Andreessen Horowitz co-founder Marc Andreessen and Greylock partner Reid Hoffman talk with Recode's Kara Swisher about where innovation, corporate responsibility and politics in Silicon Valley are heading. Andreessen pushes back on the idea that mainstream news outlets have more share of the truth than Breitbart News, and Hoffman discusses his progressive political tech initiative Win the Future, which so far has raised "millions" of dollars. Andreessen says his firm is actively investing in bringing tech into three highly regulated and slowly growing segments of the economy — health care, education and construction — while Hoffman is interested in businesses with network effects. They also discuss the impact of new technologies like robots and autonomous vehicles on the world's jobs, and why completely new industries might be created as a result of this technological change.
United States


00:00:00Hi i'm cara swisher peter copter and thanks for listening to recode replay this is one of the sessions from our two thousand seventeen code conference We're gonna want you here in just a second for free you're welcome but before we do that we want to plug another conference
00:00:14Okay fine if you insist i must i must if you like this event there's a very good chance you're going to like code media two thousand eighteen february twelfth and thirteenth in huntington beach california thousand eighteen can't believe next year you're absolutely save the date peter and i
00:00:31will both be there which means it's going to be a fantastic event i've been to all of them and i have learned things i would actually pay for them Peter we may charge you this year one more time that's code media two thousand eighteen it's like this event
00:00:41but it's in two thousand eighteen february twelfth and thirteenth goto events dot recode dot net for all the deets as the kids say as the kids say thanks peter speaking of people that have had impact on us there to know two more people that do in silicon valley
00:00:58er right now and for a long time uh then these two guys i've known them both for a long long time on dh have had many many debates with each of them especially one of them um named mark injuries and for a long time now so let's bring
00:01:14them out Mark and recent and reid hoffman Hello So er you know he was mark andriessen has this habit of texting me really rude things almost continually on dh While i was sitting backstage within ten feet of him he was tweeting at me about that last talk So
00:01:40what did you i think it's very important because i think facebook is sucking the life out of us So what do you think That's The opening question outstanding S oh it's a sitting facebook director I i politely declined answer but let me let me let me generalize out
00:01:58So this is something no one hears about the internet very shy on this one hears about the internet a lot so way Start by saying that that gentleman i'm sure he's doing fantastic work and he clearly means well i really really deeply disagree with everything he just said
00:02:10and the reason is because not just cause i have some rolling and in creating the whole thing but but uh a friend of mine a bow cronin who works in v r is advanced thinker on these things has a term hughes is called reality privilege um and so
00:02:27it's the view from the from the box seats it's the view from the it's a view from places in the world that's exactly the kind of you you get from places in the world in which there are super rich real world experiences tohave right And so you grew
00:02:39up in upper middle class community probably on the coast you have thes incredible schools you have these incredible enriched activities you have all these after school activities you should develop these incredible people to talk to you go to a college campus you get you know you get to
00:02:51hang out with all these incredible super geniuses for the point zero zero one percent of the population the world who gets to do all those things that this internet thing is a big step down for everybody else the internet is a giant step up right most people don't
00:03:04have that level of reality privilege like most people grew up in places where there's a much higher level of what you might call intellectual deprivation there's just not that many people around to talk to there's just not that many interesting things being discussed there's not that many great
00:03:15experiences tohave it's hard to learn new things the schools aren't good i mean all kinds you know most kids in the world don't even go to school like go to school up to the great for great sex is great you just can't progress beyond that point Because there's
00:03:25there's nothing locally There's there's there's Just no local system infrastructure our community to be able to engage on ideas And so the internet represents a giant level up on all those topics For most the world i think it's a fantastic thing All right Okay well then find snapchat
00:03:39for everybody So uh so remind you like tio Oh well so look i think that it's it's correct that there's various forms of kind of call it commercial system biases that come out which is cos try to say look we want to occupy a bunch of times we
00:03:56try to figure out howto have that time be occupied and this is the similar true This range is everything from the agriculture industry which says we'll eat more sugar like you have these commercial biases the whole way through and we adjust them Now that being said the overall
00:04:09system is better and we continue it right And so i think that one of the other things frequently is not realizing there's things you can do to change for mohr of thee the kind of the good and the bad and these things and obviously i am less focused
00:04:23at the moment on questions around autoplay or kind of equivalent and i'm more focused on questions about like how do we get to discernment of truth and how do we get like truth the media What is this whole fake news and all you know fax and all that
00:04:38kind of stuff and that is i think i'm much more deep issue that i'm focused on the moment well i think one of the things that one of the reasons i wanted to have these two was one because you make investments you change cos you decide you make
00:04:50a lot of decisions that impact other people to your your super argumentative and debating about what where that's going you know where it happened and i wanted people get a sense from both of you of how we're innovations going how it's going because you're in none in charge
00:05:04of it but very influential to the process both of you in different ways so let's start on that idea that you just talked about which brings in all of socially i'm not going to pull up facebook but all of social media the idea it's something i've been railing
00:05:17on recently for some reason is that responsibility the social responsibility the civil responsibility of social media companies and other companies in silicon valley to not to stop pretending these platforms or benign so as someone who's created these platforms each of you each of you on your part how
00:05:36do you look at them now because they think they've morphed in ways some people think socially has become weaponize some people think other things but that that mark and mark zuckerberg i'm talking about this a lot the idea of the responsibility so how do you look at where
