Jeff Bezos Admirably Defends Wealth Creation

Hinzugefügt: 2026-05-31

[00:00:00]I think the contradiction that should strike him more severely is that he's a hero and he knows it. He's a great mind and a great producer and yet he is seen as a villain, as a monster. And my sense is that that contradiction should be bothering him a little more than it's bothering him. Now >> there's an important division of labor here. It's not his job to figure out, oh yeah, the fixed pie metaphor, there's something really wrong about it. and not just the fixed part but the pi part is also that's what this is the job of intellectuals to give better formulations for how to think about the economy in a CNBC interview with Andrew Sorcin Jeff Bezos of Amazon spoke about why people villainize billionaires and how profitable enterprise benefits civilization more than redistribution of wealth through taxes or philanthropy. He also criticized the government for its incompetency to solve problems and wasting taxpayer money. Today we analyze Bezos's defense of wealth and his diagnosis of both why people love to hate the wealthy as well as why the government often fails to deliver results that it promises. Welcome to the Iron Rand Institute podcast. I'm Roberto Bullay and with me today is Ankar Gate and Anker I want to start by asking you what's your general take on this interview? Uh what is Bezos doing here and what do you think if anything he accomplishes?

[00:01:23]I thought it was a positive interview. I have a general admiration for what Bezos has created and the way he's gone about doing the the the creation of Amazon and just the focus and the long-term vision that he had in creating uh Amazon. You really see that in the interview. We'll play some clips from the interview, but I if you haven't watched that as people in the audience, if you haven't watched it, it's worth watching the whole thing and you you see a real business mind and what it looks like to have like a business mind that Jeff Bezos has. And he talks about some of his new ventures and you can see he's got the same kind of uh methodical, creative, long range thinking about the new ventures. I mean, he's still involved in Amazon, but he has other things that they talk about in the interview. And you just get the for anybody who thinks of business and the leading businessman's of an era that they're like what they do is easy and it doesn't involve thinking creativity. It doesn't require some like genius level mind. what you you get a little bit of flavor I think in the interview of just the caliber of his mind and then that he is genuinely on the side like sees himself on the side of and rightly sees himself on the side of it that he's pro- innovation pro entrepreneurship pro- free markets pro- freedom pro America that comes out in the interview and like it that it comes out across is really genuine his valuing of America and that he wants to see it go. Well, it it's all positive things that and that he's will speak up about it. Like, so it's not just like these are his private convictions, but that he'll speak up and and try to defend some of these, including the idea like could can you or other billionaires ever earn your billions? He has something to say about that. Um, so for all from that, it's I think it's both interesting and it just paints him in a good light. Um, and it's good for people to see that to to see what the sort of the mind at work there.

[00:03:41]There are problems I think in some of what he said and we'll talk about some of that, but my reaction was uh overall positive.

[00:03:50]I agree. uh Bezos I find extremely admirable and the way he talks, the way he presents himself, the way he argues for his ideas. I think it's uh both very interesting to see and enlightening to see someone who spend their life building one of the most valuable businesses in the world. Also think about significant philosophical political issues and what does he has to say about them. So Sorcin kicked off the interview by asking uh a question about a significant trend that we see today and that's that when you open the headlines anywhere today any newspaper you will see something about wealth inequality and something about proposals of what to do about it about what to do about bill existence of billionaires and how many states uh and governments are now thinking about how they can tax or get or expropriate more wealth from uh the wealthy people in America. Uh and it's true that it's a massive trend.

[00:04:45]Just on this podcast, we already commented on the California's proposal to tax billionaires and their wealth uh on uh New York mayors Mandani's attacks on uh Griffin and the luxury home tax in New York City. And then all the other states, Massachusetts, Maine, Washington, Rhode Island debating and others already passed different taxes on high incomes. So, it's definitely a trend and Sorcin is right that now headlines are full of this. Uh, and Bezos is one of those symbols, if you will, like when we think about the wealthy in America, Bezos's name is always on top of that list as someone of the symbol of the rich who are under attack from all of these proposals. And uh, Sorcin asks, "What do you think about it?" And Bezos, I think, has an interesting reaction to this. So, let's watch the first clip. I think what's going on is that it's kind of a tale of two economies. So you have a bunch of people in this country who are doing really well, but you also have a bunch of people in this country who are struggling, struggling with pay rent, groceries. And so what's you know what's happening here is uh politicians are using the kind of age-old technique. So there's this tale of two economies and they're using this age-old technique of, you know, picking a villain and pointing fingers.

[00:06:08]But the problem is that doesn't solve anything. And so like if you want to help the the the group of people who are struggling, you have to figure out real root causes and solutions. And that takes skill. You know, it's like the way we if we have a problem at Amazon, you know, the way we would fix it is we would go in and we do the five W's and we try to get to a root cause. We try to find a root fix and then when we fix it at the root, you're fixing it forever.

