Auren Hoffman (00:00.19)

Hello, fellow data nerds, my guest today is Oren Cass. Oren is the founder and executive director of the Think Tank American Compass and the author of the book Once and Future Worker, a vision for the renewal of work in America. Also, he has a great name. Oren, welcome to World of Death.

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Oren Cass (00:21.314)

Always good to be talking to an Auren. Always good to be talking with data nerds. I wish this was my day every day.

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Auren Hoffman (00:28.41)

Now, this is a podcast and we love to ask people about like statistics and data. And you know, when people think of like economic statistics, they think of like GDP, per capita income, et cetera. What are the common economic stats you think are most overrated?

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Oren Cass (00:46.81)

Well, GDP, I think is a good place to start. I think, you know, the thing about economic statistics is there's a huge, probably too harsh to call it a garbage in garbage out problem. But we've somehow gone from what are very specific, technical, narrow data points that have value, if you understand exactly what's in them and what they are and are good for to using them as just these.

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generic statements about the health of the country somehow. And so GDP is an obvious example of this where it's an incredibly important measure. We should be paying close attention to it, but it does not in any meaningful way sort of present a comprehensive picture of how the economy is performing. And then of course, one of the first things.

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Auren Hoffman (01:35.638)

Is there a particular stat that you really like? Like, okay, this is the one we should all be tracking.

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Oren Cass (01:41.594)

Well, I don't think there's any one. If I had to pick one, it would be productivity. But I think importantly, and this is sort of the next catch is one could say, well, productivity, that is basically GDP, right? Productivity times the number of people working gives you GDP. And that's exactly where the problem comes in. It's the first thing we do with our aggregate statistics is we divide them by the number of people and think that now we have a per person statistic.

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when in fact that sort of translation from aggregate to personal totally obscures all of the variation that you have in the world. And I think with productivity in particular, you then also have the problem of obscuring all of the variation in types of work that people are doing. And so for instance, there are some places where productivity data I think is actually quite good when we actually look at per person input in a given

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manufacturing sector, we start to understand something important about whether we are getting better at making things, whether we are applying more capital and better processes to generate more output from the same labor. That is an incredibly important thing to understand. When you aggregate and aggregate and aggregate and declare it's a $24 trillion economy this year instead of a $23 trillion economy.

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you're in fact not necessarily saying anything at all about the actual prosperity of the typical family as a snapshot and even more importantly, you're not really saying anything about the trajectory that we're on, whether the economy is actually producing progress in the way that we need it to.

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Auren Hoffman (03:24.182)

Now, American Compos put out this like cost of thriving index. And I guess one of the baseline assumptions of that is that it's just becoming more expensive to be middle-class in general, like bigger houses. And, and we have different expectations than we did before. Um, you're kind of like building in this like lifestyle creep of everyone in the country. Um,

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Do you think there's like a point of diminishing returns where like you just can't like have that lifestyle creep forever or how do you think about that?

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Oren Cass (03:57.414)

Yeah, Cost of Thriving Index is one of my favorite projects that we do and is intended to be provided as a supplement to our typical inflation measures. So this is another classic place where inflation measures are incredibly important. There are people out there who are like, the inflation measures are wrong. They're lying to you. I certainly don't think that as a measure of does the same thing you bought last year cost more this year? It's very important to know what is happening to the price level.

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Auren Hoffman (04:16.886)

Hehehe

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Auren Hoffman (04:27.084)

Yep.

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Oren Cass (04:27.654)

The problem is that in our economics and translating that into our political and policy discussions, we've taken that to be the end all be all of cost of living. So we've said, well, if you're, you know, especially if you look over a longer period of time, let's say over the past generation, if nominal wages are up 25% and inflation is only up 23%, then that means you're better off because you can buy more now than you could then.

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And again, that's important to know. You certainly want wages to be rising faster than prices and a quick callback. The way that happens is productivity growth. But it's not sufficient to say that if wages have risen faster than prices, then people are truly better off and it is truly sort of easier to afford the things you need. And there are a few reasons for that. I think...

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One, as you said, is lifestyle creep. And I wanna talk more about that because I think that's in a sense the most interesting one. I do wanna highlight just a couple of other things that are really important to keep in mind. One is that inflation measures are always quality adjusted. And so, you know, cars have way more whiz-bang features than they used to. And so you should expect it to cost more. And if you wanna know what's happening to price levels in the economy, you wanna correct for that.

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If you're a family trying to go out and buy a family car, unless you also still credibly have an option of buying the old one, then we have to acknowledge that buying a family car got more expensive in a way that an inflation measure won't and shouldn't. The other thing that I think is really important for folks to keep in mind and is really politically salient is something about insurance markets and health insurance in particular, which is that we very usefully risk pool.

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And we say, look, we're all gonna pay in. And as health technology improves and we have more and better treatments for, frankly, a lot of times increasingly obscure conditions, that's a wonderful thing. But we have to recognize that if we have the million dollar treatment available for the one in a thousand family that has a family member with a serious and rare condition in the aggregate, again, we're all better off.

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Oren Cass (06:48.698)

because we have access to that treatment. But if you're the 999 families that didn't need it, your health insurance premium just went up and what you've actually consumed and how you would assess your quality of life hasn't changed at all. And so I think healthcare is such a huge, typically people identify that as the key cost pressure. And it's important to understand that even as in the aggregate we can celebrate the progress we've made for your typical family, what's the median amount of family

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consuming in healthcare, it's not going up by that much at all. So those are examples of the sort of things that, I think the kind of typical, the economist isn't thinking about, but someone concerned about the wellbeing of Americans does need to think about.

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Auren Hoffman (07:35.234)

think about these things like in local like when I lived in San Francisco, if you think of let's say, 2011 and 2021, even though the rest of the country wasn't experiencing much inflation, like San Francisco had massive inflation, you saw just like all the key costs, restaurant costs were going up labor costs were going up dramatically, costs for your rent was going up dramatically. And then

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While the whole rest of the country started having lots of inflation post 2021, San Francisco actually had deflation, like all those rent costs, all those other kinds of costs started coming down, labor costs started coming down. So there's all these like weird like idiosyncrasies in the data too, right?

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Oren Cass (08:17.09)

Yes, well, that's right. So there's certainly, and that's another form in which our aggregation gets things wrong is geographically. And whether in GDP terms or as you said, in inflation terms, people are experiencing very different economic conditions in different parts of the country a lot of times. To your point about something like labor costs in San Francisco or housing costs, it's also important to notice the different things we can mean by inflation.

