Alec Ross | Companies, Countries, People - and The Fight for Our Future

Srini Rao

Alec, welcome to the Unmistakable Creative. Thanks so much for taking the time to join us.

Alec Ross

Thank you for having me.

Srini Rao

It is my pleasure to have you here. So I found out about your work by way of your publicist, but already knew about it from having heard a little bit about it on my friend Jonathan Fields podcast. You have a new book out called The Raging 2020s, Companies, Countries, People, and the Fight for our Future, all of which we will get into. But before we do that, I wanted to start by asking you, what is the very first job that you ever had? And how did that end up impacting the choices that you have made throughout your life and your career?

Alec Ross

Oh my goodness, my first job. So I have to preface this by saying I grew up in the coal-filled hills of West Virginia. So unlike a lot of places where there are all sorts of fancy jobs, that's not the case in West Virginia. So I worked as sort of a legal day laborer through a temp service, where what I did is I went into a factory that was wire rope. So literally the...

this steel rope that they put on bridges. And I worked in a factory for minimum wage, probably a little over three bucks an hour.

Srini Rao

One thing that I always wonder is...

what we don't see about what we typically consider blue collar work. If we're people who have, you know, what are typical white collar jobs. Because I'll tell you, my first job in high school was working at McDonald's. And I had this crazy Jamaican lady who was angry contrary to popular belief. Not all Jamaicans are, you know, Rastas who are high and happy all the time. But I'll tell you that the biggest lesson that I got from that job was humility. And I wonder, you know, when you are in an environment like the one that you were in, and I also know that you worked on a beer delivery.

truck from having read the book. What do we not see? Like, what do we misunderstand about people who work in those kinds of jobs?

Alec Ross

That's right.

Alec Ross

how hard the work is. I mean, look, I worked as a midnight janitor. I worked on a beer truck and a wire rope corporation. And, you know, look, I've also worked, you know, as a presidential appointee. And what I think the big difference between, you know, the boardrooms and the White House and a real understanding of that world is how...

physically and emotionally difficult it is. I think we oftentimes look at blue collar work as the work done by people who aren't smart enough to get other or different jobs. And if you actually do the work, and not just for half a day, not just as a tourist, but for weeks or months, you come to understand how much it demands of you. And...

it helps you understand the mindsets of folks coming out of that world. So I am, for all that I've done in my life, I think I was shaped as much by, you know, my time pushing a mop at three o'clock in the morning and that at a after country music concerts or delivering beer and really rough hollows, really tough hills where the bars are full at

8 o'clock in the morning from people getting off the midnight shift. I've been shaped as much by that as I have by any of the stuff that you'll actually find on my bio.

Srini Rao

Yeah. Well, you know, I wonder why we don't have the kind of empathy that we should for the people who do this kind of work. You know, you know, may have shared this story before on our show. So apologies for listeners have heard it. But I remember my dad telling me a story once about sanitation workers going on strike in India and India is dirty, especially in the 70s and 60s. It was filthy. And people basically didn't value the work that those people did because they were considered lower caste.

you know, when sanitation workers go on strike, you begin to see, wait a minute, these people are far more important than we realize. Um, how do we begin to sort of, you know, regain that kind of empathy? I mean, I know in a lot of ways your book really kind of touches on this.

Alec Ross

So there's an economic answer behind this, believe it or not. It's really a product, in my opinion, of the lack of upward social and economic mobility. The answer to this is actually in the story that you told. So given that the caste system was relatively fixed, particularly up until the 1990s when IT really began to take root in India, where you

Srini Rao

Yeah.

Alec Ross

The economic and social standing you had when you were born was the economic and social standing you had at the end of your life. And in the United States, I think that we had much more empathy for people coming from lower income demographics, when there were more people in power who either A, came from that demographic, or B, were one generation removed from that demographic.

Srini Rao

Yeah.

Alec Ross

So, and this is, look, there are economics behind this that basically show, you know, the American dream. You know, the idea behind the American dream is that if you work hard and play by the rules, you will be better off than the generation that preceded you. As an economic matter, the American dream has been on pause for going on 30 years now. And so the people who I worked with, you know, the people who'd be sitting on the other side of the table,

in the White House Situation Room or sitting across the table in the boardroom today are statistically much less likely to have come from public schools in West Virginia or who themselves will have achieved upward economic mobility different than their parents or grandparents. So we've become, we have a more hardened caste system now of sorts in the United States than we had decades prior.

Srini Rao

Yeah, well, I mean, it's funny you say that because, you know, my parents having been born and raised in India, then my dad becoming a professor here. I remember when I was first getting started with this sort of journey of writing books and doing entrepreneurial things, I was like telling my parents, you guys give advice that's all based on conformity. And then I finally started to understand that all their advice made sense based on the context in which they grew up, because to your point, they grew up in a system where their place in society was fixed. It was.

Either it was binary. It's either poverty or security, nothing in between. And, you know, that advice made a lot of sense. So they told my sister and I to pursue things that would make sure pursue careers that would ensure that we're well off. I didn't listen, obviously, but, you know, things turned out OK.

Alec Ross

Look, I mean, this is this I'm so glad we're having this discussion because it's under discussed and what one of the things that I see thinking of elites and you know, it's obnoxious to self identify as an elite but just as a matter of Education, you know, I'm a business school professor and household income Technically, I'm an elite which therefore makes my three teenagers, you know the children of elites and what's

Srini Rao

Mm-hmm.

