How Billionaire Joe Lonsdale Will Fix America

I think inequality, first of all, is a natural state of the world. So there's always going to be inequality. I think inequality gets more extreme with certain things, right? So what are the factors? I think we created inequality unfairly by making money too cheap. And I think we made people who were in finance be able to make too much money versus the typical worker. And I think that's bad for the country. I think inequality comes from, like I said, from education system. We have more educational inequality in this country than we have wealth inequality. So like, if you want to substantively fix it rather than trying to fix the results, why don't you go and fix the core and actually fix education inequality, which would require accountability for education system, which would require going against the biggest supporter of the Democrats, which is the government unions in education, which is why they're not doing it. So it's extremely hypocritical. And so I don't think anyone has any credibility on wealth inequality if they're not talking about accountability in education, fixing education inequality. I think that's, that's another big one. But I'll tell you what, Erik, if instead of working most of today and trying to get ideas out and then trying to build things to build companies, because I'm getting an EIR later today for another company I'm building. I've, I've, I, you know, I started 3 multi-billion dollar companies before I started my fund. I've started like $4 billion companies in my fund. If I stop starting billion dollar companies, inequality will go down. It's like, it's actually good for the world for me to keep building companies. Yeah.

I'm Erik Torenberg, and this is Upstream with Erik Torenberg. Joe Lonsdale is the founder of 8VC, Palantir, a number of other unicorns, and Cicero Policy Institute.

In, in this episode, we focus mostly on policy, breaking down the real problems in healthcare, education, crime, homelessness, and what are the solutions he recommends to fix them.

We talk about how the right is focused on the culture war when fixing accountability will actually be a more effective way to change the culture.

We talk about the future for the right, why wealth inequality is the wrong metric to measure, and what it means to believe in America in 2023. Ambitious people often hypothetically ask themselves what they would do if they had a billion dollars. How would they make the biggest impact in the world with their time and their money? For you, the question is a little bit less hypothetical. A little more practical. How have you chosen to spend your time and money into having the biggest impact you could possibly have?

Well, you know, I'm not a liquid billionaire yet, so it's a different one. It's all on paper. I guess Palantir is out though, which is nice. You know, there's a lot of really worthwhile causes. My wife and I engage in a lot of philanthropy. We don't really talk about all of it in public. I think there's all sorts of things around the world where you can help people very affordably and it's very satisfying. To do that. And in terms of the more public things we're doing, obviously very focused on Cicero, which is an institute we built to kind of like take the values that we think make our free society work and apply them to broken things. We're trying to keep it totally nonpartisan as much as we can, going in and saying, listen, here's how prisons should work better. We all agree that people going in and out of prison, we want them not to come back. We want them to have jobs. How do we help good programs win and bad programs lose? And, you know, training programs right now. America spends billions of dollars on training programs, Erik, and they don't work. And rather than say, oh, I'm a politician, I spent a billion dollars on a training program, it should be, here's what the training program accomplished, here's what it achieved. And in Texas, we changed it so that they only get funded in these training programs based on the salaries of kids coming out, and salaries more than doubled coming out, right? So all of a sudden you're impacting hundreds of thousands of lives, you're making our country work better. So try and do philanthropy that makes our country work better. A part of that for me is also starting University of Austin New University. So a lot of projects focusing on making the world competent, functional, trying to fight the decay, fight the broken things in our civilization.

It's fascinating you say nonpartisan because tech, of course, is famously super left-wing. And sometimes people claim, oh, Joe is a libertarian, but of course you work with the government in so many ways, so that doesn't make sense. Or, oh, Joe, he's right-wing. But you focus on issues like healthcare and education and, you know—

Well, I say things that offend people sometimes, Erik, and I think that's associated with being right-wing. So maybe that's where we're getting it. But I think I'm the party of competence. And you know what? In general, liberty gets the more competent answers. So in general, you want liberty, but you also want to help people. You want to help the bottom of society, right? So you want to make things competent and you want to make things not dysfunctional. Then you want to help the least well off. And I think that combination takes the best from both sides if you can do it correctly.

Yeah.

Unpack more of the work that you're doing on Cicero, because as you mentioned, there's so many causes. So you guys had to sit there and say, hey, which causes are the most important, but also which causes are tractable? Where can we actually have an impact?

So how, yeah, you know, the one cause, and this is, this is why it's complicated, but the one conceptual framework cause that I care about the most is how do we help good ideas win in our society and bad ideas lose? Right? How do you, how do you, how do you open up these broken systems that are getting bad results that we all agree are getting bad results? And how do you help the good ideas win? Right. And so going more into that, the trading example. So we work at state-by-state level because that's where I'm actually able to pass legislation. We have 12 states where we have big teams on the ground, nonprofits called 501, which means you're allowed to lobby. And we have a 501, which is not allowed to lobby. So it's only allowed to do like research and education. And they work together, right? The could take the ideas from the . And so we go into these states and we try to create these frameworks through legislation. So you got to convince the Speaker of the House, you got to convince the Majority Leader, and you got to convince the governor. And a lot of people always give credit to governor because governor's like— I think humans like loved having a single leader. It's like this alpha dog thing. It's like, and you know, governors are important, but very often you're convincing legislature, you're convincing the staffers in legislature, and you're saying, here's what works. And it's— America is really set up in a really cool way because you can just get something done in one state, you can prove that it works to raise the salaries of tens of thousands of people coming out of a program. You could prove that it works to totally fix the culture of a probation or a parole program. And then you could go to other states and scale that. So that's what we do. We, you push really hard to get something done in one place and you scale everywhere else. And there's a lot of systems that are broken. It's not just our prisons, our parole and probation, which is so important. It's not just different parts of educational system or vocational system. Another big one is our homeless system. Right? There's thousands of homeless agencies in the US. We spend billions of dollars on this and almost none of them are held accountable. Almost none of them are rewarded with more funding or less funding based on their results, right? They're basically just how loud they can scream and lobby is how much, how they get money. So putting in systems of accountability, putting in better frameworks there, it's a huge thing. And people say, oh, you're doing so much. It's homelessness, it's education, it's healthcare. It's, you know, but, you know, it's not just that we're doing so much is that we have this one key framework and idea. And then yes, then we do hire teams to go into separate areas.

Yeah.

And we'll get, we'll get into that, but I want to focus on that big idea, which is you focus on effective government and via accountability. And you recently wrote a piece that talks about, you know, the frontier and the core, as you call it, which basically says so many people are focused on the culture war that they're missing out on focusing on holding these institutions accountable. And by holding these institutions accountable, right, introducing accountability, we can actually affect the culture war in a better way. Why don't you unpack that argument?