00:05:50we are right now for silicon valley Why don't we start with you mark are just how do you look Okay I'm happy okay uh look so i think that the question is is that way had presumed that broad brush that most people could kind of make ascertain shin
00:06:06of truth within their kind of normal set and i think actually in fact it is somewhat hackable it's it's filter bubbles is one of things that people talk about a lot in the valley and kind of how do you make sure that you're not blinded by it You
00:06:19have communications ago across that there's questions about uh assertion of you know what is the most relevant fact or you know i don't think there is any such thing as an alternative fact you know i think that's that's that's that's george orwell and aldous huxley speak but the
00:06:38uh but i think that the question is how do we help people figure out better guide post to the truth because simply being as part of the feed on the screen sometimes is treated is too much of that must be true and so what i think is good
00:06:55is is i think the whole industry and i've been part of a number of conversations about okay what are the right ways to do that And part of the reason why they try to say it's more platform I don't know if it's trying to say it's benign is
00:07:06trying to say we're not trying to impose a point of view We're trying to help you get to truth it's kind of classic like what is the algorithm part of it And and so i think that there's a lot of thinking now about like what are the different
00:07:19ways you can do that One of the things that i think is is important is perhaps building that out of the kinds of things we trust like we trust other people And can we get to some kind of version of okay I know this kind of information is
00:07:33much more contentious there's a lot of people disagree with this kind of information is is something that i can rely upon more and i think we need to get to that kind of scoring system and i think we need to make it simple enough that it helps unify
00:07:46discourse across country how do you look at this so i think truth has become shorthand for things that people on the coasts believe okay on fake news or false whatever alternate facts has become shorthand for people things that people in the center of the country believe i think
00:07:59this whole topic has gone completely off base somehow in the wake of the elections so if you read the coast press which doesn't generally spectacular job i think covering the election last year but if you just read the press in aggregate weight of the story is the overwhelming
00:08:12thing that you were carried away with was there is no way on earth that donald trump could win this election right It's impossible you're the fantastic editor of the new york times appear on stage today they had the day of the election they had hillary that morning at
00:08:23ninety two ninety two percent of winning the election and i saw that ninety two percent so it actually turned out if you actually wanted to see if you actually wanted last year in twenty sixteen to read the story of the election have to get the truth you read
00:08:32breitbart now nobody wants to hear that because we all like have concluded that right bart is like absurd right wing propaganda and that somehow you know the traditional the coastal presses somehow the truth but like itjust like demonstrably last year that was not true so i just think
00:08:45we all just need to take a step back on this idea that there's absolute truth and that somehow we somehow have some sort of monopoly or preferential access to it and the rest of these people kind of don't understand anything by the way it's a surefire way to
00:08:54lose elections because if democrats are ever gonna lose elections ever going to win elections again in the center of the country and south of the country they have to show up with some message other than you're all a bunch of morons just that that's not gonna work that's
00:09:06not that doesn't put the point is are these you khun splittism that is the message yes but i think that's what's being hurt yes but that's an easy shorthand way of saying no matter what they say on the left the either coast is untrue you khun say untruth
00:09:20to people and get them to vote a certain way i mean it's very you know it you know if you want if you want if you like your health care plan you can keep it right right Obama two thousand eight right obamacare like how does that look like
00:09:31i'm going to close I'm gonna i'm gonna close guantanamo in my first year in office you don't like for some reason but the fact that politicians break promises to us is not it is not a very big if you read the press coverage of those promises of the
00:09:42time they represented a street they're presented is yes these air absolutely things they're goingto happen like there was there were reams of coverage around obamacare of how well it was going to work right Getting from the news coverage What is the responsibility of these platforms Do they have
00:09:53any Because dean would say no he did he said no they're just there is platforms he didn't he thought the new york times that responsibility they necessarily don't do you imagine all these all these technology papuans have any socialist mark has been talking about it a lot he's
00:10:08been visiting lots of the country has been petting livestock quite a bit which is nice Do you know how fluffy calls are that they are apparently wells or super I have been around many cows i am aware of cow's butt How do you how do you look at
00:10:25that responsible Because everyone seems to be visiting the mid doing that kind of thing they aren't still coming How do you look at the is there a social responsibly for this technology Now you're not going where i grew up i was amazing thing i've ever seen On the
00:10:38left and i'm going so i'm gonna frustrate i'm gonna i'm gonna frustrate i'm just not going i can't time setting doctor face like i need to let facebook talk about facebook but just in general like as technology evolves do you think that silicon valley needs to have more
00:10:49of a social conscience So i think it's definitely good idea for businesses stuff social conscience and but again this is where i would say i believe there is much more but it's become very trendy to claim that the silicon valley doesn't have a social conscience and it's just
00:11:00the default assumption is that all these companies were doing horrible things all the time and i just don't think it's true okay all right so i don't think the situation is anywhere near is polarized people are presenting it well people like tio but by the way silicon valley
00:11:10just if i could for silicon valley people people in a beer in my blood and you will so two years ago two years ago twenty two years ago the conventional wisdom right around much of the rest of the country and that you read actually frankly a lot of
00:11:22press coverage in silicon valley was its this hotbed of like these crazy libertarians like these crazy extreme outlier like you know fringe elements and of course our friend peter is kind of it was always kind of held up think good friend peter a very good friend peter Actually
00:11:35i was held up this kind of representative of the valley right A funny thing happened last year which was it turns out that was fake news It turns out that was not true In fact it turns out the opposite is true which is the ninety nine point nine
00:11:48nine Nine percent of silicon valley last year voted for hillary clinton supported hillary clinton donated to hillary clinton like it was over It was like the money difference I don't know it's like some giant multiple money difference Basically nobody nobody nobody gives trump so the valley not only