Alec Ross

interesting for me and my wife, you know, I've already said I'm from, you know, the hills of West Virginia. My wife is the daughter of a high school principal and homemaker, is the obsession we've had with our own kids trying to make sure that they do not live with the kind of entitlement and in a bubble that we've seen among so many other kids that...

that are the children of elites. And it's tough. We live in Baltimore and my kids who are white have all gone to public schools that are more than 80% African-American, that are very, very diverse economically. But their experience is such an outlier. And when I talk to my social and economic peers, they almost...

think I'm insane sending my kids to public schools. Like they're like, how do you feel like putting your kids into a science experiment? It's really not like that guys, but it is a little scary just the degree to which we're an outlier here. And I'm not trying to pat myself on the back because there are costs associated with these choices that we make, but there is a new caste system of sorts in the United States and moving up to and through different.

economic classes is much more difficult than it was decades prior.

Srini Rao

Yeah, I mean, you know, if that was the argument, I mean, even I began to start recognize that, wait a minute, I'm the son of a college professor. Yeah, he wasn't, you know, doing well when I was growing up. But by the time my sister was in high school, my dad was a tenured professor. And I realized, like, that's a relatively privileged existence. Like, there was no question as to whether I was going to go to college and I got to go to Berkeley.

And I realized not everybody has those opportunities, which I think actually makes a perfect segue to talking specifically about your career trajectory, which is probably one of the most winding I've seen in all the guests I've talked to so far. There's not a single person that I've had on the show who's had a linear trajectory, but yours really struck me. I just, I kept, you know, I literally was like, if I plotted this out, how do you connect the dots? So how in the world do you go from, you know, being a school teacher to working at the state department to becoming a writer?

to the Kingdom Professor, what has been sort of the trajectory that took you in all these different directions?

Alec Ross

Yeah, it doesn't make any sense on paper, but there is an explanation behind it. I'll give you the short version. So, look, I was a teacher in Baltimore. I actually fell in love with and married the teacher across the hall. That's the mother of those three kids of ours. But one of the things, this is in the mid-1990s, and you know, this is in Baltimore, and it was sort of the stereotype of Rust Belt Old Industrial City decline.

Srini Rao

Hehehehe

Alec Ross

And when I was noticing my kids, the students I taught were anywhere from like 11 to 15 years old, I was like, what the hell jobs are these kids gonna get? They aren't gonna get jobs in the port, the factory, the mine, or the mill. But one of the things that I noticed was this fish and water like affinity for technology. The one hour I knew that the students would behave best was the hour we went to the computer lab every week.

And the 11 year olds were far more sophisticated about the technology than I was. And so I started a nonprofit, the purpose of which was to help young people in poor and urban communities get access to technology skills that would then become an asset in the workplace. And the way that I went from that to the State Department, so school teacher running a nonprofit, is we did a lot of work on the South side of Chicago.

And there was a state senator on the South side of Chicago. And I'm gonna be rude for a second and just say, when I think about a lot of state elected officials, tend not to be very exciting. Folks I don't necessarily always wanna spend a lot of time with. But this guy, Barack Obama, who represented this Senate district on the South side of Chicago, who was really into our work, I got to know him. And he had just gotten his ass kicked.

Srini Rao

Hehehe

Alec Ross

running for Congress. And he just got crushed running against a buffoon. And he was like, I'm going to run for the Senate. I was like, how are you going to run for the Senate? You just got your ass kicked running for Congress. And he's like, well, I made a deal with my wife. You know, I want to stay in politics and elected office and public service. And basically, I made a deal that I would, I would take one more shot and I'm going to take a big shot. And so I helped him run for the Senate and

Srini Rao

Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha

Alec Ross

Then after that, I ran technology policy for his first presidential campaign. And when it came the time to say, hey, you gotta come work for me, what job do you want? I was like, you know what I wanna do? I've spent all my time developing technology strategies and innovation strategies. I wanna do this in our foreign policy. So that is literally how a school teacher ended up, as a, you know,

Srini Rao

As a what?

Alec Ross

as a presidential appointee working at the State Department.

Srini Rao

What did you study in school? Was there anything related to this?

Alec Ross

Well, look, like any technology entrepreneur, I was a medieval history major.

Srini Rao

Hahaha

Alec Ross

I'm dead serious. No, look, I mean, I was, I was a, I was a medieval history major at Northwestern University. And I went into inner city Baltimore as a school teacher, teaching like social studies and reading. And the way that I arrived at technology was really as a byproduct of my focus on economics. So I was really interested in the economics of my students. And I saw, I didn't, I never cared about tech, not the technology in and of itself. I don't see the world through the eyes of an engineer.

In fact, I see it in the exact opposite in my books. Both of my books, in many respects, are sort of anti-engineering books. It's more about what are the cultural and social and economic effects of all this technology. But the way that I arrived in this world was as a product and part of having been a history student who was really interested in what the technology's effect on culture and power was.

Srini Rao

Hmm. Well, I definitely want to come back to talking about, you know, working with Obama when we start talking about government in particular. But let's talk about education, because you've been a school teacher. You have helped, you know, kids in schools. You've sent your kids to inner city schools. But one of the things you talk about in the book and you say this is that in 2020, Americans collectively owed one point six trillion in student loan debt. This debt can utterly cripple students long term economic prospects.

And Smith's program, I believe you're referring to Robert Smith, the guy who basically offered to pay off the student loan debt for it. I don't remember which college it was. That's right. Yeah. And it'd be a lifesaver for thousands of students, but it's a drop in the bucket when seen within the whole debt. Forty three million students and their families, one point six million in debt. It's completely out of reach for philanthropy. No individual can solve such a problem, not Gates or Bezos. If nearly every top billionaire put their whole fortune to the test. That's terrifying.

Alec Ross

This is Morehouse, an HBCU down in Atlanta, yeah.

Srini Rao

telling you this as somebody who has a mountain of student loan debt. And so two questions come from this. If you were tasked with redesigning our education system from the ground up, what would you change about it so that it prepares people like your kids for the future? And two, how in the hell do you solve this $1.6 trillion student loan problem?