I mean, listen, all of us, we're all human, we're all human animals. So our brains are attracted to the culture war and we all have opinions on it and we all want to engage in it. And it's especially certain progressive people like, yeah, let's fight over this. But I think the healthy thing is to realize what are the actual problems and where is this emerging from? I think the argument I make in the piece that's on my Substack, which is that America is a great country as a frontier country, and we need to reinvigorate our frontier. We need to recreate a frontier in order for America to be truly great. And we unpack that a bunch. But the basic idea I try to explain is, listen, a lot of people like Elon Musk says the woke mind virus must be defeated or nothing else matters. And the argument I'm making is it's not really about woke. I think Elon's missing the point slightly there. I think what's happening is when you have these unaccountable bureaucracies, when you have all these failed training programs, failed prisons, failed healthcare orgs that are monopolies that therefore get to be really lazy and have really bad results for patients, when you have failing institutions, they end up embracing philosophies that virtue signal in order to try to protect themselves. And I think if you actually look at what are the places that have the most ludicrous quote unquote woke stuff going on, those are the places that tend to be failing places that are overly protected by kind of bad rules where good ideas can't win. If you're at like a really intense, great startup, the startup's not spending its time like doing all sorts of crazy virtue signaling, right? It's spending its time actually getting things done that matter. And I think we have to take these things that are in the core of our society that are broken, that are decadent. We got to put them back on the frontier. We got to add back in accountability. And what you'll find, like when you take the vocational schools that were failing and say, listen, You better get student salaries up. All of a sudden they have to focus on what skills to teach, how to partner with businesses. Like they're too busy. Their board meetings, they're not going on and on and on about arguing about the bathrooms and arguing about genders for the bathrooms. Because guess what? They have other stuff that actually matters. That's important, right? So it's exposed. So make them focus on things that matter.

So let's focus on some of these things that matter and dive into what are the actual problems, the real problems, and what are potential solutions. So let's start with Obviously, you started a new university, so you're focused on higher ed as well. But what is maybe misunderstood about what are the real problems in education?

Well, the biggest thing that's misunderstood, I think, about education, there's 2 things. One, we spend way more money on the worst schools than we do on the good schools. So I think a lot of people think, because they just listen to the arguments, we should spend more money on schools where there's African American kids or where there's minorities or where there's poor kids. Guess what? Right now, we spend way more money on inner city schools, on average, way more than than we do on these random schools in the Midwest. There was something that went around on Twitter the other day of this school in the Midwest that was giant and beautiful and had all these amenities. And the crazy thing is that school district spends 60% less than Washington, D.C. It's amazing, right? It's spending way less because guess what? There's not tons of special interests and tons of nonsense and tons of overpaid administrators who do nothing, stealing the money while getting bad results and not being held accountable. So first of all, it's not about money we're spending. It's about the accountability for that spend. Like anyone in the startup world knows, you could spend $100 million on a startup and still fail miserably, and you could have another startup spending $5 million and crush it because it's spending it the right ways, right? So it's not just about the money, it's about accountability. That's one. Number 2, I think is a very important point people don't realize. Our level of inequality in education— people love talking about inequality of wealth. Our level of inequality in education is way higher than our inequality of wealth. Like it turns out that the average public high school, based on all these different kinds of assessment tests, most people learn almost nothing in high school. The only group that's consistently learning the most in high school is the top 1%. So you want to address inequality in this country, first let's actually address the substantive inequality, which is education. And so the question is, how do we take, again, education and put it back on the frontier? How do we say, if you're not succeeding, you're going to be replaced? We need those frameworks. We need frameworks where people actually have to spend accountably, Where administrators who are administrating a failing school district and getting paid $400,000 a year shouldn't keep getting paid that every year while failing every year, right? Just like a bad business, they should go bankrupt. They should lose their job. Someone else should replace them and get to try. And so there's lots of ways of doing this. One way is different frameworks of school choice, which I think it makes sense. It's a form of accountability. It's not perfect. I'm in favor of school choice for poor kids. Like, I don't need school choice for my kids. My kids, I'm already going to send them where they want. At the very least, we should be doing school choice for poor kids. That's a big one. Education savings accounts done correctly is another great thing. Give parents the money, let parents choose where it goes. That's a form of accountability. Parents can choose where to spend it. But the question is not any of these specific policies. The question is, are we going to be bold and force accountability on the spending, or are we just going to keep giving buckets and buckets of money to the teachers unions and the special interests even while they fail? It's a very simple question.

George Floyd and what Black Lives Matter did, one of the things they did was shine a light on police unions. And I'm curious if the light will be extended on teachers unions.

No, of course. I mean, listen, everyone on the right knows how bad government unions are. FDR, who by the way was on the left, one of the great leftist presidents of the 20th century, he hated government unions. It's like he said, they don't make any sense. We shouldn't have them. And people probably know the history. The history And by the way, I think JFK was an amazing, interesting president and he had a lot of moral scandals, but I think he was a great leader. And JFK's father helped create government unions. This is not a myth. It's not a conspiracy theory. He literally made a deal to help JFK win the Democratic nomination that he agreed he would create government unions with a few of these big union groups in different states. And that's what happened. And it was a corrupt deal. JFK's father was a very wealthy, very corrupt man in lots of areas. And this was corrupt and we should never have done it. FDR knew we shouldn't have done it. Anyone who seriously looks at the impact that's had on the performance of our governments, on the output for poor people, knows we shouldn't have done it. So government unions shouldn't exist. 100% agree. Like, the right for some reason is blind on the police union issue, whereas the left is blind on like every other government union issue. There's this police union in Austin, and by the way, Austin has a serious problem, as do a lot of blue cities, where we need to hire more police. We need to respect our police. Like, I'm on the side of respecting police. I want more good police. I don't like when they pull me over either, but, but they actually do reduce crime. That's what the data shows. However, like our police union in Austin, as soon as this Uvalde thing happened, the Uvalde thing was where all those kids were shot and the police were waiting outside. They say, let's defend the Uvalde police. Let's stand up for them. And I said, guys, it looks like these guys were just cowards and let all these kids die. And they're like, oh no, we always stand up for police. And I'm like, oh God. And you looked into it and the police union was totally wrong, right? Those police were clearly guilty. They clearly didn't go in. It was, it was a crime. They were holding back parents from saving their kids. So I mean, there's nothing in our society where one group's always wrong, one group's always right. And this tribal stuff is stupid. I don't always defend police. There's a lot of bad police. The police union should not be defending bad police. At the same time, we do need to have police protected enough to do their jobs, be willing to work in America. So both of these extremes are wrong here.

Totally.

Let's talk about your thoughts on prison reform because some people might say, oh, we have too many people in prison. Other people might say we have too much crime. So how do we think about prison reform and crime?