[00:06:37]It's a real solution. And what we don't do because it doesn't work is just point fingers and blame people. It might feel good for 10 seconds, but doesn't accomplish anything. I think Bezos is right that looking for a villain here is a an old political tactic that's being deployed and it's the same one and an you pointed that similarity to me before uh used to demonize immigrants today for for the issues uh in America and he Bezos is right that businessmen are being villainized and villainized is I think the right word they are being presented as if they're the source or the scourge for the problems for some kind of a problem for some kind of a evil across across the country and the world. And the question I have kind of I wonder and I think what's important to talk about is whether Bezos has a view it doesn't come up in in the interview directly but I wonder if he has a view why are businessmen villainized and for what are they chosen as a target to point the fingers and and politicians use them as their target. So uh given that he his comments I don't think he he he has a deep enough appreciation of how and why people v choose the wealthy and people like him as the villains uh for their problems as the source of the problems. Uh like pointing fingers he says we shouldn't be pointing fingers. I don't think he would mean that if he thought look if if somebody at Amazon was actually stealing and creating big problems in a com in a company that you would see as undermining its sustainability and validity. Uh he he wouldn't say let's not point fingers, right? He would fire those people. He would he would remove people who are causing the problem. Uh so the big question I think that uh I don't think Bezos was grappling here with is really is why are people choosing the wealthy like him to blame for uh the problems like the inequality like like uh the what we call affordability gap that Sorcin is asking about and Bezos like I think the contradiction that should strike him more severely is that he's a hero and he knows it through the interview He knows how many lives he has changed. He's built Amazon. He's built other businesses, Amazon Web Services.

[00:08:55]He knows he's changed the world. In the interview, he says that he gets emails from moms saying, "I don't know what I would do without Amazon today." Uh, so he sees himself as value added. He sees himself as someone who's built wealth and offered it to a lot of it to the world in trade. And he's a great mind and a great producer. And yet he is seen as a villain, as a monster. And my sense is that that contradiction should be bothering him a little more than it's bothering him now. So what's your sense?

[00:09:26]>> Yeah, I I I think that's true, but you can get a certain view that he I think that he has. I think it's very revealing that he puts it in the interview as politicians have been doing this for it's yeah politicians always resort to this tactic. They're looking for some scapegoat, someone to villainize, and that's the source of your problems. Vote for me. I'm gonna fix this and so on.

[00:09:52]But the if you the more you think about that, a question that should arise is so as you said like politicians do do this.

[00:10:01]So it's that that's not crazy to think that this often happens in politics, but why does it work? And then particularly as what you said that he he it comes across in the interview that he knows that Amazon is a great creation. Um it is a great creation but it also comes out he knows it's a great creation. He's created something good and indeed in part of the interview it's for young people like if you want to go into business want to go into entrepreneurship go into it. You can create something good just like I created Amazon like that comes out. So he knows it's good. So there's an element that I think he can't believe that he would be being attacked. So it's just politicians need someone. Yeah. But it's you put it at the outset that this is a trend and a growing trend against the rich and especially against billionaires all the way to the level of abolish billionaires. Billionaires shouldn't exist. And so and it's not just like a few politicians saying this.

[00:11:05]It's college kids who are listening, but partly the politicians know that if I say this, the kids are going to think, "Yeah, that that's what we need to do."

[00:11:14]And so, and the kids aren't just like tuned 24/7 into listening to politics or something. They're getting it from their college campuses. And so so there's not an appreciation enough I think of this view is more widpread and entrenched than just there's some politicians now um looking for the next scapegoat and we happen to be the scapegoat. But the more like you could understand why you would think that cuz it's hard to wrap your head around the possibility even let alone the reality. But the possibility that they might dislike you for what you think about yourself as good that you've created Amazon that that's you think that's something great and wouldn't won't other people like acknowledge that and and like recognize that's something great like the mom you brought up who yeah like I don't know what I would have done if I couldn't just order things on Amazon and they're here the same day or the next day that I need and like that person knows that my life is so much better and Amazon I'm literally has millions of clients, customers. So, like, weren't all these people think that? And it's hard to wrap your mind around. No, but there's some people who dislike you because you create because you created Amazon. Um, and the the I I think there's many things in this interview. If you watch it and you think of it in relation to Atlas Shrugged, you should see there's parallels in the story in Atlas Shrugged. And early in the story, some of the great creators in Atlas Shrugged, creators of the level of a Bezos in Atlas Shrugged creates a new metal, not not a new way to buy goods.

[00:12:56]Um, but it's creation on that level like it's going to transform the economy in the way that Amazon has transformed all kinds of things. Um, and it's he can wrap his head around that some people are going to hate you because you created this innovative thing. Not for some they're just making a scapegoat and so on. And it is like it really is hard to accept that as even a possibility, let alone thinking, yeah, the possibility is actual.

[00:13:27]I think there's sufficient evidence in the interview that that's exactly what he's struggling with. He's struggling to wrap his head around, but he's trying he's trying to look for the explanation.

[00:13:38]So let's I want to show two other clips that are relevant to how he thinks about both himself and other billionaires uh who earn a lot people who earn and produce a lot of money and how what he thinks is at the root at least one of the reasons for people not appreciating them or or or choosing to attack them instead of instead of thank them for the value they created. So let's watch both of those. Simple example. Let's say you start a a burger joint and you have 10 employees and the you make a little bit of money, right? And so you have this is this one one outlet. And by the way, these are the most delicious burgers in the world. People love your burgers, Andrea. And so then you open a second outlet, right? And now you're making a little bit more money and you have 20 employees. And you open a third outlet.

[00:14:30]By the time you've opened a thousand outlets, you are a billionaire, >> right? And by the way, this is a real life story. It happens all the time.

[00:14:39]It's In-N-Out Burger. It's, you know, Raisin Canes, Chicken. At what point did that money all of a sudden become unethical or it it didn't there was one outlet and then there were two and then there were three. What you're doing, the way the way you make a billion dollars or hundred million dollars or $10 million or anything is you create a service that people love and if millions of people choose your service, you're going to end up with a billion dollars, >> right?