Alec Ross

Gosh, well, I'll try to give short answers to that, because I could talk literally for all day about that. So I'll give three answers. Number one, one of the things that I'm most passionate about as it comes to changing our education system is I actually think too many people go to college. And part of what we've done is define success in the United States by going to college in which college you go to. So in my social circles, if a kid doesn't go to college, the parents are looked down on.

Srini Rao

Yeah.

Alec Ross

they're viewed as somehow a failure. But yeah, no, I mean, oh my goodness, you guys are crazy. You know, it's this academic achievement mentality, which look, my oldest son is at Harvard, and I guarantee you, yeah, so look, and I guarantee you my second and third kids will go to colleges and quite possibly really fancy colleges. But here's the thing, it's not for everybody.

Srini Rao

I'm Indian, I can relate.

Srini Rao

Hehehe

Alec Ross

And what we do, oftentimes a lot of the student debt is amassed by people who go to college in part because what the United States lacks, and if I were reforming the education system here, what I would try to build, are really great apprenticeship programs rooted in the skilled trades. So just by way of illustration, I sit on the board of a publicly traded Swiss company, and we are aggressive.

the Swiss apprenticeship program. And these are tremendous well-paying jobs, technical in nature, but they don't require going to college. And across the skilled trades in the United States right now, ever since we devalued the skilled trades in the United States, these really good jobs are underutilized. The average age...

of a master electrician in the US right now is over 60. The average age of a master plumber is almost 60. And yet a really good electrician, a really good plumber makes a lot of money. Multiply this by 30 other trade professions and you get similar dynamics. So one thing I would do is I would say we need to focus on the skilled trades. The second thing I would say is we need to really focus on

Srini Rao

Damn.

Alec Ross

making some of the pivots that other countries have made, recognizing that there's certain core content we need, every student needs to know, but too much of what our kids are learning is memorization, dates and names and repetition. Do 10 pages of multiplication and division, made 10 pages of multiplication and division problems as opposed to complex problem solving.

And if you look at the school systems that perform the best, whether they're the Nordic countries, whether it's Singapore, it's much more applied mathematics. There's much less memorization. It's much more interdisciplinary. So I do think that our pedagogy is behind the times in the United States. And then to answer your last question about college financing, this is a case where I really blame...

the colleges and universities. I think it is unconscionable that systems that have billions of dollars of endowment charge whatever they can get away with in terms of tuition. And it doesn't hurt wealthy people and it doesn't hurt poor people because poor people can oftentimes get needs-based assistance. It's middle class and working class folks who get hammered here.

Srini Rao

Mm-hmm.

Alec Ross

And so I do think that the way in which we finance education, where it is a sort of race to the top in terms of cost, is an absolute absurdity. I'll take us back to Switzerland, which is a wealthier country than the United States. The best universities in Switzerland cost about 10 percent or a little less than the best colleges and universities in the United States. So we've created all of these grotesque.

incentives in how we finance education in the U.S.

Srini Rao

Well, it's funny because I had friends from Denmark when I was studying abroad in Brazil who went to the Copenhagen Business School and they were shocked that I was paying as much as I was for business school because they all were going for free. And I remember the dean held a once a semester open house for students to come and basically talk and I pretty much took her to task and just grilled her for an hour straight and

one of the other students came out and was like, damn, dude, he's like, you didn't take it easy on her. I was like, why would we take it easy on her? She may think the president of the university is her boss, but it's your tuition dollars that pay her salary. So as far as I'm concerned, she reports to me, and I should hold her accountable. She left Pepperdine shortly after that. You know, needless to say, I wasn't popular with the administration when I recommended that they dismantle the Career Center divide, you know, all the salaries by of a

Alec Ross

for you.

Srini Rao

counselors by the number of students and give us a refund to hire our own recruiters. So I've never been invited back to speak there again. But you know, point being, Andrew Yang was here. One of the things he told me was that part of the issue that is causing this is the, you know, just sheer volume of administrators that we hire in basically what are bullshit jobs. Even my dad has told me this.

Alec Ross

Good for you.

Srini Rao

the dean has all these other positions like a provost. And I was like, what the hell is a provost? Like, what does a provost actually fucking do? And it turns out that there are all these sort of positions that are created that are all just bullshit bureaucratic jobs that students end up paying the cost for. So with that in mind, what do you do about that? And then also, one last sort of thought on the student loan debt thing, and then we'll get into the other parts of the book.

There's a Michael Moore document and you might have seen called where to invade next and he goes around to all these different countries looking At various social policies and he goes I think to Estonia if I remember correctly Where college is completely free and then he shows what happened in Europe in some of these places when you know These colleges tried to actually raise tuition the students basically went insane and went on strike He said here's what happens in the United States when tuition goes up which happens consistently and he just flashes to a shot of students sitting on a lawn at UCLA

So do you think that collective action by students has any power to change this? Like if students all said, you know, what the hell with this? We're not coming to class until you guys do something about this.

Alec Ross

I don't know. You know, look, I'm not shy about sharing my views. The United States right now does not have a culture of collective action. We did once upon a time. Now we really don't. We've become, collective action, the key word there is collective. And we have become an increasingly individualistic society. And so part of why I think the labor movement in the United States,

right now is weaker than it's been since, you know, early in the 19th century is because of the degree to which we've individualized our social contract. And the only way to do things like reduce the college of college or graduate school is through, you got it right, collective action. So in a hypothetical based on a theoretical based on a maybe that students did to come together and act collectively, could this produce change? Yes.

But it would also have to be national in nature, because Pepperdine is competing with UCLA, is competing with USC, is competing with Berkeley, is competing with UC Davis. And that's just in California, and on and on and on. So a movement cannot be as localized as movements in the past. Movements, the factory floor, which is where a lot of labor movements, for example, for example, would have taken collective action previously.

That's all distributed. Labor is distributed. Education competition is distributed. So the only way to produce change is in a distributed and organized way that is not rooted in the kinds of strong interpersonal relationships that have driven a lot of past movements.