Yeah, no, exactly. This is another case where both the left and the right standard kind of extreme right now in our society is wrong. Like the right is like, you don't want to just like lock everyone up and throw away the key. We don't need to like, you know, criminalize everything and be super nasty. And there's all these ways in which we've ruined communities by being like overcriminalizing things that Black people do versus white people on average. I think there's a lot of stuff there that's been done. It's obviously hurt communities and it's real. And people talk about systemic racism. I don't know about systemic racism, but There's definitely things that were done that were racist in the system towards certain groups. Now, on the other hand, there's a lot of really terrible ideas from the left where they just have DAs they're electing that aren't prosecuting people. So crime goes up, you get gangs moving in, you're allowed to steal for free. So the gangs— and this is literally true— the gangs fight for territories and cities because they're both allowed to steal for free. And you've had a 2-year-old shot on 880 in California and killed by rival gangs because they were fighting over the territory where they were both allowed to steal for free. I mean, that's obviously bad, right? to arrest people for breaking the law. So there's like comically stupid extremes on both sides. Question is, how do you make it more competent? Well, there's different parts of the criminal justice system. For me, the ones I'm focusing on are prisons, probation, and parole. So first of all, with prisons, we need the data. And so there's a nonprofit I was an early donor to. I helped them raise a lot of money called Recidiviz. And this is a really smart woman, Clementine, out of Google. And she, Erik Schmidt and others have backed her, and Kochs and others. And she basically got together a lot of technology and they're mapping out recidivism rates. And it's amazing how different recidivism rates are between different prisons, even for similar populations, you know, for different programs. And so, so that's like the first answer is getting the data. The second answer though is adding accountability. So what I want to do, which we haven't done yet, but we're getting close, is we're going to pass laws that will automatically fund the programs that are lowering recidivism and start to defund the programs that are tied to higher recidivism, right? I also want to do, I want to make prisons compete. I want to say like, okay, for everyone coming out of your prison in the next 2 years, let's see how they do in their life the next 3 years. There's 37 prisons in California. Why not have the 3 or 4 which have the worst results get their leadership replaced? You know, and we could tell them 5 years ahead of time, want to have the 3 or 4 doing the best get bonuses. And it'd be amazing. All of a sudden, imagine what that does to the culture of a prison if you all of a sudden have to really care about these people when they come out. Because right now they don't care. Right now it's terrible culture. And by the way, we've done this in probation and parole. We've dramatically changed the results in probation and parole in a lot of states. California did a great law, which was a model for the nation 14 years ago. No one in California knows about it because government's very funny. In business, you do something great, everyone will hear.

Yeah.

And government, it was like a bipartisan thing a Republican and Democrat did together in 2008, like SB 893 or whatever. And it basically changed the— it said all probation departments or counties in California And so the counties would always just send people back to the states, back to prison, because they don't care. It's not our problem anymore. We changed it so the county's got to keep some of the money if they raise the rehabilitation rates. And all of a sudden, all these counties were competing and were like figuring out techniques for rehabilitation. Like the whole culture of the probation departments changed to a positive culture because it had accountability, it had goals. And Montana did this. Lots of— we've passed this law now in 7 or 8 states with Cicero, and it changes. It changes culture in probation and parole to care about your results, to measure them, to think about them. So those are types of things. I don't think that's a left or a right thing. I think it's taking the best of our society, which is like entrepreneurial energy, best ideas win, accountability to results, and putting it into areas that were previously broken and that it fixes the culture, it fixes the results. And so that's the kind of stuff I love.

Totally. Let's talk about one more issue there. Homelessness. What's the real problem with homelessness? Michael Schellenberger says it's an addiction problem. I don't know, what is your take on what is the real problem and what's an actual solution?

So Michael Shellenberger's main advisor for a lot of his work the last few years was my head of policy at Cicero, by the way. So we tend to be somewhat aligned because we've given him a lot of stuff. Listen, I mean, higher home prices do correlate with more homelessness. That's obviously the case. Higher home prices in these cities though also correlate with like more progressive governments. So it's very complicated like to pull everything out. You know, it turns out, it turned— I'm usually in favor of building more homes, of trying to lower home prices. I mean, this is good for the country. It's good for the working class. So like, I'm not going to argue with the YIMBY people. Like, YIMBY people are correct. It's important. They're incorrect. It's the full answer.

Yeah, right.

So they're correct. This is very important. But the full answer is that you go on the streets, 75% of these people who are homeless have mental health issues. 75% of people who are homeless have drug issues. Most of that's overlapping and most of them have both. And most of that, we're spending $1 billion a year in San Francisco. We're spending massive amounts of money elsewhere. Most of that money is being spent unaccountably. Most of the homeless groups, their actual incentive, let's just be honest, is there to be more, more public visual homelessness so they can get more money. Like that is their incentive. And they're not held accountable to metrics. When we do get metrics, it's comically bad. We'll have spent, we'll have like helped like 29 people with like $160,000 spend on something. I mean, it's like, it's like comically bad when the metrics do come out and they're hidden away in these giant PDFs that every once in a while you force them to do. And there's no— the rewards are not rewarded based on like your results. The rewards are based on the fact you lobbied better, the fact that you had a more woke BIPOC group that like represents the people that the city wants to give money to. It's bullshit. It's like a weird form of like broken affirmative action that's not actually focused on like what are the results, what's helping people. And you know, the solution if I was in charge of these things is one, you do more You do more temporary shelters, and then you do more mental health treatment, more drug treatment, and you do all of that with groups that are paid accountably based on metrics. And then basically we do need mental health hospitals. We do need the ability to intervene. There should be something called a mental health court where if someone's broken the law multiple times, again, this is the right wants to send them to prison. The left wants to let them go poop on the street a 10th time. We shouldn't be letting them go poop on the street a 10th time. We should be sending them to prison. We shouldn't be sending them to prison. We need to have like forced treatment. Obviously, it's like an adult solution, right, Erik? It's like, it's like, it's like forced treatment's the obvious adult solution, right? And instead we're like either throwing them in prison or letting them poop again on the street, which is— both of them are wrong.

Yeah.

So anyway, there's just— you just need common sense and leadership and accountability here.

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Go to marketerhire.com/upstream and use code upstream to get your So what these trends show is you're trying to introduce market incentives, market competition, market accountability.

It's kind of like market. It's not really market in the sense the government probably has to be involved in these things, but I'm trying to take— you call it market. You could take the functional parts of our free society, which is metrics and accountability, and those allow innovation, right? And those allow responsibility.

Totally.

The cynical take is, as we kind of alluded to it a little bit, is That some of these people, the bigger the problem is, the more the budgets they need, the more they can— 100%.

I mean, it's not just a cynical take. There's people whose friends and family are each making like low to mid-six figures and it's a huge industry. I mean, and by the way, there's other huge industries that are bigger problems. I think defense is a bigger problem. I think healthcare is a bigger problem, but homelessness is in our faces and it's frustrating to me because it makes a lot of young people say, oh, our society is failing. Capitalism is failing. Capitalism's not failing with the homelessness issue. It's a terribly run government program that's creating actually more of the problem and paying more people to come there. And it's killing people. Like, people are dying on the streets. LA is like something like 3 or 4 people a day last year dying on these homeless alleys because of this terrible policy. And I'll tell you one more crazy policy, Erik, around this, which is really important for people to know. HUD, I think under Obama, created a point system for giving out free homes. W. Bush originally was the guy who said, let's give out free homes to homeless people. I think everyone thought it sounded reasonable. There's homeless people, let's give them homes. You want to be generous. He's a compassionate conservative. But it turned out there's a problem with giving out homes, is that there's like 10 million people in our society that will get in line for getting a free home because everyone wants a free home, it turns out. So, okay, is that a fair— everyone in society? I don't think so. We've always been in a place where not everyone can afford a home, and eventually we'll be rich enough that they can, but right now, for reasons they can't. So we have to give them out equitably. So we have a point system. You know how you get points to getting a free home?

No, how?

