Marc Andreessen: Trump, Power, Tech, AI, Immigration & Future of America | Lex Fridman Podcast #458

- I mean, look, we're adding a trillion dollars to the national debt every 100 days right now, and it's now passing the size of the Defense Department budget, and it's compounding, and it's pretty soon, it's gonna be adding a trillion dollars every 90 days, and then it's gonna be adding a trillion dollars every 80 days, and then it's gonna be a trillion dollars every 70 days. And then if this doesn't get fixed, at some point, we enter a hyper-inflationary spiral and we become Argentina or Brazil and- - The following is a conversation with Marc Andreessen, his second time on the podcast. Marc is a visionary tech leader and investor who fundamentally shaped the development of the internet and the tech industry in general over the past 30 years. He's the co-creator of Mosaic, the first widely used web browser, co-founder of Netscape, co-founder of the legendary Silicon Valley venture capital firm, Andreessen Horowitz, and is one of the most influential voices in the tech world, including at the intersection of technology and politics. This is the Lex Fridman podcast. To support it, please check out our sponsors in the description. And now, dear friends, here's Marc Andreessen. All right, let's start with optimism. If you were to imagine the best possible 1 to 2 years, 2025, '26 for tech, for big tech and small tech, what would it be? What would it look like? Lay out your vision for the best possible scenario trajectory for America. - The roaring '20s. I mean, look, couple things. It is remarkable over the last several years with all of the issues including, you know, not just everything in politics, but also COVID and every other thing that's happened. It's really amazing, the United States just kept growing. If you just look at economic growth charts, the US just kept growing, and very significantly, many other countries stopped growing. So Canada stopped growing, the UK has stopped growing, Germany has stopped growing, and you know, some of those countries may be actually growing backwards at this point. And there's a very long discussion to be had about what's wrong with those countries. And there's of course, plenty of things that are wrong with our country, but the US is just flat out primed for growth. And I think that's a consequence of many factors, you know, some of which are lucky and some of which through hard work. And so the lucky part is just, you know, number one, you know, we just have like incredible physical security by being our own continent. You know, we have incredible natural resources, right? There's this running joke now that like, whenever it looks like the US is gonna run out of some like rare earth material, you know, some farmer in North Dakota like kicks over a hay bale and finds like a $2 trillion deposit. Right, I mean, we're just like blessed, you know, with geography and with natural resources. Energy. You know, we can be energy independent anytime we want. This last administration decided they didn't wanna be, they wanted to turn off American energy. This new administration has declared that they have a goal of turning it on in a dramatic way. There's no question we can be energy independent, we can be a giant net energy exporter. It's purely a question of choice, and I think the new administration's gonna do that. And oh, and then I would say two other things. One is, you know, we are the beneficiaries, and, you know, you're an example of this. We're a beneficiary. We're the beneficiary of, you know, 50, 100, 200 years of like the basically most aggressive driven, smartest people in the world, most capable people, you know, moving to the US and raising their kids here. And so we just have, you know, we're by far the most dynamic population, most aggressive. You know, we're the most aggressive set of characters, certainly in any Western country, and have been for a long time, and certainly are today. And then finally, I would just say, look, we are overwhelmingly the advanced technology leader. You know, we have our issues and we have a... I would say particular issue with manufacturing, which we could talk about. But for, you know, anything in software, anything in AI, anything in, you know, all these, you know, advanced biotech, all these advanced areas of technology, like we're by far the leader. Again, in part 'cause many of the best scientists and engineers in those fields, you know, come to the US. And so we have all of the preconditions for a just a monster boom. You know, I could see economic growth going way up. I could see productivity growth going way up, rate of technology adoption going way up. And then we can do a global tour, if you like, but like, basically, all of our competitors have like profound issues and, you know, we could kind of go through them one by one, but the competitive landscape just is, it's like, it's remarkable how much better positioned we are for growth. - What about the humans themselves? Almost a philosophical questions. You know, I travel across the world and there's something about the American spirit, the entrepreneurial spirit that's uniquely intense in America. I don't know what that is. I've talked to Saagar who claims it might be the Scots-Irish blood that runs through the history of America. What is it? You, at the heart of Silicon Valley, is there something in the water? Why is there this entrepreneurial spirit? - Yeah. So is this a family show or am I allowed to swear? - You could say whatever the fuck you want. - (laughs) Okay. So the great TV show, "Succession," the show, of course, which you were intended to root for exactly zero of the characters. - Yes. - The best line from "Succession" was in the final episode of the first season when the whole family's over in Logan Roy's ancestral homeland of Scotland. And they're at this castle, you know, for some wedding. And Logan is just like completely miserable, have to having to, you know, 'cause he is been in New York for 50 years, he's totally miserable being back in Scotland. And he gets in some argument with somebody and he says, finally just says, "My God, I cannot wait to get outta here and go back to America where we can fuck without condoms." (both laughing) - Was that a metaphor or... Okay. - Exactly. Right. And so no, but it's exactly the thing, and everybody instantly knows what, like- - Yeah. - Everybody watching that instantly starts laughing 'cause you know what it means, which it's exactly this. I think there's like an ethnographic, you know, way of it. There's a bunch of books on, like you said, the Scots-Irish, like all the different derivations of all the different ethnic groups that have come to the US over the course of the last 400 years. Right, and what we have is this sort of amalgamation of like, you know, the Northeast, you know, Yankees who are like super tough and hardcore. Yeah, the Scots-Irish are super aggressive, you know, we've got the, you know, the Southerners and the Texans, you know, and you know, the sort of, you know, whole kind of blended, you know, kind of Anglo-Hispanic thing, you know, super, incredibly tough, strong, driven, you know, capable characters. You know, the Texas Rangers, you know, we've got the, yeah, we've got the California, you know, we've got the, you know, the wild, we've got the incredibly, you know, inventive hippies, but we also have the hardcore engineers. We've got, you know, the best, you know, rocket scientists in the world. We've got the best, you know, artists in the world, you know, creative professionals, you know, the best movies. And so yeah, there is, you know, I would say all of our problems, I think are basically, you know, in my view to some extent, you know, attempts to basically sand all that off and make everything basically boring and mediocre. But there is something in the national spirit that basically keeps bouncing back. And basically what we discover over time is we basically just need people to stand up at a certain point and say, you know, "It's time to build, it's time to grow, you know, it's time to do things." And there's something in the American spirit that just like roars right back to life. And I've seen it before. I actually saw, you know, I saw it as a kid here in the early '80s, you know, 'cause the '70s were like horribly depressing, right? In the US. Like they were a nightmare on many fronts. And in a lot of ways, the last decade to me has felt a lot like the '70s just being mired in misery and just this self-defeating, you know, negative attitude and everybody's upset about everything. And, you know, and then by the way, like energy crisis and hostage crisis and foreign wars and just demoralization, right? You know, the low point for in the '70s was, you know, Jimmy Carter who just passed away. He went on TV and he gave this speech known as the Malaise Speech. And it was like the weakest possible, trying to like rouse people back to a sense of like passion, he completely failed. And, you know, we had the, you know, the hostages in, you know, Iran for I think 440 days. And every night on the nightly news, it was, you know, lines around the block, energy crisis, depression, inflation. And then, you know, Reagan came in and, you know, Reagan was a very controversial character at the time, and, you know, he came in and he is like, "Yep, nope, it's morning in America and we're the shining city on the hill, and we're gonna do it." And he did it, and we did it. And the national spirit came roaring back and, you know, roared really hard for a full decade. And I think that's exactly what... I think, you know, we'll see, but I think that's what could happen here. - And I just did a super long podcast on Milton Friedman with Jennifer Burns, who's this incredible professor at Stanford, and he was part of the Reagan. So there's a bunch of components to that, one of which is economic. - And one of which maybe you can put a word on it of not to be romantic or anything, but freedom, individual freedom, economic freedom, political freedom, and just in general, individualism. - Yeah, that's right. Yeah, and as you know this, America has this incredible streak of individualism, you know, individualism in America probably peaked, I think between roughly call it the end of the Civil War, 1865 through