In this episode of WIRED Dot Gov, we talk with Deputy Secretary of State Tony Blinken and Social Capital CEO Chamath Palihapitiya about the 2016 election.
United States


00:00:06walking the wire. Gov podcast I'm at Rogers from the affirmation wired and we're sitting in Silicon Valley now with Tony blinken deputy secretary of state founder of Social Capital BC from here to talk about a whole lot of stuff cuz the election just happened I know that Tony for you I know that can talk about who you were supporting cuz that's what I do I feel like I want to start and it's going to be relevant to what we want talk about with just just to ask guys
00:00:38what guys that was the surprise anybody was the outcome was unexpected but I wonder if you could do is tell me what you think was the structure of the surprise like what didn't people see because I think it has to do with Tony why you, Silicon Valley and turn off what you are doing here that's why I want to get to in a second the most important one and I think that there are symptoms and then there are root causes the symptom of of how this was so unexpected on both sides I think it's just that we live in this hyper tribal Information Society and so I think what happens is that there's is over amplification of One's Own signal a and then be there fewer and fewer opportunities
00:01:38should really spend time in ways it's actually confront your core and I think that's particularly to frankly for the more liberal Elite Democratic people in the world because they live in a framework were generally life is more positively and better but it really over like the last eight or nine years after what was probably the most economically in the United States since the Great Depression and I think what we forgot is that it left behind in normous amounts of very good on his people so that's I think a symptom does the economically malaise and the problem is you can't look at it anymore the polls are worthless pundits are frankly worthless the unemployment rate that we use is probably worthless every single measure that we've tried to use tube to basically get up this problem told a completely different story than what was actually happening on the ground
00:02:38in a lot of really like middle-of-the-road places and to me that is just like that just speaks to a a structural failure in the entire system but now we have to confront in a dress that does suggest a place where technology is an industry can start to think about better indicators potentially but but when you talk about that thing that happens when we get into a our own informational bubbles both sides of the selection were in their own informational bubbles right and they were using the same reason the same technology to do it there been some really sing stories about what makes book doesn't have you use when you say the word both sides this is my point this was like Tony and I were speaking about the trailer but this is no longer a left and right thing this is an up-and-down thing and so there's no concept of a side anymore and so you have these entire Coke or two people that became a lined around social you can
00:03:38text messages and this is why I think like when you when you say how did we ever not see this it's because and why is it so painful for example for the left who feel like they were just completely caught off guard and they were and they had this early when taken out of their shells because they are probably the ones if confronted with the socio-economic reality of what was happening would probably have tried to find a more empathetic compassionate way of figuring out how to deal with it and so I think like this is so when you when you look at her maybe like the fear and the resentment in the Betrayal that deal underneath that actually is a fact that they literally did not even have access I think and parlays their fault to the information that allow them to relieve and unpack what was going on I think we saw in this election was
00:04:29I told breakdown in the frame that we applied in the past two elections into our politics and it's not said it is no longer Left Right Democrat Republican it is broken down much more along the lines of confronted with the challenges that we all know do you want to take continue to take his open approach that's trying to build connections and build Bridges war and I do not mean this at all the fridge or two cents is the answer to the problems that people are confronting to hunker down and and and so some of the issues that were driving this election again we're not alone 2 left right Axis whether it's immigration weather its trade whether it's just a general sense of identity as well as a sense of confusion and Chaos without their ironically perhaps because there's so much more information people have accents on a regular basis
00:05:24that is what is driving people I think into a different response and a big part of the problem has been that these two communities are not talking to each other they're Talkin at best they're talking past each other and they're not listening to each other for those of us who are in the Bridge Building camp and on the foreign policy Side Of The Ledger people who believe in the International System that we have seven years ago based on Norms and rules and institutions we've been I think missing missing a picture and not seeing how to repel the citizens feel left behind or left out and the great Paradox of the solution to this
00:06:12arguably that never been a better time in human history people in the aggregate not just in United States but even around the world are a little bit safer a little bit well. A little bit wiser a little bit healthier than they've ever been and if you're born today you probably stand a better chance to send it any other time in history in being born into relatively speaking and yet there are you groups of people who feel or actually are left out of that line of progression for this is not an American thing just started in Tunisia when we don't forget to like the Arab Spring was never really about political issues it was so so we can on it. The person that does the fruit cart vendor that that Lit himself on fire was basically making a protest around socio-economic conditions and what you seen