You get, you get points for being addicted to drugs. You get more points if you're not recovering from drugs. You get more points if you committed a crime because you're in a tough spot. You get more points if it was a violent crime. If you have kids, you get more points if they've been truant a lot. You get more points if the kid was taken away from you by the government. This is literally a point system. So you have these people waiting in line. You have these people trying to prove that they deserve a home. Like, what do you think that does with that incentive system? Do you think they're going to start being on drugs? Do you think they're going to go into recovery programs? So, and this is happening in all of our cities around the nation. This is not a fake thing. We've written articles in the City Journal. Like, this is a real thing. It reminds me a lot of the welfare programs in the '90s that Newt Gingrich and Bill Clinton got rid of that had the wrong programs that kept people from working. These incentives are breaking our cities. And, and we need common sense leaders to step in and say, I'm sorry, socialist, progressive, wacky people. Like, this is enough. You're breaking enough. We're not gonna let you do it anymore. And so one of my things is we're going to states and we're saying, okay, States that are run by competent people, let's put in really clear rules. Let's not let cities break these things because by the way, the state's in charge ultimately and they shouldn't be letting cities hurt these people that way. So that's a big thing we're doing.

It's crazy that even the most staunch progressives, take someone like Ezra Klein, he had a recent podcast. He said why liberals, yes, liberals are governing horribly. Even they are admitting like, hey, California's failing.

It's all these special interest groups on the left that are part of government, that are part of these things. And there's like something against on the left being bold and standing up and saying, no, this is broken, this is wrong. And like, by the way, the right's not always very good at that either. And sometimes when they do it, they do it the wrong way. I'm not saying we have a lot of great leaders, but we need great leaders to step up who've been successful in other areas and step in and run these things. I thought Rick Crusoe, it was very bold of him to do it. There's lots of structural reasons why these homeless industrial groups, by the way, they run voting machines. It's legal. They help get out tens of thousands of votes for people who are funding them. That's why they're so powerful also, by the way. Rick Russo lost just within a margin of that giant homeless industrial voting machine in LA. But we need people like that to try to push through, try to win. We need everyone else to wake up and start supporting competent people to get in and fix these things.

Let's lastly focus on healthcare because this also illustrates a ton of waste. What's the real problem in healthcare, misunderstanding about solving our healthcare system and What is potential solution?

Oh gosh, this is so big. It's like, it's like 20% of our economy and it's massive. Um, you know, I think monopolies and crony capitalism is a big part of it, right? So I think every area of healthcare has people who've changed the law and who've set things up to make it so that they benefit and so that the things that would naturally happen that would make it cheaper and make it better don't happen. So I think the health systems are an obvious local monopoly. They block lots of competition. They basically make it really, really hard for new insurance companies and other things to break in because they control monopolies locally. So it's kind of their way or the highway. And they'll oftentimes charge 5 or 6 times for something. Now, sometimes they charge more for something because it's better, but a lot of times they don't and they purposely don't want to be transparent. So even though we've passed laws trying to make it transparent, they're all in violation of those laws because there's not enough teeth. So that's like one issue. Then the payers themselves have the worst incentive. We could actually get through this and probably fix it. if we were allowed to have payers make money by making healthcare better and cheaper. But payers have fixed 20% margins. So the way it works, for example, our friend at UT Dell Medical, he showed better results for patients with 80% less spend in musculoskeletal care. This is not like a small amount, it's 80% less spend, right?

Wow.

And like 30, 40% less spend in many other key areas. He's like this really smart neurosurgeon running UT Dell Medical. And none of the insurance companies wanted to work with him because, by the way, if you make 80% less money going through something, then they're 20% of 80% less. You know, they're getting 4 versus 20. That's not good for the insurance company's profits. So, so the incentives are totally misaligned for payers, and so that's, that's really corrupt. Um, and then you have like doctors groups are very powerful. Listen, we have a lot of amazing doctors. We need more amazing doctors in the US, but the American Medical Association, uh, has a lot of things where they'll lobby against using AI plus nurses. They'll lobby against— it's called scope of practice, like any new way of doing something more efficiently. Like my, my friend Uh, is an allergist. We have friends from Stanford and from high school in the Bay Area, and he's an allergist, and there's a certain way of working, and we've, we've mapped it out. He could see 20— you know, there's a shortage of allergists in the Bay Area, by the way. It's a big problem.

Yeah.

He could see 20 times as many patients by just hiring a few nurses, a few frontline people, you know, a handful of frontline people, building some processes, building some basic tech. He's not allowed to do that. It's against the law. Any other industry, he'd be, he'd be seeing 20 times— he'd be 20 times productive. We bring the cost down. Everyone would get treated and get their allergy stuff. It's against the law. So there's all these scope of practice doctor things that are ridiculous. And then, you know, the drug companies have all these games they play to make things more expensive. There's something called PBMs, which make tens to hundreds of billions of dollars as middlemen, the way they've set things up for selling drugs. It just, it just, it goes on and on. Like the incentives are misaligned. You know, I think the best hope is there's a couple of things. One is like the self-insured route. So I think we're trying, the guy who's UT Dell Medical is For example, building a company with us where we're partnered with a guy who built an aligned insurance company for self-insured. And we're doing a new one. We're building clinics, trying to bring down the costs, but then have people who are paying their own costs work with him. So you get better results for cheaper. So there's things like that. It's very hard to break through. The other really big one, Erik, I'll give you, I think this is really important, is we need the innovation ecosystem to be allowed into healthcare.

Yeah.

So what's the key data? The key data is the medical records and the billing records. And if you could see that, you could change a lot. So one of the things we're trying to do is saying, rather than the health system owning your data, we think people should own their own data. And if people own their own data, then we could each decide to use whatever app we want. I can say, I want to use this app with this payer. And once an app got a lot of people decide to use it, we'd have enough data. We can start doing preventative healthcare with AI. We can start helping them shop. There's all these things that you and I and others could figure out, you know, in smart 22-year-old kids who want to be entrepreneurs could figure out. with that app to create new possibilities, new clinics, new payers, et cetera. So right now, the Obama administration cleverly tried to put electronic healthcare records everywhere, right? They paid tens of billions of dollars so everything would be in electronics. But Epic was the big company at the time. Epic won. Epic's in 60% of health systems. They make billions of dollars cash flow a year. They are very hard to plug into. They have very strong lobbyists. They've basically stopped us from getting this data out. And famously, she was arguing with Vice President Joe Biden at the time when he wanted data for his son's cancer. She's like, why would you need to see the data? You don't know what to do with the data. And obviously he might not know what to do with the data, but if you could have an app, the app could then aggregate it and do things. And I'm very frustrated to see him as president now not going after this. I don't know if he's too old and forgot or what, but this is a huge issue for our country to allow innovation in there and allow markets in there. So anyway, there's just all these things we have to fix in policy. And we have to get the tech in and I think we could address healthcare better.

Yeah.

You know, if our, if our friend Balaji was here, he would agree that we need compelling leaders, but he would say, he would agree. He'd say these institutions are so beyond screwed. The incentives are so messed up that we might as well just create new ones.