[00:15:08]>> There are a lot of people who don't understand that this kind of zero sum fallacy, >> right?

[00:15:14]>> So, you know, they they think that if if there's some a bunch of wealth over here that there's a fit pie, right? You know, we've got one pizza and there are seven people and there are eight slices. Who's going to get two slices? That is not how economies work. So, it isn't a fixed pie. It grows.

[00:15:34]>> So, both of these things that Bezos brings up in these two clips is the burger the burger joint story or at least it's not an analogy. It's a like he says it's a real story, but it can be applied in many businesses. as to himself he started Amazon in the garage to grow into this global business. It's probably the best thing that he says in the same mind and rightly so because someone like uh Sorcin asked referred to Okaziocortez who said that nobody earns a billion dollars and I think other people like Bernie Sanders has said that before and Bezos here very simply puts away how you earn a billion dollars and like he puts real story real examples of of whom he is one too. Uh and he is also right that that story should challenge this view that a lot of people hold and the fallacy of a zero sum uh that people think that wealth is just out there. There's some amount of wealth and if we see this inequality but someone like Besus has a lot of it and someone some others don't have any or very little of it that there is some unjustice in distribution here but no the wealth was not there. the wealth the uh it it's not a fixed by it's not a fixed amount to be distributed. Wealth is created and produced like through the burger joint story that he says and uh he's right that this zero sum mentality can affect people's views about about others who have great wealth because they don't connect that that wealth was created rather than taken from some pie that should be for some reason equally shared. Right? So these things Bezos brings up, they're right in this as far as they go, but it seems that Bezos might be having a little bit of a benevolent view of his critics here. Leoner, you were pointing out that is hard to wrap his head around that uh he assumes that if people just understood this economic fact, if you will, or story of a pie better, that they would be okay, that that would fix the issue. they would be okay with him having a disproportionate amount of wealth compared to others if they only understood that it's not a fixed amount. So in other words, I think that he's not really taking seriously or maybe at least in this interview the motives that behind some people like egalitarians or Marxists who don't deny that skilled people that they're people who are skilled who produce a disproportionate amount of wealth. But that doesn't mean they are it's moral for them to keep it like for the Marxist slogan the most famous one is from each according to ability to each according to need. Right? So if Basos's visibility, he created more of a pie.

[00:18:21]Why not still distribute it to those who couldn't? So the zero sum mentality, why I think it's it's a real problem and a real fallacy, I don't think it explains that much. uh and it doesn't definitely doesn't explain this trend and moral fervor with which people uh think that disregard the productive achievement of people like Bezos in favor of some goal like equality uh and and I think even more fundamentally I don't think the pi analogy is very helpful in the first place I don't it it's not right to think of wealth that we have as some shared coffin or even a growing pie. There is no collective pie.

[00:19:04]There is no collective wealth. There is no aggregate things in into which we throw our productive results and then we distribute or share them. No, each individual produces wealth for himself and as much as he can in trade with others voluntarily. There is no shared delay. We're not producing it as society. We're producing it as individuals. So uh I think this approach that Bezos takes here is proof that he is not really addressing the root co the root cause and uh of the attacks on the wealthy people like him. And evidence of that is Sorcin immediately comes comes after his story and says, "Well, but the question is whether the people who are working for this burger joint that the billionaire created, shouldn't they just be paid more and like then the billionaire just has less of uh of the fruits of the labor of that business and shares them more equally with his employees. So that's the question, right? Not whether the billionaire contributed to this production of wealth and though Bezos doesn't really have much of a response to that, only about so he then goes on to talk about something like minimum wage and maybe we should fix it and then Amazon we pay a very high entry-level job. So he falls a little bit on the defensive here. So I think the real question here that again it's hard to wrap his head around I think is why not why why shouldn't a bigger portion of the results of a business whether it's a burger joint at Amazon be distributed more equally to all its employees rather concent rather than concentrated in the hands of its founder or even who maybe contributed disproportionately like Bezos and I don't think he has a good reason to offer why it shouldn't be. Uh he he earned his wealth and he never says through the interview and not once from the interview he says that because I earned my wealth because I found it because I created this idea because I applied my mind to create this wealth and create the opportunity for all these workers and police and transformed the economy. I earned it and it's mine and I enjoy it by right. So, so I think there's a lot of things going on here and that's part of what's going on, but one should think there's a bunch of questions and I don't think everybody has corrupt motivations, but some people do and that's what that's what you have to be just because not everybody does or even not the majority of people do it doesn't mean that nobody does. But that's what's hard to kind of process that there are people that who really think this and what you quoted about Marx is important because it's like this is was a widely known slogan still is but at the heyday of socialism and communism when Marx is on the ascendancy and that we've got to implement this and this will be the great new society and so it's as you said it's from each according to his ability to each according to his need. It's not like, oh, there's not people who create an enormous amount. Yeah, there's people with an enormous amount of buil ability.

[00:22:20]And it's hard to wrap your mind around that. What that slogan really means is because you created it, you don't have a right to it. You don't have a moral right to it. And because you didn't create it, you're in need and don't have an ability to satisfy your need, you have a moral right to what other people create it. And like if you put it in those terms, people there's more people especially Americans who will no there's something wrong or perverse around that like what gives you a right to wealth is the very fact that you didn't create it and what you when you lose a right to the wealth it's because you created it.