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because in some respects, if you say, well, demand for something has gone way up, so it's gotten more expensive. Well, yes, that thing costs more, but that's not inflation in the same way that there's just more money chasing the same goods is inflation. And so, those dynamics are very different. I think to your point, what someone was experiencing in San Francisco trying to make ends meet would not at all have been reflected in what...

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Auren Hoffman (08:58.849)

Yep.

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Oren Cass (09:11.682)

a lot of the inflation data would say. And we should be comfortable saying both are true. That the fed's inflation measure for purposes of thinking about the money supply is one very important thing to know. And whether our economy is effectively supporting people in building a middle-class life is also important.

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Auren Hoffman (09:34.574)

Now, how do you think about things like government transfers? Like since the 70s, maybe income hasn't increased that much by itself, but then if you include things like government transfers, you may have increased a great deal. Like how do you, how do you start accounting for those types of things?

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Oren Cass (09:50.71)

I think you just have to look at both. I think you have to recognize on one hand that government transfers have filled the gap for a lot of the ways I would say the economy has not been spreading prosperity widely. But also that is better than the alternative of not filling the gap, but it is much worse than the alternative of actually spreading prosperity broadly. And one thing...

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Auren Hoffman (10:15.659)

Yep.

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Oren Cass (10:18.766)

And this was back when I was doing my book a few years ago, what I found was maybe the most valuable chart that I sort of included on my presentations. It came from a New York Times report, just looking at transfer payments as a share of income. So something government keeps very good data on is, how much personal income is actually earned, all the way down at the, let's say, county level, versus how much of the income is being received through a government program.

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Auren Hoffman (10:47.47)

Mm-hmm. Including things that aren't necessarily income, like food assistance and things like that. Yeah, OK.

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Oren Cass (10:48.418)

what you see, you sort of start.

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Oren Cass (10:53.51)

That's right. And that's right. And that's a huge spectrum from things that we'd say are, real anti-poverty programs, food stamps, welfare payments, all the way up to things like social security and Medicare. And what you see, if you go back to the 1970s and you sort of shade in every county by how much it transfers, you see it's pretty broadly nationwide down at, around the 10% level, some areas up to 20%. You fast forward to,

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to the last decade, and some areas are still down at 10, 20%, particularly those sort of coastal urban hubs that have been generating tremendous wealth. In other parts of the country, you get these big red blotches kind of growing and spreading up to places where 40, 50% of the income in a county is actually transfer payments. And there are two ways of looking at that chart. If all you care about is consumption and material living standards,

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You technically look at that and you say, well, this is a triumph, right? That this is in a sense what we signed up for. We said all of the things we're going to do to maximize GDP, to quote, grow the pie. These we know are not necessarily going to be equal, but we can always redistribute, right? We can always raise, we can collect taxes from the winners, send that money to the losers, and then everyone is better off. And from one perspective, if all you care about is maximizing consumption.

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then that has succeeded. I think it is empirically true that material wellbeing, living standards, consumption are up everywhere by geography, by income level, however you wanna measure it. And yet we look at that chart and I think virtually everyone has the reaction you just had. This is not what we wanted and it can't possibly be good. We can be sort of making up for the failures in the economy which is better than not making up.

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for it, but we should also acknowledge that this is not good and it's not sustainable. It malforms the economy and the society in ways that people know are not good for themselves. It's not what people aspire to. And at the end of the day, if you say, well, you know, in the 1980s, you as a single wage earner...

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Oren Cass (13:14.098)

could provide for your family, you could actually afford a healthcare premium, you could actually put your kid through college, et cetera. And today that's not true, but hey, that's okay, because now we pay for your healthcare and we pay for your college. That's not the same thing. And people are right to say something incredibly important has been lost in that transition.

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Auren Hoffman (13:37.666)

So it sounds like you, you're not necessarily like someone who'd be really in favor of like a universal basic income.

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Oren Cass (13:45.114)

No, definitely not. And I think for two reasons, one, both because from the perspective of the sort of recipients and the effect on the society, I think it's just a terribly broken model for human flourishing. But equally, I think it's important to see politically what it does for the winners. It is a get out of jail free card. Where do I write, right, where do I write a check to not have to think about what has actually happened? And I think saying that is

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Auren Hoffman (13:57.516)

Yep.

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Auren Hoffman (14:05.534)

Yeah, it absolves you of any guilt, right? Yeah.

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Oren Cass (14:13.382)

that is not acceptable, you cannot write a check and redistribute cash to make up for lost social opportunity and sort of equality of citizenship. In fact, the sacrifices that the winners are going to have to make are in a sense gonna be a lot more costly than writing a check if we actually wanna have a functioning democracy at the end of the day.

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Auren Hoffman (14:37.11)

Now the wealth inequality has gone up, let's say since the 70s as well, the top 1% hold maybe about a third of the total wealth, but though it's a bit misleading because I think the bottom 25% has negative wealth. What's the ideal wealth inequality number we should be shooting for?

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Oren Cass (14:57.686)

I don't think there's an ideal. And I think just briefly, a brief digression, I think that's an important point generally is I think particularly on the right of center or libertarian folks get very nervous about any of these sort of economic critiques and they say sort of, oh yeah, well, like, well, you think you know what the right answer is somehow, right? And like, we can't have these government planners picking the numbers.

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And I totally agree with that. I think the idea that someone's gonna come up with the right number for these things is not true and not a good model for policymaking. I think whether the right metaphor is a dial or a pendulum, we are able though to perceive when something is wrong and when we need to go in a different direction. And to some extent, you'll always sort of be bouncing guardrail to guardrail, but it is important to our politics to be comfortable saying,

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Auren Hoffman (15:43.916)

Yeah.

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Oren Cass (15:52.89)

this is not right and this is the direction we need to be course correcting in right now. And so I think that's certainly the case with wealth inequality today. You know, I do think it's important to some extent, I at least am someone who care more about income than wealth. And the reason for that is that I think at the end of the day it's important to recognize that most households are not going to save very much.

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that it's sort of simply a natural function of certainly a capitalist economy that your families in the middle are going to be pushed to spend most of what they earn. And so to say somehow that, you know, an ideal is that everybody is saving the way the wealthiest in the economy are saving doesn't really make sense. That being said, I think, you know, you should certainly want to see some capacity for saving.

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the optimal saving for your typical household is certainly above 0%. And partly just because it, that yes, exactly. That's right. You should want to have a cushion. You should want to, it also speaks to a sort of forward.

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Auren Hoffman (16:55.077)

Even just for insurance for rainy day stuff right?

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Auren Hoffman (17:01.422)

In case you lose your job, you could survive for a couple of months.