00:11:59way by the way i point at you tweeted i'm with her correct that is if it is true i will I will concede that subsequently ways subsequently deleted all my tweets including that i will cop to that I think silicon valley not only has has a real sense
00:12:15of social responsibility If anything silicon valley is all the way over on the other side cilic valley is extremely left way extremely liberal on actually think this is now this has become part of the problem It's now you have the other version of the problem which is actually
00:12:27i think it's really hard for a lot of people in silicon valley even articulate the other side thiss point it's hard to even articulate the case for voting for donald trump i think it's hard to articulate what people the midwest the south were thinking and i think this
00:12:37polarization thing is the general problem and i was talking about earlier but i think that i think the valley is part of the coast polarizing from the center of the country to a much greater extreme than we've ever seen in our lifetimes All right now this does not
00:12:50left unchecked This does not have to good places Okay this is great cause you don't want to talk about politics at all but great okay so you have been very active in that left wing kobol apparently that's way it's like it's like nearly everybody know it's a good
00:13:05ball So talk about what you're doing because i think people are people are looking to you everyone says we've got to get read as the leader of this group Yes but i do i do i don't know So talk about what you're doing with mark pincus and others
00:13:20Yes oh mark who's here in the audience hey and i started talking years ago about how do you essentially try tio create consumer technologies to help shape a kind of pro business and also pro kind of social values future and how do you put that together Into a
00:13:36moment cause actually think part of the whole thing is to get the bridge building to make the right thing and i think part of the social responsibility for these growing strength of tech platforms is to make that happen So i think there is i think there is responsibility
00:13:49i think it's a growing sense of it and i think people are trying to figure out what it means and how to operationalize it the right way and then personally you know it's everything from obviously part of the the question that that led to the election of donald
00:14:01trump is there's a lot of people in a number of states that are feeling in pain they worry that their children have less good futures and they had there is you know kind of serious opioid epidemics and a number of different states and regions and they say look
00:14:15these need to be fixed don't tell us more of the same tell us how we have opportunity to tell us how we make that happen and i think you know part of the thing about being inventive being problem solvers because that's part of what we try to do
00:14:28with technology and business isn't over this we should Do more of that now i think another part of it is the earlier thing is i do think we have a problem I think the fake news thing is actually level both ways like i don't think it's a the
00:14:39coast saying the mid midwest i mean you've got your president saying cnn is fake news etcetera etcetera mean you know you have the erosion of these kinds of institutions and we have to be able to talk but if you can't have some basis for conversation which says okay
00:14:53this is what we think truth is this is where we think we should be going It's very difficult for a democracy to work So you know it's everything from kind of win the future this's this organization Yes that w t f w t f with a deliberate you
00:15:09know kind of funny I see what you're doing Yes i find it juvenile But go right ahead What We specialize in german I know that you believe me after many years covering all of you I come So uh man in fact actually one of my most favorite theories
00:15:28of the evolution humanity's in the artemis were born early and that plus the city and ability to learn is key so so i think that the whole stack of things and i think some of it is like what is the future work look like I think some of
00:15:40it is the question of how do we get communication channel How do we get to rebuild of there's some kind of communication like one of the projects that i funded at the m i t media lab's called portico which has done has been in analysis through the twitter
00:15:53firehose of how fragmented the discourses will how do we get that discourse somewhat less fragmented Because with that with fragment of discourse of course you end up with you know kind of complete like different planets and that it's a hellscape out there but go ahead yeah so anyway
00:16:09that but that's the well and then there's the whole question about how these things get hacked by autocratic hostile actors and you know one of the things that we have to pay attention to is it is not necessarily purely just the diversity of humanity that's playing on it
00:16:25But there are people who have political aims that maybe investing and you know i'm really interested to see what will emerge out of you know kind of russian and foreign power influence on trying to hack social media because that's that's kind of ah key issue and i think
00:16:40actually one of the things that you know brad smith at microsoft called for that i think is really interesting is how do we get to a geneva convention in cyber I think that's actually important thing to look at happening because part of that is what's gonna happen with
00:16:54these things being hackable a little bit like they talked just before us Your attention can be hacked in ways that it isn't just code hacking Listen just cyber but it's kind of a question of what do you presume to be true And you know you want a vibrant
00:17:09democracy we have to try toe uh t get to a point so we're having rational conversations and we're actually using evidence and argumentation decide x is true and what is not right All right i want to get to where innovations going think that's really what investments is but
00:17:23are you you investing a lot of your money in this I'm not supposed to call you a certain thing of the left but what are you investing a lot of money Do you want to run for office Definitely not run for office Well look i i prefer the
00:17:37partnering board member investing that's one of reasons i got behind this yeah yeah guy behind the burlington for smoking yeah role model forever twos who didn't get the x files reference and so uh and then but investing a bunch of money I'm tryingto actually facilitate conversations trying to
00:18:00facilitate what the right kinds of ideas are like one of the ways that we can make sure that we have a vibrant economic ecosystems of middle class jobs across the country Much money Um ultimately a lot i'd say thus far is probably millions millions but hundreds of millions
00:18:18You think this is it could get there I could get there All right so let's talk about where On dh mark You're not running for office i hope Ok Ok I would not advise him to do Can you imagine anybody voting for me I might just as a
00:18:32joke that i'm going to If i run i'll take the sarcastic fun with All right So let's talk about innovation Where it's going You guys have been around forever There's been a lot of different investments and periods of time and things like that And it is related to
