Transcription
So, if you had kids that were 16 years old now, Ray, and they said, "Dad, what what you think based on everything you know about the future, what should I be doing?"
First of all, there's the question of what what what matters most in your lifestyle. So, I'm going to get philosophical, not assuming that the highest income is the best. Okay? Because happiness, you want happiness and health. And so, when answering your question, there's very little correlation between the amount of money you have and the level of happiness that you have past the basic level. And so, I could be answering your question first, which the obvious way is to say to earn the most amount of money, and I want to start off in saying that, you know, my experiences and so on is, like, I love being in nature. And it doesn't cost me hardly anything. I mean, it depends where your pull is. And so, don't lose sight of your pull and what it's about.
What you want to do is you want to get above the level that you don't have to panic. We just earlier discussed how many months can I live and to be able to secure that and to be excited and have that passion or that whatever it is, the life that I want to have. So, I just want to emphasize, keep in mind of that. But then also, you know, my principle is make your work and your passion the same thing, and don't forget about the money part. Right?
So, know your nature. This is what I tell my grandkids. Okay? You have a feel, and you also have a nature. It's not just your preferences. People think differently. Some are more adventurous. Some are less adventurous. Some are more conceptual or artistic and can think with imagination and they love doing that. Some people don't like that. Some people want to they may life should be more concrete and more certain and so on. That's your nature. You're partially you're a lot born with that nature and you also learn it in your earlier years. We know this of how how neuroplasticity works and so on. So, we all on a journey to find the match between our nature and our path. And you find though that path, but you can't forget about this money part while you're pursuing that path.
Don't forget about the money. So, if your you know grandkids came to you and they said I want to become a lawyer, would you say listen, that's forgetting about the money because I think AI might take that job or would you say yes, would you they said I want to be
I think you I
I want to do a thinking job.
Let me say that history has shown that it's not the most intelligent people or the most intelligent species that are the most successful. And it's not no necessarily those that work the hardest, although these things are very important. It is the those who species and people who are also most adaptable. And and so there's going to be great change in your lifetime. Okay. And so yes, today it's artificial intelligence. But if you went back not long ago, we didn't even know artificial intelligence would exist the way it artificial intelligence today exists. And the future will be like that. So, when you're nailing it down, you know, it used to be make sure that you know how to code. And then cloud code comes along and all of those who are coding are worried about their jobs. Okay.
So, what is it that matters? Okay? It is, um, it is the approach to life in a sense that produces that, um, you know, the the general understanding and also the adaptability. I think a lot has to do with knowing yourself. That's why in Building Bridgewater, uh, the personalities of the person were very important in what suited their jobs. And then I, uh, built this, uh, a personality profile test. Then I made it online for anybody to go take. It's about 30 minutes. It's free online. It's called Principles You. That'll tell you a lot about your nature. Okay? But your goal is to find that nature and what it what are the paths. And there are several paths and they're constantly changing to find that nature. Okay? You'd experiment. You learn. Okay? But you know, you probably, uh, were pulled into this job by your nature, right? And so and you and you made it work and here it is. It works in all of those dimensions and it's like that for everybody.
Yeah, I it's it's a it's interesting cuz you look forward to the future and I I think if I was a young person at this stage and I was trying to set out where to aim my career, I would be more confused now than ever before, especially cuz there was a contending with this, uh, unemployability crisis amongst entry levels.
If you're talking about you'd be confused because you can't anticipate the future. That's right. That's just the way it is, right? And and if you say, "What is it that I need given that reality?" Okay? I need to I need to learn. I need to know how to maximize the use of tools like AI to be able to in increase what I know and how do I use that to the best of my ability to be as useful as possible doing things that fulfill me.
Mhm.