[00:22:58]But that's the meaning of what that slogan means. This is part of what Einrand exposes in Atlas Shrugged that that is what this slogan means and the people who are the originators like Marx and the real intellectuals and professors who push this view socialism communism they know that they know that this is what it means and they're advocating it even though that's what it means or really they're advocating it because that's what it means. So, do I think so do I think it's good that he gives an explanation of what it looks like to earn like and a simp you said it's a simple explanation of what it looks like to earn a million or a billion dollars and he said like this it's the same if you're earning like 500,000 a million 10 million it's the same process and notice he also said at what point does it become unethical and he says it didn't like there was no like if you're and and this is part of what the contradiction in a lot of Americans views they can see like if you're immigrants to the country and you start a restaurant like you say you're Chinese immigrants I mean what happened with a lot of ch and you start a Chinese restaurant and it's successful people look at that like that's great and you're like you're making a profit of 100,000 and yeah if you open chains of these and you had had a thousand of these like In-N-Out Burgers and they're all successful you multiply your profits by a thousand or 10,000 and that's how you get to 100 million or billion and That will be to convincing to some people. I think our education system is so bad that people don't even know that kind of basic. Yeah. Like that's what happens when when restaurants franchise like In-N-Out Burger or just expand like this. Like this is what it looks like.

[00:24:43]This is why they have growing profits.

[00:24:44]This is what and they're making if you think one restaurant makes the profit then 100 restaurant they're also they're not stealing anything. So I think that like it's good for him to say that. It's good to give an explanation. An explanation that people can understand and for him to say like if you don't think for one restaurant doing this that's immoral. Why do you think if a if a hundred do it or a thousand? And he's right about that. There is if they're really making money then the more money they make it the better it is. So that's but if you ask so will that convince some Americans? I think the answer is yes. Will that convince AOC or Mani? The answer is no. Um, they know they are smart enough to know. Yeah, like that's how In-N-Out Burger, if you read In-N-Out Burger story, it starts off very small and then it gets bigger and bigger because they're successful and everybody loves their burgers. That's what he's pointing out. But it's important that it would not convince them. It would ARC is not going to have a podcast now saying, "Yeah, I was wrong. I guess you can earn a billion dollars." That's not going to happen.

[00:25:47]and the same the the zero sum and fixed pie. I think for some people again because our education system is so bad they do think of it like that. It's yeah there's so much wealth and and if you get some I don't get any. And though he doesn't use the term in the interview I think what another thing that comes out that's very positive about Bezos is he's a trader. So like he knows that um am he's what he's creating in Amazon is really good that people pay him for it but that they should pay him like they're getting. It's not like he's winning and they're losing. It's they're winning and I'm winning. I'm gaining from selling my service. They're gaining from buying the services that Amazon offers. And and in that sense like and he knows full well there was a point in time that Amazon didn't exist. It wasn't that it was distributed to somebody else and now Bezos has it. It didn't exist.

[00:26:45]He created it. And the reason the clip where he's talking about it how you make money is the better clip is that one is individualistic and the fixed pie. The both the fixed is wrong and that's what he's focused on. It's not fix but what you focused on it's also not a pie. and what the pi so both words are really wrong in that it's not fixed and it's not a pie and the pie suggests like there's this collective achievement and then how are we going to divide it up but his story makes it cru I mean makes it clear the person who starts In-N-Out Burgers and builds it up that's not some collective achievement that we all participated in and now I want a cut of In-N-Out Burgers it's they created that and I could create something like that and then we could trade and we're both better top. So when he gets to a kind of more social political perspective, the individualism goes recedes and a collectivism right that the thinking of it like a pie and so on and what he needs. We talked about this before in the podcast like this is how we both have training in economics.

[00:27:56]You have more than I do. Like this is how if you take an economics class and clearly he's interested in free markets.

[00:28:02]He's probably read some maybe listen to podcast or whatever on this that like the fixed pie will come up but it will come up in the sense that the fixed will be challenged and it's not but the pie is never really challenged and so that's what he's picking up not really I think recognizing that there's a real collectivist element in that and I think he is an individualist he he knows that America is great in part because it's individualistic whenever someone trumpets as he does entrepreneurship that's individual It's not just business. It's the entrepreneur is is the new idea. Often he meets with opposition or just indifference like that's a stupid idea. Why would you do that? This is why like they're starting in their garage and they really have to prove that oh this is a good idea and then they get investors after that. So that's all individualistic. So he knows at some like deep level that part of what is valuable and good about America that's individualistic. but he hasn't learned how to translate that fully into what the story is, how to think about economics. And so you get that that it's sometimes in it he's activating a more collectivist perspective. And again I the fixed pie I think that as I said will come as news to some people but if you ask is that going to convince AOC or mom Donnie for the reasons you were saying it's no we don't really care in the end they don't really care if it's fixed or growing if they think of it as a pie that's ours and we get to decide how it's distributed but there is no pie that is a collective achievement and then gets distributed. There's just individual achievements and then individual producers trading with one another. That's what an economy is or a free economy, >> right? So, so now I want to pivot a little bit about how he thinks or what's his answer to the claim that you we should take more of your pieces of the pie basis and distribute them more equally and uh what reasons does he have and does he offer for the interview uh that especially in today's world and in in with the system and government institutions that we have that it would be counterproductive to tax more wealth from him or get more tax more wealth in general. Uh and but he's open to that debate. Uh through the interview, he says explicitly, he says that's a policy debate we can have. If you want to double my taxes, uh we can talk about it, but through the interview, it's pretty clear that he doesn't think that that would be a solution to any real problem. So the next clip, I think, is revealing of how he thinks why we shouldn't give more money to the government.

