive view on worker co-ops for democratic governance, shared responsibility, and operational discipline; positioned as a pragmatic, growing alternative to traditional ownership
Private Equity Risks: Critique of PE-driven acquisitions for gutting organizations and prioritizing short-term margin expansion; framed as a risk to community employment and long-term performance
Key Companies Discussed: Tesla (TSLA), Toyota (TM), and Ford (F) used as examples in a broader critique of wealth concentration and industry structure, not as investment recommendations
Pharmaceutical Industry: Discussion of outsized profits and marketing-driven R&D priorities; underscores potential for policy/regulatory pushback and social scrutiny
Market/Economic Context: U.S. political polarization, rent pressures, and shifting labor dynamics drive openness to alternative ownership models and changing enterprise governance
Transcript
The younger you are, the more Mandani is your man. It's the end of the capitalist system arranged by the capitalist. >> Today's interview is more of a debate with the esteemed professor Richard Wolf. Now, today we discuss the pros and cons of a capitalist system versus a socialist system. And I felt like right now was the ideal time to [music] have this debate because the global epicenter of finance being New York City just elected a socialist mayor. And I want to discuss what this means not just for the city of New York, but for the [music] future of the United States of America. So today, Professor Wolf and I spar back and forth debating the ideals, advantages, and disadvantages of a capitalist system versus a socialist one. And I would love to know what you think in the comments. [music] Please let me know. Did I do a decent job at protecting my capitalist interest, [music] or am I rife with blind spots, which the professor suggests once or twice in the interview? I greatly admire Professor Richard Wolf and I thoroughly enjoyed this discussion and you please let me know if you would like to see more debates on this channel in the future. Welcome to the J Martin show. This is where we dissect the greatest minds in geopolitics and finance [music] so that we can better understand the world. And now, Professor Richard Wolf. Enjoy. >> This is J. Martin. Is this like a significant turning point for the city of New York or is it what's your perspective? >> Let me go further. I I would argue it's a significant uh changing point, historic transition, whatever words you want for the whole country. I think what you're seeing um is the end now. And I was not willing to say that with Bernie Sanders or with Okaziocortez or the few others that we've had. This is now operating on a scale that I would say the following. We've had 75 years roughly from 1945 until 2015 when anything that looked, smelled or tasted like socialism or communism or Marxism or any of those uh was an absolute taboo. It if you were associated with it, it was the equivalent of committing political suicide. It just you you're out. you're gone. Everybody would pile on with whatever negative thing was associated in their mind with these words and you would be, you know, people would look at the back of your head to check for the horns or something like that. Uh, and that's over. I mean, that that is New York City is an incredibly heterogeneous place. I live here in Manhattan. I can hear 20 languages in any given day. You know, 10 that I can recognize and another 10 that I I can't I couldn't tell you where the where the folks are from. Uh and and and Mr. Mandami coming out of nowhere, you barely known from a a part of Queens that has uh a high immigrant population. uh he's been able to look he he's doing better in Manhattan poly than he is in his native Queens. Every burrow except Staten Island which is a kind of place unto itself um has come out for him. It it it's a level of well two things. One, it's a level of alienation from American politics because I know this sounds trit, but it is my experience. The younger you are, the more mandani is your man. The older you are, the more [clears throat] other thoughts come into your mind. So, it's very much generational and it's very weird because it's not really about socialism. I teach this stuff. I mean, I know what socialism is. I know the different definitions. I can give you a history. Europe, Asia, I mean, that's what I teach. That's what I know. This is not what Americans are interested in. Americans are talking about socialism as a peculiar way to say, "I'm not happy with what's going on in my life in this country at this time. We're not getting jobs. We're not getting incomes. We can't get married. Children is forget about it." You know, on and on. You have a generation of people, two generations, who were taught by their parents here. You live in America, you're very lucky. Here's this thing called the American dream. So, they work hard and they go to college and they do all this stuff and they come out of college and they're told, "Oh, we forgot to mention the dream is gone." These people are pissed. Very pissed. They don't know quite what to do with it. So what they enjoy? They enjoy telling a poster capitalism sucks. Let's try socialism. This is I don't know where this goes. But you you would miss if you think it's all about the attraction of socialism that may come, but that's not where we are now. There's there's two things you said that I want to pull on here. Uh, you know, the first is I just see a couple counterveailing forces, right? At a at a federal level to an extent, you know, half the country seems to have voted for uh kind of a return to American fundamentals. Whether or not that's what they're getting, that was the narrative, right? And you know we can debate that but that's a that's a very counterveilling force to the um the tailwind that Mandami is receiving in New York which is the opposite right and New York being the financial capital of the world uh you know in some context the epicenter of America for many years anyways. >> Yeah. >> Uh to be going the opposite direction of the majority of the country like do you see that kind of dichotomy and what do you make of that? Well, the part the part I would agree with you about is [clears throat] here I would do it in my words. The level of splitting [snorts] in this country is very extreme. Now, um I was born in Ohio in the Midwest. I've lived and worked in the United States all my life. I've never seen this level of disagreement um politically. I just I haven't, you know, I went to school in California. I taught in Massachusetts. I've been around a fairly good bit. Um, something is splitting the country up, but I don't think it's the narratives there. I would disagree on either side. That's why I said this is not a narrative about the New Yorkers are not rushing to socialism. I mean, I wouldn't be upset about it. Where I'm coming from, I wouldn't regret that, but it's not the case. I wish it were. It's not the case. They are angry about just what Mandami talks about. First and foremost, in every bar, in every chitchat in the grocery store, it's rents. It is impossible to live in New York City and work here. If you're a young single person, okay, you can do with two or three others. You crowd into an apartment and you manage, you know, you convert the living room into a futon and you you manage. >> But you're not you're not living what you were led to expect. You just aren't. And it's not coming. There's nothing there's nothing to make you say, "I'll wait five years, then it would you've been around for five." Nothing. Not getting any better. It's getting worse actually if you look around. So these people are not they may enjoy talking about socialism but even that isn't true. They don't they vote for Mami because he's new, he's young, he isn't a stinking old politician in whom they have lost all faith imaginable. Now, when you go to the right, it's really a little different. Here's the similarity. [clears throat] Trump can talk all he wants. They don't listen and they don't care what the they're an the people that support him the real the dieh hard 30 to 40% whatever exactly it is they are to use harsh English they are very angry pissed off people in a way they have a [snorts] lot in common with the New Yorkers they're pissed off that their version of the American dream is also unavailable. They can't do it. The jobs are not, you know, these are people who were once factory workers and Americans look down on factory work, but in fact over most of the last century, the workers who came out best were the factory workers. They had the unions. They got the seniority. They were the ones who who bit who who moved to a better neighborhood. All the rest of that. They were led to believe that their children would continue that story. That's over. Those people lost their job and they're now standing at the entrance to uh Walmart and they're a greeter. have no union, no security, shitty pay, and no prospect of that ever changing for the rest of their life. And they don't know what happened, and they don't know why. And they did everything they're supposed to. And they vote for Donald Trump because he expresses their rage, their anger, their snarling hostility. and you know the uglier parts of American history, the white supremacy and all of that is coming back up. Not because people have suddenly turned against black and brown. No, that hasn't happened. It's really an affirmation that somebody ought to be concerned and give a crap about us, about white male Christian folks. We used to sit at the top of the pile. Now there's no room for us. We're told our hearts should beat for the black and the brown and the women and the immigrants. pardon my Spanish, to hell with them. What about a that that as long as Mr. Trump can keep up the facade that he actually cares about them and that he's going to change their life, they'll go with him. Why shouldn't they? There's nobody else out there. Or let me tell you, let me provoke you. The one person who could get their vote is Bernie Sanders. Mami can't. Kamla Harris can't. He could because he sounds enough like them in what he says that they might. And if they got terribly disillusioned here, I'll make you a prediction which I don't do. If they get disillusioned with Mr. Trump, which is a at this point I would say at least a 50/50 uh chance. If they get this illusion with him, you're going to see them go over to Bernie. It'll blow everybody out of the water. That's what you'll see. I tell I want to remind you of American history. In the the last time we had a crisis like this, it's the 1930s. It's the great crash. October 1929. The economy collapses. Everybody's American dream is thrown out the window, right? grapes of wrath of mice and men. That's the image you should have in your mind. People were astonished. They thought they lived in this promised land and they were now okies, you know, in a jalapy going across the Midwest. And they turned to the left, not the right. They joined socialist parties, communist parties. They voted Franklin Roosevelt, arguably the most progressive president the country ever had. and they reelected him three times. He the most popular. What did he do? He taxed corporations and the rich. He created social security, unemployment compensation, the first minimum wage, and a federal jobs program. I mean, un unheard of. And he taxed corporations and the rich to pay for it. I mean, the American working class went to the left. The idea that it it can't do that or it won't do that or you could never make it politically if you tax corporations and the rich, that's wrong. That's not You don't know American history if you talk like that. And the idea that that happened then it could never happen again. Where do you get that from? If we continue down this road, that's as good an outcome as has as much probability as any other. Look, I I have to agree. And as you were explaining that, I was thinking about, you know, the the biggest podcaster in the world is still Joe Rogan. And over the last few years, he's platformed two presidential candidates. One was Bernie Sanders and the other was Donald Trump. And his audience, the largest podcast audience in the world, responded very well to both of those two candidates, which from one perspective, you can say they're polar opposites. But what you just said um counters that and I tend to agree with you and it surprises me. But I I think you're right and that's really interesting. Now, let me ask you something about the the American dream is gone, you know, and and I want to push back on that at risk of sounding insensitive, but hear me out and let me know what you think. All right. So, [clears throat] >> I understand the the rent issue, the housing and affordability issue. It's a real problem for sure. And I've got a young family, you know, three little kids, a fourth on the way. We're in that squeeze, right? We're in the housing squeeze whether we like it or not. But I think of that as that's my hard, right? That's the hard that I have to deal with. And what I mean is my great-granddad got off a boat on the eastern seabboard and we don't know where he came from. He didn't speak a word of English and had no paperwork. He was hired by a farmer named Martin. He kept the name for himself. That's my last name today. Wherever he left, we don't know, had to have been worse than showing up in a foreign country. The language you don't speak, you know, nobody. That's pretty bad. So, wherever he came from was worse than that. >> My grandpa was a homesteader. He was um he was convinced to move up to Saskatchewan, the prairies, middle of Canada under the Land Dominion Act. if you were willing to move up there um in the 30s, you got a couple sections of land for free because Canada was trying to populate the center