Srini Rao

Yeah. It's funny you said it, because I've had this conversation with my roommate and he said that won't work because people are too driven by self-interest. And I think that makes a perfect segue into getting like really into the core of the book. You open the book by saying the social contract is one of the most basic features of human civilization in every society across the world. People have worked for thousands of years to balance the rights and responsibilities of individuals with those of larger powers like states and corporations.

The social contract is the accord that sets the balance. It defines the rights of citizens, governments, and businesses as well as the duties they owe to one another. And I think that to me, really what you've talked about in this book, the core idea is that the social contract is basically on the verge of becoming obsolete.

Alec Ross

Well, you know, the social contract is something that we can't live without. You know, ever since human beings were on two feet and figured out that they would be physically safer if they banded together rather than living on their own where they may get eaten by a saber-toothed tiger, agreements, accords, a social contract has existed between people. But there are times throughout the sweep of history where the social contract has to be substantially rewritten.

And I think we're at one of these moments now. Okay, I'll, you know, I mentioned earlier that I was a medieval history major. So if you don't mind my geeking for just a minute on history, I think of, I think for example, of this period in 40 years from, 40 years from 1800 to 1840. It's a period called the Engels Pause, where throughout particularly much of Europe, industrialization was taking root. So technology was changing everything. And.

Labor was going from the farm to the factory, from the countryside to the city. But this was the industrialization of the Charles Dickens novels, 11 year olds losing their fingers in the factories, people working 14 hours a day, six days a week in cities with soot-filled skies. And what happened? Well, first of all, there was the largest wave of revolutions in Europe's history. There were ideological movements like communism. The Communist Manifesto was written in 1848.

How then did industrialization actually work? Well, we rewrote our social contract. And what did that mean? What do I mean when I say that? It's like, let's go back to the factory. We say, all right, well, yeah, you can work in a factory, but we're gonna create this thing called a minimum wage. And yes, you can work in the factory, but we're gonna create this thing called a child labor law. So instead of 11 year olds losing their hands in the factory, you have to be 16 years old before working here.

And oh, by the way, if you work here for 25 or 30 years, at the end of that, there's gonna be this thing called a pension. And oh, by the way, so that we can all benefit from the spoils of industrialization, from the economic benefits of industrialization, we're gonna create a public education system which is free for everybody until they're about 18 years old regardless of what your last name is or what your zip code is. And so we effectively created a new equilibrium.

Alec Ross

in the relationship between companies, governments, and citizens that made industrialization work. But we're now in a new period where the base of our economy is no longer industrial. It's increasingly technology rich and knowledge-based. But thinking back to my kids, Srini Rao , like I have a 19-year-old, a 16, and a 14-year-old. The idea that they're gonna have one employer for 30 years or 25 years,

Srini Rao

Hahaha.

Alec Ross

and at the back end of that get a pension? Forget about it. Minimum wage. The federal minimum wage hasn't been changed in the United States in 13 years. 13 years. So what that means is since the government isn't changing the minimum wage, Amazon and Walmart are the ones who effectively set the minimum wage. So there's a sort of disequilibrium right now in the social contract. And the reason why the book

is my book is entitled The Raging 2020s, is in the same way in which industrialization wasn't working and caused the largest wave of revolutions in Europe's history and ideological movements like communism, so too do I think we're in a moment where the decades of economic stagnation are creating a sort of rage.

that are radicalizing people in the United States on both the right and left. I don't think it's politically deterministic. And the only way to get out of it is to innovate in our public policy in the same way in which we're able to innovate technologically. I mean, the very idea of a weekend, weekends didn't exist until a little less than 200 years ago. It was an idea of unions that said, hey, instead of just giving a Sunday off so we can go to church,

Let's also have the day off prior. And that was the concept of a weekend. Pension was an innovation. The first pension in the United States was by American Express, when American Express was actually a delivery company delivering goods into the frontier. These were all crazy ideas when they were first introduced, which became foundational to helping industrialization work. We need some new ideas to make the world of today's teenagers work for them when they're in their 20s, 30s and beyond.

Srini Rao

Yeah, I'm sure you're probably familiar with it. Richard Haas wrote this book called The World in Disarray. And I remember reading it thinking, God, I'm like, are we really, and this was probably three or four years ago and I read it and I'm like, we are this close to like massive civil unrest. And of course I think we're starting to see, that play out. One of the things that you say about shareholder and stakeholder capitalism is that right now our incentives pulls toward a more dystopian, Mad Max form of capitalism.

The incentives drive companies towards share buybacks instead of investments in workers, equipment and research and development. The incentives drive businesses to grow bigger through mergers and acquisitions than to fire rather than hire. And you say these incentives encourage breaking up unions and sending headquarters to tax optimized locales instead of to communities that are in a race to the bottom in taxes. The incentives mean refusing to pay even a cent more for renewable energy than fossil fuels.

And you say that capitalism is a system driven by incentives rooted in compensation, taxation, share price, and the way to enlist our most powerful capitalist and their companies to act in the interests of citizens and governments is to rewire their incentives, make it in the financial interests of executives, their boards and their shareholders to be better to their stakeholders. So I think that that, particularly for me, it's funny because I...

Coincidentally read Roger McNamee's book Zucked the same week I read your book and I couldn't help but see the overlap. So let's look at this in the context of a company like Facebook, who clearly in my mind doesn't act in the interest of stakeholders, especially as a creator in the creator economy. You know, like this is a company that has been built effectively on the backs of creators who've built their platform all for free without being compensated a dime for it.

Now Zuckerberg is like, oh, we're going to invest billions of dollars in the creator economy. I'm like, that's bullshit. You're basically giving people a refund for whatever money they spent on ads. And not only that, I have to pay to access an audience that I built and brought to your platform.