00:07:12how is that is all over the world we just seen it now come home and Amplified in frankly the most important country in the world but the messages been Universal it's been there it's been plainly available for frankly all of us to see you know I mean like the last Hansel days for me has been here angry at myself because my job is to see those yeah I want to I want to suck on that because we've been talking about that in the office too I keep wondering around The Newsroom saying tell me what signals we missed here what signals were there to pull the site okay we listen to the office next week didn't catch so I thought of one which was the increases in rates of suicide of death by cirrhosis of the liver and a drug addiction among working class at non-college-educated whites finally occurred to me
00:08:12the political signal as well as the public housing on what were the other signals that the past that you can technology help find skeptical that there was a Tennessee a piece of data here and there is the reason is that all of this stuff is you work backwards and try to now fax it some data to a narrative that you know exist today and so that process is not that useful because that same piece of data that you can cuz directionally Acura today loses value tomorrow and then you'll look for something else only after some news that affects come out so my point is what we're learning there is not really to look at what the broad base indicators were and I'm not sure that is a specific I think there's like a more General thing which is like look there was a we've lost the sense of stability and decorum
00:09:09in part because of how we consume interact communicate online it's more and more and more of the time that we spent and it creates a completely different set of values that we as a society have not really unpacked meaning how many things are communicated mostly because of one person's desire to get likes or thumbs up and what do you think the ramifications are when you multiply that by 1.7 billion people and the abilities and then tendency for one to live in one's own world
00:09:44but I think it would cause an issue I think we all knew for example when we was on non-farm payrolls we're conditioned as Market analyst in Market participants great the first Friday of every month I'm there and I'm excited to see non-farm payrolls and at no point did any of us take a step back and say why is every single month we were by maybe this entire thing is just a my numbers actually are betraying something that we are not seeing so I think that they were like we don't have to get 9 levels deep into the data
00:10:16there are structural fundamental institutions that exist who share responsibility to do two things one is informing educate into is organized and those Institute need to be rethought in the way in which the world Brooks today in terms of incentives in terms of information distribution and consumption some of those institutions are for-profit some of those institutions are not properties and my takeaways honesty people needed a mechanism to voice the fact that whatever is working today is not working that's a very positive but I think to the pylon which Martha saying we've also lost the sense of having commonly trusted curators of information and that's been a huge challenge in 25 years ago if you were working in government or if you're pretty much anywhere in the country you stop shooting at 6:30 at night turned on the national evening at work to watch that Walter Cronkite are you watched the other networks
00:11:16pretty much did back then was they got up in the morning open their front door pick up a hard copy the New York Times or Wall Street Journal LA times for the source of information and any sort of commonly accepted factories and that of course is is gone and people are trying to make some sense of the the cast of information without having necessarily curator tell them we didn't disappear accidentally there were economic factors and they were also political there was understood what was happening in the Rust Belt 5 years ago yes we should have but somewhere along the way ads and clicks got in the way that's the honest truth it's the honest truth your motivation to figure that out didn't exist my motivation to listen to an existing Facebook motivation to prioritize that content didn't exist we are all complicit in what's happening and what I'm telling you what's happening is not an American phenomenon
00:12:16it is a feeling of disenfranchisement it's a belief that socially economically systems are failing
00:12:24and I think that we have to take a step back because that transcends an American issue it is a global issue and it's an important one that if you don't figure out how to channel correctly I think just becomes really volatile if your job is in part to communicate diplomatically with other countries in a while and also to avoid what makes sense about what United States does by isn't your job the next thing is on your mind or the next person has your job is like that now that you're not interested I trust you traitor information anymore either right is that the one that's part of the problem was fasting and it goes to it which one the saying is this is not this is not just the United States to the country this is very same conversation is very same debate is taking place and capitals around the world and you have a lot of confused establishment figures in those capsules for trying to understand what's going on and are looking for for a way through when I got to go through it again part of the problem is I think the frame