of the country. Like barren, prairie, very cold most of the year, frozen tundra. Uh and that's where he moved, right? That was his heart. Much harder than mine. And that's where my dad grew up. My dad was born in 1942. He grew up in a house with no electricity, no running water. If you have no running water and the ground is frozen seven months of the year, he and his brothers would hike down to the river, break up blocks of ice, and haul it back home. His mom, my grandma, would melt it over a fire. That's where 100% of the water came from six or seven months of the year. That was his hard, a lot harder than mine. My point is, I have to deal with housing. I have to deal with that. But, I mean, that's just my hard. That's today's hard, you know, and it's always been hard. Uh, this is just my version of it. But the fact that I can I I couldn't I I didn't like the prices of the houses in Vancouver that I wanted, so I left Vancouver, right? I live in a world where you can make money as a podcaster and travel and be anywhere. I got two brothers in the metropolis. They complained all day to me about how expensive the city is, and I'm like, "Well, just leave." Like I did. You know what I mean? Like, there's options today that didn't exist 5 years ago, 10 years ago. So yeah, it's the dream that you thought material will materialize didn't or it isn't. But there's other dreams available, right? You just have to pivot a little bit and accept that you've got a hard in front of you and everyone always has. This is yours, right? What what's your take on that, Richard? >> I agree with all of that that there are always these these issues. Every one of us lives in the constraints that that befall usually for no reason other than the kind of history you just gave of your family. I could give you a comparable history of my family. And we struggle each of us individually to try to make the best of it and hope that there's a a break here or there or an opportunity that we see enough to grab it and hold on. All of that is correct, but my answer to you is you wouldn't want to create a system that makes it that hard to do. In other words, you might want to think to yourself, what kind of a society are we capable of within which everybody has to struggle? Because that's the nature of life. We're all going to struggle no matter what happens. Even if you're born and very wealthy, look, you know, my wife's a psychotherapist. She looks at Donald Trump and she says, you know, he'd be the kind of person which if he walked into my office and said he was looking for therapy, I would go find him somebody else because there's too much trouble here. I can see it in his face and all the rest of it. So, I agree with you. I want people just to have the best possible chance to do that. I'm not going to answer you by saying, "Gee, think of all the people who don't get the break." >> Yeah. Yeah. >> Unless you want to go in the direct then we would have an argument. If you want to go in the argument that the people who didn't manage to get through deserve no better than they got, then I would fight with you because that I think is that's awful because I know well let me let me be blunt. There's a man named Elon Musk. He currently owns, depending on what you believe,3 to400 billion dollar of personal wealth. He is the the CEO of Tesla. And Tesla, the board of Tesla on which he sits, offered him a 10-year contract for $1 trillion. Now, a man who has 300 to 400 billion is already the richest man on the planet and he's now been offered the richest contract ever offered any CEO anywhere. In other words, the rich are becoming richer. That gives him that gives him >> I argue that's that's evidence that the dream is alive in that there's a guy who built that company from nothing into what it is and created himself that opportunity that the rest of us can look at with this like that is disproportional wealth on a level I can never wrap my mind around but he built it you know and that was the opportunity That was the dream. >> He didn't build it. He built an electric car based on the work of hundreds and thousands of people who came before him who handed him their work in an article, in a book, in a scientific experiment. All of which made what he did possible. He then took it another step. I give him that. Good for him. He used some creativity. He made a step forward. We have that in my profession. I'm a professor. If you do a really good job, if you figure something out, by the way, something a guy like Elon Musk can then make something else out of, you are said, "We're going to give you a professorship. If you're the best of the best, we're going to give you a Nobel Peace Prize or a Nobel Prize. But nobody gives any professor anywhere hundreds of billions of dollars because the money you give is one thing. The work you did is something else. It's obscene to give any person that amount of wealth because look, it's nice for him. I get that part. But it means that $400 billion dollar that were produced by what the society has, the resources, the demand for those cars, the feelings of the people of this planet that they don't want to pollute with with go oil and gas anymore. They want to try an electric car. by the way, in my judgment, an utterly irrational activity of the human race that I bemoan, but I'll be glad to tell you why. But people like them. They're buying them all over the world except except in the United States. Part of our decline, uh, which I'd be glad to talk to you about, too. But if you give him 400 billion, that means other people who have all kinds of needs cannot realize them. People with all kinds of contributions to make cannot realize them because that 400 billion that he already has and the trillion he's going to assemble over the next 10 years is money not going to all kinds of social uses that in my judgment and in the majority of American and foreign people's judgment is way better than having him do a space X or to have 47 uh mansions in New Zealand to retreat to or to do whatever else he wants. By all means, reward his creativity. Reward everybody's. Do it in a reasonable way. The Nobel Prize, $1 million. Give him a Nobel Prize. Give him 10. What are you doing? The rest of it is about capitalism. That's what makes one person have this kind of wealth. Human beings have been making creative breakthroughs forever. That's why we have fire. That's why we have a hundred other things. Okay? We don't need to give him 300 billion to have human beings creative. What we do need, what would help is a decent school system, which we don't have. Opportunities for wait opportunity for people like you to go and solve your problem. your hard problem. Go find a good school. Go find a good teacher. But let's make them available so people like you can find them. I live in a city in which one fifth of the people live comfortably and well and their children have an opportunity. The other four fifths I mean the parents are hoping they don't die when they're teenagers. I mean, we we don't need that, Mr. And I'm willing to make the judgment, right? We don't need Mr. Musk to have $400 billion. What? And I'm a Democrat with a little D. I believe democracy should operate on where we put the resources. He didn't do it by himself. He had the help of an awful lot of other people. We have, you know, let me give you a parable of the story. Imagine a community right by the edge of a river and periodically the river overflows and it floods the town and it's very sad. So the word goes out one evening the river is rising. Uh we all have to pitch in and put sandbags on the edge of the river so that we hold the water back. So everybody please volunteer. Give us a few hours and we're going to stand on a line and each person hands the next person a bag of sand until it gets to their edge of the water and that'll be piled up and we do it and we work all night and nearly everybody in the town helps out and in the town there's a rich person and the rich person says I want to show my appreciation. My house is not not ruined. The water was held back and you people. So, I'm going to give a gift of $10,000 and I'm giving it to the guy at the end of the line who put the bag by the river. What? But he only could put the bag at the end of the river because everybody else did their part. If you want to reward, reward everybody. Reward the community. Reward the spirit of the community. Reward the local clergy if they help to develop that spirit. But what in the world are you doing making a trillionaire out of one guy so he can do whatever he wants by imagining as by the way that lunatic does that he did it you didn't do it. the the the [clears throat] one thing about that parabel parable is that it is assuming everybody carried the same number of bags >> and you know the reason >> well I guess because okay so I was thinking about a a friend of mine a couple months ago who was complaining to me back to the housing market about how this is unfair it's unaffordable housing is a right all this stuff half an hour earlier she was complaining about how it's unfair that she should have to work 8 hour day, >> right? >> Uh I work like 70 hour weeks, right? And so it's, you know, that you you get what you put in to a degree, right? Now, there's disproportionate returns once you climb the ladder. I agree with that. But in terms of Musk's compensation package, I also think, you know, we are not giving him that money. That money is coming from individuals who make a conscious decision to buy one of his cars. They could buy a Toyota or a Ford, but they chose a Tesla or they chose to invest in Tesla stock, but that was their independent decision and they made that decision because of the value they believe that company has created, the product or whatever. Um, and so it's it's not so much that like we're giving him that money, right? Whereas when we do give money in the in the form of government subsidies, handouts, and and expenses, I'm far less pleased with how that money is spent. You know, I I could opt to buy a Tesla and fund Elon Musk's lifestyle to a degree, but that's a choice, right? But I don't get to choose about the $ 31 trillion, you know, the government spent since 2001 on funding wars, bailing out banks, stimulus programs. I disagree with, right? Like there's it's it's bad either way, but at least in one bucket, I have a choice. Like I have I have some freedom there. Does that make sense? What do you think? >> No, I don't think so. Let me tell you why. >> Tell me. Tell me. Elon Musk uses his money to buy the government he wants. The Mr. Trump is president because Mr. Musk gave him $300 million in the final months of that race. If he hadn't given him that money, it's an open question whether he would have won or not. Mr. Tesla, Mr. Musk is like Mr. Toyota. I believe actually that's the name of the Japanese family that owns Toyota. You have a choice among the cars they left standing. They destroyed each other. These car companies they ruined each other. If you start in the 1930s, we had 40 automobile companies in this country. Japan had a whole bunch. China currently has 30 30 companies making cars. They compete in a tremendous struggle in which they actively destroy one another. You are left with the choice they enable you to have. You don't. It's like saying, "I have a choice when I vote. Yeah, I can vote Republican or Democrat because they've made sure that I don't have any of it." And we can see the difference because if you go to Europe or for that matter to Canada, you already see you could have more. You don't have to have just two. But those two we allow to monopolize this situation. So I would argue no, you don't have any any greater choice in the quote private sector. That's part of what the private sector would like you to believe. But it doesn't it doesn't compute. They are making decisions every day about how to allocate Mr. Musk. How is he going to spend his 400 billion dollars? That's going to affect my life. How he does that and yours? Where do we where would he get the idea? Well, >> it's my money. I can do it. No, you can't. We we teach in the university. And I want to come back to that in a minute. We teach in the university that democracy means you can do what you want so long as it doesn't hurt other people. But here's the problem. Everything you do hurts other people. It may help some, but it hurts others. So you got a problem. And you can pretend that it doesn't. That's the American way. We are so desperate to hold on to the little bit of freedom we have and it ain't much that we need to imagine that it is an unaloyed good. I wish there were. I wish there were things that are either good or bad. Would make life much easier. The truth of the matter is it's all jumbled up. It's all mixed up. For example, people like to tell us we have to give the co the drug companies enormous profits. One of the most profitable industry segments in our economy, pharmaceuticals. And when you ask them why, well, we have to do a lot of research to come up with those life saving. Sure you do. You want us to believe that we need to give you that money to get that result. But you know that half the time what you're doing is figuring out how to sell something where the market is. You don't go out there looking to solve problems of health. You go out there looking at where to make a buck. I mean I study the industry. I know they know they're not going to they can the PR but not us. We know. So what? Stop. You're trying to tell us that it's all this good thing you do. It's like an advertisement. We live in an advertising culture. What does an advertiser do? He tells you everything good about his client's project. He never tells you about the bad stuff. He doesn't begin by saying, "Well, on the one hand, these are the virtues. On the other