Alec Ross

I mean, look, so first some disclosures. First, I know Mark Zuckerberg. And so my comments on this will be based on some actual interactions with him. And the second I should say is I'm a capitalist. Like I don't want people to think I'm in favor of overthrowing capitalism, but I do recognize that capitalism isn't one thing. And in fact, stakeholder capitalism is the form of capitalism that dominated the United States from

Srini Rao

Yeah.

Alec Ross

World War II into the 1980s, the period during which we saw the most upward social and economic mobility in the history of the United States. So when I think about Facebook and when I think about Mark Zuckerberg, the first thing when I try to explain to people what the hell is going on with Zuckerberg and with Facebook, the most important thing to understand, I think first and foremost, is that there's a difference between intelligence and wisdom.

Mark has a very high IQ. He's not stupid, but he's not wise. It's really interesting. I mean, he started Facebook, I think he was like 19 years old. He was a gazillionaire by his early 20s. He's never seen the world or understood the world without getting to it on a private plane with an army of PR and government affairs people around him.

I really believe that he and the team he surrounded himself with have high IQs, but they are willfully ignorant and therefore negligent in stewarding the power of their platform. So I do believe that Mark believes he is, I think Mark doesn't necessarily understand the harm that...

his products sometimes have economically, psychologically, and otherwise. And there have been times, I mean a lot of this comes down to really been all things, there are people who have been on the board briefly of Facebook who left because they realize it is a cult of personality that's totalitarian in nature like Ken Chanalt, African American, incredibly successful.

CEO of American Express. I think he's the chair of the board at IBM. Really successful guy. He got on the board and then he quickly thereafter got off because what he was bringing was wisdom and it contradicted the worldview that Mark and a few of his other board members have Peter Thiel and Mark Andreessen, which is very deeply insular, very deeply Silicon Valley.

Srini Rao

out

Alec Ross

at the expense of a wider understanding of the world.

Srini Rao

Yeah, I mean, so if you're talking about people like Andres and people like Mark Zuckerberg, it's funny because I still remember really distinctly coming across Mosaic when I was in high school. And then, you know, if you're at Berkeley during the 90s, you got to kind of see all of this being built. And, you know, when it all blew up, we always jokingly said it was like watching the greatest party in the world across from the bay, across the bay and then the moment you got into the city, it was over. So how do you get them to develop a wider understanding of the world when they're basically surrounded by, you know, people

not just like them, you know, where confirmation bias is probably rampant. Really, I recognize that even in, you know, my own sort of ecosystem, the people that I talk to, which is one of the reasons I have such a wide array of guests, because I don't want to have one view of the world.

Alec Ross

So this is a case where I'm very pessimistic. And because I do think that when you have that much money and that much power, again, I believe in incentives, there aren't incentives necessarily for these guys to change. You know, Peter Thiel is a multi-billionaire who has built an intellectual architecture that he believes very deeply in. And it's hard to imagine what would shake him off of.

Mark Andreessen's a little different. I've heard from a pretty good source that Mark doesn't have a passport that his passport expired Like over a decade ago, and he just never renewed it He's a genius. I respect I respect him a lot But what does it say if it's true that Mark Andreessen doesn't actually have a passport? I think that's pretty interesting Mark I don't think is going to change. I just I don't

I think he genuinely believes and has arrived at a point in his life where he believes that 99 point something percent of the world is just substantially less intelligent and strategic than him. If so facto, they can get as angry as they want and he can choose not to care. And so going back to the theme of this, of...

stakeholder versus shareholder capitalism that I write about in the raging 2020s, we have to reorient incentives sometimes rather than hope for sort of a spiritual awakening. So if we want companies to consume sustainable forms of energy as opposed to burning fossil fuels, ultimately it can't be because of kumbaya spiritual awakenings, it's got to be because of economic incentives.

if companies like Facebook are going to change, it's not going to be because Mark woke up in the morning and saw the light, it's gonna be because he's regulated in a new way. And so I think that we are a world governed by our incentives.

Srini Rao

Well, that makes a perfect segue to talking specifically about government. You open the section on government by saying that representative democracy is inefficient by design, political leaders move in and out of power, policy goals change, public opinion ebbs and flows, checks and balances are designed to keep any one branch of government from moving too quickly. You know, you had a chance to work, you know, up close with Barack Obama. I remember reading his biography as well as Michelle Obama's. And I remember talking to a friend about this.

If you're on the campaign trail, it's easy to make all sorts of promises. But he said, imagine what it's like the first day when you walk into your office and you get your first intelligence briefing and like, holy shit, like this is what I have to deal with. I guess all those promises I made are going to have to put on hold. What do we from the outside not see about the reality of what, you know, the responsibilities are of somebody like Barack Obama when dealing with the magnitude of problems that he deals with? Because, you know, I think that often.

as citizens, it's easy to feel like that politicians are not acting in our best interest. I mean, I think if anything, you know, the COVID times, like how the hell does a Congress spend six months debating unemployment benefits while the rest of the country is like suffering?

Alec Ross

I mean, there's a lot to unpack in your question there, but I would start by saying that a lot of what a president of the United States does is unseen by the American people and that's all for the good. I mean, the fact that there has not been a large scale terrorist attack on the United States since September 11th of 2001 is a triumph of governance and everybody who's been president since then deserves the credit for it.

But every single morning at your intelligence, any normal American who was on the receiving end of what's called the presidential daily intelligence brief would curl into the fetal position. So that is, as a practical matter, a lot of what a president has to deal with, not just on terrorism, but on environmental disasters, on pandemics. Look at how

the Obama administration handled Ebola. It was substantially better than how the Trump administration handled COVID-19. So these are the kinds of things that occupy a president. Having said that, it does not, it ought not excuse a lack of action on those things that we need, that we know need to be acted upon. And so there are a lot of reasons that are holding us back.

from government doing its job. And I write at some length about this in the raging 2020s. But part of what is at the core of it, I believe, is the degree to which you could have a resolution in the United States Senate right now that said, be it resolved, the sun rises in the East and sets in the West, and it would be a 50-50 vote. That is how divided a country we are.