to probably call it 1931 or something, you know, and there was this like incredible rush. I mean, that period, you know, we now know that period as the Second Industrial Revolution. And it's when the United States basically assumed global leadership and basically took over technological and economic leadership from England. And then, you know, that led to, you know, ultimately then therefore being able to, you know, not only industrialize the world, but also win World War II and then win the Cold War. And yeah, you know, massive individualistic streak. By the way, you know, Milton Friedman's old videos are all on YouTube. They are every bit as compelling and inspiring. - Yep. - As they were then, you know, he is a singular figure and many of us, you know, I never knew him, but he was actually at Stanford for many years at the Hoover Institution, but I never met him, but I know a lot of people who worked with him and you know, he was a singular figure, but all of his lessons, you know, live on or are fully available. But I would also say it's not just individualism, and this is, you know, this is one of the big things, it's like playing out in a lot of our culture and kind of political fights right now, which is, you know, basically this feeling, you know, certainly that I have and I share with a lot of people, which is, it's not enough for America to just be an economic zone. And it's not enough for us to just be individuals, and it's not enough to just have line go up, just have economic success. There are deeper questions at play, and also, you know, there's more to a country than just that. And you know, quite frankly, a lot of it is intangible. A lot of it is, you know, involve spirit and passion. And you know, like I said, we have more of it than anybody else, but, you know, we have to choose to want it. The way I look at, it's like all of our problems are self-inflicted. Like, you know, decline is a choice. You know, all of our problems are basically demoralization campaigns, you know, basically people telling us, people in positions of authority telling us that, you know, "We shouldn't, you know, stand out, we shouldn't be adventurous, we shouldn't be exciting, we shouldn't be exploratory, you know, we shouldn't this, that, and the other thing. And we should feel bad about everything that we do." And I think we've lived through a decade where that's been the prevailing theme. And I think quite honestly, as of November, I think people are done with it. - If we could go on a tangent of a tangent, since we're talking about individualism, and that's not all that it takes. You've mentioned in the past the book "The Ancient City." - By, if I could only pronounce the name, French historian Numa Denis Fustel de Coulanges, I don't know. - That was amazing. - Okay. All right. From the 19th century. Anyway, you said, this is an important book to understand who we are and where we come from. - So what that book does, it's actually quite a striking book. So that book is written by this guy as a (indistinct). I'm gonna let Lex do the pronunciations, the foreign language pronunciations for the day. He was a professor classics at the Sorbonne in Paris, you know, the top university, actually in the 1860s, so actually, right around after the US Civil War. And he was a savant of a particular kind, which is he, and you can see this in the book as he had apparently read, and, you know, sort of absorbed and memorized every possible scrap of Greek and Roman literature. And so it's like a walking like index on basically Greek and Roman, everything we know about Greek and Roman culture, and that's significant. The reason this matters is because basically none of that has changed, right? And so he had access to the exact same written materials that we have access to, and you know, we've learned nothing. And then specifically what he did is he talked about the Greeks and the Romans, but specifically what he did is he went back further. He reconstructed the people who came before the Greeks and the Romans and what their life and society was like. And these were the people who were now known as the Indo-Europeans. And these were, or you may have heard of these are the people who came down from the steppes. And so they came out of what's now like Eastern Europe, like around sort of the outskirts of what's now Russia. And then they sort of swept through Europe. They ultimately took over all of Europe, by the way, you know, almost many of the ethnicities in the Americas, the hundreds of years that follow, you know, are Indo-European. And so like, you know, they were this basically this warrior, basically class that like came down and swept through and you know, essentially, you know, populated much of the world. And there's a whole interesting saga there. But what he does, and then they basically, from there came basically what we know as the Greeks and the Romans were kind of evolutions off of that. And so what he reconstructs a sort of what life was like, at least in the West for people in their kind of original social state. And the significance of that is the original social state is this is living in the state of the absolute imperative for survival with absolutely no technology, (laughs) right? Like no modern systems, no nothing, right? You've got the clothes on your back, you've got your, you know, you've got whatever you can build with your bare hands, right? This is, you know, predates basically all concepts of technologies as we understand 'em today. And so these are people under like maximum levels of physical survival pressure. And so what social patterns did they evolve to be able to do that? And the social pattern basically was as follows, is a three-part social structure, family, tribe and city, and zero concept of individual rights and essentially no concept of individualism. And so you were not an individual, you were a member of your family. And then a set of families would aggregate into a tribe and then a set of tribes would aggregate into a city. And then the morality was completely, it was actually what Nietzsche talks about. The morality was entirely master morality, not slave morality. And so in their morality, anything that was strong was good, and anything that was weak was bad. And it's very clear why that is, right? It's 'cause strong equals good equals survive. Weak equals bad equals die. And that led to what became known later as the master-slave dialectic, which is it more important for you to live on your feet as a master, even at the risk of dying? Or are you willing to, you know, live as a slave on your knees in order to not die? And this is sort of the derivation of that moral framework. Christianity later inverted that moral framework. But it, you know, the original framework lasted for, you know, many, many thousands of years. No concept of individualism. The head of the family had total life and death control over the family, the head of the tribe, same thing, head of the city, same thing. And then you were morally obligated to kill members of the other cities on contact. (laughs) Right, you were morally required to. Like, if you didn't do it, you were a bad person. And then the form of the society was basically maximum fascism combined with maximum communism, right? And so it was maximum fascism in the form of this like absolute top-down control where the head of the family tribe or city could kill other members of the community at any time with no repercussions at all. So maximum hierarchy, but combined with maximum communism, which is no market economy and so everything gets shared, right? And sort of the point of being in one of these collectives is that it's a collective you know, and people are sharing and of course, that limited how big they could get 'cause you know, the problem with communism is it doesn't scale, right? It works at the level of a family. It's much harder to make it work at the level of a country. Impossible. Maximum fascism, maximum communism. And then it was all intricately tied into their religion. And their religion was, it was in two parts. It was veneration of ancestors and it was veneration of nature. And the veneration of ancestors is extremely important because it was basically the ancestors were the people who got you to where you were. The ancestors were the people who had everything to teach you, right? And then it was veneration of nature 'cause of course, nature is the thing that's trying to kill you. And then you had your ancestor, every family, tribe or city had their ancestor gods, and then they had their nature gods. Okay, so fast-forward to today, like we live in a world that is like radically different, and the book takes you through kind of what happened from that through the Greeks and Romans, through to Christianity. But it's very helpful to kind of think in these terms because the conventional view of the progress through time is that we are, you know, the cliche is the arc of the moral universe, you know, bend towards justice, right? Or so-called wig history, which is, you know, that the arc of progress is positive, right? And so, you know, what you hear all the time, what you're taught in school and everything is, you know, every year that goes by, we get better and better and more and more moral and more and more pure and a better version of ourselves, our Indo-European ancestors would say, "Oh, no, like you people have like fallen to shit. Like you people took all of the principles of basically your civilization, and you have diluted them down to the point where they barely even matter. You know, and you're having, you know, children outta a wedlock and you're, you know, you regularly encounter people of other cities and you don't try to kill them." And like, how crazy is that? And they would basically consider us to be living like an incredibly diluted version of this sort of highly religious, highly cult-like, right? Highly organized, highly fascist, communist society. I can't resist noting that as a consequence of basically going through all the transitions we've been through, going all the way through Christianity coming out the other end of Christianity, Nietzsche declares God is dead. We're in a secular society, you know, that still has, you know, tinges of Christianity, but you know, largely prides itself on no longer being