hand, here's a way to car sucks." No, no, no, no, no. And that infects all of us. Our ways of communicating are very complicated. We try to teach our children, give us a balanced view. be able to look at the good side, the bad side, and and then make a judgment. You that's fine, but don't just give us one side and then they grow up and we stick them in an advertising culture that tells them when you're looking for somebody to to have a date with, go up on one of those dating services and tell one lie after another about who you are and what you look like and how much you weigh. Come on. I know we laugh because it is funny but it is also telling. I wanted to mention the universities because I'm a product of the elite universities. I might think like you because I come my parents were refugees. My father was French and my mother German. I speak French fluently. I speak German fluently. English is my third language. I was born in the United States, but my parents were refugee immigrants. If you're if you're that kind of kid, which in a sense you are too, although more generations back, one of the things that happens to you, I don't know if it did with you, but with me, is my parents whose careers and everything were destroyed because they lost everything, uh, they put all of it on me. I'm the first child that was born in the new world. Blah blah blah blah blah. So, I had to succeed. So, I went to Harvard, then I went to Stanford, and I ended up at Yale. I'm like a joke. I'm the poster boy for elite education. >> I have three master's degrees, a PhD, and a BA. I have everything that you're supposed to get out of the American elite education system. I was surrounded at those school at all three of them by an enormous number, more than half of students who didn't want to be there, who were not happy there, who were there because their parents wanted them to be there. And they were overwhelmingly wealthy. They were sitting in that unhappy getting drunk every Thursday afternoon right through till Sunday night when they would have to go back into the classroom and sit there and you know throw paper airplane and whatever else they did. They took up this space that other young people would have died for a chance to sit in that room to get a degree. And you know, being a critic of capitalism, which I am, it's been very lucky for me to go to those universities because every time I've gotten into trouble, I wave my pedigree and it's like garlic with the devil. Vaxs right off. Right. So, I' I've I've learned the benefits, but to tell me that folks get what they deserve in this culture, I've been in too many situations for too many years that you can't I can't I can't go there with you. >> Let me ask you, how do you reconcile this, Richard? So, [clears throat] um, everybody cheers for their small business, right? We all cheer for the independentlyowned, owner operated business, right? The hustler. And in order to succeed at that game, you have to make tremendous sacrifice. And you're definitely going to sacrifice your time. You're probably going to sacrifice your friendships. You're probably going to sacrifice your mental health and maybe your physical health because you're so dedicated to try to lift something off the ground and get it rolling, you know? But if you pay that cost and you're successful, you know, everyone's cheering for you along the way. They want you to succeed. They want the small business owner to win, right? In this mega corporate world, >> careful >> until they actually do. And when that small business owner becomes a big business owner, suddenly the script flips and all of a sudden they're the evil corporate. And it's like, no, that's the guy that you were cheering for. That's the guy that sacrificed. That's the guy that gave up friendships. That's the guy that worked Sunday nights. That's that same person, the one that mortgaged their house to pay salaries to build this thing. And now, is it not time to be rewarded? But more importantly, why does everybody all of a sudden hate me? I'm the same person. I just succeeded, right? I did the thing and the script flips. How do how do you reconcile that? >> You know the answer. Part of the answer is everybody's jealous. Everybody look, we have a word for the jealousy that infects the life of the small business. The word in economics is called competition. When you go into business, sooner or later you're going to notice there are other people doing something like what you're doing or maybe even exactly the same thing. They're trying to make it and they're going to figure out that if you make it, it may make it harder for them and vice versa. They don't mean you any harm, but if they come up with a new way of making whatever it is you're doing and it's cheaper and a better quality, you're going to have to replicate what they did or you're going to go out of business. They're going to win and [clears throat] you're going to lose. Competition has winners and losers. But of course, the way I'm telling the story isn't the appropriate way because the loser will have a different explanation for why he or she lost. You cheated, you did this, you and so out comes jealousy and bitterness, which may be correct sometimes, maybe incorrect sometimes. But the the bo, excuse me, the bottom line is for every story of a little business that makes it and becomes a bigger one, there are probably 50 that didn't. They worked hard. They didn't do on Sunday night. They missed out on the up bringing up their children until the kids were no longer interested and they had that painful moment of recognition which I hope you don't have. I have two kids and I had to learn and sometimes in the hard way how to be there for them in a way my parents never were for me. So I had to learn it from from scratch. But you know the answer. You know that we live in a world where we don't know exactly how the other guy lives. We don't know what sacrifice is. And we look and we see a little. We're friends. We we we go out to dinner occasionally. But you know the details of life are mostly known by you, your wife, and your children in a way that others just will never quite get. So, every one of us tells a story. Why aren't you successful, Uncle Harry? Why did Uncle Joe make it and you didn't? And believe me, Joe and Harry most of the time will have very different stories to tell. That's what what I've seen happen all over and over again. That's why large corporations who have sometimes brought me in to work as a consultant. I look by being an academic in case you don't know you don't get paid the way you do if you're a consultant. If you want to make any money you become a consultant because it pays much more. I like teaching so I stayed there. But when I did the consulting I learned was very painful. I would be hired do a study of X. So I I'd work with a team, a lawyer, an accountant, maybe another economist, maybe an engineer, and we would work on something often for big companies because only the bigger company can afford to do this. And so it would be the vice president of something who would call us in. And I remember the first time this happened, which I will tell you now. We're sitting around at a restaurant, expensive restaurant. He picked up the tab, of course. Um, dinner is over, everybody's having a drink, and my colleague leans over to the vice president and says, "Look, you know, I want you to understand that we're going to figure this out for you, but that there's always a risk. I I don't want you to imagine that because you got Harvard and Yale PhDs running around here that we got some magic and we're going to we're going to remove the risk. Now, I remember feeling awkward. This this you don't talk to a vice president like that because he knows that that that that's not that's not higher, you know, knowledge. The the vice president smiled. He'd heard this all before. He looked across to us and he said, "I can see that you don't understand how this works." He said, "The decision to do this project has already been made. We're doing it. We're hiring you because if you come up with a suggestion to do it, we will be very happy. But the decision is already been made. And the reason we want you to do make a study and we do want you to say it's a good idea is because if it isn't, we're going to get fired unless we have a class A consultants report telling us we should have done this. >> Okay. >> All right. The poor academics sitting around that table had just been schooled in how the world works. We sit there, we're going to do a scientific study and come up with the best estimate of how to and they're smiling there. They were light years ahead of us. That's how it works. So, okay, I want to close the loop on this one uh piece and then I do want to move on to something a bit different. But just to to push that train all the way down the tracks back in my shoes or any, you know, uh small business entrepreneur shoes, you know, you grind it out for far too long and everything takes longer than you want it to. Everything's harder than you thought it was going to be >> and maybe you take losses along the way and maybe they're big ones, right? And >> you know, your your employees are insulated from those, right? They don't know what's going on behind the scenes. Um the the personal, financial, or emotional pain that you're withstanding to hold this all together and maybe the weird, you know, debt deals you're having to string together to make things happen, right? Like the exposure you put on yourself. Um but then eventually you make it, right? And you crest that tipping point. holding on is just as hard, right? But you get to a day in the end of the road where somebody offers you a very large check for what you built. >> And that's the disproportionate amount of money that you suddenly receive all at once. And on the outside, people would say, you know, 50 million is way too much money for one person. You don't need all that. >> But the entrepreneur says, where were you the last 20 years? Where were you? Right? Did you mortgage your house? Right? Like what? Talk to me about this. right? Did you co-sign the loans? Like what where were you the last 20 years? Now you speak up like this is some overnight success but it absolutely was not. Now smaller scale but similar principle right to the Elon tale. So that's I want to close the loop on that and get your thoughts on that end of story. For me, the the interesting uh part of what you say is I if I were a Freudian, I would say your inability to project. In other words, you describe with wonderful clarity and with feeling and you're good at it. Uh your view But you don't seem to understand that the other people that you're comparing yourself to can do exactly the same thing. Let me give you an example. That worker you referred to at the beginning, the one who doesn't have to worry about the finances of your company because he's just an employee. But of course, he does worry. The difference between him and you, he worries about your finances, never knowing about them. You at least know something. You have the knowledge. Is it a terrible risk that we're at or a a one that I can manage? Is it a financial tsunami that's going to knock all of us out here? or can I find you by being the owner or the employer have a level of knowledge and control? The poor schmuck who works for you doesn't. For all you know, he moved from Calgary to Vancouver to work in your factory or your office or your whatever it is. He took his daughter out of the high school in Calgary where she was just making friends that that you know she needs and he yanked her into a new school where she's the new kid and has to make friends from the beginning which is a trauma for a 14-year-old girl or could be. Yeah, obviously I don't know your family so I'm talking hypothetically but the workers make a lot of choices. They take a lot of risks. To work for you is to put my life into your hands. Holy mackerel. Don't tell me I have >> That's a two-way street. I mean, I during those years where I was like, I don't know how I'm going to make payroll. I have people and families relying on me to figure this out, and I don't know what the solution is yet. I'm going to do something drastic and I'm going to make it work and it's going to hurt, but I'm going to find a way, right? And that's what happens behind the scenes because you're right, that is also my responsibility or the owner's responsibility and if they're, you know, uh, you know, if a good person, right, they're they're considering that with sincerity and they take that very seriously that they're employees livelihoods are dependent on them making sacrifices, >> right? But we're talking we're talking in general and the vast majority of small businesses die. Only a small percentage survive 5 years, let alone get big and successful. So the majority of people, the working class, they know damn well taking a job anywhere is a risk. The risk is not just the person who takes the decision to start a business. In most cases, that person has some money since it's kind of hard to start a business if you don't have any. Even if you plan on IPO and selling shares or you plan on getting a bank loan, you better have some because it enhances your chance of getting some. So the workingclass guy at the bar will see lean across to me and say I ri risk every I have no savings account. I yanked my family out of Boise, Idaho to go to to Vancouver to work on Jay Martin's project. I'm glad I did it. I I made the decision. Nobody held the gun to my head, but I'm make I'm taking an enormous risk. And my risk is that he is going to be one of these kinds of entrepreneurs who survives, who makes the right choices, or to use your language, who's a decent guy so that if he doesn't, if he makes a mistake, and we all do, he won't