And we have never been so divided as a country since the Civil War, since literally a war where we were killing each other. This is the most divided the United States has been since then.

Srini Rao

Yeah. Well, one other thing you say about the United States is the United States has always had a more limited state social safety net than other Western democracies. American culture places a premium on individualism and self-sufficiency, which you alluded to earlier, and it tends to look down on 98% of those who receive support from the government. Unlike many other developed countries, the US doesn't provide free healthcare, higher education instead of relying on the state to provide a safety net. Most Americans receive benefits like healthcare.

and retirement savings through their employer. So what is the role and responsibility of government then in all of this if we're going to rewrite the social contract to bring society back to some semblance of equilibrium?

Alec Ross

So I think that first and foremost, we have to recognize that America's greatest strength is also its greatest weakness. Our individualism is, in substantial part, what drives us as the world's greatest innovators as well. You know, the very act for if you were not brought over on a slave ship from Africa or born here as a Native American, the very act of coming to the United States.

was an act of entrepreneurship. The frontier mentality, go west young man, was an entrepreneurial mindset. And so that enables an enormous amount of wealth creation. The responsibility of government in part is to not misalign those incentives, to make sure that we still have all the incentives that are out there for wealth creation, but to create more equal access to opportunity.

and to make sure that we don't become a sort of oligarchy where we have 30 or 40 people with more wealth than 300 million people. And that is the sort of Mad Max-like state that we've come into if you just look at the data. I mean, I'll just, I'll throw a statistic too out at you. I mean, if we go back, if we go back, I think it's 40 years, 40 years.

Alec Ross

the top 1% has grown $21 trillion richer, while the lower 50% has grown $900 billion poorer and the middle class has stagnated. That data is bananas. I mean, that's crazy. If the level of inequality had remained the same from the time that I was in third grade to present

than an additional 30 billion, I'm sorry, 30 trillion dollars would go to people, would go to workers earning at 90% or lower in terms of average household incomes, which is $1,100 per worker per month. And everybody says, don't tell stories that have data in it. But for me, those numbers, those numbers tell a really powerful story.

which is it shows, I mean, think about how much less rage there would be in the United States if every worker earning at 90% average income or below, we're getting $1,100 per worker per month more. And that's where we've lost the equilibrium. So the responsibility of government here, it's not redistribution per se, it's making sure that our systems don't enable a...

very, very small number of people to reap all the economic rewards of our economic system.

Srini Rao

Well, I mean, you say this about taxes. You say the wealthiest people I know, those worth billions and billions of dollars pay less in taxes as a percentage of earnings than I do. That's because in most cases they draw some salary, but the way they make their real money is through appreciation of their assets. I in turn probably pay a smaller percentage of what I earn over the course of a year than 20 something year old researchers who worked for me in the writing of this book. Which makes me think, you know.

how do you get billionaires to recognize that we live in an interdependent society that is actually causing this tremendous amount of inequality? Because I, you know, fortunately, I've gotten to see it, you know, from different sides in different parts of the world. You know, when I lived in Brazil, I remember there's this economic number called a Gini coefficient, which is the sort of income disparity. And Brazil at that time had one of the highest Gini coefficients in the world. And it was interesting because we went to school with it. We didn't realize it until

until we were there, the kids that we were going to school with were some of the richest kids in Brazil. Like they would show up and show for driven cars and you know this given your work in countries like Brazil and India. When people are rich and people are poor, it's not Hey, my dad's a doctor. It's no my dad makes fuck you money. And on the side his side hustle is exporting coffee, which you know, one country exports like three fourths of the you know, of the coffee for the world. Like it's insane. I mean, even in India, you see this right when people are rich, they are fuck you money rich like the Imbanis.

You know, like they had Beyonce as the entertainment for their daughter's wedding.

Alec Ross

I don't understand the Ambani's. I gotta be honest with you. I mean, it's one of those things. No, I really, I mean, look, let's talk about India. I mean, some of the most grinding poverty I've seen in the world, the two places that most impressed me were the refugee camps in the East Congo and the slums in India. And if you haven't walked through the slums in India, you don't understand what human suffering is. And so I literally don't.

Srini Rao

Neither do I.

Alec Ross

understand families with not millions of dollars, not hundreds of millions of dollars, but billions or tens of billions of dollars who don't give anything back. I actually don't understand it at all.

Srini Rao

Do you know what's even weirder about that, not to interrupt you, but they came from poverty, basically. Their dad was a gas station attendant.

Alec Ross

I don't get it. I genuinely, I'm flummoxed by it. I am absolutely flummoxed by it. And so let's say we can't change their minds, okay? I would hope we could, but let's say we can't. Then you have to change, then this means then that you have to reorient some things economically. So I guarantee you, they utilize a variety of different offshore financing mechanisms.

Srini Rao

Yeah.

Alec Ross

to shield the vast majority of their wealth from taxation. I mean, if you look at the list, if you go on Twitter and read the stories about, this billionaire paid no taxes and that billionaire paid no taxes and one FedEx driver pays more in federal taxes than FedEx and one 17-year-old barista at Starbucks pays more in federal taxes than Starbucks, at the end of the day, you have to change the rules because what they're doing is they're not doing anything illegal.

Srini Rao

Ah.

Alec Ross

The Ambani family is not breaking the law. Starbucks is not breaking the law. FedEx is not breaking the law. The billionaires who shield their income from taxation, they're not breaking the law. So what do you have to do? You have to change the law. And this is really something that is, this is a particular byproduct of the last 20 to 25 years. Part of what globalization has done is it's made capital more global.