00:18:47jobs The future of jobs let's start with there How do you Because i think to me it seems like so how well he's doing a lot more serious thought about investing beyond into the into it into the next era cars automation robotics Each of you want you start
00:19:02more talk about you think of the most last time you're here you're talking about software in the world he talked about a wide range of things how you thinking now about investments yes it's interesting we have two sectors two different kinds of of economy in the u s
00:19:16to different kind of categories of sectors divided and one might call the fast suckers in the slow sectors with a fast change sector solution sector so the fast train sectors their sectors like retail transportation media in which technology has had a huge impact software is eating those sectors
00:19:32there's massive change happening in those sectors massive productivity improvements is measured by productivity which is how economist measure the rate of technological change by the way gigantic churn in jobs right you turning in obviously media and retail and you're in buzzfeed you're in a bunch of yeah exactly
00:19:48right and lots of debates about the nature of that turn by the way however along with that rapidly falling prices right so the prices of basically everything and you know and if the experience everybody has this amazon customer prices in retail prices in media with all the free
00:20:01media and internet and prices and transportation are going to fall dramatically with self driving cars on dh so very rapidly falling prices but like a big and then a big concern of where the job's gonna come from so that's it part of economy the other part of economy
00:20:15is what you might call the slow change part of the economy which is all the sectors in which the opposite of that is happening on dso these air seconds like health care education and construction um uh elder care child care and also by the way government s o
00:20:29took all those kind of the big six in those sectors the opposite is happening which is in those sectors we have a price crisis right The price of all those things is rising superfast rides so that the fda had a story today um eighty eight percent of all
00:20:41the price inflation in the u s economy since nineteen ninety is attributable entirely eighty eight percent of it attributable to health care education in construction right and so what's happening on sort of a slow change sector of the economy is basically everything's becoming super expensive And if you
00:20:54try to buy a house or if you want to send a kid to school or if you need to get care for our ailing relative you experience this and hence all the concern around the cost of all these things those in the sector of the economy that technologies
00:21:05having almost no impact on write software is playing a very small role at best those are also the sectors that have almost no productivity growth right as measured by economists on left on check those sectors are basically just going to eat the economy right if those if if
00:21:19the if the products and services in those sectors keep rising in price they end up being everything we pay for healthcare is eating the health care health care education and construction of the big three on dh there's eating the economy fully loaded construction costs have doubled since the
00:21:31year two thousand in the us i mean just like absurd things were happening in real estate in construction on dh so i think the opportunity and the challenge is for the tech industry in silicon valley and all of us to go figure out howto have a much bigger
00:21:44impact in the in the slow growth sectors of the economy the slow chan sector of the economy i think if we do that if we're effective at it we have the opportunity to bend the cost curve over time and these by the way are very very big sectors
00:21:55with very very big kind of entrenched forces i played by the way he's also the slow change doctors also happen to be highly regulated right these air sectors of economy where the government plays a gigantic role in the economics of these sectors and so these are not easy
00:22:06sectors to disrupt these air this is the big leagues but the opportunity exist to really go after the price curves on systematically drive down prices in those industries if we do that like that may be the single biggest thing we could do to improve quality of life for
00:22:20you invest in ordinary people were actively investing s o super actively investing education udacity one of our company's going directly after skills acquisition doing very well with an entirely new way to link with employers to do skills acquisition and training online were very aggressively investing in health care
00:22:35we think there's a whole new very interesting thing happening at the intersection of healthcare and software there's just getting started on we're investing very aggressively on that constructions harder you know the big challenge that we're going to have to tackle the long run is this sort of question
00:22:48of cities and this question of land use and whether cities are going to be allowed to get big enough where everybody who wants to get to them is gonna be able to get to them Mayor swisher in san francisco i think is going to have this on the
00:22:58top of her list yeah a cz thanks to solve so that's the sector that's the second you're going to be my deputy of something i'm looking forward to it yes yes i will take that on my business card so that's a big one were also by the way
00:23:11elder care and child care are both both are increasingly central elements of economy huge employers on both fast rising sectors we have a company honor that i'm involved in that's trying to come up the fundamentally better way to orchestrate the russell building here What about you so it's
00:23:29like a different division So i think about things that are kind of classic for what we do which is kind of businesses with network effects which can include both consumer and enterprise sides So those air things like obviously airbnb or convoy which is kind of uber for trucking
00:23:44we just recently we still use that uber for is that not allowed Well i think we always use the version ofthe being before whatever it is it's a it's a it's a quickest did that remark mr leftover for excess better now because it hasn't extra element of danger
00:23:58okay the lift guy like that and so there's a stack of those sort of businesses which i think are the i think we will continually design new forms of software ecosystems that have these network effects that organized how millions to billions of people communicate work you know kind
00:24:21of coordinate communicate all that sort of thing together and then part of what we look for is what are things that are substantially contrary and that are not in the kind of the current you know kind of buzz cycle right the bus cycle is a i r v
00:24:39r you know etcetera and then what are the things that there you can actually do something that actually might be really interesting and some of those will play out into the those industry so you know if you figure out different kinds of construction robotics so you figure out
00:24:57your energy sources or other kinds of things those can actually play into those and can actually change those costumes so it isn't it is it's a different way of looking at it which is kind of through the lens of these things are defining kind of network effects software