hang me out to dry. I've had to teach generations of students that the argument that the capitalist takes a risk is correct, but so does the worker. And if you weigh the worker's risk to the assets he has to fall back on versus the employer's risk and the assets he has to fall back on, don't be so quick to decide who's in the better situation. >> All right, I hear you. I mean, I'm inclined to say like proportion. >> You're a nice guy to talk to. Really, I mean it. But let I want something to I want to say something. >> I don't get part of the passion you hear from me is I've been a professor all my life. I've been very lucky. I've taught at half a dozen universities. So, I'm like a successful entrepreneur. I I wanted to be a professor. I've been one. I'm I'm on a pension now. I'm well taken care of. I live in Manhattan. Lord knows I'd have to be. But I still have the passion because it is so hard to get an to get an opportunity in the United States even now to talk about this to be able to because what we're doing is we're talking capitalism has virtue. Capitalism [clears throat] has flaws. Capitalism does this well. Capitalism screws up over here. I a normal conversation. I'm not hoping to convert you, but I'm getting a chance to argue. Those chances are rare in this culture. There's no support for them. I mean, I'm exaggerating. There's a little, but there's nothing compro. This is not a level playing field that we're having this conversation on. You haven't heard some of the things I've said. That's not your fault. That's the fault of a culture that doesn't present that to you, which it ought to. And because my wife's a psychotherapist, again, if the employer and the employee don't talk to each other, don't work out their problems, those problems don't go away. They sit and they fester and then when you want it least, they blow up on you. It's not smart. The way we organize business is not smart. We'd be much better off to actually take our commitments to democracy seriously. Let's all get together and make these decisions in a community way. Let putting it all on the entrepreneur, it's not healthy for anyone, including the entrepreneur. The irony is when capitalism goes, and I think we're closer to that now than I ever thought I would live to see, it'll be the capitalists themselves who make the transition cuz they'll want to. I already see it. I consult now on dozens of small businesses, small mom and pop, maybe 50 to 200 workers. Why am I talking to them? They call me. Why are they calling me? They started a business 40 years ago in in Wisconsin or in it's mostly here in the US in Minnesota or or in in you know Pennsylvania. And now they're 65 years of age. They don't want to do, you know, like you, they got up every day. They had no weekends, blah, blah, blah. But they built a very successful business. They know every one of their 211 workers cuz they all come from a 40 mile radius. They were hired by mom and pop. They know each other. They know the names of their children, all the rest of it. How do they What do they do now? They want to get an RV and travel across and go to B in in Western Canada because they heard it's beautiful. Okay. So, they they don't want to sell the business cuz for all they know, the big company that buys it will shut it down, kicking those 20 families to the to the curb. What happened then? So they don't want an IPO because who knows what the shareholders who buy the the major blocks of share what what will they do? They don't want to shut the factory cuz that'll hurt the community. You know what they're going to do? They're going to sell it to their own workers and they bring me in to help them do it. You know what's happening? It's the end of the capitalist system arranged by the capitalist. >> Okay. Um that's interesting. Uh and >> just because um literally last week my accountant was uh teaching me about this new structure in Canada and it may very well exist in in the United States. In Canada, it's a temporary measure that increases the lifetime capital gains exemption. So when you sell your company, you get up to a certain dollar amount tax free. The rest you pay taxes on. Um it effectively 10xes that amount that you can receive taxree if you sell your company to an employee ownership trust. Yeah. >> Right. So that's I think what you're talking about and the reason I was just curious what why they were doing this. Why is the government presenting this option for business owners? And the reason is is because in Canada right now, three out of four private companies are looking to exit, right? Owners are in their sunset years. They want out. Three out of four. And I imagine the stats are similar in the US. The majority of purchases happen by private equity. And when that happens, typically the next step is to gut the organization and juice margin, right? And the track record of private equity managed companies is incredibly poor. Uh because they're not incentivized to, you know, perform for the next 10 years. They're incentivized very differently. >> Exactly. I could tell you the same story this way. Yeah. >> Okay. Okay. So it just struck me interesting because I just learned about this new structure and at present it's available for the next two years in Canada and the idea is that the government wants to create quick decision-m so get this structure set up get your company into the hands of your employees do it now. Um the opportunity won't last forever and they're trying to transition a bunch of businesses into employee ownership trusts. That's an initiative happening in Canada that was just announced very recently. There's agit, just so you know, there's agitation all over the United States to do very similar things either on the federal level, there are some people trying that, or uh each of the 50 states try to set it up on the state level uh to do it. Some states already have laws left over from the populist era, the late 19th century when uh co-op movement was very strong, particularly um on the Canadian border, you know, Wisconsin, Minnesota, Michigan, all along there, there was a huge social movement of of farmers to get together into co-ops and they were strong enough to get the law written. So for example, if you uh leave if you sell your business uh at an advanced stage your age, then you can you will get a lower tax rate if you sell it to your workers than if you sell it to anybody else. Uh then there's another law legal arrangement you may have heard of. It's called the right of first refusal. And what that means is uh the law says the employer family has to offer it at a fair price to their workers. If the workers don't accept it, don't don't buy it, then they'll be free to go and do it with anybody else, but they have to give the right of first refusal to the workers. This is another way of encouraging that deal to be made. Interesting. So, [clears throat] by the way, you know what it speaks to? It speaks to all of these feelings. Workers, you know, workers aren't stupid. They know that you can make a mistake. They know that supply conditions can change on you and demand conditions and Lord knows what. you know, look at the crazy stuff between the United States and Canada now, which must affect most Canadian businesses sooner or later, one way or another. So, one way is to have the the entrepreneur, the the owner make the decision how to navigate. >> The other thing is to have it done democratically. If it's done democratically, then all the workers, you know, they got no one else to blame. They don't they won't get angry at you. They made the decision. they were in on it and they got to go with it. You know, win, lose, or draw, they've got to have a a they get a piece of it, but you get some shared responsibility. And you also get, I can assure you of this, the worker in a worker co-op on his way out at 5:00 who notices that the light in the bathroom is still on, [snorts] stops, goes into the bathroom, flicks the switch cuz it's his company, too. I >> I'm I'm I want to believe you, but I'm I'm inclined to say that's a generalization, and some people are just lazy. Yes. And a lot of people are but but also like you know I I don't want to say that very few people should be leaders but I would say that very few people actually want to be leaders. I think the majority of people want to be led. They want a simple path forward a predictable path forward. somebody else to face the big decisions, face the tough consequences if things go wrong and provide them with a bit of certainty and predictability and a clear path, right? Um, now that that may be an unfair thing to say, but I I think culture reflects that. The other problem I would see with a democratically run company is the massive case studies we see all over the world. I mean, you know, has this led to uh let's look at the US, right? I mean, we we we pivot back and forth, left and right, every four years. We're incentivizing our leaders to offer us short-term promises because nobody wants what what is better for us, which is short-term pain for long-term gain. Anybody who knows the big prize comes with pain at the beginning. But no politician's going to win by promising a society it's going to be really hard for the next 4 to eight years. I guarantee you if you elect me things are going to get really tough. Eventually they're going to get really good. No, no, no. Nobody wants to hear that. They want to hear you're going to fix my life next year, right? Like next year, okay, you got my vote. And that's not good for anybody's long-term interest. Bring that structure to a company. I don't know. [laughter] >> Well, sounds terrifying. I'm I'm also running out of time, but let me let me tell you a story very brief. Being this the the first son of immigrant refugees, they didn't know anything about colleges. So, when I when I'm a senior in high school, we go to the guidance counselor. I don't know if you have that in Canada, but there's a person hired at the at the public high school whose job it is to guide you. He's not a teacher. And one of the things he does is help with college application. So in my in my case, we went there and we said, you know, help us. I'm a good student. I play football. Blah blah blah. So I end up at Har at Harvard. It's a long story. It's not interesting. So we have freshman orientation. It's a week before the freshman year kind of really starts and the new class comes in and you put your your crap in, you know, in your in your locker and in your room and you have some meetings where mucky mucks at the university talk to you. So, we go into this big hall. I'm a little bit in awe of this place. I've never been away from home. This is my first time sleeping, not in my room, but in a strange place. um with a roommate I just met. So, we're all together in this big hall and the president of Harvard University is introduced. He's going to give us a welcome speech. So, here's how he starts. Gentlemen, by that it was still not co-ed. It took a few more years before women were allowed. So it was all young men aged 17 to 20 sitting in this room. He said, "Look at look at the man on your left." We did. Look at the man on your right. We did. He said, "One of them is going to be a senator and one of them is going to be I'll never forget his words, a captain of industry." And do you know why? Nobody's understanding what the man is saying. He says, "Because here at Harvard, we are the leaders of the world." I'm 17 years old and this man has just told me this. So my head gets twice as large as it was at the beginning of the meeting. Why am I telling you? Because the vast majority of my students, as I mentioned earlier, didn't want to be there. They didn't do any of the work. You might use the word lazy, although I'd rather more psychologically developed idea. They were unhappy. >> They knew where their job would be. They were going to be in the business of their parents. They'd be brought in at the bottom and work their way up. It's just that the working up was for ordained or they'd go and be in the father's law practice or they would go on to medical school or whatever the hell they did. And you know the the government in Washington is full of graduates from Harvard or Princeton or Yale or any of those other schools. Why? Because deference is paid to them. Look, I will admit to you difference is paid to me because of it. They look at me funny as if I'm the the black sheep. You know, something went wrong with that guy. He's a critic of this whole system. He should be cheering it on. He's not. And I enjoy, you know, their discomfort up to a point. And people are nice. They can't believe that I really don't like capitalism, which I don't. They want to believe that in the end I'm like them. And I really do like it. And I sure do like nice pair of clothes and I want to eat well and all the nice things of life. I want for myself, my wife, my two kids and all the rest of it. But this might interest you because now that you understand sort of where I'm coming from, I'm doing more interviews now than at any point in my life. M >> I do three or four every single day. You're you're the next to last one on on this Tuesday, election day here in New York. >> Okay. >> But the interest the interest in this stuff from a critical perspective, I never thought I would live to see it. It's remarkable. Anyway, I offer if you want to continue, I'd be glad to do it on another occasion. I think we have good conversation. I'm drawn to you. I like your honesty. So, I'm available if you're interested. >> I I appreciate that, Professor Majorly. I always enjoy our conversations. And yes, I have another bucket of topics I'd love to jam with you on. So, thank you so much for your time and uh we'll hit you up for a part two real soon. >> Perfect. I look forward to hearing from you.