Um, well, I mean, in this case, yeah, you can create new, like, like this is what the UT Dell guy is doing or creating new clinics and new things, but you can't just like, In real life, you can't just totally go around the system. I think Balaji is a great thinker and I really admire— I think he gives this like really good push on this like extreme on the side. But the reason, you know, I'm someone who's actually started like a lot of big companies in these areas and invest in like successfully built a lot of things in these areas, and it needs to like be connected enough to the real world to actually get going, right?

Yeah.

So I think, I think there's a little difference there where I actually think there's like ways we can like be very bold and create things that take the current system and transform it, it's very hard to build entirely outside of the real world.

That's tough. And Belgium goes to the extreme, of course, but there's a broader question of when to reform an institution versus when to start a new one. Elon Musk, he could have started a new Twitter, but he just bought Twitter and he's reforming it from the inside out. And so maybe there will be other bold people who can come into an organization and say, hey, this is 80% overstaffed. Or people are misaligned with our organization, or these rules don't make any sense and, and can just—

Well, I think, yeah, I think to Balaji's point, we probably do need some kind of new innovation zone. There's literally tens of thousands of rules like blocking things from happening in healthcare that like make it things that would be way safer, way more productive. Just like the whole system could cost like a third as much and have better results, right? If so, I do, I am in favor of like bold new innovation zones where you can build things from scratch and I do think that's very valuable. I also think right now there's a ton of companies that we're building that are working with the system to vastly improve it. And so I think a combination of the two would be valuable.

Totally. Elon himself is an example with the companies, Tesla and SpaceX.

No, of course. I started Palantir instead of going to work for IBM and fixing it, right? Or Northrop or Lockheed or whatever. And we started OpenGov versus going to the old black and white companies. in fixing the old software the cities were using from 30 years ago. In many cases, you just want to throw out a broken, rotten culture and recreate it. In other cases, you have something that's such a powerful moat and it's such a powerful system that you kind of have to work within it.

Yeah. And by the way, do talk about defense for a second because people often associate defense with the right and defense has its own challenges and government entrenched interests and stuff like that. Yeah.

I mean, I guess if you want to associate defense with the right, you can call $800 billion of defense spending Kind of like welfare on the right in the sense that a lot of it's a jobs program. This is what the right doesn't like to admit is that there's actual defense we need against China and Iran. There's bad guys in the world. We need America to be strong, 100% aligned with that. We could do that with half the defense budget and just getting rid of a lot of people and bases we don't need right now that are basically fighting wars from decades ago versus the wars we should be fighting and the deterrence we should be doing. So I'm very controversial on that. On the right, you're supposed to only pay homage to the fact that we just need to spend more and more and more money on this stuff. And it's just so wasteful. And listen, I just probably only— defense is very hard, Erik. You have to basically be like 10 times better on the product side to break in. Then you also have to be really good at playing the game in DC. So when I was 21 building Palantir, we were like more than 10 times better on the product side. We could save the government billions of dollars. We can catch bad guys they wouldn't catch otherwise. We can make everything work together with protect civil liberties. Like we're just way ahead of anything they'd done. We had no idea how to play the game in DC. So it took us a long time and it was very frustrating. Eventually we got to the point, we're still not the best at Palantir, but we got to the point, there's $2 billion revenue, half that's in global government. I mean, it's a good company. It's doing really well. Anduril, which was started by 3 of my best Palantir guys with Palmer Luckey, like they kind of had already learned all the lessons and they'd also seen like giant gaps in defense hardware software side. So they said, you know what, we could be 10 times better in this other area, kind of shame the government, have to work with us here. And now we know how to play the game on the Hill.

Totally.

So that was great. So they grew really fast. I started a company out of AVC called Epirus. And another gap I saw, which is that basically electronic warfare systems were not deploying kind of modern technology from Silicon Valley. And it turns out if you use AI on a chip, you can control power on nanosecond timescales to hit the electronic warfare emitter. So you can actually make these electronic warfare systems shoot 10 times farther for the same amount of power. And this was like a pretty cool thing my friends and I did. It, we proved, it took us about $30, $40 million to prove it. We just won a giant contest. These are competitors that, you know, L3 and Raytheon, Lockheed, they do a lot of good stuff, but their systems they spent billions of dollars on, and ours literally shot down the drones 9 times farther away in the contest, you know, in the field. We got our first big contract a couple months ago. Epirus is named after the bow of Theseus, which had infinite arrows. This thing could shoot like millions of times because it's shooting blasts of microwave energy to turn off bad guys far away. But it's just amazing like how much better you could be with a small group of people than these big companies. And that should scare everyone because there are bad guys in the world.

Yeah.

There are really smart engineers working for the bad guys. So America had this advantage in the 19th, you know, in the, in the 20th century, really late 19th, 20th century, because we had this massive industrial base and we could spend more money. We'd have more tanks, more planes, more missiles, whatever. That's not really what warfare is about as much anymore. If you could have technology, like if you could have little tiny like drones and androids and things that turn things off and then tiny little ships and they run all around coordinating, that are like 100 times smarter than these giant things. Like you could have like a tiny, tiny country wipe out a bigger country's military, right? It's very asymmetric these days. And so it's really important that America partners with its elite top technologists and brings them in. And that's what, so that's what I've been trying to do. So listen, there's, I think 8 companies have actually made it to become unicorns in defense the last 25 years. 2 of them I started, 3 of them were started by people I backed early. So I've been pretty involved in that side of things. It's one of our 5 big sectors. And, you know, I don't like owning big defense companies at scale because I think it's like a super weird crony industry where you have to like go schmooze people and get contracts. So I've actually sold out when these things get big. Like I start them, I get them to be successful, have the right impact, and then I mostly sell out. Like I've sold, I'm not supposed to say too much, but I've sold. I'm still very bullish on Palantir, but it's not my main economic thing just because like, and Palantir is still doing really, really good work, but I just, it's not fun for me to like play that game at scale. It's fun for me to start the new best things and scale them up and make them functional.

One of the things you said is that the way to have impact is on a state level, not a federal level. Does that mean, you know, like, why is that? You know, if you're a CEO of Palantir, you can fire anybody, you can change the rules of how the company works. If you're the president of the United States, what is the actual impact you can have? What can you touch versus what can you not touch?

Well, sorry. So what I said is I am able to have the most impact policy-wise at the state level versus federal level. So let's say we have a new idea, and this is not true for defense. Defense, you have to do federal level. So, you know, so it's a tough question if you're asking about defense, but if you're trying to figure out and teach people like how our training program should work or how our prisons should work or, or how we should like do like regulatory processes using data and tech, like those things actually also exist at a federal level, but good luck getting that done through Congress. That's really hard. You know how hard it is to get people at the federal level to agree on something, get it done these days?

Yeah.

My mentor George Shultz, he passed away at 100 last year. He would always tell me stories of how he would convince Tip O'Neill and Ronald Reagan of something that was each their idea. And he got like tax reform that lowered taxes and closed loopholes done with like 97 votes in the Senate. And that was maybe possible in the '80s, plus he was amazing. I'm not George Shultz. I have no idea. You know, even maybe if I was a cabinet secretary, I don't know. I have no idea how to get these things done at the federal level. In states, there's a much lower bar. I mean, it's like you can walk in, You can give 'em a really good white paper. You could have 'em talk to a few experts. You could show 'em an idea that works and you could say, let's partner and let's iterate. Let's get something done. And there's not 10 other Joe Lonsdales arguing with people about what to do in Tennessee or Arizona or Utah. And there definitely are more than 10 other Joe Lonsdales all trying to get the attention of everyone in DC. So I just think states are a great place to prove something, to partner on something a state could do that's great for the state. And then you can teach others and you can teach the national government. That's my framework.