00:13:24broadcast analyzing problem is no longer no longer valid but you know they're all of the different communities have responsibilities and I think coming out here to this source of extraordinary progress in Innovation at the same time we all know what the downsides are and there has to be some responsibility and accountability for those downsizing automation great great products closed factories people take it out on trade which is the wrong place to go I think but none-the-less that's how real are repercussions the information revolution we were talking about wonderful thing to get more information and more people in more places in real time except that at the same time, except except for the polarization and the silos in the Echo chambers that that's helped perpetuate and then social media course the great way of connecting people together but also a great way for all sorts of extreme voices extreme opinions extreme views to pull in to recruit so there has to be some way of an effect
00:14:24taking the Innovation the Ingenuity and the frame of progress than that exist out here and actually turning into those problems send this message because I am not to come here and talk to Silicon Valley on a structurally set up to only be chasing the economic incentives to answer those kind of that's that's it that's a great question and a jacket exactly part of why we're here and the short answer is yes they are set up that way but I don't think in terms of human nature that that is deposited because what I found you so what's the reason that they Department out here is we came to the conclusion that we were just not connected enough with the Innovation Community most of the problems are working on a farm policy every day have a technological components of the big things were trying to sell food security health security
00:15:24monitor C spire's or educate refugees of the dishes there's a technological so we better connected and we started this Innovation for him to come out here to go to other places and Innovation around the country bring the best to help me solve a problem and also to help see what how about she was coming around the corner most of us in foreign policy for are not brought up in this discipline we don't even know necessarily the right? So what was fascinating to me do not been out here almost a half dozen times and we just Alistair permanent presents State Department representative here in Silicon Valley is the thirst and desire for people to actually help solve these problems to be part of something bigger than themselves I really agree with Tony and frankly I view the state department actually an independent of democrat or republican but the department of my mind is like the chief marketing officer of peace and prosperity you know that's their job right their job is to make sure like you we have we are building bridges rebuilding relationships exedra
00:16:24the thing that Silicon Valley has not understood and it is frankly should have been a huge punch in the face as after November 8th is that at the root of peace and prosperity as we need to find it is some form of capitalism and capitalism the way that it works today is structurally broken because we take a few people here and we use software and what we do is we are able to do with 10 people what otherwise was done by 150 or 1000 people value proposition of the it doesn't have to be the value proposition it was chosen to be that way so now we have to ask some really difficult question what are the true right long-term profit margins in the business is that what are the businesses that we should build how should we build I'll give you an example that you or your business
00:17:24when you're circling around is that you can regulate yourself we can make ourselves better because it's better for the world but that's not that that has not been the way Capital this dick challenge my history for example
00:17:39somewhere along the way the capital allocation decision was made along the following line okay I'm going to go build some random site where a bunch of dope scan update photos and you know waste a bunch of time we're past be I'm going to build an amazing new robotic infrastructure that will actually keep some of these manufacturing jobs in the United States there was theoretically the ability to have that threshold conversation we didn't do it okay and everyone's here in Silicon Valley many ways is complicit because we chose pate and we chose Pate because the economic incentive said hey wait a minute if this thing works all these hundreds of millions of people all around the world will for free be effectively our employees
00:18:27what an entry in what universe
00:18:31could we ever build a business on the backs of 1.7 billion people never pay them and then when you see the artifact of that success everybody else follows suit the capital flows that way the intellectual Capital flows that way the human capital flows that way the social capital flows that way but then the artifact is basically a lot of people who are like wait a minute that is not the contact we thought we had so I do think that there's a conversation we have to have about how to reallocate our time and our money in more productive constructive ways and if it means that are the margins are not 65% and they're 40% so be it that maybe the grand bargain of the 21st century and my point is who helps bring that conversation today that conversation is impossible. And as a result what you have are literally 55 million people left out on the sidelines that is not right you know I I thought that I was doing my job and doing my best
00:19:30November 8th
00:19:32not the person who grew up in an economically really difficult situation I look at a lot of those people as my people and I feel like I completely let those people down and here I am I live in my comfortable little lies in my house he on days and I think to myself my guys like I've just I've betrayed these people these are my people my parents are those parents my parents are not white but they're not college educated you know I grew up on welfare and I see these people my dad was an addicted to alcohol all of those problems are my problems I managed to get out and I did not even see it I didn't see it coming from a long line of rabble-rousers and folks who in various times in this country have been followed by FBI agents and stuff like that as I do like I would say you know I never said no when offered an alternative to two straight out capitalism that says they're going to be winners and they're going to be losers in the history of this country what we have typically said is yeah