Richard Wolff vs. Jay Martin: Debating the Future of America
Summary
Transcript
The younger you are, the more Mandani is your man. It's the end of the capitalist system arranged by the capitalist. >> Today's interview is more of a debate with the esteemed professor Richard Wolf. Now, today we discuss the pros and cons of a capitalist system versus a socialist system. And I felt like right now was the ideal time to [music] have this debate because the global epicenter of finance being New York City just elected a socialist mayor. And I want to discuss what this means not just for the city of New York, but for the [music] future of the United States of America. So today, Professor Wolf and I spar back and forth debating the ideals, advantages, and disadvantages of a capitalist system versus a socialist one. And I would love to know what you think in the comments. [music] Please let me know. Did I do a decent job at protecting my capitalist interest, [music] or am I rife with blind spots, which the professor suggests once or twice in the interview? I greatly admire Professor Richard Wolf and I thoroughly enjoyed this discussion and you please let me know if you would like to see more debates on this channel in the future. Welcome to the J Martin show. This is where we dissect the greatest minds in geopolitics and finance [music] so that we can better understand the world. And now, Professor Richard Wolf. Enjoy. >> This is J. Martin. Is this like a significant turning point for the city of New York or is it what's your perspective? >> Let me go further. I I would argue it's a significant uh changing point, historic transition, whatever words you want for the whole country. I think what you're seeing um is the end now. And I was not willing to say that with Bernie Sanders or with Okaziocortez or the few others that we've had. This is now operating on a scale that I would say the following. We've had 75 years roughly from 1945 until 2015 when anything that looked, smelled or tasted like socialism or communism or Marxism or any of those uh was an absolute taboo. It if you were associated with it, it was the equivalent of committing political suicide. It just you you're out. you're gone. Everybody would pile on with whatever negative thing was associated in their mind with these words and you would be, you know, people would look at the back of your head to check for the horns or something like that. Uh, and that's over. I mean, that that is New York City is an incredibly heterogeneous place. I live here in Manhattan. I can hear 20 languages in any given day. You know, 10 that I can recognize and another 10 that I I can't I couldn't tell you where the where the folks are from. Uh and and and Mr. Mandami coming out of nowhere, you barely known from a a part of Queens that has uh a high immigrant population. uh he's been able to look he he's doing better in Manhattan poly than he is in his native Queens. Every burrow except Staten Island which is a kind of place unto itself um has come out for him. It it it's a level of well two things. One, it's a level of alienation from American politics because I know this sounds trit, but it is my experience. The younger you are, the more mandani is your man. The older you are, the more [clears throat] other thoughts come into your mind. So, it's very much generational and it's very weird because it's not really about socialism. I teach this stuff. I mean, I know what socialism is. I know the different definitions. I can give you a history. Europe, Asia, I mean, that's what I teach. That's what I know. This is not what Americans are interested in. Americans are talking about socialism as a peculiar way to say, "I'm not happy with what's going on in my life in this country at this time. We're not getting jobs. We're not getting incomes. We can't get married. Children is forget about it." You know, on and on. You have a generation of people, two generations, who were taught by their parents here. You live in America, you're very lucky. Here's this thing called the American dream. So, they work hard and they go to college and they do all this stuff and they come out of college and they're told, "Oh, we forgot to mention the dream is gone." These people are pissed. Very pissed. They don't know quite what to do with it. So what they enjoy? They enjoy telling a poster capitalism sucks. Let's try socialism. This is I don't know where this goes. But you you would miss if you think it's all about the attraction of socialism that may come, but that's not where we are now. There's there's two things you said that I want to pull on here. Uh, you know, the first is I just see a couple counterveailing forces, right? At a at a federal level to an extent, you know, half the country seems to have voted for uh kind of a return to American fundamentals. Whether or not that's what they're getting, that was the narrative, right? And you know we can debate that but that's a that's a very counterveilling force to the um the tailwind that Mandami is receiving in New York which is the opposite right and New York being the financial capital of the world uh you know in some context the epicenter of America for many years anyways. >> Yeah. >> Uh to be going the opposite direction of the majority of the country like do you see that kind of dichotomy and what do you make of that? Well, the part the part I would agree with you about is [clears throat] here I would do it in my words. The level of splitting [snorts] in this country is very extreme. Now, um I was born in Ohio in the Midwest. I've lived and worked in the United States all my life. I've never seen this level of disagreement um politically. I just I haven't, you know, I went to school in California. I taught in Massachusetts. I've been around a fairly good bit. Um, something is splitting the country up, but I don't think it's the narratives there. I would disagree on either side. That's why I said this is not a narrative about the New Yorkers are not rushing to socialism. I mean, I wouldn't be upset about it. Where I'm coming from, I wouldn't regret that, but it's not the case. I wish it were. It's not the case. They are angry about just what Mandami talks about. First and foremost, in every bar, in every chitchat in the grocery store, it's rents. It is impossible to live in New York City and work here. If you're a young single person, okay, you can do with two or three others. You crowd into an apartment and you manage, you know, you convert the living room into a futon and you you manage. >> But you're not you're not living what you were led to expect. You just aren't. And it's not coming. There's nothing there's nothing to make you say, "I'll wait five years, then it would you've been around for five." Nothing. Not getting any better. It's getting worse actually if you look around. So these people are not they may enjoy talking about socialism but even that isn't true. They don't they vote for Mami because he's new, he's young, he isn't a stinking old politician in whom they have lost all faith imaginable. Now, when you go to the right, it's really a little different. Here's the similarity. [clears throat] Trump can talk all he wants. They don't listen and they don't care what the they're an the people that support him the real the dieh hard 30 to 40% whatever exactly it is they are to use harsh English they are very angry pissed off people in a way they have a [snorts] lot in common with the New Yorkers they're pissed off that their version of the American dream is also unavailable. They can't do it. The jobs are not, you know, these are people who were once factory workers and Americans look down on factory work, but in fact over most of the last century, the workers who came out best were the factory workers. They had the unions. They got the seniority. They were the ones who who bit who who moved to a better neighborhood. All the rest of that. They were led to believe that their children would continue that story. That's over. Those people lost their job and they're now standing at the entrance to uh Walmart and they're a greeter. have no union, no security, shitty pay, and no prospect of that ever changing for the rest of their life. And they don't know what happened, and they don't know why. And they did everything they're supposed to. And they vote for Donald Trump because he expresses their rage, their anger, their snarling hostility. and you know the uglier parts of American history, the white supremacy and all of that is coming back up. Not because people have suddenly turned against black and brown. No, that hasn't happened. It's really an affirmation that somebody ought to be concerned and give a crap about us, about white male Christian folks. We used to sit at the top of the pile. Now there's no room for us. We're told our hearts should beat for the black and the brown and the women and the immigrants. pardon my Spanish, to hell with them. What about a that that as long as Mr. Trump can keep up the facade that he actually cares about them and that he's going to change their life, they'll go with him. Why shouldn't they? There's nobody else out there. Or let me tell you, let me provoke you. The one person who could get their vote is Bernie Sanders. Mami can't. Kamla Harris can't. He could because he sounds enough like them in what he says that they might. And if they got terribly disillusioned here, I'll make you a prediction which I don't do. If they get disillusioned with Mr. Trump, which is a at this point I would say at least a 50/50 uh chance. If they get this illusion with him, you're going to see them go over to Bernie. It'll blow everybody out of the water. That's what you'll see. I tell I want to remind you of American history. In the the last time we had a crisis like this, it's the 1930s. It's the great crash. October 1929. The economy collapses. Everybody's American dream is thrown out the window, right? grapes of wrath of mice and men. That's the image you should have in your mind. People were astonished. They thought they lived in this promised land and they were now okies, you know, in a jalapy going across the Midwest. And they turned to the left, not the right. They joined socialist parties, communist parties. They voted Franklin Roosevelt, arguably the most progressive president the country ever had. and they reelected him three times. He the most popular. What did he do? He taxed corporations and the rich. He created social security, unemployment compensation, the first minimum wage, and a federal jobs program. I mean, un unheard of. And he taxed corporations and the rich to pay for it. I mean, the American working class went to the left. The idea that it it can't do that or it won't do that or you could never make it politically if you tax corporations and the rich, that's wrong. That's not You don't know American history if you talk like that. And the idea that that happened then it could never happen again. Where do you get that from? If we continue down this road, that's as good an outcome as has as much probability as any other. Look, I I have to agree. And as you were explaining that, I was thinking about, you know, the the biggest podcaster in the world is still Joe Rogan. And over the last few years, he's platformed two presidential candidates. One was Bernie Sanders and the other was Donald Trump. And his audience, the largest podcast audience in the world, responded very well to both of those two candidates, which from one perspective, you can say they're polar opposites. But what you just said um counters that and I tend to agree with you and it surprises me. But I I think you're right and that's really interesting. Now, let me ask you something about the the American dream is gone, you know, and and I want to push back on that at risk of sounding insensitive, but hear me out and let me know what you think. All right. So, [clears throat] >> I understand the the rent issue, the housing and affordability issue. It's a real problem for sure. And I've got a young family, you know, three little kids, a fourth on the way. We're in that squeeze, right? We're in the housing squeeze whether we like it or not. But I think of that as that's my hard, right? That's the hard that I have to deal with. And what I mean is my great-granddad got off a boat on the eastern seabboard and we don't know where he came from. He didn't speak a word of English and had no paperwork. He was hired by a farmer named Martin. He kept the name for himself. That's my last name today. Wherever he left, we don't know, had to have been worse than showing up in a foreign country. The language you don't speak, you know, nobody. That's pretty bad. So, wherever he came from was worse than that. >> My grandpa was a homesteader. He was um he was convinced to move up to Saskatchewan, the prairies, middle of Canada under the Land Dominion Act. if you were willing to move up there um in the 30s, you got a couple sections of land for free because Canada was trying to populate the center of the country. Like barren, prairie, very cold most of the year, frozen tundra. Uh and that's where he moved, right? That was his heart. Much harder than mine. And that's where my dad grew up. My dad was born in 1942. He grew up in a house with no electricity, no running water. If you have no running water and the ground is frozen seven months of the year, he and his brothers would hike down to the river, break up blocks of ice, and haul it back home. His mom, my grandma, would melt it over a fire. That's where 100% of the water came from six or seven months of the year. That was his hard, a lot harder than mine. My