Okay? So, that's what you need to do. You're asking what you need to do. Uh just get over the fact that you don't know what the future's going to be like. So, if you're looking for an answer, and is going to be a computer programmer, or is it going to be this or that? No, just be maximize your ability to know, which is so easy to do nowadays, right? So, maximize that, and then maximum use that to maximize your usefulness and in jobs that make you happy, and that's the thing that that's the best I can give you in terms of more mice 16-year-old. That's the best I I can give them because I I don't want to mislead them that it's the thing that it's the particular job. Okay? That'll mislead them.
You talked about this 80-year cycle, which results in this new world order, and it sounded like you were saying that near the end of the cycle, you see wealth inequality. And you see the Gilded Age, where some people have lots of nice things, and other people at the other end are struggling, and this is a function of capitalism.
First of all, um it's a reality that it's not only just a um a a wealth gap difference, and if the majority system is not working for the majority, well, you're going to have a problem. And yes, it is um it's contributed to these things where one wants to create more opportunity through education, and through other basics, that there's certain level that a floor that nobody should go underneath because it's bad for them, and it's bad for the society. And just to embellish on that point, my wife and I live in Connecticut. It's the on a per capita income basis, I think it's the second richest state. But 22% of the high school students have either dropped out of high school or are failing with absentee rates of greater than 25% and as a result, a lot of it is gangs, shootings, drugs, and so on that leads to a lot of incarcerations and the bill for incarcerations has become uh larger than the education budget. When you have that kind of cycle and so on, the system has to work for most of the people and and so on. So, you you um you you have that um dynamic. But it all comes down to productivity. And so, um the way I look at it is the government run by almost anybody can't make these things run well. I mean, governments do not things run well. So, what is it like to give them the money and expect that they're going to make things work well? And so, you look at this set of circumstances and you say, "Who is going to make it work well?" I And I don't know the answer. And these are budget considerations and so on. You have to prioritize to the things that make it work well. And and you know what that is? That is uh educating people to be productive and civil. We don't talk enough about civility, you know, how we work together to be able to achieve a a productive result. And the way these cycles go, it's more likely that they're going to have a big fight and we're going to have, you know, that problem and those kinds of things than we how we're going to come together and work out how to achieve this environment which takes care of wonderful education and productivity of people and all of that to make the society work better for most people. And that's the way it looks, and that's what's happened.
Capitalism leads to inequality, it seems.
Yeah.
So,
It doesn't have to. There are some societies um like in Singapore, some of the Scandinavian countries, some some societies, there is a a floor that everybody uh can have um good education, adequate housing, and adequate health care. The foundations. Okay? Because if you go below those levels, uh the society will pay terribly for it because those people will become liabilities, not assets of the society. They'll be disruptive.
So, what about wealth taxes? Cuz this is the big debate now. The the big debate in the UK at the moment is tax the rich. It's been all over our news over the last couple of weeks. The big debate in New York and LA is wealth taxes and tax the rich. Good idea, bad idea?
It's a very difficult idea in the following ways. I'm just talking about the mechanics. They have to sell the wealth. And and that contributes to get the money to pay the taxes. That's one of those things that can cause the bubble to burst, as we're talking about. And then um operationally, it's very difficult, unlike if they did it as um stepped up tax bases. In other words, uh right now, when you die, your capital gains gets put aside, and you don't have to pay capital gains taxes, you pay inheritance taxes. And there are ways that you can raise taxes and not hurt the economy. But we do have to realize that it will lessen investment because what wealth is mostly used for is to put it into investment. So, you have to do this with a at the same time the improvements in those that are going to improve productivity like education and so on. If you're just making transfer payments, wealth payments and you undermine the productivity of the society by doing that. In other words, you're just giving it for consumption and so on and the money's going from what was capital expenditures and those kinds of investments that make a better, more productive society to go to in a sense consumption and so on that doesn't produce that prod- productivity. That's going to be a problem. So, you have to think how do you make people productive and how do you make your society productive for most people or you're going to have to find a way where you say that other group of people who is not productive um the overall society can have a higher level of productivity but we're going to still establish this bottom that I'm talking about. The bottom in education, the bottom in conditions. And then you have to say who is capable of doing it. Building a s- uh a society that will be productive.