00:20:32well except accepted know we had a progressive era in this country we had a moment we had a moment in time when capitalism is been fully Unleashed and the rough edges were there and people were being left out left behind in that deal and there was a Crisis crisis about capitalism and at that time we had some folks who figured out that for capitalism to survive we had to round off those dressers and make sure that I'm more people I were actually does in and of course that was in the context of more than a hundred years ago but I think absent the Progressive Era I'm not sure what would have happened to Capitals in this country what we're looking at now is I think the need for an ocean of the Progressive Era to do something somewhere and ironically
00:21:22the answers that have traditionally been brought to this have come from the traditional left the answers that people are looking to now or being Define somehow as coming from the right but there again I say that's where the frame that we have is totally wrong for the moment they were looking at it when you talk to people in Saucon Valley that there are aligned with that and that they have did they come back to you with answers are possibilities that satisfy you that like oh this is a this is a move that transcends those old Left Right distinctions but still could be something that works there in this what is it in the 7 stages of grieving and look at the little son of what they feel but I think again it's like if you really unpack it there are a lot of really good well-meaning men and women who delivered in
00:22:22message and it's really want to see this what Peter teal said you have to take a Donald Trump is seriously but not literally and when you take him seriously what you see is a mechanism that people used to air tremendous grievances with structural systems that are broken even willing to move away from the potentially really scary stuff that he pitched in the during the campaign and just deal with the economic Notions of it that like that but there are a lot of Voters out there who saw in him some redress for economic concerns even we just stick to that what then does a an industry in Silicon Valley that has as you say and I'm right with you primarily focused on making sure the people could share pictures of cats with each other
00:23:13for a long time now then shift what does it look like I like doing my job is so difficult 5 years ago and I love Facebook I took all of that capital and I said okay I'm going to reap deploy it in ways that I felt were productive Healthcare education Financial Services the systems that are broke and here's what I can tell you 5 years on or where we've made the most money is not that where we basically followed every other random doofus here with their stupid incremental Investments we've made a normal amount of money and all the things that I've done that I felt like we really needed to do to really help people take twice as long and at least 50% as much money
00:23:57I keep doing it until I use these other things as a necessary evil to keep us in the game to really fixing the building you know we're building massive 3D printers the hope is that if we can do that you can basically completely start a new manufacturing economy in the United States because you need ultra high school people to operate these 3D printers and these are skills that can be taught in schools and trade schools and what have you and you can recreate a different form of high-value labor but my gosh is at heart and when I go talk to my brother and try to raise capital for that they want to talk to me about that they want to talk to me about the messaging company that we because that's easy that's deflationary that's a hundred people doing the job of 10,000 people so my point is I think what now is an opportune time to do is to actually like having really honest conversation with ourselves about how much profit is too much profit how much profit is a reasonable amount of profit how do we actually create systems that do frankly make America great in a multi
00:24:57National context because if we just get caught up to your point in just the rhetoric of what existed during the campaign and we don't actually look at the root cause issues here we're just going to not we're just going to miss it again and there are simple ways to do it but it will require some sacrifice I mean we looked we look down
00:25:15on countries with different political parameters in approaches than a fundamental approach of democracy the way we've defined it we do right so for example even democracies that we think are too top-heavy like France are most European countries all the way to you know quasi communist situations like China
00:25:37but all of those people are taking control in different ways
00:25:42with some success in many failures of a responsibility to take care of their population and I think we have to ask ourselves what is the cost of that and are we willing to bear
00:25:55so when you tell me when you hear that what are you what do you say that knowing that there's some willingness in Silicon Valley Tech entrepreneurs to take on those issues like can you what do you have what do you give to them as tools what do you say to them in the first time I say we need to have this conversation and the fact that people like to talk if you are positive things on this understanding exactly the picture that come off of painted and so but I hope doesn't happen in this moment is a doubling down on the way we've been doing things and a rejection