00:25:09ecosystems with people and devices you know kind of combine together and then these things are what kind of off the current beaten path So what is that what do you name something so let's see what kind of name Um well i mean so you know one of the
00:25:29things that uh we did last year is a energy company which i can't talk about it all right What kind of energy Eso possibly fusion possibly fusion god um and investing in that it anew an exciting way but okay All right what about robotics So i think robotics
00:25:55is generally speaking one of the areas that everyone knows is going to be super important everything from autonomous vehicles to other kinds of things so there's just a ton of them like the number of autonomous vehicles start ups is there yes it is like an uncountable set but
00:26:11it's clearly going to be there and then robotics they're going to be like example when you started just saying construction i was like oh robotics is the interesting you know angle is the first reflex there and i think there's gonna be a bunch of things there which some
00:26:24of which will see from big companies i think some of it you'll see from startups what do you think Robotics because you know bill gates was just saying we should tax robots that right And then mark andrews is a mark cuban is saying we've got to get into
00:26:35because china is going to do this first we should it's horrible and evil but we have to we have to we have to be really good at it Yeah it was a little bit of a paradox in there so we should definitely tax robots right after we get
00:26:47done taxing peces okay which took away all the secretary jobs all right so i propose we do it in that order Okay All right so how do you look for microsoft hasn't taken us up on that All right how do you get what do you imagine Robotics is
00:26:59going oh it's very it's a contract we'll get to the job issue in a second but but talk about the sectors automation and robotics together and i suppose eh i also gets in that pot yes it looks so the big thing is that the big thing is happening
00:27:12is the so called so called i uh but machine learning the whole the whole sort of family of technologies around around machine learning and sensors writes something dramatic has really happened something dramatic really tipped about five years ago where a whole category of things that just didn't work
00:27:25at one point all of a sudden work on dh so i just i think teo i think at this point there's just a feeding frenzy and the tech industry in the valley to try to experiment with every single possible permutations what could be done with a iot and
00:27:36robots at every possible shape size and description it's i think it's spectacular it's it's one of the biggest it's one of the biggest booms slash kind of exploratory let's go map the landscaping let's go try all the ideas that i think i've ever seen and what do you
00:27:49and we're actively investing what do you like about that what do you and what do you worry in that when you say if everyone's pursuing it just well it's a classic it's the silicon valley is the thing that gets the thing that gets everybody excited about silicon valley
00:27:59and then it's the thing everybody always criticized in silicon valley for which is a of course we're going overdo it like of course there are way too many companies being funded doing self driving cars but out of so what always happens in the valley right The great strength
00:28:10of the value i would argue is that when something starts to work way overfunded like we have way too many companies going after this most of them don't work but the ones that do end up becoming very big and important right and ultimately valuable and so well i
00:28:22think we'll get that exact exact same result out of this phenomenon for people who want to say the silicon valley just does bubbles over and over again there will be ammunition to support that view but i think out of that will come you know defining cos of the
00:28:33era that we probably haven't even heard of you that are going to be on the scale of the big technology winner in that sector in that sector yet the opportunities are very very very big do you worry either of you about the job impact um when were talking
00:28:43and i want to understand where you look where you feel the responsibility if you have any on the future of jobs it's the thing i'm very interested in well so obviously men to some degree what i found it like then was trying to help people figure out what
00:28:57skills job opportunities in the future so taking software and networks to enable that and enable people to be able to find the right opportunity is get the right skills get the right connections to those kind of things that's actually very central Let me give you a kind of
00:29:12a classic I kind of thought within the autonomous vehicles because people frequently say oh these home thomas vehicle is gonna take a whole bunch jobs there's an issue there and you have to get that transition But on the other hand once you have autonomous vehicles for example being
00:29:25ableto have people now actually in fact go be ableto get toe work much more easy way to be able to actually when there in transit to be actually doing things that are either relaxing or working as a way of doing it it also opens up a variety of
00:29:41productivity possibilities I get that argument of like you can now text and drink i get that i get you know it's it's all that drink is the funds thing the thing the it is that happy shiny future idea of like oh it's going to be so much the
00:29:53same thing with a i same thing with that mark you were just going to say something but what i wonder about is when that happens there are millions of jobs driving take driving millions of jobs and i think when travis was on the stage and said the problem
00:30:07is that god he actually was honest compared to most people sit by saying the guy in the front seats the problem we need to get rid of the guy in the front see you know what i mean Which everyone had a sharp intake of breath I was like
00:30:19hey he said it but what do you how do you look at that Do you feel what you gonna do about that or do you have nothing to do about it So it's a fallacy Ok It's the lump of labor fallacy it's the tonight fallacy it's recurring panic
00:30:33this happens every twenty five fifty years people get all amped up okay Machines are going to take all the jobs that never happens so let's talk about cars specifically because that that that's front center for the conversation so when the automobile hundred years ago in an automobile went
00:30:43mainstream this concern literally existed exact same panic happened and it happened because of all the people whose livelihood literally was taking care of horses writes everybody running stables and everybody doing blacksmiths and like the whole thing and oh my god what's going to happen because ford motor company's
00:30:56going on the world and nobody else is gonna have anything to do the car then created not on ly a lot of jobs building cars right It became a huge employers right now thie car industry became such a huge employer that we had to bail out of the
00:31:06car companies to keep people working like in a hundred years it went entirely in the other direction not only that the car think of everything else that happens a consequence of the car so the idea of surface streets right paved streets summers because of the car right streets