People, often journalists will get scared at the power of Silicon Valley, the power of technology. And yet it's so surprising how Silicon Valley and technology has had such little impact relatively on their own local government within Silicon Valley. You moved to Austin. There were a lot of things taking you to Austin, but let's say that you were dead set on reforming San Francisco and California more broadly. What is the play for super ambitious people who say, hey, this state or this city is beyond where it should be, beyond screwed? Are there levers that you can really pull and what are those levers to make a difference?

For a city or for a state? I mean, sure, you get involved, right? I mean, this is, it's funny, the journalists are part of the core, right? So there's a frontier part of our society that's like the competent part. Most of these mainstream journalists are like, reflect kind of the values of the core of the bureaucracy of the lawyers. Of course they don't like, because there's a natural tension here, right? I mean, yeah. So one of my favorite historians of Rome I mentioned in my piece is Ronald Syme, and he remarked that the strength and vitality of an empire is frequently due to new aristocracy from the periphery. So the cycles of history, you get these cores that rot and you get these peripheries that are still functional, still having to fight for themselves, still having to do things, because on the core, on the periphery, on the frontier, things are still existential. So it's kind of like this process of evolution where things get stronger, whereas on the core, they just aren't getting fed by everything going on. And so they just kind of rot. And so people who have really succeeded in new ways on the frontier are exactly who we want to come in and fix the core and to make it strong again. And Eric Schmidt and I don't have the same politics, but thank goodness he was involved going in and helping President Obama and in the White House all the time. And he's part of something. He was one of the new aristocracy from the periphery. He had done great things and been successful. He learned how to be a leader. He learned what was functional in the world at that time in technology, in business, and unrelated areas, and was able to apply those lessons and help. And that's my job as well. I don't want it to be about me. I want it to be about like, I wish like 100 other leaders like me were doing this. Like, I would love it if like moderate Democrats ran the entire country through DC combined with like 100 really talented leaders who made it really freaking competent. So we were one of the greatest countries in the world. You know, that'd be fine if 100 great tech people all wanted to go do that and like, and like didn't put up with incompetence, didn't put up with government unions that were failing, right? Didn't put up with failing people in our prisons, didn't put up with failing training programs, like, like go actually make it work. Right. So, so, so, so yes, I think everyone who's competent should get more involved. You know, cities are very hard to get involved in. There's like super corrupt politics. You kind of have to control the city council, but I say get involved in your state, get involved in DC. And if you can get involved in your city and try to change it, and then I think these things are worthwhile.

Yeah.

It is interesting for people who are listening and want to get involved and want to make an impact. Trump famously said he wanted to drain the swamp and he didn't. And there's a question as to what was— first you need to define, of course, which swamp you're talking about.

I think draining a swamp is very hard to do. I'm not a huge Trump fan. I don't want him to run again. I think there were a lot of good policies that did confront certain things in the swamp. I think there was some good things that got done for sure.

Yeah. It is just interesting to think just about Like what swamp is drainable versus what is actually just stuck and broken and you just can't change?

Well, I mean, you can change it. Like certain departments you should get rid of, right? If they're not broken, they're not doing anything useful, you get rid of them. And the State Department thing, I was just talking to Secretary Mike Pompeo who ran the State Department and he wanted to cut the budget by 40%. He said, there's probably a lot of people in the State Department who hate our country, who are doing things against our country. It's become this giant bureaucratic kludge. We should just cut them. And by the way, there's a lot of freaking cowards on both sides who won't do these things like this. But I mean, you have to either make bureaucracies accountable or you cut them. And we desperately need our country to do this if we're going to get back to competence.

Yeah, back to competence. I love that. A lot of people will focus on wealth inequality, and it's my instinct to not focus on that, more focus on overall, are people getting richer? Are people getting wealthier? Because focus on inequality can But Ezra came on the podcast and he said, well, one reason you should focus on inequality is because wealth inequality can lead to political inequality. Are you sympathetic with that? Is there some truth to that? I remember Toren, hey, government is like—

I think inequality, first of all, is a natural state of the world. So there's always going to be inequality. I think inequality gets more extreme with certain things. So what are the factors? If you want to say like, where would I give Ezra some credit? I think we created inequality unfairly by making money too cheap. And I think we made people who were in finance be able to make too much money versus a typical worker. And I think that's bad for the country. I think we should stop doing that. So that's, that's, that's, that's, yeah. So yes, that is bad. I think inequality comes from, like I said, from education system. We have more educational inequality in this country than we have wealth inequality.

Yeah.

So like, if you want to substantively fix it, Rather than trying to fix the results, why don't you go and fix the core and actually fix education inequality, which would require accountability for our education system, which would require going against the biggest supporter of the Democrats, which is the government unions in education, which is why they're not doing it. So it's extremely hypocritical. And so I don't think anyone has any credibility on wealth inequality if they're not talking about accountability in education, fixing education inequality. I think that's another big one. But I'll tell you what, Erik, if instead of working most of today, And try to get ideas out and then trying to build things to build companies. 'Cause I'm getting an EIR later today for another company I'm building. I've, I've, I, you know, I started 3 multi-billion dollar companies before I started my fund. I've started like $4 billion companies in my fund. If I stop starting billion dollar companies, inequality will go down. Like I literally can go to the beach, I can get a mistress, my wife won't like it very much, you know, and, and, and I can spend lots of money buying her jewels.

Yeah.

And, and that would make inequality go down. But this is, this is an important point. Because it's obviously not inequality we should be measuring here. Like, we don't want me to go to the beach and get a mistress, not just because that'd be extremely rude to my wife and my 4 daughters. It's actually good for the world for me to keep building companies.

Yeah.

And so what are we really talking about here, right? It's like, it's this huge confusion. Like, you want people to be immensely successful. Like, in China, the rich people right now are terribly afraid to build new companies. Like, Xi Jinping is going to massively reduce inequality because he just showed that it's not worth building another tech company because you'll be in big trouble. And you might disappear, you might get in a car crash, you might have a heart attack. Like, there's literally billionaires dying in China. And so they're terrified. They're not going to build stuff. That is not good for the world. It's not good for our country. Even though I'm a competitor to China, even though I want us to be stronger in China, it's also, it's not good for any of us overall over the long term that we didn't have the brightest people in this great civilization of China trying to create things right now because they're terrified.

Yeah.

So, so, so, so no, I think, I think Margaret Thatcher said it best, that there's a lot of people that would rather the poor be poorer so long as the rich were not richer.

Yeah.

And that really is the case. And so what should we be doing? Yes, the dumb sources of inequality like cheap money and the Fed, we got to adjust how we do those things. The education, obviously we got to fix. And then we got to do what we can to create opportunity. Like training programs in our country are important. Rather than just spend money on stupid training programs, make them accountable. Like, I've helped double the salaries of probably 100,000 kids now with policies I've passed. Like, that's how you address inequality is you make the bottom better off. But inequality is a stupid word. I think it's more should be like success overall altogether is the thing.