And who is that?
Well, yeah, as I say, you have this dynamic problem that um um typically a privately owned capitalist owned business will do better than their government counterparty.
Okay, so business is more productive typically than uh government entities.
That's the system.
So, entrepreneurship. You need entrepreneurship.
Yeah, and capital. In other words, people who are capable of making the thing they're responsible for productive. Okay. Run efficiently. Run efficiently.
You know, so you need those
Indisputably. And if you're doing that in government, you need that in government in order to be able to do it. And government has its own uh it first of all doesn't attract many of those people. And then it also has by its nature, knowing many people have gone into it, it it is almost dysfunctional as it causes all of this arguing and problems. So, those who want to be most productive tend not to go there. And then also, um it doesn't uh distribute well. These people do not They're not on the ground. They don't have the direct contact. They don't know what it's like. And as I'm describing, I see it this
Politicians.
Yeah, the politician who is says, "I'm uh I'm going to you know." So, you still have to come back to the question, who's going to make it run efficiently?
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What is the UK currently a cautionary tale of?
It's the classic cycle. They have gotten over indebted, underproductive, and they've run out of choices. In other words, there's not enough money. Okay. And because there's not enough money um to to do all the things, then they've gotten this internal political conflict going. And you've had uh six out of the last 7 years, you've had it a new prime prime minister. Because somebody else comes in and they got their promise. And And the promise doesn't pan out. And it doesn't take long to be that that I don't believe you the promise anymore, so you bring the people in and then you throw them out.
We We just had a brand new prime minister yesterday.
Yeah, I know. I'm I'm It's all part of the cycle. And so, what happens is they don't have the financial and the people move. It's just logical, right? It's just when you're heavily indebted and you're not as productive, and you've got large wealth gaps, what are you going to do? It's politics. Um you're going to say, "I can't raise taxes because if I raise taxes, besides having great internal conflict, people going to leave." Uh okay. So, I can't I can't cut benefits because those who are receiving whatever those benefits are are the ones that are suffering. And then, what am I going to do? Cut those benefits? So, now okay. But, wait a second. I'm running a big deficit or I don't have enough money. So, where does the money come from? How do I get out of not getting more in debt? And then what does that mean for the person who's lending to you? They don't want to lend to you, right? So, you're not going to get the money to finance the deficits. It's mechanics.
So, what is it they have to do to get out of that situation?
They're going to have to have a, you know, a major restructuring. You're going to have to, um,
Go bankrupt.
Right that. Yeah, well well, the the way the central banks work now is they do a mixture of printing money which produces inflation and then restructuring the debt in some way, like maybe changing the maturity. Well, um, and in these cycles quite often they put in capital controls because they think people are leaving, so they don't want them to leave and take their money with them. So, they put in capital controls that says you can't leave with your money, okay? And they'll have exit taxes. And that's the type of thing that happens until, you know, there's period of great turbulence. Then you, um, through a combination of restructuring the debt. Restructuring the debt means like quite often you lengthen the maturity of the debt.
Okay.
I think what's needed is a strong middle.
What does that mean?
Right now, there's a left and right and they're extreme. And as long as they're at war with each other, that's going to make things worse.
Yeah.
If you can find that middle course so that those that most extreme, um, are more alienated than those who say, you know, we're going to have to figure this out together. And then what I would do, that leadership, that core, I would have, um, something like a bipartisan commission in which smart people meaning who understand how economics and these things work of both parties work together to come up with a small and difficult plan. In other words, you're going to have to make difficult changes in order to make that work well. But if you can achieve that, you know, like sometimes in history great leaders of opposing sides have been able to come up with a plan. I mean, that's how the Constitution was made. You come up with a plan for operating that way, and then you impose those difficult changes. And then when I say this, I say that that's very difficult and very long shot. But unless you have bipartisan support unless you do it in a way where the pain is shared um and there's a sense that there is a um we're doing the right thing as well as not a sense, just a reality of doing the right thing to make most people productive. That is the best path forward.
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