religious in that way. You know, we being the sort of most fully evolved, modern secular, you know, expert, scientists and so forth have basically re-evolved or fallen back on the exact same religious structure that the Indo-Europeans had, specifically ancestor worship, which is identity politics and nature worship, which is environmentalism. And so we have actually like, worked our way all the way back to their cult religions without realizing it. And it just goes to show that like, you know, in some ways we have fallen far from the family tree, but in some cases, we're exactly the same. - You kind of described this progressive idea of wokeism and so on as worshiping ancestors. - Identity politics is worshiping ancestors, right? - It's tagging newborn infants with either, you know, benefits or responsibilities or, you know, levels of condemnation based on who their ancestors were. The Indo-Europeans would've recognized it on sight. We somehow think it's like super socially progressive. And it is not. - I mean, I would say obviously not. You know, get nuanced, which is where I think you're headed, which is look like, is the idea that you can like completely reinvent society every generation, and have no regard whatsoever for what came before you? That seems like a really bad idea, right? That's like the Cambodians with Year Zero under Pol Pot and, you know, death follows. It's obviously the Soviets tried that. You know, the utopian fantasists who think that they can just rip up everything that came before and create something new in the human condition and human society have a very bad history of causing, you know, enormous destruction. So on the one hand, it's like, okay, there is like a deeply important role for tradition. And the way I think about that is the process of evolutionary learning, right? Which is what tradition ought to be, is the distilled wisdom of all. And you know, this is what Indo-Europeans thought about. It should be the distilled wisdom of everybody who came before you, right? All those important and powerful lessons learned. And that's why I think it's fascinating to go back and study how these people lived is 'cause that's part of the history and you know, part of the learning that got us to where we're today. Having said that, there are many cultures around the world that are, you know, mired in tradition to the point of not being able to progress. And in fact, you might even say globally, that's the default human condition, which is, you know, a lot of people are in societies in which, you know, there's like absolute seniority by age, you know, kids are completely... You know, like in the US, like for some reason, we decided kids are in charge of everything, right? And like, you know, they're the trendsetters and they're allowed to like, set all the agendas and like set all the politics and set all the culture and maybe that's a little bit crazy. But like in a lot of other cultures, kids have no voice at all, no role at all. 'Cause it's the old people who are in charge of everything, you know, they're gerontocracies, and it's all a bunch of 80-year-olds running everything, which by the way, we have a little bit of that too, right? And so what I would say is like, there's a real downside, you know, full traditionalism is communitarianism, you know, it's ethnic particularism, you know, it's ethnic chauvinism, it's, you know, this incredible level of resistance to change. You know, I mean, it just doesn't get you anywhere. Like, it may be good and fine at the level of individual tribe, but as a society living in the modern world, you can't evolve, you can't advance, you can't participate in all the good things that, you know, that have happened. And so, you know, I think it probably, this is one of those things where extremists on either side is probably a bad idea, but this needs to be approached in a sophisticated and nuanced way. - So the beautiful picture you painted of the roaring '20s, how can the Trump administration play a part in making that future happen? - Yeah, so look, a big part of this is getting the government boot off the neck of the American economy, the American technology industry, the American people. You know, and again, this is a replay of what happened in the '60s and '70s, which is, you know, for what started out looking like, you know, I'm sure good and virtuous purposes, you know, we ended up both then and now with this, you know, what I describe as sort of a form of soft authoritarianism. You know, the good news is it's not like a military dictatorship. It's not like, you know, you get thrown into Lubyanka. You know, for the most part, it's not coming at 4:00 in the morning. You're not getting dragged off to a cell. So it's not hard authoritarianism, but it is soft authoritarianism. And so it's this, you know, incredible suppressive blanket of regulation rules, you know, this concept of a vetocracy, right? What's required to get anything done? You know, you need to get 40 people to sign off on anything, any one of them can veto it. You know, there's a lot of (indistinct) political system works. And then, you know, just this general idea of, you know, progress is bad, and technology is bad, and capitalism is bad, and building businesses is bad and success is bad. You know, tall poppy syndrome, you know, basically anybody who sticks their head up, you know, deserves to get it, you know, chopped off. Anybody who's wrong about anything deserves to get condemned forever. You know, just this very kind of, you know, grinding repression. And then coupled with specific government actions such as censorship regimes, right? And debanking, right? And, you know, draconian, you know, deliberately kneecapping, you know, critical American industries and then, you know, congratulating yourselves on the back for doing it, or, you know, having these horrible social policies, like let's let all the criminals outta jail and see what happens, right? And so, like we've just been through this period, you know, I call it a demoralization campaign. Like we've just been through this period where, you know, whether it started that way or not, it ended up basically being this comprehensive message that says, "You're terrible and if you try to do anything, you're terrible and fuck you." And the Biden administration reached kinda the full pinnacle of that in our time. They got really bad on many fronts at the same time. And so just like relieving that and getting kind of back to a reasonably, you know, kind of optimistic, constructive, you know, pro-growth frame of mind, there's so much pent-up energy and potentially in the American system, that alone is gonna, I think, cause, you know, growth and spirit to take off. And then there's a lot of things proactively that, yeah. And then there's a lot of things proactively that could be done. - So how do you relieve that? To what degree has the thing you describe ideologically permeated government and permeated big companies? - Disclaimer at first, which is I don't wanna predict anything on any of this stuff 'cause I've learned the hard way that I can't predict politics or Washington at all. But I would just say that the plans and intentions are clear and the staffing supports it, and all the conversations are consistent with the due administration and that they plan to take, you know, very rapid action on a lot of these fronts very quickly. They're gonna do as much as they can through executive orders, and then they're gonna do legislation and regulatory changes for the rest. And so they're gonna move, I think, quickly on a whole bunch of stuff. You can already feel, I think a shift in the national spirit, or at least, let's put it this way, I feel it for sure in Silicon Valley. Like, I mean, you know, we just saw a great example of this with what, you know, with what Mark Zuckerberg is doing, you know, and obviously I'm involved with his company, but you know, we just saw it kind of in public, the scope, and speed of the changes, you know, are reflective of a lot of these shifts. But I would say that same conversation, those same kinds of things are happening throughout the industry, right? And so the tech industry itself, whether people were pro-Trump or anti-Trump, like, there's just like a giant vibe shift mood shift that's like kicked in already. And then I was with a group of Hollywood people about two weeks ago, and they were still, you know, people who at least vocally were still very anti-Trump, but I said, you know, "Has anything changed since November 6th?" And they immediately said, "Oh, it's completely different. It feels like the ice has thawed. You know, woke is over." You know, they said that all kinds of projects are gonna be able to get made now they couldn't before that, you know, Hollywood's gonna start making comedies again. You know, like, they were just, just like an incredible immediate environmental change. And as I talk to people kind of throughout, you know, certainly throughout the economy, people who run businesses, I hear that all the time, which is just this last 10 years of misery is just over. I mean, the one that I'm watching that's really funny. I mean, Facebook's getting a lot, Meta's getting a lot of attention, but the other funny one is BlackRock, which I'm not, you know, and I don't know him, but I've watched for a long time. And so, you know, the Larry Fink, who's the CEO of BlackRock was like first in as a major, you know, investment CEO on like every dumb social trend and rule set, like every... All right, I'm going for it. Every retardant, (laughs) every retarded thing you can imagine. - Every ESG and every, like, every possible saddling companies with every aspect of just these crazed ideological positions. And, you know, he was coming in, he literally was like, had a aggregated together trillions of dollars of shareholdings that he did not, you know, that were his customer's rights. And he, you know, seized their voting control of their shares and was using it to force all these companies to do all of this like crazy ideological stuff. And he was like the Typhoid Mary of all this stuff in corporate America. And he in the last year has been like backpedaling from that stuff, like as fast as he possibly can. And I saw just an example, last week, he pulled out of the, whatever the Corporate Net-Zero