As someone who came here at 15 or 16, I would just love to hear you speak for a few minutes on what you're seeing and what your thoughts are. >> I'm pretty worried. Not to sort of go all dark immediately, but I think people without the benefit of questionable benefit of growing up the collectivist paradise to quote the current mayor of New York, don't understand just how corrupting it is. The ideas of socialism are amazing. This you know, me for my fellow men and share and share alike and do the right thing because it's the right thing to do not because there's a financial incentive to do it. All those things sound amazing and so it's seductive. The idea of a workers' paradise without the greedy lenders, capitalists, bankers, all all the sort of things we were fed as children or I was fed as a child in Soviet Union.
[00:01:00] At first blush, you're just like, "Yeah, I make sense. People who work hard should have more and people who are great, even though they're not capable of producing valuable things in society because they're good people, should have everything that I have even though I'm working harder than they are." Then those things sound pretty good, but they inevitably require a bunch of structural change that just does not work thanks to human nature and many obvious things like it. For example, one of the greatest kind of mental images I have from growing up in Soviet Union is if you went to a government-owned store and every store was of course owned by the government, you would very quickly notice that the people whose job was to sell you things from behind the counter were always very fat. While everyone you knew in your life were always very skinny. And you're just like, "This doesn't make any sense. Like how did these people who happen to work in food stores are always really well fed? It's like, well,
[00:02:01] because they're stealing. Like, they get access to the food. And it expands the notion of this idea of everybody just pulls all their work product into one big pool, and then someone's in charge of fairly distributing it to everyone who needs it. From each according to their abilities to each according to their need is kind of the socialist/communist motto. And it works great, except people who are doing the actual redistribution get to keep a lot for themselves. And doesn't matter how honest they begin that journey, by the time they get to real power, they become profoundly corrupt and steal and keep and redistribute primarily to themselves. And so, that alone is just like an indictment of socialism that you cannot get around. But, it gets worse because markets, free markets, capitalism, you know, whatever term you want to use, inherently forces competition. If you believe you have a thing that you can sell at a lower price than the other
[00:03:01] guy, you get the market's attention, you get the business that's available to you because the thing is worth buying by someone, you're going to work on creating a margin for yourself by lowering the cost of production, finding efficiencies, finding some ways of making the thing cheaper for you and or cheaper for the buyer so you can compete on price. So, all those things cannot do not exist in socialism because it's all centrally planned. We're going to make this many widgets, and then we're going to have someone redistribute them to all the right people, full stop. And what happens is there's never the pressure to improve. And so, you always make stuff at the government mandated cost, and the government mandated price is what's being used to sell it. And so, you have natural stagnation. You have a system that rewards graft, gives power to people who are most likely to become graft driven, and prevents anyone else, talented or otherwise from trying to innovate and improve the efficiency of the system itself. And so it just does not work. And the thing that worries me in the US,
[00:04:00] you know, and and the world, this this isn't unique to to us here, is the headlines that make you feel like, "Wow, I would love to live in the world where everyone is fed and everyone gets more or less the baseline of good living." is very compelling. Like it is easy to agree with. The recipe for that remains to be the best recipe we know, the best recipe we've discovered as humanity, is capitalism, a force for constant creative destruction where you build the next thing better than the other guy. And yes, his business may be put out because your business thrives, but the beneficiary is the buyer or the the user of the product, the buyer of the widget, because you're constantly working to make the whole thing more efficient. If you eliminate the ability to or you eliminate the need to create efficiencies, you just stagnate. And the death of Soviet Union was surprised to exactly zero people because we knew, ask people who lived there more than most, that nothing ever changed for the better. Like everything
[00:05:00] was the same price, the government-mandated price, and we were still using phones that looked like they were made in 1950s. And when I moved to the US, I was like, "Oh, you have buttons on your phones? That's amazing." Like we still did Like the the clicky rotary. >> Yeah. >> And so anyway, I can't say enough how the seductive story of socialism really appeals and I can understand why, but >> [snorts] >> you know, if I if I didn't have my day job, I'd spend a lot of time screaming from every street corner, don't don't fall for the trap. It's a surefire way of getting to no progress at all. >> So, a firm, you know, on some levels is a I don't want to say response, but it's a solution that replaces potentially predatory practices, right? And we're going to get to that. But I'm wondering how you would explain the current apparent wellspring of attraction to just to keep it simple, socialism in the United States. Are there structural or systemic problems that have contributed to that? Is it mostly sort of demagogues