point is, I have to deal with housing. I have to deal with that. But, I mean, that's just my hard. That's today's hard, you know, and it's always been hard. Uh, this is just my version of it. But the fact that I can I I couldn't I I didn't like the prices of the houses in Vancouver that I wanted, so I left Vancouver, right? I live in a world where you can make money as a podcaster and travel and be anywhere. I got two brothers in the metropolis. They complained all day to me about how expensive the city is, and I'm like, "Well, just leave." Like I did. You know what I mean? Like, there's options today that didn't exist 5 years ago, 10 years ago. So yeah, it's the dream that you thought material will materialize didn't or it isn't. But there's other dreams available, right? You just have to pivot a little bit and accept that you've got a hard in front of you and everyone always has. This is yours, right? What what's your take on that, Richard? >> I agree with all of that that there are always these these issues. Every one of us lives in the constraints that that befall usually for no reason other than the kind of history you just gave of your family. I could give you a comparable history of my family. And we struggle each of us individually to try to make the best of it and hope that there's a a break here or there or an opportunity that we see enough to grab it and hold on. All of that is correct, but my answer to you is you wouldn't want to create a system that makes it that hard to do. In other words, you might want to think to yourself, what kind of a society are we capable of within which everybody has to struggle? Because that's the nature of life. We're all going to struggle no matter what happens. Even if you're born and very wealthy, look, you know, my wife's a psychotherapist. She looks at Donald Trump and she says, you know, he'd be the kind of person which if he walked into my office and said he was looking for therapy, I would go find him somebody else because there's too much trouble here. I can see it in his face and all the rest of it. So, I agree with you. I want people just to have the best possible chance to do that. I'm not going to answer you by saying, "Gee, think of all the people who don't get the break." >> Yeah. Yeah. >> Unless you want to go in the direct then we would have an argument. If you want to go in the argument that the people who didn't manage to get through deserve no better than they got, then I would fight with you because that I think is that's awful because I know well let me let me be blunt. There's a man named Elon Musk. He currently owns, depending on what you believe,3 to400 billion dollar of personal wealth. He is the the CEO of Tesla. And Tesla, the board of Tesla on which he sits, offered him a 10-year contract for $1 trillion. Now, a man who has 300 to 400 billion is already the richest man on the planet and he's now been offered the richest contract ever offered any CEO anywhere. In other words, the rich are becoming richer. That gives him that gives him >> I argue that's that's evidence that the dream is alive in that there's a guy who built that company from nothing into what it is and created himself that opportunity that the rest of us can look at with this like that is disproportional wealth on a level I can never wrap my mind around but he built it you know and that was the opportunity That was the dream. >> He didn't build it. He built an electric car based on the work of hundreds and thousands of people who came before him who handed him their work in an article, in a book, in a scientific experiment. All of which made what he did possible. He then took it another step. I give him that. Good for him. He used some creativity. He made a step forward. We have that in my profession. I'm a professor. If you do a really good job, if you figure something out, by the way, something a guy like Elon Musk can then make something else out of, you are said, "We're going to give you a professorship. If you're the best of the best, we're going to give you a Nobel Peace Prize or a Nobel Prize. But nobody gives any professor anywhere hundreds of billions of dollars because the money you give is one thing. The work you did is something else. It's obscene to give any person that amount of wealth because look, it's nice for him. I get that part. But it means that $400 billion dollar that were produced by what the society has, the resources, the demand for those cars, the feelings of the people of this planet that they don't want to pollute with with go oil and gas anymore. They want to try an electric car. by the way, in my judgment, an utterly irrational activity of the human race that I bemoan, but I'll be glad to tell you why. But people like them. They're buying them all over the world except except in the United States. Part of our decline, uh, which I'd be glad to talk to you about, too. But if you give him 400 billion, that means other people who have all kinds of needs cannot realize them. People with all kinds of contributions to make cannot realize them because that 400 billion that he already has and the trillion he's going to assemble over the next 10 years is money not going to all kinds of social uses that in my judgment and in the majority of American and foreign people's judgment is way better than having him do a space X or to have 47 uh mansions in New Zealand to retreat to or to do whatever else he wants. By all means, reward his creativity. Reward everybody's. Do it in a reasonable way. The Nobel Prize, $1 million. Give him a Nobel Prize. Give him 10. What are you doing? The rest of it is about capitalism. That's what makes one person have this kind of wealth. Human beings have been making creative breakthroughs forever. That's why we have fire. That's why we have a hundred other things. Okay? We don't need to give him 300 billion to have human beings creative. What we do need, what would help is a decent school system, which we don't have. Opportunities for wait opportunity for people like you to go and solve your problem. your hard problem. Go find a good school. Go find a good teacher. But let's make them available so people like you can find them. I live in a city in which one fifth of the people live comfortably and well and their children have an opportunity. The other four fifths I mean the parents are hoping they don't die when they're teenagers. I mean, we we don't need that, Mr. And I'm willing to make the judgment, right? We don't need Mr. Musk to have $400 billion. What? And I'm a Democrat with a little D. I believe democracy should operate on where we put the resources. He didn't do it by himself. He had the help of an awful lot of other people. We have, you know, let me give you a parable of the story. Imagine a community right by the edge of a river and periodically the river overflows and it floods the town and it's very sad. So the word goes out one evening the river is rising. Uh we all have to pitch in and put sandbags on the edge of the river so that we hold the water back. So everybody please volunteer. Give us a few hours and we're going to stand on a line and each person hands the next person a bag of sand until it gets to their edge of the water and that'll be piled up and we do it and we work all night and nearly everybody in the town helps out and in the town there's a rich person and the rich person says I want to show my appreciation. My house is not not ruined. The water was held back and you people. So, I'm going to give a gift of $10,000 and I'm giving it to the guy at the end of the line who put the bag by the river. What? But he only could put the bag at the end of the river because everybody else did their part. If you want to reward, reward everybody. Reward the community. Reward the spirit of the community. Reward the local clergy if they help to develop that spirit. But what in the world are you doing making a trillionaire out of one guy so he can do whatever he wants by imagining as by the way that lunatic does that he did it you didn't do it. the the the [clears throat] one thing about that parabel parable is that it is assuming everybody carried the same number of bags >> and you know the reason >> well I guess because okay so I was thinking about a a friend of mine a couple months ago who was complaining to me back to the housing market about how this is unfair it's unaffordable housing is a right all this stuff half an hour earlier she was complaining about how it's unfair that she should have to work 8 hour day, >> right? >> Uh I work like 70 hour weeks, right? And so it's, you know, that you you get what you put in to a degree, right? Now, there's disproportionate returns once you climb the ladder. I agree with that. But in terms of Musk's compensation package, I also think, you know, we are not giving him that money. That money is coming from individuals who make a conscious decision to buy one of his cars. They could buy a Toyota or a Ford, but they chose a Tesla or they chose to invest in Tesla stock, but that was their independent decision and they made that decision because of the value they believe that company has created, the product or whatever. Um, and so it's it's not so much that like we're giving him that money, right? Whereas when we do give money in the in the form of government subsidies, handouts, and and expenses, I'm far less pleased with how that money is spent. You know, I I could opt to buy a Tesla and fund Elon Musk's lifestyle to a degree, but that's a choice, right? But I don't get to choose about the $ 31 trillion, you know, the government spent since 2001 on funding wars, bailing out banks, stimulus programs. I disagree with, right? Like there's it's it's bad either way, but at least in one bucket, I have a choice. Like I have I have some freedom there. Does that make sense? What do you think? >> No, I don't think so. Let me tell you why. >> Tell me. Tell me. Elon Musk uses his money to buy the government he wants. The Mr. Trump is president because Mr. Musk gave him $300 million in the final months of that race. If he hadn't given him that money, it's an open question whether he would have won or not. Mr. Tesla, Mr. Musk is like Mr. Toyota. I believe actually that's the name of the Japanese family that owns Toyota. You have a choice among the cars they left standing. They destroyed each other. These car companies they ruined each other. If you start in the 1930s, we had 40 automobile companies in this country. Japan had a whole bunch. China currently has 30 30 companies making cars. They compete in a tremendous struggle in which they actively destroy one another. You are left with the choice they enable you to have. You don't. It's like saying, "I have a choice when I vote. Yeah, I can vote Republican or Democrat because they've made sure that I don't have any of it." And we can see the difference because if you go to Europe or for that matter to Canada, you already see you could have more. You don't have to have just two. But those two we allow to monopolize this situation. So I would argue no, you don't have any any greater choice in the quote private sector. That's part of what the private sector would like you to believe. But it doesn't it doesn't compute. They are making decisions every day about how to allocate Mr. Musk. How is he going to spend his 400 billion dollars? That's going to affect my life. How he does that and yours? Where do we where would he get the idea? Well, >> it's my money. I can do it. No, you can't. We we teach in the university. And I want to come back to that in a minute. We teach in the university that democracy means you can do what you want so long as it doesn't hurt other people. But here's the problem. Everything you do hurts other people. It may help some, but it hurts others. So you got a problem. And you can pretend that it doesn't. That's the American way. We are so desperate to hold on to the little bit of freedom we have and it ain't much that we need to imagine that it is an unaloyed good. I wish there were. I wish there were things that are either good or bad. Would make life much easier. The truth of the matter is it's all jumbled up. It's all mixed up. For example, people like to tell us we have to give the co the drug companies enormous profits. One of the most profitable industry segments in our economy, pharmaceuticals. And when you ask them why, well, we have to do a lot of research to come up with those life saving. Sure you do. You want us to believe that we need to give you that money to get that result. But you know that half the time what you're doing is figuring out how to sell something where the market is. You don't go out there looking to solve problems of health. You go out there looking at where to make a buck. I mean I study the industry. I know they know they're not going to they can the PR but not us. We know. So what? Stop. You're trying to tell us that it's all this good thing you do. It's like an advertisement. We live in an advertising culture. What does an advertiser do? He tells you everything good about his client's project. He never tells you about the bad stuff. He doesn't begin by saying, "Well, on the one hand, these are the virtues. On the other hand, here's a way to car sucks." No, no, no, no, no. And that infects all of us. Our ways of communicating are very complicated. We try to teach our children, give us a balanced view. be able to look at the good side, the bad side, and and then make a judgment. You that's fine, but don't just give us one side and then they grow up and we stick them in an advertising culture that tells them when you're looking for