Alliance, you know, he pulled out of the crazy energy stuff. And so, like, you know, he's backing away as fast as he can. Remember, the Richard Pryor backwards walk? Richard Pryor had this way where he could back out of a room while looking like he was walking forward. (Lex laughing) (laughs) And so, you know, even there doing that, and just the whole thing, I mean this, I dunno if you saw the court recently ruled that NASDAQ had these crazy board of directors composition rules. One of the funniest moments of my life is when my friend Peter Thiel and I were on the Meta board and these NASDAQ rules came down, mandated diversity on corporate boards. And so we sat around the table and had to figure out, you know, which of us counted as diverse. And the very professional attorneys at Meta explained with 100% complete straight face that Peter Thiel counts as diverse by virtue of being LGBT. And this is a guy who literally wrote a book called "The Diversity Myth." - And he literally looked like he'd swallowed a live goldfish and that- - And this was imposed, I mean, this was like so incredibly offensive to him that like, it was just absolutely appalling and I felt terrible for him. But the look in his face was very funny. And it was imposed by NASDAQ, you know, your stock exchange imposing this stuff on you, and then the court, whatever, the Court of Appeals just nuked that, you know, so like these things basically are being like ripped down one by one. And what's on the other side of it is basically, you know, finally being able to get back to, you know, everything that, you know, everybody always wanted to do, which is like, run their companies, have great products, have happy customers, you know, like succeed, achieve, outperform, and, you know, work with the best and the brightest and not be made to feel bad about it. And I think that's happening in many areas of American society. - It's great to hear that Peter Thiel is fundamentally a diversity hire. - Well, so it was very, you know, there was a moment. So you know, Peter, of course, you know, is publicly gay, has been for a long time, but you know, there are other men on the board, right? And, you know, we're sitting there and we're all looking at it, and we're like, all right, like, okay, LGBT, and we keep coming back to the B, right? And it's like- - You know, it's like- - All right. - You know, I'm willing to do a lot for this company, but- - It's all about sacrifice for diversity. - Well, yeah. And then it's like, okay, like is there a test? - Right. You know, so. - Oh, yeah, exactly. How do you prove it? - [Marc] The questions that got asked, you know. - What are you willing to do- - Yeah, and- - The greater good? - I've become very good at asking lawyers completely absurd questions with a totally straight face. - And do they answer with a straight face, like lawyers- - Sometimes. - Okay. - I think in fairness, they have trouble telling when I'm joking. - So you mentioned the Hollywood folks, maybe people in Silicon Valley and the vibe shift. Maybe you can speak to preference falsification. What do they actually believe? How many of them actually hate Trump? Like what percent of them are feeling this vibe shift and are interested in creating the roaring '20s in the way they've described? - So first, we should maybe talk population. So there's like all of Silicon Valley and the way to just measure that is just look at voting records, right? And what that shows consistently is Silicon Valley is just a, you know, at least historically, my entire time there has been overwhelmingly majority just straight up Democrat. The other way to look at that is political donation records. And again, you know, the political donations in the Valley, you know, range from 90 to 99%, you know, to one side. And so, you know, I just bring it up 'cause like, we'll see what happens with the voting and with donations going forward. We can maybe talk about the fire later, but I can tell you there is a very big question of what's happening in Los Angeles right now. I don't wanna get into the fire, but like, it's catastrophic. And, you know, there was already a rightward shift in the big cities in California, and I think a lot of people in LA are really thinking about things right now as they're trying to, you know, literally save their houses and save their families. But, you know, even in San Francisco, you know, there was a big shift to the right in the voting in '24. So, we'll see where that goes, but you know, you observe that by just looking at the numbers over time. The part that I'm more focused on is, you know, and I don't know how to exactly describe this, but it's like the top 1,000 or the top 10,000 people, right? You know, and I don't have a list, but like, you know, it's all the top founders, top CEOs, top executives, top engineers, top VCs, you know, and then kind of into the ranks, you know, the people who kind of built and run the companies. And they're, you know, I don't have numbers, but I have a much more tactile feel, you know, for what's happening. So the big thing I have now come to believe is that the idea that people have beliefs is mostly wrong. I think that most people just go along, and I think even most high-status people just go along. And I think maybe the most high-status people are the most prone to just go along because they're the most focused on status. And the way I would describe that is, you know, one of the great forbidden philosophers of our time is the Unabomber, Ted Kaczynski. And amidst his madness, he had this extremely interesting articulation. You know, he was an insane lunatic murderer, but he was also a Harvard super genius. Not that those are in conflict. But- - Shots fired, man. - But he was a very bright guy, and he did this whole thing where he talked about, basically he was very right-wing and talked about leftism a lot. And he had this great concept that's just stuck in my mind ever since I read it, which is he had this concept, you just called over-socialization. And so, you know, most people are socialized, like most people are, you know, we live in a society, most people learn how to be part of a society. They give some deference to the society. There's something about modern Western elites where they're over-socialized and they're just like overly oriented towards what other people like themselves, you know, think and believe. And you can get a real sense of that if you have a little bit of an outside perspective, which I just do, I think as a consequence of where I grew up. Like even before I had the views that I have today, there was always just this weird thing where it's like, why does every dinner party have the exact same conversation? Why does everybody agree on every single issue? Why is that agreement precisely what was in The New York Times today? Why are these positions not the same as they were five years ago? (laughs) Right? But why does everybody like snap into agreement every step of the way? And that was true when I came to Silicon Valley, and it's just as true today 30 years later. And so I think most people are just literally, I think they're taking their cues from, it's some combination of the press, the universities, the big foundations. So basically, it's like The New York Times, Harvard, the Ford Foundation, and you know, I don't know, you know, a few CEOs and a few public figures and you know, maybe the President if your party is in power. And like, whatever that is, everybody who's sort of good and proper and elite and good standing and in charge of things, and a sort of correct member of, you know, let's call it coastal American society, everybody just believes those things. And then, you know, the two interesting things about that is, number one, there's no divergence among the organs of power, right? So Harvard and Yale believed the exact same thing. The New York Times and The Washington Post believed the exact same thing. The Ford Foundation and the Rockefeller Foundation Google, and, you know, whatever, you know, Microsoft believed the exact same thing. But those things change over time, but there's never conflict in the moment, right? And so, you know, The New York Times and The Washington Post agreed on exactly everything in 1970, 1980, 1990, 2000, 2010, and 2020, despite the fact that the specifics changed radically. The lockstep was what mattered. And so I think basically, we in the valley, we're on the tail end of that, in the same way Hollywood's in the same way New York's the same way the media's on the tail end of that. It's like some sort of collective hive mind thing. And I just go through that to say like, I don't think most people in my orbit, or you know, let's say the top 10,000 people in the Valley, or the top 10,000 people in LA, I don't think they're sitting there thinking basically, I have rocks... I mean, they probably think they have rocks solid beliefs, but they don't actually have like some inner core of rocks solid beliefs. And then they kind of watch reality change around them and try to figure out how to keep their beliefs like correct. I don't think that's what happens. I think what happens is they conform to the belief system around them, and I think most of the time, they're not even aware that they're basically part of a herd. - Is it possible that the surface chatter of dinner parties, underneath that, there is a turmoil of ideas and thoughts and beliefs that's going on, but you're just talking to people really close to you or in your own mind, and the socialization happens at the dinner parties? Like when you go outside the inner circle of one, two, three, four people who you really trust, then you start to conform. But inside there, inside the mind, there is an actual belief or a struggle, attention within New York Times with the listener. For the listener, there's a slow smile that overtook Marc Andreessen's face. - So look, I'll just tell you what I think, which is at the dinner parties and at the conferences, no, there's none of that. What there is that all of the heretical conversations, anything that challenges the status quo, any heretical ideas and any new idea, you know, is a heretical idea. Any deviation is either discussed a one-on-one, face-to-face, it's like a whisper network or it's like a real-life social network. There's a secret handshake, which