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Oren Cass (17:05.194)

That's right. And it also speaks to a forward looking orientation. You should have things you are saving for in a sense. And so that's how I look at it today. It's not that there's some ideal percentage, but that we should aspire to a situation where the typical household is in a position to be saving, not just the $400 for the car breaking down, but to be saving toward retirement, to be saving toward...

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Auren Hoffman (17:09.147)

Yep.

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Oren Cass (17:34.978)

actually putting kids through school or setting them up. Ideally, it's not that you're saving for expensive private college tuition necessarily, but that you are putting aside resources that the next generation are going to need to start building their lives. And so in all those ways, I think you see households under excessive economic pressure today relative to what a healthy economy I think would look like.

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Auren Hoffman (18:03.074)

Now I put you like on the new right and where she like the new right kind of differ from like the traditional conservatives is you seem to have a much more supportive view of labor and unions. How is that evolving?

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Oren Cass (18:18.022)

Well, I mean, the labor question is a fascinating one. And I think, as you've described as sort of a new right view is exactly correct, I would say there are ways in which it is also the more traditional conservative view. And I always caution folks looking at our politics today to recognize that the sort of tax cut deregulation, free trade union busting model of, say, the Republican Party

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is a sort of weird late 20th century anachronism in a lot of ways. That if you actually go back to the tradition of conservatism, concern for worker power used to be central to it. If you go back to Adam Smith in The Wealth of Nations talks about the need for workers to be able to combine essentially because otherwise they will lose out against employers. John Stuart Mill explicitly, he questions the morals of anyone who would not.

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support workers in combining forces and trying to claim as much as they can of the surplus from employers. And so what I think the new right is somewhat returning to is a recognition that markets on their own with no constraints or no concern for power are not necessarily going to spread prosperity broadly. That you actually need...

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institutions within the markets, that you actually need to have a substantive view that we should want workers to do well and wages to be high for capitalism to work. And so that's where certainly my interest and I think a lot of the new rights interest in labor comes from. We are both comfortable saying organized labor as it works today in the US is incredibly dysfunctional, but then seeing the conclusion of that not being so let's just cheer its demise, but rather

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let's try to figure out what could work.

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Auren Hoffman (20:13.466)

And the way I, and not really knowing this world that well, but the way I see kind of the differences between, let's say the new right and the left on labor is the, new right seems to be very supportive of like things like the auto workers unions and other types of, you know, private sector employer unions, but they seem to be less supportive of government unions or teachers unions, other types of, is that correct?

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Oren Cass (20:42.314)

Yeah, that's definitely right. And I think, again, going to the question of, well, what's the traditional view? FDR was a staunch opponent of public sector unions too. If you take the logic that I described for why the new right would be so interested in labor as a countervailing force against private power and the power of employers or capital, that just doesn't.

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apply in the public sector. The problem with public sector unions as they operate is that the fundamental rationale for their existence and the way that they're operating, I just find very confusing. Who is on the other side of the table? The other side of the table, if you're negotiating what police officers or teachers should be paid, isn't a private

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Auren Hoffman (21:26.998)

Mm-hmm.

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Oren Cass (21:39.426)

represented by their policymakers. And so, I think any employee public private should be entitled to representation. I think having some form of organization that represents public sector workers and can communicate their views in the workplace is fine. But the sort of robust collective bargaining that we want to have in the private sector

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I don't think it makes any sense in the public sector where we already have a democratic policymaking process that is supposed to manage those conflicts.

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Auren Hoffman (22:17.07)

We did a World of Us podcast with Mary Kay Henry, the president of the service employees, international union. And I asked her if she saw any potential for like new alliances between labor and the GOP and she really shut that down. She really said she couldn't really see that happening, at least in this current climate. Do you think she's wrong? Do you think there will be these like kind of GOP labor relationships?

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Oren Cass (22:40.87)

There definitely will be. And I think the key point of tension, and SEIU is a sort of quintessential illustration of this, is that unions as they are operating today, certainly at the kind of national level, are predominantly political operations. I mean, to be blunt, they are extensions of the Democratic Party. And if you think about what the SEIU does, the amount of money that it channels to

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trying to get Democrats elected is extraordinary. The set of policy issues that it focuses on, if you go to its website, is sort of the full spectrum range of progressive issues without respect to whether they have anything to do with the actual sort of interests of workers in the workplace, and friendly without respect to whether they actually represent the views of union members.

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You know, one thing that has changed dramatically, and certainly more so on the private sector side, is that probably a majority of union members at this point are certainly not Democrats. And I would say probably are voting Republican, are Donald Trump supporters in a lot of cases. And that produces a really interesting tension. What is the role of

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someone like the head of the SEIU or the head of the AFL-CIO, if most members or even just a significant share have totally different political views and preferences and priorities. And I think at this point, what you see is labor leaders still pushing very much the view of, you know, our job is basically to support Democrats. But that's not where union members are.

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And I think you're starting to see a lot of politicians on the right and organizations on the right build those direct relationships with union members, with union locals. And I don't know exactly where it goes from here, but that question of, well, what happens when the union no longer represents its members is a very live one.

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Auren Hoffman (24:58.062)

I think the tension between like labor and innovation, how should we resolve that? Whether it's like automation, AI, some of these other disruptive technologies that could destroy jobs. Like, how do you think about that?

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Oren Cass (25:11.346)

there's definitely a potential tension there. I think the flip side is that at the end of the day, we're right back where we started again on the issue of productivity. You know, what I always emphasize is that all those forms of technology where the rubber meets the road on their connection to workers is that they enhance the productivity of the typical worker.

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And the other way of saying that is they quote, destroy jobs, right? But destroying jobs and enhancing productivity are at least in a static analysis, literally the same thing. You're talking about the number of hours of labor required to produce an output. And so in that respect, some new technology, automation, is literally the same thing as more training, right? No one says...

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Auren Hoffman (25:50.924)

Yep.

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Oren Cass (26:00.834)

Well, labor and training are in conflict because if you train workers and make them more productive, that's something they wouldn't want. Of course, it's something they do want. The reason that some of this sort of automation and technology tends to, I think, raise more of a problem and more conflict is because it's broadly understood and empirically has been the case that workers aren't sharing in the games that generates.

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that if you bring in automation so that a factory needs fewer workers and say, but guess what each worker gets paid commensurately more, especially if you're in a growing economy with growing output, that's fantastic. That's the exact model that we saw in the middle of the last century where, again, using manufacturing as an example, you had productivity growing at say 3% a year, but output was actually growing faster than that.

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So the formula was, look, each worker, to be very abstract about it, each worker can produce twice as much, but the result is that the factory produces twice as much. We still need all the workers and they can all be paid a lot more. What has gone wrong in, especially post 2000 in the era of globalization is that when we see those continued productivity gains, we don't translate those to more output. We translate those into fewer workers.