somebody to to have a date with, go up on one of those dating services and tell one lie after another about who you are and what you look like and how much you weigh. Come on. I know we laugh because it is funny but it is also telling. I wanted to mention the universities because I'm a product of the elite universities. I might think like you because I come my parents were refugees. My father was French and my mother German. I speak French fluently. I speak German fluently. English is my third language. I was born in the United States, but my parents were refugee immigrants. If you're if you're that kind of kid, which in a sense you are too, although more generations back, one of the things that happens to you, I don't know if it did with you, but with me, is my parents whose careers and everything were destroyed because they lost everything, uh, they put all of it on me. I'm the first child that was born in the new world. Blah blah blah blah blah. So, I had to succeed. So, I went to Harvard, then I went to Stanford, and I ended up at Yale. I'm like a joke. I'm the poster boy for elite education. >> I have three master's degrees, a PhD, and a BA. I have everything that you're supposed to get out of the American elite education system. I was surrounded at those school at all three of them by an enormous number, more than half of students who didn't want to be there, who were not happy there, who were there because their parents wanted them to be there. And they were overwhelmingly wealthy. They were sitting in that unhappy getting drunk every Thursday afternoon right through till Sunday night when they would have to go back into the classroom and sit there and you know throw paper airplane and whatever else they did. They took up this space that other young people would have died for a chance to sit in that room to get a degree. And you know, being a critic of capitalism, which I am, it's been very lucky for me to go to those universities because every time I've gotten into trouble, I wave my pedigree and it's like garlic with the devil. Vaxs right off. Right. So, I' I've I've learned the benefits, but to tell me that folks get what they deserve in this culture, I've been in too many situations for too many years that you can't I can't I can't go there with you. >> Let me ask you, how do you reconcile this, Richard? So, [clears throat] um, everybody cheers for their small business, right? We all cheer for the independentlyowned, owner operated business, right? The hustler. And in order to succeed at that game, you have to make tremendous sacrifice. And you're definitely going to sacrifice your time. You're probably going to sacrifice your friendships. You're probably going to sacrifice your mental health and maybe your physical health because you're so dedicated to try to lift something off the ground and get it rolling, you know? But if you pay that cost and you're successful, you know, everyone's cheering for you along the way. They want you to succeed. They want the small business owner to win, right? In this mega corporate world, >> careful >> until they actually do. And when that small business owner becomes a big business owner, suddenly the script flips and all of a sudden they're the evil corporate. And it's like, no, that's the guy that you were cheering for. That's the guy that sacrificed. That's the guy that gave up friendships. That's the guy that worked Sunday nights. That's that same person, the one that mortgaged their house to pay salaries to build this thing. And now, is it not time to be rewarded? But more importantly, why does everybody all of a sudden hate me? I'm the same person. I just succeeded, right? I did the thing and the script flips. How do how do you reconcile that? >> You know the answer. Part of the answer is everybody's jealous. Everybody look, we have a word for the jealousy that infects the life of the small business. The word in economics is called competition. When you go into business, sooner or later you're going to notice there are other people doing something like what you're doing or maybe even exactly the same thing. They're trying to make it and they're going to figure out that if you make it, it may make it harder for them and vice versa. They don't mean you any harm, but if they come up with a new way of making whatever it is you're doing and it's cheaper and a better quality, you're going to have to replicate what they did or you're going to go out of business. They're going to win and [clears throat] you're going to lose. Competition has winners and losers. But of course, the way I'm telling the story isn't the appropriate way because the loser will have a different explanation for why he or she lost. You cheated, you did this, you and so out comes jealousy and bitterness, which may be correct sometimes, maybe incorrect sometimes. But the the bo, excuse me, the bottom line is for every story of a little business that makes it and becomes a bigger one, there are probably 50 that didn't. They worked hard. They didn't do on Sunday night. They missed out on the up bringing up their children until the kids were no longer interested and they had that painful moment of recognition which I hope you don't have. I have two kids and I had to learn and sometimes in the hard way how to be there for them in a way my parents never were for me. So I had to learn it from from scratch. But you know the answer. You know that we live in a world where we don't know exactly how the other guy lives. We don't know what sacrifice is. And we look and we see a little. We're friends. We we we go out to dinner occasionally. But you know the details of life are mostly known by you, your wife, and your children in a way that others just will never quite get. So, every one of us tells a story. Why aren't you successful, Uncle Harry? Why did Uncle Joe make it and you didn't? And believe me, Joe and Harry most of the time will have very different stories to tell. That's what what I've seen happen all over and over again. That's why large corporations who have sometimes brought me in to work as a consultant. I look by being an academic in case you don't know you don't get paid the way you do if you're a consultant. If you want to make any money you become a consultant because it pays much more. I like teaching so I stayed there. But when I did the consulting I learned was very painful. I would be hired do a study of X. So I I'd work with a team, a lawyer, an accountant, maybe another economist, maybe an engineer, and we would work on something often for big companies because only the bigger company can afford to do this. And so it would be the vice president of something who would call us in. And I remember the first time this happened, which I will tell you now. We're sitting around at a restaurant, expensive restaurant. He picked up the tab, of course. Um, dinner is over, everybody's having a drink, and my colleague leans over to the vice president and says, "Look, you know, I want you to understand that we're going to figure this out for you, but that there's always a risk. I I don't want you to imagine that because you got Harvard and Yale PhDs running around here that we got some magic and we're going to we're going to remove the risk. Now, I remember feeling awkward. This this you don't talk to a vice president like that because he knows that that that that's not that's not higher, you know, knowledge. The the vice president smiled. He'd heard this all before. He looked across to us and he said, "I can see that you don't understand how this works." He said, "The decision to do this project has already been made. We're doing it. We're hiring you because if you come up with a suggestion to do it, we will be very happy. But the decision is already been made. And the reason we want you to do make a study and we do want you to say it's a good idea is because if it isn't, we're going to get fired unless we have a class A consultants report telling us we should have done this. >> Okay. >> All right. The poor academics sitting around that table had just been schooled in how the world works. We sit there, we're going to do a scientific study and come up with the best estimate of how to and they're smiling there. They were light years ahead of us. That's how it works. So, okay, I want to close the loop on this one uh piece and then I do want to move on to something a bit different. But just to to push that train all the way down the tracks back in my shoes or any, you know, uh small business entrepreneur shoes, you know, you grind it out for far too long and everything takes longer than you want it to. Everything's harder than you thought it was going to be >> and maybe you take losses along the way and maybe they're big ones, right? And >> you know, your your employees are insulated from those, right? They don't know what's going on behind the scenes. Um the the personal, financial, or emotional pain that you're withstanding to hold this all together and maybe the weird, you know, debt deals you're having to string together to make things happen, right? Like the exposure you put on yourself. Um but then eventually you make it, right? And you crest that tipping point. holding on is just as hard, right? But you get to a day in the end of the road where somebody offers you a very large check for what you built. >> And that's the disproportionate amount of money that you suddenly receive all at once. And on the outside, people would say, you know, 50 million is way too much money for one person. You don't need all that. >> But the entrepreneur says, where were you the last 20 years? Where were you? Right? Did you mortgage your house? Right? Like what? Talk to me about this. right? Did you co-sign the loans? Like what where were you the last 20 years? Now you speak up like this is some overnight success but it absolutely was not. Now smaller scale but similar principle right to the Elon tale. So that's I want to close the loop on that and get your thoughts on that end of story. For me, the the interesting uh part of what you say is I if I were a Freudian, I would say your inability to project. In other words, you describe with wonderful clarity and with feeling and you're good at it. Uh your view But you don't seem to understand that the other people that you're comparing yourself to can do exactly the same thing. Let me give you an example. That worker you referred to at the beginning, the one who doesn't have to worry about the finances of your company because he's just an employee. But of course, he does worry. The difference between him and you, he worries about your finances, never knowing about them. You at least know something. You have the knowledge. Is it a terrible risk that we're at or a a one that I can manage? Is it a financial tsunami that's going to knock all of us out here? or can I find you by being the owner or the employer have a level of knowledge and control? The poor schmuck who works for you doesn't. For all you know, he moved from Calgary to Vancouver to work in your factory or your office or your whatever it is. He took his daughter out of the high school in Calgary where she was just making friends that that you know she needs and he yanked her into a new school where she's the new kid and has to make friends from the beginning which is a trauma for a 14-year-old girl or could be. Yeah, obviously I don't know your family so I'm talking hypothetically but the workers make a lot of choices. They take a lot of risks. To work for you is to put my life into your hands. Holy mackerel. Don't tell me I have >> That's a two-way street. I mean, I during those years where I was like, I don't know how I'm going to make payroll. I have people and families relying on me to figure this out, and I don't know what the solution is yet. I'm going to do something drastic and I'm going to make it work and it's going to hurt, but I'm going to find a way, right? And that's what happens behind the scenes because you're right, that is also my responsibility or the owner's responsibility and if they're, you know, uh, you know, if a good person, right, they're they're considering that with sincerity and they take that very seriously that they're employees livelihoods are dependent on them making sacrifices, >> right? But we're talking we're talking in general and the vast majority of small businesses die. Only a small percentage survive 5 years, let alone get big and successful. So the majority of people, the working class, they know damn well taking a job anywhere is a risk. The risk is not just the person who takes the decision to start a business. In most cases, that person has some money since it's kind of hard to start a business if you don't have any. Even if you plan on IPO and selling shares or you plan on getting a bank loan, you better have some because it enhances your chance of getting some. So the workingclass guy at the bar will see lean across to me and say I ri risk every I have no savings account. I yanked my family out of Boise, Idaho to go to to Vancouver to work on Jay Martin's project. I'm glad I did it. I I made the decision. Nobody held the gun to my head, but I'm make I'm taking an enormous risk. And my risk is that he is going to be one of these kinds of entrepreneurs who survives, who makes the right choices, or to use your language, who's a decent guy so that if he doesn't, if he makes a mistake, and we all do, he won't hang me out to dry. I've had to teach generations of students that the argument that the capitalist takes a risk is correct, but so does the worker. And if you weigh the worker's risk to the assets he has to