is like, okay, you meet somebody and you like know each other a little bit, but like not well. And like you're both trying to figure out if you can like talk to the other person openly or whether you have to like be fully conformist. It's a joke. - Well, yeah, humor- - [Marc] Somebody cracks a joke, right? Somebody cracks a joke. - If the other person laughs, the conversation is on. - [Lex] Yeah. Yeah. - If the other person doesn't laugh, back slowly away from the scene, (laughs) I didn't mean anything by it. And then by the way, it doesn't have to be like a super offensive joke. It just has to be a joke that's just up against the edge of one of the, use the Sam Bankman-Fried term, one of the chivalrous. You know, it has to be up against one of the things, you know, one of the things that you're absolutely required to believe to be the dinner parties. And then at that point, what happens is you have a peer-to-peer network, right? You have a one-to-one connection with somebody, and then you have your own, your little conspiracy of a thought criminality, and then you've probably been through this, you have your network of thought criminals, and then they have their network of thought criminals, and then you have this like delicate mating dance as to whether you should bring the thought criminals together, right? - And the fundamental mechanism of the dance is humor. - Yeah, it's humor like it, right? Well, of course. - Memes. Yeah. - Well, for two reasons. Number one, humor's a way to have deniability, right? Humor is a way to discuss serious thing without, with having deniability. Oh, I'm sorry. It was just a joke. Right? So that's part of it, which is one of the reasons why comedians can get away with saying things the rest of us can't. 'Cause, you know, they can always fall back on, oh, yeah, I was just going for the laugh. - But the other key thing about humor, right? Is that laughter's involuntary, right? Like, you either laugh or you don't. And it's not like a conscious decision whether you're gonna laugh. And everybody can tell when somebody's fake laughing, right? And this, every professional comedian knows this, right? The laughter is the clue that you're onto something truthful. Like, people don't laugh at like, made-up bullshit stories. They laugh 'cause like you're revealing something that they either have not been allowed to think about or have not been allowed to talk about, right? Or is off limits. And all of a sudden, it's like the ice breaks and it's like, oh, yeah, that's the thing. And it's funny and like I laugh, and then, of course, this is why, of course, live comedy is so powerful is 'cause you're all doing that at the same time, so you start to have, you know, the safety of numbers. And so the comedians have like the all, it's no surprise to me. Like for example, Joe has been as successful as he has 'cause they have this hack that the, you know, the rest of us who are not professional comedians don't have, but you have your in-person version of it. Yeah, and then you've got the question of whether you can sort of join the networks together. And then you've probably been to this is, you know, then at some point there's like a different, there's like the alt dinner party, the (indistinct) dinner party, and you get six or eight people together and you join the networks. And those are like the happiest, at least in the last decade, those are like the happiest moments of everybody's lives, 'cause they're just like, everybody's just ecstatic, 'cause they're like, I don't have to worry about getting yelled at and shamed, like for every third sentence that comes outta my mouth, and we can actually talk about real things. So that's the live version of it. And then, of course, the other side of it's the, you know, the group chat phenomenon, right? And then basically the same thing played out, you know, until Elon bought X and until Substack took off, you know, which were really the two big breakthroughs in free speech online, the same dynamic played out online, which is you had absolute conformity on the social networks, like literally enforced by the social networks themselves through censorship, and then also through cancellation campaigns and mobbing and shaming, right? But then group chats grew up to be the equivalent of samizdat, right? Anybody who grew up in the Soviet Union under, you know, communism, note, you know, they had the hard version of this, right? It is like, how do you know who you could talk to? And then how do you distribute information? And like, you know, again, that was the hard authoritarian version of this. And then we've been living through this weird mutant, you know, soft authoritarian version, but with, you know, with some of the same patterns. - And WhatsApp allows you to scale and make it more efficient to build on these groups of heretical ideas bonded by humor. - Yeah, exactly. Well, and this is the thing, and well, this is kind of the running joke about groups, right? The running kind of thing about group chats. It's not even a joke. It's true. It's like, every group chat, if you've noticed this like, this principle of group chats, every group chat ends up being about memes and humor. And the game of the group chat is to get as close to the line of being actually objectionable. - [Lex] Yeah. - As you can get without actually tripping it, right? And like literally every group chat that I have been in for the last decade, even if it starts some other direction, what ends up happening is it becomes the absolute comedy fest where, but it's walking, they walk right up the line and they're constantly testing. And every once in a while somebody will trip the line and people will freak out. And it's like, "Oh, too soon. Okay. You know, we gotta wait until next year to talk about that." You know, they walk it back. And so it's that same thing, and yeah. And then group chats is a technological phenomenon. It was amazing to see. 'Cause basically, it was number one, it was, you know, obviously the rise of smartphones, then it was the rise of the new messaging services, then it was the rise specifically of I would say combination of WhatsApp and Signal. And the reason for that is those were the two big systems that did the full encryption, so you actually felt safe. And then the real breakthrough, I think was disappearing messages, which hit Signal probably four or five years ago and hit WhatsApp three or four years ago. And then the combination of encryption and disappearing messages, I think really unleashed it. Well, then there's the fight over the length of the disappearing messages, right? And so it's like, you know, I often get behind on my thing, so I set to seven-day, you know, disappearing messages and my friends who, you know, are like, no, that's way too much risk. - It's gotta be a day. And then every once in a while somebody will set it to five minutes before they send something like particularly inflammatory. - Yeah, 100%. Well, what, I mean, one of the things that bothers me about WhatsApp, the choices between 24 hours and, you know, seven days, one day or seven days. - (laughs) Right. - And I have to have an existential crisis about deciding. - Whether I can last for seven days with what I'm about to say. (laughs) - Yeah, exactly. Now, of course, what's happening right now is the big thaw, right? And so the vibe shift. So what's happening on the other side of the election is, you know, Elon on Twitter two years ago and now Mark with Facebook and Instagram. And by the way, with the continued growth of Substack and with other, you know, new platforms that are emerging. You know, like I think it may be, you know, I don't know that everything just shifts back into public, but like a tremendous amount of the verboten conversations, you know, can now shifts back into public view. And I mean, quite frankly, this is one of those things, you know, quite frankly, even if I was opposed to what those, you know, what people are saying, and I'm sure I am in some cases, you know, I would argue still like net better for society that those things happen in public instead of private. You know, do you really want, like, yeah. Like does she wanna know? - And then it's just, look, it's just I think, clearly much healthier to live in a society in which people are not literally scared of what they're saying. - I mean, to push back, to come back to this idea that we're talking about. I do believe that people have beliefs and thoughts that are heretical, like a lot of people. I wonder what fraction of people have that? To me, the preference falsification is really interesting. What is the landscape of ideas that human civilization has in private as compared to what's out in public? 'Cause like that the dynamical system that is the difference between those two is fascinating. Like, throughout history, the fall of communism and multiple regimes throughout Europe is really interesting, 'cause everybody was following, you know, the line until not. - But for sure, privately, there was a huge number of boiling conversations happening, where like this is the bureaucracy of communism, the corruption of communism, all of that was really bothering people more and more and more and more. there's a trigger that allows the vibe shift to happen. To me, like the interesting question here is, what is the landscape of private thoughts and ideas and conversations that are happening under the surface of Americans? Especially, my question is how much dormant energy is there for this roaring '20s? What people are like, no more bullshit, let's get shit done. - Yeah, so we'll go through the theory of preference falsification just to- - [Lex] Yes. By the way, amazing. The books on this is fascinating. - Yeah, yeah. So this is exactly, this is one of the all-time great books. Incredibly, about 20, 30-year-old book, but it's completely modern and current in what it talks about as well as very deeply historically informed. So it's called "Private Truths, Public Lies." And it's written by a social science professor named Timur Kuran, at I think Duke, and his a definitive work on this. And so he has this concept, he calls preference falsification. And so preference falsification is two things, preference falsification... And you get it from the title of the book, "Private Truths, Public Lies." So preference