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Auren Hoffman (27:10.284)

Yeah.

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Oren Cass (27:28.93)

And we then translate the higher profitability of that, not even to higher wages for those fewer workers, but to higher profits for the shareholders. And labor quite reasonably says that, that is not a deal that we're interested in. So I think there's absolutely a potential formula in which labor is aggressively pro-productivity gain, but it's only going to work in a situation where the corporate sector also understands

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The premise here has to be growth in output and wages, not merely growth in profits.

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Auren Hoffman (28:06.698)

It's hard to know how these things are going to play out though. Like I've seen some people in the new right come out for slowing things like self-driving trucks to protect like the trucker jobs. Um, but like, again, it could be like, end up being really good for truckers. It could be really bad for truckers. It's very hard to know. And we might not know for 20 years. So like, okay, just in case we want to slow it, like, how do you think we should think about those things?

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Oren Cass (28:29.422)

The trucker example is a great one. And it's one where I think there have been some folks who say, hey, we have to slow this or ban this. That has prompted some very active debates on the new right. Because I would say most people recognize that's not the right answer. You could have a much longer sort of populism discussion. But there are very important and healthy forms of populism that say we need to take more seriously.

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the concerns that have gone unattended to of typical people. And then there's the populism that sort of, let's say things that sound smart, but aren't. And I think though, like, well, let's, automation is bad, we should ban it, clearly falls in the latter category. But I think it returns right back to the prior question you had about labor, where in a world where workers have no power,

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And I think this was a lot of the concern about Uber when it was sort of first making inroads last decade. If you have a situation where you're introducing new technology and potentially disruptive technology and there is no regulation or worker power to ensure that workers are protected and benefiting as well. And it's important to emphasize both. One of the reasons I think conservatives in the new right are so interested in worker power.

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is because it's better than regulation. We would much rather have workers in a position to bargain with employers and work something out than decide the federal government's gonna come in and figure something out. So in a world where you have worker power and using truckers as an example, in a world where truckers have some power and are well represented, then to your point, automation could be a great thing for truckers. In a world, and frankly, it is even much closer to the one we see now in the trucking industry.

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where truckers are used as sort of disposable commodities like crankshafts and carburetors. I don't even know if trucks still have crankshafts and carburetors, but let's say they do. In that world, then yeah, I can certainly understand why truckers are concerned. And so, so much of what we do at American Compass and what the new rights economic thinking focuses on is a

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Oren Cass (30:52.95)

is exactly this sort of thing, which is how do we both recognize that progress and technology and growth are good and we want and need them, but get away from this sort of market fundamentalism of just trusting that they will automatically work out well? Because I think the left tends to air in sort of just thinking that capitalism and markets and growth, these are bad and scary things,

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the right has erred in its own right in being far too trusting of them. And where what I would call a much more traditional and useful conservative point of view can play a role is in saying, no, this is the path to prosperity, but there's also a lot of work that has to be done to make sure we are on that path.

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Auren Hoffman (31:45.83)

When you think of the work from home stuff that started happening in COVID, on the one hand, that can be really good and empowering. All these people can get jobs where it might be hard for them or now they can take care of their kids. There's a lot of things they can do from home that they couldn't do before. You don't need a car, et cetera. On the other hand, once you have a lot of people who work from home, it's a lot easier to export those jobs overseas. Really, you can have people anywhere.

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kind of doing those types of jobs. Like how do you see this kind of tension as we're getting more workers overseas to do things, whether it's software developers or data entry or accountants or a lot of the kind of more traditional white collar jobs seem to be very easily exportable all over the world.

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Oren Cass (32:29.738)

Yeah. I mean, I think what it comes down to with globalization broadly is that for globalization to work, it has to be balanced. And, you know, starting with trade, and then you can sort of broaden out from there to any kind of service job that you could do remotely. But trading goods is where it's most intuitive. The premise of trade benefiting everybody involved has always been that it's balanced.

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There are things that other people can make better or more efficiently than we can. There are things we can make better and more efficiently than they can. And if they make some of those and we make some of those and we trade them, we're all better off.

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Auren Hoffman (33:05.702)

Certainly even in the US, there's certain areas of the US that are really good at farming, certain areas that are good at making cars and they kind of trade it in a way.

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Oren Cass (33:09.34)

That's right.

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Oren Cass (33:13.518)

Right, even in your own town, there's the plumber and the accountant. I mean, right, like the basic case for specialization and exchange in an economy, that's great. The problem in globalization in recent decades is that we've moved to this very imbalanced form of it, where, and you see this in trade deficits, where a lot of things that we used to do and make here, people found ways to do and make cheaper elsewhere, but...

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Auren Hoffman (33:18.254)

Correct. Yep.

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Oren Cass (33:42.722)

it wasn't exchanged for things that we could do and make here that other people wanted. It's always funny to ask, hey, what's the stuff that people are offshoring to America? And people are like, well, that doesn't make sense. What do you mean? Well, technically, if globalization were working, there would be all sorts of stuff that people were offshoring to America. And there are some now, especially given the US energy renaissance, some extreme, even some steel processes have come to America because we have such cheap

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Auren Hoffman (33:47.65)

Mm-hmm.

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Oren Cass (34:11.426)

natural gas. Obviously, on the services side, lots of people off, technically the rest of the world has offshored its movie production, the Hollywood, right? So you do see some of it, but on balance, and especially in the traded goods sector and manufacturing, you've seen this massive offshoring away. And what happened? So it's a double edged sword because on one hand,

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Auren Hoffman (34:19.446)

Right. Yep.

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Oren Cass (34:39.47)

you're now making less. So like, yes, great, we get cheap stuff. And if we were talking about this earlier, if all you care about is consumption, maybe that's great. But you've greatly reduced your own industrial capacity, which is gonna have huge implications for innovation and growth in the long run, not to mention jobs and social health in the short run and national security. And even worse, it's not that the rest of the world is sending us this stuff for free.

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What we trade back is assets. So a current account deficit, meaning a trade deficit is exactly offset by a capital account surplus. What we are sending back in return for all the stuff other people are making is debt and equity and real estate, basically ownership of our economy and IOUs.

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I think you're exactly right that there's a huge concern if this expands to the service sector that just makes everything worse. If you start saying also other people are going to be the doctors and lawyers and computer programmers and again, they're just going to do that for us and we're not going to do anything for anyone else. We're just going to even faster send back more debt and assets. That's a catastrophe. If it were actually balanced, if all sorts of things we used to be doing here...