[00:06:02] using whatever talking points they think they can leverage to attract votes, etc. What is the cocktail? What are the ingredients in the cocktail that are contributing to this current phenomenon in your mind? >> I'm confident I don't know every strand of this particular disease. So, it's it's it's a complicated issue and I think it is definitely the case that the brochure looks great. The storytelling of do you know someone who's poor? Do you know someone who deserves better? Do you know someone who's been laid off? It is the case that capitalism can be profoundly unfair, at least to an individual. As as a system, as a way of improving the world, it works amazingly well. We've not created anything better. But you get thrown off the bus if you build something that gets outmoded or
[00:07:02] outcompeted by another participant in the market, and it can hurt. And for an entrepreneur, it looks like failure, which we are wired to accept, but it still hurts. For a worker, it looks like being laid off, which could be catastrophic for a family. For people who sort of misinvested their money or something went wrong, it doesn't taste good. And so, the idea of social safety net, the idea of welfare is natural. You hate seeing your fellow men and women starve or not do well. So, I understand the definition of the problem and the notion of income inequality and like all the things that we see in Silicon Valley firsthand is very real. It's not like how are you complaining like there are a lot of people who are not doing well and every new disruptive change from you know, the Industrial Revolution to the AI Revolution, there's always someone on the receiving end of the efficiency because their work is no longer required or their products or their ideas are no longer relevant. And
[00:08:00] so, socialism is a compelling story of how to protect those people, how to prevent them from suddenly being on the outskirts of society or worse. And I think there's definitely a lot to do to make sure we don't leave our fellow humans behind. Certainly my love of capitalism and free market does not obviate my humanity. I care about people just because I am also human. And I see it as part of my job to ask the question, can we do better? Can we provide the social safety net for everyone? We're creating more and more efficiency, we're creating more and more value. There have to be ways of helping people who are thrown off the bus to make sure they don't end up in the gutter. And I happen to have some solutions that I love and solutions that I think are worthless. The idea of let's concentrate it all in the hands of the government, give a handful of people the right to redistribute it all and we'll do better doesn't work and I lived to tell the tale. I do think that things like philanthropy
[00:09:00] is profoundly important and the more disruption we're going through as a society, the more important philanthropy becomes and I think in that sense I'm not in the specially outwardly religious, but I think religion provides a really useful set of frameworks around how to think about it. You know, every organized religion has a version of what it means to be philanthropic and the older I get, the more I start respecting the thought that's sort of been aggregated over the thousands of years that most religions existed. So, I think that's super interesting and important and worth participating in. On the other side of it is, I think capitalism in particular has created opportunities for products to develop where the sort of optimizing up into the right of the most profit at lowest cost ends up building products that are actually devolved from not just their economic platonic ideal, but societal ideal.
[00:10:00] And I don't think we have to compromise by saying, well, you know what? I don't actually care that this is harmful to someone because it's the most profitable market efficient thing to do. And my theory for a long time has been that you can build products, certainly financial services that are optimal not just from the lens of most profitable, but also most societally beneficial. And that's not uniformly distributed. There's plenty of products that look like predatory lending and all the other things, or just sort of make money because the underlying customer doesn't understand what's going on, doesn't have the capacity to deal with the complexity of the math involved. Affirm is the answer to that question. In some ways what we are doing here is trying to say, look, you can optimize a product beyond just making the most money. In fact, it's okay to make a little bit less money if you are able to create something that's societally more successful, more important, because in the long term, I think you will have retention that consumers will not go to
[00:11:01] a cheaper product or a product that is less profitable for shareholders because it's so societally important. And so, I am to at least some extent embracing the ideas of prosocial product and engineering. I just choose to do it strictly through the lens of capitalism.