[00:30:36]>> We actually have a spending problem and it and that's a skills issue. I mean, let me give you an example. The New York City school system, >> right? They spend $44,000 per student.

[00:30:52]44,000. That's 30% more per student than other big cities like Chicago, LA, and Boston. And it's three times more than Miami, and Houston. And by the way, New York City doesn't get better outcomes.

[00:31:09]So what this Listen, let me let me just say if if if we ran Amazon the way New York City runs their school system, right?

[00:31:17]>> Your packages would take six weeks to arrive. We'd have to charge you a $100 delivery fee and then when the package did finally arrive, it'd have the wrong item in it anyway.

[00:31:28]>> We can't That's a skills issue, Andrew.

[00:31:30]It's It's not about It's just competence. What I found fascinating about this uh this argument from Bezos is that I think most people who listen to him will have in some shape or form or implicitly or explicitly agree. We all know that if the government tried to do Amazon, this would be exactly the result that if if Amazon was run like the government runs whatever it does, a post office or the schools that the result would be exactly as Bezos describes. Uh and then he goes on through the interview to talk about some other failures of the government like the failure in housing policies where you constrain supply and uh subsidize demand creating this huge inflation of price. uh and she claims that government just doesn't know econ one. Like if people knew basic economics, they would know that if you restrain supply and subsidize demand, you will create this massive unaffordability crisis in housing like we have in the uh uh at least some people think we have in America. Uh and so then he talks about he used this phr he uses this phrase skills issue through whenever he talks about the government he also talks about how uh he said government we have a spending problem and anybody worth their time uh in financial world like he says a CFO CFO worth their salt uh could go into the government and find 3% of the federal budget today to cut because like there's so much waste that it shouldn't be hard to find. uh so so his basic argument I take it is like there is a lot of incompetence in government and if I had to expand that's again if you read uh free market economists or more uh e economic books and textbooks you will find a lot of this uh like there is a misaligned incentivism in government that people in government don't really have an incentive to spend less or cut costs they have an incentive to increase their budgets and run bigger institutions and spend more and appeal to their constituents with more things to give them. So, uh then there is an argument that just government jobs doesn't don't attract ambitious people that those who don't want to uh that it's usually those who don't succeed or don't work want to work in the private sector where it requires uh entrepreneurship, skill, ambition, tribe. uh it that they often people who go to the government instead want prestige, security, comfort of a government job, the benefits and they don't really want to do real work which then ends up we end up filling the government institutions with somewhat unskilled people. So there is there are arguments like that being made and all some of that may be true in some cases.

[00:34:08]I don't think it's always true. Uh but the question I have is is it a good reason is it a good explanation for why government is almost always a failure in what it tries to do especially when it tries to achieve uh educational results or if it tried to do I don't know delivery like so it's always costly it's always a failure it's always wastes a bunch of money and a private enterprise could do it almost always better so his explanation is is it's a skills issue I don't think that's right or at least not fundamentally and there is something fun something important that doesn't come up and uh I wonder if it could come up in basis minor what would it take is that government is not a productive entity it's not Amazon it's not not nobody in the government uh government is wields force it's an institution that can subdue you and like whose whose role is in a sense to impose subdue uh and enforce not trade, not produce, not not look for voluntary win-win agreements.

[00:35:15]That's not what government does. Uh and that is the reason for why whenever government tries to produce something.

[00:35:23]It's not in a position to because it's it's a fundamentally different entity than a productive enterprise and it operates on different principles. So Anker my question to you is what do you think is why do you think skills issue is his explanation for the failures of government and what would be a better one uh that he could maybe integrate or or or think about.

[00:35:49]>> Yeah. And there's a connection to what we've been talking about in that what you're bringing up about the difference between government and business is there's a fundamental difference in their goals and the less you're thinking about goals or that goals matter here.

[00:36:10]So I mean in some context be knows goals matter way too much. Like what is your business really aimed at? What are you trying to do? and are you kind of relentlessly focused on that you've got the right goal and you're focused on it and you're executing over like a 10-year span on this. So there's obviously a context in which he knows goals matter but just in terms of when we were talking about motivation that it's hard to wrap your mind around their goal is to tear business down. It's not like how could business be more successful and then we just have like a policy disagreement about what what are the policies that make business more successful. When you've got someone like an AOC or Mandani who billionaires shouldn't exist, it's they've got a very different goal. It's not like how can business thrive and they think it will thrive if there's no billionaires.

[00:37:04]That's not like if you think like that's the pol there's a policy debate about this and then they're just wrong because billionaires are enormous creators and we need more of them not less. Like clearly Bezos thinks that that you we need more entrepreneurs like me, like Elon Musk, like Steve Jobs. The more the better. And and America is good in part because it's the best place for these people. And if America were even better, if we had better less regulation or better regulations, he would sometimes put it in the interview. it'd be even better and we'd have more to but that that you're thinking that oh Mumani or AOC their goal too is for business to thrive in America and it's just not what their goal is and you will put it like it's just a policy kind of issue if you think the basic goal is agreed upon I think there's something similar when you put it as skills it's we agree upon the goal and there's just do we have the skills to execute on this or not But and and then you take something like education where it's fairly widely recognized or admitted that government schools aren't very good and people can't read or read below grade level and so like the results nobody will point to government schools and say or I mean aside from teachers unions and things like and say the results are great here.