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Auren Hoffman (35:53.652)

Yeah

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Oren Cass (36:04.114)

could be done elsewhere, but just as to the same extent that was opening up new opportunities for us to do stuff, more things we were gonna make, more things we were good at doing, it could work out quite well. But that's the thing we've ignored and that we are going to have to find a way to get right because the alternative were just, the American people are going to quite rationally say, shut it down. If we can't get it right, we're not gonna do it.

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And certainly that leaves a lot of value on the table, but frankly, it would also be better than the imbalanced path we are headed down.

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Auren Hoffman (36:40.61)

Now, when people ask like Apple CEO Tim Cook about it, like because they manufacture in China, he says, well, it's not really, we don't do it really because it's cheaper. We just do, they have super high quality, high precision industrial capacity. Like, what do you think the big obstacles are if we really want to reassure some of these things?

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Oren Cass (37:02.106)

Well, I would say there are two huge categories. Well, actually, let me say three huge categories of obstacle. One is exactly what Tim Cook was describing, which is that we have claimed that this stuff doesn't matter for so long, that we have lost the capacity to do it, and we have lost the broader supply chains and ecosystems. I mean, it is infuriating that.

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Auren Hoffman (37:23.562)

It's not even like celebrated here. Like you don't, like if someone wants to be really good at trade, it's not a celebrated thing. Like it's still like, oh, they should go get a liberal arts degree instead or something.

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Oren Cass (37:35.066)

Well, that's right. We don't culturally encourage it. We also don't economically encourage it. And that's sort of the second bucket, which is part of the reason so much of this stuff moved offshore is that other countries recognized its value and put massive investment in public support behind it. Right? Like Taiwan does not have a comparative advantage in semiconductor.

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There's nothing about that rocky outcropping that makes it the best place in the world to fabricate semiconductors. That would say function of government policy. And so, one piece is just from an expertise and ecosystem building perspective, we have allowed ourselves to fall behind and it is going to be costly to catch up and we have to do it. The second is that we have to be willing to...

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make the same kinds of public investments to make it attractive here that other countries are doing. And again, you could say in an ideal world, maybe everyone agrees to disarm and not do that and just let the market work. But what you can't have is a world where everyone else is doing it and we are not.

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Auren Hoffman (38:46.722)

I had, when you think of these government policies, like in some ways, like if the government policy makers were competent, like it could work, but if they are less competent, like we've had a lot of government policy to kind of spur industry and, you know, with really mixed results and mostly not very great results in the U S like, like just cause we want to have government policy to let's say have semiconductors in the United States. It doesn't mean like it's going to happen. Right.

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Oren Cass (39:16.69)

Maybe, I guess I would disagree with that insofar as I would say the things that the United States chose to focus on, second half of the last century. I mean, if you were to say what were the things we were really focused on, I'd say it was probably medical technology, microelectronics, and aerospace. Those are three areas where I would say the US had essentially an industrial policy. In those three, the US...

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became the dominant world leader. I mean, it actually worked quite well in...

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Auren Hoffman (39:50.934)

But you could also say like where we like we didn't we had almost a policy against becoming like energy independent. Yet we still did it despite the policy in some ways.

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Oren Cass (40:02.614)

Right. Well, I mean, and the funny thing about energy is that it is about natural resources, right? Like energy and agriculture are the places where comparative advantage actually should function. And so to your point, America, essentially based on its shale formations, did have such an extraordinary opportunity there that even very bad government policy couldn't hold it down. You know, you could say the same thing, whatever one thinks about our farm policy, you know, America's...

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is an extraordinarily productive agricultural sector because we have the land and weather for that. But in those manufactured sectors, taking semiconductors, the US did become the dominant leader in semiconductors as a direct function of a wide variety of massive government policy and investment and prioritization. We did a case study at American Compass on this, like, where did Silicon Valley come from?

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I mean, yes, it was very important to have the people in their garages innovating, but at the end of the day, virtually all of the funding that made it possible both to develop those things and as importantly to scale them up and the supportive ecosystem to actually develop the modern computer industry, all of that was a function of public policy as well. And it's really interesting to compare something like semiconductors.

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where we were still in the 60s and 70s in a model of caring that we made it to the sort of next technology of, you know, LCDs and flat screens and mobile devices that started kind of coming online in the 80s and 90s. Those were all invented here as well. But we did not take seriously that we cared about being the place where they were scaled up. We did not make the investment, others did, and that's where it went.

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Auren Hoffman (41:55.222)

And you don't think there's a correlation between the quality of the policymaker in the 60s or whatever versus the quality today?

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Oren Cass (42:06.95)

There could be. I certainly think government capacity is a concern and we need to be doing better on it than we are. At the same time, it's not clear to me that we have worse policy makers than we did in the 70s. Like I haven't seen any good research on that. And I think it's also, again, interesting to still see that in those places where we decide we do want to do something.

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Auren Hoffman (42:25.439)

Okay.

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Oren Cass (42:37.502)

we often do it quite well. I mean, operation warp speed is a quintessential example of this. And like, even, you know, now you have folks with varying views on whether mRNA vaccines are good or not. Like, fine. But when the government decided that was something we wanted to develop, and like from a standstill to mass production on an unprecedented timeframe,

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Auren Hoffman (43:04.362)

Yeah, it was pretty amazing.

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Oren Cass (43:06.642)

actually did it. And so I guess the last thing I would just say on this point is it's really important here that we not let the perfect be the enemy of the good. I think there's a lot of argument, especially on the right about government failure and what's called like public choice, the fact that incentives aren't perfectly aligned for policymakers and so forth. And that's all absolutely true, right? Like I'm not here to tell you that we should

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Auren Hoffman (43:07.594)

Yeah, that's a good point.

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Oren Cass (43:35.366)

We should choose to do these things and we're going to implement these brilliant, flawless policies and it's all going to go great. But that's not the relevant standard. The question is, would doing this stuff be better than not doing it? And when we see the result of not doing it, and conversely we see that many other governments with all of their failures, I mean, like, you know where it's hard to like do good government economic policy is inside like a communist party.

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Auren Hoffman (44:01.264)

Right, good point.

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Oren Cass (44:02.49)

Like you wanna talk about like public choice challenges, try like being in a communist party. And yet at the end of the day, when you can identify, again, not like this is the startup that I want to invest my personal cash in, but hey, you know what? Semiconductors are important. And if that's the case, then people building big semiconductor fabs, we probably need to provide support too, especially in so far as the rest of the world is gonna offer them support to do it there instead.

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Auren Hoffman (44:30.446)

No, it used to be if like you want to be a barber or, you know, someone cuts hair, or you want to be a massage therapist, or you want to be a florist or something like that, like you would kind of work at another haircut place and, you know, you would occasionally watch the person cut the hair and you'd sweep the floors. You can kind of learn the trade and, you know, and then you'd kind of get up to like helping them a little bit and then you would start cutting someone else's hair and then maybe we eventually go like, you know, open your own place. Today.