00:26:45from one room to the other there needs to be not only and we need to be doing a better job is actually listening to each other and hearing each other and then acting on what we're learning so you know yesterday I was in the area and we were visiting or talk about refugees just something that I've been very focused on and we were talking to some wonderful Folks at a place called The 1951 and what are they do they train new arrivals to this country immigrants refugees right now it sounds sounds simple you might need someone who's just newly arrived from the most difficult circumstances has trouble getting a job they got a job they have some basic training they get more than minimum wage they get benefits they get a platform and that gives and they got
00:27:45socialized in working in this country and I kissed him a chance so but here's the reason I erase this is because the guy who co-founded this operation he was from somewhere in the middle Tennessee and had never met a refugee to save his life but he was living somewhere else actually living out here at one point and he was a priest himself the guy working next to him was a refugee from Eritrea and told him a story and he heard the story ended it connected in a way and it open his mind and open his heart to something he never even thought about
00:28:19we have to be able to find ways to generate these kinds of Connections in these kinds of conversations within our own country we were talking yesterday about Americorps well it would be great I think to scale that exponentially folks who live on the on the Coast Auto be spending quality time not a day not a weekend of Tourism but 6 months a year somewhere in the center folks in the center I'll be spending time on the coast and making sure because when you look at that map it's it's pretty disheartening and it's not just a map that electoral map of the the country in the states within specs you see the rural or Urban divide it's been a perpetuated there been some some more positive specifics on that but at least politically right now the idea of a federal government coming up with a expanded Americorps program to have exchange programs between the between blue and red I know that we're trying to get past those distinctions and I think you're right to
00:29:19say that those are not the way we should be thinking about it now you have a going forward if we're going to back off of those kind of centralized decisions and it's frustrating to me as well as one of the one of the people in those media who made decisions based on quicksand ads I don't think I did that but I think that was the outcome in the end I mean operatic I'll take that heat but to but two to think about it in that direction so that yeah well but part of the pitch was the social media was going to build those bridges and was social mean you didn't social media blew up with Bridges were there an Extended consequence of progress has been just to a massive tribalism and
00:30:03but we need to figure out is
00:30:08how you allow that to happen cuz that's an important thing okay but also how you been don't lose signal of it happening in these other tribes that you don't understand that's like really the Tickle Me Maybe This is productive you know that that's the state department and especially your work there has been in large so what tools exist
00:30:35Beyond a bit like an exchange program makes a lot of sense to me with a little bit of hesitation if there's something patronizing about that depending on the direction to be generated by government government's not the source of every every programmer every solution we made we made it hopefully have an idea or two we may be a convenor we may be a catalyst but I would hope that other communities can also take take the ball and run with it having more
00:31:07open flea market sensibility here which I think could be productive is you know when you think about
00:31:13economies in systems they all operate on incentives economics incentives high-skilled high quality Manufacturing in the United States how would one do it I don't think the answer is for apartments for example to try to set up Exchange program to create different Pathways of capital and funding so for example why do I have to go and carry around a Tin Cup around Silicon Valley in Santo Road from a bunch of guys would rather just waste their time on all kinds of nonsensical garbage I have entire team of people building a massive 3d printer at scale that can print rocket ships planes Wings we can do that in the United States I'd rather much rather go to a state Governor or the federal government and say match my dollars I don't need charity but whatever dollar you give me I put in you Max let's go build something let's go pick some steaks and let's go get in there and actually create an amazing job
00:32:13let's do that so those are the kind of things that I think can happen and I think if you identify the problem precise clean up again as a as a social economic problem I think that we can start to address some of these has issues and use incentive in the government has a very powerful mechanism to control incentives that is one thing that they can create that's a good ask from the government from the side of a business to say help us out with some incentives it'll change the directions what's the what's the government ask from the entrepreneur side what it what do you want to see from the recognition the problem of the problem and then
00:33:00thinking in creative ways about how to redirect some of those resources in a way that makes sense for folks
00:33:09building things that make sense for both creating things that make sense for trying to make try to make a profit but you know how much is how much is enough but look I like to believe maybe maybe not even that yes we have a system is built on incentives but there are bottom line Capital incentives that's great important that's how is tripping there also human incentives and I still believe that people many people want to do well but also and I don't believe that we were past the point where those two things can be divorced and married together so but again it all starts
00:33:58with recognizing what's going on recognizing the problem acknowledging it and then thinking through some answers together. Thank you guys for doing this I appreciate it

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