Srini Rao

Yeah.

Alec Ross

But in so doing, what it's done is it's created a real race to the bottom for taxation. And it means the richer you are, the smaller the percentage of taxes you pay. And that then really enrages the working and middle class who end up paying for everybody.

Srini Rao

Well, I mean, you know, I think what I want to talk about now, you know, just sort of wrap things up is you conclude the book by sort of, you know, saying where we could end up and you give us two scenarios. One is if we don't change and the other is we do. Let's talk about what happens if we don't change. Like, what are we looking at? Is the United States going to turn into a developing country or start to feel like a third world country?

Alec Ross

I don't think we'll turn into a developing country, but what we will turn into is something more Mad Max-like, where we will have very wealthy people and we will have an increasingly angry and radicalized working class. What's interesting though is that America's working class is not unified politically.

Some go to the far right, some go to the far left. People draw different conclusions from all of this. So what I think we'll actually have is a more divided and angry country, because I actually don't think that we have, we don't have a recent history of class movements. It's not like there's gonna be a working class uprising in the United States, because in fact, no class is more divided in the United States than the working class.

What I also believe is going to happen, which has already started happening, is the wealthiest Americans are going to detether from the United States. I mean, as a practical matter, this is already happening. You know, the wealthy, and look, full disclosure here, I spend probably 50% of my time outside of the United States. You know, I teach in Italy, I sit on a board in Switzerland, you know, we vacation abroad.

A more extreme version of this increasingly is happening with America's wealthiest people where they have multiple citizenships, their money is parked, their money and their assets are increasingly globally distributed, they're less patriotic, they think of themselves less as Americans than as global citizens. We were talking earlier about Facebook and Peter Thiel, the Facebook board member, he is now a citizen of New Zealand in addition to being a citizen of the United States.

He's one of the few who's shared that, but I know that a lot of these people all hold multiple citizenships. And they will live and work at the 38 to 40,000 feet above planet Earth that their Gulf streams and Falcons will fly them. And so if things don't change, and if things get messier in the United States, then they will spend time in the United States in those places that they can and do enjoy that are really catered to their entertainment.

Alec Ross

And after that they'll fly to another place like that entertains them, that helps them live enjoyable lives on another continent. And they'll live in a sort of circuit that travels around the world. This circuit already exists. I see it all the time.

Srini Rao

So, so now I'm wondering why so you worked at the state department. So why is this not like this massive call to action to every single person who works in our government? Like why has every one of them read your book? Like has Joe Biden read your book? Like I mean, I'm just thinking like this, this should be front and center for, you know, politicians and world leaders like did my mind just based on everything you're telling me some of this is scary.

Alec Ross

Well...

Alec Ross

No, it is scary. And you know, I'll tell you, this book just came out. So I doubt Joe Biden has read it. My previous book, The Industries of the Future, there were, I think, five heads of state who told their people to read it. You know, everything from the president of Pakistan to the prime minister of Israel. I mean, I can't think of two people with different politics than that. So, so look, I do hope that the raging 2020s gets as big a global audience as the last book did, which was published in 24 languages.

Srini Rao

Ha ha ha.

Alec Ross

Having said that, why this isn't easier, why there isn't the call to arms, is the conclusions that people draw oftentimes are far different. And in my writing, I don't try to be the voice of God that says this is the solution, or this is exactly how you fix the problem. What I try to do is give examples of how different countries around the world are addressing these problems. The challenge we have is that there isn't a consensus.

in the United States. There isn't consensus around any of this. And so part of what we have to do is we have to drive public opinion towards certain points of consensus so that we can then change the rules around it, so that we can make sure that the FedEx driver is not paying more in federal taxes than FedEx, and that the 17-year-old barista at Starbucks is not paying more in taxes than Starbucks. Those are rules that need to be changed.

And in order to change the rules, we need to have governing consensus around.

Srini Rao

Well, so I have two sort of final questions around government in particular. My roommate is convinced that 90% of our problems are because of a two-party system. And I'm, as somebody who worked in the State Department for a Democratic president, what is your view on the impact of having a two-party system? Is it bad for democracy? Is it good? What are the implications of that?

Alec Ross

I think it's a good for democracy. This is a case where I strongly disagree with Andrew Yang. Part of what a two-party system has demonstrated in the United States going back to the 18th century is that power does move back and forth between the two parties, and when a party is in power, it can govern. The problem right now is that it's basically 50-50.

What I think is actually the reform that I think that would be healthier than a new political party is something called rank choice voting. And what rank? Yeah. And if you for those who are listening, you don't. Yeah. I mean, and so the problem we have right now, for me, is less the two parties than it is if you're a Democrat, the people who tend to get the nominations are the most doctrinal.

Srini Rao

Yeah.

Srini Rao

Andrew wrote about that in his new book, yeah.

Alec Ross

And if you're a Republican, it's the most Trumpian. And so we create incentives for people who won't compromise or work with anybody else. And I think rank choice voting would go a long way to fixing that.

Srini Rao

Yeah. So I have one final question about Barack Obama himself. I distinctly remember there's an interview he did. It was the very first one with David Letterman on the Netflix show. And he and Letterman are talking about success and they began to talk about luck. And David Letterman says, you know, while John Lewis was marching on our bridge in Selma, I was out partying in spring break with my friends. And Barack Obama says that, you know,

a lot of people who have worked as hard as we have and didn't get as lucky. And David Letterman says, I've been nothing but lucky. And what I wonder about somebody like Barack Obama is what is it that enables somebody like him to achieve at the level that he does to have that kind of charisma, to have that kind of impact on society?

Alec Ross

Well, first of all, let's acknowledge the power and importance of luck. So I told you earlier in this conversation, I worked with him on his first Senate campaign. After having gotten his ass kicked running for Congress, how did he win? It's not that he wasn't charismatic when he ran for Congress and lost and suddenly became charismatic when he ran for Senate and won. The difference in substantial part was luck.