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Like that instead of that training being on the job, like everyone outsource that training to schools. They're literally a school you go to learn how to cut hair and you go into debt to pay for this school. And then maybe the government helps you with that money, but you're going to get to pay for the school. Then you eventually like, why, why can't we just like learn on the even like law, like what used to be you'd like intern kind of in someone's law office.

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and you'd help them and you'd probably sweep their floors and do a bunch of manual chores and a bunch of other things, but you'd kind of learn the trade. You wouldn't actually like spend like hundreds of thousand dollars on a school and go into debt. And then, you know, eventually you would get better. Like, why do we have to do like, to school to learn these trades?

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Oren Cass (45:43.91)

Well, I mean, there's sort of a, there's a social reason like that it has become culturally normalized that pursuing formal education is sort of a good in and of itself and you should pursue as much as possible. There's the sort of economic piece of it, which is that we basically created these open-ended subsidies to go get that kind of education, but nothing to get the on the job education.

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And then we also have all of the regulatory obstacles where we've been just gone and said like, you must have this credential. And...

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Auren Hoffman (46:20.734)

Yep, yep, that's true. You must have to go to haircut school to cut people's hair.

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Oren Cass (46:24.77)

Right. And so it's all of the above. And those are all mutually reinforcing, right? The more you have policymakers saying, everyone should go to college. And the more education, the better. And here's a bunch of money for it. The more that's going to be the cultural imperative, the more policymakers are then also going to want to create regulatory requirements to support that choice.

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You also obviously have professional associations creating, promoting these kinds of barriers, which then creates the pressure for the subsidy. And you also then have the cultural value that demands the restriction and the, it all kind of goes around in a vicious cycle.

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Auren Hoffman (47:08.106)

It just seems weird to me, like until, until 50 years ago, let's say 50, 60 years ago, you, you would, every skill, every course, you learn, you'd learn on the job, um, and, you know, and, and it wouldn't be, you'd start not glamorous. And so maybe it's just the fact that people don't like to sweep floors or something, but you'd have to sweep the floors. You'd have to do all these like non-glamorous things. You might wake extremely low wage doing that. You may not even get much of a wage behind room and board or something back in the day. Um, but like.

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at least you wouldn't go into debt trying to learn that thing. And it feels like you would also probably learn a lot more. Like there's only so much someone could teach you about cutting hair in a school or something, or like it seems like you'd learn a lot more with like a real live business about how to do it.

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Oren Cass (47:53.858)

Yeah, well, that's true. And I think that's also the case that there's an awful lot about work and doing a job that has nothing to do with the actual technical skill. I mean, right. Well, absolutely. And one thing that you hear a lot about sort of like skills gaps these days, and people say like, we want to do like advanced manufacturing, and we can't hire people. And everyone always in their head, again, from the same cultural point of view, takes that to mean like,

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Auren Hoffman (48:05.45)

Right, showing up on time is hard and just like dealing with people and listening to things.

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Oren Cass (48:23.958)

Oh, we need more advanced robotics classes of some sort. You actually talk to the employers about it. What they mean is, no, people who understand what it means to show up 40 hours a week for a job on time. And that's pretty good, you know, the passing drug tests. I mean, there are all sorts of other social issues at play, but it's not the technical skill. The one thing the employer is happy to do is, in a lot of cases, is help equip people with the technical skill.

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Auren Hoffman (48:36.543)

Right.

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Oren Cass (48:54.31)

And so I think, to your point, there's just been this shift in the society that takes this kind of formal educational path to be the one that is right for everybody, and that should be the focus of kind of the policy apparatus as well. And I mean, you could write and read books and books about everything that went into it.

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I do think you see though just this remarkable sort of shift in sort of 60s, 70s, roughly speaking is when we sort of abandoned, you know, trade schools and tracking and so forth broadly and a lot of it came out of the civil rights movement where there were a lot of very sort of unfair ways that we did education, obviously. And the determination was made that sort of...

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Auren Hoffman (49:43.55)

Yeah, yep, discriminating against people.

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Oren Cass (49:48.154)

the correct way to do this is to ensure that everybody basically has the same opportunity to earn a college degree. And we had this sort of college for all model. And then we sort of tried to sort of wrap that into every profession, career, job. The share of jobs out in the world for which the correct preparation is sitting in a, hanging out on a leafy campus and sitting in a classroom all day is

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is vanishingly small. And I think the good news is that after getting this so wrong, I do think most people have recognized it. When we do surveys, this is the issue where public opinion is most uniform. I mean, you get sort of, we ask people explicitly about tracking, like, hey, do you think we should have tracking in high schools? Well, middle-class families, 95% say yes.

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Auren Hoffman (50:35.594)

Yeah, it seems very bipartisan.

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Oren Cass (50:45.53)

And it doesn't matter whether you call it diverse pathways or just tracking. People are like, yes. You ask people whether they would rather have three-year apprenticeship or a full ride at any college they can get into. Parents even more so, and kids somewhat will say three-year apprenticeship. And so I think actually the politicians to some extent are the last ones to catch on to this, but I do think it's coming. It's one of the places I'm most optimistic for the next decade that we will actually

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see real reform and how things get done.

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Auren Hoffman (51:18.554)

A few personal questions. I'm really interested in nominative determinism. And since we both share the same name, I'd be really interested to, to ask you how you think your name has, or maybe has not affected your life.

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Oren Cass (51:34.387)

I've never been asked that question. I guess I would enter with a fair degree of skepticism that it's been especially important. Maybe that's not true, but I guess I feel like it probably at the margin has some effect on first impressions and so forth. But.

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Auren Hoffman (51:58.854)

I have learned that the median person named Orin is a millionaire, which is probably not true of the median David or something.

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Oren Cass (52:06.49)

Hehehe

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That's very true, but I think, yeah, you probably, there are probably a few confounding variables in there that you would have to control for in your regression before I bond to that one too much. But no, I don't know. I mean, you can also, we have me and you with our different spellings of it. I think you could do a really useful twin study on just people with different spellings of the name Orin.

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Auren Hoffman (52:15.158)

Yeah, that might be right. Yeah. Ha ha ha.

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Auren Hoffman (52:26.434)

Good point.

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Auren Hoffman (52:32.622)

Alright, what is a conspiracy theory that you believe?

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Oren Cass (52:36.314)

Hehehe

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Excuse me. I don't know. So I tend to be very skeptical of conspiracy theories mostly because I'm very skeptical of people's ability to conspire. And so I think typically, keep a secret, execute complicated plans that pull off incredible things that no one thought possible. I think it's typically better explained by just everyone sort of...