00:31:19weren't paid before the car they were paid for the car so paving streets thie idea of the idea of restaurants the idea that you might actually go someplace to eat something was an invention of the car the idea of motels hotels the place we're in here is exist
00:31:33entirely because an automobile of the idea of movie theaters the idea of apartment complex is the idea of office complex is the idea of uh suburbs the entire bill that of suburban america the jobs that were created by the automobile on the second third and fourth order effects
00:31:48were one hundred x one thousand acts the number of jobs the blacksmith's hat and so that this goes to kind of the fundamental kind of flaw in the logic there they call it a lump of labor fallacy which is technological change causes productivity growth productivity growth lets us
00:32:01produce more of what we can already make with less resources and then lets us create that that's What frees up the spending power Let us create lots of new things great lots of demand and that's what creates new industries and that's What creates new jobs And then one
00:32:13hundred years later we look back on it were like i can't believe anybody would every blacksmith and so this has been the pant literally This is like the panic every twenty five fifty years except if you are a blacksmith and it never comes true the good thing is
00:32:24it didn't work out the good The good news is the car company car companies on all of these other industries hired huge number the people and so i think the self driving car has the opportunity to not only improve productivity for people in the car which will be
00:32:36a huge economic boost for those people not only has the opportunity to save lives right over a million people die worldwide and road death today caused by human drivers and i think we can take that very close to zero right which was very good from both human welfare
00:32:48and in terms of economic productivity right It's it's like it's a very serious down productivity's people get killed um and then and then uh and then and then and then all the all the ancillary industries that end of getting built up so as an example maybe this whole
00:33:02land use thing everybody's worried about maybe with self driving cars we can start to have excerpts that actually work which is to say another layer around cities right further out right they don't qualify as suburbs because you couldn't tolerate couldn't possibly tolerate commuting in an hour and a
00:33:16half right so people in silicon valley are experiencing if you live south of san jose your commute now might be an hour and a half but a sour half in the car driving the car if you were in the self driving car all of a sudden then you've
00:33:25got you may have a huge construction boom and all the outlying areas around the cities and that construction boom might hire former people than were ever involved in driving cars so and so the process works by the way as evidence of that after all of the technological disruption
00:33:38that has everybody all freaked out that got us where we are today right unemployment in the u s is now back below it's not below four point three percent right there sixty if you're living in areas like contact there's six million there's six million job openings in the
00:33:51us and the panic stories in the press have gone overnight from oh my god none of jobs to oh my god not enough workers right And the times is an example Dean's paper had a very good story about two weeks ago on there's now a crisis in utah
00:34:03there aren't enough people to literally milk all the cows they've literally run out of people to milk the cows and the job's crisis we actually have in the us today as we don't have enough workers it's finding the right thing And by the way we might make that
00:34:14you know if this if the's immigration policies continue women we might make that problem for worse Yeah no Okay you're for immigration very much Okay good What are you worried about You worried about this at all Then we're going to have questions Well so the one thing i
00:34:27agree with most of what mark said there including the fact that if you re map what is the logistics in space that creates a lot of different productivity not just construction but a lot of different ways that that may play out clint changes costumes I think the transitions
00:34:42can be very painful so i think we need to pay attention to the pain that pain So example thie agriculture to industrial revolution actually involved a lot of ugly very ugly and so while i tend to think oh look it works out it would probably work out anyway
00:34:56the question is let's try to make it work out in a way that's more humane mohr you know kind of the side that we want to be and kind of not as much pain in that kind of transition right absolutely do you think about that pain so look
00:35:09so what are you just blow felled or what's going on b s so let's talk about what's actually happening so this is all happening all the time but it's actually happening so economists have a way of measuring the rate of technological change disruption in the economy is called
00:35:21productivity productivity growth would we expect based on everything that we read here and understand with this rate of technological change on disruption would we think that productivity growth is at generational highs or lows and it turns out it's a it's a generational lowers productivity growth is running super
00:35:36low and economists are writing books left right and centre agonizing over why productivity's going faster would you expect that the rate of job churn the rate of both job creation and destruction in the economy which tend to go hand in hand Would you expect that the rate of
00:35:50chern is a generational higher generation alone No idea i'm not going to answer it's a it's a trick question as you anticipated just everything's a trick question with you the rate of job turning american economy has been declining for forty years and shows no sign of growth would
00:36:03you expect that the rate of which people are turning over in jobs individuals turning over and jobs is increasing or decreasing Well millennials heir who everybody just everybody is the same mo including millennials probably are decreasing People are staying in shops longer And would you expect Because of
00:36:17all the disruption that we know about What do you expect if the rate of new entrance of new companies and existing industries is accelerating It's decelerating way don't have the problem market eleven pm with we don't know i haven't even had a scotch Yeah that could be fixed
00:36:32That could be six We don't even we don't We did not Not only do we not have the problem nobody's worried about we have the opposite problem We don't have enough change we don't have enough change we don't have enough creation of new jobs we don't have enough
00:36:42creation of new opportunity which is what in my view goes right back to the politics is what least a zero sum politics the reason our politics going sideways it's not cause there's too much changes because there's not enough change because people don't see a future because they don't
00:36:53see anything changing And i think you see the zero zero sum politics you see that sense on both the left right with bernie laughed and on and on the trump right i think that's the problem the way through that is not to slow down the way through that