And one thing I think people might have to cede is the term equality of opportunity. Because when you really look at that term, people can say, hey, You know, I have different parents. I, you know, different—

You're never going to have equal quality of opportunity. No one's ever going to have the advantages my daughters have.

Exactly.

They're just not. They're not going to have the intelligence. They're not going to have the looks. They're not going to have a father who understands business and has mentored hundreds of CEOs. My daughters have usually unfair advantages. I hope they use them. I'm going to do my best. I can't promise they will. But there's never going to be exact equality of opportunity. But what we do need to work on rather than equality of opportunity is we need to like work on giving the best possible opportunity to a lot more people in our society. And that means fixing our criminal justice system so these communities are working, fixing education. There's all these things we can be doing to help these people, but this whole framework of framing it like equality and inequality is just a nasty framework. They're just trying to take people down and it doesn't make any sense to me.

And this is a vulnerability in liberalism, is they too readily concede equality of opportunity or that we should strive for some equality, and then people go on and take that.

Yeah, I know. So France has this whole obsession with equality and fraternity. I don't think that's the American spirit at all. American spirit is equality under the law. It's nothing to do with equality of results. It's nothing to do with the fact that everything's the same. Our job should be fairness and equality under the law, equality of human dignity in terms of every life is worth an equal amount. But then we do everything we can to create opportunity for the least well off. I think Cicero is about the working class and the middle class and helping people and people in criminal justice systems. It's about helping the least well off and taking ideas to fix that. And that's something that I think it's our duty, frankly, as leaders in society to help those people. Like, that should be how we spend our marginal philanthropic time, right? Yeah, that's the right thing to do. But to say that it's the things need to be— saying the inequality itself is the issue, it's just, it's just, it's like, it's kind of a nasty envy-driven thing.

Totally.

You knew we saw people with, uh, guillotines outside Jeff Bezos' house, but people don't realize that when these companies are built, beyond the services that they themselves provide, like Amazon or Facebook, et cetera. It's also more tax dollars and just more wealth in general.

And people have no idea how economic surplus works, how positive sum stuff works. It's just like, it's not intuitive to the average person.

And yeah, I wonder if there was a, you can imagine almost like a UBI that's tied to the S&P 500 or something. Like if there's a way to— Yeah.

Alex Furstenberg's trying to do this and I, a lot of people are talking about it. I think it's an interesting idea. So basically like low-end workers, You want them to participate somehow in our economy, in our— in our— in our— like, we want everyone to root for the S&P 500 in this sense, right? You want equity markets to go up, you want GDP to go up. Like, everyone should be tied to that. And I think everyone already implicitly has that interest, but giving it to them explicitly, saying like, listen, if you don't have a 401, if you're like a poorer person, having government match to help you have a 401, and then kind of copying Australia, because Australia has the best pension system where you can move your pension. amongst things. That way they kind of have to compete. Again, competition of ideas. So I think that framework, talking to a lot of people in DC, a lot of friends are working on that. I think it's reasonable. I think we do want everyone in our society to kind of be part of that interest.

Yeah, I do agree with your institution-first approach and how focusing on accountability will solve some of these culture problems. But at the same time, I acknowledge that there are some institutions whose very end goals are deeply problematic. Maybe it's focused on solving inequality, and I'm grateful that they're so ineffective at that. And so it feels like, you know, some people say politics is downstream from culture. It feels like culture is important to solve too.

I think culture gets fixed based on role models and based on people seeing what works. Like, one of the most dangerous things about government getting involved and being the main thing responsible for poor people is what that does to culture, because basically Like when you make a choice to help people, when you're deciding to help and you're a leader saying, I'm going to do this to help, people see that and people say, I want to be like that person. I'm going to make that choice too. And it's like a positive feedback effect where people are all deciding to help. And America is by far, it's still the most charitable country in the world, but we are way ahead of everyone else in the 19th century. And it was this like positive, cool thing that because we were free, because we had the choice to do it and because people chose to do it, it really created this extremely positive culture of helping your neighbor, helping your community. And I think accidentally when you put in a bunch of things that force people to help instead, they take a bunch of their money and say, we're just going to do it for you. I think you get rid of that role model. And so I think you actually really, really hit our culture in a really nasty way starting about 60 years ago by trying to have government step in and replace that choice and replace that cultural impetus that it's our job to do it ourselves and our job to choose to do it. And it's actually fascinating. Again, I think a lot of modern Democrats I really respect, and I have a lot of views on the modern Democrat side as well as Republican side. But it's interesting, Republicans still give almost twice as much money to charity on average. And because they're still from that part of that free culture where it's our job, where I think Democrats are much more from the, oh, it's the state's job side. And frankly, I don't think that's healthy. So I think the way to improve culture is ironically the government has to do less and it has to let people step in and let people make these choices.

Yeah, that makes sense. You focus, as you mentioned, mostly on statewide. Your peer and mentor and friend, Collaborator, Peter Thiel, has put his focus on more of the national level, it seems, and trying to push—

Well, I don't think Peter's— see, everyone has mistaken on Peter. Everyone thinks Peter's focusing on it. He's not really focusing on it. He just backed 2 of his friends. Got it. If Peter was focusing on it, Peter's a genius. He has lots of money. He could have like got involved in 26 races, right? Like Peter could have focused on it and you would've all noticed, right? Because like, it's like Peter is a huge player if he wants to be. And it's so funny. They all want to talk about him as if he's like boogeyman. He helped 2 of his friends. It's like one of them worked out, one of them didn't. The one that didn't pissed off everyone on the right because he gave them money the wrong way and the wrong time and the wrong candidate and everyone's angry at him. And it's because he's an outsider just helping his friends. Yeah.

And is it, it is interesting, whereas Reid Hoffman is more systematically across.

Reid is massively systematic. I mean, Reid was the one who like won the Senate in Georgia by taking Trump's, you know, what Trump said and like just, Like changing it around, not changing it, but like taking different clips, finding what suppressed the vote on the far right, getting it to all the rural areas of Georgia, you know, A/B testing, like money spending. It really baffles me because we'll agree on like 80, 90% of policy. And then he'll just get like, it's like he wants to be popular with his far left friends and he'll just like get so aggressive and just do all this stuff. And I think it's a popularity thing. It's a game thing.

I don't know.

It's frustrating because he's not, he's not a dumb guy, but he's, he's playing these really aggressive games with for some reason.

Yeah, no, he's brilliant and aligned on many topics for sure. But yeah, there's some differences, as you mentioned. Let's talk about the future of the right. 2024, let's say that the GOP is asking you for, hey, what's going to win? What's your strategy? What do you think?

Well, there's what's going to win and there's what the right should be. And unfortunately, politics is so shaped by what's going to win sometimes.

But let's do both.