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Auren Hoffman (52:54.866)

Like to keep a secret in a way or?

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Oren Cass (53:09.094)

going about pursuing their own interests and incentives. But in the spirit of the sort of off the wall or discrediting ideas, I will say I'm quite skeptical of most of modern science. I think the, when I look at sort of, especially physics, well, there are replication problems. I mean, much more fundamentally like quantum physics strikes me as almost entirely goofy and made up.

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Auren Hoffman (53:29.266)

like the replication problems and things like that or.

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Oren Cass (53:39.342)

Even like our, even our explanation of like electricity and electrons. I'm like, this seems like we probably don't really understand it at all and have like sort of, sort of mashed on. I always liked the, and now the example of the epicycles back before you had your, your heliocentric model of the solar system. People managed to construct sufficiently bizarre kind of epicycle models of how

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Auren Hoffman (53:39.491)

Oh, OK. This is interesting. I like it.

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Oren Cass (54:05.926)

the other planets circling within themselves as they circled the earth sort of followed the patterns that were being observed. I just think it seems to me we are wildly overconfident in the capacity of human intelligence to actually understand the universe and the what would be bizarre coincidence that at this exact moment in the early 21st century, we sort of suddenly really nailed it and just figured it all out. I think it's probably much more likely that things are...

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far different than we understand them to be. And we are just sort of, to this point, have achieved our latest kind of feeling different parts of the elephant gloss on reality.

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Auren Hoffman (54:47.69)

When you know, like when you decide to go into first principles on something like I've never proved to myself that the world is round, but I just kind of accept it. I mean, it's possible someone later could like prove it that it isn't. Um, but like, I'm just like, except I'm not going to first principles. I'm not like actually doing the core calculations. I'm just, maybe I did at some point in like college physics, but I've completely forgotten that. Um, so I just like, I just accept certain things, certain tenants of the world. But like.

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There's that could be bad. Like there could be points where you like, you should go to first principles and really prove it for yourself. Like, how do you know when to do that and when not to.

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Oren Cass (55:26.118)

Yeah, that's a good question. We have some pretty good pictures of the earth where it looks round. So I think that helps as well. You know, I think that's something that's, I think a lot of people are struggling within modern society today where you sort of, there is so much expert guidance and so much that people aren't sure whether it's actually all that good.

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Auren Hoffman (55:30.638)

It's true. Good point.

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Oren Cass (55:53.69)

And certainly the experts have not covered themselves in glory in recent years. And so, I guess there are two things. One is there's the sort of, where is a first approximation good enough, right? Like we clearly understand electricity well enough for the electricity grid to work. So I'm good with that. I'm going to sort of pick my spots, obviously. And I've sort of in my own work chosen my one narrow place.

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Auren Hoffman (55:58.284)

Yeah.

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Auren Hoffman (56:10.954)

Mm-hmm. That's probably fine. Yep.

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Yeah.

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Oren Cass (56:23.502)

in areas of economic policy where I am determined to get to first principles and not just accept the approximations. But then I think the other place where it's really important and that we need to get better at and the sort of public discourse needs to get better at engaging with is distinguishing the actual expert factual knowledge from the value judgment.

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And we were sort of talking about this a bit right at the beginning where, you know, to what extent is the economic data factual versus sort of embracing a number of value judgments and assumptions that are internally consistent. But if you don't accept that value judgment, then you shouldn't, then you shouldn't accept the conclusion either. And I think there are a lot of places where you can look at the assertion being made and, and disaggregate, okay, what if this is the actual

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Auren Hoffman (57:08.012)

Yeah.

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Oren Cass (57:16.634)

fact that we know and what if this is something you've just piled for value judgments on to reach your assessment or recommendation and that's fine, you're not lying, but you actually are not an expert in any of those value judgments. And so I at least would like to understand what those are and or get back to the fact myself and try to make my own. And that's where I think

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Auren Hoffman (57:38.998)

Yeah, you can say like the cancer surgeon is actually really good at being a cancer surgeon, but they may not be actually that great at helping society prevent getting cancer.

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Oren Cass (57:50.198)

Yes, that's right. Or for that matter, assessing what risks and trade-offs people should make in their own lives as they expose themselves to carcinogens. Right? I mean, I think the, and that's where, you know, people get so frustrated with the so-called tribalism of our politics, but to some extent, it's actually really important and unavoidable that people find others who they trust they share values with.

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to trust in helping make those different types of decisions. Right? Who are the experts in my life that I might turn to in thinking about what levels of risk are acceptable in the activities my family does? Right? It's the public health person who understands exactly the epidemiological study on cancer rate is not someone whose opinion I'm especially interested in.

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on that other question, but you also can't ask me to go figure out every one of those for myself. And so that's where I think, you know, really more faith in and embrace of sort of a commitment to public social norms and moral judgments and values and communities that are going to kind of create a

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Auren Hoffman (58:49.706)

Right, yeah, you have to trust somebody.

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Oren Cass (59:09.762)

a culture. I mean, this is what culture is, right? Like Taylor Swift isn't culture in a capital C sense. This is the stuff that culture is. And actually thinking about how to craft a healthy culture that lets people lead their lives is, I think, something we all need to get a lot better.

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Auren Hoffman (59:30.028)

This is great. Last question, we ask all of our guests. What conventional wisdom or advice do you think is generally bad advice?

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Oren Cass (59:37.046)

Well, to some extent, most conventional wisdom and advice is bad advice because if that's what everybody else, well, because if that's what everybody else is doing, then just sort of, you know, there's some inherent value. I'm obviously something of a contrarian. But I will say, you know, this is one that has become so cliche. It's almost cliche to point out that it's bad advice, but I will do it anyway, which is that the sort of, there's the kind of follow your dreams model of like career construction

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Auren Hoffman (59:41.553)

Oh, okay.

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Auren Hoffman (59:45.774)

You gotta attack and do something different. Yeah.

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Auren Hoffman (01:00:03.298)

Uh-huh.

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Oren Cass (01:00:05.538)

and life construction, which I think is obviously extraordinarily bad advice for the most part. I want to pair it though with the other extreme, which I see popular in some corners, which is the sort of very effective altruism, like just go and earn a tremendous amount of money and then like somehow use that money for good, which I think is equally bad. You know, the sort of just follow your dreams model is bad advice because...

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First of all, your dreams may not like, particularly as a profession, right? Like follow your dreams as an avocation and find hobbies you love, that's great. But building your professional life around the thing you love doing may not actually correlate to you ending up getting to do something you love doing at all. And thinking about that is very important. On the flip side, the...