00:37:04is to speed up right the way through that is more change more growth more opportunity right that's the path forward and so there's this goes back to like i'm just i'm very worried that we've actually gotten off and we're just talking about completely the wrong thing right now
00:37:15and i'm hoping maybe over the next couple waken massage this a little bit more towards the actual the actual crisis that we have all right questions from the audience right here hey guy horwitz sti capital are you s oh this is a very silicon valley centric view which
00:37:32is where you guys are is the world changing in that respect are we seeing mohr ideas and concepts coming from other parts of the world uh so i think the i think the answer to that question in some degree is both which is yes there's launch ownership there's
00:37:49more technology there is multiple areas not just obviously a huge amount of stuff going on in china but look when you get to europe it's you know stockholm in berlin and london there's various cities across the u s on the other hand frequently that's thie is thie oh
00:38:05silicon valley losing some of it and it's always the clinic and i actually think that silicon valley is persisting because of the network effect of silicon valley in terms of lots of entrepreneurs move here the ideation moves at a very fast pace great because people talk to each
00:38:21other about what what's going on what what are you seeing in autonomous vehicles which things gonna work etcetera etcetera and that also create some so i think the answer is some grease yes to the rest of world but also continuing very interesting patterns of leadership from silicon valley
00:38:36are you worried about looking about losing its step no never never not right now yeah well we're doing everything we can to kill it but it's a wake so far we keep missing alright we collectively the state of california okay city of san francisco all right got it
00:38:50okay good I'm going to make it even worse for you anyway hello manu koto this is based on a quote from you read earlier on in the topic of politics but it goes to both of you you said that you think that we need mohr rational conversations and
00:39:06that one of things you want to do is to be able to facilitate more rational conversation what would you say to the premise that the problem is is that too many of the conversations especially the ones that need to be rational are happening digitally on actually what we
00:39:21need is to facilitate maurin person conversations and if you agree that that's a print that's an important premise that too many of the conversations are happening digitally how would you facilitate maurin person conversation They had that reed has a new podcast correct called masters masters of scale masters
00:39:39of scale this guy was on and i think right now but yeah okay well should be um and it's it's it's very heavy Conversational Yeah So um the s o actually you know there's a little renaissance happening podcasts and yeah you know i like him Yes exactly There's
00:39:57a very good one I know that mine in particular And so uh look i think the short answer is more conversations in person or good one of the things that i think is interesting and specifically is his organization florida called village square and their basic theory is that
00:40:11you can cross the aisle and get through disagreements more if people essentially stuck with each other So for example one of the things that actually makes you know wash can congress dysfunctional is that they won't actually sit with each other and talk to each other as much So
00:40:24i think it's a good thing to have i don't think it needs to be an opposition a digital there's a great books i recommend a great book on this topic is a great book called the tyranny of what was called infamous scribblers Air burns infamous scribblers I highly
00:40:37recommend it it's a story of the role that newspapers played in the american revolution on And people may know the founding fathers benjamin franklin most notably were heavily involved in the newspaper industry at that time And it was sort of a lot of the debates around the revolution
00:40:49took place in newspapers They were like fifteen twenty thirty fifty newspapers per city So it's a very kind of thriving kind of thing at the time Um and if you read that book you will be amazed at how polite people are today Yeah they are has compared to
00:41:03what they were like them on and it's actually it's amazing the parallels Well maybe you won't think that were played today but it's amazing that parallels newspapers In the seventeen seventeen seventeen seventeen eighties they were basically blog's on dh founding fathers actually were notorious for using pseudonyms In
00:41:17fact they would use multiple pseudonyms and then attack each other They would have their pseudonyms attack each other sell papers s o ben franklin wrote it in like fifteen different pseudonyms and his different personalities would let go to war in the press and he sold a lot of
00:41:28newspapers and they would attack each other for stuff that even today he wouldn't expect politicians to take each other over and so i just go through all that to say i think it provides some historical perspectives which is there was never a golden age for everybody was a
00:41:41light nice in fact based like it never it never existed and we were always so this idea that there's some huge change that's happened is just not true it's pretty vile oh it's terrible yeah but it's been terrible it's been it's been terrible for a long line now
00:41:54no but this this goes to and this may be where i'm a huge fan of everything read is doing but i'm a little bit less on the train of the right answer here is i think more rational conversations always fantastic i'm a little bit more skeptical that it
00:42:05happens because i don't think people basically want to have rational conversations ondas a consequence of that i think we need a system that works without them which is i think the genius of the american system all right then violet is go ahead hi kissing in with the verge
00:42:19wanted to ask you guys whether you support the experiments that are now underway with universal base you can come and if so what you think will learn from those experiments Well look i think broadly i think there's a predisposition to try to do over planning so i think
00:42:32experiments are generally good I think the issues around basic income are i kind of think of it as a plan z if you can't think of something better it's the plan you have to fall back on but i actually think that in work we don't just get like
00:42:47them money for sustenance and maslow's hierarchy of needs but we also have something where i feel meaningful I have part of a community that that i can strive to something better And so what i think you want a system that's designed around that that doesn't necessarily exclude some
00:43:01notion of you behind the future and there's you know there's a whole bunch of things you need to look at in that but i think that the better plans aren't just go to that They're actually in fact ways that people still have kind of work and still have
00:43:12a way that they have meeting and within their community you be i'm going to guess on this one i am completely in favor of the experiments i love experiments you be isa policy is genetically engineered to alienate everybody ok uh i thought you just got communism and then
00:43:28that was well if you're on the right it's communism if you're on the left it's a diversion of critical resource is away from a needs based social safety net towards people who don't need the money I mean you'd be aya's world getting checks and i don't know about