fall back on versus the employer's risk and the assets he has to fall back on, don't be so quick to decide who's in the better situation. >> All right, I hear you. I mean, I'm inclined to say like proportion. >> You're a nice guy to talk to. Really, I mean it. But let I want something to I want to say something. >> I don't get part of the passion you hear from me is I've been a professor all my life. I've been very lucky. I've taught at half a dozen universities. So, I'm like a successful entrepreneur. I I wanted to be a professor. I've been one. I'm I'm on a pension now. I'm well taken care of. I live in Manhattan. Lord knows I'd have to be. But I still have the passion because it is so hard to get an to get an opportunity in the United States even now to talk about this to be able to because what we're doing is we're talking capitalism has virtue. Capitalism [clears throat] has flaws. Capitalism does this well. Capitalism screws up over here. I a normal conversation. I'm not hoping to convert you, but I'm getting a chance to argue. Those chances are rare in this culture. There's no support for them. I mean, I'm exaggerating. There's a little, but there's nothing compro. This is not a level playing field that we're having this conversation on. You haven't heard some of the things I've said. That's not your fault. That's the fault of a culture that doesn't present that to you, which it ought to. And because my wife's a psychotherapist, again, if the employer and the employee don't talk to each other, don't work out their problems, those problems don't go away. They sit and they fester and then when you want it least, they blow up on you. It's not smart. The way we organize business is not smart. We'd be much better off to actually take our commitments to democracy seriously. Let's all get together and make these decisions in a community way. Let putting it all on the entrepreneur, it's not healthy for anyone, including the entrepreneur. The irony is when capitalism goes, and I think we're closer to that now than I ever thought I would live to see, it'll be the capitalists themselves who make the transition cuz they'll want to. I already see it. I consult now on dozens of small businesses, small mom and pop, maybe 50 to 200 workers. Why am I talking to them? They call me. Why are they calling me? They started a business 40 years ago in in Wisconsin or in it's mostly here in the US in Minnesota or or in in you know Pennsylvania. And now they're 65 years of age. They don't want to do, you know, like you, they got up every day. They had no weekends, blah, blah, blah. But they built a very successful business. They know every one of their 211 workers cuz they all come from a 40 mile radius. They were hired by mom and pop. They know each other. They know the names of their children, all the rest of it. How do they What do they do now? They want to get an RV and travel across and go to B in in Western Canada because they heard it's beautiful. Okay. So, they they don't want to sell the business cuz for all they know, the big company that buys it will shut it down, kicking those 20 families to the to the curb. What happened then? So they don't want an IPO because who knows what the shareholders who buy the the major blocks of share what what will they do? They don't want to shut the factory cuz that'll hurt the community. You know what they're going to do? They're going to sell it to their own workers and they bring me in to help them do it. You know what's happening? It's the end of the capitalist system arranged by the capitalist. >> Okay. Um that's interesting. Uh and >> just because um literally last week my accountant was uh teaching me about this new structure in Canada and it may very well exist in in the United States. In Canada, it's a temporary measure that increases the lifetime capital gains exemption. So when you sell your company, you get up to a certain dollar amount tax free. The rest you pay taxes on. Um it effectively 10xes that amount that you can receive taxree if you sell your company to an employee ownership trust. Yeah. >> Right. So that's I think what you're talking about and the reason I was just curious what why they were doing this. Why is the government presenting this option for business owners? And the reason is is because in Canada right now, three out of four private companies are looking to exit, right? Owners are in their sunset years. They want out. Three out of four. And I imagine the stats are similar in the US. The majority of purchases happen by private equity. And when that happens, typically the next step is to gut the organization and juice margin, right? And the track record of private equity managed companies is incredibly poor. Uh because they're not incentivized to, you know, perform for the next 10 years. They're incentivized very differently. >> Exactly. I could tell you the same story this way. Yeah. >> Okay. Okay. So it just struck me interesting because I just learned about this new structure and at present it's available for the next two years in Canada and the idea is that the government wants to create quick decision-m so get this structure set up get your company into the hands of your employees do it now. Um the opportunity won't last forever and they're trying to transition a bunch of businesses into employee ownership trusts. That's an initiative happening in Canada that was just announced very recently. There's agit, just so you know, there's agitation all over the United States to do very similar things either on the federal level, there are some people trying that, or uh each of the 50 states try to set it up on the state level uh to do it. Some states already have laws left over from the populist era, the late 19th century when uh co-op movement was very strong, particularly um on the Canadian border, you know, Wisconsin, Minnesota, Michigan, all along there, there was a huge social movement of of farmers to get together into co-ops and they were strong enough to get the law written. So for example, if you uh leave if you sell your business uh at an advanced stage your age, then you can you will get a lower tax rate if you sell it to your workers than if you sell it to anybody else. Uh then there's another law legal arrangement you may have heard of. It's called the right of first refusal. And what that means is uh the law says the employer family has to offer it at a fair price to their workers. If the workers don't accept it, don't don't buy it, then they'll be free to go and do it with anybody else, but they have to give the right of first refusal to the workers. This is another way of encouraging that deal to be made. Interesting. So, [clears throat] by the way, you know what it speaks to? It speaks to all of these feelings. Workers, you know, workers aren't stupid. They know that you can make a mistake. They know that supply conditions can change on you and demand conditions and Lord knows what. you know, look at the crazy stuff between the United States and Canada now, which must affect most Canadian businesses sooner or later, one way or another. So, one way is to have the the entrepreneur, the the owner make the decision how to navigate. >> The other thing is to have it done democratically. If it's done democratically, then all the workers, you know, they got no one else to blame. They don't they won't get angry at you. They made the decision. they were in on it and they got to go with it. You know, win, lose, or draw, they've got to have a a they get a piece of it, but you get some shared responsibility. And you also get, I can assure you of this, the worker in a worker co-op on his way out at 5:00 who notices that the light in the bathroom is still on, [snorts] stops, goes into the bathroom, flicks the switch cuz it's his company, too. I >> I'm I'm I want to believe you, but I'm I'm inclined to say that's a generalization, and some people are just lazy. Yes. And a lot of people are but but also like you know I I don't want to say that very few people should be leaders but I would say that very few people actually want to be leaders. I think the majority of people want to be led. They want a simple path forward a predictable path forward. somebody else to face the big decisions, face the tough consequences if things go wrong and provide them with a bit of certainty and predictability and a clear path, right? Um, now that that may be an unfair thing to say, but I I think culture reflects that. The other problem I would see with a democratically run company is the massive case studies we see all over the world. I mean, you know, has this led to uh let's look at the US, right? I mean, we we we pivot back and forth, left and right, every four years. We're incentivizing our leaders to offer us short-term promises because nobody wants what what is better for us, which is short-term pain for long-term gain. Anybody who knows the big prize comes with pain at the beginning. But no politician's going to win by promising a society it's going to be really hard for the next 4 to eight years. I guarantee you if you elect me things are going to get really tough. Eventually they're going to get really good. No, no, no. Nobody wants to hear that. They want to hear you're going to fix my life next year, right? Like next year, okay, you got my vote. And that's not good for anybody's long-term interest. Bring that structure to a company. I don't know. [laughter] >> Well, sounds terrifying. I'm I'm also running out of time, but let me let me tell you a story very brief. Being this the the first son of immigrant refugees, they didn't know anything about colleges. So, when I when I'm a senior in high school, we go to the guidance counselor. I don't know if you have that in Canada, but there's a person hired at the at the public high school whose job it is to guide you. He's not a teacher. And one of the things he does is help with college application. So in my in my case, we went there and we said, you know, help us. I'm a good student. I play football. Blah blah blah. So I end up at Har at Harvard. It's a long story. It's not interesting. So we have freshman orientation. It's a week before the freshman year kind of really starts and the new class comes in and you put your your crap in, you know, in your in your locker and in your room and you have some meetings where mucky mucks at the university talk to you. So, we go into this big hall. I'm a little bit in awe of this place. I've never been away from home. This is my first time sleeping, not in my room, but in a strange place. um with a roommate I just met. So, we're all together in this big hall and the president of Harvard University is introduced. He's going to give us a welcome speech. So, here's how he starts. Gentlemen, by that it was still not co-ed. It took a few more years before women were allowed. So it was all young men aged 17 to 20 sitting in this room. He said, "Look at look at the man on your left." We did. Look at the man on your right. We did. He said, "One of them is going to be a senator and one of them is going to be I'll never forget his words, a captain of industry." And do you know why? Nobody's understanding what the man is saying. He says, "Because here at Harvard, we are the leaders of the world." I'm 17 years old and this man has just told me this. So my head gets twice as large as it was at the beginning of the meeting. Why am I telling you? Because the vast majority of my students, as I mentioned earlier, didn't want to be there. They didn't do any of the work. You might use the word lazy, although I'd rather more psychologically developed idea. They were unhappy. >> They knew where their job would be. They were going to be in the business of their parents. They'd be brought in at the bottom and work their way up. It's just that the working up was for ordained or they'd go and be in the father's law practice or they would go on to medical school or whatever the hell they did. And you know the the government in Washington is full of graduates from Harvard or Princeton or Yale or any of those other schools. Why? Because deference is paid to them. Look, I will admit to you difference is paid to me because of it. They look at me funny as if I'm the the black sheep. You know, something went wrong with that guy. He's a critic of this whole system. He should be cheering it on. He's not. And I enjoy, you know, their discomfort up to a point. And people are nice. They can't believe that I really don't like capitalism, which I don't. They want to believe that in the end I'm like them. And I really do like it. And I sure do like nice pair of clothes and I want to eat well and all the nice things of life. I want for myself, my wife, my two kids and all the rest of it. But this might interest you because now that you understand sort of where I'm coming from, I'm doing more interviews now than at any point in my life. M >> I do three or four every single day. You're you're the next to last one on on this Tuesday, election day here in New York. >> Okay. >> But the interest the interest in this stuff from a critical perspective, I never thought I would live to see it. It's remarkable. Anyway, I offer if you want to continue, I'd be glad to do it on another occasion. I think we have good conversation. I'm drawn to you. I like your honesty. So, I'm available if you're interested. >> I I appreciate that, Professor Majorly. I always enjoy our conversations. And yes, I have another bucket of topics I'd love to jam with you on. So, thank you so much for your time and uh we'll hit you up for a part two real soon. >> Perfect. I look forward to hearing from you.