falsification is when you believe something and you can't say it, or/and this is very important, you don't believe something and you must say it, right? And the commonality there is in both cases, you're lying. You believe something internally, and then you're lying about it in public. And so the thing, you know, and there's sort of the two classic forms of it. There's the, you know, for example, there's the, I believe communism is rotten, but I can't say it version of it. But then there's also the famous parable of the real-life example, but the thing that Vaclav Havel talks about in the other good book on this topic, which is "The Power of the Powerless," you know, who is an anti-communist resistance fighter who ultimately became the, you know, the president Czechoslovakia after the fall of the wall. But he wrote this book, and he describes the other side of this, which is workers of the world unite, right? And so he describes what he calls the parable of the greengrocer, which is your greengrocer in Prague in 1985. And for the last 70 years, it has been... 50 years, it's been absolutely mandatory to have a sign in the window of your story that says, "Workers of the world, unite," right? And it's 1985, it is like crystal clear that the workers of the world are not going to unite. (laughs) Like of all the things that could happen in the world, that is not going to happen. The Commies have been at that for 70 years, it is not happening. But that slogan had better be in your window every morning, because if it's not in your window every morning, you are not a good communist. The secret police are gonna come by and they're gonna get you. And so the first thing you do when you get to the store is you put that slogan in the window and you make sure that it stays in the window all day long. But he says, the thing is, every single person, the greengrocer knows the slogan is fake. He knows it's a lie. Every single person walking past the slogan knows that it's a lie. past the store knows that the greengrocer is only putting it up there because he has to lie in public. And the greengrocer has to go through the humiliation of knowing that everybody knows that he's caving into the system and lying in public. And so it turns into In fact, it's not ideological enforcement anymore because everybody knows it's fake. The authorities know it's fake, everybody knows it's fake. It's not that they're enforcing the actual ideology of the workers of the world uniting. It's that they are enforcing compliance, right? And compliance with the regime. And fuck you, you will comply, right? And so anyway, that's the other side of that. And of course, we have lived in the last decade through a lot of both of those. I think anybody listening to this could name a series of slogans that we've all been forced to chant for the last decade, that everybody knows at this point are just like, simply not true. I'll let the audience, you know, speculate on their own group chats. - Send Marc your memes online as well, please. - Yes, yes, exactly. Okay, so anyway, so it's the two sides of that, right? So it's "Private Truths, Public Lies." So then what preference falsification does is it talks about extending that from the idea of the individual experience in that to the idea of the entire society experiencing that, right? And this gets to your percentages question, which is like, okay, what happens in a society in which people are forced to lie in public about what they truly believe? What happens number one is that individually they're lying in public, and that's bad. But the other thing that happens is they no longer have an accurate gauge at all or any way to estimate how many people agree with them. And this is how you, and again, this literally is like how you get something like the communist system, which is like, okay, you end up in a situation in which 80 or 90 or 99% of a society can actually all be thinking individually, I really don't buy this anymore. And if anybody would just stand up and say it, I would be willing to go along with it, but I'm not gonna be the first one to put my head on the chopping block. But you have no, because of the suppression censorship, you have no way of knowing how many other people agree with you. And if the people who agree with you are 10% of the population and you become part of a movement, you're gonna get killed. If 90% of the people agree with you, you're gonna win the revolution, right? And so the question of like what the percentage actually is like a really critical question. And then, basically, in any sort of authoritarian system, you can't like run a survey, right? To get an accurate result. And so you actually can't know until you put it to the test. And then what he describes in the book is it's always put at the test in the same way. This is exactly what's happened for the last two years, like 100% of exactly what's happened. It's like straight outta this book, which is somebody, Elon, sticks his hand up (laughs) and says, "The workers of the world are not going to unite." Or the emperor is actually wearing no clothes, right? You know that famous parable, right? So one person stands up and does it, and literally that person is standing there by themselves, and everybody else in the audience is like, "Ooh, I wonder what's gonna happen to that guy," right? But again, nobody knows. Elon doesn't know, the first guy doesn't know, other people don't know, like, which way is this gonna go? And it may be that's a minority position and that's the way to get yourself killed. Or it may be that's a majority position and you are now the leader of a revolution. And then basically, of course, what happens is, okay, the first guy does that doesn't get killed, (laughs) the second guy does... Well, a lot of the time that guy does get killed, but when the guy doesn't get killed, then a second guy pops his head up, says the same thing, all right? Now, you've got two. Two leads to four, four leads to eight, eight leads to 16. And then as we saw with the fall of the Berlin Wall, this is what happened in Russia and Eastern Europe in '89, when it goes, it can go, right? And then it rips. And then what happens is very, very quickly, if it turns out that you had a large percentage of the population that actually believed the different thing, it turns out all of a sudden everybody has this giant epiphany that says, "Oh, I'm actually part of the majority." And at that point, like you were on the freight train to revolution, right? Like it is rolling. Right, now. The other part of this is the distinction between the role of the elites and the masses. And here the best book is called "The True Believer," which is the Eric Hoffer book. And so the nuance you have to put on this is the elites play a giant role in this 'cause the elites do idea formation and communication. But the elites, by definition are a small minority. And so there's also this giant role played by the masses, and the masses are not necessarily thinking these things through in the same intellectualized formal way that the elites are, but they are for sure experiencing these things in their daily lives, and they for sure have at least very strong emotional views on them. And so when you really get the revolution, it's when you get the elites lined up with, or either the current elites change or a new set of counter elites, basically come along and say, "No, there's actually a different better way to live." And then the people basically decide to follow the, you know, to follow the counter elite. So that's the other dimension to it. And of course, that part is also happening right now. And again, case study one of that would be Elon and you know, who turns out, you know, in truly massive following. - And he has done that over and over in different industries, not just saying crazy shit online, but saying crazy shit in the realm of space, in the realm of autonomous driving, in the realm of AI, just over and over and over again. Turns out saying crazy shit is one of the ways to do a revolution and to actually make progress. - Yeah. And it's like, well, but then there's the test. Is it crazy shit or is it the truth? You know, and this is where, you know, there are many specific things about Elon's genius, but one of the really core ones is an absolute dedication to the truth. And so when Elon says something, it sounds like crazy shit, but in his mind it's true. Now, is he always right? No. Sometimes the rockets crash, like, you know, sometimes he's wrong. Yeah, he's human, he's like anybody else. He's not right all the time. But at least my through line with him both in what he says in public and what he says in private, which by the way are the exact same things. He does not do this. He doesn't lie in public about what he believes in private, or at least he doesn't do that anymore. Like he's 100% consistent in my experience. By the way, there's two guys who are 100% consistent like that I know. Elon and Trump. - Whatever you think of them. - What they say in private is 100% identical to what they say in public. Like, they're completely transparent, they're completely honest in that way, right? Which is like, and again, it's not like they're perfect people, but they're honest in that way. And it makes them potentially both as they have been very powerful leaders of these movements, 'cause they're both willing to stand up and say the thing that if it's true, it turns out to be the thing in many cases that many or most or almost everyone else actually believes, but nobody was actually willing to say out loud. And so they can actually catalyze these shifts. And I mean, I think this framework is exactly why Trump took over the Republican Party, as I think Trump stood up there on stage with all these other kind of conventional Republicans, and he started saying things out loud that it turned out the base really was, they were either already believing or they were prone to believe, and he was the only one who was saying them. And so the again, elite masses, he was the elite, the voters of the masses and the voters decided, you know, no, no more bushes, like we're going this other direction. That's the mechanism of social change. Like what we just described is like the actual mechanism of social change. It is fascinating to me that we have been living through