00:43:41you guys i don't like i think you're probably a little unfair for me to get the check and so this is a serious serious poverty poverty advocates of box actually boxer and a very good couple years ago in a very good interview with one of the leading poverty
00:43:51advocates who's a hard left winger super hard and he just said look this this is just an absurd idea there's no way because we need the money to basically take care of people who need the help The last thing we should be doing is diverting the money away
00:44:01from people who need the help to people who don't need help on dh So this is one of those policies that like simply can't be implemented so we can experiment we can talk about it but it's never going to happen All right G v patel from box mark
00:44:14quick question for you on the fast changing sectors versus a slow changing sectors if you if you just simulate your experiment out on the fact that you know the prices keep talking kind of dropping on the fast changing sectors the challenge that we have a tech disruption is
00:44:30not that productivity doesn't go up and not the new jobs don't get created us that the displaced jobs don't get replaced fast enough so the coal miner isn't getting retrained fast enough and the reason trump won is because those people head rock bottom in middle america and said
00:44:44you know fuck it i'm just going to go out and vote for trump what sort of lose and so eyes there a way that we as a community over here could go out and actually think of a sector which is the retraining sector where you could go out
00:44:58and take all of those fast kind of change sectors which are going to get disrupted of overtime for your theory and make sure that the employees in those sectors can actually get replaced to new jobs so that we actually don't have a deficit yeah so there's an obvious
00:45:15answer here on dime actually kind of surprised it doesn't come up more often so the obvious answer four of the ten wealthiest counties in the us or suburbs of washington d c which happens to be where all the federal federal bureaucracies are right and all the defense contractors
00:45:27beltway bandits all this is the entire support system for the federal government it's all geographically right around washington d c and so the obvious answer is move half of that to the midwest we could start department of agriculture like department of agriculture is in d c like seems
00:45:39like maybe that could go to wisconsin department of education there's a lot of kids getting educated in pennsylvania that could go there department of the interior you know michigan's part of the interior let's put that one there okay I'm voting for you at this point i don't know
00:45:54why seems totally straightforward it's actually it's it's a it's a serious answer it's a serious answer in the following sense which is this idea that there's goes backto talked about already but this idea that there's some sort of dramatic techniques transformation that somehow leave people stranded as i
00:46:08think fundamentally untrue well let me put a finer point on it which is so i grew up in rural wisconsin right So i grew up in exactly where we're talking about including light manufacturing agriculture my cockney voted for obama and away obama and twelve and guess who in
00:46:23sixteen trump it is not lost on anybody where i come from that we all care about this issue on lee after november eighth twenty sixteen like nobody was talking about these issues on november seventh and so this idea that there was some like huge right there is the
00:46:36idea that these people actually yes immigrants what's that i'm just joking okay especially as immigrants yeah so the idea that there's some like systemic crisis happening in these communities that somehow needs to be solved on the outside that we need to you know basically we got done we
00:46:48just got done calling mel deplorables during the election like they're all horrible people voting for this horrible person um and now we're all going in another all victims and now we're going to save them from the outside like i could just tell you it's viewed in the midwest
00:46:59and the south is like what the hell man like it's just not it's coming across horribly it's like the worst possible message and so and it's become like a very trendy thing to do and everybody everybody who lives there is fully aware that we always everybody here only
00:47:12cares about this since november eighth it's like okay which logically means right The next time a democrat wins the presidency we'll go back to not caring right that's what screwed up like that's the problem that's it's the culture word like it's the count it's the fundamental conflict between
00:47:24the cultures and so i just think we shouldn't i don't think we should indulge it i think it just makes things worse michael miller's fbi and pc mac real short thanks up you talked a lot about productivity and very interesting we know that the average person is spending
00:47:41fifty minutes a day on facebook lots of time on youtube tv viewing is actually video viewing is actually up not down is our social media and those kinds of things actually impacting productivity's in either of your views um i haven't seen anything that makes me think that it
00:47:59is um except your daily life well uh i mean maybe it's impacting paris productivity my amman amman and that one come on well but it's not clear like the fact that uh like look just have to say that's impacting productivity's saying people are example not doing the work
00:48:20and actually watching video instead really that never happens in mass you don't have children look chilled that's different and me ok here yeah do you have an answer to this He thinks it's great i think it's think it's good so noah smith use of columnist for bloomberg did
00:48:41a piece recently where he talked about this exact topic and i think you forget the exact math but i think he said if you assume if you assume a diversion of like two percent of work time or something like that away from work towards like internet or whether
00:48:51other activities you basically completely explain this generational productivity slow down that i mentioned that basically you will reset the economics back to like you know much higher traditional higher productivity growth so if that's true there's two ways of looking at it one is that's bad because it's detracting
00:49:07from productivity growth although presumably that would also not be viewed as good Because it's slowing progress meaning it's slowing things like job turn and all the rest of the things nobody's worried about he takes a more optimistic view of it which is wow that's Great We can have
00:49:18our cake and eat it too We don't have rapid productivity growth but at least it's positive it's not negative right So at least we're still working enough to make the stuff we need and we're having a lot of fun So that's the other interpretation i'll let you decide
00:49:32which of those is you never get boring mark andris and i'll tell you that anyway thank you so much This is really intellectually very stimulating Thanks for listening to recode replay

Transcribed by algorithms. Report Errata
Disclaimer: The podcast and artwork embedded on this page are from Recode, which is the property of its owner and not affiliated with or endorsed by Listen Notes, Inc.


Thank you for helping to keep the podcast database up to date.