[00:38:24]But if you took something like social security and asked, oh, like look how hopeless social security is. No, it's a pretty well-run and it's you in the sense that you're taking money from some people and giving it to other people. And the issue and it's like I'm bringing it up because it's one of the major drivers. He says like spending is the problem is government spending. This kind of welfare program is one of the drivers of government spending. Medicare and and so healthcare is another but like this is the these are the entitlement programs as they're called major driver of spending and I don't think you can make the it like there's a skills issue here.

[00:39:06]No, like you've promised money to some people and said, "Well, other people are going to produce it and we're going to take it away from them and give it to it." And that you can't solve that by saying like it's a skills issue and if we were just more efficient at redistributing the money, it would be good. And notice again like the difference between when he's talking in an economywide there becomes this kind of more collectivistic perspective when he's talking at the individual level. It's um so one of the things he brings up maybe we'll play a clip of this of uh I I think it's a nurse in the Bronx is the making something like 75,000 and what he does not want to do is give this person substitute. It's not like we should take money from somebody else, including him, like tax the rich, but even like tax the higher middle class and give it to No, what he wants to do is let's reduce her taxes to zero. Let's stop taking money from her. But and he even views it as like a person like this doesn't want handouts. It's that person wants to rise and make something and particularly when you're you don't have that much like he knows the importance of capital. When you don't have that much capital, the difference between having like if you if you have a 75,000 income, the difference between having 10,000 less is so much more consequential when you're at that stage in life and capital than if you had millions or billions like like Bezos. And so he knows like if you if you lighten the burden there of what we take from these people of what they've produced, they'll be able to rise much more easily, much more quickly. That's what he wants to do. It's not handouts.

[00:40:49]It's not, oh, we just have to get better at redistributing money. It's why redistribute, but why take it from that?

[00:40:55]And that's like when he's looking at individuals, it's very much an individualistic perspective. When he's looking at society, it's hard for him to translate that into an individualistic perspective versus, well, yeah, okay, we got government schools and they're badly run, so let's run them better. Instead of rethinking, like, why do we have government schools? just like he's willing to rethink why are we taxing this person when they make 75 maybe we shouldn't tax him. So, and particular if you're like for freedom and free markets, there should be a question on the table, why do we have government schools? Why does government running healthcare? Um, wouldn't it be better if it was run like Amazon, which is the government's not running it like that?

[00:41:34]That's where you would want his mind to go. But there there's a reason why people have been trained that whenever they think about society politics, you have to look at it through as a through a collective lens versus an individualist lens. And I think this is a good segue because the next clip reveals a little bit of how the collectivistic perspective creeps in even when bases thinks about uh a profitable enterprise and what a profitable enterprise does. So next clip >> if I do my job right >> the the value to society and civilization from my for-profit companies will be much much larger.

[00:42:19]right than the than the good that I do with my charitable given. And I think this is an important point to make because peop people forget or they sometimes don't see that when you know when you create something like Amazon and you're saving I get letters from new mothers all the time that say like I have no idea what I would be doing right now if I didn't have Amazon. Thank you.

[00:42:41]Or what we did in the pandemic when people could really see what an essential service we provided to them.

[00:42:47]And so you know this is uh we Amazon creates tremendous value. And by the way all companies are creating value of some kind. That's because that's why people are voluntarily giving them money.

[00:42:59]>> So here he talks about the value of a for-profit enterprise for society and for civilization. So those are the big aggregate collectives in which he thinks is so so you said before anra that there is some uh misunderstanding about like we agree on the goals and now we're just discussing the means of how to achieve them. So for it it often comes up that in Bezos's mind there is this goal so advances of civilization so progress prosperity which are great goals to have and then he thinks which as many other scholars think and economists too is okay so which method should we use to approach it right maybe a for-profit company maybe a charity maybe a government should do this and it's like and then we divide projects on where which one uh is better which goal is better achieved by which means and and then someone like Basa says is like look most likely a for-profit company will do a better job at pursuing some goal. But then I take issue with that is like he's right that uh and he talks later a little bit I'm not going to to play play clip of that but he talks about Washington Post that he owns and that he says it has to be a profitable company because profit is a signal of relevance that the fact that people pay enough for Washington Post to exist is a signal that we're producing something valuable to those people like Bezos could subsidize the Washington Post from his own wealth forever and it could be write whatever he wants.

[00:44:27]and publish whatever he wants. But it then he would remove a signal from people who paid the company to to that tells him that we're actually producing something interesting and valuable for people they're willing to trade for. So he is right that profit and a profit is a signal that you created some value by the judgments of others in a voluntary exchange. Uh and it's true that when go when you're in government or in charity, you don't have that signal and it's often much harder to judge whether you're doing something productive or destructive. But I take issue the thinking that what it signals is whether you're uh doing something valuable in the name of a society. Like it's it's true that it's a signal that you're creating value, but value for in trade for yourself too. It's only a secondary consequence that that creates progress and civilization and advancement.

[00:45:21]Primarily profit is a reward for you the producer who created value from the trader who who agreed to to give something to you in return. And the profit is your reward in trade of an individual. It's not for society, not for civilization. It's for you the individual and that's what matters. And then everything else is yes. is like is if everybody if everybody trades voluntarily and produces a and makes wealth and trade between each other then the society grows as an aggregate the progress and the wealth and the material advancement all moves but that's not the goal or why we have profitable enter enterprises and allow and if he like Basil says if I do my job right if he does he did his job right and he earned wealth and he made amazing things and he should enjoyment and be proud of them but not because of um but he serves some larger societal goal.

[00:46:15]>> What's your take on?

[00:46:17]>> Yeah. So, uh one thing I'll just say, I don't even think of profit as a reward.