I think Ron DeSantis is the most likely to win. And I think Ron is a fighter. I don't agree with him on necessarily every part of the culture war stuff, but Ron's a fighter. And I think we need a fighter right now to go against these broken, incompetent areas of our society. We have a cancer that's spread throughout our society of broken institutions and of regulatory bodies that are out of control. The FTC is focusing on all the wrong things and breaking stuff for us and trying to abrogate power to itself that it doesn't have in the Constitution, as are many other regulatory agencies. We need to stand up to these bureaucracies. And so you need a fighter. I think what's going to win is a really aggressive fighter is what I tell them. Be really clear on your principles and be really proud of what America stands for as a frontier society and take all this broken, kludgy, horrible stuff and put it back, make it accountable, either cut the funding or tie the funding to accountability.

Yeah.

And there's 8 million people who are some form of like a consultant or service person in DC. for the government, and you could get rid of 2/3 of those. You can easily get rid of 2/3, and the whole thing would work better with competent leadership. It's like a much worse version of Twitter where it's very clear that somebody can be bold enough to fire a lot of nonsense and actually then make it work better.

It's fascinating with DeSantis because one example of not solving culture where it could be a problem is he could try to ban wokeness from schools. Let's just say that crudely. But if all the teachers are woke, they'll just kind of get around it somehow.

You're never going to ban wokeness from school. You probably shouldn't be teaching certain books in schools.

Listen, I'm not a fan of banning books in general.

Everyone should be able to read whatever book they want. But if a government's going to be paying for something, it is the governor's job to say what we're going to pay for or not. And the government probably shouldn't be paying for a lot of the nonsense books we've seen them paying for in schools for 3rd graders. Like, they shouldn't be talking about like different types of gay sex in elementary schools. I mean, within the books showing how to do it. Like, that's weird. I'm not against gay sex, whatever. It's like, but it just probably shouldn't be in the books, right? It's like, or the idea of transgenderism. I don't want to get onto this. It's like, you know, but I I think there is a really interesting question in general in our culture about how much we obsess over our kind of inner psychological reality versus actual realities. And I think there's battles to be had there. But I think he's reasonable overall what he's doing to say, listen, like the AP Black History thing, it sounds really bad from the outside. Why are you canceling AP Black History? Well, if you go and read the actual College Board AP course, the whole thing was like critical race theory, it was Marxism, it was like all these scholars who hate America. who believe in totally different frameworks of how the world works. And it was basically like getting kids to study and learn like Hating America 101 and Marxism 101 and are taking a course on it. That's bullshit. That shouldn't be what Black history means. So it's like, he's 100% right to fight that battle. So a lot of these things sound worse from the outside, but when you dig in, you're like, oh wow, he's actually right here. And I think when people dig in, like 80% agree with him.

Yeah. It's a segue to what you're doing with UATX, the university you're building in Austin. I'm curious, because one approach you could have done, and maybe you're doing this to some degree, but is to start kind of careerist first. You could have said, hey, this is a school where we will help you get jobs at Palantir or Tesla. And thus—

Well, that's definitely part of it, is that it's a great university. And Magoni is a great university. We're actually going to announce like 200 companies that are tied to it and that are trying to hire from it.

Right.

So I think that's a big part of like attracting undergrads and doing that right. But what we're really trying to do, Erik, is we're trying to create the next great university. We're trying to compete with Harvard, Stanford, MIT, Yale, Princeton. We're trying to show that it's possible to have a great school that's more interdisciplinary. It's not conquered by a crazy woke administration. It's not run by neo-Marxists. You're allowed to speak up and have different views during debates. We're going to have checks on power. We actually have a Supreme Court separate from our board to enforce the free speech code. So our board, no matter who gets on there, can't actually push back on that. And listen, I don't want people running around being crazy offensive. I want humility and I want productive conversations and healthy conversations, but You know, the reason we had 5,000 professors apply after we announced the UATX is because there's like tons of people at these schools of all sorts that are terrified to speak up and that are getting in big trouble. We have, you know, one of our new professors is a radical feminist. She's been on the left her whole career, but she has a different view on the transgender and what makes a woman than other people. And she got canceled from her campus, wasn't allowed to talk anymore.

Yeah.

Right. And so, you know, I think we have to have healthy conversations and healthy debates about these things and allowing both sides of these debates for our future is really important. So Really proud to be building a great university. We've raised over $120 million. We're going to launch our first class late next year. We have these really cool seminars we're doing with top students from around the world. So it's going really well.

That's great. Let's close the podcast with this question. You also close the American Optimist podcast you run also with this question sometimes, which is, you can't just be anti-woke. You have to be pro-something. What's the ideological vision that Americans can get behind? Because you and I, we could be techno optimists, but the rest of the country, or The masses are not really going to understand kind of the technology forward. Like, what's the vision that really gets people excited?

Well, listen, America right now is in the best place of any country in the world. We have like, we have best resources. We have, we still have a very functional court system. We still have our freedoms unlike other places. We don't have to be scared to speak up like you do in like a lot of other major countries right now. And, you know, we don't have like problems with assassinations. Like, there's like, things are actually quite functional relative to a lot of times in history. We're a very, very wealthy country. I think, listen, the way we're going to fix things, we're going to make everything competent again. We're going to take everything in your life that's incompetent and we're going to expose it to market and accountable forces. We're going to make it competent again. And in the technology world, not everyone needs to understand technology, but things are going to get a lot cheaper. We're going to use AI to manufacture things. They're going to be a lot, lot, lot cheaper. We're going to make houses cheaper. We're going to have transportation. We're going to have really cheap tunnels everywhere so you can get in and out of cities without traffic. So I think we're getting rid of traffic. I think we have flying cars that are working. They're being approved the next couple years. They're going to get really cheap. We're all going to be able to fly around electric vehicles. So, I mean, I think we're gonna have a golden age ahead if we can get this confidence right, if we can actually not let things decay and break. I think we have a very exciting next generation. We're all very lucky to get to live in a time where we're curing diseases, people are going to live longer.

Where's the environmental opportunity?

I think environment's only gotten better as we got wealthier, right? It's like society gets more green when it gets wealthier, it gets more clean. Having a competent EPA, I'm not— there's some people on the right that want to get rid of it entirely, some people on the left. They just want like this stupid kludge and tons of like useless bureaucrats. Like, let's have a competent EPA. We all want a clean environment. We all want, we all want competent regulators, right? We all want, we all want things that, but you know, as we get wealthier, we're all on the side. Like, I have 4 daughters who are very young. Of course I want everything to be perfectly clean. This bullshit. Like, I'm not, there's like this weird caricature of like that anyone, anyone would want like poison lakes or something. It's disgusting, right? We need, we need to all do this correctly. But no, I think with, with technology getting better, you know, with our, with making our government competent, I think we could potentially have a very peaceful, very, very positive next 20, 30 years with the right leadership.

And we're going to solve some of the problems we've outlined here, whether it's homelessness or education or healthcare.

The thing is, Erik, the reason I'm an optimist is that there's good answers to all of these things. You can look at what Cicero is doing, you look at what others are doing. There are good answers that actually work to help people to address each of these things for less money than we're spending now in a way that's really positive for our country. So let's get competent people in charge and let's address them with good answers. And I think that's the best thing for all of our families.

That's a great place to wrap. You're doing that very important work with Cicero and HPC and your various other initiatives. My guest today has been Joe Lonsdale. Joe, thanks so much for coming on the podcast.

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