exactly this. We've been living through everything exactly what Timur Kuran describes, everything that Vaclav Havel described, (laughs) you know, Black Squares and Instagram, like the whole thing, right? All of it. And we've been living through the, you know, the true believer elites masses, you know, thing with, you know, with a set of like basically incredibly corrupt elites wondering why they don't have the loyalty masses anymore, and a set of new elites that are running away with things. And so like, we're living through this like incredible applied case study of these ideas. And you know, if there's a moral of the story, it is, you know, I think fairly obvious, which is it's a really bad idea for a society to wedge itself into a position in which most people don't believe the fundamental precepts of what they're told they have to do, you know, to be good people like that. That is just not a good state to be in. - So one of the ways to avoid that in the future maybe, is to keep the delta between what's said in private and what's said in public small. - Yeah. It's like, well, this is sort of the siren song of censorship is we can keep people from saying things, which means we can keep people from thinking things. - And you know, by the way, that may work for a while, right? Like, you know, I mean, again, the hard form, you know, Soviet Union owning a mimeograph, pre-photocopiers, there were mimeograph machines that were used to make samizdat and underground newspapers, which is the mechanism of written communication of radical ideas. Ownership of a mimeograph machine was punishable by death, right? So that's the hard version, right? You know, the soft version is somebody clicks a button in Washington and you are erased from the internet, right? Like, which, you know, good news, you're still alive. Bad news is, you know, shame about not being able to get a job. You know, too bad your family now, you know, they hates you and won't talk to you, but you know, you know, whatever the version of cancellation has been. And so like, does that work? Like maybe it works for a while, like it worked for the Soviet Union for a while, you know, in its way, especially when it was coupled with, you know, official state power. But when it unwinds, it can unwind with like incredible speed and ferocity. 'Cause to your point, there's all this bottled up energy. Now, your question was like, what are the percentages? Like what's the breakdown? And so my rough guess, just based on what I've seen in my world is it's something like 20, 60, 20. It's like you've got 20%, like true believers in whatever is, you know, the current thing, you know, you got 20% of people who are just like true believers of whatever they, you know, whatever's in the new, like I say, whatever's in The New York Times, Harvard professors and the Ford Foundation, like they're just believe. And by the way, maybe it's 10, maybe it's five, but let's say generously it's 20. So you know, 20% kind of full-on revolutionaries. And then you've got, let's call it 20% on the other side that are like, "No, I'm not on board with this. This is crazy. I'm not signing up for this." But, you know, they view themselves as they're in a small minority, and in fact, they start out in a small minority, 'cause what happens is the 60% go with the first 20%, not the second 20%. So you've got this large middle of people. And it's not that the people in the middle are not smart or anything like that. It's that they just have like normal lives and they're just trying to get by and they're just trying to go to work each day and do a good job and be a good person and raise their kids and, you know, have a little bit of time to watch the game. And they're just not engaged in the cut and thrust of, you know, political activism or any of this stuff. It's just not their thing. But that's where the over socialization comes in, it's just like, okay, by default, the 60% will go along with the 20% of the radical revolutionaries, at least for a while. And then the counter elite is in this other 20%. And over time, they build up a theory and network and ability to resist and a new set of representatives, in a new set of ideas. And then at some point there's a contest and then, right? And then the question is, what happens in the middle? What happens in the 60%? And it's kinda my point, it's not even really does the 60% change their beliefs as much as it's like, okay, what is the thing that 60% now decides to basically fall into step with? And I think that, in the valley, that 60% for the last decade decided to be woke and, you know, extremely, I would say, (laughs) on edge on a lot of things. And you know, that 60% is pivoting in real time. They're just done. They've just had it. - And I would love to see where that pivot goes 'cause there's internal battles happening right now, right? - So this is the other thing, okay, so there's two forms of things, and Timur has actually talked about this, Professor Kuran has talked about this. So one is, he said, this is the kind of unwind where what you're gonna have is you're now gonna have people in the other direction. You're gonna have people who claim that they supported Trump all along, who actually didn't, (laughs) - So it's gonna swing the other way. And by the way, Trump's not the only part of this, but you know, he's just a convenient shorthand for, you know, for a lot of this. But, you know, whatever it is, you'll have people who will say, well, I never supported the EI, right? Or I never supported ESG, or I never thought we should have canceled that person, right? Where of course, they were full on a part of the mob, like, you know, kind of at that moment. And so anyway, so you'll have preference falsification happening in the other direction. And his prediction, I think, basically is you'll end up with the same quote, "problem" on the other side. Now, will that happen here? You know, how far is American society willing to go on any of these things? But like, there is some question there. And then the other part of it is, okay, now you have this, you know, elite that is used to being in power for the last decade. And by the way, many of those people are still in power and they're in very, you know, important positions. And The New York Times is still The New York Times, and Harvard is still Harvard. And like, those people haven't changed like at all, right? And bureaucrats in the governments and, you know, senior democratic, you know, politicians and so forth. And they're sitting there, you know, right now feeling like reality has just smacked them hard in the face 'cause they lost the election so badly. But they're now going into a, and specifically the Democratic Party, is going into a Civil War, right? And that form of the Civil War is completely predictable and it's exactly what's happening, which is half of them are saying, we need to go back to the center. We need to de-radicalize 'cause we've lost the people. We've lost the people in the middle and so we need to go back to the middle in order to be able to get 50% plus one in an election, right? And then the other half of them are saying, "No, we weren't true to our principles. We were too weak, we were too soft. You know, we must become more revolutionary. We must double down and we must, you know, celebrate, you know, murders in the street of health insurance executives." And that right now is like a real fight. - If I could tell you a little personal story that breaks my heart a little bit, there's a professor, a historian, I won't say who, who I admire deeply, love his work. He's a kind of a heretical thinker. And we were talking about having a podcast, on doing a podcast. And he eventually said that, "You know what, at this time, given your guest list, I just don't want the headache of being in the faculty meetings in my particular institution." And I asked, "Who are the particular figures in this guest list?" He said, "Trump." And the second one, he said, "That you announced your interest to talk to Vladimir Putin." So I just don't want the headache. Now, I fully believe it would surprise a lot of people if I said who it is. You know, this is a person who's not bothered by the guest list. And I should also say that 80-plus percent of the guest list is left wing. Okay? Nevertheless, he just doesn't want the headache. And that speaks to the thing that you've kind of mentioned, that you just don't want the headache. You just want to just have a pleasant morning with some coffee and talk to your fellow professors. And I think a lot of people are feeling that in universities and in other contexts, in tech companies. And I wonder if that shifts, how quickly that shifts? And there, the percentages you mentioned 20, 60, 20 matters and the contents of the private groups matters, and the dynamics of how that shifts matters. 