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Auren Hoffman (01:00:55.318)

I know a guy who's like a fairly successful hedge fund person, he's like his early 30s, and he's thinking of quitting to become a full-time singer. And, you know, I don't know, it just seems like that may not be the best. You know, it might work, but you might as well try it, I guess. You could always go back to the hedge fund world, but yeah.

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Oren Cass (01:01:12.687)

Yes.

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Oren Cass (01:01:16.878)

Right, no, that well, and you know, you certainly see this academia as another quintessential example of this, where it's like, well, I really love blah, so I'm gonna like get a PhD in that. It's like, okay, well, like, but like, please at least ask yourself the next question of like, what will I actually be doing all day for the, you know, every day for the next 30 years if I pursue that course? And is that actually going to be the thing I love doing? Because it's probably not. You know, the flip side with the effect of altruism is, there's a bizarre kicking down.

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kicking the can down the road that I think we see in so much of our economic thinking generally, which is like, well, I'm just gonna create a lot of wealth and money, but then somehow like somebody else is gonna actually use that usefully. And this may seem bizarre, but it's, I think, closely connected, like this is the stock buyback problem. Right, like, okay, well, the company can't think of anything to do with its money, so it's just gonna give it back to investors who will think of something better to do.

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It's like, well.

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Auren Hoffman (01:02:15.018)

I know you're against stock buybacks, but I guess if a company does have extra money and they can't buy back their stock, they're usually either going to pay their executives more, mainly the CEO, or they're going to give dividends to the shareholders. That's usually the other alternative they end up doing. Stock buyback at least is a more efficient way of moving. What's so bad about stock buybacks?

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Oren Cass (01:02:17.052)

Hehehe

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Oren Cass (01:02:41.87)

Well, so I would argue the dividend is the much preferable way. If you want to have a regular return to your shareholders of the money, of the profit you have generated, that's part of a healthy functioning capitalist system. Just saying we're going to...

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Auren Hoffman (01:02:57.858)

I mean, stock buyback is an alternative way than a dividend because it's much more tax efficient for the shareholders. Dividend you have to pay taxes on, whereas the stock buyback, like you don't pay taxes on it, you only have to pay, you elect when you want to sell and then you pay the taxes. So it's

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Oren Cass (01:03:12.81)

Oh, right, but that's just a distortion of our tax code, which we should get rid of. I mean, it drives me nuts when people say like, well, there's nothing wrong with buybacks. It's just the same as dividends. You say like, well, cool, then let's ban buybacks and everyone can do dividends. And then they go, oh, no, don't do that. It's like, ah, well, clearly there is something different about buybacks.

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Auren Hoffman (01:03:29.162)

Yeah. But I mean, like, let's say like somebody wants, like, I don't know, your company and you think your shares are undervalued, like why not buy, you know, or it's like, let's say you, you started, um, uh, publishing house with a buddy. And then your buddy, um, is, uh, you know, doesn't want to do it anymore. Like, why can't you buy his shares? Like, um, you know, and like, okay, great. Like, you know, like you buy, you buy the shares out from him. Like, does he have to go sell them to somebody else? Why can't he sell them back?

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to the company.

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Oren Cass (01:04:00.038)

Well, okay, so the example of sort of liquidating a partnership through a buyout of one partner by the other, I think is totally different from a public market stock buyback. I think the problem, and this can expect the effective altruism point, is that in any specific case with a stock buyback, you can say like, well, this particular company truly had nothing else to do with the money. At the same time, the entire premise of

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Auren Hoffman (01:04:09.504)

Okay.

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Oren Cass (01:04:29.01)

capitalism is that capital, shareholders, executives, corporations are going to think of productive things to do with capital. And if what you're saying is like, well, actually, no, I can't, I can't, you know, fine. If you're in a dying industry or whatever else, there are absolutely places where it's basically time to wind down a company. Problem in the US today is that that's not what

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Auren Hoffman (01:04:55.374)

Sure.

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Oren Cass (01:04:58.126)

what buybacks were doing. I mean, the funniest thing was like right after, I think it was GM, you know, resolved its negotiation with UAW, and here's like, and we're doing a $10 billion share buyback. I mean, it's like right as they're complaining like, oh, we're struggling in the electric vehicle space and you know, like you can't, you can say like, well, GM is simply a failed company that will never be good at anything. But you can't tell me that like,

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Auren Hoffman (01:05:07.992)

So.

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Auren Hoffman (01:05:13.185)

Yeah.

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Oren Cass (01:05:25.698)

an auto company at this moment in time, like has no good uses for capital. That's obviously not true.

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Auren Hoffman (01:05:32.33)

Well, and I certainly, I certainly agree with you that like going in debt to do, if you're a public company, like going in debt to do a share buyback seems like a crazy thing. And you've seen some of those where some of these companies like end up going bankrupt because they like, they went in too much debt to do share buybacks and stuff like that. That just seems like a crazy thing to do.

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Oren Cass (01:05:48.358)

Well, and that's the corporate sector as a whole. I mean, buybacks were, buybacks reached that level for the entire corporate sector in the last decade. You have the corporate sector returning, you know, more than a trillion dollars a year. And the defense of this as part of an efficient economy is like, well, good, it will then reach some more efficient use. And that's not something you can just assume. Like, well, who are the people out there like who are going to take this capital and find something more efficient to do with it?

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Auren Hoffman (01:06:01.9)

Yeah.

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Oren Cass (01:06:18.454)

And this is all a digression from the effective altruist point, which is saying like, well, I'm just going to be the guy who goes and earns a lot of money and by the way, like enjoys all the perks of that lifestyle. But then like trusts that someone else will take this money and actually do something useful with it. Like just not cool. And so my advice in contrast to both what I see as the sort of two wrong paths is just be useful.

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Auren Hoffman (01:06:38.22)

Yeah.

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Auren Hoffman (01:06:47.915)

Yeah, yeah, yeah.

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Oren Cass (01:06:49.05)

Be useful in charting your life's course. Be useful and don't trust some market value of how much money you've earned as in any way an approximation of whether or not you've been useful because it's not. Go actually be useful and you will be, I think happier than the people who simply follow their dreams and you will be more useful than the effective altruists. And so that seems like a good place to be.

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Auren Hoffman (01:07:12.538)

I love the fact that it's be useful. All right. Thank you, Oren Cass, another Oren for joining us at World of Dats. I follow you at Oren underscore Cass on Twitter. And I definitely encourage our listeners to engage you. This has been a lot of fun.

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Oren Cass (01:07:24.798)

I was about to say this was a lot of fun. So thank you.

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Auren Hoffman (01:07:27.458)

Amazing. All right, this is great.