[00:46:23]Profit is is what you've created. So, it's sort of just a it's a monetary form of what you've created. So, there's not someone who goes around and reward or you've done a good job. Here's your ribbon or something. No, it's it's literally what you've created. you just put it instead of it being like Steve Jobs, Apple creating Amazon or uh the iPhone or Amazon creating um next day delivery like you can say that's what they've created and the prophet is just putting that creation in monetary form and so like and this is when he describes In-N-Out Burger or that kind of story. It's they've made this and that's important and it's an American kind of formulation. You made this money. It's not a reward. You made it.

[00:47:10]You created it. Like, and that's why it's yours because you made it. Um just like if you were in your backyard um working on your garden and say like, "Look, I've transformed the ugly backyard into a great Yeah, you made it and it's yours cuz you made it." And I think that's that that's how I think about profits. That's what Einran emphasized, I think, about profits. Um and I would say so yeah, you said this is where a collectivism creeps in. What I think Bezos doesn't recognize and again it's hard to wrap your head around it because there's a kind of corruption involved here when he means when he says it advances society and particularly when you say it advances civilization because I think there is a perspective particularly when you're a great creator like Bezos that you can think of it yeah I make it I've made a profit I've made billions and so on but he can also think and it's important even to think of that he's pushed civilization forward. Um, and I think that if that yes, great creators like Bezos, like Steve Jobs, like Rockefeller, they push civilization forward because part of what they show you is this is what's possible. And you people didn't realize it you could have this like the the iPhone that you can basically have a computer in your pocket. I think people could dream of that in science fiction, but you know, you really could have one. Like that's what Apple shows you and that's part so part of its creation creation is this kind of advancement and civilization vision but what that means is individualistic and this is what you were stressing what a advancing civilization means is a growing so society of traders individuals producing things as individuals and then trading and trading includes like being employed by someone working at a firm and something that's all kinds of forms of trade. It doesn't mean literally I made something and now I exchange it with somebody else. You might services, employment, but beyond contract and so so I mean a in a modern economy trade relationships are enormously complex but that's what they are. And so it's not when when sort of opponents like a AOC or Amdani talk about society they do not mean a society of traders. What they mean is a society where we view everything as a collective product.

[00:49:36]There's going to be someone in charge like us who are going to decide who how this is distributed, who gets what and so and people will have to come to us and say that I deserve more this more of that. It's thoroughly collectivistic, not individualistic. And he doesn't realize and it's hard. That's such a if you're an American, that's such a corrupt vision of what a proper society is that it's hard to think people really mean that. No. And and again, if you go back to the story about the nurse, it's like why don't we let her become a real trader that it like let's stop when they're early not making that much money and so on. Let's stop taking money from them. Let let them build their life and then and then they can participate. But participating means they can be a trader just like me. And yeah, I might make more money than them, but they'll be proud of the money they earn and I'll prouder of the money I and we do trade.

[00:50:30]Like this is like a mother who trades with Amazon. And like that's his vision of and he doesn't get that. No, when they talk about society or civilization, that is not their vision. Um, and so it can seem like you're talking about the same thing, but you have radically different goals about that.

[00:50:50]So let's pull some threads together. I want to end on this. Uh we said and I still maintain I think both of us maintain that Bezos comes up in this interview uh in a very positive light and he says he is on the side of the good what we would consider the good of the freedom, liberty, America production, innovation, entrepreneurship, uh wealth creation, property all of those things. He is on the side of those. But as we uh discussed through our conversation is like there are things that come up or creep in in the way he thinks about some of those things and the way he defends wealth and trade that undermine uh so his own position or the goals that he wants to advance and like we mentioned the economic pie idea that that's not the right way to think about wealth and society. Wealth is individualistic. It's not collectivistic. Uh and then what comes up is also his care about this issue of inequality like today like Sorcin started the the interview that like there is this whole issue about wealth and the gap between the two and and Bezos acknowledges yeah the tale of two economies that's how people think about uh that there is someone who is very well off and and others who are not but the way he talks about it is that it's a problem that there is some root cause to dress and I think the last kind of thing that I want to say about his approach is it's in the first place it's not really right to it's not right to think of some gap as a problem needs addressing inequality and basis recognizes that if not explicitly at least implicitly is a future not a bug like if you are the owner of that burger joint store that he described you just earned a billion dollars while hundreds of thousands and millions of other people didn't. So there is a huge gap between you and them and the wealth that you've created. Same with with Bezos who created Amazon. The gap that arises from people creating more and more wealth that you know it's not a it's not a bug that needs to we need to look for root causes to fix.

[00:53:00]It's a future of a productive economy and it and the only caveat that Bezos also says in the interview is yeah there could be unearned wealth. There is crony cronyism uh and corruption where the wealth it's not clear that the wealth is uh earned or produced but it often is stolen or taken away and like that we should fix and we should look at that and it's often in a mixed economy even difficult to distinguish sometimes what's earned and what's unearned. So that's a different point but uh put that aside. I don't think Bezos should have acknowledged that some form of inequality is an important issue that needs addressing. uh a and that's kind of given in to the premises of his opponents who say like hey you have a lot other peoples don't and we need to do something about it and I think the answer ultimately is there is but what we need to do is more freedom for more people to create wealth for themselves like Bezos did that's the only thing we should do about it and otherwise leave them free and the gap is just a result of somebody's great productive achievement uh and growth beyond the limits of some people's imagination. Uh what's your final take on?