'Cause it's very possible, nothing really changes in universities and in major tech companies. There's a kind of excitement right now for potential revolution and these new ideas, these new vibes to reverberate through these companies and universities, but it's possible the wall will hold. So he's a friend of yours, I respect that you don't wanna name him. I also respect you don't wanna beat on him, so I would like to beat on him on your behalf. Does he have tenure? He should use it. - So this is the thing, right? This is the ultimate indictment of the corruption and the rot at the heart of our education system, at the heart of these universities. And it's, by the way, it's like across the board, it's like all the top universities. It's like, 'cause the siren song for right? What it's been for 70 years, whatever, of the tenure system, peer review system, tenure system, which is like, yeah, you work your butt off as an academic to get a professorship and then to get tenure, because then you can say what you actually think, right? Then you can do your work and your research and your speaking and your teaching without fear of being fired, right? Without fear of being canceled. Like academic freedom. I mean, think of the term academic freedom and then think of what these people have done to it. Like it's gone, like that entire thing was fake and is completely rotten. And these people are completely, completely giving up the entire moral foundation of the system that's been built for them, which by the way, is paid for virtually 100% by taxpayer money. - What's the inkling of hope in this? Like what this particular person and others who hear this, what can give them strength, inspiration, and courage? - That the population at large is gonna realize the corruption in their industry and it's going to withdraw the funding? - (laughs) It's okay. So desperation. (laughs) - No, no, no, no, no. Think about what happens next. Okay, so let's go through it. So the universities are funded by four primary sources of federal funding. The big one is a federal student loan program, in the many trillions of dollars at this point. And then only spiraling, you know, way faster than inflation. That's number one. Number two is federal research funding, which is also very large. And you probably know that when a scientist at the university gets a research grant, the university rakes as much as 70% of the money for central uses. - Number three is tax exemption at the operating level, which is based on the idea that these are nonprofit institutions as opposed to, let's say, political institutions. And then number four is tax exemptions at the endowment level, you know, which is the financial buffer that these places have. Anybody who's been close to a university budget will basically see that what would happen if you withdrew those sources of federal taxpayer money, and then for the state schools, the state money, they all instantly go bankrupt. And then you could rebuild. Then you could rebuild, 'cause the problem right now, you know, like the folks at University of Austin are like mounting a very valiant effort, and I hope that they succeed and I'm cheering for them, but the problem is, you're now inserting. Suppose you and I wanna start a new university and we wanna hire all the free thinking professors, and we wanna have the place that fixes all this. Practically speaking, we can't do it because we can't get access to that money. I'll give you the most direct reason, we can't get access to that money, we can't get access to federal student funding. Do you know how universities are accredited for the purpose of getting access to federal student funding? Federal student loans? They're accredited by the government, but not directly, indirectly. They're not accredited by the Department of Education. Instead, what happens is, the Department of Education accredits accreditation bureaus that are nonprofits that do the accreditation. Guess what the composition of the accreditation bureaus is? The existing universities. They're in complete control. The incumbents are in complete control as to who gets access to federal student loan money. Guess how enthusiastic they are about accrediting a new university? Right, and so we have a government funded and supported cartel that has gone... I mean, it's just obvious now. It's just gone like sideways in basically any possible way it could go sideways, including, I mean, literally as you know, students getting beaten up on campus for being, you know, the wrong religion. They're just wrong in every possible way at this point. And it's all in the federal taxpayer back. And there is no way, I mean, my opinion, there is no way to fix these things without replacing them. And there's no way to replace them without letting them fail. And by the way, it's like everything in life. I mean, in a sense, this is like the most obvious conclusion of all time, which is what happens in the business world when a company does a bad job, is they go bankrupt and another company takes its place, right? And that's how you get progress. And of course, below that is what happens is this is the process of evolution, right? Why does anything ever get better? 'Cause things are tested and tried, and then you, you know, the things that are good survive. And so these places have cut themselves off. They've been allowed to cut themselves off from both, from evolution at the institutional level and evolution of the individual level as shown by the just widespread abuse of tenure. And so we've just stalled out. We built an ossified system, an ossified, centralized, corrupt system, where we're surprised by the results. They are not fixable in their current form. - I disagree with you on that. Maybe it's grounded in hope that I believe you can revolutionize the system from within because I do believe Stanford and MIT are important. - Oh, but that logic doesn't follow at all. That's underpants gnome logic. - Underpants gnome, can you explain what that means? - Underpants gnomes logic. So I just started watching a key touchstone of American culture with my nine-year-old, which of course is "South Park." - And there is- - Wow. - And there is a, which by the way is a little aggressive for a nine-year-old. - Very aggressive. - But he likes it. So he's learning all kinds of new words. - And all kinds of new ideas. But yeah, go on. - I told him, I said, "You're gonna hear words on here that you are not allowed to use." - Right. (laughs) Education. - And I said, "You know how we have an agreement that we never lie to mommy?" - I said, "Not using a word that you learn in here does not count as lying." - [Lex] Wow. - "And keep that in mind." - This is Orwellian redefinition of lying. But yes, go ahead. - And of course, in the very opening episode, in the first 30 seconds, one of the kids calls the other kid a dildo. Right, we're off to the races. - Yep. Let's go. - "Daddy, what's a dildo?" - [Lex] Yep. - So, you know, "Sorry son, I don't know." - So the- - Underpants gnome. - So famous episode of "South Park," the underpants gnomes. So there's this rat... All the kids basically realize that their underpants are going missing from their dresser drawers. Somebody's stealing the underpants. And it's just like, well, who on earth would steal the underpants? And it turns out it's the underpants gnomes. And it turns out the underpants gnomes that come to town and they've got this little underground warrant of tunnels in storage places for all the underpants. And so they go out at night, they steal the underpants, and the kids discover that, you know, the underpants gnomes, and they're, you know, "What are you doing? Like what's the point of this?" And so the underpants gnomes present their master plan, which is a three-part plan, which is step one, collect underpants, step three, profit. - [Marc] Step two, question mark. - [Lex] Yeah, yeah. - So you just proposed the underpants gnome- - Which is very common in politics. Oh, so the form of this in politics is we must do something. - This is something, therefore we must do this. But there's no causal logic chain in there at all to expect that's actually gonna succeed 'cause there's no reason to believe that it is. - Yeah, but- - And it's the same thing, but this is what I hear all the time, and I will let you talk as the host of the show in a moment, but I hear this all the time. I hear this, I have friends who are on these boards, - Very involved in these places, and I hear this all the time, which is like, "Oh, these are very important. We must fix them." And so therefore, they're fixable. There's no logic chain there at all. - If there's that pressure that you described in terms of cutting funding, then you have the leverage to fire a lot of the administration and have new leadership that steps up that aligns with this vision that things really need to change at the heads of the universities. And they put students and faculty primary, fire a lot of the administration and realign and reinvigorate this idea of freedom of thought and intellectual freedom. I mean, I don't... Because there is already a framework of great institutions that's there, and the way they talk about what it means to be a great institution is aligned with this very idea that you're talking about. It's this meaning like intellectual freedom, the idea of tenure, right? On the surface it's aligned, underneath it's become corrupted. - If we say free speech and academic freedom, often enough, sooner or later, these tenured professors will get brave. - Wait, do you think the universities are fundamentally broken? Okay, so how do you fix it? How do you have institutions for educating 20-year-olds and institutions that host researchers that have the freedom to do epic shit, like research-type shit that's outside the scopes of R&D departments and inside companies? So how do you create institution like that? - How do you create a good restaurant when the one down the street sucks? - Right. You invent something new? - You open a new restaurant. - Like how often in your life have you experienced a restaurant that's just absolutely horrible, and it's poisoning all of its customers and the food tastes terrible, and then three years later you go back and it's fantastic? Charlie Munger actually had the best comment on, this great investor, Charlie Munger, has great comment. He was once asked, he's like, you know, his, you know, General Electric was going through all these challenges and he was asked to do Q&A. It said, "How would you fix the culture at General Electric?" And he said, "Fix the culture at General Electric?" He said, "I couldn't even fix the culture at a restaurant." Like, it's insane. Like obviously you can't do it. - Nobody in business thinks you can do that. Like, it's impossible. Like it's not, now look, having said all that, I should also express this 'cause I have a lot of friends who work at these places and are involved in various attempts to fix these. I hope that I'm wrong, I would love to be wrong. I would love for the underpants gnome step two to be something clear and straightforward that they can figure out how to do. I would love to fix it, I'd love to see them come back to their spoken principles, I think that'd be great. I'd love to see the professors with tenure get bravery. I would love to see, I mean, it would be fantastic. You know, my partner and I have done like a lot of public speaking on this topic, it's been intended to not just be harsh, but also be like, okay, like these challenges have to be confronted directly. By the way, let me also say something positive. You know, especially post-October 7th, there are a bunch of very smart people who are major donors and board members of these institutions like Marc…

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