So, you know, one person running against him, it came out that, you know, he was a wife beater, so he was out of it. The Republican who was gonna be very formidable, who he was gonna run against, it turned out that, you know, he was a swinger and that came out. Like there were all of these stranger than fiction stories that came out that turned all of these candidates who were supposed to squash Obama like a bug and effectively kicked him out of the race. So we had...

three or four tremendous pieces of luck. And so what I would say is, I do think it takes an enormous amount of discipline to achieve at a very high level. Barack Obama could never have become Barack Obama if he didn't waste time. The people I know who are the highest achievers, whether in business, whether in academia, whether in politics.

are people who don't spend a lot of time on the couch watching mind-numbing TV. They are people who they think about the hours that they are awake in the day and make the most out of it. And that can be recreation. It can be going out with friends and having drinks. It can be making dinner. It can be whatever it is, but it is a conscious choice about maximizing your time toward a given set of ends. And...

Srini Rao

Ha ha.

Alec Ross

That puts you in a position to succeed. That combined with the luck that Letterman described and which I saw with my own eyes, Obama benefited from, puts you in a position to pole vault into the positions of extreme success.

Srini Rao

So one other question about this. So I know that the Obamas didn't come from extreme wealth or anything like that. Like Michelle Obama grew up on the South Side of Chicago and read her book. I remember there was a documentary thing where they were on the trail, and they're like, we've just paid off our student loan debts. Now, eight years out of the White House, there are people who make millions of dollars. Like if I remember correctly, Michelle Obama's book was the highest advance ever paid out in the history of Penguin.

and it was like the unicorn of book publishing. How do people not lose sight of where they came from when they get to that level?

Alec Ross

I think part of it depends on at what age do you arrive there. So the difference between, say, the Obamas and Mark Zuckerberg is Mark Zuckerberg got there when he was 20 years old. The Obamas got there in their 50s, late 50s. So you know, look, I think the Obamas, having achieved success when they did in their life,

has a lot to do with it. I mean, part of what I find most obnoxious about some of the brotastic culture of Silicon Valley billionaires, for example, is they have a very fixed set of reality, in part because they were so successful financially, so young, but I actually think that a lot of the people who come out of that community who are the wisest are those who may have enjoyed success a little later.

maybe in their 40s. I'll think for example, I'll give a politically incorrect or undiplomatic example. What's the difference between a guy like Eric Schmidt who was the longtime CEO of Google, who's now a deca-billionaire and lives like a deca-billionaire versus the founders of Google? And Eric, I think has, you know,

contributed a lot more to society than the founders of Google. The founders of Google were grad students at Stanford when they founded Google. And they were in their 20s when they became billionaires. Eric was middle-aged when he became the CEO of Google. And therefore, I think, is much more philanthropic, has a much broader view of the world of humanity.

than the Google founders, who I think believe that everybody who's clever or work hard, if you're not a billionaire, if you aren't super successful, maybe you're a little lazy or maybe you're a little stupid.

Srini Rao

Yeah, it's funny. We had Rich Kahlgaard here who wrote a book called Late Bloomer's, you know, The Power of Patience in a World Obsessed with Early Achievement. And that book always struck me, you know, in relation to what you were saying is, Bob, you know, the benefits of succeeding later in life are actually quite significant, which I think, you know, is a perfect way to wrap up with two final questions. How has your definition of success changed with age?

Alec Ross

Wow, you know, I think the first thing is, when I was in my 20s or 30s, or teens and 20s, let's say, teens and 20s, I really think success was defined by position. Like, what's the title? What were you elected to? And now I think it's much more based on impact. You know, there are lots of senators in the world whose lives, from my standpoint, don't amount to shit.

There are lots of CEOs out there with big bank accounts who they will die and their lives will have not mattered because they won't have produced anything important. They will not have contributed even to their family in any meaningful way. So now I have a much more impact-based view of what success is than sort of the traditional objective measures of it. When I was younger, I was much more focused on

sort of the objective measures of success, now my measures of success are very different. Where it's kind of like, all right, well what did you actually produce? I don't care what job you had, what was the result of that?

Srini Rao

Amazing. Well, I have one last question for you, which is how we finish all of our interviews at the Unmistakable Creative. What do you think it is that makes somebody or something unmistakable?

Alec Ross

What makes something unmistakable? I think it is a product of passion, of conviction. I can't help but think that, I think back to the words of Theodore Roosevelt, who said, it's far better to dare mighty deeds.

to win glorious triumphs, even though checkered by failure, than to rank with those poor spirits who neither enjoy much nor suffer much because they live in a gray twilight that knows neither victory nor defeat. So I think of something as unmistakable as being the antonym of the gray twilight. You know, so many people live their lives, and as Roosevelt said,

in a gray twilight that knows neither victory nor defeat, just sort of going through life slightly dulled, no great emotions of either success or failure. And that which is unmistakable, in my opinion, is the opposite. It's what either makes you suffer much or enjoy much.

Srini Rao

Wow. That probably has to be one of the most thought-provoking answers I've heard of that question in 10 years that I've been doing this. I can't thank you enough for taking the time to join us and share your insights, your wisdom, and stories with our listeners. Where can people find out more about you, your books, your work, and everything that you're up to?

Alec Ross

Well thank you Alec Ross dot com, A-L-E-C-R-O-S-S dot com. My books, The Raging 2020s and The Industries of the Future. You can find them, you ought to be able to find them in any bookstore or any of the online websites from Amazon to Bookshop to the others where books are sold. My social accounts are at Alec J Ross and I just really appreciate this very thoughtful discussion that we've had.

The world needs more of these.

Srini Rao

Thank you. And for everybody listening, we will wrap the show with that.