[00:54:14]>> Yeah, though I I think he's got a more sophisticated view. I still don't think it's right in the And so what you're saying about there's something and this really goes back to the first theme about there's something about what the egalitarians want and what they mean by equality that Visos again I think just it's very hard to to sort of admit to yourself that there's people who this is what they really want and they're driving towards this and they have theories for this and they have programs and and they're trying to get political office in order to advance this goal. So because even when you ask about equality, it's equality about what and there's so equality before the law is a good thing and inequality is a big problem in regard to that. Even when you get in the economic realm, equal freedom is a good thing. unequal that some people are more free than others. That's a bad thing. That you want equality before the law, but part of what that means in a political sense is everybody has is free. And in the interview, you get some of that like so but and then even if we put it in an economic sense, it's some regulations are way worse than others. And this again, like he's f like he really focuses on the nurse's example and and and he said like I've been thinking about this and the more I'm thinking about it is like why do we tax her at all and and like we don't need the money. Um like that can't be the explanation and it would be so much better for a person like that if they didn't have to pay income taxes. And there you might think again it's yeah we need some kind of taxes but the taxes could be done in a way that is not really respecting people that like sort of the economic freedom that they should have. And if we had it it if the taxes were done in a different kind of way that would be better. And if part of the e the sort just whatever income or economic inequality is partly a result of that that it's hard for this nurse to rise. that's a problem. Even if she'll never rise to the level of Jeff Bezos, still maybe it will be a little closer and so and and he's thinking about that and that like that's a problem. And I think he's right about all of that. But it's not true that that's what they mean by equal when they when the egalitarians say they want equality. It's they want equality of results. They want literally everyone equal and they will tear people down in order that everyone is equal in their eyes. Einran quoted I mean she was very adamant about that egalitarianism is on the rise and it's evil but she saw like the it's you have this element particularly in the communism of it and then she quotes I forget in which article this is but someone going observer to the Soviet Union and how wonderful everyone was equally shabby and that like that that a human being can utter that sentence that it's wonderful that everyone's yeah they're shabby but they're equally shabby.

[00:57:35]That's what but there's people who really think that and that's their kind of moral view and what they're driving at. And if you recognize that, then you would never put your things in terms of oh yeah, like there's an issue of equality here and maybe there's a problem when you think like I'm talking to these people um who there there's an element that's subhuman about these people if you can utter a sentence like that. And again, it's just hard for him to get that there's people who really have that kind of view, >> right? and and and and recognizing that would definitely go to what we said at the beginning is uh whether he what is the reason for why billionaires are being vilified so much and why are they chosen as the ones to point fingers at for the root causes and what you just said uh realizing that would help to bridge that gap and understand where it's coming from if you want if if he cares about root causes so uh that could be a path towards yeah realizing some of them uh okay so that's Uh so that's all we have on uh basis interview. I found it fascinating.

[00:58:40]>> Let me just say one other thing in terms of just wrap up. So this is and to bring it sort of to a market phenomenon too. I think of this as a division of labor and there's an important division of labor here and this is something we're stressing more at ARRI in terms of what we're doing and how we're thinking about our programs. It's this is the job of intellectuals like so what we've been talking about and and what Bezos isn't understanding or we we think isn't fully understanding though he's sort of thinking about the right kinds of things and sort both his heart in his mind are in the right place but they're not fully there particularly in terms of conceptualizing what is happening. This is the job of intellectuals to illuminate these things. It's not his job to figure out, oh yeah, the fixed pie metaphor, there's something really wrong about it. And not just the fixed part, but the pi part is also like that's what this is the job of intellectuals to say like to give better formulations for how to think about the economy. That's part of what we talked about. But also to say this formulation might seem innocuous, but it's actually a booby trap and it actually activates collectivism. And if you even if you're trying to be individualistic, but you use well well yeah the economy it's a well it's not a fixed pie it's a growing pie. No it's not a pie fixed or growing and it's the wrong it's a collectivized way to think about it. That's the job like it's the job of intellectuals if part what we do and why we're doing a podcast like this of telling and and helping businessmen see yeah like the these intellectual ideas and issues and formulations and so on matter but it's our job to illuminate that just as I can't create Amazon but I can get what is wrong with the the way people think about economics and explain that and similarly that he can't see that fully It's not his job to see it fully. It's our job to explain it so that people see it. And so there's a real division of labor here. And both are productive like that. Both are productive endeavors. You need the right ideas and you need men and entrepreneurs like Bezos who want to and push civilization forward in that way. And both are like better ideas push civilization forward and the businesses on the scale of an Amazon push civilization forward. And in that sense it's a joint it's a joint endeavor.

[01:01:01]>> Right. I I really appreciate your point that it's uh nothing of what we said that Bezos maybe could have what what he understands or what he maybe where where some issues creep in is to say that we expect expected him to have perfectly formulated philosophy and an answer to each issue. Again, it's not his job.

[01:01:20]He's done so much and he has so much to think about. Like the interview was filmed in Blue Origin uh warehouses. So, he's thinking about how to go to space.

[01:01:29]uh and it's definitely true that uh it's our job and the job of intellectuals to uh provide ideas that will allow for the freedom for people like him to build what he's building so that maybe he doesn't need to think about taxes or inequality and he could just focus on what really matters to him. Uh so with that I appreciate the conversation with Yonker and uh I found this interview fascinating and it's important to analyze. So if you enjoyed this conversation, please subscribe, comment, share on YouTube and other social media channels and send comments or questions if you have any to new [email protected].

[01:02:07]Thank you.